Civil Monetary Penalty Adjustments for Inflation

<RULE> DEPARTMENT OF HOMELAND SECURITY <CFR>8 CFR Parts 270, 274a, and 280</CFR> <SUBAGY>U.S. Customs and Border Protection</SUBAGY> <CFR>19 CFR Part 4</CFR> <SUBAGY>Coast Guard</SUBAGY> <CFR>33 CFR Part 27</CFR> <SUBAGY>Transportation Security Administration</SUBAGY> <CFR>49 CFR Part 1503</CFR> <RIN>RIN 1601-AB11</RIN> <SUBJECT>Civil Monetary Penalty Adjustments for Inflation</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Department of Homeland Security (DHS). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> In this final rule, DHS adjusts for inflation its civil monetary penalties for 2024, in accordance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and Executive Office of the President (EOP) Office of Management and Budget (OMB) guidance. DHS is also accounting for additional civil monetary penalties that the U.S. Coast Guard is statutorily authorized to collect. The new penalty amounts will be effective for penalties assessed after June 28, 2024 whose associated violations occurred after November 2, 2015. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective on June 28, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Hillary Hunnings, Attorney-Advisor, 202-282-9043, <E T="03">hillary.hunnings@hq.dhs.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">I. Statutory and Regulatory Background</FP> <FP SOURCE="FP-2">II. Overview of Final Rule</FP> <FP SOURCE="FP-2">III. Adjustments by Component</FP> <FP SOURCE="FP1-2">A. Cybersecurity and Infrastructure Security Agency</FP> <FP SOURCE="FP1-2">B. U.S. Customs and Border Protection</FP> <FP SOURCE="FP1-2">C. U.S. Immigration and Customs Enforcement</FP> <FP SOURCE="FP1-2">D. U.S. Coast Guard</FP> <FP SOURCE="FP1-2">E. Transportation Security Administration</FP> <FP SOURCE="FP-2">IV. Administrative Procedure Act</FP> <FP SOURCE="FP-2">V. Regulatory Analyses</FP> <FP SOURCE="FP1-2">A. Executive Orders 12866 and 13563</FP> <FP SOURCE="FP1-2">B. Regulatory Flexibility Act</FP> <FP SOURCE="FP1-2">C. Unfunded Mandates Reform Act</FP> <FP SOURCE="FP1-2">D. Paperwork Reduction Act</FP> <FP SOURCE="FP-2">VI. Signing Authority</FP> </EXTRACT> <HD SOURCE="HD1">I. Statutory and Regulatory Background</HD> On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74 section 701 (Nov. 2, 2015)) (2015 Act). <SU>1</SU> <FTREF/> The 2015 Act amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) to further improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The 2015 Act required agencies to: (1) adjust the level of civil monetary penalties with an initial “catch-up” adjustment through issuance of an interim final rule (IFR) and (2) make subsequent annual adjustments for inflation. <SU>2</SU> <FTREF/> Through the “catch-up” adjustment, agencies were required to adjust the amounts of civil monetary penalties to more accurately reflect inflation rates. <SU>3</SU> <FTREF/> <FTNT> <SU>1</SU>  The 2015 Act was part of the Bipartisan Budget Act of 2015, Public Law 114-74 (Nov. 2, 2015) (codified as amended at 28 U.S.C. 2461 note). </FTNT> <FTNT> <SU>2</SU>  Public Law 114-74 section 701(b)(1)(D)(b)(1)-(2). </FTNT> <FTNT> <SU>3</SU>  Public Law 114-74 section 701(b)(1)(D)(b)(1)(A)-(B). </FTNT> For the subsequent annual adjustments, the 2015 Act requires agencies to increase the penalty amounts by a cost-of-living adjustment. <SU>4</SU> <FTREF/> The 2015 Act directs OMB to provide guidance to agencies each year to assist agencies in making the annual adjustments. <SU>5</SU> <FTREF/> The 2015 Act requires agencies to make the annual adjustments no later than January 15 of each year and to publish the adjustments in the <E T="04">Federal Register</E> . <SU>6</SU> <FTREF/> <FTNT> <SU>4</SU>  Public Law 114-74 section 701(b)(1)(D)(b)(2). </FTNT> <FTNT> <SU>5</SU>  Public Law 114-74 section 701(b)(2)(4)(a). </FTNT> <FTNT> <SU>6</SU>  Public Law 114-74 section 701(b)(1)(A)(a). </FTNT> Pursuant to the 2015 Act, DHS undertook a review of the civil penalties that DHS and its components administer. <SU>7</SU> <FTREF/> On July 1, 2016, DHS published an IFR adjusting the maximum civil monetary penalties with an initial “catch-up” adjustment, as required by the 2015 Act. <SU>8</SU> <FTREF/> DHS calculated the adjusted penalties based upon nondiscretionary provisions in the 2015 Act and upon guidance that OMB issued to agencies on February 24, 2016. <SU>9</SU> <FTREF/> The adjusted penalties were effective for civil penalties assessed after August 1, 2016 (the effective date of the IFR), whose associated violations occurred after November 2, 2015 (the date of enactment of the 2015 Act). <SU>10</SU> <FTREF/> On January 27, 2017, DHS published a final rule making the annual adjustment for 2017. <SU>11</SU> <FTREF/> On April 2, 2018, DHS made the 2018 annual inflation adjustment. <SU>12</SU> <FTREF/> On April 5, 2019, DHS made the 2019 annual inflation adjustment. <SU>13</SU> <FTREF/> On June 17, 2020, DHS made the 2020 annual inflation adjustment. <SU>14</SU> <FTREF/> On October 18, 2021, DHS made the 2021 annual inflation adjustment. <SU>15</SU> <FTREF/> On January 11, 2022, DHS made the 2022 annual inflation adjustment. <SU>16</SU> <FTREF/> On January 13, 2023, DHS made the 2023 annual inflation adjustment. <SU>17</SU> <FTREF/> <FTNT> <SU>7</SU>  The 2015 Act applies to all agency civil penalties except for any penalty (including any addition to tax and additional amount) under the Internal Revenue Code of 1986 (26 U.S.C. 1 <E T="03">et seq.</E> ) and the Tariff Act of 1930 (19 U.S.C. 1202 <E T="03">et seq.</E> ). <E T="03">See</E> sec. 4(a)(1) of the 2015 Act. In the case of DHS, several civil penalties that are assessed by U.S. Customs and Border Protection (CBP) and the U.S. Coast Guard (USCG) fall under the Tariff Act of 1930, and therefore DHS did not adjust those civil penalties in this rulemaking. </FTNT> <FTNT> <SU>8</SU>  81 FR 42987 (July 1, 2016). </FTNT> <FTNT> <SU>9</SU>   <E T="03">Id.;</E> Office of Mgmt. & Budget, Exec. Office of The President, M-16-06, Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Table A: 2016 Civil Monetary Penalty Catch-Up Adjustment Multiplier by Calendar Year, (Feb. 24, 2016) ( <E T="03">https://www.whitehouse.gov/omb/information-for-agencies/memoranda/#memoranda-2016</E> ). </FTNT> <FTNT> <SU>10</SU>  81 FR at 42987 (July 1, 2016). </FTNT> <FTNT> <SU>11</SU>  82 FR 8571 (Jan. 27, 2017). </FTNT> <FTNT> <SU>12</SU>  83 FR 13826 (Apr. 2, 2018). </FTNT> <FTNT> <SU>13</SU>  84 FR 13499 (Apr. 5, 2019). </FTNT> <FTNT> <SU>14</SU>  85 FR 36469 (June 17, 2020). </FTNT> <FTNT> <SU>15</SU>  86 FR 57532 (Oct. 18, 2021). </FTNT> <FTNT> <SU>16</SU>  87 FR 1317 (Jan. 11, 2022). </FTNT> <FTNT> <SU>17</SU>  88 FR 2175 (Jan. 13, 2023). </FTNT> <HD SOURCE="HD1">II. Overview of the Final Rule</HD> This final rule makes the 2024 annual inflation adjustments to civil monetary penalties pursuant to the 2015 Act and pursuant to guidance OMB issued to agencies on December 19, 2023. <SU>18</SU> <FTREF/> The penalty amounts in this final rule will be effective for penalties assessed after June 28, 2024 where the associated violation occurred after November 2, 2015. Consistent with OMB guidance, the 2015 Act does not retrospectively change previously assessed penalties that the agency is actively collecting or has collected. <FTNT> <SU>18</SU>  Office of Mgmt. and Budget, Exec. Office of the President, M-24-07, Implementation of Penalty Inflation Adjustments for 2024, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Dec. 19, 2023) ( <E T="03">https://www.whitehouse.gov/wp-content/uploads/2023/12/M-24-07-Implementation-of-Penalty-Inflation-Adjustments-for-2024.pdf</E> ). </FTNT> We discuss civil penalties by DHS component in Section III below. For each component identified in Section III, below, we briefly describe the relevant civil penalty (or penalties), and we provide a table showing the increase in the penalties for 2024. In the table for each component, we show (1) the penalty name, (2) the penalty statutory and or regulatory citation, (3) the penalty amount as adjusted in the 2023 final rule, (4) the cost-of-living adjustment multiplier for 2024 that OMB provided in its December 19, 2023, guidance, and (5) the new 2024 adjusted penalty. The 2015 Act instructs agencies to round penalties to the nearest multiple of $1. <SU>19</SU> <FTREF/> For a more complete discussion of the method used for calculating the initial “catch-up” inflation adjustments and a component-by-component breakdown to the nature of the civil penalties and relevant legal authorities, please see the IFR preamble at 81 FR 42987-43000. <FTNT> <SU>19</SU>  Public Law 114-74 section 701(b)(2)(A). </FTNT> Additionally, in Section III(D) discussing the civil penalties of the U.S. Coast Guard, DHS is accounting for additional civil monetary penalties that the U.S. Coast Guard is statutorily authorized to collect. Finally, in issuing this final rule, it is DHS's intention that the rule's penalty provisions be considered severable from one another to the greatest extent possible. For example, if a court of competent jurisdiction were to hold that a particular penalty amount could not be applied as adjusted for inflation to particular persons or in p ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 110k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━