[Federal Register Volume 86, Number 138 (Thursday, July 22, 2021)]
[Rules and Regulations]
[Pages 38557-38560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15388]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

30 CFR Part 550

[Docket No.: BOEM 2021-0028]
RIN 1010-AE08


Maximum Daily Civil Penalty Amounts for Violations of the Federal 
Oil and Gas Royalty Management Act

AGENCY: Bureau of Ocean Energy Management, Interior.

ACTION: Final rule.

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SUMMARY: This final rule amends the Bureau of Ocean Energy Management 
(BOEM) regulations that set maximum daily civil penalty (MDCP) amounts 
for violations of the Federal Oil and Gas Royalty Management Act 
(FOGRMA). The amended BOEM regulations will cross-reference regulations 
of the Office of Natural Resources Revenue (ONRR) that also set MDCP 
amounts for FOGRMA violations. This cross-reference will ensure 
consistency between BOEM's FOGRMA MDCP amounts and ONRR's FOGRMA MDCP 
amounts. It will also ensure consistent compliance with the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 
(Inflation Adjustment Act) and related Office of Management and Budget 
(OMB) guidance, while reducing unnecessary duplication of effort and 
costs to BOEM.

DATES: This rule is effective on July 22, 2021.

FOR FURTHER INFORMATION CONTACT: Deanna Meyer-Pietruszka, Bureau of 
Ocean Energy Management, Chief, Office of Policy, Regulation and 
Analysis, at [email protected] or by mail to 1849 C 
Street NW, Mail Stop 5238, Washington, DC 20240 or by calling (202) 
208-6352.

SUPPLEMENTARY INFORMATION:

Background and Legal Authority

    The Inflation Adjustment Act, Public Law 114-74, sec. 701 (codified 
at 28 U.S.C. 2461 note), became law on November 2, 2015. It required 
Federal agencies to adjust the level of civil monetary penalties 
imposed under each agency's regulations with an initial ``catch-up'' 
adjustment through rulemaking, if warranted, and then to make 
subsequent annual adjustments for inflation. Agencies were required to 
publish the initial annual inflation adjustments in the Federal 
Register no later than January 15, 2017, and are required to publish 
annual adjustments no later than January 15th of each subsequent year. 
The purpose of these inflation adjustments is to maintain the deterrent 
effect of civil penalties and to further the policy goals of the 
underlying statutes that authorize the penalties.
    BOEM has authority to impose civil penalties for violations of 
FOGRMA under 30 U.S.C. 1719 and delegations of authority by the 
Secretary of the Interior. BOEM's regulations implementing its 
authority to impose penalties under FOGRMA are found at 30 CFR 
550.1450-.1477. Specifically, BOEM may impose civil penalties under 
FOGRMA--after providing notice of noncompliance (NONC) and an 
opportunity to correct the violation--for noncompliance with any 
applicable statute, regulation, order, or lease term relating to any 
Federal oil or gas lease. See 30 CFR 550.1451. BOEM may also impose 
penalties under FOGRMA, without providing prior notice or an 
opportunity to correct the violation, for the knowing or willful 
preparation, maintenance, or submission of false, inaccurate, or 
misleading written information. See id. at 550.1460.
    Sections 550.1453 and 550.1460 of BOEM's existing regulations 
specify the MDCP amounts, as prescribed by

[[Page 38558]]

section 109 of FOGRMA (30 U.S.C. 1719).\1\ As required by the Inflation 
Adjustment Act, however, BOEM's FOGRMA civil penalty amounts must be 
adjusted annually for inflation.
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    \1\ Under existing Sec. Sec.  550.1451 and .1453(a), BOEM may 
initially impose civil penalties of up to $500 per day for each 
violation of a statute, regulation, order, or lease term for any 
Federal oil and gas lease that is not corrected within 20 days of 
receipt of a NONC identifying the violation. Under existing Sec.  
550.1453(b), BOEM may increase the MDCP amount up to $5,000 per day 
for each violation not corrected within 40 days of the NONC. In 
addition, under existing Sec.  550.1460(b), BOEM may impose civil 
penalties, without prior notice, of up to $25,000 per day per 
violation for the knowing or willful preparation, maintenance, or 
submission of false, inaccurate, or misleading written information.
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    Within the Department of the Interior (the Department), ONRR is the 
agency responsible for collecting revenue from energy leases and 
auditing royalty payments under FOGRMA. Like BOEM, ONRR has authority 
to impose civil penalties for certain violations of FOGRMA. ONRR's 
civil penalty regulations are found in 30 CFR part 1241. As required by 
the Inflation Adjustment Act, ONRR also must annually adjust its 
regulatory MDCP amounts for inflation. ONRR published such a final rule 
for calendar year 2017 on April 24, 2017. See 82 FR 18858. Each year 
since, ONRR has calculated and adjusted the MDCP amounts in 30 CFR part 
1241 in accordance with the Inflation Adjustment Act. On February 2, 
2021, ONRR published the final rule adjusting the MDCP amounts in 30 
CFR part 1241 for calendar year 2021. See 86 FR 7808.\2\
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    \2\ Specifically, in relevant part, ONRR amended 30 CFR 
1241.52(a)(2) to authorize civil penalties of up to $1,288 per day 
for each violation of a statute, regulation, order, or lease term 
that is not corrected within 20 days of receipt of a NONC 
identifying the violation. See 86 FR 7808, 7810. Under the amended 
30 CFR 1241.52(b), ONRR may impose civil penalties of up to $12,891 
per day for each violation that is not corrected within 40 days of 
receipt of the NONC. Finally, ONNR amended 30 CFR 1241.60(b)(2) to 
authorize imposition of penalties, without prior notice, of up to 
$64,452 per day per violation for knowing or willful preparation, 
maintenance, or submission of false, inaccurate, or misleading 
written information. Id.
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    Because FOGRMA sets the MDCP amounts for penalties assessed by BOEM 
and ONRR for violations of FOGRMA and because the Inflation Adjustment 
Act uniformly applies to require adjustments to the civil penalties 
that may be assessed by both agencies as calculated from the same base 
year, BOEM's FOGRMA MDCP amounts must be the same as ONRR's FOGRMA MDCP 
amounts.

Changes Made to Existing BOEM Regulations

    Through this rule, BOEM amends Sec. Sec.  550.1453 and 550.1460 of 
its FOGRMA civil penalty regulations in order to cross-reference to 
ONRR's civil penalty regulations in 30 CFR part 1241. By cross-
referencing to ONRR's regulations, BOEM's MDCP amounts for FOGRMA 
violations will be the same as ONRR's MDCP amounts, ensuring ongoing 
consistency within the Department as ONRR adjusts the FOGRMA MDCP 
amounts annually for inflation. In addition, this rule will avoid the 
duplication of effort and unnecessary expenditures within the 
Department that would occur if both BOEM and ONRR were to develop and 
publish separate final rules every year adjusting their corresponding 
FOGRMA MDCP amounts.

Administrative Procedure Act Requirements

    Section 701(b)(1)(D) of the Inflation Adjustment Act states that 
agencies must adjust civil monetary penalties ``notwithstanding section 
553 of title 5, United States Code [the Administrative Procedure Act 
(APA)].'' OMB interprets that provision to mean the APA's public 
procedures of notice and comment rulemaking are not required to 
implement annual civil monetary penalty inflation adjustments. OMB 
Memorandum M-21-10, December 23, 2020 (M-21-10), p. 3. In this manner, 
Congress exempted the annual inflation adjustments under the Inflation 
Adjustment Act from the APA notice and comment requirements (5 U.S.C. 
553(b)), allowing agencies to publish annual inflation adjustments as 
final rules without prior proposed rules.
    In addition, the APA provides a good cause exemption from notice 
and comment rulemaking when an agency finds that prior notice and 
public procedure are impracticable, unnecessary, or contrary to the 
public interest. 5 U.S.C. 553(b)(B). BOEM finds that it is unnecessary 
to issue a proposed rule prior to this final rule because the Inflation 
Adjustment Act does not provide discretion to BOEM--the act specifies 
the adjustments to be made, the methodology to be employed, and the 
index for inflation to be utilized. BOEM cannot choose to take a 
different course in response to public comments.
    The APA also exempts ``rules of agency, organization, procedure, or 
practice'' from notice and comment rulemaking. 5 U.S.C. 553(b)(A). 
BOEM's decision to address the civil penalty inflation adjustment 
required under the Inflation Adjustment Act by cross-referencing to 
ONRR's regulations, which are subject to the same inflation adjustment 
standards under the Inflation Adjustment Act, rather than annually 
amending the FOGRMA penalties in each affected BOEM regulation, is an 
exercise of procedural rulemaking, which primarily concerns BOEM's 
internal operations. Here, BOEM is organizing its internal procedures 
to meet its own legal duties. Moreover, while prior notice and comment 
is required for rules that affect rights or duties of the public, 
BOEM's reliance on cross-referencing does not affect the rights of any 
regulated parties because the civil penalty amounts will be the same 
regardless of whether those amounts are cross-referenced to ONRR's 
regulations or calculated and published separately by BOEM. ONRR must 
calculate and adjust the MDCP amounts in 30 CFR part 1241 annually in 
accordance with the Inflation Adjustment Act and related OMB guidance, 
just as BOEM must do.

Procedural Requirements

Regulatory Planning and Review (Executive Orders 12866 and 13563)

    Executive Order (E.O.) 12866 provides that the OMB Office of 
Information and Regulatory Affairs (OIRA) will review all significant 
rules. Consistent with OIRA criteria, this rule is not significant. OMB 
M-21-10 at 3.
    E.O. 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. 
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. BOEM has developed this rule in a manner consistent 
with these requirements, to the extent permitted by statute.

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)). For the reasons discussed in part III of 
this rule, BOEM is not

[[Page 38559]]

required to publish a proposed rule prior to this final rule. Thus, the 
RFA does not apply to this rulemaking.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under the Small Business Regulatory 
Enforcement Fairness Act (as codified at 5 U.S.C. 804(2)) because this 
rule will not:
    (1) Have an annual effect on the economy of $100 million or more;
    (2) Cause a major increase in costs or prices for consumers, 
individual industries, Federal, State, or local government agencies, or 
geographic regions; or
    (3) Have significant adverse effects on competition, employment, 
investment, productivity, innovation, or the ability of U.S.-based 
enterprises to compete with foreign-based enterprises.

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.

Takings (E.O. 12630)

    This rule does not affect a taking of private property or otherwise 
have takings implications under E.O. 12630. Therefore, a takings 
implication assessment is not required.

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. This rule will not substantially 
and directly affect the relationship between the Federal and State 
governments. To the extent that 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.

Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:
    (1) 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
    (2) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

Consultation With Indian Tribes (E.O. 13175 and Departmental Policy)

    The Department strives to strengthen its government-to-government 
relationship with American Indian and Alaska Native Tribes through a 
commitment to consultation with the tribes and recognition of their 
right to self-governance and tribal sovereignty. The Department also is 
respectful of its responsibilities for consultation with Alaska Native 
Claims Settlement Act (ANCSA) Corporations. BOEM evaluated this rule 
under the Department's consultation policy, under Departmental Manual 
part 512 chapters 4 and 5, and under the criteria in E.O. 13175. BOEM 
determined that this rule has no substantial direct effects on 
Federally recognized Indian tribes or ANCSA Corporations and that 
consultation under the Department's tribal and ANCSA consultation 
policies is not required.

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.

National Environmental Policy Act

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed analysis 
under the National Environmental Policy Act of 1969 (NEPA) is not 
required if the rule is covered by a categorical exclusion (see 43 CFR 
46.205). This rule meets the criteria set forth at 43 CFR 46.210(i) for 
a Departmental categorical exclusion in that this rule is ``of an 
administrative, financial, legal, technical, or procedural nature . . . 
.'' BOEM 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.

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 in 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, Rights-
of-way, Reporting and recordkeeping requirements, Sulfur.

Laura Daniel-Davis,
Principal Deputy Assistant Secretary, Land and Minerals Management.

    For the reasons given in the preamble, the Bureau of Ocean Energy 
Management hereby amends 30 CFR part 550 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.

Subpart N--Outer Continental Shelf Civil Penalties

0
2. Revise Sec.  550.1453 to read as follows:


Sec.  550.1453   What if I do not correct the violation?

    (a) We may send you a Notice of Civil Penalty if you do not correct 
all of the violations identified in the Notice of Noncompliance within 
20 days after you receive the Notice of Noncompliance (or within a 
longer time period specified in that Notice). The Notice of Civil 
Penalty will tell you how much penalty you must pay for each day, 
beginning with the date of the Notice of Noncompliance, for each 
violation identified in the Notice of Noncompliance for as long as you 
do not correct the violation. The maximum civil penalty amount for each 
day for each uncorrected violation is as specified in 30 CFR 
1241.52(a)(2).
    (b) If you do not correct all of the violations identified in the 
Notice of Noncompliance within 40 days after you receive the Notice of 
Noncompliance (or 20 days following the expiration of a longer time 
period specified in that Notice), we may increase the penalty for each 
day, beginning with the date of the Notice of Noncompliance, for each 
violation for as long as you do not correct the violation. The maximum 
civil penalty amount for each day for each uncorrected violation is as 
specified in 30 CFR 1241.52(b).

0
3. Amend Sec.  550.1460 by revising paragraph (b) to read as follows:


Sec.  550.1460   May I be subject to penalties without prior notice and 
an opportunity to correct?

* * * * *
    (b) Under 30 U.S.C. 1719(d), you may be subject to civil penalties 
up to the maximum amount specified in 30 CFR

[[Page 38560]]

1241.60(b)(2) for each violation for each day that it continues if you:
    (1) Knowingly or willfully prepare, maintain, or submit false, 
inaccurate, or misleading reports, notices, affidavits, records, data, 
or other written information.
    (2) [Reserved]

[FR Doc. 2021-15388 Filed 7-21-21; 8:45 am]
BILLING CODE 4310-MR-P