Civil Monetary Penalty Inflation Adjustment

Civil Monetary Penalty Inflation Adjustment

SUPPLEMENTARY INFORMATION:

As part of the implementation of the Debt Collection Improvement Act of 1996, Public Law 104-131, the Railroad Retirement Board (Board) added Part 356 to its regulations to provide for adjustment of civil monetary penalties provided by law within the Board's jurisdiction. At that time, based on the best information available to the Board, it was determined that adjustments should be published for penalties under the False Claims Act, 31 U.S.C. 3729-33. The False Claims Act provides that any person who knowingly submits, or causes to submit, false claims to the government is liable for three times the government's damages plus a penalty that is adjusted for inflation. However, the False Claims Act is not administered by the Board. Instead, the Department of Justice has jurisdiction to set and adjust civil monetary penalties under the False Claims Act. See Table 1 to 28 CFR 85.5.

The Board has never attempted to independently impose civil penalties under the False Claims Act. Instead, the Board refers such cases to the Department of Justice through the Board's Office of Inspector General. Following the enactment of section 701 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74, sec. 701 (Nov. 2, 2015)), entitled the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the Board amended Part 356 to provide for inflationary adjustments to penalties under the Program Fraud Civil Remedies Act of 1986 and the False Claims Act. 81 FR 26127 (May 2, 2016). After those amendments were published, the Department of Justice Civil Division contacted the Board to resolve any conflict between the Department's jurisdiction over the False Claims Act and Part 356. After reviewing the relevant legal authorities, the Board agreed with the Department that jurisdiction to adjust civil penalties under the False Claims Act belonged to the Department and Part 356 should be amended to remove references to penalties under the False Claims Act.

Because the Board agrees with the Department that jurisdiction to adjust civil penalties under the False Claims Act belongs to the Department, repeal of the relevant section of Part 356 is directed by Executive Order 14219, Ensuring Lawful Governance and Implementing the President's "Department of Government Efficiency" Deregulatory Initiative (Feb. 19, 2025). Additionally, because the Board does not independently impose civil penalties under the False Claims Act and the Department of Justice has existing regulations at Table 1 to 28 CFR 85.5 that implement these civil penalties, this removal will not affect any potential cases, will not modify the Board's actual practice in referring such cases to the Department of Justice, and will not increase or decrease any individual's actual liability for civil penalties under the False Claims Act. Accordingly, the Board removes 20 CFR 356.3 in its entirety.

The Board also amends 20 CFR 356.2 to update the reference to the Program Fraud Civil Remedies Act of 1986. In section 5203 of the Servicemember Quality of Life Improvement and National Defense Authorization Act for Fiscal Year 2025, Congress made substantial amendments to the Program Fraud Civil Remedies Act of 1986, including changing its short title to the Administrative False Claims Act. Public Law 118-159, sec. 5203 (Dec. 23, 2024). The Board comprehensively revised its implementing regulations for the Administrative False Claims Act in 20 CFR part 355 on June 16, 2025. 90 FR 25144 (Jun. 16, 2025). The amendment to § 356.2 aligns the civil monetary penalty inflation adjustment provision with the rest of the implementing regulations in Part 355. As stated in § 356.2(e), the Board will continue to publish the maximum penalty which may be assessed under Part 355 through a Federal Register notice on or before January 15 of each calendar year.

Finally, the Board amends § 356.1 to remove obsolete language that described the one-time catch-up adjustment in civil penalty amounts required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. 28 U.S.C. 2461 note. This one-time adjustment was completed in May 2016 and took effect for claims or statements made on or after August 1, 2016.

This direct final rule is being issued without prior public notice or opportunity for public comments. The Board does not anticipate this rule will generate adverse comment, and the effective date of the rule is conditional on the non-receipt of adverse comments. If the Board receives significant adverse comments prior to the effective date of this direct final rule, the Board will publish a timely notification in the Federal Register to withdraw the rule.

Regulatory Analysis

Executive Order 12866, as Supplemented by Executive Order 13563

The Board, with the Office of Management and Budget, has determined that this is not a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. Therefore, no regulatory impact analysis is required.

Regulatory Flexibility Act

The Board certifies that this direct final rule would not have a significant economic impact on a substantial number of small entities because it affects only individuals.

Paperwork Reduction Act

This direct final rule imposes no reporting or recordkeeping requirements subject to Office of Management and Budget clearance.

For the reasons stated in the preamble, the Railroad Retirement Board amends 20 CFR part 356 as follows:

PART 356-CIVIL MONETARY PENALTY INFLATION ADJUSTMENT