[Federal Register Volume 81, Number 127 (Friday, July 1, 2016)]
[Rules and Regulations]
[Pages 43066-43069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15607]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

30 CFR Parts 550 and 553

[Docket ID: BOEM-2016-0055; MMAA104000]
RIN 1010-AD95


Oil and Gas and Sulphur Operations in the Outer Continental 
Shelf--Civil Penalties Inflation Adjustments

AGENCY: Bureau of Ocean Energy Management, Interior.

ACTION: Interim final rule.

-----------------------------------------------------------------------

SUMMARY: This rule adjusts the level of civil monetary penalties 
contained in the Bureau of Ocean Energy Management (BOEM) regulations 
pursuant to the Outer Continental Shelf Lands Act, the Oil Pollution 
Act of 1990, the Federal Civil Penalties Inflation Adjustment Act 
Improvements

[[Page 43067]]

Act of 2015 and Office of Management and Budget guidance.

DATES: This rule is effective on August 1, 2016. Comments will be 
accepted until August 30, 2016.

ADDRESSES: Address all comments regarding this proposed rule to BOEM by 
any of the following methods:
     Federal Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     U.S. Postal Service or Other Mail Delivery Service: 
Address to Robert Sebastian, Office of Policy, Regulation and Analysis 
(OPRA), BOEM, Department of the Interior, 1849 C Street NW., Mailstop 
5238, Washington, DC 20240.
     Hand delivery to Office of Policy, Regulation and 
Analysis, BOEM, Department of the Interior, at 1849 C Street NW., Room 
5249, Washington, DC 20240.
    Please include your name, return address, and phone number and/or 
email address, so we can contact you if we have questions regarding 
your submission.

FOR FURTHER INFORMATION CONTACT: Robert Sebastian, Office of Policy, 
Regulation and Analysis at (504) 736-2761 or email at 
robert.sebastian@boem.gov.

SUPPLEMENTARY INFORMATION:

I. Background
II. Calculation of Adjustments
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

    The Outer Continental Shelf Lands Act (OCSLA) directs the Secretary 
of the Interior to adjust the OCSLA maximum civil penalty amount at 
least once every three years to reflect any increase in the Consumer 
Price Index to account for inflation. 43 U.S.C. 1350(b)(1). The Federal 
Civil Penalties Inflation Adjustment Act of 1990 (Public Law 104-410) 
(FCPIA of 1990) required that all civil monetary penalties, including 
the OCSLA maximum civil penalty amount, be adjusted at least once every 
four years. Pursuant to OCSLA and the FCPIA of 1990, the OCSLA maximum 
civil penalty amount was last adjusted in 2011. 76 FR 38,294 (June 30, 
2011). After running the computations, the Department of the Interior 
determined that adjustments of the OCSLA maximum civil penalty amount 
were not warranted in 2014 and 2015.
    Similarly, the Oil Pollution Act (OPA) of 1990 authorizes the 
Secretary of the Interior to impose civil penalties for failure to 
comply with financial responsibility regulations that implement OPA. 
The FCPIA of 1990 required that all civil monetary penalties, including 
the OPA maximum civil penalty amount, be adjusted at least once every 
four years. Pursuant to the FCPIA of 1990, the OPA maximum civil 
penalty amount was adjusted for the first time in 2007, 72 FR 8,897 
(Feb. 28, 2007), and again in 2011, 76 FR 38,294 (June 30, 2011). After 
running the computations, the Department of the Interior determined 
that adjustments of the OPA maximum civil penalty amount were not 
warranted in 2014 and 2015.
    On November 2, 2015, the President signed into law the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 
701 of Public Law 114-74) (FCPIA of 2015), which further amended the 
FCPIA of 1990. The FCPIA of 2015 requires Federal agencies to adjust 
the level of civil monetary penalties with an initial ``catch-up'' 
adjustment, if warranted, through rulemaking, and then to make 
subsequent annual adjustments for inflation. The purpose of these 
adjustments is to maintain the deterrent effect of civil penalties and 
to further the policy goals of the underlying statutes.
    Pursuant to OCSLA and the FCPIA of 2015, this rule adjusts the 
following maximum civil monetary penalties per day per violation:

----------------------------------------------------------------------------------------------------------------
                                                                      Current                        Adjusted
             CFR citation                  Description of the         maximum       Multiplier        maximum
                                                 penalty              penalty                         penalty
----------------------------------------------------------------------------------------------------------------
30 CFR 550.1403.......................  Failure to comply with           $40,000         1.05042         $42,017
                                         regulatory and
                                         contractual obligations.
30 CFR 553.51(a)......................  Failure to comply with          * 25,000         1.78156          44,539
                                         financial
                                         responsibility
                                         requirements.
----------------------------------------------------------------------------------------------------------------
* The current OPA maximum civil penalty amount provided in 30 CFR 553.51(a) is $30,000. However, the FCPIA of
  2015 instructs BOEM to use the OPA maximum civil penalty amount as last adjusted by a provision of law other
  than the FCPIA of 1990 when calculating the 2016 civil penalty adjustment. Therefore, BOEM used the OPA
  maximum civil penalty amount of $25,000, which was established by OPA in 1990, when calculating the 2016 civil
  penalty adjustment.

II. Calculation of Adjustments

    The Office of Management and Budget (OMB) issued guidance on 
calculating the civil monetary penalty adjustments pursuant to the 
FCPIA of 2015. See February 24, 2016, Memorandum for the Heads of 
Executive Departments and Agencies, from Shaun Donovan, Director, 
Office of Management and Budget, subject: 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 necessary 
adjustments. 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 adjustment for 2016 is based on the percent change 
between the Consumer Price Index for all Urban Consumers (CPI-U) for 
the month of October in the calendar year of the previous adjustment 
(or in the year of establishment, if subsequent adjustments were made 
pursuant to the FCPIA of 1990) and the October 2015 CPI-U.
    For 2016, OCSLA and the FCPIA of 2015 require that BOEM adjust the 
OCSLA maximum civil penalty amount and provide the adjustment timing. 
In computing the new OCSLA maximum civil penalty amount, since the 
amount was last adjusted in 2011, BOEM divided the October 2015 CPI-U 
by the

[[Page 43068]]

October 2011 CPI-U (237.838/226.421). This resulted in a multiplying 
factor of 1.05042. The existing OCSLA maximum civil penalty amount 
($40,000) was multiplied by the multiplying factor (40,000 x 1.05042 = 
42,016.80). The FCPIA of 2015 requires that the OCSLA maximum civil 
penalty amount be rounded to the nearest $1.00 at the end of the 
calculation process. Accordingly, the adjusted OCSLA maximum civil 
penalty is $42,017. This increase in the OCSLA maximum civil penalty 
amount does not exceed 150 percent of the OCSLA maximum civil penalty 
amount as of November 2, 2015, and thus complies with the FCPIA of 
2015. Also, pursuant to the FCPIA of 2015, the increase in the OCSLA 
maximum civil penalty amount applies to civil penalties assessed after 
the date the increase takes effect, even when the associated 
violation(s) predates such increase.
    For 2016, the FCPIA of 2015 requires that BOEM adjust the OPA 
maximum civil penalty amount and provides the adjustment timing. The 
OPA maximum civil penalty amount was last adjusted pursuant to the 
FPCIA of 1990 in 2011 ($30,000). However, the FCPIA of 2015 instructs 
BOEM to use the OPA maximum civil penalty amount as last adjusted by a 
provision of law other than the FCPIA of 1990 when calculating the 2016 
civil penalty adjustment. The OPA maximum civil penalty was last 
adjusted by a provision of law other than the FCPIA of 1990 when it was 
established by OPA in 1990. Therefore, in computing the new OPA maximum 
civil penalty amount, BOEM divided the October 2015 CPI-U by the 
October 1990 CPI-U (237.838/133.5). This resulted in a multiplying 
factor of 1.78156. The statutory OPA maximum civil penalty amount 
($25,000) was multiplied by the multiplying factor (25,000 x 1.78156 = 
44,539.00). The FCPIA of 2015 requires that the OPA maximum civil 
penalty amount be rounded to the nearest $1.00 at the end of the 
calculation process. Accordingly, the adjusted OPA maximum civil 
penalty is $44,539. This increase in the OPA maximum civil penalty 
amount does not exceed 150 percent of the OPA maximum civil penalty 
amount as of November 2, 2015, and thus complies with the FCPIA of 
2015. Also, pursuant to the FCPIA of 2015, the increase in the OPA 
maximum civil penalty amount applies to civil penalties assessed after 
the date the increase takes effect, even when the associated 
violation(s) predates such increase.

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, to the extent permitted by statute.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires an agency to prepare 
a regulatory flexibility analysis for all 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 Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 requires agencies to adjust 
civil penalties with an initial catch-up adjustment through an interim 
final rule. An interim final rule does not include first publishing a 
proposed rule. Thus, the RFA does not apply to this rulemaking.

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) Will 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) Will 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.

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 Order13132, 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.

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, under Departmental 
Manual Part 512 Chapters 4 and 5, 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.

[[Page 43069]]

I. Paperwork Reduction Act

    This rule does not contain information collection requirements, and 
a submission to the Office of Management and Budget 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

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed statement 
under the National Environmental Policy Act of 1969 (NEPA) is not 
required because the rule is covered by a categorical exclusion (see 43 
CFR 46.210(i).). This rule is excluded from the requirement to prepare 
a detailed statement because it is a regulation of an administrative 
nature. 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. 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. 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, etc.

M. Administrative Procedure Act

    The FCPIA of 2015 requires agencies to publish interim final rules 
by July 1, 2016, with an effective date for the adjusted penalties of 
no later than August 1, 2016. To comply with the FCPIA of 2015, we are 
issuing these regulations as an interim final rule and are requesting 
comments post-promulgation. 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. 5 U.S.C. 553(b). 
BOEM finds that there is good cause to promulgate this rule without 
first providing for public comment. It would not be practicable to meet 
the deadlines imposed by the FCPIA of 2015 if we were to first publish 
a proposed rule, allow the public sufficient time to submit comments, 
analyze the comments, and publish a final rule. Also, BOEM is 
promulgating this final rule to implement the statutory directive in 
the FCPIA of 2015, which requires agencies to publish an interim final 
rule and to update the civil penalty amounts by applying a specified 
formula. BOEM has no discretion to vary the amount of the adjustment to 
reflect any views or suggestions provided by commenters, so notice and 
comment is unnecessary. Accordingly, it would serve no purpose to 
provide an opportunity for pre-promulgation public comment on this 
rule. Thus, BOEM finds pre-promulgation notice and public comment to be 
impracticable and unnecessary.

List of Subjects

30 CFR Part 550

    Administrative practice and procedure, Continental shelf, 
environmental impact statements, environmental protection, federal 
lands, government contracts, investigations, oil and gas exploration, 
outer continental shelf, penalties, pipelines, mineral resources, 
rights-of-way, reporting and recordkeeping requirements, sulfur.

30 CFR Part 553

    Administrative practice and procedure, Continental shelf, Financial 
responsibility, OCS, Oil and gas exploration, Oil pollution, Liability, 
Limit of liability, Penalties, Pipelines, Rights-of-way, Reporting and 
recordkeeping requirements, Surety bonds, Treasury securities.

    Dated; June 24, 2016.
Janice M. Schneider,
Assistant Secretary--Land and Minerals Management.

    For the reasons stated in the preamble, the BOEM amends 30 CFR 
parts 550 and 553 as follows:

PART 550--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER 
CONTINENTAL SHELF

0
1. The authority citation for part 550 is revised to read as follows:


    Authority: 30 U.S.C. 1751; 31 U.S.C. 9701; 43 U.S.C. 1334.

0
2. Revise Sec.  550.1403 to read as follows:


Sec.  550.1403  What is the maximum civil penalty?

    The maximum civil penalty is $42,017 per day per violation.

PART 553--OIL SPILL FINANCIAL RESPONSIBILITY FOR OFFSHORE 
FACILITIES

0
3. The authority citation for part 553 is revised to read as follows:

    Authority: 33 U.S.C. 2704, 2716; E.O. 12777, as amended.

0
4. In Sec.  553.51, revise paragraph (a) to read as follows:


Sec.  553.51  What are the penalties for not complying with this part?

    (a) If you fail to comply with the financial responsibility 
requirements of OPA at 33 U.S.C. 2716 or with the requirements of this 
part, then you may be liable for a civil penalty of up to $44,539 per 
COF per day of violation (that is, each day a COF is operated without 
acceptable evidence of OSFR).
* * * * *
[FR Doc. 2016-15607 Filed 6-30-16; 8:45 am]
BILLING CODE 4310-MR-P