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: 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.

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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

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

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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