[Federal Register Volume 85, Number 26 (Friday, February 7, 2020)]
[Rules and Regulations]
[Pages 7218-7221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02059]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

30 CFR Parts 550 and 553

[Docket ID: BOEM-2019-0079]
RIN 1010-AE05


2020 Civil Penalties Inflation Adjustments for Oil, Gas, and 
Sulfur Operations in the Outer Continental Shelf

AGENCY: Bureau of Ocean Energy Management, Interior.

ACTION: Final rule.

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SUMMARY: This final rule implements the 2020 inflation adjustments to 
the maximum daily civil monetary penalties contained in the Bureau of 
Ocean Energy Management (BOEM) regulations for violations of the Outer 
Continental Shelf Lands Act (OCSLA) and the Oil Pollution Act of 1990 
(OPA), pursuant to the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (FCPIA Improvements Act) and relevant Office 
of Management and Budget (OMB) guidance. The 2020 adjustment multiplier 
of 1.01764 accounts for one year of inflation from October 2018 through 
October 2019.

DATES: This rule is effective on February 7, 2020.

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. Legal Authority
II. Background
III. Calculation of 2020 Adjustments
IV. Procedural Requirements
    A. Statutes
    1. National Environmental Policy Act
    2. Regulatory Flexibility Act
    3. Paperwork Reduction Act
    4. Unfunded Mandates Reform Act
    5. Small Business Regulatory Enforcement Fairness Act
    6. Congressional Review Act
    B. Executive Orders (E.O.)
    1. Governmental Actions and Interference With Constitutionally 
Protected Property Rights (E.O. 12630)
    2. Regulatory Planning and Review (E.O. 12866); Improving 
Regulation and Regulatory Review (E.O. 13563); and Reducing 
Regulation and Controlling Regulatory Costs (E.O. 13771)
    3. Civil Justice Reform (E.O. 12988)
    4. Federalism (E.O. 13132)
    5. Consultation and Coordination With Indian Tribal Governments 
(E.O. 13175)
    6. Actions Concerning Regulations That Significantly Affect 
Energy Supply, Distribution, or Use (E.O. 13211)

I. Legal Authority

    OCSLA authorizes the Secretary of the Interior to impose a daily 
civil monetary penalty for a violation of OCSLA or its regulations, 
leases, permits, or orders and directs the Secretary to adjust the 
maximum penalty at least every three years to reflect any inflation 
increase in the Consumer Price Index. 43 U.S.C. 1350(b)(1). Similarly, 
OPA authorizes civil monetary penalties for failure to comply with 
OPA's financial responsibility provisions or its implementing 
regulations. 33 U.S.C. 2716a(a). OPA does not include a maximum daily 
civil penalty inflation adjustment provision. Id.
    The FCPIA Improvements Act \1\ requires that Federal agencies 
publish inflation adjustments to their civil monetary penalties in the 
Federal Register not later than January 15 annually.\2\ Public Law 114-
74, sec. 701(b)(1). The purposes behind these inflation adjustments are 
to maintain the deterrent effect of civil penalties and to further the 
policy goals of the underlying statutes. Federal Civil Penalties 
Inflation Adjustment Act of 1990, Public Law 101-410, sec. 2 (codified 
at 28 U.S.C. 2461 note).
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    \1\ The FCPIA Improvements Act amended the Federal Civil 
Penalties Inflation Adjustment Act of 1990. Public Law 101-410 
(codified at 28 U.S.C. 2461 note).
    \2\ Under the FCPIA Improvements Act, Federal agencies were 
required to adjust their civil monetary penalties for inflation with 
an initial ``catch-up'' adjustment through an interim final 
rulemaking in 2016 and are required to make subsequent inflation 
adjustments not later than January 15 annually, beginning in 2017. 
Public Law 114-74, sec. 701(b)(1).
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II. Background

    BOEM implemented the 2019 inflation adjustment for its civil 
monetary penalties through a final rule published in the Federal 
Register on March 26, 2019, which accounted for

[[Page 7219]]

inflation through October 2018. Oil and Gas and Sulfur Operations in 
the Outer Continental Shelf-Civil Penalties Inflation Adjustments, 84 
FR 11,222 (Mar. 26, 2019).\3\
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    \3\ The delayed publication resulted from a lapse of Federal 
government funding from December 22, 2018, until January 25, 2019. 
84 FR 11,222, 11,222 (Mar. 26, 2019).
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    For 2020, OMB issued guidance that explains agency statutory 
responsibilities for identifying applicable civil monetary 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. Implementation of Penalty Inflation Adjustments 
for 2020, Pursuant to the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015, OMB Memorandum M-20-05, December 16, 2019 
(OMB M-20-05), available at https://www.whitehouse.gov/wp-content/uploads/2019/12/M-20-05.pdf.
    BOEM is implementing the 2020 inflation adjustments to the OCSLA 
and OPA maximum daily civil monetary penalties through this final rule 
pursuant to the FCPIA Improvements Act and OMB M-20-05. A proposed rule 
is unnecessary. The FCPIA Improvements Act expressly exempts annual 
civil penalty inflation adjustments from the Administrative Procedure 
Act's (APA) notice of proposed rulemaking, public comment, and standard 
effective date provisions. FCPIA Improvements Act, Public Law 114-74, 
sec. 701(b)(1)(D); APA, 5 U.S.C. 553.\4\
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    \4\ Specifically, Congress directed that agencies adjust civil 
monetary penalties ``notwithstanding section 553 of title 5, United 
States Code [Administrative Procedure Act (APA)],'' which generally 
requires prior notice of proposed rulemaking, opportunity for public 
comment on proposed rulemaking, and publication of a final rule at 
least 30 days before its effective date. FCPIA Improvements Act, 
sec. 4(b)(2); APA, 5 U.S.C. 553. OMB confirmed this interpretation 
of the FCPIA Improvements Act. OMB M-20-05 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.'').
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III. Calculation of 2020 Adjustments

    OMB issued guidance to Federal agencies on implementing the 2020 
annual civil monetary penalties inflation adjustments, including the 
adjustment multiplier: 1.01764. OMB M-20-05; FCPIA Improvements Act, 
sec. 701(b)(4).\5\ In accordance with the FCPIA Improvements Act and 
OMB M-20-05, BOEM determined that the OCSLA and OPA maximum daily civil 
monetary penalties require annual inflation adjustments and is issuing 
this final rule adjusting those penalty amounts for inflation through 
October 2019.
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    \5\ The annual inflation adjustment is 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 OMB M-20-05, the 2020 
multiplier can be calculated by dividing the October 2019 CPI-U by 
the October 2018 CPI-U. In this case, October 2019 CPI-U (257.346)/
October 2018 CPI-U (252.885) = 1.01764.
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    For 2020, BOEM multiplied the current OCSLA maximum daily civil 
penalty of $44,675 by the multiplier 1.01764 to equal $45,463.07 
rounded to nearest cent ($44,675 x 1.01764 = $45,463.07). The FCPIA 
Improvements Act requires the resulting amount be rounded to the 
nearest dollar. Accordingly, the 2020 adjusted OCSLA maximum daily 
civil penalty is $45,463.
    For 2020, BOEM multiplied the current OPA maximum daily civil 
penalty amount of $47,357 by the multiplier 1.01764 to equal $48,192.38 
rounded to nearest cent ($47,357 x 1.01764 = $48,192.38). The FCPIA 
Improvements Act requires that the resulting amount be rounded to the 
nearest dollar. Accordingly, the 2020 adjusted OPA maximum daily civil 
penalty is $48,192.
    The adjusted penalty amounts take effect immediately upon 
publication of this rule. Under the FCPIA Improvements Act, the 
adjusted amounts apply to civil penalties assessed after the date the 
increase takes effect, even if the associated violation predates the 
increase.
    This table summarizes BOEM's 2020 maximum daily civil monetary 
penalties for each OCSLA and OPA violation:

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                                                                      Current                        Adjusted
             CFR citation                  Description of  the        maximum       Multiplier        maximum
                                                 penalty              penalty                         penalty
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30 CFR 550.1403 (OCSLA)...............  Failure to comply per            $44,675         1.01764         $45,463
                                         day per violation.
30 CFR 553.51(a) (OPA)................  Failure to comply per            $47,357         1.01764          48,192
                                         day per violation.
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IV. Procedural Requirement

A. Statutes

1. 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 (NEPA, 42 U.S.C. 4321 et 
seq.) 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). BOEM also has determined that the rule does not implicate 
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.
2. Regulatory Flexibility Act
    The Regulatory Flexibility Act (RFA, 5 U.S.C. 601 et seq.) 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 Improvements 
Act expressly exempts these annual inflation adjustments from the 
requirement to publish a proposed rule for notice and comment. FCPIA 
Improvements Act, Public Law 114-74, sec. 701(b)(1)(D); OMB M-20-05 at 
4. Thus, the RFA does not apply to this rulemaking.
3. Paperwork Reduction Act
    This rule does not contain information collection requirements, 
and, therefore, a submission to OMB under the Paperwork Reduction Act 
(44 U.S.C. 3501 et seq.) is not required.
4. 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 $164 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.

[[Page 7220]]

5. Small Business Regulatory Enforcement Fairness Act
    This rule is not a major rule under 5 U.S.C. 804(2). 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.
6. Congressional Review Act
    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.) and 
OMB guidance,\6\ the Office of Information and Regulatory Affairs 
(OIRA) designated this rule as not a major rule as defined by that 
act.\7\ Office of Info. & Regulatory Affairs, Office of Mgmt. & Budget, 
Fall 2019 Unified Agenda of Regulatory and Deregulatory Actions, Dep't 
of the Interior, RIN 1010-AE03 (note the RIN for this rule is listed in 
error, the correct RIN is 1010-AE05), available at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201910&RIN=1010-AE03.
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    \6\ Office of Mgmt. & Budget, Exec. Office of the President, OMB 
M-19-14, Guidance on Compliance with the Congressional Review Act 
(2019).
    \7\ 5 U.S.C. 804(2).
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B. Executive Orders (E.O.)

1. Governmental Actions and Interference with Constitutionally 
Protected Property Rights (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.
2. Regulatory Planning and Review (E.O. 12866); Improving Regulation 
and Regulatory Review (E.O. 13563); and Reducing Regulation and 
Controlling Regulatory Costs (E.O. 13771)
    E.O. 12866 provides that OIRA will review all significant rules. 
OIRA has determined that this rule is not significant. See OMB M-20-05 
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. E.O. 13563 further emphasizes 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. 
However, there is no science being used in this rulemaking, as Congress 
directed agencies to adjust the maximum daily civil penalty amounts 
using a particular equation and BOEM does not have discretion to use 
any other factor in the adjustment. BOEM has developed this rule in a 
manner consistent with these requirements, to the extent relevant and 
feasible given the limited discretion provided agencies under the FCPIA 
Improvements Act.
    E.O. 13771 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 this rule is not 
significant. This final rule exclusively implements the annual 
inflation adjustments consistent with OMB's guidance and its 
determination that this rule is not a significant regulatory action. 
OMB M-20-05 at 3. Thus, this rule is not considered an E.O. 13771 
regulatory action. Id.
3. 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.
4. 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. To the extent State and local 
governments have a role in outer continental shelf activities, this 
rule will not affect that role. Therefore, a federalism summary impact 
statement is not required.
5. Consultation and Coordination With Indian Tribal Governments (E.O. 
13175)
    The Department of the Interior and BOEM strive to strengthen their 
government-to-government relationships with Indian tribes through a 
commitment to consultation with Indian tribes and recognition of their 
right to self-governance and tribal sovereignty. BOEM has 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. BOEM has determined that this rule 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 and BOEM's tribal 
and ANCSA consultation policies is not required.
6. Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use (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, 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: January 28, 2020.
Casey Hammond,
Acting Assistant Secretary, Land and Minerals Management.

    For the reasons stated in the preamble, BOEM amends title 30, 
chapter V, subchapter B, parts 550 and 553 of the Code of Federal 
Regulations as follows:

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:

[[Page 7221]]

Sec.  550.1403  What is the maximum civil penalty?

    The maximum civil penalty is $45,463 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. Revise Sec.  553.51(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 $48,192 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. 2020-02059 Filed 2-6-20; 8:45 am]
 BILLING CODE 4310-MR-P