3338 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

DEPARTMENT OF LABOR

Employment Standards Administration

20 CFR Parts 718, 722, 725, 726 and

727

RIN 1215–AA99

Regulations implementing the Federal

Coal Mine Health and Safety Act of

1969, as Amended

AGENCY: Employment Standards

Administration, Labor.

ACTION: Proposed rule.

SUMMARY: The Department of Labor

proposes to amend the regulations

implementing the Black Lung Benefits

Act. Most of the affected regulations

govern the processing and adjudication

of individual claims filed by former coal

miners and their surviving dependents,

including the medical criteria used to

adjudicate the entitlement of those who

file claims and the criteria used to

determine which of the miner’s former

employers will be liable for the payment

of benefits. In addition, the Department

proposes to eliminate outdated

regulations setting forth criteria for

approving state workers’ compensation

programs; to discontinue the annual

publication, in the Code of Federal

Regulations, of the interim criteria

governing claims filed prior to April 1,

1980; and to revise the criteria

governing the responsibility of coal

mine operators to secure the payment of

benefits to their employees.

DATES: Comments must be submitted on

or before March 24, 1997.

ADDRESSES: All comments concerning

these proposed regulations should be

addressed to James L. DeMarce,

Director, Division of Coal Mine

Workers’ Compensation, Room C–3520,

Frances Perkins Building, 200

Constitution Ave., N.W., Washington,

DC 20210.

FOR FURTHER INFORMATION CONTACT:

James L. DeMarce, (202) 219–6692.

SUPPLEMENTARY INFORMATION: The

Department last amended the

regulations implementing the Black

Lung Benefits Act, 30 U.S.C. 901 et seq.,

in 1983, more than thirteen years ago.

Since then, litigation before the various

U.S. courts of appeals and the Benefits

Review Board has resulted in the

clarification of many substantive areas.

Moreover, the Office of Workers’

Compensation Programs’ experience in

administering the program during this

period has resulted in a variety of

suggestions for change with the goal of

helping to improve services, streamline

the adjudication process and simplify

the regulations’ language. Thus, the

Department proposes numerous changes

in order to streamline, update and

clarify these program regulations.

Summary of Noteworthy Proposed

Changes

Evidentiary Development

The proposed regulations contain a

limitation on the amount of

documentary medical evidence parties

may submit. The designated responsible

coal mine operator or the Director,

whichever party is liable, and the

claimant are limited in their affirmative

presentations to two complete

pulmonary evaluations or consultative

reports a piece. Documentary rebuttal

evidence is limited to one interpretive

opinion with respect to each part of the

pulmonary evaluation submitted by a

party’s opponent. See proposed

§ 725.414.

The Department proposes these

changes in order to ensure that

eligibility determinations are based on

the best quality evidence submitted

rather than on the quantity of evidence

submitted by each side. Currently, in

establishing their eligibility to benefits,

claimants must confront the vastly

superior economic resources of their

adversaries: coal mine operators and

their insurance carriers. Often, these

parties generate medical evidence in

such volume that it overwhelms the

evidence supporting entitlement that

claimants can procure. The proposed

changes limiting evidentiary

development attempt to make more

equitable the adjudication of black lung

claims and reduce the costs associated

with these cases.

The proposed regulation also

fundamentally restructures the claims

adjudication process by focusing

evidentiary development at the district

director level. The regulation requires

all parties to develop their documentary

medical evidence and submit it to the

district director for consideration. Once

a claim is referred for a hearing before

the Office of Administrative Law Judges,

additional documentary medical

evidence will be admitted into the

record only on a showing of

extraordinary circumstances or if the

claimant has not been provided with an

adequate complete pulmonary

evaluation by doctors of the

Department’s choosing. The

administrative law judge who conducts

the hearing may permit the parties to

elicit testimony only from a limited

group of witnesses, including any

physician whose report was submitted

to the district director. The judge will

base his decision on a de novo review

of the evidentiary record developed by

the district director and the hearing

testimony. See proposed §§ 725.414,

725.456 and 725.457.

This proposed procedure departs from

current practice by excluding the

admission of most additional

documentary evidence while a claim is

pending before an administrative law

judge. Parties presently often reserve the

active development of medical evidence

until a claim is referred for hearing.

Permitting additional evidentiary

development before the administrative

law judge was logical when significant

delays occurred between the district

director’s decision and the hearing

before the administrative law judge.

Such delays no longer occur in a

statistically significant percentage of

claims. Consequently, the practical need

for permitting evidentiary development

at the hearing stage has disappeared.

The Department believes that these

proposed procedural changes requiring

evidentiary development before the

district director will encourage prompt

and complete evidentiary development

at the earliest stages and will therefore

allow the Department to conduct a

thorough and meaningful initial

adjudication of each claim. The

Department believes that the fair,

efficient and expeditious adjudication of

claims is a desirable objective which

can be promoted by limiting the amount

of medical evidence developed and

encouraging all parties to participate

actively at the earliest stages of the

process.

Identification of Responsible Operators

The proposed regulations provide that

a district director may name one or

more ‘‘potentially liable operators’’ from

among a miner’s former employers. The

potentially liable operator that most

recently employed the claimant will

generally be the responsible operator

liable for the payment of benefits. The

proposed regulations afford the district

director considerable flexibility,

however, in notifying potentially liable

operators; they may be notified seriatim

after the district director evaluates the

response from the miner’s most recent

employer or does not receive any

response. If a potentially liable operator

contests its identification, it must

submit documentary evidence

supporting its position to the district

director. In cases involving difficult

responsible operator identification

issues, the district director may retain

more than one potentially liable

operator as a party to the case. See

proposed §§ 725.407 and 725.408.

The district director will choose a

responsible operator from among the
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3339

identified potentially liable operators

and will notify the parties of this

determination in his initial findings.

The designated responsible operator

must respond to the notice of initial

findings within 30 days and must

specifically indicate whether it agrees or

disagrees with the initial finding of

liability. See proposed §§ 725.410,

725.412. In the event further

adjudication of the claim is required,

the district director may retain as parties

to the case other potentially liable

operators in order to preserve the

Department’s right to compel the

payment of benefits by the responsible

operator ultimately determined to be

liable for the claimant’s benefits. See

proposed § 725.413.

To ensure that the claimant is not

overwhelmed by operator-developed

medical evidence, however, the

proposed regulations limit all

potentially liable operators and the

designated responsible operator to a

total of two pulmonary evaluations or

consultative reports as an affirmative

case. Because all of the named operators

have an identical interest with respect

to the claimant’s eligibility, the

Department does not believe that

unfairness will result from limiting the

total evidence submitted. The

designated responsible operator will

have the responsibility and, indeed, the

obligation, to develop the operators’

case in chief on behalf of all named

operators. Any named operator, other

than the responsible operator, must

request the district director’s permission

in order to schedule the claimant for a

medical examination. This permission

may be granted only upon a showing

that the responsible operator has not

undertaken a full development of the

evidence. In no event will the claimant

be required to undergo more than two

pulmonary examinations by the parties

opposing his eligibility. See proposed

§ 725.414.

The proposed responsible operator

regulations also assign both the Office of

Workers’ Compensation Programs

(OWCP) and the designated responsible

operator burdens of proof. Under

proposed § 725.495, the Department

bears the burden of proof to identify the

responsible operator initially found

liable for the payment of benefits. In

order to carry this burden of proof,

OWCP must establish that the

responsible operator is a ‘‘potentially

liable operator,’’ i.e., that it was an

operator after June 30, 1973, that it

employed the miner for at least one

year, that at least one day of that

employment occurred after December

31, 1969, and that the miner was

exposed to coal mine dust while

working for the operator. In addition, in

any case in which the designated

responsible operator is not the miner’s

most recent employer, the record must

include a statement that OWCP has

investigated its files and has determined

that it has no record that a more recent

employer insured its liability under the

Act, or was authorized to self-insure

such liability.

Once OWCP has met its burden of

proof, the burden shifts to the

designated responsible operator. The

operator may avoid liability for the

claim only if it establishes: (1) that it is

not financially capable of assuming

liability for the claim; or (2) that one of

the miner’s more recent employers

meets all of the criteria for a potentially

liable operator. The burden imposed on

the designated responsible operator

under this second alternative includes a

showing that the more recent employer

is financially capable of assuming

liability. See proposed § 725.495.

If the designated responsible operator

carries its burden of proof and

establishes that it was incorrectly

identified and OWCP has failed to name

and retain as a party the coal mine

operator ultimately found liable as the

responsible operator, the Trust Fund

will bear liability for the claim. In such

a case, OWCP will make no attempt to

name a new responsible operator and

force the claimant once again to

establish his entitlement to benefits. See

proposed § 725.407(d) allowing the

district director to identify and notify a

responsible operator only before a case

is referred to the Office of

Administrative Law Judges.

Civil Money Penalty

The proposed regulations contain new

provisions implementing the Act’s civil

money penalty provision, which directs

the assessment of a penalty of up to

$1,000 per day against operators that fail

to secure the payment of benefits, either

by purchasing commercial insurance or

qualifying as a self-insurer. 30 U.S.C.

933(d). The proposed regulations

establish criteria and streamlined

procedures to be used in assessing

penalties. They provide notice of the

Department’s intention to minimize the

financial burden that uninsured

operators currently place on those

operators in compliance with the Act’s

security requirements and on the Black

Lung Disability Trust Fund. See

proposed 20 CFR part 726, subpart D,

§§ 726.300–726.320.

The proposed regulations provide a

graduated series of possible penalties

based on a set of criteria, including the

operator’s size, its prior notice of the

Act’s insurance requirements and the

operator’s action, or inaction, following

this notification. See proposed

§ 726.302. After receipt of a notice of

penalty assessment and entry of a timely

notice of contest, an operator may

request a hearing before the Office of

Administrative Law Judges. See

proposed § 726.307. The ensuing

decision will address whether the

operator has violated the Act’s

insurance requirements, whether the

individuals identified by the Director as

potentially severally liable for the

penalty were in fact the president,

treasurer or secretary of the corporation

during the relevant time period and,

finally, the appropriateness of the

penalty assessment. See proposed

§ 726.313. The Director or any party

aggrieved by a decision of the

administrative law judge may petition

the Secretary for review, which will be

conducted using a substantial evidence

standard. See proposed §§ 726.314,

726.318.

The proposed regulations also impose

an additional requirement on selfinsured operators. They require that

such operators continue to secure the

payment of benefits to their employees

even after the operator has ceased

mining coal. This additional

requirement is necessary given the

limited amount of security typically

required of operators who self-insure

and the prolonged time periods after

coal mine employment has ceased

during which miners may file claims for

benefits. See proposed § 726.114(c).

Treating Physicians’ Opinions

The Department proposes a new

paragraph (d) of 20 CFR 718.104, the

regulation governing reports of physical

examinations. The proposed paragraph

would give certain treating physicians’

opinions controlling weight in

determining whether the miner is totally

disabled or died due to

pneumoconiosis. The proposed

language would mandate that, when

weighing a treating physician’s opinion,

the factfinder must consider the nature

and duration of the relationship

between the miner and the physician,

the frequency and extent of the

physician’s treatment, and the

credibility of the doctor’s opinion in

light of his reasoning and

documentation. The factfinder must also

consider the opinion’s consistency with

the other relevant evidence, and the

doctor’s training and specialization.

Waiver of Overpayments

The Department proposes amending

§ 725.547(a), which addresses the

applicability of overpayment provisions

to coal mine operators and their
3340 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

insurance carriers. The proposed

regulation would make available to all

overpaid claimants the provisions

governing waiver of recovery of an

overpayment incorporated from the

Social Security Act, 30 U.S.C. 923(b),

940, incorporating 42 U.S.C. 404(b).

Currently, only a claimant who

receives an overpayment from the Black

Lung Disability Trust Fund may be

relieved of his repayment obligation.

Such a claimant is entitled to waiver of

recovery of the overpayment if he can

demonstrate that permitting recovery

would ‘‘defeat the purpose of the Act’’

or ‘‘be against equity and good

conscience.’’ Only those individuals

who were not ‘‘at fault’’ in creating the

overpayment are eligible for waiver. The

Department has concluded that these

waiver provisions should be available to

all claimants, including those who are

overpaid by operators and insurance

carriers. Thus, under the proposed

language, any individual who has

received an overpayment will have the

opportunity to establish that the twopart test for waiver is met.

Establishing Total Disability and Total

Disability Due to Pneumoconiosis

Proposed § 718.204 amends the

definition of ‘‘total disability’’ and

makes explicit the Department’s

position with regard to establishing total

disability due to pneumoconiosis. Both

of these changes reflect the decisions of

numerous courts of appeals. In order to

be found ‘‘totally disabled,’’ a miner

must have a respiratory or pulmonary

impairment which, standing alone,

prevents him from performing his usual

coal mine employment. See proposed

§ 718.204(b). In order to establish

entitlement, the miner must also

demonstrate that his total disability is

due to pneumoconiosis. This showing is

made by establishing that

pneumoconiosis is a substantially

contributing cause of the totally

disabling respiratory or pulmonary

impairment. See proposed § 718.204(c).

Finally, proposed § 718.204(a) also

makes clear that a concurrent disability

due to a nonrespiratory or

nonpulmonary condition will not

disqualify the miner from receipt of

black lung benefits if the miner can also

demonstrate total disability due to

pneumoconiosis.

Additional or Subsequent Claims

The proposed regulations clarify

claimants’ right to file ‘‘additional’’ or

‘‘subsequent’’ claims, those claims filed

more than one year after denial of a

previous claim. See proposed

§ 725.309(d). Under this proposal, the

claimant may escape automatic denial

of an additional claim on the grounds of

the prior denial, by demonstrating that

a change in one of the applicable

conditions of entitlement has occurred

since the date upon which the order

denying the prior claim became final.

The changed regulatory language

codifies the holdings of several courts of

appeals.

The applicable conditions of

entitlement are limited to those

conditions upon which the prior denial

was based. If the applicable conditions

of entitlement relate to the miner’s

physical condition and the new

evidence submitted with the additional

claim establishes a change in at least

one applicable condition, the proposed

regulation contains a rebuttable

presumption that the miner’s physical

condition has changed. Once a change

in an applicable condition of

entitlement is established, none of the

findings made in connection with the

prior claim, except those based on a

party’s failure to contest an issue, shall

be binding in the adjudication of the

subsequent claim, and the claim must

be adjudicated on the merits.

Medical Benefits

Proposed § 725.701(e) provides that in

any claim for compensation for

treatment of a pulmonary disorder filed

by a miner entitled to medical benefits,

there shall be a rebuttable presumption

that the treatment was for a disorder

caused or aggravated by

pneumoconiosis. This amended

regulatory language codifies a decision

of the United States Court of Appeals for

the Fourth Circuit. The presumption

may be rebutted only by evidence that

the specific pulmonary disorder being

treated is neither related to, nor

aggravated by, the miner’s

pneumoconiosis. The proposed

regulation also provides that evidence

that the miner does not have

pneumoconiosis or is not totally

disabled by pneumoconiosis arising out

of coal mine employment, i.e., evidence

which challenges the miner’s

underlying entitlement to medical

benefits, is insufficient to demonstrate

that the specific treatment for which

compensation is claimed is not

compensable. See proposed § 725.701(f).

Explanation of Proposed Changes

The Department proposes to revise

the regulations implementing the Black

Lung Benefits Act, set forth at Chapter

VI of Title 20 of the Code of Federal

Regulations. In order to make all the

proposed changes more easily

understandable, the Department

proposes to re-promulgate Parts 718,

722, 725, and 726 in their entirety. This

action is intended to aid the readers of

the Federal Register, and should not be

construed as inviting comments on any

regulation which has not been

substantively revised. The regulations

within these parts may be divided into

three categories: (1) those which will be

substantively revised; (2) those to which

the Department is proposing only

technical changes; and (3) those which

will not be revised at all.

Substantive revisions

The following regulations are being

substantively revised: § 718.3, § 718.101,

§ 718.102, § 718.103, § 718.104,

§ 718.105, § 718.106, § 718.107,

§ 718.201, § 718.202, § 718.204,

§ 718.205, § 718.301, § 718.307,

§ 718.401, § 718.402, § 718.403,

§ 718.404, Appendix B to part 718,

Appendix C to Part 718, part 722

(entire), § 725.1, § 725.2, § 725.4,

§ 725.101, § 725.103, § 725.202,

§ 725.203, § 725.204, § 725.209,

§ 725.212, § 725.213, § 725.214,

§ 725.215, § 725.219, § 725.221,

§ 725.222, § 725.223, § 725.306,

§ 725.309, § 725.310, § 725.311,

§ 725.362, § 725.367, § 725.405,

§ 725.406, § 725.407, § 725.408,

§ 725.409, § 725.410, § 725.411,

§ 725.412, § 725.413, § 725.414,

§ 725.415, § 725.416, § 725.417,

§ 725.418, § 725.421, § 725.423,

§ 725.452, § 725.454, § 725.456,

§ 725.457, § 725.458, § 725.459,

§ 725.478, § 725.479, § 725.490,

§ 725.491, § 725.492, § 725.493,

§ 725.494, § 725.495, § 725.502,

§ 725.503, § 725.522, § 725.530,

§ 725.537, § 725.547, § 725.606,

§ 725.608, § 725.609, § 725.620,

§ 725.621, § 725.701, § 725.706, § 726.2,

§ 726.8, § 726.101, § 726.104, § 726.105,

§ 726.106, § 726.109, § 726.110,

§ 726.111, § 726.114, § 726.300,

§ 726.301, § 726.302, § 726.303,

§ 726.304, § 726.305, § 726.306,

§ 726.307, § 726.308, § 726.309,

§ 726.310, § 726.311, § 726.312,

§ 726.313, § 726.314, § 726.315,

§ 726.316, § 726.317, § 726.318,

§ 726.319, § 726.320, and part 727

(entire). The substantive revisions to

these regulations are explained in

further detail below.

Technical revisions

In addition, a number of regulations

have been revised to make certain

technical changes. The proposed

regulations substitute the term ‘‘district

director’’ for the term ‘‘deputy

commissioner’’ wherever it appears.

This change is explained in detail at 55

FR 28604–28607, July 12, 1990. The

proposed regulations also add a crossreference to § 725.4(d) to each regulation
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3341

which currently contains a crossreference to part 727. Section 725.4(d)

explains that although the Department

is discontinuing publication of the

interim criteria set forth in 20 CFR Part

727 in the Code of Federal Regulations,

part 727 remains applicable to all claims

filed prior to April 1, 1980. In addition,

certain proposed regulations have been

revised and/or renumbered in order to

conform with the current requirements

of the Office of the Federal Register. The

text of § 725.453A has been

incorporated into § 725.454 as

paragraphs (a), (b) and (c) and § 725.454

has been retitled. The text of § 725.459A

has been incorporated into § 725.455 as

paragraph (d). Section 725.503A has

been renumbered as § 725.504, and

§§ 725.504–.506 have been renumbered

§§ 725.505–.507. Section 725.701A has

been renumbered § 725.702, and

§§ 725.702–.707 have been renumbered

§§ 725.703–.708. Finally, the proposed

regulations correct minor typographical

errors, revise cross references to

subparts of part 725 which have been

redesignated and regulations that have

been renumbered, and conform the

regulations to the current practices of

the Office of the Federal Register. The

Department has included technical

changes to the following regulations:

§ 718.1, § 718.2, § 718.4, § 718.303,

§ 725.102, § 725.216, § 725.217,

§ 725.301, § 725.302, § 725.350,

§ 725.351, § 725.360, § 725.366,

§ 725.401, § 725.402, § 725.403,

§ 725.404, § 725.419, § 725.420,

§ 725.450, § 725.451, § 725.453A,

§ 725.455, § 725.459A, § 725.462,

§ 725.463, § 725.465, § 725.466,

§ 725.480, § 725.496, § 725.501,

§ 725.503A, § 725.504, § 725.505,

§ 725.506, § 725.507, § 725.510,

§ 725.513, § 725.514, § 725.521,

§ 725.532, § 725.533, § 725.543,

§ 725.603, § 725.604, § 725.605,

§ 725.607, § 725.701A, § 725.702,

§ 725.703, § 725.704, § 725.705,

§ 725.707, § 725.708, § 725.711, § 726.4,

and § 726.203. Pursuant to the authority

set forth in 5 U.S.C. 552(b)(3)(A), which

allows federal agencies to alter ‘‘rules of

agency organization, procedure, or

practice’’ without notice and comment,

the Department is not accepting

comments on any of these regulations.

Unchanged Regulations

Certain regulations are merely being

repromulgated without alteration and

are also not open for public comment.

To the extent appropriate, the

Department’s previous explanations of

these regulations, set forth in the

Federal Register, see 43 FR 36772–

36831, Aug. 18, 1978; 48 FR 24272–

24294, May 31, 1983, remain applicable.

The same is true of those regulations to

which the Department is making only

technical changes. The following

regulations are being repromulgated for

the convenience of readers: § 718.203,

§ 718.206, § 718.302, § 718.304,

§ 718.305, § 718.306, Appendix A to

Part 718, § 725.3, § 725.201, § 725.205,

§ 725.206, § 725.207, § 725.208,

§ 725.210, § 725.211, § 725.218,

§ 725.220, § 725.224, § 725.225,

§ 725.226, § 725.227, § 725.228,

§ 725.229, § 725.230, § 725.231,

§ 725.232, § 725.233, § 725.303,

§ 725.304, § 725.305, § 725.307,

§ 725.308, § 725.352, § 725.361,

§ 725.363, § 725.364, § 725.365,

§ 725.422, § 725.453, § 725.460,

§ 725.461, § 725.464, § 725.475,

§ 725.476, § 725.477, § 725.481,

§ 725.482, § 725.483, § 725.497,

§ 725.511, § 725.512, § 725.515,

§ 725.520, § 725.531, § 725.534,

§ 725.535, § 725.536, § 725.538,

§ 725.539, § 725.540, § 725.541,

§ 725.542, § 725.544, § 725.545,

§ 725.546, § 725.601, § 725.602,

§ 725.710, § 726.1, § 726.3, § 726.5,

§ 726.6, § 726.7, § 726.102, § 726.103,

§ 726.107, § 726.108, § 726.112,

§ 726.113, § 726.115, § 726.201,

§ 726.202, § 726.204, § 726.205,

§ 726.206, § 726.207, § 726.208,

§ 726.209, § 726.210, § 726.211,

§ 726.212, and § 726.213.

For purposes of this preamble, ‘‘he’’,

‘‘his’’, and ‘‘him’’ shall include ‘‘she’’,

‘‘hers’’, and ‘‘her’’.

20 CFR Part 718—Standards for

Determining Coal Miners’ Total

Disability or Death Due to

Pneumoconiosis

Subpart A—General

20 CFR 718.3. We are specifically

seeking comment on § 718.3. Paragraph

(c) of § 718.3 was used to support the

‘‘true doubt’’ rule, which provides that

an evidentiary issue will be resolved in

favor of the claimant if the probative

evidence for and against the claimant is

in equipoise. The United States

Supreme Court invalidated the ‘‘true

doubt’’ rule in Director, OWCP v.

Greenwich Collieries, 114 S.Ct. 2251

(1994). The Court concluded that

paragraph (c) failed to define the ‘‘true

doubt’’ rule effectively. It then held that

the rule, as applied by the Benefits

Review Board, contravenes the

Administrative Procedure Act, 5 U.S.C.

551 et seq., by relieving the claimant of

the APA-imposed burden of proving his

claim by a preponderance of the

evidence. Paragraph (c) also appeared to

conflict with § 718.403, which requires

the party alleging any fact to bear the

burden of proving that fact. Section

718.403 more accurately reflects the

allocation of burdens of proof under the

APA, and paragraph (c) of § 718.3

should therefore be deleted.

Subpart B—Criteria for the Development

of Medical Evidence

20 CFR 718.101. The current text of

§ 718.101 should be redesignated as

paragraph (a), without further

amendment, and a new paragraph (b)

should be added. The Department has

consistently maintained the position

that the ‘‘quality’’ standards addressing

the administration of certain clinical

tests and examinations apply to all

evidence developed by any party in

connection with a claim for black lung

benefits filed after March 31, 1980. The

Benefits Review Board has rejected this

position, and held that the standards

govern only the evidence developed by

the Department; for all other parties, the

standards are advisory. The Board has

also held that evidence cannot be

rejected by the adjudicator solely for

noncompliance with the relevant

standard. See generally Gorzalka v. Big

Horn Coal Co., 16 Black Lung Rep. (MB)

1–48, 1–51 (1990) and authorities cited.

Only the Third Circuit has addressed

this issue, and has agreed with the

Department’s position. Director, OWCP

v. Mangifest, 826 F.2d 1318 (3d Cir.

1987). Although the existing regulations

provide ample authority for making the

quality standards generally applicable

(see paragraphs 718.3(a), 725.406(b),

725.456(c)), § 718.101 should be

amended to leave no doubt on this

point.

The Department has also consistently

maintained that the part 718 quality

standards apply to part 727 claims if the

test was conducted after March 31,

1980. See 20 CFR 727.203(c). The Sixth

Circuit has accepted this interpretation

of the regulations. Wiley v.

Consolidation Coal Co., 915 F.2d 1076,

1080 (6th Cir. 1990). Both the Board and

the Seventh Circuit, however, have

rejected the Department’s position.

Coleman v. Ramey Coal Co., 18 Black

Lung Rep. (MB) 1–9, 1–15 (1993);

Peabody Coal Co. v. Director, OWCP

[Brinkley], 972 F.2d 880, 882 (7th Cir.

1992). Accordingly, the proposed

paragraph (b) includes a reference to

part 727 claims to clarify the

applicability of the quality standards to

such claims.

The individual quality standards

address the compliance requirement in

various ways. See 20 CFR 718.102 (xray) and 718.103 (pulmonary function

study): substantial compliance; 718.104

(medical report) and 718.105 (blood gas

study): no reference; 718.106 (autopsy/

biopsy): compliance. In order to clarify
3342 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

the criterion for compliance and place it

in logical sequence in the regulations,

language should be added to §718.101

requiring ‘‘substantial compliance’’ with

all the standards. This regulation

applies generally to all the quality

standards, making it the rational

provision to contain the compliance

requirement. A single reference in one

regulation also eliminates repetitive

language from three other regulations

while making explicit the applicability

of the standard to the remaining two

regulations. Finally, the phrase

‘‘[e]xcept as otherwise provided’’

recognizes the exemption from

compliance for a deceased miner whose

only X-ray is nonconforming, and

autopsies or biopsies of miners who

died before March 31, 1980.

The purpose of the quality standards

is to ensure the utilization of reliable

evidence in adjudicating claims. The

effect of noncompliance in terms of

proving or refuting entitlement should

therefore be obvious. In order to

emphasize the insufficiency of such

evidence as proof, however, proposed

paragraph (b) contains an affirmative

prohibition.

20 CFR 718.102. Paragraph (e) should

be reorganized in view of the proposed

paragraph 718.101(b) general

compliance standard. As noted with

respect to proposed paragraph

718.101(b), codifying the ‘‘substantial

compliance’’ standard in that regulation

of general applicability eliminates the

need to reiterate it in each specific

quality standard. The proposed

paragraph (e) also makes §718.102

consistent with §718.103 (pulmonary

function studies) in presuming

compliance with the technical criteria

in the Appendix. Finally, the

parenthetical citation to ‘‘§718.208’’ in

the current regulation is a typographical

error; no such provision exists.

Reference to ‘‘§718.202’’ is therefore

substituted as a correction inasmuch as

that regulation contains definitions of

Board-eligible and -certified radiologists

and ‘‘B’’ readers. See 20 CFR

718.202(a)(1)(ii) (C)–(E).

20 CFR 718.103. The last two

sentences of paragraph (a) should be

removed, and the content of those

sentences added to paragraph (c) to take

into account the changes to §718.101.

The explanation provided for

eliminating the ‘‘substantial

compliance’’ language in §718.102

applies with equal force to §718.103.

Furthermore, the proposed paragraphs

718.102(e) and 718.103(c) operate in a

functionally equivalent manner: both

regulations (i) presume compliance with

technical requirements contained in the

appendices; (ii) permit rebuttal of that

presumption with ‘‘contrary’’ evidence;

and (iii) recognize an exception to

compliance for claims involving

deceased miners and limited evidence.

Given the identity of purpose in the

current regulations, proposed paragraph

718.103(c) mirrors proposed paragraph

718.102(c) to ensure similar

interpretation and operation.

20 CFR 718.104. Section 718.104

should be amended to make clear that

the enumerated data represents the

minimum information and testing upon

which a physician’s report can be based

if obtained in connection with a claim

for benefits. This regulation also is the

logical provision to implement

guidelines for the weighing of medical

reports from a miner’s treating

physician. Proposed paragraph (d)

describes the relevant factors the

adjudicator must consider in

determining whether to accord

‘‘controlling weight’’ to the treating

physician’s opinion. The primary

objective in changing the format of

§718.104 is to clarify the requirement

that any physician’s report developed in

connection with a claim must be based

on certain enumerated information and

data in order to establish or refute

entitlement. Furthermore, the proposed

regulation makes clear the necessity for

utilizing at least an x-ray and a

pulmonary function test which satisfy

the quality standards as a clinical basis

for a physician’s pulmonary diagnosis.

See Director, OWCP v. Siwiec, 894 F.2d

635, 639 (3d Cir. 1990) (holding that

physician’s report which was based on

nonconforming pulmonary function

study was insufficient to prove miner

was disabled). Finally, proposed

paragraph (c) parallels similar

provisions in §§718.102, 718.103 and

718.106, which permit the utilization of

nonconforming evidence to establish

entitlement if the miner is deceased and

complying evidence is unavailable. This

provision adds the requirement that the

physician must be unavailable;

otherwise, in at least some instances,

the physician could be requested to

address, and cure, the deficiencies in

his report.

With respect to paragraph (d), judicial

precedent has long recognized that

special weight may be given the opinion

of a miner’s treating physician, based on

the doctor’s opportunity to observe the

miner over a period of time. See, e.g.,

Thorn v. Itmann Coal Co., 3 F.3d 713,

717 n. 3 (4th Cir. 1993); Tussey v. Island

Creek Coal Co., 982 F.2d 1036, 1042

(6th Cir. 1993); McClendon v.

Drummond Coal Co., 861 F.2d 1512,

1514 (11th Cir. 1988); Micheli v.

Director, OWCP, 846 F.2d 632, 636 (10th

Cir. 1988); Schaaf v. Matthews, 574 F.2d

157, 160 (3d Cir. 1978). Such deference,

however, is not an unqualified ‘‘blanket

rule’’ which must be applied

mechanically; the adjudicator must still

determine whether the physician’s

opinion is reasoned, documented and

credible before accepting it over

contrary opinions. Grizzle v. Pickands

Mather and Co., 994 F.2d 1093, 1097

(4th Cir. 1993); Peabody Coal Co. v.

Helms, 901 F.2d 571, 573 (7th Cir.

1990); Halsey v. Richardson, 441 F.2d

1230, 1236 (6th Cir. 1971); Tedesco v.

Director, OWCP, 18 Black Lung Rep.

(MB) 1–104, 1–105 (1994). The

proposed changes to §718.104 codify

the principles embodied in both lines of

cases and draw on a similar regulation

adopted by the Social Security

Administration, 20 CFR 404.1527(d)(2).

A physician’s status as the miner’s

treating physician can provide a

legitimate basis for preferring that

opinion over the reports of doctors who

have examined the miner only once or

reviewed only medical records and test

data. Such status alone, however, is no

substitute for a critical analysis of both

the nature and extent of the patientdoctor relationship and the credibility

of the opinion submitted by the

physician. The proposed regulation

enumerates the four basic factors in

evaluating the physician’s relationship

with the miner: (i) nature of relationship

(pulmonary versus non-pulmonary

treatment); (ii) duration of relationship

(length of time treating the miner); (iii)

frequency of treatment (number of visits

over time); and (iv) extent of treatment

(types of tests and examinations

conducted). Each factor will vary from

claim to claim. Consequently, no

‘‘bright-line’’ rule can be utilized which

defines when a treating physician’s

opinion should be given controlling

weight.

Paragraph (d)(5) underscores the

requirement that, status aside, the

treating physician must provide a

reasoned and documented opinion

before his conclusions can be accorded

controlling weight. Status cannot cure

deficiencies in testing and explanation

which would be fatal flaws in reports

from a non-treating physician.

Accordingly, this provision requires the

adjudicator to consider the treating

physician’s opinion on its own merits

and in the context of the remainder of

the record to determine whether

deference to the treating physician is

appropriate.

20 CFR 718.105. Section 718.105

should be amended to address studies

administered during the miner’s

terminal illness. During such an illness,

arterial blood gas studies may produce

qualifying results for reasons unrelated
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3343

to a chronic respiratory or pulmonary

disease. In order to avoid reliance on

‘‘deathbed’’ qualifying data, proposed

paragraph (d) should be added. This

provision simply ensures the probative

value of such tests as evidence of a

chronic respiratory or pulmonary

impairment by requiring the claimant to

submit a physician’s report attesting to

the link between the qualifying scores

and the miner’s chronic pulmonary

condition.

20 CFR 718.106. Paragraph (b) should

be rewritten to account for the changes

to § 718.101. Paragraph (b) is revised to

utilize language similar to parallel

provisions in the other quality standards

provisions, which account for the

general ‘‘substantial compliance’’

standard contained in the amended

§ 718.101. The word ‘‘noncomplying’’ is

substituted for ‘‘nonconforming’’ to

ensure consistent terminology in similar

circumstances.

20 CFR 718.107. Section 718.107

should be amended to make explicit the

burden of proof a party bears to

demonstrate that the proffered test or

procedure is ‘‘medically acceptable.’’

Section 718.107 enables any party to

submit medical evidence based on tests

or procedures not covered by the other

provisions of subpart B. This regulation

permits flexibility in accommodating

the use of developing or future medical

diagnostic techniques beyond the

traditional tests specifically covered by

the quality standards. Proposed

paragraph (b) emphasizes the

requirement that the party proffering the

evidence must establish both that the

evidence is based on medically

acceptable tests or procedures and that

the evidence is relevant to determining

the medical issues in a benefits claim.

Subpart C—Determining Entitlement to

Benefits

20 CFR 718.201. We are specifically

seeking comment on § 718.201. The

regulatory definition of

‘‘pneumoconiosis’’ should be revised to

clarify the Department’s position that

this disease is a progressive condition

which, in some instances, may become

detectable only after cessation of coal

mine employment. The definition

should also reflect the inclusive nature

of the disease, such that no category of

chronic lung disease can be

categorically excluded from the ambit of

the definition. Two important issues

have emerged in recent litigation

involving the definition of

‘‘pneumoconiosis’’: (i) whether the

disease includes obstructive disorders;

and (ii) whether pneumoconiosis is a

latent disease which can progress after

the cessation of dust exposure to the

point of clinical manifestation.

Heretofore, the Department has

consistently taken the position in

litigation and rulemaking that no

specific lung disease could be

categorically excluded from the

definition of ‘‘pneumoconiosis’’; thus,

any disease which could be medically

linked to occupational dust exposure in

a particular case could be

pneumoconiosis. See 43 FR 36825, Aug.

18, 1978, § 727.202 Discussion and

changes (a); 45 FR 13685, Feb. 29, 1980,

§ 718.201 Discussion and changes (a);

Barber v. Director, OWCP, 43 F.3d 899

(4th Cir. 1995). The Department has also

argued that pneumoconiosis can

progress absent exacerbating dust

exposure, and may require many years

to reach the point of detection. The

Department has been largely successful

in litigation involving these issues. The

prevalence of the issues and the

availability of supportive medical

research, however, warrant making

explicit the current regulatory definition

to codify both positions.

Scope of Definition

The statutory definition of

‘‘pneumoconiosis,’’ as implemented by

§ 718.201, encompasses any chronic

respiratory or pulmonary disease or

impairment caused by the inhalation of

coal mine dust. See 30 U.S.C. 902(b).

Thus, any such disease or impairment

which can be linked to occupational

dust exposure by credible medical

evidence may be considered

‘‘pneumoconiosis’’ for purposes of that

particular claim. As such, the Act

recognizes a far broader concept of the

disease than does the medical

community; the latter confines ‘‘coal

workers’ pneumoconiosis’’ to the

pathologic reaction of lung tissue to

dust inhalation, resulting in

characteristic patterns or markings on

chest X-rays. See, e.g., ‘‘The Merck

Manual of Diagnosis and Therapy’’ 681

(15th ed. 1987); ‘‘National Institute for

Occupational Safety and Health,

Occupational Exposure to Respirable

Coal Mine Dust’’ § 4.1.2 (1995); Freeman

United Coal Mine Co. v. Director,

OWCP, 957 F.2d 302, 303 (7th Cir.

1992). Amending § 718.201 to

acknowledge the distinction between

the medical and legal definitions

emphasizes the inclusive nature of

‘‘pneumoconiosis’’ for purposes of the

black lung benefits program.

In the same vein, adding the phrase

‘‘any chronic restrictive or obstructive

pulmonary disease’’ will foreclose

litigation attempting to narrow the

definition on a claim-by-claim basis

with medical opinions which exclude

obstructive lung disorders from

occupationally-related pathologies. The

NIOSH study on occupational dust

exposure contains ample medical

authority suggesting at least some

relationship between coal mine dust

exposure and the development of

chronic obstructive lung disease. See

‘‘National Institute for Occupational

Safety and Health, Occupational

Exposure to Respirable Coal Mine Dust’’

§ 4.2.2 et seq. Thus, leaving the issue to

resolution in litigation risks inconsistent

results; indeed, one court has invited

such inconsistencies:

The Act and its regulations define

‘pneumoconiosis’ broadly and do not

establish that dust exposure from coal mine

work can necessarily cause obstructive

pulmonary disease or impairment. * * *

Rather, the facts and medical opinions in

each specific case answer this question.

Blakley v. Amax Coal Co., 54 F.3d 1313,

1321 (7th Cir. 1995); compare Warth v.

Southern Ohio Coal Co., 60 F.3d 173,

175 (4th Cir. 1995) (stating that

‘‘[c]hronic obstructive lung disease thus

is encompassed within the definition of

pneumoconiosis for purposes of

entitlement to Black Lung benefits[,]’’

and rejecting medical opinions based on

‘‘erroneous assumptions’’ to the

contrary); Eagle v. Armco, Inc., 943 F.2d

509, 511 n. 2 (4th Cir. 1991) (describing

as ‘‘bizarre’’ a medical opinion which

rejected occupational dust exposure as

possible cause of chronic obstructive

lung disease).

Progressive Nature

The Department has long maintained

the view that simple pneumoconiosis is

an irreversible disease, which may

cause progressive deterioration of the

lung even after the miner has ceased

inhaling coal mine dust. Many court

and Board decisions reflect acceptance

of this characterization of the disease’s

pathology. See, e.g., Mullins Coal Co. v.

Director, OWCP, 484 U.S. 135, 151

(1987); LaBelle Processing Co. v.

Swarrow, 72 F.3d 308, 314–315 (3d Cir.

1995); Adkins v. Director, OWCP, 958

F.2d 49, 51 (4th Cir. 1992); Lukman v.

Director, OWCP, 896 F.2d 1248, 1253

(10th Cir. 1990); Orange v. Island Creek

Coal Co., 786 F.2d 724, 727 (6th Cir.

1986); Consolidation Coal Co. v. Chubb,

741 F.2d 968, 973 (7th Cir. 1984); Elkins

v. Beth-Elkhorn Coal Co., 2 Black Lung

Rep. (MB) 1–683, 1–686 (1979). But see

Zeigler Coal Co. v. Lemon, 23 F.3d 1235,

1238 (7th Cir. 1994) (chastising an

administrative law judge for assuming

that pneumoconiosis is progressive

without any medical evidence in the

record to support the assumption).

Indeed, the propensity for progressive

deterioration provides the legal

justification for permitting additional or
3344 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

subsequent claims, even for miners who

do not return to coal mining after the

first claim’s denial. See 43 FR 36785,

Aug. 18, 1978, § 725.309 Discussion and

changes (a) (‘‘The Department agrees

that a miner whose claim has once been

finally denied * * * should be allowed

to file a new claim on the grounds of a

progression to total disability.’’). The

fact that the miner was unable to prove

even the existence of the disease in his

initial claim is no bar to a later claim

since the disease may not have

progressed to the point of clinical

manifestation when he filed the

application.

Current medical science supports the

Department’s position that

pneumoconiosis may progress. In P.

Francois et al., ‘‘Pneumoconiosis of

Delayed Apparition: Large Scaled

Screening in a Population of Retired

Coal Miners of the Northern Coal Fields

of France,’’ in Seventh International

Pneumoconiosis Conference, Abstracts

of Communications 979 (1988), 741 new

cases of pneumoconiosis (out of 3070

miners, or 24%) were discovered in

miners who did not have

pneumoconiosis at retirement and who

had not been exposed to dust for at least

3 years. Of these 741 new cases, only

10% had large opacities (complicated

pneumoconiosis), 69% had category 1

simple pneumoconiosis, and 21% had

category 2 simple pneumoconiosis.

Indeed, the authors specifically recite

one example of a 66 year old ex-miner

who had retired 24 years earlier after 25

years of dust exposure. The x-ray at

retirement showed no evidence of

pneumoconiosis, but the one taken 20

years later showed obvious

pneumoconiosis. Thus, the authors

write:

The coalworker’s pneumoconiosis may

appear a long time after the exposure to

nocive [harmful] dust has ceased. This is a

well established fact. What we don’t know is

the frequency of such forms of

pneumoconiosis of long delayed apparition.

Francois at p. 979.

An earlier study from France provides

additional support. In David V. Bates et

al., ‘‘A Longitudinal Study of

Pulmonary Function in Coal Miners in

Lorraine, France’’, 8 Am. J. Ind. Med. 21

(1985), the authors observed continued

and accelerated rates of decline in lung

function after retirement from mining in

both smokers and nonsmokers. The

authors suggest that pneumoconiosis at

all stages progresses, based on ‘‘dust

loading in the lung, and once this has

reached some critical level, it is not

much affected by removal from

exposure.’’ Bates at p. 29. The study

includes several graphs depicting

‘‘radiologic category at retirement and

10 years later.’’ Bates at p. 27. These

graphs demonstrate a decrease in the

percentage of miners with normal or

0/1 readings, and an increase in the

percentage of miners with simple

pneumoconiosis (category 1/2) as well

as complicated pneumoconiosis. By way

of explanation, Dr. Bates identified

miners with normal or 0/1 readings as

‘‘o-p;’’ miners with 1/2 were ‘‘m, n, A,

B,’’ and miners with complicated

pneumoconiosis were delineated as

‘‘C.’’ Bates at p. 22. An x-ray showing

opacity perfusion of 0/1 is considered

negative for pneumoconiosis under the

regulations. 20 CFR 718.102(b). Thus,

the data clearly depicts a progression

from normal, or negative, x-rays to

positive x-rays, with the initial

appearance of simple pneumoconiosis

occurring some 10 years after the

miners’ last dust exposure.

Other studies and treatises

inferentially document, or otherwise

support, the progressivity of simple

pneumoconiosis. See, Helen DimichWard & David V. Bates, ‘‘Reanalysis of

a Longitudinal Study of Pulmonary

Function in Coal Miners in Lorraine,

France,’’ 25 Am. J. Ind. Med. 613, 621

(1994) (lung function loss and disability

may progress after exposure ceases);

Cockcroft et al., ‘‘Prevalence and

Relation to Underground Exposure of

Radiological Irregular Opacities in

South Wales Coal Workers with

Pneumoconiosis,’’ Br. J. Ind. Med. 40:

169, 172 (1983) (increase in irregular

opacities without further dust exposure

indicates continued tissue reaction to

inhaled dust and progression of the

disease after exposure, although

increase in overall profusion of

opacities not found); 4A Roscoe N. Gray,

‘‘Attorneys’ Textbook Of Medicine,’’

¶ 205.71 (3d ed. 1982) (while only

method of preventing progression of

pneumoconiosis is removal from dusty

environment, with some

pneumoconioses progression will

continue even after exposure ceases);

‘‘The Merck Manual of Diagnosis and

Therapy’’ 704 (16th ed. 1992)

(explaining that complicated

pneumoconiosis may develop and

progress without further dust exposure);

David V. Bates, ‘‘Respiratory Function

in Disease’’ 303 (3d ed. 1989) (silicosis

commonly progresses after dust

exposure ceases). The definition of

‘‘pneumoconiosis’’ includes silicosis. 20

CFR 718.202. Moreover, complicated

pneumoconiosis normally develops on a

background of category 2 or 3 simple

pneumoconiosis. See e.g. ‘‘The Merck

Manual of Diagnosis and Therapy’’ at p.

704. Thus, the development from simple

to complicated pneumoconiosis without

further dust exposure reveals

progression of the disease.

In view of the ample scientific

support for the Department’s

interpretation of the scope and nature of

the definition of ‘‘pneumoconiosis,’’

§ 718.201 should reflect that

interpretation with more specificity.

20 CFR 718.202. Paragraph (a)(2)

should be amended to make clear that

a finding of anthracotic pigment in a

biopsy procedure, without more, is

insufficient to establish the presence of

pneumoconiosis. The current regulation

imposes this limitation only with

respect to an autopsy, but there is no

reason to treat these two types of

evidence differently.

20 CFR 718.204. The proposed

changes to § 718.204 codify several of

the positions which the Department has

taken in litigation to clarify the meaning

of ‘‘total disability.’’ The regulation

should explicitly reflect the

Department’s view that ‘‘total

disability’’ means a totally disabling

respiratory or pulmonary impairment.

The proposed changes also provide

guidance for establishing the degree to

which pneumoconiosis must contribute

to the miner’s disabling impairment; to

date, the quantification of disability

contribution has been articulated solely

through appellate decisions. In addition,

the proposed changes make clear that a

miner who is totally disabled by a

compensable respiratory condition is

entitled to black lung benefits regardless

of any concurrent disability by nonrespiratory impairments or diseases.

Finally, the Department proposes to

revise the regulation to separate

disability and disability causation

criteria, unify the various provisions

dealing with lay evidence, and delete

paragraph (f), which is unnecessary in

view of corresponding material in 20

CFR 725.504.

Two significant changes have been

made to the concept of ‘‘total

disability.’’ First, paragraph (a) makes

clear that disabling nonrespiratory

conditions are irrelevant to determining

whether a miner is, or was, totally

disabled by pneumoconiosis. This

change makes clear the Department’s

disagreement with the holding in

Peabody Coal Co. v. Vigna, 22 F.3d 1388

(7th Cir. 1994). In that case, the miner

suffered a disabling stroke in 1971, and

thereafter applied for benefits under

part 727. He invoked the interim

presumption with qualifying pulmonary

function evidence from 1979. The

Seventh Circuit held, however, that the

operator rebutted the presumption

because the miner’s disability was

caused by the stroke, which was
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3345

unrelated to coal mine dust exposure

and occurred before the qualifying

ventilatory study. Compare

Youghiogheny and Ohio Coal Co. v.

McAngues, 996 F.2d 130 (6th Cir. 1993),

cert. den. 114 S. Ct. 683 (1994) (holding

that miner’s disabling injuries from

automobile accident were irrelevant to

determining whether he was totally

disabled by pneumoconiosis). Although

Vigna was decided under part 727, the

proposed changes to paragraph

718.204(a) are designed to ensure that

the Seventh Circuit’s view will not be

applied outside that circuit to cases

arising under part 718.

The proposed paragraph (a) does

recognize one exception to the

irrelevancy of disabling nonrespiratory

conditions in determining whether the

miner is totally disabled by

pneumoconiosis. Such conditions or

diseases are relevant if they produce a

chronic respiratory or pulmonary

impairment. Some cardiac and

neurological diseases, for example, may

affect the respiratory musculature in

such a way as to impair the individual’s

ability to breathe without actually

affecting the lungs. See, e.g., Panco v.

Jeddo-Highland Coal Co., 5 Black Lung

Rep. 1–37 (1982) (concerning

respiratory impairment from

amyotrophic lateral sclerosis, a

neurological disease); Maynard v.

Central Coal Co., 2 Black Lung Rep. 1–

985 (1980) (concerning respiratory

impairment from heart disease);

Skursha v. U.S. Steel Corp., 2 Black

Lung Rep. 1–518 (1980) (same).

Similarly, a traumatic accident such as

an injury to the spinal column may

affect breathing but not the lungs. The

effect of the disease or trauma, its

relationship to the miner’s ability to

breathe, and the interplay with the

miner’s pneumoconiosis, all determine

the contributing causes of the miner’s

disability.

The second change involves the

definition of ‘‘total disability’’. The

proposed change to paragraph (b)(1)

expresses what the Department has

always maintained: that the ‘‘disability’’

which the miner suffers is a totally

disabling respiratory or pulmonary

impairment, and not ‘‘whole person’’

disability. Although the two courts of

appeals to consider the issue have

accepted the Department’s position,

clarifying the definition will hopefully

end litigation on this issue. See Beatty

v. Danri Corp. & Triangle Enterprises,

49 F.3d 993 (3d Cir. 1995); Jewell

Smokeless Coal Corp. v. Street, 42 F.3d

241 (4th Cir. 1994).

Another significant change is the

addition of criteria defining ‘‘disability

causation,’’ or the degree to which

pneumoconiosis must contribute to the

miner’s disability. Several courts have

addressed the issue, and formulated

various standards: Robinson v. Pickands

Mather & Co./Leslie Coal Co., 914 F.2d

35, 38 (4th Cir. 1990) (‘‘contributing

cause’’); Shelton v. Director, OWCP, 899

F.2d 690, 693 (7th Cir. 1990) (necessary

though not sufficient cause); Lollar v.

Alabama By-Products, 893 F.2d 1258,

1265 (11th Cir. 1990) (‘‘substantial

contributing factor’’); Adams v. Director,

OWCP, 886 F.2d 818, 825 (6th Cir. 1989)

(disability ‘‘due at least in part’’ to

pneumoconiosis); Bonessa v. United

States Steel Corp., 884 F.2d 726, 733 (3d

Cir. 1989) (‘‘substantial contributor’’);

Mangus v. Director, OWCP, 882 F.2d

1527, 1531 (10th Cir. 1989) (at least a

‘‘contributing cause’’). Few, if any,

practical differences exist in the various

expressions of the contribution

standard.

The Department has concluded that a

single standard should be articulated to

eliminate needless confusion and

litigation over the relationship between

a miner’s pneumoconiosis and his

disability. The Department has selected

the ‘‘substantially contributing cause’’

language because it ensures a tangible

and actual contribution; a more

demanding standard would be too

harsh, especially when many miners

suffer from a multiplicity of respiratory

problems. Moreover, the ‘‘substantially

contributing cause’’ standard mirrors

the criteria for proving that

pneumoconiosis contributed to the

miner’s death. See 20 CFR 718.205(c).

The U.S. Court of Appeals for the Third

Circuit found the contribution standard

for death a persuasive basis for

interpreting the disability standard: ‘‘We

perceive no reason why the phrase ’total

disability due to pneumoconiosis’

should not track the phrase ‘death due

to pneumoconiosis.’’’ Bonessa, 884 F.2d

at 733.

Proposed paragraph (c)(1) also defines

disability causation in terms of

worsening a totally disabling respiratory

or pulmonary condition which is itself

wholly caused by non-coal mine

exposures. Thus, a miner whose

pneumoconiosis further damages his

lungs may establish the necessary causal

link even if nonoccupational exposure

is a self-sufficient cause of the

respiratory disability. The proposed

language reflects the Department’s

disagreement with the result reached by

the U.S. Court of Appeals for the Fourth

Circuit in Dehue Coal Co. v. Ballard, 65

F.3d 1189 (4th Cir. 1995) (holding that

a miner who was totally disabled by

lung cancer was not entitled to benefits

because his pneumoconiosis could not,

by definition, contribute to the

disability).

The remaining changes are structural

or editorial. Paragraph (c)(5) has been

changed to paragraph (d) (i) and (ii); the

remaining provisions addressing the use

of lay evidence have been moved into

paragraph (d) given the commonality of

their purpose: establishing entitlement

through lay evidence. The last sentence

of current paragraph (c)(5) makes clear

that proving disability through clinical

tests or physicians’ reports does not

necessarily prove that pneumoconiosis

caused the disability. This provision

therefore underscores the difference

between disability and disability

causation as separate elements of

entitlement. This point is sufficiently

important to warrant placement in a

separate paragraph as proposed

paragraph (c)(2). Finally, current

paragraph (f) is deleted because it

simply duplicates 20 CFR 725.504 to the

extent that both provisions preclude a

working miner from receiving benefits

unless the award is based on a finding

of complicated pneumoconiosis.

20 CFR 718.205. The Department has

taken the position that pneumoconiosis

causes the miner’s death if the disease

is either the actual cause of death or

hastens death to an appreciable extent.

This interpretation of the phrase ‘‘death

due to pneumoconiosis’’ should be

made explicit in the regulation. Under

the 1981 amendments to the BLBA, a

deceased miner’s survivor who filed a

claim on or after January 1, 1982, is

eligible for benefits only if

pneumoconiosis caused, or contributed

to, the miner’s death. The Department

added paragraph (c) to § 718.205 to

implement congressional intent that

pneumoconiosis must play a role in the

miner’s death in order to entitle a

survivor to benefits. Based on the

legislative history of the 1981

amendments, the Department concluded

that the disease must be at least a

‘‘substantially contributing cause’’ of the

miner’s death. See 48 FR 24276—24277,

May 31, 1983, § 718.205 Discussion and

changes (h)–(n). In order to give

practical meaning to that phrase, the

Department has consistently argued in

litigation that the medical evidence

must at least prove that the miner’s

pneumoconiosis actually hastened his

death. Four courts of appeals have

deferred to the agency’s interpretation of

the regulation. Brown v. Rock Creek

Mining Co., 996 F.2d 812, 816 (6th Cir.

1993); Peabody Coal Co. v. Director,

OWCP, 972 F.2d 178, 183 (7th Cir.

1992); Shuff v. Cedar Creek Coal Co.,

967 F.2d 977, 980 (4th Cir. 1992), cert.

den. 113 S.Ct. 969 (1993); Lukosevicz v.

Director, OWCP, 888 F.3d 1001, 1006
3346 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

(3d Cir. 1989). The Benefits Review

Board has refused to adopt the

Department’s position, but has not

articulated an alternative standard. See,

e.g., Tackett v. Armco, Inc., 16 Black

Lung Rep. (MB) 1–88, 1–93 (1992),

vacated on remand 17 Black Lung Rep.

(MB) 1–103, 1–104 (1993). In order to

ensure consistent application of a single

legal standard, paragraph (c) of

§ 718.205 should be amended by adding

proposed paragraph (c)(5), which

codifies the Department’s views.

Subpart D—Presumptions Applicable to

Eligibility Determinations

20 CFR 718.301. Paragraph (b) should

be removed because a new definition of

‘‘year’’ is added to 20 CFR 725.101(a).

Paragraph (a) of § 718.301 should be

amended to make reference to proposed

§ 725.101(a)(32) and its requirements.

Section 718.301 is one of two

regulations which currently define

‘‘year’’ for determining the length of a

miner’s occupational history; the other

regulation is 20 CFR 725.493(b)

(identifying responsible operator). The

Department has concluded that a single

regulatory definition with program-wide

application should replace the two

current regulations. Determining the

length of a miner’s occupational history

is the same inquiry for establishing

eligibility for presumptions as for

identifying a responsible operator, and a

single standard should apply in both

cases.

20 CFR 718.307. Remove 20 CFR

718.307 (a) and (b) and add the contents

of § 718.307(a) to 20 CFR 725.103.

Paragraph (a) contains material which

concerns any claim filed under the

BLBA, and not just claims governed by

the part 718 medical criteria.

Accordingly, the contents of paragraph

(a) will be removed from part 718 and

placed in § 725.103. See proposed

§ 725.103. Paragraph (b) effectively

duplicates new proposed § 725.103,

which more broadly describes the

burden of proof. This language should

therefore be removed.

Subpart E—Miscellaneous Provisions

20 CFR 718.401. Remove § 718.401

because it duplicates proposed

§ 725.406. Current § 718.401 recognizes

each miner’s statutory right to a

complete pulmonary evaluation at the

Department’s expense. See 30 U.S.C.

923(b). This regulation also authorizes

both the miner and the district director

to develop additional medical evidence.

Section 718.401 duplicates material in

the cross-referenced regulations, 20 CFR

§§ –725.405 and 725.406; the part 725

regulations have program-wide

applicability. Consequently, no need

exists for including this regulation in

part 718.

20 CFR 718.402. Remove the first

sentence of § 718.402 and add the

remainder of this provision to proposed

§ 725.414(a)(3)(iii). Section 718.402

describes the consequences of a

claimant’s failure to cooperate in the

development of medical evidence

needed to adjudicate the claim. This

provision duplicates the substance of

proposed § 725.414(a)(3)(iii), which

deals with a claimant’s unreasonable

refusal to submit to medical

examinations and testing. Section

718.402 also penalizes the claimant who

refuses to provide a complete health

history or permit access to medical

records. This aspect of the regulation

will be added to proposed § 725.414.

Given the overlapping purposes of the

two regulations, § 718.402 should be

removed from part 718 in favor of

proposed § 725.414, which has programwide applicability.

20 CFR 718.403. Remove 20 CFR

718.403 from part 718 and add to part

725. Section 718.403 codifies the

burden of proof imposed on any party

alleging any fact in support of its

position under part 718. The parties to

a claim, however, are required to prove

a variety of facts under part 725 which

also bear on entitlement issues, e.g.,

status as a miner (§ 725.202);

dependency and relationship

(§§ 725.204–725.228); liability as a

responsible operator (subpart G); and

entitlement to medical benefits (subpart

J). Part 725 does not contain a

counterpart to § 718.403. Accordingly, a

single provision generally allocating the

parties’ burdens of proof under the

BLBA logically should be placed in part

725, the regulations with program-wide

applicability. See proposed § 725.103.

20 CFR 718.404. Remove 20 CFR

718.404 from part 718 and move to part

725. Section 718.404(a) makes explicit a

miner’s obligation to inform the

Department and the responsible

operator, if any, if he resumes work in

a coal mine or comparable and gainful

work. A return to such work requires

the termination of benefits unless the

miner’s award is based on complicated

pneumoconiosis. See 20 CFR 725.504(c).

Paragraph (b) reiterates the

Department’s authority to reopen a

finally approved claim during the

lifetime of the miner and develop

medical evidence if the particular

circumstances so warrant. Both

provisions are more logically placed in

part 725 as regulations of program-wide

applicability. See proposed § 725.203 (c)

and (d).

Appendix B to Part 718

Appendix B to Part 718, 2(ii). The

technical requirements for the

administration of pulmonary function

studies should be amended to preclude

taking the initial inspiration from the

open air. The quality standards

currently permit an individual

performing a pulmonary function study

to take the initial inspiration from either

the open air or the testing machine. The

proposed regulation eliminates this

choice. Open air inspiration is not

recorded on the spirogram, which

documents the performance of the test.

Consequently, the validity of such an

initial inspiration cannot be

independently verified by a reviewing

physician. Because less than optimum

inspiration will produce a ‘‘false low’’

result, such tests may yield erroneously

abnormal values. The open-air

inspiration option therefore must be

eliminated in order to ensure that the

validity of every pulmonary function

study can be independently ascertained.

The Department does not propose to

change Tables B1–B6 in Appendix B,

which are used to evaluate the results of

pulmonary function tests (see proposed

§ 718.204(b)(2)(i)). Accordingly, the

tables will not be republished in either

the proposed or final versions of this

rule in the Federal Register. The tables

will continue to be published as part of

Appendix B to part 718 in the Code of

Federal Regulations once this rule

becomes final, however. Parties

interested in reviewing the tables may

consult earlier editions of the Code of

Federal Regulations or the Federal

Register in which the tables were

originally promulgated, 45 FR 13699–

13710, Feb. 29, 1980.

Appendix C to Part 718. Appendix C

should be amended to specify that

arterial blood gas studies should not be

conducted during, or shortly after, a

miner’s acute respiratory illness. Such

studies are likely to produce spurious

values which are not indicative of the

miner’s true condition.

20 CFR Part 722—Criteria for

Determining Whether State Workers’

Compensation Laws Provide Adequate

Coverage for Pneumoconiosis and

Listing of Approved State Laws

Section 421 of the Black Lung

Benefits Act requires the Secretary of

Labor to publish in the Federal Register

a list of all states whose workers’

compensation laws provide ‘‘adequate

coverage’’ for occupational

pneumoconiosis. 30 U.S.C. 931(a). The

purpose of this provision was to allow

states to assume responsibility for

providing compensation to former coal
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3347

miners who were totally disabled due to

pneumoconiosis and to their dependent

survivors in the event of the miner’s

death due to pneumoconiosis. See Usery

v. Turner Elkhorn Mining Co., 428 U.S.

1, 8–9 (1976). The Secretary’s

certification that a state law provides

adequate coverage prevents any claim

for benefits arising in that state from

being adjudicated under the Black Lung

Benefits Act. To date, no state law has

been approved.

The Act provides that a state may be

included on the Secretary’s list only if

its provisions governing benefit

amounts, entitlement standards, statute

of limitations, and prior and successor

operator liability are ‘‘substantially

equivalent’’ to those contained in the

Act. 30 U.S.C. 931(b)(2). In addition, the

Secretary may promulgate additional

regulations to ensure adequate

compensation for total disability or

death due to pneumoconiosis. 30 U.S.C.

931(b)(2)(F). The Secretary first

promulgated regulations under this

authority on March 12, 1971, and

amended those regulations on March 30,

1973 in light of changes to the

Longshore and Harbor Workers’

Compensation Act in 1972. 38 FR 8238,

March 30, 1973. These regulations,

codified at 20 CFR part 722, have not

been amended since 1973. In light of the

subsequent statutory changes made by

the Black Lung Benefits Reform Act of

1977 and the Black Lung Benefits

Amendments of 1981, the current

regulations are obsolete.

The Department has recently

concluded a review of all of the

regulations implementing the Act, and

has determined that the continued

publication of these criteria in the Code

of Federal Regulations is no longer

required. Accordingly, rather than

amend the regulations to reflect the

current law, the Department intends to

simply delete the specific criteria and

replace them with a general statement

that in the future, upon application of

any state, the Department will review

the state’s workers’ compensation law in

light of the current Act to determine

whether the state law provides adequate

coverage. Guided by the criteria set forth

in 30 U.S.C. 931(b)(2), the Department

will approve such a state law only if it

guarantees at least the same

compensation, to the same individuals,

as is provided by the Act. The Act

requires that if the Department approves

any state laws, it publish a list of the

affected states in the Federal Register,

30 U.S.C. 931(b)(1).

Finally, the revised regulations

substitute the gender neutral term

‘‘workers’ compensation laws’’ for the

term ‘‘workmen’s compensation laws,’’

used in the statute. No substantive

alteration in the statutory term is

intended.

20 CFR Part 725—Claims for Benefits

Under Part C of Title IV of the Federal

Mine Safety and Health Act, as

Amended

Subpart A—General

20 CFR 725.1. Section 725.1 provides

a broad overview of the various parts of

the Black Lung Benefits Act (BLBA), the

amendments thereto, and the

incorporation of the Longshore and

Harbor Workers’ Compensation Act

(LHWCA). The Department proposes to

amend this regulation to include a

comparable reference to the Social

Security Act, 42 U.S.C. 301 et seq.,

provisions of which are also

incorporated into Parts A, B and C of the

BLBA. The BLBA is actually three

statutes in one. The Act itself is

subchapter IV of the Mine Safety and

Health Act, chapter 30 of the United

States Code. Part C of the Act, which the

Department administers, also

incorporates many provisions of the

LHWCA, 33 U.S.C. 901 et seq. Congress

authorized the Department to vary the

terms of the incorporated LHWCA

provisions by regulation, and the

Department has done so when the

special requirements of the black lung

benefits program dictated the variance.

Congress also incorporated parts of the

Social Security Act into Parts A and B

of the BLBA. Congress once again

authorized the Department to adopt and

modify the Part B provisions ‘‘to the

extent appropriate’’ for use in the

administration of Part C. Accordingly,

§725.1 should be amended to include a

brief description of the Social Security

Act incorporation comparable to the

present discussion of the LHWCA

incorporation.

20 CFR 725.2. For an explanation of

the changes to paragraph (b), see the

explanation of the changes to § 725.4.

Paragraph (c) should be added to

explain the applicability of these

regulatory revisions to pending claims

and to claims filed after the effective

date of the revised regulations. The

Department intends that the proposed

revisions announced in this Notice will

apply to the adjudication of all claims

for benefits under the Black Lung

Benefits Act pending with the

Department on the date these revisions

go into effect, to the extent that such

application is consistent with the

Department’s authority under the Black

Lung Benefits Act and with the efficient

administration of the program. The

Department considers a claim to be

pending if the claim has not yet been

finally denied, or less than one year has

passed since the claim was finally

denied. In addition, all of the proposed

regulations will apply to any claim filed

after the regulations become final.

The Supreme Court has held that a

statutory grant of legislative rulemaking

authority to an agency does not confer

the power to issue retroactive rules

unless Congress expressly provides such

power. Bowen v. Georgetown University

Hospital, 488 U.S. 204, 208 (1988). The

Black Lung Benefits Act does not

contain such an express grant.

Accordingly, the Department’s ability to

issue rules of retroactive application is

circumscribed.

Determining whether a rule is one of

retroactive application, however, is

often difficult. In Landgraf v. USI Film

Products, 114 S. Ct. 1483 (1994), the

Court adopted the definition set forth by

Justice Story in Society for Propagation

of the Gospel v. Wheeler, 22 F.Cas. 756

(No. 13,156) (CCDNH 1814):

[E]very statute, which takes away or

impairs vested rights acquired under existing

law, or creates a new obligation, imposes a

new duty, or attaches a new disability, in

respect to transactions or considerations

already past, must be deemed retrospective.

* * *

114 S. Ct. at 1499. The Court observed,

however, that ‘‘[a] statute does not

operate ‘retrospectively’ merely because

it is applied in a case arising from

conduct antedating the statute’s

enactment, or upsets expectations based

in prior law.’’ Ibid. (citation omitted).

One example of an attempt to regulate

retroactively was the Department of

Health and Human Services regulation

at issue in Georgetown University

Hospital. In 1983, the U.S. District Court

for the District of Columbia had

invalidated a 1981 HHS regulation

governing hospital reimbursement for

failure to provide notice and an

opportunity to comment. In 1984, HHS

reissued the regulation following notice

and comment, and attempted to make it

retroactive to 1981. The Supreme Court

invalidated the second regulation as an

unauthorized attempt to promulgate a

retroactive regulation. At the other end

of the spectrum are procedural changes.

As the Supreme Court noted in

Landgraf, ‘‘[c]hanges in procedural rules

may often be applied in suits arising

before their enactment without raising

concerns about retroactivity.’’ 114 S. Ct.

at 1502.

For purposes of retroactivity, the

revisions to the Department’s

regulations implementing the Black

Lung Benefits Act, 30 U.S.C. 901 et seq.,

may be divided into two groups. The

first, consisting of revisions to part 726,

have no effect on the adjudication of
3348 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

claims filed under the Act. Those

revisions, which establish procedures

for enforcing the general obligation of

coal mine operators to secure the

payment of benefits under the Act, will

be made effective immediately upon

publication of the final rule, and will

govern all subsequent penalty

assessments.

The Department also proposes to

revise various provisions in part 726

that address the requirements imposed

on coal mine operators who seek the

Department’s authority to self-insure

their liability. These revisions merely

clarify the Department’s existing

interpretation of the Act. Accordingly,

these regulations may apply to the

evaluation of past conduct. In Pope v.

Shalala, 998 F.2d 473, 483 (7th Cir.

1993), the court held that ‘‘[a] rule

simply clarifying an unsettled or

confusing area of the law * * * does

not change the law, but restates what

the law according to the agency is and

has always been: ’It is no more

retroactive in its operation than is a

judicial determination construing and

applying a statute to the case.’

Manhattan General Equip. Co. v.

Commissioner, 297 U.S. 129, 135

(1936).’’

The second, and largest, group of

revisions are those amending Parts 718

and 725, which govern the adjudication

of claims for benefits filed by miners

and their survivors, as well as the

payment of benefits in approved claims.

A number of the revisions alter the

procedures to be used in adjudication,

including those related to processing of

claims by the district director, the

adjudication of claims before the Office

of Administrative Law Judges,

responsible operator issues, and

subsequent claims. These changes,

however, significantly alter the parties’

obligations and expectations, for

example, by limiting evidence, creating

presumptions, and establishing burdens

of proof. Accordingly, despite the

Department’s authority under

Georgetown University Hospital and

Landgraf to issue procedural rules that

take effect immediately, the Department

proposes to apply the revised versions

of the regulations governing those topics

only to claims filed after the effective

date of the amendments. Because the

remaining revisions merely clarify the

Department’s interpretation of the

current Act and regulations, the

Department intends to apply them to all

claims pending with the Department,

and to the payment of all benefits that

become due and payable, or that remain

unpaid, after the effective date of these

revisions.

20 CFR 725.4(d). In 1978, Congress

required the Department of Labor to

promulgate interim entitlement criteria

that were ‘‘no more restrictive’’ than

criteria used to adjudicate claims that

had been filed with the Social Security

Administration under Part B of the

Black Lung Benefits Act. These interim

criteria were to be used until the

Department could develop permanent

criteria. The interim part 727

regulations were published at 43 FR

36818, Aug. 18, 1978. Because the

Department’s permanent part 718

criteria took effect on April 1, 1980, see

20 CFR 718.2, the part 727 regulations

apply only to claims filed before that

date. The Department estimates that

several hundred part 727 claims remain

pending in various stages of

adjudication. Because the parties to

these claims are quite familiar with the

standards for establishing eligibility

under part 727, and no new claims will

be adjudicated under these standards,

the Department intends to discontinue

the annual publication of part 727 in the

Code of Federal Regulations. Those

standards will remain in effect for all

claims to which they apply. Parties

interested in reviewing part 727 may

consult earlier editions of the Code of

Federal Regulations or the Federal

Register in which the regulations were

originally published.

20 CFR 725.101. The terms defined by

§ 725.101(a)(4) et seq. have been put in

alphabetical order to assist the reader in

finding the appropriate definitions. The

explanations below refer to the

renumbered paragraphs.

20 CFR 725.101(a)(6). Benefits. The

regulation should be amended to make

clear that the initial pulmonary

evaluation obtained by the Department

pursuant to 30 U.S.C. 923(b) is

considered a ‘‘benefit’’ paid by the Trust

Fund or the operator on the claimant’s

behalf. The clinical testing and medical

examination required by § 413(b) of the

BLBA confer a ‘‘benefit’’ on the miner

to the extent that the Trust Fund pays

for the miner’s opportunity to

substantiate his claim.

20 CFR 725.101(a)(13), Coal

Preparation; (a)(19), Miner or Coal

Miner. The regulation should be

amended to reflect the Department’s

position that coke oven workers are not

covered by the BLBA. The Department

has long taken the position that the

preparation activities undertaken at

coke ovens are not covered by the

BLBA. This position reflects Congress’

understanding of the scope of coverage

intended by the statutory definition of

‘‘miner.’’ 30 U.S.C. 902(d). See S.Rep.

No. 209, 95th Cong., 1st Sess. 21 (May

16, 1977) (‘‘Nor does [the definition]

include such individuals not directly

related to the production of coal such as

coke oven workers.’’); 123 Congressional

Record 24,236 (1977) (Sen. Randolph:

‘‘* * * coke oven workers are not

included in the definition.’’). See also

Fox v. Director, OWCP, 889 F.2d 1037

(11th Cir. 1989); Sexton v. Matthews,

538 F.2d 88 (4th Cir. 1976). This

clarifying language ensures that the

definitions of ‘‘coal preparation’’ and

‘‘miner or coal miner’’ do not

encompass activities involving the

commercial production of coke, which

is outside the extraction and

transportation processes.

20 CFR 725.101(a)(16). District

Director. The proposed change merely

conforms the regulation to current

administrative practice, and ensures

that any action taken by, or in the name

of, a district director shall be given full

credit as the action of a deputy

commissioner.

20 CFR 725.101(a)(17). Division or

DCMWC. The proposed change specifies

the agency within the Department

which contains the Office of Workers’

Compensation Programs and the

Division of Coal Mine Workers’

Compensation.

20 CFR 725.101(a)(31). Workers’

Compensation Law. This definition

should be amended to make clear that

certain benefits paid from a state’s

general revenues are not workers’

compensation payments for purposes of

the BLBA. The BLBA requires the

Department to offset a claimant’s federal

benefits by any benefits received from a

state pursuant to a workers’

compensation law for disability or death

due to pneumoconiosis. 30 U.S.C.

932(g). Since the Act’s inception, the

Department has considered payments

made to disabled miners by a state from

general revenues to be excluded from

benefits afforded by ‘‘workers’

compensation laws.’’ Both the Third

Circuit and the Benefits Review Board,

however, have rejected the Department’s

position. O’Brockta v. Eastern

Associated Coal Co., 18 Black Lung Rep.

1–72 (1994), aff’d sub nom. Director,

OWCP v. Eastern Associated Coal Co.,

54 F.3d 141 (3d Cir. 1995). The Board

held that § 932(g) clearly refers to

‘‘workers’ compensation law’’ without

regard to the source of funding for the

payments. The Third Circuit rejected

this reasoning but agreed that the

Department’s position was wrong. The

Court held that § 932(g) is ambiguous,

but that the Department’s policy

impermissibly implies limitations on

current § 725.101(a)(4) which are

inconsistent with the unequivocal

language of the regulation. The Court

suggested that the Department amend
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3349

the regulation to codify its policy. The

proposed regulation makes clear the

Department’s longstanding policy that

payments made from a state’s general

revenues are not workers’ compensation

benefits subject to offset under the Act.

20 CFR 725.101(a)(32). The BLBA

does not define a ‘‘year’’ for purposes of

computing the length of a miner’s

occupational history. In 1978 and 1980,

the Department promulgated regulations

which adopted the current 125-day rule.

20 CFR 725.493(b), 718.301(b). The

rationale for this policy decision is

explained in detail in the comments

accompanying the final regulations. 43

FR 36804, Aug. 18, 1978, § 725.493,

Discussion and changes (b); 45 FR

13691, Feb. 29, 1980, § 718.301,

Discussion and changes (b). The

regulations are substantially the same,

but not identical. The proposed

§ 725.101(a)(32) consolidates provisions

of the two existing regulations into a

definitional term with program-wide

application.

In addition, the regulation codifies the

Department’s current position with

respect to absences, such as vacation

and sick leave, that are approved by the

miner’s employer. In such cases, where

the employer/employee relationship is

uninterrupted, a miner is credited with

having worked during the period of the

approved absence. Other absences, such

as the time during a strike or layoff, are

not counted as working days. Finally,

the proposed section permits the

adjudication officer to use the Office’s

methodology for computing the length

of the miner’s employment history as a

fallback. See ‘‘Coal Mine (BLBA)

Procedure Manual,’’ ch. 2–700 (1994).

The Bureau of Labor Statistics (BLS) has

compiled the average daily and annual

wages for the coal mine industry. A

table of this data appears in the Office’s

Manual. If the best available evidence

consists of annual income statements,

the amount of time the miner worked

each year as a miner may be computed

by dividing the reported income by the

average daily income for that year. The

miner may be credited with a year, or

a fractional part of a year, based on the

ratio of this data. If, however, the

miner’s annual income exceeded the

average income for that year, he may not

be credited with more than a year of

employment for that income year.

20 CFR 725.103. Section 718.403

presently codifies the burden of proof

imposed on any party alleging any fact

in support of its position under part

718. The parties to a claim, however, are

required to prove a variety of facts

under part 725 which also bear on

entitlement issues, e.g., status of a miner

(§ 725.202); dependency and

relationship (§§ 725.204–725.228);

liability as a responsible operator

(subpart G); and entitlement to medical

benefits (subpart J). Part 725 does not

contain a counterpart to § 718.403.

Accordingly, a single provision

generally allocating the parties’ burdens

of proof under the BLBA logically

should be placed in part 725 since those

regulations have program-wide

applicability.

Subpart B—Persons Entitled to Benefits,

Conditions, and Duration of Entitlement

20 CFR 725.202. The BLBA contains

a broad definition of ‘‘miner’’ which the

courts have liberally construed. See

Dowd v. Director, OWCP, 846 F.2d 193

(3d Cir. 1988). In keeping with that

liberal construction, this regulation

should be amended to create a

rebuttable presumption that any

individual working at a coal mine or

coal preparation facility is a miner. The

presumption is grounded in common

sense: the vast majority of persons

working at a coal mine will ordinarily

have duties related to the mining

processes of coal extraction and/or

preparation. This presumption can be

rebutted by evidence that the individual

is not actually performing work integral

to the extraction or preparation of coal,

or the individual’s work involves only

casual contact with the coal mine

operation. The structure of the

regulation should also be changed to

distinguish special provisions relating

to transportation and construction

workers. Of special note is the fact that

construction workers alone are relieved

of the burden to prove that their work

involves the extraction or preparation of

coal; working at a coal mine site in

construction activities which involve

mine dust exposure is sufficient to make

them miners. See The Glem Company v.

McKinney, 33 F.3d 340 (4th Cir. 1994).

20 CFR 725.203. One of the elements

of entitlement required by § 725.202 is

that the miner file a claim. Section

725.203(a), as currently written,

provides that all of the § 725.202

requirements must be satisfied for each

month of entitlement. These criteria

effectively mean that the first month in

which the miner fulfills all the

requirements for entitlement will never

be earlier than the month in which he

files an application for benefits. A

miner, however, is entitled to benefits

for all periods of compensable

disability, including any period of

disability occurring before the claim is

filed. 20 CFR 725.503. To the extent that

the cross-reference to § 725.202

improperly limits the miner’s

entitlement period (and conflicts with

20 CFR 725.503), the reference will be

removed, and the language clarified to

conform to § 725.503.

New paragraphs (c) and (d)

incorporate material from 20 CFR

718.404, which has been deleted.

Paragraph (c) makes explicit a miner’s

ineligibility for black lung disability

benefits if the miner resumes his usual

coal mine work or comparable and

gainful work absent the presence of

complicated pneumoconiosis. Paragraph

(d) reiterates the Department’s authority

to reopen a finally approved claim

during the lifetime of the miner and

develop medical evidence if the

particular circumstances warrant

reopening. Both provisions are more

logically placed in part 725 as

regulations of program-wide

applicability. See 20 CFR 725.2(b).

20 CFR 725.204, .214. Sections

725.204 and 725.214 should be

amended to recognize the coexisting

eligibility of both a qualified spouse and

an individual who married the miner in

ignorance of a legal impediment to that

marriage. The BLBA incorporates

§ 416(h)(1) of the Social Security Act

(SSA), which describes the

requirements for establishing the marital

relationship between the wage earner

and the spouse for purposes of

qualifying as a ‘‘wife, husband, widow

or widower.’’ 42 U.S.C. 416(h)(1), as

incorporated by 30 U.S.C. 902(a)(2), (e).

The Department has implemented

§ 416(h)(1) in the current §§ 725.204 (for

spouses) and 725.214 (for surviving

spouses). Recent amendments to the

SSA require corresponding changes in

the regulations.

Section 416(h)(1) recognizes that both

the ‘‘legal’’ and ‘‘deemed’’ spouses may

be entitled to benefits. An individual

qualifies as the miner’s ‘‘legal’’ spouse

by proving the existence of a valid

marriage under state law. A ‘‘deemed’’

spouse, however, must demonstrate that

he lived with the miner either at the

time of application or the time of the

miner’s death, and:

in good faith went through a marriage with

such individual resulting in a purported

marriage between them which, but for a legal

impediment not known to the applicant at

the time of such ceremony, would have been

a valid marriage * * *.

42 U.S.C. 416(h)(1)(B)(i). The SSA

defines a ‘‘legal impediment’’ as

only an impediment (I) resulting from the

lack of dissolution of a previous marriage or

otherwise arising out of such previous

marriage or its dissolution, or (II) resulting

from a defect in the procedure followed in

connection with such purported marriage.

42 U.S.C. 416(h)(1)(B)(iv).

Before 1990, § 416(h)(1)(B) contained

a provision preventing a ‘‘deemed’’
3350 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

spouse from receiving benefits if a

‘‘legal’’ spouse existed and was

receiving benefits on the wage earner’s

account:

The [deemed spouse] provisions shall not

apply if (i) another person is or has been

entitled to [old age and survivor’s insurance]

benefit[s] * * * on the basis of the wages and

self-employment income of such insured

individual and such other person is (or is

deemed to be) [the legal spouse] * * * of

such insured individual under subparagraph

(A) at the time such applicant files the

application * * *.

42 U.S.C. 416(h)(1)(B) (1989). The

Department used this version of

§ 416(h)(1) in promulgating the current

regulatory criteria for proving a

relationship between the miner and

spouse or surviving spouse.

In 1990, Congress amended

§ 416(h)(1)(B) by deleting the bar on

entitlement for a deemed spouse even if

a legal spouse existed and was receiving

benefits. Omnibus Budget

Reconciliation Act, § 5119, 104 Stat.

1388–278 to 1388–280 (1990). The

express purpose of the amendment was

to allow payment of concurrent benefits

to both the legal and the deemed

spouses. See H. Rep. No. 101–964, 1990

U.S.C.C.A.N. 2649, 2650 (conference

report). Congress intended that ‘‘the

existence of a legal spouse would no

longer prevent a deemed spouse from

receiving benefits on the worker’s

record or terminate the benefits of a

deemed spouse who was already

receiving benefits on the worker’s

record.’’ Id. at 2650. Moreover, Congress

expected that a deemed spouse would

receive benefits ‘‘on the same basis as if

* * * she were a legal spouse * * *.’’

Id. The Social Security Administration

amended its disability regulation to

reflect the statutory changes (see 20 CFR

404.346); it has not yet amended the

part 410 regulations, which govern its

administration of Part B of the BLBA.

See 20 CFR part 410, subpart C

(‘‘Relationship and Dependency’’).

The proposed changes to §§ 725.204

and 725.214 amend the dependent and

surviving spouse relationship criteria to

conform to changes in the SSA. Such

changes are required for the regulations

affecting surviving spouses, given the

incorporation of the SSA statutory

definitions of ‘‘dependent’’ and

‘‘widow’’. Moreover, Congress has

previously evidenced the intent to

harmonize the SSA and the BLBA

statutory provisions which address

marital status (see Explanation of

proposed changes to § 725.212);

eliminating the ‘‘deemed’’ spouse bar is

consistent with this congressional

policy.

20 CFR 725.209, .219, .221, .222.

These provisions should reflect the age

limit for a disabled dependent currently

specified in 42 U.S.C. 402(d)(1)(B), as

incorporated into the BLBA by 30 U.S.C.

902(g). Section 402(g)(ii) of the BLBA

defines ‘‘child’’ to include an individual

who is disabled by SSA standards,

provided such disability ‘‘began before

the age specified in section

202(d)(1)(B)(ii) of the Social Security

Act * * *.’’ Congress has raised the age

for the onset of disability for the SSA

program from 18 to 22 since § 725.209

was promulgated. Because the BLBA

specifically incorporates its disability

age limit from the SSA, the regulation

should be changed to reflect the change

in the SSA. Finally, the parenthetical

cross-reference to 20 CFR 404.320(c) in

§ 725.209(b)(1) is corrected. The SSA

regulations which concern full-time

student criteria are 20 CFR 404.367

through 404.369.

20 CFR 725.212. Proposed paragraph

(b) reflects the Department’s position

that the BLBA and pertinent legislative

history require the payment of full

monthly survivor’s benefits to each

surviving spouse and surviving

divorced spouse who satisfies the

entitlement criteria, regardless of the

existence of any other spouse who also

qualifies for benefits.

Prior to 1992, the Department’s policy

regarding the allocation of benefits

between (or among) multiple surviving

spouses of the same miner, as stated in

the ‘‘Coal Mine (BLBA) Procedure

Manual,’’ limited each spouse to less

than full monthly benefits:

If more than one claimant is found entitled,

no more than the maximum amount of

benefits for the number of beneficiaries

involved may be paid under Part C. (e.g.,

where a surviving spouse and a divorced

spouse both qualify, no more than the

claimant plus one dependent benefits may be

paid). This maximum amount is divided

equally between the eligible beneficiaries of

equal status.

Ch. 2–900 para. 8(b) (February 1980). In

1992, the Department reconsidered this

position and concluded that each

surviving spouse who meets the criteria

for eligibility is entitled to the payment

of the full benefits due a surviving

spouse. This change in position was the

result of further reflection on pertinent

provisions of the BLBA and their

legislative history.

The BLBA’s definition of ‘‘widow’’

must be considered in the context of the

Social Security Act’s (SSA) definition

because SSA’s definition is incorporated

into the BLBA, and Congress has

consistently attempted to harmonize the

two provisions. Before 1965, the SSA

awarded widow’s benefits only to a

surviving spouse. See Social Security

Amendments of 1965, Pub. L. No. 89–

97, § 308(b)(1), 79 Stat. 286 (1965). The

legislative history to the 1965

amendment explicates the intended

operation of the changed definition:

Payment of a wife’s or widow’s benefit to

a divorced woman would not reduce the

benefit paid to any other person on the same

social security account and such wife’s or

widow’s benefit would not be reduced

because of other benefits payable on the same

account.

S. Rep. No. 404, 89th Cong., 1st Sess.

(1965), reprinted in 1965 U.S.C.C. &

A.N. 1943, 2047. See ‘‘Social Security

Program Operations Manual (POMS)’’

RS 00615.682 (both surviving spouses

and surviving divorced spouses

awarded full [100 percent] benefits).

In 1972, Congress amended the

BLBA’s definition of a ‘‘widow’’ to

permit the payment of benefits to a

miner’s surviving divorced spouse. That

definition, as amended, now reads:

Such term [widow] also includes a

‘surviving divorced wife’ as defined in

section 216(d)(2) of the Social Security Act

who for the month preceding the month in

which the miner died, was receiving at least

one-half of her support, as determined in

accordance with regulations prescribed by

the Secretary, from the miner, or was

receiving substantial contributions from the

miner (pursuant to a written agreement) or

there was in effect a court order for

substantial contributions to her support from

the miner at the time of his death.

30 U.S.C. 902(e). The legislative history

of the amendment indicates that

Congress altered the definition of

‘‘widow’’ to make it comport with the

SSA definition:

The term ‘widow’ in section 402(e) is

likewise redefined to conform to the Social

Security Administration definition.

S. Rep. No. 743, 92nd Cong., 2d Sess.

(1972) reprinted in 1972 U.S.C.C. & A.N.

2305, 2332. See Wolfe Creek Collieries v.

Robinson, 872 F.2d 1264, 1266–67 (6th

Cir. 1989). Consequently, by 1972 both

statutes provided a full widow’s benefit

to a surviving spouse and a surviving

divorced spouse. 42 U.S.C. 402(e).

Section 412 of the BLBA also supports

the payment of full benefits to each

qualified survivor. That provision states

in pertinent part:

In the case of death of a miner due to

pneumoconiosis or, except with respect to a

claim filed under part C of this subchapter

on or after the effective date of the Black

Lung Amendments of 1981, of a miner

receiving benefits under this part, benefits

shall be paid to his widow (if any) at the rate

the deceased miner would receive such

benefits if he were totally disabled.

30 U.S.C. 922(a)(2). A miner, as the

primary beneficiary on a claim, is
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3351

clearly entitled to a full basic benefit. 30

U.S.C. 922(a)(1); 20 CFR 725.520. Upon

the miner’s death, the ‘‘widow,’’ as the

primary beneficiary, must be

compensated in like fashion. Id. Section

902(e) defines the term ‘‘widow’’ to

include both a surviving spouse and a

surviving divorced spouse. 30 U.S.C.

902(e). Nothing in §922 provides for an

alternative payment amount if a miner

is survived by two widows.

Consequently, the plain language of the

statutory payment provisions mandates

that both spouses should receive a full

(100 percent) basic benefit amount. 30

U.S.C. 922(a)(2). To utilize any other

methodology would require payment to

each ‘‘widow’’ at less than the

statutorily prescribed ‘‘rate the deceased

miner would receive if he were totally

disabled’’. 30 U.S.C. 922(a)(2).

20 CFR 725.213. Section 725.213(b)(3)

is no longer necessary in view of the

changes made to §725.204 to confer

equal status on the spouse and ‘‘deemed

spouse’’. A new paragraph (c) clarifies

administrative practice with respect to

survivor beneficiaries who become

ineligible for benefits, but later

reestablish eligibility. The most

common reason for losing eligibility

(among surviving spouses) is

remarriage; if the remarriage ends

through death or divorce, the exbeneficiary may apply for a return to

entitlement. The individual need only

notify the Office and provide such

evidence as may be required to

reestablish eligibility. The new

paragraph also makes clear that the

individual is not required to reprove the

merits of entitlement.

20 CFR 725.215. Delete paragraph

(g)(3)’s reference to ‘‘section’’ and

replace with ‘‘paragraph’’. A miner’s

surviving spouse may meet the

dependency requirement pursuant to

paragraph (g) if the marriage lasted at

least nine months. If the marriage lasted

fewer than nine months, a spouse may

nevertheless be deemed the miner’s

dependent if the miner dies in an

accident or in the line of duty. The

purpose of paragraph (g)(3) is to

preclude a survivor’s reliance on the

exception to the nine-month marriage

rule if the adjudication officer

concludes that the miner would not

have lived nine months in any event.

Use of the technical word ‘‘section’’,

however, makes the language of the

entire regulation inapplicable.

Consequently, the reference should be

changed to confine paragraph (g)(3) to

its proper context. This change is

consistent with the structure and

meaning of the Social Security

Administration’s parallel regulation for

Part B beneficiaries, 20 CFR 410.360(b).

20 CFR 725.223. Section 725.223

should be changed to reflect the age

limit for a disabled dependent currently

specified in 42 U.S.C. 402(d)(1)(B), as

incorporated into the BLBA by 30 U.S.C.

922(a)(5). A new paragraph (d) clarifies

administrative practice with respect to

sibling beneficiaries who become

ineligible for benefits due to marriage,

but later reestablish eligibility. See the

Explanation accompanying proposed

§725.209 for changing the onset date for

a dependent beneficiary’s disability. See

the Explanation accompanying

proposed §725.213(c) for explaining the

procedures for the restoration of

entitlement after termination due to

marriage.

Subpart C—Filing of Claims

20 CFR 725.306(a). The proposed

change is intended to ensure that

another proposed change, in the

definition of the term ‘‘benefits,’’ 20

CFR 725.101(a)(6), does not produce

unintended consequences in cases

where a claimant seeks to withdraw a

claim. Currently, §725.306(a)(3)

prohibits a claimant from withdrawing

a claim if he has received benefits,

defined as payments ‘‘on account of

disability or death due to

pneumoconiosis,’’ unless such benefits

have been repaid. The Department has

proposed amending the definition of the

term ‘‘benefits’’ to include amounts paid

from the Trust Fund to provide the

claimant with a complete pulmonary

evaluation as required by 30 U.S.C.

923(b). Section 725.306 must also be

amended, however, to make clear that

the Department will not require

reimbursement of the amount spent on

the claimant’s complete pulmonary

evaluation as a condition for

withdrawing a claim. The proposed

language is similar to language in 20

CFR 725.465(d), which provides an

administrative law judge with the

authority to dismiss claims for cause

only if the Trust Fund is reimbursed for

any payments made pursuant to 20 CFR

725.522.

20 CFR 725.309. The Department’s

current regulation governing the

processing and adjudication of

subsequent or additional claims for

benefits has been a cause of much

litigation. Subsequent claims for

benefits, often misleadingly referred to

as duplicate claims, are those

applications filed by the same

individual after final denial of a prior

claim. Initially, the litigation dealt with

procedural issues. For example, in

Lukman v. Director, OWCP, 11 Black

Lung Rep. (MB) 1–71 (Ben. Rev. Bd.

1988), rev’d, Lukman v. Director, OWCP,

896 F.2d 1248 (10th Cir. 1990), the

Benefits Review Board held that a

claimant was not entitled to a hearing

before an administrative law judge on

the issue of whether he had established

a material change in conditions, a

requirement under the current

regulations for consideration of the

merits of a subsequent claim.

After the Tenth Circuit reversed the

Board’s decision, subsequent claims

litigation focused on substantive issues,

particularly the type of evidence a

claimant must submit to establish a

‘‘material change in conditions,’’ and

thereby escape denial of the subsequent

claim on the grounds of the prior denial.

The appellate courts are currently

divided on this issue. The Seventh

Circuit has rejected the Department’s

interpretation of the regulation, holding

that the claimant must establish that his

condition is substantially worse than at

the time of the prior denial in order to

avoid another denial, or that ‘‘even a

slight worsening could be and was a

material change in condition.’’ Sahara

Coal Company v. Director, OWCP, 946

F.2d 554, 558 (7th Cir. 1991). The Third,

Fourth, and Sixth Circuits gave

deference to the Department’s

interpretation, Labelle Processing Co. v.

Swarrow, 72 F.3d 308 (3d Cir. 1995);

Lisa Lee Mines v. Director, OWCP, 86

F.3d 1358 (4th Cir. 1996); Sharondale

Corporation v. Ross, 42 F.3d 993 (6th

Cir. 1994), and held that proof of a

change in one of the necessary elements

of entitlement, such as the existence of

pneumoconiosis, demonstrates a

material change in condition. The ALJ

must thereafter weigh all of the

evidence to determine whether the

claimant is entitled to benefits. The

Tenth Circuit recently fashioned yet

another interpretation of the regulation.

Wyoming Fuel Co. v. Director OWCP,

ll F.3d ll, No. 94–9576 (10th Cir.

July 23, 1996).

This litigation is attributable, in

substantial part, to the context in which

the relevant language was drafted. First

proposed on April 25, 1978 as part of an

extensive revision of the regulations

governing the processing and

adjudication of claims under the Black

Lung Benefits Act, §725.309 required

that a subsequent claim for benefits be

denied on the grounds of the prior

denial. 43 FR 17743, Apr. 25, 1978. The

Department received many comments

objecting to the prohibition against

filing a new claim by a miner ‘‘whose

condition has worsened or progressed to

total disability.’’ 43 FR 36785, Aug. 18,

1978. The Department agreed, and, in an

effort to remove the prohibition, added

a clause allowing such claims if ‘‘the

deputy commissioner determines that

there has been a material change in
3352 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

conditions.’’ Id. The Department did not

foresee that this wording would cause

such confusion.

At the heart of the current litigation

is considerable misunderstanding about

the extent to which the common law

concepts of res judicata, or claim

preclusion, and collateral estoppel, or

issue preclusion, apply to the

adjudication of black lung benefits

claims. The proposed regulation is

intended to resolve both questions.

Initially, the Department acknowledges

that the principles of claim preclusion

are applicable to claims under the Act.

Pittston Coal Group v. Sebben, 488 U.S.

105, 122–23 (1988). That applicability,

however, is limited in two important

respects. First, § 22 of the Longshore

and Harbor Workers’ Compensation Act,

33 U.S.C. 922, as incorporated into the

Black Lung Benefits Act by 30 U.S.C.

932(a), permits the reopening and

readjudication of a denied claim within

one year of the order denying benefits,

based on a showing of either a mistake

in a determination of fact or a change in

conditions. This reopening provision,

commonly called the right to

modification, is a Congressionally

mandated exception to the application

of res judicata. Second, and more

important for purposes of the

Department’s treatment of subsequent

claims, claim preclusion bars only an

attempt to relitigate a cause of action

that was previously resolved; it has no

effect on the litigation of a cause of

action which did not exist at the time

of the initial adjudication. Lawlor v.

National Screen Serv. Corp., 349 U.S.

322, 328 (1955); ‘‘Restatement (Second)

of Judgments’’ § 24 cmt. f (1982).

Nowhere is the applicability of this

second exception more readily

understood than in the context of

workers’ compensation. ‘‘It is almost too

obvious for comment that res judicata

does not apply if the issue is claimant’s

physical condition or degree of

disability at two entirely different times,

particularly in the case of occupational

diseases.’’ 3A Larson, ‘‘The Law of

Workmen’s Compensation’’ § 79.92(f)

(1982). In light of the Department’s

longstanding belief in the progressive

nature of pneumoconiosis (see

Explanation accompanying § 718.201),

the Department believes that the

preclusive effect of a previous denial of

benefits should be limited. Proposed

paragraph (d)(5) reflects the most

readily apparent application of claims

preclusion. It provides that no benefits

are payable, based on a subsequent

claim, for the period of time which was

at issue in the prior proceeding. The

regulation thus gives full effect to § 22’s

one-year limitation for reopening prior

claims based on an allegation of a

mistake in a determination of fact or a

change in conditions.

The Department’s experience in

administering the Black Lung Benefits

Act suggests, however, that the long

latency period which characterizes

pneumoconiosis and the disease’s

progressive nature do provide cause for

allowing a claimant to seek benefits by

filing a new claim more than one year

after the denial of a previous claim

based on a change in conditions. Thus,

where the evidence establishes a

worsening in the miner’s physical

condition, the proposed regulation

permits adjudication of a new cause of

action based on that worsening. This

adjudication will address the claimant’s

condition during a completely different,

and later, time period.

The Department recognizes that

securing proof of a change in the

applicable conditions of entitlement

may be difficult. As the Seventh Circuit

recognized in Sahara Coal, ‘‘[t]o require

proof that [the claimant] was not in fact

totally disabled as a result of black lung

disease, or that the extent of his disease

or disability was unclear, would

complicate the proceeding unduly.’’ 946

F.2d at 558. Although the Seventh

Circuit recognized this difficulty, it

nonetheless required the claimant to

bear a burden of proof that the

Department believes is too high: ‘‘he

should be required to go further and

show that he had missed the disability

threshold the first time so that even a

slight worsening could be and was a

material change in his condition.’’ Id.

The proposed regulation addresses

this evidentiary problem, but in a

manner which recognizes the difficulty

inherent in developing medical

evidence documenting a claimant’s

medical condition at some time in the

past. Paragraph (d)(3) thus creates a

rebuttable presumption, based on a

showing that the miner’s physical

condition has worsened. If the new

evidence submitted by the parties

establishes at least one of the applicable

conditions of entitlement previously

resolved against the miner, it is

presumed that the miner’s physical

condition has changed since the denial

of his earlier claim. For example, the

miner may establish that his respiratory

impairment is now totally disabling, or

that he has now developed

pneumoconiosis. Once invoked, the

presumption may be rebutted if the

party opposed to the claimant’s

entitlement demonstrates that the denial

of the prior claim was erroneous as a

matter of law.

The Department intends that an

operator shall not be entitled to rebut

the presumption by taking a position

contrary to the position it adopted in the

litigation of the prior claim. For

example, where the operator argued in

the prior claim that the miner was not

totally disabled due to pneumoconiosis

arising out of coal mine employment, it

may not, in an attempt to rebut the

presumption of a change in the miner’s

condition, argue that substantial

evidence in the prior claim supported a

benefit award.

If the presumption is properly

rebutted, the claimant nevertheless will

be entitled to benefits upon a showing

that the miner’s physical condition,

albeit totally disabling earlier, has

significantly deteriorated since the time

of the prior denial. Under the Act, a

totally disabling respiratory impairment

is one which prevents the miner from

performing his usual coal mine work.

Where the miner’s usual coal mine work

required significant physical exertion, a

relatively small respiratory impairment

may be totally disabling. Accordingly,

the miner’s respiratory condition may

continue to deteriorate even after it

reaches the point where it would be

considered totally disabling under the

Act.

The operator or Fund may also use

traditional principles of issue

preclusion to rebut the presumption.

Those principles prohibit the

relitigation of issues where the party

against whom the bar is asserted had a

full and fair opportunity to litigate the

issue in question, and resolution of the

issue was necessary to the prior

judgment. Montana v. United States,

440 U.S. 147, 153 (1979); ‘‘Restatement

(Second) of Judgments’’ § 29 (1982).

Thus, where the original claim was

denied solely on the basis that the

claimant was not a miner, and the

claimant has not returned to work,

relitigation of that issue will be barred.

Because a claimant must establish that

he worked as a miner in order to receive

benefits, the subsequent claim must also

be denied.

If the presumption is not rebutted, the

fact-finder must consider all of the

relevant evidence of record, including

the old evidence, in order to determine

whether the claimant is entitled to

receive benefits. The regulation thus

effectuates the position advanced by the

Department and accepted by the Third

Circuit in Labelle Processing, the Fourth

Circuit in Lisa Lee Mines, and the Sixth

Circuit in Sharondale Corp.

Accordingly, paragraph (d)(1) authorizes

the admission into the record of any

evidence developed in connection with

the earlier claim. To the extent that the

earlier evidence remains relevant to an

evaluation of the claimant’s current
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3353

physical condition, it must be

considered by the adjudication officer.

In addition, both the claimant and the

party opposing the claimant’s

entitlement will be able to submit two

new pulmonary evaluations or

consultative reports, in accordance with

the limits set forth in proposed

§ 725.414.

Paragraph (d)(4) recognizes that, once

a change in one of the applicable

conditions has been established, the

relitigation of issues previously decided

is not precluded. The only exceptions

are those issues to which the parties

stipulated and those issues which were

not contested pursuant to § 725.463. For

example, assume that in a prior

adjudication an administrative law

judge found that the claimant was a

miner but that he did not suffer from

pneumoconiosis. The ALJ accordingly

denied benefits, and the claimant did

not appeal. In a subsequent claim, the

claimant establishes that he now suffers

from pneumoconiosis, and argues that

the operator is precluded from

relitigating his status as a miner. The

claimant is incorrect. Because the

operator was not aggrieved by the denial

of benefits, it could not appeal the ALJ’s

decision to the Benefits Review Board to

seek reversal of the finding that the

claimant was a miner. The operator thus

did not have a full and fair opportunity

to litigate the claimant’s status, and may

not be bound by the prior finding. For

the same reason, once a claimant

establishes a change in an applicable

condition of entitlement, such as the

extent of disability, he is not precluded

from relitigating any other condition of

entitlement, such as the existence of

pneumoconiosis.

Although the Department believes

that parties must be allowed to relitigate

issues decided against them in a prior

claim as a matter of fairness, no such

concerns underlie the treatment of

uncontested issues (see § 725.463) and

other stipulations into which the parties

entered during the adjudication of the

prior claim. Where a party’s waiver of

its right to litigate a particular issue

represents a knowing relinquishment of

that right, such waiver should be given

the same force and effect in subsequent

litigation of the same issue.

The proposed regulation also

recognizes that a claimant whose claim

has been denied may file a new

application within one year of an earlier

denial. Traditionally, such a filing has

been considered a request for

modification, Consolidation Coal Co. v.

Worrell, 27 F.3d 227, 230 (6th Cir.

1994), and the proposed regulation

codifies this practice. Treating a new

application as a modification request is

advantageous for several reasons. First,

because it allows the earlier claim to be

reopened, a modification request

entitles the claimant to have his request

adjudicated under the entitlement

standards in effect at the time the

original claim was filed. Second, if the

claimant establishes a mistake in a

determination of fact, modification

entitles him to receive benefits from an

earlier date, i.e., either from the date on

which the medical evidence establishes

the onset of total disability due to

pneumoconiosis, or, if the evidence

does not establish that date, from the

date the original application was filed.

Eifler v. Office of Workers’

Compensation Programs, 926 F.2d 663,

666 (7th Cir. 1991).

20 CFR 725.310. Paragraph (b) should

be amended to reflect changes to the

procedural regulations restricting the

amount of evidence each party to a

claim may submit. Proposed § 725.414

limits the parties to two pulmonary

evaluations or consultative reports in

the initial adjudication of the claim.

This limitation would be easily avoided,

however, if parties were free to submit

whatever additional evidence they

desired by filing a request for

modification. Consequently, the

proposed regulation places an

additional restriction, of one pulmonary

evaluation or consultative report, on the

submission of evidence in modification

proceedings. See explanation of changes

§ 725.414.

Proposed paragraph (c) attempts to

reconcile a number of court of appeals

cases which address the scope of the

district director’s authority to conduct

modification proceedings under § 22 of

the LHWCA, 33 U.S.C. 922, as

incorporated by 30 U.S.C. 932(a). Four

courts—the Seventh, Ninth, Tenth, and

Eleventh Circuits—have held that a

district director lacks the authority to

modify a decision issued by an

administrative law judge. Director,

OWCP v. Peabody Coal Co., 837 F.2d

295 (7th Cir. 1988); Director, OWCP v.

Palmer Coking Coal Co., 867 F.2d 552

(9th Cir. 1989); Director, OWCP v. Kaiser

Steel Corp., 860 F.2d 377 (10th Cir.

1988); Director, OWCP v. Drummond

Coal Co., 831 F.2d 240 (11th Cir. 1987).

In all four cases, the district director had

initiated modification proceedings in

order to correct allegedly erroneous

determinations imposing liability on the

Black Lung Disability Trust Fund.

In contrast, the Fourth and Sixth

Circuits have held that modification

proceedings must be initiated before a

district director. Saginaw Mining Co. v.

Mazzulli, 818 F.2d 1278 (6th Cir. 1987);

Lee v. Consolidation Coal Co., 843 F.2d

159 (4th Cir. 1988). In both of these

cases, claimants sought to modify

denials of benefits by filing requests for

modification. In its decision, the Sixth

Circuit correctly compared the initial

stages of modification proceedings to

the initial stages of a new claims

proceeding. 818 F.2d at 1282. During

these stages the district director may

resolve all of the relevant issues,

provided he has the consent of the

parties. Thus, the district director may

issue a proposed decision and order

pursuant to 20 CFR 725.418. If no party

lodges a timely objection, the proposed

decision and order will become effective

and final. 20 CFR 725.419(d). Thus,

where no party objects to the proposed

action, and the modification

proceedings were initiated by the

claimant or the responsible operator, it

is unnecessary as well as inefficient to

refer the modification request for a

hearing.

In reconciling the courts of appeals

opinions, the proposed regulation

distinguishes between cases in which

the parties request modification, or in

which the original adjudication of the

claim did not proceed beyond the

district director, and those in which the

district director initiates modification

proceedings sua sponte following an

administrative law judge’s order. In the

first and second groups of cases, the

district director may issue a proposed

decision and order or deny the claim by

reason of abandonment. Because under

the proposed regulations a claimant or

operator may not request a hearing until

after issuance of a proposed decision

and order, the second option contained

in current paragraph (c)—forwarding the

claim for a hearing—has been deleted.

In cases in which the district director

initiates modification proceedings after

issuance of an ALJ’s decision and order,

the proposed regulation requires that

the case be referred to the Office of

Administrative Law Judges even if none

of the parties requests a hearing.

Although the Department views the

proposed distinction as one with little

significance, the proposed regulation is

consistent with the four court of appeals

decisions which require such a result.

Paragraph (c) has also been revised to

ensure that any party that requests

reconsideration receives a full and fair

adjudication of its request. Thus, an

administrative law judge may not deny

modification on the grounds that the

party requesting modification has not

submitted any new evidence. O’Keeffe

v. Aerojet-General Shipyards, Inc., 404

U.S. 249, 256 (1971). In such a case, the

administrative law judge is obligated to

re-weigh all of the existing evidence of

record to determine whether it

establishes that the prior decision is
3354 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

based on a mistake in a determination

of fact.

Finally, proposed paragraph (d)

addresses the effect of a modification

decision on previously paid benefits.

The Department believes that a

distinction should be made between

awards which are overturned on appeal

and awards which are modified. Any

payments made pursuant to an award

which is overturned on appeal may be

subject to recoupment. See 20 CFR part

725, subpart H. Such an award has

never become final and its tentative

nature is therefore apparent to all

parties. In contrast, the proposed

regulation prohibits the recoupment of

benefit payments made pursuant to an

award which is thereafter modified. In

the Department’s view, claimants whose

awards have become final are entitled to

a heightened expectation that they will

be able to keep the monthly benefits that

they receive.

20 CFR 725.311. Paragraph (c) of

current § 725.311 has created

considerable confusion regarding the

due dates for replies and responses

under the regulations in part 725. The

Department does not believe that seven

additional days should be added to the

time periods within which to respond to

major events in the claims process, such

as the notification of a potentially liable

operator, the notice of initial

determination, and the proposed

decision and order awarding benefits.

Many of these time periods, none of

which is less than 30 days, may be

extended for good cause shown.

Consequently, the Department does not

believe that the 7-day mail rule is

necessary, and proposes to remove

paragraph (c). Additionally, current

paragraph (d), which the Department

proposes to redesignate as paragraph (c),

is amended to add the birthday of

Martin Luther King, Jr., as a legal

holiday.

Proposed paragraph (d) addresses an

issue which has created a split between

the Fourth and Tenth Circuits. In

Dominion Coal Corp. v. Honaker, 33

F.3d 401 (4th Cir. 1994), the Fourth

Circuit held that where an

administrative law judge’s decision was

not served by certified mail as required

by the statute, the time period for

appealing that decision commenced on

the date that the aggrieved party

received actual notice of the decision.

The court held that ‘‘[w]hen the record

establishes actual notice, the purpose of

the statutory certified mail requirement

has been met.’’ 33 F.3d at 404. In Big

Horn Coal Co. v. Director, OWCP, 55

F.3d 545 (10th Cir. 1995), the Tenth

Circuit reached a contrary conclusion.

Although ‘‘[a]llowing the 30-day period

to start with actual notice would have

the salutary effect of encouraging

finality of administrative judgments

when the only defect was the

procedural one of failing to use certified

mail in serving th[e] order,’’ the court

held that there was no provision in the

statute or regulations which permitted it

to reach such a result. 55 F.3d at 550.

In order to resolve this split, and to

advance the policy considerations cited

by both courts, proposed paragraph (d)

provides that, where an adjudication

officer has failed to comply with a

statutory or regulatory certified mail

requirement, but the party has received

the document, the period for filing any

responsive pleading shall commence as

of the date of receipt.

Subpart D—Adjudication Officers;

Parties and Representatives

20 CFR 725.360. Technical changes to

the cross references in paragraphs (a)(3)

and (c) conform with revisions to

§§ 725.401–.422.

20 CFR 725.362. The proposed

amendment to paragraph (a) makes the

regulation conform with the

requirements of 5 U.S.C. 500(b), which

allows an attorney to appear on behalf

of a party without submitting an

authorization signed by the party. The

requirements for representation by any

individual who is not an attorney in

good standing with his state bar remain

unchanged. In such circumstances, the

Department requires an authorization

signed by the party. Finally, the

requirement that any written declaration

or notice identify the case by OWCP

number will allow OWCP to ensure

proper and timely filing of the

appearance.

20 CFR 725.367. The current

regulation governing an operator’s

payment of a claimant’s attorney fee is

taken nearly verbatim from § 28 of the

Longshore and Harbor Workers’

Compensation Act, 33 U.S.C. 928,

without recognizing significant

differences in the procedure for

adjudicating claims under the Black

Lung Benefits Act. Accordingly, its

interpretation has caused considerable

confusion, particularly with respect to

the date on which an operator’s liability

for attorney’s fees is triggered. See, e.g.,

Bethenergy Mines v. Director, OWCP,

854 F.2d 632 (3d Cir. 1988). In addition,

the regulation originally sought to

shield the Trust Fund from the payment

of attorney’s fees. A series of court

decisions, however, held that the fund

assumes all of the obligations of an

operator, including liability for the

claimant’s attorney’s fees, in cases

where no operator can be held liable for

the payment of benefits. Director, OWCP

v. Black Diamond Coal Mining Co., 598

F.2d 945 (5th Cir. 1979); Director,

OWCP v. South East Coal Co., 598 F.2d

1046 (6th Cir. 1979); Republic Steel

Corp. v. U.S. Dept. of Labor, 590 F.2d

77 (3d Cir. 1978).

The proposed regulation seeks to

clarify the application of § 28 of the

LHWCA to adjudication under the Black

Lung Benefits Act. It also provides a

non-exclusive list of specific instances

in which an operator is required to pay

attorney’s fees and the dates on which

the operator’s liability commences. The

proposed regulation also recognizes the

Trust Fund’s liability for attorney’s fees,

and makes it coextensive with that of a

liable operator. Specifically, in

proposing paragraph (a)(2), the

Department intends to change the result

of the decision of the Benefits Review

Board in Yokley v. Director, OWCP, 3

Black Lung Rep. (MB) 1–230 (1981).

There, in the absence of a regulation

specifically addressing the fund’s

liability for attorney’s fees, the Board

held that the fund became liable for the

payment of such fees when the district

director failed to award benefits within

30 days of the date on which he learned

that there was no potentially liable

responsible operator. Yokley, 3 Black

Lung Rep. at 1–239. The Department

believes that the event triggering the

fund’s liability for attorney’s fees should

be identical to the event that triggers an

operator’s liability, i.e., a denial of the

claimant’s right to compensation within

the time limits provided by the

regulations, which creates the

adversarial relationship requiring

employment of an attorney. See

Director, OWCP v. Bivens, 757 F.2d 781,

787 (6th Cir. 1985).

Subpart E—Adjudication of Claims by

the District Director

20 CFR 725.405. The proposed change

in paragraph (b) recognizes the

Department’s current practice of

refusing to provide a complete

pulmonary evaluation if the district

director concludes, based on the initial

evidence submitted by the claimant,

that the claimant never worked as a

miner.

20 CFR 725.406. Section 413(b) of the

Act, 30 U.S.C. 923(b), guarantees each

miner the opportunity to have a

complete pulmonary evaluation

performed, at no expense to the miner,

in order to establish his entitlement to

benefits. Although the existing

regulation allows a claimant to have this

evaluation performed by his own

physician, it does not address the

consequences of that selection. The

adequacy of the § 413(b) examination

and resulting report have been
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3355

frequently litigated. For example, if the

report does not address all of the

elements of entitlement, the Department

has been required to remedy the

deficiency, see, e.g., Cline v. Director,

OWCP, 917 F.2d 9, 11 (8th Cir. 1990),

even if the physician who authored the

report was one of the claimant’s

choosing. Given the Department’s

proposal to place limits on the amount

of evidence submitted by the parties,

and the importance of the § 413(b)

examination, which forms the

evidentiary basis for the district

director’s initial finding, the Department

wishes to explain in greater detail the

manner in which it will provide the

claimant with a complete pulmonary

evaluation.

The proposed regulation clarifies the

consequences of a claimant’s decision to

select an alternate physician or facility

to conduct his complete pulmonary

evaluation. First, the claimant must

undergo all of the testing necessary to

produce an examination that meets the

requirements of § 718.104. If the

physician or facility selected by the

claimant cannot perform all of the tests

needed, the Department will arrange for

the claimant to undergo the additional

testing before the miner undergoes his

examination.

Second, the Department will

determine whether each component of

the evaluation, including the chest Xray, the pulmonary function study, and

the blood gas study, is in substantial

compliance with the regulatory quality

standards. The Department reserves the

right to have each such test reviewed by

a medical consultant in order to assist

in this determination. However, the

Department will only guarantee

substantial compliance with the quality

standards if the testing and the resulting

report are prepared by a Departmentselected physician or facility. It has long

been the Department’s position that,

with the exception of deficiencies

attributable to poor effort on the part of

the miner, the Department has an

affirmative obligation to ensure that

each test substantially complies with

the part 718 quality standards, and that

the physician provides a documented

and reasoned medical opinion on each

element of entitlement. For example,

where the miner’s blood gas study is

non-conforming, or the physician fails

to address the issue of total disability,

or the district director does not find the

physician’s report credible, the

Department must either seek additional

information from the physician or

provide the miner with a wholly new

examination.

The proposed regulation retains this

rule with respect to physicians and

facilities selected by the Department.

With respect to physicians and facilities

selected by the miner, the regulation

requires the district director, after

determining whether the testing

complies with the quality standards, to

inform the miner and the physician or

facility of any deficiencies in the report,

and allow sufficient time to correct such

deficiencies. If the deficiencies are not

corrected, however, the district director

is not obligated to take any further

action. The district director retains the

authority to order another examination

by a physician or medical facility

selected by the district director.

Third, proposed § 725.406 specifies

that if the miner selects the physician,

that report will count as one of the two

reports which a claimant is entitled to

submit under the proposed evidentiary

limitations in § 725.414. If the

Department selects the physician, the

claimant may submit two other reports.

Finally, the regulation, in

combination with changes to 20 CFR

725.101(a)(6), clarifies the mechanism

by which the Department may seek

recoupment of the cost of the § 413(b)

examination from a coal mine operator

that has been finally determined to be

liable for the claimant’s benefits.

Although the current regulation states

that the Department is entitled to

reimbursement, it fails to refer

specifically to the most appropriate

method for recouping amounts owed the

Trust Fund, 30 U.S.C. 934.

Consequently, a clarification is in order.

20 CFR 725.407. Paragraphs (a) and

(c) of the current § 725.407 have been

moved to § 725.406. Paragraph (b),

which allowed claimants to develop

additional evidence prior to the initial

finding, has been eliminated. Instead,

the development by the parties of

evidence relevant to the miner’s

entitlement will be governed by

§§ 725.413–.414. For an explanation of

the proposed text, see the explanation of

changes to § 725.408.

20 CFR 725.408. The current

§ 725.408 has been eliminated. The

sanctions it provides for a claimant’s

failure to submit to medical

examinations are contained in proposed

§§ 725.409 and 725.414. Proposed

§§ 725.407 and 725.408 replace the

current regulations found at 20 CFR

725.412 and 725.413, governing the

notification of, and response by,

potential responsible operators. The

proposed changes are part of an effort to

deal with difficulties that the

Department has encountered in

effectuating Congress’s mandate that

liability for black lung benefits be borne

by individual coal mine operators to the

maximum extent feasible. See Old Ben

Coal Co. v. Luker, 826 F.2d 688, 693 (7th

Cir. 1987). Past difficulties in naming

potential responsible operators have

included: (1) the practice among

operators of filing ‘‘blanket’’

controversions, denying every element

of the liability issue, which generally

are not supported by any evidence and

are later withdrawn in substantial part;

and (2) the tardy submission of evidence

relevant to operator liability, often only

when the claim is pending before the

Office of Administrative Law Judges.

These late evidentiary submissions have

increased the likelihood of an incorrect

responsible operator determination by

the district director and have led to

greater Trust Fund liability under the

Board’s decision in Crabtree v.

Bethlehem Steel Corp., 7 Black Lung

Rep. 1–354 (1984).

The proposed regulations create a

new subclass of operators. Out of all of

the miner’s former employers, one or

more operators may be designated as

‘‘potentially liable operators.’’ The

potentially liable operator that most

recently employed the claimant will

generally be the responsible operator

liable for the payment of benefits. The

proposed regulation affords the district

director considerable flexibility,

however, in notifying potentially liable

operators. If the miner was most

recently employed for a substantial

period of time by a fully insured

operator, the district director need

notify only that operator of its potential

liability. If the miner’s most recent

employer had no insurance and appears

to lack other assets, or employed the

miner in a capacity which may not be

considered coal mine employment, the

district director may choose to notify

more than one potentially liable

operator. Moreover, the district director

may notify such operators seriatim; after

evaluating the response from the

miner’s most recent employer, or failing

to receive any response, the district

director may notify additional operators.

The district director’s additional

flexibility also imposes greater

responsibility. Unlike the current

version of § 725.412(c), the proposed

standards do not allow a district

director to name any additional

operators after a case has been referred

to the Office of Administrative Law

Judges, in the absence of fraudulent

concealment of the facts relevant to the

identification of the responsible

operator. Thus, the Department will

essentially assume the risk of not

notifying the ‘‘correct’’ responsible

operator.

In order to offset this risk, the

regulations require potentially liable

operators to produce any exculpatory
3356 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

documentary evidence while the case is

still pending before the district director,

and thus in sufficient time to allow the

district director to notify additional

operators. Each operator must either

admit or deny its status as a potentially

liable operator, and support its denial

with specific evidence. It is hoped that

this requirement will increase the

Department’s ability to correctly

identify the responsible operator liable

for the payment of benefits. For a

discussion of the effects of the BLBA

and the Administrative Procedure Act

on the Department’s ability to impose

time limits on the parties’ submission of

this evidence, see the explanation of

changes to § 725.414.

20 CFR 725.409. The proposed

revisions add a new basis for denying a

claim by reason of abandonment and

clarify the procedures to be used in

denying a claim by reason of

abandonment. The Department has

interpreted current § 725.409(a)(3) to

include failure to appear at an informal

conference, and the Fourth Circuit

recently confirmed the use of that

paragraph in Wellmore Coal Co. v.

Stiltner, 81 F.3d 490, 497 (4th Cir.

1996). The proposed addition of

paragraph (a)(4) will make that authority

explicit. A corresponding change has

been made to § 725.416(c), to provide

similar sanctions against a responsible

operator for its unexcused failure to

appear.

The proposed changes also clarify the

procedures for denying claims by reason

of abandonment. Currently, the

regulations allow the claimant to

undertake a variety of actions in

response to an initial notice that the

claim will be abandoned. The proposed

regulation at paragraph (b) allows the

claimant only two options following the

district director’s initial letter: (1)

correct the problem identified by the

district director; or (2) allow the district

director to deny the claim by reason of

abandonment, and then request a

hearing, which will be limited to the

issue of whether the district director

properly initiated abandonment

proceedings.

20 CFR 725.410–413. The proposed

regulations governing the district

director’s initial adjudication of the

claim, §§ 725.410–.413, differ from the

current regulations in several respects.

In general, they provide for a two-track

investigation, allowing the district

director to make a preliminary

determination of entitlement while

concurrently seeking a coal mine

operator that may be held liable for the

payment of the claimant’s benefits. It is

anticipated that these two investigations

will culminate in a single document, the

initial finding. That document will

contain a preliminary finding as to the

claimant’s eligibility, based on the

complete pulmonary evaluation

developed in accordance with § 413(b)

of the Act, and another finding with

respect to the potentially liable

responsible operator. The operator will

then be required to accept or contest

both findings within 30 days of the

initial finding’s issuance.

The most important change in these

proposed regulations involves the

claimant’s response to a district

director’s initial finding that the

claimant is not eligible for benefits.

Currently, the claimant is allowed 60

days within which to request a hearing

or submit new evidence. If he submits

new evidence, he is given an additional

60 days within which to request a

hearing. Often, however, the

Department receives communications

from claimants which do not fit neatly

into either option. The result has been

the litigation of various procedural

issues. See, e.g., Adkins v. Director,

OWCP, 878 F.2d 151 (4th Cir. 1989);

Plesh v. Director, OWCP, 71 F.3d 103

(3d Cir. 1995). The Department hopes to

eliminate such litigation through the

proposed amendment.

The proposed regulations therefore

address the problems that the

Department has encountered in

applying the current regulations. They

narrow the claimant’s options following

an initial finding of non-eligibility to a

single choice, but expand the time

period within which this option may be

exercised. Within one year of an initial

finding of non-entitlement, the claimant

may request further adjudication of the

claim, but he may not request a hearing

at this point. If the claimant fails to take

any action during the one-year period

following an initial finding which

denies the claim, the denial of the claim

will be considered effective and final as

of the date of the initial finding. The

one-year period, which incorporates the

modification period of 33 U.S.C. 922

into the initial processing of the claim,

reflects the Department’s experience in

administering the program. Miners who

truly feel that they are disabled will

typically request further processing of

their claim within one month of an

initial denial. Others, perhaps less sure

of whether their condition actually

meets the Department’s total disability

due to pneumoconiosis criteria, may

wait to determine whether their

condition worsens. Such miners are

entitled to take advantage of the oneyear period in LHWCA § 22, as

incorporated by 30 U.S.C. 932(a). The

proposed regulation accommodates both

types of claimants, by allowing any

response within the one-year period to

trigger further adjudication of the claim.

After receiving responses from both

parties (or after expiration of the time

within which a response could be filed),

the district director will proceed in

accordance with those responses. Where

a claimant’s eligibility and the identity

of the liable party are uncontested, the

district director will issue a proposed

decision and order. In other cases, the

district director will issue a schedule for

the submission of evidence by the

parties. For a discussion of the effects of

the BLBA and the Administrative

Procedure Act on the Department’s

ability to impose time limits on the

parties’ submission of evidence, see the

explanation of changes to § 725.414.

20 CFR 725.414. Proposed paragraph

725.414(a) reflects the Department’s

determination that the disparity in

financial resources available to

claimants, as compared to coal mine

operators, has created an adverse impact

on the fair adjudication of claims.

Limitations on the amount of medical

evidence which the parties may proffer

are therefore necessary in order to

restore some measure of balance to the

process of determining a claimant’s

entitlement. Accordingly, a new

regulation is proposed which defines

the amount, and type, of medical

evidence which each party may proffer

in support of its position. We are

specifically seeking comment on the

proposed evidentiary limitations in

§ 725.414. This regulation also will

require the parties to submit their

written medical evidence to the district

director. Generally, once a claim is

referred for hearing before an

administrative law judge, the parties

may only elicit oral testimony.

The Department now has more than

20 years of experience in processing and

adjudicating black lung benefits claims,

and more than thirteen years of

experience in adjudicating claims under

the current program regulations. This

long history demonstrates claimants’

present difficulty in establishing their

entitlement. Part of that difficulty can be

attributed to changes in medical criteria

and eligibility standards imposed by

Congress in 1981. Also important,

however, are the obstacles claimants

face when confronted by coal mine

operators and their insurance carriers as

adversaries. Such parties possess

economic resources far superior to most

claimants, which enable them to

generate medical evidence in such

volume that it overwhelms the evidence

supporting entitlement. The proposed

changes to the program regulations

governing claims adjudication attempt
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3357

to make more equitable the evidentiary

development in black lung claims.

When Congress amended the BLBA in

1978 to permit the reopening of many

thousands of denied claims, it required

the claimants’ entitlement to be judged

using liberal interim medical criteria (20

CFR part 727). 30 U.S.C. 902(f)(2). As a

result, claims reopened by the

amendments enjoyed a 46.0 percent

approval rate at the district level.

(Statistical data reported in ‘‘OWCP

FY94 Annual Report to Congress,’’

Table B–1). Congress also required the

Department, in conjunction with the

National Institute for Occupational

Safety and Health (NIOSH), to develop

permanent ‘‘criteria for all appropriate

medical tests * * * which accurately

reflect total disability in coal miners

* * * .’’ 30 U.S.C. 402(f)(1)(D). The

Department thereafter promulgated the

part 718 regulations; these criteria apply

to all claims filed after March 31, 1980.

For claims filed between the 1978

amendments and the effective date of

the part 718 regulations, the Department

still utilized the part 727 criteria.

Consequently, the district level approval

rate, at 34.0 percent, was generous.

Once the more rigorous part 718

standards took effect, however, the

approval rate dropped to 10.9 percent

for all claims filed between April 1,

1980 and December 31, 1981, and

adjudicated at the district level.

Congress again amended the BLBA to

tighten eligibility requirements for

claims filed after December 31, 1981.

Statutory changes which reduced claims

approvals included elimination of

favorable entitlement presumptions and

automatic survivor’s entitlement upon

the death of a miner whose claim had

been awarded. See 20 CFR 725.1(a), (h).

The district level approval rate for

claims filed after December 1981 was

5.0 percent as of the end of the 1994

fiscal year. Claimants fared little better

if they pursued their applications

beyond the district level by requesting

hearings before the Office of

Administrative Law Judges; the

approval rate for such claims during the

same period rose only to 7.6 percent.

The dramatically lower approval rates

reflect not only the statutory changes,

but also the increasing percentage of

claims in which coal mine operators or

their insurers, rather than the Black

Lung Disability Trust Fund, are

potentially liable. Their superior

economic resources simply permit

evidentiary development which

outweighs the evidence claimants can

procure. The United States Court of

Appeals for the Sixth Circuit has

commented on this problem:

This cumulative evidence inquiry also

reveals certain policy flaws in the

adjudication of claims that typically operate

to disadvantage Black Lung Benefits Act

claimants. First, experts hired exclusively by

either party tend to obfuscate rather than

facilitate a true evaluation of a claimant’s

case. Second, when one party is able to hire

significantly more experts because it has

infinitely more resources, the truth-seeking

function of the administrative process is

skewed and directly undermined. Third,

hiring armies of experts often results in

needless expense. If such a system continues

unchecked, justice will not be served, while

moneyed interests thrive.

Woodward v. Director, OWCP, 991 F.2d

314, 321 (6th Cir. 1993). See also

Timothy Cogan, ‘‘Is the Doctor Hostile?

Obstructive Impairments and the

Hostility Rule in Federal Black Lung

Claims,’’ 97 W. Va. L. Rev. 1003, 1004

fn. 3 (1995). As a possible solution, the

Sixth Circuit suggested that the

administrative law judge prevail upon

the parties to accept negotiated

evidentiary limitations and share the

cost of hiring physicians.

The Department believes that the

concerns expressed by the Court in

Woodward are valid. Rather than

address those concerns through an ad

hoc resort to each adjudicator’s

discretion, however, a ‘‘bright-line’’ rule

of uniform application is preferable.

Such a rule imposes a known standard

of conduct on the parties from the

outset, which enables them to plan their

litigation strategies accordingly. The

proposed regulation therefore limits

each side to two complete pulmonary

examinations and one ‘‘interpretive’’

review (x-ray rereadings, clinical test

validations, etc.) of each of its

opponent’s diagnostic studies and

examinations. This amount of evidence

should be sufficient to enable each party

to advance or defend its position while

satisfying the demands of ‘‘due

process.’’ The Commonwealth of

Kentucky has imposed similar

limitations on the evidence submitted in

connection with claims for workers’

compensation. Kentucky Revised

Statutes Annotated §342.033 (Michie/

Bobbs-Merrill 1993). Limiting evidence

will also have the salutary effect of

reducing the costs associated with

litigating claims and the amount of

repetitive evidence which often burdens

the record without shedding light on the

medical issues.

The proposed regulation also

fundamentally restructures the claims

adjudication process by focusing

evidentiary development at the district

director level. The regulation requires

all parties to develop their documentary

medical evidence and submit it to the

district director for consideration. In

general, once a claim is referred for a

hearing before the Office of

Administrative Law Judges, no further

documentary medical evidence will be

admitted into the record. Only if there

are extraordinary circumstances or the

pulmonary evaluation obtained by the

Department is insufficient or incomplete

may the Administrative Law Judge

admit additional documentary medical

evidence into the record. The

Administrative Law Judge will conduct

the hearing and permit the parties to

elicit testimony from witnesses,

including any physician whose report is

in the record. The judge will base his

decision on the evidentiary record

developed by the district director and

the hearing testimony.

The foregoing procedure departs from

current practice by severely limiting the

admission of new documentary medical

evidence while a claim is pending

before an Administrative Law Judge.

Parties presently often reserve the active

development of medical evidence until

a claim is scheduled for hearing.

Permitting additional evidentiary

development before the Administrative

Law Judge was logical when significant

delays occurred between the district

director’s decision and the hearing

before the Administrative Law Judge.

Given the progressive nature of

pneumoconiosis, additional evidence

was usually necessary for the

Administrative Law Judge to receive an

accurate understanding of the miner’s

health. Such delays no longer occur in

a statistically significant percentage of

claims. Consequently, the practical need

for permitting evidentiary development

at the hearing stage has disappeared.

Litigation strategy, as well as delays,

has also encouraged operators to defer

active participation and evidentiary

development until claims were referred

for hearing. Over time, this practice has

significantly eroded the ability of the

Department to conduct a thorough and

meaningful initial adjudication of each

claim at the district level. Because delay

is no longer a legitimate consideration,

the proposed regulation requires full

operator participation before the district

director.

The Department believes that the fair,

efficient and expeditious adjudication of

claims is a desirable objective which

can be promoted by limiting the amount

of medical evidence developed and

encouraging all parties to participate

actively at the earliest stages of the

process. The Secretary clearly has the

statutory authority to issue regulations

which achieve this goal. The BLBA

provides that ‘‘[t]he Secretary of Labor

* * * [is] authorized to issue such

regulations as [he] deems appropriate to
3358 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

carry out the provisions of this title.’’ 30

U.S.C. 936(a). The legislative history of

this broad grant of authority

‘‘establishes that Congress intended to

provide the Secretary adequate

flexibility to assure the payment of

benefits to eligible persons.’’ Director,

OWCP v. National Mines Corp., 554

F.2d 1267, 1274 (4th Cir. 1977) (footnote

omitted). The Secretary has already

issued several regulations (discussed

below) which address the submission or

exclusion of evidence. This proposed

regulation involves the same matter, and

is a permissible exercise of the

Secretary’s statutory authority.

Moreover, Part C of the BLBA

assimilates various provisions of Part B

of the BLBA and the Social Security Act

by means of a circuitous series of

incorporations by reference. The BLBA

states that ‘‘[t]he amendments made by

the Black Lung Benefits Act of 1972,

* * * to Part B of [title IV] shall, to the

extent appropriate, also apply to part C

of [title IV].’’ 30 U.S.C. 940. Section

923(b), in turn, incorporates various

provisions of the Social Security Act

into Part B. The 1972 amendments

revised § 923(b) to make § 405 of the

Social Security Act, 42 U.S.C. 405,

applicable to Part B. Consequently,

§ 940 makes § 405 of the Social Security

Act applicable to Part C via § 923(b).

Among the incorporated SSA provisions

is § 405(a), which states as follows:

The Secretary shall have full power and

authority to make rules and regulations and

to establish procedures, not inconsistent with

the provisions of this subchapter, which are

necessary or appropriate to carry out such

provisions, and shall adopt reasonable and

proper rules and regulations to regulate and

provide for the nature and extent of the

proofs and evidence and the method of

taking and furnishing the same in order to

establish the right to benefits hereunder.

42 U.S.C. 405(a) (1995 supp.). Section

405(a) contains ‘‘exceptionally broad’’

authority to prescribe standards for

‘‘proofs and evidence’’ in disability

claims under the SSA. Heckler v.

Campbell, 461 U.S. 458, 466 (1983); see

also Schweiker v. Gray Panthers, 453

U.S. 34, 43 (1981). Under the aegis of

this authority, the Supreme Court has

upheld the Social Security

Administration’s use of broad medicovocational guidelines to determine

whether a claimant is disabled; the

guidelines provided an acceptable

substitute for resolving classes of issues

instead of requiring individualized

findings in each case concerning the

claimant’s ability to perform work in the

national economy. Heckler, 461 U.S. at

467. Pursuant to § 405(a), the SSA has

also validly promulgated a regulation

prescribing criteria for weighing

medical reports from treating physicians

(20 CFR 404.1527). Schisler v. Sullivan,

3 F.3d 563, 568 (2d Cir. 1993). The

proposed regulation is designed to

regulate the ‘‘nature and extent of the

proofs and evidence and the method of

taking and furnishing’’ such evidence

for adjudicating black lung benefits

claims. Its promulgation therefore

comes within the authority conferred on

the Secretary by Congress through the

incorporation of 42 U.S.C. 405(a) into

the BLBA.

Both individually and together,

§§ 936(a) and 405(a) authorize the

Secretary to regulate evidentiary

development under the BLBA. Whether

the proposed procedures represent a

valid exercise of that authority depends

on their consistency with the BLBA and

the Administrative Procedure Act, 5

U.S.C. 551 et seq. (the APA). The BLBA

is the organic statute; the regulation

must therefore be consistent with its

enabling authority. Hearings under the

BLBA must be conducted in accordance

with the APA. 33 U.S.C. 919(d), as

incorporated by 30 U.S.C. 932(a); 20

CFR 725.452(a). Neither statute

prohibits the Department from imposing

reasonable limitations on evidence.

Section 923(b) of the BLBA provides

that ‘‘all relevant evidence shall be

considered.’’ 30 U.S.C. 923(b). Like

§ 405 of the Social Security Act, this

provision applies to Part C via the

incorporation mechanism of § 940;

Congress added the ‘‘all relevant

evidence’’ language to § 923 in the 1972

amendments. Section 940, however,

contains an important qualifier: the

enumerated Part B amendments apply

only ‘‘to the extent appropriate.’’ This

phrase confers on the Secretary the

explicit authority to determine which

aspects of Part B should be adopted, and

to what extent. The proposed regulation

represents the Secretary’s judgment as

to the appropriate extent to which ‘‘all

relevant evidence’’ should be admitted

for consideration by the factfinder. (The

Department has not adopted all of the

SSA provisions incorporated by the

1972 amendments and enumerated in

§ 923(b). For example, § 405(j) contains

an elaborate and detailed procedure for

certifying benefits payments to a

representative payee rather than the

beneficiary; the Department’s

regulations are less comprehensive than

the statutory provisions. Compare 42

U.S.C. 405(j) with 20 CFR 725.510,

725.511. Furthermore, the Department

has not promulgated regulations which

implement the SSA attorney fee or

criminal penalties provisions. See 42

U.S.C. 406, 408.)

Read literally and without regard to

the remainder of the provision, the ‘‘all

relevant evidence’’ language arguably

requires the admission for consideration

of any evidence which could be relevant

to the adjudication of a claim. The

phrase appears less than clear, however,

when the remainder of § 923(b) is

considered. A literal reading infringes

on § 923(b)’s incorporation of broad

agency authority from the Social

Security Act to regulate ‘‘the nature and

extent of the proofs and evidence and

the method of taking and furnishing the

same,’’ discussed earlier. Such a reading

would proscribe the agency from

implementing procedures which impose

any evidentiary controls unrelated to

the sole criterion of relevance.

Section 923(b) itself contains an

important limitation on the

consideration of potentially ‘‘relevant’’

evidence by the adjudicator. For claims

filed before January 1, 1982, the

Department is required to accept a

positive x-ray reading which meets

certain requirements. For any claim,

§ 923(b) requires the Department to

accept the results of an autopsy as to the

presence and stage of pneumoconiosis

unless fraud or accuracy are implicated.

Consequently, the Department is

precluded from submitting (or, as the

adjudicator, considering) relevant

evidence which contradicts the x-rays or

autopsies subject to § 923(b). Thus, the

actual scope of the phrase ‘‘all relevant

evidence’’ is unclear when it is

considered in relation to other parts of

§ 923(b).

If a literal reading of a statutory

provision’s language does not provide

an unambiguous explanation of its

intended operation, then resort to its

legislative history is warranted. See

Burlington No. R. Co. v. Okla. Tax

Comm’n, 481 U.S. 454, 461 (1987).

Congress added the ‘‘all relevant

evidence’’ language when it amended

the BLBA in 1972. The amendment

represented a reaction to the Social

Security Administration’s heavy

reliance on negative x-rays in denying

claims, and its failure to develop other

evidence which might support

entitlement. See S. Rep. No. 92–743,

92nd Cong., 2nd Sess., at pp. 13–16

(1972), reprinted in ‘‘Legislative History

of the Federal Coal Mine Health and

Safety Act of 1969,’’ Part II—Appendix,

at pp. 1958–1961. ‘‘Every available

medical tool should be used to assist a

miner in successfully pursuing his

claim for benefits.’’ Id. at 15. Thus, the

historical context of the language

demonstrates that it is a statutory

exhortation for the agency to explore

every avenue which may prove the

claimant’s entitlement. Given the policy

behind the provision, its apparent

breadth should not act as a guarantor for
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3359

the admission of any quantity of

evidence an operator might obtain

which refutes a claimant’s entitlement.

Under the current program

regulations, § 923(b) does not prohibit

the exclusion of certain evidence

despite its relevance. For example, an

operator may not present evidence

which conflicts with findings made by

the district director if the operator fails

to make certain responses in a timely

manner. 20 CFR 725.413(b)(3) (response

to notice of claim); 725.414(b) (response

to initial finding). Any documentary

evidence which is withheld from the

district director must be excluded from

all future proceedings unless

submission is requested by another

party or ‘‘extraordinary circumstances’’

exist. 20 CFR 725.414(e)(1), 725.456(d).

Any party’s failure to submit evidence

within specified time frames, failure to

provide proper notification of an expert

witness’ hearing appearance, or failure

to appear at a hearing without

permission, are also grounds for limiting

or excluding evidence. 20 CFR

725.456(b)(2), 725.457(a), 725.461(b).

None of these exclusionary regulations

permits relevance to excuse the

infraction.

Many of the foregoing procedures

were ‘‘intended to expedite the claims

process, eliminate surprise, and require

the parties to undertake a timely

development of their positions.’’ 43 FR

36798, Aug. 18, 1978, § 725.456,

Discussion and changes (a). In

promulgating these regulations in 1978,

the Department concluded that

‘‘[n]either the act, nor the

Administrative Procedure Act, to the

extent that it is incorporated, prohibits

the Department from designing rules

which diminish the element of surprise

from black lung claims procedures.’’ 43

FR 36794, Aug. 18, 1978, § 725.414,

Discussion and changes (a). The

proposed regulation also satisfies valid

policy considerations by limiting

evidentiary development in the interests

of a fairer and more balanced

adjudication process. It encourages the

expeditious and timely development of

the parties’ positions by focusing much

of that development at the district level.

Consequently, the regulation promotes

the same policy goals as some of the

current regulations in excluding or

limiting the admission of otherwise

relevant evidence.

The proposed regulation also affects

the conduct of formal hearings by

administrative law judges, which are

governed by the APA. 5 U.S.C. 554(a).

Section 556(d) provides in pertinent

part:

* * * Any oral or documentary evidence

may be received, but the agency as a matter

of policy shall provide for the exclusion of

irrelevant, immaterial, or unduly repetitious

evidence. * * * A party is entitled to present

his case or defense by oral or documentary

evidence, to submit rebuttal evidence, and to

conduct such cross-examination as may be

required for a full and true disclosure of the

facts.

5 U.S.C. 556(d). The proposed

regulation obviously limits the literal

language of § 556(d), which permits

receipt of ‘‘any * * * documentary

evidence.’’ The documentary evidence

which the ALJ generally may receive

under this proposal would consist of the

record compiled and transmitted by the

district director; that record itself would

be limited in quantity to a certain

amount of documentary medical

evidence submitted by each party. To

the extent that the regulation departs

from § 556(d), the Department believes

that the Secretary has the authority to

promulgate regulations which vary the

APA’s hearing requirements.

Section 956 of the Mine Safety and

Health Act states that, ‘‘[e]xcept as

otherwise provided in this chapter, the

provisions of sections 551 to 559 * * *

of Title 5 shall not apply to the making

of any order, notice, or decision made

pursuant to this chapter, or to any

proceeding for the review thereof.’’ 30

U.S.C. 956. ‘‘This chapter’’ is a reference

to chapter 22 of Title 30, United States

Code, which codifies the Mine Safety

and Health Act. The BLBA is subchapter

IV of that Act. Section 956 therefore

exempts application of the APA to the

BLBA unless ‘‘otherwise provided in

this chapter.’’

Section 932(a) of the BLBA

incorporates by negative reference § 919

of the LHWCA, which in turn requires

hearings to be conducted in accordance

with the APA. Section 932(a), however,

also provides the Secretary with the

authority to depart from the terms of the

incorporated provisions of the LHWCA.

Specifically, portions of the LHWCA

apply to Part C of the BLBA ‘‘except as

otherwise provided * * * by

regulations of the Secretary.’’ 30 U.S.C.

932(a). Section 919 of the LHWCA is the

vehicle by which the APA applies, since

§ 956 generally exempts title 30, United

States Code, from the APA. By

regulation, therefore, the Secretary can

‘‘otherwise provide’’ the extent to which

the incorporated provision of the

LHWCA makes the APA applicable. The

proposed regulation provides the

guidelines and limitations for

developing evidence in connection with

the adjudication of a claim for benefits

before the administrative law judge.

Consequently, to the extent the

regulation departs from the APA, that

departure is ‘‘otherwise provided’’ by

part 725. The Department adopted this

position in Director, OWCP v.

Greenwich Collieries, Inc., 114 S.Ct.

2251 (1994), as a basis for supporting

the ‘‘true doubt’’ rule. The Court did not

reach the merits of this argument

because it held that the regulation at

issue was too broad to overcome a

presumption that the APA hearing

procedures applied. 114 S.Ct. at 2254.

In any event, the proposed regulation

is consistent with the objective behind

the allowance for the receipt of ‘‘any’’

evidence. In ‘‘The Attorney General’s

Manual on the Administrative

Procedure Act’’ at 76 (1947), reprinted

in ‘‘Federal Administrative Procedure

Sourcebook’’ 51, 125 (1985), the

following discussion occurs:

Under section [556(d)] it is clear that, as

heretofore, the technical rules of evidence

will not be applicable to administrative

hearings. [Citation omitted.] Thus, it is stated

that ‘‘the mere admission of evidence is not

to be taken as prejudicial error (there being

no lay jury to be protected from improper

influence) although irrelevant, immaterial,

and unduly repetitious evidence is useless

and is to be excluded as a matter of efficiency

and good practice.’’ [Citation omitted.]

This gloss suggests that § 556(d)

cannot be read as a literal directive to

admit all evidence any party may

proffer unless the evidence is

‘‘irrelevant, immaterial or unduly

repetitious.’’ Rather, the purpose of the

admission/exclusion language is to

eliminate technical evidentiary rules as

grounds for assigning error to the liberal

admission of evidence. A general policy

favoring the admission of evidence over

its exclusion on technical grounds does

not thereby preclude an agency from

determining in the first instance what

evidence, and how much, may be

admitted as ‘‘relevant’’ and ‘‘material’’.

To interpret § 556(d) otherwise would

effectively read out of the BLBA the

broad authority contained in provisions

like § 405(a) to regulate the evidence

used to establish entitlement to benefits.

The APA is modeled on the hearing

procedures contained in § 205(b) of the

Social Security Act, and ‘‘the social

security administrative procedure does

not vary from that prescribed by the

APA.’’ Richardson v. Perales, 402 U.S.

389, 409 (1971), citing ‘‘Final Report of

the Attorney General’s Committee on

Administrative Procedure,’’ contained

in S. Doc. No. 8, 77th Cong., 1st Sess.,

157 (1941).

Finally, no aspect of the proposed

regulation impinges on any of the

procedural rights afforded parties by

§ 556(d). ‘‘The matter comes down to

the question of the procedure’s integrity
3360 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

and fundamental fairness.’’ Richardson,

402 U.S. at 410. The APA permits the

submission of documentary evidence,

but it does not prescribe the juncture in

the process when that evidence must be

developed. Consequently, requiring the

parties to submit all medical evidence to

the district director is consistent with

the right to submit that evidence to the

administrative law judge for de novo

consideration. The regulation simply

eliminates the bifurcated evidentiary

development permitted by current

practice.

The APA also affords the right to an

oral hearing, the presentation of

testimonial and rebuttal evidence, and

the cross-examination of witnesses; the

regulation preserves all of these rights.

Evidentiary limitations seem

especially apt in the context of black

lung claims litigation. The medical

issues are clearly defined by statute and

regulation, and limited in nature since

they involve only the individual miner’s

condition. Each party should therefore

be able to obtain a comprehensive

review of the miner’s respiratory

condition which supports its position.

As long as each party has the right to

rebut the opposing party’s case, to

subpoena and cross-examine opposing

medical witnesses, and present its case,

upon request, to an administrative law

judge, then the requirements of the APA

and due process are satisfied.

As discussed above, the Black Lung

Benefits Act vests the Secretary with

broad authority to manage the

adjudication of claims for black lung

benefits. That management is

particularly difficult, however, in cases

which require adjudication of both the

claimant’s eligibility and the liability of

one of the claimant’s previous

employers. The Department’s goals are

to: (1) provide a forum for the full and

fair adjudication of both eligibility and

liability; (2) ensure that potentially

eligible claimants are put into interim

pay status as quickly as possible; (3)

limit the number of physically

demanding and often invasive

pulmonary evaluations that a claimant

has to undergo in the evaluation of his

entitlement; and (4) protect the Black

Lung Disability Trust Fund by fulfilling

Congress’ intent that liability for black

lung claims be borne by coal mine

operators to the maximum extent

feasible.

Reconciling these interests in cases

involving multiple potentially liable

responsible operators has not been easy.

Such cases typically arise where there is

a dispute over whether the miner’s most

recent employer: (a) is a coal mine

operator; (b) employed the claimant as

a miner; and (c) is financially capable of

assuming liability. In Crabtree v.

Bethlehem Steel Corp., 7 Black Lung

Rep. 1–354 (1984), the Benefits Review

Board held that the Department was not

entitled to a remand to name another

responsible operator after the claimant

had established his entitlement to

benefits and the administrative law

judge correctly dismissed the

responsible operator initially designated

by the Director. Such a remand, the

Board held, would require the claimant

to relitigate his entitlement. Instead, the

Board instructed the Director to resolve

the liability issue in a preliminary

proceeding or proceed against all

potential responsible operators at each

stage of the adjudication. Although the

Sixth Circuit has declined to apply

Crabtree in a case in which the Director

designated a new responsible operator

before the claimant had to litigate his

entitlement to benefits, Director, OWCP

v. Oglebay Norton Co., 877 F.2d 1300,

1304 (6th Cir. 1989), the Fourth Circuit

has explicitly endorsed the Board’s

decision in the context where the

claimant has already litigated and

established his eligibility. Director,

OWCP v. Trace Fork Coal Co., 67 F.3d

503, 508 (4th Cir. 1995).

Absent statutory amendment,

however, the Department cannot simply

resolve a disputed responsible operator

determination before adjudicating the

claimant’s entitlement. Even if an

operator aggrieved by the Director’s

initial decision that if the responsible

operator were able to litigate the issue

before the Office of Administrative Law

Judges and the Benefits Review Board,

the federal courts of appeals will not

hear appeals from liability decisions

prior to adjudication of the merits of the

claimant’s entitlement. Youghiogheny &

Ohio Coal Co. v. Baker, 815 F.2d 422,

424–5 (6th Cir. 1987).

In changing the current system, then,

the Department has two basic choices:

(a) name a single potentially liable

responsible operator; or (b) name

multiple responsible operators (either

all of the miner’s former employers or

enough of them to ensure that one will

likely be held liable). The risk of the

first option falls solely on the Trust

Fund. Since the district director has

only one opportunity to designate a

responsible operator, the Trust Fund

assumes the risk that the district

director’s initial identification may be

incorrect.

The second option, however, may

have a considerable negative impact on

claimants if each responsible operator is

allowed to develop medical evidence

with respect to the claimant’s eligibility.

Obviously, the claimant in such a case

would be subject to multiple physical

examinations. In addition, such a

system would increase the chances that

the claimant’s eligibility will be decided

based on the sheer mass of evidence

which multiple operators are capable of

developing. For example, in Martinez v.

Clayton Coal Co. et al., 10 Black Lung

Rep. (MB) 1–24 (1987), the claimant

faced three potentially liable

responsible operators. The ALJ denied

benefits and the claimant appealed,

arguing that the ALJ erred in failing to

resolve the liability issue prior to

adjudicating the claimant’s eligibility.

The claimant also argued that the ALJ

erred in admitting a medical opinion

submitted by one of the three operators

(presumably not the operator

subsequently found liable for benefits).

The Board rejected claimant’s

contention, holding that any potentially

liable operator may submit evidence at

the hearing bearing on the claimant’s

eligibility. If the Department were to

apply this practice to all cases in which

there was a legitimate liability dispute,

it would widen the disparity in

resources between the claimant and

those with an interest in disproving the

miner’s eligibility.

Accordingly, the Department has

selected a variant of this second

method. Although the Department may

have notified several potentially liable

operators in a case pursuant to

§ 725.407, in most cases, the identity of

the potential responsible operator will

be clear. Thus, after the submission of

responses to the district director’s initial

finding, the district director will dismiss

all of the other potentially liable

operators. In such cases, the potential

risk to the Trust Fund of an incorrect

responsible operator identification is

small, and it is one that the Department

is willing to assume, especially when

weighed against the effect of multiple

operator participation in the litigation of

the claimant’s eligibility.

In cases involving more difficult

liability issues (e.g., those involving

successor operators, undercapitalized

partnerships, atypical coal mine

operators, etc.), however, the

Department will continue to retain more

than one potentially liable operator as

parties to the case, in order to preserve

its right to compel the payment of

benefits by the responsible operator

ultimately determined to be liable for

benefit payments. To ensure that the

claimant is not overwhelmed by

operator-developed medical evidence,

however, the proposed regulations limit

all potentially liable operators to a

cumulative total of two pulmonary

evaluations or two consultative reports

as an affirmative case. See discussion,

above. Because all of the potentially
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3361

liable operators have an identical

interest with respect to the eligibility

issue, the Department does not believe

that any unfairness will result from

limiting the total evidence submitted. In

effect, the responsible operator, as

initially found by the district director,

serves as ‘‘lead counsel,’’ developing a

single response on behalf of those

opposed to the claimant’s entitlement.

The regulations further provide an

escape clause, allowing a potentially

liable operator who is not the

responsible operator to request

permission to obtain its own

examination upon a showing that the

responsible operator is not fully

litigating the case.

20 CFR 725.415, .418. The proposed

changes complement the Department’s

efforts to strengthen the integrity of

adjudication at the district director

level. Previously, parties were entitled

to request hearings before the Office of

Administrative Law Judges at any point

during the initial processing of the

claim. See Plesh v. Director, OWCP, 71

F.3d 103, 111 (3d Cir. 1995). The

proposed regulations remove that

option; instead, in each case the district

director will issue a proposed decision

and order awarding or denying benefits.

Only after such a decision has been

issued may a party request that the case

be referred to the Office of

Administrative Law Judges for a formal

hearing. In accordance with that change,

the proposed regulations also remove

the district director’s authority to

forward the case to the Office of

Administrative Law Judges prior to

issuing a proposed decision and order.

20 CFR 725.416. As the Fourth Circuit

has recently recognized, ‘‘informal

conferences serve several useful

purposes, all of which would be

undermined if a party could refuse to

participate.’’ Wellmore Coal Co. v.

Stiltner, 81 F.3d 490, 495–96 (1996).

Those purposes include narrowing

issues, achieving stipulations, and

crystallizing positions. Consequently,

the Department proposes to modify

§ 725.416 to clearly provide for the

imposition of sanctions on any party

that fails to appear at a scheduled

informal conference and whose absence

is not excused. A party’s belief that the

conference will serve no function does

not justify the party’s absence. The

proposed regulation further puts all

parties on notice that those attending

the conference will be deemed to have

authority to stipulate to issues and/or

resolve the entire claim. The current

regulations simply provide that those

attending ‘‘must have’’ such authority.

20 CFR 725.417. Paragraph (b) of this

regulation is revised to conform to the

limitations on evidence established in

proposed § 725.414.

20 CFR 725.421. The Department has

determined that the maintenance of case

files while a request for a hearing is

pending is a function which the district

offices should perform. Currently, once

a request for hearing is received and the

case is referred to the Office of

Administrative Law Judges, the OWCP

administrative file is sent to the national

office of the Division of Coal Mine

Workers’ Compensation for

Maintenance. The deletion of language

in paragraph (a) indicates the

Department’s intention to alter current

procedure.

20 CFR 725.423. The Department’s

current regulations allow many of the

time limits applicable to the processing

and adjudication of claims to be

extended for good cause. The proposed

regulations are intended to be similarly

flexible. Proposed § 725.423 is intended

to govern all such time periods, and to

clarify when a party must request an

extension. Two time periods are

exempted from this general rule. No

purpose would be served by including

the one-year time limit for a claimant to

respond to an initial finding of nonentitlement. Since the one-year period is

long in any event and any response

within that period is sufficient to trigger

further adjudication of the claim, the

Department sees no need to provide for

an extension of that time.

In addition, the 30-day time period for

responding to a proposed decision and

order may not be extended. This time

limit is jurisdictional, see Freeman

United Coal Mining Co. v. Benefits

Review Board, 942 F.2d 415, 422 (7th

Cir. 1991), and is not subject to

extension.

Subpart F—Hearings

20 CFR 725.451. A cross-reference to

§ 725.419 is included to emphasize that

the hearing request must be timely in

order to be honored.

20 CFR 725.452. A proposed

paragraph (d) imposes on the

administrative law judge the duty to

inform parties in writing if he believes

that a hearing is unnecessary, and afford

a reasonable period for objections. A

response by even one party requesting

that an oral hearing be held in order to

present testimonial evidence is

sufficient to compel the hearing.

20 CFR 725.454. Proposed

§ 725.414(d) prohibits the introduction

of any evidence after a claim is referred

for a hearing except upon a showing of

extraordinary circumstances or in the

event a Department-obtained § 413(b)

examination is not complete or fails to

comply with the applicable quality

standards. Section 725.454 should

therefore be changed accordingly.

Proposed § 725.414 imposes severe

constraints upon the development of

evidence at the hearing stage. For

example, documentary medical

evidence which has not been submitted

to the district director cannot be made

a part of the record before the

administrative law judge except upon a

showing of ‘‘extraordinary

circumstances’’. Consequently, the

authority to reopen the record for the

receipt of additional evidence for ‘‘good

cause’’ in the current regulation must be

eliminated. The conditions under which

an administrative law judge may receive

additional documentary medical

evidence are described in proposed

§ 725.456.

20 CFR 725.456. Proposed § 725.414

imposes significant constraints on the

development of documentary evidence,

and especially documentary medical

evidence. The parties will be required to

develop the documentary record at the

district director level; no additional

documentary evidence will be admitted

at the hearing unless the proffering

party establishes extraordinary

circumstances or a Departmentprovided pulmonary evaluation is not

complete or is of insufficient quality.

Consequently, in most cases, the record

which is transmitted to the

administrative law judge pursuant to

§ 725.421 will be the record upon which

the administrative law judge adjudicates

the claim; the only additional evidence

will be provided by hearing witnesses.

Only if the administrative law judge

concludes that extraordinary

circumstances exist or that the record

developed by the parties is incomplete

or insufficient to decide the claim, may

he remand the claim to the district

director with instructions to obtain

additional evidence on specific issues,

or allow the parties to develop such

additional evidence as is necessary.

The purpose of proposed §§ 725.414

and 725.456 is to force the parties to

develop the documentary record at the

district level, the earliest adjudicatory

stage, and confine the hearing to the

presentation of testimonial evidence.

This procedure supplants the current

system, which effectively bifurcates

evidentiary development by permitting

the parties to postpone obtaining

evidence until the hearing. Currently,

each party attempts to have the most

recent medical opinions or tests

admitted into the record, resulting in

the last-minute submission of evidence.

Consequently, the introduction of

evidence often does not cease until after

the hearing because the parties receive

additional time in which to obtain
3362 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

rebuttal evidence. The proposed

procedure eliminates this form of

maneuvering, and its attendant delays,

by eliminating the incentive and

opportunity to delay evidentiary

development. The right to a hearing will

become the right to request de novo

review of the record by the

administrative law judge, as

supplemented by whatever testimony

the parties present. Even the medical

testimony will be limited to doctors

who have authored reports which are

part of the record.

The proposed regulation also provides

some flexibility in permitting additional

documentary evidence to be offered at

the hearing stage. If ‘‘extraordinary

circumstances’’ occur, then a party may

be permitted to submit additional

evidence. We are specifically seeking

comment on the ‘‘extraordinary

circumstances’’ provision of proposed

§ 725.456. We do not contemplate, for

example, that the worsening of a miner’s

physical condition, no matter how

severe, would establish the existence of

extraordinary circumstances, so as to

warrant supplementing the evidentiary

record. Such a change is properly

addressed through the modification

procedures set forth at § 725.310 which

allow the submission of an additional

pulmonary evaluation or consultative

report. As another example, however,

extraordinary circumstances might be

found in the following case. Suppose

that a miner with an eighth grade

education attempts, without success, to

retain counsel at the district director

level and can document that he

contacted at least 20 attorneys in his

attempt. Proceeding without counsel

before the district director, he submits

into evidence only one medical report

from his treating physician which does

not address all of the elements of

entitlement, but merely concludes that

the miner is totally disabled. After the

case is referred to the Office of

Administrative Law Judges, claimant is

finally successful in retaining counsel

who requests that the claimant’s

evidence be supplemented with an

additional and more detailed report

from his treating physician.

Similarly, a potentially liable operator

that neglects to undertake the timely

development of evidence while the case

is pending before the district director

may not take advantage of the

‘‘extraordinary circumstances’’

exception, whether or not that neglect

may be considered excusable. See Doss

v. Director, OWCP, 53 F.3d 654, 658 (4th

Cir. 1995) (holding that a party which

inadvertently withholds evidence

developed before the district director

does not meet the ‘‘extraordinary

circumstances’’ exception of the current

version of § 725.456(d)). To take another

example, however, assume that a

potentially liable operator diligently

attempts to develop evidence in order to

demonstrate it is not the operator that

most recently employed the miner. Due

to fraudulent concealment on the part of

the miner’s most recent employer,

however, the potentially liable operator

is unsuccessful in obtaining such

evidence until after the claim is referred

to the Office of Administrative Law

Judges. In such a case, the evidence may

be admissible under the ‘‘extraordinary

circumstances’’ provision of the

proposed rule.

In other instances, the evidence may

simply be incomplete or inadequate to

permit a proper adjudication of the

claim. Ordinarily, a party who fails to

develop its evidence fully simply loses.

The main exception is the Department’s

obligation to provide each miner with a

complete pulmonary examination. See

30 U.S.C. 923(b); 20 CFR 725.406. A

claim cannot be denied if the

Department has failed to obtain such an

examination and the remaining

evidence, if any, does not credibly

address all the entitlement issues. In

such cases, the proposed regulation

retains the current regulation’s

procedure for authorizing the

administrative law judge to remand the

case for additional development or

allow the parties additional time to

develop the evidence. Other than these

two narrow exceptions, the proposed

regulation does not contemplate the

admission of additional documentary

evidence once the claim has been

referred to the Office of Administrative

Law Judges.

20 CFR 725.457. Proposed

§ 725.414(c) requires the parties to

notify the district director of the names

and addresses of any potential hearing

witnesses who have not prepared

documentary evidence in the record.

Proposed paragraph (c) conforms

§ 725.457 to this procedure. Paragraph

(c)(3) addresses the possibility that the

administrative law judge may admit

additional documentary evidence

pursuant to § 725.456. In that event, the

person who prepared the evidence will

be permitted to testify even though he

had not previously been identified as a

potential witness at the district level.

Proposed paragraph (d) addresses the

scope of a medical witness’ testimony.

If the witness prepared documentary

medical evidence, he is restricted to

testifying to the contents of that

document. Although paragraph (c)(2)

permits a party to identify potential

witnesses for the hearing who have not

prepared documentary evidence,

paragraph (d) makes clear that a

physician cannot be a witness unless he

prepares a report in evidence. A

physician is permitted to testify only as

to the clinical testing, examination

results and diagnoses contained in his

report. This limitation is intended to

foreclose the use of a physician at the

hearing to review the reports and testing

of all the other physicians in evidence,

and thereby exceed the number of

consultative reviews permitted by the

regulations.

20 CFR 725.458. The proposed new

language is intended to clarify that any

physician who testifies by deposition is

subject to the same limitations on the

scope of his testimony as any physician

who testifies at the hearing before the

administrative law judge. This

limitation ensures that a party cannot

use a deposition to elicit testimony

which would otherwise be barred if

procured at the hearing.

20 CFR 725.459. Current paragraph (a)

imposes the liability for the cost of

compelling a witness to appear at a

hearing on the party who desires to

cross-examine the witness. The first

sentence of current paragraph (b),

however, effectively excuses the

claimant from bearing the cost of

compelling a witness to appear for the

claimant to cross-examine. The conflict

is resolved by deleting the first sentence

of paragraph (b). Regardless of the

party’s affiliation or status, the party

who compels another party to produce

a witness for purposes of crossexamination must bear the cost of the

witness’ appearance. Obviously, if the

witness will appear in any event to

testify on behalf of a party, exercising

the right of cross-examination will not

shift the liability for costs from the

proponent of the witness to the other

party.

The remainder of the regulation is

restructured and consolidated.

References to the Black Lung Disability

Trust Fund are included in recognition

of the Fund’s liability for fees and costs

when no operator is liable.

20 CFR 725.466. The reference to

§ 725.477 in paragraph (a) is a

typographical error. This paragraph

directs the mode of service for an order

of dismissal. Section 725.477, however,

concerns the form and content of a

decision and order, not its service on

the parties. Section 725.478 is the

correct regulation for purposes of setting

criteria for service of an order.

20 CFR 725.478. To date, the

Department has interpreted § 725.478 to

make the date an administrative law

judge issues a decision the date that it

is filed in the office of the district

director for purpose of §19(e) of the
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3363

Longshore and Harbor Workers’

Compensation Act, 33 U.S.C. 919(e), as

incorporated by 30 U.S.C. 932(a). This

position is based on the same-day

linkage between issuance of the

decision and return of the official record

to the DCMWC, at which time it is

‘‘considered’’ filed. Three courts of

appeals and the Benefits Review Board,

however, have rejected this

interpretation. Director, OWCP v. Seals,

942 F.2d 986 (6th Cir. 1991); Daugherty

v. Director, OWCP, 897 F.2d 740 (4th

Cir. 1990); Trent Coal, Inc. v. Day, 739

F.2d 116 (3d Cir. 1984); Harris v.

NAACO Mining, 12 Black Lung Rep. 1–

115 (1989). These decisions interpret

§ 725.478 as merely indicating where

the official record should be housed

once the administrative law judge issues

a decision. They also hold that the 30-

day period for challenging a decision

does not commence until the decision is

actually filed with the district director.

The Department’s interpretation has

been rejected as improperly shortening

a statutorily prescribed time period for

appeal. Although the Department does

not agree with the judicial gloss put on

§ 725.478, the regulation is amended to

conform to the caselaw by making

explicit that DCMWC’s actual receipt of

the record triggers the running of the 30

days.

In addition, the last two sentences of

this regulation require the district

director to compute all benefits payable

by an operator following the issuance of

an administrative law judge’s decision

and order. Because the same

computations must be performed

following any effective order awarding

benefits, whether by the district

director, administrative law judge,

Benefits Review Board, or court, this

requirement will be moved to §725.502,

contained in subpart H, ‘‘Payment of

Benefits.’’

20 CFR 725.479. Proposed paragraph

(d) is added to make clear that improper

or defective service will not stay the

commencement of the 30-day period for

appeal or reconsideration if the party

has actually received the decision.

Actual receipt imposes on the party a

duty to act which cannot be mitigated

by the error(s) in serving the decision.

See generally Dominion Coal Co. v.

Honaker, 33 F.3d 401 (4th Cir. 1994).

20 CFR 725.480. Delete ‘‘(a)’’ because

section 725.480 contains only one

provision.

Subpart G—Responsible Coal Mine

Operators

20 CFR 725.490. The regulations

governing the obligations of coal mine

operators to secure the payment of

benefits have been moved to part 726,

Black Lung Benefits; Requirements for

Coal Mine Operator’s Insurance.

Subpart G henceforth will govern only

the adjudication of issues of operator

liability.

20 CFR 725.491–.495. The material in

current §725.494 will be moved to

§725.606. The material in current

§725.495 will be moved to part 726.

Sections 725.491–.495 will be amended

to effectuate Congress’s intent that coal

mine operators bear liability to the

maximum extent feasible. The Black

Lung Benefits Act contains three

substantive provisions relevant to the

potential liability of individual coal

mine operators. Section 3(d) of the

Federal Mine Safety and Health Act, 30

U.S.C. 802(d), provides that the term

‘‘ ‘operator’ means any owner, lessee, or

other person who operates, controls, or

supervises a coal or other mine or any

independent contractor performing

services or construction at such mine.’’

Section 422(b) of the Act, 30 U.S.C.

932(b), further provides that ‘‘an

employer, other than an operator of a

coal mine’’ shall be liable for benefits

payable to ‘‘any employee of such

employer to the extent such employee is

engaged in the transportation of coal or

in coal mine construction.’’ Finally,

§422(i), 30 U.S.C. 932(i), provides

criteria for assessing liability against

successor operators.

Beyond these general rules, however,

the Department’s authority to impose

liability on coal mine operators is

extraordinarily broad. Section 422(h), 30

U.S.C. 932(h), directs the Secretary to

promulgate regulations to ‘‘establish

standards, which may include

appropriate presumptions, for

determining whether pneumoconiosis

arose out of employment in a particular

coal mine or mines,’’ and to ‘‘establish

standards for apportioning liability for

benefits * * * among more than one

operator, where such apportionment is

appropriate.’’ Since it began

administering the black lung benefits

program in 1973, the Department has

consistently sought to impose liability

on the operator that most recently

employed the miner, provided certain

other conditions are met. These other

conditions currently include: (1) the

operator employed the miner for at least

one year; (2) at least one day of such

employment took place after December

31, 1969; and (3) the operator is

financially capable of assuming liability

for the payment of the claimant’s

benefits. 20 CFR 725.493(a)(1), 725.492

(a)(3), (a)(4). These regulatory

requirements for the imposition of

liability have withstood constitutional

scrutiny by a three-judge panel of the

United States District Court for the

District of Columbia and the Supreme

Court. National Independent Coal

Operator’s Association v. Brennan, 372

F. Supp. 16 (D.D.C.), aff’d, 419 U.S. 955

(1974).

Although the Department does not

intend to alter these fundamental

requirements, some change is needed in

order to address problems that have

arisen in litigation. For example, and

perhaps most importantly, the Fourth

Circuit has recognized that ‘‘[t]he Black

Lung Benefits Act and its accompanying

regulations do not specifically address

who has the burden of proving the

responsible operator issue.’’ Director,

OWCP v. Trace Fork Coal Co., 67 F.3d

503, 507 (1995).

The proposed regulations are

intended to clarify and amplify the

Department’s method of identifying

responsible operators and assign

appropriate burdens of proof. Sections

725.491 and 725.492 are derived from

the specific statutory provisions

defining the terms ‘‘operator’’ and

‘‘successor operator,’’ respectively. In

effect, they identify the class of business

entities that may be considered

‘‘operators’’ in any claim filed under the

Act. The regulations construe the Act

broadly, see Donovan v. McKee, 845

F.2d 70, 72 (4th Cir. 1988), in order both

to recognize all of the various

businesses which mine coal in the

United States and to give full effect to

Congress’ intent that the coal mining

industry bear liability for individual

claims to the maximum extent feasible.

S. Rep. 95–209, reprinted in Comm. on

Education and Labor, House of

Representatives, 96th Cong., ‘‘Black

Lung Benefits Reform Act and Black

Lung Benefits Revenue Act of 1977’’

(Comm. Print) at 612.

Proposed paragraph (c) of § 725.491

broadly defines the term ‘‘independent

contractor.’’ An independent contractor

will incur liability for black lung

benefits, however, only if one of its

employees is engaged in a function

covered by the Act at a covered situs for

a cumulative period of at least one year.

See proposed §§ 725.495(a)(1),

725.494(c). Although this one-year

requirement will generally ensure that

the independent contractor will have

had more than de minimis contact with

coal mining, there may be cases in

which an independent contractor’s

contacts with mining have been limited.

For example, a maintenance worker

employed by an independent contractor

who visited a coal mine once a week for

five years to repair machinery integral to

the extraction of coal would be

considered to have been a miner for a

cumulative period of more than one

year under the Department’s
3364 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

regulations. See proposed

§ 725.101(a)(32). In such a case, the

regulations require that the independent

contractor that employed the miner be

considered an operator for purposes of

black lung liability.

The Department thus agrees with the

decision of the District of Columbia

Circuit in Otis Elevator Co. v. Secretary

of Labor, 921 F.2d 1285 (D.C. Cir. 1990).

In Otis Elevator, a case involving the

mine safety provisions of the Federal

Mine Safety and Health Act, the court

held that the statutory definition of the

term ‘‘operator,’’ 30 U.S.C. 802(d), was

not limited to independent contractors

with a continuing presence at a mine.

The court noted that the statutory

definition was clear and unambiguous,

and contained no such requirement. The

‘‘continuing presence’’ test had been

adopted by the Fourth Circuit in another

FMSHA case, Old Dominion Power Co.

v. Donovan, 772 F.2d 92 (4th Cir. 1985).

To the extent that a black lung benefits

claim presents this issue, the

Department believes the ‘‘continuing

presence’’ test should not be applied

outside the Fourth Circuit.

Proposed § 725.492 largely tracks

§ 422(i) of the Act and provisions

contained in current § 725.493. The

proposed regulation is intended to

clarify both the criteria for successor

operator liability, and the priority for

assigning liability in cases where there

is more than one successor operator. As

a general rule, the regulations impose

liability on the operator that actually

employed the miner most recently.

Where that operator is no longer

financially capable of assuming liability

for the claimant’s benefits, typically

because the operator is no longer in

existence and failed to purchase

commercial insurance to secure the

payment of benefits, liability follows the

most recent purchaser of the employer’s

mining business. If neither the original

employer nor any successor operator

which bought the business can be held

liable for benefits, the parent company

of the original employer may be held

liable. The proposed regulation also

broadly defines the term ‘‘acquisition’’

to recognize any transfer of authority

over a mine, no matter how it is

effected. For example, the purchase of a

coal mine operator’s assets from a

bankruptcy trustee, or the transfer of a

coal mine from one member of a family

to another, with or without

consideration, will both be considered

acquisitions for purposes of imposing

successor operator liability.

The proposed regulations also define

the entities which may engage the miner

in an employment relationship. Only an

operator that employed the miner for at

least one year, and for at least one day

after December 31, 1969, may be

considered liable for that miner’s

benefits. Section 725.493 broadly

defines the necessary relationship. It

may be a traditional one, involving the

payment of a wage or salary and actual

day-to-day control over the work

performed, or a deemed relationship,

such as that involving a successor

operator, lessor, or parent corporation.

Proposed § 725.494 uses the miner’s

employment relationships to define a

subclass of operators called potentially

liable operators, i.e., those operators

whose relationship with the miner was

of sufficient duration and type to justify

the imposition of liability against them,

and whose financial capability allows

them to assume such liability. All of the

criteria for identifying a potentially

liable operator are contained in the

current regulations: proposed

paragraphs (a), (b), (d), and (e) are found

in current § 725.492; and proposed

paragraph (c) is contained in current

§ 725.493.

Paragraph (e) has been altered to

provide more specific standards for

establishing an operator’s financial

capability to assume liability for the

payment of a claimant’s benefits. The

financial capability criterion has always

been of the utmost importance, but has

been the subject of increasing litigation

in recent years. See, e.g., Director,

OWCP v. Trace Fork Coal Co., 67 F.3d

503 (4th Cir. 1995). Like the current

regulation, the proposed regulation

recognizes three methods of establishing

an operator’s financial capability: (1) A

commercial insurance policy covering

the claim; (2) authorization to selfinsure; and (3) the possession of assets

sufficient to guarantee the payment of

the claimant’s benefits.

The proposed regulation makes only

minor changes to the first two methods

in order to guarantee that the

commercial insurance or the security

posted by a self-insured operator remain

viable sources of benefit payments.

Thus, where the operator purchased

commercial insurance, the regulation

requires that the insurance company

must be solvent, or that a legally

obligated successor must exist. Where

the insurance company has been

declared insolvent, and no successor

(either another insurance company or a

state guaranty association) is available

to pay benefits, the operator’s prior

purchase of insurance is not sufficient

to establish the operator’s ability to

assume liability. Instead, the operator

itself must possess sufficient assets to

secure the payment of benefits.

Similarly, where the operator was

authorized to self-insure, the operator

itself must still be authorized to selfinsure or the security posted by that

operator must be sufficient to provide

for the payment of benefits.

With respect to the third method, the

current regulations contain a

presumption that if an operator is in

existence, it is presumed to be

financially capable of assuming liability

for benefits. On occasion, that

presumption has required the

assessment of liability against a coal

mine operator that is in existence, but

that, because of the small size of its

assets, clearly cannot pay benefits to a

miner, even where a financially capable

operator is next in line to assume

liability. In such a case, the award of

benefits is effectively unenforceable

against the operator, and the Trust Fund

must assume liability.

The proposed regulation replaces the

presumption with a more case-specific

inquiry into the operator’s actual

financial status by tying a determination

of financial capability based on the

operator’s assets to the requirements of

proposed § 725.606. In the case of

operators who are in violation of their

statutory duty to secure the payment of

benefits, § 725.606 requires a minimum

deposit of $175,000 to secure the

payment of benefits on a claim. In the

case of coal mine construction or coal

transportation employers, the regulation

requires a more particularized

assessment of the benefits payable in a

given claim based on the life

expectancies of the miner and his

dependents.

The size of the pool of potentially

liable operators in any given case will

vary depending on the miner’s

employment history. If the miner spent

the last thirty years working for a single

coal company that either insured its

liability under the Act or qualified as a

self-insurer, that company will be

designated the responsible operator. If

the miner worked for a number of

companies, some of which thereafter

sold their coal mining business, the

number of potentially liable operators

will be larger.

Finally, § 725.495 concludes the

identification process by setting forth

criteria for determining which of the

potentially liable operators will be the

responsible operator. The proposed

regulation also assigns burdens of proof

to the respective parties to the claim,

thereby addressing the problem the

Fourth Circuit identified in Trace Fork.

Proposed § 725.495 alters the current

regulation (§ 725.493) in two important

respects. First, it makes explicit OWCP’s

system for determining responsible

operator liability. It provides that if

more than one potentially liable
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3365

operator exists with respect to the

miner’s most recent employment, the

miner’s actual employer shall be

primarily liable, followed, in order, by

any potentially liable successor operator

and any other operator that may be

deemed to have employed the miner.

Only if no potentially liable operator

exists with respect to the miner’s most

recent employment does the regulation

authorize looking to the miner’s next

most recent employment.

For example, assume that the miner

was employed by Megalith Coal

Company from 1968 through 1982, and

then went to work for Bob’s Steel

Company (which operated its own coal

mines) until 1985. At the time, Bob’s

was insured by Shaky Insurance

Company. Bob’s subsequently sold its

mines to Bill’s Coal Company and

merged into Ace Steel Company. The

regulation requires that the miner’s most

recent employer bear the liability if at

all possible. The regulation would

therefore prioritize liability as follows:

(1) Bob’s Steel Company (as insured by

Shaky Insurance Company, provided

the insurer is still solvent); (2) Bill’s

Coal Company; and (3) Ace Steel

Company. If none of these companies

has the financial capability to pay

benefits, the regulation assigns liability

to Megalith Coal Company.

Second, proposed § 725.495 allocates

the parties’ burdens of proof with

respect to determining the responsible

operator. Pursuant to paragraph (b), the

Director bears the burden of establishing

that the responsible operator named by

the district director in the initial finding

(the ‘‘designated responsible operator’’)

meets all of the § 725.494 criteria for a

potentially liable operator with the

exception of financial capability, which

is presumed. Where the operator failed

to contest its designation as a

potentially liable operator before the

district director, see proposed

§ 725.408(a)(3), none of the § 725.494

requirements may be contested.

Pursuant to paragraph (d) of proposed

§ 725.495, where the designated

responsible operator is not the miner’s

most recent employer, the Director is

required to place into the record a

statement that OWCP has searched its

insurance and self-insurance records,

and has found no record that any more

recent employer meets the conditions of

paragraphs 725.494 (e)(1) or (e)(2).

Once the Director meets his burden,

the burden shifts to the designated

responsible operator. That operator

must prove either that it does not have

sufficient assets to secure its liability

and therefore is not financially capable,

or that a more recent employer meets all

of the requirements for a potentially

liable operator set forth in proposed

§ 725.494. As part of this burden, the

designated responsible operator must

demonstrate that the more recent

employer, or its owners or officers, if

appropriate, possesses assets sufficient

to secure the payment of benefits in

accordance with § 725.606. The

Department must be able to reach those

assets through the enforcement

mechanisms provided by the Act. For

example, proof that the owner of a sole

proprietorship possesses assets that may

not be divided, such as a jointly owned

residence, will not meet the designated

responsible operator’s burden. If the

designated responsible operator meets

its burden, then the more recent

employer, if it was notified of the claim

pursuant to proposed § 725.407 and not

thereafter dismissed, shall be

considered the responsible operator. If

the designated responsible operator

meets its burden and the more recent

employer is not a party to the claim,

then liability will be borne by the Black

Lung Disability Trust Fund.

Subpart H—Payment of Benefits

20 CFR 725.502, .522, .530.

Determining the point in time at which

benefits become due under the Black

Lung Benefits Act is important for

several purposes. For example, once an

administrative law judge issues a

decision and order awarding benefits

against a responsible coal mine

operator, the Trust Fund may pay

benefits on an interim basis only after

the operator fails to pay benefits that

become due and payable. See 26 U.S.C.

9501(d)(1)(A)(ii). In addition, a

beneficiary will be entitled to additional

compensation, equal to twenty percent

of any unpaid benefits, only if the

operator fails to make payments within

10 days of the date on which they

become due. See 20 CFR 725.607.

Finally, the date on which benefits

become due determines the starting

point for computing any interest owed

the beneficiary. See 20 CFR 725.608.

The current regulations, however, offer

little help in determining this critical

date.

The proposed changes, which are

consistent with OWCP’s current

practice, generally reflect law developed

under the Longshore and Harbor

Workers’ Compensation Act. Under the

Longshore Act, benefits become due

when the compensation order becomes

effective. See Tidelands Marine Serv. v.

Patterson, 719 F.2d 126, 127 n.1 (5th

Cir. 1983); Lazarus v. Chevron USA,

Inc., 958 F.2d 1297, 1299 (5th Cir.

1992). Section 21(a) of the LHWCA, 33

U.S.C. 921(a), as incorporated into the

BLBA by 30 U.S.C. 932(a), provides that

a compensation order issued under § 19

of the LHWCA, whether by a district

director or an administrative law judge,

see 20 CFR 702.315, .349, .350, becomes

effective when it is filed in the office of

the district director. The Secretary’s

black lung regulation at 20 CFR 725.479

uses the same language with respect to

orders issued by administrative law

judges. The regulations also allow a

district director to issue a compensation

order, but provide that such an order

will become effective only if no party

requests a hearing within 30 days. 20

CFR 725.419(d); see Freeman United

Coal Mining Co. v. Benefits Review

Board, 942 F.2d 415 (7th Cir. 1991).

Proposed § 725.502(a)(2) will provide all

parties with notice as to these crucial

dates. Although appellate tribunals such

as the Benefits Review Board and the

courts of appeals typically direct the

entry of an award on remand rather than

enter an award themselves, the

proposed regulation also addresses

those rare instances in which the Board

or court does issue such an award.

With one exception, the Department’s

experience in administering the Black

Lung Benefits Act does not justify

altering the Longshore Act procedures

with respect to when benefits are

payable. Thus, once an effective order is

issued, an operator must immediately

commence the payment of monthly

benefits that become due thereafter in

accordance with the terms of the order.

Failure to pay these benefits within 10

days of the date they become due will

subject the operator to liability for

additional compensation.

The exception to Longshore Act

practice concerns retroactive benefits

payable by an operator after an effective

order is issued. Such benefits are

typically payable in two cases: (1) in a

case in which the claimant was

receiving interim benefit payments from

the Trust Fund, where the claimant is

entitled to benefits for periods prior to

the initial determination of the

claimant’s eligibility; and (2) where the

claimant was not receiving any interim

benefit payments prior to the effective

order because the district director had

initially determined that the claimant

was not entitled to benefits.

Because the calculation of retroactive

benefits often involves the consideration

of factors that are not apparent in the

record or the decision, such as the dates

of previous interim payments by the

Trust Fund, the Department believes

that such a calculation is best performed

by the district director. Under the

current regulations, such calculations

are made within 30 days of the date of

the effective award, and the proposed
3366 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

regulation at § 725.502(b)(2) codifies

that time period.

For example, an administrative law

judge may issue an order on August 15,

1996, awarding benefits as of August,

1994. This decision is effective when

correctly filed and served, and the

operator must commence monthly

benefit payments within 10 days of the

next date upon which monthly benefits

become due, i.e., it must pay benefits

due for the month of August by

September 10, 1996. If the operator fails

to make timely payment, it will incur

liability for twenty percent additional

compensation. Retroactive benefits,

however, covering the period from

August, 1994 through July, 1996, will

not be due until the district director

completes the computation of these

amounts and notifies the parties,

notification which will be completed

within 30 days of August 15, 1996.

Currently, some operators and

insurers pay monthly benefits following

the issuance of an effective award, but

few pay retroactive benefits while an

appeal is pending. By clarifying the

respective obligations of the district

director and the operator in a case in

which an award is issued, and by

providing claimants with notice of the

dates on which benefit payments may

be expected and the consequences of an

operator’s failing to make those

payments, the Department hopes to

increase operator compliance with

effective awards.

20 CFR 725.503. As currently written,

§ 725.503 does not provide any

guidance for determining when benefits

should commence if the claimant

prevails in modification proceedings. A

denied claim may be modified to an

award if the claimant establishes either

a factual mistake in the decision

denying the claim, or a change in the

miner’s condition since that denial. 33

U.S.C. 922, as incorporated by 30 U.S.C.

932(a); as implemented by 20 CFR

725.310. See generally O’Keeffe v.

Aerojet-General Shipyards, Inc., 404

U.S. 254, 255–256 (1971); Banks v.

Chicago Grain Trimmers Assn., Inc., 390

U.S. 459, 465 (1968). A ‘‘mistake’’

determination requires the adjudicator

to consider whether the original

decision is premised on some

significant factual error resulting in an

improper denial of the claim. In order

to prove a change in condition, the

claimant must prove that his condition

has deteriorated to the point of

compensable disability since the prior

denial of the claim; this inquiry

effectively acknowledges the correctness

of the earlier decision, and requires the

claimant to proffer new evidence.

The differences in the two grounds for

modification necessarily require

different means for determining the

commencement date for benefits.

A change in condition—a worsening of the

applicant’s black lung disease to the point

where it is now totally disabling—entitles

him to benefits from the date of the change.

The correction of a mistake of fact, showing

that he had totally disabling black lung

disease at the time of the original hearing,

entitles him to benefits from the date—which

might be long before that hearing—on which

he became totally disabled.

Eifler v. Office of Workers’

Compensation Programs, 926 F.2d 663,

666 (7th Cir. 1991).

Proposed paragraph (d) implements

the alternative modification grounds

characterized by Eifler. If the basis for

modifying the denial of benefits to an

award is a mistake in that denial, a

determination of the commencement

date uses the same rules as apply to

claims. The adjudicator must consider

whether a miner (paragraph (b)) or a

survivor (paragraph (c)) filed the claim,

and weigh the evidence accordingly. If,

however, the claimant has established a

change in condition, a different method

must be used. The Department has

concluded that the most reasonable

alternative is to use the earliest credible

evidence supportive of an element of

entitlement previously resolved against

the claimant (or left unresolved),

provided such evidence was obtained

since the denial of the claim. Such

evidence supports both the award and a

finding of the date from which benefits

are payable if the adjudicator has

considered and rejected any later

evidence refuting entitlement. Cf.

Rochester & Pittsburgh Coal Co. v.

Krecota, 868 F.2d 600, 603 (3d Cir.

1989) (holding that administrative law

judge erroneously awarded benefits

from 1977 filing date when all medical

evidence until 1985 was negative).

Proposed § 725.503 is also amended

to reduce the number of provisions

dealing with part 727 awards. Section

727.302 provides the criteria for

determining when benefits are payable

under part 727, which makes most of

the current references to part 727 in

§ 725.503 unnecessary. 20 CFR 727.302.

The only exception is for ‘‘transition

claims,’’ filed between July 1, 1973, and

December 31, 1973, under § 415 of the

BLBA, 30 U.S.C. 925. Section

727.302(e), which governs the onset

date for such claims, refers to § 725.503

for the applicable standards. Thus,

proposed § 725.503(e) is necessary to

supply applicable standards. No

benefits on a § 415 claim can be

awarded for any period of eligibility

occurring prior to January 1, 1974. 20

CFR 727.303(a). Consequently, a crossreference to § 727.303 is a necessary

qualifier to making onset date

determinations under § 725.503 for

§ 415 claims.

20 CFR 725.537. Proposed

§ 725.212(b) codifies the Department’s

position that full survivor’s benefits

must be paid to each surviving spouse

or surviving divorced spouse who

establishes eligibility. In order to

eliminate any potential inconsistency

between the proposed regulation and

current § 725.537, the latter must be

amended to cross-reference the new

§ 725.212(b).

20 CFR 725.547. The Black Lung

Benefits Act incorporates by reference

certain provisions of the Social Security

Act which require a claimant who has

received benefits to which he is not

entitled (an ‘‘overpayment’’) to

reimburse the benefits unless certain

defined exceptions apply. 30 U.S.C.

923(b), 940, incorporating 42 U.S.C.

404(b). The claimant is entitled to

waiver of the overpayment recovery if

he can demonstrate that permitting

recovery would ‘‘defeat the purpose of

the Act’’ or ‘‘be against equity and good

conscience.’’ Only those individuals

who were not ‘‘at fault’’ in creating the

overpayments are eligible for waiver.

Section 725.547(a) currently limits the

availability of waiver to those

individuals who received the

overpayments from the Black Lung

Disability Trust Fund. A claimant who

received an overpayment from a

responsible operator or an insurance

carrier may not seek waiver. The

Department has concluded that the

waiver provisions should be available to

all claimants. Deleting the second

sentence of paragraph (a) will afford any

individual who has received an

overpayment the opportunity to

establish that he is without fault in

creating the overpayment, that he lacks

the financial resources to repay the

overpayment (‘‘defeat the purpose of

title IV of the Act’’) or that special

circumstances exist which demand

release from liability (‘‘be against equity

and good conscience’’). See 20 CFR

725.542–725.543.

The Department recognizes that

incorporated provisions from the

Longshore and Harbor Workers’

Compensation Act (LHWCA) permit

recoupment only by withholding future

benefits. See 33 U.S.C. 914(j), 922, as

incorporated by 30 U.S.C. 932(a); Ceres

Gulf v. Cooper, 957 F.2d 1199, 1206–07

(5th Cir. 1992); Stevedoring Services of

American, Inc. v. Eggert, 953 F.2d 552,

557 (9th Cir. 1992). If no future benefits

are due, then the overpayment cannot

be recovered under that statutory
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3367

scheme. The Department has concluded,

however, that the LHWCA provisions

should not be generally applied to black

lung overpayments. The statutory

authority incorporated from the Social

Security Act imposes an affirmative

duty on the Department to recover

overpayments unless waiver is

appropriate: ‘‘Whenever the Secretary

finds that more * * * than the correct

amount of payment has been made to

any person * * *, proper adjustment or

recovery shall be made * * *’’ 42

U.S.C. 404(a)(1). Since 1973, the

Department has promulgated

regulations consistent with the SSA

provisions. See 38 FR 26042 et seq.,

Sept. 17, 1973; 20 CFR 725.523, 725.524

(1978) (identical to present 725.542,

725.543). Those courts which have

reviewed the Department’s position

have upheld its authority to collect

overpayments even when no future

benefits are due. Napier v. Director,

OWCP, 999 F.2d 1032 (6th Cir. 1993);

McConnell v. Director, OWCP, 993 F.2d

1454 (10th Cir. 1993); compare Bracher

v. Director, OWCP, 14 F.3d 1157, 1160–

61 (7th Cir. 1994) (acknowledging

difference between SSA and LHWCA

statutory schemes and the Secretary’s

authority to promulgate regulations

which vary incorporated provisions

from LHWCA). Departing from the

current procedures obviously would

result in adverse financial consequences

for the debt-laden Trust Fund.

Moreover, the current procedures

ensure that recovery is made only from

those individuals who were either at

fault in creating the overpayment or

possess the financial resources to repay

the benefits. For these reasons, the

Department has adopted the LHWCA

limitations on overpayment recovery

only for overpayments which occur as a

result of modification proceedings. See

33 U.S.C. 922, as incorporated by 30

U.S.C. 932(a); 20 CFR 725.310(d). See

explanation of changes to § 725.310.

Subpart I—Enforcement of Liability;

Reports

20 CFR 725.606. The current

regulation at § 725.494 implements

§ 422(b) of the Act, 30 U.S.C. 932(b),

which provides that coal mine

construction and transportation

employers are not required to comply

with the general requirement that coal

mine operators secure their potential

liability under the BLBA. Section 422(b)

further provides, however, that the

Secretary may require a coal mine

construction or transportation employer

to ‘‘secure a bond or otherwise

guarantee the payment’’ of benefits to an

employee that the Secretary has

determined to be eligible for benefits.

The current regulation at § 725.606

implements § 14(i) of the Longshore and

Harbor Workers’ Compensation Act, 33

U.S.C. 914(i), which generally gives the

district director authority to require the

deposit of money with the United States

Treasurer whenever he deems it

advisable.

The proposed changes consolidate the

two current regulations into a single one

dealing generally with post-award

security. The new regulation will be

located in subpart I, ‘‘Enforcement of

Liability; Reports.’’ The new regulation

eliminates paragraph (a) of § 725.494,

which simply repeats the security

requirement of the Act and refers to 20

CFR part 726. Because this provision is

discussed in considerable detail in part

726, no useful purpose is served by

repeating it in part 725. The remainder

of § 725.494 is integrated into § 725.606.

The latter section now establishes a

clear duty on the part of otherwise

unsecured operators to secure

individual claims following issuance of

an effective award of benefits. The new

regulation also provides a mechanism

for enforcing the duty to secure these

benefit payments. Finally, there is

currently no mechanism by which the

United States Treasurer can hold

deposits that are to be used to pay

monthly benefits. Accordingly, the

Department has altered the incorporated

Longshore Act provision to provide

authority to require a deposit of

negotiable securities with a Federal

Reserve Bank. See 30 U.S.C. 932(a)

(authorizing the Department to depart

from incorporated Longshore Act

provisions in order to facilitate the

administration of the Black Lung

Benefits Act).

The new regulation distinguishes

between the obligations of coal mine

operators that were required to secure

the payment of benefits under the Act

and failed to meet that obligation, and

those coal mine construction and

transportation employers that were not

required to secure. The former are

required to deposit at least $175,000

(the current average value of a claim) for

each approved claim. This amount may

be increased if OWCP believes that

additional security is required because,

for example, the miner is relatively

young, or has a disabled child. In cases

in which the miner’s age and the

number of his dependents would not

justify the entire $175,000, that money

will provide additional security for

claims filed by other employees of the

unsecured operator. On the other hand,

because coal mine construction and

transportation employers have not

violated the Act’s security requirement,

they are entitled to a more precise

calculation of their potential liability for

the approved claim, and may not be

required to secure other claims not yet

awarded.

Consideration was given to imposing

a mandatory duty on uninsured

operators and coal mine construction or

transportation employers to secure

benefit payments immediately following

the issuance of an effective award of

benefits, without awaiting a specific

directive from the district director.

Section 725.494 currently provides that

a coal mine construction or

transportation employer ‘‘which may be

liable for the payment of benefits under

this part or Part 727 of this subchapter

shall take such action as may be

appropriate to guarantee the discharge

of such liability.’’ Determining the

amount of security required in the case

of a coal mine construction or

transportation employer, however,

requires an individualized calculation

by OWCP. A coal mine construction or

transportation employer cannot be

expected to perform such a calculation

without assistance. Accordingly, the

regulation requires that OWCP request

such an employer to secure the payment

of benefits before an order can be

issued. Such a request will also give the

liable operator or other employer an

opportunity to demonstrate its

compliance with the security

requirement.

The regulation places the initial

burden on OWCP. Once an effective

award is issued, the district office

(which will receive a copy of all such

awards) will contact the Responsible

Operator section of OWCP’s Branch of

Standards, Regulations, and Procedures,

to determine whether the liable party

has secured its obligations. If it has not,

the district director will inform the

operator of its obligation to secure the

claim. If the operator fails to comply,

the district director may direct the

deposit of appropriate securities or, if

the claim was awarded by an

administrative law judge, the Benefits

Review Board, or a court of appeals,

request the appropriate Regional

Solicitor’s office to file a motion with

the administrative law judge. This

system will encourage district offices to

investigate an operator’s existing

security, request the posting of security

in appropriate cases, and to take

whatever steps are necessary to require

the posting of such security, as quickly

as possible.

Paragraph (g) represents the

Department’s interpretation of the

interplay between § 432(b), which

excuses coal mine construction and

transportation employers from the Act’s

general security requirement, and
3368 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

§ 433(d), which imposes personal

liability for benefits on the president,

secretary, and treasurer of an

incorporated operator that fails to secure

the payment of benefits. Paragraph (g)

makes clear that the provisions of

§ 433(d) will apply to incorporated coal

mine construction and transportation

employers if they fail to comply with an

order requiring post-award security.

20 CFR 725.608. The proposed

changes are intended to simplify the

regulation, and to allow all parties to a

claim to ascertain their obligations and

rights with respect to the payment of

interest. In general, the purpose of

interest is ‘‘to ensure that an injured

party is fully compensated for its loss.’’

City of Milwaukee v. Cement Division,

National Gypsum Co., 115 S. Ct. 2091,

2095 (1995). The Black Lung Benefits

Amendments of 1981 amended the Act

to provide that an operator that

withholds the payment of retroactive

benefits pending review of an initial

determination of eligibility shall begin

to accrue liability for interest 30 days

after the initial determination. 30 U.S.C.

932(d). The initial determination serves

as the first notice to an operator that it

may have incurred a potential obligation

to pay benefits, and the statute and

regulations recognize that the

computation of interest from an earlier

point in time may not be equitable. See

Stapleton v. Westmoreland Coal Co.,

785 F.2d 424, 438 n. 12 (4th Cir. 1986)

(en banc), rev’d on other grounds sub.

nom. Mullins Coal Co. v. Director,

OWCP, 484 U.S. 135 (1987). Proposed

paragraph (a)(3) applies the same rule

governing liability for interest to

medical benefits, an issue which the

present regulation does not address.

Paragraph (b) of the current regulation

is unchanged. As the courts have

recognized, the language of this

provision is broad enough to entitle the

Department to interest on any benefits

paid from the Trust Fund, including

both monthly disability benefits and

medical treatment expenses. Reich v.

Youghiogheny & Ohio Coal Co., 66 F.3d

111, 117 (6th Cir. 1995).

In proposed paragraph (c), the

Department recognizes that delays in

the payment of attorney’s fees under the

Act have contributed to the

unwillingness of attorneys in many

areas of the country to accept black lung

benefits cases. Under an incorporated

provision of the Longshore and Harbor

Workers’ Compensation Act, attorneys

may receive compensation only if they

are successful, and only after the award

of the claimant’s benefits becomes final.

33 U.S.C. 928, as incorporated by 30

U.S.C. 932(a). Because an award of

benefits may not become final until

years after the attorney’s fee application

has been approved by the adjudication

officer, the value of the fee that the

attorney ultimately receives will be

reduced by intervening inflation.

Although the BLDTF may not pay

interest, see 26 U.S.C. 9501(d), the

Department believes that awarding

interest on fee awards in responsible

operator cases, the majority of cases

currently litigated, will encourage

attorneys to represent black lung

claimants by reducing the cost of

adjudicatory delays. This position is

also consistent with Supreme Court

precedent, Missouri v. Jenkins, 491 U.S.

274 (1989).

20 CFR 725.609. Several of the

Department’s recent enforcement cases

have involved responsible operators or

insurers that became financially

incapable of paying benefits after having

fully litigated the merits of the

claimant’s entitlement. As a result,

although the final award is directed

against one entity, the Department must

seek to enforce the award against

another. The Act currently provides

ample authority for such enforcement.

See, e.g., 30 U.S.C. 932(i). In Donovan

v. McKee, 845 F.2d 70, 72 (4th Cir.

1988), the Fourth Circuit refused to

sanction ‘‘a license for operators to

avoid benefit payments by effecting

convenient changes of the business form

under which coal mining operations are

conducted. There is no warrant in the

statutory language or purpose for

allowing operators to resort to such

shell game maneuvers to avoid liability

for paying black lung benefits.’’

Obviously, requiring the Department

and the award beneficiary to obtain a

new order in accordance with the

claims procedure outlined in part 725

would allow such operators to delay

indefinitely the enforcement of their

obligations by undergoing frequent

changes in identity. In addition, such an

approach would have the unfortunate

result of requiring claimants to relitigate

their entitlement to benefits.

Even if the change in the operator’s

identity is wholly unrelated to a desire

to avoid liability for black lung benefits,

the Act should be construed to

effectuate Congress’s stated intent to

impose liability for benefits payable

under Part C of the Act on individual

coal mine operators. In recognizing the

expansive scope of the Act’s provisions

relating to the industry’s liability, and

the broad authority vested in the

Department to carry out the provisions

of the Act, see 30 U.S.C. 932(a), (h),

936(a), the proposed regulation simply

codifies the Department’s existing

interpretation of the Act with respect to

the enforcement of benefits.

Paragraph (a) recognizes that the

owners of sole proprietorships and the

principals in partnerships are directly

liable for the debts incurred by their

companies. Moreover, as the Fourth

Circuit noted in McKee, such

individuals are ‘‘unquestionably

operators.’’ 845 F.2d at 72.

Paragraph (b) implements § 423(d) of

the Act, 30 U.S.C. 933(d). That statutory

section provides that where an operator

is a corporation that has failed to secure

its liability for benefits under the Act,

the president, secretary, and treasurer of

such corporation ‘‘shall be severally

personally liable, jointly with such

corporation, for any benefit which may

accrue under this title in respect to any

disability which may occur to any

employee of such corporation while it

shall so fail to secure the payment of

benefits as required by this section.’’

Although such officers do not meet the

definition of the term ‘‘operator’’

(§ 725.491), they may be held liable for

the payment of benefits once the

corporation has been determined to be

the responsible operator. Paragraph (b)

further recognizes the ongoing nature of

the duty imposed on the named

corporate officers by § 423. For example,

§ 423(a) provides that an operator is

responsible for ‘‘insuring and keeping

insured the payment of such benefits.’’

The Department’s proposed civil money

penalty regulations (20 CFR part 726,

subpart D) recognize a similar ongoing

duty with respect to self-insured

operators (see proposed § 726.302(b)).

Thus, any person who becomes a

corporate officer of the responsible

operator after the miner ceases his

employment may be held personally

liable for the payment of the miner’s

benefits. The regulation allows such a

corporate officer to limit his personal

liability by ensuring that the corporation

posts security for the claim under

§ 725.606.

Paragraph (c) implements the Act’s

successor operator provisions in cases

where the prior operator becomes

unable to pay an award of benefits. 30

U.S.C. 932(i). In such cases, the Act

imposes liability on any operator that

may be considered a ‘‘successor

operator.’’ For example, where one

operator merges into another, the

Department or any beneficiary of an

award should be able to quickly and

summarily enforce the pre-existing

obligations of the first operator against

the second. The regulation recognizes

that the liability of successor operators

in the enforcement context should be

limited to those claims of which they

have constructive notice at the time of

the event which gave rise to the

successor liability. For example, if one
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3369

company purchased the coal mining

business of another on January 1, 1990,

it will be deemed to have notice of all

claims filed against the seller as of that

date. If the seller subsequently becomes

unable to pay any benefits due in those

claims, those obligations may be

enforced directly against the successor

operator. Any claims filed after the date

of sale may be enforced against the

successor only if the successor is

provided with an opportunity to litigate

the miner’s entitlement to benefits in

the claims process set forth in Subparts

E and F of this part.

Paragraph (d) deals with companies

which mine coal through subsidiaries,

joint ventures, or other business entities

which they own or control. Such

companies may be considered operators

under the Act (see proposed § 725.491),

and must ensure the payment of benefits

by, and thus assume the risk of any

failure on the part of, such subsidiaries,

joint ventures, or other business entities.

For example, a parent company may not

avoid its existing liability by dissolving

or liquidating a subsidiary company.

Any pre-existing obligations of such

subsidiary may be enforced against such

parent company without further resort

to the claims process.

Finally, paragraph (e) is a catch-all

provision designed to put all parties on

notice that the Department can take full

advantage of any other applicable

federal or state law. For example, the

Department has encountered a number

of cases in which the responsible

operator has gone out of business and its

insurer has been declared insolvent by

the state in which it was established. In

such a case, the Department and the

award beneficiary may collect from a

state insurance guaranty association

where state law requires such an

association to assume the insurer’s

liabilities.

20 CFR 725.620. Paragraph (a) must

be amended to conform with revisions

to § 725.495 and part 726. Section

725.495 is being amended and its

contents moved to a more appropriate

location, subpart D of part 726, the

regulations governing enforcement of

the obligation to insure and the

assessment of a penalty for failure to

secure benefit payments. Thus,

§ 725.620(a) must contain a crossreference to the new location of the

relevant material.

20 CFR 725.621. In accordance with

the Debt Collection Improvement Act of

1996 (Pub. L. 104–134, § 31001(s), 110

Stat. 1358), which amended the Federal

Civil Penalties Inflation Adjustment Act

of 1990 (Pub. L. 101–410, 104 Stat. 890),

the maximum penalty amount for failing

to file a report required by the

Secretary’s regulations, see 30 USC

§ 942(b), must be increased by ten

percent with respect to violations that

take place after these proposed

regulations become effective.

Subpart J—Medical Benefits and

Vocational Rehabilitation

20 CFR 725.701. Section 725.701

should be amended to codify the

presumption of coverage created by the

United States Court of Appeals for the

Fourth Circuit in Doris Coal Co. v.

Director, OWCP, 938 F.2d 492 (4th Cir.

1991). In Doris Coal Co., the Fourth

Circuit recognized that the broad

definition of pneumoconiosis

necessarily brought within its ambit

most pulmonary disorders for which a

miner might receive treatment. The

Court therefore concluded that ‘‘when a

miner receives treatment for a

pulmonary disorder, a presumption

arises that the disorder was caused or at

least aggravated by the miner’s

pneumoconiosis.’’ 938 F.2d at 496. The

Department endorses this approach, and

accordingly amends § 725.701 to codify

it. Although the decision does not

describe the means of rebutting the

presumption, the proposed regulation

requires evidence which completely

severs the presumed nexus between the

pulmonary disorder and the miner’s

pneumoconiosis. The proposed

regulation also prohibits use of evidence

which challenges the miner’s

underlying entitlement to benefits as a

means of showing that the treatment

cannot be compensable. A final award

of benefits establishing that the miner is

totally disabled due to pneumoconiosis

arising out of coal mine employment

precludes reliance on any medical

evidence that is inconsistent with that

award. The proper forum for such

evidence is modification (see § 725.310).

20 CFR 725.706. The historical rise in

treatment costs warrants raising the noapproval dollar amount in paragraph (b)

from $100.00 to $300.00.

20 CFR Part 726—Black Lung Benefits;

Requirements for Coal Mine Operators’

Insurance

Subpart A—General

20 CFR 726.2. Paragraph (e) is added

to recognize the addition of subpart D of

part 726, governing the assessment of

civil money penalties.

20 CFR 726.8. Proposed § 726.8 is

intended to define certain terms that are

used in part 726. The terms ‘‘employ’’

and ‘‘employment’’ are important not

only to the Department’s enforcement of

the Act’s civil money penalty

provisions, but also to the liability of

insurance carriers and sureties. Thus,

both the required insurance

endorsement, set forth at § 726.203, and

the standard surety bond form, use the

term ‘‘employment.’’ Paragraph (d),

which is identical to proposed

paragraph 725.493(a)(1), codifies the

Department’s position that these terms

should be given the broadest possible

interpretation.

Subpart B—Authorization of SelfInsurers

20 CFR 726.101, .104, .105, .109, .110,

.111. The Department’s existing selfinsurance regulations do not contain a

list of the factors that the Department

currently considers in setting the

amount of security required of an

operator seeking authorization to selfinsure its benefit obligations. The

formula set forth in § 726.101(b)(4) was

intended to be used only in 1974. See

current 20 CFR 726.105. The revisions

to § 726.101(b)(4) eliminate the 22-year

old formula in favor of a non-exclusive

list of factors, now set forth in § 726.105.

These factors are a more accurate

reflection of the Department’s current

method of setting a security amount.

Language referring to the formula in

§ 726.101 has been deleted from

§ 726.105. In addition, § 726.104 has

been revised to recognize two forms of

security (letters of credit and tax-exempt

trusts) that the Department did not

allow in 1974, when these regulations

were last amended, but that it does

allow now. Paragraph (b)(4) reflects the

Department’s decision to allow selfinsurers to use letters of credit only in

combination with another form of

security. Sections 726.101, 726.109,

726.110 and 726.111 have been revised

to remove specific references to the

earlier forms of security and to

substitute more general references.

20 CFR 726.106. The reference in

paragraph (c) to ‘‘31 CFR 203.7 and

203.8’’ is incorrect. The regulation is

revised to reference ‘‘31 CFR Part 225,’’

which contains the appropriate

regulations governing deposits with the

United States.

20 CFR 726.114. A new paragraph (c)

has been added to codify the

Department’s position that coal mine

operators authorized to self-insure their

benefit liability under 30 U.S.C. 933(a)

continue to be responsible for

maintaining adequate security even after

they have ceased mining coal. See the

explanation to §§ 726.300–.320, below.

Paragraph (b) is revised to eliminate the

specific reference to the forms of

security previously accepted by the

Department in favor of a more general

reference. See discussion of § 726.104,

above.
3370 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

Subpart D—Civil Money Penalties

20 CFR 726.300–.320. Section 423 of

the Black Lung Benefits Act requires

each coal mine operator to secure its

liability for benefits by qualifying as a

self-insurer in accordance with

regulations prescribed by the Secretary,

or by insuring and keeping insured the

payment of such benefits with a

licensed workers’ compensation insurer.

30 U.S.C. 933(a). Section 423 also

provides that each coal mine operator

failing to meet its insurance obligation

shall be subject to a civil money penalty

of up to $1,000 per day. 30 U.S.C.

933(d)(1). In accordance with the Debt

Collection Improvement Act of 1996

(Pub. L. 104–134, § 31001(s), 110 Stat.

1358), which amended the Federal Civil

Penalties Inflation Adjustment Act of

1990 (Pub. L. 101–410, 104 Stat. 890),

the maximum penalty amount must be

increased by ten percent with respect to

violations that take place after these

proposed regulations become effective.

The proposed regulations are

designed to enhance administration of

the civil money penalty program. The

Department intends to minimize the

burden that uninsured operators place

on those operators in compliance with

the Act’s requirements and on the Black

Lung Disability Trust Fund. For

example, in a case where the miner’s

most recent employer was not insured,

potential liability for benefits will

typically fall on an earlier employer

which secured its benefits liability. This

situation places an additional burden on

an operator fully in compliance with the

Act’s insurance requirements. See

Director, OWCP v. Trace Fork Coal Co.,

67 F.3d 503, 507 (4th Cir. 1995).

Similarly, if no operator may be held

liable for the payment of a miner’s

benefits, the Trust Fund must assume

liability, 26 U.S.C. 9501(d)(1)(B),

placing an additional financial burden

on the indebted Fund.

Currently, the Department’s

procedural and substantive criteria for

administering the Act’s penalty

provision are contained in a single

regulation, 20 CFR 725.495, proposed in

April, 1978 and promulgated, without

comment, in August, 1978. The

proposed changes, which significantly

alter the existing regulation, are in

accordance with the 1979

recommendations of the Administrative

Conference of the United States, 1 CFR

305.79–3. In particular, the new

regulations are intended to accomplish

three goals: (1) establish criteria to be

used in assessing penalties against coal

mine operators; (2) provide affected

parties with notice of those criteria; and

(3) streamline the assessment process.

The current regulation provides only

that an administrative law judge should

impose ‘‘the maximum penalty

allowed’’ in the absence of ‘‘mitigating’’

circumstances. 20 CFR 725.495(d). The

regulation, however, does not define

mitigating circumstances. By allowing

each administrative law judge to

determine penalty amounts in this

manner, the regulation encourages

subjective and inconsistent application

of the statutory penalty. In Kleppe v.

Delta Mining, Inc., 423 U.S. 403 (1976),

the Supreme Court noted that the

Interior Department had only recently

developed formulas to be used in

determining penalty amounts under the

Federal Mine Safety and Health Act.

The Court noted that ‘‘[u]se of the

current regulations is preferable to the

ad hoc consideration given the

[statutory] criteria in this case.’’ 413

U.S. at 409 n.2.

The proposed regulations address this

problem by presenting a graduated

series of possible penalties based on a

set of enumerated criteria. The

regulations adjust the penalty based on

an operator’s size, its prior notice of the

Act’s insurance requirements, and the

operator’s action, or lack thereof,

following notification of the insurance

requirements. By publishing these

regulations, the Department establishes

penalty criteria and provides the public

with notice of those criteria for the first

time.

The proposed regulations also make

two procedural changes designed to

streamline the penalty assessment

process. Unlike the current regulation,

which requires the Office of Workers’

Compensation Programs to refer any

case to the Office of Administrative Law

Judges, whether contested or not, the

proposed regulations allow the

Department’s initial proposed penalty to

become final if no party requests a

hearing. This proposal recognizes the

wisdom and applicability of the

Supreme Court’s observation in

National Independent Coal Operators’

Association v. Kleppe, 423 U.S. 388, 399

(1976), which also arose under the

Federal Mine Health and Safety Act. In

that decision, the Court observed that

‘‘[e]ffective enforcement of the Act

would be weakened if the Secretary

were required to make findings of fact

for every penalty assessment including

those cases in which the mine operator

did not request a hearing and thereby

indicated no disagreement with the

Secretary’s proposed determination.’’ In

addition, the proposed regulations

provide for discretionary ‘‘appellate’’

review of administrative law judge

decisions by the Secretary of Labor at

the request of any party. Upon receipt

of a timely petition for review, the

Secretary will determine whether

review is warranted. This change is

designed to encourage the consistent

application of the criteria used to assess

a penalty. It is hoped that a uniform

body of penalty decisions will result

from allowing the Secretary of Labor to

review the decisions of administrative

law judges.

Substantively, the new regulations

add a definition of the time period

within which coal mine operators must

comply with the security requirement.

The proposed regulation, § 726.302(b),

distinguishes between operators that

purchase commercial insurance to

secure their liability and those that selfinsure. The obligations of the former are

extinguished when they cease mining

coal, while the latter group must

continue to secure the payment of

benefits. This distinction is based on

important differences in the type of

insurance coverage secured by each

group.

Under the Act, commercial insurance

issued to cover black lung liability has

no upper monetary limit; in exchange

for a premium, the carrier agrees to

assume liability for all claims arising

out of employment during the period

covered by the premium. Thus, an

operator that has purchased insurance

for the duration of its operation of a

mine does not leave behind any

unsecured liability when it ceases coal

mining.

In contrast, the Department typically

does not require self-insured operators

to post bonds or other security with a

face value that would cover all of the

operator’s expected black lung liability.

Indeed, requiring security for the full

amount of expected benefits might well

impose costs that many otherwise lowrisk operators could not bear. Rather,

the Department has been willing to rely

in part on a company’s size as a partial

guarantor of future benefit payments.

Accordingly, depending on the

operator’s assets, the Department

usually requires security to cover only

from three to fifteen years of the

operator’s payments on claims currently

in award status.

This requirement, however, has left

the Department vulnerable in several

recent bankruptcies involving large selfinsured operators, such as the LTV

Corporation and CF&I Fabricators. In

both cases, the companies had ceased

mining coal several years before filing

for bankruptcy protection, and had not

purchased bonds that reflected their

post-mining claims experience. The

proposed regulations attempt to remedy

this problem by requiring self-insured

operators to continue to secure the
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3371

payment of benefits to their employees

even after the operator has ceased

mining coal. A new paragraph (c) has

been added to § 726.114 to provide

notice of this duty to operators seeking

authorization to self-insure their

liabilities.

Finally, the proposed regulations will

be moved from part 725, which governs

the processing, adjudication, payment,

and enforcement of claims for benefits

under the Act, to part 726, which deals

exclusively with issues of insurance and

self-insurance. This move is intended to

centralize the regulations implementing

§ 423 of the Act. The Department also

hopes to eliminate any potential

confusion about the applicability of

certain incorporated provisions of the

Longshore and Harbor Workers’

Compensation Act. These provisions

simply do not apply to penalty

assessments.

20 CFR Part 727—Review of Pending

and Denied Claims under the Black

Lung Benefits Reform Act of 1977

In 1978, Congress required the

Department of Labor to promulgate

interim entitlement criteria that were

‘‘no more restrictive’’ than criteria used

to adjudicate claims that had been filed

with the Social Security Administration

under Part B of the Black Lung Benefits

Act. These interim criteria were to be

used until the Department could

develop permanent criteria. The part

727 interim regulations were published

at 43 FR 36818, Aug. 18, 1978. Because

the Department’s permanent part 718

criteria took effect on April 1, 1980, see

20 CFR 718.2, the part 727 regulations

only apply to claims filed before that

date. The Department estimates that

several hundred part 727 claims remain

pending in various stages of

adjudication. Because the parties to

these claims are quite familiar with the

standards for establishing eligibility

under part 727, and no new claims will

be adjudicated under these standards,

the Department intends to discontinue

the annual publication of part 727 in the

Code of Federal Regulations. Those

standards will remain in effect for all

claims to which they apply. Parties

interested in reviewing part 727 may

consult earlier editions of the Code of

Federal Regulations or the Federal

Register in which the regulations were

originally published.

Drafting Information

This document was prepared under

the direction and supervision of Bernard

Anderson, Assistant Secretary of Labor

for Employment Standards.

The principal authors of this

document are Rae Ellen James, Deputy

Associate Solicitor; Richard Seid,

Counsel for Administrative Litigation

and Legal Advice; and Michael Denney,

Counsel for Enforcement, Black Lung

Benefits Division, Office of the Solicitor,

U.S. Department of Labor. Personnel

from the Division of Coal Mine Workers’

Compensation, Office of Workers’

Compensation Programs, Employment

Standards Administration, U.S.

Department of Labor, assisted in the

preparation of the document.

Executive Order 12866

The Department believes that the

proposed regulatory changes will not

have a significant economic impact

upon the coal industry or significantly

affect the approval rate for black lung

claims. The proposed changes do not

pose novel legal or policy issues within

the meaning of the Executive Order

since most of the proposed changes are

codifications of appellate decisions or

procedural in nature. The proposed

changes are intended to encourage

faster, fairer and cheaper benefit

determinations as well as make it easier

to enforce employers’ and insurers’

responsibilities to pay benefits. They are

part of the Reinvention initiatives

supported by the National Performance

Review and have been reviewed by the

Office of Management and Budget for

consistency with its objectives.

Unfunded Mandates Reform Act

For purposes of the Unfunded

Mandates Reform Act of 1995, as well

as E.O. 12875, this rule does not include

any federal mandate that may result in

increased expenditures by State, local

and tribal governments, or increased

expenditures by the private sector of

more than $100 million.

Paperwork Reduction Act

The proposed changes would

establish no new record keeping

requirements. Moreover, they seek to

reduce the volume of medical

examination and consultants’ reports

which are currently created solely for

the purpose of litigation by limiting the

amount of such medical evidence which

will be admissible in black lung

proceedings.

Regulatory Flexibility Act, as Amended

The American coal industry has

produced a billion tons of coal

(anthracite, bituminous and lignite)

each year since 1990. The industry’s

output is worth approximately $20

billion per year, with the precise total

varying depending on market

conditions. Major segments of the

industry are highly mechanized and

very capital intensive, especially surface

mining operations and underground

operations using long wall mining

technology. More traditional segments

of the industry which still rely on the

older continuous miner technology are

somewhat more labor intensive. Overall,

however, labor costs in the industry

equal less than one fourth of the value

of its product output. Employment in

the coal industry has been steadily

declining as a result of increased

mechanization. It peaked at threequarters of a million men and boys in

1918 when total production reached

nearly 700 million tons. That

production record stood until the

Second World War, when new highs

were reached with a workforce which

had declined by 250,000.

The 1995 workforce in the industry

was only 97,380 according to the Mine

Safety and Health Administration

(MSHA). Bureau of Labor Statistics data

reflects an average hourly pay rate in the

coal industry for production or nonsupervisory workers in 1995 of $18.44.

Assuming full year round employment,

but no overtime, the annual per

employee wage costs would be $38,355

($18.44 per hour times 2080 hours).

Projecting that figure to the 1995

workforce yields an annual labor cost of

approximately $3.7 billion.

Employers engaged in the extraction

and preparation of coal are required by

the Black Lung Benefits Act to ‘‘secure

the payment’’ of any benefits to former

employees for which they are found

liable. They may either qualify with the

Department of Labor as self-insurers or

purchase insurance to satisfy that

statutory obligation.

Self-insurer status is only granted to

companies with a net worth of at least

$10 million and at least three years’

operating experience in the industry.

Approximately ten percent of the

companies now active in the industry

are authorized self-insurers or

subsidiaries of a corporate parent which

is an authorized self-insurer which has

guaranteed their liabilities under the

Act. The remaining companies in the

industry are dependent upon insurance

to meet their obligations. This is

normally done by purchasing a Federal

Black Lung rider as an attachment to

their state workers’ compensation

insurance policy. Premium rates for this

insurance are established by the

individual states and not by the Federal

Government.

The Division of Coal Mine Workers’

Compensation has published in its

Annual Reports occupational disease

insurance rates for eleven major coal

producing states for the largest group of

covered workers—underground

bituminous coal miners—since the
3372 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

1970’s. These rates are assessed per

$100 of payroll. Because of the offset

provisions, combined state and Federal

occupational disease coverage rates

were initially published. However,

beginning with the 1986 report, the state

and Federal rates are now shown

separately, for those states which

calculate them separately.

From 1986 through 1994 (the last year

for which data has been published), the

average Federal black lung insurance

rates have been virtually constant for

the nine states for which comparable

data is available throughout the period.

In 1986, the average rate was $4.23 per

$100 of payroll; for 1994 it was $4.33,

an increase of only 2.4%. During that

period, Federal coverage rates increased

in four states (Alabama, Illinois,

Kentucky and Tennessee), declined in

three states (Colorado, Indiana and

Utah) and remained unchanged in two

states (Virginia and West Virginia).

When a weighted average rate is

calculated based on the number of

underground miners in each state, the

rate becomes $3.65 per $100 of payroll.

Assuming a maximum impact

scenario, the total coal industry cost for

complying with the Act’s insurance

requirements would currently be $135

million ($3.7 billion of payroll times

$3.65 per $100 of payroll). In fact, it is

significantly less. Most larger employers

opt for self-insurance not only because

it provides direct control over claims

made against them by their former

employees but also because it is less

expensive than the purchase of

commercial coverage. Also, some job

classifications, especially in surface

mining, carry a lower premium rate than

that which is applicable to underground

bituminous miners. To produce an

economic impact on the coal industry of

$100 million per year or more, these

insurance costs would have to increase

by over 70%. Insurance rates are based

largely on a combination of historical

experience and actuarial projections of

future liabilities.

The current insurance rates are based

on the experience with eligibility

criteria as they have existed since the

1981 Amendments to the Act became

effective on January 1, 1982. Under

those criteria only 7.5% of the persons

who have applied for benefits have been

awarded them. A 70% increase in

approvals would be required to carry

that approval rate up to 13%. However,

there is nothing in the proposed

regulatory changes which alters those

eligibility criteria. Most of the changes

reflect a codification of appellate

decisions. Many of those decisions

involve liberalizing constructions of the

Act and regulations; however, the single

most important decision reflected is one

by the Supreme Court striking down the

‘‘true doubt’’ rule. This decision

requires the claimant to prove each

element of his case by a preponderance

of the evidence and prohibits giving the

claimant the benefit of the doubt when

the evidence is evenly balanced for and

against entitlement. Although these

changes are expected to simplify,

expedite and make more uniform the

results of the claims development and

decision processes, they are unlikely to

significantly alter case outcomes.

The major changes proposed are

procedural ones intended to level the

playing field between the individual

claimant and the employer or insurer by

placing limits upon the amount of

evidence which each party can submit.

The shift from a focus on the quantity

of evidence to the quality of the

evidence is a significant one in terms of

addressing past perceptions of

unfairness in the present system.

However, the employer or insurer,

who could previously overwhelm the

miner by the quantity of consultant

reports and x-ray re-readings it could

submit because of its greater financial

resources, will still have an inherent

advantage through possession of

superior access to the best credentialed

medical experts in the field. Even the

new regulation which codifies the

circumstances under which controlling

weight can be given to the opinion of

the miner’s treating physician is

unlikely to alter outcomes in very many

cases. Few general practitioners in rural

coal field areas are likely to meet the

combination of duration of treatment,

specialty qualifications and ability to

produce a reasoned narrative relating

their conclusions to the objective

medical data required to invoke this

special status.

The Department projects that the

approval rate will rise, but only from

7.5% to 8% or 9%. This increase in the

approval rate by 20% or less would

justify an increase in the premium rate

of less than 75 cents per $100 of payroll

for underground bituminous miners or,

using the maximum impact calculations

provided above, no more than $28

million industrywide per year. In fact,

insurance rates may increase slightly

more than this amount initially because

actuarial projections used in the

insurance ratemaking process tend to err

on the high side in projecting possible

future liabilities. A temporary increase

in the number of claims filings will

probably also occur in the first year after

promulgation of the regulations.

However, once a significant body of

experience has been gained under the

revised regulations, the rates will

stabilize at the appropriate level. In no

event does the Department anticipate an

increase of as much as $40 million per

year, even during the initial period prior

to establishing a new base of experience

under the revised procedures.

Approximately eighty percent of all

coal mined in the United States is

purchased by utilities for use in the

generation of electricity. Over one-half

of all electricity generated in the United

States is produced by coal-burning

plants. Approximately ten percent of all

coal mined in the United States is

exported.

The remaining ten percent of coal

mined is consumed domestically for a

variety of uses, including steelmaking,

heating, etc. An increase of

approximately $40 million per year in

the costs of a $20 billion industry

equates to only two-tenths of one

percent, or four cents per ton of coal

produced. It would not significantly

adversely impact coal’s competitive

position vis-a-vis other fuel sources,

such as petroleum, natural gas, or

nuclear power.

This analysis has not attempted to

apply definitions of small entities in the

coal mining industry which have been

developed by other agencies, such as

MSHA or the Small Business

Administration (SBA) for other

purposes for two basic reasons. First,

data on the number of miners employed

or total annual volume of business done

by individual companies is not

routinely gathered by the Division of

Coal Mine Workers’ Compensation

because it is not directly relevant to the

administration of the Black Lung

Benefits Act for employers who are

covered by insurance. The second and

more relevant reason is that the entities

active in the industry are divided into

the two classes of those eligible to selfinsure and those which are not.

Because of the high threshold

requirement of a net worth of $10

million, plus three years’ operating

experience in the industry, to qualify for

the privilege of self-insurance, all

entities which MSHA would classify as

‘‘small mines’’ are included in the

commercially insured category, except

those which are subsidiaries of qualified

self-insurers. The SBA definition of a

coal mining company as a small

business if it has fewer than 500

employees is not particularly helpful. A

highly mechanized and capitalized

mining company, especially in the

Western surface mining industry, may

well qualify as a self-insurer because of

its net worth and experience even

though it has many fewer than 500

employees. It is nonetheless true that it

is generally the smaller entities in the
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3373

industry which are dependent upon

commercial insurance coverage to meet

their obligations under the Act.

The point of this analysis, however, is

that all entities subject to the insurance

requirement will be equally affected by

any changes in insurance rates.

Therefore, their relative competitive

position vis-a-vis one another or vis-avis those companies eligible to selfinsure will not be adversely impacted

by any changes which may result from

the implementation of these regulatory

proposals. In summary, the Department

estimates that the proposed changes in

the regulations will impose a maximum

cost on firms of less than one percent of

payroll or two-tenths of one percent of

total revenue industrywide. Small firms

are not expected to be

disproportionately affected by these

changes. However, the Department

welcomes comments on this economic

analysis, especially concerning the

impact of the proposed changes on

small entities and self-insured

employers. Comments are also solicited

on the projected change in the approval

rate and any other factors which may be

relevant which are not currently

included in the analysis. Our current

assessment that the proposed

regulations will have no more than an

annual $40 million impact on the

industry may be affected by the

comments received.

Therefore, the Assistant Secretary

hereby certifies that implementation of

these proposed changes will not have a

significant economic impact on a

substantial number of small entities.

List of Subjects in 20 CFR Parts 718,

722, 725, 726 and 727.

Black lung benefits, Lung disease,

Miners, Mines, Reporting and

recordkeeping requirements, Workers’

Compensation, X-rays.

Signed at Washington, D.C., this 27th day

of December, 1996.

Robert B. Reich,

Secretary of Labor.

Gene Karp,

Acting Assistant Secretary for Employment

Standards.

For the reasons set forth in the

preamble, 20 CFR Chapter VI is

proposed to be amended as follows:

1. The authority citation for part 718

continues to read as follows:

Authority: 5 U.S.C. 301, Reorganization

Plan No. 6 of 1950, 15 FR 3174, 30 U.S.C. 901

et seq., 902(f), 925, 932, 934, 936, 945; 33

U.S.C. 901 et seq., 42 U.S.C. 405, Secretary’s

Order 7–87, 52 FR 48466, Employment

Standards Order No. 90–02.

2. Part 718 is proposed to be amended

by removing subpart E, revising

subparts A through D, revising

Appendices A and C, and revising the

text of Appendix B (the tables, B1

through B6, in Appendix B remain

unchanged):

PART 718—STANDARDS FOR

DETERMINING COAL MINERS’ TOTAL

DISABILITY OR DEATH DUE TO

PNEUMOCONIOSIS

Subpart A—General

Sec.

718.1 Statutory provisions.

718.2 Applicability of this part.

718.3 Scope and intent of this part.

718.4 Definitions and use of terms.

Subpart B—Criteria for the Development of

Medical Evidence

718.101 General.

718.102 Chest roentgenograms (X-rays).

718.103 Pulmonary function tests.

718.104 Report of physical examinations.

718.105 Arterial blood-gas studies.

718.106 Autopsy; biopsy.

718.107 Other medical evidence.

Subpart C—Determining Entitlement to

Benefits

718.201 Definition of pneumoconiosis.

718.202 Determining the existence of

pneumoconiosis.

718.203 Establishing relationship of

pneumoconiosis to coal mine

employment.

718.204 Total disability and disability

causation defined; criteria for

determining total disability and total

disability due to pneumoconiosis.

718.205 Death due to pneumoconiosis.

718.206 Effect of findings by persons or

agencies.

Subpart D—Presumptions Applicable to

Eligibility Determinations

718.301 Establishing length of employment

as a miner.

718.302 Relationship of pneumoconiosis to

coal mine employment.

718.303 Death from a respirable disease.

718.304 Irrebuttable presumption of total

disability or death due to

pneumoconiosis.

718.305 Presumption of pneumoconiosis.

718.306 Presumption of entitlement

applicable to certain death claims.

Appendix A to Part 718–Standards for

Administration and Interpretation of

Chest Roentgenograms (X-rays)

Appendix B to Part 718–Standards for

Administration and Interpretation of

Pulmonary Function Tests. Tables B1,

B2, B3, B4, B5, B6

Appendix C to Part 718–Blood Gas Tables

Subpart A—General

§ 718.1 Statutory Provisions.

(a) Under title IV of the Federal Coal

Mine Health and Safety Act of 1969, as

amended by the Black Lung Benefits Act

of 1972, the Federal Mine Safety and

Health Amendments Act of 1977, the

Black Lung Benefits Reform Act of 1977,

the Black Lung Benefits Revenue Act of

1977, the Black Lung Benefits

Amendments of 1981, and the Black

Lung Benefits Revenue Act of 1981,

benefits are provided to miners who are

totally disabled due to pneumoconiosis

and to certain survivors of a miner who

died due to or while totally or partially

disabled by pneumoconiosis. However,

unless the miner was found entitled to

benefits as a result of a claim filed prior

to January 1, 1982, benefits are payable

on survivors’ claims filed on or after

January 1, 1982, only when the miner’s

death was due to pneumoconiosis,

except where the survivor’s entitlement

is established pursuant to § 718.306 of

this part on a claim filed prior to June

30, 1982. Before the enactment of the

Black Lung Benefits Reform Act of 1977,

the authority for establishing standards

of eligibility for miners and their

survivors was placed with the Secretary

of Health, Education, and Welfare.

These standards were set forth by the

Secretary of Health, Education, and

Welfare in subpart D of part 410 of this

title, and adopted by the Secretary of

Labor for application to all claims filed

with the Secretary of Labor (see 20 CFR

718.2, 1978). Amendments made to

section 402(f) of the Act by the Black

Lung Benefits Reform Act of 1977

authorize the Secretary of Labor to

establish criteria for determining total or

partial disability or death due to

pneumoconiosis to be applied in the

processing and adjudication of claims

filed under part C of title IV of the Act.

Section 402(f) of the Act further

authorizes the Secretary of Labor, in

consultation with the National Institute

for Occupational Safety and Health, to

establish criteria for all appropriate

medical tests administered in

connection with a claim for benefits.

Section 413(b) of the Act authorizes the

Secretary of Labor to establish criteria

for the techniques to be used to take

chest roentgenograms (X-rays) in

connection with a claim for benefits

under the Act.

(b) The Black Lung Benefits Reform

Act of 1977 provided that with respect

to a claim filed prior to April 1, 1980,

or reviewed under section 435 of the

Act, the standards to be applied in the

adjudication of such claim shall not be

more restrictive than the criteria

applicable to a claim filed on June 30,

1973, with the Social Security

Administration, whether or not the final

disposition of the claim occurs after

March 31, 1980. All such claims shall be

reviewed under the criteria set forth in

part 727 of this title (see 20 CFR

725.4(d)).
3374 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

§718.2 Applicability of this part.

This part is applicable to the

adjudication of all claims filed after

March 31, 1980, and considered by the

Secretary of Labor under section 422 of

the Act and part 725 of this subchapter.

If a claim subject to the provisions of

section 435 of the Act and subpart C of

part 727 of this subchapter (see 20 CFR

725.4(d)) cannot be approved under that

subpart, such claim may be approved, if

appropriate, under the provisions

contained in this part. The provisions of

this part shall, to the extent appropriate,

be construed together in the

adjudication of all claims.

§718.3 Scope and intent of this part.

(a) This part sets forth the standards

to be applied in determining whether a

coal miner is or was totally, or in the

case of a claim subject to §718.306

partially, disabled due to

pneumoconiosis or died due to

pneumoconiosis. It also specifies the

procedures and requirements to be

followed in conducting medical

examinations and in administering

various tests relevant to such

determinations.

(b) This part is designed to interpret

the presumptions contained in section

411(c) of the Act, evidentiary standards

and criteria contained in section 413(b)

of the Act and definitional requirements

and standards contained in section

402(f) of the Act within a coherent

framework for the adjudication of

claims. It is intended that these

enumerated provisions of the Act be

construed as provided in this part.

§718.4 Definitions and use of terms.

Except as is otherwise provided by

this part, the definitions and usages of

terms contained in §725.101 of subpart

A of part 725 of this title shall be

applicable to this part.

Subpart B—Criteria for the

Development of Medical Evidence

§718.101 General.

(a) The Office of Workers’

Compensation Programs (hereinafter

OWCP or the Office) shall develop the

medical evidence necessary for a

determination with respect to each

claimant’s entitlement to benefits. Each

miner who files a claim for benefits

under the Act shall be provided an

opportunity to substantiate his or her

claim by means of a complete

pulmonary evaluation including, but

not limited to, a chest roentgenogram

(X-ray), physical examination,

pulmonary function tests and a bloodgas study.

(b) The standards for the

administration of clinical tests and

examinations contained in this subpart

shall apply to all evidence developed by

any party in connection with a claim

governed by this part (see §§725.406(b),

725.414(a), 725.456(d)). These standards

shall also apply to claims governed by

part 727 (see 20 CFR 725.4(d)), but only

for clinical tests or examinations

conducted after March 31, 1980. Any

clinical test or examination subject to

these standards shall be in substantial

compliance with the applicable

standard in order to constitute evidence

of the fact for which it is proffered.

Unless otherwise provided, any

evidence which is not in substantial

compliance with the applicable

standard is insufficient to establish the

fact for which it is proffered.

§718.102 Chest roentgenograms (X-rays).

(a) A chest roentgenogram (X-ray)

shall be of suitable quality for proper

classification of pneumoconiosis and

shall conform to the standards for

administration and interpretation of

chest X-rays as described in Appendix

A to this part.

(b) A chest X-ray to establish the

existence of pneumoconiosis shall be

classified as Category 1, 2, 3, A, B, or C,

according to the International Labour

Organization Union Internationale

Contra Cancer/Cincinnati (1971)

International Classification of

Radiographs of the Pneumoconioses

(ILO–U/C 1971), or subsequent revisions

thereof. A chest X-ray classified as

Category Z under the ILO Classification

(1958) or Short Form (1968) shall be

reclassified as Category O or Category 1

as appropriate, and only the latter

accepted as evidence of

pneumoconiosis. A chest X-ray

classified under any of the foregoing

classifications as Category O, including

sub-categories 0—, 0/0, or 0/1 under the

UICC/Cincinnati (1968) Classification or

the ILO–U/C 1971 Classification does

not constitute evidence of

pneumoconiosis.

(c) A description and interpretation of

the findings in terms of the

classifications described in paragraph

(b) of this section shall be submitted by

the examining physician along with the

film. The report shall specify the name

and qualifications of the person who

took the film and the name and

qualifications of the physician

interpreting the film. If the physician

interpreting the film is a Board-certified

or Board-eligible radiologist or a

certified ‘‘B’’ reader (see §718.202), he

or she shall so indicate. The report shall

further specify that the film was

interpreted in compliance with this

paragraph.

(d) The original film on which the Xray report is based shall be supplied to

the Office, unless prohibited by law, in

which event the report shall be

considered as evidence only if the

original film is otherwise available to

the Office and other parties. Where the

chest X-ray of a deceased miner has

been lost, destroyed or is otherwise

unavailable, a report of a chest X-ray

submitted by any party shall be

considered in connection with the

claim.

(e) No chest X-ray shall constitute

evidence of the presence or absence of

pneumoconiosis unless it is conducted

and reported in accordance with the

requirements of this section and

Appendix A. In the absence of evidence

to the contrary, compliance with the

requirements of Appendix A shall be

presumed. In the case of a deceased

miner where the only available X-ray

does not substantially comply with this

subpart, such X-ray shall be considered

and shall be accorded appropriate

weight in light of all relevant evidence

if it is of sufficient quality for

determining the presence or absence of

pneumoconiosis and such X-ray was

interpreted by a Board-certified or

Board-eligible radiologist or a certified

‘‘B’’ reader (see §718.202).

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§718.103 Pulmonary function tests.

(a) Any report of pulmonary function

tests submitted in connection with a

claim for benefits shall record the

results of the forced expiratory volume

in one second (FEV1) and either the

forced vital capacity (FVC) or the

maximum voluntary ventilation (MVV)

or both. If the MVV is reported, the

results of such test shall be obtained

independently rather than calculated

from the results of the FEV1.

(b) All pulmonary function test results

submitted in connection with a claim

for benefits shall be accompanied by

three tracings of each test performed,

unless the results of two tracings of the

MVV are within 5% of each other, in

which case two tracings for that test

shall be sufficient. Pulmonary function

test results submitted in connection

with a claim for benefits shall also

include a statement signed by the

physician or technician conducting the

test setting forth the following:

(1) Date and time of test;

(2) Name, DOL claim number, age,

height, and weight of claimant at the

time of the test;

(3) Name of technician;

(4) Name and signature of physician

supervising the test;
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(5) Claimant’s ability to understand

the instructions, ability to follow

directions and degree of cooperation in

performing the tests. If the claimant is

unable to complete the test, the person

executing the report shall set forth the

reasons for such failure;

(6) Paper speed of the instrument

used;

(7) Name of the instrument used;

(8) Whether a bronchodilator was

administered. If a bronchodilator is

administered, the physician’s report

must detail values obtained both before

and after administration of the

bronchodilator and explain the

significance of the results obtained; and

(9) That the requirements of

paragraphs (b) and (c) of this section

have been complied with.

(c) No results of a pulmonary function

study shall constitute evidence of the

presence or absence of a respiratory or

pulmonary impairment unless it is

conducted and reported in accordance

with the requirements of this section

and Appendix B to this part. In the

absence of evidence to the contrary,

compliance with the requirements of

Appendix B shall be presumed. In the

case of a deceased miner, special

consideration shall be given to

noncomplying tests if, in the opinion of

the adjudication officer, the only

available tests demonstrate technically

valid results obtained with good

cooperation of the miner.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§718.104 Report of physical examinations.

(a) A report of any physical

examination conducted in connection

with a claim shall be prepared on a

medical report form supplied by the

Office or in a manner containing

substantially the same information. Any

such report shall include the following

information and test results:

(1) The miner’s medical and

employment history;

(2) All manifestations of chronic

respiratory disease;

(3) Any pertinent findings not

specifically listed on the form;

(4) If heart disease secondary to lung

disease is found, all symptoms and

significant findings;

(5) The results of a chest X-ray

conducted and interpreted as required

by §718.102; and

(6) The results of a pulmonary

function test conducted and reported as

required by §718.103.

(b) In addition to the requirements of

paragraph (a), a report of physical

examination may be based on any other

procedures such as electrocardiogram,

blood-gas studies conducted and

reported as required by §718.105, and

other blood analyses which, in the

physician’s opinion, aid in his or her

evaluation of the miner.

(c) In the case of a deceased miner, a

report prepared by a physician who is

unavailable, which fails to meet the

criteria of paragraph (a), may be given

appropriate consideration and weight by

the adjudicator in light of all relevant

evidence provided no report which does

comply with this section is available.

(d) Treating physician. The medical

opinion of a miner’s treating physician

may be entitled to controlling weight in

determining whether the miner is, or

was, totally disabled by pneumoconiosis

or died due to pneumoconiosis. The

adjudication officer shall take into

consideration the following factors in

weighing the opinion of a treating

physician:

(1) Nature of relationship. The

opinion of a physician who has treated

the miner for respiratory or pulmonary

conditions is entitled to more weight

than a physician who has treated the

miner for non-respiratory conditions;

(2) Duration of relationship. The

length of the treatment relationship

demonstrates whether the physician has

observed the miner long enough to

obtain a superior understanding of his

or her condition;

(3) Frequency of treatment. The

frequency of physician-patient visits

demonstrates whether the physician has

observed the miner often enough to

obtain a superior understanding of his

or her condition; and

(4) Extent of treatment. The types of

testing and examinations conducted

during the treatment relationship

demonstrate whether the physician has

obtained superior and relevant

information concerning the miner’s

condition.

(5) Whether controlling weight is

given to the opinion of a miner’s

treating physician shall also be based on

the credibility of the physician’s

opinion in light of its reasoning and

documentation, other relevant evidence

and the record as a whole.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 718.105 Arterial blood-gas studies.

(a) Blood-gas studies are performed to

detect an impairment in the process of

alveolar gas exchange. This defect will

manifest itself primarily as a fall in

arterial oxygen tension either at rest or

during exercise. No blood-gas study

shall be performed if medically

contraindicated.

(b) A blood-gas study shall initially be

administered at rest and in a sitting

position. If the results of the blood-gas

test at rest do not satisfy the

requirements of Appendix C to this part,

an exercise blood-gas test shall be

offered to the miner unless medically

contraindicated. If an exercise blood-gas

test is administered, blood shall be

drawn during exercise.

(c) Any report of a blood-gas study

submitted in connection with a claim

shall specify:

(1) Date and time of test;

(2) Altitude and barometric pressure

at which the test was conducted;

(3) Name and DOL claim number of

the claimant;

(4) Name of technician;

(5) Name and signature of physician

supervising the study;

(6) The recorded values for pCO2,

pO2, and pH, which have been collected

simultaneously (specify values at rest

and, if performed, during exercise);

(7) Duration and type of exercise;

(8) Pulse rate at the time the blood

sample was drawn;

(9) Time between drawing of sample

and analysis of sample; and

(10) Whether equipment was

calibrated before and after each test.

(d) If one or more blood-gas studies

producing results which meet the

appropriate table in Appendix C is

administered during a hospitalization

which ends in the miner’s death, then

any such study must be accompanied by

a physician’s report establishing that the

test results were produced by a chronic

respiratory or pulmonary condition

related to coal mine dust exposure, and

not by a disease unrelated to such

exposure. Failure to produce such a

report will prevent reliance on the

blood-gas study as evidence that the

miner was totally disabled at death.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 718.106 Autopsy; biopsy.

(a) A report of an autopsy or biopsy

submitted in connection with a claim

shall include a detailed gross

macroscopic and microscopic

description of the lungs or visualized

portion of a lung. If a surgical procedure

has been performed to obtain a portion

of a lung, the evidence shall include a

copy of the surgical note and the

pathology report of the gross and

microscopic examination of the surgical

specimen. If an autopsy has been

performed, a complete copy of the

autopsy report shall be submitted to the

Office.

(b) In the case of a miner who died

prior to March 31, 1980, an autopsy or
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biopsy report shall be considered even

when the report does not substantially

comply with the requirements of this

section. A noncomplying report

concerning a miner who died prior to

March 31, 1980, shall be accorded the

appropriate weight in light of all

relevant evidence.

§ 718.107 Other medical evidence.

(a) The results of any medically

acceptable test or procedure reported by

a physician and not addressed in this

subpart, which tends to demonstrate the

presence or absence of pneumoconiosis,

the sequelae of pneumoconiosis or a

respiratory impairment, may be

submitted in connection with a claim

and shall be given appropriate

consideration.

(b) The party submitting the test or

procedure pursuant to this section bears

the burden to demonstrate that the test

or procedure is medically acceptable

and relevant to establishing or refuting

a claimant’s entitlement to benefits.

Subpart C—Determining Entitlement to

Benefits

§ 718.201 Definition of pneumoconiosis.

(a) For the purpose of the Act,

‘‘pneumoconiosis’’ means a chronic

dust disease of the lung and its

sequelae, including respiratory and

pulmonary impairments, arising out of

coal mine employment. This definition

includes both medical, or ‘‘clinical,’’

pneumoconiosis and statutory, or

‘‘legal,’’ pneumoconiosis.

(1) Clinical pneumoconiosis. ‘‘Clinical

pneumoconiosis’’ consists of those

diseases, recognized by the medical

community as pneumoconioses, i.e., the

conditions characterized by permanent

deposition of substantial amounts of

particulate matter in the lungs and the

fibrotic reaction of the lung tissue to

that deposition caused by dust exposure

in coal mine employment. This

definition includes, but is not limited

to, coal workers’ pneumoconiosis,

anthracosilicosis, anthracosis,

anthrosilicosis, massive pulmonary

fibrosis, silicosis or silicotuberculosis,

arising out of coal mine employment.

(2) Legal pneumoconiosis. ‘‘Legal

pneumoconiosis’’ includes any chronic

lung disease or impairment and its

sequelae arising out of coal mine

employment. This definition includes,

but is not limited to, any chronic

restrictive or obstructive pulmonary

disease arising out of coal mine

employment.

(b) For purposes of this section, a

disease ‘‘arising out of coal mine

employment’’ includes any chronic

pulmonary disease or respiratory or

pulmonary impairment significantly

related to, or substantially aggravated

by, dust exposure in coal mine

employment.

(c) For purposes of this definition,

‘‘pneumoconiosis’’ is recognized as a

latent and progressive disease which

may first become detectable only after

the cessation of coal mine dust

exposure.

§ 718.202 Determining the existence of

pneumoconiosis.

(a) A finding of the existence of

pneumoconiosis may be made as

follows:

(1) A chest

X-ray conducted and classified in

accordance with § 718.102 may form the

basis for a finding of the existence of

pneumoconiosis. Except as otherwise

provided in this section, where two or

more X-ray reports are in conflict, in

evaluating such

X-ray reports consideration shall be

given to the radiological qualifications

of the physicians interpreting such Xrays.

(i) In all claims filed before January 1,

1982, where there is other evidence of

pulmonary or respiratory impairment, a

Board-certified or Board-eligible

radiologist’s interpretation of a chest Xray shall be accepted by the Office if the

X-ray is in compliance with the

requirements of § 718.102 and if such Xray has been taken by a radiologist or

qualified radiologic technologist or

technician and there is no evidence that

the claim has been fraudulently

represented. However, these limitations

shall not apply to any claim filed on or

after January 1, 1982.

(ii) The following definitions shall

apply when making a finding in

accordance with this paragraph.

(A) The term other evidence means

medical tests such as blood-gas studies,

pulmonary function studies or physical

examinations or medical histories

which establish the presence of a

chronic pulmonary, respiratory or

cardio-pulmonary condition, and in the

case of a deceased miner, in the absence

of medical evidence to the contrary,

affidavits of persons with knowledge of

the miner’s physical condition.

(B) Pulmonary or respiratory

impairment means inability of the

human respiratory apparatus to perform

in a normal manner one or more of the

three components of respiration,

namely, ventilation, perfusion and

diffusion.

(C) Board-certified means certification

in radiology or diagnostic roentgenology

by the American Board of Radiology,

Inc. or the American Osteopathic

Association.

(D) Board-eligible means the

successful completion of a formal

accredited residency program in

radiology or diagnostic roentgenology.

(E) Certified ‘B’ reader or ‘B’ reader

means a physician who has

demonstrated proficiency in evaluating

chest roentgenograms for

roentgenographic quality and in the use

of the ILO–U/C classification for

interpreting chest roentgenograms for

pneumoconiosis and other diseases by

taking and passing a specially designed

proficiency examination given on behalf

of or by the Appalachian Laboratory for

Occupational Safety and Health. See 42

CFR 37.51(b)(2).

(F) Qualified radiologic technologist

or technician means an individual who

is either certified as a registered

technologist by the American Registry of

Radiologic Technologists or licensed as

a radiologic technologist by a state

licensing board.

(2) A biopsy or autopsy conducted

and reported in compliance with

§ 718.106 may be the basis for a finding

of the existence of pneumoconiosis. A

finding in an autopsy or biopsy of

anthracotic pigmentation, however,

shall not be sufficient, by itself, to

establish the existence of

pneumoconiosis. A report of autopsy

shall be accepted unless there is

evidence that the report is not accurate

or that the claim has been fraudulently

represented.

(3) If the presumptions described in

§§ 718.304, 718.305 or 718.306 are

applicable, it shall be presumed that the

miner is or was suffering from

pneumoconiosis.

(4) A determination of the existence of

pneumoconiosis may also be made if a

physician, exercising sound medical

judgment, notwithstanding a negative Xray, finds that the miner suffers or

suffered from pneumoconiosis as

defined in § 718.201. Any such finding

shall be based on objective medical

evidence such as blood-gas studies,

electrocardiograms, pulmonary function

studies, physical performance tests,

physical examination, and medical and

work histories. Such a finding shall be

supported by a reasoned medical

opinion.

(b) No claim for benefits shall be

denied solely on the basis of a negative

chest X-ray.

(c) A determination of the existence of

pneumoconiosis shall not be made

solely on the basis of a living miner’s

statements or testimony. Nor shall such

a determination be made upon a claim

involving a deceased miner filed on or

after January 1, 1982, solely based upon

the affidavit(s) (or equivalent sworn

testimony) of the claimant and/or his or
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3377

her dependents who would be eligible

for augmentation of the claimant’s

benefits if the claim were approved.

§ 718.203 Establishing relationship of

pneumoconiosis to coal mine employment.

(a) In order for a claimant to be found

eligible for benefits under the Act, it

must be determined that the miner’s

pneumoconiosis arose at least in part

out of coal mine employment. The

provisions in this section set forth the

criteria to be applied in making such a

determination.

(b) If a miner who is suffering or

suffered from pneumoconiosis was

employed for ten years or more in one

or more coal mines, there shall be a

rebuttable presumption that the

pneumoconiosis arose out of such

employment.

(c) If a miner who is suffering or

suffered from pneumoconiosis was

employed less than ten years in the

nation’s coal mines, it shall be

determined that such pneumoconiosis

arose out of that employment only if

competent evidence establishes such a

relationship.

§ 718.204 Total disability and disability

causation defined; criteria for determining

total disability and total disability due to

pneumoconiosis.

(a) General. Benefits are provided

under the Act for or on behalf of miners

who are totally disabled due to

pneumoconiosis, or who were totally

disabled due to pneumoconiosis at the

time of death. For purposes of this

section, any nonpulmonary or

nonrespiratory condition or disease,

which causes an independent disability

unrelated to the miner’s pulmonary or

respiratory disability, shall not be

considered in determining whether a

miner is totally disabled due to

pneumoconiosis. If, however, a

nonpulmonary or nonrespiratory

condition or disease causes a chronic

respiratory or pulmonary impairment,

that condition or disease shall be

considered in determining whether the

miner is or was totally disabled due to

pneumoconiosis.

(b)(1) Total disability defined. A

miner shall be considered totally

disabled if the irrebuttable presumption

described in § 718.304 applies. If that

presumption does not apply, a miner

shall be considered totally disabled if

the miner has a pulmonary or

respiratory impairment which, standing

alone, prevents or prevented the miner:

(i) From performing his or her usual

coal mine work; and

(ii) From engaging in gainful

employment in the immediate area of

his or her residence requiring the skills

or abilities comparable to those of any

employment in a mine or mines in

which he or she previously engaged

with some regularity over a substantial

period of time.

(2) Medical criteria. In the absence of

contrary probative evidence, evidence

which meets the standards of either

paragraphs (b)(2) (i), (ii), (iii), or (iv) of

this section shall establish a miner’s

total disability:

(i) Pulmonary function tests showing

values equal to or less than those listed

in Table B1 (Males) or Table B2

(Females) in Appendix B to this part for

an individual of the miner’s age, sex,

and height for the FEV1 test; if, in

addition, such tests also reveal the

values specified in either paragraph

(b)(2)(i) (A) or (B) or (C) of this section:

(A) Values equal to or less than those

listed in Table B3 (Males) or Table B4

(Females) in Appendix B of this part, for

an individual of the miner’s age, sex,

and height for the FVC test, or

(B) Values equal to or less than those

listed in Table B5 (Males) or Table B6

(Females) in Appendix B to this part, for

an individual of the miner’s age, sex,

and height for the MVV test, or

(C) A percentage of 55 or less when

the results of the FEV1 test are divided

by the results of the FVC test (FEV1/

FVC equal to or less than 55%), or

(ii) Arterial blood-gas tests show the

values listed in Appendix C to this part,

or

(iii) The miner has pneumoconiosis

and has been shown by the medical

evidence to be suffering from cor

pulmonale with right-sided congestive

heart failure, or

(iv) A physician exercising reasoned

medical judgment, based on medically

acceptable clinical and laboratory

diagnostic techniques, concludes that a

miner’s respiratory or pulmonary

condition prevents or prevented the

miner from engaging in employment as

described in paragraph (b)(1) of this

section.

(c)(1) Total disability due to

pneumoconiosis defined. A miner shall

be considered totally disabled due to

pneumoconiosis if pneumoconiosis, as

defined in § 718.201, is a substantially

contributing cause of the miner’s totally

disabling respiratory or pulmonary

impairment. Pneumoconiosis is a

‘‘substantially contributing cause’’ of the

miner’s disability if it:

(i) Has an adverse effect on the

miner’s respiratory or pulmonary

condition; or

(ii) Worsens a totally disabling

respiratory or pulmonary impairment

which is caused by a disease or

exposure unrelated to coal mine

employment.

(2) Except as provided in § 718.305

and paragraph (b)(2)(iii) of this section,

proof that the miner suffers or suffered

from a totally disabling respiratory or

pulmonary impairment as defined in

paragraphs (b)(2)(i), (b)(2)(ii), (b)(2)(iv)

and (d) of this section shall not, by

itself, be sufficient to establish that the

miner’s impairment is or was due to

pneumoconiosis. Except as provided in

paragraph (d), the cause or causes of a

miner’s total disability shall be

established by means of a physician’s

documented and reasoned medical

report.

(d) Lay evidence. In establishing total

disability, lay evidence may be used in

the following cases:

(1) In a case involving a deceased

miner in which the claim was filed prior

to January 1, 1982, affidavits (or

equivalent sworn testimony) from

persons knowledgeable of the miner’s

physical condition shall be sufficient to

establish total (or under § 718.306

partial) disability due to

pneumoconiosis if no medical or other

relevant evidence exists which

addresses the miner’s pulmonary or

respiratory condition.

(2) In a case involving a survivor’s

claim filed on or after January 1, 1982,

but prior to June 30, 1982, which is

subject to § 718.306, affidavits (or

equivalent sworn testimony) from

persons knowledgeable of the miner’s

physical condition shall be sufficient to

establish total or partial disability due to

pneumoconiosis if no medical or other

relevant evidence exists which

addresses the miner’s pulmonary or

respiratory condition; however, such a

determination shall not be based solely

upon the affidavits or testimony of the

claimant and/or his or her dependents

who would be eligible for augmentation

of the claimant’s benefits if the claim

were approved.

(3) In a case involving a deceased

miner whose claim was filed on or after

January 1, 1982, affidavits (or equivalent

sworn testimony) from persons

knowledgeable of the miner’s physical

condition shall be sufficient to establish

total disability due to pneumoconiosis if

no medical or other relevant evidence

exists which addresses the miner’s

pulmonary or respiratory condition;

however, such a determination shall not

be based solely upon the affidavits or

testimony of any person who would be

eligible for benefits (including

augmented benefits) if the claim were

approved.

(4) Statements made before death by

a deceased miner about his or her

physical condition are relevant and

shall be considered in making a
3378 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

determination as to whether the miner

was totally disabled at the time of death.

(5) In the case of a living miner’s

claim, a finding of total disability due to

pneumoconiosis shall not be made

solely on the miner’s statements or

testimony.

(e) In determining total disability to

perform usual coal mine work, the

following shall apply in evaluating the

miner’s employment activities:

(1) In the case of a deceased miner,

employment in a mine at the time of

death shall not be conclusive evidence

that the miner was not totally disabled.

To disprove total disability, it must be

shown that at the time the miner died,

there were no changed circumstances of

employment indicative of his or her

reduced ability to perform his or her

usual coal mine work.

(2) In the case of a living miner, proof

of current employment in a coal mine

shall not be conclusive evidence that

the miner is not totally disabled unless

it can be shown that there are no

changed circumstances of employment

indicative of his or her reduced ability

to perform his or her usual coal mine

work.

(3) Changed circumstances of

employment indicative of a miner’s

reduced ability to perform his or her

usual coal mine work may include but

are not limited to:

(i) The miner’s reduced ability to

perform his or her customary duties

without help; or

(ii) The miner’s reduced ability to

perform his or her customary duties at

his or her usual levels of rapidity,

continuity or efficiency; or

(iii) The miner’s transfer by request or

assignment to less vigorous duties or to

duties in a less dusty part of the mine.

§ 718.205 Death due to pneumoconiosis.

(a) Benefits are provided to eligible

survivors of a miner whose death was

due to pneumoconiosis. In order to

receive benefits, the claimant must

prove that:

(1) The miner had pneumoconiosis

(see § 718.202);

(2) The miner’s pneumoconiosis arose

out of coal mine employment (see

§ 718.203); and

(3) The miner’s death was due to

pneumoconiosis as provided by this

section.

(b) For the purpose of adjudicating

survivors’ claims filed prior to January

1, 1982, death will be considered due to

pneumoconiosis if any of the following

criteria is met:

(1) Where competent medical

evidence established that the miner’s

death was due to pneumoconiosis, or

(2) Where death was due to multiple

causes including pneumoconiosis and it

is not medically feasible to distinguish

which disease caused death or the

extent to which pneumoconiosis

contributed to the cause of death, or

(3) Where the presumption set forth at

§ 718.304 is applicable, or

(4) Where either of the presumptions

set forth at § 718.303 or § 718.305 is

applicable and has not been rebutted.

(5) Where the cause of death is

significantly related to or aggravated by

pneumoconiosis.

(c) For the purpose of adjudicating

survivors’ claims filed on or after

January 1, 1982, death will be

considered to be due to pneumoconiosis

if any of the following criteria is met:

(1) Where competent medical

evidence establishes that

pneumoconiosis was the cause of the

miner’s death, or

(2) Where pneumoconiosis was a

substantially contributing cause or

factor leading to the miner’s death or

where the death was caused by

complications of pneumoconiosis, or

(3) Where the presumption set forth at

§ 718.304 is applicable.

(4) However, survivors are not eligible

for benefits where the miner’s death was

caused by a traumatic injury or the

principal cause of death was a medical

condition not related to

pneumoconiosis, unless the evidence

establishes that pneumoconiosis was a

substantially contributing cause of

death.

(5) Pneumoconiosis is a ‘‘substantially

contributing cause’’ of a miner’s death if

it hastens the miner’s death.

(d) To minimize the hardships to

potentially entitled survivors due to the

disruption of benefits upon the miner’s

death, survivors’ claims filed on or after

January 1, 1982, shall be adjudicated on

an expedited basis in accordance with

the following procedures. The initial

burden is upon the claimant, with the

assistance of the district director, to

develop evidence which meets the

requirements of paragraph (c) of this

section. Where the initial medical

evidence appears to establish that death

was due to pneumoconiosis, the

survivor will receive benefits unless the

weight of the evidence as subsequently

developed by the Department or the

responsible operator establishes that the

miner’s death was not due to

pneumoconiosis as defined in paragraph

(c). However, no such benefits shall be

found payable before the party

responsible for the payment of such

benefits shall have had a reasonable

opportunity for the development of

rebuttal evidence. See § 725.414

concerning the operator’s opportunity to

develop evidence prior to an initial

determination.

§ 718.206 Effect of findings by persons or

agencies.

Decisions, statements, reports,

opinions, or the like, of agencies,

organizations, physicians or other

individuals, about the existence, cause,

and extent of a miner’s disability, or the

cause of a miner’s death, are admissible.

If properly submitted, such evidence

shall be considered and given the

weight to which it is entitled as

evidence under all the facts before the

adjudication officer in the claim.

Subpart D—Presumptions Applicable

to Eligibility Determinations

§ 718.301 Establishing length of

employment as a miner.

The presumptions set forth in

§§ 718.302, 718.303, 718.305 and

718.306 apply only if a miner worked in

one or more coal mines for the number

of years required to invoke the

presumption. The length of the miner’s

coal mine work history must be

computed as provided by 20 CFR

725.101(a)(32).

§ 718.302 Relationship of pneumoconiosis

to coal mine employment.

If a miner who is suffering or suffered

from pneumoconiosis was employed for

ten years or more in one or more coal

mines, there shall be a rebuttable

presumption that the pneumoconiosis

arose out of such employment. (See

§ 718.203.)

§ 718.303 Death from a respirable disease.

(a)(1) If a deceased miner was

employed for ten or more years in one

or more coal mines and died from a

respirable disease, there shall be a

rebuttable presumption that his or her

death was due to pneumoconiosis.

(2) Under this presumption, death

shall be found due to a respirable

disease in any case in which the

evidence establishes that death was due

to multiple causes, including a

respirable disease, and it is not

medically feasible to distinguish which

disease caused death or the extent to

which the respirable disease contributed

to the cause of death.

(b) The presumption of paragraph (a)

of this section may be rebutted by a

showing that the deceased miner did

not have pneumoconiosis, that his or

her death was not due to

pneumoconiosis or that pneumoconiosis

did not contribute to his or her death.

(c) This section is not applicable to

any claim filed on or after January 1,

1982.
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3379

§ 718.304 Irrebuttable presumption of total

disability or death due to pneumoconiosis.

There is an irrebuttable presumption

that a miner is totally disabled due to

pneumoconiosis, that a miner’s death

was due to pneumoconiosis or that a

miner was totally disabled due to

pneumoconiosis at the time of death, if

such miner is suffering or suffered from

a chronic dust disease of the lung

which:

(a) When diagnosed by chest X-ray

(see § 718.202 concerning the standards

for X-rays and the effect of

interpretations of X-rays by physicians)

yields one or more large opacities

(greater than 1 centimeter in diameter)

and would be classified in Category A,

B, or C in:

(1) The ILO–U/C International

Classification of Radiographs of the

Pneumoconioses, 1971, or subsequent

revisions thereto; or

(2) The International Classification of

the Radiographs of the Pneumoconioses

of the International Labour Office,

Extended Classification (1968) (which

may be referred to as the ‘‘ILO

Classification (1968)’’); or

(3) The Classification of the

Pneumoconioses of the Union

Internationale Contra Cancer/Cincinnati

(1968) (which may be referred to as the

‘‘UICC/Cincinnati (1968)

Classification’’); or

(b) When diagnosed by biopsy or

autopsy, yields massive lesions in the

lung; or

(c) When diagnosed by means other

than those specified in paragraphs (a)

and (b) of this section, would be a

condition which could reasonably be

expected to yield the results described

in paragraph (a) or (b) of this section

had diagnosis been made as therein

described: Provided, however, That any

diagnosis made under this paragraph

shall accord with acceptable medical

procedures.

§ 718.305 Presumption of

pneumoconiosis.

(a) If a miner was employed for fifteen

years or more in one or more

underground coal mines, and if there is

a chest X-ray submitted in connection

with such miner’s or his or her

survivor’s claim and it is interpreted as

negative with respect to the

requirements of § 718.304, and if other

evidence demonstrates the existence of

a totally disabling respiratory or

pulmonary impairment, then there shall

be a rebuttable presumption that such

miner is totally disabled due to

pneumoconiosis, that such miner’s

death was due to pneumoconiosis, or

that at the time of death such miner was

totally disabled by pneumoconiosis. In

the case of a living miner’s claim, a

spouse’s affidavit or testimony may not

be used by itself to establish the

applicability of the presumption. The

Secretary shall not apply all or a portion

of the requirement of this paragraph that

the miner work in an underground mine

where it is determined that conditions

of the miner’s employment in a coal

mine were substantially similar to

conditions in an underground mine.

The presumption may be rebutted only

by establishing that the miner does not,

or did not, have pneumoconiosis, or that

his or her respiratory or pulmonary

impairment did not arise out of, or in

connection with, employment in a coal

mine.

(b) In the case of a deceased miner,

where there is no medical or other

relevant evidence, affidavits of persons

having knowledge of the miner’s

condition shall be considered to be

sufficient to establish the existence of a

totally disabling respiratory or

pulmonary impairment for purposes of

this section.

(c) The determination of the existence

of a totally disabling respiratory or

pulmonary impairment, for purposes of

applying the presumption described in

this section, shall be made in

accordance with § 718.204.

(d) Where the cause of death or total

disability did not arise in whole or in

part out of dust exposure in the miner’s

coal mine employment or the evidence

establishes that the miner does not or

did not have pneumoconiosis, the

presumption will be considered

rebutted. However, in no case shall the

presumption be considered rebutted on

the basis of evidence demonstrating the

existence of a totally disabling

obstructive respiratory or pulmonary

disease of unknown origin.

(e) This section is not applicable to

any claim filed on or after January 1,

1982.

§ 718.306 Presumption of entitlement

applicable to certain death claims.

(a) In the case of a miner who died on

or before March 1, 1978, who was

employed for 25 or more years in one

or more coal mines prior to June 30,

1971, the eligible survivors of such

miner whose claims have been filed

prior to June 30, 1982, shall be entitled

to the payment of benefits, unless it is

established that at the time of death

such miner was not partially or totally

disabled due to pneumoconiosis.

Eligible survivors shall, upon request,

furnish such evidence as is available

with respect to the health of the miner

at the time of death, and the nature and

duration of the miner’s coal mine

employment.

(b) For the purpose of this section, a

miner will be considered to have been

‘‘partially disabled’’ if he or she had

reduced ability to engage in work as

defined in § 718.204(b).

(c) In order to rebut this presumption

the evidence must demonstrate that the

miner’s ability to perform work as

defined in § 718.204(b) was not reduced

at the time of his or her death or that

the miner did not have pneumoconiosis.

(d) None of the following items, by

itself, shall be sufficient to rebut the

presumption:

(1) Evidence that a deceased miner

was employed in a coal mine at the time

of death;

(2) Evidence pertaining to a deceased

miner’s level of earnings prior to death;

(3) A chest X-ray interpreted as

negative for the existence of

pneumoconiosis;

(4) A death certificate which makes

no mention of pneumoconiosis.

Appendix A to Part 718–Standards for

Administration and Interpretation of Chest

Roentgenograms (X-rays)

The following standards are established in

accordance with sections 402(f)(1)(D) and

413(b) of the Act. They were developed in

consultation with the National Institute for

Occupational Safety and Health. These

standards are promulgated for the guidance

of physicians and medical technicians to

insure that uniform procedures are used in

administering and interpreting X-rays and

that the best available medical evidence will

be submitted in connection with a claim for

black lung benefits. If it is established that

one or more standards have not been met, the

claims adjudicator may consider such fact in

determining the evidentiary weight to be

assigned to the physician’s report of an X-ray.

(1) Every chest roentgenogram shall be a

single postero-anterior projection at full

inspiration on a 14 by 17 inch film.

Additional chest films or views shall be

obtained if they are necessary for clarification

and classification. The film and cassette shall

be capable of being positioned both vertically

and horizontally so that the chest

roentgenogram will include both apices and

costophrenic angles. If a miner is too large to

permit the above requirements, then a

projection with minimum loss of

costophrenic angle shall be made.

(2) Miners shall be disrobed from the waist

up at the time the roentgenogram is given.

The facility shall provide a dressing area and,

for those miners who wish to use one, the

facility shall provide a clean gown. Facilities

shall be heated to a comfortable temperature.

(3) Roentgenograms shall be made only

with a diagnostic X-ray machine having a

rotating anode tube with a maximum of a 2

mm source (focal spot).

(4) Except as provided in paragraph (5),

roentgenograms shall be made with units

having generators which comply with the

following: (a) the generators of existing

roentgenographic units acquired by the

examining facility prior to July 27, 1973,

shall have a minimum rating of 200 mA at
3380 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

100 kVp; (b) generators of units acquired

subsequent to that date shall have a

minimum rating of 300 mA at 125 kVp.

Note: A generator with a rating of 150 kVp

is recommended.

(5) Roentgenograms made with batterypowered mobile or portable equipment shall

be made with units having a minimum rating

of 100 mA at 110 kVp at 500 Hz, or 200 mA

at 110 kVp at 60 Hz.

(6) Capacitor discharge, and field emission

units may be used.

(7) Roentgenograms shall be given only

with equipment having a beam-limiting

device which does not cause large unexposed

boundaries. The use of such a device shall be

discernible from an examination of the

roentgenogram.

(8) To insure high quality chest

roentgenograms:

(i) The maximum exposure time shall not

exceed 1/20 of a second except that with

single phase units with a rating less than 300

mA at 125 kVp and subjects with chest over

28 cm postero-anterior, the exposure may be

increased to not more than 1/10 of a second;

(ii) The source or focal spot to film

distance shall be at least 6 feet;

(iii) Only medium-speed film and mediumspeed intensifying screens shall be used;

(iv) Film-screen contact shall be

maintained and verified at 6-month or

shorter intervals;

(v) Intensifying screens shall be inspected

at least once a month and cleaned when

necessary by the method recommended by

the manufacturer;

(vi) All intensifying screens in a cassette

shall be of the same type and made by the

same manufacturer;

(vii) When using over 90 kV, a suitable grid

or other means of reducing scattered

radiation shall be used;

(viii) The geometry of the radiographic

system shall insure that the central axis (ray)

of the primary beam is perpendicular to the

plane of the film surface and impinges on the

center of the film.

(9) Radiographic processing:

(i) Either automatic or manual film

processing is acceptable. A constant timetemperature technique shall be meticulously

employed for manual processing.

(ii) If mineral or other impurities in the

processing water introduce difficulty in

obtaining a high-quality roentgenogram, a

suitable filter or purification system shall be

used.

(10) Before the miner is advised that the

examination is concluded, the roentgenogram

shall be processed and inspected and

accepted for quality by the physician, or if

the physician is not available, acceptance

may be made by the radiologic technologist.

In a case of a substandard roentgenogram,

another shall be made immediately.

(11) An electric power supply shall be used

which complies with the voltage, current,

and regulation specified by the manufacturer

of the machine.

(12) A densitometric test object may be

required on each roentgenogram for an

objective evaluation of film quality at the

discretion of the Department of Labor.

(13) Each roentgenogram made hereunder

shall be permanently and legibly marked

with the name and address of the facility at

which it is made, the miner’s DOL claim

number, the date of the roentgenogram, and

left and right side of film. No other

identifying markings shall be recorded on the

roentgenogram.

Appendix B to Part 718—Standards for

Administration and Interpretation of

Pulmonary Function Tests

Tables B1, B2, B3, B4, B5, B6

The following standards are established in

accordance with section 402(f)(1)(D) of the

Act. They were developed in consultation

with the National Institute for Occupational

Safety and Health (NIOSH). These standards

are promulgated for the guidance of

physicians and medical technicians to insure

that uniform procedures are used in

administering and interpreting ventilatory

function tests and that the best available

medical evidence will be submitted in

support of a claim for black lung benefits. If

it is established that one or more standards

have not been met, the claims adjudicator

may consider such fact in determining the

evidentiary weight to be given to the results

of the ventilatory function tests.

(1) Instruments to be used for the

administration of pulmonary function tests

shall be approved by NIOSH and shall

conform to the following criteria:

(i) The instrument shall be accurate within

+/¥50 ml or within +/¥3 percent of reading,

whichever is greater.

(ii) The instrument shall be capable of

measuring vital capacity from 0 to 7 liters

BTPS.

(iii) The instrument shall have a low

inertia and offer low resistance to airflow

such that the resistance to airflow at 12 liters

per second must be less than 1.5 cm H2O/

liter/sec.

(iv) The zero time point for the purpose of

timing the FEV1 shall be determined by

extrapolating the steepest portion of the

volume-time curve back to the maximal

inspiration volume or by an equivalent

method.

(v) Instruments incorporating

measurements of airflow to determine

volume shall conform to the same volume

accuracy stated in subparagraph (1)(i) of this

Appendix B when presented with flow rates

from at least 0 to 12 liters per second.

(vi) The instrument or user of the

instrument must have a means of correcting

volumes to body temperature saturated with

water vapor (BTPS) under conditions of

varying ambient spirometer temperatures and

barometric pressures.

(vii) The instrument used shall provide a

tracing of either flow versus volume or

volume versus time during the entire forced

expiration and volume versus time during

the MVV maneuver. A tracing is necessary to

determine whether the patient has performed

the test properly. The tracing must be of

sufficient size that hand measurements may

be made within the requirement of

subparagraph (1)(i) of this Appendix B. If a

paper record is made it must have a paper

speed of at least 2 cm/sec and a volume

sensitivity of at least 10.0 mm of chart per

liter of volume. The recorder tracing must

display the entire FVC maneuver at a

constant speed for at least 10 seconds after

the onset of exhalation. This constant speed

must be reached prior to the onset of

exhalation.

(viii) The instrument shall be capable of

accumulating volume for a minimum of 10

seconds after the onset of exhalation.

(ix) The forced expiratory volume in 1 sec

(FEV1) measurement shall comply with the

accuracy requirements stated in

subparagraph (1)(i) of this Appendix B. That

is, they shall be accurately measured to

within ± 50 ml or with ± 3 percent of reading,

whichever is greater.

(x) The instrument must be capable of

being calibrated in the field with respect to

the FEV1. This calibration of the FEV1 may

be done either directly or indirectly through

volume and time base measurements. The

volume calibration source shall provide a

volume displacement of at least 3 liters and

shall be accurate to within ± 30 ml.

(xi) For measuring maximum voluntary

ventilation (MVV) the instrument shall have

a response which is flat within ± 10 percent

up to 4 Hz at flow rates up to 12 liters per

second over the volume range. The time for

exhaled volume integration or recording shall

be no less than 12 sec. and no more than 15

sec. The indicated time shall be accurate to

within ± 3 percent.

A recording of the spirometer tracing is

required, and the volume sensitivity shall be

such that 10 mm or more deflection

corresponds to 1 liter volume.

(2) The administration of pulmonary

function tests shall conform to the following

criteria:

(i) Tests shall not be performed during or

soon after an acute respiratory illness.

(ii) For the FEV1 and FVC, use of a nose

clip is required. The procedures shall be

explained in simple terms to the patient who

shall be instructed to loosen any tight

clothing and stand in front of the apparatus.

The subject may sit, or stand, but care should

be taken on repeat testing that the same

position be used. Particular attention shall be

given to insure that the chin is slightly

elevated with the neck slightly extended. The

patient shall be instructed to make a full

inspiration from the spirometer, using a

normal breathing pattern and then blow into

the apparatus, without interruption, as hard,

fast, and completely as possible. At least

three forced expirations shall be carried out.

During the maneuvers, the patient shall be

observed for compliance with instructions.

The expirations shall be checked visually for

reproducibility from the flow-volume or

volume-time tracings. The effort shall be

judged unacceptable when the patient:

(A) Has not reached full inspiration

preceding the forced expiration; or

(B) Has not used maximal effort during the

entire forced expiration; or

(C) Has not continued the expiration for at

least 5 sec. or until an obvious plateau in the

volume-time curve has occurred; or

(D) Has coughed or closed his glottis; or

(E) Has an obstructed mouthpiece or a leak

around the mouthpiece (obstruction due to

tongue being placed in front of mouthpiece,

false teeth falling in front of mouthpiece,

etc.); or

(F) Has an unsatisfactory start of

expiration, one characterized by excessive
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3381

hesitation (or false starts), and therefore not

allowing back extrapolation of time 0

(extrapolated volume on the volume-time

tracing must be less than 10 percent of the

FVC); or

(G) Has an excessive variability between

the three acceptable curves. The variation

between the two largest FEV1’s of the three

acceptable tracings should not exceed 5

percent of the largest FEV1 or 100 ml,

whichever is greater.

(iii) For the MVV, the subject shall be

instructed before beginning the test that he or

she will be asked to breathe as deeply and

as rapidly as possible for approximately 15

seconds.

The test shall be performed with the

subject in the standing position, if possible.

Care shall be taken on repeat testing that the

same position be used. The subject shall

breathe normally into the mouthpiece of the

apparatus for 10 to 15 seconds to become

accustomed to the system. The subject shall

then be instructed to breathe as deeply and

as rapidly as possible, and shall be

continually encouraged during the remainder

of the maneuver. Subject shall continue the

maneuver for 15 seconds. At least 5 minutes

of rest shall be allowed between maneuvers.

At least three MVV’s shall be carried out.

(But see § 718.103(b).) During the maneuvers

the patient shall be observed for compliance

with instructions. The effort shall be judged

unacceptable when the patient:

(A) Has not maintained consistent effort for

at least 12 to 15 seconds; or

(B) Has coughed or closed his glottis; or

(C) Has an obstructed mouthpiece or a leak

around the mouthpiece (obstruction due to

tongue being placed in front of mouthpiece,

false teeth falling in front of mouthpiece,

etc.); or

(D) Has an excessive variability between

the three acceptable curves. The variation

between the two largest MVV’s of the three

satisfactory tracings shall not exceed 10

percent.

(iv) A calibration check shall be performed

on the instrument each day before use, using

a volume source of at least three liters,

accurate to within ±1 percent of full scale.

The room air in the syringe is introduced into

the spirometer once with a flow rate of

approximately 0.5 liters per second (six

seconds emptying time with a 3-liter syringe)

and once with a higher flow rate of

approximately 3.0 liters per second (one

second emptying time with a 3-liter syringe).

The volume measured by the spirometer

shall be between 2.90 and 3.10 liters for both

trials. Accuracy of the time measurement

used in determining the FEV1 shall be

checked using the manufacturer’s stated

procedure and shall be within ±3 percent of

actual. The procedure described herein shall

be performed as well as any other procedures

suggested by the manufacturer of the

spirometer being used.

(v)(A) The first step in evaluating a

spirogram for the FEV1 shall be to determine

whether or not the patient has performed the

test properly or as described in (2)(ii) above.

From the three satisfactory tracings, the

forced expiratory volume in one second

(FEV1) shall be measured and recorded. The

largest observed FEV1 shall be used in the

analysis, corrected to BTPS.

(B) Only MVV maneuvers which

demonstrate consistent effort for at least 12

seconds shall be considered acceptable. The

largest accumulated volume for a 12 second

period corrected to BTPS and multiplied by

five is to be reported as the MVV.

* * * * *

Appendix C to Part 718—Blood-Gas Tables

The following tables set forth the values to

be applied in determining whether total

disability may be established in accordance

with §§ 718.204(b)(2)(ii) and 718.305(a) and

(c). The values contained in the tables are

indicative of impairment only. They do not

establish a degree of disability except as

provided in §§ 718.204(b)(2)(ii) and 718.305

(a) and (c) of this subchapter, nor do they

establish standards for determining normal

alveolar gas exchange values for any

particular individual. Tests shall not be

performed during or soon after an acute

respiratory or cardiac illness.

A miner who meets the following medical

specifications shall be found to be totally

disabled, in the absence of rebutting

evidence, if the values specified in one of the

following tables are met:

(1) For arterial blood-gas studies performed

at test sites up to 2,999 feet above sea level:

Arterial pCO2 (mm Hg)

Arterial pO2

equal to or

less than

(mm Hg)

25 or below ............................... 75

26 .............................................. 74

27 .............................................. 73

28 .............................................. 72

29 .............................................. 71

30 .............................................. 70

31 .............................................. 69

32 .............................................. 68

33 .............................................. 67

34 .............................................. 66

35 .............................................. 65

36 .............................................. 64

37 .............................................. 63

38 .............................................. 62

39 .............................................. 61

40–49 ........................................ 60

Above 50 ................................... (1)

(1) Any value.

(2) For arterial blood-gas studies performed

at test sites 3,000 to 5,999 feet above sea

level:

Arterial pCO2 (mm Hg)

Arterial pO2

equal to or

less than

(mm Hg)

25 or below ............................... 70

26 .............................................. 69

27 .............................................. 68

28 .............................................. 67

29 .............................................. 66

30 .............................................. 65

31 .............................................. 64

32 .............................................. 63

33 .............................................. 62

34 .............................................. 61

35 .............................................. 60

36 .............................................. 59

37 .............................................. 58

Arterial pCO2 (mm Hg)

Arterial pO2

equal to or

less than

(mm Hg)

38 .............................................. 57

39 .............................................. 56

40–49 ........................................ 55

Above 50 ................................... (2)

(2) Any value.

(3) For arterial blood-gas studies performed

at test sites 6,000 feet or more above sea

level:

Arterial pCO2 (mm Hg)

Arterial pO2

equal to or

less than

(mm Hg)

25 or below ............................... 65

26 .............................................. 64

27 .............................................. 63

28 .............................................. 62

29 .............................................. 61

30 .............................................. 60

31 .............................................. 59

32 .............................................. 58

33 .............................................. 57

34 .............................................. 56

35 .............................................. 55

36 .............................................. 54

37 .............................................. 53

38 .............................................. 52

39 .............................................. 51

40–49 ........................................ 50

Above 50 ................................... (3)

(3) Any value.

3. Part 722 is proposed to be revised as

follows.

PART 722—CRITERIA FOR

DETERMINING WHETHER STATE

WORKERS’ COMPENSATION LAWS

PROVIDE ADEQUATE COVERAGE

FOR PNEUMOCONIOSIS AND LISTING

OF APPROVED STATE LAWS

Sec.

722.1 Purpose.

722.2 Definitions.

722.3 General criteria; inclusion in and

removal from the Secretary’s list.

722.4 The Secretary’s list.

Authority: 5 U.S.C. 301, Reorganization

Plan No. 6 of 1950, 15 FR 3174, 30 U.S.C. 901

et seq., 921, 932, 936; 33 U.S.C. 901 et seq.,

Secretary’s Order 7–87, 52 FR 48466,

Employment Standards Order No. 90–02.

§ 722.1 Purpose.

Section 421 of the Black Lung

Benefits Act provides that a claim for

benefits based on the total disability or

death of a coal miner due to

pneumoconiosis must be filed under a

State workers’ compensation law where

such law provides adequate coverage for

pneumoconiosis. A State workers’

compensation law may be deemed to

provide adequate coverage only when it

is included on a list of such laws

maintained by the Secretary. The

purpose of this part is to set forth the
3382 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

procedures and criteria for inclusion on

that list, and to provide that list.

§ 722.2 Definitions.

(a) The definitions and use of terms

contained in subpart A of part 725 of

this title shall be applicable to this part.

(b) For purposes of this part, the

following definitions apply:

(1) State agency means, with respect

to any State, the agency, department or

officer designated by the workers’

compensation law of the State to

administer such law. In any case in

which more than one agency

participates in the administration of a

State workers’ compensation law, the

Governor of the State may designate

which of the agencies shall be the State

agency for purposes of this part.

(2) The Secretary’s list means the list

published by the Secretary of Labor in

the Federal Register (see § 722.4)

containing the names of those States

which have in effect a workers’

compensation law which provides

adequate coverage for death or total

disability due to pneumoconiosis.

§ 722.3 General criteria; inclusion in and

removal from the Secretary’s list.

(a) The Governor of any State or any

duly authorized State agency may, at

any time, request that the Secretary

include such State’s workers’

compensation law on his list of those

State workers’ compensation laws

providing adequate coverage for total

disability or death due to

pneumoconiosis. Each such request

shall include a copy of the State

workers’ compensation law and any

other pertinent State laws, a copy of any

regulations, either proposed or

promulgated, implementing such laws;

and a copy of any administrative or

court decision interpreting such laws or

regulations, or, if such decisions are

published in a readily available report,

a citation to such decision.

(b) Upon receipt of a request that a

State be included on the Secretary’s list,

the Secretary shall include the State on

the list if he finds that the State’s

workers’ compensation law guarantees

the payment of monthly and medical

benefits to all persons who would be

entitled to such benefits under the Black

Lung Benefits Act at the time of the

request, at a rate no less than that

provided by the Black Lung Benefits

Act. The criteria used by the Secretary

in making such determination shall

include, but shall not be limited to, the

criteria set forth in section 421(b)(2) of

the Act.

(c) The Secretary may require each

State included on the list to submit

reports detailing the extent to which the

State’s workers’ compensation laws, as

reflected by statute, regulation, or

administrative or court decision,

continues to meet the requirements of

paragraph (b) of this section. If the

Secretary concludes that the State’s

workers’ compensation law does not

provide adequate coverage at any time,

either because of changes to the State

workers’ compensation law or the Black

Lung Benefits Act, he shall remove the

State from the Secretary’s list after

providing the State with notice of such

removal and an opportunity to be heard.

§ 722.4 The Secretary’s list.

(a) The Secretary has determined that

publication of the Secretary’s list in the

Code of Federal Regulations is

appropriate. Accordingly, in addition to

its publication in the Federal Register

as required by section 421 of the Black

Lung Benefits Act, the list shall also

appear in paragraph (b) of this section.

(b) Upon review of all requests filed

with the Secretary under section 421 of

the Black Lung Benefits Act and this

part, and examination of the workers’

compensation laws of the States making

such requests, the Secretary has

determined that the workers’

compensation law of each of the

following listed States, for the period

from the date shown in the list until

such date as the Secretary may make a

contrary determination, provides

adequate coverage for pneumoconiosis.

State Period commencing

None............................................................

4. Part 725 is proposed to be revised

as follows:

PART 725—CLAIMS FOR BENEFITS

UNDER PART C OF TITLE IV OF THE

FEDERAL MINE SAFETY AND HEALTH

ACT, AS AMENDED

Subpart A—General

Sec.

725.1 Statutory provisions.

725.2 Purpose and applicability of this part.

725.3 Contents of this part.

725.4 Applicability of other parts in this

title.

725.101 Definitions and use of terms.

725.102 Disclosure of program information.

725.103 Burden of proof.

Subpart B—Persons Entitled to Benefits,

Conditions, and Duration of Entitlement

725.201 Who is entitled to benefits;

contents of this subpart.

Conditions and Duration of Entitlement:

Miner

725.202 Miner defined; conditions of

entitlement, miner.

725.203 Duration and cessation of

entitlement, miner.

Conditions and Duration of Entitlement:

Miner’s Dependents (Augmented Benefits)

725.204 Determination of relationship;

spouse.

725.205 Determination of dependency;

spouse.

725.206 Determination of relationship;

divorced spouse.

725.207 Determination of dependency;

divorced spouse.

725.208 Determination of relationship;

child.

725.209 Determination of dependency;

child.

725.210 Duration of augmented benefits.

725.211 Time of determination of

relationship and dependency of spouse

or child for purposes of augmentation of

benefits.

Conditions and Duration of Entitlement:

Miner’s Survivors

725.212 Conditions of entitlement;

surviving spouse or surviving divorced

spouse.

725.213 Duration of entitlement; surviving

spouse or surviving divorced spouse.

725.214 Determination of relationship;

surviving spouse.

725.215 Determination of dependency;

surviving spouse.

725.216 Determination of relationship;

surviving divorced spouse.

725.217 Determination of dependency;

surviving divorced spouse.

725.218 Conditions of entitlement; child.

725.219 Duration of entitlement; child.

725.220 Determination of relationship;

child.

725.221 Determination of dependency;

child.

725.222 Conditions of entitlement; parent,

brother or sister.

725.223 Duration of entitlement; parent,

brother or sister.

725.224 Determination of relationship;

parent, brother or sister.

725.225 Determination of dependency;

parent, brother or sister.

725.226 ‘‘Good cause’’ for delayed filing of

proof of support.

725.227 Time of determination of

relationship and dependency of

survivors.

725.228 Effect of conviction of felonious

and intentional homicide on entitlement

to benefits.

Terms Used in This Subpart

725.229 Intestate personal property.

725.230 Legal impediment.

725.231 Domicile.

725.232 Member of the same household—

‘‘living with,’’ ‘‘living in the same

household,’’ and ‘‘living in the miner’s

household,’’ defined.

725.233 Support and contributions.

Subpart C—Filing of Claims

725.301 Who may file a claim

725.302 Evidence of authority to file a

claim on behalf of another.

725.303 Date and place of filing of claims.

725.304 Forms and initial processing.

725.305 When a written statement is

considered a claim.
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3383

725.306 Withdrawal of a claim.

725.307 Cancellation of a request for

withdrawal.

725.308 Time limits for filing claims.

725.309 Additional claims; effect of a prior

denial of benefits.

725.310 Modification of awards and

denials.

725.311 Communications with respect to

claims; time computations.

Subpart D—Adjudication Officers; Parties

and Representatives

725.350 Who are the adjudication officers.

725.351 Powers of adjudication officers.

725.352 Disqualification of adjudication

officer.

725.360 Parties to proceedings

725.361 Party amicus curiae.

725.362 Representation of parties.

725.363 Qualification of representative.

725.364 Authority of representative.

725.365 Approval of representative’s fees;

lien against benefits.

725.366 Fees for representatives.

725.367 Payment of a claimant’s attorney’s

fee by responsible operator or fund.

Subpart E—Adjudication of Claims by the

District Director

725.401 Claims development—general.

725.402 Approved State workers’

compensation law.

725.403 Requirement to file under State

workers’ compensation law—section 415

claims.

725.404 Development of evidence—general.

725.405 Development of medical evidence;

scheduling of medical examinations and

tests.

725.406 Medical examinations and tests.

725.407 Identification and notification of

responsible operator.

725.408 Operator’s response to notification.

725.409 Denial of a claim by reason of

abandonment.

725.410 Initial findings by the district

director.

725.411 Initial finding—eligibility.

725.412 Initial finding—liability.

725.413 Initial adjudication by the district

director.

725.414 Development of evidence.

725.415 Action by the district director after

development of operator’s evidence.

725.416 Conferences.

725.417 Action at the conclusion of

conference.

725.418 Proposed decision and order.

725.419 Response to proposed decision and

order.

725.420 Initial determinations.

725.421 Referral of a claim to the Office of

Administrative Law Judges.

725.422 Legal Assistance.

725.423 Extensions of time.

Subpart F—Hearings

725.450 Right to a hearing.

725.451 Request for hearing.

725.452 Type of hearing; parties.

725.453 Notice of hearing.

725.454 Time and place of hearing; transfer

of cases.

725.455 Hearing procedures; generally.

725.456 Introduction of documentary

evidence.

725.457 Witnesses.

725.458 Depositions; interrogatories.

725.459 Witness fees.

725.460 Consolidated hearings.

725.461 Waiver of right to appear and

present evidence.

725.462 Withdrawal of controversion of

issues set for formal hearing; effect.

725.463 Issues to be resolved at hearing;

new issues.

725.464 Record of hearing.

725.465 Dismissals for cause.

725.466 Order of dismissal.

725.475 Termination of hearings.

725.476 Issuance of decision and order.

725.477 Form and contents of decision and

order.

725.478 Filing and service of decision and

order.

725.479 Finality of decisions and orders.

725.480 Modification of decisions and

orders.

725.481 Right to appeal to the Benefits

Review Board.

725.482 Judicial review.

725.483 Costs in proceedings brought

without reasonable grounds.

Subpart G—Responsible Coal Mine

Operators

725.490 Statutory provisions and scope.

725.491 Operator defined.

725.492 Successor operator defined.

725.493 Employment relationship defined.

725.494 Potentially liable operators.

725.494 Criteria for determining a

responsible operator.

725.496 Special claims transferred to the

Trust Fund.

725.497 Procedures in special claims

transferred to the Trust Fund.

Subpart H—Payment of Benefits

General Provisions

725.501 Payment provisions generally.

725.502 When benefit payments are due;

manner of payment.

725.503 Date from which benefits are

payable.

725.504 Payments to a claimant employed

as a miner.

725.505 Payees.

725.506 Payment on behalf of another;

‘‘legal guardian’’ defined.

725.507 Guardian for minor or

incompetent.

725.510 Representative payee.

725.511 Use and benefit defined.

725.512 Support of legally dependent

spouse, child, or parent.

725.513 Accountability; transfer.

725.514 Certification to dependent of

augmentation portion of benefit.

725.515 Assignment and exemption from

claims of creditors.

725.520 Computation of benefits.

725.521 Commutation of payments; lump

sum awards.

725.522 Payments prior to final

adjudication.

725.530 Operator payments; generally.

725.531 Receipt for payment.

Increases and Reductions of Benefits

725.532 Suspension, reduction, or

termination of payments.

725.533 Modification of benefit amounts;

general.

725.534 Reduction of State benefits.

725.535 Reductions; receipt of State or

Federal benefit.

725.536 Reductions; excess earnings.

725.537 Reductions; retroactive effect of an

additional claim for benefits.

725.538 Reductions; effect of augmentation

of benefits based on subsequent

qualification of individual.

725.539 More than one reduction event.

Overpayments; Underpayments

725.540 Overpayments.

725.541 Notice of waiver of adjustment or

recovery of overpayment.

725.542 When waiver of adjustment or

recovery may be applied.

725.543 Standards for waiver of adjustment

or recovery.

725.544 Collection and compromise of

claims for overpayment.

725.545 Underpayments.

725.546 Relation to provisions for

reductions or increases.

725.547 Applicability of overpayment and

underpayment provisions to operator or

carrier.

Subpart I—Enforcement of Liability;

Reports

725.601 Enforcement generally.

725.602 Reimbursement of the fund.

725.603 Payments by the fund on behalf of

an operator; liens.

725.604 Enforcement of final awards.

725.605 Defaults.

725.606 Security for the payment of

benefits.

725.607 Payments in addition to

compensation.

725.608 Interest.

725.609 Enforcement against other persons.

725.620 Failure to secure benefits; other

penalties.

725.621 Reports.

Subpart J—Medical Benefits and Vocational

Rehabilitation

725.701 Availability of medical benefits.

725.702 Claims for medical benefits only

under section 11 of the Reform Act.

725.703 Physician defined.

725.704 Notification of right to medical

benefits; authorization of treatment.

725.705 Arrangements for medical care.

725.706 Authorization to provide medical

services.

725.707 Reports of physicians and

supervision of medical care.

725.708 Disputes concerning medical

benefits.

725.710 Objective of vocational

rehabilitation.

725.711 Requests for referral to vocational

rehabilitation assistance.

Authority: 5 U.S.C. 301, Reorganization

Plan No. 6 of 1950, 15 FR 3174, 30 U.S.C. 901

et seq., 921, 932, 936; 33 U.S.C. 901 et seq.,

42 U.S.C. 405, Secretary’s Order 7–87, 52 FR

48466, Employment Standards Order No. 90–

02.
3384 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

Subpart A—General

§ 725.1 Statutory provisions.

(a) General. Title IV of the Federal

Mine Safety and Health Act of 1977, as

amended by the Black Lung Benefits

Reform Act of 1977, the Black Lung

Benefits Revenue Act of 1977, the Black

Lung Benefits Revenue Act of 1981 and

the Black Lung Benefits Amendments of

1981, provides for the payment of

benefits to a coal miner who is totally

disabled due to pneumoconiosis (black

lung disease) and to certain survivors of

a miner who dies due to

pneumoconiosis. For claims filed prior

to January 1, 1982, certain survivors

could receive benefits if the miner was

totally (or for claims filed prior to June

30, 1982, in accordance with section

411(c)(5) of the Act, partially) disabled

due to pneumoconiosis, or if the miner

died due to pneumoconiosis.

(b) Part B. Part B of title IV of the Act

provided that all claims filed between

December 30, 1969, and June 30, 1973,

are to be filed with, processed, and paid

by the Secretary of Health, Education,

and Welfare through the Social Security

Administration; claims filed by the

survivor of a miner before January 1,

1974, or within 6 months of the miner’s

death if death occurred before January 1,

1974, and claims filed by the survivor

of a miner who was receiving benefits

under part B of title IV of the Act at the

time of death, if filed within 6 months

of the miner’s death, are also

adjudicated and paid by the Social

Security Administration.

(c) Section 415. Claims filed by a

miner between July 1 and December 31,

1973, are adjudicated and paid under

section 415. Section 415 provides that a

claim filed between the appropriate

dates shall be filed with and adjudicated

by the Secretary of Labor under certain

incorporated provisions of the

Longshoremen’s and Harbor Workers’

Compensation Act (33 U.S.C. 901 et

seq.). A claim approved under section

415 is paid under part B of title IV of

the Act for periods of eligibility

occurring between July 1 and December

31, 1973, by the Secretary of Labor and

for periods of eligibility thereafter, is

paid by a coal mine operator which is

determined liable for the claim or the

Black Lung Disability Trust Fund if no

operator is identified or if the miner’s

last coal mine employment terminated

prior to January 1, 1970. An operator

which may be found liable for a section

415 claim is notified of the claim and

allowed to participate fully in the

adjudication of such claim. A claim

filed under section 415 is for all

purposes considered as if it were a part

C claim (see paragraph (d) of this

section) and the provisions of part C of

title IV of the Act are fully applicable to

a section 415 claim except as is

otherwise provided in section 415.

(d) Part C. Claims filed by a miner or

survivor on or after January 1, 1974, are

filed, adjudicated, and paid under the

provisions of part C of title IV of the

Act. Part C requires that a claim filed on

or after January 1, 1974, shall be filed

under an applicable approved State

workers’ compensation law, or if no

such law has been approved by the

Secretary of Labor, the claim may be

filed with the Secretary of Labor under

section 422 of the Act. Claims filed with

the Secretary of Labor under part C are

processed and adjudicated by the

Secretary and paid by a coal mine

operator. If the miner’s last coal mine

employment terminated before January

1, 1970, or if no responsible operator

can be identified, benefits are paid by

the Black Lung Disability Trust Fund.

Claims adjudicated under part C are

subject to certain incorporated

provisions of the Longshoremen’s and

Harbor Workers’ Compensation Act.

(e) Section 435. Section 435 of the Act

affords each person who filed a claim

for benefits under part B, section 415, or

part C, and whose claim had been

denied or was still pending as of March

1, 1978, the effective date of the Black

Lung Benefits Reform Act of 1977, the

right to have his or her claim reviewed

on the basis of the 1977 amendments to

the Act, and under certain

circumstances to submit new evidence

in support of the claim.

(f) Changes made by the Black Lung

Benefits Reform Act of 1977. In addition

to those changes which are reflected in

paragraphs (a) through (e) of this

section, the Black Lung Benefits Reform

Act of 1977 contains a number of

significant amendments to the Act’s

standards for determining eligibility for

benefits. Among these are:

(1) A provision which clarifies the

definition of ‘‘pneumoconiosis’’ to

include any ‘‘chronic dust disease of the

lung and its sequelae, including

respiratory and pulmonary

impairments, arising out of coal mine

employment’’;

(2) A provision which defines

‘‘miner’’ to include any person who

works or has worked in or around a coal

mine or coal preparation facility, and in

coal mine construction or coal

transportation under certain

circumstances;

(3) A provision which limits the

denial of a claim solely on the basis of

employment in a coal mine;

(4) A provision which authorizes the

Secretary of Labor to establish standards

and develop criteria for determining

total disability or death due to

pneumoconiosis with respect to a part C

claim;

(5) A new presumption which

requires the payment of benefits to the

survivors of a miner who was employed

for 25 or more years in the mines under

certain conditions;

(6) Provisions relating to the treatment

to be accorded a survivor’s affidavit,

certain X-ray interpretations, and

certain autopsy reports in the

development of a claim; and

(7) Other clarifying, procedural, and

technical amendments.

(g) Changes made by the Black Lung

Benefits Revenue Act of 1977. The Black

Lung Benefits Revenue Act of 1977

established the Black Lung Disability

Trust Fund which is financed by a

specified tax imposed upon each ton of

coal (except lignite) produced and sold

or used in the United States after March

31, 1978. The Secretary of the Treasury

is the managing trustee of the fund and

benefits are paid from the fund upon the

direction of the Secretary of Labor. The

fund was made liable for the payment

of all claims approved under section

415, part C and section 435 of the Act

for all periods of eligibility occurring on

or after January 1, 1974, with respect to

claims where the miner’s last coal mine

employment terminated before January

1, 1970, or where individual liability

can not be assessed against a coal mine

operator due to bankruptcy, insolvency,

or the like. The fund was also

authorized to pay certain claims which

a responsible operator has refused to

pay within a reasonable time, and to

seek reimbursement from such operator.

The purpose of the fund and the Black

Lung Benefits Revenue Act of 1977 was

to insure that coal mine operators, or the

coal industry, will fully bear the cost of

black lung disease for the present time

and in the future. The Black Lung

Benefits Revenue Act of 1977 also

contained other provisions relating to

the fund and authorized a coal mine

operator to establish its own trust fund

for the payment of certain claims.

(h) Changes made by the Black Lung

Benefits Amendments of 1981. In

addition to the change reflected in

paragraph (a) of this section, the Black

Lung Benefits Amendments of 1981

made a number of significant changes in

the Act’s standards for determining

eligibility for benefits and concerning

the payment of such benefits. The

following changes are all applicable to

claims filed on or after January 1, 1982:

(1) The Secretary of Labor may re-read

any X-ray submitted in support of a

claim and may rely upon a second

opinion concerning such an X-ray as a
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means of auditing the validity of the

claim;

(2) The rebuttable presumption that

the death of a miner with ten or more

years employment in the coal mines,

who died of a respirable disease, was

due to pneumoconiosis is no longer

applicable;

(3) The rebuttable presumption that

the total disability of a miner with

fifteen or more years employment in the

coal mines, who has demonstrated a

totally disabling respiratory or

pulmonary impairment, is due to

pneumoconiosis is no longer applicable;

(4) In the case of deceased miners,

where no medical or other relevant

evidence is available, only affidavits

from persons not eligible to receive

benefits as a result of the adjudication

of the claim will be considered

sufficient to establish entitlement to

benefits;

(5) Unless the miner was found

entitled to benefits as a result of a claim

filed prior to January 1, 1982, benefits

are payable on survivors’ claims filed on

and after January 1, 1982, only when the

miner’s death was due to

pneumoconiosis;

(6) Benefits payable under this part

are subject to an offset on account of

excess earnings by the miner; and

(7) Other technical amendments.

(i) Changes made by the Black Lung

Benefits Revenue Act of 1981. The Black

Lung Benefits Revenue Act of 1981

temporarily doubles the amount of the

tax upon coal until the fund shall have

repaid all advances received from the

United States Treasury and the interest

on all such advances. The fund is also

made liable for the payment of certain

claims previously denied under the

1972 version of the Act and

subsequently approved under section

435 and for the reimbursement of

operators and insurers for benefits

previously paid by them on such claims.

With respect to claims filed on or after

January 1, 1982, the fund’s

authorization for the payment of interim

benefits is limited to the payment of

prospective benefits only. These

changes also define the rates of interest

to be paid to and by the fund.

(j) Longshoremen’s Act provisions.

The adjudication of claims filed under

sections 415, 422 and 435 of the Act is

governed by various procedural and

other provisions contained in the

Longshoremen’s and Harbor Workers’

Compensation Act (LHWCA), as

amended from time to time, which are

incorporated within the Act by sections

415 and 422. The incorporated LHWCA

provisions are applicable under the Act

except as is otherwise provided by the

Act or as provided by regulations of the

Secretary. Although occupational

disease benefits are also payable under

the LHWCA, the primary focus of the

procedures set forth in that Act is upon

a time definite of traumatic injury or

death. Because of this and other

significant differences between a black

lung and longshore claim, it is

determined, in accordance with the

authority set forth in section 422 of the

Act, that certain of the incorporated

procedures prescribed by the LHWCA

must be altered to fit the circumstances

ordinarily confronted in the

adjudication of a black lung claim. The

changes made are based upon the

Department’s experience in processing

black lung claims since July 1, 1973,

and all such changes are specified in

this part or part 727 of this subchapter

(see § 725.4(d)). No other departure from

the incorporated provisions of the

LHWCA is intended.

(k) Social Security Act provisions.

Section 402 of the Act incorporates

certain definitional provisions from the

Social Security Act, 42 U.S.C. 301 et

seq. Section 430 provides that the 1972,

1977 and 1981 amendments to part B of

the Act shall also apply to part C ‘‘to the

extent appropriate.’’ Sections 412 and

413 incorporate various provisions of

the Social Security Act into part B of the

Act. To the extent appropriate, these

provisions also apply to part C. In

certain cases, the Department has varied

the terms of the Social Security Act

provisions to accommodate the unique

needs of the black lung benefits

program. Parts of the Longshore and

Harbor Workers’ Compensation Act are

also incorporated into part C. Where the

incorporated provisions of the two acts

are inconsistent, the Department has

exercised its broad regulatory powers to

choose the extent to which

incorporation is appropriate.

§ 725.2 Purpose and applicability of this

part.

(a) It is the purpose of this part to set

forth the procedures to be followed and

standards to be applied in the filing,

processing, adjudication, and payment

of claims filed under part C of title IV

of the Act.

(b) This part is applicable to all claims

filed under part C of title IV of the Act

on or after August 18, 1978 and shall

also be applicable to claims that were

pending on August 18, 1978.

(c) The provisions of this part reflect

revisions that became effective on [the

effective date of the final rule]. This part

is applicable to all claims filed, and all

benefits payments made, after [the

effective date of the final rule]. With the

exception of the following sections, this

part shall also be applicable to the

adjudication of claims that were

pending on [the effective date of the

final rule]: §§ 725.309, 725.310, 725.360,

725.406, 725.407, 725.408, 725.410,

725.411, 725.412, 725.413, 725.414,

725.415, 725.417, 725.418, 725.423,

725.454, 725.456, 725.457, 725.459,

725.491, 725.492, 725.493, 725.494,

725.495, 725.547. The version of those

sections set forth in 20 CFR, parts 500

to end, edition revised as of April 1,

1996, are applicable to the adjudications

of claims that were pending on [the

effective date of the final rule]. For

purposes of construing the provisions of

this section, a claim shall be considered

pending on [the effective date of the

final rule] if it was not finally denied

more than one year prior to that date.

§ 725.3 Contents of this part.

(a) This subpart describes the

statutory provisions which relate to

claims considered under this part, the

purpose and scope of this part,

definitions and usages of terms

applicable to this part, and matters

relating to the availability of

information collected by the Department

of Labor in connection with the

processing of claims.

(b) Subpart B contains criteria for

determining who may be found entitled

to benefits under this part and other

provisions relating to the conditions and

duration of eligibility of a particular

individual.

(c) Subpart C describes the procedures

to be followed and action to be taken in

connection with the filing of a claim

under this part.

(d) Subpart D sets forth the duties and

powers of the persons designated by the

Secretary of Labor to adjudicate claims

and provisions relating to the rights of

parties and representatives of parties.

(e) Subpart E contains the procedures

for developing evidence and

adjudicating entitlement and liability

issues by the district director.

(f) Subpart F describes the procedures

to be followed if a hearing before the

Office of Administrative Law Judges is

required.

(g) Subpart G contains provisions

governing the identification of a coal

mine operator which may be liable for

the payment of a claim.

(h) Subpart H contains provisions

governing the payment of benefits with

respect to an approved claim.

(i) Subpart I describes the statutory

mechanisms provided for the

enforcement of a coal mine operator’s

liability, sets forth the penalties which

may be applied in the case of a

defaulting coal mine operator, and

describes the obligation of coal
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operators and their insurance carriers to

file certain reports.

(j) Subpart J describes the right of

certain beneficiaries to receive medical

treatment benefits and vocational

rehabilitation under the Act.

§ 725.4 Applicability of other parts in this

title.

(a) Part 718. Part 718 of this

subchapter, which contains the criteria

and standards to be applied in

determining whether a miner is or was

totally disabled due to pneumoconiosis,

or whether a miner died due to

pneumoconiosis, shall be applicable to

the determination of claims under this

part. Claims filed after March 31, 1980,

are subject to part 718 as promulgated

by the Secretary in accordance with

section 402(f)(1) of the Act on February

29, 1980 (see § 725.2(c)). The criteria

contained in subpart C of part 727 of

this subchapter are applicable in

determining claims filed prior to April

1, 1980, under this part, and such

criteria shall be applicable at all times

with respect to claims filed under this

part and under section 11 of the Black

Lung Benefits Reform Act of 1977.

(b) Parts 715, 717, and 720. Pertinent

and significant provisions of Parts 715,

717, and 720 of this subchapter

(formerly contained in 20 CFR, parts

500 to end, edition revised as of April

1, 1978), which established the

procedures for the filing, processing,

and payment of claims filed under

section 415 of the Act, are included

within this part as appropriate.

(c) Part 726. Part 726 of this

subchapter, which sets forth the

obligations imposed upon a coal

operator to insure or self-insure its

liability for the payment of benefits to

certain eligible claimants, is applicable

to this part as appropriate.

(d) Part 727. Part 727 of this

subchapter, which governs the review,

adjudication and payment of pending

and denied claims under section 435 of

the Act, is applicable with respect to

such claims. The criteria contained in

subpart C of part 727 for determining a

claimant’s eligibility for benefits are

applicable under this part with respect

to all claims filed before April 1, 1980,

and to all claims filed under this part

and under section 11 of the Black Lung

Benefits Reform Act of 1977. Because

the part 727 regulations affect an

increasingly smaller number of claims,

however, the Department has

discontinued publication of the criteria

in the Code of Federal Regulations. The

part 727 criteria may be found at 43 FR

36818, Aug. 18, 1978 or 20 CFR, parts

500 to end, edition revised as of April

1, 1996.

(e) Part 410. Part 410 of this title,

which sets forth provisions relating to a

claim for black lung benefits under part

B of title IV of the Act, is inapplicable

to this part except as is provided in this

part, or in part 718 of this subchapter.

§ 725.101 Definitions and use of terms.

(a) Definitions. For purposes of this

subchapter, except where the content

clearly indicates otherwise, the

following definitions apply:

(1) The Act means the Federal Coal

Mine Health and Safety Act, Public Law

91–173, 83 Stat. 742, 30 U.S.C. 801–960,

as amended by the Black Lung Benefits

Act of 1972, the Mine Safety and Health

Act of 1977, the Black Lung Benefits

Reform Act of 1977, the Black Lung

Benefits Revenue Act of 1977, the Black

Lung Benefits Revenue Act of 1981, and

the Black Lung Benefits Amendments of

1981.

(2) The Longshoremen’s Act or

LHWCA means the Longshoremen’s and

Harbor Workers’ Compensation Act of

March 4, 1927, c. 509, 44 Stat. 1424, 33

U.S.C. 901–950, as amended from time

to time.

(3) The Social Security Act means the

Social Security Act, Act of August 14,

1935, c. 531, 49 Stat. 620, 42 U.S.C.

301–431, as amended from time to time.

(4) Administrative law judge means a

person qualified under 5 U.S.C. 3105 to

conduct hearings and adjudicate claims

for benefits filed pursuant to section 415

and part C of the Act. Until March 1,

1979, it shall also mean an individual

appointed to conduct such hearings and

adjudicate such claims under Public

Law 94–504.

(5) Beneficiary means a miner or any

surviving spouse, divorced spouse,

child, parent, brother or sister, who is

entitled to benefits under either section

415 or part C of title IV of the Act.

(6) Benefits means all money or other

benefits paid or payable under section

415 or part C of title IV of the Act on

account of disability or death due to

pneumoconiosis. The term also includes

any expenses related to the medical

examination and testing authorized by

the district director pursuant to

§ 725.406.

(7) Benefits Review Board or Board

means the Benefits Review Board, U.S.

Department of Labor, an appellate

tribunal appointed by the Secretary of

Labor pursuant to the provisions of

section 21(b)(1) of the LHWCA. See

parts 801 and 802 of this title.

(8) Black Lung Disability Trust Fund

or the fund means the Black Lung

Disability Trust Fund established by the

Black Lung Benefits Revenue Act of

1977, as amended by the Black Lung

Benefits Revenue Act of 1981, for the

payment of certain claims adjudicated

under this part (see subpart G of this

part).

(9) Chief Administrative Law Judge

means the Chief Administrative Law

Judge of the Office of Administrative

Law Judges, U.S. Department of Labor,

800 K Street, NW., suite 400,

Washington, DC 20001–8002.

(10) Claim means a written assertion

of entitlement to benefits under section

415 or part C of title IV of the Act,

submitted in a form and manner

authorized by the provisions of this

subchapter.

(11) Claimant means an individual

who files a claim for benefits under this

part.

(12) Coal mine means an area of land

and all structures, facilities, machinery,

tools, equipment, shafts, slopes, tunnels,

excavations and other property, real or

personal, placed upon, under or above

the surface of such land by any person,

used in, or to be used in, or resulting

from, the work of extracting in such area

bituminous coal, lignite or anthracite

from its natural deposits in the earth by

any means or method, and in the work

of preparing the coal so extracted, and

includes custom coal preparation

facilities.

(13) Coal preparation means the

breaking, crushing, sizing, cleaning,

washing, drying, mixing, storing and

loading of bituminous coal, lignite or

anthracite, and such other work of

preparing coal as is usually done by the

operator of a coal mine. For purposes of

this definition, the term does not

include coal preparation performed by

coke oven workers.

(14) Department means the United

States Department of Labor.

(15) Director means the Director,

OWCP, or his or her designee.

(16) District Director means a person

appointed as provided in sections 39

and 40 of the LHWCA, or his or her

designee, who is authorized to develop

and adjudicate claims as provided in

this subchapter (see § 725.350). The

term District Director is substituted for

the term Deputy Commissioner

wherever that term appears in this

subchapter. This substitution is for

administrative purposes only and in no

way affects the power or authority of the

position as established in the statute.

Any action taken by a person under the

authority of a district director will be

considered the action of a deputy

commissioner.

(17) Division or DCMWC means the

Division of Coal Mine Workers’

Compensation in the OWCP,

Employment Standards Administration,

United States Department of Labor.
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(18) Insurer or carrier means any

private company, corporation, mutual

association, reciprocal or interinsurance

exchange, or any other person or fund,

including any State fund, authorized

under the laws of a State to insure

employers’ liability under workers’

compensation laws. The term also

includes the Secretary of Labor in the

exercise of his or her authority under

section 433 of the Act.

(19) Miner or coal miner means any

individual who works or has worked in

or around a coal mine or coal

preparation facility in the extraction or

preparation of coal. The term also

includes an individual who works or

has worked in coal mine construction or

transportation in or around a coal mine,

to the extent such individual was

exposed to coal dust as a result of such

employment (see § 725.202). For

purposes of this definition, the term

does not include coke oven workers

whose activities involve the preparation

or use of coal for the coke

manufacturing process.

(20) The Nation’s coal mines means

all coal mines located in any State.

(21) Office or OWCP means the Office

of Workers’ Compensation Programs,

United States Department of Labor.

(22) Office of Administrative Law

Judges means the Office of

Administrative Law Judges, U.S.

Department of Labor.

(23) Operator means any owner,

lessee, or other person who operates,

controls or supervises a coal mine,

including a prior or successor operator

as defined in section 422 of the Act and

certain transportation and construction

employers (see subpart G of this part).

(24) Person means an individual,

partnership, association, corporation,

firm, subsidiary or parent of a

corporation, or other organization or

business entity.

(25) Pneumoconiosis means a chronic

dust disease of the lung and its

sequelae, including respiratory and

pulmonary impairments, arising out of

coal mine employment (see part 718 of

this subchapter).

(26) Responsible operator means an

operator which has been determined to

be liable for the payment of benefits to

a claimant for periods of eligibility after

December 31, 1973, with respect to a

claim filed under section 415 or part C

of title IV of the Act or reviewed under

section 435 of the Act.

(27) Secretary means the Secretary of

Labor, United States Department of

Labor, or a person, authorized by him or

her to perform his or her functions

under title IV of the Act.

(28) State includes any state of the

United States, the District of Columbia,

the Commonwealth of Puerto Rico, the

Virgin Islands, American Samoa, Guam,

the Trust Territory of the Pacific Islands,

and prior to January 3, 1959, and August

21, 1959, respectively, the territories of

Alaska and Hawaii.

(29) Total disability and partial

disability, for purposes of this part, have

the meaning given them as provided in

part 718 of this subchapter.

(30) Underground coal mine means a

coal mine in which the earth and other

materials which lie above and around

the natural deposit of coal (i.e.,

overburden) are not removed in mining;

including all land, structures, facilities,

machinery, tools, equipment, shafts,

slopes, tunnels, excavations and other

property, real or personal, appurtenant

thereto.

(31) A workers’ compensation law

means a law providing for payment of

benefits to employees, and their

dependents and survivors, for disability

on account of injury, including

occupational disease, or death, suffered

in connection with their employment. A

payment funded wholly out of general

revenues shall not be considered a

payment under a workers’

compensation law.

(32) Year means a period of one

calendar year (365 days), or partial

periods totalling one year, during which

the miner worked in or around a coal

mine or mines. A ‘‘working day’’ means

any day or part of a day for which a

miner received pay for work as a miner,

including any day for which the miner

received pay while on an approved

absence, such as vacation or sick leave.

(i) If the evidence establishes that the

miner worked in or around coal mines

at least 125 working days during a

calendar year or partial periods totalling

one year, then the miner has worked

one year in coal mine employment for

all purposes under the Act. If a miner

worked fewer than 125 working days in

a year, he or she has worked a fractional

year based on the ratio of the actual

number of days worked to 125. Proof

that the miner worked more than 125

working days in a calendar year or

partial periods totalling a year, shall not

establish more than one year.

(ii) To the extent the evidence

permits, the beginning and ending dates

of all periods of coal mine employment

shall be ascertained. The dates and

length of employment may be

established by any credible evidence

including (but not limited to) company

records, pension records, earnings

statements, coworker affidavits, and

sworn testimony. If the evidence

establishes that the miner’s employment

lasted for a calendar year, it shall be

presumed, in the absence of evidence to

the contrary, that the miner spent at

least 125 working days in such

employment.

(iii) If the evidence is insufficient to

establish the beginning and ending

dates of the miner’s coal mine

employment, or the miner’s

employment lasted less than a calendar

year, then the adjudication officer may

use the following formula: divide the

miner’s yearly income from work as a

miner by the coal mine industry’s

average daily earnings for that year, as

reported by the Bureau of Labor

Statistics (BLS). A copy of the BLS table

shall be made a part of the record if the

adjudication officer uses this method to

establish the length of the miner’s work

history.

(iv) No periods of coal mine

employment occurring outside the

United States shall be considered in

computing the miner’s work history.

(b) Statutory terms. The definitions

contained in this section shall not be

construed in derogation of terms of the

Act.

(c) Dependents and survivors.

Dependents and survivors are those

persons described in subpart B of this

part.

§ 725.102 Disclosure of program

information.

(a) All reports, records, or other

documents filed with the OWCP with

respect to claims are the records of the

OWCP. The Director or his or her

designee shall be the official custodian

of those records maintained by the

OWCP at its national office. The District

Director shall be the official custodian

of those records maintained at a district

office.

(b) The official custodian of any

record sought to be inspected shall

permit or deny inspection in accordance

with the Department of Labor’s

regulations pertaining thereto (see 29

CFR part 70). The original record in any

such case shall not be removed from the

Office of the custodian for such

inspection. The custodian may, in his or

her discretion, deny inspection of any

record or part thereof which is of a

character specified in 5 U.S.C. 552(b) if

in his or her opinion such inspection

may result in damage, harm, or

harassment to the beneficiary or to any

other person. For special provisions

concerning release of information

regarding injured employees undergoing

vocational rehabilitation, see § 702.508

of this title.

(c) Any person may request copies of

records he or she has been permitted to

inspect. Such requests shall be

addressed to the official custodian of the

records sought to be copied. The official
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custodian shall provide the requested

copies under the terms and conditions

specified in the Department of Labor’s

regulations relating thereto (see 29 CFR

part 70).

(d) Any party to a claim (§ 725.360) or

his or her duly authorized

representative shall be permitted upon

request to inspect the file which has

been compiled in connection with such

claim. Any party to a claim or

representative of such party shall upon

request be provided with a copy of any

or all material contained in such claim

file. A request for information by a party

or representative made under this

paragraph shall be answered within a

reasonable time after receipt by the

Office. Internal documents prepared by

the district director which do not

constitute evidence of a fact which must

be established in connection with a

claim shall not be routinely provided or

presented for inspection in accordance

with a request made under this

paragraph.

§ 725.103 Burden of proof.

Except as otherwise provided in this

part and part 718, the burden of proving

a fact alleged in connection with any

provision shall rest with the party

making such allegation.

Subpart B—Persons Entitled to

Benefits, Conditions, and Duration of

Entitlement

§ 725.201 Who is entitled to benefits;

contents of this subpart.

(a) Section 415 and part C of the Act

provide for the payment of periodic

benefits in accordance with this part to:

(1) A miner (see § 725.202) who is

determined to be totally disabled due to

pneumoconiosis; or

(2) The surviving spouse or surviving

divorced spouse or, where neither

exists, the child of a deceased miner,

where the deceased miner:

(i) Was receiving benefits under

section 415 or part C of title IV of the

Act as a result of a claim filed prior to

January 1, 1982; or

(ii) Is determined as a result of a claim

filed prior to January 1, 1982, to have

been totally disabled due to

pneumoconiosis at the time of death, or

to have died due to pneumoconiosis.

Survivors of miners whose claims are

filed on or after January 1, 1982, must

establish that the deceased miner’s

death was due to pneumoconiosis in

order to establish their entitlement to

benefits, except where entitlement is

established under § 718.306 of part 718

on a survivor’s claim filed prior to June

30, 1982, or;

(3) The child of a miner’s surviving

spouse who was receiving benefits

under section 415 or part C of title IV

of the Act at the time of such spouse’s

death; or

(4) The surviving dependent parents,

where there is no surviving spouse or

child, or the surviving dependent

brothers or sisters, where there is no

surviving spouse, child, or parent, of a

miner, where the deceased miner;

(i) Was receiving benefits under

section 415 or part C of title IV of the

Act as a result of a claim filed prior to

January 1, 1982; or

(ii) Is determined as a result of a claim

filed prior to January 1, 1982, to have

been totally disabled due to

pneumoconiosis at the time of death, or

to have died due to pneumoconiosis.

Survivors of miners whose claims are

filed on or after January 1, 1982, must

establish that the deceased miner’s

death was due to pneumoconiosis in

order to establish their entitlement to

benefits, except where entitlement is

established under § 718.306 of part 718

on a survivor’s claim filed prior to June

30, 1982.

(b) Section 411(c)(5) of the Act

provides for the payment of benefits to

the eligible survivors of a miner

employed for 25 or more years in the

mines prior to June 30, 1971, if the

miner’s death occurred on or before

March 1, 1978, and if the claim was

filed prior to June 30, 1982, unless it is

established that at the time of death, the

miner was not totally or partially

disabled due to pneumoconiosis. For

the purposes of this part the term ‘‘total

disability’’ shall mean partial disability

with respect to a claim for which

eligibility is established under section

411(c)(5) of the Act. See § 718.306 of

part 718 which implements this

provision of the Act.

(c) The provisions contained in this

subpart describe the conditions of

entitlement to benefits applicable to a

miner, or a surviving spouse, child,

parent, brother, or sister, and the events

which establish or terminate entitlement

to benefits.

(d) In order for an entitled miner or

surviving spouse to qualify for

augmented benefits because of one or

more dependents, such dependents

must meet relationship and dependency

requirements with respect to such

beneficiary prescribed by or pursuant to

the Act. Such requirements are also set

forth in this subpart.

Conditions and Duration of Entitlement:

Miner

§ 725.202 Miner defined; condition of

entitlement, miner.

(a) Miner defined. A ‘‘miner’’ for the

purposes of this part is any person who

works or has worked in or around a coal

mine or coal preparation facility in the

extraction, preparation, or

transportation of coal, and any person

who works or has worked in coal mine

construction or maintenance in or

around a coal mine or coal preparation

facility. There shall be a rebuttable

presumption that any person working in

or around a coal mine or coal

preparation facility is a miner. This

presumption may be rebutted by proof

that:

(1) The person was not engaged in the

extraction, preparation or transportation

of coal while working at the mine site,

or in maintenance or construction of the

mine site; or

(2) The individual was not regularly

employed in or around a coal mine or

coal preparation facility.

(b) Coal mine construction and

transportation workers; special

provisions. A coal mine construction or

transportation worker shall be

considered a miner to the extent such

individual is or was exposed to coal

mine dust as a result of employment in

or around a coal mine or coal

preparation facility. A transportation

worker shall be considered a miner to

the extent that his or her work is

integral to the extraction or preparation

of coal. A construction worker shall be

considered a miner to the extent that his

or her work is integral to the building

of a coal or underground mine (see

§ 725.101(a) (12) and (30)).

(1) There shall be a rebuttable

presumption that such individual was

exposed to coal mine dust during all

periods of such employment occurring

in or around a coal mine or coal

preparation facility for purposes of:

(i) Determining whether such

individual is or was a miner;

(ii) Establishing the applicability of

any of the presumptions described in

section 411(c) of the Act and part 718

of this subchapter; and

(iii) Determining the identity of a coal

mine operator liable for the payment of

benefits in accordance with § 725.495.

(2) The presumption may be rebutted

by evidence which demonstrates that:

(i) The individual was not regularly

exposed to coal mine dust during his or

her work in or around a coal mine or

coal preparation facility; or

(ii) The individual did not work

regularly in or around a coal mine or

coal preparation facility.

(c) A person who is or was a selfemployed miner or independent

contractor, and who otherwise meets the

requirements of this paragraph, shall be

considered a miner for the purposes of

this part.
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3389

(d) Conditions of entitlement; miner.

An individual is eligible for benefits

under this subchapter if the individual:

(1) Is a miner as defined in this

section; and

(2) Has met the requirements for

entitlement to benefits by establishing

that he or she:

(i) Has pneumoconiosis (see

§ 718.202); and

(ii) The pneumoconiosis arose out of

coal mine employment (see § 718.203);

and

(iii) Is totally disabled (see

§ 718.204(c)); and

(iv) The pneumoconiosis contributes

to the total disability (see § 718.204(c));

and

(3) Has filed a claim for benefits in

accordance with the provisions of this

part.

§ 725.203 Duration and cessation of

entitlement; miner.

(a) An individual is entitled to

benefits as a miner for each month

beginning with the first month on or

after January 1, 1974, in which the

miner is totally disabled due to

pneumoconiosis arising out of coal mine

employment.

(b) The last month for which such

individual is entitled to benefits is the

month before the month during which

either of the following events first

occurs:

(1) The miner dies; or

(2) The miner’s total disability ceases

(see § 725.504).

(c) An individual who has been

finally adjudged to be totally disabled

due to pneumoconiosis and is receiving

benefits under the Act shall promptly

notify the Office and the responsible

coal mine operator, if any, if he or she

engages in his or her usual coal mine

work or comparable and gainful work.

(d) Upon reasonable notice, an

individual who has been finally

adjudged entitled to benefits shall

submit to any additional tests or

examinations the Office deems

appropriate if an issue arises pertaining

to the validity of the original award.

Conditions and Duration of Entitlement:

Miner’s Dependents (Augmented

Benefits)

§ 725.204 Determination of relationship;

spouse.

(a) For the purpose of augmenting

benefits, an individual will be

considered to be the spouse of a miner

if:

(1) The courts of the State in which

the miner is domiciled would find that

such individual and the miner validly

married; or

(2) The courts of the State in which

the miner is domiciled would find,

under the law they would apply in

determining the devolution of the

miner’s intestate personal property, that

the individual is the miner’s spouse; or

(3) Under State law, such individual

would have the right of a spouse to

share in the miner’s intestate personal

property; or

(4) Such individual went through a

marriage ceremony with the miner

resulting in a purported marriage

between them and which, but for a legal

impediment, would have been a valid

marriage, unless the individual entered

into the purported marriage with

knowledge that it was not a valid

marriage, or if such individual and the

miner were not living in the same

household in the month in which a

request is filed that the miner’s benefits

be augmented because such individual

qualifies as the miner’s spouse.

(b) The qualification of an individual

for augmentation purposes under this

section shall end with the month before

the month in which:

(1) The individual dies, or

(2) The individual who previously

qualified as a spouse for purposes of

§ 725.520(c), entered into a valid

marriage without regard to this section,

with a person other than the miner.

§ 725.205 Determination of dependency;

spouse.

For the purposes of augmenting

benefits, an individual who is the

miner’s spouse (see § 725.204) will be

determined to be dependent upon the

miner if:

(a) The individual is a member of the

same household as the miner (see

§ 725.232); or

(b) The individual is receiving regular

contributions from the miner for

support (see § 725.233(c)); or

(c) The miner has been ordered by a

court to contribute to such individual’s

support (see § 725.233(e)); or

(d) The individual is the natural

parent of the son or daughter of the

miner; or

(e) The individual was married to the

miner (see § 725.204) for a period of not

less than 1 year.

§ 725.206 Determination of relationship;

divorced spouse.

For the purposes of augmenting

benefits with respect to any claim

considered or reviewed under this part

or part 727 of this subchapter (see

§ 725.4(d)), an individual will be

considered to be the divorced spouse of

a miner if the individual’s marriage to

the miner has been terminated by a final

divorce on or after the 10th anniversary

of the marriage unless, if such

individual was married to and divorced

from the miner more than once, such

individual was married to the miner in

each calendar year of the period

beginning 10 years immediately before

the date on which any divorce became

final.

§ 725.207 Determination of dependency;

divorced spouse.

For the purpose of augmenting

benefits, an individual who is the

miner’s divorced spouse (§ 725.206) will

be determined to be dependent upon the

miner if:

(a) The individual is receiving at least

one-half of his or her support from the

miner (see § 725.233(g)); or

(b) The individual is receiving

substantial contributions from the miner

pursuant to a written agreement (see

§ 725.233 (c) and (f)); or

(c) A court order requires the miner to

furnish substantial contributions to the

individual’s support (see § 725.233 (c)

and (e)).

§ 725.208 Determination of relationship;

child.

As used in this section, the term

‘‘beneficiary’’ means only a surviving

spouse entitled to benefits at the time of

death (see § 725.212), or a miner. An

individual will be considered to be the

child of a beneficiary if:

(a) The courts of the State in which

the beneficiary is domiciled (see

§ 725.231) would find, under the law

they would apply, that the individual is

the beneficiary’s child; or

(b) The individual is the legally

adopted child of such beneficiary; or

(c) The individual is the stepchild of

such beneficiary by reason of a valid

marriage of the individual’s parent or

adopting parent to such beneficiary; or

(d) The individual does not bear the

relationship of child to such beneficiary

under paragraph (a), (b), or (c) of this

section, but would, under State law,

have the same right as a child to share

in the beneficiary’s intestate personal

property; or

(e) The individual is the natural son

or daughter of a beneficiary but is not

a child under paragraph (a), (b), or (c)

of this section, and is not considered to

be the child of the beneficiary under

paragraph (d) of this section if the

beneficiary and the mother or the father,

as the case may be, of the individual

went through a marriage ceremony

resulting in a purported marriage

between them which but for a legal

impediment (see § 725.230) would have

been a valid marriage; or

(f) The individual is the natural son

or daughter of a beneficiary but is not

a child under paragraph (a), (b), or (c)

of this section, and is not considered to
3390 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

be the child of the beneficiary under

paragraph (d) or (e) of this section, such

individual shall nevertheless be

considered to be the child of the

beneficiary if:

(1) The beneficiary, prior to his or her

entitlement to benefits, has

acknowledged in writing that the

individual is his or her son or daughter,

or has been decreed by a court to be the

parent of the individual, or has been

ordered by a court to contribute to the

support of the individual (see

§ 725.233(e)) because the individual is

his or her son or daughter; or

(2) Such beneficiary is shown by

satisfactory evidence to be the father or

mother of the individual and was living

with or contributing to the support of

the individual at the time the

beneficiary became entitled to benefits.

§ 725.209 Determination of dependency;

child.

(a) For purposes of augmenting the

benefits of a miner or surviving spouse,

the term ‘‘beneficiary’’ as used in this

section means only a miner or surviving

spouse entitled to benefits (see

§ 725.202 and § 725.212). An individual

who is the beneficiary’s child

(§ 725.208) will be determined to be, or

to have been dependent on the

beneficiary, if the child:

(1) Is unmarried; and

(2)(i) Is under 18 years of age; or

(ii) Is under a disability as defined in

section 223(d) of the Social Security

Act, 42 U.S.C. 423(d), which began

before the age of 22; or

(iii) Is 18 years of age or older and is

a student.

(b)(1) The term ‘‘student’’ means a

‘‘full-time student’’ as defined in section

202(d)(7) of the Social Security Act, 42

U.S.C. 402(d)(7) (see §§ 404.367 through

404.369 of this title), or an individual

under 23 years of age who has not

completed 4 years of education beyond

the high school level and who is

regularly pursuing a full-time course of

study or training at an institution which

is:

(i) A school, college, or university

operated or directly supported by the

United States, or by a State or local

government or political subdivision

thereof; or

(ii) A school, college, or university

which has been accredited by a State or

by a State-recognized or nationallyrecognized accrediting agency or body;

or

(iii) A school, college, or university

not so accredited but whose credits are

accepted, on transfer, by at least three

institutions which are so accredited; or

(iv) A technical, trade, vocational,

business, or professional school

accredited or licensed by the Federal or

a State government or any political

subdivision thereof, providing courses

of not less than 3 months’ duration that

prepare the student for a livelihood in

a trade, industry, vocation, or

profession.

(2) A student will be considered to be

‘‘pursuing a full-time course of study or

training at an institution’’ if the student

is enrolled in a noncorrespondence

course of at least 13 weeks duration and

is carrying a subject load which is

considered full-time for day students

under the institution’s standards and

practices. A student beginning or ending

a full-time course of study or training in

part of any month will be considered to

be pursuing such course for the entire

month.

(3) A child is considered not to have

ceased to be a student:

(i) During any interim between school

years, if the interim does not exceed 4

months and the child shows to the

satisfaction of the Office that he or she

has a bona fide intention of continuing

to pursue a full-time course of study or

training; or

(ii) During periods of reasonable

duration in which, in the judgment of

the Office, the child is prevented by

factors beyond the child’s control from

pursuing his or her education.

(4) A student whose 23rd birthday

occurs during a semester or the

enrollment period in which such

student is pursuing a full-time course of

study or training shall continue to be

considered a student until the end of

such period, unless eligibility is

otherwise terminated.

§ 725.210 Duration of augmented benefits.

Augmented benefits payable on behalf

of a spouse or divorced spouse, or a

child, shall begin with the first month

in which the dependent satisfies the

conditions of relationship and

dependency set forth in this subpart.

Augmentation of benefits on account of

a dependent continues through the

month before the month in which the

dependent ceases to satisfy these

conditions, except in the case of a child

who qualifies as a dependent because

such child is a student. In the latter

case, benefits continue to be augmented

through the month before the first

month during no part of which such

child qualifies as a student.

§ 725.211 Time of determination of

relationship and dependency of spouse or

child for purposes of augmentation of

benefits.

With respect to the spouse or child of

a miner entitled to benefits, and with

respect to the child of a surviving

spouse entitled to benefits, the

determination as to whether an

individual purporting to be a spouse or

child is related to or dependent upon

such miner or surviving spouse shall be

based on the facts and circumstances

present in each case, at the appropriate

time.

Conditions and Duration of Entitlement:

Miner’s Surviviors

§ 725.212 Condition of entitlement;

surviving spouse or surviving divorced

spouse.

(a) An individual who is the surviving

spouse or surviving divorced spouse of

a miner is eligible for benefits if such

individual:

(1) Is not married;

(2) Was dependent on the miner at the

pertinent time; and

(3) The deceased miner either:

(i) Was receiving benefits under

section 415 or part C of title IV of the

Act at the time of death as a result of

a claim filed prior to January 1, 1982; or

(ii) Is determined as a result of a claim

filed prior to January 1, 1982, to have

been totally disabled due to

pneumoconiosis at the time of death or

to have died due to pneumoconiosis. A

surviving spouse or surviving divorced

spouse of a miner whose claim is filed

on or after January 1, 1982, must

establish that the deceased miner’s

death was due to pneumoconiosis in

order to establish entitlement to

benefits, except where entitlement is

established under §718.306 of part 718

on a claim filed prior to June 30, 1982.

(b) If more than one spouse meets the

conditions of entitlement prescribed in

paragraph (a), then each spouse will be

considered a beneficiary for purposes of

section 412(a)(2) of the Act without

regard to the existence of any other

entitled spouse or spouses.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.213 Duration of entitlement;

surviving spouse or surviving divorced

spouse.

(a) An individual is entitled to

benefits as a surviving spouse, or as a

surviving divorced spouse, for each

month beginning with the first month in

which all of the conditions of

entitlement prescribed in § 725.212 are

satisfied.

(b) The last month for which such

individual is entitled to such benefits is

the month before the month in which

either of the following events first

occurs:

(1) The surviving spouse or surviving

divorced spouse marries; or
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3391

(2) The surviving spouse or surviving

divorced spouse dies.

(c) A surviving spouse or surviving

divorced spouse whose entitlement to

benefits has been terminated pursuant

to § 725.213(b)(1) may thereafter again

become entitled to such benefits upon

filing application for such reentitlement,

beginning with the first month after the

marriage ends and such individual

meets the requirements of § 725.212.

The individual shall not be required to

reestablish the miner’s entitlement to

benefits (§ 725.212(a)(3)(i)) or the

miner’s death due to pneumoconiosis

(§ 725.212(a)(3)(ii)).

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.214 Determination of relationship;

surviving spouse.

An individual shall be considered to

be the surviving spouse of a miner if:

(a) The courts of the State in which

the miner was domiciled (see § 725.231)

at the time of his or her death would

find that the individual and the miner

were validly married; or

(b) The courts of the State in which

the miner was domiciled (see § 725.231)

at the time of the miner’s death would

find that the individual was the miner’s

surviving spouse; or

(c) Under State law, such individual

would have the right of the spouse to

share in the miner’s interstate personal

property; or

(d) Such individual went through a

marriage ceremony with the miner

resulting in a purported marriage

between them and which but for a legal

impediment (see § 725.230) would have

been a valid marriage, unless such

individual entered into the purported

marriage with knowledge that it was not

a valid marriage, or if such individual

and the miner were not living in the

same household at the time of the

miner’s death.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.215 Determination of dependency;

surviving spouse.

An individual who is the miner’s

surviving spouse (see § 725.214) shall be

determined to have been dependent on

the miner if, at the time of the miner’s

death:

(a) The individual was living with the

miner (see § 725.232); or

(b) The individual was dependent

upon the miner for support or the miner

has been ordered by a court to

contribute to such individual’s support

(see § 725.233); or

(c) The individual was living apart

from the miner because of the miner’s

desertion or other reasonable cause; or

(d) The individual is the natural

parent of the miner’s son or daughter; or

(e) The individual had legally adopted

the miner’s son or daughter while the

individual was married to the miner and

while such son or daughter was under

the age of 18; or

(f) The individual was married to the

miner at the time both of them legally

adopted a child under the age of 18; or

(g) (1) The individual was married to

the miner for a period of not less than

9 months immediately before the day on

which the miner died, unless the

miner’s death:

(i) Is accidental (as defined in

paragraph (g)(2) of this section), or

(ii) Occurs in line of duty while the

miner is a member of a uniformed

service serving on active duty (as

defined in § 404.1019 of this title), and

the surviving spouse was married to the

miner for a period of not less than 3

months immediately prior to the day on

which such miner died.

(2) For purposes of paragraph (g)(l)(i)

of this section, the death of a miner is

accidental if such individual received

bodily injuries solely through violent,

external, and accidental means, and as

a direct result of the bodily injuries and

independently of all other causes, dies

not later than 3 months after the day on

which such miner receives such bodily

injuries. The term ‘‘accident’’ means an

event that was unpremeditated and

unforeseen from the standpoint of the

deceased individual. To determine

whether the death of an individual did,

in fact, result from an accident the

adjudication officer will consider all the

circumstances surrounding the casualty.

An intentional and voluntary suicide

will not be considered to be death by

accident; however, suicide by an

individual who is so incompetent as to

be incapable of acting intentionally and

voluntarily will be considered to be a

death by accident. In no event will the

death of an individual resulting from

violent and external causes be

considered a suicide unless there is

direct proof that the fatal injury was

self-inflicted.

(3) The provisions of paragraph (g)

shall not apply if the adjudication

officer determines that at the time of the

marriage involved, the miner would not

reasonably have been expected to live

for 9 months.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.216 Determination of relationship;

surviving divorced spouse.

An individual will be considered to

be the surviving divorced spouse of a

deceased miner in a claim considered

under this part or reviewed under part

727 of this subchapter (see § 725.4(d)),

if such individual’s marriage to the

miner had been terminated by a final

divorce on or after the 10th anniversary

of the marriage unless, if such

individual was married to and divorced

from the miner more than once, such

individual was married to such miner in

each calendar year of the period

beginning 10 years immediately before

the date on which any divorce became

final and ending with the year in which

the divorce became final.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.217 Determination of dependency;

surviving divorced spouse.

An individual who is the miner’s

surviving divorced spouse (see

§ 725.216) shall be determined to have

been dependent on the miner if, for the

month before the month in which the

miner died:

(a) The individual was receiving at

least one-half of his or her support from

the miner (see § 725.233(g)); or

(b) The individual was receiving

substantial contributions from the miner

pursuant to a written agreement (see

§ 725.233 (c) and (f)); or

(c) A court order required the miner

to furnish substantial contributions to

the individual’s support (see § 725.233

(c) and (e)).

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.218 Conditions of entitlement; child.

(a) An individual is entitled to

benefits where he or she meets the

required standards of relationship and

dependency under this subpart (see

§ 725.220 and § 725.221) and is the

child of a deceased miner who:

(1) Was receiving benefits under

section 415 or part C of title IV of the

Act as a result of a claim filed prior to

January 1, 1982, or

(2) Is determined as a result of a claim

filed prior to January 1, 1982, to have

been totally disabled due to

pneumoconiosis at the time of death, or

to have died due to pneumoconiosis. A

surviving dependent child of a miner

whose claim is filed on or after January

1, 1982, must establish that the miner’s

death was due to pneumoconiosis in

order to establish entitlement to

benefits, except where entitlement is
3392 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

established under § 718.306 of part 718

on a claim filed prior to June 30, 1982.

(b) A child is not entitled to benefits

for any month for which a miner, or the

surviving spouse or surviving divorced

spouse of a miner, establishes

entitlement to benefits.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.219 Duration of entitlement; child.

(a) An individual is entitled to

benefits as a child for each month

beginning with the first month in which

all of the conditions of entitlement

prescribed in § 725.218 are satisfied.

(b) The last month for which such

individual is entitled to such benefits is

the month before the month in which

any one of the following events first

occurs:

(1) The child dies;

(2) The child marries;

(3) The child attains age 18; and

(i) Is not a student (as defined in

§ 725.209(b)) during any part of the

month in which the child attains age 18;

and

(ii) Is not under a disability (as

defined in § 725.209(a)(2)(ii)) at that

time;

(4) If the child’s entitlement beyond

age 18 is based on his or her status as

a student, the earlier of:

(i) The first month during no part of

which the child is a student; or

(ii) The month in which the child

attains age 23 and is not under a

disability (as defined in

§ 725.209(a)(2)(ii)) at that time;

(5) If the child’s entitlement beyond

age 18 is based on disability, the first

month in no part of which such

individual is under a disability.

(c) A child whose entitlement to

benefits terminated with the month

before the month in which the child

attained age 18, or later, may thereafter

(provided such individual is not

married) again become entitled to such

benefits upon filing application for such

reentitlement, beginning with the first

month after termination of benefits in

which such individual is a student and

has not attained the age of 23.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.220 Determination of relationship;

child.

For purposes of determining whether

an individual may qualify for benefits as

the child of a deceased miner, the

provisions of § 725.208 shall be

applicable. As used in this section, the

term ‘‘beneficiary’’ means only a

surviving spouse entitled to benefits at

the time of such surviving spouse’s

death (see § 725.212), or a miner. For

purposes of a survivor’s claim, an

individual will be considered to be a

child of a beneficiary if:

(a) The courts of the State in which

such beneficiary is domiciled (see

§ 725.231) would find, under the law

they would apply in determining the

devolution of the beneficiary’s intestate

personal property, that the individual is

the beneficiary’s child; or

(b) Such individual is the legally

adopted child of such beneficiary; or

(c) Such individual is the stepchild of

such beneficiary by reason of a valid

marriage of such individual’s parent or

adopting parent to such beneficiary; or

(d) Such individual does not bear the

relationship of child to such beneficiary

under paragraph (a), (b), or (c) of this

section, but would, under State law,

have the same right as a child to share

in the beneficiary’s intestate personal

property; or

(e) Such individual is the natural son

or daughter of a beneficiary but does not

bear the relationship of child to such

beneficiary under paragraph (a), (b), or

(c) of this section, and is not considered

to be the child of the beneficiary under

paragraph (d) of this section, such

individual shall nevertheless be

considered to be the child of such

beneficiary if the beneficiary and the

mother or father, as the case may be, of

such individual went through a

marriage ceremony resulting in a

purported marriage between them

which but for a legal impediment (see

§ 725.230) would have been a valid

marriage; or

(f) Such individual is the natural son

or daughter of a beneficiary but does not

have the relationship of child to such

beneficiary under paragraph (a), (b), or

(c) of this section, and is not considered

to be the child of the beneficiary under

paragraph (d) or (e) of this section, such

individual shall nevertheless be

considered to be the child of such

beneficiary if:

(1) Such beneficiary, prior to his or

her entitlement to benefits, has

acknowledged in writing that the

individual is his or her son or daughter,

or has been decreed by a court to be the

father or mother of the individual, or

has been ordered by a court to

contribute to the support of the

individual (see § 725.233(a)) because the

individual is a son or daughter; or

(2) Such beneficiary is shown by

satisfactory evidence to be the father or

mother of the individual and was living

with or contributing to the support of

the individual at the time such

beneficiary became entitled to benefits.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.221 Determination of dependency;

child.

For the purposes of determining

whether a child was dependent upon a

deceased miner, the provisions of

§ 725.209 shall be applicable, except

that for purposes of determining the

eligibility of a child who is under a

disability as defined in section 223(d) of

the Social Security Act, such disability

must have begun before the child

attained age 22, or in the case of a

student, before the child ceased to be a

student.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.222 Conditions of entitlement;

parent, brother, or sister.

(a) An individual is eligible for

benefits as a surviving parent, brother or

sister if all of the following

requirements are met:

(1) The individual is the parent,

brother, or sister of a deceased miner;

(2) The individual was dependent on

the miner at the pertinent time;

(3) Proof of support is filed within 2

years after the miner’s death, unless the

time is extended for good cause

(§ 725.226);

(4) In the case of a brother or sister,

such individual also:

(i) Is under 18 years of age; or

(ii) Is under a disability as defined in

section 223(d) of the Social Security

Act, 42 U.S.C. 423(d), which began

before such individual attained age 22,

or in the case of a student, before the

student ceased to be a student; or

(iii) Is a student (see § 725.209(b)); or

(iv) Is under a disability as defined in

section 223(d) of the Social Security

Act, 42 U.S.C. 423(d), at the time of the

miner’s death;

(5) The deceased miner:

(i) Was entitled to benefits under

section 415 or part C of title IV of the

Act as a result of a claim filed prior to

January 1, 1982; or

(ii) Is determined as a result of a claim

filed prior to January 1, 1982, to have

been totally disabled due to

pneumoconiosis at the time of death or

to have died due to pneumoconiosis. A

surviving dependent parent, brother or

sister of a miner whose claim is filed on

or after January 1, 1982, must establish

that the miner’s death was due to

pneumoconiosis in order to establish

entitlement to benefits, except where

entitlement is established under

§ 718.306 of part 718 on a claim filed

prior to June 30, 1982.
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(b)(1) A parent is not entitled to

benefits if the deceased miner was

survived by a spouse or child at the time

of such miner’s death.

(2) A brother or sister is not entitled

to benefits if the deceased miner was

survived by a spouse, child, or parent at

the time of such miner’s death.

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.223 Duration of entitlement; parent,

brother, or sister.

(a) A parent, sister, or brother is

entitled to benefits beginning with the

month all the conditions of entitlement

described in § 725.222 are met.

(b) The last month for which such

parent is entitled to benefits is the

month in which the parent dies.

(c) The last month for which such

brother or sister is entitled to benefits is

the month before the month in which

any of the following events first occurs:

(1) The individual dies;

(2)(i) The individual marries or

remarries; or

(ii) If already married, the individual

received support in any amount from

his or her spouse;

(3) The individual attains age 18; and

(i) Is not a student (as defined in

§ 725.209(b)) during any part of the

month in which the individual attains

age 18; and

(ii) Is not under a disability (as

defined in § 725.209(a)(2)(ii)) at that

time;

(4) If the individual’s entitlement

beyond age 18 is based on his or her

status as a student, the earlier of:

(i) The first month during no part of

which the individual is a student; or

(ii) The month in which the

individual attains age 23 and is not

under a disability (as defined in

§ 725.209(a)(2)(ii)) at that time;

(5) If the individual’s entitlement

beyond age 18 is based on disability, the

first month in no part of which such

individual is under a disability.

(d) A brother or sister whose

entitlement to benefits terminated

pursuant to § 725.223(c)(2)(i) may

thereafter again become entitled to such

benefits upon filing application for such

reentitlement, beginning with the first

month after the marriage ends and such

individual meets the requirements of

§ 725.222. The individual shall not be

required to reestablish the miner’s

entitlement to benefits

(§ 725.222(a)(5)(i)) or the miner’s death

due to pneumoconiosis

(§ 725.222(a)(5)(ii)).

(Approved by the Office of Management and

Budget under control number 1215–0087)

(Pub. L. No. 96–511)

§ 725.224 Determination of relationship;

parent, brother, or sister.

(a) An individual will be considered

to be the parent, brother, or sister of a

miner if the courts of the State in which

the miner was domiciled (see § 225.231)

at the time of death would find, under

the law they would apply, that the

individual is the miner’s parent,

brother, or sister.

(b) Where, under State law, the

individual is not the miner’s parent,

brother, or sister, but would, under State

law, have the same status (i.e., right to

share in the miner’s intestate personal

property) as a parent, brother, or sister,

the individual will be considered to be

the parent, brother, or sister as

appropriate.

§ 725.225 Determination of dependency;

parent, brother, or sister.

An individual who is the miner’s

parent, brother, or sister will be

determined to have been dependent on

the miner if, during the 1-year period

immediately prior to the miner’s death:

(a) The individual and the miner were

living in the same household (see

§ 725.232); and

(b) The individual was totally

dependent on the miner for support (see

§ 725.233(h)).

§ 725.226 ‘‘Good cause’’ for delayed filing

of proof of support.

(a) What constitutes ‘‘good cause.’’

‘‘Good cause’’ may be found for failure

to file timely proof of support where the

parent, brother, or sister establishes to

the satisfaction of the Office that such

failure to file was due to:

(1) Circumstances beyond the

individual’s control, such as extended

illness, mental, or physical incapacity,

or communication difficulties; or

(2) Incorrect or incomplete

information furnished the individual by

the Office; or

(3) Efforts by the individual to secure

supporting evidence without a

realization that such evidence could be

submitted after filing proof of support.

(b) What does not constitute ‘‘good

cause.’’ ‘‘Good cause’’ for failure to file

timely proof of support (see

§ 725.222(a)(3)) does not exist when

there is evidence of record in the Office

that the individual was informed that he

or she should file within the prescribed

period and he or she failed to do so

deliberately or through negligence.

§ 725.227 Time of determination of

relationship and dependency of survivors.

The determination as to whether an

individual purporting to be an entitled

survivor of a miner or beneficiary was

related to, or dependent upon, the miner

is made after such individual files a

claim for benefits as a survivor. Such

determination is based on the facts and

circumstances with respect to a

reasonable period of time ending with

the miner’s death. A prior determination

that such individual was, or was not, a

dependent for the purposes of

augmenting the miner’s benefits for a

certain period, is not determinative of

the issue of whether the individual is a

dependent survivor of such miner.

§ 725.228 Effect of conviction of felonious

and intentional homicide on entitlement to

benefits.

An individual who has been

convicted of the felonious and

intentional homicide of a miner or other

beneficiary shall not be entitled to

receive any benefits payable because of

the death of such miner or other

beneficiary, and such person shall be

considered nonexistent in determining

the entitlement to benefits of other

individuals.

Terms Used in this Subpart

§ 725.229 Intestate personal property.

References in this subpart to the

‘‘same right to share in the intestate

personal property’’ of a deceased miner

(or surviving spouse) refer to the right

of an individual to share in such

distribution in the individual’s own

right and not the right of representation.

§ 725.230 Legal impediment.

For purposes of this subpart, ‘‘legal

impediment’’ means an impediment

resulting from the lack of dissolution of

a previous marriage or otherwise arising

out of such previous marriage or its

dissolution or resulting from a defect in

the procedure followed in connection

with the purported marriage

ceremony—for example, the

solemnization of a marriage only

through a religious ceremony in a

country which requires a civil ceremony

for a valid marriage.

§ 725.231 Domicile.

(a) For purposes of this subpart, the

term ‘‘domicile’’ means the place of an

individual’s true, fixed, and permanent

home.

(b) The domicile of a deceased miner

or surviving spouse is determined as of

the time of death.

(c) If an individual was not domiciled

in any State at the pertinent time, the

law of the District of Columbia is

applied.
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§ 725.232 Member of the same

household—’’living with,’’ ‘‘living in the

same household,’’ and ‘‘living in the miner’s

household,’’ defined.

(a) Defined. (1) The term ‘‘member of

the same household’’ as used in section

402(a)(2) of the Act (with respect to a

spouse); the term ‘‘living with’’ as used

in section 402(e) of the Act (with respect

to a surviving spouse); and the term

‘‘living in the same household’’ as used

in this subpart, means that a husband

and wife were customarily living

together as husband and wife in the

same place.

(2) The term ‘‘living in the miner’s

household’’ as used in section 412(a)(5)

of the Act (with respect to a parent,

brother, or sister) means that the miner

and such parent, brother, or sister were

sharing the same residence.

(b) Temporary absence. The

temporary absence from the same

residence of either the miner, or the

miner’s spouse, parent, brother, or sister

(as the case may be), does not preclude

a finding that one was ‘‘living with’’ the

other, or that they were ‘‘members of the

same household.’’ The absence of one

such individual from the residence in

which both had customarily lived shall,

in the absence of evidence to the

contrary, be considered temporary:

(1) If such absence was due to service

in the Armed Forces of the United

States; or

(2) If the period of absence from his

or her residence did not exceed 6

months and the absence was due to

business or employment reasons, or

because of confinement in a penal

institution or in a hospital, nursing

home, or other curative institution; or

(3) In any other case, if the evidence

establishes that despite such absence

they nevertheless reasonably expected

to resume physically living together.

(c) Relevant period of time. (1) The

determination as to whether a surviving

spouse had been ‘‘living with’’ the

miner shall be based upon the facts and

circumstances as of the time of the

death of the miner.

(2) The determination as to whether a

spouse is a ‘‘member of the same

household’’ as the miner shall be based

upon the facts and circumstances with

respect to the period or periods of time

as to which the issue of membership in

the same household is material.

(3) The determination as to whether a

parent, brother, or sister was ‘‘living in

the miner’s household’’ shall take

account of the 1-year period

immediately prior to the miner’s death.

§ 725.233 Support and contributions.

(a) Support defined. The term

‘‘support’’ includes food, shelter,

clothing, ordinary medical expenses,

and other ordinary and customary items

for the maintenance of the person

supported.

(b) Contributions defined. The term

‘‘contributions’’ refers to contributions

actually provided by the contributor

from such individual’s property, or the

use thereof, or by the use of such

individual’s own credit.

(c) Regular contributions and

‘‘substantial contributions’’ defined.

The terms ‘‘regular contributions’’ and

‘‘substantial contributions’’ mean

contributions that are customary and

sufficient to constitute a material factor

in the cost of the individual’s support.

(d) Contributions and community

property. When a spouse receives and

uses for his or her support income from

services or property, and such income,

under applicable State law, is the

community property of the wife and her

husband, no part of such income is a

‘‘contribution’’ by one spouse to the

other’s support regardless of the legal

interest of the donor. However, when a

spouse receives and uses for support,

income from the services and the

property of the other spouse and, under

applicable State law, such income is

community property, all of such income

is considered to be a contribution by the

donor to the spouse’s support.

(e) Court order for support defined.

References to a support order in this

subpart means any court order,

judgment, or decree of a court of

competent jurisdiction which requires

regular contributions that are a material

factor in the cost of the individual’s

support and which is in effect at the

applicable time. If such contributions

are required by a court order, this

condition is met whether or not the

contributions were actually made.

(f) Written agreement defined. The

term ‘‘written agreement’’ in the phrase

‘‘substantial contributions pursuant to a

written agreement’’, as used in this

subpart means an agreement signed by

the miner providing for substantial

contributions by the miner for the

individual’s support. It must be in effect

at the applicable time but it need not be

legally enforceable.

(g) One-half support defined. The

term ‘‘one-half support’’ means that the

miner made regular contributions, in

cash or in kind, to the support of a

divorced spouse at the specified time or

for the specified period, and that the

amount of such contributions equalled

or exceeded one-half the total cost of

such individual’s support at such time

or during such period.

(h) Totally dependent for support

defined. The term ‘‘totally dependent

for support’’ as used in § 725.225(b)

means that the miner made regular

contributions to the support of the

miner’s parents, brother, or sister, as the

case may be, and that the amount of

such contributions at least equalled the

total cost of such individual’s support.

Subpart C—Filing of Claims

§ 725.301 Who may file a claim.

(a) Any person who believes he or she

may be entitled to benefits under the

Act may file a claim in accordance with

this subpart.

(b) A claimant who has attained the

age of 18, is mentally competent and

physically able, may file a claim on his

or her own behalf.

(c) If a claimant is unable to file a

claim on his or her behalf because of a

legal or physical impairment, the

following rules shall apply:

(1) A claimant between the ages of 16

and 18 years who is mentally competent

and not under the legal custody or care

of another person, or a committee or

institution, may upon filing a statement

to the effect, file a claim on his or her

own behalf. In any other case where the

claimant is under 18 years of age, only

a person, or the manager or principal

officer of an institution having legal

custody or care of the claimant may file

a claim on his or her behalf.

(2) If a claimant over 18 years of age

has a legally appointed guardian or

committee, only the guardian or

committee may file a claim on his or her

behalf.

(3) If a claimant over 18 years of age

is mentally incompetent or physically

unable to file a claim and is under the

care of another person, or an institution,

only the person, or the manager or

principal officer of the institution

responsible for the care of the claimant,

may file a claim on his or her behalf.

(4) For good cause shown, the Office

may accept a claim executed by a

person other than one described in

paragraphs (c) (2) or (3) of this section.

(d) Except as provided in § 725.305 of

this part, in order for a claim to be

considered, the claimant must be alive

at the time the claim is filed.

§ 725.302 Evidence of authority to file a

claim on behalf of another.

A person filing a claim on behalf of

a claimant shall submit evidence of his

or her authority to so act at the time of

filing or at a reasonable time thereafter

in accordance with the following:

(a) A legally appointed guardian or

committee shall provide the Office with

certification of appointment by a proper

official of the court.

(b) Any other person shall provide a

statement describing his or her
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relationship to the claimant, the extent

to which he or she has care of the

claimant, or his or her position as an

officer of the institution of which the

claimant is an inmate. The Office may,

at any time, require additional evidence

to establish the authority of any such

person.

§ 725.303 Date and place of filing of

claims.

(a)(1) Claims for benefits shall be

delivered, mailed to, or presented at,

any of the various district offices of the

Social Security Administration, or any

of the various offices of the Department

of Labor authorized to accept claims, or,

in the case of a claim filed by or on

behalf of a claimant residing outside the

United States, mailed or presented to

any office maintained by the Foreign

Service of the United States. A claim

shall be considered filed on the day it

is received by the office in which it is

first filed.

(2) A claim submitted to a Foreign

Service Office or any other agency or

subdivision of the U.S. Government

shall be forwarded to the Office and

considered filed as of the date it was

received at the Foreign Service Office or

other governmental agency or unit.

(b) A claim submitted by mail shall be

considered filed as of the date of

delivery unless a loss or impairment of

benefit rights would result, in which

case a claim shall be considered filed as

of the date of its postmark. In the

absence of a legible postmark, other

evidence may be used to establish the

mailing date.

§ 725.304 Forms and initial processing.

(a) Claims shall be filed on forms

prescribed and approved by the Office.

The district office at which the claim is

filed will assist claimants in completing

their forms.

(b) If the place at which a claim is

filed is an office of the Social Security

Administration, such office shall

forward the completed claim form to an

office of the DCMWC, which is

authorized to process the claim.

§ 725.305 When a written statement is

considered a claim.

(a) The filing of a statement signed by

an individual indicating an intention to

claim benefits shall be considered to be

the filing of a claim for the purposes of

this part under the following

circumstances:

(1) The claimant or a proper person

on his or her behalf (see § 725.301)

executes and files a prescribed claim

form with the Office during the

claimant’s lifetime within the period

specified in paragraph (b) of this

section.

(2) Where the claimant dies within

the period specified in paragraph (b) of

this section without filing a prescribed

claim form, and a person acting on

behalf of the deceased claimant’s estate

executes and files a prescribed claim

form within the period specified in

paragraph (c) of this section.

(b) Upon receipt of a written

statement indicating an intention to

claim benefits, the Office shall notify

the signer in writing that to be

considered the claim must be executed

by the claimant or a proper party on his

or her behalf on the prescribed form and

filed with the Office within six months

from the date of mailing of the notice.

(c) If before the notice specified in

paragraph (b) of this section is sent, or

within six months after such notice is

sent, the claimant dies without having

executed and filed a prescribed form, or

without having had one executed and

filed in his or her behalf, the Office shall

upon receipt of notice of the claimant’s

death advise his or her estate, or those

living at his or her last known address,

in writing that for the claim to be

considered, a prescribed claim form

must be executed and filed by a person

authorized to do so on behalf of the

claimant’s estate within six months of

the date of the later notice.

(d) Claims based upon written

statements indicating an intention to

claim benefits not perfected in

accordance with this section shall not

be processed.

§ 725.306 Withdrawal of a claim.

(a) A claimant or an individual

authorized to execute a claim on a

claimant’s behalf or on behalf of

claimant’s estate under § 725.305, may

withdraw a previously filed claim

provided that:

(1) He or she files a written request

with the appropriate adjudication

officer indicating the reasons for seeking

withdrawal of the claim;

(2) The appropriate adjudication

officer approves the request for

withdrawal on the grounds that it is in

the best interests of the claimant or his

or her estate, and;

(3) Any payments made to the

claimant in accordance with § 725.522

are reimbursed.

(b) When a claim has been withdrawn

under paragraph (a) of this section, the

claim will be considered not to have

been filed.

§ 725.307 Cancellation of a request for

withdrawal.

At any time prior to approval, a

request for withdrawal may be canceled

by a written request of the claimant or

a person authorized to act on the

claimant’s behalf or on behalf of the

claimant’s estate.

§ 725.308 Time limits for filing claims.

(a) A claim for benefits filed under

this part by, or on behalf of, a miner

shall be filed within three years after a

medical determination of total disability

due to pneumoconiosis which has been

communicated to the miner or a person

responsible for the care of the miner, or

within three years after the date of

enactment of the Black Lung Benefits

Reform Act of 1977, whichever is later.

There is no time limit on the filing of

a claim by the survivor of a miner.

(b) A miner who is receiving benefits

under part B of title IV of the Act and

who is notified by HEW of the right to

seek medical benefits may file a claim

for medical benefits under part C of title

IV of the Act and this part. The

Secretary of Health, Education, and

Welfare is required to notify each miner

receiving benefits under part B of this

right. Notwithstanding the provisions of

paragraph (a) of this section, a miner

notified of his or her rights under this

paragraph may file a claim under this

part on or before December 31, 1980.

Any claim filed after that date shall be

untimely unless the time for filing has

been enlarged for good cause shown.

(c) There shall be a rebuttable

presumption that every claim for

benefits is timely filed. However, except

as provided in paragraph (b) of this

section, the time limits in this section

are mandatory and may not be waived

or tolled except upon a showing of

extraordinary circumstances.

§ 725.309 Additional claims; effect of a

prior denial of benefits.

(a) A claimant whose claim for

benefits was previously approved under

part B of title IV of the Act may file a

claim for benefits under this part as

provided in §§ 725.308(b) and 725.702.

(b) If a claimant files a claim under

this part while another claim filed by

the claimant under this part is still

pending, the later claim shall be merged

with the earlier claim for all purposes.

For purposes of this section, a claim

shall be considered pending if it has not

yet been finally denied.

(c) If a claimant files a claim under

this part within one year after the

effective date of a final order denying a

claim previously filed by the claimant

under this part (see § 725.502(a)(2)), the

later claim shall be considered a request

for modification of the prior denial and

shall be processed and adjudicated

under § 725.310 of this part.

(d) If a claimant files a claim under

this part more than one year after the

effective date of a final order denying a
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claim previously filed by the claimant

under this part (see § 725.502(a)(2)), the

later claim shall be considered a

subsequent claim for benefits. A

subsequent claim shall be processed and

adjudicated in accordance with the

provisions of subparts E and F of this

part, except that the claim shall be

denied unless the claimant

demonstrates that one of the applicable

conditions of entitlement (see

§§ 725.202(d) (miner), 725.212 (spouse),

725.218 (child), and 725.222 (parent,

brother, or sister)) has changed since the

date upon which the order denying the

prior claim became final. The

applicability of this paragraph may be

waived by the operator or fund, as

appropriate. The following additional

rules shall apply to the adjudication of

a subsequent claim:

(1) Any evidence submitted in

connection with any prior claim shall be

made a part of the record in the

subsequent claim, provided that it was

not excluded in the adjudication of the

prior claim.

(2) For purposes of this section, the

applicable conditions of entitlement

shall be limited to those conditions

upon which the prior denial was based.

For example, if the claim was denied

solely on the basis that the individual

was not a miner, the subsequent claim

must be denied unless the individual

worked as a miner following the prior

denial. Similarly, if the claim was

denied because the miner did not meet

one or more of the eligibility criteria

contained in part 718 of this subchapter,

the subsequent claim must be denied

unless the miner meets at least one of

the criteria that he or she did not meet

previously.

(3) If the applicable condition(s) of

entitlement relate to the miner’s

physical condition and the new

evidence submitted in connection with

the subsequent claim pursuant to

§ 725.413 of this part establishes at least

one applicable condition of entitlement,

there shall be a rebuttable presumption

that the miner’s physical condition has

changed. The presumption may be

rebutted only if an evaluation of the

record compiled in the prior claim

reveals that the order denying that claim

is clearly erroneous and that the claim

should have been approved as a matter

of law. If the presumption is rebutted,

the claimant shall bear the burden of

proving that his pulmonary or

respiratory condition has significantly

deteriorated since the date upon which

the order denying the prior claim

became final. The provisions of

paragraph (d)(3) shall not be applicable

in the case of a claim filed by a

surviving spouse, child, parent, brother,

or sister.

(4) If the claimant demonstrates a

change in one of the applicable

conditions of entitlement, no findings

made in connection with the prior

claim, except those based on a party’s

failure to contest an issue (see

§ 725.463), shall be binding on any party

in the adjudication of the subsequent

claim. However, any stipulation made

by any party in connection with the

prior claim shall be binding on that

party in the adjudication of the

subsequent claim.

(5) In any case in which a subsequent

claim is awarded, no benefits may be

paid for any period prior to the date

upon which the order denying the prior

claim became final.

(e) Notwithstanding any other

provision of this part or part 727 of this

subchapter (see § 725.4(d)), a person

may exercise the right of review

provided in paragraph (c) of § 727.103 at

the same time such person is pursuing

an appeal of a previously denied part B

claim under the law as it existed prior

to March 1, 1978. If the part B claim is

ultimately approved as a result of the

appeal, the claimant must immediately

notify the Secretary of Labor and, where

appropriate, the coal mine operator, and

all duplicate payments made under part

C shall be considered an overpayment

and arrangements shall be made to

insure the repayment of such

overpayments to the fund or an

operator, as appropriate.

(f) In any case involving more than

one claim filed by the same claimant,

under no circumstances are duplicate

benefits payable for concurrent periods

of eligibility. Any duplicate benefits

paid shall be subject to collection or

offset under subpart H of this part.

§ 725.310 Modification of awards and

denials.

(a) Upon his or her own initiative, or

upon the request of any party on

grounds of a change in conditions or

because of a mistake in a determination

of fact, the district director may, at any

time before one year from the date of the

last payment of benefits, or at any time

before one year after the denial of a

claim, reconsider the terms of an award

or denial of benefits.

(b) Modification proceedings shall be

conducted in accordance with the

provisions of this part as appropriate,

except that the claimant and the

operator, or group of operators or the

fund, as appropriate, shall each be

entitled to submit no more than one

additional pulmonary evaluation or

consultative report, in accordance with

the provisions of § 725.414 of this part,

along with such rebuttal evidence as

may be required. Modification

proceedings shall not be initiated before

an administrative law judge or the

Benefits Review Board.

(c) At the conclusion of modification

proceedings before the district director,

the district director may issue a

proposed decision and order (§ 725.418)

or, if appropriate, deny the claim by

reason of abandonment (§ 725.409). In

any case in which the district director

has initiated modification proceedings

on his own initiative to alter the terms

of an award or denial of benefits issued

by an administrative law judge, the

district director shall, at the conclusion

of modification proceedings, forward

the claim for a hearing (§ 725.421). In

any case forwarded for a hearing, the

administrative law judge assigned to

hear such case shall consider whether

any additional evidence submitted by

the parties demonstrates a change in

condition and, regardless of whether the

parties have submitted new evidence,

whether the evidence of record

demonstrates a mistake in a

determination of fact.

(d) An order issued following the

conclusion of modification proceedings

may terminate, continue, reinstate,

increase or decrease benefit payments or

award benefits. Such order shall not

affect any benefits previously paid,

except that an order increasing the

amount of benefits payable based on a

finding of a mistake in a determination

of fact may be made effective on the

date from which benefits were

determined payable by the terms of an

earlier award. In the case of an award

which is decreased, no payment made

in excess of the decreased rate prior to

the date upon which the party requested

reconsideration under paragraph (a) or,

in a case in which no request was made,

the district director initiated

modification proceedings, shall be

subject to collection or offset under

subpart H of this part. In the case of an

award which is terminated, no payment

made prior to the date upon which the

party requested reconsideration under

paragraph (a) or, in a case in which no

request was made, the district director

initiated modification proceedings, shall

be subject to collection or offset under

subpart H of this part.

§ 725.311 Communications with respect to

claims; time computations.

(a) Unless otherwise specified by this

part, all requests, responses, notices,

decisions, orders, or other

communications required or permitted

by this part shall be in writing.

(b) If required by this part, any

document, brief, or other statement
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submitted in connection with the

adjudication of a claim under this part

shall be sent to each party to the claim

by the submitting party. If proof of

service is required with respect to any

communication, such proof of service

shall be submitted to the appropriate

adjudication officer and filed as part of

the claim record.

(c) In computing any period of time

described in this part, by any applicable

statute, or by the order of any

adjudication officer, the day of the act

or event from which the designated

period of time begins to run shall not be

included. The last day of the period

shall be included unless it is a Saturday,

Sunday, or legal holiday, in which event

the period extends until the next day

which is not a Saturday, Sunday, or

legal holiday. ‘‘Legal holiday’’ includes

New Year’s Day, Birthday of Martin

Luther King, Jr., Washington’s Birthday,

Memorial Day, Independence Day,

Labor Day, Columbus Day, Veterans

Day, Thanksgiving Day, Christmas Day

and any other day appointed as a

holiday by the President or the Congress

of the United States.

(d) In any case in which a provision

of this part requires a document to be

sent to a person or party by certified

mail, and the document is not sent by

certified mail, but the person or party

actually received the document, the

document shall be deemed to have been

sent in compliance with the provisions

of this part. In such a case, any time

period which commences upon the

service of the document shall

commence on the date the document

was received.

Subpart D—Adjudication Officers;

Parties and Representatives

§ 725.350 Who are the adjudication

officers.

(a) General. The persons authorized

by the Secretary of Labor to accept

evidence and decide claims on the basis

of such evidence are called

‘‘adjudication officers.’’ This section

describes the status of black lung claims

adjudication officers.

(b) District Director. The district

director is that official of the DCMWC

or his designee who is authorized to

perform functions with respect to the

development, processing, and

adjudication of claims in accordance

with this part.

(c) Administrative law judge. An

administrative law judge is that official

appointed pursuant to 5 U.S.C. 3105 (or

Public Law 94–504) who is qualified to

preside at hearings under 5 U.S.C. 557

and is empowered by the Secretary to

conduct formal hearings with respect to,

and adjudicate, claims in accordance

with this part. A person appointed

under Public Law 94–504 shall not be

considered an administrative law judge

for purposes of this part for any period

after March 1, 1979.

§ 725.351 Powers of adjudication officers.

(a) District Director. The district

director is authorized to:

(1) Make determinations with respect

to claims as is provided in this part;

(2) Conduct conferences and informal

discovery proceedings as provided in

this part;

(3) Compel the production of

documents by the issuance of a

subpoena, with the written approval of

the Director;

(4) Prepare documents for the

signature of parties;

(5) Issue appropriate orders as

provided in this part; and

(6) Do all other things necessary to

enable him or her to discharge the

duties of the office.

(b) Administrative Law Judge. An

administrative law judge is authorized

to:

(1) Conduct formal hearings in

accordance with the provisions of this

part;

(2) Administer oaths and examine

witnesses;

(3) Compel the production of

documents and appearance of witnesses

by the issuance of subpoenas;

(4) Issue decisions and orders with

respect to claims as provided in this

part; and

(5) Do all other things necessary to

enable him or her to discharge the

duties of the office.

(c) If any person in proceedings before

an adjudication officer disobeys or

resists any lawful order or process, or

misbehaves during a hearing or so near

the place thereof as to obstruct the same,

or neglects to produce, after having been

ordered to do so, any pertinent book,

paper or document, or refuses to appear

after having been subpoenaed, or upon

appearing refuses to take the oath as a

witness, or after having taken the oath

refuses to be examined according to law,

the district director with the approval of

the Director, or the administrative law

judge responsible for the adjudication of

the claim, shall certify the facts to the

Federal district court having jurisdiction

in the place in which he or she is sitting

(or to the U.S. District Court for the

District of Columbia if he or she is

sitting in the District) which shall

thereupon in a summary manner hear

the evidence as to the acts complained

of, and, if the evidence so warrants,

punish such person in the same manner

and to the same extent as for a contempt

committed before the court, or commit

such person upon the same condition as

if the doing of the forbidden act had

occurred with reference to the process

or in the presence of the court.

§ 725.352 Disqualification of adjudication

officer.

(a) No adjudication officer shall

conduct any proceedings in a claim in

which he or she is prejudiced or partial,

or where he or she has any interest in

the matter pending for decision. A

decision to withdraw from the

consideration of a claim shall be within

the discretion of the adjudication

officer. If that adjudication officer

withdraws, another officer shall be

designated by the Director or the Chief

Administrative Law Judge, as the case

may be, to complete the adjudication of

the claim.

(b) No adjudication officer shall be

permitted to appear or act as a

representative of a party under this part

while such individual is employed as an

adjudication officer. No adjudication

officer shall be permitted at any time to

appear or act as a representative in

connection with any case or claim in

which he or she was personally

involved. No fee or reimbursement shall

be awarded under this part to an

individual who acts in violation of this

paragraph.

(c) No adjudication officer shall act in

any claim involving a party which

employed such adjudication officer

within one year before the adjudication

of such claim.

(d) Notwithstanding paragraph (a) of

this section, no adjudication officer

shall be permitted to act in any claim

involving a party who is related to the

adjudication officer by consanguinity or

affinity within the third degree as

determined by the law of the place

where such party is domiciled. Any

action taken by an adjudication officer

in knowing violation of this paragraph

shall be void.

§ 725.360 Parties to proceedings.

(a) Except as provided in § 725.361,

no person other than the Secretary of

Labor and authorized personnel of the

Department of Labor shall participate at

any stage in the adjudication of a claim

for benefits under this part, unless such

person is determined by the appropriate

adjudication officer to qualify under the

provisions of this section as a party to

the claim. The following persons shall

be parties:

(1) The claimant;

(2) A person other than a claimant,

authorized to execute a claim on such

claimant’s behalf under § 725.301;
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(3) Any coal mine operator notified

under § 725.407 of its possible liability

for the claim;

(4) Any insurance carrier of such

operator; and

(5) The Director in all proceedings

relating to a claim for benefits under

this part.

(b) A widow, child, parent, brother, or

sister, or the representative of a

decedent’s estate, who makes a showing

in writing that his or her rights with

respect to benefits may be prejudiced by

a decision of an adjudication officer,

may be made a party.

(c) Any coal mine operator or prior

operator or insurance carrier which has

not been notified under § 725.407 and

which makes a showing in writing that

its rights may be prejudiced by a

decision of an adjudication officer may

be made a party.

(d) Any other individual may be made

a party if that individual’s rights with

respect to benefits may be prejudiced by

a decision to be made.

§ 725.361 Party amicus curiae.

At the discretion of the Chief

Administrative Law Judge or the

administrative law judge assigned to the

case, a person or entity which is not a

party may be allowed to participate

amicus curiae in a formal hearing only

as to an issue of law. A person may

participate amicus curiae in a formal

hearing upon written request submitted

with supporting arguments prior to the

hearing. If the request is granted, the

administrative law judge hearing the

case will inform the party of the extent

to which participation will be

permitted. The request may, however,

be denied summarily and without

explanation.

§ 725.362 Representation of parties.

(a) Except for the Secretary of Labor,

whose interests shall be represented by

the Solicitor of Labor or his or her

designee, each of the parties may

appoint an individual to represent his or

her interest in any proceeding for

determination of a claim under this part.

Such appointment shall be made in

writing or on the record at the hearing.

An attorney qualified in accordance

with § 725.363(a) shall file a written

declaration that he or she is authorized

to represent a party, or declare his or her

representation on the record at a formal

hearing. Any other person (see

§ 725.363(b)) shall file a written notice

of appointment signed by the party or

his or her legal guardian, or enter his or

her appearance on the record at a formal

hearing if the party he or she seeks to

represent is present and consents to the

representation. Any written declaration

or notice required by this section shall

include the OWCP number assigned by

the Office and shall be sent to the Office

or, for representation at a formal

hearing, to the Chief Administrative

Law Judge. In any case, such

representative must be qualified under

§ 725.363. No authorization for

representation or agreement between a

claimant and representative as to the

amount of a fee, filed with the Social

Security Administration in connection

with a claim under part B of title IV of

the Act, shall be valid under this part.

A claimant who has previously

authorized a person to represent him or

her in connection with a claim

originally filed under part B of title IV

may renew such authorization by filing

a statement to such effect with the

Office or appropriate adjudication

officer.

(b) Any party may waive his or her

right to be represented in the

adjudication of a claim. If an

adjudication officer determines, after an

appropriate inquiry has been made, that

a claimant who has been informed of his

or her right to representation does not

wish to obtain the services of a

representative, such adjudication officer

shall proceed to consider the claim in

accordance with this part, unless it is

apparent that the claimant is, for any

reason, unable to continue without the

help of a representative. However, it

shall not be necessary for an

adjudication officer to inquire as to the

ability of a claimant to proceed without

representation in any adjudication

taking place without a hearing. The

failure of a claimant to obtain

representation in an adjudication taking

place without a hearing shall be

considered a waiver of the claimant’s

right to representation. However, at any

time during the processing or

adjudication of a claim, any claimant

may revoke such waiver and obtain a

representative.

§ 725.363 Qualification of representative.

(a) Attorney. Any attorney in good

standing who is admitted to practice

before a court of a State, territory,

district, or insular possession, or before

the Supreme Court of the United States

or other Federal court and is not,

pursuant to any provision of law,

prohibited from acting as a

representative, may be appointed as a

representative.

(b) Other person. With the approval of

the adjudication officer, any other

person may be appointed as a

representative so long as that person is

not, pursuant to any provision of law,

prohibited from acting as a

representative.

§ 725.364 Authority of representative.

A representative, appointed and

qualified as provided in §§ 725.362 and

725.363, may make or give on behalf of

the party he or she represents, any

request or notice relative to any

proceeding before an adjudication

officer, including formal hearing and

review, except that such representative

may not execute a claim for benefits,

unless he or she is a person designated

in § 725.301 as authorized to execute a

claim. A representative shall be entitled

to present or elicit evidence and make

allegations as to facts and law in any

proceeding affecting the party

represented and to obtain information

with respect to the claim of such party

to the same extent as such party. Notice

given to any party of any administrative

action, determination, or decision, or

request to any party for the production

of evidence shall be sent to the

representative of such party and such

notice or request shall have the same

force and effect as if it had been sent to

the party represented.

§ 725.365 Approval of representative’s

fees; lien against benefits.

No fee charged for representation

services rendered to a claimant with

respect to any claim under this part

shall be valid unless approved under

this subpart. No contract or prior

agreement for a fee shall be valid. In

cases where the obligation to pay the

attorney’s fee is upon the claimant, the

amount of the fee awarded may be made

a lien upon the benefits due under an

award and the adjudication officer shall

fix, in the award approving the fee, such

lien and the manner of payment of the

fee. Any representative who is not an

attorney may be awarded a fee for

services under this subpart, except that

no lien may be imposed with respect to

such representative’s fee.

§ 725.366 Fees for representatives.

(a) A representative seeking a fee for

services performed on behalf of a

claimant shall make application therefor

to the district director, administrative

law judge, or appropriate appellate

tribunal, as the case may be, before

whom the services were performed. The

application shall be filed and served

upon the claimant and all other parties

within the time limits allowed by the

district director, administrative law

judge, or appropriate appellate tribunal.

The application shall be supported by a

complete statement of the extent and

character of the necessary work done,

and shall indicate the professional

status (e.g., attorney, paralegal, law

clerk, lay representative or clerical) of

the person performing such work, and
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the customary billing rate for each such

person. The application shall also

include a listing of reasonable

unreimbursed expenses, including those

for travel, incurred by the representative

or an employee of a representative in

establishing the claimant’s case. Any fee

requested under this paragraph shall

also contain a description of any fee

requested, charged, or received for

services rendered to the claimant before

any State or Federal court or agency in

connection with a related matter.

(b) Any fee approved under paragraph

(a) of this section shall be reasonably

commensurate with the necessary work

done and shall take into account the

quality of the representation, the

qualifications of the representative, the

complexity of the legal issues involved,

the level of proceedings to which the

claim was raised, the level at which the

representative entered the proceedings,

and any other information which may

be relevant to the amount of fee

requested. No fee approved shall

include payment for time spent in

preparation of a fee application. No fee

shall be approved for work done on

claims filed between December 30,

1969, and June 30, 1973, under part B

of title IV of the Act, except for services

rendered on behalf of the claimant in

regard to the review of the claim under

section 435 of the Act and part 727 of

this subchapter (see § 725.4(d)).

(c) In awarding a fee, the appropriate

adjudication officer shall consider, and

shall add to the fee, the amount of

reasonable and unreimbursed expenses

incurred in establishing the claimant’s

case. Reimbursement for travel expenses

incurred by an attorney shall be

determined in accordance with the

provisions of § 725.459(a). No

reimbursement shall be permitted for

expenses incurred in obtaining medical

or other evidence which has previously

been submitted to the Office in

connection with the claim.

(d) Upon receipt of a request for

approval of a fee, such request shall be

reviewed and evaluated by the

appropriate adjudication officer and a

fee award issued. Any party may request

reconsideration of a fee awarded by the

adjudication officer. A revised or

modified fee award may then be issued,

if appropriate.

(e) Each request for reconsideration or

review of a fee award shall be in writing

and shall contain supporting statements

or information pertinent to any increase

or decrease requested. If a fee awarded

by a district director is disputed, such

award shall be appealable directly to the

Benefits Review Board. In such a fee

dispute case, the record before the

Board shall consist of the order of the

district director awarding or denying the

fee, the application for a fee, any written

statement in opposition to the fee and

the documentary evidence contained in

the file which verifies or refutes any

item claimed in the fee application.

§ 725.367 Payment of a claimant’s

attorney’s fee by responsible operator or

fund.

(a) An attorney who represents a

claimant in the successful prosecution

of a claim for benefits may be entitled

to collect a reasonable attorney’s fee

from the responsible operator that is

ultimately found liable for the payment

of benefits, or, in a case in which there

is no operator who is liable for the

payment of benefits, from the fund.

Generally, an attorney who represents a

successful claimant may obtain payment

of his or her fee where the operator or

fund, as appropriate, took action, or

acquiesced in action, that created an

adversarial relationship between itself

and the claimant. Circumstances in

which a successful attorney’s fees shall

be payable by the responsible operator

or the fund include, but are not limited

to, the following:

(1) If the responsible operator initially

found to be liable for the payment of

benefits by the district director (see

§ 725.410(a)) contests the claimant’s

eligibility for benefits, either by filing a

response pursuant to § 725.411(b)(1), or,

in a case in which the district director

issues an initial finding that the

claimant is not eligible for benefits, by

failing to file a response. The operator

that is ultimately determined to be

liable for benefits shall be liable for an

attorney’s fee with respect to all

reasonable services performed by the

claimant’s attorney after the date of the

responsible operator’s response or the

date on which it was due, whichever is

earlier;

(2) If there is no operator that may be

held liable for the payment of benefits,

and the district director issues an initial

finding that the claimant is not eligible

for benefits. The fund shall be liable for

an attorney’s fee with respect to all

reasonable services performed by the

claimant’s attorney after the date on

which the district director issued the

initial finding;

(3) If the claimant submits a bill for

medical treatment, and the party liable

for the payment of benefits declines to

pay the bill on the grounds that the

treatment is unreasonable, or is for a

condition that is not compensable. The

responsible operator or fund, as

appropriate, shall be liable for an

attorney’s fee with respect to all

reasonable services performed by the

claimant’s attorney after the date on

which the liable party declined to pay;

(4) If a beneficiary seeks an increase

in the amount of benefits payable, and

the responsible operator or fund issues

a notice of controversion contesting the

claimant’s right to that increase. If the

beneficiary is successful in securing an

increase in the amount of benefits

payable, the operator or fund shall be

liable for an attorney’s fee with respect

to all reasonable services performed by

the beneficiary’s attorney after the date

on which the operator or fund contested

the increase; and

(5) If the responsible operator or fund

seeks a decrease in the amount of

benefits payable. If the beneficiary is

successful in resisting the request for a

decrease in the amount of benefits

payable, the operator or fund shall be

liable for an attorney’s fee with respect

to all reasonable services performed by

the beneficiary’s attorney after the date

of the request by the operator or fund.

A request for information clarifying the

amount of benefits payable shall not be

considered a request to decrease that

amount.

(b) In no event shall an operator or the

fund be liable for the payment of

attorney’s fees with respect to any

services performed prior to the dates

specified in this section.

(c) Any fee awarded under this

section shall be in addition to the award

of benefits, and shall be awarded, in an

order, by the district director,

administrative law judge, Board or

court, before whom the work was

performed. The operator or fund shall

pay such fee promptly and directly to

the claimant’s attorney in a lump sum

after the award of benefits becomes

final.

(d) Section 205(a) of the Black Lung

Benefits Amendments of 1981, Public

Law 97–119, amended section 422 of

the Act and relieved operators and

carriers from liability for the payment of

benefits on certain claims. Payment of

benefits on those claims was made the

responsibility of the fund. The claims

subject to this transfer of liability are

described in § 725.496 of this part. On

claims subject to the transfer of liability

described in this paragraph the fund

will pay all fees and costs which have

been or will be awarded to claimant’s

attorneys which were or would have

become the liability of an operator or

carrier but for the enactment of the 1981

Amendments and which have not

already been paid by such operator or

carrier. Section 9501(d)(7) of the

Internal Revenue Code, which was also

enacted as a part of the 1981

Amendments to the Act, expressly

prohibits the fund from reimbursing an
3400 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

operator or carrier for any attorney fees

or costs which it has paid on cases

subject to the transfer of liability

provisions.

Subpart E—Adjudication of Claims by

the District Director

§ 725.401 Claims development—general.

After a claim has been received by the

district director, the district director

shall take such action as is necessary to

develop, process, and make

determinations with respect to the claim

as provided in this subpart.

§ 725.402 Approved State workers’

compensation law.

If a district director determines that

any claim filed under this part is one

subject to adjudication under a workers’

compensation law approved under part

722 of this subchapter, he or she shall

advise the claimant of this

determination and of the Act’s

requirement that the claim must be filed

under the applicable State workers’

compensation law. The district director

shall then prepare a proposed decision

and order dismissing the claim for lack

of jurisdiction pursuant to § 725.418 and

proceed as appropriate.

§ 725.403 Requirement to file under State

workers’ compensation law—section 415

claims.

(a) No benefits shall be payable to or

on behalf of a claimant who has filed a

claim under section 415 of part B of title

IV of the Act, for any period of

eligibility occurring between July 1, and

December 31, 1973, unless the claimant

has filed and diligently pursued a claim

for benefits under an applicable State

workers’ compensation law. A State

workers’ compensation claim need not

be filed where filing would be futile. It

shall be determined that the filing of a

State claim would be futile when:

(1) The period within which the claim

may be filed under such law has

expired; or

(2) Pneumoconiosis as defined in part

718 of this subchapter is not

compensable under such law; or

(3) The maximum amount of

compensation or the maximum number

of compensation payments allowable

under such law has already been paid;

or

(4) The claimant does not meet one or

more conditions of eligibility for

workers’ compensation payments under

applicable State law; or

(5) The claimant otherwise establishes

to the satisfaction of the Office that the

filing of a claim under State law would

be futile.

(b) Where the Office determines that

a claimant is required to file a State

claim under this section, the Office shall

so notify the claimant. Such notice shall

instruct the claimant to file a State claim

within 30 days of such notice. If no such

State claim is filed within the 30-day

period, no benefits shall be payable

under this part to the claimant for any

period between July 1, and December

31, 1973.

(c) The failure of a claimant to comply

with paragraph (a) of this section shall

not absolve any operator of its liability

for the payment of benefits to a claimant

for periods of eligibility occurring on or

after January 1, 1974.

(d) The district director may

determine that a claimant is ineligible

for benefits under section 415 of part B

of title IV of the Act without requiring

the claimant to file a claim under a State

workers’ compensation law.

§ 725.404 Development of evidence—

general.

(a) Employment history. Each

claimant shall furnish the district

director with a complete and detailed

history of the coal miner’s employment

and, upon request, supporting

documentation.

(b) Matters of record. Where it is

necessary to obtain proof of age,

marriage or termination of marriage,

death, family relationship, dependency

(see subpart B of this part), or any other

fact which may be proven as a matter of

public record, the claimant shall furnish

such proof to the district director upon

request.

(c) Documentary evidence. If a

claimant is required to submit

documents to the district director, the

claimant shall submit either the

original, a certified copy or a clear

readable copy thereof. The district

director or administrative law judge

may require the submission of an

original document or certified copy

thereof, if necessary.

(d) Submission of insufficient

evidence. In the event a claimant

submits insufficient evidence regarding

any matter, the district director shall

inform the claimant of what further

evidence is necessary and request that

such evidence be submitted within a

specified reasonable time which may,

upon request, be extended for good

cause.

§ 725.405 Development of medical

evidence; scheduling of medical

examinations and tests.

(a) Upon receipt of a claim, the

district director shall ascertain whether

the claim was filed by or on account of

a miner as defined in § 725.202, and in

the case of a claim filed on account of

a deceased miner, whether the claim

was filed by an eligible survivor of such

miner as defined in subpart B of this

part.

(b) In the case of a claim filed by or

on behalf of a miner, the district director

shall, where necessary, schedule the

miner for a medical examination and

testing under § 725.406.

(c) In the case of a claim filed by or

on behalf of a survivor of a miner, the

district director shall obtain whatever

medical evidence is necessary and

available for the development and

evaluation of the claim.

(d) The district director shall, where

appropriate, collect other evidence

necessary to establish:

(1) The nature and duration of the

miner’s employment; and

(2) All other matters relevant to the

determination of the claim.

(e) If at any time during the

processing of the claim by the district

director, the evidence establishes that

the claimant is not entitled to benefits

under the Act, the district director may

terminate evidentiary development of

the claim and proceed as appropriate.

§ 725.406 Medical examinations and tests.

(a) The Act requires the Department to

provide each miner who applies for

benefits with the opportunity to

undergo a complete pulmonary

evaluation at no expense to the miner.

A complete pulmonary evaluation

includes a report of physical

examination, a pulmonary function

study, a chest roentgenogram and,

unless medically contraindicated, a

blood gas study.

(b) The district director will arrange

for each miner to be given a complete

pulmonary evaluation by a physician or

medical facility selected by the Office.

The evaluation shall be conducted, if

possible, in the vicinity of the miner’s

residence. The district director will

notify the miner of these arrangements,

and inform the miner that he may select

an alternate physician or facility. The

district director will also inform the

miner of the consequences of selecting

an alternate physician or facility, as

provided by paragraphs (c) and (d) of

this section.

(c) If the miner selects an alternate

physician or facility, the complete

pulmonary evaluation performed under

this section shall count as one of the

two evaluations which the claimant may

submit in support of his claim (see

§ 725.414). If the physician or facility

selected by the miner cannot perform

one or more of the tests which make up

a complete pulmonary evaluation, the

district director will arrange for the

miner to have these tests performed at

a facility selected by the Office prior to
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his examination by the physician or

facility he has selected. A copy of any

such tests shall be provided to the

physician or facility selected by the

miner.

(d) If any medical examination or test

conducted under paragraph (a) of this

section is not administered or reported

in substantial compliance with the

provisions of part 718 of this

subchapter, or does not provide

sufficient information to allow the

district director to decide whether the

miner is eligible for benefits, the district

director shall schedule the miner for

further examination and testing where

necessary and appropriate, provided

that the deficiencies in the report are

not the result of any lack of effort on the

part of the miner. In order to determine

whether any medical examination or

test was administered and reported in

substantial compliance with the

provisions of part 718 of this

subchapter, the district director may

have any component of such

examination or test reviewed by a

physician selected by the district

director. If the miner selected the

physician or facility that performed the

test, the district director shall notify the

miner, and the physician or facility, of

the reasons why the report is not in

substantial compliance with the

provisions of part 718, or does not

provide sufficient information, and shall

allow the miner reasonable additional

time within which to correct any

deficiency.

(e) If, at any time after the completion

of the initial complete pulmonary

evaluation, unresolved medical

questions remain, the district director

may cause the claimant to be examined

by a physician or medical facility

selected by the district director. If

additional medical evidence is obtained

in accordance with this paragraph, the

district director may order the physician

selected to retest or reexamine the miner

to do so without the presence or

participation of any other physician

who previously examined the miner,

and without benefit of the conclusions

of any other physician who has

examined the miner.

(f) The cost of any medical

examination or test authorized under

this section, including the cost of travel

to and from the examination, shall be

paid by the fund. No reimbursement for

overnight accommodations shall be

authorized unless the district director

determines that an adequate testing

facility is unavailable within one day’s

round trip travel by automobile from the

miner’s residence. The fund shall be

reimbursed for such payments by an

operator, if any, found liable for the

payment of benefits to the claimant. If

an operator fails to repay such expenses,

with interest, upon request of the Office,

the entire amount may be collected in

an action brought under section 424 of

the Act and § 725.603 of this part.

§ 725.407 Identification and notification of

responsible operator.

(a) Upon receipt of the miner’s

employment history, the district

director shall investigate whether any

operator may be held liable for the

payment of benefits as a responsible

operator in accordance with the criteria

contained in subpart G of this part.

(b) Prior to issuing an initial finding

pursuant to § 725.410, the district

director may identify one or more

operators potentially liable for the

payment of benefits in accordance with

the criteria set forth in § 725.495 of this

part. The district director shall notify

each such operator of the existence of

the claim. Where the records

maintained by the Office pursuant to

part 726 of this subchapter indicate that

the operator had obtained a policy of

insurance, and the claim falls within

such policy, the notice provided

pursuant to this section shall also be

sent to the operator’s carrier. Any

operator or carrier notified of the claim

shall thereafter be considered a party to

the claim in accordance with § 725.360

of this part unless it is dismissed by an

adjudication officer and is not thereafter

notified again of its potential liability.

(c) The notification issued pursuant to

this section shall include a copy of the

claimant’s application and a copy of all

evidence obtained by the district

director relating to the miner’s

employment. The district director may

request the operator to answer specific

questions, including, but not limited to,

questions related to the nature of its

operations, its relationship with the

miner, its financial status, including any

insurance obtained to secure its

obligations under the Act, and its

relationship with other potentially

liable operators. A copy of any

notification issued pursuant to this

section shall be sent to the claimant by

regular mail.

(d) If at any time before a case is

referred to the Office of Administrative

Law Judges, the district director

determines that an operator which may

be liable for the payment of benefits has

not been notified under this section or

has been incorrectly dismissed pursuant

to § 725.413(c)(1), the district director

shall give such operator notice of its

potential liability in accordance with

this section. The adjudication officer

shall then take such further action on

the claim as may be appropriate. There

shall be no time limit applicable to a

later identification of an operator under

this paragraph if the operator

fraudulently concealed its identity as an

employer of the miner.

§ 725.408 Operator’s response to

notification.

(a)(1) An operator which receives

notification under § 725.407 shall,

within 30 days of receipt, file a

response, and shall indicate its intent to

accept or contest its identification as a

potentially liable operator. The

operator’s response shall also be sent to

the claimant by regular mail.

(2) If the operator contests its

identification, it shall, on a form

supplied by the district director, state

the precise nature of its disagreement by

admitting or denying each of the

following assertions. In answering these

assertions, the term ‘‘operator’’ shall

include any operator for which the

identified operator may be considered a

successor operator pursuant to

§ 725.492.

(i) That the named operator was an

operator for any period after June 30,

1973;

(ii) That the operator employed the

miner as a miner for a cumulative

period of not less than one year;

(iii) That the miner was exposed to

coal mine dust while working for the

operator;

(iv) That the miner’s employment

with the operator included at least one

working day after December 31, 1969;

and

(v) That the operator is capable of

assuming liability for the payment of

benefits.

(3) An operator which receives

notification under § 725.407, and which

fails to file a response within the time

limit provided by this section, shall not

be allowed to contest its liability for the

payment of benefits on the grounds set

forth in paragraph (a)(2).

(b)(1) Within 60 days of the date on

which it receives notification under

§ 725.407, an operator may submit

documentary evidence in support of its

position.

(2) No documentary evidence relevant

to the grounds set forth in paragraph

(a)(2) may be admitted in any further

proceedings unless it is submitted

within the time limits set forth in this

section.

§ 725.409 Denial of a claim by reason of

abandonment.

(a) A claim may be denied at any time

by the district director by reason of

abandonment where the claimant fails:

(1) To undergo a required medical

examination without good cause; or,
3402 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

(2) To submit evidence sufficient to

make a determination of the claim; or,

(3) To pursue the claim with

reasonable diligence; or,

(4) To attend an informal conference

without good cause.

(b) If the district director determines

that a denial by reason of abandonment

is appropriate, he or she shall notify the

claimant of the reasons for such denial

and of the action which must be taken

to avoid a denial by reason of

abandonment. If the claimant completes

the action requested within the time

allowed, the claim shall be developed,

processed and adjudicated as specified

in this part. If the claimant does not

fully comply with the action requested

by the district director, the district

director shall notify the claimant that

the claim has been denied by reason of

abandonment. Any request for a hearing

prior to the issuance of such notification

shall be considered invalid and of no

effect. Such notification shall be served

on the claimant and all other parties to

the claim by certified mail. The denial

shall become effective and final unless,

within 30 days after the denial is issued,

the claimant requests a hearing. If the

claimant timely requests a hearing, the

district director shall refer the case to

the Office of Administrative Law Judges

in accordance with § 725.421. The

hearing will be limited to the issue of

whether the claim was properly denied

by reason of abandonment. Following

the expiration of the 30-day period, a

new claim may be filed at any time

pursuant to § 725.309.

§ 725.410 Initial findings by the district

director.

(a) Based upon the evidence

developed, the district director shall

make an initial finding with respect to

the claim. The initial finding shall

include a determination with respect to

the claimant’s eligibility and a

determination with respect to whether

any of the operators notified of potential

liability under § 725.407 of this part is

the responsible operator in accordance

with § 725.495 of this part.

(b) The district director shall serve the

initial finding, together with a copy of

all of the evidence developed, on the

claimant, the responsible operator, and

all other operators which received

notification pursuant to § 725.407 of this

part. The initial finding shall be served

on each party by certified mail.

(c) If the evidence submitted does not

support a finding of eligibility, the

initial finding shall specify the reasons

why the claim cannot be approved and

the additional evidence necessary to

establish entitlement. The initial finding

shall notify the claimant that he has the

right to obtain further adjudication of

his eligibility in accordance with this

subpart, that he has the right to submit

additional evidence in accordance with

this subpart, and that he has the right to

obtain counsel, under the terms set forth

in subpart D, in order to assist him. The

initial finding shall further notify the

claimant that, if he establishes his

entitlement to benefits, the cost of

obtaining additional evidence, along

with a reasonable attorney’s fee, shall be

reimbursed by the responsible operator,

or, if no operator can be held liable, the

fund.

§ 725.411 Initial finding—eligibility.

(a) Claimant response—(1) Finding

that the claimant is not eligible for

benefits. (i) Within one year after the

district director issues an initial finding

that the claimant is not eligible for

benefits, the claimant may request

further adjudication of the claim. Any

statement filed during the applicable

time period demonstrating the

claimant’s intention to pursue his or her

claim shall be considered a request for

further adjudication in accordance with

this section. The claimant may not

request a hearing at this point. Any

request for a hearing prior to the

issuance of a proposed decision and

order shall be considered invalid and of

no effect.

(ii) If the claimant does not request

further adjudication of the claim within

the time limits set forth in this section,

the claim shall be deemed to have been

denied, effective as of the date of the

issuance of the initial finding. Any

submission by the claimant after the

time limits set forth in this section will

be treated as an intent to file a new

claim for benefits in accordance with

§ 725.305. Such a claim may be

approved only if it meets the conditions

of § 725.309.

(2) Finding that the claimant is

eligible for benefits. If the district

director issues an initial finding that the

evidence submitted supports a finding

of eligibility, the claimant may, within

30 days of the issuance of the initial

finding, request revision of any of the

terms of the initial finding. If the

claimant does not file a timely request

pursuant to this paragraph, he shall be

deemed to have accepted the district

director’s initial finding.

(b) Operator response. (1) Within 30

days of the issuance of an initial

finding, the responsible operator

initially found liable for the payment of

benefits shall file a response with regard

to the claimant’s eligibility for benefits.

The response shall specifically indicate

whether the operator agrees or disagrees

with the initial finding of eligibility. A

response that the operator is not liable

for benefits shall not be sufficient to

contest the claimant’s eligibility under

this section. A response to the initial

finding of eligibility shall be filed

regardless of whether the district

director finds the claimant eligible for

benefits.

(2) If the operator initially found

liable for the payment of benefits does

not file a timely response, it shall be

deemed to have accepted the district

director’s initial finding with respect to

the claimant’s eligibility, and shall not,

except as provided in § 725.463, be

permitted to raise issues or present

evidence with respect to issues

inconsistent with the initial findings in

any further proceeding conducted with

respect to the claim.

§ 725.412 Initial finding-liability.

(a) Within 30 days of the issuance of

an initial finding, the responsible

operator initially found liable for the

payment of benefits shall file a response

with regard to its liability for benefits.

The response shall specifically indicate

whether the operator agrees or disagrees

with the initial finding of liability. A

response that the operator is not liable

for benefits under this section shall not

be sufficient to contest the claimant’s

eligibility. A response to the initial

finding of liability shall be filed

regardless of whether or not the district

director finds the claimant eligible for

benefits.

(b) If the responsible operator initially

found liable for the payment of benefits

does not file a timely response, it shall

be deemed to have accepted the district

director’s initial finding with respect to

its liability, and to have waived its right

to contest its liability in any further

proceeding conducted with respect to

the claim.

§ 725.413 Initial adjudication by the district

director.

(a) If the district director issues an

initial finding that the evidence

submitted supports a finding of

eligibility, and

(1) The responsible operator does not

file a timely response under either

§ 725.411 or § 725.412, or

(2) There is no operator responsible

for the payment of benefits, the district

director shall, after considering any

request filed by the claimant pursuant to

§ 725.411(a)(2), issue a proposed

decision and order in accordance with

§ 725.418.

(b) If the district director issues an

initial finding that the evidence

submitted does not support a finding of

eligibility, and the claimant does not file

a timely response pursuant to § 725.411,
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the claim shall be considered to have

been denied, effective as of the date of

the issuance of the initial finding. Any

later submission by the claimant will be

treated as an intent to file a claim for

benefits in accordance with § 725.305.

Such a claim may be approved only if

it meets the conditions of § 725.309.

(c)(1) In all other cases, the district

director shall, following the expiration

of all applicable time periods for filing

responses, or the receipt of responses,

notify all parties of any responses

received from the claimant and the

responsible operator. The district

director may, in his discretion, dismiss

as parties any of the operators notified

of their potential liability pursuant to

§ 725.407. If the district director

thereafter determines that the

participation of a party dismissed

pursuant to this section is required, he

may once again notify the operator in

accordance with § 725.407(d).

(2) The district director shall notify

the parties of a schedule for submitting

documentary evidence. Such schedule

shall allow the parties not less than 60

days within which to submit evidence

in support of their contentions, and

shall provide not less than an additional

30 days within which the parties may

respond to evidence submitted by other

parties. Any such evidence must meet

the requirements set forth in § 725.414

in order to be admitted into the record.

§ 725.414 Development of evidence.

(a) Medical evidence—(1)(i)

Pulmonary evaluation. For purposes of

this section, a pulmonary evaluation

shall consist of one chest

roentgenogram, one pulmonary function

study, one report of physical

examination, and the results of such

other testing, including arterial blood

gas testing, as the physician who

prepares the report of physical

examination deems necessary to fully

evaluate the claimant’s respiratory and

pulmonary condition. The tests need

not be performed at the same facility,

nor be administered or supervised by

the same physician.

(ii) Consultative report. For purposes

of this section, a consultative report

shall consist of the opinion of a

physician based on a review of any

medical evidence relevant to the miner’s

respiratory or pulmonary condition.

(2) The claimant shall be entitled to

submit the results of up to two

pulmonary evaluations or consultative

reports. If the claimant selected the

physician who prepared the report of

physical examination pursuant to

§ 725.406 of this part, the complete

pulmonary evaluation obtained

pursuant to that section shall be

considered one of the two evaluations or

reports that the claimant may submit.

(3) The Department intends that all

parties to a claim, including all

operators notified of their potential

liability under § 725.407 that have not

been dismissed, shall be bound by a

final adjudication of the claimant’s

eligibility. Accordingly, any operator

notified of its potential liability in

accordance with § 725.407 shall not be

entitled to require the claimant to readjudicate his eligibility in the event the

district director’s initial finding with

respect to the responsible operator is

determined to have been erroneous.

(i) The responsible operator and any

other operators that remain parties to

the case shall collectively be entitled to

obtain and submit the results of no more

than two pulmonary evaluations or

consultative reports. In obtaining such

evaluations, no miner shall be required

to travel more than 100 miles from his

or her place of residence for the purpose

of submitting to a pulmonary evaluation

requested by an operator, unless a trip

of greater distance is authorized in

writing by the district director. If a

miner unreasonably refuses—

(A) To provide the Office or a coal

mine operator with a complete

statement of his or her medical history

and/or to authorize access to his or her

medical records, or

(B) To submit to an evaluation or test

requested by the district director or a

potentially liable operator, the miner’s

claim may be denied by reason of

abandonment (See § 725.409 of this

part).

(ii) In a case in which the district

director has not identified any

potentially liable operators, the district

director shall be entitled to exercise the

rights of a responsible operator under

this section, except that in any case

where the complete pulmonary

evaluation performed pursuant to

§ 725.406 was performed by a physician

selected by the district director, the

evaluation shall be admitted into

evidence, and shall be considered one of

the two evaluations or reports that the

district director may submit.

(iii) Except for the responsible

operator, any operator notified of its

potential liability pursuant to § 725.407,

and which has not been dismissed as a

party by the district director, must

request permission of the district

director to obtain an independent

pulmonary evaluation of the miner, or

to submit a consultative report. Such

permission shall be granted only upon

a showing that the responsible operator

has not undertaken a full development

of the evidence, and that without such

permission, the potentially liable

operator will be unable to secure a full

and fair litigation of the claimant’s

eligibility. In granting such permission,

the district director may take such

action as is necessary to prevent the

miner from undergoing unnecessary

testing, and shall ensure that the record

contains no more than two pulmonary

evaluations or consultative reports

submitted by the parties opposing the

claimant’s eligibility.

(4) Notwithstanding the limitations in

paragraph (a)(3) of this section, any

record of a miner’s hospitalization for a

pulmonary or related disease, medical

treatment for a pulmonary or related

disease, or a biopsy or autopsy may be

received into evidence.

(5) A copy of any documentary

evidence submitted by a party must be

served on all other parties to the claim.

If the claimant is not represented by an

attorney, the district director shall mail

a copy of all documentary evidence

submitted by the claimant to all other

parties to the claim. Following the

development and submission of

affirmative medical evidence, the

parties may submit rebuttal evidence in

accordance with the schedule issued by

the district director. Such rebuttal

evidence shall include no more than

one interpretive opinion with respect to

the results of each component of the

pulmonary evaluations submitted by the

opposing party, and may not include a

third pulmonary evaluation of the

miner.

(6) The district director shall admit

into the record all evidence submitted

in accordance with this section, and

shall also admit the results of any

medical evaluation or review conducted

by a physician selected by the district

director pursuant to § 725.406.

(b) Evidence pertaining to liability. (1)

Except as provided by § 725.408(b)(2),

the potential responsible operator may

submit evidence to demonstrate that it

is not the potentially liable operator that

most recently employed the claimant.

Failure to submit such evidence shall be

deemed an acceptance of the district

director’s initial finding of liability.

(2) Any other party may submit

evidence regarding the liability of the

potential responsible operator or any

other operator.

(3) A copy of any documentary

evidence submitted under this

paragraph must be mailed to all other

parties to the claim. Following the

submission of affirmative evidence, the

parties may submit rebuttal evidence in

accordance with the schedule issued by

the district director.

(c) Testimony. The claimant, and any

person who prepared documentary

evidence submitted pursuant to this
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section, may testify at any formal

hearing conducted in accordance with

subpart F of this part with respect to the

claim. In accordance with the schedule

issued by the district director, all parties

shall notify the district director of the

name and current address of any other

witness that the party intends to call at

such hearing. No testimony by any

witness who is not identified as a

witness in accordance with this section

shall be admitted in any hearing

conducted with respect to the claim.

(d) Except to the extent permitted by

§ 725.456, no documentary evidence

shall be admitted in any further

proceeding conducted with respect to a

claim unless it is submitted to the

district director in accordance with this

section.

§ 725.415 Action by the district director

after development of operator’s evidence.

(a) At the end of the period permitted

under § 725.413(c)(2) for the submission

of evidence, the district director shall

review the claim on the basis of all

evidence submitted in accordance with

§ 725.414.

(b) After review of all evidence

submitted, the district director may

schedule a conference in accordance

with § 725.416, issue a proposed

decision and order in accordance with

§ 725.418, or take such other action as

the district director considers

appropriate.

§ 725.416 Conferences.

(a) At the conclusion of the period

permitted by § 725.413(c)(2) for the

submission of evidence, the district

director may conduct an informal

conference in any claim where it

appears that such conference will assist

in the voluntary resolution of any issue

raised with respect to the claim. The

conference proceedings shall not be

stenographically reported and sworn

testimony shall not be taken.

(b) The district director shall notify

the parties of a definite time and place

for the conference and may in his or her

discretion, or on the motion of any

party, cancel or reschedule a

conference.

(c) The unexcused failure of any party

to appear at an informal conference

shall be grounds for the imposition of

sanctions. If the claimant fails to appear,

the district director may take such steps

as are authorized by § 725.409 to deny

the claim by reason of abandonment. If

the responsible operator fails to appear,

it shall be deemed to have waived its

right to contest its potential liability for

an award of benefits and, in the

discretion of the district director, its

right to contest any issue related to the

claimant’s eligibility.

(d) Any representative of an operator,

of an operator’s insurance carrier, or of

a claimant, authorized to represent such

party in accordance with § 725.362,

shall be deemed to have sufficient

authority to stipulate facts or issues or

agree to a final disposition of the claim.

(e) Procedures to be followed at a

conference shall be within the

discretion of the district director. In the

case of a conference involving an

unrepresented claimant, the district

director shall fully inform the claimant

of the consequences of any agreement

the claimant is asked to sign. If it is

apparent that the unrepresented

claimant does not understand the nature

or effect of the proceedings, the district

director shall not permit the execution

of any stipulation or agreement in the

claim unless it is clear that the best

interests of the claimant are served

thereby.

§ 725.417 Action at the conclusion of

conference.

(a) At the conclusion of a conference,

the district director shall prepare a

stipulation of contested and

uncontested issues which shall be

signed by the parties and the district

director. If a hearing is conducted with

respect to the claim, this stipulation

shall be submitted to the Office of

Administrative Law Judges and placed

in the claim record.

(b) In any case, where appropriate, the

district director may permit a reasonable

time for the submission of additional

evidence following a conference,

provided that such evidence does not

exceed the limits set forth in § 725.414.

(c) Within 20 days after the

termination of all conference

proceedings, the district director shall

prepare and send to the parties by

certified mail a memorandum of

conference, on a form prescribed by the

Office, summarizing the conference and

including the following:

(1) Date, time and place of conference;

(2) Names, addresses, telephone

numbers, and status (i.e., claimant,

attorney, operator, carrier’s

representative, etc.);

(3) Issues discussed at conference;

(4) Additional material presented (i.e.,

medical reports, employment reports,

marriage certificates, birth certificates,

etc.);

(5) Issues resolved at conference; and

(6) District director’s

recommendation.

(d) Each party shall, in writing, either

accept or reject, in whole or in part, the

district director’s recommendation,

stating the reasons for such rejection. If

no reply is received within 30 days from

the date on which the recommendation

was sent to parties, the recommendation

shall be deemed accepted.

§ 725.418 Proposed decision and order.

(a) After evaluating the parties’

responses to the district director’s

recommendation pursuant to § 725.417,

or, if no informal conference is to be

held, at the conclusion of the period

permitted by § 725.413(c)(2) for the

submission of evidence, the district

director shall issue a proposed decision

and order. A proposed decision and

order is a document, issued by the

district director after the evidentiary

development of the claim is completed

and all contested issues, if any, are

joined, which purports to resolve a

claim on the basis of the evidence

submitted to or obtained by the district

director. A proposed decision and order

shall be considered a final adjudication

of a claim only as provided in § 725.419.

A proposed decision and order may be

issued by the district director in any

claim and at any time during the

adjudication of a claim if:

(1) Issuance is authorized or required

by this part; or,

(2) The district director determines

that its issuance will expedite the

adjudication of the claim.

(b) A proposed decision and order

shall contain findings of fact and

conclusions of law and an appropriate

order shall be served on all parties to

the claim by certified mail.

§ 725.419 Response to proposed decision

and order.

(a) Within 30 days after the date of

issuance of a proposed decision and

order, any party may, in writing, request

a revision of the proposed decision and

order or a hearing. If a hearing is

requested, the district director shall

refer the claim to the Office of

Administrative Law Judges (see

§ 725.421).

(b) Any response made by a party to

a proposed decision and order shall

specify the findings and conclusions

with which the responding party

disagrees, and shall be served on the

district director and all other parties to

the claim.

(c) If a timely request for revision of

a proposed decision and order is made,

the district director may amend the

proposed decision and order, as

circumstances require, and serve the

revised proposed decision and order on

all parties or take such other action as

is appropriate. If a revised proposed

decision and order is issued, each party

to the claim shall have 30 days from the

date of issuance of that revised
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3405

proposed decision and order within

which to request a hearing.

(d) If no response to a proposed

decision and order is sent to the district

director within the period described in

paragraph (a) of this section, or if no

response to a revised proposed decision

and order is sent to the district director

within the period described in

paragraph (c) of this section, the

proposed decision and order shall

become a final decision and order,

which is effective upon the expiration of

the applicable 30-day period. Once a

proposed decision and order or revised

proposed decision and order becomes

final and effective, all rights to further

proceedings with respect to the claim

shall be considered waived, except as

provided in § 725.310.

§ 725.420 Initial determinations.

(a) Section 9501(d)(1)(A)(1) of the

Internal Revenue Code provides that the

Black Lung Disability Trust Fund shall

begin the payment of benefits on behalf

of an operator in any case in which the

operator liable for such payments has

not commenced payment of such

benefits within 30 days after the date of

an initial determination of eligibility by

the Secretary. For claims filed on or

after January 1, 1982, the payment of

such interim benefits from the fund is

limited to benefits accruing after the

date of such initial determination.

(b) Except as provided in § 725.415 of

this subpart, after the district director

has determined that a claimant is

eligible for benefits, on the basis of all

evidence submitted by a claimant and

operator, and has determined that a

hearing will be necessary to resolve the

claim, the district director shall in

writing so inform the parties and direct

the operator to begin the payment of

benefits to the claimant in accordance

with § 725.522. The date on which this

writing is sent to the parties shall be

considered the date of initial

determination of the claim.

(c) If a notified operator refuses to

commence payment of a claim within

30 days from the date on which an

initial determination is made under this

section, benefits shall be paid by the

fund to the claimant in accordance with

§ 725.522, and the operator shall be

liable to the fund, if such operator is

determined liable for the claim, for all

benefits paid by the fund on behalf of

such operator, and, in addition, such

penalties and interest as are appropriate.

§ 725.421 Referral of a claim to the Office

of Administrative Law Judges.

(a) In any claim for which a formal

hearing is requested or ordered, and

with respect to which the district

director has completed development

and adjudication without having

resolved all contested issues in the

claim, the district director shall refer the

claim to the Office of Administrative

Law Judges for a hearing.

(b) In any case referred to the Office

of Administrative Law Judges under this

section, the district director shall

transmit to that office the following

documents, which shall be placed in the

record at the hearing subject to the

objection of any party:

(1) Copies of the claim form or forms;

(2) Any statement, document, or

pleading submitted by a party to the

claim;

(3) A copy of the notification to an

operator of its possible liability for the

claim;

(4) All evidence submitted to the

district director under this part;

(5) Any written stipulation of law or

fact or stipulation of contested and

uncontested issues entered into by the

parties;

(6) Any pertinent forms submitted to

the district director;

(7) The statement by the district

director of contested and uncontested

issues in the claim; and

(8) The district director’s initial

determination of eligibility or other

documents necessary to establish the

right of the fund to reimbursement, if

appropriate. Copies of the transmittal

notice shall also be sent to all parties to

the claim by regular mail.

(c) A party may at any time request

and obtain from the district director

copies of documents transmitted to the

Office of Administrative Law Judges

under paragraph (b) of this section. If

the party has previously been provided

with such documents, additional copies

may be sent to the party upon the

payment of a copying fee to be

determined by the district director.

§ 725.422 Legal assistance.

The Secretary or his or her designee

may, upon request, provide a claimant

with legal assistance in processing a

claim under the Act. Such assistance

may be made available to a claimant in

the discretion of the Solicitor of Labor

or his or her designee at any time prior

to or during the time in which the claim

is being adjudicated and shall be

furnished without charge to the

claimant. Representation of a claimant

in adjudicatory proceedings shall not be

provided by the Department of Labor

unless it is determined by the Solicitor

of Labor that such representation is in

the best interests of the black lung

benefits program. In no event shall

representation be provided to a claimant

in a claim with respect to which the

claimant’s interests are adverse to those

of the Secretary of Labor or the fund.

§ 725.423 Extensions of time.

Except for the one-year time limit set

forth in § 725.411(a)(1)(i) and the 30-day

time limit set forth in § 725.419, any of

the time periods set forth in this subpart

may be extended, for good cause shown,

by filing a request for an extension with

the district director prior to the

expiration of the time period.

Subpart F—Hearings

§ 725.450 Right to a hearing.

Any party to a claim (see § 725.360)

shall have a right to a hearing

concerning any contested issue of fact or

law unresolved by the district director.

There shall be no right to a hearing until

the processing and adjudication of the

claim by the district director has been

completed. There shall be no right to a

hearing in a claim with respect to which

a determination of the claim made by

the district director has become final

and effective in accordance with this

part.

§ 725.451 Request for hearing.

After the completion of proceedings

before the district director, or as is

otherwise indicated in this part, any

party may in writing request a hearing

on any contested issue of fact or law

(see § 725.419). A district director may

on his or her own initiative refer a case

for hearing. If a hearing is requested, or

if a district director determines that a

hearing is necessary to the resolution of

any issue, the claim shall be referred to

the Chief Administrative Law Judge for

a hearing under § 725.421.

§ 725.452 Type of hearing; parties.

(a) A hearing held under this part

shall be conducted by an administrative

law judge designated by the Chief

Administrative Law Judge. Except as

otherwise provided by this part, all

hearings shall be conducted in

accordance with the provisions of 5

U.S.C. 554 et seq.

(b) All parties to a claim shall be

permitted to participate fully at a

hearing held in connection with such

claim.

(c) A full evidentiary hearing need not

be conducted if a party moves for

summary judgment and the

administrative law judge determines

that there is no genuine issue as to any

material fact and that the moving party

is entitled to the relief requested as a

matter of law. All parties shall be

entitled to respond to the motion for

summary judgment prior to decision

thereon.
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(d) If the administrative law judge

believes that an oral hearing is not

necessary (for any reason other than on

motion for summary judgment), the

judge shall notify the parties by written

order and allow at least 30 days for the

parties to respond. The administrative

law judge shall hold the oral hearing if

any party makes a timely request in

response to the order.

§ 725.453 Notice of hearing.

All parties shall be given at least 30

days written notice of the date and place

of a hearing and the issues to be

resolved at the hearing. Such notice

shall be sent to each party or

representative by certified mail.

§ 725.454 Time and place of hearing;

transfer of cases.

(a) The Chief Administrative Law

Judge shall assign a definite time and

place for a formal hearing, and shall,

where possible, schedule the hearing to

be held at a place within 75 miles of the

claimant’s residence unless an alternate

location is requested by the claimant.

(b) If the claimant’s residence is not

in any State, the Chief Administrative

Law Judge may, in his or her discretion,

schedule the hearing in the country of

the claimant’s residence.

(c) The Chief Administrative Law

Judge or the administrative law judge

assigned the case may in his or her

discretion direct that a hearing with

respect to a claim shall begin at one

location and then later be reconvened at

another date and place.

(d) The Chief Administrative Law

Judge or administrative law judge

assigned the case may change the time

and place for a hearing, either on his or

her own motion or for good cause

shown by a party. The administrative

law judge may adjourn or postpone the

hearing for good cause shown, at any

time prior to the mailing to the parties

of the decision in the case. Unless

otherwise agreed, at least 10 days notice

shall be given to the parties of any

change in the time or place of hearing.

(e) The Chief Administrative Law

Judge may for good cause shown

transfer a case from one administrative

law judge to another.

§ 725.455 Hearing procedures; generally.

(a) General. The purpose of any

hearing conducted under this subpart

shall be to resolve contested issues of

fact or law. Except as provided in

§ 725.421(b)(8), any findings or

determinations made with respect to a

claim by a district director shall not be

considered by the administrative law

judge.

(b) Evidence. The administrative law

judge shall at the hearing inquire fully

into all matters at issue, and shall not

be bound by common law or statutory

rules of evidence, or by technical or

formal rules of procedure, except as

provided by 5 U.S.C. 554 and this

subpart. The administrative law judge

shall receive into evidence the

testimony of the witnesses and parties,

the evidence submitted to the Office of

Administrative Law Judges by the

district director under § 725.421, and

such additional evidence as may be

submitted in accordance with the

provisions of this subpart. The

administrative law judge may entertain

the objections of any party to the

evidence submitted under this section.

(c) Procedure. The conduct of the

hearing and the order in which

allegations and evidence shall be

presented shall be within the discretion

of the administrative law judge and

shall afford the parties an opportunity

for a fair hearing.

(d) Oral argument and written

allegations. The parties, upon request,

may be allowed a reasonable time for

the presentation of oral argument at the

hearing. Briefs or other written

statements or allegations as to facts or

law may be filed by any party with the

permission of the administrative law

judge. Copies of any brief or other

written statement shall be filed with the

administrative law judge and served on

all parties by the submitting party.

§ 725.456 Introduction of documentary

evidence.

(a) All documents transmitted to the

Office of Administrative Law Judges

under § 725.421 shall be placed into

evidence by the administrative law

judge, subject to objection by any party.

(b) Documentary evidence which is

obtained by any party either after the

district director forwards the claim to

the Office of Administrative Law Judges

or in excess of the limitations contained

in § 725.414 shall not be admitted into

the hearing record in the absence of

extraordinary circumstances (see

§ 725.414(d)).

(c) Subject to paragraph (b) of this

section, documentary evidence which

the district director excludes from the

record, and the objections to such

evidence, may be submitted by the

parties to the administrative law judge,

who shall independently determine

whether the evidence shall be admitted.

(1) If the evidence is admitted, the

administrative law judge may, in his or

her discretion, remand the claim to the

district director for further

consideration.

(2) If the evidence is admitted, the

administrative law judge shall afford the

opposing party or parties the

opportunity to develop such additional

documentary evidence as is necessary to

protect the right of cross-examination.

(d) All medical records and reports

submitted by any party shall be

considered by the administrative law

judge in accordance with the quality

standards contained in part 718 of this

subchapter.

(e) If the administrative law judge

concludes that the complete pulmonary

evaluation provided pursuant to

§ 725.406, or any part thereof, fails to

comply with the applicable quality

standards, or fails to address the

relevant conditions of entitlement (see

§ 725.202(d)(2) (i) through (iv)) in a

manner which permits resolution of the

claim, and such evaluation or part

thereof was performed by a physician or

facility selected by the Office, the

administrative law judge shall, in his or

her discretion, remand the claim to the

district director with instructions to

develop only such additional evidence

as is required, or allow the parties a

reasonable time to obtain and submit

such evidence, before the termination of

the hearing.

§ 725.457 Witnesses.

(a) Witnesses at the hearing shall

testify under oath or affirmation. The

administrative law judge and the parties

may question witnesses with respect to

any matters relevant and material to any

contested issue. Any party who intends

to present the testimony of an expert

witness at a hearing shall so notify all

other parties to the claim at least 10

days before the hearing. The failure to

give notice of the appearance of an

expert witness in accordance with this

paragraph, unless notice is waived by

all parties, shall preclude the

presentation of testimony by such

expert witness.

(b) No person shall be required to

appear as a witness in any proceeding

before an administrative law judge at a

place more than 100 miles from his or

her place of residence, unless the lawful

mileage and witness fee for 1 day’s

attendance is paid in advance of the

hearing date.

(c) No person shall be permitted to

testify as a witness at the hearing unless

that person:

(1) Prepared documentary evidence

which was submitted to the district

director pursuant to § 725.414 (a) or (b),

or

(2) Was identified as a potential

hearing witness while the claim was

pending before the district director in

accordance with § 725.414(c), or

(3) Prepared documentary evidence

which was admitted by the
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administrative law judge pursuant to

§ 725.456.

(d) Notwithstanding paragraph (c)(2)

of this section, no physician shall be

permitted to testify as a witness at the

hearing unless he has prepared a

medical report which is entered into

evidence. A physician shall be

permitted to testify only with respect to

the contents of the report or reports he

has prepared.

§ 725.458 Depositions; interrogatories.

The testimony of any witness or party

may be taken by deposition or

interrogatory according to the rules of

practice of the Federal district court for

the judicial district in which the case is

pending (or of the U.S. District Court for

the District of Columbia if the case is

pending in the District or outside the

United States), except that at least 30

days prior notice of any deposition shall

be given to all parties unless such notice

is waived. No post-hearing deposition or

interrogatory shall be permitted unless

authorized by the administrative law

judge upon the motion of a party to the

claim. The testimony of any physician

which is taken by deposition shall be

subject to the limitations on the scope

of the testimony contained in

§ 725.457(d).

§ 725.459 Witness fees.

(a) A witness testifying at a hearing

before an administrative law judge, or

whose deposition is taken, shall receive

the same fees and mileage as witnesses

in courts of the United States. If the

witness is an expert, he or she shall be

entitled to an expert witness fee. Except

as provided in paragraphs (b) and (c) of

this section, such fees shall be paid by

the proponent of the witness.

(b) If the witness’ proponent does not

intend to call the witness to appear at

hearing or deposition, any other party

may subpoena the witness for crossexamination. If such witness is required

to attend the hearing, give a deposition

or respond to interrogatories for crossexamination purposes, the subpoenaing

party shall pay the witness’ fee. If the

witness’ proponent does call the witness

to testify as part of its case, then crossexamination of that witness by any

other party will not shift liability for

fees and costs from the proponent to the

other party or parties.

(c) If a claimant is determined entitled

to benefits, there may be assessed as

costs against a responsible operator, if

any, or the fund, fees and mileage for

necessary witnesses attending the

hearing at the request of the claimant.

Both the necessity for the witness and

the reasonableness of the fees of any

expert witness shall be approved by the

administrative law judge. The amounts

awarded against a responsible operator

or the fund as attorney’s fees, or costs,

fees and mileage for witnesses, shall not

in any respect affect or diminish

benefits payable under the Act.

§ 725.460 Consolidated hearings.

When two or more hearings are to be

held, and the same or substantially

similar evidence is relevant and

material to the matters at issue at each

such hearing, the Chief Administrative

Law Judge may, upon motion by any

party or on his or her own motion, order

that a consolidated hearing be

conducted. Where consolidated

hearings are held, a single record of the

proceedings shall be made and the

evidence introduced in one claim may

be considered as introduced in the

others, and a separate or joint decision

shall be made, as appropriate.

§ 725.461 Waiver of right to appear and

present evidence.

(a) If all parties waive their right to

appear before the administrative law

judge, it shall not be necessary for the

administrative law judge to give notice

of, or conduct, an oral hearing. A waiver

of the right to appear shall be made in

writing and filed with the Chief

Administrative Law Judge or the

administrative law judge assigned to

hear the case. Such waiver may be

withdrawn by a party for good cause

shown at any time prior to the mailing

of the decision in the claim. Even

though all of the parties have filed a

waiver of the right to appear, the

administrative law judge may,

nevertheless, after giving notice of the

time and place, conduct a hearing if he

or she believes that the personal

appearance and testimony of the party

or parties would assist in ascertaining

the facts in issue in the claim. Where a

waiver has been filed by all parties, and

they do not appear before the

administrative law judge personally or

by representative, the administrative

law judge shall make a record of the

relevant documentary evidence

submitted in accordance with this part

and any further written stipulations of

the parties. Such documents and

stipulations shall be considered the

evidence of record in the case and the

decision shall be based upon such

evidence.

(b) Except as provided in § 725.456(a),

the unexcused failure of any party to

attend a hearing shall constitute a

waiver of such party’s right to present

evidence at the hearing, and may result

in a dismissal of the claim (see

§ 725.465).

§ 725.462 Withdrawal of controversion of

issues set for formal hearing; effect.

A party may, on the record, withdraw

his or her controversion of any or all

issues set for hearing. If a party

withdraws his or her controversion of

all issues, the administrative law judge

shall remand the case to the district

director for the issuance of an

appropriate order.

§ 725.463 Issues to be resolved at hearing;

new issues.

(a) Except as otherwise provided in

this section, the hearing shall be

confined to those contested issues

which have been identified by the

district director (see § 725.421) or any

other issue raised in writing before the

district director.

(b) An administrative law judge may

consider a new issue only if such issue

was not reasonably ascertainable by the

parties at the time the claim was before

the district director. Such new issue

may be raised upon application of any

party, or upon an administrative law

judge’s own motion, with notice to all

parties, at any time after a claim has

been transmitted by the district director

to the Office of Administrative Law

Judges and prior to decision by an

administrative law judge. If a new issue

is raised, the administrative law judge

may, in his or her discretion, either

remand the case to the district director

with instructions for further

proceedings, hear and resolve the new

issue, or refuse to consider such new

issue.

(c) If a new issue is to be considered

by the administrative law judge, a party

may, upon request, be granted an

appropriate continuance.

§ 725.464 Record of hearing.

All hearings shall be open to the

public and shall be mechanically or

stenographically reported. All evidence

upon which the administrative law

judge relies for decision shall be

contained in the transcript of testimony,

either directly or by appropriate

reference. All medical reports, exhibits,

and any other pertinent document or

record, either in whole or in material

part, introduced as evidence, shall be

marked for identification and

incorporated into the record.

§ 725.465 Dismissals for cause.

(a) The administrative law judge may,

at the request of any party, or on his or

her own motion, dismiss a claim:

(1) Upon the failure of the claimant or

his or her representative to attend a

hearing without good cause;

(2) Upon the failure of the claimant to

comply with a lawful order of the

administrative law judge; or
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(3) Where there has been a prior final

adjudication of the claim or defense to

the claim under the provisions of this

subchapter and no new evidence is

submitted (except as provided in part

727 of this subchapter; see § 725.4(d)).

(b) A party who is not a proper party

to the claim (see § 725.360) shall be

dismissed by the administrative law

judge.

(c) In any case where a dismissal of

a claim, defense, or party is sought, the

administrative law judge shall issue an

order to show cause why the dismissal

should not be granted and afford all

parties a reasonable time to respond to

such order. After the time for response

has expired, the administrative law

judge shall take such action as is

appropriate to rule on the dismissal,

which may include an order dismissing

the claim, defense or party.

(d) No claim shall be dismissed in a

case with respect to which payments

prior to final adjudication have been

made to the claimant in accordance

with § 725.522, except upon the motion

or written agreement of the Director.

§ 725.466 Order of dismissal.

(a) An order dismissing a claim shall

be served on the parties in accordance

with § 725.478. The dismissal of a claim

shall have the same effect as a decision

and order disposing of the claim on its

merits, except as provided in paragraph

(b) of this section. Such order shall

advise the parties of their right to

request review by the Benefits Review

Board.

(b) Where the Chief Administrative

Law Judge or the presiding

administrative law judge issues a

decision and order dismissing the claim

after a show cause proceeding, the

district director shall terminate any

payments being made to the claimant

under § 725.522, and the order of

dismissal shall, if appropriate, order the

claimant to reimburse the fund for all

benefits paid to the claimant.

§ 725.475 Termination of hearings.

Hearings are officially terminated

when all the evidence has been

received, witnesses heard, pleadings

and briefs submitted to the

administrative law judge, and the

transcript of the proceedings has been

printed and delivered to the

administrative law judge.

§ 725.476 Issuance of decision and order.

Within 20 days after the official

termination of the hearing (see

§ 725.475), the administrative law judge

shall issue a decision and order with

respect to the claim making an award to

the claimant, rejecting the claim, or

taking such other action as is

appropriate.

§ 725.477 Form and contents of decision

and order.

(a) Orders adjudicating claims for

benefits shall be designated by the term

‘‘decision and order’’ or ‘‘supplemental

decision and order’’ as appropriate,

followed by a descriptive phrase

designating the particular type of order,

such as ‘‘award of benefits,’’ ‘‘rejection

of claim,’’ ‘‘suspension of benefits,’’

‘‘modification of award.’’

(b) A decision and order shall contain

a statement of the basis of the order, the

names of the parties, findings of fact,

conclusions of law, and an award,

rejection or other appropriate paragraph

containing the action of the

administrative law judge, his or her

signature and the date of issuance. A

decision and order shall be based upon

the record made before the

administrative law judge.

§ 725.478 Filing and service of decision

and order.

On the date of issuance of a decision

and order under § 725.477, the

administrative law judge shall serve the

decision and order on all parties to the

claim by certified mail. On the same

date, the original record of the claim

shall be sent to the DCMWC in

Washington, D.C. Upon receipt by the

DCMWC, the decision and order shall

be considered to be filed in the office of

the district director, and shall become

effective on that date.

§ 725.479 Finality of decisions and orders.

(a) A decision and order shall become

effective when filed in the office of the

district director (see § 725.478), and

unless proceedings for suspension or

setting aside of such order are instituted

within 30 days of such filing, the order

shall become final at the expiration of

the 30th day after such filing (see

§ 725.481).

(b) Any party may, within 30 days

after the filing of a decision and order

under § 725.478, request a

reconsideration of such decision and

order by the administrative law judge.

The procedures to be followed in the

reconsideration of a decision and order

shall be determined by the

administrative law judge.

(c) The time for appeal to the Benefits

Review Board shall be suspended

during the consideration of a request for

reconsideration. After the

administrative law judge has issued and

filed a denial of the request for

reconsideration, or a revised decision

and order in accordance with this part,

any dissatisfied party shall have 30 days

within which to institute proceedings to

set aside the decision and order on

reconsideration.

(d) Regardless of any defect in service,

actual receipt of the decision is

sufficient to commence the 30-day

period for requesting reconsideration or

appealing the decision.

§ 725.480 Modification of decisions and

orders.

A party who is dissatisfied with a

decision and order which has become

final in accordance with § 725.479 may

request a modification of the decision

and order if the conditions set forth in

§ 725.310 are met.

§ 725.481 Right to appeal to the Benefits

Review Board.

Any party dissatisfied with a decision

and order issued by an administrative

law judge may, before the decision and

order becomes final (see § 725.479),

appeal the decision and order to the

Benefits Review Board. A notice of

appeal shall be filed with the Board.

Proceedings before the Board shall be

conducted in accordance with part 802

of this title.

§ 725.482 Judicial review.

(a) Any person adversely affected or

aggrieved by a final order of the Benefits

Review Board may obtain a review of

that order in the U.S. court of appeals

for the circuit in which the injury

occurred by filing in such court within

60 days following the issuance of such

Board order a written petition praying

that the order be modified or set aside.

The payment of the amounts required

by an award shall not be stayed pending

final decision in any such proceeding

unless ordered by the court. No stay

shall be issued unless the court finds

that irreparable injury would otherwise

ensue to an operator or carrier.

(b) The Director, Office of Workers’

Compensation Program, as designee of

the Secretary of Labor responsible for

the administration and enforcement of

the Act, shall be considered the proper

party to appear and present argument on

behalf of the Secretary of Labor in all

review proceedings conducted pursuant

to this part and the Act, either as

petitioner or respondent.

§ 725.483 Costs in proceedings brought

without reasonable grounds.

If a United States court having

jurisdiction of proceedings regarding

any claim or final decision and order,

determines that the proceedings have

been instituted or continued before such

court without reasonable ground, the

costs of such proceedings shall be

assessed against the party who has so
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3409

instituted or continued such

proceedings.

Subpart G—Responsible Coal Mine

Operators

General Provisions

§ 725.490 Statutory provisions and scope.

(a) One of the major purposes of the

black lung benefits amendments of 1977

was to provide a more effective means

of transferring the responsibility for the

payment of benefits from the Federal

government to the coal industry with

respect to claims filed under this part.

In furtherance of this goal, a Black Lung

Disability Trust Fund financed by the

coal industry was established by the

Black Lung Benefits Revenue Act of

1977. The primary purpose of the Fund

is to pay benefits with respect to all

claims in which the last coal mine

employment of the miner on whose

account the claim was filed occurred

before January 1, 1970. With respect to

most claims in which the miner’s last

coal mine employment occurred after

January 1, 1970, individual coal mine

operators will be liable for the payment

of benefits. The 1981 amendments to the

Act relieved individual coal mine

operators from the liability for payment

of certain special claims involving coal

mine employment on or after January 1,

1970, where the claim was previously

denied and subsequently approved

under section 435 of the Act. See

§ 725.496 for a detailed description of

these special claims. Where no such

operator exists or the operator

determined to be liable is in default in

any case, the fund shall pay the benefits

due and seek reimbursement as is

appropriate. See also § 725.420 for the

fund’s role in the payment of interim

benefits in certain contested cases. In

addition, the Black Lung Benefits

Reform Act of 1977 amended certain

provisions affecting the scope of

coverage under the Act and describing

the effects of particular corporate

transactions on the liability of operators.

(b) The provisions of this subpart

define the term ‘‘operator’’ and

prescribe the manner in which the

identity of an operator which may be

liable for the payment of benefits—

referred to herein as a ‘‘responsible

operator’’—will be determined.

§ 725.491 Operator defined.

(a) For purposes of this part, the term

‘‘operator’’ shall include:

(1) Any owner, lessee, or other person

who operates, controls, or supervises a

coal mine, or any independent

contractor performing services or

construction at such mine; or

(2) Any other person who:

(i) Employs an individual in the

transportation of coal or in coal mine

construction in or around a coal mine,

to the extent such individual was

exposed to coal dust as a result of such

employment (see § 725.202);

(ii) In accordance with the provisions

of § 725.492, may be considered a

successor operator; or

(iii) Paid wages or a salary, or

provided other benefits, to an individual

in exchange for work as a miner (see

§ 725.202).

(b) The terms ‘‘owner,’’ ‘‘lessee,’’ and

‘‘person’’ shall include any individual,

partnership, association, corporation,

firm, subsidiary of a corporation, or

other organization, as appropriate,

except that an officer of a corporation

shall not be considered an ‘‘operator’’

for purposes of this part. Following the

issuance of an order awarding benefits

against a corporation that has not

secured its liability for benefits in

accordance with section 423 of the Act

and § 726.4, such order may be enforced

against the president, secretary, or

treasurer of the corporation in

accordance with subpart I of this part.

(c) The term ‘‘independent

contractor’’ shall include any person

who contracts to perform services. Such

contractor’s status as an operator shall

not be contingent upon the amount or

percentage of its work or business

related to activities in or around a mine,

nor upon the number or percentage of

its employees engaged in such activities.

(d) For the purposes of determining

whether a person is or was an operator

that may be found liable for the

payment of benefits under this part,

there shall be a rebuttable presumption

that during the course of an individual’s

employment with such employer, such

individual was regularly and

continuously exposed to coal dust

during the course of employment. The

presumption may be rebutted by a

showing that the employee was not

exposed to coal dust for significant

periods during such employment.

(e) The operation, control, or

supervision referred to in paragraph

(a)(1) of this section may be exercised

directly or indirectly. Thus, for

example, where a coal mine is leased,

and the lease empowers the lessor to

make decisions with respect to the

terms and conditions under which coal

is to be extracted or prepared, such as,

but not limited to, the manner of

extraction or preparation or the amount

of coal to be produced, the lessor may

be considered an operator. Similarly,

any parent entity or other controlling

business entity may be considered an

operator for purposes of this part,

regardless of the nature of its business

activities.

(f) Neither the United States, nor any

State, nor any instrumentality or agency

of the United States or any State, shall

be considered an operator.

§ 725.492 Successor operator defined.

(a) Any person who, on or after

January 1, 1970, acquired a mine or

mines, or substantially all of the assets

thereof, from a prior operator, or

acquired the coal mining business of

such prior operator, or substantially all

of the assets thereof, shall be considered

a ‘‘successor operator’’ with respect to

any miners previously employed by

such prior operator.

(b) The following transactions shall

also be deemed to create successor

operator liability:

(1) If an operator ceases to exist by

reason of a reorganization which

involves a change in identity, form, or

place of business or organization,

however effected;

(2) If an operator ceases to exist by

reason of a liquidation into a parent or

successor corporation; or

(3) If an operator ceases to exist by

reason of a sale of substantially all its

assets, or as a result of merger,

consolidation, or division.

(c) In any case in which a transaction

specified in paragraph (b), or

substantially similar to a transaction

specified in paragraph (b) took place,

the resulting entity shall be considered

a ‘‘successor operator’’ with respect to

any miners previously employed by

such prior operator.

(d) This section shall not be construed

to relieve a prior operator of any

liability if such prior operator meets the

conditions set forth in § 725.494. If the

prior operator does not meet the

conditions set forth in § 725.494, the

following provisions shall apply:

(1) In any case in which a prior

operator transferred a mine or mines, or

substantially all of the assets thereof, to

a successor operator, or sold its coal

mining business or substantially all of

the assets thereof, to a successor

operator, and then ceased to exist,

within the terms of paragraph (b), the

successor operator as identified in

paragraph (a) shall be primarily liable

for the payment of benefits to any

miners previously employed by such

prior operator.

(2) In any case in which a prior

operator transferred mines, or

substantially all of the assets thereof, to

more than one successor operator, the

successor operator that most recently

acquired a mine or mines or assets from

the prior operator shall be primarily

liable for the payment of benefits to any
3410 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

miners previously employed by such

prior operator.

(3) In any case in which a mine or

mines, or substantially all the assets

thereof, have been transferred more than

once, the successor operator that most

recently acquired such mine or mines or

assets shall be primarily liable for the

payment of benefits to any miners

previously employed by the original

prior operator. If the most recent

successor operator does not meet the

criteria for a potentially liable operator

set forth in § 725.494, the next most

recent successor operator shall be liable.

(e) An ‘‘acquisition,’’ for purposes of

this section, shall include any

transaction by which title to the mine or

mines, or substantially all of the assets

thereof, or the right to extract or prepare

coal at such mine or mines, becomes

vested in a person other than the prior

operator.

§ 725.493 Employment relationship

defined.

(a)(1) In determining the identity of a

responsible operator under this part, the

terms ‘‘employ’’ and ‘‘employment’’

shall be construed as broadly as

possible, and shall include any

relationship under which an operator

retains the right to direct, control, or

supervise the work performed by a

miner, or any other relationship under

which an operator derives a benefit from

the work performed by a miner. Any

individuals who participate with one or

more persons in the mining of coal,

such as owners, proprietors, partners,

and joint venturers, whether they are

compensated by wages, salaries, piece

rates, shares, profits, or by any other

means, shall be deemed employees.

(2) The payment of wages or salary

shall be prima facie evidence of the

right to direct, control, or supervise an

individual’s work, and the Department

intends that where the operator who

paid a miner’s wages or salary meets the

criteria for a potentially liable operator

set forth in § 725.494, that operator shall

be primarily liable for the payment of

any benefits due the miner as a result of

such employment. The absence of such

payment, however, will not negate the

existence of an employment

relationship. Thus, the Department also

intends that where the person who paid

a miner’s wages may not be considered

a potentially liable operator, any other

operator who retained the right to

direct, control or supervise the work

performed by the miner, or who

benefitted from such work, may be

considered a potentially liable operator.

(b) This paragraph contains examples

of relationships that shall be considered

employment relationships for purposes

of this part. The list is not intended to

be exclusive.

(1) In any case in which an operator

may be considered a successor operator,

as determined in accordance with

§ 725.492, any employment with a prior

operator shall also be deemed to be

employment with the successor

operator. In a case in which the miner

was not independently employed by the

successor operator, the prior operator

shall remain primarily liable for the

payment of any benefits based on the

miner’s employment with the prior

operator. In a case in which the miner

was independently employed by the

successor operator after the transaction

giving rise to successor operator

liability, the successor operator shall be

primarily liable for the payment of any

benefits.

(2) In any case in which the operator

which directed, controlled or

supervised the miner is no longer in

business and such operator was a

subsidiary of a parent company, a

member of a joint venture, a partner in

a partnership, or was substantially

owned or controlled by another

business entity, such parent entity or

other member of a joint venture or

partner or controlling business entity

may be considered the employer of any

employees of such operator.

(3) In any claim in which the operator

which directed, controlled or

supervised the miner is a lessee, the

lessee shall be considered primarily

liable for the claim. The liability of the

lessor may be established only after it

has been determined that the lessee is

unable to provide for the payment of

benefits to a successful claimant. In any

case involving the liability of a lessor for

a claim arising out of employment with

a lessee, any determination of lessor

liability shall be made on the basis of

the facts present in the case in

accordance with the following

considerations:

(i) Where a coal mine is leased, and

the lease empowers the lessor to make

decisions with respect to the terms and

conditions under which coal is to be

extracted or prepared, such as, but not

limited to, the manner of extraction or

preparation or the amount of coal to be

produced, the lessor shall be considered

the employer of any employees of the

lessee.

(ii) Where a coal mine is leased to a

self-employed operator, the lessor shall

be considered the employer of such selfemployed operator and its employees if

the lease or agreement is executed or

renewed after August 18, 1978 and such

lease or agreement does not require the

lessee to guarantee the payment of

benefits which may be required under

this part and part 726 of this subchapter.

(iii) Where a lessor previously

operated a coal mine, it may be

considered an operator with respect to

employees of any lessee of such mine,

particularly where the leasing

arrangement was executed or renewed

after August 18, 1978 and does not

require the lessee to secure benefits

provided by the Act.

(4) A self-employed operator,

depending upon the facts of the case,

may be considered an employee of any

other operator, person, or business

entity which substantially controls,

supervises, or is financially responsible

for the activities of the self-employed

operator.

§ 725.494 Potentially liable operators.

An operator may be considered a

‘‘potentially liable operator’’ with

respect to a claim for benefits under this

part if each of the following conditions

is met:

(a) The miner’s disability or death

shall have arisen at least in part out of

employment in or around a mine or

other facility during a period when the

mine or facility was operated by such

operator, or by a person with respect to

which the operator may be considered

a successor operator. For purposes of

this section, there shall be a rebuttable

presumption that the miner’s disability

or death arose in whole or in part out

of his or her employment with such

operator. Unless this presumption is

rebutted, the responsible operator shall

be liable to pay benefits to the claimant

on account of the disability or death of

the miner in accordance with this part.

A miner’s pneumoconiosis, or disability

or death therefrom, shall be considered

to have arisen in whole or in part out

of work in or around a mine if such

work caused, contributed to or

aggravated the progression or

advancement of a miner’s loss of ability

to perform his or her regular coal mine

employment or comparable

employment.

(b) The operator, or any person with

respect to which the operator may be

considered a successor operator, shall

have been an operator for any period

after June 30, 1973.

(c) The miner shall have been

employed by the operator, or any person

with respect to which the operator may

be considered a successor operator, for

a cumulative period of not less than one

year (§ 725.101(a)(32)).

(d) The miner’s employment with the

operator, or any person with respect to

which the operator may be considered

a successor operator, shall have

included at least one working day
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3411

(§ 725.101(a)(32)) after December 31,

1969.

(e) The operator shall be capable of

assuming its liability for the payment of

continuing benefits under this part. An

operator will be deemed capable of

assuming its liability for a claim if one

of the following three conditions is met:

(1) The operator obtained a policy or

contract of insurance under section 423

of the Act and part 726 of this

subchapter that covers the claim, except

that such policy shall not be considered

sufficient to establish the operator’s

capability of assuming liability if the

insurance company has been declared

insolvent and its obligations for the

claim are not otherwise guaranteed;

(2) The operator qualified as a selfinsurer under section 423 of the Act and

part 726 of this subchapter during the

period in which the miner was last

employed by the operator, provided that

the operator still qualifies as a selfinsurer or the security given by the

operator pursuant to § 726.104(b) is

sufficient to secure the payment of

benefits in the event the claim is

awarded; or

(3) The operator possesses sufficient

assets to secure the payment of benefits

in the event the claim is awarded in

accordance with § 725.606 of this part.

§ 725.495 Criteria for determining a

responsible operator.

(a)(1) The operator responsible for the

payment of benefits in a claim

adjudicated under this part (the

‘‘responsible operator’’) shall be the

potentially liable operator, as

determined in accordance with

§ 725.494, that most recently employed

the miner.

(2) If more than one potentially liable

operator may be deemed to have

employed the miner most recently, then

the liability for any benefits payable as

a result of such employment shall be

assigned as follows:

(i) First, to the potentially liable

operator that directed, controlled, or

supervised the miner;

(ii) Second, to any potentially liable

operator that may be considered a

successor operator with respect to

miners employed by the operator

identified in paragraph (a)(2)(i); and

(iii) Third, to any other potentially

liable operator which may be deemed to

have been the miner’s most recent

employer pursuant to § 725.493 of this

part.

(3) If the operator that most recently

employed the miner may not be

considered a potentially liable operator,

as determined in accordance with

§ 725.494, the responsible operator shall

be the potentially liable operator that

next most recently employed the miner.

Any potentially liable operator that

employed the miner for at least one day

after December 31, 1969 may be deemed

the responsible operator if no more

recent employer may be considered a

potentially liable operator.

(b) Except as provided in this section

and § 725.408(a)(3) of this part, with

respect to the adjudication of the

identity of a responsible operator, the

Director shall bear the burden of

proving that the responsible operator

initially found liable for the payment of

benefits pursuant to § 725.410 of this

part (the ‘‘designated responsible

operator’’) is a potentially liable

operator. It shall be presumed, in the

absence of evidence to the contrary, that

the designated responsible operator is

capable of assuming liability for the

payment of benefits in accordance with

§ 725.494(e) of this part.

(c) The designated responsible

operator shall bear the burden of

proving either:

(1) that it does not possess sufficient

assets to secure the payment of benefits

in accordance with § 725.606 of this

part; or

(2) that it is not the potentially liable

operator that most recently employed

the miner. Such proof must include

evidence that the miner was employed

as a miner after he or she stopped

working for the designated responsible

operator and that the person by whom

he or she was employed is a potentially

liable operator within the meaning of

§ 725.494. In order to establish that a

more recent employer is a potentially

liable operator, the designated

responsible operator must demonstrate

that the more recent employer possesses

sufficient assets to secure the payment

of benefits in accordance with § 725.606

of this part. The designated responsible

operator may satisfy its burden by

presenting evidence that the owner, if

the more recent employer is a sole

proprietorship; the partners, if the more

recent employer is a partnership; or the

president, secretary, and treasurer, if the

more recent employer is a corporation

that failed to secure the payment of

benefits pursuant to part 726 of this

subchapter, possess assets sufficient to

secure the payment of benefits,

provided such assets may be reached in

a proceeding brought under subpart I of

this part.

(d) In any case referred to the Office

of Administrative Law Judges pursuant

to § 725.421 in which the responsible

operator initially found liable for the

payment of benefits pursuant to

§ 725.410 is not the operator that most

recently employed the miner, the record

shall contain a statement from the

district director explaining the reasons

for such initial finding. If the reasons

include the most recent employer’s

failure to meet the conditions of

§ 725.494(e), the record shall also

contain a statement that the Office has

searched the files it maintains pursuant

to part 726, and that the Office has no

record of insurance coverage for that

employer, or of authorization to selfinsure, that meets the conditions of

§ 725.494(e)(1) or (e)(2). Such a

statement shall be prima facie evidence

that the most recent employer is not

financially capable of assuming its

liability for a claim. In the absence of

such a statement, it shall be presumed

that the most recent employer is

financially capable of assuming its

liability for a claim.

§ 725.496 Special claims transferred to the

fund.

(a) The 1981 amendments to the Act

amended section 422 of the Act and

transferred liability for payment of

certain special claims from operators

and carriers to the fund. These

provisions apply to claims which were

denied before March 1, 1978, and which

have been or will be approved in

accordance with section 435 of the Act.

(b) Section 402(i) of the Act defines

three classes of denied claims subject to

the transfer provisions:

(1) Claims filed with and denied by

the Social Security Administration

before March 1, 1978;

(2) Claims filed with the Department

of Labor in which the claimant was

notified by the Department of an

administrative or informal denial before

March 1, 1977, and in which the

claimant did not within one year of

such notification either:

(i) Request a hearing; or

(ii) Present additional evidence; or

(iii) Indicate an intention to present

additional evidence; or

(iv) Request a modification or

reconsideration of the denial on the

ground of a change in conditions or

because of a mistake in a determination

of fact.

(3) Claims filed with the Department

of Labor and denied under the law in

effect prior to the enactment of the

Black Lung Benefits Reform Act of 1977,

that is, before March 1, 1978, following

a formal hearing before an

administrative law judge or

administrative review before the

Benefits Review Board or review before

a United States Court of Appeals.

(c) Where more than one claim was

filed with the Social Security

Administration and/or the Department

of Labor prior to March 1, 1978, by or

on behalf of a miner or a surviving
3412 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

dependent of a miner, unless such

claims were required to be merged by

the agency’s regulations, the procedural

history of each such claim must be

considered separately to determine

whether the claim is subject to the

transfer of liability provisions.

(d) For a claim filed with and denied

by the Social Security Administration

prior to March 1, 1978, to come within

the transfer provisions, such claim must

have been or must be approved under

the provisions of section 435 of the Act.

No claim filed with and denied by the

Social Security Administration is

subject to the transfer of liability

provisions unless a request was made by

or on behalf of the claimant for review

of such denied claim under section 435.

Such review must have been requested

by the filing of a valid election card or

other equivalent document with the

Social Security Administration in

accordance with section 435(a) and its

implementing regulations at 20 CFR

410.700 through 410.707.

(e) Where a claim filed with the

Department of Labor prior to March 1,

1977, was subjected to repeated

administrative or informal denials, the

last such denial issued during the

pendency of the claim determines

whether the claim is subject to the

transfer of liability provisions.

(f) Where a miner’s claim comes

within the transfer of liability

provisions of the 1981 amendments the

fund is also liable for the payment of

any benefits to which the miner’s

dependent survivors are entitled after

the miner’s death. However, if the

survivor’s entitlement was established

on a separate claim not subject to the

transfer of liability provisions prior to

approval of the miner’s claim under

section 435, the party responsible for

the payment of such survivors’ benefits

shall not be relieved of that

responsibility because the miner’s claim

was ultimately approved and found

subject to the transfer of liability

provisions.

§ 725.497 Procedures in special claims

transferred to the fund.

(a) General. It is the purpose of this

section to define procedures to expedite

the handling and disposition of claims

affected by the benefit liability transfer

provisions of Section 205 of the Black

Lung Benefits Amendments of 1981.

(b) Action by the Department. The

OWCP shall, in accordance with the

criteria contained in § 725.496, review

each claim which is or may be affected

by the provisions of Section 205 of the

Black Lung Benefits Amendments of

1981. Any party to a claim, adjudication

officer, or adjudicative body may

request that such a review be conducted

and that the record be supplemented

with any additional documentation

necessary for an informed consideration

of the transferability of the claim. Where

the issue of the transferability of the

claim can not be resolved by agreement

of the parties and the evidence of record

is not sufficient for a resolution of the

issue, the hearing record may be

reopened or the case remanded for the

development of the additional evidence

concerning the procedural history of the

claim necessary to such resolution.

Such determinations shall be made on

an expedited basis.

(c) Dismissal of operators. If it is

determined that a coal mine operator or

insurance carrier which previously

participated in the consideration or

adjudication of any claim, may no

longer be found liable for the payment

of benefits to the claimant by reason of

section 205 of the Black Lung Benefits

Amendments of 1981, such operator or

carrier shall be promptly dismissed as a

party to the claim. The dismissal of an

operator or carrier shall be concluded at

the earliest possible time and in no

event shall an operator or carrier

participate as a necessary party in any

claim for which only the fund may be

liable.

(d) Procedure following dismissal of

an operator. After it has been

determined that an operator or carrier

must be dismissed as a party in any

claim in accordance with this section,

the Director shall take such action as is

authorized by the Act to bring about the

proper and expeditious resolution of the

claim in light of all relevant medical

and other evidence. Action to be taken

in this regard by the Director may

include, but is not limited to, the

assignment of the claim to the Black

Lung Disability Trust Fund for the

payment of benefits, the reimbursement

of benefits previously paid by an

operator or carrier if appropriate, the

defense of the claim on behalf of the

fund, or proceedings authorized by

§ 725.310.

(e) Any claimant whose claim has

been subsequently denied in a

modification proceeding will be entitled

to expedited review of the modification

decision. Where a formal hearing was

previously held, the claimant may

waive his right to a further hearing and

ask that a decision be made on the

record of the prior hearing, as

supplemented by any additional

documentary evidence which the

parties wish to introduce and briefs of

the parties, if desired. In any case in

which the claimant waives his right to

a second hearing, a decision and order

must be issued within 30 days of the

date upon which the parties agree the

record has been completed.

Subpart H—Payment of Benefits

General Provisions

§ 725.501 Payment provisions generally.

The provisions of this subpart govern

the payment of benefits to claimants

whose claims are approved for payment

under section 415 and part C of title IV

of the Act or approved after review

under section 435 of the Act and part

727 of this subchapter (see § 725.4(d)).

§ 725.502 When benefit payments are due;

manner of payment.

(a)(1) Except with respect to benefits

paid by the fund pursuant to an initial

determination issued in accordance

with § 725.418 (see § 725.522), benefits

under the Act shall be paid when they

become due. Benefits shall be

considered due after the issuance of an

effective order requiring the payment of

benefits by a district director,

administrative law judge, Benefits

Review Board, or court, notwithstanding

the pendency of a motion for

reconsideration before an administrative

law judge or an appeal to the Board or

court, except that benefits shall not be

considered due where the payment of

such benefits has been stayed by the

Benefits Review Board or appropriate

court. An effective order shall remain in

effect unless it is vacated by an

administrative law judge on

reconsideration, or, upon review under

section 21 of the LHWCA, by the

Benefits Review Board or an appropriate

court, or is superseded by an effective

order issued pursuant to § 725.310.

(2) A proposed order issued by a

district director pursuant to § 725.418

becomes effective at the expiration of

the thirtieth day thereafter if no party

timely requests revision of the proposed

decision and order or a hearing (see

§ 725.419). An order issued by an

administrative law judge becomes

effective when it is filed in the office of

the district director (see § 725.479). An

order issued by the Benefits Review

Board shall become effective when it is

issued. An order issued by a court shall

become effective in accordance with the

rules of the court.

(b)(1) While an effective order

requiring the payment of benefits

remains in effect, monthly benefits, at

the rates set forth in § 725.520, shall be

due on the first business day of the

month following the month for which

the benefits are payable. For example,

benefits payable for the month of

January shall be due on the first

business day in February.
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3413

(2) Within 30 days after the issuance

of an effective order requiring the

payment of benefits, the district director

shall compute the amount of benefits

payable for periods prior to the effective

date of the order, in addition to any

interest payable for such periods (see

§ 725.608), and shall so notify the

parties. Any computation made by the

district director under this paragraph

shall strictly observe the terms of the

order. Benefits and interest payable for

such periods shall be due on the

thirtieth day following issuance of the

district director’s computation. A copy

of the current table of applicable interest

rates shall be attached.

(c) Benefits are payable for monthly

periods and shall be paid directly to an

eligible claimant or his or her

representative payee (see § 725.510)

beginning with the month during which

eligibility begins. Benefit payments

shall terminate with the month before

the month during which eligibility

terminates. If a claimant dies in the first

month during which all requirements

for eligibility are met, benefits shall be

paid for that month.

§ 725.503 Date from which benefits are

payable.

(a) In accordance with the provisions

of section 6(a) of the Longshore Act as

incorporated by section 422(a) of the

Act, and except as provided in

§ 725.504, the provisions of this section

shall be applicable in determining the

date from which benefits are payable to

an eligible claimant for any claim filed

after March 31, 1980. Except as

provided in paragraph (d), the date from

which benefits are payable for any claim

approved under part 727 shall be

determined in accordance with

§ 727.302 (see § 725.4(d)).

(b) Miner’s claim. In the case of a

miner who is entitled to benefits,

benefits are payable to such miner

beginning with the month of onset of

total disability due to pneumoconiosis

arising out of coal mine employment.

Where the evidence does not establish

the month of onset, benefits shall be

payable to such miner beginning with

the month during which the claim was

filed. In the case of a miner who filed

a claim before January 1, 1982, benefits

shall be payable to the miner’s eligible

survivor (if any) beginning with the

month in which the miner died.

(c) Survivor’s claim. In the case of an

eligible survivor, benefits shall be

payable beginning with the month of the

miner’s death, or January 1, 1974,

whichever is later.

(d) If a claim is awarded pursuant to

section 22 of the Longshore Act and

§ 725.310, then the date from which

benefits are payable shall be determined

as follows:

(1) Mistake in fact. The provisions of

paragraphs (b) or (c) of this section, as

applicable, shall govern the

determination of the date from which

benefits are payable.

(2) Change in conditions. Benefits are

payable to a miner beginning with the

month of onset of total disability due to

pneumoconiosis arising out of coal mine

employment, provided that no benefits

shall be payable for any month prior to

the effective date of the most recent

denial of the claim by a district director

or administrative law judge. Where the

evidence does not establish the month

of onset, benefits shall be payable to

such miner from the month of the

earliest evidence the adjudication

officer finds supportive of a condition of

entitlement (see § 725.202(d)) not

previously resolved in favor of the

claimant in the denial of benefits the

claimant seeks to modify, provided that

such evidence was developed after the

date upon which the most recent denial

by a district director or administrative

law judge became effective.

(e) In the case of a claim filed between

July 1, 1973, and December 31, 1973,

benefits shall be payable as provided by

this section, except to the extent

prohibited by § 727.303 (see § 725.4(d)).

(f) No benefits shall be payable with

respect to a claim filed after December

31, 1973 (a part C claim), for any period

of eligibility occurring before January 1,

1974.

(g) Each decision and order awarding

benefits shall indicate the month from

which benefits are payable to the

eligible claimant.

§ 725.504 Payments to a claimant

employed as a miner.

(a) In the case of a claimant who is

employed as a miner (see § 725.202) at

the time of a final determination of such

miner’s eligibility for benefits, no

benefits shall be payable unless:

(1) The miner’s eligibility is

established under section 411(c)(3) of

the Act; or

(2) The miner terminates his or her

coal mine employment within 1 year

from the date of the final determination

of the claim.

(b) If the eligibility of a working miner

is established under section 411(c)(3) of

the Act, benefits shall be payable as is

otherwise provided in this part. If

eligibility cannot be established under

section 411(c)(3), and the miner

continues to be employed as a miner in

any capacity for a period of less than 1

year after a final determination of the

claim, benefits shall be payable

beginning with the month during which

the miner ends his or her coal mine

employment. If the miner’s employment

continues for more than 1 year after a

final determination of eligibility, such

determination shall be considered a

denial of benefits on the basis of the

miner’s continued employment, and the

miner may seek benefits only as

provided in § 725.310, if applicable, or

by filing a new claim under this part.

The provisions of Subparts E and F of

this part shall be applicable to claims

considered under this section as is

appropriate.

(c) In any case where the miner

returns to coal mine or comparable and

gainful work, the payments to such

miner shall be suspended and no

benefits shall be payable (except as

provided in section 411(c)(3) of the Act)

for the period during which the miner

continues to work. If the miner again

terminates employment, the district

director may require the miner to

submit to further medical examination

before authorizing the payment of

benefits.

§ 725.505 Payees.

Benefits may be paid, as appropriate,

to a beneficiary, to a qualified

dependent, or to a representative

authorized under this subpart to receive

payments on behalf of such beneficiary

or dependent.

§ 725.506 Payment on behalf of another;

‘‘legal guardian’’ defined.

Benefits are paid only to the

beneficiary, his or her representative

payee (see § 725.510) or his or her legal

guardian. As used in this section, ‘‘legal

guardian’’ means an individual who has

been appointed by a court of competent

jurisdiction or otherwise appointed

pursuant to law to assume control of

and responsibility for the care of the

beneficiary, the management of his or

her estate, or both.

§ 725.507 Guardian for minor or

incompetent.

An adjudication officer may require

that a legal guardian or representative be

appointed to receive benefit payments

payable to any person who is mentally

incompetent or a minor and to exercise

the powers granted to, or to perform the

duties otherwise required of such

person under the Act.

§ 725.510 Representative payee.

(a) If the district director determines

that the best interests of a beneficiary

are served thereby, the district director

may certify the payment of such

beneficiary’s benefits to a representative

payee.

(b) Before any amount shall be

certified for payment to any
3414 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

representative payee for or on behalf of

a beneficiary, such representative payee

shall submit to the district director such

evidence as may be required of his or

her relationship to, or his or her

responsibility for the care of, the

beneficiary on whose behalf payment is

to be made, or of his or her authority to

receive such a payment. The district

director may, at any time thereafter,

require evidence of the continued

existence of such relationship,

responsibility, or authority. If a person

requesting representative payee status

fails to submit the required evidence

within a reasonable period of time after

it is requested, no further payments

shall be certified to him or her on behalf

of the beneficiary unless the required

evidence is thereafter submitted.

(c) All benefit payments made to a

representative payee shall be available

only for the use and benefit of the

beneficiary, as defined in § 725.511.

§ 725.511 Use and benefit defined.

(a) Payments certified to a

representative payee shall be considered

as having been applied for the use and

benefit of the beneficiary when they are

used for the beneficiary’s current

maintenance—i.e., to replace current

income lost because of the disability of

the beneficiary. Where a beneficiary is

receiving care in an institution, current

maintenance shall include the

customary charges made by the

institution and charges made for the

current and foreseeable needs of the

beneficiary which are not met by the

institution.

(b) Payments certified to a

representative payee which are not

needed for the current maintenance of

the beneficiary, except as they may be

used under § 725.512, shall be

conserved or invested on the

beneficiary’s behalf. Preferred

investments are U.S. savings bonds

which shall be purchased in accordance

with applicable regulations of the U.S.

Treasury Department (31 CFR part 315).

Surplus funds may also be invested in

accordance with the rules applicable to

investment of trust estates by trustees.

For example, surplus funds may be

deposited in an interest or dividend

bearing account in a bank or trust

company or in a savings and loan

association if the account is either

federally insured or is otherwise insured

in accordance with State law

requirements. Surplus funds deposited

in an interest or dividend bearing

account in a bank or trust company or

in a savings and loan association must

be in a form of account which clearly

shows that the representative payee has

only a fiduciary, and not a personal,

interest in the funds. The preferred

forms of such accounts are as follows:

Name of beneficiary lllllllllll

by (Name of representative payee)

representative payee,

or (Name of beneficiary)

by (Name of representative payee) trustee,

U.S. savings bonds purchased with surplus

funds by a representative payee for an

incapacitated adult beneficiary should be

registered as follows: (Name of beneficiary)

(Social Security No.), for whom (Name of

payee) is representative payee for black lung

benefits.

§ 725.512 Support of legally dependent

spouse, child, or parent.

If current maintenance needs of a

beneficiary are being reasonably met, a

relative or other person to whom

payments are certified as representative

payee on behalf of the beneficiary may

use part of the payments so certified for

the support of the legally dependent

spouse, a legally dependent child, or a

legally dependent parent of the

beneficiary.

§ 725.513 Accountability; transfer.

(a) The district director may require a

representative payee to submit periodic

reports including a full accounting of

the use of all benefit payments certified

to a representative payee. If a requested

report or accounting is not submitted

within the time allowed, the district

director shall terminate the certification

of the representative payee and

thereafter payments shall be made

directly to the beneficiary. A

certification which is terminated under

this section may be reinstated for good

cause, provided that all required reports

are supplied to the district director.

(b) A representative payee who has

conserved or invested funds from

payments under this part shall, upon

the direction of the district director,

transfer any such funds (including

interest) to a successor payee appointed

by the district director or, at the option

of the district director, shall transfer

such funds to the Office for

recertification to a successor payee or

the beneficiary.

§ 725.514 Certification to dependent of

augmentation portion of benefit.

(a) If the basic benefit of a miner or

of a surviving spouse is augmented

because of one or more dependents, and

it appears to the district director that the

best interests of such dependent would

be served thereby, or that the augmented

benefit is not being used for the use and

benefit (as defined in this subpart) of the

augmentee, the district director may

certify payment of the amount of such

augmentation (to the extent attributable

to such dependent) to such dependent

directly, or to a legal guardian or a

representative payee for the use and

benefit of such dependent.

(b) Any request to the district director

to certify separate payment of the

amount of an augmentation in

accordance with paragraph (a) of this

section shall be in writing on such form

and in accordance with such

instructions as are prescribed by the

Office.

(c) The district director shall specify

the terms and conditions of any

certification authorized under this

section and may terminate any such

certification where appropriate.

(d) Any payment made under this

section, if otherwise valid under the

Act, is a complete settlement and

satisfaction of all claims, rights, and

interests in and to such payment, except

that such payment shall not be

construed to abridge the rights of any

party to recoup any overpayment made.

§ 725.515 Assignment and exemption from

claims of creditors.

Except as provided by the Act and

this part, no assignment, release, or

commutation of benefits due or payable

under this part shall be valid, and all

benefits shall be exempt from claims of

creditors and from levy, execution, and

attachment or other remedy or recovery

or collection of a debt, which exemption

may not be waived.

Benefit Rates

§ 725.520 Computation of benefits.

(a) Basic rate. The amount of benefits

payable to a beneficiary for a month is

determined, in the first instance, by

computing the ‘‘basic rate.’’ The basic

rate is equal to 371⁄2 percent of the

monthly pay rate for Federal employees

in GS–2, step 1. That rate for a month

is determined by:

(1) Ascertaining the lowest annual

rate of pay (step 1) for Grade GS–2 of the

General Schedule applicable to such

month (see 5 U.S.C. 5332);

(2) Ascertaining the monthly rate

thereof by dividing the amount

determined in paragraph (a)(1) of this

section by 12; and

(3) Ascertaining the basic rate under

the Act by multiplying the amount

determined in paragraph (a)(2) of this

section by 0.375 (that is, by 371⁄2

percent).

(b) Basic benefit. When a miner or

surviving spouse is entitled to benefits

for a month for which he or she has no

dependents who qualify under this part

and when a surviving child of a miner

or spouse, or a parent, brother, or sister

of a miner, is entitled to benefits for a

month for which he or she is the only

beneficiary entitled to benefits, the
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3415

amount of benefits to which such

beneficiary is entitled is equal to the

basic rate as computed in accordance

with this section (raised, if not a

multiple of 10 cents, to the next high

multiple of 10 cents). This amount is

referred to as the ‘‘basic benefit.’’

(c) Augmented benefit. (1) When a

miner or surviving spouse is entitled to

benefits for a month for which he or she

has one or more dependents who

qualify under this part, the amount of

benefits to which such miner or

surviving spouse is entitled is increased.

This increase is referred to as an

‘‘augmentation.’’

(2) The benefits of a miner or

surviving spouse are augmented to take

account of a particular dependent

beginning with the first month in which

such dependent satisfies the conditions

set forth in this part, and continues to

be augmented through the month before

the month in which such dependent

ceases to satisfy the conditions set forth

in this part, except in the case of a child

who qualifies as a dependent because he

or she is a student. In the latter case,

such benefits continue to be augmented

through the month before the first

month during no part of which he or she

qualifies as a student.

(3) The basic rate is augmented by 50

percent for one such dependent, 75

percent for two such dependents, and

100 percent for three or more such

dependents.

(d) Survivor benefits. As used in this

section, ‘‘survivor’’ means a surviving

child of a miner or surviving spouse, or

a surviving parent, brother, or sister of

a miner, who establishes entitlement to

benefits under this part.

(e) Computation and rounding. (1)

Any computation prescribed by this

section is made to the third decimal

place.

(2) Monthly benefits are payable in

multiples of 10 cents. Therefore, a

monthly payment of amounts derived

under paragraph (c)(3) of this section

which is not a multiple of 10 cents is

increased to the next higher multiple of

10 cents.

(3) Since a fraction of a cent is not a

multiple of 10 cents, such an amount

which contains a fraction in the third

decimal place is raised to the next

higher multiple of 10 cents.

(f) Eligibility based on the coal mine

employment of more than one miner.

Where an individual, for any month, is

entitled (and/or qualifies as a dependent

for purposes of augmentation of

benefits) based on the disability or death

due to pneumoconiosis arising out of

the coal mine employment of more than

one miner, the benefit payable to or on

behalf of such individual shall be at a

rate equal to the highest rate of benefits

for which entitlement is established by

reason of eligibility as a beneficiary, or

by reason of his or her qualification as

a dependent for augmentation of benefit

purposes.

§ 725.521 Commutation of payments; lump

sum awards.

(a) Whenever the district director

determines that it is in the interest of

justice, the liability for benefits or any

part thereof as determined by a final

adjudication, may, with the approval of

the Director, be discharged by the

payment of a lump sum equal to the

present value of future benefit payments

commuted, computed at 4 percent true

discount compounded annually.

(b) Applications for commutation of

future payments of benefits shall be

made to the district director in the

manner prescribed by the district

director. If the district director

determines that an award of a lump sum

payment of such benefits would be in

the interest of justice, he or she shall

refer such application, together with the

reasons in support of such

determination, to the Director for

consideration.

(c) The Director shall, in his or her

discretion, grant or deny the application

for commutation of payments. Such

decision may be appealed to the

Benefits Review Board.

(d) The computation of all

commutations of such benefits shall be

made by the OWCP. For this purpose

the file shall contain the date of birth of

the person on whose behalf

commutation is sought, as well as the

date upon which such commutation

shall be effective.

(e) For purposes of determining the

amount of any lump sum award, the

probability of the death of the disabled

miner and/or other persons entitled to

benefits before the expiration of the

period during which he or she is

entitled to benefits, shall be determined

in accordance with the most current

United States Life Tables, as developed

by the Department of Health, Education,

and Welfare, and the probability of the

remarriage of a surviving spouse shall

be determined in accordance with the

remarriage tables of the Dutch Royal

Insurance Institution. The probability of

the happening of any other contingency

affecting the amount or duration of the

compensation shall be disregarded.

(f) In the event that an operator or

carrier is adjudicated liable for the

payment of benefits, such operator or

carrier shall be notified of and given an

opportunity to participate in the

proceedings to determine whether a

lump sum award shall be made. Such

operator or carrier shall, in the event a

lump sum award is made, tender full

and prompt payment of such award to

the claimant as though such award were

a final payment of monthly benefits.

Except as provided in paragraph (g) of

this section, such lump sum award shall

forever discharge such operator or

carrier from its responsibility to make

monthly benefit payments under the Act

to the person who has requested such

lump-sum award. In the event that an

operator or carrier is adjudicated liable

for the payment of benefits, such

operator or carrier shall not be liable for

any portion of a commuted or lump sum

award predicated upon benefits due any

claimant prior to January 1, 1974.

(g) In the event a lump-sum award is

approved under this section, such

award shall not operate to discharge an

operator carrier, or the fund from any

responsibility imposed by the Act for

the payment of medical benefits to an

eligible miner.

§ 725.522 Payments prior to final

adjudication.

(a) If an operator or carrier fails or

refuses to commence the payment of

benefits within 30 days of issuance of an

initial determination of eligibility by the

district director (see § 725.420), or fails

or refuses to commence the payment of

any benefits due pursuant to an effective

order by a district director,

administrative law judge, Benefits

Review Board, or court, the fund shall

commence the payment of such benefits

and shall continue such payments as

appropriate. In the event that the fund

undertakes the payment of benefits on

behalf of an operator or carrier, the

provisions of §§ 725.601 through

725.609 shall be applicable to such

operator or carrier.

(b) If benefit payments are

commenced prior to the final

adjudication of the claim and it is later

determined by an administrative law

judge, the Board, or court that the

claimant was ineligible to receive such

payments, such payments shall be

considered overpayments pursuant to

§ 725.540 of this subpart and may be

recovered in accordance with the

provisions of this subpart.

Special Provisions for Operator

Payments

§ 725.530 Operator payments; generally.

(a) Benefits payable by an operator or

carrier pursuant to an effective order

issued by a district director,

administrative law judge, Benefits

Review Board, or court, or by an

operator that has agreed that it is liable

for the payment of benefits to a

claimant, shall be paid by the operator
3416 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

or carrier immediately when they

become due (see § 725.502(b)). An

operator that fails to pay any benefits

that are due, with interest, shall be

considered in default with respect to

those benefits, and the provisions of

§ 725.605 of this part shall be

applicable. In addition, a claimant who

does not receive any benefits within 10

days of the date they become due is

entitled to additional compensation

equal to twenty percent of those benefits

(see § 725.607). Arrangements for the

payment of medical costs shall be made

by such operator or carrier in

accordance with the provisions of

subpart J of this part.

(b) Benefit payments made by an

operator or carrier shall be made

directly to the person entitled thereto or

a representative payee if authorized by

the district director. The payment of a

claimant’s attorney’s fee, if any is

awarded, shall be made directly to such

attorney. Reimbursement of the fund,

including interest, shall be paid directly

to the Secretary on behalf of the fund.

§ 725.531 Receipt for payment.

Any individual receiving benefits

under the Act in his or her own right,

or as a representative payee, or as the

duly appointed agent for the estate of a

deceased beneficiary, shall execute

receipts for benefits paid by any

operator which shall be produced by

such operator for inspection whenever

the district director requires. A canceled

check shall be considered adequate

receipt of payment for purposes of this

section. No operator or carrier shall be

required to retain receipts for payments

made for more than 5 years after the

date on which such receipt was

executed.

(Approved by the Office of Management and

Budget under control number 1215–0124)

(Pub. L. No. 96–511, 94 Stat. 2812 (44 U.S.C.

3501 et seq.))

§ 725.532 Suspension, reduction, or

termination of payments.

(a) No suspension, reduction, or

termination in the payment of benefits

is permitted unless authorized by the

district director, administrative law

judge, Board, or court. No suspension,

reduction, or termination shall be

authorized except upon the occurrence

of an event which terminates a

claimant’s eligibility for benefits (see

subpart B of this part) or as is otherwise

provided in subpart C of this part,

§§ 725.306 and 725.310, or this subpart

(see also §§ 725.533 through 725.546).

(b) Any unauthorized suspension in

the payment of benefits by an operator

or carrier shall be treated as provided in

subpart I.

(c) Unless suspension, reduction, or

termination of benefits payments is

required by an administrative law judge,

the Benefits Review Board or a court,

the district director, after receiving

notification of the occurrence of an

event that would require the

suspension, reduction, or termination of

benefits, shall follow the procedures for

the determination of claims set forth in

subparts E and F.

Increases and Reductions of Benefits

§ 725.533 Modification of benefits

amounts; general.

(a) Under certain circumstances the

amount of monthly benefits as

computed in § 725.520 or lump-sum

award (§ 725.521) shall be modified to

determine the amount actually to be

paid to a beneficiary. With respect to

any benefits payable for all periods of

eligibility after January 1, 1974, a

reduction of the amount of benefits

payable shall be required on account of:

(1) Any compensation or benefits

received under any State workers’

compensation law because of death or

partial or total disability due to

pneumoconiosis; or

(2) Any compensation or benefits

received under or pursuant to any

Federal law including part B of title IV

of the Act because of death or partial or

total disability due to pneumoconiosis;

or

(3) In the case of benefits to a parent,

brother, or sister as a result of a claim

filed at any time or benefits payable on

a miner’s claim which was filed on or

after January 1, 1982, the excess

earnings from wages and from net

earnings from self-employment (see

§ 410.530 of this title) of such parent,

brother, sister, or miner, respectively; or

(4) The fact that a claim for benefits

from an additional beneficiary is filed,

or that such claim is effective for a

payment during the month of filing, or

a dependent qualifies under this part for

an augmentation portion of a benefit of

a miner or widow for a period in which

another dependent has previously

qualified for an augmentation.

(b) With respect to periods of

eligibility occurring after June 30, 1973,

but before January 1, 1974, benefits shall

be reduced in months of eligibility

occurring during such period only:

(1) By an amount equal to any

payment received under the workers’

compensation, unemployment

compensation, or disability insurance

laws of any State on account of the

disability or death of the miner due to

pneumoconiosis; and

(2) On account of excess earnings

under section 203 (b) through (l) of the

Social Security Act; and

(3) For failure to report earnings from

work in employment and selfemployment within the prescribed

period of time; and

(4) By reason of the fact that a claim

for benefits from an additional

beneficiary is filed, or that such a claim

is effective for a month prior to the

month of filing, or a dependent qualifies

under this part or this chapter for an

augmentation portion of a benefit of a

miner or surviving spouse for a month

for which another dependent has

previously qualified for an

augmentation.

(c) With respect to claims filed

between July 1 and December 31, 1973,

and paid for periods of eligibility

occurring during such period, there

shall be no retroactive adjustment of

benefits paid in light of the amendments

enacted by the Black Lung Benefits

Reform Act of 1977 insofar as such

amendments affect events which cause

a reduction in benefits.

(d) An adjustment in a beneficiary’s

monthly benefit may be required

because an overpayment or

underpayment has been made to such

beneficiary (see §§ 725.540 through

725.546).

(e) A suspension of a beneficiary’s

monthly benefits may be required when

the Office has information indicating

that reductions on account of excess

earnings may reasonably be expected.

(f) Monthly benefit rates are payable

in multiples of 10 cents. Any monthly

benefit rate which, after the applicable

computations, augmentations, and

reductions is not a multiple of 10 cents,

is increased to the next higher multiple

of 10 cents. Since a fraction of a cent is

not a multiple of 10 cents, a benefit rate

which contains such a fraction in the

third decimal is raised to the next

higher multiple of 10 cents.

(g) Any individual entitled to a

benefit, who is aware of any

circumstances which could affect

entitlement to benefits, eligibility for

payment, or the amount of benefits, or

result in the termination, suspension, or

reduction of benefits, shall promptly

report these circumstances to the Office.

The Office may at any time require an

individual receiving, or claiming

entitlement to, benefits, either on his or

her own behalf or on behalf of another,

to submit a written statement giving

pertinent information bearing upon the

issue of whether or not an event has

occurred which would cause such

benefit to be terminated, or which

would subject such benefit to reductions

or suspension under the provisions of

the Act. The failure of an individual to

submit any such report or statement,

properly executed, to the Office shall
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3417

subject such benefit to reductions,

suspension, or termination as the case

may be.

§ 725.534 Reduction of State benefits.

No benefits under section 415 of part

B of title IV of the Act shall be payable

to the residents of a State which, after

December 31, 1969, reduces the benefits

payable to persons eligible to receive

benefits under section 415 of the Act

under State laws applicable to its

general work force with regard to

workers’ compensation (including

compensation for occupational disease),

unemployment compensation, or

disability insurance benefits which are

funded in whole or in part out of

employer contributions.

§ 725.535 Reductions; receipt of State or

Federal benefit.

(a) As used in this section the term

‘‘State or Federal benefit’’ means a

payment to an individual on account of

total or partial disability or death due to

pneumoconiosis only under State or

Federal laws relating to workers’

compensation. With respect to a claim

for which benefits are payable for any

month between July 1 and December 31,

1973, ‘‘State benefit’’ means a payment

to a beneficiary made on account of

disability or death due to

pneumoconiosis under State laws

relating to workers’ compensation

(including compensation for

occupational disease), unemployment

compensation, or disability insurance.

(b) Benefit payments to a beneficiary

for any month are reduced (but not

below zero) by an amount equal to any

payments of State or Federal benefits

received by such beneficiary for such

month.

(c) Where a State or Federal benefit is

paid periodically but not monthly, or in

a lump sum as a commutation of or a

substitution for periodic benefits, the

reduction under this section is made at

such time or times and in such amounts

as the Office determines will

approximate as nearly as practicable the

reduction required under paragraph (b)

of this section. In making such a

determination, a weekly State or Federal

benefit is multiplied by 41⁄3 and a

biweekly benefit is multiplied by 21⁄6 to

ascertain the monthly equivalent for

reduction purposes.

(d) Amounts paid or incurred or to be

incurred by the individual for medical,

legal, or related expenses in connection

with this claim for State or Federal

benefits (defined in paragraph (a) of this

section) are excluded in computing the

reduction under paragraph (b) of this

section, to the extent that they are

consistent with State or Federal Law.

Such medical, legal, or related expenses

may be evidenced by the State or

Federal benefit awards, compromise

agreement, or court order in the State or

Federal benefit proceedings, or by such

other evidence as the Office may

require. Such other evidence may

consist of:

(1) A detailed statement by the

individual’s attorney, physician, or the

employer’s insurance carrier; or

(2) Bills, receipts, or canceled checks;

or

(3) Other evidence indicating the

amount of such expenses; or

(4) Any combination of the foregoing

evidence from which the amount of

such expenses may be determinable.

Such expenses shall not be excluded

unless established by evidence as

required by the Office.

§ 725.536 Reductions; excess earnings.

In the case of a surviving parent,

brother, or sister, whose claim was filed

at any time, or of a miner whose claim

was filed on or after January 1, 1982,

benefit payments are reduced as

appropriate by an amount equal to the

deduction which would be made with

respect to excess earnings under the

provisions of sections 203 (b), (f), (g),

(h), (j), and (l) of the Social Security Act

(42 U.S.C. 403 (b), (f), (g), (h), (j), and

(l)), as if such benefit payments were

benefits payable under section 202 of

the Social Security Act (42 U.S.C. 402)

(see §§ 404.428 through 404.456 of this

title).

§ 725.537 Reductions; retroactive effect of

an additional claim for benefits.

Except as provided in § 725.212(b),

beginning with the month in which a

person other than a miner files a claim

and becomes entitled to benefits, the

benefits of other persons entitled to

benefits with respect to the same miner,

are adjusted downward, if necessary, so

that no more than the permissible

amount of benefits (the maximum

amount for the number of beneficiaries

involved) will be paid.

§ 725.538 Reductions; effect of

augmentation of benefits based on

subsequent qualification of individual.

(a) Ordinarily, a written request that

the benefits of a miner or surviving

spouse be augmented on account of a

qualified dependent is made as part of

the claim for benefits. However, it may

also be made thereafter.

(b) In the latter case, beginning with

the month in which such a request is

filed on account of a particular

dependent and in which such

dependent qualifies for augmentation

purposes under this part, the augmented

benefits attributable to other qualified

dependents (with respect to the same

miner or surviving spouse), if any, are

adjusted downward, if necessary, so that

the permissible amount of augmented

benefits (the maximum amount for the

number of dependents involved) will

not be exceeded.

(c) Where, based on the entitlement to

benefits of a miner or surviving spouse,

a dependent would have qualified for

augmentation purposes for a prior

month of such miner’s or surviving

spouse’s entitlement had such request

been filed in such prior month, such

request is effective for such prior month.

For any month before the month of

filing such request, however, otherwise

correct benefits previously certified by

the Office may not be changed. Rather

the amount of the augmented benefit

attributable to the dependent filing such

request in the later month is reduced for

each month of the retroactive period to

the extent that may be necessary. This

means that for each month of the

retroactive period, the amount payable

to the dependent filing the later

augmentation request is the difference,

if any, between:

(1) The total amount of augmented

benefits certified for payment for other

dependents for that month, and

(2) The permissible amount of

augmented benefits (the maximum

amount for the number of dependents

involved) payable for the month for all

dependents, including the dependent

filing later.

§ 725.539 More than one reduction event.

If a reduction for receipt of State or

Federal benefits and a reduction on

account of excess earnings are

chargeable to the same month, the

benefit for such month is first reduced

(but not below zero) by the amount of

the State or Federal benefits, and the

remainder of the benefit for such month,

if any, is then reduced (but not below

zero) by the amount of excess earnings

chargeable to such month.

Overpayments; Underpayments

§ 725.540 Overpayments.

(a) General. As used in this subpart,

the term ‘‘overpayment’’ includes:

(1) Payment where no amount is

payable under this part;

(2) Payment in excess of the amount

payable under this part;

(3) A payment under this part which

has not been reduced by the amounts

required by the Act (see § 725.533);

(4) A payment under this part made

to a resident of a State whose residents

are not entitled to benefits (see

§§ 725.402 and 725.403);
3418 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

(5) Payment resulting from failure to

terminate benefits to an individual no

longer entitled thereto;

(6) Duplicate benefits paid to a

claimant on account of concurrent

eligibility under this part and parts 410

or 727 (see § 725.4(d)) of this title or as

provided in § 725.309.

(b) Overpaid beneficiary is living. If

the beneficiary to whom an

overpayment was made is living at the

time of a determination of such

overpayment, is entitled to benefits at

the time of the overpayment, or at any

time thereafter becomes so entitled, no

benefit for any month is payable to such

individual, except as provided in

paragraph (c) of this section, until an

amount equal to the amount of the

overpayment has been withheld or

refunded.

(c) Adjustment by withholding part of

a monthly benefit. Adjustment under

paragraph (b) of this section may be

effected by withholding a part of the

monthly benefit payable to a beneficiary

where it is determined that:

(1) Withholding the full amount each

month would deprive the beneficiary of

income required for ordinary and

necessary living expenses;

(2) The overpayment was not caused

by the beneficiary’s intentionally false

statement or representation, or willful

concealment of, or deliberate failure to

furnish, material information; and

(3) Recoupment can be effected in an

amount of not less than $10 a month

and at a rate which would not

unreasonably extend the period of

adjustment.

(d) Overpaid beneficiary dies before

adjustment. If an overpaid beneficiary

dies before adjustment is completed

under the provisions of paragraph (b) of

this section, recovery of the

overpayment shall be effected through

repayment by the estate of the deceased

overpaid beneficiary, or by withholding

of amounts due the estate of such

deceased beneficiary, or both.

§ 725.541 Notice of waiver of adjustment

or recovery of overpayment.

Whenever a determination is made

that more than the correct amount of

payment has been made, notice of the

provisions of section 204(b) of the

Social Security Act regarding waiver of

adjustment or recovery shall be sent to

the overpaid individual, to any other

individual against whom adjustment or

recovery of the overpayment is to be

effected, and to any operator or carrier

which may be liable to such overpaid

individual.

§ 725.542 When waiver of adjustment or

recovery may be applied.

There shall be no adjustment or

recovery of an overpayment in any case

where an incorrect payment has been

made with respect to an individual:

(a) Who is without fault, and where

(b) Adjustment or recovery would

either:

(1) Defeat the purpose of title IV of the

Act, or

(2) Be against equity and good

conscience.

§ 725.543 Standards for waiver of

adjustment or recovery.

The standards for determining the

applicability of the criteria listed in

§ 725.542 shall be the same as those

applied by the Social Security

Administration under §§ 410.561

through 410.561h of this title.

§ 725.544 Collection and compromise of

claims for overpayment.

(a) General effect of the Federal

Claims Collection Act of 1966. In

accordance with the Federal Claims

Collection Act of 1966 and applicable

regulations, claims by the Office against

an individual for recovery of an

overpayment under this part not

exceeding the sum of $ 20,000,

exclusive of interest, may be

compromised, or collection suspended

or terminated, where such individual or

his or her estate does not have the

present or prospective ability to pay the

full amount of the claim within a

reasonable time (see paragraph (c) of

this section), or the cost of collection is

likely to exceed the amount of recovery

(see paragraph (d) of this section),

except as provided under paragraph (b)

of this section.

(b) When there will be no

compromise, suspension, or termination

of collection of a claim for overpayment.

(1) In any case where the overpaid

individual is alive, a claim for

overpayment will not be compromised,

nor will there be suspension or

termination of collection of the claim by

the Office, if there is an indication of

fraud, the filing of a false claim, or

misrepresentation on the part of such

individual or on the part of any other

party having any interest in the claim.

(2) In any case where the overpaid

individual is deceased:

(i) A claim for overpayment in excess

of $5,000 will not be compromised, nor

will there be suspension or termination

of collection of the claim by the Office

if there is an indication of fraud, the

filing of a false claim, or

misrepresentation on the part of such

deceased individual; and

(ii) A claim for overpayment,

regardless of the amount, will not be

compromised, nor will there be

suspension or termination of collection

of the claim by the Office if there is an

indication that any person other than

the deceased overpaid individual had a

part in the fraudulent action which

resulted in the overpayment.

(c) Inability to pay claim for recovery

of overpayment. In determining whether

the overpaid individual is unable to pay

a claim for recovery of an overpayment

under this part, the Office shall consider

the individual’s age, health, present and

potential income (including inheritance

prospects), assets (e.g., real property,

savings account), possible concealment

or improper transfer of assets, and assets

or income of such individual which

may be available in enforced collection

proceedings. The Office will also

consider exemptions available to such

individual under the pertinent State or

Federal law in such proceedings. In the

event the overpaid individual is

deceased, the Office shall consider the

available assets of the estate, taking into

account any liens or superior claims

against the estate.

(d) Cost of collection or litigative

probabilities. Where the probable costs

of recovering an overpayment under this

part would not justify enforced

collection proceedings for the full

amount of the claim, or where there is

doubt concerning the Office’s ability to

establish its claim as well as the time

which it will take to effect such

collection, a compromise or settlement

for less than the full amount may be

considered.

(e) Amount of compromise. The

amount to be accepted in compromise of

a claim for overpayment under this part

shall bear a reasonable relationship to

the amount which can be recovered by

enforced collection proceedings, giving

due consideration to the exemption

available to the overpaid individual

under State or Federal law and the time

which collection will take.

(f) Payment. Payment of the amount

the Office has agreed to accept as a

compromise in full settlement of a claim

for recovery of an overpayment under

this part shall be made within the time

and in the manner set by the Office. A

claim for the overpayment shall not be

considered compromised or settled until

the full payment of the compromised

amount has been made within the time

and manner set by the Office. Failure of

the overpaid individual or his or her

estate to make such payment as

provided shall result in reinstatement of

the full amount of the overpayment less

any amounts paid prior to such default.

(Approved by the Office of Management and

Budget under control number 1215–0144)
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3419

(Pub. L. No. 96–511)

§ 725.545 Underpayments.

(a) General. As used in this subpart,

the term ‘‘underpayment’’ includes a

payment in an amount less than the

amount of the benefit due for such

month, and nonpayment where some

amount of such benefits is payable.

(b) Underpaid individual is living. If

an individual to whom an

underpayment was made is living, the

deficit represented by such

underpayment shall be paid to such

individual either in a single payment (if

he or she is not entitled to a monthly

benefit or if a single payment is

requested by the claimant in writing) or

by increasing one or more monthly

benefit payments to which such

individual becomes entitled.

(c) Underpaid individual dies before

adjustment of underpayment. If an

individual to whom an underpayment

was made dies before receiving payment

of the deficit or negotiating the check or

checks representing payment of the

deficit, such payment shall be

distributed to the living person (or

persons) in the highest order of priority

as follows:

(1) The deceased individual’s

surviving spouse who was either:

(i) Living in the same household with

the deceased individual at the time of

such individual’s death; or

(ii) In the case of a deceased miner,

entitled for the month of death to black

lung benefits as his or her surviving

spouse or surviving divorced spouse.

(2) In the case of a deceased miner or

spouse his or her child entitled to

benefits as the surviving child of such

miner or surviving spouse for the month

in which such miner or spouse died (if

more than one such child, in equal

shares to each such child).

(3) In the case of a deceased miner,

his parent entitled to benefits as the

surviving parent of such miner for the

month in which such miner died (if

more than one such parent, in equal

shares to each such parent).

(4) The surviving spouse of the

deceased individual who does not

qualify under paragraph (c)(1) of this

section.

(5) The child or children of the

deceased individual who do not qualify

under paragraph (c)(2) of this section (if

more than one such child, in equal

shares to each such child).

(6) The parent or parents of the

deceased individual who do not qualify

under paragraph (c)(3) of this section (if

more than one such parent, in equal

shares to each such parent).

(7) The legal representative of the

estate of the deceased individual as

defined in paragraph (e) of this section.

(d) Deceased beneficiary. In the event

that a person, who is otherwise

qualified to receive payments as the

result of a deficit caused by an

underpayment under the provisions of

paragraph (c) of this section, dies before

receiving payment or before negotiating

the check or checks representing such

payment, his or her share of the

underpayment shall be divided among

the remaining living person(s) in the

same order or priority. In the event that

there is (are) no other such person(s),

the underpayment shall be paid to the

living person(s) in the next lower order

of priority under paragraph (c) of this

section.

(e) Definition of legal representative.

The term ‘‘legal representative,’’ for the

purpose of qualifying for receipt of an

underpayment, generally means the

executor or the administrator of the

estate of the deceased beneficiary.

However, it may also include an

individual, institution or organization

acting on behalf of an unadministered

estate, provided the person can give the

Office good acquittance (as defined in

paragraph (f) of this section). The

following persons may qualify as legal

representative for purposes of this

section, provided they can give the

Office good acquittance:

(1) A person who qualifies under a

State’s ‘‘small estate’’ statute; or

(2) A person resident in a foreign

country who under the laws and

customs of that country, has the right to

receive assets of the estate; or

(3) A public administrator; or

(4) A person who has the authority

under applicable law to collect the

assets of the estate of the deceased

beneficiary.

(f) Definition of ‘‘good acquittance.’’ A

person is considered to give the Office

‘‘good acquittance’’ when payment to

that person will release the Office from

further liability for such payment.

§ 725.546 Relation to provisions for

reductions or increases.

The amount of an overpayment or an

underpayment is the difference between

the amount to which the beneficiary

was actually entitled and the amount

paid. Overpayment and underpayment

simultaneously outstanding against the

same beneficiary shall first be adjusted

against one another before adjustment

pursuant to the other provisions of this

subpart.

§ 725.547 Applicability of overpayment

and underpayment provisions to operator

or carrier.

(a) The provisions of this subpart

relating to overpayments and

underpayments shall be applicable to

overpayments and underpayments made

by responsible operators or their

insurance carriers, as appropriate.

(b) No operator or carrier may recover,

or make an adjustment of, an

overpayment without prior application

to, and approval by, the Office which

shall exercise full supervisory authority

over the recovery or adjustment of all

overpayments.

(c) In any case involving either

overpayments or underpayments, the

Office may take any necessary action,

and district directors may issue

appropriate orders to protect the rights

of the parties.

(d) Disputes arising out of orders so

issued shall be resolved by the

procedures set out in subpart F of this

part.

Subpart I—Enforcement of Liability;

Reports

§ 725.601 Enforcement generally.

(a) The Act, together with certain

incorporated provisions from the

Longshoremen’s and Harbor Workers’

Compensation Act, contains a number

of provisions which subject an operator

or other employer, claimants and others

to penalties for failure to comply with

certain provisions of the Act, or failure

to commence and continue prompt

periodic payments to a beneficiary.

(b) It is the policy and intent of the

Department to vigorously enforce the

provisions of this part through the use

of the remedies provided by the Act.

Accordingly, if an operator refuses to

pay benefits with respect to a claim for

which the operator has been adjudicated

liable, the Director shall invoke and

execute the lien on the property of the

operator as described in § 725.603.

Enforcement of this lien shall be

pursued in an appropriate U.S. district

court. If the Director determines that the

remedy provided by § 725.603 may not

be sufficient to guarantee the continued

compliance with the terms of an award

or awards against the operator, the

Director shall in addition seek an

injunction in the U.S. district court to

prohibit future noncompliance by the

operator and such other relief as the

court considers appropriate (see

§ 725.604). If an operator unlawfully

suspends or terminates the payment of

benefits to a claimant, the district

director shall declare the award in

default and proceed in accordance with

§ 725.605. In all cases payments in
3420 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

addition to compensation (see

§ 725.607) and interest (see § 725.608)

shall be sought by the Director or

awarded by the district director.

(c) In certain instances the remedies

provided by the Act are concurrent; that

is, more than one remedy might be

appropriate in any given case. In such

a case, the Director shall select the

remedy or remedies appropriate for the

enforcement action. In making this

selection, the Director shall consider the

best interests of the claimant as well as

those of the fund.

§ 725.602 Reimbursement of the fund.

(a) In any case in which the fund has

paid benefits, including medical

benefits, on behalf of an operator or

other employer which is determined

liable therefore, or liable for a part

thereof, such operator or other employer

shall simultaneously with the first

payment of benefits made to the

beneficiary, reimburse the fund (with

interest) for the full amount of all

benefit payments made by the fund with

respect to the claim.

(b) In any case where benefit

payments have been made by the fund,

the fund shall be subrogated to the

rights of the beneficiary. The Secretary

of Labor may, as appropriate, exercise

such subrogation rights.

§ 725.603 Payments by the fund on behalf

of an operator; liens.

(a) If an amount is paid out of the

fund to an individual entitled to

benefits under this part or part 727 of

this subchapter (see § 725.4(d)) on

behalf of an operator or other employer

which is or was required to pay or

secure the payment of all or a portion

of such amount (see § 725.522), the

operator or other employer shall be

liable to the United States for repayment

to the fund of the amount of benefits

properly attributable to such operator or

other employer.

(b) If an operator or other employer

liable to the fund refuses to pay, after

demand, the amount of such liability,

there shall be a lien in favor of the

United States upon all property and

rights to property, whether real or

personal, belonging to such operator or

other employer. The lien arises on the

date on which such liability is finally

determined, and continues until it is

satisfied or becomes unenforceable by

reason of lapse of time.

(c)(1) Except as otherwise provided

under this section, the priority of the

lien shall be determined in the same

manner as under section 6323 of the

Internal Revenue Code of 1954.

(2) In the case of a bankruptcy or

insolvency proceeding, the lien imposed

under this section shall be treated in the

same manner as a lien for taxes due and

owing to the United States for purposes

of the Bankruptcy Act or section 3466

of the Revised Statutes (31 U.S.C. 191).

(3) For purposes of applying section

6323(a) of the Internal Revenue Code of

1954 to determine the priority between

the lien imposed under this section and

the Federal tax lien, each lien shall be

treated as a judgment lien arising as of

the time notice of such lien is filed.

(4) For purposes of the section, notice

of the lien imposed hereunder shall be

filed in the same manner as under

section 6323(f) (disregarding paragraph

(4) thereof) and (g) of the Internal

Revenue Code of 1954.

(5) In any case where there has been

a refusal or neglect to pay the liability

imposed under this section, the

Secretary of Labor may bring a civil

action in a district court of the United

States to enforce the lien of the United

States under this section with respect to

such liability or to subject any property,

of whatever nature, of the operator, or

in which it has any right, title, or

interest, to the payment of such liability.

(6) The liability imposed by this

paragraph may be collected at a

proceeding in court if the proceeding is

commenced within 6 years after the date

upon which the liability was finally

determined, or prior to the expiration of

any period for collection agreed upon in

writing by the operator and the United

States before the expiration of such 6-

year period. This period of limitation

shall be suspended for any period

during which the assets of the operator

are in the custody or control of any

court of the United States, or of any

State, or the District of Columbia, and

for 6 months thereafter, and for any

period during which the operator is

outside the United States if such period

of absence is for a continuous period of

at least 6 months.

§ 725.604 Enforcement of final awards.

Notwithstanding the provisions of

§ 725.603, if an operator or other

employer or its officers or agents fails to

comply with an order awarding benefits

that has become final, any beneficiary of

such award or the district director may

apply for the enforcement of the order

to the Federal district court for the

judicial district in which the injury

occurred (or to the U.S. District Court

for the District of Columbia if the injury

occurred in the District). If the court

determines that the order was made and

served in accordance with law, and that

such operator or other employer or its

officers or agents have failed to comply

therewith, the court shall enforce

obedience to the order by writ of

injunction or by other proper process,

mandatory or otherwise, to enjoin upon

such operator or other employer and its

officers or agents compliance with the

order.

§ 725.605 Defaults.

(a) Except as is otherwise provided in

this part, no suspension, termination or

other failure to pay benefits awarded to

a claimant is permitted. If an employer

found liable for the payment of such

benefits fails to make such payments

within 30 days after any date on which

such benefits are due and payable, the

person to whom such benefits are

payable may, within one year after such

default, make application to the district

director for a supplementary order

declaring the amount of the default.

(b) If after investigation, notice and

hearing as provided in subparts E and

F of this part, a default is found, the

district director or the administrative

law judge, if a hearing is requested,

shall issue a supplementary order

declaring the amount of the default, if

any. In cases where a lump-sum award

has been made, if the payment in

default is an installment, the district

director or administrative law judge,

may, in his or her discretion, declare the

whole of the award as the amount in

default. The applicant may file a

certified copy of such supplementary

order with the clerk of the Federal

district court for the judicial district in

which the operator has its principal

place of business or maintains an office

or for the judicial district in which the

injury occurred. In case such principal

place of business or office is in the

District of Columbia, a copy of such

supplementary order may be filed with

the clerk of the U.S. District Court for

the District of Columbia. Such

supplementary order shall be final and

the court shall, upon the filing of the

copy, enter judgment for the amount

declared in default by the

supplementary order if such

supplementary order is in accordance

with law. Review of the judgment may

be had as in civil suits for damages at

common law. Final proceedings to

execute the judgment may be had by

writ of execution in the form used by

the court in suits at common law in

actions of assumpsit. No fee shall be

required for filing the supplementary

order nor for entry of judgment thereon,

and the applicant shall not be liable for

costs in a proceeding for review of the

judgment unless the court shall

otherwise direct. The court shall modify

such judgment to conform to any later

benefits order upon presentation of a

certified copy thereof to the court.
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3421

(c) In cases where judgment cannot be

satisfied by reason of the employer’s

insolvency or other circumstances

precluding payment, the district

director shall make payment from the

fund, and in addition, provide any

necessary medical, surgical, and other

treatment required by subpart J of this

part. A defaulting employer shall be

liable to the fund for payment of the

amounts paid by the fund under this

section; and for the purpose of enforcing

this liability, the fund shall be

subrogated to all the rights of the person

receiving such payments or benefits.

§ 725.606 Security for the payment of

benefits.

(a) Following the issuance of an

effective order by a district director (see

§ 725.418), administrative law judge (see

§ 725.479), Benefits Review Board, or

court that requires the payment of

benefits by an operator that has failed to

secure the payment of benefits in

accordance with section 423 of the Act

and § 726.4 of this subchapter, or by a

coal mine construction or transportation

employer, the Director may request that

the operator secure the payment of all

benefits ultimately payable on the

claim. Such operator or other employer

shall thereafter immediately secure the

payment of benefits in accordance with

the provisions of this section, and

provide proof of such security to the

Director. Such security may take the

form of an indemnity bond, a deposit of

cash or negotiable securities in

compliance with §§ 726.106(c) and

726.107 of this subchapter, or any other

form acceptable to the Director.

(b) The amount of security initially

required by this section shall be

determined as follows:

(1) In a case involving an operator

subject to section 423 of the Act and

§ 726.4 of this subchapter, the amount of

the security shall not be less than

$175,000, and may be a higher amount

as determined by the Director, taking

into account the life expectancies of the

claimant and any dependents using the

most recent life expectancy tables

published by the Social Security

Administration; or

(2) In a case involving a coal mine

construction or transportation employer,

the amount of the security shall be

determined by the Director, taking into

account the life expectancies of the

claimant and any dependents using the

most recent life expectancy tables

published by the Social Security

Administration.

(c) If the operator or other employer

fails to provide proof of such security to

the Director within 30 days of its receipt

of the Director’s request to secure the

payment of benefits issued under

paragraph (a), the appropriate

adjudication officer shall issue an order

requiring the operator or other employer

to make a deposit of negotiable

securities with a Federal Reserve Bank

in the amount required by paragraph (a).

Such securities shall comply with the

requirements of §§ 726.106(c) and

726.107 of this subchapter. In a case in

which the effective order was issued by

a district director, the district director

shall be considered the appropriate

adjudication officer. In any other case,

the administrative law judge who issued

the most recent decision in the case, or

such other administrative law judge as

the Chief Administrative Law Judge

shall designate, shall be considered the

appropriate adjudication officer, and

shall issue an order under this

paragraph on motion of the Director.

The administrative law judge shall have

jurisdiction to issue an order under this

paragraph notwithstanding the

pendency of an appeal of the award of

benefits with the Benefits Review Board

or court.

(d) An order issued under this section

shall be considered effective when

issued. Disputes regarding such orders

shall be resolved in accordance with

subpart F of this part.

(e) Notwithstanding any further

review of the order in accordance with

subpart F of this part, if an operator or

other employer subject to an order

issued under this section fails to comply

with such order, the appropriate

adjudication officer shall certify such

non-compliance to the appropriate

United States district court in

accordance with § 725.351(c).

(f) Security posted in accordance with

this section may be used to make

payment of benefits that become due

with respect to the claim in accordance

with § 725.502. In the event that either

the order awarding compensation or the

order issued under this section is

vacated or reversed, the operator or

other employer may apply to the

appropriate adjudication officer for an

order authorizing the return of any

amounts deposited with the United

States Treasurer and not yet disbursed,

and such application shall be granted. If

at any time the Director determines that

additional security is required beyond

that initially required by paragraph (b),

he may request the operator or other

employer to increase the amount. Such

request shall be treated as if it were

issued under paragraph (a) of this

section.

(g) If a coal mine construction or

transportation employer fails to comply

with an order issued under paragraph

(c), and such employer is a corporation,

the provisions of § 725.609 shall be

applicable to the president, secretary,

and treasurer of such employer.

§ 725.607 Payments in addition to

compensation.

(a) If any benefits payable under the

terms of an award by a district director

(§ 725.419(d)), a decision and order filed

and served by an administrative law

judge (§ 725.478), or a decision filed by

the Board or a U.S. court of appeals, are

not paid by an operator or other

employer ordered to make such

payments within 10 days after such

payments become due, there shall be

added to such unpaid benefits an

amount equal to 20 percent thereof,

which shall be paid to the claimant at

the same time as, but in addition to,

such benefits, unless review of the order

making such award is sought as

provided in section 21 of the LHWCA

and an order staying payments has been

issued.

(b) If, on account of an operator’s or

other employer’s failure to pay benefits

as provided in paragraph (a) of this

section, benefit payments are made by

the fund, the eligible claimant shall

nevertheless be entitled to receive such

additional compensation to which he or

she may be eligible under paragraph (a)

of this section, with respect to all

amounts paid by the fund on behalf of

such operator or other employer.

(c) The fund shall not be liable for

payments in addition to compensation

under any circumstances.

§ 725.608 Interest.

(a)(1) In any case in which an operator

fails to pay benefits that are due

(§ 725.502), the beneficiary shall also be

entitled to simple annual interest,

computed from the date on which the

benefits were due. The interest shall be

computed through the date on which

the operator paid the benefits, except

that the beneficiary shall not be entitled

to interest for any period following the

date on which the beneficiary received

payment of any benefits from the fund

pursuant to § 725.522.

(2) In any case in which an operator

is liable for the payment of retroactive

benefits, the beneficiary shall also be

entitled to simple annual interest on

such benefits, computed from 30 days

after the date of the first determination

that such an award should be made. The

first determination that such an award

should be made may be a district

director’s initial determination of

entitlement, an award made by an

administrative law judge or a decision

by the Board or a court, whichever is the

first such determination of entitlement

made upon the claim.
3422 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

(3) In any case in which an operator

is liable for the payment of additional

compensation (§ 725.607), the

beneficiary shall also be entitled to

simple annual interest computed from

the date upon which the beneficiary’s

right to additional compensation first

arose.

(4) In any case in which an operator

is liable for the payment of medical

benefits, the beneficiary or medical

provider to whom such benefits are

owed shall also be entitled to simple

annual interest, computed from the date

upon which the services were rendered,

or from 30 days after the date of the first

determination that the miner is

generally entitled to medical benefits,

whichever is later. The first

determination that the miner is

generally entitled to medical benefits

may be a district director’s initial

determination of entitlement, an award

made by an administrative law judge or

a decision by the Board or a court,

whichever is the first such

determination of general entitlement

made upon the claim. The interest shall

be computed through the date on which

the operator paid the benefits, except

that the beneficiary shall not be entitled

to interest for any period following the

date on which the beneficiary received

payment of any benefits from the fund

pursuant to § 725.522 or subpart I of this

part.

(b) If an operator or other employer

fails or refuses to pay any or all benefits

due pursuant to an award of benefits or

an initial determination of eligibility

made by the district director and the

fund undertakes such payments, such

operator or other employer shall be

liable to the fund for simple annual

interest on all payments made by the

fund for which such operator is

determined liable, computed from the

first date on which such benefits are

paid by the fund, in addition to such

operator’s liability to the fund, as is

otherwise provided in this part. Interest

payments owed pursuant to this

paragraph shall be paid directly to the

fund.

(c) In any case in which an operator

is liable for the payment of an attorney’s

fee pursuant to § 725.367, and the

attorney’s fee is payable because the

award of benefits has become final, the

attorney shall also be entitled to simple

annual interest, computed from the date

on which the attorney’s fee was

awarded. The interest shall be

computed through the date on which

the operator paid the attorney’s fee.

(d) The rates of interest applicable to

paragraphs (a), (b), and (c) of this

section shall be computed as follows:

(1) For all amounts outstanding prior

to January 1, 1982, the rate shall be 6%

simple annual interest;

(2) For all amounts outstanding for

any period during calendar year 1982,

the rate shall be 15% simple annual

interest; and

(3) For all amounts outstanding

during any period after calendar year

1982, the rate shall be simple annual

interest at the rate established by section

6621 of the Internal Revenue Code of

1954 which is in effect for such period.

(e) The fund shall not be liable for the

payment of interest under any

circumstances, other than the payment

of interest on advances from the United

States Treasury as provided by section

9501(c) of the Internal Revenue Code of

1954.

§ 725.609 Enforcement against other

persons.

In any case in which an award of

benefits creates obligations on the part

of an operator or insurer that may be

enforced under the provisions of this

subpart, such obligations may also be

enforced, in the discretion of the

Secretary or district director, as follows:

(a) In a case in which the operator is

a sole proprietorship or partnership,

against any person who owned, or was

a partner in, such operator during any

period commencing on or after the date

on which the miner was last employed

by the operator;

(b) In a case in which the operator is

a corporation that failed to secure its

liability for benefits in accordance with

section 423 of the Act and § 726.4, and

the operator has not secured its liability

for the claim in accordance with

§ 725.606, against any person who

served as the president, secretary, or

treasurer of such corporation during any

period commencing on or after the date

on which the miner was last employed

by the operator;

(c) In a case in which the operator is

no longer capable of assuming its

liability for the payment of benefits

(§ 725.494(e)), against any operator

which became a successor operator with

respect to the liable operator (§ 725.492)

after the date on which the claim was

filed, beginning with the most recent

such successor operator;

(d) In a case in which the operator is

no longer capable of assuming its

liability for the payment of benefits

(§ 725.494(e)), and such operator was a

subsidiary of a parent company or a

product of a joint venture, or was

substantially owned or controlled by

another business entity, against such

parent entity, any member of such joint

venture, or such controlling business

entity; or

(e) Against any other person who has

assumed or succeeded to the obligations

of the operator or insurer by operation

of any state or federal law, or by any

other means.

§ 725.620 Failure to secure benefits; other

penalties.

(a) If an operator fails to discharge its

insurance obligations under the Act, the

provisions of subpart D of part 726 shall

apply.

(b) Any employer who knowingly

transfers, sells, encumbers, assigns, or in

any manner disposes of, conceals,

secrets, or destroys any property

belonging to such employer, after one of

its employees has been injured within

the purview of the Act, and with intent

to avoid the payment of benefits under

the Act to such miner or his or her

dependents, shall be guilty of a

misdemeanor and, upon conviction

thereof, shall be punished by a fine of

not more than $1,000, or by

imprisonment for not more than one

year, or by both. In any case where such

employer is a corporation, the president,

secretary, and treasurer thereof shall be

also severally liable for such penalty or

imprisonment as well as jointly liable

with such corporation for such fine.

(c) No agreement by a miner to pay

any portion of a premium paid to a

carrier by such miner’s employer or to

contribute to a benefit fund or

department maintained by such

employer for the purpose of providing

benefits or medical services and

supplies as required by this part shall be

valid; and any employer who makes a

deduction for such purpose from the

pay of a miner entitled to benefits under

the Act shall be guilty of a misdemeanor

and upon conviction thereof shall be

punished by a fine of not more than

$1,000.

(d) No agreement by a miner to waive

his or her right to benefits under the Act

and the provisions of this part shall be

valid.

(e) This section shall not affect any

other liability of the employer under

this part.

§ 725.621 Reports.

(a) Upon making the first payment of

benefits and upon suspension,

reduction, or increase of payments, the

operator or other employer responsible

for making payments shall immediately

notify the district director of the action

taken, in accordance with a form

prescribed by the Office.

(b) Within 16 days after final payment

of benefits has been made by an

employer, such employer shall so notify

the district director, in accordance with

a form prescribed by the Office, stating
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that such final payment, has been made,

the total amount of benefits paid, the

name of the beneficiary, and such other

information as the Office deems

pertinent.

(c) The Director may from time to

time prescribe such additional reports to

be made by operators, other employers,

or carriers as the Director may consider

necessary for the efficient

administration of the Act.

(d) Any employer who fails or refuses

to file any report required of such

employer under this section shall be

subject to a civil penalty not to exceed

$500 for each failure or refusal, which

penalty shall be determined in

accordance with the procedures set

forth in subpart D of part 726, as

appropriate. The maximum penalty

applicable to any violation of this

paragraph that takes place after

[effective date of the final rule] shall be

$550.

(e) No request for information or

response to such request shall be

considered a report for purposes of this

section or the Act, unless it is so

designated by the Director or by this

section.

(Approved by the Office of Management and

Budget under control number 1215–0064)

(Pub. L. No. 96–511)

Subpart J—Medical Benefits and

Vocational Rehabilitation

§ 725.701 Availability of medical benefits.

(a) A miner who is determined to be

eligible for benefits under this part or

part 727 of this subchapter (see

§ 725.4(d)) is entitled to medical

benefits as set forth in this subpart as of

the date of his or her claim, but in no

event before January 1, 1974. No

medical benefits shall be provided to

the survivor or dependent of a miner

under this part.

(b) A responsible operator, other

employer, or where there is neither, the

fund, shall furnish a miner entitled to

benefits under this part with such

medical, surgical, and other attendance

and treatment, nursing and hospital

services, medicine and apparatus, and

any other medical service or supply, for

such periods as the nature of the miner’s

pneumoconiosis and ancillary

pulmonary conditions and disability

require.

(c) The medical benefits referred to in

paragraphs (a) and (b) of this section

shall include palliative measures useful

only to prevent pain or discomfort

associated with the miner’s

pneumoconiosis or attendant disability.

(d) The costs recoverable under this

subpart shall include the reasonable

cost of travel necessary for medical

treatment (to be determined in

accordance with prevailing United

States government mileage rates) and

the reasonable documented cost to the

miner or medical provider incurred in

communicating with the employer,

carrier, or district director on matters

connected with medical benefits.

(e) If a miner receives treatment, as

described in this section, for any

pulmonary disorder, there shall be a

rebuttable presumption that the disorder

is caused or aggravated by the miner’s

pneumoconiosis. The presumption may

be rebutted by evidence that the specific

disorder being treated is neither related

to, nor aggravated by, the miner’s

pneumoconiosis. The party liable for the

payment of benefits shall bear the

burden to rebut the presumption (see

§ 725.103).

(f) Evidence that the miner does not

have pneumoconiosis or is not totally

disabled by pneumoconiosis arising out

of coal mine employment is insufficient

to establish any fact concerning a

miner’s entitlement to medical benefits

under this subpart.

§ 725.702 Claims for medical benefits only

under section 11 of the Reform Act.

(a) Section 11 of the Reform Act

directs the Secretary of Health,

Education and Welfare to notify each

miner receiving benefits under part B of

title IV of the Act that he or she may file

a claim for medical treatment benefits

described in this subpart. Section

725.308(b) of this subpart provides that

a claim for medical treatment benefits

shall be filed on or before December 31,

1980, unless the period is enlarged for

good cause shown. This section sets

forth the rules governing the processing,

adjudication, and payment of claims

filed under section 11.

(b) (1) A claim filed pursuant to the

notice described in paragraph (a) of this

section shall be considered a claim for

medical benefits only, and shall be filed,

processed, and adjudicated in

accordance with the provisions of this

part, except as provided in this section.

While a claim for medical benefits must

be treated as any other claim filed under

part C of title IV of the Act, the

Department shall accept the Social

Security Administration’s finding of

entitlement as its initial determination.

(2) In the case of a part B beneficiary

whose coal mine employment

terminated before January 1, 1970, the

Secretary shall make an immediate

award of medical benefits. Where the

part B beneficiary’s coal mine

employment terminated on or after

January 1, 1970, the Secretary shall

immediately authorize the payment of

medical benefits and thereafter inform

the responsible operator, if any, of the

operator’s right to contest the claimant’s

entitlement for medical benefits.

(c) A miner on whose behalf a claim

is filed under this section (see

§ 725.301) must have been alive on

March 1, 1978, in order for the claim to

be considered.

(d) The criteria contained in subpart

C of part 727 of this subchapter (see

§ 725.4(d)) are applicable to claims for

medical benefits filed under this

section.

(e) No determination made with

respect to a claim filed under this

section shall affect any determination

previously made by the Social Security

Administration. The Social Security

Administration may, however, reopen a

previously approved claim if the

conditions set forth in § 410.672(c) of

this chapter are present. These

conditions are generally limited to fraud

or concealment.

(f) If medical benefits are awarded

under this section, such benefits shall

be payable by a responsible coal mine

operator (see subpart G of this part), if

the miner’s last employment occurred

on or after January 1, 1970, and in all

other cases by the fund. An operator

which may be required to provide

medical treatment benefits to a miner

under this section shall have the right

to participate in the adjudication of the

claim as is otherwise provided in this

part.

(g) Any miner whose coal mine

employment terminated after January 1,

1970, may be required to submit to a

medical examination requested by an

identified operator. The unreasonable

refusal to submit to such an

examination shall have the same

consequences as are provided under

§ 725.414.

(h) If a miner is determined eligible

for medical benefits in accordance with

this section, such benefits shall be

provided from the date of filing, except

that such benefits may also include

payments for any unreimbursed medical

treatment costs incurred personally by

such miner during the period from

January 1, 1974, to the date of filing

which are attributable to medical care

required as a result of the miner’s total

disability due to pneumoconiosis. No

reimbursement for health insurance

premiums, taxes attributable to any

public health insurance coverage, or

other deduction or payments made for

the purpose of securing third party

liability for medical care costs is

authorized by this section. If a miner

seeks reimbursement for medical care

costs personally incurred before the

filing of a claim under this section, the

district director shall require
3424 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

documented proof of the nature of the

medical service provided, the identity of

the medical provider, the cost of the

service, and the fact that the cost was

paid by the miner, before

reimbursement for such cost may be

awarded.

§ 725.703 Physician defined.

The term ‘‘physician’’ includes only

doctors of medicine (MD) and

osteopathic practitioners within the

scope of their practices as defined by

State law. No treatment or medical

services performed by any other

practitioner of the healing arts is

authorized by this part, unless such

treatment or service is authorized and

supervised both by a physician as

defined in this section and the district

director.

§ 725.704 Notification of right to medical

benefits; authorization of treatment.

(a) Upon notification to a miner of

such miner’s entitlement to benefits, the

Office shall provide the miner with a

list of authorized treating physicians

and medical facilities in the area of the

miner’s residence. The miner may select

a physician from this list or may select

another physician with approval of the

Office. Where emergency services are

necessary and appropriate,

authorization by the Office shall not be

required.

(b) The Office may, on its own

initiative, or at the request of a

responsible operator, order a change of

physicians or facilities, but only where

it has been determined that the change

is desirable or necessary in the best

interest of the miner. The miner may

change physicians or facilities subject to

the approval of the Office.

(c) If adequate treatment cannot be

obtained in the area of the claimant’s

residence, the Office may authorize the

use of physicians or medical facilities

outside such area as well as

reimbursement for travel expenses and

overnight accommodations.

§ 725.705 Arrangements for medical care.

(a) Operator liability. If an operator

has been determined liable for the

payment of benefits to a miner, the

Office shall notify such operator or

insurer of the names, addresses, and

telephone numbers of the authorized

providers of medical benefits chosen by

an entitled miner, and shall require the

operator or insurer to:

(1) Notify the miner and the providers

chosen that such operator will be

responsible for the cost of medical

services provided to the miner on

account of the miner’s total disability

due to pneumoconiosis;

(2) Designate a person or persons with

decisionmaking authority with whom

the Office, the miner and authorized

providers may communicate on matters

involving medical benefits provided

under this subpart and notify the Office,

miner and providers of such

designation;

(3) Make arrangements for the direct

reimbursement of providers for their

services.

(b) Fund liability. If there is no

operator found liable for the payment of

benefits, the Office shall make necessary

arrangements to provide medical care to

the miner, notify the miner and medical

care facility selected of the liability of

the fund, designate a person or persons

with whom the miner or provider may

communicate on matters relating to

medical care, and make arrangements

for the direct reimbursement of the

medical provider.

§ 725.706 Authorization to provide medical

services.

(a) Except as provided in paragraph

(b) of this section, medical services from

an authorized provider which are

payable under § 725.701 shall not

require prior approval of the Office or

the responsible operator.

(b) Except where emergency treatment

is required, prior approval of the Office

or the responsible operator shall be

obtained before any hospitalization or

surgery, or before ordering an apparatus

for treatment where the purchase price

exceeds $300. A request for approval of

non-emergency hospitalization or

surgery shall be acted upon

expeditiously, and approval or

disapproval will be given by telephone

if a written response cannot be given

within 7 days following the request. No

employee of the Department of Labor,

other than a district director or the

Chief, Branch of Medical Analysis and

Services, DCMWC, is authorized to

approve a request for hospitalization or

surgery by telephone.

(c) Payment for medical services,

treatment, or an apparatus shall be made

at no more than the rate prevailing in

the community in which the providing

physician, medical facility or supplier is

located.

§ 725.707 Reports of physicians and

supervision of medical care.

(a) Within 30 days following the first

medical or surgical treatment provided

under § 725.701, the treating physician

or facility shall furnish to the Office and

the responsible operator, if any, a report

of such treatment.

(b) In order to permit continuing

supervision of the medical care

provided to the miner with respect to

the necessity, character and sufficiency

of any medical care furnished or to be

furnished, the treating physician,

facility, employer or carrier shall

provide such reports in addition to

those required by paragraph (a) of this

section as the Office may from time to

time require. Within the discretion of

the district director, payment may be

refused to any medical provider who

fails to submit any report required by

this section.

§ 725.708 Disputes concerning medical

benefits.

(a) Whenever a dispute develops

concerning medical services under this

part, the district director shall attempt

to informally resolve such dispute. In

this regard the district director may, on

his or her own initiative or at the

request of the responsible operator order

the claimant to submit to an

examination by a physician selected by

the district director.

(b) If no informal resolution is

accomplished, the district director shall

refer the case to the Office of

Administrative Law Judges for hearing

in accordance with this part. Any such

hearing shall be scheduled at the

earliest possible time and shall take

precedence over all other requests for

hearing except for prior requests for

hearing arising under this section and as

provided by § 727.405 of this subchapter

(see § 725.4(d)). During the pendency of

such adjudication, the Director may

order the payment of medical benefits

prior to final adjudication under the

same conditions applicable to benefits

awarded under § 725.522.

(c) In the development or adjudication

of a dispute over medical benefits, the

adjudication officer is authorized to take

whatever action may be necessary to

protect the health of a totally disabled

miner.

(d) Any interested medical provider

may, if appropriate, be made a party to

a dispute over medical benefits.

§ 725.710 Objective of vocational

rehabilitation.

The objective of vocational

rehabilitation is the return of a miner

who is totally disabled for work in or

around a coal mine and who is unable

to utilize those skills which were

employed in the miner’s coal mine

employment to gainful employment

commensurate with such miner’s

physical impairment. This objective

may be achieved through a program of

re-evaluation and redirection of the

miner’s abilities, or retraining in another

occupation, and selective job placement

assistance.
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3425

§ 725.711 Requests for referral to

vocational rehabilitation assistance.

Each miner who has been determined

entitled to receive benefits under part C

of title IV of the Act shall be informed

by the OWCP of the availability and

advisability of vocational rehabilitation

services. If such miner chooses to avail

himself or herself of vocational

rehabilitation, his or her request shall be

processed and referred by OWCP

vocational rehabilitation advisors

pursuant to the provisions of §§ 702.501

through 702.508 of this chapter as is

appropriate.

5. Part 726 is proposed to be revised

as follows:

PART 726—BLACK LUNG BENEFITS;

REQUIREMENTS FOR COAL MINE

OPERATOR’S INSURANCE

Subpart A—General

Sec.

726.1 Statutory insurance requirements for

coal mine operators.

726.2 Purpose and scope of this part.

726.3 Relationship of this part to other parts

in this subchapter.

726.4 Who must obtain insurance coverage.

726.5 Effective date of insurance coverage.

726.6 The Office of Workers’ Compensation

Programs.

726.7 Forms, submission of information.

726.8 Definitions.

Subpart B—Authorization of Self-Insurers

726.101 Who may be authorized to selfinsure.

726.102 Application for authority to

become a self-insurer; how filed;

information to be submitted.

726.103 Application for authority to selfinsure; effect of regulations contained in

this part.

726.104 Action by the Office upon

application of operator.

726.105 Fixing the amount of security.

726.106 Type of security.

726.107 Deposits of negotiable securities

with Federal Reserve banks or the

Treasurer of the United States; authority

to sell such securities; interest thereon.

726.108 Withdrawal of negotiable

securities.

726.109 Increase or reduction in the

amount of security.

726.110 Filing of agreement and

undertaking.

726.111 Notice of authorization to selfinsure.

726.112 Reports required of self-insurer;

examination of accounts of self-insurer.

726.113 Disclosure of confidential

information.

726.114 Period of authorization as selfinsurer; reauthorization.

726.115 Revocation of authorization to selfinsure.

Subpart C—Insurance Contracts

726.201 Insurance contracts—generally.

726.202 Who may underwrite an operator’s

liability.

726.203 Federal Coal Mine Health and

Safety Act endorsement.

726.204 Statutory policy provisions.

726.205 Other forms of endorsement and

policies.

726.206 Terms of policies.

726.207 Discharge by the carrier of

obligations and duties of operator.

Reports by Carrier

726.208 Report by carrier of issuance of

policy or endorsement.

726.209 Report; by whom sent.

726.210 Agreement to be bound by report.

726.211 Name of one employer only shall

be given in each report.

726.212 Notice of cancellation.

726.213 Reports by carriers concerning the

payment of benefits.

Subpart D—Civil Money Penalties

726.300 Purpose and Scope.

726.301 Definitions.

726.302 Determination of penalty.

726.303 Notification; Investigation.

726.304 Notice of initial assessment.

726.305 Contents of notice.

726.306 Finality of administrative

assessment.

726.307 Form of notice of contest and

request for hearing.

726.308 Service and computation of time.

726.309 Referral to the Office of

Administrative Law Judges.

726.310 Appointment of Administrative

Law Judge and notification of hearing

date.

726.311 Evidence.

726.312 Burdens of proof.

726.313 Decision and Order of

Administrative Law Judge.

726.314 Review by the Secretary.

726.315 Contents.

726.316 Filing and Service.

726.317 Discretionary Review.

726.318 Final decision of the Secretary.

726.319 Retention of official record.

726.320 Collection and recovery of penalty.

Authority: 5 U.S.C. 301, Reorganization

Plan No. 6 of 1950, 15 FR 3174, 30 U.S.C. 901

et seq., 902(f), 925, 932, 933, 934, 936, 945;

33 U.S.C. 901 et seq., Secretary’s Order 7–87,

52 FR 48466, Employment Standards Order

No. 90–02.

Subpart A—General

§ 726.1 Statutory insurance requirements

for coal mine operators.

Section 423 of title IV of the Federal

Coal Mine Health and Safety Act as

amended (hereinafter the Act) requires

each coal mine operator who is

operating or has operated a coal mine in

a State which is not included in the list

published by the Secretary (see part 722

of this chapter) to secure the payment of

benefits for which he may be found

liable under section 422 of the Act and

the provisions of this subchapter by

either:

(a) Qualifying as a self-insurer, or

(b) By subscribing to and maintaining

in force a commercial insurance

contract (including a policy or contract

procured from a State agency).

§ 726.2 Purpose and scope of this part.

(a) This part provides rules directing

and controlling the circumstances under

which a coal mine operator shall fulfill

his insurance obligations under the Act.

(b) This subpart A sets forth the scope

and purpose of this part and generally

describes the statutory framework

within which this part is operative.

(c) Subpart B of this part sets forth the

criteria a coal mine operator must meet

in order to qualify as a self-insurer.

(d) Subpart C of this part sets forth the

rules and regulations of the Secretary

governing contracts of insurance entered

into by coal operators and commercial

insurance sources for the payment of

black lung benefits under part C of the

Act.

(e) Subpart D of this part sets forth the

rules governing the imposition of civil

money penalties on coal mine operators

that fail to secure their liability under

the Act.

§ 726.3 Relationship of this part to other

parts in this subchapter.

(a) This part 726 implements and

effectuates responsibilities for the

payment of black lung benefits placed

upon coal operators by sections 415 and

422 of the Act and the regulations of the

Secretary in this subchapter,

particularly those set forth in part 725

of this subchapter. All definitions,

usages, procedures, and other rules

affecting the responsibilities of coal

operators prescribed in parts 715, 720,

and 725 of this subchapter are hereby

made applicable, as appropriate, to this

part 726.

(b) In the event that an apparent

conflict arises between the

interpretation of any provision in this

part 726 and the interpretation of some

provision appearing in a different part

of this chapter, the conflicting

provisions shall be read harmoniously

to the fullest extent possible. In the

event that a harmonious interpretation

of the provisions is impossible, the

provision or provisions of this part shall

govern insofar as the question is one

which arises out of a dispute over the

responsibilities and obligations of coal

mine operators to secure the payment of

black lung benefits as prescribed by the

Act. No provision of this part shall be

operative as to matters falling outside

the purview of this part.

§ 726.4 Who must obtain insurance

coverage.

(a) Section 423 of part C of title IV of

the Act requires each operator of a coal

mine or former operator in any State
3426 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

which does meet the requirements

prescribed by the Secretary pursuant to

section 411 of part C of title IV of the

Act to self-insure or obtain a policy or

contract of insurance to guarantee the

payment of benefits for which such

operator may be adjudicated liable

under section 422 of the Act. In enacting

sections 422 and 423 of the Act

Congress has unambiguously expressed

its intent that coal mine operators bear

the cost of providing the benefits

established by part C of title IV of the

Act. Section 3 of the Act defines an

‘‘operator’’ as any owner, lessee, or

other person who operates, controls, or

supervises a coal mine.

(b) Section 422(i) of the Act clearly

recognizes that any individual or

business entity who is or was a coal

mine operator may be found liable for

the payment of pneumoconiosis benefits

after December 31, 1973. Within this

framework it is clear that the Secretary

has wide latitude for determining which

operator shall be liable for the payment

of part C benefits. Comprehensive

standards have been promulgated in

subpart G of part 725 of this subchapter

for the purpose of guiding the Secretary

in making such determination. It must

be noted that pursuant to these

standards any parent or subsidiary

corporation, any individual or corporate

partner, or partnership, any lessee or

lessor of a coal mine, any joint venture

or participant in a joint venture, any

transferee or transferor of a corporation

or other business entity, any former,

current, or future operator or any other

form of business entity which has had

or will have a substantial and

reasonably direct interest in the

operation of a coal mine may be

determined liable for the payment of

pneumoconiosis benefits after December

31, 1973. The failure of any such

business entity to self-insure or obtain a

policy or contract of insurance shall in

no way relieve such business entity of

its obligation to pay pneumoconiosis

benefits in respect of any case in which

such business entity’s responsibility for

such payments has been properly

adjudicated. Any business entity

described in this section shall take

appropriate steps to insure that any

liability imposed by part C of the Act on

such business entity shall be

dischargeable.

§ 726.5 Effective date of insurance

coverage.

Pursuant to section 422(c) of part C of

title IV of the Act, no coal mine operator

shall be responsible for the payment of

any benefits whatsoever for any period

prior to January 1, 1974. However, coal

mine operators shall be liable as of

January 1, 1974, for the payment of

benefits in respect of claims which were

filed under section 415 of part B of title

IV of the Act after July 1, 1973. Section

415(a)(3) requires the Secretary to notify

any operator who may be liable for the

payment of benefits under part C of title

IV beginning on January 1, 1974, of the

pendency of a section 415 claim.

Section 415(a)(5) declares that any

operator who has been notified of the

pendency of a section 415 claim shall be

bound by the determination of the

Secretary as to such operator’s liability

and as to the claimant’s entitlement to

benefits as if the claim were filed under

part C of title IV of the Act and section

422 thereof had been applicable to such

operator. Therefore, even though no

benefit payments shall be required of an

operator prior to January 1, 1974, the

liability for these payments may be

finally adjudicated at any time after July

1, 1973. Neither the failure of an

operator to exercise his right to

participate in the adjudication of such a

claim nor the failure of an operator to

obtain insurance coverage in respect of

claims filed after June 30, 1973, but

before January 1, 1974, shall excuse

such operator from his liability for the

payment of benefits to such claimants

under part C of title IV of the Act.

§ 726.6 The Office of Workers’

Compensation Programs.

The Office of Workers’ Compensation

Programs (hereinafter the Office or

OWCP) is that subdivision of the

Employment Standards Administration

of the U.S. Department of Labor which

has been empowered by the Secretary of

Labor to carry out his functions under

section 415 and part C of title IV of the

Act. As noted throughout this part 726

the Office shall perform a number of

functions with respect to the regulation

of both the self-insurance and

commercial insurance programs. All

correspondence with or submissions to

the Office should be addressed as

follows:

Division of Coal Mine Workers’

Compensation, Office of Workers’

Compensation Programs, Employment

Standards Administration, U.S. Department

of Labor, Washington, D.C. 20210

§ 726.7 Forms, submission of information.

Any information required by this part

726 to be submitted to the Office of

Workmen’s Compensation Programs or

any other office or official of the

Department of Labor, shall be submitted

on such forms or in such manner as the

Secretary deems appropriate and has

authorized from time to time for such

purposes.

§ 726.8 Definitions.

In addition to the definitions

provided in part 725 of this chapter, the

following definitions apply to this part:

(a) Director means the Director, Office

of Workers’ Compensation Programs,

and includes any official of the Office of

Workers’ Compensation Programs

authorized by the Director to perform

any of the functions of the Director

under this part and part 725 of this

chapter.

(b) Person includes any individual,

partnership, corporation, association,

business trust, legal representative, or

organized group of persons.

(c) Secretary means the Secretary of

Labor or such other official as the

Secretary shall designate to carry out

any responsibility under this part.

(d) The terms employ and

employment shall be construed as

broadly as possible, and shall include

any relationship under which an

operator retains the right to direct,

control, or supervise the work

performed by a miner, or any other

relationship under which an operator

derives a benefit from the work

performed by a miner. Any individuals

who participate with one or more

persons in the mining of coal, such as

owners, proprietors, partners, and joint

venturers, whether they are

compensated by wages, salaries, piece

rates, shares, profits, or by any other

means, shall be deemed employees.

Subpart B—Authorization of SelfInsurers

§ 726.101 Who may be authorized to selfinsure.

(a) Pursuant to section 423 of part C

of title IV of the Act, authorization to

self-insure against liability incurred by

coal mine operators on account of the

total disability or death of miners due to

pneumoconiosis may be granted or

denied in the discretion of the

Secretary. The provisions of this subpart

describe the minimum requirements

established by the Secretary for

determining whether any particular coal

mine operator shall be authorized as a

self-insurer.

(b) The minimum requirements which

must be met by any operator seeking

authorization to self-insure are as

follows:

(1) Such operator must, at the time of

application, have been in the business

of mining coal for at least the 3

consecutive years prior to such

application; and,

(2) Such operator must demonstrate

the administrative capacity to fully

service such claims as may be filed

against him; and,
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(3) Such operator’s average current

assets over the preceding 3 years (in

computing average current assets such

operator shall not include the amount of

any negotiable securities which he may

be required to deposit to secure his

obligations under the Act) must exceed

current liabilities by the sum of—

(i) The estimated aggregate amount of

black lung benefits (including medical

benefits) which such operator may

expect to be required to pay during the

ensuing year; and,

(ii) The annual premium cost for any

indemnity bond purchased; and

(4) Such operator must obtain

security, in a form approved by the

Office (see § 726.104) and in an amount

to be determined by the Office (see

§ 726.105); and

(5) No operator with fewer than 5 fulltime employee-miners shall be

permitted to self-insure.

(c) No operator who is unable to meet

the requirements of this section should

apply for authorization to self-insure

and no application for self-insurance

shall be approved by the Office until

such time as the amount prescribed by

the Office has been secured as

prescribed in this subpart.

§ 726.102 Application for authority to

become a self-insurer; how filed;

information to be submitted.

(a) How filed. Application for

authority to become a self-insurer shall

be addressed to the Office and be made

on a form provided by the Office. Such

application shall be signed by the

applicant over his typewritten name and

if the applicant is not an individual, by

the principal officer of the applicant

duly authorized to make such

application over his typewritten name

and official designation and shall be

sworn to by him. If the applicant is a

corporation, the corporate seal shall be

affixed. The application shall be filed

with the Office in Washington, D.C.

(b) Information to be submitted. Each

application for authority to self-insure

shall contain:

(1) A statement of the employer’s

payroll report for each of the preceding

3 years;

(2) A statement of the average number

of employees engaged in employment

within the purview of the Act for each

of the preceding 3 years;

(3) A list of the mine or mines to be

covered by any particular self-insurance

agreement. Each such mine or mines

listed shall be described by name and

reference shall be made to the Federal

Identification Number assigned such

mine by the Bureau of Mines, U.S.

Department of the Interior;

(4) A certified itemized statement of

the gross and net assets and liabilities of

the operator for each of the 3 preceding

years in such manner as prescribed by

the Office;

(5) A statement demonstrating the

applicant’s administrative capacity to

provide or procure adequate servicing

for a claim including both medical and

dollar claims; and

(6) In addition to the aforementioned,

the Office may in its discretion, require

the applicant to submit such further

information or such evidence as the

Office may deem necessary to have in

order to enable it to give adequate

consideration to such application.

(c) Who may file. An application for

authorization to self-insure may be filed

by any parent or subsidiary corporation,

partner or partnership, party to a joint

venture or joint venture, individual, or

other business entity which may be

determined liable for the payment of

black lung benefits under part C of title

IV of the Act, regardless of whether such

applicant is directly engaged in the

business of mining coal. However, in

each case for which authorization to

self-insure is granted, the agreement and

undertaking filed pursuant to § 726.110

and the security deposit shall be

respectively filed by and deposited in

the name of the applicant only.

§ 726.103 Application for authority to selfinsure; effect of regulations contained in

this part.

As appropriate, each of the

regulations, interpretations and

requirements contained in this part 726

including those described in subpart C

of this part shall be binding upon each

applicant hereunder and the applicant’s

consent to be bound by all requirements

of the said regulations shall be deemed

to be included in and a part of the

application, as fully as though written

therein.

§ 726.104 Action by the Office upon

application of operator.

(a) Upon receipt of a completed

application for authorization to selfinsure, the Office shall, after

examination of the information

contained in the application deny the

applicant’s request for authorization to

self-insure or, determine the amount of

security which must be given by the

applicant to guarantee the payment of

benefits and the discharge of all other

obligations which may be required of

such applicant under the Act.

(b) The applicant shall thereafter be

notified that he may give security in the

amount fixed by the Office (see

§ 726.105):

(1) In the form of an indemnity bond

with sureties satisfactory to the Office;

(2) By a deposit of negotiable

securities with a Federal Reserve Bank

in compliance with §§ 726.106(c) and

726.107;

(3) In the form of a letter of credit

issued by a financial institution

satisfactory to the Office (except that a

letter of credit shall not be sufficient by

itself to satisfy a self-insurer’s

obligations under this part); or

(4) By funding a trust pursuant to

section 501(c)(21) of title 26 of the

United States Code.

(c) Any applicant who cannot meet

the security deposit requirements

imposed by the Office should proceed to

obtain a commercial policy or contract

of insurance. Any applicant for

authorization to self-insure whose

application has been rejected or who

believes that the security deposit

requirements imposed by the Office are

excessive may, in writing, request that

the Office review its determination. A

request for review should contain such

information as may be necessary to

support the request that the amount of

security required be reduced.

(d) Upon receipt of any such request

the Office shall review its previous

determination in light of any new or

additional information submitted and

inform the applicant whether or not a

reduction in the amount of security

initially required is warranted.

§ 726.105 Fixing the amount of security.

The amount of security to be fixed

and required by the Office shall be such

as the Office shall deem to be necessary

and sufficient to secure the performance

by the applicant of all obligations

imposed upon him as an operator by the

Act. In determining the amount of

security required, the factors that the

Office will consider include, but are not

limited to, the operator’s net worth, the

existence of a guarantee by a parent

corporation, and the operator’s existing

liability for benefits. Other factors such

as the Office may deem relevant to any

particular case shall be considered. The

amount of security which shall be

required may be increased or decreased

when experience or changed conditions

so warrant.

§ 726.106 Type of security.

(a) The Office shall determine the

type or types of security which an

applicant shall or may procure. (See

§ 726.104(b).)

(b) In the event the indemnity bond

option is selected such indemnity bond

shall be in such form and contain such

provisions as the Office may prescribe:

Provided, That only corporations may

act as sureties on such indemnity bonds.

In each case in which the surety on any

such bond is a surety company, such

company must be one approved by the
3428 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

U.S. Treasury Department under the

laws of the United States and the

applicable rules and regulations

governing bonding companies (see

Department of Treasury’s Circular–570).

(c) An applicant for authorization to

self-insure authorized to deposit

negotiable securities to secure his

obligations under the Act in the amount

fixed by the Office shall deposit any

negotiable securities acceptable as

security for the deposit of public

moneys of the United States under

regulations issued by the Secretary of

the Treasury. (See 31 CFR part 225.) The

approval, valuation, acceptance, and

custody of such securities is hereby

committed to the several Federal

Reserve Banks and the Treasurer of the

United States.

§ 726.107 Deposits of negotiable securities

with Federal Reserve banks or the

Treasurer of the United States; authority to

sell such securities; interest thereon.

Deposits of securities provided for by

the regulations in this part shall be

made with any Federal Reserve bank or

any branch of a Federal Reserve bank

designated by the Office, or the

Treasurer of the United States, and shall

be held subject to the order of the Office

with power in the Office, in its

discretion in the event of default by the

said self-insurer, to collect the interest

as it may become due, to sell the

securities or any of them as may be

required to discharge the obligations of

the self-insurer under the Act and to

apply the proceeds to the payment of

any benefits or medical expenses for

which the self-insurer may be liable.

The Office may, however, whenever it

deems it unnecessary to resort to such

securities for the payment of benefits,

authorize the self-insurer to collect

interest on the securities deposited by

him.

§ 726.108 Withdrawal of negotiable

securities.

No withdrawal of negotiable

securities deposited by a self-insurer,

shall be made except upon

authorization by the Office. A selfinsurer discontinuing business, or

discontinuing operations within the

purview of the Act, or providing

security for the payment of benefits by

commercial insurance under the

provisions of the Act may apply to the

Office for the withdrawal of securities

deposited under the regulations in this

part. With such application shall be

filed a sworn statement setting forth:

(a) A list of all outstanding cases in

which benefits are being paid, with the

names of the miners and other

beneficiaries, giving a statement of the

amounts of benefits paid and the

periods for which such benefits have

been paid; and

(b) A similar list of all pending cases

in which no benefits have as yet been

paid. In such cases withdrawals may be

authorized by the Office of such

securities as in the opinion of the Office

may not be necessary to provide

adequate security for the payment of

outstanding and potential liabilities of

such self-insurer under the Act.

§ 726.109 Increase or reduction in the

amount of security.

Whenever in the opinion of the Office

the amount of security given by the selfinsurer is insufficient to afford adequate

security for the payment of benefits and

medical expenses under the Act, the

self-insurer shall, upon demand by the

Office, file such additional security as

the Office may require. At any time

upon application of a self-insurer, or on

the initiative of the Office, when in its

opinion the facts warrant, the amount of

security may be reduced. A self-insurer

seeking such reduction shall furnish

such information as the Office may

request relative to his current affairs, the

nature and hazard of the work of his

employees, the amount of the payroll of

his employees engaged in coal mine

employment within the purview of the

Act, his financial condition, and such

other evidence as may be deemed

material, including a record of payment

of benefits made by him.

§ 726.110 Filing of agreement and

undertaking.

(a) In addition to the requirement that

adequate security be procured as set

forth in this subpart, the applicant for

the authorization to self-insure shall as

a condition precedent to receiving

authorization to act as a self-insurer,

execute and file with the Office an

agreement and undertaking in a form

prescribed and provided by the Office in

which the applicant shall agree:

(1) To pay when due, as required by

the provisions of said Act, all benefits

payable on account of total disability or

death of any of its employee-miners

within the purview of the Act;

(2) In such cases to furnish medical,

surgical, hospital, and other attendance,

treatment, and care as required by the

provisions of the Act;

(3) To provide security in a form

approved by the Office (see § 726.104)

and in an amount established by the

Office (see § 726.105), accordingly as

elected in the application;

(4) To authorize the Office to sell any

negotiable securities so deposited or any

part thereof and from the proceeds

thereof to pay such benefits, medical,

and other expenses and any accrued

penalties imposed by law as it may find

to be due and payable.

(b) At such time when an applicant

has provided the requisite security, such

applicant shall send a completed

agreement and undertaking together

with satisfactory proof that his

obligations and liabilities under the Act

have been secured to the Office in

Washington, D.C.

§ 726.111 Notice of authorization to selfinsure.

Upon receipt of a completed

agreement and undertaking and

satisfactory proof that adequate security

has been provided an applicant for

authorization to self-insure shall be

notified by the Office in writing, that he

is authorized to self-insure to meet the

obligations imposed upon such

applicant by section 415 and part C of

title IV of the Act.

§ 726.112 Reports required of self-insurer;

examination of accounts of self-insurer.

(a) Each operator who has been

authorized to self-insure under this part

shall submit to the Office reports

containing such information as the

Office may from time to time require or

prescribe.

(b) Whenever it deems it to be

necessary, the Office may inspect or

examine the books of account, records,

and other papers of a self-insurer for the

purpose of verifying any financial

statement submitted to the Office by the

self-insurer or verifying any information

furnished to the Office in any report

required by this section, or any other

section of the regulations in this part,

and such self-insurer shall permit the

Office or its duly authorized

representative to make such an

inspection or examination as the Office

shall require. In lieu of this requirement

the Office may in its discretion accept

an adequate report of a certified public

accountant.

(c) Failure to submit or make available

any report or information requested by

the Office from an authorized selfinsurer pursuant to this section may, in

appropriate circumstances result in a

revocation of the authorization to selfinsure.

§ 726.113 Disclosure of confidential

information.

Any financial information or records,

or other information relating to the

business of an authorized self-insurer or

applicant for the authorization of selfinsurance obtained by the Office shall

be exempt from public disclosure to the

extent provided in 5 U.S.C. 552(b) and

the applicable regulations of the
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3429

Department of Labor promulgated

thereunder. (See 29 CFR part 70.)

§ 726.114 Period of authorization as selfinsurer; reauthorization.

(a) No initial authorization as a selfinsurer shall be granted for a period in

excess of 18 months. A self-insurer who

has made an adequate deposit of

negotiable securities in compliance with

§§ 726.106(c) and 726.107 will be

reauthorized for the ensuing fiscal year

without additional security if the Office

finds that his experience as a selfinsurer warrants such action. If it is

determined that such self-insurer’s

experience indicates a need for the

deposit of additional security, no

reauthorization shall be issued for the

ensuing fiscal year until such time as

the Office receives satisfactory proof

that the requisite amount of additional

securities have been deposited. A selfinsurer who currently has on file an

indemnity bond, will receive from the

Office each year a bond form for

execution in contemplation of

reauthorization, and the submission of

such bond duly executed in the amount

indicated by the Office will be deemed

and treated as such self-insurer’s

application for reauthorization for the

ensuing Federal fiscal year.

(b) In each case for which there is an

approved change in the amount of

security provided, a new agreement and

undertaking shall be executed.

(c) Each operator authorized to selfinsure under this part shall apply for

reauthorization for any period during

which it engages in the operation of a

coal mine and for additional periods

after it ceases operating a coal mine.

Upon application by the operator,

accompanied by proof that the security

posted by the operator is sufficient to

secure all benefits potentially payable to

miners formerly employed by the

operator, the Office shall issue a

certification that the operator is exempt

from the requirements of this part based

on its prior operation of a coal mine.

The provisions of subpart D of this part

shall be applicable to any operator that

fails to apply for reauthorization in

accordance with the provisions of this

section.

§ 726.115 Revocation of authorization to

self-insure.

The Office may for good cause shown

suspend or revoke the authorization of

any self-insurer. Failure by a self-insurer

to comply with any provision or

requirement of law or of the regulations

in this part, or with any lawful order or

communication of the Office, or the

failure or insolvency of the surety on his

indemnity bond, or impairment of

financial responsibility of such selfinsurer, may be deemed good cause for

such suspension or revocation.

Subpart C—Insurance Contracts

§ 726.201 Insurance contracts—generally.

Each operator of a coal mine who has

not obtained authorization as a selfinsurer shall purchase a policy or enter

into a contract with a commercial

insurance carrier or State agency.

Pursuant to authority contained in

sections 422(a) and 423 (b) and (c) of

part C of title IV of the Act, this subpart

describes a number of provisions which

are required to be incorporated in a

policy or contract of insurance obtained

by a coal mine operator for the purpose

of meeting the responsibility imposed

upon such operator by the Act in

respect of the total disability or death of

miners due to pneumoconiosis.

§ 726.202 Who may underwrite an

operator’s liability.

Each coal mine operator who is not

authorized to self-insure shall insure

and keep insured the payment of

benefits as required by the Act with any

stock company or mutual company or

association, or with any other person, or

fund, including any State fund while

such company, association, person, or

fund is authorized under the law of any

State to insure workmen’s

compensation.

§ 726.203 Federal Coal Mine Health and

Safety Act endorsement.

(a) The following form of

endorsement shall be attached and

applicable to the standard workmen’s

compensation and employer’s liability

policy prepared by the National Council

on Compensation Insurance affording

coverage under the Federal Coal Mine

Health and Safety Act of 1969, as

amended:

It is agreed that: (1) With respect to

operations in a State designated in item 3 of

the declarations, the unqualified term

‘‘workmen’s compensation law’’ includes

part C of title IV of the Federal Coal Mine

Health and Safety Act of 1969, 30 U.S.C.

section 931–936, and any laws amendatory

thereto, or supplementary thereto, which

may be or become effective while this policy

is in force, and definition (a) of Insuring

Agreement III is amended accordingly; (2)

with respect to such insurance as is afforded

by this endorsement, (a) the States, if any,

named below, shall be deemed to be

designated in item 3 of the declaration; (b)

Insuring Agreement IV(2) is amended to read

‘‘by disease caused or aggravated by exposure

of which the last day of the last exposure, in

the employment of the insured, to conditions

causing the disease occurs during the policy

period, or occurred prior to (effective date)

and claim based on such disease is first filed

against the insured during the policy

period.’’

(b) The term ‘‘effective date’’ as used

in the enforcement provisions contained

in paragraph (a) of this section shall be

construed to mean the effective date of

the first policy or contract of insurance

procured by an operator for purposes of

meeting the obligations imposed on

such operator by section 423 of part C

of title IV of the Act.

(c) The Act contains a number of

provisions and imposes a number of

requirements on operators which differ

in varying degrees from traditional

workmen’s compensation concepts. To

avoid unnecessary administrative delays

and expense which might be occasioned

by the drafting of an entirely new

standard workmen’s compensation

policy specially tailored to the Act, the

Office has determined that the existing

standard workmen’s compensation

policy subject to the endorsement

provisions contained in paragraph (a) of

this section shall be acceptable for

purposes of writing commercial

insurance coverage under the Act.

However, to avoid undue disputes over

the meaning of certain policy provisions

and in accordance with the authority

contained in section 423(b)(3) of the

Act, the Office has determined that the

following requirements shall be

applicable to all commercial insurance

policies obtained by an operator for the

purpose of insuring any liability

incurred pursuant to the Act:

(1) Operator liability. (i) Section 415

and part C of title IV of the Act provide

coverage for total disability or death due

to pneumoconiosis to all claimants who

meet the eligibility requirements

imposed by the Act. Section 422 of the

Act and the regulations duly

promulgated thereunder (part 725 of

this chapter) set forth the conditions

under which a coal mine operator may

be adjudicated liable for the payment of

benefits to an eligible claimant for any

period subsequent to December 31,

1973.

(ii) Section 422(c) of the Act

prescribes that except as provided in

422(i) (see paragraph (c)(2) of this

section) an operator may be adjudicated

liable for the payment of benefits in any

case if the total disability or death due

to pneumoconiosis upon which the

claim is predicated arose at least in part

out of employment in a mine in any

period during which it was operated by

such operator. The Act does not require

that such employment which

contributed to or caused the total

disability or death due to

pneumoconiosis occur subsequent to
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any particular date in time. The

Secretary in establishing a formula for

determining the operator liable for the

payment of benefits (see subpart D of

part 725 of this chapter) in respect of

any particular claim, must therefore,

within the framework and intent of title

IV of the Act find in appropriate cases

that an operator is liable for the

payment of benefits for some period

after December 31, 1973, even though

the employment upon which an

operator’s liability is based occurred

prior to July 1, 1973, or prior to the

effective date of the Act or the effective

date of any amendments thereto, or

prior to the effective date of any policy

or contract of insurance obtained by

such operator. The enforcement

provisions contained in paragraph (a) of

this section shall be construed to

incorporate these requirements in any

policy or contract of insurance obtained

by an operator to meet the obligations

imposed on such operator by section

423 of the Act.

(2) Successor liability. Section 422(i)

of part C of title IV of the Act requires

that a coal mine operator who after

December 30, 1969, acquired his mine

or substantially all of the assets thereof

from a person who was an operator of

such mine on or after December 30,

1969, shall be liable for and shall secure

the payment of benefits which would

have been payable by the prior operator

with respect to miners previously

employed in such mine if the

acquisition had not occurred and the

prior operator had continued to operate

such mine. In the case of an operator

who is determined liable for the

payment of benefits under section 422(i)

of the Act and part 725 of this

subchapter, such liability shall accrue to

such operator regardless of the fact that

the miner on whose total disability or

death the claim is predicated was never

employed by such operator in any

capacity. The enforcement provisions

contained in paragraph (a) of this

section shall be construed to incorporate

this requirement in any policy or

contract of insurance obtained by an

operator to meet the obligations

imposed on such operator by section

423 of the Act.

(3) Medical eligibility. Pursuant to

section 422(h) of part C of title IV of the

Act and the regulations described

therein (see subpart D of part 410 of this

title) benefits shall be paid to eligible

claimants on account of total disability

or death due to pneumoconiosis and in

cases where the miner on whose death

a claim is predicated was totally

disabled by pneumoconiosis at the time

of his death regardless of the cause of

such death. The enforcement provisions

contained in paragraph (a) of this

section shall be construed to incorporate

these requirements in any policy or

contract of insurance obtained by an

operator to meet the obligations

imposed on such operator by section

423 of the Act.

(4) Payment of benefits, rates. Section

422(c) of the Act by incorporating

section 412(a) of the Act requires the

payment of benefits at a rate equal to 50

per centum of the minimum monthly

payment to which a Federal employee

in grade GS–2, who is totally disabled

is entitled at the time of payment under

Chapter 81 of title 5, United States

Code. These benefits are augmented on

account of eligible dependents as

appropriate (see section 412(a) of part B

of title IV of the Act). Since the dollar

amount of benefits payable to any

beneficiary is required to be computed

at the time of payment such amounts

may be expected to increase from time

to time as changes in the GS–2 grade are

enacted into law. The enforcement

provisions contained in paragraph (a) of

this section shall be construed to

incorporate in any policy or contract of

insurance obtained by an operator to

meet the obligations imposed on such

operator by section 423 of the Act, the

requirement that the payment of

benefits to eligible beneficiaries shall be

made in such dollar amounts as are

prescribed by section 412(a) of the Act

computed at the time of payment.

(5) Compromise and waiver of

benefits. Section 422(a) of part C of title

IV of the Act by incorporating sections

15(b) and 16 of the Longshoremen’s and

Harbor Workers’ Compensation Act (33

U.S.C. 915(b) and 916) prohibits the

compromise and/or waiver of claims for

benefits filed or benefits payable under

section 415 and part C of title IV of the

Act. The enforcement provisions

contained in paragraph (a) of this

section shall be construed to incorporate

these prohibitions in any policy or

contract of insurance obtained by an

operator to meet the obligations

imposed on such operator by section

423 of the Act.

(6) Additional requirements. In

addition to the requirements described

in paragraphs (c) (1) through (5) of this

section, the enforcement provisions

contained in paragraph (a) of this

section shall, to the fullest extent

possible, be construed to bring any

policy or contract of insurance entered

into by an operator for the purpose of

insuring such operator’s liability under

part C of title IV of the Act into

conformity with the legal requirements

placed upon such operator by section

415 and part C of title IV of the Act and

parts 720 and 725 of this subchapter.

(d) Nothing in this section shall

relieve any operator or carrier of the

duty to comply with any State

workmen’s compensation law, except

insofar as such State law is in conflict

with the provisions of this section.

§ 726.204 Statutory policy provisions.

Pursuant to section 423(b) of part C of

title IV of the Act each policy or

contract of insurance obtained to

comply with the requirements of section

423(a) of the Act must contain or shall

be construed to contain—

(a) A provision to pay benefits

required under section 422 of the Act,

notwithstanding the provisions of the

State workmen’s compensation law

which may provide for lesser payments;

and,

(b) A provision that insolvency or

bankruptcy of the operator or discharge

therein (or both) shall not relieve the

carrier from liability for such payments.

§ 726.205 Other forms of endorsement and

policies.

Forms of endorsement or policies

other than that described in § 726.203

may be entered into by operators to

insure their liability under the Act.

However, any form of endorsement or

policy which materially alters or

attempts to materially alter an operator’s

liability for the payment of any benefits

under the Act shall be deemed

insufficient to discharge such operator’s

duties and responsibilities as prescribed

in part C of title IV of the Act. In any

event, the failure of an operator to

obtain an adequate policy or contract of

insurance shall not affect such

operator’s liability for the payment of

any benefits for which he is determined

liable.

§ 726.206 Terms of policies.

A policy or contract of insurance shall

be issued for the term of 1 year from the

date that it becomes effective, but if

such insurance be not needed except for

a particular contract or operation, the

term of the policy may be limited to the

period of such contract or operation.

§ 726.207 Discharge by the carrier of

obligations and duties of operator.

Every obligation and duty in respect

of payment of benefits, the providing of

medical and other treatment and care,

the payment or furnishing of any other

benefit required by the Act and in

respect of the carrying out of the

administrative procedure required or

imposed by the Act or the regulations in

this part or 20 CFR part 725 upon an

operator shall be discharged and carried

out by the carrier as appropriate. Notice

to or knowledge of an operator of the

occurrence of total disability or death
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3431

due to pneumoconiosis shall be notice

to or knowledge of such carrier.

Jurisdiction of the operator by a district

director, administrative law judge, the

Office, or appropriate appellate

authority under the Act shall be

jurisdiction of such carrier. Any

requirement under any benefits order,

finding, or decision shall be binding

upon such carrier in the same manner

and to the same extent as upon the

operator.

Reports by Carrier

§ 726.208 Report by carrier of issuance of

policy or endorsement.

Each carrier shall report to the Office

each policy and endorsement issued,

canceled, or renewed by it to an

operator. The report shall be made in

such manner and on such form as the

Office may require.

(Approved by the Office of Management and

Budget under control number 1215–0059)

(Pub. L. No. 96–511)

§ 726.209 Report; by whom sent.

The report of issuance, cancellation,

or renewal of a policy and endorsement

provided for in § 726.208 shall be sent

by the home office of the carrier, except

that any carrier may authorize its agency

or agencies to make such reports to the

Office.

(Approved by the Office of Management and

Budget under control number 1215–0059)

(Pub. L. No. 96–511)

§ 726.210 Agreement to be bound by

report.

Every carrier seeking to write

insurance under the provisions of this

Act shall be deemed to have agreed that

the acceptance by the Office of a report

of the issuance or renewal of a policy of

insurance, as provided for by § 726.208

shall bind the carrier to full liability for

the obligations under this Act of the

operator named in said report. It shall

be no defense to this agreement that the

carrier failed or delayed to issue, cancel,

or renew the policy to the operator

covered by this report.

(Approved by the Office of Management and

Budget under control number 1215–0059)

(Pub. L. No. 96–511)

§ 726.211 Name of one employer only shall

be given in each report.

A separate report of the issuance or

renewal of a policy and endorsement,

provided for by §726.208, shall be made

for each operator covered by a policy. If

a policy is issued or renewed insuring

more than one operator, a separate

report for each operator so covered shall

be sent to the Office with the name of

only one operator on each such report.

(Approved by the Office of Management and

Budget under control number 1215–0059)

(Pub. L. No. 96–511)

§ 726.212 Notice of cancellation.

Cancellation of a contract or policy of

insurance issued under authority of the

Act shall not become effective otherwise

than as provided by 33 U.S.C. 936(b);

and notice of a proposed cancellation

shall be given to the Office and to the

operator in accordance with the

provisions of 33 U.S.C. 912(c), 30 days

before such cancellation is intended to

be effective (see sec. 422(a) of part C of

title IV of the Act).

(Approved by the Office of Management and

Budget under control number 1215–0059)

(Pub. L. No. 96–511)

§ 726.213 Reports by carriers concerning

the payment of benefits.

Pursuant to 33 U.S.C. 914(c) as

incorporated by section 422(a) of part C

of title IV of the Act and §726.207 each

carrier issuing a policy or contract of

insurance under the Act shall upon

making the first payment of benefits and

upon the suspension of any payment in

any case, immediately notify the Office

in accordance with a form prescribed by

the Office that payment of benefit has

begun or has been suspended as the case

may be. In addition, each such carrier

shall at the request of the Office submit

to the Office such additional

information concerning policies or

contracts of insurance issued to

guarantee the payment of benefits under

the Act and any benefits paid

thereunder, as the Office may from time

to time require to carry out its

responsibilities under the Act.

(Approved by the Office of Management and

Budget under control number 1215–0059)

(Pub. L. No. 96–511)

Subpart D—Civil Money Penalties

§ 726.300 Purpose and Scope.

Any operator which is required to

secure the payment of benefits under

section 423 of the Act and § 726.4 and

which fails to secure such benefits shall

be subject to a civil penalty of not more

than $1,000 for each day during which

such failure occurs. If the operator is a

corporation, the president, secretary,

and treasurer of the operator shall also

be severally liable for the penalty based

on the operator’s failure to secure the

payment of benefits. This subpart

defines those terms necessary for

administration of the civil money

penalty provisions, describes the criteria

for determining the amount of penalty

to be assessed, and sets forth applicable

procedures for the assessment and

contest of penalties.

§ 726.301 Definitions.

In addition to the definitions

provided in part 725 of this chapter and

§ 726.8, the following definitions apply

to this subpart:

(a) Division Director means the

Director, Division of Coal Mine

Workers’ Compensation, Office of

Workers’ Compensation Programs,

Employment Standards Administration,

or such other official authorized by the

Division Director to perform any of the

functions of the Division Director under

this subpart.

(b) President, secretary, or treasurer

means the officers of a corporation as

designated pursuant to the laws and

regulations of the state in which the

corporation is incorporated or, if that

state does not require the designation of

such officers, to the employees of a

company who are performing the work

usually performed by such officers in

the state in which the corporation’s

principal place of business is located.

(c) Principal means any person who

has an ownership interest in an operator

that is not a corporation, and shall

include, but is not limited to, partners,

sole proprietors, and any other person

who exercises control over the operation

of a coal mine.

§ 726.302 Determination of penalty.

(a) The following method shall be

used for determining the amount of any

penalty assessed under this subpart.

(b) The penalty shall be determined

by multiplying the daily base penalty

amount or amounts, determined in

accordance with the formula set forth in

this section, by the number of days in

the period during which the operator is

subject to the security requirements of

section 423 of the Act and § 726.4, and

fails to secure its obligations under the

Act. The period during which an

operator is subject to liability for a

penalty for failure to secure its

obligations shall be deemed to

commence on the first day on which the

operator met the definition of the term

‘‘operator’’ as set forth in § 725.101 of

this chapter. The period shall be

deemed to continue even where the

operator has ceased coal mining and any

related activity, unless the operator

secured its liability for all previous

periods through a policy or policies of

insurance obtained in accordance with

subpart C of this part or has obtained a

certification of exemption in accordance

with the provisions of § 726.114.

(c)(1) A daily base penalty amount

shall be determined for all periods up to

and including the 10th day after the

operator’s receipt of the notification sent

by the Director pursuant to § 726.303,

during which the operator failed to
3432 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

secure its obligations under section 423

of the Act and § 726.4.

(2)(i) The daily base penalty amount

shall be determined based on the

number of persons employed in coal

mine employment by the operator, or

engaged in coal mine employment on

behalf of the operator, on each day of

the period defined by this section, and

shall be computed as follows:

Employees Penalty

(per day)

Less than 25 ............................. $100

25–50 ........................................ 200

51–100 ...................................... 300

More than 100 .......................... 400

(ii) For any period after the operator

has ceased coal mining and any related

activity, the daily penalty amount shall

be computed based on the largest

number of persons employed in coal

mine employment by the operator, or

engaged in coal mine employment on

behalf of the operator, on any day while

the operator was engaged in coal mining

or any related activity. For purposes of

this section, it shall be presumed, in the

absence of evidence to the contrary, that

any person employed by an operator is

employed in coal mine employment.

(3) In any case in which the operator

had prior notice of the applicability of

the Black Lung Benefits Act to its

operations, the daily base penalty

amounts set forth in paragraph (b) shall

be doubled. Prior notice may be inferred

where the operator, or an entity in

which the operator or any of its

principals had an ownership interest, or

an entity in which the operator’s

president, secretary, or treasurer were

employed:

(i) Previously complied with section

423 of the Act and § 726.4;

(ii) Was notified of its obligation to

comply with section 423 of the Act and

§ 726.4; or

(iii) Was notified of its potential

liability for a claim filed under the

Black Lung Benefits Act pursuant to

§ 725.407 of this chapter.

(4) Commencing with the 11th day

after the operator’s receipt of the

notification sent by the Director

pursuant to § 726.303, the daily base

penalty amounts set forth in paragraph

(b) shall be increased by $100.

(5) In any case in which the operator,

or any of its principals, or an entity in

which the operator’s president,

secretary, or treasurer were employed,

has been the subject of a previous

penalty assessment under this part, the

daily base penalty amounts shall be

increased by $300, up to a maximum

daily base penalty amount of $1,000.

The maximum daily base penalty

amount applicable to any violation of

§ 726.4 that takes place after [effective

date of the final rule] shall be $1,100.

(d) The penalty shall be subject to

reduction for any period during which

the operator had a reasonable belief that

it was not required to comply with

section 423 of the Act and § 726.4 or a

reasonable belief that it had obtained

insurance coverage to comply with

section 423 of the Act and § 726.4. A

notice of contest filed in accordance

with § 726.307 shall not be sufficient to

establish a reasonable belief that the

operator was not required to comply

with the Act and regulations.

§ 726.303 Notification; investigation.

(a) If the Director determines that an

operator has violated the provisions of

section 423 of the Act and § 726.4, he

or she shall notify the operator of its

violation and request that the operator

immediately secure the payment of

benefits. Such notice shall be sent by

certified mail.

(b) The Director shall also direct the

operator to supply information relevant

to the assessment of a penalty. Such

information, which shall be supplied

within 30 days of the Director’s request,

may include:

(1) The date on which the operator

commenced its operation of a coal mine;

(2) The number of persons employed

by the operator since it began operating

a coal mine and the dates of their

employment; and

(3) The identity and last known

address:

(i) In the case of a corporation, of all

persons who served as president,

secretary, and treasurer of the operator

since it began operating a coal mine; or

(ii) In the case of an operator which

is not incorporated, of all persons who

were principals of the operator since it

began operating a coal mine;

(c) In conducting any investigation of

an operator under this subpart, the

Division Director shall have all of the

powers of a district director, as set forth

at § 725.351(a) of this chapter. For

purposes of § 725.351(c) of this chapter,

the Division Director shall be

considered to sit in the District of

Columbia.

§ 726.304 Notice of initial assessment.

(a) After an operator receives

notification under § 726.303 and fails to

secure its obligations for the period

defined in § 726.302(b), and following

the completion of any investigation, the

Director may issue a notice of initial

penalty assessment in accordance with

the criteria set forth in § 726.302.

(b)(1) A copy of such notice shall be

sent by certified mail to the operator. If

the operator is a corporation, a copy

shall also be sent by certified mail to

each of the persons who served as

president, secretary, or treasurer of the

operator during any period in which the

operator was in violation of section 423

of the Act and § 726.4.

(2) Where service by certified mail is

not accepted by any person, the notice

shall be deemed received by that person

on the date of attempted delivery.

Where service is not accepted, the

Director may exercise discretion to serve

the notice by regular mail.

§ 726.305 Contents of notice.

The notice required by § 726.304

shall:

(a) Identify the operator against whom

the penalty is assessed as well as the

name of any other person severally

liable for such penalty;

(b) Set forth the determination of the

Director as to the amount of the penalty

and the reason or reasons therefor;

(c) Set forth the right of each person

identified in paragraph (a) of this

section to contest the notice and request

a hearing before the Office of

Administrative Law Judges;

(d) Set forth the method for each

person identified in paragraph (a) to

contest the notice and request a hearing

before the Office of Administrative Law

Judges; and

(e) Inform any affected person that in

the absence of a timely contest and

request for hearing received within 30

days of the date of receipt of the notice,

the Director’s assessment will become

final and unappealable as to that person.

§ 726.306 Finality of administrative

assessment.

Except as provided in § 726.307(c), if

any person identified as potentially

liable for the assessment does not,

within 30 days after receipt of notice,

contest the assessment, the Director’s

assessment shall be deemed final as to

that person, and collection and recovery

of the penalty may be instituted

pursuant to § 726.320.

§ 726.307 Form of notice of contest and

request for hearing.

(a) Any person desiring to contest the

Director’s notice of initial assessment

shall request an administrative hearing

pursuant to this part. The notice of

contest shall be made in writing to the

Director, Division of Coal Mine

Workers’ Compensation, Office of

Workers’ Compensation Programs,

Employment Standards Administration,

United States Department of Labor. The

notice of contest must be received no

later than 30 days after the date of

receipt of the notice issued under
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3433

§ 726.304. No additional time shall be

added where service of the notice is

made by mail.

(b) The notice of contest shall:

(1) Be dated;

(2) Be typewritten or legibly written;

(3) State the specific issues to be

contested. In particular, the person must

indicate his agreement or disagreement

with:

(i) The Director’s determination that

the person against whom the penalty is

assessed is an operator subject to the

requirements of section 423 of the Act

and § 726.4, or is the president,

secretary, or treasurer of an operator, if

the operator is a corporation.

(ii) The Director’s determination that

the operator violated section 423 of the

Act and § 726.4 for the time period in

question; and

(iii) The Director’s determination of

the amount of penalty owed.

(4) Be signed by the person making

the request or an authorized

representative of such person; and

(5) Include the address at which such

person or authorized representative

desires to receive further

communications relating thereto.

(c) A notice of contest filed by the

operator shall be deemed a notice of

contest on behalf of all other persons to

the Director’s determinations that the

operator is subject to section 423 of the

Act and § 726.4 and that the operator

violated those provisions for the time

period in question, and to the Director’s

determination of the amount of penalty

owed. An operator may not contest the

Director’s determination that a person

against whom the penalty is assessed is

the president, secretary, or treasurer of

the operator.

(d) Failure to specifically identify an

issue as contested pursuant to paragraph

(b)(3) of this section shall be deemed a

waiver of the right to contest that issue.

§ 726.308 Service and computation of

time.

(a) Service of documents under this

part shall be made by delivery to the

person, an officer of a corporation, or

attorney of record, or by mailing the

document to the last known address of

the person, officer, or attorney. If service

is made by mail, it shall be considered

complete upon mailing. Unless

otherwise provided in this subpart,

service need not be made by certified

mail. If service is made by delivery, it

shall be considered complete upon

actual receipt by the person, officer, or

attorney; upon leaving it at the person’s,

officer’s or attorney’s office with a clerk

or person in charge; upon leaving it at

a conspicuous place in the office if no

one is in charge; or by leaving it at the

person’s or attorney’s residence.

(b) If a complaint has been filed

pursuant to § 726.309 of this part, two

copies of all documents filed in any

administrative proceeding under this

subpart shall be served on the attorneys

for the Department of Labor. One copy

shall be served on the Associate

Solicitor, Black Lung Benefits Division,

Room N–2605, Office of the Solicitor,

U.S. Department of Labor, 200

Constitution Ave., N.W., Washington,

DC 20210, and one copy on the attorney

representing the Department in the

proceeding.

(c) The time allowed a party to file

any response under this subpart shall be

computed beginning with the day

following the action requiring a

response, and shall include the last day

of the period, unless it is a Saturday,

Sunday, or federally-observed holiday,

in which case the time period shall

include the next business day.

§ 726.309 Referral to the Office of

Administrative Law Judges.

(a) Upon receipt of a timely notice of

contest filed in accordance with

§ 726.307, the Director, by the Associate

Solicitor for Black Lung Benefits or the

Regional Solicitor for the Region in

which the violation occurred, may file

a complaint with the Office of

Administrative Law Judges. The

Director may, in the complaint, reduce

the total penalty amount requested. A

copy of the notice of initial assessment

issued by the Director and all notices of

contest filed in accordance with

§ 726.307 shall be attached. A notice of

contest shall be given the effect of an

answer to the complaint for purposes of

the administrative proceeding, subject

to any amendment that may be

permitted under this subpart and 29

CFR part 18.

(b) A copy of the complaint and

attachments thereto shall be served by

counsel for the Director on the person

who filed the notice of contest.

(c) The Director, by counsel, may

withdraw a complaint filed under this

section at any time prior to the date

upon which the decision of the

Department becomes final by filing a

motion with the Office of

Administrative Law Judges or the

Secretary, as appropriate. If the Director

makes such a motion prior to the date

on which an administrative law judge

renders a decision in accordance

§ 726.313, the dismissal shall be without

prejudice to further assessment against

the operator for the period in question.

§ 726.310 Appointment of Administrative

Law Judge and notification of hearing date.

Upon receipt from the Director of a

complaint filed pursuant to § 726.309,

the Chief Administrative Law Judge

shall appoint an Administrative Law

Judge to hear the case. The

Administrative Law Judge shall notify

all interested parties of the time and

place of the hearing.

§ 726.311 Evidence.

(a) Except as specifically provided in

this subpart, and to the extent they do

not conflict with the provisions of this

subpart, the Rules of Practice and

Procedure for Administrative Hearings

Before the Office of Administrative Law

Judges established by the Secretary at 29

CFR part 18 shall apply to

administrative proceedings under this

subpart.

(b) Notwithstanding 29 CFR

18.1101(b)(2), subpart B of the Rules of

Practice and Procedure for

Administrative Hearings Before the

Office of Administrative Law Judges

shall apply to administrative

proceedings under this part, except that

documents contained in Department of

Labor files and offered on behalf of the

Director shall be admissible in

proceedings under this subpart without

regard to their compliance with the

Rules of Practice and Procedure.

§ 726.312 Burdens of proof.

(a) The Director shall bear the burden

of proving the existence of a violation,

and the time period for which the

violation occurred. To prove a violation,

the Director must establish:

(1) That the person against whom the

penalty is assessed is an operator, or is

the president, secretary, or treasurer of

an operator, if such operator is a

corporation.

(2) That the operator violated section

423 of the Act and § 726.4. The filing of

a complaint shall be considered prima

facie evidence that the Director has

searched the records maintained by

OWCP and has determined that the

operator was not authorized to selfinsure its liability under the Act for the

time period in question, and that no

insurance carrier reported coverage of

the operator for the time period in

question.

(b) The Director need not produce

further evidence in support of his

burden of proof with respect to the

issues set forth in paragraph (a) if no

party contested them pursuant to

§ 726.307(b)(3).

(c) The Director shall bear the burden

of proving the size of the operator as

required by § 726.302, except that if the

Director has requested the operator to

supply information with respect to its

size under § 726.303 and the operator

has not fully complied with that

request, it shall be presumed that the
3434 Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules

operator has more than 100 employees

engaged in coal mine employment. The

person or persons liable for the

assessment shall thereafter bear the

burden of proving the actual number of

employees engaged in coal mine

employment.

(d) The Director shall bear the burden

of proving the operator’s receipt of the

notification required by § 726.303, the

operator’s prior notice of the

applicability of the Black Lung Benefits

Act to its operations, and the existence

of any previous assessment against the

operator, the operator’s principals, or

the operator’s officers.

(e) The person or persons liable for an

assessment shall bear the burden of

proving the applicability of the

mitigating factors listed in § 726.302(d).

§ 726.313 Decision and Order of

Administrative Law Judge.

(a) The Administrative Law Judge

shall render a decision on the issues

referred by the Director.

(b) The decision of the Administrative

Law Judge shall be limited to

determining, where such issues are

properly before him or her:

(1) Whether the operator has violated

section 423 of the Act and § 726.4;

(2) Whether other persons identified

by the Director as potentially severally

liable for the penalty were the president,

treasurer, or secretary of the corporation

during the time period in question; and

(3) The appropriateness of the penalty

assessed by the Director in light of the

factors set forth in § 726.302. The

Administrative Law Judge shall not

render determinations on the legality of

a regulatory provision or the

constitutionality of a statutory

provision.

(c) The decision of the Administrative

Law Judge shall include a statement of

findings and conclusions, with reasons

and bases therefor, upon each material

issue presented on the record. The

decision shall also include an

appropriate order which may affirm,

reverse, or modify, in whole or in part,

the determination of the Director.

(d) The Administrative Law Judge

shall serve copies of the decision on

each of the parties by certified mail.

(e) The decision of the Administrative

Law Judge shall be deemed to have been

issued on the date that it is rendered,

and shall constitute the final order of

the Secretary unless there is a request

for reconsideration by the

Administrative Law Judge pursuant to

paragraph (f) or a petition for review

filed pursuant to § 726.314.

(f) Any party may request that the

Administrative Law Judge reconsider

his or her decision by filing a motion

within 30 days of the date upon which

the decision of the Administrative Law

Judge is issued. A timely motion for

reconsideration will suspend the

running of the time for any party to file

a petition for review pursuant to

§ 726.314.

(g) Following issuance of the decision

and order, the Chief Administrative Law

Judge shall promptly forward the

complete hearing record to the Director.

§ 726.314 Review by the Secretary.

(a) The Director or any party

aggrieved by a decision of the

Administrative Law Judge may petition

the Secretary for review of the decision

by filing a petition within 30 days of the

date on which the decision was issued.

Any other party may file a cross-petition

for review within 15 days of its receipt

of a petition for review or within 30

days of the date on which the decision

was issued, whichever is later. Copies of

any petition or cross-petition shall be

served on all parties and on the Chief

Administrative Law Judge.

(b) A petition filed by one party shall

not affect the finality of the decision

with respect to other parties.

(c) If any party files a timely motion

for reconsideration, any petition for

review, whether filed prior to or

subsequent to the filing of the timely

motion for reconsideration, shall be

dismissed without prejudice as

premature. The 30-day time limit for

filing a petition for review by any party

shall commence upon issuance of a

decision on reconsideration.

§ 726.315 Contents.

Any petition or cross-petition for

review shall:

(a) Be dated;

(b) Be typewritten or legibly written;

(c) State the specific reason or reasons

why the party petitioning for review

believes the Administrative Law Judge’s

decision is in error;

(d) Be signed by the party filing the

petition or an authorized representative

of such party; and

(e) Attach copies of the

Administrative Law Judge’s decision

and any other documents admitted into

the record by the Administrative Law

Judge which would assist the Secretary

in determining whether review is

warranted.

§ 726.316 Filing and Service.

(a) Filing. All documents submitted to

the Secretary shall be filed with the

Secretary of Labor, U.S. Department of

Labor, 200 Constitution Ave., N.W.,

Washington, DC 20210.

(b) Number of copies. An original and

four copies of all documents shall be

filed.

(c) Computation of time for delivery

by mail. Documents are not deemed

filed with the Secretary until actually

received by the Secretary either on or

before the due date. No additional time

shall be added where service of a

document requiring action within a

prescribed time was made by mail.

(d) Manner and proof of service. A

copy of each document filed with the

Secretary shall be served upon all other

parties involved in the proceeding.

Service under this section shall be by

personal delivery or by mail. Service by

mail is deemed effected at the time of

mailing to the last known address.

§ 726.317 Discretionary Review.

(a) Following receipt of a timely

petition for review, the Secretary shall

determine whether the decision

warrants review, and shall send a notice

of such determination to the parties and

the Chief Administrative Law Judge. If

the Secretary declines to review the

decision, the Administrative Law

Judge’s decision shall be considered the

final decision of the agency. The

Secretary’s determination to review a

decision by an Administrative Law

Judge under this subpart is solely within

the discretion of the Secretary.

(b) The Secretary’s notice shall

specify:

(1) The issue or issues to be reviewed;

and

(2) The schedule for submitting

arguments, in the form of briefs or such

other pleadings as the Secretary deems

appropriate.

(c) Upon receipt of the Secretary’s

notice, the Director shall forward the

record to the Secretary.

§ 726.318 Final decision of the Secretary.

The Secretary’s review shall be based

upon the hearing record. The findings of

fact in the decision under review shall

be conclusive if supported by

substantial evidence in the record as a

whole. The Secretary’s review of

conclusions of law shall be de novo.

Upon review of the decision, the

Secretary may affirm, reverse, modify,

or vacate the decision, and may remand

the case to the Office of Administrative

Law Judges for further proceedings. The

Secretary’s final decision shall be served

upon all parties and the Chief

Administrative Law Judge, in person or

by mail to the last known address.

§ 726.319 Retention of official record.

The official record of every completed

administrative hearing held pursuant to

this part shall be maintained and filed

under the custody and control of the

Director.
Federal Register / Vol. 62, No. 14 / Wednesday, January 22, 1997 / Proposed Rules 3435

§ 726.320 Collection and recovery of

penalty.

(a) When the determination of the

amount of any civil money penalty

provided for in this part becomes final,

in accordance with the administrative

assessment thereof, or pursuant to the

decision and order of an Administrative

Law Judge in an administrative

proceeding as provided in, or following

the decision of the Secretary, the

amount of the penalty as thus

determined is immediately due and

payable to the U.S. Department of Labor

on behalf of the Black Lung Disability

Trust Fund. The person against whom

such penalty has been assessed or

imposed shall promptly remit the

amount thereof, as finally determined,

to the Secretary by certified check or by

money order, made payable to the order

of U.S. Department of Labor, Black Lung

Program. Such remittance shall be

delivered or mailed to the Director.

(b) If such remittance is not received

within 30 days after it becomes due and

payable, it may be recovered in a civil

action brought by the Secretary in any

court of competent jurisdiction, in

which litigation the Secretary shall be

represented by the Solicitor of Labor.

PART 727—[REMOVED]

6. Under the authority of sections 932

and 936 of the Black Lung Benefits Act,

part 727 is proposed to be removed.

[FR Doc. 97–44 Filed 1–21–97; 8:45 am]

BILLING CODE 4510–27–P