Billing Code: 8026-09
SMALL BUSINESS ADMINISTRATION
13 CFR Parts 107, 120, 142, and 146
RIN 3245-AI01
Civil Monetary Penalties Inflation Adjustments
AGENCY: U.S. Small Business Administration.
ACTION: Final rule.
SUMMARY: The Small Business Administration (SBA) is amending its regulations to
adjust for inflation the amount of certain civil monetary penalties that are within the
jurisdiction of the agency. These adjustments comply with the requirement in the Federal
Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015, to make annual
adjustments to the penalties.
DATES: This rule is effective [INSERT DATE OF PUBLICATION IN THE
FEDERAL REGISTER].
FOR FURTHER INFORMATION CONTACT: Arlene Embrey, 202-205-6976 or at
arlene.embrey@sba.gov.
SUPPLEMENTARY INFORMATION:
I. Background
On November 2, 2015, the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015 (the 2015 Inflation Adjustment Act), Public Law 114-74, 129
Stat. 584, was enacted. This act amended the Federal Civil Penalties Inflation
Adjustment Act of 1990, Public Law 101-410, 104 Stat. 890 (the 1990 Inflation
Adjustment Act), to improve the effectiveness of civil monetary penalties and to maintain
their deterrent effect. The 2015 Inflation Adjustment Act required agencies to issue a
final rule by August 1, 2016, to adjust the level of civil monetary penalties with an initial

“catch-up” adjustment and to annually adjust these monetary penalties for inflation by
January 15 of each subsequent year.
Based on the definition of a “civil monetary penalty” in the 1990 Inflation
Adjustment Act, agencies are to make adjustments only to the civil penalties that (i) are
for a specific monetary amount as provided by Federal law or have a maximum amount
provided for by Federal law; (ii) are assessed or enforced by an agency; and (iii) are
enforced or assessed in an administrative proceeding or a civil action in the Federal
courts. Therefore, penalties that are stated as a percentage of an indeterminate amount or
as a function of a violation (penalties that encompass actual damages incurred) are not to
be adjusted.
SBA published in the Federal Register an interim final rule with its initial
adjustments to the civil monetary penalties, including an initial “catch-up” adjustment, on
May 19, 2016 (81 FR 31489) with an effective date of August 1, 2016. SBA published
its first annual adjustments to the monetary penalties on February 9, 2017 (82 FR 9967),
with an immediate effective date. SBA published its subsequent annual adjustments for
2018 on February 21, 2018 (83 FR 7361), for 2019 on April 1, 2019 (84 FR 12059), for
2020 on March 10, 2020 (85 FR 13725), for 2021 on September 24, 2021 (86 FR 52955),
for 2022 on May 11, 2022 (87 FR 28756), and for 2023 on August 1, 2023 (88 FR
50003) all with immediate effective dates. This rule will establish the adjusted penalty
amounts for 2024 with an immediate effective date upon publication.
On December 19, 2023, the Office of Management and Budget (OMB) published
its annual guidance memorandum for 2024 civil monetary penalties inflation adjustments
(M-24-07, Implementation of Penalty Inflation Adjustments for 2024 pursuant to the
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015). The
memorandum provides the formula for calculating the annual adjustments based on the
Consumer Price Index for all Urban Consumers (CPI-U) for the month of October

preceding the adjustment, and specifically on the change between the October CPI-U
preceding the date of adjustment and the prior year’s CPI-U. Based on this methodology,
the 2024 civil monetary penalty inflation adjustment factor is 1.03241 (October 2023
CPI-U (307.671) / October 2022 CPI-U (298.012)). The annual adjustment amounts
identified in this rule were obtained by applying this multiplier of 1.03241 to those
penalty amounts that were published in SBA’s 2023 adjustments to civil monetary
penalties at 88 FR 50003 (August 1, 2023).
II. Civil Money Penalties Adjusted by This Rule
This rule adjusts civil monetary penalties authorized by the Small Business Act,
the Small Business Investment Act of 1958 (SBI Act), the Program Fraud Civil Remedies
Act, and the Byrd Amendment to the Federal Regulation of Lobbying Act. These
penalties and the implementing regulations are discussed below.
1. 13 CFR 107.665 – Civil Penalties.
SBA licenses, regulates, and provides financial assistance to financial entities
called small business investment companies (SBICs). Pursuant to section 315 of the SBI
Act, 15 U.S.C. 687g, SBA may impose a penalty on any SBIC for each day that it fails to
comply with SBA’s regulations or directives governing the filing of regular or special
reports. The penalty for non-compliance is incorporated in § 107.665 of the SBIC
program regulations.
This rule amends § 107.665 to adjust the current civil penalty from $314 to $324
per day of failure to file. The current civil penalty of $314 was multiplied by the
multiplier of 1.03241 to reach a product of $324, rounded to the nearest dollar.
2. 13 CFR 120.465 – Civil penalty for late submission of required reports.
According to the regulations at § 120.465, any SBA Supervised Lender, as
defined in 13 CFR 120.10, that violates a regulation or written directive issued by the
SBA Administrator regarding the filing of any regular or special report is subject to the

civil penalty amount stated in § 120.465(b) for each day the company fails to file the
report, unless the SBA Supervised Lender can show that there is reasonable cause for its
failure to file. This penalty is authorized by section 23(j)(1) of the Small Business Act,
15 U.S.C. 650(j)(1).
This rule amends § 120.465(b) to adjust the current civil penalty to $8,058 per day
of failure to file from $7,805 per day of failure to file. The current civil penalty of $7,805
was multiplied by the multiplier of 1.03241 to reach a product of $8,058, rounded to the
nearest dollar.
3. 13 CFR 120.1500 – Types of Formal Enforcement Actions—SBA Lenders.
According to the regulations at § 120.1500(b), SBA may assess a civil monetary
penalty against a 7(a) Lender. In determining whether to assess a civil monetary penalty
and, if so, in what amount, SBA may consider: the gravity (e.g., severity and frequency)
of the violation; the history of previous violations; the financial resources and good faith
of the 7(a) Lender; and any other matters as justice may require. This penalty is
authorized by the Small Business Act, 15 U.S.C. 657t(e)(2)(B).
This rule amends § 120.1500(b)(2) to adjust the current civil penalty from
$289,504 to $298,887. The current civil penalty of $289,504 was multiplied by the
multiplier of 1.03241 to reach a product of $298,887, rounded to the nearest dollar.
4. 13 CFR 142.1 – Overview of Regulations.
SBA has promulgated regulations at 13 CFR part 142 to implement the civil
penalties authorized by the Program Fraud Civil Remedies Act of 1986 (PFCRA), 31
U.S.C. 3801-3812. Under the current regulation at 13 CFR 142.1(b), a person who
submits, or causes to be submitted, a false claim or a false statement to SBA is subject to
a civil penalty of not more than $13,508 for each statement or claim.
This rule amends § 142.1(b) to adjust the current civil penalty from $13,508 to
$13,946. The adjusted civil penalty amount was calculated by multiplying the current

civil penalty of $13,508 by the multiplier of 1.03241 to reach a product of $13,946,
rounded to the nearest dollar.
5. 13 CFR 146.400 – Penalties.
SBA’s regulations at 13 CFR part 146 govern lobbying activities by recipients of
Federal financial assistance. These regulations implement the authority in 31 U.S.C.
1352 and impose penalties on any recipient that fails to comply with certain requirements
in the part. Specifically, under § 146.400(a) and (b), penalties may be imposed on those
who make prohibited expenditures or fail to file the required disclosure forms or to
amend such forms, if necessary.
This rule amends § 146.400(a) and (b) to adjust the current civil penalty amounts
to “not less than $24,496 and not more than $244,958.” The current civil penalty
amounts of $23,727 and $237,268 were multiplied by the multiplier of 1.03241 to reach a
product of $24,496 and $244,958, respectively, rounded to the nearest dollar.
This rule also amends § 146.400(e) to adjust the civil penalty that may be
imposed for a first-time violation of § 146.400(a) and (b) to $24,496 and to adjust the
civil penalty that may be imposed for second and subsequent offenses to “not less than
$24,496 and not more than $244,958.” The current civil penalty amounts of $23,327 and
$237,268 were multiplied by the multiplier of 1.03241 to reach a product of $24,496 and
$244,958, respectively, rounded to the nearest dollar.
Compliance with Executive Orders 12866, 12988, 13132, and the Administrative
Procedure Act (5 U.S.C. 553), the Congressional Review Act (5 U.S.C. 801–808), the
Paperwork Reduction Act (44 U.S.C. Ch. 35) and the Regulatory Flexibility Act (5
U.S.C. 601-612).
Executive Order 12866
The Office of Management and Budget has determined that this final rule is not a
significant regulatory action under Executive Order 12866.

Executive Order 12988
This action meets applicable standards set forth in sections 3(a) and 3(b)(2) of
Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate
ambiguity, and reduce burden. The action does not have retroactive or preemptive effect.
Executive Order 13132
For the purpose of Executive Order 13132, SBA determined that the rule will not
have substantial direct effects on the States, on the relationship between the National
Government and the States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, this final rule has no federalism implications
warranting preparation of a federalism assessment.
The Administrative Procedure Act (APA)
The APA requires agencies generally to provide notice and an opportunity for
public comment before adopting a rule unless the agency for good cause finds that notice
and comment are impracticable, unnecessary, or contrary to the public interest. 5 U.S.C.
553(b). The APA also requires agencies to allow at least 30-days after publication for a
final rule to become effective “except as otherwise provided by the agency for good
cause found and published with the rule.” 5 U.S.C. 553(d). For the following reasons
prior public notice, an opportunity for public comment, and a delayed effective date are
not required for this rule. The 2015 Inflation Adjustment Act directs agencies to adjust
their civil penalties annually notwithstanding section 553 of the APA. 28 U.S.C. 2461
note, sec. 4(b)(2).
This exemption from the notice and comment, and delayed effective date
requirements of the APA, in effect provides SBA with the good cause justification to
promulgate this as a final rule that will become effective immediately on the date it is
published in the Federal Register. Additionally, the 2015 Inflation Adjustment Act
provides a non-discretionary cost-of-living formula for making the annual adjustment to

the civil monetary penalties; SBA merely performs the ministerial task of calculating the
amount of the adjustments. Therefore, even without the statutory exemption from the
APA, notice and comment would be unnecessary.
The Congressional Review Act (CRA)
The Office of Management and Budget determined that this rule is not a major
rule under 5 U.S.C. 804(2).
Paperwork Reduction Act
SBA has determined that this rule does not impose additional reporting or
recordkeeping requirements.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) requires agencies to consider the effect of
their regulatory actions on small entities, including small non-profit businesses, and small
local governments. Pursuant to the RFA, when an agency issues a rule, the agency must
prepare an analysis that describes whether the impact of the rule will have a significant
economic impact on a substantial number of such small entities. However, the RFA
requires such analysis only where notice and comment rulemaking is required. As stated
above, SBA has express statutory authority to issue this rule without regard to the notice
and comment requirement of the APA. Since notice and comment is not required before
this rule is issued, SBA is not required to prepare a regulatory analysis.
List of Subjects
13 CFR Part 107
Investment companies, Loan programs-business, Reporting and recordkeeping
requirements, Small businesses.
13 CFR Part 120
Loan programs-business, Reporting and recordkeeping requirements, Small
businesses.

13 CFR Part 142
Administrative practice and procedure, Claims, Fraud, Penalties.
13 CFR Part 146
Government contracts, Grant programs, Loan programs, Lobbying, Penalties,
Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, SBA amends 13 CFR parts 107, 120,
142, and 146 as follows:
PART 107— SMALL BUSINESS INVESTMENT COMPANIES
1. The authority citation for part 107 continues to read as follows:
Authority: 15 U.S.C. 662, 681-687, 687b-h, 687k-m.
§ 107.665 [Amended]
2. In § 107.665, remove “$314” and add in its place “$324”.
PART 120—BUSINESS LOANS
3. The authority citation for part 120 continues to read as follows:
Authority: 15 U.S.C. 634(b) (6), (b) (7), (b) (14), (h), and note, 636(a), (h) and
(m), 650, 687(f), 696(3) and (7), and 697(a) and (e); sec. 521, Pub. L. 114-113, 129 Stat.
2242; sec. 328(a), Pub. L. 116-260, 134 Stat. 1182.
§ 120.465 [Amended]
4. In § 120.465, amend paragraph (b) by removing “$7,805” and adding in its
place “$8,058”.
§ 120.1500 [Amended]
5. In § 120.1500, amend paragraph (b)(2) by removing “289,504” and adding in
its place “298,887”.
PART 142—PROGRAM FRAUD CIVIL REMEDIES ACT REGULATIONS
6. The authority citation for part 142 continues to read as follows:
Authority: 15 U.S.C. 634(b); 31 U.S.C. 3803(g)(2).
§ 142.1 [Amended]

7. In § 142.1, amend paragraph (b) by removing “$13,508” and adding in its
place “$13,946”.
PART 146—NEW RESTRICTIONS ON LOBBYING
8. The authority citation for part 146 continues to read as follows:
Authority: 31 U.S.C. 1352 and 15 U.S.C. 634(b)(6).
§ 146.400 [Amended]
9. In § 146.400, remove “$23,727” wherever it appears and add in its place
“$24,496” and remove “$237,268” wherever it appears and add in its place “$244,958”.
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2024-12282 Filed: 6/4/2024 8:45 am; Publication Date: 6/5/2024]