Surface Mining:

States Not Assessing and Collecting Monetary Penalties

RCED-87-129: Published: Jun 5, 1987. Publicly Released: Jul 6, 1987.

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In response to a congressional request, GAO reviewed the performance of Kentucky, Indiana, and Colorado in assessing and collecting civil penalties against coal mining operators who violated environmental standards.

GAO found that: (1) of 201 violations it randomly selected for the period January through June 1985, the states determined that 18 violations never actually occurred; (2) of the remaining 183 violations, the states assessed a monetary penalty on 40 percent, used their discretionary authority to waive the penalty on 50 percent, and made no penalty determination on 10 percent; (3) of the violations with assessed values of less than $1,100, Indiana and Kentucky waived 88 and 63 percent, respectively, while Colorado did not waive penalties of any amount; (4) the states were lenient in considering violators' demonstrated good faith in abating the cited violation and prior violation histories; and (5) Kentucky did not always impose the mandatory penalty for each violation and improperly reduced or eliminated penalties during negotiations and hearings prior to issuing final orders. GAO also found that: (1) as of June 30, 1986, the states had not collected about $84.8 million of the $89.8 million in penalties they assessed; (2) Colorado collected 55 percent of assessed penalties, Indiana collected 7 percent, and Kentucky collected 5 percent; (3) none of the states have penalty collection systems that are consistent with established Internal Revenue Service (IRS) debt collection procedures; (4) Colorado lacks a system to track unpaid penalties; (5) Indiana initiates its collection effort promptly, but fails to take additional action if the violator fails to pay the penalty; and (6) Kentucky does not always initiate prompt action.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Corrective action was taken concerning Kentucky in the context of a settlement agreement negotiated with the assistance of Interior. Other states will be handled by the oversight guidance directive REG-8, dated October 9, 1987, covering civil penalties and procedures to follow for identifying problems and taking corrective actions.

    Recommendation: The Secretary of the Interior should require the Director, Office of Surface Mining Reclamation and Enforcement (OSMRE), to take steps to ensure that Kentucky and other states with primary regulatory authority assess mandatory penalties when violations are not corrected within the specified abatement period.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: OSMRE offered assistance to states in a number of areas. However, OSMRE believes that penalty collection is a state responsibility. OSMRE reviewed state penalty assessment and collection systems as part of its fiscal year 1988 oversight reviews of the state programs.

    Recommendation: The Secretary of the Interior should require the Director, OSMRE, to review state penalty collection systems as part of its annual oversight evaluations. In performing this review, OSMRE should require states to make available all records, files, and documents relating to all aspects of the penalty collection system or activity. The states should be required to develop and implement written procedures that provide detailed instructions to facilitate debt collection using generally accepted debt collection practices, such as those followed by IRS.

    Agency Affected: Department of the Interior

  3. Status: Closed - Implemented

    Comments: Interior believes that, to some extent, this recommendation has been implemented, because OSMRE guidelines for annual oversight evaluations require a review of whether civil penalty assessment decisions are documented by the state. OSMRE offered to provide states with training and other support so as to upgrade their assessment and collection systems; however, state participation is voluntary.

    Recommendation: The Secretary of the Interior should require the Director, OSMRE, to require the states to fully explain and document, in the records of each violation, the basis for the proposed penalty and any subsequent adjustments.

    Agency Affected: Department of the Interior


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