Farm Service Agency
Rural Business-Cooperative Service
Rural Housing Service
Rural Utilities Service
Foreign-Trade Zones Board
International Trade Administration
National Oceanic and Atmospheric Administration
Patent and Trademark Office
Navy Department
Federal Energy Regulatory Commission
Food and Drug Administration
Health Care Financing Administration
National Institutes of Health
Federal Housing Enterprise Oversight Office
Fish and Wildlife Service
Land Management Bureau
Employment and Training Administration
Employment Standards Administration
Federal Housing Enterprise Oversight Office
Food and Drug Administration
National Institutes of Health
Committee for the Implementation of Textile Agreements
Federal Aviation Administration
Federal Railroad Administration
Surface Transportation Board
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.
Federal Energy Regulatory Commission.
Order concluding initial five-year review of the oil pipeline pricing index.
The Federal Energy Regulatory Commission (Commission) is issuing this final order concluding its five-year review of the oil pricing index, established in Order No. 561, Revisions to Oil Pipeline Regulations Pursuant to the Energy Policy Act of 1992, FERC Stats. & Regs. [Regs. Preambles, 1991-1996] ¶ 30,985 (1993). After consideration of all the initial and reply comments, the Commission has concluded that the PPI-1 index has reasonably approximated the actual cost changes in the oil pipeline industry during the preceding five year period, and that it should be continued for the subsequent five year period. At the end of this period, in July 2005, the Commission will once again review the index to determine whether it continues to measure adequately the cost changes in the oil pipeline industry.
Harris S. Wood, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426. (202) 208-0224.
Before Commissioners: James J. Hoecker, Chairman; William L. Massey, Linda Breathitt, and Curt He
Issued December 14, 2000.
On July 27, 2000, the Commission issued a notice of inquiry (NOI) in this proceeding on its five-year review of the oil pricing index.
For the reasons appearing below, the Commission affirms that the PPI-1 index has closely approximated the actual cost changes in the oil pipeline industry as reported in FERC Form No. 6, and concludes that this index continues to satisfy the mandates of the Energy Policy Act of 1992.
This is the first of the Commission's five-year reviews of the effectiveness of the oil price index established in Order No. 561. As the Commission stated in Order No. 561, the selection of the PPI-1 was not necessarily a choice for all time. The Commission recognized that its responsibilities, to both shippers and pipelines, required it to monitor the relationship between the change in the PPI-1 index and the actual cost changes experienced by the industry. The Commission undertook to review the effectiveness of the index every five years.
In Order No. 561-A, the Commission reaffirmed its decision to use the annual change in the PPI-1 index to establish rate ceilings under the indexing system, and renewed its commitment to review this decision every five years, beginning with the year 2000.
Comments on the NOI were filed by AOPL, an unincorporated trade association of 56 common carrier oil pipelines, whose member companies transport nearly 80 per cent of the crude oil and petroleum products that moves by pipeline in the United States; jointly by Sinclair Oil Corporation, Crown Central Petroleum Corporation, Lion Oil Company and Tesoro Petroleum Company, Inc. (Sinclair); the Canadian Association of Petroleum Producers, a trade association representing approximately 165 producers in Canada; Equilon Pipeline Company LLC (Equilon); Williams Pipeline Company (Williams); and Platte Pipe Line Company. Reply comments were filed by AOPL, Sinclair, the Canadian Association of Petroleum Producers and Alberta Department of Resource Development (jointly, CAPP), and by Colonial Pipeline Company (Colonial). The issues raised in these comments are discussed below.
Staff's study presented a review of the effectiveness of the change in the PPI-1 index
AOPL presented comments and a study and testimonial declaration by Dr. Alfred E. Kahn, and recommended that the Commission utilize the PPI, rather than PPI-1, as the index to govern oil pipeline rate changes in the next five years.
Several of the commenters raised miscellaneous issues which are not relevant to the inquiry in this proceeding. Such miscellaneous issues include the extent of exceptions to the indexing methodology, constraints proposed in considering cost-of-service and market-based ratemaking, revision and simplification of complaint procedures, and the effectiveness of the index to deal with anticipated but unknown future cost changes in the industry. These issues are for other proceedings and will not be discussed herein.
The primary issues raised by the commenters and replies to those comments are set forth in detail, followed by the Commission's discussion and conclusions. In summary, those issues are:
This discussion begins by reciting AOPL's initial comments, including the testimony of Dr. Alfred E. Kahn, and Sinclair's reply comments, including the testimony of Professor F.M. Sherer, regarding use of the PPI-1 as the oil pipeline index. All other parties who commented on the relevant issue made essentially the same points or made comments that were not relevant in our review of the adequacy of the index to reflect industry cost changes.
In its review Staff examined the year-to-year percent changes in the annual weighted average cost of the oil pipeline industry, each pipeline firm's cost being weighted by its share of the total barrel-miles shipped during that year. Staff compared those changes with the year-to-year percent changes in the PPI-1 index. Staff made the comparison after adjusting the period during which the index changes occurred to match the period for which the cost data were available.
AOPL argues that Staff erred in focusing on the year-to-year changes in the annual weighted average cost of the entire pipeline industry. AOPL maintains this is the main error in Staff's analysis, accounting for most of the difference between AOPL's and Staff's results. AOPL asserts that the correct measure of costs to be examined is the (weighted or unweighted) average of the year-to-year changes in each pipeline firm's annual costs.
AOPL further asserts that Staff should have used the geometric (also known as cumulative) average for calculating average annual rates of change rather than the arithmetic average. AOPL argues that what really matters is the change over the five-year period, represented by the geometric average, rather than the simple, or arithmetic, average of year-to-year changes. It supports this with a simple example showing how the two measures differ.
In reply, Sinclair states that AOPL's study focuses mainly on individual company cost index changes that happened between two discrete years, from the 1994 base year to the 1999 terminal year, in effect ignoring everything that happened in the intervening years. Sinclair contends that by doing so, AOPL overlooks the multi-year averaging process that occurs under a price cap regulation scheme.
AOPL argues that Staff's use of a weighted average of operating costs is not the appropriate measure of industry costs by which to evaluate the index's performance. The choice between Staff's method and AOPL's method depends on the meaning of “actual cost changes experienced by the oil pipeline industry.”
AOPL has interpreted the objective of indexing to be choosing “the indexation formula that appears, on the basis of past experience, best to reflect the changes in costs that
AOPL also objects to Staff's use of the average of year-to-year changes in costs and the PPI-1 index to compare the index changes with the cost changes. AOPL argues that the change between the first and last years of the period being examined is better for comparing the index to industry costs than is the average used by Staff. As Sinclair has pointed out, however, AOPL has used 1994 barrel-miles weights in computing the weighted average costs for 1999 that it uses to measure the change between the two years. In addition, Sinclair notes that AOPL's method is a fixed-weight approach formerly used in the calculation of the Consumer Price Index but recently discarded. This change occurred because the fixed-weight approach ignored consumer substitution from high-priced goods to low-priced goods, consequently overestimating the amount of price inflation in the economy.
Upon reviewing the initial and reply comments, the Commission concludes that the methodology used by Staff as reflected in the NOI is correct. Staff's approach gives more weight to the volumes and distances products are shipped by the pipeline industry, whereas AOPL gives equal weight to the year-to-year cost changes of each individual firm, regardless of the volume and distances products are shipped. Indeed, as Sinclair noted, AOPL's approach, when applied to a larger set of firms, yields results that more reasonably approximate the PPI-1 than the PPI as the proper index to use in determining the annual price ceiling.
AOPL attempts to support its use of pipeline-specific cost experience, as opposed to industry-wide, barrel-mile, weighted average costs, with a hypothetical example. In AOPL's hypothetical, a high cost pipeline, which inexplicably has much higher volumes than a less costly competitor, finds that its business naturally migrates to the lower cost competitor. Thus, even though both companies' costs may increase somewhat over time, the industry-wide, barrel-mile weighted costs will decrease as more business is now flowing to the more efficient firm. This is simply the natural working of the market forces at play, and does not show any distortion resulting from Staff's methodology for calculating the industry's cost experience in support of the PPI-1 index choice. In fact, such behavior is exactly the type that an appropriately chosen index would be expected to encourage.
The Commission finds that the barrel-mile, weighted average cost approach, is fully consistent with determining an industry-wide, generally applicable index mechanism that is fair to both transporters and shippers alike. In fact, to use AOPL's approach would inappropriately skew the index by giving unreasonable weight to higher cost, less efficient transporters that move only a fraction of the industry-wide volumes. It is natural that such less efficient, more costly individual firms may experience higher costs than the vast majority of companies for which the general index, supported by a weighted-average barrel-mile analysis, is appropriate.
By emphasizing cost changes of individual firms rather than industry average cost changes, AOPL would raise the price ceiling and thereby enable more high-cost pipelines to become or remain profitable. In its comments on Order No. 561, AOPL supported a more generous index than the PPI-1 on the grounds that it would cover even the largest changes in costs and allow even the highest cost pipelines to cover their costs. In response to this argument we noted that “[t]he role of an index is to accommodate normal cost changes. Its purpose is not to guarantee recovery of
Sinclair, on the other hand, argued that the Commission should adopt the PPI-2 or at most PPI-1.5 as the index for determining oil pipeline rates for the next five years.
Staff's review uses as much information as possible from the available data based on FERC Form No. 6. Data were unavailable for some firms in some years. For example, a missing barrel-miles report for a particular firm in one year would drop that firm out of the data set for that year. However, Staff included that firm in its computations for each year containing valid data for the firm. As a result, Staff's data set contained a varying number of firms during the years 1994 through 1999.
AOPL argues that Staff, in its review, should not use pipeline firms for which data were available for some years and missing for others. AOPL limited its analysis to pipeline firms for which data were available for the entire period being examined.
Sinclair asserts in reply that because AOPL's study is based entirely on those companies that filed Form No. 6 data in every single year from 1994 to 1999, its data base is seriously flawed.
Sinclair contends that the AOPL study suffers from another major flaw in that AOPL's conclusions regarding changes in operating costs are based on companies that transported as little as 67 percent of the total miles transported by the industry in 1999. Sinclair states that this is the result of AOPL excluding 50 percent of the industry from its study.
Sinclair states that it replicated AOPL's analysis with variations in sample size and barrel-mile coverage to show the sensitivity of the AOPL study to these variables and how with minor changes in these variables AOPL's methodology produces operating cost changes that are far closer to PPI-1 than to PPI. In the first of three computations, Sinclair states that it followed AOPL and used the average changes in operating costs experienced by companies filing data in every year from 1994 to 1999, but excluded only the extreme 5 percent of reporting companies and substituted 1999 weights in place of 1994 weights. As a result, 89.8 percent of the barrel miles transported by the industry in 1999 were included. The study resulted in a weighted average annual percentage change in operating costs of 0.28 percent. Sinclair contends this result is substantially closer to the PPI-1 (0.17 percent) than to the PPI (1.17 percent).
In its second analysis, Sinclair used all companies that reported data in both 1994 and 1999, added Unocal Pipeline Company (Unocal) and Exxon Pipeline Company (Exxon) to its database because both companies conducted much of their business in the continental U.S. in addition to Alaska (and therefore were not subject to the TAPS exclusion), and used 100 percent of the companies rather than 95 percent. This analysis captures 94.2 percent of the barrel-miles and results in a weighted average annual percentage change in operating costs of 0.19 percent.
In its review, Staff considered all firms having valid data for at least one year during 1994 through 1999. The resulting data set differs from that used by AOPL in two important ways. First, it uses much more of the information available from the entire Oil Pipeline Research Institute (OPRI)
AOPL's concern with Staff's use of firms for whom cost data are not reported in all years between 1994 and 1999 inclusive is misplaced. Exclusion
AOPL has ignored information in a second way. So as to avoid being influenced by outliers (data that are extreme and thus may unduly affect the outcome), after AOPL has limited its data set as described above, it limits its review to the “middle fifty percent” and the “middle eighty percent” of its sample by excluding the “upper and lower” observations.
AOPL's own work suggests that as more and more of those omitted observations are included, the weighted-average change in operating cost declines.
Dropping outliers from a data distribution is a common technique to deal with the possible distortion they might impart to measures of its central tendency. The median of a data distribution is unchanged by dropping the same number of observations from the high end of the distribution as from the low end. Looking at the median, then, suggests that increasing or decreasing the number of outliers has little effect on the information available from the data set. In this case, however, the information available from the narrowed distribution varies substantially with the number of observations that are discarded as outliers.
In its analysis presented in the NOI, Staff excluded TAPS pipelines from its data set, including pipeline activity of Exxon and Unocal in the lower forty-eight states. To account for this omission, Staff included the operating costs and barrel-miles for those two companies in the contiguous forty-eight states and recalculated its results. The only resultant change appeared in the industry average cost per barrel-mile, which rose slightly from −0.47 percent to −0.43 percent.
Staff has redone its analysis using AOPL's method of excluding observations from the analysis on a data set enlarged to include every firm for which two consecutive years of cost data appeared at least once. Staff considered four cases: the entire distribution of changes for each of the five two-year periods, the middle 90 percent, the middle 80 percent and the middle 50 percent of the five distributions. These four cases provide two significant results regarding the effects of narrowing the data sets under consideration. First, reducing the initial data set to only those firms present in all years causes the weighted average of cumulative cost changes to increase. Second, as the number of observations dropped from the available distribution increases (
We are persuaded that taking full advantage of the available information is the proper path to take. Narrowing the set of observations may be appropriate if it is not possible to quantify the entire population in the analysis, so that a sample must be drawn to make the needed calculations. For example, the pollution levels in a contaminated landfill site are determined through sampling, not by analyzing every cubic yard of dirt in the landfill. In the present case, however, we are not required to sample. We can work with the complete data set without sampling. Using all available data is consistent with Order No. 561 to review the experience of the entire oil pipeline industry and not limit the review to some portion of it. In addition, the systematic changes that arise from narrowing the data set are troubling. We see no compelling reason to engage in a practice that is unnecessary and appears not to be neutral in its effect on our review.
In completing its review of historical changes in industry costs, the Staff used operating expenses as reported by pipelines in FERC Form No. 6.
AOPL points out that the data Staff uses are operating costs as reported in FERC Form No. 6, which includes depreciation but excludes other capital costs, especially return on investment and income taxes. AOPL argues that this is an important omission.
Sinclair argues that the AOPL study computes a new index of costs that include not only operating expenses as defined in FERC Form No. 6, but also the current year's net additions to the depreciated book value of plant and equipment. Sinclair contends this approach violates generally accepted accounting principles.
AOPL contends that Staff should have recognized return on investment and income taxes. AOPL itself, however, did not include a cost component that was associated with return on investment and income taxes. Rather AOPL's witness Dr. Kahn used an alternate method to approximate the costs associated with return on investment and income taxes. To account for these two components of cost, Dr. Kahn calculated the change in the net plant account for petroleum pipelines (
Order No. 561 required that the FERC Form No. 6 information be used to determine the cost changes experienced by the industry. However, FERC Form No. 6 does not include any cost figures associated with a pipeline's return on investment and income taxes. A pipeline's cost-of-service is made up of costs associated with operation, maintenance, depreciation and amortization, taxes, and return on rate base of which undepreciated value of carrier plant, or net plant, is the major component. However, only operation and maintenance and general expense (which includes depreciation and amortization) are included in FERC Form No. 6. AOPL proposes to approximate the other two cost-of-service items by measuring the change in net plant. Unlike the four cost-of-service items, net plant represents an asset account rather than an expense account item.
AOPL recognizes that depreciation and amortization is a measure of capital costs. The amortization and depreciation amounts listed in FERC Form No. 6 are based upon the carrier property used by Dr. Kahn in his calculation to approximate return on investment and taxes. As a result, an increase in net plant from one year to another should be matched by an increase in the depreciation expense and amortization associated on that plant. Likewise a decrease in net plant from one year to the next should be matched by a decrease in depreciation expense and amortization associated on that plant. Net plant is also the main component used to determine a pipeline's rate base that is used to compute return and taxes associated with return. As a result, an increase or decrease in a company's net plant would be reflected in the return on investment and associated taxes. Thus, depreciation expense and amortization, return, and taxes all measure a pipeline's capital investment. All three of these capital cost components differ from net plant in that: (1) they represent an expense amount rather than an asset amount, and (2) each represents only a fraction of the amounts represented by net plant. Depreciation and amortization expense represents the portion of depreciable assets allocated to expense each year. This allocation process is done over the estimated service lives of assets. Return is the cost associated with a pipeline's investment in rate base, of which net plant is the major component. Return is derived by multiplying rate base by a rate of return expressed as a percentage. Taxes are computed based upon the return.
The Commission is not persuaded by AOPL's arguments. The Commission finds that AOPL has not supported why a change in a pipeline's net plant can approximate a change in costs associated with return on investment and income taxes. Further, the Commission does not believe it appropriate to consider a pipeline's change in net plant from one year to another as a reasonable approximation of the change in costs associated with return on investment and income taxes. As discussed above the three capital cost components associated with net plant represent a small portion of this asset account. Thus, including net plant in an equation to determine a change in pipeline costs could unfairly weight any change in the capital portion of a pipeline's total costs. Therefore, the Commission finds that by using FERC Form No. 6 reported costs for operation and maintenance expenses (including depreciation expense), the majority of the dollars associated with a pipeline's cost-of-service components are being captured for the determination of the change in costs from year to year. This represents a more reasonable method than trying to approximate return and related income taxes based upon changes in net plant.
CAPP observes that the Energy Policy Act of 1992 required the Commission to establish a simplified and generally applicable ratemaking methodology for oil pipelines, consistent with the just and reasonable standards of the Interstate Commerce Act (ICA).
CAPP states, however, that it has concerns regarding the “general applicability” of a PPI-based index. CAPP questions whether one simple index can be “generally applicable” when the pipeline industry does not have a normal distribution of companies in terms of size and performance, that is, the industry structure is very concentrated by its representation of a small number of very large firms.
CAPP asserts that any index-to-actual cost differences, or regulatory errors, should be borne by the party that also receives the biggest benefit—in this case, the pipeline companies. CAPP contends the index should err on the side that results in the pipelines undercharging, in order to ensure the users of the pipelines do not bear a disproportionate share of the regulatory cost burden.
CAPP argues that since a pipeline's cost structure is not fully impacted by inflation, the cost base should not be fully indexed to inflation. CAPP also argues that an index approach can instill incentives to capture significant gains and costs reductions and these savings need to be reflected in rates. CAPP suggests that reducing the price index by a factor can be a mechanism to help keep rates in-line with underlying costs, without jeopardizing the underlying rationale or effect of the index methodology.
CAPP asserts that a five-year period is too short to compute a trend analysis that is statistically sound and that provides conclusive findings. CAPP concludes by saying that any historical correlations or comparisons of pipeline costs and the PPI are as likely to reflect random coincidence as they are to reflect a statistically significant relationship. CAPP also expresses a concern that small differences can have significant absolute impacts since the value and volume of crude oil transported through oil pipelines is huge. CAPP suggests an alternative method for assessing the appropriateness of the PPI,
CAPP claims pipeline companies have experienced significant cost
Platte contends that the PPI-1 index has failed to track changes in its individual operating costs over the past five years. Because of future anticipated costs, Platte argues that the PPI alone would be better than PPI-1, which it asserts has failed to adequately track pipeline cost changes during the past five years. It therefore urges the Commission to adopt “the PPI index proposed by AOPL.”
Williams suggests that the Commission revisit the propriety of the index resulting from this five-year review after a period of three years because of the possibility that pipelines' cost will increase significantly in the next two or three years as measures are taken to mitigate health, safety and environmental risks and to comply with new laws and regulations.
Equilon requests that an interim review of the index be performed prior to the 2005 review to determine whether the index has resulted in a revenue stream that has kept pace with increasing industry costs. In the absence of an interim review of the index, Equilon requests that a surcharge option be made available if the cost impact of pipeline safety legislation is both significant and pervasive.
We will not adopt the changes in the indexing methodology suggested by CAPP since similar issues were previously considered in the context of the proceeding which resulted in Order No. 561. Nor, as discussed above, will we adopt AOPL's and Platte's recommendation of substituting PPI for PPI-1. In Order No. 561, we recognized that it is inevitable that an indexing system will result in some divergence between the actual costs changes experienced by individual pipelines and the rate changes permitted by the index. This is because the indexing system utilizes average, economy-wide costs rather than pipeline specific costs to establish rate ceilings.
In adopting the indexing methodology, the Commission established “fail-safe” procedures and exceptions to maintain a proper balance between the interests of pipelines and shippers under the just and reasonable standard of the ICA. The Commission adopted a comprehensive scheme which includes cost-of-service and settlement alternatives. A procedure was established for shippers to challenge rate changes that, while in compliance with applicable ceilings, are so substantially in excess of actual costs as to be unjust and unreasonable.
The Commission in Order No. 561 rejected a suggestion that the index be applied to specific components of a rate because it could cause perverse and unintended consequences. The Commission concluded this would be complex and difficult to administer.
Finally, we decline to adopt CAPP's suggestion that we require a one-time adjustment to ensure that rates over the next five years continue to reflect pipelines' costs. The purpose of our indexing methodology is to permit adjustment to ceiling rates based on historical not anticipated cost changes over some future period.
Similarly, we decline to adopt Equilon's suggestion that we implement a surcharge to cover anticipated environmental and safety costs. A pipeline company has the option of making a cost-of-service filing pursuant to 18 CFR §§ 342 and 346 upon showing that there is a substantial divergence between the actual costs experienced by the pipeline and the rate resulting from application of the index. The Commission's cost-of-service filing requirements provide an appropriate mechanism for pipelines to seek recovery in the event such costs are incurred. Conversely, a shipper has adequate protection during the five-year period because it can challenge a pipeline's indexed rate as excessive.
CAPP suggests that a review period of greater than five years is necessary to complete “a trend analysis that is statistically sound that provides conclusive results.” On the other hand, Williams and Equilon suggest that the next review of the index be done in less than five years. Based on the experience gained in completing this five-year review, the Commission concludes that five years is a reasonable period over which to complete an assessment of the performance of the index and achieves a reasonable balance between the interests of pipelines and shippers. A pipeline has the opportunity to make a cost-of-service filing within the five-year period if it believes its index rate is not sufficient.
After consideration of all the initial and reply comments, for the reasons set forth above, the Commission concludes that the PPI-1 index has reasonably approximated the actual cost changes in the oil pipeline industry during the preceding five year period, and that it should be continued for the subsequent five year period. At the end of this period, in July 2005, the Commission will once again review the index to determine whether it continues to measure adequately the cost changes in the oil pipeline industry.
By the Commission.
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA) is amending the food additive regulations to provide for the safe use of polydextrose as a bulking agent, texturizer, or both in fruit and water ices. This action is in response to a petition filed by Pfizer, Inc.
This rule is effective December 20, 2000. Submit written objections and requests for a hearing by January 19, 2001.
Submit written objections to the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
Rosalie M. Angeles, Center for Food Safety and Applied Nutrition (HFS-206), Food and Drug Administration, 200 C St. SW., Washington, DC 20204, 202-418-3107.
In a notice published in the
The proposed use level of polydextrose in fruit and water ices is 5 to 15 percent with the weighted mean use level estimated to be 10 percent. The petitioner claims that this use level makes possible the formulation of lower-calorie fruit and water ices that compare favorably with prototypes that contain no polydextrose. The petitioner claims that the 15 percent use level is technologically self-limiting because of less than optimum mouthfeel, increased iciness, unfavorable taste and reduced acceptability at higher levels. The petitioner submitted data from sensory studies to substantiate this claim.
FDA estimated that the mean chronic consumption of polydextrose from the proposed use in fruit and water ices is 0.1 gram per person per day (g/p/d). The agency considers this consumption insignificant compared to the estimated cumulative intake of polydextrose of 18 g/p/d from all currently regulated uses of the additive. Therefore, FDA concludes that there will be a negligible increase in dietary exposure to polydextrose from the issuance of this amendment to the regulation (Ref. 1).
FDA has evaluated data in the petition and other relevant material in its files. Based on this information, the agency concludes that: (1) The proposed food additive use is safe, (2) the additive will achieve its intended technical effect, and therefore, (3) the regulation in § 172.841 should be amended as set forth below.
In accordance with § 171.1(h) (21 CFR 171.1(h)), the petition and the documents that FDA considered and relied upon in reaching its decision to approve the petition are available for inspection at the Center for Food Safety and Applied Nutrition by appointment with the information contact person listed above. As provided in § 171.1(h), the agency will delete from the documents any materials that are not available for public disclosure before making the documents available for inspection.
An inadvertent error was made in the
In the notice of filing, FDA gave interested parties an opportunity to submit comments on the petitioner's environmental assessment. The agency received no comments in response to that notice.
The agency has carefully considered the potential environmental effects of this action. FDA has concluded that the action will not have a significant impact on the human environment, and that an environmental impact statement is not required. The agency's finding of no significant impact and the evidence supporting that finding, contained in an environmental assessment, may be seen in the Dockets Management Branch (address above) between 9 a.m. and 4 p.m., Monday through Friday.
This final rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.
Any person who will be adversely affected by this regulation may at any time file with the Dockets Management Branch (address above) written objections by January 19, 2001. Each objection shall be separately numbered, and each numbered objection shall specify with particularity the provisions of the regulation to which objection is made and the grounds for the objection. Each numbered objection on which a hearing is requested shall specifically so state. Failure to request a hearing for any particular objection shall constitute a waiver of the right to a hearing on that objection. Each numbered objection for which a hearing is requested shall include a detailed description and analysis of the specific factual information intended to be presented in support of the objection in the event that a hearing is held. Failure to include such a description and analysis for any particular objection shall constitute a waiver of the right to a hearing on the objection. Three copies of all documents are be submitted and are to be identified with the docket number found in
The following reference has been placed on display in the Dockets Management Branch (address above) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday.
1. Memorandum from Z. Olempska-Beer, Division of Product Manufacture and Use, FDA, to R. Angeles, Division of Product Policy, FDA, November 21, 1995.
Food additives, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Director, Center for Food Safety and Applied Nutrition, 21 CFR part 172 is amended as follows:
21 U.S.C. 321, 341, 342, 348, 371, 379e.
(c) Polydextrose is used in accordance with current good manufacturing practices as a bulking agent, formulation aid, humectant, and texturizer in the following foods when standards of identity established under section 401 of the act do not preclude such use:
(1) Baked goods and baking mixes (restricted to fruit, custard, and pudding-filled pies, cakes, cookies, and similar baked products);
(2) Chewing gum;
(3) Confections and frostings;
(4) Dressings for salads;
(5) Film coatings on single and multiple vitamin and mineral supplement tablets;
(6) Frozen dairy desserts and mixes;
(7) Fruit and water ices;
(8) Fruit spreads;
(9) Gelatins, puddings and fillings;
(10) Hard and soft candy;
(11) Peanut spread;
(12) Sweet sauces, toppings, and syrups;
(13) Tablespreads.
Internal Revenue Service (IRS), Treasury.
Final regulations.
This document contains final regulations relating to recognition of gain on certain distributions of stock or securities of a controlled corporation. These final regulations affect corporations and their shareholders. These regulations reflect the enactment of section 355(d) of the Internal Revenue Code by the Omnibus Budget Reconciliation Act of 1990.
Michael N. Kaibni, (202) 622-7550 (not a toll-free number).
On May 3, 1999, the IRS and Treasury issued a notice of proposed rulemaking (REG-106004-98) in the
Generally, Congress intended section 355(d) to prevent taxpayers from using section 355 to dispose of subsidiaries in sale-like transactions, or to obtain a fair market value stepped-up basis for future dispositions, without incurring a corporate level tax. See H.R. Rep 101-881, at 341 (1990). Under proposed § 1.355-6(b)(3), section 355(d) does not apply to a distribution that does not violate its purposes (the purpose exception). As proposed, the purpose exception applies if the effect of the distribution and any related transaction is that a disqualified person neither increases an interest in Distributing or Controlled nor obtains a purchased basis in Controlled stock. A
The definition of “disqualified person” in the proposed regulations could be read to include persons who hold disqualified stock in Distributing or Controlled but who did not directly or indirectly purchase that stock. This could result in certain distributions that should not violate the purposes of section 355(d) nevertheless being disqualified distributions. The final regulations clarify that the term “disqualified person” includes only a person that meets that definition because of its own purchase of “disqualified stock” (or who receives stock in Controlled with respect to stock that the person purchased).
Commentators suggested that some “related acquisitions” of stock in Distributing or Controlled prior to or following a distribution should not be taken into account in determining if the purpose rule applies. The IRS and Treasury agree that in many cases a related acquisition that increases a disqualified person's interest in Distributing or Controlled should not be taken into account. In addition, the IRS and Treasury are concerned that the proposed regulations could be interpreted to allow taxpayers, by relying on certain other related transactions, to avoid section 355(d) inappropriately, where a distribution of stock, if viewed independently, would constitute a disqualified distribution. For example, where a distribution of Controlled stock to a Distributing shareholder constitutes a disqualified distribution, a subsequent but related distribution of that stock should not have the effect of “cleansing” the prior disqualified distribution. Based on these concerns, and a belief that other provisions of the final regulations will adequately address the effect of related transactions (
Some commentators requested that de minimis increases in interest in the stock of Distributing or Controlled should be disregarded in determining whether the purpose rule applies. The final regulations provide that an issuance of cash in lieu of fractional shares is disregarded in applying the purpose exception.
Generally, under the proposed regulations, disqualified stock is any stock in Distributing or Controlled acquired by purchase during the five-year period and any Controlled stock received in a distribution to the extent attributable to distributions on any stock in Distributing acquired by purchase during the five-year period. The definition of disqualified stock has been modified in the final regulations. The final regulations provide that stock of Distributing or Controlled that is acquired by a purchase within the five-year period (including such stock treated as indirectly acquired by purchase under section 355(d)(8) or § 1.355-6(e)(1), (2), (3) or (4) of the final regulations) ceases to be acquired by that purchase if the basis resulting from the purchase is eliminated. Basis in the stock of a corporation (or in an interest in another entity) is eliminated if (and when) it would no longer be taken into account by any person in determining gain or loss on a sale or exchange of any stock of such corporation (or an interest in the other entity). Basis is not eliminated, however, if it is allocated between stock of two corporations under § 1.358-2(a).
For example, under the proposed regulations, a direct purchase by Distributing of all of the stock in Controlled, followed by a distribution of the Controlled corporation stock is a disqualified distribution. Under the final regulations, because the distribution of Controlled will result in an elimination of the basis that resulted from Distributing's purchase of Controlled stock, the Controlled stock would no longer be treated as purchased. The Controlled stock is therefore not disqualified stock and the distribution of Controlled would not be a disqualified distribution. Further, any purchases of stock of lower tier subsidiaries of Controlled that arise under section 355(d)(8) as a result of Distributing's purchase of Controlled also would cease to be treated as purchased when Distributing's basis in Controlled is eliminated. Thus, in the example above, if Controlled has a subsidiary that would have been deemed purchased by Distributing when Distributing purchased the Controlled stock, the stock of that subsidiary would cease to be treated as purchased when Distributing's basis in Controlled is eliminated.
In general, basis of stock resulting from a purchase also is treated as eliminated if such stock is transferred to another person in an exchange or other transfer to which § 1.355-6(e)(2) or (3) (relating to carryover basis and exchange basis transactions) applies. The elimination of basis as a result of the transfer, however, does not affect the deemed purchase under § 1.355-6(e)(2) or (3) that arises as a result of the transfer. Thus, for example, if A purchases Controlled stock and subsequently transfers that stock to Distributing in a reorganization qualifying under section 368(a)(1)(B) in exchange for Distributing stock, A's basis in Controlled is eliminated. Under § 1.355-6(e)(3), A is deemed to purchase the Distributing stock on the date A purchased the Controlled stock. The elimination of A's basis in Controlled does not affect A's deemed purchase of its stock in Distributing (
Under section 355(d)(3)(b)(ii) and § 1.355-6(b)(2)(i)(B)(
The modified definition of disqualified stock eliminates the need for the “purchased interest no longer held” rule of § 1.355-6(b)(3)(iv) of the proposed regulations, since transactions that result in the purchased interest no
Section 355(d)(5) provides that, with certain exceptions, a purchase means any acquisition, but only if (1) the basis of the property acquired in the hands of the acquirer is not determined in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or under section 1014(a), and (2) the property is not acquired in an exchange to which section 351, 354, 355 or 356 applies. The proposed regulations follow the statutory definition of a purchase and provide examples of both purchase and non-purchase acquisitions. See § 1.355-6(d).
An example in the proposed regulations illustrates that if a section 338 election is made pursuant to an acquisition of stock, the stock acquired is treated as purchased for purposes of section 355(d)(5)(A) (See § 1.355-6(d)(1)(iii)
Section 1.355-6(d)(2)(v)(A) of the final regulations clarifies that an acquisition of stock (or an interest in another entity) by a partner pursuant to the liquidation of a partnership interest is a purchase of the stock (or other interest) acquired at the time of the liquidation of the partnership. Under § 1.355-6(d)(2)(v)(B) of the final regulations, if the adjusted basis of stock (or an interest in another entity) held by a partnership is increased under section 734(b), a proportionate amount of the stock (or other interest) will be treated as purchased at the time of the basis adjustment. The amount purchased is determined by reference to the amount of the basis adjustment over the fair market value of the stock (or other interest) at the time of the adjustment.
i.
ii.
iii.
Section 1.355-6(c) of the proposed regulations provides rules for determining if a person holds a 50 percent or greater interest in Distributing or Controlled. Under section 355(d)(7)(B) and § 1.355-6(c)(4), if two or more persons act pursuant to a plan or arrangement with respect to acquisitions of stock or securities in Distributing or Controlled, those persons are treated as one person for purposes of section 355(d). A rule has been added to the final regulations clarifying the application of this rule in the context of an exchanged basis transaction with respect to purchased stock. If two or more persons do not act pursuant to a plan or arrangement with respect to an acquisition of stock in a corporation (the first corporation), a
Section 1.355-6(c)(3) of the proposed and final regulations generally provides that options outstanding when the distribution occurs are treated as exercised when issued or last transferred if two criteria are met. First, the deemed exercise would cause a person to be a disqualified person. Second, immediately after the distribution, taking into account all the facts and circumstances, it is reasonably certain the option will be exercised. Commentators suggested that the “reasonably certain to be exercised” test be replaced with a “principal purpose to avoid section 355(d)” standard patterned on the regulations under section 382. The IRS and Treasury continue to believe, however, that the more objective standard of the proposed regulations is appropriate.
In response to a comment, the final regulations exclude from the definition of options cash settlement options, phantom stock, stock appreciation rights, and national principal contracts. However, to the extent that such instruments are exercisable into stock, they still would be subject to the deemed exercise rule of the final regulations under § 1.355-6(c)(3)(v) as an “other instrument that provides for the right to purchase, issue, redeem, or transfer stock.” The final regulations have also added a rule for substituted options treating the substituted option as issued on the date the original option was issued.
Under § 1.355-6(f)(1) of the proposed regulations, a distributing corporation must determine whether a disqualified person holds its stock or the stock of any distributed controlled corporation. Under § 1.355-6(f)(4), a distributing corporation may, absent actual knowledge with regard to a particular shareholder, presume that no less-than-five-percent shareholder of a corporation acquired stock or securities by purchase during the five-year period. In § 1.355-6(f)(5)
A comment urged the adoption of various forms of administrative relief from the recognition of gain in a disqualified distribution. The suggested forms of relief included the issuance of private letter rulings granting tax free treatment in appropriate cases, gain recognition agreements, stock basis waivers, or some combination of the above. Section 355(d) applies at a specific time (at the time of the disqualified distribution) and requires Distributing to recognize gain as if it had sold Controlled at its fair market value at that time. Accordingly, the IRS and Treasury Department do not believe that it would be appropriate to adopt any of these administrative relief provisions. Basis reduction or gain recognition agreements could result in either a complete avoidance or a deferral of gain recognition. Moreover, the IRS and Treasury do not believe that granting exceptions to section 355(d) by private letter ruling is appropriate. However, the final regulations include a new provision stating that the Commissioner may provide by guidance published in the Internal Revenue Bulletin that other distributions are not disqualified distributions because they do not violate the purposes of section 355(d).
It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations and, because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
The principal author of these regulations is Michael N. Kaibni of the Office of the Associate Chief Counsel (Corporate). However, other personnel from the IRS and Treasury Department participated in their development.
Income taxes, Reporting and recordkeeping requirements.
26 U.S.C. 7805 * * *
Section 1.355-6 also issued under 26 U.S.C. 355(d)(9). * * *
To facilitate the use of §§ 1.355-1 through 1.355-6, this section lists the following major paragraphs in those sections:
(a) Conventions.
(1) Examples.
(2) Five-year period.
(3) Distributing securities.
(4) Marketable securities.
(b) General rules and purposes of section 355(d).
(1) Disqualified distributions in general.
(2) Disqualified stock.
(i) In general.
(ii) Purchase.
(iii) Exceptions.
(A) Purchase eliminated.
(B) Deemed purchase eliminated.
(C) Elimination of basis.
(
(
(
(D) Special rule if basis allocated between two corporations.
(3) Certain distributions not disqualified distributions because purposes of section 355(d) not violated.
(i) In general.
(ii) Disqualified person.
(iii) Purchased basis.
(iv) Increase in interest because payment of cash in lieu of fractional shares.
(v) Other exceptions.
(vi) Examples.
(4) Anti-avoidance rule.
(i) In general.
(ii) Example.
(c) Whether a person holds a 50 percent or greater interest.
(1) In general.
(2) Valuation.
(3) Effect of options, warrants, convertible obligations, and other similar interests.
(i) Application.
(ii) General rule.
(iii) Options deemed newly issued and substituted options.
(A) Exchange, adjustment, or alteration of existing option.
(B) Certain compensatory options.
(C) Substituted options.
(iv) Effect of treating an option as exercised.
(A) In general.
(B) Stock purchase agreement or similar arrangement.
(v) Instruments treated as options.
(vi) Instruments generally not treated as options.
(A) Escrow, pledge, or other security agreements.
(B) Compensatory options.
(
(
(C) Certain stock conversion features.
(D) Options exercisable only upon death, disability, mental imcompetency, or separation from service.
(E) Rights of first refusal.
(F) Other enumerated instruments.
(vii) Reasonably certain that the option will be exercised.
(A) In general.
(B) Stock purchase agreement or similar arrangement.
(viii) Examples.
(4) Plan or arrangement.
(i) In general.
(ii) Understanding.
(iii) Examples.
(iv) Exception.
(A) Subsequent disposition.
(B) Example.
(d) Purchase.
(1) In general.
(i) Definition of purchase under section 355(d)(5)(A).
(ii) Section 355 distributions.
(iii) Example.
(2) Exceptions to definition of purchase under section 355(d)(5)(A).
(i) Acquisition of stock in a transaction which includes other property or money.
(A) Transferors and shareholders of transferor or distributing corporations.
(
(
(B) Transferee corporations.
(
(
(C) Examples.
(ii) Acquisition of stock in a distribution to which section 305(a) applies.
(iii) Section 1036(a) exchange.
(iv) Section 338 elections.
(A) In general.
(B) Example.
(v) Partnership distributions.
(A) Section 732(b).
(B) Section 734(b).
(3) Certain section 351 exchanges treated as purchases.
(i) In general.
(A) Treatment of stock received by transferor.
(B) Multiple classes of stock.
(ii) Cash item, marketable stock.
(iii) Exception for certain acquisitions.
(A) In general.
(B) Example.
(iv) Exception for assets transferred as part of an active trade or business.
(A) In general.
(B) Active conduct of a trade or business.
(C) Reasonable needs of the trade or business.
(D) Consideration of all facts and circumstances.
(E) Successive transfers.
(v) Exception for transfer between members of the same affiliated group.
(A) In general.
(B) Examples.
(4) Triangular asset reorganizations.
(i) Definition.
(ii) Treatment.
(iii) Example.
(5) Reverse triangular reorganizations other than triangular asset reorganizations.
(i) In general.
(ii) Letter ruling and closing agreement.
(iii) Example.
(6) Treatment of group structure changes.
(i) In general.
(ii) Adjustments to basis of higher-tier members.
(iii) Example.
(7) Special rules for triangular asset reorganizations, other reverse triangular reorganizations, and group structure changes.
(e) Deemed purchase and timing rules.
(1) Attribution and aggregation.
(i) In general.
(ii) Purchase of additional interest.
(iii) Purchase between persons treated as one person.
(iv) Purchase by a person already treated as holding stock under section 355(d)(8)(A).
(v) Examples.
(2) Transferred basis rule.
(3) Exchanged basis rule.
(i) In general.
(ii) Example.
(4) Certain section 355 or section 305 distributions.
(i) Section 355.
(ii) Section 305.
(5) Substantial diminution of risk.
(i) In general.
(ii) Property to which suspension applies.
(iii) Risk of loss substantially diminished.
(iv) Special class of stock.
(f) Duty to determine stockholders.
(1) In general.
(2) Deemed knowledge of contents of securities filings.
(3) Presumptions as to securities filings.
(4) Presumption as to less-than-five-percent shareholders.
(5) Examples.
(g) Effective date.
(a)
(2)
(3)
(4)
(b)
(i) Any person holds disqualified stock in the distributing corporation that constitutes a 50 percent or greater interest in such corporation; or
(ii) Any person holds disqualified stock in the controlled corporation (or, if stock of more than one controlled corporation is distributed, in any controlled corporation) that constitutes a 50 percent or greater interest in such corporation.
(2)
(A) Any stock in the distributing corporation acquired by purchase during the five-year period; and
(B) Any stock in any controlled corporation—
(
(
(ii)
(iii)
(B)
(C)
(
(
(D)
(3)
(A) To increase ownership (combined direct and indirect) in the distributing corporation or any controlled corporation by a disqualified person; nor
(B) To provide a disqualified person with a purchased basis in the stock of any controlled corporation.
(ii)
(A) The person—
(
(
(B) Constitutes a 50 percent or greater interest in such corporation (under section 355(d)(4) and paragraph (c) of this section).
(iii)
(iv)
(v)
(vi)
D owns all of the stock of D1, and D1 owns all the stock of C. A purchases 60 percent of the D stock for cash. Within five years of A's purchase, D1 distributes the C stock to D. A is treated as having purchased 60 percent of the stock of both D1 and C on the date A purchases 60 percent of the D stock under the attribution rules of section 355(d)(8) and paragraph (e)(1) of this section. The C stock received by D is attributable to a distribution on purchased D1 stock under section 355(d)(3)(B)(ii). Accordingly, the D1 and C stock each is
The facts are the same as
The facts are the same as
D1 owns all the stock of C. D purchases all of the stock of D1 for cash. Within five years of D's purchase of D1, P acquires all of the stock of D1 from D in a section 368(a)(1)(B) reorganization that is not a reorganization under section 368(a)(1)(A) by reason of section 368(a)(2)(E), and D1 distributes all of its C stock to P. P is treated as having acquired the D1 stock by purchase on the date D acquired it under the transferred basis rule of section 355(d)(5)(C) and paragraph (e)(2) of this section. P is treated as having purchased all of the C stock on the date D purchased the D1 stock under the attribution rules of section 355(d)(8) and paragraph (e)(1) of this section, and the C stock received by P is attributable to a distribution on purchased D1 stock under section 355(d)(3)(B)(ii). Accordingly, the D1 and C stock each is disqualified stock under section 355(d)(3) and paragraph (b)(2) of this section, and P is a disqualified person under paragraph (b)(3)(ii) of this section. The purposes of section 355(d) under paragraph (b)(3)(i) of this section are violated. P did not increase direct or indirect ownership in D1 or C. However, P's basis in the C stock is a purchased basis under paragraph (b)(3)(iii) of this section because the D1 stock is not treated as acquired by purchase solely under the attribution rules of section 355(d)(8) and paragraph (e)(1) of this section. Accordingly, D1's distribution of the C stock to P is a disqualified distribution under section 355(d)(2) and paragraph (b)(1) of this section.
P owns 50 percent of the stock of D, the remaining D stock is owned by unrelated persons, D owns all the stock of C, and A purchases all of the P stock from the P shareholders. Within five years of A's purchase, D distributes all of the C stock to P in exchange for P's D stock. A is treated as having purchased 50 percent of the stock of both D and C on the date A purchases the P stock under the attribution rules of section 355(d)(8) and paragraph (e)(1) of this section. The C stock received by P is attributable to a distribution on purchased D stock under section 355(d)(3)(B)(ii). Accordingly, the D stock and the C stock each is disqualified stock under section 355(d)(3) and paragraph (b)(2) of this section, and A is a disqualified person under paragraph (b)(3)(ii) of this section. The purposes of section 355(d) under paragraph (b)(3)(i) of this section are violated because, even though P's basis in the C stock is not a purchased basis under paragraph (b)(3)(iii) of this section, A increased its direct or indirect ownership in C from a 50 percent indirect interest to a 100 percent indirect interest. Accordingly, D's distribution of the C stock to P is a disqualified distribution under section 355(d)(2) and paragraph (b)(1) of this section.
A purchases all of the stock of T. T later merges into D in a section 368(a)(1)(A) reorganization and A exchanges its purchased T stock for 60 percent of the stock of D. D owns all of the stock of D1 and D2, D1 and D2 each owns 50 percent of the stock of D3, and D3 owns all of the stock of C. Within five years of A's purchase of the T stock, D3 distributes the C stock to D1 in exchange for all of D1's D3 stock. A is treated as having acquired 60 percent of the D stock by purchase on the date A purchases the T stock under paragraph (e)(3) of this section. A is treated as having purchased 60 percent of the stock of D1, D2, D3, and C on the date A purchases the T stock under the attribution rules of section 355(d)(8) and paragraph (e)(1) of this section. The C stock received by D1 is attributable to a distribution on purchased D3 stock under section 355(d)(3)(B)(ii). Accordingly, the D3 stock and the C stock each is disqualified stock under section 355(d)(3) and paragraph (b)(2) of this section, and A is a disqualified person under paragraph (b)(3)(ii) of this section. However, the purposes of section 355(d) under paragraph (b)(3)(i) of this section are not violated. A did not increase direct or indirect ownership in D3 or C, and D1's basis in the C stock is not a purchased basis under paragraph (b)(3)(iii) of this section because the D3 stock is treated as acquired by purchase solely under the attribution rules of section 355(d)(8) and paragraph (e)(1) of this section. Accordingly, D3's distribution of the C stock to D1 is not a disqualified distribution under section 355(d)(2) and paragraph (b)(1) of this section.
P owns 30 percent of the stock of D, D owns all of the stock of D1, and D1 owns all of the stock of C. P purchases the remaining 70 percent of the D stock for cash. Within five years of P's purchase, P liquidates D in a transaction qualifying under sections 332 and 337(a), and D1 then distributes the stock of C to P. Prior to the liquidation, P is treated as having purchased 70 percent of the stock of D1 and C on the date P purchases the D stock under the attribution rules of section 355(d)(8)(B) and paragraph (e)(1) of this section. After the liquidation, however, under paragraph (b)(2)(iii) of this section, P is not treated as having acquired by purchase the D1 or the C stock under section 355(d)(8)(B) and paragraph (e)(1) of this section because P's basis in the D stock is eliminated in the liquidation of D. Under section 334(b)(1), P's basis in the D1 stock is determined by reference to D's basis in the D1 stock and not by reference to P's basis in D. Paragraph (d)(2)(i)(B) of this section does not treat the D1 stock as newly purchased in P's hands because no gain or loss was recognized by D in the liquidation. Accordingly, neither the D1 stock nor the C stock is disqualified stock under section 355(d)(3) and paragraph (b)(2) of this section in P's hands, and the distribution is not a disqualified distribution under section 355(d)(2) and paragraph (b)(1) of this section.
D owns all of the stock of D1, and D1 owns all of the stock of C. P purchases 60 percent of the D stock for cash. Within five years of P's purchase, D merges into P in a section 368(a)(1)(A) reorganization, with the D shareholders other than P receiving solely P stock in exchange for their D stock, and D1 then distributes the stock of C to P. Prior to the merger, P is treated as having purchased 60 percent of the stock of D1 and C on the date P purchases the D stock under the attribution rules of section 355(d)(8) and paragraph (e)(1) of this section. After the
A purchases all the stock of C for cash on Date 1. D acquires all of the stock of C from A in a section 368(a)(1)(B) reorganization that is not a reorganization under section 368(a)(1)(A) by reason of section 368(A)(1)(E). A receives ten percent of the D stock in the transaction. The remaining D stock is owned by B. Within five years of A's purchase of the C stock, D distributes all the stock of C pro rata to A and B. Under the transferred basis rule of paragraph (e)(2) of this section, D is treated as having purchased all of the C stock on the date A acquired it. Under the exchanged basis rule of paragraph (e)(3) of this section, A is treated as having purchased its D stock on Date 1 and A is treated as having purchased ten percent of the C stock on Date 1 under the attribution rules of section 355(d)(8) and paragraph (e)(3) of this section. Moreover, under paragraph (b)(2)(iii)(C) of this section, A's basis in the C stock resulting from A's Date 1 purchase of C stock is eliminated. After the distribution, A's and B's bases in their C stock are determined by reference to the bases of their D stock under § 1.358-2(a)(2) (and not by reference to D's basis in the C stock). D's basis in the stock of C resulting from its deemed purchase of that stock under paragraph (e)(2) of this section is eliminated by the distribution of the C stock because it would no longer be taken into account by any person in determining gain or loss on the sale of C stock. Therefore, the C stock distributed to A and B is not disqualified stock as a result of D's purchase of C. However, A's basis in its D stock resulting from its deemed purchase of that stock under paragraph (e)(3) of this section is not eliminated. Therefore, A's ten percent interest in the stock of D is disqualified stock. Furthermore, A's ten percent interest in the stock of C is disqualified stock because the distribution of the C stock is attributable to A's D stock that was acquired by purchase. However, there has not been a disqualified distribution because no person, immediately after the distribution, holds disqualified stock in either D or C that constitutes a 50 percent or greater interest in such corporation.
—(i) P owns all the stock of D. D purchases all the stock of D1 for cash on Date 1. D1 owns all the stock of C (which owns all the stock of C1) and S. Within five years of Date 1, D1 distributes all the stock of C to D. The D1 and C stock each is disqualified stock under section 355(d)(3) and paragraph (b)(2) of this section, and D is a disqualified person under paragraph (b)(3)(ii) of this section. The purposes of section 355(d) under paragraph (b)(3)(i) of this section are violated. D did not increase direct or indirect ownership in D1 or C. However, D's basis in the C stock is a purchased basis under paragraph (b)(3)(iii) of this section because the D1 stock is not treated as acquired by purchase solely under the attribution rules of section 355(d)(8) and paragraph (e)(1) of this section. Accordingly, the distribution is a disqualified distribution under section 355(d) and paragraph (b)(1) of this section. D's basis in the D1 stock is allocated pursuant to § 1.358-2 between the D1 stock and the C stock. Therefore, under paragraph (e)(4) of this section, the C stock is deemed to be acquired by purchase on Date 1, the date D purchased all the stock of D1. If thereafter, and within five years of Date 1, C were to distribute all the stock of C1 to D, that distribution would also be a disqualified distribution because of D's deemed purchase of the stock of C.
(ii) Following the distribution of the stock of C by D1, and within five years of Date 1, D distributes all the stock of D1 to P. Under paragraph (b)(2)(iii)(D) of this section, the determination of whether D's basis in D1 has been eliminated shall be made without regard to D's allocated basis in C. After the distribution, P's basis in the D1 stock is determined by reference to its basis in its D stock under § 1.358-2(a)(2) (and not by reference to D's basis in the D1 stock). D's basis in the D1 stock resulting from the purchase of that stock is eliminated by the distribution of the D1 stock because it would no longer be taken into account by any person in determining gain or loss on the sale of D1 stock. Therefore, the D1 stock distributed to P is not disqualified stock as a result of D's purchase of D1. Moreover, a subsequent distribution of the S stock by D1 to P would not be a disqualified distribution because both the D1 and S stock would cease to be treated as purchased when D's basis in D1 has been eliminated.
(4)
(ii)
B wholly owns D, which wholly owns C. With a principal purpose to avoid the purposes of section 355(d), A, B, D, and C engage in the following transactions. A purchases 45 of 100 shares of the only class of D stock. Within five years after A's purchase, D distributes all of its 100 shares in C to A and B pro rata. D then redeems 20 shares of B's D stock, and C redeems 20 shares of B's C stock. After the redemption, A owns 45 shares and B owns 35 shares in each of D and C. Under paragraph (b)(4)(i) of this section, the Commissioner may treat A as owning disqualified stock in D and C that constitutes a 50 percent or greater interest in D and C immediately after the distribution. Under that treatment, the distribution is a disqualified distribution under section 355(d)(2) and paragraph (b)(1) of this section.
(c)
(2)
(3)
(ii)
(A) Its exercise (whether by itself or in conjunction with the deemed exercise of one or more other options) would cause a person to become a disqualified person; and
(B) Immediately after the distribution, it is reasonably certain (as described in paragraph (c)(3)(vii) of this section) that the option will be exercised.
(iii)
(
(
(
(
(
(B)
(C)
(iv)
(B)
(v)
(vi)
(A)
(B)
(
(
(
(C)
(
(
(D)
(E)
(F)
(vii)
(B)
(viii)
D owns all of the stock of C. A purchases 40 percent of D's only class of stock and an option to purchase D stock from D, that if deemed exercised, would result in A owning a total of 60 percent of the stock of D. Assume that no control premium or minority or blockage discount applies to the D stock underlying the option. The option permits A to acquire the D stock at $30 per share, and D's stock has a fair market value of $27 per share on the date the option is issued. The option is subject to no contingencies or restrictive covenants, may be exercised within five years after its issuance, and is not described in paragraph (c)(3)(vi) of this section (regarding instruments generally not treated as options). Within five years of A's purchase of the D stock and option, D distributes the stock of its subsidiary C pro rata and A receives 40 percent of the C stock in the distribution. Immediately after the distribution, D's stock
D owns all of the stock of C. A purchases 37 percent of D's only class of stock. B owns 38 percent of the D stock, and the remaining 25 percent is owned by 20 individuals, each of whom owns less than five percent of D's stock. A purchases an option to purchase an additional 14 percent of the D stock from shareholders other than B for $50 per share. The option is subject to no contingencies or restrictive covenants, may be exercised within five years after its issuance, and is not described in paragraph (c)(3)(vi) of this section. Within five years of A's purchase of the option and 37 percent interest in D, D distributes the stock of its subsidiary C pro rata and A receives 37 percent of the C stock in the distribution. At the time of the distribution, A exchanges its option for an option to purchase 14 percent of the D stock at $25 per share and an option to purchase 14 percent of the C stock at $25 per share. Assume that, although a shareholder that owned no D or C stock would pay only $20 per share for D or C stock immediately after the distribution, a shareholder in A's position would pay $30 per share for 14 percent of the stock of D or C because of the control premium which attaches to the shares. The control premium is taken into account under paragraph (c)(3)(vii)(A) of this section to determine whether A is reasonably certain to exercise the options. The exchange of the options in D for options in D and C did not materially increase the likelihood that the options would be exercised. Nonetheless, based on all the facts and circumstances, it is reasonably certain, immediately after the distribution, that A will exercise its options. Under paragraph (c)(3)(iii)(C) of this section, the substituted options are treated as issued on the date the original option was issued. Accordingly, the options are treated as exercised by A on the date that A purchased the original option. Under paragraph (c)(2) of this section, all shares of D and C are considered to have the same value to determine the amount of stock A is treated as purchasing under the options. A is treated as owning 51 percent of the D stock and 51 percent of the C stock that is disqualified stock, and the distribution is a disqualified distribution under section 355(d)(2).
(4)
(ii)
(iii)
D has 1,000 shares of common stock outstanding. A group of 20 unrelated individuals who previously owned no D stock (the Group) agree among themselves to acquire 50 percent or more of D's stock. The Group is not a person under section 7701(a)(1). Subsequently, pursuant to their understanding, the members of the Group purchase 600 shares of D common stock from the existing D shareholders (a total of 60 percent of the D stock), with each member purchasing 30 shares. Under paragraph (c)(4)(ii) of this section, the members of the Group have a formal or informal understanding among themselves to make a coordinated acquisition of stock. Their interests are therefore aggregated under section 355(d)(7)(B), and they are treated as one person that purchased 600 shares of D's stock for purposes of section 355(d).
D has 1,000 shares of outstanding stock owned by unrelated individuals. D's management is concerned that D may become subject to a takeover bid. In separate meetings, D's management meets with potential investors who own no stock and are friendly to management to convince them to acquire D's stock based on an understanding that D will assemble a group that in the aggregate will acquire more than 50 percent of D's stock. Subsequently, 15 of these investors each purchases four percent of D's outstanding stock. Under paragraph (c)(4)(ii) of this section, the 15 investors have a formal or informal understanding among themselves to make a coordinated acquisition of stock. Their interests are therefore aggregated under section 355(d)(7)(B), and they are treated as one person that purchased 600 shares of D stock for purposes of section 355(d).
(i) D has 1,000 shares of outstanding stock owned by unrelated individuals. An investment advisor advises its clients that it believes D's stock is undervalued and recommends that they acquire D stock. Acting on the investment advisor's recommendation, 20 unrelated individuals each purchases 30 shares of the outstanding D stock. Each client's decision was not based on the investment decisions made by one or more other clients. Because there is no formal or informal understanding among the clients to make a coordinated acquisition of D stock, their interests are not aggregated under section 355(d)(7)(B) and they are treated as making separate purchases.
(ii) The facts are the same as in paragraph (i) of this
(iii) The facts are the same as in paragraph (i) of this
(iv)
(B)
In an initial public offering of D stock on Date 1, 100 investors independently purchase one percent each of the D stock. Two years later, D merges into P (in a reorganization described in section 368(a)(1)(A)) and, pursuant to the plan of reorganization, the D shareholders exchange their D stock for 50 percent of the stock of
(d)
(A) The basis of the property acquired in the hands of the acquirer is not determined—
(
(
(B) The property is not acquired in an exchange to which section 351, 354, 355, or 356 applies.
(ii)
(iii)
A, who owns all of the stock of P and T, sells the T stock to P for cash. The T stock is not marketable stock under section 355(d)(5)(B)(ii) and paragraph (d)(3)(ii) of this section. A is treated under section 304(a)(1) as receiving a distribution in redemption of the P stock. Under section 302(d), the deemed redemption is treated as a section 301 distribution. Assume that under sections 304(b)(2) and 301(c)(1), all of the distribution is a dividend. A and P are treated in the same manner as if A had transferred the T stock to P in exchange for stock of P in a transaction to which section 351(a) applies, and P had then redeemed the stock P was treated as issuing in the transaction. Under section 362(a), P's basis in the T stock is determined by reference to A's adjusted basis in the T stock, and there is no basis increase in the T stock because A recognizes no gain on the deemed transfer. Accordingly, P's acquisition of the T stock from A is not a purchase by P under section 355(d)(5)(A)(i)(I) and paragraphs (d)(1)(i)(A)(
(2)
(i)
(
(B)
(
(
(
(C)
(i) A owns all the stock of T. T merges into D in a transaction qualifying under section 368(a)(1)(A), with A exchanging all of the T stock for D stock and $100 cash. Under section 356(a)(1), A recognizes $100 of the realized gain on the transaction. Under section 358(a)(1), A's basis in the D stock equals A's basis in the T stock, decreased by the $100 received and increased by the gain recognized, also $100. Under paragraph (d)(2)(i)(A) of this section, A is not treated as having purchased the D stock for purposes of section 355(d)(5).
(ii) The facts are the same as in paragraph (i) of this
(ii)
(iii)
(iv)
(B)
(v)
(B)
(3)
(B)
(ii)
(iii)
(B)
D's two classes of stock, voting common and nonvoting preferred, are both widely held and publicly traded. The nonvoting preferred stock is stock described in section 1504(a)(4). Assume that all of the D stock is marketable stock under section 355(d)(5)(B)(ii) and paragraph (d)(3)(ii) of this section. D's board of directors proposes that, for valid business purposes, D's common stock should be held by a holding company, HC, but its preferred stock should not be transferred to HC. As proposed, the D common shareholders exchange their D stock solely for HC common stock in a section 351(a) transaction. The D preferred shareholders retain their stock. HC acquires an amount of D stock that meets the requirements of section 1504(a)(2). Although the D common stock was marketable stock in the hands of the D shareholders immediately before the transfer, and the D nonvoting preferred stock is marketable stock after the transfer, the D shareholders are not treated as having acquired the HC stock by purchase (except to the extent the exchanged basis rule of paragraph (e)(3) of this section may apply to treat HC stock as purchased on the date the exchanged D stock was purchased).
(iv)
(
(
(
(
(B)
(
(
(C)
(D)
(E)
(v)
(
(
(
(B)
Publicly traded P has wholly owned S since 1990. S is engaged in the telecommunications business and the business of computer software development. S is developing new software for use in the managed health care industry. Over a period of four years beginning on January 31, 2000, P contributes a substantial amount of cash to S solely for the purpose of funding the software development. On completion of the software in January of 2004, 60 percent of the value of the S stock is attributable to the cash contributions made within the last four years. The P group's primary lender requires that S separately incorporate the software and related assets and distribute the new subsidiary to P as a condition of providing required funding to market the software. Accordingly, on February 1, 2004, S forms N, contributes the software and related assets to N, and distributes all of the N stock to P in a transaction intended to qualify under section 355(a). P, S, and N will not leave the affiliated group in any transaction related to the cash contributions. Under paragraph (d)(3)(v)(A) of this section, P's cash contributions to S are not treated as purchases of additional S stock, and the distribution of N from S to P is not a disqualified distribution under section 355(d)(2) and paragraph (b)(1) of this section.
On Date 1, P contributes cash to its subsidiary S with a principal purpose to increase its stock basis in S. Sixty percent of the value of P's S stock is attributable to the cash contribution. Under paragraph (b)(4) of this section (anti-avoidance rule), 60 percent of the S stock is treated as purchased under section 355(d)(5)(B), notwithstanding paragraph (d)(3)(v)(A) of this section. Accordingly, any distribution of a subsidiary of S to P within the five-year period after Date 1 will be a disqualified distribution, regardless of whether P, S, and any distributed S subsidiary remain affiliated after the distribution and any transactions related to the cash contribution.
(4)
(A) Section 368(a)(1)(A) or (G) by reason of section 368(a)(2)(D);
(B) Section 368(a)(1)(A) by reason of section 368(a)(2)(E) (regardless of whether section 368(a)(3)(E) applies), unless the transaction also qualifies as either a section 351 transfer or a reorganization under section 368(a)(1)(B); or
(C) Section 368(a)(1)(C), and stock of the controlling corporation rather than the acquiring corporation is exchanged for the acquired corporation's properties.
(ii)
(A) Acquired the assets of the acquired corporation (and as having assumed any liabilities assumed by the controlling corporation's subsidiary corporation or to which the acquired corporation's assets were subject (the acquired liabilities)) in a transaction in which the controlling corporation's basis in the acquired corporation's assets was determined under section 362(b); and
(B) Transferred the acquired assets and acquired liabilities to its subsidiary corporation in a section 351 transfer.
(iii)
Forward triangular reorganization. P forms S with $25 of cash and T merges into S in a reorganization qualifying under section 368(a)(1)(A) by reason of section 368(a)(2)(D) in which the T shareholders receive $70 of P stock and $15 of cash in exchange for their T stock. T is not a common parent of a consolidated group of corporations. The remaining $10 of cash with which P formed S will not be used in the acquired business. T's assets consist only of assets part of and used in its business with a value of $80, and $5 of cash that is not part of or used in T's business. T has no liabilities. S will use T's business assets in T's business (which will become S's business), but will invest the $5 of cash in an unrelated passive investment. Under paragraph (d)(4)(ii) of this section, P is treated as acquiring the T assets in a transaction in which P's basis in the T assets was determined under section 362(b) and contributing them to S in a section 351 transfer. Under paragraph (d)(3)(v) of this section, $10 (of the total $25) of cash contributed by P to S upon S's formation is not treated as a purchase of S stock. The $15 (of the total $25) of cash contributed by P to S upon S's formation that is paid to T's shareholders is not treated as a purchase of S stock. The exception in paragraph (d)(3)(v) of this section does not apply to the $5 of cash from T's business because P is treated as having acquired T's assets in a related transaction in which section 362(b) applies to determine P's basis in such assets. Accordingly, P is treated under section 355(d)(5)(B) and paragraph (d)(3)(iv) of this section as having purchased $5 of the S stock, but is not deemed to have purchased the remaining $80 of the S stock.
(5)
(A) The amount of surviving corporation stock that would be treated as purchased (on the date of the deemed section 351 transfer) by the controlling corporation if the controlling corporation acquired the surviving corporation's assets and assumed its liabilities in a transaction in which the controlling corporation's basis in the surviving corporation assets was determined under section 362(b), and then transferred the acquired assets and liabilities to the surviving corporation in a section 351 transfer (see §§ 1.358-6(c)(1) and (2)(ii)(A), and 1.1502-30(b)); or
(B) The amount of surviving corporation stock that would be treated
(ii)
(iii)
(i) A purchases 60 percent of the stock of D on Date 1. D owns no cash items, marketable stock, or transferor debt, but holds cash that is not part of or used in D's trade or business under paragraph (d)(3)(iv) of this section and that represents 20 percent of D's value. On Date 2, P forms S, and S merges into D in a reorganization qualifying under section 368(a)(1)(B) and under section 368(a)(1)(A) by reason of section 368(a)(2)(E). In the reorganization, P acquires all of the D stock in exchange solely for P stock. After Date 2, and within five years after Date 1, D distributes its wholly owned subsidiary C to P. P does not obtain a letter ruling and enter into a closing agreement under paragraph (d)(5)(ii) of this section. P would acquire 20 percent of the D stock by purchase on Date 2 under paragraph (d)(5)(i)(A) of this section by operation of section 355(d)(5)(B) and paragraph (d)(3)(iv) of this section. The exception in paragraph (d)(3)(v) of this section does not apply because D was not affiliated with P before the transaction in which the section 351 transfer is deemed to occur and D's assets are treated as acquired by P in a related transaction in which section 362(b) applies to determine P's basis in the D assets. P would acquire 60 percent of the D stock by purchase on Date 1 under paragraph (d)(5)(i)(B) of this section because, under the transferred basis rule of section 355(d)(5)(C) and paragraph (e)(2) of this section, P is treated as though P purchased the D stock on the date A purchased it. Accordingly, under paragraph (d)(5)(i) of this section, P is treated as acquiring the higher amount (60 percent) by purchase on Date 1. D's distribution of C to P is a disqualified distribution under section 355(d)(2) and paragraph (b)(1) of this section. In addition, A is treated as acquiring the P stock by purchase on Date 1 under paragraph (e)(3) of this section because A's basis in the P stock is determined by reference to A's basis in the D stock.
(ii) The facts are the same as in paragraph (i) of this
(6)
(ii)
(iii)
P is the common parent of a consolidated group, and T is the common parent of another group. P has owned S for more than five years, and the fair market value of the S stock is $50. T's assets consist only of non-marketable stock of direct and indirect wholly owned subsidiaries with a value of $50, assets used in its business with a value of $50, and $50 of marketable stock that is not part of or used in T's business. T has no liabilities. T merges into S with the T shareholders receiving solely P stock with a value of $150 in exchange for their T stock in a section 368(a)(2)(D) reorganization. S will use T's business assets in T's business (which will become S's business), but will hold the $50 of marketable stock for investment purposes. Assume that the transaction is a reverse acquisition under § 1.1502-75(d)(3) because the T shareholders, as a result of owning T stock, own more than 50 percent of the value of P's stock immediately after the transaction. Thus, the transaction is a group structure change under § 1.1502-33(f)(1). Under paragraph (d)(6) of this section, P is treated as having acquired the assets of T in a transaction in which P's basis in the T assets was determined under section 362(b), and then transferred the acquired assets to S in a section 351 transfer, with P and T being treated as not in the same affiliated group at the time of the transfer solely for purposes of paragraph (d)(3)(v) of this section. The exception in paragraph (d)(3)(v) of this section (transfers within an affiliated group) does not apply. Accordingly, P is treated under section 355(d)(5)(B) and paragraph (d)(3)(iv) of this section as having purchased $50 of the S stock (attributable to the marketable stock), but is not deemed to have purchased the remaining $150 of the S stock.
(7)
(i) Section 1.358-6(c)(2)(i)(B) and (C) (reduction of basis adjustment in reverse triangular reorganization where controlling corporation acquires less than all of the surviving corporation stock), § 1.1502-30(b) (applying § 1.358-6(c)(2)(i)(B) and (C) to a consolidated group), and § 1.1502-31(d)(2)(ii) (reduction of basis adjustment in group structure change where new common parent acquires less than all of the former common parent stock); or
(ii) Section 1.358-6(d) (reduction of basis adjustment in any triangular reorganization to the extent controlling corporation does not provide consideration), § 1.1502-30(b) (applying § 1.358-6(d) (except § 1.358-6(d)(2)) to a consolidated group), and § 1.1502-31(d)(1) (reduction of basis adjustment in group structure change to the extent
(e)
(ii)
(iii)
(iv)
(v)
On Date 1, A purchases 10 percent of the stock of P, which has held 100 percent of the stock of T for more than five years at the time of A's purchase. A is deemed to have purchased 10 percent of P's T stock on Date 1. If A later purchases an additional 41 percent of the stock of P on Date 2, A is deemed to have purchased an additional 41 percent of P's T stock on Date 2. Because A and P are now related persons under section 267(b), they are treated as one person under section 355(d)(7)(A), and A is treated as owning all of P's T stock. A is treated as acquiring 51 percent of the T stock by purchase at the times of A's respective purchases of P stock on Date 1 and Date 2. The remaining 49 percent of T stock is treated as acquired when P acquired the T stock, more than five years before Date 1. If P distributes T after Date 2 and within five years after Date 1, the distribution will be a disqualified distribution under section 355(d)(2) and paragraph (b)(1) of this section.
A has owned 60 percent of the stock of P for more than five years, and P has owned 40 percent of the stock of T for more than five years. A and P are treated as one person, and A is treated as owning 40 percent of the stock of T for more than five years. If P later purchases an additional 20 percent of the stock of T on Date 1, A is treated as acquiring by purchase the additional 20 percent of T stock on Date 1. If A then purchases an additional 10 percent of the stock of P on Date 2, under paragraph (e)(1)(i) of this section, A is deemed to have purchased on Date 2 an additional four percent of the T stock (10 percent of the 40 percent that P originally owned). In addition, even though A and P were already treated as one person under section 355(d)(7)(A), A also is deemed to have purchased two percent of the T stock on Date 2 (10 percent of the 20 percent of the T stock that it was treated as purchasing on Date 1). A is still treated as owning all 60 percent of the T stock owned by P. However, of the 60 percent, A is treated as having purchased 18 percent of the T stock on Date 1 and 6 percent of the T stock on Date 2, for a total of 24 percent purchased stock.
A purchases a 20 percent interest in partnership M on Date 1. M has owned 30 percent of the stock and 25 percent of the securities of P for more than five years. P has owned 40 percent of the stock and 100 percent of the securities of T for more than five years. Under section 318(a)(2)(C) as modified by section 355(d)(8)(A), M is deemed to own 12 percent of the stock (30 percent of the 40 percent P owns) and 30 percent of the securities (30 percent of the 100 percent P owns) of T. Under sections 318(a)(2)(A) and 355(d)(8)(B), A is deemed to have purchased 2.4 percent of the stock (20 percent of the 12 percent M is deemed to own) and 6 percent of the securities (20 percent of the 30 percent M is deemed to own) of T on Date 1. Similarly, A is deemed to have purchased 6 percent of the stock (20 percent of the 30 percent M owns) and five percent of the securities (20 percent of the 25 percent M owns) of P on Date 1. If M later purchases an additional 10 percent of P stock on Date 2, M is deemed to have purchased four percent of the stock (10 percent of the 40 percent P owns) and 10 percent of the securities (10 percent of the 100 percent P owns) of T on Date 2. A is deemed to have purchased two percent of the stock of P on Date 2 (20 percent of the 10 percent M purchased). A is also deemed to have purchased 0.8 percent of the stock (20 percent of the four percent M is deemed to have purchased) and two percent of the securities (20 percent of the 10 percent M is deemed to have purchased) of T on Date 2.
A and B are brother and sister. For more than five years, A has owned 75 percent of the stock of P, and B has owned 25 percent of the stock of P. A and B are treated as one person under section 267(b), and the stock of each is treated as purchased on the date it was purchased by A and B, respectively. If B later purchases 50 percent of the P stock from A on Date 1, A and B are still treated as one person. However, under paragraph (e)(3)(iii) of this section, the 50 percent of P stock that B purchased from A is treated as purchased on Date 1.
(2)
(3)
(ii)
purchases 50 percent of the stock of T on Date 1. On Date 2, T merges into D in a section 368(a)(1)(A) reorganization, with A exchanging all of the T stock solely for stock of D. Under section 358(a), A's basis in the D stock is determined by reference to the basis of the T stock it purchased. Accordingly, A is treated as having purchased the D stock on Date 1, and has a purchased basis in the D stock under paragraph (b)(3)(iii) of this section.
(4)
(ii)
(5)
(ii)
(iii)
(iv)
(f)
(2)
(3)
(4)
(i) Is related under section 355(d)(7)(A) to a shareholder in the corporation that is, at any time during the five-year period, not a less-than-five-percent shareholder;
(ii) Acted pursuant to a plan or arrangement, with respect to acquisitions of the corporation's stock or securities under section 355(d)(7)(B) and paragraph (c)(4) of this section, with a shareholder in the corporation that is, at any time during the five-year period, not a less-than-five-percent shareholder; or
(iii) Holds stock or securities that is attributed under section 355(d)(8)(A) to a shareholder in the corporation that is, at any time during the five-year period, not a less-than-five-percent shareholder.
(5)
(g)
Internal Revenue Service (IRS), Treasury.
Final regulations.
This document contains final regulations relating to the application of the effective date rules of the generation-skipping transfer (GST) tax imposed under chapter 13 of the Internal Revenue Code (Code). These regulations provide guidance with respect to the type of trust modifications that will not affect the exempt status of a trust. In addition, these regulations clarify the application of the effective date rules in the case of property transferred pursuant to the exercise of a general power of appointment. These regulations are necessary to provide guidance to taxpayers so that they may properly determine if chapter 13 of the Code is applicable to a particular trust.
These regulations are effective December 20, 2000.
On November 18, 1999, the Treasury Department and the IRS published in the
In general, under the effective date rules accompanying the GST statutory provisions, a trust that was irrevocable on September 25, 1985, is not subject to the GST tax provisions, unless a GST transfer is made out of corpus added to the trust after that date. Section 1433(b)(2)(A) of the Tax Reform Act of 1986 (TRA), Public Law 99-514 (100 Stat. 2085, 2731), 1986-3 (Vol. 1) C.B. 1, 634. Such trusts are hereinafter referred to as exempt trusts for GST tax purposes. The proposed regulations provide a number of safe harbors with respect to changes that can be made to the terms of an exempt trust that will not result in the loss of exempt status.
Commentators argued that the approach set forth in the proposed regulations is inconsistent with the statutory effective date provisions. They contend that, under the TRA, with the exception of additions to principal, modifications or other actions with respect to a trust should not affect the trust's exempt status. Rather, any change should have GST tax consequences only if the change subjects the trust principal to a current gift tax. In that case, the individual making the gift will be treated, to the extent of the gift, as the transferor of the trust for GST tax purposes and the trust, to the extent of the gift, will be subject to the GST tax regime.
This approach was not adopted. The statutory effective date provision protects generation-skipping trusts that were irrevocable before the GST tax was enacted and presumably could not be changed to avoid the imposition of the tax. The Treasury Department and the IRS believe that the approach adopted in the regulations is consistent with Congressional intent to protect these trusts and that most of the modifications that will not affect the exempt status of a trust will be covered by the safe harbors in the final regulations.
Under the proposed regulations, where there is a distribution of trust principal from an exempt trust to a new trust, the new trust will be an exempt trust if the terms of the governing instrument of the old trust authorize the trustee to make distributions to the new trust without the consent or approval of any beneficiary or court and the terms of the new trust do not extend the time for vesting of any beneficial interest in the trust beyond the applicable perpetuities period.
In response to comments, the final regulations clarify that the retention of property in a continuing trust, as well as the distribution of property to a new trust, will not cause loss of exempt status, assuming the requirements of the regulations are satisfied.
In response to comments, the final regulations provide that distribution to a new trust or retention in a continuing trust will not cause the loss of exempt status, even if the governing instrument does not specifically authorize the action, if state law, at the time the exempt trust became irrevocable, permitted such distribution or retention in a continuing trust.
One comment suggested that the final regulations provide that a discretionary distribution that otherwise satisfies the regulatory requirements should not cause the trust to lose exempt status if the trustee, although not required to do so, seeks approval of a court or the trust beneficiaries before taking action. This change was deemed unnecessary. An action that satisfies the requirements of the regulations will not cause loss of exempt status even if, for whatever reason, the trustee seeks a court's or a beneficiary's approval of such action.
Comments suggested that the period for measuring the appropriate perpetuities period for the new trust should be the date the original trust became irrevocable under local law. The comments noted that the perpetuities period is properly measured from the date the trust becomes irrevocable, which is not always the date the trust was created (the date referenced in the proposed regulations). The regulations have been revised accordingly.
Under the proposed regulations, a court-approved settlement of a bona fide issue regarding the administration of the trust or the construction of terms of the trust will not cause the trust to lose exempt status if the settlement is the product of arm's length negotiations, and the settlement is within the range of reasonable outcomes under the governing instrument and applicable state law. A judicial construction of a governing instrument resolving an ambiguity in the terms of the instrument or correcting a scrivener's error will not cause loss of exempt status if the judicial action involves a bona fide issue, and the construction is consistent with applicable state law that would be applied by the highest court of the state.
One comment suggested that the standard applicable for recognition of settlement agreements should also apply for court decrees, such that one standard would govern both actions. Thus, the commentator suggested that a settlement agreement or court decree should be binding on the Service (and not cause loss of exempt status) if the result is within the range of reasonable outcomes and the agreement or court decision is the product of adversarial proceedings. The suggestion was not adopted. The standard applied in the regulations for court decrees was enunciated by the Supreme Court in
Another comment addressing the rule for settlements stated that the requirement that the settlement fall within the range of reasonable outcomes under the governing instrument and state law could be read to deny protection to a settlement that reaches a result that a court could not reach. However, the purpose of this rule is not to restrict safe harbor protection to only those settlements that reach the result a court could reach if the issue was litigated. Rather, the rule is intended to afford the parties a greater degree of latitude to settle a case than would be available if a court had to decide the issue. Thus, a settlement “within the range of reasonable outcomes” would include a compromise that reflects the parties' assessment of their relative rights and the strengths and weaknesses of their respective positions. The settlement need not (and it is anticipated that in most cases it would not) resolve the issue in the same manner as a court decision on the merits. Language has been added to the final regulations emphasizing this point. On the other hand, as illustrated in the preamble to the proposed regulations, a settlement that, for example, creates beneficial interests that did not exist under a reasonable interpretation of the instrument will not satisfy the regulations.
One comment suggested that the scope of the judicial construction rule should be expanded to cover not only ambiguities and scrivener's error, but any request for court instructions or any similar proceedings such as requests to modernize the trust instrument, or adapt the instrument to unforeseen changed circumstances. This suggestion was not adopted. The Treasury Department and the IRS believe that these and similar actions are properly addressed under the safe-harbor “shift in beneficial interest” rule provided in the regulations, and a separate category to address these items is not needed.
Under the proposed regulations, a modification that does not satisfy the
Comments suggested that the regulations should provide additional guidance on when a modification shifts a beneficial interest in a trust. In response to these comments, the final regulations provide that a modification to an exempt trust will result in a shift in beneficial interest to a lower generation beneficiary if the modification can result in an increase in a GST transfer or create a new GST transfer. To determine whether a modification of an irrevocable trust will shift a beneficial interest in a trust to a beneficiary who occupies a lower generation, the effect of the instrument on the date of the modification is measured against the effect of the instrument in existence immediately before the modification. If the effect of the modification cannot be immediately determined, it is deemed to shift a beneficial interest in the trust to a beneficiary who occupies a lower generation (as defined in section 2651) than the person or persons who held the beneficial interest prior to the modification.
In conjunction with this change, the final regulations remove
The standard contained in § 26.2601-1(b)(2) (relating to wills and revocable trusts executed before October 22, 1986) is similar to the standard contained in § 26.2602-1(b)(4)(i)(D)(relating to a modification to a trust that was irrevocable on September 25, 1985). The Treasury Department and the IRS believe that the two provisions should be applied in a consistent manner. Therefore,
In response to comments, the final regulations specify that changes that are administrative in nature (such as a change in the number of trustees) will not cause the trust to lose its exempt status. An example has been added illustrating this point.
Several comments indicated that many states have adopted, or are considering adopting, section 104 of the Revised Uniform Principal and Income Act. Unif. Principal and Income Act § 104, 7B U.L.A. 141 (1997) (Act). The Act allows a trustee to adjust between principal and income to the extent necessary to produce an equitable result, if the trustee invests and manages trust assets pursuant to the state's prudent investor statute and the trustee is unable to administer the trust fairly and reasonably under the general statutory rules governing the allocation of income and principal. In addition, the comments noted that some state legislatures are contemplating revising their state principal and income act to define trust
A guidance project considering the tax consequences of these state law changes in a broader context is currently under consideration. Accordingly, these regulations do not specifically address this issue. However, two examples have been added to the regulations illustrating circumstances under which a trust will not lose exempt status where an income interest is converted to an interest that pays the greater of trust income or a unitrust amount, and a trust is modified to allow allocation of capital gain to income.
In response to a comment, the facts presented in § 26.2601-1(b)(4)(i)(E)
Comments requested clarification regarding the status of exempt trusts that were modified or subject to other actions (for example, judicial constructions or settlements) prior to the effective date of these regulations, December 20, 2000. The IRS will not challenge the exempt status of a trust that was, prior to December 20, 2000, subject to any trustee action, judicial construction, settlement agreement, modification, or other action, if the action satisfies the requirements of the regulations.
Finally, with respect to the deletion of § 26.2601-1(b)(2)(vii)(B)
It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to these regulations, and therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding these regulations was submitted to the Small Business Administration for comment on its impact on small business.
The principal author of these regulations is James F. Hogan, Office of the Chief Counsel, IRS. Other personnel from the IRS and the Treasury Department participated in their development.
26 U.S.C. 7805 * * *
(b) * * *
(4) Retention of trust's exempt status in the case of modifications, etc.
(5) Exceptions to additions rule.
The additions read as follows:
(b) * * * (1) * * * (i) * * * Further, the rule in the first sentence of this paragraph (b)(1)(i) does not apply to a transfer of property pursuant to the exercise, release, or lapse of a general power of appointment that is treated as a taxable transfer under chapter 11 or chapter 12. The transfer is made by the person holding the power at the time the exercise, release, or lapse of the power becomes effective, and is not considered a transfer under a trust that was irrevocable on September 25, 1985. See paragraph (b)(1)(v)(B) of this section regarding the treatment of the release, exercise, or lapse of a power of appointment that will result in a constructive addition to a trust. See § 26.2652-1(a) for the definition of a transferor.
(2) * * *
(vii) * * *
(B)
(4)
(A)
(
(
(
(
(B)
(
(
(C)
(
(
(D)
(
(E)
In 1980, Grantor established an irrevocable trust (Trust) for the benefit of Grantor's child,
In 1980, Grantor established an irrevocable trust (Trust) for the benefit of Grantor's child,
In 1980, Grantor established an irrevocable trust for the benefit of Grantor's children,
In 1980, Grantor, who was domiciled in State
In 1980, Grantor established an irrevocable trust for the benefit of his two children,
In 1980, Grantor established an irrevocable trust for Grantor's child and the child's issue. In 1983, Grantor's spouse also established a separate irrevocable trust for the benefit of the same child and issue. The terms of the spouse's trust and Grantor's trust are identical. In 2002, the appropriate local court approved the merger of the two trusts into one trust to save administrative costs and enhance the management of the investments. The merger of the two trusts does not shift any beneficial interest in the trust to a beneficiary who occupies a lower generation (as defined in section 2651) than the person or persons who held the beneficial interest prior to the merger. In addition, the merger does not extend the time for vesting of any beneficial interest in the trust beyond the period provided for in the original trust. Therefore, the trust that resulted from the merger will not be subject to the provisions of chapter 13 of the Internal Revenue Code.
In 1980, Grantor established an irrevocable trust for the benefit of Grantor's grandchildren,
In 1980, Grantor established an irrevocable trust under the terms of which trust income is payable to
In 1980, Grantor established an irrevocable trust under the terms of which trust income is payable to Grantor's child,
In 1980, Grantor executed an irrevocable trust for the benefit of Grantor's issue, naming a bank and five other individuals as trustees. In 2002, the appropriate local court approves a modification of the trust that decreases the number of trustees which results in lower administrative costs. The modification pertains to the administration of the trust and does not shift a beneficial interest in the trust to any beneficiary who occupies a lower generation (as defined in section 2651) than the person or persons who held the beneficial interest prior to the modification. In addition, the modification does not extend the time for vesting of any beneficial interest in the trust beyond the period provided for in the original trust. Therefore, the trust will not be subject to the provisions of chapter 13 of the Internal Revenue Code.
(ii)
(c) * * * The last four sentences in paragraph (b)(1)(i) of this section are applicable on and after November 18, 1999.
Department of the Navy, DOD.
Final rule.
The Department of the Navy is amending its certifications and exemptions under the International Regulations for Preventing Collisions at Sea, 1972 (72 COLREGS), to reflect that the Deputy Assistant Judge Advocate General of the Navy (Admiralty and Maritime Law) has determined that certain prior entries in 32 CFR part 706 are no longer applicable or that administrative corrections are required. The intended effect of this rule is to warn mariners in waters where 72 COLREGS apply.
December 20, 2000.
Commander Gregg A. Cervi, JAGC, U.S. Navy, Deputy Assistant Judge Advocate General (Admiralty and Maritime Law), Office of the Judge Advocate General, (Code 11), 1322 Patterson Avenue SE., Suite 3000, Washington Navy Yard, DC 20374-5066, Telephone number: (202) 685-5040.
Pursuant to the authority granted in 33 U.S.C. 1605, the Department of the Navy amends 32 CFR part 706. This amendment provides notice that the
Moreover, it has been determined, in accordance with 32 CFR parts 296 and 701, that publication of this amendment for public comment prior to adoption is impracticable, unnecessary, and contrary to public interest because it is based on administrative corrections, alterations resulting in compliance with the 72 COLREGS, or removal of vessels from navigation.
Marine safety, Navigation (water), Vessels.
33 U.S.C. 1605.
a. In Table One by:
i. Removing the entries for the following vessels:
ii. Amending the entry for USS INCHON by revising “LPH 12” to read “MCS 12” and adding it immediately preceding the entry for NR-1; and
iii. Amending the entry for USS KAMEHAMEHA by revising “SSBN 642” to read “SSN 642” and adding it immediately preceding the entry for USS MENDEL RIVERS.
b. In Table Two by:
i. Removing the entries for the following vessels:
ii. Removing and reserving footnote 1; and
iii. Amending the entry for USS INCHON by revising “LPH 12” to read “MCS 12” and adding it immediately preceding the entry for SLWT (class).
c. In Table Three by:
i. Removing the entries for the following vessels:
ii. Amending the entry for USS KAMEHAMEHA by revising “SSBN 642” to read “SSN 642” and adding it immediately preceding the entry for USS PARCHE.
d. In Table Four by:
i. Amending paragraph 4 by removing the following entries from the table:
ii. Removing and reserving paragraph 6;
iii. Removing the following entries from paragraph 7:
iv. Removing the following entries from paragraph 8:
v. Removing and reserving paragraph 10;
vi. Removing the following entries from paragraph 14:
vii. Removing the second entry for USS PORTER in paragraph 16; and
viii. Removing the entry for KING-FISHER in paragraph 18.
e. In Table Five by:
i. Removing the entries for the following vessels:
ii. Amending the entry for USS INCHON by revising “LPH 12” to read “MCS 12” and adding it immediately preceding the entry for USNS KILAUEA.
3. Table One of § 706.3 is amended by removing the following entries:
Environmental Protection Agency (EPA).
Direct final rule.
EPA is taking direct final action to approve revisions to the Arizona State Implementation Plan (SIP). The revisions are rules from the Pinal County Air Quality Control District (PCAQCD). These rules were submitted by the State on behalf of the PCAQCD to provide support for general permitting requirements for stationary sources in the PCAQCD.
This action will clarify which PCAQCD rules were incorporated into the federally approved SIP on April 9, 1996 (61 FR 15717). This action will also remove inappropriate PCAQCD and Pinal-Gila Counties Air Quality Control District (PGCAQCD) rules from the SIP. Thus, EPA is approving this action on general permitting rules in the Arizona SIP under provisions of the CAA regarding EPA action on SIP submittals, SIPs for national primary and secondary ambient air quality standards, and plan requirements for maintenance attainment areas.
This rule is effective on February 20, 2001 without further notice, unless EPA receives adverse comments by January 19, 2001. If EPA receives such comment, it will publish a timely withdrawal in the
Comments must be submitted in writing to Andrew Steckel at the Region IX mailing address listed below. Copies of the rules and EPA's evaluation report are available for
Al Petersen, Rulemaking Office, (AIR-4), Air Division, U.S. Environmental Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 94105, Telephone: (415) 744-1135.
The rules that were previously approved into the PCAQCD
On August 16, 1994, May 31, 1995, and November 27, 1995, ADEQ submitted or resubmitted to EPA on behalf of PCAQCD various rules relating to general permitting and PSD requirements. Part of these rules were approved in a
In determining the approvability of a rule submittal, EPA must evaluate the rules for consistency with the requirements of the CAA, EPA regulations, as found in section 110 of the CAA and 40 CFR part 51 (Requirements for Preparation, Adoption, and Submittal of Implementation Plans), and EPA policy. The statutory requirements for nonattainment area permitting are found in Title I of the CAA. EPA must also ensure that rules are enforceable, appropriate for the SIP, and strengthen or maintain the SIP's control strategy.
EPA is clarifying that the individual rules approved on April 9, 1996 (61 FR 15717) along with their respective individual adoption dates, are as follows:
• PCAQCD Rules 1-1-020, 1-1-030, 1-1-040, [1-1-050], 1-1-060, 1-1-070, 1-1-080, 1-1-100, 1-2-110, 2-1-010, 2-1-020, 2-1-030, 2-1-040, 2-1-050, 2-1-060, 2-1-070, 2-2-080, 2-2-090, 2-3-100, 2-3-110, 2-4-120, 2-4-130, 2-4-140, 2-4-150, 2-5-170, 2-5-210, 2-6-220, 2-7-230, 2-7-240, 2-7-250, 2-7-260, 2-7-270, 3-1-020, 3-1-132, adopted on June 29, 1993.
• PCAQCD Rules 1-1-090, 1-2-120, 3-1-010, 3-1-030, 3-1-055, 3-1-065, 3-1-070, 3-1-082, 3-1-085, 3-1-087, 3-1-090, 3-1-102, 3-1-105, 3-1-110, 3-1-120, 3-1-140, 3-1-150, 3-1-160, 3-1-170, 3-1-173, 3-1-175, 3-1-177, 3-2-180, 3-2-185, 3-2-195, 3-2-190, 3-3-200, 3-3-203, 3-3-205, 3-3-260, 3-3-270, 3-3-275, 3-3-280, adopted on November 3, 1993.
• PCAQCD Rules 1-1-010, [1-1-055], 1-1-106, 2-5-180, 2-5-190, 2-5-200, 3-1-042, 3-1-060, [3-1-080], 3-1-081, 3-1-083, 3-1-084, 3-1-089, 3-1-103, 3-1-107, 3-1-109, 3-3-210, 3-3-250, adopted on February 22, 1995.
• PCAQCD Rules [1-1-105], 1-3-130, 1-3-140, 2-5-160, 3-1-040, 3-1-050, adopted on October 12, 1995.
The four rules below were erroneously approved by EPA as part of the previously approved Chapter 1, Article 1 (1-1-xxx series rules) and Chapter 3, Article 1 (3-1-xxx series rules). EPA is removing the four rules below from the PCAQCD portion of the Arizona SIP under section 110(k)(6) as inconsistent with the requirements of section 110(a) and part D of the CAA. The four rules are not appropriate for inclusion in the SIP for the reasons given below. Removal of these four rules from the SIP will have no effect on emissions to the ambient air:
• PCAQCD Rule 1-1-050, Authorization to Accept Funds or Grants, relates to management of local funds.
• PCAQCD Rule 1-1-055, Authorization to Collect Funds or Fees, relates to management of local funds and fees.
• PCAQCD Rule 1-1-105, SIP List, is a non-regulatory rule.
• PCAQCD Rule 3-1-080, Appeals to the Hearing Board, relates to procedures for the local hearing board.
The two rules below were apparently approved by EPA as part of the previously approved Chapter 3, Article 1 (3-1-xxx series rules). However, PCAQCD specifically excluded these rules from the November 27, 1995 submittal. Therefore, EPA is clarifying that these two rules are not approved into the SIP and have never been in the SIP, because there is not a valid SIP submittal:
• PCAQCD Rule 3-1-045, Transition from Installation and Operating Permit Program.
• PCAQCD Rule 3-1-100, Permit Posting.
Certain of the rules from the now-defunct PGCAQCD are determined by EPA to have been erroneously approved, because they are not appropriate for inclusion in the SIP. EPA is removing the following rules from the PGCAQCD portion of the Arizona SIP under section 110(k)(6) as inconsistent with the requirements of section 110(a) and part D of the CAA. A consequence of this action is that these rules are also removed from the PCAQCD portion of the Arizona SIP. The rules are not appropriate for inclusion in the SIP for the reasons given below. Removal of these rules from the SIP will have no effect on emissions to the ambient air:
• PGCAQCD Rule 7-1-2.2, Permit Unit Description and Fees, relates to assessment of local fees.
• PGCAQCD Rule 7-1-2.4, Appeals to Hearing Board, relates to procedures for the local hearing board.
• PGCAQCD Rule 7-1-2.7, Enforcement, relates to lacal enforcement of Arizona statutes.
• PGCAQCD Rule 7-2-1.3, Non-Methane Hydrocarbons, relates to a district non-methane hydrocarbon standard that does not have an equivalent in the NAAQS. This is consistent with the CAA, because there is no effect on attainment or any other applicable requirement of the CAA.
• PGCAQCD Rule 7-3-6.1, Policy and Legal Authority, relates to local
EPA approved into the SIP from the submittal of August 15, 1994 the following two rules, which are replaced by revised versions cited above:
• PCAQCD Rule 3-1-084, adopted on August 11, 1994.
• PCAQCD Rule 3-1-107, adopted on November 3, 1993.
EPA is publishing this direct final approval without prior proposal because the Agency views this SIP revision as a noncontroversial revision and anticipates no adverse comments. However, in the proposed rules section of this
If the EPA receives such comments, then EPA will publish a timely withdrawal in the
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February, 20, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Hydrocarbons, Incorporation by reference, Intergovernmental relations, Permitting, Reporting and recordkeeping requirements.
42 U.S.C. 7401
(c) * * *
(18) * * *
(iv) * * *
(B) Previously approved on November 15, 1978 and now deleted without replacement Rules 7-1-2.2, 7-1-2.4, 7-1-2.7, 7-2-1.3, and 7-3-6.1.
(84) * * *
(i) * * *
(A) Rules 1-1-020, 1-1-030, 1-1-040, 1-1-060, 1-1-070, 1-1-080, 1-1-100, 1-2-110, 2-1-010, 2-1-020, 2-1-030, 2-1-040, 2-1-050, 2-1-060, 2-1-070, 2-2-080, 2-2-090, 2-3-100, 2-3-110,
(B) Rules 1-1-090, 1-2-120, 3-1-010, 3-1-030, 3-1-055, 3-1-065, 3-1-070, 3-1-082, 3-1-085, 3-1-087, 3-1-090, 3-1-102, 3-1-105, 3-1-110, 3-1-120, 3-1-140, 3-1-150, 3-1-160, 3-1-170, 3-1-173, 3-1-175, 3-1-177, 3-2-180, 3-2-185, 3-2-190, 3-2-195, 3-3-200, 3-3-203, 3-3-205, 3-3-260, 3-3-270, 3-3-275, 3-3-280, adopted on November 3, 1993.
(C) Rules 1-1-010, 1-1-106, 2-5-190, 2-5-200, 3-1-042, 3-1-060, 3-1-081, 3-1-083, 3-1-084, 3-1-089, 3-1-103, 3-1-107, 3-1-109, 3-3-210, 3-3-250, adopted on February 22, 1995.
(D) Rules 1-3-130, 1-3-140, 2-5-160, 2-5-180, 3-1-040, 3-1-050, adopted on October 12, 1995.
Environmental Protection Agency (EPA).
Direct final rule.
The EPA is taking direct final action to approve revisions to the Texas State Implementation Plan (SIP). The revisions incorporate regulations to control Volatile Organic Compound (VOC) emissions from batch processes, industrial wastewater, and during the filling of underground storage tanks at gasoline service stations. The intended effect is to approve the regulations into the Texas SIP. This action is being taken in accordance with the Federal Clean Air Act (Act).
This rule is effective on February 20, 2001 without further notice, unless EPA receives adverse comment by January 19, 2001. If EPA receives such adverse comment, EPA will publish a timely withdrawal in the
Written comments on this action should be addressed to Mr. Thomas Diggs, Chief, Air Planning Section (6PD-L), at the EPA Region 6 Office listed below.
Copies of the documents relevant to this action, including the Technical Support Document (TSD), are available for public inspection during normal business hours at the following locations. Interested persons wanting to examine these documents should make an appointment with the appropriate office at least two working days in advance.
Environmental Protection Agency, Region 6, Air Planning Section (6PD-L), Multimedia Planning and Permitting Division, Region 6, Dallas, 1445 Ross Avenue, Texas 75202-2733, telephone: (214) 665-7214.
Texas Natural Resource Conservation Commission, 12100 Park 35 Circle, Austin, Texas 78711-3087.
Mr. Guy R. Donaldson, Air Planning Section (6PD-L), Multimedia Planning and Permitting Division, Environmental Protection Agency, Region 6, 1445 Ross Avenue, Dallas, Texas 75202-2733, telephone: (214) 665-7242.
Throughout this document “we,” “us,” and “our” means EPA. Please note that if we receive adverse comment(s) on an amendment, paragraph, or section of this rule and if that provision is independent of the remainder of the rule, we may adopt as final those provisions of the rule that are not the subject of adverse comment.
We are approving three provisions as part of the Texas State Implementation Plan. We believe these revisions will help Texas meet certain requirements of the Clean Air Act and they will contribute to attainment of the one-hour ozone standard in the Houston/Galveston, Beaumont/Port Arthur and Dallas/Fort Worth nonattainment areas. The three provisions are:
• We are approving rules to control emissions from industrial wastewater sources in the Synthetic Organic Chemical Industry (SOCMI) in the Houston/Galveston and Beaumont/Port Arthur ozone nonattainment areas (30 Texas Administrative Code(TAC)115.140-149) as meeting the section 182(b)(2) and section 183 Reasonably Available Control Technology (RACT) requirements. These rules were initially submitted for the Houston/Galveston, Dallas/Fort Worth, and El Paso areas in a letter from the Governor of Texas dated May 9, 1994 and given limited approval. See 64 FR 3841 (January 26, 1999) and 62 FR 27964 (May 22, 1997). The rules were revised as they relate to the Beaumont/Port Arthur and Houston/Galveston areas and submitted in a letter from the Governor of Texas dated November 12, 1999. We are approving the 1999 regulations as revised for the Beaumont/Port Arthur and Houston/Galveston areas as meeting RACT. Furthermore, we are converting the limited approval to a full approval because we now believe that RACT is being implemented for major sources in this source category in all four 1-hour ozone nonattainment areas in Texas. (We previously approved negative declarations for this source category in the El Paso and Dallas/Fort Worth areas. See 61 FR 55897 (October 30, 1996).)
• We are approving as RACT, rules to control emissions from batch processes in the Beaumont/Port Arthur ozone nonattainment area (30 TAC 115.160-115.169). The rules to control Batch Processes were submitted in a letter dated November 12, 1999.
• We are approving rules to require recovery of vapors displaced when tanker trucks unload gasoline at service stations in the eastern half of Texas (30 TAC 115.213-115.229 and 115.234-115.239). These rules were submitted in a letter dated August 9, 1999. We are approving these rules under part D of the Act because the State of Texas is relying upon these VOC reductions to demonstrate attainment of the 1-hour ozone standard in the Beaumont/Port Arthur, Dallas/Fort Worth, and Houston/Galveston areas. We are also approving these rules under sections 110 and 116 because the State is relying upon these rules for the continued maintenance of the standard in the eastern half of the State of Texas and as a strengthening of the existing Texas SIP.
In addition, when we approved the Texas VOC rules for the capture and control of the vapors at bulk gasoline
Section 172(c)(1) of the Act contains general requirements for States to implement RACT in areas that do not meet the NAAQS. Section 182(b)(2) of the Act contains more specific requirements for moderate and above ozone nonattainment areas. The EPA has defined RACT as the lowest emission limitation that a particular source is capable of meeting by the application of control technology that is reasonably available, considering technological and economic feasibility. See 44 FR 53761 (September 17, 1979). RACT is required for major sources in ozone nonattainment areas and for minor sources where EPA has issued a Control Technique Guideline.
Oxygen in the atmosphere reacts with VOCs and Oxides of Nitrogen to form ozone, a key component of urban smog. Inhaling even low levels of ozone can trigger a variety of health problems including chest pains, coughing, nausea, throat irritation, and congestion. It also can worsen bronchitis and asthma. Exposure to ozone can also reduce lung capacity in healthy adults.
Volatile Organic Compound is a term used to describe a class of chemicals that react in the atmosphere in the presence of sunlight to form ozone. Sources include vehicle exhaust, gasoline vapors, oil-based paints and industrial operations. A regulatory definition of Volatile Organic Compounds can be found at 40 CFR 51.100(s). The definition in Texas can be found in 30 TAC 115.10.
The wastewater from SOCMI facilities can contain significant quantities of VOC. These VOCs can enter the air when wastewater comes in contact with the atmosphere in junction boxes, holding ponds or open tanks. The Texas rules for the Houston/Galveston and Beaumont/Port Arthur areas require that 90 percent of the VOCs be removed from a wastewater stream before the wastewater is exposed to the air. Streams that contain more than 1000 ppm VOC are subject to the 90% removal requirement. The wastewater rules apply in Hardin, Jefferson and Orange counties in the Beaumont/Port Arthur area; Harris, Brazoria, Galveston, Liberty, Chambers, Waller, Montgomery, and Fort Bend Counties in the Houston/Galveston area.
In Dallas, Tarrant, Collin and Denton counties in the Dallas/Fort Worth area and El Paso County in the El Paso area, less stringent requirements that we had previously given limited approval continue in place. The EPA is converting the limited approval of the rules for Dallas/Fort Worth and El Paso to full approval because there are no major sources of VOCs from wastewater in those areas. Therefore, RACT is not required for this source category in those areas. We approved the determination by Texas that there are no major sources of VOCs from wastewater in the Dallas/Fort Worth and El Paso areas (a negative declaration) on October 30, 1996 (61 FR 55897). The negative declaration is still acceptable for the Dallas/Fort Worth area although the definition of a “major source” changed from 100 tons per year to 50 tons per year when we reclassified the area from moderate to serious. For a complete description of our review of the industrial wastewater rules see the TSD for this document.
Batch Processes are those processes characterized by non-steady state conditions. Products are used to make pharmaceuticals and specialty chemicals. The products are made in batches rather than continuously. They generate emissions from vents from reactors and process vessels.
The rules require that the emissions from the vents be reduced by 90%. Vents can be exempted from control based on the volumetric flow rate of the gas stream and the mass flow rate of the VOCs. The rules include equations that allow vent streams to be considered separately and in combination to determine whether it is cost effective to control the vents. The rule envisions that several vent streams could be routed together to a common control device if in combination the streams are cost effective to control. If based on the equations, control of a stream is not found to be cost effective, either individually or combined with other streams in the batch process the stream is exempted from control.
The rules apply in the Hardin, Jefferson and Orange Counties in the Beaumont/Port Arthur nonattainment area. For a complete description of our review of the batch processing rules see the Technical Support Document for this action.
The rules would require capturing the vapors from the gasoline station storage tanks as tank-trucks fill these tanks, returning the vapors to the tank-truck. This is commonly known as Stage I vapor recovery. The tank-truck then carries the vapors back to the bulk gasoline plant or terminal. To insure the vapors are not lost in transit, the Texas rules also include requirements that the gasoline tank-trucks be tested for vapor tightness. We are approving the vapor recovery requirements and the vapor tightness requirements.
Separate rules call for the capture and control of the vapors at bulk gasoline plants and terminals. We have reviewed the requirements for bulk gasoline plants and terminals and approved them in a separate
The Stage I rules have been in place for many years in the Dallas/Fort Worth, El Paso, Houston/Galveston and Beaumont/Port Arthur areas. The Texas rules expand the requirement to the larger gas stations in 95 additional counties in the eastern half of the State. The rules apply to service stations with a throughput greater than 125,000 gallons/month.
These counties are: Anderson, Angelina, Aransas, Atascosa, Austin, Bastrop, Bee, Bell, Bexar, Bosque, Bowie, Brazos, Burleson, Caldwell, Calhoun, Camp, Cass, Cherokee, Colorado, Comal, Cooke, Coryell, De Witt, Delta, Ellis, Falls, Fannin, Fayette, Franklin, Freestone, Goliad, Gonzales, Grayson, Gregg, Grimes, Guadalupe, Harrison, Hays, Henderson, Hill, Hood, Hopkins, Houston, Hunt, Jackson, Jasper, Johnson, Karnes, Kaufman, Lamar, Lavaca, Lee, Leon, Limestone, Live Oak, Madison, Marion, Matagorda, McLennan, Milam, Morris, Nacogdoches, Navarro, Newton, Nueces, Panola, Parker, Polk, Rains, Red River, Refugio, Robertson, Rockwall, Rusk, Sabine, San Jacinto, San Patricio, San Augustine, Shelby, Smith, Somervell, Titus, Travis, Trinity, Tyler, Upshur, Van Zandt, Victoria, Walker, Washington, Wharton, Williamson, Wilson, Wise, and Wood.
These rules are designed to reduce overall background levels of ozone in
Our Regional office developed a Federal Implementation Plan (FIP) (40 CFR 52.2285) for Bexar County, and certain counties in central and east Texas, in the mid-1970s. The FIP applied to service stations with a storage capacity greater than or equal to 1000 gallons. The Texas rules that we are approving as a revision to the Texas SIP set exemption levels based on throughput, not storage capacity. Upon the effective date of our approval of sections 115.222-115.229, affected sources will only need to comply with the State's SIP-approved VOC rules and not our FIP VOC rule. The affected sources are service stations with a throughput greater than 125,000 gallons per month.
The FIP requirements will remain in place for service stations with a storage capacity greater than or equal to 1000 gallons and a throughput less than 125,000 gallons per month. The affected counties are: Bexar, Comal, Ellis, Guadalupe, Hood, Johnson, Kaufman, Matagorda, Parker, Rockwall, and Wise.
Section 110 of the Act requires States to develop air pollution regulations and control strategies to ensure that State air quality meets the NAAQS that EPA has established. Under section 109 of the Act, EPA established the NAAQS to protect public health. The NAAQS address six criteria pollutants. These criteria pollutants are: carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide.
Each State must submit these regulations and control strategies to us for approval and incorporation into the federally enforceable SIP. Each State has a SIP designed to protect air quality. These SIPs can be extensive, containing State regulations or other enforceable documents and supporting information such as emission inventories, monitoring networks, and modeling demonstrations.
When a State wants to incorporate its regulations into the federally enforceable SIP, the State must formally adopt the regulations and control strategies consistent with State and Federal requirements. This process includes a public notice, a public hearing, a public comment period, and a formal adoption by a state-authorized rulemaking body.
Once a State adopts a rule, regulation, or control strategy, the State may submit the adopted provisions to us and request that we include these provisions in the federally enforceable SIP. We must then decide on an appropriate Federal action, provide public notice on this action, and seek additional public comment regarding this action. If we receive adverse comments, we must address them prior to a final action.
Under section 110 of the Act, when we approve a State's regulation(s) and supporting information, those State regulation(s) and supporting information become a part of the federally approved SIP. You can find records of these SIP actions in the Code of Federal Regulations at title 40, part 52, entitled “Approval and Promulgation of Implementation Plans.” The actual State regulations that we approved are not reproduced in their entirety in the CFR but are “incorporated by reference,” which means that we have approved a given State regulation with a specific effective date.
A State may enforce State regulations before and after we incorporate those regulations into a federally approved SIP. After we incorporate those regulations into a federally approved SIP, both EPA and the public may also take enforcement action against violators of these regulations.
The EPA is publishing this rule without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the “Proposed Rules” section of today's
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves State law as meeting Federal requirements and imposes no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
In reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16,1994). As required by section 3 of Executive Order 12988 (61 FR 4729,
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 20, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements.
Environmental protection, Air pollution control, Carbon monoxide, Hydrocarbons, Nitrogen dioxide, Nitrogen oxides, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
(c) * * *
Environmental Protection Agency (EPA).
Direct final rule.
The EPA is approving revisions to Colorado's construction permit requirements in Regulation No. 3 and hazardous air pollutant requirements in Regulation No. 8 of the State Air Quality Control Commission (AQCC) regulations, regarding permits to limit potential to emit criteria and hazardous air pollutants (HAPs). These revisions were submitted to EPA on April 26, 1996. Colorado submitted these revisions to create federally enforceable limits on criteria pollutants and HAPs, for both new and existing sources, through the State's construction permit program. EPA is approving the revisions to Regulation No. 3 regarding criteria pollutants as part of Colorado's state implementation plan (SIP) under section 110 of the Clean Air Act (CAA).
SIP approval under section 110 of the CAA, however, only extends to the control of HAPs that are criteria pollutants, such as volatile organic compounds or particulate matter, whereas section 112 of the CAA provides the underlying authority for controlling all HAPs listed in section 112(b) of the CAA. Therefore, the EPA is also approving the revisions to Regulation No. 3 and Regulation No. 8 under section 112(l) of the CAA.
This direct final rule is effective on February 20, 2001 without further notice, unless EPA receives adverse comments by January 19, 2001. If adverse comments are received, EPA will publish a timely withdrawal of the direct final rule in the
Written comments may be mailed to Richard R. Long, Director, Air and Radiation Program, Mailcode 8P-AR, Environmental Protection Agency (EPA), Region VIII, 999 18th Street, Suite 300, Denver, Colorado 80202. Copies of the documents relevant to this action are available for public inspection during normal business hours at the Air and Radiation Program, Environmental Protection Agency, Region VIII, 999 18th Street, Suite 300, Denver, Colorado, 80202. Copies of the State documents relevant to this action are also available for public inspection at the Colorado Department of Public Health and Environment, Air Pollution Control Division, 4300 Cherry Creek Drive South, Denver, Colorado 80246-1530.
Megan Williams, EPA, Region VIII, (303) 312-6431.
Throughout this document wherever “we,” “us,” or “our” are used, we mean the Environmental Protection Agency.
In this action, we are approving Colorado's revisions to AQCC Regulations No. 3 and 8 regarding permits to limit potential to emit criteria and hazardous air pollutants. We are approving, under section 112(l) of the CAA, the provisions in Regulations No. 3 and 8 that pertain to limiting potential to emit HAPs. We are also approving, under section 110 of the CAA, the revisions to Colorado's construction permit rules in Regulation No. 3 that provide for limiting potential to emit criteria pollutants.
Section 110(k) of the CAA authorizes our action on a submission of SIP revisions. The CAA also requires that States observe certain procedural requirements in developing SIP revisions for submittal to EPA. Section 110(a)(2) of the CAA requires that the State adopt each SIP revision after reasonable notice and public hearing.
Colorado held a public hearing on the proposed rule changes on March 16, 1995, continued on May 18, 1995. The changes were adopted by the AQCC directly after the May 18, 1995 hearing and were formally submitted to EPA by the Governor on April 26, 1996. We reviewed the submission against our completeness criteria in 40 CFR part 51, appendix V. We determined the submission was complete and notified the State in a letter dated July 3, 1996.
On April 26, 1996, Colorado submitted revisions to Regulations No. 3 and 8 to EPA for approval. Specifically, the State requested approval of provisions to limit the potential to emit criteria and hazardous air pollutants. The provisions apply to new and modified stationary sources, and also allow existing sources (through the addition of section III.A.7 of Regulation No. 3, part B) to voluntarily request a construction permit to limit their potential to emit. These limits on potential to emit will potentially enable the source to avoid classification as a major source.
The revisions to Regulations No. 3 and 8 include several provisions to ensure that permits containing limits on potential to emit will meet all applicable requirements and will be practically enforceable. For example, Regulation No. 8, part E, section IV.B.3 requires that all permit conditions for sources requesting voluntary limits on potential to emit HAPs must be at least as stringent as any applicable requirement in the Colorado SIP or that is otherwise federally enforceable (
Thus, Colorado's revisions to Regulations No. 3 and 8 to create limits on potential to emit criteria and hazardous air pollutants were made to ensure that such permits would meet all applicable requirements and be both practically and federally enforceable.
We are approving these revisions to Regulations No. 3 and 8 because the revisions are consistent with all requirements of the CAA and with EPA guidance. Specifically, we are approving the revisions to Regulation No. 3 that pertain to criteria pollutants as part of the SIP under section 110 of the CAA. Because we don't have authority under section 110 to approve provisions relating to HAPs, except for HAPs that are constituents of criteria pollutants, we are approving the provisions in Regulation No. 3 and Regulation No. 8 pertaining to creating limits on potential to emit HAPs under section 112(l) of the CAA.
In the July 10, 1996
The effect of this approval under sections 110 and 112(l) of the CAA will be that the relevant provisions of AQCC Regulations No. 3 and 8 and the permits issued under these provisions will be federally enforceable. We reserve the right to deem permit conditions not federally enforceable. Such a determination will be based upon the permit, permit approval procedures, or permit requirements which do not conform with the permit program requirements or the requirements of our underlying regulations.
We are approving Colorado's provisions in Regulations No. 3 and 8 to limit potential to emit HAPs (submitted on April 26, 1996) under section 112(l) of the CAA. Our approval under section 112(l) of the CAA includes the new section in Colorado's Regulation No. 8 titled “Air Pollution Permits to Limit the Potential to Emit Hazardous Air Pollutants” (Regulation No. 8, part E, section IV), and the associated provisions for issuing such permits in Colorado's Regulation No. 3.
In addition, we are approving the revisions to Regulation No. 3 that were included as part of Colorado's submittal and that pertain to criteria pollutants as part of the SIP under section 110 of the CAA. These revisions to Regulation No. 3, specifically, part B, sections III.A.4, III.A.7 and IV.C.4, allow sources to voluntarily request a permit to limit potential to emit criteria pollutants. We are not taking action under section 110 of the CAA on the revisions to Regulation No. 3, specifically, part B, section IV.C.1.c, that pertain only to hazardous air pollutants.
Nothing in this action should be construed as permitting or allowing or establishing a precedent for any future request for revision to any state implementation plan. Each request for revision to the state implementation plan shall be considered separately in light of specific technical, economic, and environmental factors and in relation to relevant statutory and regulatory requirements.
EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comments. However, in the proposed rules section of this
If the EPA receives such comments, then EPA will publish a document withdrawing the final rule and informing the public that the rule will not take effect. All public comments received will then be addressed in a subsequent final rule based on the proposed rule. The EPA will not institute a second comment period. Any parties interested in commenting should do so at this time. If no such comments are received, the public is advised that this rule will be effective on February 20, 2001 and no further action will be taken on the proposed rule.
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 20, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
40 CFR Part 52 is amended as follows:
42 U.S.C. 7401
(c) * * *
(88) On April 26, 1996, the Governor of Colorado submitted revisions to Regulation No. 3 to allow a source to voluntarily request a permit to limit potential to emit and to require that such permits be subject to public participation.
(i) Incorporation by reference.
(A) Regulation No. 3, “Air Contaminant Emissions Notices,” 5 CCR 1001-5, revisions adopted 5/18/95, effective 7/30/95, as follows: part B, sections III.A.4, III.A.7, and IV.C.4.
Environmental Protection Agency (EPA).
Direct final rule.
EPA is taking direct final action to approve revisions to the Santa Barbara County Air Pollution Control District (SBCAPCD) and Ventura County Air Pollution Control District (VCAPCD) portion of the California State Implementation Plan (SIP). These revisions concern Oxides of Nitrogen (NO
This rule is effective on February 20, 2001 without further notice, unless EPA receives adverse comments by January 19, 2001. If we receive such comment, we will publish a timely withdrawal in the
Mail comments to Andy Steckel, Rulemaking Office Chief (AIR-4), U.S. Environmental Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901.
You can inspect copies of the submitted SIP revisions and EPA's technical support documents (TSDs) at our Region IX office during normal business hours. You may also see copies of the submitted SIP revisions at the following locations:
Ed Addison, Rulemaking Office (AIR-4), U.S. Environmental Protection Agency, Region IX, (415) 744-1160.
Throughout this document, “we,” “us” and “our” refer to EPA.
Table 1 lists the rules we are approving with the dates that they were adopted by the local air agencies and submitted by the California Air Resources Board (CARB).
On March 1, 2000, these rule submittals were found to meet the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review.
There are no previous versions of SBCAPCD Rule 352, Natural-Gas Fired Fan-Type Central Furnaces and Residential Water Heaters, or VCAPCD Rule 74.11.1, Large Water Heaters and Small Boilers.
In the VCAPCD, after December 31, 2000, for any water heater, boiler, steam generator or process heater offered for sale, sold or installed of between 175,000 and 400,000 Btu/hour heat input capacity; and for SBCAPCD natural-gas fired fan-type central furnaces and residential water heaters, for units of less than 175,000 Btu/hour, and combination heating and cooling units of less than 65,000 Btu/hour cooling capacity, both rules limit total emissions to not exceed 40 nanograms of NO
Generally, SIP rules must be enforceable (see section 110(a) of the Act), must require Reasonably Available Control Technology (RACT) for major sources in nonattainment areas (see sections 182(a)(2)(A) and 182(f)), and must not relax existing requirements (see sections 110(l) and 193). Rule 74.11.1 potentially regulates major sources in an ozone nonattainment area (see 40 CFR part 81), so the Rule must fulfill RACT.
Guidance and policy documents that we used to define specific enforceability and RACT requirements include the following:
1. “State Implementation Plans; Nitrogen Oxides Supplement to the General Preamble; Clean Air Act Amendments of 1990 Implementation of Title I; Proposed Rule,” (the NO
2. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations; Clarification to Appendix D of November 24, 1987
3. South Coast Air Quality Management Control District Protocol, “Nitrogen Oxides Emissions Compliance Testing for Natural Gas Fired Water Heaters and Small Boilers, Source Testing and Engineering Branch, Applied Science and Technology, March 1995,” was developed jointly with the industry, and replaces the ANSI requirements currently used by manufacturers.
We believe these rules are consistent with the relevant policy and guidance regarding enforceability, and SIP relaxations. The TSD has more information on our evaluation.
The TSD describes additional rule revisions that do not affect EPA's current action but are recommended for the next time the local agency modifies the rules.
As authorized in section 110(k)(3) of the Act, EPA is fully approving the submitted rules because we believe they fulfill all relevant requirements. We do not think anyone will object to this approval, so we are finalizing it without proposing it in advance. However, in the Proposed Rules section of this
NO
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 20, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements.
Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(c) * * *
(278) * * *
(i) * * *
(B) Santa Barbara County Air Pollution Control District.
(
(C) Ventura County Air Pollution Control District.
(
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes time-limited tolerances for combined residues of thiamethoxam and its CGA-322704 metabolite in or on cotton, milk, and meat and meat byproducts of cattle, goats, horses and sheep. This action is in response to EPA's granting of an emergency exemption under section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act authorizing use of the pesticide on cotton. This regulation establishes maximum permissible levels for residues of thiamethoxam in this food commodity. These tolerances will expire and are revoked on December 31, 2002.
This regulation is effective December 20, 2000.Objections and requests for hearings, identified by docket control number OPP-301080, must be received by EPA on or before February 20, 2001.
Written objections and hearing requests may be submitted by mail, in person, or by courier. Please follow the detailed instructions for each method as provided in Unit VII. of the
By mail: Stephen Schaible, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number:703-308-9362; and e-mail address: schaible.stephen@epa.gov.
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:
This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under
1.
2.
EPA, on its own initiative, in accordance with sections 408(e) and 408 (l)(6) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, is establishing tolerances for combined residues of the insecticide thiamethoxam, 3-[(2-chloro-5-thiazolyl)methyl]tetrahydro-5-methyl-
Section 408(l)(6) of the FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under section 18 of FIFRA. Such tolerances can be established without providing notice or period for public comment. EPA does not intend for its actions on section 18 related tolerances to set binding precedents for the application of section 408 and the new safety standard to other tolerances and exemptions. Section 408(e) of the FFDCA allows EPA to establish a tolerance or an exemption from the requirement of a tolerance on its own initiative, i.e., without having received any petition from an outside party.
Section 408(b)(2)(A)(i) of the FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) requires EPA to give special consideration to exposure of infants and children to the pesticide chemical
Section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) authorizes EPA to exempt any Federal or State agency from any provision of FIFRA, if EPA determines that “emergency conditions exist which require such exemption.” This provision was not amended by the Food Quality Protection Act (FQPA). EPA has established regulations governing such emergency exemptions in 40 CFR part 166.
According to the Applicant, cotton aphid infestations have begun to develop earlier in the production season and consistent control of this pest has become difficult to achieve with currently available materials. It is claimed that cotton aphid has developed resistance to most currently labeled and recommended insecticides in Mississippi, and laboratory assays, field experiments and field experience indicate that insecticides currently recommended for aphid control are variable in effectiveness. EPA has authorized under FIFRA section 18 the use of thiamethoxam on cotton for control of cotton aphids in Mississippi. After having reviewed this submission, EPA concurs that an emergency condition exists for this State.
As part of its assessment of this emergency exemption, EPA assessed the potential risks presented by residues of thiamethoxam and its metabolite in or on cotton, as well as the potential risk presented by secondary residues of thiamethoxam and its metabolite in milk, meat, and meat byproducts of cattle, goats, horses and sheep. In doing so, EPA considered the safety standard in FFDCA section 408(b)(2), and EPA decided that the necessary tolerances under FFDCA section 408(l)(6) would be consistent with the safety standard and with FIFRA section 18. Consistent with the need to move quickly on the emergency exemption in order to address urgent non-routine situations and to ensure that the resulting food is safe and lawful, EPA is issuing these tolerances without notice and opportunity for public comment as provided in section 408(l)(6). Although these tolerances will expire and are revoked on December 31, 2002, under FFDCA section 408(l)(5), residues of the pesticide not in excess of the amounts specified in the tolerances remaining in or on cotton, undelinted seed; cotton, gin byproducts; milk; meat of cattle, goats, horses and sheep; and meat byproducts of cattle, goat, horses and sheep after that date will not be unlawful, provided the pesticide is applied in a manner that was lawful under FIFRA, and the residues do not exceed levels that were authorized by these tolerances at the time of that application. EPA will take action to revoke these tolerances earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe.
Because these tolerances are being approved under emergency conditions, EPA has not made any decisions about whether thiamethoxam meets EPA's registration requirements for use on cotton or whether permanent tolerances for this use would be appropriate. Under these circumstances, EPA does not believe that these tolerances serve as a basis for registration of thiamethoxam by a State for special local needs under FIFRA section 24(c). Nor do these tolerances serve as the basis for any State other than Mississippi to use this pesticide under section 18 of FIFRA without following all provisions of EPA's regulations implementing section 18 as identified in 40 CFR part 166. For additional information regarding the emergency exemption for thiamethoxam, contact the Agency's Registration Division at the address provided under
EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 and a complete description of the risk assessment process, see the final rule on Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997) (FRL-5754-7).
Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of thiamethoxam and to make a determination on aggregate exposure, consistent with section 408(b)(2), for time-limited tolerances for combined residues of thiamethoxam and its metabolite in or on cotton, undelinted seed at 0.1 ppm; cotton, gin byproducts at 1.5 ppm; milk at 0.02 ppm; meat of cattle, goats, horses and sheep at 0.02 ppm; and meat byproducts of cattle, goats, horses and sheep at 0.02 ppm. EPA's assessment of the dietary exposures and risks associated with establishing these tolerances follows.
The dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological endpoint. However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessent if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. An UF of 100 is routinely used, 10X to account for interspecies differences and 10X for intraspecies differences.
For dietary risk assessment (other than cancer) the Agency uses the UF to calculate an acute or chronic reference dose (acute RfD or chronic RfD) where the RfD is equal to the NOAEL divided by the appropriate UF (RfD = NOAEL/UF). Where an additional safety factor is retained due to concerns unique to the FQPA, this additional factor is applied to the RfD by dividing the RfD by such additional factor. The acute or chronic Population Adjusted Dose (aPAD or cPAD) is a modification of the RfD to accommodate this type of FQPA Safety Factor.
For non-dietary risk assessments (other than cancer) the UF is used to determine the level of concern (LOC). For example, when 100 is the appropriate UF (10X to account for interspecies differences and 10X for intraspecies differences) the LOC is 100. To estimate risk, a ratio of the NOAEL to exposures (margin of exposure (MOE) = NOAEL/exposure) is calculated and compared to the LOC.
The linear default risk methodology (Q
1.
i.
ii.
iii.
iv.
Section 408(b)(2)(F) states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if the Agency can make the following findings: Condition 1, that the data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain such pesticide residue; Condition 2, that the exposure estimate does not underestimate exposure for any significant subpopulation group; and
The Agency used percent crop treated (PCT) information as follows:
A Tier 3 chronic dietary exposure analysis for the insecticide thiamethoxam was based on 21% of the cotton crop being treated. The estimate of 21% was calculated by comparing the projected base acres of cotton to be treated annually to the total acres of cotton grown in the United States according to market survey data. Base acres were calculated by multiplying the percentage projected replacement of an alternative by thiamethoxam to control a specific cotton pest by the acres treated once by this alternative, summing across pests.
Anticipated residue values (ARs) for cotton commodities which were used in the chronic and cancer dietary risk assessments were calculated from field trial data. Refined concentration/dilution factors derived from a cottonseed processing study were also used. ARs for livestock commodities used projected market share estimates and average residues from field trials for feed items, in addition to residue data derived from feeding and metabolism studies.
The Agency believes that the three conditions previously discussed have been met. With respect to Condition 1, EPA finds that the PCT information described above for thiamethoxam used on cotton is reliable and has a valid basis. The PCT estimate is derived from market survey data relating to insecticide use on cotton. As the time-limited tolerances being established for cotton commodities are in conjunction with the section 18 use of thiamethoxam on cotton in Mississippi and not use nationwide, this percent of crop treated value is considered an overestimate for the purposes of this risk assessment. As to Conditions 2 and 3, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available information on the regional consumption of food to which thiamethoxam may be applied in a particular area.
2.
The Agency uses the Generic Estimated Environmental Concentration (GENEEC) or the Pesticide Root Zone/Exposure Analysis Modeling System (PRZM/EXAMS) to estimate pesticide concentrations in surface water and SCI-GROW, which predicts pesticide concentrations in groundwater. In general, EPA will use GENEEC (a tier 1 model) before using PRZM/EXAMS (a tier 2 model) for a screening-level assessment for surface water. The GENEEC model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. GENEEC incorporates a farm pond scenario, while PRZM/EXAMS incorporate an index reservoir environment in place of the previous pond scenario. The PRZM/EXAMS model includes a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.
None of these models include consideration of the impact processing (mixing, dilution, or treatment) of raw water for distribution as drinking water would likely have on the removal of pesticides from the source water. The primary use of these models by the Agency at this stage is to provide a coarse screen for sorting out pesticides for which it is highly unlikely that drinking water concentrations would ever exceed human health levels of concern.
Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations (EECs) from these models to quantify drinking water exposure and risk as a %RfD or %PAD. Instead, drinking water levels of comparison (DWLOCs) are calculated and used as a point of comparison against the model estimates of a pesticide's concentration in water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food, and from residential uses. Since DWLOCs address total aggregate exposure to thiamethoxam they are further discussed in the aggregate risk sections below.
Based on the PRZM/EXAMS and SCI-GROW models the estimated environmental concentrations (EECs) of thiamethoxam for acute exposures are estimated to be 8.0 parts per billion (ppb) for surface water and 1.55 ppb for ground water. The EECs for chronic exposures are estimated to be 0.6 ppb for surface water and 1.55 ppb for ground water.
3.
Thiamethoxam is not registered for use on any sites that would result in residential exposure.
4.
EPA does not have, at this time, available data to determine whether thiamethoxam has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, thiamethoxam does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that thiamethoxam has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the final rule for Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997).
1.
ii.
iii.
iv.
v.
To estimate total aggregate exposure to a pesticide from food, drinking water, and residential uses, the Agency calculates DWLOCs which are used as a point of comparison against the model estimates of a pesticide's concentration in water (EECs). DWLOC values are not regulatory standards for drinking water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food and residential uses. In calculating a DWLOC, the Agency determines how much of the acceptable exposure (i.e., the PAD) is available for exposure through drinking water e.g., allowable chronic water exposure (mg/kg/day) = cPAD - (average food + chronic non-dietary, non-occupational exposure). This allowable exposure through drinking water is used to calculate a DWLOC.
A DWLOC will vary depending on the toxic endpoint, drinking water consumption, and body weights. Default body weights and consumption values as used by the USEPA Office of Water are used to calculate DWLOCs: 2L/70 kg (adult male), 2L/60 kg (adult female), and 1L/10 kg (child). Default body weights and drinking water consumption values vary on an individual basis. This variation will be taken into account in more refined screening-level and quantitative drinking water exposure assessments. Different populations will have different DWLOCs. Generally, a DWLOC is calculated for each type of risk assessment used: acute, short-term, intermediate-term, chronic, and cancer.
When EECs for surface water and groundwater are less than the calculated DWLOCs, OPP concludes with reasonable certainty that exposures to thiamethoxam in drinking water (when considered along with other sources of exposure for which OPP has reliable data) would not result in unacceptable levels of aggregate human health risk at this time. Because OPP considers the aggregate risk resulting from multiple exposure pathways associated with a pesticide's uses, levels of comparison in drinking water may vary as those uses change. If new uses are added in the future, OPP will reassess the potential impacts of thiamethoxam on drinking water as a part of the aggregate risk assessment process.
1.
2.
3.
Thiamethoxam is not registered for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risks from food and water, which were previously addressed.
4.
Thiamethoxam is not registered for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risks from food and water, which were previously addressed.
5.
6.
An adequate enforcement methodology for both plants and animals is available to enforce the tolerance expression. Method AG-675 (HPLC/UV) for residues of thiamethoxam and CGA-322704 has undergone a successful independent laboratory validation (ILV) trial. The method may be requested from: Calvin Furlow, PIRIB, IRSD (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW, Washington, DC 20460; telephone number: (703) 305-5229; e-mail address: furlow.calvin@epa.gov.
As there are no Codex, Canadian, or Mexican MRLs/tolerances established for residues of thiamethoxam in plant or animal commodities, a discussion of compatibility with U.S. tolerances is not relevant at this time.
No conditions are required in conjunction with the establishment of these time-limited tolerances.
Therefore, the tolerances are established for combined residues of thiamethoxam, 3-[(2-chloro-5-thiazolyl)methyl]tetrahydro-5-methyl-
Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA of 1996, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d), as was provided in the old FFDCA sections 408 and 409. However, the period for filing objections is now 60 days, rather than 30 days.
You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-301080 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before February 20, 2001.
1.
Mail your written request to: Office of the Hearing Clerk (1900), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. You may also deliver your request to the Office of the Hearing Clerk in Rm. C400, Waterside Mall, 401 M St., SW., Washington, DC 20460. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (202) 260-4865.
2.
EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov, or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
3.
A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).
This final rule establishes time-limited tolerances under FFDCA section 408. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled
The Congressional Review Act, 5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
21 U.S.C. 321(q), (346a) and 371.
(a)
(b)
(c)
(d)
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes a time-limited tolerance for residues of clomazone in or on sugarcane. This action is in response to a crisis exemption declared by the state of Louisiana under section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) authorizing use of the pesticide on sugarcane. This regulation establishes a maximum permissible level for residues of clomazone in this food commodity. The tolerance will expire and is revoked on December 31, 2002.
This regulation is effective December 20, 2000. Objections and requests for hearings, identified by docket control number OPP-301084, must be received by EPA on or before February 20, 2001.
Written objections and hearing requests may be submitted by mail, in person, or by courier. Please follow the detailed instructions for each method as provided in Unit VII. of the
By mail: Libby Pemberton, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-9364; and e-mail address: pemberton.libby@epa.gov.
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:
This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under
1.
2.
EPA, on its own initiative, in accordance with sections 408(e) and 408 (l)(6) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, is establishing a tolerance for residues of the herbicide clomazone, in or on sugarcane at 0.05 ppm part per million (ppm). This tolerance will expire and is revoked on December 31, 2002. EPA will publish a document in the
Section 408(l)(6) of the FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under section 18 of FIFRA. Such tolerances can be established without providing notice or period for public comment. EPA does not intend for its actions on section 18 related tolerances to set binding precedents for the application of section 408 and the new safety standard to other tolerances and exemptions. Section 408(e) of the FFDCA allows EPA to establish a tolerance or an exemption from the requirement of a tolerance on its own initiative, i.e., without having received any petition from an outside party.
Section 408(b)(2)(A)(i) of the FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .” EPA has established regulations governing emergency exemptions in 40 CFR part 166.
Louisiana availed itself of a crisis exemption under FIFRA section 18 for the use of clomazone on sugarcane for control of bermudagrass. After having reviewed the submission, EPA did not concur that emergency conditions existed for this State and use under the crisis exemption ceased.
As part of its assessment of this emergency exemption, EPA assessed the potential risks presented by residues of clomazone in or on sugarcane. In doing so, EPA considered the safety standard in FFDCA section 408(b)(2), and EPA decided that the necessary tolerance under FFDCA section 408(l)(6) would be consistent with the safety standard and with FIFRA section 18. Consistent with the need to move quickly on the emergency exemption in order to ensure that the resulting food is safe and lawful, EPA is issuing this tolerance without notice and opportunity for public comment as provided in section 408(l)(6). Although this tolerance will expire and is revoked on December 31, 2002, under FFDCA section 408(l)(5), residues of the pesticide not in excess of the amounts specified in the tolerance remaining in or on sugarcane after that date will not be unlawful, provided the pesticide is applied in a manner that was lawful under FIFRA, and the residues do not exceed a level that was authorized by this tolerance at the time of that application. EPA will take action to revoke this tolerance earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe.
Because this tolerance is being approved under emergency conditions, EPA has not made any decisions about whether clomazone meets EPA's registration requirements for use on sugarcane or whether a permanent tolerance for this use would be appropriate. Under these circumstances, EPA does not believe that this tolerance serves as a basis for registration of clomazone by a State for special local needs under FIFRA section 24(c). Nor does this tolerance serve as the basis for any State to use this pesticide on this crop under section 18 of FIFRA without following all provisions of EPA's regulations implementing section 18 as identified in 40 CFR part 166. For additional information regarding the emergency exemption for clomazone, contact the Agency's Registration Division at the address provided under
EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 and a complete description of the risk assessment process, see the final rule on Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997) (FRL-5754-7) .
Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of clomazone and to make a determination on aggregate exposure, consistent with section 408(b)(2), for a time-limited tolerance for residues of clomazone in or on sugarcane at 0.05 ppm. EPA's assessment of the dietary exposures and risks associated with establishing the tolerance follows.
The dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological endpoint. However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. An UF of 100 is routinely used, 10X to account for interspecies differences and 10X for intraspecies differences.
For dietary risk assessment (other than cancer) the Agency uses the UF to calculate an acute or chronic reference dose (RfD) where the RfD is equal to the NOAEL divided by the appropriate UF (RfD = NOAEL/UF). Where an additional safety factor is retained due to concerns unique to the FQPA, this additional factor is applied to the RfD by dividing the RfD by such additional factor. The acute or chronic Population Adjusted Dose (aPAD or cPAD) is a modification of the RfD to accommodate this type of FQPA Safety Factor.
For non-dietary risk assessments (other than cancer) the UF is used to determine the level of concern (LOC). For example, when 100 is the appropriate UF (10X to account for interspecies differences and 10X for intraspecies differences) the LOC is 100. To estimate risk, a ratio of the NOAEL to exposures (margin of exposure (MOE) = NOAEL/exposure) is calculated and compared to the LOC.
The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify carcinogenic risk. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk. A Q* is calculated and used to estimate risk which represents a probability of occurrence of additional cancer cases (e.g., risk is expressed as 1x10
1.
i.
ii.
2.
The Agency uses the Generic Estimated Environmental Concentration (GENEEC) or the Pesticide Root Zone/Exposure Analysis Modeling System (PRZM/EXAMS) to estimate pesticide concentrations in surface water and SCI-GROW, which predicts pesticide concentrations in groundwater. In general, EPA will use GENEEC (a tier 1 model) before using PRZM/EXAMS (a tier 2 model) for a screening-level assessment for surface water. The GENEEC model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. GENEEC incorporates a farm pond scenario, while PRZM/EXAMS incorporate an index reservoir environment in place of the previous pond scenario. The PRZM/EXAMS model includes a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.
None of these models include consideration of the impact processing (mixing, dilution, or treatment) of raw water for distribution as drinking water would likely have on the removal of pesticides from the source water. The primary use of these models by the Agency at this stage is to provide a coarse screen for sorting out pesticides for which it is highly unlikely that drinking water concentrations would ever exceed human health levels of concern.
Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations (EECs) from these models to quantify drinking water exposure and risk as a %RfD or %PAD. Instead drinking water levels of comparison (DWLOCs) are calculated and used as a point of comparison against the model estimates of a pesticide's concentration in water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food, and from residential uses. Since DWLOCs address total aggregate exposure to clomazone they are further discussed in the aggregate risk sections below.
Based on the GENEEC and SCI-GROW models the estimated environmental concentrations (EECs) of clomazone for acute exposures are estimated to be 95 parts per billion (ppb) for surface water and 2.4 ppb for ground water. The EECs for chronic exposures are estimated to be 68 ppb for surface water and 2.4 ppb for ground water.
3.
4.
EPA does not have, at this time, available data to determine whether clomazone has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, clomazone does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that clomazone has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the final rule for Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997).
1.
ii.
iii.
iv.
• There is no dose response relationship for delayed ossification (i.e., absence of increased incidence with increase in dose);
• Low fetal/litter incidences;
• Delayed ossifications were not considered to be severe; and no visceral or skeletal malformations were seen.
• A developmental neurotoxicity (DNT) study is not required at this time.
Neurotoxicity data is not available nor is it required as the chemical is not a cholinesterase inhibitor and has shown
v.
• There is no indication of quantitative or qualitative increased susceptibility of rats or rabbits to in utero and/or postnatal exposure;
• A developmental neurotoxicity study is not required; and
• The dietary (food and drinking water) exposure assessments will not underestimate the potential exposures for infants and children (there are currently no registered residential uses).
To estimate total aggregate exposure to a pesticide from food, drinking water, and residential uses, the Agency calculates DWLOCs which are used as a point of comparison against the model estimates of a pesticide's concentration in water (EECs). DWLOC values are not regulatory standards for drinking water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food and residential uses. In calculating a DWLOC, the Agency determines how much of the acceptable exposure (i.e., the PAD) is available for exposure through drinking water e.g., allowable chronic water exposure (mg/kg/day) = cPAD - (average food + chronic non-dietary, non-occupational exposure). This allowable exposure through drinking water is used to calculate a DWLOC.
A DWLOC will vary depending on the toxic endpoint, drinking water consumption, and body weights. Default body weights and consumption values as used by the USEPA Office of Water are used to calculate DWLOCs: 2 Liters (L)/70 kg (adult male), 2L/60 kg (adult female), and 1L/10 kg (child). Default body weights and drinking water consumption values vary on an individual basis. This variation will be taken into account in more refined screening-level and quantitative drinking water exposure assessments. Different populations will have different DWLOCs. Generally, a DWLOC is calculated for each type of risk assessment used: Acute, short-term, intermediate-term, chronic, and cancer.
When EECs for surface water and groundwater are less than the calculated DWLOCs, OPP concludes with reasonable certainty that exposures to clomazone in drinking water (when considered along with other sources of exposure for which OPP has reliable data) would not result in unacceptable levels of aggregate human health risk at this time. Because OPP considers the aggregate risk resulting from multiple exposure pathways associated with a pesticide's uses, levels of comparison in drinking water may vary as those uses change. If new uses are added in the future, OPP will reassess the potential impacts of clomazone on drinking water as a part of the aggregate risk assessment process.
1.
2.
3.
4.
5.
6.
Adequate enforcement methodology (GLC/NPD or GLC/MS) are available (PAM II) for enforcement of clomazone residues. Additionally, clomazone is adequately recovered (>80%) via the FDA Multiresidue Methods of PAM I (Pestrak, 1990).
There is neither a Codex proposal nor Canadian limits for residues of clomazone in/on sugarcane. A Mexican limit of 0.05 ppm is established for clomazone
Therefore, the time limited tolerance is established for residues of clomazone, in or on sugarcane at 0.05 ppm.
Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA of 1996, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d), as was provided in the old FFDCA sections 408 and 409. However, the period for filing objections is now 60 days, rather than 30 days.
You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-301084 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before February 20, 2001.
1.
Mail your written request to: Office of the Hearing Clerk (1900), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. You may also deliver your request to the Office of the Hearing Clerk in Rm. C400, Waterside Mall, 401 M St., SW., Washington, DC 20460. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (202) 260-4865.
2.
EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov, or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
3.
A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).
This final rule establishes a time limited tolerance under FFDCA section 408. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled
The Congressional Review Act, 5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
21 U.S.C. 321(q), 346(a) and 371.
(b)* * *
Environmental Protection Agency (EPA).
Immediate final rule.
Alabama has applied to EPA for Final authorization of the changes to its hazardous waste program under the Resource Conservation and Recovery Act (RCRA). EPA has determined that these changes satisfy all requirements needed to qualify for Final authorization, and is authorizing the State's changes through this immediate final action. EPA is publishing this rule to authorize the changes without a prior proposal because we believe this action is not controversial and do not expect comments that oppose it. Unless we get written comments which oppose this authorization during the comment period, the decision to authorize Alabama's changes to their hazardous waste program will take effect . If we get comments that oppose this action, we will publish a document in the
This Final authorization will become effective on February 20, 2001 unless EPA receives adverse written comment by January 19, 2001. If EPA receives such comment, it will publish a timely withdrawal of this immediate final rule in the
Send written comments to Narindar Kumar, Chief RCRA Programs Branch, Waste Management Division, Environmental Protection Agency, The Sam Nunn Atlanta Federal Center, 61 Forsyth Street, SW, Atlanta, Georgia 30303-8960; (404) 562-8440. You can view and copy Alabama's application from 8 a.m. to 5 p.m. at the following addresses: 1400 Coliseum Blvd., Montgomery, Alabama 36130-1463, Phone number: (334) 271-7700 and EPA Region 4, Library, The Sam Nunn Atlanta Federal Center, 61 Forsyth Street, SW, Atlanta, Georgia 30303-8960, Phone number: (404) 562-8190.
Narindar Kumar, Chief, RCRA Programs Branch, Waste Management Division, Environmental Protection Agency at the above address and phone number.
States which have received final authorization from EPA under RCRA section 3006(b), 42 U.S.C. 6926(b), must maintain a hazardous waste program that is equivalent to, consistent with, and no less stringent than the Federal program. As the Federal program changes, States must change their programs and ask EPA to authorize the changes. Changes to State programs may be necessary when Federal or State statutory or regulatory authority is modified or when certain other changes occur. Most commonly, States must change their programs because of changes to EPA's regulations in 40 Code of Federal Regulations (CFR) parts 124, 260 through 266, 268, 270, 273 and 279.
We conclude that Alabama's application to revise its authorized program meets all of the statutory and regulatory requirements established by RCRA. Therefore, we grant Alabama Final authorization to operate its hazardous waste program with the changes described in the authorization application. Alabama has responsibility for permitting Treatment, Storage, and Disposal Facilities (TSDFs) within its borders (except in Indian Country) and for carrying out the aspects of the RCRA program described in its revised program application, subject to the limitations of the Hazardous and Solid Waste Amendments of 1984 (HSWA). New Federal requirements and prohibitions imposed by Federal regulations that EPA promulgates under the authority of HSWA take effect in authorized States before they are authorized for the requirements. Thus, EPA will implement those requirements and prohibitions in Alabama, including issuing permits, until the State is granted authorization to do so.
The effect of this decision is that a facility in Alabama subject to RCRA will now have to comply with the authorized State requirements instead of the equivalent Federal requirements in order to comply with RCRA. Alabama has enforcement responsibilities under its state hazardous waste program for violations of such program, but EPA retains its authority under RCRA sections 3007, 3008, 3013, and 7003, which include, among others, authority to:
• Do inspections, and require monitoring, tests, analyses or reports.
• Enforce RCRA requirements and suspend or revoke permits.
• Take enforcement actions regardless of whether the State has taken its own actions.
This action does not impose additional requirements on the regulated community because the regulations for which Alabama is being authorized by today's action are already effective, and are not changed by today's action.
EPA did not publish a proposal before today's rule because we view this as a routine program change and do not expect comments that oppose this approval. We are providing an opportunity for public comment now. In addition to this rule, in the proposed rules section of today's
If EPA receives comments that oppose this authorization, we will withdraw this rule by publishing a document in the
If we receive comments that oppose only the authorization of a particular change to the State hazardous waste program, we will withdraw that part of this rule but the authorization of the program changes that the comments do not oppose will become effective on the date specified above. The
Alabama initially received Final authorization on December 8, 1987, effective December 22, 1987, (52 FR 46466) to implement the RCRA hazardous waste management program. We granted authorization for changes to their program on November 29, 1991, effective January 28, 1992 (56 FR 60926), May 13, 1992, effective July 12, 1992 (57 FR 20422), October 21, 1992, effective December 21, 1992 (57 FR 47996), March 17, 1993, effective May 17, 1993 (58 FR 20422), September 24, 1993, effective November 23, 1993 (58 FR 49932), February 1, 1994, effective April 4, 1994 (59 FR 4594), November 14, 1994, effective January 13, 1995 (59 FR 56407), August 14, 1995, effective October 13, 1995 (60 FR 41818), February 14, 1996, effective April 15, 1996 (61 FR 5718), April 25, 1996, effective June 24, 1996 (61 FR 5718), November 21, 1997 effective February 10, 1998 (62 FR 62262).
On October 28, 1999, and on March 19, 2000, Alabama submitted final complete program revision applications, seeking authorization of their changes in accordance with 40 CFR 271.21. We now make an immediate final decision, subject to receipt of written comments that oppose this action, that Alabama's hazardous waste program revision satisfies all of the requirements necessary to qualify for Final authorization. Therefore, we grant Alabama Final authorization for the following program changes which were promulgated on July 1, 1995-June 30, 1996 and on July 1, 1996-June 30, 1997:
We consider the following State requirement to be more stringent than the Federal requirements:
• 335-14-9-.03, Alabama has adopted 40 CFR 268 by reference exclusive of 268.1(c)(3). The State is more stringent by excluding disposal of waste into nonhazardous or hazardous injection wells.
EPA cannot delegate the Federal requirements at 61 FR 16290-16316, “Imports and Exports of Hazardous” (checklist 152). Although Alabama has adopted these requirements verbatim from the Federal regulations at 335-14-2-.01(6)(a)5, 335-14-3-.01(1)(d), 335-14-3-.01(1)(e)-(h), 335-14-3-.05(4)(b), 335-14-3-.05(7)(b), 335-14-3-.05(9)(a)(9)(b), 335-14-3-.090(1)(a), 335-14-3-.09(1)(b), 335-14-3-.09(2)(2)(a-l), 335-14-.09(3)(a), 335-14-3-.09(3)(a)1, 335-14-3-.09(3)(a)1.(i)-(iii), 335-14-3-.09(3)(a)2, 335-14-3-.09(3)(a)2(i-ii), 335-14-3-.09(3)(a)3-4, 335-14-3-.09(3)(b), 335-14-3-.09(4)(b-e), 335-14-3-.09(5)(a)-(e), 335-14-3-.09(6)(a-g), 335-14-3-.09(7)(a)(b), 335-14-3-.0(8)(a-c), 335-14-3-.09(8)(c)1.(iii)2, 335-14-3-.09(9)(10)(a-e), 335-14-5-.02(3)(a)1, 2(e)335-14-6-.02(3)(a)1, 2, (2)(e), 335-14-7-.06(1)(b)2, 3, 335-14-11-.02(11), 335-14-11-.03(11), 335-14-11-.04(7), 335-14-11-.06(1), 335-14-11-.06(1)(d), EPA will continue to implement those requirements.
Alabama will issue permits for all the provisions for which it is authorized and will administer the permits it issues. EPA will continue to administer any RCRA hazardous waste permits or portions of permits which we issued prior to the effective date of this authorization until the permits expire or are terminated. We will not issue any more new permits or new portions of permits for the provisions listed in the Table above after the effective date of this authorization. EPA will continue to implement and issue permits for HSWA requirements for which Alabama is not yet authorized.
Alabama is not authorized to carry out its hazardous waste program in Indian country within the State, which includes the Poarch Band of Creek Indians. Therefore, this action has no effect on Indian country. EPA will continue to implement and administer the RCRA program in these lands.
Codification is the process of placing the State's statutes and regulations that comprise the State's authorized hazardous waste program into the Code of Federal Regulations. We do this by referencing the authorized State rules in 40 CFR part 272. We reserve the amendment of 40 CFR part 272, subpart B for this authorization of Alabama's program until a later date.
The Office of Management and Budget has exempted this action from the requirements of Executive Order 12866 (58 FR 51735, October 4, 1993), and therefore this action is not subject to review by OMB. This action authorizes state requirements for the purpose of RCRA 3006 and imposes no additional requirements beyond those imposed by state law. Accordingly, I certify that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
Under RCRA 3006(b), EPA grants a State's application for authorization as long as the State meets the criteria required by RCRA. It would thus be inconsistent with applicable law for EPA, when it reviews a State authorization application, to require the use of any particular voluntary consensus standard in place of another standard that otherwise satisfies the requirements of RCRA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Congressional Review Act, 5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Confidential business information, Hazardous waste, Hazardous waste transportation, Indian lands, Intergovernmental relations, Penalties, Reporting and record keeping requirements.
This action is issued under the authority of sections 2002(a), 3006 and 7004(b) of the Solid Waste Disposal Act as amended 42 U.S.C. 6912(a), 6926, 6974(b).
Federal Communications Commission.
Final rule.
This document continues the Commission's wide-ranging reform of the Mass Media Bureau's radio technical rules. These rule modifications were proposed as part of a broad-based initiative, undertaken in conjunction with the Commission's 1998 biennial regulatory review, to streamline the Mass Media Bureau radio technical rules, and are intended to speed the introduction of new and improved broadcast services to the public, provide greater flexibility to broadcasters to improve existing services, and reduce regulatory burdens on applicants.
Effective January 19, 2001.
Peter H. Doyle, Audio Services Division, Mass Media Bureau (202) 418-2700.
This is a summary of the Commission's
In this
To be considered fully spaced and to be able to use maximum permissible facilities for their station class, the transmitter sites for all non-reserved band FM stations and certain reserved band FM stations are required to meet the minimum distance separation requirements of 47 CFR 73.207. However, in order to allow site location flexibility, some of these FM stations are permitted to utilize short-spaced transmitter sites, provided that the short-spaced station meets the less
FM stations in Puerto Rico and the U.S. Virgin Islands may use short-spaced transmitter sites so long as the facilities proposed at the short-spaced site do not extend the predicted 1 mV/m contour of the station toward the 1 mV/m contour of any short-spaced station. Due to the varying terrain on the islands, this requirement unnecessarily restricts site location for many FM stations in Puerto Rico and the U.S. Virgin Islands. In order to allow FM stations in Puerto Rico and the U.S. Virgin Islands the same site location flexibility as mainland U.S. FM stations, 47 CFR 73.215 is modified to eliminate the provision prohibiting extension of the short-spaced FM station's predicted 1 mV/m contour toward the 1 mV/m contour of any short-spaced FM station, and to use the contour protection method to show that proposed facilities at a short-spaced site do not cause prohibited contour overlap to an affected short-spaced station.
Class C FM stations are permitted maximum facilities of 100 kilowatts ERP and 600 meters antenna radiation center HAAT (or the equivalent thereof), and are required to operate using minimum facilities of 100 kilowatts ERP and 300 meters antenna radiation center HAAT (or the equivalent thereof). The Class C FM station minimum distance separation requirements of 47 CFR 73.207 were derived on the basis of maximum permissible Class C facilities. Recent studies show that greater than one-half of the existing Class C FM stations operate with antenna radiation center HAATs between 300 meters and 450 meters, far less than the maximum 600 meters that is permitted for the class. Thus, the minimum distance separation requirements of 47 CFR 73.207 overprotect the actual service areas of most Class C FM stations, and this overprotection may preclude the introduction of new and/or improved FM service to the public. In order to remedy this overprotection of existing FM Class C assignments and to allow the public to fully utilize scarce spectrum resources, the Commission has modified 47 CFR 73.211 and created a new FM station class, Class C0, with required minimum ERP of 100 kilowatts and allowable antenna radiation center HAAT of between 300 and 450 meters; and has modified 47 CFR 73.207 to specify minimum distance separation requirements for the new FM station class that are less than those required for a Class C FM station. In concert with the creation of the new FM Class C0, the Commission has modified 47 CFR 73.211 and increased the minimum required antenna radiation center HAAT for FM Class C to 451 meters.
Existing substandard Class C FM stations,
The correction of geographic coordinates for the transmitter site of a licensed broadcast station currently requires the filing of a construction permit application and a subsequent license application to cover the construction permit regardless of the magnitude of the correction. Licensed stations proposing transmitter site geographic coordinate corrections of three or fewer seconds in latitude and/or longitude may now, pursuant to amended 47 CFR 73.1690, file only a license application, provided that the transmitter site location correction does not create a new short spacing or worsen an existing short spacing, and that the licensee has obtained the required Federal Aviation Administration clearance and Commission antenna structure registration for the corrected transmitter site location.
A request for reduction of ERP for FM translator stations and FM booster stations currently requires the filing of a construction permit application and a subsequent license application to cover the construction permit. A reduction in ERP would not increase the potential for interference caused by an FM translator or booster station, and there are no principal community coverage requirements for FM translator and booster stations. As a result, the Commission modified 47 CFR 74.1204 to permit a decrease in the ERP of an FM translator or booster station by the
a. The license application may not propose elimination of authorized horizontally polarized ERP;
b. The height of the station's antenna radiation center is not increased by more than two meters nor decreased by more than four meters from its authorized value; and
c. The station is not currently authorized to operate with separate horizontal and vertical antennas mounted at different heights on the supporting structure.
Currently, the second-adjacent channel interference ratio for short-spaced FM stations specified in 47 CFR 73.215 is 40 decibel (dB) higher than the protected signal strength, while the second-adjacent channel interference ratio for NCE FM stations, specified in 47 CFR 73.509, and FM translator stations, specified in 47 CFR 74.1204, is 20 dB higher than the protected signal strength. Since experience has proven that the 40 dB interference ratio more accurately predicts the areas where second-adjacent channel interference might occur within a station's protected contour, a 40 dB second-adjacent channel interference ratio is adopted for both NCE FM stations and FM translator stations, and 47 CFR 73.509 and 47 CFR 74.1204 are modified accordingly.
At the current time, there are no principal community coverage requirements for NCE FM stations. Absent such requirements, an NCE FM station may be licensed or relocated without any assurance that it would provide service to its principal community. In order to avoid such loss of service to the public, the Commission has adopted 47 CFR 73.515 which requires NCE FM stations to provide a predicted 1 mV/m (60 dBμ) or greater signal strength to at least 50 percent of the population or area within the station's principal community. This new NCE FM principal community coverage requirement applies not only to all new NCE FM applications, but also to all NCE FM applications pending at the Commission on the release date of this Order. NCE FM applicants will be permitted to file minor curative amendments to pending NCE FM applications to bring them into compliance with the new NCE FM principal community coverage requirement.
The action contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose new or modified reporting and recordkeeping requirements or burdens on the public. Implementation of these new or modified reporting and recordkeeping requirements will be subject to approval by the Office of Management and Budget as prescribed by the Act.
The Regulatory Flexibility Act of 1980, as amended (RFA), requires that a regulatory flexibility analysis be prepared for rulemaking proceedings, unless the agency certifies that “the rule will not have a significant economic impact on a substantial number of small entities.” The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).
In this
The
The
Finally, the
In sum, the changes we are adopting are small and will generally have minor, but positive, effects on radio licensees, including small entities that can take advantage of these streamlining rule changes. In addition, the number of small entities affected by these modifications is not substantial. As noted above, there is no economic effect on the vast majority of radio stations as a result of most of the rule changes adopted by the Commission in this Order. Only two changes could have an adverse economic effect on radio stations: The costs associated with a facility modification to preserve full Class C status; and the potential costs associated with restricting the location of NCE FM station technical facilities to those sites that would ensure adequate signal coverage of the station's community of license. As stated above, however, none of these potential economic impacts are expected to be significant.
Therefore, we certify that the requirements of this
Authority for issuance of the
Administrative practice and procedure, Radio.
Radio.
47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309.
The addition and revisions to § 1.420 read as follows:
The reclassification of a Class C station in accordance with the procedure set forth in Note 4 to § 73.3573 may be initiated through the filing of an original petition for amendment of the FM Table of Allotments. The Commission will notify the affected Class C station licensee of the proposed reclassification by issuing a notice of proposed rule making, except that where a triggering petition proposes an amendment or amendments to the FM Table of Allotments in addition to the proposed reclassification, the Commission will issue an order to show cause as set forth in Note 4 to § 73.3573, and a notice of proposed rule making will be issued only after the reclassification issue is resolved. Triggering petitions will be dismissed upon the filing, rather than the grant, of an acceptable construction permit application to increase antenna height to at least 451 meters HAAT by a subject Class C station.
47 U.S.C. 154, 303, 334 and 336.
(b) * * *
(1) * * *
(a) The rules applicable to a particular station, including minimum and maximum facilities requirements, are determined by its class. Possible class designations depend upon the zone in which the station's transmitter is located, or proposed to be located. The zones are defined in § 73.205. Allotted station classes are indicated in the Table of Allotments, § 73.202. Class A, B1 and B stations may be authorized in Zones I and I-A. Class A, C3, C2, C1, C0 and C stations may be authorized in Zone II.
(b) * * *
(3) * * *
(iv) If this distance is greater than 72 km and less than or equal to 83 km, the station is Class C0.
(v) If this distance is greater than 83 km and less than or equal to 92 km, the station is Class C.
(a) * * *
(1) * * *
(vii) The minimum ERP for Class C and C0 stations is 100 kW.
(2) Class C0 stations must have an antenna height above average terrain (HAAT) of at least 300 meters (984 feet). Class C stations must have an antenna height above average terrain (HAAT) of at least 451 meters (1480 feet).
(b) * * *
(1) * * *
(d)
(a) * * *
(4) Protected and interfering contours (in dBu) for stations in Puerto Rico and the U.S. Virgin Islands are as follows:
(e) * * *
(a) * * *
The transmitter location shall be chosen so that, on the basis of effective radiated power and antenna height above average terrain employed, a minimum field strength of l mV/m (60 dBu) will be provided over at least 50 percent of its community of license or reach 50 percent of the population within the community.
(a) * * *
(1) * * *
(b) * * *
(1) * * *
(b) * * *
(2) Any change in station geographic coordinates, including coordinate corrections of more than 3 seconds latitude and/or 3 seconds longitude. FM and TV directional stations must also file a construction permit application for any move of the antenna to another tower structure located at the same coordinates.
(c) * * *
(11) Correction of geographic coordinates where the change is 3
A Class C station operating with antenna height above average terrain (“HAAT”) of less than 451 meters is subject to reclassification as a Class C0 station upon the filing of a triggering application for construction permit that is short-spaced to such a Class C station under § 73.207 but would be fully spaced to such a station considered as a Class C0 assignment. Triggering applications may utilize § 73.215. Triggering applications must certify that no alternative channel is available for the proposed service. Available alternative frequencies are limited to frequencies that the proposed service could use at the specified antenna location in full compliance with the distance separation requirements of § 73.207, without any other changes to the FM Table of Allotments. Copies of a triggering application and related pleadings must be served on the licensee of the affected Class C station. If the staff concludes that a triggering application is acceptable for filing, it will issue an order to show cause why the affected station should not be reclassified as a Class C0 station The order to show cause will provide the licensee 30 days to express in writing an intention to seek authority to modify the subject station's technical facilities to minimum Class C HAAT or to otherwise challenge the triggering application. If no such intention is expressed and the triggering application is not challenged, the subject station will be reclassified as a Class C0 station, and processing of the triggering application will be completed. If an intention to modify is expressed, an additional 180-day period will be provided during which the Class C station licensee must file an acceptable construction permit application to increase antenna height to at least 451 meters HAAT. Upon grant of such a construction permit application, the triggering application will be dismissed. Class C station licensees must serve on triggering applicants copies of any FAA submissions related to the application grant process. If the construction is not completed as authorized, the subject Class C station will be reclassified automatically as a Class C0 station. The reclassification procedure also may be initiated through the filing of an original petition for rule making to amend the FM Table of Allotments as set forth in Note 2 to § 1.420(g).
(d) A party in interest may file a Petition to Deny any application that proposes reclassification of a Class C authorization to Class C0 not later than 30 days after issuance of an order to show cause by the Commission notifying the affected licensee of the proposed reclassification.
47 U.S.C. 154, 303, 307, and 554.
(a) * * *
(1) Commercial Class B FM Stations (Protected Contour: 0.5 mV/m)
(2) Commercial Class B1 FM Stations (Protected Contour: 0.7 mV/m)
(3) All Other Classes of FM Stations (Protected Contour: 1 mV/m)
(b) * * *
(7) Any increase of authorized effective radiated power. FM translator and booster stations may decrease ERP on a modification of license application provided that exhibits are included to
(i) The license application may not propose to eliminate the authorized horizontally polarized ERP, if a horizontally polarized ERP is currently authorized;
(ii) The installed height of the antenna radiation center is not increased by more than two meters nor decreased by more than four meters from the authorized height for the antenna radiation center; and
(iii) The station is not presently authorized with separate horizontal and vertical antennas mounted at different heights. Use of separate horizontal and vertical antennas requires a construction permit before implementation or changes.
Environmental Protection Agency (EPA).
Direct final rule.
EPA is taking direct final action on amending the EPA Acquisition Regulation (EPAAR) to remove contract quality requirements which have been superseded by requirements in the Federal Acquisition Regulation (FAR) and to incorporate a minor miscellaneous technical amendment.
This rule is effective on March 20, 2001 without further notice, unless EPA receives adverse comments by January 19, 2001. If we receive adverse comments, we will, before the rule's effective date, publish a timely withdrawal in the
Written comments should be submitted to the contact listed below at the following address: U.S. Environmental Protection Agency, Office of Acquisition Management (3802R), 1200 Pennsylvania Avenue, NW, Washington, DC 20460. Comments and data may also be submitted electronically by sending electronic mail (e-mail) to:
Linda Avellar, U.S. EPA, Office of Acquisition Management, (3802R), 1200 Pennsylvania Avenue, NW, Washington, D.C. 20460, Telephone: (202) 564-4356.
When a contract requires compliance with higher-level quality standards, EPA will use the FAR clause at 52.246-11 and normally select ANSI/ASQC E4, Specifications and Guidelines for Environmental Data Collection and Environmental Technology Programs, as its contract quality standard. EPA may tailor the standard, as authorized by FAR 52.246-11, to ensure that contracts conform to appropriate contract quality standards. In addition, the EPA contracting officer, in consultation with quality assurance personnel, may determine that other voluntary consensus standards (e.g., ISO 9001:2000, Quality Management Systems—Requirements) apply to a specific contract.
This standard recommends using a tiered approach to a quality system. It recommends first documenting each organization-wide quality system in a
1. Documentation of the organization quality system (usually called a Quality Management Plan) which should be approved prior to the contractor initiating environmental work, and
2. Documentation of the application of quality assurance and quality control activities to technical activity-specific efforts (usually called a Quality Assurance Project Plan) which should be approved prior to the contractor initiating environmental data collection. Quality Assurance Project Plans may be generic (for contracts covering multiple projects with similar activities) or project/contract-specific.
This standard as tailored will also apply to the design, construction, and operation of environmental technology used for pollution or effluent control and abatement, waste treatment and remediation, the collection of environmental research data, and other related applications.
• The EPAAR requirement for a Quality Assurance Program Plan will be replaced by the requirement for a Quality Management Plan (or equivalent) as described in a solicitation and contract. Both document an organization's quality system.
• The EPAAR requirement for a Quality Assurance Project Plan will remain the same but its application (whether generic, project-specific, or contract-wide) will be defined in a solicitation and contract.
Both of the above documents were released for peer review in October 1998 and are now available in a “Interim Final” version from the Quality Staff of the EPA Office of Environmental Information. These documents will be finalized on the effective date of this rule.
Copies of these documents can be obtained by calling (202) 564-6830, by requesting via E-mail to
This direct final rule is not a significant regulatory action for the purposes of Executive Order 12866; therefore, no review is required by the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB).
The Paperwork Reduction Act does not apply because this direct final rule does not contain information collection requirements that require the approval of OMB under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501
The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.
For purposes of assessing the impact of today's rule on small entities, small entity is defined as: (1) A small business that meets the definition of a small business found in the Small Business Act and codified at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.
After considering the economic impacts of today's direct final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant
Although this direct final rule will not have a significant economic impact on small entities, EPA has still tried to reduce the impact of its quality requirements on small entities by applying a graded approach to the implementation of these quality requirements. This means that managerial quality controls are applied according to the scope of the contract and/or the intended use of the outputs from the contract. While large contracts may require a contractor to develop comprehensive quality system documentation, smaller contracts with relatively less significant impacts generally only require limited documentation. Thus, small entities will normally only provide limited quality-related documentation to EPA. We have therefore concluded that this direct final rule and EPA's quality contract requirements will not have a significant economic impact on small entities.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess their regulatory actions on State, local, and Tribal governments, and the private sector. This direct final rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and Tribal governments, in the aggregate, or the private sector in one year. Any private sector costs for this action relate to paperwork requirements and associated expenditures that are far below the level established for UMRA applicability. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.
Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is determined to be economically significant as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.
This rule is not subject to Executive Order 13045 because it is not an economically significant rule as defined by Executive Order 12866, and because it does not involve decisions on environmental health or safety risks.
Executive Order 13132 entitled “Federalism” (64 FR 43255, August 10, 1999) requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”
Under section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law, unless the Agency consults with State and local officials early in the process of developing the proposed regulation.
This direct final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This direct final rule removes contract quality requirements and clauses from the EPAAR. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.
Under Executive Order 13084, EPA may not issue a regulation that is not required by statute that significantly or uniquely affects the communities of Indian Tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by Tribal governments, or EPA consults with those governments. If EPA complies by consulting, Executive Order 13084 requires EPA to provide to the OMB, in a separately identified section of the preamble to the rule, a description of the extent of EPA's prior consultation with representatives of affected Tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires EPA to develop an effective process permitting elected and other representatives of Indian Tribal government “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.”
Today's rule does not significantly or uniquely affect the communities of Indian Tribal governments. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.
EPA will use voluntary consensus standards, as directed by section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note), in its procurement activities when it specifies higher-level contract quality requirements. The specification of contract quality requirements involves technical standards. As permitted by FAR 46.202-4, 46.311, and 52.246-11, EPA generally plans to use the most current version of ANSI/ASQC E4, a voluntary consensus standard, for this purpose. (See instructions above about how to obtain copies of ANSI/ASQC E4). However, as also authorized by the relevant FAR sections, EPA may decide that other voluntary consensus standards apply to specific contracts. Either way, EPA will be complying with the NTTAA. The NTTAA directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rules report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the
The provisions of this regulation are issued under 5 U.S.C. 301; Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C. 486(c); and 41 U.S.C. 418b.
Government procurement.
Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C. 486(c); and 41 U.S.C. 418b.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
NMFS removes an existing closure to commercial groundfish fishing with trawl gear within critical habitat designated for Steller sea lions in the exclusive economic zone (EEZ) off Alaska west of 144° W. long. and closes this area to commercial fishing for Pacific cod through December 31, 2000. The removal of the existing closure is consistent with the December 5, 2000, Order of the United States District Court for the Western District of Washington. The new closure is intended to ensure that Steller sea lions are adequately protected based on conclusions in a biological opinion issued November 30, 2000.
Effective December 14, 2000 except that § 679.22(k) is effective December 14, 2000 through December 31, 2000.
Copies of the Endangered Species Act-Section 7 Consultation Biological Opinion and Incidental Take Statement on Authorization of the Bering Sea and Aleutian Islands groundfish fisheries based on the Fishery Management Plan for the Groundfish Fishery of the Bering Sea and Aleutian Islands Area and Authorization of the Gulf of Alaska groundfish fisheries based on the Fishery Management Plan for Groundfish of the Gulf of Alaska, including the reasonable and prudent alternative (BiOp), may be obtained by contacting the Alaska Region, NMFS, P.O. Box 21668, Juneau, AK, 99802, or Room 401 of the Federal Building, 709 West 9th Street, Juneau, AK. The 2000 BiOp is also available on the Alaska Region home page at http://www.fakr.noaa.gov.
John Lepore, 907-586-7228 or john.lepore@noaa.gov.
NMFS manages the U.S. groundfish fisheries in the EEZ of the Bering Sea and Aleutian Islands Management Area (BSAI) and Gulf of Alaska (GOA) under the fishery management plans (FMPs) for groundfish in the respective areas. The North Pacific Fishery Management Council (Council) prepared, and NMFS approved, the FMPs under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801
NMFS also has statutory authority to promulgate regulations governing the groundfish fisheries under the Endangered Species Act (ESA), 16 U.S.C. 1531
On August 7, 2000, the United States District Court for the Western District of Washington issued an order that granted a motion for a partial injunction on the North Pacific groundfish fisheries.
To comply with the Court’s August 7, 2000, Order, NMFS, pursuant to the ESA, issued an interim rule prohibiting fishing for groundfish with trawl gear in Steller sea lion critical habitat (65 FR 49766, August 15, 2000). The critical habitat areas closed by the interim rule were defined in regulations codified at 50 CFR 226.202, and in Tables 1 and 2 to 50 CFR part 226.
On November 30, 2000, NMFS issued a BiOp that is comprehensive in scope and considers the fisheries and the overall management framework established by the BSAI and GOA FMPs. After analyzing the cumulative, direct and indirect effects of the groundfish fisheries authorized by the BSAI and GOA FMPs on listed species, NMFS concluded in the BiOp that the fisheries
On December 5, 2000, the United States District Court for the Western District of Washington issued an order dissolving the injunction issued on August 7, 2000. Based on that Order, NMFS revokes the current closure of all groundfish trawl fishing in designated critical habitat that was published on August 15, 2000 (65 FR 49766). However, because the BiOp concluded that the fisheries for Pacific cod, along with pollock and Atka mackerel, as currently prosecuted, jeopardize the continued existence of the western population of Steller sea lions and adversely modify their critical habitat, NMFS is prohibiting commercial fishing for Pacific cod in designated critical habitat through December 31, 2000. Commercial fisheries for pollock and Atka mackerel are not included in this closure because fisheries for those species already are prohibited through December 31, 2000, pursuant to other regulatory requirements.
The new closure, promulgated under the authority of section 11(f) of the ESA, prohibits all Pacific cod fishing through December 31, 2000, as the term fishing is defined at 16 U.S.C. 1802(15), authorized pursuant to the FMPs, within Steller sea lion critical habitat listed in Tables 1 and 2 to 50 CFR part 226 in federally regulated waters west of 144° W. long. and the three special aquatic foraging areas defined as critical habitat at 50 CFR 226.202(c).
The Assistant Administrator for Fisheries, NOAA (AA), has determined that this rule is consistent with the Court’s Order and is authorized by the ESA.
Because prior notice and opportunity for public comment are not required for this rule by 5 U.S.C. 553, or any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601
This final rule has been determined to be not significant under section 3(f)(1) of E.O. 12866.
The AA, under 5 U.S.C. 553(b)(B), finds that there is good cause to waive providing prior notice and an opportunity for public comment for the removal of the existing closure. This removal stems from a United States District Court Order dissolving, as of December 5, 2000, the injunction requiring the closure. Delaying this action to provide prior notice and opportunity for comment would cause unnecessary economic harm to the affected fishermen and thus would be contrary to the public interest. Because this action relieves a restriction, under 5 U.S.C. 553(d)(1), it is not subject to a delay in effective date.
The AA, under 5 U.S.C. 553(b)(B), finds there is good cause to waive providing prior notice and an opportunity for public comment for the portion of this action that implements a new closure. An immediate new closure is necessary to protect endangered Steller sea lions and it would be contrary to the public interest to delay this action to provide prior notice and an opportunity for comment. For this same reason, the AA, under 5 U.S.C. 553(d)(3), finds there is good cause to waive the 30-day delay in the effective date otherwise required for the new closure.
Alaska, Fisheries, Recordkeeping and reporting requirements.
16 U.S.C. 773
(k) Closure of critical habitat. (Applicable through December 31, 2000.) All Pacific cod fishing, as the term fishing is defined at 16 U.S.C. 1802(15) and authorized pursuant to the Fishery Management Plans for the Bering Sea/Aleutian Islands and the Gulf of Alaska, within Steller sea lion critical habitat within the EEZ and west of 144° W. long., as such critical habitat is defined by regulations codified at 50 CFR 226.202 and Tables 1 and 2 to 50 CFR part 226, is prohibited.
Federal Aviation Administration (FAA), DOT.
Final special condition; request for comments.
This special condition is issued for Eurocopter France (Eurocopter) Model EC-130 helicopters. These helicopters will have novel or unusual design features associated with the installation of electronic systems that perform critical functions. The applicable airworthiness regulations do not contain adequate or appropriate safety standards to protect systems that perform critical control functions or provide critical displays from the effects of high-intensity radiated fields (HIRF). This special condition contains the additional safety standards that the Administrator considers necessary to ensure that critical functions of systems will be maintained when exposed to HIRF.
The effective date of this special condition is December 7, 2000. Comments must be received on or before February 5, 2001.
Comments on this special condition may be mailed in duplicate to: Federal Aviation Administration, Office of the Regional Counsel, Attention: Rules Docket No. SW009, Fort Worth, Texas 76193-0007, or delivered in duplicate to the Office of the Regional Counsel at 2601 Meacham Blvd., Fort Worth, Texas 76137. Comments must be marked: Rules Docket No. SW009. Comments may be inspected in the Rules Docket weekdays, except Federal holidays, between 8:30 a.m. and 4:00 p.m.
Jorge Castillo, FAA, Rotorcraft Directorate, Rotorcraft Standards, Fort Worth, Texas 76193-0110; telephone (817) 222-5127, fax (817) 222-5961.
The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay issuance of the approval design and thus delivery of the affected aircraft. In addition, notice and opportunity for prior public comment are unnecessary since the substance of this special condition has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making this special condition effective upon issuance.
Interested persons are invited to submit such written data, views, or arguments as they may desire. Communications should identify the regulatory docket or special condition number and be submitted in duplicate to the address specified above. All communications received on or before the closing date for comments will be considered. The special condition may be changed in light of the comments received. All comments received will be available in the Rules Docket for examination by interested persons. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket. Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this special condition must include a self-addressed, stamped postcard on which the following statement is made: “Comments to Rules Docket No. SW009.” The postcard will be date stamped and returned to the commenter.
Eurocopter France submitted an application for Type Validation of Eurocopter Model EC-130 helicopters through the French Direction Generale de l'Aviation Civile (DGAC) on December 22, 1999. The Eurocopter Model EC-130 helicopters are single engine, Normal Category helicopters that are a derivative of Eurocopter Model AS-350B3 helicopters, which achieved FAA Type Certification on May 7, 1998 (reference Type Certificate Data Sheet H9EU). The main difference between Eurocopter Model EC-130 helicopters and Eurocopter Model AS-350B3 helicopters include:
• A gross weight increase from 2250 kg to 2300 kg;
• Enlarged fuselage structure utilizing standard Eurocopter Model EC-120B helicopter components;
• A Eurocopter Model EC-120B helicopter-type landing gear;
• A Eurocopter Model EC-135 helicopter-type fenestron anti-torque system; and
• An increase in the standard seating capacity from six to seven (1 pilot plus 6 passengers).
Under the provisions of 14 CFR 21.17, Eurocopter must show that Model EC-130 helicopters meet the applicable provisions of the regulations as listed below:
• 14 CFR 21.29;
• 14 CFR part 27, Amendment 27-1 through Amendment 27-32, except 14 CFR part 27.952 is not adopted;
• 14 CFR part 36, Appendix H through the latest amendment in effect at the time of type certification; and
• Any special conditions, exemptions, and equivalent safety findings deemed necessary.
In addition, the certification basis includes certain special conditions and equivalent safety findings that are not relevant to this special condition.
If the Administrator finds that the applicable airworthiness regulations do not contain adequate or appropriate safety standards for these helicopters because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.
In addition to the applicable airworthiness regulations and special conditions, Eurocopter Model EC-130 helicopters must comply with the noise certification requirements of 14 CFR part 36; and the FAA must issue a finding of regulatory adequacy pursuant to § 611 of Public Law 92-574, the “Noise Control Act of 1972.”
As appropriate, special conditions, as defined in § 11.19, are issued in accordance with § 11.38 and become part of the type certification basis in accordance with § 21.17(a)(2).
Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, the special conditions would also apply to the other model under the provisions of § 21.101(a)(1).
Eurocopter Model EC-130 helicopters will incorporate the following novel or unusual design features: electrical, electronic, or a combination of electrical electronic (electrical/electronic) systems that will perform critical control functions or display critical information, such as electronic flight instruments that display critical information required for the continued safe flight and landing of the helicopter during operation in Instrument Meteorological Conditions (IMC); and Full Authority Digital Engine Control (FADEC) that will perform engine control functions that are critical to the continued safe flight and landing of the helicopter during Visual Flight Rules (VFR) and Instrument Flight Rules (IFR) operations.
Eurocopter Model EC-130 helicopters, at the time of application, were identified as incorporating one and possibly more electrical/electronic systems, such as electronic flight instruments and FADEC. After the design is finalized, Eurocopter will provide the FAA with a preliminary hazard analysis that will identify any other critical functions required for safe flight and landing that are performed by the electrical/electronic systems.
Recent advances in technology have given rise to the application in aircraft designs of advanced electrical/electronic systems that perform critical control functions or provide critical displays. These advanced systems respond to the transient effects of induced electrical current and voltage caused by HIRF incident on the external surface of the helicopter. These induced transient currents and voltages can degrade the performance of the electrical/electronic systems by damaging the components or by upsetting the systems' functions.
Furthermore, the electromagnetic environment has undergone a transformation not envisioned by the current application of § 27.1309(a). Higher energy levels radiate from operational transmitters currently used for radar, radio, and television. Also, the number of transmitters has increased significantly.
Existing aircraft certification requirements are inappropriate in view of these technological advances. In addition, the FAA has received reports of some significant safety incidents and accidents involving military aircraft equipped with advanced electrical/electronic systems when they were exposed to electromagnetic radiation.
The combined effects of the technological advances in helicopter design and the changing environment have resulted in an increased level of vulnerability of the electrical/electronic systems required for the continued safe flight and landing of the helicopter. Effective measures to protect these helicopters against the adverse effects of exposure to HIRF will be provided by the design and installation of these systems. The following primary factors contributed to the current conditions: (1) Increased use of sensitive electronics that perform critical functions; (2) reduced electromagnetic shielding afforded helicopter systems by advanced technology airframe materials; (3) adverse service experience of military aircraft using these technologies; and (4) an increase in the number and power of radio frequency emitters and the expected increase in the future.
The FAA recognizes the need for aircraft certification standards to keep pace with the developments in technology and environment and, in 1986, initiated a high priority program to (1) determine and define electromagnetic energy levels; (2) develop and describe guidance material for design, test, and analysis; and (3) prescribe and promulgate regulatory standards.
The FAA participated with industry and airworthiness authorities of other countries to develop internationally recognized standards for certification.
The FAA and airworthiness authorities of other countries have identified two levels of the HIRF environment that a helicopter could be exposed to—one environment for VFR operations and a different environment for IFR operations. While the HIRF rulemaking requirements are being finalized, the FAA is adopting a special condition for the certification of aircraft that employ electrical/electronic systems that perform critical control functions or provide critical displays. The accepted maximum energy levels that civilian helicopter system installations must withstand for safe operation are based on surveys and analysis of existing radio frequency emitters. This special condition will require the helicopters' electrical/electronic systems and associated wiring to be protected from these energy levels. These external threat levels are believed to represent the exposure for a helicopter operating under VFR or IFR.
Compliance with HIRF requirements will be demonstrated by tests, analysis, models, similarity with existing systems, or a combination of these methods. Service experience alone will not be acceptable since such experience in normal flight operations may not include an exposure to HIRF. Reliance on a system with similar design features for redundancy as a means of protection against the effects of external HIRF is generally insufficient because all elements of a redundant system are likely to be concurrently exposed to the radiated fields.
This special condition will require the aircraft-installed systems that perform critical control functions or provide critical displays to meet certain standards based on either a defined HIRF environment or a fixed value using laboratory tests. Control system failures and malfunctions can more directly and abruptly contribute to a catastrophic event than display system failures and malfunctions. Therefore, it is considered appropriate to require more rigorous HIRF verification methods for critical control systems than for critical display systems.
The applicant may demonstrate that the operation and operational capabilities of the installed electrical/electronic systems that perform critical functions are not adversely affected when the aircraft is exposed to the defined HIRF test environment. The FAA has determined that the test environment defined in Table 1 is acceptable for critical control functions in helicopters. The test environment defined in Table 2 is acceptable for critical display systems in helicopters.
The applicant may also demonstrate, using a laboratory test, that the electrical/electronic systems that perform critical control functions or provide critical displays can withstand a peak electromagnetic field strength in a frequency range of 10 KHz to 18 GHz. If a laboratory test is used to show compliance with the defined HIRF environment, no credit will be given for signal attenuation due to installation. A level of 100 volts per meter (v/m) is appropriate for critical display systems. A level of 200 v/m is appropriate for critical control functions. Laboratory test levels are defined according to RTCA/DO-160D Section 20 Category W (100 v/m and 150 mA) and Category Y (200 v/m and 300 mA). As stated in DO-160D Section 20, the test levels are defined as the peak of the root means squared (rms) envelope. As a minimum,
Applicants must perform a preliminary hazard analysis to identify electrical/electronic systems that perform critical functions. The term “critical” means those functions whose failure would contribute to or cause an unsafe condition that would prevent the continued safe flight and landing of the helicopters. The systems identified by the hazard analysis as performing critical functions are required to have HIRF protection. A system may perform both critical and non-critical functions. Primary electronic flight display systems and their associated components perform critical functions such as attitude, altitude, and airspeed indications. HIRF requirements would apply only to the systems that perform critical functions, including control and display.
Acceptable system performance would be attained by demonstrating that the critical function components of the system under consideration continue to perform their intended function during and after exposure to required electromagnetic fields. Deviations from system specifications may be acceptable but must be independently assessed by the FAA on a case-by-case basis.
As previously discussed, this special condition is applicable to Eurocopter Model EC-130 helicopters. Should Eurocopter apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special condition would apply to that model as well under the provisions of § 21.101(a)(1).
This action affects only certain novel or unusual design features on one model series of helicopters. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the helicopter.
The substance of this special condition has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. For this reason and because a delay would significantly affect the certification of the helicopter, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting this special condition upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.
Aircraft, Air transportation, Aviation safety, Rotorcraft, Safety.
The authority citation for these special conditions is as follows: 42 U.S.C. 7572; 49 U.S.C. 106(g), 40105, 40113, 44701-44702, 44704, 44709, 44711, 44713, 44715, 45303.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special condition is issued as part of the type certification basis for Eurocopter Model EC-130 helicopters.
Each system that performs critical functions must be designed and installed to ensure that the operation and operational capabilities of these critical functions are not adversely affected when the helicopter is exposed to high-intensity radiated fields external to the helicopter.
Internal Revenue Service (IRS), Treasury.
Notice of public hearing on proposed rulemaking.
This document contains a notice of public hearing on proposed regulations relating to reporting for payments of qualified tuition and payments of interest on qualified education loans and magnetic filing requirements for information returns.
The public hearing is being held on Tuesday, February 13, 2001, at 10 a.m. The IRS must receive outlines of the topics to be discussed at the hearing by January 23, 2001.
The public hearing is being held in the auditorium, Room 7218, Internal Revenue Building, 1111 Constitution Avenue NW., Washington, DC. Due to building security procedures, visitors must enter at the 10th Street entrance, located between Constitution and Pennsylvania Avenues, NW. In addition, all visitors must present photo identification to enter the building.
Mail outlines to: Regulations Unit CC (REG-105316-98), Room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Hand deliver outlines Monday through Friday between the hours of 8 a.m. and 5 p.m. to: Regulations Unit CC (REG-105316-98), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC. Submit electronic outlines of oral comments directly to the IRS Internet site at:
Concerning submissions of comments, the hearing, and/or to be placed on the building access list to attend the hearing, Guy Traynor, (202) 622-7180 (not a toll-free number).
The subject of the public hearing is proposed regulations (REG-105316-98), that were published in the
The rules of § 601.601(a)(3) apply to the hearing.
Persons who have submitted written comments and wish to present oral comments at the hearing, msut submit an outline of the topics to be discussed and the amount of time to be devoted to each topic (signed original and eight (8) copies) by January 23, 2001.
A period of 10 minutes is allotted to each person for presenting oral comments.
After the deadline for receiving outlines has passed, the IRS will prepare an agenda containing the schedule of speakers. Copies of the agenda will be made available, free of charge, at the hearing.
Because of access restrictions, the IRS will not admit visitors beyond the immediate entrance area more than 15 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the
Environmental Protection Agency (EPA).
Proposed rule.
EPA proposes to approve revisions to the Arizona State Implementation Plan (SIP) which concern rules from the Pinal County Air Quality Control District (PCAQCD) and Pinal-Gila Counties Air Quality Control District (PGCAQCD).
The intended effect of this action is to provide support for general permitting requirements for stationary sources in the PCAQCD in accordance with the requirements of the Clean Air Act, as amended in 1990 (CAA or the Act). In the Final Rules section of this
Written comments must be received by January 19, 2001.
Mail comments to: Andrew Steckel, Chief, Rulemaking Office, (AIR-4), Air Division, U.S. Environmental Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 94105.
You can inspect copies of the submitted rule revisions and our technical support documents (TSDs) at our Region IX office from 8 am to 4:30 pm, Monday through Friday. To see copies of the submitted rule revisions, you may also go to the following locations:
Al Petersen, Rulemaking Office, (Air-4), Air Division, U.S. Environmental Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 94105, Telephone: (415) 744-1135.
This document concerns the clarification of which rules were previously approved into the PCAQCD portion of the Arizona SIP on April 9, 1996 (61 FR 15717). In addition, The PCAQCD Rules 1-1-050, 1-1-055, 1-1-105, and 3-1-080 and PGCAQCD Rules 7-1-2.2, 7-1-2.4, 7-1-2.7, 7-2-1.3, and 7-3-6.1 are being removed from the SIP. PCAQCD Rules 3-1-045 and 3-1-100 are clarified as not being in the SIP, because there was not a valid SIP submittal. For further information, please see the information provided in the direct final action that is located in the rules section of this
Environmental Protection Agency (EPA).
Proposed rule.
The EPA is proposing to take direct final action on revisions to the Texas State Implementation Plan provisions for the control of volatile organic compounds (VOCs). This rule covers three separate actions. First, we are approving revisions to the rules for controlling emissions from industrial wastewater for the Houston/Galveston, Beaumont/Port Arthur, Dallas/Fort Worth and El Paso areas. Second, we are approving new rules for the control of emissions from batch processes in the Beaumont/Port Arthur area. Third, we are approving rules that added requirements for vapor recovery at service stations in the 95 counties in the eastern half of Texas.
The EPA is approving these revisions to regulate emissions of Volatile Organic Compounds in accordance with the requirements of the Federal Clean Air Act.
In the “Rules and Regulations” section of this
Written comments must be received by January 19, 2001.
Written comments should be addressed to Mr. Thomas H. Diggs, Chief, Air Planning Section (6PD-L), at the EPA Region 6 Office listed below. Copies of documents relevant to this action are available for public inspection during normal business hours at the following locations. Anyone wanting to examine these documents should make an appointment with the appropriate office at least two working days in advance.
Environmental Protection Agency, Region 6, Air Planning Section (6PD-L), 1445 Ross Avenue, Dallas, Texas 75202-2733.
Texas Natural Resource Conservation Commission, Office of Air Quality, 12124 Park 35 Circle, Austin, Texas 78753.
Mr. Guy R. Donaldson, Air Planning Section (6PD-L), EPA Region 6, 1445 Ross Avenue, Dallas, Texas 75202-2733, telephone (214) 665-6691.
This document concerns revisions to the Texas State Implementation Plan provisions for the control of VOCs. The revisions strengthen the requirements for the control of emissions from industrial wastewater, add requirements for the control of emissions from batch processes and add requirements for the control of emissions during the filling of storage tanks at gasoline service stations in 95 counties in the eastern half of Texas. For further information, please see the information provided in the direct final action that is located in the “Rules and Regulations” section of this
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
The EPA is proposing to approve revisions to Colorado's construction permit requirements in Regulation No. 3 and hazardous air pollutant requirements in Regulation No. 8 of the State Air Quality Control Commission (AQCC) regulations, regarding permits to limit potential to emit criteria and hazardous air pollutants (HAPs). These revisions were submitted to EPA on April 26, 1996. Colorado submitted these revisions to create federally enforceable limits on criteria pollutants and HAPs, for both new and existing sources, through the State's construction permit program. EPA is approving the revisions to Regulation No. 3 regarding criteria pollutants as part of Colorado's state implementation plan (SIP) under section 110 of the Clean Air Act (CAA).
SIP approval under section 110 of the CAA, however, only extends to the control of HAPs that are criteria pollutants, such as volatile organic compounds or particulate matter, whereas section 112 of the CAA provides the underlying authority for controlling all HAPs listed in section 112(b) of the CAA. Therefore, the EPA is also approving the revisions to Regulation No. 3 and Regulation No. 8 under section 112(l) of the CAA.
In the Final Rules Section of this
Comments must be received in writing on or before January 19, 2001.
Written comments may be mailed to Richard R. Long, Director, Air and Radiation Program, Mailcode 8P-AR, Environmental Protection Agency (EPA), Region VIII, 999 18th Street, Suite 300, Denver, Colorado, 80202. Copies of the documents relevant to this action are available for public inspection during normal business hours at the Air and Radiation Program, Environmental Protection Agency, Region VIII, 999 18th Street, Suite 300, Denver, Colorado, 80202. Copies of the State documents relevant to this action are also available for public inspection at the Colorado Department of Public Health and Environment, Air Pollution Control Division, 4300 Cherry Creek Drive South, Denver, Colorado 80246-1530.
Megan Williams, EPA, Region VIII, (303) 312-6431.
See the information provided in the Direct Final action of the same title which is located in the Rules and Regulations section of this
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to approve revisions to the Santa Barbara County Air Pollution Control District (SBCAPCD) and Ventura County Air Pollution Control District (VCAPCD) portion of the California State Implementation Plan (SIP). These revisions concern Oxides of Nitrogen (NO
Any comments on this proposal must arrive by January 19, 2001.
Mail comments to Andy Steckel, Rulemaking Office Chief (AIR-4), U.S. Environmental Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901.
You can inspect copies of the submitted SIP revisions and EPA's technical support documents (TSDs) at our Region IX office during normal business hours. You may also see copies of the submitted SIP revisions at the following locations:
Ed Addison, Rulemaking Office (AIR-4), U.S. Environmental Protection Agency, Region IX, (415) 744-1160.
This proposal addresses the following local rules: SBCAPCD 352 and VCAPCD 74.11.1. In the Rules and Regulations section of this
Environmental Protection Agency (EPA).
Proposed rule.
This action would amend EPA's regulations governing the interim approval of State and local operating permits programs. Currently, the regulations allow the Agency to extend expiration dates of interim approvals beyond 2 years from the date the interim approval is originally granted. This action removes that provision.
Submit comments on or before January 19, 2001.
Comments should be submitted (in duplicate, if possible) to: Air and Radiation Docket and Information Center (6102), Attention Docket Number A-93-50, U.S. Environmental Protection Agency, 401 M Street, SW., Washington, DC 20460. The EPA requests that a separate copy also be sent to the contact person listed below.
Supporting material used in developing the proposal and final regulatory revisions is contained in Docket Number A-93-50. This docket is available for public inspection and copying between 8:30 a.m. and 5:30 p.m., Monday through Friday, at the address listed above, or by calling (202) 260-7548. The Docket is located at the above address in Room M-1500, Waterside Mall (ground floor). A reasonable fee may be charged for copying.
Roger Powell, Mail Drop 12, United States Environmental Protection Agency, Research Triangle Park, North Carolina 27711 (telephone 919-541-5331, e-mail: powell.roger@epa.gov).
If an operating permits program administered by a State or local permitting authority under title V of the Clean Air Act (Act) does not fully meet, but does “substantially [meet],” the requirements of part 70, EPA may grant that program “interim approval.” (See § 70.4(d)(1).) Permits issued under an interim approval are fully effective and expire at the end of their fixed term, unless renewed under a part 70 program. (See § 70.4(d)(2).) To obtain full approval, a permitting authority must submit to EPA program revisions correcting all deficiencies that caused the operating permits program to receive interim instead of full approval. Such submittal must be made no later than 6 months prior to the expiration of the interim approval. (See § 70.4(f)(2).) Originally 99 State and local permitting programs were granted interim approval. For 14 of the original interim approved programs, permitting authorities have corrected the deficiencies identified in their interim approvals, and we have granted all of these programs full approval. (See part 70, Appendix A.)
On August 29, 1994 (59 FR 44460), and August 31, 1995 (60 FR 45530), we proposed revisions to our part 70 operating permits program regulations. Primarily, the proposals addressed changes to the system for revising permits, but a number of other proposed changes were also included. The preamble to the August 31, 1995, proposal noted the concern of many permitting authorities over having to revise their operating permits programs twice; once to correct interim approval deficiencies, and again to address the revisions to part 70. In the August 1995 preamble, we proposed that States with interim approval “* * * should be allowed to delay the submittal of any program revisions to address program deficiencies previously listed in their notice of interim approval until the deadline to submit other changes required by the proposed revisions to part 70” (60 FR 45552).
On October 31, 1996 (61 FR 56368), we amended § 70.4(d)(2) to permit the Administrator to grant extensions to interim approval expiration dates to allow permitting authorities the opportunity to combine their program revisions correcting interim approval deficiencies with their program revisions that will conform to the part 70 revisions. In this rulemaking, we granted a 10-month extension to all interim approved programs for which the interim approval was granted prior to the date of issuance of a memorandum announcing our position on this issue (memorandum from Lydia N. Wegman to Regional Division Directors, “Extension of Interim Approvals of Operating Permits Programs,” June 13, 1996).
We then extended the interim approval expiration dates for certain State and local permitting programs a second time, on August 29, 1997 (62 FR 45732). On July 27, 1998, we published a direct final rulemaking extending interim approval expiration dates a third time, this time covering all interim approved programs, until June 1, 2000. In each of these instances, delays in the expected promulgation of the final part 70 revisions beyond the previous interim approval expiration dates led us to grant the further extensions of the expiration deadlines. We intended these extensions to provide the time needed for State and local agencies to combine their program revisions for both the interim approval deficiencies and the part 70 revisions.
On February 14, 2000 (65 FR 7333), we published a direct final rulemaking to extend interim approvals a fourth time. In this action, we would have set an interim approval expiration date of June 1, 2002, for all programs. We received an adverse comment on that action and withdrew the direct final action on March 29, 2000 (65 FR 16523).
The commenter asserted that our proposed action was contrary to the express terms of the Act and must be withdrawn. The commenter referred to section 502(g) of the Act which provides that “[a]n interim approval under [Section 502(g)] shall expire on a date set by the Administrator not later than 2 years after such approval, and may not be renewed.”
This commenter further argued that our existing regulations (§ 70.4(d)(2)) do not justify an extension of interim approval deadlines until June 1, 2002. The commenter stated that to the extent that § 70.4(d)(2) allowed an extension of interim approvals by up to 10 months on an individual basis, we had already granted this 10-month extension in the October 31, 1996, rulemaking.
This commenter also asserted that to the extent § 70.4(d)(2) allowed longer interim approval periods for States to combine program changes, this provision did not justify the proposed extension to June 1, 2002, because § 70.4(d)(2) contemplated such extensions only after the promulgation of part 70 revisions, which had not occurred. Moreover, the commenter noted that this provision authorized additional time “only once per State” and that we had already granted multiple extensions in the past.
We considered these comments, as well as the further delays in promulgating the revisions to part 70 and the recently determined need for a supplemental part 70 proposal before the part 70 revisions can be promulgated. In light of those considerations and the need to provide State and local agencies with sufficient time to correct their interim approval deficiencies, on May 22, 2000, we published a final action extending interim approvals until December 1, 2001, and indicated that we will not extend interim approvals further. Consequently, a Federal permitting program will apply by operation of law in any area without a fully approved program as of December 1, 2001.
The Sierra Club and New York Public Interest Research Group (NYPIRG) challenged our final action in the Court of Appeals for the District of Columbia Circuit [
One of the terms of the settlement agreement is that we will remove from § 70.4(d)(2) the language added on October 31, 1996, to allow granting extensions to interim approval expiration dates. The language of § 70.4(d)(2) is proposed to be amended to restore it to the original language that was in that section when part 70 was promulgated. The revision to this provision is consistent with our intent not to extend further the interim approval of the current operating permits programs. This action, if finalized, will have no effect on the current expiration date of December 1, 2001, for programs that received an extension of their interim approvals in the May 22, 2000, action.
The docket for this regulatory action is A-93-50. The docket is an organized and complete file of all the information submitted to, or otherwise considered by, EPA in the development of this rulemaking. The principal purposes of the docket are: (1) to allow interested parties a means to identify and locate documents so that the parties can effectively participate in the rulemaking process, and (2) to serve as the record in case of judicial review (except for interagency review materials). The docket is available for public inspection at EPA's Air Docket, which is listed under the
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency must determine whether each regulatory action is “significant,” and therefore subject to the Office of Management and Budget (OMB) review and the requirements of the Order. The Order defines “significant” regulatory action as one that is likely to lead to a rule that may:
1. Have an annual effect on the economy of $100 million or more, adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.
2. Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency.
3. Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligation of recipients thereof.
4. Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in Executive Order 12866.
This action is not a “significant” regulatory action pursuant to Executive Order 12866 because it does not substantially change the existing part 70 requirements for States or sources; requirements which have already undergone OMB review. As such, this action is exempted from OMB review.
Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), I certify that this action will not have a significant economic impact on a substantial number of small entities.
The OMB has approved the information collection requirements contained in part 70 under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with Federal mandates that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.
The EPA has determined that the action in this rulemaking does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector, in any one year. Although the part 70 regulations governing State operating permit programs impose significant Federal mandates, this action does not amend the part 70 regulations in a way that significantly alters the expenditures resulting from these mandates. Therefore, the Agency concludes that it is not required by section 202 of the UMRA of 1995 to provide a written statement to accompany this regulatory action.
Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1977), applies to any rule that EPA determines (1) is “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.
This final rule is not subject to Executive Order 13045 because it is not an economically significant regulatory action as defined by Executive Order 12866, and it does not address an environmental health or safety risk that would have a disproportionate effect on children.
Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. The EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.
If EPA complies by consulting, Executive Order 13132 requires EPA to provide to OMB, in a separately identified section of the preamble to the rule, a federalism summary impact statement (FSIS). The FSIS must include a description of the extent of EPA's prior consultation with State and local officials, a summary of the nature of their concerns and the agency's position supporting the need to issue the regulation, and a statement of the extent to which the concerns of State and local officials have been met. Also, when EPA transmits a draft final rule with federalism implications to OMB for review pursuant to Executive Order 12866, EPA must include a certification from the agency's Federalism Official stating that EPA has met the requirements of Executive Order 13132 in a meaningful and timely manner.
This rule change will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Thus, the requirements of section 6 of the
Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the tribal governments, or EPA consults with those governments. If EPA complies by consulting, Executive Order 13084 requires EPA to provide to OMB, in a separately identified section of the preamble to the rule, a description of the extent of EPA's prior consultation with representatives of affected tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires EPA to develop an effective process permitting elected officials and other representatives of Indian tribal governments “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.”
This rule does not significantly or uniquely affect the communities of Indian tribal governments because it applies only to State and local permitting programs. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.
Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
This rule does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.
Environmental protection, Administrative practice and procedure, Air pollution control, Intergovernmental relations, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, title 40, chapter I, of the Code of Federal Regulations is proposed to be amended as follows:
1. The authority citation for part 70 continues to read as follows:
42 U.S.C. 7401,
2. Section 70.4 is amended by revising paragraph (d)(2) to read as follows:
(d) * * *
(2) Interim approval shall expire on a date set by the Administrator (but not later than 2 years after such approval), and may not be renewed. Sources shall become subject to the program according to the schedule approved in the State program. Permits granted under an interim approval shall expire at the end of their fixed term, unless renewed under a part 70 program.
Environmental Protection Agency (EPA).
Proposed rule.
Alabama has applied to EPA for Final authorization of the changes to its hazardous waste program under the Resource Conservation and Recovery Act (RCRA). EPA proposes to grant final authorization to Alabama. In the “Rules and Regulations” section of this
Send your written comments by January 19, 2001.
Send written comments to Narindar Kumar, Chief, RCRA Programs Branch, Waste Management Division, Environmental Protection Agency, The Sam Nunn Atlanta Federal Center, 61 Forsyth Street, SW, Atlanta, Georgia 30303-8960, phone number: (404) 562-8440. You can examine copies of the materials submitted by Alabama during normal business hours at the following locations: EPA Region 4 Library, The Sam Nunn Atlanta Federal Center, 61 Forsyth Street, SW, Atlanta, Georgia 30303-8960, phone number: (404) 562-8190: or Alabama Department of Environmental Management, 1400 Coliseum Blvd., Montgomery, Alabama 36130-1463, phone number (334) 271-7700.
Narindar Kumar, Chief, RCRA Programs Branch, Waste Management Division, Environmental Protection Agency at the above address and phone number.
For additional information, please see the immediate final rule published in the “Rules and Regulations” section of this
Federal Communications Commission.
Notice of proposed rule making.
This document solicits comments on proposed changes to several of the rules relating to international telecommunications services. The Commission initiated this proceeding to determine what rules could be modified or eliminated in light of competition in international telecommunications services. This proceeding is part of the Commission's year 2000 biennial regulatory review. The Commission believes that these proposals will remove unnecessary burdens on the public and the agency.
Comments are due on or before January 24, 2001, and reply comments are due on or before February 27, 2001.
Federal Communications Commission, Secretary, 445 12th Street, SW., Room TW-B204F, Washington, DC 20554.
David Krech, International Bureau, (202) 418-1460.
1. This is a summary of the Commission's Notice of Proposed Rule Making (NPRM), FCC 00-407, adopted on November 13, 2000, and released on November 30, 2000. The full text of this document is available for inspection and copying during normal business hours in the Office of Media Relations, Reference Operations Division, (Room CY-A257) of the Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554. The document is also available for download over the Internet at
2. This NPRM contains proposed information collections subject to the Paperwork Reduction Act of 1995 (PRA). It will be submitted to the Office of Management and Budget (OMB) for review under the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the proposed information collections contained in this proceeding.
3. On November 13, 2000, the Commission adopted a Notice of Proposed Rulemaking (NPRM) to determine whether it should amend and clarify several of its rules relating to international telecommunications services. The Commission initiated this proceeding in response to the Telecommunications Act of 1996, which requires the Commission to review all regulations that apply to operations or activities of any provider of telecommunications service and to repeal or modify any regulation it determines to be no longer necessary in the pubic interest. The Commission solicits comments on all of the proposals and tentative conclusions contained in the NPRM.
4. Section 63.24 sets out the procedures for review of
5. Currently there are two rules addressing assignments and transfers of control of international Section 214 authorizations. The Commission believes that the current regulatory structure may not be sufficiently flexible for corporate transactions that do not fall into one of the existing categories but should be treated as
6. There has been a steady increase in the number of transactions involving authorizations for different services and requiring intra-agency approval, many of which involve both international Section 214 authorizations and wireless authorizations. Thus, the Commission proposes to modify and consolidate its current rules on assignments and transfers of control of international Section 214 authorizations so that the new rule more closely tracks the procedures applicable to CMRS. The NPRM seeks comment on this proposal.
7. Currently, § 1.948 governs CMRS's assignments and transfers of control of authorization and provides that a change from less than 50 percent ownership to 50 percent or more ownership shall always be considered a transfer of control. In other situations, whether a controlling interest in transferring is determined on a case-by-case basis considering the distribution of ownership, and the relationships of the owners, including family relationships. The Commission proposes to adopt both of these provisions as part of a consolidated rule that would govern all international Section 214 assignments and transfers, whether substantial or
8. The NPRM seeks comment on the proposal to allow a case-by-case determination of whether an assignment or transfer of control is substantial or
9. The NPRM seeks comment on other proposals to amend § 63.24 so that it more closely tracks the procedures used for CMRS. The NPRM proposes that within 30 days after consummation of a
10. The NPRM seeks comment on the Commission's tentative conclusion that the proposed rules, as revised to more closely track the rule used for CMRS, will reduce the regulatory burden on Section 214 authorization holders. The NPRM also seeks comment on whether the proposals will provide greater flexibility to Section 214 authorization holders and expanding the possible range of transactions that qualify for filing on a
11. The Commission proposes to discontinue the application of the benchmark rates to services provided over facilities-based private lines. The Commission believes that this proposal will relieve an unnecessary burden without adversely affecting competitive safeguards. The NPRM seeks comment on the proposal and conclusion. Comments should address the likelihood that a carrier could successfully evade application of the condition by sending facilities-based switched traffic over facilities-based private lines.
12. The Commission proposes to modify its rules for discontinuances of service by U.S. international common carriers. The Commission proposes to require prior approval for discontinuances by a U.S. international carrier only for those routes and services for which the carrier is classified as dominant due to its having market power in the provision of that international service on the U.S. end of the route. The NPRM seeks comment on this proposal and the tentative conclusion that the discontinuance requirement should apply only to U.S. carriers regulated as dominant due to market power in the U.S. Comments should address under what circumstances, if any, prior Commission approval should be required before a U.S. carrier regulated as dominant under § 63.10 can discontinue service.
13. The NPRM seeks comment on the proposals to amend the explanatory notes regarding attribution of indirect ownership interests in U.S. and foreign carriers to clarify that whenever an ownership percentage exceeds 50 percent or represents actual control it shall be treated as a 100 percent interest for purposes of applying the multiplier.
14. The NPRM seeks comment on a number of proposals to amend or eliminate rules that are no longer applicable. The NPRM proposes to eliminate § 63.21(h) because there are no U.S. carriers to which the rule applies. The NPRM proposes to eliminate § 43.81 because the requirement that foreign-owned carriers file certain reports has expired. The NPRM proposes to amend § 63.22 to clarify that a facilities-based carrier may provide service over U.S. facilities, which are not subject to authorization by the Commission, as long as those facilities are not on the Exclusion List. The NPRM also proposes to eliminate confusion over the inconsistency of § 63.22 by removing the general reference to a list of countries in the Exclusion List. The NPRM proposes to eliminate unnecessary duplication of the contents required for international Section 214 applications contained in § 63.09 and § 63.18. The NPRM addresses the duplicative notes that are unnecessary and the proposal to eliminate the first three explanatory notes to § 62.18(h) while retaining the forth note. The NPRM proposes to delete the provision in § 63.20 that specifies the number of copies required to be filed for applications to supplement already authorized facilities.
15. In addition, the NPRM proposes to eliminate the requirement that a Section 214 application be submitted on computer diskette. The Commission believes that the International Bureau Filing System (IBFS) supercedes the computer diskette method for filing applications. Similarly, the NPRM proposes to amend § 63.10(d) to remove the requirement that reports filed by dominant carriers be filed on diskettes. Comments are sought on these tentative conclusions and whether there is any reason to continue to require international Section 214 applications and dominant carrier reports to be filed on computer diskettes.
16.
17.
18.
19. As part of the year 2000 biennial regulatory review, the Commission reviewed all of its rules relating to international telecommunications services to identify those rules that could be revised or eliminated. In this proceeding, we propose changes to several of our rules relating to international telecommunications services. Specifically, we propose to amend our rule concerning
20.
21.
22. The SBA has developed a definition of small entities for telephone communications companies other than radiotelephone (wireless) companies. The Census Bureau reports that there were 2,321 such companies that had been operating for at least one year at the end of 1992. According to the SBA's definition, a wireline telephone company is a small business if it employs no more than 1,500 persons, 13 CFR 121.201, Standard Industrial Classification (SIC) Code 4812. All but 26 of the 2,321 wireline companies listed by the Census Bureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those companies had more than 1,500 employees, there would still be 2,295 wireline companies that might qualify as small entities or small incumbent LECs. Although it seems certain that some of these carriers are not independently owned and operated, we are unable at this time to estimate with greater precision the number of wireline carriers and service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that fewer than 2,295 of these wireline companies are small entities that might be affected by these proposals.
23. Specifically, we propose to amend our rule concerning
24.
25. In the NPRM, the Commission proposes to provide greater flexibility and clarity regarding assignments and transfers of control. Many of the transactions that carriers are entering into involve multiple services. In the NPRM the Commission proposes procedures regarding
26. The Commission also proposes to remove the settlement rate benchmarks condition to Section 214 authorizations to provide facilities-based international private line services. The Commission also proposes to modify its rules to relieve dominant international carriers of the requirement to seek prior approval to discontinue service, except where such carriers possess market power in the provision of international service on the U.S. end of the route. Only one carrier—Comsat—is currently regulated as dominant on particular routes in its provision of particular services due to the existence of market power on the U.S. end of those routes. Other carriers that are classified dominant solely due to affiliations with foreign carriers will no longer be required to seek prior approval before discontinuing service.
27. The other proposals in the NPRM will clarify the intent of certain rules and to eliminate other rules that no longer have any application. We believe that these proposed changes are in the public interest and will remove unnecessary burdens on the public and the Commission.
28.
29. The Telecommunications Act of 1996 (1996 Act) directs the Commission to undertake, in every even-numbered year beginning in 1998, a review of all regulations issued under the Communications Act of 1934, as amended (Communications Act), that apply to operations or activities of any provider of telecommunications service and to repeal or modify any regulation it determines to be “no longer necessary in the public interest.” In particular, the 1996 Act directs the Commission to determine whether any such regulation is no longer necessary “as the result of meaningful economic competition between providers of such service.” As part of the 2000 biennial regulatory review, the Commission reviewed all of its rules relating to international telecommunications services to identify those rules that could be revised or eliminated. In this proceeding the Commission proposes changes to several of its rules relating to international telecommunications services. The Commission believes that the proposals in the NPRM will reduce the economic burdens placed on all companies providing international telecommunications services, including small entities.
30. Federal rules that may duplicate, overlap, or conflict with the proposed rules: None.
31.
32. Pursuant to Sections 1, 4, 11, 214, 218, 219, 220 and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 161, 214, 218, 219, 220, 403, the Notice of Proposed Rulemaking is hereby adopted and comments are requested.
33. The Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this Notice of Proposed Rulemaking, including the regulatory flexibility certification, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with paragraph 603(a) of the Regulatory Flexibility Act, Public Law 96-354, 94 Stat. 1164, 5 U.S.C. 601,
Communications common carriers, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR parts 43 and 63 as follows:
1. The authority citation for part 43 continues to read as follows:
47 U.S.C. 154; Telecommunications Act of 1996, Public Law 104-104, sec. 402(b)(2)(B), (c), 110 Stat. 56 (1996) as amended unless otherwise noted. 47 U.S.C. 211, 219, 220 as amended.
2. Remove § 43.81.
3. The authority citation for part 63 continues to read as follows:
section 1, 4(i), 4(j), 10, 11, 201-205, 214, 218, 403 and 651 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, unless otherwise noted.
4. Section 63.09 is amended by revising Note 2 to § 63.09 to read as follows:
Ownership and other interests in U.S. and foreign carriers will be attributed to their holders and deemed cognizable pursuant to the following criteria: Attribution of ownership interests in a carrier that are held indirectly by any party through one or more intervening corporations will be determined by successive multiplication of the ownership percentages for each link in the vertical ownership chain and application of the relevant attribution benchmark to the resulting product, except that wherever the ownership percentage for any link in the chain exceeds 50 percent or represents actual control, it shall be treated as if it were a 100 percent interest. For example, if A owns 30 percent of company X, which owns 60 percent of company Y, which owns 26 percent of “carrier,” then X's interest in “carrier” would be 26 percent (the same as Y's interest because X's interest in Y exceeds 50 percent), and A's interest in “carrier” would be 7.8 percent (0.30 × 0.26). Under the 25 percent attribution benchmark, X's interest in “carrier” would be cognizable, while A's interest would not be cognizable.
5. Section 63.10 is amended by revising paragraph (d) to read as follows:
(d) A carrier classified as dominant under this section shall file an original and two copies of each report required by paragraphs (c)(3), (c)(4), and (c)(5) of this section with the Chief, International Bureau. The carrier shall also file one copy of these reports with the Commission's copy contractor. The transmittal letter accompanying each report shall clearly identify the report as responsive to the appropriate paragraph of § 63.10(c).
6. Section 63.18 is amended by removing paragraph (e)(3) and Notes 1 through 4 to paragraph (h) and redesignating paragraph (e)(4) as (e)(3) and adding Note to paragraph (h) to read as follows.
Ownership and other interests in U.S. and foreign carriers will be attributed to their holders and deemed cognizable pursuant to the following criteria: Attribution of ownership interests in a carrier that are held indirectly by any party through one or more intervening corporations will be determined by successive multiplication of the ownership percentages for each link in the vertical ownership chain and application of the relevant attribution benchmark to the resulting product, except that wherever the ownership percentage for any link in the chain exceeds 50 percent or represents actual control, it shall be treated as if it were a 100 percent interest. For example, if A owns 30 percent of company X, which owns 60 percent of company Y, which owns 26 percent of “carrier,” then X's interest in “carrier” would be 26 percent (the same as Y's interest because X's interest in Y exceeds 50 percent), and A's interest in “carrier” would be 7.8 percent (0.30 x 0.26). Under the 25 percent attribution benchmark, X's interest in “carrier” would be cognizable, while A's interest would not be cognizable.
7. Section 63.19 is revised to read as follows:
(a) With the exception of those international carriers described in paragraph (b) of this section, any international carrier that seeks to discontinue, reduce or impair service, including the retiring of international facilities, dismantling or removing of international trunk lines, shall be subject to the following procedures in lieu of those specified in §§ 63.61 through 63.601:
(1) The carrier shall notify all affected customers of the planned discontinuance, reduction or impairment at least 60 days prior to its planned action. Notice shall be in writing to each affected customer unless the Commission authorizes in advance, for good cause shown, another form of notice.
(2) The carrier shall file with this Commission a copy of the notification on or after the date on which notice has been given to all affected customers.
(b) The following procedures shall apply to any international carrier that the Commission has classified as dominant in the provision of a particular international service because the carrier possesses market power in the provision of that service on the U.S. end of the route. Any such carrier that seeks to retire international facilities, dismantle or remove international trunk lines, and the dominant services being provided through these facilities is not being discontinued, reduced or impaired, shall only be subject to the notification requirements of paragraph (a) of this section. If such carrier discontinues, reduces or impairs the dominant service or retires facilities that
8. Section 63.20 is amended by revising paragraph (a) to read as follows:
(a) Unless otherwise specified the Commission shall be furnished with an original and five copies of applications filed for international facilities and services under section 214 of the Communications Act of 1934, as amended. Upon request by the Commission, additional copies of the application shall be furnished. Each application shall be accompanied by the fee prescribed in subpart G of part 1 of this chapter.
9. Section 63.21 is amended by removing paragraph (h) and redesignating paragraphs (i) and (j) as paragraphs (h) and (i).
10. Section 63.22 is amended by revising paragraph (b) to read as follows:
(b) The carrier may provide service using half-circuits on any U.S. common carrier and non-common carrier facilities that do not appear on an exclusion list published by the Commission. Carriers may also use any necessary non-U.S.-licensed facilities, including any submarine cable systems, that do not appear on the exclusion list. Carriers may not use U.S. earth stations to access non-U.S.-licensed satellite systems unless the Commission has specifically approved the use of those satellites and so indicates on the exclusion list. The exclusion list is available from the International Bureau's World Wide Web site at http://www.fcc.gov/ib.
11. Section 63.24 is amended by revising the subject heading and paragraph (a) and paragraph (b) and by adding new paragraphs (c) through (g) to read as follows.
(a)
(b)
(c)
(d)
If a transaction is one of the types listed below, the transaction is presumptively
(e)
(2) The application shall include the information requested in paragraphs (a) through (d) of § 63.18 for both the transferor/assignor and the transferee/assignee. The information requested in paragraphs (h) through (p) of § 63.18 is required only for the transferee/assignee. At the beginning of the application, the applicant shall include a narrative of the means by which the proposed transfer or assignment will take place.
(3) The Commission reserves the right to request additional information as to the particulars of the transaction to aid it in making its public interest determination.
(4) An assignee or transferee shall notify the Commission no later than 30 days after either consummation of the proposed assignment or transfer of control, or a decision not to consummate the proposed assignment or transfer of control. The notification may be made by letter (sending one copy to the Office of the Secretary and one copy to the Telecommunications Division of the International Bureau) and shall identify the file numbers under which the initial authorization and the authorization of the assignment or transfer of control were granted.
(f)
(2) A
(i) The information requested in paragraphs (a) through (d) and (h) of § 63.18 for the transferee/assignee,
(ii) A certification that the transfer of control or assignment was
(3) Upon release of a public notice granting a
(g)
12. Section 63.53 is amended by removing paragraph (b) and redesignating paragraph (c) as (b).
Rural Housing Service, Rural Business-Cooperative Service, and Rural Utilities Service, USDA.
Proposed collection; comments requested.
In accordance with the Paperwork Reduction Act of 1995, this notice announces Rural Development's intention to seek Office of Management and Budget (OMB) approval of new information collection requirements in support of new electronic loan collection methods.
Comments on this notice must be received by February 20, 2001 to be assured consideration.
Mark Huntley, Accountant, Office of the Deputy Chief Financial Officer, Policy and Internal Review Division, U.S. Department of Agriculture, STOP 33, P.O. Box 200011, St. Louis, MO 63120, telephone: (314) 539-6063.
To administer these electronic loan collection methods, Rural Development must collect the borrower's FI routing information (routing information includes the FI routing number and the borrower's account number). Rural Development is proposing to use Agency approved forms for collecting bank routing information for PAD, FedWire, and CIP methods.
Copies of this information collection can be obtained from Barbara Williams, Regulations and Paperwork Management Branch, Support Services Division, Rural Development, telephone (202) 692-0045.
Comments should be submitted to Barbara Williams, Regulations and Paperwork Management Branch, Support Services Division, Rural Development, U.S. Department of Agriculture, STOP 0742, 1400 Independence Avenue, SW., Washington, DC 20250-0742. All responses to this notice will be summarized, included in the request for OMB approval, and will become a matter of public record. A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this rule.
Architectural and Transportation Barriers Compliance Board.
Notice of meeting.
The Architectural and Transportation Barriers Compliance Board (Access Board) has scheduled its regular business meetings to take place in Washington, DC on Monday, Tuesday, and Wednesday, January 8-10, 2001, at the times and location noted below.
The schedule of events is as follows:
The meetings will be held at the Washington Renaissance Hotel, 999 9th Street, NW, Washington, DC. The Public Rights of Way Access Advisory Committee Presentation and Awards Reception will be held at the Marriott Wardman Park Hotel, 2660 Woodley Road, NW, Washington, DC.
For further information regarding the meetings, please contact Lawrence W. Roffee, Executive Director, (202) 272-5434, extension 113 (voice) and (202) 272-5449 (TTY).
At the Board meeting, the Access Board will consider the following agenda items.
All meetings are accessible to persons with disabilities. Sign language interpreters and an assistive listening system are available at all meetings. Persons attending Board meetings are requested to refrain from using perfume, cologne, and other fragrances for the comfort of other participants.
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
The application to expand FTZ 29-Site 1 is approved, subject to the Act and the Board's regulations, including Section 400.28, and further to the Board's standard 2,000-acre activation limit for the overall zone project.
Import Administration, International Trade Administration, Department of Commerce.
Notice of opportunity to request administrative review of antidumping or countervailing duty order, finding, or suspended investigation.
Each year during the anniversary month of the publication of an antidumping or countervailing duty order, finding, or suspension of investigation, an interested party, as defined in section 771(9) of the Tariff Act of 1930, as amended, may request, in accordance with section 351.213 (1999) of the Department of Commerce (the Department) Regulations, that the Department conduct an administrative review of that antidumping or countervailing duty order, finding, or suspended investigation.
Not later than the last day of December 2000, interested parties may request administrative review of the following orders, findings, or suspended investigations, with anniversary dates in December for the following periods:
In accordance with section 351.213(b) of the regulations, an interested party as defined by section 771(9) of the Act may request in writing that the Secretary conduct an administrative review. For both antidumping and countervailing duty reviews, the interested party must specify the individual producers or exporters covered by an antidumping finding or an antidumping or countervailing duty order or suspension agreement for which it is requesting a review, and the requesting party must state why it desires the Secretary to review those particular producers or exporters. If the interested party intends for the Secretary to review sales of merchandise by an exporter (or a producer if that producer also exports merchandise from other suppliers) which were produced in more than one country of origin and each country of origin is subject to a separate order, then the interested party must state specifically, on an order-by-order basis, which exporter(s) the request is intended to cover.
Six copies of the request should be submitted to the Assistant Secretary for Import Administration, International Trade Administration, Room 1870, U.S. Department of Commerce, 14th Street & Constitution Avenue, NW., Washington, DC 20230. The Department also asks parties to serve a copy of their requests to the Office of Antidumping/ Countervailing Duty Enforcement, Attention: Sheila Forbes, in room 3065 of the main Commerce Building. Further, in accordance with section 351.303(f)(l)(i) of the regulations, a copy of each request must be served on every party on the Department's service list.
The Department will publish in the
This notice is not required by statute but is published as a service to the international trading community.
Notice of Application to Amend an Export Trade Certificate of Review.
The Office of Export Trading Company Affairs (“OETCA”), International Trade Administration, Department of Commerce, has received an application to amend an Export Trade Certificate of Review (“Certificate”). This notice summarizes the proposed amendment and requests comments relevant to whether the Certificate should be issued.
Morton Schnabel, Director, Office of Export Trading Company Affairs, International Trade Administration, (202) 482-5131. This is not a toll-free number.
Title III of the Export Trading Company Act of 1982 (15 U.S.C. 4001-21) authorizes the Secretary of Commerce to issue Export Trade Certificates of Review. An Export Trade Certificate of Review protects the holder and the members identified in the Certificate from state and federal government antitrust actions and from private treble damage antitrust actions for the export conduct specified in the Certificate and carried out in compliance with its terms and conditions. Section 302(b)(1) of the Export Trading Company Act of 1982 and 15 CFR 325.6(a) require the
Interested parties may submit written comments relevant to the determination whether an amended Certificate should be issued. If the comments include any privileged or confidential business information, it must be clearly marked and a nonconfidential version of the comments (identified as such) should be included. Any comments not marked privileged or confidential business information will be deemed to be nonconfidential. An original and five (5) copies, plus two (2) copies of the nonconfidential version, should be submitted no later than 20 days after the date of this notice by email to oetca@ita.doc.gov, or by mail to: Office of Export Trading Company Affairs, International Trade Administration, Department of Commerce, Room 1104, Washington, DC 20230. Information submitted by any person is exempt from disclosure under the Freedom of Information Act (5 U.S.C. 552). However, nonconfidential versions of the comments will be made available to the applicant if necessary for determining whether or not to issue the Certificate. Comments should refer to this application as “Export Trade Certificate of Review, application number 88-3A012.”
The National Tooling and Machining Association (“NTMA”) original Certificate was issued on October 18, 1988 (53 FR 43140, October 25, 1988), and was last amended on May 5, 2000 (65 FR 30073, May 10, 2000). A summary of the application for an amendment follows.
NTMA wishes to amend its certificate to:
(1) Add the attached List 1 of firms as “Members” of the Certificate within the meaning of section 325.2(1) of the Regulations (15 CFR 325.2(1)).
(2) Remove the attached List 2 of firms as “Members” of the Certificate within the meaning of section 325.2(1) of the Regulations (15 CFR 325.2(1)).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Gulf of Mexico Fishery Management Council will convene a public meeting of the Shrimp Advisory Panel (AP).
The Shrimp AP meeting is scheduled to begin at 8:30 a.m. on Monday, January 8, 2001.
The meeting will be held at the at the Imperial Palace Hotel 850 Bayview, Biloxi, MS 39530; telephone: 228-436-3000.
Dr. Richard Leard, Senior Fishery Biologist, Gulf of Mexico Fishery Management Council, 3018 U.S. Highway 301 North, Suite 1000, Tampa, FL 33619; telephone: 813-228-2815.
The Shrimp AP will convene to review a revision to Draft Amendment 11 to the Shrimp Fishery Management Plan (FMP) that provides revised alternatives for registrations of shrimp craft and additional analyses of impacts of permitting and registration alternatives. The Shrimp AP will also review an Options Paper for Amendment 10 to the Shrimp FMP that includes alternatives for additional bycatch measures in the Gulf. Finally, the Shrimp AP will receive reports from NMFS on the status and health of shrimp stocks in the Gulf and the effects of the 2000 Cooperative Shrimp Closure with the state of Texas. The Shrimp AP may make recommendations for a cooperative closure with Texas for 2001.
The Shrimp AP consists principally of commercial shrimp fishermen, dealers, and association representatives.
Although other non-emergency issues not on the agendas may come before the AP for discussion, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act, those issues may not be the subject of formal action during these meetings. Actions of the AP will be restricted to those issues specifically identified in the agendas and any issues arising after publication of this notice that require emergency action under Section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take action to address the emergency.
Copies of the agenda can be obtained by calling 813-228-2815.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Anne Alford at the Council (see
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Western Pacific Fishery Management Council will convene a public meeting of its precious corals plan team to discuss Council issues in relation to precious coral quotas in the Hawaiian Exploratory Area.
The meeting will be held January 5, 2001, from 9-11 a.m.
The meeting will be held at the Western Pacific Fishery Management Council office conference room, telephone (808) 522-8220.
Kitty M. Simonds, Executive Director; telephone (808) 522-8220.
The Plan Team will discuss and may make recommendations to the Council on the agenda items below. The order in which the agenda items will be addressed is tentative. The agenda will be as follows:
Although non-emergency issues not contained in this agenda may come before this Council for discussion, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act, those issues may not be the subject of formal Council action during this meeting. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the Council’s intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kitty M. Simonds, (808) 522-8220 (voice) or (808) 522-8226 (fax), at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Issuance of incidental take permit No.1269.
Notice is hereby given that NMFS has issued a permit to Central Hudson Gas & Electric Corporation (CHGE) / Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C. that authorizes, subject to certain conditions set forth therein, take of the Endangered Species Act-listed shortnose sturgeon, incidental to the operation of the Roseton and Danskammer Point power plants on the Hudson River, New York.
The application and related documents are available for review in the following office by appointment:
Endangered Species Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Silver Spring, MD 20910 or Protected Resources Division, F/NER3, One Blackburn Dr., Gloucester, MA 01930 (phone: 978-281-9328, fax: 978-281-9394).
Donna Brewer, Silver Spring, MD, phone: 301-713-1401; fax: 301-173-0376; e-mail: Donna.Brewer@noaa.gov or Mary Colligan, Gloucester, MA, phone: 978-281-9116; fax: 978-281-9394; e-mail: Mary.A.Colligan@noaa.gov.
The permit was issued under the authority of section 10(a)(1)(B) of the Endangered Species Act of 1973 (ESA)(16 U.S.C. 1531-1543) and the NMFS regulations governing ESA-listed fish and wildlife Permits (50 CFR parts 222-227). Issuance is based on a finding that such permits: (1) are applied for in good faith; (2) would not operate to the disadvantage of the listed species which are the subject of the permit; and (3) are consistent with the purposes and policies set forth in section 2 of the ESA. Authority to take listed species is subject to conditions set forth in the permit.
The covered activities include the operation of the two power plants on the Hudson River as described in the “Conservation Plan for the Incidental Take of Shortnose Sturgeon at the Roseton and Danskammer Point Generating Stations” and in the Environmental Assessment.
The publication on August 9, 2000 (65 FR 48677), notified that an application had been filed by CHGE for a permit to incidentally take endangered shortnose sturgeon from the Hudson River distinct population segment of shortnose sturgeon at the Roseton and Danskammer Point power plants on the Hudson River. CHGE submitted an application including a Conservation Plan (CP) on April 20, 2000. The CP describes measures designed to avoid, minimize, mitigate, and monitor the incidental take of shortnose sturgeon associated with operation of the Roseton and Danskammer Point power plants. The decision to issue a permit for the activities as described in the CP is based on a thorough review of the alternatives and of their environmental consequences. The terms and conditions of this permit ensure that the incidental take of shortnose sturgeon through the operation of Roseton and Danskammer Point power plants will not appreciably reduce the likelihood of the survival and recovery of shortnose sturgeon in the Hudson River.
NMFS staff worked with CHGE during the development of the application. During these discussions, CHGE said that the plants would likely be sold to a new owner. Following submission of the application materials, CHGE notified NMFS that it had entered into an agreement to sell Danskammer and Roseton Power Plants to Dynegy. The only commenter on the draft Conservation Plan (CP), Implementing Agreement (IA) and Environmental Assessment (EA) also was aware of the sale and attached a copy of a press release from CHGE announcing the pending sale to Dynegy. The parties plan to complete the sale by the end of the year. NMFS has now been officially informed by CHGE that the buyer will be Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C. Both CHGE and Dynegy have requested that Dynegy be added as a co-applicant and co-permittee in this permit issuance process, as provided for in NMFS’ regulations. As explained in correspondence from CHGE and Dynegy; Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C. are willing to agree to all of the terms and conditions included in the Conservation Plan submitted by CHGE, the IA, and the permit.
Issuance of the permit was based on a finding that CHGE and Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C. had met the permit issuance criteria of 50 CFR 222.307(c). Permit 1269, issued on November 29, 2000, expires on December 31, 2015.
United States Patent and Trademark Office, Commerce.
Notice and request for comments.
The Director of the United States Patent and Trademark Office has discretion to declare an interference involving a patent application. The current standard requires a two-way patentability analysis for the Director to be of the opinion that an interference-in-fact exists. In view of public commentary suggesting that, at least in some cases, a one-way patentability analysis should be sufficient, USPTO provides reasons for the current standard and solicits comments on the propriety of that standard.
Submit comments on or before January 31, 2001.
Send all comments:
1. Electronically to “
2. By mail to Director of the United States Patent and Trademark Office, BOX INTERFERENCE, Washington, D.C. 20231, ATTN: “Interference-in-Fact”; or
3. By facsimile to 703-305-0942, ATTN: “Interference-in-fact”.
Fred E. McKelvey or Richard Torczon at 703-308-9797.
The patent statute provides that “[w]henever an application is made for a patent which, in the opinion of the Director, would interfere with any pending application, or with any unexpired patent, an interference may be declared * * *” 35 U.S.C. 135(a). “It is * * * [the Director] who is to judge (be of opinion) whether an application will interfere with a pending one * * *”
An interference is declared when two parties are claiming the “same patentable invention.” 37 CFR 1.601(i). An “interference-in-fact,” a term of art in patent law, exists when at least one claim of a first party and at least one claim of a second party define the same patentable invention. 37 CFR 1.601(j). The phrase “same patentable invention” is defined as follows at 37 CFR 1.601(n) (emphasis in original):
Invention “A” is
Recent precedent of the Trial Section of the Interference Division of the Board of Patent Appeals and Interferences confirms that resolution of whether an interference-in-fact exists involves a two-way patentability analysis.
The claimed invention of Party A is presumed to be prior art vis-a-vis Party B and vice versa. The claimed invention of Party A must anticipate or render obvious the claimed invention of Party B
The
Application E contains patentable claims 1 (engine), 2 (6-cylinder engine), and 3 (engine with a platinum piston). Application F contains patentable claims 11 (engine) and 12 (8-cylinder engine). Claims 1 and 2 of application E and claims 11 and 12 of application F define the same patentable invention. Claim 3 of application E defines a separate patentable invention from claims 1 and 2 of application E and claims 11 and 12 of application F. If an interference is declared, there would be one count (engine). Claims 1 and 2 of application E and claims 11 and 12 of application F would be designated to correspond to the count. Claim 3 of application E would not be designated to correspond to the count.
Application G contains patentable claims 1 (engine), 2 (6-cylinder engine), and 3 (engine with a platinum piston). Application H contains patentable claims 11 (engine) and 15 (engine with a platinum piston). Claims 1 and 2 of application G and claim 11 of application H define the same patentable invention. Claim 3 of application G and claim 15 of application H define a separate patentable invention from claims 1 and 2 of application G and claim 11 of application H. If an interference is declared, there would be two counts: Count 1 (engine) and Count 2 (engine with a platinum piston). Claims 1 and 2 of application G and claim 11 of application H would be designated to correspond to Count 1. Claim 3 of application G and claim 15 of application H would be designated to correspond to Count 2.
Application J contains patentable claims 1 (engine), 2 (combination of an engine and a carburetor) and 3 (combination of an engine, a carburetor, and a catalytic converter). Application K contains patentable claims 31 (engine), 32 (combination of an engine and a carburetor), and 33 (combination of an engine, a carburetor, and an air filter). The engine, combination of an engine and carburetor, and combination of an engine, carburetor, and air filter define the same patentable invention. The combination of an engine, carburetor, and catalytic converter define a separate patentable invention from engine. If an interference is declared, there would be one count (engine). Claims 1 and 2 of application J and claims 31, 32, and 33 of application K would be designated to correspond to the count. Claim 3 of application J would not be designated as corresponding to the count.
At recent public events, it has been suggested that there may be a need to expand the situations where an interference should be declared or maintained. Any decision to expand the nature of interference proceedings will have a resource consequence for USPTO and for applicants and patentees involved in interferences. Approximately one-quarter of the resources of the Board of Patent Appeals and Interferences are used to resolve interferences, notwithstanding the fact that there are many more appeals than interferences. USPTO has received many reports that interferences involve considerable costs for applicants and patentees. Additionally, there is no desire on the part of USPTO, and no authority under the law, to turn interference proceedings under 35 U.S.C. 135(a) into pre-grant oppositions or post-grant cancellations. Accordingly, USPTO is reluctant, at this time, to expand the circumstances under which an interference might be declared or maintained absent a compelling reason.
This notice provides interested parties with an opportunity to comment and make out a case that the nature of interferences should be expanded beyond the current practice. If a one-way patentability analysis is sufficient to establish an interference-in-fact, would it be possible to have an interference with two counts as set out in Example 4, reproduced above? How would having an interference between claim 1 of application G and claim 15 of application H of Example 4 square with the holding of
Comments should be submitted in electronic form if possible, either via the Internet or on a 3
35 U.S.C. 2(b)(2)(A), 3(a)(2), 135(a).
Committee for the Implementation of Textile Agreements (CITA).
Issuing a directive to the Commissioner of Customs adjusting limits.
December 20, 2000.
Roy Unger, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-4212. For information on the quota status of these limits, refer to the Quota Status Reports posted on the bulletin boards of each Customs port, call (202) 927-5850, or refer to the U.S. Customs website at http://www.customs.gov. For information on embargoes and quota re-openings, call (202) 482-3715.
Section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as amended.
The current limits for certain categories are being increased for carryforward.
A description of the textile and apparel categories in terms of HTS numbers is available in the CORRELATION: Textile and Apparel Categories with the Harmonized Tariff Schedule of the United States (see
Dear Commissioner: This directive amends, but does not cancel, the directive issued to you on November 2, 1999, by the Chairman, Committee for the Implementation of Textile Agreements. That directive concerns imports of certain cotton, wool, man-made fiber, silk blend and other vegetable fiber textiles and textile products, produced or manufactured in Taiwan and exported during the twelve-month period which began on January 1, 2000 and extends through December 31, 2000.
Effective on December 20, 2000, you are directed to adjust the current limits for the following categories, as provided for under the terms of the current bilateral textile agreement:
The Committee for the Implementation of Textile Agreements has determined that these actions fall within the foreign affairs exception of the rulemaking provisions of 5 U.S.C. 553(a)(1).
Sincerely,
Department of Education.
The Leader, Regulatory Information Management Group, Office of the Chief Information Officer invites comments on the submission for OMB review as required by the Paperwork Reduction Act of 1995.
Interested persons are invited to submit comments on or before January 19, 2001.
Written comments should be addressed to the Office of Information and Regulatory Affairs, Attention: Lauren Wittenberg, Acting Desk Officer, Department of Education, Office of Management and Budget, 725 17th Street, NW., Room 10235, New Executive Office Building, Washington, DC 20503 or should be electronically mailed to the internet address Lauren_Wittenberg@omb.eop.gov.
Section 3506 of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) requires that the Office of Management and Budget (OMB) provide interested Federal agencies and the public an early opportunity to comment on information collection requests. OMB may amend or waive the requirement for public consultation to the extent that public participation in the approval process would defeat the purpose of the information collection, violate State or Federal law, or substantially interfere with any agency's ability to perform its statutory obligations. The Leader, Regulatory Information Management Group, Office of the Chief Information Officer, publishes that notice containing proposed information collection requests prior to submission of these requests to OMB. Each proposed information collection, grouped by office, contains the following: (1) Type of review requested,
Requests for copies of the proposed information collection request may be accessed from
Comments regarding burden and/or the collection activity requirements should be directed to Kathy Axt at her internet address Kathy_Axt@ed.gov. Individuals who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
Pursuant to the Federal Advisory Committee Act (Pub. L. 92-463, and title 41, Code of Federal Regulations, subpart 101-6, Final Rule on Federal Advisory Committee Management), I hereby certify that the Commission on Fire Safety and Preparedness is necessary and in the public interest in connection with the performance of duties imposed on the Department of Energy by law. This determination follows consultation with the Committee Management Secretariat of the General Services Administration, pursuant to 41 CFR subpart 101-6.10.
The purpose of the Commission is to provide the Secretary of Energy and the Assistant Secretary of Environment, Safety and Health, with advice, information, and recommendations on the readiness of the Department of Energy complex for the threat of wildland and facility fires. The Commission will provide an organized forum to evaluate the nature of the risk of fire and concomitant risk of loss, the state of the Department's fire protection programs, and emergency response systems. The Commission will also
Commission members will be chosen to ensure an appropriately balanced representation of various points of view and functions of interested stakeholders and professionals, including fire safety engineering, fire science, firefighter safety, risk/benefit analysis, and emergency response systems. Particular attention will be given to obtaining diversity, a balance of subdisciplines, a balance of interests, experiences, and points of view. All meetings of the Commission will be noticed ahead of time in the
Further information regarding this Advisory Committee may be obtained from Amina Khan, Senior Policy Advisor, Office of Defense Programs, DP-1, 1000 Independence Avenue, SW., Washington, DC 20585, phone (202) 586-6982.
Savannah River Operations Office, Department of Energy.
Notice of public meetings.
The Department of Energy (DOE) will hold public meetings to discuss issues and gather information related to the Draft Environmental Impact Statement (EIS) on the proposed closing of additional high-level waste (HLW) tanks at the Savannah River Site (SRS). All persons are hereby given notice of the opportunity to attend and participate in these public meetings and to submit comments.
The Department will hold two public meetings—each with two sessions—to discuss the Draft EIS and receive comments. Dates and locations of those public meetings are listed below:
Comments on the Draft EIS may be submitted orally or in writing to DOE at the January 2001 public meetings; sent by facsimile or voice mail to 1-800-881-7292; sent by electronic mail to nepa@srs.gov; or mailed to Mr. Andrew Grainger, NEPA Compliance Officer, DOE-Savannah River Operations Office (SR), Building 742-A, Room 185, Aiken, SC 29802 (ATTN:
To request information about this Draft EIS and the public meetings, or to be placed on the EIS distribution list, use any of the methods listed in
The publication of the Notice of Availability of the Draft EIS in the
The Draft EIS evaluates three alternatives regarding closure of the HLW tanks: (1) Clean and Stabilize Tanks, (2) Clean and Remove Tanks, and (3) No Action Alternative. Under the Clean and Stabilize Tanks alternative, DOE is considering three options for tank stabilization: fill with grout (preferred alternative), fill with sand, or fill with saltstone.
Take notice that on December 8, 2000, ANR Pipeline Company (ANR) tendered for filing as part of its FERC Gas Tariff, Second Revised Volume No. 1, the following revised tariff sheet to be effective November 1, 2000:
ANR states that this filing is made to correct a clerical error incorrectly identifying the receipt point on contract 105502 as the Will County Interconnect instead of the Alliance/ANR Interconnect on the tariff sheet previously submitted on November 2, 2000 in Docket No. RP99-301-010.
ANR states that copies of the filing have been mailed to all affected customers and state regulatory commissions.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Section 385.211 of the Commission's Rules and Regulations. All such protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at
Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at
Take notice that on December 8, 2000, Columbia Gas Transmission Corporation (Columbia) tendered for filing as part of its FERC Gas Tariff, Second Revised Volume No. 1, the following revised tariff sheet, with a proposed effective date of August 1, 2000:
Columbia states that on June 23, 2000, Columbia filed tariff sheets in Docket No. RP00-354 to update its tariff consistent with Commission policy and decisions on tariff filings made by other interstate pipelines concerning permissible discounting arrangements and negotiated-rate authority related changes. On July 27, 2000, the Commission accepted the filed tariff sheets to be effective August 1, 2000, subject to Columbia making a compliance filing within 15 days. On November 24, 2000, the Commission issued an order accepting Columbia's August 9, 2000 compliance filing subject to the conditions therein, and granted and denied Columbia's request for rehearing. The instant filing is being made to comply with the November 24, 2000 Order.
Columbia states that copies of its filing have been mailed to all firm customers, interruptible customers, affected state commissions and parties on the official service list in this proceeding.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with section 385.211 of the Commission's Rules and Regulations. All such protests must be filed in accordance with section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance.) Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at http://www.ferc.fed.us/efi/doorbell.htm.
Take notice that on December 7, 2000, Entergy Services, Inc., tendered for filing its request to withdraw the Seventh Amendment to the Power Coordination, Interchange and Transmission Service Agreement filed with the Commission on October 26, 2000 in the above-referenced docket.
Any person desiring to be heard or to protest such filing should file a motion to intervene or protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). All such motions and protests should be filed on or before December 21, 2000. Protests will be considered by the Commission to determine the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Any person wishing to become a party must file a motion to intervene. Copies of this filing are on file with the Commission and are available for public inspection. This filing may also be viewed on the Internet at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance). Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at http://www.ferc.fed.us/efi./doorbell.htm.
Take notice that on December 8, 2000, Granite State Gas Transmission, Inc. (Granite State) tendered for filing as part of its FERC Gas Tariff, Third Revised Volume No. 1, Original Tariff Sheet No. 340 and Fourth Revised Sheet Nos. 341-399, to be effective November 1, 2000.
Granite State states that the purpose of the filing is to comply with the requirements of the order issued on November 9, 2000, in Docket No. RP01-58-000 and Order No. 587-L with respect ot the netting and trading of imbalances by shippers.
Granite State states that copies of this filing have been sent to Granite State's shippers and interested state regulatory commissions.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Section 385.211 of the Commission's Rules and Regulations. All such protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance). Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at http://www.ferc.fed.us/efi/doorbell.htm.
Take notice that on November 27, 2000, Great Lakes Gas Transmission Limited Partnership (Great Lakes) tendered its compliance filing with the Commission's Order on Filings to Establish Imbalance Netting and Trading Pursuant to order Nos. 587-G and 587-L [93 FERC ¶61,093 (2000)] issued on October 27, 2000 (October 27 Order).
Great Lakes states that the purpose of this filing is to comply with the requirements of the October 27 Order.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Section 385.211 of the Commission's Rules and Regulations. All such protests must be filed on or before December 21, 2000. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance). Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.200(a)(1)(iii) and the instructions on the Commission's web site at http://www.ferc.fed.us/efi/doorbell.htm.
Take notice that on December 11, 2000, Iroquois Gas Transmission System, L.P. (Iroquois) tendered for filing as part of its FERC Gas Tariff, First Revised Volume No. 1, the following revised tariff sheets, with an effective date of November 1, 2000:
Iroquois states that it is making this filing to revise its tariff to comply with the order issued by the Commission on November 9, 2000 entitled Order on Filing to Establish Imbalance Netting and Trading Pursuant to Order Nos. 587-G and 587-L. A Request for Rehearing on the captioned proceeding is being made contemporaneously with this filing.
Iroquois states that copies of its filing have been mailed to all firm customers, interruptible customers, state regulatory commissions and other interested parties.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Section 385.211 of the Commission's Rules and Regulations. All such protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance).
Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at http:\\www.ferc.fed.us/efi/doorbell.htm.
Take notice that on December 11, 2000, Northern Natural Gas Company (Northern) tendered for filing to become part of Northern's FERC Gas Tariff, Fifth Revised Volume No. 1, the following tariff sheets, proposed to become effective on December 12, 2000:
Northern states that the above sheets are being filed to implement a specific negotiated rate transaction with OGE Energy Resources, Inc. in accordance with the Commission's Policy Statement on Alternatives to Traditional Cost-of-Service Ratemaking for Natural Gas Pipelines.
Northern further states that copies of the filing have been mailed to each of its customers and interested State Commissions.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Section 385.211 of the Commission's Rules and Regulations. All such protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at
Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at
Take notice that on December 11, 2000, Portland Natural Gas Transmission System (PNGTS) tendered for filing as part of its FERC Gas Tariff, First Revised Volume No. 1, the following revised tariff sheet to become effective as indicated:
PNGTS states that the purpose of this filing is to comply with the requirements of the Commission's November 9, 2000 order addressing PNGTS's Order No. 587-L filing regarding the implementation of netting and trading of imbalances.
PNGTS states that copies of the filing were mailed to all affected customers and interested state commissions.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Section 385.211 of the Commission's Rules and Regulations. All such protests mut be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance). Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at http://www.ferc.fed.us/efi/doorbell.htm.
On July 17, 2000, Questar Pipeline Company (Questar) and Overthrust Pipeline Company (Overthrust) submitted filings to comply with Order No. 637. Several parties have protested various aspects of Questar's and Overthrust's filings. Subsequently, on October 10, 2000, Questar and Overthrust submitted filings to comply with Order Nos. 587-G and 587-L. The Commission accepted the 587-L filings subject to further consideration in Questar's and Overthrust's Order No. 637 filings.
Take notice that back-to-back technical conferences to discuss the various issues raised by Questar's and Overthrust's filings will be held on Thursday, January 11, 2001, at 9:00 A.M., in a room to be designated at the Federal Energy Regulatory Commission, 888 First Street, NE, Washington, DC 20426. The conferences will begin with a discussion of Questar's filings. These technical conferences may extend to Friday, January 12, 2001.
Among the major areas to be addressed is Questar's and Overthrust's segmentation proposals. Therefore, Questar and Overthrust should provide current maps of their systems and be prepared to discuss their systems operations. Parties protesting aspects of Questar's and Overthrust's filings should be prepared to discuss alternatives.
All interested persons and Staff are permitted to attend.
Take notice that Commission staff will hold a technical conference with Tacoma Power, the applicant for the Cowlitz River Project No. 2016; parties to the August 2000 Settlement Agreement; and other interested parties in the relicensing proceeding for the project. The conference will be held on January 4, 2001, from 9 a.m. to 4 p.m. at the U.S. Fish and Wildlife Service Office, 510 Desmond Drive, Sawyer Hall, Lacey, Washington.
The purpose of the conference is to discuss issues concerning the Ecosystem Diagnosis and Treatment (EDT) analysis and water temperature modeling information requested by the Commission on October 24, 2000, for preparation of its Environmental Impact Statement on the relicensing of the project. All interested individuals, organizations, and agencies are invited to attend the meeting.
For further information, please contact David Turner at (202) 219-2844.
Take notice that on December 12, 2000, Tennessee Gas Pipeline Company (Tennessee), tendered for filing and approval a Gas Transportation Agreement between Tennessee and Unocal Energy Trading, Inc. (Unocal) pursuant to Tennessee's Rate Schedule FT-A (FT-A Service Agreement) and a copy of a November 29, 2000 Firm Transportation Negotiated Rate Agreement entered into between Tennessee and Unocal (Negotiated Rate Agreement). The filed FT-A Service Agreement and the Negotiated Agreement reflect a negotiated rate arrangement between Tennessee and Unocal to be effective January 1, 2001 through September 30, 2003.
Any person desiring to be heard or to protest said filing should a motion to intervene or a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Sections 385.214 or 385.211 of the Commission's Rules and Regulations. All such motions or protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Any person wishing to become a party must file a motion to intervene. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at
Take notice that on December 11, 2000, Viking Gas Transmission Company (Viking) tendered for filing as part of its FERC Gas Tariff, First Revised Volume No. 1, the following tariff sheets to be effective March 1, 2001:
Viking states that the purpose of this filing is to comply with the Commission's Order on Filings to Establish Imbalance Netting and Trading Pursuant to Order Nos. 587-G and 587-L, issued November 9, 2000 in Docket No. RP01-47-000
Viking states that copies of the filing have been mailed to all of its jurisdictional customers and to affected state regulatory commission.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Section 385.211 of the Commission's Rules and Regulations. All such protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at
Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at
Take notice that on November 30, 2000, Wisconsin Electric Power Company (Wisconsin Electric), tendered for filing a request to extend the termination date of the power sales agreement filed with the Commission on August 28, 2000 in the above-referenced docket.
Any person desiring to be heard or to protest such filing should file a motion to intervene or protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). All such motions and protests should be filed on or December 22, 2000. Protests will be considered by the Commission to determine the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Any person wishing to become a party must file a motion to intervene. Copies of this filing are on file with the Commission and are available for public inspection. This filing may also be viewed on the Internet at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance). Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at
Take notice that the following filings have been made with the Commission:
Take notice that on December 5, 2000, American Ref-fuel Company of Hempstead, BFI Energy Systems of Hempstead, Inc., Allied Waste Industries, Inc., Duke/UAE Ref-Fuel LLC, Duke/UAE Hempstead LLC, Duke/UAE Hempstead II, Inc., United American Energy Corp. and Duke Energy Corporation tendered for filing a request that the Commission approve a disposition of facilities under Section 203 of the Federal Power Act in connection with a change in control over American Ref-Fuel Company of Hempstead and a change in the upstream ownership of United American Energy Corp. ARC-Hempstead leases and operates a biomass-fueled qualifying small power production facility with a capacity greater than 30 MW.
Take notice that on December 11, 2000, Redbud Energy LP (Redbud), a limited partnership with its principal place of business at 909 Fannin, Suite 2222, Houston, Texas 77010, filed with the Federal Energy Regulatory Commission (Commission) an application for determination of exempt wholesale generator status pursuant to Part 365 of the Commission's regulations.
Redbud states that it will be engaged directly and exclusively in the business of owning a 1200 MW natural gas fired, combined cycle electric generating facility and related assets to be located on an approximately 160 acre site located about 25 miles north east of Oklahoma City near the town of Luther,
Take notice that on December 8, 2000, Potomac Power Resources, Inc. (PPR), with its address at 1801 K Street, NW., Washington, DC 20068-0001, filed with the Federal Energy Regulatory Commission (FERC or the Commission) an application for determination of exempt wholesale generator status pursuant to part 365 of the Commission's regulations.
PPR is a Delaware corporation that will be engaged directly and exclusively in the business of owning and operating eligible facilities located in the District of Columbia. The eligible facilities consists of two generation plants. One plant is comprised of two oil-fired cycling units totaling approximately 550 MW and related interconnection facilities. The other plant is comprised of 18 oil-fired combustion turbines, totaling approximately 256 MW and related interconnection facilities. The output of the plants will be sold at wholesale in the United States.
Take notice that on December 8, 2000, the California Independent System Operator Corporation (the ISO) filed, pursuant to Rule 216 of the Commission's Rules of Practice and Procedure, 18 CFR 385.216, a notice of withdrawal of its Application for Transmission Order submitted in the above-referenced docket on December 1, 2000, and for which a Notice of Filing was issued by the Commission on December 6, 2000. The concurrence of San Diego Gas & Electric Company concerning the notice of withdrawal is attached.
The ISO states that this filing has been served upon SDG&E, the Public Utilities Commission of the State of California, and the California Electricity Oversight Board.
Take notice that on December 6, 2000, Cinergy Services Inc., on behalf of Cincinnati Gas & Electric Company and its public utility subsidiaries and PSI Energy Inc. (collectively Cinergy), tendered for filing their compliance filing in the above-captioned docket.
This filing has been served on all parties on the official service list in this proceeding.
Take notice that on December 8, 2000, Duke Energy Oakland, LLC tendered for filing an errata containing substitute revised tariff sheets in the above-referenced docket to correct schedules to its Must-Run Schedule.
Take notice that on December 8, 2000, West Georgia Generating Company, L.L.C. (West Georgia), tendered for filing an updated market power analysis in compliance with the Commission's order issued in this Docket on May 29, 1997.
Take notice that on December 6, 2000, Midwest Electric Power, Inc. (MEP) tendered for filing a Power Supply Agreement dated July 19, 2000 between MEP as Seller and Ameren Energy Marketing Company (Marketing Co.), Illinova Generating Company (Illinova), and LG&E Energy Marketing (LGE) as Purchasing Parties (the Agreement). MEP states that the Power Supply Agreement is identical to a Power Supply Agreement previously submitted on August 2, 2000, except that designations conforming to Order No. 614 have been added.
Take notice that on December 6, 2000, Koch Energy Trading, Inc. (KET) tendered for filing a notice of change in status, informing the Commission that Entergy Corporation, which intends to form a partnership with KET's parent, has announced an agreement to merge with FPL Group, Inc. KET also filed a revised code of conduct in accordance with the Commission's policies regarding transactions between power marketers and their public utility affiliates.
Take notice that on December 7, 2000, Pacific Gas and Electric Company (PG&E), tendered for filing a wholesale transmission refund report in compliance with an Order of the Federal Energy Regulatory Commission, Docket Nos. ER99-4323-000 and ER99-4323-001, dated September 15, 2000.
Copies of this filing have been served upon the California Independent System Operator Corporation, California Independent System Operator-registered Scheduling Coordinators, Southern California Edison Company, Sam Diego Gas and Electric Company, and the California Public Utilities Commission.
Take notice that on December 8, 2000, Commonwealth Edison Company tendered for filing a revised unexecuted Interconnection Agreement with University Park, LLC, and related supporting materials in compliance with the Commission's Order of November 8, 2000 in this docket.
Take notice that on December 8, 2000, LSP Energy Limited Partnership, LSP-Nelson Energy, LLC, and LSP-Kendall Energy, LLC (together, the LSP Project Companies), tendered for filing a Notification of Change in Status and Application for Acceptance of Pro Forma Revised FERC electric tariffs and related Codes of Conduct, in which the LSP Project Companies provide notice of their anticipated affiliation with electric utilities having franchised service territories, pursuant to a pending
Take notice that on December 8, 2000, PECO Energy Company, on behalf of Exelon Generation Company, L.L.C., tendered for filing revised service agreements in accordance with the Commission's order in Exelon Generation Company, L.L.C.,
E. Any person desiring to be heard or to protest such filing should file a motion to intervene or protest with the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). All such motions or protests should be filed on or before the comment date. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a motion to intervene. Copies of these filings are on file with the Commission and are available for public inspection. This filing may also be viewed on the Internet at
Take notice that the following filings have been made with the Commission:
Take notice that on December 7, 2000, Enron North America Corp. (ENA), Allegheny Energy Supply Company, LLC (AE Supply), Des Plaines Green Land Development, L.L.C. (Des Plaines), Gleason Power I, L.L.C. (Gleason) and West Fork Land Development Company, L.L.C. (West Fork) filed a joint application under Section 203 of the Federal Power Act for the disposition of jurisdictional facilities. Under the proposed transaction, ENA will sell 100 percent of its equity ownership interests in its wholly-owned subsidiaries Des Plaines, Gleason and West Fork to AE Supply. Des Plaines, Gleason and West Fork are generation-owning public utilities with market-based rate schedules on file with the Commission.
Take notice that on December 5, 2000, Cinergy Services, Inc. (Cinergy) and Montaup Electric Company filed a Notice of Cancellation of Service Agreement No. 44, under Cinergy Operating Companies, Cost-Based Power Sales Tariff—CB, FERC Electric Tariff Original Volume No. 6.
Cinergy requests an effective date of October 13, 2000.
Take notice that on December 7, 2000, American Transmission Company LLC (ATCLLC) tendered for filing a Distribution-Transmission Agreement between ATCLLC and Wisconsin Public Service Corporation.
ATCLLC requests an effective date of January 1, 2001.
Take notice that on December 7, 2000, Entergy Services, Inc., on behalf of Entergy Arkansas, Inc., tendered for filing the Seventh Amendment to the Power Coordination, Interchange and Transmission Service Agreement between Entergy Arkansas, Inc. and the City of Conway, dated October 12, 2000. The Seventh Amendment modifies Exhibit A to Appendix A of Rate Schedule No. 98 by establishing a new point of delivery.
Take notice that on December 7, 2000, Allegheny Energy Service Corporation on behalf of Allegheny Energy Supply Company, LLC (Allegheny Energy Supply) filed Service Agreement No. 103 to add one (1) new Customer to the Market Rate Tariff under which Allegheny Energy Supply offers generation services.
Allegheny Energy Supply proposes to make service available as of November 13, 2000 to Borough of Park Ridge.
Copies of the filing have been provided to the Public Utilities Commission of Ohio, the Pennsylvania Public Utility Commission, the Maryland Public Service Commission, the Virginia State Corporation Commission, the West Virginia Public Service Commission, and all parties of record.
Take notice that on December 7, 2000, Allegheny Energy Service Corporation on behalf of Allegheny Energy Supply Company, LLC (Allegheny Energy Supply Company) filed First Revised Service Agreement No. 80 to complete the filing requirement for one (1) new Customer of the Market Rate Tariff
Allegheny Energy Supply maintains the effective date of Service Agreement No. 80 of December 8, 1999 for service to Reliant Energy Services, Inc.
Copies of the filing have been provided to the Public Utilities Commission of Ohio, the Pennsylvania Public Utility Commission, the Maryland Public Service Commission, the Virginia State Corporation Commission, the West Virginia Public Service Commission, and all parties of record.
Take notice that on December 7, 2000, Allegheny Energy Service Corporation on behalf of Monongahela Power Company, The Potomac Edison Company and West Penn Power Company (Allegheny Power) filed Service Agreement No. 73 to add one (1) new Customer to the Market Rate Tariff under which Allegheny Power offers generation services.
Allegheny Power requests a waiver of notice requirements to make service available as of December 1, 2000 to PG&E Energy Trading—Power, L.P.
Copies of the filing have been provided to the Public Utilities Commission of Ohio, the Pennsylvania Public Utility Commission, the Maryland Public Service Commission, the Virginia State Corporation Commission, the West Virginia Public Service Commission, and all parties of record.
Take notice that on December 7, 2000, Public Service Company of New Mexico (PNM) tendered for filing, pursuant to section 205 of the Federal Power Act, 16 U.S.C. § 824d (1994), proposed revisions to its FERC Electric Tariff, Original Volume No. 3. PNM also submits a Statement of Policy and Code of Conduct to govern the relationship between PNM and wholesale power marketing affiliates, and notifies the Commission of a change in status relating to PNM's authorization to sell power at market-based rates.
Take notice that on December 7, 2000, Arizona Public Service Company (APS) tendered for filing Service Agreements to provide Long-Term Firm Point-to-Point Transmission Service to Idaho Power Company dba IDACORP Energy under APS' Open Access Transmission Tariff.
A copy of this filing has been served on Idaho Power Company dba IDACORP Energy, and the Arizona Corporation Commission.
Take notice that on December 7, 2000, UGI Utilities, Inc. tendered for filing an Interconnection Agreement with Allegheny Energy Supply Company, L.L.C, designated as Service Agreement No. 535 under PJM Interconnection L.L.C.”s FERC Electric Tariff Third Revised Volume No. 1.
UGI Utilities, Inc. requests an effective date of November 10, 2000.
Take notice that on December 7, 2000, Cinergy Services, Inc. (Cinergy) tendered for filing a Market-Based Service Agreement under Cinergy's Market-Based Power Sales Standard Tariff-MB (the Tariff) entered into between Cinergy and Wisconsin Public Service Corporation (WPSC).
Cinergy and WPSC are requesting an effective date of November 13, 2000.
Take notice that on December 7, 2000, the California Independent System Operator Corporation tendered for filing an Amendment to Schedule 1 of the Participating Generator Agreement between the ISO and Sierra Pacific Industries (Sierra Pacific) for acceptance by the Commission.
The ISO states that this filing has been served on Sierra Pacific and the California Public Utilities Commission.
The ISO is requesting waiver of the 60-day notice requirement to allow the Participating Generator Agreement to be made effective October 9, 2000.
Take notice that on December 7, 2000, Wisconsin Public Service Corporation tendered for filing an executed service agreement with Split Rock Energy LLC under its Market-Based Rate Tariff, FERC Electric Tariff Volume No. 10.
Take notice that on December 7, 2000, The Detroit Edison Company (Detroit Edison) tendered for filing Service Agreements (Service Agreements) for Short-term Firm and Non-Firm Point-to-Point Transmission Service under the Joint Open Access Transmission Tariff of Consumers Energy Company and Detroit Edison, FERC Electric Tariff No. 1. These Service Agreements are between Detroit Edison and H. Q. Energy Services (US), Inc., dated as of November 20, 2000. The parties have not engaged in any transactions under the Service Agreements prior to thirty days to this filing.
Detroit Edison requests that the Service Agreements be made effective as rate schedules as of December 20, 2000.
Take notice that on December 7, 2000, The Detroit Edison Company (Detroit Edison) tendered for filing a Service Agreement (Service Agreement) for Network Integration Transmission Service under the Joint Open Access Transmission Tariff of Consumers Energy Company and Detroit Edison, FERC Electric Tariff No. 1. The Service Agreement is between Detroit Edison and Nordic Marketing, L.L.C., dated as of November 7, 2000. The parties have not engaged in any transactions under the Service Agreement prior to thirty days to this filing.
Detroit Edison requests that the Service Agreement be made effective as rate schedules as of December 8, 2000.
Take notice that on December 7, 2000, Des Plaines Green Land Development, L.L.C. (Des Plaines), Gleason Power I, L.L.C. (Gleason), and West Fork Land Development Company, L.L.C. (West Fork) filed a Notification of Change in Status and Petition for Acceptance of Pro Forma Revised Rate Schedules in anticipation of Enron North America Corp.'s sale of its equity ownership interests in Des Plaines, Gleason and West Fork to Allegheny Energy Supply Company, LLC, all as more fully described in the Application.
Take notice that on December 8, 2000, the American Electric Power Service Corporation (AEPSC) tendered for filing executed Interconnection and Operation Agreement between Indiana Michigan Power Company and Duke Energy Berrien, LLC. The agreement is pursuant to the AEP Companies' Open Access Transmission Service Tariff (OATT) that has been designated as the Operating Companies of the American Electric Power System FERC Electric Tariff Revised Volume No. 6, effective June 15, 2000.
AEP requests an effective date of February 1, 2001.
A copy of the filing was served upon the Indiana Utility Regulatory Commission and the Michigan Public Service Commission.
Take notice that on December 8, 2000, Commonwealth Edison Company (ComEd) submitted for filing a “form of” agreement entitled Ancillary and Other Control Area Services Resources Purchase Agreement (hereafter Agreement) between ComEd and to be named company, described in the Agreement as “Genco, Inc.”. Exelon Corporation, the recently formed holding company which owns the ComEd system, intends to establish Genco, Inc., as a subsidiary which will own all of the generating assets of the Exelon system. This will include the assets which ComEd currently holds in Northern Illinois and from which ComEd currently obtains the generation related support necessary to provide ancillary services under its Open Access Transmission Tariff (OATT). The Agreement specifies the terms on which ComEd will receive and purchase, and Genco, Inc. will deliver and sell, the generating resources necessary to meet ComEd's obligation to supply energy imbalance and other ancillary service under its OATT, and other control area services and imbalance service to generators under specific interconnection agreements with various generators.
ComEd requests an effective date as of the actual date that its generating assets are transferred to Genco, Inc., currently anticipated to be on or about January 1, 2001. Accordingly, ComEd seeks waiver of the Commission's notice requirements.
Copies of the filing were served upon ComEd's jurisdictional customers and interested state commissions.
Take notice that on December 8, 2000, American Transmission Systems, Inc.. tendered for filing on behalf of itself and Ohio Edison Company, The Cleveland Electric Illuminating Company, and The Toledo Edison Company, Service Agreements for Network Integration Service and Operating Agreements for the Network Integration Transmission Service under the Ohio Retail Electric Program with Strategic Energy, L.L.C. and Allegheny Energy Supply, LLC pursuant to the American Transmission Systems, Inc. Open Access Tariff. These agreements will enable the parties to obtain Network Integration Service under the Ohio Retail Electric Program in accordance with the terms of the Tariff.
The proposed effective date under these agreements is January 1, 2001.
Take notice that on December 8, 2000, Arizona Public Service Company (APS) tendered for filing Service Agreement to provide Long-Term Firm Point-to-Point Transmission Service to Public Service Company of New Mexico, Wholesale Power Marketing under APS' Open Access transmission Tariff.
A copy of this filing has been served on the Public Service Company of New Mexico, Wholesale Power Marketing and the Arizona Corporation Commission.
Take notice that on December 8, 2000, Arizona Public Service Company (APS) tendered for filing umbrella Service Agreements to provide Short-term Firm and Non-Firm Point-to-Point Transmission Service to Legacy Energy Group, LLC under APS' Open Access Transmission Tariff.
A copy of this filing has been served on Legacy Energy Group, LLC and the Arizona Corporation Commission.
Take notice that on December 8, 2000, Commonwealth Edison Company and Commonwealth Edison Company of Indiana, Inc. (collectively ComEd) filed to amend Schedules 4, 4A and 4G to ComEd's Open Access Transmission Tariff (OATT).
ComEd requests an effective date of January 1, 2001.
Copies of the filing were served upon ComEd's jurisdictional customers and interested state commissions.
E. Any person desiring to be heard or to protest such filing should file a motion to intervene or protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental assessment (EA) that will discuss the environmental impacts of the Holy Trinity Looping Project involving construction and operation of facilities by Southern Natural Gas Company (Southern) in Russell County, Alabama and Stewart County, Georgia.
If you are a landowner receiving this notice, you may be contacted by a pipeline company representative about the acquisition of an easement to construct, operate, and maintain the proposed facilities. The pipeline company would seek to negotiate a mutually acceptable agreement. However, if the project is approved by the Commission, that approval conveys with it the right of eminent domain. Therefore, if easement negotiations fail to produce an agreement, the pipeline company could initiate condemnation proceedings in accordance with state law.
A fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” was attached to the project notice Southern provided to landowners. This fact sheet addresses a number of typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. It is available for viewing on the FERC Internet website (www.ferc.fed.us).
Southern wants to expand its transmission system's capacity to transport natural gas by constructing 7 miles of 16-inch-diameter looping alongside the right-of-way (ROW) of its existing 16-inch diameter pipeline. The required ROW width would include 50 feet of existing ROW and 35 feet of additional temporary ROW for a total construction ROW width of 85 feet. The total after-construction ROW width would be 70 feet. Temporary 25-foot by 100-foot workspaces would be required at wetland, directional drills of waterbodies, and turnaround areas. A 3.87-acre temporary warehouse/pipe storage yard (Warehouse 1) located about 3 miles south of the proposed pipeline on the outskirts of Omaha, Georgia at County Roads 34 and 39 would be required. Another 3.06-acre temporary warehouse/pipe storage yard (Warehouse 2) at milepost 34.0 would be required. The Chattahoochee River at milepost 29.67, a tributary/wetland associated with Hannahatchee Creek at milepost 33.6, and Hannahatchee Creek at milepost 34.6 would all be directionally drilled. Approximately 10 access roads would be required and some of them would be widened.
The locations of the project facilities, warehouse/pipe storage yards, and access roads are shown in appendix 1, figures 1 and 2.
Construction of the proposed facilities would require the use of 85 acres of land. This includes 43 acres of previously disturbed existing ROW, 25 acres of previously undisturbed temporary ROW, and 17 acres of previously undisturbed permanent ROW.
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. NEPA also requires us
The EA will discuss impacts that could occur as a result of the construction and operation of the proposed project under these general headings:
We will also evaluate possible alternatives to the proposed project or portions of the project, and make recommendations on how to lessen or avoid impacts on the various resource areas.
Our independent analysis of the issues will be in the EA. Depending on the comments received during the scoping process, the EA may be published and mailed to Federal, state, and local agencies, public interest groups, interested individuals, affected landowners, newspapers, libraries, and the Commission's official service list for this proceeding. A comment period will be allotted for review if the EA is published. We will consider all comments on the EA before we make our recommendations to the Commission.
To ensure your comments are considered, please carefully follow the instructions in the public participation section below.
We have already identified several issues that we think deserve attention based on a preliminary review of the proposed facilities and the environmental information provided by Southern. This preliminary list of issues may be changed based on your comments and our analysis.
• Construction within 300 feet of the Blessed Trinity Mission and nearby sewage treatment pond.
• Construction for approximately 1 mile across the Chattahoochee River floodplain and for approximately 1 mile across the Hannahatchee Creek floodplain.
• Use of a 3.87-acre temporary warehouse/pipe storage yard (Warehouse 1) located on the outskirts of Omaha, Georgia, at County Roads 34 and 39, and use of a 3.06-acre temporary warehouse/pipe storage yard (Warehouse 2) at milepost 34.0 in Stewart County, Georgia.
• The widening of 10 logging roads up to 25 feet wide for use as temporary access roads.
You can make a difference by providing us with your specific comments or concerns about the project. By becoming a commentor, your concerns will be addressed in the EA and considered by the Commission. You should focus on the potential environmental effects of the proposal, alternatives to the proposal (including alternative routes), and measures to avoid or lessen environmental impact. The more specific your comments, the more useful they will be. Please carefully follow these instructions to ensure that your comments are received in time and properly recorded:
• Send an original and two copies of your letter to: David P. Boergers, Secretary, Federal Energy Regulatory Commission, 888 First Street, St., NE., Room 1A, Washington, DC 20426.
• Label one copy of the comments for the attention of Gas 2.
• Reference Docket No. CP01-035-000.
• Mail your comments so that they will be received in Washington, DC on or before January 16, 2001.
Comments may also be filed electronically via the Internet in lieu of paper. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at
In addition to involvement in the EA scoping process, you may want to become an official party to the proceeding known as an “intervenor”. Intervenors play a more formal role in the process. Among other things, intervenors have the right to receive copies of case-related Commission documents and filings by other intervenors. Likewise, each intervenor must provide 14 copies of its filings to the Secretary of the Commission and must send a copy of its filings to all other parties on the Commission's service list for this proceeding. If you want to become an intervenor you must file a motion to intervene according to Rule 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.214) (see appendix 2). Only intervenors have the right to seek rehearing of the Commission's decision.
Affected landowners and parties with environmental concerns may be granted intervenor status upon showing good cause by stating that they have a clear and direct interest in this proceeding which would not be adequately represented by any other parties. You do not need intervenor status to have your environmental comments considered.
Additional information about the proposed project is available from the Commission's Office of External Affairs at (202) 208-0004 or on the FERC website (www.ferc.fed.us) using the “RIMS” link to information in this docket number. Click on the “RIMS” link, select “Docket #” from the RIMS Menu, and follow the instructions. For assistance with access to RIMS, the RIMS helpline can be reached at (202) 208-2222.
Similarly, the “CIPS” link on the FERC Internet website provides access to the texts of formal documents issued by the Commission, such as orders, notices, and rulemakings. From the FERC Internet website, click on the “CIPS” link, select “Docket #” from the CIPS menu, and follow the instructions. For assistance with access to CIPS, the CIPS helpline can be reached at (202) 208-2474.
Federal Energy Regulatory Commission.
12/11/2000, 65 FR 77365.
December 13, 2000, 10 a.m.
The following Docket Nos. and Company have been added to Item CAE-2 on the December 13, 2000 Commission meeting.
Environmental Protection Agency (EPA).
Notice.
This Information Collection Request (ICR) is a renewal of an existing ICR that is currently approved by the Office of Management and Budget (OMB) and is due to expire September 30, 2001. This data collection program is designed to provide EPA with necessary data to evaluate an application for a permit for the temporary shipment and use of a pesticide product for an unregistered use to mitigate an emergency situation, and to evaluate the effectiveness of that product in allaying the emergency. Requests for Section 18 emergency exemptions, thus submission of the application, are at the discretion of a State, U.S. Territory, or Federal agency. Should one of these entities apply for the emergency, then the information and data herein are requested by EPA.
Written comments, identified by the docket control number OPP-00691, must be received on or before February 20, 2001.
Comments may be submitted by mail, electronically, or in person. Please follow the detailed instructions for each method as provided in Unit III. of the
By mail: Nancy Vogel, Field and External Affairs Division (7506C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 305-6475; fax number: (703) 305-5884; e-mail address: vogel.nancy@epa.gov.
You may be potentially affected by this action if you are a Federal, U.S. Territory, or State agency responsible for the regulation of pesticides. Potentially affected categories and entities may include, but are not limited to:
This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this table could also be affected. The North American Industrial Classification System (NAICS) code and the Standard Industrial Classification (SIC) code are provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under
You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. On the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “
Using a faxphone call (202) 401-0527 and select item 6085 for a copy of the ICR.
The Agency has established an official record for this action under docket control number OPP-00691. The official record consists of the documents specifically referenced in this action, any public comments received during an applicable comment period, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period, is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.
You may submit comments through the mail, in person, or electronically. To ensure proper receipt by EPA, it is imperative that you identify docket control number OPP-00691 in the subject line on the first page of your response.
1.
2.
3.
Do not submit any information electronically that you consider to be CBI. You may claim information that you submit to EPA in response to this document as CBI by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public version of the official record. Information not marked confidential will be included in the public version of the official record without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person listed under
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Provide specific examples to illustrate your concerns.
6. Offer alternative ways to improve the collection activity.
7. Make sure to submit your comments by the deadline in this notice.
8. To ensure proper receipt by EPA, be sure to identify the docket control number and administrative record number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
Pursuant to section 3506(c)(2)(A) of the Paperwork Reduction Act (PRA), EPA specifically solicits comments and information to enable it to:
1. Evaluate whether the proposed collections of information are necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility.
2. Evaluate the accuracy of the Agency's estimates of the burdens of the proposed collections of information.
3. Enhance the quality, utility, and clarity of the information to be collected.
4. Minimize the burden of the collections of information on those who are to respond, including through the use of appropriate automated or electronic collection technologies or other forms of information technology, e.g., permitting electronic submission of responses.
EPA is seeking comments on the following ICR:
Under the PRA, “burden” means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. For this collection it includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.
The ICR provides a detailed explanation of this estimate, which is only briefly summarized in this notice. The annual public burden for collection of information associated with the rule is estimated to average 99 hours per application, including time for reading the regulations, processing, compiling and reviewing the requested data, generating application correspondence or summary reports, and storing, filing, and maintaining the data. The following is a summary of the estimates taken from the ICR:
The total burden associated with this ICR has increased 15,934 hours, from 43,466 hours in the previous ICR to 59,400 hours for this ICR. This change reflects several adjustments to the ICR calculations which are described in detail in the ICR.
EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. EPA will issue another
Environmental protection, Pesticides and pests.
Environmental Protection Agency (EPA).
Notice of regulatory finding.
This notice presents EPA's finding required by section 112(n)(1)(A) of the Clean Air Act (CAA) as to whether regulation of emissions of hazardous air pollutants (HAP) from fossil fuel-fired electric utility steam generating units (as defined in section 112(a)(8) of the CAA) is appropriate and necessary. This finding is based on the results of EPA's February 1998 “Study
Docket No. A-92-55, containing information used in development of this notice, is available for public inspection and copying between 8:00 a.m. and 5:30 p.m., Monday through Friday, excluding legal holidays. The docket is located in EPA's Air and Radiation Docket and Information Center, Waterside Mall, Room M-1500, 401 M Street, SW, Washington, DC 20460, or by calling (202) 260-7548. A reasonable fee may be charged for copying docket materials.
Mr. William Maxwell, Emission Standards Division (MD-13), U.S. EPA, Research Triangle Park, North Carolina 27711, telephone number (919) 541-5430, facsimile number (919) 541-5450, electronic mail address <maxwell.bill@epa.gov>.
Today's finding is issued under the authority of section 112(n)(1)(A) and 112(c) of the CAA. Section 112(n)(1)(A) requires that, after considering the results of the study mandated by the same section and reported in the utility RTC, the Administrator determine whether regulation of HAP emissions from electric utility steam generating units is appropriate and necessary. The study was initiated following enactment of the 1990 Amendments to the CAA, which included section 112(n)(1)(A). Data were gathered, and the utility RTC was prepared. Section 112(c) provides that the Administrator shall list categories of sources of the air pollutants contained in the section 112(b) list. The listing of source categories under section 112(c) is a dynamic process. (See “Initial List of Categories of sources under Section 112(c)(1) of the Clean Air Act Amendments of 1990,” 57 FR 31576.) Decisions as to the description and scope of source categories listed will be perfected during the course of the rulemaking process for each listed category and will take account of improvements in available information and analysis during the rulemaking. A draft utility RTC was submitted for scientific peer review in July 1995, and, concurrently, was made available for public review (60 FR 35393). A public meeting to obtain comments from the scientific peer review panel was held on July 11-12, 1995 in Research Triangle Park, North Carolina. In addition, a public outreach meeting was held on July 13, 1995 in Durham, North Carolina, at which time the public was invited to present oral comments on its interpretation of the “results of the study.” The utility RTC was finalized in February 1998 and released to Congress and the public. In the final utility RTC, the EPA stated that, for the utility industry, mercury from coal-fired electric utility steam generating units was the HAP of greatest concern for public health.
To further inform the regulatory finding, the EPA issued an information collection request under the authority of section 114 of the CAA to all coal-fired electric utility steam generating units requesting coal data from such units for calendar year 1999. Certain units were also required to conduct stack tests to evaluate their HAP emissions. In addition, the EPA solicited data from the public through a February 29, 2000 notice (65 FR 10783). Another public meeting was held on June 13, 2000 in Chicago, Illinois, where the public was invited to provide EPA with their views on what the regulatory finding should be (65 FR 18992).
Further, the EPA undertook an evaluation of the mercury control performance of various emission control technologies that are either currently in use on electric utility steam generating units for pollutants other than mercury or that could be applied to such units for mercury control. The evaluation was conducted along with other parties, including the Department of Energy (DOE).
In addition, at the direction of Congress, the EPA funded the National Academy of Sciences (NAS) to perform an independent evaluation of the available data related to the health impacts of methylmercury and provide recommendations for EPA's reference dose (RfD—the amount of a chemical which, when ingested daily over a lifetime, is anticipated to be without adverse health effects to humans, including sensitive subpopulations). The NAS conducted an 18-month study of the available data on the health effects of methylmercury and provided EPA a report of its findings in July 2000.
The following four sections present a summary of the information and conclusions presented in the utility RTC along with the information obtained subsequent to publishing the utility RTC.
The EPA evaluated exposures, hazards, and risks due to HAP emissions from coal-, oil-, and natural gas-fired electric utility steam generating units. Much of the assessment focused on inhalation exposure. However, multipathway exposures (
Based on the assessment of hazards and risks due to emissions of HAP from electric utility steam generating units, mercury is the HAP of greatest concern. Mercury is highly toxic, persistent, and bioaccumulates in food chains. Mercury emitted from electric utility steam generating units (and other sources), primarily in the elemental or divalent forms, is transported through the atmosphere and eventually deposits onto land or water bodies (with the divalent form depositing nearer the source than the elemental form). Once deposited, the chemical form of mercury can change (through a methylation process) into methylmercury which is a highly toxic, more bioavailable, form that biomagnifies in the aquatic food chain (
Because the developing fetus is the most sensitive to the effects of methylmercury, the greatest concern is the consumption of mercury contaminated fish by women of childbearing age. Also of particular concern are subsistence fish-eating populations that may be consuming fish from contaminated waterbodies. The EPA estimates that about 7 percent of women of childbearing age (
Most of the mercury currently entering U.S. water bodies and contaminating fish is the result of air emissions which, following atmospheric transport, deposit onto watersheds or directly to water bodies. Wastewater discharges also contribute to environmental loadings, but to a much lesser degree than air emissions. Based on modeling conducted for the mercury RTC, the EPA estimates that roughly 60 percent of the total mercury deposited in the U.S. comes from U.S. anthropogenic air emission sources; the percentage is estimated to be even higher in certain regions (
With regard to the other HAP, arsenic and a few other metals (
The other HAP studied in the risk assessment do not appear to be a concern for public health based on the available information. However, because of data gaps and uncertainties, it is possible that future data collection efforts or analyses may identify other HAP of potential concern.
In developing the utility RTC, the EPA examined HAP emissions test data acquired by the DOE, electric utility companies and organizations, and EPA itself. Further, using section 114 authority, the EPA obtained data from each coal-fired electric utility unit to update and refine the information on mercury emissions from such units. After evaluating various methods to estimate the emissions, the EPA estimates that the industry emitted 43 tons of mercury in 1999 from 1,149 units at 464 coal-fired plants.
The analyses of the data obtained are explained in the utility RTC and in subsequent documentation. Table 1 of this notice presents estimated 1990 and 2010 nationwide HAP emissions from electric utility steam generating units as presented in the utility RTC. The estimates account for projected changes in the population of units, fuel consumption, and control device configurations. Coal- and oil-fired electric utility steam generating units are major sources (as defined in section 112(a)(1) of the CAA) of hydrogen chloride and hydrogen fluoride emissions, emit a significant number of
For mercury, it was estimated in the utility RTC that the industry emitted approximately 46 tons in 1990 (51 tons in 1994) and was projected to emit approximately 60 tons in 2010 from 1,026 units at 426 coal-fired plants. The new information obtained under section 114 authority corroborates the emissions estimates. The increase in the number of units over that of the utility RTC results primarily from the identification of additional co-generation facilities meeting the section 112(a)(8) definition. The quality of the 1999 data is considered to be significantly better than that of the data reported in the utility RTC. Specific coal data, including the mercury content, were obtained for each coal-fired unit in the U.S. over the entire year; previously, State-average data were used. In addition, the control performance of existing control devices for each of the three major species of mercury (divalent, elemental, and particulate) were available; for the utility RTC, only total mercury values were available. The new data allowed EPA to significantly refine and improve its analyses and evaluate various methodologies in estimating nationwide mercury emissions from coal-fired electric utility steam generating units.
Recent data show the technologies used to control criteria pollutants (particulate matter (PM), nitrogen oxides ( NO
Potential strategies for controlling mercury and other HAP emissions include the use of: precombustion controls (
Conversion of coal- and oil-fired units to natural gas firing effectively eliminates HAP emissions. Although conversion of coal-fired units to oil combustion will decrease emissions of some HAP, including mercury, it could increase emissions of others (especially nickel). Because of the wide variability in the trace metal contents of coals, switching coals generally may not result in consistently reduced HAP emissions. Current methods of coal cleaning remove portions of the trace metals contained within the coal; the average emissions reductions range from approximately 30 percent for mercury to approximately 50 percent for lead.
Nontraditional control methods (
Mercury in the flue gas from coal combustion may be present in three different forms. The forms, called species, include elemental mercury, divalent oxidized forms, and mercury adsorbed onto the surface of fly ash or other particles. The capture of mercury is highly dependent on the relative amount of mercury species that are present in the flue gas. Particulate bound mercury can easily be removed in conventional PM emission control devices such as electrostatic precipitators (ESP) and fabric filters (FF). Divalent forms of mercury are generally soluble in water and can be captured in wet scrubbers. Wet flue gas desulfurization (FGD) systems generally capture more than 90 percent of the divalent mercury, which may represent a 20 to 80 percent removal of the total mercury. Elemental mercury is insoluble in water, does not react with alkaline reagents used in FGD systems, and cannot be captured in wet scrubbers. Both the elemental and divalent forms of mercury can be adsorbed onto porous solids (
The available data indicate that installation of low-NO
Electrostatic precipitators and FF generally remove greater than 90 percent of all trace metallic HAP, with the exception of mercury. They are not effective in reducing emissions of gas-phase HAP, which include trace organic HAP and HAP such as hydrogen chloride and hydrogen fluoride.
Mechanical collectors and wet PM scrubbers are not generally effective in reducing HAP emissions. Mechanical collectors capture only HAP that are associated with large particles; fine-particle HAP and gas-phase HAP pass through and are emitted to the atmosphere. Wet PM scrubbers are moderately effective in reducing water-soluble HAP but do not effectively reduce HAP emissions associated with fine particulate or hydrophobic volatile organic HAP.
Dry scrubbers which employ a spray dryer adsorber (SDA) in conjunction with an ESP or FF are typically very effective in reducing HAP emissions. In SDA systems, water containing an acid gas sorbent is sprayed into a reaction vessel where the acid gases and other pollutants are reacted to form solid particles that can be collected in a downstream PM control device. Some coal-fired utilities that use bituminous coal in pulverized coal-fired units have shown mercury capture in excess of 90 percent in SDA/FF systems.
Wet FGD systems are capable of capturing nearly all HAP other than mercury and more than 90 percent of the divalent and particle bound mercury. Mercury removal in wet FGD systems may range from less than 20 to more then 80 percent, depending on the type of coal and combustion system used. Mercury capture in such units can be improved by the use of catalysts or reagents to increase the conversion of elemental mercury to soluble divalent forms of mercury.
Recent research indicates that mercury removal may be enhanced through the use of oxidizing agents (that convert elemental mercury to the ionized form) or through the use of sorbents (that adsorb the mercury onto solid particles). Enhanced mercury removal may also be achieved through greater use of multipollutant control options. Recent data indicate that the use of selective catalytic or noncatalytic reduction for NO
Thus, EPA's analysis of potential HAP control strategies allows EPA to conclude that, during the regulatory development process, effective controls for mercury and other HAP can be shown to be feasible.
The following conclusions summarize those presented in the utility RTC and those based on the information subsequently obtained and are based on the currently available scientific data. The conclusions, as a whole, support a finding that regulation of coal-and oil-fired electric utility steam generating units for HAP is appropriate and necessary.
1. Fossil fuel-fired electric utility steam generating units (coal-and oil-fired units in particular) emit a significant number of the 188 HAP included on the section 112(b) list. Estimated growth in the number of, and fuel use by, electric utility steam generating units (particularly coal-fired units) during the period 1990 to 2010 will result in an overall increase in HAP emissions. The new data gathered to date corroborate the previous nationwide mercury emissions estimate and confirm that electric utility steam generating units are the largest anthropogenic source of mercury in the U.S.
2. Mercury is highly toxic, persistent, and bioaccumulates in the food chain. Mercury emissions are transported through the atmosphere and eventually deposit onto land or water bodies. The deposition can occur locally near the source or at long distances (
3. Neurotoxicity is the health effect of greatest concern with methylmercury exposure. Methylmercury has a relatively long half-life in the human body (averaging about 70 to 80 days). Dietary methylmercury is almost completely absorbed into the blood and distributed to all tissues including the brain; it also readily passes through the placenta to the fetus and fetal brain. The developing fetus is considered most sensitive to the effects from methylmercury; therefore, women of childbearing age are the population of greatest concern. Offspring born of women exposed to relatively high levels of methylmercury during pregnancy have exhibited a variety of developmental neurological abnormalities, including delayed developmental milestones, cerebral palsy, and reduced neurological test scores. Studies suggest that far lower levels of in utero exposures have resulted in delays and deficits in learning abilities. It is also possible that children exposed after birth are also potentially more sensitive to the toxic effects of methylmercury than adults because their nervous systems are still developing.
4. Extrapolating from high-dose exposure incidents, the EPA derived an RfD for methylmercury of 0.1 ug/kg/day based on developmental neurological effects observed in children born to mothers exposed to methylmercury during their pregnancy. The NAS study determined that EPA's RfD is a scientifically justifiable level for the protection of public health. At the RfD or below, exposures are expected to be safe. The risks following exposures above the RfD are uncertain, but risk increases as exposures to methylmercury increase.
5. The results of recent dietary surveys indicate that most of the U.S. population consumes fish and is exposed to methylmercury as a result. Based on the surveys, about 85 percent of adults in the U.S. consume fish at least once a month, about 40 percent of adults consume fish once a week, and 1 to 2 percent of adults consume fish almost daily.
6. The EPA estimates that about 7 percent of women of childbearing age (i.e., between the ages of 15 and 44 years) are exposed to methylmercury at levels exceeding the RfD and about 1
7. Exposure to methylmercury can have serious toxicologic effects on wildlife as well as on humans. Adverse effects to avian species and wildlife have been observed in laboratory studies at levels corresponding to fish tissue methylmercury concentrations that are exceeded by a significant percentage of fish sampled in lake surveys. Generally, wildlife consume fish from a much more limited geographic area than do humans which can result in elevated levels of mercury in certain fish-eating species in localized geographic areas. Those species can include kingfisher, river otter, racoon, loon, as well as some endangered species such as the Florida panther.
8. The EPA predicts that increased mercury deposition will lead to increased levels of methylmercury in fish, and that increased levels in fish will lead to toxicity in fish-eating birds and mammals, including humans. The NAS, in its July 2000 report, stated that “because of the beneficial effects of fish consumption, the long-term goal needs to be a reduction in the concentrations of methylmercury in fish.” The EPA agrees with that goal and believes that reducing emissions of mercury from electric utility steam generating units is an important step toward achieving the goal.
9. There are a number of alternative control strategies that are effective in controlling some of the HAP emitted from electric utility steam generating units. Recent data indicate that mercury, perhaps the hardest HAP to remove from the exhaust gas stream, can be effectively removed by using oxidizing agents or sorbents injected into the gas stream. Recent data also indicate the possibility for multipollutant control with other pollutants (
Based on the results of the study documented in the utility RTC, as well as subsequent analyses and other available information, the Administrator has concluded that mercury is both a public health concern and a concern in the environment. The Administrator has concluded that there is a plausible link between methylmercury concentrations in fish and mercury emissions from coal-fired electric utility steam generating units. Although the degree to which that linkage occurs cannot be estimated quantitatively now, the facts are that: There is a linkage between coal consumption and mercury emissions; electric utility steam generating units are the largest domestic source of mercury emissions; and certain segments of the U.S. population (
In developing a regulation under section 112(d), the statute authorizes EPA to consider subcategorization of a source category. The emissions standard for existing sources cannot be less stringent than the average emissions limitation achieved by the best performing 12 percent of existing sources in the category or subcategory (the “floor”). However, the EPA intends to develop a record to facilitate consideration of subcategorization of the source category in setting the “floor.” Based on the information that EPA has to date, the EPA anticipates that a factual record will allow EPA to propose appropriate subcategories for this source category. In developing standards under section 112(d) to date, the EPA has based subcategorization on considerations such as: the size of a facility; the type of fuel used at the facility; and the plant type. The EPA also may consider other relevant factors such as geographic conditions in establishing subcategories. Once the source category is divided into subcategories, the EPA determines the “floor” for each subcategory and, in turn, the emissions standard independently for each subcategory. This approach has helped build flexibility in meeting environmental objectives in the past.
Once the floor is determined, the EPA can set an emissions standard that is more stringent than the floor if a tighter level of control is technically achievable and is justified. Factors that must be considered in deciding whether a more stringent standard than the floor is justified include: the cost of a more stringent standard; the energy requirements; and any non-air quality health and environmental factors.
Every source has to meet the level of a standard set under section 112(d), but not necessarily every individual unit at a source. Most electric generating plants have several units and so in meeting the standard there may be opportunity for lower cost solutions because the law allows for differences in reductions among units as long as the source as a whole is in compliance.
There is considerable interest in an approach to mercury regulation for power plants that would incorporate economic incentives such as emissions trading. Such an approach can reduce the cost of pollution controls by allowing for least-cost solutions among a universe of facilities that face different control costs. Trading also can allow for a greater level of control overall because it offers the opportunity for greater efficiency in achieving control. The EPA, however, recognizes and shares concerns about the local impacts of mercury emissions and any regulatory scheme for mercury that incorporates trading or other approaches that involve economic incentives must be constructed in a way that assures that communities near the sources of emissions are adequately protected. Thus, in developing a standard for utilities, the EPA should consider the legal potential for, and the economic effects of, incorporating a trading regime
The Administrator finds that regulation of HAP emissions from natural gas-fired electric utility steam generating units is not appropriate or necessary because the impacts due to HAP emissions from such units are negligible based on the results of the study documented in the utility RTC.
The EPA has previously indicated that it construes the term “electric utility steam generating unit,” as defined in section 112(a)(8) of the CAA and 40 CFR 63.41, to exclude all stationary combustion turbines, regardless of whether such turbines are used to generate electricity or used by an electric utility, and regardless of whether such turbines are used in conjunction with waste heat recovery units (65 FR 34010). Therefore, the finding concerning natural-gas fired electric utility steam generating units does not apply to stationary combustion turbines.
Today's finding that it is appropriate and necessary to regulate coal-and oil-fired electric utility steam generating units adds these units to the list of source categories under section 112(c). Section 112(e)(4) of the CAA states that, notwithstanding section 307 of the CAA, no action of the Administrator listing a source category or subcategory under section 112(c) shall be a final EPA action subject to judicial review, except that any such action may be reviewed under section 307 when the Administrator issues emissions standards for such pollutant or category. Therefore, today's finding is not subject to judicial review. As specified by section 112(e)(4), judicial review would be available on both the listing decision and the subsequent regulation at the time that such final regulation is promulgated. At such time, the exact dimensions of the source category and the nature of the control required would be sufficiently clear to allow for judicial review.
The EPA has held several public meetings wherein oral and written public input were solicited and obtained regarding the regulatory finding. In addition, numerous opportunities for written comment relating to both the study and the regulatory finding have been provided. The EPA has decided that it is unnecessary to solicit additional public comment on today's finding. The regulation developed subsequent to the finding will be subject to public review and comment.
Today's notice does not impose regulatory requirements or costs. Therefore, the requirements of Executive Order 13045 (Protection of Children from Environmental Health Risks and Safety Risks), Executive Order 13084 (Consultation and Coordination with Indian Tribal Governments), Executive Order 13132 (Federalism), the Regulatory Flexibility Act, the National Technology Transfer and Advancement Act, and the Unfunded Mandates Reform Act do not apply to today's notice. Also, this notice does not contain any information collection requirements and, therefore, is not subject to the Paperwork Reduction Act, 44 U.S.C. 3501
Pursuant to the Federal Advisory Committee Act, Public Law 92-463, notice is hereby given of two meetings of the Drinking Water Committee (DWC) of the US EPA Science Advisory Board on the dates and times noted below. All times noted are Eastern Daylight Time. All meetings are open to the public, however, seating is limited and available on a first come basis.
The Drinking Water Committee of the US EPA Science Advisory Board (SAB), will meet on January 11 and 12, 2001 in Room 120/126 of the Andrew W. Breidenbach Environmental Research Center, 26 West Martin Luther King Drive, Cincinnati, OH 45268; telephone (513) 569-7772. The meeting will begin at 9:00 a.m. on January 11 and adjourn no later than 3:00 p.m. on January 12, 2001.
A followup meeting is scheduled for February 28, 2001 to address any remaining issues that might arise as a result of the January 11-12, 2001 discussions. This meeting will be coordinated through a conference call connection in room 6013 Ariel Rios North (6th Floor), U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue NW., Washington, DC. The public is strongly encouraged to attend the meeting through a telephonic link, but may attend physically if arrangements are made with the SAB staff by noon Friday, February 23. Additional instructions about how to participate in the conference call can be obtained by calling Ms. Dorothy Clark at (202) 564-4537, or via e-mail at: clark.dorothy@epa.gov by noon Friday, February 23.
The Agency must select five or more contaminants from the CCL1 and determine, by August 2001, whether they should be regulated. To support these decisions, the Agency will have to evaluate when and where these contaminants occur, the extent of exposure and risk to public health, and determine if cost effective control methods are available.
EPA has sorted CCL1 contaminants into categories depending upon whether they need additional research (Research or Occurrence Priorities categories) or have sufficient data for the evaluation of exposure and risk to public health, and therefore enough data to support a drinking water standard (Regulatory Determination Priorities category). The contaminants considered for selection and regulatory determination by August
A Research Plan has been prepared to describe the nature, timing and priority of research needed in order to meet the CCL research information needs of the Agency. The plan focuses on contaminants that are on CCL1. Nevertheless, it is important for some research to be conducted on emerging pathogens and chemicals to ensure that any future CCL includes contaminants that are of potential public health concern. The SAB has been asked to review this plan.
The DWC began its discussion of the CCL Research Plan at its meeting on August 8-9, 2000 (for further information, see 65
It is the policy of the Science Advisory Board to accept written public comments of any length, and to accommodate oral public comments whenever possible. The Science Advisory Board expects that public statements presented at its meetings will not be repetitive of previously submitted oral or written statements.
Environmental Protection Agency (EPA).
Notice.
This notice announces availability and starts a 60-day public comment period on the Reregistration Eligibility Decision (RED) documents for the pesticide active ingredients diclofop-methyl, etridiazole (Terrazole®), and vinclozolin. The REDs represent EPA's formal regulatory assessments of the health and environmental data bases of the subject chemicals and present the Agency's determination regarding which pesticidal uses are eligible for reregistration.
Comments, identified by docket control number OPP-34235, must be received on or before February 20, 2001.
Comments may be submitted by mail, electronically, or in person. Please follow the detailed instructions for each method as provided in Unit I.C. of the
By mail: Carol Stangel, Special Review and Reregistration Division (7508C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-8007; and e-mail address: stangel.carol@epa.gov.
For technical questions on a RED listed, contact the appropriate Chemical Review Manager:
This action is directed to the public in general. This action may, however, be of interest to those persons who are or may be required to conduct testing of chemical substances under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) or the Federal Food, Drug, and Cosmetic Act (FFDCA); environmental, human health, and agricultural advocates; pesticide users; and members of the public interested in the use of pesticides. Since other entities may also be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under
1.
To access RED documents and RED fact sheets electronically, visit the REDs table on the EPA Office of Pesticide Programs Home Page, http://www.epa.gov/REDs. For related information, see http://www.epa.gov/pesticides.
2.
You may submit comments through the mail, in person, or electronically. To ensure proper receipt by EPA, it is imperative that you identify docket control number OPP-34235 in the subject line on the first page of your response.
1.
2.
3.
Do not submit any information electronically that you consider to be CBI. You may claim information that you submit to EPA in response to this document as CBI by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public version of the official record. Information not marked confidential will be included in the public version of the official record without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified under
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Provide specific examples to illustrate your concerns.
6. Offer alternative ways to improve the notice or collection activity.
7. Make sure to submit your comments by the deadline in this document.
8. To ensure proper receipt by EPA, be sure to identify the docket control number assigned to this action in the subject line on the first page of your response. You may also provide the
The Agency has issued REDs for the pesticide active ingredients listed in this document. Under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), as amended in 1988, EPA is conducting an accelerated reregistration program to reevaluate existing pesticides to make sure they meet current scientific and regulatory standards. The data base to support the reregistration of each of the chemicals listed in this document is substantially complete, and each pesticide's risks have been mitigated so that it will not pose unreasonable risks to people or the environment when used according to its approved labeling. In addition, EPA is reevaluating existing pesticides and reassessing tolerances under the Food Quality Protection Act (FQPA) of 1996. The pesticides included in this notice also have been found to meet the FQPA safety standard.
All registrants of pesticide products containing one or more of the active ingredients, listed in this document, have been sent the appropriate REDs, and must respond to labeling requirements and product-specific data requirements (if applicable) within 8 months of receipt. Products also containing other pesticide active ingredients will not be reregistered until those other active ingredients are determined to be eligible for reregistration.
The reregistration program is being conducted under Congressionally-mandated time frames, and EPA recognizes both the need to make timely reregistration decisions and to involve the public. Therefore, EPA is issuing these REDs as final documents with a 60-day comment period. Although the 60-day public comment period does not affect the registrant's response due date, it is intended to provide an opportunity for public input and a mechanism for initiating any necessary amendments to the REDs. All comments will be carefully considered by the Agency. If any comment significantly affects a RED, EPA will amend the RED by publishing the amendment in the
The legal authority for these reregistration eligibility decisions falls under FIFRA, as amended in 1988 and 1996. FIFRA section 4(g)(2)(A) directs that, after submission of all data concerning a pesticide active ingredient, “the Administrator shall determine whether pesticides containing such active ingredient are eligible for reregistration,” before calling in product-specific data on individual end-use products, and either reregistering products or taking “other appropriate regulatory action.”
Environmental protection, pesticides.
Environmental Protection Agency (EPA).
Notice.
This notice announces the initial filing of pesticide petitions proposing the establishment of regulations for residues of certain pesticide chemicals in or on various food commodities.
Comments, identified by docket control number PF-981, must be received on or before January 19, 2001.
Comments may be submitted by mail, electronically, or in person. Please follow the detailed instructions for each method as provided in Unit I.C. of the
By mail: Bipin C. Gandhi, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-8380; e-mail address: gandhi.bipin@epa.gov.
You may be affected by this action if you are an agricultural producer, food manufacturer or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:
This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under
1.
2.
You may submit comments through the mail, in person, or electronically. To ensure proper receipt by EPA, it is imperative that you identify docket control number PF-981 in the subject line on the first page of your response.
1.
2.
3.
Do not submit any information electronically that you consider to be CBI. You may claim information that you submit to EPA in response to this document as CBI by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public version of the official record. Information not marked confidential will be included in the public version of the official record without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified under
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Provide specific examples to illustrate your concerns.
6. Make sure to submit your comments by the deadline in this notice.
7. To ensure proper receipt by EPA, be sure to identify the docket control number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
EPA has received pesticide petitions as follows proposing the establishment and/or amendment of regulations for residues of certain pesticide chemicals in or on various food commodities under section 408 of the Federal Food, Drug, and Comestic Act (FFDCA), 21 U.S.C. 346a. EPA has determined that these petitions contain data or information regarding the elements set forth in section 408(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of these petitions. Additional data may be needed before EPA rules on the petitions.
Environmental protection, Agricultural commodities, Feed additives, Food additives, Pesticides and pests, Reporting and recordkeeping requirements.
The petitioner summary of the pesticide petitions are printed below as required by section 408(d)(3) of the FFDCA. The summaries of the petitions were prepared by the petitioner and represents the view of the petitioner. EPA is publishing the petitioner's summaries verbatim without editing it in any way. The petitioner's summaries announces the availability of a description of the analytical methods available to EPA for the detection and measurement of the pesticide chemicals residues or an explanation of why no such method is needed.
EPA has received a pesticide petition (PP 6E4757) from Firmenich Incorporated, P.O. 5880, Princeton, NJ 08543 proposing, pursuant to section 408(d) of the FFDCA, 21 U.S.C. 346a(d), to amend 40 CFR part 180, to establish an exemption from the requirement of a tolerance for octanal when used as an inert ingredient in the pesticide formulations applied to growing crops or to raw agricultural commodities (RACs) after harvest under 40 CFR 180.1001(c) and applied to animals under 40 CFR 180.1001(e). EPA has determined that the petition contains data or information regarding the elements set forth in section 408(d)(2) of the FFDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the petition. Additional data may be needed before EPA rules on the petition.
Since this petition is for an exemption from the requirement of a tolerance, an analytical method is not required.
As part of the EPA policy statement on inert ingredients published in the
The data that Firmenich believes supports establishing an exemption from tolerance is summarized below. More detailed information has been provided to the Agency.
Octanal has been used in foodstuffs as a flavoring agent since the 1900's and is approved by the Food and Drug Administration (FDA) as generally recognized as safe (GRAS) (21 CFR 172.515) and by the Council of Europe as in the list of substances granted “A status”— may be used in foodstuffs (COE No. 97). It is recognized by the flavor and extract manufacturer's association as GRAS (GRAS 3 (2797)).
1.
The LC
2.
3.
4.
5.
Consistent with section 408(c)(2)(B) of FFDCA, Firmenich believes that, based on this submission, the Agency has sufficient information to assess the hazards of octanal and make a determination on aggregate exposure, consistent with section 408(b)(2) for tolerance exemption for the residues of octanal on growing crops, RACS after harvest, and animals.
1.
2.
Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance or tolerance exemption, the Agency consider “available information” concerning the cumulative effects of particular chemical's residues and “other substances that have a common mechanism of toxicity”. Octanal has been in public use since the 1900's and the lack of observed toxicity after acute and chronic exposure would suggest that a cumulative risk assessment is therefore not necessary.
1.
2.
Due to the extensive available toxicological data base including sub-chronic toxicity studies and the expected low toxicity of this compound, Firmenich Incorporated does not believe a safety factor analysis is necessary in assessing the risk of these compounds. For the same reasons, Firmenich believes the additional safety factor is unnecessary.
There are no known international tolerances for octanol.
EPA has received a pesticide petition (PP 6E4758) to establish an exemption from the requirement of a tolerance for ethyl maltol when used as an inert ingredient in the pesticide formulations applied to growing crops or to RAC after harvest under 40 CFR 180.1001(c) and applied to animals under 40 CFR 180.1001 (e). EPA has determined that the petition contains data or information regarding the elements set forth in section 408(d)(2) of the FFDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the petition. Additional data may be needed before EPA rules on the petition.
Since this petition is for an exemption from the requirement of a tolerance an analytical method is not required.
As a part of the EPA policy statement on inert ingredients published in the
The data that Firmenich believes supports establishing an exemption from tolerance is summarized below. More detailed information has been provided to the Agency.
Ethyl maltol has been used in foodstuffs as a flavoring agent since the
1.
2.
In a micronucleus test with male and female NMRI mice, no adverse effects were observed at 24, 48, or 72 hours at 980 mg/kg.
In a study with
3.
4.
5.
6.
7.
Consistent with section 408(c)(2)(B) of FFDCA, Firmenich Incorporated believes that, based on this submission, the Agency has sufficient information to assess the hazards of ethyl maltol and make a determination on aggregate exposure, consistent with section 408(b)(2) for tolerance exemption for the residues of ethyl maltol on growing crops, RACs after harvest, and animals.
1.
2.
Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance or tolerance exemption, the Agency consider “available information” concerning the cumulative effects of particular chemical's residues and “other substances that have a common mechanism of toxicity”. Ethyl maltol has been in public use since the 1950's and the lack of observed toxicity after acute and chronic exposure would suggest that a cumulative risk assessment is therefore not necessary.
1.
2.
Due to the extensive available toxicological data base including sub-chronic toxicity studies and the expected low toxicity of this compound, Firmenich Incorporated does not believe a safety factor analysis is necessary in assessing the risk of these compounds.
There are no known international tolerances for ethyl maltol.
EPA has received a pesticide petition (6E4759), to amend 40 CFR part 180, to establish an exemption from the requirement of a tolerance for ethyl methylphenylglycidate when used as an inert ingredient in the pesticide formulations applied to growing crops or to raw agricultural commodities after harvest under 40 CFR 180.1001(c) and applied to animals under 40 CFR 180.1001 (e). EPA has determined that the petition contains data or information regarding the elements set forth in section 408(d)(2) of the FFDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the petition. Additional data may be needed before EPA rules on the petition.
Since the petition is for an exemption from the requirement of a tolerance, an analytical method is not required.
As a part of the EPA policy statement on inert ingredients published in the
The date that Firmenich believes supports establishing an exemption from tolerance is summarized below. More detailed information has been provided to the Agency.
Ethyl methylphenylglycidate has been used in foodstuffs as a flavoring agent since the 1930's and is approved by the FDA as GRAS (21 CFR 182.60) and by the Council of Europe as in the list of substances granted “A status”— may be used in foodstuffs (COE No. 6002). It is recognized by the flavor and extract manufacturer's association as GRAS (GRAS 3 (2444)).
1.
Due to the very low water solubility of ethyl methylphenylglycidate and the octanol/water coefficient (estimated Kow 3.0), acute aquatic toxicity testing is thereby precluded.
2.
A chinese hamster ovary (CHO) cell study with ethyl methylphenylglycidate treated 8-12 hours without rat S-9 and 2 hours with S-9, gave positive sister chromatid exchange effects without S-9 over the full range of doses tested, 16 - 160 μg/mL, and no effect with S-9 over the whole range. Similarly, there were significant increases in chromosome aberrations over the range 50-500 μg/mL with and without S-9.
3.
A mouse carcinogenicity and mutagenesis study was conducted in 15/sex/dose male and female mice by intraperitoneal injection 3X per weeks for 8 weeks at the maximum tolerance dose (MTD) and 0.20X MTD of ethyl methylphenylglycidate. There were 10 deaths at 0.45 g/kg and 4 deaths at 2.15 g/kg. Similarly, an intraperitonile ethyl methylphenylglycidate study with male and female mice showed no effects at the highest dose treated, 1,856 mg/kg.
4.
5.
6.
Consistent with section 408(c)(2)(B) of FFDCA, Firmenich Incorporated believes that, based on this submission, the Agency has sufficient information to assess the hazards of ethyl methylphenylglycidate and make a determination on aggregate exposure, consistent with section 408(b)(2) for tolerance exemption for the residues of ethyl methylphenylglycidate on growing crops, RACs after harvest, and animals.
1.
2.
Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance or tolerance exemption, the Agency consider “available information” concerning the cumulative effects of particular chemical's residues and “other substances that have a common mechanism of toxicity”. Ethyl methylphenylglycidate has been in public use since the 1930's and the lack of observed toxicity after acute and chronic exposure would suggest that a cumulative risk assessment is therefore not necessary.
1.
2.
Due to the extensive available toxicological data base including chronic toxicity studies and the expected low toxicity of this compound, Firmenich Incorporated does not believe a safety factor analysis is necessary in assessing the risk of these compounds. For the same reasons, Firmenich believes the additional safety factor is unnecessary.
There are no known international tolerances for ethyl methyl-phenylglycidate
Environmental Protection Agency (EPA).
Notice.
This notice announces the initial filing of a pesticide petition proposing the establishment of regulations for residues of a certain pesticide chemical in or on various food commodities.
Comments, identified by docket control number PF-987, must be received on or before January 19, 2001.
Comments may be submitted by mail, electronically, or in person. Please follow the detailed instructions for each method as provided in Unit I.C. of the
By mail: Indira Gairola, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-6379; e-mail address: gairola.indira@epa.gov.
You may be affected by this action if you are an agricultural producer, food manufacturer or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:
This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under
1.
2.
You may submit comments through the mail, in person, or electronically. To ensure proper receipt by EPA, it is imperative that you identify docket control number PF-987 in the subject line on the first page of your response.
1.
2.
3.
Do not submit any information electronically that you consider to be CBI. You may claim information that you submit to EPA in response to this document as CBI by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public version of the official record. Information not marked confidential will be included in the public version of the official record without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified under
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Provide specific examples to illustrate your concerns.
6. Make sure to submit your comments by the deadline in this notice.
7. To ensure proper receipt by EPA, be sure to identify the docket control number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
EPA has received a pesticide petition as follows proposing the establishment and/or amendment of regulations for residues of a certain pesticide chemical in or on various food commodities under section 408 of the Federal Food, Drug, and Comestic Act (FFDCA), 21 U.S.C. 346a. EPA has determined that this petition contains data or information regarding the elements set forth in section 408(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the petition. Additional data may be needed before EPA rules on the petition.
Environmental protection, Agricultural commodities, Feed additives, Food additives, Pesticides and pests, Reporting and recordkeeping requirements.
The petitioner summary of the pesticide petition is printed below as required by section 408(d)(3) of the FFDCA. The summary of the petition was prepared by the petitioner and represents the view of the petitioner. EPA is publishing the petition summary verbatim without editing it in any way. The petition summary announces the availability of a description of the analytical methods available to EPA for the detection and measurement of the pesticide chemical residues or an explanation of why no such method is needed.
EPA has received a pesticide petition (1E6239) from Miller Chemical and Fertilizer Corporation, P.O. Box 333, Radio Road, Hanover, PA 17331 proposing, pursuant to section 408(d) of the (FFDCA), 21 U.S.C. 346a(d), to amend 40 CFR 180.1001(c) and (e), to establish an exemption from the requirement of a tolerance for polybutylene as an inert ingredient in or on growing crops or when applied to the raw agricultural commodity (RAC) after harvest or when applied to animals. EPA has determined that the petition contains data or information regarding the elements set forth in section 408(d)(2) of the FFDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the petition. Additional data may be needed before EPA rules on the petition.
As part of the EPA policy statement on inert ingredients published in the
In the case of certain chemical substances that are defined as “polymers” EPA has established a set of criteria which identify categories of polymers that present low risk. These criteria (codified in 40 CFR 723.250) identify polymers that are relatively unreactive and stable compared to other chemical substances as well as polymers that are not readily absorbed. These properties generally limit a polymer's ability to cause adverse effects. In addition, these criteria exclude polymers about which little is known. EPA believes that polymers meeting the criteria noted below will present minimal or no risk.
Polybutylene conforms to the definition of a polymer given in 40 CFR 723. 250(b) and meets the following criteria that are used to identify low risk polymers.
1. Polybutylene is not a cationic polymer, nor is it reasonably anticipated to become a cationic polymer in a natural aquatic environment.
2. Polybutylene contains as an integral part of its composition the atomic elements carbon and hydrogen.
3. Polybutylene does not contain as an integral part of its composition any elements other those listed in 40 CFR 723.250(d)(2)(ii).
4. Polybutylene is not designed, nor is it reasonably anticipated to substantially degrade, decompose, or depolymerize.
5. Polybutylene is not manufactured or imported from monomers and/or other reactants that are not already included on the Toxic Substances Control Act (TSCA) Chemical Substance Inventory or manufactured under an applicable TSCA section 5 exemption.
6. Polybutylene is not a water absorbing polymer.
7. Polybutylene does not contain any group as reactive functional groups.
8. The minimum number-average molecular weight of polybutylene is listed as 1,330 daltons. Substances with molecular weights greater than 400 generally are not absorbed through the intact skin, and substances with molecular weights greater than 1,000 generally are not absorbed through the intact gastrointestincal (GI) tract. Chemicals not absorbed through the skin or GI tract generally are incapable of eliciting a toxic response.
9. Polybutylene has a number-average molecular weight of 1,330 and contains less than 10% oligomeric material below molecular weight of 500 and less than 25% oligomeric material below 1,000 molecular weight.
In addition, polybutylene is approved by the Food and Drug Administration (FDA) under 21 CFR for following food contact applications:
a. Polybutylene is cleared for use in contact with food under 21 CFR 177.1430. The specifications set forth in this regulation for isobutylene-butene copolymers include molecular weight range (150-5,000), viscosity range and maximum bromine values.
b. Polybutylene is approved under 21 CFR 175.125 for use as a component of release coatings on backings or linings for pressure sensitive adhesive labels for food contact applications.
c. Polybutylene is approved under 21 CFR 175.300 for use as a component of resinous and polymeric coatings for food contact surfaces.
d. Polybutylene is approved under 21 CFR 176.170 for use as a component of paper and paperboard in contact with aqueous and fatty foods.
e. Polybutylene is approved under 21 CFR 176.180 for use as a component of paper and paperboard in contact with dry foods.
f. Polybutylene is approved under 21 CFR 176.210 for use as a defoaming agent in the manufacture of paper and paperboard that come in contact with food.
g. Polybutylene is approved under 21 CFR 177.1520 for use as a plasticizer in polyethylene used in the manufacture of articles for food contact applications.
h. Polybutylene is approved under 21 CFR 177.1640 for use as a plasticizer in polystyrene used in the manufacture of articles for food contact applications.
i. Polybutylene is approved under 21 CFR 177.2800 for use as a component of textiles and textile fibers used in the manufacture of articles for food contact applications.
j. Polybutylene is approved for use in lubricants with incidental food contact under 21 CFR 178.3570.
k. Polybutylene is approved under 21 CFR 178.3710 for use as a component of articles that come in contact with food.
l. Polybutylene is approved under 21 CFR 178.3740 for use as a component of articles that come in contact with food.
The above regulations are applicable to polybutylenes manufactured from st isobutylene and n-butene as monomers (complying with 21 CFR 177.1430). The Food and Drug Administration (FDA) has also approved polybutylene for other food contact applications under 21 CFR 175.105, 21 CFR 177.1420, 177.1520, 177.2260, and 178.3910. In other words, the FDA has determined that polybutylenes are safe to use in articles that come in contact with food.
Polybutylene is widely used as a cosmetic ingredient in personal care products. The Cosmetic Toiletry and Fragrance Association (CTFA) evaluated the safety of polybutene for use in personal care products and found that it is safe to use in cosmetic products.
Polybutylene (CAS Reg. No.9003-29-6) and all components of polybutylene are listed on the TSCA Chemical Substances Inventory.
Polybutenes are exempt from the requirement of a tolerance under 40 CFR 180.1037 for residues in or on the RAC:
a. Cottonseed when used as a sticker agent for formulations of the attractant gossyplure [1:1 mixture of (Z,Z)— and (Z,E)-7,11-hexadecadien-1-ol acetate] to disrupt the mating of the pink bollworm.
b. Artichokes when used as a sticker agent in multi-layered laminated controlled-release dispensers of (Z)-11-hexadecenal to disrupt the mating of the artichoke plume moth.
Polybutylene and its formulations have been in commerce for more than 30 years. The copolymer is ubiquitous in our every day environment and it is commonly used in cosmetic formulations (concentrations ranging from 1 to
Although exposure to polybutylene may occur through dietary (e.g., adhesives, lubricants, and food wrappings), and non-occupational (e.g., electrical cable insulation) sources, the chemical characteristics of polybutylene lead to the conclusion that there is a reasonable certainty of no harm from aggregate exposure to this polymer.
The Agency has maintained that polymers meeting the polymer exemption criteria (as described previously for polybutylene) will present minimal risk to human health when used as inert ingredients in pesticide products applied to food crops. EPA has also established exemptions from tolerance for polymeric materials used as pesticide inert ingredients that it considers to be intrinsically safe based on the fact that they are listed on the TSCA Inventory or meet the requirements of the amended TSCA polymer exemption and are thereby not subject to the requirements of the pre-manufacturing notification.
Given the existing widespread and historic use of polybutylene, any additional exposure resulting from the approval of polybutylene as an inert ingredient in pesticide formulations for use on growing crops or to RACs after harvest is not warranted.
At this time there is no information to indicate that any toxic effects produced by polybutylene having a number average molecular weight of 1,330 would be cumulative with those of any other chemical substance(s). Given the categorization of polybutylene as a “low risk polymer”(40 CFR 723.250) and its proposed use as an inert ingredient in pesticide formulations, there is no reasonable expectation of increased risk due to cumulative exposure.
1.
2.
Miller Chemical and Fertilizer Corporation is not aware of any country requiring a tolerance for polybutylene having a number average molecular weight of 1,330. Nor have there been any CODEX maximum residue levels (MRLs) established for any food crops at this time.
Environmental Protection Agency (EPA).
Notice.
EPA has granted or denied emergency exemptions under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) for use of pesticides as listed in this notice. The exemptions or denials were granted during the period December 1999 to November 2000 to control unforseen pest outbreaks.
See each emergency exemption or denial for the name of a contact person. The following information applies to all contact persons: Team Leader, Emergency Response Team, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Bldg., 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-9366.
EPA has granted or denied emergency exemptions to the following State and Federal agencies. The emergency exemptions may take the following form: Crisis, public health, quarantine, or specific. EPA has also listed denied emergency exemption requests in this notice.
You may be potentially affected by this action if you petition EPA for authorization under section 18 of FIFRA to use pesticide products which are otherwise unavailable for a given use. Potentially affected categories and entities may include, but are not limited to:
This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. Other types of entities not listed in the table in this unit could also be regulated. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action applies to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under
1.
2.
Under FIFRA section 18, EPA can authorize the use of a pesticide when emergency conditions exist. Authorizations (commonly called emergency exemptions) are granted to State and Federal agencies and are of four types:
1. A “specific exemption” authorizes use of a pesticide against specific pests on a limited acreage in a particular State. Most emergency exemptions are specific exemptions.
2. “Quarantine” and “public health” exemptions are a particular form of specific exemption issued for quarantine or public health purposes. These are rarely requested.
3. A “crisis exemption” is initiated by a State or Federal agency (and is confirmed by EPA) when there is insufficient time to request and obtain EPA permission for use of a pesticide in an emergency.
EPA may deny an emergency exemption: If the State or Federal agency cannot demonstrate that an emergency exists, if the use poses unacceptable risks to the environment, or if EPA cannot reach a conclusion that the proposed pesticide use is likely to result in “a reasonable certainty of no harm” to human health, including exposure of residues of the pesticide to infants and children.
If the emergency use of the pesticide on a food or feed commodity would result in pesticide chemical residues, EPA establishes a time-limited tolerance meeting the “reasonable certainty of no harm standard” of the Federal Food, Drug, and Cosmetic Act (FFDCA).
In this document: EPA identifies the State or Federal agency granted the exemption or denial, the type of
Department of Agriculture and Industries
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 3/17/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of diuron in/on catfish ponds to control blue-green algae; 05/22/00 to 11/30/00. Contact: (David Deegan)
EPA authorized the use of emamectin benzoate on cotton to control beet armyworms and tobacco budworms; 7/13/00 to 9/30/00. Contact: (Andrea Conrath)
EPA authorized the use of tebufenozide on pastures to control fall armyworms; 7/17/00 to 10/31/00. Contact: Barbara Madden
Department of Agriculture
EPA authorized the use of buprofezin on cotton to control whiteflies; 6/14/00 to 9/30/00. Contact: (Andrea Conrath)
EPA authorized the use of buprofezin on cucurbits to control whiteflies; 7/15/00 to 7/14/01. Contact: (Andrea Conrath)
EPA authorized the use of metolachlor on spinach to control weeds; 9/8/00 to 5/15/01. Contact: (Andrew Ertman)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 9/22/00 to 2/1/01. Contact: (Barbara Madden)
State Plant Board
On 5/26/00, for the use of sodium chlorate on wheat to control weeds. This program ended on 6/15/00. Contact: (Libby Pemberton)
On 3/30/00 EPA denied the use of bispyribac-sodium on rice to control Barnyardgrass and other annual weeds. This request was denied based upon the Agency's inability, at this time, to reach a “reasonable certainty of no harm” finding regarding health effects which may result if this use were to occur, an inability to assess ecological effects of the proposed use, and finally that the Agency did not conclude that this emergency situation required use of multiple products to attain adequate control of the pest situation. EPA did allow emergency use of an alternative chemical under provisions of section 18. Contact: (David Deegan).
EPA authorized the use of norflurazon on bermudagrass to control annual grassy weeds; 3/9/00 to 9/15/00. Contact: (Libby Pemberton)
EPA authorized the use of fomesafen on snapbeans to control broadleaf weeds; 4/4/00 to 9/15/00. Contact: (Andrea Conrath)
EPA authorized the use of diuron in/on catfish ponds to control blue-green algae; 05/22/00 to 11/30/00. Contact: (David Deegan)
EPA authorized the use of carbofuran on cotton to control aphids; 6/02/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 6/4/00 to Febraury 1/01. Contact: (Barbara Madden)
EPA authorized the use of methoxyfenozide in/on cotton to control beet armyworm; 6/5/00 to 10/1/00. Contact: (Dan Rosenblatt)
EPA authorized the use of indoxacarb in/on cotton to control beet armyworm and tobacco budworm; 6/15/00 to 10/31/00. Contact: (Dan Rosenblatt)
EPA authorized the use of emamectin benzoate on cotton to control beet armyworm and tobacco budworm; 7/13/00 to 9/30/00. Contact: (Andrea Conrath)
EPA authorized the use of spinosad on pastureland and rangeland to control armyworms; 11/8/00 to 12/31/00. Contact: (Andrew Ertman)
Environmental Protection Agency, Department of Pesticide Regulation
On 9/21/00, for the postharvest use of fenhexamid on pears to control gray mold. This program ended on 10/1/00. Contact: (Steve Schaible)
EPA authorized the use of imidacloprid on citrus to control the glassy-winged sharpshooter; 2/23/00 to 4/30/00. Contact: (Andrew Ertman)
EPA authorized the use of fludioxonil on peaches, nectarines, apricots and plums to control brown rot, gray mold rot, and Rhizopus rot; 5/1/00 to 11/1/00. Contact: (Andrew Ertman)
EPA authorized the use of tebufenozide on wine grapes to control Omnivorous leafroller and Grape leaffolder; 5/1/00 to 9/1/00. Contact: (Barbara Madden)
EPA authorized the use of hexythiazox on dates to control Banks grass mites; 5/15/00 to 6/30/00. Contact: (David Deegan)
EPA authorized the use of hexythiazox on cotton to control spider mites; 5/15/00 to 8/01/00. Contact: (David Deegan)
EPA authorized the use of carbofuran on cotton to control aphids; 6/02/00 to 10/15/00. Contact: (David Deegan)
EPA authorized the use of propamocarb hydrochloride on tomatoes to control late blight; 6/5/00 to 6/5/01. Contact: (Libby Pemberton)
EPA authorized the use of buprofezin on cotton to control whiteflies; 6/14/00 to 10/15/00. Contact: (Andrea Conrath)
EPA authorized the use of indoxacarb on cotton to control beet armyworm; 6/15/00 to 10/31/00. Contact: (Dan Rosenblatt)
EPA authorized the use of buprofezin on cucurbits to control whiteflies; 6/15/
EPA authorized the use of avermectin on basil to control leafminer; 6/30/00 to 10/31/00. Contact: (Dan Rosenblatt)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 7/20/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of myclobutanil on peppers (bell and non-bell) to control powdery mildew; 8/16/00 to 8/17/01. Contact: (David Deegan)
EPA authorized the use of myclobutanil on artichokes to control powdery mildew; 8/17/00 to 8/17/01. Contact: (David Deegan)
EPA authorized the use of hexythiazox on strawberry to control two-spotted spider mites; 8/17/00 to 5/30/01. Contact: (David Deegan)
EPA authorized the use of paraquat dichloride on artichokes to control weeds and grasses; 9/1/00 to 8/31/01. Contact: (Libby Pemberton)
EPA authorized the use of imidacloprid on strawberries to control whiteflies; 9/08/00 to 9/08/01. Contact: (Andrea Conrath)
EPA authorized the use of imidacloprid on garden beets and turnip greens to control aphids; 10/19/00 to 9/11/01. Contact: (Andrew Ertman)
EPA authorized the use of avermectin on celeriac to control two-spotted spider mite; 10/18/00 to 10/18/01. Contact: (Dan Rosenblatt)
EPA authorized the use of tebufenozide on table beets to control armyworms; 10/27/00 to 8/28/01. Contact: (Andrew Ertman)
EPA authorized the use of spinosad on sugarbeets to control armyworms; 10/31/00 to 8/7/01. Contact: (Andrew Ertman)
Department of Agriculture
EPA authorized the use of metolachlor on spinach to control weeds; 3/28/00 to 8/31/00. Contact: (Andrew Ertman)
EPA authorized the use of lambda-cyhalothrin on barley to control the Russian wheat aphid; 4/18/00 to 7/15/00. Contact: (Andrew Ertman)
EPA authorized the use of imazamox on dry bean to control various nightshade species and velvetleaf; 6/1/00 to 7/15/00. Contact: (Barbara Madden)
EPA authorized the use of tetraconazole on sugarbeets to control Cercospora leafspot; 6/7/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of tebuconazole on sunflowers to control rust; 7/1/00 to 8/31/00. Contact: (Steve Schaible)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 9/1/00 to 2/1/01. Contact: (Barbara Madden)
Department of Environmental Protection
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 7/27/00 to 2/1/01. Contact: (Barbara Madden)
Department of Agriculture
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 3/8/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of terbacil on watermelon to control morning glory and other annual broadleaf weeds; 4/3/00 to 6/15/00. Contact: (David Deegan)
EPA authorized the use of clomazone on watermelon to control broadleaf weeds; 4/6/00 to 6/30/00. Contact: (David Deegan)
EPA authorized the use of imidacloprid on stone fruit to control aphids; 6/14/00 to 10/15/00. Contact: (Andrew Ertman)
EPA authorized the use of clopyralid on peaches and nectarine to control weeds that serve as alternate hosts for plum pox virus or are refugia for the green peach aphid, the vector of this virus; 7/26/00 to 12/1/00. Contact: (Barbara Madden)
EPA authorized the use of metolachlor on spinach to control weeds; 9/25/00 to 5/1/01. Contact: (Andrew Ertman)
Department of Agriculture and Consumer Services
EPA authorized the use of tebufenozide on lychee and longan to control Lychee webworms; 3/2/00 to 3/1/01. Contact: (Barbara Madden)
EPA authorized the use of bifenthrin on citrus to control Diaprepes root weevil; 3/02/00 to 3/01/01. Contact: (Andrea Conrath)
EPA authorized the use of hexythiazox on strawberry to control two-spotted mites; 3/24/00 to 3/24/01. Contact: (David Deegan)
EPA authorized the use of fenbuconazole on grapefruit to control greasy spot disease; 5/5/00 to 5/4/01. Contact: (Andrea Conrath)
EPA authorized the use of buprofezin on tomatoes to control the Silverleaf Whitefly; 6/2/00 to 6/1/01. Contact: (Andrew Ertman)
EPA authorized the use of imidacloprid on citrus to control brown citrus aphid and citrus leafminer; 6/30/00 to 6/30/01. Contact: (Andrew Ertman)
EPA authorized the use of azoxystobin on strawberries to control anthranose; 9/29/00 to 5/31/01. Contact: (Libby Pemberton)
Department of Agriculture
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 1/20/00 to 1/18/01. Contact: (Barbara Madden)
Department of Agriculture
Department of Agriculture
On 5/19/00, for the use of fluroxypyr on sweet corn to control volunteer potatoes. This program ended on 6/2/00. Contact: (Andrew Ertman)
On 6/9/00, for the use of fluroxypyr on field corn to control volunteer potatoes. This program ended on 8/1/00. Contact: (Andrew Ertman)
EPA authorized the use of pendimethalin on mint to control kochia and redroot pigweed; 2/1/00 to 12/31/00. Contact: (Steve Schaible)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 2/2/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the seed treatment use of fosetyl-Al on peas to control downy mildew; 2/10/00 to 4/30/00. Contact: (Steve Schaible)
EPA authorized the use of cymoxanil on hops to control downy mildew; 3/6/2000 to 9/15/2000. Contact: (Libby Pemberton)
EPA authorized the use of thiabendazole on lentil seeds to control Ascochyta Blight; 3/17/00 to 6/1/00. Contact: (Andrea Conrath)
EPA authorized the use of tebuconazole on barley to control barley stripe rust; 3/30/00 to 8/15/00. Contact: (Steve Schaible)
EPA authorized the use of zinc phosphide on barley, wheat, sugarbeets, and potatoes to control meadow voles and field mice; 4/11/00 to 10/1/00. Contact: (Libby Pemberton)
EPA authorized the use of oxytetracycline on apples to control fire blight; 4/11/00 to 8/1/00. Contact: (Andrea Conrath)
EPA authorized the use of myclobutanil on hops to control powdery mildew; 4/13/00 to 9/22/00. Contact: (David Deegan)
EPA authorized the use of tebuconazole on hops to control powdery mildew; 4/13/00 to 9/22/00. Contact: (David Deegan)
EPA authorized the use of trifloxystrobin on hops to control powdery mildew; 4/13/00 to 9/22/00. Contact: (David Deegan)
EPA authorized the use of pyridate on mint to control redroot pigweed and kochia; 4/15/00 to 12/31/00. Contact: (Barbara Madden)
EPA authorized the use of myclobutanil on mint to control powdery mildew; 4/26/00 to 12/31/00. Contact: (David Deegan)
EPA authorized the use of lambda-cyhalothrin on barley to control the Russian wheat aphid; 5/1/00 to 7/30/00. Contact: (Andrew Ertman)
EPA authorized the use of imazamox on canola to control mustard; 5/1/00 to 7/15/00. Contact: (Barbara Madden)
EPA authorized the use of imazamox on dry beans to control various nightshade species; 5/1/00 to 7/31/00. Contact: (Barbara Madden)
EPA authorized the use of clopyralid on canola to control Canada thistle; 5/5/00 to 7/31/00. Contact: (Libby Pemberton)
EPA authorized the use of paraquat dichloride on green and dried peas grown for seed to control weeds; 5/30/00 to 11/30/00. Contact: (Libby Pemberton)
EPA authorized the use of fluroxypyr on field corn to control volunteer potatoes; 6/9/00 to 8/1/00. Contact: (Andrew Ertman)
EPA authorized the use of propamocarb hydrochloride on potatoes to control late blight; 7/13/00 to 7/13/01. Contact: (Libby Pemberton)
EPA authorized the use of difenoconazole on sweet corn seed to control fungal pathogens; 8/31/00 to 9/01/01. Contact: (Andrea Conrath)
EPA authorized the use of chlorine dioxide on stored potatoes to control late blight; 8/31/00 to 8/31/01. Contact: (Andrew Ertman)
EPA authorized the use of flufenacet on wheat to control annual ryegrass; 10/5/00 to 6/30/01. Contact: (Barbara Madden)
EPA authorized the use of imidacloprid on sweet corn seed to control the corn flea beetle; 12/11/00 to 12/10/01. Contact: (Andrew Ertman)
Department of Agriculture
EPA authorized the use of fomesafen on snap beans to control various weed species; 6/16/00 to 9/18/00. Contact: (Andrea Conrath)
Office of Indiana State Chemist
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 4/4/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of metolachlor on tomatoes to control eastern black nightshade; 4/13/00 to 7/1/00. Contact: (Andrew Ertman)
EPA authorized the use of pyridate on mint to control redroot pigweed and kochia; 4/15/00 to 12/31/00. Contact: (Barbara Madden)
EPA authorized the use of fomesafen on snap beans to control various weed species; 6/16/00 to 8/30/00. Contact: (Andrea Conrath). Indiana had declared a crisis for this use on 5/16/00.
Department of Agriculture and Land Stewardship
Department of Agriculture
EPA authorized the use of propiconazole on sorghum to control sorghum ergot; 5/10/00 to 12/31/00. Contact: (Steve Schaible)
EPA authorized the use of metsulfuron-methyl on sorghum to control weeds; 5/22/00 to 8/15/00. Contact: (Andrew Ertman)
EPA authorized the use of tebuconazole on sunflowers to control rust; 6/16/00 to 9/15/00. Contact: (Steve Schaible)
EPA authorized the use of propiconazole on dry beans to control rust; 6/16/00 to 8/15/00. Contact: (Steve Schaible)
EPA authorized the use of bifenthrin on seed sorghum to control spider mites; 7/06/00 to 9/30/00. Contact: (Andrea Conrath)
EPA authorized the use of spinosad on alfalfa to control armyworms; 9/8/00 to 10/10/00. Contact: (Andrew Ertman)
Department of Agriculture
Department of Agriculture and Forestry
On 3/30/00 EPA denied the use of bispyribac-sodium on rice to control Barnyardgrass and other annual weeds. This request was denied based upon the Agency's inability, at this time, to reach a “reasonable certainty of no harm” finding regarding health effects which may result if this use were to occur, an inability to assess ecological effects of the proposed use, and finally that the Agency did not conclude that this emergency situation required use of multiple products to attain adequate control of the pest situation. EPA did allow emergency use of an alternative chemical under provisions of section 18. Contact: (David Deegan).
On 4/20/00 EPA denied the use of tebufenozide on rice to control fall armyworms. This request was denied because the situation is routine, not urgent, and growers are not likely to suffer from significant economic losses. The State provided no data that demonstrate that currently registered alternatives do not effectively control fall armyworms on rice. Contact: (Barbara Madden).
On 5/12/00 EPA denied the use of anthraquinone on rice to control red-winged blackbirds. This request was denied because the current data base is insufficient to support any food uses of this chemical and the situation does not meet Agency criteria for an emergency exemption Contact: (Libby Pemberton).
On 9/20/00 EPA denied the use of chlorfenapyr on cotton to control beet armyworm. This request was denied based upon the Agency's inability, at this time, to make the required finding that the use would not cause unreasonable adverse effects on the environment. Additionally, since EPA cannot register this use and the Registrant has withdrawn its application for registration of chlorfenapyr on cotton, adequate progress toward registration is not being made. Contact: (Andrea Conrath).
On 10/27/00 EPA denied the use of clomazone on sugarcane to control bermudagrass. This request was denied because an urgent and non-routine situation was not demonstrated. Contact: (David Deegan).
EPA authorized the use of clomazone on rice to control Barnyardgrass and other annual weeds; 3/07/00 to 6/01/00. Contact: (David Deegan)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 3/21/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of imazapic-ammonium on bermudagrass to control vaseygrass; 4/10/00 to 5/30/00. Contact: (Libby Pemberton)
EPA authorized the use of tebufenozide on sweet potatoes to control beet armyworms and fall armyworms; 4/17/00 to 10/31/00. Contact: (Andrew Ertman)
EPA authorized the use of emamectin benzoate on cotton to control beet armyworms and resistant tobacco budworms; 5/4/00 to 9/30/00. Contact: (Andrea Conrath)
EPA authorized the use of carbofuran on cotton to control aphids; 6/02/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of methoxyfenozide on cotton to control beet armyworms; 6/5/00 to 10/1/00. Contact: (Dan Rosenblatt)
EPA authorized the use of indoxacarb on cotton to control beet armyworms and tobacco budworms; 6/15/00 to 10/31/00. Contact: (Dan Rosenblatt)
EPA authorized the use of lambda-cyhalothrin on sugarcane to control the sugarcane borer; 7/5/00 to 9/15/00. Contact: (Andrew Ertman)
Department of Agriculture, Food, and Rural Resources
EPA authorized the use of propiconazole on blueberries to control mummy berry disease; 4/15/00 to 6/15/00. Contact: (Steve Schaible)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 9/1/00 to 2/1/01. Contact: (Barbara Madden)
Department of Agriculture
EPA authorized the use of terbacil on watermelon to control morning glory and other annual broadleaf weeds; 4/3/00 to 6/15/00. Contact: (David Deegan)
EPA authorized the use of fomesafen on snapbeans to control broadleaf weeds; 4/4/00 to 9/15/00. Contact: (Andrea Conrath)
EPA authorized the use of clomazone on watermelon to control broadleaf weeds; 4/6/00 to 6/30/00. Contact: (David Deegan)
EPA authorized the use of metolachlor on tomatoes to control eastern black nightshade and yellow nutsedge; 4/13/00 to 7/31/00. Contact: (Andrew Ertman)
EPA authorized the use of propamocarb hydrochloride on tomatoes to control late blight; 6/5/00 to 9/30/00. Contact: (Libby Pemberton)
EPA authorized the use of metolachlor on spinach to control weeds; 9/8/00 to 4/30/01. Contact: (Andrew Ertman)
Massachusetts Department of Food and Agriculture
EPA authorized the use of clopyralid on cranberries to control various weeds; 1/4/00 to 12/31/00. Contact: (Libby Pemberton)
EPA authorized the use of propiconazole on blueberries to control mummy berry disease; 3/30/00 to 6/15/00. Contact: (Steve Schaible)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 4/17/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of oxyfluorfen on strawberries to control broadleaf weeds; 11/9/00 to 12/15/00. Contact: (Barbara Madden)
Michigan Department of Agriculture
On 5/25/00, for the use of azoxystrobin on ginseng to control leaf and stem blight. This program ended on 6/30/00. Contact: (Dan Rosenblatt)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 3/17/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of dimethomorph on squash (summer, winter, and pumpkins), cantaloupes, watermelons, and cucumbers to control crown rot; 3/30/00 to 11/1/00. Contact: (Libby Pemberton)
EPA authorized the use of fomesafen on dry beans to control broadleaf weeds;
EPA authorized the use of oxytetracycline on apples to control fire blight; 4/11/00 to 6/30/00. Contact: (Andrea Conrath)
EPA authorized the use of metolachlor on tomatoes to control eastern black nightshade; 4/13/00 to 7/1/00. Contact: (Andrew Ertman)
EPA authorized the use of clopyralid on cranberries to control selected broadleaf weeds; 4/28/00 to 12/31/00. Contact: (Libby Pemberton)
EPA authorized the use of fomesafen on snap beans to control weeds; 5/4/00 to 8/30/00. Contact: (Andrea Conrath)
EPA authorized the use of chlorothalonil on asparagus to control purple spot; 5/15/00 to 11/1/00. Contact: (Steve Schaible)
EPA authorized the use of tebuconazole on wheat to control Fusarium head blight; 5/15/00 to 6/30/00. Contact: (Steve Schaible)
EPA authorized the use of tetraconazole on sugarbeets to control Cercospora leafspot; 6/7/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of mancozeb on ginseng to control leaf and stem blight; 6/30/00 to 10/15/00. Contact: (Dan Rosenblatt)
EPA authorized the use of azoxystrobin on ginseng to control leaf and stem blight; 6/30/00 to 10/15/00. Contact: (Dan Rosenblatt)
EPA authorized the use of tebufenozide on grapes to control grape berry moth; 7/1/00 to 9/30/00. Contact: (Barbara Madden)
EPA authorized the use of propamocarb hydrochloride on potatoes to control late blight; 7/13/00 to 7/13/01. Contact: (Libby Pemberton)
EPA authorized the use of oxyfluorfen on strawberries to control broadleaf weeds; 11/9/00 to 1/1/01. Contact: (Barbara Madden)
Department of Agriculture
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 1/20/00 to 1/18/01. Contact: (Barbara Madden)
EPA authorized the use of clopyralid on canola to control thistles; 2/3/2000 to 7/31/2000. Contact: (Libby Pemberton)
EPA authorized the use of ethalfluralin on canola to control kochia; 4/7/00 to 4/7/01. Contact: (David Deegan)
EPA authorized the use of ethametsulfuron on seed canola to control wild mustard; 4/7/00 to 7/1/00. Contact: (Dan Rosenblatt)
EPA authorized the use of imazamox on canola to control mustard; 5/1/00 to 7/15/00. Contact: (Barbara Madden)
EPA authorized the use of imazamox on dry beans to control various nightshade species and velvetleaf; 5/1/00 to 6/30/00. Contact: Barbara Madden
EPA authorized the use of tetraconazole on sugarbeets to control Cercospora leafspot; 6/15/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of propiconazole on dry beans to control rust; 6/15/00 to 8/31/00. Contact: (Steve Schaible)
EPA authorized the use of tebuconazole on wheat and barley to control Fusarium head blight; 6/15/00 to 8/25/00. Contact: (Steve Schaible)
EPA authorized the use of fomesafen on dry beans to control various weed species; 6/16/00 to 8/15/00. Contact: (Andrea Conrath)
EPA authorized the use of chlorine dioxide on stored potatoes to control late blight; 8/31/00 to 8/31/01. Contact: (Andrew Ertman)
Department of Agriculture and Commerce
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 2/10/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of norflurazon on bermudagrass to control annual grassy weeds; 2/24/00 to 7/31/00. Contact: (Libby Pemberton)
EPA authorized the use of fenbuconazole on blueberries to control mummy berry disease; 2/24/00 to 7/1/00. Contact: (Dan Rosenblatt)
EPA authorized the use of emamectin benzoate on cotton to control beet armyworms and resistant tobacco budworms; 5/4/00 to 9/30/00. Contact: (Andrea Conrath)
EPA authorized the use of diuron in/on catfish ponds to control blue-green algae; 05/12/00 to 11/30/00. Contact: (David Deegan)
EPA authorized the use of carbofuran on cotton to control aphids; 6/02/00 to 9/15/00. Contact: (David Deegan)
EPA authorized the use of methoxyfenozide on cotton to control beet armyworms and resistant tobacco budworms; 6/5/00 to 10/1/00. Contact: (Dan Rosenblatt)
EPA authorized the use of indoxacarb on cotton to control beet armyworms and resistant tobacco budworms; 6/15/00 to 10/31/00. Contact: (Dan Rosenblatt)
EPA authorized the use of tebufenozide on pasture land to control armyworms; 7/11/00 to 10/15/00. Contact: (Barbara Madden)
EPA authorized the use of thiamethoxam on cotton to control cotton aphids and whiteflies; 7/11/00 to 9/15/00. Contact: (Steve Schaible)
EPA authorized the use of tebufenozide on sweet potatoes to control armyworms; 7/27/00 to 10/15/00. Contact: (Andrew Ertman)
EPA authorized the use of niclosamide in commercially operated, man-made levee containment ponds for catfish production to control ram's horn snail, an intermediate host to the yellow grub trematode (
Department of Agriculture
EPA authorized the use of fomesafen on snapbeans to control broadleaf weeds; 4/4/00 to 9/15/00. Contact: (Andrea Conrath)
EPA authorized the use of carbofuran on cotton to control aphids; 6/02/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 9/22/00 to 2/1/01. Contact: (Barbara Madden)
Department of Agriculture
EPA authorized the use of clopyralid on canola to control thistles; 2/3/2000 to 7/31/2000. Contact: (Libby Pemberton)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 2/7/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of lambda-cyhalothrin on barley to control cutworms; 3/7/00 to 7/1/00. Contact: (Andrew Ertman)
EPA authorized the use of thiabendazole on lentil seed to control Ascochyta Blight; 3/17/00 to 6/1/00. Contact: (Andrea Conrath)
EPA authorized the use of pyridate on mint to control redroot pigweed and kochia; 4/1/00 to 12/31/00. Contact: (Barbara Madden)
EPA authorized the use of ethalfluralin on canola to control kochia; 4/7/00 to 4/7/01. Contact: (David Deegan)
EPA authorized the use of myclobutanil on mint to control peppermint rust; 4/26/00 to 12/31/00. Contact: (David Deegan)
EPA authorized the use of imazamox on dry beans to control various nightshade species and velvetleaf; 5/1/00 to 6/30/00. Contact: Barbara Madden
EPA authorized the use of lambda-cyhalothrin on barley to control the Russian wheat aphid; 5/11/00 to 7/30/00. Contact: (Andrew Ertman)
EPA authorized the use of tetraconazole on sugarbeets to control Cercospora leafspot; 6/7/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of imazapic-ammonium on pasture/rangeland (including land in the Conservation Reserve Program) to control leafy spurge; 8/1/00 to 12/31/00. Contact: (Libby Pemberton)
EPA authorized the use of chlorine dioxide on stored potatoes to control late blight; 8/31/00 to 8/31/01. Contact: (Andrew Ertman)
Department of Agriculture
EPA authorized the use of metsulfuron-methyl on sorghum to control weeds; 5/24/00 to 7/31/00. Contact: (Andrew Ertman)
EPA authorized the use of imazamox on dry bean to control various nightshade species and velvetleaf; 6/1/00 to 7/15/00. Contact: (Barbara Madden)
EPA authorized the use of tebuconazole on sunflowers to control rust; 6/16/00 to 9/15/00. Contact: (Steve Schaible)
EPA authorized the use of propiconazole on sorghum to control sorghum ergot; 7/1/00 to 8/31/00. Contact: (Steve Schaible)
EPA authorized the use of tetraconazole on sugarbeets to control Cercospora leafspot; 7/20/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of imazapic-ammonium on pasture/rangeland (including land in the Conservation Reserve Program) to control leafy spurge; 8/31/00 to 12/31/00. Contact: (Libby Pemberton)
Department of Agriculture
Department of Agriculture
Department of Environmental Protection
EPA authorized the use of fenbuconazole on blueberries to control mummy berry disease; 3/17/00 to 6/30/00. Contact: (Dan Rosenblatt)
EPA authorized the use of propyzamide on cranberries to control dodder; 3/17/00 to 12/15/00. Contact: (Andrew Ertman)
EPA authorized the use of metolachlor on spinach to control weeds; 3/28/00 to 11/1/00. Contact: (Andrew Ertman)
EPA authorized the use of metolachlor on tomatoes to control weeds; 3/28/00 to 12/1/00. Contact: (Andrew Ertman)
EPA authorized the use of clopyralid on cranberries to control wild bean; 4/28/00 to 12/31/00. Contact: (Libby Pemberton)
EPA authorized the use of imidacloprid on blueberries to control blueberry aphids; 5/10/00 to 8/10/00. Contact: (Andrew Ertman)
EPA authorized the use of fludioxonil on peaches and nectarines to control brown rot, gray mold, and Rhizopus rot; 5/31/00 to 9/30/00. Contact: (Andrew Ertman)
EPA authorized the use of imidacloprid on blueberries to control the oriental beetle; 6/1/00 to 8/10/00. Contact: (Andrew Ertman)
EPA authorized the use of clopyralid on peaches and nectarine to control weeds that serve as alternate hosts for plum pox virus or are refugia for the green peach aphid, the vector of this virus; 7/26/00 to 12/1/00. Contact: (Barbara Madden)
Department of Agriculture
On 7/27/00, for the use of spinosad on peanuts to control armyworms. This program ended on 10/31/00. Contact: (Andrew Ertman)
EPA authorized the use of propiconazole on sorghum to control sorghum ergot; 6/1/00 to 9/30/00. Contact: (Steve Schaible)
EPA authorized the use of myclobutanil on peppers (bell and non-bell) to control powdery mildew; 6/14/00 to 10/15/00. Contact: (David Deegan)
EPA authorized the use of metsulfuron-methyl on sorghum to control triazine resistant pigweed; 6/16/00 to 9/30/00. Contact: (Andrew Ertman)
EPA authorized the use of spinosad on peanuts to control armyworms; 7/27/00 to 10/31/00. Contact: (Andrew Ertman)
EPA authorized the use of spinosad on alfalfa to control armyworms; 8/24/
Department of Environmental Conservation
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 3/21/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of imidacloprid on peaches, nectarines, plums and apricots to control aphids; 4/17/00 to 10/15/00. Contact: (Andrew Ertman)
EPA authorized the use of desmedipham on red beets to control broadleaf weeds; 5/15/00 to 7/31/00. Contact: (Steve Schaible)
EPA authorized the use of dimethenamid on dry bulb onion to control weeds; 6/9/00 to 6/15/00. Contact: (Barbara Madden)
EPA authorized the use of propamocarb hydrochloride on potatoes to control late blight; 7/13/00 to 7/13/01. Contact: (Libby Pemberton)
Department of Agriculture
EPA authorized the use of fenbuconazole on blueberries to control mummy berry disease; 3/17/00 to 8/31/00. Contact: (Dan Rosenblatt)
Department of Agriculture
On 8/1/00, for the use of glyphosate on flax to control Canadian and perennial sowthistle. This program ended on 10/1/00. Contact: (Libby Pemberton)
EPA authorized the use of clopyralid on flax to control Canada thistle and perennial sowthistle; 3/7/00 to 7/31/00. Contact: (Libby Pemberton)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 3/8/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of thiabendazole on lentil seed to control Ascochyta blight; 3/17/00, to 6/1/00. Contact: (Andrea Conrath)
EPA authorized the use of ethametsulfuron on seed canola to control wild mustard; 3/30/00 to 7/1/00. Contact: (Dan Rosenblatt)
EPA authorized the use of ethalfluralin on canola to control kochia; 4/7/00 to 4/7/01. Contact: (David Deegan)
EPA authorized the use of imazamox on canola to control mustard; 5/1/00 to 7/15/00. Contact: (Barbara Madden)
EPA authorized the use of imazamox on dry beans to control various nightshade species and velvetleaf; 5/1/00 to 6/30/00. Contact: Barbara Madden
EPA authorized the use of tetraconazole on sugarbeets to control Cercospora leafspot; 6/15/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of propiconazole on dry beans to control rust; 6/15/00 to 8/31/00. Contact: (Steve Schaible)
EPA authorized the use of tebuconazole on wheat and barley to control Fusarium head blight; 6/15/00 to 8/25/00. Contact: (Steve Schaible)
EPA authorized the use of fomesafen on dry beans to control various weed species; 6/16/00 to 8/15/00. Contact: (Andrea Conrath)
EPA authorized the use of tebuconazole on sunflowers to control rust; 7/5/00 to 9/5/00. Contact: (Steve Schaible)
EPA authorized the use of imazapic-ammonium on pasture/rangeland (including land in the Conservation Reserve Program) to control leafy spurge; 8/1/00 to 12/31/00. Contact: (Libby Pemberton)
EPA authorized the use of glyphosate on flax to control Canada thistle and perennial sowthistle; 9/7/00 to 10/15/00. Contact: (Libby Pemberton)
EPA authorized the use of chlorine dioxide on stored potatoes to control late blight; 9/25/00 to 8/31/01. Contact: (Andrew Ertman)
Department of Agriculture
EPA authorized the use of oxyfluorfen on strawberries to control weeds; 6/20/00 to 12/15/00. Contact: (Barbara Madden)
Department of Agriculture
On 9/19/00, for the use of spinosad on alfalfa to control armyworms. This program ended on 10/3/00. Contact: (Andrew Ertman)
EPA authorized the use of emamectin benzoate on cotton to control beet armyworms; 5/4/00 to 10/31/00. Contact: (Andrea Conrath)
EPA authorized the use of metsulfuron-methyl on sorghum to control weeds; 5/24/00 to 8/15/00. Contact: (Andrew Ertman)
EPA authorized the use of carbofuran on cotton to control aphids; 6/02/00 to 10/15/00. Contact: (David Deegan)
EPA authorized the use of indoxacarb on cotton to control beet armyworms; 6/15/00 to 10/31/00. Contact: (Dan Rosenblatt)
EPA authorized the use of propiconazole on sorghum to control sorghum ergot; 6/15/00 to 9/30/00. Contact: (Steve Schaible)
EPA authorized the use of dicloran on peanuts to control Sclerotinia blight; 7/15/00 to 10/15/00. Contact: (Barbara Madden)
EPA authorized the use of tebufenozide on peanuts to control beet armyworm; 7/15/00 to 10/15/00. Contact: (Barbara Madden)
EPA authorized the use of bifenthrin on peanuts to control spider mites; 7/21/00 to 10/30/00. Contact: (Andrea Conrath)
EPA authorized the use of metolachlor on spinach to control weeds; 9/8/00 to 3/31/01. Contact: (Andrew Ertman)
EPA authorized the use of fluazinam on peanuts to control Sclerotinia blight; 9/11/00 to 10/15/00. Contact: (Barbara Madden)
Department of Agriculture
On 7/28/00, EPA denied the use of procarbazone on wheat to control goatgrass. This request was denied because EPA does not have adequate data previously reviewed for this chemical for which to reach a conclusion that there is a “reasonable certainty of no harm” to human health resulting from exposure to chemical residues, nor can EPA reach any conclusions about ecological effects resulting from this use, should it occur. Contact: (David Deegan).
EPA authorized the use of pendimethalin on mint to control kochia and redroot pigweed; 2/1/00 to 12/31/00. Contact: (Steve Schaible)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 2/2/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of fenbuconazole on blueberries to control mummy berry disease; 2/9/00 to 5/31/00. Contact: (Dan Rosenblatt)
EPA authorized the use of ethoprop on baby hops and idle hops to control garden symphylans; 2/10/00 to 5/31/00. Contact: (Steve Schaible)
EPA authorized the use of cymoxanil on hops to control downy mildew; 3/6/00 to 9/15/00. Contact: (Libby Pemberton)
EPA authorized the use of tebuconazole on barley to control barley stripe rust; 3/30/00 to 8/15/00. Contact: (Steve Schaible)
EPA authorized the use of oxytetracycline on apples to control fire blight; 4/11/00 to 8/1/00. Contact: (Andrea Conrath)
EPA authorized the use of myclobutanil on hops to control powdery mildew; 4/13/00 to 9/22/00. Contact: (David Deegan)
EPA authorized the use of tebuconazole on hops to control powdery mildew; 4/13/00 to 9/22/00. Contact: (David Deegan)
EPA authorized the use of trifloxystrobin on hops to control powdery mildew; 4/13/00 to 9/22/00. Contact: (David Deegan)
EPA authorized the use of pyridate on mint to control redroot pigweed and kochia; 4/15/00 to 12/31/00. Contact: (Barbara Madden)
EPA authorized the use of fluroxypyr on field corn to control volunteer potatoes; 4/15/00 to 8/1/00. Contact: (Andrew Ertman)
EPA authorized the use of fluroxypyr on sweet corn to control volunteer potatoes; 4/15/00 to 8/1/00. Contact: (Andrew Ertman)
EPA authorized the use of propiconazole on raspberries to control yellow rust; 5/1/00 to 11/1/00. Contact: (Steve Schaible)
EPA authorized the use of Switch 62.5 WG (containing the active ingredients fludioxonil and cyprodinil) on caneberries to control gray mold; 5/9/00 to 9/10/00. Contact: (Steve Schaible)
EPA authorized the use of triazamate on true fir Christmas trees to control root aphids; 5/24/00 to 10/31/00. Contact: (Steve Schaible)
EPA authorized the use of tebuconazole on wheat to control stripe rust and leaf rust; 5/22/00 to 7/15/00. Contact: (Steve Schaible)
EPA authorized the use of paraquat dichloride on green and dried peas grown for seed to control weeds; 5/30/00 to 11/30/00. Contact: (Libby Pemberton)
EPA authorized the use of fludioxonil on peaches to control brown rot, gray mold, and Rhizopus rot; 5/31/00 to 9/30/00. Contact: (Andrew Ertman)
EPA authorized the use of bifenthrin on raspberries to control weevils; 6/13/00 to 8/15/00. Contact: (Andrea Conrath)
EPA authorized the use of propamocarb hydrochloride on potatoes to control late blight; 6/14/00 to 10/31/00. Contact: (Libby Pemberton)
EPA authorized the use of ethoprop on baby mint to control garden symphylans; 7/26/00 to 9/15/00. Contact: (Steve Schaible)
EPA authorized the use of chlorine dioxide on stored potatoes to control late blight; 8/31/00 to 8/31/01. Contact: (Andrew Ertman)
EPA authorized the use of bifenthrin on potatoes to control spider mites; 9/07/00 to 10/15/00. Contact: (Andrea Conrath). Oregon had declared a crisis for this use on 8/09/00.
EPA authorized the use of flufenacet on wheat to control annual ryegrass; 10/5/00 to 6/30/01. Contact: (Barbara Madden)
Department of Agriculture
EPA authorized the use of fomesafen on snap beans to control weeds; 5/4/00 to 8/30/00. Contact: (Andrea Conrath)
EPA authorized the use of metolachlor on spinach to control weeds; 6/1/00 to 8/30/00. Contact: (Andrew Ertman)
EPA authorized the use of oxyfluorfen on strawberries to control broadleaf weeds; 10/15/00 to 12/15/00. Contact: (Barbara Madden)
Department of Environmental Management
Clemson University
EPA authorized the use of Switch 62.5 WG (containing the active ingredients fludioxonil and cyprodinil) on strawberries to control flower blight and fruit rot; 5/12/00 to 6/15/00. Contact: (Steve Schaible)
EPA authorized the use of fludioxonil on peaches and nectarines to control brown rot; 5/15/00 to 9/15/00. Contact: (Andrew Ertman)
EPA authorized the use of indoxacarb on cotton to control beet armyworm and tobacco budworm; 7/27/00 to 10/31/00. Contact: (Dan Rosenblatt)
EPA authorized the use of diuron in/on catfish ponds to control blue-green algae; 8/04/00 to 11/30/00. Contact: (David Deegan)
Department of Agriculture
EPA authorized the use of pendimethalin on mint to control
EPA authorized the use of tebuconazole on wheat and barley to control Fusarium head blight; 5/15/00 to 8/25/00. Contact: (Steve Schaible)
Department of Agriculture
EPA authorized the use of carbofuran on cotton to control aphids; 7/21/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of tebufenozide on pasture land to control armyworm; 7/25/00 to 12/15/00. Contact: (Barbara Madden)
Department of Agriculture
On 4/16/00, for the use of myclobutanil on cucurbit vegetables to control powdery mildew. This program ended on 5/16/00. Contact: (Dan Rosenblatt)
On 6/23/00, for the use of tebufenozide on pasture land to control armyworms. This program ended on 10/31/00. Contact: (Barbara Madden)
On 8/18/00, for the use of spinosad on alfalfa to control armyworms. This program ended on 11/1/00. Contact: (Andrew Ertman)
On 7/27/00, for the use of spinosad on peanuts to control armyworms. This program ended on 10/31/00. Contact: (Andrew Ertman)
On 5/1/00 EPA denied the use of fluazinam on peanuts to control Sclerotinia blight. This request was denied based upon the Agency's inability, at this time, to reach a “reasonable certainty of no harm” finding regarding health effects which may result if this use were to occur. Contact: (Barbara Madden)
On 9/20/00 EPA denied the use of chlorfenapyr on cotton to control beet armyworm. This request was denied based upon the Agency's inability, at this time, to make the required finding that the use would not cause unreasonable adverse effects on the environment. Additionally, since EPA cannot register this use and the Registrant has withdrawn its application for registration of chlorfenapyr on cotton, adequate progress toward registration is not being made. Contact: (Andrea Conrath)
EPA authorized the use of clomazone on rice to control Barnyardgrass and other annual weeds; 1/25/00 to 6/01/00. Contact: (David Deegan)
EPA authorized the use of metsulfuron-methyl on sorghum to control triazine-resistant pigweed; 2/3/00 to 8/15/00. Contact: (Andrew Ertman)
EPA authorized the use of propamocarb hydrochloride on potatoes to control late blight; 3/2/00 to 10/31/00. Contact: (Libby Pemberton)
EPA authorized the use of carbofuran on cotton to control aphids; 4/21/00 to 10/31/00. Contact: (David Deegan)
EPA authorized the use of emamectin benzoate on cotton to control beet armyworms; 5/4/00 to 10/1/00. Contact: (Andrea Conrath)
EPA authorized the use of myclobutanil on cucurbit vegetables to control powdery mildew; 5/16/00 to 5/1/01. Contact: (Dan Rosenblatt)
EPA authorized the use of methoxyfenozide on cotton to control beet armyworms; 6/5/00 to 10/1/00. Contact: (Dan Rosenblatt)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 6/29/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of indoxacarb on cotton to control beet armyworms; 6/15/00 to 10/31/00. Contact: (Dan Rosenblatt)
EPA authorized the use of metolachlor on spinach to control weeds; 6/29/00 to 6/28/01. Contact: (Andrew Ertman)
EPA authorized the use of dicloran on peanuts to control Sclerotinia blight; 7/1/00 to 10/31/00. Contact: (Barbara Madden)
EPA authorized the use of tebufenozide on pasture land to control armyworm; 7/25/00 to 12/15/00. Contact: (Barbara Madden)
EPA authorized the use of spinosad on peanuts to control armyworms; 7/27/00 to 10/31/00. Contact: (Andrew Ertman)
EPA authorized the use of spinosad on alfalfa to control armyworms; 8/18/00 to 11/1/00. Contact: (Andrew Ertman)
EPA authorized the use of bifenthrin on seed sorghum to control spider mites; 8/23/00 to 8/23/01. Contact: (Andrea Conrath)
EPA authorized the use of fluazinam on peanuts to control Sclerotinia blight; 9/11/00 to 10/1/00. Contact: (Barbara Madden)
EPA authorized the use of chlorine dioxide on stored potatoes to control late blight; 9/28/00 to 8/31/01. Contact: (Andrew Ertman)
Department of Agriculture
EPA authorized the use of oxytetracycline on apples to control fire blight; 7/27/00 to 9/30/00. Contact: (Andrea Conrath)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 9/8/00 to 2/1/01. Contact: (Barbara Madden)
Department of Agriculture
Department of Agriculture and Consumer Services
On 3/24/00 EPA denied the use of acibenzolar on tomatoes to control bacterial diseases. This request was denied because the data that was submitted did not support the claim that an emergency exists. Rather, the available information indicated that the registered alternatives should provide adequate control of these diseases. Additionally, the claims that significant economic losses would occur were not supported by the submitted information. Since this request proposed the use of a new chemical, a notice of receipt published in the
EPA authorized the use of fomesafen on snap beans to control broad leaf weeds; 3/01/00 to 9/20/00. Contact: (Andrea Conrath)
EPA authorized the use of terbacil on watermelon to control morning glory and other annual broadleaf weeds; 4/3/00 to 6/15/00. Contact: (David Deegan)
EPA authorized the use of clomazone on watermelon to control broadleaf weeds; 4/6/00 to 6/30/00. Contact: (David Deegan)
EPA authorized the use of imidacloprid on peaches and nectarines to control aphids; 6/1/00 to 10/1/00. Contact: (Andrew Ertman)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 7/27/00 to 2/1/01. Contact: (Barbara Madden)
EPA authorized the use of metolachlor on spinach to control weeds; 9/8/00 to 12/31/01. Contact: (Andrew Ertman)
EPA authorized the use of flufenacet on wheat to control annual ryegrass; 10/18/00 to 12/31/00. Contact: (Barbara Madden)
Department of Agriculture
On 8/9/00, for the use of bifenthrin on potatoes to control spider mites. This program ended on 10/15/00. Contact: (Andrea Conrath)
EPA authorized the use of pendimethalin on mint to control kochia and redroot pigweed; 2/1/00 to 12/31/00. Contact: (Steve Schaible)
EPA authorized the seed treatment use of fosetyl-Al on peas to control downy mildew; 2/10/00 to 4/30/00. Contact: (Steve Schaible)
EPA authorized the use of propiconazole on blueberries to control mummy berry disease; 3/15/00 to 6/10/00. Contact: (Steve Schaible)
EPA authorized the use of thiabendazole on lentil seed to control Ascochyta blight; 3/17/00 to 6/1/00. Contact: (Andrea Conrath)
EPA authorized the use of fluroxypyr on field corn to control volunteer potatoes; 3/24/00 to 8/1/00. Contact: (Andrew Ertman)
EPA authorized the use of fluroxypyr on sweet corn to control volunteer potatoes; 3/24/00 to 8/1/00. Contact: (Andrew Ertman)
EPA authorized the use of tebuconazole on barley to control barley stripe rust; 3/30/00 to 8/15/00. Contact: (Steve Schaible)
EPA authorized the use of bifenthrin on raspberries to control weevils; 3/30/00 to 8/10/00. Contact: (Andrea Conrath)
EPA authorized the use of oxytetracycline on apples to control fire blight; 4/11/00 to 8/1/00. Contact: (Andrea Conrath)
EPA authorized the use of myclobutanil on hops to control powdery mildew; 4/13/00 to 9/22/00. Contact: (David Deegan)
EPA authorized the use of tebuconazole on hops to control powdery mildew; 4/13/00 to 9/22/00. Contact: (David Deegan)
EPA authorized the use of trifloxystrobin on hops to control powdery mildew; 4/13/00 to 9/22/00. Contact: (David Deegan)
EPA authorized the use of myclobutanil on mint to control powdery mildew; 4/26/00 to 12/31/00. Contact: (David Deegan)
EPA authorized the use of pyridate on mint to control redroot pigweed and kochia; 5/l/00 to 12/31/00. Contact: (Barbara Madden)
EPA authorized the use of propiconazole on raspberries to control yellow rust; 5/1/00 to 7/1/00. Contact: (Steve Schaible)
EPA authorized the use of pirimicarb on vegetable seed crops to control aphids; 5/4/00 to 9/15/00. Contact: (Steve Schaible)
EPA authorized the use of clopyralid on canola to control Canada thistle; 5/5/00 to 7/31/00. Contact: (Libby Pemberton)
EPA authorized the use of Switch 62.5 WG (containing the active ingredients fludioxonil and cyprodinil) on caneberries to control gray mold; 5/9/00 to 9/10/00. Contact: (Steve Schaible)
EPA authorized the use of propiconazole on cranberries to control cotton ball disease; 5/15/00 to 7/31/00. Contact: (Steve Schaible)
EPA authorized the use of triazamate on true fir Christmas trees to control root aphids; 5/24/00 to 10/31/00. Contact: (Steve Schaible)
EPA authorized the use of paraquat dichloride on green and dried peas grown for seed to control weeds; 5/30/00 to 11/30/00. Contact: (Libby Pemberton)
EPA authorized the use of dimethenamid on sugar beets to control weeds; 6/9/00 to 7/10/00. Contact: (Barbara Madden)
EPA authorized the use of propamocarb hydrochloride on potatoes to control late blight; 6/14/00 to 10/31/00. Contact: (Libby Pemberton)
EPA authorized the use of chlorine dioxide on stored potatoes to control late blight; 8/31/00 to 8/31/01. Contact: (Andrew Ertman)
EPA authorized the use of bifenthrin on potatoes to control spider mites; 9/07/00 to 10/15/00. Contact: (Andrea Conrath). Washington had declared a crisis exemption for this use on 8/09/00.
EPA authorized the use of zinc phosphide on timothy, clover and alfalfa to control meadow vole; 9/19/00 to 5/1/01. Contact: (Libby Pemberton)
EPA authorized the use of flufenacet on wheat to control annual ryegrass; 10/5/00 to 6/30/01. Contact: (Barbara Madden)
Department of Agriculture
Department of Agriculture, Trade, and Consumer Protection
On 5/1/00, for the use of mancozeb on ginseng to control leaf and stem blight. This program ended on 6/30/00. Contact: (Dan Rosenblatt)
On 5/26/00, for the use of azoxystrobin on ginseng to control leaf and stem blight. This program ended on 6/30/00. Contact: (Dan Rosenblatt)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 1/20/00 to 1/18/01. Contact: (Barbara Madden)
EPA authorized the use of metolachlor on spinach to control weeds; 2/17/00 to 8/31/00. Contact: (Andrew Ertman)
EPA authorized the use of propiconazole on cranberries to control cottonball disease; 4/15/00 to 7/31/00. Contact: (Steve Schaible)
EPA authorized the use of pyridate on mint to control redroot pigweed and kochia; 4/15/00 to 12/31/00. Contact: (Barbara Madden)
EPA authorized the use of imazamox on dry bean to control various nightshade species and velvetleaf; 5/1/
EPA authorized the use of dimethomorph on cucumbers and pumpkins to control Phytophthora fruit blight/rot; 5/10/00 to 10/1/00. Contact: (Libby Pemberton)
EPA authorized the use of fluroxypyr on field corn to control volunteer potatoes; 6/1/00 to 7/15/00. Contact: (Andrew Ertman)
EPA authorized the use of carfentrazone-ethyl on sweet corn to control broadleaf weeds; 6/2/00 to 6/30/00. Contact: (Steve Schaible)
EPA authorized the use of mancozeb on ginseng to control leaf and stem blight; 6/30/00 to 10/15/00. Contact: (Dan Rosenblatt)
EPA authorized the use of azoxystrobin on ginseng to control leaf and stem blight; 6/30/00 to 10/15/00. Contact: (Dan Rosenblatt)
EPA authorized the use of propamocarb hydrochloride on potatoes to control late blight; 7/13/00 to 7/13/01. Contact: (Libby Pemberton)
EPA authorized the use of chlorine dioxide on stored potatoes to control late blight; 8/31/00 to 8/31/01. Contact: (Andrew Ertman)
Department of Agriculture
EPA authorized the use of imazamox on dry beans to control various nightshade species and velvetleaf; 6/1/00 to 7/15/00. Contact: Barbara Madden
EPA authorized the use of tetraconazole on sugarbeets to control Cercospora leafspot; 6/7/00 to 9/30/00. Contact: (David Deegan)
EPA authorized the use of imazapic-ammonium on pasture/rangeland (including land in the Conservation Reserve Program) to control leafy spurge and Dalmation toadflax; 8/1/00 to 12/31/00. Contact: (Libby Pemberton)
EPA authorized the use of coumaphos in beehives to control varroa mites and small hive beetles; 11/03/00 to 2/1/01. Contact: (Barbara Madden)
Animal and Plant Health Inspection Service
EPA authorized the use of carbaryl on flightless birds to control exotic ectoparasites; 4/18/00 to 4/18/03. Contact: (Andrew Ertman)
EPA authorized the use of quaternary ammonium compounds on field equipment to control witchweed and broomrape; 8/21/00 to 8/21/03. Contact: (Libby Pemberton)
Environmental protection, Pesticides and pests.
Environmental Protection Agency (EPA).
Notice.
This notice announces receipt of an application 524-EUP-OU from Monsanto Company requesting an experimental use permit (EUP) for the plant-pesticide Cry2Ab protein and the genetic material necessary for its production in corn (Vector ZMBK28L). The Agency has determined that the application may be of regional and national significance. Therefore, in accordance with 40 CFR 172.11(a), the Agency is soliciting comments on this application.
Comments, identified by docket control number OPP-50874, must be received on or before January 19, 2001.
Comments and data may be submitted by mail,electronically, or in person. Please follow the detailed instructions for each method as provided in Unit I. of the
By mail: Mike Mendelsohn, Biopesticides and Pollution Prevention Division (7511C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-8715; e-mail address: mendelsohn.mike@ epa.gov.
This action is directed to the public in general. This action may, however, be of interest to those persons interested in plant-pesticides or those persons who are or may be required to conduct testing of chemical substances under the Federal Food, Drug and Cosmetic Act (FFDCA), or the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Since other entities may also be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under
1.
2.
1.
2.
3.
Do not submit any information electronically that you consider to be CBI. You may claim information that you submit to EPA in response to this document as CBI by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public version of the official record. Information not marked confidential will be included in the public version of the official record without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person listed under
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Provide specific examples to illustrate your concerns.
6. Offer alternative ways to improve the notice.
7. Make sure to submit your comments by the deadline in this document.
8. To ensure proper receipt by EPA, be sure to identify the docket control number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
EPA has received an application from Monsanto Company, 700 Chesterfield Parkway North, St. Louis, MO 63198 for an experimental use permit for Cry2Ab protein and the genetic material necessary for its production (Vector ZMBK28L) in corn. The program proposes genetically contained non-food-use testing from October 15, 2000 to November 15, 2001 on a total of 11,394 acres in the States of Alabama, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Mississippi, North Carolina, North Dakota, Nebraska, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin, and the Commonwealth of Puerto Rico. Experimental trials are to (1) breeding and observation nursery, (2) agronomic and efficacy trials, and (3) seed increase for further regulatory testing.
Following the review of the Monsanto Company application and any comments and data received in response to this notice, EPA will decide whether to issue or deny the EUP request for this EUP program, and if issued, the conditions under which it is to be conducted. Any issuance of an EUP will be announced in the
The Agency's authority for taking this action is under FIFRA section 5.
Environmental protection, Experimental use permits.
Environmental Protection Agency (EPA).
Notice of availability of the Project XL draft final project agreement and draft addenda for New Jersey Gold Task Program.
EPA is requesting comments on a Draft Project XL Final Project Agreement (FPA) and Draft Addenda for the New Jersey Gold Track Program. The Draft FPA and Addenda are a voluntary agreement developed collaboratively by the New Jersey Department of Environmental Protection (NJDEP), stakeholders, and EPA. Project XL, announced in the
The Gold Track Project XL project embodies the final and highest tier of NJDEP's Silver and Gold Track Programs. NJDEP has led detailed stakeholder discussions to frame the Silver and Gold Track Program for Environmental Performance (Silver and Gold) since the summer of 1999. New Jersey's Silver and Gold Tracks are designed as a tiered system, requiring an increased level of commitment to environmental performance in return for concomitant regulatory flexibility.
The first or baseline tier, Silver Track, requires participating entities to meet certain core criteria in return for baseline incentives such as recognition
Silver Track II, the second tier of the program, maintains the original core requirements of the baseline tier, as well as some additional commitments. Participants must commit to attaining agreed-upon emission reductions of CO
The third and highest tier, Gold Track, which is covered by this Agreement, represents the highest degree of commitment by participating entities and additional incentives offered by the NJDEP. Gold Track is envisioned to be multi-media in scope, with this Agreement serving as an “umbrella” document to define basic criteria and processes for participation in Gold Track. Core requirements for participating in Gold Track include (among others): Certifying current compliance with all applicable environmental rules and regulations, demonstrating a historically acceptable compliance record, conducting advanced community outreach, having an Environmental Management System (EMS) with an independent third party review component, and entering into a covenant with NJDEP to memorialize commitments and incentives as well as accountability milestones for the duration of the project. Media-specific requirements for participation are presented in the draft media-specific addenda.
Implementing the negotiated incentives under Gold Track may require both federal and state rule changes, which NJDEP plans to pursue through EPA's Project XL Program. Current federal rule change requests from NJDEP are described in the draft media-specific addenda.
The period for submission of comments ends on January 19, 2001.
All comments on the proposed Final Project Agreement should be sent to: Aleksandra Dobkowski-Joy, USEPA, 290 Broadway, New York, NY 10007, or Chad Carbone, U.S. EPA, Room 1027WT (1802), 1200 Pennsylvania Ave., NW., Washington, DC 20460. Comments may also be faxed to Ms. Dobkowski-Joy (212) 637-5045, or Mr. Carbone (202) 260-1812. Comments may also be received via electronic mail sent to:
To obtain a copy of the proposed Final Project Agreement or Fact Sheet, contact: Aleksandra Dobkowski-Joy, USEPA, 290 Broadway, New York, NY 10007, or Chad Carbone, U.S. EPA, Room 1027WT (1802), 1200 Pennsylvania Ave., NW., Washington, DC 20460. The FPA and related documents are also available via the Internet at the following location:
Environmental Protection Agency.
Notice of availability.
EPA has developed guidelines on awarding Section 319 nonpoint source grants to Indian Tribes in FY 2001. As was the case in FY 2000, Congress has authorized EPA to award nonpoint source pollution control grants to Indian Tribes under section 319 of the Clean Water Act in FY 2001 in an amount that exceeds the statutory cap (in section 518(f) of the Clean Water Act) of
The guidelines are effective December 20, 2000.
Persons requesting additional information or a complete copy of the document should contact Ed Drabkowski at (202) 260-7009; drabkowski.ed@epa.gov; or U.S. Environmental Protection Agency (4503-F), 1200 Pennsylvania Avenue, NW., Washington, DC 20460.
Persons requesting additional information or a complete copy of the document should contact Ed Drabkowski at (202) 260-7009; drabkowski.ed@epa.gov; or U.S. Environmental Protection Agency (4503-F), 1200 Pennsylvania Avenue, NW., Washington, DC 20460. The complete text of today's guidelines is also available on EPA's Internet site on the Nonpoint Source Control Branch homepage
The full text of the Guidelines on Awarding Section 319 Nonpoint Source Grants to Indian Tribes in FY 2001 is published below.
I am very pleased to report that Congress has, for the second year in a row, authorized EPA to award nonpoint source pollution control grants to Indian Tribes under Section 319 of the Clean Water Act (“CWA”) in FY 2001 in an amount that exceeds the statutory cap (in Section 518(f) of the CWA) of
The allowance of an increased funding for Tribal nonpoint source (“NPS”) programs in FY 2001 reflects Congress’ continuing recognition that Indian Tribes need and deserve increased financial support to implement nonpoint source programs that address critical water quality concerns on Tribal lands. EPA shares this view and will continue to work closely with Tribes to assist them in implementing effective Tribal nonpoint source pollution programs.
As was the case last year, the new authorization to exceed
To help achieve this goal, EPA will work with the Tribes to continue to demonstrate that increased 319 funds for Tribes can be used effectively to achieve water quality improvement. We were pleased by the high quality of the Tribes' work plans that formed the basis of the grants awarded to Tribes in FY 2000, which included both base grants for all approved Tribes as well as grants for specific watershed projects awarded to nine of these Tribes through a competitive process. We believe that the Tribes and EPA succeeded in directing the FY 2000 grants towards high-priority activities that will produce on-the-ground results that provide improved water quality. We believe that this success warrants an increase in Tribal 319 grant dollars in FY 2001 to address the extensive NPS control needs throughout Indian country, as discussed below.
As in FY 2000, the grants issuance process for FY 2001 is designed to balance the needs to (1) provide at least some minimum “base” funding to all approved Tribes to help them implement their NPS programs, and (2) provide sufficient funding to support a significant number of watershed projects that can make a substantial additional improvement to water quality.
In FY 2001, we will increase the total Tribal nonpoint source grants amount (from $2,500,000 in FY 2000) to $6,000,000. This increase reflects three factors:
1. The number of Tribes eligible to receive nonpoint source grants has increased since the time that EPA awarded grants to 47 Tribes in FY 2000.
2. We have increased the amount of base funding for Tribes whose land area exceeds 5,000 square kilometers (1,930 square miles) from $30,000 to $50,000.
3. We wish to ensure that there is sufficient funding available to support a significantly larger number of additional nonpoint source watershed projects than the nine that were funded in FY 2000.
EPA will divide the $6,000,000 into two portions: base funding for all approved Tribes, and additional watershed project funding for Tribes selected through a competitive process.
Each Tribe that has an approved nonpoint source assessment and management program (and TAS status) as of January 28, 2001, will receive base funding as follows:
a. For approved Tribes whose land area exceeds 5,000 square kilometers (approximately 1,930 square miles, or about 1,235,000 acres), EPA will provide $50,000 of base funding.
b. For all other approved Tribes, EPA will provide $30,000 of base funding.
EPA considered whether other factors such as population and water resources should be used, in addition to or instead of land area, to distinguish Tribes with the greatest needs from other Tribes. EPA recognizes that each of these factors is relevant and in some circumstances significant. EPA ultimately chose land area as the deciding factor for a cutoff because nonpoint source pollution is strongly related to land use; thus land area is a reasonable criterion that generally is highly relevant to identifying Tribes with the greatest needs (recognizing that Tribes have needs that significantly exceed available resources).
The base funding of $30,000 per Tribe (or $50,000 for the Tribes with the largest land areas) may be used for a range of activities that implement the Tribe's approved NPS management program, including hiring a program coordinator; conducting nonpoint source education programs; providing training; and implementing, alone or in conjunction with other agencies or other funding sources, on-the-ground watershed projects. In general, this base funding should not be used for assessment activities.
Each Tribe that requests base funding must submit a proposed work plan to the appropriate EPA Regional office that conforms to applicable legal requirements and guidelines and is consistent with the Tribe's nonpoint source management program. This proposed work plan should clearly describe each significant category of activity to be funded; the roles of any Federal, local, or other partners in completing each activity; the schedule and budget for implementing funded activities; and the outputs to be produced by performance of the activity. Outputs of activities should be quantified; results of projects should be measurable and indicators to do so clearly stated. Tribes should submit their proposed work plans to the appropriate Regional office by February 16, 2001. If a Tribe does not submit an approvable proposed work plan by that date, its allocated $30,000 (or $50,000) will be added to the competitive pool, discussed immediately below, which will be used to fund Tribal watershed projects.
Regions should work with the Tribes to expeditiously award the base grants. However, if the Tribe will be awarded additional funds to implement a watershed project, as discussed below, the Tribe may prefer combining the formal process for submitting its final application for both the base and competitive funds. Regions should confer with their Tribes and endeavor to proceed in a manner and on a schedule that is most compatible with the Tribes' preferences.
The remaining funds will be awarded to Tribes that have approved nonpoint
As we did for the FY 2000 grants, EPA will establish a watershed project review committee comprised of nine EPA staff, including three EPA Regional Nonpoint Source Coordinators, three EPA Regional Tribal Coordinators, two staff members of the Nonpoint Source Control Branch staff, and one staff member of the American Indian Environmental Office. The committee will then make funding decisions in accordance with the process described below.
Tribes that have approved nonpoint source assessments and management programs as well as TAS status as of January 28, 2001, are invited to apply for watershed project funding by submitting watershed project summaries for proposed projects ranging between $50,000 and $100,000. (This funding is in addition to the base funding that each approved Tribe will receive, as described above.) Tribes that apply for funding for watershed projects should submit a brief (
Tribes seeking watershed project funding should submit their watershed project summaries by mailing them, by February 5, 2001, to Ed Drabkowski of the Nonpoint Source Control Branch, Mail Code 4503F, U.S. Environmental Protection Agency, Ariel Rios Building, 1200 Pennsylvania Avenue, N.W., Washington, D.C. 20460; faxing them to Ed at 202-260-7024; or emailing them to
The watershed project summary should outline the problem to be addressed; the project's goals and objectives; the lead implementing agency (either the Tribe or another organization authorized by the Tribe to be the project leader) and other agencies that will be authorized to expend project funds; the types of measures or practices that will be implemented; the projected implementation schedule; the project's budget; and the environmental indicators and/or other performance measures that will be used to evaluate the success of the project. (The Appendix to this memorandum contains more information on these elements of well-designed watershed implementation plans.)
Perhaps most important, each watershed plan summary should be clearly written with enough detail to indicate to the reviewing committee why the proposed project should be selected for funding. This is critical to help ensure that the best projects are funded.
In ranking the projects, each reviewer on EPA's watershed project review committee will consider the extent to which the following factors are present in each project.
1. The watershed plan summary includes a clear and specific identification of the water quality problem to be addressed, including the pollutants of concern and their sources (including critical areas to be treated, if known).
2. The watershed project consists of implementation actions that are intended to help restore an impaired waterbody for which a total maximum daily load (TMDL) has been developed or a similar process has been used to establish restoration needs (for surface or ground water protection)
EPA recognizes that most Tribes have not yet developed TMDLs. However, where a Tribe has developed a relevant water quality standard and TMDL and seeks Section 319 funding to assist in the implementation of the TMDL, that should be considered by reviewers to be a relevant factor.
3. The tribe has conducted a Unified Watershed Assessment, and the proposed project is planned to be implemented in a Category I watershed.
4. The project is designed to include cooperation and/or combination of resources with other agencies and other parties to provide additional technical and/or financial assistance to the project.
5. The watershed plan summary includes a clear and objective statement of the project's goals and objectives, in terms of controlling the resources and/or of improving/protecting water quality.
6. The summary identifies the management measures or practices to be implemented and the location where these measures and practices will be implemented.
7. The summary identifies the cost of the project and the amount of Section 319 grant dollars that are requested. (This must be within the $50,000-100,000 range.) Please note that a 40% non-Federal match is also required. However, if a Tribe demonstrates that it does not have adequate funds to meet the required match, EPA may approve a 10% non-Federal match.
8. The summary includes an implementation schedule.
9. The summary includes a statement of how the project will be evaluated to determine its success and to derive lessons that will assist the Tribe (and other Tribes) in future projects.
(i)
They will then review the proposed watershed projects and hold a second conference call by March 1 to discuss the projects. Following the second conference call, each Committee member will separately rank the projects and forward their suggested rankings to Ed Drabkowski in the Nonpoint Source Control Branch in EPA Headquarters by March 15, 2001. Headquarters will tally the members' rankings and then hold a final conference call with the Review Committee to provide a final opportunity for members of the Review Committee to discuss the rankings among themselves. By March 30, 2001, EPA will announce which projects have been selected for funding. The Tribes whose watershed projects have been selected for funding will be notified immediately by phone or email, with a written letter to follow.
(ii)
(iii)
EPA's current regulations also provide that EPA may decrease the Tribal match requirement to as low as 10% “upon application and demonstration by the Tribe that it does not have adequate funds (including Federal funds authorized by statute to be used for matching purposes, tribal funds or in-kind contributions) to meet the required match.” See 40 CFR 35.760 (2000).
In making grant awards to Tribes that provide for a reduced match requirement, Regions should include a brief finding that the Tribe has demonstrated that it does not have adequate funds to meet the required match.
Some Tribes have formed intertribal consortia to promote cooperative work. Currently, intertribal consortia are not eligible to receive Section 319 grants. In the preamble to the proposed Tribal rule published on July 23, 1999, EPA discussed (at 64 FR 40085) a proposal to treat a group of individually eligible Tribes as eligible for grants. EPA anticipates that when the final rule is promulgated, intertribal consortia will be eligible for Section 319 grants. However, since the rule is not yet finalized, and since Tribes must submit their FY 2001 grant proposals soon, as discussed earlier in these guidelines, we expect that intertribal consortia will not be eligible to apply for and receive Section 319 grants in FY 2001.
In addition to providing nonpoint source funding to Tribes, EPA remains committed to providing continued technical assistance to Tribes in their efforts to control nonpoint source pollution. During the past several years, EPA has presented fourteen workshops to approximately 250 Tribes throughout the United States to assist them in developing: (1) Nonpoint source assessments to further their understanding of nonpoint source pollution and its impact on water quality; (2) nonpoint source management programs to apply solutions to address their nonpoint source problems; and (3) specific projects to effect on-the-ground solutions. The workshops also have provided information on related EPA and other programs that can help Tribes address nonpoint source pollution, including the provision of technical and funding assistance. (EPA has also held related workshops that have focused on helping Tribes develop Unified Watershed Assessments that address both point and nonpoint source issues that affect their watersheds.) EPA intends to continue providing nonpoint source workshops to interested Tribes around the United States in FY 2001 and to provide other appropriate technical assistance as needed.
During the past year, questions have arisen as to the extent to which Section 319(h) grants may be awarded to Tribes for use outside the reservation. To clarify this issue, we discuss below two types of off-reservation activities: (1) Activities that are related to waters within a reservation, such as those relating to sources upstream of a waterway entering the reservation, and (2) activities that are unrelated to waters of a reservation. As discussed below, the first type of these activities may be eligible; the second is not.
Section 518 (e) of the CWA provides that EPA may treat an Indian Tribe as a State for purposes of Section 319 of the CWA if, among other things, “the functions to be exercised by the Indian tribe pertain to the management and protection of water resources which are * * * within the borders of an Indian reservation.” 33 U.S.C. § 1377 (e)(2). EPA already awards grants to Tribes under Section 106 of the CWA for activities performed outside of a reservation that pertain to reservation waters, such as evaluating impacts of upstream waters on water resources within a reservation. Similarly, EPA has awarded section 106 grants to States to conduct monitoring outside of state borders. EPA has concluded that grants awarded to an Indian Tribe pursuant to Section 319(h) may similarly be used to perform eligible Section 319(h) activities outside of a reservation if: (1) The activity pertains to the management and protection of waters within the reservation, and (2) just as for on-reservation activities, the Tribe meets all other applicable requirements.
As discussed above, EPA is authorized to award Section 319(h) grants to Tribes to perform eligible Section 319(h) activities if the activities pertain to the management and protection of waters within a reservation and the Tribe meets all other applicable requirements. In contrast, EPA is not authorized to award Section 319(h) grants for activities that do not pertain to waters of a reservation. For off-reservation areas, including “usual and accustomed” hunting, fishing, and gathering places, EPA must determine whether the activities pertain to waters of a reservation prior to awarding a grant.
We believe that the lifting of the 1/3% statutory cap once again in FY 2001 provides the Tribes and EPA with an excellent opportunity to further Tribal efforts to reduce nonpoint pollution and enhance water quality on Tribal lands. EPA looks forward to working closely with the Tribes to assist them in implementing effective nonpoint source programs in FY 2001 and creating a sound basis to assure that adequate funds will continue to be provided in the future.
If you have any questions, please do not hesitate to call me at (202) 260-7166 (or email at
[This Appendix is a copy of Appendix C of the Nonpoint Source Program and Grants
A well-designed plan for a successful watershed implementation project typically includes the following:
•
•
•
•
•
•
•
Federal Communications Commission.
Notice.
On December 14, 2000, the Commission released a public notice announcing the January 16 and 17, 2001, meeting and agenda of the North American Numbering Council (NANC). The intended effect of this action is to make the public aware of the NANC's next meeting and its agenda.
Cheryl Callahan, Designated Federal Officer (DFO) at (202) 418-2320 or cchallaha@fcc.gov. The address is: Network Services Division, Common Carrier Bureau, Federal Communications Commission, The Portals, 445 12th Street, SW, Suite 6A207, Washington, DC 20554. The fax number is: (202) 418-2345. The TTY number is: (202) 418-0484.
Released: December 14, 2000.
The North American Numbering Council (NANC) has scheduled a meeting to be held Tuesday, January 16, 2001, from 8:30 a.m. until 5:00 p.m., and on Wednesday, January 17, from 8:30 a.m., until 12 noon. The meeting will be held at the Federal Communications Commission, Portals II, 445 12th Street, SW, Room TW-C305, Washington, DC.
This meeting is open to members of the general public. The FCC will attempt to accommodate as many participants as possible. The public may submit written statements to the NANC, which must be received two business days before the meeting. In addition, oral statements at the meeting by parties or entities not represented on the NANC will be permitted to the extent time permits. Such statements will be limited to five minutes in length by any one party or entity, and requests to make an oral statement must be received two business days before the meeting. Requests to make an oral statement or provide written comments to the NANC should be sent to Cheryl Callahan at the address under
1. Approval of November 28-29, 2000, meeting minutes.
2. NRO (Dkt No 99-200) Second Report and Order.
3. North American Numbering Plan Administration (NANPA) Report. 2Q00 Neutrality Audit dated Aug 17, NRUF Update, and Enterprise Services Update.
4. Report of NANPA Oversight Working Group. Status of NANPA Requirements and Status of NANPA Performance Review.
5. Report of Numbering Resource Optimization (NRO) Working Group. Final NRUF Requirements Document, Continuing Review of NANP-E, and Monitoring of State Pooling Trials.
6. Industry Numbering Committee Report. NANP-E Alternatives Presentation.
7. CTIA Presentation on Imminent Exhaust Procedures.
8. Report of Toll Free Access Codes IMG.
9. Report of the Local Number Portability Administration (LNPA) Working Group. Wireless Number Portability Subcommittee.
10. Report of Cost Recovery Working Group. Status of NBANC B&C Technical Requirements.
11. Steering Group Meeting. Table of NANC Projects, The Big Picture (outline), 2H00 NANC Meeting Dates.
12. Steering Group Report
13. Report from NBANC
14. Reseller CIC IMG status report
15. Oversight of LLCs NPAC
16. Meeting Procedures IMG
17. Public participation (5 minutes each, if any)
18. Other Business
The Commission hereby gives notice of the filing of the following
By Order of the Federal Maritime Commission.
The Federal Maritime Commission hereby gives notice that the following ocean transportation intermediary licenses have been revoked pursuant to section 19 of the Shipping Act of 1984 (46 U.S.C. app. 1718) and the regulations of the Commission pertaining to the licensing of Ocean Transportation Intermediaries, effective on the corresponding dates shown below:
Notice is hereby given that the following Ocean Transportation Intermediary license has been reissued by the Federal Maritime Commission pursuant to section 19 of the Shipping Act of 1984, as amended by the Ocean Shipping Reform Act of 1998 (46 U.S.C. app. 1718) and the regulations of the Commission pertaining to the licensing of Ocean Transportation Intermediaries, 46 CFR 515.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 19817 (j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the office of the Board of Governors/ Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than January 3, 2001.
Board of Governors of the Federal Reserve System, December 14, 2000.
Federal Trade Commission.
Proposed consent agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint that accompanies the consent agreement and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before January 16, 2001.
Comments should be directed to: FTC/Office of the Secretary, Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 20580.
Richard Parker, FTC/H-374, 600 Pennsylvania Avenue, NW., Washington, DC 20580. (202) 326-2574.
Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and section 2.34 of the Commission's Rules of Practice (16 CFR 2.34), notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for December 14, 2000), on the World Wide Web, at
Public comment is invited. Comments should be directed to: FTC/Office of the Secretary, Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 20580. Two paper copies of each comment should be filed, and should be accompanied, if possible, by a 3
The Federal Trade Commission (“Commission”) has accepted for public comment from America Online, Inc. (“AOL”) and Time Warner Inc. (Time Warner”) (collectively “Proposed Respondents”) an Agreement Containing Consent Orders (“Proposed Consent Agreement”), including the Decision and Order (“Proposed Order”). The Proposed Respondents have also reviewed a draft complaint. The Commission has now issued the complaint and an Order to Hold Separate (“Hold Separate Order”). The Proposed Consent Agreement intends to remedy the likely anticompetitive effects arising from the merger of AOL and Time Warner.
AOL is the world's leading internet service provider (“ISP”), providing access to the internet for consumers and businesses. AOL operates two ISPs: America Online, with more than 25 million members; and CompuServe, with more than 2.8 million members. AOL also owns several leading Internet products including AOL Instant Messenger, ICQ, Digital City, MapQuest, and MoviePhone; the AOL.com and Netscape.com portals; the Netscape 6, Netscape Navigator and Communicator browsers; and Spinner.com and NullSoft's Winamp, leaders in Internet music.
Time Warner is the nation's second largest cable television distributor, and one of the leading cable television network providers. Time Warner's cable systems pass approximately 20.9 million homes and serve approximately 12.6 million cable television subscribers, or approximately 20% of U.S. cable television households. Time Warner, or its principally owned subsidiaries, owns leading cable television networks, such as HBO, Cinemax, CNN, TNT, TBS Superstation, Turner Classic Movies and Cartoon Network.
Time Warner also owns, directly or through affiliated businesses, a wide conglomeration of entertainment or media businesses. Time Warner's holdings include leading magazine franchises, such as Time, People and Sports Illustrated; copyrighted music from many of the world's leading recording artists that it produces and distributes through a family of established record labels, such as Warner Bros. Records, Atlantic Records, Elektra Entertainment and Warner Music International; the unique and extensive film and animation libraries owned or managed by Warner Bros. and New Line Cinema; and trademarks, such as the Looney Tunes characters, Batman and The Flintstones; the WB Network, a national broadcasting network; and Internet websites, such as CNN.com. Time Warner is the majority owner of Road Runner (the trade name of ServiceCo, LLC), the second largest provider of cable broadband ISP service in the U.S., serving more than 1.1 million subscribers. Road Runner has an exclusive contract to provide cable broadband ISP service via Time Warner's cable systems through December 2001.
On January 10, 2000, AOL and Time Warner entered into an Agreement and Plan of Merger (the “merger”), pursuant to which Time Warner common stockholders will receive 1.5 shares of the combined AOL Time Warner (“combined company,” or “AOL Time Warner”) for each share of Time Warner common stock they hold. AOL common stockholders will receive one share of common stock of AOL Time Warner for each share of AOL common stock they hold.
According to the complaint the Commission intends to issue, AOL's merger with Time Warner will have anticompetitive effects in three relevant product markets: (1) The market for broadband Internet access; (2) the market for residential broadband Internet transport services, or last mile access; and (3) the market for interactive television (“ITV”) services.
AOL is the dominant narrowband ISP. Its narrowband customer base positions AOL to become a significant broadband ISP competitor as well. Time Warner provides broadband Internet access through Road Runner, a partially owned subsidiary in which it has a controlling interest. AOL and Road Runner are two of the most significant broadband ISP
In the market for broadband Internet transports services, the Commission's complaint alleges that cable television lines and digital subscriber lines (“DSL”) are the two principal means of providing last mile access for broadband ISPs to the customers. Satellite and fixed wireless technologies also provide last mile access, but consumers do not view them as viable alternatives for DSL or cable broadband access. Currently, AOL's principal means of providing broadband access to its subscribers is through DSL, and every broadband subscriber it signs represents a lost revenue opportunity for cable broadband providers. AOL's merger with Time Warner will reduce its incentives to promote and market broadband access through DSL in Time Warner cable areas, adversely affecting DSL rollout in those areas and nationally, and will increase AOL Time Warner's ability to exercise unilateral market power in those areas.
According to the Commission's complaint, ITV combines television programming with Internet functionality. Cable television lines have distinct competitive advantages over DSL in providing ITV services to broadband customers. AOL recently launched AOL TV, a first generation ITV service, and is well positioned to become the leading ITV provider. Local cable companies will play the key role in enabling the delivery of ITV services. After the merger, AOL Time Warner will have incentives to prevent or deter rival ITV providers from competing with AOL's ITV service. Thus, the merger could enable AOL to exercise unilateral market power in the market for ITV services in Time Warner cable areas, which also affects the ability of ITV providers to compete nationally.
The Proposed Order is effective for a term of five years and resolves the Commission's antitrust concerns with the merger as discussed below.
Under the terms of the Proposed Order, before Time Warner can make AOL's broadband ISP service available in certain identified cable divisions representing over 70 percent of Time Warner's cable customers (“Identified Cable Divisions”),
In addition, Respondents cannot begin to advertise or promote AOL's broadband ISP service to subscribers in a cable division until Earthlink's competing ISP service is available to subscribers in that cable division or Earthlink advertises or promotes its service in that cable division, whichever occurs first. These provisions ensure that a competing ISP service, which is not affiliated with AOL Time Warner, is available to subscribers in most Time Warner cable areas at the same time that AOL introduces its cable broadband ISP service. It does not prevent Time Warner from conducting tests involving a limited number of subscribers that are purely for technological and operational implementation purposes, rather than for commercial purposes.
Within 90 days of making AOL's broadband ISP service available to subscribers, Time Warner must enter into agreements to carry at least two other non-affiliated broadband ISPs to provide cable broadband ISP services in the Identified Cable Divisions. The non-affiliated ISPs, and Time Warner's agreements with them, must receive the prior approval of the Commission. If Time Warner fails to enter into such agreements within this time period, the Commission may appoint a trustee who will have the authority to enter into such agreements on Time Warner's behalf. These agreements must also receive the prior approval of the Commission. These agreements must be on terms comparable to either the Earthlink agreement, or any agreement between AOL and another cable system to provide AOL's cable broadband ISP service over that cable system.
In Time Warner's other cable divisions, Time Warner must enter into cable broadband ISP service agreements that have received the prior approval of the Commission with at least three other non-affiliated ISPs that have received the prior approval of the Commission within 90 days of making AOL's cable broadband ISP service available in each such division. If Time Warner fails to enter into such agreements within this time period, the Commission may appoint a trustee who will have the authority to enter into such agreements, which will be subject to the prior approval of the Commission. These agreements must be on terms comparable to either another alternative cable broadband ISP service agreement between a broadband ISP and the Proposed Respondents approved by the Commission, or any agreement between AOL and another cable system to provide AOL's cable broadband ISP service over that cable company's system.
The Proposed Order requires Time Warner to include several provisions in the agreements it negotiates with the non-affiliated ISPs. Specifically:
• Time Warner must include a most favored nation (“MFN”) clause in all alternative cable broadband ISP service agreements submitted to the Commission for approval. The MFN must provide that if AOL executes a cable broadband ISP service agreement with another cable system operator, Respondents must provide a copy of the agreement with that cable system operator to a Monitor Trustee appointed by the Commission; give notice of the execution of the agreement to each non-affiliated ISPs that is a party to an alternative cable broadband ISP service agreement approved by the Commission; and give the non-affiliated ISPs the ability to convert to all of the rates and terms in the cable system operator's agreement;
• Time Warner must also include in all alternative cable broadband ISP service agreements submitted to the Commission for approval a requirement that if Proposed Respondents makes available different levels of service to their affiliated ISPs, they must make those levels of service available to non-affiliated ISPs;
• Time Warner must also include in all alternative cable broadband ISP service agreements submitted to the Commission for approval a requirement that if Proposed Respondents make available any network flow monitoring data or usage accounting to any of their affiliated ISPs, they must make that same data or accounting available to non-affiliated ISPs;
• Time Warner must also include in all alternative cable broadband ISP service agreements, at the option of the non-affiliated ISP, a requirement that
• If requested by a non-affiliated ISP, Time Warner must provide the nonaffiliated ISPs with the same point of connection within Time Warner's cable divisions that Time Warner provides to affiliated ISPs. This provision is intended to ensure that Time Warner may not discriminate against non-affiliated ISPs by providing them with a less-advantageous connection point to its network than it provides to AOL.
If any of the alternative cable broadband ISP service agreements approved by the Commission is for a term that terminates prior to expiration of the Proposed Order (
If Time Warner terminates any of the alternative cable broadband ISP service agreements approved by the Commission before the expiration of the Proposed Order, the Proposed Order requires Time Warner to enter into an additional alternative cable broadband ISP service agreement with a non-affiliated ISP, subject to the Commission's approval, which must take effect immediately upon the expiration of the original agreement.
If any non-affiliated ISP terminates its alternative cable broadband ISP service agreement approved by the Commission before the expiration of the Proposed Order, or if the non-affiliated ISP ceases to make its ISP service available to subscribers in a particular identified cable division, Time Warner must enter into an additional alternative cable broadband ISP service agreement with a non-affiliated ISP, subject to the Commission's approval, within 90 days after the original non-affiliated cable broadband ISP service is no longer available to subscribers.
In addition to the broadband ISP service agreements described above, the Proposed Order also requires Time Warner to negotiate and enter into arms' length, commercial agreements with any other non-affiliated ISP that seeks to provide cable broadband ISP service on Time Warner's cable system. Time Warner may decline to enter into such negotiations or agreements or impose rates, terms, or conditions based on cable broadband capacity constraints, other cable broadband technical limitations, or cable broadband business considerations, but only so long as it makes such determinations without discrimination on the basis of affiliation and not on the basis of the impact on Proposed Respondents' ISPs (including, but not limited to a decrease in subscribers of Proposed Respondents' ISPs).
The purpose of these provisions is to ensure that a full range of content and services from non-affiliated ISPs is available to subscribers; prevent discrimination by Proposed Respondents as to non-affiliated ISPs on the basis of affiliation, which would interfere with the ability of the non-affiliated ISP to provide a full range of content and services; and remedy the lessening of competition in the market for broadband ISP service as alleged in the Commission's complaint.
Section III of the Proposed Order prohibits Time Warner from interfering in any way with content passed along the bandwidth contracted for and being used by non-affiliated ISPs in compliance with their agreements with Proposed Respondents. The Proposed Order also prohibits Time Warner from discriminating on the basis of affiliation in the transmission or modification of content that Time Warner has contracted to deliver to subscribers over its cable systems. The Proposed Order specifically prohibits Time Warner from interfering with the ability to a subscriber to use, in conjunction with ITV services provided by a non-affiliated entity, interactive signals, triggers, or other content that the Proposed Respondents have agreed to carry. If Time Warner has agreed to transmit ITV signals or interactive triggers that AOL subscribers can use, it cannot block transmission of such ITV signals or triggers to subscribers using a competing ITV service. In addition, the Proposed Order prohibits the Proposed Respondents from entering into any agreement with any other cable system that would interfere with the ability of the other cable system to enter into agreements with non-affiliated ISPs or ITV providers.
The Proposed Order also requires the Proposed Respondents to provide the Commission with all complaints from any non-affiliated broadband ISP relating to the failure of the Proposed Respondents to make content available. The Proposed Order also requires the Proposed Respondents to notify the Commission whenever a television programmer complains that the Proposed Respondents have failed to carry interactive triggers, signals or content through its cable systems.
Section IV of the Proposed Order requires AOL to charge the same or comparable price for its DSL service to subscribers in Time Warner cable areas where AOL cable broadband ISP service or Road Runner is available as AOL charges for its DSL service in areas in which neither AOL cable broadband ISP service nor Road Runner is available. However, AOL may charge different prices for its DSL service to the extent such pricing differences reflect any actual cost differences for DSL transmission services. The Proposed Respondents must include a description of these cost differences in the reports they are required to submit to the Commission.
The Proposed Order also requires AOL to market and promote its DSL services to subscribers in Time Warner cable areas where AOL cable broadband ISP service or Road Runner is available at the same or comparable level and in the same or comparable manner as it markets and promotes DSL services to subscribers in areas in which neither AOL cable broadband ISP service nor Road Runner is available.
The Proposed Consent Order authorizes the Commission to appoint a Monitor Trustee to monitor compliance with the Order at any time after the Proposed Respondents sign the Consent Agreement. The Proposed Consent Order provides the Monitor Trustee with the power and authority to monitor the Proposed Respondents' compliance with the terms of the Proposed Consent Order, and full and complete access to personnel, books, records, documents, and facilities of the Proposed Respondents to fulfill that responsibility. In addition, the Monitor Trustee may request any other relevant information that relate to the Proposed Respondents' obligations under the Proposed Consent Order. The Proposed Consent Order precludes Proposed Respondents from taking any action to interfere with or impede the Monitor Trustee's ability to perform his or her responsibilities or to monitor compliance with the Proposed Consent Order.
The Monitor Trustee may hire such consultants, accountants, attorneys, and other assistants as are reasonably necessary to carry out the monitor Trustee's duties and responsibilities. The Proposed Consent Order requires the Proposed Respondents to bear the cost and expense of hiring these assistants.
The Proposed Consent Order provides that the Commission may appoint a trustee to enter into broadband agreements with non-affiliated ISPs in two instances. First, if the Proposed Respondents have failed to enter into agreements with two additional ISPs in the Identified Cable Divisions within 90 days of making an affiliated ISP available to subscribers, the Commission may appoint a trustee to enter into an agreements, subject to the prior approval of the Commission. The trustee shall, for an additional 90 days, offer to enter into agreements with non-affiliated ISPs that are comparable, taken as a whole, to (1) the Earthlink agreement; or (2) any broadband agreement AOL enters into with any other cable system operator. The trustee's obligation is to ensure that at least two non-affiliated ISPs are available on the Time Warner system in these divisions in addition to Earthlink.
The Commission may also appoint a trustee to enter into agreements in other time Warner cable divisions if the Proposed Respondents fail to enter into agreements with at least three non-affiliated ISPs that the Commission approves within 90 days of making any affiliated ISP available. The trustee shall, for an additional 90 days, offer to enter into agreements with non-affiliated ISPs that are comparable, taken as a whole, to (1) any other broadband agreement with a non-affiliated ISP for carriage on any Time Warner cable system; or (2) any broadband agreement AOL enters into with any other cable system operator. The trustee's obligation is to ensure that at least three non-affiliated ISPs are available on the Time Warner cable systems in these divisions.
In addition to the Proposed Order, the Commission also issued an Order to Hold Separate (“Hold Separate Order”). The purpose of the Hold Separate Order is to prevent interim harm to competition and to prevent AOL from gaining a competitive first mover advantage through a relationship with Road Runner.
The Hold Separate Order requires the Proposed Respondents to hold AOL and Road Runner separate in each Identified Cable Division until they have made an affiliated ISP available to broadband customers in that Identified Cable Division. The Hold Separate Order expressly prohibits AOL and Road Runner from, among other things, cross or joint promotional activities, joint or cooperative advertising, and any steps to benefit, directly or indirectly, from each other's business activities.
The Commission may appoint a trustee to monitor compliance with the terms of the Hold Separate Order.
The Proposed Consent Agreement has been placed on the public record for 30 days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty days, the Commission will again review the Proposed Consent Agreement and the comments received and will decide whether or not to make the Proposed Order final.
By accepting the Proposed Agreement subject to final approval, the Commission anticipates that the competitive problems alleged in the complaint will be resolved. The purpose of this analysis is to invite public comment on the Proposed Consent Agreement, to aid the Commission in its determination of whether it should make final the Proposed Order contains in the agreement. This analysis is not intended to constitute an official interpretation of the Proposed Order, nor is it intended to modify the terms of the Proposed Order in any way.
By direction of the Commission.
The Commission voted today to accept the proposed consent in America On Line, Inc./Time Warner Inc., File Number 001-0105. This merger marks the first, and potentially most significant convergence of an Internet giant with a media, entertainment and cable conglomerate. Because it will form a broadband Internet powerhouse spanning the three market tiers of content, consumer interface, and broadband conduit, it may also shape the very contours of the market for high speed internet. In reviewing the merger, I have been concerned that without relief, the transaction would have threatened the significant open market environment that high technology and Internet companies, innovators, and consumers enjoy. I voted to accept the settlement, however, because the consent will not only provide a means to address these concerns, but will also sent an important message to the market that high speed internet should continue to provide consumers with choice of service and diversity of content.
It is important to note that our remedy does give me pause for several reasons. First, the remedy—as some might observe—appears to be an unusually regulatory solution for a merger order. I generally prefer the divestiture of an ongoing business—
Second, I am concerned that the Commission's open access relief might not preclude the possibility of harm from the merged entity's control of AOL and Time Warner content along with the Time Warner cable systems. The settlement nonetheless marks an important first step for future open competition on cable for Internet service providers and content providers. The relief provides that the Commission will supervise AOL Time Warner's conduct for five years; but it tells the market to continue to demand openness and competition in this important area. I note that the negotiated relief was improved from the companies' earliest proposals.
That being said, I also hope that the public does not over-interpret today's decision; despite the fact that this merger has been allowed to proceed without challenge, I expect that the Commission will scrutinize future Internet mergers as it does any merger—on a case-by-case basis. Moreover, the Commission will continue to exercise its antitrust responsibilities by taking appropriate action against anti-competitive behavior. Finally, though many interested parties will, no doubt, scrutinize the terms of the order ISP access agreements, these should not necessarily be seen as a template for future Internet access, but should instead be regarded as examples of how the public should share the benefits provided by the principles of Internet openness and diversity.
For those reasons, I concur with accepting the proposed consent orders.
The Department of Health and Human Services, Office of the Secretary will periodically publish summaries of proposed information collection projects and solicit public comments in compliance with the requirements of Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995. To request more information on the project or to obtain a copy of the information collection plans and instruments, call the OS Reports Clearance Officer on (202) 690-6207.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Proposed Projects 1. Federal Government-wide Automated Assurance and Institutional Review Board Registration System—NEW—The Office of Human Research Protection is proposing a Government-wide standardized, automated process for filing the assurance pertaining to the protection of human subjects in research, and for registering Institutional Review Boards (IRBs). Respondents: Research Institutions; Burden Information for the Assurance—Annual Number of Respondents: 1,334; Average Burden per Response: 2 hours; Total Annual Burden for Assurance: 2,668—Burden Information for IRB Registration—Annual Number of Respondents: 667; Average Burden per Response: 1 hour; Total Annual Burden for IRB Registration: 667 hours—Total Burden: 3335 hours.
Send comments to Cynthia Agens Bauer, OS Reports Clearance Officer, Room 503H, Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201. Written comments should be received within 60 days of this notice.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA), Center for Veterinary Medicine (CVM), announces that funds may be available to support an unsolicited grant application submitted by the Fundación Mexicana para la Salud, Int. Hospital O'Horan, Merida, Yucatan, Mexico. The applicant has requested funds to study the epidemiology of
The specific objectives of the proposed project are to: (1) Develop effective surveillance of antimicrobial resistance in foodborne pathogens in human, food, and veterinary laboratories at the four participating sites; (2) standardize the methods for isolation, identification, and antimicrobial susceptibility testing of foodborne pathogens at these four sites; (3) determine the prevalence of
Assistance will only be provided to the Fundación Mexicana para la Salud because of the following:
1. The Fundación Mexicana para la Salud is the only organization that submitted an unsolicited application for the purpose stated above.
2. The project proposed by the applicant specifically addresses the National Antimicrobial Resistance Monitoring System objectives in general and international objectives for the establishment of an international data base.
3. The knowledge of sources of exposure to drug resistant pathogens in Mexico would provide information that could be made available to travelers and would also assist in making assessments of the levels of fluoroquinolone resistance in domestic cases of illness acquired from animal food products imported from Mexico and Guatemala.
4. An international data base can provide information to the international community on the level of antimicrobial drug resistance in foodborne pathogens, providing a means for assessing public health concerns.
5. The proposal would benefit CVM and the international community in the establishment of an international data base for antimicrobial susceptibility and enhance food safety activities globally.
We anticipate that approximately $371,144, which is the requested level of funding, or some lesser amount will be made available in fiscal year (FY) 2001 to fund this project. It is expected that the award will begin sometime in FY 2001 and will be made for a 12-month budget period within a project period of up to 3 years. Funding estimates may change. Continuation awards within an approved project period will be made on the basis of satisfactory progress as evidenced by required reports and the availability of funds.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of a draft guidance document entitled “Guidance for Industry: Variances for Blood Collection from Individuals with Hereditary Hemochromatosis” dated December 2000. The draft guidance document provides recommendations to blood establishments that wish to distribute blood and blood components collected from individuals with diagnosed hereditary hemochromatosis without indicating the donor's disease on the container label, or collect blood more frequently than every 8 weeks without a physical examination and certification of the donor's health by a physician on the day of donation. This draft guidance document identifies the conditions under which FDA will consider approving the above as alternative procedures, or variances, to the current regulations, and provides guidance on what to submit when requesting these variances. These recommendations apply to all blood establishments, whether or not they hold a U.S. License for the manufacture of blood and blood components.
Submit written comments on the draft guidance to ensure their adequate consideration in preparation of the final document by March 20, 2001.
Submit written requests for single copies of “Guidance for Industry: Variances for Blood Collection from Individuals with Hereditary Hemochromatosis” dated December 2000, to the Office of Communication, Training, and Manufacturers Assistance (HFM 40), Center for Biological Evaluation and Research (CBER), Food and Drug Administration, 1401 Rockville Pike, Rockville, MD 20852 1448. Send one self-addressed adhesive label to assist the office in processing your requests. The document may also be obtained by mail by calling the CBER Voice Information System at 1 800 835 4709 or 301 827 1800, or by fax by calling the FAX Information system at 1 888 CBER FAX or 301 827 3844. See the
Submit written comments on the document to the Dockets Management Branch (HFA 305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
Paula S. McKeever, Center for Biologics Evaluation and Research (HFM 17), Food and Drug Administration, 1401 Rockville Pike, Rockville, MD 20852 1448, 301 827 6210.
FDA is announcing the availability of a draft guidance document entitled “Guidance for Industry: Variances for Blood Collection from Individuals with Hereditary Hemochromatosis” dated December 2000. This document identifies the conditions under which FDA will consider approving the above as alternative procedures, or variances, to the current regulations, under the provisions of 21 CFR 640.120 and provides guidance on what to submit when requesting these variances.
On April 29, 1999, the Public Health Service Advisory Committee on Blood Safety and Availability (ACBSA) recommended that the Department of Health and Human Services (DHHS) “create policies that eliminate incentives to seek [blood] donation for purposes of phlebotomy” from patients with diagnosed hemochromatosis who require phlebotomy as therapy for their disease. Further, as undue incentives to donate blood for transfusion (rather than being therapeutically phlebotomized) are removed, DHHS “should create policies that eliminate barriers to using this resource” to augment the country's blood supply (Ref. 1).
On August 10, 1999, the Commissioner of Food and Drugs made a commitment to consider case-by-case exemptions to existing blood labeling and donor suitability regulations for blood establishments that can verify that therapeutic phlebotomy for hemochromatosis is performed at no expense to the patient (Ref. 2). FDA additionally committed itself to work with the Health Care Financing Administration in ensuring that the financial incentives for persons with hereditary hemochromatosis (HH) to donate blood for transfusion are removed. This issue was further discussed at the FDA Blood Products Advisory Committee meeting on September 16, 1999 (Ref. 3). The statutory authority and scope of jurisdiction of HCFA limits its ability to reduce or eliminate costs of treatment for HH patients, many of whom are covered by private insurers, or do not have health insurance. Thus, for the foreseeable future, if blood centers wish to distribute blood collected from donors with HH without disease labeling, they will have the responsibility of removing financial incentives for these donors. Each blood center will have to evaluate the advantages of entering these donors into their donor pool.
The draft guidance document is being issued consistent with the final rule on good guidance practices (21 CFR 10.15; 65 FR 56468, September 19, 2000). The draft guidance document represents the agency's current thinking on blood collection from individuals with hereditary hemochromatosis. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statute, regulations, or both. As with other guidance documents, FDA does not intend this document to be all-inclusive and cautions that not all information may be applicable to all situations. The document is intended to provide information and does not set forth requirements.
The following have been placed on display in the Dockets Management Branch and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday.
1. Nightingale, S. D., Summary of Advisory Committee Meeting of April 29 and 30, 1999. May 13, 1999. http://www.hhs.gov/partner/bloodsafety/04 99sum.html
2. Henney, J. E., Memorandum Blood Donations by Individuals with Hemo chromatosis, August 10, 1999. http://www.hhs.gov/partner/bloodsafety/JEH8 10jpg
3. Blood Products Advisory Committee, 64th Meeting, September 16, 1999. http://www.fda.gov/ohrms/dockets/ac/cber99.htm-Blood Products Advisory Committee
The draft guidance document is being distributed for comment purposes only and is not intended for implementation at this time. Interested persons may submit to the Dockets Management Branch (address above) written comments regarding this draft guidance
Persons with access to the Internet may obtain the document at http://www.fda.gov/cber/guidelines.htm.
Health Care Financing Administration, DHHS.
In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Health Care Financing Administration (HCFA), Department of Health and Human Services, is publishing the following summary of proposed collections for public comment. Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
To obtain copies of the supporting statement and any related forms for the proposed paperwork collections referenced above, access HCFA's Web Site address at http://www.hcfa.gov/regs/prdact95.htm, or E-mail your request, including your address, phone number, OMB number, and HCFA document identifier, to Paperwork@hcfa.gov, or call the Reports Clearance Office on (410) 786-1326. Written comments and recommendations for the proposed information collections must be mailed within 60 days of this notice directly to the HCFA Paperwork Clearance Officer designated at the following address: HCFA, Office of Information Services, Security and Standards Group, Division of HCFA Enterprise Standards, Attention: Julie Brown, Room N2-14-26, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.
Health Care Financing Administration, DHHS.
In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Health Care Financing Administration (HCFA), Department of Health and Human Services, is publishing the following summary of proposed collections for public comment. Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
To obtain copies of the supporting statement and any related forms for the proposed paperwork collections referenced above, access HCFA's Web Site address at http://www.hcfa.gov/regs/prdact95.htm, or E-mail your request, including your address, phone number, OMB number, and HCFA document identifier, to Paperwork@hcfa.gov, or call the Reports Clearance Office on (410) 786-1326. Written comments and recommendations for the proposed information collections must be mailed within 60 days of this notice directly to the HCFA Paperwork Clearance Officer designated at the following address: HCFA, Office of Information Services, Security and Standards Group, Division of HCFA Enterprise Standards, Attention: Julie Brown, Room N2-14-26, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.
Health Care Financing Administration, DHHS.
In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Health Care Financing Administration (HCFA), Department of Health and Human Services, is publishing the following summary of proposed collections for public comment. Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
To obtain copies of the supporting statement and any related forms for the proposed paperwork collections referenced above, access HCFA's Web Site address at http://www.hcfa.gov/regs/prdact95.htm, or E-mail your request, including your address, phone number, OMB number, and HCFA document identifier, to Paperwork@hcfa.gov, or call the Reports Clearance Office on (410) 786-1326. Written comments and recommendations for the proposed information collections must be mailed within 30 days of this notice directly to the OMB desk officer: OMB Human Resources and Housing Branch, Attention: Wendy Taylor, New Executive Office Building, Room 10235, Washington, DC 20503.
Health Care Financing Administration, DHHS.
In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Health Care Financing Administration (HCFA), Department of Health and Human Services, is publishing the following summary of proposed collections for public comment. Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
We are, however, requesting an emergency review of the information collections referenced below. In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, we have submitted to the Office of Management and Budget (OMB) the following requirements for emergency review. We are requesting an emergency review because the collection of this information is needed before the expiration of the normal time limits under OMB's regulations at 5 CFR Part 1320. This is necessary to ensure that Medicare beneficiaries are able to continue to receive care in the event that their managed care provider leaves the Medicare program. We cannot reasonably comply with the normal clearance procedures because of public harm due to an unanticipated event. An unexpectedly significant number of managed care plans withdrew from Medicare or reduced their service areas at the end of 1998 and 1999 and more will withdraw at the end of 2000. We are concerned about the impact of the withdrawals on beneficiaries, particularly those living in areas with no remaining managed care options. We are also concerned about beneficiary confusion related to the withdrawals and beneficiary understanding of the options for replacing managed care coverage. As a result we need to conduct a survey that will give us the information we need to assist the beneficiaries.
HCFA is requesting OMB review and approval of this collection by January 15, 2001 with a 180-day approval period. Written comments and recommendations will be accepted from the public if received by the individuals designated below by January 8, 2001. During this 180-day period, we will publish a separate
We have submitted a copy of this notice to OMB for its review of these information collections. A notice will be published in the
To obtain copies of the supporting statement and any related forms for the proposed paperwork collections referenced above, access HCFA's Web Site address at http://www.hcfa.gov/regs/prdact95.htm, or E-mail your request, including your address, phone number, OMB number, and HCFA document identifier, to Paperwork@hcfa.gov, or call the Reports Clearance Office on (410) 786-1326.
Interested persons are invited to send comments regarding the burden or any other aspect of these collections of information requirements.
However, as noted above, comments on these information collection and recordkeeping requirements must be mailed and/or faxed to the designees referenced below, by January 8, 2001:
and,
National Institutes of Health, Public Health Service, DHHS.
Notice.
The inventions listed below are owned by agencies of the U.S. Government and are available for licensing in the U.S. in accordance with 35 U.S.C. 207 to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.
Licensing information and copies of the U.S. patent applications listed below may be obtained by contacting Vasant Gandhi, J.D., Ph.D., at the Office of Technology Transfer, National Institutes of Health, 6011 Executive Boulevard, Suite 325, Rockville, Maryland 20852-3804; telephone: 301/496-7056 ext. 224; fax: 301/402-0220; e-mail: gandhiv@od.nih.gov. A signed Confidential Disclosure Agreement will be required to receive copies of the patent applications.
The inventors have developed a transgenic mouse which expresses the human erythropoietin receptor. Erythropoietin is a cytokine or hormone required for the production of red blood cells and acts by binding on early, undifferentiated blood progenitor cells to stimulate red blood cell formation. The model is particularly useful as human infectious agents or gene therapy vectors that selectively target human cells expressing the erythropoietin receptor can be studied.
Background scientific detail may be found in Liu, C., Liu, Z.Y., Shen, K. and Noguchi, C. T. (1997), “Regulated human erythropoietin receptor expression in mouse brain”, J. Biol. Chem. 272:32395-32400.
Tumor antigens are known to be poorly immunogenic and attempts to elicit immune responses against the epitopes of antigens specific to tumor cells have been largely unsuccessful. The inventors have developed a cancer vaccine comprising a defensin fused to a tumor antigen or viral antigen to enhance the immunogenicity of the tumor antigen or viral antigen. The inventors have demonstrated, with animal data, that chimeric proteins, comprising a defensin fused to a model tumor antigen (lymphoma-derived single-chain Fv), when administered to a subject, generate a measurable humoral and anti-tumor cellular immune response.
Tumor antigens are known to be poorly immunogenic and attempts to elicit immune responses against the epitopes of antigens specific to tumor cells have been largely unsuccessful. The inventors have developed a cancer vaccine comprising a tumor antigen fused with a human chemokine or viral antigen to enhance the immunogenicity of the tumor antigen or viral antigen. The inventors have demonstrated, with animal data, that chimeric proteins, comprising a viral chemokine fused to a model tumor antigen (lymphoma-derived single-chain Fv), when administered to a subject, generate a measurable humoral and anti-tumor cellular immune response.
BRCA1 plays an important role in the cellular response to DNA damage. The technology relates to the development of BRCA1 serine 988 mutants and a method to modulate BRCA1 activity. For example, one mutant interferes with normal BRCA1 function and may thereby increase sensitivity of tumor cells to chemotherapeutic agents. Another mutant shows constitutive activity in the absence of cell cycle checkpoint enzyme hCds1 activation and may thereby increase the resistance of normal tissue to genotoxic agents such as ionizing radiation.
This invention relates to the field of herpesviruses, more specifically to human herpesvirus 8 (HHV-8), also known as Kaposi's sarcoma associated herpesvirus (KSHV), and to agents that bind the viral IL-6 encoded by this virus. KSHV encodes various proteins that have features suggesting their role in promoting cellular growth and transformation, including viral homologues of cyclin D, G-protein coupled receptor, interferon regulatory factor, macrophage inflammatory proteins and IL-6. All these viral proteins display structural similarities to their cellular counterparts. The inventors have developed a specific binding agent for KSHV interleukin-6 (vIL-6), which neutralizes vIL-6 activity.
This technology relates to novel retroviral vectors for the introduction of heterologous nucleic acid into a host cell. Integration of these vectors into the nucleic acid of a host cell results in reconstitution and duplication of the heterologous nucleic acid in the cellular genome. The invention describes a method to efficiently reconstitute genes during virus replication. Vectors have been developed that enable gene reconstitution, by including two halves of a gene, each half having a small region of homology. The 3′ half of the gene is inserted into the 5′ terminal repeat, before the “R” region, and the 5′ half of the gene is inserted into the 3′ terminal repeat, between the “U3” region and the “R” region. Upon transfer into a cell and viral integration into the genome, two complete copies of the gene are reconstituted (gene duplication), one in the 5′ long terminal repeat (LTR) and one in the 3′ LTR. The virus can be used to transfer two copies of genes, such as toxic genes, into a desired cell population, or can be used to detect the presence of competent retroviruses (as a detection system). This technique can be utilized for delivery of toxic genes for cancer gene therapy or for high-sensitivity detection of replication-competent retroviruses during propagation of viral stocks.
This technology relates to the creation of a mouse cell line that harbor homozygous deletions of the Gadd45 gene. Gadd45 was the first gene discovered to be controlled by another gene, p53, the most highly mutated gene in human cancer. Cells lacking Gadd45 are less able to deal with DNA damage and are prone to alternations in genomic integrity. Both of these attributes are critical for the prevention of cancer. Gadd45 null mice have a high frequency of parturition failure.
The mice can be used to investigate the effect that the aforementioned attributes have a cell growth and integrity and carcinogenesis. As the Gadd45a-null nice show defects in cell cycle control and DNA repair, they will be useful in toxicology and drug screening. For pharmaceutical studies using chemical libraries, these mice and their derived cells may be useful in identifying inhibitors of specific molecular pathways. Also, the mice will be a useful model for studying delivery failure and cervical dilation.
This technology relates to the usage of two yeast strains in the identification of specific inhibitors of polo kinases. Polo kinases are characterized by the presence of a distinct region of homology in the non-catalytic C-terminal domain termed the “polo-box”. The polo subfamily of protein kinases appears to play a critical role in cell proliferation and cell division. The polo-box domain of mammalian polo kinase, Plk, and the budding yeast functional homolog, Cdc5, are essential for their subcellular localization and functions. The two yeast mutants can be used to screen for inhibitors of polo-box function.
This technology related to the creation of several transgenic mouse lines that will produce conditional overexpression of foreign genes in the mouse epidermis. Foreign genes are frequently expressed in mice to create models of human disease by using a promoter or regulatory region that is tissue specific. In previous models expression of the target gene is always on. In these new models expression is conditional such that timing and level of expression can be completely controlled by the investigator. The inventor has taken advantage of the bigenic tetracycline regulatory system first described by Grossen and Bujard to create the present transgenic mouse lines. The system utilizes two transgenic lines that are then bred together to create a double transgenic mouse. One transgenic line expresses the tetracycline regulated transcriptional transactivator tTA or rTA linked to keratin 5 (K5) promoter. These transgenic lines have been designated K5/tTA and K5/rTA. The K5 promoter is expressed in the epidermis hair follicles and several other squamous epithelia such as tongue trachea and forestomach. The second transgenic line carries the target gene linked to the tetO binding sites for the tTA or rTA proteins. In double transgenic mice, the tTA binds to the tetO sequence and causes high levels of expression of the target gene. However, the ability of the tTA to bind to DNA is prevented by the antibiotic tetracycline. If animals are maintained on tetracycline in the drinking water or fed, the expression of the target gene is suppressed; upon removal of the antibiotic, gene expression is induced. In contrast tetracyclines are required to induce expression of the target by the rTA. The ability of this bigenic system to suppress expression of the target gene is crucial for a functional analysis of genes which produce an embryonic or neonatal lethal phenotype when expressed at high levels during gestation. In addition, different levels of gene expression can be achieved through titration of the tetracycline dose. Studies in the inventor's laboratory has confirmed that the K5/tTA and rTA can transactivate expression of target genes in the epidermis at high levels, uniformly throughout the tissue, and that transactivation is tightly controlled by tetracycline analogues. The mouse epidermis is a useful system for modeling for human fibrotic and blistering skin diseases, dissecting the critical factors in would healing and multistage carcinogenesis in lining epithelia. This conditional expression system should greatly enhance the ability to assess function of specific target genes in these processes, and to create useful
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The contract proposals and the discussions could disclose confidential trade secrets or commercial
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meetings.
The meetings will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meeting.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of a meeting of the National Advisory Board on Medical Rehabilitation Research.
The meeting will be open to the public, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6). Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of a meeting of the Center for Scientific Review Advisory Committee.
The meeting will be open to the public, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of a meeting of the Board of Governors of the Warren Grant Mangnuson Clinical Center.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other
The meeting will be closed to the public in accordance with the provisions set forth in section 552b(c)(6), Title 5 U.S.C., as amended for discussion of personnel qualifications and performance, the disclosure of which, would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, Public Health Service, DHHS.
Notice.
This is notice in accordance with 35 U.S.C. 209(c)(1) and 37 CFR 404.7(a)(1)(i) that the National Institutes of Health (NIH), Department of Health and Human Services (DHHS), is contemplating the grant of an exclusive license worldwide to practice the inventions embodies in patents under
Only written comments and/or license applications which are received by the NIH Office of Technology Transfer on or before February 20, 2001 will be considered.
Requests for a copy of these patent applications, inquiries, comments, and other materials relating to the contemplated license should be directed to: Sally Hu, Technology Licensing Specialist, Office of Technology Transfer, National Institutes of Health, 6011 Executive Boulevard, Suite 325, Rockville, Maryland 20852-3804; Telephone: (301) 496-7056, ext. 265; Facsimile: (301) 402-0220. A signed Confidential Disclosure Agreement (CDA) may be required to receive copies of the patent application.
The patents and patent applications to be licensed are:
The subject inventors have identified a method of treating viral infections comprising the 12-deoxyphorbol ester derivative known as prostratin. The patent specifically discusses an anti-viral composition and methods of treating patients with viral infections using such composition. The anti-viral composition of the present invention comprises prostratin and a pharmaceutically acceptable carrier. While purportedly having anti-viral activity, this composition reportedly does not have substantial tumor promoting activity and does not have other substantial toxicological properties that would preclude its use in treating viral infections.
The prospective exclusive license will be royalty-bearing and will comply with the terms and conditions of 35 U.S.C. 209 and 37 CFR 404.7. The prospective exclusive license may be granted unless, within 60 days from the date of this published Notice, NIH receives written evidence and argument that establishes that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR 404.7.
The field of use may be limited to a method of treating retroviral infections (
Properly filed competing applications for a license filed in response to this notice will be treated as objections to the contemplated license. Since prostratin was originally isolated from flora primarily located in Western Samoa, the NIH is concerned that the collection and utilization of the natural material comport with all applicable Federal and Western Samoan policies related to biodiversity. In order to comport with such policies, the successful applicant will also be required to negotiate and enter into agreements with the appropriate Western Samoan Government agencies. Comments and objections submitted in response to this notice will not be made available for public inspection, and, to the extent permitted by law, will not be released under the Freedom of Information Act (FOIA), 5 U.S.C. 552.
Office of Public and Indian Housing, HUD.
Announcement of funding awards.
In accordance with section 102(a)(4)(C) of the Department of Housing and Urban Development Reform Act of 1989, this announcement notifies the public of funding decisions made by the Department for funding under the FY 1999 Notice of Funding Availability (NOFA) for the Resident Opportunity and Self Sufficiency Programs for Fiscal Year 1999. This announcement contains the consolidated names and addresses of those award recipients selected for funding based on the rating and ranking of all applications within each State and the allocation of vouchers and funding available for each State.
for questions concerning the FY 1999 Resident Opportunities and Self
The purpose the program is to link services to public housing residents by providing grants for supportive service, resident empowerment activities, and activities assist residents in becoming economically self-sufficient.
The ROSS program assistance made available in this notice is authorized by the Departments of Veterans Affairs and Housing and Urban Development, Independent Agencies Appropriation Act of 1999 (Pub. L. 105-276, 112 Stat. 2461, approved October 21, 1998), and the Departments of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1998 (Pub. L. 105-65, 111 Stat. 1344, approved October 27, 1997), (FY Appropriations Act).
The Fiscal Year 1999 awards announced in this Notice were selected for funding in a competition announced in a
The Catalog of Federal Domestic Assistance number for this program is 14.870.
The amount announced in the Notice of Funding Availability for ROSS was $66,600,000. The ROSS allocations to Public Housing Authorities based on requirements announced in the NOFA added up to $40,630,049. In accordance with section 102(a)(4)(C) of the Department of Housing and Urban Development Reform Act of 1989 (103 Stat. 1987, 42 U.S.C. 3545), the Department is publishing the names, addresses, and amounts of 393 awards made under the ROSS programs competitions in Appendix A.
Office of the Assistant Secretary for Public and Indian Housing, HUD.
Announcement of funding awards.
In accordance with section 102(a)(4)(c) of the Department of Housing and Urban Development Reform Act of 1989, this announcement notifies the public of funding awards for Fiscal Year (FY) 1999 to housing agencies and non-profit agencies under the housing choice voucher programs. The purpose of this Notice is to publish the names and addresses of the award winners and the amount of the awards made available by HUD to provide rental assistance to very low income families.
Michael Diggs, Director, Grants Management Center, Office of Public and Indian Housing, Department of Housing and Urban Development, 501 Schools Street, SW., Suite 800, Washington, DC 20024, telephone 202/358-0273. For the hearing or speech impaired, these numbers may be accessed via TTY (text telephone) by calling the Federal Information Relay Service at 1-800-877-8339. (Other than the “800” TTY number, these telephone numbers are not toll-free).
The regulations governing the housing choice voucher programs are published at 24 CFR part 982. The regulations for allocating housing assistance budget authority under section 213(d) of the Housing and Community Development Act of 1974 are published at 24 CFR part 791, subpart D.
The purpose of the housing choice voucher programs is to assist eligible families to pay the rent for decent, safe, and sanitary housing, or to purchase a modest home. The FY 1999 awards announced in this notice were selected for funding consistent with the provisions in the Notices of Funding Availability (NOFAs) published in the
The March 5, 1999 (64 FR 10904) NOFA made available housing choice vouchers from the Family Unification Program to assist families for who the lack of adequate housing is a primary factor in the separation, or imminent separation of children from their families. The March 8, 1999 NOFAs made available housing choice vouchers for: (a) Persons with disabilities in support of designated housing allocation plans (64 FR 11294); (b) non-elderly disabled families in connection with certain Section 8 project based developments where the owner has established a preference for admission of elderly households (64 FR 11310); and (c) persons with disabilities under the Mainstream housing Program (64 FR 11302).
The March 8, 1999 (64 FR 11278) and July 27, 1999 (64 FR 40686) NOFA's made available Family Self-Sufficiency (FSS) Coordinator funds to hire FSS program coordinators.
A total of $151,644,990 in budget authority for 17,960 housing choice vouchers was awarded to recipients. A total of $28,499,099 in budget was awarded to hire FSS program coordinators, $75,318 was used to fund FY 1998 eligible recipients that were not funded.
The Catalog of Federal Domestic Assistance numbers for this program are 14.855 and 14.857.
In accordance with section 102(a)(4)(c) of the Department of Housing and Urban Development Reform Act of 1989 (103 Stat. 11987, 42 U.S.C. 3545), the Department is publishing the names, addresses, and amounts of those awards as show in Appendix A.
Office of the Assistant Secretary for Community Planning and Development, HUD.
Super notice of funding availability (SuperNOFA) for HUD grant programs; notice of amendment and clarification to the continuum of care program.
On February 24, 2000, HUD published its Fiscal Year 2000 Super Notice of Funding Availability (SuperNOFA) for Housing, Community Development and Empowerment Programs, and Section 8 Housing Voucher Assistance. This document makes one clarification and two amendments to the Continuum of Care program requirements in the FY 2000 SuperNOFA. First, this document clarifies that funding for Shelter Plus Care renewal projects will be made from the separate McKinney Act appropriation established by the Congress for this purpose under the FY 2001 HUD Appropriations Act. This document also makes two amendments to the Continuum of Care program to reflect the establishment of this separate appropriation in HUD's implementation of the 30 percent permanent housing funding requirement under the FY 2000 HUD Appropriations Act.
Clifford Taffet, Office of Special Needs Assistance, Office of Community Planning and Development, U.S. Department of Housing and Urban Development, 451 Seventh Street, SW., Room 7266, Washington, DC 20410; telephone (202) 708-1234 (this is not a toll-free telephone number). Hearing and speech-impaired individuals may access this number via TTY by calling the toll-free Federal Information Relay Service at 1-800-877-8339.
On February 24, 2000 (65 FR 9322) published its Fiscal Year 2000 Super Notice of Funding Availability (SuperNOFA) for Housing, Community Development and Empowerment Programs, and Section 8 Housing Voucher Assistance. This document makes one clarification and two amendments to the Continuum of Care program requirements contained in the FY 2000 SuperNOFA (beginning at 65 FR 9850). The clarification and changes made by this document are as follows:
The Continuum of Care program section of the FY 2000 SuperNOFA, reserved for HUD the right to skip over eligible Shelter Plus Care renewal projects submitted in the competition and to fund them from sources “other than the McKinney Act” should the Congress pass legislation allowing this (see 65 FR 9851, third column). At the time of publication of the FY 2000 SuperNOFA, HUD believed that, were Congress to act, the source of funds for these renewals would be the Section 8 Housing Certificate Fund. However, the FY 2001 HUD Appropriations Act (Public Law 106-377, approved October 27, 2000) establishes a separate appropriation under the McKinney Act for this purpose. Therefore, HUD is publishing this document to inform interested parties that these non-competitive awards will be funded from this separate special appropriation under the McKinney Act.
The FY 2000 HUD Appropriations Act (Public Law 106-24, approved October 20, 1999) requires that “not less than 30 percent of these funds shall be used for permanent housing” (which the FY 2000 Continuum of Care NOFA defines to include Shelter Plus Care renewal projects). The action taken by Congress to fund Shelter Plus Care renewal projects, a significant component of permanent housing funding in previous years, from a source other than the FY 2000 Homeless Assistance Grants appropriation, prevents these projects from counting toward the 30 percent permanent housing requirement contained in the FY 2000 HUD Appropriations Act. As a consequence, HUD will find it necessary, as contemplated in the FY 2000 Continuum of Care program section of the SuperNOFA, to skip over higher scoring non-permanent housing projects in order to reach the 30 percent requirement. However, in order to reduce the impact on existing homeless programs in implementing this statutory requirement, and in keeping with expressed Congressional intent to maintain existing programs and infrastructure for homeless assistance, HUD is amending the FY 2000 Continuum of Care NOFA as follows:
Section III(A)(2) of the FY 2000 Continuum of Care NOFA reserved for HUD the authority to use FY 2001 funds, if available, to conditionally select for one year of funding lower-rated eligible Supportive Housing Program (SHP) renewal projects that were assigned 40 need points if two criteria were met. The first criterion was that these projects had to be part of Continuum of Care systems “that would not otherwise receive funding.” Since the recent Congressional action will result in at least one permanent housing project being funded in many Continua of Care which scored below the projected funding line, these Continua of Care would be made ineligible for renewal funding under this authority. In order to avoid this unintended consequence of the congressional action, the criterion is being amended to read “that would not otherwise receive funding for these projects” so that it would apply specifically to these lower rated eligible SHP renewal projects that were assigned 40 need points, thus allowing these renewal projects to be funded under this authority.
Section V(A)(7) of the FY 2000 Continuum of Care NOFA described the 30 percent permanent housing funding requirement established by Congress for the Continuum of Care competition. This section is being amended to permit HUD to first skip over new non-permanent housing projects when making project selections in order to meet the 30 percent requirement. If the 30 percent requirement has not been met after skipping over the new non-permanent housing projects, then HUD will skip over non-permanent housing renewal projects. In skipping over new non-permanent housing projects, HUD will begin with the lowest rated (eligible) fundable new non-permanent project at the projected funding line and continue up the rating and ranking until the 30 percent requirement is met. If HUD is required to skip over non-permanent housing renewal projects, HUD will proceed in the same way.
Accordingly, in the Super Notice of Funding Availability for Housing, Community Development, and Empowerment Programs and Section 8 Housing Voucher Assistance for Fiscal Year 2000, notice document 00-4123, beginning at 65 FR 9322, in the issue of Friday, February 24, 2000, the following clarifications and corrections are made to the Continuum of Care NOFA, commencing at 9851:
1. On page 9853, the last paragraph starting in the first column is amended to read as follows:
Your local needs analysis process must consider the need to continue funding for projects expiring in calendar year 2001, and you must assign a priority to those projects requesting renewal. HUD will not fund renewals out of order on the priority list except as may be necessary to achieve the new 30 percent overall permanent housing requirement. HUD reserves the authority to use FY 2001 funds, if available, to conditionally select for one year of funding lower-rated eligible SHP renewal projects that are assigned 40 need points in continuum of care systems that: (1) Would not otherwise receive funding for these projects; and (2) have not previously been awarded funds under this authority.
2. On page 9856, the last full paragraph starting in the third column is amended to read as follows:
In accordance with the appropriation for homeless assistance grants in the Fiscal Year 2000 Appropriation Act for HUD (Pub.L. 106-24, approved October 20, 1999; 113 Stat. 1047), HUD will use not less than 30 percent of the total FY 2000 homeless grant assistance appropriation to fund projects that meet the definition of permanent housing. Projects meeting the definition of permanent housing are: (1) New Shelter Plus Care projects; (2) Section 8 SRO projects; and (3) new and renewal projects designated as permanent housing for homeless persons with disabilities under the Supportive Housing Program. Since the FY 2000 homeless grant assistance appropriation is $1.020 billion, not less than $306 million must be awarded to permanent housing projects unless an insufficient number of approvable permanent housing projects is submitted in which case HUD will carry over the amount of the permanent housing funding shortfall to next year's competition. This permanent housing funding requirement may result in higher scoring non-permanent housing projects being skipped over to fund lower scoring permanent housing projects or, within a continuum, higher priority non-permanent housing projects being skipped over to fund lower priority permanent housing projects. HUD will first skip over new non-permanent housing projects when making project selections in order to meet the 30 percent requirement. If the 30 percent requirement has not been met after skipping over the new non-permanent housing projects, then HUD will skip over non-permanent housing renewal projects. In skipping over new non-permanent housing projects, HUD will begin with the lowest rated (eligible) fundable new non-permanent project at the projected funding line and continue up the rating and ranking until the 30 percent requirement is met. If HUD is required to skip over non-permanent housing renewal projects, HUD will proceed in the same way.
Office of Federal Housing Enterprise Oversight, HUD.
Extension of the period for the submission of public comments.
On October 30, 2000, the Office of Federal Housing Enterprise Oversight (OFHEO) published a notice entitled “Solicitation of Public Comments on Systemic Risk” in the
The comment period is extended until January 29, 2001.
Send written comments to Robert S. Seiler, Jr., Manager of Policy Analysis, Office of Federal Housing Enterprise Oversight, 1700 G. Street, NW., Fourth Floor, Washington, DC 20552. All comments will be posted on the OFHEO web site at
Robert S. Seiler, Jr., Manager of Policy Analysis, Office of Federal Housing Enterprise Oversight, 1700 G Street, NW., Fourth Floor, Washington, DC 20552, telephone (202) 414-3785 (not a toll free number). The telephone number for the Telecommunications Device for the Deaf is: (800) 877-8339.
Fish and Wildlife Service, Interior.
Notice of issuance of a Letter of Authorization to take marine mammals incidental to oil and gas industry activities.
In accordance with section 101(a)(5)(A) of the Marine Mammal Protection Act of 1972, as amended, and the U.S. Fish and Wildlife Service implementing regulations [50 CFR 18.72(f)(3)], notice is hereby given that a Letter of Authorization to take polar bears incidental to oil and gas industry exploration activities has been issued to the following companies.
Mr. John W. Bridges at the U.S. Fish and Wildlife Service, Marine Mammals Management Office, 1011 East Tudor Road, Anchorage, Alaska 99503, (808) 362-5148 or (907) 786-3810.
The letters of Authorization were issued in accordance with U.S. Fish and Wildlife Service Federal Rules and Regulations “Marine Mammals; Incidental Take During Specified Activities (65 FR 16828; March 30, 2000).”
Bureau of Land Management, Department of the Interior.
Notice of vacancy on Resource Advisory Council and call for nominations.
The purpose of this notice is to solicit public nominations for the Bureau of Land Management's (BLM's) Northeastern Great Basin Resource Advisory Council (RAC) and Mojave-Southern Great Basin RAC in Nevada, to fill vacancies on those RACs for an individual holding elective office in Nevada. The RAC provides advice and recommendations to BLM's Elko, Ely, Battle Mountain and Las Vegas Field Offices on land use planning and management of the public lands within their geographic areas. Public nominations will be considered for 45 days after the publication date of this notice.
The Federal Land Policy and Management Act (FLPMA) directs the Secretary of the Interior to involve the public in planning and issues related to management of lands administered by BLM. Section 309 of FLPMA directs the Secretary to select 10 to 15 member citizen-based advisory councils that are established and authorized consistent with the requirements of Federal Advisory Committee Act (FACA). As required by the FACA, the interests represented by the individuals appointed to the RAC must be balanced and representative of the various issues concerned with the management of public lands.
These include three categories, one of which is Category three, holders of State, county or local elected office, employees of a State agency responsible
The elected officials whose terms have not yet expired will no longer hold elective office after December 31, and this notice is to solicit nominations for replacements. Nominations should be sent to Jo Simpson, BLM Nevada State Office, P.O. Box 12000, Reno, Nevada, 89520-0006; telephone (775) 861-6586.
Jo Simpson, Chief, Office of Communications, Bureau of Land Management, Nevada State Office, at 775-861-6586.
In accordance with the provisions of the Federal Advisory Committee Act, the Secretary of Labor has determined that the renewal of the Migrant and Seasonal Farmworker Employment and Training Advisory Committee (the Committee) is in the public interest and is consistent with the requirements of title I, section 167 of the Workforce Investment Act (WIA).
Established under 20 CFR 669.160(b), the Committee will provide advice to the Secretary and the Assistant Secretary for Employment and Training regarding the overall operation and administration of the National Farmworkers Jobs Program (NFJP) authorized under WIA title I, section 167, as well as the implementation of other programs providing services to Migrant and Seasonal Farmworker youth and adults under this Act. The Secretary and Assistant Secretary views the Committee as the primary vehicle to accomplish the Department's commitment to work in partnership with the Migrant and Seasonal Farmworker program community on employment and training issues.
The Committee shall consist of approximately fifteen representatives as follows: twelve from the NFJP grantee community with field experience in the daily operation and administration of migrant and seasonal farmworker programs, appointed by the Secretary from among individuals nominated by NFJP grantee organizations, and three representatives from organizations, associations and other Federal agencies with expertise relative to migrant and seasonal farmworkers, to be appointed directly by the Secretary.
The Committee shall function solely as an advisory body, and in compliance with the provisions of the Federal Advisory Committee Act. Its charter will be filed under the Act fifteen days from the date of publication.
Interested persons are invited to submit comments regarding renewal of the Migrant and Seasonal Farmworker Employment and Training Advisory Committee. Such comments should be addressed to Alicia Fernandez-Mott, Chief, Division of Migrant and Seasonal Farmworker Programs, Office of National Programs, Employment and Training Administration, Room N-4641, 200 Constitution Avenue, NW., Washington, DC 20210. Telephone: (202) 219-5500.
The National Credit Union Administration Board determined that its business required the deletion of a portion of one of the personnel matters from the previously announced closed meeting (
The Board voted two-to-one, Board Member Dollar voting no, that agency business required a portion of one of the personnel matters be removed from the closed agenda. Earlier announcement of this change was not possible.
The previously announced items were:
1. Administrative Action under Part 704 of NCUA's Rules and Regulations. Closed pursuant to exemption (8).
2. Administrative Action under Part 708 of NCUA's Rules and Regulations. Closed pursuant to exemption (8).
3. Two (2) Personnel Matters. Closed pursuant to exemptions (2) and (6).
Becky Baker, Secretary of the Board, Telephone (703) 518-6304.
National Science Foundation.
Submission for OMB review; comment request.
The National Science Foundation (NSF) has submitted the following information collection requirement to OMB for review and clearance under the Paperwork Reduction Act of 1995, Pub. L. 104-13. Comments regarding (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; or (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Office of Information and Regulatory Affairs of OMB, Attention: Desk Officer for National Science Foundation, 725-17th Street, NW., Room 10235, Washington, DC, 20503, and to Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation, 4201 Wilson Boulevard, Suite 295, Arlington, Virginia 22230 or send e-mail to splimpto@nsf.gov. Comments regarding this information collection are best assured of having their full effect if received within 30 days of this notification. Copies of the submission may be obtained by calling 703-292-7556.
NSF may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to
National Science Foundation.
Notice of permit applications received under the Antarctic Conservation Act of 1978, Pub. Law 95-541.
The National Science Foundation (NSF) is required to publish notice of permit applications received to conduct activities regulated under the Antarctic Conservation Act of 1978. NSF has published regulations under the Antarctic Conservation Act at Title 45 Part 670 of the Code of Federal Regulations. This is the required notice of permit applications received.
Interested parties are invited to submit written data, comments, or views with respect to this permit application by January 18, 2001. Permit applications may be inspected by interested parties at the Permit Office, address below.
Comments should be addressed to Permit Office, Room 755, Office of Polar Programs, National Science Foundation, 4201 Wilson Boulevard, Arlington, Virginia 22230.
Nadene G. Kennedy at the above address or (703) 292-7405.
The National Science Foundation, as directed by the Antarctic Conservation Act of 1978 (Public Law 95-541), has developed regulations that implement the “Agreed Measures for the Conservation of Antarctic Fauna and Flora” for all United States citizens. The Agreed Measures, developed by the Antarctic Treaty Consultative Parties, recommended establishment of a permit system for various activities in Antarctica and designation of certain animals and certain geographic areas as requiring special protection. The regulations establish such a permit system to designate Specially Protected Areas and Sites of Special Scientific Interest.
The applications received are as follows:
The U.S. Nuclear Regulatory Commission (the Commission) is considering issuance of an amendment to Facility Operating License Nos. NPF-2 and NPF-8 issued to Southern Nuclear Operating Company, Inc, (the licensee) for operation of Farley Nuclear Plant, Units 1 and 2, located in Houston County, Alabama.
The proposed amendment would revise Technical Specification 5.5.14, “Technical Specification (TS) Bases Control Program,” to be consistent with the changes to 10 CFR 50.59 as published in the
Before issuance of the proposed license amendment, the Commission will have made findings required by the Atomic Energy Act of 1954, as amended (the Act) and the Commission's regulations.
The Commission has made a proposed determination that the amendment request involves no significant hazards consideration. Under the Commission's regulations in 10 CFR 50.92, this means that operation of the facility in accordance with the proposed
1. Does the change involve a significant increase in the probability or consequences of an accident previously evaluated?
The proposed change deletes the reference to unreviewed safety question as defined in 10 CFR 50.59. Deletion of the definition of unreviewed safety question was approved by the NRC with the revision of 10 CFR 50.59. Consequently, the probability of an accident previously evaluated is not significantly increased. Changes to the TS Bases are still evaluated in accordance with 10 CFR 50.59. As a result, the consequences of any accident previously evaluated are not significantly affected. Therefore, this change does not involve a significant increase in the probability or consequences of an accident previously evaluated.
2. Does the change create the possibility of a new or different kind of accident from any accident previously analyzed?
The proposed change does not involve a physical alteration of the plant (no new or different type of equipment will be installed) or a change in the methods governing normal plant operation. Therefore, this change does not create the possibility of a new or different kind of accident from any accident previously evaluated.
3. Does the change involve a significant reduction in a margin of safety?
The proposed change will not reduce a margin of safety because it has no direct effect on any safety analyses assumptions. Changes to the TS Bases that result in meeting the criteria in paragraph 10 CFR 50.59(c)(2) will still require NRC approval pursuant to 10 CFR 50.59. This change is administrative in nature based on the revision to 10 CFR 50.59. Therefore the proposed change does not involve a significant reduction in a margin of safety.
Based on the previous information, the proposed changes do not involve a significant hazards consideration as defined in 10 CFR 50.92.
The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration.
The Commission is seeking public comments on this proposed determination. Any comments received within 30 days after the date of publication of this notice will be considered in making any final determination.
Normally, the Commission will not issue the amendment until the expiration of the 30-day notice period. However, should circumstances change during the notice period such that failure to act in a timely way would result, for example, in derating or shutdown of the facility, the Commission may issue the license amendment before the expiration of the 30-day notice period, provided that its final determination is that the amendment involves no significant hazards consideration. The final determination will consider all public and State comments received. Should the Commission take this action, it will publish in the
Written comments may be submitted by mail to the Chief, Rules and Directives Branch, Division of Administrative Services, Office of Administration, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and should cite the publication date and page number of this
The filing of requests for hearing and petitions for leave to intervene is discussed below.
By January 19, 2001, the licensee may file a request for a hearing with respect to issuance of the amendment to the subject facility operating license and any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a written request for a hearing and a petition for leave to intervene. Requests for a hearing and a petition for leave to intervene shall be filed in accordance with the Commission's “Rules of Practice for Domestic Licensing Proceedings” in 10 CFR Part 2. Interested persons should consult a current coy of 10 CFR 2.714 which is available at the Commission's Public Document Room, located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland, and accessible electronically through the ADAMS Public Electronic Reading Room link at the NRC Web site (
As required by 10 CFR 2.714, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding. The petition should specifically explain the reasons why intervention should be permitted with particular reference to the following factors: (1) The nature of the petitioner's right under the Act to be made party to the proceeding; (2) the nature and extent of the petitioner's property, financial, or other interest in the proceeding; and (3) the possible effect of any order which may be entered in the proceeding on the petitioner's interest. The petition should also identify the specific aspect(s) of the subject matter of the proceeding as to which petitioner wishes to intervene. Any person who has filed a petition for leave to intervene or who has been admitted as a party may amend the petition without requesting leave of the Board up to 15 days prior to the first prehearing conference scheduled in the proceeding, but such an amended petition must satisfy the specificity requirement described above.
Not later than 15 days prior to the first prehearing conference scheduled in the proceeding, a petitioner shall file a supplement to the petition to intervene which must include a list of the contentions which are sought to be litigated in the matter. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the petitioner shall provide a brief explanation of the bases of the contention and a concise statement of the alleged facts or expert opinion which support the contention and on which the petitioner intends to rely in proving the contention at the hearing. The petitioner must also provide references to those specific sources and documents of which the petitioner is aware and on which the petitioner intends to rely to establish those facts or expert opinion. Petitioner must provide sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. Contentions shall be limited to matters within the scope of the amendment under consideration. The contention must be one which, if
Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing, including the opportunity to present evidence and cross-examine witnesses.
If a hearing is requested, the Commission will make a final determination on the issue of no significant hazards consideration. The final determination will serve to decide when the hearing is held.
If the final determination is that the amendment request involves no significant hazards consideration, the Commission may issue the amendment and make it immediately effective, notwithstanding the request for a hearing. Any hearing held would take place after issuance of the amendment.
If the final determination is that the amendment request involves a significant hazards consideration, any hearing held would take place before the issuance of any amendment.
A request for a hearing or a petition for leave to intervene must be filed with the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, or may be delivered to the Commission's Public Document Room, located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland, by the above date. A copy of the petition should also be sent to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and to M. Stanford Blanton, Esq., Balch and Bingham, Post Office Box 306, 1710 Sixth Avenue North, Birmingham, Alabama 35201, attorney for the licensee.
Nontimely filings of petitions for leave to intervene, amended petitions, supplemental petitions and/or requests for hearing will not be entertained absent a determination by the Commission, the presiding officer or the presiding Atomic Safety and Licensing Board that the petition and/or request should be granted based upon a balancing of the factors specified in 10 CFR 2.714(a)(1)(i)-(v) and 2.714(d).
For further details with respect to this action, see the application for amendment of October 9, 2000 as supplemented on December 4, 2000, which are available for public inspection at the Commission's Public Document Room, located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland, and accessible electronically through the ADAMS Public Electronic Reading Room link at the NRC Web site (http://www.nrc.gov).
For the Nuclear Regulatory Commission
Notice is hereby given that by petitions dated February 24, 2000, and March 13, 2000, the Snake River Alliance and Envirocare of Utah respectively, requested that the NRC assume responsibility for Formerly Utilized Sites Remedial Action Program (FUSRAP) radioactively contaminated material and ensure its proper disposal in an NRC licensed facility. As the basis for these requests, the petitioners stated that the NRC, under sections 81 and 84 of the Atomic Energy Act (AEA), was given authority by Congress to regulate all 11e.(2) material regardless of when it was generated. The request was referred to the Director of the Office of Nuclear Material Safety and Safeguards.
The Director, Office of Nuclear Material Safety and Safeguards, has determined that the requests should be denied for the reasons stated in the “Director's Decision Under 10 CFR 2.206” (DD-00-06), the complete text of which is available for public inspection in the Commission's Public Document Room, located at One White Fint North, 11555 Rockville Pike (first floor), Rockville, Maryland, and via the NRC Web site (http://www.nrc.gov) on the World Wide Web, under the “Public Involvement” icon. The NRC will continue to refrain from imposing disposal requirements for the mill tailings generated at FUSRAP sites, because the material is outside of the agency's jurisdiction.
A copy of this Decision has been filed with the Secretary of the Commission for the Commission's review in accordance with 10 CFR 2.206(c) of the Commission's regulations. As provided by that regulation, this Decision will constitute the final action of the Commission 25 days after the date of issuance unless the Commission, on its own motion, institutes review of the Decision within that time.
For the Nuclear Regulatory Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Nasdaq is proposing to amend Rule 4710(b) of the National Association of Securities Dealers, Inc. (“NASD” or “Association“), to modify the Nasdaq National Market Execution System (“NNMS”) to reduce from five seconds to two seconds the interval delay between executions against the same market maker in any security included in the Nasdaq 100 Index. Nasdaq will establish this rule change as a pilot program for six months, beginning on the date of launch of the NNMS, during which time Nasdaq will monitor and analyze system performance with respect to the interval delay. Below is the text of the proposed rule change. Proposed new language is italicized; proposed deletions are in brackets.
(a) No Change.
(b) Market Makers:
(1) An NNMS Market Maker in an NNMS Security shall be subject to the following requirements:
(A) No change.
(B) No Change.
(C) No Change.
(D)
(c) through (e). No Change.
In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections (A), (B), and (C) below, of the most significant aspects of such statements.
On January 14, 2000, the Commission approved the creation of The Nasdaq National Market Execution System (NNMS), a new platform for trading Nasdaq National Market (NNM) securities.
Nasdaq has determined that it is necessary to modify the approved interval delay parameter of the NNMS, prior to implementation of the system. Nasdaq expects that changing SelectNet from a liability to a non-liability system will cause much of the order and message traffic now in SelectNet to migrate to the automatic execution facility, the NNMS. If this occurs, the presence of a five-second interval delay could hinder the efficient and orderly operation of the system by causing a queuing of orders. Following Commission approval to the NNMS, Nasdaq market participants have expressed to Nasdaq their concern that such quering will occur in the NNMS in securities with rapid order flow unless the interval delay parameter is reduced from the current five seconds. Accordingly, Nasdaq proposes to reduce from five seconds to two seconds the delay between executions against the same market participant in the same security for any security included in the Nasdaq 100 Index, which are generally the securities with the heaviest order flow.
As noted in the original rule proposal, SR-NASD-99-11, the interval delay is designed to balance both the need for fast executions and also the necessity of giving market makers adequate time to monitor and update their quotes in response to rapidly changing market conditions. Nasdaq now strongly believes that, with respect to securities included in the Nasdaq 100 Index, the need for fast executions in rapidly moving securities is greater than originally anticipated. Nasdaq shares the concerns of its members that the risk of a queuing of orders in these securities is significantly higher than in other, slower-moving issues. At the same time, the cost of such queuing is also higher in fast-moving markets, as it would delay orders from many market participants for the benefit of a single market participant. Reducing the interval delay from five seconds to two seconds would also protect investors by decreasing the likelihood that the market will move against them after an order is placed.
In addition, Nasdaq believes that two seconds is an adequate time period for market makers in Nasdaq 100 Index securities to monitor and update their quotes. A large number of market makers compete for order executions in these securities, and market makers in these securities have become accustomed to fast-moving markets, and to monitoring and updating their quotations under such conditions. In addition to the interval delay parameter, market makers have several other tools for managing their quotes, including the Actual Size Rule and the system's Auto-Quote Refresh functionality. Considering all these factors, Nasdaq believes that this reduction in the interval delay is reasonable and appropriate to maintaining orderly markets in rapidly moving securities such as those in the Nasdaq 100 Index.
Based on the above, Nasdaq believes that the proposed rule changes are consistent with the provisions of Section 15A(b)(6) of the Act in that the proposed rule changes are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in the regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in
Nasdaq believes that the proposal also is consistent with Section 11A(a)(1)(C), which provides that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure: (1) Economically efficient execution of securities transactions; (2) fair competition among brokers and dealers; (3) the availability to brokers, dealers and investors of information with respect to quotations and transactions in securities; (4) the practicability of brokers executing investors orders in the best market; and (5) an opportunity for investors orders to be executed without the participation of a dealer. Specifically, Nasdaq believes that this proposal will improve the mechanism for the efficient display and automatic execution of customer limit orders. Thus, the proposed rule change is consistent with Section 11A and the SEC's Order Handling Rules, and in particular the Display Rule.
Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
Written comments were neither solicited nor received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the NASD. All submissions should refer to the file number in the caption above and should be submitted by January 10, 2001.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
The Advisory Committee on Private International Law will hold a study group meeting on Friday January 5, 2001 on law applicable to securities intermediaries, and in particular the law applicable to dispositions of securities held through an indirect holding system. The meeting will be held at the Federal Reserve Bank of New York.
The meeting will provide an opportunity for public comment on developments in the securities transaction field, including clearance and settlement and the role of indirect holding systems, with regard to possible international rules to determine law applicable to those transactions. The meeting will facilitate preparation of United States positions in connection with the work of international organizations affecting private law aspects of this topic, including the Hague Conference on Private International Law project to prepare rules on law applicable to intermediaries. A secondary topic will be the feasibility of harmonized substantive rules for consideration by other international bodies, such as the United Nations Commission on International Trade Law (UNCITRAL), or by regional groups of states.
The agenda, subject to availability of time, will include a review of developments involving direct and indirect holders of securities, transfers of interest, dematerialization and immobilization of securities, and the systemic role of multiple indirect holding systems. The meeting will also examine whether harmonization through national law, industry or commercial sector rules, or by international treaty is feasible and is necessary. Among other issues, an applicable law regime might address what law governs transfers of securities held through custodial accounts and financial intermediaries; the rights to securities in custodial accounts; the rights of owners of securities as well as entities secured thereby; the relation to third party creditors; and the legal nature of interests in securities held by such intermediaries or through central clearing systems.
Documentation for the meeting will includes a recent study by the Permanent Bureau of the Hague Conference concerning “law applicable to dispositions of securities held through indirect holding systems. The document may be obtained at www.hcch.net, or from the Office of the Assistant Legal Adviser for Private International Law by contacting Rosie Gonzales at 202 776-8420 or by fax 202-776-8482.
Tennessee Valley Authority (TVA).
Notice of intent.
This notice is provided in accordance with the Council on Environmental Quality's regulations (40 CFR parts 1500 to 1508) and TVA's procedures implementing the National Environmental Policy Act. TVA will prepare an Environmental Impact Statement (EIS) on alternatives for management of Guntersville Reservoir project lands in Jackson and Marshall Counties in Alabama and Marion County in Tennessee.
Comments on the scope of the EIS should be received on, or before January 31, 2001.
Written comments should be sent to Jon M. Loney, Manager, NEPA Administration, Environmental Policy and Planning, Tennessee Valley Authority, 400 West Summit Hill Drive, Knoxville, Tennessee 37902-1499.
Harold M. Draper, NEPA Specialist, Environmental Policy and Planning, Tennessee Valley Authority, 400 West Summit Hill Drive, WT 8C, Knoxville, Tennessee 37902-1499; telephone (865) 632-6889, or e-mail
Guntersville Reservoir is the second largest of 23 multipurpose reservoirs operated by TVA for navigation, flood control, power production, recreation, and other uses. Located on the Tennessee River, the reservoir is 76 miles long and extends through parts of three counties in Alabama and Tennessee. TVA originally acquired 109,671 acres for reservoir construction. Of that, 56,300 acres are covered by water during normal summer pool. Subsequent transfers of land by TVA for economic, industrial, residential, or public recreation development have resulted in a current balance of 38,837 acres of TVA land on Guntersville Reservoir. TVA is considering updating a 1982 land allocation plan and allocating additional lands that were not considered in the 1982 plan. These additional lands are generally narrow shoreline strips, but also include the 1300-acre Murphy Hill Generating Plant site, where an electric power plant was never built. Because the 1982 plan does not reflect current demands for land, TVA is proposing to update the plan to reflect community needs and current TVA policies.
TVA develops reservoir land management plans to help in the management of reservoir properties in its custody. These plans allocate lands to various categories of uses, and are then used to guide the types of activities that will be considered on each tract of land. By providing a clear statement of how TVA intends to manage land and by identifying land for specific uses, TVA hopes to balance conflicting uses and facilitate decision making for use of its land. Each plan is submitted for approval by the TVA Board of Directors and adopted as policy to provide for long-term land stewardship and accomplishment of TVA responsibilities under the TVA Act of 1933.
In developing the Guntersville Reservoir Land Management Plan, it is anticipated that lands currently committed to a specific use would be allocated to that current use unless there is an overriding need to change. Commitments include transfers, easements, leases, licenses, contracts, utilities, outstanding land rights, or developed recreation areas. All lands under TVA control would be allocated in the planning process. At this time, TVA anticipates that two alternatives would be analyzed in the EIS. Other alternatives may be developed in response to public or agency comments. Under the No Action alternative, TVA would continue to rely on its existing 1982 Guntersville Reservoir Land Management Plan. This plan allocates land into 16 categories, including natural areas, forest and wildlife management, recreation, and industrial sites.
A second alternative would allocate reservoir lands into seven land use zones. It is anticipated that a sizable portion of these lands would be allocated to natural resource conservation and sensitive resource protection categories. However, in order to grandfather existing uses and to accommodate future development, smaller acreages would also be allocated to industrial and commercial development, recreation, and residential access.
This EIS will tier from TVA's Final EIS, Shoreline Management Initiative: An Assessment of Residential Shoreline Development Impacts in the Tennessee Valley (November 1998). That EIS evaluated alternative policies for managing residential uses along TVA's reservoir system, including Guntersville Reservoir.
TVA held meetings to inform the public of the land allocation plan update and to solicit input in March 20, 2000 in South Pittsburg, Tennessee; March 21, 2000 in Scottsboro, Alabama; and March 23, 2000 in Guntersville, Alabama. These meetings were attended by 112 people. In addition, written comments were invited through a news release, newspaper notices, and a web-site notice. Subsequent to the scoping meetings, TVA determined that the development of an EIS would allow a better understanding of the impacts of the alternatives. Accordingly, this notice publishes TVA's intent to prepare an EIS. Based on the results of the previous scoping, TVA anticipates that the EIS will include discussions of the potential effects of alternatives on the following resource areas: aquatic ecology, water quality, wetlands, terrestrial ecology, cultural resources, noise, recreation, visual resources, threatened and endangered species, and navigation. Other issues which may be discussed, depending on the potential impacts of the alternatives, include floodplains, prime farmland, and air quality.
Since three meetings have already been conducted, TVA does not plan to hold additional meetings for scoping. However, written comments on the scope of issues to be addressed in the EIS are still requested. The participation of affected Federal, state, and local agencies and Indian tribes, as well as other interested persons is invited. Further, pursuant to the National Historic Preservation Act, TVA is interested in receiving comments on the potential of the proposed land allocation plan to affect historic properties. Written comments on the scope of the EIS should be received on, or before January 31, 2001. Following publication of the draft EIS, public comments on the draft plan will be solicited.
Federal Aviation Administration, DOT.
Notice.
The Federal Aviation Administration (FAA) announces its determination that the revised noise exposure maps submitted by the Naples Airport Authority for Naples Municipal Airport under the provisions of Title I of the Aviation Safety and Noise Abatement Act of 1979 (Public Law 96-193) and 14 CFR part 150 are in compliance with applicable requirements.
The effective date of the FAA's determination on the noise exposure map is December 7, 2000.
Mr. Tommy J. Pickering, P.E., Federal Aviation Administration, Orlando Airports District Office, 5950 Hazeltine National Drive, Suite 400, Orlando, Florida 32822, (407) 812-6331, Extension 29.
This notice announces that the FAA finds that the revised noise exposure maps submitted for Naples Municipal Airport are in compliance with applicable requirements of Part 150, effective December 7, 2000.
Under section 103 of the Aviation Safety and noise Abatement Act of 1979 (hereinafter referred to as “the Act” ), an airport operator may submit to the FAA noise exposure maps which meet applicable regulations and which depict noncompatible land uses as of the date of submission of such maps, a description of projected aircraft operations, and the ways in which such operations will affect such maps. The Act requires such maps to be developed in consultation with interested and affected parties in the local community, government agencies, and persons using the airport.
An airport operator who has submitted noise exposure maps that are found by FAA to be in compliance with the requirements of Federal Aviation Regulation (FAR) Part 150, promulgated pursuant to Title I of the Act, may submit a noise compatibility program for FAA approval which sets forth the measures the operator has taken or proposes for the reduction of existing noncompatible uses and for the prevention of the introduction of additional noncompatabile uses.
The FAA has completed its review of the revised noise exposure maps and related descriptions submitted by the Naples Airport Authority. The specific maps under consideration are “2000 NOISE EXPOSURE MAP” and “2005 NOISE EXPOSURE MAP” in the submission. The FAA has determined that these maps for Naples Municipal Airport are in compliance with applicable requirements. This determination is effective on December 7, 2000. FAA's determination on an airport operator's noise exposure maps is limited to a finding that the maps were developed in accordance with the procedures contained in Appendix A of FAR Part 150. Such determination does not constitute approval of the applicant's data, information or plans, or a commitment to approve a noise compatibility program or to fund the implementation of that program.
If questions arise concerning the precise relationship of specific properties to noise exposure contours depicted on a noise exposure map submitted under Section 103 of the Act, it should be noted that the FAA is not involved in any way in determining the relative locations of specific properties with regard to the depicted noise contours, or in interpreting the noise exposure maps to resolve questions concerning, for example, which properties should be covered by the provisions of section 107 of the Act. These functions are inseparable from the ultimate land use control and planning responsibilities of local government. These local responsibilities are not changed in any way under Part 150 or through FAA's review of noise exposure maps. Therefore, the responsibility for the detailed overlaying of noise exposure contours onto the map depicting properties on the surface rests exclusively with the airport operator which submitted those maps, or with those public agencies and planning agencies with which consultation is required under section 103 of the Act. The FAA has relied on the certification by the airport operator, under section 150.21 of FAR Part 150, that the statutorily required consultation has been accomplished.
Copies of the revised noise exposure maps and of the FAA's evaluation of the maps are available for examination at the following locations:
Questions may be directed to the individual named above under the heading,
Federal Aviation Administration (FAA), DOT.
Notice of petitions for exemption received and of dispositions of prior petitions.
Pursuant to FAA's rulemaking provisions governing the application, processing, and disposition of petitions for exemption part 11 of Title 14, Code of Federal Regulations (14 CFR), this notice contains a summary of certain petitions seeking relief from specified requirements of 14 CFR, dispositions of certain petitions previously received, and corrections. The purpose of this notice is to improve the public's awareness of, and participation in, this aspect of FAA's regulatory activities. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of any petition or its final disposition.
Comments on petitions received must identify the petition docket number involved and must be received on or before January 9, 2001.
Send comments on any petition in triplicate to: Federal Aviation Administration, Office of the Chief Counsel, Attn: Rule Docket (ABC-200), Petition Docket No.________, 800 Independence Avenue, SW., Washington, DC 20591.
The petition, any comments received, and a copy of any final disposition are filed in the assigned regulatory docket and are available for examination in the Rules Docket (AGC-200), Room 9150, FAA Headquarters Building (FOB 10A), 800 Independence Avenue, SW., Washington, DC 20591; telephone (202) 267-3132.
Forest Rawls (202) 267-8033, or Vanessa Wilkins (202) 267-8029, Office
This notice is published pursuant to §§ 11.85 and 11.91.
Federal Railroad Administration, DOT.
Notice.
In accordance with the Paperwork Reduction Act of 1995 and its implementing regulations, the Federal Railroad Administration (FRA) hereby announces that it intends to modify existing instructions of three currently approved information collection reporting forms. The revised instructions will be added to the next edition of the FRA Guide for Preparing Accident/Incident Reports. For a projected five-year period, FRA seeks to gather additional data that is needed in order to enhance rail safety. However, only the instructions will be revised. FRA contemplates no change to the data elements of any of the three applicable reporting forms, and believes there will be no change in the number of responses. FRA seeks to capture information concerning “remote control devices” that is not presently provided by the railroads in order to further reduce the number and severity of railroad accidents/incidents, and accompanying casualties to railroad workers and members of the public. FRA estimates that there will be no change in the burden time per response for each form; that there will be no change in the total burden hours for the three relevant reporting forms; and that there will be no change in the total burden hours for the entire currently approved information collection. FRA is working with members of the railroad industry and members of railroad labor unions in this partnership effort. FRA has met with representatives of the railroad industry and railroad labor unions to explain the type of data needed and to solicit their views. FRA will continue to consult with them regarding final changes to the instructions to be included in the next Guide. FRA includes a copy of the modified instructions with this notice.
Comments are requested no later than February 20, 2001.
Submit written comments on any or all of the following proposed activities by mail to either: Robert Brogan, Office of Safety, Planning and Evaluation Division, RRS-21, Federal Railroad Administration, 1120 Vermont Ave., NW., Mail Stop 17, Washington, DC 20590, (telephone: (202)-493-6292), or Nancy Friedman, Trial Attorney, Office of Chief Counsel, Federal Railroad Administration, 1120 Vermont Ave., NW., Mail Stop 10, Washington, DC 20590, (telephone: (202)-493-6034). (These telephone numbers are not toll-free.) Commenters requesting FRA to acknowledge receipt of their respective comments must include a self-addressed stamped postcard stating, “Comments on OMB control number 2130-0500.” Alternatively, comments may be transmitted via facsimile to (202) 493-6265 or (202) 493-6068, or E-mail to Robert Brogan at
Robert Brogan, Office of Planning and Evaluation Division, RRS-21, FRA, 1120 Vermont Ave., NW., Mail Stop 17, Washington, DC 20590 (telephone: (202) 493-6292) or Nancy Friedman, Trial Attorney, Office of Chief Counsel, FRA, 1120 Vermont Ave., NW., Mail Stop 10, Washington, DC 20590 (telephone: (202) 493-6034). (These telephone numbers are not toll-free.)
The Paperwork Reduction Act of 1995 (PRA), Pub. L. No. 104-13, § 2, 109 Stat. 163 (1995) (codified as revised at 44 U.S.C. §§ 3501-3520), and its implementing regulations, 5 CFR part 1320, require Federal agencies to provide 60-days notice to the public for comment on information collection activities before seeking approval for reinstatement or renewal by OMB. 44 U.S.C. § 3506(c)(2)(A); 5 CFR §§ 1320.8(d)(1), 1320.10(e)(1), 1320.12(a). Specifically, FRA invites interested respondents to comment on the following summary of proposed information collection activities regarding (i) whether the information collection activities are necessary for FRA to properly execute its functions, including whether the activities will have practical utility; (ii) the accuracy of FRA's estimates of the burden of the information collection activities, including the validity of the methodology and assumptions used to determine the estimates; (iii) ways for FRA to enhance the quality, utility, and clarity of the information being collected; and (iv) ways for FRA to minimize the burden of information collection activities on the public by automated, electronic, mechanical, or other technological collection techniques or other forms of information technology (
Below is a brief summary of currently approved information collection activities that FRA seeks to slightly modify. FRA requests continuation of the current approval for the reasons listed in the summary above.
FRA publishes these instructions as provided for in the final section pertaining to “Special Study Blocks” included in the preamble to FRA's final rule on Railroad Accident Reporting (49 CFR part 225). Specifically, the Final Decision section of “Special Study Blocks” in the preamble to that final rule provides that: “The Rail Equipment Accident/Incident Report (Form FRA F 6180.54) contains two SSBs in block “49.” As the need arises, FRA will notify the railroads in writing, or if appropriate, through publication in the
FRA anticipates that use of one or more SSBs will be occasional, rather than continuous. As appropriate, FRA will consult with the Railroad Safety Advisory Committee (RSAC) before formulating the respective information collections.” (see 61 FR 30947; June 18, 1996).
Pursuant to 44 U.S.C. 3507(a) and 5 CFR 1320.5(b), 1320.8(b)(3)(vi), FRA informs all interested parties that it may not conduct or sponsor, and a respondent is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
44 U.S.C. §§ 3501-3520.
Listed below are proposed changes to instructions for FRA Forms F 6180.54, 6180.55a, and 6180.57 to be included in the next edition of FRA's Guide to Preparing Accident/Incident Reports. The changes specify the type of information to be captured about remote controlled devices through the use of coded letters in the “Special Study Blocks.”
Remote Control Transmitter/Receiver—A term used to describe the critical components involved in operating on-track equipment by radio signals transmitted from a portable transmitter to a receiver located on board the on-track equipment. The device will be capable of transmitting from outside of the operating compartment of a designated and equipped unit of on-track rail equipment and will transmit coded command signals which will operate, at a minimum, the equipment's speed, direction, braking and shutdown systems.
Rail Equipment accident/incident (Form 6180.54)
Remotely Controlled Operation—A movement of on-track rail equipment that is controlled by an employee or contractor using a remote transmitter/receiver designed to control the locomotive, maintenance machine, or other type of self-propelled on-track rail equipment. (Code = R)
When, on Form FRA F 6180.54, the
When, on Form FRA F 6180.54, the
Entries in Block 34 relate to the number of locomotive units and their placement in a consist or train. Notations in Block 34 are separate and apart from data being collected in Special Study Block 49.
Highway-Rail Grade Crossing accident/incident (Form 6180.57)
Remotely Controlled Operation—A movement of on-track rail equipment that is controlled by an employee or contractor using a remote transmitter/receiver designed to control the locomotive, maintenance machine, or other type of self-propelled on-track rail equipment. (Code = R)
When, on Form FRA F 6180.57, the
When, on Form FRA F 6180.57, the
Railroad Casualties to persons: Injury Illness Summary (Form 6180.55a)
Remotely Controlled Operation—A movement of on-track rail equipment that is controlled by an employee or contractor using a remote transmitter/receiver designed to control the locomotive, maintenance machine, or other type of self-propelled on-track rail equipment. (Code = R)
Carrying—When an injured/ill employee or contractor, has on his or her person a remote transmitter capable of controlling the locomotive, maintenance machine, or other type of self-propelled on-track rail equipment. (Code = C)
Not Carrying—When
Operating—When an injured/ill employee or contractor, at the time of the accident/incident, has on his or her person a remote transmitter capable of controlling a locomotive or maintenance machine, and other type of self-propelled on-track rail equipment. (Code = O)
Not Operating—When an injured/ill employee, at the time of the accident/incident, has on his person a remote transmitter capable of controlling a locomotive or maintenance machine, and is
Below are all possible valid coding scenarios for casualty reporting involving Remote Control Operations.
When used, any three (3) letter combination
RCO = Remotely Controlled Operation, injured/ill employee or contractor is carrying remotely controlled transmitter, and is operating the remotely controlled movement at the time of accident/incident.
RCN = Remotely Controlled Operation, injured/ill employee or contractor is carrying remotely controlled transmitter, and is NOT operating the remotely controlled movement at the time of accident/incident.
RNN = Remotely Controlled Operation, Injured/Ill person is NOT carrying remotely controlled transmitter, and is NOT operating the remotely controlled movement at the time of accident/incident.
When, on Form FRA F 6180.55a, the reporting area headed “narrative”
Add:
Austin Area Terminal Railroad, Inc. (AATR) has filed a verified notice of exemption under 49 CFR 1150.31 to change operators from Trans-Global Solutions, Inc. d/b/a Austin Area Terminal Railroad (TGS) to AATR on a line of railroad owned by Capital Metropolitan Transportation Authority.
The parties indicate that the exemption will be effective on or about December 13, 2000. The earliest the transaction can be consummated is December 13, 2000 (7 days after the exemption was filed).
If the verified notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to STB Finance Docket No. 33972, must be filed with the Surface Transportation Board, Office of the Secretary, Case Control Unit, 1925 K Street, NW., Washington, DC 20423-0001. In addition, a copy of each pleading must be served on Edward D. Greenberg, Esq., Galland, Kharasch, Greenberg, Fellman & Swirsky, P.C., Canal Square, 1054 Thirty-First Street, NW., Washington, DC 20007-4492.
Board decisions and notices are available on our website at
Central Kansas Railway, L.L.C. (CKR) has filed a notice of exemption under 49 CFR 1152 Subpart F—
CKR has certified that: (1) No local traffic has moved over the line for at least 2 years; (2) there has been no overhead traffic on the line during the past two years; (3) no formal complaint filed by a user of rail service on the line (or by a state or local government entity acting on behalf of such user) regarding cessation of service over the line either is pending with the Surface Transportation Board (Board) or with any U.S. District Court or has been decided in favor of complainant within the 2-year period; and (4) the requirements at 49 CFR 1105.7 (environmental reports), 49 CFR 1105.8 (historic reports), 49 CFR 1105.11 (transmittal letter), 49 CFR 1105.12 (newspaper publication), and 49 CFR 1152.50(d)(1) (notice to governmental agencies) have been met.
As a condition to this exemption, any employee adversely affected by the abandonment and discontinuance shall be protected under
A copy of any petition filed with the Board should be sent to applicant's representative: Karl Morell, Ball Janik LLP, 1455 F St., NW., Suite 225, Washington, DC 20005.
If the verified notice contains false or misleading information, the exemption is void
CKR has filed an environmental report which addresses the effects, if any, on the environmental and historic resources. The Section of Environmental Analysis (SEA) will issue an environmental assessment (EA) by December 22, 2000. Interested persons may obtain a copy of the EA by writing to SEA (Room 500, Surface Transportation Board, Washington, DC 20423) or by calling SEA, at (202) 565-1545. Comments on environmental and historic preservation matters must be filed within 15 days after the EA becomes available to the public.
Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision.
Pursuant to the provisions of 49 CFR 1152.29(e)(2), CKR shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned its line. If consummation has not been effected by CKR's filing of a notice of consummation by December 20, 2001, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire.
Board decisions and notices are available on our website at http://WWW.STB.DOT.GOV.
By the Board, David M. Konschnik, Director, Office of Proceedings.
Employment Standards Administration, Labor.
Final rule.
On January 22, 1997, the Department issued a proposed rule to amend the regulations implementing the Black Lung Benefits Act. 62 FR 3338-3435 (Jan. 22, 1997). When the comment period closed on August 21, 1997, the Department had received written submissions from almost 200 interested persons, including coal miners, coal mine operators, insurers, physicians, and attorneys. The Department also held hearings in Charleston, West Virginia, and Washington, D.C. at which over 50 people testified. The Department carefully reviewed the testimony and the comments and, on October 8, 1999, issued a second notice of proposed rulemaking. 64 FR 54966-55072 (Oct. 8, 1999). In its second notice, the Department proposed changing several of the most important provisions in its initial proposal. The Department also explained its decision not to alter the original proposal with respect to other key regulations based on the comments received to date. Finally, the Department prepared an initial regulatory flexibility analysis. In order to ensure that small businesses that could be affected by the Department's proposal received appropriate notice of the Department's proposed changes, the Department mailed a copy of the second notice of proposed rulemaking to all coal mine operators contained in the databases maintained by the Mine Safety and Health Administration.
The Department initially allowed interested parties until December 7, 1999 to file comments to its second proposal, but extended that period until January 6, 2000. The Department received 37 written submissions before the close of the comment period, from groups representing both coal miners and coal mine operators. The Department also received comments from individual miners, various coal mining and insurance companies, as well as from claims processing organizations, attorneys, and various professional organizations. The Department has carefully reviewed all of the comments, and is issuing its final rule. The rule contains a final regulatory flexibility analysis as required by the Regulatory Flexibility Act.
January 19, 2001.
James L. DeMarce, (202) 693-0046.
The Department's final rule reprints 20 CFR Parts 718 (except Tables B1 through B6 in Appendix B), 722, 725, and 726 in their entirety. The Department has not revised all of the regulations in these parts. A detailed list of the regulations to which the Department has made substantive revisions follows the Summary of Noteworthy Regulations below, accompanied by a list of regulations to which the Department has made technical revisions, a list of regulations that the Department has deleted, and a list of regulations that the Department has not changed in any manner.
These final regulations implementing the Black Lung Benefits Act provide simplified administrative procedures for the adjudication of claims pending before the Office of Workers' Compensation Programs (OWCP). The new streamlined procedures are less formal and should be easier for claims participants to understand. They require the district director to issue fewer documents and therefore involve fewer procedural steps and deadlines. They also require fewer responses from the parties. These changes are in response to the many comments the Department has received asking that OWCP's procedures be simplified and made less formal and adversarial.
In its initial notice of proposed rulemaking, the Department announced its intent to amend these regulations with the goal of helping to improve services, streamline the adjudication process and simplify the regulations' language. The Department noted OWCP's many years of experience administering the program and the variety of ideas for change which had resulted from it. 62 FR 3338 (Jan. 22, 1997). In the second notice of proposed rulemaking, the Department emphasized its commitment to improve the quality of the information it provides the parties to a black lung claim. As part of this commitment, the Department noted its intent to substantially rewrite the documents used by district directors to notify parties of the “initial findings” on their claims. The Department stated its goal was to help make claim processing by district offices easier to understand and to give claimants a clear picture of the medical evidence developed in connection with their claims so that they were able to make more informed decisions as to how to proceed. The Department also noted that it had attempted to “eliminat[e] the hierarchy of response times” at the district director level. 64 FR 54992 (Oct. 8, 1999). After the receipt of many comments addressing its proposals, the Department has determined that a more comprehensive streamlining of district director procedures is warranted.
The Department has therefore eliminated the use of initial findings and the required responses to them, as well as the district director's initial adjudication as proposed in §§ 725.410-725.413. Similarly, the Department has altered the rules governing informal conferences, § 725.416. If a conference is held, no memorandum of conference will result, § 725.417(c). Instead, OWCP will issue only one decisional document at the conclusion of the district director's processing of a claim: in most cases a proposed decision and order, § 725.418. The proposed decision and order will give rise to the thirty-day period for requesting a hearing before the Office of Administrative Law Judges and, if no such hearing is requested, to the one-year period for filing a request for modification, § 725.419. The proposed decision and order will also contain the district director's final designation of the responsible operator liable for the payment of benefits, and the dismissal of all other potentially liable operators that had previously received notice of the claim.
The Department hopes that the absence of documents with titles such as “initial findings” and “memorandum of conference” will encourage a less adversarial and less formal development of the necessary evidence and will promote more timely evidentiary development. As previously proposed, the district director will engage in a preliminary gathering of the relevant evidence. He will develop medical evidence, including the complete pulmonary evaluation, §§ 725.405-725.406. He will identify and notify those coal mine operators among the claimant's former employers which he deems to be potentially liable operators, § 725.407, and gather evidence from them regarding their employment of the miner and their status as operators, § 725.408. At the conclusion of this evidence-gathering, however, rather than issue an initial finding (a document with the appearance of a preliminary adjudication of the claim), the district director will issue a schedule for the submission of additional evidence, § 725.410. This
The schedule will allow the claimant and the designated responsible operator not less than 60 days to submit additional evidence, including evidence relevant to the claimant's entitlement to benefits and the employer's liability for them. The schedule will also allow at least an additional 30 days within which to respond to evidence the other party submits, § 725.410(b). These time periods may be extended for good cause shown, § 725.423. The district director will serve the schedule by certified mail on all parties and will include with it copies of all relevant evidence, § 725.410(c). The schedule will also inform the claimant and the designated responsible operator of their rights, including the right to submit additional evidence and the right to further adjudication of the claim, § 725.410(a)(4). Finally, the schedule will notify the claimant that he has the right to obtain representation and that, if the designated responsible operator fails to accept the claimant's entitlement within the specified time and the claimant establishes his entitlement to benefits payable by that operator, the responsible operator will be liable for a reasonable attorney's fee.
The new procedure requires a responsible operator to respond within 30 days as to the liability designation in the schedule, § 725.412(a)(1). Silence on the responsible operator's part will be deemed an acceptance of the district director's designation as to its liability. Silence on the operator's part with respect to claimant's entitlement, however, will be deemed a controversion. If the operator wishes to accept a claimant's entitlement to benefits, it must file a statement indicating this intent within 30 days of issuance of the district director's schedule, § 725.412(b). Thus, this schedule requires a less comprehensive operator response than the initial findings would have. The responsible operator must file a response only to contest its liability and/or to accept a claimant's entitlement to benefits. In addition, fewer parties are required to respond to the schedule since the claimant need not respond at all.
By contrast, if the district director concludes that there is no operator responsible for the payment of benefits and that the results of the complete pulmonary evaluation support a finding of eligibility, the district director shall issue a proposed decision and order awarding the claimant benefits, § 725.411. In such a case, no schedule for the submission of additional evidence is necessary, and no claimant response to the proposed decision and order is required.
At the conclusion of the time scheduled for the submission of additional evidence, § 725.415(b), the district director may either notify additional operators of their potential liability for benefits under § 725.407, issue another schedule for the submission of additional evidence identifying another potentially liable operator as the responsible operator liable for the payment of benefits, § 725.410, schedule a case for an informal conference, § 725.416, or issue a proposed decision and order, § 725.418. In the event the district director issues another schedule for the submission of additional evidence pursuant to § 725.410, the district director shall not permit the development or submission of any additional medical evidence until after he has determined the responsible operator liable for the payment of benefits. If the operator determined to be the responsible operator has not had the opportunity to submit medical evidence, the district director shall afford that operator the opportunity outlined in § 725.410. The designated responsible operator may elect to adopt any medical evidence previously submitted by another operator as its own, subject to the § 725.414 limitations.
The regulations also contain significant modifications to the informal conference procedure in order to reduce delay and to ensure that conferences are held only in appropriate cases. Thus, if an informal conference is scheduled, it must be held within 90 days of the conclusion of the evidentiary development period unless a party requests that it be postponed for good cause, § 725.416(a). A district director may schedule a conference only if all the parties to a claim are represented or deemed represented, although lay representation is sufficient, § 725.416(b). If all the pertinent requirements are met, however, and an informal conference is scheduled, the unexcused failure of a party to appear constitutes grounds for the imposition of sanctions, § 725.416(c). These sanctions may include denial of the claim by reason of abandonment, § 725.409(a)(4). In the event an ALJ ultimately reviews the denial by reason of abandonment and concludes that it was improper, he may proceed to address the merits of the claim, but only with the written agreement of the Director, § 725.409(c).
In most cases, however, at the conclusion of either the evidentiary development period or informal conference proceedings, the district director will issue a proposed decision and order setting forth his findings and conclusions with respect to the claim. In order to reduce the delay caused by informal conferences, the regulations require issuance of a proposed decision and order within 20 days after the conclusion of all informal conference proceedings, § 725.418(a). The proposed decision and order will contain the district director's final designation of the responsible operator liable for the payment of benefits, and will dismiss, as parties to the claim, all other potentially liable operators that received notification pursuant to § 725.407. Any party may request a hearing within 30 days of issuance of the decision and order, § 725.419(a). If no party responds to the proposed decision, it shall become final and effective upon the expiration of the 30-day period and no further proceedings with respect to the claim shall be possible, except for the filing of a request for modification, § 725.419(d).
The Department hopes that this simplified procedure will reduce, if not eliminate, hearing requests filed before the conclusion of a district director's claims processing. In the event a hearing request is filed before a district director has concluded his adjudication of the claim, however, OWCP will honor the request at the conclusion of processing in the absence of a party's affirmative statement that it no longer desires a hearing. Thus, if a claimant has previously requested a hearing and has been denied benefits in a proposed decision and order, the case will be forwarded to the Office of Administrative Law Judges for hearing in the absence of a statement that a hearing is no longer desired. Similarly, if an operator has previously requested a hearing, and the proposed decision and order awards the claimant benefits, OWCP will forward the claim for hearing absent a statement from the operator that it no longer desires a hearing, § 725.418(c).
With one substantive addition and several deletions, these final rules implement the Department's second proposal with respect to the development of both documentary medical evidence and evidence pertaining to operator liability. The designated responsible operator may submit documentary medical evidence either to the district director or to the administrative law judge (ALJ) up to 20 days before an ALJ hearing, or even thereafter, if good cause is shown. Documentary medical evidence may only be submitted up to the numerical limitations outlined in §§ 725.414(a), however, absent a showing of good cause, § 725.456(b). Thus, each side in a claim may submit two chest x-ray interpretations, the results of two pulmonary function tests, two arterial blood gas studies and two medical reports as its affirmative case. In addition, each party may submit one piece of evidence in rebuttal of each piece of evidence submitted by the opposing party. Finally, in a case in which rebuttal evidence has been submitted, the party that originally proferred the evidence which has been the subject of rebuttal may submit one additional statement to rehabilitate its evidence.
By contrast, documentary evidence as to operator liability must be submitted to the district director, absent a showing of exceptional circumstances, §§ 725.408(b)(2), 725.414(d), 725.456(b). There is no limit on the amount of such evidence that may be submitted, however.
At the urging of commenters representing both industry and claimants, the Department has made one addition to § 725.414(a). The Department has added a specific limitation on the amount of autopsy and biopsy evidence which may be submitted in a claim. Each side may submit one autopsy report and one report of each biopsy as part of an affirmative case. Each side may submit one autopsy report and one report of each biopsy in rebuttal of the opponent's case. Finally, where the original autopsy or biopsy evidence has been the subject of rebuttal, the party that submitted the original report may submit an additional statement from the physician who authored that report.
The Department has deleted language throughout § 725.414 referring to potentially liable operators since only the designated responsible operator and/or the Trust Fund will have the authority to develop documentary medical evidence in a claim. The Department has also deleted one provision of proposed § 725.414, § 725.414(e), as well as the comparable provision proposed as § 725.456(c). These subsections would have provided that any evidence obtained by a party while a claim was pending before a district director but withheld from the district director or any other party shall not be admitted into the record in any later proceedings in the absence of extraordinary circumstances unless its admission is requested by another party. Commenters opposed these provisions, and the Department has agreed to delete them. The Department believes they are no longer necessary, given the significant alteration in the district director's methods for gathering evidence under the new regulations,
With one exception, these final rules implement the Department's second proposal with respect to the administration of the complete pulmonary evaluation required by 30 U.S.C. 923(b). The Department will allow each claimant to select the physician or facility to perform his evaluation from a list of authorized providers maintained by the Department. The list in each case will include all authorized physicians and facilities in the state of the miner's residence and contiguous states, § 725.406(b). The Department will also make available to the claimant's treating physician, at the claimant's request, the results of the objective testing administered as part of the complete pulmonary evaluation and will inform the claimant that any opinion submitted by his treating physician will count as one of the two medical reports that the miner may submit, § 725.406(d).
The Department has not included in the final regulation at § 725.406, however, the provision proposed as subsection (e) which would have allowed the district director to require the claimant to be reexamined after the completion of the complete pulmonary evaluation if the district director believed that unresolved medical questions remained. Commenters from both industry and claimants' groups opposed this provision, and the Department has concluded it is no longer necessary. The complete pulmonary evaluation will now be performed by a highly qualified physician who may be asked by the district director to clarify and/or supplement an initial report if unresolved medical questions remain. In addition, the components of the complete pulmonary evaluation are to be in substantial compliance with the applicable quality standards and the district director retains authority elsewhere in § 725.406 to schedule the miner for further examination or testing to ensure compliance with these standards.
In the second notice of proposed rulemaking, the Department also announced its intent to perform the best possible respiratory and pulmonary evaluation of miners applying for benefits. The Department promised a thorough examination, performed in compliance with the quality standards, in order to provide each claimant with a realistic appraisal of his condition and the district director with a sound evidentiary basis for a preliminary evaluation of the claim. The Department also announced its intent to develop more rigorous standards for physicians who perform complete pulmonary evaluations. The Department invited the interested public to comment on the possible standards that might be used to select physicians and facilities, 64 FR 54988-54989 (Oct. 8, 1999).
The comments the Department received are discussed in detail in the preamble to § 725.406. It is the Department's intent, however, to include in its Black Lung Program Manual the requirements for a physician's or medical facility's inclusion on the list. The Manual is available to the public in every district office of OWCP. Thus, the requirements for participation in OWCP's program and the manner in which the Department has used those requirements to select physicians for inclusion on the approved list will be public information. The Department does not intend to screen the contents of physicians' prior reports and testimony before including them on the list. The Department intends only to ascertain that the required professional credentials are present.
These final rules adopt the provisions governing witness testimony proposed in the Department's second notice of proposed rulemaking. No person shall be permitted to testify as a witness at a hearing, pursuant to deposition or by interrogatory unless that person meets the requirements of § 725.414(c). Thus, in the case of a witness offering testimony relevant to the liability of a potentially liable operator or the identification of a responsible operator,
The Department has adopted a rule governing the weighing of treating physicians' opinions similar to the one proposed in its second notice of proposed rulemaking, § 718.104(d). The rule is discussed in detail in the preamble to § 718.104. The language of § 718.104(d) has been altered to provide that, in appropriate cases, the relationship between the miner and his treating physician may constitute substantial evidence in support of the adjudication officer's decision to give that physician's opinion controlling weight.
The Department has adopted the proposed definition of pneumoconiosis without alteration. In the preamble to § 718.201, the Department explains that the term “legal pneumoconiosis” does not create a new medical diagnosis, but rather reflects the statute's definition of the disease as “a chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments, arising out of coal mine employment.” 30 U.S.C. 902(b). The preamble also explains in detail the Department's decision to include chronic obstructive pulmonary disease in the definition of pneumoconiosis to the extent it is shown to have arisen from coal mine employment. The Department attempts to clarify that not all obstructive lung disease is pneumoconiosis. It remains the claimant's burden of persuasion to demonstrate that his obstructive lung disease arose out of his coal mine employment and therefore falls within the statutory definition of pneumoconiosis. The Department has concluded, however, that the prevailing view of the medical community and the substantial weight of the medical and scientific literature supports the conclusion that exposure to coal mine dust may cause chronic obstructive pulmonary disease. Each miner must therefore be given the opportunity to prove that his obstructive lung disease arose out of his coal mine employment and constitutes “legal” pneumoconiosis.
The Department has also adopted the proposed regulation defining total disability and disability due to pneumoconiosis with one alteration, § 718.204. To clarify its original intent concerning the extent to which pneumoconiosis must contribute to a miner's total disability, the Department has amended the language of §§ 718.204(c)(1)(i) and 718.204(c)(1)(ii) by adding the words “material” and “materially.” Thus, a miner has established that his pneumoconiosis is a substantially contributing cause of his disability if it either has a material adverse effect on his respiratory or pulmonary condition or materially worsens a totally disabling respiratory or pulmonary impairment caused by a disease or exposure unrelated to coal mine dust. Evidence that pneumoconiosis made only a negligible, inconsequential or insignificant contribution to the miner's disability is insufficient to establish total disability due to pneumoconiosis. This change is discussed in detail in the preamble at § 718.204. The Department has also adopted one important proposed change with respect to the clinical evidence which may be used to establish total disability,
These final rules adopt the regulation governing subsequent claims that was proposed in the Department's second notice of proposed rulemaking. A subsequent claim is an application for benefits filed more than one year after the denial of a previous claim. It may be adjudicated on its merits only if the claimant demonstrates that an applicable condition of entitlement has changed in the interim. In the second proposal, the Department justified the rule by noting that “allowing the filing of a subsequent claim for benefits which alleges a worsening of the miner's condition, * * * merely recognizes the progressive nature of pneumoconiosis.” 64 FR 54968 (Oct. 8, 1999). In the preamble to § 725.309, the Department responds in detail to those commenters who oppose the regulation. They argue, in part, that the Department's recognition of pneumoconiosis as a latent and progressive disease is scientifically unsound. The Department has summarized the scientific and medical evidence supporting its view that pneumoconiosis is both latent and progressive and has responded to the criticism leveled at that evidence. It is the Department's conclusion that the record contains abundant evidence to justify the regulation governing subsequent claims.
With minor changes, these final rules promulgate the regulation governing the payment of a claimant's attorney's fee as it was proposed in the Department's second notice of proposed rulemaking, § 725.367. The Department wishes to encourage attorneys to represent claimants early in the administrative process, given the important decisions which may be made by a claimant while a claim is pending before the district director. For example, the rules now limit the quantity of medical evidence that a claimant may submit in support of his entitlement. A claimant may request that the Department send the objective test results from his complete pulmonary evaluation to his treating physician. Any treating physician's opinion which is submitted to the district director, however, may become one of the claimant's two medical reports. The Department's rule governing attorney's fees, therefore, seeks to encourage early attorney involvement by providing a different starting point for employer and Fund attorney fee liability. Although the creation of an adversarial relationship and the ultimately successful prosecution of a claim are still necessary to trigger employer or Fund liability, once that liability is triggered, a reasonable fee will be awarded for all necessary work performed, even if it was performed before the creation of the adversarial relationship.
The text of the regulation has been altered in minor ways. The language describing the fee to which an attorney is entitled has been amended to conform with § 725.366. Section 725.367 therefore provides for the payment of a “reasonable fee[] for necessary services performed. * * *” In addition, the regulation has been amended to conform with the revised district director claims procedure. Thus, § 725.367(a)(1) now provides that if the responsible operator designated by the district director pursuant to § 725.410(a)(3) fails to accept the claimant's entitlement to benefits within the 30 day period provided by § 725.412(b) and is ultimately determined to be liable for benefits, the operator shall also be liable for a reasonable attorney's fee. Similarly, if there is no operator that may be held liable for the payment of benefits, the district director issues a schedule for the submission of additional evidence under § 725.410, and the claimant successfully prosecutes his application for benefits, the Fund will be liable for a reasonable attorney's fee, § 725.367(a)(2). Finally, if the district director issues more than one schedule for the submission of additional evidence in order to designate a different operator as the responsible operator, and that operator is ultimately determined to be liable for the payment of benefits, that operator will be liable for the payment of claimant's attorney's fee if it fails to accept the claimant's entitlement within 30 days of the date upon which it is notified of its designation as responsible operator.
The Department has not adopted a “true doubt” rule in these regulations. The “true doubt” rule was an evidentiary weighing principle under which an issue was resolved in favor of the claimant if the probative evidence for and against the claimant was in equipoise. The Department believes that evaluation of conflicting medical evidence requires careful consideration of a wide variety of disparate factors affecting the credibility of that evidence. The presence of these factors makes it unlikely that a factfinder will be able to conclude that conflicting evidence is truly in equipoise.
The Department has made two changes to the regulation governing the identification of a responsible operator, § 725.495. That regulation now provides that if the miner's most recent employer was a self-insured operator which no longer possesses sufficient assets to secure the payment of benefits when the miner files his claim, the Department will not name a previous employer as responsible operator. Rather, the claim will be the responsibility of the Black Lung Disability Trust Fund. The Department has made this change in response to a comment that stated that it is unfair to name a prior employer as liable for a claim when the financial inability of the later employer to pay the claim is the fault of the Department. Because the Department has the authority to accept or reject applications for self-insurance and to set minimum standards for qualifying as a self-insurer, the Department agrees with the commenter. Thus, to the extent the security deposited by a self-insured coal mine operator pursuant to § 726.104 proves insufficient to pay individual claims, liability will not be placed on previous employers, but rather on the Trust Fund. The Department has also altered the language of § 725.495(d) to reflect the changes made in the regulations governing district director claims processing, §§ 725.410-725.413. The district director will no longer issue an initial finding naming a responsible operator but rather will finally designate in a proposed decision and order one operator as the responsible operator liable for a claim, § 725.418(d).
In the second notice of proposed rulemaking, the Department opened § 726.203 for comment, noting that representatives of the insurance industry had told the Department that a different version of the insurance endorsement than the one contained in § 726.203(a) had been in use since 1984 with the Department's consent. The Department invited the submission of any document the insurance industry might possess from the Department authorizing use of the different endorsement. 64 FR 54969-70, 55005-06 (Oct. 8, 1999). The Department has carefully considered the comments submitted in response to the second notice of proposed rulemaking and declines to amend § 726.203. The revised black lung endorsement offered by the commenters would materially alter the obligations and coverage provided by the insurance industry, thereby increasing the potential exposure of coal mine operators and the Black Lung Disability Trust Fund,
The Department has made substantive revisions to the following regulations: § 718.3, § 718.101, § 718.102, § 718.103, § 718.104, § 718.105, § 718.106, § 718.107, § 718.201, § 718.202, § 718.204, § 718.205, § 718.301, Appendix B to part 718, Appendix C to Part 718, part 722 (entire), § 725.1, § 725.2, § 725.4, § 725.101, § 725.103, § 725.202, § 725.203, § 725.204, § 725.209, § 725.212, § 725.213, § 725.214, § 725.215, § 725.219, § 725.221, § 725.222, § 725.223, § 725.306, § 725.309, § 725.310, § 725.311, § 725.351, § 725.362, § 725.367, § 725.403, § 725.405, § 725.406, § 725.407, § 725.408, § 725.409, § 725.410, § 725.411, § 725.412, § 725.413, § 725.414, § 725.415, § 725.416, § 725.417, § 725.418, § 725.421, § 725.423, § 725.452, § 725.454, § 725.456, § 725.457, § 725.458, § 725.459, § 725.465, § 725.478, § 725.479, § 725.490, § 725.491, § 725.492, § 725.493, § 725.494, § 725.495, § 725.502, § 725.503, § 725.515, § 725.522, § 725.530, § 725.533, § 725.537, § 725.543, § 725.544, § 725.547, § 725.548, § 725.606,
The Department has made only technical changes to the following regulations: § 718.1, § 718.2, § 718.4, 718.303, Appendix A to Part 718, § 725.3, § 725.102, § 725.201, § 725.206, § 725.207, § 725.216, § 725.217, § 725.218, § 725.220, § 725.301, § 725.302, § 725.350, § 725.360, § 725.366, § 725.401, § 725.402, § 725.404, § 725.419, § 725.420, § 725.450, § 725.451, § 725.455, § 725.462, § 725.463, § 725.466, § 725.480, § 725.496, § 725.497, § 725.501, § 725.504, § 725.505, § 725.506, § 725.507, § 725.510, § 725.513, § 725.514, § 725.521, § 725.531, § 725.532, § 725.536, § 725.540, § 725.601, § 725.603, § 725.604, § 725.605, § 725.607, § 725.702, § 725.703, § 725.704, § 725.705, § 725.707, § 725.708, § 725.711, § 726.1, § 726.4, § 726.103, § 726.203, § 726.207, § 726.208, § 726.209, § 726.210, § 726.211, § 726.212, and § 726.213. In its first notice of proposed rulemaking, the Department revised § 725.3 to create a new subpart E in part 725, and to recognize the relabeling of the remaining subparts. The Department inadvertently omitted the regulation from the list of technical revisions, however. Accordingly, § 725.3 now appears in the complete list of technical revisions. The Department also inadvertently omitted §§ 725.206 and 725.540 from the list of technical revisions. The Department added a reference to § 725.4(d) to each regulation,
The following regulations have been deleted: § 718.307, § 718.401, § 718.402, § 718.403, § 718.404, § 725.453A, § 725.459A, § 725.503A, § 725.701A, and part 727 (entire). The Department explained its decision to incorporate the text of sections 725.453A, 725.459A, 725.503A, and 725.701A into other regulations in its first notice of proposed rulemaking.
The following regulations have not been revised: § 718.203, § 718.206, § 718.302, § 718.304, § 718.305, § 718.306, § 725.205, § 725.208, § 725.210, § 725.211, § 725.224, § 725.225, § 725.226, § 725.227, § 725.228, § 725.229, § 725.230, § 725.231, § 725.232, § 725.233, § 725.303, § 725.304, § 725.305, § 725.307, § 725.308, § 725.352, § 725.361, § 725.363, § 725.364, § 725.365, § 725.422, § 725.453, § 725.460, § 725.461, § 725.464, § 725.475, § 725.476, § 725.477, § 725.481, § 725.482, § 725.483, § 725.511, § 725.512, § 725.520, § 725.534, § 725.535, § 725.538, § 725.539, § 725.541, § 725.542, § 725.545, § 725.546, § 725.602, § 725.710, § 726.5, § 726.6, § 726.7, § 726.102, § 726.107, § 726.108, § 726.112, § 726.113, § 726.115, § 726.201, § 726.202, § 726.204, § 726.205, and § 726.206. The Department did not accept comments on these regulations, and is re-promulgating the regulations for the convenience of readers.
For purposes of this preamble, “he”, “his”, and “him” shall include “she”, “hers”, and “her”.
(a)(i) In the initial notice of proposed rulemaking, the Department invited public comment on the continued use of the “true doubt” rule, and specifically on the language contained in § 718.3(c), which had been cited to the Supreme Court in support of the rule. 62 FR 3341 (Jan. 22, 1997). The “true doubt” rule is an evidentiary principle which requires the adjudicator to find in favor of the claimant on a factual issue if the evidence for and against the claimant is evenly balanced. The Supreme Court invalidated the “true doubt” rule in
(b) Two comments observe that the Department has the regulatory authority to promulgate a “true doubt” rule which will comply with
(c) Three comments contend a “true doubt” rule is necessary because the limitations on the quantity of medical evidence imposed by the regulations will result in increased instances in which the evidence for and against entitlement is in equipoise despite scrupulous consideration of all relevant factors affecting credibility. The Department disagrees. The adjudicator must examine several variables in weighing the credibility of each item of medical evidence, especially physicians' opinions. Age of the opinion, reasoning, underlying clinical data, the physician's level of expertise, reliability of employment, social and medical histories, etc., are all factors to be considered in each report. As for clinical studies, the quality standards establish criteria to measure the reliability of the clinical results, and physicians' reviews of the results provide additional information on the studies' validity. When all available information is assembled, the Department believes few medical records for and against entitlement will be in equipoise. Furthermore, the limitations on evidence should prompt each party to bolster the credibility of its medical evidence and challenge the credibility of its opponent's case.
(d) One comment states the “true doubt” rule is especially needed for weighing chest x-rays because that type of evidence involves very few variables (film quality, readers' expertise) which can affect the credibility of the evidence. The Department believes no need exists to adopt a specialized “true doubt” rule for use in weighing only x-rays. Such a rule would place undue importance on one type of evidence, and would overemphasize the role of x-rays in determining whether the miner has pneumoconiosis. Chest x-rays are used to determine whether the miner has “clinical” pneumoconiosis,
(e) One comment suggests a “true doubt” rule would be useful in resolving conflicts between qualifying and nonqualifying pulmonary function and blood gas studies. The commenter acknowledges that more factors exist to determine the credibility of these types of clinical evidence than exist when chest x-ray evidence is in conflict, but nevertheless recommends making the rule applicable in the event the evidence is in equipoise. Both pulmonary function (§ 718.103) and
(f) No other comments have been received concerning this section, and no changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department added subsection (b) to emphasize that the part 718 quality standards apply to all evidence developed by any party in connection with a claim filed after March 31, 1980, and to claims governed by part 727 if the evidence was developed after that date. 62 FR 3341 (Jan. 22, 1997). Paragraph (b) also established a single standard of compliance for all clinical tests and medical reports, in place of the varying standards contained in the former individual regulations. The Department revised paragraph (b) in the second notice of proposed rulemaking to clarify that the quality standards will apply only prospectively to evidence developed in connection with a claim, after promulgation of these regulations. The Department noted it wished to avoid invalidating evidence already submitted in pending claims based on the parties' settled expectations. 64 FR 54974-75 (Oct. 8, 1999). The Department also responded to numerous comments received after the initial notice of proposed rulemaking. It rejected comments opposing the general applicability of the quality standards to medical evidence and advocating consideration of noncomplying evidence, citing the need for technically accurate and reliable evidence for the adjudication of entitlement issues. For the same reason, the Department rejected comments disputing its authority to impose quality standards on medical evidence as inconsistent with the Black Lung Benefits Act's (BLBA) requirement that “all relevant evidence” be considered.
(b) Two comments reiterate the general argument that 30 U.S.C. 923(b) and the Administrative Procedure Act (APA), 5 U.S.C. 556(d), require consideration of “all relevant evidence,” and the Department therefore cannot exclude from the adjudicator's consideration noncomplying medical evidence. The Department previously addressed, and rejected, this argument in the second notice of proposed rulemaking. 64 FR 54974 (Oct. 8, 1999). The Department stated that noncomplying evidence is not “relevant evidence” because it is inherently unreliable, and cannot form the basis for awarding or denying a claim. Upon further consideration, the Department concludes this statement, while accurate in the majority of cases, should be qualified. Evidence which does not substantially comply with the applicable standard generally is not very reliable. Noncomplying evidence should only form the basis for awarding or denying a claim in limited circumstances. All three of the following requirements must be met: no evidence exists which does comply with the applicable standards; the defect(s) cannot be cured by a supplementary opinion or other evidence; and the death of the miner precludes developing evidence which would be in substantial compliance. In order for such evidence to support an award or denial, the adjudicator must find the evidence sufficiently reliable to establish the fact(s) for which it is offered despite its failure to meet the threshold “substantial compliance” standard. The Department therefore rejects the commenters' general position that noncomplying evidence cannot be excluded under 30 U.S.C. 923(b), although the Department recognizes a limited exception to the standards' gatekeeping function for some claims involving deceased miners.
(c) Two comments cite specific examples of circumstances in which allegedly probative physicians' opinions could be disregarded on compliance grounds. (i) In one example, the commenter cites as potentially noncomplying a medical opinion diagnosing “legal” pneumoconiosis based on valid pulmonary function and arterial blood gas testing, but omitting any chest x-ray testing. The Department has previously considered the position that a medical report should not automatically be found noncomplying based on the absence of an x-ray. 64 FR 54977 (Oct. 8, 1999). In rejecting the comment that the quality standard applicable to reports of physical examination (§ 718.104) should not make a chest x-ray a standard requirement, the Department noted that an x-ray is an integral part of any examination for pneumoconiosis. The Department further noted, however, that medical evidence must only be in “substantial compliance” with the applicable quality standards; the party proffering the evidence may demonstrate that the evidence is reliable despite its failure to comply with every criterion in the standard. The Department reiterates that position. Whether any particular piece of evidence is in “substantial compliance” with the standards, and therefore reliable, is a matter for the adjudicator to determine taking into consideration all relevant circumstances. One important factor is the element(s) of entitlement for which the evidence is offered. In the example cited above, the lack of an x-ray is not necessarily fatal. The report may contain: valid and pertinent other tests and information upon which the physician can make a diagnosis; accurate medical, smoking and employment histories; results of a physical examination confirming the
(d) One comment urges the Department to include a provision specifically exempting those medical tests and reports generated outside the black lung benefits claim context from the quality standards. Specifically, the commenter requests that the text of the regulation make clear that chest x-rays, pulmonary function tests and blood gas studies administered in the hospital or as part of the miner's routine care be exempted from quality standards applicability. The Department previously addressed this concern in the second notice of proposed rulemaking. 64 FR 54975 (Oct. 8, 1999). The Department noted that § 718.101 limits the applicability of the quality standards to evidence “developed * * * in connection with a claim for benefits” governed by 20 CFR parts 718, 725 or 727. Despite the inapplicability of the quality standards to certain categories of evidence, the adjudicator still must be persuaded that the evidence is reliable in order for it to form the basis for a finding of fact on an entitlement issue. Additional exclusionary language in the regulation is therefore unnecessary.
(e) One comment contends all medical evidence involving a deceased miner should be considered without regard to the quality standards because the miner is no longer available for further testing. The Department disagrees. The regulations provide that a deceased miner's noncomplying chest x-rays, pulmonary function studies and medical reports may form the basis of an award or denial of benefits under certain circumstances provided no complying study or report is available.
(f) One comment suggests that applying the quality standards only prospectively will sanction the acceptance of inferior evidence if the evidence was developed before the effective date of these regulations. The commenter also contends the Department's rationale for prospective application implies the former quality standards will not apply to evidence developed before the effective date of these regulations, especially for unrepresented claimants. The Department disagrees. In the initial notice of proposed rulemaking, proposed § 718.101(b) required all evidence developed in conjunction with a black lung benefits claim to comply with the applicable quality standards. 62 FR 3374 (Jan. 22, 1997). The Department stated that the purpose of § 718.101(b) was to make clear the Department's disagreement with Benefits Review Board precedent holding the former 20 CFR part 718 quality standards applied only to evidence developed by the Director. 62 FR 3341 (January 22, 1997). One comment, in response to the first proposal, noted that, as written, § 718.101(b) would invalidate evidence in claims pending before the Department which was valid under prevailing Board precedent at the time the evidence was generated. The Department responded to this concern in the second notice of proposed rulemaking by revising § 718.101 to apply the quality standards only to evidence developed after the effective date of the regulations. 64 FR 55010 (Oct. 8, 1999). In explaining the revision, the Department acknowledged the “substantial hardship” which might occur, especially for unrepresented claimants, if medical evidence which complied with the law when submitted into evidence became invalid after the regulations become effective. This explanation, however, is not a concession as to the correctness of the Board's decisions. Since 1980, the Department has consistently taken the position that the 20 CFR part 718 quality standards apply to all evidence
(g) Two comments approve of the prospective application of the quality standards. One comment approves of the “substantial compliance” standard.
(h) No other comments have been received concerning this section, and no changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed three minor changes to § 718.102: eliminating the reference to the compliance standard in light of the substantial compliance language of general applicability in § 718.101(b); adding language presuming compliance with the technical criteria for chest x-rays in Appendix A; and correcting a typographical error in subsection (e) which cited to a nonexistent regulation. 62 FR 3342 (Jan. 22, 1997). The Department did not propose any additional changes in the second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 1999). In the final rule, the Department has changed subsection (e) to clarify the probative value of noncomplying x-rays in the case of a deceased miner. Specifically, this provision states that an x-ray, which is not in substantial compliance with the quality standard, may still establish the presence or absence of pneumoconiosis if the x-ray is of sufficient quality for a board-eligible radiologist, board-certified radiologist, or “B” reader to interpret the film. The Department has also added a sentence to subsection (b) to inform interested parties where they may obtain a copy of the ILO classification.
(b) One comment argues that § 718.102(b) should state that an x-ray cannot establish the absence of pneumoconiosis unless it complies with the quality standards and is classified according to a recognized scheme. The commenter further argues that § 718.102(b) and (e), in conjunction with § 718.101(b), are insufficient to impose this requirement. Section 718.102(b) identifies the classification systems which are acceptable for black lung claims. Subsection (e) states that no x-ray may demonstrate either the presence or absence of pneumoconiosis unless it complies with reporting requirements,
(c) Four comments suggest adding the phrase “in and of itself” to the subsection (e) prohibition on using unclassified x-rays to demonstrate the presence or absence of pneumoconiosis. The comments contend that the change would make clear that x-ray evidence of some disease process, in conjunction with other evidence, could be used to prove the miner has a lung disease caused by coal dust exposure,
(d) No other comments were received concerning this section, and no other changes have been made in it.
(a)(i) The Department proposed amending § 718.103 in the initial notice of proposed rulemaking to take into account proposed § 718.101(b), which would establish a single standard of “substantial compliance” for all of the quality standards. 62 FR 3342 (Jan. 22, 1997). The Department also proposed changes to § 718.103(c) to harmonize it with § 718.102(e) (X-rays). Both provisions operate in the same manner and for the same purposes: to presume compliance with technical requirements in the applicable appendices to part 718; to permit rebuttal of the presumed compliance with relevant evidence; and to permit exceptions to the quality standards for a deceased miner if the claim presents limited evidence. (ii) In response to comments received concerning the initial notice of proposed rulemaking, the Department recommended several additional changes to § 718.103 in the second notice of proposed rulemaking. 64 FR 54975-76 (Oct. 8, 1999). One physician testified at the Washington, D.C., hearing that a flow-volume loop provided a more acceptable basis for obtaining verifiable test results than the proposed prohibition on an initial inspiration from room air. The Department agreed, and proposed changing both § 718.103 and Appendix B to require flow-volume loops for every pulmonary function test obtained after the effective date of the final regulation. The Department invited additional comment on this proposal. The Department also announced its intention to survey clinics and facilities which specialize in the treatment of pulmonary conditions to ascertain the extent to which they already used spirometers capable of producing flow-volume loops. The same physician observed that 20 CFR 718.103(a) (1999) required that pulmonary function
(b) The Department announced its intention in the second notice of proposed rulemaking to conduct a survey of the physicians, clinics and facilities which perform pulmonary function testing (spirometry testing) to evaluate the prevalence of spirometers capable of producing a flow-volume loop. The Department considered the survey necessary in light of its conclusion that the flow-volume loop may provide a “more reliable method of ensuring valid, verifiable results in pulmonary function testing.” 64 FR 54975 (Oct. 8, 1999). The Department also cited the relatively inexpensive cost (approximately $2000) for a spirometer capable of producing the flow-volume loop. The Department sent out the survey, dated March 7, 2000, to approximately 1800 pulmonary clinics, facilities and physicians board-certified in internal medicine with a subspecialty in pulmonary disease (Rulemaking Record Ex. 107), and received 225 responses (Rulemaking Record Ex. 109). Of those responses, only nine indicated they did not perform pulmonary function testing on equipment producing a flow-volume loop. Of those nine, five indicated they would consider obtaining the necessary equipment. An additional 19 surveys did not respond to the questions concerning spirometric testing. The remaining respondents, 197 in all, unanimously used the flow-volume loop. Based on these survey results, the Department concludes the benefit to the claims adjudication process in obtaining reliable pulmonary function data warrants revising § 718.103(a) and Appendix B to make the flow-volume loop a mandatory requirement for any pulmonary function test conducted after the effective date of these regulations in connection with a claim for benefits under the Black Lung Benefits Act (BLBA).
(c) One comment opposes the flow-volume loop requirement because spirometric equipment which records this data may not be universally available. The Department disagrees. In the second notice of proposed rulemaking, the Department proposed using the flow-volume loop because it provides a reliable and relatively inexpensive means of producing valid, verifiable pulmonary function test results. 64 FR 54975 (Oct. 8, 1999). The Department's survey of physicians, clinics and facilities which perform pulmonary function testing confirmed the widespread use of spirometers capable of producing flow-volume loops. Although some clinics and individual physicians may not utilize such machines, the Department has concluded that the overall benefit to the claims adjudication process warrants required use of this technology. In any event, the claimant should always have access to one set of testing which complies with the quality standards, including the flow-volume loop requirement, as a result of the pulmonary examination authorized by 30 U.S.C. 923(b). This provision of the BLBA requires the Black Lung Disability Trust Fund to afford each miner-claimant the opportunity to substantiate his or her claim by means of a complete pulmonary examination at no expense to the claimant.
(d) One comment approves of the § 718.103 revisions generally, and particularly approves of the language making clear that the Maximum Voluntary Ventilation maneuver is optional. One comment supports the use of flow-volume loops and changes to § 718.103(a) which eliminate internal inconsistencies and clarify that the Maximum Voluntary Ventilation maneuver is optional. One comment approves of requiring pulmonary function test results using flow-volume loops and the increase from 5 percent to 10 percent in the maximum variation between the two largest MVV values.
(e) No other comments were received concerning this section, and no other changes have been made in it.
(a)(i) The Department proposed several changes to § 718.104 in the initial notice of proposed rulemaking. 62 FR 3342-43, 3375 (Jan. 22, 1997). One change required that each medical opinion developed in connection with a claim be based on specified tests and information, including a chest x-ray and pulmonary function study which comply with the applicable quality standards. Another change proposed
(b) Several comments oppose granting special weight to the opinion of a miner's treating physician, contending the rule either intrudes on the adjudicator's role in evaluating evidence or compels the acceptance of an opinion from the treating physician regardless of contrary opinions from physicians with greater expertise in pulmonary medicine. The Department responded to a similar criticism in the second notice of proposed rulemaking. 64 FR 54976 (Oct. 8, 1999). In rejecting a commenter's view that § 718.104(d) effectively precluded consideration of all relevant evidence in favor of the opinion of the miner's treating physician, the Department emphasized the real purpose of the rule: to recognize that a physician's professional relationship with the miner may enhance his or her insight into the miner's pulmonary condition. The Department does not believe that, as proposed, section 718.104(d) contained an outcome-determinative evidentiary rule.
(c) One comment opposes requiring each physician's opinion to include an x-ray or pulmonary function study conducted according to the applicable quality standards. The commenter suggests these tests are not always necessary for a relevant and credible opinion, and cites three examples: (i) A physician diagnoses an obstructive lung impairment based on valid pulmonary function testing, examination, etc., but does not obtain an x-ray. With respect to the mandatory x-ray requirement, the Department has previously addressed this argument in the second notice of proposed rulemaking, 64 FR 54977 (Oct. 8, 1999), and reiterates its position in responding to comments under § 718.101 of this rule. X-rays are an integral part of any informed and complete pulmonary evaluation of a miner; a general requirement for inclusion of this test is therefore appropriate. The Department also notes, however, that the quality standards require only “substantial compliance” with the various criteria, not technical compliance with every criterion in every quality standard in every case. A factfinder may conclude the omission of an x-ray does not undermine the overall credibility of the opinion, but this determination must be made on a case-by-case basis. The same commenter poses this example in the context of § 718.101. The Department's response to that hypothetical makes certain critical assumptions in concluding the physician's opinion may be found in “substantial compliance” with the quality standards: the valid pulmonary function study demonstrates the presence of a pulmonary/respiratory impairment; the physician's examination of the miner identifies signs or symptoms of a pulmonary condition; and the physician has an accurate understanding of the miner's employment, smoking and personal histories. If the clinical tests and other information provide a documented basis for a reasoned and reliable opinion, the factfinder may find the diagnosis of “legal pneumoconiosis” in “substantial compliance” with § 718.104 despite the absence of the x-ray. (ii) A physician finds complicated pneumoconiosis on an x-ray, but does not conduct a pulmonary function test. One means of diagnosing complicated pneumoconiosis is by x-ray. 30 U.S.C. 921(c)(3)(A). The x-ray evidence is relevant to §§ 718.202(a)(3) and 718.304(a); accordingly, § 718.102 provides the applicable quality standards, and not § 718.104. The lack of a pulmonary function study does not affect the probative value of the x-ray reading(s) as evidence of complicated pneumoconiosis under 30 U.S.C. 921(c)(3)(A), because a pulmonary function study is not relevant to that means of invoking the irrebuttable presumption. Although all relevant evidence must be weighed in determining whether the miner has complicated pneumoconiosis,
(d) One comment supports the revision of § 718.104(a)(6) in the second notice of proposed rulemaking, which exempts a miner from mandatory pulmonary function testing if the test is medically contraindicated, and allows a physician preparing a report of physical examination to substitute other medically acceptable clinical and laboratory diagnostic techniques in support of his conclusions. 64 FR 54976, 55011 (Oct. 8, 1999).
(e) One comment recommends the Department delete the conditions in § 718.104(c) that, in the case of a deceased miner, limit the consideration of a report from a physician who is not available if the report is not in substantial compliance with the quality standards. This provision permits the adjudicator to base a finding on such evidence only if the record does not contain any physician's report which is in substantial compliance. No change in the regulation is necessary. Although “substantial compliance” is a flexible
(f) One comment objects to the retroactive application of the changes made to § 718.104. None of these changes, however, apply retroactively. Section 718.101(b) provides that the “standards for the administration of clinical tests and examinations” will govern all evidence developed in connection with benefits claims after the effective date of the final rule. Section 718.104 contains the quality standards for any “[r]eport of physical examinations,” including reports prepared by a miner's treating physician. Physicians' medical reports are expressly included in the terms of § 718.101(b). Consequently, the changes to § 718.104 apply only to evidence developed after the effective date of the final rule. With respect to treating physicians' opinions developed and submitted before the effective date of the final rule, the judicial precedent summarized in the Department's initial notice of proposed rulemaking continues to apply.
(g) Two comments state the “treating physician” rule has no scientific basis because a treating physician is in no better position than any other physician to assess a miner's pulmonary status. The commenters note that a primary care physician will often, as a matter of medical practice, refer an individual to a physician with particular training for specialized care; the primary care provider may therefore have little, if any, qualified understanding of the patient's health problems. The commenters also state that the essential basis for a reasoned diagnosis is valid objective testing and sound interpretation of the data rather than patient complaints and physical examinations. Finally, the commenters conclude that frequency of contact alone does not provide any advantage for a physician in developing a comprehensive understanding of the patient's condition. The commenters' concerns do not provide a basis for abandoning the rule. First, the miner's “treating physician” is not necessarily the physician with whom the miner has a long-standing generalized relationship if another physician actually provides specialized treatment for respiratory or pulmonary problems. If the miner's primary care provider refers the miner to a pulmonary specialist for treatment, then that specialist may be considered the miner's “treating physician” for purposes of his or her pulmonary condition. If, however, the specialist provides an opinion to the primary care physician which forms the basis for the miner's treatment by the latter, the primary care physician's opinion is strengthened by reliance on the specialist's expertise. Second, the Department agrees that valid clinical testing and a reasoned medical report are necessary prerequisites for a credible medical opinion. A treating physician's opinion is subject to the Department's quality standards, which require the report to be based on specific clinical tests, findings and other data and information. See § 718.104(a)(l)-(6). A treating physician's report must be reasoned as well as documented (§ 718.104(d)(5)). In this regard, a treating physician's opinion is no different than any other physician's opinion developed in connection with a claim for benefits. The Department does not intend to displace the long-standing judicial precedent that sanctions the rejection of a treating physician's report if it fails the basic requirements for credible evidence.
(h) Two comments contend the “treating physician” rule creates an “evidentiary preference” which violates section 7 of the Administrative Procedure Act (APA), 5 U.S.C. 556. Although the Social Security Administration (SSA) has also promulgated a regulation, 20 CFR 404.1527(d) (1999), addressing the weight to be given a treating physician's opinion, the commenters argue there is no adverse party in SSA claims, and the APA does not apply to SSA claims adjudication. By implication, the commenters suggest the Department cannot adopt a “treating physician” rule comparable to the SSA model, or any rule which affords special weight to a treating physician's opinion. The Department disagrees. As an initial matter, whether the APA does or does not apply to SSA claims adjudications is irrelevant to evaluating the validity of § 718.104(d). The Supreme Court has expressly refused to resolve the issue because “the social security administrative procedure does not vary from that prescribed by the APA. Indeed, the latter is modeled upon the Social Security Act.”
(i) Three comments oppose the requirement in § 718.104(d)(5) that the adjudicator must weigh a treating physician's opinion against the contrary relevant evidence in the record. One comment states that affording a treating physician's opinion “controlling weight” is meaningless unless the adjudicator may accept the opinion despite a reasoned and documented contrary opinion by a pulmonary specialist submitted by another party; otherwise, according to the commenter, a treating physician's opinion will prevail only when it echoes similar opinions from other physicians. Another comment interprets subsection (d) as a burden-shifting device which affords the treating physician's opinion presumptive controlling weight unless the opposing party overcomes that opinion by a preponderance of the evidence. The Department has previously responded to comments contending that a treating physician's opinion should receive conclusive weight once the adjudicator reviews the opinion in light of the criteria enumerated in subsection (d)(1)-(4). 64 FR 54976 (Oct. 8, 1999). The Department rejected this position because it artificially limits the adjudicator's consideration of the evidence, and may promote a mechanistic and uncritical acceptance of the treating physician's opinion at the expense of more credible contrary evidence. No basis for departing from this position is established by the new comments. The Department emphasizes that the “treating physician” rule guides the adjudicator in determining whether the physician's doctor-patient relationship warrants special consideration of the doctor's conclusions. The rule does not require the adjudicator to defer to those conclusions regardless of the other evidence in the record. The adjudicator must have the latitude to determine which, among the conflicting opinions, presents the most comprehensive and credible assessment of the miner's pulmonary health. For the same reasons, the Department does not consider subsection (d) to be an evidentiary presumption which shifts the burden of production or persuasion to the party opposing entitlement upon the submission of an opinion from a miner's treating physician. Accordingly, the Department declines to eliminate the requirement in subsection (d)(5) that a treating physician's opinion must be considered in light of all relevant evidence in the record.
(j) One comment objects to comparing a treating physician's qualifications to those of any other physician in the record. The commenter suggests comparative qualifications may provide a basis for refusing controlling weight to the treating physician's opinion if another physician has superior credentials. The Department responded to a similar comment in the second notice of proposed rulemaking, and noted that professional credentials are only one factor the adjudicator may consider in weighing medical opinions. 64 FR 54977 (Oct. 8, 1999). No basis exists, however, for insulating the treating physician from a consideration of his or her qualifications, or prohibiting giving additional weight to the opinion of a physician with specialized training in a relevant area of medicine. Although expertise is only one of several potentially relevant factors to consider, it is nonetheless a significant consideration.
(k) One comment suggests a consultative physician's opinion should receive the same weight accorded a treating physician if the consultant relies on the treating physician's report, the results of clinical tests, medical records, etc., and the consulting report satisfies the § 718.104(d) criteria. The Department rejects this suggestion. If any physician (other than the treating physician) could receive enhanced weight by incorporating consideration of the treating physician's opinion into his or her consulting opinion, the consultative physician(s) for each party would stand on equal footing based on access to the treating physician's report. No reason would therefore exist for the rule. In any event, a consultative physician's reliance on the treating physician's report does not necessarily confer the same benefit the treating physician may derive from the nature, duration, frequency and extent of treatment during the physician-patient relationship with the miner.
(l) Two comments oppose making the quality standards applicable to the report of physical examination prepared by a miner's treating physician. The commenters suggest removing subsection (d) from § 718.104 and making it a separate regulation. The Department rejected the identical
(m) Two comments recommend allowing a miner or a miner's family members to attest to the nature of the miner's relationship with his or her treating physician. The Department disagrees. Although persons other than the physician may have some direct knowledge of the miner's treatment, only the physician can provide a complete picture of the doctor-patient relationship, as well as documentary evidence of the specific clinical tests conducted. In addition, if representations as to the criteria in (d)(1) through (4) are challenged, it is the physician's records, including treatment notes, etc., which will enable the adjudicator to evaluate the quality of the relationship. Evidence from persons other than the physician may supplement the physician's characterization of the miner's treatment, but the physician (or the physician's records) remains the best primary source for depicting the miner's treatment.
(n) In the second notice of proposed rulemaking, the Department invited comment on alternatives to the revised “treating physician” rule, including whether to adopt a version of the rule comparable to the Social Security Administration's (SSA) regulation, 20 CFR 404.1527(d) (1999). 64 FR 54976 (Oct. 8, 1999). (i) Two comments oppose in general terms using the SSA regulation to evaluate the treating physician's opinion. (ii) One comment recommends incorporating language from the SSA regulation that more weight should “generally” be given a miner's treating physician.
(o) Several comments approve generally of the “treating physician” rule.
(p) No other comments were received concerning this section, and no other changes have been made in it.
(a)(i) In the initial notice of proposed rulemaking, the Department proposed amending § 718.105 to address arterial blood gas studies which are administered during a miner's terminal hospitalization,
(b) One comment recommends the Department afford consideration to noncomplying blood gas studies in the case of a deceased miner since such consideration is given elsewhere in the regulations for x-rays (§ 718.102(e)) and pulmonary function studies (§ 718.103(c)). The regulations also outline specific circumstances under which a report of physical examination of a miner now deceased may be considered by an adjudication officer notwithstanding its failure to substantially comply with § 718.104(a) and (b).
(c) Two comments oppose requiring the claimant to prove a miner's chronic respiratory or pulmonary impairment caused his qualifying “deathbed” blood gas results. The commenters argue that the party opposing entitlement should bear the burden of proving a non-respiratory or non-pulmonary condition caused the qualifying results since that party has equal access to the miner's hospital records and physicians. The Department disagrees. The claimant bears the general burden of persuasion to establish entitlement to benefits by a preponderance of the evidence, except to the extent a presumption eases that burden.
(d) No other comments were received concerning this section, and no other changes have been made in it.
(a) The Department proposed minor changes to § 718.106 in the initial notice of proposed rulemaking to account for the adoption of a general standard of substantial compliance with the quality standards (§ 718.101), and to adopt consistent terminology for evidence which is not in substantial compliance with the applicable standard. 62 FR 3343 (Jan. 22, 1997). The Department responded to several comments in the second notice of proposed rulemaking. 64 FR 54978 (Oct. 8, 1999). At the urging of several commenters, the Department restored subsection (c) to § 718.106, explaining that the omission of that provision from the initial proposed version of the regulation was inadvertent. Other comments expressed concern that the requirement for a gross macroscopic inspection of the lungs would preclude reliance on reviewing physicians, who ordinarily review only the autopsy protocol and inspect tissue samples microscopically. The Department responded that only the autopsy itself must include the gross macroscopic inspection of the lungs; the requirement does not extend to opinions prepared by reviewing physicians. Finally, the Department rejected the recommendation of some commenters to adopt the standards for diagnosing pneumoconiosis by autopsy or biopsy set forth in Kleinerman
(b)(i) One comment again recommends adopting the criteria for diagnosing pneumoconiosis by autopsy or biopsy contained in the Kleinerman article as the “accepted” pathologic standard. The Department has previously noted that the record does not substantiate the existence of a consensus among physicians for making diagnoses using these criteria, or the acceptance of the Kleinerman article as representative of the medical community's views. 64 FR 54978 (Oct. 8, 1999). Indeed, two other commenters commend the Department for refusing to accept these criteria, noting that other pathologists do not agree that this article represents a universal or prevailing standard. One commenter suggests, for example, that Dr. Kleinerman's view that a two-centimeter lesion on autopsy or biopsy is necessary for a diagnosis of complicated pneumoconiosis is not universally accepted, and that other pathologists would require only a one-centimeter lesion. The commenter urging adoption of the Kleinerman criteria does not supply any additional information in support of its recommendation. The Department therefore has no basis in the record for adopting the suggested standard. (ii) One comment cites
(c)(i) Three comments approve of the restored paragraph (c). (ii) Two comments approve of the Department's clarification in the second notice of proposed rulemaking that the § 718.106(a) requirement for a gross macroscopic inspection of the lungs applies only to the autopsy itself and not to a reviewing physician's opinion. 64 FR 54978 (Oct. 8, 1999).
(d) No other comments were received concerning this section, and no other changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed a clarification of § 718.107 which addresses medical evidence not otherwise covered by the quality standards. 62 FR 3343 (Jan. 22, 1997). Proposed subsection (b) required the party submitting such evidence to establish that the evidence is medically acceptable and relevant to proving the existence or nonexistence of pneumoconiosis, the sequelae of pneumoconiosis or a “respiratory impairment.” The Department responded to comments received from the public in the second notice of proposed rulemaking. 64 FR 54978 (Oct. 8, 1999). The Department changed the reference in subsection (a) from “respiratory impairment” to “respiratory or pulmonary impairment.” The Department rejected as unnecessary a recommendation that disability and disability causation should be added to the relevant issues because the regulation adequately stated the purposes for which “other medical evidence” could be submitted. One comment approved of § 718.107 as proposed in the initial notice of proposed rulemaking.
(b) For purposes of the final rule, the Department emphasizes that § 718.107 as a whole is intended to permit any party to offer any medical test or procedure which may be relevant to any disputed medical issue relating to a claimant's entitlement to benefits provided the requirements of subsection (b) are met.
(c) No other comments were received concerning this section, and no other changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed amending § 718.201. 62 FR 3343-44, 3376 (Jan. 22, 1997). The amendments were designed to clarify the regulatory definition and conform it to the statute, which broadly defines pneumoconiosis as “a chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments, arising out of coal mine employment.” 30 U.S.C. 902(b). To that end, the Department proposed three revisions.
First, the Department inserted the terms “clinical” and “legal” pneumoconiosis into the regulation to conform it to the terminology uniformly adopted by the courts to distinguish between the two forms of lung disease compensable under the statute: pneumoconiosis, as that disease is defined by the medical community, and any chronic lung disease arising out of coal mine employment. Second, the Department proposed revising the definition to make clear that both restrictive and obstructive lung disease may fall within the definition of pneumoconiosis if shown to have arisen from coal mine employment. Third, the Department proposed a revision to recognize the latent and progressive nature of the disease. The last two changes, for which the Department cited scientific evidence in support, 62 FR 3343-44 (Jan. 22, 1997), were proposed as a result of recent litigation on these issues. The Department specifically sought comments on these revisions.
The Department received numerous favorable and unfavorable comments and testimony on the proposals. 64 FR 54978-79 (Oct. 8, 1999). One commenter objected to the revised definition because it would include all obstructive pulmonary diseases. A number of commenters complained that the Department lacked the statutory authority to implement the proposals, and that the Department had violated the statute by failing to consult with the National Institute for Occupational Safety and Health (NIOSH) before proposing the changes. 30 U.S.C. 902(f)(1)(D). Several commenters also argued that the Department's proposed definition was scientifically unsound, and presented testimony from a panel of pulmonary physicians at the Department's July 22, 1997 hearing in Washington, D.C., to substantiate their views. Two commenters contended that because Congress had rejected an amendment to the statutory definition of pneumoconiosis which would have included obstructive lung disorders, the Department could not accomplish the same change through regulation. The Department also received numerous comments in support of the revised definition. Among the favorable comments was one from NIOSH, transmitted by letter dated August 20, 1997 and signed by Dr. Paul A. Schulte, Director of NIOSH's Education and Information Division. Rulemaking Record, Exhibit 5-173. NIOSH supported the Department's proposal to amend the definition to include chronic obstructive pulmonary disease and to reflect the scientific evidence that pneumoconiosis is a progressive condition that may become detectable only after cessation of coal mine employment in some cases. The Department also received favorable comments and testimony from physicians with expertise in pulmonary diseases.
Given the widely divergent comments and testimony received from medical professionals on the proposed regulation, the Department sought additional guidance from NIOSH, notwithstanding the fact that NIOSH had already commented in support of the initial proposal. The Department transmitted a copy of all of the testimony and commentary it had received to Dr. Linda Rosenstock, the Director of NIOSH, and asked NIOSH to determine, in light of the then existing record, whether NIOSH continued to support the Department's proposal. Rulemaking Record, Exhibit 66. NIOSH responded, in a December 7, 1998 letter from Dr. Schulte, that “[t]he unfavorable comments received by DOL do not alter our previous position: NIOSH scientific analysis supports the proposed definitional changes.” Dr. Schulte provided additional medical references to support NIOSH's conclusion. Rulemaking Record, Exhibit 72.
The Department responded to the comments it had received in its second notice of proposed rulemaking. 64 FR 54978-79 (Oct. 8, 1999). The Department emphasized that the proposed revision was designed to make clear that obstructive lung disease may fall within the definition of pneumoconiosis, but only if it is shown to have arisen from coal mine employment; thus, the proposed definition would not alter the former regulations' (20 CFR 718.202(a)(4), 718.203 (1999)) requirement that each miner bear the burden of proving that his lung disease arose out of his coal mine employment. The Department also notified the public of NIOSH's December 7, 1998 response, including the additional evidence NIOSH cited. 64 FR 54978-79 (Oct. 8, 1999). Recognizing that Congress created NIOSH as a source of expertise in occupational disease and the analysis of occupational disease research, the Department concluded it saw no scientific or legal basis upon which to alter its proposed change to the definition of pneumoconiosis. The Department further stated its disagreement that Congressional inaction invalidated its proposed revision of the definition since it was acting within the scope of Congress' grant of regulatory authority. Accordingly, the Department proposed no additional changes to this regulation in the second notice of proposed rulemaking. 64 FR 55012-13 (Oct. 8, 1999). The Department has now amended subsection (a)(1) by deleting a comma for grammatical reasons.
(b) The Department has again received both favorable and unfavorable comments on its proposed revision to the definition of pneumoconiosis. To the extent these comments are directed specifically to the Department's proposal to define pneumoconiosis as a latent and progressive disease, the Department's response is set forth in the preamble under § 725.309. The Department responds here to the remainder of the relevant comments, including those addressing the Department's proposal to include obstructive lung diseases arising out of coal mine employment within the definition of pneumoconiosis. Where a scientific article or treatise is cited, the Department has also cited to a Rulemaking Record Exhibit or, when appropriate, the
(c) One comment objects to the Department's inclusion of the term “legal pneumoconiosis” in the revised definition because there is no such “phenomenon.” Another comment expresses the concern that the revised regulation would create a new medical diagnosis. The statute defines pneumoconiosis as “a chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments, arising out of coal mine employment.” 30 U.S.C. 902(b). This broad definition encompasses not only coal workers' pneumoconiosis as that disease is contemplated by the medical community, but also any other chronic lung disease demonstrably related to coal mine employment but not typically denominated as pneumoconiosis in medical circles. Thus, the Department is making a legal distinction, rather than a medical one, by employing the phrase “legal pneumoconiosis” in order to
(d) Several comments express concern over including obstructive pulmonary diseases in the definition of pneumoconiosis, believing such change will result in compensating miners for diseases caused by factors unrelated to coal mine employment. Whether coal mine dust exposure can cause chronic obstructive pulmonary disease is a question of medical and scientific fact that will not vary from case to case; thus, it is an appropriate question for the Department to answer by regulation.
(e) Several comments criticize the Department's consultation with NIOSH. Calling the Department's solicitation of an opinion from NIOSH on the relevant medical questions a “post-hoc attempt to rationalize the validity of its medical conclusions” and a “purely political act,” one commenter states that Dr. Shulte's letter cannot substitute for “genuine scientific review.” Other commenters allege that NIOSH presented no serious medical or scientific analysis to support its position. To the extent these comments accuse the Department of obtaining assistance from NIOSH's information officer rather than its scientific staff, the Department's response is set forth in the preamble under § 725.309. NIOSH voluntarily submitted its first statement in support of the proposed revision to the definition of pneumoconiosis during the public comment period for the initial rulemaking proceeding. The Department then actively solicited an additional opinion from NIOSH in response to other comments the Department had received requesting such consultation and not, as the commenter suggests, to provide “post-hoc” rationalization for the proposed revisions to the regulation. NIOSH responded, and the Department set forth the substance of the response in the second notice of proposed rulemaking. 64 FR 54978-79. In response to the second notice, NIOSH once again submitted an unsolicited comment during the public comment period reaffirming its earlier statements that it had reviewed the proposed rule and supported it. Thus, NIOSH has supported the Department's proposal from the outset. Further, in each of its communications, NIOSH repeatedly provided concrete support for its comments by referencing appropriate studies and its own publication, National Institute for Occupational Safety and Health,
(f) Various comments state, without specificity, that the Department's proposed revisions to the definition of pneumoconiosis lack valid scientific or medical support. Other comments attack the scientific basis of the conclusions that the Department and NIOSH have drawn from the evidence of record. In support, these commenters have submitted an analysis of some of the available medical literature from Dr. Gregory Fino, a Board-certified physician in Pulmonary Diseases, and Dr. Barbara Bahl, who has a doctorate in nursing and biostatistics. Their review of the literature regarding obstructive lung disease and pulmonary dysfunction in coal miners led them to conclude that virtually all of the articles they reviewed are flawed, and that there is no evidence of a clinically significant reduction in lung function resulting from coal mine dust exposure. (Rulemaking Record, Exhibit 89-37, Appendix C). They elaborate:
There are a number of statements that can and cannot be said about obstruction in coal miners. Some of the articles discussed in Table 1 above do demonstrate a reduction in the FEV1 in highly selected cohorts of miners. Because of selection bias, the results cannot be applied to all miners in general. Since the reductions in the FEV1 are averages, it is statistically impossible to state whether a given miner would have FEV1 reductions greater than or less than the stated amount. The articles do not say and do not show that coal mine dust inhalation causes a clinically significant reduction in the FEV1. Just because a statistically significant reduction was encountered in the selected cohorts, there is no evidence at all that the reductions would participate in any respiratory impairment or disability.
While there is no doubt that some miners do have clinically significant obstruction as a result of coal mine dust inhalation, it occurs in cases of severe fibrosis where a combined obstructive and restrictive defect is present. However, there is no evidence that there is a clinically significant reduction in the FEV1 as a result of chronic obstructive lung disease due to coal mine dust inhalation. None of the studies show that. None of the studies can be generalized to the average coal miner. Moreover, statistical significance neither implies nor infers clinical significance. As the above studies demonstrate, statistical significance has created many numbers that are not applicable to the evaluation of coal miners. The conclusions reached by Morgan (1, 24, 35) and published over two decades [ago] still hold true: coal mine dust may cause slight, clinically insignificant decreases in the FEV1 in some miners. There is no evidence that these decreases cause or contribute to pulmonary disability and no support for the assumption in the Department's regulation that coal dust causes or contributed to any miner's obstructive lung disease.
Rulemaking Record, Exhibit 89-37, Appendix C at 24-25. In a separate review of literature relating to emphysema in particular, Drs. Fino and Bahl conclude that “[t]he amount of emphysema in the lungs of miners increases with the severity of simple coal workers' pneumoconiosis.” This increase in severity as shown by chest
The Department has reviewed all of the medical and scientific evidence referenced in the rulemaking record, and does not agree that the record lacks valid support for the proposition that coal mine dust exposure can cause obstructive pulmonary disease. The Department's position is fully supported by NIOSH, the statutory advisor to the black lung benefits program, which responded favorably to the Department's proposed revisions. Rulemaking Record, Exhibits 5-173, 72, 89-26. The considerable body of literature documenting coal mine dust exposure's causal effect on the development of chronic bronchitis, emphysema and associated airways obstruction constitutes a clear and substantial basis for this aspect of the revised definition of pneumoconiosis.
The term “chronic obstructive pulmonary disease” (COPD) includes three disease processes characterized by airway dysfunction: chronic bronchitis, emphysema and asthma. Airflow limitation and shortness of breath are features of COPD, and lung function testing is used to establish its presence. Clinical studies, pathological findings, and scientific evidence regarding the cellular mechanisms of lung injury link, in a substantial way, coal mine dust exposure to pulmonary impairment and chronic obstructive lung disease. In discharging its congressionally-mandated duty to recommend a permissible exposure limit for coal mine dust, NIOSH conducted a comprehensive review of the available medical and scientific evidence addressing the impact of coal mine dust exposure on coal miners. It published its findings in National Institute for Occupational Safety and Health,
Drs. Fino and Bahl disagree, but the Department believes that their opinions are not in accord with the prevailing view of the medical community or the substantial weight of the medical and scientific literature. For example, Seaton, in “Coal Workers' Pneumoconiosis,” in Morgan WKC, Seaton A, eds.,
Lung function, measured as the forced expiratory volume in 1 second (FEV1) has been shown both in cross-sectional and longitudinal studies to decline in relation to increasing underground dust exposure but not in relation to estimates of exposure to oxides of nitrogen. This decline occurs at a similar rate in smokers and nonsmokers, although the loss of lung function overall is greater in smokers, the two effects being additive.
Similarly, Becklake, in “Pneumoconiosis,” in Murray J, Nadel J, eds.,
Most evidence to date indicates that exposure to coal mine dust can cause chronic airflow limitation in life and emphysema at autopsy, and this may occur independently of CWP * * * The relationships between hypersecretion of mucus (chronic bronchitis) and chronic airflow limitation (emphysema) on the one hand and environmental factor of coal mining exposure on the other appear to be similar to those found for cigarette smoking.
Oxman and colleagues analyzed the available literature assessing the relationship between occupational dust exposures and COPD in 1993. Oxman AD, Muir DCF, Shannon HS, Stock SR, Hnizdo E, Lange HJ, “Occupational dust exposure and chronic obstructive pulmonary disease: A systematic overview of the evidence,” Am Rev Resp Dis, 148:38-48 (1993); see also Rulemaking Record, Exhibit 5-174, Appendix 8. Reports were analyzed for methodological criteria including dust exposure, control for smoking, exclusion of confounding pulmonary conditions, referral bias, and adequate follow-up. Thirteen reports that met their rigorous screening criteria were analyzed. They concluded that all of the studies found a statistically significant association between cumulative dust exposure and decline in lung function, and that coal mine dust can be a cause of chronic bronchitis. Unlike Drs. Fino and Bahl, the Oxman analysis concluded there was also a clinically significant loss of lung function in smokers and nonsmokers.
Drs. Fino and Bahl state that all of the studies identifying a decline in lung function “are flawed because of selection bias. The results are not generalizable to the general population of miners.” Rulemaking Record, Exhibit 89-37, Appendix C at 21. As recognized by many of the authors of these studies, the results are susceptible to a selection bias caused by miners leaving the industry between the time of initial pulmonary function measurement and those taken later during the follow-up period. Because of the “healthy worker effect,” it would be expected that workers more prone to the respiratory impairments caused by coal mine dust inhalation would leave mining and the healthier workers would continue working. Oxman concluded that “[a]lthough it is impossible to estimate precisely the magnitude of this bias,” its direction “is towards underestimating the association between dust and loss of lung function, or failure to recognize a more susceptible subgroup of workers.” Oxman at 46. Thus, this selection bias actually
Drs. Fino and Bahl conclude that any minimal obstruction resulting from coal mine dust exposure is not clinically significant. Marine's cross-sectional 1988 study of coal miners, however, found clinically significant decreases in pulmonary function in both smokers and nonsmokers. Marine WM, Gurr D, Jacobsen M, “Clinically important respiratory effects of dust exposure and smoking in British coal miners,” Am Rev Resp Dis, 137:106-112 (1988);
As can be seen from this table, the incidence of nonsmoking coal miners with intermediate dust exposure developing moderate obstruction (FEV1 of less than 80%) is roughly equal to the incidence of moderate obstruction in smokers with no mining exposure (15.5% v. 17.1%). Similarly, the incidence of non-smoking miners with intermediate exposure developing severe airways obstruction (FEV1 of less than 65%) is equal to the incidence of severe obstruction in non-mining smokers (5.0% for both groups). Nonsmokers with high exposure are at greater risk for developing moderate or severe obstruction than unexposed smokers. Smokers who mine have additive risk for developing significant obstruction. The risk of chronic bronchitis clearly increases with increasing dust exposure; again smokers who mine have an additive risk of developing chronic bronchitis. The message from the Marine study is unequivocal: Even in the absence of smoking, coal mine dust exposure is clearly associated with clinically significant airways obstruction and chronic bronchitis. The risk is additive with cigarette smoking.
Drs. Fino and Bahl criticize the Marine study because it used the mean of each miner's three FEV1 values rather than the highest. Rulemaking Record, Exhibit 89-37, Appendix C at 17, 21. This, however, does not appear to be a significant problem given that a number of other studies which used the highest FEV1 value for analysis also showed the same adverse relationship between coal dust inhalation and pulmonary impairment. One such study was reported by Attfield and Hodous in 1992. Attfield MD, Hodous TK, “Pulmonary function of U.S. coal miners related to dust exposure estimates,” Am Rev Respir Dis 145:605-609 (1992);
Drs. Fino and Bahl (Rulemaking Record, Exhibit 89-37, Appendix C at 22), as well as other commenters, criticize this study and similar ones that are based on exposures prior to 1970, when federally-mandated dust control standards were implemented, on the grounds of selection bias. Their theory is that only those miners who worked in a dust-controlled environment are representative of the current adverse effects of coal mine dust exposure. This theory is flawed. While lower dust exposure should reduce both the occurrence and the severity of lung disease, the
In any event, analysis of data from miners who worked only in dust-controlled conditions confirm the connection between coal mine dust exposure and obstructive lung disease. Seixas and colleagues considered a group of 1,185 miners who began working in 1970 or later. Seixas NS, Robins TG, Attfield MD, Moulton LH, “Exposure-response relationships for coal mine dust and obstructive lung disease following enactment of the Federal Coal Mine Health and Safety Act of 1969,” Am J Ind Med 21:715-732 (1992);
Longitudinal studies have confirmed these results.
Drs. Fino and Bahl contend, however, that the average decline shown in these studies, while perhaps statistically
Pointing to Coggon and Newman Taylor's statement that “some scientists have expressed doubts as to whether coal mine dust can cause clinically important loss of lung function,” Coggon D, Newman Taylor A, “Coal mining and chronic obstructive pulmonary disease: A review of the evidence,” Thorax 53:398-407 (1998);
Reductions in lung function have been found in relation to coal mining with remarkable consistency. * * * Individually, all of the studies that have addressed the relation of coal mining to lung function have limitations, but these vary from one investigation to another and often would tend to obscure rather than exaggerate any effect of dust. The balance of evidence points overwhelmingly to impairment of lung function from coal mine dust exposure.
Coggon, Thorax 53:405. Coggon and Newman Taylor further concluded that: Coal mine dust inhalation can be disabling, and arguments against this thesis are “unconvincing'; and “the combined effects of coal mine dust and smoking on FEV1 appear to be additive.” Coggon, Thorax 53:405-406. Thus, this study supports the Department's position.
Similarly, several of the medical treatises and studies cited by another commenter in support of its contention that there is no such causal link between coal mine dust exposure and obstructive lung disease do not negate (and, in fact, support) the conclusion the Department and NIOSH have reached.
Drs. Fino and Bahl find no scientific support that clinically significant emphysema exists in coal miners without progressive massive fibrosis, Rulemaking Record, Exhibit 89-37, Appendix C at 31, but the available pathologic evidence is to the contrary. Cockcroft evaluated 39 coal workers and 48 non-coal worker controls dying of cardiac causes in 1979. Cockcroft A, Wagner JC, Ryder R, Seal RME, Lyons JP, Andersson N, “Post-mortem study of emphysema in coalworkers and non-coalworkers,” Lancet 2:600-603 (1982);
Similarly, Leigh and colleagues analyzed 886 miners who died between 1949 and 1982. Leigh J, Outhred KG, McKenzie HI, Glick M, Wiles AN,
Ruckley and colleagues achieved similar results in examining the lungs of 450 coal workers to determine the association between coal mine dust exposure and dust-related fibrosis and emphysema. Ruckley VA, Gauld SJ, Chapman JS,
Drs. Fino and Bahl point to several other sources in support of their view that clinically significant emphysema is not related to coal dust exposure in the absence of PMF. They quote Morgan's textbook,
The increased risk of centriacinar emphysema in PMF cases away from the lesion, and, in simple pneumoconiosis, in relation to dust exposure supports the hypothesis that coal dust exposure sufficient to cause alveolar inflammation and fibrosis also initiates centriacinar emphysema. This seems a likely explanation for the consistent epidemiologic finding of decrements in FEV1 and FVC and a rise in residual volume in relation to the indices of dust exposure in coal miners.
The Department's proposed revision to the definition of pneumoconiosis is also supported by the growing evidence of the adverse affects of coal mine dust exposure at the cellular level leading to obstructive lung disease.
Reactive oxygen substances have been shown to damage anti-proteases in the lung. Anti-proteases are enzymes that protect the lung from proteases and elastases that are released during an inflammatory reaction (such as that produced by inhalation of coal mine dust). Without this protection, the proteases and elastases can destroy the elastin and collagen that comprise the structure of the lung, resulting in
Animal and human studies have also shown that coal mine dust inhalation can recruit neutrophils, another inflammatory cell, into the lung. Rom WN (1990). Activated neutrophils produce elastase as well as other inflammatory mediators. The recruitment of neutrophils and the activation of alveolar macrophages is greater in nonsmoking coal miners with pulmonary impairment than either non-miners or nonsmoking miners without pulmonary impairment. This suggests that a combination of coal mine dust exposure and host susceptibility may be required to produce disease. Thus, although many of the studies evaluating mechanisms of pathogenesis of coal mine dust exposure concentrate on the development of fibrosis, there is considerable basic scientific data linking coal mine dust to the development of obstructive airways disease.
Moreover, cytokines, which are chemical substances released from a number of cells in the lung, have been implicated in the development of lung disease in coal miners.
One commenter repeatedly accuses the Department of not supporting its definitional change with “peer-reviewed” scientific and medical studies, but does not point to any study or article in particular. The Department rejects this assertion. Each of the articles and studies cited above, as well as the majority relied upon by NIOSH in the Criteria document, appeared in a peer-reviewed journal: American Review of Respiratory Disease, American Journal of Industrial Medicine, Thorax, Journal of Occupational Medicine, Lancet, British Journal of Industrial Medicine, Occupational Environmental Medicine, Environmental Research, and others. The textbooks relied upon are authored and edited by highly respected professionals in the field. Textbook editors serve as peer-reviewers of the relevant published literature because they comprehensively survey, evaluate the validity of, and comment on, the literature. Seaton's review in Morgan and Seaton's
It bears repeating that in developing its recommended dust exposure standard, NIOSH carefully reviewed the available evidence on lung disease in coal miners. NIOSH also considered the strength of the evidence, including the sampling and statistical analysis techniques used,
In addition to the risk of simple CWP and PMF, epidemiological studies have shown that coal miners have an increased risk of developing COPD. COPD may be detected from decrements in certain measures of lung function, especially FEV1 and the ratio of FEV1/FVC. Decrements in lung function associated with exposure to coal mine dust are severe enough to be disabling in some miners, whether or not pneumoconiosis is also present. A severe or disabling decrement in lung function is defined here as an FEV1 <65% of expected normal values; an impairment in lung function is defined as an FEV1 <80% of predicted normal values. An exposure-response relationship between respirable coal mine dust exposure and decrements in lung function has been observed in cross-sectional studies and confirmed in longitudinal studies.
Finally, the Department's position is consistent with the growing body of case law recognizing that obstructive lung diseases can arise from coal mine dust exposure.
Contrary to the commenters' argument, then, the record does contain overwhelming scientific and medical evidence demonstrating that coal mine dust exposure can cause obstructive lung disease. The Department therefore declines to change the definition of pneumoconiosis as proposed.
(g) One comment suggests that the Department delete the term “anthracosis” from the definition of pneumoconiosis, contending that it is a term commonly used to denote anthracotic pigmentation, without associated disease process, on biopsy or autopsy of the lungs. The Department has accommodated this concern in the proposed revisions to § 718.202(a)(2). The revised version of § 718.202(a)(2) explicitly provides that “[a] finding in an autopsy or biopsy of anthracotic pigmentation * * * shall not be sufficient, by itself, to establish the existence of pneumoconiosis.” 64 FR 55013 (Oct. 8, 1999). Thus, the Department does not believe that a change to the definition of pneumoconiosis is necessary.
(h) Several comments suggest that the Department appoint an expert panel to review the scientific and medical evidence on the obstructive disease, latency and progressivity proposed revisions to the regulation. The Department declines to follow this suggestion. As set forth above, the relevant scientific and medical information available on these topics has been thoroughly reviewed by highly-qualified experts, including NIOSH, the advisor designated by Congress to consult with the Department in developing criteria for total disability due to pneumoconiosis under the Black Lung Benefits Act. 30 U.S.C. 902(f)(1)(D). Accordingly, to the extent these commenters note that “since coal-workers” pneumoconiosis is a medical condition, * * * this determination [establishing a proper definition of pneumoconiosis] should be left to the medical experts,” the comment ignores both the statutory definition of pneumoconiosis and the large body of scientific evidence already reviewed by medical experts, as outlined above.
(i) One comment criticizes the Department for not considering two major sources of information regarding U.S. coal miners: the National Coal Study, which the commenter states has provided a wealth of longitudinal information about the health of miners, and the NIOSH X-ray Surveillance Program. The commenter is incorrect. The information from both of these programs is a major focus of NIOSH's
(j) One comment generally objects to the proposed revisions and urges the Department to collect data developed by the Universities of Kentucky and Louisville since the 1996 comprehensive reform of the Kentucky state workers' compensation law, a program the commenter states is based on objective medical findings of “certified B readers.” The commenter believes that this data would more accurately reflect modern day dust control in coal mining than the studies relied upon by the Department. As discussed above, the Department's conclusions are fully supported by the ample data it has already reviewed, including data generated from time periods post-dating implementation of federally-mandated dust control measures. Moreover, the Department does not believe this information would be particularly relevant to the proposed revisions of the definition of pneumoconiosis. A “certified B reader” is a physician proved by examination to be proficient in assessing the quality of chest X-rays and in using the ILO-U/C system to classify X-rays for pneumoconiosis. 20 CFR 718.202(a)(1)(ii)(E) (1999). While this information may show the incidence of clinical pneumoconiosis in a given population of coal miners, it is not particularly relevant to the other subset of diseases compensable under the Black Lung Benefits Act, namely, any chronic lung disease arising out of coal mine employment.
(k) Another comment implies that the proposed definitional changes adopt arbitrary medical “presumptions” without consultation with any pulmonary experts. As discussed above, all of the scientific and medical evidence upon which the Department relies has been thoroughly reviewed and evaluated by experts in the field. It is not the Department's intent to create a “presumption” with the proposed revisions to the definition. Instead, the revisions are designed to define pneumoconiosis in accordance with the best science currently available to the Department while leaving with the miner the burden of persuading the factfinder that he has a lung disease falling within this definition.
(l) Two comments note that the proposed definition (at least insofar as it recognizes that both obstructive and restrictive lung disease may be caused by exposure to coal mine dust) was rejected by Congress and should not be adopted. The Department has already responded to this criticism. 64 FR 54972 (Oct. 8, 1999). No further discussion is necessary.
(m) Two comments, while supporting the proposed changes, ask the Department to amend the regulation further by requiring factfinders to categorically reject as non-conforming any physician's opinion stating either that coal dust cannot cause, or causes only trivial, obstructive lung impairments, or that coal dust-induced lung diseases cannot manifest themselves after a miner's exposure to coal mine dust ceases. The commenters state that such a change would forestall parties opposing miners' entitlement from needlessly prolonging litigation. A physician's opinion based on a premise fundamentally at odds with the statute and regulations is flawed, and the factfinder must weigh that physician's opinion accordingly.
(n) Several comments support the proposal, noting that the revisions to the
(o) Two comments urge the Department to join the lawsuit filed by the Department of Justice to recover money from the tobacco industry for costs incurred by the black lung program for compensating and treating smoking-related disabilities. The comment is not directed to any regulatory proposal, and no response is warranted.
(p) No other comments were received concerning this section, and no further changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed changing § 718.202 only to the extent of clarifying that a diagnosis of anthracotic pigment by biopsy, standing alone, is not equivalent to a diagnosis of pneumoconiosis. Former § 718.202(a)(2) imposed this limitation with respect to autopsy evidence only, and the Department noted there was no reason to treat the two types of evidence differently. 62 FR 3345, 3376 (Jan. 22, 1997). The Department did not propose any further changes to § 718.202 in the second notice of proposed rulemaking, although the regulation remained open for comment. 64 FR 54971 (Oct. 8, 1999).
(b) One comment supports the Department's proposed change as consistent with mainstream scientific findings. Several other comments support this change, but also advocate adopting the criteria for diagnosing pneumoconiosis by autopsy or biopsy developed by the American College of Pathologists and Public Health Service. For the reasons set out in the preamble to § 718.106, the Department cannot make this change.
(c) Two comments urge the inclusion of language stating that a negative chest x-ray cannot form the basis of a physician's reasoned finding of no pneumoconiosis as the disease is defined in the statute and regulations. The suggested addition is unnecessary for several reasons. The Black Lung Benefits Act already prohibits the denial of a claim solely on the basis of a negative x-ray. 30 U.S.C. 923(b). A physician's opinion ruling out the presence of the disease based solely on a negative x-ray would be similarly insufficient; such an opinion would amount to no more than a repetition of the x-ray findings.
(d) One comment would limit relevant radiological qualifications to board-certification in radiology and certification as a B-reader. Although these two qualifications may encompass most physicians' expert training, a rigid rule prohibiting consideration of any other aspect of a physician's background is undesirable. The adjudicator should consider any relevant factor in assessing a physician's credibility, and each party may prove or refute the relevance of that factor.
(e)(i) Three comments favor language recognizing that CT scans are not reliable diagnostic tools for evaluating the presence or absence of pneumoconiosis because no standardized criteria exist for interpreting them. Another comment, however, argues that a negative CT scan effectively precludes a diagnosis of pneumoconiosis because of its level of clinical sophistication. General language accepting or rejecting the use of CT scans is not necessary. The Department did not propose any such language, or develop the record to ascertain the medical community's views. The comments take diametrically opposite views on the use of these tests, which provides no basis for adopting either view. Furthermore, the Department favors consideration of new and more accurate diagnostic technologies as they become available in the future.
(e) No other comments were received concerning this section, and no changes have been made in it.
(a)(i) The Department proposed several significant changes to § 718.204 in the initial notice of proposed rulemaking. 62 FR 3344-45, 3377-78 (Jan. 22, 1997). One revision clarified that “total disability” does not take into consideration any disabling non-respiratory conditions,
(b) In both the first and second notices of proposed rulemaking, the Department proposed identical language defining total disability due to pneumoconiosis. 62 FR 3345, 3377; 64 FR 54979-54980, 55014. The Department explained its authority to define this statutory element of entitlement and proposed using a substantially contributing cause standard. Thus, a miner would be found totally disabled due to pneumoconiosis if he establishes that his pneumoconiosis is a substantially contributing cause of his totally disabling respiratory or pulmonary impairment. In both proposals, the Department explained that this standard was based on court of appeals precedent which had developed since 1989 and varied very little from circuit to circuit.
The Department also proposed that pneumoconiosis be considered a substantially contributing cause of the miner's disability if it either has an adverse effect on the miner's respiratory or pulmonary condition or worsens a totally disabling respiratory or pulmonary impairment caused by a disease or exposure unrelated to coal mine employment. §§ 718.204(c)(1)(i), 718.204(c)(1)(ii). In neither proposal did the Department describe the extent to which pneumoconiosis must have produced an adverse effect or worsened a totally disabling respiratory impairment. The Department did not mean to alter the current law through its proposals, however, or to suggest that
The Department is also mindful, however, that Congress enacted the Act in large part to permit benefit awards to miners whose entitlement under state workers' compensation laws was precluded by burdensome causation requirements.
(c)(i) One comment states the Department has not justified its revision of § 718.204(a) making disabling non-pulmonary/respiratory impairments irrelevant in determining whether a miner is totally disabled under the BLBA. The Department has previously addressed this issue in both the initial and second notices of proposed rulemaking. 62 FR 3344-45 (Jan. 22, 1997); 64 FR 54979 (Oct. 8, 1999). In both instances, the Department cited
* * * [A] review of the cases, the statute, its legislative history, and its interpretation by the benefits review board * * * shows that the statute is intended to confer special benefits on miners who are disabled due to pneumoconiosis whether or not they are disabled from a different cause. Even when other causes are themselves independently disabling ‘[t]he concurrence of two sufficient disabling medical causes one within the ambit of the Act, and the other not, will in no way prevent a miner from claiming benefits under the Act.’
854 F.2d at 1215,
(d) One comment contends the limitations on introducing evidence concerning non-respiratory or pulmonary impairments deprive the “but for” disability causation standard of any practical meaning in terms of proving that pneumoconiosis played little, if any, role in the miner's disability. The Department disagrees with the commenter's position for two reasons. First, the Department has adopted a “substantially contributing cause” standard, which is not the equivalent of a “but for” standard. “Substantially contributing cause” means pneumoconiosis has a material adverse effect on a miner's respiratory or pulmonary condition (§ 718.204(c)(1)(i)). This standard is less rigorous than a “but for” test. Second, only respiratory and pulmonary impairments are relevant to determining whether the miner is totally disabled for purposes of the Black Lung Benefits Act, and identifying the causes of that disability. The commenter's position effectively rests on the Seventh Circuit's interpretation of disability causation in
(e) Three comments oppose the revised definition of “total disability” to the extent it requires proof of a totally disabling respiratory or pulmonary impairment. The commenters urge the Department to adopt a definition which incorporates a “whole person” definition of disability,
Allowance of survivors' claims in such situations is consistent with the legislative history of the 1981 amendments to the BLBA. 62 FR 3345 (Jan. 22, 1997); 48 FR 24276-77 (May 31, 1983), In addition, the determination of whether pneumoconiosis actually hastened death in a given case does not require the types of regulations, procedures and personnel that would be required by a “whole person” disability definition.
(f) One comment opposes the requirement in § 718.204(b)(2)(iv) that a physician's opinion must be documented as well as reasoned in order to establish the existence of a totally disabling respiratory or pulmonary impairment. The commenter states that an opinion should be considered sufficient if it is “reasoned.” The commenter also criticizes the regulation for failing to define the requisite documentation. The commenter does not state a basis for changing the regulation. The most fundamental requirement for any physician's opinion is that it identify the information and data upon which the physician relies in order to form a judgment about the miner's pulmonary condition. Unless the adjudicator is aware of the documentation, (s)he is in no position to determine whether the opinion is “reasoned.” A physician provides a “reasoned” opinion by explaining conclusions in light of factual premises which consist of personal and occupational information about the miner and the results of clinical tests and a physical examination,
(g) One comment challenges the Department's authority to promulgate a disability causation standard. The commenter also contends the Department cannot adopt a causation standard which permits a finding of total disability due to pneumoconiosis if the miner's pneumoconiosis worsens a totally disabling respiratory or pulmonary impairment which is itself unrelated to coal mine employment. § 718.204(c)(1)(ii). The Department rejects both positions. The Department has previously addressed comments contesting its authority to issue a regulation defining disability causation in the second notice of proposed rulemaking. 64 FR 54979-80 (Oct. 8, 1999). The Department cited the explicit rulemaking authority conferred by Congress in 30 U.S.C. 902(f)(1), which makes “total disability” subject to the meaning established by the Department through regulations. The Department also noted that benefits may be paid for total disability “due to pneumoconiosis,” 30 U.S.C. 922(a)(1), but that “due to” is ambiguous and therefore a valid subject for regulatory interpretation. With respect to the “worsening” standard, the Department adopted this definition in response to the Fourth Circuit's decision in
(h) Three comments contend generally that the disability causation standard promotes awards for smoking-induced disability. The Department has previously considered, and rejected, the same contention in the second notice of proposed rulemaking. 64 FR 54980 (Oct. 8, 1999). The BLBA, judicial precedent, and the program regulations do not permit an award based solely on smoking-induced disability. Because the commenters do not state any additional grounds for their contention, no further response is necessary.
(i) One comment suggests the role of smoking in causing disability undermines the regulatory presumptions by negating the validity of their factual premises. Specifically, the commenter argues that the rational connection between established and presumed facts is broken if the miner smoked. The Department disagrees with this analysis. The presumptions contained in §§ 718.302-718.306 are all derived from the BLBA.
(j) One comment urges the Department to join the lawsuit filed by the Department of Justice to recover money from the tobacco industry for benefits approved by the Department based on disability caused by cigarette smoking. The comment is not directed to any regulatory proposal, and no response is warranted.
(k) One comment supports the “substantially contributing cause” standard.
(l) No other comments have been received concerning this section, and no changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed codifying its position, unanimously supported by circuit court precedent, that recognizes a causal relationship between a miner's death and pneumoconiosis if the disease hastened the miner's death. 62 FR 3345-46, 3378 (Jan. 22, 1997). The Department responded to the comments received when it issued the second notice of proposed rulemaking. 64 FR 54980 (Oct. 8, 1999). Several comments urged the Department to reinstate automatic entitlement for survivors of miners who were totally disabled by pneumoconiosis, but did not die from that disease (so-called “unrelated death benefits”); one comment concluded the Department had effectuated that result by adopting the “hastening death” standard in § 718.205(c)(5). The Department rejected the first suggestion because the 1981 amendments to the Black Lung Benefits Act (BLBA) allow benefits in survivors' claims filed after January 1, 1982, only if the miner died due to pneumoconiosis. Similarly, the Department disagreed with the commenter's interpretation of the “hastening death” standard, citing its universal acceptance by the six circuits with jurisdiction over 90 percent of black lung claims litigation. The Department also rejected a recommendation that it make applicable to claims filed after January 1, 1982, a more lenient regulatory standard applicable to claims filed before 1982, since the standard was based on a statutory presumption (30 U.S.C. 921(c)(2)) repealed by Congress in the 1981 amendments. The Department did not propose any further changes to § 718.205 in the second notice of proposed rulemaking, although the regulation remained open for further comment. 64 FR 54971 (Oct. 8, 1999).
(b) One comment opposes the “hastening death” standard because it reinstates survivors' “unrelated death benefits.” The commenter states broadly that any lingering, non-traumatic, death will be affected by every disease process present in the individual. The Department disagrees. The commenter does not cite any medical support for its position, and it does not respond to the Department's explanation rejecting any similarity between the “hastening death” standard and “unrelated death benefits” in the second notice of proposed rulemaking. 64 FR 54980 (Oct. 8, 1999). Moreover, the commenter's premise overlooks the role of the claims adjudication process, which requires the claimant to submit credible medical evidence establishing a detectable hastening of the miner's death on account of pneumoconiosis. The party opposing entitlement has ample opportunity in each survivor's claim to submit evidence proving pneumoconiosis played no role in the miner's death.
(c) One comment argues that at least half of approved survivors' claims are based on deaths attributable to the adverse health effects of smoking. The commenter recommends reallocating the costs of these claims to the tobacco industry. The comment is not directed toward any regulatory proposal, and no response is warranted.
(d) Two comments generally assert the “hastening death” standard cannot be implemented by the Department because the regulation violates the notice and comment provisions of the Administrative Procedure Act (APA), 5 U.S.C. 551
(e) Two comments contend the Department cannot apply § 718.205(c)(5) to pending claims without violating a prohibition on retroactive rulemaking. (i) The Department previously addressed the retroactivity issue in the initial notice of proposed rulemaking. 62 FR 3347-48 (Jan. 22, 1997). The Department acknowledged the Supreme Court's holding in
(f) The Department received written comments and expert hearing testimony from physicians on the role pneumoconiosis may play in a miner's death. (i)
(g) One comment supports the “hastening death” standard.
(h) No other comments have been received concerning this section, and no changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed deleting 20 CFR 718.301(b) (1999), which defined “year” for purposes of calculating the length of a miner's coal mine employment. 62 FR 3346 (Jan. 22, 1997). The Department proposed replacing subsection (b) and a separate provision in 20 CFR 725.493(b) (1999) (defining “year” of coal mine employment for identifying responsible operator) with a single definition of “year” in § 725.101(a)(32). The Department concluded that a single definition with general applicability was appropriate since the calculation of the length of a miner's employment is the same inquiry under both §§ 718.301 and 725.493(b). The Department proposed no additional changes to this regulation in the second notice of
(b) No comments were received concerning this section, and no other changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed moving the content of § 718.307(a) to § 725.103 to establish a regulation of general applicability concerning burdens of proof. 62 FR 3346 (Jan. 22, 1997). The Department also proposed deleting § 718.307(b) because it duplicated proposed § 725.103. The Department did not discuss § 718.307 in its second notice of proposed rulemaking, although the regulation remained open for public comment. 64 FR 54971 (Oct. 8, 1999).
(b) No comments were received concerning this section. It has therefore been removed.
(a) The Department proposed deleting 20 CFR 718.401 (1999) in the initial notice of proposed rulemaking because the provision duplicated material in proposed §§ 725.405 and 725.406. Former § 718.401 addressed each miner's statutory right to a complete pulmonary evaluation at no expense to the miner, a right outlined in proposed § 725.406.
(b) No comments were received concerning this section. It has therefore been removed.
(a) The Department proposed deleting 20 CFR 718.402 (1999) in the initial notice of proposed rulemaking because its content duplicated provisions of proposed § 725.414, which addressed a claimant's unreasonable refusal to cooperate in the medical development of his claim. 62 FR 3346 (Jan. 22, 1997). The Department proposed no additional changes to this regulation in the second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 1999).
(b) No comments were received concerning this section. It has therefore been removed.
(a) The Department proposed deleting 20 CFR 718.403 (1999) in the initial notice of proposed rulemaking and placing its provisions in part 725 as proposed § 725.103. Section 718.403 dealt with a party's burden of proof, and part 725 did not contain a comparable provision of program-wide applicability. 62 FR 3346 (Jan. 22, 1997). The Department proposed no additional changes to this regulation in the second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 1999).
(b) No comments were received concerning this section. It has therefore been removed.
(a) The Department proposed deleting 20 CFR 718.404 (1999) in the initial notice of proposed rulemaking and placing its provisions in part 725 as proposed § 725.203(c) and (d). Former § 718.404(a) addressed a miner's obligation to inform the Department if (s)he returns to coal mine employment; subsection (b) recognized the Department's authority to reopen a miner's final award during his or her lifetime and develop additional evidence if any issue arises concerning the continuing validity of the award. 62 FR 3346 (Jan. 22, 1997). The Department proposed no additional changes to this regulation in the second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 1999).
(b) No comments were received concerning this section. It has therefore been removed.
(a) In the initial notice of proposed rulemaking, the Department proposed eliminating the option of taking an initial inspiration from the open air before commencing the pulmonary function maneuver. 62 FR 3346 (Jan. 22, 1997). The Department noted that open-air inspiration could not be recorded on the spirogram, which precluded any confirmation by a reviewing physician that the miner had taken a full breath. Thus, the test could yield spurious abnormal values. In the second notice of proposed rulemaking, the Department proposed Appendix changes to implement a requirement that physicians use the flow-volume loop in reporting pulmonary function test results. 64 FR 54981 (Oct. 8, 1999). The Department also responded to numerous comments. Some comments considered the requirement that the two highest FEV1 results vary by no more than 5 percent or 100 ml to be overly restrictive, and suggested either eliminating the requirement or liberalizing it to allow a variability limit of 10 percent or 200 ml. The Department was reluctant to eliminate the variation standard completely because it provided a baseline for ensuring the validity of the test. The Department acknowledged, however, that some individuals might be unable to provide pulmonary function results within the 5 percent variance standard. The Department therefore invited comment on alternative criteria which would guarantee reproducibility of the FEV1 and FVC values while permitting consideration of valid FEV1 results exceeding the 5 percent standard. Other comments criticized the disability table values as too stringent. The Department declined to consider any changes to the tables because it did not propose revising them in the initial notice of proposed rulemaking, and the commenters did not provide medical support for any revisions.
(b) Three comments oppose limiting the acceptable variation between the two largest FEV1's of the three acceptable tracings to 5 percent of the largest FEV1 or 100 ml, whichever is greater.
(c) One comment recommends the Department revise the disability tables and adopt the more liberal pulmonary function disability criteria used by the Department of Justice for the Radiation Exposure Compensation Program. Although the Department received comments criticizing the table values as too stringent in response to its initial notice of proposed rulemaking, the Department did not propose any revisions to the tables in the second notice of proposed rulemaking, in part, because the commenters failed to provide any medical support for their recommendation that the tables be modified. 64 FR 54981, 55009 (Oct. 8, 1999). The Department does not consider the present comment to provide a sufficient basis for revision of these disability criteria. It constitutes the only comment the Department has received which included medical evidence suggesting alternate table values. Thus, the Department cannot determine whether the proffered evidence represents a consensus within the medical community about disability as measured by pulmonary function studies. The Department does not have an adequate record upon which to formulate a judgment about the validity of the current tables or the proposed changes. No change in the Appendix B table values is made.
(d) No other comments have been received concerning this section, and no other changes have been made in it.
(a) The Department proposed amending Appendix C in the initial notice of proposed rulemaking to state that arterial blood gas studies should not be administered to a miner during, or soon after, an acute respiratory illness. 62 FR 3346, 3381 (Jan. 22, 1997). In the preamble to § 718.105 in the second notice of proposed rulemaking, the Department stated that one comment had noted the correct nomenclature for partial pressure of oxygen and carbon dioxide is an upper-case “P,” not the lower-case “p” then in use. The Department changed the references in § 718.105(c)(6) in the second proposal, but neglected to change the Appendix C table headings. Those changes have now been made. 64 FR 54971, 54977, 55012, 55017-18 (Oct. 8, 1999).
(b) No other comments were received concerning Appendix C, and no further changes have been made in it.
(a) In its initial notice of proposed rulemaking, the Department proposed removing many of the regulations in 20 CFR Part 722 because they were obsolete. 62 FR 3346-47 (Jan. 22, 1997). Since 1973, Part 722 has set forth a procedure under which any state may request that the Secretary certify that its workers' compensation laws provide “adequate coverage” for occupational pneumoconiosis. Such a certification would prevent any claim for benefits arising in that state from being adjudicated under the Black Lung Benefits Act. 30 U.S.C. 931. In addition, Part 722 has provided a set of specific criteria that states were required to meet in order to obtain the requested certification. Because the Part 722 regulations had not been amended since 1973 although the statute had been amended in both 1978 and 1981, the Department proposed replacing the specific Part 722 criteria with a general statement of the statutory criteria for certification and the statement that in the future, the Department would review the workers' compensation laws of any state that applies for certification in light of the then-current statutory requirements. The Department stated that it would certify adequate coverage only if state law guaranteed at least the same compensation, to the same individuals, as is provided by the Act. The Department did not address Part 722 in its second notice of proposed rulemaking.
(b) The Department has replaced a comma in the second sentence of § 722.3(a) with a semicolon to correct the punctuation of that sentence. In addition, the Department has added the word “relevant” to qualify the phrase “administrative or court decision” in the same sentence. This revision clarifies the Department's intent that states submit only relevant administrative or court decisions.
(c) One comment, in the context of setting forth alternatives for the Department to consider under the Regulatory Flexibility Act, urges the Department to establish specific criteria the Department will use to determine when a state black lung program provides adequate coverage for pneumoconiosis. This revision, the commenter suggests, would allow state legislatures to make reasoned decisions about whether to amend their workers' compensation laws in an attempt to provide the “adequate coverage for pneumoconiosis” the federal statute requires. In addition, the commenter suggests that the Department establish a formal, ongoing review of state workers' compensation laws to determine whether or not they provide adequate coverage.
Although no state has applied for certification in the 27 years that the Department has administered the program, the Department accepts the commenter's suggestion that the publication of specific criteria would be helpful to state legislators who wish to amend their state's laws in order to obtain Secretarial certification and thereby preclude the application of federal law to their state's coal mine operators. Publication of a current set of criteria, however, will require considerable study and additional drafting, and would needlessly delay final promulgation of the remaining regulations in the Department's proposal. Following completion of that work, the Department will issue a new notice of proposed rulemaking in order to ensure that interested parties have an opportunity to comment upon possible Secretarial certification criteria. The Department believes that in the interim the revised Part 722 will accommodate any state seeking certification.
The Department does not believe, however, that it would be productive to engage in a formal, ongoing review of each state's laws in order to determine whether they provide adequate coverage for occupational pneumoconiosis. States that revise their workers' compensation laws to meet the Department's criteria will do so in order to preempt the application of the Black Lung Benefits Act. Those states will have a clear incentive to submit an application to the Department for the appropriate certification. Relying on states to initiate the certification process thus makes the most efficient use of government resources at both the state and federal levels.
(d) The Department has not received any specific comments relevant to the individual regulations in Part 722, and no changes have been made in them.
(a) In its first notice of proposed rulemaking, the Department proposed adding subsection (k) to § 725.1 to
(b) One comment submitted in connection with the Department's first notice of proposed rulemaking and renewed in connection with the Department second notice of proposed rulemaking criticizes subsections (j) and (k) as confusing and inconsistent. The comment states that the subsections are confusing because they do not identify the individual instances in which the Department has altered the incorporated provisions of the Longshore and Harbor Workers' Compensation Act (LHWCA) and the Social Security Act (SSA). The comment also argues that the two subsections are inconsistent because subsection (j) limits the instances in which the BLBA departs from the LHWCA, while subsection (k) implies other departures may be contemplated. With respect to the first criticism, the Department believes that specific enumeration of the departures from incorporated LHWCA provisions is unnecessary. The objective of subsection (j) is simply to acknowledge that certain LHWCA provisions are incorporated into the Black Lung Benefits Act (BLBA) and that the BLBA confers specific authority on the Department to promulgate regulations which vary the terms of these incorporated provisions.
The Department acknowledges that, as originally proposed, subsection (k) did not contain any reference to the SSA excess earnings offset, 42 U.S.C. 403(b)-(1), incorporated into section 422(g). The Department's original explanation of subsection (k), 62 FR 3385 (Jan. 22, 1997), also inadvertently omitted specific mention of section 422(g). Section 430 gives the Department the authority to determine the extent to which application of incorporated SSA provisions into Part B of the Act is appropriate in the context of adjudicating claims under Part C. Section 422(g), however, provides no similar authority. It is located in Part C of the Act, and the Department applies the incorporated SSA offset provision as if it were a part of the BLBA.
(c) No other comments were received concerning this section, and no other changes have been made in it.
(a) In its first notice of proposed rulemaking, the Department proposed revising section 725.2 in order to distinguish between revisions that would affect pending claims and revisions that would be applied prospectively only,
(b) One of the comments received in connection with section 725.367 contends that the Department's regulation governing the payment of attorneys' fees by responsible operators should not be applied retroactively. The Department agrees; section 725.367 was inadvertently omitted from the list of revised regulations in the Department's second notice of proposed rulemaking that should apply only to claims filed after the effective date of these revisions. As revised, the regulation significantly alters the attorneys' fees that are payable by the responsible coal mine operator.
Similarly, section 725.465 was not open for comment in the Department's first notice of proposed rulemaking, 62 FR 3340-41 (Jan. 22, 1997). The Department proposed revising § 725.465 in its second notice of proposed rulemaking, 64 FR 54971, 54997 (Oct. 8, 1999), and has revised the regulation again in the final rule. As revised, § 725.465 prohibits the dismissal of the responsible operator finally designated by the district director from the adjudication of claims without the consent of the Director. The revision is an integral part of the new rules governing the identification, notification, and adjudication of which of the miner's former employers, if any, should be held liable for the payment of
(c) A number of comments continue to insist that the Department's regulations are impermissibly retroactive, and that the Department's proposal violates the Supreme Court's decisions in
The Department addressed the retroactivity issue in its earlier notices of proposed rulemaking, 62 FR 3347-48 (Jan. 22, 1997) and 64 FR 54981-82 (Oct. 8, 1999). The Department observed that the issue of what constitutes a retroactive effect is complex. With respect to rules that clarify the Department's interpretation of former regulations, the Department quoted
Underlying both the
The Department's rulemaking includes a number of such clarifications. For example, the revised versions of §§ 718.201 (definition of pneumoconiosis), 718.204 (criteria for establishing total disability due to pneumoconiosis) and 718.205 (criteria for establishing death due to pneumoconiosis) each represent a consensus of the federal courts of appeals that have considered how to interpret former regulations.
Similarly, the regulations in Part 725 that the Department intends to apply to pending claims represent clarifications of unsettled or confusing areas of the law. In particular, one commenter has objected to the application of §§ 725.502, 725.537, and 726.8 to pending claims. Section 725.502 provides parties to a claim with knowledge of when each benefit payment is due. In the first notice of proposed rulemaking, the Department observed that the revisions are consistent with the Department's current practice, and with appellate decisions interpreting section 21(a) of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 921(a), as incorporated into the Black Lung Benefits Act by 30 U.S.C. 932(a). 62 FR 3365 (Jan. 22, 1997). Section 725.537 codifies the Department's position, upheld in litigation, with respect to the payment of benefits in cases in which the miner is survived by more than one surviving spouse. The revision ensures the proper implementation of 42 U.S.C. 416(d)(1) and (h)(1), Social Security Act provisions that are incorporated into the Black Lung Benefits Act by 30 U.S.C. 902(a)(2). As
The same commenter has also argued that §§ 725.542-.544, 725.547, and 725.548 should not be retroactively applied to coal mine operators. Section 725.2, however, explicitly makes § 725.547 applicable to newly filed claims only. Sections 725.542 through 725.544 are applicable to operators only by operation of section 725.547; they are therefore also applicable only to claims filed after the effective date of these regulations. Finally, § 725.548 represents a renaming and renumbering of a part of the former regulation at § 725.547. 64 FR 55003 (Oct. 8, 1999). The Department does not believe that its decision to rename and renumber a previous regulation should be considered in any way retroactive.
By contrast, where the revision represents a clear change in the Department's interpretation, such as the regulation governing the payment of attorneys' fees by responsible operators,
(c) One commenter urges that the Department's prospective revisions not be made applicable to subsequent claims. Instead, the commenter suggests, they should be applied only to first-time claims filed by new claimants. The Department does not agree that a subsequent claim differs from a first-time claim for purposes of applying the revised regulations. In 1983, the Department considered a similar request when it promulgated regulations to implement the Black Lung Benefits Amendments of 1981, which transferred liability for certain claims from coal mine operators to the Black Lung Disability Trust Fund. A number of commenters suggested that a “claim” should be defined as a cause of action, so that an individual would only ever have one “claim” for benefits. The Department rejected the suggestion:
The Department believes that the claims as cause of action analogy is misplaced. The more correct analogy would be to a complaint or other preliminary pleading which is filed to initiate an adjudication of the nature of the right or the validity of the cause of action which is being asserted. Throughout its various versions, the Act has been consistent in requiring that a claim must be filed before any determination of eligibility for benefits could be undertaken.
(d) One commenter urges the Department to alter its definition of a “pending” claim, which allows a claim to be considered “pending” for up to one year after it is denied. The commenter suggests that the definition violates the jurisdictional rules governing finality set forth in 33 U.S.C. § 921. The Department does not agree that its definition violates any principles of finality. Currently, a claimant may file a request for modification at any time within one year after the denial of a claim. 20 CFR § 725.310 (1999). In fact, even a new claim filed during the one-year period will serve to reopen the existing claim.
The Department's definition of a “pending claim” is intended to prevent the application of certain regulatory revisions (those which will be applied only on a prospective basis) to any claim that was filed before the date on which those revisions take effect. The definition includes claims pending at various stages of adjudication (
(a) In its first notice of proposed rulemaking, the Department proposed revising subsection (d) to reflect the Department's decision to discontinue publication of the Part 727 regulations in the Code of Federal Regulations. 62 FR 3348 (Jan. 22, 1997). Subsection (d) therefore referred parties interested in reviewing the Part 727 regulations to the
(b) Three comments urge the Department to continue publishing the Part 727 regulations because some claims governed by those regulations are still in litigation. It remains the Department's position, however, that future publication of Part 727 is unnecessary, in part because these regulations do not apply to any claim filed after March 31, 1980. Thus, more than twenty years have passed since claims were filed to which these regulations apply. In addition, the Code of Federal Regulations has printed these regulations annually for twenty years. Consequently, access to Part 727 is readily available in the public domain for the relatively few claims still subject to those regulations.
(c) No other comments were received concerning this section, and no changes have been made in it.
(a)(i) The Department proposed amending the definition of “benefits” (§ 725.101(a)(6)) in the initial notice of proposed rulemaking to include the cost of the initial complete pulmonary examination of the claimant authorized by the statute, 30 U.S.C. 923(b); § 725.406, and subsidized by the Trust Fund. 62 FR 3386 (Jan. 22, 1997). Several commenters opposed the change because they believed the revised definition would impose liability for the examination's cost on the claimant if the claim were ultimately denied or withdrawn. In response, the Department assured the commenters that the cost could not be shifted to the claimant despite its classification as a “benefit.” 64 FR 54982 (Oct. 8, 1999). The Department also proposed adding a reference to augmented benefits and a cross-reference to its definitional regulation (§ 725.520(c)). 64 FR 55023 (Oct. 8, 1999). The Department intended this change for the convenience of parties looking for a comprehensive
The Department considers
In the event that medical questions are raised in any case, the Secretary shall have the power to cause the employee to be examined by a physician employed or selected by the Secretary and to obtain from such physician a report containing his estimate of the employee's physical impairment * * * The Secretary shall have the power in his discretion to charge the cost of examination or review under this subsection to the employer, if he is a self-insurer, or to the insurance company which is carrying the risk, in appropriate cases, or to the special fund * * *.
(b)(i) In the initial notice of proposed rulemaking, the Department proposed amending § 725.101(a)(13), “Coal Preparation,” and (a)(19), “Miner or Coal Miner,” to specify that coke oven workers are excluded from coverage under the BLBA. 62 FR 3386, 3387 (Jan. 22, 1997). The Department received three comments supporting the proposed change, which were noted in the preamble to the second proposed rulemaking, 64 FR 54982 (Oct. 8, 1999). The Department further clarifies the intended scope of these definitions. In the initial notice of proposed rulemaking, the Department noted a long held position that “the preparation activities undertaken at coke ovens are not covered by the BLBA.” 62 FR 3348 (Jan. 22, 1997). The Department now believes this language may have been too broad, and accordingly amends the language of § 725.101(a)(19) to effectuate its intention that the definition of “Miner” exclude from coverage only those workers in the coke industry who are actually employed as coke-oven workers,
(c) The Department proposed amending § 725.101(a)(16), “District Director,” in the initial notice of proposed rulemaking to substitute that title for “Deputy Commissioner,” and ensure that any actions taken by a district director would be afforded the same legal force as any action of a deputy commissioner. 62 FR 3348, 3386 (Jan. 22, 1997). No comments were received concerning this definition, and no changes were made in it.
(d) The Department proposed amending § 725.101(a)(17), “Division or DCMWC,” in the initial notice of proposed rulemaking to identify the agency within the Department which contains the Office of Workers' Compensation Programs and the Division of Coal Mine Workers' Compensation. 62 FR 3348, 3386 (Jan. 22, 1999). No comments were received concerning this definition, and no changes were made in it.
(e)(i) In the initial notice of proposed rulemaking, the Department proposed amending the definition of “workers’ compensation law” (725.101(a)(31)) to exclude certain benefits paid from a state's general revenues. 62 FR 3387 (Jan. 22, 1997). The proposal responded to decisions from the Benefits Review Board and Third Circuit rejecting the Department's longstanding interpretation of the term.
We are not talking about State programs funded through general revenues. Any State that has such programs could reduce benefits payable to persons eligible to receive them under this provision. If the State did not so reduce the benefits, such benefits could not be offset or deducted from payments under this provision.
(f)(i) The Department initially proposed a uniform definition of “year” (§ 725.101(a)(32)) for computing the length of coal mine employment when required in the adjudication of claims. 62 FR 3387 (Jan. 22, 1997). Under the proposed definition, a “year” encompassed either a calendar year or partial periods totaling a year, during which the miner must have received pay for work as a miner for at least 125 days; computing a year included periods when the miner received pay while on an approved absence,
(a) In the initial notice of proposed rulemaking, the Department proposed § 725.103 as a regulation of general applicability to delineate the general burdens of proof for the parties to a claim. 62 FR 3388 (Jan. 22, 1997). The comments opposing this regulation challenged the Department's authority to adjust the burdens of proof among the parties. The Department responded with a detailed analysis of the relevant precedent and its own authority. 64 FR 54972-74 (Oct. 8, 1999). For a number of reasons, the Department concluded that the Administrative Procedure Act (APA), 5 U.S.C. 556(d), does not preclude it from incorporating presumptions into the regulations which reallocate the burden of proving certain facts. First, the statute itself places limitations on the operation of the APA while conferring on the Secretary broad regulatory authority. The Federal Mine Safety and Health Act (FMSHA), which includes the Black Lung Benefits Act (BLBA) as title IV, generally exempts its provisions from the APA. 30 U.S.C. 956. The BLBA, however, incorporates section 19 of the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 919(d), thereby making the APA applicable to the adjudication of claims. The incorporation of the APA is subject to one important constraint: Congress conferred on the Secretary the authority to vary the terms of the incorporated provisions by regulation. 30 U.S.C. 932(a) (provisions of LHWCA apply to BLBA “except as otherwise provided * * * by regulations of the Secretary”).
(b) One comment contends the Department has no authority under the APA to allocate burdens of proof in a proceeding before an administrative law judge (ALJ). The comment cites no authority, statutory or otherwise, for this proposition. For purposes of responding to the comment, the Department assumes the reference to ALJ proceedings means a reference to a proceeding governed by the APA, including 5 U.S.C. 556(d) (allocating burden of persuasion to proponent of a rule or order). In the second notice of proposed rulemaking, the Department examined the statutory authority which permits it to vary the terms of the APA by regulation. 64 FR 54973 (Oct. 8, 1999). The comment provides no refutation of the conclusions drawn from this analysis. Because the Department has already responded to the substance of the comment's objection, no further response is warranted.
(c) One comment suggests the Supreme Court's decision in
(d) No other comments were received concerning this definition, and no changes were made in it.
(a) The Department proposed changing the definition of “miner” in the initial notice of proposed rulemaking. 62 FR 3388-89 (Jan. 22, 1997). Specifically, the Department proposed creating a rebuttable presumption that any individual working in or around a coal mine or coal preparation facility was a “miner” within the meaning of the Black Lung Benefits Act (BLBA). The party liable for benefits could rebut the presumption by proving the individual did not perform coal extraction, preparation or transportation work while at the mine site, or did not engage in mine maintenance or construction. The presumption could also be rebutted by demonstrating that the individual was not regularly employed around a coal mine or coal preparation facility. The Department also proposed restructuring the existing regulation (20 CFR 725.202) to differentiate special provisions applicable only to transportation and construction workers.
(b) Two comments generally object to the revised definition of “miner,” arguing that it forces operators to defend against claims from employees only peripherally involved in the coal mining process. The revisions primarily rearrange the component parts of 20 CFR 725.202(a), and segregate special provisions involving construction and transportation workers. The regulation does include a rebuttable presumption that any on-site worker at a coal mine or coal preparation facility is a “miner.” This presumption reflects the rational assumption that an individual working in or around a coal mine is involved in the extraction, preparation or transportation of coal, or in the construction of a mine site; these functions are enumerated by the statutory definition of a “miner.” The operator may rebut the presumption by disproving either the required nexus between the worker's duties and coal mining, or any regular employment at a coal mine facility. This burden is not onerous given the operator's access to information about the use and duties of the workers at its facilities.
(c) One comment objects to coverage for coal mine construction workers whose jobs are integral to the construction of a coal mine site or facility. The commenter argues that coverage should include only those construction workers whose jobs are integral to the extraction or preparation of coal, citing
In
(d) One comment objects to the application to construction workers of the rebuttable presumption that any on-site worker is a “miner.” For the reasons expressed in paragraph (b), the Department believes any individual whose employment requires him or her to perform work at a coal mine can logically be presumed to be involved in a covered coal mine function. The commenter has provided no reason to exclude construction workers from that presumption, and the Department declines to do so.
(e) One comment received after publication of the initial notice of proposed rulemaking and referenced again after publication of the second notice objects to subsection (d), which describes the elements of entitlement for a miner and references the specific regulatory criteria in Part 718 for establishing those elements. The comment links its objection to criticisms of the specific Part 718 regulations rather than any aspect of subsection (d). The Department's responses to those criticisms are discussed under the particular Part 718 sections. No further response in the context of this regulation is necessary.
(f) Two comments support the revised section 725.202.
(g) No other comments concerning this section have been received, and no changes have been made in it.
(a)(i) The Department proposed changing § 725.203 in the initial notice of proposed rulemaking to eliminate the filing of a claim as an element of entitlement for a miner. 62 FR 3389 (Jan. 22, 1997). This change clarified that a miner is entitled to benefits for all periods of compensable disability, including any period which occurred prior to the filing of the claim. 62 FR 3349 (Jan. 22, 1997). The Department also incorporated into § 725.203 provisions from 20 CFR 718.404, which was deleted. These provisions require an entitled miner to notify the Department if (s)he returns to coal mining or comparable work, and authorize the Department to reopen a final miner's award in appropriate circumstances for the development of additional evidence and the reevaluation of entitlement. 62 FR 3349, 3389 (Jan. 22, 1997). Finally, § 725.203(b)(2) now refers to § 725.504, which is the renumbered version of § 725.503A. 62 FR 3341 (Jan. 22, 1997). The Department proposed no further changes to § 725.203 in the second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 1999). (ii) The Department has now further amended § 725.203(d), however, to restore language requiring the beneficiary to submit “medical reports and other evidence” if the Office determines the evidence is necessary to resolve any question concerning the validity of the award. This phrase appears in 20 CFR 718.404(b), and was inadvertently omitted in the earlier proposal to change § 725.203. The Benefits Review Board has since interpreted the phrase in § 718.404(b) to involve discovery requests.
(b)(i) One comment suggests the revision of subsection (a) improperly extends the eligibility period. The Department rejects this interpretation. The change merely harmonizes that provision with § 725.503, and ensures the miner's entitlement to benefits for any period of eligibility which predates the filing of a claim.
(c) Three comments oppose subsection (d) because it permits the Department to reopen an approved claim if issues arise concerning its validity. Subsection (d) simply recognizes the Department's authority to investigate any finally approved miner's claim if circumstances raise an issue pertaining to the validity of the award. Such authority is necessary in order to monitor a miner's continuing eligibility and prevent the payment of benefits to any claimant whose eligibility ceases. The Department rejects the suggestion that this authority should be limited to cases involving fraud or the miner's return to coal mining. Limiting the reopening authority under subsection (d) in this manner would be inconsistent with the Department's statutory authority to modify an award based on a factual mistake or change in condition at any time within one year after the last payment of benefits. 33 U.S.C. 922, as incorporated by 30 U.S.C. 932(a); 20 CFR 725.310. Furthermore, such a limitation would impinge on the right of responsible operator to petition for modification and request a medical examination if circumstances call into question the entitlement of the miner. The Department emphasizes that the responsible operator does not have an absolute right to compel the claimant to submit to a medical examination for purposes of the modification petition.
(d) One comment urges the Department to limit its authority to reopen awards under subsection (d) to the first year after the award becomes final. Such a limitation, however, is inconsistent with the Department's statutory authority to modify. 33 U.S.C. 922, as incorporated. In the case of an award, that authority extends to “one year after the date of the last payment of compensation.” Furthermore, the limitation would also adversely affect the responsible operator's right to request modification if it became aware of circumstances which call into question the validity of the award.
(e) In response to the initial notice of proposed rulemaking, one comment opposed subsection (d) because the provision did not expressly acknowledge that a claim may be reopened if the miner's condition improved. The Department previously rejected a similar suggestion when it promulgated the final version of 20 CFR 718.404 in 1980. The Department initially proposed § 718.404 with a requirement that an entitled individual contact the Office of Workers' Compensation Programs if “[h]is or her respiratory or pulmonary condition improves[.]” 43 FR 17727 (Apr. 25, 1978). The requirement was deleted in the final version “in response to comments and testimony stating that pneumoconiosis does not, in fact, improve.” 45 FR 13694 (Feb. 29, 1980). The same commenter submitted an additional response to the second notice of proposed rulemaking, and now approves of subsection (d) because it does not preclude the right of a liable party to challenge a final award at a later date. The Department therefore declines to incorporate any language affirmatively citing improvement in a miner's health as grounds for reopening an award.
(f) No other comments were received concerning this section, and no changes have been made in it.
(a) The Department proposed amending § 725.204 in the initial notice of proposed rulemaking to conform the regulatory criteria for marital relationships to intervening changes in the law since the regulation was issued in 1978. 62 FR 3349-50 (Jan. 22, 1997). The Department provided a detailed statutory analysis in the initial notice. To summarize: the Black Lung Benefits Act (BLBA) incorporates the definition of a dependent “wife” used by the Social Security Act (SSA), 42 U.S.C. 416(h)(1), as incorporated by 30 U.S.C. 902(a)(2), (e). The SSA recognizes both “legal” and “deemed” spouses; the latter is an individual who married the wage earner while ignorant that some legal impediment existed to deny validity to the marriage. Before 1990, § 416(h) contained a provision preventing a “deemed spouse” from receiving benefits if a “legal” spouse existed and was receiving benefits on the wage earner's account. 42 U.S.C. 416(h)(1)(B). The Department included this limitation in the dependency criteria when it promulgated § 725.204. 20 CFR 725.204(d)(1). In 1990, Congress amended the SSA to remove the prohibition on “deemed spouse” entitlement if a legal spouse existed and was receiving benefits. 104 Stat. 1388-278 to 1388-280 (1990). Legislative history clearly established Congressional intent to permit both the “deemed” spouse and the legal spouse to receive concurrent benefits.
(b) Two comments approve of the change to this section acknowledging the eligibility of a spouse to receive benefits despite the existence of a legal impediment to the validity of the marriage to the miner unless the individual entered into the marriage with knowledge it was not valid.
(c) No other comments concerning this section were received, and no changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department erroneously proposed changing § 725.209(a)(2)(ii) to state that, in order to be considered a dependent, a child who is at least 18 and not a student must be under a disability that commenced before the age of 22. 62 FR 3390 (Jan. 22, 1997). The purpose of the change was to reflect in the regulation itself the age by which certain children's disabilities must commence, a requirement imposed by an incorporated provision of the Social Security Act. 42 U.S.C. 402(d)(1)(B)(ii), as incorporated into the BLBA by 30 U.S.C. 902(g). 62 FR 3350 (Jan. 22, 1997). After further consideration, however, the Department reproposed the regulation without the new language. 64 FR 55026 (Oct. 8, 1999). Eliminating the age by which the disability must have begun for a dependent child harmonizes § 725.209 with the statutory definition by preserving the distinction between a child/augmentee and a child/beneficiary (
(b) Reference should be made to the Department's response to comments concerning § 725.219 to determine the effect of marriage on a child's dependency status under § 725.209(a)(1).
(c) No comments concerning changes to this section were received in response to either the initial notice of proposed rulemaking or the second notice of proposed rulemaking, and no further changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed amending § 725.212 to codify the right of each surviving spouse of a deceased miner to receive a full monthly benefit without regard to the existence of any other entitled surviving spouse. 62 FR 3390 (Jan. 22, 1997). The Department concluded that both statutory analysis and Congress' intent compelled this result, and explained at length the reasoning behind the conclusion. 62 FR 3350-51 (Jan. 22, 1997).
(b) Five comments object to subsection (b) because it permits each surviving spouse of a deceased miner to receive full monthly benefits if (s)he establishes eligibility regardless of the existence of any other entitled surviving spouse. The commenters assert that the change will increase the cost of paying survivors' benefits. Increased costs alone do not justify denying eligible individuals the benefits to which they are entitled by law.
(c) Two comments argue the change is not permitted by the relevant statutes; one comment disputes the Department's conclusion that its earlier procedure was adopted in error, citing undocumented representations by the Social Security Administration (SSA) to the Department in 1978. In the initial notice of proposed rulemaking, the Department provided a detailed legal analysis of the pertinent statutory authorities and legislative history, all of which support awarding full monthly benefits to more than one surviving spouse.
(d) One comment states that the SSA regulations implementing part B of the BLBA do not permit more than one surviving spouse to receive full benefits. SSA's program regulations (20 CFR part 410) are silent on the entitlement of multiple surviving spouses. In any event, the Department has independent authority to issue regulations for part C of the BLBA, 30 U.S.C. 936(a), and § 725.212 is consistent with the applicable provisions of the BLBA and the SSA as incorporated.
(e) One comment states that the current Coal Mine (BLBA) Procedure Manual is consistent with the position that full monthly benefits cannot be paid to each surviving spouse when more than one spouse qualifies for one deceased miner. This statement is simply erroneous. Since at least 1994, the Procedure Manual has unequivocally provided that “[w]hen a surviving spouse and a surviving divorced spouse both qualify as primary beneficiaries, each is entitled to full basic benefits plus full augmentation.” Coal Mine (BLBA) Procedure Manual, ch. 2-900, ¶ 8.f (Sept. 1994).
(f) One comment contends the Department lacks the authority to require an operator to pay the same benefit twice. The Department rejects this contention. As discussed above, the BLBA unequivocally requires the payment of full monthly benefits to each surviving spouse who fulfills the eligibility criteria. The statute does not recognize any limitation on the liability for these benefits, or any reduction in the amount to which the eligible surviving spouse is entitled.
(g) Two comments support the change in subsection (b).
(h) No other comments were received concerning this section, and no changes have been made in it.
(a) The Department proposed amending § 725.213 in the initial notice of proposed rulemaking to harmonize that regulation with changes to § 725.204, which now recognizes the independent eligibility of a “deemed” spouse to receive benefits notwithstanding the existence of a legal spouse who is also receiving benefits. 62 FR 3351 (Jan. 22, 1997) The Department also proposed adding paragraph (c) to codify the right of a surviving beneficiary, who loses eligibility through some legal impediment, to resume eligibility upon the cessation of that impediment. The Department did not propose any further changes to the regulation in its second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 1999).
(b) Two comments object to reentitlement for a surviving spouse who loses eligibility, but later reestablishes all the requirements. The commenter states in general terms that the provision is contrary to the Social Security Act (SSA), represents an unwarranted increase in benefits liability, and should be abandoned. The commenter cites no specific authority for its argument. The legislative history of 30 U.S.C. 902(e), the statutory definition of “widow” which § 725.213 implements, establishes congressional intent to afford a miner's widow the same right to resumption of black lung benefits upon termination of a remarriage as exists for a widow receiving SSA benefits.
The Black Lung Benefits Act (BLBA), as enacted in 1969, defined “widow” to mean
At the time of the 1972 amendments to the BLBA, the SSA defined a “widow” as an individual who “is not married.” 42 U.S.C. 403(e)(1)(A). Congress had previously amended the SSA definition in 1965 by replacing the phrase “has not remarried” with “is not married.” Pub. L. 89-97, § 308(b)(1), 79 Stat. 286, 376 (1965). The legislative history of the amendment indicates that Congress intended an aged divorced wife, widow or surviving divorced wife, who was not married at the age of eligibility, to retain “whatever rights to benefits she has ever had, regardless of intervening marriages, which have ended in death, divorce or annulment.” S. Rep. No. 404, 89th Cong., 1st Sess.,
An individual is entitled to benefits as a widow, or as a surviving divorced wife, for each month beginning with the first month in which all of the conditions of entitlement * * * are satisfied. If such individual remarries, payment of benefits ends with the month before the month of remarriage * * *. Should the remarriage subsequently end, payment of benefits may be resumed * * *.
In promulgating § 725.213, the Department recognizes that permitting reentitlement of surviving spouses and children (§ 725.219) treats these classes of beneficiaries more generously than surviving brothers and sisters of the deceased miner (§ 725.223). One comment notes it is appropriate to end benefit entitlement permanently when a brother or sister marries, and implies the same treatment should be accorded all other classes of beneficiaries and augmentees, including surviving spouses and children. The Department believes the difference in treatment is required by the BLBA. Section 412(a)(5) states that “[n]o benefits to a sister or brother shall be payable under this paragraph for any month beginning with the month in which he or she * * * marries.” 30 U.S.C. 922(a)(5). This provision terminates eligibility if a miner's brother or sister who is receiving benefits marries. Unlike the statutory definitions of “widow” and “child,” 30 U.S.C. 902(e), (g), section 412(a)(5) focuses on the occurrence of an event when ineligibility commences rather than the individual's status. The widow's or child's marriage status can change over time; once the event of marriage occurs for a brother or sister, “no benefits shall be payable.” The regulations therefore exclude brothers and sisters from reentitlement once they marry.
(c) One comment states that reentitling a surviving spouse after the termination of his or her intervening marriage is contrary to the SSA regulations implementing part B of the BLBA. The comment is incorrect. Section 410.211(a) provides that payment of benefits terminates if a surviving spouse or divorced wife remarries while receiving benefits; however, “[s]hould the remarriage subsequently end, payment of benefits may be resumed * * * .” 20 CFR 410.211(a). Sections 725.213 and 410.211 are therefore entirely consistent.
(d) Two comments support the new subsection (c).
(e) No other comments concerning this section were received, and no changes have been made in it.
(a) The Department proposed amending § 725.214 in the initial notice of proposed rulemaking to conform the regulatory criteria for marital relationships to intervening changes in the law since the regulation was issued in 1978. 62 FR 3349-50 (Jan. 22, 1997). Specifically, the Department intended this regulation (as well as § 725.204) to reflect statutory changes which now permit the surviving spouse of a miner, whose marriage is invalid due to a legal impediment, to receive benefits notwithstanding the existence of a legally-married spouse who also is receiving benefits. Consequently, the Department proposed eliminating language in 20 CFR 725.214(d) which required the termination of benefits for the surviving spouse whose marriage is invalid upon the entitlement of the legal spouse. The Department proposed no additional changes to this regulation in the second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 1999). For purposes of this rule, the Department has corrected one typographical error and made minor grammatical changes. The first and second notices of proposed rulemaking used the word “interstate” in § 725.214(c) to describe a miner's personal property. 62 FR 3391 (Jan. 22, 1997); 64 FR 55027 (Oct. 8, 1999). The correct word is “intestate,” and that word has been substituted in the regulation. In § 725.214(d), the Department has deleted the word “and” which immediately followed the phrase “in a purported marriage between them,” and added commas, as appropriate, to clarify the meaning of the provision.
(b) One comment objects to permitting a surviving spouse, whose marriage to the deceased miner may be invalid due to certain legal impediments, to maintain eligibility despite another person's eligibility as the miner's surviving spouse. The commenter states generally that the provision is contrary to the Social Security Act (SSA) and imposes an unwarranted increase in benefits liability. Neither objection demonstrates any basis for abandoning the revision. The Department proposed the same change in connection with § 725.204, and provided a detailed legal analysis of the reasons supporting the revision in its initial notice of proposed rulemaking.
(c) No other comments concerning this section were received, and no other changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed clarifying the intended operation of § 725.215(g)(3) by changing a reference in that regulation from “section” to “paragraph.” 62 FR 3391 (Jan. 22, 1997). The change ensures that the exception to the nine-month marriage rule is confined to subsection (g) rather than applicable to the entire regulation. 62 FR 3351 (Jan. 22, 1997). The Department proposed no additional changes to this regulation in the second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 1999).
(b) No comments concerning this section were received, and no changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed changing § 725.219 to account for a change in the age of onset of disability in the Social Security Act (SSA), 42 U.S.C. 402(d)(1)(B), which is incorporated into the Black Lung Benefits Act's (BLBA) definition of “child,” 30 U.S.C. 902(g). 62 FR 3350 (Jan. 22, 1997). The Department did not propose any additional changes in the second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 1999). The Department, however, did assert in general terms that marriage is a
(b) Two comments recommend adopting a provision (analogous to § 725.213(c)) which would allow a deceased miner's surviving disabled child, whose entitlement terminates upon marriage, to regain eligibility when that marriage ends. Formerly, the regulations permitted a child whose entitlement terminated at age 18 to apply for reinstatement if the child was a student, younger than age 23, and was not married. 20 CFR 725.219(c). The regulations did not make any provision for reentitling a disabled child whose entitlement is terminated by marriage. The Department agrees with the comments that such a provision is appropriate, and therefore has added subsection (d). This provision enables a child whose entitlement terminates upon marriage to apply for reinstatement of benefits once the marriage terminates. Subsection (d) also excuses the child-beneficiary from any requirement to reestablish the deceased miner's total disability or death due to pneumoconiosis.
The BLBA provides that survivor's benefits “shall only be paid to a child for so long as he meets the criteria for the term ‘child’ contained in section 402(g).” 30 U.S.C. 922(a)(3). Section 402(g) defines “child” to mean a:
child or a stepchild who is—
(1) unmarried; and
(2)(A) under eighteen years of age, or
(B)(i) under a disability as defined in section 423(d) of title 42
(ii) which began before the age specified in section 402(d)(1)(B)(ii) of title 42, or, in the case of a student, before he ceased to be a student; or
(C) a student.
The Department's interpretation of the plain language of § 402(g) gains support from Congress' decision to omit certain provisions of 42 U.S.C. 402(d) (the Social Security Act) from the BLBA. Significantly, Congress did not incorporate § 402(d)(6), which permits a child to become reentitled to benefits after turning 18 if the child is a student under age 22 or disabled, “provided no event specified in paragraph (1)(D) has occurred.” 42 U.S.C. 402(d)(6). Section 402(d)(1)(D) states that a child's benefits terminate “the month preceding * * * the month in which such child dies or marries[.]” In
The legislative history of the definition of “child” does not support a contrary interpretation. The BLBA originally defined “dependent” to mean a dependent wife or child within the meaning of 5 U.S.C. 8110; “wife” and “child” were not defined separately. 30 U.S.C. 902(a) (1969). Section 8110 defined a dependent child as an “unmarried child” living with, or receiving regular contributions from, the employee if the child is under 18 years of age; over that age but incapable of self-support because of a physical or mental impairment; or a student. 5 U.S.C. 8110(a)(3). In 1972, Congress amended the BLBA to include a new definition of “dependent” and separate definitions of “child” and “widow.” 30 U.S.C. 902(a), (g), (e) (1972). The legislative history of the 1972 amendments simply states that the statutory definition of “child” conformed to the SSA definition. S. Rep. No. 743, 92nd Cong., 2nd Sess. (1972),
The effect of marriage on a claimant's eligibility has also arisen in connection with a miner's surviving spouse. 30 U.S.C. 902(e). Since the 1972 amendments, the statutory definition of “widow” has limited eligibility to a miner's surviving spouse or surviving divorced spouse “who is not married.” Legislative history linking the 1972 amendment of 30 U.S.C. 902(e) to changes in the parallel SSA definition clearly establish Congress' intention to permit reentitlement for a widow who remarried after the beneficiary's death and later became unmarried.
(c) No other comments concerning this section were received, and no other changes have been made in it.
(a) The Department proposed changing the date of onset of disability in § 725.221 from 18 to 22 years of age to conform the regulation to the same change in 42 U.S.C. 423(d). 62 FR 3350, 3392 (Jan. 22, 1997). The Department proposed no additional changes in the second notice of proposed rulemaking. 64 FR 54791 (Oct. 8, 1999).
(b) One comment supported the change in the age by which disability must commence.
(c) No other comments were received concerning this section, and no changes have been made in it.
(a) The Department proposed changing the date of onset of disability in § 725.222 from 18 to 22 years of age to conform the regulation to the same change in 42 U.S.C. 423(d). 62 FR 3350, 3392 (Jan. 22, 1997). The Department proposed no additional changes in the second notice of proposed rulemaking. 64 FR 54791 (Oct. 8, 1999).
(b) One comment recommends that subsection (b) allow a deceased miner's parent, brother or sister to claim benefits unless the miner's surviving spouse or child has established entitlement. The Department rejects this change because it is inconsistent with the Black Lung Benefits Act. Section 412 of the Act provides guidelines for the payment of benefits to eligible beneficiaries. 30 U.S.C. 922. Section 412(a)(5) states, in pertinent part, that a dependent parent of a deceased miner “who is not survived at the time of [the miner's] death by a widow or a child” is eligible for benefits. 30 U.S.C. 922(a)(5). The same provision also states that a dependent surviving sibling of the deceased miner “who is not survived at the time of [the miner's] death by a widow, child, or parent” is eligible for benefits. The current language in 20 CFR 725.222(b) follows the statutory language, and no change in that subsection is appropriate. The statutory provisions are unequivocal: the existence of a surviving spouse or child is sufficient to preclude entitlement for other survivors even if the spouse or child is not receiving benefits.
This interpretation is further supported by another provision of section 412. Paragraph (a)(3) states that “no entitlement to benefits as a child shall be established under this paragraph (3) for any month for which entitlement to benefits as a widow is established under paragraph (2).” 30 U.S.C. 922(a)(3). Under this provision, a child may receive benefits even if a surviving spouse exists unless (or until) the spouse establishes his or her own entitlement and supersedes the child as the primary beneficiary. By using different eligibility criteria within the same statutory provision, Congress drew a clear distinction between the circumstances in which the existence of an eligible surviving spouse could preclude any potential beneficiary with lesser standing from obtaining benefits. The child may therefore constitute a primary beneficiary until such time as the spouse asserts (and proves) his or her own entitlement; at that time, the spouse replaces the child as the beneficiary. The mere existence of a surviving spouse or child, however, does preclude an otherwise eligible parent or sibling from claiming benefits. The commenter's recommended change would violate the distinction between classes of eligible beneficiaries which Congress has drawn. The recommendation must be rejected.
(c) One comment supported the change in age, from 18 to 22, by which disability must commence.
(d) No other comments concerning this section were received, and no changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed revising § 725.223 to adopt the change in age limits for disability specified by 42 U.S.C. 402(d)(1)(B), as incorporated by the Black Lung Benefits Act (BLBA), 30 U.S.C. 922(a)(5). 62 FR 3351, 3393 (Jan. 22, 1997). The Department also proposed adding subsection (d) to permit reentitlement for a miner's dependent brother or sister whose eligibility had terminated upon marriage, provided the marriage ended and the individual again fulfilled all the eligibility criteria. The Department thereafter reconsidered this proposal, and suggested its removal in the second notice of proposed rulemaking. 64 FR 55029 (Oct. 8, 1999). The Department concluded that the proposed subsection (d) contradicted longstanding agency policy, which permitted reentitlement upon cessation of marriage only in the case of a surviving spouse. Because the Department stated it considered a miner's children permanently barred from reentitlement upon the cessation of marriage, it declined to afford preferential treatment to the miner's siblings. In the case of a married sibling who becomes the miner's dependent, the Department concluded that eligibility should not be precluded by the existence of the marriage if the sibling's spouse provided no support. Once a married sibling received support or an unmarried dependent married, however, the Department relied on the assumption that the married sibling would receive support from the spouse and a sibling whose marriage terminated would rely on savings or property from the marriage, etc. 64 FR 54983-84 (Oct. 8, 1999).
(b) The Department has changed its position that reentitlement for beneficiaries after resumption of unmarried status must be confined to surviving spouses and surviving divorced spouses.
(c) One comment endorses the withdrawal of proposed subsection (d), and a return to current practice with respect to the marriage of a miner's brothers and sisters.
(d) No other comments concerning this section were received, and no changes have been made in it.
(a) In its first notice of proposed rulemaking, the Department proposed revising § 725.306(a)(3) by cross-referencing § 725.522 so that an unrelated revision of the term “benefits” in section 725.101(a)(6) would not adversely affect a claimant's ability to withdraw his claim for benefits. The Department specifically noted its intention not to require reimbursement of the amount spent on the claimant's complete pulmonary evaluation as a condition for withdrawal of a claim, notwithstanding its proposal to include the complete pulmonary evaluation within the definition of “benefits.” 62 FR 3351 (Jan. 22, 1997). The Department did not discuss section 725.306 in its second notice of proposed rulemaking.
(b) Several comments opposed the revised definition of “benefits,” § 725.101(a)(6), because it includes the cost of the miner's complete pulmonary examination for which the Department is liable in the absence of a final award of benefits. The commenters believe the revised definition will impose liability on the miner under § 725.306 for repayment of the cost of the examination if he should decide to withdraw his claim. For the reasons stated in the Department's initial notice of proposed rulemaking, 62 FR 3351 (Jan. 22, 1997), and in response to comments received in connection with § 725.101(a)(6), 64 FR 54982 (Oct. 8, 1999), the Department has not made reimbursement of the examination “benefit” a price for withdrawing a claim. No other comments were received concerning this section, and no changes have been made in it.
Although the Department received comments relevant to this section, the regulation was not open for comment,
(a) In its first notice of proposed rulemaking, the Department proposed revising § 725.309 to clarify the rule governing subsequent claims. 62 FR 3351 (Jan. 22, 1997). A subsequent claim is an application filed by the same individual after final denial of a prior claim. The Department observed that a majority of the federal appellate courts that had considered the issue had deferred to the Department's interpretation of the former regulation governing such claims. That regulation required a claimant to establish that he had suffered a material change in condition since the denial of his earlier claim in order to escape the denial of the later claim on the grounds of the prior denial. 20 CFR 725.309 (1999). The Department's interpretation of that rule allowed miners to establish the necessary material change in condition by introducing new evidence that demonstrated a change in one of the necessary elements of entitlement, such as the existence of pneumoconiosis. The Department proposed to codify its interpretation by creating a rebuttable presumption that the miner's condition had changed if new evidence established one of the elements of entitlement previously resolved against the miner. An operator could rebut the presumption by establishing that the earlier denial was erroneous,
The Department substantially revised its proposal in its second notice of proposed rulemaking. 64 FR 54984-85 (Oct. 8, 1999). The Department deleted the rebuttable presumption and substituted a threshold test which allowed the miner to litigate his entitlement to benefits without regard to any previous findings by producing new evidence that established any of the elements of entitlement previously resolved against him. The Department explained that this test effectuated the Fourth Circuit's decision in
(b) Two comments object to the Department's rule allowing subsequent claims on the basis that the record lacks adequate justification of the latency and progressivity of pneumoconiosis. In its first notice of proposed rulemaking, the Department proposed revising the definition of the term “pneumoconiosis” in § 718.201 to, among other things, explicitly recognize that it referred to a progressive disease. 62 FR 3343-44 (Jan. 22, 1997). Several commenters argued that the Department's proposed definition was scientifically unsound, and presented testimony from a panel of physicians with expertise in pulmonary medicine at the Department's July 22, 1997 hearing in Washington, D.C. The Department also received comments and testimony in support of its proposal.
The commenters opposed to the Department's proposal also objected to the Department's failure to consult the National Institute of Occupational Safety and Health (NIOSH). Although NIOSH had commented favorably on the Department's proposal, and specifically on the provision recognizing the progressive nature of pneumoconiosis, the Department decided, in light of the divergent comments it had received from medical professionals, to seek additional guidance from NIOSH. The Department transmitted a copy of all of the testimony and commentary it had received to Dr. Linda Rosenstock, the Director of NIOSH, and asked NIOSH to determine, in light of the then existing record, whether NIOSH continued to support the Department's proposal. NIOSH responded, in a December 7, 1998 letter from Dr. Paul Schulte, the Director of NIOSH's Education and Information Division, that “[t]he unfavorable comments received by DOL do not alter our previous position: NIOSH scientific analysis supports the proposed definitional changes.” Dr. Schulte provided additional medical references to support NIOSH's conclusion. The Department notified parties of this additional evidence in its second notice of proposed rulemaking.
One commenter accuses the Department of obtaining assistance from NIOSH's information officer rather than its scientific staff. The Department does not agree that the identity or title of the agency official through whom NIOSH chose to communicate its response to the Department's inquiry renders that response invalid. The Department's request was sent to the Director of NIOSH, and observed that the resolution of the issues related to the definition of the term “pneumoconiosis” required scientific and medical expertise. Dr. Schulte's letter, transmitted on behalf of NIOSH in response to the Department's request, specifically refers to “NIOSH scientific analysis.” Accordingly, the Department rejects the commenter's inferences that its consultation with NIOSH was less than complete, and that the Department sought to exclude the agency's scientific staff. To the extent that the statute imposes an obligation to consult with NIOSH on the definition of “pneumoconiosis,” the Department has fully complied with that obligation.
The commenters opposed to the Department's proposal also attack the scientific basis of the conclusion that the Department and NIOSH have drawn from the evidence of record. In the following discussion, where a scientific article or treatise is cited, the Department has also cited to a Rulemaking Record Exhibit or, when appropriate, the
Drs. Fino and Bahl also analyzed five articles dealing with progression, which they define parenthetically as “1/0 to 1/0.+” Their analysis of progression thus focuses on whether individuals whose chest X-rays are initially read as 1/0, the lowest positive classification in the ILO-UC scheme, may have later chest X-rays classified greater than 1/0. They observe that “there are authors who have identified progression of pneumoconiosis in coal miners,” but that other authors have reached the contrary conclusion. They conclude as follows:
Why do some miners progress within the ILO scale of simple pneumoconiosis and others do not? The answer lies in the proper definition of pneumoconiosis. Careful attention must be made to differentiate simple coal workers' pneumoconiosis and silicosis. The miners who have been described to progress over time after exposure ceases are miners who have likely contracted silicosis, not simple coal workers' pneumoconiosis. * * *
Silicosis may be a progressive disease in a small percentage of miners after coal mine dust exposure ends. The literature does not support the statement that coal workers' pneumoconiosis is progressive absent further dust exposure. There are no studies that show progressive impairment in miners who have left the mines. The studies do not show any progression in industrial bronchitis after a miner leaves the mines. In fact, the studies do suggest that the minor reduction in the FEV1 [Forced Expiratory Volume in one second] as a result of industrial bronchitis occurs in the first few years of mining and then the effect over the remaining years in the mines is negligible and may even recover.
Rulemaking Record, Exhibit 89-37, Appendix C at 30-31. In evaluating the medical evidence contained in the rulemaking record, the Department is mindful that Congress provided an exceptionally broad definition of the term “pneumoconiosis:” “a chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments, arising out of coal mine employment.” 30 U.S.C. 902(b). The regulatory definitions promulgated by the Department over the last 25 years have reflected the scope of this provision.
In 1978, the Department promulgated its interim criteria, 20 CFR Part 727. Those criteria included a definition of “pneumoconiosis” at 20 CFR 727.202. After repeating the statutory definition, the regulation further provided that “[t]his definition includes, but is not limited to, coal workers' pneumoconiosis, anthracosilicosis, anthracosis[,]anthrosilicosis, massive pulmonary fibrosis, progressive massive fibrosis[,] silicosis, or silicotuberculosis arising out of coal mine employment.” 43 FR 36825 (Aug. 18, 1978). The Department promulgated its permanent criteria, 20 CFR Part 718, in 1980. Section 718.201, entitled “Definition of pneumoconiosis,” contained a definition that was identical to that of § 727.202. 45 FR 13685 (Feb. 29, 1980). The federal courts of appeals have long recognized that the Act compensates not merely coal workers' pneumoconiosis, as that term is used by the medical community, but “legal” pneumoconiosis.
The Department has reviewed all of the medical literature referenced in the record, and does not agree that it lacks support for the proposition that pneumoconiosis is a latent, progressive disease. Contrary to Dr. Fino's conclusions, a number of medical references document the latent, progressive nature of the disease. For example, Seaton, in “Coal Workers' Pneumoconiosis,” in Morgan, WKC and Seaton A, eds.,
Moreover, contrary to the conclusion of Dr. Fino and Dr. Bahl, the study conducted by Donnan
In light of this evidence, the Department is not persuaded by the reliance Dr. Fino and Dr. Bahl place on the conclusion of Drs. Merchant, Taylor and Hodous in “Occupational Respiratory Diseases” (National Institute for Occupational Safety and Health, 1986),
Similarly, the Department is not persuaded by Dr. Fino and Dr. Bahl's attempt to dismiss the effect of silica on coal miners, and therefore to discount the applicability of studies demonstrating the latency and progressivity of silicosis. It remains the Department's position that pneumoconiosis, as defined in the statute, 30 U.S.C. 902(b), is both latent and progressive. The statutory definition includes both simple coal workers' pneumoconiosis and silicosis. Although they acknowledge studies showing that silicosis is a latent, progressive disease, Dr. Fino and Dr. Bahl argue that coal workers' pneumoconiosis must be distinguished from silicosis. The Black Lung Benefits Act, however, does not permit such a distinction. As discussed above, the regulatory definition of the term “pneumoconiosis,” implementing the broad statutory definition, includes silicosis within the list of conditions that must be considered pneumoconiosis. In addition, inclusion of silicosis in the definition of pneumoconiosis is based on practical as well as legal considerations. It is difficult to separate the effects of coal and silica in the occupational setting. Coal contains a number of non-organic materials, including quartz, and the percentage of quartz is greater in high rank coals. Seaton, “Coal Workers' Pneumoconiosis,” in Morgan, WKC and Seaton A, eds.,
Finally, there is also evidence that lung function can continue to deteriorate after a miner leaves the coal mining industry. The authors of Dimich-Ward H and Bates DV, “Reanalysis of a longitudinal study of pulmonary function in coal miners in Lorraine, France,” Am J Ind Med, 25:613-623 (1994),
The commenters also cite the 1985 report of the Surgeon General, U.S. Department of Health and Human Services,
Contrary to the commenters' argument, then, the record does contain abundant evidence demonstrating that pneumoconiosis is a latent, progressive disease. That evidence is certainly sufficient to justify the Department's regulation governing subsequent claims. Moreover, neither the regulation permitting subsequent claims nor the Department's explicit recognition of the progressive nature of the disease represents a departure from the Department's prior positions. The Department's original promulgation of a regulation governing subsequent claims in 1978 was based on the progressive nature of the disease. 43 FR 36785 (Aug. 18, 1978). The federal courts of appeals have also recognized that pneumoconiosis is a progressive disease.
Although one commenter asserts that the regulation creates an irrebuttable presumption that each miner's condition is progressive, it actually does no such thing. As revised, § 725.309 simply effectuates the current one-element test adopted by a substantial number of federal appellate courts and most recently the Benefits Review Board,
(c) One comment submitted in connection with the first notice of proposed rulemaking, and cited by another comment submitted in connection with the second notice of proposed rulemaking, suggests that the Department's proposed revision would compensate the 15 to 20 percent of cigarette smokers who develop chronic airway obstruction if they spent 10 years or more in the coal mining industry. The Department does not agree that the possibility that miners will suffer reduced pulmonary function as a result of cigarette smoking justifies the automatic denial of additional claims by miners under § 725.309. In addition, the previously cited study by Dimich-Ward and Bates documented the progressive decrement in lung function among both miners who smoked and those who did not. Dimich-Ward H, Bates DV, “Reanalysis of a longitudinal study of pulmonary function in coal miners in Lorraine, France,” Am J Ind Med, 25:613-623 (1994), see also 62 FR 3344 (Jan. 22, 1997). The Department accordingly believes that a miner who files his first claim before he is truly totally disabled, but later becomes totally disabled, must be afforded an opportunity to establish that his condition is related to his coal mine employment. Under § 718.204, the miner continues to bear the burden of proving this element of his entitlement. To the extent that a coal mine operator produces medical evidence demonstrating that the miner's total disability is due solely to cigarette smoking, that evidence would also be relevant to the inquiry under § 718.204.
(d) A number of comments argue that § 725.309 violates accepted principles of claim preclusion and issue preclusion, particularly with respect to the treatment of additional claims filed by miners' survivors. The Department disagrees. In its initial proposal, the Department explained that its additional filing rules gave full effect to the principles of claim preclusion but that the applicability of these principles was limited in two important respects: (1) The liberal reopening provision created by Congress under § 22 of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 922, incorporated into the Black Lung Benefits Act by 30 U.S.C. 932(a); and (2) the recognition that an individual's eligibility for workers' compensation benefits is not fixed at a single time, but, especially with respect to occupational diseases, may be subject to relitigation even if the worker's first claim is denied. 62 FR 3352 (Jan. 22, 1997). Under these principles, and subject to the limitation that the party must have a full and fair opportunity to litigate its position,
Section 725.309 applies these principles to the adjudication of black lung benefits claims. For example, if the sole basis for denying a miner's claim is a finding on an issue that is not subject to change, and that the miner had an opportunity to fully and fairly litigate, a subsequent claim by the miner must also be denied. Thus, where the first claim was denied solely on the grounds that the applicant did not work as a miner, and he does not allege that he engaged in any additional coal mine employment since he filed that application, his second claim must be denied as well. Where the issue is subject to change, however, neither claim preclusion principles nor
The regulation gives similar treatment to cases involving miners' survivors. Where a previous survivor's claim was denied solely on the basis that the survivor did not prove that the miner died due to pneumoconiosis, an element not subject to change, the survivor may be barred from litigating another claim filed more than one year after the denial of the first one. The Department does not agree, however, with the commenters' suggestion that none of the elements of a survivor's claim is subject to change. In the case of a miner's survivor, for example, the Secretary's regulations recognize, consistent with Departmental practice, court of appeals precedent, and applicable Social Security law, that although a miner's survivor who remarries is not then eligible for benefits, she may become re-entitled to benefits if that marriage ends.
Moreover, § 725.309 incorporates two other limitations which are accepted components of traditional claim preclusion. First, where none of the elements is subject to change, and denial by virtue of claim preclusion is appropriate under § 725.309, the regulation requires the party defending the claim to specifically plead that doctrine. The Supreme Court has observed that “[c]laim preclusion (res judicata), as Rule 8(c) of the Federal Rules of Civil Procedure makes clear, is an affirmative defense.”
Second, claim preclusion is inappropriate even in traditional civil litigation where the party against whom the defense is invoked was not able to fully litigate those issues which the defendant now seeks to bar.
Similarly, the Department's application of claim preclusion to additional claims contains an exception based on the absence of an opportunity to fully and fairly litigate the issues in a previous proceeding. As the Department explained in its second notice of proposed rulemaking, where one of the applicable conditions of entitlement has changed,
(e) One comment opposes the revised version of § 725.309, suggesting it represents a revised application of the common law concept of claim preclusion to adjudications under the Act. In fact, however, with one exception in the case of survivors' entitlement, the revised version of section 725.309 functions no differently than the former regulation with respect to this common law doctrine. As the Department observed in its initial proposal, its “one-element” rule, allowing a miner to avoid claim preclusion by establishing one of the conditions of entitlement decided against him in the previous adjudication, derives from a series of appellate decisions adopting the Department's interpretation of the former regulation.
(f) One comment argues that the one-element test codified by the revised regulation violates the principles of issue preclusion. The commenter suggests that an X-ray that is found not to be credible in an earlier adjudication may not be credited in a subsequent adjudication. Common law principles of issue preclusion, however, do not require such a result. Instead, once a claimant has submitted new evidence in order to establish one of the elements of entitlement previously resolved against him, an administrative law judge must conduct a
The law of preclusion also bars relitigation of issues between the same parties when those issues were actually litigated and necessary to the decision of the earlier tribunal.
[The Fourth Circuit, in
The commenter's example, an X-ray that is found not to be credible in the previous adjudication, illustrates the operation of the regulation. If the prior claim was denied solely on the basis that the miner failed to establish the existence of pneumoconiosis, the commenter's concern about a re-weighing of the X-ray evidence submitted in the prior adjudication is simply unfounded. Because this was the only issue resolved against the claimant, he must introduce new evidence that demonstrates the existence of the disease if he is to avoid an automatic denial of an additional claim. Consequently, the factfinder may not award benefits simply by redetermining the credibility of the earlier evidence. In most cases, however, the denial of the prior claim will rest on multiple findings. For example, an administrative law judge may conclude that the claimant has not established either that he suffers from pneumoconiosis or that he suffers from a totally disabling respiratory impairment. In such a case, the Department's regulation, consistent with the principles of issue preclusion set forth in
(g) One comment suggests that the Department would breach its fiduciary duty to the Black Lung Disability Trust Fund in any case in which it affirmatively waived its right to rely on the automatic denial of an additional survivor's claim. The Department's obligation to the Trust Fund is to ensure that the Fund not be required to pay non-meritorious claims,
(h) One comment suggests that the Department should penalize individuals who file an additional claim without a change in condition. The Department disagrees. In its second notice of proposed rulemaking, the Department announced its desire to reduce the costs associated with non-meritorious claims by providing applicants with a more realistic view of their possible entitlement based on better pulmonary evaluations and better reasoned explanations of the denials of their claims. 64 FR 54968, 54984 (Oct. 8, 1999). The Department also explained, however, that it did not believe that it was appropriate to penalize an applicant simply because he had filed a previous claim for benefits prematurely.
(i) A number of comments object that the revisions encourage the repeated relitigation of cases without Congressional authority. The Department has previously explained that section 725.309 does not allow the relitigation of denied claims. 64 FR 54968, 54984-85 (Oct. 8, 1999). Once a claim has been denied, and the one-year time period for modification has passed, a claimant cannot thereafter seek to have that claim reopened. Even if he prevails on a subsequent claim, the miner will be unable to obtain benefits for any period prior to the date on which the earlier denial became final. Thus, rather than encouraging repeated relitigation, the Department is simply effectuating Congressional intent that miners who are totally disabled due to pneumoconiosis receive compensation for their injury. Additional or subsequent claims must be allowed in light of the latent, progressive nature of pneumoconiosis. Thus, the additional claim is a different case, with different facts (if the claimant is correct that his condition has progressed). There is no indication that Congress intended to deny a miner benefits, or otherwise penalize him, for erroneously filing an application before his disease had progressed to the point of total disability.
Moreover, as the Department explained in its second notice of proposed rulemaking, the revised version of § 725.309 does not have a reopening effect equivalent to that of H.R. 2108. 64 FR 54972 (Oct. 8, 1999). The House of Representatives passed H.R. 2108 in 1994, but the Senate adjourned without taking action on the legislation. If enacted, the bill would have required the
(j) One comment suggests that the Black Lung Disability Trust Fund should be liable for the payment of any subsequent claims that are approved. The commenter states that imposing the liability for these claims on the insurance industry is fundamentally unfair. The Department disagrees. As revised, section 725.309 does not alter the adjudication of additional claims in any substantive manner. Since 1978, section 725.309 has recognized the need for allowing additional claims and provided the conditions under which such claims could be approved. As the Department has repeatedly emphasized, the revised regulation simply effectuates the gloss given this regulation by the federal courts of appeals. The Department recognizes that additional claims filed after the effective date of these regulatory revisions will be adjudicated under new procedural rules, and under regulations that clarify the entitlement criteria in Part 718 in a manner consistent with appellate interpretations of the existing criteria. The insurance policies purchased by coal mine operators to secure their liability under the Black Lung Benefits Act require the insurer to assume the risk of adverse appellate court interpretations of the statute and regulations as well as the possibility of revision of the statutory criteria.
(k) A number of comments voice their approval of the changes in the Department's second notice of proposed rulemaking. No other comments have been received concerning this section and no other changes have been made to it.
(a) In its first notice of proposed rulemaking, the Department proposed amending subsection (b) to limit the documentary medical evidence that parties are entitled to submit in connection with a request for modification. 62 FR 3353 (Jan. 22, 1997). The Department amended subsection (c) to reconcile a number of appellate decisions concerning the district director's ability to conduct modification proceedings under the Black Lung Benefits Act and to ensure that any party requesting modification receives a
(b) One comment argues that the Department's proposed regulation destroys the effect of claim preclusion and issue preclusion, while another comment suggests that the revised regulation would allow an adjudicator simply to reweigh the evidence of record and reach a conclusion different from the one reached before. Both observations are correct, and both outcomes are mandated by the statutory language that the regulation implements, 33 U.S.C. 922, incorporated into the Black Lung Benefits Act by 30 U.S.C. 932(a). In
(c) Two comments renew the argument that the Department should not be able to initiate modification in responsible operator cases. The Department responded to a similar comment in its second notice of proposed rulemaking by citing the clear statutory language providing the district director with the independent authority to initiate modification. (“Upon his own initiative, * * *, on the ground of a change in conditions or because of a mistake in a determination of fact * * * the deputy commissioner may * * * issue a new compensation order. * * * 33 U.S.C. 922(a), as incorporated by 30 U.S.C. 932(a)). The Department also observed that there were awarded cases in which a coal mine operator is nominally liable for the payment of benefits but, because of bankruptcy, dissolution, or other events, can no longer pay. In such cases, the Department noted the district director's need to exercise his modification authority. 64 FR 54986 (Oct. 8, 1999). In response, one commenter requests that the Department limit its authority to initiate modification to those specific cases involving operator bankruptcy. The Department declines to do so. The district director's initiation of modification in any case, whether the defendant is a responsible operator or the Trust Fund, is consistent with Congress's intent. Congress has included in the Black Lung Benefits Act section 22 of the Longshore and Harbor Workers' Compensation Act, a workers' compensation program in which the overwhelming majority of cases represent disputes between an employee and his private employer. Thus, Congress clearly contemplated that the district director would exercise his modification authority in cases involving private employers. The examples provided by the Department in its second notice of proposed rulemaking were not intended to be an exclusive listing of the circumstances in which a district director would be justified in initiating modification in a responsible operator case. Because the
(d) One comment argues that an operator seeking to modify a benefits award should not be able to obtain new pulmonary testing, but should instead be limited to the report of one consultant. The commenter also argues, however, that miners should be able to submit the results of additional testing in support of a modification petition seeking to change a denial of benefits to an award. The Department does not agree that opposing parties should be governed by different evidentiary rules. One of the Department's goals in proposing a limitation on the submission of documentary medical evidence, as reflected in § 725.414 and § 725.310, is to ensure that claimant and the responsible operator have an equal opportunity to present the highest quality evidence to the factfinder. That goal would not be served by creating an evidentiary advantage for a claimant who requests modification of a denial of benefits. In such cases, both the claimant and the responsible operator, or Trust Fund in appropriate cases, will be entitled to submit one medical report, and associated testing, as well as appropriate rebuttal evidence, as outlined in the Department's second notice of proposed rulemaking.
(e) One comment argues that in light of the evidentiary limitations imposed by section 725.310 and 725.408, an operator will be deprived of its ability to seek modification of an erroneous responsible operator determination that is discovered after the hearing. The Department disagrees that the regulations will always prevent an operator from seeking modification of a responsible operator determination based on newly discovered evidence. It is true, however, that the regulations limit the types of additional evidence that may be submitted on modification and, as a result, an operator will not always be able to submit new evidence to demonstrate that it is not a potentially liable operator.
The Department explained in its previous notices of proposed rulemaking that the evidentiary limitations of §§ 725.408 and 725.414 are designed to provide the district director with all of the documentary evidence relevant to the determination of the responsible operator liable for the payment of benefits. The regulations recognize, and accord different treatment to, two types of evidence: (1) Documentary evidence relevant to an operator's identification as a potentially liable operator, governed by § 725.408; and (2) documentary evidence relevant to the identity of the responsible operator, governed by § 725.414 and 725.456(b)(1). Under section 725.408, a coal mine operator that has been identified as a potentially liable operator by the district director with respect to a particular claim for benefits must contest that identification within 30 days of the date on which it receives that notification, and must submit certain evidence within 90 days of receipt of notification. § 725.408(a), (b). The specific issues on which the operator must submit all of its documentary evidence within this 90-day period include whether the operator was an operator after June 30, 1973; whether it employed the miner for a cumulative period of not less than one year; whether the miner was exposed to coal mine dust while working for the operator; whether the operator employed the miner for at least one day after December 31, 1969; and whether the operator is financially capable of assuming liability for the payment of benefits. The time period for submitting this evidence may be extended for good cause, § 725.423, but the operator may not thereafter submit any further documentary evidence on these issues. § 725.408(b)(2).
Sections 725.414 and 725.456(b)(1) govern the remaining documentary evidence relevant to the liability issue,
The operator's ability to seek modification based on additional documentary evidence will thus depend on the type of evidence that it seeks to submit. Where the evidence is relevant to the designation of the responsible operator, it may be submitted in a modification proceeding if extraordinary circumstances exist that prevented the operator from submitting the evidence earlier. For example, assume that the miner's most recent employer conceals evidence that establishes that it employed the miner for over a year, and that as a result an earlier employer is designated the responsible operator. If that earlier employer discovers the evidence after the award becomes final, it would be able to demonstrate that extraordinary circumstances justify the admission of the evidence in a modification proceeding.
That same showing, however, will not justify the admission of evidence relevant to the employer's own employment of the claimant. Under § 725.408, all documentary evidence pertaining to the employer's employment of the claimant and its status as a financially capable operator must be submitted to the district director. The comment appears to suggest that there will be cases in which an operator discovers evidence bearing on its own employment of the miner after the period for submitting evidence has closed. The Department does not believe that there are extraordinary circumstances sufficient to justify the admission of this evidence in any further proceedings. The evidence in question is within the control of the operator notified by the district director or, where an insurance company is the real party-in-interest, in the control of a party with whom that insurer has contracted to provide necessary coverage. The time period set forth in section 725.408 is adequate to permit a full investigation and development of this evidence. If the operator or insurer is unable to locate the evidence within that period, it should seek an extension of time from the district director.
A party's ability to seek reconsideration under § 22 of the Longshore and Harbor Workers' Compensation Act is subject to the limitation that reconsideration must “ ‘render justice under the Act.’ ”
(f) One comment argues that the Department has not taken sufficient steps to prevent the misuse of modification by claimants who file repeated modification petitions. The commenter has supplied no information that suggests there is a widespread problem involving the filing of non-meritorious modification petitions by claimants. Like operators, claimants may only obtain such reconsideration as will render justice under the Act, and operators remain free to assert, on a case-by-case basis, that the application of this standard requires a denial of a claimant's request for modification. The Department does not believe, however, that it should establish numerical or temporal limitations (
(g) One comment suggests that the proposal authorizes claimants to petition for modification in order to avoid the repayment of an overpayment. The Department does not believe that the regulation addresses this situation. The Department's current practice, in cases in which payments from the Black Lung Disability Trust Fund have been made based on the district director's initial determination, and benefits have subsequently been denied by a higher tribunal, has been to suspend the collection of any potential overpayment if that denial has been appealed further. The Department currently permits its district directors to exercise discretion as to whether to suspend collection where the original denial has become final and the claimant has filed a request for modification. For example, in cases where the request is based solely on a change in the miner's condition, a district director could reasonably conclude that the overpayment of benefits for a period prior to that change should not be suspended. In both former § 725.547(c) and new § 725.549(a), district directors are permitted to “issue appropriate orders to protect the rights of the parties.” The Department anticipates that any disputes over the collection of overpayments will be resolved under that provision. Accordingly, there is no need to address the collection of overpayments in the regulation governing modification.
(h) No other comments have been received concerning this section, and no other changes have been made to it.
(a) The Department proposed revising § 725.311 in its first notice of proposed rulemaking in order to remove the rule allowing parties an additional 7 days within which to respond to a document that is sent by mail, and to add the birthday of Martin Luther King, Jr., to the list of legal holidays contained in the regulation. 62 FR 3354 (Jan. 22, 1997). The Department also sought to resolve a split between the Courts of Appeals for the Fourth and Tenth Circuits governing the time period for responding to a document which was supposed to be served by certified mail but was not.
(b) One comment objects to deletion of the seven-day grace period, formerly applicable to all documents sent by mail, arguing that the Department has no good reason to eliminate it. The commenter also suggests that, if the grace period is not replaced with something else, the regulation will cause unnecessary litigation over deadlines and the unnecessary deprivation of the parties' rights.
When the Department first proposed section 725.311,
Accordingly, the Department has eliminated the seven-day grace period insofar as it formerly applied to all documents served by mail. The Department believes that, rather than increasing litigation, the revised regulation will provide the parties with more exact notice of when pleadings are due, and thus will reduce litigation over issues raised by the seven-day grace period. As a general rule, the analogy between the Department's black lung regulations and the federal rules is inexact. The federal rules govern the filing of a variety of pleadings, including responses to complex motions. Rule 6(e) attempts to ensure that a party receives the full amount of time—usually thirty days—allotted by the drafters of the rules for preparing a response. In contrast, the documents whose filing is governed by Part 725 are relatively straightforward and simple. They include responses to a schedule for the submission of evidence issued under § 725.410, which will contain the district director's designation of the responsible operator, and a proposed decision and order issued under § 725.418. The regulations require that a party do no more within the initial 30-day period following the issuance of these documents than indicate its agreement or disagreement with the assertions or findings contained in the document. The Department believes that this 30-day time period, commencing with the date the document is sent, provides ample time for the parties' responses. Deleting the grace period
The Department recognizes that one of the filings governed by Part 725 is more complex. Section 725.408 requires that an operator that has been identified by the district director of its status as a potentially liable operator must accept or contest that identification within 30 days of the date on which it receives notification from the district director. That response requires the operator to address five specific assertions: that the operator was an operator after June 30, 1973; that the operator employed the miner for a cumulative period of not less than one year; that the miner was exposed to coal mine dust while working for the operator; that the miner's employment with the operator included at least one working day after December 31, 1969; and that the operator is capable of assuming liability for the payment of benefits. That response requires more investigation than the others in Part 725. In addition, unlike the other response times governed by Part 725, the operator's response does not begin to run on the date that the notification is mailed, but on the date that it is received. In order to ensure that operators have the full 30 days in which to file their responses, and to allow the Department to assess the timeliness of that response, the Department has added a sentence to subsection (d). This provision will allow the district director to presume, in the absence of evidence to the contrary, that the notice was received seven days after it was mailed.
(c) One comment urges enlarging the number of communications which must be sent by certified mail to include several types of decisional documents issued by the district director. Specifically, the commenter suggests use of certified mail to serve the following documents: initial determination; proposed decision and order; decision on modification; denial by reason of abandonment; notice of conference; and memorandum of conference. The Department's revised regulations ensure that all important documents are served by certified mail. See proposed § 725.407(b) notification of potentially liable operator, § 725.409(b) (denial by reason of abandonment); § 725.410(c) (evidentiary submission schedule); § 725.418(b) (proposed decision and order). The revised regulations eliminate the district director's initial finding and memorandum of conference. The “initial determination” is a document, served on all the parties after the issuance of a proposed decision and order, requesting that the designated responsible operator commence the payment of benefits. It does not require a written response. 20 CFR 725.420 (1999). With respect to a case in which a petition for modification is being adjudicated, the district director may issue either a proposed decision and order or a denial by reason of abandonment at the conclusion of the proceedings; both of these documents must be served by certified mail. The Department believes the current requirements provide adequate protection for the parties, and therefore declines to add the notice of conference to the list of documents which must be served by certified mail. Section 724.416, governing the conduct of informal conferences, permits the imposition of sanctions only for a party's unexcused failure to attend. In the case of a claimant, the district director must offer the claimant an opportunity to explain why he did not appear at the conference.
(d) Two comments urge the Department to afford a party either a rebuttable presumption or a conclusive finding of non-receipt of a document if it must be sent by certified mail, the party alleges a failure to receive it, and the Department cannot produce a signed return receipt. The recommended presumption is not necessary. In the foregoing circumstances, an allegation of non-receipt and absence of the signed return receipt is sufficient to impose on the Department the burden to prove by some other evidence that the individual received the document. The lack of the signed receipt itself, however, should not be conclusive if other circumstances demonstrate the individual actually received the document. The Department therefore declines to amend the proposal.
(e) One comment argues that subsection (d) is inconsistent with existing law. The commenter believes subsection (d) requires the response time to commence upon
(f) No other comments concerning this section were received, and no changes have been made in it.
The Department made only technical changes to section 725.351 in its initial notice of proposed rulemaking, and the rule was not open for comment.
In its initial notice of proposed rulemaking, the Department proposed revising section 725.362 in order to conform the regulation to the requirements of 5 U.S.C. 500(b), which allows an attorney to enter an appearance without submitting an authorization signed by the party he represents. The Department also proposed adding a requirement that a notice of appearance, whether by an attorney or by a lay representative, include the OWCP number of the claim. 62 FR 3354 (Jan. 22, 1997). The Department did not discuss the rule in its second notice of proposed rulemaking.
The Department received one comment relevant to § 725.365. This section was not open for comment; it was repromulgated without alteration for the convenience of the reader.
The Department has received one comment relevant to § 725.366. This
(a) In its initial notice of proposed rulemaking, the Department proposed a number of revisions to clarify the application of section 28 of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 928, as incorporated by 30 U.S.C. 932(a), and made relevant to adjudications under the Black Lung Benefits Act. 62 FR 3354 (Jan. 22, 1997). The regulation provided a non-exclusive list of instances in which an operator could be held liable for the payment of a claimant's attorney's fee, and recognized the Trust Fund's liability for fees by making it coextensive with that of a responsible operator. The Department proposed a substantial revision of this regulation in its second notice of proposed rulemaking. 64 FR 54987-88 (Oct. 8, 1999). Because the evidentiary limitations proposed by the Department make legal representation for claimants advisable at the earliest possible stage of claims adjudication, the Department revised the regulation to require operators or the Trust Fund to pay a reasonable fee for any necessary work done even if the work was performed prior to the date on which the operator controverted the claimant's entitlement to benefits. Thus, although the creation of an adversarial relationship and the ultimately successful prosecution of a claim were still necessary to trigger employer or fund liability for attorneys' fees, the date on which the adversarial relationship commenced no longer served as the starting point for such liability. The Department rejected comments suggesting that lay representatives should be entitled to collect fees from responsible coal mine operators or the fund. The Department also discussed the several appellate court decisions and their impact on responsible operator and fund liability for attorneys' fees.
(b) The Department has revised the first sentence of subsection (a)(1) and the first sentence of subsection (a)(2) in order to reflect changes to §§ 725.410 and 725.412. In place of the former initial finding, the district director will issue a schedule for the submission of additional evidence under § 725.410. This schedule will include the district director's preliminary analysis of the medical evidence of record, and his designation of the responsible operator liable for the payment of benefits. Section 725.412 provides that, following receipt of the schedule, the designated responsible operator may file a statement accepting the claimant's entitlement to benefits. The operator may avoid any liability for attorneys' fees by filing this statement within 30 days of the issuance of the schedule. If it fails to do so, the responsible operator will be considered to have created an adversarial relationship between the operator and the claimant. If the district director exercises his authority under § 725.415 or § 725.417 to issue another schedule for the submission of additional evidence in order to designate a different operator as the responsible operator, and that operator is ultimately determined to be liable for the payment of benefits, that operator will be liable for the payment of attorneys' fees only if it fails to accept the claimant's entitlement within 30 days of the date upon which it is notified of its designation. In cases where there is no operator liable for the payment of benefits, the district director's issuance of a schedule for the submission of additional evidence will create the adversarial relationship between the Black Lung Disability Trust Fund and the claimant, such that the Trust Fund will be liable for attorneys' fees if the claim is successfully prosecuted. Similarly, in subsection (a)(4) the Department has deleted the reference to an operator's “notice of controversion” contesting a claimant's request for an increase in the amount of benefits payable. As revised, the regulations do not require a specific notice of controversion to create the adversarial relationship between a claimant and an employer.
The Department has also substituted the phrase “reasonable fees for necessary services” for the phrase “fees for reasonable and necessary services” in subsection (a), and has substituted the phrase word “necessary” for the word “reasonable” in subsections (a)(1)-(5). The changes make the regulation consistent with § 725.366(a). The previous wording was not intended to create a different test for gauging the need for an attorney's services, and the revision will eliminate any potential confusion.
(c) Two comments argue that the Department's proposal violates the plain language of the incorporated provision of the Longshore and Harbor Workers' Compensation Act governing the payment of attorneys' fees. Specifically, they argue that section 28 permits employer liability for a claimant's attorney's fees only for services rendered after the employer controverts the applicant's eligibility for benefits. One of the commenters also cites the expectation, created by the statute, that a claimant is responsible for a portion of the fees owed to his attorney and specifically the fee for any service provided before the employer controverts the applicant's entitlement. The commenter suggests that, by removing that responsibility from the claimant, the Department has not properly implemented the statute.
The Department does not agree that the revised regulation violates the plain language of the statute. The only court to have considered this issue is the Court of Appeals for the Fourth Circuit. In
The Department is fundamentally altering the obligations of the parties at the district director level in a manner that will encourage claimants to consult with attorneys much earlier in the process. Among other things, the Department is limiting the quantity of medical evidence that all parties are entitled to submit. In addition, at the claimant's request, the Department will provide his treating physician with the test results obtained during the complete pulmonary evaluation authorized by section 413(b) of the Act, 30 U.S.C. 923(b). Because these revisions will require claimants to make critical decisions at the earliest stage of adjudication, the regulations must also encourage attorneys to represent claimants as early as possible. The Department hopes that claimants will receive advice when that advice is most helpful. Insurance carriers, who are primarily liable in cases in which they provide insurance to the responsible operator, as well as self-insured operators, most commonly have the assistance of experienced attorneys and claims processing agents in the early
In addition, contrary to the suggestion of the commenter, the Department's proposal does not eliminate all instances in which a claimant may be responsible for his attorney's fees. Section 28(c), 33 U.S.C. 928(c), states that “[a]n approved attorney's fee, in cases in which the obligation to pay the fee is upon the claimant, may be made a lien upon the compensation due under an award.” The commenter argues that a claimant will never be liable for attorneys' fees under the Department's proposal, and that the proposal thus contravenes the statutory language. The Department does have the authority to vary incorporated provisions of the Longshore Act for purposes of administering the Black Lung Benefits Act,
(c) One comment observes that the Department's revisions would expand the availability and award of attorneys' fees, while another argues that the Department's provision may not be applied retroactively. It has consistently been the Department's position that before liability for a claimant's attorney's fee may shift to a responsible operator or the fund, there must be a controversion of entitlement sufficient to create an adversarial relationship followed by the successful prosecution of a claim. Nothing in this regulation alters that requirement. The Department does agree, however, that once these prerequisites are met, the revised regulation could result in the award of higher attorneys' fees. The Department believes that an increase in attorneys' fees is necessary in order to encourage earlier attorney involvement in the adjudicatory process, and that such involvement will be helpful to claimants in light of the evidentiary restrictions imposed by these regulations. The Department also hopes to encourage a larger number of attorneys to represent claimants by allowing the award of higher fees. During the rulemaking hearings, witnesses repeatedly brought to the Department's attention that few attorneys are willing to represent claimants, in part because of the many restrictions on the award of attorneys' fees. Transcript,
(d) Several comments agree with the Department's revisions, but two urge the Department to take further steps to increase the participation of attorneys in black lung benefits adjudications by providing additional attorney funding from the Black Lung Disability Trust Fund. Specifically, the commenters urge the Department to make funds available to pay black lung associations and other non-profit groups assisting claimants or to advance fees awarded to claimant attorneys litigating against responsible operators before the award of benefits becomes final. The commenters also urge the Department to repeal the prohibition on receiving fees for time spent preparing a fee petition, and to clarify the right of attorneys to obtain fees for time spent litigating their right to fees.
The Department cannot agree that amounts from the Trust Fund should be made available to pay additional attorneys' fees. In its initial proposal, the Department observed that one of its goals in revising the regulation of attorneys' fees was to ensure that the liability of the Trust Fund for such fees was coextensive with that of a liable coal mine operator. 62 FR 3354 (Jan. 22, 1997). This liability derives from a series of appellate court opinions holding that the Trust Fund must stand in the shoes of a coal mine operator in any case in which no operator may be held liable for the payment of benefits. 62 FR 3354 (Jan. 22, 1997). Those opinions rejected the Department's argument that the Trust Fund could not be held liable for any attorneys' fees. Although the Department's regulations have been revised to acknowledge the Trust Fund's liability under these circumstances, the Department does not believe that the statute can be read in the manner suggested by these commenters to authorize the expenditure of additional amounts of Trust Fund moneys to increase counsel availability for black lung claimants.
With respect to time spent preparing a fee petition and litigating the issue of attorneys' fees, two comments seek the revision of material in § 725.366. Because § 725.366 was not listed among the regulations open for comment, no changes are being made in it. 62 FR 3341 (Jan. 22, 1997); 64 FR 54970 (Oct. 8, 1999). Moreover, the regulation's current language does not prohibit an attorney from receiving a fee for time spent litigating the amount of his attorney's fees, and the Department does not believe that more explicit language is necessary. The Benefits Review Board has held that time spent by an attorney defending a fee represents “necessary work done,” so as to entitle the attorney to an additional fee under 20 CFR 802.203(c) (1999),
(e) No other comments were received concerning this section, and no changes have been made in it.
The Department made only technical revisions to § 725.403 in its first notice of proposed rulemaking, and the regulation was not open for comment. 62 FR 3341 (Jan. 22, 1997). In its second notice of proposed rulemaking, the Department proposed deleting § 725.403. 64 FR 54988 (Oct. 8, 1999). Section 725.403 implemented the requirement in 30 U.S.C. 923(c) that claimants who filed applications under the Black Lung Benefits Act between July 1 and December 31, 1973, 30 U.S.C. 925, must file a claim under the workers' compensation law of their state unless such filing would be futile. Because the time period for filing such claims expired over 25 years ago, the Department proposed removing § 725.403, and specifically invited comment on its removal. The Department did not receive any comments on the proposed removal of § 725.403 and therefore has removed it from further publications of the Code of Federal Regulations. The Department has not altered the rules applicable to any claim filed between July 1 and December 31, 1973, however. Parties interested in reviewing § 725.403 may consult 20 CFR 725.403 (1999).
The Department received one comment relevant to § 725.404. The Department made only technical revisions to this section, and the regulation was not open for comment;
(a) In its first notice of proposed rulemaking, the Department proposed revising subsection (b) to recognize its practice of refusing to provide a complete pulmonary evaluation to claimants who never worked as a miner. 62 FR 3354 (Jan. 22, 1997). The Department did not discuss § 725.405 in its second notice of proposed rulemaking.
(b) Two comments argue the regulation is too limited because it does not address the district director's obligation to develop evidence other than medical evidence. The Department disagrees. The specific purpose of this regulation is stated in its title: “Development of medical evidence; scheduling of medical examinations and tests.” The development of evidence in general is addressed at § 725.404. In any event, subsection (d) of § 725.405 authorizes the district director to collect “other evidence” concerning the miner's employment and “[a]ll other matters relevant to the determination of the claim.” This language is sufficiently broad to acknowledge the district director's obligations concerning evidentiary development of a claim as well as the authority to discharge those obligations. No useful purpose would be served by a more specific enumeration of particular areas of inquiry in this provision.
The type of inquiry urged by these commenters is covered in more detail elsewhere in the Secretary's regulations. Section 725.495(b) imposes on the Director, OWCP, the burden of proving that the responsible operator designated liable for the payment of benefits is a potentially liable operator. In addition, § 725.495(d) requires that if the responsible operator designated for the payment of benefits is not the operator that most recently employed the miner, the district director must explain the reasons for his designation. These provisions make necessary the district director's gathering of a miner's employment history, including, in most instances, his Social Security earnings record. Indeed, § 725.404(a) requires each claimant to furnish the district director with a complete and detailed history of coal mine employment and, upon request, supporting documentation. The district director must send to each operator notified of its potential liability for a claim copies of the claimant's application and all evidence obtained by the district director relevant to the miner's employment. § 725.407(b), (c). If the district director concludes that the miner's most recent employer cannot be designated the responsible operator because it is not financially capable of assuming liability for the payment of benefits, the district director must explain his conclusion based on a search of the records maintained by the OWCP. § 725.495(d). Only if the OWCP has no record of insurance or authorization to self-insure for that last employer, and the record so states, may OWCP name an employer other than the miner's most recent as the responsible operator for the claim. Thus, the district director's obligation to develop the evidence of record, other than medical, is set forth elsewhere in the regulations where relevant.
(c) One comment recommends changing the regulatory reference to “miner” in paragraph (a) from § 725.202 to § 725.101(a)(19). This recommendation is rejected. While both sections define “miner,” § 725.202 provides the more detailed definition as well as the criteria and presumptions which apply to determining whether a particular individual satisfies the definition.
(d) No other comments were received concerning this section, and no changes have been made in it.
(a) In its first notice of proposed rulemaking, the Department proposed revising § 725.406 to address the relationship between the evidentiary limitations contained in § 725.414 and the complete pulmonary evaluation provided by the Department under 30 U.S.C. 923(b). 62 FR 3354-55 (Jan. 22, 1997). As initially proposed, § 725.406 retained the Department's practice of allowing a claimant to select the physician to perform the complete pulmonary evaluation at the Department's expense. In those cases, however, the report generated by the evaluation would have counted as one of the two reports that the claimant was entitled to submit into evidence. If, on the other hand, the claimant went to a physician selected by the Department, the evaluation would not count against the limitations imposed on the claimant. Instead, in cases in which the Black Lung Disability Trust Fund would bear liability for benefits, such a report would count as one of the two reports that could be offered by the Director. In cases in which a responsible operator was potentially liable for benefits, the complete pulmonary evaluation provided by a doctor of the Department's choosing would not have counted against the evidentiary limit imposed on either the responsible operator or the claimant. The Department also discussed its responsibilities for ensuring that the report, and each component of the evaluation, substantially complied with the Department's quality standards. Finally, the Department clarified the mechanism by which it might seek reimbursement of the cost of the evaluation from an operator that had been finally determined to be liable for the payment of claimant's benefits.
The Department proposed major revisions to § 725.406 in its second notice of proposed rulemaking. 64 FR 54988-990 (Oct. 8, 1999). The Department agreed with commenters who suggested that it placed an unnecessary burden on a claimant to choose whether or not to select a physician to perform his complete pulmonary evaluation. In most cases, such a choice would be made before a claimant obtained representation, and could result in a claimant being limited
The Department further stated its intent to develop more rigorous standards for selecting physicians authorized to perform a complete pulmonary evaluation. The Department's suggested standards included: (1) Qualification in internal or pulmonary medicine; (2) ability to perform each of the necessary tests; (3) ability to schedule the claimant for an evaluation promptly; (4) ability to produce a timely, comprehensive report; and (5) willingness to answer follow-up questions and defend his conclusions under cross-examination. The Department specifically sought comment on these and other standards for selecting physicians to be included on its list, 64 FR 54989 (Oct. 8, 1999). In addition, the Department stated its intention to survey clinics and physicians on the fees they charged for these services, with the goal of attracting highly qualified doctors to perform the testing and evaluation required by the Department for the complete pulmonary evaluation. The Department also added subsection (d) to the proposed regulation in order to allow a claimant to have the Department send the objective test results obtained in connection with the complete pulmonary evaluation to his treating physician. The Department noted its intent to make available to each claimant at least one set of legally sufficient objective test results so that no claimant would be hindered by a lack of financial resources in pursuing his application for benefits. 64 FR 54989 (Oct. 8, 1999).
The Department rejected comments suggesting the deletion of subsection (e), permitting the district director to clarify “unresolved medical issues.” The Department also discussed comments concerning the district director's ability to determine whether all parts of the complete pulmonary evaluation were in substantial compliance with the Department's quality standards. The Department revised subsection (c) to provide a claimant whose initial tests do not comply with the quality standards due to a lack of effort with one additional opportunity to take those tests. Finally, the Department discussed its treatment of subsequent claims, in which the Department provides a new complete pulmonary evaluation, and modification requests, in which it does not. 64 FR 54989-90 (Oct. 8, 1999).
(b) Several comments continue to oppose subsection (e), observing that if the Department develops a list of highly qualified physicians to perform the complete pulmonary evaluation, it should have no need to seek the opinion of yet another physician at this stage of the adjudication. Another comment objects to the proposed substitution of evidence under subsection (e), calling it the destruction of relevant evidence. In response to the initial proposal, the same commenter objected to subsection (e) because the district director's authority to have the miner retested and reexamined invited piecemeal and protracted evidentiary development. The Department has reconsidered the authority granted by subsection (e), and agrees that the provision should be deleted. The Department has relabeled subsection (f) as subsection (e) to accommodate this revision. The deletion of subsection (e) does not affect the district director's authority under subsection (c) to determine whether the individual components of the complete pulmonary evaluation have been administered and reported in compliance with the Department's quality standards. The Department agrees, however, that the district director should have no need to send the claimant for additional examination and testing after completion of a complete pulmonary evaluation, the components of which are in substantial compliance with the applicable quality standards, § 725.406(a)-(c). Under revised § 725.406, the initial evaluation will be performed by a highly qualified physician who may be asked to clarify and/or supplement an initial report if unresolved medical issues remain.
(c) Two comments state that a miner should be entitled to choose an authorized physician anywhere in the country to perform his complete pulmonary evaluation rather than being limited to one from his state of residence or a contiguous state. The commenters state that claimants would be willing to pay the additional costs incurred as a result of such travel. Although the commenters suggest that there will not be a sufficient supply of physicians in some areas, such as Wyoming and Alabama, the Department has no evidence that would support that contention. Moreover, even if the Department is unable to obtain a sufficient pool of physicians in certain states (a pool that includes physicians in all contiguous states), the Department will simply adjust the procedural rules applicable to claimants who reside in those states. The absence of a sufficient pool of physicians in some limited number of states would not justify a national exception to the policy of requiring claimants to submit to a complete pulmonary evaluation in their own region. In addition, claimants remain free to go to any physician of their choosing for the development of evidence in support of their claims.
(d) One comment argues that claimants should be randomly assigned to physicians on the Department's list rather than allowing claimants their own choice. The Department disagrees. The list that the Department ultimately compiles will contain physicians who are well-qualified to perform complete pulmonary evaluations, and whose opinions the Department is willing to accept in the initial stages of adjudication of the claimant's eligibility. Claimants may already be acquainted with one or more physicians on the list, and requiring that claimant submit to an examination by a different physician, perhaps in a neighboring state, would be inefficient. Accordingly, the Department has not changed the regulation.
The commenter also argues that the mere fact that a physician is included on the Department's approved list by meeting the Department's standards does not guarantee that the physician will provide an impartial opinion, particularly when a claimant has a role in selecting the physician who will perform the complete pulmonary evaluation. The Department does not believe that it is required to provide an absolute guarantee of the impartiality of physicians selected for inclusion on the list. By establishing high standards for the performance of these evaluations, and by ensuring that only highly qualified physicians are included on the approved list, the Department will be taking appropriate steps to ensure impartial opinions. In addition, the Department has revised subsection (c) to limit a miner's choice of the examining physician in two respects. First, the miner may not select a close relative of himself or his spouse. The regulation uses the term “fourth degree of consanguinity” to exclude, among others, parents, children, grandchildren, brothers, sisters, nephews, nieces, aunts, uncles, and first cousins from those individuals otherwise qualified to perform a complete pulmonary evaluation. Second, the miner may not select any physician who has examined him or treated him in the year preceding
(e) Several comments argue that the Department needs to make public the criteria it will use to select physicians for inclusion on the list. In its second notice of proposed rulemaking, the Department notified interested parties that these criteria will be published in the Department's Black Lung Program Manual which will be available to the public. 64 FR 54989 (Oct. 8, 1999). Interested parties will thus be able to monitor the Department's standards and use of these standards in selecting physicians for inclusion on the list.
In addition, a number of commenters responded to the Department's request for comments on the standards that the Department proposed to use to select physicians. Two commenters emphasized the importance of requiring that the evaluations be performed by a physician board-certified in internal medicine or a physician board-eligible in pulmonary medicine or one with extensive knowledge of pulmonary disease. The Department will make every effort to ensure that its list includes highly qualified physicians. Optimally, the Department will be able to enlist the services of Board-certified internists who have a subspecialty in pulmonary medicine, who are Board-eligible in pulmonary medicine, or who can demonstrate extensive experience in the diagnosis and treatment of pneumoconiosis to perform complete pulmonary evaluations. There may be circumstances, however, in which there will not be a sufficient supply of such highly qualified physicians willing to perform the evaluation. In such areas, the criteria will need to afford the Department enough flexibility to ensure an adequate supply of physicians who meet certain minimum qualifications, such as affiliation with a black lung clinic funded in part by the Department of Health and Human Services.
Two comments urge the Department to rule out physicians who have demonstrated that they do not accept one or more of the basic premises of the Black Lung Benefits Act. These commenters urge the Department to review the opinions and depositions of each physician who seeks to be included on the list, eliminating those with opinions which make it impossible to provide a sound evidentiary basis for the district director's initial decision. Another comment urges the Department to accept any physician who applies for inclusion on the list provided that the physician possesses the necessary professional qualifications. As an initial matter, the Department does not intend to screen physicians who apply for inclusion on the list beyond satisfying itself that the basic requirements for inclusion are met. The Department simply does not have the resources to conduct an intensive review of the medical reports and/or deposition testimony submitted by each physician in previous black lung cases. The Department reserves the right, however, to exclude from its list of approved physicians those who prove unable to provide opinions that are consistent with the premises underlying the statute and the Secretary's regulations. The federal courts of appeals have held that a denial of benefits may not be based on a medical opinion that is fundamentally at odds with the premises of the Black Lung Benefits Act.
(f) One comment states that the regulation should require the district director to explain to a claimant the possible consequences of having his test results provided to his treating physician. The Department intends to provide such information to claimants,
(g) One comment states that the Department's requirements prevent physicians from exercising their professional judgment by dictating the tests that they are required to perform and by emphasizing promptness and timeliness over completeness and thoroughness. The Department disagrees. The Act authorizes the Department to set minimal quality standards for medical evidence. Reports of physical examination must substantially comply with the applicable quality standards, § 718.104. That regulation requires that a report of physical examination be based on, among other things, a chest X-ray, a pulmonary function test, and a blood gas study, unless medically contraindicated. Because these tests are necessary for a complete pulmonary evaluation, the Department has authorized their performance under § 413(b) of the Act, 30 U.S.C. 923(b), for the last two decades. The Department expects that each physician included on the list will not only be able to administer these tests, but will commit to doing so in substantial compliance with the Department's quality standards, §§ 718.102-.106. The Department does not believe that its requirements prevent a physician from preparing a thorough and complete medical report. In order to process claims expeditiously, however, the Department must also ensure that the examination is scheduled promptly, and the resulting report is prepared in a timely manner. The Department recognizes that, in some cases, the claimant's choice of a physician may result in a slight delay if the physician he has selected is busy. The delay in such a case, however, is solely within the control of the claimant. If he is willing to accept the delay, he may wait for that physician. If not, he may choose another from the Department's approved list.
(h) Several comments approved of the revisions affording the claimant the right to select a doctor to perform the complete pulmonary evaluation from an approved list.
(i) No other comments were received concerning this regulation.
(a) In its first notice of proposed rulemaking, the Department proposed moving subsections (a) and (c) of 20
In its second notice of proposed rulemaking, the Department proposed revising subsection (d) to permit the district director to notify additional potentially liable operators after an administrative law judge reversed a district director's denial by reason of abandonment pursuant to § 725.409 and remanded the case for further proceedings. 64 FR 54990 (Oct. 8, 1999). The Department observed that without this provision, subsection (d) could have been read to prohibit the notification of additional operators, notwithstanding the fact that the district director had not been able to complete his administrative processing of the claim before its referral to the Office of Administrative Law Judges. In addition, the Department rejected a suggestion that it provide guidelines for district directors to use in determining the cases in which it would be appropriate to name more than one potentially liable operator.
(b) The Department has made two changes to § 725.407 to conform to changes to other regulations in this subpart. The Department has deleted the reference to a district director's initial finding in subsection (a) because the district director will no longer issue initial findings. The Department has replaced the reference to § 725.413 in the first sentence of subsection (d) with a reference to § 725.410(a)(3). This change reflects a move to § 725.410 of the district director's authority to dismiss potentially liable operators that the district director has previously notified.
(c) One comment objects that the Secretary's regulations preclude the dismissal of potentially liable operators who can prove that they were not properly named. This comment is more appropriately addressed under § 725.465, the regulation governing the dismissal of claims and parties.
(d) One comment argues that the revised regulation will raise the litigation costs of responsible operators. The commenter observes that the Department does not dispute the allegation, made in response to the Department's first notice of proposed rulemaking, that the Department's changes will generally increase litigation costs by $6,000 per claim. The commenter states that the revisions in the Department's second notice of proposed rulemaking will result in an additional $6,000 in costs per claim. With regard to the first figure, the commenter appears to have mischaracterized its prior comment. An economic analysis conducted by Milliman & Robertson, Inc., and submitted to the Department in response to the first notice, was based in part on an assumption that “the average defense costs of $6,000 per claim currently expended by the responsible operators/insurers primarily on claims that are initially awarded or denied and appealed by the claimant (presently, approximately 30% of all claims filed), will be expended on all claims at the earliest stage of adjudication.” Rulemaking Record, Exhibit 5-174, Appendix 5 at 4. This economic analysis did not assert that costs would rise in all cases, but that operators and insurers would be required to incur the cost of fully developing evidence in cases (70 percent of the claims filed) in which they formerly did not have to do so. The analysis did not assert that the Department's proposal would raise litigation costs in the remaining 30 percent of cases. The Department has no basis on which to dispute the industry's statement that its average defense costs, in cases that proceed beyond an initial denial of benefits by the district director, are $6,000. In fact, the economic analysis prepared for the Department in connection with the Regulatory Flexibility Act adopted the figures provided by the Milliman & Robertson economic analysis with respect to the costs of litigating claims at various levels of adjudication. Rulemaking Record, Exhibit 80 at 42.
The Department's second notice of proposed rulemaking, however, undermined the assumption that all of an employer's defense costs would be expended at the earliest stage of adjudication. Under the Department's first proposal, an employer would have been required to develop all of its evidence regarding both its liability as an operator and the claimant's eligibility while the case was pending before the district director. The Department's second notice of proposed rulemaking, however, proposed a substantial alteration in procedure that would permit parties to maintain their current practice of deferring the development of medical evidence until after a case has been referred to the Office of Administrative Law Judges. 64 FR 54993 (Oct. 8, 1999). The Department has adopted this second proposal in these final regulations. Consequently, while potentially liable operators will be required to develop evidence relevant to their liability while claims are pending before the district directors, they will no longer need to expend money on the development of medical evidence in those cases (70% of cases, according to industry estimates) that do not proceed beyond the district director level. In addition, the Department has further revised its regulations to require that all but one potentially liable operator, the one finally designated as responsible operator, be dismissed as parties to the case upon issuance of the district director's proposed decision and order.
Under the revised regulations, potentially liable operators will be required to submit evidence to the district director in each case regarding their employment of the miner.
The industry submitted an additional analysis by Milliman and Robertson to the Department in response to the second notice of proposed rulemaking. Rulemaking Record, Exhibit 89-37, Appendix A. That analysis abandons the assumption that the Department's regulations will cause the expenditure of $6,000 in defense costs in every case, rather than only those that proceed beyond the district director level, and replaces it with an assumption that claims defense costs will rise from their
(e) No other comments have been received concerning this regulation.
(a) The Department proposed eliminating 20 CFR § 725.408 (1999) in its first notice of proposed rulemaking, and replacing it with a regulation designed to elicit necessary information from a miner's former employers. 62 FR 3355-56 (Jan. 22, 1997). As proposed, § 725.408 required any operator notified of its liability under § 725.407 to file a response within 30 days of its receipt of that notification, indicating its intent to accept or contest its identification as a potentially liable operator. Specifically, an operator that contests its liability was required to admit or deny five assertions relevant to that liability: (1) That it operated a coal mine after June 30, 1973; (2) that it employed the miner for a cumulative period of not less than one year; (3) that the miner was exposed to coal mine dust while employed by the operator; (4) that the miner's employment with the operator included at least one working day after December 31, 1969; and (5) that the operator is financially capable of assuming its liability for the payment of benefits. The regulation required the operator to submit all documentary evidence relevant to these issues while the case was pending before the district director, within 60 days from the date on which the operator received notification.
In its second notice of proposed rulemaking, the Department responded to comments that the 60-day time period was too short by enlarging it to 90 days. 64 FR 54990-91 (Oct. 8, 1999). In addition, the Department observed, the period could be extended by the district director for good cause shown pursuant to § 725.423. The Department also acknowledged that, as proposed, the regulation required potentially liable operators to develop and submit evidence in cases that ultimately did not proceed beyond the earliest stage of adjudication. The Department stated that the district director's receipt of this information was necessary, however, in order to ensure that the correct parties were named in those cases that did proceed to the Office of Administrative Law Judges. The Department stated that it did not believe that the cost of developing this evidence would be significant. Finally, the Department rejected the suggestion that it bifurcate the administrative law judge's resolution of entitlement and liability issues.
(b) The Department has modified subsection (a)(1), and has added the phrase “any of” to subsection (a)(3), to clarify the meanings of those sentences.
(c) One comment argues that the Department's revision of this regulation injects additional complexity, adds unnecessary burdens and expense in cases involving multiple operators, and sets traps for unwary litigants. The commenter also argues that the Department's revision is based on the erroneous premise that operators are always better informed as to their employment of the miner. The Department agrees that the revised regulations place additional burdens on coal mine operators who have, in the past, routinely filed form controversions of their liability for benefits and waited until the case was referred to the Office of Administrative Law Judges to develop their defenses. In its first notice of proposed rulemaking, the Department explained its intention to change this practice in order to provide the district director with sufficient information to allow him to identify the proper responsible operator. Requiring the submission to the district director of all evidence relevant to the liability issue has become even more important in the final revision of the Department's rules. As revised, the regulations will permit the district director to refer a case to the Office of Administrative Law Judges with no more than one operator as a party to the claim, the responsible operator as finally designated by the district director. See § 725.418(d) and explanation accompanying § 725.414. The regulations prohibit the remand of cases for the identification of additional potentially liable operators, or to allow the district director to designate a new responsible operator, thereby reducing delay in the adjudication of the merits of a claimant's entitlement. This change also places the risk that the district director has not named the proper operator on the Black Lung Disability Trust Fund, however. 62 FR 3355-56 (Jan. 22, 1997). The Department believes that the additional demands placed upon potentially liable operators are not unreasonable. In addition, the Department does not accept the criticism that the regulation sets traps for unwary litigants. The nature of the evidence required by the Department, and the time limits for submitting that evidence, are clearly set forth in the regulations, and will be communicated to potentially liable operators who are notified of a claim by the district director.
The commenter also argues that the Department's revision is based on the erroneous premise that operators are better able to obtain information about their employment of the miner than is the government. The commenter states that the situation is made more difficult where the employment relationship was remote in time or if the miner worked for many different companies. The Department agrees that, in some cases, it may be more difficult for employers, and particularly for insurers, to readily ascertain the facts of the miner's employment. Clearly, however, operators and insurers are in a better position to ascertain these facts than is the Department of Labor. To the extent that an employer or insurer has difficulty in obtaining evidence in a specific case, it may ask that the time period for developing this evidence be extended. The Department will provide the operators notified of a claim the information that it has, including a copy of the miner's application and all evidence relating to his coal mine employment, § 725.407(c).
(d) One comment argues that the 90-day time limitation for an operator to submit documentary evidence in support of its position as to liability remains inadequate, and that, in any event, it should not commence until the operator receives the claimant's employment history, the Itemized Statement of Earnings obtained from the Social Security Administration, and, where applicable, the policy number of the insurance policy that the Department believes provides appropriate coverage. The Department intends to make every effort to supply a potentially liable operator notified of a claim with all of the information pertinent to that notification. As noted above, this information will include a copy of the employment history provided by the claimant. The Department will also provide the applicable insurance policy number if it has it. Similarly, if the Department has received the Itemized Statement of
(e) Several comments have misconstrued the requirements of § 725.408. Two comments argue that the proposal would shift the burden to the named responsible operator to investigate the proper responsible operator within 90 days and that the 90-day time period is unrealistic for that purpose. One comment argues that the revised regulations are objectionable because they make a responsible operator responsible not only for its own defense but also for the defense of other potentially liable operators. This statement has never been true with respect to liability determinations, and, under the Department's final regulations, is no longer true of entitlement determinations. Another comment argues that DOL's rationale for imposing this time limit on operators—
(f) One comment argues that by creating adversity among the miner's former employers, the Department's revised regulations will create ethical problems for the limited pool of attorneys who currently represent employers in black lung benefits cases, and will therefore deprive employers of their right to the counsel of their choice. The Department acknowledges that the revised regulations increase the adversity among a miner's former employers in any case in which the district director has designated as the responsible operator an operator other than the operator that most recently employed the miner. In such a case, where the designated responsible operator may seek to develop evidence to show that a more recent employer should be designated the responsible operator, an attorney clearly could not represent both employers. Moreover, to the extent that the attorney has previously represented one of the operators, the applicable ethical rules of the attorney's state bar may prevent the attorney from accepting representation of the other operator. In most cases, however, this problem will be more illusory than real. Most of the cases in which the Department will name more than one potentially liable operator will be cases in which the miner's most recent employer is out of business, and had no insurance, or cannot be located. As a general rule, these employers typically have not participated in the adjudication of earlier black lung benefits claims. Accordingly, there will be few, if any, attorneys who will be unable to represent the designated responsible operator. Moreover, in cases in which the interests of potentially liable operators are not directly adverse, state rules typically permit an attorney to represent a client, even if the attorney has represented another party to the case previously, if the attorney obtains the consent of the previous client.
The Department recognizes that there may be a small minority of cases in which a true conflict is unavoidable. For example, if the miner's most recent employer, ABC Coal Co., denies that it employed the claimant as a miner, the Department may also name the miner's next most recent employer, XYZ Coal Co., as a potentially liable operator. An attorney who represented ABC in previous litigation could not now represent XYZ, whose interests are directly adverse. The possibility of such a conflict, however, is not a limitation on the Department's efforts to revise the regulations implementing the Black Lung Benefits Act. The Administrative Procedure Act does guarantee a party the right to be represented by counsel during an administrative adjudication. 5 U.S.C. 555(b). Contrary to the commenter's suggestion, however, nothing in that Act requires an administrative agency to structure its rules in order to preserve the ability of a limited number of attorneys to represent coal mine operators. Where the state ethics rules require an attorney to decline representation of a client, that client is entitled to seek other counsel. The Department does not believe that coal mine operators will be unable to find competent counsel to represent their interests. In fact, the Department has included two or more coal companies as parties in cases under the former regulations,
(g) One comment states that the regulation denies mine operators a reasonable opportunity to develop a record. In its second notice of proposed rulemaking, the Department explained its belief that the 90-day time period, which may be extended for good cause, affords sufficient time for operators to submit evidence relevant to their employment of the miner. 64 FR 54990 (Oct. 8, 1999). It cannot be emphasized too often that the period provided by § 725.408 does not require the development of evidence relevant to the designation of other potentially liable operators as the responsible operator. That evidence will be submitted later, in accordance with the schedule established by the district director pursuant to § 725.410.
(h) One comment argues that the regulation creates an impermissible presumption and thus violates the Supreme Court's decision in
(i) One comment states the response time given potentially liable operators under § 725.408 should mirror the time period given claimants to submit information in § 725.404. The Department disagrees. Section 725.404 provides that claimants must provide the district director with a complete and detailed employment history as well as proof of age, marriage, death, family relationship, dependency, or other
(j) One comment urges that operators be given the 60 days originally proposed by the Department to respond to notification of potential liability rather than 90. The Department has retained the 90-day time period, which may be extended for good cause, to accommodate the operator community's general objection to the 60-day period and to provide additional time, as a matter of right, in that small percentage of cases in which the miner's employment history is complex or in the distant past.
(k) No other comments were received concerning this regulation, and no other changes have been made in it.
(a) The Department proposed revising § 725.409 in its first notice of proposed rulemaking to make explicit one basis for denying a claim by reason of abandonment. The Department observed that the Court of Appeals for the Fourth Circuit had confirmed the Department's use of the authority in subsection (a)(3) to dismiss a claim by reason of abandonment based on a claimant's failure to appear at an informal conference.
(b) Two comments continue to object to the Department's unwillingness to allow an administrative law judge to consider the merits of a claimant's entitlement to benefits if he finds that the district director improperly denied the claim by reason of abandonment. In its second notice of proposed rulemaking, the Department explained that a denial by reason of abandonment may take place before the administrative processing of the claim has been completed, such as when a claimant unjustifiably refuses to attend a required medical examination. § 725.409(a)(1); 64 FR 54991 (Oct. 8, 1999). The Department has reconsidered its complete prohibition on allowing an administrative law judge to resolve the merits of a claim, however. Where the parties have completed their submission of evidence to the district director, and the district director has completed his analysis of the evidence relevant to the liability of all potentially liable operators, and has made a final designation of the responsible operator liable for the payment of benefits, the Department agrees that it would make no sense to require remand to the district director in the event the administrative law judge overturns his denial by reason of abandonment. Accordingly, the Department has revised subsection (c) to permit the Director, through the Office of the Solicitor, to make a case-by-base determination as to whether remand for further administrative processing is necessary. If further remand would be pointless, the Director's consent, which must be made in writing, would allow the case to proceed on the merits of the claimant's entitlement to benefits. The Department has also added a new sentence to subsection (c) to clarify the effect of a denial of a claim by reason of abandonment on a subsequent claim filed by the same individual.
(c) Several comments state that the Department should refer a claim for a hearing on the merits even if the claim has been denied by reason of abandonment. The Department disagrees. A claimant whose claim has been denied by reason of abandonment has suggested, by his actions, that he no longer wishes to pursue his claim for benefits. Referring all of these cases to an administrative law judge for hearing would be pointless and inefficient. It is true that in some cases, the claimant may have decided that he still desires benefits, but believes that the action required of him by the district director is unreasonable. Requiring these claimants to request an administrative law judge to resolve their dispute does not impose an unreasonable burden. Accordingly, the Department has not altered this requirement in the regulation.
(d) Several comments request that the Department reconsider denying a claim by reason of abandonment as an appropriate sanction. Another comment supports the denial. The Department explained its reason for using a denial by reason of abandonment where a claimant fails to attend an informal conference in its second notice of proposed rulemaking. 64 FR 54991-92 (Oct. 8, 1999). The Department continues to believe that, although a denial is a harsh sanction, it is the only valid sanction that may be imposed for a claimant's failure to participate in the adjudication process. A claimant whose failure to participate is the result of simple negligence may avoid that sanction by indicating his willingness to comply with the district director's initial instructions.
(e) Several comments request that the Department reconsider its use of informal conferences. These comments are more appropriately addressed under § 725.416.
(f) No other comments were received concerning this section.
(a) In its first notice of proposed rulemaking, the Department proposed new §§ 725.410-725.413 in order to streamline the investigation and initial adjudication of claims for black lung benefits. 62 FR 3356 (Jan. 22, 1997). The
In its second notice of proposed rulemaking, the Department did not discuss §§ 725.410, 725.412, or 725.413.
(b) A number of comments continue to object to the Department's proposal with respect to the initial adjudication of claimant eligibility and operator liability. Among other things, these commenters criticize the increased formality and complexity of the proposed procedure; the burdensome requirement that operators must respond to initial findings in all cases; and the Department's failure to honor premature hearing requests. In response to these comments, the Department has reconsidered the procedural rules governing district director claims processing, and has altered the proposal in a number of significant respects.
(i) The Department will no longer issue an initial finding of claimant eligibility and operator liability. Instead, following the development of certain medical evidence under § 725.405, including the complete pulmonary evaluation authorized by § 725.406, and the submission of evidence relevant to the employment of the miner by potentially liable operators notified pursuant to § 725.407, the district director will issue a schedule for the submission of additional evidence. § 725.410. This schedule will notify the parties of the district director's preliminary evaluation of the evidence regarding the miner's eligibility, but will not require a formal response as to eligibility from any party. In the event that the district director concludes that the evidence supports an award of benefits, and there is no operator that may be held liable for the payment of benefits, § 725.411 requires the district director to issue immediately a proposed decision and order awarding benefits payable by the Black Lung Disability Trust Fund. In such a case, the district director will not issue a schedule for the submission of additional evidence because no further evidentiary development is needed. In the event the district director's preliminary evaluation of the medical evidence in a Trust Fund case weighs against a benefits award, the district director will issue a schedule allowing the submission of additional medical evidence, but the claimant need not respond. Instead, the claimant may wait until the issuance of the proposed decision and order, which will provide him 30 days within which to request a hearing. Similarly, an operator need not respond to a district director's schedule for the submission of evidence. Silence on an operator's part as to the claimant's entitlement to benefits after issuance of the district director's schedule will be deemed a contest of that entitlement. The revised regulations thus eliminate certain responses that previously would have been required following issuance of the proposed initial findings. In addition, they eliminate the one-year period of time that the proposal would have provided a claimant to respond to the initial finding. Two commenters continued to object to that time period. Instead, all parties will have the statutory period, one year, to file a request for modification after the district director's proposed decision and order becomes effective. The proposed decision and order becomes effective 30 days after issuance,
By replacing the notice of initial finding with a less formal schedule for the submission of additional evidence, the Department hopes to further its goal of providing more easily understood documents. The schedule will summarize the medical evidence developed by the Department, and provide a clear explanation of why that evidence may fail to establish a claimant's entitlement to benefits. In addition, the schedule will provide a clear explanation of the steps remaining in the district director's claim processing. A number of commenters had objected to the complexity of the Department's proposed procedures, and the Department believes that this simplified, revised process will eliminate confusion.
(ii) The schedule will also contain the Department's preliminary designation of the responsible operator liable for the payment of claimant's benefits. Along with the schedule, the district director will supply all potentially liable operators with a copy of the evidence needed to meet the Director's initial burden of proof under § 725.495, if such a showing is necessary. Within 30 days of the date on which the schedule is issued, the designated responsible operator must either agree or disagree with the district director's designation. If it disagrees, it must submit any evidence regarding the liability of other operators in accordance with the district director's schedule. The schedule must provide a minimum of 60 days to submit evidence pertaining to both responsible operator liability and the claimant's entitlement, and an additional 30 days to respond to other parties' evidence. These periods may be extended pursuant to § 725.423 for good cause shown. In addition, the designated responsible operator may, but does not have to, agree that the claimant is entitled to benefits. Silence on this issue for 30 days after the district director issues a schedule will be deemed a decision to contest the claimant's benefit entitlement sufficient
(iii) The Department has also deleted the language in proposed § 725.411 which would have rendered invalid premature hearing requests. Accordingly, the Department will continue its current practice of following the decision in
(c) Two comments submitted in connection with the Department's first notice of proposed rulemaking, and renewed in connection with the Department's second notice of proposed rulemaking, argue that the Department's proposed § 725.413 improperly transfers adjudication powers from the administrative law judge to the district director in violation of the Administrative Procedure Act. The Department disagrees. The regulations currently permit the district director to issue a proposed decision and order. Any party aggrieved by the proposed decision and order may request a formal hearing before the Office of Administrative Law Judges, making the district director's factual findings irrelevant. If no party objects to the proposed decision and order, however, it becomes final. 20 CFR 725.419 (1999). The revised regulations continue that procedure. They do not deny any party the right to an adjudication of contested issues by an administrative law judge, as provided by both the Administrative Procedure Act, 5 U.S.C. 556, and section 19 of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 919, as incorporated by 30 U.S.C. 932(a).
(d) Several comments submitted in connection with the Department's first notice of proposed rulemaking state that the time frames for developing and submitting evidence to the district director are too short. These time frames, which have been moved from proposed § 725.413(c)(2) to § 725.410(b), set only the minimum periods for evidentiary submissions. Section 725.423 allows any party to request additional time within which to take a required action if good cause is shown. In addition, the Department has relaxed the requirements for the development of documentary medical evidence in §§ 725.414 and 725.456, and has increased the opportunities for submitting such evidence outside the periods established by § 725.410. The Department has not modified, however, the requirement contained in the original proposal, that all documentary evidence pertaining to operator liability must be submitted to the district director in the absence of extraordinary circumstances. In a small number of claims, the responsible operator designated by the district director may wish to submit documentary evidence to meet its burden of establishing that another employer of the miner should be the responsible operator. The Department estimates that these cases will represent less than 10 percent of all responsible operator claims. The Department recognizes that, in some of these cases, the initial 60-day period may be insufficient to allow the designated responsible operator to complete its development of the necessary evidence. In such a case, however, the operator may request that the district director grant it additional time. In addition, if the district director finds the evidence submitted by the designated responsible operator persuasive, he may designate a different operator as the responsible operator only after he provides that operator, pursuant to § 725.410, with at least 60 additional days to develop its own evidence relevant to both the liability and eligibility issues. Finally, in a case in which the operator encounters particular difficulty in obtaining the necessary evidence, it may be able to establish the existence of “extraordinary circumstances” permitting the introduction of such evidence after the case is referred to the Office of Administrative Law Judges. No changes are necessary in response to these comments.
(e) One comment submitted in connection with the Department's first notice of proposed rulemaking objects to the district director's authority to reinstate an operator which has been dismissed. This authority is necessary to correct erroneous dismissals, especially since an operator can not be named a party to a claim once a case is referred to the Office of Administrative Law Judges for a hearing on the merits, § 725.407(d). The remainder of the commenter's objections pertain more properly to § 725.414, and are addressed under that regulation.
(f) In light of the extensive changes to §§ 725.410-.413, none of the other comments received concerning the proposed revisions to these regulations remain relevant.
(a) In its first notice of proposed rulemaking, the Department proposed to limit the quantity of documentary medical evidence that parties to a claim would be able to submit. Specifically, the Department's initial proposal would have permitted the claimant and the party opposing the claimant's entitlement each to submit the results of no more than two complete pulmonary examinations or consultative reports, and one review of each of its opponent's diagnostic studies and examinations. Parties could submit additional documentary medical evidence only by demonstrating extraordinary circumstances. In proposing this limitation, the Department acknowledged the concerns of the Court of Appeals for the Sixth Circuit in
The Department also proposed to require that all documentary evidence—evidence relevant to operator liability as well as medical evidence relevant to a claimant's eligibility—be submitted while the case was pending before the district director. Like the limitation on the quantity of medical evidence, the required submission of evidence to the district director was made subject to an extraordinary circumstances exception. The Department observed that this proposal would end parties' current practice of delaying the development of evidence on both issues until a claim was referred to the Office of Administrative Law Judges. It would also provide district directors with a
The Department proposed several significant revisions in its second notice of proposed rulemaking. 64 FR 54992-96 (Oct. 8, 1999). Responding to numerous comments, the Department withdrew its proposed requirement that all documentary medical evidence be submitted to the district director. Instead, the Department proposed to retain the current procedures, allowing parties to submit documentary medical evidence to the Office of Administrative Law Judges up to 20 days prior to the formal hearing.
Although numerous comments had objected to the Department's limitation on the quantity of medical evidence, the Department did not propose to alter that limitation. In order to accommodate the differing circumstances of individual cases, however, and to ensure that all parties were given due process, the Department proposed revising the standard that would allow a party to exceed that limitation. Accordingly, the Department replaced the “extraordinary circumstances” exception with a “good cause” standard that would be easier to meet in appropriate cases. The Department also clarified the types of documentary medical evidence that parties would be entitled to submit, in order to resolve some of the ambiguities presented by its original proposal. Specifically, the Department proposed that a party's affirmative case be limited to two chest X-ray interpretations, the results of two pulmonary function studies, two arterial blood gas studies, and two medical reports. In rebuttal, each party would be able to submit one piece of evidence analyzing each piece of evidence submitted by the opposing side. For example, an operator could have each of the claimant's chest X-rays reread once, and could submit one report challenging the validity of each pulmonary function test submitted by the claimant. The Department also provided the parties with an opportunity to rehabilitate the evidence they had submitted in connection with their affirmative case that had been the subject of rebuttal. The second proposal justified the medical evidentiary limitations as applied to multiple potentially liable operators named as parties to the same claim. Finally, the Department clarified the provision in subsection (a)(4) as allowing the submission of hospital records and any other treatment records relating to the mine's respiratory or pulmonary condition without regard to the evidentiary limitations elsewhere in the regulation.
(b) A number of comments continue to object to the proposed requirement that more than one potentially liable operator might be retained as a party to a claim and might have to participate in a joint defense of the claimant's eligibility for benefits subject to the same medical evidentiary limitations as would be present in a case involving only one operator. The Department proposed this requirement in order to ensure that a claimant in a multiple operator case—a case in which the identity of the responsible operator was in doubt—would not have to face more documentary medical evidence than a claimant whose eligibility was opposed by only one potentially liable operator. On further reflection, however, the Department has decided not to retain more than one potentially liable operator as a party to each case after the case is referred to the Office of Administrative Law Judges. The final revisions to the regulations attempt to simplify and streamline the processing of claims at the district director level. For example, the final rules eliminate certain party responses formerly required to be filed with the district director, and thus reduce the parties' transaction costs. Similarly, in these final rules, the Department has simplified the adjudication of claims beyond the district director level by permitting the district director to refer a case to the Office of Administrative Law Judges with only one designated responsible operator as a party to the claim.
The Department recognizes that this solution may slightly increase the Black Lung Disability Trust Fund's liability. In the event the responsible operator designated by the district director is adjudicated not liable for a claim, the Black Lung Disability Trust Fund will pay any benefit award. The Department's proposals, on the other hand, would have subjected the Trust Fund to liability only where the miner was not employed by any operator that met the criteria for a potentially liable operator, or where the district director had not named as a party to the claim the operator ultimately held to be the responsible operator. The Department's final regulations create Trust Fund liability in different circumstances: where the district director's designation of the responsible operator proves to be incorrect. For example, if the miner's most recent employer, ABC Trucking Co., argues that it did not employ the claimant as a miner, the proposal would have permitted the district director to retain, as parties to the claim, the miner's prior employers as fallback potentially liable operators. Under the final regulation, however, if the district director designates ABC as the responsible operator, and the ALJ awards benefits but finds that the miner's next most recent employer, XYZ Coal Co., should have been the responsible operator, benefits will be payable by the Trust Fund. The Department intends that, once a claim is referred to the Office of Administrative Law Judges, the Department shall not be able to impose liability for that claim on any operator other than the one finally designated as responsible operator by the district director, whether through remand by the administrative law judge or through modification of a finally awarded claim. This limitation will eliminate a major source of delays in the adjudication of claims, and prevent a claimant from having to relitigate his entitlement to benefits. To the extent
The Department does not believe that the risk of increased Trust Fund liability is significant. Serious disputes about the identity of the responsible operator arise in less than 10 percent of claims. In addition, the regulations still require that all of the documentary evidence relevant to the issue of operator liability be submitted to the district director, and that all of the potential witnesses as to this issue be identified. In fact, the Department's willingness to accept the risk that the district director's designation will be incorrect reinforces the need for both of those requirements. Thus, the district director will be able to make a determination as to the identity of the responsible operator based on the same information that will be available to the administrative law judge. In such circumstances, the Department believes that any additional risk of liability imposed on the Trust Fund is acceptable.
The Department has made extensive revisions to § 725.414 to implement this change. Subsection (a)(3)(iv) and the introductory paragraph of subsection (a)(3) have been deleted, and references to potentially liable operators other than the designated responsible operator have been removed from subsections (a)(2)(ii), (a)(3)(i), (a)(3)(ii), and (c). The Department has revised subsection (a)(3)(iii) to reflect the Trust Fund's right to develop evidence in a case in which the district director has notified one or more potentially liable operators of their liability pursuant to § 725.407, but has subsequently dismissed all of the operators. The revised regulation also recognizes the Trust Fund's right to develop and submit evidence relevant to the compensability of a claimant's medical benefits. The Department has also revised subsections (b)(1) and (b)(2) to clarify the meaning of the regulation.
In addition, the Department has deleted subsection (a)(6). As proposed, subsection (a)(6) would have required the district director to admit into the record all of the evidence submitted while the case was pending before him. As revised, however, the regulation may require the exclusion of some evidence submitted to the district director. In the more than 90 percent of operator cases in which there is no substantial dispute over the identity of the responsible operator, most of the evidence available to the district director will be the medical and liability evidence submitted pursuant to the schedule for the submission of additional evidence, § 725.410. In the remaining cases, however, the district director may alter his designation of the responsible operator after reviewing the liability evidence submitted by the previously designated responsible operator. For example, he may decide that the evidence submitted by ABC Trucking Co. establishes that the claimant did not work as a miner for that company, and may designate the claimant's next most recent employer, XYZ Coal Co., as the responsible operator. In such a case, the regulations require that the district director issue another schedule for the submission of additional evidence in order to give XYZ Coal the opportunity to submit additional evidence bearing on its liability for benefits. If the district director ultimately concludes that XYZ should be designated the responsible operator, the regulation requires him to exclude the medical evidence previously developed by ABC, unless XYZ adopts that evidence as its own, § 725.415(b). The Department has revised § 725.415(b) to defer the development of any additional medical evidence in such a case until after the district director has completed his analysis of all evidence pertaining to operator liability and has made a final responsible operator determination. At that point, the responsible operator will have an opportunity, if it was not the initially designated responsible operator, to develop its own medical evidence or adopt medical evidence submitted by the initially designated responsible operator. Because the district director will not be able to determine which medical evidence belongs in the record until after this period has expired, the Department has revised §§ 725.415(b) and 725.421(b)(4) to ensure that the claimant and the party opposing entitlement are bound by the same evidentiary limitations. Accordingly, the Department has deleted the requirement in § 725.414(a)(6) that the district director admit into the record all of the medical evidence that the parties submit.
The Department does not expect the deletion to have a significant practical effect. Because the Department withdrew its first proposal requiring that all medical evidence be submitted to the district director,
(c) Two comments dispute the Department's observation, in its second notice of proposed rulemaking, 64 FR 54996 (Oct. 8, 1999), that autopsy and biopsy reports are generally not developed in connection with a claim, and that those reports need not be addressed in the Department's evidentiary limitations. The Department has reconsidered its earlier proposal allowing the admission of these reports without regard to number, and agrees that the evidentiary limitations of § 725.414 should be revised. Accordingly, the regulation now permits each side to submit, as part of its affirmative case, one report of an autopsy and one report of each biopsy. Subsections (a)(2)(i) and (a)(3)(i) have been revised accordingly. In addition, the Department has revised subsections (a)(2)(ii) and (a)(3)(ii) to allow each side to submit one report in rebuttal of an autopsy report and one report in rebuttal of each biopsy report offered by the opposing side. The Department has also deleted the reference to autopsy and biopsy reports in subsection (a)(4), the catch-all provision permitting the introduction of evidence that is not addressed elsewhere in § 725.414.
(d) Several comments object to the Department's proposed addition of subsection (e). This provision, which tracks the current regulation at 20 CFR 725.414(e)(1) (1999), would have
(e) A number of comments argue that the Department should limit the claimant and the party opposing entitlement to one examination and one set of pulmonary testing. Thus, instead of being able to submit the results two pulmonary function studies and two arterial blood gas studies, each party would be entitled to submit only one set of test results. One commenter states that this revision would simply maintain the status quo with respect to testing. The Department disagrees. The former regulations do not limit the number of test results a party may submit, and evidentiary records often contain a substantial number of such tests. The Department recognizes that the testing may be difficult for some claimants. In the absence of good cause, the Department's regulations limit the maximum total number of tests to five in the vast majority of cases involving a designated responsible operator (four in a case in which the Black Lung Disability Trust Fund will be liable for the payment of any benefits), and spread these tests out over time. The first such test will be performed in connection with the complete pulmonary evaluation shortly after the claimant files his application, § 725.406. The last test will most likely be performed shortly before the formal hearing, as parties seek to complete the development of their evidence before the twentieth day prior to the hearing, as required by § 725.456(b)(2). It would not be appropriate to further limit the testing that a claimant must undergo. An operator who wishes to submit the results of two physical examinations performed in accordance with § 718.104 is entitled to have the physicians who perform those examinations administer appropriate testing,
(f) A number of comments continue to object generally to the Department's proposed limitations on the quantity of medical evidence that parties may submit in the adjudication of a black lung claim. Among other things, they argue that the proposed limitations violate § 413(b) of the Black Lung Benefits Act, 30 U.S.C. 923(b), which requires the consideration of “all relevant evidence,” and infringe on the rights of coal mine operators under the due process clause of the Constitution. The Department has previously addressed both arguments. In its first notice of proposed rulemaking, the Department explained that § 413(b), which is contained in Part B of the Black Lung Benefits Act, was incorporated into Part C, governing adjudications by the Department of Labor, “to the extent appropriate.” 30 U.S.C. 940. The proposed evidentiary limitations thus represent the extent to which the Department believes that medical evidence should be submitted for consideration by the factfinder. In addition, the Department has noted that § 413(b) does not require the admission of all evidence simply because that evidence could be described as relevant, and that the Department was free to prescribe conditions under which evidence would be admissible in black lung adjudications. 62 FR 3358-59 (Jan. 22, 1997). The Department discussed the requirements of the due process clause in its second notice of proposed rulemaking. The Department observed that a due process analysis involves weighing the potentially disparate interests of a number of parties. 64 FR 54994-95 (Oct. 8, 1999). In the Department's view, the regulation achieves the correct balance, particularly in light of the Department's decision to permit parties to exceed the numerical limitations on documentary medical evidence upon a showing of good cause. To the extent that these commenters objected, on due process grounds, to the requirement that potentially liable operators other than the responsible operator defer to the responsible operator's development of medical evidence, those objections have been rendered moot by the Department's revisions permitting only one designated responsible operator to be included as a party to a case before the Office of Administrative Law Judges.
The Department also cannot accept the assertion, made by several commenters, that the numerical limits are fundamentally unfair, and that they will result in inaccurate and incomplete evaluations of the claimant's pulmonary condition. In cases involving a coal mine operator, the record may contain up to five medical reports—two submitted by the claimant, two by the operator, and the results of the complete pulmonary evaluation. Each of these reports may be based on independent medical testing. Accordingly, the Department does not agree that the evaluation of the claimant's medical status will be less than complete and thorough. Moreover, the Department does not agree that requiring the parties to develop medical evidence meeting certain quality standards, §§ 718.102—718.107, will result in an unfair adjudication of the claimant's entitlement to benefits.
(g) One comment suggests that the Department's rationale for its proposed change is insufficient, and that anecdotal evidence of a few cases in which coal mine operators submitted a large volume of evidence does not demonstrate that the current procedure is unfair. The commenter further argues that the former system, developed under the Administrative Procedure Act, is a fair system. The Department agrees that the APA generally provides a fair basis for the adjudication of parties' interests in the administrative context. In its first notice of proposed rulemaking, however, the Department demonstrated that Congress did not explicitly impose the requirements of the APA on adjudications under the Federal Mine Safety and Health Act.
(h) One comment argues that the “minimum” number of examinations that may be submitted by the parties is not equal. The commenter also objects that the claimant is entitled to travel a longer distance to obtain his medical evidence than the employer is authorized to send him to obtain its medical evidence. Specifically, the commenter states that a claimant could travel less than one hundred miles away for the complete pulmonary evaluation provided by the Department under § 725.406, but then travel a longer distance to obtain a subsequent examination at his own expense. Because the limitation on the travel an operator can require is tied to the distance traveled for the § 725.406 evaluation, the commenter argues that
With respect to the travel requirements, the Department believes that a coal mine operator should not be entitled to wait to develop its medical evidence until after the claimant has finished his evidentiary development in order to learn how far it may ask the claimant to travel. The complete pulmonary evaluation offers the claimant the opportunity to travel anywhere in his state or any contiguous state at Departmental expense. The Department does not believe that a claimant will deliberately select a closer physician for this examination and then pay for his own travel to a more distant location for either of the two medical reports that he is entitled to submit. Accordingly, the Department believes that the distance a claimant travels for the complete pulmonary evaluation, or 100 miles, whichever is greater, represents a proper limitation on a coal mine operator's ability to compel the claimant to travel. Moreover, the regulation's proscription on additional travel is not absolute. Like the former regulation, 20 CFR 725.414(a)(1999), which subsection (a)(3)(i) mirrors, subsection 725.414(a)(3)(i) permits an operator to request the district director to authorize a trip of greater distance. Operators who are unable to find a qualified physician within the 100-mile radius thus may seek permission to send the claimant further.
(i) Three comments suggest that the determination as to whether additional evidence would provide only marginal utility should not be made by regulation of the Department of Labor but by administrative law judges on a case-by-case basis. These commenters contend it is up to administrative law judges to determine when evidence is cumulative and that the Department should not micromanage the adjudicatory process. The Department has previously expressed its preference for a “bright-line” limitation over the
(j) One comment argues that the Department should include the “good cause” exception in § 725.414 as well as in § 725.456, and that its failure to do so represents a trap for the unwary. The Department does not agree that the “good cause” exception needs to be repeated in § 725.414. As a practical matter, the Department's removal of the requirement that parties submit all of their documentary medical evidence before the district director will generally cause parties to delay the development of their evidence until a case reaches the administrative law judge. Thus, the Department does not anticipate that there will be many occasions on which a party would ask the district director, rather than the administrative law judge, to find “good cause” to exceed the numerical limitations of § 725.414. In any event, because any finding on this issue by the district director would be subject to
(k) One comment argues that, contrary to the opinion expressed in the Department's second notice of proposed rulemaking, the progressive nature of pneumoconiosis should not constitute “good cause” for the submission of additional evidence because it is scientifically unsupported. In its second notice of proposed rulemaking, the Department had suggested that the progressive nature of the disease might justify an administrative law judge's finding of good cause to admit documentary medical evidence in excess of the § 725.414 limitations when both parties had fully developed their evidence prior to the hearing but the hearing had to be rescheduled due to weather conditions. 64 FR 54994-95 (Oct. 8, 1999). The commenter suggests that a claim of regression should be automatic good cause. The Department has discussed the evidence demonstrating the progressive nature of pneumoconiosis in its response to comments under § 725.309. The Department does not agree that a bare claim of “regression” should entitle a coal mine operator to exceed the § 725.414 evidentiary limitations. The example provided by the Department was intended to illustrate one of the circumstances in which the “good cause” exception might apply; it was not intended to provide an automatic right to submit documentary medical evidence in excess of the limitations in any particular case.
(l) One comment states that the “good cause” exception is unnecessarily complex and leaves many unanswered questions. The commenter poses a hypothetical situation involving a claimant's submission of an additional report of examination, and asks what additional evidence the opposing party may submit in response or in rebuttal. The Department does not believe that the regulation or this preamble can explicitly anticipate every conceivable situation that may arise in the adjudication of claims. Instead, the Department fully expects that administrative law judges will be able to fashion a remedy in all cases that both permits the party opposing entitlement to develop such rebuttal evidence as is necessary to ensure a full and fair adjudication of the claim, and retains the principle inherent in these regulations that the fairest adjudication of a claimant's entitlement will occur when the factfinder's attention is focused on the quality of the medical evidence submitted by the parties rather than on its quantity.
(m) One comment argues that the Department's regulations improperly deny a dismissed operator the right to defend itself, in violation of the Black Lung Benefits Act, the Longshore and
(n) One comment states that the requirement that a party identify a testifying witness while a claim is pending before the district director is unreasonable and onerous, and that it diminishes the authority of administrative law judges. This comment is more appropriately addressed under § 725.457, governing the use of witnesses before an administrative law judge.
(o) A number of comments generally favor the Department's medical evidentiary limitations.
(p) No other comments were received concerning this section, and no other changes have been made in it.
(a) In its first notice of proposed rulemaking, the Department revised § 725.415 to require the district director to issue a proposed decision and order in each case. Citing the need to strengthen the integrity of the district director's adjudication, the Department proposed removing the district director's authority to refer a claim to the Office of Administrative Law Judges without first issuing a proposed decision and order. 62 FR 3361 (Jan. 22, 1997). The Department did not discuss § 725.415 in its second notice of proposed rulemaking.
(b) The Department has revised subsection (b) in light of its decision not to allow more than one operator to remain a party to a black lung claim after the conclusion of district director processing. As revised, the regulation recognizes the district director's authority to reconsider his initial designation of a responsible operator following the submission of liability evidence by that initially designated operator. Where the district director believes that that evidence establishes that the first operator is not the proper responsible operator, he may issue another schedule for the submission of additional evidence under § 725.410, designating a new responsible operator and providing that operator with time within which to submit its own evidence relevant to the liability issue. If, after reviewing that operator's evidence, the district director decides that his first designation was correct, he may not allow the second designated responsible operator to develop any additional medical evidence. If, however, he decides that his second designation was correct (or proceeds to a third or fourth designation), he must provide the operator that he finally determines to be the responsible operator with the opportunity to submit medical evidence. That operator may develop its own evidence, or may adopt any evidence previously submitted by an operator. In either case, the finally designated responsible operator is subject to the evidentiary limitations set forth in § 725.414.
(c) The Department has replaced the reference to § 725.413(c)(2) with a reference to § 725.410(b) in order to reflect the new provision governing the time period for submitting documentary evidence to the district director. The Department has also deleted the word “operator's” from the title of the regulation. As revised, the Department's regulations do not provide a separate period for the development of an operator's evidence.
(d) One comment submitted in connection with the first notice of proposed rulemaking states that this section affords the district director too much authority, but does not identify which specific powers are objectionable. Without more detail, the Department cannot respond meaningfully to the commenter's concerns. Subsection (b) does enumerate the possible actions a district director may take after reviewing all of the evidence developed in conjunction with the claim. The district director may notify additional potentially liable operators, issue another schedule for the submission of additional evidence, schedule a conference, issue a decision, or take any other action appropriate to the circumstances of the claim. The district director must enjoy some degree of flexibility in determining how to proceed once evidentiary development has concluded. For example, the district director may determine, in light of evidence submitted by the designated responsible operator, that one or more additional potentially liable operators must be notified of the claim, or that a previously notified potentially liable operator should be designated the responsible operator. In such cases, the district director must have sufficient authority to permit the parties to submit additional evidence on the liability issue. Accordingly, the Department does not view the authority provided the district director as excessive.
(e) One comment states that eliminating the requirement in § 725.414, as initially proposed, that all documentary medical evidence be submitted to the district director has also eliminated the need to strengthen the integrity of the district director's adjudication. The Department disagrees. In light of the Department's final revisions, the proposed decision and order will be the only decisional document that the district director issues addressing the claimant's eligibility for benefits and the liability of a responsible operator for the payment of those benefits. A substantial number of claimants currently accept the district director's conclusions regarding their eligibility, and do not seek further review of their claims for benefits. The alternative to issuing proposed decisions and orders—referring all cases to the Office of Administrative Law Judges (OALJs) for a formal hearing on the merits—would represent a considerable and unnecessary expenditure of the resources of the OALJs, the Office of Workers' Compensation Programs, and the coal mine operators who must litigate such cases. Accordingly, the Department does not agree that § 725.415 should be revised to retain the current rule under which district directors may simply forward cases to the OALJs. Also, issuance of some document is necessary to establish the date from which the parties' modification rights begin to run. The Department believes that it will be easier for all parties if there is only one such document in each case.
(f) No other comments were received concerning this section, and no changes have been made in it.
(a) In its first notice of proposed rulemaking, the Department proposed revising subsection (c) to provide for the imposition of sanctions on any party that failed to appear at a scheduled informal conference and whose absence was not excused. The Department also proposed revising subsection (d) to put parties on notice that those attending the conference would be deemed to have the authority to stipulate to facts or issues or resolve the claim. 62 FR 3361 (Jan. 22, 1997). In its second notice of proposed rulemaking, the Department responded to a number of comments from a variety of sources urging the elimination of informal conferences.
(b) A number of comments generally oppose the use of informal conferences, contending they create additional delay and complexity in district director claims processing. As explained in both its first and second notices of proposed rulemaking, the Department believes that informal conferences may serve useful purposes, including, in appropriate cases, narrowing issues, achieving stipulations, and crystallizing positions. 62 FR 3361 (Jan. 22, 1997); 64 FR 54996 (Oct. 8, 1999). The Department agrees, however, that conferences should not unduly delay the further adjudication of a claim. In addition, they should be held only in appropriate circumstances. Accordingly, the Department has made two major changes to § 725.416. In subsection (a), the Department has added the requirement that a district director conduct any conference within 90 days of the date on which the period for submitting evidence under § 725.410(b) closes, unless one of the parties requests a postponement for good cause. The Department has also deleted the reference in subsection (b) to the district director's discretion to reschedule conferences. Subsection (a) permits the district director to reschedule conferences, but only upon the motion of a party. The Department has also replaced the reference to § 725.413(c)(2) in subsection (a) with a reference to § 725.410(b) in order to reflect a change in those regulations. In addition, in order to further limit the delay caused by informal conferences, the Department will continue to require that the district director issue a decision within 20 days of the close of all conference proceedings, including the time permitted for the submission of any additional evidence.
The Department has made a second major change to § 725.416 to remove any appearance of impropriety in the informal conference process. The district director is a subordinate of the Director, Office of Workers' Compensation Programs, a party in each claim for black lung benefits. The district director is also responsible for the development of evidence on behalf of the Black Lung Disability Trust Fund. These dual roles may affect the degree to which the district director is viewed as a neutral arbiter of the issues before him. An appearance of a conflict of interest is particularly troubling in a case in which there is no operator liable for the payment of benefits, and the claimant lacks representation. In order to minimize any appearance of unfairness, the Department believes that conferences should be held only when all parties are capable of making informed judgments to protect their own interests. Accordingly, in addition to explaining why holding a conference in a particular claim would be beneficial, the Department will inform the parties that no conference will be held if all parties do not have representation. In the event that a claimant is not represented, the district director will not hold a conference. An appointed lay representative is sufficient, however, to allow an informal conference to go forward, 20 CFR 725.362, 725.363 (1999). The regulation extends the same protection to operators that are neither insured nor self-insured. Many self-insured coal mine operators and insurers do not obtain formal representation at this stage of adjudication, but have claims processing personnel, either in their offices or in the claims servicing organizations that they use, who are knowledgeable concerning the entitlement and liability criteria of the Black Lung Benefits Act and its implementing regulations. The Department believes that such personnel should be able to enter into binding stipulations on behalf of the self-insured or insured coal mine operator. The Department has replaced the reference to § 725.362 in subsection (d) with a reference to subsection (b) to accomplish this result. Accordingly, the regulation deems that such operators are represented for purposes of scheduling an informal conference. By contrast, the Department intends that operators that are neither insured nor self-insured—operators that are not often called upon to participate in the adjudication of black lung benefits claims—should not be asked to enter into stipulations without the benefit of a formal representative's advice. Because there will no longer be any conferences involving unrepresented claimants, the Department has deleted the last two sentences of subsection (e). The district director may continue to exercise his discretion, however, to determine whether parties understand any stipulations which they are asked to enter. Exercise of this discretion is particularly important where a claimant is represented by a lay representative.
(c) One comment submitted in connection with the first notice of proposed rulemaking and renewed in connection with the second notice of proposed rulemaking objects to the regulation contending it improperly provides for an adjudication of the claim before the district director that is neither on the record nor under oath. The commenter also objects generally to the discretion given the district director to determine the procedures to be used at the conference. The Department recognizes that the informal conference will not be conducted under oath and on the record, but believes that the changes it has made to the informal conference procedures obviate this objection. As revised, an informal conference will only be held if all parties to a claim are represented or are deemed to be represented. This revision removes the danger that the district director will be able to obtain a stipulation from an unsophisticated party. Moreover, following the termination of the informal conference proceedings, the district director will issue a proposed decision and order. The district director's “adjudication” of the claim is thus subject to the consent of the parties. A request for a hearing will require the district director to forward the claim to the Office of Administrative Law Judges for
(d) No other comments have been received concerning this section.
(a) In its first notice of proposed rulemaking, the Department proposed revising subsection (b) to incorporate the limitations on documentary evidence contained in § 725.414. 62 FR 3361 (Jan. 22, 1997). The Department did not discuss § 725.417 in its second notice of proposed rulemaking.
(b) The Department has revised subsection (b) to clarify the district director's authority to seek additional information on the issue of responsible operator liability even after he has held a conference. The conference may provide the district director with additional information regarding the claimant's employment history. Accordingly, subsection (b) authorizes the district director to issue another
(c) One comment objected to the requirement in proposed subsection (d) that parties respond in writing to the district director's memorandum of conference. The Department agrees that this response is unnecessary, and has further streamlined its informal adjudication of claims by eliminating in its entirety the memorandum of conference and the required response that would have followed. Instead, at the conclusion of informal conference proceedings, including the submission of any additional evidence, the district director will issue a proposed decision and order under § 725.418. The Department has also revised subsection (b) in order to clarify the meaning of the sentence.
(d) One comment urges the Department to create a time limit within which the district director must issue a decision after holding a conference. Subsection (c), 20 CFR 725.417(c) (1999), requires the district director to issue a decision within 20 days of the conclusion of the informal conference proceedings. Consequently, no change in the regulation is required.
(e) One comment submitted in connection with the first notice of proposed rulemaking recommended amending subsection (b) to allow submission of post-conference supplementary reports from any physician who has already prepared a report if clarification of the physician's report is needed. No change in the proposed regulation is necessary. A party may request the opportunity to submit additional evidence post-conference which may further support its position or a physician's views. The only restriction imposed by subsection (b) is that such additional evidentiary development cannot circumvent the numerical limitations in § 725.414. To the extent that the comment implies a “clarifying” report should be considered an extension of the initial report, the Department disagrees. Excluding supplementary reports from the § 725.414 limitations would create an exception which eviscerates the limitation. A party could invite comment from the physician on almost any aspect of the medical evidence in the record under the guise of “clarifying” the physician's views in light of that evidence. In effect, the supplementary report would constitute another medical report. Moreover, any internal ambiguity or omission in the physician's opinion should be apparent upon receipt and review of the report, and can therefore be corrected before submitting the report into the record. If, however, some aspect of a physician's report has been the subject of rebuttal evidence by an opposing party, § 725.414 does allow the rehabilitation of the original report by the submission of a clarifying report from the original doctor. Such rehabilitative evidence is allowed by the evidentiary limitations in § 725.414.
(f) One comment argues that the regulation is questionable in light of the changes made to § 725.414. In the absence of any further explanation by the commenter, the Department is unable to respond.
(g) The Department received no other comments concerning this section.
(a) The Department proposed revising subsection (a) in its first notice of proposed rulemaking to identify the proposed decision and order as the step which follows a district director's memorandum of conference or, if no conference was held, the period established by the district director for the submission of evidence. The revision was intended to require the issuance of a proposed decision and order in each case, and to eliminate the district director's option of referring the case for a hearing without issuing a proposed decision and order. 62 FR 3361 (Jan. 22, 1997). The Department did not discuss § 725.418 in its second notice of proposed rulemaking.
(b) The Department has added subsection (d) to provide explicitly that, to the extent he has not done so before, the district director must dismiss, as parties to the claim, all potentially liable operators except one. Moreover, the regulation guarantees that no operator may be the finally designated responsible operator unless it: (1) Was notified of its potential liability pursuant to § 725.407, and thus given the opportunity to submit evidence under § 725.408; and (2) given the opportunity to submit additional evidence relevant to the liability of other potentially liable operators and the claimant's eligibility pursuant to § 725.410.
(c) The Department has deleted the reference in the first sentence of subsection (a) to the parties' responses to the district director's recommendations because a district director will no longer issue a memorandum of conference following the termination of conference proceedings.
(d) A number of comments objected to the Department's proposed revision of § 725.411, which would have treated a hearing request filed before the conclusion of district director processing as a request for the further adjudication of the claim.
(e) One comment submitted in connection with the first notice of proposed rulemaking and renewed in response to the second notice of proposed rulemaking expresses general
(f) No other comments were received concerning this section.
The Department received two comments relevant to § 725.419. This section was not open for comment; only technical changes were made to it.
(a) In its first notice of proposed rulemaking, the Department proposed deleting language in subsection (a) to allow district directors to maintain the files of cases which have been referred to the Office of Administrative Law Judges. Formerly, those files had been sent to the national office of OWCP's Division of Coal Mine Workers' Compensation. 62 FR 3361 (Jan. 22, 1997). The Department did not discuss § 725.421 in its second notice of proposed rulemaking.
(b) The Department has revised subsection (b)(3) to ensure that the record is sufficient to establish that the district director provided the finally designated responsible operator with notification of its status as a potentially liable operator under § 725.407 as well as its designation as the responsible operator pursuant to § 725.410. In addition, the Department has revised subsection (b)(4) to ensure that the record forwarded to the Office of Administrative Law Judges contains only medical evidence submitted by the claimant and the finally designated responsible operator or fund, as appropriate.
(c) In subsection (a), the Department has added the word “evidentiary” and deleted the phrase “in the claim” to clarify the meaning of the sentence.
(d) One comment submitted in connection with the Department's first notice of proposed rulemaking objects to subsection (c) because it requires a party to pay for copies of documents which have previously been provided. The commenter argues that claimants in particular are unaware of the importance of keeping all documents associated with their claims. No change is made in response to this comment. Subsection (c) is a rule of general applicability, and affects responsible operators and insurance carriers as well as claimants. The provision states that the district director shall determine the amount of the copying fee. It therefore allows the district director to consider mitigating factors (the individual's financial condition, the cost of the documents being replaced, etc.) as grounds for reducing or waiving the copying fee. No other comments concerning this section were received, and no changes have been made in it.
The Department received several comments relevant to § 725.422. This section was not open for comment; it was repromulgated without alteration for the convenience of the reader;
(a) In its first notice of proposed rulemaking, the Department proposed the addition of § 725.423 to consolidate all of the provisions governing extensions of time in subpart E of part 725. With the exception of two time periods, one in § 725.411(a)(1)(i) governing a claimant's response to an unfavorable initial finding and the other in § 725.419 governing responses to a district director's proposed decision and order, the proposed regulation would have allowed any time period to be extended for good cause shown provided a request for an extension was filed before the time period expired. 62 FR 3361 (Jan. 22, 1997). The Department did not discuss § 725.423 in its second notice of proposed rulemaking.
(b) The Department has eliminated the reference in § 725.423 to the time period set forth in § 725.411(a)(1) because that time period has been eliminated from the regulations.
(c) One comment submitted in connection with the first notice of proposed rulemaking objects to a single regulation governing extensions of time. The commenter would prefer individual provisions in each affected regulation to add clarity to the proceedings. The Department disagrees. In terms of an efficient structure for the program regulations, a single provision with application to the entire Subpart E is more logical than a series of repetitive provisions added to each regulation containing a time frame for action.
(d) One comment submitted in connection with the first notice of proposed rulemaking urges explicit recognition that a request for an extension of time may be honored even if submitted after the time period for taking action has expired. This suggestion cannot be adopted. A “well-settled” principle of the black lung program requires the parties to “strictly adhere to the substantive and procedural requirements of the Black Lung Benefits Act and its implementing regulations.”
(e) One comment recommends including proposed § 725.411(a)(1)(i) among the time periods which can be extended. As originally proposed, section 725.411(a)(1)(i) would have afforded a claimant who has been denied benefits one year from the district director's initial finding within which to request further adjudication. The revisions made by the Department to §§ 725.410-.413 have eliminated the time period in § 725.411(a)(1)(i). Accordingly, the comment is no longer relevant.
(f) One comment urges the Department to specify that a party cannot seek an extension of its right to file a request for modification under § 725.310 if that request is not filed before the expiration of the one-year
(g) One comment argues that the Department should not create a non-statutory jurisdictional bar by refusing to permit an extension of time in the case of a proposed decision and order. The commenter argues that the Department's regulation violates the rights of parties under the Administrative Procedure Act and the Black Lung Benefits Act to obtain a hearing. The Department disagrees. The time limit established by § 715.419 for responding to a proposed decision and order is necessary to create finality in those cases where no party contests the district director's initial adjudication of a claim. In the event that the Department issues a proposed decision and order awarding benefits and the designated responsible operator fails to respond in a timely manner, the Department must be able to enforce the award against the operator. Enforcement of an award under § 21(d) of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 921(d), as incorporated by 30 U.S.C. 932(a), and the collection of benefits owed the Black Lung Disability Trust Fund under 30 U.S.C. 934, however, require that the decision and order awarding benefits be final. The time limit in the current version of § 725.419, 20 CFR 725.419 (1999), has been interpreted to be jurisdictional,
(h) No other comments were received concerning this section.
(a) The Department proposed adding subsection (d) in its first notice of proposed rulemaking to prohibit the deciding of a case without holding a hearing unless the administrative law judge believes an oral hearing is not necessary, notifies the parties that he intends to decide the case on the record, and the parties do not object. 62 FR 3361 (Jan. 22, 1997). The Department did not discuss this regulation in its second notice of proposed rulemaking.
(b) One comment objects to the Department's insistence on an in-person hearing. The commenter states that an administrative law judge should be entitled to decide whether a hearing is necessary in the event that the parties disagree. The regulation reflects the Department's consistent position that any party is entitled to a hearing before an administrative law judge in a case that is not appropriate for summary judgment. Section 19(c) of the Longshore and Harbor Workers' Compensation Act requires a hearing “upon application of any interested party.” 33 U.S.C. 919(c), as incorporated by 30 U.S.C. 932(a). In its recent decision in
The mere fact that parties rarely bring a live expert is immaterial. [The claimant] should have had the opportunity to bring a live expert. Additionally, although the ALJ required any documentary evidence to be introduced in advance, the Director correctly points out that [the claimant] could request and receive permission at a hearing to introduce additional documentary evidence.
Although the Department received comments under this section, the regulation was not open for comment,
(a) In its first notice of proposed rulemaking, the Department proposed eliminating the provision allowing administrative law judges to reopen the record for the receipt of additional evidence for “good cause.” 62 FR 3361 (Jan. 22, 1997). The Department's proposal reflected the evidentiary limitations then imposed by § 725.414. The Department did not discuss the regulation in its second notice of proposed rulemaking.
(b) Several comments submitted in response to both the Department's 1997 proposal and its 1999 reproposal oppose removal from the current regulation of the administrative law judge's authority to reopen the record to receive additional evidence for good cause shown. The Department responded to those objections when it reproposed § 725.414(c), (d) and § 724.456(b) for additional comment. 64 FR 54994-95 (Oct. 8, 1999). At that time, the Department changed the proposed standard for the admission of documentary medical evidence in excess of the regulations' numerical limitations from one of “extraordinary circumstances” to “good cause,” while leaving the standard for admission of additional evidence relating to operator liability—evidence that was not submitted to the district director—one of extraordinary circumstances. In any event, the standard to be used to govern the introduction of documentary evidence while a case is pending before the Office of Administrative Law Judges
(c) One comment recommends clarifying subsection (a) to underscore the claimant's right to request a hearing site somewhere outside the 75-mile radius around his residence for the convenience of his representative. No change is made in response to this comment. Subsection (a) specifically provides that a claimant may request an alternate location, and does not limit the site to a specific area or distance from the claimant's residence. A claimant may therefore request the administrative law judge to move the hearing site beyond the 75-mile boundary. Claimants, however, cannot be accorded an unqualified right to determine where hearings should be convened. All matters relating to the conduct of the hearing are ultimately the responsibility of the administrative law judge. He or she must balance the interests and rights of all the parties against the convenience of a particular site for the claimant. Consideration must also be given to administrative convenience and the efficient allocation of human and financial resources in general. An administrative law judge generally schedules several claims for adjudication in one location.
(d) No other comments were received concerning this section, and no changes have been made in it.
(a) The Department proposed revising section 725.456 in its first notice of proposed rulemaking in order to reflect its original proposal in § 725.414 requiring parties to submit all of their documentary evidence to the district director. As originally proposed, section 725.456 would have prohibited the introduction of any additional evidence before the administrative law judge in the absence of extraordinary circumstances. 62 FR 3361-62 (Jan. 22, 1997). In its second notice of proposed rulemaking, the Department eliminated the requirement in § 725.414 that parties submit all of their documentary medical evidence to the district director in the absence of extraordinary circumstances, although it retained that requirement with respect to documentary evidence relevant to the issue of operator liability. Instead, the Department proposed allowing admission of documentary medical evidence in excess of the § 725.414 numerical limitations upon a showing of good cause. Accordingly, in its second proposal, the Department revised section 725.456, adding subsections from 20 CFR 725.456 (1999) to govern the submission of documentary medical evidence to the administrative law judge. 20 CFR 725.456(b)(1)-(3), (c), (d) (1999). The Department also revised subsection (f), now subsection (e), to reflect changes to § 725.406. 64 FR 54996 (Oct. 8, 1999).
(b) A number of comments object to the Department's addition of proposed subsection (c) to § 725.456, which prohibits parties from introducing documentary evidence at the formal hearing that was in their possession while the case was pending before the district director and was withheld from the district director or any other party. Several of the comments argue under a parallel provision, proposed § 725.414(e), that the provision will most severely affect claimants who are not represented by counsel while the case is pending before the district director, and who may unwittingly fail to provide the district director with evidence that they have developed. Another comment urges the Department to harmonize subsection (c) with section 725.414(e).
Subsection (c) was originally promulgated by the Department in 1978, and was designed to ensure that the district director's initial determination of the claimant's eligibility was based on all of the available evidence regarding the miner's medical condition. The subsection was also designed to ensure that the parties had adequate time to respond to an opponent's evidence.
(c) One comment argues that the Department's revision imposes increased costs on coal mine operators by “front-loading” the evidentiary development process in claims where such development is unnecessary or could be delayed. This comment appears to be based on the mistaken belief that the Department's regulations continue to require the parties to submit all of their documentary medical evidence to the district director. The Department revised its proposal in 1999, and § 725.456, as reproposed, will allow both the claimant and the designated responsible operator in a claim to delay their development of documentary medical evidence until shortly before the formal hearing. In the event that a claim does not proceed beyond the district director level, the operator will not have to develop any medical evidence. This is the operators' current practice in many claims.
The Department acknowledges, however, that operators will still be required to submit evidence regarding their potential liability for the claim to the district director while the claim is being adjudicated at this earliest stage. Under the former regulations, an operator did not have to submit any evidence to support its denial of liability until the case was referred to the Office of Administrative Law Judges for a formal hearing. In a number of cases, where no party requested a hearing, the operator did not need to develop or submit this evidence at all. Thus, the commenter's observation that the revised regulations will require the “up-front” development of evidence is well-taken with respect to operator liability evidence. In both its initial notice of proposed rulemaking and its second notice of proposed rulemaking, however, the Department explained its intention to require potentially liable operators to submit evidence relevant to their employment of the miner and their financial capability to pay benefits at the earliest possible stage. 62 FR 3355-56 (Jan. 22, 1997); 64 FR 54990-91 (Oct. 8, 1999). In these final regulations, the Department has also required operator development and submission of any evidence relevant to the liability of another party during the district director's claims processing. Evidentiary
(d) One comment submitted in response to the 1997 proposal and the 1999 reproposal states that the Department's revision eliminates the authority of administrative law judges to perform certain functions. Another comment argues that the revision marginalizes administrative law judges and demeans their powers and duties. Although neither comment offers specific examples of functions, powers, and duties that the Department has eliminated by revising section 725.456, the Department has independently reviewed the provision and does not believe that it eliminates any function currently performed by the administrative law judge, nor any power or duty that administrative law judges currently possess. Under the revised regulations, administrative law judges will retain full authority to decide any issue in respect of a claim, as required by section 19(a) of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 919(a), as incorporated by 30 U.S.C. 932(a). Neither the Longshore Act nor the Administrative Procedure Act gives administrative law judges the right to demand that more evidence be made available for their decision-making. To the extent that they are unpersuaded by the evidence of record, the administrative law judge must decide that issue against the party that bears the burden of producing the evidence on that issue.
(e) One comment argues that the revised regulation denies the rights of all parties to fully cross-examine adverse evidence and witnesses. The Department does not agree that section 725.456 affects the rights of any party to cross-examine adverse evidence. In
(f) One comment argues that a party should not be required to make an independent showing of “good cause” in order to put on its case. The Department does not agree that § 725.456 prohibits a party from putting on its affirmative case. In combination with § 725.414, this provision places reasonable limitations on the number of medical reports and tests that a party may submit into evidence. A showing of “good cause” is necessary only in the event that a party seeks to convince the administrative law judge that the particular facts of a case justify the submission of additional medical evidence, either in the form of a documentary report or testimony. The Department believes that in the majority of cases, the quantity of medical evidence permitted by the regulations, even in the absence of a good cause showing, will provide a more than adequate evidentiary basis for an administrative law judge to determine the claimant's eligibility for benefits.
(g) Three comments approve of the Department's reinstatement of the 20-day rule governing the introduction of documentary evidence before the administrative law judge.
(h) One comment argues that § 725.457(d) is invalid in that it prohibits a physician from testifying as to medical evidence relevant to the miner's condition that is not contained in the record. This comment is more appropriately addressed under section 725.457.
(i) No other comments were received concerning this section and no other changes have been made in it.
(a) In its initial notice of proposed rulemaking, the Department proposed revising subsection (c) to conform the regulation to the requirement then in § 725.414 that a party identify all of its potential witnesses while the claim was pending before the district director. The Department also proposed adding a subsection (d) to address the permissible scope of a medical witness's testimony. 62 FR 3362 (Jan. 22, 1997). In light of changes to § 725.414 in the second notice of proposed rulemaking, the Department proposed altering the witness identification requirement so that it applied only to witnesses who were testifying to the liability of a potentially liable operator or the designation of the responsible operator. Thus, under the reproposal, the testimony of witnesses relevant to the liability of a potentially liable operator and/or the identification of the responsible operator was permissible only if the identity of that witness was disclosed to the district director.
In the second proposal, the Department eliminated the requirement that parties identify their medical witnesses while the case was pending before the district director because, as revised, the regulations allowed parties to forego development of medical evidence until a case was referred to the Office of Administrative Law Judges. In the reproposal, the testimony of medical witnesses was limited by only two considerations. First, the total number of medical reports and medical witnesses offered by a party could not exceed the limitations set forth in § 725.414 except upon a showing of good cause. Second, a party had to provide the other parties to a claim with appropriate notice of a witness' testimony: 10 days notice of any expert witness who would testify at the hearing, or 30 days notice of a deposition. The Department also revised subsection (d) to permit physicians to testify with respect to any medical evidence relevant to the miner's physical condition that was admitted into evidence. 64 FR 54996 (Oct. 8, 1999). The Department has added a clause to subsection (a) to clarify its intent that parties provide 10 days notice of any medical witness that they intend to present at the hearing, including witnesses who have prepared a medical report that has already been submitted into evidence.
(b) One comment argues that it is unreasonable to require a party to
The Department does not agree, however, that revised § 725.457 diminishes the authority of administrative law judges. Under the procedures incorporated into the Black Lung Benefits Act from the Longshore and Harbor Workers' Compensation Act and the Administrative Procedure Act, administrative law judges are neutral arbiters of the issues presented to them for resolution. Based on the evidence submitted by the parties within the confines of the regulations promulgated by the Secretary, ALJs have “full power and authority to hear and determine all questions in respect of such claim.” 33 U.S.C. 919(a), as incorporated by 30 U.S.C. 932(a). The requirement that parties identify witnesses relevant to the issues of operator liability while a case is pending before the district director, and the limitation on expert testimony, are legitimate agency procedural rules designed to ensure the timely presentation of the evidence needed to adjudicate black lung benefits claims.
(c) Two comments state that the notice provision in subsection (a) should be harmonized with section 725.414(c). The Department does not believe that these provisions are in conflict. Subsection 725.414(c) requires the designated responsible operator to identify witnesses whose testimony may be introduced, either at the hearing or by deposition, on the issues relevant to operator liability while the claim is pending before the district director in the absence of extraordinary circumstances. The Department anticipates that the vast majority of these witnesses will be “fact witnesses,”
(d) One comment argues that the Department's limitation on the testimony of physicians found in § 725.457(d) is more restrictive than that in the Federal Rules of Evidence and inconsistent with section 23 of the Longshore and Harbor Workers Compensation Act, 33 U.S.C. 923, as incorporated by 30 U.S.C. 932(a). The Department's regulation prohibits a physician who offers testimony from relying on materials relevant to the miner's medical condition that are not part of the record. The commenter contrasts the regulation with the Seventh Circuit's recent decision in
The regulations under which
Contrary to the commenter's objection, then, the Department's revision does not “violate” the Seventh Circuit's decision in
Nor does section 725.457 violate section 23 of the Longshore Act. Section 23(a) provides that an administrative law judge “shall not be bound by common law or statutory rules of evidence or by technical or formal rules of procedure, except as provided by this chapter.” 33 U.S.C. 923(a), as incorporated by 30 U.S.C. 932(a). Even if this provision could be read as prohibiting the Department from promulgating any regulations under the Longshore Act that govern hearing procedures and the submission of evidence, the Black Lung Benefits Act explicitly authorizes the Secretary of Labor to promulgate regulations that vary incorporated Longshore Act provisions in order to properly administer the black lung benefits program. 30 U.S.C. 932(a);
(e) One comment approves of the Department's revision of the regulation with respect to the testimony of medical witnesses.
(f) No other comments were received concerning this section.
(a) In its first notice of proposed rulemaking, the Department proposed revising this regulation to ensure that the limitation on the scope of a physician's testimony set forth in § 725.457 was also applicable to testimony offered by deposition and to responses to interrogatories. 62 FR 3362 (Jan. 22, 1997). The Department did not discuss this regulation in its second notice of proposed rulemaking.
(b) The Department received several comments concerning the cross-reference to § 725.457(d). The reference to § 725.457(d) incorporates into the rule governing depositions and interrogatories the limitations on the scope of physician-witnesses' testimony at hearing. For the reasons expressed in connection with the reproposal of § 725.457, the scope of allowable physician testimony has been broadened to allow a physician to address all of the other medical evidence of record. 64 FR 54996 (Oct. 8, 1999). No response is therefore necessary to comments addressing the operation of § 725.458, with one exception. One commenter suggests that § 725.458 will permit a party to introduce the deposition testimony of physicians who have not previously submitted medical reports, thereby circumventing the evidentiary limitations imposed by § 725.414. In the second notice of proposed rulemaking, the regulation governing witness' testimony generally, § 725.457, was amended to make the Department's intent clear. 64 FR 55044 (Oct. 8, 1999). Subsection (c) specifically prohibits a witness' testimony, even if taken by deposition or interrogatory, unless the witness meets the requirements of § 725.414. Thus, in the absence of a finding of good cause pursuant to § 725.456(b)(1), if a party has submitted the maximum number of documentary medical reports permitted under § 725.414, it may not submit the testimony of a physician-witness at a hearing or by deposition or interrogatory who has not submitted a written medical report. A physician who has not submitted a written report may testify only if the party has not yet reached the maximum number of documentary medical reports allowed. In such a case, the physician's testimony would not exceed the § 725.414 limitations.
(c) One comment urged the Department to replace the 30-day notice requirement in the regulation with a requirement that the parties need only give “reasonable notice” of the date, time and place of the deposition, and the name and address of each person to be examined, the current requirement under Fed. R. Civ. P. 30(b)(1). The Department has no reason to believe that the 30-day notice requirement has proved to be unworkable or even has resulted in major inconvenience to the parties in black lung benefits adjudications. Parties remain free under the regulation to agree to less than 30 days' notice when they believe it is reasonable to do so. Many parties to black lung claims do not secure representation until shortly before the hearing, however, and the Department believes that the 30-day notice of deposition, if sent to an unrepresented party, provides an appropriate period of time not only to obtain the necessary representation but also to arrange for participation in a deposition.
(d) One comment submitted in connection with the Department's first notice of proposed rulemaking urges the Department to require parties to identify, while the case is pending before the district director, all physicians that will be deposed. The commenter argues that this requirement would expedite the claims process, eliminate surprise, and require the timely development of positions. In its second notice of proposed rulemaking, the Department eliminated the proposal, contained in the first notice of proposed rulemaking, that parties submit all of their documentary medical evidence while a case is pending before the district director. The Department explained that the revision reflected the wishes of numerous commenters, and was particularly necessary in the case of claimants who might be unable to obtain representation until shortly before the hearing. 64 FR 54992-93 (Oct. 8, 1999). In light of this revision, the Department does not believe that it would be appropriate to require parties to identify all medical witnesses while a case is pending before the district director. This requirement would effectively reinstate the original proposal by requiring parties to
(e) No other comments were received concerning this section, and no changes have been made in it.
(a) The Department proposed revising section 725.459 in its first notice of proposed rulemaking in order to require any party who compels a witness to appear at a deposition or hearing or respond to interrogatories for the purpose of cross-examination to pay that witness's costs. The Department also restructured and consolidated the remainder of the regulation. 62 FR 3362 (Jan. 22, 1997). The Department reconsidered how such costs should be assigned in its second notice of proposed rulemaking, and proposed that the party offering the witness's affirmative testimony should also pay any costs associated with his subsequent cross-examination. The sole exception to this rule pertained to indigent claimants and required administrative law judges to apportion the costs of cross-examining a witness offered by such a claimant between the claimant and the party or parties defending the claim. 64 FR 54997 (Oct. 8, 1999). The second proposal also required an administrative law judge to determine the least intrusive and expensive means of cross-examination as appropriate and necessary for a full and true disclosure of the facts. 64 FR 55044 (Oct. 8, 1999).
(b) The Department has substituted the term “shall” for the term “may” in the fourth and fifth sentences of subsection (b) in order to clarify its intention that the administrative law judge is required, rather than merely permitted, to consider the apportionment of the costs of cross-examination in each case involving a witness offered by an indigent claimant.
(c) Two comments approve of the Department's revision of section 725.459 to impose the costs of producing a witness for cross-examination upon the party relying on the witness's opinion, as well as the provision allowing administrative law judges to apportion costs in cases involving indigent claimants.
(d) One comment argues that the Department's proposal violates section 28 of the Longshore and Harbor Workers' Compensation Act by attempting to shift costs to employers in cases other than those authorized by statute. Section 28(d), 33 U.S.C. 928(d), incorporated into the Black Lung Benefits Act by 30 U.S.C. 932(a), requires an employer to pay the costs, fees, and mileage for necessary witnesses attending the hearing at the request of a claimant in any case in which an attorney's fee is awarded against the employer. Section 28(d) also requires that the necessity for the witness and the reasonableness of an expert witness fee be approved by an administrative law judge, Benefits Review Board, or court. Section 28(a) limits an employer's liability for attorneys' fees to cases in which the claimant successfully prosecutes his claim for benefits after the employer or carrier contests the claimant's entitlement. Accordingly, the commenter argues, the Department cannot shift the cost of cross-examination to employers in cases where the claimant is unsuccessful.
The Department does not agree. The Black Lung Benefits Act incorporates a variety of Longshore Act provisions governing the payment of costs and fees to witnesses. As with all such provisions, the Act explicitly authorizes the Department to vary the terms of those incorporated provisions in order to properly administer the black lung benefits program and effectuate Congress's intent in providing black lung benefits.
In drafting a regulation governing the payment of witnesses' fees and costs, the Department was cognizant of its obligation to provide all parties with the right to conduct appropriate cross-examination of the witnesses offered by opposing parties. In
At the same time, however, the Department must ensure that parties are not able to prevent an opposing party from offering a particular witness' opinion simply by scheduling a deposition of that witness. This is a particular problem where the claimant is indigent. Such a claimant must initially pay a physician to provide him with a medical opinion. If the operator exercises its right to cross-examine that physician, the claimant may not be able to afford the additional fees and costs necessary to pay the physician for the time he spends answering interrogatories or attending a deposition. Absent a mechanism permitting the apportionment of such costs, the claimant may be faced with the administrative law judge's refusal to consider his doctor's opinion because the doctor was not made available for cross-examination. The Department does not believe that Congress intended this result, and does not believe that a party's right to cross-examination should be used to exclude evidence offered by an opposing party that cannot afford the costs of expert testimony.
In those few cases in which there might be tension, section 725.459 strikes an appropriate balance between the twin goals of guaranteeing the right of cross-examination and ensuring a full and fair adjudication of an indigent claimant's eligibility for benefits. Consistent with incorporated Longshore Act provisions, as varied in order to
(e) One comment suggests that the Department's witness fee regulation violates Supreme Court precedent. Although the commenter does not cite any specific decision, the Court's seminal decisions on cost-shifting,
(f) One comment argues that the Administrative Procedure Act does not provide the Department with the authority to limit a party's right to cross-examine an adverse witness. The Department discussed the extent to which the Black Lung Benefits Act incorporates the Administrative Procedure Act and the extent to which the Department may vary that incorporation by regulation in its second notice of proposed rulemaking. 64 FR 54972 (Oct. 8, 1999). In addition, the Administrative Procedure Act requires only that parties be allowed to “conduct such cross-examination as may be required for a full and true disclosure of the facts.” 5 U.S.C. 556(d). The Seventh Circuit has recently observed that, under the standard used by the Social Security Administration, a standard identical to the one in the Administrative Procedure Act, “ ‘[c]ross-examination is * * * not an absolute right in administrative cases.’ ”
(g) No other comments were received concerning this section, and no changes have been made in it.
(a) The Department made a technical change to section 725.465 in its first notice of proposed rulemaking, but did not open the rule for comment. 62 FR 3341 (Jan. 22, 1997). In its second notice of proposed rulemaking, the Department proposed revising subsection (b) to prohibit administrative law judges from dismissing potentially liable operators previously identified by the district director as parties to the case, except upon the motion or the written agreement of the Director. 64 FR 54997 (Oct. 8, 1999).
(b) One comment argues that the Department's proposed limitation on the ability of administrative law judges to dismiss potentially liable operators as parties to a case impermissibly usurps the authority of administrative law judges and violates the Administrative Procedure Act. The commenter states that the proposal violates the fundamental rights of coal mine operators and forces them to remain in a proceeding after they have been adjudicated not to be a proper party. Finally, the commenter states that the proposal violates section 424(a) of the Act, 30 U.S.C. § 934(a).
The Department does not agree that any party has a fundamental right to be dismissed from a black lung benefits adjudication prior to the final resolution of the issue of operator liability. The Department's final regulations, however, governing the treatment of claims in which more than one company has been named as a potentially liable operator have rendered these objections moot except in one instance. As finally revised, section 725.418 requires the district director to dismiss all but one operator as a party before referring the case to the Office of Administrative Law Judges. The Department has revised § 725.465 accordingly. If the district director erroneously fails to dismiss all operators except the one finally designated responsible pursuant to section 725.418(d), the ALJ may do so at any time. Subsection (b), however, continues to prohibit the ALJ from dismissing the responsible operator designated by the district director except upon the consent of the Director. The Department believes that this regulation remains necessary to prevent the premature dismissal of the designated operator by an administrative law judge. Currently, some administrative law judges resolve the responsible operator issue in a preliminary decision, and may dismiss the responsible operator(s) identified by the district director. In such cases, the Director, as the representative of the Black Lung Disability Trust Fund, must either file an interlocutory appeal with the Benefits Review Board,
The revised regulation is intended to eliminate these problems, and ensure that the designated responsible operator and the Director have the opportunity to fully litigate the liability issue at all
Moreover, the revised regulation violates neither section 424 of the Black Lung Benefits Act, 30 U.S.C. 934, nor the Administrative Procedure Act. Section 424 requires coal mine operators who have been determined to be liable for the payment of benefits to a claimant to reimburse the Black Lung Disability Trust Fund for amounts the Trust Fund paid to that claimant on an interim basis. The statute requires, however, that the operator's liability have been “finally determined” before the reimbursement obligation may be enforced. 30 U.S.C. 934(b)(4)(B). Under the incorporated provisions of the Longshore and Harbor Workers' Compensation Act, that final determination includes not only an administrative law judge's decision, but also decisions by the Benefits Review Board and the court of appeals. Obviously, an appeal by an aggrieved party, including the Director, OWCP, on an operator liability issue cannot proceed in the absence of all the necessary parties. Thus, it is necessary that the designated responsible operator remain a party to a claim even while it is on appeal. Similarly, nothing in the Administrative Procedure Act gives administrative law judges the authority to issue final decisions on issues. Accordingly, the revised regulation does not violate any statutory provision. As revised, § 725.465 simply ensures that no responsible operator designated by the district director will be dismissed prior to a final determination of claimant eligibility and operator liability except with the approval of the Director.
Finally, the regulation does not preclude the designated responsible operator, in a case in which the district director committed an obvious error, from seeking the written agreement of the Director that it be dismissed as a party. The regulation, rather than giving the Director's representative veto power over an ALJ's decision, as the commenter asserts, simply protects the interests of the Trust Fund, and ensures that the Director, as a party to the litigation, receives a complete adjudication of his interests. The Board has upheld the similar requirement in subsection (d), which prohibits the dismissal of a claim in which the claimant has been paid interim benefits from the Trust Fund, absent the Director's consent.
(c) No other comments have been received concerning this regulation and no changes have been made in it.
(a) The Department proposed revising this regulation in its initial notice of proposed rulemaking in order to recognize the opinions of three appellate courts and the Benefits Review Board that had rejected the Department's interpretation of the former regulation. The Department had argued that under the former regulation an administrative law judge's decision and order should be considered filed on the date that the ALJ mailed it to the parties. The proposal adopted the view that the date of actual receipt of an administrative law judge's decision and order by the Division of Coal Mine Workers' Compensation (DCMWC) constitutes its filing date and renders the decision effective. Thus, the date of DCMWC's receipt triggers the running of the 30-day period for challenging an administrative law judge's decision. The proposal conformed the regulation to existing caselaw. 62 FR 3362-63 (Jan. 22, 1997). The Department also proposed moving the last two sentences of the former regulation to a more appropriate location in § 725.502. The Department did not discuss this regulation in its second notice of proposed rulemaking.
(b) One comment stated that the revised regulation would extend the appeal time by several days, presumably because of the time used to send the file from the Office of Administrative Law Judges to DCMWC. The courts, however, rejected the Director's interpretation of the former regulation because it impermissibly shortened the 30-day statutory appeal time.
(c) No further comments have been received concerning this section, and no changes have been made in it.
(a) In its first notice of proposed rulemaking, the Department proposed adding subsection (d) to provide that the 30-day period to appeal an administrative law judge's decision and order will commence upon a party's receipt of that document even though it was not served by certified mail or there was some other defect in service. 62 FR 3363 (Jan. 22, 1997). The Department did not discuss this regulation in its second notice of proposed rulemaking.
(b) Several comments suggest that subsection (d) is unnecessary because strict adherence to the requirement in § 725.478 for service of an administrative law judge's decision by certified mail would eliminate any question as to the date of receipt of that decision. Subsection (d) does not supplant the requirement for serving decisions by certified mail. It simply establishes that actual receipt of a decision overcomes any technical defect in service for purposes of triggering appeal and reconsideration rights. These defects are not limited to cases where service is not made by certified mail. For example, a decision may be mailed to the wrong address but the party to whom it should have been sent later learns of the decision and obtains a copy. The revised regulation would begin the 30-day appeal period upon that party's receipt. The provision thus provides an element of finality to decisions while protecting the parties' rights to pursue litigation in a timely manner.
(c) One comment objects to subsection (d) as too technical and subject to violation by unwary litigants. The Department disagrees with this characterization. Subsection (d) eliminates any doubt that a party must exercise its options for challenging a decision in a timely manner once the party has received the decision and despite any defect in service. This provision therefore protects the litigants' rights and interests by dispelling any confusion as to the effectiveness of any decision which reaches the parties despite technical nonconformance with the service process.
(d) No other comments were received concerning this section, and no changes have been made in it.
In its first notice of proposed rulemaking, the Department proposed the reorganization and renaming of the rules governing the identification of responsible coal mine operators. Section 725.490 retained its title and much of its language. The Department proposed deleting the last clause of the last sentence of subsection (b), however, in order to reflect a move to part 726 of the regulations governing the obligations of coal mine operators to secure the payment of benefits. 62 FR 3363-65 (Jan. 22, 1997). No comments were received concerning this section, and no changes have been made in it.
(a) The Department proposed revising section 725.491 in order to clarify the meaning of the statutory term “operator.” 62 FR 3363 (Jan. 22, 1997). Section 725.491 retains some material from the Secretary's current regulations, such as the rebuttable presumption of exposure to dust currently found in 20 CFR 725.492(c). Much of section 725.491's language is new, however. In particular, the Department sought to ensure that terms critical to the identification of a company potentially liable for the payment of benefits under the Black Lung Benefits Act, such as “owner” and “independent contractor,” were defined broadly in keeping with Congress' intent that the coal mining industry bear liability for individual claims to the maximum extent feasible. The Department's goal in proposing these revisions was to insure that any company, partnership, or individual that employed a “miner” could be held liable under the Act. The regulation also implements the Department's view that the officers of an uninsured corporate coal mine operator should not be considered coal mine operators in their own right. The Benefits Review Board has recently accepted that view with respect to the Department's current regulations.
In its second notice of proposed rulemaking, the Department revised subsection (a)(2)(i) in response to one comment to ensure the consistent use of the term “coal mine dust” rather than “coal dust.” 64 FR 54998 (Oct. 8, 1999). In addition, the Department responded to comments about its definition of independent contractors in subsection (c) and its exclusion of the federal government and state governments as operators in subsection (f). 64 FR 54997-98 (Oct. 8, 1999).
(b) One comment suggests that retroactive application of the Department's revised responsible operator regulations is impermissible. Although these new regulations will apply only to claims filed after the date on which the revisions become effective,
The Department disagrees with the premise of the argument. The Black Lung Benefits Act, which is subchapter IV of the Federal Mine Safety and Health Act, has incorporated the definition of the term “operator” found in section 3(d) of the FMSHA, 30 U.S.C. 802(d), since its enactment in 1969. The Secretary's regulations do not attempt to expand that definition, either by imposing liability on companies that are not currently liable for benefits, or by increasing the number of employees for which a coal mine operator may be held liable. The Black Lung Benefits Act and the Secretary's implementing regulations have consistently contained expansive definitions of terms such as “operator” and “independent contractor,”
(c) One comment argues that even if certain individuals, such as food service workers, may be considered “miners” under the BLBA, the Department should not require the employers of such individuals to bear liability for the payment of any benefits to which they become entitled. The commenter suggests that the Department's regulation would require a number of companies with only a tenuous relationship to the mining of coal to purchase insurance in order to cover the risk that they will be liable for the payment of benefits. Adopting the commenter's suggestion that these companies should be exempt from liability, however, would require imposing potential liability for their employees' claims on the Black Lung Disability Trust Fund. In its initial proposal, the Department took note of Congress' intent that the coal mining industry, rather than the Black Lung Disability Trust Fund, bear liability for the payment of individual claims to the maximum extent feasible.
(d) One comment objects to the Department's exclusion in subsection (f) of state and federal governments from the term “operator.” With respect to state governments, the commenter argues that there is no indication that Congress intended to exempt the states from the Act's broad coverage of coal mine operators. As the Department has previously explained, however, the test
The commenter's true complaint appears to be that the liability for benefits payable to a claimant who was a miner before he became a coal mine inspector will fall on the operator that employed the claimant as a miner. The Fourth Circuit interpreted the Department's current regulations to require this result in
(e) No other comments have been received concerning this section, and no changes have been made in it.
(a) The Department proposed revising section 725.492 to specifically define the term “successor operator” and address the issues posed by this category of coal mine operator. 62 FR 3364 (Jan. 22, 1997). The revised regulation largely tracks the language of section 422(i) of the Act, 30 U.S.C. 932(i), and provisions contained in the current version of 20 CFR 725.493. In addition, the Department clarified the definition to give effect to Congress' demonstrated interest in ensuring that a wide variety of commercial transactions was sufficient to give rise to successor liability under the Black Lung Benefits Act. 30 U.S.C. 932(i)(3). The Department did not make any additional revisions to this regulation in its 1999 proposal, 64 FR 54998-99 (Oct. 8, 1999), but did respond to two comments relating to the purchase of coal assets in a corporate reorganization or liquidation and the primary liability of a prior operator's insurance company.
(b) One comment states that subsection (e) exceeds the scope of the Act by suggesting that a purchase of mineral rights alone may be sufficient to attach liability to the purchaser as a successor operator. The commenter argues that the BLBA imposes liability only on operators of coal mines. Subsection (e) defines “acquisition” of a coal mine to include any transaction that transfers the right to extract or prepare coal at a mine. This regulation is based on the statutory definition of an “operator,” which includes not only the operator of a mine but also the mine's owner. 30 U.S.C. 802(d). In addition, the Department's regulations have long recognized that the lessor of coal mining property may bear liability for the payment of benefits in certain cases.
(c) No other comments have been received concerning this section. The Department has added a comma in subsection (c) and deleted a comma in subsection (d)(1) in order to clarify the punctuation of the regulation.
(a) In its first notice of proposed rulemaking, the Department proposed revising section 725.493 to define the required relationship between a coal mine operator and a coal miner, the statutory basis for an operator's liability for the miner's claim under the Black Lung Benefits Act. 30 U.S.C. 932(a). 62 FR 3364 (Jan. 22, 1997). The Department made a technical change in its second notice of proposed rulemaking. It also added more specific language to subsection (a)(1) to recognize as sufficient to establish the requisite employment relationship a variety of arrangements between a worker and the entity that supervises that work. 64 FR 54999 (Oct. 8, 1999).
(b) One comment states that the Department's regulation will eliminate the current operator practice of leasing employees. The Department's response to this comment is set forth under section 726.8. No other comments have been received concerning this section, and no changes have been made in it.
(a) Section 725.494 provides the criteria for the identification of one or more “potentially liable operators” with respect to a claim for benefits. 62 FR 3364 (Jan. 22, 1997). For each claim, the group potentially includes all of those operators who meet the criteria currently contained in 20 CFR 725.492 and 725.493 (
(b) One comment received in connection with the Department's consideration of alternatives under the Regulatory Flexibility Act urges the Department to identify only the coal mine operator that is most likely to be liable for the payment of benefits as the responsible operator. The commenter does not distinguish between processing the claim at the district director level and the formal adjudication of the claim beyond that level. The commenter's main concern, however, appears to be the transaction costs imposed by the proposed “joint defense” requirement. The Department has eliminated the requirement that operators participate in the joint defense of the claimant's
In addition, a number of courts have been critical of the length of time it takes to resolve individual black lung benefits claims,
(c) No comments have been received specifically relating to this section, and no changes have been made in it.
(a) Section 725.495 contains the criteria for deciding which of the miner's former employers will be the responsible operator liable for the payment of benefits to the miner and/or his survivors. 62 FR 3364-65 (Jan. 22, 1997). From among the employers that meet the criteria in § 725.494 for a potentially liable operator, section 725.495 assigns liability to the company that most recently employed the miner. In addition, the regulation explicitly assigns burdens of proof in the adjudication of the responsible operator issue. The regulation thus fills the regulatory void noted by the Fourth Circuit in
(b) The Department has revised the language of the first sentence of subsection (d) to reflect changes in the manner in which the district director will process claims, set forth in §§ 725.410-725.413, as well as the change in § 725.418(d) which prohibits the district director from forwarding a case to the Office of Administrative Law Judges with more than one operator as a party.
(c) One comment suggests that a miner's prior employer should not have to bear liability for a claim when the financial inability to pay benefits of another coal mine operator who more recently employed the miner is the responsibility of the Department. For example, the commenter notes, the Department accepted as insurers a number of “group self-insurance associations” that are currently unable to make benefit payments because they did not adequately secure the payment of claims for which they were ultimately held liable. Under section 423(a)(2) of the Act, 30 U.S.C. 933(a)(2), however, the Department is obligated to accept insurance coverage from any company, association, person or fund that is authorized under the laws of any State to insure workmen's compensation.
By contrast, the Department does have the authority to accept or reject applications for self-insurance and to set the minimum standards applicable for qualifying as a self-insurer. 30 U.S.C. 933(a)(1). To the extent that the security deposited by a self-insured coal mine operator pursuant to § 726.104 proves insufficient to pay individual claims, the Department agrees that the liability for those claims should not be placed on operators that previously employed the miner. Rather, in establishing the amount of security required, the Department voluntarily accepts the risk that self-insured operators will not have deposited sufficient security to pay claims if they are liquidated or become bankrupt.
Accordingly, the Department has added paragraph (a)(4) to section 725.495. The regulation does not affect the liability of any operator that employed the miner after his employment with the self-insured operator ended, even if that latter employment only lasted one day, provided the miner's cumulative period with that employer totalled at least one year. In determining the length of this cumulative period, the factfinder should include any period for which the employer is considered a successor operator to the miner's actual employer,
(d) Several comments continue to object to the imposition of a burden of proof on the potentially liable operator that the Department designates as the responsible operator. The regulation imposes on the Department the initial burden of establishing that the designated operator is a potentially liable operator, assisted by a presumption in subsection (b) that the designated operator is financially capable of assuming liability for the payment of benefits. In addition, if the district director designates as the responsible operator any operator other than the miner's most recent employer, he must include in the record a statement explaining the reasons for his finding and, if appropriate, an explanation of the Department's search of its insurance files. The burden then shifts to the designated responsible operator to prove either that it is financially incapable of assuming liability for the payment of benefits or that another potentially liable operator (
(e) One comment argues that the Department's imposition of the burden of proof on the designated responsible operator violates the Supreme Court's decisions in
(f) Two comments argue that potentially liable operators should not be required to submit all of their evidence demonstrating the liability of other more recent of the miner's employers within the first 90 days after they receive notice of the claim. As the Department has discussed more fully in its response to comments concerning section 725.408, the 90-day time limit in that regulation is applicable only to the submission of evidence, generally within the control of an operator notified by the Department, which establishes that the operator is not a potentially liable operator in the claim. This includes evidence that the employer was not an operator for any period after June 30, 1973; that the operator did not employ the miner as a miner for a cumulative period of at least one year; that the miner was not exposed to coal mine dust while working for the employer; that the miner's employment did not include at least one working day after December 31, 1969; and that the employer is financially incapable of assuming liability for the payment of benefits.
(g) No other comments have been received concerning this section, and no other changes have been made in it.
Although the Department received comments relevant to this section, the regulation was not open for comment,
(a) The Department proposed significant changes to the current § 725.502 in its initial notice of proposed rulemaking. 62 FR 3412-13 (Jan. 22, 1997). The most important changes were designed to make clear to responsible operators their obligations under the terms of an effective award of benefits even though the claim might still be in litigation. By clarifying the obligations of a liable party pursuant to an effective award, the Department hoped to promote operator compliance. 62 FR 3366 (Jan. 22, 1997). The Department therefore proposed that a responsible operator pay all of the benefits due under the terms of an effective award,
(b) The Department has received one new comment in response to the second notice of proposed rulemaking. The commenter renews the objections stated in its response to the initial notice of proposed rulemaking, contending the Department did not respond adequately to its concerns in the 1999 preamble discussion. The comment cites several objections to requiring payment of retroactive benefits while an award is on appeal, and also objects to the assessment of the twenty-percent additional compensation for failure to pay such benefits. Specifically, the comment argues that use of the twenty-percent additional compensation is inconsistent with Congressional intent because the assessment was intended only to help claimants obtain prompt payment, and not reduce Trust Fund outlays. The comment also contends Congress intended the Fund to pay interim benefits during litigation on behalf of operators, and recoup those payments from operators only after the claimant ultimately prevails. In the commenter's view, Congress intended the Fund to share the risk of unsupportable awards with operators by assuming the operator's liability until litigation concluded and the validity of the award was established. The comment criticizes § 725.502(b)(2) because it will increase operator payments and lead to larger, and more numerous, overpayments. Finally, the comment objects to § 725.502(c), which requires the payment of one month of benefits if the miner-claimant dies in the month when eligibility commences. The comment states that the provision, in effect, allows duplicate benefits for that month in the event the survivor becomes entitled to benefits.
(c) The criticisms leveled at § 725.502(b)(2) rest on one basic premise: Since 1981, Congress has intended for the Trust Fund to pay prospective monthly benefits in all awarded claims remaining in litigation in which there is potential operator liability. Based on this premise, the commenter contends that an operator cannot be compelled by means of the § 14(f) “penalty” to pay any benefits—retroactive or prospective—until the award is final because no retroactive benefits are due and the Trust Fund is liable for the prospective benefits pending entry of a final award. The Department disagrees with the comment's premise and the conclusions derived from it.
As an initial matter, the comment does not cite any statutory section, legal authority, legislative history or other evidence for its position as to Congressional intent and the operation of the Trust Fund. It relies, instead, on an “understanding” or “agreement” between Congress and the members of the public affected by the 1981 amendments to the Black Lung Benefits Act (BLBA). None of the available material, however, supports the comment's views.
First, the expenditures which the Fund may undertake are a matter of statutory mandate. Under the Internal Revenue Code (in which the Trust Fund provisions appear), monies are available if “the operator liable for the payment of such benefits * * * has not made a payment within 30 days after that payment is due[.]” 26 U.S.C. 9501(d)(1)(A)(ii). The only limitation prohibits the payment of retroactive benefits by the Fund on behalf of operators in claims filed after the 1981 amendments. 26 U.S.C. 9501(d)(1)(A). The provision is clear: The operator is liable for any benefits which are due, and the Fund will pay only prospective benefits if the operator defaults. Section 9501(d)(1)(A)(ii) does not suggest Congress intended as a routine practice to relieve the operator of the obligation to pay benefits which are due while the claimant's entitlement remains in dispute.
Second, the legislative history of the creation and later-amended operation of the Black Lung Disability Trust Fund supports the Department's position. The historical antecedents are described in detail in
Against this background, the comment's position is untenable. In 1981, Congress amended the BLBA, in large part because the Fund was in economic crisis. The objective of the amendments was to eliminate the deficit by increasing revenues and revising eligibility criteria. A fiscally-concerned Congress would not then impose on the Fund the operators' collective liability for benefits pending conclusion of entitlement litigation in every claim.
The Department also rejects the comment's argument that vigorous use of the payment of additional compensation pursuant to section 14(f) is contrary to Congressional intent. The Department provided a detailed response to this argument in its second notice of proposed rulemaking. 64 FR 54999-55000 (Oct. 8, 1999). The response cited Congress' intention to impose liability on the operators to the maximum feasible extent, together with the provision's purpose to ensure the operator's prompt compliance with its benefit obligations. The only significant concern shown by Congress with respect to the use of section 14(f) was the caveat that the provision not apply until the operator “has the right to contest the claim.” 127 Cong. Rec. 19, 645 (1981). This concern is met by the requirement that § 14(f) does not apply until an effective award is in place, and an effective award arises only after the operator has had an opportunity for a hearing. The Department believes § 725.502(b) promotes Congress' overall objective to shift liability for the payment of benefits to those operators who owe the benefits. The significance of this objective has become more obvious since the 1981 amendments. The Fund's indebtedness to the U.S. Treasury at the conclusion of fiscal year 1997 was $ 5.487 billion. OWCP Annual Report to Congress for FY 1997 at 24.
(d) The comment challenges the allowance of one month of benefits if the miner dies in the first month during which all eligibility requirements are established. The comment contends that such a payment is not authorized by statute, and that a duplicate payment occurs if the miner-claimant dies and the survivor establishes entitlement independently because the miner's death was due to pneumoconiosis. The Department rejects this argument as a reason for eliminating the provision. As an initial matter, this provision was first promulgated as part of the original § 725.502.
(e) No other comments were received concerning this section, and no other changes have been made in it.
(a) In its initial notice of proposed rulemaking, the Department proposed adding § 725.503(d) to provide specific guidelines for determining the onset date for benefits awarded based on a modification petition. The proposed rule set forth the date from which benefits would be payable based either on a mistake in a determination of fact or on a change in the miner's condition. 62 FR 3366, 3412-13 (Jan. 22, 1997). In the case of a mistaken factual determination, the proposal employed the rules used in a miner's or a survivor's claim. If the award was based on a change in conditions and if the precise month in which the miner became disabled could not be ascertained, the proposed rule pegged the onset date to the earliest evidence supporting an element of entitlement not previously found in the claimant's favor, provided the evidence was developed after the most recent factfinder's denial of benefits. The proposed regulation drew criticism both for setting the onset date too late and for setting it too early, thereby allegedly violating a statutory requirement prohibiting the payment of benefits before the onset of the miner's entitlement. In the second notice of proposed rulemaking, the Department altered § 725.502(d)(2), noting a concern that the regulation as originally proposed would generate too much litigation. 64 FR 55001, 55050 (Oct. 8, 1999). The reproposed version required the actual onset date of entitlement to be determined if possible. If that date could not be ascertained, however, § 725.503(d)(2) set a default onset date using the date the miner filed the modification petition. The Department adopted this approach because the filing date of the application for benefits is the default onset date for approved miners' claims (20 CFR 725.503(b)), and that method had worked well in the adjudication of black lung claims in general. The Department therefore proposed using a similar method in change in conditions cases. 64 FR 55001 (Oct. 8, 1999). Use of a filing date reflects “the logical premise” that the miner would file a claim or a modification petition when (s)he believed (s)he is entitled to benefits. In the final rule, the Department has made two minor changes to § 725.503(b) and (c). Each subsection begins with similar language referring to the entitled individual to whom benefits are payable,
(b) One comment opposes the use of default onset dates for both claims and modification petitions. The comment contends the default date creates a presumption of entitlement to benefits as of the filing date when the claimant has not proven this fact. The commenter believes such a presumption violates the Administrative Procedure Act (APA), 5 U.S.C. 556(d), and the Supreme Court's decision in
Since
Thus, the courts have upheld the Department's authority to shift the burden of production to the party opposing entitlement upon a showing of the predicate facts which support the presumption without violating the APA. Section 725.503 does create a presumption of entitlement to benefits as of the filing date of the claim absent contrary evidence. The presumption rests on a twofold basis: (i) The miner has established he is entitled to benefits; and (ii) the Department's belief that an individual will file a claim when he believes himself entitled to benefits.
(c) The same comment contends that using default dates based on filing dates violates section 6 of the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 906, as incorporated by the Black Lung Benefits Act (BLBA), 30 U.S.C. 932(a). The comment suggests using as an alternative default date the date of the earliest medical evidence the adjudicator accepts as sufficient to prove the miner is totally disabled by pneumoconiosis. The Department rejects this position. Section 6(a) of the LHWCA provides in relevant part that “[n]o compensation shall be allowed for the first three days of the disability * * * Provided, however, That in case the injury results in disability of more than fourteen days, the compensation shall be allowed from the date of the disability.” 33 U.S.C. 906(a). As discussed above, Congress expressly granted the Secretary the power to tailor incorporated Longshore Act provisions to fit the black lung program: the LHWCA sections apply to the BLBA “except as otherwise provided * * * by regulations of the Secretary.” 30 U.S.C. 932(a);
In 1978, the Secretary promulgated 20 CFR 725.503 to implement section 6(a). 43 FR 36806 (Aug. 18, 1978). Like the revised § 725.503, the 1978 regulation
This approach was adopted in view of the great difficulty encountered in establishing a date certain on which pneumoconiosis, often a latent, progressive, and insidious disease, progressed to total disability. The filing date was thought to be fair since proof of onset, which was usually obtained after filing, would likely fix the date of total disability at the time at which the medical tests were administered. The filing date, on the other hand, was likely to be a more accurate measure of onset since it would be the date, or close to the date, on which the claimant felt the need to file for benefits, presumably because disability had become total.
Section 725.503 therefore deals with the difficulties inherent in identifying the particular month a miner's lung condition deteriorated to the point he became totally disabled due to pneumoconiosis. As noted above, the Department has long since concluded that pneumoconiosis is a latent and progressive disease which may manifest itself pathologically over a lengthy period of time.
The Department believes the filing date strikes a reasonable balance between overcompensating and undercompensating the miner. Section 6(a) requires the liable party to pay benefits “from the date of the disability.” 33 U.S.C. 906(a), as incorporated. If the medical evidence does not identify that date, the miner might receive either more, or less, compensation than the amount to which (s)he is entitled by using the filing date. Obviously, if the medical evidence proves that the miner became disabled only after he filed, then the filing date is inapplicable; the adjudicator must select some later date to avoid compensating the miner for a period of time when (s)he was not eligible.
The same comment also states that the use of default onset dates originated under part B of the BLBA and derives from the Social Security Act. The commenter contends that section 6(a) supersedes the Social Security Act rule for purposes of part C of the BLBA. As discussed above, default onset dates are entirely consistent with section 6(a). Furthermore, the comment does not explain why their origin has any legal relevance. The comment does not state a basis for eliminating default onset dates for part C claims.
(d) One comment opposes using the date the claimant petitioned for modification as the default onset date if benefits are awarded based on a change in the miner's condition. The commenter contends the proper default date should be immediately after the date of the adverse decision which was overturned on modification. For the reasons set out in comment (c), the Department rejects this suggestion. The filing date is the most rational point to begin benefits if the date on which the miner's pulmonary condition changed sufficiently to make him or her entitled to benefits is not established by the evidence of record. If, however, the record contains credible evidence of the miner's entitlement predating the modification petition, the onset date should be the date of that evidence provided no later credible evidence refuting entitlement exists, and the evidence was developed after the date on which the most recent denial by a district director or administrative law judge became effective.
(e) No other comments were received concerning this section, and no changes have been made in it.
(a) The Department did not open § 725.515 for comment when it issued the initial notice of proposed rulemaking, 62 FR 3341 (Jan. 22, 1997). The Department proposed amending § 725.515 in its second notice of
(b) Although one comment has suggested the Department allow claimants and responsible operators to negotiate settlements rather than fully litigate every claim, the Department opposes this suggestion. The Department's principal response to the issue of settlements appears in the Final Regulatory Flexibility Analysis, below. The Department takes the same position with respect to any assignment, release or commutation of benefits except to the extent authorized by the Black Lung Benefits Act (BLBA) or the Secretary's regulation. Such agreements are void.
(c) No comments were received concerning this section, and no further changes have been made in it.
In its initial notice of proposed rulemaking, the Department proposed a shortened § 725.522, in which subsections (a) and (b) of 20 CFR 725.522 were combined in proposed § 725.522(a). Discussion of when benefit payments are due was moved to a newly expanded § 725.502. These proposed changes were part of a general rewriting of the regulations governing the payment of benefits, Part 725, Subpart H. 62 FR 3365-67 (Jan. 22, 1997). Although no comments were received concerning this section, the Department reiterates that the cost of a miner's complete pulmonary examination at Trust Fund expense—defined as a “benefit” under § 725.101(a)(6)—is not a payment included within “overpayments” for purposes of subsection (b).
(a) In its initial notice of proposed rulemaking, the Department proposed a new § 725.530(a), setting out an operator's or carrier's obligation to pay benefits immediately when they become due pursuant to an effective order, and the consequences of an operator's failure to pay such benefits. 62 FR 3415-16 (Jan. 22, 1997). This proposed change was part of a general rewriting of the regulations governing the payment of benefits, Part 725, Subpart H. 62 FR 3365-67 (Jan. 22, 1997).
(b) Two comments object generally to the imposition of a “penalty” for an operator's failure to pay benefits when due, citing comments addressed to § 725.502. For the reasons expressed in the response to those comments, no changes are made to either regulation.
(c)(i) Several comments object to the imposition of a “penalty” for failure to pay a benefit within ten days after the payment is due, arguing that ten days is not enough time to calculate correct benefit amounts under the Black Lung Benefits Act (BLBA). The Department disagrees. This regulation does not change existing law in any material manner. The BLBA incorporates § 14 of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 914, which governs the payment of compensation under that Act. 30 U.S.C. 932(a). Section 14(f) provides that additional compensation, in the amount of twenty percent of unpaid benefits, shall be paid if an employer fails to pay within ten days after the benefits become due. The twenty-percent additional compensation provision has been an incorporated provision of Part C since the inception of the statute. Consequently, § 725.530 merely restates existing law: failure to pay the full amount of benefits owed the claimant within ten days after the benefits are due shall result in the payment of an additional twenty percent of the unpaid benefits.
(c) One comment contends the proposed changes depart from current departmental practice and penalize operators for appealing awards of benefits. The Department disagrees. Section 14(f), as noted above, is an incorporated statutory provision which has been a part of part C of the BLBA from the beginning. Its incorporation represents a policy determination by Congress to promote the prompt compliance of a responsible operator with the terms of an effective award. The proposed changes to the regulations do not vary the operation of section 14(f). Rather, they simply implement Congress' intent in placing section 14(f) into the BLBA. Whether current administrative practice does not apply section 14(f) to the maximum extent cannot change the plain meaning of the provision. Finally, imposition of additional compensation for failing to pay benefits in a timely manner is not a penalty for pursuing an appeal of an award. Section 14(f) is a tool for ensuring compliance with an operator's benefits obligations once an effective award is in place and regardless of what subsequent litigation strategy the operator chooses to pursue.
(d) No other comments were received concerning this section, and no changes have been made in it.
The Department did not open § 725.533 for comment when it issued the initial notice of proposed rulemaking, 62 FR 3341 (Jan. 22, 1997). When the Department issued its second notice of proposed rulemaking, it proposed minor changes in the regulation and invited comments from the public. 64 FR 54971, 55001-02 (Oct. 8, 1999). Specifically, the Department proposed deleting provisions concerning section 415 “transition” claims, 30 U.S.C. 925, in both the current 20 CFR 725.403 and 725.533. Although the Department does not intend to alter the rules applicable to any section 415 claim that may remain in litigation, parties have adequate access to these rules in earlier editions of the Code of Federal Regulations. In the final rule, the Department has added a comma after the word “circumstances” in the first sentence of subsection (a) for grammatical purposes. No comments were received concerning this section, and no other changes have been made in it.
(a) The Department proposed changing § 725.537 in the initial notice of proposed rulemaking to harmonize the regulation with proposed § 725.212(b), which requires full benefits to be paid to each surviving spouse of a deceased miner if more than one eligible survivor exists. 62 FR 3366, 3417 (Jan. 22, 1997).
(b) Two comments state that the Department cannot retroactively apply the regulation permitting more than one surviving spouse of a deceased miner to receive monthly benefits as a beneficiary without regard to the existence of any other entitled spouse (
(c) One comment contends the change permitting full benefits to multiple survivors is grounded on a false premise. The commenter states that the Social Security Administration (SSA) did not grant full benefits to multiple surviving spouses under part B of the Black Lung Benefits Act (BLBA), and “required” the Department to use the same rules. The comment does not provide any basis for either proposition. The Department rejects the comment for several reasons. First, the commenter cites no statutory authority, SSA regulation, or other evidence for its description of SSA practice, and thus no conclusions can be drawn about that agency's official practice concerning the issue. Second, SSA administered Part B of the BLBA, but the Department has had sole authority over Part C since January 1, 1974. Whatever SSA's internal views or practice, it cannot bind the Department if the Department concludes the statute requires a different result. Third, the Department believes the law compels what the revised regulation provides. In the initial notice of proposed rulemaking, the Department provided a detailed legal analysis of the pertinent statutory authorities and legislative history, all of which support awarding full monthly benefits to more than one surviving spouse.
(d) No other comments were received concerning this section, and no changes have been made in it.
(a) The Department did not open § 725.543 for comment when it issued the initial notice of proposed rulemaking, 62 FR 3341 (Jan. 22, 1997). The Department received a number of comments, however, offering general criticisms of the overpayment waiver and adjustment criteria; the program had been using criteria developed by the Social Security Administration (SSA) for waiver of overpayments incurred under Part B of the Black Lung Benefits Act (BLBA). In response, the Department proposed revising § 725.543 to adopt the waiver standards in 20 CFR part 404, which are used by the SSA in administering title II of the Social Security Act. 64 FR 55055 (Oct. 8, 1999). The Department explained that the part 404 criteria better reflect the current law than the part 410 criteria because the part 410 have not been revised since 1972. 64 FR 55002 (Oct. 8, 1999).
(b) One comment generally opposes the extension of the overpayment waiver and recovery procedures to claims involving responsible operators, and incorporates by reference its response to § 725.547. The comment does not specifically address the substance of proposed § 725.543. The Department responds to comments concerning § 725.547 at that provision.
(c) No other comments were received concerning this section, and no changes have been made in it.
(a) The Department did not open § 725.544 for comment when it issued the initial notice of proposed rulemaking, 62 FR 3341 (Jan. 22, 1997). The Department did receive one comment which noted that the maximum amount subject to compromise had been raised to $100,000. 64 FR 55002 (Oct. 8, 1999). The Department proposed changing § 725.544 to reflect that fact, and to replace the reference to the Federal Claims Collection Act of 1966, now repealed, with a citation to 31 U.S.C. 3711. 64 FR 55055-56 (Oct. 8, 1999).
(b) One comment opposes in general terms the extension of the overpayment waiver and recovery procedures to claims involving responsible operators, and incorporates by reference its response to § 725.547. The comment does not specifically address the substance of proposed § 725.544. In any event, this provision only applies to the compromise of debts owed the United States government.
(c) No other comments were received concerning this section, and no changes have been made in it.
(a) In the initial notice of proposed rulemaking, the Department proposed amending § 724.547 to extend the waiver and adjustment provisions to overpayments owed by claimants to responsible operators. 62 FR 3366, 3419 (Jan. 22, 1997). Formerly, these protections had applied only to claimants who had been overpaid by the Trust Fund. 20 CFR § 725.547(a). The Department concluded that the opportunity to obtain a waiver or adjustment of the debt should be made available to all claimants regardless of their benefits' source. The Department received numerous comments opposing the proposed change for a variety of reasons. 64 FR 55002-03 (Oct. 8, 1999). Comments urging the Department to limit recoveries to the adjustment of future benefits, and objections based on increased difficulties for operators in recovering overpayments, were rejected based on the policy considerations set forth in the initial notice of proposed rulemaking. 62 FR 3366-67 (Jan. 22, 1997). The Department also rejected the position that waiver of an overpayment owed an operator amounted to the unconstitutional deprivation of property, citing caselaw upholding overpayment recoveries under the more restrictive Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 914(j), 922, as incorporated by 30 U.S.C. § 932(a). Finally, the Department addressed comments urging changes in the legal test for waiver by noting that the test is derived from an incorporated provision of the Social Security Act (SSA). The Department did, however, propose changes to § 725.543, adopting more current criteria for waiver.
(b) Two comments oppose the Department's use of the SSA waiver provisions rather than the LHWCA approach to the problem. The Black Lung Benefits Act (BLBA) incorporates the overpayment provisions of both statutes. 42 U.S.C. 404(b), as incorporated by 30 U.S.C. 923(b), 940 (SSA); 33 U.S.C. 914(j), 922, as incorporated by 30 U.S.C. 932(a) (LHWCA). The SSA requires the agency to obtain reimbursement of overpaid benefits unless the claimant can prove recovery would either deprive him of the financial resources to pay for necessary expenses, or violate equity and good conscience regardless of his financial condition. The LHWCA, however, limits recovery to the adjustment of future benefits; if no benefits will be paid, no overpayment can be recovered. In the initial notice of proposed rulemaking, the Department reviewed the reasons for using the SSA provisions: judicial precedent upholding the Department's authority to recover overpayments under the SSA scheme; adverse financial consequences for the Fund if the Department used the more restrictive Longshore provisions; and the protections afforded claimants by the waiver procedure, which limits recovery to those individuals who can afford to reimburse the overpaid benefits. 62 FR 3366-67 (Jan. 22, 1997). In the second notice of proposed rulemaking, the Department acknowledged the comments advocating use of the LHWCA model but relied on the policy considerations previously advanced. 64 FR 55002 (Oct. 8, 1999). The Department continues to believe that these considerations provide valid reasons for using the SSA provisions as the basis for the Department's overpayment recovery procedures. Moreover, adopting the more current overpayment criteria in 20 CFR part 404 will conform the Department's practice to changes in the law since 1972.
(c) One comment states that the Department's response to comments in the second notice of proposed rulemaking, 64 FR 55002-03 (Oct. 8, 1999), failed to answer several concerns raised in the initial round of comments. Specifically, the original comment contended that: the LHWCA provisions supersede the SSA provisions with respect to part C claims, citing
(d) One comment focuses on the differences between the LHWCA and BLBA programs as a basis for distinguishing caselaw under the LHWCA holding that limitations on overpayment recovery do not deprive employers of property rights. The comment stresses that LHWCA claimants generally suffer job-related traumatic injuries which are promptly known by the employer, and the claims litigation is resolved quickly. By contrast, the commenter notes that BLBA claimants generally file after retirement and the entitlement litigation is lengthy because the issues are contentious; the protracted litigation therefore causes delays and correspondingly larger overpayments since operators must pay benefits during the litigation. Based on these contrasts, the comment argues that the limitations imposed on the operator's right to recover overpayments by § 725.547 should be abandoned because the operator has no effective means of defending its interests. In effect, the commenter argues that the inherent delays in BLBA claims adjudication raise due process concerns because the delays generate large overpayments which will be uncollectible under § 725.547.
The comment rests on the premise that inherent delays exist in the adjudication of black lung claims, and that the delays amount to
The commenter implies that the prejudice which establishes the denial
(e) One comment supports § 725.547.
(f) No other comments were received concerning this section, and no changes have been made in it.
(a) Formerly, in any case involving an underpayment or an overpayment, § 725.547(c) and (d) empowered district directors to issue orders protecting the parties' interests and to resolve disputes over the orders using the procedures applicable to entitlement issues. 20 CFR 725.547. Based on its title, “Applicability of overpayment and underpayment provisions to operator or carrier,” section 725.547 applied only to cases involving responsible operators. The Department intends that these provisions should apply to overpayment and underpayment cases involving both responsible operators and the Black Lung Disability Trust Fund. Accordingly, the Department proposed § 725.548 in the second notice of proposed rulemaking as a regulation of general applicability, and moved § 725.547(c) and (d) to the proposed regulation. 64 FR 55003, 55056-57 (Oct. 8, 1999).
(b) No comments were received concerning this section, and no changes have been made in it.
(a) In its initial notice of proposed rulemaking, the Department proposed revising § 725.606 in order to require that uninsured operators, including coal mine construction and coal transportation employers, secure the payment of benefits in individual claims that have been awarded and for which they have been determined liable. 62 FR 3367 (Jan. 22, 1997). The regulation establishes a procedure under which such an operator may be compelled to post the necessary security in the absence of evidence demonstrating that the operator has taken other action to secure the benefit payments. In addition, the regulation distinguishes between operators who were required to, but did not, comply with the security requirement in 30 U.S.C. 933, and coal mine construction and coal transportation employers, who are not required to comply with that requirement. An uninsured employer that failed to comply with 30 U.S.C. 933 is required to post security worth no less than $175,000, while an uninsured employer that is either a coal mine construction or transportation employer is entitled to an individualized assessment of the amount of security required based on actuarial projections. That company also must secure the payment of all future benefits, however. The Department corrected a typographical error in subsection (c) in its second notice of proposed rulemaking, and responded to a comment regarding coal mine construction employers. The commenter argued that the proposal inappropriately imposed personal liability on the corporate officers of a coal mine construction employer that fails to comply with the post-award security requirement, and further stated that the proposal was unnecessary with respect to coal mine construction employers, who comply with their obligations to pay benefits. The Department responded by demonstrating the legal basis for its imposition of personal liability on the officers of corporate coal mine construction employers. The Department also observed that, notwithstanding compliance by coal mine construction employers, there was no basis for excluding construction companies from the requirements imposed by the Black Lung Benefits Act. 64 FR 55003 (Oct. 8, 1999).
(b) One comment continues to disagree with the requirement that coal mine construction employers secure the payment of awarded claims, arguing that the Department's experience with construction employers has been satisfactory. In its second notice of proposed rulemaking, the Department discussed a similar comment at length. 64 FR 55003 (Oct. 8, 1999). The Department did not dispute the observation that coal mine construction employers generally complied with their obligations to pay awarded claims. The Department explained, however, that the proposed revision to § 725.606 represented the Department's attempt to fulfill its responsibility to identify all parties' obligations under the Black Lung Benefits Act. The Department also noted that proposed § 725.606 represented an efficient means of enforcing the obligations of all parties.
The commenter now states that the proposal would impose an onerous and punitive burden on coal mine construction employers. The Department disagrees. The regulation does not require an uninsured employer to deposit funds with a Federal Reserve Bank in every case. Instead, such a deposit is required only if the employer cannot satisfy the adjudication officer that the award is otherwise secured. For example, a large, well-established coal mine construction employer may be able to demonstrate that its current size and assets are sufficient to allow it to pay benefits for the lifetime of the claimant. In such a case, the adjudication officer may permit the employer to meet the security requirement in a manner other than depositing funds with a Federal Reserve Bank. An employer, for example, may purchase an indemnity bond, one of the methods specifically listed in subsection (a), or may request that the adjudication officer approve another mechanism that will guarantee the payment of benefits in case the employer ever becomes unable to meet its obligations.
In addition, the Department does not accept the premise that it must allow coal mine construction employers to avoid the security requirement simply because most of them are current in their payment obligations. If even one such employer currently paying benefits seeks bankruptcy protection, all of the awarded claims for which that employer
(c) One comment states that coal transportation employers are generally unaware of their potential liability for black lung benefits, and are surprised when they are identified as a responsible operator in the adjudication of an individual claim for benefits. At that point, the commenter maintains, any insurance that they are able to purchase will not cover benefits owed to the former employee who has already filed a claim. The commenter requests that the proposed regulations prohibit the case-by-case adjudication of issues of coverage involving coal transportation employers.
The Department does not believe that it is necessary to revise the regulations to provide further guidance to coal transportation employers. Neither does the Department deem it advisable to limit the authority of adjudication officers to apply the pertinent statutory and regulatory definitions to claims for benefits filed by employees of transportation employers. Congress amended the Federal Mine Safety and Health Act in 1977 to include “any independent contractor performing services or construction” at the Nation's coal mines.” 30 U.S.C. 802(d); Pub. L. 95-164, 91 Stat. 1290, § 102(b)(2) (1977). When it amended the Black Lung Benefits Act several months later, Congress specifically recognized, in two separate provisions, that coal transportation companies were now liable for the payment of benefits. First, Congress amended the definition of the term “miner” to include “an individual who works or has worked in coal mine construction or transportation in or around a coal mine, to the extent such individual was exposed to coal dust as a result of such employment.” 30 U.S.C. 902(d); Pub. L. 95-239, 92 Stat. 95, § 2(b) (1978). In addition, Congress added language to section 422(b) that exempted coal transportation employers, as well as coal mine construction employers, from the requirement that they generally secure the payment of benefits by purchasing insurance or seeking the Department's approval to self-insure their obligations. 30 U.S.C. 932(b); Pub. L. 95-239, 92 Stat. 95, § 7(b) (1978). Congress provided, however, that coal transportation and coal mine construction employers may be required to post a bond or otherwise guarantee the payment of benefits in any awarded claim for which they have been determined liable.
Thus, since 1978, both the statute and the regulations have put coal mine transportation employers on notice that they could be held liable for the payment of any benefits owed to their former employees.
(d) No other comments were received concerning this section. The Department has corrected one error in the proposed regulation, replacing the phrase “the United States Treasurer” in subsection (f) with the term “a Federal Reserve Bank.” The Department explained in its initial proposal that the funds will be deposited with the appropriate Federal Reserve Bank rather than the United States Treasurer and had changed similar language in subsection (c).
(a) The Department proposed revising § 725.608 in its initial notice of proposed rulemaking in order to simplify the regulation, and to allow all parties to a claim to ascertain their obligations and rights with respect to the payment of interest. The proposal recognized that black lung beneficiaries were entitled to the payment of interest on retroactive benefits, additional compensation, and medical benefits. Interest on retroactive benefits starts to accrue 30 days after the first date on which the claimant was determined to be entitled to such benefits. Interest on additional compensation starts to accrue on the date that the beneficiary becomes entitled to additional compensation, while interest on medical benefits starts to accrue on the date that the miner received the medical service or 30 days after the date on which the miner was first determined to be generally eligible for black lung benefits, whichever date is later. 62 FR 3368 (Jan. 22, 1997)
In addition, the proposal specifically required the payment of interest by responsible operators on attorneys' fee awards. 62 FR 3368 (Jan. 22, 1997). In some cases, those awards may be issued long before the award of claimant's benefits becomes final, the first point at which the attorney is able to collect his fee under § 28 of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 928, incorporated into the Black Lung Benefits Act by 30 U.S.C. 932(a). The Department did not discuss this regulation in its second notice of proposed rulemaking.
(b) The Department has replaced the term “beneficiary” with the phrase “beneficiary or medical provider” in two places in the last sentence of subsection (a)(4). This revision is intended to conform that sentence with the first sentence of subsection (a)(4), which clearly reflects the Department's intention that medical providers as well as beneficiaries are eligible for interest to compensate them for any delays in the payment of medical benefits.
(c) A number of comments oppose the allowance of interest on attorneys' fees in general, and the computation of that interest from the date the fee is awarded until it is paid. In its first notice of proposed rulemaking, 62 FR 3368 (Jan. 22, 1997), the Department explained that the payment of such interest is necessary to buttress the economic value of fees which may take years to become due because of the duration of the underlying litigation of claimant entitlement. Although the Black Lung Disability Trust Fund is not liable for the payment of interest in any event,
With respect to the computation of interest from the date of the attorney fee award, the Department notes that any other date would not afford an attorney maximum protection of the fee's value. Although the operator is under no obligation to pay the fee at the time it is awarded, the primary purpose of subsection (c) is to protect the value of the attorney's fee from its inception. Moreover, an operator who is able to postpone the payment of an attorney's fee by appealing the underlying award of benefits is not entitled to profit from its decision to appeal unless it succeeds in overturning the award. The operator retains the money, and the use of the money, while the appeal is pending. If the award of benefits is ultimately affirmed, the operator should not reasonably expect to be able to retain any of the profits it earned on that money during the appellate proceeding. Instead, those profits, in the form of interest designed to compensate an attorney for delay, rightfully belong to the attorney who had to wait to receive payment of his fee. Consequently, the date of the fee award is the logical date from which to calculate the interest owed.
The same commenters also argue that the Department has no statutory authority to require the payment of interest on attorneys' fees. The award of fees is governed by section 28 of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 928, as incorporated by 30 U.S.C. § 932(a). Section 28 authorizes the payment of a “reasonable” attorney's fee by an employer if, after the employer controverts a claimant's entitlement, the claimant obtains an award of benefits. No fee must be paid until the award is final. The Supreme Court has held that “[a]n adjustment for delay in payment is * * * an appropriate factor in the determination of what constitutes a reasonable attorney's fee” under a fee-shifting statute.
The Court of Appeals for the Fourth Circuit recently addressed this issue in
The interest on a fee award provided by section 725.608, of course, provides compensation only for part of the delay that an attorney may face in collecting his fee,
(d) One comment supports the allowance of interest on attorney fees and on medical benefits. No other comments were received concerning this section, and no changes have been made in it.
(a) The Department proposed revising section 725.609 in its first notice of proposed rulemaking. In the revised regulation, the Department clarified its intent and authority to enforce a final award of benefits against other parties in the event the named operator is no longer capable of assuming its liability for benefits. The revised regulation outlined the other parties against which such an award might be enforced, including corporate officers and successor operators. The regulation also outlined the circumstances under which the Department may impose liability on these parties. In proposing this regulation, the Department relied on Congress' explicit determination that such entities may be held liable for these awards. 62 FR 3368-69 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
(b) One comment objects to subsection (b)'s imposition of personal liability on corporate officers of companies which provide services at mine sites. The commenter suggests that liability is inappropriate because the officers have never had notice that their employees could be considered miners, and have not previously had knowledge of an obligation to obtain insurance to cover their employees' potential benefit entitlement. The Department rejects this suggestion. Congress amended the statutory definition of “operator” in 1977 to include “any independent contractor performing services or construction at such mine[.]” 30 U.S.C. 802(d). The current regulations also recognize that an independent contractor may be held liable as a “responsible operator” with respect to any employee who performs covered services at a coal mine site. 20 CFR 725.491(c)(1). The Black Lung Benefits Act requires an operator to secure its potential benefits liability by obtaining insurance or qualifying as a self-insurer. 30 U.S.C. 932(b), 933(a). Section 423(d)(1) of the Act authorizes the Department to impose personal liability on certain officers of a corporation if the operator is a corporation that has failed to satisfy its insurance obligations. 30 U.S.C. 933(d)(1). The Department therefore disagrees that application of these provisions to employers engaged as independent contractors providing covered services at mine sites is unfair. Such corporate entities are coal mine operators under the Act, and are liable to their employees when covered employment causes them to become totally disabled by pneumoconiosis. Any such entity is required to anticipate its obligations and take adequate measures to satisfy those obligations as a cost of doing business. Moreover, since 1977, the officers of an independent contractor who meets the Act's definition of the term “operator” have been subject to the Act's imposition of liability on the officers of a corporation that fails to meet its security obligations. The revised regulation does not alter the obligation of these officers to obtain the appropriate security, nor does it impose any additional consequences for failing to comply with that obligation. Instead, it simply provides more explicit notice of those consequences.
(c) One comment approves in general terms of the enforcement provisions.
(d) No other comments were received concerning this section, and no changes have been made in it.
(a) In its first notice of proposed rulemaking, the Department proposed amending the cross-reference in subsection (a) from § 725.495 to subpart D of part 726. This amendment reflected a move to part 726 of the regulations governing the obligations of coal mine operators to secure the payment of benefits. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss § 725.620 in its second notice of proposed rulemaking.
(b) Two comments urge the Department to revise its regulations to allow parties to settle black lung benefits claims. These comments were listed as relevant to § 725.620(d) in the Department's listing of comments by issue.
(c) No other comments were received concerning this section, and no changes have been made in it.
In its first notice of proposed rulemaking, the Department proposed increasing subsection (d)'s maximum penalty amount from $500 to $550 for failing to file a required report after the date on which the regulations became effective. This revision implements the Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss § 725.621 in its second notice of proposed rulemaking.
(a) After a miner has been found totally disabled by pneumoconiosis arising out of coal mine employment, (s)he receives fixed monthly benefits for that condition. The miner is also entitled to medical benefits,
After considering the public's comments and intervening judicial decisions, the Department proposed additional changes to the regulation in its second notice of proposed rulemaking. 64 FR 55060 (Oct. 8, 1999). The Department reviewed the decisions in
(b) The Department has revised the rebuttal provisions set forth in § 725.701(e) in light of a decision from the Court of Appeals for the Fourth Circuit issued after the second notice of proposed rulemaking entered the final stage of administrative clearance. In
It is certainly true that if the treatment at issue is found to be ‘beyond that necessary to effectively treat a covered disorder, or is not for a pulmonary disorder at all,’ then the presumption ‘shall not carry the day.’
An employer contesting an award of medical benefits may also rebut the presumption by adducing sufficient credible evidence that the claimant was treated for ‘a pulmonary condition that had not manifested itself, to some degree, at the onset of his disability,’ or for ‘a preexisting pulmonary condition adjudged not to have contributed to his disability.’
(c) In response to its second notice of rulemaking, the Department received numerous comments opposing the medical benefits program in general or the § 725.701(e) presumption in particular because, in the commenters' view, coal mine operators would be forced to pay for medical treatment unrelated to pneumoconiosis, especially respiratory disorders caused by cigarette smoking. These same objections were made to the version of § 725.701(e) contained in the Department's initial notice of proposed rulemaking. 64 FR 55003 (Oct. 8, 1999). In response, the Department noted that operators may submit “appropriate medical evidence” showing the particular medical service or supply relates to the miner's smoking-related disease and not his pneumoconiosis. 64 FR 55004 (Oct. 8, 1999). An operator may still make such a showing, although the Department has revised the rebuttal provisions of § 725.701(e) in the final rule. The nexus between the miner's pneumoconiosis and the disorder under treatment is only presumed, and therefore subject to being disproved. The operator may produce evidence showing the treatment was for a particular pulmonary disorder apart from those conditions previously associated with the miner's disability, or exceeds the effective level of treatment for a covered disorder, or did not involve a pulmonary disorder at all. As with the
(d) Two comments state without explanation that the medical benefits program implemented by these regulations will force the coal industry to “subsidize” other private health plans and insurance as well as the Medicare program. The Department interprets this contention to mean that the industry and its insurers will be forced to financially assist other health care programs by paying for treatment expenses which are not actually related to the miner's pneumoconiosis, and should be paid by the other programs. The Department disagrees. Congress created the black lung medical benefits program as the primary payor for the treatment of miners afflicted with disabling pneumoconiosis. The program covers the costs of treatment, services and supplies only for that purpose. Consequently, the operator may avoid liability for any expense which is not for the treatment of totally disabling pneumoconiosis, and which therefore should be paid by some other health care program.
(e) One comment contends the Department misinterpreted
(f) One comment contends the presumption of coverage for pulmonary treatment is not supported by any scientific or medical information. The commenter relies largely on a report prepared by a physician for purposes of the rulemaking proceedings; the physician addresses several of the regulations from a medical standpoint and reviews the medical literature compiled during the rulemaking. With respect to § 725.701(e), the physician challenges the reasonableness of presuming a connection between the miner's pneumoconiosis and any pulmonary disorder for which (s)he seeks treatment. The physician notes that many pulmonary disorders bear no relationship to pneumoconiosis, and their treatment is unaffected by the presence of pneumoconiosis. The physician further contends that each patient encounter must be amply documented by evidence that the treatment is necessary for the miner's pneumoconiosis, and should include medical testing, physical examinations, etc. The Department acknowledges the concerns expressed by the comment and accompanying medical views, but does not consider any change in the regulation to be necessary.
As an initial matter, the fact that a physician might view the presumption as
The physician-commenter also urges the Department to require rigorous medical documentation for each medical treatment service, including contemporaneous objective testing, examinations, etc., to impose quality controls on the treatment program. The Department indirectly addressed this concern in the notice of reproposed rulemaking. 64 FR 55004 (Oct. 8, 1999). The Department noted that it receives 12,000 to 15,000 bills weekly for treatment services, most of which involve relatively minor amounts in the $25.00 to $75.00 range. The Department cited cost effectiveness and promptness as practical reasons for using a presumption of coverage to expedite the administrative process. The presumption supplants the need for more elaborate medical proof that the particular service or expense involves the miner's pneumoconiosis, at least until the operator challenges the expense with credible medical evidence. The Fourth Circuit reached the same conclusion in
Hence, rather than compel the miner to exhaustively document his claim for medical benefits,
(g) One comment states generally that the medical benefits program, as reproposed, will promote fraud. Another comment contends that reliance on the miner's treating physician under § 725.701(f) will promote fraudulent payments because the doctor has a financial incentive to attribute the miner's pulmonary problems to pneumoconiosis. The commenter also alludes to a long-standing pattern of abuse of the black lung program by treating physicians who mix compensable and non-compensable services when billing the Trust Fund and operators as documented in
(h) One comment urges the Department to join the lawsuit filed by the Department of Justice to recover money from the tobacco industry for costs incurred by the black lung program in treating sick cigarette smokers. The comment is not directed to any regulatory proposal, and no response is therefore warranted.
(i) The Department received several comments which approve of § 725.701.
(j) No other comments were received concerning this section, and no other changes have been made in it.
The Department proposed changing the no-approval dollar amount in § 725.706(b) from $100.00 to $300.00 in the initial notice of proposed rulemaking. 62 FR 3424 (Jan. 22, 1997). No comments were received concerning this section, and no other changes have been made in it.
The Department has received one comment relevant to Part 726 in its entirety. The Department proposed revising only specific regulations in Part 726, and invited comment only on those regulations, see 62 FR 3340 (Jan. 22, 1997); 64 FR 54970 (Oct. 8, 1999). The Department either made only technical revisions to the remaining regulations in Part 726, or made no changes,
In its initial notice of proposed rulemaking, the Department proposed adding subsection (e) to this regulation in order to recognize the addition of subpart D, implementing the civil money penalty provision of 30 U.S.C. 933, to part 726. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
This regulation was not opened for comment in the Department's first notice of proposed rulemaking.
(a) The Department proposed adding § 726.8 in its first notice of proposed rulemaking in order to define certain terms including “employ” and “employment.” The definition of “employ” and “employment” proposed in subsection (d), was identical to that in proposed § 725.493(a)(1). 62 FR 3369 (Jan. 22, 1997). In its second notice of proposed rulemaking, the Department incorporated into subsection (d) a change to the definition of the term “employment” that it had also made to § 725.493. 64 FR 55005 (Oct. 8, 1999). The Department also responded to comments concerning the retroactive effect of the proposal and the scope of the definitions. The Department stated its belief that the proposal was neither improperly retroactive nor an instrument for creating additional insurer liability. Neither did the proposal intrude on insurance functions reserved to the states. The Department noted the Court of Appeals for the Seventh Circuit's holding that the Black Lung Benefits Act “specifically relates to the business of insurance and therefore does not implicate the McCarran-Ferguson Act,” 15 U.S.C. 1012, which confers primacy on state law for the regulation of the insurance industry, unless a conflicting federal statute specifically provides otherwise.
(b) One comment objects to the Department's definitions of the terms “employ” and “employment.” The commenter argues that the Department is improperly interfering with existing employment relationships by adopting regulations that differ from those provided by state employment and insurance laws. The Department provided a detailed explanation of both its authority and its reasoning for proposing this regulation in its October 8, 1999 proposal.
(c) The same commenter also argues that the Department's regulation will eliminate the ability of a coal mine operator to enter into an employee leasing arrangement with an employee leasing company. The commenter observes that the current model employee leasing rule of the National Association of Insurance Commissioners requires the employee leasing company to provide workers' compensation coverage, including federal black lung benefits coverage, for its employees. According to the commenter, the Department's proposal, which would hold lessors responsible for the insurance of their leased employees, will make employee leasing a less viable option.
The Department does not believe that its proposal will interfere with an employer's economic decision to use leased employees in its coal mine operations. Moreover, the Department does not intend to force coal mine operators to secure the payment of benefits for leased employees when the leasing company has already obtained the necessary insurance. In such cases, the operator will be considered to have met the security requirements of the Act with respect to those employees. Such a practice is sound from the point of view of both the traditional coal mine operator and the employee leasing company. Although the commenter suggests that leasing companies are not mine operators, that is not entirely clear under the Black Lung Benefits Act. Section 423(a) of the Act, 30 U.S.C. § 933(a), requires “each operator of a coal mine” to secure the payment of benefits by qualifying as a self-insurer or purchasing insurance. The term “operator,” as used in section 423(a), includes “independent contractors who perform services or construction at such mines.” 30 U.S.C. § 802(d). This definition of “operator” thus includes companies that provide employees under a leasing arrangement. The Department therefore does not agree that employee leasing companies should not be considered “operators” under the Black Lung Benefits Act. The Department's ability to monitor the use of temporary contractual arrangements by the coal mining industry, however, is limited. In addition, the commenter's different interpretation of the term “operator” suggests that any effort to impose civil money penalties on a leasing company under Part 726, or to assign liability to such an entity under Part 725, would be vigorously contested. Accordingly, the Department has defined the terms “employ” and “employment” in a manner which maximizes its ability to ensure the insurance coverage of leased employees.
By contrast, the application of both Parts 725 and 726 to traditional coal mine operators is quite clear. The Act authorizes the Department to ensure that all of the individuals performing mining work under that operator's direction are covered by appropriate security. In addition, those coal mine operators who use leased employees are in the best position to ensure that those employees are covered by the necessary insurance. The Department does not intend to require that the traditional coal mine operator purchase insurance when the leasing company has done so, but it does intend the regulations to provide an incentive for the coal mine operator to deal only with those leasing companies that have purchased insurance meeting federal standards for black lung benefits coverage.
(d) Finally, the same comment objects that the Department's regulation is impermissibly retroactive. The Department has discussed the retroactive effect of its regulations in considerable detail in both its first and second notices of proposed rulemaking.
It is also important to note that the revised regulation does not affect the liability of insurers for claims filed prior to the effective date of the regulations. Under the insurance endorsement set forth at § 726.203, an insurer is already liable for all of the miners employed by its insured.
(e) No other comments were received concerning this section, and no changes have been made in it.
In its initial notice of proposed rulemaking, the Department proposed revising this regulation to delete the formula used in 1974 to establish the amount and types of security required for an operator to be authorized to self-insure. The proposal also removed the reference in subsection (a) to indemnity bonds and negotiable securities as the only forms of acceptable security. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
In its initial notice of proposed rulemaking, the Department proposed revising subsection (b) to recognize two additional forms of security available to an authorized self-insurer: Letters of credit and tax-exempt trusts. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
In its initial notice of proposed rulemaking, the Department proposed deleting the reference to the formula contained in 20 CFR 725.101(1999), in favor of a non-exclusive list of factors to be considered by the Department in determining the appropriate amount of security required to be provided by a self-insured operator. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
(a) In its initial notice of proposed rulemaking, the Department proposed deleting an incorrect reference to specific sections in Title 31 of the Code of Federal Regulations and replacing the reference with a citation to the appropriate regulatory part governing deposits with the United States. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
(b) One comment urges the Department to include language in this regulation confirming the sole liability of a surety company which writes the most recent indemnity bond for a responsible operator, and the exoneration of all previous sureties. No change in the regulation is necessary. In
(c) The Department has revised the first sentences of subsections (b) and (c) to clarify the meaning of these provisions. No other comments were received concerning this section, and no other changes have been made in it.
In its initial notice of proposed rulemaking, the Department proposed deleting specific references to indemnity bonds and negotiable securities in favor of more general references to the security required to be provided by a self-insured operator. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
In its initial notice of proposed rulemaking, the Department proposed deleting references to indemnity bonds and negotiable securities in subsections (a)(3) and (b) in favor of more general references to the security required to be provided by a self-insured operator. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
In its initial notice of proposed rulemaking, the Department proposed deleting a reference to indemnity bonds and negotiable securities in favor of a more general reference to the security required to be provided by a self-insured operator. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
In its initial notice of proposed rulemaking, the Department proposed adding subsection (c) to codify the Department's position that self-insured coal mine operators who cease mining coal nevertheless have a continuing responsibility to maintain adequate security to cover their potential liability under the Black Lung Benefits Act. The Department also replaced a specific reference to negotiable securities and indemnity bonds in subsection (b) with a more general reference to the security required to be provided by a self-insured operator. 62 FR 3369 (Jan. 22, 1997). The Department did not discuss the regulation in its second notice of proposed rulemaking.
(a) The Department made technical revisions to § 726.203 in its first notice of proposed rulemaking, but did not open the regulation for comment.
(b) In response to the second notice of proposed rulemaking, the insurance industry submitted two affidavits. Rulemaking Record, Exhibit 89-37, Appendix G. One, from a former vice president and general counsel of the National Council on Compensation Insurance (NCCI), states that “NCCI was informed by officials of the Office of Workers’ Compensation Programs, in writing, that the agency had no objection to the changes.” The affidavit also states that the changes were put into use. The other affidavit, from NCCI's current general counsel, states that NCCI's schedule for the retention of records requires the council to maintain correspondence for 10 years, and that correspondence more than 10 years old is destroyed in accordance with established policy. Accordingly, the affiant stated, NCCI was unable to produce a copy of the Department's “acknowledgment” of the revised insurance endorsement.
The Department has conducted a second thorough search of its files, including files in the Office of Workers' Compensation Programs, the Employment Standards Administration, and the Office of the Solicitor. Although the Department's files contain correspondence with NCCI dating back to 1984, the Department's search failed to produce any correspondence in which the Department approved NCCI's revised insurance endorsement. Moreover, the Department does not believe that it would have approved the proposed revision. The revision differs in two material respects from the endorsement set forth in § 726.203. First, the revision limits an insurer's liability for claims that are based on employment that ended before an operator first obtained insurance to secure its liability under the Act. Second, the revision limits an insurer's liability for claims that are approved as a result of amendments to the Black Lung Benefits Act.
The current black lung insurance endorsement obligates an insurer to provide coverage to an operator in two different types of claims. First, the insurer is liable when the miner's last exposure to coal mine dust in the employment of the insured “occurs during the policy period.” Thus, if a miner is last employed by XYZ Coal Company on March 1, 1990, and XYZ Coal Company is the coal mine operator responsible for the payment of that miner's benefits, the insurer whose policy covered XYZ on March 1, 1990 will be liable for the payment of those benefits. In addition, however, the endorsement covers a second type of claim. Prior to the Black Lung Benefits Reform Act of 1977, the Black Lung Benefits Act obligated employers to pay benefits to former employees who were totally disabled due to pneumoconiosis arising out of coal mine employment, no matter when their employment ended.
The regulations define the term “effective date” in the endorsement as the effective date of the operator's first insurance policy providing coverage for the operator's federal black lung benefits liability. 20 CFR 726.203(b) (1999). Thus, if the operator did not obtain its first policy until January 1, 1974, that policy would cover any claims based on employment that ended prior to that date. The revised endorsement offered by the insurance industry replaces the term “effective date” with the date “July 1, 1973.” Although a number of operators did purchase insurance before January 1, 1974, none did so until after July 1, 1973. Accordingly, the industry's revised endorsement would potentially leave coal mine operators uninsured for certain claims. For example, if an operator did not purchase insurance until November 1, 1973, the revised endorsement would cover the miner's last exposure in the employment of the insured operator only if it “occurred prior to July 1, 1973,” and therefore would not cover any claims based on employment that ended between July 1, 1973 and November 1, 1973. If the coal company is still in business, the claim would be the responsibility of that company. If the coal company is no longer in business, the claim would become the responsibility of the Black Lung Disability Trust Fund. Either result is unacceptable. Although the Department recognizes that this change would not affect a significant number of claims, it could materially alter the liability of the insurance industry in some cases. Thus, the Department does not believe that the revision is appropriate.
The second material change in the endorsement is potentially more serious. The current endorsement obligates an insurer for liability that arises under the Black Lung Benefits Act and “any laws amendatory thereto, or supplementary thereto, which may be or become effective while this policy is in force.” Following the Black Lung Benefits Reform Act of 1977, several Virginia coal mine operators sued two insurers in federal district court to obtain a declaratory judgment regarding the coverage of claims that were subject to approval under the new criteria. The court agreed with the operators and held that, under the Department's endorsement, a policy was “in force” as long as claims could be filed against it.
The court's decision was issued in 1982, and the insurance industry quickly accepted the court's invitation.
Because the revised black lung endorsement offered by the insurance industry materially alters the obligations and coverage provided by the insurance industry under the Black Lung Benefits Act, the Department must reject that endorsement. Accordingly, no changes are made to § 726.203.
(c) One comment urges the Department to add a sentence to subsection (d) of the regulation. The sentence, which the commenter states would conform the regulation to state regulatory regimes, would read as follows: “The requirements of this section shall be construed to the extent possible, harmoniously with the workers' compensation rules and practices of the state is [sic] when the coverage is provided.” Rulemaking Record, Exhibit 89-37, pp. 177-178. The commenter does not suggest any problem in the current regulations that this sentence is intended to correct, and the Department declines to add a sentence whose intent is unclear. To the extent that this sentence could be interpreted to require a result different from that reached in
The commenter also renews a suggestion, made in response to the first notice of proposed rulemaking, that subsections (b) and (c)(2) of § 726.203 should be eliminated. The commenter's first suggestion is premised on the Department's acceptance of the insurance industry's revised endorsement. As discussed above, the Department does not believe that the revised endorsement provides necessary coverage and therefore has refused to accept it. The commenter's second suggestion states that the addition of subsections (b)(1) and (b)(2) to § 725.493 have created a conflict with § 726.203(c)(2), and made the latter provision redundant. The Department disagrees because the two regulations serve wholly different purposes. Section 725.493(b)(1) governs the liability of prior and successor operators in two cases: (1) Where the miner was employed by the successor after the sale giving rise to successor liability; and (2) where the miner was never employed by the successor operator. Subsection (b)(2) governs the successor liability of companies whose relationship to the prior operator is as a parent company, as members of joint ventures, a partner, or a company that substantially owned or controlled the prior operator. Section 726.203(c)(2) governs the interpretation of the insurance contract in a case where the insured company is liable as a successor operator. Because the sections 725.493 and 726.203 govern different subjects, the Department does not believe that the regulations are in conflict, or that subsection (c)(2) is redundant.
(d) No other comments were received concerning this section, and no changes have been made in it.
Although the Department received comments under this section, the regulation was not open for comment,
Although the Department received comments under this section, the regulation was not open for comment, see 62 Fed. Reg. 3341 (Jan. 22, 1997); 64 Fed. Reg. 54970 (Oct. 8, 1999). The Department made only a technical change in the regulation. Accordingly, no changes are being made in this section.
(a) In its first notice of proposed rulemaking, the Department proposed a complete revision of the procedural and substantive regulations governing the imposition of civil money penalties against operators that fail to secure the payment of benefits under the Black Lung Benefits Act, 30 U.S.C. 933(d)(1). 62 FR 3370 (Jan. 22, 1997). These revisions included a series of graduated penalties based on the number of the operator's employees, the length of time the operator's uninsured status continues following notification, and its constructive and actual notice of its obligation to secure. In addition, the Department proposed allowing the initial assessment of penalties by the Office of Workers' Compensation Programs to become final if neither the operator nor its officers filed a timely notice of contest. The proposal also subjected decisions of administrative law judges on penalty issues to discretionary review by the Secretary. The Department did not discuss these regulations in its second notice of proposed rulemaking.
(b) The Department has made several minor changes to the regulations in Subpart D of Part 726. In § 726.302(c)(3) and (4), the Department replaced a reference to subsection (b) with a reference to subsection (c)(2)(i) to correctly identify the applicable provision. In § 726.308, the Department corrected the address of the Black Lung Benefits Division of the Office of the Solicitor and added a reference to § 725.311, which lists federal holidays. In § 726.313(f), the Department replaced the word “will” with the word “shall” to clarify the Department's intent. The Department has made minor revisions to §§ 726.300, 726.301, 726.302, and 726.305 to clarify their meanings.
(c) One comment is critical of the Department's failure to enforce its current requirement (20 CFR § 725.495 (1999)) that coal mine operators either purchase commercial insurance or qualify as self-insured entities. The commenter argues that if § 725.495 was enforced to its fullest extent, the Department would not find it necessary to alter the methods used to identify responsible operators. The Department provided a detailed explanation of the purpose behind its proposed revision of the civil money penalty regulations in its initial notice of proposed rulemaking. 62 FR 3370-71 (Jan. 22, 1997). Subpart D of part 726 replaces § 725.495 with a comprehensive scheme for the imposition of graduated penalties on those operators who fail to secure their liability for benefits. The previous regulation required only that an administrative law judge levy the maximum penalty possible in the absence of “mitigating circumstances,” and provided no guidance or criteria for determining an appropriate assessment. The revised regulations fill this void. The Department thus disagrees with the commenter's view that vigorous enforcement of penalties under 20 CFR
(d) One comment generally characterizes this revision as adding “onerous” penalties to the current program, but makes no specific criticism of them. The revised Subpart D of part 726 does not add any penalty not specifically authorized by 30 U.S.C. § 933(d), and not contained in the previous regulations. Moreover, the graduated scale of penalties contained in the revision provides specific guidelines for computing penalties and may result in a lesser penalty being imposed than the former regulation would have required. This comment does not provide any other basis for a substantive response by the Department.
(e) One comment observes that the prospect of civil money penalties may encourage an unsecured operator to pass on its liabilities to an insured successor whose carrier has not collected a premium reflecting the additional liability. To the extent that such a possibility exists in cases where the prior operator subsequently becomes unable to pay benefits to its former employees, it implicates business considerations, not legal questions. An insured operator should weigh the potential effect of acquiring an entity with unsecured benefits liability as a factor in the financial soundness of making the acquisition. The possibility of adverse economic effects on some future mergers or acquisitions, however, does not excuse the Department's obligation to enforce compliance with the Act's insurance requirements and to penalize a failure to comply.
(f) Two comments approve of the proposed civil money penalties. No other comments were received concerning this subpart, and no other changes have been made in it.
(a) In its first notice of proposed rulemaking, the Department proposed deleting Part 727 from title 20 of the Code of Federal Regulations. 62 FR 3371, 3435 (Jan. 22, 1997). The Department explained that the Part 727 regulations, which govern black lung benefits claims filed prior to April 1, 1980, are relevant only to a small minority of the claims currently pending. Because the parties to those claims are already familiar with the standards in Part 727, the Department proposed to discontinue the annual publication of that part. In lieu of continued publication, section 725.4(d), as revised, will refer individuals to the 1999 version of title 20 of the Code of Federal Regulations for a copy of the regulations.
(b) Three comments urge the Department not to discontinue its annual publication of Part 727 because the part governs claims still pending in various stages of adjudication. Although the Department recognizes that the Part 727 regulations are applicable to some pending claims, the Department does not believe that the existence of this relatively small number of cases justifies the continued publication of the part in the Code of Federal Regulations. The parties to these claims are already familiar with the regulations, and have received sufficient notice of the Department's intention to cease publication to allow them to retain their current copies of the Code. Accordingly, the Department has discontinued the annual publication of Part 727.
(c) No other comments were received concerning this part, and no changes have been made in it.
This document was prepared under the direction and supervision of Bernard Anderson, Assistant Secretary of Labor for Employment Standards.
The principal authors of this document are Rae Ellen James, Deputy Associate Solicitor; Richard Seid, Counsel for Administrative Litigation and Legal Advice; and Michael Denney, Counsel for Enforcement, Black Lung Benefits Division, Office of the Solicitor, U.S. Department of Labor. Personnel from the Division of Coal Mine Workers' Compensation, Office of Workers' Compensation Programs, Employment Standards Administration, U.S. Department of Labor, assisted in the preparation of the document.
The Office of Information and Regulatory Affairs of the Office of Management and Budget has determined that the Department's proposed rule represents a “significant regulatory action” under section 3(f)(4) of Executive Order 12866 and has reviewed the rule.
For purposes of the Unfunded Mandates Reform Act of 1995, this rule does not include any federal mandate that may result in increased expenditures by State, local and tribal governments, or increased expenditures by the private sector of more than $100 million in any one year.
The Department has reviewed this rule in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have “federalism implications.” The rule does not have “substantial effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”
The changes establish no new record keeping requirements. Moreover, they reduce the volume of medical examination and consultants' reports which currently are created solely for litigation by limiting the amount of such medical evidence which will be admissible in black lung proceedings.
The Regulatory Flexibility Act (“RFA”) was enacted by Congress in 1980 “to encourage administrative agencies to consider the potential impact of nascent federal regulations on small businesses.”
It is the purpose of this Act to establish as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.
The RFA outlines in some detail the analysis required for compliance. Unless the agency certifies that the rule will not have “a significant economic impact on a substantial number of small entities,” 5 U.S.C. 605, each agency that publishes a notice of proposed rulemaking must prepare an “initial regulatory flexibility analysis” describing the impact of the proposed rule on small entities. 5 U.S.C. 603(a). That analysis, or a summary of the analysis, must be published in the
In its initial notice of proposed rulemaking, the Department certified that the proposed revisions would not have a significant effect on a substantial number of small businesses. 62 FR 3371-73 (Jan. 22, 1997). The Department's certification was criticized by both the coal mining industry and the Small Business Administration's Office of Advocacy. Industry argued that the Department had grossly underestimated the effect of the proposed rule. The Office of Advocacy observed that the Department had not used the size standards established by the Small Business Administration, and that the Department did not provide a factual basis for its certification. In particular, the Office of Advocacy took issue with the Department's interpretation of the term “significant economic impact.”
In light of the comments the Department received in response to the first notice of proposed rulemaking, the Department included in its second notice of proposed rulemaking an initial regulatory flexibility analysis. That analysis included each of the components identified by the RFA: (1) A statement of the reasons for issuing the proposed rule; (2) a statement of the objectives of, and legal basis for, the proposed rule; (3) a description and, where feasible, an estimate of the number of small businesses to which the rule would apply; (4) a description of projected reporting, recordkeeping, and other compliance requirements of the proposed rule; and (5) an identification of any rules that would overlap, duplicate, or conflict with the proposed rule. 5 U.S.C. 603(b). Finally, as is also required by the RFA, the analysis contained a description of alternatives to the rule. 5 U.S.C. 603(c). 64 FR 55006-09 (Oct. 8, 1999).
The Regulatory Flexibility Act “plainly does not require economic analysis.”
The RFA also requires that agencies assure that small businesses have an opportunity to participate in the rulemaking “through the reasonable use of techniques such as—* * * 3) the direct notification of interested small entities; * * *” 5 U.S.C. 609(a)(3). Accordingly, the Department mailed a copy of its second notice of proposed rulemaking, including its initial regulatory flexibility analysis, to each coal mine operator identified in a database maintained by the Mine Safety and Health Administration. In addition, the Department made a copy of its economic analysis available to any interested party that requested it and posted it on the Internet. 64 FR 55008 (Oct. 8, 1999). Finally, because the Department did not complete its mailing of the proposal until November 5, 1999, it extended the comment period through January 6, 2000 to ensure that each small business was given no less than 60 days to submit comments, the length of the original comment period in the second notice of proposed rulemaking. 64 FR 62997 (Nov. 18, 1999).
Finally, the Regulatory Flexibility Act requires that when an agency promulgates a final rule after having been required to publish a notice of proposed rulemaking, the agency must prepare a final regulatory flexibility analysis. That analysis must contain:
(1) a succinct statement of the need for, and objectives of, the rule;
(2) a summary of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a summary of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments;
(3) a description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available;
(4) a description of the projected reporting, recordkeeping and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and
(5) a description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.
The Department discussed its need to revise the black lung regulations in its initial regulatory flexibility analysis. 64 FR 55006-07 (Oct. 8, 1999). In that analysis, the Department observed that the revisions satisfied a number of different objectives. First, many of the revisions simply updated the regulations implementing the Black
The black lung program regulations were in need of significant revision to make them current. The Department last made substantive revisions to certain regulations in 1983,
In addition, over the last two decades, many of the regulations in Parts 718 and 725 have been interpreted by both the Benefits Review Board and the federal appellate courts. The Department strongly believes that, where these interpretations represent a consensus of opinion as to the meaning and correct application of particular regulations, that consensus should be embodied in the Department's regulations. One commenter correctly observes that none of these courts specifically ordered the Department to revise its regulations. The Department believes, however, that the interests of all parties to the adjudication of a claim—coal mine operators and their insurers as well as claimants—will be better served if a judicial consensus is reflected in the explicit language of the Department's regulations. Incorporating such a consensus will allow both the parties and the adjudication officer to use a current version of the regulation that does not require constant recourse to databases of federal case law. Moreover, the black lung program serves a population of applicants—individuals who spent their working lives in the Nation's coal mines—who cannot be expected to be aware of all of the judicial decisions bearing on their eligibility for benefits, and who thus cannot be expected to bring them to the attention of the administrative law judges who conduct formal hearings on applications for benefits under the Act.
For example, the substantive criteria governing a claimant's eligibility for benefits, set forth in Part 718, have been the subject of numerous appellate decisions. The Department's preamble discussion of § 718.201 contains citations to a considerable body of case law recognizing that pneumoconiosis, as defined by the Act and the Department's regulations, includes obstructive lung disease arising from coal mine dust exposure. Similarly, the preamble discussion of § 725.309 references those decisions noting that pneumoconiosis is a latent, progressive disease.
The Department also believes that, where the Board or the appellate courts have identified issues which the regulations do not adequately address, regulatory action is appropriate to correct that omission. Thus, section 725.495 addresses a problem observed by the Fourth Circuit Court of Appeals in
Finally, in order to update its regulations, the Department also needed to revise certain provisions in light of its experience administering the program for over 25 years. This experience had demonstrated that the regulations did not adequately address certain issues. For example, the former regulations provided little guidance as to when a claimant could reasonably expect the payment of monthly and retroactive
In addition to making its regulations current, the Department intended to revise its regulations to streamline the adjudication of claims under the Act. 62 FR 3338 (Jan. 22, 1997). The Department felt this need was critical and hoped to ensure that the resulting process for determining a claimant's eligibility was both simple and equitable. For example, the Department had been widely criticized for delays in the adjudication process. In response, the Department has made considerable changes in the initial processing of claims. The Department's revisions begin with the manner in which each miner who files an application for benefits is afforded a complete pulmonary evaluation,
The comments in response to the Department's initial regulatory flexibility analysis fall into three categories: (1) Those comments urging the Department not to promulgate regulations having any adverse economic effect on the coal mining industry, or on one or more segments of that industry; (2) comments contending that the assumptions underlying the economic analysis on which the Department's initial regulatory flexibility analysis was based were flawed, and that the analysis thus underestimates the effect on small businesses subject to regulation by the rule; and (3) comments suggesting regulatory alternatives that the Department allegedly failed to consider in its initial regulatory flexibility analysis. The Department discusses those comments suggesting regulatory alternatives below, in the section entitled “Description of Steps the Agency has taken to Minimize the Impact on Small Entities Consistent with the Stated Objectives of Applicable Statutes.” The Department responds to comments in the first two categories in this section.
Several commenters argue that, in light of the costs identified by the Department in its initial regulatory flexibility analysis, the Department should not promulgate any revised regulations. The Department disagrees. The regulations implementing the Black Lung Benefits Act are badly in need of revision to reflect more than two decades of judicial interpretation and administrative experience. In addition, the Department believes that the process used to determine a claimant's eligibility for benefits, and an operator's liability for those benefits, needs to be made faster, fairer, and more credible. No parties have benefitted from the delays that the courts of appeals have identified in the program,
One comment suggests that “a reasonable interpretation of the Department's own economic analysis leads to the inescapable conclusion that the proposed rule will have a significant economic impact on a substantial number of small entities.” Rulemaking Record, Exhibit 89-37, p. 24. The Department does not disagree. 64 FR 55008 (Oct. 8, 1999). The Department recognized that the rule will have an economic impact on the coal mining industry, and in particular on underground bituminous coal mine operators that employ less than 20 people. It is for this reason that in its second notice of proposed rulemaking, the Department prepared an initial regulatory flexibility analysis in lieu of its prior certification that the proposed rule would not have a significant economic impact on a substantial number of small entities. 64 FR 55006 (Oct. 8, 1999). The existence of an economic impact, however, does not mean that the Department is foreclosed from promulgating its rule. In
The intent of the RFA is not to limit regulations having adverse economic impacts on small entities, rather the intent is to have the agency focus special attention on the impacts its proposed actions would have on small entities, to disclose to the public which alternatives it considered to lessen adverse impacts, to require the agency to consider public comments on impacts and
The economic analysis performed in connection with the Department's initial regulatory flexibility analysis described the costs that the rule would impose on the coal mining industry. That analysis was based on a number of conservative assumptions that were designed to establish a cost ceiling,
In addition to being more labor intensive, very small underground mines also incur the higher insurance premiums associated with underground coal mining. Data contained in comments received by the Department indicate that surface bituminous coal mine insurance rates average $1.57, only 59 percent of the average underground mine insurance rate of $2.64. Similarly, surface mine rates average only 53 percent of underground rates for eastern bituminous mines; and 37 percent of underground rates for a four-state average of Pennsylvania, Kentucky, Virginia, and West Virginia. For anthracite coal, surface mine insurance rates are only 44 percent of underground mine insurance rates. Rulemaking Record, Exhibit 89-37, Appendix A, Table 4. Any increase in insurance rates, then, assuming that all other things are equal, will affect the price per ton of underground coal twice as much as it will the price of coal extracted from surface mines. This distinction renders very small underground coal mines potentially vulnerable to closures in a way that very small surface coal mines are not. Because the insurance rates for surface anthracite mines are also high, very small anthracite strip mines may also be potentially vulnerable to closure.
Additional data provided by commenters, as well as data that has become available from the Department of Energy since publication of the Department's initial regulatory flexibility analysis, allow the Department to forecast the number of potential mine closures in somewhat greater detail. This analysis confirms the Department's preliminary conclusion that, although the regulations will have a significant impact on some mines, the impact on the mining industry as a whole will not be substantial. The Department's additional analysis therefore provides no basis to reconsider the decision to promulgate final regulations.
Mine Safety and Health Administration data are useful in establishing the number of mines that are potentially at risk of closure. The Department emphasizes, however, that this data addresses only the mines that are potentially at risk of closure because of the Department's rulemaking. The actual effects of the rule can be determined only by establishing the “base case” of mines that could be expected to close even if the Department does not promulgate its final rule. In 1998, 1,609 mines produced bituminous coal. An additional 743 bituminous mines are listed in the MSHA data but produced no coal during 1998. Of the 1,609 producing mines, 791 were underground mines, and 263 of the underground mines had fewer than 20 employees. Of these 263 mines, 37 produced over 100,000 short tons of coal in 1998. Because mines with fewer than 20 employees that produced over 100,000 short tons have high labor productivity, the Department does not believe that they will be significantly impacted by a rule whose primary effects are felt through increased insurance premiums that are based on labor costs. Subtracting these 37 mines from the 263 very small underground mines leaves 226 mines. The mines are located in Kentucky (81 mines), West Virginia (71 mines), Virginia (52 mines), Pennsylvania (14 mines), Tennessee (5 mines), and Alabama (3 mines). These mines are extremely small, employing a total of only 2,586 people. Median 1998 employment per mine was 11; mean employment was 11.4. Median production was 25,957 short tons of coal; mean production was 34,273 short tons.
The Department's previous economic analysis demonstrated that very small underground mines with first quartile accounting profits (the one-quarter of these mines with lowest profits) might be forced to close as a result of the rule, but that mines with median accounting profits were not in such jeopardy. For purposes of estimating the potential number of mine closures, however, the Department will assume that as many as three-eighths of these mines (the half-way point between .25, representing the first quartile, and .5, representing the second) are at risk. Multiplying this figure (.375) by the total number of very small underground bituminous mines (226) yields a total of 85 mines. According to MSHA data, these 85 underground bituminous mines represent 5.3 percent of all producing bituminous coal mines, employed 1.3 percent of the miners engaged in bituminous coal mine employment, and accounted for 0.3 percent of bituminous coal production.
MSHA data indicate that 117 mines produced anthracite in 1998. An additional 87 anthracite mines are listed in the MSHA data but produced no coal during 1998. Of the 117 producing mines, 60 were strip mines, 39 were underground mines, and 18 were culm bank/refuse pile operations. Of the 117 mines, 12 (10 strip mines, 1 underground mine, and 1 culm bank operation) had 20 or more employees, and only 3 had more than 50 employees. An additional 6 mines (3 strip mines and 3 culm bank operations) produced over 100,000 short tons in 1998. Culm bank operations and mines with 20 or more employees or over 100,000 tons output do not appear to be at risk of closure. Culm banks are discussed in detail below in response to a comment regarding the Department's assumptions about price elasticity. Thus, the population of very small anthracite mines consists of 85 mines. This total includes 47 strip mines (60 total strip mines minus 10 strip mines with 20 or more employees minus 3 strip mines that produced more than 100,000 short tons of coal in 1998) and 38
Profit data for anthracite mines are not available. It appears reasonable to assume, however, that very small anthracite strip mines will be potentially subject to closure because their insurance premiums are high, and that very small underground anthracite mines will be even more heavily impacted. The Department will therefore assume that three-eighths of very small anthracite strip mines (the same figure used for bituminous mines) and five-eighths of very small anthracite underground mines (a higher figure to take into account the possibility of a heavier impact on these mines) are potentially in jeopardy of closure because of costs of the rule. Thus, an estimated 42 very small anthracite mines (18 strip mines (.375 times 47 mines) and 24 underground mines (.625 times 38 mines)) are potentially in jeopardy of closing as a result of the rule.
The next step in forecasting the number of mines that may close as a result of the rule is establishing the “base case,”
The current and predicted decline in the number of small coal mines is the result of a variety of market factors. They include electricity deregulation, reduction in coal reserves, the use of on-time delivery by coal company customers, equipment upgrades, increased use of low sulfate coals, and the reduction in the number of small mining firms due to industry consolidation over the last two decades. All of these factors put very small coal mines, particularly underground mines, in an increasingly disadvantageous competitive position. Because of their size, very small coal mines have difficulty increasing productivity. They lack the physical scale to take advantage of new, high-productivity equipment, most of which is very large, or to adopt more productive techniques, such as continuous miner operations or longwall mining. Restricted space, of course, is a greater constraint in underground coal mines than surface mines.
Many very small coal mines are also characterized by unfavorable geological conditions. These may include thin coal veins, splitting coal beds, fractures or offsets due to faulting, interruptions in coal deposits or coal quality due to sandstone-or clay-filled channels, and unstable roof rock. Such geologic conditions may well be the reason the mine is small to begin with. They also make it costly to extract coal and difficult to improve productivity. Mines with such geological problems are therefore especially vulnerable to price competition. The economic suitability of coal beds for mining is reflected in changes in committed active reserves as the price of coal changes. Culling reserves to eliminate hard-to-mine reserves, or “high-grading” of reserve blocks, is a logical adaptation to low coal prices. From 1991 to 1996, as coal prices fell, the reserves of small mines (annual production of 10,000 to 100,000 short tons) fell by 61.6 percent, compared with a 12.9 percent decline for the coal mining industry as a whole. U.S. Department of Energy, Energy Information Administration, “The U.S. Coal Industry in the 1990's: Low Prices and Record Production,” (October, 1999) p. 6 (hereafter, “U.S. Coal Industry”).
In addition, the shift in demand to low-sulfur western coal, which has occurred in response to the Clean Air Act Amendments of 1990 and the resulting regulations of the Environmental Protection Agency, puts very small coal mines at a severe disadvantage. Very small coal mines are concentrated in areas where coal has a relatively high sulfur content. Low-sulfur coal is found predominantly in the west, particularly in the Powder River Basin. The large strip mines that produce low sulfur coal have easy geology (thin overburden and thick coal beds), and their large scale results in labor productivity approximately three times as high as that of eastern mines. This productivity differential continues to grow. Moreover, recent investments in track by western railroads are further lowering the power-plant price of Powder River Basin coal.
Finally, many very small coal mines have management that may not be well equipped with tools such as computers. Such mines are in a poor position to adapt to practices such as on-time delivery or to utilize other risk management techniques that utility deregulation is making increasingly important in coal mine operation. Independent very small coal mines are also, by virtue of their size, in a relatively poor position to participate in strategic inter-fuel alliances, an increasingly common result of utility deregulation.
Because of all of these market factors, the outlook for independent very small mines is extremely bleak. The Department's preliminary economic analysis, in fact, was based on the observation that the base case already includes extensive closures of very small mines. Over the last 15 or 20 years, the market forces discussed above have eliminated a large majority of very small mines. Data collected by the Energy Information Administration (EIA) indicate that in the 11 years between 1986 and 1997 the number of coal mines with annual production of less than 10,000 short tons decreased from 1,069 to 281 (a total of 74 percent), while production of mines of this size decreased from 4.4 million short tons to 1.2 million tons, or by 73 percent. In the same period, the number of coal mines with annual production of 10,000 to 100,000 short tons decreased from 1,956 to 638 (a 67 percent decrease), while production of mines of this size decreased from 82.8 million short tons to 27.8 million short tons, or by 66 percent. EIA, U.S. Coal Industry, p. 3, Table 1.
To estimate both baseline closures and closures that may be considered impacts of the rule, two regression models were created using EIA data for 1986 through 1998. Both used the log of the number of underground bituminous coal mines with production in the range of 10,000 to 99,999 short tons. Both models used the log of the national price of coal as an independent variable, and one also included time as an independent variable. Both models had high statistical significance by any measure. Using EIA projections of coal price changes (
The log-log model with no time variable predicted a baseline decrease in underground bituminous mines of 32 percent from the year 1998 to the year 2005 and a baseline decrease in underground bituminous mines of 61 percent from 1998 to 2015. Of the 85 bituminous mines identified as in jeopardy of closure, therefore, this model forecast that 27 would close by 2005 and 52 would close by 2015, even without the costs of the rule. When costs of the rule for the very small class of mines was added, the predicted decreases in the number of mines were 39 percent (or 33 mines) between 1998 and 2005 and 66 percent (or 56 mines) between 1998 and 2015. Thus the model predicts that the costs of the rule would result in the additional closure of 6 mines (33 mines minus 27 mines) as of 2005 but only 4 more mine closures (56 mines minus 52 mines) than the baseline as of 2015.
The model with a time variable predicted much sharper baseline decreases in the number of mines (43 percent decrease by 2005 and 86 percent by 2015) and impacts of the rule of about 0.4 mine closures by both years. It should also be noted that, because complete data were not available, neither model included mines producing less than 10,000 short tons, which have been closing at a faster rate than the mines that were included in the model. Thus, use of results from the model without a time variable represents a conservatively low choice of estimate of baseline closures.
A similar procedure was used for anthracite mines, with some modifications. Separate models were estimated for underground mines and strip mines, but total mines were used for the dependent variable. The log-log form without a time variable is reported. For the 24 at-risk underground anthracite mines, the model forecasts a base-case decrease in the number of mines of 21 percent as of 2005 (5 mines) and 43 percent as of 2015 (10 mines). Considering the additional costs imposed by the rule, the forecasts were decreases of 29 percent as of 2005 (1.92 additional mines) and 48 percent as of 2015 (1.2 additional mines). For the 18 at-risk surface anthracite mines, the model forecasts a base-case decrease in the number of mines of 8 percent as of 2005 (1 mine) and 20 percent as of 2015 (4 mines). Considering the additional costs imposed by the rule, the forecasts were decreases of 10 percent as of 2005 (.36 additional mines) and 21 percent as of 2015 (.18 additional mines).
The Regulatory Flexibility Act does not require the Department to extrapolate its projection of the cost of its rulemaking activity in order to determine the rule's collateral effects,
The Department projected the number of incremental closures of anthracite mines due to the rule (rather than the base case) to be 2.28 mines as of 2005 and 1.38 mines as of 2015. Under this projection, the estimated maximum employment loss related to closures would be 10 jobs as of 2005 and 7 jobs as of 2015. This projected job loss assumes that no additional jobs are created elsewhere in the anthracite industry. Estimated production loss related to closures would be 14,564 short tons of bituminous coal annually as of 2005 and 11,058 short tons as of 2015. Since the mines which may close presumably have relatively low productivity, the overall effect would be to raise industry productivity. Closure of 1 or 2 mines is not expected to have a meaningful impact on the competitive structure of the industry.
It is also possible to assess the impact of the rule on mining communities using the counties in which such operations are located. Very small underground bituminous coal mines are found in 46 counties. If closures are randomly distributed, 22 of these counties have less than a 5 percent chance of any mine closure, 13 more have less than a 20 percent chance, 5 more have less than a 30 percent chance, and 3 more have less than a 50 percent chance of any mine closing. Thus, each of the possibly affected counties can expect to lose no more than 6 jobs and have very little chance of losing more than a dozen. Nearly half (42 percent) of very small underground bituminous coal mines are located in three counties (in three separate states). Of these counties, one can be expected (as of 2005) to have one mine closure, and the other two less than one mine closure each. A majority (65 percent) of anthracite underground and strip mines are located in one Pennsylvania county. This county can expect one mine closure as a result of the rule, and the other six counties with anthracite mines can expect one closure of a very small mine among them. Closure of one very small anthracite mine would have an impact of approximately 5 jobs. Overall, then, only two counties are likely to experience community impacts as great as one very small mine closing in any given year, and in neither of those counties is the impact likely to be greater than two very small mines closing.
The nature of the rule also makes it quite unlikely that there will be significant impacts on coal mine employment or output beyond those instances where mines close. The regulation has no direct effect on mining operations. The principal effect of the rule will be a very small increase in the cost of labor. This increased cost provides an incentive to substitute capital for labor, and to increase labor productivity and production generally to provide a broader base over which to spread the costs. This substitution, like any other measure designed to increase labor productivity, will enhance rather than restrict improvements in productivity. The Department's analysis already demonstrates a strong trend of increasing productivity in the coal mining industry, and any impacts of the rule will simply reinforce this trend.
In addition, recent history and available forecasts indicate that the use of coal in generating electricity will continue to increase. Any price pass-through will be small because the costs of the rule are (for the industry as a whole) not significant. There is no other plausible mechanism (except for closure of mines) by which the rule could induce reductions in production. Enhancement of productivity, for which there are incentives, will tend to increase production. Thus, aside from mine closures, the rule will not have adverse impacts on coal production.
Finally, there is a slight possibility that the rule may result in a decreased workforce in mines that continue to operate. The principal mechanism for such an impact is the incentive to
The Department's initial regulatory flexibility analysis, as supplemented by the additional study undertaken in the final regulatory flexibility analysis, demonstrates that the Department's final rule is being promulgated following examination of the potential effects of the rule on small coal mine operators. The Regulatory Flexibility Act does not dictate substantive results, or prevent the Department from acting in such a case.
The Department also received comments on its economic analysis. In its initial regulatory flexibility analysis, the Department specifically invited comment on the assumptions used in developing its economic analysis, including the relationship between increases in the claims approval rate and increases in insurance premiums; the relationship between increased medical costs and increases in insurance premiums; and the extent to which promulgation of these revisions will result in an increase in the number of claims filed. 64 FR 55008 (Oct. 8, 1999). One of the comments received by the Department, whose conclusions were endorsed by a number of other commenters, contained an economic analysis by Milliman & Robertson, Inc. (M&R). Rulemaking Record, Exhibit 89-37, Appendix A.
As an initial matter, the M&R analysis criticizes the assumption in the Department's economic analysis that the approval rate for claims paid by responsible operators and their insurers under the revised regulations will not exceed the approval rate for claims paid by the Black Lung Disability Trust Fund under the former regulations. The Department's economic analysis had assumed that the overall approval rate for responsible operator claims (currently 7.33 percent) would not exceed 12.18 percent, the overall approval rate for Trust Fund claims. Rulemaking Record, Exhibit 80, p. 38. The M&R analysis states that “DOL has offered no support for this assertion.” M&R at p. 17,
The Department's analysis explicitly stated, however, that “[t]he proposed regulations represent the Department's past and current practice in Trust Fund cases,” and that “several factors make the Trust Fund approval rate substantially higher than the responsible operator approval rate.” Exhibit 80 at p. 38. These factors include the age of applicants whose claims are payable by the Trust Fund and the fact that most of their exposure to coal mine dust predated the 1969 federal dust standards. Thus, the Department believes that the approval rate for Trust Fund cases will remain the same, and that the approval rate for responsible operator cases will rise, but not to the level of Trust Fund approvals. The Department's assumption is based on its more than 15 years' experience in adjudicating claims for black lung benefits under the prior regulations, and its detailed knowledge of the evidentiary showings required for those claims' approval.
The National Mining Association, whose comment incorporates the M&R analysis, suggests that the Department's revised definition of the term “pneumoconiosis” represents a considerable departure from past practice. Specifically, the commenter takes issue with the Department's preliminary economic analysis which refused to assign costs to the amended definition of pneumoconiosis because inclusion of chronic obstructive pulmonary disease arising from coal mine employment as pneumoconiosis simply clarified the regulation and made it consistent with past practice. Rulemaking Record, Exhibit 89-37 at 29; Rulemaking Record, Exhibit 80 at 29. In the preamble to § 718.201, the Department has cited 14 decisions from six federal appellate courts with jurisdiction over the vast majority of claims filed under the Act (the Third, Fourth, Sixth, Seventh, Eighth, and Eleventh Circuits). These courts recognize that pneumoconiosis, as it is defined in the Act and was defined in the prior regulations, includes obstructive lung disease arising from coal mine dust exposure. Similarly, in the preamble to § 725.309, the Department has cited 44 decisions from seven federal appellate courts (the six listed above plus the Tenth Circuit). These courts recognize the progressive, latent nature of pneumoconiosis. All of these decisions reflect longstanding positions of the Department. Because of these positions, the Department has not attempted to deny claims because the miner's disabling lung disease was obstructive in nature, provided that condition was shown to have arisen out of coal mine employment, or because the miner's condition was alleged to have progressed. The Department, therefore, does not expect that any additional Trust Fund claims will be approved as a result of the revised definition of pneumoconiosis. Similarly, there is simply no reason to believe that the revised definition of pneumoconiosis will result in a higher approval rate in responsible operator claims than in Trust Fund claims.
The same commenter states that the limitation on documentary medical evidence tilts the playing field toward claimants by allowing a claimant three examinations (his choice of an approved physician to conduct the complete pulmonary evaluation plus two more) as opposed to the operator's two examinations. The commenter argues that this evidentiary imbalance will increase the number of approved claims payable by responsible operators. Rulemaking Record, Exhibit 89-37, p. 29. Again, however, the Department's Trust Fund experience forms a reasonable upper bound of the approval rate expected under the revised regulations. That experience demonstrates that the Department seldom develops more than two medical reports in any individual claim for which the Trust Fund is liable. In addition, claimants under the former regulations had the ability to choose
Finally, the commenter argues that the provision requiring that “controlling weight” be given to the opinion of a treating physician will result in “numerous” claims being approved that previously would have been denied. The Department does not accept this assessment. The revisions to § 718.104 require only that an adjudication officer evaluate certain criteria to determine whether a treating physician may have developed an in-depth knowledge of the miner's pulmonary condition. As the Department has repeatedly emphasized, the regulation does not require that the adjudication officer credit the opinion of the treating physician where there is contrary evidence in the record. To the contrary, the rule is designed to force a careful and thorough assessment of the treatment relationship. 64 FR 54976-77 (Oct. 8, 1999);
The M&R analysis also arrives at a higher overall approval rate for Trust Fund claims (20 percent rather than 12.18 percent) by analyzing Trust Fund claims involving only post-1981 coal mine employment and by eliminating claims filed by individuals with less than 10 years of coal mine employment. M&R at p. 17 n. 41. The Department does not agree that manipulating the data in this fashion produces a more accurate result. First, responsible operators are also liable for claims involving pre-1982 coal mine employment, so it is appropriate to include that group. Second, exclusion of all claims based on less than 10 years of coal mine employment clearly will not create a true picture of the overall claims experience. A number of miners who are employed in the mines for less than 10 years ultimately are determined to be eligible for benefits. Although the M&R analysis includes claims filed by such miners in determining the number of approved claims, Transcript,
The M&R analysis also exaggerates the effect of the Department's rule on insurance rates. M&R criticizes the Department because its analysis “fails to test the current federal black lung insurance rates being charged to determine if they are a reasonable base from which to project future cost changes * * *.” M&R at p. 2. M&R suggests, for example, that the rate in Kentucky is “too low,” M&R at p. 7, and concludes that the corrected rate for underground bituminous mines, when combined with the effects of the Department's regulatory revision, will increase premiums by at least 1,075 percent. M&R at p. 8, Table 6. The impact of the Department's regulatory revision, however, does not include the correction of inadequate rates; such correction must be factored in independently, not assigned as a cost of the regulations. Moreover, M&R states that the premiums in the three other large Eastern coal states (Pennsylvania, Virginia, and West Virginia) are “redundant” (and rates are “generally redundant in the other 23 coal mining states), suggesting that insurance companies (or in West Virginia's case, its state-administered fund) are making excess profits from these markets. M&R at p. 7. In this case, correcting redundant rates should not be assigned as a benefit of the revisions. In addition, the insurance rates used by M&R, M&R at p. 6, Table 4, whose source is not identified, are generally lower than the rates used by the Department by about one percentage point (
The Department also requested comment on a possible increase in the number of claims filed as a result of this regulatory revision. The Department's economic analysis was based on the assumption that, although the revisions will not produce a significantly greater number of approved claims, expectations created by the mere issuance of regulatory revisions will cause a temporary increase in the number of claims filed, an additional 3,440 responsible operator claims over a two-year period. Rulemaking Record, Exhibit 80, pp. 39, 42. The M&R analysis did not specifically address this assumption. Instead, the M&R analysis is simply based on its own, wholly different assumption regarding the number of claims that are likely to be filed once the revised regulations take effect. M&R posits that “the application of the reproposed regulations to the large number of denied claims from all past years will in effect rewrite the history of approvals.” M&R, p. 21. M&R uses an actuarial model to estimate the “number of ultimate claim filings that are likely to be received” under the former regulations and under the newly revised regulations. M&R, p. 21. From the data provided in Table 12 of the M&R analysis, it appears that M&R estimates that 2,567 additional claims will be filed by miners whose last coal mine employment was during the years 1982 to 1999. However, the Department was unable to determine what assumptions M&R made to generate this estimate. In any case, M&R's estimate cannot be compared with the
The Department also received comments disputing its assumption that coal mine operators could pass on to coal consumers by price increases the increased costs caused by the Department's rule. Rulemaking Record, Exhibit 80, p. 52. The Department agrees that it is difficult to determine with precision the ability of small coal mine operators to pass on costs to coal consumers. Indeed, the Department acknowledged in its initial economic analysis that some small coal mine operators would be unable to pass on these costs, and that this inability might represent the difference between being able to continue mining operations and suspending them. Interpreting current profit rates that are unsustainably low or negative, however, must be done carefully, because there are two distinct types of firms that may have such profit rates at any one point in time. Some firms may have such rates for a short time, because of industry cycles or the firm's unique circumstances. These firms will rebound and may or may not experience significant impacts from a regulation. Other firms will have negative profits because they are already in the process of failing.
These two cases have very different implications in the analysis of the economic impact of the Department's revisions. If a firm is in the process of failing in any event, the impact of the revised regulations will be small or non-existent. At most, the impact will hasten the firm's failure by a short period of time. Neither the failure itself, however, nor any loss of jobs, should be considered an impact of the regulations. If a firm is about to rebound, the situation is considerably more complicated. The issue is whether the firm will rebound to the level that it can absorb the economic impact. It is perfectly correct in such cases to say, as one commenter points out, that “additional costs imposed by regulations are certainly relevant since the added cost of regulations will make it that much more difficult for the firm to achieve profitability.” Rulemaking Record, Exhibit 89-37, p. 33. The problem is that it is extremely difficult to predict from a negative profit rate how far a firm may rebound. One reasonable assumption (given the very limited data) is that a rebounding firm will achieve median profits. If that is the case, then, as the Department's initial analysis indicated, the firm will not fail even given the economic impact of the regulations. See Rulemaking Record, Exhibit 80, Exhibit P.
The Department's analysis, moreover, is based on the assumption that coal mine operators (other than culm-bank operations, discussed below) will be unable to pass through any of the costs associated with the Department's rule. That assumption is based on a worst-case scenario for analytical purposes, and it does not necessarily reflect the current state of the energy industry. Although the recent deregulation of electric utilities has led to considerable reorganization, the use of coal is both extensive and increasing. In general, electric utilities currently are taking advantage of the opportunities presented by deregulation to deal with expanding demand by management, rather than by making major investments in new generating capacity. In this environment, natural gas and oil are attractive, in part, because they are used to meet on-peak demand for electricity. As a result, most generation capacity, now in use and currently planned, is gas-fired. The relatively low capital cost of gas- or oil-fired generation capacity (despite the relatively high fuel cost) makes these fuels cost-effective for the low capacity utilization associated with on-peak power production. Coal, however, is the mainstay of off-peak, baseline electricity generation. The different use pattern is reflected by different capacity utilization rates. In 1996, for example, capacity utilization was 63 percent for coal-fired power plants but only 20 percent for natural gas power plants and 11 percent for oil-fired plants. (EIA, “Challenges,” Chapter 1, p. I-4). In baseline power generation, coal faces less competitive pressure and more opportunities for investment in new capacity. Run-of-stream hydroelectric power is limited, as is the potential for its expansion. Nuclear generation capacity is declining because old plants are coming off line, and no new ones are being built. As a consequence, utilities are burning more coal—not less—and this trend is expected to continue.
It is certainly true that long-term high-price contracts for coal are giving way to shorter term contracts with more flexibility. Yet even here there are mitigating factors. Only about half of current contracts will expire by 2005. The impetus for the shift away from long-term contracts was stimulated by stabilization of other fuel prices at moderate levels, but quite recently oil prices have shot up again. The point is that the current market still offers considerable opportunities for passing costs to consumers.
Available information indicates that most of the downward pressure on coal prices is flowing from developments within the coal industry and intra-industry competition. Coal producers as a whole have increased their productivity and lowered their costs. Cost reduction has resulted from improved management of mining operations and delivery, introduction of new technology (
Rapidly increasing productivity, however, does not preclude the coal industry as a whole from increasing its prices in the short run to recoup regulatory compliance costs. These costs are small. Based on West Virginia insurance rates, the increase in insurance rates would translate into a one-time increase in labor costs of 1.2 percent a year. By contrast, labor productivity (tons per miner hour) increased by an average of 6.9 percent each year from 1980 to 1996 (EIA, “Challenges,” Chapter 1, p. I-12). This annual productivity increase—five or six times as large as the estimated impact of the regulation—would allow the coal industry to pass through costs of the rule without raising prices at all. Only a small one-time diminution in the reduction of the price of coal would be needed.
It is true that small mines cannot increase prices beyond those of larger counterparts and stay competitive. The analysis of relative impacts indicates that very small, underground coal mines may be able to pass through one quarter to one half of their costs of the rule to consumers under the cover of larger mines passing all of their costs of the rule through to consumers. The Department's preliminary economic analysis treated pass-through of costs of the rule essentially as a factor that could mitigate to some extent—not prevent—
The market for anthracite coal is significantly more sheltered from price competition than the market for bituminous coal. Since 1996, a majority of anthracite production has been accounted for by culm bank operations. These operations salvage previously-mined anthracite from old mine tailings on the surface. The market for these operations (and potentially for other anthracite mines) is nearby power plants. Most of these plants are cogeneration plants, which produce heat or steam for industrial use as their principal output, and then generate electric power as a byproduct. Some, however, are small power plants built solely to use anthracite from culm banks. The Public Utility Regulatory Policies Act of 1978, Pub. L. 95-617, 92 Stat. 3117(1978), requires electric utilities to purchase electric energy from cogeneration facilities and other qualifying small power production facilities. The Act goes on to stipulate that the price at which utilities purchase electric energy may not exceed “the incremental cost to the electric utility of alternative electric energy.” 16 U.S.C. 824a-3(b). Since most of the electricity generated with the anthracite is a byproduct of steam and heat produced for other purposes and the capacity is already installed, the incremental cost of power to utilities is virtually certain to provide sufficient revenue to make these anthracite operations economically viable, despite the costs of the rule. If anything, anthracite from culm banks is likely to become more competitive as the prices of other fuels used to generate electricity rise. Indeed, anthracite culm banks are the only part of the coal mining industry in which both the number of very small operations and the number of employees have expanded substantially over the last 10 to 15 years.
The broader market for anthracite includes metallurgical uses and other specialty markets. This provides anthracite with a degree of product differentiation that bituminous coal does not have. The economic forces in the anthracite mining industry are significantly different from those in the bituminous coal mining industry. In anthracite, there are no large mines, no high-productivity mines, and generally not the geological conditions that are favorable to large-scale equipment or techniques that would allow increases in productivity. Instead of a steady increase in output, anthracite production (exclusive of culm banks) fell by 19 percent between 1986 and 1997. Together with the rise of anthracite salvage operations, this decline appears to reflect exhaustion of anthracite deposits that can be mined economically, rather than the sort of fierce competition characterized by highly elastic demand.
One comment argues that the Department's initial regulatory flexibility analysis did not properly analyze the effect of its rule on coal mine construction and transportation contractors, as well as on other small businesses performing services at mine sites. The Department acknowledged that its rule would have an effect on entities in the “Coal Mining Services” industry, and estimated that of 275 firms listed in data available from the Small Business Administration, no more than 209 were small businesses within the SBA's definition (less than $5 million in annual receipts). The Department recognized, however, that this number might understate the number of coal mine construction and coal transportation companies. 64 FR 55008 (Oct. 8, 1999).
The RFA does not require, however, that the Department determine precisely the economic effect on small businesses where it is not feasible to do so. Instead, it requires only that the initial regulatory flexibility analysis “describe the impact of the rule on small entities.” 5 U.S.C. 603(a). The Department's initial regulatory flexibility analysis described the impact of its proposed regulations based on an economic analysis. The economic analysis projected an increase in the approval rate of black lung claims payable by responsible operators and a temporary increase in the number of claims filed. To the extent that coal mine contractors obtain insurance to spread the risk of potential liability under the Act, the Department's initial regulatory flexibility analysis of the resulting increase in insurance premiums was also relevant to those entities. In the absence of a more precise estimate of the number of entities involved, however, and the manner in which those entities currently absorb the costs imposed by the Black Lung Benefits Act, the Department's initial regulatory flexibility analysis fulfilled the requirements of the RFA by identifying a potential impact on the coal mine contracting industry.
Thus, the Department does not believe the comments undermine the validity of its initial regulatory flexibility analysis, or of the economic analysis that the Department used in preparing it. Both analyses describe the impact that the revised regulations are likely to have on small coal mine operators, and both analyses acknowledge that this impact may be sufficient to make the mining of coal uneconomical for some. 64 FR 55008-09 (Oct. 8, 1999); Rulemaking Record, Exhibit 80, pp. 44-46, 52. The Department's proposal, and its discussion of possible alternatives intended to mitigate the impact of the proposal on small businesses, were made with full knowledge of the projected economic impact. Accordingly, although the Department has committed to the revision of the Part 722 regulations,
The revised regulations implementing the Black Lung Benefits Act will apply, like the Act itself, to coal mine operators.
Based on 1995 data, the Department determined that of 2,822 establishments in the coal mining industry, 2,811 employed less than 500 people. Of those, 1,581 were surface bituminous mining companies, 1009 were underground bituminous mining companies, and 221 were anthracite mining companies. The Department estimated that no more than 209 of the 275 firms in the coal mining services industry would be considered small businesses. The Department observed, however, that its estimate did not necessarily include all coal mine construction and coal transportation companies, and that the precise number of such businesses could not be estimated with precision. 64 FR 55007-08 (Oct. 8, 1999).
More recent data available from the Mine Safety and Health Administration suggest that the composition of the coal industry has not changed significantly. In 1997, 2,568 of 2,578 establishments in the coal mining industry employed less than 500 people. Of these, 1,441 were surface bituminous mining companies, 913 were underground bituminous mining companies, and 214 were anthracite mining companies. Census figures available from the Small Business Administration do not allow the Department to calculate how many of the 317 firms in the coal mining services industry would be considered small businesses, because those figures do not contain sufficient information on the revenues of those firms.
In its initial regulatory flexibility analysis, the Department observed that its proposed revisions would not impose any additional reporting or recordkeeping requirements on small businesses. The Department stated that the compliance requirements of the rule were largely economic in impact. The Department projected its regulatory revisions would increase the cost of commercial insurance (through increased premiums) purchased by coal mine operators to secure their benefits liability under the Act. The Department also projected an increase in the potential exposure of operators who are authorized to self-insure their liability under the Act. A summary of these additional costs was published in the Department's initial regulatory flexibility analysis. 64 FR 55008-09 (Oct. 8, 1999). In addition, the Department observed that coal mine operators that did not purchase insurance, either because they were self-insured, or because they were not required to secure benefits, or because they had ignored the Act's security requirement, would face additional burdens. These burdens included responding more promptly to notice from the Department that a claim had been filed by one of their former employees, and posting security in the event that they were held liable for the payment of benefits on an individual claim. Operators that had been authorized to self-insure their liability under the Act would be required to maintain security for claims filed against them, even after they ceased mining coal. Finally, the Department observed that the regulatory revisions enhanced its ability to enforce civil money penalties against operators that failed to comply with the Act's security requirements. 64 FR 55008-09 (Oct. 8, 1999).
The regulatory revisions in the Department's final rule do not significantly change the costs identified by the Department's initial regulatory flexibility analysis. Specifically, only one of the changes that the Department has adopted in this final rule in response to public comments has cost implications. The Department has eliminated the notice of initial finding, a document that the Department currently uses to deny claims informally before the district director. Both the first and second notices of proposed rulemaking proposed the continued use of this document. Eliminating issuance of initial findings will decrease operator costs in all cases by reducing the numbers of responses that coal mine operators have to file with the Department. Eliminating this document, however, will also require that coal mine operators undertake the development of responsible operator evidence (evidence showing that another entity that employed the miner should be the responsible operator) in a number of additional cases. Under the Department's second notice of proposed rulemaking, coal mine operators would not have been required to develop responsible operator evidence in cases in which the claimant failed to respond to the Department's notice of initial finding denying their claims. Under the final rule, a coal mine operator may not know whether the claimant is interested in pursuing his claim (unless the claimant withdraws his application under § 725.306) until after that operator has developed its responsible operator evidence.
The Department believes that the costs resulting from this revision will have only a minor impact on its previous estimate of the costs of the rule. As an initial matter, the Department estimates that this revision will affect less than 10 percent of all responsible operator cases. In FY 1999, a total of 5,724 cases were filed. The Department estimates that just over 75 percent of these claims, or 4,293, were claims involving potential responsible operator liability. Ten percent of this number is 429. The Department's economic analysis assumed that an additional 1,720 operator cases will be filed each year for two years following issuance of the Department's final rules. Ten percent of this number is 172. In each of the next two years, then, the revision will cause the additional development of responsible operator evidence in only 601 claims. Under the proposed rule in the Department's second notice, however, operators would also have had to develop such evidence in the 30 percent of such cases that proceed beyond adjudication by the district director. Consequently, the Department's final rule will require additional evidentiary development in only the remaining 70 percent of cases, or 421 cases. The Department has no way of accurately estimating the costs of developing such evidence. However, a rough estimate can be made using information in M&R's first analysis. M&R estimated that the total cost to operators in defending claims that were resolved at the district director level was approximately $3,000. Rulemaking Record, Exhibit 5-160, Appendix 5, p. 24. This figure included not only the development of responsible operator evidence but, under the Department's first proposal (to which M&R was responding), of all medical evidence as well. Although the cost of developing medical evidence is typically much higher than the cost of operator evidence, because it involves payments to expert witnesses, the Department will assume that half of these defense costs represent the cost of developing responsible operator evidence. Accordingly, the total additional costs imposed by this revision are not likely to exceed $631,050 (70 percent of 601 claims times $1,500) in each of the first two years, and will drop to no more
The primary objective of the Black Lung Benefits Act is set forth in § 901 of the Act:
It is, therefore, the purpose of this subchapter to provide benefits, in cooperation with the States, to coal miners who are totally disabled due to pneumoconiosis and to the surviving dependents of miners whose death was due to such disease; and to ensure that in the future adequate benefits are provided to coal miners and their dependents in the event of their death or total disability due to pneumoconiosis.
In its initial regulatory flexibility analysis, the Department observed that these two principles severely constrained its ability to select alternatives that the Department had identified as potentially providing relief for small coal mine operators. The Department discussed several alternatives, including adjusting a miner's entitlement criteria according to the size of the operator that would be considered the responsible operator under the Department's regulations. A second alternative would have limited the liability of certain employers. These employers might include those that met either the SBA definition of a small business (over 90 percent of the industry) or those employers with fewer than 20 employees, companies that the Department's economic analysis had identified as most vulnerable. In such cases, the Department considered imposing liability on larger operators or on the Black Lung Disability Trust Fund. The Department rejected both alternatives, however, as contrary to the intent of Congress as expressed in the Black Lung Benefits Act. 64 FR 55009 (Oct. 8, 1999). The Department did provide relief to small mining companies in its revised regulations governing the assessment of civil money penalties for an operator's failure to secure the payment of benefits, 20 CFR Part 726, Subpart D. These regulations specifically assess a smaller base penalty amount on a smaller employer,
A number of comments suggest that by inviting comments as to other alternatives, the Department abdicated its responsibilities under the Regulatory Flexibility Act. The Department does not agree. Nothing in the RFA requires an agency to forego rulemaking because the regulated community is unhappy with the alternatives that the agency considered in its initial regulatory flexibility analysis, or because that community has proposed additional alternatives. On the contrary, the RFA encourages agencies to notify small businesses of proposed rulemaking activities precisely so that those small businesses may participate in the identification of additional alternatives that might reduce the impact of the rule.
The National Mining Association (NMA), endorsed by a number of other commenters, has identified six alternatives that it believes the Department should have considered: (1) establish a fund to insure coal mine operators for federal black lung claims on a first dollar basis under the authority granted the Department by 30 U.S.C. 943; (2) establish a fund to reinsure coal mine operators for federal black lung claims on a specific or aggregate of loss basis, also under the authority granted the Department by 30 U.S.C. 943; (3) name only the most likely responsible operator; (4) establish criteria to determine when a state black lung program is sufficient to end the federal program in that state; (5) allow settlement of federal black lung claims; and (6) establish cost-containment mechanisms for health care providers. Rulemaking Record, Exhibit 89-37, p. 31. The M&R analysis similarly suggests the first four alternatives, although it would apply the third alternative (naming the most likely operator) only where that operator is a small coal mine operator. In addition, the M&R analysis suggests that the Department establish a formal, ongoing review of state workers' compensation programs to determine whether they are sufficient to permit the Secretary to declare the federal program inapplicable to miners in particular states. Rulemaking Record, Exhibit 89-37, Appendix A, M&R at pp. 17-18. The Department will consider these alternatives in order.
1.
2.
The Department notes, however, the continued objection of a number of commenters to the Department's proposal that operators be forced to participate in a joint defense of the claimant's eligibility,
The Department does not believe that this alternative is a truly significant one—
3.
The Act provides certain criteria states must meet in order to gain Secretarial certification, 30 U.S.C. 921(b)(2)(A)—(E). It also provides that the Secretary may, by regulation, establish additional criteria. 30 U.S.C. 921(b)(2)(F). In its first notice of proposed rulemaking, the Department observed that the applicable regulations, 20 CFR Part 722 (1999), had not been
The NMA and M&R urge the Department to develop specific criteria that would allow a state to determine what steps it needs to take to allow the Secretary to certify its law as providing adequate coverage for occupational pneumoconiosis. M&R states that “[n]o single alternative would be more helpful to small coal operations than to be required to provide compensation under only one mechanism.” M&R at p. 18. This suggestion would require the Department to update the criteria previously set forth in Part 722. Although no state has sought the Secretary's certification since 1973, the Department accepts the commenters' suggestion that a revision of the Part 722 criteria will encourage states to seek the certification permitted by the Act. Publication of a current set of criteria, however, will require considerable study and additional drafting, and would needlessly delay final promulgation of the remaining regulations in the Department's proposal. Following completion of that work, the Department will issue a new notice of proposed rulemaking in order to ensure that interested parties have an opportunity to comment upon possible Secretarial certification criteria. The Department believes that, in the interim, the revised Part 722 will accommodate any state seeking certification.
M&R also suggests that the Department establish a formal and ongoing Departmental review of state laws to determine whether they provide adequate coverage. The Department does not believe that it would be productive to engage in such a review. States that revise their workers' compensation laws to meet the Department's criteria will do so in order to preempt the application of the Black Lung Benefits Act. Those states will have a clear incentive to submit an application to the Department for the appropriate certification. Relying on states to initiate the certification process thus makes the most efficient use of government resources at both the state and federal levels.
4.
The Black Lung Benefits Act incorporates two provisions of the Longshore and Harbor Workers' Compensation Act relevant to settlements, and specifically excludes a third provision. Section 15(b) of the LHWCA, 33 U.S.C. 915(b), renders invalid any “agreement by an employee to waive his right to compensation under this chapter.” Section 16, 33 U.S.C. 916, invalidates any “release * * * of compensation or benefits due or payable under this chapter, except as provided in this chapter.” Together, these provisions, which have been part of the LHWCA since its 1927 enactment, have been interpreted to “prevent[] any private settlement of a claim between the employer and the employee.”
In 1938, Congress amended section 8 of the Longshore Act to specifically provide a settlement procedure in cases in which the injured employee sought compensation for permanent or temporary partial disability.
Congress's decision to exclude the settlement provisions of LHWCA section 8 when it incorporated other LHWCA provisions makes sense. When Congress enacted the Black Lung Benefits Act in 1969, and when it amended the list of excluded sections in 1972, section 8 permitted only the settlement of claims for partial disability. Because benefits under the Black Lung Benefits Act are available only to miners who are totally disabled due to pneumoconiosis, and to the survivors of miners who die from that disease, there was no reason to incorporate section 8. Congress amended section 8 in 1972 to allow settlement of claims for total disability, and again in 1984 to permit the settlement of survivors' claims. Pub. L. 92-576, § 20, 86 Stat. 1264 (1972); Pub. L. 98-426, § 8(f), 98 Stat. 1646 (1984). Congress did not revisit its exclusion of Longshore Act provisions from the Black Lung Benefits Act on either occasion, even though Congress specifically amended the relevant statutory section in the Black Lung Benefits Act, 30 U.S.C. 932(a), in the course of amending the LHWCA in 1984.
The Department thus believes that Congress has expressed its intent not to permit the settlement of claims for black lung benefits. Moreover, the Department believes that this decision is supported by sound policy considerations. The Black Lung Benefits Act is intended to provide benefits (37 and 1/2 percent of the monthly pay for a federal employee in grade GS-2, step 1, augmented for additional dependents) to miners who are totally disabled due to pneumoconiosis and to the survivors of miners who die due to the disease. 30 U.S.C. 922(a). “Providing a minimum level of income for eligible miners disabled by black lung is at the heart of the statute.”
5.
Through the incorporation of LHWCA § 7, the Black Lung Benefits Act requires responsible coal mine operators and the Black Lung Disability Trust Fund to provide medical benefits to miners who meet the Act's eligibility criteria. 33 U.S.C. 907, as incorporated into the Black Lung Benefits Act by 30 U.S.C. 932(a). The Department's regulations require that a miner be provided “such medical, surgical, and other attendance and treatment, nursing and hospital services, medicine and apparatus, and any other medical service or supply, for such periods as the nature of the miner's pneumoconiosis * * * and disability require.” 20 CFR 725.701(b) (1999). In Fiscal Year 1998, the Trust Fund paid approximately $82.1 million for the medical treatment of eligible miners, processing approximately 620,000 bills. OWCP Annual Report to Congress, FY 1998, p. 18.
The Department has already adopted a variety of cost-containment measures to reduce medical treatment costs paid by the Trust Fund. The Department's guidelines for the payment of medication expenses were derived from the system used by the United Mine Workers of America Health and Retirement Funds in light of the similar populations served by the UMWA Funds and the Trust Fund. The Department updates its list of allowable charges for various drugs on a monthly basis and for treatment procedures on a periodic basis to ensure that it does not reimburse miners and their medical providers an amount above what is usual and customary for the beneficiary population. The Medical Director of the Department's Office of Workers' Compensation Programs reviews medications that have not previously been approved for inclusion on the Department's list.
The Department also carefully screens inpatient service bills for both an acceptable diagnosis and an “appropriate” treatment based upon the diagnosis and procedure codes present on the Universal Billing Form. These diagnoses and treatments are compared to a set of algorithms that take into account whether the diagnoses are related to pneumoconiosis, the severity of covered and non-covered conditions, and the character of the procedures. The program then makes a determination as to whether a bill should be paid in full, paid in part, denied in full, or made subject to review by the Department's staff. Bills that are considered payable are subject to a series of edits to determine if specific types of services should be paid, denied, or reviewed before reimbursement. For example, the Department will deny a bill for a private room during a hospitalization in the absence of adequate justification and pay only the cost of a non-private room.
The cost-containment measures adopted by the Department have reduced the Trust Fund's expenditures for medical treatment. Operators and their insurers, organizations with considerable experience in cost-containment, are similarly free to adopt measures that ensure that they pay no more than the usual and customary amounts for necessary services. Under the Secretary's regulations, eligible miners present bills for medical services directly to the responsible operator liable for the payment of their benefits, its insurer, or its claims servicing agent. 20 CFR 725.704(a)(2) (1999). Any dispute between the miner and the operator over payment of the bill is subject to informal resolution by the district director. If that resolution is unsuccessful, either the miner or the operator may obtain an expedited hearing before the Office of Administrative Law Judges. 20 CFR 725.707 (a), (b) (1999). Similarly, an operator may request a hearing with respect to any bill which was paid from the Black Lung Disability Trust Fund while the operator was contesting the miner's eligibility for benefits. “Though framed as contests between the particular Operator and the Fund over reimbursement, these determinations provide the means by which an Operator may challenge the validity of all or part of the miner's initial claim, including each medical expense, even though it has already been paid by the Fund.”
In summary, the Department does not believe that any of the alternatives suggested by the NMA and M&R offer relief to small business that is consistent with the stated objectives of the Black Lung Benefits Act. Although the Department does intend to revise the Part 722 criteria in light of the commenters' suggestion, the failure of any state to seek certification of its laws over the last quarter century indicates that this effort will not result in any quick relief to the small business community from the economic impact of the Department's regulations. With the exception of graduated civil money penalties, the requirements of the Black Lung Benefits Act simply do not permit the Department to adjudicate the issues of claimant eligibility and operator liability differently depending on the size of the coal mine operator that may be liable for the payment of those benefits. Because the Department believes that the “no action” alternative, discussed in detail above, would also be inappropriate, the Department has published a final rule implementing its proposed revisions.
The Department's final rule revising the regulations implementing the Black Lung Benefits Act will result in the increase of premiums paid by the coal mining industry to insure their obligations under the Act. The economic analysis prepared in connection with the Department's initial regulatory flexibility analysis demonstrated that this premium increase would result in additional annual costs to the industry with a point estimate of $57.56 million. The Department's revised rule will not result in any significantly higher costs. In light of the need for the revised regulations identified above, the Department believes that it is appropriate to finalize the rule.
Black lung benefits, Lung disease, Miners, Mines, Workers' compensation, X-rays.
1. The authority citation for part 718 continues to read as follows:
5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 3174, 30 U.S.C. 901
(a) Under title IV of the Federal Coal Mine Health and Safety Act of 1969, as amended by the Black Lung Benefits Act of 1972, the Federal Mine Safety and Health Amendments Act of 1977, the Black Lung Benefits Reform Act of 1977, the Black Lung Benefits Revenue Act of 1977, the Black Lung Benefits Amendments of 1981, and the Black Lung Benefits Revenue Act of 1981, benefits are provided to miners who are totally disabled due to pneumoconiosis and to certain survivors of a miner who died due to or while totally or partially disabled by pneumoconiosis. However, unless the miner was found entitled to benefits as a result of a claim filed prior to January 1, 1982, benefits are payable on survivors' claims filed on or after January 1, 1982, only when the miner's death was due to pneumoconiosis, except where the survivor's entitlement is established pursuant to § 718.306 on a claim filed prior to June 30, 1982. Before the enactment of the Black Lung Benefits Reform Act of 1977, the authority for establishing standards of eligibility for miners and their survivors was placed with the Secretary of Health, Education, and Welfare. These standards were set forth by the Secretary of Health, Education, and Welfare in subpart D of part 410 of this title, and adopted by the Secretary of Labor for application to all claims filed with the Secretary of Labor (see 20 CFR 718.2, contained in the 20 CFR, Part 500 to end, edition, revised as of April 1, 1979.) Amendments made to section 402(f) of the Act by the Black Lung Benefits Reform Act of 1977 authorize the Secretary of Labor to establish criteria for determining total or partial disability or death due to pneumoconiosis to be applied in the processing and adjudication of claims filed under part C of title IV of the Act. Section 402(f) of the Act further authorizes the Secretary of Labor, in consultation with the National Institute for Occupational Safety and Health, to establish criteria for all appropriate medical tests administered in connection with a claim for benefits. Section 413(b) of the Act authorizes the Secretary of Labor to establish criteria for the techniques to be used to take chest roentgenograms (X-rays) in connection with a claim for benefits under the Act.
(b) The Black Lung Benefits Reform Act of 1977 provided that with respect to a claim filed prior to April 1, 1980, or reviewed under section 435 of the Act, the standards to be applied in the adjudication of such claim shall not be more restrictive than the criteria applicable to a claim filed on June 30, 1973, with the Social Security Administration, whether or not the final disposition of the claim occurs after March 31, 1980. All such claims shall be reviewed under the criteria set forth in part 727 of this title (see 20 CFR 725.4(d)).
This part is applicable to the adjudication of all claims filed after March 31, 1980, and considered by the Secretary of Labor under section 422 of the Act and part 725 of this subchapter. If a claim subject to the provisions of section 435 of the Act and subpart C of part 727 of this subchapter (see 20 CFR 725.4(d)) cannot be approved under that subpart, such claim may be approved, if appropriate, under the provisions contained in this part. The provisions of this part shall, to the extent appropriate, be construed together in the adjudication of all claims.
(a) This part sets forth the standards to be applied in determining whether a coal miner is or was totally, or in the case of a claim subject to § 718.306 partially, disabled due to
(b) This part is designed to interpret the presumptions contained in section 411(c) of the Act, evidentiary standards and criteria contained in section 413(b) of the Act and definitional requirements and standards contained in section 402(f) of the Act within a coherent framework for the adjudication of claims. It is intended that these enumerated provisions of the Act be construed as provided in this part.
Except as is otherwise provided by this part, the definitions and usages of terms contained in § 725.101 of subpart A of part 725 of this title shall be applicable to this part.
(a) The Office of Workers' Compensation Programs (hereinafter OWCP or the Office) shall develop the medical evidence necessary for a determination with respect to each claimant's entitlement to benefits. Each miner who files a claim for benefits under the Act shall be provided an opportunity to substantiate his or her claim by means of a complete pulmonary evaluation including, but not limited to, a chest roentgenogram (X-ray), physical examination, pulmonary function tests and a blood-gas study.
(b) The standards for the administration of clinical tests and examinations contained in this subpart shall apply to all evidence developed by any party after January 19, 2001 in connection with a claim governed by this part (see §§ 725.406(b), 725.414(a), 725.456(d)). These standards shall also apply to claims governed by part 727 (see 20 CFR 725.4(d)), but only for clinical tests or examinations conducted after January 19, 2001. Any clinical test or examination subject to these standards shall be in substantial compliance with the applicable standard in order to constitute evidence of the fact for which it is proffered. Unless otherwise provided, any evidence which is not in substantial compliance with the applicable standard is insufficient to establish the fact for which it is proffered.
(a) A chest roentgenogram (X-ray) shall be of suitable quality for proper classification of pneumoconiosis and shall conform to the standards for administration and interpretation of chest X-rays as described in Appendix A.
(b) A chest X-ray to establish the existence of pneumoconiosis shall be classified as Category 1, 2, 3, A, B, or C, according to the International Labour Organization Union Internationale Contra Cancer/Cincinnati (1971) International Classification of Radiographs of the Pneumoconioses (ILO-U/C 1971), or subsequent revisions thereof. This document is available from the Division of Coal Mine Workers' Compensation in the U.S. Department of Labor, Washington, D.C., telephone (202) 693-0046, and from the National Institute for Occupational Safety and Health (NIOSH), located in Cincinnati, Ohio, telephone (513) 841-4428) and Morgantown, West Virginia, telephone (304) 285-5749. A chest X-ray classified as Category Z under the ILO Classification (1958) or Short Form (1968) shall be reclassified as Category 0 or Category 1 as appropriate, and only the latter accepted as evidence of pneumoconiosis. A chest X-ray classified under any of the foregoing classifications as Category 0, including sub-categories 0—, 0/0, or 0/1 under the UICC/Cincinnati (1968) Classification or the ILO-U/C 1971 Classification does not constitute evidence of pneumoconiosis.
(c) A description and interpretation of the findings in terms of the classifications described in paragraph (b) of this section shall be submitted by the examining physician along with the film. The report shall specify the name and qualifications of the person who took the film and the name and qualifications of the physician interpreting the film. If the physician interpreting the film is a Board-certified or Board-eligible radiologist or a certified “B” reader (see § 718.202), he or she shall so indicate. The report shall further specify that the film was interpreted in compliance with this paragraph.
(d) The original film on which the X-ray report is based shall be supplied to the Office, unless prohibited by law, in which event the report shall be considered as evidence only if the original film is otherwise available to the Office and other parties. Where the chest X-ray of a deceased miner has been lost, destroyed or is otherwise unavailable, a report of a chest X-ray submitted by any party shall be considered in connection with the claim.
(e) Except as provided in this paragraph, no chest X-ray shall constitute evidence of the presence or absence of pneumoconiosis unless it is conducted and reported in accordance with the requirements of this section and Appendix A. In the absence of evidence to the contrary, compliance with the requirements of Appendix A shall be presumed. In the case of a deceased miner where the only available X-ray does not substantially comply with paragraphs (a) through (d), such X-ray may form the basis for a finding of the presence or absence of pneumoconiosis if it is of sufficient quality for determining the presence or absence of pneumoconiosis and such X-ray was interpreted by a Board-certified or Board-eligible radiologist or a certified “B” reader (see § 718.202).
(a) Any report of pulmonary function tests submitted in connection with a claim for benefits shall record the results of flow versus volume (flow-volume loop). The instrument shall simultaneously provide records of volume versus time (spirometric tracing). The report shall provide the results of the forced expiratory volume in one second (FEV1) and the forced vital capacity (FVC). The report shall also provide the FEV1/FVC ratio, expressed as a percentage. If the maximum voluntary ventilation (MVV) is reported, the results of such test shall be obtained independently rather than calculated from the results of the FEV1.
(b) All pulmonary function test results submitted in connection with a claim for benefits shall be accompanied by three tracings of the flow versus volume and the electronically derived volume versus time tracings. If the MVV is reported, two tracings of the MVV whose values are within 10% of each other shall be sufficient. Pulmonary function test results developed in connection with a claim for benefits shall also include a statement signed by the physician or technician conducting the test setting forth the following:
(1) Date and time of test;
(2) Name, DOL claim number, age, height, and weight of claimant at the time of the test;
(3) Name of technician;
(4) Name and signature of physician supervising the test;
(5) Claimant's ability to understand the instructions, ability to follow directions and degree of cooperation in performing the tests. If the claimant is unable to complete the test, the person
(6) Paper speed of the instrument used;
(7) Name of the instrument used;
(8) Whether a bronchodilator was administered. If a bronchodilator is administered, the physician's report must detail values obtained both before and after administration of the bronchodilator and explain the significance of the results obtained; and
(9) That the requirements of paragraphs (b) and (c) of this section have been complied with.
(c) Except as provided in this paragraph, no results of a pulmonary function study shall constitute evidence of the presence or absence of a respiratory or pulmonary impairment unless it is conducted and reported in accordance with the requirements of this section and Appendix B to this part. In the absence of evidence to the contrary, compliance with the requirements of Appendix B shall be presumed. In the case of a deceased miner, where no pulmonary function tests are in substantial compliance with paragraphs (a) and (b) and Appendix B, noncomplying tests may form the basis for a finding if, in the opinion of the adjudication officer, the tests demonstrate technically valid results obtained with good cooperation of the miner.
(a) A report of any physical examination conducted in connection with a claim shall be prepared on a medical report form supplied by the Office or in a manner containing substantially the same information. Any such report shall include the following information and test results:
(1) The miner's medical and employment history;
(2) All manifestations of chronic respiratory disease;
(3) Any pertinent findings not specifically listed on the form;
(4) If heart disease secondary to lung disease is found, all symptoms and significant findings;
(5) The results of a chest X-ray conducted and interpreted as required by § 718.102; and
(6) The results of a pulmonary function test conducted and reported as required by § 718.103. If the miner is physically unable to perform a pulmonary function test or if the test is medically contraindicated, in the absence of evidence establishing total disability pursuant to § 718.304, the report must be based on other medically acceptable clinical and laboratory diagnostic techniques, such as a blood gas study.
(b) In addition to the requirements of paragraph (a), a report of physical examination may be based on any other procedures such as electrocardiogram, blood-gas studies conducted and reported as required by § 718.105, and other blood analyses which, in the physician's opinion, aid in his or her evaluation of the miner.
(c) In the case of a deceased miner, where no report is in substantial compliance with paragraphs (a) and (b), a report prepared by a physician who is unavailable may nevertheless form the basis for a finding if, in the opinion of the adjudication officer, it is accompanied by sufficient indicia of reliability in light of all relevant evidence.
(d)
(1)
(2)
(3)
(4)
(5) In the absence of contrary probative evidence, the adjudication officer shall accept the statement of a physician with regard to the factors listed in paragraphs (d)(1) through (4) of this section. In appropriate cases, the relationship between the miner and his treating physician may constitute substantial evidence in support of the adjudication officer's decision to give that physician's opinion controlling weight, provided that the weight given to the opinion of a miner's treating physician shall also be based on the credibility of the physician's opinion in light of its reasoning and documentation, other relevant evidence and the record as a whole.
(a) Blood-gas studies are performed to detect an impairment in the process of alveolar gas exchange. This defect will manifest itself primarily as a fall in arterial oxygen tension either at rest or during exercise. No blood-gas study shall be performed if medically contraindicated.
(b) A blood-gas study shall initially be administered at rest and in a sitting position. If the results of the blood-gas test at rest do not satisfy the requirements of Appendix C to this part, an exercise blood-gas test shall be offered to the miner unless medically contraindicated. If an exercise blood-gas test is administered, blood shall be drawn during exercise.
(c) Any report of a blood-gas study submitted in connection with a claim shall specify:
(1) Date and time of test;
(2) Altitude and barometric pressure at which the test was conducted;
(3) Name and DOL claim number of the claimant;
(4) Name of technician;
(5) Name and signature of physician supervising the study;
(6) The recorded values for PC02, P02, and PH, which have been collected simultaneously (specify values at rest and, if performed, during exercise);
(7) Duration and type of exercise;
(8) Pulse rate at the time the blood sample was drawn;
(9) Time between drawing of sample and analysis of sample; and
(10) Whether equipment was calibrated before and after each test.
(d) If one or more blood-gas studies producing results which meet the appropriate table in Appendix C is administered during a hospitalization which ends in the miner's death, then any such study must be accompanied by a physician's report establishing that the test results were produced by a chronic respiratory or pulmonary condition. Failure to produce such a report will prevent reliance on the blood-gas study as evidence that the miner was totally disabled at death. (e) In the case of a deceased miner, where no blood gas tests are in substantial compliance with
(a) A report of an autopsy or biopsy submitted in connection with a claim shall include a detailed gross macroscopic and microscopic description of the lungs or visualized portion of a lung. If a surgical procedure has been performed to obtain a portion of a lung, the evidence shall include a copy of the surgical note and the pathology report of the gross and microscopic examination of the surgical specimen. If an autopsy has been performed, a complete copy of the autopsy report shall be submitted to the Office.
(b) In the case of a miner who died prior to March 31, 1980, an autopsy or biopsy report shall be considered even when the report does not substantially comply with the requirements of this section. A noncomplying report concerning a miner who died prior to March 31, 1980, shall be accorded the appropriate weight in light of all relevant evidence.
(c) A negative biopsy is not conclusive evidence that the miner does not have pneumoconiosis. However, where positive findings are obtained on biopsy, the results will constitute evidence of the presence of pneumoconiosis.
(a) The results of any medically acceptable test or procedure reported by a physician and not addressed in this subpart, which tends to demonstrate the presence or absence of pneumoconiosis, the sequelae of pneumoconiosis or a respiratory or pulmonary impairment, may be submitted in connection with a claim and shall be given appropriate consideration.
(b) The party submitting the test or procedure pursuant to this section bears the burden to demonstrate that the test or procedure is medically acceptable and relevant to establishing or refuting a claimant's entitlement to benefits.
(a) For the purpose of the Act, “pneumoconiosis” means a chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments, arising out of coal mine employment. This definition includes both medical, or “clinical”, pneumoconiosis and statutory, or “legal”, pneumoconiosis.
(1)
(2)
(b) For purposes of this section, a disease “arising out of coal mine employment” includes any chronic pulmonary disease or respiratory or pulmonary impairment significantly related to, or substantially aggravated by, dust exposure in coal mine employment.
(c) For purposes of this definition, “pneumoconiosis” is recognized as a latent and progressive disease which may first become detectable only after the cessation of coal mine dust exposure.
(a) A finding of the existence of pneumoconiosis may be made as follows:
(1) A chest X-ray conducted and classified in accordance with § 718.102 may form the basis for a finding of the existence of pneumoconiosis. Except as otherwise provided in this section, where two or more X-ray reports are in conflict, in evaluating such X-ray reports consideration shall be given to the radiological qualifications of the physicians interpreting such X-rays.
(i) In all claims filed before January 1, 1982, where there is other evidence of pulmonary or respiratory impairment, a Board-certified or Board-eligible radiologist's interpretation of a chest X-ray shall be accepted by the Office if the X-ray is in compliance with the requirements of § 718.102 and if such X-ray has been taken by a radiologist or qualified radiologic technologist or technician and there is no evidence that the claim has been fraudulently represented. However, these limitations shall not apply to any claim filed on or after January 1, 1982.
(ii) The following definitions shall apply when making a finding in accordance with this paragraph.
(A) The term
(B)
(C)
(D)
(E)
(F)
(2) A biopsy or autopsy conducted and reported in compliance with § 718.106 may be the basis for a finding of the existence of pneumoconiosis. A finding in an autopsy or biopsy of anthracotic pigmentation, however, shall not be sufficient, by itself, to establish the existence of pneumoconiosis. A report of autopsy shall be accepted unless there is evidence that the report is not accurate
(3) If the presumptions described in §§ 718.304, 718.305 or § 718.306 are applicable, it shall be presumed that the miner is or was suffering from pneumoconiosis.
(4) A determination of the existence of pneumoconiosis may also be made if a physician, exercising sound medical judgment, notwithstanding a negative X-ray, finds that the miner suffers or suffered from pneumoconiosis as defined in § 718.201. Any such finding shall be based on objective medical evidence such as blood-gas studies, electrocardiograms, pulmonary function studies, physical performance tests, physical examination, and medical and work histories. Such a finding shall be supported by a reasoned medical opinion.
(b) No claim for benefits shall be denied solely on the basis of a negative chest X-ray.
(c) A determination of the existence of pneumoconiosis shall not be made solely on the basis of a living miner's statements or testimony. Nor shall such a determination be made upon a claim involving a deceased miner filed on or after January 1, 1982, solely based upon the affidavit(s) (or equivalent sworn testimony) of the claimant and/or his or her dependents who would be eligible for augmentation of the claimant's benefits if the claim were approved.
(a) In order for a claimant to be found eligible for benefits under the Act, it must be determined that the miner's pneumoconiosis arose at least in part out of coal mine employment. The provisions in this section set forth the criteria to be applied in making such a determination.
(b) If a miner who is suffering or suffered from pneumoconiosis was employed for ten years or more in one or more coal mines, there shall be a rebuttable presumption that the pneumoconiosis arose out of such employment.
(c) If a miner who is suffering or suffered from pneumoconiosis was employed less than ten years in the nation's coal mines, it shall be determined that such pneumoconiosis arose out of that employment only if competent evidence establishes such a relationship.
(a)
(b)(1)
(i) From performing his or her usual coal mine work; and
(ii) From engaging in gainful employment in the immediate area of his or her residence requiring the skills or abilities comparable to those of any employment in a mine or mines in which he or she previously engaged with some regularity over a substantial period of time.
(2)
(i) Pulmonary function tests showing values equal to or less than those listed in Table B1 (Males) or Table B2 (Females) in Appendix B to this part for an individual of the miner's age, sex, and height for the FEV1 test; if, in addition, such tests also reveal the values specified in either paragraph (b)(2)(i)(A) or (B) or (C) of this section:
(A) Values equal to or less than those listed in Table B3 (Males) or Table B4 (Females) in Appendix B of this part, for an individual of the miner's age, sex, and height for the FVC test, or
(B) Values equal to or less than those listed in Table B5 (Males) or Table B6 (Females) in Appendix B to this part, for an individual of the miner's age, sex, and height for the MVV test, or
(C) A percentage of 55 or less when the results of the FEV1 test are divided by the results of the FVC test (FEV1/FVC equal to or less than 55%), or
(ii) Arterial blood-gas tests show the values listed in Appendix C to this part, or
(iii) The miner has pneumoconiosis and has been shown by the medical evidence to be suffering from cor pulmonale with right-sided congestive heart failure, or
(iv) Where total disability cannot be shown under paragraphs (b)(2)(i), (ii), or (iii) of this section, or where pulmonary function tests and/or blood gas studies are medically contraindicated, total disability may nevertheless be found if a physician exercising reasoned medical judgment, based on medically acceptable clinical and laboratory diagnostic techniques, concludes that a miner's respiratory or pulmonary condition prevents or prevented the miner from engaging in employment as described in paragraph (b)(1) of this section.
(c)(1)
(i) Has a material adverse effect on the miner's respiratory or pulmonary condition; or
(ii) Materially worsens a totally disabling respiratory or pulmonary impairment which is caused by a disease or exposure unrelated to coal mine employment.
(2) Except as provided in § 718.305 and paragraph (b)(2)(iii) of this section, proof that the miner suffers or suffered from a totally disabling respiratory or pulmonary impairment as defined in paragraphs (b)(2)(i), (b)(2)(ii), (b)(2)(iv) and (d) of this section shall not, by itself, be sufficient to establish that the miner's impairment is or was due to pneumoconiosis. Except as provided in paragraph (d), the cause or causes of a miner's total disability shall be established by means of a physician's documented and reasoned medical report.
(d)
(1) In a case involving a deceased miner in which the claim was filed prior to January 1, 1982, affidavits (or equivalent sworn testimony) from persons knowledgeable of the miner's physical condition shall be sufficient to establish total (or under § 718.306 partial) disability due to pneumoconiosis if no medical or other relevant evidence exists which
(2) In a case involving a survivor's claim filed on or after January 1, 1982, but prior to June 30, 1982, which is subject to § 718.306, affidavits (or equivalent sworn testimony) from persons knowledgeable of the miner's physical condition shall be sufficient to establish total or partial disability due to pneumoconiosis if no medical or other relevant evidence exists which addresses the miner's pulmonary or respiratory condition; however, such a determination shall not be based solely upon the affidavits or testimony of the claimant and/or his or her dependents who would be eligible for augmentation of the claimant's benefits if the claim were approved.
(3) In a case involving a deceased miner whose claim was filed on or after January 1, 1982, affidavits (or equivalent sworn testimony) from persons knowledgeable of the miner's physical condition shall be sufficient to establish total disability due to pneumoconiosis if no medical or other relevant evidence exists which addresses the miner's pulmonary or respiratory condition; however, such a determination shall not be based solely upon the affidavits or testimony of any person who would be eligible for benefits (including augmented benefits) if the claim were approved.
(4) Statements made before death by a deceased miner about his or her physical condition are relevant and shall be considered in making a determination as to whether the miner was totally disabled at the time of death.
(5) In the case of a living miner's claim, a finding of total disability due to pneumoconiosis shall not be made solely on the miner's statements or testimony.
(e) In determining total disability to perform usual coal mine work, the following shall apply in evaluating the miner's employment activities:
(1) In the case of a deceased miner, employment in a mine at the time of death shall not be conclusive evidence that the miner was not totally disabled. To disprove total disability, it must be shown that at the time the miner died, there were no changed circumstances of employment indicative of his or her reduced ability to perform his or her usual coal mine work.
(2) In the case of a living miner, proof of current employment in a coal mine shall not be conclusive evidence that the miner is not totally disabled unless it can be shown that there are no changed circumstances of employment indicative of his or her reduced ability to perform his or her usual coal mine work.
(3) Changed circumstances of employment indicative of a miner's reduced ability to perform his or her usual coal mine work may include but are not limited to:
(i) The miner's reduced ability to perform his or her customary duties without help; or
(ii) The miner's reduced ability to perform his or her customary duties at his or her usual levels of rapidity, continuity or efficiency; or
(iii) The miner's transfer by request or assignment to less vigorous duties or to duties in a less dusty part of the mine.
(a) Benefits are provided to eligible survivors of a miner whose death was due to pneumoconiosis. In order to receive benefits, the claimant must prove that:
(1) The miner had pneumoconiosis (
(2) The miner's pneumoconiosis arose out of coal mine employment (
(3) The miner's death was due to pneumoconiosis as provided by this section.
(b) For the purpose of adjudicating survivors' claims filed prior to January 1, 1982, death will be considered due to pneumoconiosis if any of the following criteria is met:
(1) Where competent medical evidence established that the miner's death was due to pneumoconiosis, or
(2) Where death was due to multiple causes including pneumoconiosis and it is not medically feasible to distinguish which disease caused death or the extent to which pneumoconiosis contributed to the cause of death, or
(3) Where the presumption set forth at § 718.304 is applicable, or
(4) Where either of the presumptions set forth at § 718.303 or § 718.305 is applicable and has not been rebutted.
(5) Where the cause of death is significantly related to or aggravated by pneumoconiosis.
(c) For the purpose of adjudicating survivors' claims filed on or after January 1, 1982, death will be considered to be due to pneumoconiosis if any of the following criteria is met:
(1) Where competent medical evidence establishes that pneumoconiosis was the cause of the miner's death, or
(2) Where pneumoconiosis was a substantially contributing cause or factor leading to the miner's death or where the death was caused by complications of pneumoconiosis, or
(3) Where the presumption set forth at § 718.304 is applicable.
(4) However, survivors are not eligible for benefits where the miner's death was caused by a traumatic injury or the principal cause of death was a medical condition not related to pneumoconiosis, unless the evidence establishes that pneumoconiosis was a substantially contributing cause of death.
(5) Pneumoconiosis is a “substantially contributing cause” of a miner's death if it hastens the miner's death.
(d) To minimize the hardships to potentially entitled survivors due to the disruption of benefits upon the miner's death, survivors' claims filed on or after January 1, 1982, shall be adjudicated on an expedited basis in accordance with the following procedures. The initial burden is upon the claimant, with the assistance of the district director, to develop evidence which meets the requirements of paragraph (c) of this section. Where the initial medical evidence appears to establish that death was due to pneumoconiosis, the survivor will receive benefits unless the weight of the evidence as subsequently developed by the Department or the responsible operator establishes that the miner's death was not due to pneumoconiosis as defined in paragraph (c). However, no such benefits shall be found payable before the party responsible for the payment of such benefits shall have had a reasonable opportunity for the development of rebuttal evidence.
Decisions, statements, reports, opinions, or the like, of agencies, organizations, physicians or other individuals, about the existence, cause, and extent of a miner's disability, or the cause of a miner's death, are admissible. If properly submitted, such evidence shall be considered and given the weight to which it is entitled as evidence under all the facts before the adjudication officer in the claim.
The presumptions set forth in §§ 718.302, 718.303, 718.305 and 718.306 apply only if a miner worked in one or more coal mines for the number of years required to invoke the presumption. The length of the miner's coal mine work history must be
If a miner who is suffering or suffered from pneumoconiosis was employed for ten years or more in one or more coal mines, there shall be a rebuttable presumption that the pneumoconiosis arose out of such employment. (See § 718.203.)
(a)(1) If a deceased miner was employed for ten or more years in one or more coal mines and died from a respirable disease, there shall be a rebuttable presumption that his or her death was due to pneumoconiosis.
(2) Under this presumption, death shall be found due to a respirable disease in any case in which the evidence establishes that death was due to multiple causes, including a respirable disease, and it is not medically feasible to distinguish which disease caused death or the extent to which the respirable disease contributed to the cause of death.
(b) The presumption of paragraph (a) of this section may be rebutted by a showing that the deceased miner did not have pneumoconiosis, that his or her death was not due to pneumoconiosis or that pneumoconiosis did not contribute to his or her death.
(c) This section is not applicable to any claim filed on or after January 1, 1982.
There is an irrebuttable presumption that a miner is totally disabled due to pneumoconiosis, that a miner's death was due to pneumoconiosis or that a miner was totally disabled due to pneumoconiosis at the time of death, if such miner is suffering or suffered from a chronic dust disease of the lung which:
(a) When diagnosed by chest X-ray (see § 718.202 concerning the standards for X-rays and the effect of interpretations of X-rays by physicians) yields one or more large opacities (greater than 1 centimeter in diameter) and would be classified in Category A, B, or C in:
(1) The ILO-U/C International Classification of Radiographs of the Pneumoconioses, 1971, or subsequent revisions thereto; or
(2) The International Classification of the Radiographs of the Pneumoconioses of the International Labour Office, Extended Classification (1968) (which may be referred to as the “ILO Classification (1968)”); or
(3) The Classification of the Pneumoconioses of the Union Internationale Contra Cancer/Cincinnati (1968) (which may be referred to as the “UICC/Cincinnati (1968) Classification”); or
(b) When diagnosed by biopsy or autopsy, yields massive lesions in the lung; or
(c) When diagnosed by means other than those specified in paragraphs (a) and (b) of this section, would be a condition which could reasonably be expected to yield the results described in paragraph (a) or (b) of this section had diagnosis been made as therein described:
(a) If a miner was employed for fifteen years or more in one or more underground coal mines, and if there is a chest X-ray submitted in connection with such miner's or his or her survivor's claim and it is interpreted as negative with respect to the requirements of § 718.304, and if other evidence demonstrates the existence of a totally disabling respiratory or pulmonary impairment, then there shall be a rebuttable presumption that such miner is totally disabled due to pneumoconiosis, that such miner's death was due to pneumoconiosis, or that at the time of death such miner was totally disabled by pneumoconiosis. In the case of a living miner's claim, a spouse's affidavit or testimony may not be used by itself to establish the applicability of the presumption. The Secretary shall not apply all or a portion of the requirement of this paragraph that the miner work in an underground mine where it is determined that conditions of the miner's employment in a coal mine were substantially similar to conditions in an underground mine. The presumption may be rebutted only by establishing that the miner does not, or did not have pneumoconiosis, or that his or her respiratory or pulmonary impairment did not arise out of, or in connection with, employment in a coal mine.
(b) In the case of a deceased miner, where there is no medical or other relevant evidence, affidavits of persons having knowledge of the miner's condition shall be considered to be sufficient to establish the existence of a totally disabling respiratory or pulmonary impairment for purposes of this section.
(c) The determination of the existence of a totally disabling respiratory or pulmonary impairment, for purposes of applying the presumption described in this section, shall be made in accordance with § 718.204.
(d) Where the cause of death or total disability did not arise in whole or in part out of dust exposure in the miner's coal mine employment or the evidence establishes that the miner does not or did not have pneumoconiosis, the presumption will be considered rebutted. However, in no case shall the presumption be considered rebutted on the basis of evidence demonstrating the existence of a totally disabling obstructive respiratory or pulmonary disease of unknown origin.
(e) This section is not applicable to any claim filed on or after January 1, 1982.
(a) In the case of a miner who died on or before March 1, 1978, who was employed for 25 or more years in one or more coal mines prior to June 30, 1971, the eligible survivors of such miner whose claims have been filed prior to June 30, 1982, shall be entitled to the payment of benefits, unless it is established that at the time of death such miner was not partially or totally disabled due to pneumoconiosis. Eligible survivors shall, upon request, furnish such evidence as is available with respect to the health of the miner at the time of death, and the nature and duration of the miner's coal mine employment.
(b) For the purpose of this section, a miner will be considered to have been “partially disabled” if he or she had reduced ability to engage in work as defined in § 718.204(b).
(c) In order to rebut this presumption the evidence must demonstrate that the miner's ability to perform work as defined in § 718.204(b) was not reduced at the time of his or her death or that the miner did not have pneumoconiosis.
(d) None of the following items, by itself, shall be sufficient to rebut the presumption:
(1) Evidence that a deceased miner was employed in a coal mine at the time of death;
(2) Evidence pertaining to a deceased miner's level of earnings prior to death;
(3) A chest X-ray interpreted as negative for the existence of pneumoconiosis;
(4) A death certificate which makes no mention of pneumoconiosis.
The following standards are established in accordance with sections 402(f)(1)(D) and
(1) Every chest roentgenogram shall be a single postero-anterior projection at full inspiration on a 14 by 17 inch film. Additional chest films or views shall be obtained if they are necessary for clarification and classification. The film and cassette shall be capable of being positioned both vertically and horizontally so that the chest roentgenogram will include both apices and costophrenic angles. If a miner is too large to permit the above requirements, then a projection with minimum loss of costophrenic angle shall be made.
(2) Miners shall be disrobed from the waist up at the time the roentgenogram is given. The facility shall provide a dressing area and, for those miners who wish to use one, the facility shall provide a clean gown. Facilities shall be heated to a comfortable temperature.
(3) Roentgenograms shall be made only with a diagnostic X-ray machine having a rotating anode tube with a maximum of a 2 mm source (focal spot).
(4) Except as provided in paragraph (5), roentgenograms shall be made with units having generators which comply with the following: (a) the generators of existing roentgenographic units acquired by the examining facility prior to July 27, 1973, shall have a minimum rating of 200 mA at 100 kVp; (b) generators of units acquired subsequent to that date shall have a minimum rating of 300 mA at 125 kVp.
A generator with a rating of 150 kVp is recommended.
(5) Roentgenograms made with battery-powered mobile or portable equipment shall be made with units having a minimum rating of 100 mA at 110 kVp at 500 Hz, or 200 mA at 110 kVp at 60 Hz.
(6) Capacitor discharge, and field emission units may be used.
(7) Roentgenograms shall be given only with equipment having a beam-limiting device which does not cause large unexposed boundaries. The use of such a device shall be discernible from an examination of the roentgenogram.
(8) To insure high quality chest roentgenograms:
(i) The maximum exposure time shall not exceed
(ii) The source or focal spot to film distance shall be at least 6 feet;
(iii) Only medium-speed film and medium-speed intensifying screens shall be used;
(iv) Film-screen contact shall be maintained and verified at 6-month or shorter intervals;
(v) Intensifying screens shall be inspected at least once a month and cleaned when necessary by the method recommended by the manufacturer;
(vi) All intensifying screens in a cassette shall be of the same type and made by the same manufacturer;
(vii) When using over 90 kV, a suitable grid or other means of reducing scattered radiation shall be used;
(viii) The geometry of the radiographic system shall insure that the central axis (ray) of the primary beam is perpendicular to the plane of the film surface and impinges on the center of the film.
(9) Radiographic processing:
(i) Either automatic or manual film processing is acceptable. A constant time-temperature technique shall be meticulously employed for manual processing.
(ii) If mineral or other impurities in the processing water introduce difficulty in obtaining a high-quality roentgenogram, a suitable filter or purification system shall be used.
(10) Before the miner is advised that the examination is concluded, the roentgenogram shall be processed and inspected and accepted for quality by the physician, or if the physician is not available, acceptance may be made by the radiologic technologist. In a case of a substandard roentgenogram, another shall be made immediately.
(11) An electric power supply shall be used which complies with the voltage, current, and regulation specified by the manufacturer of the machine.
(12) A densitometric test object may be required on each roentgenogram for an objective evaluation of film quality at the discretion of the Department of Labor.
(13) Each roentgenogram made under this Appendix shall be permanently and legibly marked with the name and address of the facility at which it is made, the miner's DOL claim number, the date of the roentgenogram, and left and right side of film. No other identifying markings shall be recorded on the roentgenogram.
The following standards are established in accordance with section 402(f)(1)(D) of the Act. They were developed in consultation with the National Institute for Occupational Safety and Health (NIOSH). These standards are promulgated for the guidance of physicians and medical technicians to insure that uniform procedures are used in administering and interpreting ventilatory function tests and that the best available medical evidence will be submitted in support of a claim for black lung benefits. If it is established that one or more standards have not been met, the claims adjudicator may consider such fact in determining the evidentiary weight to be given to the results of the ventilatory function tests.
(1) Instruments to be used for the administration of pulmonary function tests shall be approved by NIOSH and shall conform to the following criteria:
(i) The instrument shall be accurate within +/−50 ml or within +/−3 percent of reading, whichever is greater.
(ii) The instrument shall be capable of measuring vital capacity from 0 to 7 liters BTPS.
(iii) The instrument shall have a low inertia and offer low resistance to airflow such that the resistance to airflow at 12 liters per second must be less than 1.5 cm H20/liter/sec.
(iv) The instrument or user of the instrument must have a means of correcting volumes to body temperature saturated with water vapor (BTPS) under conditions of varying ambient spirometer temperatures and barometric pressures.
(v) The instrument used shall provide a tracing of flow versus volume (flow-volume loop) which displays the entire maximum inspiration and the entire maximum forced expiration. The instrument shall, in addition, provide tracings of the volume versus time tracing (spirogram) derived electronically from the flow-volume loop. Tracings are necessary to determine whether maximum inspiratory and expiratory efforts have been obtained during the FVC maneuver. If maximum voluntary ventilation is measured, the tracing shall record the individual breaths volumes versus time.
(vi) The instrument shall be capable of accumulating volume for a minimum of 10 seconds after the onset of exhalation.
(vii) The instrument must be capable of being calibrated in the field with respect to the FEV1. The volume calibration shall be accomplished with a 3 L calibrating syringe and should agree to within 1 percent of a 3 L calibrating volume. The linearity of the instrument must be documented by a record of volume calibrations at three different flow rates of approximately 3 L/6 sec, 3 L/3 sec, and 3 L/sec.
(viii) For measuring maximum voluntary ventilation (MVV) the instrument shall have a response which is flat within +/−10 percent up to 4 Hz at flow rates up to 12 liters per second over the volume range.
(ix) The spirogram shall be recorded at a speed of at least 20 mm/sec and a volume excursion of at least 10mm/L. Calculation of the FEVl from the flow-volume loop is not acceptable. Original tracings shall be submitted.
(2) The administration of pulmonary function tests shall conform to the following criteria:
(i) Tests shall not be performed during or soon after an acute respiratory illness.
(ii) For the FEV1 and FVC, use of a nose clip is required. The procedures shall be explained in simple terms to the patient who shall be instructed to loosen any tight clothing and stand in front of the apparatus. The subject may sit, or stand, but care should be taken on repeat testing that the same position be used. Particular attention shall be given to insure that the chin is slightly elevated with the neck slightly extended. The subject shall be instructed to expire completely, momentarily hold his breath, place the mouthpiece in his mouth and close the mouth firmly about the mouthpiece to ensure no air leak. The subject will than make a maximum inspiration from the
(A) Has not reached full inspiration preceding the forced expiration; or
(B) Has not used maximal effort during the entire forced expiration; or
(C) Has not continued the expiration for least 7 sec. or until an obvious plateau for at least 2 sec. in the volume-time curve has occurred; or
(D) Has coughed or closed his glottis; or
(E) Has an obstructed mouthpiece or a leak around the mouthpiece (obstruction due to tongue being placed in front of mouthpiece, false teeth falling in front of mouthpiece, etc.); or
(F) Has an unsatisfactory start of expiration, one characterized by excessive hesitation (or false starts). Peak flow should be attained at the start of expiration and the volume-time tracing (spirogram) should have a smooth contour revealing gradually decreasing flow throughout expiration; or
(G) Has an excessive variability between the three acceptable curves. The variation between the two largest FEV1's of the three acceptable tracings should not exceed 5 percent of the largest FEV1 or 100 ml, whichever is greater. As individuals with obstructive disease or rapid decline in lung function will be less likely to achieve this degree of reproducibility, tests not meeting this criterion may still be submitted for consideration in support of a claim for black lung benefits. Failure to meet this standard should be clearly noted in the test report by the physician conducting or reviewing the test.
(iii) For the MVV, the subject shall be instructed before beginning the test that he or she will be asked to breathe as deeply and as rapidly as possible for approximately 15 seconds. The test shall be performed with the subject in the standing position, if possible. Care shall be taken on repeat testing that the same position be used. The subject shall breathe normally into the mouthpiece of the apparatus for 10 to 15 seconds to become accustomed to the system. The subject shall then be instructed to breathe as deeply and as rapidly as possible, and shall be continually encouraged during the remainder of the maneuver. Subject shall continue the maneuver for 15 seconds. At least 5 minutes of rest shall be allowed between maneuvers. At least three MVV's shall be carried out. (
(A) Has not maintained consistent effort for at least 12 to 15 seconds; or
(B) Has coughed or closed his glottis; or
(C) Has an obstructed mouthpiece or a leak around the mouthpiece (obstruction due to tongue being placed in front of mouthpiece, false teeth falling in front of mouthpiece, etc.); or
(D) Has an excessive variability between the three acceptable curves. The variation between the two largest MVVs of the three satisfactory tracings shall not exceed 10 percent.
(iv) A calibration check shall be performed on the instrument each day before use, using a volume source of at least three liters, accurate to within +/−1 percent of full scale. The volume calibration shall be performed in accordance with the method described in paragraph (1)(vii) of this Appendix. Accuracy of the time measurement used in determining the FEV1 shall be checked using the manufacturer's stated procedure and shall be within +/−3 percent of actual. The procedure described in the Appendix shall be performed as well as any other procedures suggested by the manufacturer of the spirometer being used.
(v)(A) The first step in evaluating a spirogram for the FVC and FEV1 shall be to determine whether or not the patient has performed the test properly or as described in (2)(ii) of this Appendix. The largest recorded FVC and FEV1, corrected to BTPS, shall be used in the analysis.
(B) Only MVV maneuvers which demonstrate consistent effort for at least 12 seconds shall be considered acceptable. The largest accumulated volume for a 12 second period corrected to BTPS and multiplied by five or the largest accumulated volume for a 15 second period corrected to BTPS and multiplied by four is to be reported as the MVV.
The following tables set forth the values to be applied in determining whether total disability may be established in accordance with §§ 718.204(b)(2)(ii) and 718.305(a), (c). The values contained in the tables are indicative of impairment only. They do not establish a degree of disability except as provided in §§ 718.204(b)(2)(ii) and 718.305(a), (c) of this subchapter, nor do they establish standards for determining normal alveolar gas exchange values for any particular individual. Tests shall not be performed during or soon after an acute respiratory or cardiac illness. A miner who meets the following medical specifications shall be found to be totally disabled, in the absence of rebutting evidence, if the values specified in one of the following tables are met:
(1) For arterial blood-gas studies performed at test sites up to 2,999 feet above sea level:
(2) For arterial blood-gas studies performed at test sites 3,000 to 5,999 feet above sea level:
(3) For arterial blood-gas studies performed at test sites 6,000 feet or more above sea level:
5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 3174, 30 U.S.C. 901
Section 421 of the Black Lung Benefits Act provides that a claim for benefits based on the total disability or death of a coal miner due to pneumoconiosis must be filed under a State workers' compensation law where such law provides adequate coverage for pneumoconiosis. A State workers' compensation law may be deemed to provide adequate coverage only when it is included on a list of such laws maintained by the Secretary. The purpose of this part is to set forth the procedures and criteria for inclusion on that list, and to provide that list.
(a) The definitions and use of terms contained in subpart A of part 725 of this title shall be applicable to this part.
(b) For purposes of this part, the following definitions apply:
(1)
(2)
(a) The Governor of any State or any duly authorized State agency may, at any time, request that the Secretary include such State's workers' compensation law on his list of those State workers' compensation laws providing adequate coverage for total disability or death due to pneumoconiosis. Each such request shall include a copy of the State workers' compensation law and any other pertinent State laws; a copy of any regulations, either proposed or promulgated, implementing such laws; and a copy of any relevant administrative or court decision interpreting such laws or regulations, or, if such decisions are published in a readily available report, a citation to such decision.
(b) Upon receipt of a request that a State be included on the Secretary's list, the Secretary shall include the State on the list if he finds that the State's workers' compensation law guarantees the payment of monthly and medical benefits to all persons who would be entitled to such benefits under the Black Lung Benefits Act at the time of the request, at a rate no less than that provided by the Black Lung Benefits Act. The criteria used by the Secretary in making such determination shall include, but shall not be limited to, the criteria set forth in section 421(b)(2) of the Act.
(c) The Secretary may require each State included on the list to submit reports detailing the extent to which the State's workers' compensation laws, as reflected by statute, regulation, or administrative or court decision, continues to meet the requirements of paragraph (b) of this section. If the Secretary concludes that the State's workers' compensation law does not provide adequate coverage at any time, either because of changes to the State workers' compensation law or the Black Lung Benefits Act, he shall remove the State from the Secretary's list after providing the State with notice of such removal and an opportunity to be heard.
(a) The Secretary has determined that publication of the Secretary's list in the Code of Federal Regulations is appropriate. Accordingly, in addition to its publication in the
(b) Upon review of all requests filed with the Secretary under section 421 of the Black Lung Benefits Act and this part, and examination of the workers' compensation laws of the States making such requests, the Secretary has determined that the workers' compensation law of each of the following listed States, for the period from the date shown in the list until such date as the Secretary may make a contrary determination, provides adequate coverage for pneumoconiosis.
5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 3174, 30 U.S.C. 901 et seq., 921, 932, 936; 33 U.S.C. 901 et seq., 42 U.S.C. 405, Secretary's Order 7-87, 52 FR 48466, Employment Standards Order No. 90-02.
(a)
(b)
(c)
(d)
(e)
(f)
(1) A provision which clarifies the definition of “pneumoconiosis” to include any “chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments, arising out of coal mine employment”;
(2) A provision which defines “miner” to include any person who works or has worked in or around a coal mine or coal preparation facility, and in coal mine construction or coal transportation under certain circumstances;
(3) A provision which limits the denial of a claim solely on the basis of employment in a coal mine;
(4) A provision which authorizes the Secretary of Labor to establish standards and develop criteria for determining total disability or death due to pneumoconiosis with respect to a part C claim;
(5) A new presumption which requires the payment of benefits to the survivors of a miner who was employed for 25 or more years in the mines under certain conditions;
(6) Provisions relating to the treatment to be accorded a survivor's affidavit, certain X-ray interpretations, and certain autopsy reports in the development of a claim; and
(7) Other clarifying, procedural, and technical amendments.
(g)
(h)
(1) The Secretary of Labor may re-read any X-ray submitted in support of a claim and may rely upon a second opinion concerning such an X-ray as a means of auditing the validity of the claim;
(2) The rebuttable presumption that the death of a miner with ten or more years employment in the coal mines, who died of a respirable disease, was due to pneumoconiosis is no longer applicable;
(3) The rebuttable presumption that the total disability of a miner with fifteen or more years employment in the coal mines, who has demonstrated a totally disabling respiratory or pulmonary impairment, is due to pneumoconiosis is no longer applicable;
(4) In the case of deceased miners, where no medical or other relevant evidence is available, only affidavits from persons not eligible to receive benefits as a result of the adjudication of the claim will be considered sufficient to establish entitlement to benefits;
(5) Unless the miner was found entitled to benefits as a result of a claim filed prior to January 1, 1982, benefits are payable on survivors' claims filed on and after January 1, 1982, only when the miner's death was due to pneumoconiosis;
(6) Benefits payable under this part are subject to an offset on account of excess earnings by the miner; and
(7) Other technical amendments.
(i)
(j)
(k)
(a) This part sets forth the procedures to be followed and standards to be applied in filing, processing, adjudicating, and paying claims filed under part C of title IV of the Act.
(b) This part applies to all claims filed under part C of title IV of the Act on or after August 18, 1978 and shall also apply to claims that were pending on August 18, 1978.
(c) The provisions of this part reflect revisions that became effective on Janaury 19, 2001. This part applies to all claims filed, and all benefits payments made, after January 19, 2001. With the exception of the following sections, this part shall also apply to the adjudication of claims that were pending on January 19, 2001: §§ 725.309, 725.310, 725.351, 725.360, 725.367, 725.406, 725.407, 725.408, 725.409, 725.410, 725.411, 725.412, 725.414, 725.415, 725.416, 725.417, 725.418, 725.421(b), 725.423, 725.454, 725.456, 725.457, 725.458, 725.459, 725.465, 725.491, 725.492, 725.493, 725.494, 725.495, 725.547. The version of those sections set forth in 20 CFR, parts 500 to end, edition revised as of April 1, 1999, apply to the adjudications of claims that were pending on January 19, 2001. For purposes of construing the provisions of this section, a claim shall be considered pending on January 19, 2001 if it was not finally denied more than one year prior to that date.
(a) This subpart describes the statutory provisions which relate to claims considered under this part, the purpose and scope of this part, definitions and usages of terms applicable to this part, and matters relating to the availability of information collected by the Department of Labor in connection with the processing of claims.
(b) Subpart B contains criteria for determining who may be found entitled to benefits under this part and other provisions relating to the conditions and duration of eligibility of a particular individual.
(c) Subpart C describes the procedures to be followed and action to be taken in connection with the filing of a claim under this part.
(d) Subpart D sets forth the duties and powers of the persons designated by the Secretary of Labor to adjudicate claims and provisions relating to the rights of parties and representatives of parties.
(e) Subpart E contains the procedures for developing evidence and adjudicating entitlement and liability issues by the district director.
(f) Subpart F describes the procedures to be followed if a hearing before the Office of Administrative Law Judges is required.
(g) Subpart G contains provisions governing the identification of a coal mine operator which may be liable for the payment of a claim.
(h) Subpart H contains provisions governing the payment of benefits with respect to an approved claim.
(i) Subpart I describes the statutory mechanisms provided for the enforcement of a coal mine operator's liability, sets forth the penalties which may be applied in the case of a defaulting coal mine operator, and describes the obligation of coal operators and their insurance carriers to file certain reports.
(j) Subpart J describes the right of certain beneficiaries to receive medical treatment benefits and vocational rehabilitation under the Act.
(a) Part 718. Part 718 of this subchapter, which contains the criteria and standards to be applied in determining whether a miner is or was totally disabled due to pneumoconiosis, or whether a miner died due to pneumoconiosis, shall be applicable to the determination of claims under this part. Claims filed after March 31, 1980, are subject to part 718 as promulgated by the Secretary in accordance with section 402(f)(1) of the Act on February 29, 1980 (see § 725.2(c)). The criteria contained in subpart C of part 727 of this subchapter are applicable in determining claims filed prior to April 1, 1980, under this part, and such criteria shall be applicable at all times with respect to claims filed under this part and under section 11 of the Black Lung Benefits Reform Act of 1977.
(b)
(c)
(d)
(e)
(a)
(1) The
(2) The
(3) The
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
(29)
(30)
(31) A
(32)
(i) If the evidence establishes that the miner worked in or around coal mines at least 125 working days during a calendar year or partial periods totaling one year, then the miner has worked one year in coal mine employment for all purposes under the Act. If a miner worked fewer than 125 working days in a year, he or she has worked a fractional year based on the ratio of the actual number of days worked to 125. Proof that the miner worked more than 125 working days in a calendar year or partial periods totaling a year, shall not establish more than one year.
(ii) To the extent the evidence permits, the beginning and ending dates of all periods of coal mine employment shall be ascertained. The dates and length of employment may be established by any credible evidence including (but not limited to) company records, pension records, earnings statements, coworker affidavits, and sworn testimony. If the evidence establishes that the miner's employment lasted for a calendar year or partial periods totaling a 365-day period amounting to one year, it shall be presumed, in the absence of evidence to the contrary, that the miner spent at least 125 working days in such employment.
(iii) If the evidence is insufficient to establish the beginning and ending dates of the miner's coal mine employment, or the miner's employment lasted less than a calendar year, then the adjudication officer may use the following formula: divide the miner's yearly income from work as a miner by the coal mine industry's average daily earnings for that year, as reported by the Bureau of Labor Statistics (BLS). A copy of the BLS table shall be made a part of the record if the adjudication officer uses this method to establish the length of the miner's work history.
(iv) No periods of coal mine employment occurring outside the United States shall be considered in computing the miner's work history.
(b)
(c)
(a) All reports, records, or other documents filed with the OWCP with respect to claims are the records of the OWCP. The Director or his or her designee shall be the official custodian of those records maintained by the OWCP at its national office. The District Director shall be the official custodian of those records maintained at a district office.
(b) The official custodian of any record sought to be inspected shall permit or deny inspection in accordance with the Department of Labor's regulations pertaining thereto (see 29 CFR Part 70). The original record in any such case shall not be removed from the Office of the custodian for such inspection. The custodian may, in his or her discretion, deny inspection of any record or part thereof which is of a character specified in 5 U.S.C. 552(b) if in his or her opinion such inspection may result in damage, harm, or harassment to the beneficiary or to any other person. For special provisions concerning release of information regarding injured employees undergoing vocational rehabilitation, see § 702.508 of this chapter.
(c) Any person may request copies of records he or she has been permitted to inspect. Such requests shall be addressed to the official custodian of the records sought to be copied. The official custodian shall provide the requested copies under the terms and conditions specified in the Department of Labor's regulations relating thereto (see 29 CFR Part 70).
(d) Any party to a claim (§ 725.360) or his or her duly authorized representative shall be permitted upon request to inspect the file which has been compiled in connection with such claim. Any party to a claim or representative of such party shall upon request be provided with a copy of any or all material contained in such claim file. A request for information by a party or representative made under this paragraph shall be answered within a reasonable time after receipt by the Office. Internal documents prepared by the district director which do not constitute evidence of a fact which must be established in connection with a claim shall not be routinely provided or presented for inspection in accordance with a request made under this paragraph.
Except as otherwise provided in this part and part 718, the burden of proving a fact alleged in connection with any provision shall rest with the party making such allegation.
(a) Section 415 and part C of the Act provide for the payment of periodic benefits in accordance with this part to:
(1) A miner (see § 725.202) who is determined to be totally disabled due to pneumoconiosis; or
(2) The surviving spouse or surviving divorced spouse or, where neither exists, the child of a deceased miner, where the deceased miner:
(i) Was receiving benefits under section 415 or part C of title IV of the Act as a result of a claim filed prior to January 1, 1982; or
(ii) Is determined as a result of a claim filed prior to January 1, 1982, to have been totally disabled due to pneumoconiosis at the time of death, or to have died due to pneumoconiosis. Survivors of miners whose claims are filed on or after January 1, 1982, must establish that the deceased miner's death was due to pneumoconiosis in order to establish their entitlement to benefits, except where entitlement is established under § 718.306 of this subchapter on a survivor's claim filed prior to June 30, 1982, or;
(3) The child of a miner's surviving spouse who was receiving benefits under section 415 or part C of title IV of the Act at the time of such spouse's death; or
(4) The surviving dependent parents, where there is no surviving spouse or child, or the surviving dependent brothers or sisters, where there is no surviving spouse, child, or parent, of a miner, where the deceased miner;
(i) Was receiving benefits under section 415 or part C of title IV of the Act as a result of a claim filed prior to January 1, 1982; or
(ii) Is determined as a result of a claim filed prior to January 1, 1982, to have been totally disabled due to pneumoconiosis at the time of death, or to have died due to pneumoconiosis. Survivors of miners whose claims are filed on or after January 1, 1982, must establish that the deceased miner's death was due to pneumoconiosis in order to establish their entitlement to benefits, except where entitlement is established under § 718.306 of this subchapter on a survivor's claim filed prior to June 30, 1982.
(b) Section 411(c)(5) of the Act provides for the payment of benefits to the eligible survivors of a miner employed for 25 or more years in the mines prior to June 30, 1971, if the miner's death occurred on or before March 1, 1978, and if the claim was filed prior to June 30, 1982, unless it is established that at the time of death, the miner was not totally or partially disabled due to pneumoconiosis. For the purposes of this part the term “total disability” shall mean partial disability with respect to a claim for which eligibility is established under section 411(c)(5) of the Act. See § 718.306 of this subchapter which implements this provision of the Act.
(c) The provisions contained in this subpart describe the conditions of entitlement to benefits applicable to a miner, or a surviving spouse, child, parent, brother, or sister, and the events which establish or terminate entitlement to benefits.
(d) In order for an entitled miner or surviving spouse to qualify for augmented benefits because of one or more dependents, such dependents must meet relationship and dependency requirements with respect to such beneficiary prescribed by or pursuant to the Act. Such requirements are also set forth in this subpart.
(a)
(1) The person was not engaged in the extraction, preparation or transportation of coal while working at the mine site, or in maintenance or construction of the mine site; or
(2) The individual was not regularly employed in or around a coal mine or coal preparation facility.
(b)
(1) There shall be a rebuttable presumption that such individual was exposed to coal mine dust during all periods of such employment occurring in or around a coal mine or coal preparation facility for purposes of:
(i) Determining whether such individual is or was a miner;
(ii) Establishing the applicability of any of the presumptions described in section 411(c) of the Act and part 718 of this subchapter; and
(iii) Determining the identity of a coal mine operator liable for the payment of benefits in accordance with § 725.495.
(2) The presumption may be rebutted by evidence which demonstrates that:
(i) The individual was not regularly exposed to coal mine dust during his or her work in or around a coal mine or coal preparation facility; or
(ii) The individual did not work regularly in or around a coal mine or coal preparation facility.
(c) A person who is or was a self-employed miner or independent contractor, and who otherwise meets the requirements of this paragraph, shall be considered a miner for the purposes of this part.
(d)
(1) Is a miner as defined in this section; and
(2) Has met the requirements for entitlement to benefits by establishing that he or she:
(i) Has pneumoconiosis (see § 718.202), and
(ii) The pneumoconiosis arose out of coal mine employment (see § 718.203), and
(iii) Is totally disabled (see § 718.204(c)), and
(iv) The pneumoconiosis contributes to the total disability (see § 718.204(c)); and
(3) Has filed a claim for benefits in accordance with the provisions of this part.
(a) An individual is entitled to benefits as a miner for each month beginning with the first month on or after January 1, 1974, in which the miner is totally disabled due to pneumoconiosis arising out of coal mine employment.
(b) The last month for which such individual is entitled to benefits is the month before the month during which either of the following events first occurs:
(1) The miner dies; or
(2) The miner's total disability ceases (see § 725.504).
(c) An individual who has been finally adjudged to be totally disabled due to pneumoconiosis and is receiving benefits under the Act shall promptly notify the Office and the responsible coal mine operator, if any, if he or she engages in his or her usual coal mine work or comparable and gainful work.
(d) Upon reasonable notice, an individual who has been finally adjudged entitled to benefits shall submit to any additional tests or examinations the Office deems appropriate, and shall submit medical reports and other relevant evidence the Office deems necessary, if an issue arises pertaining to the validity of the original award.
(a) For the purpose of augmenting benefits, an individual will be considered to be the spouse of a miner if:
(1) The courts of the State in which the miner is domiciled would find that such individual and the miner validly married; or
(2) The courts of the State in which the miner is domiciled would find, under the law they would apply in determining the devolution of the miner's intestate personal property, that the individual is the miner's spouse; or
(3) Under State law, such individual would have the right of a spouse to share in the miner's intestate personal property; or
(4) Such individual went through a marriage ceremony with the miner resulting in a purported marriage between them and which, but for a legal impediment, would have been a valid marriage, unless the individual entered into the purported marriage with knowledge that it was not a valid marriage, or if such individual and the miner were not living in the same household in the month in which a request is filed that the miner's benefits be augmented because such individual qualifies as the miner's spouse.
(b) The qualification of an individual for augmentation purposes under this section shall end with the month before the month in which:
(1) The individual dies, or
(2) The individual who previously qualified as a spouse for purposes of § 725.520(c), entered into a valid marriage without regard to this section, with a person other than the miner.
For the purposes of augmenting benefits, an individual who is the miner's spouse (see § 725.204) will be determined to be dependent upon the miner if:
(a) The individual is a member of the same household as the miner (see § 725.232); or
(b) The individual is receiving regular contributions from the miner for support (see § 725.233(c)); or
(c) The miner has been ordered by a court to contribute to such individual's support (see § 725.233(e)); or
(d) The individual is the natural parent of the son or daughter of the miner; or
(e) The individual was married to the miner (see § 725.204) for a period of not less than 1 year.
For the purposes of augmenting benefits with respect to any claim considered or reviewed under this part or part 727 of this subchapter (see § 725.4(d)), an individual will be considered to be the divorced spouse of a miner if the individual's marriage to the miner has been terminated by a final divorce on or after the 10th anniversary of the marriage unless, if such individual was married to and divorced from the miner more than once, such individual was married to the miner in each calendar year of the period beginning 10 years immediately before the date on which any divorce became final.
For the purpose of augmenting benefits, an individual who is the miner's divorced spouse (§ 725.206) will be determined to be dependent upon the miner if:
(a) The individual is receiving at least one-half of his or her support from the miner (see § 725.233(g)); or
(b) The individual is receiving substantial contributions from the miner pursuant to a written agreement (see § 725.233(c) and (f)); or
(c) A court order requires the miner to furnish substantial contributions to the individual's support (see § 725.233(c) and (e)).
As used in this section, the term “beneficiary” means only a surviving spouse entitled to benefits at the time of death (see § 725.212), or a miner. An individual will be considered to be the child of a beneficiary if:
(a) The courts of the State in which the beneficiary is domiciled (see § 725.231) would find, under the law they would apply, that the individual is the beneficiary's child; or
(b) The individual is the legally adopted child of such beneficiary; or
(c) The individual is the stepchild of such beneficiary by reason of a valid marriage of the individual's parent or adopting parent to such beneficiary; or
(d) The individual does not bear the relationship of child to such beneficiary under paragraph (a), (b), or (c) of this section, but would, under State law, have the same right as a child to share in the beneficiary's intestate personal property; or
(e) The individual is the natural son or daughter of a beneficiary but is not a child under paragraph (a), (b), or (c) of this section, and is not considered to be the child of the beneficiary under paragraph (d) of this section if the beneficiary and the mother or the father, as the case may be, of the individual went through a marriage ceremony resulting in a purported marriage between them which but for a legal impediment (see § 725.230) would have been a valid marriage; or
(f) The individual is the natural son or daughter of a beneficiary but is not a child under paragraph (a), (b), or (c) of this section, and is not considered to be the child of the beneficiary under paragraph (d) or (e) of this section, such individual shall nevertheless be considered to be the child of the beneficiary if:
(1) The beneficiary, prior to his or her entitlement to benefits, has acknowledged in writing that the individual is his or her son or daughter, or has been decreed by a court to be the parent of the individual, or has been ordered by a court to contribute to the support of the individual (see § 725.233(e)) because the individual is his or her son or daughter; or
(2) Such beneficiary is shown by satisfactory evidence to be the father or mother of the individual and was living with or contributing to the support of the individual at the time the beneficiary became entitled to benefits.
(a) For purposes of augmenting the benefits of a miner or surviving spouse, the term “beneficiary” as used in this section means only a miner or surviving spouse entitled to benefits (see § 725.202 and § 725.212). An individual who is the beneficiary's child (§ 725.208) will be determined to be, or to have been, dependent on the beneficiary, if the child:
(1) Is unmarried; and
(2)(i) Is under 18 years of age; or
(ii) Is under a disability as defined in section 223(d) of the Social Security Act, 42 U.S.C. 423(d); or
(iii) Is 18 years of age or older and is a student.
(b)(1) The term “student” means a “full-time student” as defined in section 202(d)(7) of the Social Security Act, 42 U.S.C. 402(d)(7) (see §§ 404.367—404.369 of this title), or an individual under 23 years of age who has not completed 4 years of education beyond the high school level and who is regularly pursuing a full-time course of study or training at an institution which is:
(i) A school, college, or university operated or directly supported by the United States, or by a State or local government or political subdivision thereof; or
(ii) A school, college, or university which has been accredited by a State or by a State-recognized or nationally-recognized accrediting agency or body; or
(iii) A school, college, or university not so accredited but whose credits are accepted, on transfer, by at least three institutions which are so accredited; or
(iv) A technical, trade, vocational, business, or professional school accredited or licensed by the Federal or a State government or any political subdivision thereof, providing courses of not less than 3 months' duration that prepare the student for a livelihood in a trade, industry, vocation, or profession.
(2) A student will be considered to be “pursuing a full-time course of study or training at an institution” if the student is enrolled in a noncorrespondence course of at least 13 weeks duration and is carrying a subject load which is considered full-time for day students under the institution's standards and practices. A student beginning or ending a full-time course of study or training in part of any month will be considered to be pursuing such course for the entire month.
(3) A child is considered not to have ceased to be a student:
(i) During any interim between school years, if the interim does not exceed 4 months and the child shows to the satisfaction of the Office that he or she has a bona fide intention of continuing to pursue a full-time course of study or training; or
(ii) During periods of reasonable duration in which, in the judgment of the Office, the child is prevented by factors beyond the child's control from pursuing his or her education.
(4) A student whose 23rd birthday occurs during a semester or the enrollment period in which such student is pursuing a full-time course of study or training shall continue to be considered a student until the end of such period, unless eligibility is otherwise terminated.
Augmented benefits payable on behalf of a spouse or divorced spouse, or a child, shall begin with the first month in which the dependent satisfies the conditions of relationship and dependency set forth in this subpart. Augmentation of benefits on account of a dependent continues through the month before the month in which the dependent ceases to satisfy these conditions, except in the case of a child who qualifies as a dependent because such child is a student. In the latter case, benefits continue to be augmented through the month before the first month during no part of which such child qualifies as a student.
With respect to the spouse or child of a miner entitled to benefits, and with respect to the child of a surviving spouse entitled to benefits, the determination as to whether an individual purporting to be a spouse or child is related to or dependent upon such miner or surviving spouse shall be based on the facts and circumstances present in each case, at the appropriate time.
(a) An individual who is the surviving spouse or surviving divorced spouse of a miner is eligible for benefits if such individual:
(1) Is not married;
(2) Was dependent on the miner at the pertinent time; and
(3) The deceased miner either:
(i) Was receiving benefits under section 415 or part C of title IV of the Act at the time of death as a result of a claim filed prior to January 1, 1982; or
(ii) Is determined as a result of a claim filed prior to January 1, 1982, to have been totally disabled due to pneumoconiosis at the time of death or to have died due to pneumoconiosis. A surviving spouse or surviving divorced spouse of a miner whose claim is filed on or after January 1, 1982, must establish that the deceased miner's death was due to pneumoconiosis in order to establish entitlement to benefits, except where entitlement is established under § 718.306 of part 718 on a claim filed prior to June 30, 1982.
(b) If more than one spouse meets the conditions of entitlement prescribed in paragraph (a), then each spouse will be considered a beneficiary for purposes of section 412(a)(2) of the Act without regard to the existence of any other entitled spouse or spouses.
(a) An individual is entitled to benefits as a surviving spouse, or as a surviving divorced spouse, for each month beginning with the first month in which all of the conditions of entitlement prescribed in § 725.212 are satisfied.
(b) The last month for which such individual is entitled to such benefits is the month before the month in which either of the following events first occurs:
(1) The surviving spouse or surviving divorced spouse marries; or
(2) The surviving spouse or surviving divorced spouse dies.
(c) A surviving spouse or surviving divorced spouse whose entitlement to benefits has been terminated pursuant to § 725.213(b)(1) may thereafter again become entitled to such benefits upon filing application for such reentitlement, beginning with the first month after the marriage ends and such individual meets the requirements of § 725.212. The individual shall not be required to reestablish the miner's entitlement to benefits (§ 725.212(a)(3)(i)) or the miner's death due to pneumoconiosis (§ 725.212(a)(3)(ii)).
An individual shall be considered to be the surviving spouse of a miner if:
(a) The courts of the State in which the miner was domiciled (see § 725.231) at the time of his or her death would find that the individual and the miner were validly married; or
(b) The courts of the State in which the miner was domiciled (see § 725.231) at the time of the miner's death would find that the individual was the miner's surviving spouse; or
(c) Under State law, such individual would have the right of the spouse to share in the miner's intestate personal property; or
(d) Such individual went through a marriage ceremony with the miner, resulting in a purported marriage between them which, but for a legal impediment (see § 725.230), would have been a valid marriage, unless such individual entered into the purported marriage with knowledge that it was not a valid marriage, or if such individual and the miner were not living in the same household at the time of the miner's death.
An individual who is the miner's surviving spouse (see § 725.214) shall be determined to have been dependent on the miner if, at the time of the miner's death:
(a) The individual was living with the miner (see § 725.232); or
(b) The individual was dependent upon the miner for support or the miner has been ordered by a court to contribute to such individual's support (see § 725.233); or
(c) The individual was living apart from the miner because of the miner's desertion or other reasonable cause; or
(d) The individual is the natural parent of the miner's son or daughter; or
(e) The individual had legally adopted the miner's son or daughter while the individual was married to the miner and while such son or daughter was under the age of 18; or
(f) The individual was married to the miner at the time both of them legally adopted a child under the age of 18; or
(g)(1) The individual was married to the miner for a period of not less than 9 months immediately before the day on which the miner died, unless the miner's death:
(i) Is accidental (as defined in paragraph (g)(2) of this section), or
(ii) Occurs in line of duty while the miner is a member of a uniformed service serving on active duty (as defined in § 404.1019 of this title), and the surviving spouse was married to the miner for a period of not less than 3 months immediately prior to the day on which such miner died.
(2) For purposes of paragraph (g)(1)(i) of this section, the death of a miner is accidental if such individual received bodily injuries solely through violent, external, and accidental means, and as a direct result of the bodily injuries and independently of all other causes, dies not later than 3 months after the day on which such miner receives such bodily injuries. The term “accident” means an event that was unpremeditated and unforeseen from the standpoint of the deceased individual. To determine whether the death of an individual did, in fact, result from an accident the adjudication officer will consider all the circumstances surrounding the casualty. An intentional and voluntary suicide will not be considered to be death by accident; however, suicide by an individual who is so incompetent as to be incapable of acting intentionally and voluntarily will be considered to be a death by accident. In no event will the death of an individual resulting from violent and external causes be considered a suicide unless there is direct proof that the fatal injury was self-inflicted.
(3) The provisions of paragraph (g) shall not apply if the adjudication officer determines that at the time of the marriage involved, the miner would not reasonably have been expected to live for 9 months.
An individual will be considered to be the surviving divorced spouse of a deceased miner in a claim considered under this part or reviewed under part 727 of this subchapter (see § 725.4(d)), if such individual's marriage to the miner had been terminated by a final divorce on or after the 10th anniversary of the marriage unless, if such individual was married to and divorced from the miner more than once, such individual was married to such miner in each calendar year of the period beginning 10 years immediately before the date on which any divorce became final and ending with the year in which the divorce became final.
An individual who is the miner's surviving divorced spouse (see § 725.216) shall be determined to have been dependent on the miner if, for the month before the month in which the miner died:
(a) The individual was receiving at least one-half of his or her support from the miner (see § 725.233(g)); or
(b) The individual was receiving substantial contributions from the miner pursuant to a written agreement (see § 725.233(c) and (f)); or
(c) A court order required the miner to furnish substantial contributions to the individual's support (see § 725.233(c) and (e)).
(a) An individual is entitled to benefits where he or she meets the required standards of relationship and dependency under this subpart (see § 725.220 and § 725.221) and is the child of a deceased miner who:
(1) Was receiving benefits under section 415 or part C of title IV of the Act as a result of a claim filed prior to January 1, 1982, or
(2) Is determined as a result of a claim filed prior to January 1, 1982, to have been totally disabled due to pneumoconiosis at the time of death, or to have died due to pneumoconiosis. A surviving dependent child of a miner whose claim is filed on or after January 1, 1982, must establish that the miner's death was due to pneumoconiosis in order to establish entitlement to benefits, except where entitlement is established under § 718.306 of this subchapter on a claim filed prior to June 30, 1982.
(b) A child is not entitled to benefits for any month for which a miner, or the surviving spouse or surviving divorced spouse of a miner, establishes entitlement to benefits.
(a) An individual is entitled to benefits as a child for each month beginning with the first month in which all of the conditions of entitlement prescribed in § 725.218 are satisfied.
(b) The last month for which such individual is entitled to such benefits is the month before the month in which any one of the following events first occurs:
(1) The child dies;
(2) The child marries;
(3) The child attains age 18; and
(i) Is not a student (as defined in § 725.209(b)) during any part of the month in which the child attains age 18; and
(ii) Is not under a disability (as defined in § 725.209(a)(2)(ii)) at that time;
(4) If the child's entitlement beyond age 18 is based on his or her status as a student, the earlier of:
(i) The first month during no part of which the child is a student; or
(ii) The month in which the child attains age 23 and is not under a disability (as defined in § 725.209(a)(2)(ii)) at that time;
(5) If the child's entitlement beyond age 18 is based on disability, the first month in no part of which such individual is under a disability.
(c) A child whose entitlement to benefits terminated with the month before the month in which the child attained age 18, or later, may thereafter (provided such individual is not married) again become entitled to such benefits upon filing application for such reentitlement, beginning with the first month after termination of benefits in which such individual is a student and has not attained the age of 23.
(d) A child whose entitlement to benefits has been terminated pursuant to § 725.219(b)(2) may thereafter again become entitled to such benefits upon filing application for such reentitlement, beginning with the first month after the marriage ends and such individual meets the requirements of § 725.218. The individual shall not be required to reestablish the miner's entitlement to benefits (§ 725.218(a)(1)) or the miner's death due to pneumoconiosis (§ 725.212(a)(2)).
For purposes of determining whether an individual may qualify for benefits as the child of a deceased miner, the provisions of § 725.208 shall be applicable. As used in this section, the term “beneficiary” means only a surviving spouse entitled to benefits at the time of such surviving spouse's death (see § 725.212), or a miner. For purposes of a survivor's claim, an individual will be considered to be a child of a beneficiary if:
(a) The courts of the State in which such beneficiary is domiciled (see § 725.231) would find, under the law they would apply in determining the devolution of the beneficiary's intestate personal property, that the individual is the beneficiary's child; or
(b) Such individual is the legally adopted child of such beneficiary; or
(c) Such individual is the stepchild of such beneficiary by reason of a valid marriage of such individual's parent or adopting parent to such beneficiary; or
(d) Such individual does not bear the relationship of child to such beneficiary under paragraph (a), (b), or (c) of this section, but would, under State law, have the same right as a child to share in the beneficiary's intestate personal property; or
(e) Such individual is the natural son or daughter of a beneficiary but does not bear the relationship of child to such beneficiary under paragraph (a), (b), or (c) of this section, and is not considered to be the child of the beneficiary under paragraph (d) of this section, such individual shall nevertheless be considered to be the child of such beneficiary if the beneficiary and the mother or father, as the case may be, of such individual went through a marriage ceremony resulting in a purported marriage between them which but for a legal impediment (see § 725.230) would have been a valid marriage; or
(f) Such individual is the natural son or daughter of a beneficiary but does not have the relationship of child to such beneficiary under paragraph (a), (b), or (c) of this section, and is not considered to be the child of the beneficiary under paragraph (d) or (e) of this section, such individual shall nevertheless be considered to be the child of such beneficiary if:
(1) Such beneficiary, prior to his or her entitlement to benefits, has acknowledged in writing that the individual is his or her son or daughter, or has been decreed by a court to be the father or mother of the individual, or has been ordered by a court to contribute to the support of the individual (see § 725.233(a)) because the individual is a son or daughter; or
(2) Such beneficiary is shown by satisfactory evidence to be the father or mother of the individual and was living with or contributing to the support of the individual at the time such beneficiary became entitled to benefits.
For the purposes of determining whether a child was dependent upon a deceased miner, the provisions of § 725.209 shall be applicable, except that for purposes of determining the eligibility of a child who is under a disability as defined in section 223(d) of the Social Security Act, such disability must have begun before the child attained age 22, or in the case of a student, before the child ceased to be a student.
(a) An individual is eligible for benefits as a surviving parent, brother or sister if all of the following requirements are met:
(1) The individual is the parent, brother, or sister of a deceased miner;
(2) The individual was dependent on the miner at the pertinent time;
(3) Proof of support is filed within 2 years after the miner's death, unless the time is extended for good cause (§ 725.226);
(4) In the case of a brother or sister, such individual also:
(i) Is under 18 years of age; or
(ii) Is under a disability as defined in section 223(d) of the Social Security Act, 42 U.S.C. 423(d), which began
(iii) Is a student (see § 725.209(b)); or
(iv) Is under a disability as defined in section 223(d) of the Social Security Act, 42 U.S.C. 423(d), at the time of the miner's death;
(5) The deceased miner:
(i) Was entitled to benefits under section 415 or part C of title IV of the Act as a result of a claim filed prior to January 1, 1982; or
(ii) Is determined as a result of a claim filed prior to January 1, 1982, to have been totally disabled due to pneumoconiosis at the time of death or to have died due to pneumoconiosis. A surviving dependent parent, brother or sister of a miner whose claim is filed on or after January 1, 1982, must establish that the miner's death was due to pneumoconiosis in order to establish entitlement to benefits, except where entitlement is established under § 718.306 of part 718 on a claim filed prior to June 30, 1982.
(b)(1) A parent is not entitled to benefits if the deceased miner was survived by a spouse or child at the time of such miner's death.
(2) A brother or sister is not entitled to benefits if the deceased miner was survived by a spouse, child, or parent at the time of such miner's death.
(a) A parent, sister, or brother is entitled to benefits beginning with the month all the conditions of entitlement described in § 725.222 are met.
(b) The last month for which such parent is entitled to benefits is the month in which the parent dies.
(c) The last month for which such brother or sister is entitled to benefits is the month before the month in which any of the following events first occurs:
(1) The individual dies;
(2)(i) The individual marries or remarries; or
(ii) If already married, the individual received support in any amount from his or her spouse;
(3) The individual attains age 18; and
(i) Is not a student (as defined in § 725.209(b)) during any part of the month in which the individual attains age 18; and
(ii) Is not under a disability (as defined in § 725.209(a)(2)(ii)) at that time;
(4) If the individual's entitlement beyond age 18 is based on his or her status as a student, the earlier of:
(i) The first month during no part of which the individual is a student; or
(ii) The month in which the individual attains age 23 and is not under a disability (as defined in § 725.209(a)(2)(ii)) at that time;
(5) If the individual's entitlement beyond age 18 is based on disability, the first month in no part of which such individual is under a disability.
(a) An individual will be considered to be the parent, brother, or sister of a miner if the courts of the State in which the miner was domiciled (see § 225.231) at the time of death would find, under the law they would apply, that the individual is the miner's parent, brother, or sister.
(b) Where, under State law, the individual is not the miner's parent, brother, or sister, but would, under State law, have the same status (
An individual who is the miner's parent, brother, or sister will be determined to have been dependent on the miner if, during the 1-year period immediately prior to the miner's death:
(a) The individual and the miner were living in the same household (see § 725.232); and
(b) The individual was totally dependent on the miner for support (see § 725.233(h)).
(a)
(1) Circumstances beyond the individual's control, such as extended illness, mental, or physical incapacity, or communication difficulties; or
(2) Incorrect or incomplete information furnished the individual by the Office; or
(3) Efforts by the individual to secure supporting evidence without a realization that such evidence could be submitted after filing proof of support.
(b)
The determination as to whether an individual purporting to be an entitled survivor of a miner or beneficiary was related to, or dependent upon, the miner is made after such individual files a claim for benefits as a survivor. Such determination is based on the facts and circumstances with respect to a reasonable period of time ending with the miner's death. A prior determination that such individual was, or was not, a dependent for the purposes of augmenting the miner's benefits for a certain period, is not determinative of the issue of whether the individual is a dependent survivor of such miner.
An individual who has been convicted of the felonious and intentional homicide of a miner or other beneficiary shall not be entitled to receive any benefits payable because of the death of such miner or other beneficiary, and such person shall be considered nonexistent in determining the entitlement to benefits of other individuals.
References in this subpart to the “same right to share in the intestate personal property” of a deceased miner (or surviving spouse) refer to the right of an individual to share in such distribution in the individual's own right and not the right of representation.
For purposes of this subpart, “legal impediment” means an impediment resulting from the lack of dissolution of a previous marriage or otherwise arising out of such previous marriage or its dissolution or resulting from a defect in the procedure followed in connection with the purported marriage ceremony—for example, the solemnization of a marriage only through a religious ceremony in a country which requires a civil ceremony for a valid marriage.
(a) For purposes of this subpart, the term “domicile” means the place of an individual's true, fixed, and permanent home.
(b) The domicile of a deceased miner or surviving spouse is determined as of the time of death.
(c) If an individual was not domiciled in any State at the pertinent time, the
(a)
(2) The term “living in the miner's household” as used in section 412(a)(5) of the Act (with respect to a parent, brother, or sister) means that the miner and such parent, brother, or sister were sharing the same residence.
(b)
(1) If such absence was due to service in the Armed Forces of the United States; or
(2) If the period of absence from his or her residence did not exceed 6 months and the absence was due to business or employment reasons, or because of confinement in a penal institution or in a hospital, nursing home, or other curative institution; or
(3) In any other case, if the evidence establishes that despite such absence they nevertheless reasonably expected to resume physically living together.
(c)
(2) The determination as to whether a spouse is a “member of the same household” as the miner shall be based upon the facts and circumstances with respect to the period or periods of time as to which the issue of membership in the same household is material.
(3) The determination as to whether a parent, brother, or sister was “living in the miner's household” shall take account of the 1-year period immediately prior to the miner's death.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(a) Any person who believes he or she may be entitled to benefits under the Act may file a claim in accordance with this subpart.
(b) A claimant who has attained the age of 18, is mentally competent and physically able, may file a claim on his or her own behalf.
(c) If a claimant is unable to file a claim on his or her behalf because of a legal or physical impairment, the following rules shall apply:
(1) A claimant between the ages of 16 and 18 years who is mentally competent and not under the legal custody or care of another person, or a committee or institution, may upon filing a statement to the effect, file a claim on his or her own behalf. In any other case where the claimant is under 18 years of age, only a person, or the manager or principal officer of an institution having legal custody or care of the claimant may file a claim on his or her behalf.
(2) If a claimant over 18 years of age has a legally appointed guardian or committee, only the guardian or committee may file a claim on his or her behalf.
(3) If a claimant over 18 years of age is mentally incompetent or physically unable to file a claim and is under the care of another person, or an institution, only the person, or the manager or principal officer of the institution responsible for the care of the claimant, may file a claim on his or her behalf.
(4) For good cause shown, the Office may accept a claim executed by a person other than one described in paragraphs (c)(2) or (3) of this section.
(d) Except as provided in § 725.305, in order for a claim to be considered, the claimant must be alive at the time the claim is filed.
A person filing a claim on behalf of a claimant shall submit evidence of his or her authority to so act at the time of filing or at a reasonable time thereafter in accordance with the following:
(a) A legally appointed guardian or committee shall provide the Office with certification of appointment by a proper official of the court.
(b) Any other person shall provide a statement describing his or her relationship to the claimant, the extent to which he or she has care of the claimant, or his or her position as an officer of the institution of which the claimant is an inmate. The Office may, at any time, require additional evidence to establish the authority of any such person.
(a)(1) Claims for benefits shall be delivered, mailed to, or presented at, any of the various district offices of the Social Security Administration, or any of the various offices of the Department of Labor authorized to accept claims, or, in the case of a claim filed by or on behalf of a claimant residing outside the United States, mailed or presented to any office maintained by the Foreign Service of the United States. A claim shall be considered filed on the day it is received by the office in which it is first filed.
(2) A claim submitted to a Foreign Service Office or any other agency or subdivision of the U.S. Government shall be forwarded to the Office and considered filed as of the date it was received at the Foreign Service Office or other governmental agency or unit.
(b) A claim submitted by mail shall be considered filed as of the date of delivery unless a loss or impairment of benefit rights would result, in which case a claim shall be considered filed as of the date of its postmark. In the absence of a legible postmark, other evidence may be used to establish the mailing date.
(a) Claims shall be filed on forms prescribed and approved by the Office. The district office at which the claim is filed will assist claimants in completing their forms.
(b) If the place at which a claim is filed is an office of the Social Security Administration, such office shall forward the completed claim form to an office of the DCMWC, which is authorized to process the claim.
(a) The filing of a statement signed by an individual indicating an intention to claim benefits shall be considered to be the filing of a claim for the purposes of this part under the following circumstances:
(1) The claimant or a proper person on his or her behalf (see § 725.301) executes and files a prescribed claim form with the Office during the claimant's lifetime within the period specified in paragraph (b) of this section.
(2) Where the claimant dies within the period specified in paragraph (b) of this section without filing a prescribed claim form, and a person acting on behalf of the deceased claimant's estate executes and files a prescribed claim form within the period specified in paragraph (c) of this section.
(b) Upon receipt of a written statement indicating an intention to claim benefits, the Office shall notify the signer in writing that to be considered the claim must be executed by the claimant or a proper party on his or her behalf on the prescribed form and filed with the Office within six months from the date of mailing of the notice.
(c) If before the notice specified in paragraph (b) of this section is sent, or within six months after such notice is sent, the claimant dies without having executed and filed a prescribed form, or without having had one executed and filed in his or her behalf, the Office shall upon receipt of notice of the claimant's death advise his or her estate, or those living at his or her last known address, in writing that for the claim to be considered, a prescribed claim form must be executed and filed by a person authorized to do so on behalf of the claimant's estate within six months of the date of the later notice.
(d) Claims based upon written statements indicating an intention to claim benefits not perfected in accordance with this section shall not be processed.
(a) A claimant or an individual authorized to execute a claim on a claimant's behalf or on behalf of claimant's estate under § 725.305, may withdraw a previously filed claim provided that:
(1) He or she files a written request with the appropriate adjudication officer indicating the reasons for seeking withdrawal of the claim;
(2) The appropriate adjudication officer approves the request for withdrawal on the grounds that it is in the best interests of the claimant or his or her estate, and;
(3) Any payments made to the claimant in accordance with § 725.522 are reimbursed.
(b) When a claim has been withdrawn under paragraph (a) of this section, the claim will be considered not to have been filed.
At any time prior to approval, a request for withdrawal may be canceled by a written request of the claimant or a person authorized to act on the claimant's behalf or on behalf of the claimant's estate.
(a) A claim for benefits filed under this part by, or on behalf of, a miner shall be filed within three years after a medical determination of total disability due to pneumoconiosis which has been communicated to the miner or a person responsible for the care of the miner, or within three years after the date of enactment of the Black Lung Benefits Reform Act of 1977, whichever is later. There is no time limit on the filing of a claim by the survivor of a miner.
(b) A miner who is receiving benefits under part B of title IV of the Act and who is notified by HEW of the right to seek medical benefits may file a claim for medical benefits under part C of title IV of the Act and this part. The Secretary of Health, Education, and Welfare is required to notify each miner receiving benefits under part B of this right. Notwithstanding the provisions of paragraph (a) of this section, a miner notified of his or her rights under this paragraph may file a claim under this part on or before December 31, 1980. Any claim filed after that date shall be untimely unless the time for filing has been enlarged for good cause shown.
(c) There shall be a rebuttable presumption that every claim for benefits is timely filed. However, except as provided in paragraph (b) of this section, the time limits in this section are mandatory and may not be waived or tolled except upon a showing of extraordinary circumstances.
(a) A claimant whose claim for benefits was previously approved under part B of title IV of the Act may file a claim for benefits under this part as provided in §§ 725.308(b) and 725.702.
(b) If a claimant files a claim under this part while another claim filed by the claimant under this part is still pending, the later claim shall be merged with the earlier claim for all purposes. For purposes of this section, a claim shall be considered pending if it has not yet been finally denied.
(c) If a claimant files a claim under this part within one year after the effective date of a final order denying a claim previously filed by the claimant under this part (see § 725.502(a)(2)), the later claim shall be considered a request for modification of the prior denial and shall be processed and adjudicated under § 725.310.
(d) If a claimant files a claim under this part more than one year after the effective date of a final order denying a claim previously filed by the claimant under this part (see § 725.502(a)(2)), the later claim shall be considered a subsequent claim for benefits. A subsequent claim shall be processed and adjudicated in accordance with the provisions of subparts E and F of this part, except that the claim shall be denied unless the claimant demonstrates that one of the applicable conditions of entitlement (see §§ 725.202(d) (miner), 725.212 (spouse), 725.218 (child), and 725.222 (parent, brother, or sister)) has changed since the date upon which the order denying the prior claim became final. The applicability of this paragraph may be waived by the operator or fund, as appropriate. The following additional rules shall apply to the adjudication of a subsequent claim:
(1) Any evidence submitted in connection with any prior claim shall be made a part of the record in the subsequent claim, provided that it was not excluded in the adjudication of the prior claim.
(2) For purposes of this section, the applicable conditions of entitlement shall be limited to those conditions upon which the prior denial was based. For example, if the claim was denied solely on the basis that the individual was not a miner, the subsequent claim must be denied unless the individual worked as a miner following the prior denial. Similarly, if the claim was denied because the miner did not meet one or more of the eligibility criteria contained in part 718 of this subchapter, the subsequent claim must be denied unless the miner meets at least one of the criteria that he or she did not meet previously.
(3) If the applicable condition(s) of entitlement relate to the miner's physical condition, the subsequent claim may be approved only if new evidence submitted in connection with the subsequent claim establishes at least one applicable condition of entitlement. A subsequent claim filed by a surviving spouse, child, parent, brother, or sister shall be denied unless the applicable conditions of entitlement in such claim include at least one condition unrelated to the miner's physical condition at the time of his death.
(4) If the claimant demonstrates a change in one of the applicable conditions of entitlement, no findings made in connection with the prior claim, except those based on a party's failure to contest an issue (see § 725.463), shall be binding on any party in the adjudication of the subsequent claim. However, any stipulation made by any party in connection with the prior claim shall be binding on that party in the adjudication of the subsequent claim.
(5) In any case in which a subsequent claim is awarded, no benefits may be paid for any period prior to the date upon which the order denying the prior claim became final.
(e) Notwithstanding any other provision of this part or part 727 of this subchapter (see § 725.4(d)), a person may exercise the right of review provided in paragraph (c) of § 727.103 at the same time such person is pursuing an appeal of a previously denied part B claim under the law as it existed prior to March 1, 1978. If the part B claim is ultimately approved as a result of the appeal, the claimant must immediately notify the Secretary of Labor and, where appropriate, the coal mine operator, and all duplicate payments made under part C shall be considered an overpayment and arrangements shall be made to insure the repayment of such overpayments to the fund or an operator, as appropriate.
(f) In any case involving more than one claim filed by the same claimant, under no circumstances are duplicate benefits payable for concurrent periods of eligibility. Any duplicate benefits paid shall be subject to collection or offset under subpart H of this part.
(a) Upon his or her own initiative, or upon the request of any party on grounds of a change in conditions or because of a mistake in a determination of fact, the district director may, at any time before one year from the date of the last payment of benefits, or at any time before one year after the denial of a claim, reconsider the terms of an award or denial of benefits.
(b) Modification proceedings shall be conducted in accordance with the provisions of this part as appropriate, except that the claimant and the operator, or group of operators or the fund, as appropriate, shall each be entitled to submit no more than one additional chest X-ray interpretation, one additional pulmonary function test, one additional arterial blood gas study, and one additional medical report in support of its affirmative case along with such rebuttal evidence and additional statements as are authorized by paragraphs (a)(2)(ii) and (a)(3)(ii) of § 725.414. Modification proceedings shall not be initiated before an administrative law judge or the Benefits Review Board.
(c) At the conclusion of modification proceedings before the district director, the district director may issue a proposed decision and order (§ 725.418) or, if appropriate, deny the claim by reason of abandonment (§ 725.409). In any case in which the district director has initiated modification proceedings on his own initiative to alter the terms of an award or denial of benefits issued by an administrative law judge, the district director shall, at the conclusion of modification proceedings, forward the claim for a hearing (§ 725.421). In any case forwarded for a hearing, the administrative law judge assigned to hear such case shall consider whether any additional evidence submitted by the parties demonstrates a change in condition and, regardless of whether the parties have submitted new evidence, whether the evidence of record demonstrates a mistake in a determination of fact.
(d) An order issued following the conclusion of modification proceedings may terminate, continue, reinstate, increase or decrease benefit payments or award benefits. Such order shall not affect any benefits previously paid, except that an order increasing the amount of benefits payable based on a finding of a mistake in a determination of fact may be made effective on the date from which benefits were determined payable by the terms of an earlier award. In the case of an award which is decreased, no payment made in excess of the decreased rate prior to the date upon which the party requested reconsideration under paragraph (a) of this section shall be subject to collection or offset under subpart H of this part, provided the claimant is without fault as defined by § 725.543. In the case of an award which is decreased following the initiation of modification by the district director, no payment made in excess of the decreased rate prior to the date upon which the district director initiated modification proceedings under paragraph (a) shall be subject to collection or offset under subpart H of this part, provided the claimant is without fault as defined by § 725.543. In the case of an award which has become final and is thereafter terminated, no payment made prior to the date upon which the party requested reconsideration under paragraph (a) shall be subject to collection or offset under subpart H of this part. In the case of an award which has become final and is thereafter terminated following the initiation of modification by the district director, no payment made prior to the date upon which the district director initiated modification proceedings
(a) Unless otherwise specified by this part, all requests, responses, notices, decisions, orders, or other communications required or permitted by this part shall be in writing.
(b) If required by this part, any document, brief, or other statement submitted in connection with the adjudication of a claim under this part shall be sent to each party to the claim by the submitting party. If proof of service is required with respect to any communication, such proof of service shall be submitted to the appropriate adjudication officer and filed as part of the claim record.
(c) In computing any period of time described in this part, by any applicable statute, or by the order of any adjudication officer, the day of the act or event from which the designated period of time begins to run shall not be included. The last day of the period shall be included unless it is a Saturday, Sunday, or legal holiday, in which event the period extends until the next day which is not a Saturday, Sunday, or legal holiday. “Legal holiday” includes New Year's Day, Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, Christmas Day and any other day appointed as a holiday by the President or the Congress of the United States.
(d) In computing any period of time described in this part in which the period within which to file a response commences upon receipt of a document, it shall be presumed, in the absence of evidence to the contrary, that the document was received on the seventh day after it was mailed. In any case in which a provision of this part requires a document to be sent to a person or party by certified mail, and the document is not sent by certified mail, but the person or party actually received the document, the document shall be deemed to have been sent in compliance with the provisions of this part. In such a case, any time period which commences upon the service of the document shall commence on the date the document was received.
(a)
(b)
(c)
(a)
(1) Make determinations with respect to claims as is provided in this part;
(2) Conduct conferences and informal discovery proceedings as provided in this part;
(3) Compel the production of documents by the issuance of a subpoena;
(4) Prepare documents for the signature of parties;
(5) Issue appropriate orders as provided in this part; and
(6) Do all other things necessary to enable him or her to discharge the duties of the office.
(b) Administrative Law Judge. An administrative law judge is authorized to:
(1) Conduct formal hearings in accordance with the provisions of this part;
(2) Administer oaths and examine witnesses;
(3) Compel the production of documents and appearance of witnesses by the issuance of subpoenas;
(4) Issue decisions and orders with respect to claims as provided in this part; and
(5) Do all other things necessary to enable him or her to discharge the duties of the office.
(c) If any person in proceedings before an adjudication officer disobeys or resists any lawful order or process, or misbehaves during a hearing or so near the place thereof as to obstruct the same, or neglects to produce, after having been ordered to do so, any pertinent book, paper or document, or refuses to appear after having been subpoenaed, or upon appearing refuses to take the oath as a witness, or after having taken the oath refuses to be examined according to law, the district director, or the administrative law judge responsible for the adjudication of the claim, shall certify the facts to the Federal district court having jurisdiction in the place in which he or she is sitting (or to the U.S. District Court for the District of Columbia if he or she is sitting in the District) which shall thereupon in a summary manner hear the evidence as to the acts complained of, and, if the evidence so warrants, punish such person in the same manner and to the same extent as for a contempt committed before the court, or commit such person upon the same condition as if the doing of the forbidden act had occurred with reference to the process or in the presence of the court.
(a) No adjudication officer shall conduct any proceedings in a claim in which he or she is prejudiced or partial, or where he or she has any interest in the matter pending for decision. A decision to withdraw from the consideration of a claim shall be within the discretion of the adjudication officer. If that adjudication officer withdraws, another officer shall be designated by the Director or the Chief Administrative Law Judge, as the case may be, to complete the adjudication of the claim.
(b) No adjudication officer shall be permitted to appear or act as a representative of a party under this part while such individual is employed as an adjudication officer. No adjudication officer shall be permitted at any time to appear or act as a representative in connection with any case or claim in which he or she was personally involved. No fee or reimbursement shall be awarded under this part to an individual who acts in violation of this paragraph.
(c) No adjudication officer shall act in any claim involving a party which employed such adjudication officer within one year before the adjudication of such claim.
(d) Notwithstanding paragraph (a) of this section, no adjudication officer shall be permitted to act in any claim involving a party who is related to the adjudication officer by consanguinity or affinity within the third degree as determined by the law of the place where such party is domiciled. Any action taken by an adjudication officer in knowing violation of this paragraph shall be void.
(a) Except as provided in § 725.361, no person other than the Secretary of Labor and authorized personnel of the Department of Labor shall participate at any stage in the adjudication of a claim for benefits under this part, unless such person is determined by the appropriate adjudication officer to qualify under the provisions of this section as a party to the claim. The following persons shall be parties:
(1) The claimant;
(2) A person other than a claimant, authorized to execute a claim on such claimant's behalf under § 725.301;
(3) Any coal mine operator notified under § 725.407 of its possible liability for the claim;
(4) Any insurance carrier of such operator; and
(5) The Director in all proceedings relating to a claim for benefits under this part.
(b) A widow, child, parent, brother, or sister, or the representative of a decedent's estate, who makes a showing in writing that his or her rights with respect to benefits may be prejudiced by a decision of an adjudication officer, may be made a party.
(c) Any coal mine operator or prior operator or insurance carrier which has not been notified under § 725.407 and which makes a showing in writing that its rights may be prejudiced by a decision of an adjudication officer may be made a party.
(d) Any other individual may be made a party if that individual's rights with respect to benefits may be prejudiced by a decision to be made.
At the discretion of the Chief Administrative Law Judge or the administrative law judge assigned to the case, a person or entity which is not a party may be allowed to participate amicus curiae in a formal hearing only as to an issue of law. A person may participate amicus curiae in a formal hearing upon written request submitted with supporting arguments prior to the hearing. If the request is granted, the administrative law judge hearing the case will inform the party of the extent to which participation will be permitted. The request may, however, be denied summarily and without explanation.
(a) Except for the Secretary of Labor, whose interests shall be represented by the Solicitor of Labor or his or her designee, each of the parties may appoint an individual to represent his or her interest in any proceeding for determination of a claim under this part. Such appointment shall be made in writing or on the record at the hearing. An attorney qualified in accordance with § 725.363(a) shall file a written declaration that he or she is authorized to represent a party, or declare his or her representation on the record at a formal hearing. Any other person (see § 725.363(b)) shall file a written notice of appointment signed by the party or his or her legal guardian, or enter his or her appearance on the record at a formal hearing if the party he or she seeks to represent is present and consents to the representation. Any written declaration or notice required by this section shall include the OWCP number assigned by the Office and shall be sent to the Office or, for representation at a formal hearing, to the Chief Administrative Law Judge. In any case, such representative must be qualified under § 725.363. No authorization for representation or agreement between a claimant and representative as to the amount of a fee, filed with the Social Security Administration in connection with a claim under part B of title IV of the Act, shall be valid under this part. A claimant who has previously authorized a person to represent him or her in connection with a claim originally filed under part B of title IV may renew such authorization by filing a statement to such effect with the Office or appropriate adjudication officer.
(b) Any party may waive his or her right to be represented in the adjudication of a claim. If an adjudication officer determines, after an appropriate inquiry has been made, that a claimant who has been informed of his or her right to representation does not wish to obtain the services of a representative, such adjudication officer shall proceed to consider the claim in accordance with this part, unless it is apparent that the claimant is, for any reason, unable to continue without the help of a representative. However, it shall not be necessary for an adjudication officer to inquire as to the ability of a claimant to proceed without representation in any adjudication taking place without a hearing. The failure of a claimant to obtain representation in an adjudication taking place without a hearing shall be considered a waiver of the claimant's right to representation. However, at any time during the processing or adjudication of a claim, any claimant may revoke such waiver and obtain a representative.
(a)
A representative, appointed and qualified as provided in §§ 725.362 and 725.363, may make or give on behalf of the party he or she represents, any request or notice relative to any proceeding before an adjudication officer, including formal hearing and review, except that such representative may not execute a claim for benefits, unless he or she is a person designated in § 725.301 as authorized to execute a claim. A representative shall be entitled to present or elicit evidence and make allegations as to facts and law in any proceeding affecting the party represented and to obtain information with respect to the claim of such party to the same extent as such party. Notice given to any party of any administrative action, determination, or decision, or request to any party for the production of evidence shall be sent to the representative of such party and such notice or request shall have the same force and effect as if it had been sent to the party represented.
No fee charged for representation services rendered to a claimant with respect to any claim under this part shall be valid unless approved under this subpart. No contract or prior agreement for a fee shall be valid. In cases where the obligation to pay the attorney's fee is upon the claimant, the amount of the fee awarded may be made a lien upon the benefits due under an award and the adjudication officer shall fix, in the award approving the fee, such lien and the manner of payment of the fee. Any representative who is not an attorney may be awarded a fee for services under this subpart, except that no lien may be imposed with respect to such representative's fee.
(a) A representative seeking a fee for services performed on behalf of a claimant shall make application therefor to the district director, administrative law judge, or appropriate appellate tribunal, as the case may be, before whom the services were performed. The application shall be filed and served upon the claimant and all other parties within the time limits allowed by the district director, administrative law judge, or appropriate appellate tribunal. The application shall be supported by a complete statement of the extent and character of the necessary work done, and shall indicate the professional status (
(b) Any fee approved under paragraph (a) of this section shall be reasonably commensurate with the necessary work done and shall take into account the quality of the representation, the qualifications of the representative, the complexity of the legal issues involved, the level of proceedings to which the claim was raised, the level at which the representative entered the proceedings, and any other information which may be relevant to the amount of fee requested. No fee approved shall include payment for time spent in preparation of a fee application. No fee shall be approved for work done on claims filed between December 30, 1969, and June 30, 1973, under part B of title IV of the Act, except for services rendered on behalf of the claimant in regard to the review of the claim under section 435 of the Act and part 727 of this subchapter (see § 725.4(d)).
(c) In awarding a fee, the appropriate adjudication officer shall consider, and shall add to the fee, the amount of reasonable and unreimbursed expenses incurred in establishing the claimant's case. Reimbursement for travel expenses incurred by an attorney shall be determined in accordance with the provisions of § 725.459(a). No reimbursement shall be permitted for expenses incurred in obtaining medical or other evidence which has previously been submitted to the Office in connection with the claim.
(d) Upon receipt of a request for approval of a fee, such request shall be reviewed and evaluated by the appropriate adjudication officer and a fee award issued. Any party may request reconsideration of a fee awarded by the adjudication officer. A revised or modified fee award may then be issued, if appropriate.
(e) Each request for reconsideration or review of a fee award shall be in writing and shall contain supporting statements or information pertinent to any increase or decrease requested. If a fee awarded by a district director is disputed, such award shall be appealable directly to the Benefits Review Board. In such a fee dispute case, the record before the Board shall consist of the order of the district director awarding or denying the fee, the application for a fee, any written statement in opposition to the fee and the documentary evidence contained in the file which verifies or refutes any item claimed in the fee application.
(a) An attorney who represents a claimant in the successful prosecution of a claim for benefits may be entitled to collect a reasonable attorney's fee from the responsible operator that is ultimately found liable for the payment of benefits, or, in a case in which there is no operator who is liable for the payment of benefits, from the fund. Generally, the operator or fund liable for the payment of benefits shall be liable for the payment of the claimant's attorney's fees where the operator or fund, as appropriate, took action, or acquiesced in action, that created an adversarial relationship between itself and the claimant. The fees payable under this section shall include reasonable fees for necessary services performed prior to the creation of the adversarial relationship. Circumstances in which a successful attorney's fees shall be payable by the responsible operator or the fund include, but are not limited to, the following:
(1) The responsible operator designated by the district director (see § 725.410(a)(3)) fails to accept the claimant's entitlement to benefits within the 30-day period provided by § 725.412(b) and is ultimately determined to be liable for benefits. The operator shall be liable for an attorney's fee with respect to all necessary services performed by the claimant's attorney;
(2) There is no operator that may be held liable for the payment of benefits, and the district director issues a schedule for the submission of additional evidence under § 725.410. The fund shall be liable for an attorney's fee with respect to all necessary services performed by the claimant's attorney;
(3) The claimant submits a bill for medical treatment, and the party liable for the payment of benefits declines to pay the bill on the grounds that the treatment is unreasonable, or is for a condition that is not compensable. The responsible operator or fund, as appropriate, shall be liable for an attorney's fee with respect to all necessary services performed by the claimant's attorney;
(4) A beneficiary seeks an increase in the amount of benefits payable, and the responsible operator or fund contests the claimant's right to that increase. If the beneficiary is successful in securing an increase in the amount of benefits payable, the operator or fund shall be liable for an attorney's fee with respect to all necessary services performed by the beneficiary's attorney;
(5) The responsible operator or fund seeks a decrease in the amount of benefits payable. If the beneficiary is successful in resisting the request for a decrease in the amount of benefits payable, the operator or fund shall be liable for an attorney's fee with respect to all necessary services performed by the beneficiary's attorney. A request for information clarifying the amount of benefits payable shall not be considered a request to decrease that amount.
(b) Any fee awarded under this section shall be in addition to the award of benefits, and shall be awarded, in an order, by the district director, administrative law judge, Board or court, before whom the work was performed. The operator or fund shall pay such fee promptly and directly to the claimant's attorney in a lump sum after the award of benefits becomes final.
(c) Section 205(a) of the Black Lung Benefits Amendments of 1981, Public Law 97-119, amended section 422 of the Act and relieved operators and carriers from liability for the payment of benefits on certain claims. Payment of benefits on those claims was made the responsibility of the fund. The claims subject to this transfer of liability are described in § 725.496. On claims subject to the transfer of liability described in this paragraph the fund will pay all fees and costs which have been or will be awarded to claimant's attorneys which were or would have become the liability of an operator or carrier but for the enactment of the 1981 Amendments and which have not already been paid by such operator or carrier. Section 9501(d)(7) of the
After a claim has been received by the district director, the district director shall take such action as is necessary to develop, process, and make determinations with respect to the claim as provided in this subpart.
If a district director determines that any claim filed under this part is one subject to adjudication under a workers' compensation law approved under part 722 of this subchapter, he or she shall advise the claimant of this determination and of the Act's requirement that the claim must be filed under the applicable State workers' compensation law. The district director shall then prepare a proposed decision and order dismissing the claim for lack of jurisdiction pursuant to § 725.418 and proceed as appropriate.
(a)
(b)
(c)
(d)
(a) Upon receipt of a claim, the district director shall ascertain whether the claim was filed by or on account of a miner as defined in § 725.202, and in the case of a claim filed on account of a deceased miner, whether the claim was filed by an eligible survivor of such miner as defined in subpart B of this part.
(b) In the case of a claim filed by or on behalf of a miner, the district director shall, where necessary, schedule the miner for a medical examination and testing under § 725.406.
(c) In the case of a claim filed by or on behalf of a survivor of a miner, the district director shall obtain whatever medical evidence is necessary and available for the development and evaluation of the claim.
(d) The district director shall, where appropriate, collect other evidence necessary to establish:
(1) The nature and duration of the miner's employment; and
(2) All other matters relevant to the determination of the claim.
(e) If at any time during the processing of the claim by the district director, the evidence establishes that the claimant is not entitled to benefits under the Act, the district director may terminate evidentiary development of the claim and proceed as appropriate.
(a) The Act requires the Department to provide each miner who applies for benefits with the opportunity to undergo a complete pulmonary evaluation at no expense to the miner. A complete pulmonary evaluation includes a report of physical examination, a pulmonary function study, a chest roentgenogram and, unless medically contraindicated, a blood gas study.
(b) As soon as possible after a miner files an application for benefits, the district director will provide the miner with a list of medical facilities and physicians in the state of the miner's residence and states contiguous to the state of the miner's residence that the Office has authorized to perform complete pulmonary evaluations. The miner shall select one of the facilities or physicians on the list,
(c) If any medical examination or test conducted under paragraph (a) of this section is not administered or reported in substantial compliance with the provisions of part 718 of this subchapter, or does not provide sufficient information to allow the district director to decide whether the miner is eligible for benefits, the district director shall schedule the miner for further examination and testing. Where the deficiencies in the report are the result of a lack of effort on the part of the miner, the miner will be afforded one additional opportunity to produce a satisfactory result. In order to determine whether any medical examination or test was administered and reported in substantial compliance with the provisions of part 718 of this subchapter, the district director may have any component of such examination or test reviewed by a physician selected by the district director.
(d) After the physician completes the report authorized by paragraph (a), the district director will inform the miner that he may elect to have the results of the objective testing sent to his treating physician for use in preparing a medical opinion. The district director will also inform the claimant that any medical opinion submitted by his treating physician will count as one of the two medical opinions that the miner may submit under § 725.414 of this part.
(e) The cost of any medical examination or test authorized under this section, including the cost of travel to and from the examination, shall be paid by the fund. No reimbursement for overnight accommodations shall be authorized unless the district director determines that an adequate testing facility is unavailable within one day's round trip travel by automobile from the miner's residence. The fund shall be reimbursed for such payments by an operator, if any, found liable for the payment of benefits to the claimant. If an operator fails to repay such expenses, with interest, upon request of the Office, the entire amount may be collected in
(a) Upon receipt of the miner's employment history, the district director shall investigate whether any operator may be held liable for the payment of benefits as a responsible operator in accordance with the criteria contained in Subpart G of this part.
(b) The district director may identify one or more operators potentially liable for the payment of benefits in accordance with the criteria set forth in § 725.495 of this part. The district director shall notify each such operator of the existence of the claim. Where the records maintained by the Office pursuant to part 726 of this subchapter indicate that the operator had obtained a policy of insurance, and the claim falls within such policy, the notice provided pursuant to this section shall also be sent to the operator's carrier. Any operator or carrier notified of the claim shall thereafter be considered a party to the claim in accordance with § 725.360 of this part unless it is dismissed by an adjudication officer and is not thereafter notified again of its potential liability.
(c) The notification issued pursuant to this section shall include a copy of the claimant's application and a copy of all evidence obtained by the district director relating to the miner's employment. The district director may request the operator to answer specific questions, including, but not limited to, questions related to the nature of its operations, its relationship with the miner, its financial status, including any insurance obtained to secure its obligations under the Act, and its relationship with other potentially liable operators. A copy of any notification issued pursuant to this section shall be sent to the claimant by regular mail.
(d) If at any time before a case is referred to the Office of Administrative Law Judges, the district director determines that an operator which may be liable for the payment of benefits has not been notified under this section or has been incorrectly dismissed pursuant to § 725.410(a)(3), the district director shall give such operator notice of its potential liability in accordance with this section. The adjudication officer shall then take such further action on the claim as may be appropriate. There shall be no time limit applicable to a later identification of an operator under this paragraph if the operator fraudulently concealed its identity as an employer of the miner. The district director may not notify additional operators of their potential liability after a case has been referred to the Office of Administrative Law Judges, unless the case was referred for a hearing to determine whether the claim was properly denied as abandoned pursuant to § 725.409.
(a)(1) An operator which receives notification under § 725.407 shall, within 30 days of receipt, file a response indicating its intent to accept or contest its identification as a potentially liable operator. The operator's response shall also be sent to the claimant by regular mail.
(2) If the operator contests its identification, it shall, on a form supplied by the district director, state the precise nature of its disagreement by admitting or denying each of the following assertions. In answering these assertions, the term “operator” shall include any operator for which the identified operator may be considered a successor operator pursuant to § 725.492.
(i) That the named operator was an operator for any period after June 30, 1973;
(ii) That the operator employed the miner as a miner for a cumulative period of not less than one year;
(iii) That the miner was exposed to coal mine dust while working for the operator;
(iv) That the miner's employment with the operator included at least one working day after December 31, 1969; and
(v) That the operator is capable of assuming liability for the payment of benefits.
(3) An operator which receives notification under § 725.407, and which fails to file a response within the time limit provided by this section, shall not be allowed to contest its liability for the payment of benefits on any of the grounds set forth in paragraph (a)(2).
(b)(1) Within 90 days of the date on which it receives notification under § 725.407, an operator may submit documentary evidence in support of its position.
(2) No documentary evidence relevant to the grounds set forth in paragraph (a)(2) may be admitted in any further proceedings unless it is submitted within the time limits set forth in this section.
(a) A claim may be denied at any time by the district director by reason of abandonment where the claimant fails:
(1) To undergo a required medical examination without good cause; or,
(2) To submit evidence sufficient to make a determination of the claim; or,
(3) To pursue the claim with reasonable diligence; or,
(4) To attend an informal conference without good cause.
(b)(1) If the district director determines that a denial by reason of abandonment under paragraphs (a)(1) through (3) of this section is appropriate, he or she shall notify the claimant of the reasons for such denial and of the action which must be taken to avoid a denial by reason of abandonment. If the claimant completes the action requested within the time allowed, the claim shall be developed, processed and adjudicated as specified in this part. If the claimant does not fully comply with the action requested by the district director, the district director shall notify the claimant that the claim has been denied by reason of abandonment. Such notification shall be served on the claimant and all other parties to the claim by certified mail.
(2) In any case in which a claimant has failed to attend an informal conference and has not provided the district director with his reasons for failing to attend, the district director shall ask the claimant to explain his absence. In considering whether the claimant had good cause for his failure to attend the conference, the district director shall consider all relevant circumstances, including the age, education, and health of the claimant, as well as the distance between the claimant's residence and the location of the conference. If the district director concludes that the claimant had good cause for failing to attend the conference, he may continue processing the claim, including, where appropriate under § 725.416, the scheduling of an informal conference. If the claimant does not supply the district director with his reasons for failing to attend the conference within 30 days of the date of the district director's request, or the district director concludes that the reasons supplied by the claimant do not establish good cause, the district director shall notify the claimant that the claim has been denied by reason of abandonment. Such notification shall be served on the claimant and all other parties to the claim by certified mail.
(c) The denial of a claim by reason of abandonment shall become effective and final unless, within 30 days after the denial is issued, the claimant requests a hearing. Following the expiration of the 30-day period, a new claim may be filed at any time pursuant to § 725.309. For purposes of § 725.309,
(a) After the district director completes the development of medical evidence under § 725.405 of this part, including the complete pulmonary evaluation authorized by § 725.406, and receives the responses and evidence submitted pursuant to § 725.408, he shall issue a schedule for the submission of additional evidence. The schedule shall contain the following information:
(1) If the claim was filed by, or on behalf of, a miner, the schedule shall contain a summary of the complete pulmonary evaluation administered pursuant to § 725.406. If the claim was filed by, or on behalf of, a survivor, the schedule shall contain a summary of any medical evidence developed by the district director pursuant to § 725.405(c).
(2) The schedule shall contain the district director's preliminary analysis of the medical evidence. If the district director believes that the evidence fails to establish any necessary element of entitlement, he shall inform the claimant of the element of entitlement not established and the reasons for his conclusions and advise the claimant that, unless he submits additional evidence, the district director will issue a proposed decision and order denying the claim.
(3) The schedule shall contain the district director's designation of a responsible operator liable for the payment of benefits. In the event that the district director has designated as the responsible operator an employer other than the employer who last employed the claimant as a miner, the district director shall include, with the schedule, a copy of the statements required by § 725.495(d) of this part. The district director may, in his discretion, dismiss as parties any of the operators notified of their potential liability pursuant to § 725.407. If the district director thereafter determines that the participation of a party dismissed pursuant to this section is required, he may once again notify the operator in accordance with § 725.407(d).
(4) The schedule shall notify the claimant and the designated responsible operator that they have the right to obtain further adjudication of the claim in accordance with this subpart, and that they have the right to submit additional evidence in accordance with this subpart. The schedule shall also notify the claimant that he has the right to obtain representation, under the terms set forth in subpart D, in order to assist him. In a case in which the district director has designated a responsible operator pursuant to paragraph (a)(3), the schedule shall further notify the claimant that if the operator fails to accept the claimant's entitlement to benefits within the time limit provided by § 725.412, the cost of obtaining additional medical and other necessary evidence, along with a reasonable attorney's fee, shall be reimbursed by the responsible operator in the event that the claimant establishes his entitlement to benefits payable by that operator. In a case in which there is no operator liable for the payment of benefits, the schedule shall notify the claimant that the cost of obtaining additional medical and other necessary evidence, along with a reasonable attorney's fee, shall be reimbursed by the fund.
(b) The schedule shall allow all parties not less than 60 days within which to submit additional evidence, including evidence relevant to the claimant's eligibility for benefits and evidence relevant to the liability of the designated responsible operator, and shall provide not less than an additional 30 days within which the parties may respond to evidence submitted by other parties. Any such evidence must meet the requirements set forth in § 725.414 in order to be admitted into the record.
(c) The district director shall serve a copy of the schedule, together with a copy of all of the evidence developed, on the claimant, the designated responsible operator, and all other operators which received notification pursuant to § 725.407. The schedule shall be served on each party by certified mail.
Notwithstanding the requirements of § 725.410 of this part, if the district director concludes that the results of the complete pulmonary evaluation support a finding of eligibility, and that there is no operator responsible for the payment of benefits, the district director shall issue a proposed decision and order in accordance with § 725.418 of this part.
(a)(1) Within 30 days after the district director issues a schedule pursuant to § 725.410 of this part containing a designation of the responsible operator liable for the payment of benefits, that operator shall file a response with regard to its liability. The response shall specifically indicate whether the operator agrees or disagrees with the district director's designation.
(2) If the responsible operator designated by the district director does not file a timely response, it shall be deemed to have accepted the district director's designation with respect to its liability, and to have waived its right to contest its liability in any further proceeding conducted with respect to the claim.
(b) The responsible operator designated by the district director may also file a statement accepting claimant's entitlement to benefits. If that operator fails to file a timely response to the district director's designation, the district director shall, upon receipt of such a statement, issue a proposed decision and order in accordance with § 725.418 of this part. If the operator fails to file a statement accepting the claimant's entitlement to benefits within 30 days after the district director issues a schedule pursuant to § 725.410 of this part, the operator shall be deemed to have contested the claimant's entitlement.
(a)
(1) For purposes of this section, a medical report shall consist of a physician's written assessment of the miner's respiratory or pulmonary condition. A medical report may be prepared by a physician who examined the miner and/or reviewed the available admissible evidence. A physician's written assessment of a single objective test, such as a chest X-ray or a pulmonary function test, shall not be considered a medical report for purposes of this section.
(2)(i) The claimant shall be entitled to submit, in support of his affirmative case, no more than two chest X-ray interpretations, the results of no more than two pulmonary function tests, the results of no more than two arterial
(ii) The claimant shall be entitled to submit, in rebuttal of the case presented by the party opposing entitlement, no more than one physician's interpretation of each chest X-ray, pulmonary function test, arterial blood gas study, autopsy or biopsy submitted by the designated responsible operator or the fund, as appropriate, under paragraph (a)(3)(i) or (a)(3)(iii) of this section and by the Director pursuant to § 725.406. In any case in which the party opposing entitlement has submitted the results of other testing pursuant to § 718.107, the claimant shall be entitled to submit one physician's assessment of each piece of such evidence in rebuttal. In addition, where the responsible operator or fund has submitted rebuttal evidence under paragraph (a)(3)(ii) or (a)(3)(iii) of this section with respect to medical testing submitted by the claimant, the claimant shall be entitled to submit an additional statement from the physician who originally interpreted the chest X-ray or administered the objective testing. Where the rebuttal evidence tends to undermine the conclusion of a physician who prepared a medical report submitted by the claimant, the claimant shall be entitled to submit an additional statement from the physician who prepared the medical report explaining his conclusion in light of the rebuttal evidence.
(3)(i) The responsible operator designated pursuant to § 725.410 shall be entitled to obtain and submit, in support of its affirmative case, no more than two chest X-ray interpretations, the results of no more than two pulmonary function tests, the results of no more than two arterial blood gas studies, no more than one report of an autopsy, no more than one report of each biopsy, and no more than two medical reports. Any chest X-ray interpretations, pulmonary function test results, blood gas studies, autopsy report, biopsy report, and physicians' opinions that appear in a medical report must each be admissible under this paragraph or paragraph (a)(4) of this section. In obtaining such evidence, the responsible operator may not require the miner to travel more than 100 miles from his or her place of residence, or the distance traveled by the miner in obtaining the complete pulmonary evaluation provided by § 725.406 of this part, whichever is greater, unless a trip of greater distance is authorized in writing by the district director. If a miner unreasonably refuses—
(A) To provide the Office or the designated responsible operator with a complete statement of his or her medical history and/or to authorize access to his or her medical records, or
(B) To submit to an evaluation or test requested by the district director or the designated responsible operator, the miner's claim may be denied by reason of abandonment. (See § 725.409 of this part).
(ii) The responsible operator shall be entitled to submit, in rebuttal of the case presented by the claimant, no more than one physician's interpretation of each chest X-ray, pulmonary function test, arterial blood gas study, autopsy or biopsy submitted by the claimant under paragraph (a)(2)(i) of this section and by the Director pursuant to § 725.406. In any case in which the claimant has submitted the results of other testing pursuant to § 718.107, the responsible operator shall be entitled to submit one physician's assessment of each piece of such evidence in rebuttal. In addition, where the claimant has submitted rebuttal evidence under paragraph (a)(2)(ii) of this section, the responsible operator shall be entitled to submit an additional statement from the physician who originally interpreted the chest X-ray or administered the objective testing. Where the rebuttal evidence tends to undermine the conclusion of a physician who prepared a medical report submitted by the responsible operator, the responsible operator shall be entitled to submit an additional statement from the physician who prepared the medical report explaining his conclusion in light of the rebuttal evidence.
(iii) In a case in which the district director has not identified any potentially liable operators, or has dismissed all potentially liable operators under § 725.410(a)(3), the district director shall be entitled to exercise the rights of a responsible operator under this section, except that the evidence obtained in connection with the complete pulmonary evaluation performed pursuant to § 725.406 shall be considered evidence obtained and submitted by the Director, OWCP, for purposes of paragraph (a)(3)(i) of this section. In a case involving a dispute concerning medical benefits under § 725.708 of this part, the district director shall be entitled to develop medical evidence to determine whether the medical bill is compensable under the standard set forth in § 725.701 of this part.
(4) Notwithstanding the limitations in paragraphs (a)(2) and (a)(3) of this section, any record of a miner's hospitalization for a respiratory or pulmonary or related disease, or medical treatment for a respiratory or pulmonary or related disease, may be received into evidence.
(5) A copy of any documentary evidence submitted by a party must be served on all other parties to the claim. If the claimant is not represented by an attorney, the district director shall mail a copy of all documentary evidence submitted by the claimant to all other parties to the claim. Following the development and submission of affirmative medical evidence, the parties may submit rebuttal evidence in accordance with the schedule issued by the district director.
(b)
(2) Any other party may submit evidence regarding the liability of the designated responsible operator or any other operator.
(3) A copy of any documentary evidence submitted under this paragraph must be mailed to all other parties to the claim. Following the submission of affirmative evidence, the parties may submit rebuttal evidence in accordance with the schedule issued by the district director.
(c)
(d) Except to the extent permitted by § 725.456 and § 725.310(b), the limitations set forth in this section shall apply to all proceedings conducted with respect to a claim, and no documentary evidence pertaining to liability shall be admitted in any further proceeding conducted with respect to a claim unless it is submitted to the district director in accordance with this section.
(a) At the end of the period permitted under § 725.410(b) for the submission of evidence, the district director shall review the claim on the basis of all evidence submitted in accordance with § 725.414.
(b) After review of all evidence submitted, the district director may issue another schedule for the submission of additional evidence pursuant to § 725.410, identifying another potentially liable operator as the responsible operator liable for the payment of benefits. In such a case, the district director shall not permit the development or submission of any additional medical evidence until after he has made a final determination of the identity of the responsible operator liable for the payment of benefits. If the operator who is finally determined to be the responsible operator has not had the opportunity to submit medical evidence pursuant to § 725.410, the district director shall allow the designated responsible operator and the claimant not less than 60 days within which to submit evidence relevant to the claimant's eligibility for benefits. The designated responsible operator may elect to adopt any medical evidence previously submitted by another operator as its own evidence, subject to the limitations of § 725.414. The district director may also schedule a conference in accordance with § 725.416, issue a proposed decision and order in accordance with § 725.418, or take such other action as the district director considers appropriate.
(a) At the conclusion of the period permitted by § 725.410(b) of this part for the submission of evidence, the district director may conduct an informal conference in any claim where it appears that such conference will assist in the voluntary resolution of any issue raised with respect to the claim. The conference proceedings shall not be stenographically reported and sworn testimony shall not be taken. Any conference conducted pursuant to this paragraph shall be held no later than 90 days after the conclusion of the period permitted by § 725.410(b) of this part for the submission of evidence, unless one of the parties requests that the time period be extended for good cause shown. If the district director is unable to hold the conference within the time period permitted by this paragraph, he shall proceed to issue a proposed decision and order under § 725.418 of this part.
(b) The district director shall notify the parties of a definite time and place for the conference. The district director shall advise the parties that they have a right to representation at the conference, by an attorney or a lay representative, and that no conference shall take place unless the parties are represented. A coal mine operator which is self-insured, or which is covered by a policy of insurance for the claim for which a conference is scheduled, shall be deemed to be represented. The notification shall set forth the specific reasons why the district director believes that a conference will assist in the voluntary resolution of any issue raised with respect to the claim. No sanction may be imposed under paragraph (c) of this section unless the record contains a notification that meets the requirements of this section. The district director may in his or her discretion, or on the motion of any party, cancel a conference or allow any or all of the parties to participate by telephone.
(c) The unexcused failure of any party to appear at an informal conference shall be grounds for the imposition of sanctions. If the claimant fails to appear, the district director may take such steps as are authorized by § 725.409(b)(2) to deny the claim by reason of abandonment. If the responsible operator fails to appear, it shall be deemed to have waived its right to contest its potential liability for an award of benefits and, in the discretion of the district director, its right to contest any issue related to the claimant's eligibility.
(d) Any representative of an operator, of an operator's insurance carrier, or of a claimant, authorized to represent such party in accordance with paragraph (b), shall be deemed to have sufficient authority to stipulate facts or issues or agree to a final disposition of the claim.
(e) Procedures to be followed at a conference shall be within the discretion of the district director.
(a) At the conclusion of a conference, the district director shall prepare a stipulation of contested and uncontested issues which shall be signed by the parties and the district director. If a hearing is conducted with respect to the claim, this stipulation shall be submitted to the Office of Administrative Law Judges and placed in the claim record.
(b) In appropriate cases, the district director may permit a reasonable time for the submission of additional evidence following a conference, provided that such evidence does not exceed the limits set forth in § 725.414. The district director may also notify additional operators of their potential liability pursuant to § 725.407, or issue another schedule for the submission of additional evidence pursuant to § 725.410, designating another potentially liable operator as the responsible operator liable for the payment of benefits, in order to allow that operator an opportunity to submit evidence relevant to its liability for benefits as well as the claimant's eligibility for benefits.
(c) Within 20 days after the termination of all conference proceedings, the district director shall prepare and send to the parties a proposed decision and order pursuant to § 725.418 of this part.
(a) Within 20 days after the termination of all informal conference proceedings, or, if no informal conference is held, at the conclusion of the period permitted by § 725.410(b) for the submission of evidence, the district director shall issue a proposed decision and order. A proposed decision and order is a document, issued by the district director after the evidentiary development of the claim is completed and all contested issues, if any, are joined, which purports to resolve a claim on the basis of the evidence submitted to or obtained by the district director. A proposed decision and order shall be considered a final adjudication of a claim only as provided in § 725.419. A proposed decision and order may be issued by the district director at any time during the adjudication of any claim if:
(1) Issuance is authorized or required by this part; or,
(2) The district director determines that its issuance will expedite the adjudication of the claim.
(b) A proposed decision and order shall contain findings of fact and conclusions of law. It shall be served on all parties to the claim by certified mail.
(c) The proposed decision and order shall contain a notice of the right of any interested party to request a formal hearing before the Office of Administrative Law Judges. If the proposed decision and order is a denial of benefits, and the claimant has previously filed a request for a hearing, the proposed decision and order shall notify the claimant that the case will be referred for a hearing pursuant to the previous request unless the claimant notifies the district director that he no longer desires a hearing. If the proposed decision and order is an award of benefits, and the designated responsible operator has previously filed a request for a hearing, the proposed decision and order shall notify the operator that the case will be referred for a hearing pursuant to the previous request unless the operator notifies the district director that it no longer desires a hearing.
(d) The proposed decision and order shall reflect the district director's final designation of the responsible operator liable for the payment of benefits. No operator may be finally designated as the responsible operator unless it has received notification of its potential liability pursuant to § 725.407, and the opportunity to submit additional evidence pursuant to § 725.410. The district director shall dismiss, as parties to the claim, all other potentially liable operators that received notification pursuant to § 725.407 and that were not previously dismissed pursuant to § 725.410(a)(3).
(a) Within 30 days after the date of issuance of a proposed decision and order, any party may, in writing, request a revision of the proposed decision and order or a hearing. If a hearing is requested, the district director shall refer the claim to the Office of Administrative Law Judges (see § 725.421).
(b) Any response made by a party to a proposed decision and order shall specify the findings and conclusions with which the responding party disagrees, and shall be served on the district director and all other parties to the claim.
(c) If a timely request for revision of a proposed decision and order is made, the district director may amend the proposed decision and order, as circumstances require, and serve the revised proposed decision and order on all parties or take such other action as is appropriate. If a revised proposed decision and order is issued, each party to the claim shall have 30 days from the date of issuance of that revised proposed decision and order within which to request a hearing.
(d) If no response to a proposed decision and order is sent to the district director within the period described in paragraph (a) of this section, or if no response to a revised proposed decision and order is sent to the district director within the period described in paragraph (c) of this section, the proposed decision and order shall become a final decision and order, which is effective upon the expiration of the applicable 30-day period. Once a proposed decision and order or revised proposed decision and order becomes final and effective, all rights to further proceedings with respect to the claim shall be considered waived, except as provided in § 725.310.
(a) Section 9501(d)(1)(A)(1) of the Internal Revenue Code (26 U.S.C.) provides that the Black Lung Disability Trust Fund shall begin the payment of benefits on behalf of an operator in any case in which the operator liable for such payments has not commenced payment of such benefits within 30 days after the date of an initial determination of eligibility by the Secretary. For claims filed on or after January 1, 1982, the payment of such interim benefits from the fund is limited to benefits accruing after the date of such initial determination.
(b) Except as provided in § 725.415, after the district director has determined that a claimant is eligible for benefits, on the basis of all evidence submitted by a claimant and operator, and has determined that a hearing will be necessary to resolve the claim, the district director shall in writing so inform the parties and direct the operator to begin the payment of benefits to the claimant in accordance with § 725.522. The date on which this writing is sent to the parties shall be considered the date of initial determination of the claim.
(c) If a notified operator refuses to commence payment of a claim within 30 days from the date on which an initial determination is made under this section, benefits shall be paid by the fund to the claimant in accordance with § 725.522, and the operator shall be liable to the fund, if such operator is determined liable for the claim, for all benefits paid by the fund on behalf of such operator, and, in addition, such penalties and interest as are appropriate.
(a) In any claim for which a formal hearing is requested or ordered, and with respect to which the district director has completed evidentiary development and adjudication without having resolved all contested issues, the district director shall refer the claim to the Office of Administrative Law Judges for a hearing.
(b) In any case referred to the Office of Administrative Law Judges under this section, the district director shall transmit to that office the following documents, which shall be placed in the record at the hearing subject to the objection of any party:
(1) Copies of the claim form or forms;
(2) Any statement, document, or pleading submitted by a party to the claim;
(3) A copy of the notification to an operator of its possible liability for the claim, and any schedule for the submission of additional evidence issued pursuant to § 725.410 designating a potentially liable operator as the responsible operator;
(4) All medical evidence submitted to the district director under this part by the claimant and the potentially liable operator designated as the responsible operator in the proposed decision and order issued pursuant to § 725.418, or the fund, as appropriate, subject to the limitations of § 725.414 of this part; this evidence shall include the results of any medical examination or test conducted pursuant to § 725.406, and all evidence relevant to the liability of the responsible operator submitted to the district director under this part;
(5) Any written stipulation of law or fact or stipulation of contested and uncontested issues entered into by the parties;
(6) Any pertinent forms submitted to the district director;
(7) The statement by the district director of contested and uncontested issues in the claim; and
(8) The district director's initial determination of eligibility or other documents necessary to establish the right of the fund to reimbursement, if appropriate. Copies of the transmittal notice shall also be sent to all parties to the claim by regular mail.
(c) A party may at any time request and obtain from the district director copies of documents transmitted to the Office of Administrative Law Judges under paragraph (b) of this section. If the party has previously been provided with such documents, additional copies
The Secretary or his or her designee may, upon request, provide a claimant with legal assistance in processing a claim under the Act. Such assistance may be made available to a claimant in the discretion of the Solicitor of Labor or his or her designee at any time prior to or during the time in which the claim is being adjudicated and shall be furnished without charge to the claimant. Representation of a claimant in adjudicatory proceedings shall not be provided by the Department of Labor unless it is determined by the Solicitor of Labor that such representation is in the best interests of the black lung benefits program. In no event shall representation be provided to a claimant in a claim with respect to which the claimant's interests are adverse to those of the Secretary of Labor or the fund.
Except for the 30-day time limit set forth in § 725.419, any of the time periods set forth in this subpart may be extended, for good cause shown, by filing a request for an extension with the district director prior to the expiration of the time period.
Any party to a claim (see § 725.360) shall have a right to a hearing concerning any contested issue of fact or law unresolved by the district director. There shall be no right to a hearing until the processing and adjudication of the claim by the district director has been completed. There shall be no right to a hearing in a claim with respect to which a determination of the claim made by the district director has become final and effective in accordance with this part.
After the completion of proceedings before the district director, or as is otherwise indicated in this part, any party may in writing request a hearing on any contested issue of fact or law (see § 725.419). A district director may on his or her own initiative refer a case for hearing. If a hearing is requested, or if a district director determines that a hearing is necessary to the resolution of any issue, the claim shall be referred to the Chief Administrative Law Judge for a hearing under § 725.421.
(a) A hearing held under this part shall be conducted by an administrative law judge designated by the Chief Administrative Law Judge. Except as otherwise provided by this part, all hearings shall be conducted in accordance with the provisions of 5 U.S.C. 554
(b) All parties to a claim shall be permitted to participate fully at a hearing held in connection with such claim.
(c) A full evidentiary hearing need not be conducted if a party moves for summary judgment and the administrative law judge determines that there is no genuine issue as to any material fact and that the moving party is entitled to the relief requested as a matter of law. All parties shall be entitled to respond to the motion for summary judgment prior to decision thereon.
(d) If the administrative law judge believes that an oral hearing is not necessary (for any reason other than on motion for summary judgment), the judge shall notify the parties by written order and allow at least 30 days for the parties to respond. The administrative law judge shall hold the oral hearing if any party makes a timely request in response to the order.
All parties shall be given at least 30 days written notice of the date and place of a hearing and the issues to be resolved at the hearing. Such notice shall be sent to each party or representative by certified mail.
(a) The Chief Administrative Law Judge shall assign a definite time and place for a formal hearing, and shall, where possible, schedule the hearing to be held at a place within 75 miles of the claimant's residence unless an alternate location is requested by the claimant.
(b) If the claimant's residence is not in any State, the Chief Administrative Law Judge may, in his or her discretion, schedule the hearing in the country of the claimant's residence.
(c) The Chief Administrative Law Judge or the administrative law judge assigned the case may in his or her discretion direct that a hearing with respect to a claim shall begin at one location and then later be reconvened at another date and place.
(d) The Chief Administrative Law Judge or administrative law judge assigned the case may change the time and place for a hearing, either on his or her own motion or for good cause shown by a party. The administrative law judge may adjourn or postpone the hearing for good cause shown, at any time prior to the mailing to the parties of the decision in the case. Unless otherwise agreed, at least 10 days notice shall be given to the parties of any change in the time or place of hearing.
(e) The Chief Administrative Law Judge may for good cause shown transfer a case from one administrative law judge to another.
(a)
(b)
(c)
(d)
(a) All documents transmitted to the Office of Administrative Law Judges under § 725.421 shall be placed into evidence by the administrative law judge, subject to objection by any party.
(b)(1) Documentary evidence pertaining to the liability of a potentially liable operator and/or the identification of a responsible operator which was not submitted to the district director shall not be admitted into the hearing record in the absence of extraordinary circumstances. Medical evidence in excess of the limitations contained in § 725.414 shall not be admitted into the hearing record in the absence of good cause.
(2) Subject to the limitations in paragraph (b)(1) of this section, any other documentary material, including medical reports, which was not submitted to the district director, may be received in evidence subject to the objection of any party, if such evidence is sent to all other parties at least 20 days before a hearing is held in connection with the claim.
(3) Documentary evidence, which is not exchanged with the parties in accordance with this paragraph, may be admitted at the hearing with the written consent of the parties or on the record at the hearing, or upon a showing of good cause why such evidence was not exchanged in accordance with this paragraph. If documentary evidence is not exchanged in accordance with paragraph (b)(2) of this section and the parties do not waive the 20-day requirement or good cause is not shown, the administrative law judge shall either exclude the late evidence from the record or remand the claim to the district director for consideration of such evidence.
(4) A medical report which is not made available to the parties in accordance with paragraph (b)(2) of this section shall not be admitted into evidence in any case unless the hearing record is kept open for at least 30 days after the hearing to permit the parties to take such action as each considers appropriate in response to such evidence. If, in the opinion of the administrative law judge, evidence is withheld from the parties for the purpose of delaying the adjudication of the claim, the administrative law judge may exclude such evidence from the hearing record and close the record at the conclusion of the hearing.
(c) Subject to paragraph (b) of this section, documentary evidence which the district director excludes from the record, and the objections to such evidence, may be submitted by the parties to the administrative law judge, who shall independently determine whether the evidence shall be admitted.
(1) If the evidence is admitted, the administrative law judge may, in his or her discretion, remand the claim to the district director for further consideration.
(2) If the evidence is admitted, the administrative law judge shall afford the opposing party or parties the opportunity to develop such additional documentary evidence as is necessary to protect the right of cross-examination.
(d) All medical records and reports submitted by any party shall be considered by the administrative law judge in accordance with the quality standards contained in part 718 of this subchapter.
(e) If the administrative law judge concludes that the complete pulmonary evaluation provided pursuant to § 725.406, or any part thereof, fails to comply with the applicable quality standards, or fails to address the relevant conditions of entitlement (see § 725.202(d)(2)(i) through (iv)) in a manner which permits resolution of the claim, the administrative law judge shall, in his or her discretion, remand the claim to the district director with instructions to develop only such additional evidence as is required, or allow the parties a reasonable time to obtain and submit such evidence, before the termination of the hearing.
(a) Witnesses at the hearing shall testify under oath or affirmation. The administrative law judge and the parties may question witnesses with respect to any matters relevant and material to any contested issue. Any party who intends to present the testimony of an expert witness at a hearing, including any physician, regardless of whether the physician has previously prepared a medical report, shall so notify all other parties to the claim at least 10 days before the hearing. The failure to give notice of the appearance of an expert witness in accordance with this paragraph, unless notice is waived by all parties, shall preclude the presentation of testimony by such expert witness.
(b) No person shall be required to appear as a witness in any proceeding before an administrative law judge at a place more than 100 miles from his or her place of residence, unless the lawful mileage and witness fee for 1 day's attendance is paid in advance of the hearing date.
(c) No person shall be permitted to testify as a witness at the hearing, or pursuant to deposition or interrogatory under § 725.458, unless that person meets the requirements of § 725.414(c).
(1) In the case of a witness offering testimony relevant to the liability of the responsible operator, in the absence of extraordinary circumstances, the witness must have been identified as a potential hearing witness while the claim was pending before the district director.
(2) In the case of a physician offering testimony relevant to the physical condition of the miner, such physician must have prepared a medical report. Alternatively, in the absence of a showing of good cause under § 725.456(b)(1) of this part, a physician may offer testimony relevant to the physical condition of the miner only to the extent that the party offering the physician's testimony has submitted fewer medical reports than permitted by § 725.414. Such physician's opinion shall be considered a medical report subject to the limitations of § 725.414.
(d) A physician whose testimony is permitted under this section may testify as to any other medical evidence of record, but shall not be permitted to testify as to any medical evidence relevant to the miner's condition that is not admissible.
The testimony of any witness or party may be taken by deposition or interrogatory according to the rules of practice of the Federal district court for the judicial district in which the case is pending (or of the U.S. District Court for the District of Columbia if the case is pending in the District or outside the United States), except that at least 30 days prior notice of any deposition shall be given to all parties unless such notice is waived. No post-hearing deposition or interrogatory shall be permitted unless authorized by the administrative law judge upon the motion of a party to the claim. The testimony of any physician which is taken by deposition shall be subject to the limitations on the scope of the testimony contained in § 725.457(d).
(a) A witness testifying at a hearing before an administrative law judge, or whose deposition is taken, shall receive the same fees and mileage as witnesses in courts of the United States. If the witness is an expert, he or she shall be entitled to an expert witness fee. Except as provided in paragraphs (b) and (c) of this section, such fees shall be paid by the proponent of the witness.
(b) If the witness' proponent does not intend to call the witness to appear at a hearing or deposition, any other party may subpoena the witness for cross-examination. The administrative law judge shall authorize the least intrusive and expensive means of cross-examination as he deems appropriate and necessary to the full and true
(c) If a claimant is determined entitled to benefits, there may be assessed as costs against a responsible operator, if any, or the fund, fees and mileage for necessary witnesses attending the hearing at the request of the claimant. Both the necessity for the witness and the reasonableness of the fees of any expert witness shall be approved by the administrative law judge. The amounts awarded against a responsible operator or the fund as attorney's fees, or costs, fees and mileage for witnesses, shall not in any respect affect or diminish benefits payable under the Act.
(d) A claimant shall be considered to be deprived of funds required for ordinary and necessary living expenses for purposes of paragraph (b) of this section where payment of the projected fee and mileage would meet the standards set forth at 20 CFR 404.508.
When two or more hearings are to be held, and the same or substantially similar evidence is relevant and material to the matters at issue at each such hearing, the Chief Administrative Law Judge may, upon motion by any party or on his or her own motion, order that a consolidated hearing be conducted. Where consolidated hearings are held, a single record of the proceedings shall be made and the evidence introduced in one claim may be considered as introduced in the others, and a separate or joint decision shall be made, as appropriate.
(a) If all parties waive their right to appear before the administrative law judge, it shall not be necessary for the administrative law judge to give notice of, or conduct, an oral hearing. A waiver of the right to appear shall be made in writing and filed with the Chief Administrative Law Judge or the administrative law judge assigned to hear the case. Such waiver may be withdrawn by a party for good cause shown at any time prior to the mailing of the decision in the claim. Even though all of the parties have filed a waiver of the right to appear, the administrative law judge may, nevertheless, after giving notice of the time and place, conduct a hearing if he or she believes that the personal appearance and testimony of the party or parties would assist in ascertaining the facts in issue in the claim. Where a waiver has been filed by all parties, and they do not appear before the administrative law judge personally or by representative, the administrative law judge shall make a record of the relevant documentary evidence submitted in accordance with this part and any further written stipulations of the parties. Such documents and stipulations shall be considered the evidence of record in the case and the decision shall be based upon such evidence.
(b) Except as provided in § 725.456(a), the unexcused failure of any party to attend a hearing shall constitute a waiver of such party's right to present evidence at the hearing, and may result in a dismissal of the claim (see § 725.465).
A party may, on the record, withdraw his or her controversion of any or all issues set for hearing. If a party withdraws his or her controversion of all issues, the administrative law judge shall remand the case to the district director for the issuance of an appropriate order.
(a) Except as otherwise provided in this section, the hearing shall be confined to those contested issues which have been identified by the district director (see § 725.421) or any other issue raised in writing before the district director.
(b) An administrative law judge may consider a new issue only if such issue was not reasonably ascertainable by the parties at the time the claim was before the district director. Such new issue may be raised upon application of any party, or upon an administrative law judge's own motion, with notice to all parties, at any time after a claim has been transmitted by the district director to the Office of Administrative Law Judges and prior to decision by an administrative law judge. If a new issue is raised, the administrative law judge may, in his or her discretion, either remand the case to the district director with instructions for further proceedings, hear and resolve the new issue, or refuse to consider such new issue.
(c) If a new issue is to be considered by the administrative law judge, a party may, upon request, be granted an appropriate continuance.
All hearings shall be open to the public and shall be mechanically or stenographically reported. All evidence upon which the administrative law judge relies for decision shall be contained in the transcript of testimony, either directly or by appropriate reference. All medical reports, exhibits, and any other pertinent document or record, either in whole or in material part, introduced as evidence, shall be marked for identification and incorporated into the record.
(a) The administrative law judge may, at the request of any party, or on his or her own motion, dismiss a claim:
(1) Upon the failure of the claimant or his or her representative to attend a hearing without good cause;
(2) Upon the failure of the claimant to comply with a lawful order of the administrative law judge; or
(3) Where there has been a prior final adjudication of the claim or defense to the claim under the provisions of this subchapter and no new evidence is submitted (except as provided in part 727 of this subchapter; see § 725.4(d)).
(b) A party who is not a proper party to the claim (see § 725.360) shall be dismissed by the administrative law judge. The administrative law judge shall not dismiss the operator designated as the responsible operator by the district director, except upon the motion or written agreement of the Director.
(c) In any case where a dismissal of a claim, defense, or party is sought, the administrative law judge shall issue an order to show cause why the dismissal should not be granted and afford all parties a reasonable time to respond to such order. After the time for response has expired, the administrative law
(d) No claim shall be dismissed in a case with respect to which payments prior to final adjudication have been made to the claimant in accordance with § 725.522, except upon the motion or written agreement of the Director.
(a) An order dismissing a claim shall be served on the parties in accordance with § 725.478. The dismissal of a claim shall have the same effect as a decision and order disposing of the claim on its merits, except as provided in paragraph (b) of this section. Such order shall advise the parties of their right to request review by the Benefits Review Board.
(b) Where the Chief Administrative Law Judge or the presiding administrative law judge issues a decision and order dismissing the claim after a show cause proceeding, the district director shall terminate any payments being made to the claimant under § 725.522, and the order of dismissal shall, if appropriate, order the claimant to reimburse the fund for all benefits paid to the claimant.
Hearings are officially terminated when all the evidence has been received, witnesses heard, pleadings and briefs submitted to the administrative law judge, and the transcript of the proceedings has been printed and delivered to the administrative law judge.
Within 20 days after the official termination of the hearing (see § 725.475), the administrative law judge shall issue a decision and order with respect to the claim making an award to the claimant, rejecting the claim, or taking such other action as is appropriate.
(a) Orders adjudicating claims for benefits shall be designated by the term “decision and order” or “supplemental decision and order” as appropriate, followed by a descriptive phrase designating the particular type of order, such as “award of benefits,” “rejection of claim,” “suspension of benefits,” “modification of award.”
(b) A decision and order shall contain a statement of the basis of the order, the names of the parties, findings of fact, conclusions of law, and an award, rejection or other appropriate paragraph containing the action of the administrative law judge, his or her signature and the date of issuance. A decision and order shall be based upon the record made before the administrative law judge.
On the date of issuance of a decision and order under § 725.477, the administrative law judge shall serve the decision and order on all parties to the claim by certified mail. On the same date, the original record of the claim shall be sent to the DCMWC in Washington, D.C. Upon receipt by the DCMWC, the decision and order shall be considered to be filed in the office of the district director, and shall become effective on that date.
(a) A decision and order shall become effective when filed in the office of the district director (see § 725.478), and unless proceedings for suspension or setting aside of such order are instituted within 30 days of such filing, the order shall become final at the expiration of the 30th day after such filing (see § 725.481).
(b) Any party may, within 30 days after the filing of a decision and order under § 725.478, request a reconsideration of such decision and order by the administrative law judge. The procedures to be followed in the reconsideration of a decision and order shall be determined by the administrative law judge.
(c) The time for appeal to the Benefits Review Board shall be suspended during the consideration of a request for reconsideration. After the administrative law judge has issued and filed a denial of the request for reconsideration, or a revised decision and order in accordance with this part, any dissatisfied party shall have 30 days within which to institute proceedings to set aside the decision and order on reconsideration.
(d) Regardless of any defect in service, actual receipt of the decision is sufficient to commence the 30-day period for requesting reconsideration or appealing the decision.
A party who is dissatisfied with a decision and order which has become final in accordance with § 725.479 may request a modification of the decision and order if the conditions set forth in § 725.310 are met.
Any party dissatisfied with a decision and order issued by an administrative law judge may, before the decision and order becomes final (see § 725.479), appeal the decision and order to the Benefits Review Board. A notice of appeal shall be filed with the Board. Proceedings before the Board shall be conducted in accordance with part 802 of this title.
(a) Any person adversely affected or aggrieved by a final order of the Benefits Review Board may obtain a review of that order in the U.S. court of appeals for the circuit in which the injury occurred by filing in such court within 60 days following the issuance of such Board order a written petition praying that the order be modified or set aside. The payment of the amounts required by an award shall not be stayed pending final decision in any such proceeding unless ordered by the court. No stay shall be issued unless the court finds that irreparable injury would otherwise ensue to an operator or carrier.
(b) The Director, Office of Workers' Compensation Program, as designee of the Secretary of Labor responsible for the administration and enforcement of the Act, shall be considered the proper party to appear and present argument on behalf of the Secretary of Labor in all review proceedings conducted pursuant to this part and the Act, either as petitioner or respondent.
If a United States court having jurisdiction of proceedings regarding any claim or final decision and order, determines that the proceedings have been instituted or continued before such court without reasonable ground, the costs of such proceedings shall be assessed against the party who has so instituted or continued such proceedings.
(a) One of the major purposes of the black lung benefits amendments of 1977 was to provide a more effective means of transferring the responsibility for the payment of benefits from the Federal government to the coal industry with respect to claims filed under this part. In furtherance of this goal, a Black Lung Disability Trust Fund financed by the coal industry was established by the Black Lung Benefits Revenue Act of 1977. The primary purpose of the Fund
(b) The provisions of this subpart define the term “operator” and prescribe the manner in which the identity of an operator which may be liable for the payment of benefits—referred to herein as a “responsible operator”—will be determined.
(a) For purposes of this part, the term “operator” shall include:
(1) Any owner, lessee, or other person who operates, controls, or supervises a coal mine, or any independent contractor performing services or construction at such mine; or
(2) Any other person who:
(i) Employs an individual in the transportation of coal or in coal mine construction in or around a coal mine, to the extent such individual was exposed to coal mine dust as a result of such employment (see § 725.202);
(ii) In accordance with the provisions of § 725.492, may be considered a successor operator; or
(iii) Paid wages or a salary, or provided other benefits, to an individual in exchange for work as a miner (see § 725.202).
(b) The terms “owner,” “lessee,” and “person” shall include any individual, partnership, association, corporation, firm, subsidiary of a corporation, or other organization, as appropriate, except that an officer of a corporation shall not be considered an “operator” for purposes of this part. Following the issuance of an order awarding benefits against a corporation that has not secured its liability for benefits in accordance with section 423 of the Act and § 726.4, such order may be enforced against the president, secretary, or treasurer of the corporation in accordance with subpart I of this part.
(c) The term “independent contractor” shall include any person who contracts to perform services. Such contractor's status as an operator shall not be contingent upon the amount or percentage of its work or business related to activities in or around a mine, nor upon the number or percentage of its employees engaged in such activities.
(d) For the purposes of determining whether a person is or was an operator that may be found liable for the payment of benefits under this part, there shall be a rebuttable presumption that during the course of an individual's employment with such employer, such individual was regularly and continuously exposed to coal mine dust during the course of employment. The presumption may be rebutted by a showing that the employee was not exposed to coal mine dust for significant periods during such employment.
(e) The operation, control, or supervision referred to in paragraph (a)(1) of this section may be exercised directly or indirectly. Thus, for example, where a coal mine is leased, and the lease empowers the lessor to make decisions with respect to the terms and conditions under which coal is to be extracted or prepared, such as, but not limited to, the manner of extraction or preparation or the amount of coal to be produced, the lessor may be considered an operator. Similarly, any parent entity or other controlling business entity may be considered an operator for purposes of this part, regardless of the nature of its business activities.
(f) Neither the United States, nor any State, nor any instrumentality or agency of the United States or any State, shall be considered an operator.
(a) Any person who, on or after January 1, 1970, acquired a mine or mines, or substantially all of the assets thereof, from a prior operator, or acquired the coal mining business of such prior operator, or substantially all of the assets thereof, shall be considered a “successor operator” with respect to any miners previously employed by such prior operator.
(b) The following transactions shall also be deemed to create successor operator liability:
(1) If an operator ceases to exist by reason of a reorganization which involves a change in identity, form, or place of business or organization, however effected;
(2) If an operator ceases to exist by reason of a liquidation into a parent or successor corporation; or
(3) If an operator ceases to exist by reason of a sale of substantially all its assets, or as a result of merger, consolidation, or division.
(c) In any case in which a transaction specified in paragraph (b), or substantially similar to a transaction specified in paragraph (b), took place, the resulting entity shall be considered a “successor operator” with respect to any miners previously employed by such prior operator.
(d) This section shall not be construed to relieve a prior operator of any liability if such prior operator meets the conditions set forth in § 725.494. If the prior operator does not meet the conditions set forth in § 725.494, the following provisions shall apply:
(1) In any case in which a prior operator transferred a mine or mines, or substantially all of the assets thereof, to a successor operator, or sold its coal mining business or substantially all of the assets thereof, to a successor operator, and then ceased to exist within the terms of paragraph (b), the successor operator as identified in paragraph (a) shall be primarily liable for the payment of benefits to any miners previously employed by such prior operator.
(2) In any case in which a prior operator transferred mines, or substantially all of the assets thereof, to more than one successor operator, the successor operator that most recently acquired a mine or mines or assets from the prior operator shall be primarily liable for the payment of benefits to any miners previously employed by such prior operator.
(3) In any case in which a mine or mines, or substantially all the assets thereof, have been transferred more than once, the successor operator that most recently acquired such mine or mines or assets shall be primarily liable for the payment of benefits to any miners previously employed by the original prior operator. If the most recent successor operator does not meet the criteria for a potentially liable operator set forth in § 725.494, the next most recent successor operator shall be liable.
(e) An “acquisition,” for purposes of this section, shall include any transaction by which title to the mine or mines, or substantially all of the assets thereof, or the right to extract or prepare coal at such mine or mines, becomes
(a)(1) In determining the identity of a responsible operator under this part, the terms “employ” and “employment” shall be construed as broadly as possible, and shall include any relationship under which an operator retains the right to direct, control, or supervise the work performed by a miner, or any other relationship under which an operator derives a benefit from the work performed by a miner. Any individuals who participate with one or more persons in the mining of coal, such as owners, proprietors, partners, and joint venturers, whether they are compensated by wages, salaries, piece rates, shares, profits, or by any other means, shall be deemed employees. It is the specific intention of this paragraph to disregard any financial arrangement or business entity devised by the actual owners or operators of a coal mine or coal mine-related enterprise to avoid the payment of benefits to miners who, based upon the economic reality of their relationship to this enterprise, are, in fact, employees of the enterprise.
(2) The payment of wages or salary shall be prima facie evidence of the right to direct, control, or supervise an individual's work. The Department intends that where the operator who paid a miner's wages or salary meets the criteria for a potentially liable operator set forth in § 725.494, that operator shall be primarily liable for the payment of any benefits due the miner as a result of such employment. The absence of such payment, however, will not negate the existence of an employment relationship. Thus, the Department also intends that where the person who paid a miner's wages may not be considered a potentially liable operator, any other operator who retained the right to direct, control or supervise the work performed by the miner, or who benefitted from such work, may be considered a potentially liable operator.
(b) This paragraph contains examples of relationships that shall be considered employment relationships for purposes of this part. The list is not intended to be exclusive.
(1) In any case in which an operator may be considered a successor operator, as determined in accordance with § 725.492, any employment with a prior operator shall also be deemed to be employment with the successor operator. In a case in which the miner was not independently employed by the successor operator, the prior operator shall remain primarily liable for the payment of any benefits based on the miner's employment with the prior operator. In a case in which the miner was independently employed by the successor operator after the transaction giving rise to successor operator liability, the successor operator shall be primarily liable for the payment of any benefits.
(2) In any case in which the operator which directed, controlled or supervised the miner is no longer in business and such operator was a subsidiary of a parent company, a member of a joint venture, a partner in a partnership, or was substantially owned or controlled by another business entity, such parent entity or other member of a joint venture or partner or controlling business entity may be considered the employer of any employees of such operator.
(3) In any claim in which the operator which directed, controlled or supervised the miner is a lessee, the lessee shall be considered primarily liable for the claim. The liability of the lessor may be established only after it has been determined that the lessee is unable to provide for the payment of benefits to a successful claimant. In any case involving the liability of a lessor for a claim arising out of employment with a lessee, any determination of lessor liability shall be made on the basis of the facts present in the case in accordance with the following considerations:
(i) Where a coal mine is leased, and the lease empowers the lessor to make decisions with respect to the terms and conditions under which coal is to be extracted or prepared, such as, but not limited to, the manner of extraction or preparation or the amount of coal to be produced, the lessor shall be considered the employer of any employees of the lessee.
(ii) Where a coal mine is leased to a self-employed operator, the lessor shall be considered the employer of such self-employed operator and its employees if the lease or agreement is executed or renewed after August 18, 1978 and such lease or agreement does not require the lessee to guarantee the payment of benefits which may be required under this part and part 726 of this subchapter.
(iii) Where a lessor previously operated a coal mine, it may be considered an operator with respect to employees of any lessee of such mine, particularly where the leasing arrangement was executed or renewed after August 18, 1978 and does not require the lessee to secure benefits provided by the Act.
(4) A self-employed operator, depending upon the facts of the case, may be considered an employee of any other operator, person, or business entity which substantially controls, supervises, or is financially responsible for the activities of the self-employed operator.
An operator may be considered a “potentially liable operator” with respect to a claim for benefits under this part if each of the following conditions is met:
(a) The miner's disability or death arose at least in part out of employment in or around a mine or other facility during a period when the mine or facility was operated by such operator, or by a person with respect to which the operator may be considered a successor operator. For purposes of this section, there shall be a rebuttable presumption that the miner's disability or death arose in whole or in part out of his or her employment with such operator. Unless this presumption is rebutted, the responsible operator shall be liable to pay benefits to the claimant on account of the disability or death of the miner in accordance with this part. A miner's pneumoconiosis, or disability or death therefrom, shall be considered to have arisen in whole or in part out of work in or around a mine if such work caused, contributed to or aggravated the progression or advancement of a miner's loss of ability to perform his or her regular coal mine employment or comparable employment.
(b) The operator, or any person with respect to which the operator may be considered a successor operator, was an operator for any period after June 30, 1973.
(c) The miner was employed by the operator, or any person with respect to which the operator may be considered a successor operator, for a cumulative period of not less than one year (§ 725.101(a)(32)).
(d) The miner's employment with the operator, or any person with respect to which the operator may be considered a successor operator, included at least one working day (§ 725.101(a)(32)) after December 31, 1969.
(e) The operator is capable of assuming its liability for the payment of continuing benefits under this part. An operator will be deemed capable of assuming its liability for a claim if one of the following three conditions is met:
(1) The operator obtained a policy or contract of insurance under section 423 of the Act and part 726 of this subchapter that covers the claim, except that such policy shall not be considered sufficient to establish the operator's capability of assuming liability if the insurance company has been declared
(2) The operator qualified as a self-insurer under section 423 of the Act and part 726 of this subchapter during the period in which the miner was last employed by the operator, provided that the operator still qualifies as a self-insurer or the security given by the operator pursuant to § 726.104(b) is sufficient to secure the payment of benefits in the event the claim is awarded; or
(3) The operator possesses sufficient assets to secure the payment of benefits in the event the claim is awarded in accordance with § 725.606.
(a)(1) The operator responsible for the payment of benefits in a claim adjudicated under this part (the “responsible operator”) shall be the potentially liable operator, as determined in accordance with § 725.494, that most recently employed the miner.
(2) If more than one potentially liable operator may be deemed to have employed the miner most recently, then the liability for any benefits payable as a result of such employment shall be assigned as follows:
(i) First, to the potentially liable operator that directed, controlled, or supervised the miner;
(ii) Second, to any potentially liable operator that may be considered a successor operator with respect to miners employed by the operator identified in paragraph (a)(2)(i) of this section; and
(iii) Third, to any other potentially liable operator which may be deemed to have been the miner's most recent employer pursuant to § 725.493.
(3) If the operator that most recently employed the miner may not be considered a potentially liable operator, as determined in accordance with § 725.494, the responsible operator shall be the potentially liable operator that next most recently employed the miner. Any potentially liable operator that employed the miner for at least one day after December 31, 1969 may be deemed the responsible operator if no more recent employer may be considered a potentially liable operator.
(4) If the miner's most recent employment by an operator ended while the operator was authorized to self-insure its liability under part 726 of this title, and that operator no longer possesses sufficient assets to secure the payment of benefits, the provisions of paragraph (a)(3) shall be inapplicable with respect to any operator that employed the miner only before he was employed by such self-insured operator. If no operator that employed the miner after his employment with the self-insured operator meets the conditions of § 725.494, the claim of the miner or his survivor shall be the responsibility of the Black Lung Disability Trust Fund.
(b) Except as provided in this section and § 725.408(a)(3), with respect to the adjudication of the identity of a responsible operator, the Director shall bear the burden of proving that the responsible operator initially found liable for the payment of benefits pursuant to § 725.410 (the “designated responsible operator”) is a potentially liable operator. It shall be presumed, in the absence of evidence to the contrary, that the designated responsible operator is capable of assuming liability for the payment of benefits in accordance with § 725.494(e).
(c) The designated responsible operator shall bear the burden of proving either:
(1) That it does not possess sufficient assets to secure the payment of benefits in accordance with § 725.606; or
(2) That it is not the potentially liable operator that most recently employed the miner. Such proof must include evidence that the miner was employed as a miner after he or she stopped working for the designated responsible operator and that the person by whom he or she was employed is a potentially liable operator within the meaning of § 725.494. In order to establish that a more recent employer is a potentially liable operator, the designated responsible operator must demonstrate that the more recent employer possesses sufficient assets to secure the payment of benefits in accordance with § 725.606. The designated responsible operator may satisfy its burden by presenting evidence that the owner, if the more recent employer is a sole proprietorship; the partners, if the more recent employer is a partnership; or the president, secretary, and treasurer, if the more recent employer is a corporation that failed to secure the payment of benefits pursuant to part 726 of this subchapter, possess assets sufficient to secure the payment of benefits, provided such assets may be reached in a proceeding brought under subpart I of this part.
(d) In any case referred to the Office of Administrative Law Judges pursuant to § 725.421 in which the operator finally designated as responsible pursuant to § 725.418(d) is not the operator that most recently employed the miner, the record shall contain a statement from the district director explaining the reasons for such designation. If the reasons include the most recent employer's failure to meet the conditions of § 725.494(e), the record shall also contain a statement that the Office has searched the files it maintains pursuant to part 726, and that the Office has no record of insurance coverage for that employer, or of authorization to self-insure, that meets the conditions of § 725.494(e)(1) or (e)(2). Such a statement shall be prima facie evidence that the most recent employer is not financially capable of assuming its liability for a claim. In the absence of such a statement, it shall be presumed that the most recent employer is financially capable of assuming its liability for a claim.
(a) The 1981 amendments to the Act amended section 422 of the Act and transferred liability for payment of certain special claims from operators and carriers to the fund. These provisions apply to claims which were denied before March 1, 1978, and which have been or will be approved in accordance with section 435 of the Act.
(b) Section 402(i) of the Act defines three classes of denied claims subject to the transfer provisions:
(1) Claims filed with and denied by the Social Security Administration before March 1, 1978;
(2) Claims filed with the Department of Labor in which the claimant was notified by the Department of an administrative or informal denial before March 1, 1977, and in which the claimant did not within one year of such notification either:
(i) Request a hearing; or
(ii) Present additional evidence; or
(iii) Indicate an intention to present additional evidence; or
(iv) Request a modification or reconsideration of the denial on the ground of a change in conditions or because of a mistake in a determination of fact;
(3) Claims filed with the Department of Labor and denied under the law in effect prior to the enactment of the Black Lung Benefits Reform Act of 1977, that is, before March 1, 1978, following a formal hearing before an administrative law judge or administrative review before the Benefits Review Board or review before a United States Court of Appeals.
(c) Where more than one claim was filed with the Social Security Administration and/or the Department of Labor prior to March 1, 1978, by or on behalf of a miner or a surviving dependent of a miner, unless such claims were required to be merged by
(d) For a claim filed with and denied by the Social Security Administration prior to March 1, 1978, to come within the transfer provisions, such claim must have been or must be approved under the provisions of section 435 of the Act. No claim filed with and denied by the Social Security Administration is subject to the transfer of liability provisions unless a request was made by or on behalf of the claimant for review of such denied claim under section 435. Such review must have been requested by the filing of a valid election card or other equivalent document with the Social Security Administration in accordance with section 435(a) and its implementing regulations at 20 CFR 410.700 through 410.707.
(e) Where a claim filed with the Department of Labor prior to March 1, 1977, was subjected to repeated administrative or informal denials, the last such denial issued during the pendency of the claim determines whether the claim is subject to the transfer of liability provisions.
(f) Where a miner's claim comes within the transfer of liability provisions of the 1981 amendments the fund is also liable for the payment of any benefits to which the miner's dependent survivors are entitled after the miner's death. However, if the survivor's entitlement was established on a separate claim not subject to the transfer of liability provisions prior to approval of the miner's claim under section 435, the party responsible for the payment of such survivors' benefits shall not be relieved of that responsibility because the miner's claim was ultimately approved and found subject to the transfer of liability provisions.
(a)
(b)
(c)
(d)
(e) Any claimant whose claim has been subsequently denied in a modification proceeding will be entitled to expedited review of the modification decision. Where a formal hearing was previously held, the claimant may waive his right to a further hearing and ask that a decision be made on the record of the prior hearing, as supplemented by any additional documentary evidence which the parties wish to introduce and briefs of the parties, if desired. In any case in which the claimant waives his right to a second hearing, a decision and order must be issued within 30 days of the date upon which the parties agree the record has been completed.
The provisions of this subpart govern the payment of benefits to claimants whose claims are approved for payment under section 415 and part C of title IV of the Act or approved after review under section 435 of the Act and part 727 of this subchapter (see § 725.4(d)).
(a)(1) Except with respect to benefits paid by the fund pursuant to an initial determination issued in accordance with § 725.418 (see § 725.522), benefits under the Act shall be paid when they become due. Benefits shall be considered due after the issuance of an effective order requiring the payment of benefits by a district director, administrative law judge, Benefits Review Board, or court, notwithstanding the pendency of a motion for reconsideration before an administrative law judge or an appeal to the Board or court, except that benefits shall not be considered due where the payment of such benefits has been stayed by the Benefits Review Board or appropriate court. An effective order shall remain in effect unless it is vacated by an administrative law judge on reconsideration, or, upon review under section 21 of the LHWCA, by the Benefits Review Board or an appropriate court, or is superseded by an effective order issued pursuant to § 725.310.
(2) A proposed order issued by a district director pursuant to § 725.418 becomes effective at the expiration of the thirtieth day thereafter if no party timely requests revision of the proposed decision and order or a hearing (see § 725.419). An order issued by an administrative law judge becomes effective when it is filed in the office of the district director (see § 725.479). An order issued by the Benefits Review Board shall become effective when it is issued. An order issued by a court shall become effective in accordance with the rules of the court.
(b)(1) While an effective order requiring the payment of benefits remains in effect, monthly benefits, at the rates set forth in § 725.520, shall be due on the fifteenth day of the month following the month for which the benefits are payable. For example, benefits payable for the month of January shall be due on the fifteenth day of February.
(2) Within 30 days after the issuance of an effective order requiring the payment of benefits, the district director shall compute the amount of benefits
(c) Benefits are payable for monthly periods and shall be paid directly to an eligible claimant or his or her representative payee (see § 725.510) beginning with the month during which eligibility begins. Benefit payments shall terminate with the month before the month during which eligibility terminates. If a claimant dies in the first month during which all requirements for eligibility are met, benefits shall be paid for that month.
(a) In accordance with the provisions of section 6(a) of the Longshore Act as incorporated by section 422(a) of the Act, and except as provided in § 725.504, the provisions of this section shall be applicable in determining the date from which benefits are payable to an eligible claimant for any claim filed after March 31, 1980. Except as provided in paragraph (d) of this section, the date from which benefits are payable for any claim approved under part 727 shall be determined in accordance with § 727.302 (see § 725.4(d)).
(b)
(c)
(d) If a claim is awarded pursuant to section 22 of the Longshore Act and § 725.310, then the date from which benefits are payable shall be determined as follows:
(1)
(2)
(e) In the case of a claim filed between July 1, 1973, and December 31, 1973, benefits shall be payable as provided by this section, except to the extent prohibited by § 727.303 (see § 725.4(d)).
(f) No benefits shall be payable with respect to a claim filed after December 31, 1973 (a part C claim), for any period of eligibility occurring before January 1, 1974.
(g) Each decision and order awarding benefits shall indicate the month from which benefits are payable to the eligible claimant.
(a) In the case of a claimant who is employed as a miner (see § 725.202) at the time of a final determination of such miner's eligibility for benefits, no benefits shall be payable unless:
(1) The miner's eligibility is established under section 411(c)(3) of the Act; or
(2) the miner terminates his or her coal mine employment within 1 year from the date of the final determination of the claim.
(b) If the eligibility of a working miner is established under section 411(c)(3) of the Act, benefits shall be payable as is otherwise provided in this part. If eligibility cannot be established under section 411(c)(3), and the miner continues to be employed as a miner in any capacity for a period of less than 1 year after a final determination of the claim, benefits shall be payable beginning with the month during which the miner ends his or her coal mine employment. If the miner's employment continues for more than 1 year after a final determination of eligibility, such determination shall be considered a denial of benefits on the basis of the miner's continued employment, and the miner may seek benefits only as provided in § 725.310, if applicable, or by filing a new claim under this part. The provisions of Subparts E and F of this part shall be applicable to claims considered under this section as is appropriate.
(c) In any case where the miner returns to coal mine or comparable and gainful work, the payments to such miner shall be suspended and no benefits shall be payable (except as provided in section 411(c)(3) of the Act) for the period during which the miner continues to work. If the miner again terminates employment, the district director may require the miner to submit to further medical examination before authorizing the payment of benefits.
Benefits may be paid, as appropriate, to a beneficiary, to a qualified dependent, or to a representative authorized under this subpart to receive payments on behalf of such beneficiary or dependent.
Benefits are paid only to the beneficiary, his or her representative payee (see § 725.510) or his or her legal guardian. As used in this section, “legal guardian” means an individual who has been appointed by a court of competent jurisdiction or otherwise appointed pursuant to law to assume control of and responsibility for the care of the beneficiary, the management of his or her estate, or both.
An adjudication officer may require that a legal guardian or representative be appointed to receive benefit payments payable to any person who is mentally incompetent or a minor and to exercise the powers granted to, or to perform the duties otherwise required of such person under the Act.
(a) If the district director determines that the best interests of a beneficiary are served thereby, the district director may certify the payment of such beneficiary's benefits to a representative payee.
(b) Before any amount shall be certified for payment to any representative payee for or on behalf of a beneficiary, such representative payee shall submit to the district director such evidence as may be required of his or her relationship to, or his or her responsibility for the care of, the beneficiary on whose behalf payment is to be made, or of his or her authority to receive such a payment. The district director may, at any time thereafter, require evidence of the continued
(c) All benefit payments made to a representative payee shall be available only for the use and benefit of the beneficiary, as defined in § 725.511.
(a) Payments certified to a representative payee shall be considered as having been applied for the use and benefit of the beneficiary when they are used for the beneficiary's current maintenance—
(b) Payments certified to a representative payee which are not needed for the current maintenance of the beneficiary, except as they may be used under § 725.512, shall be conserved or invested on the beneficiary's behalf. Preferred investments are U.S. savings bonds which shall be purchased in accordance with applicable regulations of the U.S. Treasury Department (31 CFR part 315). Surplus funds may also be invested in accordance with the rules applicable to investment of trust estates by trustees. For example, surplus funds may be deposited in an interest or dividend bearing account in a bank or trust company or in a savings and loan association if the account is either federally insured or is otherwise insured in accordance with State law requirements. Surplus funds deposited in an interest or dividend bearing account in a bank or trust company or in a savings and loan association must be in a form of account which clearly shows that the representative payee has only a fiduciary, and not a personal, interest in the funds. The preferred forms of such accounts are as follows:
U.S. savings bonds purchased with surplus funds by a representative payee for an incapacitated adult beneficiary should be registered as follows: (Name of beneficiary) (Social Security No.), for whom (Name of payee) is representative payee for black lung benefits.
If current maintenance needs of a beneficiary are being reasonably met, a relative or other person to whom payments are certified as representative payee on behalf of the beneficiary may use part of the payments so certified for the support of the legally dependent spouse, a legally dependent child, or a legally dependent parent of the beneficiary.
(a) The district director may require a representative payee to submit periodic reports including a full accounting of the use of all benefit payments certified to a representative payee. If a requested report or accounting is not submitted within the time allowed, the district director shall terminate the certification of the representative payee and thereafter payments shall be made directly to the beneficiary. A certification which is terminated under this section may be reinstated for good cause, provided that all required reports are supplied to the district director.
(b) A representative payee who has conserved or invested funds from payments under this part shall, upon the direction of the district director, transfer any such funds (including interest) to a successor payee appointed by the district director or, at the option of the district director, shall transfer such funds to the Office for recertification to a successor payee or the beneficiary.
(a) If the basic benefit of a miner or of a surviving spouse is augmented because of one or more dependents, and it appears to the district director that the best interests of such dependent would be served thereby, or that the augmented benefit is not being used for the use and benefit (as defined in this subpart) of the augmentee, the district director may certify payment of the amount of such augmentation (to the extent attributable to such dependent) to such dependent directly, or to a legal guardian or a representative payee for the use and benefit of such dependent.
(b) Any request to the district director to certify separate payment of the amount of an augmentation in accordance with paragraph (a) of this section shall be in writing on such form and in accordance with such instructions as are prescribed by the Office.
(c) The district director shall specify the terms and conditions of any certification authorized under this section and may terminate any such certification where appropriate.
(d) Any payment made under this section, if otherwise valid under the Act, is a complete settlement and satisfaction of all claims, rights, and interests in and to such payment, except that such payment shall not be construed to abridge the rights of any party to recoup any overpayment made.
(a) Except as provided by the Act and this part, no assignment, release, or commutation of benefits due or payable under this part by a responsible operator shall be valid, and all benefits shall be exempt from claims of creditors and from levy, execution, and attachment or other remedy or recovery or collection of a debt, which exemption may not be waived.
(b) Notwithstanding any other provision of law, benefits due from, or payable by, the Black Lung Disability Trust Fund under the Act and this part to a claimant shall be subject to legal process brought for the enforcement against the claimant of his or her legal obligations to provide child support or make alimony payments to the same extent as if the fund was a private person.
(a)
(1) Ascertaining the lowest annual rate of pay (step 1) for Grade GS-2 of the General Schedule applicable to such month (see 5 U.S.C. 5332);
(2) Ascertaining the monthly rate thereof by dividing the amount determined in paragraph (a)(1) of this section by 12; and
(3) Ascertaining the basic rate under the Act by multiplying the amount determined in paragraph (a)(2) of this section by 0.375 (that is, by 37
(b)
(c)
(2) The benefits of a miner or surviving spouse are augmented to take account of a particular dependent beginning with the first month in which such dependent satisfies the conditions set forth in this part, and continues to be augmented through the month before the month in which such dependent ceases to satisfy the conditions set forth in this part, except in the case of a child who qualifies as a dependent because he or she is a student. In the latter case, such benefits continue to be augmented through the month before the first month during no part of which he or she qualifies as a student.
(3) The basic rate is augmented by 50 percent for one such dependent, 75 percent for two such dependents, and 100 percent for three or more such dependents.
(d)
(e)
(2) Monthly benefits are payable in multiples of 10 cents. Therefore, a monthly payment of amounts derived under paragraph (c)(3) of this section which is not a multiple of 10 cents is increased to the next higher multiple of 10 cents.
(3) Since a fraction of a cent is not a multiple of 10 cents, such an amount which contains a fraction in the third decimal place is raised to the next higher multiple of 10 cents.
(f)
(a) Whenever the district director determines that it is in the interest of justice, the liability for benefits or any part thereof as determined by a final adjudication, may, with the approval of the Director, be discharged by the payment of a lump sum equal to the present value of future benefit payments commuted, computed at 4 percent true discount compounded annually.
(b) Applications for commutation of future payments of benefits shall be made to the district director in the manner prescribed by the district director. If the district director determines that an award of a lump sum payment of such benefits would be in the interest of justice, he or she shall refer such application, together with the reasons in support of such determination, to the Director for consideration.
(c) The Director shall, in his or her discretion, grant or deny the application for commutation of payments. Such decision may be appealed to the Benefits Review Board.
(d) The computation of all commutations of such benefits shall be made by the OWCP. For this purpose the file shall contain the date of birth of the person on whose behalf commutation is sought, as well as the date upon which such commutation shall be effective.
(e) For purposes of determining the amount of any lump sum award, the probability of the death of the disabled miner and/or other persons entitled to benefits before the expiration of the period during which he or she is entitled to benefits, shall be determined in accordance with the most current United States Life Tables, as developed by the Department of Health, Education, and Welfare, and the probability of the remarriage of a surviving spouse shall be determined in accordance with the remarriage tables of the Dutch Royal Insurance Institution. The probability of the happening of any other contingency affecting the amount or duration of the compensation shall be disregarded.
(f) In the event that an operator or carrier is adjudicated liable for the payment of benefits, such operator or carrier shall be notified of and given an opportunity to participate in the proceedings to determine whether a lump sum award shall be made. Such operator or carrier shall, in the event a lump sum award is made, tender full and prompt payment of such award to the claimant as though such award were a final payment of monthly benefits. Except as provided in paragraph (g) of this section, such lump sum award shall forever discharge such operator or carrier from its responsibility to make monthly benefit payments under the Act to the person who has requested such lump-sum award. In the event that an operator or carrier is adjudicated liable for the payment of benefits, such operator or carrier shall not be liable for any portion of a commuted or lump sum award predicated upon benefits due any claimant prior to January 1, 1974.
(g) In the event a lump-sum award is approved under this section, such award shall not operate to discharge an operator carrier, or the fund from any responsibility imposed by the Act for the payment of medical benefits to an eligible miner.
(a) If an operator or carrier fails or refuses to commence the payment of benefits within 30 days of issuance of an initial determination of eligibility by the district director (see § 725.420), or fails or refuses to commence the payment of any benefits due pursuant to an effective order by a district director, administrative law judge, Benefits Review Board, or court, the fund shall commence the payment of such benefits and shall continue such payments as appropriate. In the event that the fund undertakes the payment of benefits on behalf of an operator or carrier, the provisions of §§ 725.601 through 725.609 shall be applicable to such operator or carrier.
(b) If benefit payments are commenced prior to the final adjudication of the claim and it is later determined by an administrative law judge, the Board, or court that the claimant was ineligible to receive such payments, such payments shall be considered overpayments pursuant to § 725.540 and may be recovered in accordance with the provisions of this subpart.
(a) Benefits payable by an operator or carrier pursuant to an effective order issued by a district director, administrative law judge, Benefits Review Board, or court, or by an operator that has agreed that it is liable for the payment of benefits to a
(b) Benefit payments made by an operator or carrier shall be made directly to the person entitled thereto or a representative payee if authorized by the district director. The payment of a claimant's attorney's fee, if any is awarded, shall be made directly to such attorney. Reimbursement of the fund, including interest, shall be paid directly to the Secretary on behalf of the fund.
Any individual receiving benefits under the Act in his or her own right, or as a representative payee, or as the duly appointed agent for the estate of a deceased beneficiary, shall execute receipts for benefits paid by any operator which shall be produced by such operator for inspection whenever the district director requires. A canceled check shall be considered adequate receipt of payment for purposes of this section. No operator or carrier shall be required to retain receipts for payments made for more than 5 years after the date on which such receipt was executed.
(a) No suspension, reduction, or termination in the payment of benefits is permitted unless authorized by the district director, administrative law judge, Board, or court. No suspension, reduction, or termination shall be authorized except upon the occurrence of an event which terminates a claimant's eligibility for benefits (see subpart B of this part) or as is otherwise provided in subpart C of this part, §§ 725.306 and 725.310, or this subpart (see also §§ 725.533 through 725.546).
(b) Any unauthorized suspension in the payment of benefits by an operator or carrier shall be treated as provided in subpart I.
(c) Unless suspension, reduction, or termination of benefits payments is required by an administrative law judge, the Benefits Review Board or a court, the district director, after receiving notification of the occurrence of an event that would require the suspension, reduction, or termination of benefits, shall follow the procedures for the determination of claims set forth in subparts E and F.
(a) Under certain circumstances, the amount of monthly benefits as computed in § 725.520 or lump-sum award (§ 725.521) shall be modified to determine the amount actually to be paid to a beneficiary. With respect to any benefits payable for all periods of eligibility after January 1, 1974, a reduction of the amount of benefits payable shall be required on account of:
(1) Any compensation or benefits received under any State workers' compensation law because of death or partial or total disability due to pneumoconiosis; or
(2) Any compensation or benefits received under or pursuant to any Federal law including part B of title IV of the Act because of death or partial or total disability due to pneumoconiosis; or
(3) In the case of benefits to a parent, brother, or sister as a result of a claim filed at any time or benefits payable on a miner's claim which was filed on or after January 1, 1982, the excess earnings from wages and from net earnings from self-employment (see § 410.530 of this title) of such parent, brother, sister, or miner, respectively; or
(4) The fact that a claim for benefits from an additional beneficiary is filed, or that such claim is effective for a payment during the month of filing, or a dependent qualifies under this part for an augmentation portion of a benefit of a miner or widow for a period in which another dependent has previously qualified for an augmentation.
(b) An adjustment in a beneficiary's monthly benefit may be required because an overpayment or underpayment has been made to such beneficiary (see §§ 725.540-725.546).
(c) A suspension of a beneficiary's monthly benefits may be required when the Office has information indicating that reductions on account of excess earnings may reasonably be expected.
(d) Monthly benefit rates are payable in multiples of 10 cents. Any monthly benefit rate which, after the applicable computations, augmentations, and reductions is not a multiple of 10 cents, is increased to the next higher multiple of 10 cents. Since a fraction of a cent is not a multiple of 10 cents, a benefit rate which contains such a fraction in the third decimal is raised to the next higher multiple of 10 cents.
(e) Any individual entitled to a benefit, who is aware of any circumstances which could affect entitlement to benefits, eligibility for payment, or the amount of benefits, or result in the termination, suspension, or reduction of benefits, shall promptly report these circumstances to the Office. The Office may at any time require an individual receiving, or claiming entitlement to, benefits, either on his or her own behalf or on behalf of another, to submit a written statement giving pertinent information bearing upon the issue of whether or not an event has occurred which would cause such benefit to be terminated, or which would subject such benefit to reductions or suspension under the provisions of the Act. The failure of an individual to submit any such report or statement, properly executed, to the Office shall subject such benefit to reductions, suspension, or termination as the case may be.
No benefits under section 415 of part B of title IV of the Act shall be payable to the residents of a State which, after December 31, 1969, reduces the benefits payable to persons eligible to receive benefits under section 415 of the Act under State laws applicable to its general work force with regard to workers' compensation (including compensation for occupational disease), unemployment compensation, or disability insurance benefits which are funded in whole or in part out of employer contributions.
(a) As used in this section the term “State or Federal benefit” means a payment to an individual on account of total or partial disability or death due to pneumoconiosis only under State or Federal laws relating to workers' compensation. With respect to a claim for which benefits are payable for any month between July 1 and December 31, 1973, “State benefit” means a payment to a beneficiary made on account of disability or death due to pneumoconiosis under State laws relating to workers' compensation (including compensation for occupational disease), unemployment compensation, or disability insurance.
(b) Benefit payments to a beneficiary for any month are reduced (but not below zero) by an amount equal to any payments of State or Federal benefits
(c) Where a State or Federal benefit is paid periodically but not monthly, or in a lump sum as a commutation of or a substitution for periodic benefits, the reduction under this section is made at such time or times and in such amounts as the Office determines will approximate as nearly as practicable the reduction required under paragraph (b) of this section. In making such a determination, a weekly State or Federal benefit is multiplied by 4
(d) Amounts paid or incurred or to be incurred by the individual for medical, legal, or related expenses in connection with this claim for State or Federal benefits (defined in paragraph (a) of this section) are excluded in computing the reduction under paragraph (b) of this section, to the extent that they are consistent with State or Federal Law. Such medical, legal, or related expenses may be evidenced by the State or Federal benefit awards, compromise agreement, or court order in the State or Federal benefit proceedings, or by such other evidence as the Office may require. Such other evidence may consist of:
(1) A detailed statement by the individual's attorney, physician, or the employer's insurance carrier; or
(2) Bills, receipts, or canceled checks; or
(3) Other evidence indicating the amount of such expenses; or
(4) Any combination of the foregoing evidence from which the amount of such expenses may be determinable. Such expenses shall not be excluded unless established by evidence as required by the Office.
In the case of a surviving parent, brother, or sister, whose claim was filed at any time, or of a miner whose claim was filed on or after January 1, 1982, benefit payments are reduced as appropriate by an amount equal to the deduction which would be made with respect to excess earnings under the provisions of sections 203 (b), (f), (g), (h), (j), and (l) of the Social Security Act (42 U.S.C. 403 (b), (f), (g), (h), (j), and (l)), as if such benefit payments were benefits payable under section 202 of the Social Security Act (42 U.S.C. 402) (see §§ 404.428 through 404.456 of this title).
Except as provided in § 725.212(b), beginning with the month in which a person other than a miner files a claim and becomes entitled to benefits, the benefits of other persons entitled to benefits with respect to the same miner, are adjusted downward, if necessary, so that no more than the permissible amount of benefits (the maximum amount for the number of beneficiaries involved) will be paid.
(a) Ordinarily, a written request that the benefits of a miner or surviving spouse be augmented on account of a qualified dependent is made as part of the claim for benefits. However, it may also be made thereafter.
(b) In the latter case, beginning with the month in which such a request is filed on account of a particular dependent and in which such dependent qualifies for augmentation purposes under this part, the augmented benefits attributable to other qualified dependents (with respect to the same miner or surviving spouse), if any, are adjusted downward, if necessary, so that the permissible amount of augmented benefits (the maximum amount for the number of dependents involved) will not be exceeded.
(c) Where, based on the entitlement to benefits of a miner or surviving spouse, a dependent would have qualified for augmentation purposes for a prior month of such miner's or surviving spouse's entitlement had such request been filed in such prior month, such request is effective for such prior month. For any month before the month of filing such request, however, otherwise correct benefits previously certified by the Office may not be changed. Rather the amount of the augmented benefit attributable to the dependent filing such request in the later month is reduced for each month of the retroactive period to the extent that may be necessary. This means that for each month of the retroactive period, the amount payable to the dependent filing the later augmentation request is the difference, if any, between:
(1) The total amount of augmented benefits certified for payment for other dependents for that month, and
(2) The permissible amount of augmented benefits (the maximum amount for the number of dependents involved) payable for the month for all dependents, including the dependent filing later.
If a reduction for receipt of State or Federal benefits and a reduction on account of excess earnings are chargeable to the same month, the benefit for such month is first reduced (but not below zero) by the amount of the State or Federal benefits, and the remainder of the benefit for such month, if any, is then reduced (but not below zero) by the amount of excess earnings chargeable to such month.
(a)
(1) Payment where no amount is payable under this part;
(2) Payment in excess of the amount payable under this part;
(3) A payment under this part which has not been reduced by the amounts required by the Act (see § 725.533);
(4) A payment under this part made to a resident of a State whose residents are not entitled to benefits (see §§ 725.402 and 725.403);
(5) Payment resulting from failure to terminate benefits to an individual no longer entitled thereto;
(6) Duplicate benefits paid to a claimant on account of concurrent eligibility under this part and parts 410 or 727 (see § 725.4(d)) of this title or as provided in § 725.309.
(b)
(c)
(1) Withholding the full amount each month would deprive the beneficiary of income required for ordinary and necessary living expenses;
(2) The overpayment was not caused by the beneficiary's intentionally false statement or representation, or willful concealment of, or deliberate failure to furnish, material information; and
(3) Recoupment can be effected in an amount of not less than $ 10 a month and at a rate which would not unreasonably extend the period of adjustment.
(d)
Whenever a determination is made that more than the correct amount of payment has been made, notice of the provisions of section 204(b) of the Social Security Act regarding waiver of adjustment or recovery shall be sent to the overpaid individual, to any other individual against whom adjustment or recovery of the overpayment is to be effected, and to any operator or carrier which may be liable to such overpaid individual.
There shall be no adjustment or recovery of an overpayment in any case where an incorrect payment has been made with respect to an individual:
(a) Who is without fault, and where
(b) Adjustment or recovery would either:
(1) Defeat the purpose of title IV of the Act, or
(2) Be against equity and good conscience.
The standards for determining the applicability of the criteria listed in § 725.542 shall be the same as those applied by the Social Security Administration under §§ 404.506 through 404.512 of this title.
(a)
(b)
(2) In any case where the overpaid individual is deceased:
(i) A claim for overpayment in excess of $ 5,000 will not be compromised, nor will there be suspension or termination of collection of the claim by the Office if there is an indication of fraud, the filing of a false claim, or misrepresentation on the part of such deceased individual; and
(ii) A claim for overpayment, regardless of the amount, will not be compromised, nor will there be suspension or termination of collection of the claim by the Office if there is an indication that any person other than the deceased overpaid individual had a part in the fraudulent action which resulted in the overpayment.
(c)
(d)
(e)
(f)
(a)
(b)
(c)
(1) The deceased individual's surviving spouse who was either:
(i) Living in the same household with the deceased individual at the time of such individual's death; or
(ii) In the case of a deceased miner, entitled for the month of death to black lung benefits as his or her surviving spouse or surviving divorced spouse.
(2) In the case of a deceased miner or spouse his or her child entitled to benefits as the surviving child of such miner or surviving spouse for the month in which such miner or spouse died (if more than one such child, in equal shares to each such child).
(3) In the case of a deceased miner, his parent entitled to benefits as the surviving parent of such miner for the month in which such miner died (if more than one such parent, in equal shares to each such parent).
(4) The surviving spouse of the deceased individual who does not qualify under paragraph (c)(1) of this section.
(5) The child or children of the deceased individual who do not qualify under paragraph (c)(2) of this section (if more than one such child, in equal shares to each such child).
(6) The parent or parents of the deceased individual who do not qualify under paragraph (c)(3) of this section (if more than one such parent, in equal shares to each such parent).
(7) The legal representative of the estate of the deceased individual as defined in paragraph (e) of this section.
(d)
(e)
(1) A person who qualifies under a State's “small estate” statute; or
(2) A person resident in a foreign country who under the laws and customs of that country, has the right to receive assets of the estate; or
(3) A public administrator; or
(4) A person who has the authority under applicable law to collect the assets of the estate of the deceased beneficiary.
(f)
The amount of an overpayment or an underpayment is the difference between the amount to which the beneficiary was actually entitled and the amount paid. Overpayment and underpayment simultaneously outstanding against the same beneficiary shall first be adjusted against one another before adjustment pursuant to the other provisions of this subpart.
(a) The provisions of this subpart relating to overpayments and underpayments shall be applicable to overpayments and underpayments made by responsible operators or their insurance carriers, as appropriate.
(b) No operator or carrier may recover, or make an adjustment of, an overpayment without prior application to, and approval by, the Office which shall exercise full supervisory authority over the recovery or adjustment of all overpayments.
(a) In any case involving either overpayments or underpayments, the Office may take any necessary action, and district directors may issue appropriate orders to protect the rights of the parties.
(b) Disputes arising out of orders so issued shall be resolved by the procedures set out in subpart F of this part.
(a) The Act, together with certain incorporated provisions from the Longshoremen's and Harbor Workers' Compensation Act, contains a number of provisions which subject an operator or other employer, claimants and others to penalties for failure to comply with certain provisions of the Act, or failure to commence and continue prompt periodic payments to a beneficiary.
(b) It is the policy and intent of the Department to vigorously enforce the provisions of this part through the use of the remedies provided by the Act. Accordingly, if an operator refuses to pay benefits with respect to a claim for which the operator has been adjudicated liable, the Director shall invoke and execute the lien on the property of the operator as described in § 725.603. Enforcement of this lien shall be pursued in an appropriate U.S. district court. If the Director determines that the remedy provided by § 725.603 may not be sufficient to guarantee the continued compliance with the terms of an award or awards against the operator, the Director shall in addition seek an injunction in the U.S. district court to prohibit future noncompliance by the operator and such other relief as the court considers appropriate (see § 725.604). If an operator unlawfully suspends or terminates the payment of benefits to a claimant, the district director shall declare the award in default and proceed in accordance with § 725.605. In all cases payments in addition to compensation (see § 725.607) and interest (see § 725.608) shall be sought by the Director or awarded by the district director.
(c) In certain instances the remedies provided by the Act are concurrent; that is, more than one remedy might be appropriate in any given case. In such a case, the Director shall select the remedy or remedies appropriate for the enforcement action. In making this selection, the Director shall consider the best interests of the claimant as well as those of the fund.
(a) In any case in which the fund has paid benefits, including medical benefits, on behalf of an operator or other employer which is determined liable therefore, or liable for a part thereof, such operator or other employer shall simultaneously with the first payment of benefits made to the beneficiary, reimburse the fund (with interest) for the full amount of all benefit payments made by the fund with respect to the claim.
(b) In any case where benefit payments have been made by the fund, the fund shall be subrogated to the rights of the beneficiary. The Secretary of Labor may, as appropriate, exercise such subrogation rights.
(a) If an amount is paid out of the fund to an individual entitled to benefits under this part or part 727 of this subchapter (see § 725.4(d)) on behalf of an operator or other employer which is or was required to pay or secure the payment of all or a portion of such amount (see § 725.522), the operator or other employer shall be liable to the United States for repayment to the fund of the amount of benefits properly attributable to such operator or other employer.
(b) If an operator or other employer liable to the fund refuses to pay, after demand, the amount of such liability, there shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such operator or other employer. The lien arises on the date on which such liability is finally determined, and continues until it is satisfied or becomes unenforceable by reason of lapse of time.
(c)(1) Except as otherwise provided under this section, the priority of the lien shall be determined in the same manner as under section 6323 of the Internal Revenue Code (26 U.S.C.).
(2) In the case of a bankruptcy or insolvency proceeding, the lien imposed under this section shall be treated in the same manner as a lien for taxes due and owing to the United States for purposes of the Bankruptcy Act or section 3466 of the Revised Statutes (31 U.S.C. 191).
(3) For purposes of applying section 6323(a) of the Internal Revenue Code (26 U.S.C.) to determine the priority between the lien imposed under this section and the Federal tax lien, each lien shall be treated as a judgment lien arising as of the time notice of such lien is filed.
(4) For purposes of the section, notice of the lien imposed hereunder shall be filed in the same manner as under section 6323(f) (disregarding paragraph (4) thereof) and (g) of the Internal Revenue Code (26 U.S.C.).
(5) In any case where there has been a refusal or neglect to pay the liability imposed under this section, the Secretary of Labor may bring a civil action in a district court of the United States to enforce the lien of the United States under this section with respect to such liability or to subject any property, of whatever nature, of the operator, or in which it has any right, title, or interest, to the payment of such liability.
(6) The liability imposed by this paragraph may be collected at a proceeding in court if the proceeding is commenced within 6 years after the date upon which the liability was finally determined, or prior to the expiration of any period for collection agreed upon in writing by the operator and the United States before the expiration of such 6-year period. This period of limitation shall be suspended for any period during which the assets of the operator are in the custody or control of any court of the United States, or of any State, or the District of Columbia, and for 6 months thereafter, and for any period during which the operator is outside the United States if such period of absence is for a continuous period of at least 6 months.
Notwithstanding the provisions of § 725.603, if an operator or other employer or its officers or agents fails to comply with an order awarding benefits that has become final, any beneficiary of such award or the district director may apply for the enforcement of the order to the Federal district court for the judicial district in which the injury occurred (or to the U.S. District Court for the District of Columbia if the injury occurred in the District). If the court determines that the order was made and served in accordance with law, and that such operator or other employer or its officers or agents have failed to comply therewith, the court shall enforce obedience to the order by writ of injunction or by other proper process, mandatory or otherwise, to enjoin upon such operator or other employer and its officers or agents compliance with the order.
(a) Except as is otherwise provided in this part, no suspension, termination or other failure to pay benefits awarded to a claimant is permitted. If an employer found liable for the payment of such benefits fails to make such payments within 30 days after any date on which such benefits are due and payable, the person to whom such benefits are payable may, within one year after such default, make application to the district director for a supplementary order declaring the amount of the default.
(b) If after investigation, notice and hearing as provided in subparts E and F of this part, a default is found, the district director or the administrative law judge, if a hearing is requested, shall issue a supplementary order declaring the amount of the default, if any. In cases where a lump-sum award has been made, if the payment in default is an installment, the district director or administrative law judge, may, in his or her discretion, declare the whole of the award as the amount in default. The applicant may file a certified copy of such supplementary order with the clerk of the Federal district court for the judicial district in which the operator has its principal place of business or maintains an office or for the judicial district in which the injury occurred. In case such principal place of business or office is in the District of Columbia, a copy of such supplementary order may be filed with the clerk of the U.S. District Court for the District of Columbia. Such supplementary order shall be final and the court shall, upon the filing of the copy, enter judgment for the amount declared in default by the supplementary order if such supplementary order is in accordance with law. Review of the judgment may be had as in civil suits for damages at common law. Final proceedings to execute the judgment may be had by writ of execution in the form used by the court in suits at common law in actions of assumpsit. No fee shall be required for filing the supplementary order nor for entry of judgment thereon, and the applicant shall not be liable for costs in a proceeding for review of the judgment unless the court shall otherwise direct. The court shall modify such judgment to conform to any later benefits order upon presentation of a certified copy thereof to the court.
(c) In cases where judgment cannot be satisfied by reason of the employer's insolvency or other circumstances precluding payment, the district director shall make payment from the fund, and in addition, provide any necessary medical, surgical, and other treatment required by subpart J of this part. A defaulting employer shall be liable to the fund for payment of the amounts paid by the fund under this section; and for the purpose of enforcing this liability, the fund shall be subrogated to all the rights of the person receiving such payments or benefits.
(a) Following the issuance of an effective order by a district director (see § 725.418), administrative law judge (see § 725.479), Benefits Review Board, or court that requires the payment of benefits by an operator that has failed to secure the payment of benefits in accordance with section 423 of the Act and § 726.4 of this subchapter, or by a coal mine construction or transportation employer, the Director may request that the operator secure the payment of all benefits ultimately payable on the claim. Such operator or other employer shall thereafter immediately secure the payment of benefits in accordance with the provisions of this section, and provide proof of such security to the Director. Such security may take the form of an indemnity bond, a deposit of cash or negotiable securities in compliance with §§ 726.106(c) and 726.107 of this subchapter, or any other form acceptable to the Director.
(b) The amount of security initially required by this section shall be determined as follows:
(1) In a case involving an operator subject to section 423 of the Act and § 726.4 of this subchapter, the amount of the security shall not be less than $175,000, and may be a higher amount as determined by the Director, taking
(2) In a case involving a coal mine construction or transportation employer, the amount of the security shall be determined by the Director, taking into account the life expectancies of the claimant and any dependents using the most recent life expectancy tables published by the Social Security Administration.
(c) If the operator or other employer fails to provide proof of such security to the Director within 30 days of its receipt of the Director's request to secure the payment of benefits issued under paragraph (a) of this section, the appropriate adjudication officer shall issue an order requiring the operator or other employer to make a deposit of negotiable securities with a Federal Reserve Bank in the amount required by paragraph (b). Such securities shall comply with the requirements of §§ 726.106(c) and 726.107 of this subchapter. In a case in which the effective order was issued by a district director, the district director shall be considered the appropriate adjudication officer. In any other case, the administrative law judge who issued the most recent decision in the case, or such other administrative law judge as the Chief Administrative Law Judge shall designate, shall be considered the appropriate adjudication officer, and shall issue an order under this paragraph on motion of the Director. The administrative law judge shall have jurisdiction to issue an order under this paragraph notwithstanding the pendency of an appeal of the award of benefits with the Benefits Review Board or court.
(d) An order issued under this section shall be considered effective when issued. Disputes regarding such orders shall be resolved in accordance with subpart F of this part.
(e) Notwithstanding any further review of the order in accordance with subpart F of this part, if an operator or other employer subject to an order issued under this section fails to comply with such order, the appropriate adjudication officer shall certify such non-compliance to the appropriate United States district court in accordance with § 725.351(c).
(f) Security posted in accordance with this section may be used to make payment of benefits that become due with respect to the claim in accordance with § 725.502. In the event that either the order awarding compensation or the order issued under this section is vacated or reversed, the operator or other employer may apply to the appropriate adjudication officer for an order authorizing the return of any amounts deposited with a Federal Reserve Bank and not yet disbursed, and such application shall be granted. If at any time the Director determines that additional security is required beyond that initially required by paragraph (b) of this section, he may request the operator or other employer to increase the amount. Such request shall be treated as if it were issued under paragraph (a) of this section.
(g) If a coal mine construction or transportation employer fails to comply with an order issued under paragraph (c), and such employer is a corporation, the provisions of § 725.609 shall be applicable to the president, secretary, and treasurer of such employer.
(a) If any benefits payable under the terms of an award by a district director (§ 725.419(d)), a decision and order filed and served by an administrative law judge (§ 725.478), or a decision filed by the Board or a U.S. court of appeals, are not paid by an operator or other employer ordered to make such payments within 10 days after such payments become due, there shall be added to such unpaid benefits an amount equal to 20 percent thereof, which shall be paid to the claimant at the same time as, but in addition to, such benefits, unless review of the order making such award is sought as provided in section 21 of the LHWCA and an order staying payments has been issued.
(b) If, on account of an operator's or other employer's failure to pay benefits as provided in paragraph (a) of this section, benefit payments are made by the fund, the eligible claimant shall nevertheless be entitled to receive such additional compensation to which he or she may be eligible under paragraph (a) of this section, with respect to all amounts paid by the fund on behalf of such operator or other employer.
(c) The fund shall not be liable for payments in addition to compensation under any circumstances.
(a)(1) In any case in which an operator fails to pay benefits that are due (§ 725.502), the beneficiary shall also be entitled to simple annual interest, computed from the date on which the benefits were due. The interest shall be computed through the date on which the operator paid the benefits, except that the beneficiary shall not be entitled to interest for any period following the date on which the beneficiary received payment of any benefits from the fund pursuant to § 725.522.
(2) In any case in which an operator is liable for the payment of retroactive benefits, the beneficiary shall also be entitled to simple annual interest on such benefits, computed from 30 days after the date of the first determination that such an award should be made. The first determination that such an award should be made may be a district director's initial determination of entitlement, an award made by an administrative law judge or a decision by the Board or a court, whichever is the first such determination of entitlement made upon the claim.
(3) In any case in which an operator is liable for the payment of additional compensation (§ 725.607), the beneficiary shall also be entitled to simple annual interest computed from the date upon which the beneficiary's right to additional compensation first arose.
(4) In any case in which an operator is liable for the payment of medical benefits, the beneficiary or medical provider to whom such benefits are owed shall also be entitled to simple annual interest, computed from the date upon which the services were rendered, or from 30 days after the date of the first determination that the miner is generally entitled to medical benefits, whichever is later. The first determination that the miner is generally entitled to medical benefits may be a district director's initial determination of entitlement, an award made by an administrative law judge or a decision by the Board or a court, whichever is the first such determination of general entitlement made upon the claim. The interest shall be computed through the date on which the operator paid the benefits, except that the beneficiary or medical provider shall not be entitled to interest for any period following the date on which the beneficiary or medical provider received payment of any benefits from the fund pursuant to § 725.522 or Subpart I of this part.
(b) If an operator or other employer fails or refuses to pay any or all benefits due pursuant to an award of benefits or an initial determination of eligibility made by the district director and the fund undertakes such payments, such operator or other employer shall be liable to the fund for simple annual interest on all payments made by the fund for which such operator is determined liable, computed from the first date on which such benefits are paid by the fund, in addition to such
(c) In any case in which an operator is liable for the payment of an attorney's fee pursuant to § 725.367, and the attorney's fee is payable because the award of benefits has become final, the attorney shall also be entitled to simple annual interest, computed from the date on which the attorney's fee was awarded. The interest shall be computed through the date on which the operator paid the attorney's fee.
(d) The rates of interest applicable to paragraphs (a), (b), and (c) of this section shall be computed as follows:
(1) For all amounts outstanding prior to January 1, 1982, the rate shall be 6% simple annual interest;
(2) For all amounts outstanding for any period during calendar year 1982, the rate shall be 15% simple annual interest; and
(3) For all amounts outstanding during any period after calendar year 1982, the rate shall be simple annual interest at the rate established by section 6621 of the Internal Revenue Code (26 U.S.C.) which is in effect for such period.
(e) The fund shall not be liable for the payment of interest under any circumstances, other than the payment of interest on advances from the United States Treasury as provided by section 9501(c) of the Internal Revenue Code (26 U.S.C.).
In any case in which an award of benefits creates obligations on the part of an operator or insurer that may be enforced under the provisions of this subpart, such obligations may also be enforced, in the discretion of the Secretary or district director, as follows:
(a) In a case in which the operator is a sole proprietorship or partnership, against any person who owned, or was a partner in, such operator during any period commencing on or after the date on which the miner was last employed by the operator;
(b) In a case in which the operator is a corporation that failed to secure its liability for benefits in accordance with section 423 of the Act and § 726.4, and the operator has not secured its liability for the claim in accordance with § 725.606, against any person who served as the president, secretary, or treasurer of such corporation during any period commencing on or after the date on which the miner was last employed by the operator;
(c) In a case in which the operator is no longer capable of assuming its liability for the payment of benefits (§ 725.494(e)), against any operator which became a successor operator with respect to the liable operator (§ 725.492) after the date on which the claim was filed, beginning with the most recent such successor operator;
(d) In a case in which the operator is no longer capable of assuming its liability for the payment of benefits (§ 725.494(e)), and such operator was a subsidiary of a parent company or a product of a joint venture, or was substantially owned or controlled by another business entity, against such parent entity, any member of such joint venture, or such controlling business entity; or
(e) Against any other person who has assumed or succeeded to the obligations of the operator or insurer by operation of any state or federal law, or by any other means.
(a) If an operator fails to discharge its insurance obligations under the Act, the provisions of subpart D of part 726 of this subchapter shall apply.
(b) Any employer who knowingly transfers, sells, encumbers, assigns, or in any manner disposes of, conceals, secrets, or destroys any property belonging to such employer, after one of its employees has been injured within the purview of the Act, and with intent to avoid the payment of benefits under the Act to such miner or his or her dependents, shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than $1,000, or by imprisonment for not more than one year, or by both. In any case where such employer is a corporation, the president, secretary, and treasurer thereof shall be also severally liable for such penalty or imprisonment as well as jointly liable with such corporation for such fine.
(c) No agreement by a miner to pay any portion of a premium paid to a carrier by such miner's employer or to contribute to a benefit fund or department maintained by such employer for the purpose of providing benefits or medical services and supplies as required by this part shall be valid; and any employer who makes a deduction for such purpose from the pay of a miner entitled to benefits under the Act shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not more than $1,000.
(d) No agreement by a miner to waive his or her right to benefits under the Act and the provisions of this part shall be valid.
(e) This section shall not affect any other liability of the employer under this part.
(a) Upon making the first payment of benefits and upon suspension, reduction, or increase of payments, the operator or other employer responsible for making payments shall immediately notify the district director of the action taken, in accordance with a form prescribed by the Office.
(b) Within 16 days after final payment of benefits has been made by an employer, such employer shall so notify the district director, in accordance with a form prescribed by the Office, stating that such final payment, has been made, the total amount of benefits paid, the name of the beneficiary, and such other information as the Office deems pertinent.
(c) The Director may from time to time prescribe such additional reports to be made by operators, other employers, or carriers as the Director may consider necessary for the efficient administration of the Act.
(d) Any employer who fails or refuses to file any report required of such employer under this section shall be subject to a civil penalty not to exceed $500 for each failure or refusal, which penalty shall be determined in accordance with the procedures set forth in subpart D of part 726 of this subchapter, as appropriate. The maximum penalty applicable to any violation of this paragraph that takes place after January 19, 2001 shall be $550.
(e) No request for information or response to such request shall be considered a report for purposes of this section or the Act, unless it is so designated by the Director or by this section.
(a) A miner who is determined to be eligible for benefits under this part or part 727 of this subchapter (see § 725.4(d)) is entitled to medical benefits as set forth in this subpart as of the date of his or her claim, but in no event before January 1, 1974. No medical benefits shall be provided to the survivor or dependent of a miner under this part.
(b) A responsible operator, other employer, or where there is neither, the fund, shall furnish a miner entitled to benefits under this part with such
(c) The medical benefits referred to in paragraphs (a) and (b) of this section shall include palliative measures useful only to prevent pain or discomfort associated with the miner's pneumoconiosis or attendant disability.
(d) The costs recoverable under this subpart shall include the reasonable cost of travel necessary for medical treatment (to be determined in accordance with prevailing United States government mileage rates) and the reasonable documented cost to the miner or medical provider incurred in communicating with the employer, carrier, or district director on matters connected with medical benefits.
(e) If a miner receives a medical service or supply, as described in this section, for any pulmonary disorder, there shall be a rebuttable presumption that the disorder is caused or aggravated by the miner's pneumoconiosis. The party liable for the payment of benefits may rebut the presumption by producing credible evidence that the medical service or supply provided was for a pulmonary disorder apart from those previously associated with the miner's disability, or was beyond that necessary to effectively treat a covered disorder, or was not for a pulmonary disorder at all.
(f) Evidence that the miner does not have pneumoconiosis or is not totally disabled by pneumoconiosis arising out of coal mine employment is insufficient to defeat a request for coverage of any medical service or supply under this subpart. In determining whether the treatment is compensable, the opinion of the miner's treating physician may be entitled to controlling weight pursuant to § 718.104(d). A finding that a medical service or supply is not covered under this subpart shall not otherwise affect the miner's entitlement to benefits.
(a) Section 11 of the Reform Act directs the Secretary of Health, Education and Welfare to notify each miner receiving benefits under part B of title IV of the Act that he or she may file a claim for medical treatment benefits described in this subpart. Section 725.308(b) provides that a claim for medical treatment benefits shall be filed on or before December 31, 1980, unless the period is enlarged for good cause shown. This section sets forth the rules governing the processing, adjudication, and payment of claims filed under section 11.
(b)(1) A claim filed pursuant to the notice described in paragraph (a) of this section shall be considered a claim for medical benefits only, and shall be filed, processed, and adjudicated in accordance with the provisions of this part, except as provided in this section. While a claim for medical benefits must be treated as any other claim filed under part C of title IV of the Act, the Department shall accept the Social Security Administration's finding of entitlement as its initial determination.
(2) In the case of a part B beneficiary whose coal mine employment terminated before January 1, 1970, the Secretary shall make an immediate award of medical benefits. Where the part B beneficiary's coal mine employment terminated on or after January 1, 1970, the Secretary shall immediately authorize the payment of medical benefits and thereafter inform the responsible operator, if any, of the operator's right to contest the claimant's entitlement for medical benefits.
(c) A miner on whose behalf a claim is filed under this section (see § 725.301) must have been alive on March 1, 1978, in order for the claim to be considered.
(d) The criteria contained in subpart C of part 727 of this subchapter (see § 725.4(d)) are applicable to claims for medical benefits filed under this section.
(e) No determination made with respect to a claim filed under this section shall affect any determination previously made by the Social Security Administration. The Social Security Administration may, however, reopen a previously approved claim if the conditions set forth in § 410.672(c) of this chapter are present. These conditions are generally limited to fraud or concealment.
(f) If medical benefits are awarded under this section, such benefits shall be payable by a responsible coal mine operator (see subpart G of this part), if the miner's last employment occurred on or after January 1, 1970, and in all other cases by the fund. An operator which may be required to provide medical treatment benefits to a miner under this section shall have the right to participate in the adjudication of the claim as is otherwise provided in this part.
(g) Any miner whose coal mine employment terminated after January 1, 1970, may be required to submit to a medical examination requested by an identified operator. The unreasonable refusal to submit to such an examination shall have the same consequences as are provided under § 725.414.
(h) If a miner is determined eligible for medical benefits in accordance with this section, such benefits shall be provided from the date of filing, except that such benefits may also include payments for any unreimbursed medical treatment costs incurred personally by such miner during the period from January 1, 1974, to the date of filing which are attributable to medical care required as a result of the miner's total disability due to pneumoconiosis. No reimbursement for health insurance premiums, taxes attributable to any public health insurance coverage, or other deduction or payments made for the purpose of securing third party liability for medical care costs is authorized by this section. If a miner seeks reimbursement for medical care costs personally incurred before the filing of a claim under this section, the district director shall require documented proof of the nature of the medical service provided, the identity of the medical provider, the cost of the service, and the fact that the cost was paid by the miner, before reimbursement for such cost may be awarded.
The term “physician” includes only doctors of medicine (MD) and osteopathic practitioners within the scope of their practices as defined by State law. No treatment or medical services performed by any other practitioner of the healing arts is authorized by this part, unless such treatment or service is authorized and supervised both by a physician as defined in this section and the district director.
(a) Upon notification to a miner of such miner's entitlement to benefits, the Office shall provide the miner with a list of authorized treating physicians and medical facilities in the area of the miner's residence. The miner may select a physician from this list or may select another physician with approval of the Office. Where emergency services are necessary and appropriate, authorization by the Office shall not be required.
(b) The Office may, on its own initiative, or at the request of a responsible operator, order a change of physicians or facilities, but only where it has been determined that the change is desirable or necessary in the best interest of the miner. The miner may
(c) If adequate treatment cannot be obtained in the area of the claimant's residence, the Office may authorize the use of physicians or medical facilities outside such area as well as reimbursement for travel expenses and overnight accommodations.
(a)
(1) Notify the miner and the providers chosen that such operator will be responsible for the cost of medical services provided to the miner on account of the miner's total disability due to pneumoconiosis;
(2) Designate a person or persons with decisionmaking authority with whom the Office, the miner and authorized providers may communicate on matters involving medical benefits provided under this subpart and notify the Office, miner and providers of such designation;
(3) Make arrangements for the direct reimbursement of providers for their services.
(b)
(a) Except as provided in paragraph (b) of this section, medical services from an authorized provider which are payable under § 725.701 shall not require prior approval of the Office or the responsible operator.
(b) Except where emergency treatment is required, prior approval of the Office or the responsible operator shall be obtained before any hospitalization or surgery, or before ordering an apparatus for treatment where the purchase price exceeds $300. A request for approval of non-emergency hospitalization or surgery shall be acted upon expeditiously, and approval or disapproval will be given by telephone if a written response cannot be given within 7 days following the request. No employee of the Department of Labor, other than a district director or the Chief, Branch of Medical Analysis and Services, DCMWC, is authorized to approve a request for hospitalization or surgery by telephone.
(c) Payment for medical services, treatment, or an apparatus shall be made at no more than the rate prevailing in the community in which the providing physician, medical facility or supplier is located.
(a) Within 30 days following the first medical or surgical treatment provided under § 725.701, the treating physician or facility shall furnish to the Office and the responsible operator, if any, a report of such treatment.
(b) In order to permit continuing supervision of the medical care provided to the miner with respect to the necessity, character and sufficiency of any medical care furnished or to be furnished, the treating physician, facility, employer or carrier shall provide such reports in addition to those required by paragraph (a) of this section as the Office may from time to time require. Within the discretion of the district director, payment may be refused to any medical provider who fails to submit any report required by this section.
(a) Whenever a dispute develops concerning medical services under this part, the district director shall attempt to informally resolve such dispute. In this regard the district director may, on his or her own initiative or at the request of the responsible operator order the claimant to submit to an examination by a physician selected by the district director.
(b) If no informal resolution is accomplished, the district director shall refer the case to the Office of Administrative Law Judges for hearing in accordance with this part. Any such hearing shall be scheduled at the earliest possible time and shall take precedence over all other requests for hearing except for prior requests for hearing arising under this section and as provided by § 727.405 of this subchapter (see § 725.4(d)). During the pendency of such adjudication, the Director may order the payment of medical benefits prior to final adjudication under the same conditions applicable to benefits awarded under § 725.522.
(c) In the development or adjudication of a dispute over medical benefits, the adjudication officer is authorized to take whatever action may be necessary to protect the health of a totally disabled miner.
(d) Any interested medical provider may, if appropriate, be made a party to a dispute over medical benefits.
The objective of vocational rehabilitation is the return of a miner who is totally disabled for work in or around a coal mine and who is unable to utilize those skills which were employed in the miner's coal mine employment to gainful employment commensurate with such miner's physical impairment. This objective may be achieved through a program of re-evaluation and redirection of the miner's abilities, or retraining in another occupation, and selective job placement assistance.
Each miner who has been determined entitled to receive benefits under part C of title IV of the Act shall be informed by the OWCP of the availability and advisability of vocational rehabilitation services. If such miner chooses to avail himself or herself of vocational rehabilitation, his or her request shall be processed and referred by OWCP vocational rehabilitation advisors pursuant to the provisions of §§ 702.501 through 702.508 of this chapter as is appropriate.
5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 FR 3174, 30 U.S.C. 901
Section 423 of title IV of the Federal Coal Mine Health and Safety Act as amended (hereinafter the Act) requires each coal mine operator who is operating or has operated a coal mine in a State which is not included in the list published by the Secretary (see part 722 of this subchapter) to secure the payment of benefits for which he may be found liable under section 422 of the Act and the provisions of this subchapter by either:
(a) Qualifying as a self-insurer, or
(b) By subscribing to and maintaining in force a commercial insurance contract (including a policy or contract procured from a State agency).
(a) This part provides rules directing and controlling the circumstances under which a coal mine operator shall fulfill his insurance obligations under the Act.
(b) This Subpart A sets forth the scope and purpose of this part and generally describes the statutory framework within which this part is operative.
(c) Subpart B of this part sets forth the criteria a coal mine operator must meet in order to qualify as a self-insurer.
(d) Subpart C of this part sets forth the rules and regulations of the Secretary governing contracts of insurance entered into by coal mine operators and commercial insurance sources for the payment of black lung benefits under part C of the Act.
(e) Subpart D of this part sets forth the rules governing the imposition of civil money penalties on coal mine operators that fail to secure their liability under the Act.
(a) This part 726 implements and effectuates responsibilities for the payment of black lung benefits placed upon coal mine operators by sections 415 and 422 of the Act and the regulations of the Secretary in this subchapter, particularly those set forth in part 725 of this subchapter. All definitions, usages, procedures, and other rules affecting the responsibilities of coal mine operators prescribed in part 725 of this subchapter are hereby made applicable, as appropriate, to this part 726.
(b) If the provisions of this part appear to conflict with any provision of any other part in this subchapter, the apparently conflicting provisions should be read harmoniously to the fullest extent possible. If a harmonious interpretation is not possible, the provisions of this part should be applied to govern the responsibilities and obligations of coal mine operators to secure the payment of black lung benefits as prescribed by the Act. The provisions of this part do not apply to matters falling outside the scope of this part.
(a) Section 423 of part C of title IV of the Act requires each operator of a coal mine or former operator in any State which does meet the requirements prescribed by the Secretary pursuant to section 411 of part C of title IV of the Act to self-insure or obtain a policy or contract of insurance to guarantee the payment of benefits for which such operator may be adjudicated liable under section 422 of the Act. In enacting sections 422 and 423 of the Act Congress has unambiguously expressed its intent that coal mine operators bear the cost of providing the benefits established by part C of title IV of the Act. Section 3 of the Act defines an “operator” as any owner, lessee, or other person who operates, controls, or supervises a coal mine.
(b) Section 422(i) of the Act clearly recognizes that any individual or business entity who is or was a coal mine operator may be found liable for the payment of pneumoconiosis benefits after December 31, 1973. Within this framework it is clear that the Secretary has wide latitude for determining which operator shall be liable for the payment of part C benefits. Comprehensive standards have been promulgated in subpart G of part 725 of this subchapter for the purpose of guiding the Secretary in making such determination. It must be noted that pursuant to these standards any parent or subsidiary corporation, any individual or corporate partner, or partnership, any lessee or lessor of a coal mine, any joint venture or participant in a joint venture, any transferee or transferor of a corporation or other business entity, any former, current, or future operator or any other form of business entity which has had or will have a substantial and reasonably direct interest in the operation of a coal mine may be determined liable for the payment of pneumoconiosis benefits after December 31, 1973. The failure of any such business entity to self-insure or obtain a
Pursuant to section 422(c) of part C of title IV of the Act, no coal mine operator shall be responsible for the payment of any benefits whatsoever for any period prior to January 1, 1974. However, coal mine operators shall be liable as of January 1, 1974, for the payment of benefits in respect of claims which were filed under section 415 of part B of title IV of the Act after July 1, 1973. Section 415(a)(3) requires the Secretary to notify any operator who may be liable for the payment of benefits under part C of title IV beginning on January 1, 1974, of the pendency of a section 415 claim. Section 415(a)(5) declares that any operator who has been notified of the pendency of a section 415 claim shall be bound by the determination of the Secretary as to such operator's liability and as to the claimant's entitlement to benefits as if the claim were filed under part C of title IV of the Act and section 422 thereof had been applicable to such operator. Therefore, even though no benefit payments shall be required of an operator prior to January 1, 1974, the liability for these payments may be finally adjudicated at any time after July 1, 1973. Neither the failure of an operator to exercise his right to participate in the adjudication of such a claim nor the failure of an operator to obtain insurance coverage in respect of claims filed after June 30, 1973, but before January 1, 1974, shall excuse such operator from his liability for the payment of benefits to such claimants under part C of title IV of the Act.
The Office of Workers' Compensation Programs (hereinafter the Office or OWCP) is that subdivision of the Employment Standards Administration of the U.S. Department of Labor which has been empowered by the Secretary of Labor to carry out his functions under section 415 and part C of title IV of the Act. As noted throughout this part 726 the Office shall perform a number of functions with respect to the regulation of both the self-insurance and commercial insurance programs. All correspondence with or submissions to the Office should be addressed as follows:
Any information required by this part 726 to be submitted to the Office of Workmen's Compensation Programs or any other office or official of the Department of Labor, shall be submitted on such forms or in such manner as the Secretary deems appropriate and has authorized from time to time for such purposes.
In addition to the definitions provided in part 725 of this subchapter, the following definitions apply to this part:
(a)
(b)
(c)
(d) The terms
(a) Pursuant to section 423 of part C of title IV of the Act, authorization to self-insure against liability incurred by coal mine operators on account of the total disability or death of miners due to pneumoconiosis may be granted or denied in the discretion of the Secretary. The provisions of this subpart describe the minimum requirements established by the Secretary for determining whether any particular coal mine operator shall be authorized as a self-insurer.
(b) The minimum requirements which must be met by any operator seeking authorization to self-insure are as follows:
(1) The operator must, at the time of application, have been in the business of mining coal for at least the 3 consecutive years prior to such application; and,
(2) The operator must demonstrate the administrative capacity to fully service such claims as may be filed against him; and,
(3) The operator's average current assets over the preceding 3 years (in computing average current assets such operator shall not include the amount of any negotiable securities which he may be required to deposit to secure his obligations under the Act) must exceed current liabilities by the sum of—
(i) The estimated aggregate amount of black lung benefits (including medical benefits) which such operator may expect to be required to pay during the ensuing year; and,
(ii) The annual premium cost for any indemnity bond purchased; and
(4) Such operator must obtain security, in a form approved by the Office (see § 726.104) and in an amount to be determined by the Office (see § 726.105); and
(5) No operator with fewer than 5 full-time employee-miners shall be permitted to self-insure.
(c) No operator who is unable to meet the requirements of this section should apply for authorization to self-insure and no application for self-insurance shall be approved by the Office until such time as the amount prescribed by the Office has been secured in accordance with this subpart.
(a)
(b)
(1) A statement of the employer's payroll report for each of the preceding 3 years;
(2) A statement of the average number of employees engaged in employment within the purview of the Act for each of the preceding 3 years;
(3) A list of the mine or mines to be covered by any particular self-insurance agreement. Each such mine or mines listed shall be described by name and reference shall be made to the Federal Identification Number assigned such mine by the Bureau of Mines, U.S. Department of the Interior;
(4) A certified itemized statement of the gross and net assets and liabilities of the operator for each of the 3 preceding years in such manner as prescribed by the Office;
(5) A statement demonstrating the applicant's administrative capacity to provide or procure adequate servicing for a claim including both medical and dollar claims; and
(6) In addition to the aforementioned, the Office may in its discretion, require the applicant to submit such further information or such evidence as the Office may deem necessary to have in order to enable it to give adequate consideration to such application.
(c)
As appropriate, each of the regulations, interpretations and requirements contained in this part 726 including those described in subpart C of this part shall be binding upon each applicant under this subpart, and the applicant's consent to be bound by all requirements of the said regulations shall be deemed to be included in and a part of the application, as fully as though written therein.
(a) Upon receipt of a completed application for authorization to self-insure, the Office shall, after examination of the information contained in the application, either deny the request or determine the amount of security which must be given by the applicant to guarantee the payment of benefits and the discharge of all other obligations which may be required of such applicant under the Act.
(b) The applicant shall thereafter be notified that he may give security in the amount fixed by the Office (see § 726.105):
(1) In the form of an indemnity bond with sureties satisfactory to the Office;
(2) By a deposit of negotiable securities with a Federal Reserve Bank in compliance with §§ 726.106(c) and 726.107;
(3) In the form of a letter of credit issued by a financial institution satisfactory to the Office (except that a letter of credit shall not be sufficient by itself to satisfy a self-insurer's obligations under this part); or
(4) By funding a trust pursuant to section 501(c)(21) of the Internal Revenue Code (26 U.S.C.).
(c) Any applicant who cannot meet the security deposit requirements imposed by the Office should proceed to obtain a commercial policy or contract of insurance. Any applicant for authorization to self-insure whose application has been rejected or who believes that the security deposit requirements imposed by the Office are excessive may, in writing, request that the Office review its determination. A request for review should contain such information as may be necessary to support the request that the amount of security required be reduced.
(d) Upon receipt of any such request, the Office shall review its previous determination in light of any new or additional information submitted and inform the applicant whether or not a reduction in the amount of security initially required is warranted.
The Office shall require the amount of security which it deems necessary and sufficient to secure the performance by the applicant of all obligations imposed upon him as an operator by the Act. In determining the amount of security required, the factors that the Office will consider include, but are not limited to, the operator's net worth, the existence of a guarantee by a parent corporation, and the operator's existing liability for benefits. The Office shall also consider such other factors as it considers relevant to any particular case. The amount of security which shall be required may be increased or decreased when experience or changed conditions so warrant.
(a) The Office shall determine the type or types of security which an applicant shall or may procure. (See § 726.104(b).)
(b) In the event the indemnity bond option is selected, the bond shall be in such form and contain such provisions as the Office may prescribe:
(c) An applicant for authorization to self-insure based on a deposit of negotiable securities, in the amount fixed by the Office, shall deposit any negotiable securities acceptable as security for the deposit of public moneys of the United States under regulations issued by the Secretary of the Treasury. (See 31 CFR Part 225.) The approval, valuation, acceptance, and custody of such securities is hereby committed to the several Federal Reserve Banks and the Treasurer of the United States.
Deposits of securities provided for by the regulations in this part shall be made with any Federal Reserve bank or any branch of a Federal Reserve bank designated by the Office, or the Treasurer of the United States, and shall be held subject to the order of the Office with power in the Office, in its
No withdrawal of negotiable securities deposited by a self-insurer, shall be made except upon authorization by the Office. A self-insurer discontinuing business, or discontinuing operations within the purview of the Act, or providing security for the payment of benefits by commercial insurance under the provisions of the Act may apply to the Office for the withdrawal of securities deposited under the regulations in this part. With such application shall be filed a sworn statement setting forth:
(a) A list of all outstanding cases in which benefits are being paid, with the names of the miners and other beneficiaries, giving a statement of the amounts of benefits paid and the periods for which such benefits have been paid; and
(b) A similar list of all pending cases in which no benefits have as yet been paid. In such cases withdrawals may be authorized by the Office of such securities as in the opinion of the Office may not be necessary to provide adequate security for the payment of outstanding and potential liabilities of such self-insurer under the Act.
Whenever in the opinion of the Office the amount of security given by the self-insurer is insufficient to afford adequate security for the payment of benefits and medical expenses under the Act, the self-insurer shall, upon demand by the Office, file such additional security as the Office may require. The Office may reduce the amount of security at any time on its own initiative, or upon the application of a self-insurer, when it believes the facts warrant a reduction. A self-insurer seeking a reduction shall furnish such information as the Office may request relative to his current affairs, the nature and hazard of the work of his employees, the amount of the payroll of his employees engaged in coal mine employment within the purview of the Act, his financial condition, and such other evidence as may be deemed material, including a record of benefit payments he has made.
(a) In addition to the requirement that adequate security be procured as set forth in this subpart, the applicant for the authorization to self-insure shall, as a condition precedent to receiving such authorization, execute and file with the Office an agreement and undertaking in a form prescribed and provided by the Office in which the applicant shall agree:
(1) To pay when due, as required by the Act, all benefits payable on account of total disability or death of any of its employee-miners;
(2) To furnish medical, surgical, hospital, and other attendance, treatment, and care as required by the Act;
(3) To provide security in a form approved by the Office (see § 726.104) and in an amount established by the Office (see § 726.105), as elected in the application;
(4) To authorize the Office to sell any negotiable securities so deposited or any part thereof, and to pay from the proceeds thereof such benefits, medical, and other expenses and any accrued penalties imposed by law as the Office may find to be due and payable.
(b) When an applicant has provided the requisite security, he shall send to the Office in Washington, D.C. a completed agreement and undertaking, together with satisfactory proof that his obligations and liabilities under the Act have been secured.
Upon receipt of a completed agreement and undertaking and satisfactory proof that adequate security has been provided, an applicant for authorization to self-insure shall be notified by the Office in writing that he is authorized to self-insure to meet the obligations imposed upon him by section 415 and part C of title IV of the Act.
(a) Each operator who has been authorized to self-insure under this part shall submit to the Office reports containing such information as the Office may from time to time require or prescribe.
(b) Whenever it deems it to be necessary, the Office may inspect or examine the books of account, records, and other papers of a self-insurer for the purpose of verifying any financial statement submitted to the Office by the self-insurer or verifying any information furnished to the Office in any report required by this section, or any other section of the regulations in this part, and such self-insurer shall permit the Office or its duly authorized representative to make such an inspection or examination as the Office shall require. In lieu of this requirement the Office may in its discretion accept an adequate report of a certified public accountant.
(c) Failure to submit or make available any report or information requested by the Office from an authorized self-insurer pursuant to this section may, in appropriate circumstances result in a revocation of the authorization to self-insure.
Any financial information or records, or other information relating to the business of an authorized self-insurer or applicant for the authorization of self-insurance obtained by the Office shall be exempt from public disclosure to the extent provided in 5 U.S.C. 552(b) and the applicable regulations of the Department of Labor promulgated thereunder. (See 29 CFR part 70.)
(a) No initial authorization to self-insure shall be granted for a period in excess of 18 months. A self-insurer who has made an adequate deposit of negotiable securities in compliance with §§ 726.106(c) and 726.107 will be reauthorized for the ensuing fiscal year without additional security if the Office finds that his experience as a self-insurer warrants such action. If the Office determines that such self-insurer's experience indicates a need for the deposit of additional security, no reauthorization shall be issued for the ensuing fiscal year until the Office receives satisfactory proof that the requisite amount of additional securities has been deposited. A self-insurer who currently has on file an indemnity bond will receive from the Office each year a bond form for execution in contemplation of reauthorization, and the submission of such bond duly executed in the amount indicated by the Office will be deemed and treated as such self-insurer's application for reauthorization for the ensuing fiscal year.
(b) In each case for which there is an approved change in the amount of
(c) Each operator authorized to self-insure under this part shall apply for reauthorization for any period during which it engages in the operation of a coal mine and for additional periods after it ceases operating a coal mine. Upon application by the operator, accompanied by proof that the security it has posted is sufficient to secure all benefits potentially payable to miners formerly employed by the operator, the Office shall issue a certification that the operator is exempt from the requirements of this part based on its prior operation of a coal mine. The provisions of subpart D of this part shall be applicable to any operator that fails to apply for reauthorization in accordance with the provisions of this section.
The Office may for good cause shown suspend or revoke the authorization of any self-insurer. Failure by a self-insurer to comply with any provision or requirement of law or of the regulations in this part, or with any lawful order or communication of the Office, or the failure or insolvency of the surety on his indemnity bond, or impairment of financial responsibility of such self-insurer, may be deemed good cause for such suspension or revocation.
Each operator of a coal mine who has not obtained authorization as a self-insurer shall purchase a policy or enter into a contract with a commercial insurance carrier or State agency. Pursuant to authority contained in sections 422(a) and 423(b) and (c) of part C of title IV of the Act, this subpart describes a number of provisions which are required to be incorporated in a policy or contract of insurance obtained by a coal mine operator for the purpose of meeting the responsibility imposed upon such operator by the Act in respect of the total disability or death of miners due to pneumoconiosis.
Each coal mine operator who is not authorized to self-insure shall insure and keep insured the payment of benefits as required by the Act with any stock company or mutual company or association, or with any other person, or fund, including any State fund while such company, association, person, or fund is authorized under the law of any State to insure workmen's compensation.
(a) The following form of endorsement shall be attached and applicable to the standard workmen's compensation and employer's liability policy prepared by the National Council on Compensation Insurance affording coverage under the Federal Coal Mine Health and Safety Act of 1969, as amended:
It is agreed that: (1) With respect to operations in a State designated in item 3 of the declarations, the unqualified term “workmen's compensation law” includes part C of title IV of the Federal Coal Mine Health and Safety Act of 1969, 30 U.S.C. section 931-936, and any laws amendatory thereto, or supplementary thereto, which may be or become effective while this policy is in force, and definition (a) of Insuring Agreement III is amended accordingly; (2) with respect to such insurance as is afforded by this endorsement, (a) the States, if any, named below, shall be deemed to be designated in item 3 of the declaration; (b) Insuring Agreement IV(2) is amended to read “by disease caused or aggravated by exposure of which the last day of the last exposure, in the employment of the insured, to conditions causing the disease occurs during the policy period, or occurred prior to (effective date) and claim based on such disease is first filed against the insured during the policy period.”
(b) The term “effective date” as used in paragraph (a) of this section shall be construed to mean the effective date of the first policy or contract of insurance procured by an operator for purposes of meeting the obligations imposed on such operator by section 423 of part C of title IV of the Act.
(c) The Act contains a number of provisions and imposes a number of requirements on operators which differ in varying degrees from traditional workmen's compensation concepts. To avoid unnecessary administrative delays and expense which might be occasioned by the drafting of an entirely new standard workmen's compensation policy specially tailored to the Act, the Office has determined that the existing standard workmen's compensation policy subject to the endorsement provisions contained in paragraph (a) of this section shall be acceptable for purposes of writing commercial insurance coverage under the Act. However, to avoid undue disputes over the meaning of certain policy provisions and in accordance with the authority contained in section 423(b)(3) of the Act, the Office has determined that the following requirements shall be applicable to all commercial insurance policies obtained by an operator for the purpose of insuring any liability incurred pursuant to the Act:
(1)
(ii) Section 422(c) of the Act prescribes that except as provided in 422(i) (see paragraph (c)(2) of this section) an operator may be adjudicated liable for the payment of benefits in any case if the total disability or death due to pneumoconiosis upon which the claim is predicated arose at least in part out of employment in a mine in any period during which it was operated by such operator. The Act does not require that such employment which contributed to or caused the total disability or death due to pneumoconiosis occur subsequent to any particular date in time. The Secretary in establishing a formula for determining the operator liable for the payment of benefits (see subpart D of part 725 of this subchapter) in respect of any particular claim, must therefore, within the framework and intent of title IV of the Act find in appropriate cases that an operator is liable for the payment of benefits for some period after December 31, 1973, even though the employment upon which an operator's liability is based occurred prior to July 1, 1973, or prior to the effective date of the Act or the effective date of any amendments thereto, or prior to the effective date of any policy or contract of insurance obtained by such operator. The endorsement provisions contained in paragraph (a) of this section shall be construed to incorporate these requirements in any policy or contract of insurance obtained by an operator to meet the obligations imposed on such operator by section 423 of the Act.
(2)
(3)
(4)
(5)
(6)
(d) Nothing in this section shall relieve any operator or carrier of the duty to comply with any State workmen's compensation law, except insofar as such State law is in conflict with the provisions of this section.
Pursuant to section 423(b) of part C of title IV of the Act each policy or contract of insurance obtained to comply with the requirements of section 423(a) of the Act must contain or shall be construed to contain—
(a) A provision to pay benefits required under section 422 of the Act, notwithstanding the provisions of the State workmen's compensation law which may provide for lesser payments; and,
(b) A provision that insolvency or bankruptcy of the operator or discharge therein (or both) shall not relieve the carrier from liability for such payments.
Forms of endorsement or policies other than that described in § 726.203 may be entered into by operators to insure their liability under the Act. However, any form of endorsement or policy which materially alters or attempts to materially alter an operator's liability for the payment of any benefits under the Act shall be deemed insufficient to discharge such operator's duties and responsibilities as prescribed in part C of title IV of the Act. In any event, the failure of an operator to obtain an adequate policy or contract of insurance shall not affect such operator's liability for the payment of any benefits for which he is determined liable.
A policy or contract of insurance shall be issued for the term of 1 year from the date that it becomes effective, but if such insurance be not needed except for a particular contract or operation, the term of the policy may be limited to the period of such contract or operation.
Every obligation and duty in respect of payment of benefits, the providing of medical and other treatment and care, the payment or furnishing of any other benefit required by the Act and in respect of the carrying out of the administrative procedure required or imposed by the Act or the regulations in this part or part 725 of this subchapter upon an operator shall be discharged and carried out by the carrier as appropriate. Notice to or knowledge of an operator of the occurrence of total disability or death due to pneumoconiosis shall be notice to or knowledge of such carrier. Jurisdiction of the operator by a district director, administrative law judge, the Office, or appropriate appellate authority under the Act shall be jurisdiction of such carrier. Any requirement under any benefits order, finding, or decision shall be binding upon such carrier in the same manner and to the same extent as upon the operator.
Each carrier shall report to the Office each policy and endorsement issued, canceled, or renewed by it to an operator. The report shall be made in such manner and on such form as the Office may require.
The report of issuance, cancellation, or renewal of a policy and endorsement provided for in § 726.208 shall be sent by the home office of the carrier, except that any carrier may authorize its agency or agencies to make such reports to the Office.
Every carrier seeking to write insurance under the provisions of the
A separate report of the issuance or renewal of a policy and endorsement, provided for by § 726.208, shall be made for each operator covered by a policy. If a policy is issued or renewed insuring more than one operator, a separate report for each operator so covered shall be sent to the Office with the name of only one operator on each such report.
Cancellation of a contract or policy of insurance issued under authority of the Act shall not become effective otherwise than as provided by 33 U.S.C. 936(b); and notice of a proposed cancellation shall be given to the Office and to the operator in accordance with the provisions of 33 U.S.C. 912(c), 30 days before such cancellation is intended to be effective (see section 422(a) of part C of title IV of the Act).
Pursuant to 33 U.S.C. 914(c) as incorporated by section 422(a) of part C of title IV of the Act and § 726.207 each carrier issuing a policy or contract of insurance under the Act shall upon making the first payment of benefits and upon the suspension of any payment in any case, immediately notify the Office in accordance with a form prescribed by the Office that payment of benefit has begun or has been suspended as the case may be. In addition, each such carrier shall at the request of the Office submit to the Office such additional information concerning policies or contracts of insurance issued to guarantee the payment of benefits under the Act and any benefits paid thereunder, as the Office may from time to time require to carry out its responsibilities under the Act.
Any operator which is required to secure the payment of benefits under section 423 of the Act and § 726.4 and which fails to secure such benefits, shall be subject to a civil penalty of not more than $1,000 for each day during which such failure occurs. If the operator is a corporation, the president, secretary, and treasurer of the operator shall also be severally liable for the penalty based on the operator's failure to secure the payment of benefits. This subpart defines those terms necessary for administration of the civil money penalty provisions, describes the criteria for determining the amount of penalty to be assessed, and sets forth applicable procedures for the assessment and contest of penalties.
In addition to the definitions provided in part 725 of this subchapter and § 726.8, the following definitions apply to this subpart:
(a)
(b)
(c)
(a) The following method shall be used for determining the amount of any penalty assessed under this subpart.
(b) The penalty shall be determined by multiplying the daily base penalty amount or amounts, determined in accordance with the formula set forth in this section, by the number of days in the period during which the operator is subject to the security requirements of section 423 of the Act and § 726.4, and fails to secure its obligations under the Act. The period during which an operator is subject to liability for a penalty for failure to secure its obligations shall be deemed to commence on the first day on which the operator met the definition of the term “operator” as set forth in § 725.101 of this subchapter. The period shall be deemed to continue even where the operator has ceased coal mining and any related activity, unless the operator secured its liability for all previous periods through a policy or policies of insurance obtained in accordance with subpart C of this part or has obtained a certification of exemption in accordance with the provisions of § 726.114.
(c)(1) A daily base penalty amount shall be determined for all periods up to and including the 10th day after the operator's receipt of the notification sent by the Director pursuant to § 726.303, during which the operator failed to secure its obligations under section 423 of the Act and § 726.4.
(2)(i) The daily base penalty amount shall be determined based on the number of persons employed in coal mine employment by the operator, or engaged in coal mine employment on behalf of the operator, on each day of the period defined by this section, and shall be computed as follows:
(ii) For any period after the operator has ceased coal mining and any related activity, the daily penalty amount shall be computed based on the largest number of persons employed in coal mine employment by the operator, or engaged in coal mine employment on behalf of the operator, on any day while the operator was engaged in coal mining or any related activity. For purposes of this section, it shall be presumed, in the absence of evidence to the contrary, that any person employed by an operator is employed in coal mine employment.
(3) In any case in which the operator had prior notice of the applicability of the Black Lung Benefits Act to its operations, the daily base penalty amounts set forth in paragraph (c)(2)(i) of this section shall be doubled. Prior notice may be inferred where the operator, or an entity in which the operator or any of its principals had an ownership interest, or an entity in which the operator's president, secretary, or treasurer were employed:
(i) Previously complied with section 423 of the Act and § 726.4;
(ii) Was notified of its obligation to comply with section 423 of the Act and § 726.4; or
(iii) Was notified of its potential liability for a claim filed under the Black Lung Benefits Act pursuant to § 725.407 of this subchapter.
(4) Commencing with the 11th day after the operator's receipt of the
(5) In any case in which the operator, or any of its principals, or an entity in which the operator's president, secretary, or treasurer were employed, has been the subject of a previous penalty assessment under this part, the daily base penalty amounts shall be increased by $300, up to a maximum daily base penalty amount of $1,000. The maximum daily base penalty amount applicable to any violation of § 726.4 that takes place after January 19, 2001 shall be $1,100.
(d) The penalty shall be subject to reduction for any period during which the operator had a reasonable belief that it was not required to comply with section 423 of the Act and § 726.4 or a reasonable belief that it had obtained insurance coverage to comply with section 423 of the Act and § 726.4. A notice of contest filed in accordance with § 726.307 shall not be sufficient to establish a reasonable belief that the operator was not required to comply with the Act and regulations.
(a) If the Director determines that an operator has violated the provisions of section 423 of the Act and § 726.4, he or she shall notify the operator of its violation and request that the operator immediately secure the payment of benefits. Such notice shall be sent by certified mail.
(b) The Director shall also direct the operator to supply information relevant to the assessment of a penalty. Such information, which shall be supplied within 30 days of the Director's request, may include:
(1) The date on which the operator commenced its operation of a coal mine;
(2) The number of persons employed by the operator since it began operating a coal mine and the dates of their employment; and
(3) The identity and last known address:
(i) In the case of a corporation, of all persons who served as president, secretary, and treasurer of the operator since it began operating a coal mine; or
(ii) In the case of an operator which is not incorporated, of all persons who were principals of the operator since it began operating a coal mine;
(c) In conducting any investigation of an operator under this subpart, the Division Director shall have all of the powers of a district director, as set forth at § 725.351(a) of this subchapter. For purposes of § 725.351(c), the Division Director shall be considered to sit in the District of Columbia.
(a) After an operator receives notification under § 726.303 and fails to secure its obligations for the period defined in § 726.302(b), and following the completion of any investigation, the Director may issue a notice of initial penalty assessment in accordance with the criteria set forth in § 726.302.
(b)(1) A copy of such notice shall be sent by certified mail to the operator. If the operator is a corporation, a copy shall also be sent by certified mail to each of the persons who served as president, secretary, or treasurer of the operator during any period in which the operator was in violation of section 423 of the Act and § 726.4.
(2) Where service by certified mail is not accepted by any person, the notice shall be deemed received by that person on the date of attempted delivery. Where service is not accepted, the Director may exercise discretion to serve the notice by regular mail.
The notice required by § 726.304 shall:
(a) Identify the operator against whom the penalty is assessed, as well as the name of any other person severally liable for such penalty;
(b) Set forth the determination of the Director as to the amount of the penalty and the reason or reasons therefor;
(c) Set forth the right of each person identified in paragraph (a) of this section to contest the notice and request a hearing before the Office of Administrative Law Judges;
(d) Set forth the method for each person identified in paragraph (a) to contest the notice and request a hearing before the Office of Administrative Law Judges; and
(e) Inform any affected person that in the absence of a timely contest and request for hearing received within 30 days of the date of receipt of the notice, the Director's assessment will become final and unappealable as to that person.
Except as provided in § 726.307(c), if any person identified as potentially liable for the assessment does not, within 30 days after receipt of notice, contest the assessment, the Director's assessment shall be deemed final as to that person, and collection and recovery of the penalty may be instituted pursuant to § 726.320.
(a) Any person desiring to contest the Director's notice of initial assessment shall request an administrative hearing pursuant to this part. The notice of contest shall be made in writing to the Director, Division of Coal Mine Workers' Compensation, Office of Workers' Compensation Programs, Employment Standards Administration, United States Department of Labor. The notice of contest must be received no later than 30 days after the date of receipt of the notice issued under § 726.304. No additional time shall be added where service of the notice is made by mail.
(b) The notice of contest shall:
(1) Be dated;
(2) Be typewritten or legibly written;
(3) State the specific issues to be contested. In particular, the person must indicate his agreement or disagreement with:
(i) The Director's determination that the person against whom the penalty is assessed is an operator subject to the requirements of section 423 of the Act and § 726.4, or is the president, secretary, or treasurer of an operator, if the operator is a corporation.
(ii) The Director's determination that the operator violated section 423 of the Act and § 726.4 for the time period in question; and
(iii) The Director's determination of the amount of penalty owed;
(4) Be signed by the person making the request or an authorized representative of such person; and
(5) Include the address at which such person or authorized representative desires to receive further communications relating thereto.
(c) A notice of contest filed by the operator shall be deemed a notice of contest on behalf of all other persons to the Director's determinations that the operator is subject to section 423 of the Act and § 726.4 and that the operator violated those provisions for the time period in question, and to the Director's determination of the amount of penalty owed. An operator may not contest the Director's determination that a person against whom the penalty is assessed is the president, secretary, or treasurer of the operator.
(d) Failure to specifically identify an issue as contested pursuant to paragraph (b)(3) of this section shall be deemed a waiver of the right to contest that issue.
(a) Service of documents under this part shall be made by delivery to the person, an officer of a corporation, or
(b) If a complaint has been filed pursuant to § 726.309, two copies of all documents filed in any administrative proceeding under this subpart shall be served on the attorneys for the Department of Labor. One copy shall be served on the Associate Solicitor, Black Lung Benefits Division, Room N-2117, Office of the Solicitor, U.S. Department of Labor, 200 Constitution Ave., NW., Washington, DC 20210, and one copy on the attorney representing the Department in the proceeding.
(c) The time allowed a party to file any response under this subpart shall be computed beginning with the day following the action requiring a response, and shall include the last day of the period, unless it is a Saturday, Sunday, or federally-observed holiday,
(a) Upon receipt of a timely notice of contest filed in accordance with § 726.307, the Director, by the Associate Solicitor for Black Lung Benefits or the Regional Solicitor for the Region in which the violation occurred, may file a complaint with the Office of Administrative Law Judges. The Director may, in the complaint, reduce the total penalty amount requested. A copy of the notice of initial assessment issued by the Director and all notices of contest filed in accordance with § 726.307 shall be attached. A notice of contest shall be given the effect of an answer to the complaint for purposes of the administrative proceeding, subject to any amendment that may be permitted under this subpart and 29 CFR part 18.
(b) A copy of the complaint and attachments thereto shall be served by counsel for the Director on the person who filed the notice of contest.
(c) The Director, by counsel, may withdraw a complaint filed under this section at any time prior to the date upon which the decision of the Department becomes final by filing a motion with the Office of Administrative Law Judges or the Secretary, as appropriate. If the Director makes such a motion prior to the date on which an administrative law judge renders a decision in accordance § 726.313, the dismissal shall be without prejudice to further assessment against the operator for the period in question.
Upon receipt from the Director of a complaint filed pursuant to § 726.309, the Chief Administrative Law Judge shall appoint an Administrative Law Judge to hear the case. The Administrative Law Judge shall notify all interested parties of the time and place of the hearing.
(a) Except as specifically provided in this subpart, and to the extent they do not conflict with the provisions of this subpart, the Rules of Practice and Procedure for Administrative Hearings Before the Office of Administrative Law Judges established by the Secretary at 29 CFR part 18 shall apply to administrative proceedings under this subpart.
(b) Notwithstanding 29 CFR 18.1101(b)(2), subpart B of the Rules of Practice and Procedure for Administrative Hearings Before the Office of Administrative Law Judges shall apply to administrative proceedings under this part, except that documents contained in Department of Labor files and offered on behalf of the Director shall be admissible in proceedings under this subpart without regard to their compliance with the Rules of Practice and Procedure.
(a) The Director shall bear the burden of proving the existence of a violation, and the time period for which the violation occurred. To prove a violation, the Director must establish:
(1) That the person against whom the penalty is assessed is an operator, or is the president, secretary, or treasurer of an operator, if such operator is a corporation.
(2) That the operator violated section 423 of the Act and § 726.4. The filing of a complaint shall be considered
(b) The Director need not produce further evidence in support of his burden of proof with respect to the issues set forth in paragraph (a) if no party contested them pursuant to § 726.307(b)(3).
(c) The Director shall bear the burden of proving the size of the operator as required by § 726.302, except that if the Director has requested the operator to supply information with respect to its size under § 726.303 and the operator has not fully complied with that request, it shall be presumed that the operator has more than 100 employees engaged in coal mine employment. The person or persons liable for the assessment shall thereafter bear the burden of proving the actual number of employees engaged in coal mine employment.
(d) The Director shall bear the burden of proving the operator's receipt of the notification required by § 726.303, the operator's prior notice of the applicability of the Black Lung Benefits Act to its operations, and the existence of any previous assessment against the operator, the operator's principals, or the operator's officers.
(e) The person or persons liable for an assessment shall bear the burden of proving the applicability of the mitigating factors listed in § 726.302(d).
(a) The Administrative Law Judge shall render a decision on the issues referred by the Director.
(b) The decision of the Administrative Law Judge shall be limited to determining, where such issues are properly before him or her:
(1) Whether the operator has violated section 423 of the Act and § 726.4;
(2) Whether other persons identified by the Director as potentially severally liable for the penalty were the president, treasurer, or secretary of the corporation during the time period in question; and
(3) The appropriateness of the penalty assessed by the Director in light of the factors set forth in § 726.302. The Administrative Law Judge shall not render determinations on the legality of a regulatory provision or the constitutionality of a statutory provision.
(c) The decision of the Administrative Law Judge shall include a statement of findings and conclusions, with reasons and bases therefor, upon each material issue presented on the record. The decision shall also include an appropriate order which may affirm,
(d) The Administrative Law Judge shall serve copies of the decision on each of the parties by certified mail.
(e) The decision of the Administrative Law Judge shall be deemed to have been issued on the date that it is rendered, and shall constitute the final order of the Secretary unless there is a request for reconsideration by the Administrative Law Judge pursuant to paragraph (f) of this section or a petition for review filed pursuant to § 726.314.
(f) Any party may request that the Administrative Law Judge reconsider his or her decision by filing a motion within 30 days of the date upon which the decision of the Administrative Law Judge is issued. A timely motion for reconsideration shall suspend the running of the time for any party to file a petition for review pursuant to § 726.314.
(g) Following issuance of the decision and order, the Chief Administrative Law Judge shall promptly forward the complete hearing record to the Director.
(a) The Director or any party aggrieved by a decision of the Administrative Law Judge may petition the Secretary for review of the decision by filing a petition within 30 days of the date on which the decision was issued. Any other party may file a cross-petition for review within 15 days of its receipt of a petition for review or within 30 days of the date on which the decision was issued, whichever is later. Copies of any petition or cross-petition shall be served on all parties and on the Chief Administrative Law Judge.
(b) A petition filed by one party shall not affect the finality of the decision with respect to other parties.
(c) If any party files a timely motion for reconsideration, any petition for review, whether filed prior to or subsequent to the filing of the timely motion for reconsideration, shall be dismissed without prejudice as premature. The 30-day time limit for filing a petition for review by any party shall commence upon issuance of a decision on reconsideration.
Any petition or cross-petition for review shall:
(a) Be dated;
(b) Be typewritten or legibly written;
(c) State the specific reason or reasons why the party petitioning for review believes the Administrative Law Judge's decision is in error;
(d) Be signed by the party filing the petition or an authorized representative of such party; and
(e) Attach copies of the Administrative Law Judge's decision and any other documents admitted into the record by the Administrative Law Judge which would assist the Secretary in determining whether review is warranted.
(a)
(b)
(c)
(d)
(a) Following receipt of a timely petition for review, the Secretary shall determine whether the decision warrants review, and shall send a notice of such determination to the parties and the Chief Administrative Law Judge. If the Secretary declines to review the decision, the Administrative Law Judge's decision shall be considered the final decision of the agency. The Secretary's determination to review a decision by an Administrative Law Judge under this subpart is solely within the discretion of the Secretary.
(b) The Secretary's notice shall specify:
(1) The issue or issues to be reviewed; and
(2) The schedule for submitting arguments, in the form of briefs or such other pleadings as the Secretary deems appropriate.
(c) Upon receipt of the Secretary's notice, the Director shall forward the record to the Secretary.
The Secretary's review shall be based upon the hearing record. The findings of fact in the decision under review shall be conclusive if supported by substantial evidence in the record as a whole. The Secretary's review of conclusions of law shall be
The official record of every completed administrative hearing held pursuant to this part shall be maintained and filed under the custody and control of the Director.
(a) When the determination of the amount of any civil money penalty provided for in this part becomes final, in accordance with the administrative assessment thereof, or pursuant to the decision and order of an Administrative Law Judge, or following the decision of the Secretary, the amount of the penalty as thus determined is immediately due and payable to the U.S. Department of Labor on behalf of the Black Lung Disability Trust Fund. The person against whom such penalty has been assessed or imposed shall promptly remit the amount thereof, as finally determined, to the Secretary by certified check or by money order, made payable to the order of U.S. Department of Labor, Black Lung Program. Such remittance shall be delivered or mailed to the Director.
(b) If such remittance is not received within 30 days after it becomes due and payable, it may be recovered in a civil action brought by the Secretary in any court of competent jurisdiction, in which litigation the Secretary shall be represented by the Solicitor of Labor.
Employment and Training Administration, Labor, in concurrence with the Wage and Hour Division, Employment Standards Administration, Labor.
Interim final rule; request for comments.
This document contains interim final regulations implementing recent legislation and clarifying existing Departmental rules relating to the temporary employment in the United States of nonimmigrants under H-1B visas. On January 5, 1999, the Department published a notice of proposed rulemaking (64 FR 628) seeking public comment on issues to be addressed in regulations to implement changes made to the Immigration and Nationality Act (INA) by the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA). In particular, the ACWIA requires H-1B-dependent employers and willful violators to comply with certain additional attestations regarding anti-displacement and recruitment obligations. The Department also sought further comment on certain proposals which were previously published for comment as a Proposed Rule on October 31, 1995 (60 FR 55339), and on certain interpretations of the statutes and its existing regulations which the Department proposed to incorporate in the regulations.
Submit written comments concerning Part 655 to Deputy Administrator, Wage and Hour Division, ATTN: Immigration Team, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., Washington, D.C. 20210. Commenters who wish to receive notification of receipt of comments are requested to include a self-addressed, stamped post card. Comments may also be transmitted by facsimile (“FAX”) machine to (202) 693-1432. This is not a toll-free number.
Submit written comments concerning Part 656 to the Assistant Secretary for Employment and Training, ATTN: Division of Foreign Labor Certifications, U.S. Employment Service, Employment and Training Administration, Department of Labor, Room C-4318, 200 Constitution Avenue, NW., Washington, DC 20210. Commenters who wish to receive notification of receipt of comments are requested to include a self-addressed, stamped post card. Comments may also be transmitted by facsimile (“FAX”) machine to (202) 693-2769. This is not a toll-free number.
Michael Ginley, Director, Office of Enforcement Policy, Wage and Hour Division, Employment Standards Administration, Department of Labor, Room S-3510, 200 Constitution Avenue, NW., Washington, DC 20210. Telephone: (202) 693-0745 (this is not a toll-free number).
James Norris, Chief, Division of Foreign Labor Certifications, U.S. Employment Service, Employment and Training Administration, Department of Labor, Room C-4318, 200 Constitution Avenue, NW., Washington, DC 20210. Telephone: (202) 693-3010 (this is not a toll-free number).
The H-1B nonimmigrant program is a voluntary program that allows employers to temporarily import and employ nonimmigrants admitted under H-1B visas to fill specialized jobs not filled by U.S. workers. (Immigration and Nationality Act (INA), 8 U.S.C. 1101(a)(15)(H)(I)(b), 1182(n), 1184(c)). The statute, among other things, requires that an employer pay an H-1B worker the higher of the actual wage or the prevailing wage, to protect U.S. workers' wages and eliminate any economic incentive or advantage in hiring temporary foreign workers.
Under the Immigration and Nationality Act (INA), as amended by the Immigration Act of 1990 (Act), and as amended by the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991, an employer seeking to employ an alien in a specialty occupation or as a fashion model of distinguished merit and ability on an H-1B visa is required to file a labor condition application with and receive certification from DOL before the Immigration and Naturalization Service (INS) may approve an H-1B petition. The labor condition application process is administered by ETA; complaints and investigations regarding labor condition applications are the responsibility of ESA.
On January 5, 1999, the Department of Labor (DOL) published a proposed rule which would implement statutory changes in the H-1B program made to the INA by the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) (Title IV, Pub. L. 105-277). The ACWIA, as amended by the American Competitiveness in the Twenty-First Century Act of 2000 (Pub. L. 106-313), among other things, temporarily (until October 2003) increases the maximum number of H-1B visas permitted each year; temporarily requires new non-displacement (layoff) and recruitment attestations by “H-1B dependent” employers (as defined by the ACWIA) and willfully violating employers; and requires employers to offer the same fringe benefits to H-1B workers on the same basis as it offers fringe benefits to U.S. workers. The public was invited to comment on the proposed rule, including the information collection requirements noted below. In addition, pursuant to the Paperwork Reduction Act of 1990, DOL submitted a paperwork package to the Office of Management and Budget (OMB), requesting review and approval of the information collection requirements included in the proposed rule.
Since publication of the NPRM, additional amendments to the H-1B provisions were enacted by the American Competitiveness in the Twenty-first Century Act of 2000 (Pub. L. 106-313, 114 Stat. 1251, October 17, 2000), the Immigration and Nationality Act—Amendments (Pub. L. 106-311, 114 Stat. 1247, October 17, 2000), and section 401 of the Visa Waiver Permanent Program Act (Pub. L. 106-396, 114 Stat. 1637, October 30, 2000) (collectively, the October 2000 Amendments). Most pertinent to these regulations were provisions that raised the ceiling on the number of H-1B visas that may be issued and extended the
Comments were received from members of Congress, OMB, law firms, information technology industry associations, other industry associations, information technology firms, research firms, other employers of H-1B workers, Federal agencies and individuals. Commenters questioned DOL authority under the ACWIA and/or the Immigration and Nationality Act to impose the paperwork requirements contained in the proposed rule. Further, commenters questioned the DOL burden estimates for these information collections, indicating that the estimates were much too low. Many commenters contended DOL should only require the production of records in an investigation context. One commenter suggested for clarity that DOL provide a check list for H-1B employers indicating which records must be kept, which records are required by other statutes or regulations and where these records must be kept.
Many commenters have fundamental misunderstandings of the nature of the reporting and disclosure requirements proposed in the NPRM. The Department has made every effort in the NPRM and in the Interim Final Rule to limit recordkeeping requirements to documents which are necessary for the Department to ensure compliance, and to documents which are already required by other statutes and regulations or would ordinarily be kept by a prudent businessperson. As a general matter, when reviewing the recordkeeping and disclosure obligations set forth in the regulations, employers should be aware that the regulations distinguish between a requirement to “preserve” or “retain” records if they otherwise exist, and a requirement to “maintain” records whether or not they already exist. A requirement that employers retain, for example, “any” documentation on a particular subject requires only that any such documents be retained if they otherwise exist, but does not require creation of any documents. In addition, the Department points out that where the regulations do not explicitly require public access, the records may be kept in the employer's files in any manner desired; they do not need to be segregated by labor condition application (LCA) or establishment and do not need to be segregated from the records of non-H-1B workers, provided they are promptly made available to the Department upon request in the conduct of an investigation. The Department considers it important to require that such records be maintained, as in other enforcement programs, so that in the event of an investigation, the Department is able to determine compliance or, in the event of violations, to determine the nature and extent of the violations. This can only be accomplished with adequate, accurate records since it is only the employer who is in a position to know and produce the most probative underlying facts.
In addition, in the regulations, the Department has limited the documents that must be disclosed to the public to those which the Department has concluded are necessary for a member of the public to be able to determine the employer's obligations and the general contours of how it will comply with its attestation obligations. The regulations on public access files do not require that there be a separate public access file for each LCA or for each worker. Thus, for example, an employer might choose to keep a single public access file with one copy of each of the required documents which are applicable to all LCAs (such as the description of the employer's pay system), and separately clip together those documents which are specific to each LCA.
Nothing in the ACWIA suggests that it intends to deny the Department the usual authority to require recordkeeping as a means of ensuring compliance with an employer's statutory obligations. To the contrary, Section 212(n)(1) specifically requires employers to make the LCA “and such accompanying documents as are necessary” available for public examination. The Department believes that this provision clearly permits the Department to determine what documents must be created or retained by employers to support the LCA. In the absence of such records, the Department is unable to ascertain whether an employer in fact is in compliance or the extent of violations.
In an effort to fully educate the public regarding the H-1B program and its requirements (including paperwork), DOL intends to prepare and make available pamphlets, fact sheets and a small business compliance guide. Further compliance assistance material will be made available on the DOL website. See Section IV.B, below, for an extensive discussion of this public outreach effort. The following is a brief discussion of the paperwork requirements contained in the proposed rule, the public comments on those requirements, the DOL response and the paperwork requirements imposed by this interim final rule. A much more extensive discussion of the issues, including the paperwork requirements, is contained in Section IV of the preamble.
The process of protecting U.S. workers begins with a requirement that employers file a labor condition application (LCA) (Form ETA 9035) with the Department. In this application the employer is required to attest: (1) That it will pay H-1B aliens prevailing wages or actual wages, whichever are greater—including, pursuant to the ACWIA, the requirement to pay for certain nonproductive time and to provide benefits on the same basis as they are provided to U.S. workers; (2) that it will provide working conditions that will not adversely affect the working conditions of U.S. workers similarly employed; (3) that there is no strike or lockout at the place of employment; and (4) that it has publicly notified the bargaining representative or, if there is no bargaining representative, the employees, by posting at the place of employment or by electronic notification—and will provide copies of the LCA to each H-1B nonimmigrant employed under the LCA. In addition, the employer must provide the information required in the application about the number of aliens sought, occupational classification, wage rate, the prevailing wage rate and the source of the wage rate, and period of employment. Pursuant to the ACWIA, additional attestation requirements become applicable to H-1B-dependent employers and willful violators after promulgation of these regulations. This form, currently approved by OMB under OMB No. 1205-0310, was revised in the NPRM to identify H-1B dependent employers and provide for their attestation to the new requirements. The ACWIA increased the number of H-1B nonimmigrants from 65,000 to 115,000 in fiscal years 1999 and 2000 and to 107,500 in fiscal year 2002. Besides the increase in LCAs filed for these additional workers, by regulation H-1B-dependent employers are required to file new LCAs if they wish to file petitions for new H-1B nonimmigrants or to seek extensions of status for existing workers. The Department estimated in the proposal that 249,500 LCAs are filed annually by 50,000 H-1B employers (dependent and nondependent). The only added LCA burden proposed in the NPRM was for H-1B-dependent employers and willful violators to indicate on the LCA their status and their agreement to the
Since promulgation of the NPRM, the 2000 Amendments to the INA further increase the ceiling on the number of H-1B visas that may be issued annually for 2001, 2002 and 2003, to 195,000 annually, with an additional unspecified number who may be admitted if they will be employed by a school, a related non-profit entity, a State or local government research organization, or a nonprofit research organization.
Commenters generally objected to the one hour estimate for completing the LCA, pointing out that the revised LCA is four pages long, whereas the current LCA is only one page for an estimated burden of one and one-quarter hour per LCA.
OMB suggested asked whether the conditions in a, b and c in section 8 capture the requirements for H-1B dependent employers. They also suggested amending the end of the sentence following the second box to read “* * * unless the exemption requirement in the NOTE below is met.”
A commenter stated that DOL had failed to consider that many employers will now be forced to file two LCAs where previously they only filed one. Several of its member employers who previously filed an LCA for multiple openings indicated that they may file separate LCAs for each opening rather than take the risk that of INS making a determination that one H-1B nonimmigrant is not exempt, thus invalidating the entire LCA.
As discussed in Section IV.B.4 below, the ETA Form 9035 has been amended to provide that every employer is required to indicate whether it is or is not H-1B-dependent or a willful violator. Since all employers are required to determine whether or not they are H-1B dependent—although for most employers, as discussed below, their status will be readily apparent and no actual computation will be necessary—the additional box for non-dependent employers should require no additional time. There is no other information required which is not contained on the current form other than to check a box indicating the agreement of H-1B-dependent employers and willful violators to the additional attestation requirements. The longer form is not due to the requirement to furnish additional information, but to the new format required for the FAXback, which is designed to decrease significantly the processing time. See Section IV.5, below. The Department also notes that the 1
Upon review, the Department sees no reason to change its estimate of an average of one hour per form, including both reading the instructions and filling out the form (estimated to take no more than one-half hour per form), as well as taking the actions that are subsumed in filling out the form (obtain the prevailing wage and providing notice). Based upon current data, and considering the regulatory change deleting the necessity for filing a new LCA when an employer's corporate identity changes (
Currently, the regulatory requirement is that a new LCA must be filed when an employer's corporate identity changes and a new Employer Identification Number (EIN) is obtained. Under the proposed rule, an employer who merely changes corporate identity through acquisition or spin-off could merely document the change in the public file (including an express acknowledgment of all LCA obligations on the part of the successor entity), provided it satisfied the Internal Revenue Code definition of a single employer. The proposed regulation was designed to eliminate a burden on businesses to file a new LCA, while at the same time ensuring that the public is aware of the changes and that the employer will continue to follow its LCA obligations. It was estimated in the proposal that 500 H-1B employers would be required to file the subject documentation annually. It was estimated that the recording and filing of each such document would take 15 minutes for a total annual burden of 125 hours.
One commenter asked how DOL's rulemaking affected the INS interpretation that any “material change in employment” necessitates the filing of an amended petition. Another commenter asked what opinion an employer is to follow when current DOL opinion is that any change to an approved LCA requires an amendment to the H-1B petition and the view of INS is that a change in company name or EIN does not require a new LCA, just that the change be documented at the time of amendment or extension. Another commenter stated that the burden for this requirement is significantly higher than DOL estimated.
Upon reconsideration, DOL's Interim Final Rule provides that a new LCA will not be required merely because a corporate reorganization results in a change of corporate identity, regardless of whether there is a change in the EIN and regardless of whether the IRS definition of single employer is satisfied, provided that the successor entity, prior to the continued employment of the H-1B nonimmigrant, agrees to assume the predecessor entity's obligations and liabilities under the LCA. The agreement to comply with the LCA for the future and to any liability of the predecessor under the LCA must be documented with a memorandum in the public access file.
With these changes, and based on the Department's experience, it is now estimated that 1000 H-1B employers (an increase from the 500 employers estimated in the NPRM) will be required to file the documentation annually and that the recording and filing of each such document will take approximately 30 minutes for a total annual burden of 500 hours. The Department also estimates that employers who file this memorandum will file 10,000 fewer LCAs, for a net saving of 9,500 hours.
INS requirements for the filing of an amended petition are separate from DOL requirements for the filing of LCAs.
An H-1B employer must calculate the ratio between its H-1B workers and the number of full-time equivalent employees (FTEs) to determine whether it meets the statutory definition of an H-1B-dependent employer (8 U.S.C. 1182 (n)(3)(A)). The NPRM provided that when it is a close question, the determination would ordinarily be made by examination of an employer's quarterly tax statement and last payroll (or last quarter of payrolls if more
Several commenters expressed the view that the DOL burden estimate for this requirement was severely underestimated. They remarked that large employers who hire H-1B employees will have to create systems of verification of H-1B dependency and that the determination will be difficult where employees are located in multiple locations and departments and the data needed to make the determination are maintained in different databases. Some commenters questioned the connection DOL made between the use of blanket LCAs and the likelihood of H-1B dependency and how frequently the determination would need to be made. Some also commented that it appeared that whenever the determination is made, a copy of the calculation must be placed in the public access file, making it a requirement for all H-1B employers, not just those who are borderline H-1B dependent. OMB commented that the 15-minute burden for the dependency determination seemed low and asked if the estimate just includes the assurance (how it is written) or does it also include documentation of the assurance.
Having taken into consideration all of the comments pertaining to the determination of dependency status, DOL has decided modification these requirements is appropriate to achieve the purposes of the ACWIA and avoid unnecessary burden on employers. First, the Interim Final Rule provides that all employers must retain copies of the I-129 petitions or requests for extensions of status filed with INS. These documents are critical to several provisions in the regulations, including in particular the determination of dependency and the number of hours that must be compensated if employees are “benched.” The Department believes that prudent businessmen would retain copies of these documents in any event. (See also the discussion in D. of this section, below.)
The Interim Final Rule also significantly reduces the burden to employers in making the computations of dependency. The Rule will permit employers to use a “snap shot” test to determine if dependency status is readily apparent and requires a full computation only if the number of H-1B workers exceeds 15 percent of the total number of full-time workers of the employer. Furthermore, the Rule provides employers an option of considering all part-time workers to be one-half FTE, rather than make the full computation. If the full computation (where required because the dependency status is not readily apparent) indicates that the employer is not H-1B dependent, the employer must retain a copy of this computation. Further, the employer must retain a copy of the full computation in specified circumstances which the Department believes will very rarely occur. The full computation must be maintained if the employer changes status from dependent to non-dependent. If the employer uses the Internal Revenue Code single employer test to determine dependency, it must maintain records documenting what entities are included in the single employer, as well as the computation performed, showing the number of workers employed by each entity who is included in the calculation. Finally, if the employer includes workers who do not appear on the payroll, a record of the computation must be kept. The Department has concluded that the computations or summary of the computations need not be kept in the public access file.
Although DOL has made several changes to simplify the determination of dependency status and its documentation, upon reconsideration DOL has increased its estimate of burden from 15 to 30 minutes, thus increasing the annual burden for an estimated 25 employers who must make and document such calculations twice annually from 12.5 to 25 hours. The Department also estimates that no more than 5 percent of employers will be required to retain copies of H-1B petitions and extensions who do not currently retain these documents, for an average of 3 minutes per petition, and a total of 159 hours (3,175 employers × 3 minutes ÷ 60). Total annual burden for this item is estimated to be 184 hours.
The ACWIA provisions regarding non-displacement and recruitment of U.S. workers do not apply where the LCA is used only for petitions for exempt H-1B workers. The NPRM provided that where the INS determines a worker is exempt, employers would be required to maintain a copy of such documentation in the public access file. Determinations as to whether or not H-1B workers meet the education requirements to be classified as exempt H-1B nonimmigrants would be made initially by the INS in the course of adjudicating the petitions filed on behalf of H-1B nonimmigrants by dependent employers. In the event of an investigation, it was anticipated that considerable weight would be given to the INS determination that H-1B nonimmigrants were exempt, based on the educational attainments of the workers, since INS has considerable experience in evaluating the educational qualifications of aliens. Retention of copies of such determinations would aid DOL in determining compliance with the H-1B requirements and provide the public with notice as well. It was estimated in the proposal that 28,125 such documents would need to be filed annually. Each such filing would take approximately one minute for an annual burden of approximately 468.8 hours.
One commenter indicated that the one minute to physically complete the form may be correct but that the estimate ignores the analysis and review required to determine if they are exempt. Another commenter asked what documentation must be copied and maintained in the file,
On further consideration, because of privacy considerations, DOL has concluded that the H-1B petitions with the INS determinations of workers' exempt status need not be included in the public access file. However, DOL
Section 212(n)(F)(ii) of the INA, 8 U.S.C. 1182(n)(F)(ii), prohibits an H-1B-dependent employer from placing H-1B nonimmigrant with another employer unless the dependent employer makes a bona fide inquiry as to the secondary employer's intent regarding displacement of U.S. workers by H-1B workers. The proposed regulation would require an employer seeking to place an H-1B nonimmigrant with another employer to secure and retain either a written assurance from the second employer, a contemporaneous written record of the second employer's oral statements regarding non-displacement, or a prohibition in the contract between the H-1B employer and the second employer. Pursuant to the ACWIA, an H-1B employer may be debarred for a secondary displacement “only if the Secretary of Labor found that such placing employer * * * knew or had reason to know of such displacement at the time of the placement of the nonimmigrant with the other employer.” Congress clearly intended that the employer make a reasonable inquiry and give due regard to available information. In order to assure that the purposes of the statute are achieved, the Department developed a regulatory provision to require that the H-1B employer make a reasonable effort to inquire about potential secondary displacement and to document those inquiries. It was estimated that approximately 150 employers would place H-1B nonimmigrants with secondary employers where assurances are required. It was estimated that each such assurance will take approximately 5 minutes and each such employer would obtain such assurances 5 times annually for an annual burden of 62.5 hours.
Commenters stated that DOL grossly underestimated the amount of time necessary to persuade and obtain from the secondary employer the necessary assurances, create a verification form or revise a contract and the annual frequency of the assurances. Further, some commenters felt that DOL had failed to consider the additional burden on the secondary employer to document their compliance with the assurance.
The paperwork burden estimate, properly, does not include the time necessary to persuade a secondary employer to provide such an assurance but does include the development of the verification form or contract clause and its execution. DOL believes that once the form or contract clause is created, this form or contract clause will be used uniformly for subsequent assurances making the average burden per occurrence minimal. There is no burden on the secondary employer to document its compliance with the assurance, since it is solely the responsibility of the primary H-1B employer to comply with the attestation that no U.S. worker will be displaced by an H-1B worker. DOL estimates an average burden of 10 minutes per attestation or statement, and that 150 H-1B employers will document such assurance 5 times annually, for a total annual burden of 125 hours.
The ACWIA prohibits H-1B dependent employers and willful violators from hiring H-1B nonimmigrants if their doing so would displace similar U.S. workers from an essentially equivalent job in the same area of employment. The proposed regulations would require H-1B-dependent employers to keep certain documentation with respect to each former worker in the same locality and same occupation as any H-1B worker who left its employ in the period from 90 days before to 90 days after an employer's petition for an H-1B worker. For all such employees, the Department proposed that covered H-1B employers maintain the last-known mailing address, occupational title and job description, any documentation concerning the employee's experience and qualifications, and principal assignments. Further, the employer would be required to keep all documents concerning the departure of such employees and the terms of any offers of similar employment to such U.S. workers and responses to those offers. These records are necessary for the Department to determine whether the H-1B employer has displaced similar U.S. workers with H-1B nonimmigrants. The Department stated that no records need be created to comply with these requirements, since the Equal Employment Opportunity Commission (EEOC) already requires under its regulations that the records described above be maintained.
Commenters stated that they were unaware of the EEOC regulation that required this documentation and requested that DOL recite rather than just refer to the EEOC regulations.
As discussed in Section IV.F.8 below, commenters are generally correct that the EEOC regulation cited in the NPRM, 29 CFR 1620.14, does not establish a general requirement that employers create the records encompassed by the Department's displacement proposal. Rather, it requires an employer to preserve all personnel or employment records which the employer “made or kept”. Furthermore, EEOC requires the preservation of the same or similar records under other statutes it administers, such as the Age Discrimination in Employment Act (ADEA). Under this Interim Final Regulation, DOL is not requiring employers to create any documents other than basic payroll information, with one noted exception. If the employer offers the U.S. worker another employment opportunity, and does not otherwise do so in writing, by the provisions of section 655.738(e)(1) of these regulations, the employer must document and retain the offer and the response to such offer.
It is estimated that 10 H-1B employers will make such offers of employment 5 times annually (50) and that 5 of those offers and responses would not otherwise be committed to writing without this paperwork requirement. Each such documentation is estimated to take 30 minutes for a total annual burden of 2.5 hours.
Pursuant to the ACWIA, H-1B-dependent employers are required to make good faith efforts to recruit U.S. workers before hiring H-1B workers. Under the proposed regulations, H-1B-dependent employers would be required to retain documentation of the recruiting methods used, including the places and dates of the advertisements and postings or other recruitment method used, the content of the advertisements or postings, and the compensation terms. Further, the employer would be required to retain any documentation concerning consideration of applications of U.S. workers, such as copies of applications
Commenters felt the burden for this item was underestimated,
As noted in F. above and as discussed at some length in Section IV.G.5 of the preamble, DOL believes that employers are required to preserve the records required under current EEOC requirements. With the exception of the list to be included in the public access file (and here too employers have the option of putting the actual records in the file), DOL is not requiring employers to create any documents, but rather to preserve those documents which are created or received. Further, DOL, upon further review, has determined that employers will not be required to maintain evidence of industry practice for recruitment. The only additional recordkeeping burden required by these regulation is that the public disclosure file contain a summary of the principal recruitment methods used and the time frames in which they were used. This recordkeeping requirement may be satisfied by creating a memorandum to the file or the filing of pertinent documents. It is estimated that 200 H-1B employers will file such documents or memorandum 5 times annually and that each recordkeeping will take 20 minutes, for an annual burden of approximately 333 hours.
Pursuant to the ACWIA, all employers of H-1B workers are required to offer benefits to H-1B workers on the same basis and under the same criteria as offered to similarly employed U.S. workers. The proposed regulations would require employers to retain copies of all fringe benefit plans and summary plan descriptions, including all rules regarding eligibility and benefits, evidence of what benefits are actually provided to individual workers and how costs are shared between employers and employees. These records are necessary for the Department to determine whether the H-1B nonimmigrants are offered the same fringe benefits as similarly employed U.S. workers. Copies of most fringe benefit programs are required to be maintained by Internal Revenue Service and Pension and Welfare Benefits Administration regulations; thus there would not ordinarily be an additional recordkeeping burden from these requirements. The Department estimated that 2,500 employers would spend approximately 15 minutes each documenting unwritten plans, for an annual burden of 625 hours.
The Department in the proposed rule also inquired as to whether it would be possible to require multinational employers to keep H-1B workers on “home country” benefit plans in lieu of those provided to U.S. workers and what records would need to be kept to demonstrate the value of the “home-country” benefits and those provided to U. S. workers.
A commenter said that DOL should recite, rather than just refer to the PWBA and IRS regulations. Another commenter stated it was unclear whether in fact these regulations governing retention of benefits information meet the DOL requirements for the H-1B program, since the DOL regulations require specific documentation of the comparative benefits offered and received by H-1B employees and their U.S. counterparts, including the need to determine the appropriate comparison group and then require the maintenance of all the information in the public inspection file for each H-1B worker. Another comment stated that DOL has failed to consider the additional burden of comparing fringe benefits offered by similar employers in the area which DOL is proposing to require. Commenters questioned the need for the documentation of fringe benefits to be placed in each public access file, with others suggesting more flexibility in how the documentation should be provided. One commenter suggested that employers be allowed to select equivalent but different valued benefits as long as employers can show that all similarly situated workers were offered the same array of benefits.
It is believed that almost all employers of H-1B workers would, absent the regulation, have already created an employee handbook or have a summary description plan required by ERISA regulations which would satisfy the H-1B regulatory requirement. The provision being considered to require a comparison of fringe benefits offered by similar employers in the area is not included in this interim final rule. DOL is not requiring that detailed records of fringe benefits be maintained in each public access file. These records may be kept in a master file or in any other manner the employer desires. The public access file need only contain a summary of the benefits offered to U.S. workers in the same occupation as H-1B workers, including a statement of how employees are differentiated, if at all. Ordinarily this would be satisfied with the employee handbook or summary description discussed above. Where an employer is providing home country benefits, the employer need only place a notation to that effect in the public access file.
There are an estimated 10 percent of H-1B employers, or 6,350 who provide fringe benefits, such as bonuses, vacations and holidays, not required by ERISA regulations to be documented. It is estimated to document these plans would take 15 minutes per employer, for an annual burden of 1,588 hours (6,350 × 15 minutes). It is further estimated that 25 percent of H-1B employers (15,875) are multinational employers and that a note to the file that these workers receive “home country” benefits would take 5 minutes per employer for an annual burden of 1,323 hours. The total estimated burden for this item is 2,911 hours.
The Department republished and asked for comment on several provisions of the December 20, 1994 Final Rule (59 FR 65646) which were published for notice and comment on October 31, 1995 (60 FR 55339). Existing regulations require all H-1B employers to document their actual wage system to be applied to the H-1B nonimmigrants and U.S. workers. They are also required to keep payroll records for non-FLSA exempt H-1B workers and other employees for the specific employment in question. The proposed rule would decrease the burden on employers of keeping hourly pay records for U.S. workers, requiring such records only if either the worker is not
The payroll recordkeeping requirements are virtually the same as those required by the Fair Labor Standards Act (FLSA) and any burden required is subsumed in the OMB Approval No. 1215-0017 for those regulations at 29 CFR Parts 516, except with respect to records of hours worked for exempt employees. There would be no burden for U.S. workers since as a practical matter, hours worked records would be required for U.S. workers only if they are not exempt from FLSA, or if they are exempt but paid on an hourly basis (certain computer professionals), and therefore would keep hourly records in any event. The Department estimates that 55,000 H-1B workers will be paid on a salary basis. Hours worked records would be required for these workers only if the prevailing wage is expressed as an hourly rate—estimated to 17 percent of all cases. The Department estimated a burden of 2.5 hours per worker per year, for 9,350 workers and a total of 23,375 hours.
Several commenters stated that DOL had grossly underestimated the burden of documenting the objective wage system. Some indicated that it was ludicrous to estimate that the documentation is done only once, since wage systems continually change, documentation will need be done, at a minimum, each time a new LCA is prepared and employers do not hire H-1B nonimmigrants only for one position in the organization. Thus, DOL must calculate how many different job categories are filled by H-1B nonimmigrants on average for each employer to estimate how many times the burden of documenting the objective wage system occurs annually. Further, the documentation must be sufficiently detailed to allow a third party to determine the actual wage, making the burden higher than estimated. Some commented that the proposed regulation requires the actual wage be determined and documented anew for each H-B hire, along with periodic adjustments to the actual wage system.
The Department has deleted the provisions suggesting that the employer's wage system must be objective, as well as the statement that it must be described in the public disclosure file with detail sufficient for a third party to determine the actual wage rate for an H-1B nonimmigrant. As stated above, the requirement that a description of the actual wage system be included in the public access file is already contained in the regulations at section 655.760(a)(3). Therefore these regulations create no additional burden for this requirement.
Some commenters stated that while DOL estimated that only 17 percent of the prevailing wages provided to employers by State Employment Security Agencies (SESAs) are expressed as hourly rates, their experience was that SESAs regularly provides employers and attorneys with the prevailing wage stated as an hourly rate.
With respect to the concern expressed that SESA more frequently issues hourly rates, the modification to section 655.731(a)(2) in the interim final rule will provide that employer shall convert the prevailing wage determination into the form which accurately reflects the wages which it will pay.
The Department has also concluded that a revision of the regulation is appropriate to remove the requirement that the employer keep hourly wage records for its full-time H-1B employees paid on a salary basis. The regulation continues to require employers to keep hours worked records for employees who are not paid on a salary basis and for part-time H-1B workers, regardless of how paid. The additional burden of keeping records for salaried H-1B workers who are exempt from the FLSA is estimated at 2.5 hours per worker for 10,500 workers (1.5 percent of total H-1B workers), for a total annual burden of 26,250 hours.
The ACWIA requires DOL to develop a procedure so that a person, other than an aggrieved party, can provide, in writing on a form developed by DOL, information alleging H-1B program violations. The Department proposes that a single form be used by any party alleging violations, to the Wage and Hour Division of the U.S. Department of Labor, whether a complainant or another source. The H-1B Nonimmigrant Information Form, WH-4, is included in this Interim Final Rule for public review and comment. It is estimated that 200 such responses will be received annually and that each response will take approximately 20 minutes, for a total burden of 67 hours.
After consideration of comments raised in response to the NPRM, the Department has clarified the record retention requirements to provide that where there is no enforcement action, the employer shall retain required records for a period of one year beyond the last date on which any H-1B nonimmigrant is employed under the labor condition application or, if no nonimmigrants were employed under the labor condition application, one year from the date the labor condition application expired or was withdrawn.
H-1B employers may be from a wide variety of industries. Salaries for employers and/or their employees who perform the reporting and
Some commenters questioned the $25 per hour estimate for respondent costs, indicating that in order to comply with the information requirements, H-1B employers must employ high-level compensation professionals and human resource professionals. The Department recognizes that some employers may employ highly-paid professionals to advise them on how to comply with the H-1B program requirements. However, it is believed that such a need will be short-lived and that once a system is in place, compliance can be maintained without this highly paid professional assistance. The $25 an hour respondent cost is an average cost, which recognizes higher initial cost to effect compliance, as well as the low cost of performing the clerical filing functions. Further, as noted above, in addition to the guidance provided in this regulation and its preamble, the Department intends to provide non-technical guidance printed material and information in electronic format which should greatly assist employers and employees in understanding the H-1B program requirements. Total annual respondent hour costs for all information collections are estimated at $16,685,575 ($25.00 × 667,423).
The paperwork requirements discussed above will not become effective until OMB has reviewed and approved these requirements and assigned an OMB approval number.
On November 29, 1990, the Immigration and Nationality Act was amended by the Immigration Act of 1990 (IMMACT 90) (Pub. L. 101-649, 104 Stat. 4978) to create the “H-1B visa program” for the temporary employment in the United States (U.S.) of nonimmigrants in “specialty occupations” and as “fashion models of distinguished merit and ability.” The H-1B provisions of the INA were amended on December 12, 1991, by the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991 (MTINA) (Pub. L. 102-232, 105 Stat. 1733). Further amendments were made to the H-1B provisions of the INA on October 21, 1998, by enactment of the American Competitiveness and Workforce Improvement Act (ACWIA) (Title IV of Pub. L. 105-277, 112 Stat. 2681). In addition, the H-1B provisions of the INA were amended in October, 2000 by enactment of the American Competitiveness in the Twenty-first Century Act of 2000 (Pub. L. 106-313, 114 Stat. 1251, October 17, 2000), the Immigration and Nationality Act—Amendments (Pub. L. 106-311, 114 Stat. 1247, October 17, 2000), and section 401 of the Visa Waiver Permanent Program Act (Pub. L. 106-396, 114 Stat. 1637, October 30, 2000) (collectively, the October 2000 Amendments).
These cumulative amendments of the INA assigned certain responsibility to the Department of Labor (Department or DOL) for implementing several provisions of the Act relating to the temporary employment of certain nonimmigrants. The H-1B provisions of the INA govern the temporary entry of foreign “professionals” to work in “specialty occupations” in the United States under H-1B visas. 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184(c). The H-1B category of specialty occupations consists of occupations requiring the theoretical and practical application of a body of highly specialized knowledge and the attainment of a Bachelor's or higher degree in the specific specialty as a minimum for entry into the occupation in the United States. 8 U.S.C. 1184(i)(1). In addition, an H-1B nonimmigrant in a specialty occupation must possess full State licensure to practice in the occupation (if required), completion of the required degree, or experience equivalent to the degree and recognition of expertise in the specialty. 8 U.S.C. 1184(i)(2). The category of “fashion model” requires that the nonimmigrant be of distinguished merit and ability. 8 U.S.C. 1101(a)(15)(H)(i)(b).
The ACWIA made numerous significant changes in the H-1B provisions. One was the temporary increase in the maximum number of H-1B visas over the three fiscal years following ACWIA's enactment: For fiscal years 1999 and 2000, the cap would be 115,000; for fiscal year 2001, the cap would be 107,500; and for fiscal year 2002 (and thereafter), the cap would return to the original 65,000. Another significant change was the imposition of additional attestation requirements for certain employers to provide better protections to U.S. workers. The additional attestation requirements apply to “H-1B-dependent employers” and to employers who have been found to have committed a willful failure or misrepresentation with respect to the H-1B requirements (hereafter referred to as “willful violators”). H-1B-dependent employers and willful violators must attest that they: (1) Have not displaced and will not displace a U.S. worker within the period beginning 90 days before and ending 90 days after the filing of an H-1B petition; (2) will not place an H-1B worker with another employer with indicia of an employment relationship without making an inquiry to assure displacement has not and will not take place within the period beginning 90 days before and ending 90 days after the placement; and (3) have taken good faith steps to recruit U.S. workers for the job for which the H-1B workers are sought, and will offer the job to any equally or better qualified U.S. worker. The recruitment provision does not apply to an LCA for an H-1B worker who is “exceptional,” an “outstanding professor or researcher,” or a “multinational manager or executive” within the meaning of section 203(b)(1) of the INA. The ACWIA specified that both the displacement and recruitment/hiring protections become effective upon the date of the Department's final regulation and apply only to LCAs filed before October 1, 2001. An H-1B-dependent employer or willful violator filing an LCA which will be used only for “exempt” H-1B workers is not required to comply with the new attestation requirements for that LCA.
The ACWIA also instituted a filing fee of $500, to be collected by INS, for initial petitions and first extensions filed on or after December 1, 1998, and before October 1, 2001. Institutions of higher education and related or affiliated nonprofit entities, nonprofit research organizations, and Governmental research organizations are exempt from the new fee. The fees are to be used for job training, low-income scholarships, and program administration/enforcement.
The ACWIA included other generally applicable worker protections, specifically: whistleblower protection, prohibitions against reimbursement of the $500 filing fee and against penalizing an H-1B worker who terminates employment prior to a date agreed with the employer, and a requirement that the employer pay wages during nonproductive time if such time is not due to reasons occasioned by the worker. The ACWIA
The ACWIA specified new civil money penalties ranging from $1,000 to $35,000 per violation, along with debarment. New investigative procedures were created, authorizing the Department to conduct “random” investigations of willful violators during the five-year period after the finding of such violation, and establishing an alternative investigation protocol based on information indicating potential violations obtained from sources other than aggrieved parties. Enforcement of the requirement that employers hire U.S. workers if they are equally or better qualified than the H-1B workers is carried out by the Attorney General through arbitration.
The ACWIA mandated a particular method of computation of the local prevailing wage for purposes of the requirements of the H-1B program and the permanent immigrant worker program with respect to employees of institutions of higher education and related or affiliated nonprofit entities, nonprofit research organizations, and Governmental research organizations. Under the ACWIA provision, the prevailing wage level is to take into account only employees at such institutions and organizations.
The ACWIA became law on October 21, 1998. With one exception, its provisions took effect at that time, and apply both to existing LCAs and to LCAs filed in the future. Pursuant to section 412(d) of the ACWIA and section 212(n)(1)(E)(ii) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(1)(E)(ii), the special attestation provisions regarding displacement and recruitment are applicable only to LCAs filed by H-1B-dependent employers and willful violators on or after the date this Interim Final Rule becomes effective and until October 21, 2001.
In addition, section 415(b) of the ACWIA provided that the amendments to section 212(p) of the INA, 8 U.S.C. 1182(p)—relating to computing the prevailing wage level for employees of an institution of higher education or a related or affiliated nonprofit entity, for employees of a nonprofit research organization or Governmental research organization, or for professional athletes—apply to prevailing wage computations for LCAs filed before October 21, 1998, “but only to the extent that the computation is subject to an administrative or judicial determination that is not final as of such date.” Therefore, the regulations in parts 655 and 656 to implement section 212(p) apply retroactively to any prevailing wage determinations thereunder which were not final as of October 21, 1998.
Two other ACWIA's provisions contained temporal qualifications, relating to the Department's authority to conduct random investigations and other source investigations (INA, sections 212(n)(2)(F), 212(n)(2)(G), respectively). The Act specified that the Department's authority, pursuant to section 212(n)(2)(F) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(2)(F), to conduct random investigations of employers who have committed a willful failure to meet a condition of their LCAs or who have made a willful misrepresentation of material fact applies only where such a finding has been made by the Secretary on or after October 21, 1998. The Act also specified that the Department's authority, pursuant to section 212(n)(2)(G), 8 U.S.C. 1182(n)(2)(G), to conduct investigations based on credible information from a source other than an aggrieved person would “sunset,”
The October 2000 Amendments made substantial increases in the numbers of H-1B visas available for the employment of nonimmigrants: 195,000 each year for fiscal years 2001, 2002, and 2003 (with the number thereafter to revert to the original 65,000 per fiscal year); an unspecified additional number for fiscal year 1999 to cover nonimmigrants issued visas above the authorized number for that year; an unspecified additional number for fiscal year 2000 to cover petitions filed before September 1, 2000; and an unlimited number for nonimmigrants employed by institutions of higher education, by their related or affiliated nonprofit entities, by nonprofit research organizations, or by governmental research organizations (
The Department notes that the ACWIA was the product of extensive negotiations between the Administration and the House and the Senate. See 144 Cong. Rec. H8584 (Sept. 24, 1998); 144. Cong. Rec. S10877 (Sept. 24, 1998). Earlier in the year both the House and the Senate had issued very different bills to address the H-1B program (
The Department further notes that the October 2000 Amendments were also the product of extensive negotiations, but that there is very little legislative history concerning the limited
Keeping in mind the difficulty with construing legislation under these circumstances, the Department has—in the Preamble of this Interim Final Rule—cited to the legislative history of ACWIA in both the House and the Senate, and to the extensive remarks of both Senator Abraham and Congressman Smith.
To obtain public input to assist in the development of interim final regulations, the Department published a Notice of Proposed Rulemaking (NPRM) and invited public comment in the
The Department has, in this Interim Final Rule, carefully considered comments received in response to the October 31, 1995 Proposed Rule in conjunction with the comments received in response to the January 5, 1999 NPRM. The 1995 Proposed Rule elicited comments from 13 commenters, including one from a trade association, one from an association representing immigration attorneys, one from an association representing firms which provide international personnel to American businesses, five from information technology companies, one from an accounting and auditing firm, two from universities and two from law firms. The proposals which then elicited the greatest number of comments concerned the actual wage system (Appendix A), workplace notice, the 90-day short-term placement option for H-1B workers who move to worksite(s) not covered by LCA(s), and the use of the Government
The Department received 92 comments in response to the January 5, 1999 NPRM, including comments which were received late but which were included in the rulemaking record and fully considered. The commenters included individuals, a union, employee associations, lawyers or law firms, businesses, trade and business associations, educational and research facilities and associations, U.S. Government agencies, and Members of Congress (one comment from two Senators and one comment signed by 23 Members of Congress (hereafter referred to as “Congressional commenters”)).
The proposals eliciting the greatest numbers of comments were those regarding non-productive time (or “benching”), the information required on the LCA regarding the employer's status as H-1B-dependent, recruitment, displacement, and the posting of notices. Individual commenters were critical of the H-1B program generally, describing it as particularly detrimental to the job security of older Americans, and sought more guidance from the Department with regard to procedures which American workers may follow to prove displacement. These commenters also urged the Department to strictly enforce the ACWIA “no benching” provisions; include a requirement that all employers check the H-1B dependency box on Form ETA 9035, with the imposition of heavy fines for noncompliance; and require the physical posting of all notices at the place of employment or worksite.
The union and employee association commenters generally endorsed the Department's proposed regulations. Educational and research facilities primarily addressed and supported the Department's proposals regarding determination of prevailing wages for employees of those institutions. These commenters also urged the Department and the INS to be consistent in their application of the definitions contained in the regulatory provisions.
Two associations, one representing the interests of immigration lawyers and the other representing the interests of firms which provide international personnel to American businesses, commented on virtually every proposal made by the Department in the NPRM. Lawyers and law firms particularly addressed the proposal that all fees and costs connected with the filing of the LCA and H-1B petition, including attorney and INS fees, are to be borne by the employer. The Department's proposal addressing the timing of the H-1B dependency determination also drew a strong response from commenters representing business interests. Senator Abraham, one of the ACWIA's Congressional sponsors, submitted his October 21, 1998
In the review of the comments and the development of this rule, the Department realized that there are a number of general issues which affect the entire rule. The following discussion addresses these issues.
On January 5, 1999, the Department of Labor published a Notice of Proposed Rulemaking (NPRM) in the
The Department's NPRM set forth specific regulatory language for comment on some, but not all, of the issues arising from the provisions of the ACWIA. For those issues with no specific regulatory language, the Department identified concerns, and set out its proposed approach to addressing
The Department was mindful of Congress' intent that the ACWIA implementing regulations be promulgated in a “timely manner;” the legislation allowed a public comment period of “not less than 30 days.” Accordingly, the Department set a 30-day comment period, to close on February 4, 1999. Upon petition by the American Council on International Personnel (ACIP), the Department extended the comment period another 15 days, until February 19, 1999. After consideration of the comments received, the Department now issues this Interim Final Rule and invites further comment on the regulatory provisions set forth in Part IV.A through N of this preamble and the accompanying regulatory text. After reviewing any comments received, the Department will issue a Final Rule.
The Department received 13 comments on its regulatory process.
The comments focused primarily on the length of the comment period and the NPRM's lack of regulatory text on various issues. Nine commenters generally objected to the length of the comment period in combination with the lack of regulatory text, variously contending that the requirements of the Administrative Procedure Act (APA) were violated in that the bulk of the proposals together with the lack of regulatory text, definitions, and clear explanations prohibited meaningful comment even within the extended period allowed. The American Immigration Lawyers Association (AILA) recommended that the Department withdraw the NPRM and issue an Advance Notice of Proposed Rulemaking (ANPR). ACIP and Senators Abraham and Graham suggested that the Department publish a proposed rule with request for comment prior to implementing an interim final or final rule. ACIP also expressed concern about the inclusion of the outstanding issues in the 1995 NPRM in the proposed rule. In the alternative, ACIP and the American Council on Education (ACE) requested the Department to defer enforcement of the interim final rule during an employer education period of at least 60 days following its promulgation.
The Department has concluded that the delay inherent in the publication of an ANPRM or a new NPRM with full regulatory text would not be warranted. The new attestation requirements for H-1B-dependent employers and willful violators created by the ACWIA do not take effect until these regulations are promulgated and will terminate on October 1, 2003 (with the extended “sunset” date specified by the October 2000 Amendments). Congress specifically allowed a comment period of 30 days. The Department obliged commenters by extending this period an additional 15 days. The analysis of the comments and the preparation of this Interim Final Rule have been a complex and time-consuming process. The Department is of the view that there should be no further delay of key ACWIA provisions. The Department is now providing an additional opportunity for comment on the provisions of the Interim Final Rule. Also, the Department seeks comments on additional proposals presented for the first time; these proposals are not included in the Interim Final Rule but are presented for comment for possible inclusion in the Final Rule.
The Department is of the view that the procedure followed on this Rule is in full compliance with the notice and comment provisions of the APA. The APA requires that an agency include in its notice of proposed rulemaking “either the terms or substance of the proposed rule or a description of the subjects and issues involved.” 5 U.S.C. 553(b)(3);
The lengthy and detailed preamble to the NPRM, setting forth the Department's proposals and concerns on each of the issues, struck a balance between the need to promulgate regulations expeditiously (created by the ACWIA provision that its new attestation requirements would not take effect until regulations are issued and will terminate on October 1, 2001 (now extended until October 1, 2003), as well as the need to give regulatory guidance with regard to those ACWIA provisions which took effect immediately), and the opportunity to provide meaningful public comments. Certainly the public has a right to have a sufficient description of the subjects and issues involved to offer meaningful comment. The Department believes that it has fully accommodated this need with its detailed discussion in the NPRM preamble. Furthermore, in addition to describing the provisions it proposed to promulgate where regulatory text was not included in the NPRM, the Department discussed and sought comments on numerous additional alternatives it was considering, in an attempt to ensure that there would be no surprises to the public if, after a review of the comments, it determined that an alternative was appropriate for the Interim Final Rule. The NPRM preamble is sufficiently detailed to “inform the reader, who is not an expert in the subject area, of the basis and purpose for the * * * proposal[s].” Federal Register Act, 44 U.S.C. 1501-1511 and regulations thereunder, 1 CFR 1812(a).
The Department has carefully considered the request for a delay in enforcement for 60 days after the effective date of the regulations. The Department notes that the new law was extensively negotiated with stakeholders for nearly a year before it was enacted, that stakeholders have been aware of the Department's proposed approach to the issues for more than a year, that a number of the provisions will be in effect for only a limited period of time, and that several provisions that are the subject of this rulemaking relate to applications of the law that have been in effect for nearly a decade and have been addressed in prior rulemaking. Furthermore, the Department plans to undertake extensive education efforts, as discussed below. The Department has therefore concluded that it is inappropriate to administratively declare a period in which civil money penalties and debarment would not be imposed. However, we would point out that in all cases the Department's enforcement and the penalties imposed take into consideration the full circumstances of any violations found, within the constraints of the statutory requirements. See INA, section 212(n)(2)(C), 8 U.S.C. 1182(n)(2)(C), and § 655.810 of this Rule. Furthermore, with regard to the recordkeeping requirements in particular, as discussed in IV.M.5 below, the Department will issue CMP assessments for violations only where it finds that the violation impedes the ability of the Administrator to determine whether a violation of the H-1B requirements has occurred, or the ability of members of the public to have information needed to file a complaint or information regarding alleged violations of the Act.
Finally, the Department notes that the changes to the method of making prevailing wage determinations for academic institutions and related nonprofit entities, nonprofit research organizations, and Governmental research organizations, set forth at
A significant concern expressed by a large number of commenters is the need to ensure that both U.S. and H-1B workers, as well as employers, are well-informed about their rights and obligations under the H-1B program in general, and the new provisions of the ACWIA in particular. The Department appreciates the importance of such education and intends to undertake active efforts to educate the public about the H-1B program. Specifically, the Department intends to prepare and make available pamphlets, fact sheets and a small business compliance guide in both written and electronic formats. These resources will explain the obligations of employers, the rights of H-1B and U.S. workers, and the roles of the Department of Labor and the other government agencies involved in the program (the INS, the Departments of Justice and State). The resources will also reference materials available from these agencies that bear on the employment of H-1B nonimmigrants. The Department also plans to work with the INS and the State Department to develop a pamphlet to be provided to visa applicants and posted electronically that will explain rights and responsibilities under the H-1B program.
The electronic compliance material will be available through the Department's web page at
The Department also intends to add an “H-1B Advisor” to its Internet “Employment Laws Assistance for Workers and Small Businesses” (ELAWS) system (located at the bottom of the home page). The H-1B ELAWS Advisor will be an interactive program that helps employers, employees, and other interested parties determine their H-1B rights and responsibilities, 24 hours-a-day, 7 days-a-week. The Advisor imitates the interaction an individual may have with a DOL expert—it asks questions, provides information, and directs the user to the appropriate resolution based on the responses given.
This information may also be obtained from the Wage and Hour Division's national and local offices. Mail requests should be addressed to the Wage and Hour Division Immigration Team, Room S-3510, 200 Constitution Avenue, NW., Washington, DC 20210. Telephone requests should be made of the Wage and Hour Division Immigration Team at (202) 693-0071.
The addresses and phone numbers for Wage-Hour's district offices may be found on the Department's website at
Finally, the Department will continue its practice of making available speakers for groups affected by the Department's administration of the H-1B program. The Department will also furnish information and copies of its resource materials to both employee and industry organizations to facilitate distribution to their member organizations.
Issues arising under the Proposed Rule, including the Department's response to comments thereon are discussed below. For the convenience of the public, the numbering in this part of the Preamble remains the same as in the Proposed Rule unless otherwise indicated.
The Department notes that, in a few instances, it is requesting comments in the Interim Final Rule on a regulation or an approach to a regulation on which it has not previously sought comment. These provisions are not included in the Interim Final Rule, but rather will be considered when the Department promulgates the Final Rule after review of any comments. These issues are highlighted in the preamble.
The Department also notes that the new regulatory text published here generally includes all of the surrounding regulatory text in order to provide context to the reader. However, the only provisions which are open for comment are the issues discussed in the Preamble.
Further, the Department notes that the Interim Final Rule includes changes in the regulations to implement the October 2000 Amendments. These matters are discussed in the appropriate sections of the Preamble, and comments on the provisions are invited.
The Department has been working with the INS to coordinate our respective rulemaking efforts under the Act and to achieve consistency in the implementation of the ACWIA provisions and the October 2000 Amendments.
Section 212(n)(3)(C)(ii) of the INA as amended by the ACWIA directs that “any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as a single employer” for purposes of defining an “H-1B--dependent employer.” These provisions, found at 26 U.S.C. 414(b), (c), (m) and (o), concern the circumstances in which ostensibly separate businesses are treated by the Internal Revenue Code (IRC) as a single employer for purposes of pension and other deferred compensation plans.
Section 414(b), (c), and (m) of the IRC, respectively, define “controlled group of corporations,” “partnerships, proprietorships, etc., which are under common control,” and “affiliated service group.” Section 414(o) provides that the Department of the Treasury may issue regulations addressing other business arrangements, including employee leasing, in which a group of employees are treated as employed by the same employer. However, the Department of the Treasury has not issued any regulations under this provision; therefore Section 414(o) will not be taken into account in determining who is treated as a single
Section 414(b) of the IRC provides that all employees within a “controlled group of corporations” (within the meaning of section 1563(a) of the Code, determined without regard to sections 1563(a)(4) and (e)(3)(C)) are treated as employed by a single employer. Under section 1563(a) and the related Treasury regulations, a controlled group of corporations is a parent-subsidiary-controlled group, a brother-sister-controlled group, or a combined group. 26 U.S.C. 1563(a); 26 CFR 1.414(b)-1(a). A parent-subsidiary is, generally, one or more chains of corporations connected through stock ownership with a common parent corporation where at least 80 percent of the stock (by voting rights or value) of each subsidiary corporation is owned by one or more of the other corporations (either another subsidiary or the parent corporation), and the common parent corporation owns at least 80 percent of the stock of at least one subsidiary. In general terms, a brother-sister controlled group is a group of corporations in which five or fewer persons (individuals, estates or trusts) own 80 percent or more of the stock of the corporations and certain other ownership criteria are satisfied. A combined group is a group of three or more corporations, each of which is a member of a parent-subsidiary controlled group or a brother-sister controlled group and one of which is a common parent corporation of a parent-subsidiary controlled group and is also included in a brother-sister controlled group.
Section 414(c) of the IRC and the related Treasury regulations state that all employees of trades or businesses (whether or not incorporated) that are under common control are treated as employed by a single employer. 26 U.S.C. 414(c); 26 CFR 1.414(c)-2. Trades or businesses include sole proprietorships, partnerships, estates, trusts and corporations. Trades or businesses are under common control if they are included in a parent-subsidiary group of trades or businesses, a brother-sister group of trades or businesses, or a combined group of trades or businesses. Generally, the standards for determining whether trades or businesses are under common control are similar to the standards that apply to controlled groups of corporations. However, for these purposes, pursuant to 26 CFR 1.414(c)-2(b)(2), ownership of at least an 80 percent interest in the profits or capital interest of a partnership or the actuarial value of a trust or estate constitutes a controlling interest in a trade or business.
Section 414(m) of the IRC provides that all employees of the members of an “affiliated service group” are treated as employed by a single employer. 26 U.S.C. 414(m). In general terms, an affiliated service group is a group consisting of a service organization (the “first organization”), such as a health care organization, a law firm or an accounting firm, and one or more of the following: (a) A second service organization that is a shareholder or partner in the first organization and that regularly performs services for the first organization (or is regularly associated with the first organization in performing services for third persons), or (b) any other organization if (i) a significant portion of the second organization's business is the performance of services for the first organization (or an organization described in clause (a) of this sentence or for both) of a type historically performed in such service field by employees, and (ii) ten percent or more of the interest in the second organization is held by persons who are highly compensated employees of the first organization (or an organization described in clause (a) of this sentence). IRS has issued proposed regulations at 52 FR 32502 (Aug. 27, 1987), which may be consulted to ascertain IRS's interpretation of these provisions.
In the event of an H-1B investigation involving the issue of what entity or entities constitute a single employer for purposes of the ACWIA dependency provisions, an employer will be required to provide documentation necessary to enable the Department to apply these IRC provisions. The Department emphasizes that if an employer wishes to use the definitions in section 414(b), (c) or (m) of the IRC, it will be the employer's burden to establish that it meets the requirements of the IRC and the regulations thereunder.
In the NPRM, the Department stated that it was considering the effect and implications of adopting this single definition of “employer,” as set forth in these IRC sections for all purposes under this program, to the extent it may serve to accommodate business activities and facilitate administration and enforcement of the H-1B program. Specifically, the Department sought comment on the consequences of a regulation which would provide that where an “employer” files an LCA and thereafter undergoes some change of structure (
The Department received 17 comments on its proposals with regard to defining an employer for purposes of the H-1B program.
ACIP, AILA and the Information Technology Association of America (ITAA) strongly opposed using the relatively broad IRC definition of “single employer” for any purpose other than determining whether an employer is H-1B-dependent as provided in the ACWIA. These organizations generally asserted that there was no basis to infer that Congress intended to expand this extraordinarily broad definition to the entire H-1B law and that expanded use of this definition would not facilitate corporate concerns in administering an employer's obligations in the H-1B program.
AILA further asserted that the IRC “single employer” concept is designed to prevent the avoidance of employee benefit requirements through the use of separate organizations, employee leasing, or other arrangements. Therefore, AILA observed, to prevent discrimination in employee benefits in favor of highly compensated employees, the “single employer” encompasses all entities that are related by financial interest (ownership or transactional). In contrast, AILA averred, the H-1B program seeks to protect U.S. workers and, to promote this purpose, an “employer,” at a minimum, should have an employment relationship with respect to covered workers, as defined by the ability to hire, fire, pay and other indications of control. Thus, AILA concludes, to depart from the longstanding definition of “employer” in the H-1B program, without explicit statutory authority, would be improper.
Nine commenters (AILA, Cowan & Miller, ITAA, Rubin & Dornbaum, the
ITAA sought clarification on the calculation of H-1B dependency given the ACWIA's definition of “employer.” For instance, ITAA noted, a controlled group could consist of parent A and subsidiaries B, C and D. If subsidiary B were to file an LCA, would the H-1B dependency calculation be made using all employees of A, B, C, and D, or only the employees of B? The Department believes that, under the IRC definition of “controlled group,” all of the employees of A, B, C, and D would be included in the dependency calculation if any of the subsidiaries or the parent company filed the LCA.
Many employers and their representatives supported the Department's proposal to modify its current requirement for filing of a new LCA upon a change in the EIN. AILA, ACIP, Intel Corporation (Intel), ITAA and the Society for Human Resource Management (SHRM) urged a rule that a new or amended LCA and H-1B petition not be required upon an acquisition, merger, spin-off, transfer or other corporate reorganization regardless of whether there is a change in the EIN. ACIP further urged that no new or amended LCA and H-1B petition be required whether or not the new entity meets the IRC definition of “single employer.” Essentially, these groups endorsed a position that they stated is similar to the I-9 provisions of the INA, 8 CFR 274a.2(b)(1)(viii)(A)(6) & (7), whereby the new employer has the option of assuming the immigration-related liabilities of the old employer regardless of whether the employer assumes any other liabilities in the transaction. Similarly, AILA suggested application of established successor-in-interest rules. Two other commenters (Kirkpatrick & Lockhart, Jose E. Latour and Associates (Latour)) also urged consistency between INS and DOL rules.
ACIP elaborated on this issue, suggesting that continued corporate compliance responsibility in the event of restructuring could be accomplished via a simple memorandum placed in the public access file, rather than a new LCA, except where there is a material change in the worker's job duties or the worker is relocated to a site not covered by an LCA, or the new entity hires a new H-1B worker. ACIP stated that an employer should not be able to use positions on the previous entity's LCA to hire a new H-1B nonimmigrant.
The AFL-CIO opposed the Department's proposed modification to the current LCA filing requirements because, in its view, it could create the substantial risk that employers, through acquisition or spin-off, could in fact create an H-1B-dependent workforce and yet avoid the concomitant recruitment and non-displacement obligations of H-1B-dependent employers. The AFL-CIO pointed out that the governing IRS regulations use the “common control” test to determine whether a parent-subsidiary group of corporations or brother-sister trades or business satisfy the Code's definition of single employer. The AFL-CIO suggested that under the Department's proposal, a non-H-1B-dependent corporation that has filed an LCA, but has yet to hire any H-1B workers under that application, could create an H-1B-dependent subsidiary corporation that meets the “common control” test, but avoid filing a new LCA. The parent could then acquire the requested or remaining number of H-1B workers on its outstanding LCA, and place them in the subsidiary workforce without applying any of the new attestation requirements for H-1B-dependent employers.
The Department believes that the AFL-CIO's legitimate concerns are related to the statutory definition of “dependent employer” and not to the proposal to eliminate the requirement to file a new LCA when an employer, as defined by the ACWIA, undergoes a change in corporate structure. Thus, given the scenario presented by the AFL-CIO, under the ACWIA-imposed definition of “employer” the parent corporation and its subsidiaries (if they meet the “common control test”) are a “single employer” whose entire, combined work force is assessed to determine dependency. Under the IRC definition, the H-1B employees of the “subsidiary” are considered part of the larger work force of the “parent” corporation, which then may or may not be a dependent employer required to comply with the ACWIA attestation requirements.
Based on a careful review of all the comments submitted on this issue, the Department agrees that the use of the IRC definition of “employer” should be limited to determining H-1B-dependent employer status, as set forth in section 212(n)(3)(C)(ii). The IRC rules do not appear useful to facilitate the resolution of issues involving changes in corporate status.
However, as urged by the commenters, the Department has concluded that it is appropriate to change its current requirement that a new LCA (and, as a result, a new H-1B petition) be filed when corporate identity changes result in a change in the employer's EIN number. In the past, the Department has taken the position that a new LCA must be filed to assure continued compliance responsibility by the “new” employer—a corporate entity other than the one that filed the LCA in the first place. The Department understands, however, that when a corporate identity changes, it is common for the H-1B worker(s) to continue to perform the same job duties in the same location for the new, restructured entity, and for the new entity to assume the obligations of the previous entity. In such circumstances, where the obligations are assumed and there is no real change in the H-1B worker's job and his/her “new” employer's responsibilities, filing a new LCA and H-1B petition solely because of the change in corporate structure would be an unnecessary and burdensome exercise for the employer, the State Employment Service Agency (SESA) responsible for a prevailing wage determination, the Department in reviewing the LCA, and the INS in adjudicating the H-1B petition.
Further support for the Department's position is found in the October 2000 Amendments, in which Congress specified:
An amended H-1B petition shall not be required where the petitioning employer is involved in a corporate restructuring, including but not limited to a merger, acquisition, or consolidation, where a new corporate entity succeeds to the interests and obligations of the original petitioning employer and where the terms and conditions of employment remain the same but for the identity of the petitioner.
Section 314(c)(10) of the INA, 8 U.S.C. 1184(c)(10), as enacted by section 401 of
Therefore, the Department's Interim Final Rule, at § 655.730(e), provides that a new LCA will not be required merely because a corporate reorganization results in a change in corporate identity, regardless of whether there is a change in the EIN, provided that the new employing entity, prior to the continued employment of the H-1B nonimmigrant, agrees to assume the predecessor entity's obligations and liabilities under the LCA. The agreement to comply with the LCA for the future and assumption of liability for any past violations must be documented with a memorandum in the public access file, specifically identifying the affected LCAs and the EIN of the new employing entity, and describing the new employing entity's actual wage system (see IV.O.3, below). In addition, the employer will be required to retain in its records a list of the name and job title of each H-1B worker transferred to the new employer. It should be noted that the employer's status as a new employing entity which is not required to file a new LCA is not determined by traditional principles of successorship (although we anticipate that the new entity will commonly be a successor employer), but rather by the new entity's agreement to undertake the obligations and liabilities of the predecessor under the LCA. This position is consistent with the assumption of liability under the INA, 8 CFR 274a.2(b)(1)(viii)(A)(6) and (7), whereby a new employer may either assume liability for the old I-9 forms or prepare new ones, and provides the employer with flexibility to deal with the circumstances surrounding the particular corporate reorganization. These principles apply whether the reorganization is as a result of an acquisition, merger, sale of stock or assets (“spin-off”), or similar change in corporate structure. The Department cautions that an employer which undergoes a change in structure and EIN, but chooses not to insert the required memorandum in the public access file, is required to file new LCAs.
A new LCA (and H-1B petition) will be required if the H-1B worker changes jobs or where the new entity/employer seeks to hire a new H-1B worker or to extend an existing H-1B petition. Thus the “new” employer may not utilize H-1B “slots” left over from the previous entity's LCA for a worker hired after a reorganization or restructuring. The Department also understands that where there is a material change in duties (whether or not there is a change in occupation), INS may require the filing of a new H-1B petition.
The Department emphasizes that a change in a corporation's H-1B-dependency status as a result of a change in the corporate structure would have no effect on the employer's obligations with respect to its current H-1B workers. In other words, a corporation which was H-1B-dependent, and as a result of a change in structure becomes non-dependent, would be required to continue to comply with the secondary displacement attestation unless it chooses to file a new LCA and H-1B petition(s) for any H-1B worker(s) employed pursuant to the “dependent” LCA. Similarly, a non-dependent corporation which becomes dependent as a result of corporate restructuring would not be required to comply with the H-1B-dependent employer obligations for H-1B workers employed pursuant to a pre-existing LCA, provided the employer has assumed the obligations and liabilities of that LCA. Furthermore, as discussed, a new LCA (attesting to the newly acquired H-1B-dependent or non-dependent status) would have to be filed for all future H-1B petitions and extensions of status.
The ACWIA requires non-displacement and recruitment attestations by “H-1B dependent employers” and by employers found, after the date of ACWIA's enactment, to have committed a willful violation or a misrepresentation of a material fact on an LCA during the five-year period preceding the filing of an LCA.
The ACWIA definition of “H-1B-dependent employer” provides a formula for comparing the number of H-1B nonimmigrants employed to the total number of full-time equivalent employees (FTEs) in the employer's workforce. The Act provides that an H-1B-dependent employer is one that employs in the United States:
• 25 or fewer FTEs, and more than seven H-1B nonimmigrants; or
• At least 26 but not more than 50 FTEs, and more than 12 H-1B nonimmigrants; or,
• At least 51 FTEs, and H-1B nonimmigrants in a number that is equal to at least 15 percent of the number of such FTEs.
Thus, the H-1B-dependency formula for all employers uses two dissimilar numbers: the number of H-1B nonimmigrants employed (a “head count” of all H-1B workers, both full-time and part-time) and the number of FTEs (including both H-1B workers and other employees). For larger employers (
The structure and application of this statutory definition was addressed by one commenter (Tata Consultancy Services (TCS)), which urged the Department to focus on the perceived purpose rather than the language of the statutory test. TCS described itself as the largest and oldest software consulting and development firm in Asia, employing some 12,000 workers hired and trained in India, and conducting business in the U.S. through contracts to provide services both at client locations and at TCS locations. TCS expressed concern that “the Act and the Department's proposals literally include TCS as an H-1B dependent employer, since the number of TCS employees on H-1B visas is more than 15 percent of TCS' employees in the United States.” While acknowledging that it is an H-1B-dependent employer under the literal language of the statute (and thus subject to the additional attestation obligations for such employers), TCS urged the Department to issue a regulation which focused not on the express statutory provision but rather on the intention of Congress to impose the new obligations on “job shops.” In TCS's view, its own operation should not be included in the definition of H-1B-dependent employer because its operation does not constitute a “job shop,” which it defines as companies which “seek only to make money from the temporary placement of foreign personnel with respect to whom the job shoppers have no real employer/employee relationship.”
The Department has considered the TCS suggestion but has concluded that the regulation must reflect the express language of the ACWIA definition. There being no ambiguity in this provision, the Department has no authority to promulgate a regulation defining a “job shop” and substituting that definition for the mathematical computation prescribed in the statutory definition of “H-1B-dependent employer.”
The ACWIA specifies that “exempt H-1B nonimmigrants” are not to be included in the employer's determination of its H-1B dependency
None of the comments on the H-1B-dependent employer issues addressed the limited exclusion of “exempt” H-1B workers from the determination of H-1B-dependency. The prescribed period for this limited exclusion expires with the issuance of this Rule, and all “exempt” H-1B workers are henceforth to be included in the employer's determination of H-1B-dependency status. Therefore, the Department has determined that it is not necessary or appropriate to include in this section of the regulation any language concerning this now moot limited exclusion for “exempt” H-1B workers.
As stated above, the new non-displacement provisions and recruitment requirements contained in the ACWIA also apply to employers found, after the date of ACWIA's enactment, to have committed a willful violation or misrepresentation during the five-year period preceding the filing of an LCA. Section 655.736(f) of the Rule provides that an employer who is a “willful violator” is one who is found in either a Department of Labor proceeding pursuant to these regulations, or a Department of Justice proceeding pursuant to section 212(n)(5) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(5), to have committed either a willful failure to comply with the requirements of Section 212(n) or a misrepresentation of material fact during the five-year period preceding the filing of the LCA in question. Furthermore, the final decision in the proceeding finding willful violation or a misrepresentation must have been entered on or after the date of enactment of the ACWIA. “Willful failure” is defined in accordance with the existing regulations at § 655.805(b).
The following discussion addresses the other matters raised in the NPRM and in the comments, including the meaning of “FTE,” the manner and time of determining H-1B-dependency status, documentation of the determination, and the designation(s) to be made on the LCA regarding an employer's status as an H-1B-dependent employer or a willful violator.
The ACWIA definition of “H-1B-dependent employer” includes the term “full-time equivalent employees” (FTEs) as a critical part of the calculation to determine an employer's H-1B-dependency status. The term is not defined in the Act.
The NPRM explained that the Department considered various interpretations of the term “full-time equivalent,” some of which would significantly increase an employer's paperwork burden. The NPRM recognized that an employer's FTEs would include only its employees (both H-1B nonimmigrants and U.S. workers) and would not include
The Department pointed out that one possible approach to the FTE determination—presumably the most burdensome approach, from the employer's perspective—would be to maintain records of all hours of work by all employees (both hourly-paid and salaried workers, both full-time and part-time workers) during a certain period of time (
The Department proposed a less onerous approach, in which FTEs could be determined in a two-step process. First, the number of employees would be determined through the employer's quarterly tax statement (or similar document) (assuming there is no issue as to whether all employees are listed on the tax statement). Second, the employer would count its full-time workers using some standard threshold; each full-time worker would constitute one FTE. The employer's standard for full-time employment would be accepted, provided it was no less than 35 hours per week (or, where the employer has no standard, 40 hours per week). Third, the employer would aggregate its part-time employees into FTEs by identifying the workers' average number of hours of work per week, then aggregating these average weekly hours, and finally dividing that total by the employer's standard for full-time employment. The aggregation of the average hours of the part-time workers into FTEs would be made through an examination of the last payroll (or the payrolls over the previous quarter if the last payroll is not representative) or through other evidence as to average hours worked by part-time employees (such as evidence of their standard work schedule).
Thirteen commenters responded to the Department's proposal and offered alternatives for determining FTEs.
Four commenters addressed issues concerning the identification of “employees.” Three commenters (ACIP, AILA, SHRM) expressed concern at what they viewed as the NPRM's inappropriate inclusion of consultant and contractor personnel in the determination of FTEs based on “indicia of an employment relationship” with the employer. The commenters asserted that this approach was inconsistent with the statute, that the determination of FTEs should include only those persons whom the employer considered to be its employees, and that the application of an “indicia” test to all personnel including consultants and contractors would be burdensome. ACIP stated that the application of the test would be inconsistent with the NPRM proposal that FTEs be calculated by examining the employer's quarterly tax statements to determine the number of employees on the payroll; ACIP noted that consultants and contractors would not appear on these tax statements. The commenters suggested that the identification of “employees” for purposes of the determination of FTEs should be a simple head count of workers on the employer's payroll (
On the related matter of the proposed sources of information as to the number of employees—the employer's payrolls and tax statements—the AFL-CIO recommended that the FTE determination use an average of the number of employees shown on the employer's last three quarterly tax returns, and not the last quarterly return and the last payroll period, because this averaging process would prevent employers from timing the filing of LCAs to coincide with a greater ratio of FTEs to H-1B workers so as to avoid H-1B-dependency status.
It appears to the Department that some commenters' assertions regarding “indicia of employment” are based on a misapprehension of one aspect of the proposal. The NPRM did not propose that an “indicia of employment” test would be applied in this context; the “indicia” test was created in the ACWIA for purposes of the secondary displacement prohibition. The NPRM stated that the common law test of “employment relationship” would be used in identifying the persons to be included as “employees” in the FTE computation, and that
Thus, the Interim Final Rule, at § 655.736(a)(2)(i), provides that the determination of FTEs is to include those persons who are consistently treated by the employer as “employees” for all purposes, including payroll records and Internal Revenue Service statements. The determination of FTEs is not to include those persons who are consistently treated by the employer as consultants or independent contractors for all such purposes, and for whom the employer fills out IRS Form 1099, provided there is no issue as to whether this treatment is
Similarly, the Department is of the view that it is not necessary for an employer to compute an average number of “employees” based on a series of quarterly tax statements. The Department agrees with the AFL-CIO that it would be desirable to foreclose the possibility of potential abuse of the program by employers who have significant fluctuations in the numbers of “employees” and who might time their LCA submissions based on tax statements with “employee” numbers supporting non-H-1B-dependency status. However, the Department has concluded that the imposition of an averaging/computation burden on all employers would be an inappropriate means of foreclosing the possibility of an unknown—but presumably very small—number of abusive filings. The Department cautions that, where it appears that an employer has manipulated its employment numbers to avoid dependency just prior to filing LCAs or H-1B petitions, the Department will examine the situation closely and utilize an employer's normal payroll. Further, with regard to the use of quarterly tax statements, the Interim Final Rule also clarifies that after determining which workers are “employees,” it will be necessary in determining FTEs to separate those employees who are part-time, do a separate FTE determination for those workers, and then add those FTEs to the number of full-time workers to determine total FTEs.
One commenter (ITAA) objected to the Department's proposal to count all H-1B nonimmigrants (both full-time and part-time) in the numerator of the equation to calculate H-1B-dependency. ITAA suggested that, for fairness and mathematical accuracy, the regulation should be written so that part-time H-1B workers are counted in the numerator in the same manner as part-time employees are counted in the denominator. Similarly, AILA argued that whether the regulation uses a simple head count or a calculation of FTE taking into consideration part-time hours, there should be consistency in counting workers for both the numerator and the denominator.
The Department has considered these suggestions, but has concluded that they cannot be accepted because the statutory language requires the difference in counting as described in the NPRM. The ACWIA prescribes the computation of “full-time equivalent employees” for the entire workforce, and explicitly requires that the number of FTEs be compared to the number of “H-1B-nonimmigrants” (with no distinctions as to full-time or part-time status).
Nine commenters addressed the matter of determining what constitutes a full-time worker for purposes of computing the employer's FTEs. Three commenters (AILA, Hammond & Associates (Hammond), and Latour) recommended that “full-time” be determined by individual employers consistent with their standards and business practices. Five commenters (ACIP, Intel Corporation (Intel), Kirkpatrick & Lockhart (Kirkpatrick), Rapidigm Immigration Services (Rapidigm), and American Occupational Therapy Association (AOTA)) supported the NPRM proposal that the employer should use its payroll and tax records to count the number of workers it employs on a full-time basis, using some standard. However, these comments differed with regard to the appropriate benchmark for full-time hours (
After fully considering the comments, the Department has concluded that the NPRM proposed definition of full-time will be adopted since it provides considerable flexibility for employers while incorporating a reasonable and appropriate baseline standard. Thus, the Interim Final Rule, at § 655.736(a)(2)(iii)(A), provides that the employer may use its own standard for full-time employment, which the Department will accept provided that the standard is no less than 35 hours of work per week. The Department believes that this is a reasonable approach, that it is easily understood and applied, and that 35 hours as the minimum for full-time employment is a well-established labor standard, utilized by the Bureau of Labor Statistics for survey purposes. See,
Four commenters (ITAA, ACIP, AILA and SHRM) expressed concerns as to the need for and the methodology of aggregating part-time workers into FTEs for purposes of determining the employer's H-1B-dependency status. ACIP and SHRM suggested that no such aggregation or “conversion” should be required, and stated that the method proposed by the Department was burdensome, complex and unworkable. ITAA stated that the proposal would be burdensome because many part-time workers are salaried with no records of hours of work. AILA considered the proposed method to be burdensome, and offered its own proposed formula for calculation of FTEs—each full-time worker, each FLSA-exempt worker, and each part-time worker working more
The Department recognizes that, for some employers, the aggregation of part-time workers into FTEs may be somewhat burdensome. However, in light of the clear statutory language, the Department is unable to dispense with the concept of “full-time equivalent employees,” which is not a mere head-count of workers in the workforce (number of employees) but instead is a calculation of the number of full-time workers needed to perform the total work done by the total workforce (number of “equivalents” of full-time workers). Congress explicitly prescribed the use of the FTE concept at three points in the ACWIA, and must be presumed to have used the concept with an understanding of its established meaning. The concept of “full-time equivalent employees” is well-known to Congress. For example, Congress considers FTEs each year in the enactment of the appropriations of operating funds for the Federal agencies, which submit their budget requests based on the Office of Management and Budget definition of FTEs:
In an effort to minimize the burden to employers, as suggested by SHRM and other commenters, the Department has modified its proposed method for the aggregation or conversion of part-time workers into FTEs. The Interim Final Rule, at § 655.736(a)(2)(iii)(B), provides the employer a choice between two methods. First, the employer may count each part-time worker (
One commenter (AILA) suggested that the regulations enable employers to avoid any complicated calculation whatsoever where it is “readily apparent” that an employer is not H-1B dependent based on the make-up of its work force. AILA stated that an employer should be allowed a “safe harbor” when a quick, simple and straightforward calculation shows non-dependency. It suggested a calculation: the number of H-1B workers would be divided by the number of full-time employees; if the result is less than 15 percent, no further or detailed computation would be necessary, but if the result is greater than 15 percent, the employer would calculate its FTEs to determine its H-1B-dependency status. Rapidigm and ACIP agreed that a test should be provided for “readily apparent” status.
The Department agrees with the suggestion that there should be a simple method for determining whether the employer's status as either H-1B-dependent or non-dependent is “readily apparent.” The NPRM stated the Department's belief that, for most employers, dependency status would be “readily apparent” and, therefore, they would not need to make a calculation of their FTEs in order to be able to attest to their status. The Department, in § 655.736(c)(1) and (2) of this Interim Final Rule, is adopting a provision which requires no computations by the employer with “readily apparent” status, and is also adopting the AILA-recommended 15 percent “snap shot” test as the means for an employer with borderline status to determine whether it must engage in the full computation of the number of FTEs in its work force in order to determine its H-1B-dependency status. The “snap shot” test allows small employers (
The ACWIA definition of “H-1B-dependent employer” and the new LCA attestation elements that are required of such an employer do not clearly define the timing of the dependency determination. The questions therefore arise: When must a new LCA be filed and what obligations, if any, does an employer have if its dependency status changes?
The Department, in the NPRM, expressed concern that if H-1B-dependent employers are permitted to continue to use LCAs certified before this Rule is effective, they could avoid any application of the law's new attestation provisions (which are applicable only to LCAs filed after the issuance of this Rule and before October 1, 2003 (the “sunset” date as extended by the October 2000 Amendments). An LCA is ordinarily valid for up to three years from its date of certification by ETA and can provide for numerous H-1B nonimmigrants to be hired during that period. Thus an employer could use a previously-certified LCA to bridge the entire period during which the new LCA attestation elements would be required. H-1B-dependent employers could, in effect, disregard all of the new
The Department proposed that, by operation of the regulation, any current LCA(s) would become invalid for an employer that is or becomes H-1B-dependent, for purposes of any future H-1B petitions (including extensions). The employer's previously certified LCA(s) would continue to be valid, however, and the obligations under that LCA(s) would continue with respect to any petitions filed before the effective date of these regulations (
The NPRM discussed the timing and frequency of employers' determinations of their H-1B-dependency or non-dependency status. The Department recognized that the make-up of an employer's workforce—and, thus, its H-1B-dependency status—could change significantly over time. The Department therefore suggested that an employer's status would need to be redetermined at appropriate times, and reflected in the employer's actions, in order for the new LCA obligations to be appropriately implemented. The Department proposed that an employer would be required to make a determination of its status not just prior to or on the effective date of the regulation, but also when it files any new LCA or H-1B petition (including extensions) after that date. Thus a non-dependent employer (
The Department also described alternative approaches to the proposed timing of dependency determinations, such as having the dependency update determined on a set, regular basis (
The NPRM explained that the Department believed that, as a practical matter, the continuing obligation of the non-dependent employer to ensure that its dependency status has not changed would not place an undue burden on employers. For most program users, their status as non-dependent would be readily apparent and they would have no obligations to perform the full computations or to file new LCAs. (
The statements by Senator Abraham and Congressman Smith in the
Sixteen commenters responded to various aspects of these NRPM proposals.
Eleven commenters addressed the Department's proposal to invalidate the LCAs of H-1B-dependent employers for purposes of petitions for new or extended visas. Four commenters (Senators Abraham and Graham, AILA, ITAA, and Baton Rouge International, Inc. (BRI)) challenged the Department's authority to invalidate LCAs already in effect. Senator Abraham stated that Congress specified in ACWIA that the new attestation requirements would apply only to LCAs filed on or after the date of the Department's final regulations. Three of these commenters (BRI, AILA and ITAA) also asserted that the proposed rule would be invalid as retroactive rulemaking.
An attorney (Hammond) acknowledged the Department's reasons for its proposal as legitimate and did not challenge the Department's authority to invalidate existing LCAs; but questioned the proposal because of the paperwork and processing burden on the Department and the INS. Hammond recommended that, instead of invalidating the previously-certified LCA, the Department and INS should require an affidavit, mirroring the dependent employer attestations, on any new petitions filed using “old” LCA forms. Hammond further recommended that the proposed invalidation of existing LCAs be phased in over a six-month period. Another attorney (Latour) acknowledged that while the proposal was burdensome, there seemed to be no attractive alternative to requiring H-1B-dependent employers with existing LCAs to file new LCAs for the purpose of filing new H-1B nonimmigrant petitions. Another commenter (Simmons, Ungar, Helbush, Steinburg & Bright (Simmons, Ungar)) also recommended a phase-in period and suggested a three- to six-month window for filing new LCAs; this commenter expressed concern that the requirement of immediate new LCAs would lead to significant disruptions in ongoing critical projects.
The Department has carefully considered the views of the commenters who asserted that the proposed rule would be contrary to the meaning of the statute or invalid as retroactive rulemaking, but disagrees with their conclusions. To the contrary, the proposed rule is not inconsistent with the language of the ACWIA. The Act makes the new attestation elements apply to “an application filed on or after the date final regulations are first promulgated to carry out this [provision], and before October 1, 200[3]” (the “sunset” date having been extended from 2001 until 2003 by the October 2000 Amendments). The ACWIA is silent regarding the timing of the employer's determination of its dependency status or the effect of the ACWIA on previously certified LCAs, leaving a gap to be filled by these rules.
Given the significance of the new attestation requirements in the ACWIA, we believe it is reasonable for the Department to avoid the nullification of these requirements by issuing regulations which require employers to make dependency determinations if they choose to file new H-1B petitions
It is also the Department's view that the regulation would not be invalid as retroactive rulemaking. The rule does not create a new obligation, impose a new duty or attach a new disability with respect to transactions already taken.
The Department wishes to emphasize that an LCA certified prior to this Rule will continue in effect for the vast majority of program users who are not H-1B-dependent. Furthermore, such LCAs will remain in effect for H-1B-dependent employers and willful violators except that they may not be used to support new H-1B petitions or applications for extension of status. Thus, for example, the prevailing wage rate and obligation under the “old” LCA would remain in effect even for H-1B-dependent employers and willful violators with respect to any H-1B workers supported by the “old” LCA. A new LCA (and new wage rate) would be necessary only where an H-1B-dependent employer wants to petition for new workers or request extensions for existing workers (who would typically require a new LCA in any event).
The Department has also considered the suggestion by some commenters that the requirement of new LCAs be phased in over some period of weeks or months following the issuance of this rule. However, the Department is confined by the ACWIA language prescribing that the obligations are effective for LCAs that are filed on or after the date this rule is promulgated. Further, the Department is aware that the new attestation elements will be effective only with respect to LCAs that are filed during a relatively short period (
The Department understands that INS plans to modify its petition form to obtain information about a petitioner's H-1B-dependency status, and in its adjudication of H-1B petitions, will review LCAs filed by dependent employers to ensure that the LCA reflects the employer's status as set forth on the petition. Thus, it is the Department's expectation that if a dependent employer seeks to support an H-1B petition with an LCA which does not identify itself as H-1B-dependent and attest to the new attestation elements for dependent employers, INS will advise the employer that it must obtain a new LCA.
Nine commenters addressed the Department's proposal concerning the timing or frequency of the employer's determination of its H-1B dependency status.
One commenter (AILA) supported the Department's proposal that the dependency determination be made each time an LCA is used by the employer in support of an H-1B petition. Four commenters (AFL-CIO, AOTA, APTA, and AILA) supported requiring that employers determine dependency when filing an LCA.
Five commenters (Intel, Computec International Resources (Computec), ACIP, SemiConductor Industry Association (SIA), and ITAA) objected to the Department's proposal requiring employers to make dependency determinations when filing an LCA or H-1B petition; they viewed the requirement as unrealistic and burdensome. SIA and ITAA suggested annual dependency determinations. ACIP suggested that determinations be made annually or at the time there is a large increase in H-1B staff. Intel and Computec suggested that dependency be determined on a quarterly basis, and Intel stated its view that an employer's dependency will not change from one filing to another.
Having considered the varying views of the commenters, the Department has concluded that the proposed approach is appropriate in that it achieves the purposes of the Act while not imposing an unreasonable burden. No employer will be required to make a determination of its dependency status unless it wishes to file petitions for new workers or to seek extension on the visas of existing workers (
Three commenters responded to the Department's alternative suggestion that the validity period of an LCA might be shortened from the current rule's maximum period of three years. The AFL-CIO recommended that the LCA validity period be shortened to six months. AOTA recommended a quarterly (three-month) filing requirement. BRI opposed the reduction of the LCA validity period, asserting that quarterly or semi-annual LCAs would overburden and backlog administering agencies.
The Department considered the comments pertaining to the possibility of reducing the validity period of the LCA. However, we see no advantage that would outweigh the significant increase in the burden on employers and government agencies due to the repeated submissions of new LCAs upon the expiration of short-lived LCAs. Therefore, the Interim Final Rule does not make any reduction of the LCA validity period of three years.
After consideration of all these comments, the Interim Final Rule, at § 655.736(c) and (g), adopts the proposal that H-1B-dependent employers be required to file a new LCA if they wish to file new H-1B petitions, or extensions of status, after the effective date of the regulations. In addition, if a non-dependent employer becomes dependent after the effective date of the regulations and wishes to file new H-1B petitions or extensions of status, it must file a new LCA attesting that it is dependent and agreeing to the new attestation requirements for H-1B-dependent employers. Thus an employer must consider and attest to its dependency status each time it files a new LCA; similarly, as discussed below, an employer seeking to file a new H-1B petition, or seeking an extension of status, must use an LCA in support of the petition that accurately attests as to its dependency status at the time it files the petition. An H-1B employer that changes its status to non-dependent but wishes to petition for additional H-1B nonimmigrants or extensions of stay using an approved “dependent” LCA continues to be bound by the dependent-employer attestation requirements unless it files a new LCA attesting to its non-dependency.
The Department, in the NPRM, discussed the issue of what records, if any, the employer would be required to create and retain concerning its dependency determination(s). The Department proposed that documentation be created and retained only when an employer's non-dependent status is not readily apparent. On the other hand, the Department also proposed that if the employer's dependency status is “readily apparent” (either dependent or not dependent), no records would need to be made or retained. The Department sought comments on whether there should be an explicit standard for when the employer's status is “readily apparent.” (See discussion of “snap shot” determination in IV.B.1, above). Further, the Department proposed that if the employer's dependency status changes, the employer should retain records in the public access file reflecting the change and, if the change of status is from dependent to non-dependent, the public access file must show the underlying computation. Finally, the Department requested comments on the feasibility and appropriateness of the regulation specifying that no records are required if the dependency determination could be made from publicly available records and, if so, what public records are generally available for this purpose.
The Department received 13 comments on these proposals.
Kirkpatrick & Lockhart, Latour and AOTA supported the NPRM proposals. The AFL-CIO, Rubin & Dornbaum, and White Consolidated Industries suggested that all employers be required to document not only their status but also the underlying mathematical computations. AILA stated that the Department should not require recordkeeping of the calculation by any employer, but especially it should not require non-dependent employers to retain dependency documentation and keep it in public access files. Intel and ACE agreed with the proposal that no record needs to be kept where the employer's non-dependent status is readily apparent. ITAA suggested that the regulation should prescribe a bright line test to show when employers are required to create and maintain records, and that no records at all should be required of employers that concede that they are H-1B-dependent. ACIP suggested that the Department should advise employers how long they are to keep records and should allow employers five working days to produce their dependency status records in the event of an investigation. Rapidigm suggested that the records used to make the dependency determination should be made accessible to the Department on a quarterly basis. Computec suggested that an employer be required to keep dependency records in only one location (apparently based on the misunderstanding that public access files must be maintained in numerous locations).
Having taken into consideration all of the commenters' varied views pertaining to the creation and retention of documentation regarding the determination of dependency status, the Department has concluded that modification of the proposal is appropriate to achieve the purposes of the ACWIA while avoiding unnecessary burdens on employers. The Department first notes that for the vast majority of employers using the H-1B program, their dependency status (either non-dependent or H-1B-dependent) will be obvious and stable and they, therefore, will have no documentation burden; a small number of employers with “borderline” status or changing status will be required to document their determinations of status and/or their changes of status, but the documentation burden will be minimal.
The Interim Final Rule requires that employers determine their dependency status the first time after the Rule is in effect that they file an LCA or an H-1B petition or extension under an existing LCA. Employers may use the “snap shot” test to determine if their dependency status is readily apparent, but must do the full computation if the number of H-1B workers divided by the number of full-time workers in their workforce is more than 0.15, and must retain a copy of the full computation if they then conclude that they are not H-1B-dependent. The regulations do not require that an employer do the computation, but do require that the employer consider its status, each time thereafter that an LCA or H-1B petition is filed; the employer must attest as to its status on each LCA, and may not use a non-dependent LCA to support new H-1B petitions or requests for extensions if its status changes from non-dependent to dependent. Furthermore, we understand that employers will be required to indicate their status on each H-1B petition or extension filed with INS. Thus it is important that employers remain cognizant of their dependency and do a recheck of their dependency status if the make-up of their work force changes sufficiently that their status might possibly change.
If an employer changes status from dependent to non-dependent, the employer will be required to retain a copy of the full computation of its status. The Interim Final Rule also requires a recheck of dependency (whether the “snap shot” test or the full
The Department has concluded that it is not necessary, however, to include either the computations or a summary of the computations in the public access file. The Department believes that the notation on the LCAs as to dependency status constitutes the information necessary for the public. In addition, the Interim Final Rule, at § 655.736(d)(7), requires the employer to include a notation in the public access file listing any other entities which are considered to be part of a “single employer” for purposes of the dependency determination. Further, all employers are required to retain copies of H-1B petitions and requests for extensions filed with INS and to make petitions and payroll records available to the Department in the event of an investigation.
The current regulation contains guidance that meets the concerns of some commenters pertaining to location of public access files and the length of time that records must be retained. Section 655.760(a) directs the employer to make a public access file available in either of two locations (its principal place of business in the U.S. or at the worksite) and describes the required contents of the file. The regulation does not mandate a separate file for each H-1B worker or for each LCA. If the employer maintains one public access file for all of its LCAs, documentation specific to an LCA should be attached to the respective LCAs in the file; where documentation is common to all LCAs, only one document need be retained in the file. The record retention period is set forth in § 655.760(c), which has been clarified to require that records be retained for one year beyond the last date on which any H-1B nonimmigrant is employed under the LCA or, if no nonimmigrants were employed under the LCA, one year from the date the LCA expired or was withdrawn. The regulation further requires that payroll records be retained for a period of three years from the date(s) of the creation of the record(s). If there is an enforcement action, records shall be retained until the enforcement proceeding is completed.
With respect to the suggestion that the regulations allow employers five working days to produce records as to dependency status, the Department believes that such a provision in the regulations is unnecessary. Wage-Hour district offices commonly make appointments with employers before an investigation commences, thereby allowing employers time to produce necessary records. For employers who are required to make and retain computations of their dependency status, the Department would anticipate that the computations would be provided promptly to Wage-Hour. Wage-Hour will allow employers reasonable time to gather back-up documentation needed to support the computation, or for Wage-Hour to make the computation if none has been made by the employer, taking into consideration the fact that the statute provides that the investigation is to be completed within 30 days.
The Department proposed in the NPRM that the revised attestation form (LCA), at a minimum, would require that every employer which is H-1B-dependent at the time it files an LCA, affirmatively acknowledge its status and obligations by checking a box on the LCA attesting to its dependency and its compliance with the additional attestation requirements concerning non-displacement and recruitment of U.S. workers. With respect to an employer which is not H-1B-dependent at the time it files an LCA, the NPRM set out three alternatives for the LCA form:
1. The employer would expressly attest that it is not H-1B-dependent and that if it later becomes dependent, it will comply with the additional attestation requirements; or
2. The employer would not have to attest that it is not dependent, but the LCA would clearly state—and by signing the form the employer would agree—that the employer is required to comply with the additional attestation requirements if it does become dependent; or
3. The employer would not have to attest that it is not dependent, but the LCA would clearly state that it could not be used in support of any H-1B petition filed after the employer became dependent.
The NPRM included a draft revision of the LCA form, which included a “box” for the employer's acknowledgment of H-1B-dependent status but no “box” regarding non-dependent status. The draft also included a “box” for the employer to indicate that the LCA would be used only for “exempt” H-1B workers, as well as a “box” for the employer's acknowledgment of a finding of a willful violation or misrepresentation of material fact.
Thirty-two commenters, including 20 members of the general public, responded to the Department's proposals. The majority of commenters endorsed the “check box” approach for the LCA and favored the use of an LCA form which clearly reflects the employer's status and obligations. For example, Intel stated that “[b]y checking a box, it will clearly be evident whether an employer is dependent or non-dependent.” The majority of commenters (each of the 20 individuals, the AFL-CIO, Kirkpatrick & Lockhart, Latour, the Institute of Electrical and Electronics Engineers (IEEE), and the American Engineering Association (AEA)) suggested that all employers be required explicitly to attest to their status as dependent or non-dependent when filing LCAs. Three commenters (APTA, ITAA, and Cooley Godward) endorsed NPRM proposed alternative 2. BRI favored either option 1 or option 2. ITAA suggested that non-dependent employers should not be required to check any boxes, but should be given separate LCA forms. AILA suggested that an employer intending to use the LCA only for “exempt” H-1B workers should be allowed to check a single box indicating that intention and not be required to take any action with regard to determining H-1B-dependency or marking any boxes on the LCA as to dependency status. Several other commenters supported the proposal that the LCA should have a method by which the employer could explicitly designate that the LCA will be used exclusively for exempt H-1B workers. Two commenters (Intel) recommended that employers check one of three boxes, but suggested different approaches than those offered in the NPRM. Intel
The Department has reviewed all of the comments and has determined that the proposed regulation and LCA revision will be modified along the lines recommended by Intel. In light of the strong views of the majority of the commenters, the LCA will require that every employer mark a “box” to explicitly designate its status as either H-1B dependent or non-dependent. The LCA will also provide a “box” by which an H-1B-dependent employer can designate that it will use the LCA only for exempt workers. It is our understanding that if the latter “box” is marked, the INS will examine each petition supported by the LCA to determine whether the beneficiary is “exempt” (see discussion in IV.C, below). After careful consideration, the Department has concluded that it would not be appropriate or feasible to allow all employers to mark only a “box” for exempt workers and then make no further determinations or designations as to dependent status as suggested by AILA and ITAA, because such an approach would impose an unreasonable administrative burden on the INS in examining the exempt status of workers employed by the vast majority of employers which are non-dependent. The Department believes that the burden of determining dependent status under the Interim Final Rule is minimal, especially for the vast majority of employers whose status is readily apparent, and that it is not unreasonable to require such employers to attest as to their non-dependent status.
In the event that an employer's dependency status changes (either to dependent or to non-dependent) after the LCA is filed and the LCA therefore no longer accurately reflects that status, a new LCA designating the new status would have to be filed if the employer wants to seek access to H-1B workers through either new petitions or requests for extensions (see discussion in IV.B.2, above). Similarly, an employer which attests that it will use an LCA only for exempt workers may not use the LCA for non-exempt workers. However, the LCA will provide that in the event an employer violates these provisions—by utilizing an LCA attesting that it is non-dependent when in fact it is dependent, or by utilizing an LCA for non-exempt workers where it has attested that it will only be used for exempt workers—the employer will be bound by the attestation requirements for dependent employers.
In the NPRM, the Department provided advance public notice of an anticipated change in the existing system for processing LCAs. Such applications were previously required to be submitted by U.S. mail, FAX, or private carrier, to one of 10 ETA regional offices, as delineated in § 655.720. Since March of 1999, the Department has been operating a pilot program involving the automated processing of LCAs. Although the Department encountered a number of technical problems throughout the operation of the national pilot, we believe that these problems have been resolved. Despite these temporary setbacks, the program thus far has generally proven to be successful. Therefore, the Department intends to fully implement the automated processing of all LCAs submitted by employers of H-1B nonimmigrants.
The transition to the automated system will occur on February 5, 2001, the date on which the relevant sections of this Rule (§§ 655.720 and 655.721) become applicable as stated in the DATES provision of this Preamble. Because the new system requires ETA to create appropriate software, obtain necessary hardware (including telephone lines, scanners, and other facilities), and obtain and train new staff, as well as conduct field trials to verify the reliability of the system once it is in place, the Department has concluded that it will not be feasible for the system to be operable before February 5, 2001. This delay in the applicability of the new system will also enable ETA to process all “old” LCAs which may be in queue in the current system (including the current FAX-back system) on the effective date of the Interim Final Rule. During the interval between the effective date of the Interim Final Rule (January 19, 2001) and the applicability date of the new system (February 5, 2001), LCAs will not be accepted by FAX but must, instead, be submitted in hard copy. The Department recognizes that this hard copy filing will be an inconvenience to employers, but we anticipate that this short-term inconvenience will be fully offset by the increased efficiency and reliability of the automated system which will be available after February 5, 2001.
On the effective date of this Interim Final Rule, January 19, 2001, the revised version of Form ETA 9035 will become the sole form for use by employers and their attorneys; thereafter, prior versions of the Form ETA 9035 will not be accepted for processing. The redesigned Form ETA 9035 is being published as an appendix to this Rule. Note that Form ETA 9035 no longer contains the full statements of the attestations required by the Act and the regulations. Rather, these statements, together with the instructions for filling out the form, are contained in the new cover pages, Form ETA 9035CP, and incorporated by reference in Form ETA 9035. The employer, through its designated official, is required to read the attestation statements set forth in the cover pages and indicate on the Form ETA 9035 its concurrence with the statements in Form ETA 9035CP.
The revised form is to be completed with a program that will be made available for download from the Department's World Wide Web site at
During the interim period as described above, the LCA may be submitted in hard copy by U.S. mail or private carrier. After February 5, 2001, the LCA may be submitted in hard copy by U.S. mail to the ETA Application Processing Center at the P.O. Box address identified in § 655.720(b) of the Interim Final Rule; delivery by private carrier will no longer be allowed because such carriers cannot deliver
The automated processing system will electronically scan the incoming facsimile, extract the information contained in the application, record the information in a database, and make the appropriate determination to certify or to reject the application. LCAs that are mailed to ETA will be electronically scanned and entered into the automated processing system. As under the current manually-operated system, the application will be certified and FAXed (or mailed) back to the submitter if the appropriate boxes are checked, the required information is provided on the form, and the form has been signed and dated by the employer. If the form is incomplete or contains obvious inaccuracies, it will be rejected and sent back to the submitter with an addendum that identifies the deficiencies in the application.
At the present time, the ETA Web Site at
The Department received 10 comments on the proposed form and automated processing system. Most commenters generally favored the Department's proposal but expressed the desire that it be thoroughly tested before being implemented on a nationwide basis. We believe that the system has had an extensive pilot test. In Fiscal Year 2000 alone (October 1, 1999 through September 30, 2000), the Department processed nearly 300,000 applications using the automated system. Since the inception of the system in March of 1999, each of the two nodes of the system has processed over 200,000 applications. While a number of technical problems have been encountered, the Department is confident that the system should be fully implemented.
Six commenters were critical of the Department for not producing a version of the form-fill program that will run on the Apple Macintosh operating system. The program that was utilized during the pilot test was a Windows-based program that ran only on computers with a Windows operating system. These commenters urged the Department to develop a version of the program that will run on Macintosh computers or, alternatively, to use a platform-neutral format such as Adobe Acrobat. The Department agrees with these commenters and has developed a program to be used to complete the form in a platform-neutral format, Adobe Acrobat. This software will be widely distributed and, as previously stated, will be available for download from multiple locations on the World Wide Web.
One commenter (ACIP) expressed concern that since much of the print on the form is in such a small font, the form may be rendered illegible in the FAX transmission process from the attorney to the employer to the automated processing system.
The Department is aware of this potential problem and has identified technologies that would allow the form to be transmitted via electronic mail which will be included as part of the program. Under this scenario, after the employer's attorney or agent completes the form using the program, the form could then be e-mailed to the employer and printed out for the employer's signature and subsequent FAX transmittal to the automated processing system. Thus, the form FAXed by the employer to the Department would still be an original document. The pilot test has shown that documents other than an original (
Intel and ACIP stated that the proposed four-page form is impractical to “post” to satisfy the employer's obligation of notice to workers. These commenters suggested that the form be redesigned so that all of the information that is required to be contained in the notice (set forth at § 655.734(a)(1)(ii)) appear on the same page.
The Department does not believe this to be practical, given the amount of information that is required to be contained in the notice and the amount of space taken up by those items on the form. However, the Department has modified the proposed LCA form, compressing it to three pages rather than four pages as proposed. The Department is exploring technologies that would allow an employer, in addition to printing the pages of the form itself, print a separate page with those data elements from the form that are required to be contained in the notice. The employer will have a choice of posting the three-page form or another notice containing the required information. Should the Department's efforts to modify the software to enable an employer to print a one-page posting addendum with the requisite data elements from the form prove successful, posting the addendum would also satisfy the notice requirement. The Department notes, however, that the employer is required by the current regulations at § 655.734(a)(2) to provide the entire certified LCA to the H-1B workers no later than when they report to work.
One commenter (ACIP) inquired as to whether the pages of the form may be stapled together or whether the pages must be posted side-by-side. The Department believes that a posting consisting of the pages stapled together would satisfy the notice requirement, provided of course that it is done in such a fashion as to permit interested parties to readily view each page of the form.
Another commenter expressed concern that the proposed form would not permit an employer readily to take advantage of the new provision which permits an employer to satisfy the notice requirement electronically. Notwithstanding the fact that the form itself does not need to be posted electronically—only certain data contained therein—the Department has also identified technologies that allow an employer to directly notify its employees by sending a copy of the application by electronic mail to
The Department has also made a slight modification to the proposed form to allow employers to continue to have the option of expressing the rate of pay as a pay range. This option was omitted from the draft form which appeared with the proposed rule published in the
Several commenters expressed concern that the Department would not devote adequate resources, including personnel and infrastructure, to support the automated processing system. The Department notes that the new system will be supported by the monies allocated to the Department to reduce the processing time of LCAs as part of the $1,000 fee imposed upon employers of H-1B nonimmigrants (
The regulations have been modified at §§ 655.720 and 655.730 to reflect the changes in the processing of the LCA, and to require that the revised Form 9035 be either FAXed to the 1-800 number identified above or transmitted by U.S. mail to the ETA Application Processing Center at the address specified in the regulation and on the Form. Revised § 655.720, along with new § 655.721, becomes applicable on February 5, 2001.
The Department cautions employers that the changes being made in the LCA form and the LCA filing and processing system do not modify the substantive obligations of employers concerning their attestations (
The ACWIA relieves H-1B-dependent employers and willful violators from the additional attestation elements if the LCA is used only for “exempt” H-1B nonimmigrants. In the words of Senator Abraham, “* * * employers required to include the new statements on their applications are excused from doing so on applications that are filed only on behalf of ‘exempt’ H-1B nonimmigrants.” (144 Cong. Rec. S12751 (Oct. 21, 1998)). See also the statement by Congressman Smith, 144 Cong. Rec. E2325 (Nov. 12, 1998).
In addition, for a limited time after the ACWIA's enactment, neither the numerator nor the denominator of the ratio of H-1B nonimmigrants to full-time equivalent workers, used to determine H-1B dependency, was to include “exempt” H-1B workers. Because that time will have expired with the promulgation of this Rule, this provision no longer has effect and it is not incorporated in the regulations.
The ACWIA establishes two tests for whether an H-1B nonimmigrant is “exempt.” The H-1B nonimmigrant must either (1) “receive[] wages (including cash bonuses and similar compensation) at an annual rate equal to at least $60,000,” or (2) “ha[ve] attained a master's or higher degree (or its equivalent) in a specialty related to the intended employment”.
In introducing the topic of exempt status, the NPRM noted that the statutory language seems clear. A dependent employer or willful violator is required to attest and comply with the new attestation elements unless the only H-1B nonimmigrants employed pursuant to the LCA are exempt workers. It was the Department's reading of this ACWIA language that if a covered employer used an LCA in support of any nonexempt worker, that employer would be obligated to comply with the new attestations with respect to all H-1B nonimmigrants hired pursuant to that LCA, exempt as well as nonexempt. However, the NPRM noted that the employer would be free to file separate LCAs for its exempt and nonexempt workers. (
The NPRM also specified that initial determinations of workers' exempt status will be made by INS while adjudicating petitions filed on their behalf by their prospective employers. The Department proposed that copies of the approved H-1B petition, with the INS determination as to exempt status, should appear in the employer's public access file. The Department stated that, in the event of an investigation, considerable weight would be given to the INS determinations of exempt status based on educational attainment. However, if the exemption was claimed based on earnings, the employer would be expected to document that the exempt H-1B nonimmigrant actually received sufficient pay to satisfy the statutory wage “floor” of $60,000.
Six commenters responded to these proposals.
The proposal that INS initially determine exempt status when it adjudicates petitions evoked a mixed response. Senators Abraham and Graham stated that the ACWIA does not grant either INS or DOL the authority to prevent approval of a visa on the basis of whether or not an individual qualifies as “exempt.” Similarly, AILA questioned the authority of DOL to delegate this review to INS and expressed concern that INS lacks the resources to make timely assessments of this issue; AILA stated that such review is contrary to the nature of the LCA as an employer attestation document, and that a worker's status should be reviewed only pursuant to a DOL investigation. AILA further suggested that DOL should accept an employer's reasonable determination of exempt status, or at a minimum should not assess penalties if the employer's reasonable determination is in error.
Conversely, ACIP, ITAA and Rapidigm agreed that the INS should make the exempt determination and suggested that its determination of educational relevance should be dispositive; ACIP pointed out that employers should first have an opportunity to challenge rejected claims. BRI questioned how INS can make an “initial” determination of the exemption status since employers must make the determination at the time the LCA is filed.
It is the Department's understanding that INS will examine the exempt status of any nonimmigrant whose petition is accompanied by an LCA that indicates that it is to be used exclusively for exempt workers. This INS review will not be pursuant to a delegation from DOL. Rather, INS has advised that it considers this review to be an appropriate adjunct to its role in
The Department anticipates that in most cases, INS will need to do no more than review the stated wage level to ensure that it would equal at least $60,000 per year. Only where the wage standard would not be met will it be necessary for INS to review a worker's educational qualifications. As discussed in IV.C.2 and IV.C.3, below, the Department believes that this determination too can be easily made in most cases, and therefore that INS review of valid exemptions should not ordinarily delay approval of a petition.
The Department in an investigation will ensure that a worker whom an employer attested will be paid more than $60,000 per year has in fact received the required compensation. Only if the employer had so attested and the earnings floor has not been satisfied will the Department determine whether the worker is exempt based on educational attainment (including the field of study). However, where the employer did not attest that a worker would be paid more than $60,000 per year but instead makes its claim of exemption based only on educational attainment, and INS has determined that an H-1B worker is exempt based on the evidence submitted to it of educational attainment, that INS determination will be conclusive unless the Department finds that the INS determination was based on false information.
The Department notes that this “up front” review by INS should generally avoid the situation which could arise in DOL enforcement if an employer erroneously determined a worker is exempt based on educational attainment, but DOL later determines the worker is not in fact exempt. In such situations, the employer would face possible penalties for misrepresentation and failure to perform the required attestation elements. DOL cannot agree with AILA's suggestion that the special attestation protections for U.S. workers would not apply where an employer has made a reasonable but erroneous determination as to exempt status. Furthermore, the Department believes that penalties are a particularly important remedy since, as a practical matter, it will often be impossible to cure such violations after the fact. Nor does the Act provide any relief from debarment for a failure to perform the attestation elements regarding displacement of U.S. workers. Debarment and other penalties may be imposed for recruitment violations, however, only where such violations are “substantial.” The circumstances regarding the exemption determination, as well as the facts regarding the recruitment performed by the employer, will be taken into consideration in determining whether a recruitment violation is “substantial.” The circumstances will also be taken into consideration in assessing civil money penalties and in determining whether an employer has made a misrepresentation in its attestation that the LCA will only be used for exempt workers.
With regard to BRI's question of how INS can make an “initial” determination when the employer has already done so on the LCA, the Department clarifies that the term “initial” is used to distinguish between determinations made by the INS at adjudication and the occasional determination which might occur during Departmental investigation. It is of course necessary for the employer to make its own similar assessment as to the worker's exempt status prior to submitting the LCA and the worker's petition.
Rapidigm commented that exempt H-1B nonimmigrants should not be included in the ratio in making the dependency determination. The Department notes that the statute imposes a time limit upon the period in which exempt H-1B nonimmigrants are excluded from the ratio (
Finally, ITAA disagreed with the proposed requirement that employers maintain a copy of the H-1B petitions with the INS determinations of workers' exempt status in the public access file. On further consideration, the Department agrees that because of privacy considerations, these documents need not be included in the public access file. However, the Department believes that it is important for the public to know which workers are supported by an LCA for exempt workers, so that the public will know which workers are not covered by the new attestation elements, and be able to challenge exemption determinations where there is reason to believe the basis for the exemption is invalid. Therefore, employers will be required to include in their public access file a list of the H-1B nonimmigrants supported by an LCA attesting that it will be used only for exempt workers, or in the alternative, a simple statement that the employer employs only exempt H-1B workers. Furthermore, employers will need to retain H-1B petitions and any evidence regarding workers' exempt status (
The ACWIA provides that H-1B nonimmigrants will qualify as “exempt” if they receive wages (including cash bonuses and similar compensation) at an annual rate of at least $60,000. Those who receive this level of compensation will qualify as “exempt” without satisfying the alternative, educational standard.
In the NPRM, the Department proposed that, to ensure this standard is met, it should be interpreted consistently with the existing DOL regulations for determining if an employer has satisfied its other wage obligations under the H-1B program (20 CFR 655.731(c)(3)). Future (
In addition, the Department interpreted the statutory language
Ten commenters responded to the Department's proposals on this issue.
The AFL-CIO stated that exempt workers must receive $60,000 in wages annually as an entitlement. The AEA stated that exempt workers should receive $60,000 or higher without including any benefits or bonuses. APTA and AOTA stated that an exempt worker must receive wages equal to at least $60,000, which must not include other employee benefits, such as health insurance, retirement plans, and life insurance.
Senators Abraham and Graham and ACIP contended that the statutory language “at an annual rate equal to” requires the Department to permit part-time workers and workers who work only part of the year to be considered exempt if their rate of pay, extrapolated to full-year, full-time work would meet the $60,000 threshold. Latour noted that in the information technology industry, some of the most highly compensated and distinguished experts work part-time for several employers, and therefore suggested that the Department allow the $60,000 minimum compensation to be computed on an hourly, weekly, or other basis. The National Association of Computer Consultant Businesses (NACCB) expressed concern about nonimmigrants who terminate during the year, and therefore suggested the Department interpret the statutory provision to allow a worker to receive $1,200 in wages per week.
The Department concurs in the view expressed by employee representatives that fringe benefits in the nature of health insurance, pension, and life insurance, are not similar to cash bonuses and are not wages within the meaning of the definition of “exempt H-1B nonimmigrant.” Therefore benefits will not count toward the required $60,000 level under the Interim Final Rule.
The Department does not concur, however, with the view that the $60,000 minimum compensation requirement may be prorated for part-time employees. Congressman Smith, in describing the legislation prior to its enactment, stated that the additional attestation requirements will apply to H-1B-dependent employers petitioning for H-1B nonimmigrants without masters degrees who “plan to pay the H-1Bs less than $60,000 a year.” 144 Cong. Rec. H8584 (Sept. 24, 1998). Later statements in the
However, it is the Department's view that H-1B workers who are hired at compensation of at least $60,000 per year, but who are employed for less than a year, will satisfy the statutory requirement if they receive at least $5,000 for each month worked. For example, a worker who resigned after three months would be required to have been paid at least $15,000. Similarly, if the Administrator conducted an investigation and found that a worker had not yet worked a year, the Administrator would determine whether the worker had been paid $5,000 per month, including any unpaid, guaranteed bonuses or similar compensation.
ITAA concurred with the Department's view that unconditional, noncontingent bonuses or other payments may be counted toward the $60,000 compensation to qualify for the exemption. AEA opposed inclusion of bonuses at all, expressing concern that some employers might pay a very low wage and promise a bonus at the end of the year, but never pay the bonus unless “caught” before the end of the year. BRI suggested that the Department should allow an annual bonus to be paid on a specified date, contingent only upon compliance with the contract.
Since the ACWIA expressly permits inclusion of cash bonuses, the Department does not believe it has the discretion to exclude them from the required minimum compensation, as suggested by AEA. With regard to the bonus described by BRI, the Department is of the view that such a bonus would be in compliance only where the employer ensures that a worker who terminates employment before the end of the year in fact receives $60,000, prorated for the amount of time worked. An employer's remedy against the worker in such a case of early termination may be afforded by state law relating to the recovery of liquidated damages under the contract, as discussed in IV.J, below.
Also defined as “exempt” for purposes of the additional attestations are H-1B nonimmigrants who have “attained a master's or higher degree (or its equivalent) in a specialty related to the intended employment.” The Department proposed to define “or its equivalent” to mean a foreign academic degree equivalent to a master's degree or higher degree earned in the United States, and not to allow equivalency to be established through work experience.
The Department received ten comments on this proposal.
The AFL-CIO and AOTA agreed with the Department's interpretation limiting this prong of the exemption to nonimmigrants with a foreign academic degree equivalent to a U.S. master's or
Other trade associations and employers who commented on this issue generally disagreed with this interpretation. Six commenters (AILA, BRI, ITAA, Rapidigm, TCS, Satyam) contended that the Department's position is inconsistent with statutory language and current INS regulations. AILA asserted that the ACWIA's use of the phrase “master's degree or equivalent” rather than “master's or equivalent foreign degree” supports the well-established INS procedure of allowing equivalencies to be established through either degree equivalence or work experience in its adjudication of whether an applicant has the equivalent of a bachelor's degree for H-1B admission and whether an applicant has the equivalent of a master's degree for certain second preference employment admissions. Rapidigm and Satyam stated that different “equivalency” standards for H-1B admission and exempt status should not apply to the same pool of immigrants. TCS expressed concern that the Department's interpretation would lead to inquiries into the quality of education in foreign countries, rather than the level of education as contemplated by ACWIA; TCS contended further that since all foreign master's degrees are already incorporated under the term master's degree, the ACWIA phrase “its equivalent” must refer to something else.
Additionally, this Department requested the views of the U.S. Department of Education regarding this element of the ACWIA. The Department of Education, through its Office of Educational Research and Development, responded to this Department's inquiry.
The Office of Education Research and Improvement (OERI) expressed the general view that “possession of a master's degree or its equivalent” referred to master's degrees awarded by accredited United States institutions or degrees granted by foreign academic institutions, which as measured by educators within the United States, are at least equivalent to master's degrees awarded by accredited United States institutions. With regard to nonimmigrants possessing a United States degree, the OERI suggested a three-prong inquiry: (1) Was the awarding institution accredited at the time of the award by an association recognized by the Secretary of Education or is/was the institution a
The OERI expressed the view that basically the same inquiry should take place where the academic credentials are granted by a foreign educational institution. The OERI recommended that the inquiry begin by determining whether the awarding institution is/was a recognized institution under the laws and policies governing accreditation in the institution's country. It suggested that the second and third prongs of the test could be met by applying the guidelines, recommendations, and practices of the National Council on the Evaluation of Foreign Educational Credentials, a group managed by the American Association of Collegiate Registrars and Admissions Officers. The OERI explained that these standards are utilized by U.S. educators in assessing the
The Department is of the view that Congress intended exempt status to apply only to highly qualified employees. The Department therefore believes that Congress did not intend to substitute work experience for education, but rather required the attainment of an advanced academic degree (or the alternative $60,000 wage standard) for dependent employers and willful violators who may hire H-1B nonimmigrants without complying with the new attestation elements. In introducing the ACWIA on the floor, Congressman Smith explained: “[T]he compromise eases requirements on companies when they are petitioning for workers who have advanced degrees. * * * The point I want to make is that the term ‘or its equivalent’ refers only to an equivalent foreign degree. Any amount of on-the-job experience does not qualify as the equivalent of an advanced degree.” 144 Cong. Rec. H8584 (Sept. 24, 1998).
The commenters are correct in noting that the INS regulations they have cited, governing minimal qualifications for H-1B admission, do recognize work experience in lieu of an academic degree. However, the ACWIA employs the phrase “or its equivalent” in a subparagraph distinguishing minimally qualified “nonexempt” H-1B nonimmigrants from better qualified “exempt” workers. “A master's or higher degree (or its equivalent)” is one of two higher thresholds provided to draw this distinction. If the educational standard could be satisfied by relevant work experience alone, the wage threshold would serve no independent purpose. The added value of the $60,000 threshold is that it exempts well-compensated workers even if they have not attained a master's or higher degree, or have done so in a specialty not related to their intended employment. The “work equivalency” interpretation advocated by employers and their representatives blurs this clear statutory distinction between exempt and nonexempt nonimmigrants.
Moreover, it is the Department's view that its interpretation is fully consistent with the plain language of the statute, especially when contrasted with the language in section 214(i) of the INA, 8 U.S.C. 1184(i), which explicitly authorizes work experience in lieu of a bachelor's degree for admission as an H-1B nonimmigrant. The ACWIA exempts all H-1B nonimmigrants who have attained a master's or higher degree (or its equivalent) in a specialty related to their intended employment—with no suggestion that this requirement can be satisfied with work experience. The Department does not believe it is relevant that the INS regulations concerning admission of immigrants under the second preference employment category treat certain work experience as equivalent to a master's degree. Not only are those regulations unrelated to the H-1B nonimmigrant program, but the statutory language in section 203(b)(2)(A) of the INA, 8 U.S.C. 1153(b)(2)(A), is clearly distinguishable, granting preference to “qualified immigrants who are members of the professions holding advanced degrees or their equivalent.” Unlike the specific term “master's degree” cited in the ACWIA, the generic term “advanced degree” encompasses all post-graduate academic credentials. Consequently, the expression “advanced degrees or their equivalent” would seem to be without
The phrase “or its equivalent” in the ACWIA is not without meaning under the Department's interpretation. In fact, it is not uncommon for the titles of foreign degrees to differ from those used within the U.S. educational system, or for the same title to have different educational requirements. Differences in academic nomenclature can create significant confusion for government programs and universities that deal with persons educated abroad. The existence of credential evaluation services and academic guidelines for admission of foreign students to colleges and universities are indications that degree equivalency is not always readily apparent.
There is, however, a readily available source of information concerning degree equivalence. The National Council on the Evaluation of Foreign Educational Credentials (NCEFEC) and the American Association of Collegiate Registrars and Admissions Officers (AACRAO) have developed specific guidance for most countries regarding which education and training credentials are considered to be reasonably similar to corresponding U.S. credentials. AACRAO published these guidelines in 1994 in a publication entitled Foreign Educational Credentials Required for Consideration of Admission to Universities and Colleges in the United States (4th ed), which is widely used by admissions offices and credential evaluation services. These guidelines reflect the prevailing opinion and considered judgment of experienced foreign student admissions officers in U.S. colleges and universities. The Department will use this publication as a guide for determining degree equivalence. The AACRAO publication is available for a fee of $30 and can be obtained by contacting AACRAO Distribution Center, P.O. Box 231, Annapolis Junction, MD 20701, or through their website,
The AACRAO guidelines explain that a Ph.D. entry level document—
Because the AACRAO publication identifies academic prerequisites for entry into various levels of U.S. education, it must be used carefully. Three columns of information are provided for each country of origin: level of entry into the U.S. educational system; foreign certificates, diplomas or degrees required for admission at this level; and necessary supporting documentation. The first column displays the levels at which students are normally admitted into U.S. undergraduate or graduate programs. Within the graduate tier, the three levels of admission shown are Master, Ph.D., and Unclassified/Special. Persons entering Ph.D. programs would possess degrees equivalent to a U.S. master's, as set forth in the second column. Persons in the category “Unclassified/Special” would ordinarily possess degrees equivalent to a U.S. doctorate (Ph.D.), as set forth in the second column. (Persons whose credentials correspond to the entry “Master” currently have the equivalent of a U.S. bachelor's degree, qualifying them to begin master's level study.)
The Department seeks comments on whether it should incorporate the AACRAO publication in the Final Rule for use in determining whether a degree an H-1B nonimmigrant has obtained from a foreign educational institution is equivalent to a U.S. master's degree. In the alternative, employers would be able to present evidence of degree equivalence from a credential evaluation service where there is no foreign degree listed as equivalent to a U.S. master's, or where a worker obtained a degree in the past, and the terminology in the foreign country has changed.
As recommended by the OERI of the Department of Education, the Interim Final Rule requires that the institution from which the worker obtained its degree be recognized or accredited under the law of the country. The Interim Final Rule further provides that where an employer claims an H-1B nonimmigrant is exempt based upon educational attainment (rather than wages), the employer will be required to provide, upon request of INS or DOL, evidence that the worker has received the degree in question, as well as a transcript of the courses taken and grades earned.
The ACWIA specifies that the H-1B nonimmigrant who holds a master's or higher degree (or an equivalent degree) qualifies as “exempt” only if that degree is in “a specialty related to the intended employment.” The Department proposed that in order for the nonimmigrant's degree specialty to be sufficiently “related” to the intended employment to qualify for exempt status, that specialty must be generally accepted in the industry or occupation as an appropriate or necessary credential or skill for the person who undertakes the employment in question. Furthermore, the Department stated that it would give considerable weight to INS determinations concerning the academic credentials of H-1B nonimmigrants who are claimed to be “exempt” on this basis.
Six commenters responded to the Department's proposals on this issue.
AILA asserted that there is no statutory authority for the “appropriate or necessary” standard and that these terms are very different in that “related” does not mean “necessary.” AILA suggested that an employer should be able to determine what specialty degrees it considers to be “appropriate” and that it should be able to establish the relationship by a variety of means, such as through specific course work, or by showing that it is a standard company requirement and that all others in the same position have the same credentials.
ACIP acknowledged the statutory requirement that the master's degree or equivalent be in a field relevant to the occupation and suggested that due deference be given to an employer's determination that a degree is relevant. ACIP observed that employers are better placed than the government to track evolving occupations, job duties, and degrees. Other commenters (Kirkpatrick & Lockhart, Latour, TCS) went further and urged the Department to defer to an employer's good faith determination of what fields of study are related to the employment in question. One commenter noted that only one quarter of information technology professionals possess a computer science, computer engineering, or MIS degree.
The AFL-CIO suggested that the Department utilize the new North American Industrial Classification System (NAICS) in making the determination that a specialty is related to the employment; it stated that the NAICS includes job qualifications by occupational classification, formulated by the Bureau of Labor Statistics with the input of labor and business.
In addition, two law firms (Kirkpatrick & Lockhart and Latour) expressed the view that DOL should not judge the relevance of the alien's
The Department agrees that a worker may qualify as exempt by meeting either the salary or educational standard, and is not required to qualify under both tests. However, where the compensation level is not met, the Department cannot simply disregard the statutory requirement that the individual hold a master's or equivalent degree in a specialty related to the intended employment, nor can it automatically defer to an employer's judgment, as some commenters seemed to suggest. The Department considers it appropriate to provide guidance as to the meaning of the statutory requirement. As Congressman Smith stated, “It is also important to note that the degree must be in a specialty which has a legitimate, commonly accepted connection to the employment for which the H-1B nonimmigrant is to be hired.” (144 Cong. Rec. E2325 (Nov. 12, 1998)). The Department believes that its proposed standard—that the degree be generally accepted in the industry or occupation as an appropriate or necessary skill or credential—is an appropriate articulation of this requirement, and this standard is adopted in the Interim Final Rule. The Department does not intend to imply that a master's degree in a specific field must be a prerequisite for employment in the occupation in order for a worker to meet the “related” requirement for the exemption. On the other hand, the employer's statement of relevance cannot be accepted without substantiation since the employer would have little incentive to consider the relevance of the field in which a master's degree was earned if the occupation does not normally require a master's degree. For example, many employers seeking a systems analyst require a bachelor's degree in computer science, information science, computer information systems, or data processing, but not an advanced degree. In contrast, computer scientist jobs in research laboratories or academic institutions generally require a Ph.D. or at least a master's degree in computer science or engineering. U.S. Bureau of Labor Statistics, 1998-99 Occupational Outlook Handbook. The Department does agree, however, that a field not ordinarily considered relevant to an occupation could be related to a specific job. For example, a master's degree in public health could be a related field for a computer specialist in the health industry.
The Department concurs with the AFL-CIO proposal that an objective standard is appropriate as a guide in determining whether a field is related to an occupation. However, it is the Department's view that the NAICS is not appropriate since it spells out industrial rather than occupational codes. The Department believes that there are two occupational data systems that provide information better suited to the related field inquiry: the U.S. Bureau of Labor Statistics Occupational Outlook Handbook, and 0*NET 98.
The Occupational Outlook Handbook is a well-recognized source of job and career information. Revised every two years, the Handbook describes for about 250 of the most common occupations, what workers do on each job, their working conditions, earnings, and other pertinent information. For each job, the Handbook identifies the training, education, and licensing requirement for the occupation, if any, as well as the educational background desired by employers and the common educational background of persons in the occupation. The Handbook can be purchased from the Government Printing Office in paper, hard cover, and CD-ROM format. Groups of related jobs covered in the Handbook are available for purchase as individual reprints. The Handbook also can be accessed free of charge on the Bureau of Labor Statistics' website, at
O*NET 98 was recently developed by the Labor Department, with the input of both labor and business. This user-friendly electronic data system, designed to replace and expand upon the Dictionary of Occupational Titles (DOT), links various occupational classifications to one another and to the Department of Education's Classification of Instructional Programs (CIP). For each of the over 1,100 occupations in this system, an O*NET 98 occupational profile lists the principal fields of study appropriate to that occupation under the heading “instructional programs.” O*NET 98 can be purchased on CD-ROM or diskette from the Government Printing Office and can also be downloaded free of charge from the Department's website at
The Handbook and O*NET 98, in the Department's view, provide useful, objective guidelines for determining whether a specific academic discipline is related to the occupation, i.e., whether a degree in the field is generally accepted in the industry or occupation as an appropriate or necessary skill or credential. The Department will therefore utilize these sources as guides. The Department also will consider other industry studies obtained by employers or the opinions, solicited by the employer, from a bona fide credentialing organization attesting that a nonimmigrant's academic specialty is generally accepted by the pertinent industry or occupation as appropriate or necessary for the employment in question. Employers are encouraged to rely on these sources in determining whether a master's degree (or its equivalent) is in a field related to the job in question.
The Department also seeks comment on whether the Final Rule should incorporate the Occupational Outlook Handbook and O*NET as the primary sources for determining fields of study related to specified occupations. The Department realizes, however, that there may be other instances where a master's degree in a specialty that is not identified in either of these sources still may be recognized by the industry or occupation in question as related to the employment in question. The Department proposes that if an employer chooses not to rely on O*NET or the Occupational Outlook Handbook, or these sources fail to establish the required relationship, an employer seeking to establish such relationship could obtain a report by a credentialing organization that a degree in the field is recognized by the industry or occupation as an appropriate or necessary skill or credential. The Department seeks comment on whether this is an appropriate task for credentialing services, and whether there are other recognized sources of information which can and should be utilized for this purpose—in addition to, or in place of, the sources cited.
As discussed above, the ACWIA provides that “[a]n application is not described in this clause [i.e., is not subject to the new attestation requirements] if the only H-1B nonimmigrants sought in the application are exempt nonimmigrants.” The Department therefore proposed that a dependent employer or willful violator would be required to attest and comply with the new attestation elements unless the only H-1B nonimmigrants employed pursuant to the LCA are exempt workers. If a covered employer used an LCA in support of any nonexempt worker, that employer would be obligated to comply
The NPRM stated that the Department considered proposing that employers file separate LCAs for their exempt and nonexempt H-1B workers. However, the Department noted that two different workers might very well both be qualified for the same occupation, but one might be exempt and another nonexempt. Therefore the Department preliminarily concluded that it was not appropriate to restrict an employer's freedom to utilize an LCA for both exempt and nonexempt workers, provided that the employer in such circumstances complied with the additional attestation requirements for all of the H-1B nonimmigrants under the LCA. The Department noted in the NPRM that an H-1B-dependent employer or willful violator would be free to file separate LCAs for its exempt and non-exempt workers, thereby obviating the requirement of complying with the new attestation elements for its exempt workers. Furthermore, the NPRM provided that a dependent employer or willful violator who planned to utilize an LCA only for exempt workers would be required to so attest on the LCA.
Five commenters responded to this proposal.
The AFL-CIO strongly agreed that when exempt and nonexempt H-1B workers are included on the same LCA, the new attestations should apply to both. In its view, it would be illogical for a single document to impose different obligations on the employer with respect to different nonimmigrants supported by the same document. TCS, on the other hand, stated that while it does not itself use a single LCA for multiple workers, DOL should not take away an appropriate exemption when the LCA of an exempt worker also includes nonexempt workers. Rapidigm questioned why dependent employers should be required to submit two LCAs where, under the same circumstances, other employers are permitted to submit just one. BRI suggested that employers have one LCA and check a box to indicate that they will comply with the attestations for nonexempt workers only. ITAA expressed concern that DOL will not be able to handle the increased workload from multiple LCAs.
It is the Department's view that the unambiguous language of the statute relieves dependent employers and willful violators from the special attestation requirements only if the LCA is used only for exempt H-1B nonimmigrants. The Department points out that such employers are not required to submit separate LCAs for exempt and non-exempt workers. However, the Department notes that if an employer attests that an LCA will only be used for exempt employees, but the LCA in fact is used for both exempt and nonexempt workers notwithstanding the employer's attestation, the employer is required to comply (from the beginning of the LCA's effective period) with the special requirements with respect to all workers on the LCA (both exempt and nonexempt).
With regard to concern about the Department's ability to handle the additional volume of LCAs associated with separate applications for exempt and nonexempt workers, the Department estimates that this requirement will affect not more than 150 to 250 employers, with a midpoint of 250. Furthermore, the Department has instituted a new FAX-back system for processing and certifying LCAs, which will help streamline the process.
There were only two comments on the narrow issue of what form the revised LCA should take. The AFL-CIO stated that employers should indicate on the face of the LCA whether or not it will be used in support of H-1B petitions for exempt H-1B workers. BRI suggested that a box should be provided on the LCA which the employer could check, agreeing to comply with the attestations for non-exempt workers only; a separate written statement regarding the worker's exempt status would then be filed with INS.
As noted above, the Department will permit dependent employers and willful violators to utilize one LCA for both exempt and nonexempt workers, but the employer taking this course will be obliged to comply with the new attestation elements for all workers under the LCA. Therefore the Department does not consider it necessary to require such employers to indicate on the form that it will be used for nonexempt workers. However, the language on the LCA form is modified to make it clear that if an employer checks the box attesting that it will only use the LCA for exempt workers, the employer will not be permitted to use the LCA for nonexempt workers. This will permit the employer, the public, and the workers, as well as DOL, to know whether the additional attestation elements apply with respect to the workers under an LCA, and will permit INS to know whether the worker's exempt status must be verified. The LCA form is further modified to state that if an employer utilizes the LCA for a nonexempt worker in violation of its attestation, the employer will have been required to comply with the new attestation elements with respect to all H-1B nonimmigrants supported by the LCA.
Section 212(n)(1)(E) and (F) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(1)(E) and (F), imposes requirements upon H-1B-dependent employers and employers who have been found to have willfully violated their H-1B obligations that are designed to protect certain U.S. workers from being “displaced” by H-1B workers. As noted in the NPRM, such an employer is prohibited from displacing a U.S. worker who is “employed by the [H-1B-dependent] employer” and from displacing a U.S. worker who is employed by some other employer at whose worksite the H-1B dependent employer places an H-1B worker (where there are “indicia of employment” between the H-1B worker and the other employer). Thus, the prohibition may apply to the dependent employer's own workforce (primary displacement) or to the workforce of another employer with whom the dependent employer does business (secondary displacement). With respect to the dependent employer's own workforce, the prohibition applies during a period beginning 90 days before and ending 90 days after the date of the filing of an H-1B petition on behalf of the H-1B worker. With respect to a customer's workforce, the prohibition applies during a period beginning 90 days before and ending 90 days after the placement of the H-1B worker. As discussed at IV.C, above, the displacement prohibitions do not apply to LCAs that are used only to support the employment of “exempt” H-1B workers. See Section 212(n)(1)(E)(ii).
In introducing the compromise ACWIA bill to the Senate, Senator Abraham explained:
“[T]his legislation provides three types of layoff protection for American workers.
“Let me add that throughout the process of working on this legislation, we have been very mindful of the concerns people have that somehow these H-1B temporary workers might end up filling a position where an American worker could have filled the slot. Our goal is to make sure that does not happen, and we have built protections into this agreement which we and the administration feel will accomplish that objective.
“First, any company with 15% or more of its workforce in the United States on H-1B visas must attest that it will not lay off an American employee in the same job 90 days
“Second, an H-1B dependent company acting as a contractor must attest that it also will not place an H-1B professional in another company to fill the same job held by a laid off American 90 days before or after the date of placement.
“Third, any employer, whether H-1B dependent or not, will face severe penalties for committing a willful violation of H-1B rules, underpaying an individual on an H-1B visa, and replacing an American worker. That company will be debarred for 3 years from all employment immigration programs and fined $35,000 for each violation.”
The Department received virtually identical requests from several individuals that the Department provide additional information to U.S. workers so that they could better understand their rights; these individuals expressed their concern that H-1B workers might be used to replace older U.S. workers. As discussed in III.B, above, the Department plans extensive education activities in an effort to ensure that both U.S. and H-1B workers are aware of the provisions of the H-1B program as modified by the ACWIA. The Department acknowledges the concern among older workers that their employment may be placed at risk through the potential hire of younger H-1B workers, who may be willing to perform the same work at a reduced level of pay and benefits. Although the ACWIA may operate to reduce this possibility by requiring that H-1B workers be employed at no less than the higher of the prevailing wage or the actual wage paid by the employer for the work in question, the concerns of U.S. workers in this regard are more directly addressed by the Age Discrimination in Employment Act, 29 U.S.C. 621
The Department also notes that section 417 of the ACWIA directs the National Science Foundation to contract with the National Academy of Sciences to conduct a study to assess the status of older workers in the information technology field, including “the relationship between rates of advancement, promotion, and compensation to experience, skill level, education, and age.” See ACWIA, Section 417(b). The National Science Foundation also has been charged with conducting a study and preparing a report to assess labor market needs for workers with high technology skills during the next ten years. See ACWIA, Section 418(a) . The ACWIA further directs the Executive Branch to bring to the attention of Congress any reliable economic study that suggests that the increase in the number of H-1B workers effected by the ACWIA “has had an impact on any national economic indicator, such as the level of inflation or unemployment, that warrants action by the Congress.” See ACWIA, Section 418(b). Both of these reports were required to be submitted to Congress no later than October 1, 2000. NAS, through the Computer Science and Telecommunications Board, National Research Council, has invited submission of “white papers” and has scheduled a series of meetings to discuss and receive input for a single study addressing both sets of issues. Further information about this study, and the means by which members of the public may furnish input, can be found at
The ACWIA displacement protections only apply to U.S. workers “employed by the employer” and to U.S. workers “employed by the other employer” where the H-1B worker is placed at another employer's worksite and there are indicia of employment. See Section 212(n)(2)(E)(i) and (F) of the INA as amended by ACWIA, 8 U.S.C. 1182(n)(2)(E)(i) and (F). The ACWIA contains no definition of the phrase “employed by the employer.” The Department stated its view in the NPRM that where Congress has not specified a legal standard for identifying the existence of an employment relationship, the Supreme Court requires the application of “common law” standards, as held in
The Department received nine comments on its proposal.
The NACCB agreed that, in light of the absence of a statutory standard for determining the existence of an employment relationship, the common law standard should be used. It also observed that the common law test used under the Internal Revenue Code should be the same as the common law test set forth in the NPRM and should provide consistent results. The NACCB opposed application of the Fair Labor Standards Act test. The AFL-CIO also agreed that the common law test was appropriate and stated that this determination should be based on objective criteria. It urged the Department to prevent employers from hiding behind artificial titles and job descriptions; it also noted its belief that many individuals deemed independent contractors (or employees of a staffing firm) are actually common law employees.
Four commenters (AILA, ITAA, Latour, Chamber of Commerce) rejected the common law test as unnecessary, failing to reflect contemporary realities within the regulated community, or lacking predictability. ITAA also asserted that the ACWIA did not signal a departure from the definitions of an “employer” under the current regulations of this Department (20 CFR 655.715) and the INS (8 CFR 214.2(h)(4), 274a.1(g)). Three of these commenters recommended using the standards set forth by the Internal Revenue Service, noting that these standards are already used by the industry and would eliminate confusion and promote predictability. BRI and Baumann recommended that the Department eliminate “skill” as a factor because it is essentially a requirement of the H-1B program. Senators Abraham and Graham expressed the view that the proposed test was “unnecessarily complicated and subjective” and
After careful consideration of the comments, the Department has concluded that it should utilize the common law standards for determining whether a United States worker is employed by a dependent employer—the status that invokes the statute's protection against displacement. As noted in the NPRM, the Department believes that it is required by Supreme Court precedent to apply the common law test for employment relationship in the absence of plain statutory language directing the use of a different test. None of the comments submitted persuade the Department that it may craft a different test under the ACWIA.
Upon reflection, however, the Department has concluded that the regulation should not include a detailed list of prescribed factors. The Department believes that the factors identified in the NPRM provide a useful framework, based on the common law, for distinguishing between employees and independent contractors. Nevertheless, to avoid any potential misunderstanding that the factors on the list are exclusive or that factors not listed are less deserving of consideration, the Department has decided that no list of factors should be included in the Interim Final Rule. The Interim Final Rule reiterates that the common-law test requires an assessment of all the factors bearing on the employment relationship, with the right to control the means and manner of work being the key determinant but with no one factor controlling.
Some commenters expressed a concern that there is tension between the NPRM's formulation and the IRS test. However, the Department has not been persuaded that such a tension exists between these tests, which are both drawn from the common law multifactor analysis. The NPRM list of factors is quite similar to the factors identified in IRS Rev. Rul. 87-41, 1987—Cum. Bull. 296, 298-99. As noted in the NPRM, the proposed list of factors for determining whether an employment relationship exists was drawn from a framework developed by the EEOC for its policies on contingent workers. And as the EEOC recognized, its framework was derived from non-exclusive lists of factors in
Each of these sources for the common law test recognizes “the right to control” as the key determinant in ascertaining the existence of an employment relationship. As stated by the EEOC: “The worker is a covered employee * * * if the right to control the means and manner of her work performance rests with the firm and/or its client rather than with the worker herself.” Similarly, the IRS Revenue Ruling states: “[G]enerally the relationship of employer and employee exists when the person or persons for whom the services are performed have the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work, but also as to the details and means by which that result is to be accomplished. * * * It is not necessary that the employer actually direct or control the manner in which the services are performed; it is sufficient if the employer has the right to do so.” See also the Supreme Court in the
In the Department's view, the EEOC's approach (in EEOC Policy Guidance on Contingent Workers, Notice No. 915.002, Dec. 3, 1997) provides an especially useful model for identifying particular factors that can be applied in the context of H-1B employment, particularly where workers are placed at third-party employer worksites. The EEOC established the list as guidance for ascertaining an individual's employment status in the analogous context of staffing firm workers,
The Department is not persuaded that Congress evinced any intention that tax law principles should be applied by employers or this Department in determining employee status for purposes of the H-1B program. The statute evinces only that the common law test be applied, not any particular formulation of the test. The Department disagrees with the further suggestion that the IRS formulation of the common law test should be the preferred method for making employee status determinations. Such use could pose some problems in administering the H-1B program. While the IRS has developed a list of factors that it will consider in making employee independent contractor decisions, Congress, for an extended period of time, has limited that agency's interpretation and application of its common law-based test. Congress has imposed significant statutory limitations upon the IRS in collecting taxes from employers who fail to withhold taxes from individuals whom employers claim to be independent contractors. See,
The Department is not persuaded that the factor relating to a worker's level of skill or expertise should be eliminated from the common law test. While the Department agrees with the observation that the occupations for which H-1B workers are sought require more advanced skills than those required for many other jobs, it remains true that a worker's advanced skill is one of the factors weighing against an employment relationship and must be examined in determining whether a worker who may have been displaced was an employee or an independent contractor.
Finally, the Department notes that although this test is most important in the context of displacement, the common law test applies in any situation under the H-1B program where the question of employment relationship may arise (see the discussion in IV.B.1, above, regarding application of the formula for determining whether an employer is H-1B-dependent). The Interim Final Rule states, however, that every H-1B nonimmigrant is by definition an employee of the petitioning employer since only employees are granted entry/status as H-1B nonimmigrants.
Section 212(n)(1)(F)(ii) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(1)(F)(ii), prohibits the displacement of U.S. workers employed by another (“secondary”) employer, if an H-1B-dependent employer or willful violator intends or seeks to place its own H-1B workers with that other employer in a situation where, among other things, there are “indicia of an employment relationship between the nonimmigrant and such other employer.”
In his
In the NPRM, the Department stated its view that this protection would be invoked where the relationship between the business receiving the services of the H-1B individual possesses some, but not all, of the attributes of an employment relationship. Thus, the Department proposed as a test for this relationship a list of factors that it derived from the common law test which the Department had proposed for “primary displacement” (discussed above in IV.D.1). The Department identified nine factors it believed to be most useful in determining whether the H-1B worker and the business at which he or she has been placed by the primary employer possess the requisite “indicia of an employment relationship.” The Department requested comments on its proposed test and any alternative formulations for determining secondary displacement coverage.
Several commenters responded to the proposal on this issue. Two employee organizations (AOTA, APTA) generally endorsed the Department's proposal, but sought assurances that the Department will hold recruitment/staffing firms to the same standard as other employers. One individual (Miano) urged that workers on H-1B visas should be considered employees of a company if they work at that company's facility and take direction from the company's management. Rapidigm asked the Department to explain how it settled on the factors it identified in the proposal.
Senators Abraham and Graham and three representatives of employers (AILA, ITAA, Latour) asserted that the legislative history of the ACWIA notes that “indicia of employment” was meant to operate in a manner similar to IRS provisions and that the focus of the regulations should be on that test. Senators Abraham and Graham continued: “[O]ur intent was simple * * *. Anyone without [a contract directly with the putative employer], whether an independent contractor, or an employee of a third-party employer, would not be ‘employed by the employer.’ ” The Chamber of Commerce reiterated its opposition to application of common law standards, but urged that if the Department does adopt these standards, both the quantity and quality of common law factors sufficient to establish “indicia of an employment relationship” should be substantially the same as those necessary to establish the “employed by the employer requirement.” The Chamber of Commerce also requested that the Department strike from the list of the “indicia” factors that “the client can discharge the worker from providing services to the client” because this factor, it asserts, places an unnecessary burden on typical contracting and subcontracting business arrangements, under which a client retains the right to insist that a worker be removed from the client's jobsite. TCS expressed concern that the Department's proposal may improperly lead to the result that its consultants will be seen as meeting the “indicia” nexus. In this regard, it stated that the Department fails to mention what TCS believes to be the most important criterion—who pays, assigns, and trains the individual at issue, and who possesses ultimate control over him—and does not indicate how various factors are to be weighed. AILA and ACIP expressed concern that a worker supplied by another company will often be subject to the controls identified by the Department as “indicia.” ACIP contended that the Department may be misinterpreting the common law, asserting that a client-firm's typical control of hours, location, access, etc. should not turn an individual into the client's employee—a relationship that should be rare, not commonplace. Both groups also suggested that this test will operate contrary to settled subcontracting practices.
The Department has carefully considered these comments. As explained previously, the Department is not persuaded by the suggestion that it could use anything other than the common law test for an employment relationship as the starting point for interpreting the “indicia of an employment relationship.” The Department proposed a subset of the common law factors, which, in its view, are relevant and useful in determining the relationship between the H-1B worker and the client business, as distinct from those factors of the test that simply focus on whether an individual is self-employed.
The Department sees no merit to the suggestion that Congress intended the use of the “employment relationship” test to determine the ACWIA-specific relationship between an H-1B worker and the secondary employer, which, in the language of the statute, possesses “indicia of an employment relationship.” If Congress had wanted to use the same test for both purposes, it could have done so by using the same
Furthermore, how the employee is treated for IRS purposes is simply not pertinent, and is contrary to the clear intent of the provision. IRS is concerned only with the entity which is paying the worker—in this case necessarily the H-1B employer, not the secondary employer. Thus 26 U.S.C. 3401(d) defines “employer” for purposes of payroll deductions as “the person for whom an individual performs or performed any service, of whatever nature,” except that if that person does not have control of payment of wages, the person having such control is the employer. Regulations which followed the IRS approach would thus have the result of nullifying the secondary placement protections of the ACWIA.
Finally, reading the provision as requiring less than a full employment relationship is congruent with the purpose of the statute to assist U.S. workers in retaining their employment where their jobs may be threatened by the actual or potential placement of H-1B workers. Congressman Smith commented that the legislation is intended to address the problems posed by “job shops.” In his introduction of the compromise ACWIA bill to the House of Representatives, he stated:
“The employers most prone to abusing the H-1B program are called job contractors or job shops * * *. They are in business to contract their H-1Bs out to other companies. The companies to which the H-1Bs are contracted benefit by paying wages to the foreign workers often well below what comparable Americans would receive. Also, they do not have to shoulder the obligations of being the legally recognized employers; the job shops remain the official employers.”
In the NPRM, the Department did not indicate the point at which the relationship between a customer and an H-1B worker would trigger the displacement obligation. In this regard, the Department stated that it had considered, but rejected, an approach that would require the presence of at least some unspecified number of factors as a litmus test. No commenter expressed disagreement with this decision.
Upon review, the Department has decided that, as with the test of employment relationship, the single most important consideration will be whether the customer has the right to control when, where, and how the worker performs the job,
The Department disagrees with the suggestion that the approach it proposed is likely to upset usual contracting relationships. The triggering of the secondary displacement liability of the H-1B employer does not itself mean that there is an employment relationship between the secondary employer and the H-1B worker. The fact that the placing employer ordinarily will control important aspects of the relationship, such as the pay, assignment, and training of the H-1B worker, does not mean that the relationship between the worker and the employer's client will not bear sufficient “indicia of employment” for the secondary displacement provisions of the ACWIA to apply. However, these provisions apply to the primary employer, which becomes liable under the terms of its LCA—not to the secondary employer, which incurs no liability under the ACWIA for the displacement.
The Department is unpersuaded that it should eliminate any of the criteria it proposed as “indicia.” Contrary to the suggestion of some commenters, it is fully consistent with the purposes of the Act that the proposed test may result frequently in a conclusion that the secondary displacement prohibition is applicable.
Section 212(n)(4)(B) of the INA as amended by the ACWIA provides that displacement occurs if the employer “lays off the [U.S.] worker from a job that is essentially the equivalent of the job for which the nonimmigrant or nonimmigrants is or are sought. A job shall not be considered to be essentially equivalent of another job unless it involves essentially the same responsibilities, was held by a United States worker with substantially equivalent qualifications and experience, and is located in the same area of employment as the other job.” The area of employment is defined as “the area within normal commuting distance of the worksite or physical location where the work of the H-1B nonimmigrant is, or will be, performed. If such worksite or location is within a Metropolitan Statistical Area, any place within such area is deemed to be within the area of employment.”
Congressman Smith explained that Congress intended to prevent covered employers from replacing or displacing American workers with H-1B workers. In his words:
“Congress ma[de] clear that the prohibition is directed to circumstances in which a covered employer hires H-1B workers with similar qualifications to those of laid off American workers in similar jobs.
“This language should not be interpreted as prohibiting and preventing only a one-for-one replacement of a particular laid off American worker; such an interpretation would be an overly rigid reading and a mischaracterization of Congressional intent. The focus of the provision is on the placement of H-1B workers in the kinds of jobs previously held by American workers. If an American worker was laid off from a job and the employer then hires an alien (on an H-1B visa) with sufficiently similar skills and experience to perform a sufficiently similar job, a prohibited displacement has taken place. This is a violation of the attestation regardless of whether the replacement was intentional or unintentional, or whether it was done in bad faith or not.”
On the other hand, Senator Abraham remarked:
“The reason for the change from [”specific employment opportunity”] is that it was thought desirable to include within the scope
Senator Abraham contrasted the provision in the ACWIA with the original definition in the House, which did not contain the phrase “from a job that is essentially the equivalent of the job for which the [H-1B worker] is being sought.” Senator Abraham stated that “[t]hat phrase was added to make clear that this provision is not intended to be a generalized prohibition on layoffs by covered employers seeking to bring in covered H-1Bs, but rather a prohibition on a covered employer's replacing a particular laid-off U.S. worker with a particular covered H-1B.”
In the NPRM, the Department explained that the comparison required to determine whether an unlawful displacement has taken place involves: a comparison first of the job held by the H-1B worker with the job held by the U.S. worker to determine if the jobs involve essentially the same responsibilities; a comparison of the U.S. worker with the H-1B worker to determine if they have substantially equivalent qualifications and experience; and a determination of the areas of employment, which must be the same for each worker in question.
The Department proposed that when comparing the job responsibilities component of the provision, the focus should be on the core elements of the job, such as supervisory duties, design and engineering functions, or budget and financial accountability, and on whether both workers are capable of performing those duties. The Department further proposed that peripheral, non-essential duties that could be tailored to the particular abilities of the individual workers would not be determinative. The Department suggested that it might be useful to apply the standards under the Equal Pay Act (“EPA”) (29 U.S.C. 206(d)(1)) for determining the essential equivalence of jobs. See 29 CFR 1620.13
As to the qualifications and experience of the workers, the Department proposed that the comparison be confined to matters which are normal and customary for the job, and which are necessary for its successful performance. In this regard, the Department proposed that although it would be appropriate to compare the relative qualification of the H-1B and U.S. workers by virtue of their education, skills, and experience, it would be inappropriate to compare their relative ages or their ethnic identities, or whether they are exactly alike in their educational background and work experiences. As an illustration, the Department stated its view that unlawful displacement could occur where an H-1B worker is “overqualified” for the job under comparison.
With regard to “area of employment,” the NPRM noted that the definition is much the same as the Department's regulatory definition at § 655.715 (see IV.P.5, below).
The Department received five comments on its proposals on this issue.
The AFL-CIO stated that the Department recognized that employers might seek to hide behind “artificial job titles and position descriptions,” and that the comparison is between the U.S. worker's and the H-1B worker's qualifications for the job in question. The AFL-CIO stated that the Department must continue to rely on objective criteria such as the North American Classifications (NAICS), “rather than the employer's self-serving declarations . . . of ‘intangible’ qualifications, such as being a ‘team player,’ * * *”
Senators Abraham and Graham took issue with the Department's use of the EPA standard for a “job” which, they contended, takes the Department beyond the one-for-one displacement definition provided by the statute for determining whether an H-1B nonimmigrant displaced a U.S. worker in the same job. They stated that the EPA applies a “substantially similar”definition, which, in their opinion, is much broader than the ACWIA's “essentially equivalent” jobs standard. ITAA requested the Department to adopt a narrow reading of the displacement prohibition, suggesting that the Department's proposal improperly attempted to put in place an approach that had been rejected during the legislative process. ACE urged the Department to reconsider its plan to “strip away” the relevant information about job responsibilities; it suggested that the Department, instead, should require that comparisons take into account the context and the actual, specific requirements and skills of a particular job.
AILA took issue with the “core elements” approach as too broad and too difficult for an employer to apply. For example, AILA contended that under the “core responsibilities” analysis, a software engineer for a telecommunications project would appear to have the same core responsibilities as a software engineer for administrative functions, although the positions are very different and require different expertise and knowledge. On the other hand, AILA stated that the essential equivalence analysis of the EPA is more in keeping with legislative intent. AILA proposed a test that would compare the employer's existing job requirements and duties to those of the H-1B employee.
AILA also stated its approval of the Department's proposals on “substantially equivalent” and “area of intended employment.”
The Department continues to believe the distinction between core and peripheral elements of a job is important. The Department believes that its reference to the “core elements” of the job may have been misunderstood. The Department did not mean to imply, for example, that if each job required design and engineering functions, for example, there would be a match of core elements of the job, but rather that the design and engineering functions of a job such as software engineer are core rather than peripheral elements. The Department would agree with AILA that a job as software engineer for telecommunications would not ordinarily be similar to a job as software engineer for administrative matters— assuming the employer does not treat the job of “software engineer” as fungible and move workers from one project to another without regard to its content.
The Department finds no merit to the suggestion, in effect, that the Department's interpretation of the phrase “essentially equivalent” is not based on the language of the ACWIA, but on an approach that was discarded during the legislative process. The Department believes that its interpretation of this term is well-grounded in the specific language of the ACWIA. The Department is not
The Department also continues to believe that the regulations implementing the EPA provide a useful source of standards for assessing the “essential equivalence” of jobs. Neither the EPA nor the ACWIA requires that the jobs under comparison be identical as a condition for invoking their provisions. Although the two statutes have operative language that differ in their specifics, each requires a determination of “equivalence” if an employee is to secure its protection. Thus, the EPA, at 29 U.S.C. 216(d)(2), provides: “[No employee shall receive less pay than an employee of another gender] for equal work on jobs the performance of which requires equal skill, effort and responsibility under similar working conditions.” This compares with the ACWIA, at Section 212(n)(4)(B), which provides: “[A U.S. worker is displaced] from a job if the employer lays off the worker from a job that is essentially the equivalent of the job for which the [H-1B worker or workers] is or are sought,”
As noted in the NPRM, it is important that the comparison of the job filled by an H-1B worker and the job held by a U.S. worker take into account the actual duties of the jobs. See 29 CFR 1620.13(e), 1620.14(a). U.S. workers would receive little protection if the comparison were to be made simply by job titles or position descriptions that easily can be tailored to disguise jobs, which in their actual performance, are essentially alike. The same concerns require that the comparison take into account the most significant components (
As under the EPA, the jobs will be viewed as different if the skill required to perform the job the U.S. worker was holding is substantially different than that required to perform the job of the H-1B worker. This does not end the inquiry, however, because the ACWIA requires in addition the comparison of the experience and qualifications of the workers, considering the experience, training, education, and ability of the workers as measured against the actual performance requirements of the jobs. Thus an inquiry must first be made into whether both workers possess the minimum qualifications for the job. Unlike the EPA, however, the comparison includes not only the experience and qualifications required to perform the job, but also experience and qualifications which are directly relevant in that they would materially affect a worker's relative ability to perform the job better or more efficiently. Furthermore, the statutory standard requires only that the workers' qualifications and experience be “substantially equivalent;” certainly no two workers would have identical experience and qualifications. For example, the Department would consider a bachelor's degree from one accredited university to be substantially equivalent to a bachelor's degree another accredited university. Similarly, the Department would consider 15 years of experience to be substantially equivalent to 10 years of experience. Finally, a worker's qualifications or experience that are not needed or useful in performing the specific requirements of the job are not relevant to the comparison. For example, the Department would not ordinarily consider experience or a degree in an unrelated field to be relevant.
As suggested in the NPRM, the Department's Interim Final Rule utilizes the current definition of “area of intended employment” at § 655.715 to define “same area of performance.”
The ACWIA's non-displacement prohibition applies only to a “layoff” as that term is defined by the ACWIA. Section 212(n)(4)(D)(i) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(4)(D)(i), states that a “layoff” means “to cause the worker's loss of employment, other than through a discharge for inadequate performance, violation of workplace rules, cause, voluntary departure, [or] voluntary retirement.” Furthermore, where loss of employment is caused by “the expiration of a grant or contract (other than a temporary employment contract entered into in order to evade [the displacement provisions of the ACWIA],” it is not a layoff within the meaning of the ACWIA.
Congressman Smith and Senator Abraham both stated that Congress intended that the expiration of a temporary employment contract would be treated as a layoff if an employer enters into such a contract with the intent of evading the displacement prohibition. 144 Cong. Rec. E2324 (Nov. 12, 1998); 144 Cong. Rec. S12750 (Oct. 21, 1998).
The Department explained in the NPRM that it would closely scrutinize any situation where there is some question regarding the voluntariness of the resignation or retirement of a U.S. worker. The Department also proposed that it would look to well-established principles concerning the “constructive discharge” of workers who are pressured to leave employment.
In the NPRM, the Department stated its view that the statutory exception where the U.S. worker's loss of employment is caused by the expiration of a grant or contract was meant to address the common situation where scientists and other academic personnel
By way of illustration, the Department described a situation where no displacement violation occurs—the contract project ends and is not renewed, and the employer does not have a practice of then moving its employees to work under other contracts, or placing its employees on a call back list or its equivalent, but instead terminates the relationship for lack of work. The Department distinguished the preceding situation from one where a staffing firm places employees at other businesses, does not hire employees for a specific client or contract, and ordinarily moves its employees to perform work under other contracts. The Department proposed that in this latter situation, the Department might find a displacement if the employer terminates U.S. workers and hires H-1B workers to perform essentially the same job under a different contract or on a different project. The NPRM also noted the Department's intention to closely scrutinize situations where it appears that a particular contract, including commercial contracts and grants as well as employment contracts, has been used to evade the dependent employer's obligation not to displace U.S. workers.
The Department received several comments on this issue.
AOTA and the AFL-CIO generally supported the Department's approach. The AFL-CIO endorsed the Department's recognition of constructive discharge. The Chamber of Commerce, AILA and ACIP pointed out that the Department's proposal fails to mention that the ACWIA expressly excludes from “layoff” any discharge for inadequate performance, violation of workplace rules, or cause.
The Department acknowledges its oversight in failing to paraphrase the introductory clause to the ACWIA's definition of “lays off” in the NPRM discussion of this point. This clause lists those personnel actions, such as a discharge for poor performance or cause, that should not be mistakenly considered as a “layoff.” The omission of this language from the NPRM was not intended to signal that this part of the definition was insignificant—only that this portion of the statute did not seem to require any regulatory explication. The Interim Final Rule, however, contains a complete statement of the statute's layoff provision, including the statutory exceptions.
AOTA stated that the Department should scrutinize arrangements that may appear to be limited to the duration of a contract or grant; in its view, this would prevent staffing firms from falsely claiming that it had hired a person specifically for the contract in question. The AFL-CIO suggested that employers who claim that a U.S. worker was not laid off due to expiration of contract or grant must document that they have not engaged in a pattern or practice of denying workers assignment to other projects. Two commenters (Kirkpatrick & Lockhart, Latour) noted that the Department correctly recognized that the expiration of a contract leading to the termination of employment is not a “layoff” for ACWIA purposes.
Senators Abraham and Graham and ITAA stated that there should be no distinction between academic and other situations involving the expiration of a contract or grant. They expressed disagreement that it would be a layoff where a staffing firm deviates from its practice of continuing the employment of a worker after the expiration of a contract and fails to continue the employment of a U.S. worker. ITAA also objected to what it viewed to be an apparent presumption by the Department that temporary contracts ordinarily would be used to evade the displacement prohibition. The NACCB asserted that the distinction between employers that usually transfer employees from contract to contract and those that do not have that practice is impractical and unworkable in the information-technology staffing industry. It also provided examples of situations that it believed would be problematic under the Department's proposal. BRI expressed concern that the Department's approach would fail to account for situations where a particular worker was not qualified for positions under other contracts held by the employer.
The Department does not presume that temporary contracts ordinarily will be used to evade the statute's displacement obligations. The Department also does not hold the view that Congress believed that employment contracts tied to the life of a grant or contract were solely a creature of academia. While one of the examples discussed in the NPRM concerned the use of such academic contracts, the NPRM also discussed the applicability of the provision to staffing firms, whose contracts typically are with more commercially-oriented businesses.
As the NPRM suggested, the Department recognizes that the employment of workers on a contract or grant basis could pose some problematic issues. The comments received confirmed the Department's view. While the statute recognizes that a layoff typically will not occur where “a worker's loss of employment * * * [is caused by] the expiration of a grant or contract,” it expressly distinguishes this situation from an unlawful “temporary employment contract entered into in order to evade a [displacement] condition.” Section 212(n)(4)(D)(i)(I). The Department intends to look closely at such contracts to ensure that employers do not attempt to evade the statutory obligations.
Upon further review of this matter and consideration of the comments received, the Department has decided to continue the approach described in the NPRM. The Department, however, believes it appropriate that the totality of the circumstances be considered to determine whether a layoff has occurred. In many situations, the Department expects that it will be obvious whether a layoff has occurred (
In the more difficult cases, a determination of whether the expiration of a grant or contract caused the loss of employment such that a layoff did not occur will require an examination of the practice of the employer (in cases of primary displacement) or the customer (where secondary displacement is at issue) insofar as it bears on the following questions: whether the U.S. worker's job, in fact, was tied to the life of a particular contract or grant; whether the employer has a practice, either as a general matter or with respect to the employee in question, to continue the individual, without interruption in his employment on other contracts or grants; whether the employer has a practice, again either as a general matter or with respect to the employee in question, that the employee will be called back when a contract for which he or she is qualified becomes available; whether the employer departed from its usual practice insofar as the hire or
The Department notes that where an employer has a practice of continuing employees on different projects or grants where work is available, but of laying workers off if there is no work available that fits the worker's skills and later offering the worker work under a new contract when one becomes available, the Department would expect the employer to contact the U.S. worker and offer the position prior to petitioning for an H-1B worker for the position. The Department will closely examine such situations to determine if the U.S. worker has been unlawfully displaced, and if not, if the employer's failure to contact such former employees is a recruiting violation.
Section 212(n)(4)(D)(i)(II) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(4)(D)(i)(II), provides that, even where an H-1B worker is placed in a job formerly held by a U.S. worker, no “displacement” or “layoff” is considered to have occurred if the U.S. worker was first offered but refused “a similar employment opportunity with the same employer.”
As stated by Congressman Smith: “The intent of Congress is that the ‘similar employment opportunity with the same employer at equivalent or higher compensation and benefits’ would be a meaningful offer.” 144 Cong. Rec. E2324 (Nov. 12, 1998). Senator Abraham stated that it “is the intent of Congress that the determination of similarity take into account factors such as level of authority and responsibility to the previous job, level within the overall organization, and other similar factors, but that it not include the location of the job opportunity.” 144 Cong. Rec. S12750 (October 21, 1998).
In the NPRM, the Department described this provision as allowing a dependent employer an affirmative defense to its displacement of a U.S. worker if the employer can establish that it offered a
Four commenters responded to this proposal.
The AFL-CIO asserted that by using the term “employment opportunity” rather than “job” or “position,” Congress intended that working conditions, such as schedules, worksite location, level of authority and discretion, and potential to advance, be factors that determine the similarity of opportunity, and that the term does not simply reflect a comparison of compensation and benefits. One commenter (Latour) urged the Department to be sensitive to the geographic needs of employers in administering this section of the ACWIA, noting that U.S. workers often are less willing to go to some localities than H-1B workers.
Most of the factors listed by the AFL-CIO are included in the Interim Final Rule. The Department notes that, apart from the economic comparison proposed by the Department, as discussed in the next section, no commenter objected to the other illustrative factors proposed by the Department in measuring “similar employment opportunity.” AILA stated that it agreed that the factors listed by the Department in the NPRM are appropriate for determining the similarity of an employment opportunity offer. The AFL-CIO identified as an additional factor, “the level of * * * discretion” of the two positions, which, it asserted, should be taken into account. This factor, the Department believes, is inherent in any comparison between two jobs, and it has specifically included this factor in the Interim Final Rule.
The Department has not included “worksite location” as an additional factor, as had been suggested by the AFL-CIO. The intended meaning of this term is not clear to the Department. To the extent it is intended to require a comparison of the relative costs of living in the areas of the jobs—a consideration discussed in the next section of the Preamble—the Department's proposal already accommodated the suggestion. If the AFL-CIO is suggesting that an employer should not be able to offer a job in a different geographic location, the Department disagrees with this suggestion. Although the ACWIA's language does not foreclose an interpretation that would require an offered position to be within the same geographic area in order to satisfy the test of “similarity,” the Department believes that this would unnecessarily limit an employer's ability to restructure its operations in order to ensure that no U.S. workers are displaced by an H-1B worker. Although the Department has not included worksite location as an explicit consideration in evaluating similarity of the employment opportunity, the Department notes that the offer of a similar employment opportunity must be
Section 212(n)(4)(D)(i)(II) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(4)(D)(i)(II), provides that no prohibited “layoff” of a discharged U.S. worker occurs if the U.S. worker is offered another employment opportunity with the same employer “at equivalent or higher compensation and benefits than the position from which the employee was discharged.”
Congressman Smith stated: “It is Congress” intent that an employer should not be able to evade attestation by making an offer of an alternative employment opportunity without considerations such as relocation expenses and cost of living differentials if the alternative position was in a different geographical location.” 144 Cong. Rec. E2324 (Nov. 12, 1998). Senator Abraham stated that “the determination of similarity * * * [does] not include the location of the job opportunity.” 144 Cong. Rec. S12750 (Oct. 21, 1998).
In the NPRM, the Department proposed that an “opportunity” could not be considered to provide “equivalent or higher compensation and benefits,” if that “opportunity” would provide the worker a lower disposable income, or would require the worker to incur expenses that drive down his financial standing. The Department also noted that Congress, by specifying “equivalent or higher” pay and benefits,
The Department also proposed that, “[a]ssuming the regulations provide that a ‘similar employment opportunity' may include a transfer to another commuting area,” that opportunity must take into consideration matters such as cost of living differentials and relocation expenses (
The Department received five comments on this issue and its proposals.
The AFL-CIO agreed with the Department's proposal, noting that a position resulting in an actual loss of “real wages” for a U.S. worker should not be considered equivalent compensation and benefits. The AFL-CIO also observed that a change of employment that results in higher dependent care costs for an employee has the same consequences of decreasing real wages as cost-of-living and relocation expenses.
AILA, ITAA, the Chamber of Commerce, and Senators Abraham and Graham, on the other hand, contended that the Department's proposal that the cost of living and relocation costs should be considered in determining whether the offered job offers the employee “equivalent or higher compensation and benefits” is without support in the ACWIA, and that “similarity” should not take into account the geographic location of a job opportunity. The Chamber of Commerce noted that COLAs and other expenses will not necessarily increase with an offer of similar employment, such as where the position offered to the U.S. worker is located in an area with lower costs than the position from which he has been or will be laid off.
The Department believes that whether an employment opportunity provides equivalent or higher compensation and benefits requires consideration of the costs associated with the location of the jobs,
The Department disagrees with the argument that Congress, by prescribing a geographical condition in section 212(n)(4)(B) for determining if a job offer would provide “equivalent or higher compensation” of the job offered to a U.S. worker, but not in section 212(n)(4)(D)(i)(II), evinced an intention that the jobs' locations are to be disregarded in making this latter comparison. The Department notes that the two provisions measure different aspects of the employer's displacement obligation. The first provision defines the universe of jobs which should be compared to determine if a displacement has taken place as those within the same geographical area. The second provision compares the equivalency of jobs which the U.S. worker occupies and is offered. The Department certainly does not believe that where the statutory language in one provision explicitly restricts the comparison to the same locality and in another provision it is silent, it follows that the cost of relocation and the cost of living cannot be taken into consideration in determining the equivalency of compensation between two positions in different localities. In fact, the Department believes that a more appropriate inference would be that Congress intended no such limitation.
The Department, in determining whether a
AILA urged the Department not to adopt the EPA and the FMLA standards for equivalency. AILA objected to the use of the FMLA standard on the basis that it requires “virtual identity,” rather than the ACWIA's test of “substantial equivalence.” With regard to the possible use of the EPA regulations, AILA stated that its use would be inappropriate because “substantial equivalence” would be defeated whenever a job offered was located in another geographic area. AILA, instead, requested that “equivalent or higher” be determined on a case-by-case basis, in light of all circumstances of the job offer.
The Department notes that AILA has misstated the relevant ACWIA standard, which is “equivalent or higher compensation and benefits,” not “substantial equivalence.” The Department continues to believe that both EPA and FMLA regulations provide a proper basis for making the comparison of compensation and benefits, although the FMLA regulations are somewhat less useful since they provide less detailed guidance in making an economic comparison of jobs. Accordingly, the Interim Final Rule is based on the following principles drawn from the EPA regulations, 29 CFR 1620.10: Wages include:
“all payments made to [or on behalf of] an employee as remuneration for employment [
While the Department's interpretation allows for an inclusive definition of compensation and benefits, the Department expects that since the comparison will involve jobs with the same business, the benefit components of the employee's compensation often will be the same, leaving the cost of living differential as the sole or primary variable in most situations. As discussed above, the regulations specifically allow the job opportunity to be in a different locality, provided there is an adjustment for cost of living, and relocation costs are paid.
Section 212(n)(1)(F) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(1)(F), requires that H-1B-dependent employers and willful violators not place any H-1B worker at another employer's worksite “unless the [H-1B] employer has inquired of the other employer as to whether, and has no knowledge that * * * the other employer has displaced or intends to displace a United States worker employed by the other employer” within the period beginning 90 days before and continuing until 90 days after the H-1B worker's placement at that worksite. This requirement applies where there are “indicia of an employment relationship” between the H-1B worker and the customer-client of the dependent employer. section 212(n)(1)(G)(ii) further provides: “The [LCA] application form shall include a clear statement explaining the liability under subparagraph (F) of a placing employer if the other employer * * * displaces a United States worker. * * *” Additionally, section 212(n)(2)(E) provides that where an H-1B-dependent employer places a non-exempt H-1B worker with another employer in accordance with section 212(n)(1)(F) (
In explaining these provisions and their interrelationships Congressman Smith stated: “* * * [T]he legislation prohibits a covered employer in certain circumstances from placing an H-1B nonimmigrant with another employer where the ‘other’ employer has or will displace an American worker. * * * Congress intends that the employer make a reasonable inquiry and give due regard to available information. Simply making a pro forma inquiry would not insulate a covered employer from liability should the ‘other’ employer displace an American worker from a job sufficiently similar to the one which would be performed by an H-1B worker. That is one of the reasons why subsection 412(a)(2) of the legislation requires that the employer be notified through a clear statement on the labor condition application (LCA) regarding the scope of a covered employer's liability with respect to a lay off by a secondary employer. Through the LCA form, the Department of Labor will make clear to covered employers their obligation to exercise due diligence in ascertaining whether the placement of H-1B nonimmigrants may correspond with the lay off or displacement of American workers in similar jobs. Some of the most egregious cases involving the abuse of the H-1B visa program have involved American workers being retained only long enough to train their H-1B replacements under contract with a different employer. * * *”
Similar statements were made by Senator Abraham:
In particular, the covered employer must promise to inquire whether the other employer will be using the H-1B worker to displace a U.S. worker whom the other employer had laid off or intends to lay off within 90 days of the placement of the H-1B worker. The covered employer must also state that it has no knowledge that the other employer has done so or intends to do so.
Congressman Smith and Senator Abraham agreed that an employer who makes the required inquiries remains liable if the other employer displaces U.S. workers notwithstanding the inquiry made. Thus Congressman Smith stated:
“If the other employer has displaced an American worker (under the definitions used in this legislation) during the 90 days before or after the placement, the attesting employer is liable as if it had violated the attestation.
“In all instances, the sanction may be an administrative remedy (including civil monetary penalties and ‘make-whole’ remedies to the American worker affected). The attesting employer can only receive a debarment, however, if it is found to have known or to have had reason to know of the secondary displacement at the time of the placement of the H-1B worker with the other employer, or if the attesting employer was previously sanctioned for a secondary displacement under 212(n)(2)(E) for placing an H-1B nonimmigrant with the same other employer. If an employer has conducted the required inquiry prior to any placement with a “secondary” employer, and has no information or reason to know of that employer's past or intended displacement of U.S. workers, then the attesting employer should ordinarily be presumed not to have willfully violated the secondary displacement attestation. Congress anticipates that the Department of Labor, in promulgating and enforcing regulations, would require a reasonable level of inquiry.”
Similarly, Senator Abraham stated:
“Making the required inquiries will not insulate a covered employer from liability should the secondary employer with which the covered employer is placing the covered H-1B worker turn out to have displaced a U.S. worker from the job that it has contracted with the covered employer to have the H-1B worker fill. That is why subsection 412(a)(2) of this legislation adds a new requirement to section 212(n)(1) that the application contain a clear statement regarding the scope of a covered employer's liability with respect to a layoff by a secondary employer with whom the covered employer places a covered H-1B worker. * * * If the other employer has displaced a U.S. worker (under the definitions used in this legislation) during the 90 days before or after the placement, the attesting employer is liable as if it had violated the attestation. The sanction is a $1,000 civil penalty per violation and a possible debarment. The attesting employer can only receive a debarment, however, if it is found to have known or to have had reason to know of the displacement at the time of the placement with the other employer, or if the attesting employer was previously sanctioned under 212(n)(2)(E) for placing an H-1B nonimmigrant with the same employer. If an employer has conducted the inquiry that it is required to attest that it has conducted before any such placement, and (as that attestation requires) acquired no knowledge of displacement of a U.S. worker in the course of that inquiry, it should ordinarily be presumed not to have known or have reason to know of a displacement unless there is an affirmative showing that it did have such knowledge or reason to know.”
In order to achieve the purposes of this provision, the Department proposed to develop a regulatory provision which requires that the H-1B employer make a reasonable effort to inquire about potential secondary displacement. The NPRM set out a non-exclusive list of methods that could be used by an employer to demonstrate its efforts to assure compliance with its inquiry obligation. The methods suggested included obtaining a written assurance from the secondary employer that it does not intend to displace a similarly-employed U.S. worker during the 90-day period before or after the placement of the H-1B worker; a written memorialization of such a verbal assurance; or the inclusion of a non-displacement clause in a contract with the secondary employer. The NPRM noted that the Department had read the language and structure of the statutory provisions to reflect an intention that a dependent employer must take pro-active steps to determine whether the placement of H-1B workers would correspond with the layoff of similarly-employed U.S. workers. The NPRM proposed that an employer, even with the receipt of a “no displacement” assurance, should not be able to ignore other information, coming to its attention before placement of the H-1B worker, that calls into question the original assurance. The Department
Several commenters responded to the Department's proposals on this issue.
One commenter (TCS) generally agreed with the Department's approach, urging the Department to clarify that usually all that will be required of a dependent employer is to make the layoff inquiry with its customer and to memorialize the customer's response. ITAA stated that it found helpful the Department's identification of a variety of methods by which an employer may satisfy its inquiry obligation.
The AFL-CIO asserted that a refusal by a secondary employer to respond to the staffing firm's inquiry should result in the disqualification of that LCA. ACE and IEEE stated their belief that the Department's proposal puts an unfair burden on the placing employer and that, at the very least, the secondary employer should share liability for violation of the displacement provision. The IEEE expressed particular concerns regarding the effect of the Department's approach on smaller businesses. Two other commenters (BRI and Cooley Godward) asserted that the NPRM neglected to address the treatment of primary employers who, despite reasonable efforts, receive no or an inadequate response from the secondary employer. BRI requested that the final regulation address a “reasonable minimal effort” threshold.
AILA, Rapidigm, and Satyam contended that getting written assurances from secondary employers will jeopardize negotiations and placement of H-1B workers. Rubin & Dornbaum and White Consolidated Industries, on the other hand, stated that although only H-1B-dependent employers and willful violators need obtain assurances, the effect of that requirement is to impose a paperwork requirement on the secondary employer.
AILA asserted that the proposal, in effect, required a dependent employer to conduct an “interrogation” of its customer regarding its layoff plans in order to satisfy its non-displacement obligation, and stated that the proposal lacked “an articulable point at which the H-1B employer is deemed to have made sufficient, reasonable efforts.” AILA requested that the Department allow flexibility to ascertain whether there is a realistic possibility of displacement, such as where the H-1B worker is only providing services for a special project or on a short-term basis.
The Department has given careful consideration to the divergent comments received on this proposal. The expressed concern regarding the impact which the inquiry will have upon the dependent employer's ability to place H-1B workers, in the Department's view, is misplaced. The obligation has been imposed by Congress as a condition for the employment of H-1B workers by H-1B-dependent employers and willful violators. While a dependent employer has discretion as to how it will meet this obligation, it must make the inquiry in every case where there will be indicia of an employment relationship (see IV.D.2, above).
The Department is not persuaded that its proposal imposes any undue burden on dependent employers or their customers. The Department believes that the statute contemplates due diligence in the inquiry, taking into consideration the circumstances of the case, rather than just a
Furthermore, the Department has no reason to believe that the customer would have difficulty in answering the inquiry, especially where no layoffs are contemplated. If a customer balks at providing the lay-off information—an unlikely circumstance given the customer's demonstrated operational needs—the ACWIA does not allow the dependent employer to place an H-1B worker with that customer.
The Department disagrees with ACIP's contention that the Department's proposal effectively dictates contract terms through regulation and as such imposes an unauthorized and unwarranted burden. So long as the dependent employer meets its inquiry obligation and it does not have reason to believe there may be displacement, it is free to structure its contractual arrangements with its customers as it chooses.
The AFL-CIO commented that the Department had set “an incredibly low bar” for employers to meet this obligation, urging that the inquiry requirements should be supplemented by imputing knowledge of public facts about the actions and intentions of secondary employers to the H-1B-dependent employer. On the other hand, ITAA expressed concern that an employer would be held accountable for any public information relative to a layoff that might call into question a customer's assurance that it had no layoff plans—even where the information is buried in a local newspaper outside the area where the placing employer is based.
The Department disagrees with the suggestion that it should impute to the employer any public knowledge that layoffs by the customer had or would occur. With regard to this matter, the statute sets up a reasonableness standard. Although the H-1B employer is liable for civil money penalties and other appropriate remedies in every case where a displacement violation occurs, the ACWIA limits the imposition of the debarment sanction to circumstances where the H-1B employer “knew or had reason to know of such displacement at the time of placement of the nonimmigrant with the other employer.” Section 212(n)(2)(E)(i). Such a determination obviously will depend upon the particular circumstances presented, including the nature of the inquiry conducted by the employer. The Department established no presumptions about the employer's knowledge of public information, including newspaper articles. On the other hand, the employer cannot put its head in the sand and feign ignorance or disregard information that comes to its attention through the press or otherwise. As the proposal stated, “[Where a] placing H-1B employer [receives information] such as newspaper reports of relevant layoffs by the secondary employer * * * the [placing] employer would be expected to recontact the secondary employer and receive credible assurances that no layoffs are planned or have occurred in the applicable time frame.”
ACIP asserted that the secondary employer might be unwilling to assist the placing employer if the latter were
ITAA requested a “safe harbor” provision for employers who make a demonstrated (
The Department's discretion in this area is limited. The ACWIA imposes strict liability upon a dependent employer where a U.S. worker is displaced by a secondary employer. Section 212(n)(2)(E) specifically provides: “If an H-1B-dependent employer places a non-exempt H-1B worker with another employer * * *, such displacement shall be considered * * * a failure by the placing employer, to meet a condition [of its LCA].” At the same time, the ACWIA's three-tier penalty provisions require consideration of a violator's culpability which should minimize the liability of a dependent employer who has acted in good faith to comply with its displacement obligation. Additionally, the Department notes that the regulatory provisions applicable to the assessment of civil money penalties consider an employer's “good faith” as a factor affecting the level of the penalty assessed. See 20 CFR 655.810(b).
In order to assure compliance with the ACWIA's non-displacement provisions, the Department proposed to require that an H-1B-dependent employer or willful violator retain certain documentation with respect to any U.S. workers (in the same locality and same occupation as any H-1B nonimmigrants it hired) who left its employ in the period 90 days before or after the employer's petition for the H-1B worker(s), and for any employees with respect to whom the employer took any action in the 180-day period to cause the employee's termination. The NPRM proposed that for all such employees, these documents must include: The employee's name, last-known mailing address, occupational title and job description; any documentation concerning the employee's experience, qualifications, and principal assignments; notification by the employer regarding termination and the employee's response; job evaluations; and information regarding offers of similar employment and the employee's response. The Department noted its belief that these records are required to be retained by EEOC regulations, 29 CFR 1602.14, therefore their retention would not present an additional burden on employers.
The Department received four comments on this proposal.
ITAA stated that it does not object to any documentation retention already mandated. It stressed the distinction between maintaining records already created and creating records. Senators Abraham and Graham asserted that the ACWIA imposes no requirement of maintaining records of job offers made to departing employees as proposed by the Department. Two commenters (AILA, Chamber of Commerce) stated their belief that the proposal imposes new record creation and retention burdens, disagreeing with the Department's assessment that the EEOC already requires the retention of such documents. The Chamber of Commerce stated that this burden will unduly impact upon small businesses that normally do not maintain such records.
The Department notes that pursuant to § 655.731(b), employers are already required to maintain basic payroll information for all employees in the specific employment at the place of employment, including name, home address, and occupation. This information is also required by other statutes such as the Fair Labor Standards Act and the Equal Pay Act. See 29 CFR 516.2; 29 CFR 1620.32. The Department does not believe that any prudent business person would fail to have such information.
The commenters correctly recognized that the EEOC regulation cited in the NPRM, 29 CFR 1602.14, does not establish a general requirement that employers create the records encompassed by the Department's displacement proposal. Section 1602.14 instead, requires the preservation of records, for purposes of Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA), where the employer chooses to make or keep personnel records, including situations where an employee is involuntarily terminated, or a discrimination charge is filed against the employer. As noted, § 1602.14 does not require an employer to create any records, but rather requires an employer to preserve all personnel or employment records which the employer “made or kept.” The Department believes that every prudent employer would “make or keep” the described records relating to the circumstances in which employees leave their employ. Once made or kept (
Furthermore, the EEOC does require the preservation of the same or similar records under other statutes it administers, whether or not they would otherwise be kept. Under the Age Discrimination in Employment Act (ADEA), for example, there is an obligation to retain certain records and an obligation to retain broad categories of personnel documents which an employer “in the regular course of his business, makes, obtains, or uses.” 29 CFR 1627.3. In particular, employers are required to retain any and all documents it makes, obtains, or uses regarding “[p]romotion, demotion, transfer, selection for training, layoff, recall, or discharge of any employee, * * *.”
Against this regulatory backdrop, it is clear that employers already are required by the EEOC, pursuant to Title VII and the ADEA, to retain (
The Interim Final Rule provides that, for the purposes of meeting the
In addition, if the employer offers the U.S. worker another employment opportunity, the employer shall maintain a record of the offer, including the position offered and terms of compensation and benefits, and the employee's response thereto. The Department believes that most employers would make such offers in writing, but recognizes that there may be a small burden to the employer in keeping a record if the employee response is not in writing. The Interim Final Rule continues the practice under the current regulations of applying a uniform period for retaining documentation required by this part. See § 655.760(c).
The Department wishes to clarify, as it has with regard to other documentation proposals in this part, that an employer is not required to retain these records in any particular form so long as they are maintained and retrievable upon this Department's request in accordance with the requirements of 29 CFR 516.1(a) (setting forth recordkeeping requirements under the FLSA, including the EPA). The Department also wants to make clear that such records need not be kept in the employer's LCA public access file.
As discussed in IV.D.7, the Interim Final Rule also requires employers to document their inquiry to secondary employers and any response. This inquiry may be done in any manner the employer deems appropriate under the circumstances. However, if the inquiry and response were not in writing, the employer will be required to keep a written memorandum detailing the substance of the conversation, the date of the communication, and the names of the individuals involved in the conversation.
Section 212(n)(1)(G)(i)(I) of the INA as amended by the ACWIA, 8 U.S.C. 1182(n)(G)(i)(I), requires that an H-1B-dependent employer or an employer found by DOL to have committed willful H-1B violations take “good faith steps to recruit, in the United States using procedures that meet industry-wide standards and offering compensation that is at least as great as that required to be offered to H-1B nonimmigrants * * *, United States workers for the job for which the nonimmigrant or nonimmigrants is or are sought.” The Department is charged with enforcing the recruitment obligation, while the Attorney General administers a special arbitration process to address complaints regarding an H-1B employer's companion obligation to “offer the job to any United States worker who applies and is equally or better qualified for the job for which the nonimmigrant or nonimmigrants is or are sought.” The ACWIA further provides that “nothing in subparagraph (G) [the new attestation element] shall be construed to prohibit an employer from using legitimate selection criteria relevant to the job that are normal or customary to the type of job involved so long as such criteria are not applied in a discriminatory manner.”
The recruitment requirement does not apply where the LCA solely involves “exempt” H-1B workers (see Section 212(n)((1)(E)(ii)). In addition, the recruitment requirement does not apply to an application filed on behalf of an H-1B worker described in Section 203(b)(1)(A),(B), or (C) of the INA. Section 203(b)(1) establishes the first preference among employment-based immigrants to the United States. This group includes aliens with extraordinary ability, aliens who are outstanding professors and researchers, and aliens who have been employed by multinational corporations as executives or managers who will enter the U.S. to continue to provide executive or managerial services to the same employer or to its subsidiary or affiliate.
The Department noted in the NPRM that the literal language of the recruitment provision would require recruitment efforts be undertaken before an LCA is filed (“prior to filing the application—[the employer] has taken good faith steps to recruit”). The Department noted that this language appears to have been based on a presumption that employers file LCAs for individual workers at the time that need arises (see,
In light of this common practice (which had not been at issue in crafting the ACWIA), the Department set forth its view that it would not be reasonable to assume that Congress intended to require a separate LCA for each worker; nor was it reasonable to assume that Congress intended that the employer would already have recruited in good faith for every position it would fill over the three-year life of the LCA, and offered a job to every equally or better qualified U.S. worker who applied for each such position. The Department observed that this would be virtually impossible since employers would not yet have identified every job opportunity which would arise in the future.
Thus, the Department proposed that “the ‘good faith’ recruitment attestation must be read, interpreted, and applied to mean that the employer promises—and agrees to be held accountable—that it has, or will recruit with respect to any job opportunity for which the application is used, whether that recruitment occurs before or after the application is filed (if the application is to be used in support of multiple petitions for future workers).” The Department invited comments on this approach and any alternative approaches to appropriately balance employers' good faith recruitment obligations in the context of the statutory language.
The Department received no comments on this proposal from the employer community. The AFL-CIO, on the other hand, objected to this proposal, stating, in effect, that Congress intended that the good faith recruitment requirement be satisfied as a precondition to filing an LCA, not
The Department disagrees with this view, noting that the AFL-CIO's interpretation would upset a long-settled practice that has promoted the efficient processing of LCAs, a goal which the ACWIA was not intended to impede. Furthermore, the House Report on H.R. 3736, whose language on recruitment is very similar to that in ACWIA as enacted, and is identical with respect to the timing of the recruitment, states that the bill “endeavors to protect American workers by ensuring that companies at least make an attempt to locate qualified American workers before petitioning for foreign workers under the H-1B program.” H.R. Rep. No.105-657, 105th Cong., 2d Sess. 47 (1998) (emphasis added). In the absence of any suggestion that Congress intended this result, the Department is unpersuaded that Congress intended the recruitment provision to be applied literally. Without drastically reducing the effective period of the LCA or limiting the LCA to a single job opportunity, the Department believes that it would be virtually impossible for major users of the program—namely the H-1B-dependent employers to whom the provision applies—to comply with the AFL-CIO's construction of the Act.
The Department received one comment that addressed the “first preference” exception to the recruitment obligation. The commenter (Cooley Godward) expressed the concern that an employer's utilization of this provision may prove problematic because determinations of “first preference” status require discretionary judgments, typically exercised by the INS, which if applied incorrectly by an employer, could subject the employer to sanctions for violating its recruitment obligation. Cooley Godward recommended that the Department promulgate a regulation that would protect employers who have made a reasonable good faith determination that an employee would qualify for first preference immigration status.
The Department agrees that such determinations might be problematic in some rare cases. The Department believes that it is likely that H-1B nonimmigrants who would meet the first-preference criteria would also be “exempt H-1B nonimmigrants” for purposes of LCA designations and obligations. The Department will consult with the INS if the issue of “first preference” status arises, and will take into account the employer's good faith efforts in any assessment of appropriate remedies.
The INA, at section 212(n)(1)(G)(i)(I), requires a dependent employer to attest that it “has taken good-faith steps to recruit in the United States using procedures that meet industry-wide standards * * * United States workers for the job for which the nonimmigrant or nonimmigrants is or are sought.”
In discussing the meaning of this provision, Congressman Smith stated:
“Congress intends for an employer to at least use industry-wide recruiting practices (unless the employer's own recruitment practices are more successful in attracting American workers), and, in particular, to use those recruitment strategies by which employers in an industry have successfully recruited American workers. The Department of Labor, in defining and determining whether certain recruitment practices meet the statutory requirements, should consider the views of major industry associations, employee organizations, and other interest groups.”
Consistent with these statements, the Department stated in the NPRM that “[t]he statute does not require employers to comply with any specific recruitment regimen or practice, [and the Department does not] believe it is authorized to prescribe any explicit regimen.” The Department also proposed that the benchmark “industry-wide standards” requires the employer's recruitment efforts be “at a level and through methods and media which are normal, common or prevailing in an industry * * * including at least the medium most prevalently used in the industry and shown to have been successfully used by employers in an industry * * * to recruit U.S. workers.” The Department explained that “industry-wide standards” does not refer to the lowest common denominator among employers in a particular industry,
The NPRM identified a number of recruitment methods recognized as appropriate for recruiting U.S. workers (
The NPRM requested comment on a proposed presumption of good faith recruitment where the employer in good faith used a mix of prescribed recruiting methods (at least three, one or two of which are active). This presumption would be available to employers who did not want to go to the trouble of demonstrating that their recruitment methods meet the standards for their industry.
Under the proposal, an employer would not have to avail itself of the presumption, but good faith recruitment, at a minimum, would need to involve “advertising in relevant and appropriate print media or the Internet (where common in the industry), in publications and at facilities commonly used by the industry * * *, as well as solicitation of U.S. workers within an employer's organization.” The Department also expressed the view that there should be a general recognition that good faith recruitment must “involve some active methods of solicitation, rather than just passive methods such as posting job announcements at the employer's worksite(s) or on its Internet web page.”
Finally, the Department proposed that employers utilize recruitment methods
Thirty-two commenters, including 21 individuals, responded to the Department's proposals relating to “industry-wide standards.”
The individuals were consistent in urging the Department to strengthen recruitment requirements. They generally urged that, at a minimum, posting job openings in major publications, trade journals, state employment service offices, and local colleges be a prerequisite to the issuance of H-1B visas for particular workers. Many of these individuals also urged a requirement that a company expend a minimum amount, such as $1,000, on advertising a position as a precondition to petitioning for an H-1B nonimmigrant.
APTA, AOTA and IEEE supported the Department's proposals. AOTA stated its belief that it is especially important to require employers to undertake several methods of active recruitment, and that those methods comport with those undertaken by the specific industry. IEEE agreed specifically with the requirement that employers be held accountable for recruiting for each job they fill under an LCA and with the Department's listed methods of recruitment and standards for good faith steps.
The AFL-CIO opposed the idea of a presumption, noting that it is wrong to assume that some arbitrary combination of recruitment methods will equate with the “industry-wide standards.” In this regard, the AFL-CIO suggested that for some industries, including the information technology industry, no form of passive recruiting should be considered to meet the industry-wide standard.
The AFL-CIO endorsed the Department's proposal that employers must conform their recruitment practices to those used within the industry for which the workers are sought. It stated that staffing firms must conform to the methods used by the industry in which they are seeking to place workers, not the methods used by employers within the staffing industry.
Senators Abraham and Graham, ACIP, AILA, and TCS contended that the Department's proposed presumption represented an attempt to prescribe a specific regimen, contrary to the statute's intent to allow employers to use recruiting practices similar to other employers in the industry. The common thread through employer, trade association, and attorney comments was that there is no single template for recruitment to fit all situations, and that recruitment procedures vary by industry, size, geographic location, and market conditions. One commenter (Simmons) asserted that the Department's recruitment proposal will set up an infrastructure that some small employers and foreign-based employers will be unable to meet.
A number of commenters responded to the Department's proposal that an employer use a combination of approaches, some of which must be proactive. The IEEE agreed with the Department's approach, stating that this approach would ensure a “fair and level playing field” for all applicants by requiring that employers utilize methods that do not skew the process against U.S. workers or otherwise put them at a disadvantage in competing against H-1B workers for positions covered by an LCA. One commenter (Hammond), though expressing the view that the statutory requirement that an employer utilize an industry-wide standard did not need any detailed regulations, indicated its approval of the Department's recognition that an employer cannot use the least common denominator within its industry, but must instead use methods that are normal, common, or prevailing in the industry. Intel (although stating that it is not a dependent employer itself) commended the Department for listing many of the recruitment methods used in the information technology industry today, but suggested changing the terms from “active” and “passive” to “on-going” recruitment and “targeted” recruitment to better describe recruitment practices. Similarly, ACIP commented that employers commonly undertake both “on-going” and “targeted” recruitment.
The Department continues to be of the view that some guidance is appropriate to assist employers in determining industry-wide standards. The Department sees no merit in the suggestion that an employer should be able to use any legitimate process utilized by employers in the industry. The statute requires that an industry-wide standard be utilized. There likely will be considerable variance among the methods used by different employers within the same industry. An employer who selects a method that falls short of the standard will not satisfy the statutory requirement. Such an interpretation of the statute (allowing use of any single practice used within its industry, even if it is the least common denominator, to pass muster) would allow an employer's recruiting practice to be self-validating, thereby frustrating statutory intent as well as its plain meaning.
The Department therefore has decided to go forward with its proposal to list the most common recruiting methods, and stating its expectation that good faith recruitment ordinarily will involve several of these methods, both passive and active. In this connection, the Department finds helpful the distinction between ongoing recruitment efforts to find candidates for “generic” positions always in short supply as contrasted with its targeted recruitment for a particular opening. However, the Department believes the active/passive distinction is a different standard and is more useful in guiding an employer's compliance with its recruitment obligations. The Department continues to believe that “industry-wide standards” cannot reflect the lowest common denominator. Rather, they must include methods that are normal, common or prevailing in the industry—defined as those employers competing for the same potential workers—including the methods which have been most effective at recruiting U.S. workers.
In view of the comments regarding the Department's proposed presumption, however, the Interim Final Rule does not include any presumptive level of recruitment that constitutes good faith recruitment. Employers will be expected to demonstrate in the event of an investigation, that their recruitment was consistent with industry-wide standards.
The rule requires that employers at a minimum recruit both internally—among their own work force and workers whose employment recently terminated because of expiration of a contract or grant—and externally—among U.S. workers elsewhere in the economy. The Department believes that such practices are the norm in all industries. Furthermore, given employers' testimony at Congressional hearings regarding widespread shortages of workers, the Department is confident that active recruitment is also the norm, and the rule will require some active recruitment (either internally, such as by training other employees, or externally). Employers are cautioned that disproportionate recruitment
Several comments were received regarding the particular methods of solicitation utilized by employers. Intel, among other commenters, noted a dramatic shift away from the use of traditional methods such as print advertisements to other methods such as electronic media and specialized contacts. The IEEE, while agreeing with the Department's approach, encouraged the Department to consider imposing a requirement that employers make greater utilization of Intranet and Internet publication of job openings. Others (AFL-CIO, Malyanker) expressed the view that the utility of the Internet is overstated. Another commenter (Satyam) noted that the use of the Internet for recruitment is common, but stated that its review of the NPRM left it with the impression that it is disfavored by DOL.
The Department did not intend to leave the impression that it does not favor the Internet. As the NPRM recognizes, recruitment within the industries for which H-1B workers are sought—especially the information technology industry—often involves the use of electronic media. The Department encourages the use of this method in industries where it has proven effective and where it has the potential to attract the widest relevant audience. The Department notes that this method has shown itself to be inexpensive and expeditious (and in the case of services such as America's Job Bank, this method is free and accessible by any personal computer with an Internet connection). At the same time, as some commenters have noted, the effectiveness of electronic advertising is sometimes overrated and, in any event, it is not a substitute for active methods of recruitment, which can be better targeted to U.S. workers who are qualified for a particular position.
AILA and Rapidigm contend that the Department's proposal is more stringent than the reduction-in-recruitment (RIR) guidelines established under GAL 1-97 (Oct. 1, 1996) (recently published for comment at 64 FR 23984 (May 4, 1999)) for the permanent program for occupations in which there is little or no availability.
The Department notes that the ACWIA establishes a specific recruitment requirement that employers recruit in accordance with industry-wide standards. Furthermore, unlike the H-1B program, the recruitment efforts and accompanying documentation of industry practice for each RIR application under the permanent program are reviewed by the State agency and ETA Regional Office, which base their determinations on local labor market conditions. Because under the H-1B program recruitment efforts by H-1B-dependent employers and willful violators will be reviewed only in the event of an investigation, the Department believes that an explication of the industry-wide requirement is appropriate in these rules.
It should be noted, however, that the Department has not suggested that an employer is required to undertake separate recruitment efforts for every position listed on the LCA. In a particular situation, an employer may reasonably decide to solicit for all similar positions listed on an LCA(s) at the same time, particularly where the employer plans to hire for the positions at or about the same time. Similarly, as commenters pointed out, employers which regularly experience large numbers of vacancies may undertake ongoing recruitment. The Department will not second-guess an employer's good faith, reasonable decision in such circumstances, provided it accords with the relevant “industry-wide standards” applicable to the employer.
Finally, with regard to the comments by numerous individuals, the Department believes there is no statutory support for measuring an employer's recruitment efforts by the amount of money expended by the employer. Accordingly, the Department is not persuaded that there is merit to the suggestion that an employer must make a threshold showing that it has incurred solicitation expenses at or above some prescribed amount.
In the NPRM, the Department expressed the view that good faith recruitment requires employers to “maintain a fair and level playing field for all applicants,” and to “be able to show that they have not skewed their recruitment process against U.S. workers.” The Department stated its belief that the “good faith” recruitment obligation encompasses the pre-selection treatment of the applicants, not merely the steps taken by an employer to communicate job openings and solicit applicants. The Department indicated that, where an employer's recruitment efforts have been demonstrably unsuccessful, it would examine closely the entire recruitment process. This examination would include the pre-selection treatment of applicants, “to insure that U.S. workers are given a fair chance for consideration for a job, rather than being ignored or rejected through some tailored screening process based on an employer's preferences or prejudices with respect to the makeup of its workforce.” The NPRM proposed that an employer would not meet its good faith recruitment obligation if, for example, it only interviewed H-1B applicants or used different staff to screen or interview the H-1B applicants than the staff used for U.S. workers. The NPRM also stated that the Department would not second-guess work-related screening criteria or the hiring decision regarding any particular applicant (the latter assigned by the ACWIA to the Attorney General). The Department did not propose any specific regimen or practice for the pre-selection treatment of applications and applicants. However, the Department considered whether to craft a presumption of good faith recruitment based on an employer's hiring of a significant number of U.S. workers and, thereby, accomplishing a significant reduction in the ratio of H-1B workers to U.S. workers in the employer's workforce. The Department indicated that it would refer any potential violation of U.S. employment laws to the appropriate enforcement agency.
As stated by Representative Smith:
“Any ‘good faith’ recruitment effort, as required by this legislation, must include fair, adequate and equal consideration of all American applicants. The Act requires that the job must be offered to any American applicant equally or better qualified than a nonimmigrant. Congress recognizes that ‘good faith’ recruitment does not end upon receipt of applications, but rather must include the treatment of the applicants. In evaluating this treatment, the Department should consider the process and criteria for screening applicants, as well as the steps taken to recruit for the position and obtain those applicants. . . . Employers who consistently fail to find American workers to fill positions should receive the Department's special attention in this context of ‘good faith’ recruitment.”
“[The Act] also contains a savings clause that states that the provision should not be construed to affect the authority of the Secretary or the Attorney General with respect to ‘any other violations.’ This savings clause means that while the Secretary is not authorized to remedy a violation of (1)(G)(i)(II) regarding an individual American
Senator Abraham cautioned:
“[The Act] does not contemplate, for example, recharacterizing a ‘failure to select’ complaint as a ‘failure to recruit in good faith’ and then using the enforcement regime for the latter category of violations to pursue what in fact is a ‘failure to select’ complaint.”
The Department received generally supportive comments from AOTA, APTA, IEEE, and the AFL-CIO. The AFL-CIO stated that the proposal represents “a very important step in protecting the rights of U.S. job applicants by clearly stating that ‘good faith steps’ in recruiting also include fair pre-selection treatment of job applicants.” It also stated that the Department's approach does not intrude upon the Department of Justice's duty to arbitrate wrongful selection cases because the proposal deals only with pre-selection treatment that necessarily precedes a selection decision. IEEE stated its agreement with the Department that employers are required to maintain a fair and level playing field for all job applicants, and that employers must be able to show that their recruitment and selection processes have not been skewed so as to disadvantage U.S. workers.
Several commenters opposed parts of the proposal. AILA and ACIP stated their view that the proposal violated the ACWIA's clear mandate that the Department not interfere with the enforcement of the “selection” aspects of an employer's recruitment practice. AILA observed that the statute specifically sets up a separate remedial mechanism for alleged violations of the “selection” portion of the recruitment attestation, while including a savings clause that states that this provision does not restrict either the Department's or the Attorney General's enforcement authorities with respect to other violations.
Several commenters opposed the proposed presumption based on an employer's success in hiring U.S. workers. The AFL-CIO stated that employer hiring of an arbitrary number of U.S. workers in no way establishes that an employer did not discriminate against others. Senators Abraham and Graham recognized that scrutiny of an employer's recruitment process may be proper in an investigation, but opposed the proposed presumption. Senators Abraham and Graham and AILA urged the Department to remember that the premise of the legislation was that at least in some cases recruitment had been demonstrably unsuccessful. ACIP, TCS, BRI and SBSC objected to the proposal that successful recruitment would be equated with good faith recruitment. Some commenters noted that the positions sought by LCAs often may be filled only from a small labor pool and that the filing of the LCA reflects the relative scarcity of U.S. workers for the job(s) involved.
After review of the comments, the Department no longer believes that it would be useful to create a presumption that an employer has met its recruitment obligation by demonstrating its “success” in recruiting U.S. workers. Apparently, there is a strong concern that a negative presumption will arise that any dependent employer who is unable to demonstrate success—a situation which the commenters believe to be commonplace—will be presumed not to have acted in good faith. This was not the Department's intention. The Department, however, believes that this misperception may persist and could divert the focus away from the statutory test—an employer's adherence to industry-wide standards in meetings its recruitment obligations. For this reason, the Department's Interim Final Rule does not establish “successful recruitment” as a basis for a presumption of compliance. However, in its enforcement, the Department intends to look particularly carefully at the recruitment practices of employers who have not had success in hiring U.S. workers.
In the Department's view, its proposal is faithful to the statute's provision charging the Attorney General, not the Secretary, with overseeing the mechanism designed to resolve a particular U.S. worker's allegations that the dependent employer failed to offer him a position for which an H-1B worker was sought. The NPRM explicitly recognizes the concern that the Department should not supplant the specific statutory mechanism by which a U.S. worker can adjudicate his or her complaint that an H-1B worker was unlawfully hired for a position for which the U.S. worker was qualified and should have been hired pursuant to Section 212(n)(1)(G)(i)(II) of the ACWIA. However, at the same time, the Department believes that an employer cannot engage in good faith recruitment if it does not give good faith consideration to U.S. applicants. The Department believes it entirely appropriate to consider the process and methods by which an employer screens applicants for a position in order to ensure that U.S. workers receive the protections accorded them under the ACWIA. As noted in the NPRM, the Department has no intention of second-guessing work-related screening criteria used by an employer or intruding upon the role provided for the Attorney General with respect to any hiring decision involving a particular applicant.
Nothing in the Department's proposal suggested that the Department was interpreting the ACWIA in a way that would require a departure from the way in which employers customarily recruit workers for positions with their companies. The Department recognizes, as Senator Abraham also observed, that a multitude of legitimate factors, objective and subjective, go into recruiting and hiring decisions. As discussed in greater detail in the following section of the Preamble, the Department's inquiry will be limited to ensuring that an employer's recruitment efforts meet the statutory standard,
Finally, Senators Abraham and Graham and the Congressional commenters stated that there may be legitimate business reasons for a company to use different personnel to interview H-1B applicants than U.S. workers, such as where the employer lacks personnel who speak the language of an applicant, or where the company recruits specialists from other countries who are familiar with the foreign culture.
The Department agrees that there may be circumstances in which using different staff to interview U.S. and H-1B workers may be appropriate. In these situations, however, it is important, in the Department's view, that the personnel who interview the H-1B applicants not have a more effective say in the recruitment/hiring process than the personnel interviewing U.S. applicants. A U.S. worker's ability to compete for the position covered by the LCA should not be adversely affected by the status of the interviewer within the company or its recruitment/selection process. Furthermore, it is important that U.S. workers not be interviewed by employees or agents who have a financial interest in hiring H-1B nonimmigrants rather than U.S. workers.
Section 212(n)(1) of the INA as amended by the ACWIA provides that “nothing in subparagraph (G) [of Section 212(n)(1), which establishes the dependent employer's recruitment obligation] shall be construed to prohibit an employer from using legitimate selection criteria relevant to the job that are normal or customary to the type of job involved, so long as such criteria are not applied in a discriminatory manner.”
In explaining this provision, Senator Abraham stated:
“The purpose of this language is to make clear that an employer may use ordinary selection criteria in evaluating the relative qualifications of an H-1B worker and a U.S. worker. It is intended to emphasize that the obligation to hire a U.S. worker who is ‘equally or better qualified’ is not intended to substitute someone else's judgment for the employer's regarding the employer's hiring needs. * * *. Moreover, its judgment as to what qualifications are relevant to a particular job is entitled to very significant deference. * * *. It is not intended to allow an employer to impose spurious hiring criteria with the intent of discriminating against U.S. applicants in favor of H-1Bs and thereby subvert employer obligations to hire an equally or better qualified U.S. worker.”
Congressman Smith explained:
“The employer's recruitment and selection criteria therefore must be relevant to the job (not merely preferred by the employer), must be normal and customary (in the relevant industry) for that type of job, and must be applied in a non-discriminatory manner. Just because an employer in good faith believes that its selection criteria meet such standards does not necessarily mean that they in fact do. Any criteria that would, in itself, violate U.S. law can clearly not be applied, including criteria based on race, sex, age, or national origin. The employer cannot impose spurious hiring criteria that discriminate against American applicants in favor of H-1Bs, thereby subverting employer obligations to hire an equally or better qualified American worker.”
In the NPRM, at Section E.3., the Department noted that employers are authorized to apply criteria that are legitimate (excluding any criterion which itself would be violative of any applicable law); relevant to the job; and normal or customary to the type of job involved—rather than the preferences of a particular employer.
The Department suggested the North American Industrial Classification System as one means of showing a match between the employer's criteria and the accepted practices for a job. In essence, the Department stated that employers cannot impose spurious criteria that discriminate against U.S. workers in favor of H-1B workers. The Department also proposed that in evaluating an employer's “good faith” in the pre-selection treatment of applicants it would limit its scrutiny of screening criteria to these factors. The Department proposed to issue a rule encapsulating the requirement that an employer conduct its recruitment “on a fair and level playing field for all applicants without skewing the recruitment process against U.S. workers.” The Department proposed that the rule would apprize employers that hiring criteria proscribed by applicable discrimination laws cannot be used in solicitation or screening processes, nor may employers apply such processes in a disparate manner.
As earlier noted, the Department's overall recruitment proposals generally received the support of the AFL-CIO, APTA, AOTA, and IEEE. Additionally, Intel specifically endorsed this aspect of the Department's proposal, stating: “Legitimate selection criteria should be based on the ‘core’ requirements to the position [involved], which varies by position and the specific project.” Intel continued: “We agree with [the Department] that the selection criteria be legitimate, relevant to the job, and be normal and customary to the type of job involved.”
A general theme in many comments was that the Department should not define legitimate hiring criteria in advance, but rather should make determinations only in the context of individual enforcement cases.
AILA expressed the view that the statute does not intend the “legitimate selection criteria” provision as an affirmative requirement for employers, but rather as a savings clause where the Department or the Attorney General, in enforcement, believes that the employer's enforcement criteria were not “legitimate” or “relevant,” or were applied in a discriminatory manner. AILA further stated its view that the Department's entire proposal with regard to selection criteria is beyond its statutory authority. ACIP expressed its concern about the Department's reference to the NAICS, which it stated was unnecessary micromanagement and would be difficult for employers to use since it is not yet available to employers. Latour and Kirkpatrick & Lockhart commented that subjective factors cannot be removed from the hiring process, including considerations such as personality, attitude, and other intangible issues.
Miano, on the other hand, stated that it is important that H-1B nonimmigrants meet all the qualifications posted in the recruiting notices. In an apparent reference to employer recruitment prior to petitioning for immigrant workers under the permanent program, Miano observed that employers often advertise with more requirements than anyone can meet and then lower the requirements to bring in the foreign worker.
The Department has no intention of specifying which hiring criteria are legitimate and which are not. The Department's Interim Final Rule, like the proposal, simply makes plain that the statutory obligation of dependent employers and willful violators is to base their recruitment and selection decisions on criteria that are legitimate, relevant, and normal to the type of job involved. Nor does the Department intend to undertake any elaborate scrutiny of selection criteria in its enforcement. The Department's review of the process, as the Interim Final Rule provides, is designed to ensure that U.S. workers are not subject to criteria that deny them a fair opportunity, as fashioned by the ACWIA, to compete for jobs for which nonimmigrant workers are being sought.
The Department, however, has eliminated its reference to the North American Industrial Classification System as one means of showing a match between the employer's criteria and the accepted practices for a job. Upon review, the Department has determined that the online service “O*NET,” an enhanced version of the Dictionary of Occupational Titles, and the U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, will serve better than NAICS as a means by which an employer may choose to demonstrate the nexus between its recruitment/screening criteria and accepted practices for the job in question. As explained in IV.C.3 above (which addresses “exempt workers” under the ACWIA), both O*NET and the Occupational Outlook Handbook are readily available on the Internet. The Department wishes to stress, however, that both O*NET and the Handbook are being suggested only as tools to employers, and to the Department in its enforcement. Employers are not required to use these tools. Although these sources represent a statement by the Department of common qualifications for the occupations listed, they are not intended to be definitive
The Department also wishes to specifically caution against recruitment practices and selection criteria or practices which have the effect of discriminating against U.S. workers or other groups of workers, as the comment by Miano recognizes. In this connection, workers are advised that the three federal agencies ordinarily recognized as responsible for enforcement of anti-discrimination laws are the Equal Employment Opportunity Commission (EEOC), the Department of Justice's Office of Special Counsel (OSC), and the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP). The EEOC administers several statutes prohibiting discrimination in employment based on factors such as age, race, color, religion, sex, or national origin. OFCCP administers several statutes and an executive order prohibiting discrimination by Federal government contractors and subcontractors based on factors such as race, color, religion, sex, national origin, disability, and veteran status. EEOC and OFCCP offices are located throughout the United States and can be located in the blue pages of the telephone directory. Complaints can be made to the EEOC by telephone at: (202) 275-7377; see also their website at
OSC administers several statutes concerning employment discrimination based on national origin, citizenship status, and immigration document abuse. OSC can be contacted at P.O. Box 27728, Washington, DC 20038-7728; telephone: 1-800-255-7688 (workers) or 1-800-255-8155 (employers); and e-mail address:
TCS described its own hiring practices, which it contended should be allowed as legitimate under the Department's regulations. Specifically, TCS recruits its employees from university campuses (apparently in India) and places them in a 12-to 18-month training program in India. At the same time requiring a three-year commitment from its employees, whom it sends on assignments in India and throughout the world. TCS suggested that the Department's proposal could be read to require TCS instead to recruit U.S. workers for assignments in the United States without regard to the employment terms and conditions it applies to its other employees—a requirement which it suggested could potentially subject it to anti-discrimination claims. TCS argued that the Department's proposal incorrectly focused on the recruitment/employment for the particular job listed on an LCA rather than the dependent employer's hiring criteria for a position with the dependent employer—a position that encompasses duties and responsibilities beyond those required for the performance of the particular job covered by an LCA. TCS explained that its employees, including those it places in H-1B positions, serve as team members of consulting groups that will move from job to job in the United States and elsewhere. It stated that it hires employees with this enduring employment relationship in mind, not for the employee's particular assignment to a job in the United States.
Similar practices are described by Simmons, which asked whether a foreign-based employer may give preference to its own (foreign) workers, who are familiar with the specific technologies and protocols of an ongoing project, and whether it would be required to offer permanent as distinguished from temporary positions to employees in the U.S., since it otherwise would only temporarily transfer its permanent, foreign workers to perform the job in the U.S. Simmons also commented that it provides extensive training to its employees in India, and asked if it could require that U.S. workers have such skills, or would it be required to use the hiring criteria it utilized to hire the workers in India. Finally, Simmons asked if it could require U.S. workers to have the precise, specialized skills to meet a specific customer need.
In the Department's view, an employer's recruitment obligation attaches to the position for which an H-1B worker is sought in the United States (the employer is obliged to take, in the words of the statute, “good faith steps to recruit . . . United States workers for the job for which the [H-1B worker(s)] is or are sought”). Additionally, the employer is required to offer the job to the U.S. worker if the worker is at least as qualified as the H-1B worker. Accordingly, the focus must be on the particular job(s) in the United States which is/are covered by the LCA, not the position an H-1B applicant already occupies or will occupy with the dependent employer. An employer will fail to meet its recruitment obligation if it utilizes recruitment/selection criteria that have the effect of precluding an equally or better qualified U.S. worker from being hired for the position. The Department also notes that L visas, where the criteria are met, may be available as an alternative method to accommodate intra-company transfers.
Concerning documentation to show that good faith recruitment was conducted in accordance with industry-wide standards, the NPRM stated that an employer would not need to retain actual copies of advertisements, provided it kept a record of the pertinent details. The Department proposed that an employer's public access file need only contain information summarizing the principal recruitment methods used in soliciting potential applicants and the time frame in which such recruitment was conducted. The NPRM also requested comments on how employers can and should determine industry-wide standards and how to make the employer's determination available for public disclosure.
With regard to documentation concerning pre-selection treatment of applicants for employment, the Department proposed in the NPRM that employers should retain any documentation they receive or prepare concerning the consideration of applications by U.S. workers, such as copies of applications and/or related documents, test papers, rating forms, records regarding interview and job offers. The Department stated its view that the EEOC already requires employers to retain such records and therefore this requirement imposes no new obligations on employers.
With regard to the proposed documentation requirement, Senator Abraham stated: “The intent is not to require employers to retain extensive documentation in order to be able retroactively to justify recruitment and hiring decisions, provided that the employer can give an articulable reason for the decisions that it actually made.” 144 Cong. Rec. S12751 (Oct. 21, 1998).
AILA and ACIP cited Senator Abraham's statement in the
The Department disagrees with the view that the ACWIA denies the
With regard to documents concerning recruitment practices, the AFL-CIO and Miano urged that employers be required to retain copies of all job advertisements or other recruiting efforts. AILA asserted that the Department's statement that an employer need not keep copies of advertisements is an illusory saving because as a practical matter saving these documents is the only way to document the information the Department proposed to require. AILA recommended that employers only be required to keep a summary of their recruitment for the past six months, similar to the requirements of the RIR procedures in the permanent labor certification program—especially when an employer is still recruiting for open positions and it is its practice to hire U.S. as well as H-1B workers. However, AILA stated that employers should not be required to keep recruitment information in public access files because it invites competitor intrusion into an employer's recruitment practices.
The Interim Final Rule, like the proposal, requires employers to retain documentation of the recruiting methods used, including the places and dates of the recruitment, advertisements, or postings; the content of the advertisements and postings; and the compensation terms (if not included in the content). The Department continues to believe that copies of print advertisements are not necessary since publication can be verified if necessary. Rather, the documentation may be in any form, such as a copy of an order or response from the publisher, an electronic or print record of an Internet notice, or a memorandum to the file. Similarly, the documentation of recruitment of positions filled by H-1B nonimmigrants need not be segregated from other records provided it is available to the Department upon request in the event of an investigation.
In addition, as proposed, the employer will be required to maintain a summary of the recruitment methods used and time frames of recruitment in its public access file. The Department does not believe that information in this summary nature will unduly disclose proprietary information since advertisements and attendance at job fairs are public in any event.
ACIP was the only commenter responding to the Department's request for comments on how employers should determine industry-wide recruitment standards, stating only that it is unaware of any source that catalogues standard recruiting practices within an industry. The Department repeats its request for further information on this point. The Department has determined that employers will not be required to maintain evidence of industry practice. However, in the event of an investigation, the employer will be required to substantiate its assertion as to industry practice through credible evidence, such as through trade organization surveys, studies by consultative groups, or a statement from a trade organization regarding the industry norm(s). The Department will look behind such evidence as it deems appropriate in the context of the particular recruitment performed by an employer.
With regard to documentation concerning pre-selection treatment of applicants, AILA disagreed with the Department's characterization of EEOC guidelines, stating that EEOC only requires that if documentation is created or retained, it must be done consistently. It also stated that it is impractical to expect an employer to retain what may be thousands of resumes submitted to it at a job fair, especially since many resumes do not even relate to positions offered.
As discussed in detail in IV.D.8, above, in connection with the retention of records relating to displacement of U.S. workers, the Department disagrees with AILA's characterization of the EEOC requirements. The Department continues to believe that most employers are already required to preserve copies of the records listed and that retention of the documents is necessary to demonstrate fair treatment of U.S. applicants. ADEA regulations, for example, require an employer to preserve all records it makes, obtains or uses relating to “[j]ob applications, resumes, or any other form of employment inquiry whenever submitted to the employer in response to his advertisement or other notice of existing or anticipated job openings, including records pertaining to the failure or refusal to hire any individual, * * * [j]ob orders submitted by the employer to an employment agency or labor organization for recruitment of personnel for job openings, * * * [a]ny advertisements or notices to the public or to employees relating to job openings, promotions, training programs, or opportunities for overtime work.” 29 CFR 1627.3(b)(i).
The Department emphasizes that it is not requiring employers to create any documents regarding treatment of applicants for employment, but rather to preserve those documents which are created or received. With regard to the comment regarding job fairs, this rule would not require employers to retain any resumes which do not relate to the positions to be filled by H-1B nonimmigrants. Nor does the Interim Final Rule require that any information relating to treatment of applications be maintained in the public access file.
Section 212(n)(1)(C) of the INA, 8 U.S.C. 1182(n)(1)(C), requires that, at the time of filing the LCA, an employer seeking to hire an H-1B nonimmigrant shall notify the bargaining representative of its employees of the filing or, if there is no bargaining representative, post notice of filing in conspicuous locations at the place of employment. As amended by the ACWIA, Section 212(n)(1)(C) further provides (where there is no bargaining representative) that the notice may be accomplished “by electronic notification to employees in the occupational classification for which the H-1B nonimmigrants are sought.”
Regulations with respect to this notification requirement were published by the Department as a Final Rule on December 20, 1994 (59 FR 65646, 65647). That Final Rule (set forth in the current Code of Federal Regulations) required, among other things, that an employer, who sends an H-1B worker to a worksite within the area of intended employment listed on the LCA which was not contemplated at the time of filing the LCA, post a notice at the worksite on or before the date the H-1B nonimmigrant begins work. 20 CFR 655.734(a)(1)(ii)(D). The purpose of the
In the 1999 NPRM, the Department proposed for comment § 655.734(a)(1)(ii)(A) (previously published for notice and comment in the October 31, 1995 proposed rule as § 655.734(a)(1)(ii)(C) and (D)). The provisions regarding “hard copy” notice requirements remained essentially unchanged from the 1995 proposed rule. Subclause (A)(3) requires employers to post notice at worksites on or within 30 days before the date the LCA is filed. Subclause (A)(4) requires that where the employer places an H-1B nonimmigrant at a worksite which is not contemplated at the time of filing the LCA, but is within the area of intended employment listed on the LCA, the employer is to post notice at the worksite (either by hard copy or electronically) on or before the date any H-1B nonimmigrant begins work there. The preamble explained that posting is not required if the location is not a “worksite,” as discussed in proposed Appendix B of the NPRM.
Fourteen commenters responded to the 1995 proposed rule on notification. Eight of those commenters (AILA, ACIP, Intel, Microsoft, Motorola, NAM, Complete Business Solutions, Inc. (CBSI), and Moon, Moss, McGill & Bachelder (Moon)) objected to posting at worksites not controlled by the LCA-filing employer. These commenters asserted that many employers' customers would not allow posting at their worksites. In addition, because the regulations define “place of employment” as the worksite or physical location at which the H-1B nonimmigrant's work is actually performed, some commenters expressed a concern that strict application of this definition of place of employment could lead to absurd and/or unduly burdensome notice requirements such as posting notice at a restaurant when an H-1B nonimmigrant has a business lunch, at a courthouse when the nonimmigrant makes a court appearance, or at an out-of-town hotel when the nonimmigrant attends a training seminar. One commenter (Microsoft), expressed concern about the burden of notification and suggested that the notice provision should not apply to employers who do not make great use of the H-1B nonimmigrant worker visa program.
The Department received six comments on these provisions in response to the 1999 NPRM.
The AFL-CIO emphasized the importance of giving notice to all affected employees, including employees of the secondary employer and employees of other staffing firms. The AFL-CIO stated that the purpose of the notice is to provide information to affected workers that they may have certain rights and that the employer has certain duties regarding placement of the H-1B worker which are not diminished because the worksite is “short-term” or “transitory.”
Four employer organizations (ACIP, AILA, ITAA, NACCB) commented on the issue of notification (whether hard-copy or electronic) to affected workers at third-party worksites. These groups contended that the statute requires an employer to notify only its own employees and that it is unreasonable to hold a primary employer responsible for notifying employees at worksites over which it lacks control. AILA gave as an example, workers such as service engineers who travel to a number of worksites during the course of a day or a week. AILA stated that if a client refuses to post notice, an H-1B worker cannot be sent to the site, resulting in a potential loss of business.
One commenter (Latour) requested that the regulation specify that worksite posting requirements do not apply to rehabilitation professionals providing home health care.
The Department has carefully considered the comments submitted in response to the 1995 proposed rule and the 1999 NPRM. The Department notes first that the statute requires that notice be posted at the place of employment. See Section 212(n)(1)(C)(ii). The Department's regulations have consistently defined “place of employment” as “the worksite or physical location where the work is performed.” 20 CFR 655.715 (1992).
This definition was modified slightly in the 1994 Final Rule (currently in effect) to provide “where the work actually is performed.”
Furthermore, the purposes of notification can only be satisfied by notice to all of the affected workers—
The Department observes that a number of employers' concerns with respect to notification of affected employees, either by hard copy posting or electronically, at third-party work sites, have been addressed by the interpretation of “place of employment”/”worksite” discussed in detail in IV.P.1 and .2 of the preamble and § 655.715 of the Interim Final Rule (see Appendix B of the NPRM). As stated in § 655.715, the Department interprets “place of employment” as excluding locations where the H-1B worker's presence either is due to the developmental nature of his/her activity (
Although the Department recognizes that in some instances it may be inconvenient for an employer to post notice at a worksite controlled by another business (such as the customer of an employer), the Department notes that its experience in enforcement is that no employer has been unable to post notices at a customer's worksite when the operator, owner, or controller of the worksite was informed that posting was required by the statute and the regulations.
The Department agrees with the comment that notice need not be provided where a rehabilitation professional is providing services in the client's home. The Interim Final Rule provides in paragraph (2) of the definition of “place of employment” in § 655.715, that “a physical therapist
The Department also proposed a regulation, § 655.734(a)(1)(ii)(B), which would implement the ACWIA provision allowing electronic notification of employees. The ACWIA modified the statutory requirement for worksite posting of notices (where there is no collective bargaining representative), to permit an H-1B employer to use electronic communication as an alternative to posting “hard copy” notices in conspicuous locations at the place of employment.
Senator Abraham explained: “An employer may either post a physical notice in the traditional manner, or may post or transmit the identical information electronically in the same manner as it posts or transmits other company notices to employees. Therefore, use of electronic posting by employers should not be restricted by regulation.” 144 Cong. Rec. S12751 (Oct. 21, 1998).
Congressman Smith elaborated: “By providing this flexibility, Congress intended to improve the effectiveness of posting in the protection of American workers. Therefore, the electronic notification must actually be transmitted to the employees, not merely be made available through electronic means such as inclusion on an electronic bulletin board.” 144 Cong. Rec. E2325 (Nov. 12, 1998).
As the NPRM explained, in providing this alternative method for notification to affected workers, Congress indicated no intention of reducing the effectiveness of the notice requirement which has been an element of the H-1B program from its inception. The proposed regulation therefore provided that electronic notice may be accomplished by any means the employer ordinarily uses to communicate with is workers about job vacancies or promotion opportunities. Thus the NPRM stated that notice would be permitted through the employer's “home page” or “electronic bulletin board” where employees as a practical matter have direct access; or through e-mail or other actively circulated electronic message such as the employer's newsletter, provided the employees have computer access readily available. Where such computer access is not readily available, the NPRM explained that notice may be accomplished by posting a “hard copy” at the worksite.
The preamble further explained at Section O.5 that where the H-1B nonimmigrant(s) will be employed at the worksite of another employer, the H-1B employer is required to provide notice to the affected workers at that worksite. Thus, the H-1B employer may make arrangements with the other employer to accomplish the notice (
The Department received 30 comments, including 22 from individuals, on the 1999 NPRM provisions regarding electronic notice.
The individuals generally objected to the statutory provision allowing electronic posting as an alternative to hard copy posting, asserting that Internet posting alone allows companies to hide replacement of American workers with foreign workers. The AEA essentially expressed a similar view on electronic posting, noting that the Internet/Intranet method of notification is unworkable.
The AFL-CIO commented that electronic posting should only be allowed if employers can show that all workers have access to e-mail or the Internet site, and that all notices are flagged to them. Another employee organization, IEEE, emphasized that to be an effective notice, electronic communications must be readily available and accessible to all affected U.S. and foreign workers.
ACE, ACIP and SHRM commended the Department for its flexibility on methods of electronic posting. ACIP recommended that the Department distinguish between “indirect” and “direct” electronic notices, suggesting that where “indirect” notice is given, such as on a bulletin board, the employer should have to make the notice available for 10 days. If, however, the employer provides direct notice, such as e-mail to each employee, ACIP suggested that notice should only have to be sent to each affected employee once. SHRM urged the Department to allow an employer to document that notice has been given by permitting the employer to place a signed notice in the public access file regarding how notice was provided. AILA recommended amending the regulations to clarify that an employer may satisfy its electronic posting obligation by providing the notification on its internal network or website. AILA also recommended that with respect to employers which send the notice by e-mail, the regulation should specify that notification sent to a distribution group of “affected workers” satisfies the electronic posting requirement. Another commenter (Cooley Godward) sought clarification on the issue of how electronic posting can comply with the requirement of § 655.734(a)(1)(ii)(A) that the LCA be posted in two or more conspicuous places, and on whether or not all four pages of the LCA must be posted.
With regard to posting at third-party worksites, AILA suggested that a primary employer should be able to satisfy its obligation to document that an electronic posting was made at the work site of a third-party employer in any one of the following three ways: (1) A statement in the contract between the parties requiring the notification to be made; (2) a written statement by a responsible party at the third-party location; or (3) a printout of the electronic communication with a certification about when, how, and to whom it was sent.
The statute does not give the Department the discretion to disallow electronic posting, as suggested by the individual commenters. The Department agrees with the AFL-CIO and the IEEE, however, that the critical consideration is that the notice is readily available and accessible to the affected workers. The Department believes that the proposed regulation, as drafted, meets these concerns. Posting must be by the means the employer ordinarily uses to communicate with its workers about job vacancies or promotion opportunities. Posting on the employer's “home page” or electronic bulletin board is allowed where employees as a practical matter have direct access to these resources. Where employees lack computer access, a hard copy must be posted or the employer may provide employees individual copies of the notice.
The Interim Final Rule clarifies the operational requirements for electronic posting. Like the physical posting, the electronic notice need not incorporate a copy of the LCA, although it would be permissible since a copy of the LCA would satisfy the substantive requirements (see § 655.734(a)(1)(ii)). (Employers are reminded that all H-1B nonimmigrants must be given a copy of the LCA. See § 655.734(a)(2).) Like “hard copy” posting, electronic posting on a “home page” or electronic bulletin board must be posted for 10 days. If direct notice is given to each affected employee, as through e-mail or “hard copy” notices, the notice need only be given once during the regulatory time
The Interim Final Rule also clarifies that electronic notification, like other physical posting, shall be provided in the period on or before 30 days before the date the LCA is filed. Where H-1B nonimmigrants are placed at a worksite not contemplated when the LCA was filed, the notification shall be provided on or before the date the H-1B nonimmigrant begins work at the site.
Finally, upon review of the provisions of the ACWIA, the Department has concluded that some modification of the required notice is appropriate. Specifically, the Department has concluded that the content of the notice should be modified to require dependent employers and willful violators to notify affected workers, through the methods provided herein, that they are H-1B-dependent or a willful violator, subject to the requirements for recruitment and non-displacement of U.S. workers. Where the employer is dependent (or a willful violator) but will employ only exempt workers, the notice must so provide, and further state that it is not subject to the recruitment and non-displacement requirements. In addition, the notice about filing complaints with the Department of Justice for failure to offer employment to an equally or better qualified U.S. worker will only be required for H-1B-dependent employers and willful violators. Finally, because the full attestations are set forth in the cover sheet, Form ETA 9035CP, the provision in § 655.734(a)(3) requiring employers to give copies of the LCA to all H-1B nonimmigrants has been modified to provide that copies of the cover sheet shall be given to the H-1B nonimmigrant upon request.
Section 212(n)(2)(C)(viii) of the INA as amended by the ACWIA states that “[i]t is a failure to meet a condition of paragraph 1(A) [the wage and working condition attestation requirements] * * * to fail to offer an H-1B nonimmigrant, during the nonimmigrant's period of authorized employment, benefits and eligibility for benefits (including the opportunity to participate in health, life, disability, and other insurance plans; the opportunity to participate in retirement and savings plans; and cash bonuses and noncash compensation such as stock options (whether or not based on performance) on the same basis, and in accordance with the same criteria, as the employer offers to United States workers.”
Senator Abraham and Congressman Smith described the operation of this provision in similar terms. Senator Abraham explained:
This obligation is only an obligation to make benefits available to an H-1B worker if an employer would make those benefits available to the H-1B worker if he or she were a U.S. worker. Thus, if an employer offers benefits to U.S. workers who hold certain positions, it must offer those same benefits to H-1B workers who hold those positions. Conversely, if an employer does not offer a particular benefit to U.S. workers who hold certain positions, it is not obligated to offer that benefit to an H-1B worker. Similarly, if an employer offers performance-based bonuses to certain categories of U.S. workers, it must give H-1B workers in the same categories the same opportunity to earn such a bonus, although it does not have to give the H-1B worker the actual bonus if the H-1B worker does not earn it.
Senator Abraham continued:
While this clause is not intended to require that H-1B workers be given access to more or better benefits than a U.S. worker who would be hired for the same position, it does not forbid an employer from doing so. For example, an employer might conclude that it will pay foreign relocation expenses for an H-1B worker whereas it will not pay such relocation expenses for a U.S. worker.
Congressman Smith, on the other hand, stated that “[t]he statement ‘on the same basis’ is intended to mean equal or equivalent treatment, not preferential treatment for any group of workers. Thus, if an employer offers benefits to American workers, it must offer those same benefits to H-1B workers.” 144 Cong. Rec. E2326 (Nov. 12, 1998).
Senator Abraham also explained that “care must be taken to find the right U.S. worker to whom to compare the H-1B worker in terms of access to benefits. * * * If a particular benefit is available only to an employer’s professional staff, then it only need be made available to an H-1B filling a professional staff position. If an employer's practice is not to offer benefits to part-time or temporary U.S. workers, then it is not required to offer benefits to part-time H-1B workers or temporary H-1B workers employed for similar periods.” 144 Cong. Rec. S12753 (Oct. 21, 1998).
Senator Abraham and Congressman Smith differed in their view as to the application of the provision to multinational corporations. Thus Senator Abraham stated:
If an employer's practice is to have its U.S. workers brought in on temporary assignment from a foreign affiliate of the employer remain on the foreign affiliate's benefits plan, then it must allow its H-1B workers brought in on similar assignments to do the same. Likewise, in that instance, it need not provide the H-1B workers with the benefits package it offers to its U.S. workers based in the U.S. Indeed, even if it does not have any U.S. workers stationed abroad whom it has brought in this fashion, it should be allowed to keep the H-1B worker on its foreign payroll and have that employee continue to receive the benefits package that other workers stationed at its foreign office receive in order to allow the H-1B worker to maintain continuity of benefits. In that instance, the basis on which the worker is being disqualified from receiving U.S. benefits (that he or she is receiving a different benefits package from a foreign affiliate) is one that, if there were any U.S. workers who were similarly situated, would be applied in the same way to those workers. Hence the H-1B worker is being treated as eligible for benefits on the same basis and according to the same criteria as U.S. workers. It is just that the criterion that disqualifies him or her happens not to disqualify any U.S. workers. Or to put the point a little differently: The H-1B worker is being given different benefits from the U.S. workers not because of the worker's status as an H-1B worker but because of his or her status as a permanent employee of a foreign affiliate with a different benefits package.
Congressman Smith had a different perspective:
There is particular concern regarding such erosion in instances where a foreign affiliate of a petitioning employer is involved as the agent for payment of wages and provision of benefits to the H-1B workers. The statutory obligations must be fully met in such instances. Congress intends that the ultimate and complete responsibility for all employer obligations under this Act, including the provision of benefits to the H-1B worker equal to those offered the employer's
In the NPRM, the Department proposed that: (a) An employer is required to offer H-1B workers the same benefit package it offers to U.S. workers; (b) the package must be offered on the same basis as it is offered to U.S. workers,
The Department further proposed that an employer, consistent with its attestation to adhere to minimum standards for H-1B workers, may provide greater benefits to H-1B workers than to U.S. workers. The Department acknowledged, however, that the phrases “same basis” and “same criteria,” applied literally, could require that U.S. and H-1B workers be offered the same (or possibly equivalent) benefits.
The Department noted the possible complications that might arise with respect to benefits afforded employees of a multinational corporate operation, particularly where the H-1B worker works in the U.S. for only a short period of time. In this situation, the NPRM noted, it might not be practical for the U.S. employer to provide the H-1B worker with benefits identical to those provided its U.S. workers. The Department proposed that while the U.S. employer may cooperate with its corporate affiliate in the worker's home country with regard to the payment of wages to the worker and the maintenance of his or her “home country” benefits (such as that country's retirement system), the U.S. employer remains ultimately responsible for ensuring that the H-1B worker is provided benefits at least equal to those offered U.S. workers. The Department stated that it would look closely into situations involving a foreign affiliate where there was the appearance of a contrived arrangement to avoid the U.S. employer's obligation to provide to its H-1B workers wages and benefits at least equal to those provided its U.S. workers. At the same time, the Department proposed that it would carefully examine the circumstances to consider non-equivalent but nonetheless equitable benefits, including the H-1B worker's actual length of stay in the United States.
The Department also proposed to modify § 655.732 of the current regulations to clarify that an employer must provide the H-B worker with fringe benefits and working conditions at least equal to those provided U.S. workers. The NPRM noted that such a modification would make it clear that the requirement that the H-1B employer provide working conditions, including benefits, that will not adversely affect those provided similarly employed U.S. workers, requires consideration of similarly employed workers in the employer's own workforce and, in some circumstances, the prevailing conditions in the area of employment.
Finally, the Department sought comment on whether it would be beneficial to develop a regulatory definition of “benefits” within the meaning of the ACWIA or merely to provide a list of examples. The NPRM noted that the ACWIA contemplates the inclusion of various forms of cash and non-cash compensation, such as bonuses and stock options, which ordinarily are considered wages.
Several commenters, including AOTA, APTA, IEEE, and an attorney (Latour), generally endorsed the Department's NPRM approach in this area. IEEE stated that the Department's proposal “will help implement the letter and the spirit of the law that the wages and working conditions of U.S. workers not be adversely affected” and, at the same time, “help to reduce the likelihood that employers will discriminate against H-1B workers by offering them less generous benefits.”
Senators Abraham and Graham and AILA noted that the NPRM created some confusion by failing to make it clear that an employer must offer “benefits and eligibility for benefits” on the same basis as offered to U.S. workers. Citing to Senator Abraham's statement in the Congressional Record, these commenters stated that this phraseology was important because workers must be or make themselves eligible to obtain benefits—
The Department agrees that the ACWIA requires an employer to offer H-1B workers benefits and eligibility for benefits on the same basis and in accordance with the same criteria as U.S. workers. Because employers often offer workers a choice of benefits, the ACWIA does not require that U.S. workers and H-1B workers actually receive the same benefits. Similarly, some employees may opt for “family” coverage of certain benefits, while others opt for “individual” coverage. Furthermore, as the commenters noted, workers may be required to meet certain criteria or take certain action to avail themselves of the benefits. However, an employer cannot satisfy its statutory requirement by “offering” benefits which it never actually provides to selecting workers. Thus, as discussed below, employers are required to retain documentation showing that employees actually receive the benefits that they have selected. While the Department believes that the NPRM comported with the statutory language, the Interim Final Rule clarifies these requirements in order to eliminate any ambiguity.
AILA and ACIP agreed with the Department's proposal that an employer lawfully may offer and provide greater benefits to H-1B workers than those offered to U.S. workers. The AFL-CIO asserted the contrary position. In the AFL-CIO's view, an employer should be required to provide identical benefits to H-1B and U.S. workers, a result it argues is consistent with the ACWIA's “same basis” requirement. Senators
In the Department's view, the statute does not require that H-1B workers and U.S. workers be offered the same benefits. While perhaps Section 212(n)(2)(C)(viii), read in isolation, could be read to require this result, this provision must be read in the context of the entire statute. Section 212(n)(2)(C)(viii) provides that it is a failure to meet paragraph (1)(A)—the wage requirements of the Act—to fail to provide the required benefits. Section 212(n)(1)(A)(i) in turn provides that the employer must offer wages that are “at least” those paid to similar workers. The Department notes, however, that an H-1B-dependent employer or willful violator, when it conducts good faith recruitment pursuant to section 212(n)(1)(G)(i), must offer U.S. workers the same compensation (including benefits) as it will offer the H-1B workers in the recruited positions. Furthermore, providing greater benefits to H-1B workers may violate requirements of the various discrimination laws. The agencies that enforce discrimination requirements and their telephone numbers and website addresses are set forth above in IV.E.4, above.
Senators Abraham and Graham asserted that the Department should look at the employer's entire benefits structure as it concerns “benefits eligibility for its workforce generally” to make sure that the comparison is made to the right employees. These Senators and AILA suggested that comparisons could appropriately be made on such bases as part-time vs. full-time workers, positions requiring extensive travel vs. those that do not, relative seniority, the particular organizational component to which the workers are assigned, and whether the individual occupies a position for which special incentives should apply. Similarly, ACIP suggested that the Department look beyond a simple full-time/part-time distinction.
The Department agrees that it should look at an employer's benefits structure. Employers commonly provide different benefits, for example, based on part-time vs. full-time status, seniority, union vs. non-union, organizational component, etc. The Department agrees that H-1B workers should be provided benefits based on their position in the organizational structure, provided the employer utilizes the same distinctions on an organization-wide basis. However, the Department will not accept artificial distinctions which are not generally accepted in the industry and which have the result of denying benefits to H-1B workers on the basis that there are no comparable workers in the organization or which otherwise have the effect of discriminating between workers on the basis of citizenship, nationality, or other prohibited grounds.
The Interim Final Rule incorporates these principles. The Interim Final Rule also prohibits employers from denying benefits based on the H-1B worker's temporary status since all H-1B workers, by virtue of their visa restrictions, are temporary workers. Thus, an employer by utilizing “temporary” as a basis for comparison could evade offering to these workers the benefits that typically would be paid to workers hired on a “permanent basis,” even though the tenure of workers in each group might be of comparable duration, thereby effectively nullifying the statutory provision. An employer would, however, be allowed to require that an H-1B workers meet eligibility and vesting requirements.
Sun Microsystems suggested that to the extent there was a perceived need for greater scrutiny over fringe benefits, the Department's efforts should be restricted to dependent employers. The Department disagrees. Unlike some other provisions of the ACWIA, the “same basis”/“same criteria” provision applies to all H-1B employers.
TCS asserted that the Department “should clarify that, where length of service is applicable to the amount of the benefit, only the H-1B non-immigrant's length of service in the United States, and not the H-1B's entire length of service with the employer should be included in the calculation.”
It is the Department's view that an employer is required to offer benefits on the same basis as it offers benefits to its U.S. employees. If an employer offers benefits based on length of service for the employer, it must offer benefits to its H-1B workers on that basis as well. (See the discussion below regarding treatment of multinational organizations.)
APTA suggested that the INS inform all H-1B workers of their right to be offered the same benefits as U.S. workers, to better ensure that they receive the benefits due them. The Department notes that every H-1B worker is required to receive a copy of the LCA, which contains a brief reference to this requirement. Section III.B of the Preamble, above, discusses in greater detail the Department's plans to disseminate information regarding the program's requirements.
In response to the Department's query, BRI and AILA contended (without citing support for their position) that the ACWIA contemplates that an employer may satisfy the benefits attestation by offering H-1B workers different but “equivalent” benefit packages relative to the benefits offered to U.S. workers. BRI further stated that such benefits should be compared according to their monetary value.
The Department has concluded, as a general matter, that the statute's “same basis” provision does not permit an employer to offer its H-1B workers benefits “equivalent” to but different from those offered its U.S. workers. The Department notes that these commenters, like other commenters, appeared to be concerned with benefits provided by multinational corporations, which are discussed separately below.
Intel and ACIP stated that a few countries prohibit their citizens from owning stock in foreign corporations. Cooley Godward also raised the question of benefits such as stock options whose accrual will terminate after an H-1B employee's period of status ends.
Although there is nothing which requires an employee to take advantage of a stock option, it is the Department's view that if an employer is aware that its H-1B worker(s) is prohibited from taking advantage of a stock option because of laws of the worker's home country, the employer should offer such worker(s) an alternative benefit of comparable value. With regard to the question of stock options or benefits which will accrue after termination of an H-1B worker's period of status, such benefits should be provided on the same basis as they would otherwise be provided to workers who are no longer in the firm's employ (or who have transferred back to the home office). If other workers have a right to exercise the option or receive the benefit even if they are no longer in the firm's employ, the same would be true with regard to H-1B workers.
Turning to the question of treatment of employees of multinational firms, Senators Abraham and Graham asserted that the Department's proposal “appear[s to provide no] consideration of the question of who the right similarly situated worker to compare [the transferee] is, and whether there actually is one.” They, instead, suggested that the Department should focus on the transferee's status as a permanent employee with the
TCS stated that it appreciated the Department's sensitivity to the issue of the application of the benefits requirement to employees who receive a range of benefits from their foreign employer and are only in the United States on short-term assignments in connection with their long-term employment with the foreign employer. TCS contended, however, that the requirement that H-1B workers be provided benefits equivalent to those received by U.S. workers is contingent upon the existence of “similarly employed” workers in the United States. TCS argued that because it is an Indian company and its employees receive India-based benefits, they are not similarly employed to any computer engineers it might hire in the United States, and that TCS would therefore be relieved from any obligation to offer new benefits to its workers during the period of their temporary employment in the United States.
ACIP commented that a “length of status” test “wrongly assumes that the practice of maintaining a foreign benefits program is a matter of convenience, when, in fact, the practice is maintained because the disruption often causes the employee to lose vested interest in a benefit plan.” Instead, they suggested, “[t]he Department should adopt a rule that allows for a transferee to maintain his or her foreign benefits as long as such benefits plan is administered abroad continuously without interruption and as long as the company typically offers this option to all international transferees.” Similar comments were made by AILA and Intel, which stated that it is in the employees' best interest to stay on “home country” pay and benefits. SIA also stated that if it is an employer's practice to have its workers continue to receive “home country” benefits when they are on a short-period assignment in the United States, it should be allowed to continue to do so.
Some commenters (ACIP, Intel, Latour) indicated that multinational corporations typically offer similar benefit packages to all their employees. Thus, ACIP stated that “most employers already provide the same benefits to all workers and do not distinguish between U.S. and foreign nationals.” At the same time, it noted that “in dealing with a global workforce, it is sometimes necessary to provide different benefit packages to workers from different countries, depending upon the laws and social services of that country.” Intel similarly stated that the vast majority of its regular full-time H-1B workers are on U.S. benefits; it noted that a small percentage of these workers are on their “home country” pay and benefits. Intel further stated that all its H-1B workers are put on U.S. medical benefits, because of “out of country” coverage problems. ACIP explained that currently employers may provide certain benefits to workers depending upon standards in the workers' home countries and the employer's international relocation policies. As stated by ACIP: “Benefits may include relocation expenses, schooling for children, housing allowance, travel expenses, additional vacation time and assistance with health care or other items the worker is accustomed to receiving.”
ACIP applauded the Department's effort to deal with this issue and supported the Department's statement that “should the U.S. worker remain on the foreign plan, the U.S. employer will be held responsible for compliance with all H-1B regulations.”
AILA's comment, that flexibility is needed to preserve the ability of the H-1B workers to preserve their existing “home country” benefits (which if interrupted could have significant and perhaps long-term negative impact on the worker and the worker's family), was representative of several comments on this point.
The Department has carefully considered the question of application of the benefits requirements of the ACWIA to multinational firms. The Department cannot agree with the construction of the statute that would deprive foreign-based employees of the benefit protections enacted by the ACWIA on the basis that they are not “similarly employed.” On the other hand, the Department believes it is appropriate to provide some accommodation for multinational corporate operations where “home country” benefits are equitably equivalent to the benefits provided to employees.
The Department has crafted a two-part Interim Final Rule, distinguishing between workers who are in the United States for a short period of time (90 days or less) and workers who are in the United States for a longer period. Where H-1B workers permanently employed in their “home country” (or some other country) are not transferred to the United States but remain on the payroll of their permanent employer in their “home country” and continue to receive benefits from the “home country” without interruption, the Department will require nothing further, provided the worker is in the United States for no more than 90 continuous days in any one visit to the United States. Moreover, the employer must also provide reciprocity to its U.S. workers
Once the H-1B worker has worked in the U.S. for more than 90 continuous days (or from the point where the worker is transferred or it is anticipated that the worker will likely remain in the United States for more than 90 continuous days), the H-1B employer is required to offer that worker the same benefits on the same basis as provided to its U.S. workers unless: (1) The worker continues to be employed on the “home country” payroll; (2) the worker continues to receive “home-country” benefits without interruption; (3) the “home-country” benefits are equitable relative to the U.S. benefit package; and (4) the employer provides reciprocity (
Furthermore, as Intel noted in its comments, many health care plans fail to provide coverage, or fail to provide full coverage, outside their country's boundaries. Therefore any employer that offers health coverage to its U.S. workers must offer similar coverage (same plan and same basis) to its H-1B workers in the United States for more than 90 continuous days unless the H-1B workers' home-country plan provides full coverage (
In addition, employers will be required to provide H-1B workers who are in the United States more than 90
TCS argued that if the Department requires the same or even equivalent benefits for its workers, they will receive double benefits—the U.S. benefits plus their “home country” benefits. In the Department's view, TCS is mistaken. The Department's proposal tracks the ACWIA. Neither the proposal nor the statute requires the employer to continue to maintain “home country” benefits in such situations. While an employer in such situations, either by contract or otherwise, might be required to maintain such benefits (or it may decide to do so as a matter of company policy), the ACWIA does not impose such an obligation, nor does this rule.
The Department received a number of comments regarding whether a multinational employer continuing “home country” benefits to H-1B workers need establish that the benefits provided are equivalent or equitable in relation to benefits provided U.S. workers. ACIP expressed the view that “it [would be] extremely burdensome to put a dollar value on benefits received.” Similarly, AILA stated that multinational employers should be able to provide equitable but non-equivalent benefits to H-1B workers. BRI, on the other hand, took the position that benefits should be equivalent, comparing their monetary value. The AFL-CIO, as discussed above, contended that employers should be required to provide identical benefits to H-1B and U.S. workers.
The Department agrees that a multinational firm, under the circumstances described, should not be required to make a valuation of the benefits it offers and provides to U.S. and H-1B workers, but rather should be required, in the event of an investigation, to establish only that it provides benefits which are equitable in relation to U.S. workers' benefits. The Department finds very persuasive the arguments that it is in the workers' interest to allow employers to continue their permanent employees on “home country” benefits when working temporarily in the United States. At the same time, the Department believes that establishing benefits in terms of cost is unduly burdensome, and would not further the objective of establishing comparable benefits since there is no reason to believe even identical benefits abroad would cost the same as benefits in the United States.
Only ACIP provided comments on the meaning of the phrase “equitable benefits.” ACIP suggested that “[t]he emphasis should be on whether the benefits package is equitable in light of basic human needs, similarity in treatment of all workers, how U.S. workers transferred abroad are treated, and the facts and circumstances of each H-1B worker.” ACIP further stated: “While we agree that the Department should look closely at ‘contrived cases,’ we stress that the Department should look closely at the facts of each case to determine whether equitable benefits have been provided. * * * [T]he Department should not place undue emphasis on any one factor such as the employee's length of stay in the U.S.”
The Department agrees that “equitability” between “home country” and U.S. benefits does not reduce to a bright-line test. In the event of an enforcement action, the Department will look into all the circumstances bearing upon the benefits to ensure that the H-1B worker's continued receipt of these benefits is not less advantageous to him than the benefits offered U.S. workers. This examination entails a qualitative rather than a quantitative review. In other words, an employer in these circumstances must be able to demonstrate that the worker's “home-country” benefits are equitable in relation to the benefits provided its U.S. workers based in the United States, similarity in treatment of all workers, how U.S. workers temporarily stationed abroad are treated, and the facts and circumstances of each H-1B worker. Where the employer makes this demonstration, and there is no appearance of contrivance to avoid payment of U.S. benefits, the Department will not second-guess the employer.
Several commenters responded to the Department's request for comments on whether it should define “benefits” as that term is used in Section 212(n)(2)(C)(viii), which provides that the requirement to offer benefits and eligibility for benefits includes: “the opportunity to participate in health, life, disability, and other insurance plans; the opportunity to participate in retirement and savings plans; and cash bonuses and noncash compensation such as stock options (whether or not based on performance). * * *”. Senators Abraham and Graham and AILA stated that they did not see the need for further defining “benefits,” noting that the statute contains several examples of benefits. ACIP also stated that a regulatory definition was unnecessary, suggesting that instead the Department should examine the facts and circumstances of each case. TCS contended that the statutory list of benefits is exclusive; alternatively, it argued that the Department should specify the benefits so that employers do not have to guess about what is covered—
The Department agrees with the position of most commenters that the existing statutory definition is sufficient to administer effectively this aspect of the statute. The language of section 212(n)(2)(C)(viii) provides a fairly comprehensive list of the benefits that may be offered to workers in the U.S. While the use of “including” evinces an intention that the list is not exhaustive, the list, in the Department's view, is representative of the types of benefits that must be considered. Thus, an employer, by analogy, may determine whether other particular benefits should be taken into account. In this regard, the Department notes that the regulatory schemes under other employment-related statutes such as FMLA, the Equal Pay Act, the ADEA, and ERISA also provide guidance in this area. The Interim Final Rule takes this approach in lieu of an attempt to more fully define benefits. Under the Department's approach, it would appear clear that office accouterments—the example used by TCS—ordinarily would not constitute a benefit within the meaning of the statute. At the same time, it bears noting that the ACWIA does not relieve employers from any obligations they may have incurred through collective bargaining or otherwise with regard to particular working conditions, or of its obligation not to discriminate based on citizenship or national origin.
With regard to the Department's stated intention to modify the current regulatory provision concerning the working condition attestation, ACIP, AILA, and TCS expressed the concern that the Department was seeking to impose a new requirement,
After review of the ACWIA and the provisions of the H-1B program as a whole, the Department concurs with commenters that Congress intended that the requirement for offering benefits and eligibility for benefits to H-1B workers on the same basis and same criteria as they are offered to U.S. workers employed by the employer includes both benefits paid as compensation for services rendered and working conditions. The Department has therefore concluded that it is inappropriate to continue the provision in § 655.732 which provides for consideration under some circumstances of prevailing conditions in the area of employment. Section 655.732 therefore is revised in the Interim Final Rule to clearly require that working conditions be provided to H-1B workers on the same basis and same criteria as they are offered to U.S. workers.
The Department also believes that certain benefits appropriately are in the nature of compensation for service rendered, and have a monetary value to workers and monetary cost to employers. Such benefits include cash bonuses, paid vacations and holidays, and termination pay, which are paid directly to workers and are taxable when earned. Also included are benefits such as health, life and disability insurance, and deferred compensation such as retirement plans and stock options which are funded by employers, either directly as costs are incurred or through contributions to fringe benefit plans or insurance companies. The Department has concluded that such benefits are more in the nature of wages than working conditions, although the Department cautions that only benefits which meet the criteria of § 655.731(c)(2) count toward satisfaction of the required wage since such benefits are not included in surveys used to determine the prevailing wage. On the other hand, benefits which do not have a direct monetary value to workers or cost to employers, are in the nature of working conditions, including matters such as seniority, hours, shifts, and vacation periods, and preferences relating thereto. Sections 655.731 and 655.732 are amended to reflect this distinction.
The Department proposed to require H-1B employers to retain copies of fringe benefit plans and summary plan descriptions provided to workers, including all rules relative to eligibility and benefits, and documents showing the benefits actually provided and how the costs are shared between the workers and the employer. The Department sought suggestions as to exactly what records would demonstrate the value of benefits and satisfy the other retention requirements. The Department expressed the view that such records already are required for IRS and ERISA purposes (although noting in the paperwork analysis, at 64 FR 630, that a small percentage of employers might be required to keep records that otherwise would not be kept). In connection with the Department's query whether it might be possible to provide different “home country” benefits to employees of a multinational corporate operation in lieu of those provided to U.S. workers, the Department sought comment on what records would be necessary to demonstrate the relative value of the “home-country” benefits and the benefits provided to U.S. workers.
Many of the commenters opposed the notion of maintaining particular documentation in order to demonstrate compliance with the benefits attestation. ACIP and AILA asserted that the statute does not authorize the Department to require employers to retain documentation, suggesting that it is up to an employer to decide what documentation, if any, it should retain in order to demonstrate its compliance if it is investigated. Similarly, Senators Abraham and Graham stated: “DOL is not authorized to require employers to maintain any particular documentation.” The Department cannot, they asserted, include as part of the proposed LCA a “new attestation” that “[the employer] will develop and maintain documentation of working conditions and benefits.”
ACIP addressed particular burdens it perceived in retaining such documentation, noting, for example, that they already maintain such documentation in a location or in a format different than that contemplated by the Department. While ACIP recognized that the Department correctly stated that employers now keep documents related to their fringe benefit plans, ACIP stated that these documents may be housed in various departments and urged the Department to let the employer decide where documentation must be kept. ACIP further explained that much information is sensitive and confidential (
Intel stated that summary plan descriptions are a U.S. requirement. It noted that no other countries required the same depth and detail regarding the documentation of benefits, though stating that about one-half of its foreign subsidiaries have some benefits documentation. Intel explained that all its employees at orientation receive information regarding the company's benefits; in the U.S., it stated that employees receive a book that describes benefits, and that each year employees receive a particularized benefit portrait. Intel asserted that further documentation should not be required; it contends that a memorandum to the public access file that its employees are advised of the company's benefits at time of their hire should suffice.
Satyam questioned whether current requirements under other statutes and regulations relating to the retention of benefits documents would suffice for H-1B purposes; it suggested that the Department should not require putting specific information in the public access file. It also inquired whether it would be necessary to retain information relevant to the comparison group. ITAA said that the Interim Final Rule should recite rather than refer to IRS and PWBA requirements. AILA expressed the concern that the Department will make it a violation to fail to keep copies of benefits documents in a public access file and that requiring documentation to be kept up front would impose a huge burden. AILA recommended instead that an employer, for example, be simply required to bear the burden of proving the “equivalency” of foreign benefits in the event of an investigation.
None of the commenters took issue with the Department's statement that the documents sought are required already by IRS or ERISA.
Based on our review of the comments received on the proposal, it is apparent that the documentation requirements proposed in the NPRM have been misunderstood. With the exception of documentation specifically required to be retained in the public access file, there is no requirement that information be kept in any particular format or place, or that information be segregated by LCA, by locality, by H-1B versus U.S. workers, or in any other way from the employer's records for the entire company.
Nothing in the ACWIA suggests that documentation requirements are unauthorized or otherwise improper. To the contrary, section 212(n)(1) specifically requires employers to make the LCA “and such accompanying documents as are necessary” available for public examination. The Department believes that this provision clearly permits the Department to determine what documents must be created or retained by employers to support the LCA. The documentation that is required by the Interim Final Rule simply effectuates the more specific requirements imposed by the ACWIA. Furthermore, as the NPRM stated, the documents sought for the most part are already required by the IRS or ERISA, and would be kept by an ordinary prudent businessman in any event. Thus, the Department's ERISA regulations require at 29 CFR part 2520 that summary plan descriptions be provided to participants, and require employers to submit lengthy forms (Form 5500) to IRS with detailed information regarding their fringe benefits plans, which must be substantiated by records. In addition, EEOC rules under the ADEA, 29 CFR 1627.3(b)(2), require that every employer retain copies of all employee benefit plans, as well as copies of any seniority systems and merit systems which are in writing. Where the plan is not in writing, a memorandum fully outlining its terms and how it has been communicated to employees is required.
The Department believes that it is essential that employers, in order to establish that H-1B workers have in fact been offered the same benefits as U.S. workers (or that the special benefit requirements for certain employees of multinational firms are met), retain a copy of any document provided to employees describing the benefits offered to employees, the eligibility and participation rules, how costs are shared, etc. (
For multinational employers who choose to keep H-1B workers on “home country” benefit plans, the employer will be required to maintain evidence of the benefits provided to the worker before and after the employee went to the United States. In the event of an investigation, the employer will also be required to demonstrate that the other requirements for multinational firms are met, as appropriate—
With regard to the public access file, the employer need only maintain a summary of the benefits offered to U.S. workers in the same occupation as H-1B workers, including a statement explaining how employees are differentiated where not all employees in the occupation are offered the same benefits. If an employer has workers receiving “home country” benefits, the employer may place a simple notation to that effect in the file. The public access file need not show the proprietary details of a plan (such as a stock option or incentive distribution plan), the costs of providing the benefits, or the choices made by individual workers.
Since the regulations do not allow an employer to provide equivalent benefits as a general matter, and provide an “equitable” rather than an “equivalent” test for multinational benefits, no special documents regarding the cost of benefits are required.
On October 31, 1995, the Department republished for comment a provision of the December 20, 1994 Final Rule which articulated the Department's position regarding payment of the required wage for nonproductive time. This provision, § 655.731(c)(5), required payment of the required wage beginning no later than the first day the H-1B nonimmigrant is in the United States and continuing throughout the nonimmigrant's period of employment, including periods when the nonimmigrant is in nonproductive status due to employment-related reasons such as training or lack of assigned work. The provision did not require payment of such wages where the nonproductive status is due to reasons unrelated to employment (
Subsequently, the ACWIA, amending section 212(n)(2) of the INA, enacted an explicit requirement, consistent with the Department's regulation, providing that it is a violation of the wage attestation in section 212(n)(1)(A) for an employer to fail to pay an H-1B worker the required wage for certain nonproductive time. Like the Department's regulation, an exception was created for nonproductive status which is due to non-work-related factors such as the worker's own, fully voluntary request, or circumstances rendering the worker unable to work. Under this provision, workers designated as full-time on the petition filed with INS must be paid full-time wages, and employees designated as part-time on the petition must be paid the hours designated in the petition. This obligation is effective “after the H-1B worker has entered into employment with the employer,” but in any event, not later than 30 days after the worker's date of admission to the United States (if entering the country pursuant to the petition) or 60 days after the date the worker “becomes eligible to work for the employer” (if already in the country when the petition is approved). The statute also contains a special provision regarding academic salaries which is discussed in IV.I, below.
Congressman Smith and Senator Abraham, in their remarks after enactment of the ACWIA, noted that the most extreme examples of “benching” occur when workers are brought to the United States on the promise of a certain wage, but only receive a fraction of that wage because the employer does not have enough work for the H-1B worker. 144 Cong. Rec. E2326 (Nov. 12, 1998); 144 Cong. Rec. S12753-54 (Oct. 21, 1998). They also both agreed that employers must pay full wages and benefits during an H-1B worker's non-productive status when that status is due to the employer's decision—based
Congressman Smith and Senator Abraham agreed that the benching provision is not intended to preclude part-time H-1B employment, agreed to between the employer and the H-1B worker when the worker was hired. 144 Cong. Rec. E2326 (Nov. 12, 1998); 144 Cong. Rec. S12754 (Oct. 21, 1998). Congressman Smith stated that “the employer's misrepresentation of this material fact should be scrutinized by the Secretary” in determining whether a benching violation or misrepresentation has been made, with particular attention to whether U.S. workers would receive paid leave for nonproductive time. Senator Abraham stated that the Act is not intended to give the Secretary the authority “to reclassify an employee designated as part-time based on the worker's actual workload after the employee begins employment.”
In the NPRM, the Department proposed regulatory text which, except for the different statutory language triggering the beginning of the period in which the “benched” worker must be paid, is very similar to its current regulation. In the preamble, the Department stated that it was considering whether the H-1B worker “enters into employment” when he first makes himself available for work, such as by reporting for orientation or training, or when the worker actually begins receiving orientation or training or “otherwise performs work or comes under the control of his employer.” In commenting on the purpose of the “benching” provision, the Department observed that an H-1B nonimmigrant is not permitted to be employed by another employer while “benched” (unless another employer files a petition on behalf of the worker or the worker adjusts his or her status under the INA), and is without any legal means of support in the country. In contrast, a U.S. worker can seek other employment and would be eligible for Federal programs such as food stamps. The Department also observed that the employer, at any time, may terminate the employment of the worker, notify INS, and pay the worker's return transportation, thereby ceasing its obligations to pay for non-productive time under the H-1B program. The Department proposed that payment of wages would not be required where the nonproductive status is due to reasons unrelated to employment, unless such payment is required by INS as a condition of the worker maintaining lawful status, or is required by some other Act such as FMLA. On the other hand, the employer would not be relieved from the wage obligation for any required leave of absence, even if it includes U.S. workers.
The Department received three comments on the 1995 proposed rule on this issue. Regarding the requirement in the 1995 NPRM that the employer pay the required wage for nonproductive time beginning no later than the first day the H-1B nonimmigrant is in the United States and continuing throughout the nonimmigrant's period of employment, AILA suggested that it would be more reasonable to require the employer to begin paying on the day that the nonimmigrant actually reports to work, provided that the date is no later than 30 days after the date the nonimmigrant enters the U.S. or otherwise becomes eligible to work for the employer. AILA also suggested that an exception be made where the nonimmigrant is given an unpaid leave of absence pursuant to a uniformly-enforced company policy. Similarly, another commenter, an electronics manufacturer (Motorola), complained that in the case of a temporary reduction in force, the employer would have to retain the H-1B nonimmigrant at full salary, while U.S. workers are off the payroll.
The Department received 33 comments on the 1999 NPRM proposals addressing the ACWIA's “benching” provisions. APTA stressed the importance of the Department ensuring that H-1B nonimmigrants are aware of their wage rights for nonproductive time. Miano commented that companies should not be allowed to use the H-1B program to create stables of available employees in anticipation of openings that do not yet exist, but should be required to demonstrate that an unfilled position actually exists.
The Department agrees that it is important that H-1B nonimmigrants be aware of their rights. For this reason, § 655.734(a)(3) requires that all H-1B nonimmigrants be provided a copy of the LCA which supports their petition. In addition, the Department is planning a comprehensive educational program, as discussed in III.B, above.
AILA suggested that the Department add to its list of exceptions situations where objective economic reasons are present, such as annual retooling in the automobile industry for production model changes. ACIP and SIA urged the Department to adopt Senator Abraham's October 21, 1998 comments as examples of what is not benching,
The AFL-CIO and other commenters observed that the provision's prohibition against “benching” may lead employers to treat H-1B employees better than U.S. workers, and may create the situation where an employer retains an H-1B worker over an American worker during a lay-off to avoid paying full wages to the H-1B worker. The AFL-CIO stated its belief that U.S. workers who are laid off to avoid the benching provision may have grounds for a discrimination complaint based on nationality and immigration status and that the regulation should so indicate.
The Department believes that the statutory language is clear. The statute
The Department understands the concern expressed regarding the possibility of an employer laying off U.S. workers while continuing to pay H-1B workers because of its obligation to continue paying H-1B workers during periods of nonproductive status. Congressman Smith suggested that an employer's action in laying off U.S. workers to avoid placing H-1B workers in nonproductive status for which they must be paid would be a violation of the ACWIA. We agree, with respect to H-1B-dependent employers and willful violators, where the required showing for a prohibited displacement under section 212(n)(1)(E) or (F) is made. In addition, we note that a displacement in connection with a willful violation of the attestation requirements or a willful misrepresentation can bring enhanced penalties pursuant to section 212(n)(2)(C)(iii). Additionally, other laws provide U.S. workers with rights and remedies for an employer's discriminatory practices. The names, telephone numbers, and websites of the three federal agencies responsible for enforcement of anti-discrimination laws are set forth in IV.E.4, above.
The Department notes that—in determining whether the statutory criteria have been met, including the exception for nonpayment based on “the voluntary request of the nonimmigrant for an absence”—it will look closely at any situation where there is any question about whether the period of nonproductive time is truly voluntary. The Department will not under any circumstances consider the employer to be relieved of wage liability where there is a plant shutdown. Nor will the Department relieve an employer from liability simply because the employee agreed to periods without pay in the employment contract.
ACIP and AILA questioned the basis for the Department's proposed requirement that workers be paid where required by other statutes such as FMLA or the ADA, and that the worker's period of unpaid leave be consistent with maintenance of status under INS regulations.
The Department intended to say nothing more than that an employer must comply with other laws. The Department notes that FMLA only requires paid leave where the employer has a paid leave plan and either the employer or the employee wishes to substitute the paid leave for unpaid FMLA leave. Since the employer is required to offer H-1B workers the same benefits as U.S. workers, an employer would be required to provide H-1B workers with paid leave under any circumstances in which it is provided to U.S. workers. Enforcement of this requirement during periods where the employee voluntarily takes leave or is unable to work, is in accordance with the benefit obligations at section 212(n)(2)(C)(viii). The Department also wishes to point out, as stated by both Senator Abraham and Congressman Smith, that during periods of nonproductive time, employers are required to provide fringe benefits as well as wages.
ACIP and AILA agree with the proposal that an employer may choose to terminate an H-1B worker without violating the benching provision. ACIP also suggests that employers should not be held liable for the nonimmigrant's failure to leave the country.
The Department agrees that an employer is no longer liable for payments for nonproductive status if there has been a
Commenters also offered their views on the phrase “entered into employment,” one of the alternative triggers for an employer's obligation to pay the H-1B worker wages during periods of nonproductive status. The Department proposed that this term means the date when the H-1B worker makes himself/herself available for work,
The Department received twenty essentially identical comments on this issue from individuals who urged payment of wages to nonimmigrants immediately on their arrival to the United States. The AEA suggested that the H-1B visa holder be given a firm starting date from his/her employer and that wages start from that date. AOTA commented that “entered into employment” should mean when the nonimmigrant makes himself or herself available for work. ACIP urged the Department to look at the facts of the case, but urged as a general matter that an H-1B worker has entered into employment when he or she has reported to the worksite, has been placed on the payroll, and has completed an I-9 form; ACIP stated that H-1B workers should not be required to be paid for short periods of unpaid
The statutory language does not permit the Department to define the term “entered into employment” as the date the H-1B worker arrives in the United States. Likewise, payment of wages by the employer cannot be required before the H-1B petition is approved. On the other hand, the Department notes that the Fair Labor Standards Act itself requires that where there is an employment relationship (including where the worker has been promised employment, even if the employee is not yet on the payroll), both H-1B and U.S. workers be paid for orientation or training time required by the employer.
The Department has concluded that the term “entered into employment” means the date on or after the date of need on the H-1B petition when the worker makes himself or herself available for work or otherwise comes under the control of the employer and includes all activities thereafter, such as waiting for an assignment, going to an interview or meeting with a customer, attending orientation, studying for a licensing examination.
Several employers, attorneys and organizations also commented on the meaning of the phrase “eligible to work for the employer.” (Sixty days thereafter an H-1B nonimmigrant already in the United States legally under another visa (
ACIP and Intel requested a specific exception from the benching regulations for export control licenses. ACIP explained that an employee who awaits a license to practice his or her profession in the United States, and is subject to the ACWIA benching provisions, is distinguishable from an export control license which must be procured by an employer in a process which can take three to six months. Therefore, ACIP suggested that the rule provide that where an export license and H-1B petition were filed concurrently but the export license is not approved within the 60-day window, the employer has an additional 90 days to obtain the license before being required to rescind the H-1B petition or pay the worker.
The Department continues to believe that an employee is eligible to work on the date of need stated in the petition, provided that the petition has been processed and the employee has either received a visa or had his/her status adjusted (where the employee is in the United States). The Department sees no basis for any exception based on the export control license. Clearly the employee is legally eligible to work, but work is simply not available (even if due to circumstances beyond the employer's control). The Department agrees that a worker need not be compensated if the H-1B nonimmigrant voluntarily chooses not to make himself or herself available for work, such as where the nonimmigrant has not yet finished school or chooses to remain with another employer in order to finish a project. In each case, although the H-1B nonimmigrant is eligible to work for the employer, he or she need not be paid because of the nonimmigrant's voluntary action. The Department notes, however, that the nonimmigrant may be out of status if he or she does not report to work on the date of need.
In response to the NPRM's proposals on nonproductive pay for part-time workers, Senators Abraham and Graham and AILA objected to the regulatory language requiring workers be paid for hours that exceed the part-time number of hours on the INS petition where in practice the worker regularly works a longer schedule. AILA seeks to allow an employer which has less work than anticipated after filing an I-129 petition for full-time work, to secure approval of a new I-129 petition for part-time work, after which the employer is obliged to pay only for the part-time work.
In addition, Latour commented that the traditional 40-hour week is rapidly changing. It stated that some firms engage workers to perform a project which is completed in less than a year, and then the worker has several months off and may “moonlight” at a second job (presumably under a second petition). Latour assumed this practice would be considered “part-time,” and suggest that DOL focus on three issues in determining if there is a violation of the “benching” provision: (1) Whether the prevailing wage is being paid; (2) whether the worker is making a plausible living; (3) whether the nature of the employment schedule is usual and reasonable for the type of work.
The Department agrees that nonproductive pay is based on the number of hours per week on the H-1B petition. The LCA has therefore been amended to alert employers that their H-1B employees should not regularly work more than the number of hours shown on the petition, which may be expressed as a range of hours. If the H-1B worker normally works full-time or a greater number of hours than shown on the petition, the Department will examine the facts and circumstances and charge the employer with misrepresentation where appropriate. In light of the importance of the distinction between part-time and full-time employment for purposes of the employer's wage obligations, the Department has modified the proposed LCA form to specify that the employer is to designate that the position(s) covered will be either part-time or full-time; a combination of part-time and full-time positions cannot be entered on a single LCA form.
The Department cautions employers that time spent in training or studying to get a license is ordinarily compensable hours worked under the Fair Labor Standards Act without regard to any rules on payment for nonproductive time under the H-1B program.
The Department agrees with AILA's comment that an employer may secure approval of a new H-1B petition for part-time work, after which the employer is obliged to pay only for the part-time work. The nonproductive pay computation is based on the petition that is in effect at the time the H-1B worker is in nonproductive status. Correspondingly, before INS approves a new petition that changes the work time (part-time to full-time or vice versa), the employer will need to file a new LCA that reflects the change.
Finally, the Department disagrees that the scenario described by Latour is part-time work. Rather, it is full-time work with periods where no work is available due to actions of the employer, rather than the employee. This period of non-productive work must be paid unless the worker is temporarily unable to return to work because of alternate commitments or other factors within the control of the employee.
The ACWIA provision on non-productive time (“benching”) (discussed in IV.H, above) has a special rule permitting “a school or other education institution” to apply an established salary practice which might result in an H-1B worker appearing to be “unpaid” for some part of a calendar year.
Congressman Smith and Senator Abraham both explained that this provision “is intended to make clear that a school or other educational institution that customarily pays employees an annual salary in disbursements over fewer than 12 months may pay an H-1B worker in the same manner without violating clause (vii), provided that the H-1B worker agrees to this payment schedule in advance.” 144 Cong. Rec. E2326 (Nov. 12, 1998); 144 Cong. Rec. S1275 (Oct. 21, 1998). Congressman Smith explained that Congress “specifically limited this exemption to schools and educational institutions in recognition of their unique salary patterns.” 144 Cong. Rec. E2326. Senator Abraham, on the other hand, stated:
Because Congress is not aware of all the possible kinds of legitimate salary arrangements that employers may establish, the situation covered by subclause (V) may be merely illustrative of other kinds of legitimate salary arrangements under which an employee's rate of pay may vary. Accordingly, so long as an H-1B worker is not being singled out by such a salary arrangement, it is not Congress's intent that such a salary arrangement be treated as suspect under or violative of clause (vii) merely because there is no special provision like subclause (V) addressing it. To the contrary, if it is an arrangement that the employer routinely uses with U.S. employees as well as H-1B workers, it should be treated as presumptively not a violation of that clause.”
The one commenter on this provision, ACE, urged the Department to follow the law as written with no further regulation.
As the Department explained in the NPRM, the Department believes that this provision is directed to the common practice by which colleges, universities, and other educational institutions disburse faculty salaries over a nine-or ten-month period, with no salary payments during the summer, between academic quarters, or over some other period during which the faculty member may be away from the institution. As the statute provides, this special rule applies only to schools and other educational institutions. Any attempts to apply the more general definition of organizations to which the special prevailing wage requirements apply (see section 212(p)(1) of the INA as amended by the ACWIA) would change the statutory mandate. The Department has concluded that the NPRM properly implements the statutory mandate and will adopt the provision as proposed.
Section 212(n)(2)(C)(vi)(I) of the INA as amended by the ACWIA prohibits an employer from “requir[ing] an H-1B nonimmigrant to pay a penalty for ceasing employment with the employer prior to a date agreed to by the nonimmigrant and the employer.” This section requires the Department to “determine whether a required payment is a penalty (and not liquidated damages) pursuant to relevant State law.” As discussed in Sections L and M of the NPRM, section 212(n)(2)(C)(vi)(III) provides that the Department, after notice and opportunity for a hearing, “may impose a civil money penalty for each such violation and issue an administrative order requiring the return to the [H-1B worker] of any amount paid in violation * * *, or if [the H-1B worker] cannot be located, requiring payment of any such amount to the general fund of the Treasury.”
Senator Abraham explained:
New clause (vi)(I) * * * directs that the Secretary is to decide the question whether a required payment is a prohibited penalty as opposed to a permissible liquidated damages clause under relevant State law (
In the NPRM, the Department proposed to prohibit employers from attempting to enforce any such liquidated damages provisions without first obtaining a State court judgment ordering the H-1B worker to make such a payment. The Department explained its view that State courts were better versed than the Department to resolve State law questions posed by such matters. The Department also stated its intention to make it clear that employers cannot collect the additional $500 petition fee in the guise of liquidated damages, and noted its concern that some employers might attempt to collect liquidated damages in situations where the employers' unlawful conduct may have caused the H-1B worker to prematurely leave the employment.
A number of commenters responded to the Department's proposals on this issue. Two commenters (Latour, Padayachee) endorsed the approach taken in the NPRM. Padayachee also expressed the view that only quantifiable liquidated damages should be claimable. A third commenter (TCS), generally agreed with the Department's approach, although noting some specific objections as identified below.
The view most frequently expressed by other commenters was that the Department's approach was contrary to the intent of the ACWIA. These commenters (Senators Abraham and Graham and other Congressional commenters, ACIP, AILA, and other employers and employer representatives) viewed the proposal as inconsistent with the role intended for the Department under the ACWIA,
Congressional commenters and Network Appliance objected to any requirement that employers obtain a state court judgment where there is no disagreement between the parties. ACIP asserted: “Requiring a state court judgment to enforce any part of a contract is an unreasonable intrusion upon the ability of parties to contract and limits their ability to settle disputes through mediation, arbitration or other forms of alternative dispute resolution. * * * [A]lthough we agree that individual state courts are much better versed in this area of their law for their state than the Secretary, it clearly was not Congress' intent to impose such a high burden on employers.” TCS, on the other hand, asserted that a State court judgment should be a prerequisite to any finding of a violation by the Department, limiting its objection primarily to the Department's proposal that a State court judgment must be obtained, even where there is no dispute by the parties or they choose to resolve the dispute by settlement or otherwise.
As an alternative to the Department's proposal, ACIP, AILA, and SIA suggested that the regulation set forth examples of acceptable reimbursements and examples of prohibited penalties. AILA and TCS requested that the Department prohibit any class-based complaint or relief in the administrative proceeding,
TCS also objected to any required notice to employees that would suggest that an employer's ability to enforce a damages provision contained in the employment contract is limited, expressing concern that such notification would encourage H-1B workers to disregard their contractual obligations. AILA encouraged the Department to avoid a presumption that any “agreed damage” is an unenforceable penalty. ACIP objected to the Department's statement that it would examine “attempts by employers to collect damages where their violations of the INA [the H-1B program], or other employment law may have caused the H-1B worker to cease employment”—apparently viewing this statement as suggesting that employers might contrive to get workers to quit their employment in order to collect contract damages.
Notwithstanding the Department's continued reluctance to identify and interpret State law, the Department now concurs with the view that Congress intended the Department to determine whether a provision is liquidated damages or a penalty. For the same reason, it believes there is no merit to the suggestion by TCS that the Department cannot find that an employer has violated the ACWIA's bar against punitive damages, unless a State court first rules that a violation has occurred. Furthermore, the Department agrees that it is unnecessary to obtain a court judgment or a ruling from the Department of Labor if an employee pays voluntarily or the matter is settled. The Interim Final Rule reflects the Department's revised position on this question.
Under the Interim Final Rule, a complaint regarding an alleged attempt to enforce a penalty provision will be processed and investigated in the same way as other complaints by aggrieved parties under Subparts H and I. Thus, an individual who believes that an employer has sought to enforce a penalty provision should file a complaint with the Wage and Hour Administrator. After investigation, Wage and Hour will issue a determination in accordance with its analysis of the relevant State law, and, where violations are found, may assess a civil money penalty of $1,000 for each violation and order the return of any money paid by the worker(s) to the employer (or, if the worker(s) cannot be located, to the U.S. Treasury). A party aggrieved by Wage and Hour's determination may request a hearing before an ALJ; a party may obtain review of the ALJ's determination by the Department's Administrative Review Board.
The Department agrees with the suggestion that the regulations contain some of the general principles applied in resolving whether a provision is a permissible liquidated damages provision or an impermissible penalty. It is drawn primarily from two legal reference publications (American Jurisprudence 2d; Restatement (Second) Contracts) that provide a general discussion regarding the differences between liquidated damage and penalty provisions. However, the decisional and statutory law of a particular State, as applied to the particular circumstances relating to the employment and contract at issue—not these general principles—will control the resolution of most disputes. Furthermore, we do not address other legal remedies that may be available to the parties to recover damages for an alleged breach of the employment agreement—matters outside the Department's charge under the ACWIA. Individual State law also will determine the particular state whose law will apply to the dispute, where significant aspects of the contract and employment relationship involve different States (or nations).
The Department has also incorporated into the Interim Final Rule its proposal to examine attempts by employers to collect damages where violations of employment law may have caused the H-1B worker's premature termination of his or her employment. It is the Department's expectation that where there is a constructive discharge, or the employer has committed substantive violations of the H-1B provisions directly impacting on the employee (such as wage and benefit violations), State law would not permit the employer to collect the payment.
The Department reiterates the point it made in the NPRM that, although State law will govern the enforceability of liquidated damage provisions in agreements, an H-1B employer nevertheless must comply with the requirements of Federal statute and regulation bearing upon the H-1B employment relationship. For example, irrespective of any contractual agreement to the contrary, an employer is prohibited from directly or indirectly allocating any of the $500 LCA fee (recently increased to $1,000) or other employer expenses to the H-1B worker (see Section 212(n)(2)(C)(vi)(II)). Thus an employer is barred from directly withholding the $500 or $1,000 fee from the H-1B worker's pay or from indirectly collecting the fee through a liquidated damages provision in the contract. The Department agrees that
With regard to the suggestion that the Department issue a rule limiting the relief available to the particular worker rather than allowing a particular determination to affect other cases or other workers, the Department will apply principles of administrative collateral estoppel (the legal principle limiting consideration of a dispute to only one court action), where appropriate, just as it would for any other employment law violation.
The Department sees no merit to the proposal by TCS that an employer may be held in violation of the ACWIA' s punitive damages bar only where it fails to cure the violation within a reasonable time after a determination that an agreed damages provision is an unenforceable penalty. There is nothing in the language of the statute to suggest that penalties under this provision should be assessed differently than penalties under other provisions.
The ACWIA prohibits an employer from “requir[ing] an alien who is the subject of a [visa] petition * * * for which a fee is imposed under section 214(c)(9), to reimburse, or otherwise compensate, the employer for part or all of the cost of such fee. It is a violation for such an employer otherwise to accept such reimbursement or compensation from such an alien.” The referenced filing fee is the ACWIA-enacted filing fee applicable to H-1B petitions, which is in addition to any other fees imposed by INS for filing H-1B petitions. The fee was created by the ACWIA, in the amount of $500; the October 2000 Amendments increased the fee to $1,000. The H-1B worker is not, in any manner, to pay or absorb the cost of any of the additional fee.
Senator Abraham explained that new clause (vi)(II) “prohibits employers from requiring H-1B workers to reimburse or otherwise compensate employers for the new fee imposed under new section 214(c)(9), or to accept such reimbursement or compensation.” 144 Cong. Rec. S12752 (Oct. 21, 1998); see also, 144 Cong. Rec. E2325 (Nov. 12, 1998). Congressman Smith explained that “Congress included this provision to make it very clear that these fees are to be borne by the employer, not passed on to the workers.”
The proposed rule stated that the employee is not to be forced, encouraged, or permitted to rebate any part of the filing fee to the employer, directly or indirectly,
The Department received three comments on this issue. All the commenters agreed that the statute prohibits employers from accepting reimbursement from the H-1B worker for the filing fee.
AILA asserted that not all third-party reimbursements are prohibited (
The AFL-CIO asserted that the Department should state specifically that deductions from the alien's wages will be scrutinized to prevent subterfuge for repayment of the filing fee. The Department intends to be alert to abuse or subterfuge. The Interim Final Rule makes it clear that deductions to cover the fee are not allowed, even if the H-1B worker's pay is higher than the required wage.
A third commenter (ITAA) contended that the Department does not have the authority to prohibit the alien from paying the expenses other than the filing fee. This issue regarding other expenses is discussed at § 655.731(c)(7) and Section P.3 of the NPRM, concerning allowable deductions from the required wage.
The Department has determined that the NPRM properly implements the statutory mandate that the employer not force, encourage, or permit an employee to rebate any part of the fee back to the employer or a third party, directly or indirectly, including payments through an intermediary such as an attorney, relative or co-worker. The Interim Final Rule, therefore, embodies the proposed rule. In addition, the Interim Final Rule takes into account the increased petition filing fee, enacted by the October 2000 Amendments. The Rule prescribes that for H-1B nonimmigrants admitted on petitions filed prior to December 18, 2000, the fee “kickback” prohibited by this statutory provision is $500 (the amount of the filing fee as created by ACWIA), and that for nonimmigrants admitted on petitions filed on or subsequent to December 18, 2000, the prohibited fee “kickback” is $1,000 (the increased fee enacted by the October 2000 Amendments). In the event of an investigation, the Administrator will determine the amount of the statutorily-prohibited “kickback,” based on the filing date of the petition.
The ACWIA enforcement provision on early termination penalties and filing fee kickbacks is self-contained and provides its own sanctions authority. The Department may impose a civil monetary penalty of $1,000 for each violation, whether willful or non-willful, and may order the employer to reimburse the worker (or the Treasury, if the worker cannot be located) for any such payment. The ACWIA provision does not authorize debarment for the penalty and kickback violations.
The Department proposed to adopt the ACWIA language verbatim. Three commenters (ACIP, AILA, TCS) encouraged an express provision prohibiting any class-based relief or res judicata effect and limiting an administrative finding of penalty and corresponding remedy to the particular H-1B worker for whom the violation was found. As discussed in IV.J, above, the Department will follow traditional principles of administrative collateral estoppel, if applicable, as it does under other employment laws.
The Interim Final Rule adopts the statutory language without further elaboration.
Section 212(n)(2) of the INA as amended by the ACWIA provides specific authority to undertake “random” investigations of employers found to have previously violated their H-1B obligations and to undertake investigations of employers, in limited circumstances, based on information received from other sources that otherwise would be unable to submit complaints as aggrieved parties. The ACWIA also provides explicit employee whistleblower protections and enhanced monetary and debarment sanctions against employers who willfully violate H-1B requirements. The Department proposed to modify Subpart I of the current regulations to
Section 212(n)(2) of the INA as amended by the ACWIA, states that “nothing in this subsection shall be construed as superseding or preempting any other enforcement-related authority under this Act * * *” Senator Abraham and Congressman Smith both explained that this provision “clarifies that none of the enforcement authorities granted in subsection 212(n)(2) as amended should be construed to supersede or preempt other enforcement-related authorities the Secretary of Labor or the Attorney General may have under the Immigration and Nationality Act or any other law.” 144 Cong. Rec. S12755 (Oct. 21, 1998); 144 Cong. Rec. E2329 (Nov. 12, 1998). For this reason, and because the ACWIA did not by its terms purport to amend the Secretary's authority to investigate based upon complaints from an “aggrieved party” or the Secretary's regulations defining “aggrieved party,” the Department proposed no changes to the existing regulation defining “aggrieved party” at § 655.715. Accordingly, any changes to those regulations would be outside of the scope of this rulemaking.
Two comments were received regarding the issue of “aggrieved party.”
AILA asserted that a fair reading of ACWIA suggests that governmental entities other than DOL should be removed from the current regulatory definition of aggrieved party and should instead present “other source” claims. The U.S. Department of State stated that requiring the Department of State to submit information only as an “outside source,” with the compelling standard required by section 212(n)(2)(G), discussed below, would be a mistake, as it could limit the effect of what could be an excellent source of information, and would therefore be detrimental to the effectiveness of the H-1B category.
The Department has consistently defined “aggrieved party” to include “a government agency which has a program that is impacted by the employer's alleged non-compliance with the [LCA].” 20 CFR 655.715. The State Department is an aggrieved party, for example, because its mission is adversely affected if H-1B petitions are erroneously granted. Because of the responsibility of consular officers to reject visa applications of anyone the officer “knows or has reason to believe * * * is ineligible to receive a visa” (8 U.S.C. 1201(g); 22 CFR 41.121(a)), the State Department would be required to expend its own investigative resources to ferret out illegal practices visa by visa if it did not provide information to the Administrator. Similarly, the State Department is required to withhold the granting of a visa and exclude the alien from the U.S. if it determines that the alien will become a public charge (8 U.S.C. 1182(a)(4); 22 CFR 40.41)—a possibility that increases significantly if an employer fails to pay its H-1B worker the required wage. Many of these violations would otherwise go undetected because of the inclination of H-1B workers and their employers to hide such matters from INS and the Labor Department.
Therefore the Department has made no change in the definition of “aggrieved party.” However, the Department will not consider information contained on the LCA or associated petition(s), including the documentation supporting the petition, to be the sole basis of a complaint under section 212(n)(2)(A) while section 212(n)(2)(G) remains in effect.
Section 212(n)(2)(F) of the INA as amended by the ACWIA authorizes random investigations of employers found by the Secretary, after the ACWIA's enactment on October 21, 1998, to have committed a willful failure to meet an LCA condition or a willful misrepresentation of material fact on an LCA. The statute authorizes such random investigations over a period of five years, beginning on the date of the willful violation finding. The same special scrutiny exists where an H-1B-dependent employer or willful violator is found by the Attorney General to have willfully failed to meet its obligation under section 212(n)(1)(G)(i)(II) to offer a job to an “equally or better qualified” U.S. worker. The requirements of section 212(n)(2)(A) regarding investigation of complaints are not applicable to these random investigations.
Senator Abraham observed that this provision adds a new section 212(n)(2)(F) granting the Secretary authority to conduct random investigations of employers found after enactment of this act to have committed a willful violation or willful misrepresentation for five years following the finding. 144 Cong. Rec. S12754 (Oct. 21, 1998). Congressman Smith explained that this authority is “in addition to the existing investigative authority in section 212(n)(2)(A), as heretofore exercised by the Secretary.” 144 Cong. Rec. E2327 (Nov. 12, 1998).
The Department proposed that the date of the willful violation “finding” (which invokes the “random investigation” authority) would be the date of the agency's final determination of a violation for debarment purposes. 20 CFR 655.855(a); 59 FR 656757 (Preamble to the Final Rule). Although the NPRM proposed this interpretation, the Department sought comment on whether an earlier date, such as that of the Administrator's investigation finding or an ALJ's finding would be appropriate.
Three comments were received relating to the proposed regulation on random investigation authority.
IEEE expressed strong support for the new random enforcement provision in ACWIA and recommended that the regulations not be written or interpreted so strictly as to effectively prevent the Department from exercising this authority. Malyankar suggested directly surveying H-1B workers themselves at short intervals to determine how the program is being used and to detect possible abuses.
AILA responded that only final action finding a willful violation or willful misrepresentation should trigger its authority to conduct random investigations.
The Interim Final Rule, consistent with the AILA suggestion and the manner in which the current regulations address other Secretarial “findings,” states that a willful violation “finding” within the meaning of the statutory provision occurs when the administrative review process is completed, as described in § 655.855(b) of the regulations.
Section 212(n)(2)(G) of the INA as amended by the ACWIA authorizes the Secretary to investigate possible violations based on information provided to the Department by sources other than aggrieved parties. The Department may, upon personal certification by the Secretary, undertake an investigation under this authority when it receives specific credible information that provides reasonable cause to believe that a particular type of violation has occurred. The types of violations covered are: A willful failure to meet statutory conditions relating to wages, working conditions, a strike/lockout, and the displacement and recruitment provisions applicable to dependent employers and willful
The ACWIA limits the source who may provide information under this provision to a known source who is likely to have knowledge of the employer's practices, and specifically excludes information provided to the Secretary or to the Attorney General for purposes of securing employment of a nonimmigrant. However, the Secretary is authorized to commence an investigation under this provision if the information was obtained by the Secretary in the course of an investigation under the INA or any other Act.
To allow employers to respond to the allegations before an investigation is commenced, the ACWIA provides that the Secretary shall ordinarily provide notice to the employer concerning the allegations. However, the Secretary is authorized to withhold the source's identity and is not required to provide this notice if the Secretary determines it would interfere with efforts to secure compliance with the requirements of the H-1B program.
In explaining the purpose and effect of this provision, Senator Abraham stated:
Subsection 413(e) grants the Secretary limited additional authority with respect to other employers to investigate certain kinds of allegations of failures to comply with labor condition attestations. The Secretary's authority under current law is limited to investigating complaints concerning such violations that come from aggrieved parties. * * * The rationale for this grant of authority is to make sure that if DOL receives specific, credible information from someone outside the DOL that an employer is doing something seriously wrong but that information comes from someone who is not an aggrieved party, DOL can nevertheless pursue the lead. * * *. Thus, this provision does not authorize ‘self-directed’ or ‘self-initiated’ investigations by the Secretary.
Subsection 413(e) specifies a particular investigative process, to be used by the Secretary during the three-year period following enactment of this legislation. This process does not supplant or curtail the Secretary's existing authority in paragraph (2)(A) and does not affect the Secretary's newly-created authority under paragraph (2)(F) (‘random investigations’)* * *. This provision does not address the matter of “self-directed” or “self-initiated” investigations by the Secretary. * * * Congress’ intent in enacting this special enforcement process was to endorse the Secretary's efforts to be more vigilant and effective in the enforcement of this Act, especially given the authorization of a substantial increase in temporary foreign workers.
The Department proposed regulatory language to integrate this “other source” protocol with the Department's other enforcement procedures in a new § 655.806. The Department additionally noted in the NPRM that it was developing a form to be used in receiving information from “other sources” that would be published for public comment.
Eight comments were received regarding this provision.
Three organizations representing employees (AFL-CIO, AOTA, IEEE) supported these provisions as essential to careful monitoring of the program. IEEE stated its view that it is important that the regulations not be written or interpreted so restrictively as to effectively prevent the Department from exercising this authority. The AFL-CIO commented that the “integrated procedures” for handling complaints from other sources will make it easier for workers and job applicants to follow the status of the complaint and ensure that the Department examines complaints against an employer in full.
AILA commented that Congress, in providing DOL with the new other source enforcement authority, “repudiated and eliminated the so-called ‘self directed’ authority to initiate investigations.”
The Department has long believed that directed (no complaint) investigations are appropriate where the Department becomes aware of a possible H-1B violation, whether in the course of an investigation of another employer, an investigation under another statute, or as the result of the receipt of information from some other source. To do otherwise would place Department staff in the untenable position of being forced to ignore knowledge of potentially serious H-1B violations secured in performance of their official duties, and would be a departure from the Department's practice under the H-1A nonimmigrant nurses program. The Department is also of the view that directed investigation authority is not precluded by the Act.
However, the Department also believes that the explicit provisions of the ACWIA concerning random investigations of willful violators and investigations based on credible information from sources other than aggrieved parties allow it to conduct “directed” investigations in virtually all situations in which it might have done in the past. Consequently, at least through September 30, 2003 (the date the “other source” investigation authority sunsets), it is the Department's intention to conduct only investigations pursuant to complaints from aggrieved parties, investigations based on information from sources other than aggrieved parties (including information obtained by the Secretary during an investigation under the INA or any other Act), and random investigations of willful violators.
AILA also requested that the Department define the terms “substantial” and “pattern and practice.”
In the Department's view, it is unnecessary to define these terms in the regulations. The concept of a “substantial” violation, like “willful” violation, has been in the statute since enactment of MTINA in 1991. Furthermore, “pattern and practice” is a recognized concept in employment law which requires no definition. Finally, the determination of whether there is reason to believe there is a pattern or practice of failures or a substantial failure to meet a condition that affects multiple employees are determinations that are necessarily fact-specific, based upon the facts and circumstances of a particular case.
ACIP suggested that employers should be notified of receipt of complaints within 48 hours of receipt, and that a decision not to notify the employer should be a rare occurrence, happening only if the Department possesses clear evidence that the employer is likely to impede the investigation.
The Department anticipates that a decision not to notify an employer of the substance of allegations against it is likely to be a rare occurrence. It is also the Department's experience that many employers quickly remedy violations when brought to their attention. However, the Department does not believe it is appropriate to specify the time period in which notification will occur, or to delineate a standard in the regulations.
Kirkpatrick & Lockhart and Latour expressed their views that investigations should be initiated only on information from injured parties, while acknowledging that the scope of the provision goes beyond
Contrary to the views expressed by Kirkpatrick & Lockhart and Latour, the Department is of the view that the “other source” provision of the ACWIA was intended to extend to any source likely to have knowledge of the employer's practices or employment conditions, or of an employer's compliance with its attestation obligations. Furthermore, the Department has long considered a competitor to be an “aggrieved party,” as defined in its current regulations at § 655.715.
ITAA noted that the proposed regulations correctly state that the “other source” provisions expire on September 30, 2001, unless continued by future legislation, and suggested that the regulations should also identify other provisions that will “sunset” absent further action by Congress. The point is well taken. The Department notes that Congress in the October 2000 Amendments has, in fact, extended the effective periods for this and other provisions until 2003. The Interim Final Rule identifies the provisions that will expire on particular dates, absent their extension by future legislation.
AILA requested the opportunity to review and comment on the form that is being developed to receive “other source” information. One commenter (BRI) asserts that Department employees should not be allowed to complete forms on behalf of a “source,” suggesting that the Department's involvement might have a coercive effect.
The Department has attached its proposed form to this rule in order to obtain the views of the public, as required by the Paperwork Reduction Act. The Department notes that for the convenience of the public and of the Department, it has designed one form for use both by aggrieved parties and by other sources. This will allow the Department to make a determination as to whether the source is aggrieved, and if not, whether the statutory standard is met, after review of the information submitted. The Department disagrees with the comment by BRI, noting that the “other source” procedure is initiated by the individual who has submitted information to the Department—not vice-versa—and that the ACWIA expressly authorizes the Department to complete the form on behalf of the individual.
The Department has made other procedural changes. Sections 655.800(b), 655.806(a), and 655.807(b) of the Interim Final Rule provide that the Administrator may interview the complainant or other person supplying information to determine whether the statutory standards are met. (As a courtesy, the Administrator will notify the person providing the information if the standards have not been met, or if, after the determination by the Secretary, an investigation will be conducted.)
The section has been restructured, in accordance with the Department's reading of the statute, to provide that the employer will ordinarily be provided information regarding the allegations and given an opportunity to respond after the Administrator has made an initial determination that the statutory standards are met, rather than prior to this determination. The Administrator will then review this information in order to determine if the allegations should be referred to the Secretary for a determination as to whether an investigation should be commenced. Where the Administrator has determined that notification to the employer should be dispensed with, the Secretary will be advised in the referral; there will be no review of this determination other than by the Secretary.
Section 655.806(a)(3) (and the corresponding provision in § 655.807(i)) is clarified based on the Department's enforcement experience to provide that the time to conduct an investigation may be increased where, for reasons outside of the control of the Administrator, additional time is necessary to obtain information from the employer or other sources to determine if a violation has occurred. It has been the Department's experience that employers do not always timely provide requested information; in other circumstances Wage-Hour must obtain documentation from other agencies, such as information from INS regarding petitions filed (especially where employers have not provided requested information or where needed to verify information supplied by employers).
Section 212(n)(2)(C)(iv) of the INA as amended by the ACWIA provides explicit protection for H-1B employees who exercise their H-1B rights by complaining about a violation of the Act or cooperating with an investigation. An employer may not “intimidate, threaten, restrain, coerce, blacklist, discharge, or in any other manner discriminate against [such] employee.” “Employee” is defined to include former employees and applicants for employment. Like other whistleblower statutes, the ACWIA provision protects an employee's “internal” complaint to the employer or to any other person, as well as an employee who cooperates in an investigation or proceeding concerning an employer's compliance with the Act and these regulations. As Senator Abraham stated, this provision “essentially codifies current Department of Labor regulations concerning whistleblowers.” 144 Cong. Rec. S12752 (Oct. 21, 1998).
Section 212(n)(2)(C)(vi) directs the Department and the Attorney General to establish a process to enable an H-1B worker who files a whistleblower complaint to remain in the United States and seek other appropriate employment for a period not to exceed the maximum period provided for the H-1B classification. As noted in the NPRM, the Department and the INS are working in close cooperation to develop this process. This mechanism, however, is not within the scope of this rulemaking.
The whistleblower enforcement provision elicited five comments.
APTA, AOTA, and IEEE expressed strong support for the statute's whistleblower provisions.
AILA suggested that the ACWIA's anti-retaliation language protecting an employee from retaliation where the employee has disclosed information that the employee “reasonably believes evidences a violation” of the H-1B provisions covers only “genuine infractions of law.” It therefore suggested that the Department should amend its rule to make clear that the disclosure “must be other than a de minimis violation.”
The Department rejects this interpretation. The Department is of the view that Congress intended that the Department, in interpreting and applying this provision, should be guided by the well-developed principles that have arisen under the various whistleblower protection statutes that have been administered by this Department (see 29 CFR part 24). The Department also believes that, as in those programs, the parameters of the provision are best developed through adjudication rather than through rulemaking. The Department points out that the statutory test is whether the employer has discriminated against an employee because the employee disclosed information the employee reasonably believed evidenced a violation, or because the employee cooperated or sought to cooperate in an investigation or other proceeding. The Department believes that there is no basis for inferring an intention to protect only complaints of actual infractions of
BRI commented that the employer should not be liable for wrongful termination until found guilty by the appropriate authority. The Department agrees that an employer is not liable for wrongful termination until a final decision is issued in a Department of Labor proceeding.
Prior to the ACWIA's enactment, the INA authorized the assessment of a civil money penalty (up to $1,000 per violation) and debarment from the sponsorship of nonimmigrant aliens for employment (at least one year), among other unspecified remedies, for H-1B violations. In place of this “unitary” scheme, section 212(n)(2)(C)(i)-(iii) of the INA as amended by the ACWIA established a three-tier scheme for sanctions and remedies, depending upon the nature and severity of the violations. The first tier provides for up to $1,000 per violation and debarment for at least one year (for violations of the attestation provisions regarding a strike or lockout, or the dependent employer/willful violator provisions regarding displacement; or for substantial violation of the attestation provisions regarding notice, the details of the attestation, or the dependent employer/willful violator provisions regarding recruitment). The second tier provides for up to $5,000 per violation and debarment for at least two years (for willful violations of any of the attestation provisions, willful misrepresentation, or violation of the whistleblower provisions). The third tier provides for up to $35,000 and debarment for at least three years (for willful violations of any of the attestation provisions or willful misrepresentation, in the course of which violation or misrepresentation the employer displaced a U.S. worker within the period beginning 90 days before and ending 90 days after the filing of an H-1B petition supported by the LCA). In each of the three penalty tiers, as in the previous statutory provision, the ACWIA authorizes the imposition of “such other administrative remedies as the Secretary determines to be appropriate.”
In explaining new clause (iii), Senator Abraham explained:
The rationale for this new penalty is that there have been expressions of concern that employers are bringing in H-1B workers to replace more expensive U.S. workers whom they are laying off. Current law, however, requires employers to pay the higher of the prevailing or the actual wage to an H-1B worker. Thus, the only way an employer could profitably be systematically doing what has been suggested is by willfully violating this obligation. Otherwise, the employer would have no economic reason for preferring an H-1B worker to a U.S. worker as a potential replacement. Thus, the new penalty set out in new clause (iii) is designed to assure that there are adequate sanctions for (and hence adequate deterrence against) [willful violations of the wage provisions] by imposing a severe penalty on a willful violation of the existing wage-payment requirements in the course of which an employer ‘displaces’ a U.S. worker with an H-1B worker.
At the same time, Congress chose not to make the layoff itself a violation. The reason for this is that there are many reasons completely unconnected to the hiring of H-1B workers why an employer may decide to lay off U.S. workers. * * * Accordingly, it is important to understand that unlike the new attestation requirements imposed by the amendments to section 212(n)(1), clause (iii) of section 212(n)(2)(C) provides no new independent basis for DOL to investigate an employer's layoff decisions. The only point at which DOL can do so pursuant to clause (iii) is after it has already found that the employer has committed a willful violation of one of the pre-existing labor condition attestations.
* * * At that point, and not before, provided that there is reasonable cause to believe that an employer had also displaced a U.S. worker in the course of committing that violation, it would be proper for DOL to investigate, but only in order to ascertain what penalty should be imposed. The definitions concerning “displacement” and the like, set out in new 212(n)(3) and 212(n)(4) of the Immigration and Nationality Act, and discussed in the previous portion of this section-by-section analysis dealing with the amendments to that Act made by section 412 of this legislation, apply in this context as well.
Congressman Smith explained that new clause (iii) “clarifies that certain kinds of employer conduct constitute a violation of the prevailing wage attestation, and that other kinds of employer conduct are also prohibited in the H-1B program. * * * Congress intends that this new penalty will assure that there are adequate sanctions for (and hence adequate deterrence against) any willful violation of the existing wage-payment requirements in the course of which an employer ‘displaces’ an American worker with an H-1B worker.” 144 Cong. Rec. E2325 (Nov. 12, 1998).
These penalty provisions do not apply to the ACWIA prohibitions on penalizing an H-1B worker for his or her early cessation of employment, or on requiring an H-1B worker to reimburse the filing fee. For these violations, the Department, instead, may impose a civil money penalty of $1,000 for each violation and reimbursement of the H-1B worker (or the Treasury if the worker cannot be located). Debarment is not available as a sanction for these violations.
In the NPRM, the Department proposed that “appropriate administrative remedies” would include the imposition of curative actions such as providing notice to workers and affording “make-whole” relief for displaced workers, whistleblowers, or H-1B workers who failed to receive proper benefits or eligibility for benefits.
Senator Abraham and Congressman Smith had divergent views regarding the Secretary's authority to impose such remedies. Senator Abraham stated that these remedies “do not include an order to an employer to hire, reinstate, or give back pay to a U.S. worker as a result of any violation an employer may commit.” 144 Cong. Rec. S12752 (Oct. 21, 1998). Congressman Smith, on the other hand, stated that “Congress intends that such remedies will include ‘make-whole’ relief for affected American workers (such as, in appropriate circumstances, monetary compensation to the American worker or reinstatement to the job from which the American worker was dismissed or placement in the job to which the American worker should have been hired).” 144 Cong. Rec. E2325 (Nov. 12, 1998).
Several commenters (Senators Abraham and Graham, AILA, Network Appliance, Rubin & Dornbaum, Satyam, and White Consolidated Industries) stated that the authority to seek make-whole relief has never been asserted by the Department and is beyond the authority granted to the Department by the ACWIA. Other Congressional commenters commented that the proposed regulations on the scope of administrative remedies go far beyond what the statute contemplates, without specifically referring to make-whole relief.
After careful consideration, the Secretary remains persuaded that the plain language of the ACWIA (“the Secretary * * * may * * * impose such other administrative remedies * * * as the Secretary determines to be appropriate”) provides the Secretary the authority to award whatever relief is appropriate in the circumstances of a case, including make-whole relief. Since the Act already contains explicit authority for civil money penalties, back wages, and debarment, it seems apparent that Congress intended to allow the Secretary to order other appropriate remedies to cure the violations. In the case of displacement
ITAA, ACIP, and Intel requested that the Department define the various terms used in the statute's three-tier scheme for violations.
The Department notes that “willful failure” is currently defined in the regulations at § 655.805(b). As discussed above, it is the Department's view that it is unnecessary to define these terms further in the regulations.
SBSC sought assurances that “punitive approaches” would not be applied where there is an absence of negligence, fraud, or other blameworthy action. Intel and ACIP suggest that the Department should recognize, in effect, a good faith defense for an employer that is found in violation of the statute. Intel suggests that the Department should establish a practice akin to that provided for I-9 violations by 8 U.S.C. 1324a(b)(6). This provision stipulates that under certain circumstances “a person is considered to have complied with a requirement of this subsection notwithstanding a technical or procedural failure to meet such requirement if there was a good faith attempt to comply with this requirement.”
In the Department's view, the ACWIA does not provide a general defense in the nature of those suggested by SBSC and Intel. Entirely missing from the statute is any provision comparable to 8 U.S.C. 1324a(b)(6). At the same time, however, it should be noted that the Department is vested with some enforcement discretion and intends to exercise this discretion in accordance with the purposes served by the statute and the public interest. Where appropriate, the Department will consider the totality of the circumstances, including an employer's demonstrated good faith attempts at compliance, in fashioning remedies appropriate to the violation. In this regard, the Department notes that its regulations providing the factors to be considered in assessing the amount of civil money penalties include an employer's good faith efforts to comply, the gravity of the violations, and the violator's explanation of the violations. See § 655.810(c) of the current regulations.
Several individuals urged the imposition of heavy penalties upon violators. The AFL-CIO suggested in particular that the Department should make greater use of the debarment penalty in cases that are resolved through consent judgments or other means of settlement.
The Department, of course, will be guided by the penalty scheme established by Congress and the Department's regulatory provisions governing debarment and the assessment of penalties. The ACWIA establishes a three-tier system for debarment and civil money penalties; the remedy in a particular case will depend upon the category of the violation involved and consideration of the regulatory factors, which may enhance or reduce a civil money penalty under the particular circumstances of the violation. The Department notes that the ACWIA particularly recognizes the gravity of willful violations, as demonstrated by the longer debarment period and authority to conduct random investigations. Accordingly, the Secretary will insist on debarment in appropriate cases.
The individual commenters urged the Department to issue a regulation that informs American workers of their rights under the statute. ITAA also suggested that the regulations should address the Attorney General's role under the statute.
The Interim Final Rule lays out the obligations of H-1B-dependent employers and willful violators, including the requirements—as laid out in Sections D and E of the NPRM—that they not displace workers, that they not place H-1B workers at worksites of other employers where U.S. workers are being displaced, that they recruit U.S. workers using industry-wide procedures, and that they offer the job to any U.S. worker who applies who is equally or more qualified than the H-1B workers. The rule also explains the provision for filing complaints with the Attorney General for violations of the hiring requirement. In addition, although there is no direct remedy for U.S. workers who are not employed by dependent employers or willful violators, they may file complaints with the Department.
ITAA requested that the Department clarify enforcement regulations as they pertain to recruitment violations and specify that only H-1B-dependent employers may be liable for such violations. The Interim Final Rule has been clarified to make clear that only an H-1B-dependent employer or willful violator may be held liable for a recruitment violation. The recruitment obligations of dependent employers are discussed in much greater detail in IV.E, above.
Finally, on review of the NPRM, the Department notes that it had misconstrued the scope of the third tier of penalties. The highest level of penalties (up to $35,000 per violation and a minimum of three years of debarment) are applicable whenever any employer displaces a U.S. worker in the course of committing a willful violation of any of the attestation provisions or a willful misrepresentation—regardless of whether the employer is a dependent employer or willful violator subject to the new attestation provisions of the ACWIA. In the Department's view this construction is clear from a careful reading of the statutory language, as well as the statement describing this provision by Senator Abraham, quoted above, at 144 Cong. Rec. S12752 (Oct. 21, 1998). Application of this higher penalty will arise only where the Department determines that the employer has committed a willful violation of an attestation requirement—
In addition, the H-1B enforcement provisions contained in Subpart I of Part 655 have been restructured to make them clearer and more user-friendly. Changes have also been made to comport with the Department's enforcement experience. Specifically, as discussed in IV.M.3, above, § 655.806(a)(3) (and the corresponding provision in § 655.807(i)) clarifies that the time to conduct an investigation may be increased where, for reasons outside of the control of the Administrator, additional time is necessary to obtain information from the employer or other sources to determine if a violation has occurred. Sections 655.800(b), 655.806(a), and 655.807(b) provide that the Administrator may interview the complainant or other person supplying information to determine whether the statutory standards are met.
Various clarifying changes have been made to proposed § 655.810, setting forth the remedies available to the Administrator upon a finding of violations. As discussed in IV.G, above, the Department has determined that certain benefits are in the nature of compensation for services rendered, and have a monetary value to workers and monetary cost to employers. Therefore such benefits are more in the nature of wages than of working conditions. Paragraph (a) of § 655.810 makes it clear that payment of unpaid benefits can be ordered by the Administrator pursuant to the Administrator's authority to order payment of back wages under section 212(n)(2)(D).
In addition, the Interim Final Rule clarifies at §§ 655.810(a)(14) and 655.810(a)(16) that the Department will issue CMP assessments for violations of the public access provisions of the Act, or for regulatory violations, such as a failure to cooperate in the investigation (see § 655.800(c)). The Department will also assess CMPs for violations of the recordkeeping requirements, where the violation impedes either the ability of the Administrator to determine whether a violation of the H-1B requirements has occurred, or the ability of members of the public to have information needed to file a complaint or information regarding alleged violations of the Act. Under the existing regulations (§ 655.810(b)), CMP assessments may be imposed for any violations of the regulations.
Finally, in conformance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended (see 28 U.S.C. 2461 note), new § 655.810(f) provides for inflationary adjustments to be made, by regulation, to civil money penalties in accordance with a specified cost-of-living formula. Such adjustments will be published in the Federal Register. The amount of the penalty in a particular case will be based on the penalty in effect at the time of the violation.
The ACWIA amends the INA (Section 212(p)(1), 8 U.S.C. 1182(p)(1)) to require that the computation of the prevailing wage for employees of institutions of higher education, nonprofit entities related to or affiliated with such institutions, nonprofit research organizations, and Governmental research organizations only take into account the wages paid by such institutions and organizations in the area of employment. In addition, section 212(p)(1) provides that with respect to professional athletes as defined in section 212(a)(5)(A)(iii)(II), where the job opportunity is covered by professional sports league rules, the wage prescribed by those rules shall be considered the prevailing wage. This ACWIA directive concerning academic and research institutions affects both the H-1B program and the Permanent Labor Certification program, since both programs use the prevailing wage computation procedures set out in the Permanent program regulation at 20 CFR 656.40. The provision regarding professional athletes affects only the Permanent program.
On March 20, 1998 (63 FR 13756), the Department published a Final Rule amending its Permanent Labor Certification regulation to change the effects of the
The ACWIA provision goes considerably beyond the regulatory amendments made by the Department. The ACWIA provisions extend to all nonprofit research organizations and Governmental research organizations. In addition, the ACWIA provisions extend not only to researchers, but to all occupations in which institutions of higher education, nonprofit entities related to or affiliated with such institutions, and nonprofit research organizations or Governmental research organizations may want to employ H-1B workers or aliens immigrating for the purpose of employment.
In describing the application of this provision, Senator Abraham stated in pertinent part:
Paragraph 212(p)(1) provides that the prevailing wage level at institutions of higher education and nonprofit research institutes shall take into account only employees at such institutions. The provision separates the prevailing wage calculations between academic and research institutions and other non-profit entities and those for for-profit businesses. Higher education institutions and nonprofit research institutes conduct scientific research projects, for the benefit of the public and frequently with federal funds, and recruit highly-trained researchers with strong academic qualifications to carry out their important missions. The bill establishes in statute that wages for employees at colleges, universities, nonprofit research institutes must be calculated separately from industry.
The Department consulted with the INS on the definitional issues, since that agency has addressed similar issues with regard to the implementation of the additional fee required for petitions on behalf of H-1B nonimmigrants. The employers excluded from that fee are the same as the employers specified in the ACWIA provision concerning prevailing wage determinations. The Department worked with the INS in developing the following definitions contained in its Interim Final Rule published on November 30, 1998 (63 FR 65657), 8 CFR 214.2(h)(19)(iii)(B):
“
“
“
The INS Interim Final Rule also provides, in relevant part, that a nonprofit organization or entity is one that is qualified as a tax exempt organization under Section 501(c) (3), (4) or (6) of the Internal Revenue Code of 1986 (IRC) and has received approval as a tax exempt organization from the Internal Revenue Service, as it relates to research or educational purposes.
In the NPRM, the Department sought comments on the proper definitions of the entities to which the ACWIA prevailing wage provisions apply. The Department shared these comments with INS in the development of definitions to apply to both the INS and Departmental regulations. Comments received by INS concerning these definitions have also been considered by the Department and are included in the record of this rule.
In order to determine prevailing wages as required by the ACWIA, the Department explained that it is also necessary to determine the appropriate universe(s) to survey, and to determine the availability of relevant, reliable data. The Act sets forth the four types of organizations in two groups: educational institutions and related research organizations; and other nonprofit research organizations and Governmental research organizations. The Department stated, however, that the Act does not seem to require that prevailing wages be determined separately for those two groups, as distinguished from a universe consisting of all four groups, or surveys of the four types of organizations separately, or some other combination.
The Department explained in the NPRM that it has reason to believe that it may not be feasible to identify the different kinds of entities that might comprise educational institutions' related or affiliated nonprofit entities, or nonprofit research organizations. If those entities cannot be identified, it may not be possible to properly define the universe that should be surveyed to determine the appropriate prevailing wages. One possible alternative the Department said it would explore is the use of the prevailing wage data it currently collects in surveying institutions of higher education to determine prevailing wages for one universe consisting of institutions of higher education, affiliated or nonprofit research institutions, and nonprofit research organizations. The Department also stated that data currently being collected by the Office of Personnel Management (OPM) may be able to be used to determine prevailing wages for Federal Governmental research organizations.
The Department sought comments on the appropriate universes to use in determining prevailing wages for the entities (employers) mentioned in the ACWIA, methods to develop an appropriate universe, and the feasibility and appropriateness of the Department's using data collected from institutions of higher education and Federal Governmental research organizations to determine prevailing wages.
In the period since the NPRM was published, INS has published its Final Rule implementing the fee provisions of the ACWIA (65 FR 10678; February 29, 2000). These regulations include provisions defining organizations which are exempt from the H-1B petition filing fee. As discussed above, the ACWIA defines exempt organizations as those organizations described in section 212(p)(1). More recently, the October 2000 Amendments (Pub. L. 106-311) amended section 214(c)(9) of the INA to provide a modified definition of organizations exempt from the fee. However, this recent provision has no effect on the Department's prevailing wage obligation.
The Department received six comments on this section of the NPRM. The American Council on Education (ACE) also attached a copy of its comments on the INS Interim Final Rule. The Department also reviewed the comments received by INS pertaining to this issue.
With respect to definitions of covered entities, ACE and the Association of Independent Research Institutes (AIRI) commended the efforts of federal agencies to jointly develop regulatory definitions, and urged that all regulations that implement ACWIA sections include identical definitions, regardless of the agency source of the regulation.
AIRI stated that the proposed definitions adequately cover its member institutions—independent, nonprofit research institutions performing basic and clinical research in behavioral sciences. Similarly, the Smithsonian Institution stated that it had no problem with the definitions, stating that it believes that it qualifies as both a nonprofit research organization and as a governmental research organization.
ACE observed that the new section 212(p)(1) references only those institutions included in section 101(a) of the Higher Education Act of 1965. (ACE pointed out a typographical error in the NPRM, which referenced section 801 of the Higher Education Act rather than section 101(a).) The Higher Education Amendments of 1998 (Pub. L. No. 105-244, 112 Stat. 1581 (Oct. 7, 1998)), reauthorized the Higher Education Act and made a number of amendments. Institutions contained in sections 101(a) and (b) of the Act as amended in 1998, 20 U.S.C. 1001(a) and (b), were formerly contained in 20 U.S.C. 1201(a), which itself incorporated 20 U.S.C. 1088. ACE stated its belief that Congress inadvertently neglected to reference section 101(b) as well as section 101(a) of the Higher Education Act as amended in 1998 when it passed the ACWIA. ACE requested that the definition of an “institution of higher education” contained in the NPRM therefore be modified to include both section 101(a) and section 101(b), pending clarification by the Department of Education or a technical amendment. Unless this is done, ACE contends, some categories of higher education, such as independent medical colleges or graduate universities, might not qualify for the academic prevailing wage determination.
ACE further stated, with respect to definitions, that the NPRM did not define a “governmental research organization.” Both AILA and ACE stated that the definition should indicate that such organizations include all federal, state, and local government laboratories conducting scientific and/or scholarly research. ACE also noted that FFRDCs are operated by contractors rather than the Federal Government itself. ACE suggested that FFRDC contractors should be eligible for the academic prevailing wage if they are institutions of higher education, affiliated or related nonprofit entities, nonprofit research organizations, or governmental research organizations. ACE also recognized the problem inherent in applying the prevailing wage methodology provided for by section 212(p)(1) to for-profit contractors that operate FFRDCs. Nonetheless, ACE indicated it considered all FFRDC's to be members of the academic research community, and expressed hope that the Department will work with the ACE and the FFRDC contractor community to develop an appropriate solution to allow all academic researchers to be treated equally.
ACE also urged that the definition of “affiliated or related nonprofit entity” include, in addition, those nonprofit research hospitals which have an
Finally, ACE urged that the definition of nonprofit organizations or entities be modified so that a state or local organization exempt from tax under IRC Section 115 or under an applicable state law qualifies as a nonprofit organization or entity for purposes of the ACWIA. By doing so, ACE contends, the Department's regulation would be consistent with the INS Interim Final Rule.
The Research Corporation of the University of Hawaii (RCUH) sought clarification regarding its status. RCUH explained that it was established by the State of Hawaii as a “public instrumentality,” part of the University of Hawaii “for administrative purposes only,” and non-profit under state law but not under the IRC. It expressed the view that both DOL and INS had failed to consider the special category of public/private semi-autonomous, non-profit research organizations created by other government agencies, and that they fit within the intent of the ACWIA language regarding non-profit research organizations.
In its comments on the definition provisions of the NPRM pertaining to nonprofit research organizations and Governmental research organizations, AILA maintained that the use of the word “scientific” connotes a natural science like chemistry or physics, but not a social science like history or sociology. In addition, AILA opined that the distinction between basic research and applied research is often a distinction drawn within the natural sciences, and that the NPRM therefore implies that DOL believes that ACWIA amendments covers only nonprofit organizations engaged in natural science research. The ACWIA amendments, according to the AILA, broadly refer to research and nowhere introduce the language limiting the amendment to natural science research.
With respect to the definition of “nonprofit research organization,” AILA opined that nonprofit research organizations engaged in substantial research should be covered by the ACWIA amendments, whether or not research is the nonprofit's primary purpose. AILA suggested that the Department's definition of nonprofit research organizations include “organizations primarily engaged in research and organizations engaged in research as an essential or significant element of their operations.”
A law firm representing Texas school districts and private schools (Tindall and Foster) commented that elementary and secondary educational institutions should be exempt from the filing fee because they operate on tighter budgets than institutions of higher education and because of the critical shortage of bilingual teachers. That commenter also stated that ACWIA prevailing wage provisions should include elementary and secondary education institutions.
With regard to the comments by ACE that the definition of “(a)n institution of higher education” presented in the NPRM should be modified to include those institutions contained in section 101(b), as well as those contained in section 101(a) of the Higher Education Act, as amended by the Higher Education Amendments of 1998, the Department believes it is constrained by the unambiguous statutory language to include only those institutions in section 101(a). Furthermore, there is no indication in the legislative history as viewed in conjunction with the history of the Higher Education Amendments to indicate Congress intended to include section 101(b).
Concerning the view expressed by ACE and AILA that the definition of a “Governmental research organization” should include state and local government laboratories conducting scientific and/or scholarly research, the Department has concluded that by Congress' use of the initial capital “G” in the word “Governmental” in the statute, Congress intended to limit the provision to the Federal research organizations. In the INA, the words “Government” and “government” appear numerous times. It appears that only when a small “g” is used, does the term include state and local as well as Federal government agencies. See the discussion in C. Stine, “Out of the Shadows: Defining ‘Known to the Government’ in the Immigration Reform and Control Act of 1986,” 11 Fordham Int'l L.J. 641, 653 (Spring 1988); see also
The Department agrees with the view expressed by ACE that the status of entities contracting with FFRDCs determines the application of the special provisions of Section 212(p)(1). An academic institution operating an FFRDC, for example, would obtain the prevailing wage determination applicable to academic institutions. The determination of prevailing wages for for-profit employers that operate FFRDCs is outside the scope of the proposed rule and is not addressed in this document.
As noted above, ACE recommended that the definition of “[a]n affiliated or nonprofit entity” be modified to include other “nonprofit research hospitals” that do not meet the definition of “affiliation” in the Department's NPRM and the INS Interim Final Rule and, because their primary mission is patient care, do not meet the definition of a “nonprofit research organization.” Specifically, ACE recommended that the phrase “or through a documented understanding or affiliation” be added to the definition. The Department is of the view, however, that the definition of “affiliated or related nonprofit entity” in the NPRM and the INA Interim Final Rule is consistent with the ordinary meaning of the phrase. The definition proposed by ACE is inappropriately broad and would likely include many entities in addition to the ones about which ACE and AILA are concerned. Consequently, the Department has decided not to adopt the modification to the definition of “affiliated or nonprofit entity.”
In support of its view that the definition of a nonprofit organization or entity should be modified to include organizations exempt from tax under section 115 of the IRC (26 U.S.C. 115) or under an applicable state law as a nonprofit organization or entity, ACE stated that INS covers such organizations in its interim rule. To the contrary, the INS Interim Final Rule at 8 CFR 214.2(h)(iv) does not provide that organizations can qualify as nonprofit entities on the basis of being exempt from tax under IRC Section 115 or under an applicable state law, but instead provides at § 214.2(h)(iv):
For purposes of paragraphs (h)(19)(B) and (C) of this section, a nonprofit organization or entity is one that is qualified as a tax exempt organization under section 501(c)(3),
Based on the foregoing, this rule provides, as does INS' Interim Final Rule, that a nonprofit organization or entity is one that is qualified as a tax exempt organization under IRC section 501(c)(3), (c)(4) or (c)(6), and has received approval from the Internal Revenue Service as it relates to research or educational purposes.
As indicated above, AILA believed the Department was implying in the NPRM that the ACWIA amendments and the definitions in the NPRM pertaining to nonprofit research organizations and Governmental research organizations only applied to organizations engaged in natural science research. The definitions of basic research and applied research used in the NPRM (and the INS interim rule) are based on the definitions of “Basic Research” and “Applied Research” found on pages 4-9 of Science & Engineering Indicators—1996, published by the National Science Foundation (NSF). The materials contained in the NSF publication indicate that these definitions apply to the social and behavioral sciences (which include psychology, sociology and other social sciences), as well as the natural sciences (which include all physical, earth, atmospheric, biological and agricultural sciences). NSF staff have confirmed that the NSF definitions of basic and applied research apply to both the social and natural sciences. These definitions are used in NSF's resource surveys and are well understood by members of the research community. The Department has revised the regulation to provide that “research” includes research in the sciences, social sciences, and humanities.
The Department has also concluded that the definition of nonprofit research organization should be limited to organizations primarily engaged in research. We believe this is most consistent with the statutory phrase “research organization.” Furthermore, Senator Abraham's statement, quoted above, indicates a specific Congressional intent that the determination of the prevailing wage not include other types of nonprofit entities. In addition, since workers in all occupations for which nonprofit research entities file H-1B labor condition applications or applications for alien employment certification are potentially affected by the ACWIA prevailing wage amendments, the proposed modification could affect large numbers of H-1B workers not engaged in research or related activities, thereby increasing the possibility of an adverse effect on U.S. workers who are not engaged in research or related activities. The Department believes such a construction would not be consistent with Congressional intent.
As indicated above, AILA indicated in its comments that the groups included in prevailing wage determinations should only include “similarly employed” individuals. This issue is outside the scope of this rulemaking. However, it is the Department's position that all occupations included within an OES occupational group for which prevailing wage determinations are provided are “similarly employed.” The Department also notes that the OES does collect data for faculty members by certain disciplines in accordance with an agreement reached with the academic community.
With regard to the collection of prevailing wage data and prevailing wage determinations, ACE and AIRI strongly supported the Department's approach as the most feasible solution to meeting the ACWIA requirements. These two organizations observed that institutions of higher education, affiliated and related research institutions, and nonprofit research organizations, are comparable for prevailing wage purposes due to the similarity of their missions and employment of H-1B nonimmigrants. ACE recommended a separate category for governmental research organizations based on their understanding that pay scales and wages for government research labs and other related activities are established and predetermined by federal, state and local governments, and do not necessarily correspond to the other three groups. The Smithsonian Institution opposed this approach, and urged the Department to treat all groups as a single universe for purposes of determining prevailing wage levels. The Smithsonian also noted that the NPRM did not address the issue of how organizations in the four groups are to make their status known to the local SESA for prevailing wage determinations. Moreover, the Smithsonian recommended that the Department follow the example of the INS for I-129W, with no additional evidentiary requirements.
ACE also expressed concern regarding the Department's treatment of independent academic wage surveys, stating its view that much DOL and state and local government academic wage information is inaccurate due to inclusion of an insufficient number of academic institutions. It therefore encouraged the Department to adopt independent surveys of academic wages.
AILA argued that the division of employer groups into two distinct subparagraphs in section 212(p)(1) is indicative of Congressional intent to treat the two groups separately. AILA further commented that the groups included in the prevailing wage determination should only include similarly employed individuals, as distinguished from a group of occupations. AILA also stated that similarly employed workers should include reference to the skills and knowledge required by the position.
As noted in the NPRM, the Department does not believe that the ACWIA requires that the four types of organizations be grouped in any particular way in determining the universe for prevailing wage surveys. The Department agrees with AIRI and ACE that there are substantial similarities among employment found in colleges and universities, affiliated or
The Department also agrees with ACE that pay scales for Governmental research laboratories and other related activities are established by the Federal government and do not necessarily correspond with the three other groups mentioned above. For this reason, the Department does not contemplate including Governmental research organizations in the same universe as the other three types of organizations unless the technical problems in determining prevailing wages for the Government research organizations prove to be insurmountable. The Department intends to use data currently being collected by the Office of Personnel Management relating to Federal Government employment to determine prevailing wages for Federal Government research organizations if certain technical issues can be satisfactorily resolved. One possible alternative approach would be to use Government-wide prevailing wage data by occupation as a proxy for prevailing wages in Government research organizations.
As an interim measure, since the prevailing wage provisions were effective on enactment of the ACWIA, the Department has issued a directive that provides that prevailing wages for institutions of higher education, affiliated or nonprofit entities, nonprofit research organizations and Government organizations should be based on the wages now being collected by the Occupational Employment Statistics Program for colleges and universities. General Administrative Letter No. 2-99, (GAL 2-99) dated April 23, 1999, “Subject: Availability and Use of Occupational Employment Statistics Survey Data for Alien Labor Certification Purposes.” With regard to ACE's comments on use of independent academic wage surveys, the Department points out that its guidance in GAL 2-98, dated October 31, 1997, “Subject: Prevailing Wage Policy for Nonagricultural Immigration Programs,” allows employers to submit their own surveys, which will be used by the SESA to determine prevailing wage if they meet the required standards.
With respect to the suggestion from the law firm that elementary and secondary educational institutions should be made exempt from the filing fee and should be included within the scope of the prevailing wage provisions, the Department notes that the fee provision has been modified by the October 2000 Amendments to exempt such organizations, but no such modification was made to the prevailing wage provisions.
The Smithsonian Institution in its comments points out that one issue not addressed in the NPRM is how the categories of employers are to make their status known when they ask the local SESA for a prevailing wage determination. These provisions have been in effect since enactment of the ACWIA and the Department has not found that any additional paperwork requirements are necessary. The Department anticipates that employers which are entitled to this provision will make themselves known. If additional guidance is necessary, the Department will provide it.
The regulatory text consistent with the above discussion is incorporated in the rules for the Permanent program, 20 CFR part 656, § 656.40(c). Conforming changes are made to cross-reference this provision in § 656.40(a) and in the H-1B regulations at § 655.731(a)(2) and (3). In addition, the related provisions concerning prevailing wages for academic institutions and certain Federal research agencies at § 656.3 (definition of “Federal research agency”) and Subpart E, § 656.50, are deleted.
Finally, Section 415(b) of the ACWIA provides that these special prevailing wage provisions apply to computations made for applications filed on or after the date of enactment of the ACWIA, and to applications filed earlier “to the extent that the computation is subject to an administrative or judicial determination that is not final as of such date.” Thus, as discussed above, the amendments made to §§ 655.731(a)(2) and 656.40 are effective immediately, and apply to all cases in which the determination of the prevailing wage was not yet finally determined administratively pursuant to the regulations at Parts 655 and 656. Moreover, they are applicable to any cases pending in Federal court which were not finally decided where the prevailing wage determination was under review, as of the date of enactment.
In the NPRM, the Department re-published for further notice and comment some of the provisions of the Final Rule promulgated in December 1994 which had been proposed for comment on October 31, 1995, during the pendency of the
As explained in the NPRM, some of the provisions of the Final Rule were modified in the NPRM in light of ACWIA requirements and others in light of comments received in response to the October, 1995 proposal.
This Interim Final Rule is based on the Department's consideration of all comments received, both on the 1995 proposal and the recent NPRM.
In the NPRM, the Department dealt separately with three related matters concerning the work locations of H-1B workers and the movement of such workers to new locations. These matters, which are of significant concern to users of the H-1B program, were: the regulation concerning short-term placement of H-1B workers at worksites not covered by any LCA (NPRM Section O.1); the interpretation of the term “place of employment”/”worksite,” which affects many of the employer's LCA obligations (NPRM Section P.1); and the interface among the regulatory provisions affecting the “roving” or “floating” of H-1B workers away from their home base worksite(s) (NPRM Section P.2). Because the reactions of commenters indicated some confusion about the interplay among these three matters, they are addressed in the following combined discussion.
Regulations to authorize short-term placement of H-1B workers at places of employment outside the areas of intended employment listed on the employer's LCA(s) were first published by the Department in the December 20, 1994 Final Rule. The structure and application of this short-term placement option assumes that the new location to which an H-1B worker is sent is, in fact, a “place of employment” or “worksite” for that worker. However, as discussed below, not every physical location at which an H-1B worker's duties are
Prior to promulgation of the short-term placement option, an employer was not permitted to employ a worker at a worksite in any area unless the employer had a certified LCA covering that area of employment. Section 655.735(b)(4) of the 1994 Final Rule provided the short-term placement option, whereby “the employer's placement(s) of H-1B nonimmigrant(s) at any worksite(s) in an area of employment not listed on the employer's labor condition application(s) shall be limited to a cumulative total of ninety (90) workdays within a three-year period, beginning on the first day on which the employer placed an H-1B nonimmigrant at any worksite within such area of employment.” This provision was intended by the Department to allow employers greater flexibility in deploying their H-1B workers in response to business needs and opportunities in new areas. The Department recognized that an employer could, in any such situation, choose to file a new LCA covering the new worksite at which it intended to place H-1B workers. However, the Department sought to provide a mechanism by which an employer—desiring to move its H-1B worker(s) quickly, or contemplating a temporary operation in a new location—could be accommodated under the program without the delay or obligations involved in filing a new LCA. With that goal in mind, the regulation authorized an employer to use H-1B worker(s) at worksite(s) in an area of employment not covered by an existing LCA for a total of 90 workdays within a three-year period, without having to file a new LCA for that new area. Essentially, the Department created a limited exception to the rule that there must be an LCA covering every worksite at which an H-1B worker is employed. By creating this exception, the Department enabled employers wishing to use H-1B worker(s) to respond immediately to an opportunity or a problem in a non-LCA location without waiting to prepare and file an LCA for that location. If the situation requiring quick response by H-1B worker(s) was resolved within the regulation's “short-term” window, then a new LCA would never be required. If, on the other hand, the H-1B worker(s) would be needed at worksite(s) in the new area for a longer period of time, the employer would have ample time to prepare and file a new LCA while already using the H-1B worker(s) there. The “short-term” placement regulation set forth in the 1994 Final Rule specified that the “short-term” 90-day period would be calculated by totaling all days of work by all the employer's H-1B workers in the area of employment (covering all worksites within that area), beginning with the first workday of any H-1B worker at any worksite in that area. The 90-day period was applied separately to each new area of employment (
This provision was enjoined because of lack of appropriate notice and comment, in the NAM decision. In the meantime, the provision was published for comment in the October 31, 1995, Proposed Rule. The Department received eight comments in response to the 1995 proposed rule. All eight commenters considered the proposed “short-term” placement option to be unworkable. Several commenters (ACIP, Intel, Microsoft, Motorola, NAM) described this option as particularly burdensome to employers with many employees in positions where movement is required as a normal incident of job duties.
ACIP, Intel, and Microsoft commented that large employers, with many employees dispersed over a number of worksites, did not have the practical ability to keep track of cumulative work days for H-1B workers for every location to which the employees travel for business. Microsoft added that the “short-term” placement option effectively prevented H-1B employees from participating in joint development projects with development partners. Microsoft recommended that the rule be revised to increase the number of short-term placement days from 90 to 180 and that the regulation impose the time test on a per employee basis, rather than on a location basis; apply it to a specific worksite and not any worksite within the area of employment; and require a new LCA only when the principal place of employment is changed. Intel and ACIP recommended that the Department revise its approach to the roving employee to one which differentiates between companies that are dependent on foreign workers (employee base is comprised of more than 15 percent H-1B workers) and those that are not dependent. Such a system, Intel opined, would enable the Department to better focus its enforcement activities, while not penalizing non-dependent employers with excessive paperwork. ACIP further suggested that additional paperwork requirements should apply only when travel to another location involves “performance of services” and the H-1B worker does not remain under the “sole control” of the H-1B employer. ACIP also suggested that additional H-1B workers should be able to travel to any location for which an LCA is already on file for that employer and occupation, without any additional paperwork. AILA and NAM objected to the cumulative nature of the proposed rule and its application to an entire area, rather than to a given work site. ACIP, along with Coopers & Lybrand and CBSI, recommended that the 90-day limit should apply to one employee at one specific worksite, rather than for all of the employer's H-1B workers.
Based on the comments received in response to that 1995 publication, the 1999 NPRM proposed and requested comments on a modified version of the provision—allowing the employer to utilize the “short-term” placement option in an area of employment without an LCA until any individual H-1B worker works for 90 days at any worksite or combination of worksites in the area of employment. Under the proposal, the 90 workdays would be counted on a per-worker basis. The proposal specified that as soon as one H-1B worker has worked more than 90 workdays within that area of employment, no more work can be performed by any H-1B worker at any worksite in that area unless, and until, the employer files and ETA certifies an LCA for the area. In other words, the entire workforce and all worksites in the area of employment would be subject to a new LCA once any one H-1B worker has worked 90 days in a three-year period in the area.
Twenty commenters addressed the NPRM revisions to the short-term placement rule, including those who commented in both 1995 and 1999.
The AFL-CIO objected to the existence of a short-term placement option. It expressed the view that the Department had given H-1B employers an unnecessary and harmful “benefit of the doubt” in the proposed regulation, and that employers may use short-term placement to avoid prevailing wage and notice requirements.
Several commenters considered the rule to be complex and burdensome for employers. Seven commenters (ACIP, AILA, Cowan & Miller, Rubin & Dornbaum, White Consolidated Industries, Network Appliance, FHCRC) stated that the Department's proposal unrealistically requires the human resources staff at a large company to keep track of personnel movement from multiple divisions or offices to various customer sites around the country. Three commenters (Senators Abraham and Graham, Congressional commenters, and Oracle) stated that the Department has no authority, explicit or implicit, to impose what they believe is a complex monitoring requirement under the rule.
AILA stated that the Department's proposed modification to the rule was unresponsive to employers' fundamental concerns. AILA recommended that the regulation should have no bright-line test for the amount of time constituting temporary placement versus permanent re-assignment to the new non-LCA worksite. AILA suggested that the distinction between temporary and permanent placement should be based “on all of the facts and circumstances of the situation,” including such facts as whether the H-1B worker's “place of abode” has changed, whether the worker's business card shows the new work address, and whether the worker has a phone line and work station at the new worksite. AILA also suggested that, if a time test were to be used in the regulation, it should operate as a presumption rather than a bright-line rule (
Eight commenters expressed concerns regarding the proposed regulation's time test of 90 cumulative workdays for any H-1B worker over a three-year period. Four commenters (ACIP, AILA, Oracle and SBSC) stated that limiting an individual worker to an average of 30 workdays per year (90 days over a three-year period) in any one geographic area would severely limit a company's ability to do business in the area. Two commenters (ACIP, AILA) stated that 90 workdays over three years is unreasonable; they suggested that the regulation allow 90 days per year rather than 90 days over three years (
The Department has carefully considered the views of the AFL-CIO, which objected to the existence of the short-term placement option because of the potential for employer avoidance of H-1B program obligations applicable to the workers' new worksites. The Department shares this concern that employers' obligations be met and that U.S. workers be protected through the prevailing wage and notice requirements. However, the Department believes that it is appropriate and important to provide H-1B employers with a regulatory mechanism to accommodate legitimate business needs while, at the same time, preserving the program's protections. Without the regulation's short-term placement option, an employer would, quite literally, be unable to place any H-1B worker at any worksite that is not already covered by an LCA; the employer would have to prepare and file an LCA and await ETA certification prior to dispatching any H-1B worker(s) to such a worksite. Considering the fast pace of business—especially in industries such as information technology—the delay involved in the LCA process could handicap an employer which needed to use its H-1B workers to respond to a business need or opportunity at a non-LCA worksite. The Department considers the short-term placement option to be a reasonable means by which the employer may meet its obligations both in its business and in the H-1B program. This option allows the employer to move its H-1B worker(s) quickly, but also requires that the employer continue to comply with H-1B standards (
The Department recognizes that some employers and interest groups view the short-term placement option as impractical and burdensome. These commenters view the regulation as requiring employers to keep detailed records of placement of H-1B worker(s) to non-LCA worksite(s) in order to ensure that the workday limit is not exceeded by any worker. The Department considers it important to emphasize that the short-term placement regulation creates an option for the employer, and that no employer is required to use this provision. Further, the regulation does not impose any recordkeeping requirements on an employer that chooses to make short-term placements; the employer may utilize any appropriate means to ensure that the workday limit is not exceeded. Obviously, an employer may avoid all the perceived “burdens” of the short-term placement regulation simply by withholding its H-1B worker(s) from all non-LCA worksites until after the LCA filing process is completed and the worker(s) can be sent to the new worksites pursuant to new LCAs. Or, an employer may promptly file a new LCA when the first H-1B worker is sent to a non-LCA worksite, so that the LCA is certified well before the workday limit is reached.
The Department also reminds employers that—regardless of whether they are taking advantage of the short-term placement option—they are obliged to be vigilant in maintaining their compliance with the H-1B
The Department has carefully considered but is unable to accommodate the suggestion that the short-term placement option have no “time test” but, instead, allow a
After fully considering the commenters' views, however, the Department has concluded that the NPRM's time test—90 cumulative workdays for any one H-1B worker at any worksite or combination of worksites in one area of employment over a three-year period—should be modified to provide a more reasonable accommodation for employers' business needs. In the Interim Final Rule, the Department has maintained the worker-by-worker count of workdays (which most commenters endorsed) and has made an annual allocation, rather than a three-year accumulation, of workdays (which several commenters suggested). In addition, the Interim Final Rule incorporates the concept of short-term placement being determined, in part, based on facts such as the H-1B worker's maintenance of his/her workstation at the “home office,” as indicated by one of the commenters. Using these concepts, the Interim Final Rule provides that an employer may make a “short-term” placement or assignment of an individual H-1B worker at any worksite or combination of worksites in a non-LCA area for a total of 30 workdays in a one-year period (either the calendar year or the employer's fiscal year, whichever the employer chooses). The Rule also provides that the placement may be expanded by as much as an additional 30 workdays (thus, 60 workdays in a one-year period) if the employer is prepared to show that the worker maintains a workstation at the home office, spends a substantial amount of time at the home office, and maintains his/her “place of abode” in the area of the home office. Thus, under this regulation, the employer would be able to place an individual H-1B worker at worksite(s) in a non-LCA area for as many as 60 workdays in a one-year period, and have that placement be considered “short-term” so as not to trigger the requirements for filing and complying with a new LCA for the area of employment. Once an H-1B worker exceeds the workday limitation in a one-year period, the employer would not be permitted to continue the placement of that worker or any other H-1B worker in the same occupation in that area of employment, until one year from the beginning of the next one-year period (either the beginning of the next calendar year, or the beginning of the employer's next fiscal year) or until an LCA is in place.
The Department believes that any greater presence by an employer's workforce in an area cannot be considered short-term and should require the employer both to provide notice to the local workforce and to pay local prevailing wages. Under the Interim Final Rule, the employer may choose how to use the annual available workdays in placing an H-1B worker “temporarily” at worksite(s) in the area of employment (
The Department recognizes that some commenters have criticized the regulation as being confusing and difficult to use. Therefore, the Interim Final Rule contains clarifying changes which make the provision more user-friendly. For example, the Rule includes a definition of the “one-year period” for short-term placements (
The Department has concluded that the same standards should apply to all H-1B employers. A profusion of time tests and rules for different industries or types of employers would increase the complexity of the regulation without appreciable benefit in achieving the purposes of the program. The employer's option of timely filing an LCA for the location should alleviate any “burdens” which might otherwise argue for special rules or exceptions for certain industries.
One commenter (ACIP) suggested that the regulation should authorize employers to use a “national LCA” which would permit free movement of H-1B workers to any and all worksites around the country without the need to monitor the number of workdays at any particular worksites. According to ACIP, some employers pay a wage which is greater than the prevailing wage in any part of the country, as measured by the OES survey, the source of prevailing wage determinations issued by the Employment Service, or other published, nationwide data sources, so that their placements of H-1B workers at any worksites (whether temporarily or permanently) would have no adverse impact on local wages. Since this concept of a “national LCA” was not set forth for notice and comment in the NPRM, the Department cannot consider the matter for purposes of the Interim Final Rule. However, the Department is of the view that the concept warrants consideration. The Department, therefore, proposes it here for comment and possible inclusion in the Final Rule. In particular, the Department seeks comments as to whether such an LCA would be feasible under the statutory scheme, and also seeks information and suggestions as to how such an LCA would address each of the statutorily-prescribed attestation elements (
The Department wishes to emphasize that it considers the various components of the short-term placement rule to be non-severable. After the injunction was issued by the court in
As explained in the NPRM, the short-term placement option would be available only when an employer wants to send its H-1B worker(s) who are already in the United States under an H-1B petition supported by an LCA filed by the employer to a new worksite which is in an area of employment for which the employer does not have an LCA in effect for the occupation. After the 90-workday limit is reached by any one H-1B worker, the short-term placement option would no longer be available for any H-1B worker(s) for any worksite in that area of employment; the employer would be required to have an LCA in effect for the new area and to be in full compliance with all the LCA requirements. The NPRM explained that the short-term placement option would not be available where the H-1B worker has just arrived in the United States (or has adjusted status), in which case the worker must be placed at a place of employment listed on the LCA supporting the H-1B petition for the worker. In addition, the short-term placement option would not be available where the employer is moving its H-1B worker(s) among worksites in one or more areas covered by valid LCAs; the worker(s) would be subject to the requirements of those LCAs (
The Department received three comments addressing the specifics of the availability of the short-term placement option. ACIP commended the Department for demonstrating flexibility and for clarifying that an employer may file LCAs with multiple, open slots and use those slots for roving employees. However, ACIP sought clarification that short-term placements under the 90-workday rule do not “fill” an open LCA slot. ACIP also sought clarification of the NPRM discussion of the temporary placement of H-1B workers “overfilling” a valid LCA, particularly concerning the Department's use of enforcement discretion in such situations. ACIP suggested that, due to the lengthy processing time of LCAs, the Department should permit the employer to “overfill” an LCA. The second commenter, ITAA, stated that, in its view, the Department's past practice was to ignore “LCA overcrowding” if the employer met the notice and wage requirements for each worker at the site. ITAA observed that, under the proposed regulation, the Department stated an intention to use its enforcement authority and cite violations for “LCA overcrowding” if the number of H-1Bs “significantly exceeds” the number of openings listed on the LCA. ITAA anticipated that DOL would assess penalties for “misrepresenting a material fact” or a “substantial failure” to accurately list the information on the LCA. Therefore, ITAA requested a definition of “significant” overcrowding of the LCA. The third commenter, Latour, suggested that the Department be flexible regarding “overfilled” LCAs and consider employers' explanations in those situations where the “overfill” is significant.
As for the concerns of the commenters regarding the potential use of the short-term placement option to deal with situations of “overcrowded” or “overfilled” LCAs, the Department points out that the statute expressly requires that the employer's LCA “specif[y] the number of workers sought,” and further provides that a substantial failure to comply with this requirement can result in the assessment of a $1,000 civil money penalty and one-year debarment (8 U.S.C. 212(n)(1)(D) and 212(n)(2)(C)(i)). The number of H-1B workers taking jobs in a local labor market is a matter which Congress obviously considers to be significant, and the Department cannot set aside the statutory requirement that the employer accurately attest to this specific information. The Department is not aware of serious problems concerning overcrowded LCAs since the H-1B program's inception. Thus, the Department has used, and will continue to use, a rule of reason in assessing such situations; violations will not be cited as long as the employer is showing good faith and is taking steps to come into compliance. The determination would necessarily be made on a case-by-case basis, and it is not feasible to issue bright-line rules such as some particular degree of overcrowding which would be tolerable.
With respect to the query as to whether the use of the short-term placement option would affect the “overcrowding” determination, the Department emphasizes that where an LCA is in effect, the short-term placement option is simply not applicable. The LCA's terms—including its specification of the number of H-1B workers to be employed in the area— are binding on the employer, except with respect to an H-1B worker who moves into and out of the area without establishing a “worksite” there (see IV.O.1.b, below).
A component of the proposed short-term placement option is the requirement that employers who wish to avail themselves of this option pay travel-related expenses at a level at least equal to the rate prescribed for Federal Government employees on travel or temporary assignment, as set out in the General Services Administration (GSA) regulations. The NPRM explained that the GSA standards were used as a benchmark because the Department believes that some basic, universally available measures are needed, and because the GSA standards (based on surveys of travel costs) are appropriate for this purpose. The NPRM proposed to modify the provisions in the current Final Rule (enjoined by
The nine commenters on this proposal (ACIP, AILA, Cowan & Miller, Hammond & Associates, Intel, ITAA, Latour, Rubin & Dornbaum, White Consolidated Industries) were
The Department has fully considered these comments, as well as its own post-
The H-1B program's requirements largely focus on the H-1B worker's “place of employment” or “worksite.” That location controls the prevailing wage determination, identifies where the employer must provide notice to workers, and specifies the scope of the strike/lockout prohibition. A location which is not a worksite, on the other hand, would not trigger those requirements, even if the H-1B worker were at that location in the course of the performance of job duties. The NPRM echoed the previous rules issued under this program at § 655.715, which define “place of employment” as “the worksite or physical location where the work is actually performed.” However, the NPRM provided further interpretation of this term (as part of proposed Appendix B to Subpart H of the regulations), in an effort to better inform the users of the program and to alleviate some apparent confusion on this matter.
The proposed guidance was in response to some employers' concern that a strict or literal application of the “place of employment”/“worksite” definition could lead to absurd and/or burdensome compliance requirements with regard to the employer's obligation of providing required notice and adjusting the H-1B worker's wages to comply with different prevailing wages for work at various locations. Employers raised questions regarding whether the “worksite” definition would be applicable (thus either causing the worker's time at that location to be counted towards the 90-workday ceiling, or triggering compliance obligations under an LCA covering that location) where an H-1B worker has a business lunch at a local restaurant, or appears as a witness in a court, or attends a training seminar at an out-of-town hotel.
The NPRM, in Appendix B, proposed that the term “place of employment” or “worksite” does not include any location where either of two criteria is satisfied:
1. An H-1B worker who is stationed and regularly works at one location is temporarily at another location for a particular individual or employer-required developmental activity such as a management conference, a staff seminar, or a formal training course (other than “on-the-job-training” at a location where the employee is stationed and regularly works). For the H-1B worker participating in such activities, the location of the function would not be considered a “place of employment” or “worksite,” and such location—whether owned or controlled by the employer or by a third party—would not invoke H-1B program requirements with regard to that worker at that location. However, if the employer uses H-1B nonimmigrants as instructors or resource or support staff who continuously or regularly perform their duties at such locations, the locations would be “places of employment” or “worksites” for any such workers and, thus, would be subject to H-1B program requirements with regard to these workers.
2. The H-1B worker's presence at that location satisfies three requirements regarding the nature and duration of the worker's job functions there—
a. The nature and duration of the H-1B worker's presence at the location is due to the fact that either the H-1B worker's job is by nature peripatetic, in that the normal duties of the worker's occupation (rather than the nature or the employer's business) require frequent travel (local or non-local) from location to location, or the H-1B worker spends most of the time working at one location but occasionally travels for short periods to other locations; and
b. The H-1B worker's presence at the locations to which the worker travels from the “home” worksite is on a casual, short-term basis, which can be recurring but not excessive (
c. The H-1B worker is not at the location to perform work in an occupation in which workers are on strike or lockout.
The NPRM provided examples to illustrate these criteria, and explained that for an H-1B worker who performs work at a location which is a non-worksite (under either criterion 1 or criterion 2), the “place of employment” or “worksite” for purposes of notice, prevailing wage and working conditions is the worker's home base or regular work location. Further, the NPRM stated that, in applying this interpretation of “place of employment” or “worksite,” the Department will look carefully at any situations which appear to be contrived or abusive, such as where the H-1B worker's purported “place of employment” is a location other than where the worker spends most of his/her time, or where the purported “area of employment” does not include the location(s) where the worker spends most of his/her time.
The Department received nine comments on the NPRM “worksite”/“place of employment” proposal.
Several commenters addressed the general matter of whether the proposed Appendix B guidance was appropriate. Senators Abraham and Graham and Oracle remarked that “place of employment” is a term with a plain meaning (in their view, the location where the individual is employed); they stated that, in modern commerce, workers employed in one location frequently must travel to other locations to perform their duties and that, when they do so, they are not employed there but are merely visiting. Rapidigm, a staffing firm, requested a clearer definition of “worksite,” and asked whether the amount of time spent at a location is the only factor, regardless of the nature of the work or who has control or supervision of the worker. AILA urged that the proposed Appendix B be dropped because, in its view, it creates an absurd result and is “micromanagement” by the Department.
A number of commenters (ACIP, Intel, ITAA, Latour, Godward) expressed their approval of the Department's recognition that not all activities engaged in by a worker occur at a “worksite.” However, some commenters
The Department seeks to achieve the purposes of the Act which focuses its protections for workers on the “place of employment,” while accommodating the legitimate needs of employers using the H-1B program. The regulation, since the inception of the program, has recognized that the identification of the “place of employment” cannot be merely a matter of the employer's designation, since that approach would not serve the purposes of protecting workers' prevailing wages and other rights. Instead, the regulation identifies the “place of employment” by looking to the activities of the H-1B worker, defining “place of employment” as “the worksite or physical location where the work is actually performed” (20 CFR 655.715). However, the Department has determined that the regulation must afford reasonable flexibility so as to take into account the common practices of employers whose workers may have more than one “place of employment” over a period of time or, who may perform duties at various locations which should not, for practical reasons, be characterized as “places of employment.” In this regard, the Department shares the view of those commenters who observed that workers may legitimately “visit” locations to perform job duties without in all circumstances making those locations into “places of employment” for purposes of the H-1B program.
After consideration of all the comments, the Department has concluded that the five cumulative workdays standard is a reasonable and appropriate measure of a casual, short-term “visit” where a worker's job is by its nature peripatetic. A full, ordinary workweek of five days is, in the Department's view, a practical and reasonable measurement of a business “visit” by a worker performing job duties. Further, the worker may make recurring, short “visits” to the location, in order to perform job duties. On the other hand, the Department believes that more flexibility is appropriate for a worker who spends most of his or her time at one location but occasionally travels for short periods to other locations. Under these circumstances, the Department believes that a duration of up to 10 workdays is appropriate. The Interim Final Rule is modified accordingly.
With regard to the concern of some commenters that a five-workdays time frame would be unrealistic for developmental activities such as training and business seminars, the Department points out that there is, in fact, no time frame for developmental activities. Such activities are specifically addressed under criterion 1 rather than under criterion 2, which contains the business “visit” concept.
Finally, based on considerations of clarity and ease of use of the regulations, the Department has determined that the criteria for distinguishing between a worksite and a non-worksite should be included in the regulatory text which defines the statutory term “place of employment.” Thus, in this Interim Final Rule, this material appears in the regulation at § 655.715, rather than in Appendix B as proposed.
The statute and regulations do not permit the employment of H-1B workers as “roving” or “floating” employees for whom no particular LCA, and thus no specific set of LCA requirements, would be applicable. However, as explained in the NPRM, the Department recognizes that some employers need to move their H-1B workers from place to place in order to meet the needs of clients or to respond to business problems and opportunities. This practice of moving H-1B workers is sometimes described as having the workers “rove” or “float” from a “home base” worksite. To assist employers in understanding how this practice can be accommodated under the program, Appendix B of the NPRM proposed guidance concerning the three circumstances in which an H-1B worker could legitimately “rove” or “float” from his/her home base worksite to perform job duties at some other location. This guidance, like the other provisions of proposed Appendix B, was initially developed as interpretive guidance that the Department had planned to issue independently of the regulations.
The Department received two comments on its proposed guidance.
AILA urged that the Appendix B guidance be dropped, because it considered both the “rove”/”float” discussion and the interpretation of “worksite” to be attempts by the Department “to micromanage employers' commerce” through “peculiar workplace rules.”
ITAA requested clarification concerning the interface between the Department and INS policies concerning when an LCA for a “new” area of employment may be substituted for the “original” LCA, and whether such a substitution would require the filing of a new petition. The Department recognizes that employers need clarity regarding this matter, and will consult with the INS with the intention of providing official, coordinated guidance.
The Department has concluded, upon further review, that incorporation of the interpretive guidance in proposed Appendix B, section b, into the regulation is not necessary or appropriate at this time. The Department plans to issue separate interpretive guidance explaining the inter-relationship between the various provisions regarding employment of H-1B nonimmigrant workers outside of their home work station.
Section 212(n)(1)(A)(i)(I) of the INA as amended by the Immigration Act of 1990 (IMMACT 90) and the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991 (MTINA) requires that an employer seeking to employ H-1B nonimmigrants agree that it will pay the nonimmigrants at least the higher of the prevailing wage or the “actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question.”
In explaining the amendments to the H-1B program made by MTINA, Senator Reid explained Congress intended “specific employment to mean the specific position held by the H-1B
The Department's regulations explaining the “actual wage” requirement, as amended in 1992 and 1994, provide at § 655.731(a)(1) that in determining the actual wage, employers may take into consideration experience, qualifications, education, job responsibility and function, specialized knowledge, and other legitimate business factors. Legitimate business factors are “those that it is reasonable to conclude are necessary because they conform to recognized principles or can be demonstrated by accepted rules and standards.” The actual wage is the amount paid to other employees with substantially similar experience and qualifications with substantially the same duties and responsibilities, or if there are no such employees, the wage paid the H-1B nonimmigrant. In addition, the regulation requires that adjustments such as cost of living increases or other periodic adjustments, higher entry rate due to market conditions, or the employee moving into a more advanced level of the occupation, be provided to H-1B nonimmigrants where the employer's pay system or scale provides for such adjustments during the LCA.
The regulations further provide at § 655.731(b)(2) that the employer shall retain documentation specifying the basis it used to establish the actual wage,
The Department initially offered guidance on factors to be considered in making this determination, with examples, in the preamble to the Interim Final Rule of January 13, 1992 (57 FR 1319). This guidance, in modified form, was published as Appendix A to Subpart H in the Final Rule of December 20, 1994 (59 FR 65671). In addition to the examples set forth in the preamble to the 1992 Interim Final Rule, Appendix A provided that the employer may take into consideration “objective standards,” and must “have and document an objective system used to determine the wages of non-H-1B workers.” The Appendix further provided that the explanation of the wage system in the public access file “must be sufficiently detailed to enable a third party to apply the system to arrive at the actual wage rate computed by the employer for any H-1B nonimmigrant.” The portions of Appendix A relating to an objective wage system were enjoined by the court in NAM, for lack of prior notice and comment. In the meantime, the “Appendix A” guidance was republished for public comment in the Proposed Rule dated October 31, 1995 (60 FR 55339).
The Department republished Appendix A for further notice and comment in the 1999 NPRM, as modified to include job performance among the legitimate business factors which may be taken into consideration. The underlying regulatory provisions at §§ 655.731(a)(1), 655.731(b)(2), and 655.760(a)(3) were not open for notice and comment. The preamble explained that under Appendix A as proposed, the employer would not be required to create or to document an elaborate “step” or “grid” type pay system, or any other complex, rigid system. Rather, the employer's actual wage system could take into consideration any objective, business-related factors relating to experience, qualifications, education, specific job responsibilities and functions, job performance, specialized knowledge and other business factors. The use of any or all of the factors would be at the discretion of the employer. All factors used in the employer's actual wage system would need to be applied to H-1B nonimmigrant workers in the same, nondiscriminatory manner as the factors would be applied to U.S. workers in the occupational classification. Further, the preamble explained that the explanation of the actual wage system in the public access file must be sufficiently detailed to enable a third party to understand how the wage system would apply to a particular worker and “to derive a reasonably accurate understanding of that worker's wage.”
The Department received nine comments on proposed Appendix A in the 1995 Proposed Rule, and 15 (including two 1995 commenters) in response to the 1999 NPRM. Most 1995 and 1999 commenters viewed the Appendix guidance as inconsistent with the INA and demonstrating a lack of understanding of corporate pay systems. The comments focused on an employer's responsibilities in making the actual wage determination, what factors should be considered in making the determination, how the factors should be considered, when the factors should be considered, and the documentation required to enable a third party to apply the wage system to determine the actual wage rate.
Senators Abraham and Graham, the Congressional commenters, AILA (in 1995 and 1999 comments), FHCRC, Hammond, Network Appliance, Oracle, Rubin & Dornbaum, Sun Microsystems, the Massachusetts Institute of Technology (MIT) (1995 comment) and the National Association of Manufacturers (NAM) (1995 comment) contended that the INA does not require, nor did Congress intend, that employers be required to create and document an objective wage system for their U.S. workers to meet the requirement to pay H-1B workers no less than the greater of the actual or prevailing wage. AILA indicated further that the INA requires the actual wage to be paid only to H-1B workers, and does not dictate the wages of U.S. workers. NAM indicated that this requirement ignores the realities of how businesses establish salaries and epitomizes regulatory overreach.
Several commenters (AILA, ACIP, Kirkpatrick & Lockhart, Latour and Sun Microsystems) disagreed with the Appendix A requirement that an employer use only objective factors in determining the actual wage while others offered suggestions on factors to be considered. Kirkpatrick & Lockhart indicated that by limiting this determination to objective factors, the Department was eliminating an employer's discretion in hiring and ignoring the reality that subjective as well as objective factors are evaluated in compensating employees in the corporate world. Frost & Jacobs (1995 comment) suggested that the Department include “performance level” as a legitimate business factor in determining actual wage. ITAA agreed with the Department's addition of “job performance” as an acceptable business factor in the January 5, 1999 NPRM.
After carefully considering all the comments, the Department has concluded that Appendix A—which was created in response to employers' requests for technical guidance—has not served its intended purpose and has, instead, caused some confusion. The Department has, therefore, decided that Appendix A will not be included in the Interim Final Rule. The controlling standards for determining and documenting an employee's “actual wage” are contained in the current regulation, 20 CFR 655.731(a)(1), 655.731(b)(2), and 655.760(a)(3) (none of which were opened for comment in the NPRM). If the need arises in the future, the Department, as appropriate, will provide compliance advice or technical assistance further explaining the current regulation.
The commenters' reactions to the proposed Appendix A are based, in large part, on a lack of understanding of the fact that the Department's regulations (20 CFR 655.731(a)(1), 655.731(b)(2), and 655.760(a)(3))—which the proposed Appendix A was intended to explain and clarify—do not direct employers to develop a special corporate-wide wage system specifically to support the employment of H-1B nonimmigrants. The Department agrees with the commenters that section 212(n)(1)(A)((i)(I) of the INA does not require an employer seeking H-1B nonimmigrants to create an objective wage system for its U.S. and H-1B workers. The Department is imposing no obligation to create such a system.
Section 655.760(a)(3) requires that the factors used be legitimate business factors such as experience, qualifications, education, specific job responsibilities and functions, specialized knowledge, and job performance. The use of any or all of these factors is at the discretion of the employer. Whatever factors are used in the employer's actual wage system must be applied to H-1B nonimmigrant workers in the same, nondiscriminatory manner that they are applied to U.S. workers. Furthermore, the factors applied must relate to the statutory standard,
The Appendix A guidelines were drafted under the presumption that all U.S. businesses use wage systems to determine professional salaries that consider various legitimate business factors. The Department drafted Appendix A to limit the actual wage determination to objective legitimate business factors already being used by the employer because such factors could reasonably be used by the Department in its enforcement to compare H-1B nonimmigrant and U.S. workers in the specific employment in question. Although the Department remains concerned about the inherent difficulty in comparing the pay of workers based on subjective factors, it is persuaded that some subjective factors, such as an evaluation of performance levels, may be legitimate business factors used in setting the actual wage. However, pursuant to § 655.760(a)(3), the employer continues to be required to describe the wage system it used to determine the actual wage paid to H-1B nonimmigrants.
AILA and NAM (1995 comments) disagreed with the requirement that an employer establish the actual wage based on the “occupation” in which the H-1B nonimmigrant is employed. The commenters stated that the statute requires that H-1B workers be paid at least (the greater of the prevailing or) actual wage of those with similar qualifications and experience employed in the “specific employment” in question, a smaller group than dictated by the NPRM. Therefore AILA suggested that employers should be required to analyze which jobs are comparable for actual wage purposes, and pay the H-1B worker at least as much as the employees in those jobs.
The Department agrees that an employer must determine which workers are the subject of comparison with the H-1B worker in order to determine the actual wage required to be paid, at a minimum, to the H-1B worker. The Department also agrees that the appropriate actual wage determination comparison for H-1B nonimmigrants is to “individuals with similar experience and qualifications for the specific employment in question” and not “occupation.” However, in many circumstances this comparison can only be made if the Department is able to review the employer's compensation system for employees in the occupational category, since the employer's compensation system for other employees in the same occupation bears directly on determinations of the actual wage required to be paid for the specific employment in question.
Intel (1995 comments) and Microsoft (1995 comments) suggested that the Department allow blanket approval—as meeting actual wage requirements—for large employers with established “total compensation” wage systems which meet certain requirements such as executive bonuses and profit sharing supplements to base salary. The Department disagrees with this suggestion. The Department is charged with enforcement of the statutory requirement that the employer pay the H-1B worker(s) the higher of the actual or prevailing wage. Such enforcement includes a determination that H-1B workers have, in fact, been paid at least the actual wage paid to other workers with similar experience and qualifications for the specific employment—a determination that can only be made through an examination of the application of the employer's actual wage system. Furthermore, it would be inappropriate for the Department to make exceptions for large employers; the statute indicates no Congressional intent for differing obligations for employers depending upon the size of their workforce or the sophistication or apparent generosity of their compensation systems.
AILA (1995 comments) and NAM (1995 comments) asked how the Department can determine the actual wage in the absence of documentation by using an average (as stated in the preamble to the 1995 NPRM, 60 FR 55341), when the express language of the regulation is that the actual wage is not an average. AILA recommended that if the Department is allowed to use an average to compute the actual wage, employers should be able to use an average as well.
The Department is unable to accommodate the recommendation that employers be authorized to compute the actual wage by averaging the wages paid to employees. As stated in the preamble to the 1995 Proposed Rule, the actual wage is not an average. It reflects application of an employer's actual pay system. Use of the average by the employer would not satisfy the statutory requirement. However, the Department must have some method of determining the actual wage and calculating any back wages due H-1B workers if the employer has not documented and cannot reconstruct its actual wage system. In such circumstances, averaging the wages of non-H-1B workers may be an enforcement method of last resort. The Department would identify U.S. workers in the specific employment in question with experience and qualifications similar to the H-1B nonimmigrant and average their wages to determine the actual wage back wage assessment.
ITAA requested that an employer be permitted to set an actual wage range for a particular position, even if some H-1B workers with similar skills and education make more than others, as long as the workers are paid within the range and meet the prevailing wage requirement.
The Department agrees that an actual wage range can be used to determine compliance with the actual wage requirement, provided the employer's methodology in assigning wages within the range is based on acceptable, legitimate business factors and the methodology is applied in the same manner to H-1B nonimmigrants and U.S. workers. This should result in U.S. workers and H-1B workers with similar skills and qualifications being paid the same, where their duties and responsibilities are the same.
MIT (1995 comments), AILA (1995 comments), NAM (1995 comments), Microsoft (1995 comments), CBSI (1995 comments), Intel, and Rubin & Dornbaum objected to the requirement to update and document changes to the actual wage when the employer's pay system or scale provides for pay adjustments during the validity period of the LCA. They stated that Section 212(n)(1)(A)(i) of the INA directs that the required wage rate determination be “based on the best information available as of the time of filing the application;” thus an actual wage update should be required only at the time of filing the LCA. AILA further stated that to require constant reconsideration of the actual wage (like the prevailing wage) would be a massive burden on employers which Congress did not intend to impose.
The Department notes that the INA language referred to in the comments was included in the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991 (MTINA), Public Law 102-232, 105 Stat. 1733, and refers to the sources of wage information (“the best information available”) that an employer may use when reporting the appropriate wage on its LCA. 137 Cong. Rec. S18243 (Nov. 26, 1991) (Statement of Senator Simpson). As Senator Simpson stated, with the enactment of MTINA, employers were no longer required “to use any specific methodology to determine that the alien's wage complies with the wage requirements of the Act and may utilize a State agency determination, such as SESA, an authoritative independent source, or other legitimate sources of wage information.”
The Department's interpretation of an employer's actual wage obligation as an ongoing, dynamic obligation has been the Department's position since the inception of the H-1B program, as provided by § 655.731(a)(1) of the existing regulations (which were not open for notice and comment). The regulation explains that the actual wage obligation includes adjustments in the actual wage. In response to comments on the 1993 NPRM expressing concern that infrequent prevailing wage updates would allow an employer to use “stale” wage data, the Department stated in the preamble to the December 20, 1994 Final Rule (59 FR 65654): “[T]he “actual wage rate” has been and will continue to be a “safety net” for the H-1B nonimmigrant. Assuming the actual wage is higher than the prevailing wage and thus is the required wage rate, if an employer normally gives its employees a raise at year's end, or the employer's system provides for other adjustments, H-1B nonimmigrants must also be given the raise (consistent with employer-established criteria such as level of performance, attendance, etc.).” Conversely, if no raises, bonuses, or other updates are provided U.S. workers throughout the life of the LCA, the H-1B worker is not entitled to such payments or adjustments. The Department's interpretation furthers the Congressional intent of parity in wages and benefits for U.S. workers and H-1B nonimmigrants.
Several commenters (Microsoft (1995 comment), Motorola (1995 comment), Coopers & Lybrand (1995 comment), ITAA, Intel, ACIP, and AILA expressed strong concern over the requirement that the employer's compensation system be sufficiently detailed and documented in the public access file to enable a third party to apply the system to arrive at the actual wage. The commenters contended that such a requirement is unrealistic and imposes an impossible burden on employers. Microsoft (1995 comment) recommended that the pertinent portion of Appendix A be revised to read: “The explanation of the compensation system should be sufficiently detailed to illustrate to a third party, in the event of an enforcement action, how the employer applied the system to arrive at the actual wage for an H-1B nonimmigrant.” MIT (1995 comment) agreed with the requirement of an equitable wage system for all employees, and recommended that the wording of the provision be changed to indicate that only a general explanation of the compensation system be provided. Similarly, Intel recommended that the employer be required to provide a general description of its compensation system sufficient to enable a third party to clearly understand how wages were determined. Intel also stated that it was unclear whether the employer had to do a detailed analysis for each LCA or an overview of the compensation system to support the third party review. ACIP and AILA indicated that it was unrealistic to expect a third party to be able to calculate a particular worker's salary based on the employer's documentation of its actual wage system. ACIP was troubled that an employer could be debarred for having inadequate documentation and urged the Department to eliminate or simplify this requirement. AILA recommended that employers should make the analysis of comparable employee, decide the appropriate documentation of the analysis, and leave the rest to enforcement.
The Department is persuaded that its proposed Appendix A requirement for a public access file with the detail sufficient to enable a third party to determine the actual wage rate for an H-1B nonimmigrant is an impractical requirement for employers. The explanation of the compensation system found in the public access file must be sufficiently detailed for a third party to understand how the employer applied its pay system to arrive at the actual wage for its H-1B nonimmigrant(s). It is the Department's view that although third parties may not have the information needed to arrive at the specific actual wage for the H-1B nonimmigrant(s), the information should be sufficient to allow them to make a judgement on the potential for an actual wage problem. At a minimum, the description of the actual wage system in the public access file should identify the business-related factors that are considered and the manner in which they are implemented (
The Department sought further comment on proposed amendments to § 655.731(b)(1), the basic recordkeeping obligation to support an employer's
The proposed regulation would require employers to keep specified payroll records for H-1B workers and “for all other employees for the specific employment in question at the place of employment.” Hours worked records would be required if (1) the employee is not paid on a salary basis, (2) the actual wage is expressed as an hourly rate, or (3) with respect to H-1B workers only, the prevailing wage is expressed as an hourly rate.
The Department has made a number of accommodations already to concerns expressed regarding the requirements of this rule, particularly in regard to the circumstances in which hours worked records must be maintained. Therefore a detailed rulemaking history is useful.
The regulations currently in effect at 20 CFR 655.731(b)(1) (1993) (i.e., the regulations which are not under injunction), require that payroll records be maintained for H-1B workers and for “all other individuals with experience and qualifications similar to the H-1B nonimmigrant for the specific employment in question at the place of employment.” Hours worked records are required if the employee is paid on other than a salary basis, or if the prevailing wage or actual wage is expressed as an hourly wage.
The 1994 Final Rule (set forth in the CFR, but enjoined in NAM), like the current NPRM, required that an employer maintain payroll records for H-1B workers and for “all other employees for the specific employment in question at the place of the employment.” Upon further consideration, the Department issued a Notice of Enforcement Position (60 FR 49505, September 26, 1995) announcing that, with respect to any additional workers for whom the Final Rule may have applied recordkeeping requirements (
In the October 1995 NPRM, the Department proposed to require employers to retain records of hours worked for all employees in the same specific employment as the H-B worker if (1) the employee is not paid on a salary basis, (2) the actual wage is expressed as an hourly rate, or (3) with respect to H-1B workers only, the prevailing wage is expressed as an hourly rate. Thus unlike the rule currently in effect (or the final rule enjoined in NAM), where the actual wage is expressed as a salary but the prevailing wage is expressed as an hourly wage, hourly records would not be required for U.S. workers in the specific employment question.
The January 1999 NPRM was identical to the October 1995 proposed rule, as described above.
The Department received one comment on the proposed modification of the documentation requirements in response to the 1995 NPRM and five additional comments in response to the 1999 NPRM.
A law firm (Moon) (1995 comment) commended the Department for “revising the recordkeeping requirement to release employers from any obligation to keep records of hours worked by FLSA-exempt [U.S.] employees.” At the same time, it criticized the proposal insofar as it requires records to be kept for FLSA-exempt H-1B workers where the prevailing wage is expressed as an hourly rate—a requirement it characterized as artificial and inconsistent with traditional FLSA principles. The firm recommended that the Department instead require SESAs to issue prevailing wage determinations on a salaried basis for exempt workers.
Intel asserted that all of its H-1B workers are paid on a salary basis (and apparently are listed as such on their LCAs); Intel noted, however, that SESAs sometimes issue rates on an hourly basis and suggested that the rule be clarified so that this alone would not trigger a recordkeeping requirement. Intel and ACIP both suggested that the provision should be modified to make plain that such records need be kept only where an employer includes an hourly rate on an LCA. ACIP stated that it should not matter if the SESA lists the rate as an hourly wage. It further argued that if recordkeeping is required in all instances where a SESA issues an hourly rate, this requirement would “muddy up” the FLSA-status of the workers. Another commenter (Rubin) expressed similar concerns, stating that considerable paperwork will be generated if recordkeeping is triggered simply because a SESA, without regard to the practice within a profession, issues a rate as an hourly wage.
The Department appreciates the concern expressed by commenters that SESAs sometimes issue hourly rates for certain occupations without regard to whether workers are commonly paid on a salary basis or the FLSA-exempt nature of the job. The Department notes that while SESAs ordinarily base prevailing wage determinations on the U.S. Bureau of Labor Statistics, Occupational Employment Statistics survey (OES), which are generally expressed as an hourly wage, the SESAs will issue the prevailing wage as a salary rate upon request. In addition, to alleviate the concerns of employers and to avoid confusion with regard to the nature of the prevailing wage or recordkeeping obligations, the Department is modifying § 655.731(a)(2) to expressly authorize the employer to convert the prevailing wage determination into the form which accurately reflects the wage which it will pay (
In addition, after review, the Department has concluded that a further revision of the regulation is appropriate to remove the requirement that an employer keep hourly wage records for its full-time H-1B employees paid on a salary basis. (Employers are also directed to § 655.731(a)(4) (not revised in this rule), which explains payment of wages to employees paid on a salary basis.) The regulation continues to require employers to keep hours worked records for part-time employees, as well as hourly employees. It is the Department's view that there is no other way to ensure that employers comply with their obligation to pay these workers at least the prevailing wage for all hours worked. Otherwise, for example, an employer would be able to state on its H-1B petition that an employee will be paid 20 hours per week, pay the employee an annual salary based on 20 hours per week, keep no record of hours worked, and actually
Another commenter (Latour) agreed that it was reasonable for DOL to require the retention of the records enumerated in the proposal, which it stated were records kept by typical employers. However, it expressed concern over a perceived requirement that all the documentation must be included in the public access file. Another commenter (Baumann) expressed concern over the requirement that the records be kept beginning with the date the LCA is submitted throughout the period of employment. This commenter stated that the proposal, read in the broadest sense, requires an employer to continue to update the public access file each time a new worker is hired or a current employee receives a pay increase. He requested the Department to make clear that the wage information relating to non-H-1B workers is limited to the period before the filing of the LCA.
It appears that these commenters have misunderstood the documentation requirement as it relates to the public access file. The basic payroll information required to be maintained does not need to be included in the public access file, but rather must be available to the Wage and Hour Division in the event of an investigation. As provided in § 655.760(a), the public access file is required to contain only the wage rate to be paid the H-1B workers, an explanation of the employer's actual wage system (discussed in IV.O.3, above), and the documentation used to establish the prevailing wage.
Regulations with respect to the time periods or “windows” within which employers may file labor condition applications were first published by the Department as §§ 655.730(b) and 655.731(a)(2)(iii)(A)(
These provisions were challenged in the
On October 3, 1995, during the pendency of the
Six commenters (Intel, CBSI, Motorola, Moon, AILA, MIT) responded to the republication of these sections in the 1995 Proposed Rule. With respect to the requirement that an LCA be filed within 90 days of issuance of a SESA prevailing wage determination, all six commenters asserted that the requirement would make more work for employers and that it would slow down the LCA process. Two of these commenters (CBSI, MIT) also suggested that the validity period of a SESA determination should be 180 days, and one commenter (Moon) suggested that SESA determinations should carry no expiration date.
Three commenters (AILA, BRI, ITAA) responded to these sections as republished in the 1999 NPRM. ITAA supported the provision permitting employers to file LCAs up to six months before the beginning date of the period of intended employment as shown on the LCA, stating the proposal reflected an “appropriate balance” of the Department's and business interests. One commenter (BRI) sought clarification on whether an LCA already certified could be used any time during the validity of the LCA, assuming the prevailing wage was obtained from a source other than a SESA.
AILA objected to the 90-day validity period for the SESA prevailing wage as arbitrary and—because most U.S. employers make annual wage assessments—unrelated to the “real world wage.” Therefore, AILA asserted, requesting a prevailing wage from the SESA every 90 days places an undue burden on U.S. employers. AILA recommended that SESA prevailing wages should be valid for a period of one year, based on the observation that SESAs rely on the OES survey—an annual survey—to obtain wage information for purposes of issuing prevailing wage determinations.
The Department has considered the comments offered in response to its proposals regarding the time frames in which LCAs may be filed by employers.
Because there has been no objection to the requirement of § 655.730(b) that an LCA be filed within six months of the beginning date of intended employment, the Department will adopt that regulation as proposed.
With regard to the length of the “validity period” of SESA-issued wage determinations—the period during which the determination may be used by an employer to support a visa petition—the Department has concluded that the proposed rule can be modified to accommodate the views of the commenters, while maintaining the crucial principle that prevailing wage determinations should reflect rates which are current and accurate for the locality and the occupational classification. The Interim Final Rule therefore provides that the SESA's issuance of a prevailing wage determination shall include a specification of a validity period, which shall be not less than 90 days and not more than one year from the date of the issuance. The Department will provide guidance to the SESAs with regard to their assignment of validity periods. The Department notes that the Bureau of Labor Statistics' Occupational Employment Statistics (OES) survey and most employer-provided surveys are updated on a regular basis, and the update cycles for such surveys can be readily determined—unlike the update cycle for prevailing wages based on Service Contract Act and Davis-Bacon wage determinations or collective bargaining agreements. The Department anticipates that the validity period will be 90 days where the wage rate is based on SCA, Davis-Bacon, or collective bargaining agreements. The Department anticipates that where the wage rate is based on the OES survey or on a survey provided by the employer and found acceptable by the SESA, the validity period will ordinarily be until the next update, provided it is at least 90 days and no more than one year from the date of issuance. This will reduce the burden of employers and SESAs in filing and responding to wage determinations without any adverse affect on worker wages.
H-1B regulations specifically explaining the procedures available to employers to challenge a SESA-issued prevailing wage determination were first published by the Department in the December 1994 Final Rule. That rule provides at §§ 655.731(a)(2)(iii)(A)(
These provisions of the 1994 Final Rule were challenged in the
The Department received five comments (AILA, Frost & Jacobs, Moon, Motorola, NAM) in response to the proposals republished in 1995. All commenters opposed the proposed provisions. One commenter (Moon) asserted that the ES system was inadequate because it “handcuffs the employer by gagging the SESA from revealing information.” The commenter was alluding to the language in § 655.731(d)(2), which states that neither ETA nor the SESA may divulge any employer wage data which was collected under the promise of confidentiality. Another commenter (Frost & Jacobs) urged that any challenge of a SESA determination be required to be resolved by the ES in a timely manner (recommended 30-day time limit). Motorola was also concerned with the ability of the ES to timely respond to SESA challenges, especially in situations of H-1B visa extensions or changes in status from an F-visa to an H-1B. In these situations, this commenter noted, an employer is forced to accept the challenged wage in order to obtain the LCA so that the application may be filed with the INS in sufficient time to prevent removing an individual from the payroll for lack of work authorization.
In their comments to the 1995 proposals, NAM and AILA contended that allowing challenges to prevailing wage determinations to be made only pursuant to the ES complaint system deprives employers of their procedural due process protections. These organizations commented that a paper appeal to an administrative agency, staffed by paid employees of the very agency which determined the prevailing wage, without any rights to discovery, an examination of the evidence in support of the wage determination, or an express written decision, does not substitute for the right to be heard by an independent ALJ where all of these rights are guaranteed.
The 1999 NPRM republication of the 1995 proposals on this issue sought further comment on these proposals. AILA, the sole commenter on this issue, stated that a poll of its members revealed that the complaint process is rarely used because of failure by either the ES or SESA Prevailing Wage Unit to publicize it. AILA further criticized the complaint system as laborious, complicated and protracted, requiring handling by several different offices of the SESA and ETA. Furthermore, the opportunity for a hearing before a DOL administrative law judge is permitted only at the discretion of the ETA Regional Administrator. AILA stated that without the opportunity for meaningful review of a SESA wage determination by an impartial judicial tribunal, such as in an ALJ hearing, employers feel that a meaningful and fair review might not be possible under the ES complaint system.
The Department continues to be of the view, as stated in the preamble to the December 1994 Final Rule, that “permitting an employer to operate under a SESA prevailing wage determination and later contesting it in the course of an investigation or enforcement action is contrary to sound public policy; such a delayed disruptive challenge would have a harmful effect on U.S. and H-1B employees, competing employers, and other parties who may have received notice of and/or relied on the prevailing wage at issue.”
Challenges to SESA prevailing wage determinations prior to filing the LCA (as distinguished from challenges to prevailing wage determinations obtained by Wage and Hour) must be made through the ES complaint system by filing a complaint with the SESA. However, it should be clarified that complaints need not be initiated at the ES local office level. The complaint may be filed directly with the organization within the SESA responsible for alien labor certification prevailing wage determinations. This office is usually part of the central state office. Since the implementation of the OES program, SESA local offices are not involved in making or issuing prevailing wage determinations. See ETA's General Administrative Letter 2-98 (October 3, 1997).
Furthermore, although the regulations at § 658.421(h) provide that the offer of a hearing before an administrative law judge is discretionary, it is ETA's policy that where the employer is appealing a wage determination obtained by Wage-Hour pursuant to § 655.731(d), the ETA Regional Administrator will offer a hearing before an Administrative Law Judge in every H-1B case which is not resolved to the employer's satisfaction.
With regard to comments that challenges to a SESA prevailing wage determination should be resolved more expeditiously, the Department believes that allowing employers to initiate a challenge to the a SESA prevailing wage determination at the State rather than the local office level will simplify and reduce the time necessary to resolve those complaints. The regulations governing the ES complaint system provide that if the complaint has not been resolved within 30 working days the State office shall make a written determination. Furthermore, appeals to wage determinations obtained by Wage-Hour are filed directly with the ETA Regional Administrator, thus shortening the process.
As indicated above, one commenter to the 1995 Proposed Rule objected to the provision at § 655.731(d)(2) which
AILA has maintained that one reason that the ES complaint system has not been widely used is that it has not been widely publicized; AILA contends that despite the stated obligation at 20 CFR 658.410(d), not all State agencies have publicized the use of the ES complaint system through the prominent display of an ETA-approved ES complaint system poster in each local office. ETA operating experience indicates that a failure to display an ETA-approved ES complaint system poster in each local office is a rare occurrence. Such a failure would be a basis for a complaint about ES actions or omissions under ES regulations (20 CFR 658.401). Further, the availability of the ES complaint to challenge SESA prevailing wage determinations issued under the H-1B program is clearly set forth in the H-1B regulations.
The Department has concluded that at this time further measures to streamline the complaint process for challenging SESA prevailing wage determinations are not warranted. The basic structure of the current system appears to be adequate in view of the few complaints (about six) concerning SESA wage determinations that have been received and processed since publication of the 1994 Final Rule. On review, however, the Department has concluded that classification determinations, including specifically whether an employee is properly classified as an experienced or inexperienced worker, are properly the subject of ALJ enforcement proceedings pursuant to part 655, subpart I, since a determination of whether an employee has been appropriately classified can best be determined upon a review of the actual duties performed by the employee. Accordingly, §§ 655.731(a)(2)(iii)(A)(
The Department proposed a new Appendix B to the regulations in order to explain the Department's interpretation of several provisions of the regulations which were not themselves open for notice and comment. As the Department stated in the NPRM, these interpretations concerned questions that had arisen in its administration of the program and had been discussed with interest groups. It was the Department's view that because of the interest raised over these questions, its interpretations should be included in the regulations, either as an appendix or as regulatory text. As discussed below, on a number of the issues, the provisions have been removed from Appendix B into the regulations.
Section 655.731(c)(7)(iii)(C) of the current regulations excludes from deductions which are authorized to be taken from the required wage those deductions which are a recoupment of the employer's business expenses. Paragraph (c)(9) further explains that where the imposition of the employer's business expense(s) on the H-1B worker has the effect of reducing the employee's wages below the required wage (the prevailing wage or actual wage, whichever is greater), that will be considered an unauthorized deduction from wages. These provisions were not open for notice and comment.
The Department sought comment on proposed Appendix B, which explains its interpretation of the operation of these provisions in the context of the H-1B petition process. The NPRM notes that the filing of an LCA and the filing of an H-1B petition are legal obligations required to be performed by the employer alone (workers are not permitted to file an LCA or an H-1B petition). Therefore the NPRM provides that any costs incurred in the filing of the LCA and the H-1B petition (
The NPRM further notes that
The Department received 21 comments on this issue. All of the commenters (a number of whom were attorneys commenting only on this issue) opposed the Department's position in the NPRM. As a general matter, these commenters contended that the question of how fees are allocated between the employer and the H-1B worker is a question which should be decided between the employer and the employee.
Immigration attorneys and their professional association (AILA), as well as Senators Abraham and Graham, argued that the Department is interfering with the H-1B workers' right to counsel. AILA argued that how the H-1B petition is drafted is critical to an employee, since it may affect his or her maintenance of status and ability to stay in the United States. Another attorney (Freedman) stated that attorney representation of the alien has acted as a buffer against employer abuses, that there is no reason to imply that an
Many commenters (AILA, ACIP, and a number of attorneys, businesses and trade associations) argued, in effect, that since Congress, in drafting the ACWIA, specifically prohibited employers from imposing the additional petition fee on employees, the failure to prohibit the payment of other expenses by employees evidences an intention to allow their imposition by an employer.
ITAA and ACIP argued that the current law is directed toward prohibiting certain deductions from an employee's salary that will push it below the required wage rate. In other words, as long as the H-1B worker receives at least the required wage, it should not be a violation if the worker then spends that money for job-related matters such as fees. ACIP and ITAA stated that as a minimum, if the H-1B worker's wages minus the expenses equals or exceeds the required wage rate, there should be no violation. Latour agreed with the Department that if an H-1B worker's wage is below the prevailing wage, it would be a violation to deduct attorney fees from the worker's compensation, but stated that there is no basis for prohibiting the employer from having the employee handle the payment if the fees, when subtracted from the worker's pay, would not result in compensation less than the prevailing wage.
BRI pointed out that many employers provide payment of immigration expenses as a benefit to employees. Making it mandatory that all employers pay such fees will disadvantage those employers who offer payment of fees as a benefit. BRI also suggested that employer payment of fees would make H-1B workers more likely to take advantage of the system.
ACIP, AILA, and ITAA asserted that an employer should be able to collect these expenses as liquidated damages if the H-1B nonimmigrant prematurely terminates an employment contract. One attorney (Freedman) contended that by listing attorney fees as an employer business expense, the Department was establishing a regulatory basis for repayment as liquidated damages—thereby promoting the abusive actions for which the ACWIA was enacted.
Educational and research institutions (ACE, AIRI, University of California, Johns Hopkins) noted that the INS has determined that because ACWIA has allowed an exemption from the additional fee for H-1B petitions from higher education institutions, affiliated or related research institutions, and nonprofit and governmental research organizations, these institutions are also exempt from the requirement that employers pay the $110 filing fee. Thus, they stated that INS has determined that H-1B workers may pay the cost of the filing fee, as in the past. These commenters therefore urged that DOL accept this approach so there is no conflict between Federal agencies. The University of California also stated that an employer does not have an interest in a worker being in the United States prior to commencement of employment and therefore should not bear the cost of a change of status. Finally, three attorney commenters (Latour, Quan, and Stump) argued that forbidding legal fee payment by nonimmigrant workers will be especially onerous to small businesses, small private schools, and other financially-limited groups which are not familiar with the requirements of the H-1B program.
At the outset, the Department wants to clarify an apparent misconception by some commenters regarding the restrictions placed upon employers in assessing the employer's own business expenses to H-1B workers. An H-1B employer is prohibited from imposing its business expenses on the H-1B worker—including attorney fees and other expenses associated with the filing of an LCA and H-1B petition—only to the extent that the assessment would reduce the H-1B worker's pay below the required wage,
“Actual wage” is explained at § 655.731(a)(1) of the existing regulations as “the wage rate paid by the employer to all other individuals with the similar experience and qualifications for the specific employment in question.” The regulation continues by noting that “[w]here no such other employees exist at the place of employment, the actual wage shall be the wage paid to the H-1B nonimmigrant by the employer.”
The Department also wishes to emphasize, as provided in § 655.731(c)(9) of the existing regulations (renumbered in the Interim Final Rule as § 655.731(c)(12)), that where a worker is required to pay an expense, it is in effect a deduction in wages which is prohibited if it has the effect of reducing an employee's pay (after subtracting the amount of the expense) below the required wage (
The Interim Final Rule continues to provide that any expenses directly related to the filing of the LCA and the H-1B petition are a business expense that may not be paid by the H-1B worker if such payment would reduce his or her wage below the required wage. These expenses are the responsibility of the employer regardless of whether the INS filing is to bring an H-1B nonimmigrant into the United States, or to amend, change, or extend an H-1B nonimmigrant's status. As stated in the NPRM, the LCA application and H-1B petition, by law, may only be filed by the H-1B employer. The employer is not required to seek legal representation in completing and filing an LCA or H-1B petition, but once it utilizes the services of an attorney for this purpose, it has incurred an expense associated with the preparation of documents for which it has legal responsibility.
H-1B nonimmigrants are permitted to pay the expenses of functions which by law are required to be performed by the nonimmigrant, such as translation fees and other costs related to the visa application and processing. The Department also recognizes that there may be situations where an H-1B worker receives legal advice that is personal to the worker. Thus, we did not intend to imply that an H-1B worker may never hire an attorney in connection with his or her employment in the United States. While the illustrative expenses (translation fees and other costs relating to the visa application) were not denominated in the NPRM as legal expenses, if they were provided through an attorney these costs and associated attorney fees would be personal to the worker and may be paid by the worker, rather than expenses that would have to borne by the employer. Similarly, any costs associated with the H-1B worker's receipt of legal services he or she contracts to receive relative to obtaining visas for the worker's family, and the various legal obligations of the worker under the laws of the U.S. and the country of origin that might arise in connection with residence and employment in the U.S., are not ordinarily the employer's business expenses. As such, they appropriately may be borne by the worker.
An employer, however, may not seek to pass its legal costs associated with the
Contrary to the view of many commenters, the Department does not read the ACWIA's proscription against an employer's assessment of the additional petition filing fee on the H-1B worker as evincing an intention that an employer may assess any other expenses against the worker. Neither the language of this provision, nor its place within the statute's larger context, allows a conclusion that Congress intended this provision to affect the ability of an employer to assess other costs to H-1B workers. The ACWIA prohibition against charging the H-1B worker for the filing fee is much more sweeping than the regulatory provision at issue. The ACWIA prohibits an employer from charging the fee, even where there would not be a resulting wage violation, and even as a part of the liquidated damages an employer may contract with a worker to pay for early termination.
The Department concurs with the comments that the ACWIA does not preclude the recovery of expenses in connection with the filing of the LCA and H-1B petition as liquidated damages. It is the Department's view that there is no basis for distinguishing attorney fees and other expenses in connection with these filings from other expenses which may be permitted, under state law, as liquidated damages. However, as set forth in IV.K, above, the Interim Final Rule provides that the $500/$1,000 filing fee may not be collected through liquidated damages.
As stated above, education and research groups stated that INS has taken the position that qualified education and research organizations who are exempt from paying the additional filing fee will not be required to pay the separate $110 petition filing fee themselves, but rather INS will accept payment made by the H-1B workers. The Department does not believe that this statement is inconsistent with its position, since, as discussed above, employers are not prohibited from requiring workers to make these payments where the workers are paid above the required wage. To the extent these commenters may be suggesting that the Department should create an exception for academic and research institutions, the Department sees no basis for this suggestion. The status of these institutions as exempt from the additional filing fee does not change the fact that they are employers who, as such, are required to file the LCA and the H-1B petition, and to pay the attendant costs if payment by the H-1B worker would bring the worker's wages below the required wage.
In the Interim Final Rule, the discussion of expenses of the H-1B program which the employer may not impose on H-1B workers has been removed from Appendix B and incorporated in the regulations at § 655.731(c)(9)(ii) and (iii).
Under § 655.731(a)(2)(i) and (iii)(A) of the regulations, if there is an applicable wage determination issued under the McNamara-O'Hara Service Contract Act (SCA) for the occupational classification in the area of employment, that SCA wage determination is considered by the Department to constitute the prevailing wage for that occupation in that area. This use of the SCA wage determination applies regardless of whether the employer is an SCA contractor, and regardless of whether the workers will be employed on an SCA contract. In the NPRM, the Department addressed questions that have arisen concerning application of the SCA wage rate for computer occupations where the wage rate on the wage determination is $27.63, and application of the SCA wage rate where the employer is of the view that the workers are exempt from the SCA.
The NPRM provided at Appendix B, section d, that where an SCA wage determination for an occupational classification in the computer industry states a rate of $27.63, that rate will not be issued by the SESA and may not be used by the employer as the prevailing wage. That rate does not constitute a statement of the prevailing wage; it is the highest wage that any worker in a skilled computer occupation is required to be paid under the SCA. Under that statute, workers are exempt from the Act's requirements if they earn more than $27.63 per hour, regardless of whether they are paid on a salary basis an hourly rate. (See 29 CFR 4.156; 541.3). In such a case, the SESA will use the OES survey—rather than the SCA rate—and the employer, if it chooses not to obtain a prevailing wage rate from the SESA, will need to consult the OES survey or another source for wage information.
Proposed Appendix B also provided that the question of whether the nonimmigrant worker(s) who will be employed will be exempt or non-exempt from the SCA is irrelevant to use of the SCA wage determination to access the prevailing wage. Therefore, in issuing the SCA wage rate as the prevailing wage determination, the SESA will not consider questions of employee exemption, and, in an enforcement action, the Department will consider the SCA wage rate to be the prevailing wage without regard to whether any particular H-1B employee(s) would be exempt from the SCA if employed under an SCA contract.
The Department received six comments on this issue. ACIP expressed confusion over the Department's singling out the SCA wage rate for computer operations, and urged reconsideration of this position before issuing interim final regulations. AILA stated that the Department's proposal is inconsistent because of this singling out of the SCA rate for computer operations, and contended, along with two other commenters (Rubin & Dornbaum, Cowan & Miller), that by designating the SCA wage as the prevailing wage, the Department virtually requires employers to use SESA determinations instead of the other wage sources permitted by law. Finally, AILA questioned the proposal to disregard the exempt status of the H-1B workers, contending that this is inconsistent with the practice used in the Permanent Program, as recognized in the Technical Assistance Guide at page 114. Network Appliance and FHCRC objected to application of the SCA wage rate where the employer is not subject to that Act.
The significant role in the regulations of SCA determinations of the prevailing wage is founded in the legislative history of the H-1B program in IMMACT 90, which evidences Congressional intent that prevailing wage determinations be made as in the Permanent Alien Labor Certification (immigrant worker) Program, 20 CFR 656.40. See Conf. Rep. No. 101-955, 101st Cong., 2d Sess. 122 (1990), 1990 U.S.C.C.A.N. 6787. In any event, the general provisions governing use of wage rates in SCA wage determinations set forth in the regulations at § 655.731(a)(2)(i) and (iii)(A) were not published for comment. Proposed Appendix B, section d, addressed only two specific questions: application of the SCA wage rate to skilled workers in computer occupations, and the broader question of the relevance of whether workers would be exempt from the SCA.
The Department continues to be of the view that SCA wage determinations cannot properly be used for computer occupations where the wage is stated as $27.63 per hour. As explained above, this wage rate is not in any sense a statement of the prevailing wage for the occupation. Rather, this rate is instead a “cap” on the SCA-required wage that results from an SCA statutory provision which has no application in the H-1B program. Allowing the use of the $27.63 rate as the prevailing wage would therefore undermine the statutory requirement that workers be paid at least the prevailing wage, and create an economic incentive to utilize H-1B workers rather than U.S. workers. Furthermore, computer occupations are treated differently than other occupations with regard to the use of SCA rates because these occupations are treated uniquely under the SCA. Only for skilled computer occupations is there a cap on the wage set under the SCA, by virtue of a Congressional enactment exempting workers who are paid more than $27.63 per hour from the Fair Labor Standards Act, and therefore from the SCA. See 41 U.S.C. 357(b); Pub. L. 101-583, § 2, Nov. 15, 1990, 104 Stat. 2871, as amended by Pub. L. 104-188, 110 Stat. 1929.
For several reasons, the Department also continues to be of the view that the potential SCA-exempt status of the nonimmigrant workers who will be employed under the LCA is irrelevant. SCA wage determinations (with the exception of computer professionals, as discussed above) are the Department's statement of the prevailing wage of the occupations listed, and are made without regard to the exempt status of workers surveyed. Furthermore, exemption status cannot be determined in advance, based on an employee's occupation. Rather, determinations are made only on examination of the actual duties performed by individual employees and on an examination of the manner in which the employees are paid. With the exception of computer professionals, doctors and attorneys, SCA-exempt employees must be paid either on a salary or fee basis. See 29 CFR part 541. The Department notes that this interpretation is not in fact inconsistent with the provisions of the Permanent Program's Technical Assistance Guide, which requires use of the SCA wage determination “[i]f the job opportunity is in an occupation and a geographic area for which DOL has made a wage determination” under the SCA. Page 114 of the Guide simply points out that executive, administrative, and professional employees are exempt from the SCA, but does not state that the exemption is intended to limit the application of the SCA wage determination in determining the prevailing wage under the permanent program. In any event, it is the Department's intention to conform its prevailing wage determinations under the Permanent Program to the interpretations in this Rule, as set forth in § 655.731(a)(2)(i)(B) (rather than in Appendix B, as proposed).
The regulations at § 655.731(a)(2) require that the prevailing wage be determined for the occupational classification in the area of intended employment. “Area of intended employment” in turn is defined to include “the area within normal commuting distance” of the place where the H-1B worker will be employed. This definition further provides that “[i]f the place of employment is within a Metropolitan Statistical Area (MSA), any place within the MSA is deemed to be within normal commuting distance of the place of employment.”
Proposed Appendix B, section e, further explained that in computing prevailing wages for an “area of intended employment,” the Department will consider all locations within either an MSA or a primary metropolitan statistical area (PMSA) to constitute “normal commuting distance.” The NPRM further stated that “a consolidated metropolitan statistical area (CMSA) will not be used in this manner in determining the prevailing wage rates.” The Department sought to explain, parenthetically, that this simply meant that all locations within a CMSA will not necessarily be deemed to be within normal commuting distance. The Department determined, based on its operational experience, that CMSAs can be too geographically broad to be used in this manner. Because the Department has not adopted any rigid measure of distance as a “normal commuting area,” locations near the boundaries of MSAs and PMSAs, and locations within or near the boundaries of CMSAs may be within normal commuting distance, depending on the factual circumstances.
The Department received four comments (ACIP, AILA, Intel, Latour) on this issue. ACIP believes that there is no justification for eliminating the use of CMSAs for prevailing wage purposes, and that requiring the use of PMSAs and MSAs will unnecessarily inflate the prevailing wage rate for employers located in certain metropolitan areas. That organization further commented that the fact that many wage surveys use CMSAs supports their contention that workers do in fact commute within these regions and CMSAs should continue to be a valid statistical area.
AILA expressed its agreement that employers should make good faith efforts to utilize surveys which fit a geographical area, but noted that it is not always possible. Thus, it recommended that employers be able to use broader geographic surveys where no valid local surveys can be found. Intel expressed a similar view. Latour stated that it has used “normal commuting distance” since IMMACT 90, and the Department's proposal would only create confusion for employers.
These comments demonstrate a misunderstanding on the part of the commenters of the Department's view on the use of CMSAs. The Department did not intend to place a blanket prohibition on the use of CMSAs. Rather, the Department intended only to clarify, albeit parenthetically, that, unlike MSAs and PMSAs, locations within a CMSA are not automatically deemed to be within normal commuting distance. If an employer can show that it could not get an adequate sample at the MSA or PMSA level, a survey based upon a CMSA may, in fact, be appropriate. In such a situation, the employer should demonstrate that it was not possible to obtain a representative sample of similarly employed workers within the MSA or PMSA. Upon such a showing, the CMSA survey should be acceptable. Furthermore, if an employer is unable to obtain a representative sample at the MSA or PMSA level, GAL 2-98 (ETA's prevailing wage policy directive)
Proposed Appendix B, section f, explained that, due to the inadvertent omission of the word “weighted” from one provision of the regulation, there had been a suggestion of confusion regarding whether an employer which uses an “independent authoritative source” to determine prevailing wages was required to use a “weighted average” methodology. Therefore proposed Appendix B described this methodology and how and when it is to be used.
The Department received no comments on this provision. The Department has amended § 655.731(b)(3)(iii)(B)(
As discussed above in IV.O.4, the Department has concluded that an employer will not be required to keep hourly wage records for full-time H-1B workers paid on a salary basis where the prevailing wage is expressed as an hourly wage. In order to permit this change in the recordkeeping provisions, it is necessary that the regulations be amended to explain that the hourly wage may be converted to a salary. Section 655.731(a)(2)(vii) is therefore amended to provide that an hourly rate may be converted to a weekly salary by multiplying the rate by 40, and may be converted to an annual salary by multiplying by 2080, etc.
The Department, in the 1999 NPRM, acknowledged the possibility of confusion among employers regarding the prevailing wage obligation of an employer which has filed more than one LCA for the same occupational classification in the same area of employment. In such circumstances, the Department observed, the employer could have H-1B employees in the same occupational classification in the same area of employment brought into the United States (or accorded H-1B status) based on petitions approved pursuant to different LCAs (filed at different times) with different prevailing wage determinations. Therefore, the Department advised in proposed Appendix B to Subpart H, that the prevailing wage rate as to any particular H-1B nonimmigrant is prescribed by the LCA which supports that nonimmigrant's H-1B petition. The regulations require that the employer obtain the prevailing wage at the time that the LCA is filed (§ 655.731(a)(2)). The LCA is valid for the period certified by ETA, and the employer must satisfy all the LCA's requirements for as long as any H-1B nonimmigrants are employed pursuant to that LCA (§ 655.750). Where new nonimmigrants are employed pursuant to a new LCA, that new LCA prescribes the employer's obligations as to those new nonimmigrants. The prevailing wage determination on the later/subsequent LCA does not “relate back” to operate as an “update” of the prevailing wage for the previously-filed LCA for the same occupational classification in the same area of employment. The Department also cautioned employers that every H-1B worker is to be paid in accordance with the employer's actual wage system (regardless of any difference among prevailing wage rates under various LCAs), and thus is to receive any pay increases which that system provides (
One commenter, AILA, welcomed the acknowledgment that a prevailing wage on an LCA is not changed by later prevailing wage determinations. However, AILA expressed opposition to the reminder that an employer is obligated to pay any wage increases provided by its actual wage system.
The Department has removed its discussion of this issue from Appendix B to the regulations at § 655.731(a)(4). The issue of payment of wage increases under the actual wage system is discussed above in IV.O.3 of the preamble.
The Department has also made minor changes to the regulations not discussed above.
Section 655.700(c)(2) has been amended to explain the effect of the ACWIA amendments upon the entry and employment of a nonimmigrant who is a citizen of Mexico pursuant to the provisions of the North American Free Trade Agreement (NAFTA). As a general matter, the H-1B requirements continue to apply. To avoid the imposition of more stringent requirements on the entry of such nonimmigrants (who are classified as “TN”), however, neither the recruitment nor the displacement provisions apply to these nonimmigrants. The Interim Final Rule also continues the practice of applying the statutory and regulatory provisions for registered nurses (most recently the Nursing Relief for Disadvantaged Areas Act of 1999, Pub. L. 106-95) to TNs.
In addition, several places (
Because of its importance to the public and to the Administration's priorities, the Department is treating this rule as a “significant regulatory action” within the meaning of section 3(f)(4) of Executive Order (E.O.) 12866. E.O. 12866 requires a full economic impact analysis only for “economically significant” rules as defined in section 3(f)(1). An “economically significant” rule pursuant to section 3(f)(1) is one that may “have an annual effect on the economy of $100 million or more, or adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.”
As noted in the NPRM, the H-1B visa program is a voluntary program that allows employers to temporarily secure and employ nonimmigrants admitted under H-1B visas to fill specialized jobs not filled by U.S. workers. In order to protect U.S. workers' wages and eliminate any economic incentive or advantage in hiring temporary foreign workers, Section 212(n) of the INA imposes various requirements on employers, including the requirement that the employer pay an H-1B worker the higher of the actual wage or the prevailing wage. This Interim Final Rule implements statutory changes in the H-1B visa program enacted by the ACWIA. The ACWIA (1) temporarily increases the maximum number of H-1B visas permitted each year; (2) temporarily requires, during the increased H-1B cap period, new non-displacement (layoff) and recruitment attestations by “H-1B-
The Department, in the NPRM, concluded that this rule is not “economically significant” because the direct, incremental costs that an employer would incur because of this rule, above customary business expenses associated with recruiting qualified job applicants and retaining qualified employees in specialized jobs, are expected to be minimal. Collectively, the changes proposed by this rule will not have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. Therefore, the Department concluded that this rule is not a “significant regulatory action” as defined by section 3(f)(1) of E.O. 12866, and no economic impact analysis is required under section 6(a)(3).
Four commenters (ACIP, AILA, Hammond and TCS) specifically responded to the Department's findings with respect to E.O. 12866. Hammond disagreed with the Department's assessment that a full economic impact analysis is not required. That commenter stated its belief that the direct, incremental costs an employer would incur because of this rule are above the customary and usual business expenses for recruiting qualified job applicants and for retaining qualified employees in specialized jobs. Hammond contended that the rule will impose significant costs that will have an annual effect on the economy of $100 million or more, and will adversely affect the computer industry and its productivity.
All four commenters stated their view that the Department has underestimated the additional burdens and costs to be attributed to the new regulatory provisions on all H-1B employers, and that the economic impact of the rule is not limited to H-1B-dependent employers. AILA urged the Department to provide a more accurate and reasonable estimate of the burden created by its regulatory provisions, using reliable data and computations, before imposing the regulations in final form. In the alternative, and in the absence of data to support a reasonable estimate of the economic impact on H-1B employers, AILA recommended the adoption of regulations that are less burdensome.
For the reasons discussed above and in the preamble of the NPRM, the Department continues to believe that the Interim Final Rule is not an “economically significant” regulatory action under E.O. 12866, section 3(f)(1). Furthermore, as described in detail above, the Department has made significant changes in several provisions which will lessen the perceived burden to employers. Accordingly, the Rule does not require an assessment of costs and benefits under section 6(a)(3) of that E.O. The Rule, however, was treated as a “significant regulatory action” under E.O. 12866, section 3(f)(4), because of its importance to the public and to the Administration's priorities and was, therefore, reviewed by the Office of Management and Budget.
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires agencies to prepare and make available for public comment an initial regulatory flexibility analysis, describing the anticipated impact of the proposed rule on small entities. This initial analysis was published as part of the NPRM. The initial regulatory flexibility analysis concluded that the proposed rule would not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. The Regulatory Flexibility Act also requires agencies to prepare a final regulatory analysis, assessing comments received on the initial analysis, describing any significant alternatives affecting small entities that were considered in arriving at the final rule, and the anticipated impact of the rule on small entities.
In the initial regulatory flexibility analysis, the Department noted that available data and analyses indicated that most of the businesses in the industries in which H-1B workers likely would be employed would meet SBA's definition of “small.” The Department, however, stated its conclusion that the economic impact of the rule would not be significant. As there explained, most of the new compliance obligations addressed in this rulemaking apply to only a small subset of the full universe of employers that participate in the H-1B program, namely, those that meet the new definition of “H-1B dependent employer” and those found to have committed willful violations or misrepresentations (“willful violators”), which the Department estimated to be no more than 200 employers.
Upon further analysis, including review of the comments received by the Department, we have concluded that the Department's initial assessment was correct,
The discussion which follows addresses the statutory requirements bearing on this final analysis. While much of the discussion closely tracks the language in the Department's initial analysis, we address below the comments received bearing upon the impact of the rule on small entities. The reader should review the supplementary information section of the preamble (particularly section IV) for a full discussion of the various alternatives considered by the Department in crafting the IFR. However, we discuss below some aspects of these alternatives as they relate to small entities.
On October 21, 1998, President Clinton signed into law the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA), which was enacted as Title IV of the Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal Year 1999 (Public Law 105-277). The ACWIA amended the Immigration and Nationality Act (INA), as amended (8 U.S.C. 1101
The Interim Final Rule is issued pursuant to provisions of the INA, as amended, and the ACWIA, 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184; 29 U.S.C. 49
As discussed below, the Department received only a few comments (from ACIP, AILA, Hammond and ITAA) that specifically discussed the initial regulatory flexibility analysis. The comments specifically directed at the initial regulatory flexibility analysis addressed only the commenters' disagreement with the Department's estimate of the number of U.S. employers that would be affected by the rule's requirements pertaining to H-1B-dependent employers or willful violators. Employers with such status (generally those employers with more than 15 percent of their workforce comprised of nonimmigrants or employers found to have willfully violated H-1B requirements) must follow requirements not imposed on the much larger number of employers that employ a smaller percentage of nonimmigrant workers. Since the comments received specifically relate to the Department's estimate regarding the number of small entities affected by the IFR, the comments are discussed in the next section of this analysis.
Although not raised in connection with the initial analysis, numerous commenters, as detailed in the preceding sections of the preamble to the Interim Final Rule, objected to the recordkeeping burdens imposed by the rule; a few commenters (Chamber of Commerce, IEEE, Simmons) expressed a general concern that the regulations would impose requirements that small businesses would find burdensome. (See sections IV.D.7, D.8, E.1.)
The Department has taken these comments into account, clarifying the particular requirements in several respects. While many of these comments did not differentiate among employers by size, the Department has made many adjustments in the Interim Final Rule, as discussed above, that will benefit small employers. The comments reflected some misunderstanding regarding the need to create, as distinguished from retaining or maintaining, documents relating to the H-1B employment process. The Rule requires the creation of documents in only a relatively few instances. And, in most instances, the maintenance of these documents already is required by other statutes and regulations. For example, while the regulation requires employers in some instances to maintain basic payroll and hours worked records for certain employees, employers are already required to do so by other federal statutes, such as the Fair Labor Standards Act. In a related matter, the Interim Final Rule clarifies that employers need not segregate H-1B documents in a file or system separate from other employment documents. Finally, the Rule, at § 655.760, clarifies the documents that need to be kept in a public access file and simplifies the employer's obligations in this regard. These aspects of the Rule are discussed in full in the earlier sections of the preamble. The reader's particular attention to the following points is recommended: The Paperwork Reduction Act summary in section I; non-displacement documentation (IV.D.8); recruitment practices (IV.E.2); recruitment documentation (IV.E.5); benefits documentation (IV.G.2); location of documents (IV.D.3); hours worked documentation (IV.O.4); public access rules clarified (IV.O.4 and § 655.760 of the Rule).
The Rule also contains several provisions that will particularly benefit small businesses. The Department has provided: A toll free fax number to file LCAs (see IV.B); free or nominal charge resources for determining “master's degree equivalence” (see IV.C.2) and determining “specialities related to” a master's degree (see IV.C.3). Other aspects of the Rule that may be of particular assistance to some small entities include the use of a download program that can be used with Apple Macintosh systems (see IV.B.5) and employer options regarding the payment of benefits to H-1B workers already employed abroad by the employer or its affiliate (see IV.G.1). The Department's outreach efforts to explain the requirements of the ACWIA and the Rule also benefit small entities. As part of these efforts, the Department, as discussed in the preamble above, at section IV.B, plans to make available soon its small business compliance guide and to set up a computer program that will enable individuals and employers to obtain answers to their H-1B questions.
The Department received some miscellaneous comments that concern small entities. As noted above, at section IV.N of the preamble, the Department received a comment requesting that state school districts and private schools be included in the special prevailing wage provisions. The Department has concluded that the statute does not allow for such exemption.
One commenter (Gurtu & McGoldrick) expressed the summary view that the rules would impose excessive recordkeeping requirements on small businesses. As noted here and throughout the preamble, we believe that the Interim Final Rule imposes only minimal obligations on employers, and that the ACWIA does not allow the latitude to except small entities from the requirements necessary to ensure compliance with the statute. (See section 8 below.)
Another commenter (SBSC) expressed the view that the Department's use of established definitions and regulations from areas of the law external to immigration would prove costly to small employers. We believe that we have provided ample information to allow all employers to understand and comply with all aspects of the H-1B program. No employer is required to look beyond the regulations in order to meet these obligations. At the same time, the references in the preamble to other statutes should assist employers by providing them with potentially useful guides to help them in meeting these requirements and by reminding them that other laws may bear on the employment of H-1B workers.
Section 412 (a)(3) of the ACWIA defines “H-1B-dependent employer” as an employer that has 25 or fewer full-time equivalent employees employed in the U.S. and more than 7 H-1B nonimmigrants, at least 26 but not more than 50 full-time equivalent employees and more than 12 H-1B nonimmigrants, or at least 51 full-time equivalent employees and a workforce of H-1B nonimmigrants comprising at least 15
As explained in the initial analysis, we could apply SBA's size standards and gauge precisely how many of the affected businesses are “small” if we were able to construct a profile of each business that used H-1B workers, showing both the total number of workers employed and the portion that are H-1B workers, together with total annual receipts and the applicable SIC industry code. Unfortunately, the precise data required for this analysis are not available. However, we know that by far the greatest number of occupations in LCAs certified under the H-1B program have historically been for computer-related occupations, and for therapists (principally physical and occupational).
For Major Group 73, Business Services, the SBA's small business size standards for SIC codes in which computer-related occupations would likely be employed are all at the $18 million level (annual receipts).
The Business Services category would not include other users of H-1B workers in computer-related occupations, such as computer equipment manufacturers. For computer and other electronic equipment manufacturers, the SBA's small size threshold is 1,000 employees.
For Major Group 80, Health Services, the SBA's small size threshold for all categories within the group are at the $5 million (annual receipts) level. Data from the
Based on the above data, we concluded in the initial analysis that the vast majority (over 98 percent) of the businesses in the industries in which H-1B workers are likely to be employed would meet SBA's definition of “small.” In the initial analysis, the Department estimated that approximately 50,000 employers a year file LCA's for H-1B nonimmigrants. The Department also estimated that not more than ten (10) employers a year will be found to have committed willful violations. The Department has received no comments, nor possesses any other information, that would call into question this approach or the estimate it yielded in the initial analysis. Based upon its updated review of the number of LCAs filed per year and taking into consideration the increase in petitions permitted by the October 2000 amendments to the INA, the Department currently estimates that 63,500 employers a year will file LCAs.
Both ACIP and AILA asserted that the Department's premises and conclusion were not logically connected and, along with the other two commenters, contended that the Department's estimate is not supported by reliable data. AILA stated that the number of affected employers and the resultant burden “may be significantly higher than the DOL suggests.” ACIP and AILA asserted that the Department's estimated “upper limit” of 1,425 H-1B dependent employers was based on an unsupported and, in their view, incorrect assumption that employers generally file “blanket LCAs.” Hammond recommended that the Department work with the INS to analyze the economic information required in an H-1B petition to determine the probable number of small and H-1B dependent employers that will be affected by the proposed regulations.
As the Department explained in both the initial regulatory analysis and in other sections of the preamble to the NPRM, aside from reasonable estimates, there are no data available to determine precisely how many “H-1B dependent” employers will exist under the rule in any given year, nor how many employers will be found to have committed willful violations or misrepresentations. Such precision would require a profile of each business that used H-1B workers, showing both the total number of workers employed and the portion that are H-1B workers, together with total annual receipts and the applicable SIC industry code for each business. Additional data identifying the education and earnings profiles of the H-1B workers would be needed to determine whether H-1B-dependent employers would likely be filing LCAs for only exempt workers. In the course of developing the NPRM, the Department requested available information from the INS and was advised that information required in an H-1B petition would not enable us or the INS to determine the probable number of small or H-1B-dependent employers that would be affected by the proposed regulations. The Department's conclusion that no such data existed was borne out by the lack of any suggestions in the comments that such data exist. Similarly, we received no suggestions for arriving at a better estimate of the number of employers that would be affected by the rule.
After review of the comments and available data, the Department has concluded that there are no data to assist it in determining the likely number of H-1B-dependent employers and willful violators. The Department has received no information that leads it to question its estimate in the initial analysis that the number of H-1B-dependent employers and willful violators who would be subject to the new recruitment and displacement attestations would be between 100 and 200 employers. The Department does not believe that the increase in the cap for H-1B workers will have a proportionate effect on the number of dependent employers, since the Department believes that most such employers are already dependent. To take into account employers that may have been close to H-1B-dependency under the former cap who could now employ a larger number of H-1B workers, the Department now estimates the number of H-1B-dependent employers and willful violators to be 150 to 250 employers, at a midpoint of 200 employers.
The reporting and recordkeeping requirements of the Rule are not overly complex, and in most cases simply require that a copy be kept of a record made for other purposes or that a simple arithmetic calculation be performed. There are no requirements for technical, specialized or professional skills to comply with the reporting or recordkeeping provisions of the rule. The particular reporting and recordkeeping requirements of this Rule are described above in the Supplementary Information section entitled “Paperwork Reduction Act” and in various places throughout the preamble. Some of these requirements are also briefly summarized below.
As noted, most new recordkeeping and compliance requirements imposed by the ACWIA and this rule apply only to employers meeting the new definition of “H-1B-dependent employer” or employers found to have committed willful violations or misrepresentations, which we estimate to number between 125 and 225. To determine if it meets the new definition of “H-1B-dependent employer,” an employer of H-1B workers must compare the number of its H-1B workers to the number of full-time equivalent employees. H-1B-dependent employers and willful violators must comply with the new “non-displacement” and “good faith recruitment” requirements of the ACWIA. In many cases, it will be readily apparent, at either end of the spectrum, whether an employer is or is not H-1B dependent and no actual computation will be necessary. Based on the comments, the Interim Final Rule provides an easy test for determining if H-1B-dependency status is readily apparent. In the few instances where actual computations will be required, the Rule also provides an easier, alternative method of determining full-time equivalent employees.
The ACWIA provisions on non-displacement and recruitment of U.S. workers do not apply if the LCA is used for petitioning only “exempt H-1B nonimmigrants.” If INS determines in the course of adjudicating an H-1B petition that an H-1B nonimmigrant is exempt, the employer must keep a copy of the determination in the public access file.
The Interim Final Rule would require an H-1B-dependent employer or willful violator that is seeking to place an H-1B nonimmigrant with another employer to secure and retain a written assurance from the second employer, a contemporaneous written record of the second employer's verbal statement, or a prohibition in the contract between the two employers, stating that the second employer has not displaced and intends not to displace a U.S. worker.
H-1B-dependent employers and willful violators must maintain documentation that they have not displaced U.S. workers for a period 90 days before and 90 days after the employer petitions for an H-1B worker. The Interim Final Rule, like the proposed rule, requires covered employers to maintain typical personnel records that would ordinarily be readily available, including name, last known mailing address, title and description of job, and any documentation kept on the employee's experience and
H-1B-dependent employers and willful violators must make good faith efforts to recruit U.S. workers using procedures that meet industry-wide standards before hiring H-1B workers. These employers will be required to keep documentation of the recruiting methods they used, including the places, dates, and contents of advertisements or postings, and the compensation terms (if not included in contents of advertisements and postings). These employers must also summarize in the public disclosure file the principal recruitment methods used and the time frame within which the recruitment was conducted. As discussed above at section IV.E.5 of the preamble to this Rule, the NPRM requested comments on how employers should determine industry-wide standards, and how to make this determination available to U.S. workers. (See IV.E.1, E.5.) Inasmuch as the requirements are based on industry-wide standards, meeting this statutory standard should not impose significant burdens on affected employers in most cases. To ascertain whether employers have given good faith consideration to U.S. worker/applicants, the Interim Final Rule also requires the retention of applications and related documents, rating forms, job offers, etc. Retention of such records already is required by EEOC, so no additional burden will be imposed. (See IV.D.8, above.)
All employers of H-1B workers must offer fringe benefits to H-1B workers on the same basis and terms as offered to similarly-employed U.S. workers. To document that they have done so, employers must keep copies of their fringe benefit plans and summary plan descriptions, including rules on eligibility and benefits, evidence of what benefits are actually provided to workers, and how costs are shared between employers and employees. Because regulations of the Pension and Welfare Benefits Administration and the Internal Revenue Service generally require employers to keep copies of such fringe benefit information, meeting this requirement should not impose any additional burdens on most affected employers, and in the few cases where such information is not currently retained, it is anticipated that the additional burden will be minor. (See IV.G.1, above.)
As noted in the initial analysis, the Department republished and asked for comment on several provisions of the December 20, 1994 Final Rule (59 FR 65646) that were published for notice and comment on October 31, 1995 (60 FR 55339). As explained above, H-1B workers are required to be paid at least the actual wage or the prevailing wage, whichever is higher. To ensure this requirement is met, employers are required to include in the public access file documents explaining their actual wage system, and to maintain payroll records for the specific employment in question for both their H-1B workers and their U.S. workers. The Interim Final Rule revises the proposal to require that hours worked records be retained with respect to U.S. workers only if the employee is not paid on a salary basis or the actual wage is expressed as an hourly rate, and further that hours worked records be kept for H-1B workers only if the worker is part-time or is not paid on a salary basis. In virtually all cases, these employees would be paid hourly and hourly pay records would therefore be kept. (See IV.O.4, above.)
There are no Federal rules that directly duplicate, overlap or conflict with the Interim Final Rule. Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e
The compliance and reporting requirements of the Interim Final Rule, together with those significant alternatives which have been identified, are discussed in the “Supplementary Information” section of the preamble above. Different timetables for implementing the statutory requirements for smaller businesses would not be consistent with the statute. The statute temporarily increases the maximum allowable number of nonimmigrants that may be admitted into the U.S. to perform specialized jobs not filled by U.S. workers, and temporarily adds corresponding provisions intended to protect the wages and working conditions of U.S. workers in similar jobs during the same period.
The compliance and reporting requirements of the Interim Final Rule, and each of the alternatives considered together with their expected advantages and disadvantages, are described in the preamble above. The Department has attempted to keep new recordkeeping requirements to the minimum necessary for the Department to ascertain compliance and for the public to be aware of the primary documentation relied on by the employer to satisfy the statutory requirements. (See Section 212(n)(1) of the INA.) Moreover, most of the recordkeeping requirements already are imposed by other statutes, or only require retention of documents which, in any event, would be kept as a matter of prudent business practice.
Upon further review and consideration if the comments received, the Department has clarified several aspects of the rule. Among other items clarified are the documents to be kept in the public disclosure file and other documents which, in contrast, need not be segregated within the employer's system of records. (See § 655.760.)
In this connection, the Department also considered the use of performance rather than design standards in the regulations. The proposed rules discussed such alternatives, such as establishing a presumption of good faith recruitment based on the employer's hiring a significant number of U.S.
Exemption from coverage under this Interim Final Rule for small entities would not be appropriate under the terms of the controlling H-1B statutory mandates. The ACWIA contains no authority for the Department to grant such an exemption except to the extent that the statute itself grants an exemption (
The Department, in the NPRM, concluded that the proposed rule is not a “major rule” within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 801
Five commenters (ACIP, AILA, Hammond, ITAA and SBSC) responded to the Department's conclusion that this rule is not a “major rule” within the meaning of SBREFA. The commenters generally focused on their belief that the Department has underestimated the costs to employers of complying with the rule. They asserted that a reasonable, reliable estimate of costs would show that the rule is a major one requiring approval by Congress. ACIP and AILA contended that the Department has underestimated the cost of this rule to employers because it has not included in its analysis the costs to employers for legal services, training materials, computers, files and other systems necessary for compliance.
The Department believes that employer compliance with the additional requirements of the ACWIA will not require significant, additional expenditures as suggested by commenters. The direct, incremental costs associated with the customary and usual business expenses for recruiting qualified job applicants and retaining qualified employees in specialized jobs should be minimally affected by implementation of this rule. Those systems needed for compliance with the few additional requirements of the ACWIA should largely already be in place. The Department has concluded that collectively, the changes set forth in this Rule will not have an economically significant impact, and therefore the Rule is not a major rule under SBREFA.
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531
AILA specifically took issue with the Department's description of the H-1B program as “voluntary.” AILA believes that there is very little that is “voluntary” about the H-1B program. Rather, that group asserts, Congress recognized an urgent need for additional qualified professionals in certain fields and responded to that need by enacting ACWIA. AILA describes the H-1B program as a “government monopoly” where businesses have no choice but to accept the burdensome requirements of the program if they are to obtain the highly skilled foreign workers necessary for their economic survival. While from an employer's perspective, use of the H-1B visa program may be an economic necessity, participation in the program remains voluntary since it applies only to employers who choose to participate in the program.
In addition, the Rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government, within the meaning of Executive Order 13132. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.
This program is listed in the Catalog of Federal Domestic Assistance at 17.252.
Administrative practice and procedure, Agriculture, Aliens, Employment, Forest and forest products, Health professions, Immigration, Labor, Longshore work, Migrant labor, Penalties, Reporting requirements, Students, Wages.
Parts 655 and 656 of Chapter V of Title 20, Code of Federal Regulations, are amended as follows:
Section 655.0 issued under 8 U.S.C. 1101(a)(15)(H)(i) and (ii), 1182(m) and (n), 1184, 1188, and 1288(c) and (d); 29 U.S.C. 49
Section 655.00 issued under 8 U.S.C. 1101(a)(15)(H)(ii), 1184, and 1188; 29 U.S.C. 49
Subparts A and C issued under 8 U.S.C. 1101(a)(150(H)(ii)(b) and 1184; 29 U.S.C. 49
Subpart B issued under 8 U.S.C. 1101(a)(15)(H)(ii)(a), 1184, and 1188; and 29 U.S.C. 49
Subparts D and E issued under 8 U.S.C. 1101(a)(15)(H)(i)(a), 1182(m), and 1184; 29 U.S.C. 49
Subparts F and G issued under 8 U.S.C. 1184 and 1288(c); and 29 U.S.C. 49
Subparts H and I issued under 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184; 29 U.S.C. 49
Subparts J and K issued under 29 U.S.C. 49
Subparts L and M issued under 8 U.S.C. 1101(a)(15)(H)(i)(c), 1182 (m) and 1184; and 29 U.S.C. 49
(a)
(1) Establishes an annual ceiling (exclusive of spouses and children) on the number of foreign workers who may be issued H-1B visas—
(i) 195,000 in fiscal year 2001;
(ii) 195,000 in fiscal year 2002;
(iii) 195,000 in fiscal year 2003; and
(iv) 65,000 in each succeeding fiscal year;
(2) Defines the scope of eligible occupations for which nonimmigrants may be issued H-1B visas and specifies the qualifications that are required for entry as an H-1B nonimmigrant ;
(3) Requires an employer seeking to employ H-1B nonimmigrants to file a labor condition application (LCA) agreeing to various attestation requirements and have it certified by the Department of Labor (DOL) before a nonimmigrant may be provided H-1B status by the Immigration and Naturalization Service (INS); and
(4) Establishes an enforcement system under which DOL is authorized to determine whether an employer has engaged in misrepresentation or failed to meet a condition of the LCA, and is authorized to impose fines and penalties.
(b)
(1) First, an employer shall submit to DOL, and obtain DOL certification of, a labor condition application (LCA). The requirements for obtaining a certified LCA are provided in this subpart. The LCA (Form ETA 9035) and cover page (Form ETA 9035CP, containing the full attestation statements that are incorporated by reference in Form ETA 9035) may be obtained from
(2) After obtaining DOL certification of an LCA, the employer may submit a nonimmigrant visa petition (INS Form I-129), together with the certified LCA, to INS, requesting H-1B classification for the foreign worker. The requirements concerning the submission of a petition to, and its processing by, INS are set forth in INS regulations. The INS petition (Form I-129) may be obtained from an INS district or area office.
(3) If INS approves the H-1B classification, the nonimmigrant then may apply for an H-1B visa abroad at a consular office of the Department of State. If the nonimmigrant is already in the United States in a status other than H-1B, he/she may apply to the INS for a change of visa status.
(c)
(2) During the period that the provisions of Appendix 1603.D.4 of Annex 1603 of the North American Free Trade Agreement (NAFTA) apply, this subpart H and subpart I of this part shall apply (except for the provisions relating to the recruitment and displacement of U.S. workers (see §§ 655.738 and 655.739)) to the entry and employment of a nonimmigrant who is a citizen of Mexico under and pursuant to the provisions of section D or Annex 1603 of NAFTA in the case of all professions set out in Appendix 1603.D.1 of Annex 1603 of NAFTA other than registered nurses. Therefore, the references in this part to “H-1B nonimmigrant” apply to any Mexican citizen nonimmigrant who is classified by INS as “TN.” In the case of a registered nurse, the following provisions shall apply: subparts D and E of this part or the Nursing Relief for Disadvantaged Areas Act of 1999 (Public Law 106-95) and the regulations issued thereunder, 20 CFR part 655, subparts L and M.
Three federal agencies (Department of Labor, Department of State, and Department of Justice) are involved in the process relating to H-1B nonimmigrant classification and employment. The employer also has continuing responsibilities under the process. This section briefly describes the responsibilities of each of these entities.
(a)
(1) The Employment and Training Administration (ETA) is responsible for receiving and certifying labor condition applications (LCAs) in accordance with this subpart H. ETA is also responsible for compiling and maintaining a list of LCAs and makes such list available for public examination at the Department of Labor, 200 Constitution Avenue, NW., Room C-4318, Washington, DC 20210.
(2) The Wage and Hour Division of the Employment Standards Administration (ESA) is responsible, in accordance with subpart I of this part, for investigating and determining an employer's misrepresentation in or failure to comply with LCAs in the employment of H-1B nonimmigrants.
(b)
(c)
(1) The employer shall submit a completed labor condition application (LCA) on Form ETA 9035 in the manner prescribed in § 655.720. By completing and signing the LCA, the employer agrees to several attestations regarding an employer's responsibilities, including the wages, working conditions, and benefits to be provided to the H-1B nonimmigrants (8 U.S.C. 1182(n)(1)); these attestations are specifically identified and incorporated by reference in the LCA, as well as being set forth in full on Form ETA 9035CP. The LCA contains additional attestations for certain H-1B-dependent employers and employers found to have willfully violated the H-1B program requirements; these attestations impose certain obligations to recruit U.S. workers, to offer positions to U. S. workers who are equally or better qualified than the H-1B nonimmigrant(s), and to avoid the displacement of U.S. workers (either in the employer's workforce or in the workforce of a second employer with whom the H-1B nonimmigrant(s) is placed with indicia of employment by that employer (8 U.S.C. 1182(n)(1)(E)-(G)). These additional attestations are specifically identified and incorporated by reference in the LCA, as well as being set forth in full on Form ETA 9035CP. If the LCA is certified by ETA, a copy will be returned to the employer.
(2) The employer shall make the LCA and necessary supporting documentation (as identified under this subpart) available for public examination at the employer's principal place of business in the U.S. or at the place of employment within one working day after the date on which the LCA is filed with ETA.
(3) The employer then may submit a copy of the certified LCA to INS with a completed petition (INS Form I-129) requesting H-1B classification.
(4) The employer shall not allow the nonimmigrant worker to begin work until INS grants the worker authorization to work in the United States for that employer or, in the case of a nonimmigrant who is already in H-1B status and is changing employment to another H-1B employer, until the new employer files a petition supported by a certified LCA.
(5) The employer shall develop sufficient documentation to meet its burden of proof with respect to the validity of the statements made in its LCA and the accuracy of information provided, in the event that such statement or information is challenged. The employer shall also maintain such documentation at its principal place of business in the U.S. and shall make such documentation available to DOL for inspection and copying upon request.
(a) Except as provided in paragraph (b) of this section, complaints concerning misrepresentation in the labor condition application or failure of the employer to meet a condition specified in the application shall be filed with the Administrator, Wage and Hour Division (Administrator), ESA, according to the procedures set forth in subpart I of this part. The Administrator shall investigate where appropriate, and after an opportunity for a hearing, assess appropriate sanctions and penalties, as described in subpart I of this part.
(b) Complaints arising under section 212(n)(1)(G)(i)(II) of the INA, 8 U.S.C. 1182(n)(1)(G)(i)(II), alleging failure of the employer to offer employment to an equally or better qualified U.S. worker, or an employer's misrepresentation regarding such offer(s) of employment, may be filed with the Department of Justice, 10th Street & Constitution Avenue, NW., Washington, DC 20530. The Department of Justice shall investigate where appropriate and shall take such further action as may be appropriate under that Department's regulations and procedures.
(1) The term does not include any location where either of the following criteria—paragraph (1)(i) or (ii)—is satisfied:
(i)
(ii)
(A) The nature and duration of the H-1B worker's job functions mandates his/her short-time presence at the location. For this purpose, either:
(
(
(B) The H-1B worker's presence at the locations to which he/she travels from the “home” worksite is on a casual, short-term basis, which can be recurring but not excessive (
(C) The H-1B nonimmigrant is not at the location as a “strikebreaker” (
(2) Examples of “non-worksite” locations based on worker's job functions: A computer engineer sent out to customer locations to “troubleshoot” complaints regarding software malfunctions; a sales representative
(3) Examples of “worksite” locations based on worker's job functions: A computer engineer who works on projects or accounts at different locations for weeks or months at a time; a sales representative assigned on a continuing basis in an area away from his/her “home office;” an auditor who works for extended periods at the customer's offices; a physical therapist who “fills in” for full-time employees of health care facilities for extended periods; or a physical therapist who works for a contractor whose business is to provide staffing on an “as needed” basis at hospitals, nursing homes, or clinics.
(4) Whenever an H-1B worker performs work at a location which is not a “worksite” (under the criterion in paragraph (1)(i) or (1)(ii) of this definition), that worker's “place of employment” or “worksite” for purposes of H-1B obligations is the worker's home station or regular work location. The employer's obligations regarding notice, prevailing wage and working conditions are focused on the home station “place of employment” rather than on the above-described location(s) which do not constitute worksite(s) for these purposes. However, whether or not a location is considered to be a “worksite”/”place of employment” for an H-1B nonimmigrant, the employer is required to provide reimbursement to the H-1B nonimmigrant for expenses incurred in traveling to that location on the employer's business, since such expenses are considered to be ordinary business expenses of employers (§§ 655.731(c)(7)(iii)(C); 655.731(c)(9)). In determining the worker's “place of employment” or “worksite,” the Department will look carefully at situations which appear to be contrived or abusive; the Department would seriously question any situation where the H-1B nonimmigrant's purported “place of employment” is a location other than where the worker spends most of his/her work time, or where the purported “area of employment” does not include the location(s) where the worker spends most of his/her work time.
(1) A citizen or national of the United States, or
(2) An alien who is lawfully admitted for permanent residence in the United States, is admitted as a refugee under section 207 of the INA, is granted asylum under section 208 of the INA, or is an immigrant otherwise authorized (by the INA or by the Attorney General) to be employed in the United States.
(a)
(b)
(c)
(a) The Regional Certifying Officers in the ETA regional offices are responsible for administrative matters under this subpart other than the processing of LCAs (
(b) The ETA regional offices with responsibility for labor certification programs are—
(1) Region I Boston (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont): J.F.K. Federal Building, Room E-350, Boston, Massachusetts 02203. Telephone: 617-565-4446.
(2) Region I New York (New York, New Jersey, Puerto Rico, and the Virgin Islands): 201 Varick Street, Room 755, New York, New York 10014. Telephone: 212-337-2186.
(3) Region II ( Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia): Suite 825 East, The Curtis Center, 170 S. Independence Mall West, Philadelphia, Pennsylvania 19106-3315. Telephone: 215-861-5250.
(4) Region III (Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee): Atlanta Federal Ctr., 100 Alabama St., NW, Suite 6M-12, Atlanta, Georgia 30303. Telephone: 404-562-2115.
(5) Region IV (Arkansas, Colorado, Louisiana, Montana, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah, and Wyoming): 525 Griffin Street, Room 317, Dallas, Texas 75202. Telephone: 214-767-4989.
(6) Region V (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, and Wisconsin): 230 South Dearborn Street, Room 605, Chicago, Illinois 60604. Telephone: 312-353-1550.
(7) Region VI (Alaska, Arizona, California, Guam, Hawaii, Idaho, Nevada, Oregon, and Washington): P.O. Box 193767, San Francisco, California 94119-3767. Telephone: 415-975-4601.
(c) The ETA website at
(a)
(b)
(c)
(1)
(i) The occupation, by Dictionary of Occupational Titles (DOT) Three-Digit Occupational Groups code and by the employer's own title for the job;
(ii) The number of H-1B nonimmigrants sought;
(iii) The gross wage rate to be paid to each H-1B nonimmigrant, expressed on an hourly, weekly, biweekly, monthly or annual basis;
(iv) The starting and ending dates of the H-1B nonimmigrants' employment;
(v) The place(s) of intended employment;
(vi) The prevailing wage for the occupation in the area of intended employment and the specific source (
(vii) The employer's status as to whether or not the employer is H-1B-dependent and/or a willful violator, and, if the employer is H-1B-dependent and/or a willful violator, whether the employer will use the application only in support of petitions for exempt H-1B nonimmigrants.
(2)
(3)
(d)
(1) The employer is offering and will offer during the period of authorized employment to H-1B nonimmigrants no less than the greater of the following wages (such offer to include benefits and eligibility for benefits provided as compensation for services, which are to be offered to the nonimmigrants on the same basis and in accordance with the same criteria as the employer offers such benefits to U.S. workers):
(i) The actual wage paid to the employer's other employees at the worksite with similar experience and qualifications for the specific employment in question; or
(ii) The prevailing wage level for the occupational classification in the area of intended employment;
(2) The employer will provide working conditions for such nonimmigrants that will not adversely affect the working conditions of workers similarly employed (including benefits in the nature of working conditions, which are to be offered to the nonimmigrants on the same basis and in accordance with the same criteria as the employer offers such benefits to U.S. workers);
(3) There is not a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment;
(4) The employer has provided and will provide notice of the filing of the labor condition application to:
(i)(A) The bargaining representative of the employer's employees in the occupational classification in the area of intended employment for which the H-1B nonimmigrants are sought, in the manner described in § 655.734(a)(1)(i); or
(B) If there is no such bargaining representative, affected workers by providing electronic notice of the filing of the LCA or by posting notice in conspicuous locations at the place(s) of employment, in the manner described in § 655.734(a)(1)(ii); and
(ii) H-1B nonimmigrants by providing a copy of the LCA to each H-1B nonimmigrant at the time that such nonimmigrant actually reports to work, in the manner described in § 655.734(a)(2).
(5) The employer has determined its status concerning H-1B-dependency and/or willful violator (as described in § 655.736), has indicated such status, and if either such status is applicable to the employer, has indicated whether the LCA will be used only for exempt H-1B nonimmigrant(s), as described in § 655.737.
(6) The employer has provided the information about the occupation required in paragraph (c) of this section.
(e)
(i) Each affected LCA number and its date of certification;
(ii) A description of the new employing entity's actual wage system applicable to H-1B nonimmigrant(s)
(iii) The employer identification number (EIN) of the new employing entity (whether or not different from that of the predecessor entity); and
(iv) A sworn statement by an authorized representative of the new employing entity expressly acknowledging such entity's assumption of all obligations, liabilities and undertakings arising from or under attestations made in each certified and still effective LCA filed by the predecessor entity. Unless such statement is executed and made available in accordance with this paragraph, the new employing entity shall not employ any of the predecessor entity's H-1B nonimmigrants without filing new LCAs and petitions for such nonimmigrants. The new employing entity's statement shall include such entity's explicit agreement to:
(A) Abide by the DOL's H-1B regulations applicable to the LCAs;
(B) Maintain a copy of the statement in the public access file (see § 655.760); and
(C) Make the document available to any member of the public or the Department upon request.
(2) Notwithstanding the provisions of paragraph (e)(1) of this section, the new employing entity must file new LCA(s) and H-1B petition(s) when it hires any new H-1B nonimmigrant(s) or seeks extension(s) of H-1B status for existing H-1B nonimmigrant(s). In other words, the new employing entity may not utilize the predecessor entity's LCA(s) to support the hiring or extension of any H-1B nonimmigrant after the change in corporate structure.
(3) A change in an employer's H-1B-dependency status which results from the change in the corporate structure has no effect on the employer's obligations with respect to its current H-1B nonimmigrant employees. However, the new employing entity shall comply with § 655.736 concerning H-1B-dependency and/or willful-violator status and § 655.737 concerning exempt H-1B nonimmigrants, in the event that such entity seeks to hire new H-1B nonimmigrant(s) or to extend the H-1B status of existing H-1B nonimmigrants. (See § 655.736(d)(6).)
An employer seeking to employ H-1B nonimmigrants in a specialty occupation or as a fashion model of distinguished merit and ability shall state on Form ETA 9035 that it will pay the H-1B nonimmigrant the required wage rate.
(a)
(1) The
(2) The
(i) A wage determination for the occupation and area issued under one of the following statutes (which shall be available through the SESA):
(A) The Davis-Bacon Act, 40 U.S.C. 276a
(B) The McNamara-O'Hara Service Contract Act, 41 U.S.C. 351
(
(
(ii) A union contract which was negotiated at arms-length between a union and the employer, which contains a wage rate applicable to the occupation; or
(iii) If the job opportunity is in an occupation which is not covered by paragraph (a)(2)(i) or (ii) of this section, the prevailing wage shall be the weighted average rate of wages, that is, the rate of wages to be determined, to the extent feasible, by adding the wages paid to workers similarly employed in the area of intended employment and dividing the total by the number of such workers. Since it is not always feasible to determine such an average rate of wages with exact precision, the wage set forth in the application shall be considered as meeting the prevailing wage standard if it is within five percent of the average rate of wages. See paragraph (c) of this section, regarding payment of required wages. See also paragraph (d)(4) of this section, regarding enforcement. The prevailing wage rate under this paragraph (a)(2)(iii) shall be based on the best information available. The Department believes that the following prevailing wage sources are, in order of priority, the most accurate and reliable:
(A)
(
(
(
(B)
(C)
(iv) For purposes of this section, “similarly employed” means “having substantially comparable jobs in the occupational classification in the area of intended employment,” except that if no such workers are employed by employers other than the employer applicant in the area of intended employment, “similarly employed” means:
(A) Having jobs requiring a substantially similar level of skills within the area of intended employment; or
(B) If there are no substantially comparable jobs in the area of intended employment, having substantially comparable jobs with employers outside of the area of intended employment.
(v) A prevailing wage determination for LCA purposes made pursuant to this section shall not permit an employer to pay a wage lower than that required under any other applicable Federal, State or local law.
(vi) Where a range of wages is paid by the employer to individuals in an occupational classification or among individuals with similar experience and qualifications for the specific employment in question, a range is considered to meet the prevailing wage requirement so long as the bottom of the wage range is at least the prevailing wage rate.
(vii) The employer shall enter the prevailing wage on the LCA in the form in which the employer will pay the wage (
(viii) In computing the prevailing wage for a job opportunity in an occupational classification in an area of intended employment in the case of an employee of an institution of higher education or an affiliated or related nonprofit entity , a nonprofit research
(ix) An employer may file more than one LCA for the same occupational classification in the same area of employment and, in such circumstances, the employer could have H-1B employees in the same occupational classification in the same area of employment, brought into the U.S. (or accorded H-1B status) based on petitions approved pursuant to different LCAs (filed at different times) with different prevailing wage determinations. Employers are advised that the prevailing wage rate as to any particular H-1B nonimmigrant is prescribed by the LCA which supports that nonimmigrant's H-1B petition. The employer is required to obtain the prevailing wage at the time that the LCA is filed (see paragraph (a)(2) of this section). The LCA is valid for the period certified by ETA, and the employer must satisfy all the LCA's requirements (including the required wage which encompasses both prevailing and actual wage rates) for as long as any H-1B nonimmigrants are employed pursuant to that LCA (§ 655.750). Where new nonimmigrants are employed pursuant to a new LCA, that new LCA prescribes the employer's obligations as to those new nonimmigrants. The prevailing wage determination on the later/subsequent LCA does not “relate back” to operate as an “update” of the prevailing wage for the previously-filed LCA for the same occupational classification in the same area of employment. However, employers are cautioned that the actual wage component to the required wage may, as a practical matter, eliminate any wage-payment differentiation among H-1B employees based on different prevailing wage rates stated in applicable LCAs. Every H-1B nonimmigrant is to be paid in accordance with the employer's actual wage system, and thus to receive any pay increases which that system provides.
(3) Once the prevailing wage rate is established, the H-1B employer then shall compare this wage with the actual wage rate for the specific employment in question at the place of employment and must pay the H-1B nonimmigrant at least the higher of the two wages.
(b)
(i) Employee's full name;
(ii) Employee's home address;
(iii) Employee's occupation;
(iv) Employee's rate of pay;
(v) Hours worked each day and each week by the employee if:
(A) The employee is paid on other than a salary basis (
(B) With respect only to H-1B nonimmigrants, the worker is a part-time employee (whether paid a salary or an hourly rate).
(vi) Total additions to or deductions from pay each pay period, by employee; and
(vii) Total wages paid each pay period, date of pay and pay period covered by the payment, by employee.
(viii) Documentation of offer of benefits and eligibility for benefits provided as compensation for services on the same basis, and in accordance with the same criteria, as the employer offers to U.S. workers (see paragraph (c)(3) of this section):
(A) A copy of any document(s) provided to employees describing the benefits that are offered to employees, the eligibility and participation rules, how costs are shared, etc. (
(B) A copy of all benefit plans or other documentation describing benefit plans and any rules the employer may have for differentiating benefits among groups of workers;
(C) Evidence as to what benefits are actually provided to U.S. workers and H-1B nonimmigrants, including evidence of the benefits selected or declined by employees where employees are given a choice of benefits;
(D) For multinational employers who choose to provide H-1B nonimmigrants with “home country” benefits, evidence of the benefits provided to the nonimmigrant before and after he/she went to the United States. See paragraph (c)(3)(iii)(C) of this section.
(2)
(3)
(i) If the employer used a wage determination issued pursuant to the provisions of the Davis-Bacon Act, 40 U.S.C. 276a
(ii) If the employer used an applicable wage rate from a union contract which was negotiated at arms-length between a union and the employer, the documentation shall include an excerpt from the union contract showing the wage rate(s) for the occupation.
(iii) If the employer did not use a wage covered by the provisions of paragraph (b)(3)(i) or (b)(3)(ii) of this section, the employer's documentation shall consist of:
(A) A copy of the prevailing wage finding from the SESA for the
(B) A copy of the prevailing wage survey for the occupation within the area of intended employment published by an independent authoritative source. For purposes of this paragraph (b)(3)(iii)(B), a prevailing wage survey for the occupation in the area of intended employment published by an independent authoritative source shall mean a survey of wages published in a book, newspaper, periodical, loose-leaf service, newsletter, or other similar medium, within the 24-month period immediately preceding the filing of the employer's application. Such survey shall:
(
(
(
(C) A copy of the prevailing wage survey or other source data acquired from another legitimate source of wage information that was used to make the prevailing wage determination. For purposes of this paragraph (b)(3)(iii)(C), a prevailing wage provided by another legitimate source of such wage information shall be one which:
(
(
(
(c)
(2) “Cash wages paid,” for purposes of satisfying the H-1B required wage, shall consist only of those payments that meet all the following criteria:
(i) Payments shown in the employer's payroll records as earnings for the employee, and disbursed to the employee, cash in hand, free and clear, when due, except for deductions authorized by paragraph (c)(9) of this section;
(ii) Payments reported to the Internal Revenue Service (IRS) as the employee's earnings, with appropriate withholding for the employee's tax paid to the IRS (in accordance with the Internal Revenue Code of 1986, 26 U.S.C. 1,
(iii) Payments of the tax reported and paid to the IRS as required by the Federal Insurance Contributions Act, 26 U.S.C. 3101,
(iv) Payments reported, and so documented by the employer, as the employee's earnings, with appropriate employer and employee taxes paid to all other appropriate Federal, State, and local governments in accordance with any other applicable law.
(v) Future bonuses and similar compensation (
(3)
(i) For purposes of this section, the offer of benefits “on the same basis, and in accordance with the same criteria” means that the employer shall offer H-1B nonimmigrants the same benefit package as it offers to U.S. workers, and may not provide more strict eligibility or participation requirements for the H-1B nonimmigrant(s) than for similarly employed U.S. workers(s) (
(ii) The benefits received by the H-1B nonimmigrant(s) need not be identical to the benefits received by similarly employed U.S. workers(s),
(iii) If the employer is part of a multinational corporate operation (
(A) The employer may offer the H-1B nonimmigrant(s) benefits in accordance with paragraphs (c)(3)(i) and (ii) of this section.
(B) Where an H-1B nonimmigrant is in the U.S. for no more than 90 consecutive calendar days, the employer during that period may maintain the H-
(C) Where an H-1B nonimmigrant is in the U.S. for more than 90 consecutive calendar days (or from the point where the worker is transferred to the U.S. or it is anticipated that the worker will likely remain in the U.S. more than 90 consecutive days), the employer may maintain the H-1B nonimmigrant on the benefits provided in his/her home country (
(
(
(
(
(
(
(iv) Benefits provided as compensation for services may be credited toward the satisfaction of the employer's required wage obligation only if the requirements of paragraph (c)(2) of this section are met (
(4) For
(5) For
(6) Subject to the standards specified in paragraph (c)(7) of this section (regarding nonproductive status), an H-1B nonimmigrant shall receive the required pay beginning on the date when the nonimmigrant “enters into employment” with the employer.
(i) For purposes of this paragraph (c)(6), the H-1B nonimmigrant is considered to “enter into employment” when he/she first makes him/herself available for work or otherwise comes under the control of the employer, such as by waiting for an assignment, reporting for orientation or training, going to an interview or meeting with a customer, or studying for a licensing examination, and includes all activities thereafter.
(ii) Even if the H-1B nonimmigrant has not yet “entered into employment” with the employer (as described in paragraph (c)(6)(i) of this section), the employer that has had an LCA certified and an H-1B petition approved for the H-1B nonimmigrant shall pay the nonimmigrant the required wage beginning 30 days after the date the nonimmigrant first is admitted into the U.S. pursuant to the petition, or, if the nonimmigrant is present in the United States on the date of the approval of the petition, beginning 60 days after the date the nonimmigrant becomes eligible to work for the employer. For purposes of this latter requirement, the H-1B nonimmigrant is considered to be eligible to work for the employer upon the date of need set forth on the approved H-1B petition filed by the employer, or the date of adjustment of the nonimmigrant's status by INS, whichever is later. Matters such as the worker's obtaining a State license would not be relevant to this determination.
(7)
(i)
(ii)
(8) If the employee works in an occupation other than that identified on the employer's LCA, the employer's required wage obligation is based on the occupation identified on the LCA, and not on whatever wage standards may be applicable in the occupation in which the employee may be working.
(9) “Authorized deductions,” for purposes of the employer's satisfaction of the H-1B required wage obligation, means a deduction from wages in complete compliance with one of the following three sets of criteria (
(i) Deduction which is required by law (
(ii) Deduction which is authorized by a collective bargaining agreement, or is reasonable and customary in the occupation and/or area of employment (
(iii) Deduction which meets the following requirements:
(A) Is made in accordance with a voluntary, written authorization by the employee (Note to paragraph (c)(9)(iii)(A): an employee's mere acceptance of a job which carries a deduction as a condition of employment does not constitute voluntary authorization, even if such condition were stated in writing);
(B) Is for a matter principally for the benefit of the employee (Note to paragraph (c)(9)(iii)(B): housing and food allowances would be considered to meet this “benefit of employee” standard, unless the employee is in travel status, or unless the circumstances indicate that the arrangements for the employee's housing or food are principally for the convenience or benefit of the employer (
(C) Is not a recoupment of the employer's business expense (
(D) Is an amount that does not exceed the fair market value or the actual cost (whichever is lower) of the matter covered (Note to paragraph (c)(9)(iii)(D): The employer must document the cost and value); and
(E) Is an amount that does not exceed the limits set for garnishment of wages in the Consumer Credit Protection Act, 15 U.S.C. 1673, and the regulations of the Secretary pursuant to that Act, 29 CFR part 870, under which garnishment(s) may not exceed 25 percent of an employee's disposable earnings for a workweek.
(10) A deduction from or reduction in the payment of the required wage is not authorized (and is therefore prohibited) for the following purposes (
(i) A penalty paid by the H-1B nonimmigrant for ceasing employment with the employer prior to a date agreed to by the nonimmigrant and the employer.
(A) The employer is not permitted to require (directly or indirectly) that the nonimmigrant pay a penalty for ceasing employment with the employer prior to an agreed date. Therefore, the employer shall not make any deduction from or reduction in the payment of the required wage to collect such a penalty.
(B) The employer is permitted to receive
(C) The distinction between liquidated damages (which are permissible) and a penalty (which is prohibited) is to be made on the basis of the applicable State law. In general, the laws of the various States recognize that
(ii)
(11) Any unauthorized deduction taken from wages is considered by the Department to be non-payment of that amount of wages, and in the event of an investigation, will result in back wage assessment (plus civil money penalties and/or disqualification from H-1B and other immigration programs, if willful).
(12) Where the employer depresses the employee's wages below the required wage by imposing on the employee any of the employer's business expenses(s), the Department will consider the amount to be an unauthorized deduction from wages even if the matter is not shown in the employer's payroll records as a deduction.
(13) Where the employer makes deduction(s) for repayment of loan(s) or wage advance(s) made to the employee, the Department, in the event of an investigation, will require the employer to establish the legitimacy and purpose(s) of the loan(s) or wage advance(s), with reference to the standards set out in paragraph (c)(9)(iii) of this section.
(d)
(2) In the event the Administrator obtains a prevailing wage from ETA pursuant to paragraph (d)(1) of this section, the employer may challenge the ETA prevailing wage only through the Employment Service complaint system. (See 20 CFR part 658, subpart E.) Notwithstanding the provisions of 20 CFR 658.421 and 658.426, the appeal shall be initiated at the ETA regional office which services the State in which the place of employment is located (see § 655.721 for the ETA regional offices and their jurisdictions). Such challenge shall be initiated within 10 days after the employer receives ETA's prevailing wage determination from the Administrator. In any challenge to the wage determination, neither ETA nor the SESA shall divulge any employer wage data which was collected under the promise of confidentiality.
(i) Where the employer timely challenges an ETA prevailing wage determination obtained by the Administrator, the 30-day investigative period shall be suspended until the employer obtains a final ruling from the Employment Service complaint system. Upon such final ruling, the investigation and any subsequent enforcement proceeding shall continue, with ETA's prevailing wage determination serving as the conclusive determination for all purposes.
(ii) Where the employer does not challenge ETA's prevailing wage determination obtained by the Administrator, such determination shall be deemed to have been accepted by the employer as accurate and appropriate (as to the amount of the wage) and thereafter shall not be subject to challenge in a hearing pursuant to § 655.835.
(3) For purposes of this paragraph (d), ETA may consult with the appropriate SESA to ascertain the prevailing wage applicable under the circumstances of the particular complaint.
(4) No prevailing wage violation will be found if the employer paid a wage that is equal to, or more than 95 percent of, the prevailing wage as required by paragraph (a)(2)(iii) of this section. If the employer paid a wage that is less than 95 percent of the prevailing wage, the employer will be required to pay 100 percent of the prevailing wage.
An employer seeking to employ H-1B nonimmigrants in specialty occupations or as fashion models of distinguished merit and ability shall state on Form ETA 9035 that the employment of H-1B nonimmigrants will not adversely affect the working conditions of workers similarly employed in the area of intended employment.
(a)
(b)
(a) * * *
(1) * * *
(i) * * *
(ii) Where there is no collective bargaining representative, the employer shall, on or within 30 days before the date the LCA is filed with ETA, provide a notice of the filing of the LCA. The notice shall indicate that H-1B nonimmigrants are sought; the number of such nonimmigrants the employer is seeking; the occupational classification; the wages offered; the period of employment; the location(s) at which the H-1B nonimmigrants will be employed; and that the LCA is available for public inspection at the H-1B employer's principal place of business in the U.S. or at the worksite. The notice shall also include the statement: “Complaints alleging misrepresentation of material facts in the labor condition application and/or failure to comply with the terms of the labor condition application may be filed with any office of the Wage and Hour Division of the United States Department of Labor.” If the employer is an H-1B-dependent employer or a willful violator, and the LCA is not being used only for exempt H-1B nonimmigrants, the notice shall also set forth the nondisplacement and recruitment obligations to which the employer has attested, and shall include the following additional statement: “Complaints alleging failure to offer employment to an equally or better qualified U.S. worker, or an employer's misrepresentation regarding such offer(s) of employment, may be filed with the Department of Justice, 10th Street & Constitution Avenue, NW., Washington, DC 20530.” The notice shall be provided in one of the two following manners:
(A)
(B)
(2) Where the employer places any H-1B nonimmigrant(s) at one or more worksites not contemplated at the time of filing the application, but which are within the area of intended employment listed on the LCA, the employer is required to post electronic or hard-copy notice(s) at such worksite(s), in the manner described in paragraph (a)(1) of this section, on or before the date any H-1B nonimmigrant begins work.
(3) The employer shall, no later than the date the H-1B nonimmigrant reports to work at the place of employment, provide the H-1B nonimmigrant with a copy of the LCA (Form ETA 9035) certified by the Department. Upon request, the employer shall provide the H-1B nonimmigrant with a copy of the cover pages, Form ETA 9035CP.
(a) Subject to the conditions specified in this section, an employer may make short-term placements or assignments of H-1B nonimmigrant(s) at worksite(s) (place(s) of employment) in areas not listed on the employer's approved LCA(s) without filing new labor condition application(s) for such area(s).
(b) The following conditions must be fully satisfied by an employer during all short-term placement(s) or assignment(s) of H-1B nonimmigrant(s) at worksite(s) (place(s) of employment) in areas not listed on the employer's approved LCA(s):
(1) The employer has fully satisfied the requirements of §§ 655.730 through 655.734 with regard to worksite(s) located within the area(s) of intended employment listed on the employer's LCA(s).
(2) The employer shall not place, assign, lease, or otherwise contract out any H-1B nonimmigrant(s) to any worksite where there is a strike or lockout in the course of a labor dispute in the same occupational classification(s) as that of the H-1B nonimmigrant(s).
(3) For every day the H-1B nonimmigrant(s) is placed or assigned outside the area(s) of employment listed on the approved LCA(s) for such worker(s), the employer shall:
(i) Continue to pay such worker(s) the required wage (based on the prevailing wage at such worker's(s') permanent worksite, or the employer's actual wage, whichever is higher);
(ii) Pay such worker(s) the actual cost of lodging (for both workdays and non-workdays); and
(iii) Pay such worker(s) the actual cost of travel, meals and incidental or miscellaneous expenses (for both workdays and non-workdays).
(c) An employer's short-term placement(s) or assignment(s) of H-1B nonimmigrant(s) at any worksite(s) in an area of employment not listed on the employer's approved LCA(s) shall not exceed a total of 30 workdays in a one-year period for any H-1B nonimmigrant at any worksite or combination of worksites in the area,
(1) The H-1B nonimmigrant continues to maintain an office or work station at his/her permanent worksite (
(2) The H-1B nonimmigrant spends a substantial amount of time at the permanent worksite in a one-year period; and
(3) The H-1B nonimmigrant's U.S. residence or place of abode is located in the area of the permanent worksite and not in the area of the short-term worksite(s) (
(d) For purposes of this section, the term
(e) The employer may not make short-term placement(s) or assignment(s) of H-1B nonimmigrant(s) under this section at worksite(s) in any area of employment for which the employer has a certified LCA for the occupational classification. Further, an H-1B nonimmigrant entering the U.S. is required to be placed at a worksite in accordance with the approved petition and supporting LCA; thus, the nonimmigrant's initial placement or assignment cannot be a short-term placement under this section. In addition, the employer may not continuously rotate H-1B nonimmigrants on short-term placement or assignment to an area of employment in a manner that would defeat the purpose of the short-term placement option, which is to provide the employer with flexibility in assignments to afford enough time to obtain an approved LCA for an area where it intends to have a continuing presence (
(f) Once any H-1B nonimmigrant's short-term placement or assignment has reached the workday limit specified in paragraph (c) of this section in an area of employment, the employer shall take one of the following actions:
(1) File an LCA and obtain ETA certification, and thereafter place any H-1B nonimmigrant(s) in that occupational classification at worksite(s) in that area pursuant to the LCA (
(2) Immediately terminate the placement of any H-1B nonimmigrant(s) who reaches the workday limit in an area of employment. No worker may exceed the workday limit within the one-year period specified in paragraph (d) of this section, unless the employer first files an LCA for the occupational classification for the area of employment. Employers are cautioned that if any worker exceeds the workday limit within the one-year period, then the employer has violated the terms of its LCA(s) and the regulations in the subpart, and thereafter the short-term placement option cannot be used by the employer for H-1B nonimmigrants in that occupational classification in that area of employment.
(g) An employer is not required to use the short-term placement option provided by this section, but may choose to make each placement or assignment of an H-1B nonimmigrant at worksite(s) in a new area of employment pursuant to a new LCA for such area. Further, an employer which uses the short-term placement option is not required to continue to use the option. Such an employer may, at any time during the period identified in paragraphs (c) and (d) of this section, file an LCA for the new area of employment (performing all actions required in connection with such LCA); upon certification of such LCA, the employer's obligation to comply with this section concerning short-term placement shall terminate. (However, see § 655.731(c)(9)(iii)(C) regarding payment of business expenses for
Two attestation obligations apply only to two types of employers: H-1B-dependent employers (as described in paragraphs (a) through (e) of this section) and employers found to have willfully violated their H-1B obligations within a certain five-year period (as described in paragraph (f) of this section). These obligations apply only to certain labor condition applications filed by such employers (as described in paragraph (g) of this section), and do not apply to LCAs filed by such employers solely for the employment of “exempt” H-1B nonimmigrants (as described in paragraph (g) of this section and § 655.737). These obligations require that such employers not displace U.S. workers from jobs (as described in § 655.738) and that such employers recruit U.S. workers before hiring H-1B nonimmigrants (as described in § 655.739).
(a)
(1) “H-1B-dependent employer,” for purposes of THIS subpart H and subpart I of this part, means an employer that meets one of the three following standards, which are based on the ratio between the employer's total work force employed in the U.S. (including both U.S. workers and H-1B nonimmigrants, and measured according to full-time equivalent employees) and the employer's H-1B nonimmigrant employees (a “head count” including both full-time and part-time H-1B employees) —
(i)(A) The employer has 25 or fewer full-time equivalent employees who are employed in the U.S.; and
(B) Employs more than seven H-1B nonimmigrants;
(ii)(A) The employer has at least 26 but not more than 50 full-time equivalent employees who are employed in the U.S.; and
(B) Employs more than 12 H-1B nonimmigrant; or
(iii)(A) The employer has at least 51 full-time equivalent employees who are employed in the U.S.; and
(B) Employs H-1B nonimmigrants in a number that is equal to at least 15 percent of the number of such full-time equivalent employees.
(2)
(i) The determination of FTEs is to include only persons employed by the employer (as defined in § 655.715), and does not include
(ii) The determination of FTEs is to be based on the following records:
(A) To determine the number of employees, the employer's quarterly tax statement (or similar document) is to be used (assuming there is no issue as to whether all employees are listed on the tax statement); and
(B) To determine the number of hours of work by part-time employees, for purposes of aggregating such employees to FTEs, the last payroll (or the payrolls over the previous quarter, if the last payroll is not representative) is to be used, or where hours of work records are not maintained, other available information is to be used to make a reasonable approximation of hours of work (such as a standard work schedule). (But see paragraph (a)(2)(iii)(B)(
(iii)
(A) The number of full-time employees. A full-time employee is one who works 40 or more hours per week, unless the employer can show that less than 40 hours per week is full-time employment in its regular course of business (however, in no event would less than 35 hours per week be considered to be full-time employment). Each full-time employee equals one FTE (
(B) The part-time employees aggregated to a number of full-time equivalents, if the employer has part-time employees. For purposes of this determination, a part-time employee is one who regularly works fewer than the number of hours per week which constitutes full-time employment (
(
(
(iv)
(b)
(1) Pursuant to section 414(b) of the IRC and related regulations, all employees “within a controlled group of corporations” (within the meaning of section 1563(a) of the IRC, determined without regard to section 1563(a)(4) and (e)(3)(C)), will be treated as employees of a single employer. A
(i) A
(ii) A
(iii) A
(2) Pursuant to section 414(c) of the IRC and related regulations, all employees of trades or businesses (whether or not incorporated) that are under common control are treated as employees of a single employer. 26 U.S.C. 414(c), 26 CFR 1.414(c)-2.
(i) Trades or businesses are under common control if they are included in:
(A) A parent-subsidiary group of trades or businesses;
(B) A brother-sister group of trades or businesses; or
(C) A combined group of trades or businesses.
(ii) Trades or businesses include sole proprietorships, partnerships, estates, trusts or corporations.
(ii) The standards for determining whether trades or businesses are under common control are similar to standards that apply to controlled groups of corporations. However, pursuant to 26 CFR 1.414(c)-2(b)(2), ownership of at least an 80 percent interest in the profits or capital interest of a partnership or the actuarial value of a trust or estate constitutes a controlling interest in a trade or business.
(3) Pursuant to section 414(m) of the IRC and related regulations, all employees of the members of an affiliated service group are treated as employees of a single employer. 26 U.S.C. 414(m).
(i) An
(A) A second service organization that is a shareholder or partner in the first organization and that regularly performs services for the first organization (or is regularly associated with the first organization in performing services for third persons); or
(B) Any other organization if :
(
(
(ii) [Reserved]
(4) Section 414(o) of the IRC provides that the Department of the Treasury may issue regulations addressing other business arrangements, including employee leasing, in which a group of employees are treated as employed by the same employer. However, the Department of the Treasury has not issued any regulations under this provision. Therefore, that section of the IRC will not be taken into account in determining what groups of employees are considered employees of a single employer for purposes of H-1B dependency determinations, unless regulations are issued by the Treasury Department during the period the dependency provisions of the ACWIA are effective.
(5) The definitions of “single employer” set forth in paragraphs (b)(1) through (b)(3) of this section are established by the Internal Revenue Service (IRS) in regulations located at 26 CFR 1.414(b)-1(a), (c)-2 and (m)-5. Guidance on these definitions should be sought from those regulations or from the IRS.
(c)
(1)
(2)
(i)
(ii)
(d)
(1)
(2)
(3)
(4)
(5)
(i) Change from non-H-1B-dependent to H-1B-dependent. An employer which experiences this change in its workforce is not required to make or maintain any record of its determination of the change of its H-1B-dependency status. The employer is not required to file new LCA(s) (which would accurately state its H-1B-dependent status), unless it seeks to hire new H-1B nonimmigrants or extend the status of existing H-1B nonimmigrants (see paragraph (g) of this section).
(ii) Change from H-1B-dependent to non-H-1B-dependent. An employer which experiences this change in its workforce is required to perform a full calculation of its status (as described in paragraph (c) of this section) and to retain a copy of such calculation in its records. If the employer seeks to hire new H-1B nonimmigrants or extend the status of existing H-1B nonimmigrants (see paragraph (g) of this section), the employer shall either file new LCAs reflecting its non-H-1B-dependent status or use its existing certified LCAs reflecting an H-1B-dependency status, in which case it shall continue to be bound by the dependent-employer attestations on such LCAs. In the event of an enforcement action pursuant to subpart I of this part, the employer's records to be made available to the Administrator would enable the employer to show and the Administrator to verify the employer's determination (
(6)
(7)
(e)
(f)
(1)
(i) A finding of violation by the employer (as described in paragraph (f)(1) (ii)) is entered in either of the following two types of enforcement proceeding:
(A) A Department of Labor proceeding under section 212(n)(2) of the Act (8 U.S.C. 1182(n)(2)(C) and subpart I of this part; or
(B) A Department of Justice proceeding under section 212(n)(5) of the Act (8 U.S.C. 1182(n)(5).
(ii) The agency finds that the employer has committed either a willful failure or a misrepresentation of a material fact during the five-year period preceding the filing of the LCA; and
(iii) The agency's finding is entered on or after October 21, 1998.
(2) For purposes of this paragraph, “willful failure” means a violation which is a “willful failure” as defined in § 655.805(c).
(g) What LCAs are subject to the additional attestation obligations?
(1) An employer that is “H-1B-dependent” (under the standards described in paragraphs (a) through (e) of this section) or is a “willful violator” (under the standards described in paragraph (f) of this section) is subject to the attestation obligations regarding displacement of U.S. workers and recruitment of U.S. workers (under the standards described in §§ 655.738 and 655.739, respectively) for all LCAs that are filed during the time period specified in paragraph (2)(g) of this section, to be used to support any petitions for new H-1B nonimmigrants or any requests for extensions of status for existing H-1B nonimmigrants. An LCA which does not accurately indicate the employer's H-1B-dependency status or willful violator status shall not be used to support H-1B petitions or requests for extensions. Further, an employer which falsely attests to non-H-1B-dependency status, or which experiences a change of status to H-1B-dependency but continues to use the LCA to support new H-1B petitions or requests for extension of status shall—despite the LCA designation of non-H-1B-dependency—be held to its obligations to comply with the attestation requirements concerning nondisplacement of U.S. workers and recruitment of U.S. workers (as described in §§ 655.738 and 655.739, respectively), as explicitly acknowledged and agreed on the LCA.
(2) During the period between January 19, 2001 and October 1, 2003, any employer that is “H-1B-dependent” (under the standards described in paragraphs (a) through (e) of this section) or is a “willful violator” (under the standards described in paragraph (f) of this section) shall file a new LCA accurately indicating that status in order to be able to file petition(s) for new H-1B nonimmigrant(s) or request(s) for extension(s) of status for existing H-1B nonimmigrant(s). An LCA filed prior to January 19, 2001 may not be used to support petition(s) for new H-1B nonimmigrant(s) or request(s) for extension(s) of status for existing H-1B nonimmigrants.
(3) An employer that files an LCA indicating “H-1B-dependent” and/or “willful violator” status may also indicate on the LCA that all the H-1B nonimmigrants to be employed pursuant to that LCA will be “exempt H-1B nonimmigrants” as described in § 655.737. Such an LCA is not subject to the additional LCA attestation obligations,
(4) The special provisions for H-1B-dependent employers and willful violator employers do not apply to LCAs filed after October 1, 2003 (see 8 U.S.C. 1182(n)(1)(E)(ii)). However, all LCAs filed prior to that date, and containing the additional attestation obligations described in this section and §§ 655.737 through 655.739, will remain in effect with regard to those obligations, for so long as any H-1B nonimmigrant(s) employed pursuant to the LCA(s) remain employed by the employer.
(a) An employer that is H-1B-dependent or a willful violator of the H-1B program requirements (as described in § 655.736) is subject to the attestation obligations regarding displacement of U.S. workers and recruitment of U.S. workers (as described in §§ 655.738 and 655.739, respectively) for all LCAs that are filed during the time period specified in § 655.736(g). However, these additional obligations do not apply to an LCA filed by such an employer if the LCA is used only for the employment of “exempt” H-1B nonimmigrants (through petitions and/or extensions of status) as described in this section.
(b)
(1) Receives wages (including cash bonuses and similar compensation) at an annual rate equal to at least $60,000; or
(2) Has attained a master's or higher degree (or its equivalent) in a specialty related to the intended employment.
(c)
(d)
(1) “Master's or higher degree (or its equivalent),” for purposes of this section means a foreign academic degree from an institution which is accredited or recognized under the law of the country where the degree was obtained, and which is equivalent to a master's or higher degree issued by a U.S. academic institution. The equivalence to a U.S. academic degree cannot be established through experience or through demonstration of expertise in the academic specialty (
(2) “Specialty related to the intended employment,” for purposes of this section, means that the academic degree is in a specialty which is generally accepted in the industry or occupation as an appropriate or necessary credential or skill for the person who undertakes the employment in question. A “specialty” which is not generally accepted as appropriate or necessary to the employment would not be considered to be sufficiently “related' to afford the H-1B nonimmigrant status as an “exempt H-1B nonimmigrant.”
(e)
(1) If the employer makes the designation of “exempt” H-1B nonimmigrant(s) on the LCA, then the INS—as part of the adjudication of the H-1B petition or request for extension of status—will determine the worker's “exempt” status, since an H-1B petition must be supported by an LCA consistent with the petition (
(2) If the employer makes the designation of “exempt” H-1B nonimmigrants on the LCA, but is found in an enforcement action under subpart I of this part to have used the LCA to employ nonimmigrants who are, in fact, not exempt, then the employer will be subject to a finding that it failed to comply with the nondisplacement and recruitment obligations (as described in §§ 655.738 and 655.739, respectively) and may be assessed appropriate penalties and remedies.
(3) If the employer does not make the designation of “exempt” H-1B nonimmigrants on the LCA, then the employer has waived the option of not being subject to the additional LCA attestation obligations on the basis of employing only exempt H-1B nonimmigrants under the LCA. In the event of an investigation under subpart I of this part, the Administrator will not consider the question of the nonimmigrant(s)'s “exempt” status in determining whether an H-1B-dependent employer or willful violator employer has complied with such additional LCA attestation obligations.
An employer that is subject to these additional attestation obligations (under the standards described in § 655.736) is prohibited from displacement of any U.S. worker(s)—whether directly (in its own workforce) or secondarily (at a worksite of a second employer)—under the standards set out in this section.
(a)
(b)
(1)
(i) Discharge of a U.S. worker for inadequate performance, violation of workplace rules, or other cause related to the worker's performance or behavior on the job;
(ii) A U.S. worker's voluntary departure or voluntary retirement (to be assessed in light of the totality of the circumstances, under established principles concerning “constructive discharge” of workers who are pressured to leave employment);
(iii) Expiration of a grant or contract under which a U.S. worker is employed, other than a temporary employment contract entered into in order to evade the employer's non-displacement obligation. The question is whether the loss of the contract or grant has caused the worker's loss of employment. It would not be a layoff where the job loss results from the expiration of a grant or contract without which there is no alternative funding or need for the U.S. worker's position on that or any other grant or contract (
(iv) A U.S. worker who loses employment is offered, as an alternative to such loss, a similar employment opportunity with the same employer (or, in the case of secondary displacement at a worksite of a second employer, as described in paragraph (d) of this section, a similar employment opportunity with either employer) at equivalent or higher compensation and benefits than the position from which the U.S. worker was discharged, regardless of whether or not the U.S. worker accepts the offer. The validity of the offer of a similar employment opportunity will be assessed in light of the following factors:
(A) The offer is a
(B) The offered job provides the U.S. worker an opportunity similar to that provided in the job from which he/she is discharged, in terms such as a similar level of authority, discretion, and responsibility, a similar opportunity for advancement within the organization, and similar tenure and work scheduling;
(C) The offered job provides the U.S. worker equivalent or higher compensation and benefits to those provided in the job from which he/she is discharged. The comparison of compensation and benefits includes all forms of remuneration for employment, whether or not called wages and irrespective of the time of payment (
(2)
(i) Job responsibilities. The job of the H-1B nonimmigrant must involve essentially the same duties and responsibilities as the job from which the U.S. worker was laid off. The
(ii) Qualifications and experience of the workers. The qualifications of the laid off U.S. worker must be substantially equivalent to the qualifications of the H-1B nonimmigrant. The comparison is to be confined to the experience and qualifications (
(iii) Area of employment. The job of the H-1B nonimmigrant must be located in the same area of employment as the job from which the U.S. worker was laid off. The comparison of the locations of the jobs is confined to the area within normal commuting distance of the worksite or physical location where the work of the H-1B nonimmigrant is or will be performed. For purposes of this comparison, if both such worksites or locations are within a Metropolitan Statistical Area or a Primary Metropolitan Statistical Area, they will be deemed to be within the same area of employment.
(3) The worker's rights under a collective bargaining agreement or other employment contract are not affected by the employer's LCA obligations as to non-displacement of such worker.
(c)
(1)
(2)
(3)
(d)
(1)
(2)
(i) The nonimmigrant performs duties in whole or in part at one or more worksites owned, operated, or controlled by the other/secondary employer; and
(ii) There are indicia of an employment relationship between the nonimmigrant and the other/secondary employer. The relationship between the H-1B-nonimmigrant and the other/secondary need not constitute an “employment” relationship (as defined in § 655.715), and the applicability of the secondary displacement provision does not establish such a relationship. Relevant indicia of an employment relationship include:
(A) The other/secondary employer has the right to control when, where, and how the nonimmigrant performs the job (the presence of this indicia would suggest that the relationship between the nonimmigrant and the other/secondary employer approaches the relationship which triggers the secondary displacement provision);
(B) The other/secondary employer furnishes the tools, materials, and equipment;
(C) The work is performed on the premises of the other/secondary employer (this indicia alone would not trigger the secondary displacement provision);
(D) There is a continuing relationship between the nonimmigrant and the other/secondary employer;
(E) The other/secondary employer has the right to assign additional projects to the nonimmigrant;
(F) The other/secondary employer sets the hours of work and the duration of the job;
(G) The work performed by the nonimmigrant is part of the regular business (including governmental, educational, and non-profit operations) of the other/secondary employer;
(H) The other/secondary employer is itself in business; and
(I) The other/secondary employer can discharge the nonimmigrant from providing services.
(3)
(4)
(5)
(i) The H-1B employer is required to exercise due diligence and to make a reasonable effort to enquire about potential secondary displacement, through methods which may include (but are not limited to)—
(A) Securing and retaining a written assurance from the other/secondary employer that it has not and does not intend to displace a similarly-employed U.S. worker within the prescribed period;
(B) Preparing and retaining a memorandum to the file, prepared at the same time or promptly after receiving the other/secondary employer's oral statement that it has not and does not intend to displace a similarly-employed U.S. worker within the prescribed period (such memorandum shall include the substance of the conversation, the date of the communication, and the names of the individuals who participated in the conversation, including the person(s) who made the inquiry on behalf of the H-1B employer and made the statement on behalf of the other/secondary employer); or
(C) including a secondary displacement clause in the contract between the H-1B employer and the other/secondary employer, whereby the other/secondary employer would agree that it has not and will not displace similarly-employed U.S. workers within the prescribed period.
(ii) The employer's exercise of due diligence may require further, more particularized inquiry of the other/secondary employer in circumstances where there is information which indicates that U.S. worker(s) have been or will be displaced (
(e)
(1) Concerning
(2) Concerning
An employer that is subject to this additional attestation obligation (under the standards described in § 655.736) is required—prior to filing the LCA or any petition or request for extension of status supported by the LCA—to take good faith steps to recruit U. S. workers in the United States for the job(s) in the United States for which the H-1B nonimmigrant(s) is/are sought. The recruitment shall use procedures that meet industry-wide standards and offer compensation that is at least as great as the required wage to be paid to H-1B nonimmigrants pursuant to § 655.731(a) (
(a) “
(b) “
(c) “
(d) “
(1) Solicitation methods may be either external or internal to the employer's workforce (with internal solicitation to include current and former employees).
(2) Solicitation methods may be either active (where an employer takes positive, proactive steps to identify potential applicants and to get information about its job openings into the hands of such person(s)) or passive (where potential applicants find their way to an employer's job announcements).
(i) Active solicitation methods include direct communication to incumbent workers in the employer's operation and to workers previously employed in the employer's operation and elsewhere in the industry; providing training to incumbent workers in the employer's organization; contact and outreach through collective bargaining organizations, trade associations and professional associations; participation in job fairs (including at minority-serving institutions, community/junior colleges, and vocational/technical colleges); use of placement services of colleges, universities, community/junior colleges, and business/trade schools; use of public and/or private employment agencies, referral agencies, or recruitment agencies (“headhunters”).
(ii) Passive solicitation methods include advertising in general distribution publications, trade or professional journals, or special interest publications (
(e)
(1) Both internal and external recruitment (
(2) At least some active recruitment, whether internal (
(f)
(1)
(2)
(3)
(g)
(h)
(i) What documentation is the employer required to make or maintain, concerning its recruitment of U.S. workers?
(1) The employer shall maintain documentation of the recruiting methods used, including the places and dates of the advertisements and postings or other recruitment methods used, the content of the advertisements and postings, and the compensation terms (if such are not included in the content of the advertisements and postings). The documentation may be in any form, including copies of advertisements or proofs from the publisher, the order or confirmation from the publisher, an electronic or printed copy of the Internet posting, or a memorandum to the file.
(2) The employer shall retain any documentation it has received or prepared concerning the treatment of applicants, such as copies of applications and/or related documents, test papers, rating forms, records regarding interviews, and records of job offers and applicants' responses. To comply with this requirement, the employer is not required to create any documentation it would not otherwise create.
(3) The documentation maintained by the employer shall be made available to the Administrator in the event of an enforcement action pursuant to subpart I of this part. The documentation shall be maintained for the period of time specified in § 655.760.
(4) The employer's public access file maintained in accordance with § 655.760 shall contain information summarizing the principal recruitment methods used and the time frame(s) in which such recruitment methods were used. This may be accomplished either through a memorandum or through copies of pertinent documents.
(j) In addition to conducting good faith recruitment of U.S. workers (as described in paragraphs (a) through (h) of this section), the employer is required to have offered the job to any U.S. worker who applies and is equally or better qualified for the job than the H-1B nonimmigrant (see 8 U.S.C. 1182(n)(1)(G)(i)(II)); this requirement is enforced by the Department of Justice (see 8 U.S.C. 1182(n)(5); 20 CFR 655.705(c)).
(a) * * *
(2) * * *
(ii) When the Form ETA 9035 contains obvious inaccuracies. An obvious inaccuracy will be found if the employer files an application in error—
(b) * * *
(2) Requests for withdrawals shall be in writing and shall be directed to the ETA service center at the following address: ETA Application Processing Center, P.O. Box 13640, Philadelphia PA 19101.
(a) * * *
(1) A copy of the completed labor condition application, Form ETA 9035, and cover pages, Form ETA 9035CP. If the application is submitted by facsimile transmission, the application containing the original signature shall be maintained by the employer.
(6) A summary of the benefits offered to U.S. workers in the same occupational classifications as H-1B nonimmigrants, a statement as to how any differentiation in benefits is made where not all employees are offered or receive the same benefits (such summary need not include proprietary information such as the costs of the benefits to the employer, or the details of stock options or incentive distributions), and/or, where applicable, a statement that some/all H-1B nonimmigrants are receiving “home country” benefits (
(7) Where the employer undergoes a change in corporate structure, a sworn statement by a responsible official of the
(8) Where the employer utilizes the definition of “single employer”in the IRC, a list of any entities included as part of the single employer in making the determination as to its H-1B-dependency status (
(9) Where the employer is H-1B-dependent and/or a willful violator, and indicates on the LCA(s) that only “exempt” H-1B nonimmigrants will be employed, a list of such “exempt” H-1B nonimmigrants (
(10) Where the employer is H-1B-dependent or a willful violator, a summary of the recruitment methods used and the time frames of recruitment of U.S. workers (or copies of pertinent documents showing this information) (
(c)
(a)
(b)
(c)
(d)
(a) No employer subject to this subpart I or subpart H of this part shall intimidate, threaten, restrain, coerce, blacklist, discharge or in any other manner discriminate against an employee (which term includes a former employee or an applicant for employment) because the employee has—
(1) Disclosed information to the employer, or to any other person, that the employee reasonably believes evidences a violation of section 212(n) of the INA or any regulation relating to section 212(n), including this subpart I and subpart H of this part and any pertinent regulations of INS or the Department of Justice; or
(2) Cooperated or sought to cooperate in an investigation or other proceeding concerning the employer's compliance with the requirements of section 212(n) of the INA or any regulation relating to section 212(n).
(b) It shall be a violation of this section for any employer to engage in the conduct described in paragraph (a) of this section. Such conduct shall be subject to the penalties prescribed by section 212(n)(2)(C)(ii) of the INA and § 655.810(b)(2),
(c) Pursuant to section 212(n)(2)(v) of the INA, an H-1B nonimmigrant who has filed a complaint alleging that an employer has discriminated against the employee in violation of paragraph (d)(1) of this section (or § 655.501(a)) may be allowed to seek other appropriate employment in the United States, provided the employee is otherwise eligible to remain and work in the United States. Such employment may not exceed the maximum period of stay authorized for a nonimmigrant classified under section 212(n) of the INA. Further information concerning this provision should be sought from the Immigration and Naturalization Service.
(a) The Administrator, through investigation, shall determine whether an H-1B employer has—
(1) Filed a labor condition application with ETA which misrepresents a material fact (Note to paragraph (a)(1): Federal criminal statutes provide penalties of up to $10,000 and/or imprisonment of up to five years for knowing and willful submission of false statements to the Federal Government. 18 U.S.C. 1001; see also 18 U.S.C. 1546);
(2) Failed to pay wages (including benefits provided as compensation for services), as required under § 655.731 (including payment of wages for certain nonproductive time);
(3) Failed to provide working conditions as required under § 655.732;
(4) Filed a labor condition application for H-1B nonimmigrants during a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment, as prohibited by § 655.733;
(5) Failed to provide notice of the filing of the labor condition application, as required in § 655.734;
(6) Failed to specify accurately on the labor condition application the number of workers sought, the occupational classification in which the H-1B nonimmigrant(s) will be employed, or the wage rate and conditions under
(7) Displaced a U.S. worker (including displacement of a U.S. worker employed by a secondary employer at the worksite where an H-1B worker is placed), as prohibited by § 655.738 (if applicable);
(8) Failed to make the required displacement inquiry of another employer at a worksite where H-1B nonimmigrant(s) were placed, as set forth in § 655.738 (if applicable);
(9) Failed to recruit in good faith, as required by § 655.739 (if applicable);
(10) Displaced a U.S. worker in the course of committing a willful violation of any of the conditions in paragraphs (a)(2) through (9) of this section, or willful misrepresentation of a material fact on a labor condition application;
(11) Required or accepted from an H-1B nonimmigrant payment or remittance of the additional $500/$1,000 fee incurred in filing an H-1B petition with the INS, as prohibited by § 655.731(c)(10)(ii);
(12) Required or attempted to require an H-1B nonimmigrant to pay a penalty for ceasing employment prior to an agreed upon date, as prohibited by § 655.731(c)(10)(i);
(13) Discriminated against an employee for protected conduct, as prohibited by § 655.801;
(14) Failed to make available for public examination the application and necessary document(s) at the employer's principal place of business or worksite, as required by § 655.760(a);
(15) Failed to maintain documentation, as required by this part; and
(16) Failed otherwise to comply in any other manner with the provisions of this subpart I or subpart H of this part.
(b) The determination letter setting forth the investigation findings (see § 655.815) shall specify if the violations were found to be substantial or willful. Penalties may be assessed and disqualification ordered for violation of the provisions in paragraphs (a)(5), (6), or (9) of this section only if the violation was found to be substantial or willful. The penalties may be assessed and disqualification ordered for violation of the provisions in paragraphs (a)(2) or (3) of this section only if the violation was found to be willful, but the Secretary may order payment of back wages (including benefits) due for such violation whether or not the violation was willful.
(c) For purposes of this part,
(d) The provisions of this part become applicable upon the date that the employer's LCA is certified, pursuant to §§ 655.740(a)(1) and 655.750, whether or not the employer hires any H-1B nonimmigrants in the occupation for the period of employment covered in the labor condition application. If the period of employment specified in the labor condition application expires or the employer withdraws the application in accordance with § 655.750(b), the provisions of this part will no longer apply with respect to such application, except as provided in § 655.750(b)(3) and (4).
(a) Any aggrieved party, as defined in § 655.715, may file a complaint alleging a violation described in § 655.805(a). The procedures for filing a complaint by an aggrieved party and its processing by the Administrator are set forth in this section. The procedures for filing and processing information alleging violations from persons or organizations that are not aggrieved parties are set forth in § 655.807. With regard to complaints filed by any aggrieved person or organization—
(1) No particular form of complaint is required, except that the complaint shall be written or, if oral, shall be reduced to writing by the Wage and Hour Division official who receives the complaint.
(2) The complaint shall set forth sufficient facts for the Administrator to determine whether there is reasonable cause to believe that a violation as described in § 655.805 has been committed, and therefore that an investigation is warranted. This determination shall be made within 10 days of the date that the complaint is received by a Wage and Hour Division official. If the Administrator determines that the complaint fails to present reasonable cause for an investigation, the Administrator shall so notify the complainant, who may submit a new complaint, with such additional information as may be necessary. No hearing or appeal pursuant to this subpart shall be available where the Administrator determines that an investigation on a complaint is not warranted.
(3) If the Administrator determines that an investigation on a complaint is warranted, the complaint shall be accepted for filing; an investigation shall be conducted and a determination issued within 30 calendar days of the date of filing. The time for the investigation may be increased with the consent of the employer and the complainant, or if, for reasons outside of the control of the Administrator, the Administrator needs additional time to obtain information needed from the employer or other sources to determine whether a violation has occurred. No hearing or appeal pursuant to this subpart shall be available regarding the Administrator's determination that an investigation on a complaint is warranted.
(4) In the event that the Administrator seeks a prevailing wage determination from ETA pursuant to § 655.731(d), or advice as to prevailing working conditions from ETA pursuant to § 655.732(c)(2), the 30-day investigation period shall be suspended from the date of the Administrator's request to the date of the Administrator's receipt of the wage determination (or, in the event that the employer challenges the wage determination through the Employment Service complaint system, to the date of the completion of such complaint process).
(5) A complaint must be filed not later than 12 months after the latest date on which the alleged violation(s) were committed, which would be the date on which the employer allegedly failed to perform an action or fulfill a condition specified in the LCA, or the date on which the employer, through its action or inaction, allegedly demonstrated a misrepresentation of a material fact in the LCA. This jurisdictional bar does not affect the scope of the remedies which may be assessed by the Administrator. Where, for example, a complaint is timely filed, back wages may be assessed for a period prior to one year before the filing of a complaint.
(6) A complaint may be submitted to any local Wage and Hour Division office. The addresses of such offices are found in local telephone directories, and on the Department's informational site on the Internet at
(b) When an investigation has been conducted, the Administrator shall, pursuant to § 655.815, issue a written determination as described in § 655.805(a).
(a) Persons who are not aggrieved parties may submit information concerning possible violations of the provisions described in § 655.805(a)(1) through (4) and (a)(7) through (9). No particular form is required to submit the information, except that the information shall be submitted in writing or, if oral, shall be reduced to writing by the Wage and Hour Division official who receives the information. An optional form shall be available to be used in setting forth the information. The information provided shall include:
(1) The identity of the person submitting the information and the person's relationship, if any, to the employer or other information concerning the person's basis for having knowledge of the employer's employment practices or its compliance with the requirements of this subpart I and subpart H of this part; and
(2) A description of the possible violation, including a description of the facts known to the person submitting the information, in sufficient detail for the Secretary to determine if there is reasonable cause to believe that the employer has committed a willful violation of the provisions described in § 655.805(a)(1), (2), (3), (4), (7), (8), or (9).
(b) The Administrator may interview the person submitting the information as appropriate to obtain further information to determine whether the requirements of this section are met. In addition, the person submitting information under this section shall be informed that his or her identity will not be disclosed to the employer without his or her permission.
(c) Information concerning possible violations must be submitted not later than 12 months after the latest date on which the alleged violation(s) were committed. The 12-month period shall be applied in the manner described in § 655.806(a)(5).
(d) Upon receipt of the information, the Administrator shall promptly review the information submitted and determine:
(1) Does the source likely possess knowledge of the employer's practices or employment conditions or the employer's compliance with the requirements of subpart H of this part?
(2) Has the source provided specific credible information alleging a violation of the requirements of the conditions described in § 655.805(a)(1), (2), (3), (4), (7), (8), or (9)?
(3) Does the information in support of the allegations appear to provide reasonable cause to believe that the employer has committed a violation of the provisions described in § 655.805(a)(1), (2), (3), (4), (7), (8), or (9), and that
(i) The alleged violation is willful?
(ii) The employer has engaged in a pattern or practice of violations? or
(iii) The employer has committed substantial violations, affecting multiple employees?
(e) “Information” within the meaning of this section does not include information from an officer or employee of the Department of Labor unless it was obtained in the course of a lawful investigation, and does not include information submitted by the employer to the Attorney General or the Secretary in securing the employment of an H-1B nonimmigrant.
(f)(1) Except as provided in paragraph (f)(2) of this section, where the Administrator has received information from a source other than an aggrieved party which satisfies all of the requirements of paragraphs (a) through (d) of this section, or where the Administrator or another agency of the Department obtains such information in a lawful investigation under this or any other section of the INA or any other Act, the Administrator (by mail or facsimile transmission) shall promptly notify the employer that the information has been received, describe the nature of the allegation in sufficient detail to permit the employer to respond, and request that the employer respond to the allegation within 10 days of its receipt of the notification. The Administrator shall not identify the source or information which would reveal the identity of the source without his or her permission.
(2) The Administrator may dispense with notification to the employer of the alleged violations if the Administrator determines that such notification might interfere with an effort to secure the employer's compliance. This determination shall not be subject to review in any administrative proceeding and shall not be subject to judicial review.
(g) After receipt of any response to the allegations provided by the employer, the Administrator will promptly review all of the information received and determine whether the allegations should be referred to the Secretary for a determination whether an investigation should be commenced by the Administrator.
(h) If the Administrator refers the allegations to the Secretary, the Secretary shall make a determination as to whether to authorize an investigation under this section.
(1) No investigation shall be commenced unless the Secretary (or the Deputy Secretary or other Acting Secretary in the absence or disability) personally authorizes the investigation and certifies—
(i) That the information provided under paragraph (a) of this section or obtained pursuant to a lawful investigation by the Department of Labor provides reasonable cause to believe that the employer has committed a violation of the provisions described in § 655.805(a)(1), (2), (3), (4), (7), (8), or (9);
(ii) That there is reasonable cause to believe the alleged violations are willful, that the employer has engaged in a pattern or practice of such violations, or that the employer has committed substantial violations, affecting multiple employees; and
(iii) That the other requirements of paragraphs (a) through (d) of this section have been met.
(2) No hearing shall be available from a decision by the Administrator declining to refer allegations addressed by this section to the Secretary, and none shall be available from a decision by the Secretary certifying or declining to certify that an investigation is warranted.
(i) If the Secretary issues a certification, an investigation shall be conducted and a determination issued within 30 days after the certification is received by the local Wage and Hour office undertaking the investigation. The time for the investigation may be increased upon the agreement of the employer and the Administrator or, if for reasons outside of the control of the Administrator, additional time is necessary to obtain information needed from the employer or other sources to determine whether a violation has occurred.
(j) In the event that the Administrator seeks a prevailing wage determination from ETA pursuant to § 655.731(d), or advice as to prevailing working conditions from ETA pursuant to § 655.732(c)(2), the 30-day investigation period shall be suspended from the date of the Administrator's request to the date of the Administrator's receipt of the wage determination (or, in the event that the employer challenges the wage determination through the Employment Service complaint system, to the date of the completion of such complaint process).
(k) Following the investigation, the Administrator shall issue a determination in accordance with to § 655.815.
(l) This section shall expire on September 30, 2003 unless section
(a) The Administrator may conduct random investigations of an employer during a five-year period beginning with the date of any of the following findings, provided such date is on or after October 21, 1998:
(1) A finding by the Secretary that the employer willfully violated
any of the provisions described in § 655.805(a)(1) through (9);
(2) A finding by the Secretary that the employer willfully misrepresented material fact(s) in a labor condition application filed pursuant to § 655.730; or
(3) A finding by the Attorney General that the employer willfully failed to meet the condition of section 212(n)(1)(G)(i)(II) of the INA (pertaining to an offer of employment to an equally or better qualified U.S. worker).
(b) A finding within the meaning of this section is a final, unappealed decision of the agency. See §§ 655.520(a), 655.845(c), and 655.855(b).
(c) An investigation pursuant to this section may be made at any time the Administrator, in the exercise of discretion, considers appropriate, without regard to whether the Administrator has reason to believe a violation of the provisions of this subpart I and subpart H of this part has been committed. Following an investigation, the Administrator shall issue a determination in accordance with § 655.815.
(a) Upon determining that an employer has failed to pay wages or provide fringe benefits as required by § 655.731 and § 655.732, the Administrator shall assess and oversee the payment of back wages or fringe benefits to any H-1B nonimmigrant who has not been paid or provided fringe benefits as required. The back wages or fringe benefits shall be equal to the difference between the amount that should have been paid and the amount that actually was paid to (or with respect to) such nonimmigrant(s).
(b)
(1) An amount not to exceed $1,000 per violation for:
(i) A violation pertaining to strike/lockout (§ 655.733) or displacement of U.S. workers (§ 655.738);
(ii) A substantial violation pertaining to notification (§ 655.734), labor condition application specificity (§ 655.730), or recruitment of U.S. workers (§ 655.739);
(iii) A misrepresentation of material fact on the labor condition application;
(iv) An early-termination penalty paid by the employee (§ 655.731(c)(10)(i));
(v) Payment by the employee of the additional $500/$1,000 filing fee (§ 655.731(c)(10)(ii)); or
(vi) Violation of the requirements of the regulations in this subpart I and subpart H of this part or the provisions regarding public access (§ 655.760) where the violation impedes the ability of the Administrator to determine whether a violation of section 212(n) of the INA has occurred or the ability of members of the public to have information needed to file a complaint or information regarding alleged violations of section 212(n) of the INA;
(2) An amount not to exceed $5,000 per violation for:
(i) A willful failure pertaining to wages/working conditions (§§ 655.731, 655.732), strike/lockout, notification, labor condition application specificity, displacement (including placement of an H-1B nonimmigrant at a worksite where the other/secondary employer displaces a U.S. worker), or recruitment;
(ii) A willful misrepresentation of a material fact on the labor condition application; or
(iii) Discrimination against an employee (§ 655.801(a)); or
(3) An amount not to exceed $35,000 per violation where an employer (whether or not the employer is an H-1B-dependent employer or willful violator) displaced a U.S. worker employed by the employer in the period beginning 90 days before and ending 90 days after the filing of an H-1B petition in conjunction with any of the following violations:
(i) A willful violation of any of the provisions described in § 655.805(a)(2) through (9) pertaining to wages/working condition, strike/lockout, notification, labor condition application specificity, displacement, or recruitment; or
(ii) A willful misrepresentation of a material fact on the labor condition application (§ 655.805(a)(1)).
(c) In determining the amount of the civil money penalty to be assessed, the Administrator shall consider the type of violation committed and other relevant factors. The factors which may be considered include, but are not limited to, the following:
(1) Previous history of violation, or violations, by the employer under the INA and this subpart I or subpart H of this part;
(2) The number of workers affected by the violation or violations;
(3) The gravity of the violation or violations;
(4) Efforts made by the employer in good faith to comply with the provisions of 8 U.S.C. 1182(n) and this subparts H and I of this part;
(5) The employer's explanation of the violation or violations;
(6) The employer's commitment to future compliance; and
(7) The extent to which the employer achieved a financial gain due to the violation, or the potential financial loss, potential injury or adverse effect with respect to other parties.
(d)
(1) At least one year for violation(s) of any of the provisions specified in paragraph (b)(1)(i) through (iii) of this section;
(2) At least two years for violation(s) of any of the provisions specified in paragraph (b)(2) of this section; or
(3) At least three years, for violation(s) specified in paragraph (b)(3) of this section.
(e)
(2) If the Administrator finds a violation of the provisions specified in paragraph (b)(1)(i) through (iii), (b)(2), or (b)(3) of this section, the Administrator may impose such other administrative remedies as the Administrator determines to be appropriate, including but not limited to reinstatement of workers who were discriminated against in violation of § 655.805(a), reinstatement of displaced U.S. workers, back wages to workers who have been displaced or whose employment has been terminated in violation of these
(f) The civil money penalties, back wages, and/or any other remedy(ies) determined by the Administrator to be appropriate are immediately due for payment or performance upon the assessment by the Administrator, or upon the decision by an administrative law judge where a hearing is timely requested, or upon the decision by the Secretary where review is granted. The employer shall remit the amount of the civil money penalty by certified check or money order made payable to the order of “Wage and Hour Division, Labor.” The remittance shall be delivered or mailed to the Wage and Hour Division office in the manner directed in the Administrator's notice of determination. The payment or performance of any other remedy prescribed by the Administrator shall follow procedures established by the Administrator. Distribution of back wages shall be administered in accordance with existing procedures established by the Administrator.
(g) The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended (28 U.S.C. 2461 note), requires that inflationary adjustments to civil money penalties in accordance with a specified cost-of-living formula be made, by regulation, at least every four years. The adjustments are to be based on changes in the Consumer Price Index for all Urban Consumers (CPI-U) for the U.S. City Average for All Items. The adjusted amounts will be published in the
(a) The Administrator's determination, issued pursuant to § 655.806, 655.807, or 655.808, shall be served on the complainant, the employer, and other known interested parties by personal service or by certified mail at the parties' last known addresses. Where service by certified mail is not accepted by the party, the Administrator may exercise discretion to serve the determination by regular mail.
(c) * * *
(5) Where appropriate, inform the parties that, pursuant to § 655.855, the Administrator shall notify ETA and the Attorney General of the occurrence of a violation by the employer.
(a) Any interested party desiring review of a determination issued under §§ 655.805 and 655.815, including judicial review, shall make a request for such an administrative hearing in writing to the Chief Administrative Law Judge at the address stated in the notice of determination. If such a request for an administrative hearing is timely filed, the Administrator's determination shall be inoperative unless and until the case is dismissed or the Administrative Law Judge issues an order affirming the decision.
(c) In the event that the Administrator's determination of wage violation(s) and computation of back wages are based upon a wage determination obtained by the Administrator from ETA during the investigation (pursuant to § 655.731(d)) and the administrative law judge determines that the Administrator's request was not warranted (under the standards in § 655.731(d)), the administrative law judge shall remand the matter to the Administrator for further proceedings on the existence of wage violations and/or the amount(s) of back wages owed. If there is no such determination and remand by the administrative law judge, the administrative law judge shall accept as final and accurate the wage determination obtained from ETA or, in the event either the employer or another interested party filed a timely complaint through the Employment Service complaint system, the final wage determination resulting from that process. See § 655.731; see also 20 CFR 658.420 through 658.426. Under no circumstances shall the administrative law judge determine the validity of the wage determination or require submission into evidence or disclosure of source data or the names of establishments contacted in developing the survey which is the basis for the prevailing wage determination.
(a) The Administrator or any interested party desiring review of the decision and order of an administrative law judge, including judicial review, shall petition the Department's Administrative Review Board (Board) to review the decision and order. To be effective, such petition shall be received by the Board within 30 calendar days of the date of the decision and order. Copies of the petition shall be served on all parties and on the administrative law judge.
(b) No particular form is prescribed for any petition for the Board's review permitted by this subpart. However, any such petition shall:
(1) Be dated;
(2) Be typewritten or legibly written;
(3) Specify the issue or issues stated in the administrative law judge decision and order giving rise to such petition;
(4) State the specific reason or reasons why the party petitioning for review believes such decision and order are in error;
(5) Be signed by the party filing the petition or by an authorized representative of such party;
(6) Include the address at which such party or authorized representative desires to receive further communications relating thereto; and
(7) Attach copies of the administrative law judge's's decision and order, and any other record documents which would assist the Board in determining whether review is warranted.
(c) Whenever the Board determines to review the decision and order of an administrative law judge, a notice of the Board's determination shall be served upon the administrative law judge, upon the Office of Administrative Law Judges, and upon all parties to the proceeding within 30 calendar days after the Board's receipt of the petition for review. If the Board determines that
(d) Upon receipt of the Board's notice, the Office of Administrative Law Judges shall within 15 calendar days forward the complete hearing record to the Board.
(e) The Board's notice shall specify:
(1) The issue or issues to be reviewed;
(2) The form in which submissions shall be made by the parties (
(3) The time within which such submissions shall be made.
(f) All documents submitted to the Board shall be filed with the Administrative Review Board, Room S-4309, U.S. Department of Labor, Washington, DC 20210. An original and two copies of all documents shall be filed. Documents are not deemed filed with the Board until actually received by the Board. All documents, including documents filed by mail, shall be received by the Board either on or before the due date.
(g) Copies of all documents filed with the Board shall be served upon all other parties involved in the proceeding. Service upon the Administrator shall be in accordance with § 655.830(b).
(h) The Board's final decision shall be issued within 180 calendar days from the date of the notice of intent to review. The Board's decision shall be served upon all parties and the administrative law judge.
(i) Upon issuance of the Board's decision, the Board shall transmit the entire record to the Chief Administrative Law Judge for custody pursuant to § 655.850.
(a) The Administrator shall notify the Attorney General and ETA of the final determination of any violation requiring that the Attorney General not approve petitions filed by an employer. The Administrator's notification will address the type of violation committed by the employer and the appropriate statutory period for disqualification of the employer from approval of petitions. Violations requiring notification to the Attorney General are identified in § 655.810(f).
(b) The Administrator shall notify the Attorney General and ETA upon the earliest of the following events:
(1) Where the Administrator determines that there is a basis for a finding of violation by an employer, and no timely request for hearing is made pursuant to § 655.820; or
(2) Where, after a hearing, the administrative law judge issues a decision and order finding a violation by an employer, and no timely petition for review is filed with the Department's Administrative Review Board (Board) pursuant to § 655.845; or
(3) Where a timely petition for review is filed from an administrative law judge's decision finding a violation and the Board either declines within 30 days to entertain the appeal, pursuant to § 655.845(c), or the Board reviews and affirms the administrative law judge's determination; or
(4) Where the administrative law judge finds that there was no violation by an employer, and the Board, upon review, issues a decision pursuant to § 655.845, holding that a violation was committed by an employer.
(c) The Attorney General, upon receipt of notification from the Administrator pursuant to paragraph (a) of this section, shall not approve petitions filed with respect to that employer under sections 204 or 214(c) of the INA (8 U.S.C. 1154 and 1184(c)) for nonimmigrants to be employed by the employer, for the period of time provided by the Act and described in § 655.810(f).
(d) ETA, upon receipt of the Administrator's notice pursuant to paragraph (a) of this section, shall invalidate the employer's labor condition application(s) under this subpart I and subpart H of this part, and shall not accept for filing any application or attestation submitted by the employer under 20 CFR part 656 or subparts A, B, C, D, E, H, or I of this part, for the same calendar period as specified by the Attorney General.
8 U.S.C. 1182(a)(5)(A), 1182(p)(1); 29 U.S.C. 49
(a) * * *
(1) Except as provided in paragraphs (c) and (d) of this section, if the job opportunity is in an occupation which is subject to a wage determination in the area under the Davis-Bacon Act, 40 U.S.C. 276a
(b) For purposes of this section, except as provided in paragraphs (c) and (d), “similarly employed” shall mean “having substantially comparable jobs in the occupational category in the area of intended employment,” except that, if no such workers are employed by employers other than the employer applicant in the area of intended employment, “similarly employed” shall mean:
(c) In computing the prevailing wage for a job opportunity in an occupational classification in an area of intended employment in the case of an employee of an institution of higher education, or a related or affiliated nonprofit entity; a nonprofit research organization; or a Governmental research organization, the prevailing wage level shall only take into account employees at such institutions and organizations in the area of intended employment.
(1) The organizations listed in this paragraph (c) are defined as follows:
(i)
(A) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate;
(B) Is legally authorized within such State to provide a program of education beyond secondary education;
(C) Provides an educational program for which the institution awards a
(D) Is a public or other nonprofit institution; and
(E) Is accredited by a nationally recognized accrediting agency or association, or if not so accredited, is an institution that has been granted preaccreditation status by such an agency or association that has been recognized by the Secretary for the granting of preaccreditation status, and the Secretary has determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or association within a reasonable time.
(ii)
(iii)
(2)
(d) With respect to a
(1) A team that is a member of an association of six or more professional sports teams whose total combined revenues exceed $10,000,000 per year, if the association governs the conduct of its members and regulates the contests and exhibitions in which its member teams regularly engage; or
(2) Any minor league team that is affiliated with such an association.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Final rule.
The Federal Acquisition Regulatory Council (FAR Council) is issuing a final rule clarifying what constitutes a “satisfactory record of integrity and business ethics” in making contractor responsibility determinations under FAR Part 9, and revising certain cost principles under FAR Part 31 related to labor relations, and legal and other proceedings.
The FAR Secretariat, Room 4035, GS Building, Washington, DC, 20405, at (202) 501-4755 for information pertaining to status or publication schedules. For clarification of content, contact Mr. Ralph De Stefano, Procurement Analyst, at (202) 501-1758. Please cite FAC 97-21, FAR case 1999-010.
The Federal Acquisition Regulatory Council (FAR Council) is issuing a final rule that clarifies what constitutes a “satisfactory record of integrity and business ethics” in making contractor responsibility determinations under FAR Part 9, and revises certain cost principles under FAR Part 31 relating to labor relations, and legal and other proceedings. Public comment on proposed revisions on these matters had previously been requested on July 9, 1999 (64 FR 37360) and on June 30, 2000 (65 FR 40830).
The main portion of this rule makes clarifying revisions to the existing regulatory language in FAR Part 9 (and adds an accompanying certification in FAR Part 52) regarding what constitutes a “satisfactory record of integrity and business ethics” in making contractor “responsibility” determinations.
By statute, Federal agencies are required to award contracts to “responsible” sources. 10 U.S.C. 2305(b); 41 U.S.C. 253b. A “responsible source” is defined to be a prospective contractor which, among other things, “has a satisfactory record of integrity and business ethics.” 41 U.S.C. 403(7)(D). Congress enacted this definition of “responsible source” in 1984 (Pub. L. 98-369, Div. B, Title VII, § 2731, 98 Stat. 1195).
The statutory “responsibility” requirement has been implemented in FAR Part 9. The FAR states that “[p]urchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only.” 48 CFR 9.103(a). The FAR makes clear that “an affirmative determination” of responsibility is required. “No purchase or award shall be made unless the contracting officer makes an affirmative determination of responsibility. In the absence of information clearly indicating that the prospective contractor is responsible, the contracting officer shall make a determination of nonresponsibility.” 48 CFR 9.103(b); see also 48 CFR 9.103(c) (“A prospective contractor must affirmatively demonstrate its responsibility . . .”).
In accordance with the statutory definition of “responsible source,” the FAR states that, “[t]o be determined responsible, a prospective contractor must . . . Have a satisfactory record of integrity and business ethics . . . .” 48 CFR 9.104-1. Beyond this simple reiteration of the statutory language, however, the FAR has not elaborated upon what it means to have “a satisfactory record of integrity and business ethics,” nor has the FAR provided contracting officers with a framework to guide their analysis and assist them in making this statutorily-required determination.
This lack of guidance has an unfortunate consequence: Contracting officers are extremely reluctant, absent clear guidance, to exercise their discretion in making this determination. As a result, the Government continues to award contracts to firms that have violated procurement and other Federal laws, in some cases repeatedly. For example, in a study of the top 100 defense contractors over a four year period, the General Accounting Office found over 100 instances in which contractors had either been convicted of or signed settlements after charges of violations—of procurement-related law alone. These companies paid more than $400 million in fines and restitution, in some cases for multiple violations. If the analysis had been expanded to include compliance with other laws, the concern might well have been even broader.
It is clear that, in many cases, the Government continues to do business with contractors who violate laws, sometimes repeatedly. By giving contracting officers a clearer basis for declining to contract with such businesses, the Government can improve the integrity of the contracting process, reduce the risk of fraud or noncompliance, and encourage standards of integrity and compliance with the law.
In July 1999, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) requested comment on a proposed rule that would amend the FAR's responsibility provisions so as to assist contracting officers in making the statutory determination of whether a prospective contractor has “a satisfactory record of integrity and business ethics.” (64 FR 37360, July 9, 1999). In fleshing out what constitutes “a satisfactory record of integrity and business ethics,” the preamble to the proposed rule stated that a prospective contractor's “record of compliance with laws” constitutes “a relevant and important part of the overall responsibility determination”
The Councils, therefore, requested comment on a revision to the FAR that “clarifies the existing rule by providing several examples of what constitutes an unsatisfactory record of compliance with laws and regulations.”
The Councils provided the public with 120 days in which to submit
In response to the comments received on the July 1999 proposal, the FAR Council developed a revised proposal. Again, as with the original proposal, the purpose of the revised proposal was to provide contracting officers with guidance in evaluating a prospective contractor's “record of compliance with laws and regulations” in connection with the statutory “responsibility” determination that the contractor has “a satisfactory record of integrity and business ethics.” In addition, the Council proposed additional procedural protections for contractors, to provide further confidence that contracting officers would not misuse their discretion.
The FAR Council requested comment on the revised proposal in June 2000 (65 FR 40830, June 30, 2000). In the preamble to the June 2000 notice, the FAR Council summarized the comments that had been submitted on the July 1999 proposal.
In response to the concerns raised by commenters on the July 1999 proposal, the FAR Council revised the proposed amendment to FAR Part 9 in a number of respects. First, to aid contracting officers in evaluating a prospective contractor's “record of compliance with laws and regulations,” the FAR Council proposed additional language, for inclusion in FAR 9.103, to state that contracting officers “should coordinate nonresponsibility determinations based upon integrity and business ethics with legal counsel (see 9.104-1(d)).” Second, the FAR Council modified the amendments that had been proposed in July 1999 for FAR Part 9, “to confirm that satisfactory compliance with Federal laws including tax laws, labor and employment laws, environmental laws, antitrust laws, and consumer protection laws would be part of a satisfactory record of integrity and business ethics.” 65 FR 40830. Under the proposed amendments, as modified by the FAR Council, FAR 9.104-1(d) would state that a prospective contractor shall “Have a satisfactory record of integrity and business ethics including satisfactory compliance with Federal laws including tax laws, labor and employment laws, environmental laws, antitrust laws, and consumer protection laws. (See 9.104-3(c).)” The concluding reference to FAR 9.104-3(c) was to add new language, contained in the FAR Council's amended proposal, that would assist contracting officers by providing them with a framework for their evaluation of a prospective contractor's “record of compliance with laws”:
“(c) Integrity and business ethics. In making a determination of responsibility based upon integrity and business ethics (see 9.104-1(d)), contracting officers may consider all relevant credible information. Contracting officers should give greatest weight to decisions within the past three years preceding the offer as follows—
“(1) Convictions of or civil judgments rendered against the prospective contractor for:
“(i) Commission of Fraud or a criminal offense in connection with obtaining, attempting to obtain or performing a public (Federal, State or local) contract or subcontract;
“(ii) Violation of Federal or State antitrust statutes relating to the submission of offers;
“(iii) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, or receiving stolen property;
“(iv) Any other Federal or State felony convictions or pending Federal or State felony indictments; and
“(v) Federal court judgments in civil cases brought by the United States against the contractor.
“(2) Federal decisions by Federal Administrative Law Judges or Federal Administrative Judges and adjudicatory decisions, orders, or complaints issued by any Federal agency, board, or commission, indicating the contractor has been found to have violated Federal tax, labor and employment, antitrust, or consumer protection law.”
In connection with this proposed framework, the FAR Council also proposed a corresponding amendment to the existing contractor responsibility certification in FAR Part 52. This amended certification would provide information that the contracting officer would need in conducting the evaluation in proposed FAR 9.104-3(c). Under the FAR Council's proposal, a prospective contractor would certify whether it “has” or “has not”—
“within the past three years, been convicted of any felonies (or has any felony indictment currently pending against them) arising from any Federal tax, labor and employment, environmental, antitrust, or consumer protection laws, had any adverse court judgments in civil cases against them arising from any Federal tax, labor and employment, environmental, antitrust, or consumer protection laws in which the United States brought the action, or been found by a Federal Administrative Law Judge, Federal Administrative Judge, agency, board or commission to have violated any Federal tax, labor and employment, environmental, antitrust, or consumer protection law. If the respondent has answered “has” to the above question, please explain the nature of the violation and whether any fines, penalties, or damages were assessed.”
Finally, as the preamble explained, the FAR Council proposed to amend FAR Parts 14 and 15 to “ensure that if non-responsibility is the basis for rejection of [a party] from the competition, then the contracting officer must provide the reasons for the non-responsibility determination in the notification” that is provided to that unsuccessful bidder and offeror (65 FR 40831, June 30, 2000).
The FAR Council provided the public with 60 days in which to submit comments on the revised proposal. Substantially fewer comments were submitted on the June 2000 proposal than had been submitted on the July 1999 proposal. Whereas more than 1500 comment letters were submitted on the original proposal, only about 300 comments were received on the revised proposal (and a substantial number of these 300 comments were an essentially identical form letter). Again, as with the original proposal, some commenters expressed strong support for the revised proposal, while others strongly opposed it. Moreover, commenters on both sides focused on what they viewed as problems with the specific regulatory language in the revised proposal and, in some cases, they suggested alternative language.
In addition to the revised proposals to amend FAR Parts 9, 14, 15, and 52 on the contractor responsibility determination, the June 2000 notice also proposed amendments to FAR Part 31 to address the allowability, in the context of cost-based Federal contracts, of costs relating to labor relations and to legal and other proceedings (65 FR 40833, June 30, 2000). These proposed amendments to Part 31 were a revision of the amendments that had been proposed in the July 9, 1999 notice (65 FR 37361). As the preamble to the June 2000 notice explained, the FAR Council revised its proposed Part 31 amendments in response to the concerns that were expressed by the 135 commenters who had addressed the Part 31 proposal in the July 1999 notice.
In sum, the June 2000 notice proposed that the following costs would not be allowable (
Based on its consideration of the comments received on both proposed rules, the FAR Council is issuing this final rule. It provides both clearer guidance than in earlier proposals and additional procedural protection for contractors, to ensure that contracting officer discretion is fairly employed. The following changes are being made to the FAR:
• FAR 31.205-21, Labor Relations Costs. This rule makes unallowable those costs incurred for activities that assist, promote or deter unionization.
• FAR 31.305-47, Costs related to legal and other proceedings. This rule makes unallowable those costs incurred in civil or administrative proceedings brought by a government where the contractor violated, or failed to comply with a law or regulation.
• FAR 52.209-5, Certification Regarding Debarment, Suspension, Proposed Debarment, and Other Responsibility Matters. The current certification is amended to require offerors to certify regarding violations of tax, labor and employment, environmental, antitrust, or consumer protection laws adjudicated within the last three years. This certification will impose less burden on contractors than the certification that had been proposed in June 2000. It is a check-the-box certification under which a contractor will have to provide additional detailed information only upon the request of the contracting officer, and this is expected to occur generally only when that contractor is the apparently successful offeror.
• FAR 52.212-3(h), Certification Regarding Debarment, Suspension or Ineligibility for Award (Executive Order 12549). The existing certification is amended to require offerors to certify regarding violations of tax, labor and employment, environmental, antitrust, or consumer protection laws adjudicated within the last three years. This certification will impose less burden on contractors than the certification that had been proposed in June 2000. It is a check-the-box certification under which a contractor will have to provide additional detailed information only upon the request of the contracting officer, and this is expected to occur generally only when that contractor is the apparently successful offeror.
As noted above, some commenters on the June 2000 notice expressed strong support for the revised proposal, while others strongly opposed it. Moreover, commenters on both sides focused on what they viewed as problems with the specific regulatory language in the revised proposal and, in some cases, they suggested alternative language. The following summarizes the significant comments received on the June 2000 proposal, outlines the FAR Council's responses to those comments, and explains the significant changes that have been made to the amendments that were proposed in June 2000.
A number of commenters who opposed the proposed revisions argued that the proposal would provide contracting officers with excessive discretion to eliminate prospective contractors from Federal contracting opportunities, and that this would result in arbitrary responsibility decisions. We believe that the final rule addresses this concern. As has been noted earlier in this notice, and in the two proposals, the purpose behind this rulemaking is to provide contracting officers with additional guidance to assist them in making the “integrity and business ethics” responsibility determination. In addition to providing this guidance, the FAR Council has added a number of safeguards that are discussed elsewhere in this notice. The FAR Council believes
Many of the commenters who expressed opposition to the proposed FAR amendments on the “integrity and business ethics” responsibility determination made arguments that, in one way or another, essentially questioned the underlying premise of this rulemaking and advocated that no revisions be made to the FAR in this area. These commenters asserted that there is no evidence of a “problem” which this rulemaking would “solve”; they argued that there is no “nexus” between a prospective contractor's record of compliance with the law and the contracting officer's “responsibility” determination; they argued that a non-responsibility determination, based on a prospective contractor's lack of compliance with legal requirements, is an impermissible “extra penalty” for the violations; they argued that contracting officers are not qualified to evaluate a prospective contractor's record of compliance with the law; they argued that the proposed revisions to FAR Part 9 would not have the effect of clarifying the responsibility determination, and in this regard they argued that the proposed language was vague; and they contended that proposed language (and, in particular, the proposed certification) would not improve the efficiency of the procurement process and, in this regard, they argued that a “cost-benefit” analysis of the proposal should be conducted.
These arguments had also been raised in comments that opposed the July 1999 proposal, and the FAR Council continues to disagree with them. This rulemaking is intended to provide contracting officers with additional guidance on making an “integrity and business ethics” determination that, by statute, contracting officers are already required to make. As noted above, the FAR has previously not provided any elaboration on what it means to have “a satisfactory record of integrity and business ethics” the FAR has simply restated the statutory language that a “responsible source” is one that has “a satisfactory record of integrity and business ethics.” The fundamental premise of the two prior proposals, and this final rule, is that an evaluation of a prospective contractor's “record of integrity and business ethics” necessarily needs to include an evaluation of its “record of compliance with laws and regulations.” (64 FR 37360, July 9, 1999.) This is an eminently reasonable proposition. Operating in a law-abiding (as opposed to law-breaking) manner is an essential component of having “integrity” and “ethics” and, therefore, of meeting the overall requirement of responsibility that businesses contracting with the Government—and with private businesses—must meet.” Thus, while the statutory criterion of “integrity and business ethics” is not limited to (
Scrutinizing a prospective contractor's record of compliance with the law, and making satisfactory compliance an express element of the responsibility determination, is both consistent with practices outside the Government and serves the Government's interests. First, by ensuring that its contractors possess a satisfactory record of compliance with law, the Government increases its confidence that a contractor is a responsible, reliable company that will perform the contract in an efficient, responsible and timely manner. It should also reduce the risk that compliance issues will interfere with performance of the contract.
A justification for this rulemaking, then, is that it provides contracting officers with guidance that will assist them in evaluating a prospective contractor's record of compliance with laws and, thus, in making the statutory determination of whether the prospective contractor has “a satisfactory record of integrity and business ethics.” We believe that the final rule provides useful clarifying guidance, and it has been improved through the rulemaking process, in response to the comments that were submitted on the two proposals. In particular, by establishing a hierarchy of violations of legal requirements (and obtaining factual information on such violations), the final rule provides a more refined and objective framework for making this determination than simply having contracting officers make determinations about “integrity and business ethics”—as they have done in the past—without the benefit of any clarifying guidance. We believe that contracting officers, guided by the amended regulation and in consultation with agency legal counsel, are in a better position to make the “integrity and business ethics” determination. In sum, we believe that the final rule represents a considerable improvement over the existing rule, which has required contracting officers to make an “integrity and business ethics” determination, but has not provided them with any guidance on how they should make that determination.
Another objection to the June 2000 proposal was the argument by some commenters that the proposed rule, in their view, does not provide prospective contractors with “due process.” This was also raised by those commenters who argued that the Federal agencies should rely instead on the debarment process, which they argued is sufficient to address the problem posed by prospective contractors who do not comply with the law. On the debarment issue, some commenters also argued that a nonresponsibility determination that is based on a prospective contractor's unsatisfactory record of complying with legal requirements constitutes a “de facto debarment” and, as such, is inappropriate.
The FAR Council does not agree with these objections. Contrary to the commenters who argued otherwise, prospective contractors will have at least as much (if not more) “due process” than they have enjoyed up to now with respect to the responsibility determination of whether they have “a satisfactory record of integrity and business ethics.” In summary, prospective contractors know, in advance, the general substantive standard that they are being evaluated under
In response to the arguments in the comments about the debarment process, we do not agree that the separate debarment process is a substitute for a responsibility determination on “integrity and business ethics.” The fact that a prospective contractor is not found on the list of debarred entities does not mean, ipso facto, that the prospective contractor therefore has a “satisfactory record of integrity and business ethics.” Contracting officers are required, by statute and the FAR, to make an “affirmative determination of responsibility” (FAR 9.103(b)), which must include a determination by the contracting officer that the prospective contractor has a “satisfactory record of integrity and business ethics.” As we have explained, the “integrity and business ethics” responsibility determination needs to include an evaluation by the contracting officer of the prospective contractor's record of compliance with legal requirements. We also do not agree with those commenters who argued that a nonresponsibility determination, based on a prospective contractor's violation of legal requirements, would necessarily constitute a “de facto debarment.” The fact that a contracting officer has determined that a prospective contractor is nonresponsible does not mean that the prospective contractor has therefore been subject to a “de facto debarment.” As the case law makes clear, the determination of whether a prospective contractor has been subject to a “de facto debarment” is fact-sensitive and depends on the circumstances of each case. Moreover, if a prospective contractor believes that it has been subject to a “de facto debarment,” then it will continue to have the same remedy that it has had up to now: it may seek an independent review of the contracting officer's non-responsibility determination. The final rule does not diminish the remedies that are available to prospective contractors for challenging what they believe are “de facto debarments.”
Finally, a number of commenters raised concerns about the impact of the proposed rule, or about the scope of the guidance in FAR 9.104-3(c) or the scope of the certification. Some commenters stated their belief that the proposal would have a significant, and disproportionately adverse, impact on the ability of small businesses to obtain Federal contracts. As is explained below in connection with the Regulatory Flexibility Act, the FAR Council does not believe that the final rule will have a significant economic impact on a substantial number of small entities. Apart from the certification requirement, the final rule does not impose any new obligations, of any kind, on prospective contractors; they already have an obligation to comply with the law. This is not a regulation that, for example, requires a company to install certain equipment, prescribes how a company shall carry out its operations, or prohibits a company from operating in any particular way. Rather, the final rule provides guidance to contracting officers on how they are to make their statutory determination of whether a prospective contractor has a “satisfactory record of integrity and business ethics.” In addition, the FAR Council does not believe that the guidance in the final rule will have a significant or disproportionate adverse impact on small businesses generally. The FAR Council believes that, as a class, small businesses are generally law-abiding and, furthermore, the FAR Council is not aware of any evidence that would indicate (and the FAR Council has no reason to believe) that small businesses are any less law-abiding than large businesses. The FAR Council, therefore, does not expect that there will be a substantial number of small businesses that will be found, by a contracting officer, to have an unsatisfactory “record of integrity and business ethics.” Finally, for the reasons set forth in the Regulatory Flexibility Act and Paperwork Reduction Act discussions, below, the FAR Council does not believe that responding to the certification in the final rule will require small businesses to expend a significant amount of effort and resources.
A number of commenters addressed the fact that the proposed certification included only violations of Federal law. Some commenters argued that the certification should also address violations of State law. Commenters also argued that the certification should include adverse civil judgments that arose in cases that are brought by private parties, as well as in cases brought by governmental authorities. Other commenters raised the concern that the proposed certification, by focusing on violations of Federal law, could harm U.S.-based firms, as opposed to foreign-based firms. In response to these comments, it is helpful to distinguish between the standard that is set forth in FAR 9.104-1(d) and 9.104-3(c), and the implementing certification that has been added to FAR Part 52. Under the standard in FAR 9.104, the contracting officer “must consider all relevant credible information” regarding the prospective contractor's compliance with laws (the proposal stated that the contracting officer “may consider” such information; in response to comments, this was made mandatory rather than permissive). Although the final rule establishes a hierarchy of violations of law, some of which are also referenced in the certification, the contracting officer is not limited to considering only the listed violations. Again, the contracting officer “must consider all relevant credible information,” and such information relates to the prospective contractor's record of compliance with laws and regulations. The FAR Council expects that, as a practical matter, such information will generally pertain to compliance with Federal and State laws, but a prospective contractor's record of compliance with foreign laws and regulations can also constitute “relevant credible information.”
The final certification that has been added to Part 52, however, is not as broad as the standard in FAR 9.104. The certification is an implementation measure, designed to provide the contracting officer with the information that the FAR Council anticipates will be most useful in making the responsibility determination (
The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. Section 601,
With regard to the changes to Part 31 cost principles, this rule will not have a significant economic impact on a substantial number of small entities, because most contracts and subcontracts with small entities are awarded using simplified acquisition procedures or are awarded on a competitive fixed price basis, and do not require application of the cost principles contained in this rule.
With regard to the changes to Parts 9, 14, 15, and 52, this rule will not have a significant economic impact on a substantial number of small entities for the following reasons:
The law requires contracting officers to award contracts to responsible sources defined, in part, to be prospective contractors who have a record of integrity and business ethics. 41 U.S.C. 253b, 10 U.S.C. 2305(b) and 41 U.S.C. 403. The objective of this final rule is to provide an objective basis for making this judgment. The rule makes clear that contracting officers must consider violations of laws in determining whether a prospective contractor has met that standard.
A satisfactory record of integrity and business ethics is one that indicates that the prospective contractor possesses basic honesty, and that the Government can trust or rely on the contractor to perform the contract. A satisfactory record is one that includes satisfactory compliance with laws. Five categories of laws are identified—tax, labor and employment, environmental, antitrust and consumer protection laws.
In assessing whether the contractor has a record of satisfactory compliance with laws, the rule directs the contracting officer to focus on a pattern of repeated, pervasive, or significant violations of the law rather than single violations and to give the greatest weight to matters adjudicated within the last three years.
To facilitate the transfer of information between the prospective contractor and contracting officer, a new certification has been added, requiring the prospective contractor to certify regarding certain violations adjudicated within the last three years.
It is estimated that the rule will apply to approximately 171,000 small entities.
In considering whether the rule would have a significant economic impact on a substantial number of small entities, the FAR Council viewed the impact in two ways: first, by application of the statutory standard and implementing guidance for assessing a prospective contractor's record of integrity and business ethics; and two, through the requirement of a non statutory certification.
The following summarizes the significant comments received from small businesses, the basic assumptions made regarding the potential impact, and changes made in the rule to address the two areas of impact outlined above.
1. “The rule would punish a wrongdoer's employer, the small business entity employees and their local communities through the loss of work.” The purpose of this rule is not to “punish” prospective contractors for violations of law. Instead, the purpose of this rule is to provide contracting officers with additional guidance to assist them in making the determination, that they are required by statute to make, that a prospective contractor has a “satisfactory record of integrity and business ethics.” A prospective contractor's record of complying with legal requirements is a necessary component of its “record of integrity and business ethics.” No change in the rule was made as a result of this comment.
2. “The rule assumes that large and small business entities will be treated equally under the rule.” Concern was expressed that the rule does not place small entities on a level playing field with large businesses because small entities lack the resources to defend potential lawsuits and the flexibility to mitigate the impact of adverse judgments. The FAR Council is not in a position to know what factors may motivate a particular business, in any particular case, to defend itself (or not) against charges of legal wrongdoing. However, we believe that the final rule addresses the thrust of the commenters' concern. For example, through the hierarchy of violations and the certification, the rule focuses the contracting officer on criminal felony convictions and indictments, on adverse civil judgments in cases brought by the Federal Government, and on adjudicated administrative decisions, not simply unadjudicated complaints. The hierarchy of violations and the certification thus focuses on judicial and administrative processes that have their own inherent procedural protections. The FAR Council therefore has no reason for concluding that these judicial and administrative processes are inherently unfair as applied to small businesses. In addition, the guidance in the final rule instructs the contracting officer to focus on “repeated, pervasive, or significant” violations of law, rather than on isolated infractions. We therefore believe that, under the final rule, there is a “level playing field” between large and small businesses. No change in the rule was made based on size of the business offering to the Government.
3. “Lack of adequate guidance to contracting officers and their legal counsel to determine satisfactory compliance with law will/could cause the improper elimination of small business concerns from a contract award.” In response to this comment, an extended guidance statement has been added that will assist the contracting officer making this determination. However, as with any business decision, this is a judgment call requiring the contracting officer to review and analyze the facts and make a determination based on those facts. Also, the SBA Certification of Competency program remains intact requiring nonresponsibility determinations to be referred to SBA.
4. “The rule does not provide any guidance how small entities, offering as prime contractors, are to deal with responsibility determinations of their prospective
5. “The burden on small businesses is not minimized by only requiring the certification over $100,000; small businesses will still have to demonstrate their responsibility under $100,000 and the absence of a certification will deny them the opportunity to do so.” The Federal Acquisition Streamlining Act provided for the use of simplified acquisition procedures under $100,000. For example, oral solicitations are permitted under that threshold. In establishing the certification as an implementation measure, the FAR Council had to balance the need to obtain information that will be useful to the contracting officer in making the responsibility determination with the need to avoid imposing undue reporting burden on prospective contractors. The FAR Council believes that the $100,000 acquisition level is an appropriate threshold for imposition of the certification.
In developing the policies and procedures contained in the final rule, the FAR Council considered available alternative approaches and impacts of each of the alternatives on small entities. To start, however, the FAR Council was bound by statutory requirements and made certain assumptions regarding the impact on small businesses that narrowed the scope of alternatives available for consideration.
By law, a contracting officer must already make an affirmative determination of responsibility in order for a prospective contractor to be eligible for award. That determination must include an assessment of the contractor's record of integrity and business ethics. By law, a contracting officer must already make an affirmative determination of responsibility in order for a prospective contractor to be eligible for award. That determination must include an assessment of the contractor's record of integrity and business ethics. Until this point the FAR has merely restated the law and has not provided any guidance to the contracting officer on what constituted a record of integrity and business ethics. This rule intends to fill that gap and provide contracting officers with a road map for use in that decision-making process.
One alternative would be to exempt small businesses from the rule. But because the rule assists the contracting officer in making the basic statutory assessment, the FAR Council concluded that exempting small businesses would actually remove the beneficial aspect of the rule to small businesses. In addition, the FAR council believes that a prospective contractor's record of complying with legal requirements is a relevant consideration for evaluating its record of integrity and business ethics—regardless of the size of the business. Under the procurement statutes, small and large business are subject to the same “integrity and business ethics” responsibility determination. Thus, the rule does not exempt small businesses from the statutory “integrity and business ethics” determination, and the rule does not exempt small businesses from the final rule's clarifying guidance on how contracting officers should evaluate a prospective contractor's legal compliance when making this determination.
The basic policy of the Government is to award a fair share of contracts to small entities. It is not the intent of the final rule to interfere with that policy. Sufficient procedures are in place to ensure this policy is not altered and that the essence of the final rule is carried out in an equitable manner. For example, the contracting officer will still be required to forward nonresponsibility determinations for small entities to the Small Business Administration (SBA) in accordance with the certificate of competency program.
A Certificate of Competency (COC) is the certificate issued by the Small Business Administration (SBA) stating that the holder is responsible (with respect to all elements of responsibility, including, but not limited to, integrity) for the purpose of receiving and performing a specific Government contract. In accordance with FAR 19.602, upon determining and documenting that an apparent successful small business offeror lacks certain elements of responsibility, the contracting officer must refer the matter to the cognizant SBA area office. Contract award must be withheld for a period of at least 15 days while SBA reviews the referral. The SBA at that point is authorized to overturn the decision of the contracting officer and issue a COC determining that the small offeror is responsible and, therefore, eligible for award.
The FAR Council has long believed that small entities are generally law-abiding. This rulemaking process has not given the FAR Council any reason to change this view. Neither the public comment nor internal agency data indicate that a substantial number of small entities have violated applicable legal requirements in a manner that would result in a contracting officer determining that they are nonresponsible under this rule.
For example, for fiscal year 2000, the Department of Labor is reporting 536 violations of the Service Contract Act by small businesses with less than 100 employees. (For the same year, the Federal Procurement Data System shows 46,205 (through the third quarter) contract awards to small entities.) After consideration of violations of all laws by small businesses, agencies made only 20 nonresponsibility determinations based on a lack of integrity and business ethics for fiscal years 1996 through 1999 which were referred to SBA for a COC. Of that number, the SBA declined to issue a COC in 10 cases. Given these numbers, we cannot conclude that violations of laws by small entities occur in such a number as to render a substantial number nonresponsible under the provisions of this rule.
Another alternative considered was to exempt small businesses from the requirement of the certification. The FAR Council did not adopt this alternative either, for several reasons. First, the FAR Council could not conclude that the new certification (requiring all offerors for contracts greater than $100,000 to certify regarding certain violations of law adjudicated within the past three years) represented a significant economic burden to small entities. This is a check-the-box certification requiring detailed information only from offerors that respond affirmatively to the certification, and normally only from the apparent awardee. The average time required of a small business to respond to the certification should be much lower than that of a large business and most small businesses should require minimal recordkeeping. Second, the certification is a streamlined method of securing information upon which the contracting officer would make the determination that the prospective contractor has a satisfactory record of integrity and business ethics. Ultimately, this should be beneficial to small businesses in assuring that the contracting officer has the correct information upon which to make this determination.
In assessing the potential economic impact of the certification on small businesses, the FAR Council also considered the fact that the new requirement is simply an amendment to an existing certification. The current certification already requires prospective contractors to certify regarding violations adjudicated within the last three years of a number of laws at the Federal, state and local levels. The current certification already applies to both criminal and civil actions, as well as convictions and indictments. The new certification merely adds five new categories of laws and also extends to administrative actions. Consequently, the FAR Council concluded that the new requirement would not result in a significant economic impact on a substantial number of small entities.
Thus, while we believe that the rule will apply to a substantial number of small entities, we are unable to conclude that it will have a significant economic impact on a substantial number of small entities.
Notwithstanding the above, alternatives to language in the proposed rules were considered which the FAR Council believes would achieve the Government's goal and minimize the impact of small entities. Those areas were the following:
1.
2.
3.
4.
Based on the above, the FAR Council has concluded, and thereby certifies, that the rule will not have a significant economic impact on a substantial number of small entities.
This rule is not regarded as a significant rule subject to Office of Management and Budget review under Section 6(b) of the Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not considered a major rule under 5 U.S.C. Section 804.
In accordance with Section 29 of the Office of Federal Procurement Policy Act, 41 U.S.C. Section 425, the FAR Council has requested approval from the Administrator for Federal Procurement Policy for inclusion of a non-statutory Certification in the Federal Acquisition Regulation. In the absence of an Administrator, that approval has been granted by the Director of the Office of Management and Budget in accordance with the Federal Vacancies Reform Act of 1998, 5 U.S.C. 3348(b)(2).
The Paperwork Reduction Act (Pub. L. 104-13) applies because the FAR changes to Parts 9 and 52 increase the information collection requirements that have been approved by the Office of Management and Budget (OMB) under OMB Control Number 9000-0094. OMB had previously approved an annual reporting burden of 91,667 hours based on 1,100,000 respondents and 1,100,000 annual responses. The information collection provisions of this rule have been submitted to OMB but will not take effect prior to OMB approval of these provisions under the Paperwork Reduction Act.
The FAR Council analysis for the proposed rule estimated that the annual reporting burden for OMB Control Number 9000-0094 applied to only 89,995 respondents, of which approximately 50,000 would be affected by the new certification requirement. The FAR Council further estimated that the addition of this new certification requirement would increase the total burden hours by 515,000 hours, for a new total of 606,667 hours. This was based on an estimate that the additional certification would take an average of 3 hours each for 50,000 initial responses and .5 hours each for 450,000 subsequent responses that year, for a composite average of .75 hours per response. In addition, the FAR Council estimated that in 50,000 cases the contracting officer would request additional information from the respondent in accordance with FAR 9.408(a), requiring an additional 4 hours each for 30,000 initial responses, and 1 hour each for each of 20,000 subsequent responses for a composite average of 2.8 hours per response.
Several commenters addressed the estimated paperwork burden. The FAR Council considered these comments in formulation of the final rule and in the final paperwork burden analysis.
One commenter argued that the PRA burden estimate for the proposed rule was low, and the commenter pointed to an earlier (and higher) draft burden estimate that had been prepared. The higher estimate cited by the commenter reflected an earlier (unpublished) draft version of the collection of information. The FAR Council believes that its burden estimate for the proposed rule was correct. In this case, the burden estimate was being updated as the collection was being developed. It is not uncommon for an agency to revise its burden estimate as the agency develops a collection of information. Under the PRA, it is entirely appropriate for agencies, in their development of a collection of information, to seek to identify ways to decrease its burden or increase its practical utility through modifications to the collection. In addition, during the development of a collection of information, agencies often review their methodology and analysis for estimating its burden, and this review can also result in revisions to a burden estimate (this can occur even when the collection itself has not changed). In this case, after a draft (higher) burden estimate was prepared, clarifying changes were made to the collection, and it was this revised collection that was published for comment. In the course of updating the burden estimate for the collection, to take into account these clarifications, the FAR Council also reviewed its methodology and analysis for estimating the collection's burden. As a result of the clarifications and review, the burden estimate for the proposed rule was lower than the draft (informal) burden estimate that had been prepared for the prior draft of the collection. Similarly, in response to comments that were received on the proposed rule, the collection of information has been subsequently modified, and this has resulted in the burden estimate being further revised.
The paperwork burden justification for the final rule retains the estimate of 50,000 respondents and 500,000 responses per year.
One commenter states that the FAR Council's estimate appears based on suspension and debarment actions. This is incorrect. This new certification requirement has been added to the provision at 52.209-5, Certification Regarding Debarment, Suspension, Proposed Debarment, and Other Responsibility Matters and 52.212-3, Offeror Representations and Certifications—Commercial Items. One of these provisions is included in all solicitations where the contract value is expected to exceed the simplified acquisition threshold (SAT). Therefore, the same 50,000 respondents must answer all parts of the certification, whether or not they have been debarred,
Most of the 171,000 small business entities that may be affected by the new responsibility standards are not affected by the certification requirement. Only offerors responding to solicitations that exceed the simplified acquisition threshold are affected. Such small businesses are already included in the estimate of 50,000 respondents. This new certification cannot increase the number of respondents, but only increase the burden hours per respondent.
Another commenter cites Federal Procurement Data System data that the Government undertook 11.6 million procurement actions in FY 1998. The number of procurement actions is much greater than the number of contract awards that exceed the SAT. Most contract actions are under the SAT. In addition, contract actions also include orders, funding actions, additional work, or change orders. These contract actions would not require certification. For example, DoD is responsible for about half of all FPDS contract actions. In FY 1998, DoD only awarded 22,549 definitive contracts that exceeded the simplified acquisition threshold. The estimate of 500,000 responses considered the fact that each offeror, not just the ultimate awardee, must complete the required certificate.
The proposed rule required each offeror that responded affirmatively to the new certification to explain the nature of the violation and whether any fines, penalties, or damages were assessed and also permitted the contracting officer to request additional information. The paperwork burden estimate for the proposed rule included 375,000 hours for response to the certification (3 hours per initial response, 0.5 hours per subsequent response) and 140,000 hours to supply additional information requested by the contracting officer (4 hours per initial response and 1 hour per subsequent response).
The final rule does not require any information other than the certification, unless requested by the contracting officer. Therefore, we have reduced the estimated hours per response to 1 hour per initial response and 0.3 hours per subsequent response, for a total of 185,000 hours for the certification itself, a reduction of 190,000 hours. We estimate that in many acquisitions, the contracting officer will only request additional information if the otherwise apparently successful offeror has certified affirmatively. However, in some source selections, the contracting officer may request such information from all offerors in the competitive range that certified affirmatively. Therefore, we still estimate 50,000 additional requests for information from 30,000 respondents. We have retained the burden estimate of 4 hours per initial response and 1 hour per subsequent response, for a total of 140,000 hours for providing additional information.
Several commenters state that businesses wishing to do business with the Government in excess of the SAT will have to establish a system to track compliance and keep it current. As one commenter stated, no single official at any but the smallest companies is presently able to keep track of its compliance with all applicable laws, nor would they have reason to do so. We concur that most large businesses and some small businesses will probably establish a new system or augment a current system to track such compliance. Such a system would be required in any complex organization to obtain the significant reductions that we have built into estimates of subsequent response time. Therefore, we have included an estimated average of 6 hours per year for recordkeeping for each of the 30,000 respondents to the request for additional information, for a total of 180,000 annual recordkeeping hours.
The revised annual reporting burden is estimated as follows:
The Paperwork Reduction Act does not apply to the changes to FAR Part 31, Contract Cost Principles and Procedures, because these changes do not impose information collection requirements that require Office of Management and Budget approval under 44 U.S.C. 3501,
Government procurement.
Federal Acquisition Circular (FAC) 97-21 is issued under the authority of the Secretary of Defense, the Administrator of General Services, and the Administrator for the National Aeronautics and Space Administration.
All Federal Acquisition Regulation (FAR) changes and other directive material contained in FAC 97-21 are effective January 19, 2001.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 9, 14, 15, 31, and 52 as set forth below:
40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).
(b) * * * Contracting officers should coordinate nonresponsibility determinations based upon integrity and business ethics with legal counsel. * * *
(d) Have a satisfactory record of integrity and business ethics including satisfactory compliance with the law including tax laws, labor and employment laws, environmental laws, antitrust laws, and consumer protection laws.
(c)
(i) Convictions of and civil judgments rendered against the prospective contractor for—
(A) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, state or local) contract or subcontract;
(B) Violation of Federal or state antitrust statutes relating to the submission of offers;
(C) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statement, tax evasion, or receiving stolen property.
(ii) Indictments for the offenses listed in 9.104-3(c)(1)(i).
(iii) Relative to tax, labor and employment, environmental, antitrust, or consumer protection laws:
(A) Federal or state felony convictions.
(B) Adverse Federal court judgments in civil cases brought by the United States.
(C) Adverse decisions by a Federal administrative law judge, board, or commission indicating violations of law.
(D) Federal or state felony indictments.
Also, contracting officers may consider other relevant information such as civil or administrative complaints or similar actions filed by or on behalf of a federal agency, board or commission, if such action reflects an adjudicated determination by the agency.
(i) The contracting officer must reject low bids received from concerns determined to be nonresponsible pursuant to subpart 9.1 (but if a bidder is a small business concern, see subpart 19.6 with respect to certificates of competency). The contracting officer must promptly notify the bidder of the nonresponsibility determination and the basis for it.
(a)
(b) Costs incurred for activities that assist, promote, or deter unionization are unallowable.
(b) * * *
(2) In a civil or administrative proceeding, a finding that the contractor violated, or failed to comply with, a law or regulation;
(a) * * *
(1) * * *
(ii)(A) The offeror, aside from the offenses enumerated in paragraphs (a)(1)(i)(A), (B), and (C) of this provision, has [ ] has not [ ] within the past three years, relative to tax, labor and employment, environmental, antitrust, or consumer protection laws—
(
(
(
(B) If the offeror has responded affirmatively, the offeror shall provide additional information if requested by the Contracting Officer; and
(h)
(2) [ ] Have, [ ] have not, within the three-year period preceding this offer, been convicted of or had a civil judgment rendered against them for: commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a Federal, state or local government contract or subcontract; violation of Federal or state antitrust statutes relating to the submission of offers; or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, or receiving stolen property;
(3) [ ] Are, [ ] are not presently indicted for, or otherwise criminally or civilly charged by a government entity with, commission of any of these offenses; and
(4)(i) The offeror, aside from the offenses enumerated in paragraphs (1), (2), and (3) of this paragraph (h), [ ] has [ ] has not within the past three years, relative to tax, labor and employment, environmental, antitrust, or consumer protection laws—
(A) Been convicted of a Federal or state felony (or has any Federal or state felony indictments currently pending against them); or
(B) Had a Federal court judgment in a civil case brought by the United States rendered against them; or
(C) Had an adverse decision by a Federal administrative law judge, board, or commission indicating a willful violation of law.
(ii) If the offeror has responded affirmatively, the offeror shall provide additional information if requested by the Contracting Officer.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Small Entity Compliance Guide.
This document is issued under the joint authority of the Secretary of Defense, the Administrator of General Services and the Administrator for the National Aeronautics and Space Administration. This
Laurie Duarte, FAR Secretariat, (202) 501-4225. For clarification of content, contact Ralph De Stefano, Procurement Analyst, General Services Administration, at (202) 501-1758.
Wage and Hour Division, Employment Standards Administration, Labor.
Final rule.
The Department of Labor adopts as a final rule an amendment to the regulations, 29 CFR Part 5, which define the Davis-Bacon Act language
This document also revises section 5.2(l)(1) to include within the
January 19, 2001.
Timothy Helm, Office of Enforcement Policy, Government Contracts Team, Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, Room S-3018, 200 Constitution Avenue, NW., Washington, D.C. 20210. Telephone (202) 693-0574. This is not a toll-free number.
This regulation does not contain any new information collection requirements and does not modify any existing requirements. Thus, this regulation is not subject to the Paperwork Reduction Act.
Section 1 of the Davis-Bacon Act (DBA or Act) requires that “the advertised specifications for contracts * * * for construction, alteration and/or repair, including painting and decorating, of public buildings or public works * * * shall contain a provision stating the minimum wages to be paid to various classes of laborers and mechanics * * * and every contract based upon these specifications shall contain a stipulation that the contractor or his subcontractor shall pay all mechanics and laborers
Section 2 of the Act requires that every covered contract provide that in the event the contracting officer finds that “any laborer or mechanic employed by the contractor or any subcontractor
The Congress directed the Department of Labor, through Reorganization Plan No. 14 of 1950 (5 U.S.C. App., effective May 24, 1950, 15 FR 3176, 64 Stat. 1267), to “prescribe appropriate standards, regulations and procedures” to be observed by federal agencies responsible for the administration of the Davis-Bacon and related Acts “[i]n order to assure coordination of administration and consistency of enforcement.” 64 Stat. 1267.
On April 29, 1983, the Department promulgated a regulation (29 CFR 5.2(l)) defining the term
The Department's regulations provide a three-part definition of
The second part at 29 CFR 5.2(l)(2) provides that “fabrication plants, mobile factories, batch plants, borrow pits, job headquarters, tool yards,
The third part at 29 CFR 5.2(l)(3) states that fabrication plants, batch plants, borrow pits, tool yards, job headquarters, etc., “of a commercial supplier or materialman which are established by a supplier of materials for the project before the opening of bids and not on the project site, are not included in the
The regulatory definition of the statutory terms
Prior to the recent appellate court rulings, the Department's longstanding, consistent application of the regulatory definition of
The Wage Appeals Board, which acted with full and final authority for the Secretary of Labor on matters concerning the labor standards provisions of the Davis-Bacon and related Acts (see 29 CFR 5.1 and 7.1 (c)),
The D.C. Circuit first discussed the Department's
At issue before the D.C. Circuit was whether the “material delivery truckdrivers” were within the scope of
The court expressly declined to rule on the validity of the regulation defining the
On May 4, 1992, the Department promulgated a revised section 5.2(j) to accommodate the holding in
In the two more recent rulings,
In holding that the Davis-Bacon prevailing wage requirements did not apply to the borrow pit and batch plant workers, the court cited
In
Relying on the D.C. Circuit's reasoning in
Subsequent to the rulings in
This case involved a dispute over whether the Davis-Bacon provisions applied to work performed at three batch plants established and operated in connection with construction work on the Central Arizona Project (CAP), a massive Bureau of Reclamation construction project consisting of 330 miles of aqueduct and pumping plants. The batch plants were located less than one-half mile from various pumping stations that were being constructed as part of the project. The Board initially ruled on the case on July 15, 1996 (
The Board observed that the D.C. Circuit's recent decision in
The Board found that the work performed at the plants satisfied the test set out in § 5.2(l)(1), since aerial photographs of the construction sites showed the temporary batch plants to be located on land integrated into the work area adjacent to the pumping stations. The Board believed there was no principled basis for excluding the batch plant workers since they were employed on sites of the work to the same extent as the workers who cleared the land and the workers who inventoried, assembled, transported or operated tools, equipment or materials on nearby or adjacent property. The Board also observed that
The Department, by Notice of Proposed Rulemaking (NPRM) published in the
Specifically, the Department proposed to revise the
The Department also proposed to revise the
In conjunction with this change, the Department also proposed to amend § 5.2(j) to provide that transportation of portion(s) of the building or work between a secondary covered construction site and the site where the building or work will remain when it is completed is subject to Davis-Bacon requirements. The Department stated that the
The Department received 50 responses to the NPRM during the public comment period: two from federal agencies: the U.S. Army Corps of Engineers and the Department of the Air Force; four from state Departments of Transportation (DOT's) in Utah, Oregon, Iowa and West Virginia; thirteen contractor associations: the Associated General Contractors of America, Inc. (AGC) and the California AGC, AGC of Washington, the New York State AGC Chapter, the General Contractors Association of New York (which represents the heavy construction industry active in New York City), Associated Builders and Contractors, Inc. (ABC), the American Road & Transportation Builders Association (ARTBA), the National Asphalt Pavement Association (NAPA), the National Ready Mixed Concrete Association (NRMCA), an attorney for the California Dump Truck Owners Association, the Wisconsin Transportation Builders Association (WTBA), and the Contractors Association of Western Pennsylvania; the American Society of Civil Engineers (ASCE); an engineering firm—Johansen & Tuttle Engineering, Inc.; seventeen construction companies, ten reflecting AGC views; and the Pinal Gila Community Child Services, Inc.
Also submitting comments were ten union and union-supported organizations: the Building and Construction Trades Department, AFL-CIO (Building Trades), the International Union of Operating Engineers (IUOE), the Laborers International Union of North America (LIUNA), and the International Brotherhood of Teamsters, AFL-CIO; the National Alliance for Fair Contracting, and the Illinois Foundation for Fair Contracting (FFC), the Indiana-Illinois FFC, and the Midwest FFC; and the International Brotherhood of Electrical Workers, Local Unions Nos. 193 and No. 146 (Springfield and Decatur, Illinois, respectively). An individual who has been involved in wage regulation for twelve years also provided comments.
The following is an analysis of all the principal comments received. Each submission has been thoroughly reviewed, and each criticism and suggestion has been given careful consideration. For each proposed revision, the analysis contains a description of the major comments and the Department's conclusions regarding those comments.
The Building Trades, LIUNA, the Teamsters and the Operating Engineers oppose this change, urging the Department to adopt a rule that would extend prevailing wage coverage to locations that are dedicated exclusively, or nearly so, to the performance of the covered project without regard to their geographic proximity to the actual construction site. The General Contractors Association of New York, Inc. also opposes this change, urging the Department to retain its previous interpretation of the law,
The Building Trades, based on its reading of the legislative history of the Davis-Bacon Act, stated that the term “site of the work” was intended to refer to
The Department believes that both the D.C. Circuit and the Sixth Circuit have spoken clearly on these issues and that the Department is constrained by these courts' decisions in
The Building Trades and LIUNA both stated that the same justification for including locations established specifically for the purpose of constructing a significant portion of a building or work in the definition of “site of the work” for Davis-Bacon purposes applies with equal force to locations used for activities such as temporary batch plants, fabrication facilities, borrow pits and tool yards that are directly related to the covered construction project, provided those locations are dedicated exclusively or nearly so to supporting that project. In the Department's view, the underlying justification for covering secondary construction sites where significant portions of the building or work are being constructed has no application to dedicated support facilities, such as those mentioned in the regulation. The
In its comments, the AGC questioned whether a facility located two miles away from a Davis-Bacon construction site is “adjacent or virtually adjacent” to it, and expressed concern that the Department's proposal provides inadequate guidance as to the geographical range for covering support facilities. The AGC of Texas urged the Department to define “site of the work” precisely and to exempt facilities not located directly upon the physical site of the work. The ABC, on the other hand, sees no purpose to engaging in rulemaking to define “adjacent,” because it means “next to; adjoining,” and any attempts to expand the Davis-Bacon Act's coverage to non-adjacent locations violates the holdings in
The state DOT's of Oregon, Utah, Iowa, and West Virginia, and the National Ready Mixed Concrete Association stated that the Department should clarify the meaning of “adjacent or virtually adjacent” in terms of the distance from the actual construction site within which dedicated support facilities will be deemed covered. The West Virginia DOT recommended that facilities located one-fourth of a mile from the construction site be considered “virtually adjacent”; the Iowa DOT suggested that “virtually adjacent” should be defined as a specific distance, such as “1,500 meters from the limits of the work site or from the project right of way, etc.”; and the Utah DOT recommended setting the distance at “approximately one-half mile, with the qualifier that if the facility is set up more than a half-mile away just to avoid paying Davis-Bacon, [the contractor] must pay Davis-Bacon anyway.”
The Operating Engineers, on the other hand, commented that, if the Department continues to include a geographic test in its site of the work definition, it should not define the terminology “adjacent or virtually adjacent” because a strict limitation in a definition of those terms would have the potential to create results contrary to the intent of the Act. The Operating Engineers agreed with the Department's observation in its NPRM that “actual distance may vary depending upon the size and nature of the project,” and commented that “[t]he Wage and Hour Division must have the latitude to reach results that make sense given the parameters of the particular project under construction.”
The U.S. Army Corps of Engineers commented that “[c]ase by case referral to the Department for resolution of ‘actual or virtual adjacency’ would disrupt both contract administration and effective management of project appropriations.” However, the Corps' discussion of this concern related primarily to the Department's proposal to expressly cover secondary sites where substantial portions of the project are constructed, which does not contain an “actual or virtually adjacent” limitation. In this same vein, the Nicholas Grant Corporation commented that if the question of whether a support facility is “adjacent or virtually adjacent” is to be determined on a case-by-case basis, such determination “must be made prior to bid time so the contractor can bid the project with reasonable knowledge that their construction costs are covered.”
After review of the relevant comments, the Department continues to be of the view that it should not include a precise definition of the terms “adjacent or virtually adjacent” in its regulations. The Department believes that by using the term “virtual” the courts intended the Department to apply the “site of the work” requirement narrowly, but with common sense and some flexibility. As the Board observed in
Since it is apparent that in certain circumstances dedicated support facilities not located directly on the site where the permanent construction will remain should be covered, the question arises of just how far such a facility can be from the actual construction site and still be considered part of the “site of the work.” The Department is of the opinion that establishing a specific maximum distance would be ill-advised because it would create an arbitrary, artificial benchmark for determining Davis-Bacon coverage that ignores the differing nature of various construction processes. This would enable contractors to locate dedicated support facilities immediately beyond any such boundary solely for the purpose of avoiding Davis-Bacon coverage, thereby defeating the purposes of the Act.
The Department has concluded that the only fair and practical method for determining whether a temporary facility is virtually adjacent to the “site of the work” is on a case-by-case basis. The Department believes that the Board's analysis in the two
Based in part on its examination of aerial photographs, the Board determined that the batch plants were located “on land integrated into the work area adjacent to the pumping plants,” and that “[w]orkers at the batch plants were employed on the sites of work equally as much as the workers who cleared the land and the workers who inventoried, assembled, transported or operated tools, equipment or materials on nearby or adjacent property.”
The Department believes that the
The Department believes that in practice the determination of the site of the work will not be difficult. In fact, the
In support of this proposed change, LIUNA, the Building Trades, and the Operating Engineers have each, to a varying degree, provided detailed descriptions of the innovative construction techniques developed and currently in use, which allow significant portions of public buildings and public works to be constructed at locations other than the final resting place of the building or work. The Building Trades stated that the amount of so-called “off-site” work specifically related to many construction projects has steadily expanded in ways never contemplated when the Davis-Bacon Act was amended in 1935 to include the language “directly upon the site of the work.” The Operating Engineers stated that Congress clearly intended to cover actual construction sites, but could never have envisioned that “significant portions” of public works could be constructed other than at the final resting place of the public work. The General Contractors Association of New York similarly commented that new construction technologies have made it practical for “major segments of complex public works” to be built off-site and then transported by barge or rail to be put into place at the final location, and that such projects were not contemplated by the Department's current rules because such technology did not exist at the time of their promulgation.
LIUNA, the Building Trades, and the Operating Engineers each cite the Braddock Locks and Dam project on the Monongahela River in Allegheny County, Pennsylvania as an example that illustrates the compelling need for modification of the current site of the work regulation. The Braddock project involves the construction of two massive floating structures, each about the length of a football field, which would comprise the vast bulk of the new gated dam. The actual construction of these floating structures is at an upriver location on or near the water. They are then floated down the river to the point where they are submerged into the dam and gate piers. According to these commenters, the Army Corps of Engineers, which is contracting for this work, views the construction of these 300-foot structures as “off-site” work, and thus, has taken the position that the workers who build the structures are not entitled to Davis-Bacon coverage. Citing language in the
The Operating Engineers also cited two Wage Appeals Board cases as demonstrating the need for this regulatory change—
In
The Operating Engineers stated that there is no rational basis for the selection of one site of work over another where substantial construction work occurs at more than one site, and that the proposed change to section 5.2(l)(1) will ensure that Davis-Bacon coverage applies to projects such as the Braddock Lock and Dam, the Titan missile service tower, and the ATCO housing unit project, where significant portions of a public work are constructed at dedicated sites other than where the public work will remain.
The ABC, AGC, several other contractor associations, individual contractors, the Oregon Department of Transportation, the Air Force and the Army Corps of Engineers opposed this proposed change to the definition of “site of the work,” stating it amounts to an expansion of statutory coverage and would result in vague standards for coverage without objective criteria for determining what constitutes a “significant portion” of the project. The ABC also commented that the Department has not provided any credible basis for its assertion that this proposed change will not create a “major” exception to the normal rule limiting the site of the work to the place where the building or work will remain. The ABC also expressed concern that the new rule would threaten to expand the Act's coverage to “many existing off-site pre-fabrication specialty contractors.”
The Air Force and the Army Corps of Engineers expressed concern that this proposed change would present significant procurement and administrative problems. The Air Force states that agencies would be compelled in some instances “to solicit and award contracts without knowing where all of the various possible sites of ‘significant work’ may be located after award, and that some solicitations would require “numerous wage determinations to cover all the possible ‘areas’ where some construction might occur, depending upon which bidder might be awarded the contract. The Corps similarly commented that “[a]ny effort on the part of the contracting agency to ‘guess’ the location of potential secondary sites planned by potential bidders can not be fairly administered.”
After review of these comments, the Department continues to be of the view that the current
The existing regulatory definition in § 5.2(l)(1) states that coverage is “limited to the physical place or places where construction called for in the contract will remain * * * and other adjacent or nearby property.” As the Operating Engineers demonstrated with reference to past Wage Appeals Board cases, literal application of the current regulatory language can result in the exclusion from coverage construction at a location some distance from the final resting place of a project, even if a significant portion of the project is actually constructed at that location. The Department does not believe such a result to be consistent with either the language or intent of the Davis-Bacon Act.
The Department does not believe that this change constitutes an expansion of statutory coverage beyond the geographical requirement “directly upon the site of the work,” as several commenters have alleged. As the court in
The Department emphasizes that it does not intend that this change to the definition of the site of the work will create a major exception to the normal rule limiting the site of the work to the place where the building or work will remain when the construction is completed. Ordinary commercial fabrication plants, such as plants that manufacture prefabricated housing components, would
Following review of the comments, the Department continues to be of the view that it is rare for projects to be built in this manner. While LIUNA in particular has described various types of structures that can be built at one location and then transported to another, the commenters, as a whole, have identified only two ongoing lock and dam projects (Braddock and Olmsted) as examples of projects that could fall within the criteria of this amendment. Additionally, the Department is aware of only two administrative cases considered by the Department's Wage Appeals Board or Administrative Review Board where a
With respect to the comments urging the Department to specifically define the terms “significant portion,” we believe that it is both unnecessary and unwise to do so. We think that a precise definition would be unwise because the size and nature of the project will dictate what constitutes a “significant portion” under this provision. We believe such a definition to be unnecessary because, in those rare situations where projects are constructed in this manner, application of this provision should normally be obvious. However, if the agency is unable to determine whether this provision should apply, we anticipate that any question would typically arise early in the procurement process so that advice could be obtained from the Department of Labor in a timely manner.
We appreciate the concerns raised by the contracting agencies since some changes in their procedures may be necessary. However, since these projects will likely be rare, the Department does not anticipate that this amendment will place any significant additional burden on the contracting agencies with respect to their procurement practices. The Department recognizes that contracting agencies will need a mechanism to ascertain in advance the locations where potential bidders would build the project so that wage determinations may be obtained for each location. The Department believes these mechanisms are best developed through the agencies' procurement regulations. The Department points out that most wage determinations are published and widely available. The Department is of the view that, in most instances where a significant portion of a major project is to be constructed at a secondary site, the possible locations of the construction sites would be limited as a practical matter, and therefore, it would not be onerous for the contracting agency to include a wage determination covering the possible construction locations when soliciting bids for the project. One option may be the two-step process utilized under the McNamara-O'Hara Service Contract Act.
The Building Trades, LIUNA and the Teamsters oppose this amendment, urging the Department to reinstate or repromulgate the definition of “construction, prosecution, completion, or repair” that was withdrawn in 1992, which included transportation of materials and supplies by laborers and mechanics employed by contractors and subcontractors covered by the Davis-Bacon and related Acts. These commenters maintained that the Department's revision of section 5.2(j) in response to
This request in effect asks the Department to apply different standards for prevailing wage coverage to projects subject to the Davis-Bacon Act from those applicable to the related Acts. The Department believes that such a result would run contrary to the spirit and intent of Reorganization Plan No. 14 of 1950, which authorizes the Secretary of Labor to “prescribe appropriate standards, regulations, and procedures” in order to “assure consistent and effective enforcement” of the labor standards provisions of the Davis-Bacon Act and the related Acts. Coverage standards that would differ for the same type of work depending upon the applicable statute would likely result in confusion in the construction industry among both contractors and contracting agencies and likely would lead to labor dissatisfaction and disputes. Furthermore, the Sixth Circuit rejected the notion that different coverage standards might be applied to related Act projects, when it concluded that the Federal-Aid Highways Act, a Davis-Bacon related Act, “incorporates from the Davis-Bacon Act not only its method of determining prevailing wage rates but also its method of determining prevailing wage coverage. In other words, if 29 CFR 5.2(l) is inconsistent with the Davis-Bacon Act it must also be inconsistent with the Federal-Aid Highways Act.”
The AGC and the ABC oppose the proposed amendment to section 5.2(j), contending that the regulation should instead be amended to “exempt” delivery truck drivers from Davis-Bacon coverage while engaged in hauling activities, regardless of who employs them and how much time they spend on-site. The AGC, the ABC, the Wisconsin Transportation Builders Association and the American Road & Transportation Builders Association also object to the Department's statement in the NPRM that “truck drivers employed by construction contractors and subcontractors must be paid at least the rate required by the Davis-Bacon Act for any time spent on-site which is more than
The Department disagrees that
It is also the Department's position, as stated in the NPRM, that truck drivers employed by construction contractors and subcontractors must be paid at least Davis-Bacon rates for any time spent on-site which is more than de minimis. It must be noted that this is not a regulatory change, nor is it a subject of this rulemaking. However, the Department will provide some discussion on this issue in order to provide some clarification as to its position.
In the wake of
Giving the Act a literal reading, as the courts have done in
The Department received only a few comments in connection with this proposed change. The ABC stated that “the Department has no authority to extend the Act's coverage to the nation's highways or rivers for the action of transporting items of any kind to or from a construction site, or between sites of any kind.” The ABC further stated that the Department's explanation that the site of the work is “literally moving” between the two work sites is “completely unsupported and contrary to law.” The American Road & Transportation Builders Association objected to this provision on the grounds that it will increase transportation costs. The Army Corps of Engineers stated that “moving sites of work” is an impractical concept because multiple wage determinations might have to be issued in cases where the project was transported across more than one wage determination area. The Foundations for Fair Contracting favored this proposal.
The Department does not anticipate that this proposed change will have a substantial impact since the Department believes that the instances where substantial amounts of construction are performed at one location and then transported to another location for final installation are rare. Thus, the Department believes that this type of transportation activity will occur rarely. The Department nonetheless continues to believe that workers who are engaged in transporting a significant portion of the building or work between covered sites, as contemplated in § 5.2(l)(1), are “employed directly upon the site of the work,” and therefore, are entitled to prevailing wages, provided they are “laborers and mechanics” under the Act. However, not included in such coverage would be the separate transportation of materials and supplies between the two covered “sites of the work.” With respect to the Corps' concern that multiple wage determinations might apply in some instances, the Department has made an administrative determination that when faced with the prospect that transportation will take place in more than one wage determination area, the applicable wage determination will be the wage determination for the area in which the construction will remain when completed and will apply to all bidders, regardless of where they propose to construct significant portions of the project.
No comments were received on the Department's initial determinations under this section that the proposed rule was neither a “significant regulatory action” within the meaning of section 3(f) of Executive Order 12866, nor a “major rule” under the Small Business Regulatory Enforcement Fairness Act of 1996, and that this rulemaking is not subject to the Unfunded Mandates Reform Act of 1995. Because of the interests expressed by some of the contracting agencies, the final rule is nonetheless being treated as a significant rule. However, the rule is not economically significant and does not require preparation of a full regulatory impact analysis. The rule is not expected to have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a section of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. The modifications to regulatory language in this final rule limit coverage of off-site material and supply work from Davis-Bacon prevailing wage requirements as a result of appellate court rulings. In addition, the final rule makes only a limited amendment to the
The Department also concludes that the rule is not a “major rule” requiring approval by the Congress under the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801
For purposes of the Unfunded Mandates Reform Act of 1995, this rule does not include any federal mandate that may result in excess of $100 million in expenditures by state, local and tribal governments in the aggregate, or by the private sector. Furthermore, the requirements of the Unfunded Mandates Reform Act, 2 U.S.C. 1532, do not apply here because the rule does not include a Federal mandate. The term
The Department has reviewed this rule in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have federalism implications. The rule does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
The Department has determined that this regulation will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. This rule will primarily implement modifications resulting from court decisions interpreting statutory language, which would reduce the coverage of Davis-Bacon prevailing wage requirements as applied to construction contractors and subcontractors, both large and small, on DBRA covered contracts. In addition, the rule will make a limited amendment to the
The Department is promulgating this new rule to clarify the regulatory requirements concerning the Davis-Bacon Act's
The Department is also issuing this new rule in order to address situations that were not contemplated when the current regulations concerning
None of the commenters raised any issues specifically related to the Department's Initial Regulatory Flexibility Analysis. Some commenters expressed concerns that the Department's proposal to cover work performed at locations established specifically for the purpose of constructing a significant portion of a building or work, as well as transportation of portions of the building or work to and from the project's final resting place, would result in an expansion of Davis-Bacon coverage and an increase in costs. The Department has responded to these concerns by explaining that the number of projects affected by this change would be very limited and that the prevailing wage implications would not be substantial, especially with regard to the transportation activities attendant to these types of projects.
Size standards for the construction industry are established by the Small Business Administration (SBA), and are expressed in millions of dollars of annual receipts for affected entities,
There are no additional reporting or recording requirements for contractors under this rule. There may be rare instances where, pursuant to the new rule, contractors, including small entities, engaged in the construction of a significant portion of a Davis-Bacon project at a secondary site specifically established for such purpose, would be required to comply with Davis-Bacon wage and recordkeeping requirements with respect to certain laborers and
As stated above, the Department has determined that this rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. Furthermore, an alternative standard for small entities would not be feasible.
This document was prepared under the direction of John R. Fraser, Deputy Administrator, Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor.
Administrative practice and procedure, Government contracts, Investigations, Labor, Minimum wages, Penalties, Recordkeeping requirements, Reporting requirements, Wages.
40 U.S.C. 276a-276a-7; 40 U.S.C. 276c; 40 U.S.C. 327-332; Reorganization Plan No. 14 of 1950, 5 U.S.C. Appendix; 5 U.S.C. 301; 29 U.S.C. 259; and the statutes listed in § 5.1(a) of this part.
(j) The terms
(1) All types of work done on a particular building or work at the site thereof, including work at a facility which is deemed a part of the site of the work within the meaning of (paragraph (l) of this section by laborers and mechanics employed by a construction contractor or construction subcontractor (or, under the United States Housing Act of 1937; the Housing Act of 1949; and the Native American Housing Assistance and Self-Determination Act of 1996, all work done in the construction or development of the project), including without limitation—
(i) Altering, remodeling, installation (where appropriate) on the site of the work of items fabricated off-site;
(ii) Painting and decorating;
(iii) Manufacturing or furnishing of materials, articles, supplies or equipment on the site of the building or work (or, under the United States Housing Act of 1937; the Housing Act of 1949; and the Native American Housing Assistance and Self-Determination Act of 1996 in the construction or development of the project);
(iv)(A) Transportation between the site of the work within the meaning of paragraph (l)(1) of this section and a facility which is dedicated to the construction of the building or work and deemed a part of the site of the work within the meaning of paragraph (l)(2) of this section; and
(B) Transportation of portion(s) of the building or work between a site where a significant portion of such building or work is constructed, which is a part of the site of the work within the meaning of paragraph (l)(1) of this section, and the physical place or places where the building or work will remain.
(2) Except for laborers and mechanics employed in the construction or development of the project under the United States Housing Act of 1937; the Housing Act of 1949; and the Native American Housing Assistance and Self-Determination Act of 1996, and except as provided in paragraph (j)(1)(iv)(A) of this section, the transportation of materials or supplies to or from the site of the work by employees of the construction contractor or a construction subcontractor is not “construction, prosecution, completion, or repair” (see
(l) The term
(1)
(2) Except as provided in paragraph (l)(3) of this section, job headquarters, tool yards, batch plants, borrow pits, etc., are part of the
(3) Not included in the