[Federal Register Volume 83, Number 42 (Friday, March 2, 2018)]
[Rules and Regulations]
[Pages 8930-8933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-04248]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

30 CFR Parts 550 and 553

[Docket ID: BOEM-2017-0079; MMAA104000]
RIN 1010-AD99


Oil and Gas and Sulfur 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 final rule implements the 2018 adjustment of 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

[[Page 8931]]

Penalties Inflation Adjustment Act Improvements Act of 2015 (FCPIA of 
2015), and the Office of Management and Budget (OMB) guidance. The 2018 
adjustment multiplier of 1.02041 accounts for one year of inflation 
spanning the period from October 2016 through October 2017.

DATES: This rule is effective on March 2, 2018.

FOR FURTHER INFORMATION CONTACT: Deanna Meyer-Pietruszka, Chief, Office 
of Policy, Regulation and Analysis, Bureau of Ocean Energy Management, 
at (202) 208-6352 or by email at [email protected].

SUPPLEMENTARY INFORMATION: 
I. Background and Legal Authority
II. Calculation of 2018 Adjustments
III. Procedural Requirements
    A. Regulatory Planning and Review (E.O. 12866, 13563, and 13771)
    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 and Legal Authority

    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) requires 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 requires that all civil monetary penalties, including 
the OPA maximum civil penalty amount, be adjusted for inflation at 
least once every four years.
    The FCPIA of 2015 requires Federal agencies to promulgate annual 
inflation adjustments for civil monetary penalties. Specifically, 
agencies are required to adjust the level of civil monetary penalties 
with an initial ``catch-up'' adjustment through an interim final 
rulemaking (IFR) in 2016, and must make subsequent annual adjustments 
for inflation, beginning in 2017. Agencies were required to publish the 
first annual inflation adjustments in the Federal Register by no later 
than January 15, 2017, and must publish recurring annual inflation 
adjustments 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.
    BOEM last adjusted the levels of civil monetary penalties in BOEM 
regulations through a final rule, RIN 1010-AD95 [82 FR 10709], which 
was published on February 15, 2017.
    The OMB Memorandum M-18-03, issued December 15, 2017, 
(Implementation of Penalty Inflation Adjustments for 2018, Pursuant to 
the Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015; https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf) explains agency statutory responsibilities for: Identifying 
applicable penalties and performing the annual adjustment; publishing 
revisions to regulations to implement the adjustment in the Federal 
Register; applying adjusted penalty levels; and performing agency 
oversight of inflation adjustments.
    BOEM is promulgating this 2018 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-18-03. (OMB Memorandum M-18-03 at 4 
(``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. Calculation of 2018 Adjustments

    Under the FCPIA of 2015 and the guidance provided in OMB Memorandum 
M-18-03, BOEM has identified applicable civil monetary penalties and 
calculated the necessary inflation adjustments. The previous civil 
penalty inflation adjustments accounted for inflation through October 
2016. The required annual civil penalty inflation adjustment 
promulgated through this rule accounts for inflation through October 
2017.
    Annual inflation adjustments are based on the percent change 
between the Consumer Price Index for all Urban Consumers (CPI-U) for 
the October preceding the date of the adjustment, and the prior year's 
October CPI-U. Consistent with the guidance in OMB Memorandum M-18-03, 
BOEM divided the October 2017 CPI-U by the October 2016 CPI-U to 
calculate the multiplying factor. In this case, October 2017 CPI-U 
(246.663)/October 2016 CPI-U (241.729) = 1.02041. OMB Memorandum M-18-
03 confirms that this is the proper multiplier. (See OMB Memorandum M-
18-03 at 1 and n.4).
    For 2018, OCSLA and the FCPIA of 2015 require that BOEM adjust the 
OCSLA maximum civil penalty amount. To accomplish this, BOEM multiplied 
the existing OCSLA maximum civil penalty amount ($42,704) by the 
multiplying factor ($42,704 x 1.02041 = $43,575.59). The FCPIA of 2015 
requires that the resulting amount be rounded to the nearest $1.00 at 
the end of the calculation process. Accordingly, the adjusted OCSLA 
maximum civil penalty is $43,576.
    For 2018, the FCPIA of 2015 requires that BOEM adjust the OPA 
maximum civil penalty amount. To accomplish this, BOEM multiplied the 
current OPA maximum civil penalty amount ($45,268) by the multiplying 
factor (45,268 x 1.02041 = $46,191.92). The FCPIA of 2015 requires that 
the resulting amount be rounded to the nearest $1.00 at the end of the 
calculation process. Accordingly, the adjusted OPA maximum civil 
penalty is $46,192.
    The adjusted penalty levels will take effect immediately upon 
publication of this rule. Pursuant to the FCPIA of 2015, the increases 
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 OCSLA, OPA, and the FCPIA of 2015, this rule adjusts the 
following maximum civil monetary penalties per day per violation:

[[Page 8932]]



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                                                                      Current                        Adjusted
              CFR Citation                  Description of the        maximum       Multiplier        maximum
                                                 penalty              penalty                         penalty
----------------------------------------------------------------------------------------------------------------
30 CFR 550.1403........................  Failure to comply per           $42,704         1.02041         $43,576
                                          day per violation.
30 CFR 553.51(a).......................  Failure to comply per            45,268         1.02041          46,192
                                          day per violation.
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III. Procedural Requirements

A. Regulatory Planning and Review (E.O. 12866, 13563, and 13771)

    Executive Order (E.O.) 12866 provides that the Office of 
Information and Regulatory Affairs (OIRA) in the OMB will review all 
significant rules. OIRA has determined that this rule is not 
significant. (See OMB Memorandum M-18-03 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, to the extent relevant and feasible given the 
limited discretion provided agencies in FCPIA.
    E.O. 13771 of January 30, 2017 directs Federal agencies to reduce 
the regulatory burden on regulated entities and control regulatory 
costs. E.O. 13771, however, applies only to significant regulatory 
actions, as defined in Section 3(f) of E.O. 12866. OIRA has determined 
that agency regulations exclusively implementing the annual adjustment 
are not significant regulatory actions under E.O. 12866, provided they 
are consistent with OMB Memorandum M-18-03 (See OMB Memorandum M-18-03 
at 3); thus, E.O. 13771 does not apply to this rulemaking.

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 these 
annual inflation adjustments from the requirement to publish a proposed 
rule for notice and comment. (See FCPIA of 2015 at section 4(b)(2); OMB 
Memorandum M-18-03 at 4). 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. Therefore, 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.

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, as a regulation of an administrative nature, this 
rule is covered by a categorical exclusion (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. Therefore, a detailed statement under NEPA 
is not required.

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

    This rule is not a significant energy action under the definition 
in E.O.

[[Page 8933]]

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, Sulfur.

30 CFR Part 553

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

    Dated: February 12, 2018.
Joseph R. Balash,
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 SULFUR 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 $43,576 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 $46,192 per 
COF per day of violation (that is, each day a COF is operated without 
acceptable evidence of OSFR).
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[FR Doc. 2018-04248 Filed 3-1-18; 8:45 am]
 BILLING CODE 4310-MR-P