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Federal Register / Vol. 86, No. 31 / Thursday, February 18, 2021 / Rules and Regulations
Inflation Adjustment Act 28 U.S.C.
2461 note requiring catch-up and annual adjustments to the NEAs CMPs.
The 2015 Act requires agencies make annual adjustments to its CMPs for inflation.
A CMP is defined in the Inflation Adjustment Act as any penalty, fine, or other sanction that is 1 for a specific monetary amount as provided by Federal law, or has a maximum amount provided for by Federal law; 2
assessed or enforced by an agency pursuant to Federal law; and 3
assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts.
These annual inflation adjustments are based on the percentage change in the Consumer Price Index for all Urban Consumers CPIU for the month of October preceding the date of the adjustment, relative to the October CPI
U in the year of the previous adjustment. The formula for the amount of a CMP inflation adjustment is prescribed by law, as explained in OMB
Memorandum M1606 February 24, 2016, and therefore the amount of the adjustment is not subject to the exercise of discretion by the Chairman of the National Endowment for the Arts Chairman.
The Office of Management and Budget has issued guidance on implementing and calculating the 2021 adjustment under the 2015 Act.3 Per this guidance, the CPIU adjustment multiplier for this annual adjustment is 1.01182. In its prior rules, the NEA identified two CMPs, which require adjustment: The penalty for false statements under the PFCRA and the penalty for violations of the NEAs Restrictions on Lobbying.
With this rule, the NEA is adjusting the amount of those CMPs accordingly.
2. Dates of Applicability The inflation adjustments contained in this rule shall apply to any violations assessed after January 15, 2021.

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3. Adjustments Two CMPs in NEA regulations require adjustment in accordance with the 2015
Act: 1 The penalty associated with the Program Fraud Civil Remedies Act 45
CFR 1149.9 and 2 the penalty associated with Restrictions on Lobbying 45 CFR 1158.400; 45 CFR part 1158, appendix A.
3 OMB Memorandum M2110 December 23, 2020.

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A. Adjustments to Penalties Under the NEAs Program Fraud Civil Remedies Act Regulations The current maximum penalty under the PFCRA for false claims and statements is currently set at $11,664.
The post-adjustment penalty or range is obtained by multiplying the preadjustment penalty or range by the percent change in the CPIU over the relevant time period and rounding to the nearest dollar. Between October 2018 and October 2019, the CPIU
increased by 101.182 percent. Therefore, the new post-adjustment maximum penalty under the PFCRA for false statements is $11,664 1.01182 =
$11,801.87 which rounds to $11,802.
Therefore, the maximum penalty under the PFCRA for false claims and statements will be $11,802.
B. Adjustments to Penalties Under the NEAs Restrictions on Lobbying Regulations The penalty for violations of the Restrictions on Lobbying is currently set at a range of a minimum of $20,478 and a maximum of $204,891.64. This range was improperly not rounded last year.
While no penalties were assessed which would implicate this incorrect maximum penalty, we note here that the amount should have been set at $204,892. We set our penalties for this year in accordance with the correct amount, without regard to the previous administrative error. The postadjustment penalty or range is obtained by multiplying the pre-adjustment penalty or range by the percent change in the CPIU over the relevant time period and rounding to the nearest dollar. Between October 2018 and October 2019, the CPIU increased by 101.182 percent. Therefore, the new post-adjustment minimum penalty under the Restrictions on Lobbying is $20,478 1.01182 = $20,720.05, which rounds to $20,720, and the maximum penalty under the Restrictions on Lobbying is $204,892 x 1.01182 =
$207,313.82, which rounds to $207,314.
Therefore, the range of penalties under the law on the Restrictions on Lobbying shall be between $20,720 and $207,314.
Administrative Procedure Act Section 553 of the Administrative Procedure Act requires agencies to provide an opportunity for notice and comment on rulemaking and also requires agencies to delay a rules effective date for 30 days following the date of publication in the Federal Register unless an agency finds good cause to forgo these requirements.
However, section 4b2 of the 2015 Act
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requires agencies to adjust civil monetary penalties notwithstanding section 553 of the Administrative Procedure Act APA and publish annual inflation adjustments in the Federal Register. This means that the public procedure the APA generally requires . . . is not required for agencies to issue regulations implementing the annual adjustment. OMB
Memorandum M1803.
Even if the 2015 Act did not except this final rule from section 553 of the APA, the NEA has good cause to dispense with notice and comment.
Section 553bB authorizes agencies to dispense with notice and comment procedures for rulemaking if the agency finds good cause that notice and comment are impracticable, unnecessary, or contrary to public interest. The annual adjustments to civil penalties for inflation and the method of calculating those adjustments are established by section 5 of the 2015 Act, as amended, leaving no discretion for the NEA. Accordingly, public comment would be impracticable because the NEA would be unable to consider such comments in the rulemaking process.
Regulatory Planning and Review Executive Order 12866
Executive Order 12866 E.O. 12866
established a process for review of rules by the Office of Information and Regulatory Affairs, which is within the Office of Management and Budget OMB. Only significant proposed and final rules are subject to review under this Executive Order. Significant, as used in E.O. 12866, means economically significant. It refers to rules with 1 an impact on the economy of $100 million; or that 2 were inconsistent or interfered with an action taken or planned by another agency; 3
materially altered the budgetary impact of entitlements, grants, user fees, or loan programs; or 4 raised novel legal or policy issues.
This final rule would not be a significant policy change and OMB has not reviewed this final rule under E.O.
12866. The NEA has made the assessments required by E.O. 12866 and determined that this final rule: 1 Will not have an effect of $100 million or more on the economy; 2 will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities; 3 will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; 4 does not alter the budgetary effects of entitlements, grants, user fees, or loan
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