Civil Monetary Penalties Annual Inflation Adjustments

<RULE> FEDERAL ELECTION COMMISSION <CFR>11 CFR Part 111</CFR> <DEPDOC>[NOTICE 2024-31]</DEPDOC> <SUBJECT>Civil Monetary Penalties Annual Inflation Adjustments</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Federal Election Commission. <HD SOURCE="HED">ACTION:</HD> Final rules. <SUM> <HD SOURCE="HED">SUMMARY:</HD> As required by the Federal Civil Penalties Inflation Adjustment Act of 1990, the Federal Election Commission is adjusting for inflation the civil monetary penalties established under the Federal Election Campaign Act, the Presidential Election Campaign Fund Act, and the Presidential Primary Matching Payment Account Act. The civil monetary penalties being adjusted are those negotiated by the Commission or imposed by a court for certain statutory violations, and those imposed by the Commission for late filing of or failure to file certain reports required by the Federal Election Campaign Act. The adjusted civil monetary penalties are calculated according to a statutory formula and the adjusted amounts will apply to penalties assessed after the effective date of these rules. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> The final rules are effective on January 3, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Mr. Robert M. Knop, Assistant General Counsel, Mr. Joseph P. Wenzinger, Attorney, or Ms. Terrell D. Stansbury, Paralegal, Office of General Counsel, (202) 694-1650 or (800) 424-9530. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> The Federal Civil Penalties Inflation Adjustment Act of 1990 (the “Inflation Adjustment Act”), <SU>1</SU> <FTREF/> as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the “2015 Act”), <SU>2</SU> <FTREF/> requires Federal agencies, including the Commission, to adjust for inflation the civil monetary penalties within their jurisdiction according to prescribed formulas. A civil monetary penalty is “any penalty, fine, or other sanction” that (1) “is for a specific monetary amount” or “has a maximum amount” under Federal law; and (2) that a Federal agency assesses or enforces “pursuant to an administrative proceeding or a civil action” in Federal court. <SU>3</SU> <FTREF/> Under the Federal Election Campaign Act, 52 U.S.C. 30101-45 (“FECA”), the Commission may seek and assess civil monetary penalties for violations of FECA, the Presidential Election Campaign Fund Act, 26 U.S.C. 9001-13, and the Presidential Primary Matching Payment Account Act, 26 U.S.C. 9031-42. <FTNT> <SU>1</SU>  Public Law 101-410, 104 Stat. 890 (codified at 28 U.S.C. 2461 note), <E T="03">amended by</E> Debt Collection Improvement Act of 1996, Public Law 104-134, sec. 31001(s)(1), 110 Stat. 1321, 1321-373; Federal Reports Elimination Act of 1998, Public Law 105-362, sec. 1301, 112 Stat. 3280. </FTNT> <FTNT> <SU>2</SU>  Public Law 114-74, sec. 701, 129 Stat. 584, 599. </FTNT> <FTNT> <SU>3</SU>  Inflation Adjustment Act sec. 3(2). </FTNT> The Inflation Adjustment Act requires Federal agencies to adjust their civil penalties annually, and the adjustments must take effect no later than January 15 of every year. <SU>4</SU> <FTREF/> Pursuant to guidance issued by the Office of Management and Budget (“OMB”), <SU>5</SU> <FTREF/> the Commission is now adjusting its civil monetary penalties for 2025. <SU>6</SU> <FTREF/> <FTNT> <SU>4</SU>  Inflation Adjustment Act sec. 4(a). </FTNT> <FTNT> <SU>5</SU>   <E T="03">See</E> Inflation Adjustment Act sec. 7(a) (requiring OMB to “issue guidance to agencies on implementing the inflation adjustments required under this Act”); <E T="03">see also</E> Memorandum from Shalanda D. Young, Director, Office of Management and Budget, to Heads of Executive Departments and Agencies, M-25-02, Dec. 17, 2024, <E T="03">https://www.whitehouse.gov/wp-content/uploads/2024/12/M-25-02.pdf</E> (“OMB Memorandum”). </FTNT> <FTNT> <SU>6</SU>  Inflation Adjustment Act sec. 5. </FTNT> The Commission must adjust for inflation its civil monetary penalties “notwithstanding Section 553” of the Administrative Procedures Act (“APA”). <SU>7</SU> <FTREF/> Thus, the APA's notice-and-comment and delayed effective date requirements in 5 U.S.C. 553(b)-(d) do not apply because Congress has specifically exempted agencies from these requirements. <SU>8</SU> <FTREF/> <FTNT> <SU>7</SU>  Inflation Adjustment Act sec. 4(b)(2). </FTNT> <FTNT> <SU>8</SU>   <E T="03">See, e.g., Asiana Airlines</E> v. <E T="03">FAA,</E> 134 F.3d 393, 396-99 (D.C. Cir. 1998) (finding APA “notice and comment” requirement not applicable where Congress clearly expressed intent to depart from normal APA procedures). </FTNT> Furthermore, because the inflation adjustments made through these final rules are required by Congress and involve no Commission discretion or policy judgments, these rules do not need to be submitted to the Speaker of the United States House of Representatives or the President of the United States Senate under the Congressional Review Act, 5 U.S.C. 801 <E T="03">et seq.</E> Moreover, because the APA's notice-and-comment procedures do not apply to these final rules, the Commission is not required to conduct a regulatory flexibility analysis under 5 U.S.C. 603 or 604. <E T="03">See</E> 5 U.S.C. 601(2), 604(a). Nor is the Commission required to submit these revisions for congressional review under FECA. <E T="03">See</E> 5 U.S.C. 30111(d)(1), (4) (providing for congressional review when Commission “prescribe[s]” a “rule of law”). The new penalty amounts will apply to civil monetary penalties that are assessed after the date the increase takes effect, even if the associated violation predated the increase. <SU>9</SU> <FTREF/> <FTNT> <SU>9</SU>  Inflation Adjustment Act sec. 6. </FTNT> <HD SOURCE="HD1">Explanation and Justification</HD> The Inflation Adjustment Act requires the Commission to annually adjust its civil monetary penalties for inflation by applying a cost-of-living-adjustment (“COLA”) ratio. <SU>10</SU> <FTREF/> The COLA ratio is the percentage that the Consumer Price Index (“CPI”)  <SU>11</SU> <FTREF/> “for the month of October preceding the date of the adjustment” exceeds the CPI for October of the previous year. <SU>12</SU> <FTREF/> To calculate the adjusted penalty, the Commission must increase the most recent civil monetary penalty amount by the COLA ratio. <SU>13</SU> <FTREF/> According to the Office of Management and Budget, the COLA ratio for 2025 is 0.02598, or 2.598%; thus, to calculate the new penalties, the Commission must multiply the most recent civil monetary penalties in force by 1.02598. <SU>14</SU> <FTREF/> <FTNT> <SU>10</SU>  The COLA ratio must be applied to the most recent civil monetary penalties. Inflation Adjustment Act, § 4(a); <E T="03">see also</E> OMB Memorandum at 2. </FTNT> <FTNT> <SU>11</SU>  The Inflation Adjustment Act, sec. 3, uses the CPI “for all-urban consumers published by the Department of Labor.” </FTNT> <FTNT> <SU>12</SU>  Inflation Adjustment Act, sec. 5(b)(1). </FTNT> <FTNT> <SU>13</SU>  Inflation Adjustment Act, sec. 5(a), (b)(1). </FTNT> <FTNT> <SU>14</SU>  OMB Memorandum at 1. </FTNT> The Commission assesses two types of civil monetary penalties that must be adjusted for inflation. First are penalties that are either negotiated by the Commission or imposed by a court for violations of FECA, the Presidential Election Campaign Fund Act, or the Presidential Primary Matching Payment Account Act. These civil monetary penalties are set forth at 11 CFR 111.24. Second are the civil monetary penalties assessed through the Commission's Administrative Fines Program for late filing or non-filing of certain reports required by FECA. <E T="03">See</E> 52 U.S.C. 30109(a)(4)(C) (authorizing Administrative Fines Program), 30104(a) (requiring political committee treasurers to report receipts and disbursements within certain time periods). The penalty schedules for these civil monetary penalties are set out at 11 CFR 111.43 and 111.44. <HD SOURCE="HD2">1. 11 CFR 111.24—Civil Penalties</HD> FECA establishes the civil monetary penalties for violations of FECA and the other statutes within the Commission's jurisdiction. <E T="03">See</E> 52 U.S.C. 30109(a)(5), (6), (12). Commission regulations in 11 CFR 111.24 provide the current inflation-adjusted amount for each such civil monetary penalty. To calculate the adjusted civil monetary penalty, the Commission multiplies the most recent penalty amount by the COLA ratio and rounds that figure to the nearest dollar. The actual adjustment to each civil monetary penalty is shown in the chart below. <GPOTABLE COLS="4" OPTS="L2,tp0,i1" CDEF="s100,12,12,12"> <TTITLE> </TTITLE> <CHED H="1">Section</CHED> <CHED H="1">Most recent civil penalty</CHED> <CHED H="1">COLA</CHED> <ENT I="01">11 CFR 111.24(a)(1)</ENT> <ENT>$24,255</ENT> <ENT>1.02598</ENT> <ENT>$24,885</ENT> </ROW> <ROW> <ENT I="01">11 CFR 111.24(a)(2)(i)</ENT> <ENT>51,744</ENT> <ENT>1.02598</ENT> <ENT>53,088</ENT> </ROW> <ROW> <ENT I="01">11 CFR 111.24(a)(2)(ii)</ENT> <ENT>84,852</ENT> <ENT>1.02598</ENT> <ENT>87,056</ENT> </ROW> <ROW> <ENT I="01">11 CFR 111.24(b)</ENT> <ENT>7,256</ENT> <ENT>1.02598</ENT> <ENT>7,445</ENT> </ROW> <ROW> <ENT I="01">11 CFR 111.24(b)</ENT> <ENT>18,139</ENT> <ENT>1.02598</ENT> <ENT>18,610</ENT> </ROW> </GPOTABLE> <HD SOURCE="HD2">2. 11 CFR 111.43, 111.44—Administrative Fines</HD> FECA authorizes the Commission to assess civil monetary penalties for violations of the reporting requirements of 52 U.S.C. 30104(a) according to the penalty schedules “established and published by the Commission.” 52 U.S.C. 30109(a)(4)(C)(i). The Commission has established two penalty schedule ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 23k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━