[Federal Register Volume 88, Number 31 (Wednesday, February 15, 2023)]
[Rules and Regulations]
[Pages 9749-9752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03217]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

30 CFR Parts 550 and 553

[Docket ID: BOEM-2023-0001]
RIN 1010-AE17


2023 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 2023 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 (Improvements Act) and relevant Office of 
Management and Budget (OMB) guidance. The 2023 adjustment multiplier of 
1.07745 accounts for 1 year of inflation from October 2021 through 
October 2022.

DATES: This rule is effective on February 15, 2023.

FOR FURTHER INFORMATION CONTACT: Questions regarding the inflation 
adjustment methodology or amount should be directed to Martin Heinze, 
Economics Division, BOEM, at [email protected] or at (703) 787-
1010. Questions regarding the timing of this adjustment or the 
applicability of the regulations should be directed to Satrina Lord, 
Office of Regulations, BOEM at [email protected] or at (703) 787-
1250.

SUPPLEMENTARY INFORMATION:

I. Legal Authority
II. Background and Purpose
III. Calculation of the 2023 Adjustments
IV. Statutory and Executive Order Reviews
    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)
    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 (the Secretary) to 
impose a daily civil monetary penalty for a violation of OCSLA or its 
implementing regulations, leases, permits, or orders. It also directs 
the Secretary to adjust the maximum penalty at least every 3 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 
their implementing regulations. 33 U.S.C. 2716a(a). OPA does not 
include a maximum daily civil penalty inflation adjustment provision. 
Id.
    The 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 of 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 Improvements Act amended the Federal Civil Penalties 
Inflation Adjustment Act of 1990. See Public Law 101-410 (codified 
at 28 U.S.C. 2461 note).
    \2\ Under the 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 must 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 and Purpose

    BOEM implemented the 2022 inflation adjustment for its civil 
monetary penalties through a final rule entitled ``2022 Civil Penalties 
Inflation Adjustments for Oil, Gas, and Sulfur Operations in the Outer 
Continental Shelf,'' which was published in the Federal Register. 87 FR 
15333 (March 18, 2022). That rule accounted for inflation for the 12-
month period between October 2020 and October 2021.
    The OMB memorandum M-23-05 \3\ reiterates agency responsibilities 
under

[[Page 9750]]

the Improvements Act. Such responsibilities include identifying 
applicable penalties and performing the annual adjustment; publishing 
revisions to regulations to implement the adjustment in the Federal 
Register; applying adjusted penalty dollar amounts; and performing 
agency oversight of inflation adjustments.
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    \3\ OMB Memorandum M-23-05 ``Implementation of Penalty Inflation 
Adjustments for 2023, Pursuant to the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015'' is available at 
https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf).
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    Pursuant to the Improvements Act, this final rule implements BOEM's 
2023 inflation adjustments to OCSLA and OPA maximum daily civil 
monetary penalties. A proposed rule is unnecessary as the 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. 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. Improvements Act, sec. 
701(b)(1)(D); APA, 5 U.S.C. 553. OMB confirmed this interpretation 
of the Improvements Act. OMB M-23-05 at 3-4 (``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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    On July 22, 2021, BOEM issued a final rule entitled ``Maximum Daily 
Civil Penalty Amounts for Violations of the Federal Oil and Gas Royalty 
Management Act'' (RIN 1010-AE08, 86 FR 38557), which amended those BOEM 
regulations that set maximum daily civil penalty (MDCP) amounts for 
violations of the Federal Oil and Gas Royalty Management Act (FOGRMA). 
BOEM amended its regulations to cross-reference the Office of Natural 
Resources Revenue (ONRR) regulations that also set MDCP amounts for 
FOGRMA violations. This cross-reference ensured consistency between 
BOEM's FOGRMA MDCP amounts and ONRR's FOGRMA MDCP amounts. It also 
ensured consistent compliance with the Improvements Act and related OMB 
guidance while reducing unnecessary duplication of effort and costs to 
BOEM. Because that rule established a permanent cross-reference between 
BOEM's FOGRMA civil penalties amounts and those of ONRR, the BOEM 
FOGRMA civil penalties are not being adjusted with this rulemaking 
(which is now confined to civil penalties unrelated to FOGRMA).

III. Calculation of the 2023 Adjustments

    In accordance with the Improvements Act, BOEM determined that OCSLA 
and OPA maximum daily civil monetary penalties require annual inflation 
adjustments and issues this final rule adjusting those penalty amounts 
for inflation through October 2022. 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-
23-05, the 2023 inflation adjustment multiplier can be calculated by 
dividing the October 2022 CPI-U by the October 2021 CPI-U. In this 
case, October 2022 CPI-U (298.012)/October 2021 CPI-U (276.589) = 
1.07745.
    For 2023, BOEM multiplied the current OCSLA maximum daily civil 
monetary penalty of $48,862 by the multiplier 1.07745 to equal 
$52,646.36. The Improvements Act requires that the resulting amount 
then be rounded to the nearest dollar. Accordingly, the 2023 adjusted 
OCSLA maximum daily civil monetary penalty is $52,646.
    For 2023, BOEM multiplied the current OPA maximum daily civil 
penalty amount of $51,796 by the multiplier 1.07745 to equal 
$55,807.60. The Improvements Act requires that the resulting amount 
then be rounded to the nearest dollar. Accordingly, the 2023 adjusted 
OPA maximum daily civil monetary penalty is $55,808.
    The adjusted penalty amounts take effect immediately upon 
publication of this rule. Under the 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 2023 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            $48,862         1.07745         $52,646
                                         day per violation.
30 CFR 553.51(a) (OPA)................  Failure to comply per             51,796         1.07745          55,808
                                         day per violation.
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IV. Statutory and Executive Order Reviews

A. Statutes

1. National Environmental Policy Act
    This rule does not constitute a major Federal action under the 
National Environmental Policy Act of 1969 (NEPA) because the civil 
penalty adjustments are required by law (see 40 CFR 1508.1(q)(1)(ii)). 
The Improvements Act requires BOEM to annually adjust the amounts of 
its civil penalties to account for inflation as measured by the 
Department of Labor's Consumer Price Index. Accordingly, BOEM has no 
discretion in the execution of the civil penalty adjustments reflected 
in this final rule. Because this rule is not a major Federal action, it 
is therefore not subject to the requirements of NEPA. Even if this were 
a discretionary action subject to NEPA, which it is not, a detailed 
statement under NEPA would not be required because, as a regulation of 
an administrative nature, this rule would be covered by a categorical 
exclusion (see 43 CFR 46.210(i)). Moreover, BOEM determined that the 
rule does not implicate any of the extraordinary circumstances listed 
in 43 CFR 46.215 that would prevent reliance on the categorical 
exclusion. 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. However, 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 
Improvements Act expressly exempts these annual inflation adjustments 
from the requirement to publish a proposed rule for notice and comment. 
Improvements Act, Public Law 114-74, sec. 701(b)(1)(D); OMB M-23-05 at 
3-4.

[[Page 9751]]

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 of 1995
    This rule does not impose an unfunded mandate on State, local, or 
Tribal governments, or on the private sector, of more than $100 million 
per year (adjusted for inflation). The rule does not have a significant 
or unique effect on State, local, or Tribal governments, or on 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.
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,\5\ this rule is not a major rule, as defined by that act. 
5 U.S.C. 804(2).
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    \5\ See Office of Mgmt. & Budget, Exec. Office of the President, 
OMB M-19-14, Guidance on Compliance with the Congressional Review 
Act (2019), available at https://www.whitehouse.gov/wp-content/uploads/2019/04/M-19-14.pdf; OMB Memorandum M-23-05 at 3.
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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)
    E.O. 12866 provides that the Office of Information and Regulatory 
Affairs (OIRA) will review all significant rules. OIRA determined that 
annual civil penalty inflation adjustment rules are not significant if 
they exclusively implement the annual inflation adjustment consistent 
with OMB guidance and have an annual impact of less than $100 million. 
See OMB Memorandum M-23-05 at 3. This rule meets those conditions and, 
thus, is not a significant rule.
    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 for 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, BOEM is using neither science nor public 
participation in this rulemaking. Congress directed agencies to adjust 
the maximum daily civil penalty amounts using a particular equation 
without public participation. BOEM does not have discretion to use any 
other factor in the adjustment. BOEM has developed this rule in a 
manner consistent with the requirements in E.O. 13563 to the extent 
relevant and feasible given the limited discretion provided agencies 
under the Improvements Act.
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. This rule merely adjusts the 
dollar amount of civil monetary penalties that BOEM may impose on its 
lessees and has no effects on any action of State or local governments. 
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 the 
Tribes' right to self-governance and Tribal sovereignty. BOEM evaluated 
this rule under the Department of the Interior's consultation policy, 
Departmental Manual part 512 chapters 4 and 5, and E.O. 13175, and 
determined that this rule has no substantial direct effects on 
federally recognized Indian Tribes or Alaska Native Claims Settlement 
Act Corporations and that consultation under existing Department and 
BOEM 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 of that term found 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.

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

    For the reasons stated in the preamble, BOEM amends 30 CFR parts 
550 and 553 as follows:

[[Page 9752]]

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 $52,646 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 $55,808 per 
COF per day of violation (that is, each day a COF is operated without 
acceptable evidence of OSFR).
* * * * *
[FR Doc. 2023-03217 Filed 2-14-23; 8:45 am]
BILLING CODE 4340-98-P