[Federal Register Volume 68, Number 27 (Monday, February 10, 2003)]
[Rules and Regulations]
[Pages 6609-6613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3160]


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DEPARTMENT OF LABOR

Mine Safety and Health Administration

30 CFR Part 100

RIN 1219-AB32


Criteria and Procedures for Proposed Assessment of Civil 
Penalties

AGENCY: Mine Safety and Health Administration (MSHA), Labor.

ACTION: Direct final rule.

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SUMMARY: The Mine Safety and Health Administration (MSHA) is revising 
its civil penalty assessment amounts to adjust for inflation. The Debt 
Collection Improvement Act of 1996 (DCIA) requires MSHA to adjust all 
civil penalties for inflation at least once every four years according 
to the formula specified in the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Inflation Adjustment Act). MSHA intends that 
this action will maintain the deterrent effect of its civil penalties 
and encourage compliance with the Federal Mine Safety and Health Act of 
1977 (Mine Act) and its regulations. The revised penalties apply to 
citations and orders issued on or after the effective date, and not to 
citations or orders pending assessment on the effective date.

DATES: This direct final rule is effective April 11, 2003 without 
further notice, unless we (MSHA) receive significant adverse comment by 
March 12, 2003.

ADDRESSES: Clearly identify comments as such and submit them either 
electronically to [email protected]; by facsimile to (202) 693-9441; or 
by regular mail or hand delivery to MSHA, Office of Standards, 
Regulations, and Variances, 1100 Wilson Blvd., Room 2313, Arlington, 
Virginia 22209-3939. Comments are posted for public viewing at http://www.msha.gov/currentcomments.htm.

FOR FURTHER INFORMATION CONTACT: Marvin W. Nichols, Director; Office of 
Standards, Regulations, and Variances, MSHA; Phone: (202) 693-9440; 
FAX: (202) 693-9441; E-mail: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Direct Final Rule

    The Debt Collection Improvement Act of 1996 requires MSHA to adjust 
our

[[Page 6610]]

civil penalties for inflation at least once every four years. MSHA has 
determined that this rulemaking is suitable for a direct final rule 
because we do not expect to receive any significant adverse comments. A 
significant adverse comment is one that explains why the rule is 
inappropriate, including challenges to the rule's underlying premise or 
approach, or why it will be ineffective or unacceptable without a 
change. In determining whether a comment necessitates withdrawal of 
this direct final rule, we will consider whether it warrants a 
substantive response in a notice and comment process. If we receive 
such comment, we will publish a timely withdrawal of this direct final 
rule in the Federal Register.

II. Rulemaking Background

    Sections 105(a) and 110 of Mine Act require us (MSHA) to propose a 
civil penalty assessment for each violation of the Mine Act or a 
mandatory safety and health standard promulgated under the Mine Act. 
The Mine Act originally provided that--
    (1) The maximum penalty for each violation would not exceed 
$10,000;
    (2) 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; 
and
    (3) The maximum penalty for a miner who willfully violates the 
mandatory safety standards relating to smoking or the carrying of 
smoking materials would not exceed $250 for each occurrence of such 
violation.
    On May 30, 1978 (43 FR 23514), MSHA promulgated its first 
regulations relating to civil penalty assessments under the Mine Act. 
These regulations 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--
    (1) Revised its regular assessment Penalty Conversion Table;
    (2) Further defined the criteria for issuing special assessments; 
and
    (3) 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.
    Neither the 1978 nor the 1982 rule contained provisions addressing 
assessment of civil penalties for failing to abate violations of the 
Mine Act or for smoking or carrying smoking materials because the Mine 
Act had set these penalty amounts.
    In 1990, the Omnibus Budget Reconciliation Act of 1990 (Budget 
Act), Pub. L. 101-508, amended the Mine Act. Section 3102 of the Budget 
Act raised the maximum MSHA civil penalty per violation from $10,000 to 
$50,000; and raised the civil penalty for failure to correct a 
violation under Sec.  104(a) of the Mine Act from $1,000 to $5,000 per 
day. The miner smoking penalty remained at $250. Also in 1990, Congress 
passed the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Inflation Adjustment Act), Pub. L. 101-410, amending the Budget Act.
    On January 24, 1992 (57 FR 2968), as amended December 21, 1992 (57 
FR 60690), MSHA published a final rule which implemented the penalty 
increases prescribed by the Budget Act and accounted for inflation 
since 1982. The rule revised the regular assessment Penalty Conversion 
Table and raised the $20 single penalty assessment to $50.
    In 1996, Congress passed the Omnibus Consolidated Rescissions and 
Appropriations Act of 1996 (OCRAA), Pub. L. 104-134. Chapter 10 of the 
OCRAA, titled the ``Debt Collection Improvement Act of 1996'' (DCIA), 
modified the Inflation Adjustment Act. The DCIA requires each agency to 
adjust for inflation each civil monetary penalty provided for by law 
within its jurisdiction at least once every four years. Agencies must 
make this cost-of-living adjustment using the inflation adjustment 
formula described under Sec.  5 of the Inflation Adjustment Act. 
Although the first adjustment was not allowed to exceed 10% of the 
existing penalty, subsequent adjustments are not subject to this 
limitation.
    On April 22, 1998 (63 FR 20032), MSHA published a final rule 
increasing civil penalties to comply with the DCIA. To account for 
inflation since 1992, this rule raised the maximum proposed civil 
penalty assessment from $50,000 to $55,000, raised the single penalty 
assessment from $50 to $55, and revised the Penalty Conversion Table. 
This rule also codified the penalties assessed under Sec. Sec.  110(b) 
and 110(g) of the Mine Act into 30 CFR 100, raising the daily penalty 
for failing to abate violations from $5,000 to $5,500 and raising the 
penalty for smoking or carrying smoking materials from $250 to $275.

III. Discussion and Summary of the Direct Final Rule

A. General Discussion

    In passing the Inflation Adjustment Act, Congress stated its 
concern that the punitive and deterrent effects of civil penalties 
erode over time when the penalties fail to keep pace with inflation. 
This direct final rule makes a cost-of-living adjustment to MSHA's 
proposed civil penalty assessment amounts in compliance with the 
Inflation Adjustment Act. Under Sec.  5 of the Inflation Adjustment 
Act, 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--
    (1) the Consumer Price Index for the month of June of the calendar 
year preceding the adjustment, exceeds;
    (2) 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 pursuant to law.
    The term Consumer Price Index (CPI) means ``the Consumer Price 
Index for all-urban consumers published by the Department of Labor.''
    In determining the current cost-of-living adjustment for its 
proposed civil penalty assessments, MSHA calculated the following:

538.9.0 (the CPI for June 2002, the calendar year preceding the current 
adjustment).
488.2 (the CPI for June 1998, the calendar year in which the MSHA civil 
penalties were last adjusted).
10.4% = (538.9-488.2)/488.2 = rounded inflation adjustment factor = 
percentage increase.

    The Inflation Adjustment Act also included criteria for rounding 
the cost-of-living adjustment amount as follows:

Any increase * * * shall be rounded to the nearest--

    (1) Multiple of $10 in the case of penalties less than or equal to 
$100;
    (2) Multiple of $100 in the case of penalties greater than $100 but 
less than or equal to $1,000;
    (3) multiple of $1,000 in the case of penalties greater than $1,000 
but less than or equal to $10,000;
    (4) multiple of $5,000 in the case of penalties greater than 
$10,000 but less than or equal to $100,000;
    The Inflation Adjustment Act only requires us to use the cost-of-
living adjustment and rounding formula for penalties that were 
statutorily established by Congress. The Mine Act contains only three 
such penalties: the civil maximum penalty, the daily maximum penalty, 
and the miner smoking penalty. Consequently, this direct final rule 
adjusts our regulatory penalties, those not established by the Mine 
Act, by 10.4% truncated to the whole dollar.

[[Page 6611]]

B. Section-by-Section Analysis

    The following discussion explains the direct final rule's effect on 
existing civil penalty amounts.
Section 100.3 Determination of Penalty Amount; Regular Assessment
    This section describes the criteria that MSHA will use to determine 
the proposed civil penalty assessment for violations of the Mine Act or 
regulations promulgated under the Mine Act.
    Paragraph (a) of this section specifies the maximum per violation 
proposed civil penalty assessment. This direct final rule increases the 
maximum civil penalty by $5,000 from $55,000 to $60,000, reflecting the 
10.4% adjustment as calculated in accordance with the Inflation 
Adjustment Act. Because the Mine Act originally required this penalty, 
we have rounded the increase to $5,000 in accordance with the Inflation 
Adjustment Act rounding requirements.
    Paragraph (g) of this section includes a Penalty Conversion Table 
that correlates the total of the points assigned for each criterion 
enumerated in this section with a proposed civil penalty assessment. 
Current penalties range from $66 to $55,000. The increased civil 
penalties in the Penalty Conversion Table range from $72 to $60,000 to 
reflect a 10.4% adjustment factor. Because the Mine Act originally did 
not require these penalties, with the exception of the maximum civil 
penalty, we have truncated the adjusted penalty to the nearest whole 
dollar.
Section 100.4 Determination of Penalty; Single Penalty Assessment
    This section pertains to violations that are not reasonably likely 
to result in reasonably serious injury or illness and which are abated 
in a timely manner. This direct final rule increases the single penalty 
assessment by $5 from the existing $55 to $60 to reflect a 10.4% 
adjustment factor. Because the Mine Act originally did not require this 
penalty, we have truncated the adjusted penalty to the nearest whole 
dollar.
Section 100.5 Determination of Penalty; Special Assessment
    This section pertains to violations, which are of such a nature or 
seriousness that we cannot determine an appropriate penalty using the 
regular assessment formula (Sec.  100.3) or the single penalty 
assessment (Sec.  100.4). MSHA field personnel review certain 
categories of violations for special assessment. If the violation 
qualifies, experienced MSHA mine safety and health specialists 
determine the special assessment penalty based on the facts and 
circumstances of each case.
    Paragraph (c) of this section addresses penalties which may be 
assessed daily to an operator for failure to correct a violation within 
the period permitted for its correction. This direct final rule 
increases the existing maximum daily civil penalty by $1,000 from 
$5,500 to $6,500 to reflect the 10.4% adjustment factor computed under 
the Inflation Adjustment Act. Because the Mine Act originally required 
this penalty, we have rounded the increase to $1,000 in accordance with 
the Inflation Adjustment Act rounding requirements.
    Paragraph (d) of this section addresses penalties for miners who 
willfully violate mandatory safety standards relating to the use or 
carrying of smoking materials underground. This direct final rule keeps 
the miner's smoking penalty at $275. Because the Mine Act originally 
required this penalty, we have rounded the increase to $0 (the nearest 
$100) in accordance with the Inflation Adjustment Act rounding 
requirements.

IV. Executive Order 12866, the Regulatory Flexibility Act, and the 
Small Business Regulatory Enforcement Fairness Act

    In accordance with Executive Order (E.O.) 12866, we have analyzed 
the estimated costs and benefits associated with the revisions of Part 
100--Criteria and Procedures for Proposed Assessment of Civil 
Penalties. We estimate that the direct final rule will result in 
increased costs to the mining industry of about $2.5 million annually, 
which is not an economically significant regulatory action under Sec.  
3(f)(1) of E.O. 12866.
    In accordance with Sec.  605 of the Regulatory Flexibility Act 
(RFA), we certify that this direct final rule does not have a 
significant economic impact on a substantial number of small entities. 
Under the Small Business Regulatory Enforcement Fairness Act (SBREFA) 
amendments to the RFA, we must include the factual basis for this 
certification in the direct final rule. Accordingly, we are publishing 
a summary of the factual basis for our regulatory flexibility 
certification statement in the Federal Register, as part of this 
preamble, and are providing a copy to the Small Business Administration 
(SBA), Office of Advocacy. We also will mail a copy of the direct final 
rule, including the preamble and certification statement, to mine 
operators and miners' representatives and post it on our Internet Home 
Page at www.msha.gov.
    This direct final rule increases certain civil monetary penalties 
to account for inflation, as required by the Federal Civil Penalties 
Inflation Adjustment Act of 1990, as amended. This statute specifies 
the procedure for calculating the adjusted civil monetary penalties and 
does not allow us to vary the calculation to minimize the effect on 
small entities. Moreover, the actual amount of the increase in 
penalties does not meet the threshold for a significant regulatory 
action, which is set forth in the RFA. We discuss our quantitative 
analysis supporting this conclusion below.
    Factual basis for certification. Traditionally, MSHA has considered 
a small mine to be one with fewer than 20 employees. The SBA definition 
for a small business in the mining industry is one with 500 or fewer 
employees. For the purpose of this certification, we have analyzed the 
costs and evaluated the impact of this direct final rule on mines using 
both MSHA's traditional definition and SBA's definition for a small 
mine.
    We analyzed the impact of this direct final rule separately for the 
two major sectors of the mining industry: coal mining operations and 
metal/nonmetal mining operations. We compared the costs of the direct 
final rule in each sector to the revenues for each sector for each size 
category analyzed. In each case, the results indicated that the costs 
were much less than 1% of revenue.
    In determining revenues for coal mines, we 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 2000 (U.S. Department of Energy, 
Energy Information Administration). We obtained revenue data for metal 
and nonmetal mines from the Mineral Commodities Summaries 2001 (U.S. 
Department of the Interior, Geological Survey).
    The following table summarizes the results of our analysis.

[[Page 6612]]



                                     Costs Compared to Revenues by Mine Size
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                                                                     Estimated                        Cost as
     Mine size (employment)          Number of    Estimated cost      revenue     Estimated cost/   percent of
                                       mines          of rule       (millions)         mine           revenue
----------------------------------------------------------------------------------------------------------------
                                                   Coal Mines
----------------------------------------------------------------------------------------------------------------
Small <20.......................           1,078        $720,498            $586            $668          0.123%
Small <=500.....................           1,901       1,270,563          15,093             668          0.008%
---------------------------------
                                         Metal and Nonmetal (M/NM) Mines
----------------------------------------------------------------------------------------------------------------
Small <20.......................           9,928       1,002,761           8,377             101          0.012%
Small <=500.....................          11,620       1,173,659          36,802             101          0.003%
----------------------------------------------------------------------------------------------------------------

    The full economic analysis, including the factual basis for our 
regulatory flexibility certification statement, is provided in the 
Regulatory Economic Analysis (REA) supporting this direct final rule. 
The REA is available from MSHA, Office of Standards, Regulations, and 
Variances, 1100 Wilson Blvd., Room 2313, Arlington, Virginia 22209-
3939. You can also view and obtain a copy from our Internet Home Page 
at www.msha.gov.

V. Other Regulatory Considerations

A. Paperwork Reduction Act of 1995

    This direct final rule contains no information collections subject 
to review by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act.

B. Unfunded Mandates Reform Act of 1995

    This direct final rule affects about 220 small mines operated by 
governmental jurisdictions to provide aggregates for the construction 
and repair of highways and roads. We have determined, for purposes of 
Sec.  202 of the Unfunded Mandates Reform Act of 1995, that this direct 
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. We also determined, for 
purposes of Sec.  203, that this direct final rule does not 
significantly or uniquely affect these entities.

C. Executive Order 12630: Government Actions and Interference with 
Constitutionally Protected Property Rights

    This direct final rule is not subject to Executive Order 12630 
because it does not involve implementation of a policy with takings 
implications.

D. Executive Order 12988: Civil Justice Reform

    We have reviewed Executive Order 12988 and determined that this 
direct final rule will not unduly burden the Federal court system. We 
wrote the direct final rule to provide a clear legal standard for 
affected conduct and have reviewed it carefully to eliminate drafting 
errors and ambiguities.

E. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    In accordance with Executive Order 13045, we have evaluated the 
environmental health and safety effects of this rule on children and 
have determined that it will have no effects on children.

F. Executive Order 13132: Federalism

    We have reviewed this rule in accordance with Executive Order 13132 
regarding federalism, and have determined that it will not have 
federalism implications.

G. Executive Order 13175: Consultation and Coordination with Indian 
Tribal Governments

    We certify that the direct final rule does not impose substantial 
direct compliance costs on Indian tribal governments.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    In accordance with Executive Order 13211, we have reviewed the 
direct final rule for its energy impacts. The direct final rule has no 
effect on the distribution or use of energy. The only impact of the 
rule on the supply of energy is through its effect on the price of coal 
or the production of coal. Impacts of the rule on metal and nonmetal 
mines do not affect the supply of energy.
    The final rule has no direct effects on the production of coal. The 
rule does not prevent the mining of particular coal deposits, nor does 
the rule require coal deposits to be mined at a slower pace. The only 
impact of the rule on coal mine production is indirect, via the cost or 
price of coal. The estimated annual cost of the final rule for the coal 
mining industry is about $1.3 million. The annual revenues of the coal 
mining industry in 2000 were about $17,700 million. The cost of the 
rule for the coal mining industry is, therefore, equal to about 0.007% 
of revenues. Even if we were to suppose that the increased cost caused 
by the rule would be fully reflected in coal prices, the impact would 
be negligible.
    Accordingly, we have determined that the direct final rule has no 
significant adverse effect on the supply, distribution, or use of 
energy, and no reasonable alternatives to this action are necessary.

I. Executive Order 13272: Proper Consideration of Small Entities in 
Agency Rulemaking

    In accordance with Executive Order 13272, MSHA has thoroughly 
reviewed the direct final rule to assess and take appropriate account 
of its potential impact on small businesses, small governmental 
jurisdictions, and small organizations. As discussed previously in this 
preamble, MSHA has determined that the direct final rule does not have 
a significant economic impact on a substantial number of small 
entities.

List of Subjects in 30 CFR Part 100

    Mine safety and health, Penalties.

    Dated: February 4, 2003.
Dave D. Lauriski,
Assistant Secretary for Mine Safety and Health.

    For the reasons set out in the preamble, and under the authority of 
the Federal Mine Safety and Health Act of 1977, chapter I, subchapter 
P, part 100 of title 30 of the Code of Federal Regulations is amended 
as follows:

[[Page 6613]]

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 first sentence of the 
introductory text of paragraph (a) and by revising the Penalty 
Conversion Table in 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 $60,000. * * *
* * * * *
    (g) * * *

                        Penalty Conversion Table
------------------------------------------------------------------------
                                                                Penalty
                            Points                                ($)
------------------------------------------------------------------------
20 or fewer..................................................         72
21...........................................................         80
22...........................................................         87
23...........................................................         94
24...........................................................        101
25...........................................................        109
26...........................................................        120
27...........................................................        131
28...........................................................        142
29...........................................................        153
30...........................................................        164
31...........................................................        178
32...........................................................        193
33...........................................................        207
34...........................................................        221
35...........................................................        237
36...........................................................        254
37...........................................................        273
38...........................................................        291
39...........................................................        310
40...........................................................        327
41...........................................................        354
42...........................................................        383
43...........................................................        409
44...........................................................        437
45...........................................................        463
46...........................................................        500
47...........................................................        536
48...........................................................        629
49...........................................................        749
50...........................................................        878
51...........................................................      1,033
52...........................................................      1,198
53...........................................................      1,376
54...........................................................      1,566
55...........................................................      1,769
56...........................................................      2,003
57...........................................................      2,252
58...........................................................      2,515
59...........................................................      2,793
60...........................................................      3,086
61...........................................................      3,419
62...........................................................      3,770
63...........................................................      4,137
64...........................................................      4,521
65...........................................................      4,856
66...........................................................      5,099
67...........................................................      5,342
68...........................................................      5,585
69...........................................................      5,828
70...........................................................      6,071
71...........................................................      6,374
72...........................................................      6,678
73...........................................................      6,981
74...........................................................      7,285
75...........................................................      7,588
76...........................................................      7,892
77...........................................................      8,499
78...........................................................      9,106
79...........................................................      9,713
80...........................................................     10,321
81...........................................................     11,535
82...........................................................     12,749
83...........................................................     13,963
84...........................................................     15,177
85...........................................................     16,392
86...........................................................     18,213
87...........................................................     20,642
88...........................................................     23,070
89...........................................................     25,498
90...........................................................     27,927
91...........................................................     30,355
92...........................................................     33,391
93...........................................................     36,427
94...........................................................     39,462
95...........................................................     42,498
96...........................................................     45,533
97...........................................................     48,569
98...........................................................     51,605
99...........................................................     54,640
100..........................................................     60,000
------------------------------------------------------------------------

* * * * *

    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 $60 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 $60 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 
paragraph (b) of this section, the violation will not be eligible for 
the $60 single penalty and will be processed through the regular 
assessment provision (Sec.  100.3).
* * * * *

    4. Section 100.5 is amended by revising paragraph (c) 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 $6,500 for each day during which such failure or 
violation continues.
* * * * *
[FR Doc. 03-3160 Filed 2-7-03; 8:45 am]
BILLING CODE 4510-43-P