[House Report 105-445]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
 2d Session             HOUSE OF REPRESENTATIVES                105-445
_______________________________________________________________________


 
        AMENDING THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970

                                _______
                                

 March 17, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


   Mr. Goodling, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2877]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 2877) to amend the Occupational Safety 
and Health Act of 1970, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. INSPECTIONS.

    Section 8 of the Occupational Safety and Health Act of 1970 (29 
U.S.C. 657) is amended by adding at the end the following:
    ``(h) The Secretary shall not use the results of enforcement 
activities, such as the number of citations issued or penalties 
assessed, to evaluate employees directly involved in enforcement 
activities under this Act or to impose quotas or goals with regard to 
the results of such activities.''.

                                Purpose

    The purpose of H.R. 2877 is to amend the Occupational Safety and 
Health Act (OSHAct) of 1970 to prohibit the Occupational Safety and 
Health Administration (OSHA) from setting penalty quotas for 
enforcement personnel.

                            Committee Action

    The Subcommittee on Workforce Protections held a series of three 
hearings in 1997 on the subject of OSHA reinvention. Those hearings 
were the basis of several bills introduced by Representative Cass 
Ballenger on November 7, 1997, including H.R. 2877.
    The first hearing was held on June 24, 1997, to learn the views and 
perspective of OSHA on its effort to ``reinvent'' the agency. The 
Acting Assistant Secretary for OSHA, Greg Watchman, testified at the 
hearing.
    The second hearing was held on July 23, 1997, to examine OSHA's 
reinvention project, hearing testimony from a variety of individuals 
who have either studied or had recent experiences with OSHA. The 
witnesses included Mr. Ronald Schaible, Director, Global Safety, AMP 
Incorporated, Harrisburg, Pennsylvania; Ms. Kathleen Winters, Corporate 
Manager, Environmental Health and Safety, Mack Printing Company, 
Easton, Pennsylvania; Dr. Gary Rainwater, President, American Dental 
Association, Dallas, Texas; Mr. James Gonzalez, Attorney-at-Law, 
Holland and Hart, Denver, Colorado; Mr. Richard S. Baldwin, Safety and 
Health Director, BE&K, Birmingham, Alabama; Professor John Mendeloff, 
Graduate School of Public and International Affairs, University of 
Pittsburgh, Pittsburgh, Pennsylvania; Ms. Lee Anne Elliott, Executive 
Director, Voluntary Protection Programs, Participants' Association, 
Falls Church, Virginia; and Mr. Mike Wright, Director, Health, Safety 
and Environment Department, United Steelworkers of America, Pittsburgh, 
Pennsylvania.
    The third hearing was held on September 11, 1997, to hear from 
individuals with a first hand knowledge of OSHA's reinvention program 
and on changes that should occur as OSHA moves into the 21st century. 
The following witnesses testified: Mr. Gerald V. Anderson, President, 
Anderson Construction Company, Fort Gaines, Georgia; Mr. James Abrams, 
Corporate, Labor, and Employment Attorney, Denver, Colorado; Mr. Frank 
White, Vice President, Organization Resources Counselors, Inc., 
Washington, DC; Mr. Michael C. Nichols, Vice President, Management 
Development/Human Resources, Sysco Corporation, Houston, Texas; Mr. 
Norbert Plassmeyer, Vice President and Director of Environmental 
Affairs, Associated Industries, Jefferson City, Missouri; and Dr. 
Nicholas A. Ashford, Ph.D, Professor of Technology and Policy, 
Massachusetts Institute of Technology, Cambridge, Massachusetts.
    The Subcommittee on Workforce Protections approved H.R. 2877, as 
amended, by voice vote, on February 4, 1998, and ordered the bill 
favorably reported to the Full Committee. The Committee on Education 
and the Workforce approved H.R. 2877 by voice vote on March 11, 1998, 
and ordered the bill favorably reported to the House.

                                Summary

    H.R. 2877 amends the OSHAct to prohibit OSHA from using the 
results of enforcement activities, such as the numbers of 
citations issued or penalties assessed, to evaluate OSHA 
enforcement officers.

                     Committee Statement and Views

Background

    The OSHAct was passed in 1970. Passage of the OSHAct 
culminated many years of debate and discussion about uniform 
federal law on worker safety and health. The OSHAct is one of 
the most extensive pieces of safety and health law in the 
United States, regulating workplace rules in about 6.5 million 
business establishments, including manufacturing, construction, 
and other industries. The OSHAct has been amended only once in 
its 25 year history.\1\
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    \1\ The 1990 Budget Reconciliation bill included a provision that 
increased the maximum penalties for ``non-serious'' and ``serious'' 
violations from $1,000 to $7,000 and for ``willful'' and repeat 
violations from $10,000 to $70,000. It imposed a minimum penalty of 
$5,000 for willful violations.
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    Over the past three years, the Committee has held numerous 
hearings on issues surrounding the OSHAct and how OSHA 
operates. In a series of hearings in the 105th Congress, the 
Subcommittee on Workforce Protections reviewed the Clinton 
Administration's plans to ``reinvent'' the agency and its 
programs and whether those plans are being successfully 
implemented.
    The Clinton Administration's effort to ``reinvent'' OSHA 
acknowledged that the goals of OSHA were often wrong. In a 
speech in May 1995 acknowledging the need to reinvent OSHA, 
President Clinton noted that, ``if the government rewards 
inspectors for writing citations and levying fines more than 
ensuring safety, there's a chance you could get more citations, 
more fines, more hassle and no more safety.'' \2\
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    \2\ Remarks by the President on Reinventing Worker Safety 
Regulation, Stromberg Sheet Metal Works, Inc., Washington, DC, May 16, 
1995.
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    The President's recognition that this was the case with 
OSHA has been echoed repeatedly in testimony before the 
Committee. In March 1995, Ms. Dorothy Strunk, who served as 
both staff member to the Education and Labor Committee and 
Acting Assistant Secretary of Labor for Occupational Safety and 
Health, testified before the Subcommittee on Workforce 
Protections: \3\
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    \3\ Testimony at a hearing held by the Subcommittee on Workforce 
Protections, March 8, 1995.

          Congress, for years, measured OSHA's effectiveness by 
        the number of inspections completed, the number of 
        serious citations issued, the number of criminal cases 
        referred to the Justice Department for prosecution. Are 
        these the appropriate measures to determine the 
        effectiveness of the Act? Or should the question be: 
        ``Are hazards in the workplace being abated? Are injury 
        rates being reduced?'' That really is the crux of the 
        issue: what is the most effective approach to achieving 
        hazard abatement and injury reduction?
          Again, we are talking about changing long-standing, 
        systemic problems with the agency. Because the agency's 
        success was measured for years by its punitive 
        activity, it has become organized accordingly. If we 
        want, as I think we must, to change the way we measure 
        OSHA's success, we will also need to change the way 
        OSHA is organized--to change the system.

    Other individuals who have had experience with OSHA also 
have testified about the impact of the agency having had for 
too long the wrong goals.
    In a hearing conducted in February 1995, the Subcommittee 
on Oversight and Investigations, conducting an oversight 
hearing on the need for regulatory reforms at OSHA, heard 
compelling testimony from the owner of a small bakery in 
Evanston, Illinois, Ms. Judy Hooper. Ms. Hooper described an 
OSHA inspection which her small business had suffered through, 
and the approach to workplace safety and health taken by the 
OSHA inspector: \4\
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    \4\ Testimony at a hearing held by the Subcommittee on Oversight 
and Investigations, February 16, 1995.

          As the narrative report [of the inspection] 
        indicates, there was no closing conference, no review 
        of citations, and her departing words were ``Well, if 
        there are any problems, you'll hear from us, if not you 
        won't.'' We received the citations on August 17th 
        (nearly 40 days after the inspection. * * * Despite 
        abatements, the proposed fines were $5,450.00, with the 
        stipulation that we spend the $7,550.00 ``reduction'' 
        on ``safety net'' programs. Faced with a legal document 
        that waived our future rights to contest we balked * * 
        * I said, I don't mean to be impertinent, but could you 
        explain to me why we are being fined at all? We've 
        complied! I don't have that kind of money just laying 
        around. I'll have to call my mom to see if I can borrow 
        it, or I'll have to lay people off or raise my prices. 
        * * * Mr. McCann [OSHA Area Director] said he was 
        required to fine us by law. * * * My husband persisted, 
        stating to Mr. McCann that these fines will jeopardize 
        jobs. Mr. McCann responded, ``I have a goal to meet, a 
        quota, if you will, but I have made my quota for this 
        fiscal year and would it help you in any way if I split 
        up the fine so that you would pay half by October 1 and 
        the other half by November 1.'' We agreed it would and 
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        thanked him for his effort.

    Mr. Ian Moar, Counsel for Shaw, Pittman, Potts, and 
Trowbridge testified in July 1995 about how OSHA is perceived 
in the workplace: \5\
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    \5\ Testimony at a hearing held by the Subcommittee on Workforce 
Protections, July 28, 1995.

          The current adversarial relationship, whether it is 
        real or perceived, that exists between employers and 
        OSHA seriously undermines efforts to improve workplace 
        health and safety. An agency that measures its success 
        based on its constituencies' failures--that is, number 
        of citations--is an agency whose mission should be 
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        reexamined and redefined.

    Mr. Carl B. Carruth, Attorney, South Carolina-based McNair 
Law Firm, testified in August 1995 \6\ that--
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    \6\ Testimony at a hearing held by the Subcommittee on Workforce 
Protections, August 24, 1995.

          Entirely too many dollars, man-hours and other 
        resources have been wasted in an adversarial system 
        which too often puts rigid enforcement of detailed and 
        complex standards and the assessment of monetary 
        penalties over what should be the real priority of 
        achieving safety and health in the workplace. It has 
        been my experience that employers are sufficiently 
        motivated to achieve safety and health in the workplace 
        without the threat of OSHA citations and fines. Many 
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        have the know-how to do so on their own.

    Mr. Michael C. Nicholas, Vice President, Management 
Development/Human Resources, Sysco Corporation, testified in 
September 1997 \7\ that--
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    \7\ Testimony at a hearing held by the Subcommittee on Workforce 
Protections, September 11, 1997.

          We understand that OSHA cannot and should not 
        approach all employers the same way. There are some 
        employers who have a clear disregard for the safety and 
        health of their employees. Yet, even recognizing these 
        circumstances, a theme which remains common within our 
        industry, is that OSHA field compliance personnel are 
        ill-prepared to assess our facilities, offer 
        prescriptive cures and abatement measures without 
        adequate expertise, and they rely entirely upon threats 
        of penalty and negative publicity to intimidate even 
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        the largest corporations.

    Mr. Ronald D. Schaible, Director, Global Safety, AMP Inc., 
described to the Subcommittee how OSHA inspections affected his 
company: \8\
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    \8\ Testimony at a hearing held by the Subcommittee on Workforce 
Protections, July 23, 1997.

          AMP has already had seven inspections this year. None 
        of these inspections resulted in an effort to cooperate 
        with AMP local-facility management on ways of improving 
        safety and health. Instead, OSHA has held to the 
        gotcha' mentality. This, and the fact that citations 
        issued are almost always for minor code violations, has 
        resulted in AMP's continued distrust of the Agency. AMP 
        is disappointed that the attitudes of inspectors have 
        not changed as Joe Dear and Greg Watchman promised they 
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        would.

    A long-time labor law practitioner, Mr. James Gonzalez, 
testified that: \9\
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    \9\ Testimony at a hearing held by the Subcommittee on Workforce 
Protections, July 23, 1997.

          OSHA seems to suffer an identity crisis. The 
        Administration calls upon OSHA to reinvent itself. 
        OSHA's response is long on rhetoric and short on 
        substance. During its life, OSHA has accumulated the 
        baggage of an enforcement agency preoccupied with 
        quotas and citations and penalties. Despite hearing 
        assurances to the contrary, OSHA often appears 
        unwilling or unable to embrace fresh concepts and cost-
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        effective measures to enhance workplace safety.

    The Clinton Administration has acknowledged the problem of 
focusing on enforcement results, rather than improvements in 
safety and health. In March 1995, Mr. Joe Dear, then Assistant 
Secretary for Occupational Safety and Health, told the 
Subcommittee on Workforce Protections: \10\
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    \10\ Testimony at a hearing held by the Subcommittee on Workforce 
Protections, March 8, 1997.

          Many employers have complained that OSHA inspectors 
        care less about worker safety than they do about 
        meeting perceived quotas for citations and penalties. 
        While OSHA has not used quotas, it has used citations 
        and penalties as performance measures. I have put a 
        stop to this practice. OSHA's performance is now 
        measured by its success in making safety and health 
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        improvements.

    In his testimony before the Subcommittee on Workforce 
Protections in June 1997, the Acting Assistant Secretary for 
Occupational Safety and Health, Mr. Greg Watchman, reiterated 
the change in policy: \11\
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    \11\ Testimony at a hearing held by the Subcommittee on Workforce 
Protections, June 24, 1997.

          In fact, we [OSHA] have made significant changes to 
        our performance measures for front line inspectors. For 
        many years, OSHA judged the performance of its own 
        staff and, in fact, was judged by Congress, based on 
        the numbers of inspections we conducted, the numbers of 
        citations we issued, and the amount of penalties we 
        collected. Joe Dear dropped those performance measures 
        so that inspectors were no longer judged on those 
        criteria. Instead, we have begun to implement a new 
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        performance measurement system.

    Despite the change in official policy, however, the 
testimony of Mr. Schaible, Mr. Nicholas, Mr. Gonzalez, and 
others from whom the Committee has heard continuing complaints 
about compliance officers who are concerned that they ``will 
look bad'' if they don't issue some citations in the course of 
an inspection, suggests that the problem is not entirely cured. 
As Ms. Strunk observed in March 1995 in the testimony quoted 
above, the practice of judging the agency and its compliance 
officers based on enforcement numbers is long-standing and 
systemic. Amending the OSHAct, to make clear that compliance 
officers may not be evaluated on the basis of such enforcement 
measures as number of citations issued or penalties assessed 
will, as the current Assistant Secretary of Labor for 
Occupational Safetyand Health said in endorsing H.R. 2877 on 
behalf of the Clinton Administration, ``help make clear to everyone 
that OSHA's current policy will not change.'' \12\
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    \12\ Statement of Mr. Charles Jeffress, Assistant Secretary of 
Labor for Occupational Safety and Health, March 11, 1998.
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The bill

    H.R. 2877 simply prohibits the Secretary of Labor from 
using the results of enforcement activities, such as the number 
of citations issued or penalties assessed, to evaluate its 
compliance personnel. The bill also prohibits the setting of 
goals or quotas with regard to enforcement activities by OSHA. 
The bill does not prohibit or interfere with other management 
prerogatives and requirements, such as is involved in ensuring 
that agency personnel conduct inspections, ``give a day's work 
for a day's pay,'' or carry out other agency priorities with 
regard to targeting of enforcement activities. Similarly, the 
bill does not preclude the Secretary or her subordinates from 
reviewing and taking appropriate action with regard to any 
specific violation, such as where an inspector initially 
improperly classifies a violation. The bill is directed at 
prohibiting the practice of evaluating personnel and the agency 
by enforcement numbers such that the perceived and real purpose 
of OSHA is punitive against employers rather than corrective 
and improving safety and health.

                           Section-by-Section

Section 1. Inspections

    Section 8 of the OSHAct is amended to prohibit OSHA from 
using the results of enforcement activities, such as the 
numbers of citations issued or penalties assessed, to evaluate 
OSHA enforcement officers.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the body of this report.

                   Constitutional Authority Statement

    H.R. 2877 amends the OSHAct and falls within the scope of 
Congressional powers under Article I, Section 8, Clause 3 of 
the Constitution of the United States. In addition, the 
Committee believes that this bill falls within the same scope 
of congressional authority as the OSHAct.

                           Committee Estimate

    Clause 7 of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 2877. However, clause 7(d) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. This bill prohibits the Occupational Safety and Health 
Administration from establishing performance measures based on 
the number of inspections or citations issued; the bill does 
not prevent legislative branch employees from receiving the 
benefits of this legislation.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act requires a statement of whether the provisions of 
the reported bill include unfunded mandates. This bill 
prohibits certain performance measures for employees of 
Occupational Safety and Health Administration, and as such does 
not contain any unfunded mandates.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 2(l)(3)(A) of rule XI and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the body of this report.

 Statement of Oversight Findings of the Committee on Government Reform 
                             and Oversight

    With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 2877.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 2(l)(3)(B) of 
rule XI of the House of Representatives and section 308(a) of 
the Congressional Budget Act of 1974 and with respect to 
requirements of 2(l)(3)(C) of rule XI of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 2877 from the Director of the Congressional Budget 
Act:

H.R. 2877--As ordered reported by the House Committee on Education and 
        the Workforce

    CBO estimates that enacting this bill would have no effect 
on the federal budget. Because the bill would not affect direct 
spending or receipts, pay-as-you-go procedures would not apply. 
H.R. 2877 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
and would not have an impact on the budgets of state, local, or 
tribal governments.
    H.R. 2877 would conform the law to current practice. It 
would prohibit the Secretary of Labor from using the results of 
enforcement activities, such as the number of citations issued 
or penalties assessed, to evaluate employees directly involved 
in enforcement under the Occupational Safety and Health Act. It 
would also prohibit the Secretary from imposing quotas or goals 
on employees that are based on the results of enforcement 
activities. The Occupational Safety and Health Administration 
discontinued using such performance measures and incentives in 
1994.
    The CBO staff contact for the impact on federal costs is 
Cyndi Dudzinski, who can be reached at 226-9010; the contact 
for the impact on state, local, and tribal governments is Marc 
Nicole and the contact for the impact on the private sector is 
Kathryn Rarick. This estimate was approved by Paul N. Van de 
Water, Assistant Director for Budget Analysis.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 16, 1998.
Hon. William F. Goodling,
Chairman, Committee on Education and the Workforce, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2877.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Cyndi 
Dudzinski.
            Sincerely,
                                             James L. Blum,
                                   (For June E. O'Neill, Director).
    Enclosure.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

      SECTION 8 OF THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970

             inspections, investigations, and recordkeeping

    Sec. 8. (a) * * *
          * * * * * * *
    (h) The Secretary shall not use the results of enforcement 
activities, such as the number of citations issued or penalties 
assessed, to evaluate employees directly involved in 
enforcement activities under this Act or to impose quotas or 
goals with regard to the results of such activities.

                                
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