Criteria and Procedures for Proposed Assessment of Civil Penalties;
Final Rule
[03/22/2007]
Volume 72, Number 55, Page 13591-13646
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Part IV
Department of Labor
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Mine Safety and Health Administration
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30 CFR Part 100
Criteria and Procedures for Proposed Assessment of Civil Penalties;
Final Rule
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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: Final rule.
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SUMMARY: This final rule revises MSHA's existing civil penalty
assessment regulations and implements the civil penalty provisions of
the Mine Improvement and New Emergency Response (MINER) Act of 2006.
This final rule will increase mine operator compliance with the
Federal Mine Safety and Health Act of 1977 (Mine Act), as amended by
the MINER Act, and the agency's safety and health standards and
regulations, thereby improving safety and health for miners.
DATES: Effective Date: This final rule is effective April 23, 2007.
FOR FURTHER INFORMATION CONTACT: Patricia W. Silvey, Director, Office
of Standards, Regulations, and Variances, MSHA, 1100 Wilson Boulevard,
Room 2350, Arlington, Virginia 22209-3939, silvey.patricia@dol.gov,
202-693-9440 (telephone), or 202-693-9441 (facsimile).
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of Final Rule
A. General Discussion
B. Section-by-Section Analysis
III. Executive Order 12866
A. Population at Risk
B. Costs
C. Benefits
IV. Feasibility
A. Technological Feasibility
B. Economic Feasibility
V. Regulatory Flexibility Act and Small Business Regulatory
Enforcement Fairness Act (SBREFA)
A. Definition of Small Mine
B. Factual Basis for Certification
VI. Paperwork Reduction Act of 1995
VII. 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
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. Executive Order 13272: Proper Consideration of Small Entities
in Agency Rulemaking
I. Background
On September 8, 2006, MSHA published a proposed rule to revise its
civil penalty regulations (71 FR 53054). MSHA received written comments
in response to the proposed rule. In addition, the agency held six
public hearings on September 26, 2006 in Arlington, Virginia, September
28, 2006, in Birmingham, Alabama, October 4, 2006, in Salt Lake City,
Utah, October 6, 2006, in St. Louis, Missouri, October 17, 2006, in
Charleston, West Virginia, and October 19, 2006, in Coraopolis,
Pennsylvania. The comment period closed on October 23, 2006. On October
26, 2006, MSHA reopened and extended the comment period to November 9,
2006 (71 FR 62572). MSHA reopened the comment period to restate and
clarify language in the proposed rule pertaining to the proposed
deleting of the existing single penalty assessment provision. MSHA
clarified that violations that would have been processed under the
single penalty provision of the existing rule would, under the proposed
rule, be processed under the regular assessment provision.
In addition, MSHA reopened the comment period to provide interested
persons additional time to comment on an issue that was raised at the
public hearings in Charleston, West Virginia, and Pittsburgh,
Pennsylvania, pertaining to safety and health conferences. MSHA stated
that it intended to include a requirement in the final rule that a
request for a safety and health conference be in writing and include a
brief statement of the reason why each citation or order should be
conferenced.
The section-by-section analysis of the final rule addresses issues
raised by comments and testimony.
II. Discussion of the Final Rule
A. General Discussion
This final rule results in an across-the-board increase in
penalties from the existing regulations; however, penalties increase
more significantly for large mine operators, operators with a history
of repeated violations of the same standard and for operators whose
violations involve high degrees of negligence or gravity. The higher
penalties in the final rule are intended to increase the incentives for
mine operators to prevent and correct violations.
MSHA notes that under the Federal Civil Monetary Penalty Inflation
Adjustment Act of 1990 (Inflation Adjustment Act), as amended by the
Debt Collection Improvement Act of 1996, the Agency is required to
review and, as warranted, adjust penalties based on inflation at least
every four years. On June 15, 2006, the MINER Act was enacted and
amended section 110 of the Mine Act raising the maximum civil penalty
to $220,000 for violations that are deemed to be flagrant. This final
rule codifies the maximum penalty of $220,000 for flagrant violations.
In addition, the MINER Act established minimum penalties of $2,000 and
$4,000 for unwarrantable failure violations, and minimum penalties for
failure to timely notify violations. Although this final rule does not
increase the $60,000 maximum civil penalty for non-flagrant violations,
the effect of the across-the-board penalty increases from the existing
regulations is tantamount to an inflation adjustment. Due to these
penalty increases, the penalties in this final rule will not be
adjusted under the Inflation Adjustment Act until 2011.
MSHA received numerous comments in support of and opposed to the
proposed rule. Many commenters stated that the proposed penalty
increases were unnecessary because between 1990 and 2005, both injuries
and fatalities have steadily declined. Other commenters stated that the
proposed increased penalties will not induce greater compliance with
the Mine Act or MSHA's safety and health standards and regulations.
Some of these commenters stated that the proposed increases will merely
result in operators diverting money from safety and health programs to
penalty payments. Other commenters expressed concern that MSHA did not
provide evidence that increased penalties would result in increased
compliance and requested that MSHA immediately release all of the
citation and accident history data necessary to do a thorough analysis
of the premise underlying the Agency's proposal. One commenter stated
the example that in the year following MSHA's increase in penalties in
2003, the number of citations actually increased by approximately 10%,
from 110,038 to 121,225, and that that trend continued in 2005, when
the number of citations again increased to 128,225. MSHA used 2005
assessed violation data as the baseline for its calculations of the
[[Page 13593]]
impact of both the proposed and final rules. The Agency has placed this
2005 violation data in the rulemaking record.
Although some commenters stated that increasing penalties will not
result in increased compliance by operators, MSHA's experience shows
that penalties are an important tool in reducing fatalities, injuries,
illnesses, and violations. The Supreme Court recognized that civil
penalties provide a ``deterrence'' that necessarily infrequent
inspections cannot generate. National Independent Coal Operators' Ass'n
v. Kleppe, 423 U.S. 388, 401 (1976) (speaking of the Federal Coal Mine
Health and Safety Act of 1969 (Coal Act)).
The Agency recognizes that civil penalties alone may not
significantly affect compliance with the Mine Act and MSHA's safety and
health standards and regulations or reduce the number of mining
accidents and injuries. The reductions in accidents and injuries that
have been achieved since the civil penalty regulation was originally
implemented are the result of a combination of factors such as stronger
enforcement, changes in mining technology, improved training, accident
reduction initiatives, compliance assistance activities, better safety
and health programs and more attention to them on the part of mine
management and miners, and the continued issuance of citations and
orders and related civil penalties.
In addition, the Agency recognizes that the citations and orders
are issued to induce miner operators to correct hazardous conditions
thus reducing miners' exposure. Experience and data show that far
greater resources are associated with the correction of hazardous
conditions than payment of a civil penalty. Correcting the hazardous
condition may require an interruption in production or other scheduled
activities, necessitating change in personnel and equipment.
Nonetheless, civil penalties have contributed to improvements in
fatalities and accident and injury rates in the mining industry. MSHA
reviewed the Agency's accident and injury statistics for metal and
nonmetal mines from 1973 to 2005. Since 1977, the year that the civil
penalty sanction was applied to metal and nonmetal mining operations,
the incidence rate for fatal injuries declined, and the incidence rate
for the total of fatal injuries, non-fatal days lost injuries, and no
days lost injuries also declined.
In October 1977, when Congress discussed adopting mandatory civil
penalties for metal and nonmetal mines under the Mine Act, the Senate
Committee on Human Resources (Committee) discussed the relative
improvements in rates of fatal and serious non-fatal occurrences in the
coal industry, where civil penalties had been mandatory since 1970,
versus the non-coal segment of the industry, where there had been no
provision for civil penalties, mandatory or permissive. Comparing the
fatal and disabling injury rates between coal mines and metal and
nonmetal mines for the years 1966 through 1976, the Committee found
that the comparison:
suggests clearly that even if the civil penalty system under the
Coal Act has not been totally effective in implementation, the
presence of the civil penalty sanction has resulted in substantial
improvements which are not noted in the non-coal segment of the
industry under the Metal Act.
S. Rep. No. 95-181, at 41 (1977).
MSHA's approach under this final rule is consistent with the intent
of the drafters of the Mine Act. One of the goals of revising the civil
penalty regulations in this final rule is to place more emphasis on the
most severe violations, such as those contributing to accidents and
injuries, and the most severe violators, such as those operators who
exhibit high levels of negligence. MSHA has achieved this goal by
revising the point tables for Negligence and Gravity-Severity and -
Likelihood, so that the more severe violations will receive civil
penalties at levels more likely to induce the operator's compliance.
Penalties are one of many tools that Congress approved to ensure
``a safe and healthful'' workplace for miners. Congress's intent was
that civil penalties under the Mine Act be used to ``induce those
officials responsible for the operation of a mine to comply with the
Act and its standards.'' S. Rep. No. 95-181, at 41. Civil penalties
were singled out by the sponsors of the Mine Act as ``the mechanism for
encouraging operator compliance with safety and health standards.'' 123
Cong. Rec. 4388 (1977) (Feb. 11, 1977) (statement of Sen. Williams).
MSHA has structured the final rule so that increased penalties will
induce operators to be more proactive in their approach to miner safety
and health and will lead to overall safety and health improvements.
Increasing penalties is consistent with Congress's intent that
penalties:
be of an amount which is sufficient to make it more economical for
an operator to comply with the Act's requirements than it is to pay
the penalties assessed and continue to operate while not in
compliance.
S. Rep. No. 95-181, at 41.
In response to comments that stated that the proposed penalty
increases were unnecessary because injuries and fatalities have
steadily declined since 1990, MSHA notes that the Mine Act has resulted
in significant improvements in the health and safety of miners.
Nevertheless, a review of MSHA's historical data shows a high number of
fatal accidents in 2006--47 fatalities in coal mines and 25 fatalities
in metal and nonmetal mines--and a rising number of violations in the
past three years, including a rising number of violations of the same
standard and a rise in the number of serious violations.
Several commenters supported increased penalties, but stated that
the proposed increases were not sufficiently high to provide operators
with enough compliance incentive. In support of this statement, these
commenters provided the example that a violation that receives 50
points under the existing regulations would only receive the minimum
penalty under the penalty conversion table in the proposed rule. MSHA
notes that points assigned in the penalty tables for each of the
statutory criteria have been changed in the proposed rule and, that
this change prevents accurate comparisons between points assigned in
the penalty tables under the existing regulation with the penalty
conversion table in the proposed rule. Using the commenters' example,
the 774 violations that received 50 penalty points under the penalty
tables of the existing regulation received an average penalty of $636
(including a 30% discount for good faith, where applicable). These same
violations would receive an average of 93 penalty points under the
penalty tables in the proposed rule and would receive an average
penalty of $2,134 (including a 10% discount for good faith, where
applicable).
Several commenters stated that the proposed penalty increases were
too high. These commenters provided MSHA with specific examples
comparing penalties under the existing rule with projected penalties
under the proposed rule. MSHA is impressed with the specific examples
they submitted which included thoughtful analysis and attention to
detail. MSHA has analyzed these examples using its data for 2005
assessed violations. MSHA notes that its data is comprised of all
violations that were assessed in 2005. Some commenters may have
submitted specific examples that relied on the issuance date rather
than the assessment date of the violation. MSHA's analysis shows the
following for some of the specific examples submitted by commenters.
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1. Jim Walter Resources, Inc., (JWR) submitted summary estimates
for Mine Number 4 and Mine Number 7. Regarding Mine Number 4, JWR
stated that total penalties for 2005 were $97,288 and projected that
penalties under the proposal would be $421,521, an increase of 333%.
MSHA's analysis shows that total penalties assessed in 2005 for this
mine were $128,540 and that the amount under the proposed rule would be
$421,128, an increase of 228%. Under the final rule, the total
penalties would be $344,423 or an increase of 168%.
Regarding Mine Number 7, JWR stated that total penalties for 2005
were $55,131 and projected that penalties under the proposal would be
$286,389, representing an increase of 419%. MSHA's analysis shows that
total penalties assessed in 2005 for this mine were $65,775 and that
the amount under the proposed rule would be $378,907, an increase of
476%. Under the final rule, the total penalties would be $333,559 which
is an increase of 407%. MSHA notes that the increase in penalties for
Mine Number 7 as compared to Mine Number 4 is predominantly
attributable to the difference in the number of penalty points for
violations per inspection day. In addition, as stated above, MSHA's
analysis is based on violations that were assessed in 2005 even though
the violation may have been issued in a different year.
2. Peabody Energy (Peabody) provided projections of penalties for
``typical'' Sec. 75.400 violations stating that if the single penalty
is eliminated and penalties are solely based on points, large operators
will be at an extreme disadvantage due to their sheer size and
production. In each example, the size of the mine is over two million
tons, the size of controlling entity is over 10 million tons, the
history consists of a VPID exceeding 2.1 and more than 20 violations of
the same standard, and the gravity consists of one person potentially
affected. The first example involves a non-significant and substantial
(non-S&S) violation: moderate negligence, ``unlikely'' occurrence, and
``lost work days or restricted duty.'' Peabody projected that under the
proposed rule this violation would incur 106 penalty points for an
initial proposed penalty of $4,440, which would be offset by a $444
reduction for timely abatement, resulting in a total penalty of $3,996.
The second example involves an S&S violation: moderate negligence,
``reasonably likely'' to occur, and ``lost work days or restricted
duty.'' Peabody projected that under the proposed rule this violation
would incur 126 penalty points for an initial proposed penalty of
$21,993, which would be offset by a $2,199 reduction for timely
abatement, resulting in a total penalty of $19,794.
The third example involves an S&S violation: High negligence,
``reasonably likely'' to occur, and ``lost work days or restricted
duty.'' Peabody projected that under the proposed rule this violation
would incur 141 penalty points for an initial proposed penalty of
$60,000 which would be offset by a $6,000 reduction for timely
abatement, resulting in a total penalty of $54,000.
MSHA reviewed its 2005 assessment violation data for all Sec.
75.400 violations issued for Peabody's largest mines in 2005. MSHA
calculated the average total penalty points and average proposed
penalties under the existing, proposed, and final rules for Peabody
mines that received maximum points for mine size. The results of MSHA's
analysis are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR22MR07.000
MSHA's analysis shows that under the existing rule, the total
average points for all non-S&S Sec. 75.400 violations was 43,
resulting in an average proposed penalty of $68. MSHA's analysis
revealed total average points for all S&S Sec. 75.400 violations of
47, resulting in an average proposed penalty of $576.
Under the proposed rule, MSHA's analysis shows that the total
average points for all non-S&S Sec. 75.400 violations was 87,
resulting in an average proposed penalty of $874, which includes the
``good faith'' reduction. MSHA's analysis revealed total average points
for all S&S Sec. 75.400 violations of 106, resulting in an average
proposed penalty was $3,996, which includes the ``good faith''
reduction.
Under the final rule, MSHA's analysis shows that the total average
points for all non-S&S Sec. 75.400 violations was 82, resulting in an
average proposed penalty of $586. MSHA's analysis revealed total
average points for all S&S Sec. 75.400 violations of 102, resulting in
an average proposed penalty of $2,902, which includes the ``good
faith'' reduction.
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Peabody also submitted a fourth example showing the ``cheapest
typical non-S&S'' violation. In this example, the size of mine is over
two million tons, the size of controlling entity is over 10 million
tons, the history consists of a VPID exceeding 2.1 and five or fewer
repeat violations in the last 15 months, moderate negligence, an
``unlikely'' occurrence, a severity of ``lost work days or restricted
duty,'' and one person potentially affected. Peabody projected that,
under the proposed rule, such a violation would incur 86 penalty points
for an initial proposed penalty of $897 which would be offset by a $90
reduction for timely abatement, resulting in a total penalty of $807.
MSHA's analysis of an average non-S&S violation for Peabody mines with
maximum points for mine size shows that under the existing rule, the
average proposed penalty was $68, under the proposed rule, the average
proposed penalty was $874, and under the final rule, the average
proposed penalty was $586.
3. Pennsylvania Coal Association stated that the removal of the
single penalty assessment will greatly increase penalties for non-S&S
violations that present no real degree of hazard. Pennsylvania Coal
gave the example that under the proposal, a section 104(a), non-S&S
violation with moderate negligence, 1.1 violations per inspection day,
production over two million tons per year, an unlikely likelihood of
occurrence, a severity of lost work days, and two persons potentially
affected would receive a penalty of $512, more than 8 times the $60
single penalty under the existing rule. Under MSHA's analysis, assuming
three points for size of the controlling entity, the penalty for this
violation would be $212 under the proposed rule, or $190 with the
``good faith'' reduction, an increase of 216%. Under the final rule,
assuming five points for size of the controlling entity, the penalty
for this violation would be $196 or $176 with the ``good faith''
reduction.
Pennsylvania Coal further stated that it believed that penalties
under the proposal would result in an increase of 10 times over the
existing penalties for commonly cited violations. Pennsylvania Coal
provided the example that if the severity of the injury in the
foregoing violation were permanently disabling and there was a
``repeat'' history of 10 points, the penalty would increase to $1,140.
Under MSHA's analysis, assuming three points for size of the
controlling entity, the penalty for this violation would be $473 under
the proposed rule, or $425 with the ``good faith'' reduction, an
increase of 7 times over the existing penalty. Under the final rule,
assuming five points for size of the controlling entity, the penalty
would be $651 or $586 with the ``good faith'' reduction.
After analyzing the commenters' projected penalties, MSHA agrees
that the penalty increases can be substantial under the proposed rule;
however, in many instances, the increases are not as great as
commenters projected. This is due to a number of reasons including data
based on issued rather than assessed violations, and use of
hypothetical violations with sometimes incomplete data. The Agency
believes that the penalty increases in the final rule are consistent
with Congressional intent and are at an appropriate level to increase
operator compliance with the Mine Act and MSHA's safety and health
standards and regulations.
MSHA discussed the regulatory impact analysis in support of the
proposed rule in Section IV of the preamble to the proposed rule. The
analysis of costs contained three inadvertent errors: (1) MSHA used the
wrong employment size for a few independent contractor violations; (2)
there was a small error in the formula for calculating the history for
repeat violations; and (3) violation history penalty points were
improperly assigned to operators with fewer than 10 violations over the
previous 15-month period. The net effect of these errors was to
underestimate the impact of costs of the proposal by about 2%. These
errors have been corrected in MSHA's analysis of the final rule. A more
detailed explanation is provided later in Section III (Executive Order
12866) of this preamble, and any data referenced by MSHA in support of
the proposed rule reflect the corrections.
Some commenters expressed concern that MSHA does not use the Small
Business Administration (SBA) definition of small business, creating an
unfair trade disadvantage for crushed stone, sand, and gravel mines,
which tend to be smaller mines. 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
established such an alternative definition 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 impact of agency rules on a subset of
mines with 500 or fewer employees, i.e., those with fewer than 20
employees, which MSHA and the mining community traditionally have
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. Because of these factors, their
costs of complying with MSHA's rules and the impact of the agency's
rules on them also will tend to be different. It is for this reason
that ``small mines,'' traditionally defined by MSHA as those employing
fewer than 20 workers, are of special concern to MSHA. In addition, for
this final rule, MSHA has examined the cost on mines with five or fewer
employees to ensure that they are not significantly and adversely
impacted by the final rule.
In the final rule, MSHA has carefully evaluated all of the comments
and concerns. The Agency has revised some of the proposed provisions to
reflect many of the commenters' concerns. MSHA's primary objective
continues to be to develop and issue a final rule which promotes
operator compliance with the Mine Act and MSHA's standards and
regulations and thereby reduces violations and injuries, illnesses and
fatalities in mines. By establishing more serious consequences for
noncompliance with the Mine Act and MSHA's safety and health standards
and regulations, the highest penalties under this final rule are
directed towards those mine operators who continually allow hazardous
conditions to exist. The final rule aims to direct mine operators who
violate the Mine Act and MSHA's safety and health standards and
regulations toward a more proactive approach to miner safety and
health.
B. Section-by-Section Analysis
Scope and Purpose (Sec. 100.1)
Final Sec. 100.1, like the existing rule, sets forth the scope and
purpose of the final rule. It provides the criteria and procedures that
MSHA uses to propose civil penalties under sections 105 and 110 of the
Mine Act. Final Sec. 100.1, like the existing rule, provides that the
purpose of this rule is to: establish a fair and equitable procedure
for the application of the statutory criteria in determining proposed
penalties for violations; maximize the incentives for mine operators to
prevent and correct hazardous conditions; and assure the prompt and
efficient processing and collection of penalties.
Some commenters suggested that the final rule should be limited to
the specific penalties mandated by the
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MINER Act and that MSHA either should withdraw the proposed rule or
delay promulgating a final rule and appoint an advisory committee to
evaluate other aspects of the proposed rule before moving forward. In
addition, some commenters expressed the opinion that Congress's silence
in the MINER Act with respect to civil penalties other than those
specifically mentioned indicated that Congress generally was satisfied
with MSHA's existing penalty regulations. These commenters stated that
MSHA should follow the clear and unmistakable direction provided by
Congress and limit the final rule to only those penalty provisions
included in the MINER Act. Other commenters opposed the appointment of
an advisory committee to review civil penalties stating that it would
be only a delay tactic.
Although Congress mandated only certain penalties under the MINER
Act, it did so by amending the Mine Act and providing the Secretary
with additional tools ``to improve the safety of mines and mining.'' PL
109-236, 120 Stat. 493 (June 15, 2006). MSHA has determined that there
would be no benefit for miner safety and health by convening an
advisory committee. The final rule is consistent with both the Mine Act
and MINER Act's goals to improve miner safety and health through the
use of effective civil penalties. In response to comments, and
consistent with the MINER Act, under the final rule, operators who
exhibit a lack of commitment to miner safety and health will receive
the greatest increase in penalties.
Some commenters opposed the proposed rule's across-the-board
penalty increases, stating that this was a one-size-fits-all approach
that unfairly penalized operators with good safety records.
Specifically, a number of sand and gravel operators commented that the
proposed increases should be limited to coal mines because disasters in
coal mines generated changes in the MINER Act. These commenters further
stated that coal mines pose greater health and safety hazards to miners
and that such mines experience a higher number of violations. Some
small sand and gravel operations further commented that the proposed
increases were excessively high and would put them out of business.
These commenters provided no specific data in support of their
conclusion. Under the final rule, MSHA estimates that metal and
nonmetal operators, which include small sand and gravel operators, with
one to five employees would average a yearly increase of $149 per mine,
compared to $213 for those with one to 20 employees.
Under the final rule, like the existing rule, the size of the
mining operation and the effect of a penalty on an operator's ability
to continue in business are two of the statutory factors taken into
consideration in determining penalties. MSHA's goal for this final rule
is that all mine operators, consistent with the statutory purpose, will
be in compliance with the Mine Act and Agency safety and health
standards and regulations. In addition, consistent with the MINER Act,
the Agency projects that operators who are the worst safety and health
offenders will experience the largest penalty increases under the final
rule.
One commenter expressed concern that the proposed rule did not
provide equitable procedures for the application of the statutory
criteria in determining proposed penalties because the proposed rule
treated small mines differently from large mines and because it treated
coal mines differently from metal and non-metal mines. MSHA does not
agree that its application of the mine size penalty criteria is
inequitable. Under the final rule, like the existing rule, the points
and the penalties increase as the size of the operator or its parent
company grows. In doing so, MSHA is assuring optimal consistency in
accordance with Congressional intent in applying the statutory criteria
pertaining to the size of the operator's business.
Historically, MSHA has treated coal mining operations differently
from metal and nonmetal mining operations when determining size for
purposes of assigning civil penalty points. This historical distinction
was based on both Agency experience and mining industry conditions.
MSHA has found that measuring the size of coal mining operations by
tonnage produced is a reasonable indicator of the size of the business
for coal operations. Tonnage produced, however, is not usually a useful
indicator of size for metal and nonmetal mining operations because of
the vast differences in commodities mined and methods of mining within
that segment of the mining industry. In some instances, large volumes
of material are mined for only a few ounces of a marketable commodity;
in others, nearly one hundred percent of the mined material is
marketable. In addition, the costs of production and the market prices
may vary markedly within the metal and nonmetal industry. Thus, an
annual tonnage measurement of metal and nonmetal operations would not
enable MSHA to fairly evaluate the economic impact of the proposed
penalty on each operator. MSHA's experience is that tonnage produced
has proven to be effective for measuring the size of coal mining
operations and annual hours worked has proven to be effective for
measuring the size of metal and nonmetal operations.
No substantive changes to proposed Sec. 100.1 were made in the
final rule. Final Sec. 100.1 adopts the language in the proposed rule.
Applicability (Sec. 100.2)
Final Sec. 100.2, like the existing rule, sets forth the
applicability of the final rule and provides that 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. Final
Sec. 100.2, like the existing rule, further provides that MSHA shall
review each citation and order and shall make proposed assessments of
civil penalties.
MSHA received no significant comments regarding proposed Sec.
100.2. Final Sec. 100.2 adopts the language in the proposed rule.
Determination of Penalty; Regular Assessment (Sec. 100.3)
(a) General
This section of the final rule addresses the determination of a
penalty amount under the regular assessment provision. Final Sec.
100.3(a)(1) is derived from existing Sec. 100.3(a), and provides the
criteria for determining penalty assessments. The final rule, like the
proposal, makes several non-substantive, clarifying changes. It divides
existing Sec. 100.3(a) into two paragraphs designated as Sec.
100.3(a)(1) and (a)(2).
Final Sec. 100.3(a)(1), like the proposed rule, provides that the
operator of any mine in which a violation of a mandatory health or
safety standard occurs or who violates any other provision of the Mine
Act shall be assessed a civil penalty of not more than $60,000. It
further provides that each occurrence of a violation of a mandatory
safety or health standard may constitute a separate offense. In
addition, it provides that 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:
(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;
[[Page 13597]]
(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 received no comments on proposed Sec. 100.3(a)(1) and final
Sec. 100.3(a)(1) adopts the language in the proposed rule.
Final Sec. 100.3(a)(2), substantively unchanged from the existing
rule, sets forth the process for determining a penalty under the
regular assessment provision. Under paragraph (a)(2), a regular
assessment is determined by first assigning the number of penalty
points to the violation by using the criteria and tables set forth in
this section. The total number of penalty points is then converted into
a dollar amount under the penalty conversion table in paragraph (g) of
this section. If applicable, the amount of the penalty will be adjusted
for good faith as provided under paragraph (f) of this section, and/or
the operator's ability to continue in business as provided under
paragraph (g) of this section.
Several commenters suggested that MSHA replace the proposed point
system with alternative methods for computing penalties. For example,
one commenter suggested that MSHA consider an alternative to the
regular assessment process in which each violation would have a
designated baseline penalty. Under this suggested approach, factors
such as an operator's history and negligence, and the gravity of the
violation would be used to increase the penalty, but the baseline
penalty would not be reduced because of an operator's size, good faith
in abatement, or ability to continue in business. MSHA has evaluated
this suggested alternative and determined that it is not in accord with
the intent of the drafters of the Mine Act because it does not
appropriately consider the statutory factors when determining
penalties. Therefore, final Sec. 100.3(a)(2) retains the proposed
regular assessment structure and language.
(b) Appropriateness of the Penalty to the Size of the Operator's
Business
Final Sec. 100.3(b) is derived from existing Sec. 100.3(b). Like
the existing rule, final Sec. 100.3(b) continues to provide that the
appropriateness of the penalty to the size of the operator's business
is calculated by using both the size of the mine and the size of the
controlling entity of the mine. In addition, final paragraph (b)
continues to provide that the terms ``annual tonnage'' and ``annual
hours worked'' mean coal produced and hours worked, respectively, in
the previous calendar year. It also continues to provide that where a
full year of data is not available, the coal produced or hours worked
is prorated on an annual basis. Finally, it increases the maximum
number of points that can be accrued under this criterion, from 15
points under the existing rule to 25 points.
MSHA proposed editorial, clarifying changes to this provision. MSHA
proposed adding the statement that 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, and the size of independent contractors is measured by the
total hours worked at all mines. No comments were received regarding
this proposed clarification. Therefore, final Sec. 100.3(b) adopts the
additional statement as proposed.
Although final Sec. 100.3(b) retains the proposed 25 maximum
number of points under the size criterion, allocation of points based
on the size of coal mines, metal and nonmetal mines, controlling
entities, and independent contractors is different from the proposed
rule. Under final Sec. 100.3(b), the maximum number of points based on
the size of coal mines and metal and nonmetal mines is reduced from the
proposed 20 points to 15 points, and the maximum number of points for
controlling entities of coal mines and metal and nonmetal mines is
increased from the proposed five points to 10 points. Accordingly, the
total maximum number of points for the size of a coal or metal or
nonmetal mining operation is 25. In addition, the maximum number of
points for independent contractors is increased from 20 to 25 points.
MSHA received numerous comments both in support of and against
point increases based on mine size. Commenters opposed to giving
consideration to size expressed concern that, under the proposed rule,
nearly a quarter of all coal mines and more than half of all metal and
nonmetal mines were receiving fewer points merely because of size even
though many health and safety violations are cited at such smaller
operations. In addition, commenters expressed concern that larger
operations would receive excessive points under the proposed rule even
though larger mines typically have more comprehensive safety programs
than smaller mines. This final rule is responsive to many of these
concerns.
With respect to comments pertaining to the proposed increase in
points for mine size, the Mine Act specifically requires that the size
of an operator's business be considered in determining the amount of a
penalty. In response to comments, however, MSHA has made several
changes to the mine size point tables in the final rule. First, MSHA
created more categories for the annual tonnage range for smaller coal
mines and the annual hours worked range for smaller metal and nonmetal
mines.
In addition, MSHA raised the penalty points for the smallest coal
mine size from zero points to one point. This is because coal mines in
the smallest mine size, according to annual tonnage, include
preparation plants that report no production, although many employ 20
or more workers. Therefore, MSHA determined that it would further the
purpose of this rulemaking to increase points in this size range. As a
result of these changes, smaller coal mines would tend to receive more
size penalty points on average under the final rule as compared with
the proposed rule. For example, a small coal mine with coal production
between 0 and 7,500 tons will receive one point under the final rule as
opposed to 0 points under the proposed rule.
Under final Sec. 100.3(b), MSHA has increased the maximum number
of points from 10 under the existing rule to 15 for the largest coal
operations and metal and nonmetal operations. MSHA proposed increased
points for larger operations because in order to provide an equal
deterrent, the penalties must be higher for larger mines (with
potentially higher revenue) in order to provide an equal deterrent. In
addition, the Agency anticipated that higher penalties would be needed
to help induce these operations, with more complex management
structures, to take notice of and correct safety and health violations.
Accordingly, final Sec. 100.3(b) increases the maximum number of
points from 10 under the existing rule to 15 (as opposed to the 20
points in the proposal).
With respect to independent contractors, MSHA proposed to increase
the maximum number of penalty points from 10 to 20 to assure that the
amount of the penalty is an appropriate economic inducement of future
compliance by the independent contractor. This was accomplished by
doubling the number of penalty points for any given number of annual
hours worked. MSHA has reviewed the violations assessed in 2005
pertaining to independent contractors and determined that the maximum
number of points for independent contractor size should be raised from
20 in the proposed rule to 25 in the final rule.
[[Page 13598]]
Under the final rule, all mine operators are subject to a maximum of 25
points for size. MSHA reviewed the violations that were assessed in
2005 and found that for most employment sizes, operator penalties were
at least 50% higher, and in some cases more than 100% higher, than the
penalties received by independent contractors. MSHA has concluded, from
its review of penalties under the proposed rule, that some significant
part of the discrepancy between operator and independent contractor
penalties was due to the fact that operators received a maximum of 25
penalty points for size while independent contractors received a
maximum of 20 penalty points for size. Accordingly, MSHA has increased
the maximum size penalty points for independent contractors to 25
points.
In addition, as was done for operators, MSHA has created more
categories capturing the annual hours worked range for smaller
independent contractors. As a result, smaller independent contractors
would tend to receive more penalty points for size on average under the
final rule than under the proposed rule. For example, an independent
contractor with 5,001 to 10,000 annual hours worked would receive two
penalty points for size under the final rule as compared to zero
penalty points for size under the proposed rule.
In reallocating the points for size for independent contractors,
MSHA evaluated the violations that were assessed in 2005 and compared
the number of violations per contractor with the given contractor size
points under the existing rule, proposed rule, and final rule. MSHA's
primary concern was to ensure that the average penalties per violation
for independent contractors of any given employment size would be
similar to the average penalties for coal and metal and nonmetal
operators of a similar employment size.
In addition, MSHA received comments both in support of and against
the Agency's request for comments pertaining to whether greater weight
should be placed on the size of controlling entities. Proposed Sec.
100.3(b) retained the existing maximum of five points for controlling
entities; however, MSHA specifically requested comments on whether, in
considering the size of the operator, greater weight should be placed
on the size of the controlling entity. Some commenters supported
placing greater weight on controlling entities so that smaller
individual mines that are owned and controlled by larger entities would
receive higher penalties. Those commenters stated, however, that for
purposes of assessing a sufficiently high penalty that would get the
attention of the controlling entity, an accurate measure of the
controlling entity's size should be revenues, and not annual tonnage or
hours worked, because many controlling entities could be involved in a
number of industries and businesses that are not mining-related. Other
commenters who supported placing greater weight on controlling entities
questioned whether it would be a workable provision. Those commenters
were concerned that because the mining industry is so fluid, tracking
such information may be all but impossible, overly burdensome, and too
labor intensive, and therefore beyond the agency's ability to
administer.
Some commenters opposed placing greater weight on the controlling
entity. Some of those commenters stated that the Mine Act only
specifies the size of the operator as a penalty criterion, and such
specification implies that the size of some other entity in the
corporate chain should not be a consideration in calculating the size
of the penalty. Other commenters opposed placing greater weight on the
controlling entity because it would create a financial disadvantage for
small operations owned by larger companies and thereby promote an
adverse competitive environment in local markets.
MSHA agrees with comments in support of placing greater weight on
controlling entities and accordingly has increased the maximum
controller size penalty points from five to 10. Congress specifically
required that the size not only of the particular mine involved in the
violation, but the size of the operator's ``business'' is to be taken
into account. MSHA has historically interpreted this statutory
provision to include both the size of the mine and the size of the
entity that controls the mine. Business judgments affecting the health
and safety of miners are made at various levels of an organization's
structure. Penalties are intended to encourage management at all levels
to respond positively to the health and safety concerns affecting
miners. In addition, Congress expressed its intent to place the
responsibility for compliance with the Mine Act on those who control or
supervise the operation of mines as well as on those who operate them.
S. Rep. No. 95-181, at 40-41. Upper-level management decisions such as
those affecting capital expenditures, the basic nature and scope of a
corporate safety and health program, the hiring of top mine management
officials, and other policy matters have a profound effect upon safety
and health conditions at individual mines. Thus, penalties should be
increased for controlling entities in order to influence all levels of
decisionmaking. Further, the Mine Act specifically requires
consideration be given to the size of the operator's business. MSHA
reallocated the points for controlling entities and coal and metal and
nonmetal mine size to achieve a more equitable distribution of points.
MSHA does not think that the specific comment that opposed placing
greater weight on the controlling entity because it would create a
financial disadvantage for small operations owned by larger companies
is accurate. The comment assumes that fines assessed against smaller
operations owned by larger entities are not reflected in the overall
profit margin of the controlling entity.
In addition, for the same reasons stated in the above discussion
concerning measuring the size of coal mines and metal and nonmetal
mines, MSHA will continue to measure the size of controlling entities
under this final rule as it does under the existing rule. The size of a
controlling entity for coal mines is measured by annual tonnage and the
size of a controlling entity for metal and nonmetal mines is measured
by annual hours worked. MSHA intends to continue its existing practice
of considering only the mining operations in which a controlling entity
is involved in when determining the size of the controlling entity.
This method has been effective as a proxy for revenue and the data are
readily available to MSHA through the existing reporting requirements
under 30 CFR part 50.
Final Sec. 100.3(b) modifies the points for size from the proposed
rule. Relative to the existing rule, final Sec. 100.3(b) increases the
points for the size according to the following tables.
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(c) History of Previous Violations
Final Sec. 100.3(c) is derived from existing Sec. 100.3(c). Final
Sec. 100.3(c), like the proposed rule, provides that 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 citable
provision of a standard in a preceding 15-month period. Final Sec.
100.3(c) clarifies that the repeat aspect of the history criterion in
paragraph (c)(2) applies to operators only after an operator has
received 10 violations, and to independent contractor operators only
after an independent contractor has received 6 violations. In addition,
only assessed violations that have been paid or finally adjudicated, or
have become final orders of the Federal Mine Safety and Health Review
Commission (Commission), will be included in determining an operator's
history.
Proposed Sec. 100.3(c) clarified the existing provision by adding
the phrase ``or have become final orders of the Commission'' in the
second sentence of this paragraph to reflect MSHA's intent that only
violations which have become final be included in an operator's
history. In addition, the proposal made several substantive changes to
existing Sec. 100.3(c). An operator's history of violations under
existing Sec. 100.3(c) was based solely on the overall number of
violations cited against an operator during a preceding 24-month
period. Under the proposal, the period of time would be shortened to 15
months and an operator's history of violations would include two
components: the total number of violations and the number of repeat
violations in that 15-month period.
MSHA received numerous comments with respect to these proposed
changes. Several commenters opposed the 15-month period. These
commenters expressed concern that the proposed 15-month period would
deprive MSHA of critical information about an operator's past safety
record, particularly for aggregate mining operations that are seasonal
or intermittent, and could result in lower penalties, particularly for
repeat violators. One commenter criticized MSHA for not publishing data
that the Agency used to determine that the effect of the shorter time
period would have a negligible effect on an independent contractor's
history. On the other hand, many commenters supported the shorter time
period because it provided a more current or
[[Page 13604]]
more realistic indication of an operator's compliance.
MSHA has determined that the proposed 15-month period will provide
the Agency with sufficient data to accurately evaluate an operator's
compliance record, including any trend, even for mining operations that
are inspected on a less-frequent basis, e.g., seasonal or intermittent
operations. MSHA reviewed violations that were assessed in 2005 and
determined that because it takes approximately three months for a
penalty assessment to become a final order of the Commission, the
proposed 15-month period would provide the Agency with at least one
full year of data for coal and metal and nonmetal operations, and for
independent contractors.
The shortened timeframe of 15 months provides MSHA with a more
recent compliance history than the 24-month period under the existing
rule. In addition, MSHA believes that operators who violate the Mine
Act and MSHA's health and safety standards and regulations should
receive penalties for those violations as close as practicable to the
time the violation occurs in order to provide a more appropriate
incentive for changing compliance behavior.
For coal and metal and nonmetal operations, the data would be
normalized by the amount of inspection time resulting in data
comparable to that of the 24-month period under the existing rule. MSHA
analyzed the data for operator violations that were assessed in 2005 to
determine the impact of changing to a 15-month period. For coal and
metal and nonmetal operator violations that were assigned history
penalty points in 2005, and had a minimum of 10 violations during the
15-month period, the average penalty points using a preceding 24-month
period was 7.5 per violation. Using a preceding 15-month period, the
average was 7.6 penalty points per violation.
For independent contractors, there is a negligible difference
between calculating an independent contractor's history of violations
under the proposed rule and under the existing rule. This is so because
it generally takes up to three months for a violation to become a final
order and, therefore, the 15-month period provides MSHA with at least
one full year of data from which to calculate violation history. MSHA
reviewed violations that were assessed in 2005, which show that there
were 3,844 contractors that were issued at least one citation in the
24-month period from January 1, 2004 to December 31, 2005. Using the
same number of months and the annualized calculation that is used to
determine violation history in the existing rule, these contractors
were issued an average of 2.3 violations per year with a median of one
violation per year during this time frame. Using the 15-month period
without annualizing the number of violations as proposed, these same
contractors were issued an average of 2.9 violations with a median of
one violation during the 15-month period between October 1, 2004 and
December 31, 2005.
Several commenters expressed concern with the Agency's proposal to
use violations that have become final orders of the Commission, stating
that this will encourage operators to increase penalty contests to
avoid counting the violation in an operator's history. MSHA included
the insertion of the phrase ``final orders of the Commission'' to
clarify the Agency's practice, in existence since 1982, to use only
violations that have become final orders of the Commission in
determining an operator's history of violations. This practice will
continue to provide a measure of fairness by not including in an
operator's history those violations that are in the adjudicatory
process which may ultimately be dismissed or vacated. As each penalty
contest becomes final, however, the violation will be included in an
operator's history as of the date it becomes final.
In consideration of all comments, final Sec. 100.3(c) retains the
final order language and shortens the period of time from 24 to 15
months for determining an operator's history of violations as proposed.
Several commenters expressed confusion regarding the number of
violations that would trigger application of the repeat violation
provision in proposed paragraph (c)(2). MSHA intends that the repeat
violation provision in final paragraph (c)(2) would only apply to
contractors after an operator has received 10 violations, and to
independent contractor operators only after an independent contractor
has received 6 violations. Therefore, final Sec. 100.3(c) includes
clarifying language.
Final Sec. 100.3(c)(1) is a new paragraph derived from existing
Sec. 100.3(c). Final Sec. 100.3(c)(1), like the proposed rule,
provides that history penalty points are assigned on the basis of the
number of violations per inspection day (VPID) for coal operations and
metal and nonmetal operations. Under final paragraph (c)(1), penalty
points are not assigned to coal operations and metal and nonmetal
operations that receive fewer than 10 violations in a preceding 15-
month period. For independent contractors, final Sec. 100.3(c)(1),
like the proposed rule, provides that penalty points are assigned on
the basis of the total number of violations at all mines. Penalty
points are not assigned to independent contractors with fewer than 6
violations. The maximum number of points that an operator may receive
for this criterion is 25 points.
Most commenters supported the proposed continuation of using VPID
to calculate points for coal and metal and nonmetal operator's history
of violations, stating that VPID provides the truest measure of an
operator's compliance. Some of these commenters, however, requested
that MSHA clarify its definition of an inspection day. These commenters
stated that MSHA's method of determining inspection days is different
between coal mines and metal and nonmetal mines, which affects how
points are computed.
MSHA's definition of VPID (Violations per Inspection Day) is
calculated by taking the total number of assessed violations at a mine
for a specified period that have either been paid or have become a
final order of the Commission and dividing it by the total number of
inspection days at the mine during the same specified period. There is
no functional difference between a violation that an operator pays and
a final order of the Commission.
Prior to April 2005, MSHA used different definitions of an
inspection day for coal and metal and nonmetal mines. For coal mines,
each mine visit by each Authorized Representative of the Secretary (AR)
was considered a separate inspection day. For metal and nonmetal mines,
the total time for each inspection event was divided by five hours to
determine the number of inspection days for that event. For both coal
and metal and nonmetal operations, the number of inspection days were
then summed for the specified period. In April 2005, MSHA began its
transition to use the per-visit method previously used only for coal
mines for all types of mines. MSHA currently calculates inspection days
for assessment purposes by counting one inspection day for each AR that
spends any on-site inspection time during any calendar day. Supervisory
and trainee time is excluded from the inspection day calculation as are
non-inspection activities. The same method is used for all coal, metal,
and nonmetal mines.
Some commenters expressed concern that the proposed new provision
that history penalty points not be assigned to coal operations and
metal and nonmetal operations with fewer than 10 violations in a
preceding 15-month period essentially amounted to a free pass for small
mines and constituted selective enforcement of the Mine Act. MSHA
[[Page 13605]]
projects that this new provision would work similar to existing Sec.
100.4(b), which excludes from excessive history mines having 10 or
fewer assessed violations in a preceding 24-month period. In making a
decision to include the new provision in the proposed rule, MSHA
considered various factors, such as small, seasonal, and intermittent
operations, all of which may result in an operation having a low number
of inspection days during the specified period. For such operations,
even though the total number of violations may be low, i.e., three
violations in a preceding 15-month period, the VPID could easily be
greater than the highest VPID level, or 2.1, and the operator would
receive the maximum number of 25 points. To avoid the inequitable
result of subjecting any mining operation with only a few violations in
a preceding 15-month period to an unrealistically high VPID, MSHA
concludes that the new provision, under which penalty points are not
assigned to coal operations and metal and nonmetal operations with
fewer than ten violations in a preceding 15-month period, is necessary.
Therefore, the final rule includes the proposed language.
Several commenters suggested, as an alternative to the proposal,
that the final rule include a provision that history penalty points not
be assigned to independent contractors with fewer than 10 violations in
a preceding 15-month period. In considering this suggestion, MSHA
reviewed its violation data which showed that between October 1, 2004
and December 31, 2005, approximately 500 contractors would have
received history penalty points for 6 or more violations during a 15-
month period. This number would be reduced, however, to approximately
200 if contractors with fewer than 10 violations were not assessed
history points. Stated differently, under MSHA's violation data, 11% of
the independent contractor violations would have received history
penalty points for six or more violations during a previous 15-month
period. This percentage would be reduced, however, to approximately 6%
if contractors with fewer than 10 violations were not assessed history
points. Although there was strong support for the suggested
alternative, MSHA has decided that the alternative does not further the
purpose of this rulemaking and that the Agency will retain the proposed
language that penalty points not be assigned to independent contractors
with fewer than 6 violations in a preceding 15-month period.
MSHA specifically requested comments as to whether the Agency
should adopt the proposed approach for calculating an independent
contractor's history of violations by using the total number of
assessed violations at all mines during a preceding 15-month period, or
whether the Agency should use an annualized 2-year average as it does
under the existing rule. Under the existing rule, the number of
violations for independent contractors is based on an annual average of
all violations over a two year period at all mines. MSHA received
several comments expressing skepticism with the Agency's statement that
only a minimal increase in the average assessment issued to independent
contractors would result by eliminating the annualized average. In
addition, some commenters suggested that MSHA use VPIDs when computing
contractor history. These commenters stated that contractors are
required to have a single MSHA contractor ID number for nationwide
operations, and that if working daily at multiple mine sites across the
country, that contractor is likely to be inspected far more frequently
than the average mine operator. These commenters concluded that MSHA's
proposal lacks an adequate foundation and results in unfair treatment
of independent contractors.
VPID cannot be used to calculate a contractor's history of
violations because MSHA does not record inspection time for
contractors. As explained above, MSHA tracks contractor violations by
counting total violations within a specified period. Although MSHA
received some comments critical of the proposed method, it has proved
to be both successful and practical in calculating a contractor's
violation history under the existing rule.
The proposed rule increased the maximum number of points under this
criterion from 20 under the existing regulation to 25 points. The final
rule retains the proposed 25 maximum points; however, MSHA raised
penalty points for independent contractors with 8 to 50 violations
during the previous 15-month period, relative to what was proposed. The
additional increase in points reflects MSHA's desire to increase points
for independent contractors so as to reduce the discrepancy in
penalties between operators and independent contractors.
Tables II-6 and II-7 compare the existing and final penalty point
scales for coal and metal and nonmetal operators and independent
contractors.
[[Page 13606]]
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[[Page 13607]]
[GRAPHIC] [TIFF OMITTED] TR22MR07.007
In the proposal, the Agency added a new component to the history
criterion to target operators who allowed the same violations to recur,
without correcting the underlying root cause. The new Sec.
100.3(c)(2), like the proposal,
[[Page 13608]]
adds repeat violations of the same citable provision of a standard to
an operator's history of violations and could account for a maximum of
20 penalty points. Under the final rule, an operator would not receive
repeat penalty points until that operator had a minimum of 6 repeat
violations in a preceding 15-month period.
In response to MSHA's request for comments on this proposal, many
commenters opposed it because they believed that it counted some
violations twice, once in the overall violation history and again in
the repeat violation category, merely for the purpose of increasing
penalties. In addition, some of these commenters stated that MSHA's
many broad performance-oriented standards are sometimes applied to
multiple conditions that are in reality, quite different and that, in
these circumstances, operators would be unfairly penalized for repeat
violations which were intended to cover only the same or similar
conditions. Also, some commenters expressed concern that increased
penalties for repeat violations would be unfair in situations in which
an MSHA inspector issues multiple citations for multiple violations of
the same hazard.
Although some commenters opposed the repeat violation provision as
being unfair and redundant, other commenters supported it. MSHA
believes that this new provision is consistent with and responsive to
Congress's desire to curb repeat violations. Reporting on the bill that
became the Mine Act, the Senate Committee on Human Resources stated:
In evaluating the history of the operator's violations in
assessing penalties, it is the intent of the Committee that repeated
violations of the same standard, particularly within a matter of a
few inspections, should result in the substantial increase in the
amount of the penalty to be assessed. Seven or eight violations of
the same standard within a period of only a few months should
result, under the statutory criteria, in an assessment of a penalty
several times greater than the penalty assessed for the first such
violation.
S. Rep. No. 95-181, at 43.
MSHA analyzed violation data for the 15-month period from January
1, 2005, through March 31, 2006. These data showed that often
inspectors issued citations for the same safety and health hazards at
the same operation within a specified period of time. From these data,
the Agency concludes that once a condition is identified, these
operators are correcting that particular condition without addressing
the root cause of the problem. This new provision is aimed at
preventing these types of occurrences and thereby providing a
systematic improvement to miner safety and health.
Some of the commenters who supported the proposed repeat violation
provision expressed concern that it was too narrowly construed because
it only counted violations of the same subsection of an MSHA standard.
One commenter provided the example that violations for combustible
materials under 30 CFR 75.400 should not be dissected into the specific
nature of the combustible material, i.e., paper, coal dust, wood, etc.,
when considering repeat status. Another commenter suggested, as an
alternative, that MSHA retain its discretion to use broader categories
of violations of standards in determining whether a company is a repeat
violator.
MSHA does not agree that the repeat provision should include
broader categories of violations. MSHA analyzed violation data for the
15-month period from January 1, 2005, through March 31, 2006. MSHA's
analysis, interpreting ``same standard'' to mean ``same citable
provision,'' showed that 698 of the 10,227 mines with violations had at
least 6 violations of the same citable provision of a standard.
Further, 99 of the 698 mines had more than 20 violations of the same
citable provision during the 15-month period. Limiting repeat
violations to the same citable provision targets those operators who
show a repeated lack of commitment to miner safety and health; this is
precisely the type of behavior that the Agency seeks to change.
MSHA specifically requested comments on whether, in determining
penalty points for repeat violations, the Agency should factor in the
number of inspection days during which the repeat violations were
cited.
Several commenters opposed factoring in the number of inspection
days when counting violations under this provision. Most commenters,
however, supported using repeat violations per inspection day (RPID) to
calculate repeat violations. These commenters expressed concern that
operators of large mines generally receive more violations than smaller
mines solely because larger mines have a greater number of inspections
and, therefore, calculating repeat violations using RPID would provide
a level of fairness missing from the proposed rule. The application of
RPID to the new repeat provision would account for increased inspector
presence in large mines and would place all mines on a more equitable
basis. Therefore, this final rule incorporates a new repeat violations
table which applies RPID to the calculation for coal and metal and
nonmetal operations. Under this table, repeat points apply only where
there have been a minimum of 6 repeat violations. In addition, for the
same reasons as stated previously, MSHA will not apply the repeat
criterion until a coal and metal and nonmetal operator has received a
minimum of 10 violations within a preceding 15-month period.
RPID cannot be used to calculate repeat violations for independent
contractors because MSHA does not record inspection time for
contractors. Therefore, the final rule, like the proposed rule, uses
the total number of violations in a 15-month period for establishing
repeat violation history for independent contractors. Although MSHA
received some comments critical of the proposal with respect to
independent contractors, the Agency's historical method of calculating
history for independent contractors has proved to be both successful
and practical.
The final rule revises the proposed table for repeat violations for
independent contractors by raising the penalty points for contractors
with 6 to 20 repeat violations during the previous 15-month period.
Under the final rule, an independent contractor will receive the
maximum 20 points for 15 or more repeat violations during the previous
15-month period. These revisions reflect MSHA's desire to increase
points for independent contractors, so as to reduce the discrepancy in
penalties between operators and independent contractors. The final
rule, therefore, retains the proposed provision for repeat violations
for independent contractors.
MSHA requested comments on whether all violations should be used to
calculate repeat violations, or whether only S&S violations should be
used. Many commenters stated it is unfair to count non-S&S violations
in the repeat violations provision because it would subject operators
to significantly higher penalties for repeated violations that have
little or nothing to do with miner safety and health, such as repeated
violations of paperwork standards or merely technical violations.
Other commenters, however, stated that MSHA should look at all
violations, including non-S&S citations, in calculating penalties for
repeat violations because even non-S&S violations can adversely affect
miner safety and health. MSHA agrees. The final rule includes all
violations, both S&S and non-S&S, in the calculation of repeat
violation history. Even though the violations that were assessed in
2005 show that two-thirds of all violations were non-S&S violations,
non-S&S violations of technical
[[Page 13609]]
standards and low-gravity violations have the potential to pose a
health or safety danger to miners. By excluding non-S&S violations from
this provision, MSHA would not be taking a proactive approach to
advancing miner safety and health; non-S&S violations can lead to S&S
violations and even greater hazards to miners. In addition, including
non-S&S violations would be consistent with Congress's intent that
penalties must provide an effective deterrent against all offenders,
and particularly against offenders with records of past violations,
regardless of whether they are S&S or non-S&S.
Some commenters who opposed the proposed repeat violation provision
stated that, if the provision is adopted, MSHA should avoid retroactive
application of the provision by not including violations that occurred
before promulgation of the final rule. These commenters stated that,
had they known that violations that occurred prior to the final rule
could be used to trigger significantly higher penalties, they would
have contested those violations to avoid inclusion under the repeat
violations provision. Final paragraph (c)(2) does not apply the repeat
violation provision retroactively. The repeat violation provision under
paragraph (c)(2), like the total number of violations provision under
paragraph (c)(1), imposes higher penalties for violations that occur
after publication of this final rule. MSHA, however, has the authority
to consider violations which occurred before promulgation of this final
rule as part of an operator's history of violations, when determining
penalties for violations that occur after issuance of the final rule.
In taking this action, MSHA would not be impairing operator rights,
increasing an operator's liability for past violations, or imposing new
duties with respect to violations that have already occurred. Rather,
MSHA would be taking past violations into consideration in determining
a penalty for a violation that occurred after promulgation of this
final rule. MSHA, however, plans to pay particular attention to any
circumstances resulting in an unfair penalty increase. Under such
circumstances, MSHA may process the violation under the special
assessment provision to determine a more appropriate penalty.
Penalty points for the number of repeat violations for coal and
metal and nonmetal operations are presented in Table II-8. Penalty
points for the number of repeat violations for independent contractors
are presented in Table II-9.
[[Page 13610]]
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[[Page 13611]]
(d) Negligence
Final Sec. 100.3(d), derived from the existing rule, provides for
evaluating the degree of negligence involved in a violation under five
categories: No negligence, low negligence, moderate negligence, high
negligence, and reckless disregard. Under the final rule, like the
proposal, no negligence receives 0 points, low negligence receives 10
points, moderate negligence receives 20 points, high negligence
receives 35 points, and reckless disregard receives 50 points. Moderate
negligence, high negligence, and reckless disregard receive
increasingly higher penalty points under the final rule. Penalty points
for these latter categories also are higher than those in the existing
rule, reflecting MSHA's intent to target operators who exhibit an
increasing lack of commitment to and disregard for miner safety and
health.
Several commenters agreed with the proposed points increase for the
three highest levels of negligence. Several commenters opposed the
proposed increases as being excessive and stated that the degrees of
negligence are subjective and are often evaluated inconsistently by
MSHA inspectors.
MSHA expanded the levels of negligence from three to five in 1982,
in response to comments recommending more definite criteria for the
assignment of penalty points to an operator's negligence. 47 FR 22286,
22289-90 (May 21, 1982). In so doing, MSHA intended that five levels of
negligence would allow inspectors to more appropriately consider all of
the facts and circumstances surrounding a violative condition or
practice. Although negligence evaluations can be subjective, the five
levels of negligence permit MSHA inspectors to exercise independent
judgment based on the circumstances surrounding the violation and to
make appropriate decisions with respect to the nature or existence of
mitigating circumstances. Negligence is defined in the rule and in the
negligence section of the ``Citation and Order Writing Handbook for
Coal Mines and Metal and Nonmetal Mines'' at http://www.MSHA.gov. The
Handbook provides guidance to MSHA compliance personnel when issuing or
reviewing citations and orders, and is intended to achieve consistent
enforcement.
MSHA disagrees with the comments that the increase in penalty
points for negligence is excessive. The increase in penalty points
included in the final rule is in accord with the Mine Act's requirement
to consider an operator's negligence when assessing penalties. This
aspect of the final rule was designed so that higher penalties 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. MSHA intends that the final rule's increase
in penalty points for the negligence criterion will result in increased
compliance with the Mine Act and MSHA's safety and health standards and
regulations and a greater commitment to safety and health on the part
of mine operators. No changes were made to the proposal; the final rule
adopts the proposed language.
Table II-10 shows the penalty points for negligence under the
existing and final rule.
[[Page 13612]]
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(e) Gravity
Final Sec. 100.3(e) is derived from the existing provision and,
like the proposal, provides that the gravity or seriousness of a
violation is determined by three factors: (1) The likelihood of
occurrence of an event, (2) the severity of injury or illness if the
event has occurred or were to occur, and (3) the number of persons
potentially affected. The final rule, like the proposal, increases
penalty points assigned under this provision for each of the three
gravity factors as follows: (1) Points for likelihood of occurrence
increase from 10 to 50; (2) points for severity of injury or illness
increase from 10 to 20; and (3) points for the number of persons
potentially affected increase from 10 to 18. The total maximum points
is increased from 30 to 88 under the final gravity criterion.
Several commenters supported the proposed increased points for
gravity. One commenter suggested that the proposed points for the
severity and persons potentially affected should have increased at the
same rate as the likelihood factor. Another commenter, who supported
increased points for gravity in general, expressed concern that the
factor pertaining to persons potentially affected is routinely
understated by MSHA inspectors, and results in fewer penalty points and
thus a lower penalty than what should be assessed.
Other commenters opposed the increase in points for gravity. These
commenters expressed concern that MSHA essentially eliminated the
distinction between S&S and non-S&S violations from a penalty
perspective. These commenters gave the example that a non-S&S violation
with an unlikely likelihood and a fatal severity would receive 30
gravity points whereas an S&S violation with a reasonably likely
likelihood and a lost workdays severity would receive 35 gravity
points.
MSHA disagrees with comments stating that proposed increased points
for gravity are excessively high. Increased points for gravity are
directed at operators whose mines experience the more serious mine
safety and health hazards. Increased points, which result in increased
penalties, should encourage these operators to place greater emphasis
on immediately correcting the more serious violations
[[Page 13613]]
because they pose the greatest safety and health risk to miners.
The Agency does not believe that this aspect of the final rule
results in a blurred distinction between S&S and non-S&S violations.
MSHA reviewed violations that were assessed in 2005 and projects that
S&S violations would receive an average penalty of $1,385 under the
final rule and non-S&S violations would receive an average penalty of
$207.
Moreover, MSHA's intent is to place much more emphasis on the
overall gravity of a violation. To achieve this goal, each of the three
gravity point tables is revised to increase the points for likelihood,
severity, and persons potentially affected. In doing so, the Agency
allocated twice as many points for a permanently disabling injury than
an injury that resulted only in lost work days. MSHA also doubled the
number of points for a fatal injury, as compared with a permanently
disabling injury. This approach to increasing gravity points for
severity is reasonable and necessary because MSHA believes that, while
all three components of the gravity determination are important in
determining risk, the likelihood or probability of an injury occurring
should carry more weight in the overall penalty determination.
For likelihood, MSHA made the increase in gravity points between
levels more pronounced as the likelihood of an injury increased. An
unlikely situation has some potential to result in an injury, and a
reasonably likely situation has a higher potential for an injury to
occur. MSHA's position is that those violations with any degree of
likelihood should receive more points and, as the likelihood increases,
the number of associated points should increase significantly. The
Agency considers a situation that resulted in a ``highly likely'' or
``occurred'' likelihood as a worst-case scenario deserving
significantly higher points.
Regarding MSHA inspectors' evaluation of the number of persons
potentially affected, MSHA continues to evaluate inspector citations to
determine where improvements can be made. The ``number of persons
potentially affected'' is a topic covered in the gravity section of the
``Citation and Order Writing Handbook for Coal Mines and Metal and
Nonmetal Mines'' at http://www.MSHA.gov. The Handbook provides guidance
to MSHA compliance personnel when issuing or reviewing citations and
orders, and is intended to achieve consistent enforcement. MSHA has
identified the ``number of persons potentially affected'' as an area
that needs to be emphasized in both new and refresher inspector
training. In an effort to improve inspector performance and consistency
in this area, the Agency has undertaken a number of initiatives. It is
emphasizing this area in inspector training, placing greater emphasis
on this issue in staff meetings at all levels--headquarters and field,
and improving enforcement oversight.
Final Sec. 100.3(e) adopts the language in the proposed rule.
Tables II-11, II-12, and II-13 show the existing and final penalty
points for gravity.
[[Page 13614]]
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[[Page 13615]]
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(f) Demonstrated Good Faith of the Operator in Abating the Violation
Final Sec. 100.3(f), like the proposal, decreases the amount of
the reduction of the penalty, where the operator abates the violation
within the time set by the inspector, from 30% under the existing rule
to 10% under this final rule. In addition, the final rule, like the
proposal, eliminates the existing provision which adds 10 points where
an operator does not abate the violation within the specified time
period.
As stated throughout this rulemaking, MSHA takes the demonstrated
good faith of the operator in abating the violation into consideration
because it is one of the statutory criteria to be used in determining
civil penalties under the Mine Act. Several commenters supported the
proposed decrease in the ``good faith'' reduction from 30% to 10%, but
others opposed the decrease, stating that MSHA should retain the
existing 30% reduction because any smaller amount would be a
disincentive for operators to promptly abate violations.
MSHA does not anticipate that changing the good faith reduction
from 30% to 10% would adversely affect miner health and safety or the
prompt abatement of violations. Based on 2005 assessed violation data,
mine operators realized a $5.7 million decrease in proposed civil
penalty assessments due to the 30% good faith reduction. MSHA projects
that the 10% good faith reduction in the final rule will result in a
$4.7 million decrease in proposed penalty assessments, although the
Agency acknowledges that total penalties increase significantly under
the final rule. MSHA believes that the $4.7 million decrease under the
final rule provides an incentive equivalent to that in the existing
rule for mine operators to abate violations in a timely manner.
The strongest incentive for abatement under the final rule is a
withdrawal order issued under section 104(b) of the Mine Act. The Mine
Act requires that the inspector set a ``reasonable time'' for abatement
for all violations, regardless of severity. The inspector sets the
abatement time based on the nature of the hazard and the corrective
actions needed. Should the mine operator fail to abate the hazard
within the prescribed time, the inspector will issue a withdrawal order
closing the affected
[[Page 13616]]
area of the mine. In 2006, MSHA used this regulatory tool and issued
1,200 withdrawal orders that resulted in closure of the area of the
mine affected by the violation.
All mine operators should take their responsibilities for mine
safety and health seriously and promptly abate all violations of the
Mine Act and MSHA's safety and health standards and regulations. The
Agency also takes seriously its responsibility to administer the civil
penalty provisions in the Mine Act in accordance with the statutory
criteria. Congress intended that MSHA provide some consideration to
mine operators who, when issued a citation for a violation of a safety
and health standard, correct that violation within the time set by the
inspector. In recognition of the statutory intent, the final rule
includes an appropriate ``good faith'' reduction. MSHA continues to
believe that operators should take prompt corrective action, regardless
of the amount of the monetary incentive, in order to avoid the
prolonged existence of a violative or dangerous condition in the mine.
In the event, however, that an operator does not abate a violation
within the time set by the inspector, MSHA believes that the Mine Act's
provisions for withdrawal orders and daily penalties, discussed below,
provide an adequate compliance incentive. For these reasons, and in
response to comments, the final rule retains the 10% ``good faith''
reduction, as proposed.
Some commenters opposed eliminating the 10 additional points under
the existing rule where an operator does not abate the violation within
the time specified, while others supported the proposed elimination of
10 additional points. In retaining this aspect of the proposal, the
Agency intends that the Mine Act's following two sanctions for an
operator's failure to correct violations within the time set by the
inspector be applied: (1) issuance of a withdrawal order under Sec.
104(b) of the Mine Act,; and (2) application of the daily penalty under
Sec. 110(b) of the Act. MSHA believes that these two sanctions are
adequate tools for the Agency to use to address the circumstances in
which an operator does not abate the violation within the time
specified by the MSHA inspector.
Final Sec. 100.3(f) adopts the language in the proposed rule.
(g) Penalty Conversion Table
Final Sec. 100.3(g), like the proposal, provides the penalty
conversion table used to convert total penalty points to a dollar
amount. The final rule, like the proposal, retains the statutory
maximum penalty of $60,000. In addition, it establishes a new minimum
penalty of $112, up from $72 in the existing rule.
The proposed rule converted points to dollars as follows: for 60
points or fewer, the minimum dollar amount was $112. Each additional
point above 60 up to 133 caused the dollar value to increase by a fixed
8.33%. The dollar value assigned for 133 points was $38,387. At 133
points, the dollar value increased by approximately $3,070 for each
additional penalty point. The maximum number of points was 140 and the
maximum dollar value was $60,000.
MSHA received some comments stating that the $112 minimum penalty
was too low. The final rule retains the $112 minimum penalty, which is
a 56% increase from the minimum penalty under the existing rule, and
which MSHA believes represents a reasonable adjustment upward from the
$60 minimum penalty under the existing penalty regulations.
Several commenters stated that penalties under the proposed rule
could result in lower penalties than under the existing regulations.
One commenter provided the example that under the existing regulations
89 points are required before MSHA imposes a fine of more than $25,000,
while under the proposed regulations, 128 points would be required
before MSHA would impose a fine of more than $25,000. As stated earlier
in this preamble, to accurately determine a penalty under the proposed
rule one cannot do a side-by-side comparison of existing to proposed
penalties without also considering how the point tables have changed.
Although MSHA projects that the vast majority of violations will
receive an increase in penalties under this final rule, MSHA's analysis
of violations that were assessed in 2005 shows that a small percentage
of violations--5%, or 5,858 of the 116,673 total violations--would
receive a lower penalty under the final rule than under the existing
regulations. Of the violations that would receive a lower penalty,
approximately 3,485 result from use of the 15-month period and the 10-
violation threshold for assigning penalty points under violation
history. MSHA believes that the penalty reductions in these cases are
appropriate in that they generally reflect an improvement in the most
recent violation history or a small number of safety and health
hazards.
The remaining 2%, approximately 2,400 violations, involve a
reduction in the penalty for other reasons. Of these, 945 are
violations which were assessed under the special assessment provision
of the existing rule, but would receive a regular assessment under the
final rule. As mentioned, however, in any circumstance in which MSHA's
regular assessment may result in anomalies or inequitable results, MSHA
may choose to apply the special assessment provision of this final rule
to assure that the penalty is appropriate. Another 671 are violations
which, under the final rule, would not receive the 10-point penalty for
failure to abate under the existing rule. As stated previously, MSHA
believes that the Mine Act's two sanctions for an operator's failure to
correct violations within the time set by the inspector--the issuance
of a withdrawal order under Sec. 104(b) of the Mine Act and the daily
penalty under Sec. 110(b) of the Act--are adequate tools for the
Agency to use to address the circumstances in which an operator does
not abate the violation within the time specified by the MSHA
inspector. The final 757 violations involve a lowering of the penalty
by a negligible amount.
Final Sec. 100.3(g) adopts the language in the proposed rule.
[[Page 13617]]
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[[Page 13618]]
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[[Page 13619]]
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[[Page 13620]]
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(h) Effect on Operator's Ability To Remain in Business
Final Sec. 100.3(h), like the proposal, 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, like the
proposal, it provides that MSHA may adjust the penalty if the operator
submits information to MSHA concerning the operation's financial status
which shows that payment of the penalty will adversely affect the
operator's ability to continue in business.
In the proposal, MSHA made several non-substantive editorial
changes for clarity.
Several commenters expressed concern that the proposed increase in
penalties would put small operations out of business. Many of these
commenters requested a variance from the penalty regulations. In
addition, one commenter stated that MSHA should not take an operator's
ability to continue in business into consideration when determining a
penalty. This commenter expressed concern that an operator that cannot
afford to pay its penalties should not operate at all.
MSHA takes an operator's ability to continue in business into
consideration because it is one of the statutory criteria to be used in
determining civil penalties under the Mine Act. Under this final rule,
as in the existing rule, MSHA may adjust the penalty if the operator
demonstrates that the amount of the penalty will adversely affect the
operator's ability to continue in business. A variance cannot be
granted, however, because under the Mine Act, MSHA may modify only the
application of a safety standard.
Final Sec. 100.3(h) adopts the language in the proposed rule.
Unwarrantable Failure (Sec. 100.4)
Final Sec. 100.4, like the proposal, deletes the single penalty
assessment provision in existing Sec. 100.4. The existing single
penalty assessment provided for a $60 penalty for certain non-S&S
violations, i.e., those violations that were not reasonably likely to
result in reasonably serious injury or illness, that were abated within
the time set by the inspector, and that did not involve an operator
with an excessive history of violations.
MSHA received numerous comments on the proposed deletion of the
single penalty assessment provision. Some commenters supported deleting
the single penalty assessment because they stated that these violations
were often perceived as insignificant and accepted as the cost of doing
business. Some of these commenters provided examples of operators
receiving $60 single penalties for violations pertaining to
accumulations of combustible material, roof control problems, and
ventilation problems, where it was cheaper to pay the $60 penalty than
to correct the underlying violative condition.
Other commenters opposed deleting the single penalty assessment.
Those commenters stated that the single penalty is generally reserved
for non-S&S violations that have little or no safety consequences and,
therefore, these violations should receive minimal penalties. Most of
the commenters opposed to deleting the single penalty assessment
expressed concern that operators would be required to spend
disproportionate amounts of time and resources on violations having
minimal impact on safety and health. In addition, some commenters
expressed concern that deleting the single penalty assessment will
result in increased contests and litigation. After careful review of
all comments, an examination of Agency data, and based upon Agency
experience, MSHA has decided that the single penalty assessment should
not be included in the final rule.
As mentioned earlier, the agency has structured a civil penalty
regulation which focuses on reducing all mine safety and health
hazards--both non-S&S and S&S. MSHA believes that every violation has
the potential to contribute to hazardous or unhealthful conditions and
should be individually assessed a civil penalty that is commensurate
with the severity of the violation. Also, MSHA's experience and data
reveal that often non-S&S violations, if left uncorrected, will lead to
more hazardous situations. For this reason, MSHA is deleting the single
penalty assessment provision in an effort to prompt the mining
community to pay attention to, and promptly abate, all violations.
[[Page 13621]]
Non-S&S violations are not always trivial violations deserving
nominal penalties. Accurate recordkeeping, good housekeeping, and
meaningful training are essential elements of an effective safety and
health program in the workplace. For example, an operator's failure to
properly train a miner in first aid is often classified as a non-S&S
violation; however, such a violation sometimes can result in fatal
consequences.
Moreover, a violation that is not reasonably likely to result in a
reasonably serious injury or illness may eventually result in a serious
injury or illness if it is not corrected. By deleting the single
penalty assessment provision, the Agency believes that mine operators
will focus more attention on identifying and correcting the root causes
of mine safety and health hazards. These non-S&S violations should not
be viewed as an insignificant part of the cost of doing business.
Rather, they should be evaluated under the regular assessment provision
so that the operator's size, history, negligence, and the gravity of
the violation can be taken into consideration in determining the amount
of the penalty assessment. Operators with a low history of violations,
violations that truly involve minor or technical violations, that pose
less serious threats to health and safety, that involve low or no
negligence, and that are abated within the time set by the inspector,
likely will receive a total of 60 points or fewer and a penalty of only
$100 (including application of the ``good faith'' reduction) under the
regular assessment provision of this final rule.
Some commenters requested that MSHA include empirical data and
projections pertaining to deleting the single penalty assessment
provision. MSHA, using violations that were assessed in 2005, converted
penalties assessed under the single penalty provision of the existing
rule to penalties under the regular assessment provision of this final
rule. MSHA found that the $60 penalties assessed under the single
penalty provision would range from $100 (assuming application of the
``good faith'' reduction) to $14,343 for metal and nonmetal mines and
from $112 to $21,442 for coal mines. The Agency is providing this
information for illustrative purposes only. The highest ranges of
penalties occurred for one coal violation and for one metal/nonmetal
violation and are anomalies. MSHA does not expect non-S&S violations to
result in penalties of this level under the final rule; however, in the
event that a regular assessment produces an inappropriate result, the
penalty would be processed under the special assessment provision.
Under the final rule, MSHA estimates the average non-S&S penalty would
be $192.
In addition, under the final rule, MSHA projects that 44% of
violations (32% for coal and 59% for metal and nonmetal mines) would
receive the minimum penalty (including application of the ``good
faith'' reduction). This compares with 64% of violations (58% for coal
and 72% for metal and nonmetal mines) that received the single penalty
under the existing rule.
Based on the Agency's evaluation of the violations that were
assessed in 2005 and the Agency's experience gained under the existing
single penalty provision, MSHA believes that deleting the single
penalty assessment will encourage compliance with the Mine Act and
MSHA's safety and health standards and regulations and prompt abatement
of violations.
For the foregoing reasons, the single penalty assessment provision
is deleted from this final rule.
Final Sec. 100.4 is a new provision which replaces existing Sec.
100.4 pertaining to the single penalty assessment. Final Sec. 100.4,
like the proposal, implements Section 8(a)(1)(B) of the MINER Act
related to minimum unwarrantable failure penalties. It establishes a
minimum penalty of $2,000 for any citation or order issued under
section 104(d)(1) of the Mine Act, and establishes a minimum penalty of
$4,000 for any order issued under section 104(d)(2) of the Mine Act.
Commenters generally were in agreement with the proposed provision.
Some commenters, however, expressed concern that the statutory minimum
penalties of $2,000 and $4,000 would become default penalties. They
stated that these penalties should either be the statutory minimum
amount or the amount assessed under the regular assessment formula,
whichever is greater. MSHA agrees. Under the final rule, penalties for
unwarrantable failure violations processed through the regular
assessment provision will receive at least the minimum amount as
specified in the MINER Act. Unwarrantable failure violations processed
as regular assessments which generate a penalty greater than the
statutory minimum will receive that penalty. As appropriate,
unwarrantable failure violations also may continue to be processed
under the special assessment provision.
Final Sec. 100.4 adopts the language of the proposed rule.
Determination of Penalty; Special Assessment (Sec. 100.5)
Final Sec. 100.5, like the proposed rule, is derived from existing
Sec. 100.5, and, like the proposal, provides for a special assessment
for those violations which MSHA believes should not be processed under
the regular assessment provision. It also removes the second sentence
in existing Sec. 100.5(a) which states that:
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.
In addition, this provision, like the proposal, removes the existing
list of eight categories of violations that MSHA reviews for possible
special assessment.
MSHA received numerous comments on the Agency's proposal to delete
the eight categories of violations which are reviewed for special
assessment in the existing rule. Some commenters supported processing
most violations under the regular assessment provision, stating that
the existing special assessment process sometimes results in extended
periods between the issuance of a citation or order and the issuance of
the penalty. These commenters indicated that MSHA has sometimes taken
over one year to issue a penalty under the special assessment
provision, and stated that penalties would be processed in a timelier
manner under the proposal. Other commenters supported the proposal,
stating that it would remove arbitrary penalties from being issued
under the special assessment provision.
Some commenters opposed the proposal. They expressed concern that
processing violations that fall in the eight categories in the existing
rule as regular assessments would result in lower penalties. Some of
these commenters stated that the final rule should levy heavy penalties
on blatant violations and operators who flout the law, and that
eliminating the eight categories of violations that receive
consideration for special assessments under the existing rule will
create confusion for companies by eliminating certainty about when they
will be subject to special assessments. Other commenters who opposed
the proposal expressed concern that MSHA would exercise unfettered
discretion in assessing any violation under the special assessment
provision.
MSHA agrees with the commenters who stated that processing most
violations under the regular assessment provision will enhance the
consistency
[[Page 13622]]
and timeliness of the assessment process. One of MSHA's goals for this
rulemaking is to improve the effectiveness and efficiency of the civil
penalty process. As stated in the preamble to the proposed rule, the
existing special assessment provision has resulted in a time-consuming
and resource-intensive process. For violations specially assessed in
2005, it took an average of 168 days from the date a violation was
terminated to the date the assessment was mailed. Under the regular
assessment, such violations generally are assessed within 70 days of
the termination date. MSHA strongly believes that penalties issued
closer to the issuance of the citation or order will have a more
meaningful, behavior-changing effect on mine operators.
In addition, because MSHA is retaining its discretion to determine
which types of violations would be reviewed for special assessment,
removal of the eight categories of violations will not limit the
Agency's authority to waive the regular assessment if the Agency
determines that a special assessment is appropriate for any type of
violation. Indeed, as stated in the preamble to the proposed rule, MSHA
never intended the existing eight categories to be an exhaustive list
of the types of violations that could be assessed under the special
assessment provision. This final rule clarifies the Agency's intent.
Further, as stated throughout this rulemaking, by removing the specific
list of violations, MSHA will be able to focus its enforcement
resources on more field enforcement activities, as opposed to
administrative review activities.
MSHA projects that the regular assessment provision will provide an
appropriate penalty for most violations. By way of illustration, using
data for violations that were assessed in 2005, MSHA compared the
penalty for 2,698 of the 3,189 violations assessed under the special
assessment provision to the penalty that would have been assessed under
the regular assessment provision of this final rule. The Agency
excluded violations that involved a fatality and those issued to agents
of the mine operator from this comparison because those violations
would continue to be processed as special assessments under the final
rule. MSHA found that the penalty for these 2,698 violations would have
increased by approximately 98% under the regular assessment provision
of this final rule. Nevertheless, MSHA expects that there will be
circumstances in which the regular assessment provision of this final
rule will not provide an appropriate penalty for particular violations.
The Agency found, in reviewing violations that were assessed in 2005,
approximately 35% of all violations issued under the special assessment
provision of the existing rule would have received a lower penalty
under the regular assessment provision of this final rule. MSHA intends
to apply the special assessment provision of this final rule for those
violations where the regular assessment does not provide an appropriate
penalty. Consistent with a commenter's request, MSHA intends to review
the special assessment provision in the future to determine whether it
is achieving its purpose or whether changes are needed. MSHA monitors,
on a monthly basis, the number of assessments under the existing
special assessment provision. MSHA intends to continue this monitoring
and to analyze the monitoring results. In addition, as stated
previously, MSHA intends to continue to process violations involving a
fatality and those issued to agents of the mine operator as special
assessments. MSHA will also process flagrant violations, violations for
failure to timely notify MSHA, and timely abate violations, and smoking
violations, as listed under sections 100.5(c) through (f) as special
assessments.
Final Sec. 100.5(a) adopts the language of the proposed rule.
Final Sec. 100.5(b), like the proposal, contains non-substantive
changes for clarity. It removes the reference to existing Sec.
100.4(b) because the single penalty provision is deleted in this final
rule. MSHA received no comments on this proposal and made no changes to
it. Therefore, final Sec. 100.5(b) adopts the language of the proposed
rule.
Final Sec. 100.5(c), like the proposal, remains unchanged from
existing Sec. 100.5(c). It provides that 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.
One commenter stated that MSHA should apply the maximum daily
penalty of $6,500 while abatement work is being performed and it should
continue to be applied every day until all such work is completed. MSHA
will continue to enforce the daily penalty in accordance with the Mine
Act, which provides for a ``reasonable time'' for abatement. The final
rule adopts the language used in the proposal.
Final Sec. 100.5(d), like the proposed rule, remains unchanged
from existing Sec. 100.5(d). This provision pertains to penalties for
miners who violate standards related to smoking and smoking materials.
MSHA received a few comments on this proposal. They suggested that MSHA
increase the maximum penalty that could be assessed against a miner for
a smoking violation. One commenter suggested an increase from $275 to
$500 and another commenter suggested an increase to $220,000, similar
to the maximum penalty for flagrant violations. The maximum penalty for
miners who violate standards related to smoking or smoking materials,
however, is established by statute, and can be adjusted only for
inflation unless specifically adjusted by Congress. Therefore, the
final rule retains the language of existing paragraph (d) as proposed.
Final Sec. 100.5(e), like the proposal, implements the provision
of the MINER Act pertaining to penalties for flagrant violations. Under
the MINER Act, violations that are deemed to be flagrant may be
assessed a civil penalty of not more than $220,000. The proposal, which
adopted the definition in the MINER Act, defined a ``flagrant''
violation 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.
Several commenters stated that the proposed language with respect
to flagrant violations was too vague. They suggested that flagrant
violations be limited to repeated violations of the same standard that
were issued under Section 104(d) of the Mine Act, characterized as
involving reckless disregard. They further suggested that flagrant
violations be limited to violations that have been finally adjudicated.
MSHA considered these suggestions in developing this final rule and has
determined that it would be most beneficial to miner's safety and
health to retain the proposed language. In addition, the proposed
language mirrors the MINER Act. Violations that are deemed to be
flagrant would be subject to a penalty of up to $220,000 under the
special assessment provision of this final rule.
Several commenters expressed concern that proposed Sec. 100.5(e)
wrongly applied the penalty for flagrant violations to violations under
section 110(a) of the Mine Act. They stated that Congress adopted
penalties for flagrant violations by amending section 110(b) of the
Mine Act, which pertains to penalties assessed to operators who have
failed to correct a violation. They asserted that Congress intended the
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penalty for flagrant violations to apply only to failures to correct a
violation under section 110(b).
Section 1301 of the Pension Protection Act contains technical
amendments to the MINER Act. Public Law No. 109-280 (Aug. 17, 2006).
The provision for criminal penalties was moved from section 110(a)(2)
of the Mine Act and is now the new section 110(d). Section 110(b) of
the Mine Act now has two sub-subsections. Section 110(b)(1) provides
for assessment of a daily civil penalty for violations that have not
been corrected. Section 110(b)(2) provides for assessment of a civil
penalty of not more than $220,000 for violations that are deemed to be
flagrant.
For a number of reasons, MSHA believes that a flagrant violation
under section 110(b)(2) is not limited to a violation that an operator
has failed to correct under section 110(b)(1). First, section 110(b)(1)
specifically applies to failure to correct a ``violation for which a
citation has been issued.'' In contrast, section 110(b)(2) applies to
failure to eliminate a ``known violation,'' and does not specify that a
``known violation'' must be a violation which has been cited.
Second, the Senate Report accompanying the MINER Act discusses
flagrant violations without any reference to section 110(b) and without
any indication that a flagrant violation must be a violation which has
been cited. S. Rep. No. 109-365 (Dec. 6, 2006).
Third, section 110(b)(2) applies to failure to eliminate violations
``under this section'' (emphasis added) that are deemed to be flagrant.
Section 110(b)(2) cannot be read as applying only to violations under
section 110(b) because section 110(b) is a subsection, not a section.
Instead, Section 110(b)(2) must be read as applying to violations under
the section in which it appears--i.e., section 110--including section
110(a).
Fourth, section 110(b)(2) is, by virtue of its designation as a
sub-subsection separate and distinct from section 110(b)(1), a
provision distinct and independent from section 110(b)(1). That
designation suggests that section 110(b)(2) is not limited to
violations encompassed by section 110(b)(1).
Finally, it would be illogical to limit flagrant violations to
violations which have been cited. Plainly, failure to eliminate a
violation which is known to the operator but which has not been cited
by MSHA--perhaps because MSHA has not conducted an inspection since the
violation arose--can be just as dangerous, and just as deserving of an
enhanced penalty, as a violation which is known to the operator and
which has been cited.
Accordingly, the proposal has been modified. Final Sec. 100.5(e)
includes a reference to section 110(b)(2) of the Mine Act.
Final Sec. 100.5(f), like the proposal, implements the penalty
provisions of the MINER Act pertaining to prompt incident notification.
Under the MINER Act, an operator who fails to provide timely
notification to the Secretary, in the event of a death, or an injury or
entrapment with reasonable potential to cause death, 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.
One commenter expressed concern that proposed Sec. 100.5(f) would
be applied to all violations under part 50.10, stating that for
example, violations for failure to report a fire or hoist problems
would be included. Final Sec. 100.5(f), like the proposed rule,
implements the penalty provisions of the MINER Act pertaining to prompt
incident notification. In this regard, final Sec. 100.5(f) is
applicable only to the following events: the failure to notify MSHA of
a death, or an injury or entrapment which has a reasonable potential to
cause death.
Several commenters stated that this proposed provision is
counterproductive and could inhibit first responders from time-critical
stabilization of a victim. They suggested adding language, for example,
that in a case in which delay has the potential to cause additional
injuries, or the victim of an accident requires first aid, the 15
minutes shall begin upon stabilization of the site and the victim. This
same issue was raised during the rulemaking concerning MSHA's Emergency
Mine Evacuation Final Rule published on December 8, 2006. In the
preamble to that rule, MSHA addressed the issue in the following
manner:
If a situation were to arise involving extenuating
circumstances, such as an operator having to choose between saving
someone's life and notifying MSHA, enforcement discretion would take
those circumstances into account. MSHA does not expect that an
operator who has to make a decision between rendering life-saving
assistance and calling MSHA would be penalized for providing that
assistance.
71 FR 71430 (Dec. 8, 2006). MSHA supports the foregoing conclusion.
No changes were made to proposed Sec. 100.5(f) and the final rule
adopts the proposed language.
Procedures for Review of Citations and Orders; Procedures for
Assessment of Civil Penalties and Conferences (Sec. 100.6)
Final Sec. 100.6, like the proposed rule, contains requirements
and administrative procedures for review of citations and orders.
Final Sec. 100.6(a), like the proposal, contains the provision in
existing 100.6(a) that all parties, i.e., the operator and miners or
their representatives, shall have the opportunity to review each
citation and order with MSHA. In addition, it incorporates existing
Sec. 100.6(c), which provides that the decision to grant a request for
a conference is within MSHA's discretion. MSHA received no comments on
the proposed reorganization of Sec. 100.6(a). Therefore, the final
rule adopts the language in the proposal.
Final Sec. 100.6(b), like the proposal, is derived from existing
Sec. 100.6(b). MSHA proposed modifying the existing provision by
reducing the period, from 10 days to five days, within which an
operator could submit additional information or request a safety and
health conference with the District Manager or designee.
In addition, at the last two public hearings during this
rulemaking, the Agency stated in its opening statement that it intended
to include a requirement that a request for a safety and health
conference be in writing and include a brief statement as to why each
citation or order should be conferenced. The Agency requested comment
on this issue. To allow all parties an opportunity to comment on this
issue, MSHA reopened the comment period to this rulemaking and
specifically requested comments as to whether a request for a safety
and health conference should be in writing and whether such a request
should include a brief statement of the reason why each citation or
order should be conferenced.
A few commenters supported the proposed reduction of the period
within which an operator could submit additional information or request
a safety and health conference. One commenter stated that the proposal
would result in a more effective civil penalty system because penalties
would be assessed closer in time to the issuance of the citation.
Almost all commenters, however, opposed the proposed reduction in
the time period for requesting a safety and health conference. They
stated that they would not have sufficient time to evaluate a citation
or order and determine the appropriate course of action to take. In
addition, they stated
[[Page 13624]]
that delays in scheduling conferences often cause delays in the
issuance of penalties. Several commenters noted that conferences
sometimes are not held until several months after a request has been
made because MSHA's Conference and Litigation Representatives (CLRs)
have a backlog of conferences.
After receiving comments, MSHA decided not to reduce the 10-day
period within which a party may submit additional information or
request a safety and health conference. In making this decision, the
Agency believes that the safety and health of miners is improved when,
after an inspection, operators and miners or their representatives are
afforded an ample opportunity to discuss safety and health issues with
the MSHA District Manager or designee.
MSHA received one comment in support of and several comments
opposed to the proposed requirement that a request for a safety and
health conference be in writing and include a brief statement of the
reason why each citation or order should be conferenced. Commenters
opposed to the proposal stated that a requirement that conference
requests be in writing would cause extreme difficulties for the
operator and ultimately result in discouraging the conference process.
Specifically, these commenters stated that the proposed requirement
places an unnecessary burden on operators who have limited
administrative resources to thoroughly investigate citations and orders
and gather documentation within a limited amount of time pertaining to
each citation and order.
One commenter generally agreed with the proposal that the request
for a safety and health conference be in writing and include a brief
statement as to why each citation or order should be conferenced, but
stated that the requirement should not be mandatory. Several commenters
stated that some MSHA districts currently require safety and health
conference requests to be in writing. One commenter mistakenly believed
that the existing regulations require that safety and health conference
requests be in writing.
After reviewing all comments, MSHA has decided to include in the
final rule the proposed requirement that the request for a safety and
health conference be in writing and include a brief statement as to why
each citation should be |
