Mine Safety and Health Administration: Implementation of the
Inflation Adjustment Act (27-NOV-02, GAO-03-288R).
The Federal Civil Penalties Inflation Adjustment Act of 1990 went
under a governmentwide review by GAO earlier this year. The act
required each federal agency to issue a regulation adjusting its
covered maximum and minimum civil monetary penalties for
inflation by October 23, 1996, and requires them to make
necessary adjustments at least once every 4 years thereafter. GAO
determined that the Mine Safety and Health Administration within
the Department of Labor published its first round of penalty
adjustments in April 1998, but has not published a second round
of adjustments for at least two eligible penalties.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-288R
ACCNO: A05614
TITLE: Mine Safety and Health Administration: Implementation of
the Inflation Adjustment Act
DATE: 11/27/2002
SUBJECT: Inflation
Federal law
Fines (penalties)
Noncompliance
Consumer Price Index
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GAO-03-288R
GAO- 03- 288R MSHA Penalty Adjustments
United States General Accounting Office Washington, DC 20548
November 27, 2002 The Honorable Elaine L. Chao The Secretary of Labor
Subject: Mine Safety and Health Administration: Implementation of the
Inflation Adjustment Act
Dear Madam Secretary: Earlier this year, we initiated a governmentwide
review of the implementation of the Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended (Inflation Adjustment Act). 1
The Inflation Adjustment Act required each federal agency to issue a
regulation adjusting its covered maximum and minimum civil monetary
penalties for inflation by October 23, 1996, and requires them to make
necessary adjustments at least once every 4 years thereafter. During our
review, we determined that the Mine Safety and Health Administration
(MSHA) within the Department of Labor published its first round of penalty
adjustments in April 1998, but has not published a second round of
adjustments for at least two eligible penalties. This report is intended
to bring this matter to your attention and to recommend corrective action.
MSHA Has Not Published a Second Round of Adjustments for Eligible
Penalties
Under the Inflation Adjustment Act, MSHA (like other covered federal
agencies) was required to publish a regulation by October 23, 1996,
adjusting its maximum civil penalties for inflation. The act requires
those inflation adjustments to be based on changes in the Consumer Price
Index (CPI) from June of the calendar year in which the penalties were
last set or adjusted through June of the year prior to the adjustment. The
statute also includes precise rules for rounding penalty increases. For
example, the statute provides that penalty increases must be rounded to
the nearest *multiple of $1,000 in the case of penalties greater than
$1,000 but less than or equal to $10,000.* The statute limited the first
adjustments of an agency*s penalties to 10 percent of the penalty amounts.
It also requires agencies to examine their penalties at least once every 4
years and, if necessary, make additional inflation adjustments.
1 The Inflation Adjustment Act is codified at 28 U. S. C. 2461 note. The
1990 act was amended in 1996 by the Debt Collection Improvement Act, which
added the requirement for agencies to adjust their civil penalties by
regulation (Pub. L. 104- 134, Sec. 31001, 110 Stat. 1321- 373).
GAO- 03- 288R MSHA Penalty Adjustments Page 2 On April 22, 1998, MSHA
published a final rule making its first penalty adjustments
under the Inflation Adjustment Act, with the penalty changes taking effect
on June 22, 1998. 2 Therefore, MSHA should have examined its civil
penalties and adjusted those penalties that were eligible under the
statute by June 2002. For those penalties initially adjusted in 1998, MSHA
should have used the percentage change in the CPI that occurred from June
1998 through June 2001 (about 9.2 percent) to determine whether another
adjustment was warranted.
We believe that at least two of the agency*s penalties should be adjusted
as soon as possible: (1) a $5,500 penalty that should be adjusted to
$6,500 and (2) a $55,000 penalty that should be increased to $60,000. MSHA
officials told us during our review that the agency intends to adjust
these penalties. However, as of the date of this letter, MSHA has not done
so.
Recommendation for Executive Action
We recommend that the Secretary of Labor direct the Assistant Secretary of
Labor for Mine Safety and Health to initiate a regulatory action as soon
as possible to adjust eligible civil penalties in a manner consistent with
the requirements of the Inflation Adjustment Act.
Agency Comments and Our Evaluation
On November 6, 2002, we provided a draft of this report to the Secretary
of Labor for her review and comment. On November 26, 2002, the Assistant
Secretary of Labor for Mine Safety and Health responded by letter agreeing
that MSHA should have adjusted its civil penalties again by June 2002. He
also said that MSHA was developing a direct final rule that would make
those adjustments.
- - - - We are sending copies of this report to the Assistant Secretary of
Labor for Mine Safety and Health and to appropriate congressional
committees. It will also be available at no charge on GAO*s Web site at
http:// www. gao. gov. If you or your staff have any questions on the
matters discussed in this letter, you may contact Curtis Copeland or me at
(202) 512- 6806. John Tavares was a major contributor to this report.
Sincerely, Victor S. Rezendes Managing Director Strategic Issues
(450170) 2 See 63 Fed. Reg. 20032.
*** End of document. ***