[House Report 115-571]
[From the U.S. Government Publishing Office]


115th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                     {      115-571

======================================================================

 
AMENDING THE DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT 
  TO REPEAL CERTAIN DISCLOSURE REQUIREMENTS RELATED TO COAL AND MINE 
                                 SAFETY

                                _______
                                

 February 20, 2018.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 4289]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 4289) to amend the Dodd-Frank Wall Street Reform 
and Consumer Protection Act to repeal certain disclosure 
requirements related to coal and mine safety, 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 all after the enacting clause and insert the 
following:

SECTION 1. REPEAL OF COAL AND MINE SAFETY DISCLOSURE REQUIREMENTS.

  (a) In General.--Section 1503 of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (15 U.S.C. 78m-2) is hereby repealed.
  (b) Clerical Amendment.--The table of contents in section 1(b) of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by 
striking the item relating to section 1503.

                          Purpose and Summary

    On November 7, 2017, Representative Alex Mooney introduced 
H.R. 4289, to repeal Section 1503 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (P.L. 111-203), which 
requires mining companies to include information about mine 
safety and health violations, orders, citations, legal actions, 
and mining-related fatalities in quarterly and annual reports 
filed with the Securities and Exchange Commission (SEC). The 
disclosure requirements are largely based on the safety and 
health requirements that apply to mines under the Federal Mine 
Safety and Health Act of 1977, administered by the Mine Safety 
and Health Administration.

                  Background and Need for Legislation

    To ensure investors can focus on information material to 
investment decisions, disclosures in SEC filings should include 
material information. But Section 1503 of the Dodd-Frank Act is 
among a handful of provisions of law that are using the federal 
securities laws to further unrelated political ends by 
requiring public companies to disclose certain information 
regardless of whether that information would be material to an 
investment decision.
    Specifically, in this instance, Title XV of the Dodd-Frank 
Act now requires mining companies to include information about 
mine safety and health violations, orders, citations, legal 
actions, and mining-related fatalities in quarterly and annual 
reports filed with the SEC. The disclosure requirements are 
largely based on the safety and health requirements that apply 
to mines under the Federal Mine Safety and Health Act of 1977, 
which is administered by the Mine Safety and Health 
Administration (MSHA). On December 21, 2011, the SEC finalized 
its mine safety disclosure rule, which went into effect 30 days 
after publication in the Federal Register.
    Even though much of this information is already reported to 
the MSHA and even though any such information that would be 
material to investment decision must be disclosed regardless, 
this duplicative disclosure regime was added to the Dodd-Frank 
Act to further political ends, regardless of the fact that it 
has been estimated to increase compliance costs on the industry 
by well over $1 million annually, according to the SEC's cost-
benefit analysis. The SEC estimated that approximately 100 
companies would be affected by this Dodd-Frank provision and 
that compliance with the rule would involve 5,775 hours of 
company personnel time and approximately $1.1 million for the 
services of outside professionals. Additionally, many of 
Section 1503's disclosure obligations are not material to an 
investment decision and could in fact confuse investors. As 
David Lynn, a former Chief Counsel of the SEC's Division of 
Corporation Finance, observed in an article in the Journal of 
Business and Technology Law:

          [S]ome of the mine safety violations individually 
        reported on Form 8-K following enactment of Section 
        1503 do not appear to be material in any way to 
        understanding the issuer's mining operations or the 
        risk profile of those mining operations. As a result, 
        issuers have felt compelled to explain in the context 
        of these disclosures that problems were corrected or 
        there was no adverse impact on the operations as a 
        result of the order or notice . . . the new requirement 
        thus runs the risk of creating unnecessary `noise' in 
        the public reporting for issuers operating mines.

    Further, in its Capital Markets report released in October 
2017, issued pursuant to President Trump's Executive Order 
13772, the Treasury Department recommended that Congress repeal 
Dodd-Frank Act Section 1503.
    Finally, the resources spent by public companies to comply 
with this misplaced disclosure obligation could be redirected 
to investments to modernize mining, increase mining jobs and 
improve safety. H.R. 4289 makes this possible by repealing 
Section 1503 of the Dodd-Frank Act and the repeal will have no 
negative effect on whether a reasonable investor will receive 
material information.

                                Hearings

    The Committee on Financial Services held a hearing 
examining matters relating to H.R. 4289 on April 26, 2017 and 
April 28, 2017.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
November 14, 2017 and November 15, 2017 and ordered H.R. 4289 
to be reported favorably to the House without amendment by a 
recorded vote of 33 yeas to 25 nays (Record vote no. FC-118), a 
quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House without amendment. The 
motion was agreed to by a recorded vote of 33 yeas to 25 nays 
(Record vote no. FC-118), a quorum being present.


                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 4289 
will reduce burdensome regulatory and disclosure requirements 
on public companies and ensure that the federal securities laws 
are being used to provide material information to investors, by 
repealing the mining disclosure requirement set forth in the 
Dodd-Frank Act.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 16, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4289, a bill to 
amend the Dodd-Frank Wall Street Reform and Consumer Protection 
Act to repeal certain disclosure requirements related to coal 
and mine safety.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephen 
Rabent.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 4289--A bill to amend the Dodd-Frank Wall Street Reform and 
        Consumer Protection Act to repeal certain disclosure 
        requirements related to coal and mine safety

    Under current law, the Securities and Exchange Commission 
(SEC) requires certain companies that operate, or have 
subsidiaries that operate, coal or other mines to report 
information about their compliance with federal health and 
safety standards. H.R. 4289 would repeal the requirement for 
companies to disclose that information to the SEC.
    Using information from the SEC, CBO estimates that 
implementing H.R. 4289 would have no significant effect on the 
agency's costs and operations. Moreover, the SEC is authorized 
to collect fees sufficient to offset its annual appropriation; 
therefore, CBO estimates that any net effect on discretionary 
spending from implementing the bill would be negligible, 
assuming appropriation actions consistent with that authority.
    Enacting H.R. 4289 could decrease civil penalties (which 
are recorded as revenues) that the SEC could collect under 
current law for failure to report coal and mine safety 
information. However, CBO estimates that any such reductions 
would be insignificant over the 2018-2027 period. Because the 
bill would affect revenues, pay-as-you-go procedures apply. 
Enacting H.R. 4289 would not affect direct spending.
    CBO estimates that enacting H.R. 4289 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed 
rulemakings: The Committee estimates that the bill requires no 
directed rulemakings within the meaning of such section.

             Section-by-Section Analysis of the Legislation


Section 1. Repeal of coal and mine safety discloser requirements

    This section amends the Dodd-Frank Wall Street Reform and 
Consumer Protection Act by repealing Section 1503, to require 
mining companies to include information about mine safety and 
health violations, orders, citations, legal actions, and 
mining-related fatalities in quarterly and annual reports filed 
with the Securities and Exchange Commission.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) 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 (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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 (existing law 
proposed to be omitted is enclosed in black brackets and 
existing law in which no change is proposed is shown in roman):

       DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Dodd-Frank 
Wall Street Reform and Consumer Protection Act''.
  (b) Table of Contents.--The table of contents for this Act is 
as follows:

Sec. 1. Short title; table of contents.
     * * * * * * *

                   TITLE XV--MISCELLANEOUS PROVISIONS

Sec. 1501. Restrictions on use of United States funds for foreign 
          governments; protection of American taxpayers.
     * * * * * * *
[Sec. 1503. Reporting requirements regarding coal or other mine safety.]

           *       *       *       *       *       *       *


TITLE XV--MISCELLANEOUS PROVISIONS

           *       *       *       *       *       *       *


[SEC. 1503. REPORTING REQUIREMENTS REGARDING COAL OR OTHER MINE SAFETY.

  [(a) Reporting Mine Safety Information.--Each issuer that is 
required to file reports pursuant to section 13(a) or 15(d) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o) and 
that is an operator, or that has a subsidiary that is an 
operator, of a coal or other mine shall include, in each 
periodic report filed with the Commission under the securities 
laws on or after the date of enactment of this Act, the 
following information for the time period covered by such 
report:
          [(1) For each coal or other mine of which the issuer 
        or a subsidiary of the issuer is an operator--
                  [(A) the total number of violations of 
                mandatory health or safety standards that could 
                significantly and substantially contribute to 
                the cause and effect of a coal or other mine 
                safety or health hazard under section 104 of 
                the Federal Mine Safety and Health Act of 1977 
                (30 U.S.C. 814) for which the operator received 
                a citation from the Mine Safety and Health 
                Administration;
                  [(B) the total number of orders issued under 
                section 104(b) of such Act (30 U.S.C. 814(b));
                  [(C) the total number of citations and orders 
                for unwarrantable failure of the mine operator 
                to comply with mandatory health or safety 
                standards under section 104(d) of such Act (30 
                U.S.C. 814(d));
                  [(D) the total number of flagrant violations 
                under section 110(b)(2) of such Act (30 U.S.C. 
                820(b)(2));
                  [(E) the total number of imminent danger 
                orders issued under section 107(a) of such Act 
                (30 U.S.C. 817(a));
                  [(F) the total dollar value of proposed 
                assessments from the Mine Safety and Health 
                Administration under such Act (30 U.S.C. 801 et 
                seq.); and
                  [(G) the total number of mining-related 
                fatalities.
          [(2) A list of such coal or other mines, of which the 
        issuer or a subsidiary of the issuer is an operator, 
        that receive written notice from the Mine Safety and 
        Health Administration of--
                  [(A) a pattern of violations of mandatory 
                health or safety standards that are of such 
                nature as could have significantly and 
                substantially contributed to the cause and 
                effect of coal or other mine health or safety 
                hazards under section 104(e) of such Act (30 
                U.S.C. 814(e)); or
                  [(B) the potential to have such a pattern.
          [(3) Any pending legal action before the Federal Mine 
        Safety and Health Review Commission involving such coal 
        or other mine.
  [(b) Reporting Shutdowns and Patterns of Violations.--
Beginning on and after the date of enactment of this Act, each 
issuer that is an operator, or that has a subsidiary that is an 
operator, of a coal or other mine shall file a current report 
with the Commission on Form 8-K (or any successor form) 
disclosing the following regarding each coal or other mine of 
which the issuer or subsidiary is an operator:
          [(1) The receipt of an imminent danger order issued 
        under section 107(a) of the Federal Mine Safety and 
        Health Act of 1977 (30 U.S.C. 817(a)).
          [(2) The receipt of written notice from the Mine 
        Safety and Health Administration that the coal or other 
        mine has--
                  [(A) a pattern of violations of mandatory 
                health or safety standards that are of such 
                nature as could have significantly and 
                substantially contributed to the cause and 
                effect of coal or other mine health or safety 
                hazards under section 104(e) of such Act (30 
                U.S.C. 814(e)); or
                  [(B) the potential to have such a pattern.
  [(c) Rule of Construction.--Nothing in this section shall be 
construed to affect any obligation of a person to make a 
disclosure under any other applicable law in effect before, on, 
or after the date of enactment of this Act.
  [(d) Commission Authority.--
          [(1) Enforcement.--A violation by any person of this 
        section, or any rule or regulation of the Commission 
        issued under this section, shall be treated for all 
        purposes in the same manner as a violation of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
        or the rules and regulations issued thereunder, 
        consistent with the provisions of this section, and any 
        such person shall be subject to the same penalties, and 
        to the same extent, as for a violation of such Act or 
        the rules or regulations issued thereunder.
          [(2) Rules and regulations.--The Commission is 
        authorized to issue such rules or regulations as are 
        necessary or appropriate for the protection of 
        investors and to carry out the purposes of this 
        section.
  [(e) Definitions.--In this section--
          [(1) the terms ``issuer'' and ``securities laws'' 
        have the meaning given the terms in section 3 of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c);
          [(2) the term ``coal or other mine'' means a coal or 
        other mine, as defined in section 3 of the Federal Mine 
        Safety and Health Act of 1977 (30 U.S.C. 802), that is 
        subject to the provisions of such Act (30 U.S.C. 801 et 
        seq.); and
          [(3) the term ``operator'' has the meaning given the 
        term in section 3 of the Federal Mine Safety and Health 
        Act of 1977 (30 U.S.C. 802).
  [(f) Effective Date.--This section shall take effect on the 
day that is 30 days after the date of enactment of this Act.]

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    On April 5, 2010, an explosion ripped through the Upper Big 
Branch mine in Montcoal, West Virginia, resulting in the loss 
of 29 miners. As stated in a letter to the Committee dated 
November 14, 2017 from Cecil Roberts, President of the United 
Mine Workers of America, ``One of the many areas of corporate 
malfeasance that was laid bare after that disaster was the lack 
of transparency by the mine's corporate owner . . . regarding 
its repeated and willful pattern of mine safety and health 
violations.'' This tragic loss of life highlighted the need to 
do more to make workplace health and safety a top priority of 
all coal companies.
    It also became clear that shareholders have a direct and 
material interest in the safety record of any mining company in 
which they invest, given that safety has as much an impact on a 
company's long-term financial health as its production. In an 
effort to make mine safety and health statistics for operators 
of U.S. and U.S. territorial mines more transparent to the 
public and to investors, Section 1503 of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (the Dodd-Frank Act) 
included comprehensive new reporting requirements for publicly 
held mining operations.
    Specifically, Section 1503 of the Dodd-Frank Act requires 
covered companies to report to the Securities and Exchange 
Commission (SEC) certain enforcement actions, including 
significant and substantial violations; unwarrantable failure 
and flagrant violations; closure orders for failure to abate or 
for an imminent danger; and pattern of violation notices and 
orders. Companies must also disclose the total number of 
fatalities, the total amount of assessed penalties, and 
information about their cases pending before the Federal Mine 
Safety and Health Review Commission.
    The SEC issued its final rule on Section 1503 in December 
21, 2011, and nearly six years into these requirements, 
affected companies appear to have adapted well to the 
additional disclosure requirements--with little evidence of 
challenge to the SEC or difficulty in following the rules. 
Furthermore, based on the SEC's publicly available review 
correspondence, to date, the SEC has had little to criticize 
with respect to companies' mine safety disclosures under 
Section 1503.
    Mine safety and health issues are of critical importance to 
workers. They are also important to the operations and, 
therefore, the financial performance of companies operating in 
the mining industry. The public, investors, and workers have 
every right to know if a company is jeopardizing its workforce 
in order to maximize profits. For all these reasons, we 
strongly oppose H.R. 4289, which would repeal a number of 
important disclosure requirements regarding mine safety and 
health violations.

                                   Maxine Waters.
                                   Daniel T. Kildee.
                                   Michael E. Capuano.
                                   Nydia M. Velazquez.
                                   Vicente Gonzalez.
                                   Joyce Beatty.
                                   Al Green.
                                   Carolyn B. Maloney.
                                   Stephen F. Lynch.
                                   Emanuel Cleaver.
                                   Charlie Crist.
                                   Keith Ellison.
                                   Wm. Lacy Clay.
                                   Ruben J. Kihuen.

                                  [all]