Honorable J. Davitt McAteer
Assistant Secretary for
Mine Safety and Health
Department of Labor
4015 Wilson Boulevard
Arlington, VA 22203-1984
Re: Proposed Rule for Occupational Noise Exposure
30 CFR Part 32, RIN 1219-AA53
Dear Mr. McAteer:
This letter is the official comments of the Small Business Administration's Office of Advocacy on the Mine Safety and Health Administration's (MSHA) proposed rule for occupational noise exposure in coal mines and metal and nonmetal mines.(1)
The Office of Advocacy was established by Congress under Public Law No. 94-305 to advocate for the views of small businesses before Federal agencies and Congress. Advocacy also is required by § 612 of the Regulatory Flexibility Act (RFA) (2) to monitor agencies' compliance with the RFA. These comments are to be placed on the public docket. We recommend a number of steps to improve the analysis including a listing of direct costs, a full explanation of engineering costs, and a further break down of costs in a range of businesses sizes.
First, MSHA has certified that this rule will not have a significant economic impact on a substantial number of small entities. The determination was based on cost estimates provided in the Regulatory Flexibility Analysis. However, the estimates reflected in the tables seem to be based on net costs (i.e., the agency has provided costs estimates that are calculated by taking the direct costs of implementing the rule and offsetting those costs with estimated benefits).(3) If the cost estimates were evaluated alone, there would be more opportunity to evaluate the impact of this rule. For instance, if the analysis showed how the small mines will accommodate the need for immediate capital outlays for engineering controls, the estimated cost likely would be significant.
In order to demonstrate how the "net costs" are an inadequate reflection of the cost to small mines, Advocacy will use one example. MSHA estimates that the cost to the coal mining industry - the sector that is expected to make the most changes to its practices - will encounter fewer costs than the metal and nonmetal sectors.(4) The analysis provides that the average costs for small metal and nonmetal mines with fewer than 500 employees is about $700. In comparison, the average costs for small coal mines with fewer than 500 employees is estimated to be $130.(5) Using this approach is counter intuitive. Clearly, the Regulatory Flexibility Act is intended to bring a transparent review of the costs to small firms. In this instance, we are probably most concerned about those small mines that will face the costly measures that will require intensive capital investments in new equipment and retrofitting and increased operating costs for practices such as administering audiograms. Advocacy recommends that the analysis include a clean listing of estimated direct costs per firm in various sized small mines.
Reviewing the data provided on net costs, the Office of Advocacy is concerned that the hidden cost to all mines is significant. In particular, the average metal and nonmetal mine estimates raised concerns. The estimated costs for a mine with 50 or more employees is $4,359; a mine with 100 or more employees is $6,418; and a mine with 250 or more employees is $14,492. These are large estimates (even as the balance of costs against benefits). Advocacy believes these estimates further support the need for a listing of direct costs without estimated benefits for all small firms. While the average cost may be skewed in these specific ranges due to the high cost of firms with more than 500 employees, Advocacy supports a more detailed analysis in specific size ranges (i.e., 50 to 99 employees, 100 to 250 employees, and 251 to 500 employees) to estimate the cost to small mines. A substantial number of mines fall within any of these ranges.(6) If the costs are significant in any one range, this would justify a full analysis with regulatory alternatives.
The rule's basis is shifting away from personal protective equipment to engineering and administrative controls. The regulatory language is very broad, and it is unclear how it will be implemented. To quote from the draft regulatory text, "If a miner's noise exposure exceeds the PEL, the operator shall, in addition to taking the action required under paragraph (b) of this section, use all feasible engineering and administrative controls to reduce the miners' noise exposure to the PEL."(7) What constitutes feasible controls? Will feasible measures be different for different sized businesses? If so, these estimates need to be made available for public comment.
However, neither the preamble nor the preliminary regulatory flexibility analysis break down the direct cost estimates for engineering and administrative controls for different ranges of small businesses. While MSHA estimated the cost for reviewing engineering and administrative controls, it is unclear what the costs will be for planning and implementing control measures and changes. (8)Advocacy believes that engineering controls may be one of the most burdensome portions of the rule. We recognize that costs will vary from mine to mine. MSHA estimates for some changes that the cost will be as high as $13,000 per piece of equipment, and $700 to $1,000 for retrofitting haulage equipment. However, it is unclear how these estimates were incorporated into the direct costs for small mines of various types and sizes. More specific estimates for the cost of engineering controls need to be incorporated into the analysis, along with estimates on the costs of professional consultants that may be needed for worksite assessments. Advocacy is concerned that these costs will be substantial for small mining operations.
Officials from MSHA met with the Office of Advocacy to discuss a size standard for this rule's Regulatory Flexibility Analysis. The RFA requires that agencies comply with the size standards established by the Small Business Administration.(9) If an agency proposes to use an alternative size standard, they must consult with the Chief Counsel for Advocacy and submit the alternative to the public for comment. After consultation, the agency used the SBA definition of "small business" established by regulation (i.e., mines with less than 500 employees) for the purposes of the analysis. However, much of the data presented on specific costs in the preamble were given only for firms with fewer than 20 employees. We first recommend that the agency supply cost data for the entire range of small businesses. Further, Advocacy supports the continued use of the SBA standard for the final rule's Regulatory Flexibility Analysis because there has been no economic data presented to support a different definition. In fact, we believe that mines with 20 or more employees may be expected to take more costly measures under this rule in the form of engineering controls. However, this determination can be made only after the direct cost data are provided as requested above.
In conclusion, the Office of Advocacy encourages MSHA to carefully review the record for comments received from small businesses and their representatives with recommendations for and concerns about the rule. These comments are expected to address other aspects of the rule, such as implementation, requirements and the PEL. If we can be of further assistance, please contact us at (202) 205-6533.
Sincerely,
Anita Drummond
Policy Advocate
Sarah Rice
Policy Advocate
cc: Honorable Jere W. Glover
Endnotes
1. Fed. Reg., Vol. 61, No. 243 (December 17, 1996).
2. 5 U.S.C. §§ 601 et seq.
3. The estimated benefits that have been offered may be valid. For instance, the agency touts savings for workers compensation. However, these are elusive savings that the business cannot put in the bank while implementing changes.
4. Preliminary Regulatory Impact Analysis and Preliminary Regulatory Flexibility Analysis
5. For micro-businesses (e.g. mines with fewer than 20 employees), the agency estimates that the costs are $500 for metal and nonmetal mines and a $30 savings for coal mines.
6. U.S. Bureau of Census 1993 data are attached with aggregate numbers for various ranges.
7. Fed. Reg., Vol. 61, No. 243, Page 66466 (December 17, 1996).
8. The estimate for an administrative review is only .75 to 1.5 hours.
9. 13 C.F.R. Part 121.