Outer Continental Shelf Civil Penalties

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: Notice of proposed rulemaking.

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SUMMARY: This notice of proposed rulemaking (NPR) would revise MMS

regulations governing the Outer Continental Shelf (OCS) Civil Penalty

Program. MMS is amending 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.

DATES: MMS will consider all comments received by March 19, 1997. Any

comments received after March 19, 1997 may not be fully considered.

ADDRESSES: Mail or hand-carry comments to the Department of the

Interior; Minerals Management Service; Mail Stop 4700; 381 Elden

Street; Herndon, Virginia 20170-4817; Attention: Chief, Engineering and

Standards Branch.

FOR FURTHER INFORMATION CONTACT: Greg Gould, Program Coordinator,

telephone (703) 787-1591 or fax (703) 787-1575.

SUPPLEMENTARY INFORMATION: The Oil Pollution Act of 1990 (OPA 90),

(Pub.L. 101-380) expanded and strengthened MMS's authority to impose

penalties for violating its regulations.

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. Examples of such violations

include:

Unsafe and unworkmanlike operations involving injury to

humans or pollution.

Safety devices; e.g., surface and subsurface safety

valves, emergency shut-down systems, etc. that are:

(a) Bypassed or removed without (1) a valid reason, (2) prior

approval, or (3) lockout-tagout, flagging or monitoring, or

(b) Inoperable (i.e., failures) but are left in service without

repair.

The provisions of OPA 90, amending the regulations at 30 CFR part

250, Subpart N, were published as a notice of final rulemaking the

Federal Register on May 13, 1991. As of February 1996, MMS had

Initiated 87 compliance reviews that resulted in 78 civil

penalty cases,

Assessed 41 civil penalties, and

Collected over $346,292 in fines.

Fourteen cases were dismissed, and 23 are still in review.

Over the past several years, MMS has had internal reviews of the

OCS Civil Penalty Program. These reviews resulted in a rewrite of the

regulations at 30 CFR part 250, Subpart N to simplify the language into

``plain English.'' The new question-and-answer format should provide a

better understanding of the OCS civil penalty process.

Besides simplifying the regulations, MMS is proposing 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.

In accord with Public Law 101-410, MMS divided the August 1995 CPI-

U by the August 1990 CPI-U. The resulting value was multiplied by the

current maximum civil penalty, rounding the new value to the nearest

$5,000 (152.5/131.6=1.159; 1.159x20,000=23,180) we rounded $23,180 to

$25,000.

Author: Greg Gould, Inspection and Enforcement Branch, MMS, prepared

this document.

Executive Order (E.O.) 12866

This 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) determined that this NPR 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 due to the technical and financial resources

and experience necessary to safely conduct such activities. The DOI

also determined that the indirect effects of this NPR on small entities

that provide support for offshore activities are small.

Paperwork Reduction Act

The NPR does not contain collections of information that require

approval by OMB under 44 U.S.C. 3501 et seq.

Takings Implication Assessment

The DOI determined that this NPR 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, Government Action and Interference

with Constitutionally Protected Property Rights.

Unfunded Mandate Reform Act of 1995

This NPR does not contain any unfunded mandates to State, local, or

tribal governments or the private sector.

E.O. 12988

The DOI has certified to OMB that the rule meets the applicable

reform standards provided in Sections 3(a) and 3(b)(2) of Executive

Order 12988.

National Environmental Policy Act

The 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.

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: October 2, 1996.

Sylvia V. Baca,

Assistant Secretary, Land and Minerals Management.

For the reasons in the preamble, Minerals Management Service (MMS)

proposes to amend 30 CFR part 250 as follows:

[[Page 66967]]

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 Initiation of 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 Initiation of civil penalty process.

Whenever MMS determines, on the basis of available evidence, that a

violation may have occurred, 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:

Table Sec. 250.201

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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

May I request a meeting with the MMS Reviewing Officer?....... 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 is 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 is a person who fails to comply with the OCSLA or any

other applicable laws, with any regulations, or the terms or provisions

of leases or rights-of-way, licenses, permits, or other approvals

issued under the OCSLA.

Sec. 250.203 What is the maximum civil penalty?

The maximum civil penalty is $25,000 per day per 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 don't 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 an MMS 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 MMS 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) Instructions on how to obtain a copy of the case file.

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

(a) You have 30 calendar days after you receive the Reviewing

Officer's letter to either:

(1) Request, in writing, a meeting the MMS Reviewing Officer;

(2) Submit additional information; or

(3) Pay the proposed civil penalty.

(b) The Reviewing Officer's letter will include instructions for

scheduling a meeting, submitting information, or paying the penalty.

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

decision?

At the end of the 30-day response period, the MMS 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 and the basis for the civil penalty. Instructions for

paying the civil penalty will be included in the decision.

Sec. 250.209 What are my appeal rights?

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

pay 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 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.

(c) MMS may bar you from doing further business with the Federal

Government.

[FR Doc. 96-31797 Filed 12-18-96; 8:45 am]

BILLING CODE 4310-MR-M