Federal Register / Vol. 74, No. 10 / Thursday, January 15, 2009 / Rules and Regulations 2337 

(b) Ecosystem Services Credits for 

Conservation Improvements. (1) USDA 

recognizes that environmental benefits 

will be achieved by implementing 

conservation practices and activities 

funded through WRP, and that 

environmental credits may be gained as 

a result of implementing activities 

compatible with the purposes of a WRP 

easement, 30-year contract, or 

restoration cost-share agreement. NRCS 

asserts no direct or indirect interest in 

these credits. However, NRCS retains 

the authority to ensure that the 

requirements of the WRPO, contract, 

and easement deed are met. Where 

activities required under an 

environmental credit agreement may 

affect land covered under a WRP 

easement, 30-year contract, or 

restoration cost-share agreement, 

participants are highly encouraged to 

request a compatibility assessment from 

NRCS prior to entering into such 

agreements. 

(2) Section 1222(f)(2) of the Food 

Security Act of 1985 as amended, does 

not allow wetlands restored with 

Federal funds to be utilized for Food 

Security Act wetland mitigation 

purposes. 

Signed this 9th day of January 2009, in 

Washington, DC. 

Arlen L. Lancaster, 

Vice President, Commodity Credit 

Corporation and Chief, Natural Resources 

Conservation Service. 

[FR Doc. E9–735 Filed 1–14–09; 8:45 am] 

BILLING CODE 3410–16–P 

DEPARTMENT OF JUSTICE 

Executive Office for Immigration 

Review 

8 CFR Part 1274a 

[EOIR No. 166I; AG Order No. 3031–2009] 

RIN 1125–AA64 

Reorganization of Regulations on 

Control of Employment of Aliens 

AGENCY: Executive Office for 

Immigration Review, Department of 

Justice. 

ACTION: Interim rule with request for 

comments. 

SUMMARY: The Homeland Security Act 

of 2002, as amended, transferred the 

functions of the former Immigration and 

Naturalization Service (INS) from the 

Department of Justice to the Department 

of Homeland Security (DHS); however, 

it retained within the Department of 

Justice the functions of the Executive 

Office for Immigration Review (EOIR), a 

separate agency within the Department 

of Justice. Because the existing 

regulations often intermingled the 

responsibilities of the former INS and 

EOIR, this transfer required a 

reorganization of title 8 of the Code of 

Federal Regulations (CFR) in February 

2003, including the establishment of a 

new chapter V in 8 CFR pertaining to 

EOIR. As part of this reorganization, a 

number of regulations pertaining to the 

responsibilities of DHS intentionally 

were duplicated in the new chapter V 

because of shared responsibilities. The 

Department of Justice now has 

determined that most of the duplicated 

regulations in part 1274a pertain to 

functions that are DHS’s responsibility 

and do not need to be reproduced in 

EOIR’s regulations in chapter V. This 

interim rule, therefore, deletes 

unnecessary regulations in part 1274a 

and makes appropriate reference to the 

applicable DHS regulations. 

DATES: Effective Date: This rule is 

effective January 15, 2009. 

Comments: Comments on this rule 

must be received by March 16, 2009. 

ADDRESSES: Comments may be mailed to 

John N. Blum, Acting General Counsel, 

Executive Office for Immigration 

Review, 5107 Leesburg Pike, Suite 2600, 

Falls Church, Virginia 22041. To ensure 

proper handling, please reference EOIR 

Docket No. 166I on your 

correspondence. You may submit 

comments electronically or view an 

electronic version of this interim rule at 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: John 

N. Blum, Acting General Counsel, 

Executive Office for Immigration 

Review, 5107 Leesburg Pike, Suite 2600, 

Falls Church, Virginia 22041, telephone 

(703) 305–0470. 

SUPPLEMENTARY INFORMATION: 

I. Posting of Public Comments 

Please note that all comments 

received are considered part of the 

public record and made available for 

public inspection online at http:// 

www.regulations.gov. Such information 

includes personal identifying 

information (such as your name, 

address, etc.) voluntarily submitted by 

the commenter. 

If you want to submit personal 

identifying information (such as your 

name, address, etc.) as part of your 

comment, but do not want it to be 

posted online, you must include the 

phrase ‘‘PERSONAL IDENTIFYING 

INFORMATION’’ in the first paragraph 

of your comment. You also must locate 

all the personal identifying information 

you do not want posted online in the 

first paragraph of your comment and 

identify what information you want 

redacted. 

If you want to submit confidential 

business information as part of your 

comment, but do not want it to be 

posted online, you must include the 

phrase ‘‘CONFIDENTIAL BUSINESS 

INFORMATION’’ in the first paragraph 

of your comment. You also must 

prominently identify confidential 

business information to be redacted 

within the comment. If a comment has 

so much confidential business 

information that it cannot be effectively 

redacted, all or part of that comment 

may not be posted on http:// 

www.regulations.gov. 

Personal identifying information and 

confidential business information 

identified and located as set forth above 

will be placed in the agency’s public 

docket file, but not posted online. To 

inspect the agency’s public docket file 

in person, you must make an 

appointment with agency counsel. 

Please see the ‘‘For Further Information 

Contact’’ paragraph below for agency 

counsel’s contact information. 

II. Background 

The Homeland Security Act of 2002, 

as amended (HSA), transferred the 

functions of the former Immigration and 

Naturalization Service (INS or the 

Service) to the Department of Homeland 

Security (DHS). Public Law 107–296, tit. 

IV, subtits. D, E, F, 116 Stat. 2135, 2192 

(Nov. 25, 2002), as amended. The HSA, 

however, retained the functions of the 

Executive Office for Immigration 

Review (EOIR) within the Department of 

Justice, under the direction of the 

Attorney General. 6 U.S.C. 521; 8 U.S.C. 

1103(g); see generally Matter of D–J–, 23 

I&N Dec. 572 (A.G. 2003). 

EOIR was created by the Attorney 

General in 1983 to combine the 

functions performed by INS special 

inquiry officers (now immigration 

judges) and the Board of Immigration 

Appeals (Board) into a single 

administrative agency within the 

Department of Justice, separate from the 

former INS. 48 FR 8038 (Feb. 25, 1983). 

This administrative structure separated 

the administrative adjudication 

functions from the enforcement and 

service functions of the former INS, both 

for administrative efficiency and to 

foster independent judgment in 

adjudication. The Office of the Chief 

Administrative Hearing Officer 

(OCAHO) and its administrative law 

judges (ALJs) were added to EOIR in 

1987, following enactment of section 

274A of the Immigration and 

Nationality Act (INA), 8 U.S.C. 1324a. 

See 52 FR 44971 (Nov. 24, 1987). 

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2338 Federal Register / Vol. 74, No. 10 / Thursday, January 15, 2009 / Rules and Regulations 

Because both INS and EOIR were 

agencies within the Department of 

Justice at that time, the regulations 

affecting these agencies were included 

in the same chapter (chapter I). Most of 

the immigration regulations were 

organized by subject, which often 

resulted in provisions relating to the 

former INS and to EOIR being 

intermingled in the same parts and 

sections. 

III. Rationale 

The enactment of the HSA and its 

transfer of functions of the former INS 

to DHS, however, required the creation 

of a new chapter for the regulations 

pertaining to EOIR, separate from the 

DHS regulations. Accordingly, the 

Attorney General published a rule 

transferring certain provisions that 

related to the jurisdiction and 

procedures of EOIR to a new chapter V 

of 8 CFR. 68 FR 9823 (Feb. 28, 2003). 

When the transfer of authority from the 

former INS to DHS took place in March 

2003, the time available did not permit 

a thorough review of each of the 

provisions of the regulations where 

EOIR’s and the former INS’s 

responsibilities were intermingled in 

the same sections. As a result, the 

Department’s rule duplicated in chapter 

V certain parts and sections of the 

regulations that related to the 

responsibilities of both the former INS 

and EOIR, respectively. The rule also 

made a number of technical 

amendments to chapters I and V to 

ensure that the authorities existing in 

the former INS and EOIR regulations 

prior to the transfer of functions to DHS 

remained in effect. 

In particular, 8 CFR part 274a (Control 

of Employment of Aliens) contained 

definitional, substantive, and 

procedural material relevant to both the 

former INS and the Special Counsel for 

Immigration-Related Unfair 

Employment Practices of the 

Department’s Civil Rights Division 

under 28 CFR 0.53, as well as the 

predicates to civil penalty proceedings 

before OCAHO. It was for this reason 

and out of an abundance of caution that, 

in 2003, the Attorney General 

duplicated the existing portions of part 

274a, found in chapter I of the 

regulations, into a new part 1274a, 

located in chapter V. 

The Department had intended to 

address over time the regulatory 

overlaps resulting from the 2003 rule by 

eliminating or substantially reducing 

any duplicative parts and sections that 

intermingled EOIR’s and the former 

INS’s authority. The expectation was 

that DHS would revise the regulations 

in chapter I of 8 CFR by eliminating 

provisions exclusively relating to the 

immigration judges’, the Board’s, and 

the OCAHO ALJs’ respective authorities 

(since those provisions are properly 

codified in the regulations governing 

EOIR), and that the Department would 

revise the regulations pertaining to EOIR 

in chapter V by eliminating the 

duplicative provisions that did not 

relate exclusively to EOIR’s authority. 

Based on experience acquired since 

the transfer of the former INS’s 

substantive immigration authority to 

DHS, it is apparent that most of the 

duplicative provisions in part 1274a 

pertain to matters that are the 

responsibility of DHS. Accordingly, 

there is no reason or need for those 

provisions of part 274a to be reproduced 

in a separate part 1274a. 

Moreover, DHS has begun to 

implement substantive revisions to part 

274a, making clear that the existing 

duplicative regulatory provisions in part 

1274a are not only unnecessary but 

potentially confusing. Recently, after 

notice and public comment, DHS is 

revising 8 CFR 274a.1(l) with respect to 

an employer’s response to receiving 

notices from the Social Security 

Administration (SSA) indicating that 

certain employees’ social security 

numbers as reflected in the employer’s 

records do not match SSA’s records. 

Safe-Harbor Procedures for Employers 

Who Receive a No-Match Letter, 72 FR 

45611 (Aug. 15, 2007) (final rule); 73 FR 

15944 (Mar. 26, 2008) (supplemental 

proposed rule). These regulatory 

revisions are within DHS’ statutory 

authority under sections 103 and 274A 

of the INA, and are properly codified in 

the DHS regulations in 8 CFR part 274a. 

However, because they do not relate 

directly to EOIR’s authority, these 

changes would not be incorporated into 

the provisions of 8 CFR part 1274a. 

In addition, the Secretary of 

Homeland Security and the Attorney 

General recently published final rules to 

implement inflation adjustments in the 

amounts of civil penalties to be imposed 

under section 274A of the INA. 73 FR 

10130 (Feb. 26, 2008). 

In order to remove unnecessary 

redundancies, and to avoid any possible 

confusion based on changes to part 274a 

that are not also codified in part 1274a, 

the Department is removing all but a 

few provisions in the current part 

1274a. This rule also adds a new general 

provision to section 1274a.1, noting that 

the substantive and procedural 

regulations relating to the 

implementation of the employment 

verification provisions of section 274A 

of the INA are contained in 8 CFR part 

274a, and that the procedures for 

hearings before an ALJ relating to civil 

penalties sought by DHS under section 

274A are contained in 28 CFR part 68. 

This new provision also states that, to 

the extent they are relevant, the 

provisions of 8 CFR part 274a are 

applicable in any adjudicatory 

proceedings before EOIR. 

The only provisions remaining in part 

1274a, therefore, are those that may 

have a direct impact on the authority of 

the OCAHO ALJs: 

• Section 1274a.9(e) and (f) relating to 

the time allowed for seeking an ALJ 

hearing to challenge a DHS civil penalty 

and the consequences for failure to 

request an ALJ hearing; and 

• Section 1274a.10 relating to the 

penalties to be imposed by an ALJ in a 

case arising under section 274A of the 

INA. 

This rule revises § 1274a.9(e) and (f) 

to replace references to the former INS 

or the Service with references to DHS. 

This rule also slightly revises the 

existing language of § 1274a.9(f) for 

clarity; that is, the rule now expressly 

states that respondents who fail to make 

a timely request for a hearing are not 

entitled to a hearing before an ALJ. The 

change to § 1274a.10 has already been 

implemented in the rules published on 

February 26, 2008. 

IV. Effect 

This action is not a substantive 

change and does not alter any 

interpretation of the provisions of the 

INA or affect the legal rights of any 

person. The existing regulations 

codified in 8 CFR part 274a are 

unaffected by this rule, and the removal 

of entirely duplicative provisions in part 

1274a does not alter the legal status quo. 

The substantive and procedural 

regulations in part 274a and in other 

parts of the immigration regulations are 

within the Secretary’s authority to 

promulgate and revise, pursuant to 

section 103 of the INA, except to the 

extent that some remaining provisions 

of the DHS regulations deal directly 

with the authority of EOIR adjudicators 

(an overlap that DHS and the 

Department are working to eliminate as 

discussed above). As noted, regulatory 

provisions that go to the powers, 

procedures, and authority of the 

immigration judges, the Board, or the 

ALJs in EOIR are within the Attorney 

General’s exclusive authority. For 

example, regulatory provisions granting 

or limiting EOIR’s jurisdiction, 

authorizing EOIR adjudicators to 

exercise specific authorities, or directing 

EOIR adjudicators to act in a certain 

way are properly within the Attorney 

General’s authority to promulgate, 

rather than DHS’s. However, Congress 

has vested in DHS the authority to 

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Federal Register / Vol. 74, No. 10 / Thursday, January 15, 2009 / Rules and Regulations 2339 

1See 67 FR at 54884 (citations omitted): 

The immigration regulations, however, include 

not only those rules adopted personally by the 

Attorney General, but also substantive and 

procedural rules duly promulgated by the 

Commissioner of the Service, under an express 

delegation of rulemaking authority from Congress to 

the Attorney General and, in turn, from the 

Attorney General to the Commissioner. The 

Department fully recognizes and reiterates, of 

course, that the Board and the immigration judges 

are independent of the Service (although some 

court opinions contain language that appears to blur 

this key distinction). For this reason, the Attorney 

General, and not the Commissioner, has 

consistently promulgated the regulations that 

govern the organization, procedures, or powers of 

the Board and the immigration judges and the 

conduct of immigration proceedings. The authority 

delegated to the Commissioner to promulgate 

substantive or ‘‘legislative’’ rules does properly 

extend, however, to the interpretation of the general 

provisions of the Act. A regulation adopted 

pursuant to delegated statutory authority and 

pursuant to applicable rulemaking requirements 

under the Administrative Procedure Act has the 

‘‘force and effect of law’’ as a substantive or 

legislative rule. * * * The language of this rule 

makes explicit what was implicit in the current 

version of § 3.1. 

A fundamental premise of the immigration 

enforcement process must be that the substantive 

regulations codified in title 8 of the Code of Federal 

Regulations are binding in all administrative 

settings, and this specifically includes substantive 

regulations interpreting and applying the provisions 

of the Act. * * * [T]he respondents, the 

immigration judges, the Service, and the public at 

large should not be left to wonder whether the 

regulations interpreting and applying the 

substantive provisions of the Act will be binding in 

administrative proceedings under the Act. 

Such regulations themselves, of course, are 

susceptible to interpretation and application of 

their regulatory language by the immigration judges 

and the Board. However, if a substantive rule 

clearly defines a statutory term, or reflects a legal 

interpretation of the statutory provisions, then the 

position set forth in the rule will govern both the 

actions of the Service and the adjudication of 

immigration proceedings before the immigration 

judges and the Board. 

2To the extent that an EOIR adjudicator may 

believe that an applicable regulation may not be 

consistent with the statute, the decisions of the 

ALJs or the Chief Administrative Hearing Officer in 

cases arising under sections 274A and 274C of the 

INA are subject to review by the Attorney General, 

as are the decisions of the Board, see 28 CFR 68.55, 

8 CFR 1003.1(h)(1), and the Attorney General can 

decide when and how to exercise his ultimate 

authority to determine all questions of law with 

respect to matters arising under the INA. See, e.g., 

Matter of Ponce de Leon-Ruiz, 21 I&N Dec. 154 (BIA 

1996; A.G. 1997) (the Board adhered to the 

regulatory interpretation in its decision but referred 

the case to the Attorney General for review in light 

of the Board’s concern that the regulatory provision 

was not consistent with the statutory language); 

section 103(a)(1) and (g)(1), 8 U.S.C. 1103(a)(1) and 

(g)(1). 

promulgate regulations interpreting and 

applying the provisions of the INA— 

except insofar as the INA confers 

authority on the President, the Attorney 

General, or the Secretary of State—and 

has vested in the Attorney General the 

authority to issue binding 

interpretations on all questions of law 

pursuant to section 103(a)(1) of the INA. 

The premise of this rule that the 

provisions of part 274a are properly 

applicable in adjudicatory proceedings 

before EOIR is not new. The Department 

previously has made clear that the 

Attorney General need not personally 

promulgate immigration regulations in 

order for those regulations to be 

applicable in proceedings before EOIR; 

Attorney General Ashcroft addressed 

similar issues at the time of the 

adoption of the rule to reform the 

Board’s adjudicatory processes in 2002, 

67 FR 54878 (Aug. 26, 2002). 1 As with 

any such regulation adopted by an 

administrative agency pursuant to 

delegated statutory authority, the 

substantive or ‘‘legislative’’ regulations 

adopted by DHS (or by the former INS) 

within the scope of its delegated 

authority under the INA are properly 

deemed to have the ‘‘force and effect of 

law.’’ Thus, the DHS legislative 

regulations are properly treated as part 

of the governing law, not merely as 

‘‘guidance’’ or recommendations for 

EOIR adjudicators to consider.2

V. Conclusion 

In summary, this interim rule deletes 

certain unnecessary duplicative 

provisions in part 1274a and revises the 

remaining provisions in a way that 

references applicable regulations in part 

274a. The Department and DHS plan to 

review other duplicated provisions of 

the immigration regulations in the 

future to determine whether additional 

provisions in different parts of the 

regulations also should be deleted to 

simplify the Code of Federal 

Regulations. 

Administrative Procedure Act 

The Department of Justice finds that 

good cause exists for adopting this rule 

as an interim rule with provision for 

post-promulgation public comment 

under 5 U.S.C. 553 because this rule 

only makes technical amendments to 

the organization, procedures, and 

practices of the Department of Justice to 

improve the organization of the 

Department regulations and reflects the 

transfer of functions contemplated by 

the Homeland Security Act of 2002. 

Similarly, because this interim rule 

makes changes in internal delegations 

and procedures, and is a recodification 

of existing regulations, this interim rule 

is not subject to the effective date 

limitation of 5 U.S.C. 553(d). 

Regulatory Flexibility Act 

Because no notice of proposed rulemaking is required for this rule under 

the Administrative Procedure Act (5 

U.S.C. 553), the provisions of the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.) do not apply. 

Paperwork Reduction Act 

The provisions of the Paperwork 

Reduction Act of 1995, Public Law 104– 

13, 44 U.S.C. chapter 35, and its 

implementing regulations, 5 CFR part 

1320, do not apply to this interim rule 

because there are no new or revised 

recordkeeping or reporting 

requirements. 

Unfunded Mandates Reform Act of 1995 

This rule will not result in the 

expenditure by state, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year, and it will not 

significantly or uniquely affect small 

governments. Therefore, no actions were 

deemed necessary under the provisions 

of the Unfunded Mandates Reform Act 

of 1995. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 

This rule is not a major rule as 

defined by section 251 of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, 5 U.S.C. 804. This 

rule will not result in an annual effect 

on the economy of $100 million or 

more; a major increase in costs or prices; 

or significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

companies to compete with foreignbased companies in domestic and 

export markets. 

Congressional Review Act 

This action pertains to agency 

organization, procedures, and practices 

and does not substantially affect the 

rights or obligations of non-agency 

parties and, accordingly, is not a ‘‘rule’’ 

as that term is used by the 

Congressional Review Act (Subtitle E of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996 

(SBREFA)). Therefore, the reporting 

requirement of 5 U.S.C. 801 does not 

apply. 

Executive Order 12866 

This rule has been drafted and 

reviewed in accordance with Executive 

Order 12866, section 1(b), Principles of 

Regulation. The Department has 

determined that this rule is not a 

‘‘significant regulatory action’’ under 

section 3(f) of Executive Order 12866, 

Regulatory Planning and Review and 

accordingly this rule has not been 

reviewed by the Office of Management 

and Budget (OMB). 

Executive Order 13132 

This rule will not have substantial 

direct effects on the States, on the 

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2340 Federal Register / Vol. 74, No. 10 / Thursday, January 15, 2009 / Rules and Regulations 

1See 28 U.S.C. 2461 note. Section 3(2) of the 

amended FCPIA Act defines a CMP as any penalty, 

fine, or other sanction that: (1) Either is for a 

specific monetary amount as provided by Federal 

law or has a maximum amount provided for by 

Federal law; (2) is assessed or enforced by an 

agency pursuant to Federal law; and (3) is assessed 

or enforced pursuant to an administrative 

proceeding or a civil action in the Federal courts. 

2The CPI is published by the Department of 

Labor, Bureau of Statistics, and is available at its 

Web site: ftp://ftp.bls.gov/pub/special.requests/cpi/ 

cpiai.txt. 

relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Therefore, in 

accordance with section 6 of Executive 

Order 13132, the Department of Justice 

has determined that this rule does not 

have sufficient federalism implications 

to warrant a federalism summary impact 

statement. 

Executive Order 12988 

This rule meets the applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988, Civil 

Justice Reform. 

List of Subjects in Part 1274a 

Administrative practice and 

procedure, Immigration. 

■ Accordingly, for the foregoing 

reasons, part 1274a of chapter V of title 

8 of the Code of Federal Regulations is 

amended as follows: 

PART 1274a—CONTROL OF 

EMPLOYMENT OF ALIENS 

■ 1. The authority citation for part 

1274a continues to read as follows: 

Authority: 8 U.S.C. 1101, 1103, 1324a. 

■ 2. Revise § 1274a.1 to read as follows: 

§ 1274a.1 Employer requirements. 

(a) Applicable regulations. The 

regulations of the Department of 

Homeland Security (DHS) relating to the 

implementation of the employment 

eligibility and verification provisions of 

section 274A of the Immigration and 

Nationality Act (Act) are contained in 8 

CFR part 274a. 

(b) Adjudication of civil penalty 

proceedings. The procedures for 

hearings before an administrative law 

judge relating to civil penalties sought 

by DHS under section 274A of the Act 

are contained in 28 CFR part 68. The 

regulations governing employment 

eligibility and verification in 8 CFR part 

274a are applicable to hearings before 

an administrative law judge and, to the 

extent relevant, to cases before an 

immigration judge or the Board of 

Immigration Appeals. 

§§ 1274a.2, 1274a.3, 1274a.4, 1274a.5, 

1274a.6, 1274a.7 and 1274a.8 [Removed] 

■ 3. Remove sections 1274a.2 through 

1274a.8. 

■ 4. Section 1274a.9 is amended by: 

■ a. Removing and reserving paragraphs 

(a) through (d); 

■ b. Amending paragraph (e) by 

removing the terms ‘‘the INS’’ and ‘‘the 

Service’’ and adding in their place the 

term ‘‘DHS’’; and by 

■ c. Revising paragraph (f), to read as 

follows: 

§ 1274a.9 Enforcement procedures. 

* * * * * 

(f) Failure to file a request for a 

hearing. If the respondent does not file 

a request for a hearing in writing within 

thirty days of the date of service of a 

Notice of Intent to Fine (thirty-five days 

if served by ordinary mail), the final 

order issued by DHS shall not be subject 

to a hearing before an administrative 

law judge under 28 CFR part 68. 

Subpart B [Removed and reserved] 

■ 5. Remove and reserve subpart B. 

Dated: January 7, 2009. 

Michael B. Mukasey, 

Attorney General. 

[FR Doc. E9–526 Filed 1–14–09; 8:45 am] 

BILLING CODE 4410–30–P 

FARM CREDIT ADMINISTRATION 

12 CFR Part 622 

RIN 3052–AC47 

Rules of Practice and Procedure; 

Adjusting Civil Money Penalties for 

Inflation 

AGENCY: Farm Credit Administration. 

ACTION: Final rule. 

SUMMARY: This regulation implements 

cost-of-living adjustments to civil 

money penalties (CMPs) that the Farm 

Credit Administration (FCA) may 

impose under the Farm Credit Act of 

1971, as amended (Farm Credit Act), 

and under the National Flood Insurance 

Reform Act of 1994 (Reform Act). The 

Federal Civil Penalties Inflation 

Adjustment Act of 1990, as amended by 

the Debt Collection Improvement Act of 

1996 (FCPIA Act), requires all Federal 

agencies with the authority to impose 

CMPs to evaluate those CMPs 

periodically to ensure that they 

continue to maintain their deterrent 

value. 

DATES: Effective Date: The regulation 

will become effective on January 16, 

2009. 

FOR FURTHER INFORMATION CONTACT: 

Michael T. Wilson, Policy Analyst, 

Office of Regulatory Policy, Farm 

Credit Administration, McLean, VA 

22102–5090, (703) 883–4124, TTY 

(703) 883–4434, 

or 

Howard I. Rubin, Senior Counsel, Office 

of General Counsel, Farm Credit 

Administration, McLean, VA 22102– 

5090, (703) 883–4029, TTY (703) 883– 

4020. 

SUPPLEMENTARY INFORMATION: 

I. Objective 

The objective of this regulation is to 

recalculate the CMP inflation 

adjustments consistent with the FCPIA 

Act. 

II. Background 

A. Federal Civil Penalties Inflation 

Adjustment Act of 1990, as Amended 

The FCPIA Act requires every Federal 

agency with authority to issue CMPs to 

enact regulations that adjust its CMPs 

pursuant to the inflation adjustment 

formula in section 5(b) of the FCPIA 

Act.1 Each Federal agency was required 

to issue these regulations by October 23, 

1996, and adjust them when necessary 

at least once every 4 years thereafter. 

Section 6 of the amended FCPIA Act 

specifies that inflation-adjusted CMPs 

will apply only to violations that occur 

after the effective date of the 

adjustment. The inflation adjustment is 

based on the percentage increase in the 

Consumer Price Index (CPI).2

Specifically, section 5(b) of the FCPIA 

Act defines the term ‘‘cost-of-living 

adjustment’’ as ‘‘the percentage (if any) 

for each civil monetary penalty by 

which (1) the Consumer Price Index for 

the month of June of the calendar year 

preceding the adjustment, exceeds (2) 

the Consumer Price Index for the month 

of June of the calendar year in which the 

amount of such civil monetary penalty 

was last set or adjusted pursuant to 

law.’’ Furthermore, the increase for each 

CMP that is adjusted for inflation must 

be rounded using a method prescribed 

by section 5(a) of the FCPIA Act. 

B. CMPs Issued Under the Farm Credit 

Act 

Section 5.32(a) of the Farm Credit Act 

provides that any FCS institution or any 

officer, director, employee, agent, or 

other person participating in the 

conduct of the affairs of an FCS 

institution who violates the terms of a 

final order issued under section 5.25 or 

5.26 of the Farm Credit Act must pay up 

to $1,000 per day for each day during 

which such violation continues. Orders 

issued by FCA under section 5.25 or 

5.26 of the Farm Credit Act include 

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