1. (1) General. Any person who violated Title 40, Chapter 11, Geologic Carbon Storage, a division rule, board order, or permit may be subject to an administrative penalty.

2. (2) Maximum Administrative Penalty Amounts.

   1. (a) An administrative penalty on any person may not exceed $5,000 per day for each day of a violation.
   2. (b) If the board determines that a violation is a willful violation, the board may impose an administrative penalty on that person not to exceed $10,000 for each day of the violation.
   3. (c) Administrative penalties assessed by the division or the board may not exceed $200,000 per violation per person.

3. (3) Days of Violation. The duration of a violation shall be calculated in days as follows:

   1. (a) a reporting or other minor violation that presents low direct risk or threat of harm to public health, safety, and welfare, begins on the day that the report should have been made or other required action should have been taken, and continues until the report is filed or the required action is completed to the division's satisfaction.
   2. (b) violations that present a possibility of distinct, identifiable actual or threatened adverse impact, or violations that present a significant probability of actual or threatened adverse impact, begin on the date the violation was discovered or should have been discovered through the exercise of reasonable care and continue until the appropriate corrective action is completed to the division's satisfaction.
4. (4) Penalty Calculation. The base penalty for each violation shall be calculated based on the division's penalty schedule. Each violation is initially assessed at the minor violation rate, but may be escalated to the major violation rate in accordance with Section R644-18-3.

5. (5) Issuance of Proposed Assessments.

   1. (a) If a violation is not abated prior to the end of the abatement period specified for that violation, the division shall issue a proposed assessment to the person containing the penalty amount after the abatement period ends.

      1. (i) Failure by the division to serve a proposed assessment within 30 days will not be grounds for dismissal of any part of such assessment unless the permittee or operator:

         1. (A) proves actual prejudice as a result of the delay; and
         2. (B) makes a timely objection to the delay.

   2. (b) Upon abatement of the violation, or when the maximum penalty amount has been reached, the division will issue a final assessment to the person containing the final penalty amount.

      1. (i) Failure by the division to serve a final proposed assessment within 30 days will not be grounds for dismissal of any part of such assessment unless the permittee or operator:

         1. (A) proves actual prejudice as a result of the delay; and
         2. (B) makes a timely objection to the delay.

6. (6) Violations Designated as Class 1.

   1. (a) Violations that present a low direct risk or threat of harm to public health, safety and welfare, including:

      1. (i) Section R644-5-3 financial responsibility violations;
      2. (ii) Section R644-16-1 temporarily abandoned well violations;
      3. (iii) Section R644-5-4 pollution and surface damage violations;
      4. (iv) Section R644-17-1 site closure restoration violations;
      5. (v) Section R644-15-1 reporting violations;
      6. (vi) Section R644-5-6 inadequate notification violations;
      7. (vii) Section R644-13-2 facility records for review violations; and
      8. (viii) any other violation listed in Title R644 or Title 40, Chapter 11, Geologic Carbon Storage.

7. (7) Violations Designated as Class II.

   1. (a) Violations that present a possibility of distinct, identifiable, actual or threatened adverse impacts to public health, safety, and welfare, including:

      1. (i) Section R644-7-5 operations without a permit;
      2. (ii) Section R644-11-1 workover without approval;
      3. (iii) Section R644-15-1 not reporting an incident;
      4. (iv) Sections R644-4-3 and R644-11-1 not adhering to the approved procedure or conditions on an APD or sundry notice;
      5. (v) Section R644-5-4 violation of permit conditions;
      6. (vi) Section R644-13-1 testing and monitoring violations;
      7. (vii) Section R644-14-1 mechanical integrity violations;
      8. (viii) Section R644-3-1 false reporting; and
      9. (ix) any other violation listed in Title R644 or Title 40, Chapter 11, Geologic Carbon Storage that presents a possibility of distinct, identifiable, actual or threatened adverse impacts to public health, safety and welfare.

8. (8) Violations Designated as Class III.

   1. (a) Violations that present a significant probability of actual or threatened adverse impact to public health, safety, and welfare, including:

      1. (i) Section R644-9-1 drilling or spudding a Class VI well without approval;
      2. (ii) Section R644-10-1 operating a Class VI well without approval;
      3. (iii) Section R644-16-1 P&A without approval;
      4. (iv) Section R644-5-6 injection without approval; and
      5. (v) any other rule violation listed in Title R644 or Title 40, Chapter 11, Geologic Carbon Storage that presents a significant probability of actual or threatened adverse impact to public health, safety and welfare.

9. (9) Administrative Penalty Schedule.

   1. (a) Penalty Schedule. The division's penalty schedule establishes a daily penalty based on the classification of the rule violation, Class I, II, or III as provided in Subsection (6), (7), and (8), and the degree of actual or threatened adverse impact resulting from the violation, minor or major as provided in Subsections (9)(b) and (10).

      TABLEv. Daily Penalty ScheduleViolationClass IClass IIClass IIIDegree:Minor$ 750$ 1,500$ 5,000Major$ 1,500$ 5,000$ 10,000

   2. (b) Degree of actual or threatened adverse impact. A minor violation and associated penalty amount may be increased to a major violation and penalty amount based on the degree of actual or threatened adverse impact to public health, safety and welfare resulting from the violation. The division shall determine the degree of actual or threatened adverse impact to public health, safety, and welfare, based on the totality of circumstances in each case that may involve increasing a Class I violation to a Class II or Class III violation, or increasing a Class II violation to a Class III violation.

10. (10) Penalty Adjustments based on Aggravating and Mitigating Factors. The division shall consider aggravating and mitigating factors when determining whether a violation is minor or major. These factors shall include:

    1. (a) Aggravating factors:

       1. (i) The violation involved a substantial departure from the standards of ordinary care of a reasonable prudent person.
       2. (ii) The violation was a willful violation.
       3. (iii) The violation had a significant negative impact on human health or resource detriment.
       4. (iv) The violator was nonresponsive to the division in correcting or responding to the violation.
       5. (v) The violator benefited economically from the violation, in that case the amount of such benefit shall be taken into consideration.
       6. (vi) The violator has a history of previous violations at the particular well or CO2 Sequestration facility.

    2. (b) Mitigating factors:

       1. (i) The violator self-reported the violation.
       2. (ii) The violator demonstrated prompt, effective and prudent response to the violation, including assistance to any impacted parties.
       3. (iii) The cause of the violation was outside of the violator's reasonable control and responsibility.
       4. (iv) The violator made a good faith effort to comply with applicable requirements prior to the division learning of the violation.
       5. (v) The violator has demonstrated a history of compliance with division rules, orders, and permits.
       6. (vi) The violator has not been served with a notice of violation within the twenty-four-month period prior to the subject violation at issue.
11. (11) Repeat Violations. The division shall consider the history of previous violations at a particular well or CO2 Sequestration facility when determining an appropriate administrative penalty. If the person has three or more violations of the same minor violation in the twenty-four-month period immediately preceding the violation at issue, the minor violation shall escalate to a major violation.
12. (12) Unabated Violations. The division may request an emergency order from the board requiring well or CO2 Sequestration facility operations be suspended for any unabated violation where the maximum penalty amount has accrued. Operations may only resume upon abatement of the violation and payment of the penalty.
13. (13) Appeals. A notice of violation, division enforcement order, or administrative penalty assessment issued by the division may be appealed by filing a request for agency action with the division within 30 calendar days of the assessment following the procedures provided in Rule R649-10.

KEY: oil and gas law

Date of Last Change: July 31, 2025

Authorizing, and Implemented or Interpreted Law: 40-11-3