2024-26504. Bonding Requirements When Filing an Appeal of a Bureau of Safety and Environmental Enforcement Civil Penalty

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Department of the Interior

Bureau of Safety and Environmental Enforcement

1. 30 CFR Parts 250 and 290
2. [Docket ID: BSEE-2023-0014 EEEE500000 256E1700D2 ET1SF0000.EAQ000]
3. RIN 1014-AA57

AGENCY:

Bureau of Safety and Environmental Enforcement, Interior.

ACTION:

Final rule.

SUMMARY:

The Department of the Interior (Interior) is amending regulations administered by the Bureau of Safety and Environmental Enforcement (BSEE) regarding the bonding requirements for entities filing an appeal from a BSEE decision that assesses a civil penalty. The regulations will clarify that entities appealing a BSEE civil penalty decision to the Interior Board of Land Appeals (IBLA) must have a bond covering the civil penalty assessment amount for the IBLA to have jurisdiction over the appeal.

DATES:

This final rule is effective on January 13, 2025.

FOR FURTHER INFORMATION CONTACT:

For technical questions, contact Janine Marie Tobias at [e-mail] or [phone]. For procedural questions, contact Kirk Malstrom at [phone] or by email at [e-mail].

SUPPLEMENTARY INFORMATION:

Executive Summary

Pursuant to the Outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. 1350), BSEE has the delegated authority to assess civil penalties to certain entities engaged in energy exploration, development, and production operations on the Outer Continental Shelf (OCS) following certain violations by those entities of a statutory provision, regulation, order, or lease, license, or permit term. Interior's implementing regulations for this authority are located at 30 CFR part 250, “Subpart N-Outer Continental Shelf Civil Penalties” (§§ 250.1400-250.1409). Additional relevant regulations regarding the procedures for appealing civil penalty assessments are found at 30 CFR part 290, “Subpart A-Bureau of Safety and Environmental Enforcement Appeal Procedures” (§§ 290.1-290.8).

BSEE recently commenced a review of its regulations for civil penalty ( print page 89923) assessment appeals. BSEE initiated this review following the IBLA's July 7, 2022, order in Petro Ventures, Inc. (IBLA No. 2020-48), which analyzed the effect of the civil penalty appeal bonding requirements in 30 CFR 250.1409. This regulation, at paragraph (b), requires that an entity filing an appeal of a civil penalty assessment must either “[s]ubmit a surety bond in the amount of the penalty” or request that “your lease-specific/area-wide bond on file be used as the bond for the penalty amount.” When Interior proposed what is now 30 CFR 250.1409 in 1999, it explained that the civil penalty appeal bonding requirement was “designed to ensure that funds will be available to cover the final civil penalty assessment if the appeal is denied, and to discourage any appeals filed for the sole purpose of delaying payment of that assessment.” 64 FR 1930, 1966 (January 12, 1999). BSEE and its predecessors have consistently intended and understood this bonding requirement to operate as a condition precedent to an entity's right to pursue an appeal. The IBLA, however, concluded in Petro Ventures, Inc. that while 30 CFR 250.1409 requires that the appellant have bonding covering the appealed civil penalty amount, the regulation is not phrased in such a way as to make it a jurisdictional precondition that would require dismissal of the appeal if the bonding requirement is not met.

Accordingly, Interior is revising 30 CFR 250.1409, “What are my appeal rights?,” and 30 CFR 290.4, “How do I file an appeal?”, to effectuate the original intent of the bonding requirement by ensuring that bonding is a jurisdictional precondition for appealing a BSEE civil penalty assessment to the IBLA.

Table of Contents

I. Discussion of Public Comment on the Proposed Rule

II. Section-by-Section Summary

III. Procedural Matters

I. Discussion of Public Comment on the Proposed Rule

BSEE published a proposed rule in late 2023 with revisions to 30 CFR 250.1409 and 30 CFR 290.4. 88 FR 86285 (Dec. 13, 2023). BSEE received one comment on the proposed rule related to Interior's determination under E.O. 13175 that this rule will not have substantial direct effects on Tribal Nations or Alaska Natives, on the relationship between the Federal Government and Tribal Nations or Alaska Natives, or on the distribution of power and responsibilities between the Federal Government and Tribal Nations or Alaska Natives. The commenter stated that “there is no indication you have consulted with Tribal Nations or Alaska Natives in order to come to this conclusion.” Here, BSEE determined that this is an administrative update to current policy with no substantial direct effects on federally recognized Indian Tribes, Alaska Native Claims Settlement Act (“ANCSA”) Corporations, or the Native Hawaiian Community pursuant to the criteria in E.O. 13175, and that this action does not have Tribal implications pursuant to Interior's consultation policies. BSEE evaluated this proposed ruleunder the Department's consultation policy in Departmental Manual part 512 chapters 4 and 5, and under the criteria in E.O. 13175. Accordingly, BSEE did not initiate a consultation process for the proposed rule.

II. Section-by-Section Summary

What are my appeal rights? (§ 250.1409)

Summary of Proposed Rule Revisions

BSEE proposed to change the introductory sentence of § 250.1409(b) from “If you file an appeal, you must either:” to “In order to file an appeal, you must perform one of the following actions within the 60-day appeal period to have your appeal heard:”. BSEE proposed to move existing § 250.1409(d) to a new § 250.1409(e). The proposed § 250.1409(d) states that “the bonding requirement in paragraph (b) of this section is a jurisdictional precondition for a civil penalty appeal.” Together, these revised provisions would effectuate the intended functions of BSEE's bonding requirements for filing and maintaining a civil penalty appeal to the IBLA. BSEE requires bonding coverage for the full civil penalty amount of all civil penalty appeals to ensure that funds will be available to cover the civil penalty amount if the assessment is upheld and to discourage appeals filed for the sole purpose of delaying payment of that assessment.

Lastly, BSEE proposed moving existing § 250.1409(d) to the new § 250.1409(e), and revising § 250.1409(d) by changing the introductory sentence from “If you do not either pay the penalty or file a timely appeal, BSEE will take one or more of the following actions:” to “If you do not either pay the penalty or fully satisfy the appeal requirements, the Department may take one or more of the following actions:”. In paragraph (e)(1), BSEE proposed deleting “We will” and starting the sentence with “Collect.” In paragraph (e)(2), BSEE proposed deleting “We may” and starting the sentence with “Initiate.” In paragraph (e)(3), BSEE proposed deleting “We may” and starting the sentence with “Bar.” BSEE proposed these edits because different entities within Interior may take the listed actions and to improve the grammatical structure of the overall provision.

Summary of Final Rule Revisions

BSEE did not receive any comments on the proposed revisions and includes the proposed revisions in the final rule without change.

How do I file an appeal? (§ 290.4)

Summary of Proposed Rule Revisions

BSEE proposed to add a new paragraph (c) to § 290.4. Existing § 290.4 sets forth the items that BSEE must receive within 60 days after a party receives a decision for an appeal to be considered properly filed. The proposed paragraph (c) adds to that list: “If you are appealing a civil penalty assessment, either notification of payment of the penalty or documentation demonstrating satisfaction of the requirements in 30 CFR 250.1409(b).” As with the other appeal filing requirements in the section, it expressly states that the appellant “cannot extend the 60-day period for satisfying this requirement, except as specifically provided in 30 CFR 250.1409(d).” BSEE proposed these additions to ensure awareness of, and consistency with, the requirements in the proposed § 250.1409; to ensure that appealing entities timely provide BSEE with documentation demonstrating compliance with § 250.1409; and to further emphasize the nature of the bonding requirement as a jurisdictional precondition to maintenance of an appeal.

Summary of Final Rule Revisions

BSEE did not receive any comments on the proposed revisions and includes the proposed revisions in the final rule without change.

III. Procedural Matters

Regulatory Flexibility Act (5 U.S.C. 601 et seq.)

When an agency issues a rulemaking proposal, the Regulatory Flexibility Act (RFA) requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” that will “describe the impact of the proposed rule on small entities.” (5 U.S.C. 603(a)). Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the proposed rulemaking is not expected to have a ( print page 89924) significant economic impact on a substantial number of small entities.

BSEE estimates that at least 80 entities (lessees, grant holders, and operators) are subject to this rule, of which approximately 60 percent are small according to the U.S. Small Business Administration size standards based on each firm's North American Industry Classification System code, number of employees, and annual revenues. Therefore, BSEE has determined that this rule applies to a substantial number of small entities.

However, BSEE has determined that the impact on entities affected by the rule is not significant. The provisions of this regulation only align the language of the regulations with BSEE's longstanding understanding of the effects of the existing requirement. Existing regulations have long required satisfaction of bonding requirements for appeals of civil penalty assessments, and these revisions only clarify the procedural effects of noncompliance with that requirement. They do not add any cost burdens to entities that would be subject to the rule. Accordingly, Interior hereby certifies that this rule will not have a significant economic impact on a substantial number of small entities.

Small Business Regulatory Enforcement Fairness Act/Congressional Review Act (5 U.S.C. 801-808)

This rule does not meet the criteria under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:

(1) Does not have an annual effect on the economy of $100 million or more;

(2) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and

(3) Does 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.

This rule does not generate an annual economic effect of $100 million or more; cause major price increases for consumers, businesses, governments, or geographic regions; or degrade competition, employment, investment, productivity, innovation, or the ability of U.S. businesses to compete against foreign businesses. Its effects are purely administrative, legal, and procedural.

Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501 et seq.)

This rule does not impose an unfunded mandate on State, local, or Tribal governments, or the private sector of more than $189 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act is not required.

Takings Implication Assessment (E.O. 12630)

Under the criteria in E.O. 12630, this rule does not have significant takings implications. The rule is not a governmental action capable of interference with constitutionally protected property rights. 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. 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 and Coordination With Indian Tribal Governments (E.O. 13175)

BSEE strives to strengthen its government-to-government relationships with federally recognized Indian Tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and Tribal sovereignty. We are also respectful of our responsibilities for consultation with ANCSA Corporations. BSEE has reviewed this rule pursuant to the criteria in E.O. 13175, “Consultation and Coordination with Indian Tribal Governments” (dated November 6, 2000), and Interior's policies and procedures for consultation with Indian Tribes and ANCSA Corporations. (512 Departmental Manual 4-7). BSEE is also respectful of our responsibilities for consultation with the Native Hawaiian Community. BSEE follows the Department's Office of Native Hawaiian Relations “Standard Operating Procedure for Consultation with the Native Hawaiian Community.” This Standard Operating Procedure provides that: “Congress has also required Federal agencies to consult before taking actions that have the potential to significantly affect Native Hawaiian resources, rights, or lands by correspondingly charging the Office with fully integrating the policy and practice of meaningful consultation by such Federal agencies.” BSEE has determined that this rule will not have substantial direct effects on federally recognized Indian Tribes, ANCSA Corporations, or the Native Hawaiian Community and will not have substantial direct effects on the relationship between the Federal Government and federally recognized Indian Tribes, ANCSA Corporations, or the Native Hawaiian Community, or on the distribution of power and responsibilities between the Federal Government and federally recognized Indian Tribes, ANCSA Corporations, or the Native Hawaiian Community.

Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.)

This rule does not contain information collection requirements, and a submission to the Office of Management and Budget (OMB) under the Paperwork Reduction Act is not required. We may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number.

National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347)

This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required because, as a regulation of an administrative nature, this rule is covered by a categorical exclusion ( see43 CFR 46.210(i)). BSEE also determined that the rule does not implicate any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA. Therefore, a detailed statement under NEPA is not required.

Effects on the Nation's Energy Supply (E.O. 13211)

This rule is not a significant energy action under the definition in E.O. 13211. This rule is not likely to have a significant adverse effect on the supply, distribution, or use of energy. A Statement of Energy Effects is not required. ( print page 89925)

Regulatory Planning and Review (Executive Orders (E.O.) 12866 and 13563)

E.O. 12866, “Regulatory Planning and Review,” as amended by E.O. 14094, provides that OMB's Office of Information and Regulatory Affairs (OIRA) will review all significant regulatory actions. A significant regulatory action is one that is likely to result in a rule that:

A. Has an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of OIRA for changes in gross domestic product); or adversely affects in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or Tribal governments or communities;

B. Creates a serious inconsistency or otherwise interferes with an action taken or planned by another agency;

C. Materially alters the budgetary impacts of entitlements, grants, user fees, loan programs, or the rights and obligations of recipients thereof; or

D. Raises legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in E.O. 12866.

OIRA has concluded that this rule is not a significant action under E.O. 12866. The provisions of the final rule will align the language of the regulations with BSEE's and the regulated industry's longstanding understanding of the effects of the existing requirements and will not add any cost burdens to entities that would be subject to the rule, yielding only procedural effects. Accordingly, BSEE does not anticipate that this rule will have an annual economic impact of $200 million or more or have a material adverse effect on the economy, a sector of the economy, productivity, competition, jobs, public health or safety, the environment, or State, local, or Tribal governments or communities. This rule also will not raise novel legal or policy issues.

E.O. 13563, “Improving Regulation and Regulatory Review,” 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. We have developed this rule in a manner consistent with these requirements.

Effects on Environmental Justice for Minority and Low-Income Populations (E.O. 12898)

E.O. 12898 requires Federal agencies to make achieving environmental justice part of their mission by identifying and addressing disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority and low-income populations. BSEE has determined that this rule will not have a disproportionately high or adverse human health or environmental effect on native, minority, or low-income communities because its provisions are administrative and procedural in nature and does not affect public safety, environmental protection, or OCS operational requirements.

List of Subjects

30 CFR Part 250

• Administrative practice and procedure
• Continental shelf
• Environmental impact statements
• Environmental protection
• Government contracts
• Investigations
• Mineral resources
• Oil and gas exploration
• Penalties
• Pipelines
• Continental Shelf—mineral resources
• Continental Shelf—rights-of-way
• Reporting and recordkeeping requirements
• Sulfur

30 CFR Part 290

• Administrative practice and procedure

This action by the Principal Deputy Assistant Secretary is taken herein pursuant to an existing delegation of authority.

Steven H. Feldgus,

Principal Deputy Assistant Secretary, Land and Minerals Management.

For the reasons stated in the preamble, the Department of the Interior amends 30 CFR parts 250 and 290 as follows:

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

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

Authority: 30 U.S.C. 1751, 31 U.S.C. 9701, 33 U.S.C. 1321(j)(1)(C), 43 U.S.C. 1334.

Subpart N—Outer Continental Shelf Civil Penalties

2. Amend § 250.1409 by revising paragraphs (b) and (d) and adding paragraph (e) to read as follows:

§ 250.1409

What are my appeal rights?

* * * * *

(b) In order to file an appeal, you must perform one of the following actions within the 60-day appeal period to have your appeal heard:

* * * * *

(d) Satisfying the bonding requirement in paragraph (b) of this section is a jurisdictional precondition for a civil penalty appeal. If you have timely filed a request with BOEM pursuant to paragraph (b)(2) of this section to use your lease-specific/area-wide bond on file as the bond for the penalty amount, the IBLA's jurisdiction over the appeal is preserved while BOEM's decision on your request is pending. Should BOEM deny your request or require additional security pursuant to paragraph (c) of this section, you have 30 days to satisfy paragraph (b)(1) of this section or post the required additional security, as applicable, and jurisdiction is preserved during that 30-day period. If you fail to satisfy these bonding requirements, the IBLA will lose jurisdiction and must dismiss your appeal.

(e) If you do not either pay the penalty or fully satisfy the appeal requirements, the Department may take one or more of the following actions:

(1) Collect the amount you were assessed, plus interest, late payment charges, and other fees as provided by law, from the date you received the Reviewing Officer's final decision until the date we receive payment;

(2) Initiate additional enforcement, including, if appropriate, cancellation of the lease, right-of-way, license, permit, or approval, or the forfeiture of a bond under this part; or

(3) 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 12, subpart D.

PART 290—APPEAL PROCEDURES

3. The authority citation for part 290 continues to read as follows:

Authority: 5 U.S.C. 305; 43 U.S.C. 1334.

( print page 89926)

Subpart A—Bureau of Safety and Environmental Enforcement Appeal Procedures

4. Amend § 290.4 by:

a. Removing the word “and” at the end of paragraph (a);

b. In paragraph (b) introductory text, removing “.” and adding in its place “; and”; and

c. Adding paragraph (c).

The addition reads as follows:

§ 290.4

How do I file an appeal?

* * * * *

(c) If you are appealing a civil penalty assessment, either notification of payment of the penalty or documentation demonstrating satisfaction of the requirements in 30 CFR 250.1409(b). You cannot extend the 60-day period for satisfying this requirement, except as specifically provided in 30 CFR 250.1409(d).