Bonding Requirements When Filing an Appeal of a Bureau of Safety and Environmental Enforcement Civil Penalty

<RULE> DEPARTMENT OF THE INTERIOR <SUBAGY>Bureau of Safety and Environmental Enforcement</SUBAGY> <CFR>30 CFR Parts 250 and 290</CFR> <DEPDOC>[Docket ID: BSEE-2023-0014 EEEE500000 256E1700D2 ET1SF0000.EAQ000]</DEPDOC> <RIN>RIN 1014-AA57</RIN> <SUBJECT>Bonding Requirements When Filing an Appeal of a Bureau of Safety and Environmental Enforcement Civil Penalty</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Safety and Environmental Enforcement, Interior. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This final rule is effective on January 13, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For technical questions, contact Janine Marie Tobias at <E T="03">Janine.Tobias@bsee.gov</E> or (202) 208-4657. For procedural questions, contact Kirk Malstrom at (703) 787-1751 or by email at <E T="03">regs@bsee.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Executive Summary</HD> 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 assessment appeals. BSEE initiated this review following the IBLA's July 7, 2022, order in <E T="03">Petro Ventures, Inc.</E> (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 <E T="03">Petro Ventures, Inc.</E> 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. <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">I. Discussion of Public Comment on the Proposed Rule</FP> <FP SOURCE="FP-2">II. Section-by-Section Summary</FP> <FP SOURCE="FP-2">III. Procedural Matters</FP> </EXTRACT> <HD SOURCE="HD1">I. Discussion of Public Comment on the Proposed Rule</HD> 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. <HD SOURCE="HD1">II. Section-by-Section Summary</HD> <HD SOURCE="HD2">What are my appeal rights? (§ 250.1409)</HD> <HD SOURCE="HD3">Summary of Proposed Rule Revisions</HD> 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. <HD SOURCE="HD3">Summary of Final Rule Revisions</HD> BSEE did not receive any comments on the proposed revisions and includes the proposed revisions in the final rule without change. <HD SOURCE="HD2">How do I file an appeal? (§ 290.4)</HD> <HD SOURCE="HD3">Summary of Proposed Rule Revisions</HD> 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. <HD SOURCE="HD3">Summary of Final Rule Revisions</HD> BSEE did not receive any comments on the proposed revisions and includes the proposed revisions in the final rule without change. <HD SOURCE="HD1">III. Procedural Matters</HD> <HD SOURCE="HD2">Regulatory Flexibility Act (5 U.S.C. 601 et seq.)</HD> 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 significant economic impact on a substantial number of small entities. BSEE estimates that at least 80 entities (lessees, grant holders, and o ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 25k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━