COALEX STATE COMPARISON REPORT - 212
May, 1992
Myra Spicker, Esquire
Division of Reclamation
Department of Natural Resources
309 W. Washington Street
Suite 201
Indianapolis, Indiana 46204
TOPIC: DISCRETION TO WAIVE CIVIL PENALTIES
INQUIRY: According to 30 CFR 845.12(c), a regulatory authority MAY assess a penalty for each
NOV assigned 30 points (or $1,000) or less. At one time Indiana, in practice, automatically
waived all penalties below $1,100. Subsequently, the policy changed and the waiving of civil
penalties became discretionary, depending on mitigating circumstances. Do other states waive
civil penalties, if so, under what circumstances? Are there any cases that discuss the difference
between a policy and a promulgated rule?
SEARCH RESULTS: A telephone survey was conducted of seven IMCC member states (Alabama,
Illinois, Kentucky, Maryland, Ohio, Pennsylvania and West Virginia). Research was also conducted
using the COALEX Library in LEXIS. The results of the survey and research follow. Copies of the
relevant state program sections are attached. Several cases are also attached that address the
agency policy versus promulgated rule issue.
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STATE REGULATIONS: RESPONSES TO SURVEY
ALABAMA
The language of 880-X-11D-.04 (1982) is identical to 30 CFR 845.12. In practice, civil penalties
are not waived.
ILLINOIS
Illinois Administrative Code Sec. 1845.12 (1988) requires payment of a penalty for assessments
of $1,100 or more. In practice, civil penalties less than $1,100 are waived unless certain
circumstances occur, e.g., a second NOV is issued to the operator within a 12 month period.
KENTUCKY
The requirements of 405 KAR 7:095E, Sec. 2 follow 845.12. Kentucky has a penalty assessment
manual that outlines the circumstances under which an assessment for a violation assigned under
30 points may or may not be waived, e.g., penalties will always be assessed for off-permit impact
or damage no matter what the total of points assigned.
MARYLAND
COMAR Sec. 08.13.09.41 (1982), the corresponding section to 845.12, states that the
regulatory authority may assess civil penalties but does not specify a threshold for points or dollar
figures above which penalties must be assessed. In practice, penalties totaling less than $200
may be assessed; anything over $200 must be assessed.
OHIO
Ohio Administrative Code Sec. 1501:13-14-03 (1987) states that the regulatory authority shall
determine whether a penalty shall be assessed but does not specify a threshold for points or
dollar figures above which penalties must be assessed. In practice, penalties of $500 or less are
generally waived unless certain circumstances occur, e.g., there is a duplicate violation issued
within a 12 month period.
PENNSYLVANIA
Sec. 86.193 (1991) of the Pennsylvania Department of Environmental Resource's regulations
states that assessment of a civil penalty is discretionary when the calculated amount is less than
$1,000 per violation. The attached policy statement lists those situations where a penalty
assessment is mandatory.
WEST VIRGINIA
Sec. 38-2-20.5 (1991) states that assessment of a penalty for amounts less the $1,000 is at the
discretion of the Commissioner. In practice, penalties under $1,000 are waived depending on the
seriousness of the violation, e.g., penalties are not waived for off-permit damage.
STATE REGULATIONS: REGULATION SECTIONS FROM COALEX
INDIANA
310 IAC 12-6-11 follows 30 CFR 845.12 and allows discretion for violations of 30 points or less.
MISSOURI
10 CSR 40-8.040 (1990) follows 30 CFR 845.12 and allows discretion for violations of 30 points
or less.
VIRGINIA
480-03-19.845.12 (1986), the Virginia counterpart to the federal regulation, states that the
regulatory authority may assess a penalty for each notice of violation but does not specify a
threshold for points or dollar figures above which penalties must be assessed.
PERMANENT PROGRAM PREAMBLE
44 FR 14902 (MARCH 13, 1979). Preamble to the final rules. 30 CFR Part 845 Civil penalties.
The preamble to Part 845 is attached for background. Of particular interest is the following
paragraph from Sec. 845.12 When penalty will be assessed.
"One commenter asked that, regardless of whether the notice of violation is assigned 30 points or
less, violations caused by conduct characterized as reckless, knowing, or intentional should
automatically trigger a fine. As mentioned in 845.12, in determining whether to assess an under-31 point penalty, the Office takes into account the four statutory criteria, including negligence and
good faith in compliance. As a matter of policy, the Office currently assesses discretionary
penalties in cases of reckless or willful misconduct or lack of good faith in complying."
CASE LAW
PACIFIC GAS AND ELECTRIC COMPANY v FEDERAL POWER COMMISSION (FPC), 506 F 2d 33
(DC Cir 1974).
In this case, affirming the FPC's issuance of an order directing natural gas pipeline companies
to file curtailment plans when periods of gas shortage were expected to occur, the court
articulated the distinction between substantive rules which must be properly promulgated and an
agency's statements of policy which do not require rule-making procedures:
"An administrative agency has available two methods for formulating policy that will have the
force of law. An agency may establish binding policy through rule-making procedures by which it
promulgates substantive rules, or through adjudications which constitute binding precedents. A
general statement of policy is the outcome of neither a rulemaking nor an adjudication; it is
neither a rule nor a precedent but is merely an announcement to the public of the policy which
the agency hopes to implement in future rulemakings of adjudications. A general statement of
policy, like a press release, presages an upcoming rulemaking or announces the course which the
agency intends to follow in future adjudications.
. . .
The critical distinction between a substantive rule and a general statement of policy is the
different practical effect that these two types of pronouncements have in subsequent
administrative proceedings.... A properly adopted substantive rule establishes a standard of
conduct which has the force of law.... The underlying policy embodied in the rule is not generally
subject to challenge before the agency.
A general statement of policy, on the other hand, does not establish a 'binding norm'.... A policy
statement announces the agency's tentative intentions for the future. When the agency applies
the policy in a particular situation, it must be prepared to support the policy just as if the policy
statement had never been issued."
Also see:
PENN. HUMAN RELATIONS COMM. V NORRISTOWN AREA SCHOOL DISTRICT, 374 A 2d 671 (Pa
1977).
The court affirmed the Commission's definition of segregated school in its guidelines as "a
general statement of policy and not an administrative regulation subject to the publication
requirements of the Administrative Agency Law."
LOPATA v UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, 493 A 2d 657 (Pa 1985).
The court found that a formula used by the Unemployment Compensation Board of Review to
definitely calculate certain credit weeks was an improperly adopted regulation and was invalid
because it was "completely and unequivocally determinative" of the issue to which it applied.
DEPT. OF ENVIRONMENTAL RESOURCES (DER) V RUSHTON MINING CO., 591 A 2d 1168
(Commw Ct Pa 1991).
The court affirmed the Environmental Hearing Board's (EHB) ruling that the standard conditions
placed on 46 coal mining permits by DER constituted regulations and were therefore invalid. "The
EHB found that these standard conditions, which established binding norms of general
applicability and future effect, were regulations which should have been promulgated pursuant to
the Commonwealth Documents Law." [Cites to the three cases above.]
PRUDENTIAL PROPERTY AND CASUALTY INSURANCE CO. v DEPT. OF INSURANCE, 595 A 2d 649
(Commw Ct Pa 1991).
Citing to the first three cases above, the court found that the Commissioner's use of a 12%-rate-of-return-on-surplus threshold used in evaluating filings for extraordinary circumstances relief
did not constitute a regulation: "the 12% threshold is not established, nor is there evidence that it
is applied, in a way which precludes any adjustment for individual circumstances through
adjudication on a case-by-case basis." However, the matter was remanded to the Commissioner
"to take evidence on the issue of the appropriate industry rate of return and the threshold rate of
return applicable to this proceeding."
ATTACHMENTS
A. ALABAMA
Reg. Sec. 880-X-11D-.04 (1983) When penalty will be assessed.
Reg. Sec. 880-X-11D-.08 (1983) Waiver of use of formula
B. ILLINOIS
IAC Sec. 1845.12 (1988) When penalty will be assessed.
IAC Sec. 1845.11 (1988) How assessments are made.
C. KENTUCKY
405 KAR 7:095E, Sec. 2 (1983) When penalty will be assessed.
405 KAR 7:095E, Sec. 6 (1983) Waiver of use of point system.
D. MARYLAND: COMAR 08.13.09.41 (1982) Civil penalties.
E. OHIO: Ohio Admin. Code 1501:13-14-03 (1987) Civil penalties.
F. PENNSYLVANIA
Reg. Sec. 86.192 (1991) How assessments are made.
Reg. Sec. 86.193 (1991) When a penalty will be assessed.
Reg. Sec. 86.194 (1991) System for assessment of penalties.
Policy Statement (1986) Civil penalty program
54 FR 34168 (AUGUST 18, 1989). Final rule. Approval of amendment. [Excerpt]
G. WEST VIRGINIA
Reg. Sec. 38-2-20.5 (1991) Civil penalty determinations.
Reg. Sec. 38-2-20.6 (1991) Procedure for assessing civil penalties.
H. INDIANA
310 IAC 12-6-11 (1986) Civil penalties; when assessed.
310 IAC 12-6-14 (1982) Civil penalties; waiver
I. MISSOURI: 10 CSR 40-8.040 (1990) Penalty assessment.
J. VIRGINIA
Reg. Sec. 480-03-19.845.12 (1986) When a penalty will be assessed.
50 FR 28324 (JULY 11, 1985). Final rule. [Excerpt]
K. 44 FR 14902 (MARCH 13, 1979). Preamble to the final rules. 30 CFR Part 845 Civil
penalties.
L. PACIFIC GAS AND ELECTRIC COMPANY v FEDERAL POWER COMMISSION (FPC), 506 F 2d
33 (DC Cir 1974).
M. PENN. HUMAN RELATIONS COMM. v NORRISTOWN AREA SCHOOL DISTRICT, 374 A 2d
671 (Pa 1977).
N. LOPATA v UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, 493 A 2d 657 (Pa
1985).
O. DEPT. OF ENVIRONMENTAL RESOURCES (DER) v RUSHTON MINING CO., 591 A 2d 1168
(Commw Ct Pa 1991).
P. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE CO. v DEPT. OF INSURANCE, 595 A
2d 649 (Commw Ct Pa 1991).
Research conducted by: Joyce Zweben Scall
