[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)]
[Rules and Regulations]
[Pages 41860-41862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15129]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

[16X.LLWO310000.L13100000.PP0000]
RIN 1004-AE46


Onshore Oil and Gas Operations--Civil Penalties Inflation 
Adjustments

AGENCY: Bureau of Land Management, Interior.

ACTION: Interim final rule.

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SUMMARY: This rule adjusts the level of civil monetary penalties 
contained in the Bureau of Land Management's regulations governing 
onshore oil and gas operations as required by the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (the 
``Act''). The adjustments made by this interim final rule constitute 
the initial catch-up adjustments contemplated by the Act, and are 
consistent with applicable Office of Management and Budget (OMB) 
guidance.

DATES: As required by the Act, this rule is effective on July 28, 2016. 
Comments will be accepted until August 29, 2016.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Search for 1004-AE46 and follow the instructions for submitting 
comments.
     Mail: Director (630), Bureau of Land Management, U.S. 
Department of the Interior, 1849 C St. NW., Washington, DC 20240, 
Attention: 1004-AE46.
     Hand Delivery, or Courier: U.S. Department of the 
Interior, Bureau of Land Management, 20 M St. SE., Room 2134LM, 
Attention: Regulatory Affairs, Washington, DC 20003.

FOR FURTHER INFORMATION CONTACT: Steven Wells, Division Chief, Fluid 
Minerals Division, 202-912-7143, for information regarding the BLM's 
Fluid Minerals Program. For questions relating to regulatory process 
issues, please contact Jennifer Noe, Division of Regulatory Affairs, at 
202-912-7442. Persons who use a telecommunications device for the deaf 
(TDD) may call the Federal Information Relay Service (FIRS) at 1-800-
877-8339, 24 hours a day, seven days a week to contact the above 
individuals.

SUPPLEMENTARY INFORMATION: 

I. Background
II. Calculation of Adjustment
III. Procedural Requirements
    A. Regulatory Planning and Review (E.O. 12866 and 13563)
    B. Regulatory Flexibility Act
    C. Small Business Regulatory Enforcement Fairness Act
    D. Unfunded Mandates Reform Act
    E. Takings (E.O. 12630)
    F. Federalism (E.O. 13132)
    G. Civil Justice Reform (E.O. 12988)
    H. Consultation With Indian Tribes (E.O. 13175 and Departmental 
Policy)
    I. Paperwork Reduction Act
    J. National Environmental Policy Act
    K. Effects on the Energy Supply (E.O. 13211)
    L. Clarity of This Regulation
    M. Administrative Procedure Act

I. Background

    On November 2, 2015, the President signed the Act into law (Sec. 
701 of Pub. L. 114-74). It requires all Federal agencies to review 
their existing regulations and adjust the level of civil monetary 
penalties found in those regulations for inflation. The Act 
contemplates two adjustments--an initial ``catch-up'' adjustment 
through rulemaking from the date the penalty in question was 
established to present day, and annual adjustments for inflation 
thereafter. The purpose of these adjustments is to maintain the 
deterrent effect of civil penalties found in existing regulations, in 
order to further the policy goals of the underlying statutes. The BLM 
has reviewed its existing regulations and determined that only the 
civil monetary penalties found at 43 CFR 3163.2 are subject to the 
Act's requirements.
    Once penalties subject to the Act have been identified, the Act 
specifies the formula and format to be used to adjust those amounts. 
(Section 701(b)) The adjustments contemplated by the Act are based on 
the percent change between the Consumer Price Index for all Urban 
Consumers (CPI-U) for the month of October in 1987, the year the 
penalties were established by regulation, and the October 2015 CPI-U, 
so the catch-up adjustment multiplier is 2.06278 for all penalties. The 
Act caps adjustments at 150 percent, and Section 701(b)(1)(D) of the 
Act specifically requires that adjustments be promulgated as an interim 
final rule. The Act does not provide BLM with discretion with respect 
to either of these provisions.
    The adjustments made by this interim final rule constitute the 
initial ``catch-up'' adjustment contemplated by the Act and subsequent 
guidance from OMB, and include the following changes to the penalties 
provided by existing regulations:

----------------------------------------------------------------------------------------------------------------
                                              Description of the      Current         Catchup        Adjusted
                CFR citation                        penalty           penalty       adjustment        penalty
----------------------------------------------------------------------------------------------------------------
43 CFR 3163.2(a)............................  Failure to comply.            $500            $531          $1,031
43 CFR 3163.2(b)............................  If corrective                5,000           5,314          10,314
                                               action is not
                                               taken.
43 CFR 3163.2(d)............................  If transporter                 500             531           1,031
                                               fails to permit
                                               inspection for
                                               documentation.
43 CFR 3163.2(e)............................  Failure to permit           10,000          10,628          20,628
                                               inspection,
                                               failure to notify.
43 CFR 3163.2(f)............................  False or                    25,000          26,570          51,570
                                               inaccurate
                                               documents;
                                               unlawful transfer
                                               or purchase.
43 CFR 3163.2(g)(1).........................  Initial penalty                500             531           1,031
                                               under 43 CFR
                                               3163.2(a) for a
                                               major violation.
43 CFR 3163.2(g)(1).........................  Maximum penalty              1,000           1,063           2,063
                                               under 43 CFR
                                               3163.2(a) for a
                                               major violation.
43 CFR 3163.2(g)(1).........................  Initial penalty              5,000           5,314          10,314
                                               under 43 CFR
                                               3163.2(b) for a
                                               major violation.
43 CFR 3163.2(g)(1).........................  Maximum penalty             10,000          10,628          20,628
                                               under 43 CFR
                                               3163.2(b) for a
                                               major violation.
43 CFR 3163.2(g)(1).........................  Penalty under 43               500             531           1,031
                                               CFR 3163.2(d) for
                                               a major violation.
43 CFR 3163.2(g)(1).........................  Penalty under 43            10,000          10,628          20,628
                                               CFR 3163.2(e) for
                                               a major violation.
43 CFR 3163.2(g)(1).........................  Penalty under 43            25,000          26,570          51,570
                                               CFR 3163.2(f) for
                                               a major violation.

[[Page 41861]]

 
43 CFR 3163.2(g)(2)(iii)....................  Initial penalty                 50              53             103
                                               under 43 CFR
                                               3163.2(a) for a
                                               minor violation.
43 CFR 3163.2(g)(2)(iii)....................  Initial penalty                500             531           1,031
                                               under 43 CFR
                                               3163.2(b) for a
                                               minor violation.
43 CFR 3163.2(g)(2)(iii)....................  Maximum penalty                100             106             206
                                               under 43 CFR
                                               3163.2(a) for a
                                               minor violation.
43 CFR 3163.2(g)(2)(iii)....................  Maximum penalty              1,000           1,063           2,063
                                               under 43 CFR
                                               3163.2(b) for a
                                               minor violation.
----------------------------------------------------------------------------------------------------------------

II. Calculation of Adjustment

    OMB issued guidance on calculating the catch-up adjustment in 
accordance with the Act. See February 24, 2016, Memorandum for the 
Heads of Executive Departments and Agencies, from Shaun Donovan, 
Director, Office of Management and Budget, re: Implementation of the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015. Under this guidance, the Department of the Interior has 
identified applicable civil monetary penalties and calculated the 
catch-up adjustment. A civil monetary penalty is any assessment with a 
dollar amount that is levied for a violation of a Federal civil statute 
or regulation, and is assessed or enforceable through a civil action in 
Federal court or an administrative proceeding. A civil monetary penalty 
does not include a penalty levied for violation of a criminal statute, 
or fees for services, licenses, permits, or other regulatory review. 
The calculated catch-up adjustment is based on the percent change 
between the Consumer Price Index for all Urban Consumers (CPI-U) for 
the month of October in the year of the previous adjustment (or in the 
year of establishment, if no adjustment has been made) and the October 
2015 CPI-U.

III. Procedural Requirements

A. Regulatory Planning and Review (E.O. 12866 and 13563)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs in the Office of Management and Budget will review 
all significant rules. The Office of Information and Regulatory Affairs 
has determined that this rule is not significant. Executive Order 13563 
reaffirms the principles of E.O. 12866 while calling for improvements 
in the nation's regulatory system to promote predictability, to reduce 
uncertainty, and to use the best, most innovative, and least burdensome 
tools for achieving regulatory ends. The executive order directs 
agencies to consider regulatory approaches that reduce burdens and 
maintain flexibility and freedom of choice for the public where these 
approaches are relevant, feasible, and consistent with regulatory 
objectives. E.O. 13563 emphasizes further that regulations must be 
based on the best available science, and that the rulemaking process 
must allow for public participation and an open exchange of ideas. We 
have developed this rule in a manner consistent with these 
requirements.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires an agency to prepare 
a regulatory flexibility analysis for rules unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. The RFA applies only to rules for 
which an agency is required to first publish a proposed rule. See 5 
U.S.C. 603(a) and 604(a). The Act requires agencies to adjust civil 
penalties with an initial catch-up adjustment through an interim final 
rule. Since an interim final rule does not include first publishing a 
proposed rule, the RFA does not apply to this final rule.

C. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    (a) Does not have an annual effect on the economy of $100 million 
or more.
    (b) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (c) Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises.
    This rule will potentially affect individuals and companies who 
hold leases on Federal or Indian lands. The BLM believes that the vast 
majority of potentially affected entities will be small businesses as 
defined by the Small Business Administration. However, the BLM does not 
believe the rule will pose a significant economic impact on the 
industry, including any small entities, for two reasons. First, any 
lessee can avoid being assessed civil penalties by operating in 
compliance with BLM rules and regulations. Second, payments for 
penalties adjusted as a result of this rule will be negligible compared 
with the $23 billion worth of crude oil and natural gas produced from 
Federal and Indian leases last year.

D. Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments, or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State, 
local, or tribal governments or the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1531 et seq.) is not required.

E. Takings (E.O. 12630)

    This rule does not effect a taking of private property or otherwise 
have takings implications under Executive Order 12630. A takings 
implication assessment is not required.

F. Federalism (E.O. 13132)

    Under the criteria in section 1 of Executive Order 13132, this rule 
does not have sufficient federalism implications to warrant the 
preparation of a federalism summary impact statement. A federalism 
summary impact statement is not required.

G. Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of Executive Order 12988. 
Specifically, this rule:
    (a) Meets the criteria of section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    (b) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

[[Page 41862]]

H. Consultation With Indian Tribes (E.O. 13175 and Departmental Policy)

    The Department of the Interior strives to strengthen its 
government-to-government relationship with Indian tribes through a 
commitment to consultation with Indian tribes and recognition of their 
right to self-governance and tribal sovereignty. We have evaluated this 
rule under the Department's consultation policy and under the criteria 
in Executive Order 13175 and have determined that it has no substantial 
direct effects on federally recognized Indian tribes and that 
consultation under the Department's tribal consultation policy is not 
required.

I. Paperwork Reduction Act

    This rule does not contain information collection requirements, and 
a submission to OMB under the Paperwork Reduction Act (44 U.S.C. 3501 
et seq.) is not required. We may not conduct or sponsor, and you are 
not required to respond to, a collection of information unless it 
displays a currently valid OMB control number.

J. National Environmental Policy Act

    A detailed statement under the National Environmental Policy Act of 
1969 (NEPA) is not required because the rule is covered by a 
categorical exclusion. This rule is excluded from the requirement to 
prepare a detailed statement because it is a regulation of an 
administrative nature. (For further information see 43 CFR 46.210(i).) 
We have also determined that the rule does not involve any of the 
extraordinary circumstances listed in 43 CFR 46.215 that would require 
further analysis under NEPA.

 K. Effects on the Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in Executive Order 13211. Therefore, a Statement of Energy Effects is 
not required.

L. Clarity of This Regulation

    We are required by Executive Orders 12866 (section 1(b)(12)), 12988 
(section 3(b)(1)(B)), and 13563 (section 1(a)), and by the Presidential 
Memorandum of June 1, 1998, to write all rules in plain language. This 
means that each rule we publish must:
    (a) Be logically organized;
    (b) Use the active voice to address readers directly;
    (c) Use common, everyday words and clear language rather than 
jargon;
    (d) Be divided into short sections and sentences; and
    (e) Use lists and tables wherever possible.
    If you feel that we have not met these requirements, send us 
comments by one of the methods listed in the ADDRESSES section. To 
better help us revise the rule, your comments should be as specific as 
possible. For example, you should tell us the numbers of the sections 
or paragraphs that you find unclear, which sections or sentences are 
too long, the sections where you feel lists or tables would be useful.

M. Administrative Procedure Act

    The Act requires agencies to publish interim final rules by July 1, 
2016, with an effective date for the adjusted penalties no later than 
August 1, 2016. To comply with the Act, we are issuing these 
regulations as an interim final rule and are requesting comments post-
promulgation. Section 553(b) of the Administrative Procedure Act (APA) 
provides that, when an agency for good cause finds that ``notice and 
public procedure . . . are impracticable, unnecessary, or contrary to 
the public interest,'' the agency may issue a rule without providing 
notice and an opportunity for prior public comment.
    The BLM is promulgating this rule as an interim final rule because 
the Act expressly directs us to do so by July 1, 2016. The BLM also 
finds that there is good cause to promulgate this rule without notice 
and public procedure for two reasons. First, it would not be possible 
to meet the deadlines imposed by the Act if the BLM were first to 
publish a proposed rule, allow the public sufficient time to submit 
comments, and analyze those comments, before publishing a final rule. 
Also, since the Act does not give the BLM any discretion to vary the 
amount of the adjustment for any given penalty to reflect any views or 
suggestions provided by commenters, it would serve no purpose to 
provide an opportunity for pre-promulgation public comment on this 
rule. Thus, pre-promulgation notice and public comment is impracticable 
and unnecessary.

List of Subjects in 43 CFR Part 3160

    Administrative practice and procedure, Government contracts, 
Indians--lands, Mineral royalties, Oil and gas exploration, Penalties, 
Public lands--mineral resources, Reporting and recordkeeping 
requirements.

    For the reasons given in the preamble, the BLM amends Chapter II of 
Title 43 of the Code of Federal Regulations as follows:

PART 3160--ONSHORE OIL AND GAS OPERATIONS

0
1. The authority citation for part 3160 is revised to read as follows:

    Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 
1751; 43 U.S.C. 1732(b), 1733, 1740; and Sec. 107, Pub. L. 114-74, 
129 Stat. 599, unless otherwise noted.

Subpart 3163--Noncompliance, Assessments, and Penalties


Sec.  3163.2  [Amended]

0
2. In Sec.  3163.2:
0
a. In paragraph (a), remove ``$500'' and add in its place ``$1,031''.
0
b. In paragraph (b), remove ``$5,000'' and add in its place 
``$10,314''.
0
c. In paragraph (d), remove ``$500'' and add in its place ``$1,031''.
0
d. In paragraph (e) introductory text, remove ``$10,000'' and add in 
its place ``$20,628''.
0
e. In paragraph (f) introductory text, remove ``$25,000'' and add in 
its place ``$51,570''.
0
f. In paragraph (g)(1), remove ``$500'' each place that it occurs and 
add in its place ``$1,031''; remove ``$5,000'' and add in its place 
``$10,314''; remove ``$1,000'' each place that it occurs and add in its 
place ``$2,063''; remove ``$10,000'' each place that it occurs and add 
in its place ``$20,628''; remove ``$25,000'' and add in its place 
``$51,570''.
0
g. In paragraph (g)(2)(iii), remove ``$50'' and add in its place 
``$103''; remove ``$500'' and add in its place ``$1,031''; remove 
``$100'' and add in its place ``$206''; remove ``$1,000'' and add in 
its place ``$2,063''.


Janice M. Schneider,
Assistant Secretary, Land and Minerals Management.
[FR Doc. 2016-15129 Filed 6-27-16; 8:45 am]
BILLING CODE 4310-84-P