Mine Safety Disclosure Supporting Statement.08-12-2011

SUPPORTING STATEMENT FOR PROPOSED RULES UNDER THE
SECURITIES ACT OF 1933,
SECURITIES EXCHANGE ACT OF 1934,
DODD-FRANK WALL STREET REFORM AND
CONSUMER PROTECTION ACT
This supporting statement is part of a submission under the Paperwork Reduction Act
of 1995, 44 U.S.C. §3501, et seq.
A. JUSTIFICATION
1. CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY
In Release No. 33-9164,1 the Securities and Exchange Commission (the
―Commission‖) proposed amendments to certain rule and form requirements to implement
Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
(―the Act‖), which requires disclosure of specified mine safety and health violations, orders
and citations and related matters.
The proposed amendments contain ―collection of information‖ requirements within
the meaning of the Paperwork Reduction Act of 1995. The titles for the collections of
information contained by the proposed amendments are:
―Regulation S-K‖ (OMB Control No. 3235-0071);2
―Form 10-K‖ (OMB Control No. 3235-0063);
―Form 10-Q‖ (OMB Control No. 3235-0070);
―Form 8-K‖ (OMB Control No. 3235-0060);
―Form 20-F‖ (OMB Control No. 3235-0288); and
―Form 40-F‖ (OMB Control No. 3235-0381).

1

Mine Safety Disclosure, Release No. 33-9164 (December 15, 2010) [75 FR 80374] (―Proposing
Release‖).
2

The paperwork burden from Regulation S-K is imposed through the forms that are subject to the
disclosures in Regulation S-K and is reflected in the analysis of those forms. To avoid a Paperwork
Reduction Act inventory reflecting duplicative burdens, for administrative convenience, we estimate
the burden imposed by Regulation S-K to be a total of one hour.

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2. PURPOSE AND USE OF THE INFORMATION COLLECTION
The purpose of the proposed collections of information is to implement the disclosure
requirements of Section 1503 of the Act and, to a limited degree, enhance the disclosure
requirements set forth in that Section. Specifically, the amendments would require a public
company that is an operator, or has a subsidiary that is an operator, of a coal or other mine, to
provide disclosure in its periodic reports filed with the Commission of the following:
The total number of violations of mandatory health or safety standards that could
significantly and substantially contribute to the cause and effect of a coal or other
mine safety or health hazard under section 104 of the Federal Mine Safety and
Health Act of 19773 (the ―Mine Act‖) for which the operator received a citation
from the Mine Safety and Health Administration (―MSHA‖).
The total number of orders issued under section 104(b) of the Mine Act.
The total number of citations and orders for unwarrantable failure of the mine
operator to comply with mandatory health and safety standards under section
104(d) of the Mine Act.
The total number of flagrant violations under section 110(b)(2) of the Mine Act.
The total number of imminent danger orders issued under section 107(a) of the
Mine Act.
The total dollar value of proposed assessments from MSHA.
The total number of mining related fatalities.
A list of mines for which the issuer or a subsidiary received written notice from
MHSA of a pattern of violations of mandatory health or safety standards that are
of such nature as could have significantly and substantially contributed to the
cause and effect of coal or other mine health or safety hazards under section
104(e) of the Mine Act.
A list of mines for which the issuer or a subsidiary received written notice from
MHSA of the potential to have such a pattern of violations of mandatory health or
safety standards.
Any pending legal action before the Federal Mine Safety and Health Commission
involving such coal or other mine.
A brief description of each category of violations, orders and citations reported.
In addition, the amendments would add a new item to Form 8-K to implement the
requirement of Section 1503 of the Dodd-Frank Act, which requires companies to file a Form
8-K reporting the receipt of:
An imminent danger order under section 107(a) of the Mine Act;
Written notice from MSHA of a pattern of violations of mandatory health or
safety standards that are of such nature as could have significantly and
3

30 U.S.C. 801 et seq.

2

substantially contributed to the cause and effect of coal or other mine health or
safety hazards under section 104(e) of the Mine Act; or
Written notice from MSHA of the potential to have a pattern of such violations.
3. CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY
All of the above forms are filed electronically with the Commission using the
Commission’s Electronic Data Gathering, Analysis and Retrieval system.
4. DUPLICATION OF INFORMATION
We are not aware of any rules that conflict with or substantially duplicate the
proposed rules. However, one disclosure requirement set forth in Section 1503 calls for
disclosure of mining-related fatalities, and therefore overlaps to some extent with a
disclosure requirement under the rules of MSHA. MSHA requires companies to report to
MSHA immediately any death of any individual at a mine.4 Section 1503 of the Dodd-Frank
Act requires, and the proposed amendments also would require, companies to disclose in
their periodic reports any mining-related fatalities that occur during the time period covered
by such report.
5. REDUCING THE BURDEN ON SMALL ENTITIES
The disclosure requirement set forth in Section 1503 of the Dodd-Frank Act applies,
regardless of whether the Commission adopts rules to implement such requirement, to all
companies, including small entities, that are required to file reports with the Commission
pursuant to sections 13(a) or 15(d) of the Exchange Act, and that operate, or have a
subsidiary that operates, a coal or other mine (as defined in Section 1503 of the Dodd-Frank
Act). The proposed disclosure standards implement the disclosure requirements set forth in
Section 1503, and propose additional disclosure to provide context for certain items required
by Section 1503. The proposed requirements do not vary based on the size of the issuer.
The information called for by Section 1503 of the Dodd-Frank Act and the proposed
requirements should be available from a company’s books and records, because companies
receive the citations, orders and notices directly from MSHA and the information can also be
accessed via MSHA’s data retrieval system. For these reason, the amendments should not
have a significant economic impact on small entities.
6. CONSEQUENCES OF NOT CONDUCTING COLLECTION
The regulations and forms set forth the disclosure requirements for registration
periodic and current reports filed by companies to help investors make informed investment

4

30 CFR 50.10.

3

and voting decisions. Less frequent collection would deprive investors of access to
information that is important to their voting and investment decisions.
7. SPECIAL CIRCUMSTANCES
Not applicable.
8. CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY
The Commission has issued a proposing release soliciting comment on the new
―collection of information‖ requirements and associated paperwork burdens. A copy of the
proposing release is attached. In response to the solicitation for comment in the proposing
release, registrants, investors, and other market participants provide comments. In addition,
the Commission and staff participate in ongoing dialogue with representatives of various
market participants through public conferences, meetings, and informal exchanges. The
Commission will consider all comments received prior to publishing the final rule as required
by 1320.11(f). The public can review comments at http://www.sec.gov/comments/s7-4110/s74110.shtml.
9. PAYMENT OR GIFT TO RESPONDENTS
Not applicable.
10. CONFIDENTIALITY
Not applicable.
11. SENSITIVE QUESTIONS
Not applicable.
12. AND 13. ESTIMATES OF HOUR AND COST BURDENS
The Commission expects that the proposed disclosure amendments would increase
the burdens and costs for companies that would be subject to the proposed amendments.
Section 1503 of the Dodd-Frank Act has already increased the burdens and costs for issuers
by requiring disclosure of specified mine safety and health issues in periodic and current
reports. Our proposed amendments would incorporate the Dodd-Frank Act requirements into
the Commission’s rules and forms, and would require certain additional disclosure to provide
context to the disclosure items required by the Dodd-Frank Act.
We estimate the annual incremental paperwork burden for all companies to prepare
the disclosure that would be required under our proposals to be approximately 1,677 hours of
company personnel time and a cost of approximately $263,500 for the services of outside
4

professionals. These estimates include the time and the cost of implementing disclosure
controls and procedures, preparing and reviewing disclosure, filing documents and retaining
records.
Our annual burden estimates are based on our understanding that the information
required to be disclosed is readily available to issuers, and that therefore the burden imposed
by the disclosure requirements is mainly in formatting the information in order to comply
with our disclosure requirements and ensuring that appropriate disclosure controls and
procedures are in place to facilitate reporting of the information. For each reporting
company that we anticipate would be affected by the proposed rules, we estimate that the
proposed amendments would impose on average the following incremental burden hours:
5 hours for the proposed amendments to Form 10-K;
5 hours for the proposed amendments to Form 20-F;
5 hours for the proposed amendments to Form 40-F;
5 hours for the proposed amendments to Form 10-Q
1 hour for the proposed amendments to Form 8-K.

1. Form 10-K
Based on a review of companies filing under certain SICs, as well as a review of
companies that are currently providing disclosure of mine safety violations in Commission
filings in accordance with Section 1503 of the Act, we estimate that, of the 13,545 Form 10Ks filed annually, approximately 95 are filed by companies that operate, or have a subsidiary
that operates, a mine subject to the Mine Act, and that therefore would be affected by the
proposed rule and form amendments. For purposes of the PRA, we assume that each such
filer would have disclosures about mine safety violations to include in its Form 10-K.
2. Form 20-F
Based on a review of companies filing under certain SICs, as well as a review of
companies that are currently providing disclosure of mine safety violations in Commission
filings in accordance with Section 1503 of the Act, we currently estimate that of the 942
Form 20-F annual reports filed annually by foreign private issuers, approximately 15 are filed
by companies that operate, or have a subsidiary that operates, a mine subject to the Mine Act,
and that therefore would be affected by the proposed rule and form amendments. For
purposes of the PRA, we assume that each such filer would have disclosures about mine
safety violations to include in its Form 20-F.
3. Form 40-F
Based on a review of companies filing under certain SICs, as well as a review of
5

companies that are currently providing disclosure of mine safety violations in Commission
filings in accordance with Section 1503 of the Act, we estimate that, of the 205 Form 40-F
annual reports filed annually by foreign private issuers, approximately 15 are filed by
companies that operate, or have a subsidiary that operates, a mine subject to the Mine Act,
and that therefore would be affected by the proposed rule and form amendments. For
purposes of the PRA, we assume that each such filer would have disclosures about mine
safety violations to include in its Form 40-F.
4. Form 10-Q
Based on a review of companies filing under certain SICs, as well as a review of
companies that are currently providing disclosure of mine safety violations in Commission
filings in accordance with Section 1503 of the Act, we estimate that, of the 32,462 Form 10Qs filed annually, approximately 285 are filed by companies that operate, or have a
subsidiary that operates, a mine subject to the Mine Act, and that therefore would be affected
by the proposed rule and form amendments. For purposes of the PRA, we assume that each
such filer would have disclosures about mine safety violations to include in its Form 10-Q.
5. Form 8-K
Only companies that are operators, or have subsidiaries that are operators, of coal or
other mines (as defined in the Mine Act and subject to the Mine Act) are required to comply
with the proposed new Form 8-K requirement. For purposes of the PRA, we estimate that
there will be approximately 95 Form 8-K filers under new Item 1.04, which is based on our
estimate of the number of Form 10-K filers that operate, or have a subsidiary that operates, a
mine subject to the Mine Act, and that therefore would be affected by the proposed rule and
form amendments. In addition, we understand that the triggering events for Form 8-K filing
set forth in Section 1503(b)(2) – the receipt of written notice from MSHA that the coal or
other mine has a pattern of violations or the potential to have such a pattern – are very rare,
while the triggering event set forth in Section 1503(b)(1) – the receipt of an imminent danger
order – is more common.5 For purposes of this calculation, we assume that each potential
filer under proposed Item 1.04 of Form 8-K would file three Forms 8-K per year under new
Item 1.04 and we estimate that the proposed amendments to Form 8-K would add 1 burden
hour to the total burden hours required to produce each Form 8-K.
The tables below illustrate the total annual compliance burden of the collection of
information in hours and in cost under the proposed amendments for annual reports;

5

See U.S. Department of Labor, Office of Inspector General, In 32 Years MSHA Has Never Successfully
Exercised Its Pattern of Violations Authority, Report Number 05-10-005-06-001 (Sept. 29, 2010). According to
data available on MSHA’s website, 631 and 562 imminent danger orders under Section 107(a) were issued
during fiscal 2010 and 2009, respectively. See Violations Data Set (as of Nov. 12, 2010), available at
http://www.msha.gov/OpenGovernmentData/OGIMSHA.asp (on file with the Division of Corporation
Finance). Note that this number includes all imminent danger orders issued to all companies subject to
MSHA’s jurisdiction, not only to reporting companies that are subject to the disclosure requirements of Section
1503 of the Act.

6

quarterly reports and current reports, and Regulation S-K.6 The burden estimates were
calculated by multiplying the estimated number of responses by the estimated average
amount of time it would take an issuer to prepare and review the proposed disclosure
requirements. For the Exchange Act reports on Forms 10-K, 10-Q and 8-K, we estimate that
75% of the burden of preparation is carried by the company internally and that 25% of the
burden of preparation is carried by outside professionals retained by the issuer at an average
cost of $400 per hour. For Forms 20-F and 40-F, we estimate that 25% of the burden of
preparation is carried by the issuer internally and that 75% of the burden of preparation is
carried by outside professionals retained by the issuer at an average cost of $400 per hour.
There is no change to the estimated burden of the collections of information under
Regulation S-K because the burdens that this regulation imposes are reflected in our revised
estimated for the forms. The portion of the burden carried by outside professionals is
reflected as a cost, while the portion of the burden carried by the issuer internally is reflected
in hours.
Table 1. Incremental Paperwork Burden under the proposed amendments for annual
reports; quarterly reports; and current reports:
Current
Annual
Responses
(A)

Proposed
Annual
Responses
(B)

Current
Burden
Hours
(C)

Increase/(De
crease) in
Burden
Hours
(D)

Proposed
Burden Hours
(E)
=C+D

Current
Professional Costs
(F)

Increase/(Decrea
se) in
Professional
Costs
(G)

Proposed
Professional Costs
=F+G

Form 10-K

13,545

13,545

21,361,898

356

21,362,254

$2,848,253,000

$47,500

$2,848,300,500

Form 20-F

942

942

622,871

19

622,890

$743,047,230

$22,500

$743,069,730

Form 40-F

205

205

21,884

19

21,903

$26,260,500

$22,500

$26,283,000

Form 10-Q

32,462

32,462

4,559,793

1,069

4,560,862

$607,972,400

$142,500

$608,114,900

Form 8-K

116,860

117,145

502,839

214

503,053

$67,045,200

$28,500

$67,073,700

Total

1,677

$263,500

14. COSTS TO FEDERAL GOVERNMENT
We estimate that the cost of preparing the amendments will be approximately
$25,000.
15. REASON FOR CHANGE IN BURDEN
Tables 2A and 2B below illustrate the changes to the total annual compliance burden
of the collection of information in hours and cost per response, respectively. The total
estimated burdens were calculated by adding the incremental burdens to the existing burdens.

6

Figures in both tables have been rounded to the nearest whole number.

7

Then, the requested burdens and costs per response were calculated by dividing the requested
burden estimates by the number of annual responses.
Table 2A: Calculation of Hours Per Response
Form

10-K
20-F
40-F
10-Q
8-K

Existing
Annual
Responses

Increase
(Decrease)
in Annual
Responses

Current
Burden
Hours

Program Change:
Increase
(Decrease) in
Burden Hours

Requested Burden
Hours

Requested
Burden per
Response

(A)

(B)

(C)

(D)

(E) = (C) + (D)

13,545
942
205
32,462
116,860

—
—
—
—
285

21,361,898
622,871
21,884
4,559,793
502,839

356
19
19
1,069
214

21,362,254
622,890
21,903
4,560,862
503,053

(F) =
(D)/(A+B)
1,577.132078
661.242038
106.843
140.49849
4.29427

Table 2B: Calculation of Cost Per Response
Form

10-K
20-F
40-F
10-Q
8-K

Existing
Annual
Responses

(A)
13,545
942
205
32,462
116,860

Increase
(Decrease)
in Annual
Responses
—
—
—
—
285

Current Cost
Burden

(B)
$2,848,253,000
$743,047,230
$26,260,500
$607,972,400
$67,045,200

Program
Change:
Increase
(Decrease) in
Cost Burden
(C)
$47,500
$22,500
$22,500
$142,500
$28,500

Requested Cost
Burden

Proposed Cost
per Response

(D) = (B) + (C)
$2,848,300,500
$743,069,730
$26,283,000
$608,114,900
$67,073,700

(E) = (D)/(A)
$210,284.274640
$788,821.36942
$128,209.756
$18,733.13104
$572.56989

16. INFORMATION COLLECTION PLANNED FOR STATISTICAL
PURPOSES
Not applicable.
17. DISPLAY OF OMB APPROVAL DATE
Not applicable.
18. EXCEPTIONS TO CERTIFICATION FOR PAPERWORK REDUCTION
ACT SUBMISSIONS
Not applicable.
B. STATISTICAL METHODS
Not applicable.
8