[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Rules and Regulations]
[Pages 6305-6307]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00727]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

[17X.LLWO310000.L13100000.PP0000]
RIN 1004-AE49


Onshore Oil and Gas Operations--Annual Civil Penalties Inflation 
Adjustments

AGENCY: Bureau of Land Management, Interior.

ACTION: 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 final rule constitute the annual 
inflation adjustments contemplated by the Act, and are consistent with 
applicable Office of Management and Budget (OMB) guidance.

DATES: This rule is effective on January 19, 2017.

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, 7 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. Administrative Procedure Act

I. Background

    On November 2, 2015, the President signed the Act into law (Sec. 
701 of Pub. L. 114-74). The Act requires agencies to:
    1. Adjust the level of civil monetary penalties with an initial 
``catch-up'' adjustment through an interim final rulemaking in 2016;
    2. Make subsequent annual adjustments for inflation beginning in 
2017; and
    3. Report annually in Agency Financial Reports on these inflation 
adjustments.
    In July 2016, the BLM issued an interim final rule that adjusted 
the level of civil monetary penalties with the initial ``catch-up'' 
adjustment, which is reflected in the table below in the ``Previous 
Penalty'' column.
    With this final rule, the BLM is adjusting civil monetary penalties 
for inflation. The adjustments made by this rule are consistent with 
the requirements of the Act and OMB guidance.
    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.
    The adjustments made by this final rule constitute the first annual 
adjustment contemplated by the Act, and include the following changes 
to the penalties:

----------------------------------------------------------------------------------------------------------------
                                                                                     Previous        Adjusted
                 CFR Citation                      Description of the penalty         penalty         penalty
----------------------------------------------------------------------------------------------------------------
43 CFR 3163.2(a)..............................  Failure to comply...............          $1,031          $1,048
43 CFR 3163.2(b)..............................  If corrective action is not               10,314          10,483
                                                 taken.
43 CFR 3163.2(d)..............................  If transporter fails to permit             1,031           1,048
                                                 inspection for documentation.
43 CFR 3163.2(e)..............................  Failure to permit inspection,             20,628          20,965
                                                 failure to notify.
43 CFR 3163.2(f)..............................  False or inaccurate documents;            51,570          52,414
                                                 unlawful transfer or purchase.
43 CFR 3163.2(g)(1)...........................  Initial penalty under 43 CFR               1,031           1,048
                                                 3163.2(a) for a major violation.
43 CFR 3163.2(g)(1)...........................  Maximum penalty under 43 CFR               2,063           2,097
                                                 3163.2(a) for a major violation.

[[Page 6306]]

 
43 CFR 3163.2(g)(1)...........................  Initial penalty under 43 CFR              10,314          10,483
                                                 3163.2(b) for a major violation.
43 CFR 3163.2(g)(1)...........................  Maximum penalty under 43 CFR              20,628          20,965
                                                 3163.2(b) for a major violation.
43 CFR 3163.2(g)(1)...........................  Penalty under 43 CFR 3163.2(d)             1,031           1,048
                                                 for a major violation.
43 CFR 3163.2(g)(1)...........................  Penalty under 43 CFR 3163.2(e)            20,628          20,965
                                                 for a major violation.
43 CFR 3163.2(g)(1)...........................  Penalty under 43 CFR 3163.2(f)            51,570          52,414
                                                 for a major violation.
43 CFR 3163.2(g)(2)(iii)......................  Initial penalty under 43 CFR                 103             105
                                                 3163.2(a) for a minor violation.
43 CFR 3163.2(g)(2)(iii)......................  Initial penalty under 43 CFR               1,031           1,048
                                                 3163.2(b) for a minor violation.
43 CFR 3163.2(g)(2)(iii)......................  Maximum penalty under 43 CFR                 206             209
                                                 3163.2(a) for a minor violation.
43 CFR 3163.2(g)(2)(iii)......................  Maximum penalty under 43 CFR               2,063           2,097
                                                 3163.2(b) for a minor violation.
----------------------------------------------------------------------------------------------------------------

II. Calculation of Adjustment

    OMB issued guidance on calculating the annual adjustment for 2017 
in accordance with the Act. See December 16, 2016, Memorandum for the 
Heads of Executive Departments and Agencies, from Shaun Donovan, 
Director, Office of Management and Budget, re: Implementation of the 
2017 annual adjustment pursuant to 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 annual 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 
annual inflation adjustments are based on the percent change between 
the October CPI-U preceding the date of the adjustment, and the prior 
year's October CPI-U. In this case, October 2016 CPI-U (241.729)/
October 2015 CPI-U (237.838) = 1.01636.

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 annually for inflation through a final rule (see Sec.  
4(b)(2) of the Act). Because the final rule in this case does not 
include publication of 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 in FY 2015.

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 6307]]

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. Administrative Procedure Act

    The BLM is promulgating this rule as a final rule because the Act 
expressly directs us to do so. In accordance with the Act, agencies 
must adjust civil monetary penalties notwithstanding Section 553 of the 
Administrative Procedure Act (APA) (see Sec.  4(b)(2) of the Act). This 
means that the notice and opportunity to comment procedures of the APA 
do not apply and are not required for agencies to issue regulations 
implementing the annual adjustment. In addition, since the Act does not 
give the BLM any discretion to vary the amount of the annual inflation 
adjustment for any given penalty to reflect any views or suggestions 
provided by commenters, it would serve no purpose to provide an 
opportunity for public comment on this rule.

List of Subjects 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 ``$1,031'' and add in its place ``$1,048''.
0
b. In paragraph (b), remove ``$10,314'' and add in its place 
``$10,483''.
0
c. In paragraph (d), remove ``$1,031'' and add in its place ``$1,048''.
0
d. In paragraph (e) introductory text, remove ``$20,628'' and add in 
its place ``$20,965''.
0
e. In paragraph (f) introductory text, remove ``$51,570'' and add in 
its place ``$52,414''.
0
f. In paragraph (g)(1), remove ``$1,031'' each place that it occurs and 
add in its place ``$1,048''; remove ``$10,314'' and add in its place 
``$10,483''; remove ``$2,063 and add in its place ``$2,097''; remove 
``$20,628''each place that it occurs and add in its place ``$20,965''; 
remove ``$51,570'' and add in its place ``$52,414''.
0
g. In paragraph (g)(2)(iii), remove ``$103'' and add in its place 
``$105''; remove ``$1,031'' and add in its place ``$1,048''; remove 
``$206'' and add in its place ``$209''; remove ``$2,063'' and add in 
its place ``$2,097''.

    Dated: January 10, 2017.
Amanda C. Leiter,
Acting Assistant Secretary, Land and Minerals Management.
[FR Doc. 2017-00727 Filed 1-18-17; 8:45 am]
 BILLING CODE 4310-84-P