[Federal Register Volume 71, Number 174 (Friday, September 8, 2006)]
[Proposed Rules]
[Pages 53054-53075]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-7512]


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DEPARTMENT OF LABOR

Mine Safety and Health Administration

30 CFR Part 100

RIN 1219-AB51


Criteria and Procedures for Proposed Assessment of Civil 
Penalties

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

ACTION: Proposed rule.

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SUMMARY: The Mine Safety and Health Administration (MSHA) is proposing 
to amend its civil penalty regulations to increase penalty amounts and 
to implement new requirements of the Mine Improvement and New Emergency 
Response (MINER) Act of 2006 amendments to the Mine Safety and Health 
Act of 1977 (Mine Act). In addition, MSHA is proposing to revise 
procedures for proposing civil monetary penalties to improve the 
efficiency and effectiveness of the civil penalty process. These 
changes are intended to induce greater mine operator compliance with 
the Mine Act and MSHA's safety and health standards and regulations, 
thereby improving safety and health for miners.

DATES: MSHA must receive comments on or before October 23, 2006. MSHA 
will hold six public hearings on September 26, 2006, September 28, 
2006, October 4, 2006, October 6, 2006, October 17, 2006, and October 
19, 2006. Details about the public hearings are in the SUPPLEMENTARY 
INFORMATION section of this document.

ADDRESSES: Comments must be clearly identified with as such and may be 
sent to MSHA by any of the following methods:
    (1) Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the instructions for submitting comments.
    (2) Electronic mail: [email protected]. Include ``RIN 1219-
AB51'' in the subject line of the message.
    (3) Telefax: (202) 693-9441. Include ``RIN 1219-AB51'' in the 
subject.
    (4) Regular Mail: MSHA, Office of Standards, Regulations, and 
Variances, 1100 Wilson Blvd., Room 2350, Arlington, Virginia 22209-
3939.
    (5) Hand Delivery or Courier: MSHA, Office of Standards, 
Regulations, and Variances, 1100 Wilson Blvd., Room 2350, Arlington, 
Virginia 22209-3939. Stop by the 21st floor and sign in at the 
receptionist's desk.
    Docket: Comments can be accessed electronically at www.msha.gov 
under the ``Rules and Regs'' link. MSHA will post all comments on the 
Internet without change, including any personal information provided. 
Comments may also be reviewed at the Office of Standards, Regulations, 
and Variances, 1100 Wilson Blvd., Room 2350, Arlington, Virginia.
    MSHA maintains a listserv that enables subscribers to receive e-
mail notification when rulemaking documents are published in the 
Federal Register. To subscribe to the listserv, go to http://www.msha.gov/subscriptions/subscribe.aspx.
    Hearings: Locations of the public hearings are in the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Patricia W. Silvey, Acting Director, 
Office of Standards, Regulations, and Variances, MSHA, 1100 Wilson 
Blvd, Room 2350, Arlington, Virginia 22209-3939, 
[email protected] (e-mail), (202) 693-9440 (voice), or (202) 693-
9441 (telefax).

SUPPLEMENTARY INFORMATION: 

Outline:
I. Public Hearings
II. Background
    A. General
    B. Rulemaking History
III. Discussion and Analysis of Proposed Changes to Part 100
    A. General Discussion
    B. Section-by-Section Analysis
IV. Executive Order 12866
    A. Population at Risk
    B. Costs
    C. Benefits
V. Feasibility
    A. Technological Feasibility
    B. Economic Feasibility
VI. Regulatory Flexibility Act and Small Business Regulatory 
Enforcement Fairness Act (SBREFA)
    A. Definition of Small Mine
    B. Factual Basis for Certification
VII. Paperwork Reduction Act of 1995
VIII. Other Regulatory Considerations
    A. The Unfunded Mandates Reform Act of 1995
    B. Treasury and General Government Appropriations Act of 1999: 
Assessment of Federal Regulations and Policies on Families
    C. Executive Order 12630: Government Actions and Interference 
With Constitutionally Protected Property Rights
    D. Executive Order 12988: Civil Justice Reform
    E. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments

I. Public Hearings

    MSHA will hold six public hearings on the proposed rule. The 
hearings will begin at 9 a.m., and will be held on the following dates 
and locations:

[[Page 53055]]



------------------------------------------------------------------------
             Date                      Location              Phone
------------------------------------------------------------------------
September 26, 2006............  Mine Safety and           (202) 693-9440
                                 Health
                                 Administration, 1100
                                 Wilson Blvd, 25th
                                 Floor, Conference
                                 Room, Arlington,
                                 Virginia 22209.
September 28, 2006............  Sheraton Birmingham,      (205) 324-5000
                                 2101 Richard
                                 Arrington Jr. Blvd.,
                                 North Birmingham,
                                 Alabama 35203.
October 4, 2006...............  Hilton Salt Lake City     (801) 238-2999
                                 Center, 255 South
                                 West Temple, Salt
                                 Lake City, Utah
                                 84101.
October 6, 2006...............  Hilton St. Louis          (800) 314-2117
                                 Airport, 10330
                                 Natural Bridge Road,
                                 St. Louis, Missouri
                                 63134.
October 17, 2006..............  Charleston Marriott       (304) 345-6500
                                 Town Center, 200 Lee
                                 Street East,
                                 Charleston, West
                                 Virginia 25301.
October 19, 2006..............  Pittsburgh Airport        (412) 490-6602
                                 Marriott, 777 Aten
                                 Road, Coraopolis,
                                 Pennsylvania 15108.
------------------------------------------------------------------------

    Requests to speak at a hearing should be made at least five days 
prior to the hearing dates. Requests to speak may be made by telephone 
(202-693-9440), telefax (202) 693-9441, or mail (MSHA, Office of 
Standards, Regulations, and Variances, 1100 Wilson Blvd., Rm. 2350, 
Arlington, Virginia 22209-3939). Any unallocated time at the hearings 
will be made available to persons making same-day requests to speak.
    The hearings will begin with an opening statement from MSHA, 
followed by an opportunity for members of the public to make oral 
presentations to a hearing panel. Speakers will be assigned in the 
order in which their requests are received. Speakers and other 
attendees may present written information or other articles to the MSHA 
panel for inclusion in the rulemaking record.
    The hearings will be conducted in an informal manner. The hearing 
panel may ask questions of speakers. Formal rules of evidence and cross 
examination will not apply. The presiding official may limit 
presentations and exclude irrelevant or unduly repetitious material and 
questions to ensure the orderly progress of the hearings.
    Transcripts of the hearings will be included in the rulemaking 
record. Copies of the transcripts will be available to the public, and 
can be viewed at http://www.msha.gov.
    MSHA will accept post-hearing written comments and other 
appropriate data for the record from any interested party, including 
those not presenting oral statements. Comments must be received at MSHA 
no later than October 23, 2006.

II. Background

A. General

    The Mine Act requires MSHA to issue citations or orders to mine 
operators for any violations of a mandatory health or safety standard, 
rule, order, or regulation promulgated under the Mine Act. Upon issuing 
a citation, the Secretary's authorized representative (inspector) 
specifies a time for the violation to be abated. If the operator does 
not abate the condition within the allowed time, the inspector may 
extend the time to abate or issue an order requiring all persons to be 
withdrawn from the area affected by the violation until the violation 
is abated. The Mine Act further requires assessment of civil monetary 
penalties for violations. Sections 105 and 110 of the Mine Act provide 
for the assessment of these penalties. The following six criteria in 
section 110(i) of the Mine Act are used to assess civil monetary 
penalties:
    (1) The appropriateness of the penalty to the size of the business 
of the operator charged;
    (2) The operator's history of previous violations;
    (3) Whether the operator was negligent;
    (4) The gravity of the violation;
    (5) The demonstrated good faith of the operator charged in 
attempting to achieve rapid compliance after notification of a 
violation; and
    (6) The effect of the penalty on the operator's ability to continue 
in business.
    MSHA proposes a civil penalty assessment for each violation. Upon 
receipt of the proposed assessment, the mine operator or other person 
has 30 days to contest the assessment before the Federal Mine Safety 
and Health Review Commission (Commission), an independent adjudicatory 
agency established under the Mine Act. A proposed assessment that is 
not contested within 30 days becomes a final order of the Commission by 
operation of law and will not be subject to review by any court or 
agency. A proposed assessment that is contested before the Commission 
is reviewed by the Commission de novo.

B. Rulemaking History

    On May 30, 1978, MSHA published its first final rule pertaining to 
the proposed assessment of civil penalties under the Mine Act for both 
coal mines and metal and nonmetal mines (47 FR 22286). The maximum 
civil penalty that MSHA could assess under the Mine Act at that time 
was $10,000.
    The 1978 rule consisted of a two-tiered system of assessing 
proposed penalties under either a regular assessment or a special 
assessment. Since 1978, MSHA has revised its civil penalty regulations 
in 30 CFR part 100 essentially to: (1) Add a single penalty assessment 
provision; (2) change the assessment process to conform to a court 
order concerning history of violations; (3) increase penalty amounts 
due to legislative action; and (4) change penalty amounts and processes 
due to other compelling circumstances.
    Under the existing regulations, MSHA proposes penalties using a 
three-tiered process: (1) Regular assessments; (2) single penalty 
assessments; and (3) special assessments. The maximum civil penalty 
assessment is $60,000. The single penalty assessment is $60. The 
maximum daily civil penalty which may be assessed for failure to 
correct a violation within the time permitted is $6,500 and the maximum 
penalty for smoking or carrying smoking materials underground is $275.

III. Discussion and Analysis of Proposed Changes to Part 100

A. General Discussion

    MSHA is proposing to revise its procedures for assessing proposed 
civil penalties to update and increase penalties for violations of the 
standards and regulations promulgated under the Mine Act and to 
implement new civil penalty requirements in the MINER Act (Pub. L. 109-
236). These new requirements address civil penalties related to prompt 
incident notification, and flagrant and unwarrantable violations. In 
accordance with MINER Act requirements, citations and orders issued on 
or after June 16, 2006, will be subject to the minimum penalties 
specified in the Act for violations involving failure to promptly 
notify MSHA within 15 minutes and unwarrantable failure.
    The intended purpose of civil penalties under the Mine Act is to 
``convince operators to comply with the Act's requirements.'' (S. Rep. 
No. 181, 95th Cong., 1st Sess. 45 (1977),

[[Page 53056]]

reprinted in Senate Subcommittee on Labor, Committee on Human 
Resources, 95th Cong., 2d Sess., Legislative History of the Federal 
Mine Safety and Health Act of 1977, at 633 (1978)). The Congress 
intended that the imposition of civil penalties would induce mine 
operators to be proactive in their approach to mine safety and health, 
and take necessary action to prevent safety and health hazards before 
they occur. In this proposal, the Agency is strengthening the civil 
penalty assessment regulations which will be an important tool in the 
reduction of fatalities and improvement in miner safety and health.
    Under MSHA's existing procedures, a civil penalty can be assessed 
under the single penalty provision, the regular assessment provision, 
or the special assessment provision. The single penalty provision is 
applied to most violations that are not reasonably likely to result in 
a reasonably serious injury or illness (non-Significant and 
Substantial, or non-S&S) and that are abated in a timely manner, 
provided the operator does not have an excessive history of violations. 
The single penalty assessment is currently $60.
    The regular assessment is used to address most S&S violations, 
i.e., those that are reasonably likely to result in a reasonably 
serious injury or illness. Under the regular assessment provision, 
penalty points are assigned based on five statutory criteria: 
Operator's size, history, negligence, demonstrated good faith towards 
abatement, and the gravity of the violation. The total points are then 
converted into a dollar amount. The resulting amount constitutes the 
proposed penalty unless, under the sixth statutory criterion, the 
operator shows that the penalty would adversely affect its ability to 
continue in business. Currently, the minimum regular assessment is $72 
and the maximum regular assessment is $60,000 for each violation.
    Under the existing rule, MSHA reviews eight categories of 
violations for special assessment--those associated with fatalities as 
well as those associated with other aggravating circumstances. These 
are violations that MSHA believes, because of the particular 
circumstances surrounding the violation, should not be processed as a 
single penalty or regular assessment. The maximum special assessment is 
currently $60,000.
    MSHA reviewed the history of violations and penalty assessments at 
mines which have experienced fatal accidents recently. At these mines, 
MSHA found repeated violations of several standards for which the $60 
single penalty was assessed. MSHA also reviewed violations at all 
mines. The number of citations for violations of MSHA's standards and 
regulations has been on the rise since 2003. Specifically, the number 
of all violations assessed increased from 103,404 in 2003 to 116,731 in 
2005. The number of violations that received a single penalty 
assessment increased from 69,078 in 2003 to 75,394 in 2005; the number 
of violations that received a regular assessment increased from 32,608 
in 2003 to 37,968 in 2005; and the number of violations that received a 
special assessment increased from 1,718 in 2003 to 3,369 in 2005.
    MSHA is proposing to revise the civil penalty assessment process so 
that proposed penalties will increase proportionately to increases in 
operator size, history, and negligence and the gravity or seriousness 
of the violation. To accomplish this, the proposed rule would:
    (1) Reformulate the existing process of assigning points under the 
regular assessment provision;
    (2) Add a provision in an operator's history addressing repeat 
violations;
    (3) Delete the existing single penalty assessment provision;
    (4) Revise the penalty conversion table by increasing the dollar 
value of each point assigned under the regular assessment provision;
    (5) Remove the limit on types of violations that MSHA will review 
for possible special assessment by removing the list of specific 
categories;
    (6) Shorten the time allowed to request a conference; and
    (7) Implement new requirements of the MINER Act.
    MSHA is proposing to delete the single penalty assessment 
provision. MSHA has reevaluated the single penalty provision and 
believes that the proposed rule reflects a more appropriate and 
effective approach to achieving the congressional purpose with respect 
to civil monetary penalties.
    MSHA is proposing to implement new penalty requirements in the 
MINER Act for prompt incident notification and flagrant violations in 
Sec.  100.5.
    MSHA is proposing a new provision in Sec.  100.4 to implement MINER 
Act requirements related to unwarrantable failure penalties. This 
provision sets minimum penalties for any citation or order issued under 
Sec.  104(d) of the Mine Act.
    The proposed changes are intended to induce greater mine operator 
compliance with the Mine Act and MSHA's safety and health standards, 
thereby improving safety and health for miners. The proposed changes 
are described in more detail in the following section-by-section 
analysis.

B. Section-by-Section Analysis

1. Scope and Purpose (Sec.  100.1)
    Existing Sec.  100.1 would not change.
2. Applicability (Sec.  100.2)
    Existing Sec.  100.2 provides that the criteria and procedures in 
this part apply to all ``evaluations and proposed assessments of civil 
penalties.'' The proposed rule would remove the word ``evaluations'' 
because the process of proposing assessments includes evaluations. This 
proposed section contains no substantive changes.
3. Determination of Penalty; Regular Assessment (Sec.  100.3)
    a. General (Sec.  100.3(a)). Existing Sec.  100.3 establishes the 
formula to apply the statutory criteria to violations that are not 
processed under the existing single penalty assessment (Sec.  100.4) or 
special assessment (Sec.  100.5) provisions. This formula is an 
administrative mechanism used by MSHA to determine the appropriate 
penalty by applying the statutory criteria to particular facts 
surrounding a violation. Existing Sec.  100.3(a) lists the criteria 
described in Sec. Sec.  105(b)(1)(B) and 110(i) of the Mine Act. The 
proposed rule makes several editorial changes for clarification and 
ease of reading, but makes no substantive changes to this section.
    b. Appropriateness of the penalty to the size of the operator's 
business (Sec.  100.3(b)). Existing Sec.  100.3(b) contains five tables 
assigning penalty points for size of coal mines, controlling entities 
of coal mines, metal and nonmetal mines, controlling entities of metal 
and nonmetal mines, and independent contractors. The size of coal mines 
and their controlling entities is measured by the amount of coal 
production. The size of metal and nonmetal mines and their controlling 
entities is measured by the number of hours worked. The size of 
independent contractors is measured by the total number of hours worked 
by the independent contractors at all mines regardless of the commodity 
being mined.
    Existing Sec.  100.3(b) assigns up to 10 penalty points for the 
size of mines or independent contractors based on a scale which 
consists of 11 levels. In addition, up to 5 penalty points are assigned 
for the size of the controlling entity of a coal mine or a metal or 
nonmetal mine.
    MSHA is proposing editorial changes to Sec.  100.3(b) to make the 
provision easier to read. MSHA is also proposing to clarify the 
existing provision by

[[Page 53057]]

adding a statement concerning the way size of coal mines and metal and 
nonmetal mines is determined. The existing provision only states how 
the size of an independent contractor is determined. There are no 
proposed changes to the point table addressing the size of controlling 
entities.
    MSHA is proposing to increase the number of penalty points based on 
the operator's size. Tables III-1, III-2, and III-3 show both the 
existing and proposed point schedules. The maximum number of penalty 
points for size would increase from 10 to 20 to assure that the amount 
of the penalty is an appropriate economic inducement of future 
compliance by the operator. The proposed point increase is based on 
MSHA's analysis of existing size data for coal operators, metal and 
nonmetal operators, and independent contractors.
    According to the 2005 data, nearly half of the existing coal mines 
had annual tonnage of up to 15,000 tons. Slightly more than half of the 
existing metal and nonmetal mines had fewer than 10,000 annual hours 
worked. About half of independent contractors had fewer than 10,000 
annual hours worked at all mines. Consistent with existing Sec.  
100.3(b), MSHA proposes that coal mines with an annual tonnage of up to 
15,000 tons, metal and nonmetal mines with fewer than 10,000 hours 
worked, and independent contractors with fewer than 10,000 hours worked 
at all mines would all receive 0 penalty points for this criterion.
    Under the proposal, the remaining coal mines, i.e., those with 
annual tonnage levels above 15,000 tons; the remaining metal and 
nonmetal mines, i.e., those with annual hours worked above 10,000; and 
the remaining independent contractors, i.e., those with annual hours 
worked at all mines above 10,000, would receive twice as many penalty 
points as under the existing rule, up to a maximum of 20.
    The proposed size schedule would result in penalties that are, on 
average, more than twice as high at the smallest (one to five 
employees) coal mines than at metal and nonmetal mines of similar size 
and over four times higher at coal mines in the five to 19 employee 
size range than similar sized metal and non-metal mines.
    The proposed point structure in paragraph (b) is designed so that 
higher penalties would be computed for larger operations. This proposal 
is consistent with the Mine Act's requirement to consider the size of 
the operation when assessing penalties. MSHA believes penalties 
assessed under the existing regulations are often too low to be an 
effective deterrent for noncompliance at some of the largest 
operations.
    The proposal, like the existing rule, places greater emphasis on 
size of the mine than on size of the controlling entity in assigning 
penalty points. The Agency solicits comments on whether, in considering 
the size of the operator, greater weight should be placed on the size 
of the controlling entity.

         Table III-1.--Size of Coal Mine: Annual Tonnage of Mine
------------------------------------------------------------------------
                                                  Existing     Proposed
            Annual tonnage of mine                penalty      penalty
                                                   points       points
------------------------------------------------------------------------
0 to 15,000...................................            0            0
Over 15,000 to 30,000.........................            1            2
Over 30,000 to 50,000.........................            2            4
Over 50,000 to 100,000........................            3            6
Over 100,000 to 200,000.......................            4            8
Over 200,000 to 300,000.......................            5           10
Over 300,000 to 500,000.......................            6           12
Over 500,000 to 800,000.......................            7           14
Over 800,000 to 1.1 million...................            8           16
Over 1.1 million to 2 million.................            9           18
Over 2 million................................           10           20
------------------------------------------------------------------------


  Table III-2.--Size of Metal and Nonmetal Mine: Annual Hours Worked at
                                  Mine
------------------------------------------------------------------------
                                                  Existing     Proposed
          Annual hours worked at mine             penalty      penalty
                                                   points       points
------------------------------------------------------------------------
0 to 10,000...................................            0            0
Over 10,000 to 20,000.........................            1            2
Over 20,000 to 30,000.........................            2            4
Over 30,000 to 60,000.........................            3            6
Over 60,000 to 100,000........................            4            8
Over 100,000 to 200,000.......................            5           10
Over 200,000 to 300,000.......................            6           12
Over 300,000 to 500,000.......................            7           14
Over 500,000 to 700,000.......................            8           16
Over 700,000 to 1 million.....................            9           18
Over 1 million................................           10           20
------------------------------------------------------------------------


Table III-3.--Size of Independent Contractor: Annual Hours Worked at All
                                  Mines
------------------------------------------------------------------------
                                                  Existing     Proposed
       Annual hours worked at all mines           penalty      penalty
                                                   points       points
------------------------------------------------------------------------
0 to 10,000...................................            0            0
Over 10,000 to 20,000.........................            1            2
Over 20,000 to 30,000.........................            2            4

[[Page 53058]]

 
Over 30,000 to 60,000.........................            3            6
Over 60,000 to 100,000........................            4            8
Over 100,000 to 200,000.......................            5           10
Over 200,000 to 300,000.......................            6           12
Over 300,000 to 500,000.......................            7           14
Over 500,000 to 700,000.......................            8           16
Over 700,000 to 1 million.....................            9           18
Over 1 million................................           10           20
------------------------------------------------------------------------

    c. History of previous violations (Sec.  100.3(c)). Existing Sec.  
100.3(c) bases the operator's violation history on the number of 
violations received in a preceding 24-month period for which a civil 
penalty has been paid or finally adjudicated. For production operators, 
penalty points are calculated using the average number of violations 
per inspection day (VPID). For independent contractors, penalty points 
are calculated using the annual average number of violations at all 
mines in a preceding 24-month period. The proposal would add the phrase 
``or have become final orders of the Commission'' in the second 
sentence of this paragraph. The proposal would retain MSHA's intent 
that only violations which have become final be included in an 
operator's history.
    MSHA is proposing three several substantive changes to existing 
Sec.  100.3(c). First, MSHA is proposing that violation history include 
two components: (1) Paragraph (c)(1) would address the total number of 
violations; and (2) paragraph (c)(2) would address the number of repeat 
violations of the same standard. Second, an operator's or independent 
contractor's history of violations would be based on a preceding 15-
month period rather than a 24-month period. This change would apply to 
both components--overall history and repeat violations--of history. 
Third, MSHA is proposing to change the point tables for overall history 
and to add a new point table addressing repeat violations of the same 
standard. Finally, MSHA is proposing to revise the calculation that 
addresses the overall history of an independent contractor.
    MSHA is proposing to reduce the 24-month review period to a 15-
month review period because the agency believes that a period of 15 
months would more accurately reflect an operator's current state of 
compliance. This change would provide MSHA with sufficient data to 
appropriately determine an operator's compliance record, including any 
trend, even for mining operations that are inspected on a less frequent 
basis. This change would provide an incentive for improving safety and 
health to an operator that has a deteriorating safety and health record 
in the recent past.
    Proposed Sec.  100.3(c)(1) addresses the overall history of 
production operators and independent contractors. MSHA would continue 
to assign penalty points for production operators based on the number 
of assessed violations per inspection day. MSHA is proposing to 
increase the points assigned to the five highest levels of the VPID 
table. The highest level would be assigned the maximum of 25 points. 
MSHA is proposing to increase penalty points starting from the ``over 
1.3 to 1.5'' level or mid-level of the VPID table because MSHA believes 
that operators of mines with a VPID in the mid- and upper levels show 
the least concern for compliance with the Mine Act and MSHA safety and 
health standards and regulations. Higher penalties for such operators 
may encourage them to comply with the Mine Act's requirements.
    Under proposed Sec.  100.3(c)(1), production operators with fewer 
than 10 assessed violations in a preceding 15-month period would not 
receive points. This proposed provision is similar to existing Sec.  
100.4(b) pertaining to excessive history. The proposed provision takes 
into consideration small mines that may receive a low number of 
inspection days in a preceding 15-month period. In such small 
operations, even though the total number of violations may be low, the 
VPID could easily be greater than the highest 2.1 VPID level. These 
small operations, however, are not necessarily the ones which MSHA is 
targeting in this aspect of the history criterion, since such a record 
may not reflect systemic problems of noncompliance. MSHA believes that 
these small operators should not receive points under this aspect of 
this criterion.
    Under proposed Sec.  100.3(c)(1), the number of violations for 
independent contractors would no longer be based on the average number 
of assessed violations per year at all mines as it is under existing 
Sec.  100.3(c). The number of violations for independent contractors 
would be based on the total number of assessed violations at all mines 
during a preceding 15-month period. Since the Agency proposes to reduce 
the history time period from 24 to 15 months, this eliminates the need 
for an annual average. MSHA estimates that this change may result in a 
de minimis increase in the average assessment issued to independent 
contractors. The proposed point table reflects this change. MSHA 
solicits comments on this proposed approach to determining violation 
history for independent contractors, i.e., whether an annualized 
average should continue to be used. For independent contractors, MSHA 
is proposing to increase the number of penalty points for the levels 
starting with ``over 30 to 35'' and above and to increase the maximum 
number of points for this aspect of the history criterion from 20 to 
25. MSHA believes that independent contractors with a greater number of 
violations in the preceding 15-month period show the least concern for 
compliance with the Mine Act and MSHA safety and health standards and 
regulations. MSHA intends that this aspect of the history criterion 
would serve as greater inducement for such operators to comply with the 
Mine Act and MSHA's safety and health standards and regulations. MSHA 
therefore proposes to increase the points for the upper five levels of 
the number of violations. See tables III-4 and III-5 for a comparison 
of the existing and proposed penalty point scales for production 
operators and independent contractors, respectively.

[[Page 53059]]



   Table III-4.--Production Operator's Overall History of Violations:
             Average Number of Violations per Inspection Day
------------------------------------------------------------------------
                                                  Existing     Proposed
         Violations per inspection day            penalty      penalty
                                                   points       points
------------------------------------------------------------------------
0 to 0.3......................................            0            0
Over 0.3 to 0.5...............................            2            2
Over 0.5 to 0.7...............................            4            4
Over 0.7 to 0.9...............................            6            6
Over 0.9 to 1.1...............................            8            8
Over 1.1 to 1.3...............................           10           10
Over 1.3 to 1.5...............................           12           13
Over 1.5 to 1.7...............................           14           16
Over 1.7 to 1.9...............................           16           19
Over 1.9 to 2.1...............................           18           22
Over 2.1......................................           20           25
------------------------------------------------------------------------


  Table III-5.--Independent Contractor's Overall History of Violations
------------------------------------------------------------------------
                                                  Existing     Proposed
             Number of violations                 penalty      penalty
                                                   points       points
------------------------------------------------------------------------
0 to 5........................................            0            0
Over 5 to 10..................................            2            2
Over 10 to 15.................................            4            4
Over 15 to 20.................................            6            6
Over 20 to 25.................................            8            8
Over 25 to 30.................................           10           10
Over 30 to 35.................................           12           13
Over 35 to 40.................................           14           16
Over 40 to 45.................................           16           19
Over 45 to 50.................................           18           22
Over 50.......................................           20           25
------------------------------------------------------------------------

    Proposed Sec.  100.3(c)(2) would add a new component to the history 
criterion: Repeat violations of the same standard. The number of repeat 
violations of the same standard in a preceding 15-month period would be 
part of the operator's history of violations. For the purpose of 
determining repeat violations, each citable standard would be 
considered a separate ``standard.'' Repeat violations of the same 
standard would include only assessed violations of the relevant 
standard that are paid or finally adjudicated, or became final orders 
of the Commission. For example, previous assessments for violations of 
Sec.  75.202(a) would not be included in the repeat history for a 
violation of Sec.  75.202(b). Similarly, previous assessments for 
violations of Sec.  56.14101(a)(1) would not be included in the repeat 
history for a violation of Sec.  56.14101(a)(2). MSHA requests comments 
on this approach to determining repeat violations. In addition, MSHA 
solicits comments on whether, in determining penalty points for repeat 
violations of the same standard, the Agency should factor in the number 
of inspection days during which the repeat violations were cited. MSHA 
also solicits comments on whether only S&S violations should be 
considered in determining repeat violations of the same standard.
    A maximum of 20 penalty points could be assigned using this new 
component of the history criterion. MSHA is proposing this new 
provision because the Agency believes that operators who repeatedly 
violate the same standard may indicate an attitude which has little 
regard for getting to the root cause of violations of safe and 
healthful working conditions. The Agency believes that these operators 
show a lack of commitment to good mine safety and health practices by 
letting cited and corrected hazardous conditions recur.
    The analysis of assessments for the 15-month period from January 1, 
2005, through March 31, 2006 reveals that 698 of the 10,227 mines with 
violations each had at least six violations of the same standard. 
Furthermore, 99 of the 698 mines had more than twenty violations of the 
same standard during the 15 month period. MSHA believes that the Agency 
needs to adjust its civil penalty structure so that the penalties can 
more appropriately serve as a deterrent to this type of behavior, 
thereby resulting in greater compliance and more effective mine safety 
and health.
    Under proposed Sec.  100.3(c)(2), an operator with five or fewer 
repeat violations of the same standard in a preceding 15-month period 
would not receive penalty points. MSHA believes that that this new 
component of the history criterion should be applied to those operators 
who violate the same standard with a certain degree of repetition. 
Under the proposal, operators could receive a maximum of 20 penalty 
points for this aspect of the history criterion. MSHA believes that 
this new proposal will encourage greater operator compliance with the 
Mine Act and MSHA's safety and health standards and regulations, which 
is consistent with Congress' intent.
    Penalty points proposed to be assigned to the number of repeat 
violations of the same standard are presented in Table III-6.

    Table III-6.--New Table Addressing Repeat Violations of the Same
                                Standard
------------------------------------------------------------------------
                                                                Penalty
                     Number of violations                        points
------------------------------------------------------------------------
5 or fewer...................................................          0
6............................................................          1
7............................................................          2
8............................................................          3
9............................................................          4
10...........................................................          5
11...........................................................          6
12...........................................................          7
13...........................................................          8
14...........................................................          9
15...........................................................         10
16...........................................................         11
17...........................................................         12
18...........................................................         14
19...........................................................         16
20...........................................................         18
More than 20.................................................         20
------------------------------------------------------------------------

    d. Negligence (Sec.  100.3(d)). Existing Sec.  100.3(d) provides 
for evaluating the degree of negligence involved in a violation under 5 
categories: No negligence, which means that the operator exercised 
diligence and could not have known of the violative condition or 
practice; low negligence, which means that the operator knew or should 
have known of the violative condition or practice, but there are 
considerable mitigating circumstances; moderate negligence, which means 
that the operator knew or should have known of the violative condition 
or practice, but there are mitigating circumstances; high negligence, 
which means the operator knew or should have known of the violative 
condition or practice, and there are no mitigating circumstances; and 
reckless disregard, which means the operator displayed conduct which 
exhibits the absence of the slightest degree of care. An increased 
number of penalty points is assigned to the higher levels of 
negligence. The maximum number of points for negligence is 25 under 
existing Sec.  100.3(d).
    Proposed Sec.  100.3(d) would retain the existing five levels of 
negligence, but would increase the maximum number of penalty points 
from 25 to 50 so that more penalty points would be assigned to 
operators who exhibit increasingly higher levels of negligence, i.e., a 
lack of care towards protection of miners from safety and health 
hazards. Under the proposed table, points for no negligence and low 
negligence would not change. Penalty points assigned under the three 
highest levels of negligence would increase more rapidly than under the 
existing regulation. Moderate negligence would add 20 points rather 
than 15 points as under the existing regulation; high negligence would 
add 35 points rather than the 20 points under the existing regulation; 
and reckless disregard would add 50

[[Page 53060]]

points rather than 25 points as under the existing regulation.
    Table III-7 compares penalty points in existing and proposed Sec.  
100.3(d).

                        Table III-7.--Negligence
------------------------------------------------------------------------
                                                  Existing     Proposed
                  Categories                      penalty      penalty
                                                   points       points
------------------------------------------------------------------------
No negligence.................................            0            0
 (The operator exercised diligence and could
 not have known of the violative condition or
 practice.)
Low negligence................................           10           10
(The operator knew or should have known of the
 violative condition or practice, but there
 are considerable mitigating circumstances.)
Moderate negligence...........................           15           20
(The operator knew or should have known of the
 violative condition or practice, but there
 are mitigating circumstances.)
High negligence...............................           20           35
(The operator knew or should have known of the
 violative condition or practice, but there
 are mitigating circumstances.)
Reckless disregard............................           25           50
(The operator displayed conduct which exhibits
 the absence of the slightest degree of care.)
------------------------------------------------------------------------

    e. Gravity (Sec.  100.3(e)). Existing Sec.  100.3(e) uses three 
factors to measure the gravity of a violation:(1) Likelihood of 
occurrence of an event, (2) severity of injury or illness if the event 
occurred or were to occur, and (3) the number of persons potentially 
affected if the event occurred or were to occur. A maximum of 10 
penalty points may be assigned from each of the three factors, for a 
maximum of 30 points for the gravity criterion.
    Proposed Sec.  100.3(e) would retain the three measures of gravity, 
but would change the number of penalty points assigned for each. The 
maximum number of points assigned for likelihood of occurrence of an 
event would increase from 10 to 50, the maximum number of points 
assigned for severity of injury or illness would increase from 10 to 
20, and the maximum number of points assigned for the number of persons 
potentially affected would increase from 10 to 18. In addition, the 
number of categories in the Persons Potentially Affected Table would 
increase from 7 to 11. The total points that could be assigned for the 
gravity criterion would increase from 30 to 88.
    MSHA is proposing to adjust the number of penalty points that may 
be assigned under the gravity criterion to focus attention on the more 
serious mine safety and health hazards. MSHA believes that the penalty 
points in the proposed gravity tables will result in mine operators 
placing greater emphasis on correcting the more serious violations 
because they pose the greatest safety and health risk to miners. The 
proposal distinguishes the less serious violations so that they would 
receive an appropriate penalty under the regular assessment formula. 
Existing Sec.  100.3(e) has also been reworded for easier reading. 
Tables III-8 through III-10 show both the existing and the proposed 
penalty points for likelihood, gravity, and persons potentially 
affected.

                        Table III-8.--Likelihood
------------------------------------------------------------------------
                                                  Existing     Proposed
           Likelihood of occurrence               penalty      penalty
                                                   points       points
------------------------------------------------------------------------
No likelihood.................................            0            0
Unlikely......................................            2           10
Reasonably likely.............................            5           30
Highly likely.................................            7           40
Occurred......................................           10           50
------------------------------------------------------------------------


                         Table III-9.--Severity
------------------------------------------------------------------------
                                                  Existing     Proposed
  Severity of injury or illness if the event      penalty      penalty
           occurred or were to occur               points       points
------------------------------------------------------------------------
No lost work days.............................            0            0
(All occupational injuries and illnesses as
 defined in 30 CFR part 50 except those listed
 below.)
Lost work days or restricted duty.............            3            5
(Any injury or illness which would cause the
 injured or ill person to lose one full day of
 work or more after the day of the injury or
 illness, or which would cause one full day or
 more of restricted duty.)
Permanently disabling.........................            7           10
(Any injury or illness which would be likely
 to result in the total or partial loss of the
 use of any member or function of the body.)
Fatal.........................................           10           20
(Any work-related injury or illness resulting
 in death, or which has a reasonable potential
 to cause death.)
------------------------------------------------------------------------


[[Page 53061]]


               Table III-10.--Persons Potentially Affected
------------------------------------------------------------------------
 Number of persons potentially affected if the event occurred or were to
                                  occur
-------------------------------------------------------------------------
                                 Existing                      Proposed
        Existing scale            points     Proposed scale     points
------------------------------------------------------------------------
0............................           0   0..............           0
1............................           1   1..............           1
2............................           2   2..............           2
3............................           4   3..............           4
4 to 5.......................           6   4..............           6
6 to 9.......................           8   5..............           8
More than 9..................          10   6..............          10
                               ...........  7..............          12
                               ...........  8..............          14
                               ...........  9..............          16
                               ...........  10 or more.....          18
------------------------------------------------------------------------

    f. Demonstrated good faith of the operator in abating the violation 
(Sec.  100.3(f)). Existing Sec.  100.3(f) allows for a 30% reduction in 
the amount of a regular assessment where the operator abates the 
violation within the time set by the inspector. When the operator does 
not abate the violation within the time set by the inspector, 10 
penalty points are assigned.
    Proposed Sec.  100.3(f) would decrease the amount of the reduction 
from 30% to 10% where an operator abates a violation within the time 
set by the inspector. MSHA believes this is a more appropriate 
reduction because operators are required by law to timely abate 
violations.
    MSHA is also proposing to delete the existing provision which 
assigns ten additional penalty points where an operator does not abate 
the violation within the specified time period. The Mine Act provides 
two sanctions for failure to correct violations within the time set by 
the inspector: Sec.  104(b) requires a withdrawal order, which 
effectively shuts down production in the area affected, and Sec.  
110(b) allows assessment of a daily penalty.
    MSHA has reviewed the civil penalty assessment data for the last 
several years and believes that the proposed 10% good faith reduction 
is a more appropriate credit for mine operators who promptly correct 
hazardous conditions.
    g. Penalty conversion table (Sec.  100.3(g)). Existing Sec.  
100.3(g) provides the penalty conversion table used to convert total 
penalty points to a dollar amount. The existing dollar amounts range 
from $72 to $60,000, and correspond to penalty points ranging from 20 
or fewer to 100.
    Under the proposed penalty conversion table, MSHA would retain the 
statutory maximum penalty of $60,000, but would establish a new minimum 
penalty of $112. The proposed dollar amounts would correspond to 
penalty points ranging from 60 or fewer to 140.
    The proposed penalty conversion table is derived by combining two 
methods of converting points to dollars. There is a lower section (from 
60 or fewer to 133 points) and an upper section (above 133 points) of 
the proposed conversion table. The proposed table starts at $112 when 
the number of points is 60 or fewer. Each additional point above 60 up 
to 133 causes the dollar value to increase by a fixed 8.33%. The dollar 
value assigned for 133 points is $38,387. Above 133 points the dollar 
value increases by approximately $3,070 for each penalty point. The 
maximum number of points is 140 and the maximum dollar value is 
$60,000.
    When applied to MSHA's 2005 assessment data, the penalty amounts 
under the proposed conversion table increase generally as severity of 
the violation and violation history increase. Section III of this 
preamble provides data showing the increased penalty amounts under the 
proposal. Table III-12 shows the existing and the proposed penalty 
conversion tables.

  Table III-12.--Existing and Proposed Penalty Point Conversion Tables
------------------------------------------------------------------------
                                 Current                       Proposed
        Current points          penalties   Proposed points   penalties
------------------------------------------------------------------------
20 or fewer..................          $72  60 or fewer....         $112
21...........................           80  61.............          121
22...........................           87  62.............          131
23...........................           94  63.............          142
24...........................          101  64.............          154
25...........................          109  65.............          167
26...........................          120  66.............          181
27...........................          131  67.............          196
28...........................          142  68.............          212
29...........................          153  69.............          230
30...........................          164  70.............          249
31...........................          178  71.............          270
32...........................          193  72.............          293
33...........................          207  73.............          317
34...........................          221  74.............          343
35...........................          237  75.............          372
36...........................          254  76.............          403
37...........................          273  77.............          436
38...........................          291  78.............          473

[[Page 53062]]

 
39...........................          310  79.............          512
40...........................          327  80.............          555
41...........................          354  81.............          601
42...........................          383  82.............          651
43...........................          409  83.............          705
44...........................          437  84.............          764
45...........................          463  85.............          828
46...........................          500  86.............          897
47...........................          536  87.............          971
48...........................          629  88.............        1,052
49...........................          749  89.............        1,140
50...........................          878  90.............        1,235
51...........................        1,033  91.............        1,337
52...........................        1,198  92.............        1,449
53...........................        1,376  93.............        1,569
54...........................        1,566  94.............        1,700
55...........................        1,769  95.............        1,842
56...........................        2,003  96.............        1,995
57...........................        2,252  97.............        2,161
58...........................        2,515  98.............        2,341
59...........................        2,793  99.............        2,536
60...........................        3,086  100............        2,748
61...........................        3,419  101............        2,976
62...........................        3,770  102............        3,224
63...........................        4,137  103............        3,493
64...........................        4,521  104............        3,784
65...........................        4,856  105............        4,099
66...........................        5,099  106............        4,440
67...........................        5,342  107............        4,810
68...........................        5,585  108............        5,211
69...........................        5,828  109............        5,645
70...........................        6,071  110............        6,115
71...........................        6,374  111............        6,624
72...........................        6,678  112............        7,176
73...........................        6,981  113............        7,774
74...........................        7,285  114............        8,421
75...........................        7,588  115............        9,122
76...........................        7,892  116............        9,882
77...........................        8,499  117............       10,705
78...........................        9,106  118............       11,597
79...........................        9,713  119............       12,563
80...........................       10,321  120............       13,609
81...........................       11,535  121............       14,743
82...........................       12,749  122............       15,971
83...........................       13,963  123............       17,301
84...........................       15,177  124............       18,742
85...........................       16,392  125............       20,302
86...........................       18,213  126............       21,993
87...........................       20,642  127............       23,825
88...........................       23,070  128............       25,810
89...........................       25,498  129............       27,959
90...........................       27,927  130............       30,288
91...........................       30,355  131............       32,810
92...........................       33,391  132............       35,543
93...........................       36,427  133............       38,503
94...........................       39,462  134............       41,574
95...........................       42,498  135............       44,645
96...........................       45,533  136............       47,716
97...........................       48,569  137............       50,787
98...........................       51,605  138............       53,858
99...........................       54,640  139............       56,929
100..........................       60,000  140 or more....       60,000
------------------------------------------------------------------------

    The range of points in the proposed conversion table to reflects 
proposed changes in the individual criteria tables in proposed Sec.  
100.3. The minimum penalty in the proposed conversion table would be 
changed from $72 to $112. MSHA believes that this would represent a 
reasonable adjustment for many of the violations processed under the 
existing regulations as single penalty assessments. Typically, single 
penalty assessments address non-S&S and paperwork type violations. The 
maximum penalty would remain at $60,000 per violation.

[[Page 53063]]

    h. Effect on operator's ability to remain in business (Sec.  
100.3(h)). Existing Sec.  100.3(h) provides that MSHA presumes that the 
operator's ability to continue in business will not be affected by 
payment of a civil penalty. In addition, it provides that MSHA may 
adjust the penalty if the operator submits information to MSHA 
concerning the business financial status which shows that payment of 
the penalty will adversely affect the operator's ability to continue in 
business. MSHA is proposing several editorial changes for easier 
reading and clarity, but there would be no substantive change to 
existing Sec.  100.3(h).
4. Determination of Penalty; Single Penalty Assessment (Sec.  100.4)
    Existing Sec.  100.4 provides for a $60 penalty for non-S&S 
violations, i.e., those that are not reasonably likely to result in 
reasonably serious injury or illness. The single penalty assessment is 
available only if the violation is abated within the time set by the 
inspector and the operator does not have an excessive history of 
violations. The existing provision defines excessive violation history.
    MSHA is proposing to delete the single penalty assessment provision 
in Sec.  100.4 based on an evaluation of agency data and a review of 
experience gained under the provision. The primary focus of the Mine 
Act, as reiterated in the MINER Act, is on the prevention and 
correction of violative conditions before they occur and the 
improvement of the safety and health of miners. MSHA believes that 
deletion of the single penalty provision will have a positive impact on 
miner safety and health. MSHA believes that deleting the single penalty 
provision will provide a greater incentive for mine operators to abate 
hazards. The Agency believes that deleting the single penalty provision 
will cause mine operators to focus their attention on preventing all 
hazardous conditions before they occur and promptly correct those 
violations that do occur. Therefore, MSHA is proposing to delete the 
single penalty provision.
5. Unwarrantable Failure (Sec.  100.4)
    Proposed Sec.  100.4 would implement the MINER Act requirements 
related to minimum unwarrantable failure penalties. Section 8(a)(1)(B) 
of the MINER Act amends the Mine Act by setting a minimum penalty of 
$2,000 for any citation or order issued under section 104(d)(1) and a 
minimum penalty of $4,000 for any order issued under section 104(d)(2).
6. Determination of Penalty; Special Assessment (Sec.  100.5)
    Existing Sec.  100.5 provides for a special assessment for those 
violations which MSHA believes should not be processed under the 
provision for a single penalty assessment or under the regular 
assessment provision.
    Consistent with the proposal to delete the single penalty 
provision, MSHA is proposing to revise the first sentence in paragraph 
(a) of this section. The revision would remove the reference to the 
single assessment provision. MSHA proposes to remove the second 
sentence in existing paragraph (a) of Sec.  100.5 that provides a 
general explanation stating when a special assessment would be applied. 
This sentence is ``Although an effective penalty can generally be 
derived by using the regular assessment formula and the single 
assessment provision, some types of violations may be of such a nature 
or seriousness that it is not possible to determine an appropriate 
penalty under these provisions.'' This sentence is unnecessary because 
the first sentence specifies that it is within MSHA's discretion to 
waive the regular assessment depending upon the conditions surrounding 
the violation.
    MSHA proposes to remove the list of eight categories of violations 
that will be reviewed for possible special assessment under existing 
Sec.  100.5(b). As stated in existing and proposed Sec.  100.5(a), MSHA 
has the discretion to waive the regular assessment formula if it 
determines that conditions warrant a special assessment for any type of 
violation. The existing list of eight categories of violations that 
MSHA would review, although not intended to be exclusive, resulted in a 
time-consuming and resource-intensive process. Under the proposed rule, 
MSHA would retain its discretion to determine which types of violations 
would be reviewed for a special assessment, without being limited to a 
specific list. MSHA anticipates that, under the proposal, the regular 
assessment provision would generally provide an appropriate penalty in 
most cases. This change will allow MSHA to focus its enforcement 
resources on more field enforcement activities, as opposed to 
administrative review activities. There would be circumstances, 
however, in which the regular assessment would not provide an 
appropriate penalty and thus the special assessment provision would be 
applied.
    Changes in proposed Sec.  100.5(b) would provide for easier reading 
and clarity and would be revised to include references to sections 
105(b) and 110(i) of the Mine Act. The reference to Sec.  100.4(b) 
would be removed as the single penalty provision would be deleted. 
Paragraphs (c) and (d) would remain unchanged.
    Proposed paragraphs (e) and (f) would implement new civil penalty 
provisions of the MINER Act. New paragraph (e) addresses penalties for 
flagrant violations. Under the MINER Act amendments to the Mine Act, 
violations that are deemed to be flagrant may be assessed a civil 
penalty of not more than $220,000. A ``flagrant'' violation is defined 
as a reckless or repeated failure to make reasonable efforts to 
eliminate a known violation of a mandatory health or safety standard 
that substantially and proximately caused, or reasonably could have 
been expected to cause, death or serious bodily injury. Under the 
proposal these violations would be processed as a special assessment.
    New paragraph (f) addresses penalties related to prompt incident 
notification. Under the MINER Act amendments to the Mine Act, an 
operator who fails to provide timely notification to the Secretary 
under section 103(j) (relating to the 15-minute requirement) shall be 
assessed a civil penalty of not less than $5,000 and not more than 
$60,000. Violations under this new paragraph would be processed as a 
special assessment.
7. Procedures for Review of Citations and Orders; Procedures for 
Assessment of Civil Penalties and Conferences (Sec.  100.6)
    Existing Sec.  100.6 contains requirements and administrative 
procedures for review of citations and orders. Proposed Sec.  100.6 
remains substantively the same as existing Sec.  100.6. MSHA believes 
that safety and health is improved when mine operators and miners or 
their representatives are afforded an opportunity to discuss safety and 
health issues after an inspection with the MSHA District Manager or 
designee. Like existing Sec.  100.6, initial review of the citation or 
order would be conducted during the inspection closeout conference or 
at a time reasonably convenient to operators and miners or their 
representatives. In addition, the proposal, like the existing rule, 
allows the operator and miners or their representative to submit 
additional facts or to request a safety and health conference. Any of 
these parties may request to be notified of, and participate in, a 
safety and health conference initiated by one of the other parties. 
Safety and health conference requests would continue to be made with 
the MSHA District Office. When a request is

[[Page 53064]]

granted, conferences will be promptly conducted.
    Proposed paragraph 100.6(a) contains editorial changes which 
incorporate concepts from existing paragraphs 100.6(a) and (c). Under 
proposed Sec.  100.6(a), the review process would continue to provide 
any operator, and miners or their representatives, with an opportunity 
to (1) review the citation or order with MSHA, (2) submit additional 
information to MSHA, and (3) request a safety and health conference 
with the District Manager or designee. In addition, the provision in 
existing Sec.  100.6(c), which provides that a request for a conference 
is within MSHA's discretion, would be moved to this paragraph.
    Proposed Sec.  100.6(b) would reduce the time, from ten days to 
five days, to submit additional information or request a safety and 
health conference. MSHA believes that the proposed reduction would 
result in a more effective civil penalty system because penalties would 
be assessed closer in time to the issuance of the citation. MSHA 
believes that all parties would be able to request a health and safety 
conference within this timeframe.
    As stated above, the provision in existing Sec.  100.6(c), which 
provides that a request for a conference is within MSHA's discretion, 
would be moved to proposed Sec.  100.6(a). Existing 100.6(d) would be 
renumbered as Sec.  100.6(c) and otherwise remain unchanged.
    Existing Sec. Sec.  100.6(e), (f), and (g) would be combined and 
incorporated into proposed Sec.  100.6(d). The wording in paragraphs 
(e) and (g) would be unchanged. Paragraph (f) would be clarified to 
specify when the MSHA District managers are to refer citations and 
orders to MSHA's Office of Assessments but would remain substantively 
unchanged.
8. Notice of Proposed Penalty; Notice of Contest (Sec.  100.7)
    Existing Sec.  100.7 provides for procedures applicable to a notice 
of proposed penalty and notice of penalty contest. Existing paragraph 
(a) sets out the circumstances under which a notice of proposed penalty 
will be served on the parties, paragraph (b) sets out the procedures 
for contesting a notice of proposed penalty, and paragraph (c) sets out 
when a proposed penalty becomes a final order of the Commission.
    Proposed Sec.  100.7(a), (b), and (c) include editorial changes for 
ease of reading, but remain substantively unchanged from the existing 
provision. Proposed Sec.  100.7(b) would remove from the regulatory 
text: (1) The reference to a return mailing card that is used to 
request a hearing before the Federal Mine Safety and Health Review 
Commission, (2) the reference to providing instructions for returning 
the card to MSHA, and (3) the provision that MSHA will immediately 
advise the Commission of the contest and also advise the Office of the 
Solicitor of the contest. MSHA is proposing these deletions because it 
is no longer using a return mailing card. Instead, MSHA currently 
provides a form that lists violations being assessed, instructions for 
paying or contesting assessments, and MSHA contact information to 
facilitate an operator's request for a hearing. MSHA intends to 
continue this practice. MSHA would continue to advise the Office of the 
Solicitor and the Commission of the notice of penalty contest.
9. Service (Sec.  100.8)
    Existing Sec.  100.8 remains substantively unchanged. This section 
provides that service of proposed civil penalties will be made at the 
mailing address of record for an operator and miners' representative, 
that penalty assessments may be mailed to a different address if MSHA 
is notified in writing of the new address, and that operators who fail 
to file a notification of legal identity under 30 CFR Part 41 will be 
served at their last known business address. Specific references to 
part 40 (Representative of Miners) and part 41 (Notification of Legal 
Identity) would be changed to indicate they are parts contained in 
Chapter I of Title 30 CFR.

IV. Executive Order 12866

    Executive Order (E.O.) 12866 as amended by E.O. 13258 (Amending 
Executive Order 12866 on Regulatory Planning and Review) requires that 
regulatory agencies assess both the costs and benefits of regulations. 
To comply with E.O. 12866, MSHA has prepared a Preliminary Regulatory 
Economic Analysis (PREA) for the proposed rule. The PREA contains 
supporting data and explanation for the summary materials presented in 
sections IV-VII of this preamble, including the covered mining 
industry, costs and benefits, feasibility, small business impacts, and 
paperwork. The PREA is located on MSHA's Web site at http://www.msha.gov/REGSINFO.HTM. A printed copy of the PREA can be obtained 
from MSHA's Office of Standards, Regulations, and Variances.
    Based on the PREA, MSHA has determined that the proposed rule would 
not have an annual effect of $100 million or more on the economy and 
that, therefore, it is not an economically ``significant regulatory 
action'' pursuant to Section 3, paragraph (f) of E.O. 12866.

A. Population at Risk

    Based on 2004 data, the proposed rule would apply to the entire 
mining industry, covering all 14,480 mine operators and 6,693 
independent contractors in the United States, as well as the 214,450 
miners and 72,739 contract workers they employ.

B. Costs

    In order to derive and explain the cost impact of the proposed rule 
on the mining industry, MSHA has divided its analysis into three 
sections: (1) The baseline--the total number and monetary amount of 
civil penalty assessments proposed by MSHA in 2005, the year prior to 
the proposed rule; (2) the impact of the proposed rule on civil penalty 
assessments under the assumption that mine operators and independent 
contractors take no actions, in response to higher proposed penalty 
assessments, to increase compliance with MSHA standards and 
regulations; and (3) the impact of the proposed rule on the number and 
amount of civil penalty assessments taking into account the anticipated 
response of mine operators and independent contractors to increase 
compliance with MSHA standards and regulations and thereby reduce the 
number of civil penalty assessments they would otherwise receive.
    Before proceeding, it is important to note the nature of the 
impacts associated with the proposed rule. For most MSHA rules, the 
estimated impact reflects the cost to the mining industry of achieving 
compliance with the rule. For this proposed rule, the estimated impact 
consists of two parts: (1) Higher payments for penalties received and 
(2) expenses incurred to increase compliance with MSHA standards and 
regulations so as to reduce the number and amount of civil penalties 
otherwise received. Although the former impact is not a traditional 
compliance cost, but rather a cost specifically due to non-compliance, 
for the purposes of this analysis, MSHA has shown these costs. The 
latter costs are compliance costs, but for existing MSHA standards and 
regulations. These costs were included in economic assumptions made 
when those standards and regulations were promulgated. At that time, 
MSHA generally assumed full industry compliance. Therefore, compliance 
efforts made in response to higher penalties are not a cost 
attributable to the proposed rule. However, for illustrative purposes 
only, this analysis

[[Page 53065]]

reflects additional expenditures associated with improved compliance.
1. Baseline
    The first step in estimating the impact of the proposed rule is to 
establish a baseline: The number and monetary amount of civil penalty 
assessments in the absence of the proposed rule. For this purpose, MSHA 
chose all civil penalty assessments for 2005, the last full calendar 
year of data prior to the proposed rule. Table IV-1 shows the number of 
civil penalty assessments issued in 2005, disaggregated by mine 
employment size, by coal and MNM, and by operators and independent 
contractors.

                       Table IV-1.--Baseline Number of Civil Penalty Assessments for 2005
----------------------------------------------------------------------------------------------------------------
                                                               Coal-M/NM, operator/contractor
                                           ---------------------------------------------------------------------
      Contractor/mine employment size           Coal          Coal          M/NM          M/NM           All
                                             contractor     operator     contractor     operator     violations
----------------------------------------------------------------------------------------------------------------
1-5.......................................         2,856         2,741         1,609        12,528        19,734
6-19......................................           757         9,063         1,048        16,125        26,993
20-500....................................         1,479        43,428         1,183        17,685        63,775
501+......................................             1         4,432            66         1,672         6,171
All Mine Sizes............................         5,093        59,664         3,906        48,010       116,673
----------------------------------------------------------------------------------------------------------------

    The mine size and independent contractor size categories being used 
are 1-5 employees, 6-19 employees, 20-500 employees, and more than 500 
employees. These categories are relevant for the analysis of impacts in 
section VI of this preamble, to determine whether small mines, as 
defined by the Small Business Administration (SBA) and MSHA, would be 
significantly impacted by the proposed rule. Mines with 500 or fewer 
employees meet SBA's definition of a small mine. Mines with fewer than 
20 employees meet MSHA's traditional definition of a small mine.
    Mine violation data have been broken out by coal and metal/nonmetal 
(MNM) and by operator and independent contractor. The employment sizes 
shown are contractor size for independent contractors and mine size for 
mine operators.
    Of the 116,673 civil penalty assessments issued in 2005, 113,484, 
or about 97.3%, were single penalty or regular assessments. The 
remaining 3,189, or 2.7%, were special assessments.
    As can be calculated from Table IV-1, there were about 25% more 
coal violations than MNM violations in 2005, even though there were 
more than 3\1/2\ times as many MNM operators and independent 
contractors as there were coal operators and independent contractors. 
One reason for the larger number of coal violations is that there are 
about 3 times as many underground coal mines as underground MNM mines. 
There are a number of circumstances surrounding underground mines which 
tend to result in a greater number of violations. They are required to 
be inspected more often, and conditions are generally more dangerous 
and subject to change. Another reason for more coal violations is that 
coal mines are, on average, larger operations than MNM mines, and 
larger mines tend to receive more violations, on average, than smaller 
mines. The average coal mine operator employed about 3 times as many 
miners as the average MNM operator in 2004.
    The 2005 civil penalty monetary amount used as a baseline was the 
penalty proposed by MSHA. Table IV-2 shows, by contractor/mine 
employment size and coal-MNM, operator-independent contractor, the 
total baseline dollar amount of civil penalties proposed by MSHA in 
2005.

                   Table IV-2.--Baseline Total of Proposed Civil Penalty Assessments for 2005
----------------------------------------------------------------------------------------------------------------
                                                               Coal-M/NM, operator/contractor
                                           ---------------------------------------------------------------------
      Contractor/mine employment size           Coal          Coal          M/NM          M/NM           All
                                             contractor     operator     contractor     operator     violations
----------------------------------------------------------------------------------------------------------------
1-5.......................................      $308,649      $463,277      $200,947    $1,887,443    $2,860,316
6-19......................................        86,319     1,492,545       109,837     2,535,563     4,224,264
20-500....................................       314,195    11,010,009       192,151     3,890,799    15,407,154
501+......................................         2,000     1,706,750        14,876       634,888     2,358,514
All Mine Sizes............................       711,163    14,672,581       517,811     8,948,693    24,850,248
----------------------------------------------------------------------------------------------------------------

    Of the $24.9 million in civil penalties proposed by MSHA in 2005, 
$16.6 million, or about 67%, were from single penalty and regular 
assessments. The remaining $8.2 million were from special assessments. 
Of this amount, about $0.3 million were issued to agents of mine 
operators and another $1.5 million were issued for violations involving 
a fatality.
    Table IV-3 displays the baseline average dollar amount of a 
proposed civil penalty in 2005 disaggregated by mine size and coal-MNM, 
operator-independent contractor. The average penalty assessment for a 
violation in 2005 was $213. For a regular or single penalty assessment, 
the average penalty was $147. For a special assessment, the average 
penalty was $2,385. For special assessments issued to agents of the 
mine operator, the average assessment was $582, and for special 
assessments involving a fatality, the average penalty was $27,181.

[[Page 53066]]



              Table IV-3.--Baseline Average Proposed Civil Penalty Assessment per Violation in 2005
----------------------------------------------------------------------------------------------------------------
                                                               Coal-M/NM, operator contractor
                                           ---------------------------------------------------------------------
      Contractor/mine employment size                                                                Average for
                                                Coal          Coal          M/NM          M/NM           all
                                             contractor     operator     contractor     operator     violations
----------------------------------------------------------------------------------------------------------------
1-5.......................................          $108          $169          $125          $151          $145
6-19......................................           114           165           105           157           156
20-500....................................           212           254           162           220           242
501+......................................         2,000           385           225           380           382
All Mine Sizes............................           140           246           133           186           213
----------------------------------------------------------------------------------------------------------------

    Consistent with the formulas used to calculate regular assessments 
under the existing regulations, Table IV-3 shows that the average 
proposed penalty assessment in 2005 tended to increase as mine size 
increased. This effect is consistent, particularly for mine operators 
with 20 or more employees.
    Table IV-3 also indicates that the difference in average penalties 
between coal and MNM mines and independent contractors of a given 
employment size is generally small.
    Table IV-2 reveals that total civil penalty assessments in 2005 
were substantially larger, more than 50% larger, for coal mines than 
for MNM mines. The larger aggregate penalty assessment for coal mines 
is due to the larger number of violations issued to coal mines and the 
higher average penalty per violation. Coal violations tend to be more 
serious, on average, than MNM violations (e.g., 40% of coal violations 
are Significant and Substantial, or S&S, versus 23% for MNM 
violations).
2. Impacts If No Compliance Response to Higher Penalties
    With the baseline established, the next task in the cost analysis 
is to determine the impact of the proposed rule on civil penalty 
assessments under the assumption that mine operators and independent 
contractors take no actions, in response to higher proposed penalty 
assessments, to increase compliance with MSHA standards and 
regulations. This task is an intermediate step in determining the total 
cost impact of the proposed rule, as MSHA's assumption in IV.B.3 of 
this preamble is that mine operators and independent contractors will 
change their compliance behavior in response to increased penalties.
    Given the assumption of no compliance response by mine operators 
and independent contractors, the number of violations would not change 
in response to the proposed rule. They would remain the same as 
presented in Table IV-1 for the baseline. However, the type of the 
violations would change under the proposed rule. In the analysis, all 
2005 regular and single penalty assessments would be issued as regular 
assessments under the proposed rule. MSHA assumed that most 
unwarrantable failure citations and orders would be processed as 
regular assessments under the minimum penalty requirements of the MINER 
Act. MSHA further assumed that the 2005 special assessments issued to 
agents, those involving a fatality, those involving failure to promptly 
notify MSHA, and those involving flagrant violations would be assessed 
as special assessments under the proposed rule. MSHA assumed that all 
other 2005 special assessments would be processed as regular 
assessments. Thus, under the proposed rule, MSHA estimates that the 
number of special assessments would decline by 85%, from 3,189 to 491. 
MSHA anticipates that, under the proposal, the regular assessment 
provision would generally provide an appropriate penalty in most cases. 
Equally significant, this will allow MSHA to focus its enforcement 
resources on more field enforcement activities, as opposed to 
administrative review activities.
    Tables IV-4 and IV-5 show the estimated total dollar amount and 
average dollar amount, respectively, of civil penalties under the 
proposed rule, assuming no compliance response by mine operators and 
independent contractors. Table IV-6 shows, relative to the baseline, 
the estimated percentage increase of civil penalties (both total and 
average) under the proposed rule, assuming no compliance response by 
mine operators and independent contractors. All of these tables are 
disaggregated by contractor/mine employment size, coal-MNM, and 
operator/contractor.

   Table IV-4.--Total Proposed Civil Penalty Assessments Under Proposed Rule, Assuming No Compliance Response
----------------------------------------------------------------------------------------------------------------
                                                               Coal-M/NM, operator/contractor
                                           ---------------------------------------------------------------------
      Contractor/mine employment size           Coal          Coal          M/NM          M/NM           All
                                             contractor     operator     contractor     operator     violations
----------------------------------------------------------------------------------------------------------------
1-5.......................................      $414,826      $684,448      $410,544    $3,207,759    $4,717,577
6-19......................................       133,074     2,287,667       187,432     4,744,450     7,352,623
20-500....................................       415,811    37,598,722       340,542     8,365,383    46,720,458
501+......................................           807     7,394,118        43,973     2,288,395     9,727,293
All Mine Sizes............................       964,518    47,964,955       982,491    18,605,987    68,517,951
----------------------------------------------------------------------------------------------------------------


[[Page 53067]]


 Table IV-5.--Average of Proposed Civil Penalty Assessments Under Proposed Rule, Assuming No Compliance Response
----------------------------------------------------------------------------------------------------------------
                                                               Coal-M/NM, operator/contractor
                                           ---------------------------------------------------------------------
      Contractor/mine employment size                                                                Average for
                                                Coal          Coal          M/NM          M/NM           all
                                             contractor     operator     contractor     operator     violations
----------------------------------------------------------------------------------------------------------------
1-5.......................................          $145          $250          $255          $256          $239
6-19......................................           176           252           179           294           272
20-500....................................           281           866           288           473           733
501+......................................           807         1,668           666         1,369         1,576
All Mine Sizes............................           189           804           252           388           587
----------------------------------------------------------------------------------------------------------------


  Table IV-6.--Percentage Increase in Total and Average Proposed Civil Penalty Assessments Under Proposed Rule,
                                         Assuming No Compliance Response
----------------------------------------------------------------------------------------------------------------
                                                               Coal-M/NM, operator/contractor
                                           ---------------------------------------------------------------------
                                                                                                       Average
      Contractor/mine employment size                                                                percentage
                                                Coal          Coal          M/NM          M/NM      increase for
                                             contractor     operator     contractor     operator         all
                                                                                                     violations
----------------------------------------------------------------------------------------------------------------
1-5.......................................            34            48           104            70            65
6-19......................................            54            53            71            87            74
20-500....................................            32           241            77           115           203
501+......................................           -60           333           196           260           312
All Mine Sizes............................            36           227            90           108           176
----------------------------------------------------------------------------------------------------------------

    As indicated in these tables, MSHA estimates that total civil 
penalty assessments would increase under the proposed rule, assuming no 
compliance response, from $24.9 million in the baseline to $68.5 
million, an increase of $43.7 million, or 176%. Approximately $2.5 
million, or about 4% of the $68.5 million, would come from special 
assessments. Of the $43.7 million increase, approximately $1.9 million 
would result from the minimum penalty provisions for unwarrantable 
violations in the MINER Act. In its analysis of 2005 data, MSHA found 
one violation which met the failure to provide timely notification 
provisions in the MINER Act. For this category of violations, the MINER 
Act imposes a penalty of $5,000 to $60,000. However, the particular 
violation had already received a special assessment in excess of 
$5,000. Thus, MSHA did not adjust penalty totals to account for this 
provision of the MINER Act.
    MSHA has determined that flagrant violations will be processed 
under the special assessment provision. As stated in the proposal, MSHA 
will use the definition for flagrant violation in the MINER Act, but 
the Agency cannot estimate, at this point in the rulemaking process, 
the specific impact of this new requirement in the MINER Act. The 
Agency does, however, anticipate that penalties will increase due to 
this provision.
    MSHA estimates that the average penalty assessment would increase 
under the proposed rule, assuming no compliance response, from $213 
(shown in Table IV-3) to $587 (shown in Table IV-5), an increase of 
176% (shown in Table IV-6). Consistent with Congressional intent, the 
average penalty generally increases as mine size or contractor size 
increases (shown in Table IV-5).
    For purposes of the analysis, special assessments that remain as 
special assessments were assumed to receive the same penalty, unless 
they would be impacted by the minimum penalty provisions of the MINER 
Act. All special assessments in 2005 involving a fatality exceeded the 
new minimum penalty provisions, so these penalties are assumed 
unchanged by the proposed rule. However, the average penalty for 
special assessments issued to agents of the mine operator is estimated 
to increase by 367% under the proposed rule. This increase is entirely 
due to the application of the minimum penalty provisions for 
unwarrantable violations in the MINER Act.
    For purposes of analysis, the remaining special assessments are 
assumed to be treated as regular assessments under the proposal. In the 
analysis, the average penalty for 2005 special assessments, assumed to 
be issued as regular assessments under the proposed rule, increased by 
84%.
3. Impacts With Compliance Response to Higher Penalties
    MSHA intends and expects that higher penalty assessments will lead 
to efforts by mine operators and independent contractors to increase 
compliance with MSHA standards and regulations and ultimately to 
decreased violations. MSHA assumes that each violation is associated 
with a probability of occurrence that declines as penalty assessments 
rise. To estimate this impact, MSHA assumes that each 10% increase in 
penalty for a violation is associated with a 3% decrease in its 
probability of occurrence.
    In economic terms, this is equivalent to assuming an elasticity of 
-0.3 between the number of violations and the dollar size of penalties. 
The numbers derived from this elasticity assumption are for 
illustrative purposes only. A lower elasticity number (e.g., -0.1) 
would yield less impact and a higher number (e.g., -0.9) would yield 
more impact. This elasticity of -0.3 was previously assumed by MSHA in 
its regulatory economic analysis for the 2003 direct final rule to 
adjust civil penalties for inflation. Further explanation and 
mathematics are provided in the PREA for this proposed rule.
    MSHA has consistently applied this assumption to each assessed 
violation in the 2005 database. For most violations, the proposed rule 
would result in a penalty increase. Accordingly, MSHA has computed a 
reduction (or in the rare

[[Page 53068]]

case, an increase) in the probability of the violation's occurrence. 
The reduction is larger as the penalty increases.
    Tables IV-7 and IV-8 estimate the increased compliance response of 
the industry to higher penalty assessments. Table IV-7 provides 
estimates for mine operators and Table IV-8 provides estimates for 
independent contractors. Tables IV-7 and IV-8 show, by mine or 
contractor employment size and by coal and MNM, the number of 
violations and the dollar amount of penalties in the 2005 database 
(``Old''). Using the assumption that the elasticity of response is -0.3 
for each violation, Tables IV-7 and IV-8 estimate the new reduced 
number of violations and the higher penalties associated with these 
violations (``New''). Taking into account the mine industry's 
compliance response, MSHA estimates that were the proposed rule in 
effect in 2005, total violations would have declined from 116,673 to 
95,035, a reduction of about 19% in the total number of violations.

                Table IV-7.--Impact of Proposed Rule on Mine Operators Given Increased Compliance Response to Higher Penalty Assessments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Additional
                                                                    Old number   Old proposed   New number   New proposed    Change in     expenditures
                       Mine employment size                             of         penalties        of         penalties     penalties      to improve
                                                                    violations                  violations                                 compliance*
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Impact on Coal Mine Operators
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5..............................................................         2,741      $463,277         2,476      $566,992      $103,715          $44,449
6-19.............................................................         9,063     1,492,545         8,145     1,895,806       403,261          172,826
20-500...........................................................        43,428    11,010,009        33,616    23,661,984    12,651,975        5,422,275
501+.............................................................         4,432     1,706,750         2,941     4,356,873     2,650,123        1,135,767
                                                                  --------------------------------------------------------------------------------------
    All Mine Sizes...............................................        59,664    14,672,581        47,178    30,481,655    15,809,074        6,775,317
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Impact on Metal/Nonmetal Mine Operators
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5..............................................................        12,528    $1,887,443        10,955    $2,562,832       675,389         $289,453
6-19.............................................................        16,125     2,535,563        13,846     3,632,672     1,097,109          470,190
20-500...........................................................        17,685     3,890,799        13,986     6,110,644     2,219,845          951,362
501+.............................................................         1,672       634,888         1,101     1,381,516       746,628          319,983
                                                                  --------------------------------------------------------------------------------------
    All Mine Sizes...............................................        48,010     8,948,693        39,889    13,687,664     4,738,971        2,030,988
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These additional expenditures are shown for illustrative purposes only and are not included in the costs of this proposal, since they were included in
  analyses of costs when standards were promulgated.


            Table IV-8.--Impact of Proposed Rule on Independent Contractors Given Increased Compliance Response to Higher Penalty Assessments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Additional
                                                                    Old number   Old proposed   New number        New        Change in     expenditures
                    Contractor employment size                          of         penalties        of         proposed      penalties      to improve
                                                                    violations                  violations     penalties                   compliance*
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Impact on Coal Independent Contractors
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5..............................................................         2,856      $308,649         2,607      $361,058       $52,409          $22,461
6-19.............................................................           757        86,319           678       113,178        26,859           11,511
20-500...........................................................         1,479       314,195         1,349       355,952        41,757           17,896
501+.............................................................             1         2,000             1         1,060          -940             -403
                                                                  --------------------------------------------------------------------------------------
    All Contractor Sizes.........................................         5,093       711,163         4,636       831,247       120,084           51,465
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Impact on Metal/Nonmetal Independent Contractors
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5..............................................................         1,609      $200,947         1,377      $318,731      $117,784          $50,479
6-19.............................................................         1,048       109,837           905       150,508        40,671           17,430
20-500...........................................................         1,183       192,151           998       267,210        75,059           32,168
501+.............................................................            66        14,876            52        30,615        15,739            6,745
                                                                  --------------------------------------------------------------------------------------
    All Contractor Sizes.........................................         3,906       517,811         3,332       767,064       249,253          106,823
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These additional expenditures are shown for illustrative purposes only and are not included in the costs of this proposal, since they were included in
  analyses of costs when standards were promulgated.

    The ``Change in Penalties'' column represents the increase in 
penalties, relative to the baseline, for remaining violations. The 
total change in proposed penalty assessments is approximately $15.8 
million for coal mine operators, $0.1 million for coal independent 
contractors, $4.7 million for MNM mine operators, and $0.2 million for 
MNM independent contractors. The sum of these four numbers, $20.9 
million, is the total cost of the proposed rule.
    To reduce the number of violations in response to the higher 
penalty assessments, MSHA assumes that mines will increase costs to 
improve compliance. The column, ``Additional Expenditures to Improve 
Compliance,''

[[Page 53069]]

represents MSHA's estimate of these increased compliance costs. These 
estimates are based on the same assumption that the elasticity of 
response is -0.3 and the additional assumption that the increased 
compliance activities will be undertaken by the mining industry to 
avoid increased penalties. These increased compliance costs to avoid 
higher penalties are not counted as a cost of this proposed rule, 
because full compliance with MSHA standards is assumed when standards 
are promulgated.
    Table IV-9 summarizes the impacts by mining sector.

 Table IV-9.--Impact of Proposed Rule, Both With Unchanged Compliance and With Increased Compliance Response to
                                           Higher Penalty Assessments
----------------------------------------------------------------------------------------------------------------
                                                                 New proposed      Change in      Percent change
                Mining sector                   Old proposed   penalties, same  penalties, same   in penalties,
                                                 penalties        compliance       compliance    same compliance
----------------------------------------------------------------------------------------------------------------
                                            Same Number of Violations
----------------------------------------------------------------------------------------------------------------
Coal........................................      $15,383,744      $48,929,473      $33,545,729              218
Metal.......................................        1,396,682        4,054,371        2,657,689              190
Nonmetal....................................          594,888        1,171,774          576,886               97
Sand and Gravel.............................        3,113,522        5,544,307        2,430,785               78
Stone.......................................        4,361,412        8,818,026        4,456,614              102
                                             -------------------------------------------------------------------
    Total...................................       24,850,248       68,517,951       43,667,703              176
----------------------------------------------------------------------------------------------------------------


 
----------------------------------------------------------------------------------------------------------------
                                                 Additional      New proposed      Change in      Percent change
                                              expenditures to     penalties,       penalties,     in penalties,
                Mining sector                     improve          improved         improved         improved
                                                compliance*       compliance       compliance       compliance
----------------------------------------------------------------------------------------------------------------
                                          Reduced Number of Violations
----------------------------------------------------------------------------------------------------------------
Coal........................................       $6,826,782      $31,312,902      $15,929,158              104
Metal.......................................          524,403        2,620,288        1,223,606               88
Nonmetal....................................          132,222          903,406          308,518               52
Sand and Gravel.............................          522,167        4,331,911        1,218,389               39
Stone.......................................          959,019        6,599,123        2,237,711               51
                                             -------------------------------------------------------------------
    Total...................................        8,964,592       45,767,630       20,917,382               84
----------------------------------------------------------------------------------------------------------------
* These additional expenditures are shown for illustrative purposes only and are not included in the costs of
  this proposal, since they were included in analyses of costs when standards were promulgated.

C. Benefits

    The benefits of the proposed rule are the reduced number of 
injuries and fatalities that would result from increased compliance 
with MSHA's health and safety standards and regulations in response to 
higher penalty assessments. MSHA projects that higher penalties will 
induce mine operators to reduce all safety and health violations. The 
reduction in the number of violations, particularly S&S violations, or 
those reasonably likely to result in reasonably serious injury or 
illness, will reduce the number and severity of injuries and illnesses.

V. Feasibility

    MSHA has concluded that the requirements of the proposed rule are 
technologically and economically feasible.

A. Technological Feasibility

    The proposed rule is a regulation, not a standard. It does not 
involve activities on the frontiers of scientific knowledge. The mining 
industry has been complying with the adjudication and payment of civil 
penalties for decades. MSHA concludes, therefore, that the proposed 
rule is technologically feasible.

B. Economic Feasibility

    MSHA estimates that the yearly increased penalty assessments issued 
to coal mines as a result of the proposed rule will be $15.9 million 
dollars, which is equal to about 0.07 percent of coal mine sector 
revenues of $22.1 billion in 2004. MSHA estimates that the yearly 
increased penalty assessments issued to MNM mines as a result of the 
proposed rule will be $5.0 million dollars, which is equal to about 
0.01 percent of MNM mine sector revenues of $44.0 billion in 2004. 
Since the total estimated increased penalty assessments for both the 
coal and MNM mine sectors are well below one percent of their estimated 
revenues, MSHA concludes that the proposed rule is economically 
feasible for the mining industry.\1\
---------------------------------------------------------------------------

    \1\ As shown earlier, in response to increased penalty 
assessments, MSHA expects that coal mine operators and contractors 
will spend an additional $6.8 million and MNM operators and 
contractors an additional $2.1 million to increase compliance with 
MSHA standards and regulations so as to reduce the number and amount 
of civil penalty assessments otherwise received. But the costs to 
achieve compliance with these standards and regulations have already 
been estimated and recognized, under full compliance assumptions, 
when the standards and regulations were promulgated. Therefore, the 
costs associated with improved compliance are not properly 
attributable to the proposed rule. To include them as a cost of the 
proposed rule would be to double-count them.
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act and Small Business Regulatory 
Enforcement Fairness Act (SBREFA)

    Pursuant to the Regulatory Flexibility Act (RFA) of 1980, as 
amended by the Small Business Regulatory Enforcement Fairness Act 
(SBREFA), MSHA has analyzed the impact of the proposed rule on small 
entities. Based on that analysis, MSHA has made a determination with 
respect to whether

[[Page 53070]]

the agency can certify that the proposed rule would not have a 
significant economic impact on a substantial number of small entities. 
Unless able to certify that the proposed rule would not have a 
significant economic impact on a substantial number of small entities, 
MSHA must develop an initial regulatory flexibility analysis.
    MSHA certifies that the proposed rule would not have a significant 
economic impact on a substantial number of small entities that are 
covered by this rulemaking. The factual basis for this certification is 
presented in full in Chapter V of the PREA and in summary form below.

A. Definition of a Small Mine

    Under the RFA, in analyzing the impact of a rule on small entities, 
MSHA must use the SBA definition for a small entity 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. MSHA has not taken such an 
action and hence is required to use the SBA definition. The SBA defines 
a small entity in the mining industry as an establishment with 500 or 
fewer employees.
    MSHA has also examined the impacts of agency rules on a subset of 
mines with 500 or fewer employees--those with fewer than 20 employees, 
which MSHA and the mining community have traditionally referred to as 
``small mines.'' These small mines differ from larger mines not only in 
the number of employees, but also in economies of scale in material 
produced, in the type and amount of production equipment, and in supply 
inventory. Therefore, their costs of complying with MSHA's rules and 
the impact of the agency's rules on them will also tend to be 
different. It is for this reason that ``small mines,'' as traditionally 
defined by MSHA as those employing fewer than 20 workers, are of 
special concern to MSHA. In addition, for this proposed rule, MSHA has 
examined the cost on mines with five or fewer employees to ensure that 
this subset of mines is not significantly and adversely impacted by the 
proposed rule.
    This analysis complies with the requirements of the RFA for an 
analysis of the impacts on ``small entities'' while continuing MSHA's 
traditional definition of ``small mines.'' Both the proposal and this 
analysis reflect MSHA's concern for mines with 5 or fewer employees. 
MSHA concludes that it can certify that the proposed rule would not 
have a significant economic impact on a substantial number of small 
entities that are covered by this rulemaking. MSHA has determined that 
this is the case for mines with fewer than 20 employees and mines with 
500 or fewer employees. In its detailed factual basis below, MSHA will 
also show effects of the proposal on mines with 5 or fewer employees.

B. Factual Basis for Certification

    MSHA's analysis of impacts on ``small entities'' begins with a 
``screening'' analysis. The screening compares the estimated costs of a 
rule for small entities in the sector affected by the rule to the 
estimated revenues for the affected sector. When estimated costs are 
less than one percent of the estimated revenues, MSHA believes it is 
generally appropriate to conclude that there is no significant economic 
impact on a substantial number of small entities. When estimated costs 
are equal to or exceed one percent of revenues, it tends to indicate 
that further analysis may be warranted.
    Normally, the analysis of the costs or economic impact of a rule 
assumes that mine operators are in 100% compliance with a rule. Under 
the assumption that mine operators are in 100% compliance with all of 
MSHA's rules, there would be no cost of compliance with the proposed 
rule, since no mine operator would be exposed to civil penalties. For 
purposes of analyzing the effects on small mines, MSHA reverses this 
usual assumption and instead analyzes the increased penalty assessments 
for mines not in compliance with the agency's other rules.
    For coal mines, estimated 2004 production was 4.6 million tons for 
mines with 1-5 employees, 28.7 million tons for mines with 1-19 
employees, and 896.8 million tons for mines with 1-500 employees. Using 
the 2004 price of coal of $19.93 per ton, the 2004 coal revenues are 
estimated to be approximately $91 million for mines with 1-5 employees, 
$572 million for mines with 1-19 employees, and $17,872 million for 
mines with 1-500 employees. Dividing the increase in penalties by the 
revenues in each mine size category, the cost of the rule for coal 
mines is 0.17% of revenues for mines with 1-5 employees, 0.10% of 
revenues for mines with 1-19 employees, and 0.07% of revenues for mines 
with 1-500 employees. Further details are shown in Table VI-1.
    For MNM mines, the total 2004 revenue generated by the MNM industry 
($44.0 billion) \2\ was divided by the total number of employee hours 
to arrive at the average revenue per hour of employee production 
($145.90). The $145.90 was multiplied by employee hours in specific 
mine size categories to arrive at estimated revenues for these 
categories. This approach was used to determine the estimated revenues 
for the MNM mining industry because MSHA does not collect data on MNM 
production. The 2004 MNM revenues are estimated to be approximately 
$3.9 billion for mines with 1-5 employees, $15.4 billion for mines with 
1-19 employees, and $40.6 billion for mines with 1-500 employees. 
Dividing the increase in penalties by the revenues in each mine size 
category, the cost of the rule for MNM mines is 0.02% of revenues for 
mines with 1-5 employees, 0.01% of revenues for mines with 1-19 
employees, and 0.01% of revenues for mines with 1-500 employees. 
Further details are shown in Table VI-1.
---------------------------------------------------------------------------

    \2\ U.S. Department of the Interior, U.S. Geological Survey, 
Mineral Commodity Summaries 2005, January 2005, p. 8.

         Table VI-1.--Increase in Penalties Due to Proposed Rule Compared to Mine Revenues, by Mine Size
----------------------------------------------------------------------------------------------------------------
                                                                    Estimated      Increase in       Penalty
        Employment size             Number of      Increase in       revenue      penalties per   increase as %
                                      mines         penalties      (millions)         mine          of revenue
----------------------------------------------------------------------------------------------------------------
                                                   Coal Mines
----------------------------------------------------------------------------------------------------------------
1-5 employees..................             560        $156,124             $91            $279             0.17
1-19 employees.................           1,149         586,243             572             510             0.10
1-500 employees................           2,000      13,279,975          17,872           6,640             0.07

[[Page 53071]]

 
All mines......................           2,011      15,929,158          22,144           7,921             0.07
----------------------------------------------------------------------------------------------------------------
                                                   M/NM Mines
----------------------------------------------------------------------------------------------------------------
1-5 employees..................           6,370         793,173           3,903             125             0.02
1-19 employees.................          10,771       1,930,953          15,379             179             0.01
1-500 employees................          12,447       4,225,857          40,628             340             0.01
All mines......................          12,467       4,988,224          44,000             400             0.01
----------------------------------------------------------------------------------------------------------------

    As shown in Table VI-1, when applying MSHA's and SBA's definitions 
of small mines, yearly costs of the proposed rule are substantially 
less than 1 percent of estimated yearly revenues, well below the level 
suggesting that the rule might have a significant economic impact on a 
substantial number of small entities. Accordingly, MSHA has certified 
that the proposed rule would not have a significant economic impact on 
a substantial number of small entities that are covered by the rule.

VII. Paperwork Reduction Act of 1995

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

VIII. Other Regulatory Considerations

A. The Unfunded Mandates Reform Act of 1995

    The proposed rule does not include any Federal mandate that may 
result in increased expenditures by State, local, or tribal 
governments; nor does it increase private sector expenditures by more 
than $100 million annually; nor does it significantly or uniquely 
affect small governments. Accordingly, the Unfunded Mandates Reform Act 
of 1995 (2 U.S.C. 1501 et seq.) requires no further agency action or 
analysis.

B. Treasury and General Government Appropriations Act of 1999: 
Assessment of Federal Regulations and Policies on Families

    The proposed rule would have no effect on family well-being or 
stability, marital commitment, parental rights or authority, or income 
or poverty of families and children. Accordingly, Section 654 of the 
Treasury and General Government Appropriations Act of 1999 (5 U.S.C. 
601 note) requires no further agency action, analysis, or assessment.

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

    The proposed rule would not implement a policy with takings 
implications. Accordingly, Executive Order 12630, Governmental Actions 
and Interference with Constitutionally Protected Property Rights, 
requires no further agency action or analysis.

D. Executive Order 12988: Civil Justice Reform

    The proposed rule was drafted and reviewed in accordance with 
Executive Order 12988, Civil Justice Reform. The proposed rule was 
written to provide a clear legal standard for affected conduct and was 
carefully reviewed to eliminate drafting errors and ambiguities, so as 
to minimize litigation and undue burden on the Federal court system. 
MSHA has determined that the proposed rule would meet the applicable 
standards provided in Section 3 of Executive Order 12988.

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

    The proposed rule would have no adverse impact on children. 
Accordingly, Executive Order 13045, Protection of Children from 
Environmental Health Risks and Safety Risks, as amended by Executive 
Orders 13229 and 13296, requires no further agency action or analysis.

F. Executive Order 13132: Federalism

    The proposed rule does not have ``federalism implications'' because 
it does not ``have substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' Accordingly, Executive Order 13132, Federalism, requires 
no further agency action or analysis.

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

    The proposed rule does not have ``tribal implications'' because it 
does not ``have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal government and Indian tribes.'' Accordingly, Executive 
Order 13175, Consultation and Coordination with Indian Tribal 
Governments, requires no further agency action or analysis.

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

    The proposed rule has been reviewed for its impact on the supply, 
distribution, and use of energy because it applies to the coal mining 
industry. Insofar as the proposed rule will result in added yearly 
civil penalty assessments of approximately $15.9 million to the coal 
mining industry, relative to annual revenues of $22.1 billion in 2004, 
it is not a ``significant energy action'' because it is not ``likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy * * * (including a shortfall in supply, price increases, and 
increased use of foreign supplies).'' Accordingly, E.O. 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use, requires no further Agency action or analysis.

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

    MSHA has thoroughly reviewed the proposed rule to assess and take 
appropriate account of its potential impact on small businesses, small 
governmental jurisdictions, and small organizations. MSHA has 
determined

[[Page 53072]]

and certified that the proposed rule would 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: September 5, 2006.
David G. Dye,
Acting Assistant Secretary for Mine Safety and Health.
    For the reasons set forth in the preamble, MSHA proposes to revise 
30 CFR part 100 to read as follows:

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

Sec.
100.1 Scope and purpose.
100.2 Applicability.
100.3 Determination of penalty amount; regular assessment.
100.4 Unwarrantable failure.
100.5 Determination of penalty; special assessment.
100.6 Procedures for review of citations and orders; procedures for 
assessment of civil penalties and conferences.
100.7 Notice of proposed penalty; notice of contest.
100.8 Service.

    Authority: 30 U.S.C. 815, 820, and 957; Pub. L. 109-236, 120 
Stat. 493.


Sec.  100.1  Scope and purpose.

    This part provides the criteria and procedures for proposing civil 
penalties under sections 105 and 110 of the Federal Mine Safety and 
Health Act of 1977 (Mine Act). The purpose of this part is to provide a 
fair and equitable procedure for the application of the statutory 
criteria in determining proposed penalties for violations, to maximize 
the incentives for mine operators to prevent and correct hazardous 
conditions, and to assure the prompt and efficient processing and 
collection of penalties.


Sec.  100.2  Applicability.

    The criteria and procedures in this part are applicable to all 
proposed assessments of civil penalties for violations of the Mine Act 
and the standards and regulations promulgated pursuant to the Mine Act, 
as amended. MSHA shall review each citation and order and shall make 
proposed assessments of civil penalties.


Sec.  100.3  Determination of penalty amount; regular assessment.

    (a) General. (1) 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. Each occurrence of a violation of a mandatory 
safety or health standard may constitute a separate offense. The amount 
of the proposed civil penalty shall be based on the criteria set forth 
in sections 105(b) and 110(i) of the Mine Act. These criteria are:
    (i) The appropriateness of the penalty to the size of the business 
of the operator charged;
    (ii) The operator's history of previous violations;
    (iii) Whether the operator was negligent;
    (iv) The gravity of the violation;
    (v) The demonstrated good faith of the operator charged in 
attempting to achieve rapid compliance after notification of a 
violation; and
    (vi) The effect of the penalty on the operator's ability to 
continue in business.
    (2) A regular assessment is determined by first assigning the 
appropriate number of penalty points to the violation by using the 
appropriate criteria and tables set forth in this section. The total 
number of penalty points will then be converted into a dollar amount 
under the penalty conversion table in paragraph (g) of this section. 
The penalty amount will be adjusted for demonstrated good faith in 
accordance with paragraph (f) of this section.
    (b) The appropriateness of the penalty to the size of the business 
of the operator charged. The appropriateness of the penalty to the size 
of the production operator's business is calculated by using both the 
size of the mine cited and the size of the controlling entity of the 
mine. The size of coal mines and their controlling entities is measured 
by coal production. The size of metal and nonmetal mines and their 
controlling entities is measured by hours worked. The size of 
independent contractors is measured by the total hours worked at all 
mines. Penalty points for size are assigned based on Tables I to V of 
this section. As used in these tables, the terms ``annual tonnage'' and 
``annual hours worked'' mean coal produced and hours worked in the 
previous calendar year. In cases where a full year of data is not 
available, the coal produced or hours worked is prorated to an annual 
basis. This criterion accounts for a maximum of 25 penalty points.

                       Table I.--Size of Coal Mine
------------------------------------------------------------------------
                                                                 Penalty
                    Annual tonnage of mine                       points
------------------------------------------------------------------------
0 to 15,000..................................................          0
Over 15,000 to 30,000........................................          2
Over 30,000 to 50,000........................................          4
Over 50,000 to 100,000.......................................          6
Over 100,000 to 200,000......................................          8
Over 200,000 to 300,000......................................         10
Over 300,000 to 500,000......................................         12
Over 500,000 to 800,000......................................         14
Over 800,000 to 1.1 million..................................         16
Over 1.1 million to 2 million................................         18
Over 2 million...............................................         20
------------------------------------------------------------------------


            Table II.--Size of Controlling Entity--Coal Mine
------------------------------------------------------------------------
                                                                Penalty
                        Annual tonnage                           points
------------------------------------------------------------------------
0 to 100,000.................................................          0
Over 100,000 to 700,000......................................          1
Over 700,000 to 1.5 million..................................          2
Over 1.5 million to 5 million................................          3
Over 5 million to 10 million.................................          4
Over 10 million..............................................          5
------------------------------------------------------------------------


                 Table III.--Size of Metal/Nonmetal Mine
------------------------------------------------------------------------
                                                                Penalty
                 Annual hours worked at mine                     points
------------------------------------------------------------------------
0 to 10,000..................................................          0
Over 10,000 to 20,000........................................          2
Over 20,000 to 30,000........................................          4
Over 30,000 to 60,000........................................          6
Over 60,000 to 100,000.......................................          8
Over 100,000 to 200,000......................................         10
Over 200,000 to 300,000......................................         12
Over 300,000 to 500,000......................................         14
Over 500,000 to 700,000......................................         16
Over 700,000 to 1 million....................................         18
Over 1 million...............................................         20
------------------------------------------------------------------------


       Table IV.--Size of Controlling Entity--Metal/Nonmetal Mine
------------------------------------------------------------------------
                                                                Penalty
                     Annual hours worked                         points
------------------------------------------------------------------------
0 to 60,000..................................................          0
Over 60,000 to 400,000.......................................          1
Over 400,000 to 900,000......................................          2
Over 900,000 to 3 million....................................          3
Over 3 million to 6 million..................................          4
Over 6 million...............................................          5
------------------------------------------------------------------------


                Table V.--Size of Independent Contractor
------------------------------------------------------------------------
                                                                Penalty
               Annual hours worked at all mines                  points
------------------------------------------------------------------------
0 to 10,000..................................................          0
Over 10,000 to 20,000........................................          2
Over 20,000 to 30,000........................................          4
Over 30,000 to 60,000........................................          6
Over 60,000 to 100,000.......................................          8
Over 100,000 to 200,000......................................         10

[[Page 53073]]

 
Over 200,000 to 300,000......................................         12
Over 300,000 to 500,000......................................         14
Over 500,000 to 700,000......................................         16
Over 700,000 to 1 million....................................         18
Over 1 million...............................................         20
------------------------------------------------------------------------

    (c) History of previous violations. An operator's history of 
previous violations is based on both the total number of violations and 
the number of repeat violations of the same standard in a preceding 15-
month period. Only assessed violations that have been paid or finally 
adjudicated, or have become final orders of the Commission will be 
included in determining an operator's history.
    (1) Total number of violations. For production operators, penalty 
points are calculated on the basis of the number of violations per 
inspection day (VPID)(Table VI of this section). Penalty points are not 
calculated for mines with fewer than ten violations in the specified 
history period. For independent contractors, penalty points are 
calculated on the basis of the total number of violations at all mines 
(Table VII of this section). This aspect of the history criterion 
accounts for a maximum of 25 penalty points.

                        Table VI.--Mine Operators
------------------------------------------------------------------------
                                                                Penalty
                Violations per inspection day                    points
------------------------------------------------------------------------
0 to 0.3.....................................................          0
Over 0.3 to 0.5..............................................          2
Over 0.5 to 0 7..............................................          4
Over 0.7 to 0.9..............................................          6
Over 0.9 to 1.1..............................................          8
Over 1.1 to 1.3..............................................         10
Over 1.3 to 1.5..............................................         13
Over 1.5 to 1.7..............................................         16
Over 1.7 to 1.9..............................................         19
Over 1.9 to 2.1..............................................         22
Over 2.1.....................................................         25
------------------------------------------------------------------------


                   Table VII.--Independent Contractors
------------------------------------------------------------------------
                                                                Penalty
                     Number of violations                        points
------------------------------------------------------------------------
0 to 5.......................................................          0
Over 5 to 10.................................................          2
Over 10 to 15................................................          4
Over 15 to 20................................................          6
Over 20 to 25................................................          8
Over 25 to 30................................................         10
Over 30 to 35................................................         13
Over 35 to 40................................................         16
Over 40 to 45................................................         19
Over 45 to 50................................................         22
Over 50......................................................         25
------------------------------------------------------------------------

    (2) Repeat violations of the same standard. Repeat violation 
history is based on the number of violations of the same standard. This 
aspect of the history criterion accounts for a maximum of 20 penalty 
points (Table VIII of this section).

           Table VIII.--Repeat Violations of the Same Standard
------------------------------------------------------------------------
                                                                Penalty
                     Number of violations                        points
------------------------------------------------------------------------
5 or fewer...................................................          0
6............................................................          1
7............................................................          2
8............................................................          3
9............................................................          4
10...........................................................          5
11...........................................................          6
12...........................................................          7
13...........................................................          8
14...........................................................          9
15...........................................................         10
16...........................................................         11
17...........................................................         12
18...........................................................         14
19...........................................................         16
20...........................................................         18
More than 20.................................................         20
------------------------------------------------------------------------

    (d) Negligence. Negligence is conduct, either by commission or 
omission, which falls below a standard of care established under the 
Mine Act to protect miners against the risks of harm. Under the Mine 
Act, an operator is held to a high standard of care. A mine operator is 
required to be on the alert for conditions and practices in the mine 
that affect the safety or health of miners and to take steps necessary 
to correct or prevent hazardous conditions or practices. The failure to 
exercise a high standard of care constitutes negligence. The negligence 
criterion assigns penalty points based on the degree to which the 
operator failed to exercise a high standard of care. When applying this 
criterion, MSHA considers mitigating circumstances which may include, 
but are not limited to, actions taken by the operator to prevent or 
correct hazardous conditions or practices. This criterion accounts for 
a maximum of 50 penalty points, based on conduct evaluated according to 
Table IX of this section.

                          Table IX.--Negligence
------------------------------------------------------------------------
                                                                Penalty
                          Categories                             points
------------------------------------------------------------------------
No negligence................................................          0
(The operator exercised diligence and could not have known of
 the violative condition or practice.)
Low negligence...............................................         10
(The operator knew or should have known of the violative
 condition or practice, but there are considerable mitigating
 circumstances.)
Moderate negligence..........................................         20
(The operator knew or should have known of the violative
 condition or practice, but there are mitigating
 circumstances.)
High negligence..............................................         35
(The operator knew or should have known of the violative
 condition or practice, and there are no mitigating
 circumstances.)
Reckless disregard...........................................         50
(The operator displayed conduct which exhibits the absence of
 the slightest degree of care.)
------------------------------------------------------------------------

    (e) Gravity. Gravity is an evaluation of the seriousness of the 
violation. This criterion accounts for a maximum of 88 penalty points, 
as derived from the Tables X through XII of this section. Gravity is 
determined by:
    (1) The likelihood of the occurrence of the event against which a 
standard is directed;
    (2) The severity of the illness or injury if the event occurred or 
were to occur; and
    (3) The number of persons potentially affected if the event 
occurred or were to occur.

                          Table X.--Likelihood
------------------------------------------------------------------------
                                                                Penalty
                   Likelihood of occurrence                      points
------------------------------------------------------------------------
No likelihood................................................          0
Unlikely.....................................................         10
Reasonably likely............................................         30
Highly likely................................................         40
Occurred.....................................................         50
------------------------------------------------------------------------


                           Table XI.--Severity
------------------------------------------------------------------------
 Severity of injury or illness if the event occurred or were    Penalty
                           to occur                              points
------------------------------------------------------------------------
No lost work days............................................          0
(All occupational injuries and illnesses as defined in 30 CFR
 part 50 except those listed below.)
Lost work days or restricted duty............................          5

[[Page 53074]]

 
(Any injury or illness which would cause the injured or ill
 person to lose one full day of work or more after the day of
 the injury or illness, or which would cause one full day or
 more of restricted duty.)
Permanently disabling........................................         10
(Any injury or illness which would be likely to result in the
 total or partial loss of the use of any member or function
 of the body.)
Fatal........................................................         20
(Any work-related injury or illness resulting in death, or
 which has a reasonable potential to cause death.)
------------------------------------------------------------------------


                Table XII.--Persons Potentially Affected
------------------------------------------------------------------------
Number of persons potentially  affected if the event occurred   Penalty
                       or were to occur                          points
------------------------------------------------------------------------
0............................................................          0
1............................................................          1
2............................................................          2
3............................................................          4
4............................................................          6
5............................................................          8
6............................................................         10
7............................................................         12
8............................................................         14
9............................................................         16
10 or more...................................................         18
------------------------------------------------------------------------

    (f) The demonstrated good faith of the operator in abating 
violation. This criterion provides a 10% reduction in the penalty 
amount of a regular assessment where the operator abates the violation 
within the time set by the inspector.
    (g) Penalty conversion table. The penalty conversion table is used 
to convert the total penalty points to a dollar amount.

                  Table XIII.--Penalty Conversion Table
------------------------------------------------------------------------
                                                                Penalty
                            Points                                ($)
------------------------------------------------------------------------
60 or fewer..................................................        112
61...........................................................        121
62...........................................................        131
63...........................................................        142
64...........................................................        154
65...........................................................        167
66...........................................................        181
67...........................................................        196
68...........................................................        212
69...........................................................        230
70...........................................................        249
71...........................................................        270
72...........................................................        293
73...........................................................        317
74...........................................................        343
75...........................................................        372
76...........................................................        403
77...........................................................        436
78...........................................................        473
79...........................................................        512
80...........................................................        555
81...........................................................        601
82...........................................................        651
83...........................................................        705
84...........................................................        764
85...........................................................        828
86...........................................................        897
87...........................................................        971
88...........................................................      1,052
89...........................................................      1,140
90...........................................................      1,235
91...........................................................      1,337
92...........................................................      1,449
93...........................................................      1,569
94...........................................................      1,700
95...........................................................      1,842
96...........................................................      1,995
97...........................................................      2,161
98...........................................................      2,341
99...........................................................      2,536
100..........................................................      2,748
101..........................................................      2,976
102..........................................................      3,224
103..........................................................      3,493
104..........................................................      3,784
105..........................................................      4,099
106..........................................................      4,440
107..........................................................      4,810
108..........................................................      5,211
109..........................................................      5,645
110..........................................................      6,115
111..........................................................      6,624
112..........................................................      7,176
113..........................................................      7,774
114..........................................................      8,421
115..........................................................      9,122
116..........................................................      9,882
117..........................................................     10,705
118..........................................................     11,597
119..........................................................     12,563
120..........................................................     13,609
121..........................................................     14,743
122..........................................................     15,971
123..........................................................     17,301
124..........................................................     18,742
125..........................................................     20,302
126..........................................................     21,993
127..........................................................     23,825
128..........................................................     25,810
129..........................................................     27,959
130..........................................................     30,288
131..........................................................     32,810
132..........................................................     35,543
133..........................................................     38,503
134..........................................................     41,574
135..........................................................     44,645
136..........................................................     47,716
137..........................................................     50,787
138..........................................................     53,858
139..........................................................     56,929
140 or more..................................................     60,000
------------------------------------------------------------------------

    (h) The effect of the penalty on the operator's ability to continue 
in business. MSHA presumes that the operator's ability to continue in 
business will not be affected by the assessment of a civil penalty. The 
operator may, however, submit information to the District Manager 
concerning the financial status of the business. If the information 
provided by the operator indicates that the penalty will adversely 
affect the operator's ability to continue in business, the penalty may 
be reduced.


Sec.  100.4  Unwarrantable failure.

    (a) The minimum penalty for any citation or order issued under 
section 104(d)(1) of the Mine Act shall be $2,000.
    (b) The minimum penalty for any order issued under section 
104(d)(2) of the Mine Act shall be $4,000.


Sec.  100.5  Determination of penalty amount; special assessment.

    (a) MSHA may elect to waive the regular assessment under Sec.  
100.3 if it determines that conditions warrant a special assessment.
    (b) When MSHA determines that a special assessment is appropriate, 
the proposed penalty will be based on the six criteria set forth in 
Sec.  100.3(a). All findings shall be in narrative form.
    (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.
    (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.
    (e) Violations that are deemed to be flagrant under section 
110(a)(2) of the Mine Act may be assessed a civil penalty of not more 
than $220,000. For purposes of this section, a flagrant violation means 
``a reckless or repeated failure to make reasonable efforts to 
eliminate a known violation of a mandatory health or safety standard 
that substantially and proximately caused, or reasonably could have 
been expected to cause, death or serious bodily injury.''
    (f) The penalty for failure to provide timely notification to the 
Secretary under section 103(j) of the Mine Act will be not less than 
$5,000 and not more than $60,000 for the following accidents:
    (1) The death of an individual at the mine, or

[[Page 53075]]

    (2) An injury or entrapment of an individual at the mine which has 
a reasonable potential to cause death.


Sec.  100.6  Procedures for review of citations and orders; procedures 
for assessment of civil penalties and conferences.

    (a) All parties shall be afforded the opportunity to review with 
MSHA each citation and order issued during an inspection. It is within 
the sole discretion of MSHA to grant a request for a conference and to 
determine the nature of the conference.
    (b) Upon notice by MSHA, all parties will have five days within 
which to submit additional information or request a safety and health 
conference with the District Manager or designee. A conference request 
may include a request to be notified of, and to participate in, a 
conference initiated by another party.
    (c) When a conference is conducted, the parties may submit any 
additional relevant information relating to the violation, either prior 
to or at the conference. To expedite the conference, the official 
assigned to the case may contact the parties to discuss the issues 
involved prior to the conference.
    (d) MSHA will consider all relevant information submitted in a 
timely manner by the parties with respect to the violation. When the 
facts warrant a finding that no violation occurred, the citation or 
order will be vacated. Upon conclusion of the conference, or expiration 
of the conference request period, all citations that are abated and all 
orders will be promptly referred to MSHA's Office of Assessments. The 
Office of Assessments will use the citations, orders, and inspector's 
evaluation as the basis for determining the appropriate amount of a 
proposed penalty.


Sec.  100.7  Notice of proposed penalty; notice of contest.

    (a) A notice of proposed penalty will be issued and served by 
certified mail upon the party to be charged and by regular mail to the 
representative of miners at the mine after the time permitted to 
request a conference under Sec.  100.6 expires, or upon the completion 
of a conference, or upon review by MSHA of additional information 
submitted in a timely manner.
    (b) Upon receipt of the notice of proposed penalty, the party 
charged shall have 30 days to either:
    (1) Pay the proposed assessment. Acceptance by MSHA of payment 
tendered by the party charged will close the case.
    (2) Notify MSHA in writing of the intention to contest the proposed 
penalty. When MSHA receives the notice of contest, it advises the 
Federal Mine Safety and Health Review Commission (``Commission'') of 
such notice. No proposed penalty which has been contested before the 
Commission shall be compromised, mitigated or settled except with the 
approval of the Commission.
    (c) If the proposed penalty is not paid or contested within 30 days 
of receipt, the proposed penalty becomes a final order of the 
Commission and is not subject to review by any court or agency.


Sec.  100.8  Service.

    (a) All operators are required by part 41 (Notification of Legal 
Identity) of this chapter to file with MSHA the name and address of 
record of the operator. All representatives of miners are required by 
part 40 (Representative of Miners) of this chapter to file with MSHA 
the mailing address of the person or organization acting in a 
representative capacity. Proposed penalty assessments delivered to 
those addresses shall constitute service.
    (b) If any of the parties choose to have proposed penalty 
assessments mailed to a different address, the Office of Assessments 
must be notified in writing of the new address. Delivery to this 
address shall also constitute service.
    (c) Service for operators who fail to file under part 41 of this 
chapter will be upon the last known business address recorded with 
MSHA.

[FR Doc. 06-7512 Filed 9-5-06; 1:11 pm]
BILLING CODE 4510-43-U