[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]
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