[Federal Register Volume 65, Number 245 (Wednesday, December 20, 2000)]
[Rules and Regulations]
[Pages 79920-80107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31166]



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Part II





Department of Labor





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Employment Standards Administration



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20 CFR Part 718 et al.



Regulations Implementing the Federal Coal Mine Health and Safety Act of 
1969, as Amended; Final Rule

  Federal Register / Vol. 65, No. 245 / Wednesday, December 20, 2000 / 
Rules and Regulations  

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DEPARTMENT OF LABOR

Employment Standards Administration

20 CFR Parts 718, 722, 725, 726, 727

RIN 1215-AA99


Regulations Implementing the Federal Coal Mine Health and Safety 
Act of 1969, as Amended

AGENCY: Employment Standards Administration, Labor.

ACTION: Final rule.

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SUMMARY: 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.

EFFECTIVE DATE: January 19, 2001.

FOR FURTHER INFORMATION CONTACT: James L. DeMarce, (202) 693-0046.

SUPPLEMENTARY INFORMATION: 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.

Summary of Noteworthy Provisions

District Director Claims Processing

    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 Secs. 725.410-725.413. Similarly, 
the Department has altered the rules governing informal conferences, 
Sec. 725.416. If a conference is held, no memorandum of conference will 
result, Sec. 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, Sec. 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, Sec. 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, Secs. 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, 
Sec. 725.407, and gather evidence from them regarding their employment 
of the miner and their status as operators, Sec. 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, Sec. 725.410. This

[[Page 79921]]

document will contain a summary of the results of the complete 
pulmonary evaluation and the district director's preliminary analysis 
of that evidence. The analysis will include a discussion of any of the 
elements of entitlement that appear not to have been established and 
why. The schedule will also contain the district director's designation 
of a responsible operator liable for the payment of claimant's 
benefits. If the designated responsible operator is not the miner's 
last employer, the district director will include with the schedule the 
statements necessary to comply with Sec. 725.495(d).
    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, Sec. 725.410(b). These time periods may be extended for good 
cause shown, Sec. 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, Sec. 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, Sec. 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, 
Sec. 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, Sec. 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, Sec. 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, Sec. 725.415(b), the district director may either 
notify additional operators of their potential liability for benefits 
under Sec. 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, 
Sec. 725.410, schedule a case for an informal conference, Sec. 725.416, 
or issue a proposed decision and order, Sec. 725.418. In the event the 
district director issues another schedule for the submission of 
additional evidence pursuant to Sec. 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 Sec. 725.410. The designated responsible 
operator may elect to adopt any medical evidence previously submitted 
by another operator as its own, subject to the Sec. 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, Sec. 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, Sec. 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, Sec. 725.416(c). These sanctions may include 
denial of the claim by reason of abandonment, Sec. 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, Sec. 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, Sec. 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 
Sec. 725.407. Any party may request a hearing within 30 days of 
issuance of the decision and order, Sec. 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, Sec. 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, Sec. 725.418(c).

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Evidentiary Development

Documentary Evidence

    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 Secs. 725.414(a), however, absent a showing of good cause, 
Sec. 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, Secs. 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 Sec. 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 Sec. 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 Sec. 725.414, Sec. 725.414(e), 
as well as the comparable provision proposed as Sec. 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, see preamble to 
Sec. 725.456. In addition, these rules would have posed a danger to 
parties who are unrepresented before the district director and might 
have run afoul of the rules unintentionally.

Complete Pulmonary Evaluation

    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, Sec. 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, Sec. 725.406(d).
    The Department has not included in the final regulation at 
Sec. 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 Sec. 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 Sec. 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.

Witnesses

    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 Sec. 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,

[[Page 79923]]

the witness must have been identified while the claim was pending 
before the district director in the absence of extraordinary 
circumstances, Sec. 725.457(c)(1). In the case of a physician offering 
testimony relevant to the physical condition of the miner, the 
physician must have prepared a medical report submitted into evidence. 
Alternatively, the party offering the physician's testimony must have 
submitted fewer than two medical reports into evidence in which case 
the physician's testimony shall be considered a medical report for the 
purpose of the evidentiary limitations in Sec. 725.414(c). A party may 
offer the testimony of more than two physicians only upon a finding of 
good cause, Sec. 725.457(c)(2).

Treating Physicians' Opinions

    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, Sec. 718.104(d). The rule is discussed 
in detail in the preamble to Sec. 718.104. The language of 
Sec. 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. 
See Sec. 718.104(d)(5). The rule's purpose is to recognize that a 
physician's professional relationship with the miner may enhance his 
insight into the miner's pulmonary condition. A treating physician may 
develop a more in-depth knowledge and understanding of the miner's 
respiratory and pulmonary condition than a physician who examines the 
miner only once or who reviews others' examination reports. Section 
718.104(d) is not an outcome-determinative evidentiary rule, however. 
It does not preclude consideration of other relevant evidence of 
record. Rather, it provides criteria for evaluating the quality of the 
doctor-patient relationship. The criteria at Sec. 718.104(d)(1)-(4) are 
indicia of the potential insight the physician may have gained from on-
going treatment of the miner. The rule is designed to force a careful 
and thorough assessment of the treatment relationship. If the 
adjudicator concludes the treating physician has a special 
understanding of the miner's pulmonary health, that opinion may receive 
``controlling weight'' over contrary opinions. That determination may 
be made, however, only after the adjudicator considers the credibility 
of the physician's opinion in light of its documentation and reasoning 
and the relative merits of the other relevant medical evidence of 
record.

Definition of Pneumoconiosis and Establishing Total Disability Due to 
Pneumoconiosis

    The Department has adopted the proposed definition of 
pneumoconiosis without alteration. In the preamble to Sec. 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, Sec. 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 
Secs. 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 
Sec. 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, see preamble to Sec. 718.103. The 
Department has concluded that the claims adjudication process would 
benefit by making mandatory the use of the flow-volume loop in 
pulmonary function testing (spirometry testing). The Department has 
previously noted that the test, conducted in this manner, provides a 
``more reliable method of ensuring valid, verifiable results * * *.'' 
64 FR 54975 (Oct. 8, 1999). In the second notice of proposed 
rulemaking, the Department announced its intent to conduct a survey of 
physicians, clinics and facilities which perform pulmonary function 
testing to evaluate the prevalence of spirometers capable of producing 
a flow-volume loop. The Department has now evaluated the results of its 
survey and has concluded that the prevalence of the necessary equipment 
and the willingness of those physicians who do not currently have it to 
buy it, warrant the mandatory usage of such equipment.

Subsequent Claims

    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 Sec. 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.

[[Page 79924]]

Attorneys' Fees

    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, Sec. 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 Sec. 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, 
Sec. 725.367(a)(1) now provides that if the responsible operator 
designated by the district director pursuant to Sec. 725.410(a)(3) 
fails to accept the claimant's entitlement to benefits within the 30 
day period provided by Sec. 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 
Sec. 725.410, and the claimant successfully prosecutes his application 
for benefits, the Fund will be liable for a reasonable attorney's fee, 
Sec. 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.

True Doubt

    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. See preamble to 
Sec. 718.3.

Criteria for Determining a Responsible Operator

    The Department has made two changes to the regulation governing the 
identification of a responsible operator, Sec. 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 Sec. 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 Sec. 725.495(d) to reflect the changes made in 
the regulations governing district director claims processing, 
Secs. 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, Sec. 725.418(d).

Insurance Endorsement

    In the second notice of proposed rulemaking, the Department opened 
Sec. 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 Sec. 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 
Sec. 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, see 
preamble to Sec. 726.203.

Explanation of Changes

Complete List of Substantive Revisions

    The Department has made substantive revisions to the following 
regulations: Sec. 718.3, Sec. 718.101, Sec. 718.102, Sec. 718.103, 
Sec. 718.104, Sec. 718.105, Sec. 718.106, Sec. 718.107, Sec. 718.201, 
Sec. 718.202, Sec. 718.204, Sec. 718.205, Sec. 718.301, Appendix B to 
part 718, Appendix C to Part 718, part 722 (entire), Sec. 725.1, 
Sec. 725.2, Sec. 725.4, Sec. 725.101, Sec. 725.103, Sec. 725.202, 
Sec. 725.203, Sec. 725.204, Sec. 725.209, Sec. 725.212, Sec. 725.213, 
Sec. 725.214, Sec. 725.215, Sec. 725.219, Sec. 725.221, Sec. 725.222, 
Sec. 725.223, Sec. 725.306, Sec. 725.309, Sec. 725.310, Sec. 725.311, 
Sec. 725.351, Sec. 725.362, Sec. 725.367, Sec. 725.403, Sec. 725.405, 
Sec. 725.406, Sec. 725.407, Sec. 725.408, Sec. 725.409, Sec. 725.410, 
Sec. 725.411, Sec. 725.412, Sec. 725.413, Sec. 725.414, Sec. 725.415, 
Sec. 725.416, Sec. 725.417, Sec. 725.418, Sec. 725.421, Sec. 725.423, 
Sec. 725.452, Sec. 725.454, Sec. 725.456, Sec. 725.457, Sec. 725.458, 
Sec. 725.459, Sec. 725.465, Sec. 725.478, Sec. 725.479, Sec. 725.490, 
Sec. 725.491, Sec. 725.492, Sec. 725.493, Sec. 725.494, Sec. 725.495, 
Sec. 725.502, Sec. 725.503, Sec. 725.515, Sec. 725.522, Sec. 725.530, 
Sec. 725.533, Sec. 725.537, Sec. 725.543, Sec. 725.544, Sec. 725.547, 
Sec. 725.548, Sec. 725.606,

[[Page 79925]]

Sec. 725.608, Sec. 725.609, Sec. 725.620, Sec. 725.621, Sec. 725.701, 
Sec. 725.706, Sec. 726.2, Sec. 726.3, Sec. 726.8, Sec. 726.101, 
Sec. 726.104, Sec. 726.105, Sec. 726.106, Sec. 726.109, Sec. 726.110, 
Sec. 726.111, Sec. 726.114, Sec. 726.300, Sec. 726.301, Sec. 726.302, 
Sec. 726.303, Sec. 726.304, Sec. 726.305, Sec. 726.306, Sec. 726.307, 
Sec. 726.308, Sec. 726.309, Sec. 726.310, Sec. 726.311, Sec. 726.312, 
Sec. 726.313, Sec. 726.314, Sec. 726.315, Sec. 726.316, Sec. 726.317, 
Sec. 726.318, Sec. 726.319, and Sec. 726.320. Detailed explanations of 
the reasons for the Department's revisions may be found in the 
discussion of individual regulations below.

Complete List of Technical Revisions

    The Department has made only technical changes to the following 
regulations: Sec. 718.1, Sec. 718.2, Sec. 718.4, 718.303, Appendix A to 
Part 718, Sec. 725.3, Sec. 725.102, Sec. 725.201, Sec. 725.206, 
Sec. 725.207, Sec. 725.216, Sec. 725.217, Sec. 725.218, Sec. 725.220, 
Sec. 725.301, Sec. 725.302, Sec. 725.350, Sec. 725.360, Sec. 725.366, 
Sec. 725.401, Sec. 725.402, Sec. 725.404, Sec. 725.419, Sec. 725.420, 
Sec. 725.450, Sec. 725.451, Sec. 725.455, Sec. 725.462, Sec. 725.463, 
Sec. 725.466, Sec. 725.480, Sec. 725.496, Sec. 725.497, Sec. 725.501, 
Sec. 725.504, Sec. 725.505, Sec. 725.506, Sec. 725.507, Sec. 725.510, 
Sec. 725.513, Sec. 725.514, Sec. 725.521, Sec. 725.531, Sec. 725.532, 
Sec. 725.536, Sec. 725.540, Sec. 725.601, Sec. 725.603, Sec. 725.604, 
Sec. 725.605, Sec. 725.607, Sec. 725.702, Sec. 725.703, Sec. 725.704, 
Sec. 725.705, Sec. 725.707, Sec. 725.708, Sec. 725.711, Sec. 726.1, 
Sec. 726.4, Sec. 726.103, Sec. 726.203, Sec. 726.207, Sec. 726.208, 
Sec. 726.209, Sec. 726.210, Sec. 726.211, Sec. 726.212, and 
Sec. 726.213. In its first notice of proposed rulemaking, the 
Department revised Sec. 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, Sec. 725.3 now appears in 
the complete list of technical revisions. The Department also 
inadvertently omitted Secs. 725.206 and 725.540 from the list of 
technical revisions. The Department added a reference to Sec. 725.4(d) 
to each regulation, see 62 FR 3340-41 (Jan. 22, 1997). The Department 
also inadvertently omitted Sec. 725.207 from the list of technical 
revisions. The Department replaced commas in subsections (b) and (c) 
with the word ``and.'' The Department also inadvertently omitted 
Sec. 725.497 from the list of technical revisions. The Department 
replaced references to the ``Trust Fund'' with references to the 
``fund,'' the term defined in Sec. 725.101(a)(8), and capitalized the 
word ``section'' in subsections (a) and (b). Finally, the Department 
inadvertently omitted Sec. 725.601 from the list of technical 
revisions. The Department replaced references to ``deputy 
commissioner'' with references to ``district director,'' see 62 FR 3340 
(Jan. 22, 1997), and replaced a reference to the ``Trust Fund'' with a 
reference to the ``fund.'' The Department explained the other technical 
changes that it was making to the regulations in its first and second 
notices of proposed rulemaking. See 62 FR 3340-41 (Jan. 22, 1997); 64 
FR 54970 (Oct. 8, 1999). With the exception of Sec. 726.203, none of 
the regulations listed above were open for comment. The Department's 
decision not to revise Sec. 726.203, other than the technical revisions 
discussed in the Department's first notice of proposed rulemaking, is 
explained in the preamble to Sec. 726.203.

Complete List of Deleted Regulations

    The following regulations have been deleted: Sec. 718.307, 
Sec. 718.401, Sec. 718.402, Sec. 718.403, Sec. 718.404, Sec. 725.453A, 
Sec. 725.459A, Sec. 725.503A, Sec. 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. See list of Technical 
revisions, 62 FR 3341 (Jan. 22, 1997). Detailed explanations of the 
Department's decision to delete the remaining regulations in this list 
may be found in the discussion of individual regulations below.

Complete List of Unchanged Regulations

    The following regulations have not been revised: Sec. 718.203, 
Sec. 718.206, Sec. 718.302, Sec. 718.304, Sec. 718.305, Sec. 718.306, 
Sec. 725.205, Sec. 725.208, Sec. 725.210, Sec. 725.211, Sec. 725.224, 
Sec. 725.225, Sec. 725.226, Sec. 725.227, Sec. 725.228, Sec. 725.229, 
Sec. 725.230, Sec. 725.231, Sec. 725.232, Sec. 725.233, Sec. 725.303, 
Sec. 725.304, Sec. 725.305, Sec. 725.307, Sec. 725.308, Sec. 725.352, 
Sec. 725.361, Sec. 725.363, Sec. 725.364, Sec. 725.365, Sec. 725.422, 
Sec. 725.453, Sec. 725.460, Sec. 725.461, Sec. 725.464, Sec. 725.475, 
Sec. 725.476, Sec. 725.477, Sec. 725.481, Sec. 725.482, Sec. 725.483, 
Sec. 725.511, Sec. 725.512, Sec. 725.520, Sec. 725.534, Sec. 725.535, 
Sec. 725.538, Sec. 725.539, Sec. 725.541, Sec. 725.542, Sec. 725.545, 
Sec. 725.546, Sec. 725.602, Sec. 725.710, Sec. 726.5, Sec. 726.6, 
Sec. 726.7, Sec. 726.102, Sec. 726.107, Sec. 726.108, Sec. 726.112, 
Sec. 726.113, Sec. 726.115, Sec. 726.201, Sec. 726.202, Sec. 726.204, 
Sec. 726.205, and Sec. 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''.

20 CFR Part 718--Standards for Determining Coal Miners' Total 
Disability or Death Due to Pneumoconiosis

Subpart A--General

20 CFR 718.3

    (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 Sec. 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 
Director, OWCP v. Greenwich Collieries, 512 U.S. 267 (1994). The Court 
held Sec. 718.3(c) failed to define the rule effectively, and that the 
rule, as applied by the Benefits Review Board, violated the 
Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., by relieving 
the claimant of the burden of proving his or her claim by a 
preponderance of the evidence (the ``burden of persuasion''). The 
Department therefore proposed deleting Sec. 718.3(c) and moving the 
existing 20 CFR 718.403 (1999) (``Burden of proof'') to proposed 
Sec. 725.103. (ii) In the second notice of proposed rulemaking, the 
Department addressed the comments responding to the proposed deletion 
of paragraph (c). 64 FR 54974 (Oct. 8, 1999). Some comments urged the 
Department to promulgate a version of the ``true doubt'' rule which 
would comply with Greenwich Collieries. Other comments suggested 
retaining paragraph (c) as a statement of general principle and a 
reminder to adjudicators of the purpose of the Black Lung Benefits Act 
(BLBA). The Department rejected both suggestions. The Department 
concluded a ``true doubt'' evidentiary rule would not improve claims 
adjudication. Rather, the factfinder must conduct an in-depth analysis 
of the medical evidence in each case, and resolve credibility issues. 
The Department also noted that evidence is rarely in equipoise because 
a factfinder must consider such a wide variety of factors in weighing 
it: Physicians' qualifications, clinical documentation,

[[Page 79926]]

reasoning, relationship to other medical evidence, etc. With respect to 
paragraph (c) as a statement of principle, the Department considered 
the provision unnecessary because it would be unenforceable, and 
because the principles appear in the legislative history of the BLBA 
which may be cited by a party in litigation. Moreover, the Department 
noted it had addressed the difficulties confronted by claimants in 
proving their claims in other regulations, e.g., by requiring 
substantial compliance rather than strict compliance with the quality 
standards for medical evidence. (iii) The Department has received four 
additional comments concerning the ``true doubt'' rule.
    (b) Two comments observe that the Department has the regulatory 
authority to promulgate a ``true doubt'' rule which will comply with 
Greenwich Collieries, and three comments urge the need for such a rule 
to implement Congressional intent that all reasonable doubt be resolved 
in the claimant's favor. The Department recognizes that it has the 
statutory authority to depart from the requirements of the APA and 
allocate burdens of production and persuasion among the parties. The 
Department, however, does not believe codification of the ``true 
doubt'' rule is necessary to afford claimants the protections Congress 
intended in directing resolution of reasonable doubts in their favor. 
Rather than a statement of general principle, the Department has 
provided assistance to claimants in other ways. As noted in the second 
notice of proposed rulemaking, the Department eased the level of 
compliance with the quality standards for clinical tests and medical 
reports from strict adherence to ``substantial compliance.'' 64 FR 
54974 (Oct. 8, 1999). The reduced standard allows the adjudicator more 
leeway to determine in each particular case whether any defects in 
compliance undermine the credibility of the test or report. Another 
example is the ``treating physician'' rule in Sec. 718.104(d). The 
regulation enhances the weight an adjudicator may give to a miner's 
treating physician's opinion provided the opinion meets certain 
standards. In addition, Sec. 725.406(d) provides each claimant with the 
opportunity to have his or her treating physician receive objective 
test results (such as a chest x-ray reading and pulmonary function 
study results), in substantial compliance with the regulations' quality 
standards. This provision ensures that the claimant's treating 
physician's opinion may be based on complying evidence. Finally, the 
Department has adopted burden-shifting presumptions such as the default 
onset date for the commencement of benefits, Sec. 725.503(b), (d), and 
the presumption of coverage for pulmonary-related medical benefits, 
Sec. 725.701(e), which assist claimants on medical treatment issues. 
These provisions significantly reduce the need for a ``true doubt'' 
rule.
    (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, i.e., ``the lung disease 
caused by fibrotic reaction of the lung tissue to inhaled dust, which 
is generally visible on chest x-rays as opacities.'' Hobbs v. 
Clinchfield Coal Co., 917 F.2d 790, 791 n. 1 (4th Cir. 1990) (citation 
omitted). The BLBA explicitly prohibits the denial of a claim based 
solely on negative x-rays. 30 U.S.C. 923(b). The reason for this 
prohibition is Congress' reservations about the reliability of negative 
x-rays as trustworthy evidence that the miner does not have 
pneumoconiosis. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 31-34 
(1976). Consequently, Congress has limited the use of negative x-rays 
in evaluating a miner's entitlement to benefits. Even if the x-ray 
readings in a particular claim appear to be truly balanced and 
therefore insufficient to meet the preponderance standard, however, the 
claimant may nevertheless establish the existence of clinical 
pneumoconiosis. For example, a factfinder might find one x-ray reading 
more credible than another based on a radiologist's explanation, 
contained in a supplemental report or deposition testimony, of the 
reasons for his x-ray diagnosis. Such reasons may include consideration 
of the miner's complete occupational history, including the length of 
his or her coal mine employment, and the absence of other injurious 
exposures, see 45 FR 13687, Discussion and changes, Sec. 718.202 (Feb. 
29, 1980). In addition, a claimant may prove the existence of ``legal'' 
pneumoconiosis. This broader category of compensable disease comprises 
``all lung diseases which * * * [are] significantly related to, or 
substantially aggravated by, dust exposure in coal mine employment.'' 
Hobbs, 917 F.2d 4 791 n. 1; see also Barber v. Director, OWCP, 43 F.3d 
899, 901 (4th Cir. 1995). In weighing medical evidence relevant to 
``legal'' pneumoconiosis, the adjudicator may consider a variety of 
factors which affect the weight of the medical evidence, e.g., the 
physicians' expertise, the reasoning and documentation in the medical 
reports, the comparative consistency or inconsistency of the opinions 
with other medical evidence such as hospital reports, etc. A claimant 
has ample opportunity to establish that (s)he has a lung disease caused 
by coal mine employment in addition to the narrow type of disease 
discoverable by x-rays. The Department therefore rejects the position 
that a ``true doubt'' rule should be available for the purpose of 
resolving conflicts in x-ray evidence.
    (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 (Sec. 718.103) and

[[Page 79927]]

blood gas studies (Sec. 718.105) must comply with far more detailed 
quality standards than x-rays. Although only ``substantial compliance'' 
is required under the regulations, the more detailed standards 
necessarily provide more points of comparison between studies and more 
bases for preferring one study to another. A party may challenge 
another party's study by submitting expert opinion evidence 
demonstrating the study is unreliable or invalid. Given the numerous 
means of challenging or bolstering a study, the Department does not 
believe a ``true doubt'' rule would play a significant role in weighing 
pulmonary function studies and blood gas studies. No change in the 
regulation is appropriate.
    (f) No other comments have been received concerning this section, 
and no changes have been made in it.

Subpart B

20 CFR 718.101

    (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. See 30 U.S.C. 
923(b). The Department concluded quality standards are consistent with 
the mandated consideration of all relevant evidence because 
noncomplying evidence is inherently unreliable, and therefore not 
relevant to the adjudication of a claim. The Department rejected the 
suggestion that the criteria enumerated in the quality standards should 
provide the only grounds for invalidating medical evidence; rather, 
parties may develop any evidence which addresses the validity of the 
evidence. The Department explained there was no need to add an 
exemption from the quality standards for hospitalization and treatment 
records because Sec. 718.101 is clear that it applies quality standards 
only to evidence developed ``in connection with a claim'' for black 
lung benefits. Finally, the Department rejected as unnecessary a 
requirement that the Department notify a party if its evidence is 
noncomplying and allow it to rehabilitate the evidence because the 
responsibility for submitting complying evidence rests with the party 
submitting it. The district director is already responsible for 
ensuring the complete pulmonary examination required by 30 U.S.C. 
923(b) complies with all applicable quality standards. In addition, if 
an opposing party challenges evidence as noncomplying, the party 
originally submitting it may rehabilitate the evidence by submitting an 
additional report from the author of the original report.
    (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 (Sec. 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

[[Page 79928]]

presence of pulmonary symptoms or impairment; and pulmonary function 
study and/or blood gas studies demonstrating impairment. Based on this 
documentation, the physician may provide a documented and reasoned 
diagnosis of ``legal pneumoconiosis'' which the adjudicator considers 
reliable, i.e., in ``substantial compliance'' with the quality 
standards. See 45 FR 13687 (Feb. 29, 1980), Sec. 718.202, Discussion 
and changes (h). (ii) In another example, the commenter posits a 
``positive'' medical opinion based on an invalid pulmonary function 
test, valid arterial blood gas testing, physical examination and other 
data. The lack of a valid pulmonary function study is not necessarily a 
reason to reject the entire report. The hypothetical assumes a valid 
blood gas test, physical examination, etc. As in the first example, 
this testing and information may support a documented and reasoned 
diagnosis depending on the purpose for which the report is offered. If 
the physical examination and clinical tests other than the pulmonary 
function study substantiate the presence of a pulmonary/respiratory 
impairment, the factfinder may deem the physician's diagnosis a 
reliable assessment of the miner's extent of impairment. If the 
employment, smoking and other personal information is accurate, the 
adjudicator may accept the physician's conclusions about the cause of 
the miner's pulmonary or respiratory impairment. If, however, the 
physician clearly relied on the invalid pulmonary function study (or 
other inaccurate data or information), the adjudicator may find the 
opinion unreliable in one or more respects. (iii) The Department 
emphasizes that the ``substantial compliance'' standard is a rule of 
reason. In each case in which an issue of noncompliance is raised, the 
factfinder must identify any failure to comply strictly with the 
applicable quality standard. The factfinder must then determine whether 
the test or report is reliable despite its failure to comply with every 
criterion in the standard. This finding is necessarily dependent to an 
extent on the element(s) of entitlement for which the test or report 
may be relevant. The significance of the particular defect must 
therefore be ascertained by considering whether it is critical to the 
physician's conclusions. In the first example, the lack of an x-ray may 
be excused if the physician has offered a documented and reasoned 
diagnosis of ``legal'' pneumoconiosis. In the second example, the 
invalid pulmonary function study may or may not affect an otherwise 
documented and reasoned evaluation of the miner's respiratory/pulmonary 
condition. No categorical response, however, can be given to the 
hypotheticals since the reliability, and therefore the probative value, 
of the reports can only be evaluated in the context of an actual claim. 
No change in the regulation is warranted.
    (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 Sec. 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. See Secs. 718.102(e) (x-rays), 718.103(c) (pulmonary 
function studies), 718.104(c) (medical reports). The Department has 
added a similar provision to Sec. 718.105 (arterial blood gas studies). 
With respect to each category of evidence, the availability of tests or 
reports in substantial compliance with the applicable quality standards 
makes reliance on the noncomplying tests or reports unnecessary; the 
record already contains reliable evidence addressing the deceased 
miner's pulmonary condition, and reliable evidence is the fundamental 
purpose of the quality standards. Furthermore, excusing noncompliance 
for all evidence involving a deceased miner ignores the fact that 
existing evidence may be brought into substantial compliance despite 
the unavailability of the miner. The party offering the evidence may 
obtain a supplementary opinion from the physician who conducted the 
noncomplying test or authored the report, and cure the defect(s). 
Finally, the party may submit the noncomplying evidence in any event, 
ecognizing that it may be considered but cannot establish any fact for 
which complying evidence is in the record.
    (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 Sec. 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 
Sec. 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, Sec. 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 Sec. 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

[[Page 79929]]

developed by any party in black lung benefits claim litigation. 
Although the Board has rejected the Department's position, Gorzalka v. 
Big Horn Coal Co., 16 Black Lung Rep. 1-48, 1-51 (1990) (and cases 
collected), the only court of appeals to consider the issue has agreed 
with the Department. Director, OWCP v. Mangifest, 826 F.2d 1318 (3d 
Cir. 1987). The Department adheres to this view with respect to any 
evidence developed in conjunction with a claim by any party before the 
effective date of the proposed regulations.
    (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.

20 CFR 718.102

    (a) In the initial notice of proposed rulemaking, the Department 
proposed three minor changes to Sec. 718.102: eliminating the reference 
to the compliance standard in light of the substantial compliance 
language of general applicability in Sec. 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 Sec. 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 Sec. 718.102(b) and (e), in 
conjunction with Sec. 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, i.e., 
paragraph (b). Section 718.101(b) reinforces this requirement by 
stating that ``any evidence'' which is not in substantial compliance 
with the applicable quality standard cannot ``establish the fact for 
which it is proffered.'' For purposes of the quality standards, 
``substantial compliance'' may mean less than strict compliance with 
each and every requirement of the applicable quality standard if the 
evidence is nevertheless deemed reliable by the factfinder. The 
adjudicator must determine whether the x-ray reading is, or is not, in 
substantial compliance if one or more items of required information 
have been omitted, including classification of x-ray findings according 
to any of the reporting schemes in Sec. 718.102(b). In some 
circumstances, the adjudicator may determine that the x-ray 
interpretation provides sufficient information to make a factual 
finding on the presence or absence of pneumoconiosis. For example, the 
physician may describe the film findings in terms of ``no 
pneumoconiosis,'' rather than classifying the film as ``0/-, 0/0 or 0/
1.'' Such a reading may be considered sufficiently detailed to be in 
``substantial compliance'' notwithstanding the lack of classification. 
Conversely, the physician's description or reporting of x-ray film 
findings may indicate (s)he read the film for reasons unrelated to 
diagnosing the existence of pneumoconiosis, e.g., lung cancer or 
cardiac surgery. The adjudicator may consider that evidence not in 
substantial compliance because it does not reliably address the 
presence or absence of pneumoconiosis. Accordingly, the Department 
disagrees with the commenter's position that any unclassified x-ray is 
not in ``substantial compliance'' with Sec. 718.102.
    (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, i.e., 
``legal'' pneumoconiosis. The recommended change is unnecessary. An 
unclassified x-ray which yields positive indications of lung disease 
cannot establish the presence of pneumoconiosis under 
Sec. 718.202(a)(1), which is intended as a means of proving only the 
existence of clinical pneumoconiosis. An x-ray report, however, may 
also be part of a medical report which must be considered under 
Sec. 718.202(a)(4). Even an unclassified x-ray may therefore provide 
some clinical basis for a diagnosis of a respiratory disease arising 
out of coal mine employment under that section. Consequently, provision 
is already made for consideration of the results of an unclassified x-
ray in the context of a medical report. In this context, it may be used 
to support a diagnosis of legal pneumoconiosis.
    (d) No other comments were received concerning this section, and no 
other changes have been made in it.

20 CFR 718.103

    (a)(i) The Department proposed amending Sec. 718.103 in the initial 
notice of proposed rulemaking to take into account proposed 
Sec. 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 
Sec. 718.103(c) to harmonize it with Sec. 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 Sec. 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 Sec. 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

[[Page 79930]]

testing produce either a Forced Vital Capacity (FVC) or a Maximum 
Voluntary Ventilation (MVV) result, yet also required a one-second 
Forced Expiratory Volume (FEV1) which must be derived from the FVC. The 
Department agreed the regulation was inconsistent, and proposed a 
revision to Sec. 718.103(a) making the FVC a required result along with 
the FEV1 and the MVV optional. The Department also proposed increasing 
the allowable difference between the two largest MVV values from 5 
percent to 10 percent in Sec. 718.103(b) to harmonize the regulation 
with Appendix B. The former and initially proposed Sec. 718.103(b) 
required submission of three tracings of the MVV maneuver unless the 
two largest MVV results were within 5 percent of each other, in which 
case only two tracings were necessary. By contrast, Appendix B has 
consistently stated that the variation between the two largest MVV 
shall not exceed 10 percent. The Department chose the more liberal 
variation. The Department agreed that the validity of the MVV and FEVl/
FVC values must be assessed independently, and that the MVV maneuver is 
optional for compliance purposes. The Department, however, rejected the 
suggestion to remove certain technical requirements from the quality 
standards to avoid invalidating a pulmonary function test for less than 
strict compliance; the Department responded that the ``substantial 
compliance'' standard would allow a party to establish the credibility 
of the study, notwithstanding the absence of one or more of the 
Sec. 718.103 requirements. Finally, the Department proposed revisions 
to Secs. 718.104(a)(6) and 718.204(b)(2)(iv) to recognize that a 
medical report cannot be rejected for lack of a pulmonary function 
study if the performance of the test was medically contraindicated. 
(iii) For the final rule, the Department has changed the word 
``submitted'' in Sec. 718.103(b) to ``developed'' to conform the 
regulation to similar usage in Sec. 718.101(b). The Department also 
changed the opening phrase of the first sentence in Sec. 718.103(c) to 
clarify that paragraph (c) is an exception to the remainder of 
Sec. 718.103. Finally, the Department amended the final sentence in 
subsection (c) to make clear that a noncomplying pulmonary function 
test involving a deceased miner may be used to establish the presence 
or absence of a respiratory or pulmonary impairment under limited 
circumstances. If no complying test is in the record and, in the 
adjudicator's opinion, the noncomplying test yielded technically valid 
results and the miner provided good cooperation, the party submitting 
the noncomplying test may rely on it.
    (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 Sec. 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. See also Sec. 725.406(a). 
Under Sec. 725.406(c), the district director is responsible for 
ensuring that the examination authorized by 30 U.S.C. 923(b) is in 
``substantial compliance'' with the requirements of part 718, including 
the quality standards. Section 725.406(d) requires the Department to 
make available to the claimant's physician, on the claimant's request, 
the clinical test results obtained in conjunction with the pulmonary 
examination. Thus, contrary to the commenter's concern, the claimant's 
physician should routinely be able to consider substantially complying 
clinical testing of the miner in formulating an opinion, despite the 
lack of capable technology in his or her own practice.
    (d) One comment approves of the Sec. 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 Sec. 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.

20 CFR 718.104

    (a)(i) The Department proposed several changes to Sec. 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

[[Page 79931]]

guidelines for the adjudicator to determine whether to afford special 
weight to an opinion from the miner's treating physician. The 
Department considered codification of the treating physician's special 
status appropriate, given its longstanding judicial recognition in the 
caselaw. In order to ensure a critical analysis of the physician-
patient relationship, the guidelines described four basic factors the 
adjudicator must consider: whether the physician provided pulmonary or 
non-pulmonary treatment; how long the physician treated the miner; how 
often the physician treated the miner; and what types of tests and 
examinations the physician conducted. Finally, the Department 
emphasized that the adjudicator must consider not only the quality of 
the physician's relationship with the miner, but also the reasoning and 
documentation in the opinion itself, and in the context of the 
remainder of the record, before crediting that opinion. (ii) In the 
second notice of proposed rulemaking, the Department responded to the 
extensive comments which the proposed regulation had elicited. 64 FR 
54976-77 (Oct. 8, 1999). The Department revised the regulation to 
excuse mandatory pulmonary function testing if it was medically 
contraindicated and the physician conducted other types of medically 
accepted diagnostic tests; to make explicit that a treating physician's 
opinion could be used to establish all elements of a miner's 
entitlement; and to accept the physician's statement as to subsection 
(d)'s treating relationship criteria, absent contrary evidence from 
another party. The Department rejected comments which advocated the 
automatic acceptance of a treating physician's opinion if it satisfied 
the criteria of subsections (d)(1) through (5) and was documented and 
reasoned, regardless of the remaining medical evidence. The Department 
also rejected one comment which contended the regulation already 
mandated the automatic acceptance of a treating physician's opinion in 
violation of 30 U.S.C. 923(b) (requiring consideration of all relevant 
evidence). In response, the Department emphasized that Sec. 718.104(d) 
only required the adjudicator to consider the possible enhanced value 
of a treating physician's opinion, and did not require a mechanistic 
acceptance of that opinion. The Department responded in similar fashion 
to several comments which contended that all medical opinions, 
including a treating physician's opinion, should be evaluated only on 
the strength of their documentation and reasoning and each physician's 
professional qualifications. With respect to a comment recommending 
placement of the treating physician rule in a separate regulation, the 
Department concluded no change was warranted; subsection (d)'s position 
in the quality standards governing reports of physician examinations 
underscored that a treating physician's opinion was required to satisfy 
the same quality standards as any other physician examination report 
developed in connection with a claim for benefits. The Department 
acknowledged some commenters' concern that unrepresented claimants 
would likely submit noncomplying reports from their treating 
physicians. The Department, however, rejected the suggestion that 
treating physicians' opinions should be exempted from the evidentiary 
limitations for that reason. Instead, the Department noted its own 
obligation to inform claimants in an understandable manner about the 
evidentiary limitations, and to provide any claimant's treating 
physician with the results of the Sec. 725.406 objective testing upon 
the claimant's request. The Department denied one comment's suggestion 
that language in the initial notice of proposed rulemaking (see 62 FR 
3339 (Jan. 22, 1997)) made an adjudicator's failure to consider a 
physician's training and specialization reversible error. In the 
Department's view, a physician's qualifications were an issue only when 
raised by a party. The Department also rejected the suggestion that a 
chest x-ray, administered and read in accordance with Sec. 718.102, not 
be mandatory documentation for a complying report of physical 
examination. The Department cited the importance of such a diagnostic 
test and the flexibility of the ``substantial compliance'' standard in 
excusing noncompliance depending on the particular circumstances of the 
case. In response to two comments, the Department declined to remove a 
limitation on the use of noncomplying medical opinions. The regulation 
therefore allowed consideration of reports of physical examination not 
in substantial compliance with Sec. 718.104 only if the miner was 
deceased, the physician was unavailable to cure the defects in the 
report, and there was no complying report in the record. In 
explanation, the Department emphasized that entitlement decisions must 
be based on the best available evidence. Finally, the Department 
invited additional public comment on alternative means of determining 
when a treating physician's opinion should receive ``controlling 
weight,'' including whether the Department should adopt the Social 
Security Administration's rule. (iii) For purposes of the final rule, 
the Department has altered subsection (c) to conform this provision to 
the general ``substantial compliance'' standard in Sec. 718.101(b). As 
amended, Sec. 718.104(c) makes clear that a noncomplying report of 
physical examination may nevertheless provide evidence for a factual 
finding in certain limited circumstances involving a deceased miner and 
the lack of any complying report of physical examination in the record. 
The report must have been prepared by a physician who is 
``unavailable,'' e.g., deceased, whose whereabouts are unknown, etc. 
The report must also be found to possess sufficient indicia of 
reliability that the adjudicator may reasonably rely on it for factual 
findings.
    (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 Sec. 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. 
See 64 FR 54977 (Oct. 8, 1999). The Department has revised the language 
of section 718.104(d), however, in light of several commenters' 
continued confusion as to the role of Sec. 718.104(d) in weighing 
reports of physical examinations. The Department hopes to clarify its 
original intent with this revision. Like the previously proposed 
version, subsection (d) acknowledges the special weight which the 
opinion of a miner's treating physician may receive from the 
adjudicator. Section 718.104(d)(1)-(4) provide criteria for evaluating 
the quality of that doctor-patient relationship as indicia of the 
potential insight the physician may have gained from on-going treatment 
of the miner.

[[Page 79932]]

Instead of compelling the automatic acceptance of the treating 
physician's opinion, section 718.104(d) is designed to force a careful 
and thorough assessment of the treatment relationship. The adjudicator 
may conclude that no additional weight is due the physician's opinion 
because one or more of the criteria establish facts which make such 
weight inappropriate. For example, the physician may have provided only 
a short-term course of treatment, or have actually examined the miner 
only infrequently. The adjudicator should consider giving additional 
weight to the treating physician's opinion only when review of the 
regulatory criteria establishes the physician's thorough understanding 
of the miner's pulmonary condition. Subsection (d)(5) describes the 
next step in the adjudicator's inquiry: the adjudicator must consider 
whether the treating physician's opinion is supported by sufficient 
documentation and reasoning, and must weigh it with all other reasoned 
and documented medical opinions in the record. In addition, the fact 
finder must consider all other relevant evidence of record. The 
regulation provides that only after the adjudicator finishes this 
weighing may he, in appropriate cases, base his decision to give 
``controlling weight'' to the opinion of the miner's treating physician 
on that physician's superior understanding of the miner's pulmonary 
condition. The Department recognizes that each case will present 
different issues regarding both the extent to which the treating 
physician meets the four criteria in subsection (d)(1)-(4), the 
documentation and reasoning of that physician's opinion, and the 
relative merits of the other relevant medical evidence of record. As a 
result, the regulation does not attempt to dictate the outcome of any 
particular case. The Department therefore rejects the position that 
Sec. 718.104(d) intrudes on the fact-finding responsibilities of the 
adjudicator.
    (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 
Sec. 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 Sec. 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 Sec. 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 
Secs. 718.202(a)(3) and 718.304(a); accordingly, Sec. 718.102 provides 
the applicable quality standards, and not Sec. 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, Melnick v. Consolidation Coal Co., 16 Black 
Lung Rep. 1-31, 1-33 (1991), the evidence must pertain to the means of 
diagnosing or refuting the existence of complicated pneumoconiosis as 
provided by 30 U.S.C. 921(c)(3)(B) and (C). Cf. Double B Mining v. 
Blankenship, 177 F.3d 240, 243 (4th Cir. 1999) (holding factfinder must 
determine whether evidence relevant to each method of invoking 
irrebuttable presumption is ``equivalent,'' and establishes same 
underlying condition). The physician's report may provide additional 
valuable insight into his or her reasons for interpreting the x-ray as 
positive for complicated pneumoconiosis rather than some other 
condition detectable by x-ray; to that extent, the report may be 
relevant to weighing the credibility of the x-ray evidence. As a report 
of physical examination, however, the hypothetical report does not 
satisfy the ``substantial compliance'' standard. (iii) In his report of 
physical examination, a physician relies in part on a noncomplying 
pulmonary function test, but another complying test yields comparable 
results. Again, ``substantial compliance'' is a test of evidentiary 
reliability based on all relevant circumstances of the particular case. 
The factfinder must evaluate those circumstances and determine whether 
the specific omission undermines the credibility of the evidence. In 
the hypothetical, the factfinder must consider not only the defects in 
the physician's pulmonary function study, but also the remaining 
documentation in the report (other clinical studies, the miner's 
employment, smoking and personal information, etc.). If the report 
otherwise complies with Sec. 718.104, the invalid pulmonary function 
study may be mitigated by the presence of a complying study which 
confirms the physician's interpretation of the invalid study.
    (d) One comment supports the revision of Sec. 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 
Sec. 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

[[Page 79933]]

concept, it is also necessary to ensure that claims are adjudicated 
using the most reliable evidence available. Consequently, the 
Department has incorporated limitations throughout the quality 
standards on the use of noncomplying evidence in claims involving 
deceased miners in which there is no complying evidence of record. The 
fact that a miner is deceased is not necessarily a bar to 
rehabilitating noncomplying evidence. With respect to reports of 
physical examination, the physician who is available to review and 
further comment on his or her own report may cure the defect and bring 
the report into substantial compliance. If, however, the physician is 
unavailable, Sec. 718.104(c) permits noncomplying evidence to be 
considered if there is no complying evidence of record. The Department 
believes noncomplying evidence should be used to establish facts about 
a deceased miner's condition only when no practical alternative is 
available. As long as complying evidence or the means of achieving 
compliance exist, noncomplying evidence should not be the basis for 
determining the validity of a claim.
    (f) One comment objects to the retroactive application of the 
changes made to Sec. 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 Sec. 718.101(b). 
Consequently, the changes to Sec. 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. See 62 FR 3342 (Jan. 22, 1997). These decisions recognize that 
special weight may be afforded the opinion of a miner's treating 
physician based on the physician's opportunity to observe the miner 
over a period of time.
    (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 Sec. 718.104(a)(l)-
(6). A treating physician's report must be reasoned as well as 
documented (Sec. 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. See, e.g., Sterling Smokeless Coal 
Co. v. Akers, 131 F.3d 43 8, 441 (4th Cir. 1997); Lango v. Director, 
OWCP, 104 F.3d 573, 577 (3d Cir. 1997); Peabody Coal Co. v. Helms, 901 
F.2d 571, 573-74 (7th Cir. 1990); see generally Halsey v. Richardson, 
441 F.2d 1230, 1236 (6th Cir. 1971) (rejecting ``a mechanical rule 
insulating a treating doctor's opinion from attack, no matter how 
respectable and persuasive may be opposing opinions by doctors who 
examined a claimant on only one occasion''). As for the commenters' 
statement that the frequency of patient contact provides no advantage 
to a physician, this view is too simplistic. Frequency of treatment is 
only one of the regulatory criteria (Sec. 718.104(d)(3)) the 
adjudicator must consider in assessing the treating physician 
relationship. The number of visits must be viewed in the context of the 
other criteria (nature of relationship, duration of relationship, type 
and extent of treatment). The totality of the information demanded by 
the criteria establishes the overall quality of the doctor-patient 
relationship, which guides the adjudicator in determining whether to 
accord the treating physician's opinion controlling weight. The 
comments do not state a basis for changing or eliminating the 
``treating physician'' rule.
    (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 Sec. 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.'' 
Richardson v. Perales, 402 U.S. 389, 409 (1971). In any event, the 
commenters misapprehend both the nature of Sec. 718.104(d) and the 
critical differences between that regulation and the SSA version. The 
commenters describe the ``treating physician'' rule as an ``evidentiary 
preference.'' The Department interprets this phrase to characterize the 
rule as a burden-shifting presumption which imposes on the party 
opposing the claim the burden to overcome the ``preference'' for the 
treating physician's opinion. The Department, however, has repeatedly 
emphasized in the second

[[Page 79934]]

notice of proposed rulemaking and its responses to comments in this 
rule that Sec. 718.104(d) does not create a presumption in favor of the 
treating physician's opinion. See 64 FR 54976-77 (Oct. 8, 1999). The 
regulation provides a set of criteria to guide the adjudicator's 
evaluation of the treating physician's professional relationship with 
the miner, and ensure a critical and thorough factual determination 
whether that opinion should ultimately be given ``controlling weight.'' 
Aside from assessing the strength or weakness of the treating 
physician's report, the adjudicator must also weigh that report against 
all other relevant evidence in the record. Consequently, 
Sec. 718.104(d) is not a strict, outcome-determinative rule like more 
traditional evidentiary presumptions. These characteristics also 
distinguish Sec. 718.104(d) from SSA's version in 20 CFR 404.1527(d). 
Both regulations state that ``controlling weight'' may be given to a 
treating physician's report. Section 404.1527(d), however, provides 
that ``[g]enerally, we give more weight to opinions from your treating 
sources, * * *.'' 20 CFR 404.1527(d)(2) (1999). This language 
demonstrates an affirmative preference for reports from treating 
physicians; Sec. 718.104(d) is more qualified in permitting 
``controlling weight'' only if the regulatory criteria warrant it. 
Another significant difference between the regulations is the role the 
criteria play in determining the weight given the medical evidence. 
Section 404.1527(d) makes the criteria relevant only after the 
adjudicator refuses to give the treating physician ``controlling 
weight:'' ``Unless we give a treating source's opinion controlling 
weight * * * we consider all of the following factors in deciding the 
weight we give to any medical opinion.'' The regulation lists several 
criteria which are similar to those listed in Sec. 718.104(d)(l)-(4). 
Section 718.104(d) makes the same criteria the basis for determining in 
the first place whether to give the treating physician controlling 
weight. To the extent 20 CFR 404.1527(d) operates like an evidentiary 
presumption, it does not affect the validity of Sec. 718.104(d) because 
Sec. 718.104(d) clearly is not a presumption in favor of the treating 
physician's opinions. Accordingly, the Department rejects the 
commenters' position that the rule violates the APA.
    (i) Three comments oppose the requirement in Sec. 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. See, e.g., Milburn Colliery Co. v. Hicks, 
138 F.3d 524, 536 (4th Cir. 1998). Furthermore, the commenter's concern 
over comparative qualifications overlooks an important consideration 
underlying the ``treating physician'' rule. In black lung benefits 
claims, the principal issue ordinarily is the miner's pulmonary 
condition. The treating physician may develop a more in-depth knowledge 
and understanding of that issue than a physician with greater academic 
credentials and minimal, or nonexistent, contact with the miner. The 
purpose of the Sec. 718.104(d) criteria is to enable the adjudicator to 
determine whether the treating physician has such informed knowledge 
that his or her opinion merits special weight.
    (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 
Sec. 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 
Sec. 718.104 and making it a separate regulation. The Department 
rejected the identical

[[Page 79935]]

argument in the second notice of proposed rulemaking. 64 FR 54976-77 
(Oct. 8, 1999). The Department intends the quality standards to apply 
to any physician's report developed in connection with a claim for 
benefits, including any report prepared by a treating physician. 
Although a treating physician may have a superior perspective on the 
miner's health in certain circumstances, status alone does not 
guarantee the validity of the physician's opinion.
    (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. See 20 CFR 404.1527(d)(2) (1999). The 
commenter opposes any other use of the SSA regulation. The additional 
language is inappropriate. See paragraph (h), above. Section 718.104(d) 
outlines the circumstances in which a treating physician may be 
afforded ``controlling weight'' on entitlement issues. Although the 
regulation recognizes the special value which may attach to a treating 
physician's report in certain circumstances, the Department does not 
intend to deflect attention from the necessity for critical examination 
of the physician's reasoning and documentation. The Department has 
previously explained the intended limits of section 718.104(d) as an 
evidentiary rule which guides consideration of a treating physician's 
opinion but does not impose a strict outcome. 64 FR 54977 (Oct. 8, 
1999). The recommended additional language does not further this 
purpose. Accordingly, the recommendation is rejected. (iii) No comment 
recommended adopting the SSA regulation in place of the regulation as 
proposed by the Department.
    (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.

20 CFR 718.105

    (a)(i) In the initial notice of proposed rulemaking, the Department 
proposed amending Sec. 718.105 to address arterial blood gas studies 
which are administered during a miner's terminal hospitalization, i.e., 
``deathbed'' studies. 62 FR 3342-43 (Jan. 22, 1997). Specifically, the 
Department expressed concern that such studies may produce qualifying 
values for reasons unrelated to chronic pulmonary disease. The 
Department therefore suggested a new requirement that a claimant must 
submit a physician's report linking the blood gas study results to a 
chronic pulmonary condition caused by exposure to coal mine dust in 
order to rely on the qualifying results as evidence of total 
disability. 62 FR 3375 (Jan. 22, 1997). (ii) In response to comments 
received, the Department deleted the requirement that, in the case of 
blood gas studies administered during a hospitalization that ends in 
the miner's death, the chronic pulmonary condition must be shown to be 
related to the miner's exposure to coal mine dust; the Department 
agreed the causation requirement was inappropriate because Sec. 718.105 
addresses the existence of a chronic pulmonary impairment, and not its 
source. 64 FR 54977-78 (Oct. 8, 1999). The Department also agreed to a 
minor change in technical nomenclature by changing ``p'' to ``P'' to 
denote partial pressure. Finally, the Department rejected those 
comments which opposed requiring the claimant to establish a link 
between a miner's ``deathbed'' blood gas study and a chronic pulmonary 
condition. The Department concluded the proposed requirement was 
necessary because the miner's qualifying test results during a terminal 
hospitalization may be related to an acute non-pulmonary condition 
rather than a chronic pulmonary impairment. 64 FR 54977 (Oct. 8, 1999).
    (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 
(Sec. 718.102(e)) and pulmonary function studies (Sec. 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 Sec. 718.104(a) and (b). See Sec. 718.104(c), above. The 
Department agrees, and has revised Sec. 718.105 accordingly by adding 
subsection (e). This provision is comparable to Sec. 718.103(c), and 
permits the adjudicator to consider a deceased miner's blood gas 
studies not in substantial compliance with subsections (a), (b) and (c) 
if they are the only available tests and, in the adjudicator's opinion, 
are technically valid. Subsection (e) also requires any such test to 
meet the requirements of subsection (d) if the test was obtained during 
a miner's hospitalization ending in death and yielded qualifying 
values. The claimant must submit a physician's opinion establishing 
that the qualifying values reflect a chronic pulmonary impairment and 
not some acute condition unrelated to a chronic pulmonary impairment.
    (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. See generally Director, OWCP v. Greenwich Collieries, 512 
U.S. 267 (1994). One facet of the claimant's burden is the 
responsibility to ensure that the clinical tests such as blood gas 
studies substantially comply with the quality standard. The quality 
standard provides some assurance to the adjudicator that the clinical 
test is valid, accurate and reliable evidence of the factual 
proposition for which it is proffered. The Department considers a 
physician's opinion necessary to establish a nexus between ``deathbed''

[[Page 79936]]

blood gas studies and a chronic pulmonary disease; raw clinical test 
results under these circumstances are not sufficiently instructive for 
a lay adjudicator to make such a determination. The fact that the party 
opposing entitlement may have equal access to relevant information 
about the circumstances and interpretation of the blood gas testing is 
not determinative in allocating the burden of persuasion. The 
Department does not perceive any basis for shifting the overall burden 
of proof from the claimant to the opposing party in the case of 
qualifying ``deathbed'' blood gas studies. The comments do not address 
the Department's explanation in the second notice of proposed 
rulemaking, 64 FR 54977-78 (Oct. 8, 1999), for imposing this 
requirement, beyond noting continued opposition. The Department 
therefore rejects the comments' position.
    (d) No other comments were received concerning this section, and no 
other changes have been made in it.

20 CFR 718.106

    (a) The Department proposed minor changes to Sec. 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 
(Sec. 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 Sec. 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 et al., 
``Pathologic Criteria for Assessing Coal Workers'' Pneumoconiosis,'' in 
the Archives of Pathology and Laboratory Medicine (1979). The 
Department emphasized its historic reluctance to adopt specific 
standards for such diagnoses; the lack of evidence in the record that 
the medical community agrees on a particular standard; and the lack of 
evidence indicating the Kleinerman article reflects an accepted 
standard.
    (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 Double B Mining, Inc. v. Blankenship, 
177 F.3d 240 (4th Cir. 1999), as legal authority for rejecting the 
Kleinerman article. In that case, the Court considered whether a biopsy 
diagnosis of a certain-sized fibrotic nodule amounted to a ``massive 
lesion'' for purposes of proving the miner had complicated 
pneumoconiosis under 30 U.S.C. 921(c)(3) (irrebuttable presumption of 
total disability due to pneumoconiosis invoked by proof of complicated 
pneumoconiosis). The Court cited, among other sources, the Kleinerman 
article as requiring a minimum two-centimeter nodule to constitute a 
``massive lesion.'' The Court declined to adopt the two-centimeter rule 
because ``[t]he [Black Lung Benefits Act] does not mandate use of the 
medical definition of complicated pneumoconiosis.'' 177 F.3d at 244. 
Instead, the Court held the adjudicator must determine whether a 
particular nodule discovered by biopsy would be equivalent to a one-
centimeter opacity if diagnosed by x-ray. The Blankenship decision 
rejects only the mandatory use of the medical community's standards for 
diagnosing complicated pneumoconiosis by biopsy in view of the court's 
statutory analysis. The Court does not accept or reject any specific 
clinical criteria for biopsy diagnoses, and the Department does not 
interpret the decision as repudiating the Kleinerman article in 
particular.
    (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 Sec. 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.

20 CFR 718.107

    (a) In the initial notice of proposed rulemaking, the Department 
proposed a clarification of Sec. 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 Sec. 718.107 as 
proposed in the initial notice of proposed rulemaking.
    (b) For purposes of the final rule, the Department emphasizes that 
Sec. 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.

[[Page 79937]]

Subpart C

20 CFR 718.201

    (a) In the initial notice of proposed rulemaking, the Department 
proposed amending Sec. 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 Sec. 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 Federal 
Register, where that source appears. This second citation is not an 
exhaustive list; thus, each source may appear at additional points in 
the Rulemaking Record.
    (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

[[Page 79938]]

properly implement Congress' intent. In so doing, the Department is 
acknowledging the distinction already adopted by the circuit courts of 
appeals in construing and applying the statutory definition. See, e.g., 
Gulf & Western Industries v. Ling, 176 F.3d 226, 231-32 (4th Cir. 
1999); Bradberry v. Director, OWCP, 117 F.3d 1361, 1368 (11th Cir. 
1997); Labelle Processing Co. v. Swarrow, 72 F.3d 308, 315 (3d Cir. 
1995); Consolidation Coal Co. v. Hage, 908 F.2d 393, 395-396 (8th Cir. 
1990); Campbell v. Consolidation Coal Co., 811 F.2d 302, 304 (6th Cir. 
1987); Peabody Coal Co. v. Lowis, 708 F.2d 266, 268 n.4 (7th Cir. 
1983).
    (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. See generally Peabody Coal Co. v. Spese, 117 F.3d 1001, 
1010 (7th Cir. 1997) (en banc); Davis, Administrative Law Treatise, 
Sec. 6.7, 261-262 (3d ed. 1994). The revised definition will eliminate 
the need for litigation of this issue on a claim-by-claim basis, and 
render invalid as inconsistent with the regulations medical opinions 
which categorically exclude obstructive lung disorders from 
occupationally-related pathologies. The Department reiterates, however, 
that the revised definition does 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 obstructive lung disease did in fact arise 
out of his coal mine employment, and not from another source. Thus, 
instead of attempting to force the conclusion, as one commenter 
contends, that all obstructive lung disorders are compensable, or to 
require responsible operators to compensate miners for non-
occupationally related diseases, the language of the proposed 
regulation makes plain that only ``obstructive pulmonary disease 
arising out of coal mine employment'' falls within the definition of 
pneumoconiosis.
    (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 Sec. 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, Criteria for a 
Recommended Standard, Occupational Exposure to Respirable Coal Mine 
Dust (1995). 62 FR 3343 (Jan. 22, 1997); Rulemaking Record, Exhibit 2-
1. This publication provides the most exhaustive review and analysis of 
the relevant scientific and medical evidence through 1995, including 
its evaluation of the evidence regarding the role smoking plays in a 
coal miner's respiratory status. The conclusions NIOSH reached there as 
a result of its analysis fully support the position it has taken in 
commenting during these rulemaking proceedings. Accordingly, the 
Department rejects these broad-based attacks on NIOSH's conclusions as 
a basis for altering this regulation.
    (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

[[Page 79939]]

X-ray or autopsy ``is not correlated with a worsening of lung 
function,'' and the relevant studies ``have not shown clinically 
significant deterioration in lung function as the emphysema worsens.'' 
Rulemaking Record, Exhibit 89-37, Appendix C at 32-33.
    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, Criteria for a 
Recommended Standard, Occupational Exposure to Respirable Coal Mine 
Dust (1995) (Criteria). 62 FR 3343 (Jan. 22, 1997); Rulemaking Record, 
Exhibit 2-1. NIOSH concluded that ``[i]n addition to the risk of simple 
CWP and PMF [progressive massive fibrosis], epidemiological studies 
have shown that coal miners have an increased risk of developing 
COPD.'' Criteria 4.2.3.2, Rulemaking Record, Exhibit 2-1 at 57.
    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., Occupational Lung Diseases (WB Saunders 
Co., 3d ed. 1995) 374-406, see also Rulemaking Record, Exhibit 89-37, 
Appendix C at 34, 42, reviewed much of the same published evidence and 
made the following analysis:

    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., Textbook of Pulmonary Medicine (1st ed. 1988) 1556-1592, see also 
Criteria, Rulemaking Record, Exhibit 2-1 at 204, concludes:

    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 underestimates the association between inhalation of coal 
mine dust and loss of lung function. As Oxman explains, ``it is likely 
that the results underestimate the effect of occupational dust exposure 
on lung function, COPD, and chronic bronchitis. The magnitude of the 
bias is not clear, but it might, in some cases, result in estimates 
that are 50% or more of the true coefficients.'' Oxman at 47. Moreover, 
as Coggon and Newman Taylor remarked in the course of surveying the 
relevant medical literature, such selection effects are relatively 
unimportant because ``[t]here is no obvious reason why the relation of 
symptoms and lung function to dust should have been weaker in those 
omitted from investigation.'' Coggon D, Newman Taylor A, ``Coal mining 
and chronic obstructive pulmonary disease: a review of the evidence,'' 
Thorax 53:398-407, 400 (1998); see also 64 FR 54979 (Oct. 8, 1999) 
Simply stated, there is a clear relationship between coal mine dust and 
COPD and lung dysfunction, and that relationship is likely to be 
stronger than what we are able to measure.
    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); see also Criteria, 
Sec. 4.2.2.1, Rulemaking Record, Exhibit 2-1 at 52. This study also 
noted that the presence of chronic

[[Page 79940]]

bronchitis was clearly related to cumulative dust exposure. The table 
below summarizes the study's data:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Cumulative dust exposure (in percent)
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Zero exposure          Intermediate exposure (174 ghm    High exposure (348 ghm -3)
                                                         --------------------------------               -3)              -------------------------------
           Measure of respiratory dysfunction                                            --------------------------------
                                                              Smoker         Nonsmoker        Smoker         Nonsmoker        Smoker         Nonsmoker
--------------------------------------------------------------------------------------------------------------------------------------------------------
FEV1 80%................................................            17.1             9.7            24.2            15.5            40.0            23.9
Chronic bronchitis......................................            30.5             7.9            41.2            14.8            52.8            26.3
Chronic bronchitis+FEV1 80%.............................             7.6             1.5            14.9             3.9            27.3             9.8
FEV1 65%................................................             5.0             3.2             8.5             5.0            14.2            7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note to table: Percentages are estimates of prevalence of measures of respiratory dysfunction based on linear logistic models at an age of 47 years at
  varying amounts of cumulative dust exposure.

    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); see also Criteria, Sec. 4.2.2, Rulemaking Record, 
Exhibit 2-1 at 51. Attfield and Hodous analyzed pulmonary function data 
(specifically, FEV1, FVC and FEV1/FVC ratio) drawn from Round 1 of the 
National Study of Coal Workers' Pneumoconiosis, along with job-specific 
cumulative dust exposure estimates for U.S. underground coal miners, to 
determine whether there was an exposure-response relationship. This 
group of 7,139 miners worked both before and after 1970, when 
federally-mandated dust control standards were implemented. Allowing 
for decrements due to age and smoking history, Attfield and Hodous 
demonstrated a clear relationship between dust exposure and a decline 
in pulmonary function of about 5 to 9 milliliters a year, even in 
miners with no radiographic evidence of clinical coal workers' 
pneumoconiosis. These results were similar to those reached in studies 
of British coal miners.
    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 
kinds of diseases will remain the same. Indeed, Attfield and Hodous 
specifically chose to use data from miners with presumably higher dust 
exposures so as to facilitate the detection of exposure-response 
relationships. Attfield and Hodous, Am Rev Respir Dis 145:605.
    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); see also Criteria, Sec. 4.2.2.3.1, Rulemaking 
Record, Exhibit 2-1 at 54. The data they reviewed was collected during 
Round 4 of the National Study of Coal Workers' Pneumoconiosis, and 
included chest X-rays, ventilatory function tests (including FEV1, FVC 
and FEV1/FVC ratio), and relevant histories for each miner. The results 
of this cross-sectional analysis, when adjusted for age, race/ethnicity 
and smoking, demonstrated a declination in pulmonary function 
attributable to coal mine dust-induced obstructive lung disease.
    Longitudinal studies have confirmed these results. See generally 
Criteria, Sec. 4.2.2.3.1.2, Rulemaking Record, Exhibit 2-1 at 55. One 
noteworthy study is Attfield MD, ``Longitudinal decline in FEV1 in 
United States coalminers,'' Thorax 40:132-137 (1985); see also 
Criteria, Sec. 4.2.2.3.1.2, Rulemaking Record, Exhibit 2-1 at 55. Using 
medical data from two National Coal Study surveys held nine years 
apart, Attfield evaluated the effects of dust exposure on a group of 
1,072 miners aged 20-49 years. The data included chest X-rays, smoking 
and work histories, and spirometry, as well as dust exposure estimates. 
After accounting for age, height and smoking, Attfield found a coal 
mine dust-related FEV1 loss of 36 to 84 ml over 11 years, with an 
additional loss among smokers. Attfield's results confirmed similar 
studies analyzing data from miners in the U.K. See, e.g., Love RG, 
Miller BG, ``Longitudinal study of lung function in coal-miners,'' 
Thorax 37:193-197 (1982); see also Criteria, Sec. 4.2.2.3.1.2, 
Rulemaking Record, Exhibit 2-1 at 55.
    Drs. Fino and Bahl contend, however, that the average decline shown 
in these studies, while perhaps statistically

[[Page 79941]]

relevant, is not clinically relevant and does not result in any 
impairment. Attfield and Hodous responded succinctly to such criticism, 
equating pulmonary function decrements in miners to the decline of lung 
function in non-mining smokers from the general population: ``If it is 
thought that a 5- to 9-ml decrement of FEV1 per year is clinically 
insignificant, it must be remembered that the average decrement for 
smokers was only 5 ml per pack year. This, in itself, is also a minor 
loss of lung function. However it is well known that smoking can cause 
severe effects in some smokers.'' Attfield and Hodous, Am Rev Respir 
Dis 145:608. Just as not all smokers develop COPD and pulmonary 
dysfunction, pulmonary impairment is not universal in coal miners. Drs. 
Fino and Bahl state that ``an average loss of FEV1 means that 50% of 
the miners will have losses in excess of the average and 50% will have 
losses smaller than the average.'' Rulemaking Record, Exhibit 89-37, 
Appendix C at 21. This conclusion does not stand up to scrutiny because 
it confuses the average with the median. As can be seen from Marine's 
table above, only a minority of miners will have significant decrements 
in pulmonary function. As the majority of miners may have small or, 
perhaps in some cases, no decline in pulmonary function, the average 
decline of the population studied can appear to be relatively small. 
Despite this, the individual miners affected can have quite severe 
disease, and statistical averaging hides this effect. The amended 
definition clarifies that these miners have a right to prove their case 
with evidence of a disabling obstructive lung disease that arose out of 
coal mine employment.
    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); see also 64 FR 54979 (Oct. 8. 
1999); Rulemaking Record, Exhibit 89-37, Appendix C at 24, Drs. Fino 
and Bahl state that the studies have not shown this type of loss of 
pulmonary function. Rulemaking Record, Exhibit 89-37, Appendix C at 24. 
The implication that Coggon and colleague agree with this conclusion is 
misleading. The paragraph containing the quoted sentence notes that 
there is evidence connecting COPD with coal mining and that ``in view 
of this continuing controversy, it is helpful to review the evidence as 
it now stands.'' The authors reviewed data from the National Study of 
Coal Workers' Pneumoconiosis, the Pneumoconiosis Field Research 
Programme (U.K.), studies from Sardinia and Germany, and mortality and 
necropsy studies. They concluded:

    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. See, e.g., Morgan WKC, 
``Pneumoconiosis,'' in Brewis RAL, Corrin B, Geddes DM, Gibson GJ, 
eds., Respiratory Medicine (WB Saunders Co., 2d ed. 1995) 581; see also 
Rulemaking Record, Exhibit 89-21, attachment 1 (``it is clear that 
bronchitis induced by coal-mine dust, henceforth referred to as 
industrial bronchitis, leads to a reduction in ventilatory capacity''); 
Green FHY, Vallyathan V, ``Coal Workers'' Pneumoconiosis and 
Pneumoconiosis Due to Other Carbonaceous Dusts,'' in Chung A, Green 
FHY, eds., Pathology of Occupational Lung Disease (2d ed. 1998) 189; 
see also Rulemaking Record, Exhibit 89-21, attachment 2 (coal dust 
exposure is ``associated with significant deficits in lung function in 
the absence of [clinical] CWP, reinforcing the view that COPD and CWP 
have independent risk factors''); ``Occupational Lung Disease,'' in 
Hasleton PS, ed., Spencer's Pathology of the Lung (5th ed. 1996) 482; 
see also Rulemaking Record, Exhibit 89-21, attachment 4 (``A 
considerable body of evidence indicates that chronic bronchitis and 
emphysema in coal workers is directly related to tobacco usage and 
cumulative exposure to respirable dust during life.''); Roy TM et al., 
``Cigarette Smoking and Federal Black Lung Benefits in Bituminous Coal 
Miners,'' J Occ Med 31(2):100 (1989); see also Rulemaking Record, 
Exhibit 89-21, attachment 5 (``Well-designed investigations have now 
documented that coal dust exposure can cause reductions in FEV1 that 
are independent of age and cigarette smoking. * * * it appears that the 
major damage caused by cigarette smoking is additive to the minor 
damage which can be attributed to coal dust.''); Surgeon General, U.S. 
Department of Health and Human Services, ``Respiratory Disease in Coal 
Miners,'' The Health Consequences of Smoking: Cancer and Chronic Lung 
disease in the Workplace, 313 (1985); see also Rulemaking Record, 
Exhibit 89-21, attachment 11 (concluding that ``increasing coal dust 
exposure is associated with increasing airflow obstruction in both 
smokers and nonsmokers''). To the extent this commenter advocates that 
tobacco smoking, rather than coal mine dust exposure, causes the only 
significant obstructive disorders miners develop, and that the 
definition of pneumoconiosis ``must be tightened to deal with the truth 
of tobacco's role in causing what has been compensated as black lung,'' 
the Department reiterates that the studies cited above, as well as 
others, found a significant decrement in coal miners' pulmonary 
function in addition to that caused by smoking. Whether a particular 
miner's disability is due to his coal mine employment or smoking habit 
must be resolved on a claim-by-claim basis under the criteria set forth 
at Sec. 718.204.
    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); see also Criteria, 
Sec. 4.2.2.2, Rulemaking Record, Exhibit 2-1 at 52. Centrilobular 
emphysema (the predominant type observed) was significantly more common 
among the coal workers. The severity of the emphysema was related to 
the amount of dust in the lungs. These findings held even after 
controlling for age and smoking habits.
    Similarly, Leigh and colleagues analyzed 886 miners who died 
between 1949 and 1982. Leigh J, Outhred KG, McKenzie HI, Glick M, Wiles 
AN,

[[Page 79942]]

``Quantified pathology of emphysema, pneumoconiosis and chronic 
bronchitis in coal workers,'' BR J Indust Med 40:258-263 (1983); see 
also Criteria, Sec. 4.2.2.2, Rulemaking Record, Exhibit 2-1 at 53. They 
found that miners with more years of face work had worse emphysema 
pathologically. In a subsequent study of 264 underground coal miners 
exposed to mixed coal and silica dust, Leigh performed a multiple 
regression analysis to assess the effects of total lung coal content, 
total lung silica content, smoking history, and years at the coal face 
on pulmonary function, extent of emphysema, and extent of fibrosis. 
Leigh J, Driscoll TR, Cole BD, Beck RW, Hull BP, Yang J, ``Quantitative 
relation between emphysema and lung mineral content in coalworkers,'' 
Occ Environ Med 51:400-407 (1994); see also Criteria, Sec. 4.2.2.2, 
Rulemaking Record, Exhibit 2-1 at 53. Multiple regression analysis is a 
powerful statistical tool used to identify which of a series of 
variables is responsible for an observed correlation, and to eliminate 
apparent correlations that can be explained by other true 
relationships. He made the following important findings: (1) The extent 
of emphysema was strongly related to the total coal content of the 
lung, age and smoking; (2) in miners who were lifelong non-smokers, the 
extent of emphysema was strongly related to coal content and age; (3) 
the extent of emphysema was unrelated to lung silica content; and (4) 
the extent of lung fibrosis was related to silica content. The authors 
concluded that ``these results provide strong evidence that emphysema 
in coalworkers is causally related to lung coal content.'' Leigh, Occ 
Environ Med 51:400.
    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, et al., ``Emphysema and dust exposure in a group 
of coal workers,'' Am Rev Resp Dis 129:528-532 (1984); see also 
Criteria, Sec. 4.2.2.2, Rulemaking Record, Exhibit 2-1 at 53. Emphysema 
was graded by standard techniques, smoking histories were obtained by 
questionnaire and Pneumoconiosis Panel records, and lung dust content 
was analyzed pathologically. Relationships between emphysema and 
possible explanatory variables were tested by multiple logistic 
regression models, which exclude confounding variables in analyzing 
causal effects. The authors found emphysematous changes in 72% of 
miners who smoked, 65% of ex-smokers, and 42% of nonsmoking miners; 
emphysema scores were higher in patients with increasing evidence of 
pneumoconiotic disease; and increasing coal lung dust was associated 
with the presence of emphysema. Forty-seven percent of miners with no 
fibrotic lesions had emphysema. Ruckley concluded that ``the results 
support the conclusion that the relationship observed between 
respirable dust and emphysema in coal workers is, in some way, 
causal.'' Ruckley, Am Rev Resp Dis 129:532.
    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, 
Occupational Lung Diseases, as saying that changes of focal emphysema 
cannot be equated with airways obstruction. The commenters fail to note 
additional comments in the same 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.

Seaton, Occupational Lung Diseases at 400-401. Morgan's conclusions are 
also somewhat suspect because he has admitted that at least in 
commenting on the Cockcroft paper, some of his criticisms were 
inaccurate and not valid or fair. Judgement of Mr. Justice Turner, The 
British Coal Respiratory Disease Litigation, Jan. 23, 1998, Rulemaking 
Record, Exhibit 72. Dr. Fino and Bahl's citation to Snider, Snider GL, 
``Emphysema: the first two centuries-and beyond. A historical overview, 
with suggestions for future reference,'' Am Rev Resp Dis 146:1333-1344 
(Part 1) and 146:1615-1622 (Part 2) (1992); see also Rulemaking Record, 
Exhibit 89-37, Appendix C at 34, is also unhelpful because the articles 
contain no opinion as to whether emphysema in coal miners can be 
clinically significant or affects pulmonary function. Coal dust 
exposure was plainly not the focus of these articles.
    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. Criteria, 4.3, Rulemaking Record, Exhibit 2-1 
at 65-69; see generally Coggon, Thorax 53:404. Alveolar macrophages are 
cells that are normally situated in the alveoli, or gas-exchange units 
of the lung. Their normal function is to recognize foreign substances, 
phagocytize (ingest) these substances, and activate other inflammatory 
cells. Coal dust, in turn, causes leakage of destructive protease and 
elastase enzymes from alveolar macrophages. These enzymes can destroy 
the network of elastin and collagen proteins that comprise the 
underlying support structure of the lung architecture; the release of 
these enzymes from inflammatory cells is thus associated with the 
production of emphysema. Lung lavage studies are performed by washing 
an area of lung with saline instilled through a fiberoptic bronchoscope 
placed through a subject's throat and wedged into the lung. These 
studies of nonsmoking coal miners with simple CWP showed activation of 
macrophages with evidence of ingestion of dust particles, a finding not 
present in normal controls. Takemura T, Rom WM, Ferrans VJ, Crystal RG, 
``Morphologic characterization of alveolar macrophages from subject 
with occupational exposure to inorganic particles,'' Am Rev Resp Dis 
140:1674-1685 (1989); see also Criteria, Sec. 4.3.3, Rulemaking Record, 
Exhibit 2-1 at 69. A subsequent lavage study of nonsmoking coal miners 
found that the macrophages spontaneously released substances toxic to 
the lung, including reactive oxygen species and elastase. These 
substances were released in significantly higher quantities in miners 
than in non-mining smokers or in non-mining nonsmokers without lung 
disease. Rom WN, ``Basic mechanisms leading to focal emphysema in coal 
workers'' pneumoconiosis,'' Environ Res 53:16-28 (1990); see also 
Rulemaking Record, Exhibit 5-174, Appendix 8. As noted, the reactive 
oxygen species damage cell membranes, cell proteins, and DNA. Over-
secretion of these substances may overwhelm the lung's natural defenses 
(such as anti-oxidants and anti-proteases). The unopposed proteases and 
elastases can destroy lung tissue, causing emphysema.
    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

[[Page 79943]]

emphysematous changes. This was demonstrated in an animal model of coal 
dust inhalation, where the coal dust was found to increase elastase 
levels and cause degradation of alpha-1 antitrypsin (one of the 
protective enzymes) in association with pathologic findings of 
emphysema. In vitro studies have also demonstrated that the protective 
anti-protease activity of alpha-1 antitrypsin is decreased by exposure 
to coal dust. These observations support the theory that dust-induced 
emphysema and smoke-induced emphysema occur through similar 
mechanisms--namely, the excess release of destructive enzymes from 
dust- (or smoke-) stimulated inflammatory cells in association with a 
decrease in protective enzymes in the lung.
    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. Criteria, Sec. 4.3.1, Rulemaking Record, 
Exhibit 2-1 at 65-69. Tumor necrosis factor- (TNF) and 
Interleukin 6 (IL-6) are two of them. TNF is released by alveolar 
macrophages as well as other cells in response to coal dusts (as well 
as other mineral dusts). TNF stimulates lung fibrosis. Patients with 
progressive CWP have higher TNF release from lung monocytes. TNF 
release is also increased in coal miners with airflow obstruction. TNF 
has been demonstrated to be an important mediator in obstructive 
airways diseases including COPD and asthma. Alveolar macrophages have 
been shown to release IL-6 in response to exposure to coal mine dust. 
Increased IL-6 levels were noted in lungs of coal miners with CWP. IL-6 
has been implicated in the creation of inflammatory changes of the 
lower respiratory tract in chronic bronchitis as well as reactive 
airways disease. In addition, other cellular mediators, including 
leukotriene B4, thromboxane A2, prostaglandin E2, and platelet 
activating factor, have been shown to be produced by alveolar 
macrophages or other pulmonary cells in response to coal mine dust and 
are well known to play a role in the production of reactive airways 
disease. Thus, there is considerable basic scientific data linking coal 
dust to the development of obstructive airways disease.
    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 Occupational Lung 
Disease is a good example. Moreover, the NIOSH Criteria document, 
Rulemaking Record, Exhibit 2-1, received extensive peer review prior to 
its publication. See Criteria, Rulemaking Record, Exhibit 2-1 at xxii-
xxiv.
    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, Criteria, Sec. 7.3.4, Rulemaking Record, Exhibit 2-1 at 124, and 
concluded that the science provided a substantial basis for adopting a 
permissible dust exposure limit. NIOSH summarized its findings based on 
some of the studies detailed above, along with others, as follows:

    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.

Criteria, 4.2.3.2 (citations omitted), Rulemaking Record, Exhibit 2-1 
at 57. That coal mine dust exposure can cause obstructive lung disease 
is now a well-documented fact.
    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. See generally Labelle Processing Co. v. 
Swarrow, 72 F.3d 308, 315 (3d Cir. 1995) (``Chronic bronchitis, as a 
chronic pulmonary disease, falls within the legal definition of 
pneumoconiosis.''); Kline v. Director, OWCP, 877 F.2d 1175, 1178 (3d 
Cir. 1989) (The legal definition of pneumoconiosis ``encompasses a 
wider range of afflictions than does the more restrictive medical 
definition of coal workers' pneumoconiosis.''); Richardson v. Director, 
OWCP, 94 F.3d 164, 166 n.2 (4th Cir. 1996) (``COPD, if it arises out of 
coal-mine employment, clearly is encompassed within the legal 
definition of pneumoconiosis, even though it is a disease apart from 
clinical pneumoconiosis.''); Warth v. Southern Ohio Coal Co., 60 F.3d 
173, 175 (4th Cir. 1995) (``Chronic obstructive lung disease * * * is 
encompassed within the definition of pneumoconiosis for purposes of 
entitlement to Black Lung benefits.''); Barber v. Director, OWCP, 43 
F.3d 899, 901 (4th Cir. 1995) (``physicians generally use 
`pneumoconiosis' as a medical term that comprises merely a small subset 
of the afflictions compensable under the Act''); Bethlehem Mines Corp. 
v. Massey, 736 F.2d 120, 124 (4th Cir. 1984) (recognizing that 
emphysema can be aggravated by coal dust exposure); Peabody Coal Co. v. 
Holskey, 888 F.2d 440, 442 (6th Cir. 1989) (substantial evidence 
supported ALJ's decision to credit doctor who believed miner's chronic 
obstructive pulmonary disease was related to coal dust exposure over 
doctor who believed the disease was caused solely by cigarette 
smoking); Campbell v. Consolidation Coal Co., 811 F.2d 302, 304 (6th 
Cir. 1987) (where miner had obstructive lung disease and no evidence 
demonstrated it was not

[[Page 79944]]

related to coal mine employment, employer failed to rebut interim 
presumption of entitlement); Freeman United Coal Mining Co. v. OWCP, 
957 F.2d 302, 303 (7th Cir. 1992) (recognizing that the Act's 
definition of pneumoconiosis encompasses obstructive disease caused in 
whole or in part by exposure to coal dust); Old Ben Coal Co. v. 
Prewitt, 755 F.2d 588, 591 (7th Cir. 1985) (recognizing that chronic 
obstructive pulmonary disease ``fits the statutory definition'' of 
pneumoconiosis); Associated Elec. Coop., Inc. v. Hudson, 73 F.3d 845, 
847 (8th Cir. 1996) (affirming award of benefits based on medical 
evidence of ``severe obstructive lung disease caused by coal dust 
exposure''); Consolidation Coal Co. v. Hage, 908 F.2d 393, 395 (8th 
Cir. 1990) (chronic obstructive lung disease ``constitutes a type of 
ailment which Congress deems sufficient to entitle a claimant to Black 
Lung benefits''); Bradberry v. Director, OWCP, 117 F.3d 1361, 1368 
(11th Cir. 1997) (``COPD that arises from coal-mine employment falls 
within the legal definition of pneumoconiosis.''); Stomps v. Director, 
OWCP, 816 F.2d 1533, 1536 (11th Cir. 1987) (ordering award of benefits 
on strength of medical opinion that miner's totally disabling chronic 
obstructive pulmonary disease was caused in part by coal mine 
employment).
    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 
Sec. 718.202(a)(2). The revised version of Sec. 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 Criteria 
document, Rulemaking Record, Exhibit 2-1, and is further analyzed in 
many of the articles considered by the Department and NIOSH in 
proposing the revisions.
    (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. See, e.g., Robinson v. Missouri Mining 
Co., 955 F.2d 1181, 1183 (8th Cir. 1992); Penn Allegheny Coal Co. v. 
Mercatell, 878 F.2d 106, 109-110 (3d Cir. 1989). This principle will 
continue to govern under the revised regulation. Thus, the Department 
does not believe a change to the proposed regulation is necessary.
    (n) Several comments support the proposal, noting that the 
revisions to the

[[Page 79945]]

definition of pneumoconiosis are supported by the current state of 
medical knowledge.
    (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.

20 CFR 718.202

    (a) In the initial notice of proposed rulemaking, the Department 
proposed changing Sec. 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 Sec. 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 Sec. 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 Sec. 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. See 
Worhach v. Director, OWCP, 17 Black Lung Rep. 1-105, 1-110 (1993) 
(physician's opinion which merely restates x-ray findings is not a 
diagnosis of pneumoconiosis for purposes of Sec. 718.202(a)(4)). 
Furthermore, Sec. 718.202(a)(4) already recognizes that a diagnosis of 
pneumoconiosis may be made based on a documented and reasoned medical 
opinion despite a negative x-ray. Warth v. Southern Ohio Coal Co., 60 
F.3d 173, 174-75 n.* (4th Cir. 1995) (holding physician's opinion that 
pneumoconiosis cannot be diagnosed absent positive x-ray or tissue 
samples conflicts with Sec. 718.202(a)(4) because physician's diagnosis 
may be based on other clinical evidence notwithstanding negative x-
ray). Finally, only a physician can determine the diagnostic value of a 
negative x-ray in assessing the presence or absence of a respiratory or 
pulmonary disease in a particular miner. The law only prohibits making 
the negative x-ray the sole and conclusive basis for ruling out the 
disease.
    (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. See 
Worhach v. Director, OWCP, 17 Black Lung Rep. 1-105, 1-108 (1993) 
(holding adjudicator may properly consider physician's professorship in 
radiology in weighing radiological qualifications under 
Sec. 718.202(a)(1)); compare Melnick v. Consolidation Coal Co., 16 
Black Lung Rep. 1-31, 1-37 (1991) (en banc) (holding adjudicator may 
not consider physician's ``prestigious teaching position'' outside the 
field of radiology under Sec. 718.202(a)(1) in assessing physician's 
radiological competence).
    (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. See preamble to Sec. 718.107, 62 FR 3343 (Jan. 22, 1997). 
Any party may support or challenge the probative value of a particular 
test with expert opinions. No useful purpose would therefore be served 
by adopting a blanket exclusion of any particular type of testing. (ii) 
Based on the alleged unreliability of CT scans, two comments urge the 
Department to make clear that a claimant may refuse to undergo a CT 
scan without prejudicing the adjudication of his or her claim. The 
Department rejects this position. The adjudicator should determine 
whether a claimant's refusal to undergo a CT scan (or any other medical 
test) is reasonable in light of all relevant circumstances in the 
particular case. A general exoneration for all claimants refusing CT 
scans is not warranted, especially since the Department does not 
endorse the commenters' premise that this technology is necessarily 
unreliable in the absence of standardized criteria for interpreting it. 
(iii) One comment contends the CT scan is sufficiently reliable that a 
negative result effectively rules out the existence of pneumoconiosis. 
The statutory definition of ``pneumoconiosis,'' however, encompasses a 
broader spectrum of diseases than those pathologic conditions which can 
be detected by clinical diagnostic tests such as x-rays or CT scans. 
See generally Island Creek Coal Co. v. Compton, F.3d, No. 98-2051, 2000 
WL 524798, *4 (4th Cir. May 2, 2000) (reviewing medical and legal 
definitions of ``pneumoconiosis,'' the latter of which is broader). For 
purposes of the Black Lung Benefits Act, ``pneumoconiosis'' includes 
any ``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). A CT scan may provide reliable evidence 
in a particular claim that the miner does not have any evidence of the 
disease which can be detected by that particular diagnostic technique. 
The record, however, does not contain any medical evidence 
demonstrating the capacity of CT scans to rule out the existence of all 
diseases ``arising out of coal mine employment.'' See Compton, F.3d, 
2000 WL 524798, *4 (noting that a medical diagnosis of no 
pneumoconiosis is not equivalent to a diagnosis of no legal 
pneumoconiosis), citing Hobbs v. Clinchfield Coal Co., 45 F.3d 819, 821 
(4th Cir. 1995). The Department therefore cannot accept the commenter's

[[Page 79946]]

position that a negative CT scan is self-sufficient evidence that the 
miner does not have ``pneumoconiosis'' for purposes of the statute.
    (e) No other comments were received concerning this section, and no 
changes have been made in it.

20 CFR 718.204

    (a)(i) The Department proposed several significant changes to 
Sec. 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, i.e., a miner may be totally disabled for 
purposes of the Black Lung Benefits Act (BLBA) notwithstanding the 
existence of any independently disabling non-respiratory/pulmonary 
impairments. This change emphasized the Department's disagreement with 
Peabody Coal Co. v. Vigna, 22 F.3d 1388 (7th Cir. 1994) (holding 
claimant's entitlement precluded by disabling stroke which was 
unrelated to coal mine employment and occurred before evidence of 
disability due to pneumoconiosis); contra Youghiogheny & Ohio Coal Co. 
v. McAngues, 996 F.2d 130 (6th Cir. 1993), cert. den. 510 U.S. 1040 
(1994) (holding miner's disabling injuries from automobile accident 
irrelevant to disability determination under BLBA). Another revision 
codified holdings in two circuits that ``disability'' for purposes of 
the BLBA is a totally disabling respiratory or pulmonary impairment, 
and not ``whole person'' disability. The Department also proposed a 
definition for ``disability causation'' to harmonize the various 
formulations of that standard in circuit court decisions: a miner is 
totally disabled ``due to pneumoconiosis'' if the disease is a 
``substantially contributing cause'' of the miner's disability. 
Similarly, the Department proposed recognizing that pneumoconiosis may 
worsen a totally disabling respiratory or pulmonary impairment which is 
itself unrelated to coal mine employment. Finally, the Department 
proposed a number of editorial changes to Sec. 718.204 to rationalize 
its structure. 62 FR 3344-45 (Jan. 22, 1997). (ii) In the second notice 
of proposed rulemaking, the Department proposed a minor revision to 
Sec. 718.204(b)(2)(iv) by restoring language from 20 CFR 718.204(c)(4) 
(1999), which had been omitted inadvertently. The language set forth 
the circumstances under which a medical report may establish the 
miner's total disability. 64 FR 54979, 55014 (Oct. 8, 1999). The 
Department also responded to numerous comments it had received 
concerning the proposed regulation. 64 FR 54979-80 (Oct. 8, 1999). 
Several comments expressed both support for, and opposition to, the 
Department's rejection of Vigna's holding that a pre-existing totally 
disabling impairment which is unrelated to coal mine employment 
precludes entitlement under the BLBA. The Department concluded the 
commenters had provided no reason for changing the proposed regulation. 
The Department also rejected comments which recommended adopting a 
``whole person'' standard for total disability, rather than the 
proposed definition limiting disability to pulmonary and respiratory 
impairments. The commenters offered no rationale in support of the 
requested change other than a statutory interpretation of ``total 
disability'' previously rejected by two circuit courts in favor of the 
Department's position. With respect to ``disability causation,'' the 
Department rejected: challenges to its authority to define ``disability 
due to pneumoconiosis'' given the statute's broad grant of rulemaking 
authority and the ambiguity in the statutory term; various alternative 
formulations of the disability causation standard in place of 
``substantially contributing cause'' inasmuch as the Department's 
definition reflected a general consensus in the existing caselaw; and 
arguments that the ``substantially contributing cause'' standard 
permitted awards based solely on smoking-related disability because 
such awards are contrary to both the BLBA and judicial precedent. Other 
than the restoration of language to Sec. 718.204(b)(2)(iv), the 
Department did not propose any additional changes to Sec. 718.204. 64 
FR 54979-80 (Oct. 8, 1999).
    (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. 
Secs. 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 any adverse effect, 
no matter how limited, was sufficient to establish total disability due 
to pneumoconiosis. Rather, the Department meant only to codify the 
numerous decisions of the courts of appeals which, in the process of 
deciding when a miner is totally disabled due to pneumoconiosis, have 
also ruled on what evidence is legally sufficient to establish that 
element of entitlement. In order to clarify this consistent intent, the 
Department has added the word ``material'' to Sec. 718.204(c)(1)(i) and 
``materially'' to Sec. 718.204(c)(1)(ii). In so doing, the Department 
intends merely to implement the holdings of the courts of appeals. 
Thus, evidence that pneumoconiosis makes only a negligible, 
inconsequential, or insignificant contribution to the miner's total 
disability is insufficient to establish that pneumoconiosis is a 
substantially contributing cause of that disability.
    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. Adams v. Director, OWCP, 886 F.2d 818, 825 (6th 
Cir. 1989); Mangus v. Director, OWCP, 882 F.2d 1527, 1530-1531 (10th 
Cir. 1989). Moreover, the courts have also recognized the difficulties 
that would confront a miner who must prove the relative amounts that 
various causal elements contribute to his totally disabling respiratory 
or pulmonary impairment. See Compton v. Inland Steel Coal Co., 933 F.2d 
477, 481-483 (7th Cir. 1991); Adams, 886 F.2d at 825; Mangus, 882 F.2d 
at 1530-1531. The courts have held that a claim will not be denied 
simply because a physician reasonably may be unwilling or unable to 
account, as a percentage or otherwise, for the exact degree of 
impairment caused by pneumoconiosis. See, e.g., Barger v. Abston 
Constr. Co., 196 F.3d 1261 (11th Cir. 1999) (Table) (opinion

[[Page 79947]]

that pneumoconiosis was ``at least a partial contributing cause'' of 
miner's disability sufficient to prove disability due to 
pneumoconiosis); Cross Mountain Coal Co. v. Ward, 93 F.3d 211, 218 (6th 
Cir. 1996) (opinion that miner's ``impairment is due to his combined 
dust exposure, coal workers'' pneumoconiosis as well as his cigarette 
smoking history'' sufficient); Benjamin Coal Co. v. McMasters, 27 F.3d 
555 (3d Cir. 1994) (Table) (opinions that (1) pneumoconiosis was the 
``least significant'' factor contributing to miner's disability, and 
(2) coal dust exposure and cigarette smoking contributed to miner's 
impairment but doctor was unable ``to differentiate between the effects 
of the two causes'' sufficient); Compton v. Inland Steel Coal Co., 933 
F.2d 477, 479 (7th Cir. 1991) (opinion that ``pneumoconiosis * * * was 
one of the conditions that brought about the pulmonary impairment'' 
sufficient); Robinson v. Pickands Mather & Co., 914 F.2d 35, 36 (4th 
Cir. 1990) (opinion that miner's ``disability was consistent with 
occupational pneumoconiosis'' sufficient); Lollar v. Alabama By-
Products Corp., 893 F.2d 1258, 1267 (11th Cir. 1989) (physician's 
diagnosis of ``restrictive pulmonary functions and pleural disease by 
chest x-ray with minimal parenchymal disease, all of which is 
consistent with coal workers' pneumoconiosis,'' sufficient); Adams v. 
Director, OWCP, 886 F.2d 818, 826 (6th Cir. 1989) (diagnosis of ``total 
disability resulting from a combination of pneumoconiosis, emphysema 
and chronic obstructive lung disease'' sufficient); Bonessa v. United 
States Steel Corp., 884 F.2d 726 (3d Cir. 1989) (opinion that 
pneumoconiosis made a ``substantial contribution'' to miner's 
disability sufficient); Mangus v. Director, OWCP, 882 F.2d 1527 (10th 
Cir. 1989) (evidence that miner's pneumoconiosis caused complications 
requiring removal of entire lung during surgery intended to remove only 
part of lung as treatment of lung cancer, sufficient).
    (c)(i) One comment states the Department has not justified its 
revision of Sec. 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 McAngues, 996 F.2d 130, as authority 
for its view that non-pulmonary/respiratory impairments cannot be 
considered in a disability determination. McAngues, 996 F.2d at 134-35, 
quotes with approval the following language from Twin Pines Coal Co. v. 
U.S. Dept. of Labor, 854 F.2d 1212 (10th Cir. 1988):

    * * * [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, quoting Peabody Coal Co. v. Director, OWCP 
[Huber], 778 F.2d 358, 363 (7th Cir. 1985); see also Cross Mountain 
Coal Co. v. Ward, 93 F.3d 211, 217 (6th Cir. 1996). This line of 
authority from three federal courts of appeals fully supports the 
Department's revision of Sec. 718.204(a). Although Vigna adopts a 
contrary interpretation of the BLBA, the Seventh Circuit did not 
address its own precedent in Huber or the contrary decisions in 
McAngues and Twin Pines. Accordingly, the Department does not consider 
Vigna a sufficient basis for altering the regulation. (ii) Several 
comments support the Department's position.
    (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 (Sec. 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 Peabody Coal Co. v. Vigna, 22 
F.3d 1388 (7th Cir. 1994). In that decision, the Court held a miner's 
entitlement to benefits was precluded by his disabling stroke because 
the stroke was unrelated to coal mine employment and occurred before 
any evidence the miner was disabled by pneumoconiosis. The Department 
disagrees with Vigna. Non-respiratory or pulmonary disabilities may co-
exist with total disability due to pneumoconiosis, but the former are 
irrelevant for purposes of determining whether a miner is entitled to 
black lung benefits. Consequently, non-respiratory or pulmonary 
impairments have no relevance to the disability causation standard, and 
the limitation on introducing evidence concerning such conditions is 
appropriate.
    (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, i.e., total disability based on a combination of 
pneumoconiosis and any other physical impairments which prevent the 
miner from performing his or her usual coal mine work or comparable and 
gainful work. The Department has previously rejected the ``whole 
person'' standard in both the initial and second notices of proposed 
rulemaking. 62 FR 3345 (Jan. 22, 1997); 64 FR 54979 (Oct. 8, 1999). The 
Department has consistently taken the position that proof of a totally 
disabling respiratory or pulmonary impairment is an essential element 
of a miner's claim for black lung benefits. See, e.g., Beatty v. Danri 
Corp. & Triangle Enter., 49 F.3d 993, 1001 (3d Cir. 1995); Jewell 
Smokeless Coal Corp. v. Street, 42 F.3d 241, 243 (4th Cir. 1994); 
Lollar v. Alabama By-Products Corp., 893 F.2d 1258, 1262-1263 (11th 
Cir. 1990); Bosco v. Twin Pines Coal Co., 892 F.2d 1473, 1480 (10th 
Cir. 1989); Adams v. Director, OWCP, 886 F.2d 818, 820 (6th Cir. 1989). 
Adoption of a ``whole person'' definition of total disability would 
greatly expand the black lung benefits program and transform it into a 
general disability program for coal miners. The Department is convinced 
such a result has never been the intent of Congress. Moreover, unlike 
the Social Security Administration which has regulations, procedures, 
and personnel devoted to the evaluation of impairments from the ``whole 
person'' perspective, the Department simply is not equipped to evaluate 
such impairments. The Department's approach to the definition of total 
disability is not undermined by the allowance of survivors' claims 
where death was due in part to nonrespiratory or nonpulmonary

[[Page 79948]]

conditions but was actually hastened by pneumoconiosis.
    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 Sec. 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, i.e., the 
``documentation.'' See generally Director, OWCP v. Rowe, 710 F.2d 251, 
255 (6th Cir. 1983). If one or more of the premises is faulty or 
inconsistent with the conclusions reached by the physician, the 
adjudicator may find the opinion not credible. Contrary to the 
commenter's position, a physician's reasoning cannot be divorced from 
the underlying documentation. As for defining the necessary 
documentation, Sec. 718.104(a) sets forth the basic requirements for 
any report of physical examination obtained in connection with a claim 
for black lung benefits, and subsection (b) accommodates any additional 
testing the physician may consider useful.
    (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. Sec. 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 Dehue Coal 
Co. v. Ballard, 65 F.3d 1189 (4th Cir. 1995). In that decision, the 
Court held that a miner who had totally-disabling lung cancer was not 
entitled to benefits because his pneumoconiosis, by definition, could 
not contribute to his disability. The Department believes a miner 
should not be denied benefits if the miner's pneumoconiosis causes 
further deterioration of a totally disabling (non-occupationally 
related) pulmonary or respiratory impairment. Although the effect is 
cumulative or additive, the pneumoconiosis nevertheless further 
diminishes the miner's already-compromised lung function. The 
Department stresses that this causation standard does not require an 
award of benefits simply because the miner has pneumoconiosis and the 
pneumoconiosis adversely affects his or her pulmonary condition. No 
award is permitted if there is not also present a totally disabling 
respiratory or pulmonary impairment. In such a case, the miner is 
entitled to benefits because (s)he is totally disabled and 
pneumoconiosis is a part of the overall disabling condition.
    (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 Secs. 718.302-718.306 are all derived from 
the BLBA. See 30 U.S.C. 921(c)(1) [implemented by Sec. 718.302]; 
921(c)(2) [implemented by Sec. 718.303]; 921(c)(3) [implemented by 
Sec. 718.304]; 921(c)(4) [implemented by Sec. 718.305]; 921(c)(5) 
[implemented by Sec. 718.306]. The regulatory presumptions are 
therefore authorized by the statute itself. The Supreme Court has 
upheld the constitutionality of 30 U.S.C. 921(c)(1)-(4) in Usery v. 
Turner Elkhorn Mining Co., 428 U.S. 1, 22-31 (1976). In the 1981 
amendments to the BLBA, Congress limited the applicability of 30 U.S.C. 
921(c)(2) and (4) to claims filed before January 1, 1982, and 921(c)(5) 
to claims filed before June 30, 1982. Consequently, three of the 
statutory presumptions have little effect on the adjudication of black 
lung claims at this time. The Department also does not accept the 
commenter's premise that allegedly widespread cigarette smoking among 
miners has effectively destroyed the basis for the presumptions. If any 
individual miner's smoking is proven the sole cause of his or her 
disability, death or disease, the party opposing entitlement has 
rebutted the presumption (except with respect to Sec. 718.304, which is 
irrebuttable). The presumption itself is not invalid if the presumed 
fact is disproved; rather, the evidence simply establishes that the 
presumed facts are not true in the particular case. Accordingly, the 
Department rejects the commenter's view that the incidence of smoking 
among miners necessarily causes constitutional infirmities in the 
regulatory presumptions.
    (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.

[[Page 79949]]

20 CFR 718.205

    (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 Sec. 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 Sec. 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 et seq. The commenters do not indicate in what 
manner these APA requirements have been violated. Assuming the 
commenters are asserting the Department improperly adopted the 
``hastening death'' standard in litigation rather than through 
rulemaking, the Department disagrees. The Department promulgated 20 CFR 
718.205 in 1983, after complying with the APA's notice and comment 
provisions, in response to the 1981 amendments to the BLBA. 48 FR 24272 
(May 31, 1983). Under those amendments, a deceased miner's survivor who 
filed a claim on or after January 1, 1982, is eligible for benefits 
only if the miner's death was due to pneumoconiosis. Based on the 
legislative history of the 1981 amendments, the Department provided 
that death will be considered ``due to pneumoconiosis'' where 
pneumoconiosis was at least ``a substantially contributing cause or 
factor.'' 20 CFR 718.205(c)(2) (1999). In later litigation, the 
Department set forth its interpretation of the regulatory phrase 
``substantially contributing cause or factor,'' and consistently 
maintained that this standard is met by evidence proving pneumoconiosis 
actually hastened the miner's death. The ``hastening death'' standard 
gives practical meaning to the phrase ``substantially contributing 
cause.'' See Bradberry v. Director, OWCP, 117 F.3d 1361, 1365-66 (11 
Cir. 1997) and cases cited therein. The Department is the administrator 
of the BLBA and, in that role, has the authority to interpret its own 
regulations. Indeed, because the Department's interpretation is 
reasonable and consistent with the regulatory language, every court of 
appeals to have considered the question has deferred to the 
Department's interpretation. Bradberry, 117 F.3d 1361, 1366-67; 
Northern Coal Co. v. Director, OWCP, 100 F.3d 871, 874 (10th Cir. 
1996); Brown v. Rock Creek Mining Co., 996 F.2d 812, 816 (6th Cir. 
1993); Peabody Coal Co. v. Director, OWCP, 972 F.2d 178, 183 (7th Cir. 
1992); Shuff v. Cedar Creek Coal Co., 967 F.2d 977, 980 (4th Cir. 
1992), cert. den. 506 U.S. 1050 (1993); Lukosevicz v. Director, OWCP, 
888 F.3d 1001, 1006 (3d Cir. 1989). Accordingly, the ``hastening 
death'' standard is a permissible interpretation of Sec. 718.205(c)(2), 
which was promulgated after public notice and comment in accordance 
with the APA.
    (e) Two comments contend the Department cannot apply 
Sec. 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 Bowen v. Georgetown University Hospital, 488 U.S. 
204, 208 (1988), which limits the retroactive applicability of agency 
regulations unless Congress has expressly authorized such regulations. 
Although the Black Lung Benefits Act (BLBA) does not contain the 
express statutory authority required by Bowen, the Department concluded 
many of the proposed regulations could nevertheless apply to pending 
claims. These regulations, or revisions to regulations, principally 
clarify the Department's interpretation of the BLBA and the current 
program regulations. Revised regulations which could significantly 
change the regulated community's existing obligations and expectations, 
however, apply only prospectively to claims filed after the effective 
date of the final regulations. The Department reiterated this position 
in the second notice of proposed rulemaking. 64 FR 54981-82 (Oct. 8, 
1999). It rejected recommendations to make all of the revisions either 
fully retroactive or entirely prospective. The Department adhered to 
its earlier explanation in the initial notice of proposed rulemaking: 
some regulations could apply to pending claims because they codify 
existing agency interpretations of the BLBA and regulations, while 
other regulations must be limited to prospective application because 
they involve significant changes to the existing program which could 
disrupt the parties' interests. The Department therefore declined to 
adopt a single approach for all of the revisions. Finally, the 
Department rejected arguments against retroactive

[[Page 79950]]

rulemaking premised on the Contract Clause of the United States 
Constitution, art. I, Sec. 10, cl. 1, and the impairment of contracts. 
64 FR 54981-82 (Oct. 8, 1999). (ii) The most recent comments do not 
cite any legal authority contradicting the Department's extensive 
analysis of the retroactivity issues in the initial and second notices 
of proposed rulemaking. In any event, the Department's analysis remains 
valid. An agency regulation does not run afoul of Bowen simply because 
it may operate retroactively. ``So long as a change in a regulation 
does not announce a new rule, but rather merely clarifies or codifies 
an existing policy, that regulation can apply retroactively. A rule 
clarifying an unsettled or confusing area of the law `does not change 
the law, but restates what the law according to the agency is and has 
always been' * * * [.]'' Orr v. Hawk, 156 F.3d 651, 654 (6th Cir. 
1998), reh'g en banc den., 172 F.3d 411 (6th Cir. 1999), quoting Pope 
v. Shalala, 998 F.2d 473, 483 (7th Cir. 1993). See also First National 
Bank of Chicago v. Standard Bank & Trust, 172 F.3d 472, 478 (7th Cir. 
1999) (noting Bowen's ban on retroactivity is inapplicable if rule is 
clarification rather than legislative change); compare National Mining 
Assoc. v. U.S. Dept. of Interior, 177 F.3d 1, 8 (D.C. Cir. 1999) 
(agency rule interpreting statute to impose liability for pre-rule acts 
gives retroactive effect which Bowen prohibits absent express statutory 
authority). As the Department explained in both the initial and second 
notices of proposed rulemaking, Sec. 718.205(c)(5) simply codifies the 
Department's longstanding interpretation of the legal standard for 
proving a miner's pneumoconiosis was a ``substantially contributing 
cause'' of his or her death under the BLBA and part 718 regulations. 62 
FR 3345-46 (Jan. 22, 1997); 64 FR 54980 (Oct. 8, 1999). Six circuit 
courts have adopted this interpretation while no court has disagreed. 
Bradberry v. Director, OWCP, 117 F.3d 1361, 1365-66 (11th Cir. 1997); 
Northern Coal Co. v. Director, OWCP, 100 F.3d 871, 874 (10th Cir. 
1996); Brown v. Rock Creek Mining Co., 996 F.2d 812, 816 (6th Cir. 
1993); Peabody Coal Co. v. Director, OWCP, 972 F.2d 178, 183 (7th Cir. 
1992); Shuff v. Cedar Creek Coal Co., 967 F.2d 977, 980 (4th Cir. 
1992), cert. den. 506 U.S. 1050 (1993); Lukosevicz v. Director, OWCP, 
888 F.2d 1001, 1006 (3d Cir. 1989); but see Tackett v. Armco, Inc., 16 
Black Lung Rep. 1-88, 1-93 (1992), vacated on remand 17 Black Lung Rep. 
1-103, 1-104 (1993) (rejecting ``hastening death'' standard, but 
vacating opinion on remand in light of controlling decision in Shuff). 
Section 718.205(c)(5) therefore represents a clarifying regulation 
which the Department may validly implement with retroactive effect for 
claims pending on the date the regulation becomes effective. (iii) 
Based on the foregoing analysis, the Department also rejects one 
commenter's position that the BLBA requires a ``direct cause and effect 
relationship'' between the miner's pneumoconiosis and death in order 
for a survivor to be entitled to benefits, at least insofar as the 
commenter would require that pneumoconiosis be the immediate, sole and 
proximate cause of the miner's death. Pneumoconiosis may be the direct, 
or proximate, cause of a miner's death (Sec. 718.205(c)(1)), but 
entitlement may also be premised on the lesser ``hastening death'' 
standard (Sec. 718.205(c)(2), (5)). The circuit court precedents cited 
above have unanimously upheld this interpretation. In both cases, a 
``direct'' effect links the pneumoconiosis to the miner's death, i.e., 
either as the leading, or contributing, cause of the miner's death. The 
Department's interpretation reflects Congressional intent that benefits 
be awarded if the survivor establishes that pneumoconiosis was a 
contributing cause of the miner's death, although not the sole and 
immediate cause. See 45 FR 13690 (Feb. 29, 1980); 48 FR 24276-78 (May 
31, 1983).
    (f) The Department received written comments and expert hearing 
testimony from physicians on the role pneumoconiosis may play in a 
miner's death. (i) Expert Comments. Drs. Ben V. Branscomb, 
Distinguished Professor Emeritus, University of Alabama (Birmingham), 
and William C. Bailey, Professor of Medicine and Eminent Scholar, Chair 
in Pulmonary Disease, University of Alabama (Birmingham), (Rulemaking 
Record Ex. 5-174, Appendix 8), comment that the medical literature does 
not substantiate any hastening effect of simple pneumoconiosis on the 
timing of a miner's death. They do acknowledge that severe complicated 
pneumoconiosis could have an additive effect in some instances, but 
only by reducing the miner's lifespan marginally. The physicians 
conclude that pneumoconiosis usually does not affect a miner's death 
from non-lung disease conditions, nor does mild or moderate stable 
pulmonary insufficiency affect other diseases leading to death. At the 
Department's Washington, D.C., public hearing, Dr. Branscomb also 
observed that simple pneumoconiosis has no effect on the common causes 
of death, and does not otherwise influence the course of a miner's 
death. Rulemaking Record (Ex. 35), Transcript, Hearing on Proposed 
Changes to the Black Lung Program Regulations (July 22, 1997), pp 47-
48. At the same hearings, Dr. Robert Cohen, Chief, Division of 
Pulmonary Medicine, Cook County (IL) Hospital, generally described the 
means by which impairment of lung function from pneumoconiosis could 
weaken the body's defenses to infections and increase susceptibility to 
other disease processes. Rulemaking Record (Ex. 35), Transcript (July 
23, 1997), pp 421-23. Dr. Gregory J. Fino, board-certified in Internal 
Medicine and in the subspecialty of Pulmonary Disease, (Rulemaking 
Record, Ex. 89-37, Appendix C), notes several studies which have shown 
that complicated pneumoconiosis is a cause of death, while other 
studies provide less authoritative evidence that simple pneumoconiosis 
may be a cause of death. This physician concludes that pneumoconiosis 
may be implicated in a miner's death provided the death is respiratory-
related and the pneumoconiosis has caused respiratory dysfunction 
during the miner's life. With respect to non-respiratory deaths, Dr. 
Fino states that the medical literature does not document any 
contributory relationship between death and pneumoconiosis. (ii) 
Scientific literature. One of the principal scientific documents cited 
by the Department in both the initial and second notices of proposed 
rulemaking is the National Institute of Occupational Safety and 
Health's (NIOSH) Criteria for a Recommended Standard, Occupational 
Exposure to Respirable Coal Mine Dust (1995) (Criteria). 62 FR 3343 
(Jan. 22, 1997); 64 FR 54978-79 (Oct. 8, 1999); Rulemaking Record, 
Exhibit 2-1. NIOSH cited studies from the United States and the United 
Kingdom which documented increases in mortality among miners from lung 
diseases related to respirable dust. Criteria, Sec. 4.2.5.1, Rulemaking 
Record, Exhibit 2-1 at 63-64, citing Miller BG, Jacobsen M, ``Dust 
exposure, pneumoconiosis, and mortality of coal miners,'' Br J Ind Med 
42:723-733 (1985), and Keumpel ED, et al., ``An exposure-response 
analysis of mortality among U.S. miners,'' Am J Ind Med 28(2):167-184 
(1995). Miller and Jacobson noted ``significant'' increases in 
mortality among U.K. miners with radiographic evidence of progressive 
massive fibrosis, and ``slightly decreased'' survival rates among 
miners with radiographic evidence of simple pneumoconiosis compared to 
miners without pneumoconiosis. Kuempel et

[[Page 79951]]

al. found increases in pneumoconiosis mortality among U.S. miners with 
progressive massive fibrosis, simple pneumoconiosis and exposure to 
dust of higher-rank coals. Based on these studies, NIOSH concluded: 
``[M]iners with working lifetime exposures to respirable coal mine dust 
at a mean concentration of 2 mg/m3 have an increased risk of 
dying from pneumoconiosis, chronic bronchitis, or emphysema.'' 
Criteria, Sec. 4.2.5.1, Rulemaking Record, Exhibit 2-1 at 64. In the 
second notice of proposed rulemaking, the Department referenced another 
study which NIOSH had cited to the Department, Coggon D, et al., ``Coal 
mining and chronic obstructive pulmonary disease: a review of the 
evidence,'' Thorax 53:398-407 (1998); see also 64 FR 54979 (Oct. 8. 
1999). The authors reviewed studies on mortality in coal miners and 
reported that mortality attributed to chronic obstructive pulmonary 
disease was higher in miners than the general population. Among the 
studies submitted by one commenter is Green FHY, Vallyathan V, ``Coal 
Workers' Pneumoconiosis and Pneumoconiosis Due to Other Carbonaceous 
Dusts,'' in Chung A, Green FHY, eds., Pathology of Occupational Lung 
Disease (2d ed. 1998) 129; see also Rulemaking Record, Exhibit 89-21, 
attachment 2. Green and Vallyathan state that ``[a]pproximately 4% of 
coal miner deaths are directly attributable to pneumoconiosis,'' but 
note that the ``excess mortality rate from pneumoconiosis'' is 
primarily attributable to progressive massive fibrosis. (p. 137). The 
authors further note, however, that ``[d]eath from pneumoconiosis, 
chronic bronchitis, and emphysema has been related to cumulative dust 
exposure,'' citing Miller and Jacobson, and Kuempel et al. In contrast, 
Parker and Banks conclude, ``a series of mortality reports have not 
convincingly shown that simple [coal workers' pneumoconiosis] is 
associated with premature mortality, but that [progressive massive 
fibrosis] adversely affects survival * * *.'' Parker, Banks, ``Lung 
diseases in coal workers,'' Occupational Lung Disease (1998); see also 
Rulemaking Record, Exhibit 89-21, attachment 3. Parker and Banks also 
cite the results of the study by Kuempel et al. See also Morgan WKC, 
``Dust, Disability, and Death,'' Am Rev Resp Dis 134:639, 641 (1986); 
Rulemaking Record, Exhibit 89-21, attachment 8 (concluding more 
emphasis should be placed on reducing cigarette smoking among miners 
than dust levels in mines to reduce mortality). (iii) By incorporating 
the ``hastening death'' standard into the regulation, the Department is 
clarifying the applicable statutory standard: a survivor is entitled to 
benefits if the miner's death was due to pneumoconiosis. This standard, 
in the Department's view as well as in the unanimous view of the 
circuit courts of appeals that have considered it, accords with 
Congress' intent to compensate survivors of miners whose deaths were in 
some way related to pneumoconiosis, as that term is broadly defined by 
the statute. The Department emphasizes, however, that the survivor must 
establish that the miner's death was hastened by pneumoconiosis in each 
case. The Rulemaking Record, including the variety of expert medical 
comments, studies and opinions on the potential contributory role of 
pneumoconiosis in the deaths of coal miners, does not demonstrate the 
necessity to depart from the hastening death legal standard. These 
views appear relatively consistent in stating that complicated 
pneumoconiosis (also called progressive massive fibrosis) may 
contribute to a miner's death given the severity of the disease. While 
opinions differ as to the possibility that simple pneumoconiosis can 
adversely affect the mortality process, the Department is persuaded by 
NIOSH's conclusion that the mortality studies it reviewed substantiate 
an increased risk of death from respiratory diseases which may be 
encompassed within the BLBA's definition of ``pneumoconiosis.'' NIOSH 
is the government agency charged with conducting research into 
occupationally-related health problems. In that capacity, the 
Department has previously consulted with NIOSH concerning issues 
related to the proposed definition of pneumoconiosis in Sec. 718.201. 
64 FR 54978-79 (Oct. 8, 1999); see also 30 U.S.C. 902(f)(1)(D) 
(Department to consult with NIOSH on criteria for tests which establish 
total disability in miners). The Department therefore considers NIOSH's 
view particularly significant in evaluating the conflicting medical 
opinions concerning the ``hastening death'' standard, especially since 
its views are consistent with other studies submitted into the record. 
To the extent the commenters express the view that simple 
pneumoconiosis can never cause death, such views are inconsistent with 
the BLBA. The statute contemplates an award of benefits based upon 
proof of pneumoconiosis as defined in the statute (which encompasses 
simple pneumoconiosis), and not just upon proof of complicated 
pneumoconiosis. See, e.g., Penn Allegheny Coal Co. v. Mercatell, 878 
F.2d 106, 109-110 (3d Cir. 1989); Wetherill v. Director, OWCP, 812 F.2d 
376, 382 (7th Cir. 1987). Similarly, regarding the connection between 
simple pneumoconiosis and non-respiratory deaths in particular, the 
comments from Drs. Bailey and Branscomb, along with those of Dr. Fino, 
focus on clinical pneumoconiosis as opposed to pneumoconiosis as more 
broadly defined by the statute; thus, they do not address whether, for 
instance, chronic obstructive pulmonary disease induced by coal mine 
dust exposure can, in certain circumstances, contribute to a non-
respiratory death. Moreover, while Drs. Bailey and Branscomb indicate 
that a causal nexus between pneumoconiosis and a non-respiratory death 
would be unusual, they do not rule it out as a medical possibility. Dr. 
Cohen explained how such a cause and effect relationship could occur. 
Even though non-respiratory deaths hastened by pneumoconiosis may occur 
relatively infrequently, the survivor should nevertheless be given the 
opportunity to prove that pneumoconiosis had a tangible impact on the 
miner's death in those instances. Thus, the Department believes the 
``hastening death'' standard sets a reasonable benchmark for proving, 
in any particular case, that pneumoconiosis contributed to the miner's 
death. Of course, the burden of persuasion remains with the survivor to 
prove that the miner's death was due to pneumoconiosis.
    (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.

Subpart D

20 CFR 718.301

    (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 Sec. 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 Secs. 718.301 and 
725.493(b). The Department proposed no additional changes to this 
regulation in the second notice of

[[Page 79952]]

proposed rulemaking. 64 FR 54971 (Oct. 8, 1999).
    (b) No comments were received concerning this section, and no other 
changes have been made in it.

20 CFR 718.307

    (a) In the initial notice of proposed rulemaking, the Department 
proposed moving the content of Sec. 718.307(a) to Sec. 725.103 to 
establish a regulation of general applicability concerning burdens of 
proof. 62 FR 3346 (Jan. 22, 1997). The Department also proposed 
deleting Sec. 718.307(b) because it duplicated proposed Sec. 725.103. 
The Department did not discuss Sec. 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.

20 CFR 718.401

    (a) The Department proposed deleting 20 CFR 718.401 (1999) in the 
initial notice of proposed rulemaking because the provision duplicated 
material in proposed Secs. 725.405 and 725.406. Former Sec. 718.401 
addressed each miner's statutory right to a complete pulmonary 
evaluation at no expense to the miner, a right outlined in proposed 
Sec. 725.406. See 30 U.S.C. 923(b). Former Sec. 718.401 also addressed 
the development of additional medical evidence necessary for the 
adjudication of a claim, subject matter that has been relocated to 
proposed Sec. 725.405. Since both proposed Sec. 725.405 and 
Sec. 725.406 are regulations with program-wide applicability, the 
Department noted that no comparable regulation was necessary in part 
718. 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.

20 CFR 718.402

    (a) The Department proposed deleting 20 CFR 718.402 (1999) in the 
initial notice of proposed rulemaking because its content duplicated 
provisions of proposed Sec. 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.

20 CFR 718.403

    (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 Sec. 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.

20 CFR 718.404

    (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 Sec. 725.203(c) and (d). Former Sec. 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.

Appendix B to Part 718

    (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. See Appendix 
B(2)(ii)(G), of part 718. One comment urges the Department to raise the 
acceptable percentage of variability from 5 percent to 10 percent. A 
second comment states the 5 percent variation is too specific. This 
commenter recommends the physician reporting the study be allowed to 
use his judgment as to whether the test is acceptable. The third 
comment, submitted by the National Institute of Occupational Safety and 
Health (NIOSH), does not identify a specific percentage of increased 
acceptable variability, but recommends the Department include a 
provision permitting consideration of pulmonary function studies which 
exceed the 5 percent limit provided the failure of the test to comply 
with the standard is noted in the report. The Department agrees with 
the suggested revision recommended by NIOSH, and has amended Appendix 
B(2)(ii)(G) to adopt that suggestion with one addition. The Department 
has added the phrase ``by the physician conducting or reviewing the 
test.'' This language will ensure that a physician certifies the 
results of the pulmonary function test while recognizing that it does 
not meet the 5 percent variability requirement. The amended language 
will provide the adjudicator with greater flexibility in determining 
whether the pulmonary

[[Page 79953]]

function study actually substantiates the presence of a significant 
pulmonary impairment, despite the lack of reproducible spirometric 
curves within the 5 percent range.
    (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.

Appendix C to Part 718

    (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 Sec. 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 Sec. 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.

20 CFR Part 722--Criteria for Determining Whether State Workers' 
Compensation Laws Provide Adequate Coverage for Pneumoconiosis and 
Listing of Approved State Laws

20 CFR Part 722

    (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. See list of 
Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 8, 
1999).
    (b) The Department has replaced a comma in the second sentence of 
Sec. 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.

20 CFR Part 725--Claims for Benefits Under Part C of Title IV of 
the Federal Mine Safety and Health Act, As Amended

Subpart A

20 CFR 725.1

    (a) In its first notice of proposed rulemaking, the Department 
proposed adding subsection (k) to Sec. 725.1 to

[[Page 79954]]

describe the incorporation into the Black Lung Benefits Act of a number 
of provisions of the Social Security Act. In addition, the new 
subsection noted the Department's authority to vary the application of 
the incorporated provisions. 62 FR 3347 (Jan. 22, 1997). The Department 
did not discuss section 725.1 in its second notice of proposed 
rulemaking, see list of Changes in the Department's Second Proposal, 64 
FR 54971 (Oct. 8, 1999).
    (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. See 30 U.S.C. Sec. 932(a). Subsection (k) fulfills the same 
objective by acknowledging that there are also SSA provisions 
incorporated into the BLBA. Most of those provisions were incorporated 
into Part B of the BLBA, governing the adjudication of claims filed 
with the Social Security Administration prior to July 1, 1973, when 
Congress amended the BLBA in 1972 and 1977. See, e.g., 30 U.S.C. 
922(a)(5)(1)(B), incorporating the SSA definition of the term 
``disability.'' These provisions are also incorporated into Part C, 
governing the adjudication of claims filed with the Labor Department, 
by 30 U.S.C. 940, but only ``to the extent appropriate.'' Subsection 
(k) recognizes the Department's authority to determine the extent to 
which the use of these incorporated provisions is appropriate. 
Furthermore, subsection (k) is consistent with subsection (j) because 
it notes that the Department may resolve conflicts which arise from the 
incorporation of inconsistent provisions of the two statutes. Thus, for 
example, the Department may choose to depart from an incorporated LHWCA 
provision (subsection (j)) because it has determined that a comparable 
but inconsistent SSA provision, which is also incorporated, better 
serves the interests of the program.
    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. See 
20 CFR 725.536 (1999). The Department has added an additional sentence 
to the end of subsection (k) to describe this incorporation. In 
addition, the Department has revised the first sentence of subsection 
(k) to recognize that section 402 of the BLBA is contained in Part A. 
The Department has also revised the fourth and seventh sentences of 
subsection (k) to clarify their meaning.
    (c) No other comments were received concerning this section, and no 
other changes have been made in it.

20 CFR 725.2

    (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, i.e., only to claims filed after the 
effective date of the revised regulations. The Department drew a 
distinction between revisions that merely clarified the Department's 
interpretation of the statute and existing regulations or were 
procedural regulations, and those that altered the obligations and 
expectations of the parties or could not easily be applied to pending 
claims. 62 FR 3347-48 (Jan. 22, 1997). The Department also explained 
the legal basis for its decision to apply certain regulations 
retroactively. In its second notice of proposed rulemaking, the 
Department added a regulation, Sec. 725.351, to the list of revised 
regulations which would apply only prospectively. 64 FR 54981-82 (Oct. 
8, 1999). In addition, the Department answered several comments, 
reiterating its belief that it lacked the statutory authority to make 
the final rule applicable, in its entirety, to all pending claims and 
rejecting the argument that the Department lacked the authority to 
apply any of the regulations to pending claims.
    (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. See 64 FR 54987 (Oct. 8, 1999) 
(discussing the Fourth Circuit's decision in Clinchfield Coal Co. v. 
Harris, 149 F.3d 407 (4th Cir. 1998)). In addition, because section 
725.367 may increase the amount of attorneys' fees an operator has to 
pay in a contested case, it may influence the operator's decision to 
controvert the claimant's entitlement to benefits. In these 
circumstances, the Department agrees that the revised version of 
Sec. 725.367 should not be applied to claims filed before the effective 
date of the Department's rulemaking. The Department also inadvertently 
omitted Secs. 725.409, which governs denials of a claim by reason of 
abandonment, 725.416, which governs informal conference proceedings, 
and 725.458, which governs deposition testimony, from the list of 
revised regulations that should be applied prospectively only.
    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 Sec. 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, 
Sec. 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

[[Page 79955]]

his benefits (Secs. 725.407-725.408, 725.415, 725.418, 725.491-
725.495). The Department has also revised Sec. 725.421(b), which 
governs the referral of a claim to the Office of Administrative Law 
Judges and the evidence to be transmitted to that Office for admission 
into the record at the hearing. The revisions to Sec. 725.421(b) 
reflect the new rules governing the identification, notification and 
adjudication of the responsible operator. Because the revisions of 
those rules are prospective only, the revised version of sections 
725.421(b) and 725.465 should be treated similarly. The Department has 
amended subsection (c) to add Secs. 725.367, 725.409, 725.416, 
725.421(b), 725.458, and 725.465 to the list of regulations which may 
be applied only prospectively.
    (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 Bowen v. Georgetown 
University Hospital, 488 U.S. 204 (1988) and Eastern Enterprises v. 
Apfel, 524 U.S. 498 (1998). In Bowen, the Supreme Court held that, 
absent an explicit statutory grant of authority, administrative 
agencies could not promulgate retroactive rules. In its first notice of 
proposed rulemaking, the Department acknowledged that the Black Lung 
Benefits Act did not give the Department authority to promulgate 
regulations with a retroactive effect. 62 FR 3347 (Jan. 22, 1997). 
Eastern Enterprises did not involve the regulatory authority of 
administrative agencies; in that case, a majority of the Court held the 
Congress had violated the due process clause of the Fifth Amendment to 
the Constitution by improperly imposing retroactive burdens on coal 
mine operators in enacting certain provisions of the Coal Industry 
Retiree Health Benefit Act. For purposes of analyzing the Department's 
regulations, Bowen is the more restrictive decision. Because Congress 
did not grant the Department specific authority to engage in 
retroactive rulemaking under the Black Lung Benefits Act, the 
regulations will be permissible under Bowen only if they do not have a 
true retroactive effect. Eastern Enterprises, a case in which the 
retroactive effect of the legislation was clear, is inapposite to this 
analysis.
    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 Pope v. Shalala, 998F.2d 473 (7th Cir. 1993), 
overruled on other grounds, Johnson v. Apfel, 189 F.3d 561, 563 (7th 
Cir. 1999), for the proposition that an agency's rules of 
clarification, in contrast to its rules of substantive law, may be 
given retroactive effect. The Sixth Circuit issued a similar holding in 
Orr v. Hawk, 156 F.3d 651, 654 (1994).
    Underlying both the Pope and Orr decisions is the Supreme Court's 
opinion in Manhattan General Equipment Co. v. Commissioner, 297 U.S. 
129 (1936). Both the Sixth and Seventh Circuits quote Manhattan General 
for the proposition that a rule clarifying an unsettled or confusing 
area of law ``is no more retroactive in its operation than is a 
judicial determination construing and applying a statute to a case in 
hand.'' 297 U.S. at 135, quoted at 998 F.2d at 483; 156 F.3d at 653. 
Both courts thus recognized that the Supreme Court's decision in Bowen, 
which was issued in 1988, did not overrule its 1936 decision in 
Manhattan General with respect to what constitutes a retroactive rule. 
See First National Bank of Chicago v. Standard Bank & Trust, 172 F.3d 
472, 478 (7th Cir. 1999) (stating that if the regulation at issue ``was 
merely a clarification, rather than a legislative change, Bowen's ban 
on retroactivity is inapplicable'').
    The Department's rulemaking includes a number of such 
clarifications. For example, the revised versions of Secs. 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. See preamble to Secs. 718.201 (citing cases 
recognizing an obstructive component to pneumoconiosis); 725.309 
(citing cases recognizing the progressive nature of pneumoconiosis); 
718.204; and 718.205. Moreover, none of the appellate decisions with 
respect to these regulations represents a change from prior 
administrative practice. Thus, a party litigating a case in which the 
court applied such an interpretation would not be entitled to have the 
case remanded to allow that party an opportunity to develop additional 
evidence. See Betty B Coal Co. v. Director, OWCP, 194 F.3d 491, 501 
(4th Cir. 1999) (``* * * we are reluctant to compel reopening as a 
matter of constitutional law any time debatable questions of law are 
resolved by the BRB or the courts. When such open questions are 
answered, the law has been declared, not changed.''). Any party to 
litigation must assume the risk that a law or regulation will be 
interpreted in a manner other than that which it had hoped. The 
Department's embodiment of those decisions in regulatory form should 
not insulate the parties from their application to pending claims.
    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 Secs. 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 Pope and Orr recognize, Bowen 
does not prohibit the Department from promulgating regulations to 
codify its position with respect to these issues. Finally, the 
Department has responded to the contention that retroactive liability 
is imposed by Sec. 726.8 in the preamble to Sec. 726.8.
    The same commenter has also argued that Secs. 725.542-.544, 
725.547, and 725.548 should not be retroactively applied to coal mine 
operators. Section 725.2, however, explicitly makes Sec. 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, Sec. 725.548 represents a renaming 
and renumbering of a part of the former regulation at Sec. 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.

[[Page 79956]]

    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, see 64 FR 54987 
(Oct. 8, 1999) (discussing the Fourth Circuit's decision in Clinchfield 
Coal Co. v. Harris, 149 F.3d 407 (4th Cir. 1998)), the Department has 
made the change prospective only. Similarly, the revised procedures 
governing the processing and adjudication of claims, sections 725.351, 
725.406 through 725.418, 725.423, 725.454 through 725.459, and 725.465, 
the regulations governing the identity of the responsible operator 
liable for the payment of benefits, sections 725.491 through 725.495, 
and the revised regulation governing operator overpayments, section 
725.547, are expressly limited in their applicability to newly filed 
claims. In addition, the revisions of sections 725.309 and 725.310, 
governing additional claims and modification, respectively, are 
prospective only. The Department has thus taken considerable care to 
ensure that its revisions do not violate the Supreme Court's general 
prohibition against retroactive regulations.
    (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.

48 FR 24283 (May 31, 1983). Similarly, the Department has always 
required that a subsequent claim be adjudicated according to the 
standards in effect at the time the new application is filed. For 
example, a miner whose 1977 claim was adjudicated and denied under the 
interim presumption, 20 CFR Sec. 727.203 (1999), is not entitled to 
have a 1987 claim adjudicated under the same criteria. Instead, that 
claim must be adjudicated under the more restrictive Part 718 criteria. 
See Peabody Coal Co. v. Spese, 117 F.3d 1001, 1007 (7th Cir. 1997). The 
Department does not believe that it should alter its consistent 
treatment of subsequent claims in order to exclude those claims from 
consideration under the Department's revised regulations.
    (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. Sec. 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 Sec. 725.310 (1999). In fact, even a new 
claim filed during the one-year period will serve to reopen the 
existing claim. See Betty B Coal Co. v. Director, OWCP, 194 F3d 491, 
497 (4th Cir. 1999). Consequently, an employer has no expectation that 
a denied claim has been fully and completely resolved until after the 
one-year period has passed.
    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 
(i.e., before the district directors, the Office of Administrative Law 
Judges, the Benefits Review Board, or the federal courts). In addition, 
some claims that have been finally denied prior to the effective date 
of the revisions can be revived by a subsequent request for 
modification. For example, a claim may have been finally denied three 
months before the rules became effective, and the claimant may file a 
request for modification nine months later (or six months after the 
revised regulations took effect). The Department does not intend that 
the revised regulations that are prospective only (including, for 
example, the limitation on evidence) be used to adjudicate such a 
claim, and has drafted the definition of a ``pending claim'' to ensure 
that result.

20 CFR 725.4

    (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 Federal Register or the most recent version of the 
Code of Federal Regulations containing the rules. The Department did 
not discuss Sec. 725.4 in its second notice of proposed rulemaking. See 
list of Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 
8, 1999).
    (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.

20 CFR 725.101

    (a)(i) The Department proposed amending the definition of 
``benefits'' (Sec. 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); Sec. 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 (Sec. 725.520(c)). 64 FR 
55023 (Oct. 8, 1999). The Department intended this change for the 
convenience of parties looking for a comprehensive

[[Page 79957]]

definition. 64 FR 54982 (Oct. 8, 1999). (ii) Citing the Department's 
representations concerning the exclusion of the complete pulmonary 
examination from costs recoverable from the claimant, two comments now 
support the amended definition. (iii) One comment opposes the change 
because it shifts the cost of the examination to the responsible 
operator if the claim is approved. The Department responded to this 
argument in the second notice of proposed rulemaking by noting its 
disagreement; since 1978, the regulations (20 CFR 725.406(c)) have 
required the operator found liable for the claimant's benefits to 
reimburse the Fund for the expenses associated with the initial 
pulmonary examination. 64 FR 54982 (Oct. 8, 1999). The present comment 
states the Department does not have the authority to shift the cost of 
the examination, citing West Virginia University Hospitals, Inc. v. 
Casey, 499 U.S. 83 (1991). At issue in Casey was the authority of a 
federal court to shift liability from one party to its opponent for the 
fees of experts retained to perform nontestimonial services. The 
Supreme Court held the fee shifting must be limited to the specific 
categories of expenses enumerated in the statute which authorized the 
trial court to award fees. Because nontestimonial expert services did 
not come within the ambit of any statutory category of reimbursable 
expenses, the Court held the district court could not reallocate fee 
liability. In so holding, the Court rejected the argument that such 
expenses could be considered part of an ``attorney's fee,'' liability 
for which did shift.
    The Department considers Casey inapposite to the redefinition of 
``benefits.'' That decision establishes only that fees for 
nontestimonial expert services cannot be considered ``attorney fees'' 
for purposes of a statute which shifts attorney fee liability to a 
prevailing party's opponent. Casey does not preclude the Department 
from defining a particular nontestimonial expert service--the 
Sec. 725.406 medical examination--as a ``benefit,'' liability for which 
does shift to the responsible operator if the claim is ultimately 
approved. (iv) The Department has the statutory authority to define 
``benefits'' to include the cost of the initial medical examination, 
and to require a responsible operator to pay for the examination in the 
event the claim is ultimately approved. The Black Lung Benefits Act 
(BLBA) incorporates section 7 of the Longshore and Harbor Workers' 
Compensation Act (LHWCA). 33 U.S.C 907, as incorporated by 30 U.S.C 
932(a). Section 7(e) provides:

    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 * * *.

33 U.S.C. 907(e). Each miner's claim filed under the Black Lung 
Benefits Act (BLBA) raises ``medical questions'' because the status of 
the miner-claimant's pulmonary condition is the primary issue in every 
claim. Section 7(e) authorizes the Department to provide each miner-
claimant with a complete pulmonary examination, and therefore address 
the ``medical questions'' raised by the claim. Thus, Section 7(e) 
provides the Department with the method for fulfilling its obligation 
under 30 U.S.C. 923(b) to provide each miner with the opportunity to 
substantiate his claim by undergoing a complete pulmonary evaluation. 
Section 7(e) also authorizes the Department, at its discretion, to 
charge the cost of the examination to the responsible operator. The 
Department's regulations have recognized this statutory authority since 
1972, when section 7 was first incorporated into the BLBA, without 
regard to whether the claimant ultimately prevailed. 20 CFR 725.139, 37 
FR 25466 (Nov. 30, 1972) (deputy commissioner has discretion to assess 
the operator or its insurer for the cost of a physician's examination 
conducted to resolve medical questions raised); 725.133 (1978) (deputy 
commissioner has the authority to assess a notified operator or its 
insurer for the cost of the miner-claimant's initial medical 
examination). The Department promulgated its current regulation 
implementing section 7(e) for BLBA purposes (20 CFR 725.406(c)) in 1978 
after Congress amended section 413(b) to provide for complete pulmonary 
examinations. It requires the operator adjudged liable for the 
claimant's benefits to reimburse the Fund for the expenses associated 
with the examination. The Department has determined that such 
assessments are appropriate in those cases in which the award of 
benefits for which an individual operator is liable has become final. 
In the remaining cases, the Department believes the cost of the 
examinations should be absorbed by the coal mining industry as a whole 
by imposing the costs on the Trust Fund. 26 U.S.C. 9501(d)(1). As money 
payable under section 932(a), which incorporates section 7, the 
pulmonary examination cost is properly classified as a ``benefit'' and 
the liable operator must reimburse the Trust Fund for such cost under 
30 U.S.C. 934. The responsible operator is required to secure the 
payment of benefits for which it is liable under section 932. 30 U.S.C. 
933(a). The Department accordingly rejects the comment's position that 
it lacks the authority to define ``benefits'' to include the cost of 
the pulmonary examination required by 30 U.S.C. 923(b). (v) No other 
comments were received concerning this definition, and no changes were 
made in it.
    (b)(i) In the initial notice of proposed rulemaking, the Department 
proposed amending Sec. 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 Sec. 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, i.e., those at the coke-producing ovens. See, e.g., Sexton v. 
Mathews, 538 F.2d 88, 89 (4th Cir. 1975) (holding an individual who 
loaded coke ovens with coal, leveled the coal inside the oven, and 
shoveled finished coke for shipment, was not a ``coal miner'' under the 
BLBA). The Department, however, does not intend for the identity of the 
individual's employer as a coke manufacturer to be the determinative 
inquiry. In some cases, coke industry employees may be otherwise 
employed in activities which amount to custom coal preparation or come 
within the types of activities enumerated in Sec. 725.101(a)(13). Those 
workers should not be excluded from BLBA coverage solely because they 
are employed by a coke producer. See Hanna v. Director,

[[Page 79958]]

OWCP, 860 F.2d 88, 92 (3d Cir. 1988) (stating: ``[T]he appropriate 
characterization of [the claimant's] work for purposes of entitlement 
under the Act is determined by evaluation of what he did, and not by 
who employed him''). The plain language of the statutory and regulatory 
definitions of ``miner'' focuses on what work the individual performed 
and where (s)he performed that work, and not who employed the 
individual. With respect to ``Coal preparation,'' the Department has 
deleted the reference to coke oven workers because the phrase is 
redundant in view of the language in ``Miner.'' (ii) No other comments 
were received concerning these definitions. (iii) The Department has 
changed Sec. 725.101(a)(19) by substituting the words ``coal mine 
dust'' for ``coal dust.'' This change makes the regulation consistent 
with the Department's long-held position that the occupational dust 
exposure at issue under the BLBA is the total exposure arising from 
coal mining and not only exposure to coal dust itself. The Department 
previously explained this position in the second notice of proposed 
rulemaking. There the Department made the same change to 
Sec. 725.491(d). 64 FR 54998 (Oct. 8, 1999). A comment responding to 
the initial notice of proposed rulemaking, 62 FR 3409 (Jan. 22, 1997), 
had identified an inconsistency between the reference to ``coal mine 
dust'' in the definition of a ``miner'' (Sec. 725.202) and the 
reference to ``coal dust'' in Sec. 725.491. The Department agreed that 
a consistent reference to ``coal mine dust'' should be used throughout 
the regulations. ``Coal mine dust'' means any dust generated in the 
course of coal mining operations, including construction. The 
Department noted that this interpretation is consistent with 
Congressional intent to compensate for a broad array of dust-related 
lung diseases which can be linked to coal mining. 64 FR 54998 (Oct. 8, 
1999). Finally, by making the change in Sec. 725.101(a)(19), the 
Department expresses its disagreement with the result reached by the 
Tenth Circuit in Bridger Coal Co./Pac. Minerals, Inc. v. Director, OWCP 
[Harrop], 927 F.2d 1150 (10th Cir. 1991), which held that ``coal dust'' 
means only dust actually containing coal particulates. 927 F.2d at 
1154. In the Department's view, Harrop represents too narrow a reading 
of Congress' intent. See William Bros., Inc. v. Pate, 833 F.2d 261, 264 
(11th Cir. 1987); Williamson Shaft Contracting Co. v. Phillips, 794 
F.2d 865, 870 (3d Cir. 1986) (both cases agreeing with the Department 
that ``coal mine dust'' is a permissible interpretation of BLBA).
    (c) The Department proposed amending Sec. 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 Sec. 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. O'Brockta v. 
Eastern Associated Coal Co., 18 Black Lung Rep.1-72, 1-79/1-80 (1994), 
aff'd sub nom Director, OWCP v. Eastern Associated Coal Co., 54 F.3d 
141, 148-150 (3d Cir. 1995). 62 FR 3348-49 (Jan. 22, 1997). The 
Department received comments to its initial proposal opposing the 
change and, in the second notice of proposed rulemaking, explained that 
the Third Circuit had suggested the Department alter the regulation to 
reflect accurately the Department's intended meaning. 64 FR 54982-83 
(Oct. 8, 1999). (ii) Two new comments support the Department's change. 
(iii) One comment opposes the amended definition because it will 
adversely affect the Trust Fund financially by making certain state 
benefits unavailable for offset against corresponding federal benefits. 
The commenter notes the change will therefore indirectly affect the 
coal producers who finance the Fund. The comment, however, overlooks 
the fact that any adverse effect on operators is expected to be minimal 
because of the very small number of claims which would be affected by 
the exclusion of state-funded benefits. This effect is also spread 
across the entire industry since the industry as a whole pays the coal 
excise tax. Finally, using state benefits entirely funded by state 
general revenues to offset federal benefits would confer a windfall on 
responsible operators, at least in those few cases in which such state 
payments may be available concurrently with a period of federal 
entitlement. If such were the case, an individual operator would be 
able to offset its monthly federal benefits liability by an amount of 
money the state paid the claimant from its own general revenues. Thus, 
the operator would profit by using state benefits which it had not paid 
to reduce its federal liability. The proposed definition of ``workers' 
compensation law'' eliminates this windfall. (iv) One comment opposes 
the change because it codifies an alleged political agreement between 
the Department and one congressman, and favors only Pennsylvania 
residents. The commenter also states that the change will not affect 
pending or new claims from that state, but may have unintended 
consequences elsewhere. Neither point provides any basis for changing 
the Department's proposal, the purpose of which is to clarify long-
standing policy. With respect to the first point, the comment fails to 
consider the historical basis of the Department's policy and its 
grounding in the legislative history of the BLBA. Part B of the BLBA 
contains a ``maintenance of effort'' provision, 30 U.S.C. 924(d), which 
states that no federal benefits shall be paid to the resident of any 
State which reduces the resident's state worker's compensation benefits 
because of a federal award. Both Parts B and C also each require 
federal benefits to be reduced by the amount of any payments received 
by a claimant under a state workers' compensation program for 
disability caused by pneumoconiosis. 30 U.S.C. 922(b), 932(g). On the 
eve of the BLBA's enactment in 1969, the House Managers of the bill 
explained in the joint conference report: ``Benefit payments made under 
State programs funded by general revenues are not included in the 
maintenance of effort provision in the House amendment for the reason 
that they are not to be considered workmen's compensation, unemployment 
compensation, disability insurance programs as such programs are 
generally understood, and as they are intended to be understood within 
the context of this benefit program.'' H.R. Rep. No. 761, 91st Cong., 
1st Sess. (1969), reprinted in Senate Comm. on Labor and Public 
Welfare, Legislative History of the Federal Coal Mine Health and Safety 
Act of 1969, 1507, 1530 (1975). Congressman Dent of Pennsylvania

[[Page 79959]]

reinforced this understanding in his discussion of the offset 
provisions and which state benefits could be used to offset the federal 
benefits:

    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.

115 Cong. Rec. 39713 (1969). No contrary expression of understanding 
appears in the legislative history. Consequently, the Department fairly 
understood Congressional intent to exclude state-funded disability 
benefits being used to reduce federal benefits. The Third Circuit did 
not invalidate the Department's policy or contradict its understanding 
of Congressional intent; the Court merely held that the Department's 
regulation was inconsistent with its policy, and therefore the policy 
could not be sustained. As for the limited impact of proposed 
Sec. 725.101(a)(31) on Pennsylvania residents, the Department 
acknowledges that Pennsylvania enacted legislation in 1970 to suspend 
state benefits paid from general revenues if the claimant received a 
federal award. 77 P.S. 1401(k). Those benefits therefore become 
unavailable for offset against federal payments in any event. The 
possibility remains that Pennsylvania may change its law in the future. 
Because the O'Brockta decision raises doubt concerning the Department's 
interpretation of ``workers' compensation law,'' the Department 
believes the regulation should be clarified to implement Congressional 
intent to exclude state benefits funded by general revenues. Finally, 
the potential impact of the change on states other than Pennsylvania is 
speculative at best, but all states, like the public as a whole, are 
entitled to a clear statement of governmental policy. In the event any 
other State enacts legislation comparable to the Pennsylvania program 
in the future, the legislature will have a clear understanding of the 
Department's position on the meaning of ``workers' compensation law.'' 
(v) No other comments were received concerning this definition, and no 
changes were made in it.
    (f)(i) The Department initially proposed a uniform definition of 
``year'' (Sec. 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, e.g. vacation or sick leave. The 
Department proposed that, to the extent the evidence permitted, the 
beginning and ending dates of all periods of coal mine employment be 
ascertained. In the event the evidence was insufficient to establish 
such dates or if the miner's employment lasted less than a year, the 
Department proposed a formula for computing the length of coal mine 
employment based on the miner's annual earnings compared to average 
wage statistics for miners compiled by the Bureau of Labor Statistics 
(BLS). In response to a comment opposing the inclusion of approved 
absences from work in computing the length of coal mine employment, the 
Department cited judicial decisions upholding its position. 64 FR 54983 
(Oct. 8, 1999). In the second notice of proposed rulemaking, the 
Department altered the regulation to account for leap years by adding 
``366 days'' to the definition. 64 FR 55024 (Oct. 8, 1999). The 
Department now has amended the language of Sec. 725.101(a)(32) to 
clarify that periods of approved absences count only towards the 
miner's ``year'' of employment, and not to the actual 125 ``working 
days'' during which the miner must have worked and received pay as a 
miner. Thus, in order to have one year of coal mine employment, the 
regulation contemplates an employment relationship totaling 365 days, 
within which 125 days were spent working and being exposed to coal mine 
dust, as opposed to being on vacation or sick leave. (ii) In response 
to the second notice of proposed rulemaking, two comments support the 
new definition because it does not afford definitive weight to Social 
Security Administration records. The Department emphasized in its 
second notice of proposed rulemaking that Sec. 725.101(a)(32) does not 
place special weight on any particular type of evidence in determining 
how long an individual worked as a coal miner. 64 FR 54983 (Oct. 8, 
1999). Rather, Sec. 725.101(a)(32)(ii) recognizes that factual findings 
concerning a miner's work history should be based on all of the 
credible evidence available to the adjudicator. (iii) One comment 
opposes the proposed formula for computing a year because it may 
underestimate a miner's employment if the miner worked in a low-wage 
geographic area. The commenter urges crediting a Social Security 
earnings quarter of coverage as a calendar quarter of coal mine 
employment, particularly for periods of coal mine employment that 
occurred many years ago. Although this comment raises a legitimate 
concern, no change in the regulation is necessary. The proposed formula 
provides a default means of determining the length of time an 
individual worked as a coal miner. This method may be used when the 
beginning and ending dates of the miner's work cannot be ascertained 
from the existing evidence, or the miner worked less than a year as a 
miner. Moreover, the Department notes that the regulation allows a 
party to introduce any relevant evidence concerning the miner's 
employment. In any individual case, the miner may prove that the wages 
he received were below the industry average. (iv) One comment opposes 
the inclusion of non-work periods of employment when calculating a year 
of employment because the miner is not exposed to any occupational 
hazard during such periods. The Department disagrees, at least with 
respect to determining whether the miner worked a ``year.'' Judicial 
precedent has firmly established the legitimacy of counting periods of 
absence from the workplace for sickness or vacations as part of the 
miner's year(s) of employment. See 64 FR 54983 (Oct. 8, 1999). Despite 
the lack of actual exposure to coal mine dust during these periods, the 
employment relationship between the miner and his employer remains 
intact. Consequently, such periods of non-exposure may be included in 
the computation of the miner's work history. The Department agrees, 
however, that such absences should not be included when determining 
whether the miner actually worked at least 125 days during the year. 
The 125-day requirement means days of actual employment as a coal 
miner, and the regulation has been clarified to make the Department's 
position clear. See generally Director, OWCP v. Gardner, 882 F.2d 67, 
69-70 (3d Cir. 1989) (noting ``[t]he 125 day limit [in 20 CFR 
725.493(b)] relates to the minimum amount of time the miner may have 
been exposed to coal dust while in employment by [the] operator.''); 
but see Thomas v. BethEnergy Mines, Inc., 21 Black Lung Rep. 1-10 
(1997) (holding sick leave may be counted in determining whether miner 
worked 125 days during year). Thus, the periods of approved absence 
from the workplace may be counted only towards the miner's calendar 
year of work. (v) One comment generally opposes the definition 
contending it is based on outmoded concepts and

[[Page 79960]]

science. The commenter notes that miners today are exposed to less dust 
as a result of more hygienic working conditions. The Department, 
however, believes the definition provides a rational methodology for 
determining the length of a miner's employment relationship with an 
operator. The essential issues are the period(s) of time the coal mine 
operator employed the miner, and the number of days during a year of 
employment that the individual actually worked as a coal miner. If the 
miner actually worked at least 125 days during a calendar year or 
partial periods of different years totaling a 365-day period, then the 
miner has worked one year for purposes of the program regulations. 
Whether the miner was exposed to reduced levels of coal mine dust 
during the working days is irrelevant to this computation. Rather, such 
evidence may be relevant to an operator's attempt to rebut the 
presumption of regular and continuous exposure to coal mine dust found 
in Sec. 725.491(d). With respect to the 125-working day issue, the 
Department notes its disagreement with Landes v. Director, OWCP, 997 
F.2d 1192, 1197-98 (7th Cir. 1993), and Yauk v. Director, OWCP, 912 
F.2d 192, 195 (8th Cir. 1989) (both cases decided under 20 CFR 
718.301(b)). In both cases, the court held that a miner should receive 
credit for a full year of employment for each partial period of each 
calendar year during which the miner worked at least 125 days. The 
Department believes the partial periods must be aggregated until they 
amount to one year of coal mine employment comprising a 365-day period. 
Only then should the factfinder determine whether the miner spent at 
least 125 working days as a coal miner during the year. See Croucher v. 
Director, OWCP, 20 Black Lung Rep. 1-67 (1996) (holding ``year'' means 
calendar year or partial periods totaling calendar year; opposing party 
may establish irregular employment by showing miner worked fewer than 
125 days during year). Consequently, no basis has been provided for 
abandoning the proposed definition of a ``year.'' (vi) No other 
comments were received concerning this definition, and no changes were 
made in it.

20 CFR 725.103

    (a) In the initial notice of proposed rulemaking, the Department 
proposed Sec. 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''). See generally Director, OWCP v. 
National Mines Corp., 554 F.2d 1267, 1273-74 (4th Cir. 1977); Patton v. 
Director, OWCP, 763 F.2d 553, 559-60 (3d Cir. 1985). Second, the 
Department noted that the Supreme Court's decision in Director, OWCP v. 
Greenwich Collieries, 512 U.S. 267 (1994), did not address, much less 
restrict, the Department's statutory authority to alter the 
applicability of the APA. In Greenwich Collieries, the Supreme Court 
addressed only whether the Department had promulgated a regulatory 
presumption (20 CFR 718.3) that required a finding for the claimant if 
the evidence for and against a claimant on a particular issue was 
evenly balanced. The Court considered Sec. 718.3(c) too ambiguous to 
operate as an exception to the APA's requirement that the party who 
bears the burden of persuasion must prevail by a preponderance of the 
evidence. Because the Court's interpretation of the regulation resolved 
the issue, the Court did not reach the Department's argument that it 
has statutory authority to override 5 U.S.C. 556(d) by regulation and 
shift the burden of persuasion as well. Furthermore, the Court did not 
decide which party bears the burden of persuasion; rather, it 
determined only what standard of proof must be met by the party bearing 
the burden of persuasion. The Department therefore concluded Greenwich 
Collieries does not prohibit the Department from assigning burdens of 
proof to parties other than the claimant if necessary to achieve the 
goals of the BLBA. 64 FR 54973 (Oct. 8, 1999). Finally, the Department 
surveyed other decisions which upheld the authority of an agency to 
allocate the burden of persuasion by means of factual presumptions. 
This caselaw lent additional support for the Department's conclusion 
that its general rulemaking authority permitted it to adjust the 
burdens of proof among the parties, provided a rational basis existed 
between the proven facts and those presumed.
    (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 Allentown 
Mack Sales & Service, Inc. v. NLRB, 522 U.S. 359 (1998), prohibits the 
Department from reallocating burdens of proof absent statutory 
authority. As an initial matter, the Department addressed this decision 
in its second notice of proposed rulemaking. 64 FR 54973 (Oct. 8, 
1999). The Department quoted dicta from the majority opinion which 
explicitly supports the authority of an agency to promulgate 
``counterfactual evidentiary presumptions * * * as a way of furthering 
legal or policy goals[.]'' 522 U.S. at 378. The comment does not 
respond to this analysis, or explain in what manner the Department has 
erroneously interpreted the decision. In any event, the Department 
believes Allentown Mack provides no precedential basis for limiting the 
Department's authority to assign burdens of production and persuasion 
to parties other than the claimant. That case involved a dispute over 
the evidentiary showing a company must

[[Page 79961]]

make to deny recognition to an incumbent union. According to NLRB case 
law, the company must establish a ``reasonable doubt'' that the union 
enjoys the majority support of its members. The NLRB held that 
Allentown Mack had not established the existence of such doubt by a 
preponderance of the evidence. The Supreme Court ultimately overturned 
the Board's factual findings because the Court concluded the Board had 
applied in actuality a higher burden of proof than it had announced in 
its decisions. 522 U.S. at 378-80. Although the comment depicts this 
decision as an extension of Greenwich Collieries, Allentown Mack has no 
bearing on an agency's authority to vary the terms of the APA or 
reallocate the burden of persuasion to a party other than the proponent 
of a rule or order. Allentown Mack establishes only the proposition 
that an agency cannot announce one standard of proof in principle and 
apply a higher standard of proof in practice. The Department therefore 
rejects the comment's position.
    (d) No other comments were received concerning this definition, and 
no changes were made in it.

Subpart B

20 CFR 725.202

    (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. See generally 64 FR 3349 (Jan. 
22, 1997). The Department did not propose any further changes to this 
regulation in the second notice of proposed rulemaking. 64 FR 54971 
(Oct. 8, 1999).
    (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 William Bros., Inc. v. Pate, 833 F.2d 261 
(11th Cir. 1987), and Bridger Coal Co./Pac. Minerals, Inc. v. Director, 
OWCP [Harrop], 927 F.2d 1150 (10th Cir. 1991), and only if those 
individuals are also exposed to coal dust as a result of their work. 
The Department, however, believes the focus on mine construction, 
rather than coal extraction or preparation, is consistent with 
Congressional intent in extending coverage to construction workers. The 
Fourth Circuit has identified the flaw in using the traditional 
``situs/function'' test for coal mine construction workers: ``Coal mine 
construction * * * involves neither the extraction nor preparation of 
coal. If, therefore, we apply the two-step test to coal mine 
construction workers, they would rarely, if ever, qualify as miners 
under the Act.'' The Glem Co. v. McKinney, 33 F.3d 340, 342 (4th Cir. 
1994). The logical inquiry concerning the construction workers' 
activities must therefore look to coal mine construction, which 
inevitably (and generally) involves the pre-extraction work of building 
the mine facility itself. That such work is consistent with work at a 
coal mine is evident from the statutory definition of ``coal mine:'' 
``an area of land and all structures, facilities, * * * shafts, slopes, 
tunnels * * * and other property, real or personal, * * * used in, or 
to be used in, the work of extracting'' coal. 30 U.S.C. 802(h)(2) 
(emphasis supplied); see also 20 CFR 725.101(a)(23) (renumbered as 
Sec. 725.101(a)(12)). A construction worker who builds the ``coal 
mine'' is a ``miner'' to the extent work at the covered site exposes 
him or her to ``coal mine dust.'' Moreover, the fact that the claimant 
worked at non-operational mines is not, by itself, sufficient to 
establish a lack of coal mine dust exposure. The construction process 
itself may expose the miner to coal mine dust. In addition, a coal mine 
construction worker exposed to coal mine dust from an operating coal 
mine in the vicinity of the construction site is a ``miner'' under the 
Black Lung Benefits Act (BLBA). R&H Steel Buildings v. Director, OWCP, 
146 F.3d 514, 516-17 (7th Cir. 1998).
    Pate and Harrop, cited by the commenter, do not provide compelling 
authority to depart from the proposed regulation. In Pate, the Court 
stated that ``construction workers are covered only if they have been 
exposed to dust arising from the extraction or preparation of coal.'' 
833 F.2d at 266 (footnote omitted). Limiting covered construction 
activities to work involving dust exposure from coal extraction and 
preparation, however, incorrectly combines two independent elements of 
the definition of ``miner'': the ``function'' requirement for 
qualifying as a miner under the BLBA, i.e., working in the extraction 
or preparation or transportation of coal or in coal mine construction, 
and the exposure requirement for a construction worker. The two are 
unrelated. The only plausible explanation for separately including 
construction workers in the statutory definition of ``miner'' is 
Congress' recognition of their unique functional status. Construction 
workers generally perform their work before a mine becomes operational. 
Consequently, they generally will not be involved in the extraction or 
preparation of coal, or exposed to dust from such activities. While 
rejecting this position, the Court did acknowledge the Department's 
authority to implement its views through regulation: ``If the Secretary 
has a position he wishes to express, he can do it through the proper 
forum, i.e., the implementation of new, clarifying regulations.'' 833 
F.2d at 265. Section 725.202 represents the exercise of that authority.
    In Harrop, the Court held that the exposure to ``coal mine dust,'' 
required by 20 CFR 725.202(a) for coverage of a construction worker, 
involves exposure to ``dust containing coal.'' 927 F.2d at 1154, citing 
Pate. It interpreted the

[[Page 79962]]

statutory coverage of construction workers to reach only those 
individuals who are exposed to actual coal dust, despite acknowledging 
the variety of other (non-coal) dusts which may be inhaled at a mine 
construction site. The Department has consistently taken the position 
that ``coal mine dust'' means any dust generated at a coal mine site, 
and that exposure to coal mine dust is sufficient to meet the statutory 
definition of ``miner''for construction workers. 20 CFR 725.202(a); see 
generally Williamson Shaft Contracting Co. v. Phillips, 794 F.2d 865, 
869 (3d Cir. 1986) (upholding validity of 20 CFR 725.202(a) because 
Congress understood ``coal dust'' to mean ``the various dusts around a 
coal mine''). The interpretation of coverage reached by the Court in 
Harrop would effectively exclude most, if not all, construction workers 
from the definition of ``miner'' after Congress explicitly changed the 
definition to include them. The Department declines to adopt the more 
restrictive standard suggested by the Tenth Circuit and the commenter.
    (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.

20 CFR 725.203

    (a)(i) The Department proposed changing Sec. 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 Sec. 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, 
Sec. 725.203(b)(2) now refers to Sec. 725.504, which is the renumbered 
version of Sec. 725.503A. 62 FR 3341 (Jan. 22, 1997). The Department 
proposed no further changes to Sec. 725.203 in the second notice of 
proposed rulemaking. 64 FR 54971 (Oct. 8, 1999). (ii) The Department 
has now further amended Sec. 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 Sec. 725.203. The Benefits Review Board has 
since interpreted the phrase in Sec. 718.404(b) to involve discovery 
requests. Stiltner v. Westmoreland Coal Co., Black Lung Rep., BRB No. 
98-0337, slip op. at 5 (Jan. 31, 2000) (en banc). The Department did 
not intend the changes to Sec. 725.203(d) to foreclose evidentiary 
development other than medical examinations of the miner. The 
Department therefore adds the language formerly in Sec. 718.404(b) to 
Sec. 725.203(d), and clarifies its intent that the miner may be 
required to submit to medical examinations, produce medical evidence 
and answer discovery requests when the circumstances raise any issue 
concerning the validity of the award after the award becomes final.
    (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 
Sec. 725.503, and ensures the miner's entitlement to benefits for any 
period of eligibility which predates the filing of a claim. See 62 FR 
3349 (Jan. 22, 1997). (ii) Two comments approve of the change to 
subsection (a).
    (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. Selak v. Wyoming 
Pocahantas Land Company, 21 Black Lung Rep. 1-173, 1-178 (1999); see 
also Stiltner v. Westmoreland Coal Co., Black Lung Rep., BRB No. 98-
0337, slip op. at 5 (Jan. 31, 2000) (en banc) (holding operator does 
not have absolute right to compel claimant to respond to discovery 
request under 20 CFR 718.404(b) in connection with modification 
petition). Upon production of reasonable evidence justifying the 
request, however, the district director (or administrative law judge) 
may order the claimant to submit to a medical examination. Selak, 21 
Black Lung Rep. at 1-179.
    (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. See response to comments 
(c).

[[Page 79963]]

    (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 Sec. 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.

20 CFR 725.204

    (a) The Department proposed amending Sec. 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, Sec. 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 Sec. 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. See H.R. Rep. No. 
101-964, 1990 U.S.C.C. & A.N. 2649, 2650 (conference report). 
Accordingly, the Department proposed similar changes to Sec. 725.204 to 
delete the regulatory bar to ``deemed'' spouse entitlement under the 
BLBA. The Department proposed no additional changes to this regulation 
in its second notice of proposed rulemaking. 64 FR 54971 (Oct. 8, 
1999).
    (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.

20 CFR 725.209

    (a) In the initial notice of proposed rulemaking, the Department 
erroneously proposed changing Sec. 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 Sec. 725.209 with the statutory definition 
by preserving the distinction between a child/augmentee and a child/
beneficiary (see Sec. 725.221). A child who claims benefits in his or 
her own right based on personal disability (child/beneficiary) must 
prove the disability arose before age 22 as required by 30 U.S.C. 
902(g). 30 U.S.C. 922(a)(3). A dependent child who is an augmentee of a 
beneficiary, however, is exempt from this requirement because the 
statutory definition of ``dependent'' explicitly exempts a ``child'' 
from the requirement that disability begin by a certain age. 30 U.S.C. 
902(a)(1). See generally 64 FR 54983 (Oct. 8, 1999).
    (b) Reference should be made to the Department's response to 
comments concerning Sec. 725.219 to determine the effect of marriage on 
a child's dependency status under Sec. 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.

20 CFR 725.212

    (a) In the initial notice of proposed rulemaking, the Department 
proposed amending Sec. 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). See also Sec. 725.537, and response to comments. The Department 
proposed no further changes to this regulation in its second notice of 
proposed rulemaking. 64 FR 54971 (Oct. 8, 1999).
    (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. See 
62 FR 3350-51 (Jan. 22, 1997). Congress amended the Social Security Act 
in 1965 to allow benefits to a divorced surviving spouse as a ``widow'' 
of the miner. Pub. L. No. 89-97, Sec. 308(b)(1), 79 Stat. 286 (1965). 
The legislative history of the amendment clearly established Congress' 
intent that payment of benefits to two (or more) ``widows'' would not 
reduce the benefits paid to either of the widows. S.

[[Page 79964]]

Rep. No. 404, 89th Cong., 1st Sess. (1965), reprinted in 1965 U.S.C.C. 
& A.N. 1943, 2047. In 1972, Congress amended the BLBA definition of 
``widow'' to adopt the Social Security Act definition. 30 U.S.C. 
902(e). The legislative history is equally clear that Congress intended 
to conform the BLBA definition to the Social Security Act definition. 
S. Rep. No. 743, 92nd Cong., 2d. Sess., reprinted in 1972 U.S.C.C. & 
A.N. 2305, 2332. The BLBA also reinforces this interpretation because 
it requires a ``widow'' to receive benefits at prescribed rates and 
makes no allowance for a reduction based on the existence of more than 
one widow. 30 U.S.C. 922(a)(2). To date, two courts of appeals and the 
Benefits Review Board have accepted the Department's position. Peabody 
Coal Co. v. Director, OWCP [Ricker], 182 F.3d 637, 642 (8th Cir. 1999); 
Mays et al. v. Piney Mountain Coal Co., 21 Black Lung Rep. 1-59, 1-65/
1-66 (1997), aff'd 176 F.3d 753, 764-765 (4th Cir. 1999). No court has 
reached a contrary result, and no comment has addressed the substance 
of this analysis. Consequently, the Department has no basis for 
changing the regulation. Finally, the Department cannot respond to the 
alleged communication between SSA and the Department because the 
comment provides no detailed evidence as to the nature or content of 
the communication. In any event, an undocumented assertion concerning 
another agency's intention cannot form the basis for displacing a 
proper interpretation of the pertinent statutes, especially when courts 
have unanimously upheld that interpretation.
    (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 Sec. 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, para. 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.

20 CFR 725.213

    (a) The Department proposed amending Sec. 725.213 in the initial 
notice of proposed rulemaking to harmonize that regulation with changes 
to Sec. 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 Sec. 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

the wife living with or dependent for support on the decedent at the 
time of his death, or living apart for reasonable cause or because 
of his desertion, who has not remarried.

Pub. L. 91-173, Sec. 402(e), 83 Stat. 793 (1969) (emphasis supplied). 
The emphasized language excluded from coverage any miner's survivor who 
later remarried, without regard to the subsequent termination of the 
marriage. In 1972, Congress amended the definition of `widow' by 
enacting the current version. In pertinent part, the phrase ``who is 
not married'' replaced ``who has not remarried.'' The Senate report 
accompanying the proposed amendments states that ``[t]he term `widow' 
in Sec. 402(e) is likewise redefined to conform to the Social Security 
Act definition.'' S. Rep. No. 743, 92nd Cong., 2d. Sess. 30, reprinted 
in 2 Comm. On Labor and Pub. Welfare, 94th Cong., 1st Sess., 
Legislative History of the Federal Coal Mine Health and Safety Act of 
1969, at 1974 (1975). The legislative history therefore unequivocally 
establishes congressional intent to define ``widow'' for purposes of 
the Black Lung Benefits Act and SSA in the same manner.
    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, Sec. 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., reprinted in 1965 U.S.C.C. & A.N. 1943, 2048. The 
legislative history therefore underscores the congressional intention 
to permit restoration of SSA eligibility to a widow whose intervening 
marriage has terminated. The Social Security Administration regulations 
implementing Part B of the BLBA confirm this view:

    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 * * 
*.

20 CFR 410.211(a). The Sixth Circuit and the Benefits Review Board have 
also adopted the Department's position, and no circuit has taken a 
contrary view. Wolf Creek Collieries v. Robinson, 872 F.2d 1264, 1266 
(6th Cir. 1989); Luchino v. Director, OWCP, 8 Black Lung Rep. 1-

[[Page 79965]]

453, 1-456 (1986). The commenter's objection must be rejected.
    In promulgating Sec. 725.213, the Department recognizes that 
permitting reentitlement of surviving spouses and children 
(Sec. 725.219) treats these classes of beneficiaries more generously 
than surviving brothers and sisters of the deceased miner 
(Sec. 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.

20 CFR 725.214

    (a) The Department proposed amending Sec. 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 
Sec. 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 Sec. 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 Sec. 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 
Sec. 725.204, and provided a detailed legal analysis of the reasons 
supporting the revision in its initial notice of proposed rulemaking. 
See 62 FR 3349-50 (Jan. 22, 1997). The Black Lung Benefits Act (BLBA) 
incorporates the definition of a dependent ``wife'' used by the 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 as potentially 
eligible for benefits on a single wage earner's record. The ``deemed'' 
spouse is an individual who married the wage earner while unaware that 
some legal impediment existed to the marriage. Before 1990, Sec. 416(h) 
prohibited 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 imposed a similar limitation in 
the dependency criteria when it promulgated 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. See H.R. 
Rep. No. 101-964, 1990 U.S.C.C. & A.N. 2649, 2650 (conference report). 
Accordingly, the Department proposed similar changes to Sec. 725.214 to 
delete the regulatory bar to ``deemed'' spouse entitlement under the 
BLBA. The comment does not respond to this analysis with any specific 
reasoning demonstrating the alleged inconsistency with the SSA or 
refuting the Department's authority to implement this change. Finally, 
increased benefits liability alone is not a legitimate basis for 
denying benefits to eligible claimants under the BLBA.
    (c) No other comments concerning this section were received, and no 
other changes have been made in it.

20 CFR 725.215

    (a) In the initial notice of proposed rulemaking, the Department 
proposed clarifying the intended operation of Sec. 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.

20 CFR 725.219

    (a) In the initial notice of proposed rulemaking, the Department 
proposed changing Sec. 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

[[Page 79966]]

permanent bar to future entitlement for any individual other than a 
miner's surviving spouse or surviving divorced spouse. 64 FR 54983-84 
(Oct. 8, 1999). Based on this position, the Department withdrew a 
proposed change to Sec. 725.223 which extended reentitlement to a 
miner's surviving dependent brother or sister if the sibling married 
while receiving benefits, but the marriage later ended.
    (b) Two comments recommend adopting a provision (analogous to 
Sec. 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.
30 U.S.C. 902(g). The literal language of the statute does not preclude 
a child's eligibility for all time based upon the existence of a 
marriage. Rather, the two statutory provisions authorize the payment of 
benefits to an eligible child survivor ``for so long as'' (s)he ``is 
unmarried.'' If a marriage terminates prior to any period of 
eligibility, the child is nevertheless unmarried when (s)he becomes 
entitled to benefits. See Adler v. Peabody Coal Co., Black Lung Rep., 
BRB No. 98-1513 BLA (Feb. 4, 2000). If the child marries while 
receiving benefits, (s)he cannot continue as an eligible survivor for 
the duration of the marriage. Sullenberger v. Director, OWCP, Black 
Lung Rep., BRB No. 99-0449 BLA (March 8, 2000) Upon cessation of the 
marital relationship, however, the child again ``is unmarried,'' which 
complies with the statutory requirement. Assuming all other conditions 
for eligibility are met, an ``unmarried'' child retains his or her 
status as a ``child'' under the plain language of the statute 
notwithstanding the occurrence of the marriage. In this regard, the 
Department disagrees with the broad statement in Reigh v. Director, 
OWCP, 20 Black Lung Rep. 1-44 (1996), that a surviving child of a miner 
cannot revive her status as the unmarried dependent of her parents upon 
the death of her husband. 20 Black Lung Rep. at 1-48.
    The Department's interpretation of the plain language of 
Sec. 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 Sec. 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 McMahon v. Califano, 605 F.2d 49 (2d Cir. 1979), cert. 
den. 444 U.S. 847 the Court held that ``the only reasonable 
interpretation of [Sec. 402(d)(6) and (d)(1)(D)] is that any marriage 
occurring subsequent to a child's initial entitlement to benefits 
terminates those benefits and prevents re-entitlement in the future.'' 
605 F.2d at 53; see also Downs v. D.C. Police & Firefighters Retirement 
and Relief Bd., 666 A.2d 860 (D.C.C.A. 1995) (holding disabled child's 
annuity permanently terminated when child married and later divorced). 
Otherwise, the Court concluded, the proviso language of Sec. 402(d)(6) 
would be superfluous because no other interpretation would afford it 
any meaning. Congress therefore has implemented a policy determination 
that a disabled child receiving SSA benefits should become permanently 
ineligible if the child marries, regardless of the subsequent 
termination of the marriage. By omitting the incorporation of these 
provisions into the BLBA definition of ``child,'' however, the 
Department concludes that Congress did not intend to adopt the same 
policy for the BLBA.
    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), reprinted in 
Senate Subcommittee on Labor, Committee on Labor and Public Welfare, 
94th Cong., 1st Sess., History of the Federal Coal Mine Health and 
Safety Act of 1969, as amended through 1974, Part 2--Appendix at 1946, 
1974 (1975). That conformance extended only to the specific adoption of 
SSA eligibility criteria for age, disability, and student requirements, 
but did not include provisions such as the permanent ban on 
reentitlement for a child who marries in Sec. 402(d)(6). Consequently, 
the Department is free to depart from the SSA eligibility scheme 
contained in Sec. 402(d)(6) by permitting reentitlement.
    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. See 
generally Wolf Creek Collieries v. Robinson, 872 F.2d 1264, 1266 (6th 
Cir. 1989); Luchino v. Director, OWCP, 8 Black Lung Rep. 1-453, 1-456 
(1986). The statutory definitions of ``widow'' and ``child'' are alike 
in that both require the individual to be unmarried as a condition of 
eligibility. The legislative history of the Black Lung Benefits Act's 
1972 amendments strongly supports limiting the effect of an intervening 
marriage on a surviving spouse's eligibility, and does not contradict 
affording the same treatment

[[Page 79967]]

to a child. In the absence of such contradictory evidence of Congress' 
intentions, both statutory definitions should be construed alike given 
the similarities in their language. Accordingly, a presently unmarried 
child of a miner is eligible for benefits notwithstanding any prior 
marriage. The marriage merely suspends the child's eligibility for 
benefits for the duration of the marriage if the child marries during a 
period of entitlement. Eligibility then resumes upon termination of the 
marriage, assuming all other conditions of eligibility can be 
satisfied. If the child's marriage terminates prior to any period of 
entitlement, the marriage has no effect upon the child's eligibility.
    (c) No other comments concerning this section were received, and no 
other changes have been made in it.

20 CFR 725.221

    (a) The Department proposed changing the date of onset of 
disability in Sec. 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.

20 CFR 725.222

    (a) The Department proposed changing the date of onset of 
disability in Sec. 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.

20 CFR 725.223

    (a) In the initial notice of proposed rulemaking, the Department 
proposed revising Sec. 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. See Sec. 725.219(d) 
above, with respect to children. Although the Department recognizes 
reentitlement for children as well as spouses, the Department has not 
changed its views about the effect of marriage as a permanent bar to 
reentitlement for a miner's brother or sister. The BLBA supports this 
policy. 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 is unequivocal. Once a brother or sister who is 
receiving benefits marries, eligibility terminates. That the 
termination is permanent may be inferred from the phrasing of the 
provision: upon marriage, no benefits are payable to the sibling ``for 
any month'' starting with the month of the marriage. Section 412(a)(5) 
does not include any qualifying language which would suggest that 
benefits are not payable simply for the duration of the marriage. 
Rather, it identifies a point when ineligibility commences, with no 
provision for restoring eligibility. In this regard, section 412(a)(5) 
differs from the statutory definitions of ``widow'' and ``child,'' 30 
U.S.C. 902(e), (g). Section 412(a)(5) links the occurrence of an event 
to the termination of eligibility

[[Page 79968]]

while the ``widow'' and ``child'' definitions focus on the individual's 
status. The widow's or child's marriage status can change; consequently 
these individuals can move in or out of eligibility. Once a brother or 
sister marries, ``no benefits shall be payable * * *.'' The BLBA 
therefore requires that a miner's brothers and sisters be excluded from 
reentitlement upon the dissolution of marriage.
    (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.

Subpart C

20 CFR 725.306

    (a) In its first notice of proposed rulemaking, the Department 
proposed revising Sec. 725.306(a)(3) by cross-referencing Sec. 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. See list of changes in the 
Department's second proposal, 64 FR 54971 (Oct. 8, 1999).
    (b) Several comments opposed the revised definition of 
``benefits,'' Sec. 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 
Sec. 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 
Sec. 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.

20 CFR 725.308

    Although the Department received comments relevant to this section, 
the regulation was not open for comment, see 62 Fed. Reg. 3341 (Jan. 
22, 1997); 64 Fed. Reg. 54971 (Oct. 8, 1999). It was repromulgated only 
for the convenience of readers. Accordingly, no changes are being made 
in this section.

20 CFR 725.309

    (a) In its first notice of proposed rulemaking, the Department 
proposed revising Sec. 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, 
i.e., that the new evidence submitted by the claimant did not 
demonstrate a change in his condition but simply that the earlier 
determination was mistaken. If the presumption was not rebutted, the 
factfinder would weigh all of the evidence on the remaining elements of 
entitlement to determine whether the claimant was entitled to benefits. 
The original proposal also provided that the remaining issues of 
entitlement were subject to de novo adjudication unless the parties had 
stipulated to, or waived their right to contest, those issues in the 
earlier proceeding. Thus, once the claimant established a change in his 
condition, no parties to the claim were entitled to rely on findings 
made in connection with the denial of the prior claim.
    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 Lisa Lee Mines v. 
Director, OWCP, 86 F.3d 1358 (4th Cir. 1996), cert. denied, 117 S. Ct. 
763 (1997), by accepting the correctness of the earlier denial of 
benefits. In addition, in response to several comments, the Department 
restored a provision requiring the denial of an additional survivor's 
claim, but limited the circumstances in which such a denial was 
appropriate. The Department proposed the automatic denial of an 
additional survivor's claim in cases in which the denial of the 
previous claim was based solely on a finding or findings that were not 
subject to change. For example, if the earlier claim was denied solely 
because the miner did not die due to pneumoconiosis, the regulation 
would require the denial of any additional claim as well. The 
Department responded to other comments, rejecting the suggestion that 
the revised regulation was inconsistent with Sec. 22 of the Longshore 
and Harbor Workers' Compensation Act, 33 U.S.C. 922, as incorporated by 
30 U.S.C. 932(a), and Sec. 413(d) of the Black Lung Benefits Act, 30 
U.S.C. 923(d). Finally, the Department discussed why findings favorable 
to the claimant that were made in the previous denial of benefits 
should not be given preclusive effect, and clarified the date from 
which benefits were payable in the event an additional claim was 
awarded.
    (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 Sec. 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.

[[Page 79969]]

    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. See 64 FR 54978-79 (Oct. 8, 
1999).
    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 Federal 
Register, where that source appears. This second citation is not an 
exhaustive list; thus, each source may appear at additional points in 
the Rulemaking Record. In support of their attack, the commenters have 
submitted an analysis of the available medical literature from Dr. 
Gregory Fino, a Board-certified physician in Internal Medicine and 
Pulmonary Disease, and Dr. Barbara Bahl, who has a doctorate in nursing 
and biostatistics. Drs. Fino and Bahl analyze nine articles and 
textbooks dealing with latency, which they define parenthetically as 
``0/0 or 0/1 to 1/0+.'' The analysis thus focuses on evidence that 
would show that a miner whose chest X-rays are classified by a 
radiologist as ``negative'' (0/0 or 0/1 under the ILO-UC classification 
scheme, see 20 CFR 718.102(b)), after he leaves the mine can develop a 
disease that will result in chest X-rays that are classified as 
``positive.'' Under the ILO-UC scheme, an X-ray classified as category 
1, 2, or 3, ranging from 1/0 to 3/3, is considered positive for simple 
pneumoconiosis. An X-ray classified as A, B, or C is considered 
positive for complicated pneumoconiosis, also known as progressive 
massive fibrosis or massive pulmonary fibrosis. 20 CFR 718.102(b), 
718.304(a) (1999). They conclude that ``the medical literature provides 
no evidence that coal workers' pneumoconiosis or silicosis in 
coalminers is a latent disease. There is also no evidence to show that 
the development of pulmonary impairment is latent.'' Rulemaking Record, 
Exhibit, 89-37, Appendix C at 29.
    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 Sec. 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. See, e.g., Peabody Coal Co. v. Lowis, 708 F.2d 266, 268 
n.4 (7th Cir. 1983) (``the `legal' definition of pneumoconiosis 
contained in the above-quoted regulation [Sec. 727.202] includes not 
only `true or clinical' pneumoconiosis but also other respiratory or 
pulmonary diseases arising from dust exposure in coal mine 
employment''); Gulf & Western Industries v. Ling, 176 F.3d 226, 231 
(4th Cir. 1999) (``[the regulations detail the breadth of what is 
frequently called

[[Page 79970]]

`legal' pneumoconiosis * * *''); see also the Department's preamble to 
Sec. 718.201.
    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., Occupational Lung Diseases (WB Saunders Co., 3d ed. 1995) 389, 
see also Rulemaking Record, Exhibit 89-37, Appendix C at 34, 42, 
contains the observation that ``PMF [Progressive massive fibrosis] may 
occur after dust exposure has ceased, even when the miner has left the 
industry with no apparent simple pneumoconiosis, although this will 
only occur if the worker has had substantial dust exposure''). 
Similarly, National Institute for Occupational Safety and Health, 
Criteria for a Recommended Standard: Occupational Exposure to 
Respirable Coal Mine Dust, Sec. 4.2.1.3.1, Rulemaking Record, Exhibit 
2-1 at 48, summarized an article (Maclaren WM, Soutar CA, ``Progressive 
massive fibrosis and simple pneumoconiosis in ex-miners,'' Br. J. Ind. 
Med. 42:734-740 (1985)) as follows: ``Among 1,902 ex-miners who had not 
developed PMF within 4 years of leaving mining, 172 (9%) developed PMF 
after leaving mining. Of those 172 miners with PMF, 32% had no evidence 
of simple CWP (category 0) when they left mining.'' In that article, in 
fact, Maclaren and Soutar reported both small opacities (evidence of 
simple pneumoconiosis) and large opacities (evidence of complicated 
pneumoconiosis) in ex-miners who did not show evidence of coal workers' 
pneumoconiosis after the miners left the industry.
    Moreover, contrary to the conclusion of Dr. Fino and Dr. Bahl, the 
study conducted by Donnan et al. did find significant evidence of 
latency. Donnan PT, Miller BG, Scarisbrick DA, Seaton A, Wightman AJA, 
Soutar CA, ``Progression of simple pneumoconiosis in ex-coalminers 
after cessation of exposure to coalmine dust,'' IOM report TM/97/07 
(Institute of Occupational Medicine, December 1997) 1-67, see also 
Rulemaking Record, Exhibit 89-37, Appendix C at 26, 29. Dr. Fino and 
Dr. Bahl write that ``only one out of 200 miners [in the study] was 
found to progress from a negative to a positive film.'' That 
conclusion, however, was not the conclusion of the study's authors. 
Their tables 3.4a (Median profusion score for 14 CWP progressors and 19 
PMF progressors) and 3.4b (Median profusion score for 161 CWP non-
progressors) compare X-rays taken within two years of the dates on 
which the 200 miners left the coal mining industry with X-rays taken 10 
years later. They demonstrate that of 138 ex-miners whose early X-rays 
were read as 0/0 or 0/1, 11 had later X-rays read as positive for 
either simple or complicated pneumoconiosis. This proportion, 7.97%, 
has epidemiologic significance, and supports the authors' conclusion 
that ``[t]he results have demonstrated that progression does occur 
after cessation of exposure.'' Donnan et al. at 23.
    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), see also 
Rulemaking Record, Exhibit 89-37, Appendix C at 26. Dr. Fino and Dr. 
Bahl quote the textbook's statement that ``the chance of radiological 
progression over ten years at a mean dust concentration of 2 milligrams 
per cubic meter is essentially zero for a miner with x-ray category 0/
0.'' This textbook was published by the Division of Respiratory Disease 
Studies of the Appalachian Laboratory for Occupational Safety and 
Health, a component of the National Institute of Occupational Safety 
and Health, more than 10 years prior to the Donnan study. In light of 
NIOSH's conclusion that scientific analysis supports the Department's 
regulations, the Department does not agree that the statement by 
Merchant et al. requires the Department to revise its regulatory 
approach.
    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., 
Occupational Lung Diseases (WB Saunders Co., 3d ed. 1995) 389, see also 
Rulemaking Record, Exhibit 89-37, Appendix C at 34, 42. Seaton and 
colleagues reported a cohort of miners who had a rapid progression of 
radiologic findings resembling silicosis, despite a relatively low 
total coal dust exposure. Seaton A, Dick JA, Dodgson J, Jacobsen M., 
``Quartz and pneumoconiosis in coal miners,'' Lancet 2:1272 (1981), see 
also Rulemaking Record, Exhibit 2-1 at 50. Analysis revealed that the 
percentage of quartz in the mixed coal mine dust was significantly 
higher in these affected miners than in matched controls. They 
concluded that quartz exposure was an important factor contributing to 
pneumoconiosis in some miners and that disease in such miners was more 
aggressive. Moreover, miners who drill into hard rock, such as those 
who bore shafts or work as roof bolters, are exposed to higher 
concentrations of quartz and are known to be at higher risk for 
developing silicosis. Seaton, ``Coal Workers' Pneumoconiosis,'' in 
Morgan, WKC and Seaton A, eds., Occupational Lung Diseases (WB Saunders 
Co., 3d ed. 1995) 389, see also Rulemaking Record, Exhibit 89-37, 
Appendix C at 34, 42. Based on these observations, it is reasonable to 
conclude that there is a clear risk of developing pneumoconiosis with 
characteristics of silicosis in coal miners exposed to dusts with high 
quartz content. Accordingly, the Department believes that it may 
properly rely on studies of silicosis in promulgating regulations 
governing the compensability of pneumoconiosis as that term has been 
defined by Congress. See also Beckett WS, ``Occupational Respiratory 
Diseases,'' The New England Journal of Medicine, 342:406-13 (Feb. 12, 
2000) (citing a study of silicosis to support the conclusion that 
``[w]ith many substances (including coal and silica dust), the disease 
may progress for decades after the exposure has ceased.''). (Dr. 
Beckett's review article did not appear until after the

[[Page 79971]]

rulemaking record had closed; it is cited only as additional evidence 
confirming the Department's previous use of studies involving 
silicosis).
    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), see also 62 FR 3344 (Jan. 22, 1997), demonstrated a 
decline of pulmonary function in both smoking and non-smoking coal 
miners that continues over time even after retirement from mining. 
Given this evidence of progression, it is clear that a miner who may be 
asymptomatic and without significant impairment at retirement can 
develop a significant pulmonary impairment after a latent period. 
Because the legal definition of ``pneumoconiosis'' includes impairments 
that arise from coal mine employment, regardless of whether a miner 
shows X-ray evidence of pneumoconiosis, this evidence of deterioration 
of lung function among miners, including miners who did not smoke, is 
particularly significant.
    The commenters also cite the 1985 report of the Surgeon General, 
U.S. Department of Health and Human Services, The Health Consequences 
of Smoking: Cancer and Chronic Lung Disease in the Workplace (1985), 
see also Rulemaking Record, Exhibit 89-21, Appendix 11, in support of 
their argument. Of the seven items listed in the ``Summary and 
Conclusions'' section of Chapter Seven, ``Respiratory Disease in Coal 
Miners,'' none addresses the latency or progressivity of 
pneumoconiosis. In addition, the Surgeon General's report, which 
focused on the health consequences of smoking, did not review many of 
the articles on which the Department's conclusion is based. Because the 
overwhelming majority of the references cited by the Department in its 
first and second notices of proposed rulemaking, see 62 FR 3343-44 
(Jan. 22, 1997); 64 FR 54978-79 (Oct. 8, 1999), as well as the 
references discussed above, were prepared after 1985, this is not 
surprising. Accordingly, the Department does not believe that anything 
in the Surgeon General's report requires the Department to ignore the 
conclusions that it has drawn from the studies and articles in the 
rulemaking record.
    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. 
Plesh v. Director, OWCP, 71 F.3d 103, 108 (3d Cir. 1995) 
(``pneumoconiosis is progressive and incurable''); Labelle Processing 
Co. v. Swarrow, 72 F.3d 308, 314-315 (3d Cir. 1995) (``Congress, in 
enacting the BLBA, recognized the perniciously progressive nature of 
the disease * * *. Moreover, courts have long acknowledged that 
pneumoconiosis is a progressive and irreversible disease.''); 
Kowalchick v. Director, OWCP, 893 F.2d 615, 621 (3d Cir. 1990) (``That 
the three earliest x-rays of record * * * were read negative is not 
inconsistent with the progressive nature of pneumoconiosis.''); 
Shendock v. Director, OWCP, 893 F.2d 1458, 1467 n.10 (3d Cir. 1990) 
(``it is well recognized that pneumoconiosis is a progressive disease 
whose symptoms increase in severity over time''); Bethenergy Mines Inc. 
v. Director, OWCP, 854 F.2d 632, 636 (3d Cir. 1988) (``Due to the 
progressive nature of pneumoconiosis, a coal mine operator is less 
likely to know the details underlying a particular claim than an 
employer is in the typical case arising under the LHWCA.''); Zielinski 
v. Califano, 580 F.2d 103, 107 (3d Cir. 1978) (``pneumoconiosis and 
related lung diseases progress slowly''); Eastern Associated Coal Corp. 
v. Director, OWCP, ____ F.3d ____, No. 99-1312, slip op. at pp. 11-12 
(4th Cir. July 12, 2000) (observing ``the assumption of progressivity 
that underlies much of the statutory regime''); Lane Hollow Coal Co. v. 
Lockhart, 137 F.3d 799, 803 (4th Cir. 1998) (``pneumoconiosis is 
progressive and irreversible''); Adkins v. Director, OWCP, 958 F.2d 49, 
51 (4th Cir. 1992) (``pneumoconiosis is a progressive disease''); Greer 
v. Director, OWCP, 940 F.2d 88, 90 (4th Cir. 1991) (pneumoconiosis is 
``a slowly-progressing condition''); Hamrick v. Schweiker, 679 F.2d 
1078, 1081 (4th Cir. 1982) (``pneumoconiosis is a progressive 
disease''); Prater v. Harris, 620 F.2d 1074, 1082 (4th Cir. 1980) 
(``pneumoconiosis is a progressive disease''); Barnes v. Mathews, 562 
F.2d 278, 279 (4th Cir. 1977) (``pneumoconiosis is a slow, progressive 
disease often difficult to diagnose at early stages''); Crace v. 
Kentland-Elkhorn Coal Corp., 109 F.3d 1163, 1167 (6th Cir. 1997) 
(``because of the progressive nature of pneumoconiosis, more recent 
evidence is often accorded more weight''); Consolidation Coal Co. v. 
McMahon, 77 F.3d 898, 906 (6th Cir. 1996) (recognizing ``the 
progressive nature of pneumoconiosis''); Sharondale Corp. v. Ross, 42 
F.3d 993, 997 (6th Cir. 1994) (``the material change provision 
[provides] relief from the principles of finality for those miners 
whose conditions have deteriorated due to the progressive nature of 
black lung disease''); Johnson v. Peabody Coal Co., 26 F.3d 618, 620 
(6th Cir. 1994) (``Pneumoconiosis is a progressive debilitating 
disease.''); Woodward v. Director, OWCP, 991 F.2d 314, 320 (6th Cir. 
1993) (``Pneumoconiosis is a progressive and degenerative disease.''); 
Campbell v. Consolidation Coal Co., 811 F.2d 302, 303 (6th Cir. 1987) 
(recognizing ``the progressive nature of pneumoconiosis''); Back v. 
Director, OWCP, 796 F.2d 169, 172 (6th Cir. 1986) (``Because of the 
progressive nature of pneumoconiosis, earlier negative and later 
positive X-rays of the same individual are not necessarily in 
conflict.''); Orange v. Island Creek Coal Co., 786 F.2d 724, 727 (6th 
Cir. 1986) (``pneumoconiosis * * * is a progressive disease''); 
Director, OWCP v. Bivens, 757 F.2d 781, 788 (6th Cir. 1985) (``the 
Black Lung Benefits Act provides compensation for disability based on 
an invisible and progressive disease''); Collins v. Sec'y of HHS, 734 
F.2d 1177, 1180 (6th Cir. 1984) (``Medically we note that 
pneumoconiosis is a slow, progressive disease. Its characteristics and 
symptoms often do not manifest themselves in a way that promote [sic] 
immediate detection. In some cases the disease may take years before it 
is readily detectable.''); Smith v. Califano, 682 F.2d 583, 587 (6th 
Cir. 1982) (``coal workers'' pneumoconiosis * * * is a progressive 
disease''); Hill v. Califano, 592 F.2d 341, 345 (6th Cir. 1979) 
(``pneumoconiosis is a slowly progressive disease''); Morris v. 
Mathews, 557 F.2d 563, 568 (6th Cir. 1977) (recognizing Congressional 
finding that ``pneumoconiosis [is] a progressive chronic dust disease 
of the lung''); Begley v. Mathews, 544 F.2d 1345, 1354 (6th Cir. 1976) 
(describing pneumoconiosis as ``a disease known to be of a slowly 
progressive character''); Amax Coal Co. v. Franklin, 957 F.2d 355, 359 
(7th Cir. 1992) (``Black lung

[[Page 79972]]

disease, at least when broadly defined, is a progressive disease * * 
*.''); Dotson v. Peabody Coal Co., 846 F.2d 1134, 1139 (7th Cir. 1988) 
(``Pneumoconiosis is a progressive disease* * *''.); Russell v. 
Director, OWCP, 829 F.2d 615, 616 (7th Cir. 1987) (``Coal miners'' 
pneumoconiosis (black lung) is a progressive, debilitating disease.''); 
Amax Coal Co. v. Director, OWCP, 801 F.2d 958, 964 (7th Cir. 1986) 
(recognizing ``the difficulty of clinically diagnosing the progressive 
disease''); Consolidation Coal Co. v. Chubb, 741 F.2d 968, 973 (7th 
Cir. 1984) (``In light of the progressive nature of pneumoconiosis, 
[the ALJ's] according greater weight to the recent x-ray was not 
irrational.''); Lovilia Coal Co. v. Harvey, 109 F.3d 445, 450 (8th Cir. 
1997) (recognizing progressive nature of pneumoconiosis); Robinson v. 
Missouri Mining Co., 955 F.2d 1181, 1184 (8th Cir. 1992) 
(``pneumoconiosis is a progressive disease''); Campbell v. Director, 
OWCP, 846 F.2d 502, 509 (8th Cir. 1988) (``pneumoconiosis is a 
progressive disease''); Newman v. Director, OWCP, 745 F.2d 1162, 1165 
(8th Cir. 1984) (``pneumoconiosis is a progressive disease''); Padavich 
v. Mathews, 561 F.2d 142, 146 (8th Cir. 1977) (``Pneumoconiosis is a 
progressive illness* * *.''); Humphreville v. Mathews, 560 F.2d 347, 
349 (8th Cir. 1977) (``pneumoconiosis is a progressive disease''); 
Wyoming Fuel Co. v. Director, OWCP, 90 F.3d 1502, 1507 (10th Cir. 1996) 
(recognizing ``the nature of pneumoconiosis as a disease that develops 
progressively and is difficult to diagnose''); Lukman v. Director, 
OWCP, 896 F.2d 1248, 1253 (10th Cir. 1990) (recognizing real purpose of 
duplicate claims regulation is to provide ``miners with progressively 
worsening health full and equal access to black lung benefits.''); 
Ohler v. Sec'y of HEW, 583 F.2d 501, 506 (10th Cir. 1978) 
(``pneumoconiosis is a progressive disease, as is emphysema''); Paluso 
v. Mathews, 573 F.2d 4, 10 (10th Cir. 1978) (``It is well-established 
medically that pneumoconiosis is a progressive disease which frequently 
defies diagnosis.''); Alabama Dry Dock and Shipbuilding Corp. v. 
Sowell, 933 F.2d 1561, 1566 (11th Cir. 1991) (black lung ``can lie 
essentially dormant in the body for many years after an employee has 
left his employment before progressing to the point where [it] is 
disabling''); Curse v. Director, OWCP, 843 F.2d 456, 457 (11th Cir. 
1988) (recognizing black lung disease develops slowly and 
progressively); Doss v. Califano, 598 F.2d 419, 421 (11th Cir. 1979) 
(``pneumoconiosis is a progressive disease''); but see Zeigler Coal Co. 
v. Lemon, 23 F.3d 1235, 1238 (7th Cir. 1994) (chastising an 
administrative law judge for assuming that pneumoconiosis is 
progressive without any evidence in the record to support the 
assumption).
    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, Sec. 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, Allen v. Mead Corp., ____ Black Lung Rep. (MB) ____, BRB 
No. 99-0474 BLA (May 31, 2000). The one-element test allows a miner who 
demonstrates a material change in one of the conditions of entitlement 
previously decided against him to avoid an automatic bar on 
establishing his current entitlement to benefits. To the extent that 
the commenter would require each miner to submit scientific evidence 
establishing that the change in his specific condition represents 
latent, progressive pneumoconiosis, the Department disagrees and has 
therefore not imposed such an evidentiary burden on claimants. Rather, 
the miner continues to bear the burden of establishing all of the 
statutory elements of entitlement, except to the extent that he is 
aided by two statutory presumptions, 30 U.S.C. 921(c)(1) and (c)(3). 
The revised regulation continues to afford coal mine operators an 
opportunity to introduce contrary evidence weighing against 
entitlement.
    (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 Sec. 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 Sec. 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 Sec. 718.204.
    (d) A number of comments argue that Sec. 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 Sec. 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, Kremer v. Chemical 
Constr. Corp., 456 U.S. 461, 481 n. 22 (1982), a final adjudication of 
the merits of a cause of action will preclude the parties from 
relitigating issues that were or could have been raised in the first 
proceeding. Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 476 
(1998), citing Federated Department Stores, Inc. v. Moitie, 452 U.S. 
394, 398 (1981).
    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

[[Page 79973]]

Sec. 725.309 bars the litigation of the miner's additional claim. For 
example, where the original denial was based on the miner's failure to 
establish that his respiratory impairment was totally disabling, and 
new evidence establishes that that condition has worsened, the miner 
should not be barred from prosecuting a second application for 
benefits.
    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. See preamble to Sec. 725.213. Section 725.309 
recognizes this possibility by allowing a miner's survivor to litigate 
a second claim where one of the grounds on which the first claim was 
denied, e.g., that the survivor was married, is subject to change.
    Moreover, Sec. 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 Sec. 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.'' Rivet, 522 U.S. at 476. Section 725.309 
similarly requires an operator seeking the denial of an additional 
survivor's claim by virtue of preclusion to raise that issue at the 
appropriate time. Like traditional claim preclusion, Sec. 725.309 
offers the party defending the cause of action an affirmative defense 
that is subject to waiver if not properly and timely raised. See, e.g., 
Garry v. Geils, 82 F.3d 1362, 1367 n. 8 (7th Cir.1996).
    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. Kremer, 456 U.S. at 481 n. 22. For example, this issue would arise 
if the administrative law judge adjudicating the survivor's first claim 
found that the survivor's remarriage barred her entitlement, and 
alternatively concluded that the miner did not die due to 
pneumoconiosis. In that case, the survivor could not have overturned 
the adverse finding on the cause of the miner's death because she would 
not have been able to avoid the prohibition on the eligibility of 
remarried widows. Accordingly, she could not be said to have had a full 
and fair opportunity to litigate the issue of the cause of the miner's 
death. In these circumstances, neither ordinary principles of claims 
preclusion nor Sec. 725.309 would preclude her from litigating her 
entitlement to benefits in a subsequent claim.
    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.g., where the miner has become totally 
disabled or a survivor has ended her second marriage, neither the party 
defending against the claim--the coal mine operator or the Trust Fund--
nor the claimant is entitled to rely on findings made in connection 
with the denial of an earlier claim for benefits. 64 FR 54985 (Oct. 8, 
1999). One commenter's suggestion that an administrative law judge's 
determination in the original proceeding that an X-ray is not worthy of 
credit precludes any further litigation of that issue in a subsequent 
proceeding simply reflects a misunderstanding of the tenets of issue 
preclusion. Where that finding was not essential to the original denial 
of benefits, because the ALJ ultimately denied benefits on another 
basis, or used alternative bases, issue preclusion would not prevent a 
second factfinder from making a different finding, based on his 
independent weighing of the evidence, in connection with an additional 
claim.
    (e) One comment opposes the revised version of Sec. 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. See 62 FR 3351 
(Jan. 22, 1997); see also 64 FR 54984 (Oct. 8, 1999). The provision 
requiring the denial of survivors' claims is also substantially the 
same as the former rule. Like the revised version, the former rule was 
subject to waiver just as any other affirmative defense would be under 
common law. See Clark v. Director, OWCP, 838 F.2d 197, 200 (6th Cir. 
1988) (permitting the Director to waive reliance on section 725.309). 
The provision governing additional survivors' claims has been altered 
only in order to accommodate revisions to section 725.213, which will 
explicitly permit a remarried survivor to establish her entitlement to 
benefits upon ending her marriage. Accordingly, the Department does not 
agree that it has substantially revised the applicability of the common 
law doctrine of claim preclusion under the Black Lung Benefits Act.
    (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 de novo 
weighing of the evidence relevant to the remaining elements, regardless 
of whether any of that evidence is newly submitted. The Court of 
Appeals for the Seventh Circuit discussed this issue at length in 
Peabody Coal Co. v. Spese, 117 F.3d 1001 (7th Cir. 1997) (en banc). It 
held as follows:

    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. See Astoria Fed. 
Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 107, 111 S.Ct. 2166, 
2169, 115 L.Ed.2d 96 (1991) (preclusion applies to administrative 
agency acting in judicial capacity to resolve fact issues properly 
before it); United States v. Wyatt, 102 F.3d 241, 245 n. 5 (7th Cir. 
1996), cert. denied, __ U.S. __, 117 S.Ct. 1325, 137 L.Ed.2d 486 
(1997); Waid v. Merrill Area

[[Page 79974]]

Public Schools, 91 F.3d 857, 866 (7th Cir. 1996) (state agency 
hearing). * * *
* * * * *
    [The Fourth Circuit, in Lisa Lee Mines v. Director, OWCP, 86 
F.3d 1358 (4th Cir. 1996) (en banc), cert. denied, 519 U.S. 1090 
(1997)] pointed out, correctly, that a claimant who loses on three 
possible alternate grounds has no incentive to take an appeal to 
``correct'' the agency on grounds 2 and 3, even if he thinks there 
was error, if ground 1 is unassailable. Assuming that the passage of 
time has led to a material change in ground 1 and he can demonstrate 
this to the Director, the question is whether he should be barred 
from proceeding on a new claim just because he has not also 
developed new evidence to negate grounds 2 and 3. Under the 
Director's ``one-element'' approach, as endorsed by the Fourth 
Circuit and others, * * * the answer is no. This answer is 
consistent with general principles of issue preclusion, under which 
holdings in the alternative, either of which would independently be 
sufficient to support a result, are not conclusive in subsequent 
litigation with respect to either issue standing alone. See Lisa Lee 
Mines, 86 F.3d at 1363, citing Restatement (Second) of Judgments 
Sec. 27, comment i (1982); Comair Rotron, Inc. v. Nippon Densan 
Corp., 49 F.3d 1535, 1538 (Fed. Cir. 1995) (issue on which 
preclusion is sought must have clearly been necessary to judgment); 
Baker Elec. Co-op., Inc. v. Chaske, 28 F.3d 1466, 1475 (8th Cir. 
1994); Gelb v. Royal Globe Insur. Co., 798 F.2d 38, 45 n. 6 (2d Cir. 
1986).
117 F.3d at 1008.

    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 Spese, requires that the claimant submit 
new evidence relevant only to one of the issues. If he submits new 
evidence that establishes his total disability, the factfinder must 
weigh the X-ray evidence de novo. Far from contravening accepted 
principles of issue preclusion, the Department's regulation gives those 
principles full force and effect. The commenter's suggestion, that a 
party must be bound by a credibility determination that it was unable 
to overturn on appeal, turns those principles on their head.
    (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, i.e., that the Trust Fund does not pay benefits to 
individuals who do not meet the statutory eligibility criteria. Where 
appropriate, the Department will invoke the automatic denial provision 
in order to reduce the transaction costs that the Fund would incur in 
defending a non-meritorious survivor's claim. The Department does not 
believe, however, that it is obligated to invoke claim preclusion in 
order to bar a claim in which a surviving spouse meets all of the 
conditions of entitlement and simply erred in filing a first 
application while remarried.
    (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. Id. The complete pulmonary evaluation provided by 
the Department includes difficult tests, and the Department does not 
believe that a miner would deliberately subject himself to that testing 
if he did not truly believe that he met the Act's eligibility criteria. 
Moreover, preventing a miner from filing an additional claim merely on 
the grounds that a previous additional claim was denied may result in 
the denial of benefits to individuals who meet the Act's eligibility 
requirements. Even requiring miners to wait an additional period of 
time between additional claims would involve similar risks. The average 
applicant for benefits is over 60 years old, and any delay in the 
receipt of benefits may effectively deny them the right to receive 
benefits and appropriate medical treatment. Accordingly, the Department 
does not intend to ``penalize'' individuals who file unsuccessful 
subsequent claims.
    (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 Sec. 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 de novo consideration of any 
claim filed on or after January 1, 1982, without regard to any earlier 
denials. The Department's regulation does not have that effect. It 
simply codifies the Department's former rule, as interpreted by the 
appellate courts, and provides procedures to be followed upon the 
filing of an additional claim covering later periods of alleged benefit 
entitlement. Accordingly, the Department is not authorizing the 
reopening or relitigation of claims in excess of Congressional 
authority. In addition, as the Department has previously explained, 
Congress' failure to enact legislation governing additional claims does 
not prevent the Department

[[Page 79975]]

from promulgating regulations on that subject as long as the 
regulations are issued pursuant to an appropriate grant of statutory 
authority. Ibid.
    (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. See 20 CFR 726.203(b) (1999) (insurance 
endorsement). Accordingly, the Department does not agree that the 
insurance industry is entitled to relief from the effect of revising 
Sec. 725.309.
    (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.

20 CFR 725.310

    (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 de novo adjudication of the 
existing evidence of record. The Department also revised subsection (d) 
with the stated purpose of prohibiting the recovery, by either the 
Trust Fund or a responsible operator, of benefits paid pursuant to a 
final award of benefits that is later modified. In its second notice of 
proposed rulemaking, the Department added two provisions to subsection 
(d). The first would allow the recovery of any benefits that were paid 
when the claimant was at fault in creating the overpayment. The second 
provision implemented the Department's intention to bar recovery of 
overpayments arising from modification of awards where the award was 
final before initiation of the modification proceedings. 64 FR 54985-86 
(Oct. 8, 1999). In addition, the Department proposed revising the 
evidentiary limitation in subsection (b) to correspond to similar 
changes in Sec. 725.414. Finally, the Department responded to comments 
addressing the responsibility of factfinders to reweigh the evidence of 
record on modification, and the district director's authority to 
initiate modification in responsible operator cases.
    (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 Banks v. Chicago Grain 
Trimmers Association, 390 U.S. 459 (1968), the Supreme Court reversed 
an appellate court's holding that a claimant's modification request was 
barred by res judicata, or claim preclusion. Instead, the Court held 
that the statute clearly authorized reopening compensation awards in 
order to correct factual errors. In O'Keeffe v. Aerojet-General 
Shipyards, Inc., 404 U.S. 254, 255 (1972), the Court held that a 
factfinder was authorized to grant modification under section 22 
``merely on further reflection on the evidence initially submitted.'' 
See also Betty B Coal Co. v. Director, OWCP (Stanley), 194 F.3d 491, 
497 (4th Cir. 1999) (modification procedure is extraordinarily broad, 
especially insofar as it permits the correction of mistaken factual 
findings); The Youghiogheny & Ohio Coal Co. v. Milliken, 200 F.3d 942, 
954 (6th Cir. 1999) (ALJ has the authority on modification simply to 
rethink his conclusions). One commenter also objects that the 
regulation would prohibit an administrative law judge from simply 
denying a modification request based on the claimant's failure to 
present additional evidence. In its second notice of proposed 
rulemaking, the Department observed that the Supreme Court's O'Keeffe 
decision requires this result. 64 FR 54986 (Oct. 8, 1999). Accordingly, 
the commenters' observations do not provide a basis for altering the 
Department's proposal.
    (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

[[Page 79976]]

Department does not believe it can readily identify all of the 
circumstances in which district director-initiated modification would 
be appropriate, it does not intend to limit the district director's 
discretion in the initiation of modification proceedings.
    (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 Sec. 725.414 and Sec. 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 Secs. 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 Sec. 725.408; and (2) 
documentary evidence relevant to the identity of the responsible 
operator, governed by Sec. 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. 
Sec. 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, Sec. 725.423, but the operator may not thereafter submit any 
further documentary evidence on these issues. Sec. 725.408(b)(2).
    Sections 725.414 and 725.456(b)(1) govern the remaining documentary 
evidence relevant to the liability issue, i.e., evidence relevant to 
which of the miner's former employers is the responsible operator 
according to the criteria set forth in Sec. 725.495. Under 
Sec. 725.414, an operator may submit documentary evidence to prove that 
a company that more recently employed the miner should be the 
responsible operator. This evidence must be submitted to the district 
director in accordance with a schedule to be established by the 
district director. Sec. 725.410. Additional documentary evidence may be 
submitted only upon a showing of extraordinary circumstances. 
Sec. 725.456(b)(1).
    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 Sec. 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 Sec. 22 of the 
Longshore and Harbor Workers' Compensation Act is subject to the 
limitation that reconsideration must `` `render justice under the Act.' 
'' McCord v. Cephas, 532 F.2d 1377, 1380-81 (D.C. Cir. 1976). In 
McCord, an employer declined to supply evidence and participate in the 
initial adjudication of the claimant's application for benefits under 
the Longshore and Harbor Workers' Compensation Act. After the award 
became final, the employer sought reconsideration. The D.C. Circuit 
held that although the adjudication officer had jurisdiction to 
consider the employer's request, his consideration should take the 
interests of justice into account. See also General Dynamics Corp. v. 
Director, OWCP, 673 F.2d 23, 25 (1st Cir. 1982). In order to properly 
administer the Black Lung Benefits Act in accordance with this 
expression of Congressional intent, S.Rep. No. 588, 73d Cong., 2d 
Sess., 3-4 (1934); H.R.Rep. No. 1244, 73d Cong., 2d Sess.,

[[Page 79977]]

4 (1934), the Department has balanced the desire of operators to 
request modification against the Department's interest in ensuring that 
potentially liable operators submit all of the evidence relevant to 
their employment of the miner while the claim is first pending before 
the district director. The Department believes that it is appropriate 
to prohibit an operator's ability to introduce, in a modification 
proceeding, ``new'' evidence relevant to the operator's employment of 
the miner or the operator's status as a financially capable operator.
    (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 (e.g., limiting claimants to a maximum number of 
modification requests, or no more than a certain number in a given time 
period) on a claimant's right to seek modification. Congress's 
overriding concern in enacting the Black Lung Benefits Act was to 
ensure that miners who are totally disabled due to pneumoconiosis 
arising out of coal mine employment, and the survivors of miners who 
die due to pneumoconiosis, receive compensation. Because any limitation 
on the right to file modification petitions could deny, or delay, the 
payment of compensation to eligible claimants, the Department does not 
believe that such limitations are appropriate.
    (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 Sec. 725.547(c) and new Sec. 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.

20 CFR 725.311

    (a) The Department proposed revising Sec. 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. Compare Dominion Coal Corp. v. 
Honaker, 33 F.3d 401, 404 (4th Cir. 1994) with Big Horn Coal Co. v. 
Director, OWCP, 55 F.3d 545, 550 (10th Cir. 1995). In a case in which 
the party actually received the document, notwithstanding improper 
service, the rule would commence the time period for response upon a 
party's actual receipt of the document. The Department did not address 
this regulation in its second notice of proposed rulemaking. See list 
of Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 8, 
1999).
    (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, see 43 FR 
17743-44 (April 25, 1978), the regulation contained a three-day mailing 
rule which paralleled the rule in the Federal Rules of Civil Procedure. 
Compare Fed. R. Civ. P. 6(e). In the final rule, the Department changed 
the time period to seven days ``[i]n view of the difficulties 
encountered in mail deliveries in many rural coal mining areas.'' 43 FR 
36786 (Aug. 18, 1978). The Department's experience in administering the 
black lung benefits program, however, has suggested that the grace 
period contained in the former regulation was a source of confusion for 
the parties as well as for the district directors. For example, it 
could be argued that the former regulation added an additional seven 
days to the one-year time limit for filing a modification petition, or 
the 30-day time limit for filing a response to a proposed decision and 
order. The federal rule has engendered similar litigation. See, e.g., 
FHC Equities v. MBL Life Assurance Corp., 188 F.3d 678, 681-82 (6th 
Cir. 1997) (rule does not apply to time periods that begin with entry 
of an order or judgment).
    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 Sec. 725.410, 
which will contain the district director's designation of the 
responsible operator, and a proposed decision and order issued under 
Sec. 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

[[Page 79978]]

ensures that all parties to a claim, including claimants who are not 
represented by an attorney, are able to ascertain their response time 
from the date of a document.
    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 Sec. 725.407(b) notification of potentially liable operator, 
Sec. 725.409(b) (denial by reason of abandonment); Sec. 725.410(c) 
(evidentiary submission schedule); Sec. 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. See Sec. 725.409(b). The Department believes that 
failure to receive the notice of conference would constitute an 
adequate explanation for a claimant's failure to appear. Similarly, any 
employer against whom the district director has imposed sanctions for 
an unexcused failure to appear at an informal conference may request 
reconsideration based on its failure to receive the required notice. 
Obviously, district directors may obviate the need for disputes over 
whether a party received the notice by sending it via certified mail.
    (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 service of the document rather than the 
date of actual receipt when a document is served in violation of the 
certified mail requirement. Subsection (d), however, states that the 
response time ``shall commence on the date the document was received.'' 
The provision is therefore clear that only actual receipt of a document 
served in violation of a certified mail requirement commences the 
recipient's time for response.
    (f) No other comments concerning this section were received, and no 
changes have been made in it.

Subpart D

20 CFR 725.351

    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. See 62 FR 3340-41 (Jan. 22, 1997). In its second notice of 
proposed rulemaking, the Department proposed deleting the requirement 
in subsection (a)(3) that a district director must seek the approval of 
the Director, OWCP, before issuing a subpoena to compel the production 
of documents. 64 FR 54986-87 (Oct. 8, 1999). No comments were received 
concerning this section, and no changes have been made in it.

20 CFR 725.362

    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. See list of Changes in the Department's Second 
Proposal, 64 FR 54971 (Oct. 8, 1999). No comments were received 
concerning this section, and no changes have been made in it.

20 CFR 725.365

    The Department received one comment relevant to Sec. 725.365. This 
section was not open for comment; it was repromulgated without 
alteration for the convenience of the reader. See 62 FR 3341 (Jan. 22, 
1997); 64 FR 54970 (Oct. 8, 1999). Therefore no changes are being made 
in it.

20 CFR 725.366

    The Department has received one comment relevant to Sec. 725.366. 
This

[[Page 79979]]

section had only technical revisions made to it and was not open for 
comment, see 62 FR 3341 (Jan. 22, 1997); 64 FR 54970 (Oct. 8, 1999). 
Therefore no changes are being made in it.

20 CFR 725.367

    (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 Secs. 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 Sec. 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 Sec. 725.415 or 
Sec. 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 Sec. 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 Kemp v. 
Newport News Shipbuilding and Dry Dock Co., 805 F.2d 1152 (4th Cir. 
1986), the court held that the LHWCA is ambiguous on the issue of 
whether an employer may be liable for attorneys' fees incurred by a 
claimant before the employer has controverted the claimant's 
entitlement. 805 F.2d at 1153. Instead, the statute provides only that 
an employer will be liable for attorneys' fees after it contests the 
applicant's entitlement, leaving unresolved the starting point of such 
liability. The court recently reiterated its interpretation of LHWCA 
Sec. 28 in Clinchfield Coal Co. v. Harris, 149 F.3d 307, 310-11 (4th 
Cir. 1998). In resolving statutory ambiguity through the regulatory 
process, the Department is entitled to select any reasonable 
interpretation that is consistent with Congressional intent. Chevron 
U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-3 
(1984).
    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

[[Page 79980]]

stages of claim development, and the Department believes that claimants 
should have comparable aid. Accordingly, the Department believes that 
it is justified in adopting a new interpretation as to the starting 
point of the employer's or the fund's liability for attorneys' fees.
    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, see 30 U.S.C. 932(a). It has 
not done so in this case, however. Instead, the Department's regulation 
does contemplate that a claimant may be liable for an attorney's fee. 
20 CFR 725.365. For example, in any case in which the liable party, 
either the Trust Fund or the operator, accepts the claimant's 
entitlement prior to the expiration of the 30-day period in 
Sec. 725.412(b) but the claimant has nevertheless retained counsel who 
has performed services in connection with the claim, the prerequisite 
for shifting fee liability--the controversion of entitlement--has not 
been met. A similar case may arise where the operator initially 
designated the responsible operator by the district director fails to 
accept the claimant's eligibility, but the finally designated 
responsible operator does accept the claimant's eligibility. In such a 
case, the responsible operator would not be liable for the payment of 
the claimant's attorney's fee. Because the overwhelming majority of 
coal mine operators contest claimant eligibility at this stage, the 
Department does not expect this kind of case to arise often. In either 
case, however, the claimant remains responsible for any reasonable fees 
approved by the district director for necessary work performed in 
obtaining the award. Accordingly, the Department's revised attorney fee 
regulation does not violate any statutory command.
    (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, Hearing 
on Proposed Changes to the Black Lung Program Regulations, (June 19, 
1997), p. 22 (testimony of Cecil Roberts); p. 168 (testimony of John 
Cline); pp. 238-239, 246 (testimony of Grant Crandall). The Department 
also agrees that the rule should not be applied retroactively, and has 
changed Sec. 725.2 accordingly.
    (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 Sec. 725.366. Because Sec. 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), see Workman v. Director, OWCP, 6 Black Lung Rep. (MB) 1-1281, 
1-1283 (Ben Rev. Bd. 1984), and the Department believes that 
Secs. 725.366 and 725.367 require the same result. The prohibition in 
Sec. 725.366 on fees for time spent filling out a fee application 
presents an entirely different question from whether it is reasonable 
to require an employer who unsuccessfully challenges that application 
to pay a fee for the necessary additional time that the attorney was 
required to spend defending his fee request. Because the Department 
believes that the current regulations permit an award of attorneys' 
fees in the latter case, it is not necessary to change the regulation.
    (e) No other comments were received concerning this section, and no 
changes have been made in it.

[[Page 79981]]

Subpart E

20 CFR 725.403

    The Department made only technical revisions to Sec. 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 Sec. 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 
Sec. 725.403, and specifically invited comment on its removal. The 
Department did not receive any comments on the proposed removal of 
Sec. 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 Sec. 725.403 may consult 
20 CFR 725.403 (1999).

20 CFR 725.404

    The Department received one comment relevant to Sec. 725.404. The 
Department made only technical revisions to this section, and the 
regulation was not open for comment; see 62 FR 3340-41 (Jan. 22, 1997); 
64 FR 54970 (Oct. 8, 1999). Therefore no changes are being made in it.

20 CFR 725.405

    (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 Sec. 725.405 in its second notice of proposed rulemaking. See 
list of Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 
8, 1999).
    (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 Sec. 725.404. In any 
event, subsection (d) of Sec. 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, Sec. 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, Sec. 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. Sec. 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. Sec. 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 Sec. 725.202 to Sec. 725.101(a)(19). 
This recommendation is rejected. While both sections define ``miner,'' 
Sec. 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.

20 CFR 725.406

    (a) In its first notice of proposed rulemaking, the Department 
proposed revising Sec. 725.406 to address the relationship between the 
evidentiary limitations contained in Sec. 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, Sec. 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 Sec. 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

[[Page 79982]]

thereafter to the submission of only one additional medical report. 
Accordingly, the Department proposed the creation of a list of 
physicians, authorized by the Department to perform complete pulmonary 
evaluations. Miners who applied for benefits would be required to 
select a physician from that list, but could choose any listed doctor 
either in their state of residence or from a contiguous state. The 
resulting evaluation would not be considered one of the two medical 
reports that a claimant was entitled to submit in support of his claim 
for benefits.
    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, Sec. 725.406(a)-(c). 
Under revised Sec. 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

[[Page 79983]]

his application for benefits. The Department believes that it would be 
inappropriate to allow a miner to select a physician with whom he has 
an ongoing treatment relationship to perform the complete pulmonary 
evaluation paid for by the Department. Although the Department does not 
mean to suggest that a physician would be unable to provide an 
impartial assessment of the miner's respiratory condition in such a 
case, his opinion could present at least the appearance of a conflict 
of interest. In order to ensure the credibility of the Department's 
pulmonary evaluation, the Department has adopted a bright-line test, in 
the form of a one-year cutoff, that will be easily understood by miners 
and their physicians. The Department believes that a physician's 
examination or treatment of the miner prior to the one-year period 
preceding the miner's application should not disqualify that physician 
from performing the complete pulmonary evaluation. The Department 
reserves the right to delete a physician from the list if he is unable 
to provide an impartial opinion.
    (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. See, e.g., Lane Hollow Coal 
Co. v. Director, OWCP, 137 F.3d 799, 804-5 (4th Cir. 1998); Penn 
Allegheny Coal Co. v. Mercatell, 878 F.2d 106, 109-110 (3rd Cir. 1989); 
Robbins v. Jim Walter Resources, Inc., 898 F.2d 1478, 1482 (11th Cir. 
1990); Wetherill v. Director, OWCP, 812 F.2d 376, 382 (7th Cir. 1987); 
Kaiser Steel Corp. v. Director, OWCP, 757 F.2d 1078, 1083 (10th Cir. 
1985). The Department reserves the right to determine appropriate 
exclusions from the list on a case-by-case basis.
    (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, see also 
64 FR 54989 (Oct. 8, 1999), but does not believe that the regulation 
must reflect this intention. The regulation itself does state that a 
report from the claimant's treating physician, based on the 
Department's clinical testing, will count as one of the two reports the 
claimant is entitled to submit into evidence under Sec. 725.414, 
Sec. 725.406(d).
    (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, 
Sec. 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 Sec. 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, Secs. 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.

20 CFR 725.407

    (a) In its first notice of proposed rulemaking, the Department 
proposed moving subsections (a) and (c) of 20

[[Page 79984]]

CFR 725.407 (1999) to Sec. 725.406 and eliminating subsection (b). See 
preamble to Secs. 725.407 and 725.408, 62 FR 3355 (Jan. 22, 1997). In 
their place, the Department proposed a new regulation governing the 
identification and notification of ``potentially liable operators,'' a 
subset of the miner's former employers that might be liable for a given 
claim. Depending on the complexity of the miner's employment history, 
section 725.407 would permit the district director initially to notify 
one or more potentially liable operators, and their insurers, of the 
existence of a claim and would also allow the notification of 
additional potentially liable operators at any time prior to referral 
of the case to the Office of Administrative Law Judges. The proposal 
placed no time limit on the notification of an operator if that 
operator fraudulently concealed its identity as an employer of the 
miner.
    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 Sec. 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 Sec. 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 
Sec. 725.413 in the first sentence of subsection (d) with a reference 
to Sec. 725.410(a)(3). This change reflects a move to Sec. 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 Sec. 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. See 
Sec. 725.418(d) and explanation accompanying Sec. 725.414. Thus, only 
one potentially liable operator will incur costs in the adjudication of 
each claim for benefits beyond the district director level.
    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. See Sec. 725.408. In addition, 
in the small number of cases in which the Department does not name the 
miner's most recent employer as the responsible operator, the earlier 
employer that has been designated the responsible operator may incur 
additional costs in attempting to establish that a more recent employer 
should be held liable for the payment of benefits. In comparison to the 
costs of developing medical evidence, however, the Department believes 
that the additional costs imposed by the regulations will not be 
significant.
    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

[[Page 79985]]

current level of $6,314 to $12,000 under the new regulations. 
Rulemaking Record, Exhibit 89-37, Appendix A at 16. It is this 
analysis, apparently, that gives rise to the statement that the second 
notice of proposed rulemaking will result in an additional $6,000 in 
costs per claim. The economic analysis contains no explanation for its 
assumption that defense costs will double under the new regulations. 
Because the Department's regulations will actually reduce the quantity 
of medical evidence a party may submit from former levels, eliminate 
the need to expend money on developing medical evidence in the majority 
of cases, and eliminate potentially liable operators other than the 
designated responsible operator as parties to each case beyond the 
district director level, the Department believes that the assumption is 
incorrect.
    (e) No other comments have been received concerning this 
regulation.

20 CFR 725.408

    (a) The Department proposed eliminating 20 CFR Sec. 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, 
Sec. 725.408 required any operator notified of its liability under 
Sec. 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 Sec. 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 Sec. 725.418(d) and explanation accompanying Sec. 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, Sec. 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

[[Page 79986]]

Earnings, it will provide a copy to the potentially liable operator. 
The Department's receipt of that record, however, depends on the speed 
with which the Department's request is processed by the Social Security 
Administration. It will not be possible in all cases to supply that 
record to potentially liable operators at the time they receive 
notification. The initial information supplied to the operator should 
nevertheless be sufficient to allow it to accept or reject its 
notification as a potentially liable operator. If the operator needs 
additional time to respond to that initial notification, it may request 
an extension of time for good cause shown pursuant to Sec. 725.423. 
Operators are not limited to a single extension of time in which to 
obtain this evidence, although a district director may reasonably 
expect the operator to demonstrate its diligence prior to requesting an 
additional extension.
    (e) Several comments have misconstrued the requirements of 
Sec. 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--i.e., that operators have better access to the 
claimant's entire work record--is flawed. Section 725.408, however, 
does not govern the introduction of evidence relevant to the liability 
of other operators that employed the miner. Instead, the evidence 
required by Sec. 725.408 is limited to evidence relevant to the 
notified operator's own employment of the miner and that operator's 
financial status. Documentary evidence relevant to another operator's 
liability is required later pursuant to the schedule established 
pursuant to Sec. 725.410(b), and in accordance with the limitations set 
forth in Sec. 725.414(b). Accordingly, the Department will discuss 
these comments under Secs. 725.410 and 725.414.
    (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, see, e.g., 
Martinez v. Clayton Coal Co. et al., 10 Black Lung Rep. (MB) 1-24 (Ben. 
Rev. Bd. 1987) (involving three coal mine operators), and did not 
receive any reports that the operators encountered problems in 
obtaining representation.
    (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 Sec. 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 Sec. 725.410.
    (h) One comment argues that the regulation creates an impermissible 
presumption and thus violates the Supreme Court's decision in Director, 
OWCP v. Greenwich Collieries, 512 U.S. 267 (1994). Section 725.408 does 
not create any presumptions. To the extent that the commenter objects 
to any other presumption used to establish the identity of the 
responsible operator liable for the payment of benefits, the Department 
discussed similar objections in its second notice of proposed 
rulemaking, see 64 FR 54972-74 (Oct. 8, 1999), and its response to 
comments under Sec. 725.495 of Subpart G of this part.
    (i) One comment states the response time given potentially liable 
operators under Sec. 725.408 should mirror the time period given 
claimants to submit information in Sec. 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

[[Page 79987]]

matters of public record. If the information submitted by the claimant 
is insufficient, the district director must give the claimant a 
specified reasonable period of time within which to provide the 
information. Claimants applying for benefits have a positive incentive 
to supply this information; without it, the district director is unable 
to complete processing of the case, and any award of benefits will 
necessarily be delayed. In contrast, Sec. 725.408 seeks information 
from the claimant's former employers, who have no similar incentive to 
provide information to the Department. The regulation thus establishes 
a presumptively reasonable period of time within which an employer must 
provide that information, and allows the employer to seek an extension 
of that period for good cause. Because Secs. 725.404 and 725.408 affect 
different parties with different incentives, and serve different 
purposes, the Department does not believe that the time periods need be 
made identical.
    (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.

20 CFR 725.409

    (a) The Department proposed revising Sec. 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. Wellmore Coal Co. v. Stiltner, 81 F.3d 490, 497 (4th Cir. 
1996). The Department proposed to add subsection (a)(4) to the 
regulation to clarify that authority. In addition, the Department 
proposed to clarify the procedures for denying claims by reason of 
abandonment. 62 FR 3356 (Jan. 22, 1997). In the second notice of 
proposed rulemaking, the Department explained that, because of the 
severe effect of a dismissal, it had proposed revising Sec. 725.416, 
the regulation governing informal conferences, to ensure that the 
parties to a claim are provided with the district director's reasons 
for holding an informal conference. Thus, under revised Sec. 725.416, 
the district director is required to explain why he believes an 
informal conference will assist in the voluntary resolution of the 
issues in the case. The Department also rejected a suggestion that an 
administrative law judge should be permitted to hear the merits of 
claimant's entitlement in a case in which the claimant has requested a 
hearing as to the district director's dismissal of the claim, and the 
ALJ finds error in the district director's denial of the claim by 
reason of abandonment. In response to this comment, the Department 
added a sentence to subsection (c) of the regulation, to clarify its 
intent that an administrative law judge must remand a case for further 
administrative processing if he finds the district director erred in 
denying the claim. Finally, the Department rejected a comment that the 
proposal would increase the number of additional claims filed.
    (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. Sec. 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 Sec. 725.416.
    (f) No other comments were received concerning this section.

20 CFR 725.410-725.413

    (a) In its first notice of proposed rulemaking, the Department 
proposed new Secs. 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

[[Page 79988]]

proposed regulations provided for concurrent investigations into the 
medical issues surrounding the claimant's eligibility and the identity 
of the operator liable for the payment of any benefits. Under the 
proposed regulations, those investigations would have culminated in an 
initial finding containing the district director's preliminary 
resolution of both issues. If any party indicated dissatisfaction with 
the initial finding, the district director would have proceeded to an 
initial adjudication of the claim and would have established a schedule 
for the submission of evidence. The proposed regulations included a 
number of significant changes. For example, the Department stated that 
it would not honor hearing requests made before the conclusion of 
administrative proceedings. In addition, the Department provided 
claimants with up to one year to respond to an initial finding.
    In its second notice of proposed rulemaking, the Department did not 
discuss Secs. 725.410, 725.412, or 725.413. See list of Changes in the 
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999). The 
Department did discuss Sec. 725.411, although it did not propose any 
additional changes to that regulation. Instead, the Department advised 
all interested parties that it intended to substantially revise the 
documents used in connection with the issuance of an initial finding 
under Sec. 725.411. The Department noted its commitment to improve the 
quality of the information provided to parties to the adjudication of 
black lung claims. The Department hoped that improved communication 
would make district office claims processing easier to understand and 
would also give claimants a clearer picture of the medical evidence 
developed in connection with their claims. It was hoped that with 
better information, claimants would be able to make more informed 
decisions as to how to proceed. In response to a number of comments, 
the Department stated that a hearing request filed within one year of 
the initial finding would constitute a request for further adjudication 
of the claim. The Department also discussed its decision not to honor 
premature hearing requests, i.e., requests for hearing made before the 
district director issued a proposed decision and order. Additionally, 
the Department rejected the suggestion that the one-year response time 
to an initial finding impermissibly extended a claimant's modification 
rights. Finally, the Department explained its decision not to permit an 
extension under Sec. 725.423 of the one-year time period.
    (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 Sec. 725.405, including 
the complete pulmonary evaluation authorized by Sec. 725.406, and the 
submission of evidence relevant to the employment of the miner by 
potentially liable operators notified pursuant to Sec. 725.407, the 
district director will issue a schedule for the submission of 
additional evidence. Sec. 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, Sec. 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, see Sec. 725.419.
    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 
Sec. 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 
Sec. 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

[[Page 79989]]

to make the responsible operator liable for a reasonable attorney's fee 
if the claimant successfully prosecutes his claim.
    (iii) The Department has also deleted the language in proposed 
Sec. 725.411 which would have rendered invalid premature hearing 
requests. Accordingly, the Department will continue its current 
practice of following the decision in Plesh v. Director, OWCP, 71 F.3d 
103, 111 (3d Cir. 1995). Under that decision, the Department may 
complete its administrative processing of the claim, but must forward a 
claim for a hearing at the conclusion of that processing if the 
claimant has previously filed a request for a hearing and that request 
has not been withdrawn. The Department has revised Sec. 725.418 to 
accomplish this result and to extend similar treatment to operators. 
See response to comments under Sec. 725.418.
    (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 Sec. 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 
Sec. 725.413(c)(2) to Sec. 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 Secs. 725.414 and 
725.456, and has increased the opportunities for submitting such 
evidence outside the periods established by Sec. 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 Sec. 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, Sec. 725.407(d). The remainder of the commenter's 
objections pertain more properly to Sec. 725.414, and are addressed 
under that regulation.
    (f) In light of the extensive changes to Secs. 725.410-.413, none 
of the other comments received concerning the proposed revisions to 
these regulations remain relevant.

20 CFR 725.414

    (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 Woodward v. Director, 
OWCP, 991 F.2d 314, 321 (6th Cir. 1993). In that decision, the court 
noted the superior financial resources of some parties allowed the 
development of a greater quantity of evidence with the result that the 
``truth-seeking function of the administrative process is skewed and 
directly undermined.'' 991 F.2d at 321. 62 FR 3356-61 (Jan. 22, 1997). 
In cases in which the Department named more than one potentially liable 
operator as a party to the claim, the proposal delegated responsibility 
for the development of documentary medical evidence to the responsible 
operator designated by the district director. Other operators would be 
permitted to submit documentary medical evidence, up to the limit of 
two medical evaluations per side, only by showing that the designated 
responsible operator had not undertaken a full development of the 
evidence and that, without it, the potentially liable operator was 
unable to secure a full and fair litigation of the claimant's 
eligibility.
    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

[[Page 79990]]

better evidentiary record on which to adjudicate a claim. The proposal 
would have required parties to identify all of their witnesses while a 
case was pending before the district director. Finally, the Department 
explained that both proposed revisions were permissible exercises of 
the broad regulatory authority granted the Department under the Black 
Lung Benefits Act.
    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. See preamble to Sec. 725.456. The Department did 
not revise its proposal with respect to documentary evidence relevant 
to the issue of operator liability, however. Any such evidence that was 
not submitted to the district director could be submitted to the 
administrative law judge only upon a showing of extraordinary 
circumstances. The Department observed that this proposal represented a 
weighing of the claimant's interest in the prompt adjudication of his 
entitlement against the interest of the Department in protecting the 
Black Lung Disability Trust Fund from unwarranted liability. Under the 
Department's proposal, the Director, OWCP, would be unable to have a 
case remanded to the district director for the development of 
additional evidence as to operator liability once a case was referred 
to the Office of Administrative Law Judges for an adjudication of the 
merits. This provision helped to ensure the prompt adjudication of the 
claimant's entitlement. The procedure also subjected the Trust Fund to 
the risk, however, that a district director would not name the correct 
operator as a party to the claim before the case was referred to OALJ. 
Such a risk could be justified only if the district director was able 
to examine all of the documentary evidence relevant to the issue of 
operator liability.
    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. See explanation accompanying 
Secs. 725.415, 725.416, 725.417, 725.418, and 725.421.
    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

[[Page 79991]]

that a denied claimant files a subsequent claim pursuant to 
Sec. 725.309, of course, the Department's ability to identify another 
operator would be limited only by the principles of issue preclusion. 
For example, where the operator designated as the responsible operator 
by the district director in a prior claim is no longer financially 
capable of paying benefits, the district director may designate a 
different responsible operator. In such a case, where the claimant will 
have to relitigate his entitlement anyway, the district director should 
be permitted to reconsider his designation of the responsible operator 
liable for the payment of the claimant's benefits.
    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 Sec. 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 Sec. 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, Sec. 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, Sec. 725.415(b). The Department has revised 
Sec. 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 
Secs. 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 
Sec. 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, see paragraph (a), above, the Department expects that parties 
generally will not undertake the development of medical evidence until 
the case is pending before the administrative law judge. Certainly, if 
the designated responsible operator believes itself not to be liable 
for a given claim, it might defer the development of medical evidence 
while developing evidence relevant to liability. Accordingly, in the 
overwhelming majority of cases, there will be no evidence that the 
district director will be required to exclude from the record. The 
Department recognizes, however, the theoretical possibility that a 
claimant may have to undergo additional physical examination and 
testing. In the example discussed above, if ABC Trucking had submitted 
the result of its examination and pulmonary testing, XYZ could, if it 
chose not to use ABC's evidence, require the claimant to submit to an 
additional examination. The Department does not believe that this is a 
likely scenario, however, even in cases in which the district director 
changes his designation of the responsible operator.
    (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 
Sec. 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 
Sec. 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

[[Page 79992]]

prohibited the introduction of evidence before an administrative law 
judge which was obtained by a party while the claim was pending before 
a district director but which was withheld from the district director 
or any other party. Another comment states that the subsection is 
meaningless since it suggests that withheld evidence must be admitted 
upon the request of a party, even absent a showing of extraordinary 
circumstances. The Department agrees that this provision should be 
deleted. See preamble to Sec. 725.456, paragraph (b). Accordingly, 
subsection (e) has been deleted. A corresponding change has been made 
to Sec. 725.456.
    (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, 
Sec. 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 Sec. 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 Sec. 718.104 is entitled to have the physicians who 
perform those examinations administer appropriate testing, see 
Sec. 718.104(a)(6). Accordingly, the Department has not changed the 
regulation in this respect.
    (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 
Sec. 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 Sec. 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 Sec. 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, Secs. 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. See 62 FR 
3359 (Jan. 22, 1997). In addition, the Department expressed its 
preference for a bright-line test that allows adjudication officers to 
resolve issues of eligibility based on the quality of the medical 
evidence developed by the parties rather than merely the quantity of 
evidence that parties with superior financial resources may be able to 
submit. The Department continues to believe that the adjudications that 
will take place under these revised regulations will result in fairer, 
more credible evaluations of black lung claims than the former system 
permitted.
    (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 
Sec. 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 
Sec. 725.406 evaluation, the commenter argues that

[[Page 79993]]

the claimant could in fact travel much farther than the operator is 
permitted to send him in obtaining its evidence. The commenter's 
emphasis on a ``minimum'' number of medical reports is puzzling; since 
parties on both sides remain free not to submit any medical evidence, 
the Department believes that the commenter refers to the maximum 
permissible number of reports and tests. That limitation is equally 
balanced. Unless the administrative law judge finds that good cause 
justifies the admission of additional evidence, each side may submit up 
to two medical reports, two chest X-ray interpretations, the results of 
two pulmonary function studies and arterial blood gas studies, one 
report of each biopsy, and one autopsy report. The Department believes 
that the limitation applicable to each type of evidence per side 
represents an inherently fair way of ensuring that the adjudication 
officer's focus is on the quality of the evidence submitted rather than 
on its quantity. To the extent that the comment refers to the 
claimant's ability to select the physician to perform the complete 
pulmonary evaluation from among those on the Department's list, the 
Department has responded to that comment under Sec. 725.406. See 
preamble to Sec. 725.406, paragraph (b).
    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 ad hoc determinations of individual 
adjudication officers. 62 FR 3357 (Jan. 22, 1997). Where the 
circumstances compel a determination of whether additional medical 
evidence should be allowed, i.e., upon an allegation of good cause for 
submitting medical evidence in excess of the evidentiary limitation, 
that determination will be made by administrative law judges. The need 
for such a determination in some cases, however, does not obviate the 
more compelling need for a general rule limiting the amount of medical 
evidence that parties may submit in black lung benefits claims. The 
Department believes that it should be incumbent on the party seeking to 
exceed that limit to demonstrate good cause for submitting additional 
evidence.
    (j) One comment argues that the Department should include the 
``good cause'' exception in Sec. 725.414 as well as in Sec. 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 Sec. 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 Sec. 725.414. In 
any event, because any finding on this issue by the district director 
would be subject to de novo review by an administrative law judge, the 
Department does not believe that the absence of an explicitly stated 
``good cause'' exception while a case is pending before the district 
director will impair the parties' development of evidence.
    (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 Sec. 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 Sec. 725.309. The 
Department does not agree that a bare claim of ``regression'' should 
entitle a coal mine operator to exceed the Sec. 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

[[Page 79994]]

Harbor Workers' Compensation Act, and the Administrative Procedure Act. 
Under the regulations, if an operator is dismissed by the district 
director, and is not reinstated before a case is referred to the Office 
of Administrative Law Judges, it may not be held liable for benefits. 
Such an operator will therefore not need to defend itself. If the 
district director dismisses an operator and later realizes that he did 
so incorrectly, he may reinstate that operator but must provide it with 
an opportunity, under Sec. 725.410, to develop additional evidence. 
Consequently, the Department does not agree that the regulations limit 
the rights of dismissed operators.
    (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 Sec. 725.457, governing the use of 
witnesses before an administrative law judge. See preamble to 
Sec. 725.457, paragraph (b).
    (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.

20 CFR 725.415

    (a) In its first notice of proposed rulemaking, the Department 
revised Sec. 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 Sec. 725.415 in its second notice of proposed 
rulemaking. See list of Changes in the Department's Second Proposal, 64 
FR 54971 (Oct. 8, 1999).
    (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 Sec. 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 Sec. 725.414.
    (c) The Department has replaced the reference to Sec. 725.413(c)(2) 
with a reference to Sec. 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 
Sec. 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 Sec. 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.

20 CFR 725.416

    (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.

[[Page 79995]]

Although the Department declined to eliminate conferences, it proposed 
revising subsection (b) to require the district director to articulate 
specific reasons for holding one. In the absence of such a statement, 
the district director would be prohibited from imposing sanctions for a 
party's failure to appear. In addition, in order to reduce parties' 
costs, the Department proposed to recognize the current practice of 
allowing parties to participate in informal conferences by telephone. 
64 FR 54996 (Oct. 8, 1999).
    (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 Sec. 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 Sec. 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 
Sec. 725.413(c)(2) in subsection (a) with a reference to 
Sec. 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. See Sec. 725.417.
    The Department has made a second major change to Sec. 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 Sec. 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 de novo adjudication. 
Consequently, the district director's inability to conduct the informal 
conference under oath, and to have the conference transcribed, will not 
affect the substantive rights of any party.
    (d) No other comments have been received concerning this section.

20 CFR 725.417

    (a) In its first notice of proposed rulemaking, the Department 
proposed revising subsection (b) to incorporate the limitations on 
documentary evidence contained in Sec. 725.414. 62 FR 3361 (Jan. 22, 
1997). The Department did not discuss Sec. 725.417 in its second notice 
of proposed rulemaking. See list of Changes in the Department's Second 
Proposal, 64 FR 54971 (Oct. 8, 1999).
    (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

[[Page 79996]]

notification of potential operator liability under Sec. 725.407 and/or 
another schedule for the submission of additional evidence under 
Sec. 725.410.
    (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 Sec. 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 Sec. 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 Sec. 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, 
Sec. 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 
Sec. 725.414.
    (f) One comment argues that the regulation is questionable in light 
of the changes made to Sec. 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.

20 CFR 725.418

    (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 Sec. 725.418 
in its second notice of proposed rulemaking. See list of Changes in the 
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999).
    (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 Sec. 725.407, and thus given the 
opportunity to submit evidence under Sec. 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 Sec. 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. See preamble to Sec. 725.416. In its place, the Department 
has added a reference to the 20-day time period provided by 
Sec. 725.417(c) within which the district director must issue a 
proposed decision and order. In addition, the Department has replaced 
the reference to Sec. 725.413(c)(2) with a reference to 725.410(b) in 
order to reflect changes to those regulations. The Department has 
deleted the words ``to be'' in the first sentence of subsection (a) as 
unnecessary, and has revised the last sentence of subsection (a) to 
clarify the meaning of the regulation. The Department has also revised 
subsection (b) to clarify that the proposed decision and order is the 
document that must be served on the parties by certified mail.
    (d) A number of comments objected to the Department's proposed 
revision of Sec. 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. See 62 FR 3356 (Jan. 
22, 1997). The Department believes that its amended procedures in 
Secs. 725.410 through 725.412, 725.416--725.417, will eliminate much of 
the confusion that has led parties to file hearing requests before the 
conclusion of administrative processing. Whereas the Department's 
original proposal authorized the district director to issue an initial 
finding, a memorandum of conference, and a proposed decision and order, 
the revised regulations provide for the issuance of only one decisional 
document in most cases: A proposed decision and order. The Department 
does agree, however, that it should honor any hearing request that is 
filed by a party even if it is filed before the conclusion of a 
district director's processing. Accordingly, the Department has added 
subsection (c) to require that the proposed decision and order apprise 
parties of their right to a hearing. Where a party has previously filed 
a hearing request, and can reasonably be said to be aggrieved by the 
proposed decision and order, the district director will inform the 
party that the case will be referred to the Office of Administrative 
Law Judges unless the party revokes its previous request. In the case 
of a claimant who has previously requested a hearing, the district 
director will forward the case if he has denied benefits. In the case 
of an operator who has previously requested a hearing on either the 
claimant's eligibility or its liability for benefits, the district 
director will forward the case if he has awarded benefits.
    (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

[[Page 79997]]

dissatisfaction with the issuance of a proposed decision and order 
calling it an unnecessary procedural step. The issuance of this 
document, however, is the logical culmination of the claims 
adjudication process at the district director level. Under the revised 
procedures adopted by the Department, it will serve as the district 
director's only attempted resolution of the issues of claimant 
eligibility and operator liability. The proposed decision and order 
thus serves either as a final disposition of the claim if the parties 
accept the decision, or as the conclusion of the initial stage of 
adjudication if a party aggrieved by the result intends to pursue the 
case to the hearing stage. The Department therefore rejects the 
suggestion that a proposed decision and order is unnecessary.
    (f) No other comments were received concerning this section.

20 CFR 725.419

    The Department received two comments relevant to Sec. 725.419. This 
section was not open for comment; only technical changes were made to 
it. See 62 FR 3340-41 (Jan. 22, 1997); 64 FR 54970 (Oct. 8, 1999). 
Therefore no changes are being made in it.

20 CFR 725.421

    (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 Sec. 725.421 in its second notice of proposed rulemaking. See 
list of Proposed Changes in the Department's Second Proposal, 64 FR 
54971 (Oct. 8, 1999).
    (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 Sec. 725.407 as well as 
its designation as the responsible operator pursuant to Sec. 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. See 
explanation accompanying Secs. 725.414, 725.415. All evidence relevant 
to the issue of operator liability shall be made a part of the record.
    (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.

20 CFR 725.422

    The Department received several comments relevant to Sec. 725.422. 
This section was not open for comment; it was repromulgated without 
alteration for the convenience of the reader; see 62 FR 3341 (Jan. 22, 
1997); 64 FR 54971 (Oct. 8, 1999). Therefore, no changes are being made 
in it.

20 CFR 725.423

    (a) In its first notice of proposed rulemaking, the Department 
proposed the addition of Sec. 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 Sec. 725.411(a)(1)(i) 
governing a claimant's response to an unfavorable initial finding and 
the other in Sec. 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 Sec. 725.423 in its 
second notice of proposed rulemaking. See list of Proposed Changes in 
the Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999).
    (b) The Department has eliminated the reference in Sec. 725.423 to 
the time period set forth in Sec. 725.411(a)(1) because that time 
period has been eliminated from the regulations. See preamble to 
Secs. 725.410-.413.
    (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.'' Jordan v. Director, OWCP, 892 F.2d 482, 486 
(6th Cir. 1989). Strict adherence to clearly delineated time frames for 
taking action promotes ``a just, efficient and final resolution'' of 
claims. 892 F.2d at 487. Any party, however, may ask for additional 
time to act. The Department believes a requirement that the extension 
be sought before the time for acting elapses is reasonable. See 
generally Fetter v. Peabody Coal Co., 6 Black Lung Rep. 1-1173, 1-1175 
(1984). Each party has notice of when some action must be taken during 
the adjudication process. Even if the party cannot complete the action 
itself, it may at least complete the request for additional time. 
Submitting a timely request for an extension is not an onerous burden.
    (e) One comment recommends including proposed Sec. 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 Secs. 725.410-.413 have eliminated the time period in 
Sec. 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 
Sec. 725.310 if that request is not filed before the expiration of the 
one-year

[[Page 79998]]

time period. By its terms, section 725.423 governs the extension of 
time periods in subpart E of part 725. It thus does not govern section 
725.310, which is located in subpart C. The Department does not believe 
that a catchall provision for the entire part 725 is appropriate, and, 
in the absence of such a provision, believes that Sec. 725.423 should 
not include a reference to any regulations outside of subpart E.
    (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 
Sec. 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 Sec. 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 Sec. 725.419, 20 CFR 725.419 (1999), has been 
interpreted to be jurisdictional, Freeman United Coal Mining Co v. 
Benefits Review Board, 942 F.2d 415, 422 (7th Cir. 1991), and 
Sec. 725.423 simply recognizes that interpretation. Contrary to the 
commenter's suggestion, assigning finality to a district director's 
proposed decision and order awarding benefits in the absence of a 
timely objection by the designated responsible operator violates no 
provision in the Administrative Procedure Act or the Black Lung 
Benefits Act. Nothing in either statute requires the Department to give 
effect to a party's late request for a hearing following the conclusion 
of the district director's administrative proceedings.
    (h) No other comments were received concerning this section.

Subpart F

20 CFR 725.452

    (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. See list of Changes in the 
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999).
    (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 Robbins v. Cyprus Cumberland 
Coal Co., 146 F.3d 425, 430 (6th Cir. 1998), the Sixth Circuit 
recognized the existence of such a right in a modification proceeding. 
See also Cunningham v. Island Creek Coal Co., 144 F.3d 388, 389-90 (6th 
Cir. 1998); Pyro Mining Co. v. Slaton, 879 F.2d 187, 190 (6th Cir. 
1989). The Robbins court explained several reasons for requiring an in-
person hearing:

    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.

146 F.3d at 429. The in-person hearing also allows the parties to offer 
lay testimony on such issues as the miner's employment and medical 
history. Finally, the Department believes that guaranteeing the ability 
of all parties to appear before a highly qualified administrative law 
judge increases the parties' confidence in the fairness and 
impartiality of the adjudication process. Contrary to the commenter's 
suggestion, the Department does not insist that an in-person hearing 
must be held in every case. The parties remain free to move for summary 
judgment under subsection (c) in those rare cases where there is no 
genuine dispute as to a material issue of fact. In all other cases, 
however, the Department's revised regulation gives each party to a 
claim the right to insist on an in-person hearing. Permitting the 
cancellation of a hearing over the objection of even one of the 
parties, in a case involving disputed facts, would contravene the 
explicit command of 33 U.S.C. 919, as incorporated by 30 U.S.C. 932(a). 
No other comments were received concerning this section, and no changes 
have been made in it.

20 CFR 725.453

    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. 54970-71 (Oct. 8, 1999). The regulation was 
repromulgated only for the convenience of readers. Accordingly, no 
changes are being made in this section.

20 CFR 725.454

    (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 Sec. 725.414. The 
Department did not discuss the regulation in its second notice of 
proposed rulemaking. See list of Changes in the Department's Second 
Proposal, 64 FR 54971 (Oct. 8, 1999).
    (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 
Sec. 725.414(c), (d) and Sec. 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

[[Page 79999]]

more properly belongs in Sec. 725.456, and it remains there. In that 
regulation, medical evidence in excess of the limitations contained in 
Sec. 725.414 may be admitted into the record upon a showing of good 
cause. No change has been made in Sec. 725.454 in response to these 
comments.
    (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.

20 CFR 725.456

    (a) The Department proposed revising section 725.456 in its first 
notice of proposed rulemaking in order to reflect its original proposal 
in Sec. 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 Sec. 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 Sec. 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 Sec. 725.406. 64 FR 54996 (Oct. 
8, 1999).
    (b) A number of comments object to the Department's addition of 
proposed subsection (c) to Sec. 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 Sec. 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. See 43 FR 36794, 36798 (Aug. 
18, 1978). The revised regulations, however, will significantly alter 
the adjudication of black lung benefits cases. In particular, the 
district director will make his initial determination in reliance on a 
complete pulmonary evaluation performed by a highly qualified 
physician, and will already have all of the evidence relevant to the 
identification of the responsible coal mine operator. Moreover, as the 
commenters point out, an unrepresented claimant who obtains an opinion 
from his treating physician may inadvertently fail to submit it to the 
district director, and, under proposed subsection (c), would be 
prevented from submitting it thereafter to the administrative law 
judge. In addition, the 20-day requirement in subsection (b)(2) will 
ensure that parties have an adequate period in which to respond to the 
opposing party's evidence. Thus, the Department does not believe that 
subsection (c) remains necessary. Neither of the stated bases for the 
original adoption of the rule remain. Accordingly, proposed subsection 
(c) is deleted, and proposed subsections (d), (e), and (f) are 
redesignated as subsections (c), (d), and (e), respectively. The 
Department has made a corresponding deletion of proposed section 
725.414(e). Since both subsections are now deleted, there is no need to 
harmonize them.
    (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 Sec. 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

[[Page 80000]]

development as to other parties will be necessary, however, only in 
that small percentage of claims in which the identity of the 
responsible operator is in serious question. See Sec. 725.414(b). The 
Department continues to believe that these requirements are justified 
by the Department's need to ascertain the positions of potentially 
liable operators on these issues while the case is pending before the 
district director, especially given the fact that potentially liable 
operators other than the designated responsible operator will no longer 
be parties once a case has been referred to the Office of 
Administrative Law Judges. In addition, the Department continues to 
believe that the increased costs that operators will have to bear as a 
result of this ``front-loading'' will not be significant.
    (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 
Richardson v. Perales, 402 U.S. 388, 409 (1971), the Supreme Court 
emphasized the importance of preserving the parties' ability to cross-
examine the authors of written medical reports, the evidentiary basis 
of Social Security's disability determinations. Similarly, the 
Department's regulations provide all parties with a full and fair 
opportunity to conduct cross-examination. If the author of a report 
testifies at the hearing, the opposing party may clearly avail itself 
of the opportunity to conduct live cross-examination. In cases where 
the documentary medical evidence stands on its own, the opposing party 
may question the author of the report under conditions determined by 
the administrative law judge. See Sec. 725.459. Finally, the 
administrative law judge has the authority, in appropriate cases, to 
issue a subpoena to compel the attendance of a witness at the hearing. 
In addition, in any case involving documentary medical evidence, the 
opposing party has the right, under section 725.414, to submit 
documentary rebuttal evidence of its own. Accordingly, the Department 
does not agree that its revisions to 725.456 in any way limit the right 
of parties to conduct an effective cross-examination.
    (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 Sec. 725.456 prohibits a party from 
putting on its affirmative case. In combination with Sec. 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 Sec. 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.

20 CFR 725.457

    (a) In its initial notice of proposed rulemaking, the Department 
proposed revising subsection (c) to conform the regulation to the 
requirement then in Sec. 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 Sec. 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 Sec. 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

[[Page 80001]]

identify a testifying witness while the claim is pending before the 
district director and that the requirement illegally diminishes the 
authority of the administrative law judge who conducts the hearing. The 
Department disagrees. This limitation is a reasonable extension of the 
requirement, set forth in Subpart E, that parties develop all of the 
evidence relevant to the liability of potentially liable operators 
while the case is pending before the district director. In both notices 
of proposed rulemaking, the Department explained that requiring the 
submission of evidence relevant to liability was intended to offset the 
risk that the Black Lung Disability Trust Fund would be required to 
assume liability in the event that none of the potentially liable 
operators named by the district director was ultimately determined to 
be the responsible operator. See 62 Fed. Reg. 3355-56 (Jan. 22, 1997); 
64 Fed. Reg. 54993 (Oct. 8, 1999). A party should not be able to avoid 
the required evidentiary development before the district director by 
submitting its evidence to the administrative law judge in the form of 
witness testimony. Accordingly, the regulations require that parties 
identify all such witnesses while the case is pending before the 
district director. The regulations also recognize, however, that a 
party may submit additional documentary evidence on the liability issue 
at the hearing upon a showing of extraordinary circumstances, 
Sec. 725.456(b)(1), and the regulations should provide the same 
standard for allowing witnesses' testimony. For example, the Department 
intends that a party will have shown extraordinary circumstances to 
present the testimony of a previously unidentified witness whose 
testimony is relevant to the issue of operator liability when the 
witness originally identified by the party is no longer available to 
testify. Accordingly, the Department has revised subsection (c)(1) to 
reflect this exception. The Department has also revised subsection 
(c)(1) to reflect its decision to permit the district director to refer 
the case to the Office of Administrative Law Judges with only one 
potentially liable operator, the designated responsible operator, as a 
party to the claim. The Department has also added a clause to 
subsection (c)(2) to clarify its intent that the combination of 
physician testimony and documentary medical reports may exceed the 
numerical limitations of Sec. 725.414 only upon a showing of good 
cause. The Department has also deleted the last clause of this 
subsection; the introductory sentence of subsection (c) is sufficient 
to make clear the Department's intent that the limitations in the 
subsection are intended to govern testimony at a hearing as well as by 
deposition or interrogatories.
    The Department does not agree, however, that revised Sec. 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,'' i.e., witnesses 
whose testimony will establish certain facts pertaining to the miner's 
employment. For example, an operator may present testimony to establish 
that the claimant did not work as a miner while working for the 
operator, or that the claimant was not exposed to coal mine dust. 
Because these witnesses are not ``expert witnesses,'' the 10-day notice 
requirement of section 725.457(a) is inapplicable. In cases where the 
witness who will appear at the hearing is an expert witness, such as a 
witness who will testify to the coal industry's use of certain terms in 
a coal mine lease, the party offering that witness's testimony must 
also provide 10 days notice to all other parties to the claim. That 
time allows the other parties sufficient time to prepare to cross-
examine the expert witness at the hearing. If the witness testifies by 
deposition, the 30-day notice required by Sec. 725.458 provides 
sufficient time for preparation.
    (d) One comment argues that the Department's limitation on the 
testimony of physicians found in Sec. 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 Peabody Coal Co. v. Director, OWCP, 165 
F.3d 1126 (7th Cir. 1999). In Peabody Coal, the Seventh Circuit 
reversed an award of benefits because the administrative law judge had 
discredited a medical opinion that was based on an autopsy review not 
admitted into the record. The court held that under Rule 703 of the 
Federal Rules of Evidence, an expert witness may base his opinion on 
materials that ``need not be admissible, let alone admitted, in 
evidence, provided that they are the sort of thing on which a 
responsible expert draws in formulating a professional opinion.'' 165 
F.3d at 1128. The court further noted that it could not think of any 
reason why black lung adjudications should be subject to tighter 
restrictions on expert testimony, and added that ``[n]either Congress 
nor the Department of Labor thinks so. Nothing in the statute or 
regulations applicable to such cases supports the decision of the 
administrative law judge to impose tighter limits on expert witnesses 
in black lung cases than the Federal Rules of Evidence impose in 
ordinary civil and criminal trials.'' 165 F.3d at 1129.
    The regulations under which Peabody Coal was adjudicated, however, 
did not contain any limitations on the quantity of medical evidence 
that a party was entitled to submit to the administrative law judge. 
Because the Department has now limited the amount of documentary 
medical evidence in the record, it cannot allow parties to avoid that 
limitation by presenting an expert witness who will be free to examine 
additional material that may not be admitted into the record. For 
example, if the party has already submitted a medical report prepared 
by one physician, and a consultative report prepared by a second 
physician, it is not entitled to submit the consultative report of a 
third physician in the absence of good cause. The regulation ensures 
that the party is not allowed to

[[Page 80002]]

avoid that limitation simply by having the second physician testify, 
not only about his own conclusions, but also about the conclusions 
reached by a third doctor. The Department believes that the limitation 
contained in subsection (d) is an appropriate means of ensuring the 
parties' adherence to the evidentiary limitations imposed by section 
725.414. Like section 725.414, the revised version of section 725.457 
will apply only to claims filed after the effective date of these 
regulations.
    Contrary to the commenter's objection, then, the Department's 
revision does not ``violate'' the Seventh Circuit's decision in Peabody 
Coal. The court did not base its decision on an interpretation of 
unambiguous statutory language, but by using the Federal Rules of 
Evidence in a case in which the statute and regulations were silent. 
165 F.3d at 1129. By promulgating a regulation that will produce a 
result contrary to the court's decision in the same circumstances, the 
Department has simply exercised its authority to fill in a gap 
identified by the court. ``The power of an administrative agency to 
administer a congressionally created * * * program necessarily requires 
the formulation of policy and the making of rules to fill any gap left, 
implicitly or explicitly, by Congress.'' Morton v. Ruiz, 415 U.S. 199, 
231 (1974).
    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); Director, OWCP v. 
National Mines Corp., 554 F.2d 1267, 1274 (4th Cir. 1977). As discussed 
above, the limitation on the scope of testimony by physicians set forth 
in Sec. 725.457 is necessary in order to ensure that parties adhere to 
the limitations on the quantity of medical evidence permitted each side 
in the adjudication of a claim for black lung benefits. Accordingly, 
the Department does not agree that the limitation violates section 23 
of the Longshore Act.
    (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.

20 CFR 725.458

    (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 Sec. 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. 
See list of Changes in the Department's Second Proposal, 64 FR 54971 
(Oct. 8, 1999). The Department did revise Sec. 725.457(d), however, in 
order to allow a physician who testifies at a hearing to address all of 
the medical evidence of record. By incorporating Sec. 725.457(d), 
Sec. 725.458 also incorporated this expansion of the permissible scope 
of a physician's testimony.
    (b) The Department received several comments concerning the cross-
reference to Sec. 725.457(d). The reference to Sec. 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 
Sec. 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 
Sec. 725.458, with one exception. One commenter suggests that 
Sec. 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 
Sec. 725.414. In the second notice of proposed rulemaking, the 
regulation governing witness' testimony generally, Sec. 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 Sec. 725.414. Thus, in the absence of a finding of good 
cause pursuant to Sec. 725.456(b)(1), if a party has submitted the 
maximum number of documentary medical reports permitted under 
Sec. 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 Sec. 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

[[Page 80003]]

undertake the development of their case as to medical eligibility at 
the earliest stage of adjudication. The Department believes that this 
suggestion would adversely affect unrepresented claimants. Section 
725.458 provides that all parties must give 30 days notice of any 
deposition, and section 725.457(a) provides that parties must give 10 
days notice of expert witnesses who will testify at the hearing. The 
commenter has not suggested that these time periods, which were 
contained in the program's former regulations, have proved to be 
insufficient.
    (e) No other comments were received concerning this section, and no 
changes have been made in it.

20 CFR 725.459

    (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. See 30 U.S.C. 932(a) (permitting the Secretary to 
``otherwise provide[] * * * by regulations * * *''); Director, OWCP v. 
National Mines Corp., 554 F.2d 1267, 1274 (4th Cir. 1977). In addition 
to section 28 of the Longshore Act, incorporated section 7 of the 
Longshore Act also governs the payment of costs by an operator. Section 
7(e) provides the Secretary with the power to order an examination of 
an employee ``[i]n the event that medical questions are raised in any 
case,'' and to authorize an additional review or reexamination upon the 
request of any party. 33 U.S.C. 907(e), as incorporated by 30 U.S.C. 
932(a). This statutory section further provides that the Secretary may 
``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 * * *.'' Thus, by its explicit 
terms, the cost-shifting mechanism of section 7(e) is not dependent on 
the miner's successful prosecution of his claim. Rather, Congress, in 
incorporating section 7(e) into the Black Lung Benefits Act, 
demonstrated its concern that miners not have to bear all the costs 
incurred in determining their entitlement to benefits, even in the 
event that they are ultimately unsuccessful.
    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 Richardson v. Perales, 
402 U.S. 388, 409 (1971), the Supreme Court recognized that the ability 
to cross-examine the preparer of an ex parte medical report served as 
an important guarantee of the reliability of such a report. Because the 
overwhelming majority of medical issues in the adjudication of a black 
lung benefits claim are decided on the basis of ex parte medical 
reports, rather than on testimony offered at the hearing, the 
Department must ensure that parties are permitted access to their 
opposing party's witnesses for the purpose of cross-examination.
    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

[[Page 80004]]

accommodate the needs of the black lung benefits program, and based on 
the Department's inherent to authority fill the statutory gaps left by 
Congress in the Black Lung Benefits Act, the revised regulation 
governing witness' fees represents a sensible cost-spreading measure in 
those relatively few cases in which a claimant is indigent.
    (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, Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437 
(1987), and West Virginia University Hospitals v. Casey, 499 U.S. 83 
(1991), do not prevent the Department from shifting the costs of cross-
examination to employers in special circumstances. In Crawford Fitting, 
the Court discussed sections 1920 and 1821 of Title 28 of the United 
States Code, which authorize shifting witness fees of up to $40 per 
day. The Court ``held that these provisions define the full extent of a 
federal court's power to shift litigation costs absent express 
statutory authority to go further.'' Casey, 499 U.S. at 86, explaining 
the decision in Crawford Fitting. As discussed above, the Department 
believes that the Black Lung Benefits Act, by incorporating various 
provisions of the Longshore Act and authorizing the Secretary to vary 
those provisions in order to administer the black lung program, 
provides ample statutory authority for the Department's cost-shifting 
regulation. The existence of that authority compels the conclusion that 
the revised regulation does not violate the Court's decisions in 
Crawford Fitting and Casey.
    (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.' '' Butera v. Apfel, 173 F.3d 1049, 1057 (7th Cir. 1999), 
quoting Central Freight Lines, Inc. v. United States, 669 F.2d 1063, 
1068 (5th Cir. 1982). The Court thus upheld a decision by SSA not to 
grant a claimant's subpoena to compel the attendance at the hearing by 
two physicians who had examined the claimant. See also Copeland v. 
Bowen, 861 F.2d 536, 539 (9th Cir. 1988) (holding that a disability 
claimant is ``not entitled to unlimited cross-examination, but is 
entitled to such cross-examination as may be required for a full and 
true disclosure of the facts.''); Yancey v. Apfel, 145 F.3d 106, 113 
(6th Cir. 1998) (no absolute right to subpoena reporting physician); 
Flatford v. Chater, 93 F.3d 1296, 1305 (6th Cir. 1996) (same). 
Subsection (b) of the revised regulation meets the APA standard by 
permitting the ALJ to determine the level of cross-examination that is 
required for a full and true disclosure of the facts.
    (g) No other comments were received concerning this section, and no 
changes have been made in it.

20 CFR 725.465

    (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. Sec. 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 Sec. 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, cf. 
Collins v. J & L Steel, 21 Black Lung Rep. (MB) 1-183, 1-1-186 (Ben. 
Rev. Bd. 1999), and ask that the adjudication of claimant's entitlement 
be held in abeyance pending the outcome of the appeal, or await the 
ALJ's resolution of the claimant's entitlement and then file an appeal. 
Both options are problematic. If the Director files an interlocutory 
appeal and the Board rejects the Director's arguments and affirms the 
dismissal, the Director may be unable to seek further review under the 
stricter standards that the federal appellate courts apply to 
interlocutory orders. See, e.g., Redden v. Director, OWCP, 825 F.2d 
337, 338 (11th Cir. 1987), citing Coopers & Lybrand v. Livesay, 437 
U.S. 463 (1978). If the Director waits until after the claimant's 
eligibility is resolved to appeal the responsible operator issue to the 
Board, the Board may affirm the dismissal solely because the operator 
did not have an opportunity to participate in the adjudication of the 
merits of the claim. Crabtree v. Bethlehem Steel Corp., 7 Black Lung 
Rep. (MB) 1-354 (Ben. Rev. Bd. 1984). Neither of these options 
represents an efficient means of resolving the issue of operator 
liability in the context of adjudicating a miner's eligibility for 
benefits.
    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

[[Page 80005]]

levels. Moreover, the regulation does not create any undue hardships. 
If, after considering all of the evidence relevant to the responsible 
operator issue, the ALJ finds that the designated responsible operator 
is not liable for the payment of benefits, but concludes that the 
claimant is entitled to benefits, the operator merely has to wait until 
the Director, on behalf of the Trust Fund, files an appeal with the 
BRB. The operator may then participate in that appeal in defense of the 
ALJ's liability determination if it wishes. If the Director does not 
petition for review of the ALJ's liability decision, the operator need 
not participate in any further adjudication of the case, regardless of 
whether it is formally included as a party.
    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, Sec. 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. Boggs v. 
Falcon Coal Co., 17 Black Lung Rep. (MB) 1-62, 1-66 (1992).
    (c) No other comments have been received concerning this regulation 
and no changes have been made in it.

20 CFR 725.478

    (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 Sec. 725.502. The Department did not discuss 
this regulation in its second notice of proposed rulemaking. See list 
of Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 8, 
1999).
    (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. Trent Coal Co. v. Day, 739 F.2d 116, 118 (1984); 
Daugherty v. Director, OWCP, 897 F.2d 740, 742 (1990). Following the 
reasoning of these decisions, the revision does not lengthen the appeal 
time, but simply recognizes the appeal time guaranteed by the statute.
    (c) No further comments have been received concerning this section, 
and no changes have been made in it.

20 CFR 725.479

    (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. See list of Changes in the 
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999).
    (b) Several comments suggest that subsection (d) is unnecessary 
because strict adherence to the requirement in Sec. 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.

[[Page 80006]]

Subpart G

20 CFR 725.490

    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.

20 CFR 725.491

    (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. Lester v. Mack Coal Co., 21 Black Lung Rep. (MB) 1-126, 1-
130-131 (Ben. Rev. Bd. 1999).
    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, see Sec. 725.2, the 
commenter argues that the Department is expanding the scope of the term 
``operator,'' and that with respect to refiled claims, the newly 
amended definition will be applied retroactively. In this regard, the 
commenter argues that the Department's reliance on the jurisdiction of 
the Mine Safety and Health Administration to regulate under the Black 
Lung Benefits Act is inappropriate. We understand the commenter's 
argument to be that the Department should not have relied on cases 
decided under the Federal Mine Safety and Health Act (FMSHA) in 
promulgating its definition of the term ``operator.'' The Department 
cited such cases in both notices of proposed rulemaking. 62 FR 3364 
(Jan. 22, 1997); 64 FR 54997-98 (Oct. 8, 1999). The commenter suggests 
that the MSHA's jurisdiction is based on an agreement with the 
Occupational Safety and Health Administration (OSHA) to ensure that all 
American workplaces are subject to inspection by one of the two 
agencies, and that the Department's adoption of FMSHA criteria 
represents an expansion of coverage under the Black Lung Benefits Act.
    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,'' see, e.g., 20 CFR 
725.491(b)(1)(company need not directly supervise work in order to be 
considered an operator). In addition, regardless of any agreement 
between MSHA and OSHA, the definitions set forth in the FMSHA create an 
outer limit for MSHA's jurisdiction; MSHA simply cannot exercise 
authority over employers and activities not covered by the FMSHA. These 
definitional provisions also govern the extent of coverage under the 
Black Lung Benefits Act. Accordingly, the regulations implementing the 
Black Lung Benefits Act must recognize and account for the extent of 
coverage provided by the FMSHA.
    (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. See 62 FR 3363 (Jan. 22, 1997). Accordingly, if 
individuals whose work is integral to the extraction or preparation of 
coal but who may not be considered traditional coal miners are 
determined to be entitled to benefits under the Act as a result of 
occupational exposure to coal mine dust, their employers must bear 
responsibility for the payment of those benefits. For example, 
individuals who transport coal during the extraction or preparation 
process, Norfolk & Western Railway Co. v. Roberson, 918 F.2d 1144, 
1149-50 (4th Cir. 1990), cert. denied, 500 U.S. 916, and who deliver 
supplies essential to the extraction or preparation of coal, Pinkham v. 
Director, OWCP, 7 Black Lung Rep. (MB) 1-55, 1-57 (Ben. Rev. Bd. 1984), 
have been determined to be ``miners'' under the Black Lung Benefits 
Act. The regulatory definition of the term ``operator'' must be broad 
enough to ensure that the employer of such an individual bears direct 
liability for any benefits to which the miner is entitled.
    (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

[[Page 80007]]

under relevant Supreme Court decisions is not whether Congress 
indicated its intention to exempt the states from coverage, but whether 
Congress indicated a clear intention to include the states. See 64 FR 
54998 (Oct. 8, 1999), discussing Gregory v. Ashcroft, 501 U.S. 452 
(1991). The commenter does not allege that the BLBA meets this test 
with respect to state governments, noting only that the language of the 
Act could easily be construed to cover state employees. Although the 
commenter also objects to the exemption from liability under the Black 
Lung Benefits Act of the federal government, it argues that federal 
mine inspectors, the only federal employees who could be potentially 
covered by the BLBA, should not be considered ``miners.'' The 
Department agrees, and has taken the same position in litigation.
    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 Eastern Associated Coal Corp. v. 
Director, OWCP, 791 F.2d 1129, 1131-32 (4th Cir. 1986). Specifically, 
the court held that to the extent that an individual contracts 
pneumoconiosis as a result of work as a federal coal mine inspector, 
his exclusive remedy against the government lies under the Federal 
Employees' Compensation Act (FECA), 5 U.S.C. 8101 et seq. If such an 
individual is also able to obtain benefits under the Black Lung 
Benefits Act, based on other work as a miner, liability for those 
benefits rests with the coal mine operator that most recently employed 
the individual as a miner. See also Consolidation Coal Co. v. Borda, 
171 F.3d 175, 179 (4th Cir. 1999). The commenter has offered no reason 
for the Department to revise its regulation to produce a different 
outcome.
    (e) No other comments have been received concerning this section, 
and no changes have been made in it.

20 CFR 725.492

    (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. See 20 CFR 725.491(b)(2) (1999). The 
Department does agree, however, that, in order to become liable as a 
successor operator, the acquirer of mining property must continue to 
derive an economic benefit from the coal on the property. Thus, the 
mere acquisition of mineral rights alone, without the actual 
extraction, preparation, or transportation of coal, or coal mine 
construction, will not subject the acquirer to successor operator 
liability.
    (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.

20 CFR 725.493

    (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.

20 CFR 725.494

    (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 (e.g., employment of 
the miner for a year, including at least one day after December 31, 
1969). This revised regulation also explains the factors used to 
consider whether a company is financially capable of assuming liability 
for the payment of benefits. In the second notice of proposed 
rulemaking, the Department made several technical changes to the 
regulation to make it easier to read. 64 FR 54999 (Oct. 8, 1999). The 
Department responded to one comment contending that the presumption in 
subsection (a) was illegal by citing the broad statutory grant of 
authority given the Department to create regulatory presumptions and by 
noting that the presumption appears in the current regulations at 20 
CFR 725.493(a)(6). The Department responded to a comment concerning 
subsection (e) by explaining that subsection (e) did not contain a 
presumption, but simply recited the evidence needed to support a 
finding that an operator is financially capable of assuming liability 
for the payment of benefits. The Department further explained that the 
criteria in section 725.494 have no effect on a miner's eligibility for 
benefits.
    (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

[[Page 80008]]

entitlement by prohibiting more than one operator from participating in 
a case beyond the district director level, and by requiring the 
district director to exclude from the record any documentary medical 
evidence submitted by an operator other than the finally designated 
responsible operator. See explanation accompanying Secs. 725.414, 
725.415, 725.421. This revision does not require any alteration in the 
text of Sec. 725.494. To the extent that the commenter is objecting to 
the district director's notification of more than one operator as 
potentially liable operators, the Department's explanation of the need 
for this requirement is set forth in the preamble to Sec. 725.407.
    In addition, a number of courts have been critical of the length of 
time it takes to resolve individual black lung benefits claims, see, 
e.g., C&K Coal Co. v. Taylor, 165 F.3d 254, 258 (3d Cir. 1999), and 
have held that the delays may deprive operators of their due process 
rights. Lane Hollow Coal Co. v. Director, OWCP, 137 F.3d 799, 807 (4th 
Cir. 1998). Some of these delays have been caused by remands from the 
Office of Administrative Law Judges in order to require the 
identification of additional responsible operators and the development 
of more evidence on responsible operator issues. The Department's 
revised regulations governing the identification and adjudication of 
the liable coal mine operator are intended to prevent such delays from 
occurring in the future. In all claims filed after the effective date 
of these revisions, the Department will have only one opportunity, 
while the case is pending before the district director, to obtain 
evidence from the operators that employed the miner. To facilitate the 
district director's resolution of the responsible operator issue, the 
regulations require the submission of evidence relevant to the criteria 
in section 725.494 to the district director and enhance the district 
director's ability to use subpoenas to compel the production of 
additional documents. Once all of this evidence is forwarded to the 
Office of Administrative Law Judges for a formal hearing, the 
administrative law judge assigned to the case will determine, in light 
of the evidentiary burdens imposed by section 725.495, whether the 
district director designated the proper responsible operator. If the 
administrative law judge determines that the district director did not 
designate the proper responsible operator, liability will fall on the 
Trust Fund. No remand for further development of the responsible 
operator issue is permissible.
    (c) No comments have been received specifically relating to this 
section, and no changes have been made in it.

20 CFR 725.495

    (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 
Sec. 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 Director, OWCP 
v. Trace Fork Coal Co., 67 F.3d 503, 507 (4th Cir. 1995). In its second 
notice of proposed rulemaking, the Department again addressed this 
issue, rejecting arguments that the Department's assignment of burdens 
of proof violated the Fourth Circuit's decision. 64 FR 54999 (Oct. 8, 
1999).
    (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 Secs. 725.410-
725.413, as well as the change in Sec. 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. See 
explanation accompanying Sec. 725.414. The district director will 
identify the designated responsible operator in a document titled a 
schedule for the submission of additional evidence rather than in an 
initial finding. See explanation accompanying Secs. 725.410-725.413. 
Moreover, to help ensure that the district director properly identifies 
the responsible operator, sections 725.415 and 725.417 permit the 
district director to re-designate the responsible operator, by issuing 
another schedule for the submission of additional evidence, if he 
determines that his initial designation may have been erroneous. See 
explanation accompanying Secs. 725.415 and 725.417. Accordingly, the 
Department has replaced the reference in subsection (d) to the operator 
``initially found liable'' with a reference to the operator that is 
``finally designated'' as the responsible operator.
    (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. Compare 33 U.S.C. 932(a)(1)(B) (Longshore and 
Harbor Workers' Compensation Act provision giving the Department 
authority to approve insurers under that Act). Accordingly, the 
Department's ``decision'' to accept these state group associations as 
insurers was not based on an exercise of discretion but rather on the 
understanding that they were authorized under the laws of their states 
to insure workers' compensation. The Department thus did not 
voluntarily assume the risk that these associations would become 
insolvent.
    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 Sec. 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, see C&K 
Coal Co. v. Taylor, 165 F.3d 254, 257 (3d Cir. 1999). Like the

[[Page 80009]]

remainder of section 725.495, this provision shall be applicable only 
to claims filed after the date upon which these revisions become 
effective. This provision does not affect the liability of any operator 
that employed the miner after he left employment with the self-insured 
operator.
    (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 
(i.e., an operator that meets the criteria in Sec. 725.494) employed 
the miner more recently. The Department's rationale for this revision 
is fully set forth in its explanation of the original proposal. 62 FR 
3363-65 (Jan. 22, 1997).
    (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 Director, OWCP v. Greenwich Collieries, 
512 U.S. 267 (1994) and Metropolitan Stevedore Co. v. Rambo, 117 S. Ct. 
1953 (1997), as well as the Administrative Procedure Act. The 
Department's response to this comment is fully set forth at 64 FR 
54972-74 (Oct. 8, 1999). Congress gave the Department particularly 
broad authority to promulgate regulations governing the identification 
of the operator responsible for the payment of benefits, 30 U.S.C. 
932(h), including the authority to create ``appropriate presumptions'' 
for determining whether pneumoconiosis arose out of a miner's 
employment with an individual coal company, and to establish 
``standards for apportioning liability among more than one operator, 
where such apportionment is appropriate.'' This authority has been 
construed to permit the assignment of liability to a single operator. 
See National Independent Coal Operators Association v. Brennan, 372 F. 
Supp. 16, 24 (D.D.C.), aff'd, 419 U.S. 955 (1974). The burdens imposed 
by section 725.495 are thus fully consistent with the statutory 
authority granted the Department.
    (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. See Secs. 725.408(a)(2)(i)-(v), 725.494(a)-
(e). By contrast, documentary evidence submitted to demonstrate a more 
recent employer's potential liability is governed by section 725.414, 
which states that the evidence must be submitted pursuant to a schedule 
established by the district director after a party has indicated its 
dissatisfaction with the district director's initial findings of 
eligibility and liability. The submission of this evidence is therefore 
not subject to the 90-day time limit.
    (g) No other comments have been received concerning this section, 
and no other changes have been made in it.

20 CFR 725.497

    Although the Department received comments relevant to this section, 
the regulation was not open for comment, see 62 Fed. Reg. 3341 (Jan. 
22, 1997); 64 Fed. Reg. 54971 (Oct. 8, 1999). It was inadvertently 
omitted from the list of technical revisions. Accordingly, no changes 
are being made in this section.

Subpart H

20 CFR 725.502

    (a) The Department proposed significant changes to the current 
Sec. 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, i.e., both prospective monthly 
benefits and retroactive benefits. The proposed regulation also defined 
when benefits become due after the issuance of an ``effective'' 
decision awarding benefits. 62 FR 3412-13 (Jan. 22, 1997). Coupled with 
an assessment of an additional twenty-percent of any unpaid 
compensation (33 U.S.C. 914(f) as incorporated by 30 U.S.C. 932(b), 
proposed Sec. 725.607), proposed Sec. 725.502 substantially clarified 
the responsible operator's benefit payment obligations. In its second 
notice of proposed rulemaking, the Department responded to comments 
opposing the changes. Without disputing the statutory incorporation of 
Sec. 14(f), the commenters contended that the addition of twenty-
percent of unpaid compensation to late payments was punitive. They also 
opposed the obligation to pay retroactive benefits while an award was 
on appeal, arguing such a requirement violated Congressional intent and 
that recovery of those payments was unlikely in the event the award was 
overturned. 64 FR 54999-55000 (Oct. 8, 1999). Citing Congressional 
intent that the coal industry bear primary responsibility for benefits, 
the Department defended the assessment of an additional twenty-percent 
of unpaid compensation as a means to promote prompt compliance with 
effective awards. The Department noted its concern that operators 
rarely paid benefits while an award was on appeal, thereby shifting the 
financial burden and ultimate risk of loss to the Trust Fund. Moreover, 
the Department noted that requiring payment of retroactive benefits 
during active litigation was consistent with Congressional intent. The 
liable party is generally required to pay all benefits due the claimant 
under the terms of an effective award, and the ``benefits due'' include 
retroactive benefits. Congress enacted one exception: the Trust Fund is 
authorized to pay only future monthly benefits when it pays on behalf 
of an operator. 64 FR 55000 (Oct. 8, 1999). In response to another 
comment, the Department agreed that the law clearly requires the Trust 
Fund to pay interim benefits if an

[[Page 80010]]

operator obtains a stay of payments. The Department also concluded the 
proposed regulation required the operator to continue to pay benefits 
despite the pendency of a modification petition until a new effective 
order is issued pursuant to Sec. 725.310. Finally, the Department 
reiterated its view that prospective monthly benefits are due and 
``shall be paid'' when an administrative law judge's award becomes 
effective, i.e., when the order is filed in the office of the district 
director. The Department did propose one change to Sec. 725.502(b)(1) 
in its second notice. That change made monthly benefits due on the 
fifteenth day of the month following the month for which the benefits 
are paid, instead of the first business day of that month as originally 
proposed. 64 FR 55050 (Oct. 8, 1999). The Department has proposed one 
minor change in the final rule. Subsection (b)(2) requires the district 
director to compute the amount of retroactive benefits and interest a 
responsible operator owes the claimant, and to inform the parties. The 
Department has added language at the end of the last sentence of 
subsection (b)(2) to clarify that the district director must attach a 
current table of applicable interest rates to the computation.
    (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 Sec. 725.502(b)(2) because it will increase operator 
payments and lead to larger, and more numerous, overpayments. Finally, 
the comment objects to Sec. 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 Sec. 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 Sec. 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 Old Ben Coal Co. v. Luker, 826 F.2d 688, 693-94 (7th Cir. 
1987). Briefly, Congress created the Fund in 1978 to relieve the 
federal government of its de facto primary financial responsibility for 
the Part C program. The Fund assumed responsibility for claims for 
which no operator was liable or in which the responsible operator 
defaulted on its payment obligations. Congress intended to ``ensure 
that individual coal operators rather than the trust fund bear the 
liability for claims arising out of such operator's mines to the 
maximum extent feasible.'' S. Rep. 95-209, 95th Cong., 1st Sess. 9 
(1977), reprinted in Committee on Education and Labor, House of 
Representatives, 96th Cong., Black Lung Benefits Reform Act and Black 
Lung Benefits Revenue Act of 1977 at 612 (Comm. Print) (1979) (emphasis 
supplied). By the conclusion of the 1981 fiscal year, however, the Fund 
had accumulated a deficit of approximately $1.5 billion. H.R. Rep. 97-
406, 97th Cong., 1st Sess. 4 (1981), reprinted in U.S.C. C. & A.N. 
2673. Individual responsible operators had also become burdened with 
unanticipated retroactive liabilities from denied claims which were 
reopened and approved under the 1978 legislation. Congressional concern 
over the Trust Fund's deficit prompted changes to the BLBA in 1981; the 
remedial actions included raising the excise tax on coal that provided 
revenue for the Fund, increasing the interest rate on operator 
liabilities to the Fund, and tightening eligibility criteria for 
claimants. Congress also relieved a limited group of operators from 
their retroactive liabilities based on the procedural histories of 
certain claims. These liabilities transferred to the Fund. Finally, 
Congress limited the Trust Fund to paying only prospective benefits if 
a responsible operator failed or refused to pay after entry of an 
initial determination of entitlement. The 1981 Amendments, however, did 
not disturb the operator's legal obligation to pay all benefits due 
under an effective award. 127 Cong. Rec. 29,932 (1981).
    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.

[[Page 80011]]

The ability to recoup from the operator the amount paid by the Fund if 
the award survived litigation, plus interest, would restore only some 
of the revenues expended on interim benefits. Initial awards which were 
eventually overturned would become overpayments; recovering 
overpayments from a largely elderly and unemployed population was 
problematic at best. Given these circumstances, the Department rejects 
the argument that Congress intended the Fund to absorb all operators' 
liabilities as a matter of course until the conclusion of litigation in 
every approved 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 Sec. 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 Sec. 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 Sec. 725.502. See 43 FR 36806 (Aug. 18, 1978). 
No comments were received then in response to the regulation, nor did 
the Department receive any comments in response to its initial notice 
of proposed rulemaking. See also 20 CFR 410.226(a). In any event, the 
payment of benefits twice for the same month of eligibility in these 
circumstances is proper. The program has always paid benefits for 
periods during which the miner established (s)he was totally disabled 
by pneumoconiosis arising out of coal mine employment. 33 U.S.C. 
906(a), as incorporated by 30 U.S.C. 932(a), 922(a)(1). Although 
generally a miner's entitlement terminates in the month before the 
month of death (Sec. 725.203(b)(1)), Sec. 725.502(c) creates an 
exception to that rule to recognize the successful prosecution of a 
claim, albeit only for one month of benefits. The program also pays 
survivor's benefits to eligible recipients if a miner dies due to 
pneumoconiosis, 30 U.S.C. 922(a)(2), and begins such benefit payments 
with the month of the miner's death, 20 CFR 725.212-725.213. The 
statute does not prohibit the payment of benefits twice in one month in 
the rare event a miner entitled to benefits for disability dies due to 
pneumoconiosis in the first month of his or her eligibility. No change 
in the regulation is necessary.
    (e) No other comments were received concerning this section, and no 
other changes have been made in it.

20 CFR 725.503

    (a) In its initial notice of proposed rulemaking, the Department 
proposed adding Sec. 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 
Sec. 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, Sec. 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 Sec. 725.503(b) and (c). Each subsection 
begins with similar language referring to the entitled individual to 
whom benefits are payable, i.e., the miner entitled to benefits 
(subsection (b)), and the survivor entitled to benefits (subsection 
(c)). The purpose of this change is simply to use parallel language in 
each subsection to identify the individual receiving benefits.
    (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 Director, OWCP v. 
Greenwich Collieries, 512 U.S. 267 (1994). The Department disagrees 
with the general proposition that a default onset date based on a 
presumption of entitlement as of a certain date violates the APA and 
Greenwich Collieries. The Department addressed this issue at length in 
its second notice of proposed rulemaking. 64 FR 54972-74 (Oct. 8, 
1999). To summarize: the Federal Mine Safety and Health Act (FMSHA), of 
which the Black Lung Benefits Act (BLBA) is a part, generally is exempt 
from the provisions of 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

[[Page 80012]]

adjudication of claims. The incorporation of the APA (and 5 U.S.C. 
556(d) in particular) 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''). See generally Director, OWCP v. National Mines 
Corp., 554 F.2d 1267, 1273-74 (4th Cir. 1977); Patton v. Director, 
OWCP, 763 F.2d 553, 559-60 (3d Cir. 1985). In Greenwich Collieries, the 
issue before the Court concerned the Department's authority to displace 
5 U.S.C. 556(d) via a regulatory presumption (20 CFR 718.3) that 
required a finding for the claimant if the evidence for and against a 
particular finding was evenly balanced. The Court considered 
Sec. 718.3(c) too ambiguous to vary the APA's burden of proof 
requirements as to the BLBA. It therefore held that the party who bears 
the burden of persuasion under the APA must prevail by a preponderance 
of the evidence. In so holding, the Court also acknowledged the 
Department's regulatory authority, consistent with the APA, to utilize 
presumptions which ease a party's burden of production. 512 U.S. at 
280-81. The Court did not address the Department's argument that it has 
the authority to override 5 U.S.C. 556(d) by regulation and shift the 
burden of persuasion as well.
    Since Greenwich Collieries, three courts have addressed the 
Department's authority to create presumptions which alter the parties' 
evidentiary burdens. Although no court has considered the Department's 
statutory authority to shift a burden of persuasion, all three courts 
have approved either directly or in dicta the Department's authority to 
create presumptions which shift the burden of production. In Glen Coal 
Co. v. Seals, 147 F.3d 502 (6th Cir. 1998), the Sixth Circuit 
considered whether a judicially-created presumption of medical benefits 
coverage for the treatment of pulmonary disorders was consistent with 
circuit caselaw. See Doris Coal Co. v. Director, OWCP, 938 F.2d 492 
(4th Cir. 1991) (holding miner previously found totally disabled due to 
pneumoconiosis who receives treatment for pulmonary disorder is 
presumed to receive treatment for pneumoconiosis for purposes of 
medical benefits coverage). The majority held that the decisions below 
erroneously relied on the Doris Coal opinion when Sixth Circuit law 
applied and was inconsistent with Fourth Circuit precedent. 147 F.3d at 
514 (Dowd, D.C.J.), 515 (Boggs, J.). Judge Boggs (concurring), however, 
agreed with Judge Moore (dissenting) ``that it would not necessarily 
contravene Greenwich Collieries for the Secretary to adopt a regulation 
shifting the burden of production in the manner of Doris Coal.'' 147 
F.3d at 517. In Gulf & Western Indus. v. Ling, 176 F.3d 226 (4th Cir. 
1999), the Fourth Circuit upheld the validity of the Doris Coal 
presumption under the APA as interpreted by Greenwich Collieries. The 
Court agreed with Seals that the presumption shifts the burden of 
production, not persuasion, and therefore was valid under the APA. 176 
F.3d at 233-34. Most recently, the Eighth Circuit considered whether, 
for purposes of a subsequent claim, a ``material change'' in a miner's 
condition could be presumed if the miner established one element of 
entitlement not previously proven in connection with a prior denied 
claim. Lovilia Coal Co. v. Harvey, 109 F.3d 445 (8th Cir. 1997); see 20 
CFR 725.309 (miner must show ``material change in condition'' between 
denial of one claim and filing of later claim). The Court rejected the 
operator's argument that the presumption of change violated 5 U.S.C. 
556(d) and Greenwich Collieries. In so doing, the Court cited Greenwich 
Collieries' explicit approval of burden shifting presumptions which 
ease a party's obligation to produce evidence in support of its claim. 
109 F.3d at 452-53.
    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. See 43 FR 36828-36829 (Aug. 18, 
1978). The presumption, however, shifts only the burden of production 
to the party opposing benefits. That party may overcome the presumed 
entitlement date by introducing credible medical evidence that the 
miner was not disabled for some period of time after he filed his 
claim. See Ling, 176 F.3d at 233 (holding, in context of another black 
lung presumption which shifts burden of production, party must 
introduce ``credible'' evidence supporting its position). ``Credible'' 
evidence means medical opinions which are consistent with the 
adjudicator's findings in the underlying award of benefits. If the 
adjudicator has accepted evidence that the miner is totally disabled as 
of a certain date, then any later medical opinion contradicting this 
evidence is necessarily not credible. Medical opinions pre-dating the 
evidence of entitlement, however, may establish the miner was not 
disabled when he filed his application. See Rochester & Pittsburgh Coal 
Co. v. Krecota, 868 F.2d 600, 603 (3d Cir. 1989) (holding ALJ 
erroneously awarded benefits from filing date when evidence proved 
miner was not disabled at that time). The burden of persuasion remains 
with the claimant to provide medical evidence sufficient to overcome 
the opponent's. Similarly, a claimant may also prove he is entitled to 
benefits commencing before he filed his benefits application. In such a 
situation, the burden of persuasion remains, as always, with the 
claimant. The comment does not provide any other rationale for its 
position that default onset dates violate the APA. The Department 
therefore declines to abandon its use of such onset dates when the 
medical evidence fails to establish the date on which the miner became 
totally disabled due to pneumoconiosis.
    (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); 
Director, OWCP v. National Mines Corp., 554 F.2d 1267, 1273-1274 (4th 
Cir. 1977).
    In 1978, the Secretary promulgated 20 CFR 725.503 to implement 
section 6(a). 43 FR 36806 (Aug. 18, 1978). Like the revised 
Sec. 725.503, the 1978 regulation

[[Page 80013]]

prescribed two alternative means for determining the entitlement date. 
The adjudicator had to first consider whether the evidence established 
the month during which the miner became totally disabled due to 
pneumoconiosis. If the evidence was insufficient to identify the 
specific month, the adjudicator resorted to the default date: the month 
in which the miner filed his or her claim. Section 725.503(d)(2) adopts 
the same general approach for modification petitions, and substitutes 
the month the claimant filed the modification petition as the default 
date if the award is premised on a change in the miner's condition. 64 
FR 55050 (Oct. 8, 1999). In the comments accompanying the promulgation 
of 20 CFR 727.302, the Secretary explained the reasoning behind the 
adoption of a default entitlement date:

    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.

43 FR 36828-36829 (August 18, 1978). The Secretary also emphasized that 
``a reasonable effort will always be made to establish the month of 
onset.'' 43 FR 36806 (August 18, 1978).
    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. See generally Sec. 718.201, responses to 
comments. As a result, detecting the precise month when the 
deterioration reached the level of compensable disability is 
problematic at best. In addition, clinical evidence of disability on a 
particular date does not mean the miner became disabled that day. The 
test may simply detect a condition which developed sometime earlier. 
Green v. Director, OWCP, 790 F.2d 1118, 1119 n.4 (4th Cir. 1986). 
Notwithstanding these difficulties, however, an award of benefits must 
set a date from which those benefits are payable. 20 CFR 725.503(f); 64 
FR 55050 (Oct. 8, 1999). If the medical evidence in a particular case 
pinpoints the disability date, that date must be used. In many cases, 
the evidence is inconclusive or contradictory over time. Even if the 
earliest positive evidence establishes the miner's entitlement, that 
evidence only proves the miner was disabled on that date. Such evidence 
is entirely consistent with a compensable disability antedating the 
medical testing for some unknown period of time. See Green, 790 F.2d at 
1119 n. 4. Consequently, the Department has consistently found a 
default entitlement date necessary, as a rule of administrative 
convenience, in order to implement the black lung program in an 
effective manner. See generally 30 U.S.C. 936(a) (authorizing Secretary 
to ``issue such regulations as [she] deems necessary to carry out the 
provisions of'' title IV). The choice of the filing date reflects the 
rational assumption that claimants, by and large, file claims or 
modification petitions when they believe themselves entitled to 
benefits (although compensable disability may in fact have occurred 
either prior to, or after, the application date). The Department 
recognizes claimants may file modification petitions for other reasons 
as well, e.g., the claimant may secure the services of an attorney, 
obtain new medical evidence, or intend to prevent the underlying claim 
from becoming finally denied. These reasons do not detract from the 
underlying logic of the default onset date; rather, they simply explain 
why a claimant takes a particular action at a particular time. The 
natural impetus to pursue benefits at all is the individual's belief 
that (s)he is entitled to them. Like the default onset date for claims, 
the same explanation supports a similar approach for awards obtained on 
modification if the miner's condition has changed to the point of 
compensable disability and the actual onset date cannot be ascertained.
    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. See Rochester & Pittsburgh Coal Co. v. Krecota, 868 F.2d 600, 
603 (3d Cir. 1989) (holding that ALJ erroneously relied on filing date 
when medical evidence clearly indicated miner was not disabled until 
several years later). Absent such evidence, however, the rationale 
underlying section 725.503 ensures the miner will receive the 
approximately correct amount of compensation. Accordingly, the 
Department rejects the comment's position that a default onset date 
based on a filing date--of either a claim or a modification petition--
violates section 6(a).
    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.

20 CFR 725.515

    (a) The Department did not open Sec. 725.515 for comment when it 
issued the initial notice of proposed rulemaking, 62 FR 3341 (Jan. 22, 
1997). The Department proposed amending Sec. 725.515 in its second 
notice of

[[Page 80014]]

proposed rulemaking to conform it to changes in federal law which make 
black lung benefits payable by the Black Lung Disability Trust Fund 
subject to garnishment for child support and alimony. 64 FR 54971, 
55001 (Oct. 8, 1999).
    (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. Norfolk Shipbuilding & Drydock 
Corp. v. Nance, 858 F.2d 182, 186 (4th Cir. 1988), cert. den. 492 U.S. 
911 (1989). The BLBA prescribes precisely the amount of monthly 
benefits to which a claimant is entitled. 30 U.S.C. 922(a). This 
statutory compensation schedule represents Congress' judgment as to the 
reasonable level of monthly benefits a totally disabled miner or his or 
her survivor should receive. By incorporating section 16 regarding 
releases (and 15 regarding waiver, see Brown v. Forest Oil Corp., 29 
F.3d 966, 968 (5th Cir. 1994)) of the Longshore and Harbor Workers' 
Compensation Act (LHWCA), 33 U.S.C. 916, 915, into the BLBA, 30 U.S.C. 
932(a), Congress demonstrated its intent to ensure that claimants 
receive the full amount of benefits to which they become entitled, 
thereby having less need to resort to other means of support, including 
public assistance. See generally 1 Larson's Workers' Compensation Law 
(MB) Sec. 1.03[2] (1999). Moreover, making agreements to reduce, divert 
or bargain away benefits absolutely void also provides some level of 
protection to claimants' rights; no party who negotiates such an 
agreement can rely on its terms in the event the claimant elects to 
pursue his or her full rights under a claim. Such protections are 
especially appropriate given the claimant population most affected by 
the BLBA, i.e., elderly, disabled and less educated retired workers and 
their survivors. Prohibiting settlements also recognizes the 
progressive nature of pneumoconiosis. Because this disease may evolve 
over a period of years, the availability of settlements may encourage a 
miner-claimant to forego a future claim for full benefits after the 
pneumoconiosis has progressed to the point of compensable disability in 
lieu of the present payment of a lesser amount. The Department 
therefore considers settlements ill-suited to the BLBA program. 
Finally, although it incorporated sections 16 and 15 of the LHWCA into 
the BLBA, Congress did not incorporate section 8 (allowing for district 
director approval of certain settlements under the LHWCA). The 
Department does not believe Congress meant to allow settlements to 
occur under the BLBA in the absence of an express and direct 
incorporation of such intent.
    (c) No comments were received concerning this section, and no 
further changes have been made in it.

20 CFR 725.522

    In its initial notice of proposed rulemaking, the Department 
proposed a shortened Sec. 725.522, in which subsections (a) and (b) of 
20 CFR 725.522 were combined in proposed Sec. 725.522(a). Discussion of 
when benefit payments are due was moved to a newly expanded 
Sec. 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 Sec. 725.101(a)(6)--is not a payment included 
within ``overpayments'' for purposes of subsection (b). See 62 FR 3351 
(Jan. 22, 1997); 64 FR 54982 (Oct. 8, 1999). No changes have been made 
in this section.

20 CFR 725.530

    (a) In its initial notice of proposed rulemaking, the Department 
proposed a new Sec. 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 Sec. 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 Sec. 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, Sec. 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. See 
also Sec. 725.607(a) (twenty-percent additional compensation assessed 
on unpaid benefits); Sproull v. Director, OWCP, 86 F.3d 895, 900-01 
(9th Cir. 1996), cert. den. sub nom. Stevedoring Services of America, 
Inc. v. Director, OWCP, 117 S.Ct. 1333 (1997) (holding twenty percent 
additional compensation applies to late payment of interest 
notwithstanding employer timely paid underlying benefits) This 
assessment is self-executing, and attaches automatically upon the 
failure to make timely payment regardless of any equitable 
considerations explaining the untimeliness. Severin v. Exxon Corp., 910 
F.2d 286, 288 (5th Cir. 1990). The Department also notes that monthly 
benefit amounts are fixed by law and adjusted only once a year. Most 
black lung benefits are paid by insurance companies or self-insured 
coal companies who have ready access to current monthly benefits rates 
and the expertise to make any necessary computations. Finally, the 
Department notes that the actual amount of time available to the party 
liable for benefits to make a timely payment has been enlarged by 
virtue of changes made in Sec. 725.502(b). That regulation requires the 
liable party to pay the benefits due, pursuant to an effective order, 
for any given month by the fifteenth day of the following month. 64 FR 
55050 (Oct. 8, 1999). Liability for additional compensation in the 
amount of twenty-percent for defaulting on a payment cannot be invoked 
until an additional ten calendar days have passed after the monthly 
benefit becomes due. See Pleasant-El v. Oil Recovery Co., Inc., 148 
F.3d 1300, 1303 (11th Cir. 1998); Burgo

[[Page 80015]]

v. General Dynamics Corp., 122 F.3d 140, 143 (2nd Cir. 1997) cert. den. 
118 S.Ct. 1839 (1998); Reid v. Universal Maritime Serv. Corp., 41 F.3d 
200, 202 (4th Cir. 1994); Irwin v. Navy Resale Exchange, 29 Ben. Rev. 
Bd. Serv. 77 (1995); contra Quave v. Progress Marine, 912 F.2d 798, 800 
(5th Cir. 1990) (holding ten days means ten business days). With 
respect to the initial payment after entry of an award, the responsible 
operator should always have at least 25 days (as shown by the following 
example) in which to make the computation and make the first payment of 
monthly benefits. If an award becomes effective on the last day of 
January, the operator has until February 15th in which to pay the 
benefits attributable to January; the operator also has an additional 
ten days to avoid liability for additional compensation. This amount of 
time should be sufficient to allow the calculation of the benefit 
amount due and pay the claimant, and therefore to comply fully with the 
regulatory deadlines. This minimum period of 25 days comes close to the 
30 day-period suggested by one comment as ``more reasonable.'' In fact, 
in cases in which the order awarding benefits becomes effective at the 
beginning of the month, the operator will have far more than the 
suggested 30 days in which to issue the check. As for payments 
subsequent to the initial payment, the operator has ample time to 
calculate and issue the monthly benefits check before incurring the 
assessment of additional compensation for untimeliness. Continuing with 
the previous example: If the operator has made the initial payment on 
February 15th, the next installment is not due until March 15th; the 
operator then has an additional ten days until the Sec. 14(f) 
assessment attaches in which to make the payment. (ii) The more complex 
computations involve retroactive benefits. Under Sec. 725.502(b)(2), an 
operator need not pay retroactive benefits until the district director 
computes this amount, within 30 days after issuance of an effective 
award, and informs the responsible operator of it. Benefits and 
interest for periods prior to the effective date of the order are not 
due until the thirtieth day following issuance of the district 
director's computation. This time is sufficient to verify the district 
director's computation, and actually allows the employer considerably 
more time than the ten days provided by 20 CFR 725.607(a) in which to 
pay retroactive benefits before liability for twenty-percent additional 
compensation may be imposed.
    (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.

20 CFR 725.533

    The Department did not open Sec. 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.

20 CFR 725.537

    (a) The Department proposed changing Sec. 725.537 in the initial 
notice of proposed rulemaking to harmonize the regulation with proposed 
Sec. 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 (see 
Sec. 725.212(b)). The comments contain no citation to specific 
precedent and no further explanation. They do not afford the Department 
a sufficient basis for any change to the regulation. The Department has 
also addressed comments concerning the retroactive effect of the 
regulations in connection with Sec. 725.2, and see 64 FR 54981-82 (Oct. 
8, 1999).
    (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. See 62 FR 3350-51 
(Jan. 22, 1997). Congress amended the Social Security Act in 1965 to 
allow benefits to a divorced surviving spouse as a ``widow'' of the 
miner. Pub. L. No. 89-97, section 308(b)(1), 79 Stat. 286 (1965). The 
legislative history of the amendment clearly established Congress' 
intent that payment of benefits to two (or more) ``widows'' would not 
reduce the benefits paid to either. S. Rep. No. 404, 89th Cong., 1st 
Sess. (1965), reprinted in 1965 U.S.C.C.

[[Page 80016]]

& A.N. 1943, 2047. In 1972, Congress amended the BLBA definition of 
``widow'' to use the Social Security Act definition. 30 U.S.C. 902(e). 
The legislative history is equally clear that Congress intended to 
conform the BLBA definition to the Social Security Act definition. S. 
Rep. No. 743, 92nd Cong., 2d. Sess., reprinted in 1972 U.S.C.C. & A.N. 
2305, 2332. The BLBA also reinforces this interpretation because it 
requires a ``widow'' to receive benefits at prescribed rates and makes 
no allowance for a reduction based on the existence of more than one 
widow. 30 U.S.C. 922(a)(2). To date, two courts of appeals and the 
Benefits Review Board have accepted the Department's position. Peabody 
Coal Co. v. Director, OWCP [Ricker], 182 F.3d 637, 642 (8th Cir. 1999); 
Mays et al. v. Piney Mountain Coal Co., 21 Black Lung Rep. 1-59, 1-65/
1-66 (1997), aff'd 176 F.3d 753, 764-765 (4th Cir. 1999). No court has 
reached a contrary result, and no comment has addressed the substance 
of this analysis. Consequently, the Department has no basis for 
changing the regulation.
    (d) No other comments were received concerning this section, and no 
changes have been made in it.

20 CFR 725.543

    (a) The Department did not open Sec. 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 Sec. 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 Sec. 725.547. 
The comment does not specifically address the substance of proposed 
Sec. 725.543. The Department responds to comments concerning 
Sec. 725.547 at that provision.
    (c) No other comments were received concerning this section, and no 
changes have been made in it.

20 CFR 725.544

    (a) The Department did not open Sec. 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 Sec. 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 
Sec. 725.547. The comment does not specifically address the substance 
of proposed Sec. 725.544. In any event, this provision only applies to 
the compromise of debts owed the United States government. See 31 
U.S.C. 3711(a).
    (c) No other comments were received concerning this section, and no 
changes have been made in it.

20 CFR 725.547

    (a) In the initial notice of proposed rulemaking, the Department 
proposed amending Sec. 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 Sec. 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. Sec. 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 Sec. 725.543, adopting more current criteria for waiver. See 64 FR 
55055 (Oct. 8, 1999).
    (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. See 64 FR 55055 (Oct. 8, 
1999). The Department therefore disagrees with the commenters who urge 
that the SSA overpayment procedures be abandoned in favor of the LHWCA 
model.

[[Page 80017]]

    (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 Bracher v. Director, OWCP, 14 F.3d 1157 (7th Cir. 1994); the 
Department must evaluate the cost of recovering overpayments against 
the amounts actually recovered; caselaw on waiver issues contradicts 
the Department's view that the standards will protect claimants from 
burdensome recoveries; and courts apply inconsistent interpretations of 
the waiver standards. None of the commenter's arguments warrant 
changing the basic overpayment recovery procedures. (i) The Seventh 
Circuit Court of Appeals' decision in Bracher does not support the 
commenter's position. The Court actually declined to address the 
relationship between the SSA and LHWCA overpayment provisions because 
the petitioner failed to make the argument in earlier proceedings. 14 
F.3d at 1161. The Court also noted, in passing, that the Department has 
the explicit statutory authority in 30 U.S.C. 932(a) to modify 
incorporated LHWCA provisions by issuing regulations which vary the 
terms of those provisions. (ii) With respect to the costs involved in 
undertaking overpayment proceedings, this factor may be considered in 
determining whether to pursue individual cases. Cost alone is not a 
reason to ignore the duty to recover overpayments imposed by the BLBA. 
(iii) The Department disagrees that the cases cited by the commenter 
demonstrate that the waiver and recovery procedures provide inadequate 
protection of claimants' interests. The comment incorrectly states that 
the Seventh Circuit upheld a $47 difference between a claimant's 
monthly income and expenses as a sufficient cushion to allow repayment 
of an overpayment. Benedict v. Director, OWCP, 29 F.3d 1140 (7th Cir. 
1994). The Court actually found that the claimant's monthly income 
exceeded his expenses by at least $110 (not including interest income), 
and that the available financial assets would enable the claimant to 
repay the overpayment without adverse effect on his living standard. 
The comment also cites Bracher, 14 F.3d 1157, as another example of the 
lack of protection afforded claimants by the waiver procedures. In that 
decision, the Seventh Circuit held an individual cannot claim reliance 
on ``erroneous information'' from the agency as a basis for waiver if 
the ``information'' is a district director's award which is later 
overturned. The Court correctly noted that characterizing such awards 
as erroneous agency information would result in waiver for virtually 
any overturned award, and render meaningless a regulatory provision 
which makes interim awards ``overpayments.'' 14 F.3d at 1162. See also 
McConnell v. Director, OWCP, 993 F.2d 1454, 1458 (10th Cir. 1993); Weis 
v. Director, OWCP, 16 Black Lung Rep. 1-56, 1-58 (1990). The comment 
does not explain in what manner Bracher proves the Department has 
exaggerated the extent to which the waiver and recovery regulations 
protect claimants' interests. (iv) Finally, the commenter contends that 
the circuits have reached inconsistent results in determining whether 
to waive recovery of overpayments, citing Benedict, 29 F.3d 1140, and 
McConnell, 993 F.2d 1454. Specifically, the comment expresses concern 
that one court granted a waiver for the claimant because he spent the 
benefits on a vacation while another court denied waiver to a claimant 
who saved the benefits. The results reached in these cases are not 
inconsistent. In McConnell, the Court granted the waiver because the 
miner relied on the receipt of the benefits to pay for the vacation; 
his detrimental reliance could be directly linked to the benefits 
because he would not have taken the vacation without the additional 
money. The Court concluded that permitting the Department to recoup the 
amount of benefits spent on the vacation would violate ``equity and 
conscience.'' 993 F.2d at 1461. With respect to the balance of the 
overpayment, the Court held that the miner had the financial capacity 
to repay the benefits because he had a $114 monthly cushion after 
comparing his income and expenses. 993 F.2d at 1160. Similarly, in 
Benedict, the Court considered a $110 monthly cushion sufficient. The 
Court rejected the argument that recovery would violate ``equity and 
good conscience'' because the miner did not relinquish any right or, 
unlike McConnell, undertake an expense because of the availability of 
the benefits. The Department therefore rejects the comment's 
interpretation of these decisions.
    (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 Sec. 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 Sec. 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 per se 
denial of due process. Delay alone, however, is not a due process 
violation. C & K Coal Co. v. Taylor, 165 F.3d 254, 259 (3d Cir. 1999). 
``It is not the mere fact of the government's delay that violates due 
process, but rather the prejudice from such delay.'' Consolidation Coal 
Co. v. Borda, 171 F.3d 175, 183 (4th Cir. 1999). In the context of 
black lung entitlement litigation, delays have prompted courts to 
transfer liability from operators to the Black Lung Disability Trust 
Fund because agency errors have deprived the operators of the ability 
to defend themselves in a meaningful manner as required by due process. 
Island Creek Coal Co. v. Holdman, 202 F.3d 873, 883-84 (6th Cir. 2000); 
Borda, 171 F.3d at 183-84; Lane Hollow Coal Co. v. Director, OWCP 
[Lockhart], 137 F.3d 799, 808 (4th Cir. 1998). In each of those cases, 
unwarranted delays by the agency precluded the operators from asserting 
defenses to liability; in effect, the claimant won by default. 
Accordingly, delay at some point in the opportunity for adjudication of 
a case may constitute a denial of due process, but a mere allegation of 
delay without any explanation why the delay is unreasonable does not 
substantiate a due process violation. Abbott v. Louisiana Ins. Guaranty 
Assoc., 889 F.2d 626, 632-33 (5th Cir. 1989), citing Cleveland Bd. of 
Education v. Loudermill, 470 U.S. 532, 547 (1985).
    The commenter implies that the prejudice which establishes the 
denial

[[Page 80018]]

of due process is the unrecoverable overpayments generated by the time-
consuming litigation over entitlement. The possibility exists that some 
claims will be approved and require years of litigation before final 
denial, thereby generating large overpayments that may be waived in 
overpayment proceedings under Sec. 725.547. Such a possibility, 
however, does not establish a general violation of due process. First, 
the Department is not solely responsible for the delays in black lung 
benefits litigation, and the caselaw is clear that only prejudicial 
delays caused by the government are the basis for due process concerns. 
Second, the prejudicial effect of delay must be considered in the 
factual context of actual cases, and not simply in the abstract. Third, 
the existence of large overpayments is not necessarily evidence of due 
process violations. If the underlying entitlement adjudication process 
works in a fair manner, then due process has been provided and the size 
of the resulting overpayment is irrelevant. ``The Due Process Clause 
does not create a right to win litigation; it creates a right not to 
lose without a fair opportunity to defend oneself.'' Lane Hollow Coal 
Co., 137 F.3d at 807 (emphasis in original). Finally, the fact that 
large overpayments may eventually be waived does not necessarily amount 
to a due process violation. Section 725.547 provides operators with the 
opportunity to recover overpayments through an adjudicatory scheme 
similar to the entitlement process, with rights to evidentiary 
development, hearing and appeal. The comment does not explain why 
elimination of the waiver process will enhance the operators' ability 
to recover overpayments. The comment does not state a sufficient basis 
for abandoning the regulation.
    (e) One comment supports Sec. 725.547.
    (f) No other comments were received concerning this section, and no 
changes have been made in it.

20 CFR 725.548

    (a) Formerly, in any case involving an underpayment or an 
overpayment, Sec. 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 
Sec. 725.548 in the second notice of proposed rulemaking as a 
regulation of general applicability, and moved Sec. 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.

Subpart I

20 CFR 725.606

    (a) In its initial notice of proposed rulemaking, the Department 
proposed revising Sec. 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 Sec. 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 
Sec. 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

[[Page 80019]]

is responsible, each of which is worth approximately $175,000, could 
become the responsibility of the Black Lung Disability Trust Fund. The 
Department has a duty to protect the assets of the Trust Fund, and thus 
intends to enforce the post-award security provision incorporated into 
the Black Lung Benefits Act from section 14(i) of the Longshore and 
Harbor Workers' Compensation Act, 33 U.S.C. 914(i), as incorporated by 
30 U.S.C. 932(a).
    (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, Sec. 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, Sec. 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, Sec. 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. Ibid. The 
regulations promulgated by the Department to implement the 1978 
amendments also specifically recognized the liability of coal 
transportation employers. See 20 CFR 725.491(a)(1979); 43 FR 36801-02 
(Aug. 18, 1978).
    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. 
See Norfolk & Western Railway Co. v. Roberson, 918 F.2d 1144, 1149-50 
(4th Cir. 1990), cert. denied, 500 U.S. 916. Accordingly, the 
Department does not believe that such an employer should be surprised 
when it receives notification of a claim filed by one of its employees. 
Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384-85 (1947) (``Just 
as everyone is charged with knowledge of the United States Statutes at 
Large, Congress has provided that the appearance of rules and 
regulations in the Federal Register gives legal notice of their 
contents.'') Finally, even though a transportation employer is not 
required to obtain insurance to secure its black lung liability, it 
remains free to purchase such insurance in order to ensure that its 
assets are not depleted by the defense and payment of black lung 
claims.
    (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). See 62 FR 
3367 (Jan. 22, 1997).

20 CFR 725.608

    (a) The Department proposed revising Sec. 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 Sec. 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. See list of Changes in the Department's Second 
Proposal, 64 FR 54971 (Oct. 8, 1999).
    (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, Shaffer v. Director, OWCP, 21 Black 
Lung Rep. (MB) 1-98, 1-99 (Ben. Rev. Bd. 1998), a responsible operator 
is not obliged to pay attorney's fees until the claimant successfully 
establishes entitlement to benefits in a final award. Because appeals 
may delay an award's finality for years, the attorney's fees awarded at 
earlier stages of the litigation will diminish in real value as a 
result of inflation. Interest from the date of a fee award, however, 
will reduce the inroads made by inflation. An award of interest will 
therefore encourage attorneys to

[[Page 80020]]

represent claimants because the value of their fees will be protected, 
notwithstanding delays in actual payment. The Department wishes to 
encourage attorney representation of claimants, believing it a means to 
enhance the fairness of the adjudication process. The Department 
therefore rejects the commenters' objection to the allowance of 
interest on attorneys' fees in principle.
    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. Sec. 928, as incorporated by 30 
U.S.C. Sec. 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. Missouri v. 
Jenkins, 491 U.S. 274, 284 (1989) (decided under Civil Rights 
Attorney's Fees Award Act); see also Pennsylvania v. Delaware Valley 
Citizens' Council, 483 U.S. 711, 716 (1987) (dicta, decided under Clean 
Air Act); Goodloe v. Peabody Coal Co., 19 Black Lung Rep. 1-91, 1-101-
102 (1995), vac. on other grounds sub nom Peabody Coal Co. v. Director, 
OWCP, 116 F.3d 207 (7th Cir. 1997) (overruling prior decisions 
prohibiting augmentation of attorney fee for delay, citing Jenkins). 
Consequently, interest on an attorney's fee may be awarded consistent 
with section 28 to compensate an attorney for delay in receiving his 
fees.
    The Court of Appeals for the Fourth Circuit recently addressed this 
issue in Kerns v. Consolidation Coal Co., 176 F.3d 802 (4th Cir. 1999). 
A claimant's attorney was awarded fees by an administrative law judge 
in 1984, but was not able to collect those fees until the award became 
final in 1990. He then filed a motion for supplemental attorneys' fees 
based on the six-year delay between the award and its payment. The ALJ 
denied the motion, and the Benefits Review Board affirmed. In reversing 
the Board, the court noted that a 1995 decision of the Board, Nelson v. 
Stevedoring Services of America, 29 BRBS 90 (1995), had authorized the 
enhancement of an attorney's fee for delay under the Longshore and 
Harbor Workers' Compensation Act. The court concluded that ``current 
law'' thus required enhancement for delay, and remanded the case to 
allow the ALJ to consider the merits of the attorney's supplemental fee 
request. 176 F.3d at 805. Section 725.608 simply provides a mechanism 
for ensuring that claimants' attorneys receive this enhancement in each 
case involving a responsible operator.
    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, i.e., the time between the fee award and 
the actual payment. It is not intended to compensate the attorney for 
any delay between the performance of his work and the award of fees by 
the appropriate adjudicator. If, for example, a claimant filed his 
application in 1995, and was not awarded benefits by an administrative 
law judge until 1999, Sec. 725.608 will require only that interest be 
paid to the attorney from the date the ALJ approves the fee petition 
until the date that the attorney collects that amount. It will not 
provide interest from the date on which the attorney performed the 
work. In such cases, it is the responsibility of the attorney who 
submits a fee request to ensure that the request reflects any necessary 
enhancement for the delay between the performance of the work and the 
award of the fee. There are several methods by which an attorney may 
seek enhancement of his fee award to cover this delay. For example, the 
attorney could request the adjudication officer to use the attorney's 
current rate (his rate at the time he applies for the fee), rather than 
his historical rate (the rate at the time he performed the work), to 
calculate the fee to which he is entitled. Thus, the attorney in the 
example above, who performed 20 hours of work in 1995 but did not 
submit his fee petition until benefits were awarded in 1999, might use 
the $125 hourly rate he customarily charged in 1999 rather than the 
$100 hourly rate he charged in 1995. Using the current rate would 
permit the attorney to claim an additional $500, and would compensate 
him for the delay between the time he performed the work and date of 
the fee award. Another method of attaining the same result would be to 
calculate a ``lodestar'' amount by multiplying the number of hours the 
attorney worked by his historical rate, and then requesting the 
adjudication officer to augment that figure by an additional amount 
intended to compensate the attorney for the delay. Thus, the attorney 
in the example might request that the adjudication officer multiply the 
lodestar amount by an additional 25 percent. In either case, the fee 
awarded by the adjudicator, in concert with the interest provided by 
Sec. 725.608, will ensure that when the attorney finally receives 
payment, he is fully compensated for the work he performed.
    (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.

20 CFR 725.609

    (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. See list of Changes in the Department's 
Second Proposal, 64 FR 54971 (Oct. 8, 1999).

[[Page 80021]]

    (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.

20 CFR 725.620

    (a) In its first notice of proposed rulemaking, the Department 
proposed amending the cross-reference in subsection (a) from 
Sec. 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 Sec. 725.620 in its second notice 
of proposed rulemaking. See Changes in the Department's Second 
Proposal, 64 FR 54971 (Oct. 8, 1999).
    (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 Sec. 725.620(d) in the Department's listing of 
comments by issue. See, e.g., Exhibit 71 in the Rulemaking Record. They 
do not directly affect Sec. 725.620, however. Subsection (d) of the 
regulation implements section 15(b) of the Longshore and Harbor 
Workers' Compensation Act, 33 U.S.C. 915, as incorporated by 30 U.S.C. 
932(a), rather than section 16, 33 U.S.C. 916, as incorporated by 30 
U.S.C. 932(a), the statutory provision governing settlements. The 
Department has responded to the comments concerning settlement of black 
lung claims in its Final Regulatory Flexibility Analysis.
    (c) No other comments were received concerning this section, and no 
changes have been made in it.

20 CFR 725.621

    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 Sec. 725.621 in its second notice of 
proposed rulemaking. See Changes in the Department's Second Proposal, 
64 FR 54971 (Oct. 8, 1999). No comments were received concerning this 
section. The Department has removed an unnecessary comma from 
subsection (b) in order to make the regulation easier to understand, 
but no other changes have been made in it.

Subpart J

20 CFR 725.701

    (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, i.e., treatment, supplies and other medical services for the 
disabling pneumoconiosis. In its initial notice of proposed rulemaking, 
the Department proposed amending Sec. 725.701 to establish a 
presumption of medical benefits coverage for the treatment of any 
pulmonary disorder. 62 FR 3423 (Jan. 22, 1997). This presumption 
derived from a judicially-created presumption first announced by the 
Court of Appeals for the Fourth Circuit in Doris Coal Co. v. Director, 
OWCP [Stiltner,] 938 F.2d 492 (4th Cir. 1991). The Department explained 
the means by which the presumption could be rebutted, and limited the 
type of evidence relevant to rebuttal by excluding any medical opinion 
premised on the absence of disabling pneumoconiosis. The Department 
based its exclusion of certain medical evidence in rebuttal on the fact 
that the existence of the miner's totally disabling pneumoconiosis had 
already been established in the underlying claim for monthly benefits. 
62 FR 3369, 3423 (Jan. 22, 1997). The Department received a number of 
comments critical of the presumption. Some comments alleged the 
presumption would effectively compensate miners for disorders caused by 
smoking cigarettes and raise the operators' health care costs. Other 
comments contended the presumption did not have a sound medical basis. 
64 FR 55003 (Oct. 8, 1999).
    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 Glen Coal Co. v. Seals, 
147 F.3d 502 (6th Cir. 1998), and Gulf & Western Indus. v. Ling, 176 
F.3d 226 (4th Cir. 1999). 64 FR 55003-04 (Oct. 8, 1999). The Department 
noted both decisions agreed that the Doris Coal presumption shifted 
only the burden of production to the party opposing benefits, and was 
therefore valid under the Administrative Procedure Act (APA), 5 U.S.C. 
Sec. 556(d) (proponent of rule bears burden of persuasion) and 
Director, OWCP v. Greenwich Collieries, 512 U.S. 267 (1994). The 
Department also pointed out that the majority in Seals rested on a 
relatively narrow point: that the administrative law judge and Benefits 
Review Board erroneously applied Fourth Circuit precedent when Sixth 
Circuit law controlled and was inconsistent with Doris Coal. 147 F.3d

[[Page 80022]]

at 514 (Dowd, D.C.J), 515 (Boggs, J.). Citing the need for a uniform 
standard of national applicability, the Department proposed several 
changes to Sec. 725.701. 64 FR 55004 (Oct. 8, 1999). The Department 
eliminated the reference to ``ancillary pulmonary conditions'' in 
subsection (b) because the phrase was unnecessary and arguably 
confusing. 64 FR 55004 (Oct. 8, 1999). The Department also changed the 
language of subsection (e) to clarify the specific facts which might 
rebut the presumption that a particular medical expense is compensable. 
Subsection (e) contains a rebuttable presumption that a pulmonary 
disorder for which the miner receives a medical service or supply is 
caused or aggravated by pneumoconiosis. 64 FR 55060 (Oct. 8, 1999). In 
the second proposal, the Department also clarified subsection (f) to 
ensure that the party opposing benefits does not attempt to relitigate 
established facts by using medical evidence for rebuttal which is 
premised on the absence of totally disabling pneumoconiosis. Finally, 
the Department acknowledged the controlling weight a report from a 
treating physician may receive in determining the compensability of a 
service or supply. 64 FR 55004 (Oct. 8, 1999).
    (b) The Department has revised the rebuttal provisions set forth in 
Sec. 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 
General Trucking Corp. v. Salyers, 175 F.3d 322 (4th Cir. 1999), the 
Court reviewed the various means of rebutting the Doris Coal 
presumption as presented in Ling:

    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.' Ling, 176 F3d at 233. It does not follow, 
however, that proof of these two circumstances is the exclusive 
means of rebutting the presumption.
    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.' Ling, 176 F.3d at 232.

175 F.3d at 324. The Salyers decision emphasizes the importance of 
affording the party liable for medical benefits an opportunity to rebut 
the presumption with evidence that the service provided treated a 
condition which became manifest after the underlying adjudication of 
entitlement, or that it treated a preexisting pulmonary condition 
adjudged not to have contributed to disability. It is the Department's 
intent merely to codify the Court's coverage presumption and its 
rebuttal methods as outlined in Fourth Circuit precedent. In light of 
Salyers and Ling, the Department has revised Sec. 725.701(e) to conform 
the regulation's rebuttal provisions to the decisions issued by the 
Fourth Circuit since Doris Coal. Accordingly, the Department has 
replaced the phrase ``was not for a covered pulmonary disorder as 
defined in Sec. 718.201 of this subchapter,'' with ``was for a 
pulmonary disorder apart from those previously associated with the 
miner's disability[.]'' The foregoing explanation also responds to one 
comment which faulted the Department for omitting any discussion of 
Salyers in the second notice of proposed rulemaking.
    (c) In response to its second notice of rulemaking, the Department 
received numerous comments opposing the medical benefits program in 
general or the Sec. 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 Sec. 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 
Sec. 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 
Doris Coal presumption, invocation shifts only the burden of 
production, not persuasion. The operator must confront the presumption 
by submitting evidence which, if credited, establishes one of the means 
of rebuttal. Section 725.701(f), however, does preclude one defense: 
the operator cannot escape liability by trying to prove the medical 
service cannot pertain to disabling pneumoconiosis because the miner 
was disabled solely from smoking or some other non-occupational cause. 
Once the miner establishes (s)he is entitled to disability benefits, no 
element of entitlement can be relitigated or otherwise questioned via 
the medical benefits litigation. Consequently, the operator and its 
physician must accept that the miner has a totally disabling 
respiratory or pulmonary impairment, and that pneumoconiosis, as 
defined in Sec. 718.201, is a substantially contributing cause of that 
impairment. See Ling, 176 F.3d at 232 and n.13, citing Doris Coal, 938 
F.2d at 497 (operator cannot rebut presumption of benefits coverage by 
showing miner's pneumoconiosis did not at least aggravate pulmonary 
condition because ``[t]he time for that argument had passed with the 
prior adjudication of disability'').
    (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 Seals and 
Ling in its analysis of those cases. 64 FR 55003-04 (Oct. 8, 1999). The 
commenter also states the Department cannot ``overrule'' Seals by 
regulation because that decision is based on an interpretation of the 
APA. The Department rejects both arguments. The commenter does not 
identify any specific mischaracterization or other error in the 
Department's interpretation of either decision. The Department believes 
its analysis is correct, and declines to change its position on the 
meaning of those decisions except to the

[[Page 80023]]

extent reflected in changes to the rebuttal provisions contained in 
Sec. 725.701(e). As for departing from the APA analysis of the majority 
in Seals, the comment is simply incorrect. The specific majority 
holding of Seals reversed the decisions of the administrative law judge 
and Benefits Review Board because of an incorrect application of Fourth 
Circuit law to a case arising in the Sixth Circuit. Judge Boggs 
(concurring), however, agreed with Judge Moore (dissenting) ``that it 
would not necessarily contravene Greenwich Collieries for the Secretary 
to adopt a regulation shifting the burden of production in the manner 
of Doris Coal.'' 147 F.3d at 517. Consequently, the majority holding 
does not rest on any APA considerations, and a majority of the panel, 
albeit in dicta, acknowledges the Department's authority under 
Greenwich Collieries (and, by extension, the APA) to promulgate 
regulatory presumptions which reallocate burdens among parties. The 
Department therefore rejects this comment.
    (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 
Sec. 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 medically unwarranted does not necessarily undermine its 
validity as a legal, or evidentiary, presumption. The Department 
understands the physician's objection to mean a physician would not 
rely on such a presumption as a basis for treating a patient. Most of 
the statutory and regulatory presumptions in the black lung benefits 
program, however, draw factual inferences from a combination of medical 
and non-medical facts for purposes other than patient care. See 30 
U.S.C. Sec. 921(c)(1) (miner's pneumoconiosis presumed caused by coal 
mine employment if miner worked ten years); (c)(3) (miner who has 
complicated pneumoconiosis irrebuttably presumed totally disabled); 20 
CFR. Sec. 727.203(a)(1)-(4) (proof of one of enumerated medical facts 
about miner's pulmonary condition invokes presumption of all remaining 
elements of entitlement); 20 CFR. Sec. 725.309 (material change in 
miner's medical condition presumed if miner proves one element of 
entitlement in duplicate claim previously not proven). ``Like all rules 
of evidence that permit the inference of an ultimate fact from a 
predicate one, black lung benefits presumptions rest on a judgment that 
the relationship between the ultimate and the predicate facts has a 
basis in the logic of common understanding.'' Mullins Coal Co. v. 
Director, OWCP, 484 U.S. 135, 157 n. 30 (1987), reh'g den. 484 U.S. 
1047 (1988). The Department explained the logical basis and 
administrative purpose for the presumption in the notice of reproposed 
rulemaking. See generally 64 FR 55004 (Oct. 8, 1999). A miner who is 
entitled to disability benefits has proven three basic medical facts: 
(s)he has pneumoconiosis as that disease is defined by Sec. 718.201; 
(s)he has a totally disabling respiratory or pulmonary impairment; and 
the pneumoconiosis significantly contributes to that respiratory or 
pulmonary impairment. Consequently, the miner has established a 
connection between the compensable disease and the disabling lung 
condition. From those proven facts, Sec. 725.701(e) draws a rational 
inference that the need for treating the miner's compromised 
respiratory condition at any given time is necessitated, directly or 
indirectly, by the presence of pneumoconiosis. This inference is 
rebuttable, and the operator may submit evidence showing the treatment 
is 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. The Fourth Circuit endorsed the same 
general line of reasoning in Ling when it upheld the validity of the 
Doris Coal presumption. 176 F.3d at 233-34. The Department therefore 
disagrees with the commenter that Sec. 725.701(e) does not have a 
supportable basis which satisfies the legal test for a rational 
presumption.
    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 Ling:

    Hence, rather than compel the miner to exhaustively document his 
claim for medical benefits, i.e., requiring him to again laboriously 
obtain all the evidence that he can that his shortness of breath, 
wheezing, and coughing are still the result of his pneumoconiosis, 
we have fashioned the Doris Coal presumption as a shorthand method 
of proving the same thing. The proof needed is a medical bill for 
the treatment of a pulmonary or respiratory disorder and/or 
associated symptoms.

176 F.3d at 233 (emphasis in original). Section 725.701(e) does not 
eliminate the need for medical documentation for treatment and 
services. The presumption merely provides a short-hand means of 
identifying expenses which are likely to be legitimate unless the 
liable party opposes payment of particular expenses.
    (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 Sec. 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 Doris Coal Co. v. Director, OWCP, 938 
F.2d 492, 497-98 (4th Cir. 1991). Finally, the comment

[[Page 80024]]

objects to the basic concept of special deference to a treating 
physician's opinion as proposed in Sec. 718.104(d). With respect to 
allegations of fraud, the professional integrity of any physician 
should be accepted until particular acts of malfeasance are established 
in the appropriate forum. The comment's allegations that particular 
physicians are motivated by financial incentives can as easily be 
directed toward any party-affiliated physician, or group of such 
physicians, who may benefit by tailoring conclusions to fit the 
interests of the party paying for the medical opinion. As for the 
commenter's specific suggestion that there is no cost containment in 
the program and that health care providers routinely seek payment from 
the program for unrelated charges, the Department accepts the holding 
in Doris Coal. In this decision, the Court refused to sanction the 
practice of submitting an unitemized bill for multiple services because 
such a practice could impose liability on the insurer for services 
unrelated to the treatment of the miner's pneumoconiosis and encourage 
fraud. 938 F.2d at 497-98. The Court, however, only alluded to the 
potential for fraud if unitemized billing were permitted. It did not 
address the practice as an historical reality or beyond the facts 
involving the one treating physician involved in the case. The 
Department therefore rejects the position that miners' treating 
physicians should be viewed with special suspicion as a group because 
of a motive for fraudulent diagnoses and/or treatment. The Department 
responds to the objections concerning special deference to the treating 
physician's opinion, as proposed in Sec. 718.104(d), in the preamble to 
that subsection.
    (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 
Sec. 725.701.
    (j) No other comments were received concerning this section, and no 
other changes have been made in it.

20 CFR 725.706

    The Department proposed changing the no-approval dollar amount in 
Sec. 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.

20 CFR Part 726--Black Lung Benefits; Requirements for Coal Mine 
Operators' Insurance

    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, see 62 FR 3340-41 (Jan. 22, 1997) (lists of technical 
revisions and unchanged regulations); 64 FR 54970-71 (Oct. 8, 1999) 
(same). Therefore, no changes are being made to Part 726 in its 
entirety.

Subpart A

 20 CFR 726.2

    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. See list of Changes in the Department's Second 
Proposal, 64 FR 54971 (Oct. 8, 1999). The Department has capitalized 
the word ``subpart'' in subsection (b) to be consistent with the use of 
that word in subparts (c), (d), and (e). In subsection (d), the 
Department has replaced the phrase ``coal operator'' with the phrase 
``coal mine operator'' to be consistent with subsections (c) and (e). 
No comments were received concerning this section, and no other changes 
have been made in it.

20 CFR 726.3

    This regulation was not opened for comment in the Department's 
first notice of proposed rulemaking. See list of Unchanged Regulations, 
62 FR 3341 (Jan. 22, 1997). The Department proposed a revision to 
subsection (b) in its second notice of proposed rulemaking at the 
request of the Office of Federal Register to clarify the treatment of 
cases in which the regulations in Part 726 appear to conflict with the 
regulations incorporated from Part 725. 64 FR 55005 (Oct. 8, 1999). In 
subsection (a), the Department has replaced the phrase ``coal 
operator'' with the phrase ``coal mine operator'' to be consistent with 
subsection (b). No comments were received concerning this section, and 
no other changes have been made in it.

20 CFR 726.8

    (a) The Department proposed adding Sec. 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 Sec. 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 Sec. 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. Lovilia Coal Co. v. Williams, 
143 F.3d 317, 325 (7th Cir. 1998). The Department also justified the 
scope of the proposed definition as well within the rulemaking 
authority granted the Department by Congress.
    (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. See 64 Fed. 
Reg. 55005 (Oct. 8, 1999). The Department does not agree that the 
regulations it issues to implement the Black Lung Benefits Act 
interfere with employment relationships recognized by the various 
states. The Black Lung Benefits Act requires that a coal mine 
operator's liability for a miner's black lung benefits be based on that 
operator's employment of the miner. See 30 U.S.C. 932(a) (making the 
operator of a coal mine liable for benefits based on ``death or total 
disability due to pneumoconiosis arising out of employment in such

[[Page 80025]]

mine''). Congress did not specifically define the term ``employment,'' 
however. In such cases, an administrative agency is authorized to 
promulgate regulations to fill the gaps Congress left in the statute. 
Morton v. Ruiz, 415 U.S. 199, 231 (1974). In addition, the Department 
is authorized to promulgate regulations to ensure sufficient insurance 
coverage for all of the liabilities borne by operators under the Act. 
30 U.S.C. 933(b)(3) (permitting the Secretary to promulgate regulations 
governing the content of insurance policies issued to cover liability 
under the Black Lung Benefits Act). The Department's definition of the 
terms ``employ'' and ``employment'' is intended to meet its 
responsibility to properly administer the Black Lung Benefits Act. The 
Department does not believe that its definitions will in any way affect 
the application of state law to the relationships between coal mine 
operators and the miners they employ.
    (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. Sec. 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. Sec. 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. See 20 CFR 726.203 (1999). Contrary to 
the commenter's suggestion, the rule thus does not make insurers and 
state funds the enforcement officers of the Department. Rather, the 
traditional coal mine operator is simply on notice that it may be held 
liable for the benefits of leased employees if the leasing company 
fails to procure the necessary insurance coverage, or for any civil 
money penalties arising as a result of that failure.
    (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. See 
discussions of Sec. 725.2 at 62 Fed. Reg. 3347-48 (Jan. 22, 1997) and 
64 Fed. Reg. 54981-82 (Oct. 8, 1999). In those discussions, the 
Department recognized that it lacks the authority to make substantive 
changes to the regulations in a manner that applies retroactively. For 
example, if the previous civil money penalty regulation, 20 CFR 725.495 
(1999), did not permit the assessment of penalties against an operator 
for its failure to secure the benefits payable to its leased employees, 
the Department may not assess a penalty against that operator under the 
revised regulations for any period prior to the effective date of these 
regulations. Although the Department believes that the previous 
regulation is broad enough to permit the assessment of civil money 
penalties in these cases, it also recognizes that the issue must be 
resolved on a case-by-case basis in the context of litigating penalty 
assessments.
    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 Sec. 726.203, an insurer is already liable for all of the 
miners employed by its insured. See Lovilia Coal Co. v. Williams, 143 
F.3d 317, 322 (7th Cir. 1998). An employer's liability, in turn, is 
determined by the regulations set forth at 20 CFR Secs. 725.491-.495. 
The Department has stated explicitly that the revised version of those 
regulations will not be applied retroactively. See Sec. 725.2. 
Accordingly, if the prior regulations did not permit the imposition of 
liability against a coal mine operator for benefits owed to a miner 
whose services were obtained from a leasing company, they will not 
permit imposition of liability against that operator's insurer. The 
Department thus does not agree that the revised regulation is 
impermissively retroactive.
    (e) No other comments were received concerning this section, and no 
changes have been made in it.

Subpart B

20 CFR 726.101

    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. See list of Changes in the Department's Second 
Proposal, 64 FR 54971 (Oct. 8, 1999). The Department has revised

[[Page 80026]]

subsections (b)(1), (2), and (3), and subsection (c) in order to 
clarify the meaning of the regulation. No comments were received 
concerning this section, and no other changes have been made in it.

20 CFR 726.104

    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. See 
list of Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 
8, 1999). The Department has revised subsections (a) and (d) to clarify 
the meaning of those provisions. The Department received one comment 
concerning this regulation; that comment is addressed under 
Sec. 726.106. No other comments were received concerning this section, 
and no other changes have been made in it.

20 CFR 726.105

    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. See list of Changes in the 
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999). The 
Department has revised the first and third sentences of the regulation 
in order to clarify their meaning. No comments were received concerning 
this section, and no other changes have been made in it.

20 CFR 726.106

    (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. See 
list of Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 
8, 1999).
    (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 United States of America v. Insurance Co. of North 
America, 83 F.3d 1507 (D.C. Cir. 1996), the Department argued that a 
surety assumes liability for all of an operator's existing obligations 
when the bond is written and continuing until the termination of the 
bond. The Court rejected this argument. It held that a surety is liable 
only for those obligations which actually accrue to the responsible 
operator during the lifetime of the bond, and not for all outstanding 
liabilities of the insured entity. 83 F.3d at 1511. The Court also 
rejected the notion that each successive bond exonerates any previous 
surety to which liability has attached. 83 F.3d at 1512-13. The Court 
based these holdings on its interpretation of the bond language itself. 
Consequently, the commenter's recommendation can be accomplished only 
by further specifying in the bond's language, as prescribed by the 
Department, the scope of the bond's coverage and its terms of release. 
The Department has yet to determine whether revision of the bond form 
is appropriate. In any event, the commenter's suggestion does not 
require changing the language of the regulation.
    (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.

20 CFR 726.109

    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. See list of Changes in the Department's Second 
Proposal, 64 FR 54971 (Oct. 8, 1999). The Department has revised the 
second and third sentences of the regulation in order to clarify their 
meaning. No comments were received concerning this section, and no 
other changes have been made in it.

20 CFR 726.110

    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. See list of 
Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 8, 
1999). The Department has revised the regulation to clarify its 
meaning. No comments were received concerning this section, and no 
other changes have been made in it.

20 CFR 726.111

    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. See list of Changes in the Department's 
Second Proposal, 64 FR 54971 (Oct. 8, 1999). The Department has revised 
the regulation to clarify its meaning. No comments were received 
concerning this section, and no other changes have been made in it.

20 CFR 726.114

    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. See list of Changes in the 
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999). In the third 
sentence of subsection (a), the Department has replaced the word 
``have'' with the word ``has'' to make the sentence grammatically 
correct. The Department has also revised subsections (a) and (c) to 
clarify their meaning. No comments were received concerning this 
section, and no other changes have been made in it.

Subpart C

20 CFR 726.203

    (a) The Department made technical revisions to Sec. 726.203 in its 
first notice of proposed rulemaking, but did not open the regulation 
for comment. See

[[Page 80027]]

list of Technical revisions, 62 FR 3340-41 (Jan. 22, 1997). At the 
Department's July 22, 1997 hearing in Washington, D.C., however, the 
Department heard testimony indicating that, since 1984, the insurance 
industry had used an endorsement for black lung insurance that differed 
from the endorsement set forth in Sec. 726.203. Transcript, Hearing on 
Proposed Changes to the Black Lung Program Regulations, July 22, 1997, 
p. 127 (testimony of Robert Dorsey). In its written comments, the 
industry stated that the Department had approved use of the new 
endorsement. Because the Department's records contained no document 
authorizing use of a different endorsement, the Department opened the 
regulation for comment, and invited the industry to produce proof that 
the Department had approved the change. In addition, the Department 
invited comment on the endorsement language that the insurance industry 
had supplied. 64 FR 55005-06 (Oct. 8, 1999).
    (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 Sec. 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. See 
Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15-16 (1976) (observing 
that the Act has ``some retrospective effect''). Because operators were 
not required to purchase insurance until January 1, 1974, however, the 
endorsement contained a second clause providing coverage if the miner's 
last exposure in the employment of the insured operator ``occurred 
prior to (effective date) and claim based on such disease is first 
filed against the insured during the policy period.'' Thus, if a miner 
last worked for XYZ Coal Company in 1972, but did not file a claim 
until July 1, 1978, the insurer whose policy covered XYZ on the 1978 
filing date would be liable for the miner's benefits.
    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. National Independent Coal 
Operators Association, Inc. v. Old Republic Insurance Co., 544 F. Supp. 
520, 527-8 (W.D.Va. 1982). The court accordingly rejected the argument 
of the insurers that the term ``in force'' was synonymous with the term 
``policy period,'' and that an insurer was liable only to the extent of 
amendatory or supplementary laws enacted during the one-year period 
covered by each policy. See 20 CFR 726.206 (a policy shall be issued 
for the term of one year from the date on which it becomes effective). 
The court stated that if the insurers had intended that meaning ``it 
should have been made clear to the plaintiffs [operators] by either 
using `policy period' where the words `in force' appear, or by defining 
`in force' somewhere in the contract.'' National Independent Coal 
Operators Association at 528.
    The court's decision was issued in 1982, and the insurance industry 
quickly accepted the court's invitation.

[[Page 80028]]

The revised endorsement, apparently submitted to the Department in 
1983, replaces the language in the current endorsement that obligates 
the insurer to cover liability resulting from amendments while the 
policy is ``in force'' with a phrase obligating the insurer to cover 
liability resulting from ``any amendment to the law that is in effect 
during the policy period.'' This altered language would permit the 
insurance industry to accomplish what it failed to win in the 1982 
litigation, i.e., an exemption from liability resulting from any future 
amendments. Like the other proposed change, this revision would 
increase the exposure of coal mine operators and the Black Lung 
Disability Trust Fund, and is therefore unacceptable to the Department.
    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 
Sec. 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 Lovilia Coal Co. v. Williams, 143 F.3d 317 (7th Cir. 1998), 
in which the Court of Appeals for the Seventh Circuit held that the 
federal black lung insurance endorsement was not subject to exclusions 
available under state law, the Department also does not believe that it 
would be appropriate.
    The commenter also renews a suggestion, made in response to the 
first notice of proposed rulemaking, that subsections (b) and (c)(2) of 
Sec. 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 
Sec. 725.493 have created a conflict with Sec. 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.

20 CFR 726.208

    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 to the regulation in the second notice of proposed 
rulemaking. Accordingly, no changes are being made in this section.

20 CFR 726.211

    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.

Subpart D

20 CFR 726.300-726.320

    (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. See list of Changes in the Department's Second Proposal, 64 
FR 54971 (Oct. 8, 1999).
    (b) The Department has made several minor changes to the 
regulations in Subpart D of Part 726. In Sec. 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 Sec. 726.308, the Department corrected the address of the Black Lung 
Benefits Division of the Office of the Solicitor and added a reference 
to Sec. 725.311, which lists federal holidays. In Sec. 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 Secs. 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 Sec. 725.495 (1999)) that coal mine 
operators either purchase commercial insurance or qualify as self-
insured entities. The commenter argues that if Sec. 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 Sec. 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

[[Page 80029]]

Sec. 725.495 (1999) would eliminate the need to revisit the 
Department's method of identifying responsible operators. Consequently, 
the revised regulations represent a necessary exercise of the 
Department's rulemaking authority.
    (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. Sec. 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.

20 CFR Part 727

    (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. See discussion of 
Sec. 725.4, above; 62 FR 3348, 3386 (Jan. 22, 1997). The Department did 
not discuss Part 727 in its second notice of proposed rulemaking. See 
list of Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 
8, 1999).
    (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.

Drafting Information

    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.

Executive Order 12866

    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.

Unfunded Mandates Reform Act

    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.

Executive Order 13132

    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.''

Paperwork Reduction Act

    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.

Regulatory Flexibility Act, as Amended

    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.'' Associated 
Fisheries of Maine, Inc. v. Daley, 127 F.3d 104, 111 (1st Cir. 1997). 
The preamble to the RFA provides in part as follows:

    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.

Pub. L. 96-354, 94 Stat. 1165 (1980).
    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 Federal Register when the notice of proposed 
rulemaking is published, and a copy of the analysis must be sent to the 
Chief Counsel for Advocacy of the Small Business Administration.

[[Page 80030]]

    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.'' Alenco Communications, Inc. v. FCC, 201 F.3d 608, 625 (5th 
Cir. 2000). Because of the serious concerns raised in the comments to 
its initial notice of proposed rulemaking, however, the Department 
undertook an extensive analysis of the effect of its proposed rule on 
the coal mining industry in general and on small businesses, as defined 
by the Small Business Administration, in particular. Rulemaking Record, 
Exhibit 80. That analysis determined that the potential costs of the 
Department's rule would be imposed on most coal mine operators through 
higher insurance premiums, and that, in the long term, those insurance 
premiums could be expected to rise by 39.3 percent. Exhibit 80 at p. 
44. The analysis assumed that all coal mine operators purchased 
insurance to cover their obligations, although it noted that this 
assumption probably overstated costs with respect to operators that are 
authorized to self-insure. Logically, operators self-insure only if 
they may do so at a lower cost. Exhibit 80 at p. 44. The analysis 
calculated that an increase in premiums of this magnitude would result 
in a total annual cost to the industry between $32.22 million and 
$88.32 million, with a point estimate of $57.56 million. Exhibit 80 at 
p. 46. The Department believes that these figures contain substantial 
upward biases, and that they therefore overstate, by a considerable 
amount, the total cost to industry. Specifically, the Department 
estimated the costs based on the insurance premiums paid by underground 
coal mine operators. The insurance premiums paid by surface mine 
operators, which employ a substantial percentage of the people working 
in coal mine employment, are significantly lower. (See the economic 
analysis prepared by Milliman & Robertson, Inc., at p. 6, Table 4; 
Rulemaking Record Exhibit 89-37, Appendix A.) In addition, coal mine 
operators who self-insure their liabilities under the Black Lung 
Benefits Act may be assumed to do so because their costs are lower than 
the costs of commercial insurance. Although it is conservatively high, 
the Department believes the $57.56 million point estimate to be the 
most useful indicator of industry costs. The analysis concluded that 
the effects of this rise in insurance costs would be most heavily felt 
by underground bituminous coal mine operators with less than 20 
employees, who would be in a poorer position to recoup those costs. 
Some of those operators, the analysis observed, might be forced to 
suspend operations. Exhibit 80 at pp. 56-59.
    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.

5 U.S.C. 604(a). The agency must make a copy of its final regulatory 
flexibility analysis available to the public, and must publish its 
analysis or a summary of its analysis in the Federal Register. 5 U.S.C. 
604(b). The Department's final regulatory flexibility analysis is 
published below.

Need for, and Objectives of, the Rule

    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

[[Page 80031]]

Lung Benefits Act. The Department's initial analysis provided examples 
of much needed regulatory updates such as those needed to reflect 
decisions of the courts of appeals and to clarify the Department's 
original intent when certain regulations were promulgated. Similarly, 
the Department noted the proposed regulatory revisions reflected 
changes that had occurred over the previous 20 years in the diagnosis 
and treatment of pneumoconiosis. Paragraphs (1), (3), (4), and (6) of 
the section entitled ``Reasons for, and Objectives of, the Proposed 
Rule,'' discussed areas in which the Department sought to update its 
regulations.
    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, see 48 FR 24272 (May 31, 
1983), and those revisions reflected only substantive changes made to 
the Black Lung Benefits Act by the Black Lung Benefits Revenue Act of 
1981, Pub. L. 97-119, Title I, 95 Stat. 1635 (1981) and the Black Lung 
Benefits Amendments of 1981, Pub. L. 97-119, Title II, 95 Stat. 1644 
(1981), both of which became effective on January 1, 1982. Most of the 
regulations have not been revised since they were originally 
promulgated: Part 718 in 1980, Part 722 in 1973, and Parts 725 and 727 
in 1978. See 45 FR 13678 (Feb. 29, 1980); 38 FR 8328 (March 30, 1973); 
43 FR 36772 (Aug. 18, 1978). Some regulations, however, did not reflect 
the amendments to the Black Lung Benefits Act enacted over the last 
quarter century. For example, Part 722 sets forth criteria states must 
meet when seeking certification from the Secretary that their workers' 
compensation programs provide ``adequate coverage'' for occupational 
pneumoconiosis. These regulations were never revised in light of either 
the Black Lung Benefits Reform Act of 1977, Pub. L. 95-239, 92 Stat. 95 
(1978), or the Black Lung Benefits Amendments of 1981. Similarly, the 
Secretary's Part 725 regulations required revision in order to reflect 
amendments to other statutes. For example, revised Sec. 725.621 
reflected the Debt Collection Improvement Act of 1996, Pub. L. 104-334, 
110 Stat. 1358 (1996), see preamble to first notice of proposed 
rulemaking, Sec. 725.621, 62 FR 3369 (Jan. 22, 1997). Section 725.515 
was revised to reflect amendments to the Social Security Act, see 
preamble to second notice of proposed rulemaking, Sec. 725.515, 64 FR 
55001 (Oct. 8, 1999). Section 725.544 was amended to reflect the 
statutory increase in the dollar amount of claims which may be 
compromised by the United States and to reflect the repeal of the 
Federal Claims Collection Act, see preamble to second notice of 
proposed rulemaking, Sec. 725.544, 64 FR 55002 (Oct. 8, 1999).
    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 Sec. 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 
Sec. 725.309 references those decisions noting that pneumoconiosis is a 
latent, progressive disease. See preamble to Sec. 718.201, paragraph 
(f), preamble to Sec. 725.309, paragraph (b). The Department's revised 
definition of ``pneumoconiosis'' in Sec. 718.201 explicitly 
incorporates both of these principles. The Department's revisions of 
Secs. 718.204 (criteria for establishing that a miner suffers from 
total disability due to pneumoconiosis) and 718.205 (criteria for 
establishing that a miner died due to pneumoconiosis) codify nearly 
unanimous case law interpreting the Department's prior regulations. See 
preamble to Sec. 718.204, paragraph (d), explaining that the definition 
of ``total disability'' requires proof of a totally disabling 
respiratory or pulmonary impairment, preamble to Sec. 718.205, 
paragraph (d), providing practical meaning to the regulatory standard 
that death is due to pneumoconiosis when pneumoconiosis is a 
substantially contributing cause of death; see also 62 FR 3345 (Jan. 
22, 1997) (citing cases defining when total disability is due to 
pneumoconiosis under 20 CFR 718.204 (1999)). Similarly, revised 
sections 725.309, governing subsequent claims filed by the same 
individual, and 725.310, governing requests for modification of a 
claim, reflect a body of decisional law that has developed since these 
regulations were promulgated in 1978. See preamble discussions of 
Sec. 725.309, 62 FR 3351-52 (Jan. 22, 1997), 64 FR 54984-85 (Oct. 8, 
1999), and above; and preamble discussions of Sec. 725.310, 62 FR 3353-
54 (Jan. 22, 1997), 64 FR 54985-86 (Oct. 8, 1999), and above.
    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 Director, OWCP v. Trace Fork Coal Co., 67 
F.3d 503, 507 (4th Cir. 1995), viz., that ``[t]he Black Lung Benefits 
Act and its accompanying regulations do not specifically address who 
has the burden of proving the responsible operator issue.'' Similarly, 
where the Board or the appellate courts have interpreted a regulation 
in a manner different from that intended by the Department, the only 
way to ensure that the Department's intent is fulfilled is to amend the 
regulations. See, e.g., preamble to first notice of proposed 
rulemaking, Sec. 718.101, 62 FR 3341 (Jan. 22, 1997) (noting intent 
that standards for ensuring the quality of medical evidence be made 
uniformly applicable to all new evidence developed in the claims 
adjudication process).
    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

[[Page 80032]]

benefits from coal mine operators, see preamble to first notice of 
proposed rulemaking, Sec. 725.502, 62 FR 3365-66 (Jan. 22, 1997). 
Similarly, the Department had learned that the rules governing 
overpayments and their possible waiver varied depending on whether the 
overpayment was made by the Black Lung Disability Trust Fund or a coal 
mine operator, see preamble to first notice of proposed rulemaking, 
Sec. 725.547, 62 FR 3366 (Jan. 22, 1997).
    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, see 30 U.S.C. 923(b). The Department's revisions will allow 
each miner to select a highly qualified physician to perform his 
evaluation from a list of authorized providers maintained by the 
Department. See preamble discussion of Sec. 725.406, 64 FR 54988-90 
(Oct. 8, 1999). The Department hopes thereby to provide each claimant 
with a realistic appraisal of his condition and to provide each claim 
with a sound evidentiary basis. The regulations governing the 
additional development and submission of evidence will ensure that the 
parties to a claim receive fewer documents to which they need to file a 
response than was formerly the case. Thus, rather than issue initial 
findings and a memorandum of conference, formerly provided for in the 
regulations (20 CFR 725.410, 725.411, 725.417 (1999)), the district 
director will issue only one decisional document at the conclusion of 
his processing: a proposed decision and order. See preamble discussion 
of Secs. 725.410-725.413. In addition, the revised regulations will 
allow the Department to generate documents that provide a clearer and 
better reasoned explanation of any evidentiary evaluation made by the 
district director and a better understanding by the parties of their 
rights and responsibilities. Thus, the district director will issue a 
schedule for the submission of additional evidence which explains his 
preliminary analysis of the results of the miner's complete pulmonary 
evaluation. It will notify all parties of their right to submit 
additional evidence and to obtain further adjudication of the claim. 
See preamble discussion of Secs. 725.410-725.413. One of the most 
important revisions made by the Department will limit the parties' 
submission of documentary medical evidence. This revision will require 
that the factfinder evaluate a claimant's eligibility based on the 
quality of medical evidence that the parties submit, rather than the 
numerical superiority of the evidence on either side. See preamble 
discussion of Sec. 725.414, 64 FR 54994 (Oct. 8, 1999); 62 FR 3356-57 
(Jan. 22, 1997).

Significant Issues Raised by Public Comments in Response to Initial 
Regulatory Flexibility Analysis

    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, see, e.g., Venicassa v. Consolidation Coal 
Co., 137 F.3d 197, 198 n.2 (3d Cir. 1998) (noting ``a disturbing record 
of delay in processing claims for black lung benefits in prior 
cases''). The Department's regulations are intended to eliminate that 
delay by, inter alia, reducing the number of steps in the district 
director's processing of a claim, requiring the timely development of 
evidence relevant to the issue of operator liability and eliminating 
the possibility of remands from the Office of Administrative Law Judges 
for the development of additional evidence as to the identity of the 
liable party. The Department's revised regulations promote fairness and 
credibility in claims adjudications by providing each miner with a 
quality medical evaluation of his pulmonary condition when he first 
applies, by explaining the Department's initial assessment of that 
evidence and by informing all parties of their rights to submit 
additional evidence and to request further adjudication of the claim.
    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 Associated Fisheries, the First Circuit 
quoted with approval from the Commerce Department's explanation of its 
responsibilities under the Regulatory Flexibility Act:

    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

[[Page 80033]]

alternatives, and to require the agency to state its reasons for not 
adopting an alternative having less of an adverse impact on small 
entities.

127 F.3d at 115-116. The Regulatory Flexibility Act thus vests the 
Department with the responsibility for determining, in light of the 
recognized costs, whether the rule should nevertheless be promulgated.
    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, i.e., the maximum additional costs that industry would 
face as a result of these rules. For example, the analysis assumed that 
all coal mine operators purchase commercial insurance. The Department 
did not attempt, however, to estimate precisely the number of mines 
which would close as a result of these increased costs. Instead, the 
Department concluded that there was only a significant potential for 
closures in the very smallest size class of underground bituminous coal 
mine, those with under 20 employees. Rulemaking Record, Exhibit 80, 
Exhibits O and Q. These mines will feel the greatest effect of the 
Department's rule largely because of their operating characteristics. 
As a group, very small coal mines are far more labor intensive (i.e., 
much less mechanized) than larger coal mines. Because the rule will 
raise costs in the form of higher insurance premiums, which in turn are 
based on each mine's payroll, increased premiums will represent a 
substantially higher cost increase per ton of coal mined for a very 
small mine than for a larger mine. Thus, based on its preliminary 
economic analysis (Rulemaking Record, Exhibit 80, pp. 46-51), the 
Department found that larger mines--including many mines that meet the 
definition of a ``small'' business under the definition used by the 
Small Business Administration--would not face significant impacts from 
the rule in terms of closures.
    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

[[Page 80034]]

underground mines (39 underground mines minus 1 mine with 20 or more 
employees). These mines are extremely small. They had a total of 411 
employees (220 in strip mines and 191 in underground mines). Median 
1998 employment was 3; mean employment was 4.8. Median production of 
these anthracite mines was 4,500 short tons (7,484 for strip mines and 
2,598 for underground mines); mean production was 12,173 short tons 
(17,116 for strip mines and 6,060 for underground mines).
    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,'' i.e., the 
number of mines that would close regardless of whether the Department 
promulgated new regulations. This is particularly important for an 
industry such as coal mining, where the number of small mines has been 
declining for decades, and where a continued sharp decline is likely in 
the foreseeable future. Only after establishing the base case can the 
Department estimate the extent to which the rule may result in 
additional closures.
    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 (see 
Department of Energy, Energy Information Administration, ``Challenges 
of Electric Power Industry Restructuring for Fuel Suppliers'' 
(September 1998) (hereafter, ``Challenges,''), Table ES1, p. 13), the 
models were used to forecast the percentage decrease in the number of 
coal mines in the base case in the years 2005 and 2015, and the 
decreases that may result from the Department's rule during the same 
interval.

[[Page 80035]]

    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, i.e., the extent to 
which the mining industry will absorb the costs of compliance by 
reducing either employment or output. It is possible, however, to make 
a rough estimate of these effects. The number of incremental closures 
of bituminous mines due to the rule (rather than the base case), was 
projected to be 6 mines as of 2005 and 4 mines as of 2015. This 
conclusion is consistent with the Department's previous analysis, which 
observed that the largest impact of the rule would be to close some 
mines sooner than they would have closed in the base case. Estimated 
employment impacts related to closures would be 70 jobs as of 2005 and 
45 jobs as of 2015. Estimated production impacts related to closures 
would be 208,880 short tons of bituminous coal annually as of 2005 and 
133,736 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. The estimated level of impacts--
about one-eighth of the baseline closure rate as of 2005 and one tenth 
the baseline closure rate as of 2015--is much too small to have a 
meaningful impact on the competitive structure of the industry.
    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

[[Page 80036]]

substitute capital for labor. A number of factors, however, make any 
such impact minimal in its significance. Because the costs of the rule 
are generally not significant, the incentive itself will be quite 
small. Increases in production will tend to mitigate job loss. By 
itself, any impact of the rule on employment is almost certainly small 
enough to be handled by attrition in an industry with an annual labor 
turnover rate of approximately 7 percent. Because the base case trend 
toward labor saving innovation in the coal mining industry is so 
strong, any adverse effect on employment will be a temporary 
acceleration of job loss, rather than a net long-term impact. Moreover, 
in the current strong employment market, any unemployment effects will 
generally be transitory, so that their significance will be minimal. 
For these reasons, aside from mine closures, the rule will not have 
significant adverse impacts on employment.
    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. See A.M.L. International, Inc. v. Daley, 107 F. Supp. 
2d 90, 105 (D. Mass. 2000) (``The intent of the RFA is not to limit 
regulations having adverse economic impacts on small entities.''). 
Because the Department believes that a revision of the regulations 
implementing the Black Lung Benefits Act is long overdue, the 
Department has decided to proceed with this final rule.
    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, see 
also Rulemaking Record, Exhibit 89-37, pp. 31-32.
    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 Sec. 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 Sec. 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 any physician to conduct their 
initial evaluation, 20 CFR 725.406(a) (1999), subject only to a 
district director's approval, which was seldom refused. Claimants 
generally submitted no more than one additional medical report in 
support of their applications. Thus, once again, the rate of Trust Fund 
awards forms a reasonable upper boundary of the approval rate expected 
in responsible operator cases under the revised regulations.

[[Page 80037]]

    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 Sec. 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); see also preamble to Sec. 718.104, paragraph (f). Accordingly, 
the Department does not agree that this revision will result in the 
approval of ``numerous'' additional claims. The Department stands by 
its assumption in the initial regulatory flexibility analysis that any 
increase in the approval rate of claims due to this regulation will be 
``very small.'' Exhibit 80 at p. 34. The Department reiterates that 
``[i]t is difficult to see how this provision would lead to an increase 
in approval of weak or non-meritorious claims.'' Exhibit 80 at p. 27. 
The commenter's assertions have thus failed to undermine the 
Department's assumption that the approval rate for Trust Fund claims 
represents an appropriate upper bound for estimating the approval rate 
applicable to operator claims under the revised regulations.
    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, 
Hearing on Proposed Changes to the Black Lung Program Regulations (July 
22, 1997), p. 106 (testimony of Robert Briscoe), it excludes denied 
claims filed by such miners from the total number of filed claims. In 
its prior analysis, M&R stated that this exclusion was justified 
because claims filed by miners with less than 10 years of coal mine 
employment will not be ``present in the population of coal miners 
recently leaving the coal workforce.'' Rulemaking Record, Exhibit 5-
160, Appendix 5, p. 28. The Department's database of claim filing 
information, however, does not support the inference that this group 
should not be counted in determining the approval rate for claims that 
are being filed currently. Indeed, throughout the last decade, claims 
filed by miners with less than 10 years of coal mine employment have 
represented approximately one-quarter of the total number of 
responsible operator claims. Because these claims continue to represent 
a significant number of responsible operator claims, the Department 
believes that both approved and denied claims from this group should be 
counted. Accordingly, the Department does not agree that its approval 
rate must be ``corrected'' by excluding these claims.
    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 (i.e., by $1.00 per $100 
of payroll). Because the Department's analysis of the rule's cost was 
based on a percentage increase of existing rates, use of the M&R 
figures would result in a substantially lower estimate of total dollar 
costs. The substantial difference between the Department's analysis of 
insurance rate increases and M&R's prediction derives primarily from 
different assumptions about the approval rate for claims filed after 
the regulations go into effect. Because the Department does not believe 
that the approval rate for responsible operator claims will exceed the 
approval rate for Trust Fund claims, the Department does not believe 
that M&R's predictions concerning insurance rates are accurate. In any 
event, insurance rate increases are subject to approval by state 
authorities.
    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

[[Page 80038]]

Department's, because M&R excludes claimants with less than 10 years of 
coal mine employment. The Department believes that it is not necessary 
to change the methodology used in the initial regulatory flexibility 
analysis to estimate the likely increase in claims resulting from the 
revised regulations.
    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 (e.g., longwall mining), 
investment in more productive equipment, consolidation to achieve 
economies of scale, closure of high-cost mines, and takeover and 
restructuring of high cost mines to operate them more economically. The 
EIA has observed that ``the relationship between coal prices and 
productivity gains is circular: Productivity gains allow coal prices to 
be lowered and price declines induce actions by coal producers that 
raise productivity and cut costs' (EIA, ``Challenges,'' Chapter 1, p. 
I-12). The problem that small coal mines face is that they are less 
able than large mines to implement such productivity enhancing 
measures. As a result, small inefficient coal mine operators are being 
squeezed by larger more efficient mine operators.
    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--

[[Page 80039]]

impacts on profits. See Rulemaking Record, Exhibit 80, pp. 52-56. For 
the reasons outlined above, the Department continues to believe that 
this is the case. Because of the difficulty of quantifying these 
effects, however, the quantitative analysis will continue to assume 
zero cost pass-through. The uncertainty as to the extent to which costs 
can be passed through does not mean that the Department is unable to 
estimate impacts, however. Rather, the assumptions that the analysis 
made to deal with the uncertainty result in estimates of impacts on 
profits and closures that are known to be biased upward--as is 
appropriate for a conservative analysis of impacts.
    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, see discussion of 
alternatives, below, and preamble to Part 722, the Department has not 
altered its proposal in response to any of the comments it received in 
response to the initial regulatory flexibility analysis.

Small Businesses to Which the Rule Will Apply

    The revised regulations implementing the Black Lung Benefits Act 
will apply, like the Act itself, to coal mine operators. See, e.g., 30 
U.S.C. 932(b) (``each such operator shall be liable for and shall 
secure the payment of benefits * * * ''). The term ``operator'' 
includes not only traditional coal mining companies, but also employers 
who provide services to such companies, including coal mine 
construction and coal transportation companies. 30 U.S.C. 802(d). In 
the initial regulatory flexibility analysis published in its second 
notice of proposed rulemaking, the Department observed that the 
Regulatory Flexibility Act requires an administrative agency to use the 
definition of a ``small business'' promulgated by the Small Business 
Administration unless the agency, after consulting with the SBA's 
Office of Advocacy and providing an opportunity for public comment, 
establishes its own definition. 5 U.S.C. 601(3). (The Department's 
regulations do not apply to any small organizations or small 
governmental jurisdictions; accordingly, the Department's analysis is 
limited to small businesses.) The Department therefore announced its 
intention to use the SBA definition, which establishes

[[Page 80040]]

criteria for different industries, arranged by the Standard Industrial 
Codes (SICs) used by the Bureau of the Census. SBA's regulations define 
a small business in the coal mining industry (SIC Codes 1220, 1221, 
1222, 1230, and 1231) as one with fewer than 500 employees. A small 
business in the coal mining services industry (SIC Codes 1240 and 1241) 
is one with less than $5 million in annual receipts. 64 FR 55007-08 
(Oct. 8, 1999).
    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.

Projected Reporting, Recordkeeping, and Other Compliance 
Requirements of the Rule

    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 
Sec. 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

[[Page 80041]]

than $450,450 (70 percent of 429 claims times $1,500) for each year 
thereafter. In light of the point estimate of $57.56 million in annual 
costs identified by the Department's economic analysis of the proposed 
rule, these additional costs are not significant. In any event, these 
additional costs will be at least partially offset by the savings 
realized in all cases from the reduced number of required operator 
responses. In addition, the Department's decision to 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 will 
result in additional savings to coal mine operators in some cases.

Description of Steps the Agency has Taken to Minimize the Impact on 
Small Entities Consistent With the Stated Objectives of Applicable 
Statutes; Discussion of Alternatives

    The primary objective of the Black Lung Benefits Act is set forth 
in Sec. 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.

30 U.S.C. 901. The statute also seeks to ensure, however, that 
liability for a miner's benefits is borne by the entity most 
responsible for the development of that miner's totally disabling 
pneumoconiosis. Prior to 1978, claims that were not paid by individual 
coal mine operators were paid by the federal government from general 
revenues. In 1978, Congress created the Black Lung Disability Trust 
Fund, financed by an excise tax on coal production, to assume the 
payment of benefits in cases for which no individual operator bore 
liability. Congress clearly indicated its preference that the Trust 
Fund should be considered a payment source of last resort. In 
discussing the successor operator provisions of the Black Lung Benefits 
Reform Act of 1977, enacted in 1978, the Senate Committee on Human 
Resources, whose bill contained the provisions ultimately included in 
the Act, stated: ``It is further the intention of this section, with 
respect to claims [in] which the miner worked on or after January 1, 
1970, to ensure that individual coal mine operators rather than the 
trust fund bear the liability for claims arising out of such operator's 
mine, to the maximum extent feasible.'' S. Rep. 95-209, 95th Cong., 1st 
Sess. 9 (1977), reprinted in House Comm. On Educ. And Labor, 96th 
Cong., Black Lung Benefits Reform Act and Black Lung Benefits Revenue 
Act of 1977, 612 (Comm. Print).
    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, i.e., one 
with few miner-employees. Finally, the Department invited comment from 
interested parties as to other alternatives that would reduce the 
financial impact of the rules on the small business community.
    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. See 5 U.S.C. 609(a).
    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. Exercising the authority of 30 U.S.C. 943 (NMA alternatives 1 
and 2, M&R alternatives 1 and 2). Section 933 of the Black Lung 
Benefits Act, 30 U.S.C. 943, authorizes the Secretary of Labor to 
establish a Black Lung Compensation Insurance Fund to allow coal mine 
operators to purchase insurance to secure their obligations under the 
Act. The Fund may be used to insure coal mine operators directly, 30 
U.S.C. 943(c)(1), or to enter into reinsurance agreements with one or 
more insurers or pools of insurers, 30 U.S.C. 943(c)(2). The Act 
provides an important limitation on the Secretary's authority, however: 
``The Secretary may exercise his or her authority under this section 
only if, and to the extent that, insurance coverage is not otherwise 
available, at reasonable cost, to operators of coal mines.'' 30 U.S.C. 
943(b) (emphasis added). The record contains no evidence that would 
allow the Secretary to determine, under subsection (b), that insurance 
coverage is not currently available at reasonable cost to operators of 
coal mines.

[[Page 80042]]

Consequently, the statute does not permit the ``alternative'' suggested 
by the commenters. Projections provided by the mining and insurance 
industries, however, predict significantly higher percentage increases 
in the cost of commercial black lung insurance if these rules become 
final. The Department disagrees with these projections and has 
explained its reasoning above. The Department also recognizes its 
obligation, however, to closely monitor insurance rates, especially any 
increase in rates that may result from the final promulgation of the 
Department's regulations. To the extent that rates do increase, the 
Department will have to determine whether those increases have resulted 
in insurance becoming unavailable at a reasonable cost to coal mine 
operators, the statutory prerequisite for the Secretary's authority 
under 30 U.S.C. 943(b).
    2. Naming only the most likely responsible operator (NMA 
Alternative 3, M&R alternative 3). The NMA suggests that the Department 
name only the most likely responsible operator, which the NMA asserts 
was the Department's practice under its former regulations. The M&R 
analysis states that the Department could form an insurance fund to 
reimburse the Black Lung Disability Trust Fund for claims in which the 
most likely responsible operator is ultimately determined not to be 
liable for the payment of benefits, thereby imposing an unwarranted 
liability on the Fund. The Department does not agree that it formerly 
named only the most likely responsible operator. In its discussion of 
Sec. 725.408, the Department observed that, where necessary, it made 
more than one operator a party to a claim under the prior regulations. 
See preamble to Sec. 725.408, paragraph (f). In addition, M&R's 
solution to the problem of imposing additional risk on the Trust Fund--
that the Department use an ``insurance fund'' to reimburse the Trust 
Fund for such claims--is flawed on two counts: 1) for the reasons 
described above, the Department cannot establish an insurance fund 
absent a finding that insurance is not available at reasonable cost; 
and 2) reimbursement of the Trust Fund for such claims is not among the 
statutorily-prescribed uses for monies in an insurance fund, see 30 
U.S.C. 943(g)(1)(A)-(C).
    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, see 
preamble to Sec. 725.414. The Department has therefore reconsidered its 
administrative processing of cases in which the identity of the 
responsible operator is in doubt. As revised, the regulations permit 
the district director to refer a case to the Office of Administrative 
Law Judges with no more than one operator included as a party to the 
claim. See preamble to Sec. 725.418. The Department recognizes that 
this approach imposes additional risk on the Black Lung Disability 
Trust Fund. See preamble to Sec. 725.414. The Department has concluded 
that this risk is acceptable, however, because all the potentially 
liable operators will be required to submit evidence relevant to the 
issue of operator liability while the case is pending before the 
district director. The district director will thus have available all 
of the relevant evidence when he finally designates the operator 
responsible for payment of a claim. That one operator will remain a 
party in further proceedings.
    The Department does not believe that this alternative is a truly 
significant one--i.e., one which will provide the affected small 
business community with significant relief from the costs of the 
Department's regulatory revisions. First, it will apply in only a small 
percentage of cases. The Department estimates that less than 10 percent 
of responsible operator cases involve substantial questions as to the 
identity of the operator that should be liable for the payment of 
benefits. In addition, only 33 percent of all cases filed are referred 
to the Office of Administrative Law Judges. Accordingly, the 
Department's revision will likely affect only 3 percent of responsible 
operator cases. Second, the additional cost that would have been 
required by continued operator participation is relatively small. It is 
true that operators will no longer have to defend against an effort by 
the designated responsible operator to shift liability to them beyond 
the district director level. Instead, once a case is referred to the 
Office of Administrative Law Judges, if the designated responsible 
operator shows that it does not meet the criteria for a responsible 
operator, Sec. 725.495, liability will shift to the Trust Fund. The 
costs associated with an operator's continued participation in a claim 
before the Office of Administrative Law Judges would have been small, 
however, because the operator would already have had to develop and 
submit all evidence relevant to the liability issue while the case was 
pending before the district director. The final regulations do not 
alter that requirement. A second set of costs eliminated by the 
Department's revision are those associated with monitoring the 
designated responsible operator's litigation of the claimant's 
eligibility while the case is pending before the Office of 
Administrative Law Judges. The Department's proposal would have 
permitted a potentially liable operator to submit its own documentary 
medical evidence upon establishing that the designated responsible 
operator had not undertaken a full development of the evidence. The 
Department does not believe that this situation would have arisen 
often, and thus believes that the overall costs associated with 
exercising this right were not significant. The costs relevant to both 
of these issues were thus largely the costs associated with hiring an 
attorney to monitor the litigation and, as appropriate, attend the 
hearing or file a brief to argue on the operator's behalf. In preparing 
its economic analysis, the Department used the industry's estimate of 
$6,000 as the current average cost for defending a claim that proceeds 
beyond the district director level. See preamble to Sec. 725.407. This 
cost includes not only attorneys' fees, but also the development of 
evidence relevant to operator liability and claimant eligibility. The 
Department does not believe that the fees charged by an attorney to 
monitor the litigation and present argument represent a large component 
of the estimated costs. Accordingly, in light of both the small number 
of affected cases and the minimal expenses involved, the Department 
does not consider that its adoption of this alternative will result in 
significant savings to small coal mine operators.
    3. Establish criteria to determine when a state's workers' 
compensation program provides ``adequate coverage'' for totally 
disabling pneumoconiosis (NMA alternative 4, M&R alternative 4). 
Section 421 of the Black Lung Benefits Act, 30 U.S.C. 931, requires the 
Secretary to publish in the Federal Register a list of all states whose 
workers' compensation laws provide ``adequate coverage'' for 
occupational pneumoconiosis. The Secretary's certification that a state 
provides adequate coverage prevents any claim for benefits arising in 
that state from being adjudicated under the Black Lung Benefits Act.
    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

[[Page 80043]]

amended since 1973, and that, in light of statutory amendments in 1978 
and 1981, those regulations were obsolete. 62 FR 3347 (Jan. 22, 1997). 
Accordingly, the Department proposed to delete the specific criteria 
contained in Part 722. The Department proposed replacing them with a 
general statement that it would review any state's application for 
certification in light of the provisions of the then-current Act, and 
the principle that the state law would be certified only if it 
guaranteed at least the same compensation, to the same individuals, as 
was provided by the Act.
    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. Permit the settlement of black lung claims (NMA Alternative 5). 
The NMA suggests, without further explanation, that permitting the 
settlement of black lung claims will reduce the impact of the 
Department's regulatory revisions on small coal mine operators. The 
Department believes that the Black Lung Benefits Act does not allow the 
settlement of claims, and that permitting the settlement of claims 
would be contrary to the objectives of the Act in any event.
    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.'' American Mutual Liability Ins. Co. of Boston v. Lowe, 85 
F.2d 625, 628 (3d Cir. 1936); see also Lumber Mutual Casualty Ins. Co. 
of New York v. Locke, 60 F.2d 35, 37 (2d Cir. 1932).
    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. See Act of June 25, 1938, c. 685, Sec. 5, 52 Stat. 1166. 
The federal courts have long interpreted the section 8 procedure as the 
only means by which an injured employee could validly settle a claim 
for compensation. See, e.g., Norfolk Shipbuilding & Drydock Corp. v. 
Nance, 858 F.2d 182, 185-6 (4th Cir. 1988), cert. denied, 492 U.S. 911 
(1989); Oceanic Butler v. Nordahl, 842 F.2d 773, 776 n. 3 (5th Cir. 
1988). In incorporating certain procedures of the LHWCA into the Black 
Lung Benefits Act, however, Congress specifically excluded LHWCA 
Sec. 8. See list of excluded provisions in 30 U.S.C. 932(a). Moreover, 
although Congress authorized the Secretary to vary the terms of 
incorporated LHWCA provisions in order to administer the Black Lung 
Benefits Act, it forbade the Department from promulgating provisions 
that were ``inconsistent with those specifically excluded * * *.'' By 
this language, Congress expressed its intention that the Secretary not 
use the broad powers granted her by the Black Lung Benefits Act to 
provide by regulation the substance of provisions that Congress had 
explicitly declined to incorporate. See Senate Conference Committee 
Report, reprinted in Committee Print, 94th Cong., 1st Sess., 
Legislative History of the Federal Coal Mine Health and Safety Act of 
1969 at 1624 (``The Secretary of Labor is also authorized to publish 
additional provisions by regulation, together with all or part of the 
applicable provisions of said Act other than those specifically 
excluded * * *.''), quoted in Director, OWCP v. National Mines Corp., 
554 F.2d 1267, 1274 n. 31 (4th Cir. 1977).
    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, Sec. 20, 86 Stat. 1264 (1972); Pub. 
L. 98-426, Sec. 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. See Pub. L. 98-
426, Sec. 28(h)(i), 98 Stat. 1655 (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.'' Harman Mining Co. v. 
Stewart, 826 F.2d 1388, 1390 (4th Cir. 1987). Interpreting the Act so 
as to

[[Page 80044]]

permit a totally disabled miner to accept a settlement that reduces 
that minimum level of benefits would thus contravene one of the basic 
objectives of the Act. Former coal miners tend to apply for black lung 
benefits shortly after they leave employment in the coal industry or 
when they retire, usually at the same time they file an application for 
Social Security benefits, rather than in response to a specific 
diagnosis or injury. The population of claimants thus tends to be 
significantly different than is the case with the population of claims 
under other workers' compensation programs, including the LHWCA. 
Because of the latent, progressive nature of pneumoconiosis, see 
preamble to Sec. 725.309, a substantial number of applicants whose 
initial claims are denied are ultimately determined to be eligible for 
black lung benefits. In its second notice of proposed rulemaking, the 
Department observed that the approval rate for subsequent claims filed 
by miners whose initial claims were denied (10.56 percent) is higher 
than the approval rate for first-time applicants (7.47 percent). 64 FR 
54984 (Oct. 8, 1999). These statistics demonstrate that first-time 
applicants may not fully appreciate the extent to which they may be 
affected by pneumoconiosis later in life. As a result, the Department 
believes that it would be inappropriate to encourage or permit such 
applicants to bargain away the minimum level of benefits guaranteed 
them by Congress. Accordingly, the Department does not accept the 
suggestion that permitting settlement, even if it were not forbidden by 
the Act, represents an alternative to the Department's rule that is 
consistent with the objectives of the Black Lung Benefits Act.
    5. Establish cost-containment mechanisms for health care providers 
(NMA alternative 6).
    Through the incorporation of LHWCA Sec. 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.'' BethEnergy Mines, Inc. v. Director, 
OWCP, 32 F.3d 843, 847 (3d Cir. 1994). Thus, the statute and its 
implementing regulations afford an operator ample opportunity to 
challenge the reasonableness of any amount that a claimant seeks as 
payment for medical services. Although the Department will continue to 
refine its cost-containment procedures, it does not believe that these 
procedures represent an ``alternative'' to its rulemaking activities. 
Rather, cost-containment must take place simultaneously with any 
revision of the Department's regulations to ensure that the revisions 
do not produce any unreasonable changes in health care expenditures.
    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.

[[Page 80045]]

Conclusion

    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.

List of Subjects in 20 CFR Parts 718, 722, 725, 726, 727

    Black lung benefits, Lung disease, Miners, Mines, Workers' 
compensation, X-rays.

    Signed at Washington D.C., this first day of December, 2000.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
    1. The authority citation for part 718 continues to read as 
follows:

    Authority: 5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 
FR 3174, 30 U.S.C. 901 et seq., 902(f), 934, 936, 945, 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.


Secs. 718.401-718.404  [Removed]

    2. Part 718 is amended by removing subpart E (Secs. 718.401-
718.404), revising subparts A through D, revising Appendices A and C, 
and revising the text of Appendix B (the tables, B1 through B6, in 
Appendix B remain unchanged):

PART 718--STANDARDS FOR DETERMINING COAL MINERS' TOTAL DISABILITY 
OR DEATH DUE TO PNEUMOCONIOSIS

Subpart A--General
Sec.
718.1  Statutory provisions.
718.2  Applicability of this part.
718.3  Scope and intent of this part.
718.4  Definitions and use of terms.
Subpart B--Criteria for the Development of Medical Evidence
718.101  General.
718.102  Chest roentgenograms (X-rays).
718.103  Pulmonary function tests.
718.104  Report of physical examinations.
718.105  Arterial blood-gas studies.
718.106  Autopsy; biopsy.
718.107  Other medical evidence.
Subpart C--Determining Entitlement to Benefits
718.201  Definition of pneumoconiosis.
718.202  Determining the existence of pneumoconiosis.
718.203  Establishing relationship of pneumoconiosis to coal mine 
employment.
718.204  Total disability and disability causation defined; criteria 
for determining total disability and total disability due to 
pneumoconiosis.
718.205  Death due to pneumoconiosis.
718.206  Effect of findings by persons or agencies.
Subpart D--Presumptions Applicable to Eligibility Determinations
718.301  Establishing length of employment as a miner.
718.302  Relationship of pneumoconiosis to coal mine employment.
718.303  Death from a respirable disease.
718.304  Irrebuttable presumption of total disability or death due 
to pneumoconiosis.
718.305  Presumption of pneumoconiosis.
718.306  Presumption of entitlement applicable to certain death 
claims.

Appendix A to Part 718--Standards for Administration and Interpretation 
of Chest Roentgenograms (X-rays)

Appendix B to Part 718--Standards for Administration and Interpretation 
of Pulmonary Function Tests. Tables B1, B2, B3, B4, B5, B6

Appendix C to Part 718--Blood-Gas Tables

Subpart A--General


Sec. 718.1  Statutory provisions.

    (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 Sec. 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)).


Sec. 718.2  Applicability of this part.

    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.


Sec. 718.3  Scope and intent of this part.

    (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 Sec. 718.306 partially, disabled due to

[[Page 80046]]

pneumoconiosis or died due to pneumoconiosis. It also specifies the 
procedures and requirements to be followed in conducting medical 
examinations and in administering various tests relevant to such 
determinations.
    (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.


Sec. 718.4  Definitions and use of terms.

    Except as is otherwise provided by this part, the definitions and 
usages of terms contained in Sec. 725.101 of subpart A of part 725 of 
this title shall be applicable to this part.

Subpart B--Criteria for the Development of Medical Evidence


Sec. 718.101  General.

    (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 Secs. 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.


Sec. 718.102  Chest roentgenograms (X-rays).

    (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 
Sec. 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 Sec. 718.202).


Sec. 718.103  Pulmonary function tests.

    (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

[[Page 80047]]

executing the report shall set forth the reasons for such failure;
    (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.


Sec. 718.104  Report of physical examinations.

    (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 Sec. 718.102; and
    (6) The results of a pulmonary function test conducted and reported 
as required by Sec. 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 Sec. 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 Sec. 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) Treating physician. In weighing the medical evidence of record 
relevant to whether the miner suffers, or suffered, from 
pneumoconiosis, whether the pneumoconiosis arose out of coal mine 
employment, and whether the miner is, or was, totally disabled by 
pneumoconiosis or died due to pneumoconiosis, the adjudication officer 
must give consideration to the relationship between the miner and any 
treating physician whose report is admitted into the record. 
Specifically, the adjudication officer shall take into consideration 
the following factors in weighing the opinion of the miner's treating 
physician:
    (1) Nature of relationship. The opinion of a physician who has 
treated the miner for respiratory or pulmonary conditions is entitled 
to more weight than a physician who has treated the miner for non-
respiratory conditions;
    (2) Duration of relationship. The length of the treatment 
relationship demonstrates whether the physician has observed the miner 
long enough to obtain a superior understanding of his or her condition;
    (3) Frequency of treatment. The frequency of physician-patient 
visits demonstrates whether the physician has observed the miner often 
enough to obtain a superior understanding of his or her condition; and
    (4) Extent of treatment. The types of testing and examinations 
conducted during the treatment relationship demonstrate whether the 
physician has obtained superior and relevant information concerning the 
miner's condition.
    (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.


Sec. 718.105  Arterial blood-gas studies.

    (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

[[Page 80048]]

paragraphs (a), (b), and (c), noncomplying tests may form the basis for 
a finding if, in the opinion of the adjudication officer, the only 
available tests demonstrate technically valid results. This provision 
shall not excuse compliance with the requirements in paragraph (d) for 
any blood gas study administered during a hospitalization which ends in 
the miner's death.


Sec. 718.106  Autopsy; biopsy.

    (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.


Sec. 718.107  Other medical evidence.

    (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.

Subpart C--Determining Entitlement to Benefits


Sec. 718.201  Definition of pneumoconiosis.

    (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) Clinical Pneumoconiosis. ``Clinical pneumoconiosis'' consists 
of those diseases recognized by the medical community as 
pneumoconioses, i.e., the conditions characterized by permanent 
deposition of substantial amounts of particulate matter in the lungs 
and the fibrotic reaction of the lung tissue to that deposition caused 
by dust exposure in coal mine employment. This definition includes, but 
is not limited to, coal workers' pneumoconiosis, anthracosilicosis, 
anthracosis, anthrosilicosis, massive pulmonary fibrosis, silicosis or 
silicotuberculosis, arising out of coal mine employment.
    (2) Legal Pneumoconiosis. ``Legal pneumoconiosis'' includes any 
chronic lung disease or impairment and its sequelae arising out of coal 
mine employment. This definition includes, but is not limited to, any 
chronic restrictive or obstructive pulmonary disease arising out of 
coal mine employment.
    (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.


Sec. 718.202  Determining the existence of pneumoconiosis.

    (a) A finding of the existence of pneumoconiosis may be made as 
follows:
    (1) A chest X-ray conducted and classified in accordance with 
Sec. 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 Sec. 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 other evidence means medical tests such as blood-gas 
studies, pulmonary function studies or physical examinations or medical 
histories which establish the presence of a chronic pulmonary, 
respiratory or cardio-pulmonary condition, and in the case of a 
deceased miner, in the absence of medical evidence to the contrary, 
affidavits of persons with knowledge of the miner's physical condition.
    (B) Pulmonary or respiratory impairment means inability of the 
human respiratory apparatus to perform in a normal manner one or more 
of the three components of respiration, namely, ventilation, perfusion 
and diffusion.
    (C) Board-certified means certification in radiology or diagnostic 
roentgenology by the American Board of Radiology, Inc. or the American 
Osteopathic Association.
    (D) Board-eligible means the successful completion of a formal 
accredited residency program in radiology or diagnostic roentgenology.
    (E) Certified `B' reader or `B' reader means a physician who has 
demonstrated proficiency in evaluating chest roentgenograms for 
roentgenographic quality and in the use of the ILO-U/C classification 
for interpreting chest roentgenograms for pneumoconiosis and other 
diseases by taking and passing a specially designed proficiency 
examination given on behalf of or by the Appalachian Laboratory for 
Occupational Safety and Health. See 42 CFR 37.51(b)(2).
    (F) Qualified radiologic technologist or technician means an 
individual who is either certified as a registered technologist by the 
American Registry of Radiologic Technologists or licensed as a 
radiologic technologist by a state licensing board.
    (2) A biopsy or autopsy conducted and reported in compliance with 
Sec. 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

[[Page 80049]]

or that the claim has been fraudulently represented.
    (3) If the presumptions described in Secs. 718.304, 718.305 or 
Sec. 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 Sec. 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.


Sec. 718.203  Establishing relationship of pneumoconiosis to coal mine 
employment.

    (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.


Sec. 718.204  Total disability and disability causation defined; 
criteria for determining total disability and total disability due to 
pneumoconiosis.

    (a) General. Benefits are provided under the Act for or on behalf 
of miners who are totally disabled due to pneumoconiosis, or who were 
totally disabled due to pneumoconiosis at the time of death. For 
purposes of this section, any nonpulmonary or nonrespiratory condition 
or disease, which causes an independent disability unrelated to the 
miner's pulmonary or respiratory disability, shall not be considered in 
determining whether a miner is totally disabled due to pneumoconiosis. 
If, however, a nonpulmonary or nonrespiratory condition or disease 
causes a chronic respiratory or pulmonary impairment, that condition or 
disease shall be considered in determining whether the miner is or was 
totally disabled due to pneumoconiosis.
    (b)(1) Total disability defined. A miner shall be considered 
totally disabled if the irrebuttable presumption described in 
Sec. 718.304 applies. If that presumption does not apply, a miner shall 
be considered totally disabled if the miner has a pulmonary or 
respiratory impairment which, standing alone, prevents or prevented the 
miner:
    (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) Medical criteria. In the absence of contrary probative 
evidence, evidence which meets the standards of either paragraphs 
(b)(2)(i), (ii), (iii), or (iv) of this section shall establish a 
miner's total disability:
    (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) Total disability due to pneumoconiosis defined. A miner 
shall be considered totally disabled due to pneumoconiosis if 
pneumoconiosis, as defined in Sec. 718.201, is a substantially 
contributing cause of the miner's totally disabling respiratory or 
pulmonary impairment. Pneumoconiosis is a ``substantially contributing 
cause'' of the miner's disability if it:
    (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 Sec. 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) Lay evidence. In establishing total disability, lay evidence 
may be used in the following cases:
    (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 Sec. 718.306 partial) 
disability due to pneumoconiosis if no medical or other relevant 
evidence exists which

[[Page 80050]]

addresses the miner's pulmonary or respiratory condition.
    (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 
Sec. 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.


Sec. 718.205  Death due to pneumoconiosis.

    (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 (see Sec. 718.202);
    (2) The miner's pneumoconiosis arose out of coal mine employment 
(see Sec. 718.203); and
    (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 Sec. 718.304 is applicable, 
or
    (4) Where either of the presumptions set forth at Sec. 718.303 or 
Sec. 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 Sec. 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. See 
Sec. 725.414 concerning the operator's opportunity to develop evidence 
prior to an initial determination.


Sec. 718.206  Effect of findings by persons or agencies.

    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.

Subpart D--Presumptions Applicable to Eligibility Determinations


Sec. 718.301  Establishing length of employment as a miner.

    The presumptions set forth in Secs. 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

[[Page 80051]]

computed as provided by 20 CFR 725.101(a)(32).


Sec. 718.302  Relationship of pneumoconiosis to coal mine employment.

    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 Sec. 718.203.)


Sec. 718.303  Death from a respirable disease.

    (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.


Sec. 718.304  Irrebuttable presumption of total disability or death due 
to pneumoconiosis.

    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 Sec. 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: Provided, however, That any diagnosis made under this 
paragraph shall accord with acceptable medical procedures.


Sec. 718.305  Presumption of pneumoconiosis.

    (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 
Sec. 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 
Sec. 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.


Sec. 718.306  Presumption of entitlement applicable to certain death 
claims.

    (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 Sec. 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 
Sec. 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.

Appendix A To Part 718--Standards for Administration and 
Interpretation of Chest Roentgenograms (X-Rays)

    The following standards are established in accordance with 
sections 402(f)(1)(D) and

[[Page 80052]]

413(b) of the Act. They were developed in consultation with the 
National Institute for Occupational Safety and Health. These 
standards are promulgated for the guidance of physicians and medical 
technicians to insure that uniform procedures are used in 
administering and interpreting X-rays and that the best available 
medical evidence will be submitted in connection with 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 assigned to the physician's 
report of an X-ray.
    (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.

    Note: 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 \1/20\ of a 
second except that with single phase units with a rating less than 
300 mA at 125 kVp and subjects with chest over 28 cm postero-
anterior, the exposure may be increased to not more than \1/10\ of a 
second;
    (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.

Appendix B to Part 718-Standards for Administration and 
Interpretation of Pulmonary Function Tests. Tables B1, B2, B3, B4, 
B5, B6.

    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

[[Page 80053]]

instrument and when maximum inspiration has been attained, without 
interruption, blow as hard, fast and completely as possible for at 
least 7 seconds or until a plateau has been attained in the volume-
time curve with no detectable change in the expired volume during 
the last 2 seconds of maximal expiratory effort. A minimum of three 
flow-volume loops and derived spirometric tracings shall be carried 
out. The patient shall be observed throughout the study for 
compliance with instructions. Inspiration and expiration shall be 
checked visually for reproducibility. The effort shall be judged 
unacceptable when the patient:
    (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. (But see Sec. 718.103(b).) During the maneuvers the 
patient shall be observed for compliance with instructions. The 
effort shall be judged unacceptable when the patient:
    (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.
* * * * *

Appendix C to Part 718--Blood-Gas Tables

    The following tables set forth the values to be applied in 
determining whether total disability may be established in 
accordance with Secs. 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 
Secs. 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:

------------------------------------------------------------------------
                                                           Arterial PO2
                                                            equal to or
                  Arterial PCO2 (mm Hg)                    less than (mm
                                                                Hg)
------------------------------------------------------------------------
25 or below.............................................              75
26......................................................              74
27......................................................              73
28......................................................              72
29......................................................              71
30......................................................              70
31......................................................              69
32......................................................              68
33......................................................              67
34......................................................              66
35......................................................              65
36......................................................              64
37......................................................              63
38......................................................              62
39......................................................              61
40-49...................................................              60
Above 50................................................          (\1\)
------------------------------------------------------------------------
\1\ Any value.

    (2) For arterial blood-gas studies performed at test sites 3,000 
to 5,999 feet above sea level:

------------------------------------------------------------------------
                                                           Arterial PO2
                                                            equal to or
                  Arterial PCO2 (mm Hg)                    less than (mm
                                                                Hg)
------------------------------------------------------------------------
25 or below.............................................              70
26......................................................              69
27......................................................              68
28......................................................              67
29......................................................              66
30......................................................              65
31......................................................              64
32......................................................              63
33......................................................              62
34......................................................              61
35......................................................              60
36......................................................              59
37......................................................              58
38......................................................              57
39......................................................              56
40-49...................................................              55
Above 50................................................          (\2\)
------------------------------------------------------------------------
\2\ Any value.

    (3) For arterial blood-gas studies performed at test sites 6,000 
feet or more above sea level:

------------------------------------------------------------------------
                                                           Arterial PO2
                                                            equal to or
                  Arterial PCO2 (mm Hg)                    less than (mm
                                                                Hg)
------------------------------------------------------------------------
25 or below.............................................              65
26......................................................              64
27......................................................              63
28......................................................              62
29......................................................              61
30......................................................              60
31......................................................              59
32......................................................              58
33......................................................              57
34......................................................              56
35......................................................              55
36......................................................              54
37......................................................              53
38......................................................              52
39......................................................              51
40-49...................................................              50
Above 50................................................          (\3\)
------------------------------------------------------------------------
\3\ Any value.


    3. Part 722 is revised as follows:

[[Page 80054]]

PART 722--CRITERIA FOR DETERMINING WHETHER STATE WORKERS' 
COMPENSATION LAWS PROVIDE ADEQUATE COVERAGE FOR PNEUMOCONIOSIS AND 
LISTING OF APPROVED STATE LAWS

Sec.
722.1  Purpose.
722.2  Definitions.
722.3  General criteria; inclusion in and removal from the 
Secretary's list.
722.4  The Secretary's list.

    Authority: 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., Secretary's Order 7-87, 52 FR 48466, Employment Standards 
Order No. 90-02.


Sec. 722.1  Purpose.

    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.


Sec. 722.2  Definitions.

    (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) State agency means, with respect to any State, the agency, 
department or officer designated by the workers' compensation law of 
the State to administer such law. In any case in which more than one 
agency participates in the administration of a State workers' 
compensation law, the Governor of the State may designate which of the 
agencies shall be the State agency for purposes of this part.
    (2) The Secretary's list means the list published by the Secretary 
of Labor in the Federal Register (see Sec. 722.4) containing the names 
of those States which have in effect a workers' compensation law which 
provides adequate coverage for death or total disability due to 
pneumoconiosis.


Sec. 722.3  General criteria; inclusion in and removal from the 
Secretary's list.

    (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.


Sec. 722.4  The Secretary's list.

    (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 Federal Register as 
required by section 421 of the Black Lung Benefits Act, the list shall 
also appear in paragraph (b) of this section.
    (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.

------------------------------------------------------------------------
                                                                Period
                            State                             commencing
------------------------------------------------------------------------
None........................................................  ..........
------------------------------------------------------------------------


    4. Part 725 is revised as follows:

PART 725--CLAIMS FOR BENEFITS UNDER PART C OF TITLE IV OF THE 
FEDERAL MINE SAFETY AND HEALTH ACT, AS AMENDED

Subpart A--General
Sec.
725.1  Statutory provisions.
725.2  Purpose and applicability of this part.
725.3  Contents of this part.
725.4  Applicability of other parts in this title.
725.101  Definitions and use of terms.
725.102  Disclosure of program information.
725.103  Burden of proof.
Subpart B--Persons Entitled to Benefits, Conditions, and Duration of 
Entitlement
725.201  Who is entitled to benefits; contents of this subpart.

Conditions and Duration of Entitlement: Miner

725.202  Miner defined; conditions of entitlement, miner.
725.203  Duration and cessation of entitlement, miner.

Conditions and Duration of Entitlement: Miner's Dependents (Augmented 
Benefits)

725.204  Determination of relationship; spouse.
725.205  Determination of dependency; spouse.
725.206  Determination of relationship; divorced spouse.
725.207  Determination of dependency; divorced spouse.
725.208  Determination of relationship; child.
725.209  Determination of dependency; child.
725.210  Duration of augmented benefits.
725.211  Time of determination of relationship and dependency of 
spouse or child for purposes of augmentation of benefits.

Conditions and Duration of Entitlement: Miner's Survivors

725.212  Conditions of entitlement; surviving spouse or surviving 
divorced spouse.
725.213  Duration of entitlement; surviving spouse or surviving 
divorced spouse.
725.214  Determination of relationship; surviving spouse.
725.215  Determination of dependency; surviving spouse.
725.216  Determination of relationship; surviving divorced spouse.
725.217  Determination of dependency; surviving divorced spouse.
725.218  Conditions of entitlement; child.
725.219  Duration of entitlement; child.

[[Page 80055]]

725.220  Determination of relationship; child.
725.221  Determination of dependency; child.
725.222  Conditions of entitlement; parent, brother or sister.
725.223  Duration of entitlement; parent, brother or sister.
725.224  Determination of relationship; parent, brother or sister.
725.225  Determination of dependency; parent, brother or sister.
725.226  ``Good cause'' for delayed filing of proof of support.
725.227  Time of determination of relationship and dependency of 
survivors.
725.228  Effect of conviction of felonious and intentional homicide 
on entitlement to benefits.

Terms Used in this Subpart

725.229  Intestate personal property.
725.230  Legal impediment.
725.231  Domicile.
725.232  Member of the same household--''living with,'' ``living in 
the same household,'' and ``living in the miner's household,'' 
defined.
725.233  Support and contributions.
Subpart C--Filing of Claims
725.301  Who may file a claim.
725.302  Evidence of authority to file a claim on behalf of another.
725.303  Date and place of filing of claims.
725.304  Forms and initial processing.
725.305  When a written statement is considered a claim.
725.306  Withdrawal of a claim.
725.307  Cancellation of a request for withdrawal.
725.308  Time limits for filing claims.
725.309  Additional claims; effect of a prior denial of benefits.
725.310  Modification of awards and denials.
725.311  Communications with respect to claims; time computations.
Subpart D--Adjudication Officers; Parties and Representatives
725.350  Who are the adjudication officers?
725.351  Powers of adjudication officers.
725.352  Disqualification of adjudication officer.
725.360  Parties to proceedings
725.361  Party amicus curiae.
725.362  Representation of parties.
725.363  Qualification of representative.
725.364  Authority of representative.
725.365  Approval of representative's fees; lien against benefits.
725.366  Fees for representatives.
725.367  Payment of a claimant's attorney's fee by responsible 
operator or fund.
Subpart E--Adjudication of Claims by the District Director
725.401  Claims development--general.
725.402  Approved State workers' compensation law.
725.403  [Reserved].
725.404  Development of evidence--general
725.405  Development of medical evidence; scheduling of medical 
examinations and tests.
725.406  Medical examinations and tests.
725.407  Identification and notification of responsible operator.
725.408  Operator's response to notification.
725.409  Denial of a claim by reason of abandonment.
725.410  Submission of additional evidence.
725.411  Initial adjudication in Trust Fund cases.
725.412  Operator's response.
725.413  [Reserved].
725.414  Development of evidence.
725.415  Action by the district director after development of 
evidence.
725.416  Conferences.
725.417  Action at the conclusion of conference.
725.418  Proposed decision and order.
725.419  Response to proposed decision and order.
725.420  Initial determinations.
725.421  Referral of a claim to the Office of Administrative Law 
Judges.
725.422  Legal assistance.
725.423  Extensions of time.
Subpart F--Hearings
725.450  Right to a hearing.
725.451  Request for hearing.
725.452  Type of hearing; parties.
725.453  Notice of hearing.
725.454  Time and place of hearing; transfer of cases.
725.455  Hearing procedures; generally.
725.456  Introduction of documentary evidence.
725.457  Witnesses.
725.458  Depositions; interrogatories.
725.459  Witness fees.
725.460  Consolidated hearings.
725.461  Waiver of right to appear and present evidence.
725.462  Withdrawal of controversion of issues set for formal 
hearing; effect.
725.463  Issues to be resolved at hearing; new issues.
725.464  Record of hearing.
725.465  Dismissals for cause.
725.466  Order of dismissal.
725.475  Termination of hearings.
725.476  Issuance of decision and order.
725.477  Form and contents of decision and order.
725.478  Filing and service of decision and order.
725.479  Finality of decisions and orders.
725.480  Modification of decisions and orders.
725.481  Right to appeal to the Benefits Review Board.
725.482  Judicial review.
725.483  Costs in proceedings brought without reasonable grounds.
Subpart G--Responsible Coal Mine Operators
725.490  Statutory provisions and scope.
725.491  Operator defined.
725.492  Successor operator defined.
725.493  Employment relationship defined.
725.494  Potentially liable operators.
725.495  Criteria for determining a responsible operator.
725.496  Special claims transferred to the fund.
725.497  Procedures in special claims transferred to the fund.
Subpart H--Payment of Benefits

General Provisions

725.501  Payment provisions generally.
725.502  When benefit payments are due; manner of payment.
725.503  Date from which benefits are payable.
725.504  Payments to a claimant employed as a miner.
725.505  Payees.
725.506  Payment on behalf of another; ``legal guardian'' defined.
725.507  Guardian for minor or incompetent.
725.510  Representative payee.
725.511  Use and benefit defined.
725.512  Support of legally dependent spouse, child, or parent.
725.513  Accountability; transfer.
725.514  Certification to dependent of augmentation portion of 
benefit.
725.515  Assignment and exemption from claims of creditors.

Benefit Rates

725.520  Computation of benefits.
725.521  Commutation of payments; lump sum awards.
725.522  Payments prior to final adjudication.

Special Provisions for Operator Payments

725.530  Operator payments; generally.
725.531  Receipt for payment.
725.532  Suspension, reduction, or termination of payments.

Increases and Reductions of Benefits

725.533  Modification of benefit amounts; general.
725.534  Reduction of State benefits.
725.535  Reductions; receipt of State or Federal benefit.
725.536  Reductions; excess earnings.
725.537  Reductions; retroactive effect of an additional claim for 
benefits.
725.538  Reductions; effect of augmentation of benefits based on 
subsequent qualification of individual.
725.539  More than one reduction event.

Overpayments; Underpayments

725.540  Overpayments.
725.541  Notice of waiver of adjustment or recovery of overpayment.
725.542  When waiver of adjustment or recovery may be applied.
725.543  Standards for waiver of adjustment or recovery.
725.544  Collection and compromise of claims for overpayment.
725.545  Underpayments.
725.546  Relation to provisions for reductions or increases.
725.547  Applicability of overpayment and underpayment provisions to 
operator or carrier.
725.548  Procedures applicable to overpayments and underpayments
Subpart I--Enforcement of Liability; Reports
725.601  Enforcement generally.
725.602  Reimbursement of the fund.
725.603  Payments by the fund on behalf of an operator; liens.

[[Page 80056]]

725.604  Enforcement of final awards.
725.605  Defaults.
725.606  Security for the payment of benefits.
725.607  Payments in addition to compensation.
725.608  Interest.
725.609  Enforcement against other persons.
725.620  Failure to secure benefits; other penalties.
725.621  Reports.
Subpart J--Medical Benefits and Vocational Rehabilitation
725.701  Availability of medical benefits.
725.702  Claims for medical benefits only under section 11 of the 
Reform Act.
725.703  Physician defined.
725.704  Notification of right to medical benefits; authorization of 
treatment.
725.705  Arrangements for medical care.
725.706  Authorization to provide medical services.
725.707  Reports of physicians and supervision of medical care.
725.708  Disputes concerning medical benefits.
725.710  Objective of vocational rehabilitation.
725.711  Requests for referral to vocational rehabilitation 
assistance.

    Authority: 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.

Subpart A--General


Sec. 725.1  Statutory provisions.

    (a) General. Title IV of the Federal Mine Safety and Health Act of 
1977, as amended by the Black Lung Benefits Reform Act of 1977, the 
Black Lung Benefits Revenue Act of 1977, the Black Lung Benefits 
Revenue Act of 1981 and the Black Lung Benefits Amendments of 1981, 
provides for the payment of benefits to a coal miner who is totally 
disabled due to pneumoconiosis (black lung disease) and to certain 
survivors of a miner who dies due to pneumoconiosis. For claims filed 
prior to January 1, 1982, certain survivors could receive benefits if 
the miner was totally (or for claims filed prior to June 30, 1982, in 
accordance with section 411(c)(5) of the Act, partially) disabled due 
to pneumoconiosis, or if the miner died due to pneumoconiosis.
    (b) Part B. Part B of title IV of the Act provided that all claims 
filed between December 30, 1969, and June 30, 1973, are to be filed 
with, processed, and paid by the Secretary of Health, Education, and 
Welfare through the Social Security Administration; claims filed by the 
survivor of a miner before January 1, 1974, or within 6 months of the 
miner's death if death occurred before January 1, 1974, and claims 
filed by the survivor of a miner who was receiving benefits under part 
B of title IV of the Act at the time of death, if filed within 6 months 
of the miner's death, are also adjudicated and paid by the Social 
Security Administration.
    (c) Section 415. Claims filed by a miner between July 1 and 
December 31, 1973, are adjudicated and paid under section 415. Section 
415 provides that a claim filed between the appropriate dates shall be 
filed with and adjudicated by the Secretary of Labor under certain 
incorporated provisions of the Longshoremen's and Harbor Workers' 
Compensation Act (33 U.S.C. 901 et seq.). A claim approved under 
section 415 is paid under part B of title IV of the Act for periods of 
eligibility occurring between July 1 and December 31, 1973, by the 
Secretary of Labor and for periods of eligibility thereafter, is paid 
by a coal mine operator which is determined liable for the claim or the 
Black Lung Disability Trust Fund if no operator is identified or if the 
miner's last coal mine employment terminated prior to January 1, 1970. 
An operator which may be found liable for a section 415 claim is 
notified of the claim and allowed to participate fully in the 
adjudication of such claim. A claim filed under section 415 is for all 
purposes considered as if it were a part C claim (see paragraph (d) of 
this section) and the provisions of part C of title IV of the Act are 
fully applicable to a section 415 claim except as is otherwise provided 
in section 415.
    (d) Part C. Claims filed by a miner or survivor on or after January 
1, 1974, are filed, adjudicated, and paid under the provisions of part 
C of title IV of the Act. Part C requires that a claim filed on or 
after January 1, 1974, shall be filed under an applicable approved 
State workers' compensation law, or if no such law has been approved by 
the Secretary of Labor, the claim may be filed with the Secretary of 
Labor under section 422 of the Act. Claims filed with the Secretary of 
Labor under part C are processed and adjudicated by the Secretary and 
paid by a coal mine operator. If the miner's last coal mine employment 
terminated before January 1, 1970, or if no responsible operator can be 
identified, benefits are paid by the Black Lung Disability Trust Fund. 
Claims adjudicated under part C are subject to certain incorporated 
provisions of the Longshoremen's and Harbor Workers' Compensation Act.
    (e) Section 435. Section 435 of the Act affords each person who 
filed a claim for benefits under part B, section 415, or part C, and 
whose claim had been denied or was still pending as of March 1, 1978, 
the effective date of the Black Lung Benefits Reform Act of 1977, the 
right to have his or her claim reviewed on the basis of the 1977 
amendments to the Act, and under certain circumstances to submit new 
evidence in support of the claim.
    (f) Changes made by the Black Lung Benefits Reform Act of 1977. In 
addition to those changes which are reflected in paragraphs (a) through 
(e) of this section, the Black Lung Benefits Reform Act of 1977 
contains a number of significant amendments to the Act's standards for 
determining eligibility for benefits. Among these are:
    (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) Changes made by the Black Lung Benefits Revenue Act of 1977. 
The Black Lung Benefits Revenue Act of 1977 established the Black Lung 
Disability Trust Fund which is financed by a specified tax imposed upon 
each ton of coal (except lignite) produced and sold or used in the 
United States after March 31, 1978. The Secretary of the Treasury is 
the managing trustee of the fund and benefits are paid from the fund 
upon the direction of the Secretary of Labor. The fund was made liable 
for the payment of all claims approved under section 415, part C and 
section 435 of the Act for all periods of eligibility occurring on or 
after January 1, 1974, with respect to claims where the miner's last 
coal mine employment terminated before January

[[Page 80057]]

1, 1970, or where individual liability can not be assessed against a 
coal mine operator due to bankruptcy, insolvency, or the like. The fund 
was also authorized to pay certain claims which a responsible operator 
has refused to pay within a reasonable time, and to seek reimbursement 
from such operator. The purpose of the fund and the Black Lung Benefits 
Revenue Act of 1977 was to insure that coal mine operators, or the coal 
industry, will fully bear the cost of black lung disease for the 
present time and in the future. The Black Lung Benefits Revenue Act of 
1977 also contained other provisions relating to the fund and 
authorized a coal mine operator to establish its own trust fund for the 
payment of certain claims.
    (h) Changes made by the Black Lung Benefits Amendments of 1981. In 
addition to the change reflected in paragraph (a) of this section, the 
Black Lung Benefits Amendments of 1981 made a number of significant 
changes in the Act's standards for determining eligibility for benefits 
and concerning the payment of such benefits. The following changes are 
all applicable to claims filed on or after January 1, 1982:
    (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) Changes made by the Black Lung Benefits Revenue Act of 1981. 
The Black Lung Benefits Revenue Act of 1981 temporarily doubles the 
amount of the tax upon coal until the fund shall have repaid all 
advances received from the United States Treasury and the interest on 
all such advances. The fund is also made liable for the payment of 
certain claims previously denied under the 1972 version of the Act and 
subsequently approved under section 435 and for the reimbursement of 
operators and insurers for benefits previously paid by them on such 
claims. With respect to claims filed on or after January 1, 1982, the 
fund's authorization for the payment of interim benefits is limited to 
the payment of prospective benefits only. These changes also define the 
rates of interest to be paid to and by the fund.
    (j) Longshoremen's Act provisions. The adjudication of claims filed 
under sections 415, 422 and 435 of the Act is governed by various 
procedural and other provisions contained in the Longshoremen's and 
Harbor Workers' Compensation Act (LHWCA), as amended from time to time, 
which are incorporated within the Act by sections 415 and 422. The 
incorporated LHWCA provisions are applicable under the Act except as is 
otherwise provided by the Act or as provided by regulations of the 
Secretary. Although occupational disease benefits are also payable 
under the LHWCA, the primary focus of the procedures set forth in that 
Act is upon a time definite of traumatic injury or death. Because of 
this and other significant differences between a black lung and 
longshore claim, it is determined, in accordance with the authority set 
forth in section 422 of the Act, that certain of the incorporated 
procedures prescribed by the LHWCA must be altered to fit the 
circumstances ordinarily confronted in the adjudication of a black lung 
claim. The changes made are based upon the Department's experience in 
processing black lung claims since July 1, 1973, and all such changes 
are specified in this part or part 727 of this subchapter (see 
Sec. 725.4(d)). No other departure from the incorporated provisions of 
the LHWCA is intended.
    (k) Social Security Act provisions. Section 402 of Part A of the 
Act incorporates certain definitional provisions from the Social 
Security Act, 42 U.S.C. 301 et seq. Section 430 provides that the 1972, 
1977 and 1981 amendments to part B of the Act shall also apply to part 
C ``to the extent appropriate.'' Sections 412 and 413 incorporate 
various provisions of the Social Security Act into part B of the Act. 
To the extent appropriate, therefore, these provisions also apply to 
part C. In certain cases, the Department has varied the terms of the 
Social Security Act provisions to accommodate the unique needs of the 
black lung benefits program. Parts of the Longshore and Harbor Workers' 
Compensation Act are also incorporated into part C. Where the 
incorporated provisions of the two acts are inconsistent, the 
Department has exercised its broad regulatory powers to choose the 
extent to which each incorporation is appropriate. Finally, Section 
422(g), contained in part C of the Act, incorporates 42 U.S.C. 403(b)-
(l).


Sec. 725.2  Purpose and applicability of this part.

    (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: 
Secs. 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.


Sec. 725.3  Contents of this part.

    (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.

[[Page 80058]]

    (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.


Sec. 725.4  Applicability of other parts in this title.

    (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 Sec. 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) Parts 715, 717, and 720. Pertinent and significant provisions 
of Parts 715, 717, and 720 of this subchapter (formerly contained in 20 
CFR, parts 500 to end, edition revised as of April 1, 1978), which 
established the procedures for the filing, processing, and payment of 
claims filed under section 415 of the Act, are included within this 
part as appropriate.
    (c) Part 726. Part 726 of this subchapter, which sets forth the 
obligations imposed upon a coal operator to insure or self-insure its 
liability for the payment of benefits to certain eligible claimants, is 
applicable to this part as appropriate.
    (d) Part 727. Part 727 of this subchapter, which governs the 
review, adjudication and payment of pending and denied claims under 
section 435 of the Act, is applicable with respect to such claims. The 
criteria contained in subpart C of part 727 for determining a 
claimant's eligibility for benefits are applicable under this part with 
respect to all claims filed before April 1, 1980, and to all claims 
filed under this part and under section 11 of the Black Lung Benefits 
Reform Act of 1977. Because the part 727 regulations affect an 
increasingly smaller number of claims, however, the Department has 
discontinued publication of the criteria in the Code of Federal 
Regulations. The part 727 criteria may be found at 43 FR 36818, Aug. 
18, 1978 or 20 CFR, parts 500 to end, edition revised as of April 1, 
1999.
    (e) Part 410. Part 410 of this title, which sets forth provisions 
relating to a claim for black lung benefits under part B of title IV of 
the Act, is inapplicable to this part except as is provided in this 
part, or in part 718 of this subchapter.


Sec. 725.101  Definition and use of terms.

    (a) Definitions. For purposes of this subchapter, except where the 
content clearly indicates otherwise, the following definitions apply:
    (1) The Act means the Federal Coal Mine Health and Safety Act, 
Public Law 91-173, 83 Stat. 742, 30 U.S.C. 801-960, as amended by the 
Black Lung Benefits Act of 1972, the Mine Safety and Health Act of 
1977, the Black Lung Benefits Reform Act of 1977, the Black Lung 
Benefits Revenue Act of 1977, the Black Lung Benefits Revenue Act of 
1981, and the Black Lung Benefits Amendments of 1981.
    (2) The Longshoremen's Act or LHWCA means the Longshoremen's and 
Harbor Workers' Compensation Act of March 4, 1927, c. 509, 44 Stat. 
1424, 33 U.S.C. 901-950, as amended from time to time.
    (3) The Social Security Act means the Social Security Act, Act of 
August 14, 1935, c. 531, 49 Stat. 620, 42 U.S.C. 301-431, as amended 
from time to time.
    (4) Administrative law judge means a person qualified under 5 
U.S.C. 3105 to conduct hearings and adjudicate claims for benefits 
filed pursuant to section 415 and part C of the Act. Until March 1, 
1979, it shall also mean an individual appointed to conduct such 
hearings and adjudicate such claims under Public Law 94-504.
    (5) Beneficiary means a miner or any surviving spouse, divorced 
spouse, child, parent, brother or sister, who is entitled to benefits 
under either section 415 or part C of title IV of the Act.
    (6) Benefits means all money or other benefits paid or payable 
under section 415 or part C of title IV of the Act on account of 
disability or death due to pneumoconiosis, including augmented benefits 
(see Sec. 725.520(c)). The term also includes any expenses related to 
the medical examination and testing authorized by the district director 
pursuant to Sec. 725.406.
    (7) Benefits Review Board or Board means the Benefits Review Board, 
U.S. Department of Labor, an appellate tribunal appointed by the 
Secretary of Labor pursuant to the provisions of section 21(b)(1) of 
the LHWCA. See parts 801 and 802 of this title.
    (8) Black Lung Disability Trust Fund or the fund means the Black 
Lung Disability Trust Fund established by the Black Lung Benefits 
Revenue Act of 1977, as amended by the Black Lung Benefits Revenue Act 
of 1981, for the payment of certain claims adjudicated under this part 
(see subpart G of this part).
    (9) Chief Administrative Law Judge means the Chief Administrative 
Law Judge of the Office of Administrative Law Judges, U.S. Department 
of Labor, 800 K Street, NW., suite 400, Washington, DC 20001-8002.
    (10) Claim means a written assertion of entitlement to benefits 
under section 415 or part C of title IV of the Act, submitted in a form 
and manner authorized by the provisions of this subchapter.
    (11) Claimant means an individual who files a claim for benefits 
under this part.
    (12) Coal mine means an area of land and all structures, 
facilities, machinery, tools, equipment, shafts, slopes, tunnels, 
excavations and other property, real or personal, placed upon, under or 
above the surface of such land by any person, used in, or to be used 
in, or resulting from, the work of extracting in such area bituminous 
coal, lignite or anthracite from its natural deposits in the earth by 
any means or method, and in the work of preparing the coal so 
extracted, and

[[Page 80059]]

includes custom coal preparation facilities.
    (13) Coal preparation means the breaking, crushing, sizing, 
cleaning, washing, drying, mixing, storing and loading of bituminous 
coal, lignite or anthracite, and such other work of preparing coal as 
is usually done by the operator of a coal mine.
    (14) Department means the United States Department of Labor.
    (15) Director means the Director, OWCP, or his or her designee.
    (16) District Director means a person appointed as provided in 
sections 39 and 40 of the LHWCA, or his or her designee, who is 
authorized to develop and adjudicate claims as provided in this 
subchapter (see Sec. 725.350). The term District Director is 
substituted for the term Deputy Commissioner wherever that term appears 
in the regulations. This substitution is for administrative purposes 
only and in no way affects the power or authority of the position as 
established in the statute. Any action taken by a person under the 
authority of a district director will be considered the action of a 
deputy commissioner.
    (17) Division or DCMWC means the Division of Coal Mine Workers' 
Compensation in the OWCP, Employment Standards Administration, United 
States Department of Labor.
    (18) Insurer or carrier means any private company, corporation, 
mutual association, reciprocal or interinsurance exchange, or any other 
person or fund, including any State fund, authorized under the laws of 
a State to insure employers' liability under workers' compensation 
laws. The term also includes the Secretary of Labor in the exercise of 
his or her authority under section 433 of the Act.
    (19) Miner or coal miner means any individual who works or has 
worked in or around a coal mine or coal preparation facility in the 
extraction or preparation of coal. The term also includes 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 mine dust as a result of such employment (see Sec. 725.202). For 
purposes of this definition, the term does not include coke oven 
workers.
    (20) The Nation's coal mines means all coal mines located in any 
State.
    (21) Office or OWCP means the Office of Workers' Compensation 
Programs, United States Department of Labor.
    (22) Office of Administrative Law Judges means the Office of 
Administrative Law Judges, U.S. Department of Labor.
    (23) Operator means any owner, lessee, or other person who 
operates, controls or supervises a coal mine, including a prior or 
successor operator as defined in section 422 of the Act and certain 
transportation and construction employers (see subpart G of this part).
    (24) Person means an individual, partnership, association, 
corporation, firm, subsidiary or parent of a corporation, or other 
organization or business entity.
    (25) Pneumoconiosis means a chronic dust disease of the lung and 
its sequelae, including respiratory and pulmonary impairments, arising 
out of coal mine employment (see part 718 of this subchapter).
    (26) Responsible operator means an operator which has been 
determined to be liable for the payment of benefits to a claimant for 
periods of eligibility after December 31, 1973, with respect to a claim 
filed under section 415 or part C of title IV of the Act or reviewed 
under section 435 of the Act.
    (27) Secretary means the Secretary of Labor, United States 
Department of Labor, or a person, authorized by him or her to perform 
his or her functions under title IV of the Act.
    (28) State includes any state of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American 
Samoa, Guam, the Trust Territory of the Pacific Islands, and prior to 
January 3, 1959, and August 21, 1959, respectively, the territories of 
Alaska and Hawaii.
    (29) Total disability and partial disability, for purposes of this 
part, have the meaning given them as provided in part 718 of this 
subchapter.
    (30) Underground coal mine means a coal mine in which the earth and 
other materials which lie above and around the natural deposit of coal 
(i.e., overburden) are not removed in mining; including all land, 
structures, facilities, machinery, tools, equipment, shafts, slopes, 
tunnels, excavations and other property, real or personal, appurtenant 
thereto.
    (31) A workers' compensation law means a law providing for payment 
of benefits to employees, and their dependents and survivors, for 
disability on account of injury, including occupational disease, or 
death, suffered in connection with their employment. A payment funded 
wholly out of general revenues shall not be considered a payment under 
a workers' compensation law.
    (32) Year means a period of one calendar year (365 days, or 366 
days if one of the days is February 29), or partial periods totaling 
one year, during which the miner worked in or around a coal mine or 
mines for at least 125 ``working days.'' A ``working day'' means any 
day or part of a day for which a miner received pay for work as a 
miner, but shall not include any day for which the miner received pay 
while on an approved absence, such as vacation or sick leave. In 
determining whether a miner worked for one year, any day for which the 
miner received pay while on an approved absence, such as vacation or 
sick leave, may be counted as part of the calendar year and as partial 
periods totaling one year.
    (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) Statutory terms. The definitions contained in this section 
shall not be

[[Page 80060]]

construed in derogation of terms of the Act.
    (c) Dependents and survivors. Dependents and survivors are those 
persons described in subpart B of this part.


Sec. 725.102  Disclosure of program information.

    (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 Sec. 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 (Sec. 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.


Sec. 725.103  Burden of proof.

    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.

Subpart B--Persons Entitled to Benefits, Conditions, and Duration 
of Entitlement


Sec. 725.201  Who is entitled to benefits; contents of this subpart.

    (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 Sec. 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 Sec. 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 Sec. 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 Sec. 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.

Conditions and Duration of Entitlement: Miner


Sec. 725.202  Miner defined; condition of entitlement, miner.

    (a) Miner defined. A ``miner'' for the purposes of this part is any 
person who works or has worked in or around a coal mine or coal 
preparation facility in the extraction, preparation, or transportation 
of coal, and any person who works or has worked in coal mine 
construction or maintenance in or around a coal mine or coal 
preparation facility. There shall be a rebuttable presumption that any 
person working in or around a coal mine or coal preparation facility is 
a miner. This presumption may be rebutted by proof that:
    (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) Coal mine construction and transportation workers; special

[[Page 80061]]

provisions. A coal mine construction or transportation worker shall be 
considered a miner to the extent such individual is or was exposed to 
coal mine dust as a result of employment in or around a coal mine or 
coal preparation facility. A transportation worker shall be considered 
a miner to the extent that his or her work is integral to the 
extraction or preparation of coal. A construction worker shall be 
considered a miner to the extent that his or her work is integral to 
the building of a coal or underground mine (see Sec. 725.101(a)(12), 
(30)).
    (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 Sec. 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) Conditions of entitlement; miner. An individual is eligible for 
benefits under this subchapter if the individual:
    (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 Sec. 718.202), and
    (ii) The pneumoconiosis arose out of coal mine employment (see 
Sec. 718.203), and
    (iii) Is totally disabled (see Sec. 718.204(c)), and
    (iv) The pneumoconiosis contributes to the total disability (see 
Sec. 718.204(c)); and
    (3) Has filed a claim for benefits in accordance with the 
provisions of this part.


Sec. 725.203  Duration and cessation of entitlement; miner.

    (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 Sec. 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.

Conditions and Duration of Entitlement: Miner's Dependents 
(Augmented Benefits)


Sec. 725.204  Determination of relationship; spouse.

    (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 Sec. 725.520(c), entered into a valid marriage without 
regard to this section, with a person other than the miner.


Sec. 725.205  Determination of dependency; spouse.

    For the purposes of augmenting benefits, an individual who is the 
miner's spouse (see Sec. 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 Sec. 725.232); or
    (b) The individual is receiving regular contributions from the 
miner for support (see Sec. 725.233(c)); or
    (c) The miner has been ordered by a court to contribute to such 
individual's support (see Sec. 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 Sec. 725.204) for 
a period of not less than 1 year.


Sec. 725.206  Determination of relationship; divorced spouse.

    For the purposes of augmenting benefits with respect to any claim 
considered or reviewed under this part or part 727 of this subchapter 
(see Sec. 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.


Sec. 725.207  Determination of dependency; divorced spouse.

    For the purpose of augmenting benefits, an individual who is the 
miner's divorced spouse (Sec. 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 Sec. 725.233(g)); or

[[Page 80062]]

    (b) The individual is receiving substantial contributions from the 
miner pursuant to a written agreement (see Sec. 725.233(c) and (f)); or
    (c) A court order requires the miner to furnish substantial 
contributions to the individual's support (see Sec. 725.233(c) and 
(e)).


Sec. 725.208  Determination of relationship; child.

    As used in this section, the term ``beneficiary'' means only a 
surviving spouse entitled to benefits at the time of death (see 
Sec. 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 Sec. 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 Sec. 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 Sec. 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.


Sec. 725.209  Determination of dependency; child.

    (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 Sec. 725.202 and 
Sec. 725.212). An individual who is the beneficiary's child 
(Sec. 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 Secs. 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.


Sec. 725.210  Duration of augmented benefits.

    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.


Sec. 725.211  Time of determination of relationship and dependency of 
spouse or child for purposes of augmentation of benefits.

    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.

Conditions and Duration of Entitlement: Miner's Survivors


Sec. 725.212  Conditions of entitlement; surviving spouse or surviving 
divorced spouse.

    (a) An individual who is the surviving spouse or surviving divorced 
spouse of a miner is eligible for benefits if such individual:

[[Page 80063]]

    (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 Sec. 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.


Sec. 725.213  Duration of entitlement; surviving spouse or surviving 
divorced spouse.

    (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 
Sec. 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 
Sec. 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 Sec. 725.212. The individual shall not be required to 
reestablish the miner's entitlement to benefits (Sec. 725.212(a)(3)(i)) 
or the miner's death due to pneumoconiosis (Sec. 725.212(a)(3)(ii)).


Sec. 725.214  Determination of relationship; surviving spouse.

    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 
Sec. 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 
Sec. 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 Sec. 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.


Sec. 725.215  Determination of dependency; surviving spouse.

    An individual who is the miner's surviving spouse (see 
Sec. 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 Sec. 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 Sec. 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 Sec. 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.


Sec. 725.216  Determination of relationship; surviving divorced spouse.

    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 Sec. 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.


Sec. 725.217  Determination of dependency; surviving divorced spouse.

    An individual who is the miner's surviving divorced spouse (see 
Sec. 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 Sec. 725.233(g)); or
    (b) The individual was receiving substantial contributions from the 
miner pursuant to a written agreement (see Sec. 725.233(c) and (f)); or

[[Page 80064]]

    (c) A court order required the miner to furnish substantial 
contributions to the individual's support (see Sec. 725.233(c) and 
(e)).


Sec. 725.218  Conditions of entitlement; child.

    (a) An individual is entitled to benefits where he or she meets the 
required standards of relationship and dependency under this subpart 
(see Sec. 725.220 and Sec. 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 Sec. 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.


Sec. 725.219  Duration of entitlement; child.

    (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 Sec. 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 Sec. 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 
Sec. 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 Sec. 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 Sec. 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 Sec. 725.218. The individual shall not be required 
to reestablish the miner's entitlement to benefits (Sec. 725.218(a)(1)) 
or the miner's death due to pneumoconiosis (Sec. 725.212(a)(2)).


Sec. 725.220  Determination of relationship; child.

    For purposes of determining whether an individual may qualify for 
benefits as the child of a deceased miner, the provisions of 
Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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.


Sec. 725.221  Determination of dependency; child.

    For the purposes of determining whether a child was dependent upon 
a deceased miner, the provisions of Sec. 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.


Sec. 725.222  Conditions of entitlement; parent, brother, or sister.

    (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 (Sec. 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

[[Page 80065]]

before such individual attained age 22, or in the case of a student, 
before the student ceased to be a student; or
    (iii) Is a student (see Sec. 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 Sec. 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.


Sec. 725.223  Duration of entitlement; parent, brother, or sister.

    (a) A parent, sister, or brother is entitled to benefits beginning 
with the month all the conditions of entitlement described in 
Sec. 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 Sec. 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 
Sec. 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 Sec. 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.


Sec. 725.224  Determination of relationship; parent, brother, or 
sister.

    (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 Sec. 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 (i.e., right to share in the miner's intestate personal 
property) as a parent, brother, or sister, the individual will be 
considered to be the parent, brother, or sister as appropriate.


Sec. 725.225  Determination of dependency; parent, brother, or sister.

    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 Sec. 725.232); and
    (b) The individual was totally dependent on the miner for support 
(see Sec. 725.233(h)).


Sec. 725.226  ``Good cause'' for delayed filing of proof of support.

    (a) What constitutes ``good cause.'' ``Good cause'' may be found 
for failure to file timely proof of support where the parent, brother, 
or sister establishes to the satisfaction of the Office that such 
failure to file was due to:
    (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) What does not constitute ``good cause.'' ``Good cause'' for 
failure to file timely proof of support (see Sec. 725.222(a)(3)) does 
not exist when there is evidence of record in the Office that the 
individual was informed that he or she should file within the 
prescribed period and he or she failed to do so deliberately or through 
negligence.


Sec. 725.227  Time of determination of relationship and dependency of 
survivors.

    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.


Sec. 725.228  Effect of conviction of felonious and intentional 
homicide on entitlement to benefits.

    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.

Terms Used in This Subpart


Sec. 725.229  Intestate personal property.

    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.


Sec. 725.230  Legal impediment.

    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.


Sec. 725.231  Domicile.

    (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

[[Page 80066]]

law of the District of Columbia is applied.


Sec. 725.232  Member of the same household--``living with,'' ``living 
in the same household,'' and ``living in the miner's household,'' 
defined.

    (a) Defined. (1) The term ``member of the same household'' as used 
in section 402(a)(2) of the Act (with respect to a spouse); the term 
``living with'' as used in section 402(e) of the Act (with respect to a 
surviving spouse); and the term ``living in the same household'' as 
used in this subpart, means that a husband and wife were customarily 
living together as husband and wife in the same place.
    (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) Temporary absence. The temporary absence from the same 
residence of either the miner, or the miner's spouse, parent, brother, 
or sister (as the case may be), does not preclude a finding that one 
was ``living with'' the other, or that they were ``members of the same 
household.'' The absence of one such individual from the residence in 
which both had customarily lived shall, in the absence of evidence to 
the contrary, be considered temporary:
    (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) Relevant period of time. (1) The determination as to whether a 
surviving spouse had been ``living with'' the miner shall be based upon 
the facts and circumstances as of the time of the death of the miner.
    (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.


Sec. 725.233  Support and contributions.

    (a) Support defined. The term ``support'' includes food, shelter, 
clothing, ordinary medical expenses, and other ordinary and customary 
items for the maintenance of the person supported.
    (b) Contributions defined. The term ``contributions'' refers to 
contributions actually provided by the contributor from such 
individual's property, or the use thereof, or by the use of such 
individual's own credit.
    (c) Regular contributions and substantial contributions defined. 
The terms ``regular contributions'' and ``substantial contributions'' 
mean contributions that are customary and sufficient to constitute a 
material factor in the cost of the individual's support.
    (d) Contributions and community property. When a spouse receives 
and uses for his or her support income from services or property, and 
such income, under applicable State law, is the community property of 
the wife and her husband, no part of such income is a ``contribution'' 
by one spouse to the other's support regardless of the legal interest 
of the donor. However, when a spouse receives and uses for support, 
income from the services and the property of the other spouse and, 
under applicable State law, such income is community property, all of 
such income is considered to be a contribution by the donor to the 
spouse's support.
    (e) Court order for support defined. References to a support order 
in this subpart means any court order, judgment, or decree of a court 
of competent jurisdiction which requires regular contributions that are 
a material factor in the cost of the individual's support and which is 
in effect at the applicable time. If such contributions are required by 
a court order, this condition is met whether or not the contributions 
were actually made.
    (f) Written agreement defined. The term ``written agreement'' in 
the phrase ``substantial contributions pursuant to a written 
agreement'', as used in this subpart means an agreement signed by the 
miner providing for substantial contributions by the miner for the 
individual's support. It must be in effect at the applicable time but 
it need not be legally enforceable.
    (g) One-half support defined. The term ``one-half support'' means 
that the miner made regular contributions, in cash or in kind, to the 
support of a divorced spouse at the specified time or for the specified 
period, and that the amount of such contributions equalled or exceeded 
one-half the total cost of such individual's support at such time or 
during such period.
    (h) Totally dependent for support defined. The term ``totally 
dependent for support'' as used in Sec. 725.225(b) means that the miner 
made regular contributions to the support of the miner's parents, 
brother, or sister, as the case may be, and that the amount of such 
contributions at least equalled the total cost of such individual's 
support.

Subpart C--Filing of Claims


Sec. 725.301  Who may file a claim.

    (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 Sec. 725.305, in order for a claim to be 
considered, the claimant must be alive at the time the claim is filed.


Sec. 725.302  Evidence of authority to file a claim on behalf of 
another.

    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.

[[Page 80067]]

    (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.


Sec. 725.303  Date and place of filing of claims.

    (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.


Sec. 725.304  Forms and initial processing.

    (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.


Sec. 725.305  When a written statement is considered a 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 
Sec. 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.


Sec. 725.306  Withdrawal of a claim.

    (a) A claimant or an individual authorized to execute a claim on a 
claimant's behalf or on behalf of claimant's estate under Sec. 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 
Sec. 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.


Sec. 725.307  Cancellation of a request for withdrawal.

    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.


Sec. 725.308  Time limits for filing claims.

    (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.


Sec. 725.309  Additional claims; effect of a prior denial of benefits.

    (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 Secs. 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 Sec. 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 Sec. 725.310.

[[Page 80068]]

    (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 Sec. 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 Secs. 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 Sec. 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 Sec. 725.4(d)), a person may exercise the right of 
review provided in paragraph (c) of Sec. 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.


Sec. 725.310  Modification of awards and denials.

    (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 Sec. 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 (Sec. 725.418) or, if appropriate, deny the claim by reason 
of abandonment (Sec. 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 
(Sec. 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 Sec. 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 Sec. 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

[[Page 80069]]

under paragraph (a) shall be subject to collection or offset under 
subpart H of this part.


Sec. 725.311  Communications with respect to claims; time computations.

    (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.

Subpart D--Adjudication Officers; Parties and Representatives


Sec. 725.350  Who are the adjudication officers?

    (a) General. The persons authorized by the Secretary of Labor to 
accept evidence and decide claims on the basis of such evidence are 
called ``adjudication officers.'' This section describes the status of 
black lung claims adjudication officers.
    (b) District Director. The district director is that official of 
the DCMWC or his designee who is authorized to perform functions with 
respect to the development, processing, and adjudication of claims in 
accordance with this part.
    (c) Administrative law judge. An administrative law judge is that 
official appointed pursuant to 5 U.S.C. 3105 (or Public Law 94-504) who 
is qualified to preside at hearings under 5 U.S.C. 557 and is empowered 
by the Secretary to conduct formal hearings with respect to, and 
adjudicate, claims in accordance with this part. A person appointed 
under Public Law 94-504 shall not be considered an administrative law 
judge for purposes of this part for any period after March 1, 1979.


Sec. 725.351  Powers of adjudication officers.

    (a) District Director. The district director is authorized to:
    (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.


Sec. 725.352  Disqualification of adjudication officer.

    (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.

[[Page 80070]]

Sec. 725.360  Parties to proceedings.

    (a) Except as provided in Sec. 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 Sec. 725.301;
    (3) Any coal mine operator notified under Sec. 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 Sec. 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.


Sec. 725.361  Party amicus curiae.

    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.


Sec. 725.362  Representation of parties.

    (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 Sec. 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 Sec. 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 Sec. 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.


Sec. 725.363  Qualification of representative.

    (a) Attorney. Any attorney in good standing who is admitted to 
practice before a court of a State, territory, district, or insular 
possession, or before the Supreme Court of the United States or other 
Federal court and is not, pursuant to any provision of law, prohibited 
from acting as a representative, may be appointed as a representative.
    (b) Other person. With the approval of the adjudication officer, 
any other person may be appointed as a representative so long as that 
person is not, pursuant to any provision of law, prohibited from acting 
as a representative.


Sec. 725.364  Authority of representative.

    A representative, appointed and qualified as provided in 
Secs. 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 Sec. 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.


Sec. 725.365  Approval of representative's fees; lien against benefits.

    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.

[[Page 80071]]

Sec. 725.366  Fees for representatives.

    (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 (e.g., 
attorney, paralegal, law clerk, lay representative or clerical) of the 
person performing such work, and the customary billing rate for each 
such person. The application shall also include a listing of reasonable 
unreimbursed expenses, including those for travel, incurred by the 
representative or an employee of a representative in establishing the 
claimant's case. Any fee requested under this paragraph shall also 
contain a description of any fee requested, charged, or received for 
services rendered to the claimant before any State or Federal court or 
agency in connection with a related matter.
    (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 Sec. 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 Sec. 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.


Sec. 725.367  Payment of a claimant's attorney's fee by responsible 
operator or fund.

    (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 Sec. 725.410(a)(3)) fails to accept the claimant's entitlement to 
benefits within the 30-day period provided by Sec. 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 Sec. 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 Sec. 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

[[Page 80072]]

Internal Revenue Code (26 U.S.C.), which was also enacted as a part of 
the 1981 Amendments to the Act, expressly prohibits the fund from 
reimbursing an operator or carrier for any attorney fees or costs which 
it has paid on cases subject to the transfer of liability provisions.

Subpart E--Adjudication of Claims by the District Director


Sec. 725.401  Claims development--general.

    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.


Sec. 725.402  Approved State workers' compensation law.

    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 
Sec. 725.418 and proceed as appropriate.


Sec. 725.403  [Reserved]


Sec. 725.404  Development of evidence--general.

    (a) Employment history. Each claimant shall furnish the district 
director with a complete and detailed history of the coal miner's 
employment and, upon request, supporting documentation.
    (b) Matters of record. Where it is necessary to obtain proof of 
age, marriage or termination of marriage, death, family relationship, 
dependency (see subpart B of this part), or any other fact which may be 
proven as a matter of public record, the claimant shall furnish such 
proof to the district director upon request.
    (c) Documentary evidence. If a claimant is required to submit 
documents to the district director, the claimant shall submit either 
the original, a certified copy or a clear readable copy thereof. The 
district director or administrative law judge may require the 
submission of an original document or certified copy thereof, if 
necessary.
    (d) Submission of insufficient evidence. In the event a claimant 
submits insufficient evidence regarding any matter, the district 
director shall inform the claimant of what further evidence is 
necessary and request that such evidence be submitted within a 
specified reasonable time which may, upon request, be extended for good 
cause.


Sec. 725.405  Development of medical evidence; scheduling of medical 
examinations and tests.

    (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 
Sec. 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 Sec. 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.


Sec. 725.406  Medical examinations and tests.

    (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, 
provided that the miner may not select any physician to whom the miner 
or the miner's spouse is related to the fourth degree of consanguinity, 
and the miner may not select any physician who has examined or provided 
medical treatment to the miner within the twelve months preceding the 
date of the miner's application. The district director will make 
arrangements for the miner to be given a complete pulmonary evaluation 
by that facility or physician. The results of the complete pulmonary 
evaluation shall not be counted as evidence submitted by the miner 
under Sec. 725.414.
    (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 Sec. 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

[[Page 80073]]

an action brought under section 424 of the Act and Sec. 725.603 of this 
part.


Sec. 725.407  Identification and notification of responsible operator.

    (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 Sec. 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 Sec. 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 Sec. 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 Sec. 725.409.


Sec. 725.408  Operator's response to notification.

    (a)(1) An operator which receives notification under Sec. 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 Sec. 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 Sec. 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 Sec. 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.


Sec. 725.409  Denial of a claim by reason of abandonment.

    (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 Sec. 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 Sec. 725.309. 
For purposes of Sec. 725.309,

[[Page 80074]]

a denial by reason of abandonment shall be deemed a finding that the 
claimant has not established any applicable condition of entitlement. 
If the claimant timely requests a hearing, the district director shall 
refer the case to the Office of Administrative Law Judges in accordance 
with Sec. 725.421. Except upon the motion or written agreement of the 
Director, the hearing will be limited to the issue of whether the claim 
was properly denied by reason of abandonment. If the hearing is limited 
to the issue of abandonment and the administrative law judge determines 
that the claim was not properly denied by reason of abandonment, he 
shall remand the claim to the district director for the completion of 
administrative processing.


Sec. 725.410  Submission of additional evidence.

    (a) After the district director completes the development of 
medical evidence under Sec. 725.405 of this part, including the 
complete pulmonary evaluation authorized by Sec. 725.406, and receives 
the responses and evidence submitted pursuant to Sec. 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 Sec. 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 
Sec. 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 Sec. 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 
Sec. 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 
Sec. 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 Sec. 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 Sec. 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 Sec. 725.407. The schedule shall be 
served on each party by certified mail.


Sec. 725.411  Initial adjudication in Trust Fund cases.

    Notwithstanding the requirements of Sec. 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 
Sec. 725.418 of this part.


Sec. 725.412  Operator's response.

    (a)(1) Within 30 days after the district director issues a schedule 
pursuant to Sec. 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 Sec. 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 
Sec. 725.410 of this part, the operator shall be deemed to have 
contested the claimant's entitlement.


Sec. 725.413  [Reserved].


Sec. 725.414  Development of evidence.

    (a) Medical evidence.
    (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

[[Page 80075]]

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.
    (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 Sec. 725.406. In any case in which the party opposing 
entitlement has submitted the results of other testing pursuant to 
Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 725.406. In any case in which the claimant has 
submitted the results of other testing pursuant to Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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) Evidence pertaining to liability. (1) Except as provided by 
Sec. 725.408(b)(2), the designated responsible operator may submit 
evidence to demonstrate that it is not the potentially liable operator 
that most recently employed the claimant.
    (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) Testimony. A physician who prepared a medical report admitted 
under this section may testify with respect to the claim at any formal 
hearing conducted in accordance with subpart F of this part, or by 
deposition. If a party has submitted fewer than two medical reports as 
part of that party's affirmative case under this section, a physician 
who did not prepare a medical report may testify in lieu of such a 
medical report. The testimony of such a physician shall be considered a 
medical report for purposes of the limitations provided by this 
section. A party may offer the testimony of no more than two physicians 
under the provisions of this section unless the adjudication officer 
finds good cause under paragraph (b)(1) of Sec. 725.456 of this part. 
In accordance with the schedule issued by the district director, all 
parties shall notify the district director of the name and current 
address of any potential witness whose testimony pertains to the 
liability of a potentially liable operator or the

[[Page 80076]]

designated responsible operator. Absent such notice, the testimony of a 
witness relevant to the liability of a potentially liable operator or 
the designated responsible operator shall not be admitted in any 
hearing conducted with respect to the claim unless the administrative 
law judge finds that the lack of notice should be excused due to 
extraordinary circumstances.
    (d) Except to the extent permitted by Sec. 725.456 and 
Sec. 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.


Sec. 725.415  Action by the district director after development of 
evidence.

    (a) At the end of the period permitted under Sec. 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 
Sec. 725.414.
    (b) After review of all evidence submitted, the district director 
may issue another schedule for the submission of additional evidence 
pursuant to Sec. 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 
Sec. 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 Sec. 725.414. The district 
director may also schedule a conference in accordance with 
Sec. 725.416, issue a proposed decision and order in accordance with 
Sec. 725.418, or take such other action as the district director 
considers appropriate.


Sec. 725.416  Conferences.

    (a) At the conclusion of the period permitted by Sec. 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 
Sec. 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 Sec. 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 Sec. 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.


Sec. 725.417  Action at the conclusion of conference.

    (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 Sec. 725.414. The district director may also notify additional 
operators of their potential liability pursuant to Sec. 725.407, or 
issue another schedule for the submission of additional evidence 
pursuant to Sec. 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 Sec. 725.418 of this 
part.


Sec. 725.418  Proposed decision and order.

    (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 Sec. 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 
Sec. 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,

[[Page 80077]]

    (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 Sec. 725.407, and the opportunity to 
submit additional evidence pursuant to Sec. 725.410. The district 
director shall dismiss, as parties to the claim, all other potentially 
liable operators that received notification pursuant to Sec. 725.407 
and that were not previously dismissed pursuant to Sec. 725.410(a)(3).


Sec. 725.419  Response to proposed decision and order.

    (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 Sec. 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 Sec. 725.310.


Sec. 725.420  Initial determinations.

    (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 Sec. 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 Sec. 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 Sec. 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.


Sec. 725.421  Referral of a claim to the Office of Administrative Law 
Judges.

    (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 Sec. 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 Sec. 725.418, or the fund, as appropriate, 
subject to the limitations of Sec. 725.414 of this part; this evidence 
shall include the results of any medical examination or test conducted 
pursuant to Sec. 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

[[Page 80078]]

may be sent to the party upon the payment of a copying fee to be 
determined by the district director.


Sec. 725.422  Legal assistance.

    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.


Sec. 725.423  Extensions of time.

    Except for the 30-day time limit set forth in Sec. 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.

Subpart F--Hearings


Sec. 725.450  Right to a hearing.

    Any party to a claim (see Sec. 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.


Sec. 725.451  Request for hearing.

    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 
Sec. 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 Sec. 725.421.


Sec. 725.452  Type of hearing; parties.

    (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 et seq.
    (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.


Sec. 725.453  Notice of hearing.

    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.


Sec. 725.454  Time and place of hearing; transfer of cases.

    (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.


Sec. 725.455  Hearing procedures; generally.

    (a) General. The purpose of any hearing conducted under this 
subpart shall be to resolve contested issues of fact or law. Except as 
provided in Sec. 725.421(b)(8), any findings or determinations made 
with respect to a claim by a district director shall not be considered 
by the administrative law judge.
    (b) Evidence. The administrative law judge shall at the hearing 
inquire fully into all matters at issue, and shall not be bound by 
common law or statutory rules of evidence, or by technical or formal 
rules of procedure, except as provided by 5 U.S.C. 554 and this 
subpart. The administrative law judge shall receive into evidence the 
testimony of the witnesses and parties, the evidence submitted to the 
Office of Administrative Law Judges by the district director under 
Sec. 725.421, and such additional evidence as may be submitted in 
accordance with the provisions of this subpart. The administrative law 
judge may entertain the objections of any party to the evidence 
submitted under this section.
    (c) Procedure. The conduct of the hearing and the order in which 
allegations and evidence shall be presented shall be within the 
discretion of the administrative law judge and shall afford the parties 
an opportunity for a fair hearing.
    (d) Oral argument and written allegations. The parties, upon 
request, may be allowed a reasonable time for the presentation of oral 
argument at the hearing. Briefs or other written statements or 
allegations as to facts or law may be filed by any party with the 
permission of the administrative law judge. Copies of any brief or 
other written statement shall be filed with the administrative law 
judge and served on all parties by the submitting party.


Sec. 725.456  Introduction of documentary evidence.

    (a) All documents transmitted to the Office of Administrative Law 
Judges under Sec. 725.421 shall be placed into evidence by the 
administrative law judge, subject to objection by any party.

[[Page 80079]]

    (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 Sec. 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 Sec. 725.406, or any part 
thereof, fails to comply with the applicable quality standards, or 
fails to address the relevant conditions of entitlement (see 
Sec. 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.


Sec. 725.457  Witnesses.

    (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 Sec. 725.458, 
unless that person meets the requirements of Sec. 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 Sec. 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 Sec. 725.414. Such physician's 
opinion shall be considered a medical report subject to the limitations 
of Sec. 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.


Sec. 725.458  Depositions; interrogatories.

    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 
Sec. 725.457(d).


Sec. 725.459  Witness fees.

    (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

[[Page 80080]]

disclosure of facts. If such witness is required to attend the hearing, 
give a deposition or respond to interrogatories for cross-examination 
purposes, the proponent of the witness shall pay the witness' fee. If 
the claimant is the proponent of the witness whose cross-examination is 
sought, and demonstrates, within time limits established by the 
administrative law judge, that he would be deprived of ordinary and 
necessary living expenses if required to pay the witness fee and 
mileage necessary to produce that witness for cross-examination, the 
administrative law judge shall apportion the costs of such cross-
examination among the parties to the case. The administrative law judge 
shall not apportion any costs against the fund in a case in which the 
district director has designated a responsible operator, except that 
the fund shall remain liable for any costs associated with the cross-
examination of the physician who performed the complete pulmonary 
evaluation pursuant to Sec. 725.406.
    (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.


Sec. 725.460  Consolidated hearings.

    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.


Sec. 725.461  Waiver of right to appear and present evidence.

    (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 Sec. 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 Sec. 725.465).


Sec. 725.462  Withdrawal of controversion of issues set for formal 
hearing; effect.

    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.


Sec. 725.463  Issues to be resolved at hearing; new issues.

    (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 Sec. 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.


Sec. 725.464  Record of hearing.

    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.


Sec. 725.465  Dismissals for cause.

    (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 Sec. 725.4(d)).
    (b) A party who is not a proper party to the claim (see 
Sec. 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

[[Page 80081]]

judge shall take such action as is appropriate to rule on the 
dismissal, which may include an order dismissing the claim, defense or 
party.
    (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 Sec. 725.522, except upon the motion or written 
agreement of the Director.


Sec. 725.466  Order of dismissal.

    (a) An order dismissing a claim shall be served on the parties in 
accordance with Sec. 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 Sec. 725.522, 
and the order of dismissal shall, if appropriate, order the claimant to 
reimburse the fund for all benefits paid to the claimant.


Sec. 725.475  Termination of hearings.

    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.


Sec. 725.476  Issuance of decision and order.

    Within 20 days after the official termination of the hearing (see 
Sec. 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.


Sec. 725.477  Form and contents of decision and order.

    (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.


Sec. 725.478  Filing and service of decision and order.

    On the date of issuance of a decision and order under Sec. 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.


Sec. 725.479  Finality of decisions and orders.

    (a) A decision and order shall become effective when filed in the 
office of the district director (see Sec. 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 Sec. 725.481).
    (b) Any party may, within 30 days after the filing of a decision 
and order under Sec. 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.


Sec. 725.480  Modification of decisions and orders.

    A party who is dissatisfied with a decision and order which has 
become final in accordance with Sec. 725.479 may request a modification 
of the decision and order if the conditions set forth in Sec. 725.310 
are met.


Sec. 725.481  Right to appeal to the Benefits Review Board.

    Any party dissatisfied with a decision and order issued by an 
administrative law judge may, before the decision and order becomes 
final (see Sec. 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.


Sec. 725.482  Judicial review.

    (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.


Sec. 725.483  Costs in proceedings brought without reasonable grounds.

    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.

Subpart G--Responsible Coal Mine Operators


Sec. 725.490  Statutory provisions and scope.

    (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

[[Page 80082]]

is to pay benefits with respect to all claims in which the last coal 
mine employment of the miner on whose account the claim was filed 
occurred before January 1, 1970. With respect to most claims in which 
the miner's last coal mine employment occurred after January 1, 1970, 
individual coal mine operators will be liable for the payment of 
benefits. The 1981 amendments to the Act relieved individual coal mine 
operators from the liability for payment of certain special claims 
involving coal mine employment on or after January 1, 1970, where the 
claim was previously denied and subsequently approved under section 435 
of the Act. See Sec. 725.496 for a detailed description of these 
special claims. Where no such operator exists or the operator 
determined to be liable is in default in any case, the fund shall pay 
the benefits due and seek reimbursement as is appropriate. See also 
Sec. 725.420 for the fund's role in the payment of interim benefits in 
certain contested cases. In addition, the Black Lung Benefits Reform 
Act of 1977 amended certain provisions affecting the scope of coverage 
under the Act and describing the effects of particular corporate 
transactions on the liability of operators.
    (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.


Sec. 725.491  Operator defined.

    (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 Sec. 725.202);
    (ii) In accordance with the provisions of Sec. 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 Sec. 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 Sec. 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.


Sec. 725.492  Successor operator defined.

    (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 Sec. 725.494. If the prior operator does not meet the conditions set 
forth in Sec. 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 Sec. 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

[[Page 80083]]

vested in a person other than the prior operator.


725.493  Employment relationship defined.

    (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 Sec. 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 Sec. 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.


Sec. 725.494  Potentially liable operators.

    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 
(Sec. 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 (Sec. 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

[[Page 80084]]

insolvent and its obligations for the claim are not otherwise 
guaranteed;
    (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 Sec. 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 
Sec. 725.606.


Sec. 725.495  Criteria for determining a responsible operator.

    (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 
Sec. 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 
Sec. 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 Sec. 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 
Sec. 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 Sec. 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 
Sec. 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 
Sec. 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 Sec. 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 
Sec. 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 Sec. 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 Sec. 725.421 in which the operator finally designated as 
responsible pursuant to Sec. 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 Sec. 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 Sec. 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.


Sec. 725.496  Special claims transferred to the fund.

    (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

[[Page 80085]]

the agency's regulations, the procedural history of each such claim 
must be considered separately to determine whether the claim is subject 
to the transfer of liability provisions.
    (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.


Sec. 725.497  Procedures in special claims transferred to the fund.

    (a) General. It is the purpose of this section to define procedures 
to expedite the handling and disposition of claims affected by the 
benefit liability transfer provisions of Section 205 of the Black Lung 
Benefits Amendments of 1981.
    (b) Action by the Department. The OWCP shall, in accordance with 
the criteria contained in Sec. 725.496, review each claim which is or 
may be affected by the provisions of Section 205 of the Black Lung 
Benefits Amendments of 1981. Any party to a claim, adjudication 
officer, or adjudicative body may request that such a review be 
conducted and that the record be supplemented with any additional 
documentation necessary for an informed consideration of the 
transferability of the claim. Where the issue of the transferability of 
the claim can not be resolved by agreement of the parties and the 
evidence of record is not sufficient for a resolution of the issue, the 
hearing record may be reopened or the case remanded for the development 
of the additional evidence concerning the procedural history of the 
claim necessary to such resolution. Such determinations shall be made 
on an expedited basis.
    (c) Dismissal of operators. If it is determined that a coal mine 
operator or insurance carrier which previously participated in the 
consideration or adjudication of any claim, may no longer be found 
liable for the payment of benefits to the claimant by reason of section 
205 of the Black Lung Benefits Amendments of 1981, such operator or 
carrier shall be promptly dismissed as a party to the claim. The 
dismissal of an operator or carrier shall be concluded at the earliest 
possible time and in no event shall an operator or carrier participate 
as a necessary party in any claim for which only the fund may be 
liable.
    (d) Procedure following dismissal of an operator. After it has been 
determined that an operator or carrier must be dismissed as a party in 
any claim in accordance with this section, the Director shall take such 
action as is authorized by the Act to bring about the proper and 
expeditious resolution of the claim in light of all relevant medical 
and other evidence. Action to be taken in this regard by the Director 
may include, but is not limited to, the assignment of the claim to the 
Black Lung Disability Trust Fund for the payment of benefits, the 
reimbursement of benefits previously paid by an operator or carrier if 
appropriate, the defense of the claim on behalf of the fund, or 
proceedings authorized by Sec. 725.310.
    (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.

Subpart H--Payment of Benefits General Provisions


Sec. 725.501  Payment provisions generally.

    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 Sec. 725.4(d)).


Sec. 725.502  When benefit payments are due; manner of payment.

    (a)(1) Except with respect to benefits paid by the fund pursuant to 
an initial determination issued in accordance with Sec. 725.418 (see 
Sec. 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 Sec. 725.310.
    (2) A proposed order issued by a district director pursuant to 
Sec. 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 Sec. 725.419). An order issued by 
an administrative law judge becomes effective when it is filed in the 
office of the district director (see Sec. 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 
Sec. 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

[[Page 80086]]

payable for periods prior to the effective date of the order, in 
addition to any interest payable for such periods (see Sec. 725.608), 
and shall so notify the parties. Any computation made by the district 
director under this paragraph shall strictly observe the terms of the 
order. Benefits and interest payable for such periods shall be due on 
the thirtieth day following issuance of the district director's 
computation. A copy of the current table of applicable interest rates 
shall be attached to the computation.
    (c) Benefits are payable for monthly periods and shall be paid 
directly to an eligible claimant or his or her representative payee 
(see Sec. 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.


Sec. 725.503  Date from which benefits are payable.

    (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 Sec. 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 Sec. 727.302 (see Sec. 725.4(d)).
    (b) Miner's claim. Benefits are payable to a miner who is entitled 
beginning with the month of onset of total disability due to 
pneumoconiosis arising out of coal mine employment. Where the evidence 
does not establish the month of onset, benefits shall be payable to 
such miner beginning with the month during which the claim was filed. 
In the case of a miner who filed a claim before January 1, 1982, 
benefits shall be payable to the miner's eligible survivor (if any) 
beginning with the month in which the miner died.
    (c) Survivor's claim. Benefits are payable to a survivor who is 
entitled beginning with the month of the miner's death, or January 1, 
1974, whichever is later.
    (d) If a claim is awarded pursuant to section 22 of the Longshore 
Act and Sec. 725.310, then the date from which benefits are payable 
shall be determined as follows:
    (1) Mistake in fact. The provisions of paragraphs (b) or (c) of 
this section, as applicable, shall govern the determination of the date 
from which benefits are payable.
    (2) Change in conditions. Benefits are payable to a miner beginning 
with the month of onset of total disability due to pneumoconiosis 
arising out of coal mine employment, provided that no benefits shall be 
payable for any month prior to the effective date of the most recent 
denial of the claim by a district director or administrative law judge. 
Where the evidence does not establish the month of onset, benefits 
shall be payable to such miner from the month in which the claimant 
requested modification.
    (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 Sec. 727.303 (see Sec. 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.


Sec. 725.504  Payments to a claimant employed as a miner.

    (a) In the case of a claimant who is employed as a miner (see 
Sec. 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 Sec. 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.


Sec. 725.505  Payees.

    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.


Sec. 725.506  Payment on behalf of another; ``legal guardian'' defined.

    Benefits are paid only to the beneficiary, his or her 
representative payee (see Sec. 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.


Sec. 725.507  Guardian for minor or incompetent.

    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.


Sec. 725.510  Representative payee.

    (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

[[Page 80087]]

existence of such relationship, responsibility, or authority. If a 
person requesting representative payee status fails to submit the 
required evidence within a reasonable period of time after it is 
requested, no further payments shall be certified to him or her on 
behalf of the beneficiary unless the required evidence is thereafter 
submitted.
    (c) All benefit payments made to a representative payee shall be 
available only for the use and benefit of the beneficiary, as defined 
in Sec. 725.511.


Sec. 725.511  Use and benefit defined.

    (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--i.e., to replace current income lost because of the 
disability of the beneficiary. Where a beneficiary is receiving care in 
an institution, current maintenance shall include the customary charges 
made by the institution and charges made for the current and 
foreseeable needs of the beneficiary which are not met by the 
institution.
    (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 Sec. 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:

Name of beneficiary----------------------------------------------------

by (Name of representative payee) representative payee,
or (Name of beneficiary)
by (Name of representative payee) trustee,

    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.


Sec. 725.512  Support of legally dependent spouse, child, or parent.

    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.


Sec. 725.513  Accountability; transfer.

    (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.


Sec. 725.514  Certification to dependent of augmentation portion of 
benefit.

    (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.


Sec. 725.515  Assignment and exemption from claims of creditors.

    (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.

Benefit Rates


Sec. 725.520  Computation of benefits.

    (a) Basic rate. The amount of benefits payable to a beneficiary for 
a month is determined, in the first instance, by computing the ``basic 
rate.'' The basic rate is equal to 37\1/2\ percent of the monthly pay 
rate for Federal employees in GS-2, step 1. That rate for a month is 
determined by:
    (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\1/2\ percent).
    (b) Basic benefit. When a miner or surviving spouse is entitled to 
benefits for a month for which he or she has no dependents who qualify 
under this part and when a surviving child of a miner or spouse, or a 
parent, brother, or sister of a miner, is entitled to benefits for a 
month for which he or she is the only

[[Page 80088]]

beneficiary entitled to benefits, the amount of benefits to which such 
beneficiary is entitled is equal to the basic rate as computed in 
accordance with this section (raised, if not a multiple of 10 cents, to 
the next high multiple of 10 cents). This amount is referred to as the 
``basic benefit.''
    (c) Augmented benefit. (1) When a miner or surviving spouse is 
entitled to benefits for a month for which he or she has one or more 
dependents who qualify under this part, the amount of benefits to which 
such miner or surviving spouse is entitled is increased. This increase 
is referred to as an ``augmentation.''
    (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) Survivor benefits. As used in this section, ``survivor'' means 
a surviving child of a miner or surviving spouse, or a surviving 
parent, brother, or sister of a miner, who establishes entitlement to 
benefits under this part.
    (e) Computation and rounding. (1) Any computation prescribed by 
this section is made to the third decimal place.
    (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) Eligibility based on the coal mine employment of more than one 
miner. Where an individual, for any month, is entitled (and/or 
qualifies as a dependent for purposes of augmentation of benefits) 
based on the disability or death due to pneumoconiosis arising out of 
the coal mine employment of more than one miner, the benefit payable to 
or on behalf of such individual shall be at a rate equal to the highest 
rate of benefits for which entitlement is established by reason of 
eligibility as a beneficiary, or by reason of his or her qualification 
as a dependent for augmentation of benefit purposes.


Sec. 725.521  Commutation of payments; lump sum awards.

    (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.


Sec. 725.522  Payments prior to final adjudication.

    (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 
Sec. 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 Secs. 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 Sec. 725.540 and may be recovered in 
accordance with the provisions of this subpart.

Special Provisions for Operator Payments


Sec. 725.530  Operator payments; generally.

    (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

[[Page 80089]]

claimant, shall be paid by the operator or carrier immediately when 
they become due (see Sec. 725.502(b)). An operator that fails to pay 
any benefits that are due, with interest, shall be considered in 
default with respect to those benefits, and the provisions of 
Sec. 725.605 of this part shall be applicable. In addition, a claimant 
who does not receive any benefits within 10 days of the date they 
become due is entitled to additional compensation equal to twenty 
percent of those benefits (see Sec. 725.607). Arrangements for the 
payment of medical costs shall be made by such operator or carrier in 
accordance with the provisions of subpart J of this part.
    (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.


Sec. 725.531  Receipt for payment.

    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.


Sec. 725.532  Suspension, reduction, or termination of payments.

    (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, 
Secs. 725.306 and 725.310, or this subpart (see also Secs. 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.

Increases and Reductions of Benefits


Sec. 725.533  Modification of benefits amounts; general.

    (a) Under certain circumstances, the amount of monthly benefits as 
computed in Sec. 725.520 or lump-sum award (Sec. 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 Sec. 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 Secs. 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.


Sec. 725.534  Reduction of State benefits.

    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.


Sec. 725.535  Reductions; receipt of State or Federal benefit.

    (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

[[Page 80090]]

received by such beneficiary for such month.
    (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\1/3\ and a biweekly benefit 
is multiplied by 2\1/6\ to ascertain the monthly equivalent for 
reduction purposes.
    (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.


Sec. 725.536  Reductions; excess earnings.

    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 Secs. 404.428 through 404.456 of this title).


Sec. 725.537  Reductions; retroactive effect of an additional claim for 
benefits.

    Except as provided in Sec. 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.


Sec. 725.538  Reductions; effect of augmentation of benefits based on 
subsequent qualification of individual.

    (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.


Sec. 725.539  More than one reduction event.

    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.

Overpayments; Underpayments


Sec. 725.540  Overpayments.

    (a) General. As used in this subpart, the term ``overpayment'' 
includes:
    (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 Sec. 725.533);
    (4) A payment under this part made to a resident of a State whose 
residents are not entitled to benefits (see Secs. 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 Sec. 725.4(d)) of 
this title or as provided in Sec. 725.309.
    (b) Overpaid beneficiary is living. If the beneficiary to whom an 
overpayment was made is living at the time of a determination of such 
overpayment, is entitled to benefits at the time of the overpayment, or 
at any time thereafter becomes so entitled, no benefit for any month is 
payable to such individual, except as provided in paragraph (c) of this 
section, until an amount equal to the amount of the overpayment has 
been withheld or refunded.
    (c) Adjustment by withholding part of a monthly benefit. Adjustment 
under paragraph (b) of this section may be effected by withholding a 
part of the monthly benefit payable to a beneficiary where it is 
determined that:
    (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.

[[Page 80091]]

    (d) Overpaid beneficiary dies before adjustment. If an overpaid 
beneficiary dies before adjustment is completed under the provisions of 
paragraph (b) of this section, recovery of the overpayment shall be 
effected through repayment by the estate of the deceased overpaid 
beneficiary, or by withholding of amounts due the estate of such 
deceased beneficiary, or both.


Sec. 725.541  Notice of waiver of adjustment or recovery of 
overpayment.

    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.


Sec. 725.542  When waiver of adjustment or recovery may be applied.

    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.


Sec. 725.543  Standards for waiver of adjustment or recovery.

    The standards for determining the applicability of the criteria 
listed in Sec. 725.542 shall be the same as those applied by the Social 
Security Administration under Secs. 404.506 through 404.512 of this 
title.


Sec. 725.544  Collection and compromise of claims for overpayment.

    (a) General effect of 31 U.S.C. 3711. In accordance with 31 U.S.C. 
3711 and applicable regulations, claims by the Office against an 
individual for recovery of an overpayment under this part not exceeding 
the sum of $100,000, exclusive of interest, may be compromised, or 
collection suspended or terminated, where such individual or his or her 
estate does not have the present or prospective ability to pay the full 
amount of the claim within a reasonable time (see paragraph (c) of this 
section), or the cost of collection is likely to exceed the amount of 
recovery (see paragraph (d) of this section), except as provided under 
paragraph (b) of this section.
    (b) When there will be no compromise, suspension, or termination of 
collection of a claim for overpayment. (1) In any case where the 
overpaid individual is alive, a claim for overpayment 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 
individual or on the part of any other party having any interest in the 
claim.
    (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) Inability to pay claim for recovery of overpayment. In 
determining whether the overpaid individual is unable to pay a claim 
for recovery of an overpayment under this part, the Office shall 
consider the individual's age, health, present and potential income 
(including inheritance prospects), assets (e.g., real property, savings 
account), possible concealment or improper transfer of assets, and 
assets or income of such individual which may be available in enforced 
collection proceedings. The Office will also consider exemptions 
available to such individual under the pertinent State or Federal law 
in such proceedings. In the event the overpaid individual is deceased, 
the Office shall consider the available assets of the estate, taking 
into account any liens or superior claims against the estate.
    (d) Cost of collection or litigative probabilities. Where the 
probable costs of recovering an overpayment under this part would not 
justify enforced collection proceedings for the full amount of the 
claim, or where there is doubt concerning the Office's ability to 
establish its claim as well as the time which it will take to effect 
such collection, a compromise or settlement for less than the full 
amount may be considered.
    (e) Amount of compromise. The amount to be accepted in compromise 
of a claim for overpayment under this part shall bear a reasonable 
relationship to the amount which can be recovered by enforced 
collection proceedings, giving due consideration to the exemption 
available to the overpaid individual under State or Federal law and the 
time which collection will take.
    (f) Payment. Payment of the amount the Office has agreed to accept 
as a compromise in full settlement of a claim for recovery of an 
overpayment under this part shall be made within the time and in the 
manner set by the Office. A claim for the overpayment shall not be 
considered compromised or settled until the full payment of the 
compromised amount has been made within the time and manner set by the 
Office. Failure of the overpaid individual or his or her estate to make 
such payment as provided shall result in reinstatement of the full 
amount of the overpayment less any amounts paid prior to such default.


Sec. 725.545  Underpayments.

    (a) General. As used in this subpart, the term ``underpayment'' 
includes a payment in an amount less than the amount of the benefit due 
for such month, and nonpayment where some amount of such benefits is 
payable.
    (b) Underpaid individual is living. If an individual to whom an 
underpayment was made is living, the deficit represented by such 
underpayment shall be paid to such individual either in a single 
payment (if he or she is not entitled to a monthly benefit or if a 
single payment is requested by the claimant in writing) or by 
increasing one or more monthly benefit payments to which such 
individual becomes entitled.
    (c) Underpaid individual dies before adjustment of underpayment. If 
an individual to whom an underpayment was made dies before receiving 
payment of the deficit or negotiating the check or checks representing 
payment of the deficit, such payment shall be distributed to the living 
person (or persons) in the highest order of priority as follows:
    (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).

[[Page 80092]]

    (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) Deceased beneficiary. In the event that a person, who is 
otherwise qualified to receive payments as the result of a deficit 
caused by an underpayment under the provisions of paragraph (c) of this 
section, dies before receiving payment or before negotiating the check 
or checks representing such payment, his or her share of the 
underpayment shall be divided among the remaining living person(s) in 
the same order or priority. In the event that there is (are) no other 
such person(s), the underpayment shall be paid to the living person(s) 
in the next lower order of priority under paragraph (c) of this 
section.
    (e) Definition of legal representative. The term ``legal 
representative,'' for the purpose of qualifying for receipt of an 
underpayment, generally means the executor or the administrator of the 
estate of the deceased beneficiary. However, it may also include an 
individual, institution or organization acting on behalf of an 
unadministered estate, provided the person can give the Office good 
acquittance (as defined in paragraph (f) of this section). The 
following persons may qualify as legal representative for purposes of 
this section, provided they can give the Office good acquittance:
    (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) Definition of ``good acquittance.'' A person is considered to 
give the Office ``good acquittance'' when payment to that person will 
release the Office from further liability for such payment.


Sec. 725.546  Relation to provisions for reductions or increases.

    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.


Sec. 725.547  Applicability of overpayment and underpayment provisions 
to operator or carrier.

    (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.


Sec. 725.548  Procedures applicable to overpayments and underpayments.

    (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.

Subpart I--Enforcement of Liability; Reports


Sec. 725.601  Enforcement generally.

    (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 Sec. 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 Sec. 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 Sec. 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 Sec. 725.605. In all cases payments in addition to 
compensation (see Sec. 725.607) and interest (see Sec. 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.


Sec. 725.602  Reimbursement 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.


Sec. 725.603  Payments by the fund on behalf of an operator; liens.

    (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 
Sec. 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 Sec. 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.

[[Page 80093]]

    (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.


Sec. 725.604  Enforcement of final awards.

    Notwithstanding the provisions of Sec. 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.


Sec. 725.605  Defaults.

    (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.


Sec. 725.606  Security for the payment of benefits.

    (a) Following the issuance of an effective order by a district 
director (see Sec. 725.418), administrative law judge (see 
Sec. 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 
Sec. 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 Secs. 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 Sec. 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

[[Page 80094]]

into account the life expectancies of the claimant and any dependents 
using the most recent life expectancy tables published by the Social 
Security Administration; or
    (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 Secs. 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 
Sec. 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 Sec. 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 Sec. 725.609 shall be applicable to the 
president, secretary, and treasurer of such employer.


Sec. 725.607  Payments in addition to compensation.

    (a) If any benefits payable under the terms of an award by a 
district director (Sec. 725.419(d)), a decision and order filed and 
served by an administrative law judge (Sec. 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.


Sec. 725.608  Interest.

    (a)(1) In any case in which an operator fails to pay benefits that 
are due (Sec. 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 
Sec. 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 (Sec. 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 
Sec. 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

[[Page 80095]]

operator's liability to the fund, as is otherwise provided in this 
part. Interest payments owed pursuant to this paragraph shall be paid 
directly to the fund.
    (c) In any case in which an operator is liable for the payment of 
an attorney's fee pursuant to Sec. 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.).


Sec. 725.609  Enforcement against other persons.

    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 Sec. 726.4, and the operator has not secured its liability for 
the claim in accordance with Sec. 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 (Sec. 725.494(e)), 
against any operator which became a successor operator with respect to 
the liable operator (Sec. 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 (Sec. 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.


Sec. 725.620  Failure to secure benefits; other penalties.

    (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.


Sec. 725.621  Reports.

    (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.

Subpart J--Medical Benefits and Vocational Rehabilitation


Sec. 725.701  Availability of medical benefits.

    (a) A miner who is determined to be eligible for benefits under 
this part or part 727 of this subchapter (see Sec. 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

[[Page 80096]]

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 requires.
    (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 Sec. 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.


Sec. 725.702  Claims for medical benefits only under section 11 of the 
Reform Act.

    (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 Sec. 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 Sec. 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 Sec. 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 
Sec. 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.


Sec. 725.703  Physician defined.

    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.


Sec. 725.704  Notification of right to medical benefits; authorization 
of treatment.

    (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

[[Page 80097]]

change physicians or facilities subject to the approval of the Office.
    (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.


Sec. 725.705  Arrangements for medical care.

    (a) Operator liability. If an operator has been determined liable 
for the payment of benefits to a miner, the Office shall notify such 
operator or insurer of the names, addresses, and telephone numbers of 
the authorized providers of medical benefits chosen by an entitled 
miner, and shall require the operator or insurer to:
    (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) Fund liability. If there is no operator found liable for the 
payment of benefits, the Office shall make necessary arrangements to 
provide medical care to the miner, notify the miner and medical care 
facility selected of the liability of the fund, designate a person or 
persons with whom the miner or provider may communicate on matters 
relating to medical care, and make arrangements for the direct 
reimbursement of the medical provider.


Sec. 725.706  Authorization to provide medical services.

    (a) Except as provided in paragraph (b) of this section, medical 
services from an authorized provider which are payable under 
Sec. 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.


Sec. 725.707  Reports of physicians and supervision of medical care.

    (a) Within 30 days following the first medical or surgical 
treatment provided under Sec. 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.


Sec. 725.708  Disputes concerning medical benefits.

    (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 Sec. 727.405 of 
this subchapter (see Sec. 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 Sec. 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.


Sec. 725.710  Objective of vocational rehabilitation.

    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.


Sec. 725.711  Requests for referral to vocational rehabilitation 
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 Secs. 702.501 through 702.508 of this chapter as is 
appropriate.

    5. Part 726 is revised as follows:

PART 726--BLACK LUNG BENEFITS; REQUIREMENTS FOR COAL MINE 
OPERATOR'S INSURANCE

Subpart A--General
Sec.
726.1  Statutory insurance requirements for coal mine operators.
726.2  Purpose and scope of this part.
726.3  Relationship of this part to other parts in this subchapter.
726.4  Who must obtain insurance coverage.
726.5  Effective date of insurance coverage.
726.6  The Office of Workers' Compensation Programs.
726.7  Forms, submission of information.
726.8  Definitions.
Subpart B--Authorization of Self-Insurers
726.101  Who may be authorized to self-insure.
726.102  Application for authority to become a self-insurer; how 
filed; information to be submitted.
726.103  Application for authority to self-insure; effect of 
regulations contained in this part.

[[Page 80098]]

726.104  Action by the Office upon application of operator.
726.105  Fixing the amount of security.
726.106  Type of security.
726.107  Deposits of negotiable securities with Federal Reserve 
banks or the Treasurer of the United States; authority to sell such 
securities; interest thereon.
726.108  Withdrawal of negotiable securities.
726.109  Increase or reduction in the amount of security.
726.110  Filing of agreement and undertaking.
726.111  Notice of authorization to self-insure.
726.112  Reports required of self-insurer; examination of accounts 
of self-insurer.
726.113  Disclosure of confidential information.
726.114  Period of authorization as self-insurer; reauthorization.
726.115  Revocation of authorization to self-insure.
Subpart C--Insurance Contracts
726.201  Insurance contracts--generally.
726.202  Who may underwrite an operator's liability.
726.203  Federal Coal Mine Health and Safety Act endorsement.
726.204  Statutory policy provisions.
726.205  Other forms of endorsement and policies.
726.206  Terms of policies.
726.207  Discharge by the carrier of obligations and duties of 
operator.

Reports by Carrier

726.208  Report by carrier of issuance of policy or endorsement.
726.209  Report; by whom sent.
726.210  Agreement to be bound by report.
726.211   Name of one employer only shall be given in each report.
726.212   Notice of cancellation.
726.213   Reports by carriers concerning the payment of benefits.
Subpart D--Civil Money Penalties
726.300   Purpose and scope.
726.301   Definitions.
726.302   Determination of penalty.
726.303   Notification; investigation.
726.304   Notice of initial assessment.
726.305   Contents of notice.
726.306   Finality of administrative assessment.
726.307   Form of notice of contest and request for hearing.
726.308   Service and computation of time.
726.309   Referral to the Office of Administrative Law Judges.
726.310   Appointment of Administrative Law Judge and notification 
of hearing date.
726.311   Evidence.
726.312   Burdens of proof.
726.313   Decision and Order of Administrative Law Judge.
726.314   Review by the Secretary.
726.315   Contents.
726.316   Filing and service.
726.317   Discretionary review.
726.318   Final decision of the Secretary.
726.319   Retention of official record.
726.320   Collection and recovery of penalty.

    Authority:  5 U.S.C. 301, Reorganization Plan No. 6 of 1950, 15 
FR 3174, 30 U.S.C. 901 et seq., 902(f), 925, 932, 933, 934, 936, 
945; 33 U.S.C. 901 et seq., Secretary's Order 7-87, 52 FR 48466, 
Employment Standards Order No. 90-02.

Subpart A--General


Sec. 726.1  Statutory insurance requirements for coal mine operators.

    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).


Sec. 726.2  Purpose and scope of this part.

    (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.


Sec. 726.3  Relationship of this part to other parts in this 
subchapter.

    (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.


Sec. 726.4  Who must obtain insurance coverage.

    (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

[[Page 80099]]

policy or contract of insurance shall in no way relieve such business 
entity of its obligation to pay pneumoconiosis benefits in respect of 
any case in which such business entity's responsibility for such 
payments has been properly adjudicated. Any business entity described 
in this section shall take appropriate steps to insure that any 
liability imposed by part C of the Act on such business entity shall be 
dischargeable.


Sec. 726.5  Effective date of insurance coverage.

    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.


Sec. 726.6  The Office of Workers' Compensation Programs.

    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:

Division of Coal Mine Workers' Compensation, Office of Workers' 
Compensation Programs, Employment Standards Administration, U.S. 
Department of Labor, Washington, D.C. 20210


Sec. 726.7  Forms, submission of information.

    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.


Sec. 726.8  Definitions.

    In addition to the definitions provided in part 725 of this 
subchapter, the following definitions apply to this part:
    (a) Director means the Director, Office of Workers' Compensation 
Programs, and includes any official of the Office of Workers' 
Compensation Programs authorized by the Director to perform any of the 
functions of the Director under this part and part 725 of this 
subchapter.
    (b) Person includes any individual, partnership, corporation, 
association, business trust, legal representative, or organized group 
of persons.
    (c) Secretary means the Secretary of Labor or such other official 
as the Secretary shall designate to carry out any responsibility under 
this part.
    (d) 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.

Subpart B--Authorization of Self-Insurers


Sec. 726.101  Who may be authorized to self-insure.

    (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 Sec. 726.104) and in an amount to be determined by the 
Office (see Sec. 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.


Sec. 726.102  Application for authority to become a self-insurer; how 
filed; information to be submitted.

    (a) How filed. Application for authority to become a self-insurer 
shall be addressed to the Office and be made

[[Page 80100]]

on a form provided by the Office. Such application shall be signed by 
the applicant over his typewritten name and if the applicant is not an 
individual, by the principal officer of the applicant duly authorized 
to make such application over his typewritten name and official 
designation and shall be sworn to by him. If the applicant is a 
corporation, the corporate seal shall be affixed. The application shall 
be filed with the Office in Washington, D.C.
    (b) Information to be submitted. Each application for authority to 
self-insure shall contain:
    (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) Who may file. An application for authorization to self-insure 
may be filed by any parent or subsidiary corporation, partner or 
partnership, party to a joint venture or joint venture, individual, or 
other business entity which may be determined liable for the payment of 
black lung benefits under part C of title IV of the Act, regardless of 
whether such applicant is directly engaged in the business of mining 
coal. However, in each case for which authorization to self-insure is 
granted, the agreement and undertaking filed pursuant to Sec. 726.110 
and the security deposit shall be respectively filed by and deposited 
in the name of the applicant only.


Sec. 726.103  Application for authority to self-insure; effect of 
regulations contained in this part.

    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.


Sec. 726.104  Action by the Office upon application of operator.

    (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 Sec. 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 Secs. 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.


Sec. 726.105  Fixing the amount of security.

    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.


Sec. 726.106  Type of security.

    (a) The Office shall determine the type or types of security which 
an applicant shall or may procure. (See Sec. 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: Provided, That only corporations may act as sureties on such 
indemnity bonds. In each case in which the surety on any such bond is a 
surety company, such company must be one approved by the U.S. Treasury 
Department under the laws of the United States and the applicable rules 
and regulations governing bonding companies (see Department of 
Treasury's Circular--570).
    (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.


Sec. 726.107  Deposits of negotiable securities with Federal Reserve 
banks or the Treasurer of the United States; authority to sell such 
securities; interest thereon.

    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

[[Page 80101]]

discretion in the event of default by the said self-insurer, to collect 
the interest as it may become due, to sell the securities or any of 
them as may be required to discharge the obligations of the self-
insurer under the Act and to apply the proceeds to the payment of any 
benefits or medical expenses for which the self-insurer may be liable. 
The Office may, however, whenever it deems it unnecessary to resort to 
such securities for the payment of benefits, authorize the self-insurer 
to collect interest on the securities deposited by him.


Sec. 726.108  Withdrawal of negotiable securities.

    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.


Sec. 726.109  Increase or reduction in the amount of security.

    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.


Sec. 726.110  Filing of agreement and undertaking.

    (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 
Sec. 726.104) and in an amount established by the Office (see 
Sec. 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.


Sec. 726.111  Notice of authorization to self-insure.

    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.


Sec. 726.112  Reports required of self-insurer; examination of accounts 
of self-insurer.

    (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.


Sec. 726.113  Disclosure of confidential information.

    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.)


Sec. 726.114  Period of authorization as self-insurer; reauthorization.

    (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 Secs. 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

[[Page 80102]]

security provided, a new agreement and undertaking shall be executed.
    (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.


Sec. 726.115  Revocation of authorization to self-insure.

    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.

Subpart C--Insurance Contracts


Sec. 726.201  Insurance contracts--generally.

    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.


Sec. 726.202  Who may underwrite an operator's liability.

    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.


Sec. 726.203  Federal Coal Mine Health and Safety Act endorsement.

    (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) Operator liability. (i) Section 415 and part C of title IV of 
the Act provide coverage for total disability or death due to 
pneumoconiosis to all claimants who meet the eligibility requirements 
imposed by the Act. Section 422 of the Act and the regulations duly 
promulgated thereunder (part 725 of this subchapter) set forth the 
conditions under which a coal mine operator may be adjudicated liable 
for the payment of benefits to an eligible claimant for any period 
subsequent to December 31, 1973.
    (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) Successor liability. Section 422(i) of part C of title IV of 
the Act requires that a coal mine operator who after December 30, 1969, 
acquired his mine or substantially all of the assets thereof from a 
person who was an operator of such mine on or after December 30, 1969, 
shall be liable for and shall secure the payment of benefits which 
would have been payable by the prior operator with respect to miners 
previously employed in such mine if the

[[Page 80103]]

acquisition had not occurred and the prior operator had continued to 
operate such mine. In the case of an operator who is determined liable 
for the payment of benefits under section 422(i) of the Act and part 
725 of this subchapter, such liability shall accrue to such operator 
regardless of the fact that the miner on whose total disability or 
death the claim is predicated was never employed by such operator in 
any capacity. The endorsement provisions contained in paragraph (a) of 
this section shall be construed to incorporate this requirement 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.
    (3) Medical eligibility. Pursuant to section 422(h) of part C of 
title IV of the Act and the regulations described therein (see subpart 
D of part 410 of this title) benefits shall be paid to eligible 
claimants on account of total disability or death due to pneumoconiosis 
and in cases where the miner on whose death a claim is predicated was 
totally disabled by pneumoconiosis at the time of his death regardless 
of the cause of such death. 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.
    (4) Payment of benefits, rates. Section 422(c) of the Act by 
incorporating section 412(a) of the Act requires the payment of 
benefits at a rate equal to 50 per centum of the minimum monthly 
payment to which a Federal employee in grade GS-2, who is totally 
disabled is entitled at the time of payment under Chapter 81 of title 
5, United States Code. These benefits are augmented on account of 
eligible dependents as appropriate (see section 412(a) of part B of 
title IV of the Act). Since the dollar amount of benefits payable to 
any beneficiary is required to be computed at the time of payment such 
amounts may be expected to increase from time to time as changes in the 
GS-2 grade are enacted into law. The endorsement provisions contained 
in paragraph (a) of this section shall be construed to incorporate 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, the 
requirement that the payment of benefits to eligible beneficiaries 
shall be made in such dollar amounts as are prescribed by section 
412(a) of the Act computed at the time of payment.
    (5) Compromise and waiver of benefits. Section 422(a) of part C of 
title IV of the Act by incorporating sections 15(b) and 16 of the 
Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 915(b) 
and 916) prohibits the compromise and/or waiver of claims for benefits 
filed or benefits payable under section 415 and part C of title IV of 
the Act. The endorsement provisions contained in paragraph (a) of this 
section shall be construed to incorporate these prohibitions 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.
    (6) Additional requirements. In addition to the requirements 
described in paragraph (c)(1) through (5) of this section, the 
endorsement provisions contained in paragraph (a) of this section 
shall, to the fullest extent possible, be construed to bring any policy 
or contract of insurance entered into by an operator for the purpose of 
insuring such operator's liability under part C of title IV of the Act 
into conformity with the legal requirements placed upon such operator 
by section 415 and part C of title IV of the Act and parts 720 and 725 
of this subchapter.
    (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.


Sec. 726.204  Statutory policy provisions.

    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.


Sec. 726.205  Other forms of endorsement and policies.

    Forms of endorsement or policies other than that described in 
Sec. 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.


Sec. 726.206  Terms of policies.

    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.


Sec. 726.207  Discharge by the carrier of obligations and duties of 
operator.

    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.

Reports by Carrier


Sec. 726.208  Report by carrier of issuance of policy or endorsement.

    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.


Sec. 726.209  Report; by whom sent.

    The report of issuance, cancellation, or renewal of a policy and 
endorsement provided for in Sec. 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.


Sec. 726.210  Agreement to be bound by report.

    Every carrier seeking to write insurance under the provisions of 
the

[[Page 80104]]

Act shall be deemed to have agreed that the acceptance by the Office of 
a report of the issuance or renewal of a policy of insurance, as 
provided for by Sec. 726.208 shall bind the carrier to full liability 
for the obligations under the Act of the operator named in said report. 
It shall be no defense to this agreement that the carrier failed or 
delayed to issue, cancel, or renew the policy to the operator covered 
by this report.


Sec. 726.211  Name of one employer only shall be given in each report.

    A separate report of the issuance or renewal of a policy and 
endorsement, provided for by Sec. 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.


Sec. 726.212  Notice of cancellation.

    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).


Sec. 726.213  Reports by carriers concerning the payment of benefits.

    Pursuant to 33 U.S.C. 914(c) as incorporated by section 422(a) of 
part C of title IV of the Act and Sec. 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.

Subpart D--Civil Money Penalties


Sec. 726.300  Purpose and scope.

    Any operator which is required to secure the payment of benefits 
under section 423 of the Act and Sec. 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.


Sec. 726.301  Definitions.

    In addition to the definitions provided in part 725 of this 
subchapter and Sec. 726.8, the following definitions apply to this 
subpart:
    (a) Division Director means the Director, Division of Coal Mine 
Workers' Compensation, Office of Workers' Compensation Programs, 
Employment Standards Administration, or such other official authorized 
by the Division Director to perform any of the functions of the 
Division Director under this subpart.
    (b) President, secretary, or treasurer means the officers of a 
corporation as designated pursuant to the laws and regulations of the 
state in which the corporation is incorporated or, if that state does 
not require the designation of such officers, the employees of a 
company who are performing the work usually performed by such officers 
in the state in which the corporation's principal place of business is 
located.
    (c) Principal means any person who has an ownership interest in an 
operator that is not a corporation, and shall include, but is not 
limited to, partners, sole proprietors, and any other person who 
exercises control over the operation of a coal mine.


Sec. 726.302  Determination of penalty.

    (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 Sec. 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 Sec. 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 Sec. 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 Sec. 726.303, 
during which the operator failed to secure its obligations under 
section 423 of the Act and Sec. 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:

------------------------------------------------------------------------
                                                                Penalty
                          Employees                           (per day)
------------------------------------------------------------------------
 Less than 25..............................................         $100
 25-50.....................................................          200
 51-100....................................................          300
 More than 100.............................................          400
------------------------------------------------------------------------

    (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 Sec. 726.4;
    (ii) Was notified of its obligation to comply with section 423 of 
the Act and Sec. 726.4; or
    (iii) Was notified of its potential liability for a claim filed 
under the Black Lung Benefits Act pursuant to Sec. 725.407 of this 
subchapter.
    (4) Commencing with the 11th day after the operator's receipt of 
the

[[Page 80105]]

notification sent by the Director pursuant to Sec. 726.303, the daily 
base penalty amounts set forth in paragraph (c)(2)(i) shall be 
increased by $100.
    (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 Sec. 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 Sec. 726.4 or a reasonable 
belief that it had obtained insurance coverage to comply with section 
423 of the Act and Sec. 726.4. A notice of contest filed in accordance 
with Sec. 726.307 shall not be sufficient to establish a reasonable 
belief that the operator was not required to comply with the Act and 
regulations.


Sec. 726.303  Notification; investigation.

    (a) If the Director determines that an operator has violated the 
provisions of section 423 of the Act and Sec. 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 Sec. 725.351(a) of this subchapter. 
For purposes of Sec. 725.351(c), the Division Director shall be 
considered to sit in the District of Columbia.


Sec. 726.304  Notice of initial assessment.

    (a) After an operator receives notification under Sec. 726.303 and 
fails to secure its obligations for the period defined in 
Sec. 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 Sec. 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 Sec. 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.


Sec. 726.305  Contents of notice.

    The notice required by Sec. 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.


Sec. 726.306  Finality of administrative assessment.

    Except as provided in Sec. 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 Sec. 726.320.


Sec. 726.307  Form of notice of contest and request for hearing.

    (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 
Sec. 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 Sec. 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 Sec. 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 Sec. 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.


Sec. 726.308  Service and computation of time.

    (a) Service of documents under this part shall be made by delivery 
to the person, an officer of a corporation, or

[[Page 80106]]

attorney of record, or by mailing the document to the last known 
address of the person, officer, or attorney. If service is made by 
mail, it shall be considered complete upon mailing. Unless otherwise 
provided in this subpart, service need not be made by certified mail. 
If service is made by delivery, it shall be considered complete upon 
actual receipt by the person, officer, or attorney; upon leaving it at 
the person's, officer's or attorney's office with a clerk or person in 
charge; upon leaving it at a conspicuous place in the office if no one 
is in charge; or by leaving it at the person's or attorney's residence.
    (b) If a complaint has been filed pursuant to Sec. 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, see 
Sec. 725.311 of Part 725 of this subchapter, in which case the time 
period shall include the next business day.


Sec. 726.309  Referral to the Office of Administrative Law Judges.

    (a) Upon receipt of a timely notice of contest filed in accordance 
with Sec. 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 Sec. 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 Sec. 726.313, 
the dismissal shall be without prejudice to further assessment against 
the operator for the period in question.


Sec. 726.310  Appointment of Administrative Law Judge and notification 
of hearing date.

    Upon receipt from the Director of a complaint filed pursuant to 
Sec. 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.


Sec. 726.311  Evidence.

    (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.


Sec. 726.312  Burdens of proof.

    (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 
Sec. 726.4. The filing of a complaint shall be considered prima facie 
evidence that the Director has searched the records maintained by OWCP 
and has determined that the operator was not authorized to self-insure 
its liability under the Act for the time period in question, and that 
no insurance carrier reported coverage of the operator for the time 
period in question.
    (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 Sec. 726.307(b)(3).
    (c) The Director shall bear the burden of proving the size of the 
operator as required by Sec. 726.302, except that if the Director has 
requested the operator to supply information with respect to its size 
under Sec. 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 Sec. 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 
Sec. 726.302(d).


Sec. 726.313  Decision and order of Administrative Law Judge.

    (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 
Sec. 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 Sec. 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,

[[Page 80107]]

reverse, or modify, in whole or in part, the determination of the 
Director.
    (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 
Sec. 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 
Sec. 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.


Sec. 726.314  Review by the Secretary.

    (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.


Sec. 726.315  Contents.

    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.


Sec. 726.316  Filing and service.

    (a) Filing. All documents submitted to the Secretary shall be filed 
with the Secretary of Labor, U.S. Department of Labor, 200 Constitution 
Ave., N.W., Washington, DC 20210.
    (b) Number of copies. An original and four copies of all documents 
shall be filed.
    (c) Computation of time for delivery by mail. Documents are not 
deemed filed with the Secretary until actually received by the 
Secretary either on or before the due date. No additional time shall be 
added where service of a document requiring action within a prescribed 
time was made by mail.
    (d) Manner and proof of service. A copy of each document filed with 
the Secretary shall be served upon all other parties involved in the 
proceeding. Service under this section shall be by personal delivery or 
by mail. Service by mail is deemed effected at the time of mailing to 
the last known address.


Sec. 726.317  Discretionary review.

    (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.


Sec. 726.318  Final decision of 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 de novo. Upon review 
of the decision, the Secretary may affirm, reverse, modify, or vacate 
the decision, and may remand the case to the Office of Administrative 
Law Judges for further proceedings. The Secretary's final decision 
shall be served upon all parties and the Chief Administrative Law 
Judge, in person or by mail to the last known address.


Sec. 726.319  Retention of official record.

    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.


Sec. 726.320  Collection and recovery of penalty.

    (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.

PART 727--[REMOVED]


    6. Under the authority of sections 422 and 426 of the Black Lung 
Benefits Act, 30 U.S.C. 932, 936, part 727 is removed.

[FR Doc. 00-31166 Filed 12-19-00; 8:45 am]
BILLING CODE 4510-48-P