[Federal Register Volume 74, Number 146 (Friday, July 31, 2009)]
[Rules and Regulations]
[Pages 38114-38116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18351]


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FEDERAL MARITIME COMMISSION

46 CFR Part 506

[Docket No. 09-04]
RIN 3072-AC36


Inflation Adjustment of Civil Monetary Penalties

July 28, 2009.
AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: This rule implements the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended by the Debt Collection Improvement 
Act of 1996. The rule adjusts for inflation the maximum amount of each 
statutory civil penalty subject to Federal Maritime Commission 
(``Commission'') jurisdiction in accordance with the requirements of 
that Act.

DATES: Effective Date: July 31, 2009.

FOR FURTHER INFORMATION CONTACT: Vern W. Hill, Director, Bureau of 
Enforcement, Federal Maritime Commission, 800 North Capitol Street, 
NW., Room 900, Washington, DC 20573, (202) 523-5783.

SUPPLEMENTARY INFORMATION: This rule implements the Debt Collection 
Improvement Act of 1996 (``DCIA''), Public Law 104-134, Title III, 
section 31001(s)(1), April 26, 1996, 110 Stat. 1321-373. The DCIA 
amended the Federal Civil Penalties Inflation Adjustment Act of 1990 
(``FCPIAA''), Public Law 101-410, Oct. 5, 1990, 104 Stat. 890, 28 
U.S.C. 2461 note, to require the head of each executive agency to adopt 
regulations that adjust the maximum civil monetary penalties (``CMPs'') 
assessable under its agency's jurisdiction at least every four years to 
ensure that they continue to maintain their deterrent value.\1\ The 
Commission last adjusted each CMP subject to its jurisdiction effective 
August 15, 2000. (65 FR 49741).
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    \1\ Increased CMPS are applicable only to violations occurring 
after the increase takes effect.
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    The inflation adjustment under the FCPIAA is to be determined by 
increasing the maximum CMP by the cost-of-living, rounded off as set 
forth in section 5(a) of that Act. The cost-of-living adjustment is the 
percentage (if any) for each CMP by which the Consumer Price Index 
(``CPI'') \2\ for the month of June of the calendar year preceding the 
adjustment, exceeds the CPI for the month of June of the calendar year 
in which the amount of such CMP was last set or adjusted pursuant to 
law.
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    \2\ The CPI defined in the FCPIAA is the U.S. Department of 
Labor's Consumer Price Index for all-urban consumers (``CPI-U''). 28 
U.S.C. 2461 note (3)(3).

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[[Page 38115]]

    One example of an inflation adjustment is as follows. Section 13 of 
the Shipping Act of 1984 (``1984 Act''), 46 U.S.C. 41107, imposes a 
maximum $25,000 penalty for a knowing and willful violation of the 1984 
Act which was inflation adjusted in 2000 to $30,000. First, to 
calculate the new CMP amounts under the amendment, we determine the 
appropriate CPI-U for June of the calendar year preceding the 
adjustment. Given that we are adjusting the CMPs in 2009, we use the 
CPI-U for June of 2008, which was 218.815. The CPI-U for June of the 
year the CMP was last adjusted for inflation must also be determined. 
The Commission last adjusted this CMP in 2000, therefore we use the 
CPI-U for June of 2000, which was 172.4. Using those figures, we 
calculate the cost-of-living adjustment by dividing the CPI-U for June 
of 2008 (218.815) by the CPI-U for June of 2000 (172.4). Our result is 
1.2692.
    Second, we calculate the raw inflation adjustment (the inflation 
adjustment prior to rounding) by multiplying the maximum penalty amount 
by the cost-of-living adjustment. In our example, $30,000 multiplied by 
the cost-of-living adjustment of 1.2692 equals $38,076.85
    Third, we use the rounding rules set forth in Section 5(a) of the 
FCIPAA. In order to round only the increase amount, we subtract the 
current maximum penalty amount ($30,000) from the raw maximum inflation 
adjustment ($38,319), equaling $8,076.85. Under Section 5(a), if the 
penalty is greater than $10,000 but less than or equal to $100,000, we 
round the increase to the nearest multiple of $5,000. Therefore, the 
maximum penalty increase in our example is $10,000.
    Finally, the rounded increase is added to the maximum penalty 
amount last set or adjusted. Here, $30,000 plus $10,000 equals a 
maximum inflation adjustment penalty amount of $40,000.
    A similar calculation was done with respect to each CMP subject to 
the jurisdiction of the Commission. In compliance with the FCPIAA, as 
amended, the Commission is hereby amending 46 CFR 506.4(d) of its 
regulations which sets forth the newly adjusted maximum penalty 
amounts.
    This final rule has been issued without prior public notice or 
opportunity for public comment. Under the Administrative Procedures Act 
(``APA''), 5 U.S.C. 553(b)(B), a final rule may be issued without that 
process ``when the agency for good cause finds (and incorporates the 
finding and a brief statement of reasons therefor in the rules issued) 
that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.'' In this instance, 
the Commission finds, for good cause, that solicitation of public 
comment on this final rule is unnecessary and impractical.
    Specifically, the Congress has mandated that the agency 
periodically make the inflation adjustments and does not allow for the 
exercise of Commission discretion regarding the substance of the 
adjustments. The Commission, under the DCIA, is required to make the 
adjustment to the civil monetary penalties according to a formula 
specified in the statute. The regulation requires ministerial, 
technical computations that are noncontroversial. Moreover, the conduct 
underlying the penalties is already illegal under existing law, and 
there is no need to provide thirty days prior to the effectiveness of 
the regulation and amendments to allow for affected parties to correct 
their conduct. Accordingly, the Commission believes that there is good 
cause to make this regulation effective immediately upon publication.
    In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601-
612, the Chairman of the Commission has certified to the Chief Counsel 
for Advocacy, Small Business Administration, that the rule will not 
have a significant economic impact on a substantial number of small 
entities, including small businesses, small organizational units, and 
small governmental jurisdictions because it merely increases the 
maximum statutory civil monetary penalty for those entities that commit 
violations after the effective date of this rule. The Commission 
recognizes that the rule can impact certain regulated parties that 
qualify as small entities under the guidelines of the Small Business 
Administration. However, the assessment of civil penalties affects only 
those regulated parties that have been found to be in violation of the 
shipping statues and/or regulations, which is not likely to be 
substantial in number. The Commission rarely has imposed the statutory 
maximum civil monetary penalty and, moreover, considers the ability of 
a respondent to pay a civil monetary penalty in determining its amount. 
The size of a company necessarily enters into a determination of its 
ability to pay. Further, the adjustment of civil penalties deters 
regulated parties from engaging in harmful activities that violate the 
shipping statutes and regulations, which serves to protect the public 
and the system of ocean liner transportation.
    The rule does not contain any collection of information 
requirements as defined by the Paperwork Reduction Act of 1995, as 
amended. Therefore, Office of Management and Budget review is not 
required.
    This regulatory action is not a major rule as defined under 5 
U.S.C. 804(2).

List of Subjects in 46 CFR Part 506

    Administrative practice and procedure, Penalties.

0
Part 506 of title 46 of the Code of Federal Regulations is amended as 
follows:

PART 506--CIVIL MONETARY PENALTY INFLATION ADJUSTMENT

0
1. The authority citation for part 506 continues to read as follows:

    Authority: 28 U.S.C. 2461.

0
2. In Sec.  506.4, revise paragraph (d) to read as follows:


Sec.  506.4  Cost of living adjustments of civil monetary penalties.

* * * * *
    (d) Inflation adjustment. Maximum Civil Monetary Penalties within 
the jurisdiction of the Federal Maritime Commission are adjusted for 
inflation as follows:

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                                                                                      Current      New  adjusted
                                                                                      maximum         maximum
      United States Code  citation          Civil Monetary Penalty description        penalty         penalty
                                                                                      amount          amount
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46 U.S.C. 42304.........................  Adverse impact on U.S. carriers by          $1,175,000      $1,500,000
                                           foreign shipping practices.
46 U.S.C. 41107(a)......................  Knowing and Willful violation/Shipping          30,000          40,000
                                           Act of 1984, or Commission regulation
                                           or order.
46 U.S.C. 41107(b)......................  Violation of Shipping Act of 1984,               6,000           8,000
                                           Commission regulation or order, not
                                           knowing or willful.
46 U.S.C. 41108(b)......................  Operating in foreign commerce after             60,000          75,000
                                           tariff suspension.

[[Page 38116]]

 
46 U.S.C. 42104.........................  Failure to provide required reports,             6,000           8,000
                                           etc./Merchant Marine Act of 1920.
46 U.S.C. 42106.........................  Adverse shipping conditions/Merchant         1,175,000       1,500,000
                                           Marine Act of 1920.
46 U.S.C. 42108.........................  Operating after tariff or service               60,000          75,000
                                           contract suspension/Merchant Marine
                                           Act of 1920.
46 U.S.C. 44102.........................  Failure to establish financial                   6,000           8,000
                                           responsibility for non-performance of             220             300
                                           transportation.
46 U.S.C. 44103.........................  Failure to establish financial                   6,000           8,000
                                           responsibility for death or injury.               220             300
31 U.S.C. 3802(a)(1)....................  Program Fraud Civil Remedies Act/makes           6,000           8,000
                                           false claim.
31 U.S.C. 3802(a)(2)....................  Program Fraud Civil Remedies Act/                6,000           8,000
                                           giving false statement.
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    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. E9-18351 Filed 7-30-09; 8:45 am]
BILLING CODE 6730-01-P