House Labor Committee Issues Report on Black Lung Benefits Improvement Act (Part 3 of 4)

WASHINGTON, Dec. 21 -- The House Education and Labor Committee issued a report (H.Rpt. 117-589) on the Black Lung Benefits Improvement Act (H.R. 6102), which aims to ensure that claims for benefits under the Black Lung Benefits Act are processed in a fair and timely manner, to better protect miners from pneumoconiosis, commonly known as "black lung disease". The report was advanced by Rep. Robert C. Scott, D-Virginia, on Dec. 2, 2022.

(Continued from Part 2 of 4)

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INSUFFICIENT OVERSIGHT OF SELF-INSURED MINE OPERATORS THREATENS THE SOLVENCY OF THE BLACK LUNG DISABILITY TRUST FUND

As discussed above, the Black Lung Disability Trust Fund is integral to the black lung disability benefits program. The Trust Fund was created to cover the cost of benefits provided to eligible miners who ended their employment before January 1, 1970, and to serve as a backstop for claims related to miners whose employment ended after December 31, 1969. In the latter case, the Trust Fund covers the cost of benefits where no responsible operator can be identified.

Black Lung Disability Trust Fund Financing

The Trust Fund is financed primarily by a tax on coal produced and sold domestically./132/The tax was first established in 1978 at $0.50 per ton on underground coal and $0.25 per ton on surface coal, both up to 2 percent of sales price. In 1982, the tax was raised to $1 per ton for underground coal and $0.50 per ton for surface coal, in each case up to 4 percent of sale price./133/The last increase came in 1986, when the rates were raised to $1.10 per ton on underground coal and $0.55 per ton of surface coal./134/The 1986 rate is subject to reauthorization, and the last reauthorization occurred in December 2020 for the calendar year 2021./135/That reauthorization lapsed without further action on December 31, 2021, and the tax rate reverted to the 1978 levels. Congress has since permanently extended the 1986 level./136/

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/132/26 U.S.C. Sec. 4121.

/133/Gov't Accountability Off., supra note 76, at 7.

/134/Id. at 9.

/135/Further Consolidated Appropriations Act of 2020, Pub. L. No. 116-94, Div. EE, Title I, Sec. 149.

/136/Pub. L. No. 117-169, Sec. 13901.

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The Trust Fund has operated on a deficit in almost every year since its first fiscal year in operation. The Trust Fund began paying out benefits prior to collecting the excise tax that was intended to be the Trust Fund's primary financial source, so the Trust Fund began operation at a loss. In its first three fiscal years, the Trust Fund's revenue provided less than 40 percent of the administrative and benefit costs./137/

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/137/Gov't Accountability Off., supra note 76, at 12.

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When the Trust Fund runs a deficit, the Treasury issues it loans as "repayable advances."/138/The Trust Fund must repay these advances back to the General Fund with interest. In the first ten years of operation, the Trust Fund borrowed from the General Fund at interest rates between 6.5 and 13.9 percent on 30-year terms./139/In 1985, the Trust Fund paid out roughly $275 million, or about half of the Fund's revenue for that year, in interest payments./140/While the Trust Fund's revenue has generally exceeded expenses since 1990, the earlier borrowing saddled the Trust Fund with debt./141/

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/138/Siddhi Doshi & Adele Morris, Putting the Trust Back in the Black Lung Disability Trust Fund, Brookings Inst., at 5 (Sept. 24, 2021), https://www.brookings.edu/wp-content/uploads/2021/10/Black-Lung-Disability-Trust-Fund-2021.pdf.

/139/Gov't Accountability Off., supra note 76, at 9.

/140/Id.

/141/Id.

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By 2008, the Trust Fund's debt exceeded $10 billion./142/Congress authorized an appropriation in the Energy Improvement and Extension Act of 2008 that forgave $6.5 billion of the Trust Fund's debt./143/However, in the wake of the 2008 recession, revenue from the coal excise tax was less than expected, and increased competition with other, cheaper forms of energy has meant that coal use has decreased. As a result, the Trust Fund began again borrowing from the Treasury in 2010,/144/and the Trust Fund's current debt is just over $6 billion./145/Since federal law does not place a cap on the amount that the Trust Fund can borrow from the Treasury's General Fund, the Trust Fund could borrow in perpetuity while significantly increasing insolvency. GAO projects that permanent reduction in the excise tax rate, coupled with a decline in coal production, will expand the Trust Fund's debt to $15.4 billion by 2050./146/

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/142/Id.

/143/Id. at 9-10 (characterizing effect of Pub. L. No. 110-343, Div. B, Sec. 113 (2008) (26 U.S.C. Sec. 9501 note)).

/144/Id. at 10.

/145/U.S. Dep't of Lab., 2021 Agency Financial Report 96, https://www.dol.gov/sites/dolgov/files/OPA/reports/2021annualreport.pdf.

/146/Gov't Accountability Off., supra note 76, at 37.

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While coal produced and sold domestically is subject to the excise tax to finance the Trust Fund, coal that is exported is not included in the excise tax scheme./147/The resulting impact on the Trust Fund is significant. In 2020, U.S. coal mines produced 540.1 million short tons (MMst) of coal, 12.8 percent of which was exported and thus excluded from the excise tax./148/Metallurgical coal in particular is largely shielded from the excise tax: of the 55.5 MMst of metallurgical coal produced in 2020, 42.0 MMst--or more than 75 percent--was exported./149/

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/147/Erika K. Lunder, Cong. Res. Serv., R42780, Export Clause: Limitation on Congress's Taxing Power, (Oct. 18, 2012).

/148/U.S. Energy Info. Admin., Ann. Coal Rep. 2020, at ix (Oct. 2021), https://www.eia.gov/coal/annual/pdf/acr.pdf.

/149/Id.

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During the December 2nd Hearing, Rep. Mark Takano (D-CA-41) questioned OWCP Director Chris Godfrey on the export exemption from the excise tax and the consequence that the exemption has for the liability of metallurgical coal producers: Mr. Takano. Warrior Met appears to specialize in metallurgical coal that is largely mined and exported. If I understand it, that coal is not subject to the tax that funds the Black Lung Disability Trust Fund. Is that correct? Mr. Godfrey. That is correct.

Mr. Takano. So, if this company shifted liabilities onto the Trust Fund, for the most part, it would not have contributed to that Trust Fund? Mr. Godfrey. At least not through the excise tax, that is correct./150/

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/150/Strengthening the Safety Net for Injured Workers: Hearing on H.R. 2499, H.R. 3114, H.R. 6102, and H.R. 6087 Before the Subcomm. on Wrkf. Prots. of the H. Comm. on Educ. & Lab., 117th Cong. (2021) [hereinafter Strengthening the Safety Net] (https://edlabor.house.gov/hearings/strengthening-the-safety-net-for-injured-workers, 1:21:07-1:21:37).

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Insufficient collateral from self-insured operators The Trust Fund's debt has been exacerbated by insufficient oversight of self-insured coal operators.

The BLBA requires operators to secure their liabilities through either self-insurance or a commercial or state insurance program./151/OWCP is charged with the enforcement of this requirement. GAO has repeatedly identified deficiencies in DOL's oversight of operators allowed to self-insure, including failure to estimate future benefit liability when assessing the amount of collateral required to self-insure and a lack of clear processes for periodic review of continued eligibility for self-insurance./152/

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/151/BLBA Sec. 923 (30 U.S.C. Sec. 933).

/152/See Thomas Costa, Gov't Accountability Off., GAO-22-105546, Black Lung Benefits Program: Continued Inaction on Coal Operator Self-Insurance Increases Financial Risk to Trust Fund (Dec. 2021); Cindy Brown Barnes, Gov't Accountability Off., GAO-20-438-T, Black Lung Benefits Program: Oversight is Needed to Address Trust Fund Solvency Strained by Bankruptcies (Feb. 2020), https://www.gao.gov/assets/gao-20-438t.pdf.

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OWCP's failure to assess sufficient collateral for self-insured operators strains the Trust Fund whenever such operators enter bankruptcy proceedings. From 2014 through 2016, three coal mine operators filed for bankruptcy and, as a result, $865 million in black lung benefit liabilities were transferred to the Trust Fund./153/These companies were secured by a total of $27.4 million in collateral, meaning that nearly 97 percent of their liabilities were unsecured./154/Five more mine operators became insolvent since 2016, at least two of which are expected to transfer an additional $61 million in under-collateralized liability to the Trust Fund./155/

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/153/Brown Barnes, supra note 152.

/154/Id.

/155/Costa, supra note 150.

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OWCP's response has been incomplete. In 2019, OWCP began an overhaul of its oversight of mine operators' insurance plans and collateral, but the new processes did not include procedures for its planned annual renewal of self-insured operators or for resolving coal operator appeals if an operator disputed OWCP's collateral requirements. In February 2020, OWCP sent letters to 14 self-insured mine operators requesting increased collateral. Seven of the operators appealed; in the absence of appeal procedures, OWCP collected only $65 million of the $251 million requested. As a result, OWCP has yet to resolve the issue of insufficient collateral from these self-insured operators./156/

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/156/Id.

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GAO discovered that OWCP had even reversed course on improving the review and appeals process, without an apparent plan to address the problem: In December 2020, DOL issued a preliminary bulletin for coal operator self-insurance that described significant changes and included actions that would have addressed GAO's recommendations. For instance, DOL set a goal to resolve coal operator appeals within 90 days after receiving supporting documents or meeting with the operator to discuss their concerns.

However, in February 2021, DOL rescinded the preliminary bulletin due to a program review by the current administration, according to DOL officials. DOL officials said they have taken no further actions to resolve appeals or to collect any additional collateral or other information from self-insured operators. As a result, DOL has not obtained about $186 million in requested collateral from self-insured operators that appealed DOL's requested collateral. In addition, one of these operators, Lighthouse Resources, filed for bankruptcy in December 2020; this could result in a transfer of about $2.4 million in estimated benefit responsibility to the Trust Fund, according to DOL. In addition, two operators DOL said no longer met their requirements to self-insure almost two years ago remain self-insured.

In November 2021, DOL officials said the current administration's program review is complete, but could not describe any anticipated changes to coal operator self-insurance going forward./157/

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/157/Id. at 1.

Accordingly, section 131 of the Act offers reforms to improve the financial integrity of the Trust Fund as follows:

Subsection (a) requires the Secretary to promulgate, within 60 days of the date of enactment, an interim final rule on self-insurance that establishes: (1) criteria for operators' eligibility to seek and maintain approval for self-insurance; (2) procedures for periodic determination of the minimum amount of security required for each self-insured operator; and (3) procedures for OWCP review of operator appeals of self-insurance eligibility and security amount decisions. This provision also requires a final rule to be published within 12 months of the date of enactment. Although OWCP has on its regulatory agenda an objective to publish a proposed rule this summer on these topics, the threat of additional self-insured operators abandoning their benefit liabilities through bankruptcy onto the Trust Fund justifies swifter action.

Subsection (b) disincentivizes violations of the requirement to maintain commercial insurance or appropriate self-insurance security by increasing civil monetary penalties from $1,000 to $25,000. It also provides that civil damages for unsecured benefits in the event of bankruptcy or permanent abandonment of the obligation to secure payment shall include the actuarial present value of benefit liabilities shifted onto the Trust Fund, projected as of the date of failure to secure benefits, less any collateral recovered, plus interest.

Accountability for corporate officers and related corporate entities While DOL has worked to overhaul its oversight, it has failed to use every tool available. The BLBA provides for the personal liability of certain officers where a corporate mine operator fails to insure or collateralize benefit liabilities:

[T]he president, secretary, and treasurer [of such corporation] shall be severally personally liable, jointly with such corporation, for any benefit which may accrue under this subchapter in respect of 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./158/

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/158/30 U.S.C. Sec. 933.

DOL has not used this tool in decades, as Rep. Pramila Jayapal (D-WA-7) pointed out in a colloquy with Julia Hearthway, then the Director of OWCP, during a February 2020 hearing before the Committee's Workforce Protections

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Subcommittee:

Ms. Jayapal. Alpha Natural Resources' executives only posted $12 million of the company's reserves to cover $495 million in liabilities, and yet Alpha's executives managed to pay themselves tens of millions of dollars prior to and during bankruptcy proceedings. If the DOL were to use its current legal authorities to sue mining executive to recover losses due to underfunded self-insurance, do you expect that those executives would do a better job of collateralizing their obligations?

Ms. Brown Barnes. Yes. And that would have to happen before bankruptcy, because after bankruptcy DOL has to get in line with the other unsecured creditors.

Ms. Jayapal. Exactly. It is too late by then.

Ms. Brown Barnes. Yes.

Ms. Jayapal. And the DOL has used this tool before, and it recovered money for the taxpayer. . . . And so, the DOL may, under the Black Lung Benefits Act, impose personal liability on CEOs and high-level officers of the mining company when the company has not complied with its obligation to provide sufficient insurance to cover its liabilities to the program. Prior secretaries of the DOL have successfully pursued those actions, including Secretaries Brock and Donovan, who served under President Reagan. But under this current leadership, the DOL doesn't seem to have done that. Is that correct? Has the DOL enforced this provision and required mining company executives to pay their fair share instead of putting it on the taxpayers?

Ms. Hearthway. So I noticed you went back to the Reagan Administration. I could not find an instance where daily fines were administered against a coal operator for not securing the appropriate insurance in the past 20 years.

Ms. Jayapal. But is there a reason you wouldn't do it? It is allowed by the law, so-- Ms. Hearthway. No, I think it is--I think it is a valuable tool if they do not secure the appropriate insurance or put up the required collateral.

Ms. Jayapal. Because you could do that right now from the executives of Alpha, Patriot, or James River. Those are all three self-insured companies that recently went bankrupt. That would be a great way to ensure that those companies actually pay into the Fund that they knew from the very beginning that they were supposed to pay into./159/

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/159/Asleep at the Switch: How the Department of Labor Failed to Oversee the Black Lung Disability Trust Fund Workers: Hearing Before the Subcomm. on Wrkf. Prots. of the H. Comm. on Educ. & Lab., 116th Cong. 38-39 (2020).

Increasingly, however, individual corporate officers are not the only relevant decisionmakers. Private equity firms--or, in the words of United Mine Workers spokesperson Phil Smith, "vulture capital"/160/--are taking over coal firms in the U.S. and around the world./161/In the December 2nd Hearing, Rep. Takano explored the potential consequences of private equity interventions in coal mining through the case example of Alabama-based operator Warrior Met Coal, one of the companies from which OWCP had requested but not yet collected increased collateral. After entering into the record excerpts from the company's filings with the Securities Exchange Commission, Rep. Takano observed that the company "has paid out a whopping $1.5 billion in dividends and stock buybacks since 2017 during a period of only $1.4 billion in total book net income and only $312 million in increased company value."/162/He added, "It appears that the private equity funds controlling this company are stripping its assets," increasing the risk that the company could be driven into bankruptcy and shift its black lung benefit liabilities onto the Trust Fund./163/These private equity enterprises sometimes take the form of multiple funds with "layers of fund-related entities."/164/

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/160/Sarah Jones, Miners vs. Vultures, New York (Jan. 20, 2022), https://nymag.com/intelligencer/2022/01/striking-warrior-met-coal-miners-challenge-private-equity.html.

/161/Alyssa Giachino, Priv. Eq. Stakeholder Proj., As Climate Change Requires Cuts to Coal, Private Equity Buys More (June 2020), https://pestakeholder.org/wp-content/uploads/2020/07/PESP-As-Coal-Declines-PE-Buys-More.pdf; James Attwood, Private Equity Lines Up for Coal `Bonanza' Left by Public Miners, Bloomberg (Jan. 3, 2022), https://www.bloomberg.com/news/articles/2022-01-03/private-equity-lines-up-for-coal-bonanza-left-by-public-miners; Anthony Barich, Thermal Coal Miners to Seek Private Route for Financing Amid Rising ESG Tide, S&P Glob. Mkt. Intel., Nov. 26, 2020, https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/thermal-coal-miners-to-seek-private-route-for-financing-amid-risin g-esg-tide-61466495; As Climate Change Requires Cuts to Coal, Private Equity Buys More, Priv. Eq. Stakeholder Proj. (June 12, 2020), https://pestakeholder.org/as-climate-change-requires-cuts-to-coal-private-equity-buys-more/; Virginia Heffernan, The Rise of Private Equity Investment in Mining & Resources, Touchpoint by Firmex, https://www.firmex.com/resources/uncategor ized/the-rise-of-private-equity-investment-in-mining-resources/(last visited Aug. 3, 2022); Virginia Heffernan, Private Equity Investment in Mining: Not Just a Rumour, Touchpoint by Firmex, https://www.firmex.com/resources/uncategorized/private-equity-investment-in-mining-not-just-a-rumour/(last visited Aug. 3, 2022).

/162/Strengthening the Safety Net, supra note 148 (video of colloquy between Rep. Takano and OWCP Director Christopher Godfrey, https://edlabor.house.gov/hearings/strengthening-the-safety -net-for-injured-workers 1:21:39-1:22:23).

/163/Id.

/164/Sun Cap. Partners III v. New Eng. Teamsters & Trucking Indus. Pens. Fund, 724 F.3d 129, 133 (1st Cir. 2013).

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In light of these challenges to the solvency of the Trust Fund, the Act makes several critical reforms: Section 131(b)(1) amends the BLBA to add an operator's chief executive officer and chief operating officer to the list of corporate officers that can be held severally liable with the corporation for civil monetary penalties, jointly and severally liable for unsecured benefit payments, severally liable for imprisonment, and jointly liable for criminal fines.

Section 131(b)(1) also adds "other responsible parties" to the list of corporate officers that can be held liable with the corporate operator for civil remedies and criminal punishment, and section 131(b)(2) defines such parties as any individual or business entity with direct or indirect power over the management and policies of the operator or any business under an operator's common control. The definition parallels terms found in the Employee Retirement Income Security Act of 1974,/165/which have at times been held to extend liability to private equity and other interconnected enterprises with active roles in leading the affairs of an employer beyond merely passive investing./166/

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/165/See 29 U.S.C. Sec. Sec. 1002(9) (defining "person"), 1301(14) (defining "controlled group" and "common control"), 1301(20) (adopting definition in Sec. 1002(9)).

/166/See, e.g., Sun Cap. Partners III, 724 F.3d at 141-143, 146-47; Central States, S.E. & S.W. Areas Pens. Fund v. Fulkerson, 238 F.3d 891, 897 (2001) (distinguishing between "the passive holding of property" and active conduct of a trade or business).

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LEGALLY ESTABLISHING THE OFFICE OF WORKERS' COMPENSATION PROGRAMS WOULD IMPROVE OVERSIGHT AND ACCOUNTABILITY

Section 201 of the Act codifies DOL's Office of Workers' Compensation Programs (OWCP) and designates that its director be subject to appointment by the President and confirmed by the U.S. Senate. It also replaces the term "Bureau of Employees' Compensation," which is an obsolete designation in law. OWCP administers the black lung benefits program.

OWCP originated in an organization established in 1916 to administer claims under the Federal Employees' Compensation Act/167/(FECA)./168/Today, FECA covers more than three million civilian federal employees, Members of Congress, the Peace Corps, and AmeriCorps/VISTA volunteers.

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/167/5 U.S.C. Sec. 8101 et seq.

/168/History of OWCP, U.S. Dep't of Lab., https://www.dol.gov/agencies/owcp/owcphist (last visited July 5, 2022).

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In addition to the black lung benefits and the FECA programs, OWCP also administers the following:

The Longshore and Harbor Workers' Compensation Act of 1927,/169/which covers all maritime workers injured or killed working over the navigable waters of the U.S., as well as employees working on adjoining piers, docks, and terminals, plus a number of other groups. Compensation under this Act is paid by employers who are self-insured or through insurance policies provided by private insurers to employers.

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/169/33 U.S.C. Sec. 901 et seq.

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The Energy Employees Occupational Illness Compensation Program Act/170/(EEOICPA), which delivers benefits and medical care for work-related illnesses to eligible employees and former employees of the Department of Energy, its contractors and subcontractors, atomic weapons employers, and beryllium vendors. The program also delivers benefits to certain beneficiaries of section 5 of the Radiation Exposure Compensation Act./171/

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/170/42 U.S.C. Sec. 7384 et seq.

/171/42 U.S.C. Sec. 2210 et seq.

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As part of its responsibilities with these four major statutes, OWCP is responsible for administering compensation benefits in excess of $6.1 billion per year. When measured by funds adjudicated and disbursed, OWCP is the second largest subagency in the DOL (behind the Employment and Training Administration). Given the size of its responsibilities and the need for accountability to Congress in ensuring fairness, efficiency, and program integrity, it is appropriate to have a Senate-confirmed individual leading this agency.

Although this office does not regulate state workers' compensation programs, it has had a monitoring role. Congress created the National Commission on State Workmen's Compensation Laws in the Occupational Safety and Health Act of 1970 to undertake "a comprehensive study and evaluation of State workmen's compensation laws in order to determine if such laws provide an adequate, prompt, and equitable system of compensation."/172/In 1972, the National Commission concluded that "the protection furnished by workmen's compensation to American workers presently is, in general, inadequate and inequitable"/173/and made 19 recommendations that it regarded as "essential."/174/OWCP has overseen the publication of reports on the implementation of these 19 key recommendations, which continued until the Bush administration ceased producing the report in 2004.

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/172/Occupational Safety and Health Act of 1970, Pub. L. No. 91-596 (Dec. 29, 1970), Sec. 27(d)(1).

/173/Nat'l Comm'n on State Workmen's Comp. L., The Report of the National Commission on State Workmen's Compensation Laws 3, 19 (July 1972), https://workerscompresources.com /national-commission-report/.

/174/Id. at 26.

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In 2015, DOL identified the need to resume monitoring, because the failure of state workers' compensation systems to provide adequate benefits puts injured workers at great risk of falling into poverty./175/In fact, workers' compensation absorbs less than 25 percent of the estimated $250 billion annual cost of workplace illness and injury,/176/and much of that cost is instead shifted to Medicare, Medicaid, and Social Security Disability Insurance./177/Following congressional direction from the Consolidated Appropriations Act, FY 2022,/178/the Biden Administration is moving forward to resume this oversight in FY 2023./179/

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/175/U.S. Dep't of Lab., Does the Workers' Compensation System Fulfill its Obligations to Injured Workers? (2015), https://www.dol.gov/sites/dolgov/files/OASP/files/Workers CompensationSystemReport.pdf.

/176/J. Paul Leigh, Economic Burden of Occupational Injury and Illness in the United States, 89 Milbank Q. 728 (2011).

/177/Alison Morantz et al., Economic Incentives in Workers' Compensation: A Holistic, International Perspective, 69 Rutgers L. Rev. 1015, 1065-66 (2017).

/178/H.R. Rep. No. 117-96, Title I, 30 (2021) (Comm. Rpt.).

/179/Off. of Workers' Comp. Programs, FY 2023 Congressional Budget Justification: Office of Workers' Compensation Programs, Overview 4 (2022), https://www.dol.gov/sites/dolgov/files/general/budget/2023/CBJ-2023-V2-03.pdf.

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Codification of the agency and Senate confirmation of its leadership would enable greater oversight of an agency with a large portfolio that has the power to make decisions affecting tens of thousands of people every year as well as a responsibility to safeguard the public. Absent the spotlight of congressional oversight, past OWCP leadership neglected to take affirmative steps to end medical provider fraud/180/and address inadequate black lung self-insurance collateral./181/Moreover, previous OWCP leadership and other agencies actively sought to undermine the implementation of the EEOICPA, which only became public knowledge following multiple congressional hearings./182/The programs clustered under the banner of OWCP are important and merit meaningful accountability to Congress.

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/180/See Off. of Inspector Gen., U.S. Dep't of Lab., 03-17-001-04-431, Interim Report on Audit of Pharmaceutical Management in DOL Benefit Programs: OWCP Needs Better Controls Over Compounded Prescription Drugs (May 23, 2017), https://www.oig.dol.gov/public/reports/oa/2017/03-17-001-04-431.pdf; Off. of Inspector Gen., U.S. Postal Serv., HR-MA-16-003, Workers' Compensation Compound Drug Costs (Mar. 14, 2016), https://www.uspsoig.gov/sites/default/files/document-library-files/2016/HR-MA-16-003.pdf.

/181/See text accompanying notes 149-155 supra.

/182/See, e.g., Energy Employees Occupational Illness Compensation Program: Are We Fulfilling the Promise We Made to These Cold War Veterans When We Created This Program? (Part III): Hearing Before the Subcomm. on Immigr., Border Sec. & Claims of the H. Comm. on the Judiciary, 109th Cong. (2006); Energy Employees Occupational Illness Compensation Program: Are We Fulfilling the Promise We Made to These Cold War Veterans When We Created This Program? (Part II): Hearing Before the Subcomm. on Immigr., Border Sec. & Claims of the H. Comm. on the Judiciary, 109th Cong. (2006); Energy Employees Occupational Illness Compensation Program: Are We Fulfilling the Promise We Made to These Cold War Veterans When We Created This Program? (Part I): Hearing Before the Subcomm. on Immigr., Border Sec. & Claims of the H. Comm. on the Judiciary, 109th Cong. (2006); Energy Employees Occupational Illness Compensation Program: Hearing Before the S. Comm. on Energy & Nat. Res., 108th Cong. (2003); Oversight of the Management Practices at the Office of Workers' Compensation Programs: Hearing Before the Subcomm. on Gov't Mngmt., Info. & Tech. of the H. Comm. on Gov't Ref., 105th Cong. (1998). See also H. Comm. on Gov't Ref., Management Practices at the Office of Workers' Compensation Programs, U.S. Department of Labor, H.R. Rep. No. 106-1024 (2000).

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CONCLUSION

Without the reforms of the Black Lung Benefits Improvement Act, miners whose work gives this country the power it needs to thrive will die destitute and in agony from black lung disease. This bill will facilitate miners' and their families' access to the benefits to which they are entitled, ensure that coal operators play by the rules and pay what they owe, and improve public accountability for DOL's role in accomplishing those objectives.

Section-by-Section Analysis

Sec. 1. Short title

This section specifies that the bill may be cited as the Black Lung Benefits Improvement Act of 2022.

Sec. 2. Table of contents

This section provides a Table of Contents for the bill.

TITLE I--BLACK LUNG BENEFITS

Part A--Improvement in the Process of Filing and Adjudicating Claims for Benefits

Sec. 101. Providing assistance with claims for miners and their dependent family members

This section amends section 427(a) of the Black Lung Benefits Act (BLBA) (30 U.S.C. 937(a)) to authorize black lung clinics to assist miners, surviving spouses, and dependents as they pursue claims for benefits in addition to the clinics' existing role of treating respiratory and pulmonary impairments in active and former coal miners.

Sec. 102. Clarifying eligibility for black lung benefits

This section amends section 411(c) of the BLBA (30 U.S.C. 921(c)), which currently provides that a miner is entitled to an irrebuttable presumption that the miner is totally disabled by pneumoconiosis, died because of pneumoconiosis, or was totally disabled by pneumoconiosis at the time of death, as the case may be, in cases where the miner has been diagnosed with progressive massive fibrosis or complicated pneumoconiosis. This section substitutes the term "radiograph" for the outmoded term "roentgenogram;" clarifies the benchmark for the relevant diagnosis as an opacity, mass, or lesion for which the "greatest diameter" exceeds one centimeter; and allows for potential shrinkage of any masses or lesions measured after biopsy or autopsy.

Sec. 103. Development of medical evidence by the Secretary

This section amends Part C of the BLBA (30 U.S.C. 931 et seq.) by adding the new section 435, as follows:

Section 435(a) requires the Secretary of Labor (Secretary) to provide a claimant, upon request, an opportunity to substantiate the claimant's claim with a complete pulmonary exam that includes a preliminary report by a physician on the Secretary's list of qualified physicians and supplemental evidence, provided for free to the miner if certain conditions exist.

Section 435(b) authorizes the Secretary, when a conventional lung X-ray fails to provide a definitive image for diagnosing complicated pneumoconiosis, to provide a high-quality, low-dose or standard CT scan if a chest radiograph reveals advanced pneumoconiosis (ILO category 2/1 or greater) or a coalescence of small opacities.

Section 435(c) spells out the trigger for requiring the Secretary to develop supplemental evidence in cases in which a party opposing the claim provides evidence that could be considered contrary to the initial report of the pulmonary examination, or such party's evidence has been submitted to an Administrative Law Judge (ALJ) that had not been previously considered by the Secretary in making an award.

Section 435(d) delineates the process for developing supplemental evidence. To develop the supplemental evidence, the Secretary shall request the physician who developed the initial medical report for the claimant to review any medical evidence submitted after the initial report and to update the opinion of such physician in a supplemental report, if warranted. If the original physician who examined the miner is no longer available, the Secretary shall select another qualified physician.

Section 435(e) codifies the Secretary's practice of creating and maintaining a list of qualified physicians to perform pulmonary examinations of coal miners but enhances quality assurance by requiring that the Secretary pre-screen physicians for adverse professional actions involving medical licensure, certifications, hospital privileges, or professional societies. This section precludes the use of physicians from the list maintained by the Secretary who have a potential or actual conflict of interest through current or recent employment or contractual arrangements with a private party opposing an individual's claim unless the claimant knowingly waives such conflict. The Secretary shall update such list annually by reviewing the suitability of the qualified physicians to remain or be added to the list and assessing any potential conflicts of interest.

Section 435(f) requires reports produced pursuant to this section to be entered into the claim record and shared with the parties.

Section 435(g) provides that expenses incurred during the development of the evidence should be paid by the Black Lung Disability Trust Fund, which shall be reimbursed with interest by the responsible operator if the claim results in a final award for benefits.

Sec. 104. False statements or misrepresentations, attorney disqualification, and discovery sanctions

This section rewrites section 431 of the BLBA to read as follows:

Sections 431(a)-(b) make it a felony, punishable by no more than 5 years in prison, for any person, including a claimant, operator or any authorized agent of an operator, physician, or insurer, to knowingly and willfully (1) make a false statement or misrepresentation for purposes of obtaining, denying, or otherwise affecting any black lung benefits or (2) threaten, coerce, intimidate, deceive, or mislead a party, representative, witness, potential witness, judge, or anyone participating in a proceeding.

Section 431(e) requires the United States Attorney for a district in which a violation of section 431(a) takes place to make every reasonable effort to investigate a complaint promptly.

Section 431(d) establishes that any attorney found guilty of conduct under Section 431(a)-(b) is also permanently disqualified from representing any party or appearing in any further proceedings under the Act.

Section 431(e) provides guidelines for making determinations as to whether attorney behavior warrants disqualification and grants ALJs the authority to issue sanctions when a party fails to comply with a discovery order.

Section 431(f) requires the Secretary to promulgate regulations to provide procedures for disqualifications and discovery sanctions.

Sec. 105. Readjudicating cases involving certain chest radiographs

This section allows claimants, including coal miners and their survivors, to file a new claim for benefits if such claim has been denied and such decision involved a chest radiograph that had been interpreted as negative for simple pneumoconiosis, complicated pneumoconiosis, or progressive massive fibrosis by a physician with respect to whom the Secretary has directed that such physician's medical opinions be given no weight in evaluating a claim of benefits. Any benefit award is retroactive: for miners, such award dates back to the month that the erroneously denied claim was originally filed; for survivors, such award dates back to the month of the miner's death.

Sec. 106. Attorneys' fees and medical expenses payment program

This section authorizes program payments to provide miners' attorneys with legal fees of up to $1,500 at the District Director level and up to $3,000 at the ALJ level for a total of up to $4,500, provided that the claimant prevails at each level. In addition, claimants may seek reimbursement of up to $1,500 for medical costs at each level, for a total of no more than $3000. The legal fees and medical costs under this section would initially be paid from the Black Lung Disability Trust Fund; however, if the miner ultimately prevails in a claim for benefits, the responsible coal operator would be required to reimburse the Trust Fund for the legal fees and costs that were paid under this section and, consistent with existing law, would be required to pay any additional attorney's fees and allowable costs that exceed the amount that was already paid from the Trust Fund.

Sec. 107. Restoring adequate benefit adjustments for miners suffering from black lung disease and for their dependent family members

This section sets the annual rate of benefit payments for Black Lung claimants at $8,834.01, or $736.17 per month, beginning in 2022. After 2022, this section ties yearly increases in benefit payments to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Sec. 108. Disclosure of employment and earnings information for black lung benefits claims

This section requires the Social Security Administration (SSA) to provide the Department of Labor (DOL) with access to miners' employment information in electronic form.

Part B--Reports to Improve the Administration of Benefits Under the Black Lung Benefits Act

Section 121. Strategy to reduce delays in adjudication

This section requires the Secretary, within 90 days, to submit to Congress a comprehensive strategy to reduce the backlog of cases pending before the Office of Administrative Law Judges (OALJ). The strategy must identify, among other things, the resources necessary to ensure that claims brought under the BLBA are decided within 12 months from the date they are received by the OALJ.

Part C--Improvement in the Financial Security of the Black Lung Benefits Disability Trust Fund

Sec. 131. Policies for securing the payment of benefits

This section requires the Secretary to issue an interim final rule within 60 days of enactment of this Act that will establish clear processes for determining an operator's eligibility to self-insure, assessing appropriate levels of collateral to secure the operator's estimated black lung liabilities and reviewing an operator's appeals of decisions about self-insurance eligibility or required security amounts.

This section also increases civil monetary penalties for failure to maintain required security or insurance from $1,000 to $25,000. Current law provides that certain corporate officers of the operator can be held jointly or severally liable for such failure, and this section expands that list by naming additional corporate officers who, and related business entities that, can be held jointly or severally liable.

TITLE II--ESTABLISHING THE OFFICE OF WORKERS' COMPENSATION PROGRAMS

Sec. 201. Office of Workers' Compensation Programs

This section codifies the Office of Workers' Compensation Programs in DOL, which shall be directed by a Director, who shall be appointed by the President, by and with the advice and consent of the Senate.

TITLE III--ADDITIONAL PROVISIONS

Sec. 301. Technical and conforming amendments

Amendments to the BLBA in 2010 popularly known as the "Byrd amendments" restored a presumption of total disability or death caused by pneumoconiosis for coal miners who worked for at least 15 years in underground mining and who suffer or suffered from a totally disabling respiratory impairment. The amendments also restored surviving spouses' and dependents' automatic entitlement to survivor benefits if the coal miner died while receiving federal Black Lung benefits./183/Several other sections of the BLBA referencing benefits for these miners and surviving spouses were left un-amended. This section makes technical corrections to ensure that the Byrd amendments are applied consistently throughout the BLBA.

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/183/See text accompanying notes 43-47 supra.

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This section also makes a series of technical amendments to render the BLBA gender neutral. For example, it replaces the terms "wife" and "widow" with the terms "spouse" or "surviving spouse," as appropriate. It also modifies current law regarding eligibility for survivor benefits to provide that marital status is determined by the courts of the state in which the marriage was celebrated rather than determining the validity of the marriage based on state of domicile.

Sec. 302. Severability

This section ensures that, if one section of this Act is found to be unconstitutional or otherwise legally unenforceable, the other sections of the law are severed and continue to stand as good law.

Explanation of Amendments

The amendments, including the Amendment in the Nature of a Substitute, are explained in the descriptive portions of this report.

Application of Law to the Legislative Branch

Pursuant to section 102(b)(3) of the Congressional Accountability Act of 1995, Pub. L. No. 104-1, H.R. 6102, as amended, does not apply to terms and conditions of employment or to access to public services or accommodations within the legislative branch.

Unfunded Mandate Statement

Pursuant to section 423 of the Congressional Budget and Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended by section 101(a)(2) of the Unfunded Mandates Reform Act of 1995, Pub. L. No. 104-4), the Committee adopts as its own the estimate of federal mandates regarding H.R. 6102, as amended, prepared by the Director of the Congressional Budget Office.

Earmark Statement

In accordance with clause 9 of rule XXI of the Rules of the House of Representatives, H.R. 6102 does not contain any congressional earmarks, limited tax benefits, or limited tariff benefits as described in clauses 9(e), 9(f), and 9(g) of rule XXI.

Roll Call Votes

In compliance with clause 3(b) of rule XIII of the Rules of the House of Representatives, the Committee advises that the following roll call votes occurred during the Committee's consideration of H.R. 6102:

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Statement of Performance Goals and Objectives

Pursuant to clause (3)(c) of rule XIII of the Rules of the House of Representatives, the goal of H.R. 6102 is to improve the fairness in the administration of the Black Lung Benefits Act for miners suffering from black lung and their survivors.

Duplication of Federal Programs

Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House of Representatives, the Committee states that no provision of H.R. 6102 is known to be duplicative of another federal program, including any program that was included in a report to Congress pursuant to section 21 of Pub. L. No. 111-139 or the most recent Catalog of Federal Domestic Assistance.

Hearings

Pursuant to clause 3(c)(6) of rule XIII of the Rules of the House of Representatives, the Committee's Subcommittee on Workforce Protections held a hearing on December 2, 2021, entitled "Strengthening the Safety Net for Injured Workers," which was used to develop H.R. 6102. The witnesses were: Mr. Christopher J. Godfrey, Director, Office of Workers' Compensation Programs, U.S. Department of Labor, Washington, DC; and Mr. Thomas M. Costa, Director of Education, Workforce, and Income Security for the Government Accountability Office, Washington, DC. Relevant to developing H.R. 6102, the Committee heard testimony about the status of reforms for the black lung program.

Statement of Oversight Findings and Recommendations of the Committee In compliance with clause 3(c)(1) of rule XIII and clause 2(b)(1) of rule X of the Rules of the House of Representatives, the Committee's oversight findings and recommendations are reflected in the descriptive portions of this report.

New Budget Authority and CBO Cost Estimate

Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House of Representatives and section 308(a) of the Congressional Budget and Impoundment Control Act of 1974, and pursuant to clause 3(c)(3) of rule XIII of the Rules of the House of Representatives and section 402 of the Congressional Budget and Impoundment Control Act of 1974, the Committee has received the following estimate for H.R. 6102 from the Director of the Congressional Budget Office:

U.S. Congress, Congressional Budget Office, Washington, DC, September 26, 2022.

Hon. Robert C. (Bobby) Scott, Chairman, Committee on Education and Labor, House of Representatives, Washington, DC.

Dear Mr. Chairman:

The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 6102, the Black Lung Benefits Improvement Act of 2022.

If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is Meredith Decker.

Sincerely, Mark P. Hadley, (For Phillip L. Swagel, Director).

Enclosure.

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The bill would:

* Increase black lung benefits paid to miners and their survivors Make it easier for miners to substantiate their claims using computerized tomography (or CT) scans

* Increase the maximum penalty for coal operators who violate self-insurance rules

* Codify existing regulations and practices for paying black lung benefits

Estimated budgetary effects would mainly stem from:

* Increasing benefits for miners and survivors

* Increasing the number of people who receive black lung benefits

* Reimbursing some attorneys' fees associated with black lung claims

Areas of significant uncertainty include:

The number of additional claims that would be paid because of changes to rules for medical evidence

Bill summary: H.R. 6102 would increase benefits for miners, and their survivors, who are affected by coal workers' pneumoconiosis (commonly referred to as black lung disease) or other lung diseases and would allow certain attorneys' fees to be paid by the federal government. In addition, the bill would expand use of computerized tomography (CT) scans as medical evidence to substantiate miners' black lung claims, resulting in more people receiving benefits. Some of those costs would be paid by responsible coal operators.

Estimated Federal cost: The estimated budgetary effect of H.R. 6102 is shown in Table 1. The costs of the legislation fall within budget function 600 (income security).

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TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 6102

Enacting H.R. 6102 would increase revenue by an insignificant amount over the 2023-2032 period. The bill also would increase spending subject to appropriation by an insignificant amount over the 2023-2027 period.

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Basis of estimate: For this estimate, CBO assumes that H.R. 6102 will be enacted by the end of calendar year 2022. Estimated outlays are based on historical spending patterns for the affected programs.

Direct spending: Under current law, miners, and their survivors, affected by black lung and related diseases can receive benefits if their disease is connected to coal mining. If the responsible mine operator cannot pay benefits, the federal government pays benefits out of the Black Lung Disability Trust Fund (BLDTF). H.R. 6102 would increase direct spending chiefly by increasing benefits for people who are disabled and their survivors, increasing the number of miners who could claim those benefits, and reimbursing attorneys for certain legal fees. Over the 2023-2032 period, CBO estimates the bill would cost $74 million.

Benefit rates: H.R. 6102 would increase the payment for disability and survivors' benefits, retroactively starting on January 1, 2022, by about 4 percent, and would increase those benefits each year based on the change in the Consumer Price Index. CBO estimates that the number of people receiving black lung benefits is roughly 25,000 annually; benefits for about two-thirds of those people will be paid out of the BLDTF. On that basis, and using the inflation rates that underlie CBO's baseline, we estimate that enacting this provision would increase direct spending by $53 million over the 2023-2032 period.

Attorneys' fees: Under the bill, attorneys for people applying for black lung benefits would be reimbursed up to $1,500 for legal fees if the claimant is awarded benefits by a district director and up to $3,000 if benefits are awarded by an administrative law judge. Initially, those amounts would be paid by the federal government, but mine operators would be required to reimburse the Department of Labor (DOL) if the operators are also responsible for the claimants' black lung benefits. Using information from the department, CBO estimates that, on net, the bill would increase direct spending from the BLDTF by $15 million over the 2023-2032 period for attorneys' fees.

Medical evidence: More weight is placed on some types of evidence when evaluating claims for black lung benefits during the adjudication process. Under H.R. 6102, pneumoconiosis or related diseases diagnosed by a CT scan would be weighted equally as other forms of medical evidence in certain cases. Additionally, DOL would be obligated to authorize those scans in certain cases; the cost of authorized medical examination and tests would ultimately be paid for by the BLDTF or responsible coal operator. Because the early stages of pneumoconiosis and related diseases are more likely to be identified through CT scans than other methods, CBO expects that 60 additional people would be awarded black lung benefits over the 2023-2032 period. The federal government would pay the benefits for about 40 of those people through the BLDTF. CBO estimates that the cost of additional scans and benefits would be $6 million over the 2023-2032 period.

Criminal penalties: CBO estimates that H.R. 6102 would increase collections of criminal penalties, which are recorded as revenues, as discussed below under the heading "Revenues." Criminal penalties are deposited in the Crime Victims Fund and later spent without further appropriation action. CBO estimates those additional penalties would increase direct spending by an insignificant amount over the 2023-2032 period.

Other provisions: H.R. 6102 would amend the descriptions of eligibility for black lung benefits and the Office of Workers' Compensation Programs. Because these provisions would codify existing practices and procedures, they would not affect federal spending.

Revenues: Under current law, people who make false statements or submit false claims to obtain black lung benefits can face criminal fines and imprisonment. H.R. 6102 would encourage additional investigations of violators, explicitly define the types of violations that may result in fines, and increase the maximum prison sentence for making a false statement. Criminal fines are recorded as revenues, deposited in the Crime Victims Fund, and later spent without further appropriation action. CBO estimates that those increased penalties would not be significant.

In addition, H.R. 6102 would increase the maximum daily civil penalty from $3,011 to $25,000 if coal mine operators fail to maintain required security or insurance. Finally, the bill would expand the list of corporate executives and entities that can be held jointly or severally liable in the event of a failure to pay black lung benefits; the liability would extend beyond bankruptcy filings or other permanent abandonment. Those fines also are recorded as revenues. Given that DOL has not assessed such penalties in recent years, CBO expects those changes would not increase revenues by a significant amount.

Spending subject to appropriation: The bill would require DOL to issue new regulations concerning self-insurance, procedures for disqualification of attorneys, and discovery sanctions. The bill also would require the Social Security Administration to make earnings information for living or deceased miners available to DOL in electronic form rather than on paper. CBO estimates that the cost of those provisions would be insignificant over the 2023-2032 period.

Uncertainty: CBO's estimates of the budgetary effects of H.R. 6102 are subject to uncertainty. In particular, the number of claims that would be accepted as a result of new rules concerning medical evidence could differ from CBO's projections. Therefore, the cost of benefits could be higher or lower than CBO estimated.

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays and revenues that are subject to those pay-as-you-go procedures are shown in Table 1.

Increase in long-term deficits: CBO estimates that enacting H.R. 6102 would not increase on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2033.

Mandates: H.R. 6102 would impose a private-sector mandate as defined in the Unfunded Mandates Reform Act (UMRA) by increasing the amount and availability of benefits paid under the Black Lung Benefits Act. Benefits currently are paid in part by the employers of claimants; therefore, the changes in the bill would increase the cost of an existing mandate. Because of the small number of additional new beneficiaries, CBO estimates that the cost of the mandate would not exceed the private-sector threshold established in UMRA ($184 million in 2022, adjusted annually for inflation).

The bill contains no intergovernmental mandates as defined in UMRA.

Estimate prepared by: Federal costs: Meredith Decker; Revenues: Omar Morales; Mandates: Andrew Laughlin.

Estimate reviewed by: Elizabeth Cove Delisle, Chief, Income Security Cost Estimates Unit; Joshua Shakin, Chief, Revenue Estimating Unit; H. Samuel Papenfuss, Deputy Director of Budget Analysis; Theresa Gullo, Director of Budget Analysis.

Committee Cost Estimate

Clause 3(d)(1) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison of the costs that would be incurred in carrying out H.R. 6102. However, clause 3(d)(2)(B) of that rule provides that this requirement does not apply when the committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget and Impoundment Control Act of 1974.

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Continues with Part 4 of 4

The report is posted at: https://www.congress.gov/congressional-report/117th-congress/house-report/589/1?s=1&r=10

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