[Federal Register Volume 82, Number 30 (Wednesday, February 15, 2017)]
[Rules and Regulations]
[Pages 10709-10711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-02983]



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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: Final rule.

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SUMMARY: This rule adopts and finalizes the interim final rule which 
adjusted the level of the maximum civil monetary penalties contained in 
the Bureau of Ocean Energy Management (BOEM) regulations pursuant to 
the Outer Continental Shelf Lands Act (OCSLA), the Oil Pollution Act of 
1990 (OPA), the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (FCPIA of 2015), and Office of Management and 
Budget (OMB) guidance. This rule also implements the 2017 adjustment of 
the level of the maximum civil monetary penalties contained in the BOEM 
regulations pursuant to OCSLA, OPA, FCPIA of 2015 and OMB guidance. The 
2017 adjustment of 1.01636 percent accounts for one year of inflation 
spanning from October 2015 to October 2016.

DATES: This rule is effective on February 15, 2017.

FOR FURTHER INFORMATION CONTACT: Robert Sebastian, Office of Policy, 
Regulation and Analysis, Bureau of Ocean Energy Management, at (202) 
513-0507 or by email at [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background
II. 2016 Adjustments and Interim Final Rule
III. Calculation of 2017 Adjustments
IV. 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)

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 (Pub. L. 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.
    Similarly, the Oil Pollution Act of 1990 (OPA) 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.
    The FCPIA of 2015 requires Federal agencies to promulgate annual 
inflation adjustments for civil monetary penalties. Specifically, 
agencies must adjust the level of civil monetary penalties with an 
initial ``catch-up'' adjustment through an interim final rulemaking 
(IFR) in 2016, and make subsequent annual adjustments for inflation, 
beginning in 2017. Agencies are required to publish the annual 
inflation adjustments in the Federal Register by no later than January 
15, 2017, and by no later than January 15 each subsequent year. The 
purpose of these adjustments is to maintain the deterrent effect of 
civil penalties and to further the policy goals of the underlying 
statutes.
    OMB Memorandum M-17-11 (Implementation of the 2017 annual 
adjustment pursuant to the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015), which can be found at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf, explains agency responsibilities for: Identifying applicable 
penalties and performing the annual adjustment; publishing in the 
Federal Register; finalizing 2016 interim final rules; applying 
adjusted penalty levels; and performing agency oversight of inflation 
adjustments.
    BOEM is promulgating this 2017 inflation adjustment for civil 
penalties as a final rule pursuant to the provisions of the FCPIA of 
2015 and OMB guidance. A proposed rule is not required because the 
FCPIA of 2015 states that agencies shall adjust civil monetary 
penalties ``notwithstanding Section 553 of the Administrative Procedure 
Act.'' (FCPIA of 2015 at sec. 4(b)(2)). Accordingly, Congress expressly 
exempted the annual inflation adjustments implemented pursuant to the 
FCPIA of 2015 from the pre-promulgation notice and comment requirements 
of the Administrative Procedure Act (APA), allowing them to be 
published as a final rule. This interpretation of the statute is 
confirmed by OMB Memorandum M-17-11. (OMB Memorandum M-17-11 at 3 
(``This means that the public procedure the APA generally requires--
notice, an opportunity for comment, and a delay in effective date--is 
not required for agencies to issue regulations implementing the annual 
adjustment.'')).

II. 2016 Adjustments and Interim Final Rule

    BOEM last adjusted the level of civil monetary penalties in BOEM 
regulations through an interim final rule (IFR), RIN 1010-AD95 [81 FR 
43066], which was published on July 1, 2016, and became effective on 
August 1, 2016. The IFR included catch-up adjustments pursuant to the 
requirements of the FCPIA of 2015 and OMB guidance through October 
2015. Although the IFR was effective as of August 1, 2016, the IFR 
included a request for public comments. The public comment period 
closed on August 30, 2016. BOEM received no comments on the IFR and is 
therefore finalizing that rulemaking as originally implemented by the 
IFR. OMB Memorandum M-17-11 authorizes agencies to finalize their 2016 
inflation adjustment IFR in the same rulemaking as the 2017 
adjustments.

III. Calculation of 2017 Adjustments

    Under the FCPIA of 2015 and the guidance provided in OMB Memorandum 
M-17-11, BOEM has identified applicable civil monetary penalties and 
calculated the necessary inflation adjustments. The 2016 adjustments 
were based upon 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. The 2017 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. Consistent with the OMB Memorandum 
M-17-11, BOEM divided the October 2016 CPI-U by the October 2015 CPI-U 
(241.729/237.838). This resulted in a multiplying factor of 1.01636.
    For 2017, OCSLA and the FCPIA of 2015 require that BOEM adjust the 
OCSLA maximum civil penalty amount.

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To accomplish this, BOEM multiplied the existing OCSLA maximum civil 
penalty amount ($42,017) by the multiplying factor ($42,017 x 1.01636 = 
$42,704.40). 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 $42,704.
    For 2017, the FCPIA of 2015 requires that BOEM adjust the OPA 
maximum civil penalty amount. The statutory OPA maximum civil penalty 
amount ($44,539) was multiplied by the multiplying factor (44,539 x 
1.01636 = $45,267.66). 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 $45,268.
    The adjusted penalty levels shall take effect immediately upon the 
effective date of the adjustment. Pursuant to the FCPIA of 2015, the 
increase in the OCSLA and OPA maximum civil penalty amounts apply to 
civil penalties assessed after the date the increase takes effect, even 
if the associated violation(s) predates such increase. Consistent with 
the provisions of the OCSLA, OPA 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 per            $42,017         1.01636         $42,704
                                         day per violation.
30 CFR 553.51(a)......................  Failure to comply per             44,539         1.01636          45,268
                                         day per violation.
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IV. Procedural Requirements

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

    Executive Order (E.O.) 12866 provides that the Office of 
Information and Regulatory Affairs (OIRA) in the Office of Management 
and Budget (OMB) will review all significant rules. OIRA has determined 
that this rule is not significant. (See OMB Memorandum M-17-11 at 3).
    E.O. 13563 reaffirms the principles of E.O. 12866 while calling for 
improvements in the nation's regulatory system to reduce uncertainty 
and to promote predictability and the use of the best, most innovative, 
and least burdensome tools for achieving regulatory ends. E.O. 13563 
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. 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 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 FCPIA of 2015 expressly exempts annual 
inflation adjustments from the requirement to publish a proposed rule 
for notice and comment. (See FCPIA of 2015 at Sec.  4(b)(2); OMB 
Memorandum M-17-11 at 3). 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; and
    (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 E.O. 12630. Therefore, a takings 
implication assessment is not required.

F. Federalism (E.O. 13132)

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

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

    This rule complies with the requirements of E.O. 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 of the Interior's consultation policy, under 
Departmental Manual Part 512, Chapters 4 and 5, and under the criteria 
in E.O. 13175. We have determined that it has no substantial direct 
effects on Federally-recognized Indian tribes or Alaska Native Claims 
Settlement Act (ANCSA) Corporations, and that consultation under the 
Department of the Interior's tribal and ANCSA consultation policies is 
not required.

I. Paperwork Reduction Act

    This rule does not contain information collection requirements, and 
a submission to the 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.

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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)). As a regulation of an administrative nature, this rule 
is covered by a categorical exclusion (see 43 CFR 46.210(i)). 
Therefore, a detailed statement under NEPA is not required. 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 E.O. 13211. Therefore, a Statement of Energy Effects is not 
required.

List of Subjects

30 CFR Part 550

    Administrative practice and procedure, Continental shelf, 
Environmental impact statements, Environmental protection, Federal 
lands, Government contracts, Investigations, Mineral resources, Oil and 
gas exploration, Outer continental shelf, Penalties, Pipelines, 
Reporting and recordkeeping requirements, Rights-of-way, Reporting and 
recordkeeping requirements, Sulphur.

30 CFR Part 553

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

    Dated: February 3, 2017.
Richard T. Cardinale,
Acting Assistant Secretary--Land and Minerals Management.

    For the reasons stated in the preamble, the BOEM adopts as final 
the interim final rule amending 30 CFR parts 550 and 553, which was 
published at 81 FR 43066 on July 1, 2016, as a final rule with the 
following changes:

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

0
1. The authority citation for part 550 continues 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 $42,704 per day per violation.

PART 553--OIL SPILL FINANCIAL RESPONSIBILITY FOR OFFSHORE 
FACILITIES

0
3. The authority citation for part 553 continues 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 $45,268 per 
COF per day of violation (that is, each day a COF is operated without 
acceptable evidence of OSFR).
* * * * *
[FR Doc. 2017-02983 Filed 2-14-17; 8:45 am]
BILLING CODE 4310-MR-P