[Federal Register Volume 63, Number 77 (Wednesday, April 22, 1998)]
[Rules and Regulations]
[Pages 20032-20035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10688]



[[Page 20031]]

_______________________________________________________________________

Part V





Department of Labor





_______________________________________________________________________



Mine Safety and Health Administration



_______________________________________________________________________



30 CFR Part 100



Criteria and Procedures for Proposed Assessment of Civil Penalties; 
Final Rule

  Federal Register / Vol. 63, No. 77 / Wednesday, April 22, 1998 / 
Rules and Regulations  

[[Page 20032]]



DEPARTMENT OF LABOR

Mine Safety and Health Administration

30 CFR Part 100

RIN 1219-AA49


Criteria and Procedures for Proposed Assessment of Civil 
Penalties

AGENCY: Mine Safety and Health Administration, Labor.

ACTION: Final rule.

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

SUMMARY: This final rule revises the Mine Safety and Health 
Administration's (MSHA's) existing civil penalty assessment amounts 
under part 100. The rule also adds a new provision which codifies the 
civil penalty amounts that may be assessed under Secs. 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 4 years thereafter according to the 
formula specified in the Federal Civil Penalties Inflation Adjustment 
Act of 1990 (Inflation Adjustment Act).

EFFECTIVE DATE: This final rule is effective June 22, 1998.

FOR FURTHER INFORMATION CONTACT: Patricia W. Silvey, Director; Office 
of Standards, Regulations, and Variances, MSHA; 703-235-1910.

SUPPLEMENTARY INFORMATION:

I. Rulemaking Background

    Under Secs. 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 Sec. 104(a) within the 
period permitted for its correction would not exceed $1,000 for each 
day that the violation continued to exist. Miners who willfully 
violated the mandatory safety standards relating to smoking or the 
carrying of smoking materials would be assessed a civil penalty of not 
more than $250 for each occurrence of such 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, 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 Sec. 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 $20 single penalty assessment 
was also raised to $50.
    Also in 1990, Congress passed Pub. 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 Sec. 5 of the DCIA. The 
first adjustment of a civil 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.
    On September 8, 1997, MSHA published a proposed rule in the Federal 
Register (62 FR 47330) notifying the public of the Agency's mandate to 
increase civil penalties by an amount not to exceed 10 percent of the 
existing penalty amounts. The rulemaking record closed on November 7, 
1997. No requests for public hearings were received. This final rule is 
based on consideration of the entire rulemaking record, including all 
written comments received.

II. Discussion and Summary of the Final Rule

A. General Discussion

    In passing the DCIA, Congress demonstrated its concern that civil 
penalties be adjusted to produce desired results. MSHA is increasing 
its civil penalties in order to comply with Congress' mandate that 
agencies make inflation adjustments in their civil penalties.
    Under Sec. 5 of the Inflation Adjustment Act, civil 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 penalties 
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:

480.2  (the CPI for the month of June 1997, 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)
480.2/419.9 = 1.14 (inflation adjustment factor)
1.14 * $100 (a hypothetical penalty assessment) = $114 (new assessment 
amount with full inflation adjustment)

    But using the maximum inflation adjustment (10%) permitted by the 
DCIA, this hypothetical penalty assessment would be $110 (1.10 * $100)
    In order to determine the current cost-of-living adjustment for the 
miner smoking penalty, MSHA made the following calculations:

480.2  (the CPI for the month of June 1997, 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)
480.2/195.3 = 2.5 (inflation adjustment factor)
2.50 * $250 (the smoking penalty assessment) = $625 (new assessment 
amount with full inflation adjustment)

    But using the maximum inflation adjustment (10%) permitted by the

[[Page 20033]]

DCIA, penalty assessment would be $275 (1.10 * $250)
    One commenter generally agreed with the provisions of the proposed 
rule and supported the increase of monetary penalties. The commenter 
also suggested that the Agency quickly and efficiently implement the 
provisions of the proposed rule.
    Another commenter stated that the proposed rule and the resulting 
increase in monetary penalties are excessive, especially for small 
companies. The adjustments contained in the final rule are 
Congressionally mandated and, therefore, agencies have no discretion to 
consider lower increases in penalties for small businesses. However, 
one criterion considered by MSHA when assessing civil penalties by the 
regular formula under 30 CFR 100.3(a)(1) is the size of the mine and 
the size of the controlling entity. A second criterion considered by 
MSHA is the mine operator's ability to continue in business. MSHA 
begins with the assumption that the civil penalty will not affect a 
mine operator's ability to continue in business. The burden is on the 
mine operator to demonstrate financial hardship. MSHA then reviews any 
financial documentation submitted by the mine operator and makes a 
determination as to whether the proposed penalty should be adjusted.
    Two commenters suggested that MSHA modify part 100 to allow for 
penalty offsets or credits for those coal companies that maintain mine 
rescue teams. The commenters added that companies which continue to 
maintain mine rescue teams are at a competitive disadvantage with other 
coal companies. These commenters suggested that the Agency is presently 
considering crediting mining companies with mine rescue teams by 
automatically reducing their assessed civil penalties. Therefore, these 
commenters requested that MSHA extend the comment period or leave the 
rulemaking record open while this issue is being considered. One of the 
commenters also added that civil penalties could, and should, be used 
in part to fund some state agency mine rescue teams. While the Agency 
recognizes the importance of mine rescue teams and the significant role 
they play in ensuring miners' health and safety, the issue is beyond 
the scope of this rulemaking. Moreover, MSHA is presently not 
considering reducing civil penalties assessed to mining companies with 
mine rescue teams. MSHA does, however, plan to continue to provide 
funding through its State Grants program. Portions of this MSHA funding 
program are used by some states for maintaining mine rescue teams.

B. Section-by-Section Analysis

    The following section-by-section analysis explains the final rule 
and its effect on existing standards.

Section 100.3  Determination of Penalty Amount; Regular Assessment

    Paragraph (a) of this section is amended to codify Sec. 110(a) of 
the Mine Act. This revision also reflects the increase of the maximum 
civil penalty from $50,000 to $55,000 per violation. Existing paragraph 
(g) of this standard includes a revised penalty conversion table in 
which points assigned for each criterion enumerated in this section are 
totaled and a correlating civil penalty is determined. Current 
penalties range from $60 to $50,000. New paragraph (g) reflects the 10 
percent maximum penalty increase prescribed by the DCIA, and civil 
penalties have been adjusted accordingly. Civil penalties in the final 
table range from $66 to $55,000.

Section 100.4  Determination of Penalty; Single Penalty Assessment

    The single penalty assessment under the final rule is increased 
from the existing $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. 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.
    This section also addresses penalties which may be assessed daily 
to an operator for failure to correct a violation within the period 
permitted for its correction. The existing maximum daily civil penalty 
is increased from $5,000 to $5,500.
    Finally, this section addresses penalties which MSHA may assess 
miners who willfully violate mandatory safety standards relating to the 
use or carrying of smoking materials underground. This current penalty 
of $250 is increased in the final rule to $275.

III. Executive Order 12866

    In accordance with Executive Order 12866, MSHA has prepared a 
Regulatory Impact Analysis (RIA) of the estimated costs and benefits 
associated with the revisions of the criteria and procedures for 
proposed assessment of civil penalties.
    The RIA containing this analysis is available from MSHA. The Agency 
estimates that the final rule will result in increased costs to the 
mining industry of about $2.6 million annually.
    Based upon the RIA, MSHA has determined that this rule is not an 
economically significant regulatory action pursuant to Sec. 3(f)(1) of 
Executive Order 12866.

IV. Paperwork Reduction Act

    This final 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.

V. Regulatory Flexibility Act

    In accordance with Sec. 605 of the Regulatory Flexibility Act 
(RFA), MSHA certifies that the civil penalty rule does not have a 
significant economic impact on a substantial number of small entities. 
This final regulation does no more than codify existing law and 
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 final rule on 
mines with 500 employees or fewer. About 350 small governmental 
jurisdictions may be affected. Under the Small Business Regulatory 
Enforcement Fairness Act (SBREFA) amendments to the RFA, MSHA must 
include in the final rule a factual basis for this certification. The 
Agency is publishing the regulatory flexibility certification statement 
in the Federal Register, along with the factual basis. The Agency has 
provided the Small Business Administration (SBA) Office of

[[Page 20034]]

Advocacy a copy of the certification statement.
    MSHA will also mail a copy of the final rule, including the 
preamble and certification statement, to mine operators and miners' 
representatives. The final rule will also be available on MSHA's 
Website.
    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: coal mines and metal/
nonmetal mining operations.
    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 final rule for small and large mines 
using both the traditional Agency definition and SBA's definition, as 
required by RFA. The Agency compared the costs of the final rule 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.
    One commenter stated that the SBA defines the small business entity 
for Standard Industrial Code (SIC) 3241 as those employing 750 persons 
or less. SIC code 3241 includes establishments primarily engaged in 
manufacturing hydraulic cement, including portland cement. The 
commenter stated that of the 45 manufacturers of portland cement, nine 
qualified as small entities under this SBA definition. The commenter 
also requested that MSHA use this definition in all proposed rules. 
MSHA recognizes this SBA definition for businesses engaged in this type 
of mining. In this instance, however, the mandate by Congress in the 
DCIA to increase civil penalties applies across the board to all mine 
operators. Therefore, although some manufacturers of portland cement 
would be considered small mines under the SBA definition, they are 
still covered by the final rule.
    The following table summarizes the results of the analysis.

                                        Mines: Costs Compared to Revenues                                       
----------------------------------------------------------------------------------------------------------------
                                                                           Estimated    Estimated               
                                              Number of   Estimated cost    revenue      cost per   Cost as % of
                                                mines      of final rule   (millions)      mine        revenue  
----------------------------------------------------------------------------------------------------------------
COAL MINES:                                                                                                     
    Small <20..............................         1617      $1,149,957         $836         $711         0.14 
    Large >=20.............................         1044         742,459       18,672          711         0.004
    Small= <500............................         2650       1,884,593       18,689          711         0.01 
    Large >500.............................           11           7,823          819          711         0.001
    All Mines..............................         2661       1,892,416       19,508          711          .01 
M/NM MINES:                                                                                                     
    Small <20..............................         9238         584,462       11,929           63         0.005
    Large >=20.............................         1543          97,558       26,071           63         0.000
    Small= <500............................       10,751         680,185       32,134           63         0.002
    Large >500.............................           29           1,835        5,866           63         0.000
    All Mines..............................       10,780         682,020       38,000           63         0.002
----------------------------------------------------------------------------------------------------------------

    In determining revenues for coal mines, MSHA multiplied coal 
production data (in tons) for mines in specific size categories 
(reported to MSHA quarterly) by the average price per ton for coal as 
determined in the Coal Industry Annual 1996. (Published by the 
Department of Energy's Energy Information Administration.) MSHA 
obtained revenue data for metal and nonmetal mines from the Mineral 
Commodities Summaries 1996. (Published by the U.S. Department of the 
Interior.)

VI. 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 final rule 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 final rule does not significantly or 
uniquely affect these entities.
    Analysis. Based on the analysis in the Agency's Final Regulatory 
Impact Statement, the cost of this final rule is estimated to be about 
$2.6 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 final rule. The final rule 
will impact about 2,700 coal operations and 10,800 metal and nonmetal 
mining operations of which approximately 350 sand and gravel or crushed 
stone operations are run by state, local, or tribal governments for the 
construction and repair of highways and roads. Of these entities, only 
those which are assessed a civil penalty will incur additional costs 
related to this final rule. These costs, however, would be minimal. 
Notwithstanding this conclusion, MSHA will mail a copy of the final 
rule to these 350 entities.

VII. Executive Order 13045

    In accordance with Executive Order 13045, MSHA has evaluated the 
environmental health or safety effects of the rule on children. The 
Agency has determined that the final rule will have no effects on 
children.

List of Subjects in 30 CFR Part 100

    Mine safety and health, Penalties.


[[Page 20035]]


    Dated: April 15, 1998.
J. Davitt McAteer,
Assistant Secretary for Mine Safety and Health.

    Part 100, subchapter P, chapter I, title 30 of the Code of Federal 
Regulations is amended 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, 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 Mine 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
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.
    (1) 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).
    (2) 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 paragraphs (a) through 
(h) as paragraphs (a)(1) through (8); redesignating the introductory 
text as paragraph (a) and the 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 Sec. 104(a) of the 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. 98-10688 Filed 4-21-98; 8:45 am]
BILLING CODE 4510-43-P