20032 Federal Register / Vol. 63, No. 77 /Wednesday, April 22, 1998 /Rules and Regulations

DEPARTMENT OF LABOR

Mine Safety and Health Administration

30 CFR Part 100

RIN 1219–AA49

Criteria and Procedures for Proposed

Assessment of Civil Penalties

AGENCY: Mine Safety and Health

Administration, Labor.

ACTION: Final rule.

SUMMARY: This final rule revises the

Mine Safety and Health

Administration’s (MSHA’s) existing

civil penalty assessment amounts under

part 100. The rule also adds a new

provision which codifies the civil

penalty amounts that may be assessed

under §§ 110(a), 110(b), and 110(g) of

the Federal Mine Safety and Health Act

of 1977 (Mine Act). These changes are

made as a result of a mandate by

Congress in the Debt Collection

Improvement Act of 1996, which

requires that all civil penalties be

increased by up to 10 percent, and that

they be adjusted at least once every 4

years thereafter according to the formula

specified in the Federal Civil Penalties

Inflation Adjustment Act of 1990

(Inflation Adjustment Act).

EFFECTIVE DATE: This final rule is

effective June 22, 1998.

FOR FURTHER INFORMATION CONTACT:

Patricia W. Silvey, Director; Office of

Standards, Regulations, and Variances,

MSHA; 703–235–1910.

SUPPLEMENTARY INFORMATION:

I. Rulemaking Background

Under §§ 105(a) and 110 of the Mine

Act, MSHA is required to assess a civil

penalty for each violation of the Mine

Act and the mandatory safety and health

standards promulgated by the Agency.

The Mine Act originally provided in

1977 that the penalty for each violation

would not exceed $10,000, and that the

maximum penalty for failure to correct

a violation cited under § 104(a) within

the period permitted for its correction

would not exceed $1,000 for each day

that the violation continued to exist.

Miners who willfully violated the

mandatory safety standards relating to

smoking or the carrying of smoking

materials would be assessed a civil

penalty of not more than $250 for each

occurrence of such violation.

MSHA promulgated its first

regulations relating to civil penalty

assessments under the Mine Act on May

30, 1978 (43 FR 23514). This rule

included a penalty conversion table for

regular assessments based on the six

criteria enumerated in 30 CFR 100.3(a).

On May 21, 1982 (47 FR 22286), MSHA

promulgated a rule that revised its

regular assessment civil penalty table,

further defined the criteria for issuing

special assessments, and created a $20

single penalty assessment for those

violations that were not reasonably

likely to result in reasonably serious

injury or illness and which were abated

in a timely manner. There was no

provision in either rule relating to civil

penalties assessed for failing to abate

violations of the Mine Act or for

smoking or carrying smoking materials,

as these penalty amounts were set by

the Mine Act.

On November 5, 1990, the Omnibus

Budget Reconciliation Act of 1990

(Budget Act), Pub. L. 101–508, was

signed into law. Section 3102 of the

Budget Act amended the Mine Act and

raised the maximum MSHA civil

penalty per violation from $10,000 to

$50,000. The $1,000 per day civil

penalty for failure to correct a violation

under § 104(a) was raised to $5,000 per

day. The miner smoking penalty

remained at $250. Following the passage

of the Budget Act, MSHA published a

final rule on January 24, 1992 (57 FR

2968), as amended December 21, 1992

(57 FR 60690), which implemented the

penalty increases prescribed by the

Budget Act and accounted for inflation

since 1982. A new civil penalty

conversion table was published and the

$20 single penalty assessment was also

raised to $50.

Also in 1990, Congress passed Pub. L.

101–410, the Inflation Adjustment Act.

On April 26, 1996, the Omnibus

Consolidated Rescissions and

Appropriations Act of 1996 (OCRAA),

Pub. L. 104–131, was passed. Chapter 10

of the OCRAA, titled as the ‘‘Debt

Collection Improvement Act of 1996’’

(DCIA), modifies the Inflation

Adjustment Act and requires that the

head of each agency adjust by regulation

each civil monetary penalty provided

for by law within its jurisdiction

pursuant to the inflation adjustment

described under § 5 of the DCIA. The

first adjustment of a civil penalty may

not exceed 10 percent of the existing

penalty. The revised civil penalties will

apply only to those violations occurring

after the date the final rule takes effect.

On September 8, 1997, MSHA

published a proposed rule in the

Federal Register (62 FR 47330)

notifying the public of the Agency’s

mandate to increase civil penalties by

an amount not to exceed 10 percent of

the existing penalty amounts. The

rulemaking record closed on November

7, 1997. No requests for public hearings

were received. This final rule is based

on consideration of the entire

rulemaking record, including all written

comments received.

II. Discussion and Summary of the

Final Rule

A. General Discussion

In passing the DCIA, Congress

demonstrated its concern that civil

penalties be adjusted to produce desired

results. MSHA is increasing its civil

penalties in order to comply with

Congress’ mandate that agencies make

inflation adjustments in their civil

penalties.

Under § 5 of the Inflation Adjustment

Act, civil penalties are to be increased

by a cost-of-living adjustment. The

statute defines ‘‘cost-of-living

adjustment’’ as the percentage by which

the Consumer Price Index for the month

of June of the calendar year preceding

the adjustment exceeds the Consumer

Price Index for the month of June of the

calendar year in which the amount of

such civil monetary penalties was last

set or adjusted. The term ‘‘Consumer

Price Index’’ (CPI) means the Consumer

Price Index for all-urban consumers

published by the Department of Labor.

In order to determine the current costof-living adjustment for MSHA’s civil

penalties, MSHA made the following

calculations:

480.2 (the CPI for the month of June

1997, the calendar year preceding

the current adjustment)

419.9 (the CPI for the month of June

1992, the calendar year in which

the MSHA civil penalties were last

adjusted)

480.2/419.9 = 1.14 (inflation adjustment

factor)

1.14 * $100 (a hypothetical penalty

assessment) = $114 (new

assessment amount with full

inflation adjustment)

But using the maximum inflation

adjustment (10%) permitted by the

DCIA, this hypothetical penalty

assessment would be $110 (1.10 * $100)

In order to determine the current costof-living adjustment for the miner

smoking penalty, MSHA made the

following calculations:

480.2 (the CPI for the month of June

1997, the calendar year preceding

the current adjustment)

195.3 (the CPI for the month of June

1978, the calendar year in which

the civil penalty was last adjusted)

480.2/195.3 = 2.5 (inflation adjustment

factor)

2.50 * $250 (the smoking penalty

assessment) = $625 (new

assessment amount with full

inflation adjustment)

But using the maximum inflation

adjustment (10%) permitted by the
Federal Register / Vol. 63, No. 77 /Wednesday, April 22, 1998 /Rules and Regulations 20033

DCIA, penalty assessment would be

$275 (1.10 * $250)

One commenter generally agreed with

the provisions of the proposed rule and

supported the increase of monetary

penalties. The commenter also

suggested that the Agency quickly and

efficiently implement the provisions of

the proposed rule.

Another commenter stated that the

proposed rule and the resulting increase

in monetary penalties are excessive,

especially for small companies. The

adjustments contained in the final rule

are Congressionally mandated and,

therefore, agencies have no discretion to

consider lower increases in penalties for

small businesses. However, one

criterion considered by MSHA when

assessing civil penalties by the regular

formula under 30 CFR 100.3(a)(1) is the

size of the mine and the size of the

controlling entity. A second criterion

considered by MSHA is the mine

operator’s ability to continue in

business. MSHA begins with the

assumption that the civil penalty will

not affect a mine operator’s ability to

continue in business. The burden is on

the mine operator to demonstrate

financial hardship. MSHA then reviews

any financial documentation submitted

by the mine operator and makes a

determination as to whether the

proposed penalty should be adjusted.

Two commenters suggested that

MSHA modify part 100 to allow for

penalty offsets or credits for those coal

companies that maintain mine rescue

teams. The commenters added that

companies which continue to maintain

mine rescue teams are at a competitive

disadvantage with other coal

companies. These commenters

suggested that the Agency is presently

considering crediting mining companies

with mine rescue teams by

automatically reducing their assessed

civil penalties. Therefore, these

commenters requested that MSHA

extend the comment period or leave the

rulemaking record open while this issue

is being considered. One of the

commenters also added that civil

penalties could, and should, be used in

part to fund some state agency mine

rescue teams. While the Agency

recognizes the importance of mine

rescue teams and the significant role

they play in ensuring miners’ health and

safety, the issue is beyond the scope of

this rulemaking. Moreover, MSHA is

presently not considering reducing civil

penalties assessed to mining companies

with mine rescue teams. MSHA does,

however, plan to continue to provide

funding through its State Grants

program. Portions of this MSHA funding

program are used by some states for

maintaining mine rescue teams.

B. Section-by-Section Analysis

The following section-by-section

analysis explains the final rule and its

effect on existing standards.

Section 100.3 Determination of

Penalty Amount; Regular Assessment

Paragraph (a) of this section is

amended to codify § 110(a) of the Mine

Act. This revision also reflects the

increase of the maximum civil penalty

from $50,000 to $55,000 per violation.

Existing paragraph (g) of this standard

includes a revised penalty conversion

table in which points assigned for each

criterion enumerated in this section are

totaled and a correlating civil penalty is

determined. Current penalties range

from $60 to $50,000. New paragraph (g)

reflects the 10 percent maximum

penalty increase prescribed by the

DCIA, and civil penalties have been

adjusted accordingly. Civil penalties in

the final table range from $66 to

$55,000.

Section 100.4 Determination of

Penalty; Single Penalty Assessment

The single penalty assessment under

the final rule is increased from the

existing $50 to $55, which reflects a 10

percent maximum increase.

Section 100.5 Determination of

Penalty; Special Assessment

This section pertains to violations

which are of such a nature or

seriousness that MSHA cannot

determine an appropriate penalty using

the regular assessment formula or the

single assessment provision. The special

assessment penalty is determined by

experienced Agency mine safety and

health specialists, based on the facts and

circumstances of each case. Prior to a

special assessment, Agency field

personnel review certain categories of

violations for special assessment.

This section also addresses penalties

which may be assessed daily to an

operator for failure to correct a violation

within the period permitted for its

correction. The existing maximum daily

civil penalty is increased from $5,000 to

$5,500.

Finally, this section addresses

penalties which MSHA may assess

miners who willfully violate mandatory

safety standards relating to the use or

carrying of smoking materials

underground. This current penalty of

$250 is increased in the final rule to

$275.

III. Executive Order 12866

In accordance with Executive Order

12866, MSHA has prepared a Regulatory

Impact Analysis (RIA) of the estimated

costs and benefits associated with the

revisions of the criteria and procedures

for proposed assessment of civil

penalties.

The RIA containing this analysis is

available from MSHA. The Agency

estimates that the final rule will result

in increased costs to the mining

industry of about $2.6 million annually.

Based upon the RIA, MSHA has

determined that this rule is not an

economically significant regulatory

action pursuant to § 3(f)(1) of Executive

Order 12866.

IV. Paperwork Reduction Act

This final rule contains no

information collections which are

subject to review by the Office of

Management and Budget (OMB) under

the Paperwork Reduction Act of 1995.

V. Regulatory Flexibility Act

In accordance with § 605 of the

Regulatory Flexibility Act (RFA), MSHA

certifies that the civil penalty rule does

not have a significant economic impact

on a substantial number of small

entities. This final regulation does no

more than codify existing law and

mechanically increase certain civil

money penalties to account for inflation,

pursuant to specific directions set forth

in the Federal Civil Penalties Inflation

Adjustment Act, as amended. The

statute specifies the procedure for

calculating the adjusted civil money

penalties and does not allow the

Department to vary the calculation to

minimize the effect on small entities.

Moreover, the actual amount of the

increase in penalties would not meet the

threshold set forth in the Regulatory

Flexibility Act. MSHA discusses its

quantitative analysis warranting this

conclusion below.

In the past, MSHA considered small

mines to be mines with fewer than 20

employees. However, for the purposes

of the RFA and this certification, MSHA

has also evaluated the impact of the

final rule on mines with 500 employees

or fewer. About 350 small governmental

jurisdictions may be affected. Under the

Small Business Regulatory Enforcement

Fairness Act (SBREFA) amendments to

the RFA, MSHA must include in the

final rule a factual basis for this

certification. The Agency is publishing

the regulatory flexibility certification

statement in the Federal Register, along

with the factual basis. The Agency has

provided the Small Business

Administration (SBA) Office of
20034 Federal Register / Vol. 63, No. 77 /Wednesday, April 22, 1998 /Rules and Regulations

Advocacy a copy of the certification

statement.

MSHA will also mail a copy of the

final rule, including the preamble and

certification statement, to mine

operators and miners’ representatives.

The final rule will also be available on

MSHA’s Website.

Factual basis for certification. MSHA

explains below the Agency’s

quantitative approach in reaching its

conclusion on the impact of the

statutory provisions, as implemented by

the rule. The Agency performed its

analysis separately for two groups of

mines: coal mines and metal/nonmetal

mining operations.

Under the SBREFA amendments to

the RFA, MSHA must use the SBA

definition for a small mine of 500

employees or fewer or, after

consultation with the SBA Office of

Advocacy, establish an alternative

definition for the mining industry by

publishing that definition in the Federal

Register for notice and comment. The

alternative definition could be the

Agency’s traditional definition of ‘‘fewer

than 20 miners,’’ or some other

definition. As reflected in the

certification, MSHA analyzed the costs

of this final rule for small and large

mines using both the traditional Agency

definition and SBA’s definition, as

required by RFA. The Agency compared

the costs of the final rule for small

mines in each sector to the revenues for

each sector for every size category

analyzed. In each case, the results

indicated that the costs as a percent of

revenue are less than 1 percent.

One commenter stated that the SBA

defines the small business entity for

Standard Industrial Code (SIC) 3241 as

those employing 750 persons or less.

SIC code 3241 includes establishments

primarily engaged in manufacturing

hydraulic cement, including portland

cement. The commenter stated that of

the 45 manufacturers of portland

cement, nine qualified as small entities

under this SBA definition. The

commenter also requested that MSHA

use this definition in all proposed rules.

MSHA recognizes this SBA definition

for businesses engaged in this type of

mining. In this instance, however, the

mandate by Congress in the DCIA to

increase civil penalties applies across

the board to all mine operators.

Therefore, although some manufacturers

of portland cement would be considered

small mines under the SBA definition,

they are still covered by the final rule.

The following table summarizes the

results of the analysis.

MINES: COSTS COMPARED TO REVENUES

Number of

mines

Estimated cost

of final rule

Estimated

revenue

(millions)

Estimated

cost per

mine

Cost as % of

revenue

COAL MINES:

Small <20 ..................................................................................... 1617 $1,149,957 $836 $711 0.14

Large >=20 .................................................................................. 1044 742,459 18,672 711 0.004

Small= <500 ................................................................................ 2650 1,884,593 18,689 711 0.01

Large >500 .................................................................................. 11 7,823 819 711 0.001

All Mines ...................................................................................... 2661 1,892,416 19,508 711 .01

M/NM MINES:

Small <20 ..................................................................................... 9238 584,462 11,929 63 0.005

Large >=20 .................................................................................. 1543 97,558 26,071 63 0.000

Small= <500 ................................................................................ 10,751 680,185 32,134 63 0.002

Large >500 .................................................................................. 29 1,835 5,866 63 0.000

All Mines ...................................................................................... 10,780 682,020 38,000 63 0.002

In determining revenues for coal

mines, MSHA multiplied coal

production data (in tons) for mines in

specific size categories (reported to

MSHA quarterly) by the average price

per ton for coal as determined in the

Coal Industry Annual 1996. (Published

by the Department of Energy’s Energy

Information Administration.) MSHA

obtained revenue data for metal and

nonmetal mines from the Mineral

Commodities Summaries 1996.

(Published by the U.S. Department of

the Interior.)

VI. Unfunded Mandates

The Unfunded Mandates Reform Act

was enacted in 1995. While much of the

Act is designed to assist the Congress in

determining whether its actions will

impose costly new mandates on State,

local, and tribal governments, the Act

also includes requirements to assist

Federal agencies to make this same

determination with respect to regulatory

actions.

MSHA has determined that, for

purposes of § 202 of the Unfunded

Mandates Reform Act of 1995, this final

rule does not include any Federal

mandate that may result in increased

expenditures by State, local, or tribal

governments in the aggregate of more

than $100 million, or increased

expenditures by the private sector of

more than $100 million. Moreover, the

Agency has determined that for

purposes of § 203 of that Act, this final

rule does not significantly or uniquely

affect these entities.

Analysis. Based on the analysis in the

Agency’s Final Regulatory Impact

Statement, the cost of this final rule is

estimated to be about $2.6 million.

Accordingly, there is no need for further

analysis under § 202 of the Unfunded

Mandates Reform Act.

MSHA has concluded that small

governmental entities are not

significantly or uniquely impacted by

the final rule. The final rule will impact

about 2,700 coal operations and 10,800

metal and nonmetal mining operations

of which approximately 350 sand and

gravel or crushed stone operations are

run by state, local, or tribal governments

for the construction and repair of

highways and roads. Of these entities,

only those which are assessed a civil

penalty will incur additional costs

related to this final rule. These costs,

however, would be minimal.

Notwithstanding this conclusion,

MSHA will mail a copy of the final rule

to these 350 entities.

VII. Executive Order 13045

In accordance with Executive Order

13045, MSHA has evaluated the

environmental health or safety effects of

the rule on children. The Agency has

determined that the final rule will have

no effects on children.

List of Subjects in 30 CFR Part 100

Mine safety and health, Penalties.
Federal Register / Vol. 63, No. 77 /Wednesday, April 22, 1998 /Rules and Regulations 20035

Dated: April 15, 1998.

J. Davitt McAteer,

Assistant Secretary for Mine Safety and

Health.

Part 100, subchapter P, chapter I, title

30 of the Code of Federal Regulations is

amended as follows:

PART 100—CRITERIA AND

PROCEDURES FOR PROPOSED

ASSESSMENT OF CIVIL PENALTIES

1. The authority citation for part 100

continues to read as follows:

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

2. Section 100.3 is amended by

revising the introductory text of

paragraph (a) and revising paragraph (g)

to read as follows:

§ 100.3 Determination of penalty amount;

regular assessment.

(a) General. The operator of any mine

in which a violation occurs of a

mandatory health or safety standard or

who violates any other provision of the

Mine Act, shall be assessed a civil

penalty of not more than $55,000. Each

occurrence of a violation of a mandatory

safety or health standard may constitute

a separate offense. The amount of the

civil penalty proposed shall be based

upon the formula set forth in this

section. The formula is based on the

general criteria described in sections

105(b) and 110(i) of the Mine Act. These

criteria are:

* * * * *

(g) Penalty conversion table. The

following penalty conversion table shall

be used to convert the accumulation of

penalty points to the appropriate

proposed monetary assessment.

PENALTY CONVERSION TABLE

Points Penalty ($)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PENALTY CONVERSION TABLE—

Continued

Points Penalty ($)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PENALTY CONVERSION TABLE—

Continued

Points Penalty ($)

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

* * * * *

3. Section 100.4 is amended by

revising paragraph (a) to read as follows:

§ 100.4 Determination of penalty; single

penalty assessment.

(a) An assessment of $55 may be

imposed as the civil penalty where the

violation is not reasonably likely to

result in a reasonably serious injury or

illness (non-S&S) and is abated within

the time set by the inspector.

(1) If the violation is not abated

within the time set by the inspector, the

violation will not be eligible for the $55

single penalty and will be processed

through either the regular assessment

provision (§ 100.3) or special assessment

provision (§ 100.5).

(2) If the violation meets the criteria

for excessive history under § 100.4(b),

the violation will not be eligible for the

$55 single penalty and will be processed

through the regular assessment

provision (§ 100.3).

* * * * *

4. Section 100.5 is amended by

redesignating paragraphs (a) through (h)

as paragraphs (a)(1) through (8);

redesignating the introductory text as

paragraph (a) and the concluding text as

paragraph (b); and by adding new

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

§ 100.5 Determination of penalty; special

assessment.

* * * * *

(c) Any operator who fails to correct

a violation for which a citation has been

issued under Sec. 104(a) of the Act

within the period permitted for its

correction may be assessed a civil

penalty of not more than $5,500 for each

day during which such failure or

violation continues.

(d) Any miner who willfully violates

the mandatory safety standards relating

to smoking or the carrying of smoking

materials, matches, or lighters shall be

subject to a civil penalty which shall not

be more than $275 for each occurrence

of such violation.

[FR Doc. 98–10688 Filed 4–21–98; 8:45 am]

BILLING CODE 4510–43–P