(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 subchapter. 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 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.

For penalties assessed after January 15, 2021, the daily base penalty amount shall be computed as follows:

(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 (c)(2)(i) of this section 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 subchapter.

(4) Commencing with the 11th day after the operator's receipt of the notification sent by the Director pursuant to §726.303, for penalties assessed after January 15, 2021, the daily base penalty amounts set forth in paragraph (c)(2)(i) shall be increased by $148.

(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, for penalties assessed after January 15, 2021, the daily base penalty amounts shall be increased by $441.

(6) The maximum daily base penalty amount applicable to any violation of §726.4 for which penalties are assessed after January 15, 2020, shall be $3,001.

(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.

[65 FR 80097, Dec. 20, 2000, as amended at 81 FR 43449, July 1, 2016; 82 FR 5381, Jan. 18, 2017; 83 FR 12, Jan. 2, 2018; 84 FR 217, Jan. 23, 2019; 85 FR 2297, Jan. 15, 2020; 86 FR, Jan. 15, 2021]