[Federal Register Volume 62, Number 153 (Friday, August 8, 1997)]
[Rules and Regulations]
[Pages 42667-42669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21032]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 250

RIN 1010-AC11


Outer Continental Shelf Civil Penalties

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Final rule.

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SUMMARY: This rule revises MMS regulations governing the Outer 
Continental Shelf (OCS) Civil Penalty Program. MMS is revising these 
regulations to clarify and simplify assessing and collecting OCS civil 
penalties. In addition, MMS is adjusting the maximum civil penalty per 
day per violation from $20,000 to $25,000 due to inflation.

EFFECTIVE DATE: October 7, 1997.

FOR FURTHER INFORMATION CONTACT:
Greg Gould, Program Coordinator, at (703) 787-1591 or fax (703) 787-
1575.

SUPPLEMENTARY INFORMATION:

Background

    MMS proposed revising the regulations for civil penalties in a 
notice of proposed rulemaking published in the Federal Register (61 FR 
66967) on December 19, 1996. We received one comment during the 90-day 
comment period, which closed on March 19, 1997. This final rule revises 
the regulations at 30 CFR 250.200.
    The Oil Pollution Act of 1990 (OPA 90), (Pub. L. 101-380) expanded 
and strengthened MMS's authority to impose penalties for violating 
regulations promulgated under the OCS Lands Act.
    Section 8201 of OPA 90 authorizes the Secretary of the Interior 
(Secretary) to assess a civil penalty without providing notice and time 
for corrective action where a failure to comply with applicable 
regulations results in a threat of serious, irreparable, or immediate 
harm or damage to human life or the environment.
    The goal of the MMS OCS Civil Penalty Program is to ensure safe and 
clean operations on the OCS. By pursuing, assessing, and collecting 
civil penalties, the program is designed to encourage compliance with 
OCS statutes and regulations.
    Not all regulatory violations warrant a review to initiate civil 
penalty proceedings. However, violations that cause injury, death, or 
environmental damage, or pose a threat to human life or the 
environment, will trigger such review.

Intent of Proposed Rule

    The goal of the proposed rule was to rewrite the regulations at 30 
CFR part 250, subpart N to simplify the language into ``plain 
English.'' The new question-and-answer format provides a better 
understanding of the OCS civil penalty process.
    Besides simplifying the regulations, MMS proposed to increase the 
maximum civil penalty to $25,000 per day per violation. The provisions 
of OPA 90 require the Secretary to adjust at least every 3 years the 
maximum civil penalty to reflect any increases in the Consumer Price 
Index for all-urban consumers (CPI-U) as prepared by the Department of 
Labor.

Comments on the Rule

    One major oil company commented on the rule. The company strongly 
opposed the amount of the increase to the maximum civil penalty. In 
particular, the company believed that rounding to the nearest $5,000 
was inappropriate, and recommended rounding to the nearest $500.

Response to the Comments

    In computing the new civil penalty maximum amount, MMS divided the 
August 1995 CPI-U by the August 1990 CPI-U and multiplied the resulting 
value by the current maximum civil penalty (152.5/131.6=1.159; 
1.159 x 20,000=23,180)
    Section 5(a) of Pub. L. 101-410 provides that ``Any increase 
determined under this subsection shall be rounded to the nearest 
multiple of $5,000 in the case of penalties greater than $10,000 but 
less than or equal to $100,000.'' Therefore, MMS rounded the maximum 
civil penalty from $23,180 to $25,000 based on the formula provided in 
the law. The final rule also includes a few other changes from the 
proposed rule that are not substantive.

Executive Order (E.O.) 12866

    This final rule is significant under E.O. 12866 and has been 
reviewed by the Office of Management and Budget (OMB).

Regulatory Flexibility Act

    The Department of the Interior (DOI) has determined that this final 
rule will not have a significant effect on a substantial number of 
small entities. In general, the entities that engage in offshore 
activities are not considered small because of the technical and 
financial resources and experience necessary to safely conduct such 
activities. DOI also determined that the indirect effects of this final 
rule on small entities that provide support for offshore activities are 
small.

Paperwork Reduction Act

    The final rule does not contain collections of information that 
require approval by OMB under 44 U.S.C. 3501, et seq. The requirements 
in subpart N are exempted as defined in 5 CFR 1320.4(a)(2) and 
1320.4(c).

Taking Implication Assessment

    DOI certifies that this final rule does not represent a 
governmental action capable of interference with constitutionally 
protected property rights. Thus, DOI does not need to prepare a Takings 
Implication Assessment pursuant to E.O. 12630, Governmental Actions and 
Interference with Constitutionally Protected Property Rights.

Unfunded Mandates Reform Act of 1995

    DOI has determined and certifies according to the Unfunded Mandates 
Reform Act, 2 U.S.C. 1502 et seq., that this final rule will not impose 
a cost of $100 million or more in any given year on State, local, and 
tribal governments, or the private sector.

E.O. 12988

    DOI has certified to OMB that the final rule meets the applicable 
reform standards provided in sections 3(a) and 3(b)(2) of E.O. 12988.

National Environmental Policy Act

    DOI determined that this action does not constitute a major Federal 
action significantly affecting the quality of the human environment; 
therefore, an Environmental Impact Statement is not required.

[[Page 42668]]

List of Subjects in 30 CFR Part 250

    Continental shelf, Environmental impact statements, Environmental 
protection, Government contracts, Investigations, Mineral royalties, 
Oil and gas development and production, Oil and gas exploration, Oil 
and gas reserves, Penalties, Pipelines, Public lands--mineral 
resources, Public lands--rights-of-way, Reporting and recordkeeping 
requirements, Sulphur development and production, Sulphur exploration, 
Surety bonds.

    Dated: June 19, 1997.
Sylvia V. Baca,
Acting Assistant Secretary, Land and Minerals Management.

    For the reasons stated in the preamble, Minerals Management Service 
(MMS) amends 30 CFR part 250 as follows:

PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER 
CONTINENTAL SHELF

    1. Authority citation for part 250 continues to read as follows:

    Authority: 43 U.S.C. 1334.

    2. Subpart N is revised to read as follows:

Subpart N--Outer Continental Shelf (OCS) Civil Penalties

Sec.

250.200  How does MMS begin the civil penalty process?
250.201  Index table.
250.202  Definitions.
250.203  What is the maximum civil penalty?
250.204  Which violations will MMS review for potential civil 
penalties?
250.205  When is a case file developed?
250.206  When will MMS notify me and provide penalty information?
250.207  How do I respond to the letter of notification?
250.208  When will I be notified of the Reviewing Officer's 
decision?
250.209  What are my appeal rights?

Subpart N--Outer Continental Shelf (OCS) Civil Penalties


Sec. 250.200  How does MMS begin the civil penalty process?

    This subpart explains MMS's civil penalty procedures whenever a 
lessee, operator or other person engaged in oil, gas, sulphur or other 
minerals operations in the OCS has a violation. Whenever MMS 
determines, on the basis of available evidence, that a violation 
occurred and a civil penalty review is appropriate, it will prepare a 
case file. MMS will appoint a Reviewing Officer.


Sec. 250.201  Index Table.

    The following table is an index of the sections in this subpart:


Sec. 250.201  Table.

------------------------------------------------------------------------
                                                                Section 
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Definitions..................................................    250.202
What is the maximum civil penalty?...........................    250.203
Which violations will MMS review for potential civil                    
 penalties?..................................................    250.204
When is a case file developed?...............................    250.205
When will MMS notify me and provide penalty information?.....    250.206
How do I respond to the letter of notification?..............    250.207
When will I be notified of the Reviewing Officer's decision?.    250.208
What are my appeal rights?...................................    250.209
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Sec. 250.202  Definitions.

    Terms used in this subpart have the following meaning:
    Case file means an MMS document file containing information and the 
record of evidence related to the alleged violation.
    Civil penalty means a fine. It is an MMS regulatory enforcement 
tool used in addition to Notices of Incidents of Noncompliance and 
directed suspensions of production or other operations.
    I, me in a question or you in a response means the person, or agent 
of a person engaged in oil, gas, sulphur, or other minerals operations 
in the Outer Continental Shelf (OCS).
    Person means, in addition to a natural person, an association 
(including partnerships and joint ventures), a State, a political 
subdivision of a State, or a private, public, or municipal corporation.
    Reviewing Officer means an MMS employee assigned to review case 
files and assess civil penalties.
    Violation means failure to comply with the Outer Continental Shelf 
Lands Act (OCSLA) or any other applicable laws, with any regulations 
issued under the OCSLA, or with the terms or provisions of leases, 
licenses, permits, rights-of-way, or other approvals issued under the 
OCSLA.
    Violator means a person responsible for a violation.


Sec. 250.203  What is the maximum civil penalty?

    The maximum civil penalty is $25,000 per day violation.


Sec. 250.204  Which violations will MMS review for potential civil 
penalties?

    MMS will review each of the following violations for potential 
civil penalties:
    (a) Violations that you do not correct within the period MMS 
grants;
    (b) Violations that MMS determines may constitute a threat of 
serious, irreparable, or immediate harm or damage to life (including 
fish and other aquatic life), property, any mineral deposit, or the 
marine, coastal, or human environment; or
    (c) Violations that cause serious, irreparable, or immediate harm 
or damage to life (including fish and other aquatic life), property, 
any mineral deposit, or the marine, coastal, or human environment.


Sec. 250.205  When is a case file developed?

    MMS will develop a case file during its investigation of the 
violation, and forward it to a Reviewing Officer if any of the 
conditions in Sec. 250.204 exist. The Reviewing Officer will review the 
case file and determine if a civil penalty is appropriate. The 
Reviewing Officer may administer oaths and issue subpoenas requiring 
witnesses to attend meetings, submit depositions, or produce evidence.


Sec. 250.206  When will MMS notify me and provide penalty information?

    If the Reviewing Officer determines that a civil penalty should be 
assessed, the Reviewing Officer will send the violator a letter of 
notification. The letter of notification will include:
    (a) The amount of the proposed civil penalty;
    (b) Information on the alleged violation(s); and
    (c) Instruction on how to obtain a copy of the case file, schedule 
a meeting, submit information, or pay the penalty.


Sec. 250.207  How do I respond to the letter of notification?

    You have 30 calendar days after you receive the Reviewing Officer's 
letter to either:
    (a) Request, in writing, a meeting with the Reviewing Officer;
    (b) Submit additional information; or
    (c) Pay the proposed civil penalty.


Sec. 250.208  When will I be notified of the Reviewing Officer's 
decision?

    At the end of the 30 calendar days or after the meeting and 
submittal of additional information, the Reviewing Officer will review 
the case file, including all information you submitted, and send you a 
decision. The decision will include the amount of any final civil 
penalty, the basis for the civil penalty, and instructions for paying 
or appealing the civil penalty.


Sec. 250.209  What are my appeal rights?

    When you receive the Reviewing Officer's decision, you must either 
pay

[[Page 42669]]

 the penalty or file an appeal with MMS under part 290 of this chapter. 
If you do not either pay the penalty or file a timely appeal, MMS will 
take one or more of the following actions:
    (a) MMS will collect the amount you were assessed, plus interest, 
late payment charges, and other fees as provided by law, from the date 
of assessment until the date MMS receives payment;
    (b) MMS may initiate additional enforcement proceedings including, 
if appropriate, cancellation of the lease, right-of-way, license, 
permit, or approval, or the forfeiture of a bond under this part; or
    (c) MMS may bar you from doing further business with the Federal 
Government according to Executive Orders 12549 and 12689, and section 
2455 of the Federal Acquisition Streamlining Act of 1994, 31 U.S.C. 
6101. The Department of the Interior's regulations implementing these 
authorities are found at 43 CFR part 62, subpart D.

[FR Doc. 97-21032 Filed 8-7-97; 8:45 am]
BILLING CODE 4310-MR-M