U.S. DEPARTMENT OF LABOR
MINE SAFETY AND HEALTH ADMINISTRATION

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PUBLIC HEARING
PROPOSED RULE - CRITERIA AND PROCEDURES FOR
PROPOSED ASSESSMENT OF CIVIL PENALTIES

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HELD OCTOBER 6, 2006
At The Hilton St. Louis Airport
10330 Natural Bridge Road
St. Louis, Missouri 63134

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9:00 a.m.

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BEFORE:

		PATRICIA W. SILVEY, Moderator

PARTICIPANTS:

	Agency Panelists:

	PATRICIA W. SILVEY, Director
	Office of Standards, Regulations
	and Variances, MSHA

	JAY MATTOS, Acting Director,
	Assessments

	PETER MONTALI
	Office of Metal and Nonmetal 
	Mine Safety and Health

	KEITH WATSON
	Office of Assessments

PARTICIPANTS (continued):

	ROBERT STONE
	Economic Analysis Division

	WILLIAM CROCCO
	Office of Coal Mine Safety and Health

	JACK POWASNIK
	Office of the Solicitor

	GERRY GUNN
	Regulatory Development Division

	I N D E X

PRESENTERS	PAGE NO

John Henriksen..................................   20
Illinois Association of Aggregate Producers

John Cramer.....................................   46
Casper Stolle Quarrying & Contracting Co

Paul Kraus......................................   62
American Coal Company

John View.......................................   74
Journagan Construction and Aggregates

Bob Pond........................................   88
Frontier-Kemper Constructors

Jerry Neels.....................................   94
Delta Companies, Inc.

John Griesemer..................................  103
Springfield Underground, Inc.

Ed Elliott......................................  112
Rogers Group, Inc.

	P-R-O-C-E-E-D-I-N-G-S
	(9:00 a.m.)
		MS. SILVEY:   Good morning.  My name is Patricia W. Silvey, and I am the Acting Director of the Mine Safety and Health Administrations Office of Standards, Regulations and Variances.  I will be the moderator of this public hearing today on MSHA's proposed rule concerning civil penalties.  
		The members of the panel are, to my right, Jay Mattos, who is the Acting Director of MSHA's Office of Assessments and the chair of the Civil Penalty Rulemaking Committee.  To his right is Peter Montali, and he's with MSHA's Office of Metal and Nonmetal Mine Safety and Health.  To his right is William Crocco, who's with MSHA's Office of Coal Mine Safety and Health.  To my left is Jack Powasnik with the Department of Labor's Office of the Solicitor, and he is the attorney on the project.  To his left is Robert Stone, who is MSHA's Chief Economist, and his staff provides economic assistance on the project.  To his left is Gerry Gunn, and she's in my office as the Regulatory Specialist on the project.  
		This is the fourth of six hearings on this proposed rule. As many of you know, the first hearing was held in Arlington, the second in Birmingham, the third was earlier this week in Salt Lake City, today's, and the fifth will be October 17th in Charleston, West Virginia, and the final hearing will be October 19th in Pittsburgh.
		The comment period for this proposal will close on October 23rd.  I want to underscore that in accordance with the MINER Act, we must issue regulations related to the penalty provisions of the MINER Act by December, 2006.  We will accept documents today that you would like to submit for the record.
		This hearing will be conducted in an informal manner.  Formal rules of evidence will not apply.  Members of the panel may question witnesses; witnesses may ask questions of the panel.
		Scheduled speakers will make their presentations first, and after that, others will be allowed to speak.  It doesn't appear that we're going to have any time issues.  After that, others will be allowed to speak.  The transcript of this hearing will be posted on the MSHA website within a week.
		Before I discuss the provisions of the rule, I want to give you a very basic overview of the civil penalty process, beginning with the clarification of four terms that are used throughout this rulemaking.
		The first term is "citation".  The inspector issues a citation for a violation of any MSHA standard, rule, order, safeguard or regulation.  The inspector sets a time to abate the condition.
		The second term is "order".  The inspector issues an order under several different circumstances.
		(1) When a violation is not abated within the time allowed by the inspector, including all extensions.
		(2) When the inspector finds a violation caused by an unwarrantable failure by a mine operator.
		(3) When the inspector determines that an imminent danger exists.  An order requires withdrawal of affecter miners until the violation is abated.  When an inspector issues an order, the order does not require that the entire mine be shut down.  It only applies to the area affected.
		Third, "significant and substantial," or "S&S Violation".  An S&S violation is one that is reasonably likely to result in a reasonably serious injury or illness.  The inspector makes the S&S determination at the time of the issuance of the citation.
		Finally, "unwarrantable failure".  This term has been defined by case law to be, 
"aggravated conduct, constituting more than ordinary negligence by a mine operator."
		Under the Mine Act, MSHA proposes penalties, and the Federal Mine Safety and Health Review Commission -- or the Commission -- assesses penalties.  A proposed penalty that is not paid or contested within thirty days of receipt becomes a final order of the Commission by operation of law and is not subject to review by any court or agency.
		Penalties that are contested before the Commission are reviewed de novo.  We will use the term "assessment" to refer to MSHA's proposed assessments, as well as assessments that are final orders of the
		Commission.  The Mine Act requires MSHA and the Commission to consider six criteria in assessing civil penalties.  The first is the appropriateness of the penalty to the size of the business, the operator's history of previous violations, whether the operator was negligent, the gravity of the violation, and the operator's good faith in abating the violative condition and, finally, the effect of the penalty on the operator's ability to continue in business.
		The first five criteria are used to compute the penalty amount.  The final criterion is used if the operator makes a request to MSHA, and in the request, asserts that the amount of the penalty negatively affect the operator's ability to continue in business.  And in that situation, the operator has to send in supporting documentation, and MSHA may adjust the penalty.  MSHA published the proposed rule in the Federal Register on September 8th.  A copy of the proposal was placed on MSHA's website and a copy was sent to the Office of Advocacy at the Small Business Administration.  Basically, the proposed rule does two things.  First, it revises MSHA's civil penalty program to increase penalty amounts and to improve the effectiveness of MSHA's civil penalty process.
		These changes are intended to induce greater mine operator compliance with the Mine Act and MSHA's safety and health standards and regulations, thereby improving safety and health for miners.
		As I mentioned earlier, the proposal implements three provisions of the Mine Improvement and New Emergency Response Act of 2006, also known as the MINER Act.
		The proposal does not change, and I want to underscore, does not change the way inspectors issue citations.  Under the proposal, the inspectors will make factual determinations with respect to safety and health violations and will issue citations and orders just as they do now.
		Also, please note that while both the Mine Act and the MINER Act contain provisions for criminal fines, this rule, as the name states, only concerns civil penalties.
		Under the existing rule, MSHA has three types of assessments:   the single penalty, the regular and special.  I will now address the proposed changes to each type of assessment.
		I'm going to begin with single penalty, and as I do so, I want to clarify, for the record, what we have done in the proposal with respect to the single penalty.  The existing rule provides for a sixty-dollar single penalty for non-S&S violations that are timely abated and where the operator does not have an excessive history of violations.  The agency proposes to delete the single penalty provision, but in doing so, the agency will replace the single penalty with the regular formula.  And by that, I mean that the single penalty, non-S&S violations, all that will now be processed through the  regular formula system.
		So, by using the term "delete," it doesn't mean that we're just getting rid of all non-S&S violations and doing nothing with them.  They will now be in accordance with the proposal.  They will be processed through the regular formula system.
		In taking this action, the agency believes that eliminating the single penalty and processing those non-S&S violations through the formula system will cause mine operators to focus their attention on preventing all hazardous conditions.
		Regular assessments are derived by assigning penalty points for the statutory criteria, at least the first finding of the statutory criteria, and then converting the total points to a dollar amount.  The penalty point tables are published in Section 100.3 of the rule.
		Regular assessments are computer-generated through MSHA's Management Information System.  The proposed rule would make a number of changes to the process and to the tables used for determining penalty amounts.  The point would be revised so that the penalties increase proportionately to increases in operator size, history, and negligence and the gravity or seriousness of the violation.
		Regular assessment changes are as follows;
		Size:   The size criterion includes the operator size and controller size.  For coal mines, operator size is measured by tonnage of coal produced by that mine during the previous calendar year.
		For metal and nonmetal mines, operator size is measured by the hours worked at that mine during the previous calendar year.
		Size for independent contractors is measured by the total hours worked at all mines during the previous calendar year.
		Under the proposal, the maximum number of points for operator size would increase from ten to twenty.  The proposal would continue to assign no points for the smallest operators - coal mines that produce up to 15,000 tons of coal, metal and nonmetal mines with 10,000 or less hours worked, and independent contractors who have worked up to 10,000 hours at all mines.
		Please note that the preamble to the proposed rule states that according to 2005 data, nearly half of the existing coal mines had annual tonnage of up to 15,000 tons.  This figure included 463 surface facilities that do not produce coal.  So, to exclude those facilities would provide a more accurate number, and by doing that, approximately one-fourth of producing coal mines had annual tonnage of up to 15,000 tons.
		So, that's a correction from what was in the preamble on size.  The proposal makes no changes to size points for controlling entities.  In the proposal, MSHA solicited comments on whether, in considering the size of the operator, greater weight should be placed on the size of the controlling entity.  
		So, I invite you to address that issue either in your comments here today or in comments that you might send to us.  
		History of violations:   The proposal includes several changes to the history criterion.  We will shorten the time period for determining violation history, changing the independent contractor history from an annualized number to the total number of violations, adding a new component for repeated violations of the same standard and increasing the maximum number of history point.  
		Under both the existing rule and the proposal, only violations for which the penalty has been paid or finally adjudicated are included in determining an operator's history.  
		Under the proposal, the time period for  determining history would be shortened from twenty-four months to fifteen months.  The agency took that action because we felt like that shorter time period would provide a more accurate picture of the operator's current state of compliance. 
		Both the existing rule and the proposed rule base history for production operators on violations per inspection day.  Under the existing regulation, history for independent contractors is based on the average number of violations over the past two calendar years. 
		The proposed rule would change this and use the total number of violations during the previous fifteen months.  
		Since history would no longer be based on twenty-four months, the agency felt like there was no need to annualize the number of violations.  MSHA believes that this change would have a de minimis effect on the average assessment issued to independent contractors. 
		In the proposal, MSHA solicited comments on this approach to determining violation history for independent contractors, i.e., whether an annualized average should continue to be used. 
		Again, I invite you to address this issue either here today or in your written comments.  The maximum number of penalty points for this component of violation history would be increased from twenty to twenty-five. 
		The proposal adds a new component to the history criterion for repeat violations of the same standard.  Under the proposal, penalty points are added for more than five repeat violations of the same standard during the preceding fifteen months.  
		Under the proposal, repeat violations are determined according to the manner in which the standard is cited, and in the proposal, we said that it would be determined by paragraphs, the citing of paragraph numbers.  
		For example, a violation of Section 56.14101(a)(1) would not be considered in determining  the number of previous violations of Section 56.14101(a)(2).  
		MSHA solicits comments on this approach to determining repeated violations.  Penalty points are assigned for the total number of repeated violations during the fifteen-month period. 
		In the proposal, MSHA solicited comments on two additional aspects of repeat violations:   
		(1) Whether penalty points should be based on the total number of repeat violations (as in the proposal) or on the number of repeat violations per inspection day; and, 
		(2) Whether repeat violations should include all violations (as in the proposal) or only S&S violations.  
		The agency invites you to address these aspects of repeat violations. 
		The new component of violation history would add up to twenty penalty points. 
		The next criterion is negligence.  The proposed rule would retain the existing five levels of negligence, and would double the maximum number of penalty points that could be assigned for negligence - from twenty-five to fifty - with the increase placed entirely in the three highest levels.  Under the proposal, penalties would increase proportionally for operators who exhibit increasingly higher levels of negligence. 
		Gravity:   The proposed rule would retain the three components of gravity - likelihood, severity and the number of persons potentially affected - but would increase the maximum number of penalty points that could be assigned for each component.The maximum total gravity points would increase from thirty to eighty-eight.  
		Good faith in abating the violation:   The existing rule adds ten penalty points if the operator does not abate the violation within the time specified by the inspector, and reduces the total penalty amount by thirty percent if the violation is timely abated.  		The proposed rule would decrease the reduction for timely abatement to ten percent.  Under the proposed rule, no penalty points would be added for violations that were not timely abated. 
		Penalty point conversion table:   The dollar amounts on the existing conversion table range from $72 to the statutory maximum of $60,000.  The statutory maximum corresponds to 100 penalty points, which is the sum of the maximum points for five of the six criteria.  The minimum regular assessment is $60.  The proposed rule provides a maximum of 208 penalty points.  The revised conversion table begins with $112.  Under the proposal, with the 10% reduction for timely abatement, the lowest penalty amount would be $100.00.  The dollar amount of the penalty increased steadily as the number of penalty points increases.  Beginning at 133 points, each additional penalty point corresponds to an increase of approximately $3,070.  The maximum penalty of $60,000 is reached at 140 points.  Thus, although all penalties are increased, violations with the highest number of penalty points, which would generally be those that involve higher negligence and gravity, or greater violation history, will increase at a greater rate.  
		Special assessments are processed where the violation is of such a nature that an appropriate penalty cannot be determined using the regular formula.  The existing rule lists certain categories of violations, such as fatalities, serious injuries, and unwarrantable failure, that must be reviewed to determine if a special assessment is appropriate. 
		The proposed rule would remove this list.  However, under the proposal, MSHA would retain its discretion to determine which types of violations would be reviewed for special assessment without being limited to a specific list.  
		MSHA anticipates that the proposed regular assessment provision will provide an appropriate penalty for most types of violations.  This change will permit MSHA to focus its enforcement resources on more field enforcement activities rather than on administrative review activities. 
		The proposal would shorten the time allowed to request a Health and Safety conference with the district manger from ten days to five days.  We've gotten a lot of comments and testimony on that aspect of the proposal.  
		Including that in the proposal, we believe that it would result in a more effective civil penalty system, because penalties would be assessed closer in time to the issuance of the citation. 
		Finally, as I stated earlier, the proposed rule implements civil penalty provisions of the MINER Act.  These provisions were effective on June 16, 2006.  And by that, I mean MSHA issued a procedure instruction letter to MSHA personnel containing information on procedures for processing violations consistent with the MINER Act, and we are processing those violations right now.
		Unwarrantable failure citations and orders:   The MINER Act establishes minimum penalties of $2,000 and $4,000, respectively, for unwarrantable failure citations and orders.  The proposed rule includes these two provisions. Basically, as unwarrantable violations are issued today, they are being processed and would receive the minimum penalty amounts, consistent with the MINER Act, either through the regular assessment process or through special assessment.  
		Penalties for "flagrant violations:"   The MINER Act established a new penalty of not more than $22,000 for flagrant violations, that is, and those violations, as defined in the MINER Act, are violations involving 
"A reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury."
As stated earlier, these violations are processed as special assessments and are included in the proposed rule to be processed under the special assessment provision. 
		Failure to notify:  The MINER Act establishes a penalty of not less than $5,000 and not more than $60,000 for failure to timely notify MSHA of a death or an injury or entrapment with a reasonable potential to cause death. As stated earlier, these violations are processed as special assessments. 
		For those of you who haven't done so, please sign the attendance sheet in the back of the room before. We will post the transcript of all the public hearings on our website. Each transcript will be posted there approximately one week after the hearing. It will include the full text of my opening statement and the specific issues for which the Agency seeks additional comments. 
		We will now begin today's hearing. Please begin your presentation by clearly stating your name and organization for the reporter. 
		Our first speaker is John Henriksen with Illinois Association of Aggregate Producers. 
	ORAL TESTIMONY 
		MR. HENRIKSEN:   Good morning. My name is John Henriksen. I serve as the Executive Director of the Illinois Association of Aggregate Producers, the trade association representing companies that produce crushed stone, sand and gravel. 
		Prior to serving in this association, I worked for four years as a trial attorney for the State of Kentucky's coal mine reclamation program and eleven years as legal counsel for the Illinois Department of Mines and Minerals. 
		I say that not because people love lawyers, but I say that to make this hearing panel understand that my comments are not just a function of my advocacy for the people I serve, but also flow from my experience as an attorney working for government, enforcing regulations against the mining industry. I have seen both sides of this issue. I've sat where you sat. I put together regulatory programs. So, my comments are offered with that in mind and with that background. 
		In Illinois, Aggregate Producers are a very numerous and diverse industry. The IAAP's 107 producing members range in size from "mom and pop" operations that manufacture less than one hundred thousand tons of these products each year to companies that produce well over twenty million tons annually. 
		My favorite member is Eagle Quarries.  That's Lyle and Sandy Bushman. Lyle crushes and Sandy loads, that's my smallest member. Of course, I also represent Vulcan Materials Company and so on. 
		The point is that we are a diverse industry, and these regulations which appeared, in our mind, to be a one-size-fits-all, causes us some concerns. 
		We operate nearly four hundred surface and underground mines and are located in eighty out of one  hundred and two Illinois counties.  In 2005, these companies produced about one hundred and twenty-one million metric tons of crushed  stone, sand and gravel.  When the value of these construction aggregates are combined with the value of cement  manufactured using crushed stone and the value of silica sand produced, you have close to a billion-dollar-a-year industry.  On behalf of all of our members, I want to thank MSHA for providing this forum to receive comments on the proposed rule "Criteria and Procedures for Proposed Assessment of Civil Penalties".  Like MSHA, the IAAP is committed to safe mines and a health workforce. Safety is, and will  continue to be, the number-one priority for our industry. Our Association is proud of our industry's safety record. We have not had an aggregate mine  fatality in Illinois since 3/24/2003. And, for the record, we haven't had a coal mine fatality in Illinois since April 15, 2003.  I think we're one of the few major aggregate coal producing states in this nation that had that outstanding safety record.  The Illinois aggregate industry understands that its employees are its most valuable asset. Given this core value, please be advised that our good safety  record is not an accident. Our safety record is grounded upon our proactive efforts in three areas.  First, this record is grounded on our  industry's strong commitment to safety training. Our industry partnered with MSHA to implement Part 46 rules and every subsequent federal regulatory initiative, from noise monitoring, to HazCom training, to working on the Guarding Task Force, and we were there.  
		Second, our record is grounded on our creation and support of a comprehensive association safety awards program. There are four levels, bronze,  silver, gold and what we call our rock-solid level, our highest level.  For the calendar year of 2005, sixty-two  mines or associate member companies were awarded the IAAP's Rock Solid Excellence in Safety award, which means they have outstanding safety programs, no  reportable accidents and no S&S citations.  As you can see from the signs next to me on the wall in the hearing room, many of these awards or  many of these companies are designated in bold print, and those are multi-year awards. One of our members have gone three years with no reportables, no S&S, an  outstanding safety program.  Finally, our record in our state is grounded on our ongoing professional relationship with  employees and officials from MSHA and our State grants program. MSHA and State grants people serve on the IAAP Safety Committee. 
		In fact, yesterday, -- Wednesday when I was     going over my thoughts about our oral testimony today with our IAAP Safety Committee, I had an MSHA official in the room.  We were sharing every concern we had about these regulations with this guy.  We were holding nothing back, because we've come to look at MSHA as our partner in safety in the State of Illinois.  They're on our Safety Committee to help conduct our safety seminars.  They operate booths at our annual convention in order to distribute safety materials and answer questions. They help to implement our safety awards program and they actually present these awards during our annual meeting.  On May 18, 2006, Steve Richetta, Manager of MSHA's North Central District and Kevin LeGrand, MSHA's Peru Field Office Supervisor, presented awards to one hundred and fifteen operations owned by thirty IAAP member companies. 
		I do want to mention that makes a real difference to our safety people and our mine superintendents when they have Steve Richetta and Kevin  LeGrand presenting the award and shaking their hand.  It makes a difference.  The mining industry, in general, and MSHA,  in particular, have both taken a beating in the press since the Sago Mine Disaster, a beating that we think is  unwarranted.  We are proud of our industry. We are proud of our accomplishments, and we are very proud of our collaborative relationship with your agency. For that reason, we are deeply concerned that MSHA has proposed a sweeping rewrite of its civil penalty rules without providing ample time for review and comment. 
		We are equally concerned that MSHA has proposed these rules without first engaging in the collaborative rulemaking process that was so successful in the development of MSHA's Part 46.  Now, I understand full well that the Mine Improvement and the New Emergency Response or MINER Act requires MSHA to implement four distinct civil penalty changes by December of 2006.  I understand that. It's the law.  
		We have a concern about one of these changes, which I'll get to in a minute.  However, MSHA's proposed rule goes  significantly beyond what the MINER Act and Congress mandates. This proposed rule also contains a sweeping and complex rewrite of MSHA's penalty process, yet gives insufficient time for industry to prepare its response.  The first of six hearings began on November -- excuse me -- September 26, 2006 with only three speakers present. We believe that the lack of participation at this hearing was not due to lack of  interest, but to the abbreviated amount of time provided to prepare.  I was talking to one of my members, to our  safety guy yesterday, and he was under the impression that this was a done deal and that you all have already decided to put these new penalties in place and that there's nothing they could do but be able to pay double fines.  I said, no, and these penalties, we're at the beginning of this process. That's the perception, and I think that's driven down the participation so far.  Now, with that background, the IAAP's comments can be summarized as follows, -- two areas.
		First, regarding the four penalty changes mandated by the MINER Act, we submit that the proposed regulation implementing a five-thousand-dollar minimum penalty for failing to notify MSHA in fifteen minutes about a fatality, serious injury or entrapment should be amended, not the statute, but the regulation that implements the statute. I'll go over that in a bit.  Second, we contend that the remainder of the rulemaking not mandated by the MINER Act be withdrawn.  We respectfully submit that MSHA sit down with all of the stakeholders in order to determine if the criteria and procedures for the proposed assessment of civil penalties should be amended and then work to come up with a system that is both fair and effective.  In the event that you elect not to withdraw such rules, we've identified some areas that we believe should be addressed if you do go forward.
		Turning first to the changes mandated by the MINER Act, I want to focus on the fifteen-minute  notification requirement set forth in Section 100.5(f) that reads, as follows:
"(f) The penalty for failure to provide  timely notification to the Secretary under Section 103(j) of the Mine Act will be not less than five thousand dollars and not more than sixty thousand for  the following accidents:   (1) The death of an individual atthe mine, or (2) An injury or entrapment of an individual at the mine which has a reasonable potential to cause death."
Although the penalty range and time requirement in Section 100.5(f) is mandated by the MINER Act, we believe that the additional regulatory language can be inserted in order to carry out the intent of Congress without sacrificing the safety of our workforce, and let me explain.  Many of our operations do not have a lot of people on site.  Again, I refer back to Lyle and Sandy Bushman. There's two of them and a part-time farm kid that comes on, who comes on and drives a loader when they need him.  The mine manager or foreman charged with  calling MSHA may also be needed to administer first aid to the victim in order to stabilize his or her condition. 
		That same mine manager or foreman may also be needed to contact emergency vehicles and then guide the vehicles to the injured person for evacuation. 
		It makes no sense for our people to spend precious time calling MSHA instead of trying to save the life of an injured person. 
		For that reason, let me propose a new Section 100.5(g) that tracks Congressional intent without putting the health and safety of our workforce at risk.
"(g)Timely notification to the Secretary under Section 103(j) of the Mine Act will be determined as follows:   (1) Fifteen minutes from the time that the death of an individual at the mine hasbeen confirmed; (2) Fifteen minutes from the time that an entrapment of an individual at the mine which has a reasonable potential to cause death has been confirmed or; (3) Fifteen minutes from the time that an individual with an injury at the mine which has a reasonable potential to cause death has been located, received first aid, stabilized and evacuated from the mine property."
By adding this language, you ensure that  our employees do the right thing in the case of an injury which has a reasonable potential to cause someone's death. We want our employees to do everything  humanly possible to save an injured person's life and then call MSHA.We understand, and I understand in  particular, the need to put teeth into the notification requirement. It is important that MSHA be notified quickly in the event of a death, entrapment or serious injury. We also understand that in the past, people have abused that and not done what they're supposed to do. 
		However, we submit that Section 100.5(f), as written, will hamper decision-making during an  emergency. By adding the language suggested, we can ensure that our workforce will concentrate on life saving when seconds matter and will then quickly contact MSHA after the crisis is passed.  Turning to our second major area of comment, we respectfully request that the remainder of the rulemaking not mandated by the MINER Act be  withdrawn so that MSHA can sit down with all the stakeholders in order to determine if the criteria and procedures for the proposed assessment of civil  penalties should be amended.  The basis for this request is, as follows: We submit that MSHA has not taken the time  necessary to perform the cost/benefit analysis mandated by Federal law before promulgating these rules. The IAAP has conducted an initial review of the statistics and tables provided within the proposed rule. Based on this review, we are unable to find information adequate to confirm MSHA's critical assumptions on the proposed rule.  The proposal does not quantify the improvement in safety and health it purports to promote,  devoting a mere paragraph to benefits in the preamble.  For example, unlike the MSHA rules that get specific about the number of injuries or diseases prevented, this proposal never goes that far. It presents the estimated cost impact, but never quantifies the benefits.  In the Preliminary Regulatory Economic Analysis for these rules, which I pulled that off of your website, at Page 12, MSHA says as much:
"The likely reduction in violations and the benefits resulting from increased compliance has not been scientifically established."
Accordingly, MSHA has not provided a quantitative estimate of the reduction in injuries and fatalities due to the proposed rule.  We respectfully submit that effectively ignoring the benefit component of the cost-benefit equation would seem to violate regulatory requirements overseen by the Office of Management and Budget and, as such, should be called to OMB's attention. That OMB had reviewed the draft proposal before it was released will serve as no deterrent to seeking this review at a later date.  We also believe that the cost of this proposal has been understated. For example, missing  from MSHA's analysis are huge potential costs associated with increased litigation, which is virtually certain to occur not only because penalties are being raised so substantially, but also because the Agency is actually cutting in half the time allowed for operators to request a meeting to negotiate a settlement.  MSHA's "Assessments Q & A" published on its website states that six percent of its proposed assessments last year were litigated. This figure could easily double if the new penalty scheme became a reality.  
		Third, the Agency has also totally ignored the impact this proposal will have on the budgets of safety professionals. How much of the corporate safety budget will have to go toward paying for penalties and litigation; thus, shrinking the amount of money left for accident prevention, compliance assistance, safety training resources and equipment? 
		We know lawyers have to eat, too, but we'd rather spend our Association member's money on safety training equipment and things that prevent injuries and  deaths.  
		In short, the current proposal lacks the economic data required to authorize such sweeping changes. For that reason alone, we believe, respectfully, that it should be withdrawn. 
		Here's another issue, Unfair Impact.  Many of the proposed changes would penalize the vast majority of the mining industry, for the actions of a few. There is no established data to suggest that increased penalties will drive improved safety performance within the overall mining industry.  The majority of the provided data is divided between coal and the metal and nonmetal industries. The stone, sand and gravel industry accounts for approximately ninety-two percent of the metal and nonmetal industry. However, the stone, sand and gravel industry only accounts for thirty-eight percent of this sector's revenues. 
		The proposed penalty increases will have a significant impact upon the stone, sand and gravel industry's business based on the fact that there is a larger volume of plants across the country that are subject to mandatory inspections. Given that the stone, sand and gravel industry does not generate the majority of the revenues that MSHA used to justify the overall metals and nonmetal penalty increases, these rules will have a disproportionate impact on our sector.
		Unintended Consequences. Our industry is concerned that increasing civil penalties will promote litigation rather than promote safety; thereby, moving us away from our current cooperative relationship with MSHA.  Money used to pay resulting penalties may divert resources that could otherwise be used to enhance overall safety and health for the miners.  MSHA provided no hard data to support their stated position of driving safety improvement by increasing penalties significantly for violations. IAAP requests that MSHA provide the public with the sources of data that was used to conduct their varying analyses.  Another unintended consequence that we believe that's even more serious than more money is changing our relationship. We have come so far in the ten years since I've been on board with my agency -- my association.  When I started in '96, we were at war with them constantly. In the seminars that I put on were seminars focusing on how to lawyer up and how to defend yourself in assessments.  That changed with the Part 46 collaborative rulemaking process, and since then, the rules for us have been so much better, and it's been better for MSHA, too. We've worked together on things and we've made a lot of progress.  That's one of the unintended consequences of this thing. They were hard, I think, on our part, and maybe on the part of MSHA, too, on the enforcement side. We don't want to go there. 
		The next area is Faulty Underlying Assumptions.  MSHA's revamped penalty proposal is  ultimately grounded on a number of false assumptions set forth in this rulemaking: First, MSHA states at Page 53056, top of  the middle column, that the number of violations of MSHA's standards and regulations has been on the rise since 2003. Based on this increase in violations, MSHA is proposing a new civil penalty process that will result in higher penalties.  The underlying assumption, as stated at the bottom of this column, is that 
"the proposed changes are intended to induce greater mine operator compliance with the Mine Act and MSHA's safety and health standards, thereby improving safety and health for miners."
However, MSHA's own statistical data clearly shows that the total case incident rate for the aggregates industry declined in the period 2003-2005.  Those charts to my right in the hearing room, charts which I will also make available to the court reporter for the transcript, show that during the period of time where violations went up in 2003-2005, during that same period of time, the case incident rate has been declining.In fact, our mines have become safe during this time period; thereby, negating the need for additional civil penalties.  In fact, as you can see from these charts and display, data supplied by MSHA indicates that the total case incident rate for the aggregates industry has steadily declined since 1989, and the case incident rate, those are injuries, level 1 through 6. These are MSHA's own statistics.  MSHA lacks the empirical data to support the need for additional penalties given that this agencys own data shows that the current violation and penalty system is working fine to reduce injuries at our mines. 
		Second, MSHA states at Page 53066, middle column, end of the first paragraph, the assumption that "mine operators and independent contractors will change their compliance behavior in response to increased penalties."
In reality, most operators and independent  contractors have already changed their compliance behavior in response to MSHA's enforcement approach and continually increasing worker's comp premiums. That's  the driver in our way.  It's more correct to assume that most operators and independent contractors are at a plateau that will be hard to improve on based on the inconsistencies of inspectors and of the inconsistencies of the interpretation of these standards. 
		Third, MSHA states at Page 53069, Section C - Benefits that:   
"The reduction in the number of violations, particularly S&S violations will reduce the number and severity of injuries and illnesses."
The problem with this assumption is that safety professionals generally agree that the biggest share of MSHA violations are for allegedly unsafe conditions while the biggest share of accidents are caused by unsafe behaviors. 
		MSHA has done nothing to address unsafe behaviors by the miner him or herself. By MSHA's own statistics, only twenty-three percent of violations  written in metal and nonmetal sector are S&S.  Therefore, seventy-seven percent of the violations written are not reasonably likely to result in a reasonably serious injury or illness.  
		In summary, the lack of required economic data, the unfair impact on our industry, the unintended  consequences flowing from these rules and the underlying faulty assumptions for this new penalty system support sour respectful request that the remainder of the  rulemaking not mandated by the MINER Act be withdrawn to allow MSHA to sit down with all of the stakeholders, the coal industry, the aggregates, the metal industry, the labor unions, everybody, all the stakeholders in order to determine if the criteria and procedures for the  proposed assessment of civil penalties actually need to be amended.  However, in the event that MSHA elects to proceed with this rulemaking package, let me highlight a few concerns we have about the pending proposal, with the understanding that my words today are not  exhaustive, that our committee is proposing a much more extensive set of written comments on every facet of this proposal. 
		First, the big one for us, Retain Single Penalty Assessment Criteria.  IAAP urges MSHA to retain the Single Penalty Assessment for non-serious violations.  Operators must eliminate all hazards and legitimate violations, but the enforcement of regulations by agency personnel is not equal and consistent.  Removing the Single Penalty Assessment may result in higher penalties for citations erroneously issued, more contested citations, and the diversion of resources away from improving safety and health in the mine.  Removing the single penalty has the potential to create a more adversarial relationship between MSHA and operators without making mines safer and healthier for miners.  It is important to recognize that such citations often occur for highly subjective conditions  where one inspector may find a situation in full conformity with MSHA requirements, while another issues a citation because he or she speculates that a minor  hazard might exist if the condition continued to exist in the future.  Often, these involve housekeeping, like,  small amounts of material on a walkway that is rarely accessed, dirty toilets, uncovered trash cans, minor holes in guards where no one has access to the area, and equipment defects where the equipment has not been inspected prior to being used for the day and is not in service. 
		Other categories of non-S&S citations include paperwork, late filing of a 7000-2 quarterly hours report, failure to note an inspection date on a fully-charged fire extinguisher, faded labels or other technical violations of MSHA's HazCom standard. Often these are rated as "not likely of injury" and "low" or "no" negligence.  Despite the low fines often associated with the Single Penalty Assessment, MSHA's own data tends to prove that this class of violations has helped to improve safety and health at our mines.  The Single Penalty Assessments have increased in 2003, 2004 and 2005, and your incident rate has gone down in those three years. That seems to be working rather well. There doesn't seem to be any kind of real justification for scrapping what seems to be working and creating a new system that will really have the effect of just doubling the amount of revenue that comes in to the government.  MSHA's rationale for deleting the single provision found at Page 53063, first column, third paragraph states:   
"Deleting the single penalty provision will cause mine operators to focus their attention on preventing all hazardous conditions before they occur and promptly correct those violations that do occur".  
Yet, in the preceding paragraph, MSHA flatly states, that the penalty assessment they want to delete is for non-S&S violations, those that are not reasonably likely to result in reasonably serious injury or illness.  In essence, the stated rationale for eliminating the Single Penalty Assessment is contradicted by MSHA's own description of this penalty and the regulation.  Another hot point for us is we ask that you delete the repeat violation criteria. The repeat violation category should not be included in the regular assessment penalty point scheme and should, therefore, be deleted. The repeat violation category appears to be redundant with the history of violations criteria.  Moreover, because many of MSHA's standards are subjectively interpreted, MSHA inspectors can use a single standard to cover a multitude of unrelated conditions, safe access under 30 CFR 56.11001 can relate to everything from a bent ladder step, to a cable across a walkway, to having to step over a barrier to access a screen, to a method of accessing a dredge, to having a method of greasing a conveyor that an inspector does not prefer.  Therefore, simply having a "history" of repeated violations under this particular regulation does not mean that the exact same condition is recurring.  MSHA inspectors can use a single standard to cover a multitude of unrelated conditions; thereby creating an artificial history of repeat violations.  In addition, IAAP members have observed those standards which include training, using equipment tools upon manufacturers intended design, unsafe access, hazard communications, and barricading and posting signs warning against entry have been subjectively interpreted throughout our state. 
		Repeated violations may not be enforced uniformly throughout the system. The standard sometimes covers so many different areas of a property. What exactly would a repeat violation cover? Until MSHA can ensure consistency in its enforcement and unless it switches from performance oriented standards to objective criteria, the repeat citation criteria should be rejected.  Third area, do not reduce the time for conference requests. IAAP recommends that MSHA be consistent with OSHA, where a fifteen-day period to submit additional information or request a safety and health conference is granted. At a minimum, we respectfully request that MSHA retain the current ten-day period. MSHA's proposed change would not provide mine operators with sufficient time to evaluate and determine the appropriate course of action to take following the issuance of citations by MSHA.  The stone, sand and gravel industry is somewhat unique due to the fact that many of our members have remote locations.  It is very possible for a citation not to reach the proper hands in the amount of time to request a safety and health conference.  A line operator could be on vacation during the five-day period or be otherwise unavailable to respond.  In addition, all operations need time to seek the appropriate guidance before moving forward with a safety and health conference or additional time to get the paperwork together, so you have a good presentation.  In any case, if you're going to make a change, you should clarify if you're talking workdays or calendar days, because that makes a difference. 
		MSHA states at Page 53064, first column, second paragraph, 
"That the reduction of conference time to five days would result in a more effective civil penalty system because penalties will be assessed closer in time to the issuance of the citation."
In reality, the reduction of five days would have no bearing whatsoever on this process. It is normally months before an assessment is received now.  If a citation is conferenced, it may take several weeks for the conference, then several more weeks for the result and then months before the assessment, if any, is issued. This is a problem with MSHA's system that can't be corrected by reducing the right to conference by five days. All it would do is hinder an operator's right to conference. All it will do, frankly, is drive operators, when they get a violation, you know, to their lawyers to contest violations. I think it has the opposite effect that MSHA is trying to achieve.  You know, there can't be anything wrong with giving the operators ten days to think about whether they want to contest it, to think about whether they want to get it cancelled, getting the records in order, you know, so that they make a cogent presentationto the conference office.  It will result in, at the end of the day, a better final violation, a better final assessment and will reduce litigation. Which, again, we're not here to feed lawyers. We're here to promote mine safety and health. 
		In conclusion, we respectfully request that MSHA adopt the proposed new Section 100.5(g), that I outlined earlier, in order to ensure that the  fifteen-minute notification rule carries the intent of Congress without sacrificing the safety of our workforce.  What our members are doing now is telling our people to save a life. We'll take the hit. Save a life. We'll take the hit. Do whatever you can. Do whatever you'd normally do to save that injured person's life. Go through the mine's safety plan, and if MSHA wants to cite us for not calling in fifteen minutes while you're saving that person's life, applying CPR, go ahead and we'll take the hit.  I don't think that we should come to that.  I think that the proposal that I've suggested, or something that you all could devise would carry out the intent of Congress to punish people if they don't do what they're supposed to do, and yet, not cloud the judgment of people who are in life-and-death situations with somebody underground, and that's what I'm talking about.  We also request that you withdraw the elements of this rule that are not specifically noted in the MINER Act of 2006 and do as your sister agency OSHA has done in numerous cases and convene an advisory panel to work on developing a Part 100 rule that would go much farther to achieve our goal of zero fatalities.  There are clear precedents for this even within MSHA. MSHA did this with the Part 46 rule for mine safety and training. It worked very well. Again, we were apart of that. It was a tedious process. It was a long process, but at the end of the day, you had a good rule system that everyone bought into and it has been working extremely well.  It is our contention that this collaborative effort has been a major factor in the reduction of the total case injury rate in our industry.  We were able to work together to develop a training rule that was modern and effective with broad support.  In the event that this rulemaking is not withdrawn by MSHA, in the event you elect to go forward with this, rewrite your penalty system, please make the rule changes suggested in our comments and at least consider them.  One final note: It appears to us that the many are being punished for the transgressions of a few.  The companies that run an aggressive and successful program are getting punished for the ones that don't.  MSHA already has the tools for strict enforcement. You already have the power to levy huge fines. You have the power to shut mines down. Use them on the companies that just don't get it. Run the bad actors out.  Do what you have to do, but don't rewind the rules to the point where it basically doubles the civil penalties for everybody that's doing a good job day in and day out.  I want to thank you all for the opportunity to make the concerns of the IAAP known to MSHA during this comment period. A copy of my remarks, I may have written on it, but there's a copy to the court reporter to aid her, along with a copy of these charts that are to my right. I will be happy to answer questions if that will be helpful.
		MS. SILVEY:   Thank you, Mr. Henriksen.  I was wondering, did you have something to say?
		MR. CRAMER:   Yes.
		MR. HENRIKSEN:   We're a package deal.
		MS. SILVEY:   Okay.
		MR. CRAMER:   Good morning.My name is John Cramer, spelled with a (C). I'm President of the Casper Stolle Quarry and Contracting Company.  Casper Stolle came from Germany in 1844, and 1845, we had his first quarry, and the family has been quarrying continuously since that date.  Our present quarry, the oldest one running, was founded in 1882, and we're about five years away from being mined out of that.  Twelve years ago, we acquired our competitor, and we're operating two quarries right now on the other side of the river in Illinois.  We had -- We operated a very safe quarry for many years.  In fact, our insurance company rated us as a cement plant, which had a five-dollar per hundred rate rather than a quarry, which is a ten-dollar per hundred rate.  We carried that up until we acquired the other quarry and became a bigger operation, and we had a negative experience rating the whole time.  So, I will let those numbers speak for themselves.  I have been on the board of the National Stone Association and Illinois Association of Aggregate Producers, been president of one, and chairman of the National Association, and have been quarrying since before MSHA came along.  So, I had the benefit of continual experience with the organization and its predecessor.  		The one fact that is critical in my mind is that when MSHA came along, they were straight punitive.  It was folks out of the coal mines, and I know that the  coal mine attitude between employee and employer are adversarial; whereas, with a family-run quarry operation, I was part of our employees' families, and  they were part of my family, too.  When MSHA would come on, guys would take their hearing protectors, and where they wouldn't go anywhere, if they had dust protectors, they cover them up.  They just did not like the attitude, that adversarial attitude.  
		Another thing that happened that cost them jobs, they didn't like it for that reason.  There were jobs that had to be automated as a result, and that's fine.  As time went on with Mr. Lewinski, things changed.  We cooperated, and the attitude of the people has been reversed a hundred percent.  I know you didn't want to hear the bad part, but the good part is that things are working, and what we're doing now is working.  Our people are coming to us if they see something, or if something happens to them, they say, oh, I slipped on this; let's go check and see where we can improve it.  They're coming to us with safety improvements, and we're providing them everything that they need to have a safe workplace.  I had, unfortunately, the experience that required me to make a fifteen-minute rule telephone call.  We had, just this year, Monday morning, first load in the morning for a truck driver that backed over the high-wall.  
		I heard it on the radio, and I ran.  The first thing was, should I go down and see what's going on? No, I got to make a telephone call, and I did.  I made that.  It was a five-minute telephone call.  I was asked some questions that I needed to get answers for.  I went over and got them, came back, and I was really answering MSHA's questions, rather than providing -- We had a safety plan and it was working,  but I was providing information to MSHA, and if things had been different, I should have been in other places.  And, so, I personally -- I'm sitting in that chair waiting for somebody to call me to tell me something, what's going on at MSHA, but I should have been out there.  I should have been directing traffic, making sure that the first responders were taken care of.  As it turned out, the guy climbed out of the cab and wanted to walk down the hill.  He backed over a pile of dirt, and he fell down and was cushioned.  In fact, the truck was only damaged in the cab, very little damage to it, nothing happened and the guy is back at work.  He didn't want to backup the high-wall anymore, but I don't blame him for that.  The rules and regulations are sponsored by coal mine accidents.  I've got two children, and I feel like we're MSHA's children, the mines, the coal and mining metal and nonmetal.  I know if one of those kids came in at night past curfew, I didn't punish both kids, and I feel  that the rules and regulations that are coming along are punitive, and I'm afraid that the response that the  industry is going to have is the response that my employees first had when MSHA first started.  I would ask that you amend that fifteen-minute rule and withdraw the proposed rules not mandated by the MINER Act, and let us sit down and really make some meaningful changes that are going to benefit our work.  Thank you.  
		MS. SILVEY:   Thank you.  I'm sure some members of our panel have some comments.  I have some comments.  First of all, some of the comments I make will probably be sometimes for the witness, and sometimes they will be applicable to everybody in the room.  I'm sure you know that throughout these hearings, so far, we've gotten a lot of comments and testimony.  Significantly, one of the things we heard in Salt Lake on Tuesday was that we were penalizing -- and I'm going to talk about penalties, too, later on and punitively -- that we were penalizing the large operators, comment after comment.  I would draw your attention to the transcript when it's published on the website at the Salt Lake hearing.  So, we say, or I say, why are we penalizing the large operator?So, they said to us because part of what I pointed out in my opening statement when I said that under the regular formula, in the size criterion, the smallest operators, the smallest coal operators, those who get less than the thousand tons of coal in the previous calendar year, metal and nonmetal operators working less than ten thousand hours, and independent contractors, less than ten thousand hours at all mines, they get no points for size.  
		So, then a big operator comes in and says, but it doesn't matter what I do and what the violation is, you know, it can be low gravity, low negligence, but  I still got twenty points, or whatever.  Maybe we raised it to twenty-five, I forget, but I start out with twenty-five points for size.  
		So, Mr. Henriksen, you started out saying, you know, this reg is one-size-fits-all, and in a conceptual way, I understand what you are saying, but there are things that we tried to do in the proposal to take into consideration what the Mine Act says and the application of the statutory criteria.  One aspect was size, and there we got criticized, because we said for certain small operators, you're giving them no points for size.   In a way, I'm just making this as the difficulty of as we go forward and what we have to do.  You said it correctly.  This is really a short process, but it is the beginning of the process, and we have to legitimately go back and take everybody's comments into consideration and figure out what to do, no matter how difficult it is.  Otherwise, what's the point of the process? I don't think we started out with a public  hearing or a rulemaking process, to come to the point where we say what's the point of the process.  There is some point to the process.  
		So, the next thing I do want to say, and I think I say on behalf of the entire panel, that you all are to be commended for the safety record and the safety achievements by the members of your association over the last, as you said, 2003.  I was going to say during the last year, and that's clearly a record to be proud of and you are to be commended for that.  On the failure to timely notify, your comment about that, and you've accurately said that.  That's a MINER Act provision, and to some extent, we have no choice in what we do there.  I would like to say here, as I have said in two other hearings, that if you had a management person at one of your small mines, and it was a situation, as you put it, of life and death, and that person was frantically working to save a life, I would hope that in that particular situation, that person would not take a hit from MSHA.  I have representatives of our Coal Mine Safety and Health Office and, obviously, you know that Im not out there every day inspecting mines, and our Metal and Nonmetal Office, but I would say that I have worked in metal and nonmetal, though.  I would say that I hope that in that particular situation, nobody would take a hit for failure to call MSHA within fifteen minutes when the alternative was saving a life.  I have my lawyer here.  So, I hope I'm not saying anything illegal.  
		MR. HENRIKSEN:   And let me address that.  I  understand that MSHA would not want to penalize someone who is busy trying to save someone's life, but that's not what the rule say.  
		If you really want -- I believe that -- I believe you, just what you say.  I believe that's MSHA's intention, and that intention should be put into the  rules, so that the inspectors know what they're doing.  
		I mean, I understand how you want to do what Congress has told you to do, for starters.  Secondly, the over-arching thing is that people have been delinquent in not calling MSHA about  serious injuries, entrapments or death, and sometimes they've hid them.  With that being said, I think you can take  what Congress has given you, and tempered by these rules, to have a fair result, so that your intent and your good faith is reflected in the rules.  I don't think that anyone in Congress would call you to question, you know, if you had some sort of language along those lines.  
		I propose something like that that allows the fifteen minutes to start running after a seriously injured person -- First off, make sure they're seriously injured.  Don't just call MSHA.  I mean, again, to back up, we have MSHA people on our safety committee.  You can imagine, once this thing became law, all the phone calls MSHA has been getting deluged with, you know, from every field office in Duluth, everywhere, by people.  I think this is a real opportunity for you guys to take what Congress has given you, which is difficult to deal with, take that and use your  regulatory process, use the tools you have, temper that so that it makes sense.  You guys say, what we care about is safety, saving lives.  But make sure the person -- Find the person and make sure they're seriously hurt, that it's something that might cause them to die, and make sure they get the first aid, make sure they're stabilized, make sure they're taken to the hospital, and then call MSHA.  In fact, it's ludicrous to call MSHA before you have done all of those things, because unless you've gone through the whole process, you don't know if thats something that could have killed somebody.  That's the appropriate time to call MSHA.  I think your rules can be changed just enough to do that, and then it's the best of both worlds.  We do what we're supposed to do, and you all have a tool against folks that hide serious injuries, deaths or entrapments.  You all need those tools, because in the past, people weren't -- I think the term of art was "immediately".  Well, they weren't doing it at all.  Now you have a time, and now you have a penalty.  
		MS. SILVEY:   I have one more comment, and then maybe some other members may.  You mentioned -- A number of times, you mentioned, or you made reference to our economic  analysis and how maybe we were not in compliance with the regulatory or maybe executive order requirements.  One of the things I want to say for everybody is that when you accurately spoke about some of the other rules where we quantify, or did the best job we could in quantifying the benefits, we didn't do that in this rule.  One of the differences is that this rule deals with -- The other rules dealt with the cost of compliance.  They were rules where we put into place safety and health standards, and what we had to do was then project the cost of complying with those safety and health standards.  This rule, on the other hand, as everybody knows, really deals with the cost of non compliance.  When you're dealing with that type of rule, the requirements are different.  The regulatory requirements in terms of what we have to show with respect to the Office of Management and Budget are different.  So, with this kind of rule, we really do not have to go forward and quantify, specifically quantify the benefits.  We really didn't have to do as much as we did, but we felt an obligation to come forward and present the cost, at least present some qualitative statement of the benefits as best we could, and that's what we did in the preamble to the rule and in the accompanying economic analysis.  Although, even as I say that, for the assumptions that we present, if people want to specifically comment on the assumption, if you disagree, not just disagree, but provide a specific definitive date, then we welcome that.  
		MR. HENRIKSEN:   And, again, as you just admitted and has admitted in the preliminary stuff, I mean, the cost benefit ratio has not been fully developed.  
		Again, I'm not taking a potshot at your economist.  You're on a very fast time line, and the reason you're on a fast time line is because you all have elected to take the MINER Act stuff, which is on a fast time line, and roll in a complete revamp of your penalty system.  You all have elected to do that, and I dont think you have to do both things.  You've got to go forward with the MINER Act, and that's fine, but I'm just -- I respectfully  request that you consider, seriously consider pulling back the part of the proposal that is not mandated by the MINER Act, put together a process just like you did for the Part 46.  Again, that was tedious, that was arduous and it took time, but that was buy-in from my people from top to bottom.  My state and all the surrounding states throughout the nation, there was a buy-in.  We trained based on Part 46.  We make sure our safety awards are a function of compliance of Part 46.  If we have that kind of, you know, collaborative process where we look at fines and  everything else as a group, you know, we may come up with something, at the end of the day, very much like what you've proposed, or it may be totally different,  but the point is that it will, hopefully, be better.  
		MS. SILVEY:   Okay.  Thank you.  
		MR. MATTOS:   I have a question.  On the comment you made earlier about one-size-fits-all, I would be interested in hearing from you any thoughts you have on how we would address the issue of coal versus metal and nonmetal.  Specifically, I mean, the intent of the proposal is to have an escalating penalty structure for  repeat violations, and as the number of violations increases, the penalties increase.  The only differences in the rule are in the size of the operation, those  criteria that we're using.  Do you have any thoughts on other ways that we would be able to address the one-size-fits-all issue?     
		MR. HENRIKSEN:   Well, I'm reluctant to suggest that because of the Sago Mine disaster and other reasons, coal mines, metal and nonmetal, and I don't think I have enough data to really make that kind of claim.  
		What I do think is that that's precisely why we need to pull back this rulemaking and sit down with the coal people, the metal and nonmetal people,  everybody, and let's look at the industries and let's look at what's working.  Let's look at the bad actors and how we can go after them.  
		Part of what the MINER Act does is give you some radically large processes for going after bad actors penalty wise.  I understand that, but I think that we need to look at, if coal mines are not run as safely as aggregate mines, does that justify higher penalties for them?Okay.  Maybe, if that's true, and I don't know if it's true, but again, when you, later on with all the criticisms from the small -- from the big operators about getting hammered hard by this proposal because they're big, you know, they say we're being treated unfairly compared to the little guys.  That's, again, another reason to pull back and study this thing.  I am, as I sit here, I am not convinced.  I have not seen any data from you all, or I've got no feeling from my ten years of working for the Association or my many years before that being an enforcement person, I don't have a feeling at all that  your system is not working.  Yes, these sixty-dollar civil penalty assessments are not big, sexy fines, but if I am a small operator and I get five, ten of these sixty-dollar tickets, I'm going to fix them.  That's a small cash outlay.  The big cash outlay might be a brand new guard, or it might be a new compliance thing that this inspector wants.  Again, I have done rulemaking.  It's hard, once you're going forward, to step back from a process once you've started.  There's all sorts of things loading into this rulemaking that I believe I understand, but with all due respect, I suggest that you go forward with your MINER Act for the rulemaking and make the change I suggested.  Pull the rest back, and let's work together.  Let's talk to the coal guys and find out if their places are -- if Their places are more dangerous than aggregate mines.  If their safety programs aren't being implemented as strong as ours, maybe they should get fined harder.  I don't know.  We don't know, and that's the whole point.  We're making -- We're creating -- You're creating a penalty system that's a change in the way things are done, and notwithstanding how hard you've worked on your analysis, it's incomplete.  With all due respect, it's incomplete because you haven't sat down and talked with us.  Ten years ago, I would not have even thought that was even a possibility, because we were constantly at war, you know, with MSHA.  All I heard from my members was MSHA this and that, hard-nose inspectors.  Since then, it's been very different, you know, and it's a refreshing change.  I honestly think that you all can sit down with our industries and look at your penalty process and  come up with something that maybe does increase fines, maybe does go after sectors, or coal, whoever, maybe does penalize big guys versus little.  
		For instance, if Illinois has the best incident rate, maybe we should get a break.  I don't know.  There's these factors that could be looked at,  and I'm saying because you are on this -- You've hooked this penalty assessment process to the MINER Act car, I think it's hurdling down the track, and it's time to uncouple the car, put it on the side, reach out and meet with us.  I know the National Mine Association would be tickled to sit down with you all, their safety people, and people from my industry would be glad to sit down with you all and talk about this.  There are safety professionals all over this country that will be glad to talk with you about their concerns about this thing and how they can craft something that addresses the concerns that you all have that maybe you're not being punitive enough, or maybe you want to enhance compliance.  
		MS. SILVEY:   One of the things I want to say is that, and we've heard this, too, that when you talk about the fines, and everybody will say, you know, penalties should not come to me.  I would probably say that if a policeman stops me for speeding.  What we are hearing, and that is truly laudable, companies with good safety and health, injury and illness rates and safety records.  The thing of it is, and that could be another criteria in terms of what should be an indicator of where the penalties should go, but one thing about it, to do that, that would require a change in the law.  
		So, what we have in terms of the penalty proposal, the penalty that we propose, we started with the law that we have and the existing rule, and to build  in an index of the safety and health record of a company  as one of the additional indicators, and that would require some kind of a Congressional change.  So, I wanted to say that.  I mean, I say that in terms of criteria that MSHA must consider in doing the penalty.   So, we heard that, but we've heard it before.  So, thank you.  
		MR. HENRIKSEN:   Thank you.  
		MS. SILVEY:   Next we will hear from Paul Kraus with the American Coal Company.  
		MR. KRAUS:   Good morning.  
		MS. SILVEY:   Good morning.  
		MR. KRAUS:   My name is Paul Kraus, K-r-a-u-s, and I'm the manager of Health and Safety for the American Coal Company, a subsidiary of Murray Energy.  I would like to thank MSHA and this panel for the opportunity to provide comments on the proposed  Civil Penalty Rule, a rule which will have widespread effect on the industry, and not in the manner that MSHA seeks.  
		The American Coal Company is a large underground coal mining operation in Southern Illinois.  This operation includes three long walls, six continuous mining units, a large preparation plant and over seven hundred and fifty employees.  We take the safety of our employees as our absolute top commitment.  It is our moral and ethical responsibility to protect the health and safety of our employees.  
		I didn't bring a chart like that one (indicating), but I could have.  Last month, we finished with an NFDL rating of 1.57, and 5.5 for the quarter, which is under the national average.  The proposed rule will be very harmful to the safety efforts of responsible operators.  Civil penalties are not an incentive for safety, nor do they have any positive effect on our, or any other operator's safety efforts.  We strongly urge MSHA to significantly modify the proposed rule and return to the prior penalty system to the extent possible.  Some of the provisions of the proposed rule are statutory-based and cannot be affected by rulemaking procedures.  Our comments will be more aimed at the changes in which MSHA has some discretion or are otherwise statutory, but subject to interpretation.  
		The changes, as a whole, are a misguided attempt to increase safety by punitive actions against operators.  The result will be greatly increased civil penalties, in effect, tripling them.  Our specific comments are as follows: 3(b) Appropriateness of the Penalty to the Size of Operator's Business:  MSHA has proposed to increase the penalty points for size from an old maximum of ten to twenty for mines over two million tons of production, which we have.  MSHA contends that is to make the monetary penaltyproportional and, therefore, increase compliance.  This view is seriously flawed and discriminatory.  Large operations are inherently safer.  This proposed change has the reverse effect of punishing size, which is generally a safety enhancer.  The series of mine disasters that led to the MINER Act were smaller mines.  This is typical of the proposed rule and shows the disconnect between the reality at mining operations and the MSHA bureaucracy.  100.3(d) Negligence:  The old five-tier system determining points to be assigned for negligence was effective and has been retained by MSHA, but with the points for the upper three tiers increased and doubled at the level of reckless disregard.  
		Our view is that the increase should not apply to moderate negligence, as that is not at a volitional stage of culpability and is subject to wide variation of interpretation.  
100. 3(e) Gravity: MSHA has increased the potential from a  maximum of thirty penalty points under the previous rule to eighty-eight penalty points under the proposed rule.  Historically, the gravity portion of a citation is the most frequently contested item by our company in Health and Safety conferences conducted with the agency.  This is primarily due to the inspector's determination of the gravity being speculative in nature and subject to individual interpretation.  This excessive increase in penalty points is unwarranted in potentially subjective areas.  100. 3(f) Demonstrated Good Faith of the Operator in Abating Violations: In this misguided section, MSHA actually decreases the beneficial effect of timely abatement of  violations by operators.  Previously, an operator could receive a reduction of thirty percent for timely abatement.  Now,  it's only ten percent, a disincentive rather than an incentive to timely compliance.  100.3(g) Penalty Conversion Table:   This now sets a floor of one hundred and twelve dollars for a penalty.  It is inappropriate to set such a floor for non-significant and substantial non S&S penalties and mere paperwork violations.  This is the purpose for which the Single Penalty Assessment was designed, but this has also been eliminated at Section 100.4 of the proposed rule.  The deletion of the single penalty, and the floor of one hundred and twelve dollars will have the effect of merely increasing bureaucracy and inefficiency and will not have any real effect on safety compliance.  
		The concentration of MSHA and the operator should be on the elimination of potential S&S violations.  
		The elimination of a single penalty causes the intention to be blurred.  Lumping all violations, both S&S and non S&S, into one category actually  diminishes the emphasis on S&S.  This is a further example of the lack of a practical approach of MSHA to real issues.  
		100.4 Unwarrantable Failure: Much of the proposed rule in this area is designed to implement the statutory requirement of the MINER Act.  As such, there is little discretion possible.  It is difficult to gauge the effect of one  proposed change, the elimination of the list of specific categories that can be the basis of a special assessment.  
		Our view is that this has not been a problem before.  So, why change it, and that any change would probably lead to an increase in special  assessment, which, if flagrant, can be assessed at two hundred and twenty thousand dollars.  This is an unacceptable combination, as it provides MSHA too much  discretion.  100.6 Procedures for Review of Citations and Orders: The time period for requesting a Health and Safety conference has been reduced from ten days to five days.  There is no reason for this change.  The rule goes on to incorporate certain statutory disclosures.  MSHA predicts that for each ten percent increase in penalty for violations, there will be a three percent decrease in its probability of occurrence.  This appears bogus, as compliance at responsible operations is not driven by penalty costs, but by other motivations.  This is a cynical attitude by MSHA and indicates a punitive mind-set, rather than safety mindedness.  Further, in the disclosure portion, MSHA states that the proposed rule is economically feasible for the mining industry, because the anticipated expanded increase in penalties will be 15.  9 million dollars, equal to .07 percent of coal mine sector revenue of 22.1 billion in 2004.  This, again, shows a disconnect between the economic challenge faced especially by underground coal mines and the understandings of MSHA.  On a personal note, just to echo what was  said previously, we also had an incident this week on Wednesday where one of our employees had an apparent heart attack on the coal mine property.  The phone call was at 3:00 clock in the morning, and at that time, we were trying to collect the information over the phone on exactly what occurred,  because it wasn't apparent that it was a heart attack at that point.  Our first response is to the individual CPR, to ascertain the individual's injuries, whether it was an accident or a natural cause, and then the decision was made to call MSHA.  To do that all in a fifteen-minute time frame at 2:00 o'clock, 3:00 o'clock in the morning is an  extremely difficult exercise.  I know that that can be changed, and I hope that MSHA would not start the clock ticking on the very instant when something like that is discovered, because the first thing that people need to do, as far as safety is concerned, is the individual.  It is very difficult on our part, in some of these instances, to comply with these provisions.  I will be glad to answer any questions that you may have, and I appreciate the opportunity to address you.  		MS. SILVEY:   Thank you.  On that incident that you had Wednesday when you called MSHA, you said 3:00 a.m. in the morning, did you get somebody?
		MR. KRAUS:   Yes, we did.  
		MS. SILVEY:   Did you call the 800 number,  or did you call the district?
		MR. KRAUS:   We called the individual inspector assigned to our property.  
		MS. SILVEY:   Assigned to your property?
		MR. KRAUS:   Yes.  He was there on the property when I arrived.  
		MS. SILVEY:   Okay.  
		MR. KRAUS:   And it turned out that it was natural causes.  It was a heart attack, and we lost a very valuable employee.  
		MS. SILVEY:   Well, I'm sorry to hear that.  
		MR. KRAUS:   I appreciate that.  
		MS. SILVEY:   I really don't have -- I don't think I have any comments.  Do you have any?
		MR. MATTOS:   Just one point of clarification on the special assessments review.  Our intent in removing the list of categories that we automatically consider for a special assessment where our hope and our intent is to reduce the number of special assessments that we're doing.  Right now, the way the rule is written, MSHA must go through a review process starting with the inspector, and the process goes through to the assistant district managers and the district managers.  We are hopeful that the regular formula would provide a good enough penalty, civil penalty, so that that number of special assessments can be reduced.  We currently have discretion to specially assess any citation, and we would retain that discretion.  It would really be taking away a list that we are automatically going to review.  I just wanted to clarify that.  We are hoping not to have more, is what I'm trying to say.  
		MS. SILVEY:   I Said I wasn't going to make this comment, and I don't know what, because, you know,  in a way, philosophically, you sometimes don't change how people feel about things or their approach to things.  
		The statutory provision for this proposal is a civil penalty provision, and by that, I mean that the whole purpose of the law, the Mine Act was remedial,  proactive in nature and not punitive.  You know, I guess, though, when people see a penalty, they think of punitive.  So, I hear all the  comments and testimony.  Comments and testimony we heard earlier couch the proposal as punitive in nature, but in point of fact, it was meant to be proactive and preventative and as an effective inducement for safety, or on the other hand, a deterrent to unsafe behavior.  So, with that in mind, we tried to propose some things to sort of provide a great inducement, but like some of you are telling us, we didn't do it in the manner which would be most effective, and we appreciate that.  But as each of you all come forward, if you can provide, when you make conclusory statements to us,  if you can provide specifics to back up your conclusions, and then that would be very helpful to us, particularly if we were to go ahead and make a change.  That would be very useful, any specifics that you can provide.  Thank you.  
		MR. CROCCO:   Can I ask you a question?
		MR. KRAUS:   Certainly.  
		MR. CROCCO:   Under repeat violations, you have a pretty large coal mine, a big operation and you probably get a fair number of citations.  Could you talk a little bit about what you do, in your mind, the processes that you have in place  to address repeat violations or prevent them from reoccurring?
		MR. KRAUS:   One of our problems right now is that we've got three underground coal mines under one ID, and we're seriously considering assigning an ID for each mine.  As this new rule is written, the history is all under the single ID that we have.  So, one mine that we have is a little bit more difficult to maintain compliance, because of  geologic conditions, than the other two mines.  So, our best interest is to split them up, and we're seriously considering that.  
		We look for the root cause of anything that occurs.  The big problem is the 75.400s, as it is in any underground coal mine.  You're going to have coal spillage from time to time.  We are doing the utmost to analyze each individual occurrence and to propose and recommend things to keep them from occurring again that are repeat in nature.  We've entered into a partnership with MSHA  on the Repeat Violation Reduction program.  We have monthly meetings with the inspector, and we pick out the violations that are being issued on a repeat nature, and we try to target them.  Right now, it's 75.400s and 75.1900s for us, because we have the largest underground diesel fleet in the country.  We have a hundred and seventy-one pieces of diesel equipment.  So, 75.1900s is a big one for us.  I know eliminating men, too, because as I mentioned, we had a hundred and seventy-one, and we're down to about a hundred and ten now, and we're going to all battery-powered haulers and cable-cart haulers.  We are eliminating our diesel equipment.  So, that, in itself, eliminates the 1900.  
		MS. SILVEY:   Where are your three mines located, these three mines?
		MR. KRAUS:   Right outside of Harrisburg, Illinois.  A little town called Galatia.  
		MS. SILVEY:   So, they are really geographically together?
		MR. KRAUS:   Two of them are completely hooked together in different coal seams.  
		MS. SILVEY:   Okay.  
		MR. KRAUS:   So, there's a Number 5 seam, which is a loaded seam, and then a 6 seam.  
		MS. SILVEY:   Okay.
		MR. KRAUS:   It's about a hundred feet above it.  They are serviced by the same portal.  
		MS. SILVEY:   Okay.  
		MR. KRAUS:   But they're under the same ID.  
		MS. SILVEY:   I understand.  Thank you.  
		MR. KRAUS:   Thank you.  
		MS. SILVEY:   We will next hear from John View with Journagan Construction and Aggregates.  
		MR. VIEW:   My name is John View, Vice President of Leo Journagan Construction Company, Incorporated, or Journagan Construction and Aggregates.  We're located in Southwest Missouri, Northwest Arkansas.  in the Springfield area.  
		Leo Journagan Construction Company has approximately one hundred miners employed.  We have a total of three hundred and twenty employees between our construction operations and our mining operations. We operate at eighteen sites in two states.  We're a surface mining, nonmetal operation.  Aggregate production is what we do.  The proposed changes in the MINER Act are mandated changes by Congress.  However, the rest of the proposed rule changes we've started to discuss here appear to go well beyond those requirements.  We question whether MSHA's assumptions of increased penalties leads to increased compliance.  On the contrary, we believe the best environment for increased safety is achieved through the cooperative effort accomplished by Part 46 between MSHA and the industry.  Knowing that MSHA inspectors had the ability to issue citations that represent much larger monetary penalties will only cause problems.  Changes should be focused towards safety,  not penalties.  I understand there's a difference in how we think we can get there.  However, we are also concerned that the  money used to pay the increased penalties will shift funds for overall safety and health efforts by the operators.  
		In addition, we have to consider health insurance costs, fringe benefits for employees in our mines and many other rapidly escalating costs that increases a situation that has already made it necessary for some employers to cut back on those fringe benefits.  Payment of dramatically increased MSHA penalties will only add to a tendency to further reduce employee health insurance benefits and other related benefits for those employees.  
		It will probably lead to increased, in some situations, increased employee evaluations where employees are cited for specifically violating MSHA regulations in order to further reduce costs for the employers.  MSHA's preamble discussions are in Part 100  and refer to the number of citations that were steadily increasing since 2003, that has been spoken about, and they proposed that the metal and nonmetal miners with less than ten thousand hours are exempt from those penalty points assessment.  Further on in the comments, on a couple of  pages later, MSHA makes the comment that this eliminates approximately one half of the metal and nonmetal mines from the penalty point assessment.  If the penalties are on the rise, MSHA has not done anything to analyze why those penalties are on the rise.  They make the assumption, based on the ability to pay for a larger operator, that they are able to carry the cost of increased enforcement.  They've  exempted the small operator from those penalty point assessments.  The problem that has a tendency to cause is, let's assume there's a small operator, with less than five employees, operating next to a larger operator who has three operations, three small operations.  One  of those small operations is located in the same area as the exempt small operator.  The larger operator is penalized and has  additional costs to his operation as a result of this penalty point assessment and the history assessment for the parent company.  
		That has a tendency to inhibit free trade and competition between the operator that is exempt from those penalty points and the operator that's not.  		Let's face it, MSHA knows it and we know it.  A violation is a violation.  We're not out here to try to eliminate your ability to write citations for valid violations.  We all want to be on a level playing field.  If there is penalty points to be assessed, they should be assessed equally to everyone.  In the alternative, the penalty points should not be assessed based on the controlling entity's size.  This is further complicated by the fact that a controlling entity may operate in several states.  That controlling entity may operate in a couple of different or several different MSHA districts.  This could lead to these various divisions of a company's business being included in determining the size of that operator, which are unrelated to mining.  It becomes a gray area.  Where do you draw that stopping point on administration to determine the controlling entity's size? 
		Secondly, larger companies which are vertically and regionally integrated operate under different management controls in many situations.  Those competitive -- Those divisions and regions are competitive with one another and independent of one another when assessing safety incentives and other  performance criteria within their divisions -- between their divisions.  It does not seem reasonable to punish one  division for the poor safety performance in another division by using this controlling entity analysis.  What's more, larger companies often operate in multiple MSHA districts that have their own management priorities in areas of safety concerns, both for the company and for the MSHA district.  By maintaining these separate entities and not looking at the controlling entity, it reduces the impact of an occasional loose-canon inspector, I will call it, or also the loose-canon operator supervisor who may be in one area, if I could use that on our side.  I  don't like to use that term, but it's only fair.  We're not perfect, and you're not perfect.  We want to strive for improvement and not to adversely affect the rest of the operation.  We believe MSHA should continue placing emphasis on safety performance at individual mine sites.  Local management, supervisors and employees are likely to retain more ownership of their safety performance if they know that they are the ones that are most  responsible for maintaining a good compliance track record for their operation.  The Single Penalty Assessment has been addressed.  This system works now.  The incident rate is decreasing over the last fifteen years.  We urge MSHA not to eliminate the Single Penalty Assessment.  
		Enforcement of MSHA's regulations is not necessarily consistent, since some inspection personnel understandably have more or less expertise and personal  emphasis regarding certain standards.  It is also important to keep in mind that many non S&S citations have historically been issued in highly subjective conditions.  Where one inspector may find a situation in conformity with the regulation and  make that cycle through his inspection period without any violations, the next inspector comes in the next year, and they rotate around, and he finds an obvious  violation of something that has been an accepted practice.  These are usually minor situations involving simple housekeeping or temporary oversight, and in many cases, they're related to minor paperwork errors or oversights.  
		MSHA admitted in its rulemaking notice that calculating the points and assessments under this proposed new system will be very time-consuming and  costly for them by removing the Single Penalty Assessment and putting them all on a regular assessment subject to the special assessment review.  This seems especially unnecessary for the type of violations, propose little risk of injury or illness to mine employees to even be put in that category.  Again, we recommend that you maintain the Single Penalty Assessment.  Regarding the penalty points for minor  violations, this five-fold increase in penalty points for those violations classified as unlikely to result in  injury or illness is not justified.  This effectively eliminates this distinction between S&S and non S&S citations from a penalty perspective.  The current penalty program for gravity should be maintained.  Remember again that one half of the operators are exempt in metal and nonmetal from this  penalty point for minor operation violations.  Good faith incentives has been discussed previously, and I'll discuss it some more.  I want to reiterate, especially based on what Madam Chairman Silvey had just related in the last comments.  MSHA is limited somewhat in what they can propose in looking at the incident rates from insurance companies and good performance by mine operators.  Journagan Construction Company also has a below-industry average for incident rates, and we have an incident modification rate of .79, industry standard being 1, and bad operators being above that.  We're very proud of that and envious of that.  However, we oppose the reduction for good faith from thirty percent to ten percent because, as previously mentioned, many of those citations are the result of temporary oversight or subjective evaluation by an inspector.  It is counter-productive to sharply reduce the incentive for abating such citations quickly.  This would also further reduce the need for follow-up inspections by MSHA.  That's a cost savings for MSHA.  Also, this thirty percent incentive for early abatement and prompt abatement provides an incentive for the operator to temporarily disrupt his operations, put a couple of people on fixing something that can be fixed right away before the inspector leaves, and it's abated and taken care of.  That has cost savings, health savings and safety savings for all involved.  
		MSHA does not want to come back thirty days later and find out the operator fixed the situation the day before they were scheduled to come back.  The fact that they fixed it while he was there is thirty days of increased safety operation that needs to be considered by this Commission.  
		While I understand you cannot provide an incentive not provided in the law by looking at safety records of individual mines, and what have you, what you can do is maintain the good faith incentive that has been allowed by law and not further penalize us by diverting our ability to comply or by decreasing our desire to comply instantaneously.  The repeat violation category and the regular assessment penalty point calculation seems to duplicate the history of violations criteria.  MSHA can use a single standard to cover many unrelated conditions.  For instance, Safe Access under 30 CFR 56.1101, it can relate to several different items, from a bent rung on a ladder, to the requirement of an employee having to step over a barrier to access a screen or access a belt in several other situations.  If a company establishes a multiple violations history of 56.1101, that is not necessarily a repeat violation of the same violation.  The bent ladder rung cited at 561101 and the follow-up inspection later to find an employee stepping over a barrier for a violation of 56.1101 is not the same violation, but under your standards, that is a repeat violation and would be considered as such.  Guarding is another instance.  Guarding covers not only vehicles.  It covers belts, belting material, and it also covers motors.  There are several areas there where repeat violations of that violation would not be what MSHA is referring to as a repeat violator of the same violation.  Because each inspector subjectively interprets MSHA standards according to his own expertise and personal insights, the repeat violation is likely to be unevenly applied.  There is no way, with the current citation numbers in the Code of Federal Regulations, at this time, for MSHA to track repeat violations.  I would further say repeat citations, because not all citations are violations.  When they are mitigated, there are some that can be mitigated down to a lower level.  There are some that can be vacated in their entirety when everybody understands what the situation is.  MSHA comments that small operators are not necessarily who MSHA is targeting with history criteria.  MSHA thinks the record may not reflect systemic problems of non compliance with the small operators, again, because they are exempt from this assessment.  Recent administrative law review of MSHA's actions in the last year have indicated that independent operators were cited at a mine for a violation.  They had their own ID number and their own right to operate.  The operator was also cited for that violation by the independent contractor.  MSHA's Review Commission has said there is no appeal by the operator of the violation committed by the independent contractor.  That amounts to triple damages.  Now you want to add history onto that to increase further thepenalty on an operator who's trying to comply with the regulations.  MSHA believes larger operators show a lack of commitment to good mine safety and health.  I would contend that that's not true.  The larger operators have the ability to improve mine safety and health much more economically than the small operator.  After all, a violation is a violation, and the ability of a larger operator to mitigate that and  eliminate that, as stated by the coal operator that was just up here, is an ongoing, continuous process of improvement, and together with MSHA, under Part 46, we  can continue to do that and accomplish that.  The time allowed for conference request and additional information, we believe MSHA should be  consistent with OSHA in allowing fifteen days to submit additional information or request a conference on citations.  
		At the very least, and in the alternative, MSHA should maintain their current and present ten-day standard and not reduce it to five days.  
		Industry in general across this nation is subjected to a fifteen-day turnaround period.  Miners currently have a ten-day period.  It is proposed that it be reduced to a five-day period.  We feel that this is unfair.  The proposed change does not allow mine operators to determine the appropriate course of action following the issuance of a citation.  Our industry is unique, since operators often have sites that are scattered over a wide range and wide geographic area.  It is possible for a citation to not reach the proper management authority for a day or two, especially considering work schedules, vacation time and illness.  It is also possible that when that operator  appeals that citation, that the appropriate MSHA person is not on the other end to receive that and discuss that and mitigate that citation in a timely manner because of schedules, vacation time and illness.  All operations, large and small, need time to seek appropriate guidance to research the circumstance of the citation before requesting a conference.  This saves time spent in conference and litigation for both the mine operators and MSHA personnel.  That's what we all want to do, is eliminate the time we have to spend following up on a citation.   We need to efficiently spend our time in eliminating the cause of that citation and improving our mine operations.  
		The timeliness of accident notification, we have one final recommendation, and I'm going to divert from that a little bit.  It would appear that the gentleman from the IAAP had a very good alternative proposal on the surface there.  I feel that the fifteen-minute time frame is unreasonable.  I believe this proposal and Chairman Silvey's response to that, the intent is to allow the compliances necessary in a reasonable manner and attend to the physical needs of the employees in a hazardous area.  I don't believe it is the intent of MSHA to do away with that.  I think we have a viable alternative that was proposed earlier, and I would request that you favorably consider that request.  
		Again, thank you for allowing me to comment.  If you have any questions, if I can find them in my notes, I will try to answer them.  
		MS. SILVEY:   Thank you, sir.  I do have one comment.  I think maybe it is just a clarification to make sure that we are on the same wavelength.  You mentioned the size, and you kept saying no points, no assessment for small mines.  Just so everybody knows, I am trying to half way try to make sure that we are clear on your testimony.  You were going through the proposal for the regular assessment and the various criteria in that proposal.  
		MR. VIEW:   Yes.  
		MS. SILVEY:   And MSHA proposed different tables for size.  So, it's not that small mines, mines under a certain tonnage category for coal mines, hours for metal and nonmetal mines and hours for independent  contractors, it's ten thousand tons for coal mines, ten thousand hours for metal and nonmetal mines and ten thousand hours worked at all mines for independent contractors.  It's not that that category of operation would not get any penalties.  It's just that they would not get any points for size.  So, they would end up getting penalties under the proposal.  It's just that it would be no points for size.  
		So, I just want to clarify that for everybody, and there is no change from the existing rule.  That's the same as it is under the existing rule.  
		MR. VIEW:   Yes, ma'am.  And what I was referring to -- And pardon me.  I beg your forgiveness if I wasn't clear.  
		MS. SILVEY:   No.  That's fine.  
		MR. VIEW:   I meant that the size category should remain as it is.  It should not go to the controlling entity in order to increase penalties and assessments to the operator.  That, again, is a free trade -- not a free trade, wrong word, but economic competitiveness between competitors.  It keeps us on the same playing field as much as possible, based on the size of the individual mining entities, rather than the controlling entities.  I apologize if I was misleading.  
		MS. SILVEY:   No problem.  Thank you.  We next have Bob Pono (sic) from Frontier-Kemper.  
		MR. POND:   It's Pond, P-o-n-d.  
		MS. SILVEY:   I'm so sorry, Mr. Pond.  Boy, I really messed that up.  
		MR. POND:   Well, if that's all you've done, you're forgiven.  
		MS. SILVEY:   Thank you.  
		MR. POND:   My name is Bob Pond.  I'm Executive Vice President of Frontier-Kemper Constructors.  We're a shaft and tunneling contractor, with about a third to half of our revenue coming from mining work, both coal and metal and nonmetal.  We also have an operation which designs and manufactures hoisting equipment.  We'll celebrate our 100th year in business next year, and we have the first contractor ID ever issued by MSHA, A01.  People from our machinery division teaches at the academy periodically on hoisting equipment.  We've had a cooperative relationship with MSHA and MESA since the very beginning.  We're going to submit more details, written comments on the 23rd.  We are owned, in the end, by a very large and diversified conglomerate in Europe.  
		My question on controlling entity is, you know, you can ultimately go as high as you want to, but as some point, while they may control you in terms of share ownership, they have absolutely no participation or influence in how you conduct your business.  So, I would ask, and we'll put this in our comments, the controlling entity be the entity which controls the behavior regarding operations, as opposed to financial only.  
		The second concern we have, and people have commented on the fifteen minutes at length, and I won't   spend too much time on it.  But given the importance of the sixteenth minute and the price tag that attaches to that, I really do think you need to clarify what one minute zero is.   There's been a number of good reasons why it should begin, perhaps, a little bit later than you have envisioned.  
		In our experience, and I think it is recognized by others and I'm sure recognized by MSHA, a great many accidents and, in fact, perhaps the majority are caused by unsafe acts or unsafe behavior by an individual.  MSHA has the power to issue citations to individuals, but doesn't seem to use it hardly ever.  That power also exist in Canada, it exist in Germany and France, and it has great effect there.  The individual miners take it much more seriously than perhaps some of ours do.  We suggest that you could go a long way towards improving safety by making a little more use of your power to issue individual citations.  I know there's a lot of heat that would attach to that, particularly from some of the labor unions, but I think the benefit would outweigh just taking a little gas, which you take anyway all the time.  
		Also, there's certainly no uniform interpretation of regulations, despite the program bulletins from district to district and from inspector to inspector.  That's a fact of life.  We work in all the districts.  We've seen all of them.  Every time a district record changes, there's a difference in interpretation.  
		So, we're always left a little bit in limbo on compliance, particularly with some more esoteric rules and how this is going to be looked at.  It doesnt mean that either interpretation is wrong.  It just means which one can you count on.  This penalty process or increased penalties, I think, will have an effect of making us contest more.  That's going to choke a system that's already choked, as you know, and we have that concern.  We would also suggest that it's well time for MSHA to write and implement Part C of some of the regulations that has to do with construction and recognize the distinction between construction and mining.  It is different.  We have a more transient workforce.  Were not there for twenty-five years.  We're on a particular site for a year.  So, the fluidity of our workforce is different.  The origin of our workforce is different, and the regulations should recognize that.  I did notice that in your statistics, you show an increase in citation revenue, theoretically, of forty-four million dollars.  I think it would go a long way toward taking some of the public heat off, and we know that you've got lots of it these days because of Sago.  To show what you're going to do with that money and how that extra money is going to improve safety in the mines and miner safety, well, perhaps by spending it, if you do get it, on training and on other things which help, rather than just use it as a fund mechanism.  The impression most of us have now is that its a thinly-veiled funding mechanism that has only the purpose of increasing your revenue.  Another comment I'll make is that many of us are self-insured for worker's comp.  So, we have an absolute giant incentive to do a very good job of safety and preventing accidents, because the money is coming out of our pocket and not an insurance company.  That's probably the king-sized motivator we have.  With that, I will conclude just by saying that I think these hearings are a good idea.  You should do more of them from time to time, and you will get our written comments at the appropriate date.  		MS. SILVEY:   Thank you, Mr. Pond.  I have just a couple of comments, sir.  First of all, a number of you said that today, and I want to say that we at MSHA appreciate it.  You have mentioned the cooperative relationship with MSHA, and we appreciate that, because quite frankly, we couldn't do our job, and we don't take it for granted.  I certainly don't, and I don't think the members of the panel today take it for granted when the mining industry works with us in a cooperative manner.  And you are right, we've taken a lot of heat and, unfortunately, that's some of the things that some members of the public don't see.  The fact that on a day-to-day basis, every day, each and every day, we do work together cooperatively and we do work together to achieve some of the same things that these fine companies up here have achieved for the last three  years.  So, I would like to make that comment.  With respect to the increase in penalty, the forty-four million dollars, you're right.  We show a forty-four-million-dollar increase, if you apply the proposed rule to the violations that the Agency issued in 2005.  Now, we went further, and we projected that if after the proposal with the higher penalties, in effect, mine operators, would ultimately expend more money to improve compliance, and that ultimately would result in reduced penalties.  We did carry that forward and we showed that.  
		You stated, Mr. Pond, that it would be good if we showed what we were going to do with some of that money, that the public would like to see.  
		But in point in fact, the Mine Act requires that all penalties go to the U. S. Treasury.  So, any penalties that we collect, they don't come back to the Labor Department.  They go to the U. S. Treasury and the general receipts of the Treasury and, therefore, are used for the Government's budget.  
		MR. POND:   Maybe spend a little more time on the Hill, then.  
		MS. SILVEY:   Yes, I'm sure.  So, that's really all I have.  Does anybody else have comments? 
	[No Verbal Response]
		MS. SILVEY:   Thank you.  
		MR. POND:   Thank you all.  
		MS. SILVEY:   Next we will have Jerry Neels with Delta Company, Inc.  
		MR. NEELS:   Good morning.  I just want to echo that we do appreciate the opportunity to have this hearing.  I'm Jerry Neels.  I'm the Corporate Safety Environmental Manager with Delta Companies, Incorporated.  We are a construction company, primarily hot-mixed asphalt.  We also have ready-mix plants and six mining operations, employing about a hundred and twenty-five people in the mine division.  We're located in Missouri, Illinois and Arkansas, three states.  We are a subsidiary of COLAS, French-owned COLAS headquartered in Paris, France.  We've been owned by them since about 1992, just to give you a little bit of background on our company.  I would also like to state, you know, for the record, in addition, we're a member of IAAP, and I'm not going to repeat John's comments.  John did an exceptional job summarizing many of the feelings of the members.  In my prepared statements, I'm going to kind of deviate, for brevity, if nothing else, because I'll be just repeating a lot of things that John has already said.  So, in the interest of time, I'll kind of just move ahead.  
		We are also a company very committed to safety.  One of our operations just passed the million mile -- million man hour, consecutive man hour, excuse me, milestone this year without a disabling injury in one of our quarry operations.  Ten years ago -- I have been in this industry twenty years.  I had kind of given up on ever having any of my operations go through a full inspection without getting any citations from MSHA.  This year, we had two of our operations, in this last round of inspections, had zero citations.  I think that's a reflection again of the increase in the training and the education of our people that came through Part 46.  Our compliance in our company has improved dramatically since I have been affiliated with our company.  At one point, we were in excessive history, and that's quite a change in our violation history.  
		There's a couple of things I just want to add, kind of supporting what John said, and I'm not going to read my whole prepared text.  The Single Penalty Assessment system, as stated by several of the speakers, already does work well.  I've kind of viewed that, in a way, in the past, as somewhat of a tool that MSHA uses to educate the mining industry.  They are assessed for some of the more minor violations, the technical things, the paperwork violations and the less serious situations, and in MSHA's own words, not reasonably likely to cause a serious injury.  I think industry has used those non S&S or the concept of the non S&S to educate not only the mine companies, but also the workers.  You know, it gives us an opportunity to come into full compliance for all the regulations that don't really result in anything serious thats going to result in accidents and injuries.  So, I think that system does work well, and we really would like to see that maintained.  The reduction in good faith proposal, again, it's already been stated by the other speakers at the hearing this morning, and I guess our feeling is that the proposal, as it's written, kind of does the opposite of what they intend to try to do.  Most of your -- Especially with your minor violations, we take care of those before the inspector either, one, leaves the area or, two, usually by the end of the inspection.  That reduction in good faith, or that good faith reduction credit you get for thirty percent, obviously, that places an incentive for you to take care of that right away in a timely manner.  So, by eliminating that, it seems to fly in the face of taking care of everything right away.  We would like to see that stay at thirty percent.  You mentioned earlier that we get a chance to ask questions.  So, maybe I would like to ask a question.  I may be a little bit confused on this issue, but on repeat violations, excessive history proposal, as stated in the proposal, the one thing that I would like to see -- And this has been confusing for us, and I have failed to be able to get the same answer, I think, from the same -- the same question from several different inspectors with the same answer, and that is how MSHA defines what constitutes an inspection day.  There's a lot of confusion out there about that.  I've researched the law.  I've talked to the Solicitor's Office about that in one of our contests, and I can't find it anywhere, and no one has been able to provide that.  
		MR. MATTOS:   It's classified information.  		MS. SILVEY:   He wasn't supposed to do that, because I was going to say first that I just said you can ask questions, but I didn't mean it.  
		MR. NEELS:   Is that because I'm rambling?
		MS. SILVEY:   He stole my thought.  That was humor.  I was going to infuse a little humor here.  Jay will answer that.  
		MR. MATTOS:   The inspection days are any day an inspector shows up at an operation to conduct an inspection.  
		MR. NEELS:   For any reason?
		MR. MATTOS:   Not for any reason, only for inspection and investigation type activities.  
		MR. NEELS:   Let me just ask that.  Is that in a policy somewhere that's available to the mining industry?
		MR. MATTOS:   Well, that's a good point.  We'll put it out on our website.  
		MR. NEELS:   Okay.  
		MR. MATTOS:   We can raise the fog factor there.  
		MR. NEELS:   That would really help, because we found out the difficulty of that process when we found ourselves in excessive history.  In trying to get from the Agency what constitutes violations per inspection day, the violations part was easy.  It was the per inspection day part that we never were able to run that down.  
		Since that's used in the formula, that's a critical issue for the operator.  
		MS. SILVEY:   It is.  
		MR. NEELS:   What we did with our, or what I did with my mine superintendents or my quarry foreman, I told them, I said, "Before the inspector leaves, when he closes out, ask him how many hours you are going to get credit for the inspection".  So, we started tracking those ourselves, because when we went back and started looking at what was available to us through the website, some of it didn't match up.  That's an issue that I would really like to see the Agency get to the bottom of for the mining industry, if we can.  
		MR. MATTOS:   All right.  Part of the confusion is that we went with a new computer system last year.  We had two different ways that the inspection days were counted, one way for coal and one  way for metal and nonmetal operations, but now we're counting them all the same way.  The hours dont have anything to do with it.  
		MS. SILVEY:   If he was there for four hours doing an inspection that would be one inspection day.  
		MR. NEELS:   Okay.  Because I don't know about everyone else in the room, but there's a lot of confusion about that issue.  
		MR. MATTOS:   If there's two inspectors there that day, that's two inspections.  
		MR. NEELS:   I was told by one that it was every four hours of inspection time, and the another that it was, like, every six hours of inspection time.  		MR. MATTOS:   Actually, it used to be every five hours.  
		MR. NEELS:   Okay.  So, they were both right.  Well, thank you for addressing that.  That is an issue that I think is important.  In regard to the time allowed to conference a citation, again, I will just kind of reiterate what the other gentleman has spoken about.  The rationale that MSHA, you know, for believing that the proposal -- MSHA believes that the proposed reduction would result in a more effective  civil penalty system, because penalties will be assessed closer in time to the issuance of the citation.  That's a quote from the proposed rule.  
		I just had a little bit of a hard time understanding the logic in that, because it takes a minimum of several weeks, if not several months, for us to get our assessments, anyway, which I really don't understand how just reducing the time to allow the mine operator to make a decision on whether to conference that is going to have that much impact on that.  What it is going to do, though, especially if we do away with the single penalty system where you fall into the regular assessment under the point system, I anticipate that it's going to force a lot of us into  automatically conferencing all of our citations, so that we have time, then, to look at each citation.  When we get citations, we investigate a citation just like an accident.  You know, we want to find out what led up to that citation and why did we get it.  
		Sometimes that takes a little bit of time.  Employees may be on vacation.  You may have -- You know, your foreman may not be available.  He may be on another shift.  Sometimes that takes some time.  So, I would hate to see us get into a situation where we're automatically requesting conferences just to preserve our right to conference, you know, and then later withdraw it.  That's just going to occupy more of MSHA's time to schedule them and all of that.  Again, just kind of beating a dead horse here, but we would like to see that at least, at  minimum, maintained at the ten days, and if not, increased to the fifteen-day time period.  I will just conclude real quickly that the other gentlemen have already addressed the other points that I had identified in my comments, and we will also be preparing some written comments before the 23rd.  But, again, this relationship between industry and MSHA, in my opinion, has really come full circle since I have been involved with the Agency for the last twenty years.  When Part 46 was implemented, it just seems like everybody had -- Well, my opinion -- Let me state it this way:   I always tell my mine superintendents that compliance is the minimum part of safety.  We have to comply with the regulations, but compliance is not safety.  Safety involves much more than just complying with the regulations.  Through our training, our education and, quite frankly, by insisting that we have good management, that's the number-one issue.  The relationship between -- I can't speak to coal, because I'm not in the coal industry, but particularly in the aggregate industry, the relationship between MSHA and the industry, particularly over the last ten years, in my opinion, has contributed more to the reduction of those numbers than anything else.  We're focusing on safety.  Compliance, yes.  Compliance is still important, but I think we are now really targeting how we reduce accidents, and that's what this whole system is about.  So, I would like to say that we do have some concerns that with the increase in the penalties, particularly the items that I mentioned, and it could result in spending more of our time just arguing over citations and less time being able to concentrate on safety.  After all, the bottom line is that we don't want anybody to get hurt.  So, does anyone else have any questions?  
		MS. SILVEY:   Does anyone have any questions?
	[No Verbal Response]
		MR. NEELS:   Thank you.  
		MS. SILVEY:   Thank you.  We appreciate it.  Next we have John Griesemer with Springfield Underground, Inc.  
		MR. GRIESEMER:   Good morning.  My name is John Griesemer.  I'm Vice President of Springfield Underground.  We are an underground limestone mining operation in Springfield, Missouri with sixteen miners, and we also have a division in Joplin, Missouri with eleven miners.  
		I guess I had some comments and will be submitting written comments, but I guess I would ask the panel, a lot of what I have to say has been said.  I guess I find it a little bit interesting that those of us that didn't talk beforehand are coming up with very similar comments.  
		Is it a waste of your time for me to continue with some of those remarks?
		MS. SILVEY:   No.  
		MR. GRIESEMER:   All right.  I just don't want to waste your time.  
		MS. SILVEY:   We heard some of the comments earlier.  We've heard some of the comments before.  
		MR. MATTOS:   Some of the comments, if they're said often enough, might stick.  
		MS. SILVEY:   You might want to make sure, so that some of my panel members might listen attentively. 
		MR. GRIESEMER:   Springfield Underground is an aggregate mining company that has been in business for over sixty years.  We're family owned.  We are fairly small, in our opinion.  We strongly support a safe work environment for our miners, for their safety and their health.  I would reiterate what Jerry said.  It wasnt in my prepared comments, but we look at MSHA as a compliance, and we look at safety as something far beyond MSHA.  
		I'm in the situation where I am part of the family ownership of the company.  I know most of the employees, their families and their kids.  So, safety is something that is not just a number with our insurance company, which we are very proud of.  To me, it's names, faces, kids on the baseball teams we support.  I mean, this is a very personal issue with us, safety is.  It's not a federal regulation and coming from Capitol Hill.  
		Along our line of our commitment to safety and health is working with many different agencies, federal agencies to promote the safety and health of miners nationwide.  Most recently, NIOSH was on our property doing a pillar survey, trying to improve safety of underground limestone.  We worked with MSHA on the DPM at the test site, among others.  In addition to working with those Government agencies, we work with trade associations and National Stone, Sand and Gravel, the Missouri Limestone Producers Association.  
		It was through our association with National Stone, Sand and Gravel that we were one of the first companies to sign on with the MSHA Industry Joint Alliance on Safety that MSHA did with NSSGA.  We believe strongly that the best approach to a safer workforce is to the -- is proactive safety programs and not necessarily punitive programs.  I would echo what has been said and talked about.  The cooperative atmosphere has been very beneficial, in our opinion.  Our understanding, as a member of that Joint Alliance, was that MSHA would leverage knowledge to the mining community and Government agencies to promote the safety and welfare of miners.  It's been said before that we believe many of these rules fly in the face of that joint cooperation.  The proposed rule and its recommendations will bring back, in our opinion, a more adversarial environment between industry and MSHA inspectors and is likely to reverse some of the cooperative gains we've made over the years.  It is not clear to us that Congress intended MSHA to increase penalties for minor violations, but that's exactly what's being proposed.  We believe that, as Jerry just stated, we will be conferencing more citations under the proposed rule, and especially the elimination of the Single Penalty Assessment.  
		The previous incentives to react quickly and fix a condition has been stated while the inspector is still on the property has been drastically reduced and could make some changes in our reaction time.  Also, as I stated, the time line reduction from ten days to five days, we believe, is a significant change.  I believe, as was said earlier, too, a clarification on workdays or calendar days would be helpful, unless I just missed that somewhere.  The problem with a company like ours that has other divisions, as some of these other companies do that are regulated by OSHA, is you get two different -- Out of the Department of Labor, you get one instruction from one side to your left hand, and your right hand is covered by MSHA, and you've got different instructions.  So, we would propose that MSHA consider a fifteen-day time line, which is what OSHA has.  With regard to the changes in the special assessment criteria, I understand what you said about, actually, the intent was to reduce the number of special assessments.  I guess our interpretation was that it would significantly increase those.  I guess it's a matter of interpretation and intent.  We believe the current methodology, although not perfect, establishes clearer boundaries and guidelines to simplify implementation.  
		You asked for comments on the particular weight of the controlling entity.  Even though we are a  small company, as I mentioned, we have businesses that are not covered by MSHA, real estate development, areas that would not be appropriate in using the controlling entity to determine -- well, the point weighting.  I'm sorry.  We would respectfully request that you keep the Single Penalty Assessment, as I think others have mentioned.  Silvey, you asked for specific instances  in reviewing citations that we received over the last couple of days, and I would agree with you that you never want to admit you're guilty, but I will say that  we have had citations that, when we received them, you say you think there's a difference of opinion with the inspector, but the way the slip, the ticket is written, you say to yourself it's a single penalty and, you know, we're going to take it as a learning experience.  As Jerry said, we investigate those, and we use it as a learning experience.  We pay the single penalty, and we move on.  Elimination of that, I think, will change our attitude on a lot of those.  Let me give you some specifics we've had in the last two years.  A housekeeping citation, it was on dust buildup inside of our plant.  Our plant is not occupied when it's running.  It is inside of a building.  It is run by computer from a remote location that monitors the plant.  So, we did not feel that a housekeeping citation was warranted for an area that is not accessed, except once a week for maintenance, and at that time, they are responsible for getting safe access.  It was a non S&S single penalty, and we did not fight that.  In the future, I would see it differently to where we would conference that and take it to a different level.  
		The other one, we received a citation for a dirty outhouse.  It is a situation where the chemical -- The company that cleans the chemical toilets was there the day before the inspector.  We had a record of that, and employees essentially sabotaged the toilet.  During the inspection, we received a citation for that.  Unfortunately, we have video cameras in the area, but it was just outside of the range of those video cameras.  
		That's not one -- You know, that's one of those where you say, okay, what's the safety?Yeah, I agree that it's a health problem, but somebody did that to their own toilet, and the company is cited for it, and you get a Single Penalty Assessment.  You use it as a learning experience, and you go on.  Under different rules, I don't know.  I mean, it's one of those that is an annoyance, and you have got to make a judgment call.  I'm just saying that the changes in the rules are going to change how we view those.  The other item in the law that I don't like, but I'm not sure you have anything to do with it, but the way the law is written, it assumes I go to work knowing there's violations on my property, and it assumes that by increasing the penalties, I, as the owner/operator, is going to change what I do about those violations.  		You know, that assumption is insulting to an operator such as myself, that there are violations on my property today that I know about and I'm not fixing them because there's not a monetary incentive from MSHA to fix those.  As I've said, that's probably coming from Capitol Hill.  That's more of an attitude of Congress than it is yours, but it is insulting, as a small business operator, for that attitude to permeate down through the regulations, and I believe that's what we have changed in our cooperative relationship with MSHA over the last several years.  
		You've addressed inspection days.  That was one of the questions I had.  One of the differences I see, though, between our two operations, one being a surface operation and one being an underground, is the days that the inspector is there.  They spend a lot more days on the underground than they do the surface operation.  I don't know that that does a good job of differentiating between the two, but I will leave that up to you to consider.  I don't know that I have a solution to that.  Thank you for allowing me to appear today, and as other speakers have said, I feel that these opportunities to express our side of the story are beneficial.  If you have any questions, I would be happy to answer them.  
		MS. SILVEY:   I don't have any questions, really.  Just on the issue of the single penalty, and we've got a lot of that.  That's why I revised my opening statement to make some reference to the single penalty.  We've gotten a lot of comments on the single penalty.  
		I mentioned that at the earlier hearing.  I mentioned at the earlier hearing that the -- And I won't prolong this, either.  
		Some of you said the single penalty for the category of the non S&S violations, those not reasonably likely to result in reasonably serious injury or illness, but those violations can be sort of a gradation of violations.  They can probably be, like you said, you  know, broken light bulbs, toilets, and then there can be some that are sort of more safety oriented, but not yet S&S, but I think they can be in the category.  I think, so that everybody knows, that it was with that thought in mind that we developed this proposal.  Some of the non S&S violations can be in the category that, if left uncorrected, one could probably reasonably conclude that they might, then, in the future sometime, left uncorrected, lead to S&S violations.  So, those are the ones that we probably would like to see an increased focus on.  I'm sure you would like to see an increased focus on.  As you just said, and everybody who's testified, your commitment is to safety.  You don't want to see any violations, S&S or non S&S.  
		So, it was those, probably, in that category that would lead, like I said, if left uncorrected, would turn into S&S violations, and thats where we clearly would like to hope to show some increased focus.  You all have said to me, there's different ways to kind of approach something, and we've gotten some of your comments.  Thank you very much.  Next we have Ed Elliott.  He's with the Rogers Group.  
		MR. ELLIOTT:   My name is Ed Elliott.  I'm Director of Safety and Health for Rogers Group, Incorporated.  We're a mining and road construction company with our corporate headquarters in Nashville, Tennessee, with operations in Tennessee, Alabama, Kentucky, Indiana and Arkansas.  We are a privately-held company in the mining business since 1908.  I want to thank MSHA for providing this forum to receive comments on the proposed criteria and procedures for proposed assessment of civil penalties.  The time available to review the rule and the supporting documents are really insufficient to adequately respond, but the following are comments I wish to submit:   
		Since the recent disasters in the underground coal industry, primarily the Sago tragedy, there's been a concerted effort to seek out the cause of such a senseless loss of life.  In the sincere effort to find the root cause, I believe there has been, unfortunately, an equivalent effort to find someone to blame.  Many people, unfamiliar with the mining industry, have sought to blame the operating company, defective safety equipment, training methods and, yes, even MSHA.  In my twenty-six years in the mining industry, five of which were in surface coal mining, I found that during the emotional time of a tragic event, it is not easy to separate fact from the reactions normal to such an event.  People close to the event are greatly affected by what has happened.  In many instances, very sincere and dedicated people draw conclusions too rapidly in order to try and make some sense of what happened.  I believe that this rule, while honorable in intent, tries to make dramatic and far-reaching changes in the current rule that while some might say is deficient, has had a part in the reduction of fatalities in mining over the life of the rule.  I recognize that Congress passed and the President signed into law the MINER Act of 2006 with the intent to improve miner safety and health.  But in my opinion, the agencies charged with implementing this Act must proceed, without emotion, for the details of any rule coming from this MINER Act, can, and in many instances, do have far-reaching impacts not fully considered.  
		In the summary of the proposed rule, MSHA states that, and I quote:   These changes are intended to induce greater mine operator compliance with the Mine Act and MSHA safety and health standards and regulations; thereby, improving safety and health for miners.  
		I contend that quite the contrary.  This rule will diminish the focus on the elements that have the greatest opportunity to reduce injuries and fatalities and, instead, force mine operators to fight what will be seen as improperly-cited violations and unfairly-assessed penalties.  
		It is important to separate the requirements of the MINER Act of 2006 and the other elements of the proposed rule.  
		To the best of my ability, I surmise that the Act requires for these four penalty changes: First, a penalty of five thousand to sixty thousand for failing to report a serious event, two thousand dollar penalty for a 104(d)(1) citation, a four thousand dollar penalty for a 104(d)(2) citation, and last,  a penalty of not more than two hundred and twenty thousand dollars for flagrant violations.  The proposed rule we are reviewing today is clearly a great deal more than this.  I do not disagree with the need to evaluate the current penalty criteria, but to do so with such haste is clearly improper.  The premise stated earlier for this rule of inducing compliance with the rule is theoretical at best and should never be the primary purpose of changes to a rule.  There are operators that certainly should be held accountable for their failures to comply with regulations and their overall disregard for safety and health, but I contend MSHA already has in place mechanisms that are dealing with these situations.  I disagree with the statement in the proposed rule that it reflects a more appropriate and effective approach to achieving the Congressional purpose with respect to civil monetary penalties.  I do not believe that the MINER Act gives MSHA such a broad mandate under their December, 2006 time constraint.  In order to accurately achieve the wishes of MSHA in this rule, there needs to be extensive review of citations, injury history and mining fatalities to determine the relationship of one to the other.  If this were done, it may bring us to the conclusion that some citations may have no positive effect on the safety and health of miners; yet, inordinate amounts of time are spent in these areas.  I admit that I do not know the answer, but I also contend that MSHA has not demonstrated that my conclusion is incorrect, either.  I wish to now comment on specific points of the proposed rule.  First, history of violations for inspection day should be changed to reflect the practical application to mine operators.  It is logical and common to be able to find more violations at a larger operation.  This in no way would indicate less safety attention, but only greater exposure.  In the proposed rule, withdrawing the single penalty citation would subject the operator to greater penalty for their inclusion in the regular assessment process. 
		At the least, non S&S citations should not count in calculating the history of violations per inspection day.  
		The definition of an inspection day must be clarified and should be any day or part of any day that an authorized representative is involved in the inspection process or where the facility being visited is subject to a citation.  Just to deviate a moment from my written comments, I think there are operations that may have multiple shifts.  Therefore, looking at any one day, it should be clarified.  In my estimation, it should be eight hours or less that would classify as an inspection day.  I think even the MSHA workday is classified that same way.  I think an operation that would have multiple shifts, if the inspector were to be on those shifts in a twenty-four-hour cycle for more than eight hours, I believe they should count as additional inspection days.  In addition, the proposed rule introduces anew criteria of repeat violations of the same standard.  
		In the metal and nonmetal regulation, there is great latitude in how the inspector can interpret a violation, and in some cases, violations could be interpreted under several different standards for the same event, or several varied violations could be cited under the same standard.  There should not be penalty points for these criteria.  In the likelihood points table, the proposed penalty points are increased without clear reasoning and contrary to the similar increases in other areas.  In particular, if an injury is unlikely, according to that table, then there should be no penalty points.  The decrease in good faith credit demonstrates the reasoning behind this regulation is to punish the operator, not encourage speedy correction of hazards, as stated.  The thirty percent reduction for good faith should be retained.  Requirements to receive this credit could be expanded to incorporate other elements, such as having a written safety program or daily safety meetings.  The deletion of single penalty provision will not achieve the stated purpose, because the single penalty citations are generally for violations that have little or no impact on employees' safety and health.  In fact, many of the single penalty citations can be for simple administrative mistakes or extremely remote hazards.  Special assessments should be clearly defined as to how and what they will be applied to.  Doing otherwise would only bring about greater inconsistency in applying the rule, or it could actually open up an increased use of this provision.  And, again, deviating from my written remarks, as Mr. Mattos brought out, I think the point would be to reduce the amount of use of this.  I think, as has been stated earlier, there can be significant different interpretations from district to district.  If a district manager were to determine that they wanted special assessment applied to one particular aspect of a regulation, whereas another district did not, I think it could open up for potential use of this in an inappropriate way or an inconsistent way.  		Prompt notification penalties, this provision of the MINER Act has troubled me from the moment I heard of it.  I know MSHA has all good intentions in wanting to receive this almost instantaneous notification, but I've asked others, as well as myself, what can MSHA do to help at that moment.  If I were a miner in distress, I would want the personnel most trained to help me contacted in that order.  I am not aware of any emergency response equipment at an MSHA office that would be helpful to almost any emergency event at a mine, and in particular, in the metal -- excuse me -- the nonmetal environment.  
		I would like to learn, at some point, a clearer definition of how MSHA determines that the fifteen-minute notification would enhance the safety of miners.  Regarding Safety and Health conference time limit, this proposal to reduce to five days does not allow sufficient time to evaluate citations to determine if there should be a conference.  In some cases, the internal investigation of the events surrounding the issuance of a citation could take days, and if testing might be needed, the results may exceed those days, five days.  Excuse me 
		The current ten days is insufficient -- excuse me -- is sufficient, but should be clarified as to business days or calendar days.  In fact, if the time limit were reduced to five days, I would recommend that consideration be given to anyone receiving a citation to automatically request a conference in order to protect our rights to do so until adequate internal review is completed.  The dramatic increase in the penalty amount would encourage this approach, in any event.  MSHA, also, should not restrict the ability of the operator to have a conference and, therefore, should remove the sole discretion option, as listed in the regulation, of MSHA even allowing a conference.  Regarding the economic assessment, this rule is penalizing larger mines and larger controlling entities more than smaller mines and controlling entities for the same violation, in my estimation, anti- competitive in nature.  In coal mining, many of the modern operations are very large, and their customer base is made up of very large power companies or manufacturing plants with long-term contracts.  In the nonmetal mining industry, most of the operations are small and are competing equally with other small operators that may be owned by a small controlling entity.  
		We are competing on a daily basis with other operations for the same business.  In many cases, the customers request bids, and if we are penalized more for a similar violation, the cost that goes into the price of our product goes up, and then the smaller operation could actually have an unfair advantage.  
		Violations should be penalized no different, regardless of size of the mine or controlling entity.
		In addition, a large company may have small operations that could be substantially impacted by this penalty and could affect the decision to continue operation.  With respect to smoking or carrying smoking materials, this fine should be raised to a thousand dollars to more accurately reflect the hazard involved in the violator and fellow employees.  MSHA inspectors go out in the real world of mining every day to help operators improve safety and health, and they are dedicated to their jobs, but they  are also human and subject to all the human frailties, as are we're all.  There are times that inspectors assume the worst and write citations based on their assumptions.  Sometimes they're right, and sometimes they are wrong, but they are given wide latitude in issuing citations in the accompanying determination of its seriousness.  The operator has very little they can do to alter the mind-set of the inspector after they have drawn their conclusions.  I have seen many different interpretations of the regulations from field to field office and from district to district, not with the intent to have differing interpretations, but as the regulation is somewhat vague, the inspector is left to use their judgment as to the interpretation and, naturally, there's going to be differences in the interpretation of those rules.  
		I do not wish to think of MSHA as an adversary when it comes to safety and health, but it seems that we're headed down the road where MSHA is saying that regardless of what you do to promote safety and health, if you violate a standard, we're going to punish you, and we do not care about the other things you do to improve safety.  I encourage MSHA to withdraw the parts of this rule that are not specifically required in the MINER Act of 2006 and do as OSHA, your sister agency, has done and convene an advisory panel to work on developing a Part 100 Rule that would involve all constituents in crafting a standard that would improve safety and health.  
		That concludes my written remarks, but I would like to, as there have been some comments made from the panel and others in talking, I would like to point out a few things that I would like to add.  First, in talking about -- I know, Silvey, I think you mentioned about the Mine Act, and it allows you to have some differentiation in size of operations as far as the penalty amount, and unless I'm incorrect, I know what it says.  It says, I believe, in the Act that we do not, or that MSHA should not do anything that would harm an operator's ability to remain in business.  
		I don't know, and I would be curious if you could give me the area that it might say that just because there's a larger operator, that they should be penalized more for being a larger operator.     
		MS. SILVEY:   No.  What it does, it doesn't say that you penalize a larger operator more.  When you say penalize, I prefer to use the term that you compute a penalty for a larger operator more.  
		MR. ELLIOTT:   Okay.  
		MS. SILVEY:   Because as I started out by saying, the Act was not intended to be punitive in nature, but clearly remedial.  
		Now, what it does say is that it provides six criteria and that in determining the amount of the penalty, MSHA takes into consideration six criteria.  And in we -- no pun intended, but to develop the criteria for this criterion, one of the things that we do is, we use some judgment, and you might disagree with that, and hence, that's why we issued this proposed rule.  So, in doing so, one of the criteria is size, and what we did is, as I started out, we developed this point table, and we assign zero points for the very smallest operations, and then we went up to twenty points, and at the very top, two million tons of coal and something, which was the highest point.  So, it's not a matter of, per se, computing the highest, the most highest points for large operations.  It is just that in computing the amount of the penalty, coming up with the amount of the penalty and taking into consideration the criteria, we developed some points for size, with the smallest points to the smallest operators for size, and the largest to the largest operators.  Now, if you were to come to me with a particular citation, and the citation had -- the inspector had marked gravity the same on the citation, negligence the same, or let's just say the highest level of gravity occurred, the highest level of negligence and had marked gravity, negligence, history -- Let's just say hypothetically, because history is not going to be the same for a large and a small operation, but relatively speaking, history is going to be the same.  Then the penalty is going to be the same in those respects, where the smaller operator -- Well, I'm not going to sit here before you and say differently, but where the smaller operator will get a break is in size, because the Congress said to MSHA, you, MSHA take size into consideration, and that's why the proposal is structured like that.  
		But we've heard comments, a wide variety of comments.  We've heard comments from small operators saying, you know, they shouldn't get penalties, and they are small.  Yet, we've heard comments from large operators saying that the structure of the proposal is discriminatory and that we're giving small operators a break.  But I say to you today, before I close this hearing, we do have to take size into consideration.  So, it's just a matter of how we do it, and that's why we structured it like that.  
		MR. ELLIOTT:   And I do appreciate that, but I think that, also, when you would look at doing some research about injuries and violations, that the small operator, in some instances, may need greater motivation.   And I think when you also look at a violation, if there's not a guard, and the basic premise, as it states in the beginning summary about inducement for greater compliance, that not having a guard on at a small operation could be just as much a fatality, cause a fatality as in a large operation.  Therefore, the premise you're using for inducement would seem that that inducement should be the same for a large and a small operator.  
	MS. SILVEY:   And that was why I took my analogy out and said that if the situation were the same, and take your guarding one, the inspector should be citing gravity the same.      
		MR. ELLIOTT:   Okay.  
		MS. SILVEY:   If it was a one-person operation or a two-hundred-and-fifty-person operation,  it should be citing gravity the same, negligence.  It just depends.  
		MR. ELLIOTT:   No, I understand.  
		MS. SILVEY:   You know, I'm saying that all other things being equal, because the negligence depends on the situation at the moment.  The negligence might not be the same, but I am just saying that assuming that all the factors are the same, then the points for those should be the same.  
		MR. ELLIOTT:   And it's very difficult.  If you have a smaller operation, as I say, the chances are that they're also going to have more citations, just because of, say, a larger operation.  If you have a very small operation, the chances are that you just wouldn't have as many things that may be able to go wrong, with all things being equal.  So, in some ways, there's a 
natural --  there is a natural affect that causes a larger operation to receive more penalties, and without having to add that increased multiplier, that's a factor.  In our operations, we have some that even as small as two people, three people are running that  operation, and we may be a larger company, but that two-person operation or that three-person operation is competing with the very small company that's a  two-or-three-person operation.  We're trying to get people to come in the gate and buy that sand and gravel from us.  
		So, having those citations, and they're on a very, very low margin, and when you start factoring in and multiplying the penalties, then it puts them at a  competitive disadvantage with that smaller controlling entity down the street that's actually competing for the same product.  
		So, it is just -- It's somewhat different.  When I was in coal mining, we had a long-term contract with a power company.  We weren't worried.  No one, nobody, in the five years that I worked in that coal company, came in and wanted to buy some coal for their house, but as far as the sand and gravel operation, that happens.  The small person buys a few tons here or there.  So, those penalties can have a significant economic impact.  
		I don't have anything else.  If there would be any questions, I would be glad to answer them.  
		MS. SILVEY:   Does anybody have any questions?
	[No Verbal Response]
		MR. ELLIOTT:   It is always good to come up at this time.  It's closer to lunch.  
		MS. SILVEY:   Okay.  Well, thank you, Mr. Elliot.  
		Is there anybody else who wishes to speak? I hesitate to ask that, because if there is, I think I'd have to have a break here.  But is there anybody else here that wishes to speak?
	[No Verbal Response]
		MS. SILVEY:   That's not meant to deter you from speaking, either.  
		Well, if there is nobody else who wishes to speak, I would like to reiterate that the primary purpose of this hearing, as all of you have said, uniformly said today, is to improve health and safety of the mines and, therefore, to assure that every day, every miner goes home, every shift, every day in a safe and healthy manner.  To the extent that you all have testified and you all have said to us that you have cooperated with MSHA, we appreciate that, and we know that we can count on you doing that in the future.  We would just say to you that as we go forward here from the hearing today and the remaining two hearings in Charleston and Pittsburgh, that we will be mindful of the comments and the testimony that you gave us.  We appreciate the time that you took to come out to say these things to us.  
		For those of you who did not make testimony, but came here to appear at this hearing and to show us that you have an interest in these proceedings, we appreciate that, too.  So, on behalf of MSHA and our panel here, I would like to say that again and give our thanks to you.  
		This hearing is now concluded.  
		(Whereupon, the hearing was concluded at 12:00 p.m.)

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