Criteria and Procedures for Proposed Assessment of Civil Penalties

SUMMARY: This proposed rule revises the Mine Safety and Health

Administration's (MSHA's) existing civil penalty assessment amounts

under part 100. The proposal also adds a new provision which would

codify the civil penalty amounts that may be assessed under Sections

110(a), 110(b), and 110(g) of the Federal Mine Safety and Health Act of

1977 (Mine Act). These changes are made as a result of a mandate by

Congress in the Debt Collection Improvement Act of 1996, which requires

that all civil penalties be increased by up to 10 percent, and that

they be adjusted at least once every four years thereafter according to

the formula specified in the Federal Civil Penalties Inflation

Adjustment Act of 1990 (Inflation Adjustment Act).

DATES: Written comments must be submitted on or before November 7,

1997.

ADDRESSES: Comments on the proposed rule may be transmitted by

electronic mail, fax, or mail. Comments by electronic mail must be

clearly identified as such and sent to this e-mail address:

[email protected]. Comments by fax must be clearly identified as such

and sent to: Mine Safety and Health Administration, Office of

Standards, Regulations, and Variances, 703-235-5551. Send mail comments

to: Mine Safety and Health Administration, Office of Standards,

Regulations, and Variances, Room 621, 4015 Wilson Boulevard, Arlington,

Virginia 22203-1984. Interested persons are encouraged to supplement

written comments with computer files or disks; please contact the

Agency with any questions about format.

FOR FURTHER INFORMATION CONTACT: Patricia W. Silvey, Director; Office

of Standards, Regulations and Variances, MSHA; 703-235-1910 (voice),

703-235-5551 (facsimile), [email protected] (Internet e-mail).

SUPPLEMENTARY INFORMATION:

I. Rulemaking Background

Under Sections 105(a) and 110 of the Mine Act, MSHA is required to

assess a civil penalty for each violation of the Mine Act and the

mandatory safety and health standards promulgated by the Agency. The

Mine Act originally provided in 1977 that the penalty for each

violation would not exceed $10,000, and that the maximum penalty for

failure to correct a violation cited under Section 104(a) within the

period permitted for its correction would not exceed $1,000 for each

day that the violation continued. Miners who willfully violated the

mandatory safety standards relating to smoking or the carrying of

smoking materials into a mine would be assessed a civil penalty of not

more than $250 for each violation.

MSHA promulgated its first regulations relating to civil penalty

assessments under the Mine Act on May 30, 1978 (43 FR 23514). This rule

included a penalty conversion table for regular assessments based on

the six criteria enumerated in 30 CFR 100.3(a). On May 21, 1982 (47 FR

22286), MSHA promulgated a rule that revised its regular assessment

civil penalty table, further defined the criteria for issuing special

assessments, and created a $20 single penalty assessment for those

violations that were not reasonably likely to result in reasonably

serious injury or illness and which were abated in a timely manner.

There was no provision in either rule relating to civil penalties

assessed for failing to abate violations of the Mine Act or for smoking

or carrying smoking materials into a mine, as these penalty amounts

were set by the Mine Act.

On November 5, 1990, the Omnibus Budget Reconciliation Act of 1990

(Budget Act), Pub.L. 101-508, was signed into law. Section 3102 of the

Budget Act amended the Mine Act and raised the maximum MSHA civil

penalty per violation from $10,000 to $50,000. The $1,000 per day civil

penalty for failure to correct a violation under Section 104(a) was

raised to $5,000 per day. The miner smoking penalty remained at $250.

Following the passage of the Budget Act, MSHA published a final rule on

January 24, 1992 (57 FR 2968), as amended December 21, 1992 (57 FR

60690), which implemented the penalty increases prescribed by the

Budget Act and accounted for inflation since 1982. A new civil penalty

conversion table was published and the single penalty assessment was

also raised to $50 by this final rule.

Also in 1990, Congress passed P.L. 101-410, the Inflation

Adjustment Act. On April 26, 1996, the Omnibus Consolidated Rescissions

and Appropriations Act of 1996 (OCRAA), Pub.L. 104-131, was passed.

Chapter 10 of the OCRAA, titled as the ``Debt Collection Improvement

Act of 1996'' (DCIA), modifies the Inflation Adjustment Act and

requires that the head of each agency adjust by regulation each civil

monetary penalty provided for by law within its jurisdiction pursuant

to the inflation adjustment described under Section 5 of the DCIA. The

first adjustment of a civil monetary penalty may not exceed 10 percent

of the existing penalty. The revised civil penalties will apply only to

those violations occurring after the date the final rule takes effect.

II. Discussion and Summary of the Proposed Rule

A. General Discussion

MSHA is required by law to assess a civil penalty for each

violation of the Mine Act or its regulations. The civil penalties are

intended to serve as a means of encouraging mine operators to comply

with the law and to deter them from allowing hazardous or unhealthy

conditions to exist in their mines. In 1990, the maximum civil penalty

that could be assessed for each violation of the Mine Act was raised

from $10,000 to $50,000 under the Budget Act. MSHA issued regulations

reflecting this increase on January 24, 1992 (57 FR 2968), as amended

December 21, 1992 (57 FR 60690).

When Congress originally passed the Inflation Adjustment Act in

1990, the legislative history stated:

In the past 60 years, but most notably in the last 25 years,

Congress has enacted numerous statutes intended to regulate conduct

deemed harmful to the health and welfare of the U.S. citizenry.

Typically, such statutes include provision for civil fines (``civil

monetary penalties'') to be used both to punish and to deter

violations of the statute.

Recent studies, however, suggest that the desired impact of

these penalties has eroded over time due to the failure to adjust

civil penalties to keep pace with inflation. Thus, for example,

where penalties to enforce workplace safety have remained unchanged

since the enactment of the Occupational Health and Safety Act in

1970, such penalties have been effectively reduced to one-third of

their original value if one takes into account the intervening rate

of inflation.

In passing the DCIA, Congress again demonstrated its concern that

civil penalties continue to have the same impact as was originally

intended. MSHA is increasing its civil penalties in order to comply

with Congress' mandate that agencies make inflation adjustments in

their civil penalties.

Under the DCIA, MSHA is required to increase these civil penalties

by an

[[Page 47331]]

amount not to exceed 10 percent. The amount of the increase is

determined by the formula found in Section 5 of the Inflation

Adjustment Act. Under Section 5, civil monetary penalties are to be

increased by a cost-of-living adjustment. The statute defines ``cost-

of-living adjustment'' as the percentage by which the Consumer Price

Index for the month of June of the calendar year preceding the

adjustment exceeds the Consumer Price Index for the month of June of

the calendar year in which the amount of such civil monetary penalty

was last set or adjusted. The term ``Consumer Price Index'' (CPI) means

the Consumer Price Index for all-urban consumers published by the

Department of Labor.

In order to determine the current cost-of-living adjustment for

MSHA's civil penalties, MSHA made the following calculations:

469.5 (the CPI for the month of June 1996, the calendar year preceding

the current adjustment.)

419.9 (the CPI for the month of June 1992, the calendar year in which

the MSHA civil penalties were last adjusted)

469.5/419.9 = 1.12 (inflation adjustment factor)

By using the 1.12 inflation adjustment factor, MSHA would in effect

increase its civil penalty assessments by 12 percent. However, because

Congress has imposed a cap on the maximum increase of 10 percent, the

increases contained within this rule would not exceed 10 percent.

In order to determine the current cost-of-living adjustment for the

miner smoking penalty, MSHA made the following calculations:

469.5 (the CPI for the month of June 1996, the calendar year preceding

the current adjustment.)

195.3 (the CPI for the month of June 1978, the calendar year in which

the civil penalty was last adjusted)

469.5/195.3 = 2.4 (inflation adjustment factor)

Using the inflation adjustment factor of 2.4, MSHA would have to

increase the miner smoking penalty 140 percent. However, as stated

above, Congress has imposed a 10 percent cap on civil penalty

increases. Therefore, all civil penalties under this proposal have been

adjusted by multiplying each penalty by 1.10 (a 10 percent increase)

and rounding to the nearest dollar.

B. Section-by-Section Analysis

The following section-by-section analysis explains the proposed

rule and its effect on existing standards. The standards in part 100

apply to all mine operators.

Section 100.3 Determination of Penalty Amount; Regular Assessment

Paragraph (a) of this standard would be amended to codify Section

110(a) of the Mine Act. This revision would also reflect the increase

of the maximum civil penalty to $55,000 per violation. Paragraph (g) of

this standard would set forth a revised penalty conversion table in

which points assigned for each of the criteria enumerated in this

section are totaled and a correlating civil penalty is assessed. Using

the 10 percent maximum penalty increase prescribed by the DCIA, the

civil penalty conversion table found in this section would be adjusted

to reflect civil penalties ranging from $66 to $55,000.

Section 100.4 Determination of Penalty; Single Penalty Assessment

The single penalty assessment under this section would increase

from $50 to $55, which reflects a 10 percent maximum increase.

Section 100.5 Determination of Penalty; Special Assessment

This section pertains to violations which are of such a nature or

seriousness that MSHA cannot determine an appropriate penalty using the

regular assessment formula or the single assessment provision. This

section also addresses penalties which may be assessed to an operator

for failure to correct a violation within the period required. Finally,

this section addresses penalties which may be assessed for miners who

willfully use or carry smoking materials underground.

The special assessment penalty is determined by experienced Agency

mine safety and health specialists, based on the facts and

circumstances of each case. Prior to a special assessment, Agency field

personnel review certain categories of violations for special

assessment.

The civil penalty provisions found in Sections 110(b) and 110(g) of

the Mine Act would be codified under this section. The maximum civil

penalty for failure to correct a violation for which a citation has

been issued under Section 104(a) of the Mine Act would be increased to

$5,500 per violation per day. The maximum civil penalty for willful

violation of mandatory standards pertaining to smoking or carrying of

smoking materials into a mine by any miner would be raised to $275 per

violation.

IV. Executive Order 12866

In accordance with Executive Order 12866, MSHA has prepared a

preliminary Regulatory Impact Analysis (RIA) of the estimated costs and

benefits associated with the proposed revisions of the criteria and

procedures for proposed assessment of civil penalties.

The preliminary RIA containing this analysis is available from

MSHA. MSHA welcomes comments on its analysis and methodology. The

Agency estimates that the proposal would cost the mining industry

slightly more than $3 million annually. All penalties collected by MSHA

are deposited in the U.S. Treasury.

Based upon the RIA, MSHA has determined that this rule is not an

economically significant regulatory action pursuant to section 3(f)(1)

of Executive Order 12866.

V. Paperwork Reduction Act

This proposed rule contains no information collections which are

subject to review by the Office of Management and Budget (OMB) under

the Paperwork Reduction Act of 1995.

VI. Regulatory Flexibility Act

In accordance with Sec. 605 of the Regulatory Flexibility Act

(RFA), MSHA certifies that the civil penalty proposal does not have a

significant economic impact on a substantial number of small entities.

This proposed regulation does no more than to codify existing law and

to mechanically increase certain civil money penalties to account for

inflation, pursuant to specific directions set forth in the Federal

Civil Penalties Inflation Adjustment Act, as amended. The statute

specifies the procedure for calculating the adjusted civil money

penalties and does not allow the Department to vary the calculation to

minimize the effect on small entities. Moreover, the actual amount of

the increase in penalties would not meet the threshold set forth in the

Regulatory Flexibility Act. MSHA discusses its quantitative analysis

warranting this conclusion below.

In the past, MSHA considered small mines to be mines with fewer

than 20 employees. However, for the purposes of the RFA and this

certification, MSHA has also evaluated the impact of the proposal on

mines with 500 employees or fewer. No small governmental jurisdictions

or nonprofit organizations are significantly or uniquely affected.

Under the Small Business Regulatory Enforcement Fairness Act (SBREFA)

amendments to the RFA, MSHA must include in the proposal a factual

basis for this certification. The Agency also must publish the

regulatory flexibility certification statement in the Federal Register,

along with the factual basis, followed by an opportunity for comment by

the public.

[[Page 47332]]

MSHA specifically solicits comment on the Agency's determination in

this regulatory flexibility certification statement, including cost

data and data sources. To facilitate the public participation in the

rulemaking process, MSHA will mail a copy of the proposed rule,

including the preamble and regulatory flexibility certification

statement, to mine operators and miners' representatives.

Factual basis for certification. MSHA explains below the Agency's

quantitative approach in reaching its conclusion on the impact of the

statutory provisions, as implemented by the rule. The Agency performed

its analysis separately for two groups of mines: the coal mining sector

as a whole, and the metal and nonmetal mining sector as a whole. Based

on a review of available sources of public data on the mining industry,

the Agency believes that a quantitative analysis of the impacts on

various mining subsectors may not be feasible. The Agency requests

comments, however, on whether there are special circumstances that

warrant separate quantification of the impact of this proposal on any

mining subsector, and information on how it might readily obtain the

data necessary to conduct such a quantitative analysis. The Agency is

fully cognizant of the diversity of mining operations in each sector,

and has applied that knowledge as it developed the proposal.

Under the SBREFA amendments to the RFA, MSHA must use the SBA

definition for a small mine of 500 employees or fewer or, after

consultation with the SBA Office of Advocacy, establish an alternative

definition for the mining industry by publishing that definition in the

Federal Register for notice and comment. The alternative definition

could be the Agency's traditional definition of ``fewer than 20

miners,'' or some other definition. As reflected in the certification,

MSHA analyzed the costs of this proposal for small and large mines

using both the traditional Agency definition, and SBA's definition, as

required by RFA, of a small mine. The Agency compared the costs of the

proposal for small mines in each sector to the revenues for each sector

for every size category analyzed. In each case, the results indicated

that the costs as a percent of revenue are less than 1 percent.

The following table summarizes the results of this analysis.

Small Mines: Costs Compared to Revenues

----------------------------------------------------------------------------------------------------------------

Estimated Estimated Cost as

Number of Estimated cost revenue cost per percent of

mines of proposal (millions) mine revenue

----------------------------------------------------------------------------------------------------------------

Coal Mines:

Small =20.............................. 1043 907,500 18,672 870 .005

Small =500............................. 11 9,600 819 870 .002

All Mines................................... 2644 2,300,400 19,508 870 .01

M/NM Mines:

Small =20.............................. 1540 105,800 26,071 70 .000

Small =500............................. 29 2,000 5,866 70 .000

All Mines................................... 10735 737,500 38,000 70 .002

----------------------------------------------------------------------------------------------------------------

VII. Unfunded Mandates

The Unfunded Mandates Reform Act was enacted in 1995. While much of

the Act is designed to assist the Congress in determining whether its

actions will impose costly new mandates on State, local, and tribal

governments, the Act also includes requirements to assist Federal

agencies to make this same determination with respect to regulatory

actions.

MSHA has determined that, for purposes of Sec. 202 of the Unfunded

Mandates Reform Act of 1995, this proposal does not include any Federal

mandate that may result in increased expenditures by State, local, or

tribal governments in the aggregate of more than $100 million, or

increased expenditures by the private sector of more than $100 million.

Moreover, the Agency has determined that for purposes of Sec. 203 of

that Act, this proposed rule does not significantly or uniquely affect

small governments.

Analysis. Based on the analysis in the Agency's preliminary

Regulatory Impact Statement, the cost of this proposed rule for the

entire mining industry is less than $100 million. Accordingly, there is

no need for further analysis under Sec. 202 of the Unfunded Mandates

Reform Act.

MSHA has concluded that small governmental entities are not

significantly or uniquely impacted by the proposed regulation. The

proposed rule will impact approximately 2,545 coal and 10,563 metal and

nonmetal mining operations.

When MSHA issues the proposed rule, the Agency will affirmatively

seek input of any state, local, and tribal government which may be

affected by the civil penalty rulemaking. This would include state and

local governmental entities who operate sand and gravel mines in the

construction and repair of highways and roads. MSHA will mail a copy of

the proposed rule to approximately 350 such entities.

Following is a state-by-state listing of sand and gravel mines

owned or operated by state or local governments according to MSHA

records. The Agency welcomes any comments or corrections.

State/County Owned/Operated Sand and Gravel Operations

[As of 12/08/95]

------------------------------------------------------------------------

County

State State owned owned City owned

------------------------------------------------------------------------

ARIZONA.......................... 2 2 ...........

[[Page 47333]]

ARKANSAS......................... ........... 5 ...........

CALIFORNIA....................... ........... 4 ...........

COLORADO......................... 4 27 ...........

IDAHO............................ ........... 13 ...........

ILLINOIS......................... ........... 2 ...........

INDIANA.......................... ........... 5 ...........

IOWA............................. ........... 2 ...........

KANSAS........................... ........... 2 ...........

MAINE............................ 5 ........... ...........

MARYLAND......................... ........... ........... 6

MICHIGAN......................... ........... 8 ...........

MISSISSIPPI...................... ........... 5 ...........

MISSOURI......................... ........... 8 ...........

MONTANA.......................... 8 34 ...........

NEBRASKA......................... ........... 2 ...........

NEVADA........................... ........... 1 ...........

NEW MEXICO....................... ........... 4 ...........

NEW YORK......................... ........... 15 95

OKLAHOMA......................... ........... 2 ...........

OREGON........................... ........... 11 ...........

PENNSYLVANIA..................... ........... ........... 1

SOUTH CAROLINA................... ........... 1 ...........

SOUTH DAKOTA..................... ........... 15 ...........

TENNESSEE........................ ........... 3 ...........

TEXAS............................ ........... 6 ...........

UTAH............................. 1 5 ...........

VERMONT.......................... ........... ........... 11

WASHINGTON....................... ........... 9 ...........

WISCONSIN........................ ........... 20 1

WYOMING.......................... ........... 1 ...........

--------------------------------------

TOTAL (346).................. 20 212 114

------------------------------------------------------------------------

List of Subjects in 30 CFR Part 100

Mine safety and health, Penalties.

Dated: September 2, 1997.

J. Davitt McAteer,

Assistant Secretary for Mine Safety and Health.

It is proposed to amend part 100, subchapter P, chapter I, title 30

of the Code of Federal Regulations as follows:

PART 100--CRITERIA AND PROCEDURES FOR PROPOSED ASSESSMENT OF CIVIL

PENALTIES

1. The authority citation for part 100 continues to read as

follows:

Authority: 30 U.S.C. 815, 820 and 957.

2. Section 100.3 is amended by revising the introductory text of

paragraph (a) and revising paragraph (g) to read as follows:

Sec. 100.3 Determination of penalty amount; regular assessment.

(a) General. The operator of any mine in which a violation occurs

of a mandatory health or safety standard or who violates any other

provision of the Mine Act, shall be assessed a civil penalty of not

more than $55,000. Each occurrence of a violation of a mandatory safety

or health standard may constitute a separate offense. The amount of the

civil penalty proposed shall be based upon the formula set forth in

this section. The formula is based on the general criteria described in

sections 105(b) and 110(i) of the Act. These criteria are:

* * * * *

(g) Penalty conversion table. The following penalty conversion

table shall be used to convert the accumulation of penalty points to

the appropriate proposed monetary assessment.

Penalty Conversion Table

------------------------------------------------------------------------

Points Penalty

------------------------------------------------------------------------

20 or fewer.................................................. 66

21........................................................... 73

22........................................................... 79

23........................................................... 86

24........................................................... 92

25........................................................... 99

26........................................................... 109

27........................................................... 119

28........................................................... 129

29........................................................... 139

30........................................................... 149

31........................................................... 162

32........................................................... 175

33........................................................... 188

34........................................................... 201

35........................................................... 215

36........................................................... 231

37........................................................... 248

38........................................................... 264

39........................................................... 281

40........................................................... 297

41........................................................... 321

42........................................................... 347

43........................................................... 371

44........................................................... 396

45........................................................... 420

46........................................................... 453

47........................................................... 486

48........................................................... 570

49........................................................... 679

50........................................................... 796

51........................................................... 936

52........................................................... 1,086

53........................................................... 1,247

54........................................................... 1,419

55........................................................... 1,603

56........................................................... 1,815

57........................................................... 2,041

58........................................................... 2,279

59........................................................... 2,531

60........................................................... 2,796

61........................................................... 3,098

62........................................................... 3,416

[[Page 47334]]

63........................................................... 3,748

64........................................................... 4,096

65........................................................... 4,400

66........................................................... 4,620

67........................................................... 4,840

68........................................................... 5,060

69........................................................... 5,280

70........................................................... 5,500

71........................................................... 5,775

72........................................................... 6,050

73........................................................... 6,325

74........................................................... 6,600

75........................................................... 6,875

76........................................................... 7,150

77........................................................... 7,700

78........................................................... 8,250

79........................................................... 8,800

80........................................................... 9,350

81........................................................... 10,450

82........................................................... 11,550

83........................................................... 12,650

84........................................................... 13,750

85........................................................... 14,850

86........................................................... 16,500

87........................................................... 18,700

88........................................................... 20,900

89........................................................... 23,100

90........................................................... 25,300

91........................................................... 27,500

92........................................................... 30,250

93........................................................... 33,000

94........................................................... 35,750

95........................................................... 38,500

96........................................................... 41,250

97........................................................... 44,000

98........................................................... 46,750

99........................................................... 49,500

100.......................................................... 55,000

------------------------------------------------------------------------

* * * * *

3. Section 100.4 is amended by revising paragraph (a) to read as

follows:

Sec. 100.4 Determination of penalty; single penalty assessment.

(a) An assessment of $55 may be imposed as the civil penalty where

the violation is not reasonably likely to result in a reasonably

serious injury or illness (non-S&S) and is abated within the time set

by the inspector. If the violation is not abated within the time set by

the inspector, the violation will not be eligible for the $55 single

penalty and will be processed through either the regular assessment

provision (Sec. 100.3) or special assessment provision (Sec. 100.5). If

the violation meets the criteria for excessive history under

Sec. 100.4(b), the violation will not be eligible for the $55 single

penalty and will be processed through the regular assessment provision

(Sec. 100.3).

* * * * *

4. Section 100.5 is amended by redesignating the introductory text

as paragraph (a); paragraphs (a) through (h) as paragraphs (a) (1)

through (8); concluding text as paragraph (b); and by adding new

paragraphs (c), and (d) to read as follows:

Sec. 100.5 Determination of penalty; special assessment.

* * * * *

(c) Any operator who fails to correct a violation for which a

citation has been issued under Section 104(a) of the Mine Act within

the period permitted for its correction may be assessed a civil penalty

of not more than $5,500 for each day during which such failure or

violation continues.

(d) Any miner who willfully violates the mandatory safety standards

relating to smoking or the carrying of smoking materials, matches, or

lighters shall be subject to a civil penalty which shall not be more

than $275 for each occurrence of such violation.

[FR Doc. 97-23731 Filed 9-5-97; 8:45 am]

BILLING CODE 4510-43-P