[Federal Register Volume 61, Number 245 (Thursday, December 19, 1996)]
[Proposed Rules]
[Pages 66966-66967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31797]



[[Page 66966]]

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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 250

RIN 1010-AC11


Outer Continental Shelf Civil Penalties

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This notice of proposed rulemaking (NPR) would revise MMS 
regulations governing the Outer Continental Shelf (OCS) Civil Penalty 
Program. MMS is amending these regulations to clarify and simplify 
assessing and collecting OCS civil penalties. In addition, MMS is 
adjusting the maximum civil penalty per day per violation from $20,000 
to $25,000 due to inflation.

DATES: MMS will consider all comments received by March 19, 1997. Any 
comments received after March 19, 1997 may not be fully considered.

ADDRESSES: Mail or hand-carry comments to the Department of the 
Interior; Minerals Management Service; Mail Stop 4700; 381 Elden 
Street; Herndon, Virginia 20170-4817; Attention: Chief, Engineering and 
Standards Branch.

FOR FURTHER INFORMATION CONTACT: Greg Gould, Program Coordinator, 
telephone (703) 787-1591 or fax (703) 787-1575.

SUPPLEMENTARY INFORMATION: The Oil Pollution Act of 1990 (OPA 90), 
(Pub.L. 101-380) expanded and strengthened MMS's authority to impose 
penalties for violating its regulations.
    Section 8201 of OPA 90 authorizes the Secretary of the Interior 
(Secretary) to assess a civil penalty without providing notice and time 
for corrective action where a failure to comply with applicable 
regulations results in a threat of serious, irreparable, or immediate 
harm or damage to human life or the environment.
    The goal of the MMS OCS Civil Penalty Program is to ensure safe and 
clean operations on the OCS. By pursuing, assessing, and collecting 
civil penalties, the program is designed to encourage compliance with 
OCS statutes and regulations.
    Not all regulatory violations warrant a review to initiate civil 
penalty proceedings. However, violations that cause injury, death, or 
environmental damage, or pose a threat to human life or the 
environment, will trigger such review. Examples of such violations 
include:
     Unsafe and unworkmanlike operations involving injury to 
humans or pollution.
     Safety devices; e.g., surface and subsurface safety 
valves, emergency shut-down systems, etc. that are:
    (a) Bypassed or removed without (1) a valid reason, (2) prior 
approval, or (3) lockout-tagout, flagging or monitoring, or
    (b) Inoperable (i.e., failures) but are left in service without 
repair.
    The provisions of OPA 90, amending the regulations at 30 CFR part 
250, Subpart N, were published as a notice of final rulemaking the 
Federal Register on May 13, 1991. As of February 1996, MMS had
     Initiated 87 compliance reviews that resulted in 78 civil 
penalty cases,
     Assessed 41 civil penalties, and
     Collected over $346,292 in fines.
    Fourteen cases were dismissed, and 23 are still in review.
    Over the past several years, MMS has had internal reviews of the 
OCS Civil Penalty Program. These reviews resulted in a rewrite of the 
regulations at 30 CFR part 250, Subpart N to simplify the language into 
``plain English.'' The new question-and-answer format should provide a 
better understanding of the OCS civil penalty process.
    Besides simplifying the regulations, MMS is proposing to increase 
the maximum civil penalty to $25,000 per day per violation. The 
provisions of OPA 90 require the Secretary to adjust at least every 3 
years the maximum civil penalty to reflect any increases in the 
Consumer Price Index for all-urban consumers (CPI-U) as prepared by the 
Department of Labor.
    In accord with Public Law 101-410, MMS divided the August 1995 CPI-
U by the August 1990 CPI-U. The resulting value was multiplied by the 
current maximum civil penalty, rounding the new value to the nearest 
$5,000 (152.5/131.6=1.159; 1.159x20,000=23,180) we rounded $23,180 to 
$25,000.

Author: Greg Gould, Inspection and Enforcement Branch, MMS, prepared 
this document.

Executive Order (E.O.) 12866

    This rule is significant under E.O. 12866 and has been reviewed by 
the Office of Management and Budget (OMB).

Regulatory Flexibility Act

    The Department of the Interior (DOI) determined that this NPR will 
not have a significant effect on a substantial number of small 
entities. In general, the entities that engage in offshore activities 
are not considered small due to the technical and financial resources 
and experience necessary to safely conduct such activities. The DOI 
also determined that the indirect effects of this NPR on small entities 
that provide support for offshore activities are small.

Paperwork Reduction Act

    The NPR does not contain collections of information that require 
approval by OMB under 44 U.S.C. 3501 et seq.

Takings Implication Assessment

    The DOI determined that this NPR does not represent a governmental 
action capable of interference with constitutionally protected property 
rights. Thus, DOI does not need to prepare a Takings Implication 
Assessment pursuant to E.O. 12630, Government Action and Interference 
with Constitutionally Protected Property Rights.

Unfunded Mandate Reform Act of 1995

    This NPR does not contain any unfunded mandates to State, local, or 
tribal governments or the private sector.

E.O. 12988

    The DOI has certified to OMB that the rule meets the applicable 
reform standards provided in Sections 3(a) and 3(b)(2) of Executive 
Order 12988.

National Environmental Policy Act

    The DOI determined that this action does not constitute a major 
Federal action significantly affecting the quality of the human 
environment; therefore, an Environmental Impact Statement is not 
required.

List of Subjects in 30 CFR Part 250

    Continental shelf, Environmental impact statements, Environmental 
protection, Government contracts, Investigations, Mineral royalties, 
Oil and gas development and production, Oil and gas exploration, Oil 
and gas reserves, Penalties, Pipelines, Public lands--mineral 
resources, Public lands--rights-of-way, Reporting and recordkeeping 
requirements, Sulphur development and production, Sulphur exploration, 
Surety bonds.

    Dated: October 2, 1996.
Sylvia V. Baca,
Assistant Secretary, Land and Minerals Management.
    For the reasons in the preamble, Minerals Management Service (MMS) 
proposes to amend 30 CFR part 250 as follows:

[[Page 66967]]

PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER 
CONTINENTAL SHELF

    1. Authority citation for part 250 continues to read as follows:

    Authority: 43 U.S.C. 1334.

    2. Subpart N is revised to read as follows:

Subpart N--Outer Continental Shelf (OCS) Civil Penalties

Sec.
250.200  Initiation of civil penalty process.
250.201  Index table.
250.202  Definitions.
250.203  What is the maximum civil penalty?
250.204  Which violations will MMS review for potential civil 
penalties?
250.205  When is a case file developed?
250.206  When will MMS notify me and provide penalty information?
250.207  How do I respond to the letter of notification?
250.208  When will I be notified of the Reviewing Officer's 
decision?
250.209  What are my appeal rights?

Subpart N--Outer Continental Shelf (OCS) Civil Penalties


Sec. 250.200  Initiation of civil penalty process.

    Whenever MMS determines, on the basis of available evidence, that a 
violation may have occurred, it will prepare a case file. MMS will 
appoint a Reviewing Officer.


Sec. 250.201  Index table.

    The following table is an index of the sections in this subpart:

                           Table Sec.  250.201                          
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                                                                 Section
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Definitions...................................................   250.202
What is the maximum civil penalty?............................   250.203
Which violations will MMS review for potential civil                    
 penalties?...................................................   250.204
When is a case file developed?................................   250.205
When will MMS notify me and provide penalty information?......   250.206
May I request a meeting with the MMS Reviewing Officer?.......   250.207
When will I be notified of the Reviewing Officer's decision?..   250.208
What are my appeal rights?....................................   250.209
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Sec. 250.202  Definitions.

    Terms used in this subpart have the following meaning:
    Case file means an MMS document file containing information and the 
record of evidence related to the alleged violation.
    Civil penalty is a fine. It is an MMS regulatory enforcement tool 
used in addition to Notices of Incidents of Noncompliance and directed 
suspensions of production or other operations.
    I, me in a question or you in a response means the person, or agent 
of a person engaged in oil, gas, sulphur, or other minerals operations 
in the Outer Continental Shelf (OCS).
    Person means, in addition to a natural person, an association 
(including partnerships and joint ventures), a State, a political 
subdivision of a State, or a private, public, or municipal corporation.
    Reviewing Officer means an MMS employee assigned to review case 
files and assess civil penalties.
    Violation means failure to comply with the Outer Continental Shelf 
Lands Act (OCSLA) or any other applicable laws, with any regulations 
issued under the OCSLA, or with the terms or provisions of leases, 
licenses, permits, rights-of-way, or other approvals issued under the 
OCSLA.
    Violator is a person who fails to comply with the OCSLA or any 
other applicable laws, with any regulations, or the terms or provisions 
of leases or rights-of-way, licenses, permits, or other approvals 
issued under the OCSLA.


Sec. 250.203  What is the maximum civil penalty?

    The maximum civil penalty is $25,000 per day per violation.


Sec. 250.204  Which violations will MMS review for potential civil 
penalties?

    MMS will review each of the following violations for potential 
civil penalties:
    (a) Violations that you don't correct within the period MMS grants;
    (b) Violations that MMS determines may constitute a threat of 
serious, irreparable, or immediate harm or damage to life (including 
fish and other aquatic life), property, any mineral deposit, or the 
marine, coastal, or human environment; or
    (c) Violations that cause serious, irreparable, or immediate harm 
or damage to life (including fish and other aquatic life), property, 
any mineral deposit, or the marine, coastal, or human environment.


Sec. 250.205  When is a case file developed?

    MMS will develop a case file during its investigation of the 
violation, and forward it to an MMS Reviewing Officer if any of the 
conditions in Sec. 250.204 exist. The Reviewing Officer will review the 
case file and determine if a civil penalty is appropriate. The 
Reviewing Officer may administer oaths and issue subpoenas requiring 
witnesses to attend meetings, submit depositions, or produce evidence.


Sec. 250.206  When will MMS notify me and provide penalty information?

    If the MMS Reviewing Officer determines that a civil penalty should 
be assessed, the Reviewing Officer will send the violator a letter of 
notification. The letter of notification will include:
    (a) The amount of the proposed civil penalty;
    (b) Information on the alleged violation(s); and
    (c) Instructions on how to obtain a copy of the case file.


Sec. 250.207  How do I respond to the letter of notification?

    (a) You have 30 calendar days after you receive the Reviewing 
Officer's letter to either:
    (1) Request, in writing, a meeting the MMS Reviewing Officer;
    (2) Submit additional information; or
    (3) Pay the proposed civil penalty.
    (b) The Reviewing Officer's letter will include instructions for 
scheduling a meeting, submitting information, or paying the penalty.


Sec. 250.208  When will I be notified of the Reviewing Officer's 
decision?

    At the end of the 30-day response period, the MMS Reviewing Officer 
will review the case file, including all information you submitted, and 
send you a decision. The decision will include the amount of any final 
civil penalty and the basis for the civil penalty. Instructions for 
paying the civil penalty will be included in the decision.


Sec. 250.209  What are my appeal rights?

    When you receive the Reviewing Officer's decision, you must either 
pay the penalty or file an appeal with MMS under part 290 of this 
chapter. If you do not either pay the penalty or file a timely appeal, 
MMS will take one or more the following actions:
    (a) MMS will collect the amount you were assessed, plus interest, 
late payment charges, and other fees as provided by law, from the date 
of assessment until the date MMS receives payment.
    (b) MMS may initiate additional enforcement proceedings including, 
if appropriate, cancellation of the lease, right-of-way, license, 
permit, or approval, or the forfeiture of a bond under this part.
    (c) MMS may bar you from doing further business with the Federal 
Government.

[FR Doc. 96-31797 Filed 12-18-96; 8:45 am]
BILLING CODE 4310-MR-M