The 504 Loan Program is a U.S. Small Business Administration (SBA) financing program authorized under Title V of the Small Business Investment Act of 1958, 15 U.S.C. 695 et seq. The core mission of the 504 Loan Program is to provide long-term financing to small businesses for the purchase or improvement of land, buildings, and major equipment in an effort to facilitate the creation or retention of jobs and local economic development. Under the 504 Loan Program, loans are made to small businesses by Certified Development Companies (CDCs), which are certified and regulated by SBA to promote economic development within their community. In general, a project in the 504 Loan Program (a 504 Project) is financed with: A loan obtained from a private sector lender with a senior lien covering at least 50 percent of the project cost (the Third Party Loan); a loan obtained from a CDC (the 504 Loan) with a junior lien covering up to 40 percent of the total cost (backed by a 100 percent SBA-guaranteed debenture sold in private pooling transactions); and a contribution from the Borrower of at least 10 percent equity.

On April 15, 2019, SBA published a proposed rule in the Federal Register to simplify, streamline, and update SBA's regulations relating to CDC operational and organizational requirements in order to improve efficiencies and achieve cost savings without compromising performance in the 504 Loan Program. See 84 FR 15147. The comment period was open until June 14, 2019. SBA received a total of 100 comments from 58 CDCs, 18 individuals who are employed by or otherwise associated with a CDC, 11 other individuals, 2 trade associations, 4 banks (SBA received two comments from the same bank for a total of 5 comments from banks), 3 from other private companies, and 3 from anonymous sources. The comments are summarized and addressed below.

SBA proposed to amend § 120.818 to reinstate the prohibition, which was inadvertently eliminated from the regulations in 2014, against any person or entity owning or controlling more than ten percent of a for-profit CDC's voting stock. The purpose of the 10 percent limit on stock ownership was to ensure that no one person or entity can control a for-profit CDC. SBA received 55 comments on § 120.818; all but one of the commenters supported reinstating this requirement. One of the commenters who supported reinstating an ownership limit argued that the 10 percent limit is lower than needed to prevent control by a person or entity and recommended a 20 percent limit instead.

The one opposing commenter argued that there is no rational basis for the 10 percent limit and that imposing this limit on for-profit CDCs is inconsistent with the intent behind 13 CFR 120.818 that for-profit and non-profit CDCs be subject to the same regulations. The commenter also argued that SBA must either compensate the stockholders who would have to divest as a result of the 10 percent limit or phase in the requirement over the course of a number of years to allow recovery on the investment; otherwise, the commenter argued, the 10 percent limit would be subject to challenge as a regulatory “taking.” In addition, the commenter disagreed with SBA's conclusion that this change will not have a significant impact on a substantial number of small entities and contended that this change requires SBA to conduct an initial regulatory flexibility analysis under 5 U.S.C. 603.

SBA has considered these comments and has decided to adopt the proposed changes to the ownership and control requirements with two revisions: (1) The 10 percent limit on the ownership of stock by any one person or entity will be raised to 25 percent; and (2) for non-profit CDCs with a Board of Directors elected or appointed by the CDC's membership, no person or entity can control more than 25 percent of the voting membership of the CDC.

With respect to the first revision, SBA reviewed the current ownership percentages for each of the four for-profit CDCs and determined that the largest stock ownership by any one shareholder is just under 24 percent. (SBA notes that a CDC's corporate (or treasury) stock should not be included in the calculation of the ownership percentage of the CDC's voting stock.) With the increase of the limit to 25 percent, no person or entity currently owning any stock in a for-profit CDC will be required to divest any portion of their stock ownership and, thus, there will be no significant economic impact on any small entity as a result of this provision.

With respect to the second revision, SBA agrees with the commenter that for-profit and non-profit CDCs should be subject to the same standards governing control of a CDC. Almost half of non-profit CDCs have chosen to continue to have memberships since the membership requirement was eliminated in 2014 and, under the bylaws of many of these CDCs, the members appoint or elect directors to the CDC's Board. To ensure that no one individual or entity can control the voting membership of a CDC when the members elect or appoint directors to the Board, the 25 percent limit should apply to these non-profit CDCs in the same manner that the 25 percent limit will apply to for-profit CDCs. Accordingly, in response to the comments, SBA is revising § 120.816 by adding a paragraph (d) to provide that, if a non-profit CDC's membership elects or appoints the voting directors to the CDC's Board of Directors, no one person or entity can control more than 25 percent of the voting membership of the CDC.

These two revisions will reinstate what has long been a feature of SBA's development company programs—that no one person or entity can control a CDC. Before the 10 percent limit was inadvertently removed from the regulations in 2014, it had been SBA's policy since 1982, nearly from the beginning of the 503 Development Company Program,1 to limit the ownership or control that any one person or entity could have over a development company to 10 percent. See 13 CFR 108.503-1(c)(1) (1983) (“No member or stockholder [of a 503 company] may own or control more than ten percent of the development company's stock or voting membership”). In addition, as early as 1973, SBA prohibited any shareholder or member of a development company participating in the 502 Local Development Company Program (which is no longer funded) from owning in excess of 25 percent of the voting control in the development company under certain circumstances. See 13 CFR 108.2(d)(2) (1974).

The limitation on ownership and control was carried over into the 504 Loan Program in 1986, with the former § 108.503-1(d)(1) (1987) requiring a CDC to have at least 25 members (if non-profit) and 25 stockholders (if for-profit) and prohibiting any one person or entity from owning or controlling more than 10 percent of the CDC's stock or voting membership. With the Board of a nonprofit CDC chosen from the CDC's membership, and the Board of a for-profit CDC chosen by the CDC's stockholders, it was necessary to prohibit any one person or entity from controlling the voting membership or stock of the CDC to avoid any one person or entity from being able to control the Board. Thus, SBA has consistently applied the same ownership and control standards to both for-profit and non-profit CDCs and is continuing that practice in this final rule.

The opposing commenter also argued that fewer owners of a for-profit CDC generally means a greater investment by those owners and that, with a greater investment, the owners have more to lose from non-performing loans and more incentive to comply with SBA's Loan Program Requirements. SBA notes that all CDCs are required to comply with SBA's Loan Program Requirements, and the commenter provided no evidence to support the view that permitting a greater financial stake in a CDC by individual owners would increase the likelihood of such compliance. In any event, SBA believes that a greater financial stake by an individual shareholder should not be necessary to ensure such compliance or to motivate the CDC to make successful loans. As reflected in the long regulatory history of the program, the primary purpose of the 504 Loan Program (and its predecessor development company programs) is to foster economic development, and SBA has long emphasized the pro bono publico nature of the 504 Loan Program over the profit incentive and that the program was not intended to be a profit center for owners. See, e.g., 13 CFR 108.2 (1995) (Definition of “Development company”) (“the primary objective of the development company must be the benefit to the community as measured by increased employment, payroll, business volume . . . rather than monetary profits to its shareholders or members; any monetary profits or other benefits which flow to the shareholders or members of the local development company must be merely incidental thereto”) (emphasis added); see also 51 FR 20764, 20765 (June 6, 1986) (“The nature of the 503 company is to be a catalyst in fostering economic development, and not a profit center for owners or members”).

SBA believes that the public purpose of the 504 Loan Program is best achieved when the profit motive is not amplified by allowing the control of a for-profit CDC to be concentrated in any one person or entity. Moreover, SBA believes that economic development is best fostered by having a wider range of views and interests represented in the CDC's decision-making and that, by not allowing the ownership or control of a CDC to be concentrated in any one individual or entity, it is more likely that the economic benefits of the 504 Loan Program will be dispersed throughout the community. Therefore, after consideration of the comments, SBA is finalizing the proposal with the two changes described above.

SBA proposed to amend § 120.823 by:

(1) Revising paragraph (a) to lower the minimum number of directors required for the CDC's Board from nine to seven, which reduces the number needed for a quorum from five to four. For consistency with this change, SBA also proposed to amend § 120.823(d)(4)(ii)(B) to reduce the number of members needed for a quorum of the CDC's Loan Committee from five to four;

(2) removing the provision in § 120.823(a) that recommends that a CDC have no more than 25 directors;

(3) clarifying in paragraphs (a) and (d)(4)(ii)(E) that Board and Loan Committee members are required “to live or work in the CDC's State of incorporation”. SBA proposed to use this simpler phrase instead of the current language—which states that members are required “to live or work in the Area of Operations of the State where the 504 project they are voting on is located”—because today the minimum Area of Operations for each CDC is the State in which the CDC is incorporated. SBA also proposed to allow Board members to live or work in an area that would meet the definition of a Local Economic Area (LEA) for the CDC. For consistency, the rule proposed to apply this same standard to Loan Committee members;

(4) deleting the requirement in § 120.823(a) that CDCs must have at least one voting director who only represents the economic, community, or workforce development fields, and adding “the economic, community, or workforce development fields” to the five other areas of expertise identified in the current § 120.823(a) that must be represented on the Board; and

(5) removing § 120.823(c)(4), which limits the number of directors in the commercial lending field to less than 50 percent of the Board of Directors.

SBA received 58 comments on the above changes, with 56 commenters supporting all of the changes and two commenters opposing a few of the changes. One CDC opposed deleting the requirement that the Board have at least one voting director to represent the economic, community, or workforce development fields (described in paragraph (4) above). The commenter stated that the CDC has benefited from having a director devoted to the economic field, and that this expertise has proven invaluable to lending in rural areas. The commenter believes that it would be a loss from a national perspective to eliminate the requirement. SBA appreciates the commenter's perspective, but points out that, with this change, the CDC would still be required to have the economic, community or workforce development fields represented on the Board. The difference is that the Board member would be able to represent more than one area of expertise and not only the economic, community or workforce development fields.

The same commenter also opposed removing the requirement that limits the number of directors in the commercial lending field to less than 50 percent of the Board (described in paragraph (5) above). The commenter stated that this change could result in a Board composed of all commercial lenders, which may not serve the 504 Loan Program's purpose of promoting economic development. However, as noted in the proposed rule, the regulation will continue to require that the Board include members with background and expertise in the five other identified areas, including the economic, community or workforce development fields; internal controls; financial risk management; legal issues relating to commercial lending; and corporate governance. SBA believes that this requirement will ensure an appropriate level of diversity of experience on the Board.

Another commenter wrote in opposition to the change described in paragraph (3) above. This commenter argued that requiring Board members to live or work in the CDC's Area of Operations is a new legal requirement that provides no benefit to the program and deprives CDCs of the assistance of individuals who own second homes in the State or temporarily reside outside the State for work or other reasons while retaining a strong connection to the State. However, as noted in the proposed rule, it has long been SBA's policy to require Board members to live or work in the CDC's Area of Operations (today, the minimum Area of Operations for each CDC is the State in which the CDC is incorporated and, therefore, it is more accurate to use the phrase “State of incorporation” instead of “Area of Operations” in connection with this policy). This requirement to live or work in the CDC's State of incorporation furthers the local nature of the 504 Loan Program, obligates Board members to have more than a temporary or tenuous connection to the CDC's State of incorporation, and ensures that the CDC is under the control of individuals with a vested and demonstrable interest in the community in which the CDC is investing. In addition, members who live or work in the CDC's State of incorporation will have a better knowledge of the Area's economic environment. By reducing the required number of Board members from 9 to 7, SBA is also making it less difficult for CDCs to find individuals to serve on the Board.

SBA is adopting all of the changes to § 120.823 as proposed. In addition, to conform § 120.823(d)(4)(i)(B) to the change described in paragraph (1) above, SBA is reducing the minimum number of voting members who must be present to conduct business on the CDC's Executive Committee (if established) from five to four.

SBA proposed to amend § 120.824 to permit a CDC to contract with another CDC for marketing, packaging, processing, closing, servicing, or liquidation functions under the following conditions:

(1) A CDC may enter into a professional services contract with another CDC even if the arrangement would give rise to an affiliation between the CDCs based on an “identity of interest”, as defined under 13 CFR 121.103(f); 2

(2) the contract between the CDCs must be pre-approved by the Director of the Office of Financial Assistance (D/FA) (or designee), in consultation with the Director of the Office of Credit Risk Management (D/OCRM) (or designee), who will determine in his or her discretion that such approval is in the best interests of the 504 Loan Program and that the contract includes terms and conditions satisfactory to SBA. (The proposed rule also provided that a contract for management services with another CDC may be entered into only in accordance with redesignated § 120.824(a)(1)(ii) and with the prior approval of the D/FA (or designee), in consultation with the D/OCRM (or designee));

(3) the CDCs entering into the contract must be located either in the same SBA Region or, if not in the same SBA Region, must be located in contiguous States;

(4) a CDC may provide assistance to only one CDC per State;

(5) no CDC may provide assistance to another CDC in its State of incorporation or in any State in which the CDC has Multi-State authority;

(6) the Board of Directors for each CDC entering into the contract must be separate and independent and may not include any common directors, whether voting or non-voting. In addition, if either of the CDCs is for-profit, neither CDC may own any stock in the other CDC (notwithstanding § 120.820(d), which allows a CDC to invest in or finance another CDC with the prior written approval of SBA officials). The CDCs are also prohibited from comingling any funds;

(7) the CDCs and the contract must comply with the other requirements for professional services contracts set forth in the proposed § 120.824(a) (which are now set forth in the final rule in § 120.824(c));

(8) a contract between CDCs may not include services for either independent loan reviews or management services (except rural CDCs could continue to contract for management services with another CDC as described in the current § 120.824(a)(2)); and

(9) affiliation between CDCs based on grounds other than identity of interest, including but not limited to, through ownership or common management under § 121.103(c) and (e), respectively, would continue to be prohibited.

SBA received a total of 63 comments on some or all of the above changes. Most expressed general support for the flexibility that the above changes would provide with respect to the contracts between CDCs, but nearly all expressed opposition to the following two changes: (A) The geographic restrictions on contracts between CDCs (paragraphs (3), (4), and (5) above), and (B) the prohibition against CDCs conducting independent loan reviews for each other (paragraph 8 above).

SBA received 62 comments on the changes described in paragraphs (3), (4), and (5) above which place geographic limits on these contracts, with one commenter writing to generally support the geographic restrictions and the remaining 61 commenters writing to oppose them. Nearly all of the opposing commenters argued that these contracts should be evaluated primarily on the quality of the CDC service provider, not on geography. They contended that permitting a CDC to contract with another CDC outside its SBA Region would allow a CDC to select from a larger and more competitive field of qualified providers and avoid concerns about sharing market and customer data with a potential competitor. Some also objected to applying this restriction to contracts currently in place, and state that SBA's concerns can be addressed through the current contract review process.

In addition, four commenters suggested that a CDC should not be able to provide services to more than three other CDCs in its SBA Region (one of the commenters suggested that the limit should be two), arguing that this limit would prevent CDCs from essentially becoming regional through these agreements, and that it would ensure that the assisting CDC continues to focus on its primary area of operation. Two commenters stated that a CDC should be allowed to service another CDC only if the CDC has demonstrated its first responsibility to its primary market by making an average of 10 or more loans in its primary State during the previous 3 years.

SBA has considered these comments and has decided to adopt the geographic restrictions on these contracts as proposed, with exceptions for liquidation services and independent loan reviews as described below. SBA's decision to not allow CDCs to contract outside their SBA Region or a contiguous State is based on its commitment to maintaining a balance among three factors: The local nature of the 504 Loan Program, SBA's interest in helping smaller CDCs obtain assistance from their larger counterparts when needed to function in the best interests of the 504 Loan Program, and SBA's current regulatory framework that allows CDCs to expand their Area of Operations only under certain prescribed conditions, e.g., Multi-State and Local Economic Area expansions under § 120.835. SBA has long been concerned about CDCs using these contracts to circumvent the established expansion standards and to encroach into areas far beyond their established Area of Operations. In balancing these factors, SBA continues to conclude that CDCs should be able to contract with each other even if the arrangement gives rise to an affiliation based on identity of interest, but only under the conditions described above, including that the CDCs must be located within the same SBA Region or in a contiguous State. SBA also believes that the proposed geographic restrictions taken together—including that CDCs entering into the contract must be located either in the same SBA Region or in a contiguous State, that a CDC may provide assistance to only one CDC per State, and that no CDC may provide assistance to another CDC in its State of incorporation or in any State in which the CDC has Multi-State authority—will adequately protect against any one CDC dominating its SBA Region. SBA further expects that a CDC in need of assistance from another CDC will be motivated to contract only with those CDCs that have demonstrated their ability and capacity to perform effectively in their primary market.

With respect to the comments that object to applying the geographic restrictions to any contract currently in place between CDCs, SBA begins by noting that current § 120.820(a) requires CDCs to be independent (with exceptions for certain types of affiliations). To ensure that contracts between CDCs would not undermine the intent of this regulation, SBA has required since 2015 that contracts between CDCs be limited in time and scope and have a transition phase leading to contract termination. See SOP 50 10 5(H), Subpart A, Chapter 3, ¶ II.A.7.(e)(ii). (To provide more certainty with respect to the permitted duration for these contracts, SBA added a 5-year limit to the SOP in January 2018. See SOP 50 10 5(J), Subpart A, Chapter 3, ¶ II.A.8.d)(ii)). Any CDC that currently contracts with another CDC outside its SBA Region has, therefore, been on notice for several years that SBA policy prohibited its contract from continuing indefinitely. There are four CDCs that currently have contracts with five other CDCs outside their SBA Region. As stated in the proposed rule, these CDCs will be permitted to continue these contracts until the current term of the contract expires, giving them the opportunity to make the changes necessary to comply with the final rule.

As indicated above, SBA is adopting an exception to the geographic restriction for contracts for liquidation services. (The second exception for independent loan reviews is discussed in paragraph (B) below.) SBA believes that it will be beneficial to the 504 Loan Program to allow a CDC to assist another CDC with liquidation services when needed, regardless of the location of the CDCs. Because liquidation services are provided at the final stage of a 504 loan, there is no risk of a CDC using a liquidation services contract as a means to expand its 504 operations into other SBA Regions. Accordingly, SBA is revising the rule to allow a CDC to contract with another CDC outside its SBA Region for liquidation services.

SBA received a total of 54 comments on the prohibition in paragraph (8) against a CDC contracting with another CDC for services for independent loan reviews. One commenter supported this prohibition due to the potential conflict of interest problems that could arise, and the remaining 53 opposed the prohibition (except that one of these commenters argued that two CDCs should not be able to conduct reviews for each other). The opposing commenters observed that CDCs are currently allowed to perform these reviews internally if they use staff that are independent from the function being reviewed and, therefore, they argued that CDCs should be able to provide this service to each other. The commenters recognized that SBA would need to carefully monitor the contracts between CDCs and that CDCs would also need to carefully consider potential conflicts of interest. They argued that SBA would have the opportunity to evaluate the quality of these reviews when they are submitted with the CDC's Annual Report.

Based on these comments, SBA has decided to allow a CDC to contract with another CDC for independent loan review services without any geographic restriction subject to the following two conditions. First, to avoid any possibility of a quid-pro-quo, the CDCs may not review each other's portfolios or exchange any other services, nor may they enter into any other arrangement with each other that could appear to bias the outcome or integrity of the independent loan review. Second, due to the potential conflicts of interest that may arise, the contracts between CDCs for independent loan reviews must be pre-approved by the D/FA (or designee) in consultation with the D/OCRM (or designee).

SBA proposed the following changes to § 120.824 that would apply to all professional services contracts (including professional services contracts between CDCs):

(1) SBA's prior approval would be required for co-employment contracts that a CDC wants to enter into with a third party, such as a professional employer organization, to obtain employee benefits, such as retirement and health benefits, for the CDC's staff. These contracts must provide that the CDC retains the final authority to hire and fire the CDC's employees;

(2) Services for information technology and independent loan reviews would be added to the list of the types of contracts that CDCs may enter into without obtaining prior SBA approval (except, as discussed above, the proposed rule prohibited CDCs from contracting with another CDC for independent loan reviews);

(3) SBA proposed to make the following clarifying and technical changes to § 120.824:

(a) Under the current § 120.824(c) (to be redesignated in the final rule as § 120.824(c)(2)(ii)), the contracts must clearly identify terms and conditions satisfactory to SBA that permit the CDC to terminate the contract prior to its expiration date on a reasonable basis. To give CDCs procuring services maximum flexibility, SBA proposed to revise the standard under which the CDC procuring the services may terminate the contract to “with or without cause”;

(b) Under the current § 120.824(d), the CDC must provide copies of these contracts to SBA for review annually. SBA proposed to revise this provision (to be redesignated in the final rule as § 120.824(c)(4)) to clarify that the CDC procuring the services must provide a copy of all executed contracts to SBA as part of the CDC's Annual Report submitted under § 120.830(a) unless the CDC certifies that it has previously submitted an identical copy of the executed contract to SBA;

(c) Under the current § 120.824(e)(1), the CDC's Board must demonstrate to SBA that “the compensation under the [professional services] contract is only from the CDC”. For clarity, SBA proposed to revise this provision (to be redesignated in the final rule as § 120.824(c)(2)(i)) to state that “the compensation under the contract is paid only by the CDC”;

(d) Under the current § 120.824(e)(3), the CDC's Board must demonstrate that the contracts do not “evidence” any actual or apparent conflict of interest or self-dealing. For clarity, SBA proposed to revise this provision (to be redesignated as § 120.824(c)(2)(iii)) to require the Board to demonstrate that there is no actual or apparent conflict of interest or self-dealing in the negotiation, approval or implementation of the contract;

(e) Under the current § 120.824(f) (to be redesignated in the final rule as § 120.824(c)(3)), no contractor or Associate of a contractor may be a voting or non-voting member of the CDC's Board. The term “Associate” is generally defined in § 120.10 with respect to a lender, CDC or small business, but not with respect to a contractor of a CDC. SBA proposed to replace the phrase “Associate of a contractor” with text that is consistent with the definition of Associate in § 120.10: “Neither the contractor nor any officer, director, 20 percent or more equity owner, or key employee of a contractor may be a voting or non-voting member of the CDC's Board.”

SBA received no comments opposing these changes and is adopting the changes to § 120.824 as proposed except that, as discussed above in SBA's response to the comments on the geographic limits on contracts between CDCs, the D/FA (or designee), in consultation with the D/OCRM (or designee), must pre-approve contracts between CDCs for independent loan reviews.

In addition, SBA is reorganizing this section to make it simpler and clearer. Specifically, in the final rule, subsection (a) of 120.824 now addresses the management requirements that apply to CDCs and under what circumstances a CDC may request a waiver of the requirement that the CDC directly employ the CDC manager and obtain management services through a contract; subsection (b) now addresses the functions that the professional staff of the CDC must be capable of performing; subsection (c) now addresses the requirements that apply when a CDC obtains services through a professional services contract; and subsection (d) now addresses the additional requirements that apply to professional services contracts between CDCs. The reorganization of this section is not intended to make any substantive changes to the content of the rule other than as described above in this section C.

SBA proposed to increase the dollar threshold that triggers an annual audit of the CDC's financial statements under § 120.826 from $20 million to $30 million. Under the rule as proposed, for loan portfolio balances of less than $30 million, the CDC would be able to submit a financial statement that is reviewed by an independent certified public accountant in accordance with generally accepted accounting principles (GAAP) instead of an audited financial statement. There are currently 60 CDCs with a portfolio balance under $20 million and the increase to $30 million would add 19 CDCs to the number of CDCs that may submit reviewed financial statements, for a total of 79 CDCs that would save the difference in cost between an audited financial statement and a reviewed financial statement. SBA estimates the cost savings to be $15,000 annually for each CDC. As noted in the proposed rule, a CDC with a portfolio balance of less than $30 million may be required to provide audited financial statements at the discretion of the D/OCRM when the CDC is in material noncompliance with SBA's Loan Program Requirements (defined in § 120.10), such as with requirements related to financial solvency or business integrity.

SBA received 62 comments on the proposed changes to § 120.826, and all 62 comments supported the proposal but requested that SBA increase the amount that triggers the annual audit requirement to $50 million instead of $30 million. SBA considered these comments but, due to the inherent risks of a larger portfolio and due to the fact that SBA is already raising the amount that triggers the audit by 50 percent, SBA believes that it would not be prudent to raise the amount further. SBA is adopting the changes to § 120.826 as proposed.

SBA proposed to amend paragraph (c) of § 120.835 to offer the following alternative to establishing a Loan Committee in each State into which the CDC expands as a Multi-State CDC: If the CDC has established a Loan Committee in its State of incorporation, then when voting on a Project in the additional State, the CDC must include at least two individuals who live or work in that State on the CDC's Loan Committee. To make it clear that the two individuals added to the Loan Committee are permitted to vote only on the Projects located in the additional State into which the CDC expands and would not be eligible to participate in voting on Projects in the CDC's State of incorporation, SBA proposed to add the term “only” after “[c]onsist” in § 120.823(d)(4)(ii)(E). If the CDC has not established a Loan Committee in its State of incorporation, the alternative would allow two individuals who live or work in the additional State to be included on the CDC's Board of Directors when voting on a Project in that State. SBA also proposed to amend three other provisions to conform the rules to this amendment, including adding a reference about the alternative in § 120.823(d)(4)(ii)(E), removing the reference to § 120.839 in § 120.823(d)(4)(ii)(E), and using the phrase “live or work in the CDC's State of incorporation” instead of “live or work in the Area of Operations of the State where the 504 project they are voting on is located”.

SBA received a total of 57 comments on this proposed change. There were no opposing comments, though two commenters submitted differing points of view with respect to whether the two individuals added to the Loan Committee or Board should only be able to vote on Projects located in the additional State. One commenter requested that the two individuals be able to vote on all of the CDC's Projects, and the second commenter argued that the two members who represent the additional State on the CDC's Loan Committee or Board should be different persons than those serving on the Loan Committee or Board in the CDC's State of incorporation.

The latter commenter's suggestion is consistent with SBA's intent in providing this alternative option and is the reason why SBA proposed to revise § 120.823(d)(4)(ii)(E) to require that the Loan Committee consist only of members who live or work in the CDC's State of incorporation or in an area that would qualify as an LEA. The purpose behind this change was to give CDCs an alternative that would be less costly to creating a separate Loan Committee in the additional State, and not to expand the area from which a CDC could choose the members for its Board or Loan Committee in its State of incorporation.

Based on the comments, SBA believes that it can be made clearer that the two individuals who are added to either the Board or the Loan Committee under the alternative option may vote only on Projects in the additional State and, accordingly, SBA is adding the following sentence at the end of § 120.835(c)(2): “These two members may vote only on Projects located in the additional State.”

SBA is adopting the rule as proposed with this revision.

SBA proposed to expand paragraph (a) of § 120.839 to allow a CDC to apply to make a 504 loan outside its Area of Operations if the CDC has previously assisted either the business “or its affiliate(s).” SBA received a total of 57 comments in support of this change. One commenter requested that SBA allow a CDC to make loans outside its Area of Operations based on a Third Party Lender's prior lending relationship with a business. However, what is important to SBA is that the CDC have the prior lending relationship with the business or its affiliates and, thus, SBA will not expand the change to allow CDCs to make loans outside their Area of Operations based on the prior relationship of a Third Party Lender. SBA is adopting the changes to § 120.839 as proposed.

SBA proposed to revise paragraph (b) of this section to allow PCLP CDCs to maintain a balance in the LLRF equal to one percent of the current principal amount, instead of one percent of the original principal amount, of the PCLP Debenture after the loan is seasoned for 10 years. However, SBA proposed that a CDC may not use the declining balance methodology: (1) With respect to any PCLP Debenture that has been purchased, in which case the CDC must restore the balance maintained in the LLRF with respect to that Debenture to one percent of the original principal amount within 30 days after purchase; or (2) with respect to any other PCLP Debenture if SBA notifies the CDC in writing that it has failed to satisfy the requirements in paragraphs (e), (f), (h), (i) or (j) of § 120.847. In the latter case, the CDC would not be required to restore the balance maintained in the LLRF to one percent of the original principal amount of the Debenture but must base the amount maintained in the LLRF on one percent of the principal amount of the Debenture as of the date of notification. The CDC may not begin to use the declining balance methodology again until SBA notifies the CDC in writing that SBA has determined, in its discretion, that the CDC has corrected the noncompliance and has demonstrated its ability to comply with these requirements. In paragraph (g), SBA also proposed to change the official to whom withdrawal requests should be forwarded from the Lead SBA Office to the D/OCRM (or designee).

SBA received a total of 55 comments supporting the proposed changes to § 120.847. There were no opposing comments. SBA is adopting the changes to § 120.847 as proposed, except that, upon further consideration, SBA has decided to retain the Lead SBA Office as the office to which the PCLP CDC must forward requests for withdrawals.

The Office of Management and Budget (OMB) determined that this rule is not a “significant” regulatory action for the purposes of Executive Order 12866. In addition, this is not a major rule under the Congressional Review Act, 5 U.S.C. 800.

The Agency coordinated outreach efforts to engage stakeholders before proposing this rule. The 504 Loan Program operates through the Agency's lending partners, which for this program are CDCs. The Agency has participated in lender conferences and trade association meetings and received feedback from CDCs, a trade association, and third-party lenders that provided valuable insight to SBA.

This action meets applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have retroactive or preemptive effect.

This final rule is an E.O. 13771 deregulatory action with an annualized savings of $273,515 and a net present value of $3,907,360 in savings, both in 2016 dollars.

This rule is expected to produce $15,000 of savings for each of the 19 CDCs that currently have 504 loan portfolio balances between $20 million and $30 million and will no longer be required to provide audited financial statements. This estimate of savings is based on conversations with CDCs. In addition, SBA is decreasing the number of members that a CDC is required to appoint to its Board of Directors from nine to seven and reducing the amount that PCLP CDCs need to maintain in the Loan Loss Reserve Fund. While it is difficult to quantify the benefits of these changes, they are meant to provide more flexibility and options to CDCs.

Any costs to CDCs due to changes in this rule are difficult to quantify but are likely to be insignificant.

SBA has determined that this final rule will not have substantial, direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, for the purposes of Executive Order 13132, SBA has determined that this final rule has no federalism implications warranting preparation of a federalism assessment.

SBA has determined that, while this final rule will not impose new reporting or recordkeeping requirements, some of the regulatory amendments require changes to SBA Form 1253 to clarify existing requirements, such as the type of contracts that CDCs must report to SBA, and to remove certain reporting requirements that are no longer applicable as a result of the rule changes. Accordingly, SBA Form 1253, Certified Development Company (CDC) Annual Report Guide (OMB Approval 3245-0074), will be revised to clarify or add information that CDCs are required to submit with their Annual Report, including:

(a) With respect to the information required to be submitted in the Operating Report (Tab 2A) related to the members of the CDC's Board of Directors and the Loan Committee, in the event that a Multi-State CDC chooses the option created under the new § 120.835(c)(2), the form will be revised to inform CDCs to provide information on the two additional members who are appointed to the Board or to the Loan Committee, if established, to vote on Projects in the State into which the CDC expanded.

(b) With respect to the information that the CDC is required to provide in the Operating Report (Tab 2C) related to contracts requiring SBA's prior written approval, the form currently instructs the CDC to submit a copy of all contracts for management and/or staff in place during the reporting period. The form currently identifies examples of the types of contracts subject to this requirement. It will be revised to add co-employment contracts (which SBA proposed to add in the proposed rule) and contracts for independent loan reviews between CDCs (which SBA has added to this final rule in response to comments received) to the list. However, as stated in the proposed rule, SBA determined that, as currently written, the requirement to submit a copy of all contracts with the Annual Report could result in duplicative reporting since CDCs should have provided SBA with a fully executed copy of any contract after obtaining SBA's prior approval. As a result, SBA is revising the instruction in the form to make it clear that CDCs would no longer be required to submit a copy of these contracts with the Annual Report if a copy of the current and executed contract was previously submitted to SBA. The CDC will be required to provide a certification with its Annual Report that it has previously submitted a copy of the executed contract to SBA and that no changes have been made to it. The certification will also need to state to whom and on what date the contract was provided to SBA.

In addition, the form will be changed to no longer require the CDC to provide a copy of other documents that SBA already has in its possession, including SBA's approval of each contract or management waiver, a copy of the Board's resolution approving the contract, or a copy of the Board's explanation for why it believes that it is in the best interest of the CDC to enter into the contract.

(c) With respect to the information required to be submitted in the Operating Report (Tab 2F) related to the Independent Loan Review Package, as noted above, the final rule will allow a CDC to contract with another CDC to perform the independent loan review but only with SBA's prior written approval, and the form will be revised to reflect this change.

(d) With respect to the Financial Report (Tab 3) of the form, a CDC is currently allowed to submit a reviewed financial statement instead of an audited financial statement if it has a 504 loan portfolio balance of less than $20 million. This final rule raises this threshold to $30 million and, therefore, it will be necessary to revise the instruction in the form accordingly. The substance of the information that would be collected is not being changed, only that fewer CDCs would need to submit audited financial statements.

SBA invited comments on the proposed changes to the underlying regulations that would impact Form 1253. SBA received five comments on Form 1253. The commenters requested that CDCs only be required to include in the Annual Report information related to Board minutes, financial statements, tax returns, and jobs and other economic development activity. This change would eliminate several items from the Annual Report, including information related to the Board of Directors, Executive Committee, Loan Committee, professional staff, contracts, affiliations, legal certifications, and compensation. The commenters argued that, with the changes planned in SBA's electronic records system, SBA will have ready access to the information currently provided with the Annual Report. However, SBA has concluded that all of the information that will be submitted with this form continues to be needed to support SBA's efforts to maintain quality control in the 504 Loan Program.3

SBA has determined that the changes needed for the form described above are non-substantive in nature and do not need to be submitted to OMB for approval.

When an agency issues a final rulemaking, section 604 of the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires the agency to “prepare and make available for public comment a final regulatory flexibility analysis” which will “describe the impact of the final rule on small entities, significant issues raised by the public about the impact on small entities and the steps that the agency has taken to minimize the significant economic impact on small entities.” Section 605 of the RFA allows an agency to certify a rule in lieu of preparing an analysis, if the rule will not have a significant economic impact on a substantial number of small entities. Although the rulemaking will impact all 210 CDCs (all of which are small), SBA continues to believe the economic impact will not be significant. The final rule will streamline the operational and organizational requirements that CDCs must satisfy and reduce their costs.

For example, under the final rule, the 19 CDCs that currently have 504 loan portfolio balances between $20 million and $30 million will no longer be required to provide audited financial statements but may submit reviewed financial statements instead. As noted above, SBA estimates that the elimination of the audited review for these CDCs will save each CDC approximately $15,000 per year. This estimate is based on conversations with CDCs.

In addition, SBA is reducing the regulatory requirements imposed on CDCs related to corporate governance. For example, SBA is decreasing the number of members that a CDC is required to appoint to its Board of Directors from nine to seven. This change will also make it easier for a CDC to meet the quorum requirements for conducting its business. In addition, SBA is: (1) Expanding the area in which Board and Loan Committee members may work or live; (2) removing the limit on the number of members that may serve on the Board from the commercial lending fields; (3) allowing CDCs in need of assistance to contract for services with another CDC under certain circumstances even if the CDCs would become affiliated as a result; (4) eliminating the requirement that CDCs establish a separate Loan Committee in each State into which the CDC expands as a Multi-State CDC; (5) expanding the criteria under which a CDC may make a 504 loan outside its Area of Operations; and (6) allowing a CDC to contract with another CDC to perform the required independent loan reviews under certain circumstances and with SBA's prior written approval.

Another change is the reduction in the amount that PCLP CDCs need to maintain in the Loan Loss Reserve Fund. By allowing PCLP CDCs to utilize a declining balance methodology for the LLRF after a Debenture has been outstanding for 10 years, more cash will be available to support the CDC's operations or to invest in other economic development activities without unduly increasing risk.

In addition, SBA received one comment opposing the certification of the proposed rule because of the proposal to prohibit any person or entity from owning or controlling more than 10 percent of a for-profit CDC's voting stock. As discussed above, this final rule provides that an individual or entity will be limited to owning no more than 25 percent of a CDC's stock. With this change, no individual or entity will be required to divest any stock because no stockholder of any for-profit CDC currently owns more than 25 percent of the CDC's stock and, thus, SBA concludes that the 25 percent limit will not have a significant economic impact on any small entities. Similarly, this final rule applies the 25 percent limit to membership interests in a non-profit CDC. Applying the 25 percent limit to non-profit CDCs would not have a significant economic impact on any small entity because a membership interest in a CDC has no economic value to the member. A membership interest in a non-profit CDC does not entitle the member to receive any distribution of income or assets from the CDC.

Except for the change in the audit requirements discussed above, the total costs to CDCs due to the other changes in this rule are difficult to quantify. However, based on the nature of the changes, SBA believes that CDCs are likely to experience cost reductions if there is any cost impact at all. SBA believes that this final rule is the Agency's best available means for facilitating American job preservation and creation by removing unnecessary regulatory requirements. The preamble sections above provide additional detailed explanations regarding how and why this final rule will reduce regulatory burdens and responsibly increase program participation flexibility and discusses the high level of public support for these changes.

For these reasons, SBA has determined that the final rule will not have a significant economic impact on a substantial number of small entities and certifies this rule as such.

For the reasons stated in the preamble, SBA is amending 13 CFR part 120 as follows:

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, State laws and regulations that govern surface coal mining and reclamation operations in accordance with the Act and consistent with the Federal regulations. See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior approved the Alaska program effective on May 2, 1983. You can find background information on the Alaska program, including the Secretary's findings, the disposition of comments, and conditions of approval of the Alaska program in the March 23, 1983, Federal Register (48 FR 12274). You can also find later actions concerning Alaska's program and program amendments at 30 CFR 902.10, 902.15, and 902.16.

By letter dated September 8, 2011 (Document ID No. OSM-2011-0017-0002), Alaska sent us an amendment to its program under SMCRA (30 U.S.C. 1201 et seq.). Alaska sent the amendment to include changes made at its own initiative and in response to the required program amendment at 30 CFR 902.16(a)(14), requiring consistency with the provisions of 30 CFR 816.116(b)(3)(i), concerning postmining land use. The amendment package submitted by Alaska primarily concerns editorial revisions to AK-006-FOR, an amendment OSMRE approved after Alaska's submission on May 11, 2004, and revised on April 1, 2005. OSMRE approved the revised rules in the Federal Register on November 29, 2005 (70 FR 71383) (Document Identification Number (Docket ID No.) OSM-2011-0017-0013).

Alaska explained that the September 8, 2011, proposed revisions were made at the request of the Alaska Department of Law, to conform to the State of Alaska “Drafting Manual for Administrative Regulations” (17th Edition, August 2007). The provisions of the program that Alaska submitted for amendment on September 8, 2011, are: 11 Alaska Administrative Code (AAC) 90.043(b), water quality analyses; 11 AAC 90.045(a), (b), (c), and (d), description of geology; 11 AAC 90.057(a) and (b), fish and wildlife information; 11 AAC 90.057(c) and 11 AAC 90.423(h), fish and wildlife information; 11 AAC 90.085(a), (a)(5) and (e), plans for protection of the hydrologic balance; 11 AAC 90.089(a)(1), construction plans for ponds, impoundments, dams, and embankments; 11 AAC 90.101(a) through (f), subsidence control plans and the definition of material damage; 11 AAC 90.173(b)(2), eligibility for assistance under the small operator assistance program; 11 AAC 90.179(a)(3), (a)(4) and (a)(5), data collection that would be covered by the small operator assistance program; 11 AAC 90.185(a) and (a)(4), applicant liability under the small operator assistance program; 11 AAC 90.201(d), requirements pertaining to incremental reclamation bonds; 11 AAC 90.211(a), bond release procedures and criteria; 11 AAC 90.321(d), (e), (f), (f)(1) and (f)(2), replacement of water supplies affected by underground mining activities; 11 AAC 90.323(a) and (c), water quality standards; 11 AAC 90.323(b), sediment control measures; 11 AAC 90.325(b) and (c) and 11 AAC 90.327(b)(2), stream channel diversions; 11 AAC 90.331(d)(1), sedimentation ponds; 11 AAC 90.331(e), removal of siltation structures; 11 AAC 90.331(h)(1) and (2), design of other treatment facilities; 11 AAC 90.336(a), (b)(1) and (2), (f), and (g), impoundment design and construction; 11 AAC 90.337(a), impoundment inspection; 11 AAC 90.345(e), requirements for surface water monitoring; 11 AAC 90.349, discharges of water or coal mine waste into an underground mine working; 11 AAC 90.375(f) and (g), public notice of blasting; 11 AAC 90.391(n) and (t), disposal of excess spoil or coal mine waste; 11 AAC 90.395(a), general requirements for coal mine waste; 11 AAC 90.397(a), inspections of disposal areas for excess spoil, underground development waste or coal processing waste; 11 AAC 90.401(a)(1), (b), (d), (e), and (f), construction plans for coal mine waste refuse piles; 11 AAC 90.407(c)(1) and (2) and (f), coal mine waste dams or embankments; 11 AAC 90.443(a)(2), (k)(2), (l)(2), and (m)(2), requirements for backfilling and grading; 11 AAC 90.444(a) and (b), requirements for backfilling and grading where there is thick or thin overburden; 11 AAC 90.447(c)(1), requirements for auger mining; 11 AAC 90.461, repeal of provisions which provided for rebuttable presumption of causation by subsidence; 11 AAC 90.461(b) and (b)(1) through (3), (g) and (g)(1) through (5), (h) and (h)(1) through (3), (i) and (i)(1) through (3), (j), (k), and (l)(1) through (3), subsidence control; 11 AAC 90.491(f)(1), (f)(2)(E), (f)(2)(E)(iii), (f)(3), and (f)(4), requirements for construction and maintenance of roads; 11 AAC 90.601(h), (i) and (j), definition of and inspections of abandoned sites; 11 AAC 90.629(a), procedures for assessment conference; 11 AAC 90.631(a), requests for a hearing on the fact of a violation or civil penalty; 11 AAC 90.635(a) and (b), when an individual civil penalty may be assessed; 11 AAC 90.637(a) and (b), amounts of individual civil penalty; 11 AAC 90.639(a), (b), and (c), procedures for assessment of an individual civil penalty; 11 AAC 90.641(a), (b), (c), and (d), payments of an individual civil penalty; 11 AAC 90.652 through 11 AAC 90.669, requirements for incidental mining of coal; 11 AAC 90.701(a), (b), and (c), filing of a petition to designate lands as unsuitable for surface coal mining operations; 11 AAC 90.901(a), applicability of Alaska's rules to all coal exploration and surface coal mining and reclamation operations; 11 AAC 90.911(125), definition of “community or institutional building;” 11 AAC 90.911(126), definition of “cumulative impact area;” 11 AAC 90.911(128), definition of “other minerals;” 11 AAC 90.911(129), definition of “other treatment facility;” 11 AAC 90.911(130), definition of “precipitation event;” 11 AAC 90.911(133), definition of “registered professional engineer;” 11 AAC 90.911(134), definition of “registered professional land surveyor;” and 11 AAC 90.911(135), definition of “siltation structure.”

In the September 8, 2011, submission, Alaska also submitted substantive revisions of 11 AAC 90.457(c)(3), concerning standards for revegetation success in areas intended for fish and wildlife habitat. Alaska submitted these revisions in response to OSMRE's required program amendment codified at 30 CFR 902.16(a)(14).

We announced receipt of the proposed amendment in the November 2, 2011, Federal Register (76 FR 67635). In the same document, we opened the public comment period and provided an opportunity for a public hearing or meeting on the amendment's adequacy (Document ID No. OSM-2011-0017-0001). We did not hold a public hearing or meeting because no one requested one. The public comment period ended on December 2, 2011. We received comments from two Federal agencies and one State agency.

During our review of the amendment, we initially identified: (1) Minor editorial concerns in three rules about subsidence control plans, data requirements for the probable hydrologic consequences in a small operator assistance program, and replacement of lost, contaminated, diminished, or interrupted water supplies; (2) the need for Alaska to include standards for revegetation success in a guideline (rather than as promulgated rules in the Alaska program); and (3) deficiencies in two rules about assessment of civil penalties.

We notified Alaska of these concerns by letter dated January 23, 2012 (Document ID No. OSM-2011-0017-0009).

Alaska responded with a letter dated February 9, 2012, requesting an extension of time to respond to our concerns (Document ID No. OSM-2011-0017-0010). We approved the extension of time by letter dated February 13, 2012 (Document ID No. OSM-2011-0017-0011).

Alaska responded to OSMRE by sending us a revised amendment (Document ID No. OSM-2011-0017-0012), on March 6, 2012. In response to our concerns, Alaska proposed non-substantive minor editorial revisions of 11 AAC 90.101(e), concerning a subsidence control plan, and 11 AAC 90.321(e), concerning replacement of water supplies. In addition, Alaska withdrew from its proposed amendment the proposed revisions of 11 AAC 90.637(a)(1) through (4) and 11 AAC 90.637(b), concerning civil penalties. Alaska then committed to include these proposed rule revisions as part of another forthcoming program amendment proposal concerning its ownership and control rules. That amendment proposal will be submitted in response to changes in the Federal program, which necessitated changes to the Alaska program to ensure that the State continues to meet the minimum requirements established under SMCRA and its implementing regulations. OSMRE informed Alaska of these required changes by an October 2, 2009, letter sent under the authority of 30 CFR 732.17. The State resubmitted proposed revisions to 11 AAC 90.637(a)(1) through (4) and 11 AAC 90.637(b) for OSMRE's informal review on December 4, 2014. That amendment proposal is currently undergoing OSMRE's informal review process under SATS No. AK-008-INF.

Finally, Alaska also committed to: (1) Develop a general guideline for revegetation success standards and sampling techniques for mined lands in Alaska and a list of husbandry practices used in Alaska for forestry and agricultural purposes and (2) pursue legislation for an Alaska statutory revision of Alaska Statute 27.21.220, in which Alaska will add a new provision concerning prompt replacement of water supplies affected by underground mining operations.

We did not reopen the public comment period for the March 6, 2012, proposed revisions because Alaska did not propose new substantive changes. Instead, the State: (1) Withdrew proposed rules concerning civil penalties; (2) committed to separately develop a general guideline concerning revegetation success standards and sampling techniques as well as a list of normal husbandry practices; (3) committed to submit a statutory revision concerning replacement of water supplies; and (4) proposed only non-substantive, minor, editorial revisions of rules that did not alter their meaning or Alaska's intent.

In 2017, we conducted a second review of Alaska's proposed amendment and identified additional concerns pertaining to subsidence control plan requirements for planned subsidence scenarios and two instances where the State proposed to shorten timeframes for requesting administrative review of an agency decision on incidental mining exceptions from 30 days to 20 days. We verbally discussed these concerns with the State on February 21, 2018. The State indicated that it preferred to address all remaining concerns with this amendment after publication of the final rule. For that reason, we are publishing this final rule approving the amendments with a total of four specific exceptions and six additional required amendments, as described below.

Following are the findings we made concerning the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We are approving the amendment with exceptions and additional requirements as described below.

Alaska proposed minor wording, editorial, punctuation, grammatical, and recodification changes to the following previously approved rules. In some cases, the provisions are the same or similar to the corresponding Federal provisions. In other cases, the provisions may differ from, but are no less effective than, the corresponding Federal provisions.

The minor wording, editorial, punctuation, grammatical, and recodification changes being addressed in this finding are non-substantive, editorial revisions made upon promulgation of rules previously approved by OSMRE as no less effective than the corresponding Federal provisions. The following list provides the applicable portion of the Alaska Administrative Code followed by the corresponding Federal regulation (including the surface and underground mining provisions where applicable):

• 11 AAC 90.085(a), 30 CFR 780.21(f)(1) and 784.14(e)(1), determination of the probable hydrologic consequences;

• 11 AAC 90.201(d), 30 CFR 800.11(b)(1) through (4), incremental bonding;

• 11 AAC 90.211(a), 30 CFR 800.40(a)(1) and (3), bond release procedures and criteria;

• 11 AAC 90.331(h)(1), 30 CFR 30 CFR 816.46(d)(1) and (2), water treatment facility design;

• 11 AAC 90.375(f) and (g), 30 CFR 816.64(a)(1) and (b), distribution and public notice of blasting schedules;

• 11 AAC 90.395(a), 30 CFR 816.81(a) and 817.81(a), coal mine waste, general requirements;

• 11 AAC 90.401(a)(1), (d) and (e), 30 CFR 816.83 and 817.83, coal mine waste refuse piles;

• 11 AAC 90.407(f), 30 CFR 816.84(f), coal mine waste dams and embankments;

• 11 AAC 90.443(a)(2), (k)(2), (l)(2), and (m)(2), 30 CFR 816.102(a)(2), (d)(2) and (3) and (k)(1) and (2), backfilling and grading;

• 11 AAC 90.461(b) and (b)(1) through (3), 30 CFR 817.121(a)(1) and (a)(2), prevention or minimization of subsidence damage or planned subsidence;

• 11 AAC 90.461(h) and (h)(1) through (3), 30 CFR 817.121(c)(5), performance bond for subsidence repair;

• 11 AAC 90.461(i)(1) through (3), 30 CFR 817.121(c)(5), no performance bond for subsidence repair needed for repairs made within 90 days;

• 11 AAC 90.461(j), 30 CFR 817.121(c)(4)(v), use of available information for subsidence determination;

• 11 AAC 90.491(f)(1), 30 CFR 816.151(a) and 817.151(a), construction of roads, certification of plans and drawings;

• 11 AAC 90.491(f)(3) and (f)(4), 30 CFR 816.151 (d)(5) and (6) and 817.151(d)(5) and (6), approval for relocation of stream channels, and structures for crossing intermittent or perennial streams;

• 11 AAC 90.629(a), 30 CFR 845.18(a), concerning procedures for assessment conference;

• 11 AAC 90.631(a), 30 CFR 845.19(a) and 846.17(b)(1), concerning requests for a hearing on the fact of a violation or civil penalty;

• 11 AAC 90.635(b), 30 CFR 846.12(b), when an individual civil penalty may be assessed;

• 11 AAC 90.639(a), (b) and (c), 30 CFR 846.17(a) through (c), procedure for assessment of individual civil penalty;

• 11 AAC 90.701(b) and (b)(1) through (b)(5), 30 CFR 764.13(c)(1) and (c)(2), content requirements for petitions to terminate designation of lands as unsuitable for surface coal mining operations;

• 11 AAC 90.701(c) and (c)(1) through (c)(3), 30 CFR 764.13(c)(1), content requirements for petitions to terminate designation of lands unsuitable for surface coal mining operations;

• 11 AAC 90.901(a)(1), (2) and (3), 30 CFR 700.11(a)(1),(2), and (4), applicability of regulations;

• 11 AAC 90.911(125), 30 CFR 761.5, definition for “community or institutional building;”

• 11 AAC 90.911(135), 30 CFR 701.5, definition for “siltation structure;”

• 11 AAC 90.911, 30 CFR 795.3 and 795.10, deletion of definition for “qualified laboratory,” and 11 AAC 90.181, insertion of definition for “qualified laboratory”;

• 11 AAC 90.911, 30 CFR 816.104(a) and 816.105(a), deletion of definitions for “thick overburden” and “thin overburden,” and 11 AAC 90.444, insertion of definitions for “thick overburden” and “thin overburden”; and

• 11 AAC 90.911, 30 CFR 701.5, deletion of definitions for “drinking, domestic, or residential water supply,” “material damage,” “non-commercial building,” “occupied residential dwelling and structures related thereto,” and “replacement of water supply,” and 11 AAC 90.461, insertion of definitions of “drinking, domestic, or residential water supply,” “material damage,” “non-commercial building,” “occupied residential dwelling and structures related thereto,” and “replacement of water supply”.

Because these changes to the Alaska program are minor and primarily editorial in nature, we find that they are no less effective than the corresponding Federal regulations, and we approve them.

Alaska proposed revisions to the following rules containing language that is the same as or similar to the corresponding sections of the Federal regulations. The following list provides the applicable portion of the Alaska Administrative Code followed by the corresponding Federal regulation (including the surface and underground mining provisions where applicable):

• 11 AAC 90.043(b), 30 CFR 780.21(a), hydrology and geology;

• 11 AAC 90.045(a) through (d), 30 CFR 780.22(b) through (d), geology description;

• 11 AAC 90.057(a) and (b), 30 CFR 780.16(a)(1), fish and wildlife information;

• 11 AAC 90.057(c) and deletion of duplicative provision at 11 AAC 90.423(h), 30 CFR 780.16(c), fish and wildlife information;

• 11 AAC 90.085(a)(5), 30 CFR 30 CFR 784.14(e)(3)(iv), plan for protection of the hydrologic balance;

• 11 AAC 90.085(e), 30 CFR 784.14(f)(1), probable hydrologic consequences and cumulative hydrologic impacts;

• 11 AAC 90.089(a)(1), 30 CFR 780.25(a)(1)(i) and 784.16(a)(1)(i), certification by a qualified, registered professional engineer (PE) or other qualified professional of plans for siltation structures, impoundments, coal mine waste dams, or embankments;

• 11 AAC 90.101(a) through (f), 30 CFR 701.5, 784.20(a) and (b), subsidence control plan;

• 11 AAC 90.179(a)(3), (a)(4) and (a)(5), 30 CFR 795.9(a) and (b)(1) through (6), small operator assistance program and probable hydrologic consequences data requirements;

• 11 AAC 90.185(a) and (a)(4), 30 CFR 795.12(a)(2), small operator assistance program, applicant liability;

• 11 AAC 90.321(f), (f)(1) and (f)(2), 30 CFR 701.5, definition of “replacement of water supply;”

• 11 AAC 90.325(b) and (c), 30 CFR 816.43(c)(3) and 817.43(c)(3), diversions and conveyance of flow;

• 11 AAC 90.327(b)(2), 30 CFR 816.43(b)(2) and (3), stream channel diversions, precipitation (design) events;

• 11 AAC 90.331(d)(1), 30 CFR 816.46(c)(1)(iii)(C), sedimentation pond design capacity;

• 11 AAC 90.336(a), 30 CFR 780.25(a)(1)(i) and 816.49(a)(3), impoundment design and construction;

• 11 AAC 90.336(b)(1) and (2), 30 CFR 816.49(a)(9)(ii)(B) and (C), impoundment spillway design;

• 11 AAC 90.336(f) and (g), 30 CFR 816.49(a)(1), impoundment design;

• 11 AAC 90.337(a), 30 CFR 816.49(a)(11), impoundment inspection;

• 11 AAC 90.345(e), 30 CFR 780.21(j)(1), 784.14(i)(2)(i), surface- and ground-water monitoring plans;

• 11 AAC 90.349, 30 CFR 816.41(i) and 30 CFR 817.41(h), discharge of water or coal mine waste into an underground mine;

• 11 AAC 90.391(n) and (t), 30 CFR 816.72(a) and 817.72(a), drainage control on valley fills;

• 11 AAC 90.391(t), 816.83(c)(2) and 817.83(c)(2), refuse pile configuration;

• 11 AAC 90.397(a), 816.71(h), 30 CFR 816.83(d), 817.71(h), and 817.83(d), coal mine waste disposal area inspections;

• 11 AAC 90.401(b) and (f), 30 CFR 816.81 and 816.83, coal mine waste refuse piles;

• 11 AAC 90.407(c)(1) and (2), 30 CFR 816.84(d) and 817.84(d), coal mine waste dams and embankments;

• 11 AAC 90.423(h), 30 CFR 780.16(c), protection of fish and wildlife;

• 11 AAC 90.444(a) and (b), 30 CFR 816.104(a) and 816.105(a), backfilling and grading, thick and thin overburden;

• 11 AAC 90.447(c)(1), 30 CFR 819.15(b)(1), requirements for auger mining;

• 11 AAC 90.461, 30 CFR 817.121(c)(4), repeal of provisions providing for rebuttable presumption of causation by subsidence;

• 11 AAAC 90.461(g) and (g)(1) through (5), 30 CFR 817.121(g), detailed plan of underground workings;

• 11 AAC 90.461(k), 30 CFR 817.121(c)(5), bond calculation for replacement of water supply;

• 11 AAC 90.461(l)(1)(A) through (C), 30 CFR 701.5, definition of “material damage;”

• 11 AAC 90.461(l)(2), 30 CFR 30 CFR 701.5, definition of “non-commercial building;”

• 11 AAC 90.461(l)(3)(A) and (B), 30 CFR 701.5, definition of “occupied residential dwelling and related structures;”

• 11 AAC 90.491(f)(2)(E) and (f)(2)(E)(iii), 30 CFR 816.151(d)(2) and 817.151(d)(2), construction and maintenance of roads, transportation and support facilities, and utility installations;

• 11 AAC 90.601(h), (i) and (j), 30 CFR 840.11(g), and (h), definition and inspection of abandoned sites;

• 11 AAC 90.635(b), 30 CFR 846.12(b), assessment of individual civil penalties;

• 11 AAC 90.701(a) and (a)(1) through (a)(6), 30 CFR 764.13(a) and (b), content requirements for petitions to designate lands unsuitable for surface coal mining operations;

• 11 AAC 90.911(126), 30 CFR 701.5 and 740.5(a), definition of “cumulative impact area;”

• 11 AAC 90.911(128), 30 CFR 702.5, definition of “other minerals;”

• 11 AAC 90.911(129), 30 CFR 701.5, definition of “other treatment facility;” and

• 11 AAC 90.911(130), 30 CFR 701.5, definition of “precipitation event.”

Because these proposed rules contain language that is identical to or is substantially similar to the corresponding Federal regulations, we find that Alaska's proposed amendments are no less effective than the corresponding Federal regulations, and approve them with one additional requirement about subsidence control plans. As proposed, 11 AAC 90.101(e) omits counterpart language to 30 CFR 784.20(b)(7). This provision pertains to subsidence control plan requirements related to minimizing damage to non-commercial buildings and occupied residential dwellings in planned subsidence scenarios. OSMRE conditionally approves the current revisions to 11 AAC 90.101(e), with the addition of a new required amendment at 30 CFR 902.16 requiring Alaska to add the omitted provision.

Alaska proposed language at 11 AAC 90.173(b)(2), which requires all coal produced by a parent company and all of its subsidiaries to be attributed to the applicant of a SOAP grant. This is no less effective than the counterpart Federal regulation at 30 CFR 795.6(a)(2)(i) and (ii). The Federal regulation requires production to be attributed to the SOAP applicant when a proportional ratio of coal produced by operations that the applicant owns more than 10 percent, the proportional share of other operations owned by persons who own more than 10 percent of the applicant's operation, and operations owned by persons who directly or indirectly control the applicant by reason of direction of the management, and operations owned by members of the applicant's family and the applicant's relatives unless it is established that there is no direct or indirect business relationship. Alaska has proposed deletion of rules previously approved by OSMRE that were substantively identical to the Federal provisions of 30 CFR 795.6(a)(2)(i) and (ii). Alaska's rule now determines eligibility based on all coal produced under a parent company rather than proportional amounts of coal produced under proportional ownership. Under the proposed Alaska regulations, more coal would be attributed to the small operator acting under a parent company, which owns or controls other coal mines, thereby reducing the number of applicants who would qualify for SOAP assistance. The proposed Alaska rule is also consistent with the overriding statute at AS 27.21.120.

30 CFR 795.6(b) allows States to adopt alternate criteria or procedures for determining eligibility for SOAP, provided that those criteria will not provide a basis for more grant requests than would be authorized under Federal requirements.

Alaska stated in its Statement of Basis and Purpose, submitted with the proposed amendment, that the adoption of the new language results in the Alaska rule being more stringent than the corresponding Federal regulation by limiting the number of eligible applicants.

OSMRE agrees and finds no evidence that the proposed Alaska provision would provide a basis for more grant requests than would be authorized under Federal requirements. Therefore, OSMRE finds that Alaska's proposed 11 AAC 90.173(b)(2), concerning the eligibility of a SOAP applicant, is no less effective than the counterpart Federal regulations at 30 CFR 795.6(a)(2)(i) and (ii) and 30 CFR 795.6(b), and approves it.

Alaska proposed to revise 11 AAC 90.321(d), concerning the requirement to conduct surface coal mining operations to prevent or minimize water pollution. Alaska proposed to remove the discretion of the Alaska Commissioner to discontinue operation of necessary water treatment facilities. In other words, Alaska's proposed rule would now require the operation of necessary water treatment facilities for as long as treatment is required under the program.

The requirement for treatment to satisfy water quality standards is inherent throughout the Federal program and more specifically required in the Federal regulations at 30 CFR 816.41(a) and 816.42. Those regulations require operations to be conducted to minimize disturbance of the hydrologic balance and all discharges to be made in compliance with all applicable State and Federal water quality laws and regulations. Therefore, OSMRE finds that Alaska's proposed deletion of the Alaska Commissioner's discretionary authority serves to ensure that the requirement 11 AAC 90.321(d) is no less effective in protecting the hydrologic balance than the counterpart Federal regulations at 30 CFR 816.41(a) and 816.42, and approves it.

Alaska proposed to revise 11 AAC 90.321(e)(1) and (2), concerning the replacement of a water supply of an owner of interest in real property, who obtains all or part of the owner's supply of water for domestic, agricultural, industrial, or other legitimate use from an underground or surface source. Alaska proposed the revision to ensure that the rule applies if the water supply had been contaminated, diminished, or interrupted by surface or underground mining activities conducted after October 24, 1992, and if the affected water supply was in existence before the date the Alaska Commissioner received the permit application for the activities affecting and requiring replacement of the water supply. These changes are intended to satisfy certain requirements of the Energy Policy Act, which was passed on October 24, 1992, and codified as section 720 of SMCRA, 30 U.S.C. 1309a, as well as additional requirements within OSMRE's regulations. The counterpart Federal regulation at 30 CFR 817.41(j) requires the replacement of certain drinking, domestic or residential water supplies that are contaminated, diminished, or interrupted by underground mining activities. The Federal regulation at 30 CFR 701.5 defines “drinking, domestic or residential water supply” as water received from a well or spring and any appurtenant delivery system that provides water for direct human consumption or house hold use. Excluded from this definition are wells and springs that serve only agricultural, commercial, or industrial enterprises, unless the water supply is for direct human consumption or human sanitation, or domestic use.

By revising 11 AAC 90.321(e) to apply to not only underground mining activities, but also to surface mining activities, the counterpart Federal regulation for surface mining also applies. This counterpart Federal regulation at 30 CFR 816.41(h) requires the replacement of certain water supplies for domestic, agricultural, industrial, or other legitimate use that are contaminated, diminished, or interrupted by surface mining activities. By revising 11 AAC 90.321(e) to apply to certain water supplies for domestic, agricultural, industrial, or other legitimate use, rather than certain drinking, domestic, or residential water supplies, Alaska has expanded the scope of the rule to protect more types of water supplies than protected under the counterpart Federal regulation at 30 CFR 817.41(j), if the water supply was contaminated, diminished, or interrupted by underground mining activities. Therefore, proposed 11 AAC 90.321(e) is more stringent than the counterpart Federal regulations at 30 CFR 817.41(j) and 816.41(h), as to the type of water supply to be protected. Therefore, in this context, OSMRE finds that the Alaska regulations is no less effective than the applicable Federal counterpart.

In addition, proposed 11 AAC 90.321(e) is no less effective than 30 CFR 817.41(j) and 816.41(h) in requiring replacement of water supplies affected by underground and surface mining activities conducted after October 24, 1992, as required by 30 U.S.C. 1309a.

However, proposed 11 AAC 90.321(e) is less effective than 30 CFR 816.41(h), with respect to protecting water supplies affected by surface mining activities to the extent that it does not protect those water supplies affected by surface mining activities conducted on or before October 24, 1992.

With the exception that proposed 11 AAC 90.321(e) does not protect those water supplies affected by surface mining activities conducted on or before October 24, 1992, OSMRE finds that 11 AAC 90.321(e) is no less effective than 30 CFR 817.41(j) and 816.41(h). However, with respect to protecting water supplies affected by surface mining activities on or before October 24, 1992, OSMRE does not approve the phrase “conducted after October 24, 1992” proposed for addition under 11 AAC 90.321(e)(1) as it relates to surface coal mining activities. 11 AAC 90.321(e) therefore requires further revision to ensure protection of water supplies affected by surface coal mining activities on or before October 24, 1992. To address this issue, OSMRE approves the current revisions, with this one exception and the addition of a required amendment at 30 CFR 902.16, that, in accordance with 30 CFR 816.41(h), Alaska must further revise 11 AAC 90.321(e) to ensure protection of water supplies affected by surface coal mining activities conducted on or before October 24, 1992.

In addition, following passage of the Energy Policy Act of 1992, OSMRE issued a Notice of Decision that required Alaska, among other states, to implement its requirements codified in section 720 of SMCRA (30 U.S.C. 1309a) (60 FR 38482, 38483, July 27, 1995). Alaska indicated it would amend its statute at AS 27.21.220 to add subsection (c) requiring prompt repair or compensation for material damage resulting from subsidence, and prompt replacement of water supplies affected by underground mining operations. In Alaska's March 6, 2012, response to OSMRE's January 23, 2012, concern letter, Alaska committed to amending its statute concerning replacement of water supplies during the 2012 legislative session. But Alaska's response was silent with respect to the requirement that Alaska revise its statute to require prompt repair or compensation for material damage resulting from subsidence. Alaska did not revise its statute during the 2012 legislative session. Because this statutory authority is necessary to implement the required changes to 11 AAC 90.321(e), OSMRE is conditioning approval of that part upon Alaska's submission of a state program amendment to AS 27.21.220. Therefore, OSMRE is adding another required amendment at 30 CFR 902.16, that requires, in accordance with the Energy Policy Act enacted on October 24, 1992, Alaska to submit, no later than the end of the 2019 legislative session, a statutory revision requiring prompt repair or compensation for material damage resulting from subsidence, and prompt replacement of water supplies affected by underground mining operations.

Alaska, at 11 AAC 90.323(a), proposed revisions to require that all discharges of water from areas disturbed by surface and underground mining activities must be made in compliance with all applicable federal water quality laws and regulations, with all applicable provisions of AS 46.03 and regulations in effect under that chapter, and with the effluent limitations for coal mining promulgated by the United States Environmental Protection Agency (EPA) set out in 40 CFR part 434, adopted by reference in 11 AAC 90.001(b). In doing so, Alaska proposed deletion from 11 AAC 90.323(a) of the requirement that, with certain exceptions, such discharges must pass through one or more siltation structures before leaving the permit area.

The Federal regulations at 30 CFR 816.42 require that discharges of water from areas disturbed by surface mining activities must be made in compliance with all applicable State and Federal water quality laws and regulations and with the effluent limitations for coal mining promulgated by the EPA set forth in 40 CFR part 434.

Effective December 22, 1986, OSMRE suspended the Federal counterpart language at 30 CFR 816.46(b)(2) requiring that all discharges pass through a siltation structure. See Finding No. 16 at 51 FR 41957 (Nov. 20, 1986). OSMRE suspended this requirement in response to a remand by the court in In Re: Permanent Surface Mining Regulation Litigation, No. 79-1144 (D.D.C. 1985). The remaining Federal rules governing water quality for discharges from disturbed areas are those found at 30 CFR 816.42, 816.45, and 816.46(b)(1). In relevant part, those regulations require that sediment be controlled using the best technology currently available (BTCA).

OSMRE no longer defines BTCA as being siltation structures as we previously did in the now-suspended 30 CFR 816.46(b)(2). Instead, OSMRE concludes that the regulatory authority must determine on a case-by-case basis what constitutes BTCA consistent with the definition of the term found at 30 CFR 701.5. Although OSMRE anticipates that sedimentation ponds or some other siltation structure will most likely be the BTCA; a specific determination should be made by the regulatory authority. Therefore, OSMRE approves Alaska's proposed deletion of this language from 11 AAC 90.323(a) with the understanding that the case-by-case analysis of BTCA is performed by Alaska.

Alaska's proposed 11 AAC 90.323(a) contains requirements that are the same as or similar to the counterpart Federal regulation at 30 CFR 816.42, concerning protection of the hydrologic balance.

Alaska proposed to revise 11 AAC 90.323(b), concerning the allowance for other sediment control measures after disturbed areas have been regraded, topsoil replaced, and stabilized against erosion, if the Alaska Commissioner and the EPA have approved the use of best management practices as the effluent limitation. Alaska proposed to replace “EPA” with the State agency now delegated EPA's authority, the Alaska Department of Environmental Conservation. This proposed rule revision clarifies the Alaska program without changing the meaning or intent of the rule. The proposed rule is otherwise consistent with the Federal counterpart regulation at 30 CFR 816.45 concerning the use of appropriate sediment control measures.

Alaska proposed to delete from its program the requirement, at 11 AAC 90.323(c), that the operator must meet all applicable Federal and State water quality laws and regulations for the mixed drainage from the permit area when there is mixing of drainage from disturbed, reclaimed, and undisturbed areas. This requirement is redundant of the requirements proposed at paragraph 11 AAC 90.323(a) and discussed above. Therefore, based on the discussion above, OSMRE finds that Alaska's proposed 11 AAC 90.923(a) and (b), with the proposed deletion of 11 AAC 90.923(c), are no less effective than the counterpart Federal regulations at 30 CFR 816.42, 816.45 and 816.46. Therefore, we approve these portions of the Alaska program amendment.

Alaska proposed editorial revisions at 11 AAC 90.331(e), concerning maintenance, removal and retention of siltation structures, added specificity or clarified grammar without changing the meaning of the rule. In addition, Alaska proposed to reference the requirements of 11 AAC 90.321(a) through (d) and 11 AAC 90.323, rather than 11 AAC 90.323(b), for the Alaska Commissioner's authority to authorize removal of siltation structures.

With one exception, Alaska's proposed rule is the same as or substantially similar to the counterpart Federal regulation at 30 CFR 816.46(b)(5), which requires siltation structures to be maintained until removal is authorized by the regulatory authority and the disturbed area has been stabilized and revegetated and that, in no case, will the structure be removed sooner than two years after the last augmented seeding.

The exception is that Alaska's proposed rule references the requirements of 11 AAC 90.321(a) through (d) and 11 AAC 90.323 for the Alaska Commissioner's authority to authorize removal of siltation structures, while the counterpart Federal regulation states only that removal must be authorized by the regulatory authority. Alaska's referenced rules at 11 AAC 90.321(a) through (d) and 11 AAC 90.323 pertain to, respectively, requirements for protection of the hydrologic balance and the requirement that discharges of water from areas disturbed by surface and underground mining activities must be made in compliance with all applicable Federal and State water quality statues and regulations. Alaska's proposed reference to these rules provides specificity and clarification. Therefore, based on the above discussion, OSMRE finds that proposed 11 AAC 90.331(e) is the same as or substantially similar to, and no less effective than the counterpart Federal regulation at 30 CFR 816.46(b)(4), and we approve it.

Alaska proposed non-substantive editorial revisions at 11 AAC 90.331(h)(2), concerning design of other treatment facilities. In addition, Alaska proposed to revise 11 AAC 90.331(h)(2) to require other treatment facilities to be designed in accordance with “11 AAC 90.336 and 11 AAC 90.338” rather than “the applicable requirements of this section.”

The counterpart Federal regulations at 30 CFR 816.46(d)(1) and (2) require that other treatment facilities must be designed: (1) To treat the 10-year, 24-hour precipitation event, unless a lesser design event is approved by the regulatory authority based on terrain, climate, other site-specific conditions and a demonstration by the operator that the effluent limitations of 30 CFR 816.42 will be met; and (2) in accordance with the applicable requirements of 30 CFR 816.46(c), specifically discussing sedimentation ponds.

Alaska's proposed rule at 11 AAC 90.331(h)(2) requires other treatment facilities to be designed in accordance with 11 AAC 90.336 and 11 AAC 90.338 where the counterpart Federal regulations require design in accordance with 30 CFR 816.46(c). The referenced rules, at 11 AAC 90.336 and 11 AAC 90.338, pertain to, respectively, temporary and permanent impoundment design and construction and permanent impoundment criteria. Alaska's referenced rules provide design criteria while the counterpart Federal regulations at 30 CFR 816.46(c) provide performance standards. Both pertain to the design of sedimentation ponds. Alaska's design criteria are more specific than, and no less effective than, the counterpart Federal performance standards. Therefore, based on the above discussion, OSMRE finds that Alaska's proposed rule at 11 AAC 90.331(h)(2), concerning design of other treatment facilities, is no less effective than the counterpart Federal regulation concerning other treatment facilities at 30 CFR 816.46(d)(2), and approves the changes.

At existing paragraph (a) of 11 AAC 90.635, Alaska states that a civil penalty may be assessed against a corporate director, officer, or agent of the corporate permittee when the individual knowingly and willfully authorizes, orders, or carries out a violation, “failure or refusal.” Alaska proposed to revise this paragraph to delete the quoted phrase and state that it may assess an individual civil penalty when there is a violation “of AS 27.21, this chapter, or a permit condition.” Referenced AS 27.21 is the Alaska Surface Coal Mining Control and Reclamation Act. “[T]his chapter” is Chapter 90, Surface Coal Mining, of the Alaska Administrative Code.

The federal counterpart requirement of paragraph (a) of 30 CFR 846.12 addresses the same individuals and types of actions by these individuals. This regulation explains that an individual civil penalty may be assessed when there is a “violation, failure or refusal.” The Federal regulations at 30 CFR 701.5 define “violation, failure or refusal” and “violation.” Alaska does not have counterpart definitions for these terms in its program, although it committed to proposing them by September 2013 in a rulemaking package in response to OSMRE's October 2, 2009, 30 CFR part 732 letter, concerning ownership and control. The State submitted its proposed definitions for OSMRE's informal review on December 4, 2014. That amendment proposal is currently undergoing the informal review process under SATS No. AK-008-INF.

By proposing to insert in 11 AAC 90.635(a) the phrase “of AS 27.21, this chapter, or a permit condition” in place of the phrase “failure or refusal,” Alaska would consider all violations of any part of AS 27.21, which is the Alaska Surface Coal Mining Control and Reclamation Act; all violations of any part of 11 AAC Chapter 90, which is the chapter containing all of the Alaska Department of Natural Resource's regulations governing coal mining; and violations of any conditions the Alaska Department of Natural Resources imposes when it issues a permit. These violations of the Alaska program include those encompassed by the 30 CFR 846.12(a) phrase “violation, failure or refusal” and the 30 CFR 701.5 definitions of the terms “violation, failure or refusal” and “violation.”

Therefore, based on the above discussion, OSMRE finds that the proposed individual civil penalty requirements of 11 AAC 90.635(a) are no less effective than the corresponding requirements of 30 CFR 846.12(a), and we approve it.

Alaska proposed revisions of 11 AAC 90.641(a) to require that, with exceptions in (b) and (c), individual civil penalties must be paid within 30 days of the issuance of a notice of proposed individual civil penalty assessment. This effectively gives the individual 30 days to either pay (thereby rendering the proposed penalty final) or contest the penalty (with payment due upon issuance of the final written decision). The counterpart Federal regulation at 30 CFR 846.18(a) requires that these penalties are due upon issuance of the final order.

Alaska proposed revisions of 11 AAC 90.641(b) to require that, if the individual contests the amount of the penalty or the fact of the violation, in accordance with AS 27.21.250(b) and 11 AAC 90.639(b), the penalty is due upon issuance of a final written decision (rather than administrative order) affirming, increasing, or decreasing the proposed penalty.

In paragraph (b), Alaska references 11 AAC 90.639(b) and AS 27.21.250(b) for contesting individual civil penalties. Revised 11 AAC 90.639(b) requires the notice of proposed individual civil penalty assessment to become a final decision 30 days after service, unless the individual contests the amount of the penalty or the fact of the violation, in accordance with AS 27.21.250(b), or Alaska agrees to a plan and schedule for abatement or correction of the violation. Alaska Statute 27.21.250(b) provides information on how an individual contests the amount of the penalty or the facts of the violation. These references are correct and appropriate.

Proposed 11 AAC 90.641(a) and (b) are similar to, and no less effective than, the counterpart Federal regulation at 30 CFR 846.18(a) and (b), which provides that, if an individual named in a notice of proposed individual civil penalty assessment files a petition for review in accordance with 43 CFR 4.1300 et seq., the penalty will be due upon issuance of a final administrative order affirming, increasing, or decreasing the proposed penalty.

Proposed 11 AAC 90.641(c) is no less effective than its Federal counterpart at 30 CFR 846.18(c), which requires that, when a written agreement or plan for abatement or compliance of an order is reached, the individual may postpone payment until receiving either a final order that payment is due or written notification that the penalty has been withdrawn. The proposed Alaska provision does not discuss postponement of payment or withdrawal of penalties. Because these options are implicit in the Alaska Commissioner's and individual's ability to agree upon a schedule or plan for the abatement or correction of the violation, Alaska's proposed 11 AAC 90.641(c) requires that the penalty is due only when the abatement or correction has not been satisfactory and a final written decision of the penalty amount has been issued.`

Alaska proposed to delete, from 11 AAC 90.641(d), language concerning the accrual of interest and late charges with references to the U.S. Department of Treasury. The language proposed for deletion reflects requirements placed on OSMRE by the Debt Collection Act of 1982 (97 Pub. L. 365), which applies only to debts owed to the Federal government. Alaska is not bound by these obligations and it does not need to adopt similar language. Therefore, OSMRE can approve the deletion of OSMRE-specific language proposed at 11 AAC 90.641(d).

Alaska also proposed editorial revisions of 11 AAC 90.641(d)(1) through (5), concerning overdue payments of civil penalties. These revisions add specificity and do not substantively revise the actions that the Alaska Commissioner may take if the penalty is not paid. Therefore, OSMRE finds that Alaska's proposed 11 AAC 90.641(d)(1) through (5) adds specificity, but has the same effect as the Federal regulations at 30 CFR 870.23(a) through (f), which are referenced in the counterpart Federal regulation at 30 CFR 846.18(d). Therefore, Alaska's proposed 11 AAC 90.641(d), concerning overdue payments of civil penalties, is no less effective than the counterpart Federal regulations at 30 CFR 846.18(d) and 30 CFR 870.23(a) through (f).

Based on the above discussion, OSMRE finds that proposed 11 AAC 90.641(a), (b), (c) and (d) are no less effective than the counterpart Federal regulations at 30 CFR 846.18 and 870.23, and we approve them.

Alaska, with four exceptions, has proposed at 11 AAC 90.652, 654, 656, 658, 660, 662, 664, 666 and 669, recodification, non-substantive editorial revisions and editorial revisions that add specificity without changing the meaning or implementation of Alaska's rules concerning the exemption for extraction of coal incidental to the mining of other minerals. The exceptions are 11 AAC 90.652(d) concerning public notice requirements, 11 AAC 90.652(g)(1) concerning the timeframe for requesting administrative review of an agency decision, 11 AAC 90.656 concerning the public availability of information, and 11 AAC 90.664(c) concerning the timeframe for requesting administrative review of an agency decision. These exceptions are discussed below.

11 AAC 90.652(d), Public Notice Requirements. Alaska has proposed to delete the requirement, at 11 AAC 90.654, that the applicant provide evidence of public notice in an application for incidental mining (previously codified as 11 AAC 90.652(i)). In place of the deleted provision, Alaska, at 11 AAC 90.652(d), proposed to require that the Alaska Commissioner provide public notice and receive comment on an application for an incidental mining exemption, in accordance with 11 AAC 90.907.

The counterpart Federal regulation, 30 CFR 702.12(i), requires that the applicant provide evidence of public notice in a newspaper of general circulation in the county of the mining area. Although Alaska's program at proposed 11 AAC 90.652(d) requires that the Alaska Commissioner provide notice of the application for mining of coal incidental to the mining of other minerals, Alaska's proposed 11 AAC 90.652(d) is no less effective than the Federal regulations at 30 CFR 702.12(i), which requires that the applicant publish notice. The public will be provided effective notice and an opportunity to comment, for a period of no less than 30 days, as required in the Federal regulations at 30 CFR 702.11(d).

11 AAC 90.652(g)(1), Administrative Review of an Application for an Incidental Mining Exemption. Alaska proposed to shorten the timeframe for an adversely affected person to request administrative review of an agency decision regarding an incidental mining exemption from 30 days to 20 days. This change is inconsistent with and less effective in providing the opportunity to seek appeal than the counterpart Federal regulation at 30 CFR 702.11(f)(1). The Federal regulation allows for a 30-day period to seek administrative review of such determination according to the Federal or State procedures, whichever are applicable.

11 AAC 90.656, Public Availability of Information. Alaska proposed, in the initial paragraph of 11 AAC 90.656, to require that, except as provided in AS 27.21.100(c), all information submitted to the Alaska Commissioner under 11 AAC 90.652 through 11 AAC 90.669, will be made immediately available for public inspection and copying at the Alaska Commissioner's office and at the regional office of the Department closest to the location of the coal mining operation. Alaska proposed to delete the requirements (previously codified at 11 AAC 90.653(a)) that (1) the information be available for a minimum period of 3 years after expiration of the period during which the subject mining area is active, and (2) the discretion of the Alaska Commissioner to hold information concerning trade secrets or privileged commercial or financial information of the persons intending to conduct the operations, confidential, if requested in writing at the time the application is made. The counterpart Federal requirements to the requirements that Alaska proposed to delete are 30 CFR 702.13(a), (b) and (c).

Alaska's statute at AS 27.21.100(c) specifies requirements concerning confidentiality of information in applications that are similar to and no less effective than the Federal regulations at 30 CFR 702.13(b) and (c). Therefore, Alaska's proposed 11 AAC 90.656, which includes a reference to AS 27.21.100(c) in place of language identical to 30 CFR 702.13(b) and (c), is no less effective than the Federal regulations concerning information that may be held as confidential. However, the counterpart Federal regulation at 30 CFR 702.13(a) requires, except for information approved as confidential, that all information submitted to the regulatory authority must be made immediately available for public inspection and copying at the local offices of the regulatory authority having jurisdiction over the mining operations claiming exemption until at least three years after expiration of the period during which the subject mining area is active (emphasis added).

Alaska's proposed 11 AAC 90.656 is the same as the counterpart Federal regulation at 30 CFR 702.13(a), with the exception that Alaska proposed to remove the requirement that the information must be available for three years after expiration of operations. OSMRE notes that Alaska's general provisions governing public availability of information at 11 AAC 90.907(j) requires information to be available for at least five years after expiration of the period during which the mining operation is active or is covered by any portion of a reclamation bond, whichever is later. However, operations extracting coal incidental to mining are exempt from these general provisions, if the exemption is approved by the Alaska Commissioner. See 11 AAC 90.901(a)(3). Therefore, Alaska's proposed deletion from 11 AAC 90.656 of the requirement that information must be available for three years after expiration of operations is less effective at providing public availability of certain information than the counterpart Federal regulation at 30 CFR 702.13(a).

11 AAC 90.664(c), Administrative Review of a Revocation of an Incidental Mining Exemption. Alaska proposed to shorten the timeframe for an adversely affected person to request administrative review of an agency decision regarding revocation of an incidental mining exemption from 30 days to 20 days. This change is inconsistent with and less effective in providing the opportunity to seek appeal than the counterpart Federal regulation at 30 CFR 702.17(c)(2). That regulation allows for a 30-day period to seek administrative review of such determination according to the Federal or State procedures, whichever are applicable.

Therefore, based on the above discussion, with three exceptions within 11 AAC 90.652, 11 AAC 656, and 11 AAC 90.664, OSMRE finds that Alaska's proposed rules at 11 AAC 90.652, 654, 656, 658, 660, 662, 664, 666 and 669, concerning the exemption for coal extraction incidental to the extraction of other minerals, are the same as or similar to the counterpart Federal regulations at 30 CFR part 702, and we approve them.

We find, however, that the proposed reduction of time for an adversely affected person to request administrative review of an agency decision about an application for an incidental mining exemption at 90.652(g)(1) is inconsistent with and less effective than the counterpart Federal regulation at 30 CFR 702.11(f)(1). Therefore, we do not approve it.

Likewise, OSMRE finds that Alaska's proposed deletion from 11 AAC 90.656 of the requirement that information must be available for three years after expiration of operations is less effective than the counterpart Federal regulation at 30 CFR 702.13(a), and we do not approve it.

OSMRE also finds that the proposed reduction of time for an adversely affected person to request administrative review of an agency decision about revocation of an incidental mining exemption at 90.664(c) is inconsistent with and less effective than the counterpart Federal regulation at 30 CFR 702.17(c)(1). Therefore, OSMRE does not approve it.

Accordingly, OSMRE is adding required amendments, at 30 CFR 902.16, that Alaska further amend 11 AAC 90.652(g)(1) and 90.664(c) to restore the 30-day timeframes for requesting administrative review of agency decisions regarding incidental mining exemptions, and 11 AAC 90.656, concerning public availability of information in an application for an exemption of coal incidental to the extraction of other minerals, to restore the requirement that the information, unless approved as confidential, must be made available for public inspection and copying until at least three years after expiration of the period during which the subject mining area is active.

Alaska proposed, at 11 AAC 90.911(133) and (134), definitions of “registered professional engineer” and “registered professional land surveyor.” OSMRE's regulations in several locations allow either a “qualified, registered, professional engineer” or a “qualified registered professional land surveyor” to certify certain design plans; however, OSMRE does not define the terms. Alaska defines these terms by reference to the body of law governing registered professionals in the State of Alaska.

Alaska's proposed inclusion of definitions of “registered professional engineer” and “registered professional land surveyor” serves to clarify its rules where these terms are used. See 11 AAC 90.089(a)(1) and 90.336(a), concerning preparation and certification of design plans for siltation structures, impoundments, and coal mine waste dams; 11 AAC 90.491(f)(1), concerning preparation and certification of design plans for primary roads; and 11 AAC 90.337(a), concerning inspections of permanent or temporary impoundments. These rules are clarified by the proposed definitions and remain no less effective than the counterpart Federal regulations, which use the same terms (see Federal regulations at 30 CFR 780.37(b), 816.49(a)(3) and 816.49(a)(11), concerning preparation and certification of plans and drawings for primary roads, siltation structures, impoundments, and coal mine waste dams, and inspections of impoundments). The proposed definitions serve to clarify its program and to demonstrate that Alaska provides for registration of both professional engineers and land surveyors.

Therefore, based on the above discussion, OSMRE approves Alaska's proposed definitions of “registered professional engineer” and “registered professional land surveyor” at 11 AAC 90.911(133) and (134).

OSMRE required at 30 CFR 902.16(a)(14) that Alaska revise 11 AAC 90.457(c)(3) to require consultation with and approval by the State forestry and wildlife agencies with regard to the minimum stocking and planting arrangements for areas developed for fish and wildlife habitat, recreation, shelter belts or forest products postmining land use as required at 30 CFR 816.116(b)(3)(i) (finding 16, 57 FR 37410, 37416, August 19, 1992).

Alaska proposed revisions of 11 AAC 90.457(c)(3) so that it is now substantively identical to the counterpart Federal regulations at 30 CFR 816.116(b)(3).

Therefore, OSMRE finds that proposed 11 AAC 90.457(c)(3) is no less effective than the Federal regulations at 30 CFR 816.116(b)(3) and 817.116(b)(3), approves it, and removes the required amendment at 30 CFR 902.16(a)(14).

OSMRE required at 30 CFR 902.16(a)(15) that Alaska resubmit standards for revegetation success per the requirements at 30 CFR 816.116(a)(1) (finding 18, 57 FR 37410, 37417, August 19, 1992).

On August 30, 2006, OSMRE revised the Federal regulations at 30 CFR 816.116(a)(1) by eliminating the requirement that revegetation success standards and statistically valid sampling techniques must be included in approved State regulatory programs. See 71 FR 51684, 51688. We are therefore removing the required amendment at 30 CFR 902.16(a)(15). The revised current regulation continues to require that standards for success and sampling techniques for measuring success must be selected by the regulatory authority and must be described in writing and made available to the public to ensure that all interested parties can readily find all the options available in their jurisdiction for evaluating revegetation success.

OSMRE approval is still required for any normal husbandry practices that Alaska may elect to include as part of its written revegetation success standards. The September 7, 1988 Federal Register notice (53 FR 34641) states that OSMRE “would consider, on a practice-by-practice basis, the administrative record supporting each practice proposed by a regulatory authority as normal husbandry practice[,]” and that the regulatory authority “would be expected to demonstrate (1) that the practice is the usual or expected state, form, amount or degree of management performed habitually or customarily to prevent exploitation, destruction or neglect of the resource and maintain a prescribed level of use or productivity of similar unmined lands and (2) that the proposed practice is not an augmentative practice prohibited by section 515(b) (20) of [SMCRA].”

The Federal regulations at 30 CFR 816.116(c)(1) for surface mining operations and 817.116(c)(1) for underground mining operations require that the period of extended responsibility for successful revegetation must begin after the last year of augmented seeding, fertilizing, irrigation, or other work, excluding husbandry practices that are approved by the regulatory authority in accordance with 30 CFR 816.116(c)(4) and 817.116(c)(4).

The Federal regulations at 30 CFR 816.116(c)(4) and 817.116(c) (4) require that a regulatory authority may approve selective husbandry practices, excluding augmented seeding, fertilization, or irrigation, provided it obtains prior approval from OSMRE that the practices are normal husbandry practices, without extending the period of responsibility for revegetation success and bond liability, if such practices can be expected to continue as part of the postmining land use or if discontinuance of the practices after the liability period expires will not reduce the probability of permanent vegetation success. Approved practices must be normal husbandry practices within the region for unmined land having land uses similar to the approved postmining land use of the disturbed area, including such practices as disease, pest, and vermin control; and any pruning, reseeding, and transplanting specifically necessitated by such actions.

State regulatory authorities may only approve the use of specific normal husbandry practices within any permit after receiving prior review and approval for the practice from OSMRE. Alaska has not proposed any normal husbandry practices for OSMRE review and approval. As such, normal husbandry practices may not currently be incorporated into any coal mining permit in Alaska. If Alaska intends to allow for any normal husbandry practices to be used during the period required for demonstration of revegetation success standards, Alaska must submit an amendment of its program to demonstrate that each practice is one that is customarily performed on similar un-mined lands and otherwise are consistent with and no less effective than 30 CFR 816.116(c)(4) and 30 CFR 817.116(c)(4). Alaska would also have to list, at 11 AAC 90.457(d), the acceptable practices.

Alaska stated in its March 6, 2012, response to OSMRE's January 23, 2012, concern letter, that, due to climatic and environmental differences between different mine sites and proposed mine sites in Alaska, rather than developing state-wide revegetation success standards and sampling techniques, Alaska has approved standards that determine vegetative success and the methods used to quantify the success of revegetation in each individual permit. Alaska stated that the standard is developed from local baseline conditions and is reviewed by both the Alaska Departments of Natural Resources (DNR), Fish and Game (ADFG) and their respective divisions, such as the DNR Division of Agriculture and the ADFG Division of Habitat.

Although it is appropriate for Alaska to review and approve revegetation success standards and sampling techniques in each individual permit, the Federal program, 30 CFR 816.116(a)(1) and 30 CFR 817.116(a)(1), requires the regulatory authority to first select all standards for success and statistically valid sampling techniques, which are available within the jurisdiction, describe them in writing, and make them publicly available. See August 30, 2006, Federal Register (71 FR 51684, 51690-91). The manner in which the regulatory authority selects success standards and sampling techniques that it will allow operators to use in evaluating revegetation success is up to the regulatory authority. It may do so in consultation with operators and/or with assistance from academia. However, selected standards and sampling techniques must meet the requirements of 30 CFR 816.116(a) and (b) and 30 CFR 817(a) and (b), and they must be put in writing and made available to the public. It is from this set of identified success standards and sampling techniques that the operators must choose the specific standards and techniques to include in their individual permit applications.

In accordance with the requirements at 30 CFR 816.116(a)(1) and 817.116(a)(1), OSMRE finds that Alaska must clarify its program to acknowledge the selection of all revegetation success standards and statistically valid sampling techniques available to operators within the state will be put in writing and made available to the public. Therefore, OSMRE is adding a new, required program amendment at 30 CFR 902.16(c)(6) to require that Alaska revise 11 AAC 90.457 to indicate that all available revegetation success standards and sampling techniques approved by the Alaska Commissioner will be put in writing and made publicly available. Additionally, this required amendment will note that if Alaska intends to allow the use of normal husbandry practices to be used during the period required for demonstration of revegetation success, it must submit an amendment of its program to demonstrate that each practice is one that is customarily performed on similar un-mined lands and list, at 11 AAC 90.457(d), the acceptable practices.

We asked for public comments on the amendment (Document ID No. OSM-2011-0017-0001), but received none.

On November 3, 2011, under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA (30 U.S.C. 1253), we requested comments on the amendment from various Federal agencies with an actual or potential interest in the Alaska program (Document ID No. OSM-2011-0017-0003). We received two responses indicating the respective agencies did not have any comments.

On November 18, 2011, the U.S. Bureau of Reclamation responded with an email stating that it had no comments (Document ID No. OSM-2011-0017-0006).

On November 18, 2011, the U.S. Forest Service responded with an email stating that it had no comments (Document ID No. OSM-2011-0017-0008).

Under 30 CFR 732.17(h)(11)(ii), we are required to get a written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq.).

None of the revisions that Alaska proposed to make in this amendment pertain to air or water quality standards. Therefore, we did not ask EPA to concur on the amendment. However, under 30 CFR 732.17(h)(11)(i), OSMRE requested comments on the amendment from EPA (Document ID No. OSM-2011-0017-0015). EPA did not respond to our request.

Under 30 CFR 732.17(h)(4), we are required to request comments from the SHPO and ACHP on amendments that may have an effect on historic properties. On November 3, 2011, we requested comments on Alaska's amendment (Document ID No. OSM-2011-0017-0004). The ACHP did not respond to our request. However, on November 9, 2011, the SHPO responded with a letter stating they had no objections to the amendment (Document ID No. OSM-2011-0017-0007).

Based on the above findings, we are approving, with four exceptions and six additional required amendments, the Alaska amendment that was submitted on September 8, 2011, as revised on March 6, 2012.

The exceptions, which OSMRE does not approve, are that: (1) 11 AAC 90.321(e) excludes water supplies affected by surface coal mining activities conducted on or before October 24, 1992, from water supply replacement requirements, (2) 11 AAC 90.652(g)(1) proposes a reduced timeframe of 20 days to request administrative review of an agency decision regarding an incidental mining exemption, (3) 11 AAC 90.656 does not require that information in an application for an exemption of coal incidental to the extraction of other minerals will be made available for public inspection and copying until at least three years after expiration of the period during which the subject mining area is active, and (4) 11 AAC 90.664(c) proposes a reduced timeframe of 20 days to request administrative review of an agency decision to revoke an incidental mining exemption. All revisions proposed by Alaska on September 8, 2011, had been approved through the State's legislative process prior to their submission to OSMRE as a formal program amendment. To ensure Alaska corrects its regulations to accurately reflect the changes that OSMRE is not approving, we are adding three required amendments at 902.16. These requirements will ensure protection of water supplies affected by surface coal mining activities conducted on or before October 24, 1992, restore both 30-day timeframes for requesting administrative review of agency decisions, and ensure information in an application for an exemption of coal incidental to the extraction of other minerals will be made available for public inspection and copying until at least three years after expiration of the period during which the subject mining area is active.

OSMRE's approval of revisions to 11 AAC 90.101(e) is conditioned upon the State submitting additional language corresponding to 30 CFR 784.20(b)(7). The language, which was omitted from Alaska's current amendment, pertains to subsidence control plan requirements related to minimizing damage to non-commercial buildings and occupied residential dwellings in planned subsidence scenarios. We are placing a new required amendment at 30 CFR 902.16 to reflect this required addition.

OSMRE's approval of revisions to 11 AAC 90.321(e) is conditioned upon the State submitting statutory revisions to AS 27.21.220 that will provide statutory authority to implement the new regulatory language, consistent with the Energy Policy Act of 1992. We are placing a new required amendment at 30 CFR 902.16 to reflect this required statutory addition.

OSMRE is also removing and reserving the current requirement at 30 CFR 902.16(a)(15). The existing required amendment is no longer necessary due to changes in the Federal program at 30 CFR 816.116(a)(1). Alaska must have revegetation success standards, which are consistent with 30 CFR 816.116(a) and (b); however, the success standards may be in a guideline, which does not need to be approved as a state program amendment. Such standards must be in writing and available to the public. We are, therefore, adding a new required amendment at 30 CFR 902.16(c)(6) to state that Alaska must indicate revegetation success criteria are available to the public in written form. Additionally, Alaska has indicated to OSMRE that it is working to develop a list of normal husbandry practices, which could be employed without restarting the revegetation responsibility period prior to bond release. Because 30 CFR 816.116(c)(4) requires normal husbandry practices to be processed as a state program amendment, we are adding a required amendment at 30 CFR 902.16(c)(6) that, if Alaska will allow for any normal husbandry practices to be used during the period required for demonstration of revegetation success, the State must submit an amendment of its program to demonstrate that each practice is one that is customarily performed on similar un-mined lands and list, at 11 AAC 90.457(d), the acceptable practices.

To implement this decision, we are amending the Federal regulations, at 30 CFR part 902, that codify decisions concerning the Alaska program. In accordance with the Administrative Procedure Act, this rule will take effect 30 days after the date of publication. Section 503(a) of SMCRA requires that the State's program demonstrate that the State has the capability of carrying out the provisions of the Act and meeting its purposes. SMCRA requires consistency of State and Federal standards.

Section 503 of SMCRA provides that a State may not exercise jurisdiction under SMCRA unless the State program is approved by the Secretary. Similarly, 30 CFR 732.17(a) requires that any change of an approved State program be submitted to OSMRE for review as a program amendment. The Federal regulations at 30 CFR 732.17(g) prohibit any changes to approved State programs that are not approved by OSMRE. In the oversight of the Alaska program, we will recognize only the statutes, regulations, and other materials we have approved, together with any consistent implementing policies, directives, and other materials. We will require Alaska to enforce only approved provisions.

This rule would not effect a taking of private property or otherwise have taking implications that would result in public property being taken for government use without just compensation under the law. Therefore, a takings implication assessment is not required. This determination is based on an analysis of the corresponding Federal regulations.

Executive Order 12866 provides that the Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB) will review all significant rules. Pursuant to OMB guidance, dated October 12, 1993, the approval of state program amendments is exempted from OMB review under Executive Order 12866. Executive Order 13563, which reaffirms and supplements Executive Order 12866, retains this exemption.

State program amendments are not regulatory actions under Executive Order 13771 because they are exempt from review under Executive Order 12866.

The Department of the Interior has reviewed this rule as required by section 3(a) of Executive Order 12988. The Department has determined that this Federal Register notice meets the criteria of Section 3 of Executive Order 12988, which is intended to ensure that the agency reviews its legislation and proposed regulations to eliminate drafting errors and ambiguity; that the agency writes its legislation and regulations to minimize litigation, and that the agency's legislation and regulations provide a clear legal standard for affected conduct rather than a general standard, and promote simplification and burden reduction. Because Section 3 focuses on the quality of Federal legislation and regulations, the Department limited its review under this Executive Order to the quality of this Federal Register document and to changes to the Federal regulations. The review under this Executive Order did not extend to the language of the State regulatory program or to the program amendment that the State of Alaska drafted.

This rule is not a “[p]olicy that [has] Federalism implications” as defined by Section 1(a) of Executive Order 13132 because it does not have “substantial direct effects on the States, or on the distribution of power and responsibilities among the various levels of government.” Instead, this rule approves an amendment to the Alaska program submitted and drafted by that State. OSMRE reviewed the submission with fundamental federalism principles in mind as set forth in Sections 2 and 3 of the Executive Order and with the principles of cooperative federalism, as set forth in SMCRA. See, e.g., 30 U.S.C. 1201(f). Specifically, pursuant to Section 503(a)(1) and (7) (30 U.S.C. 1253(a)(1) and (7)), OSMRE reviewed the program amendment to ensure that it is “in accordance with” the requirements of SMCRA and “consistent with” the regulations issued by the Secretary pursuant to SMCRA.

The Department of the Interior strives to strengthen its government-to-government relationship with Tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in Executive Order 13175 and have determined that it has no substantial direct effects on federally recognized Tribes or on the distribution of power and responsibilities between the Federal government and Tribes. Therefore, consultation under the Department's tribal consultation policy is not required. The basis for this determination is that our decision is on the Alaska program, which does not include Tribal lands or regulation of activities on Tribal lands. Tribal lands are regulated independently under the applicable, approved Federal program.

Executive Order 13211 requires agencies to prepare a Statement of Energy Effects for a rulemaking that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not significant energy action under the definition in Executive Order 13211, a Statement of Energy Effects is not required.

This rule is not subject to Executive Order 13045 because this is not an economically significant regulatory action as defined by Executive Order 12866; and this action does not address environmental health or safety risks disproportionately affecting children.

Consistent with sections 501(a) and 702(d) of SMCRA (30 U.S.C. 1251(a) and 1292(d), respectively) and the U.S. Department of the Interior Departmental Manual, part 516, section 13.5(A), state program amendments are not major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C).

Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 3701 et seq.) directs OSMRE to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. (OMB Circular A-119 at p. 14). This action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with SMCRA.

This rule does not include requests and requirements of an individual, partnership, or corporation to obtain information and report it to a Federal agency. As this rule does not contain information collection requirements, a submission to the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) is not required.

This rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The State submittal, which is the subject of this rule, is based upon corresponding Federal regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. In making the determination as to whether this rule would have a significant economic impact, the Department relied upon the data and assumptions for the corresponding Federal regulations.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) Does not have an annual effect on the economy of $100 million; (b) will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S. based enterprises to compete with foreign-based enterprises. This determination is based on an analysis of the corresponding Federal regulations, which were determined not to constitute a major rule.

This rule will not impose an unfunded mandate on State, local, or Tribal governments, or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. This determination is based on an analysis of the corresponding Federal regulations, which were determined not to impose an unfunded mandate. Therefore, a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.

For the reasons set out in the preamble, 30 CFR part 902 is amended as set forth below:

I. Background on the Wyoming Program II. Submission of the Proposed Amendment III. OSMRE's Findings IV. Summary and Disposition of Comments V. OSMRE's Decision VI. Statutory and Executive Order Reviews I. Background on the Wyoming Program

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Tribal lands within its borders by demonstrating that its State program includes, among other things, State laws and regulations that govern surface coal mining and reclamation operations in accordance with the Act and consistent with the Federal regulations. See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Wyoming program on November 26, 1980. You can find background information on the Wyoming program, including the Secretary's findings, the disposition of comments, and the conditions of approval of the Wyoming program in the November 26, 1980, Federal Register (45 FR 78637). You can also find later actions concerning Wyoming's program and program amendments at 30 CFR 950.12, 950.15, 950.16, and 950.20.

By letter dated September 30, 2014 (Administrative Record Docket ID No. OSM-2014-0007), Wyoming sent OSMRE an amendment to its program under SMCRA. Wyoming submitted the amendment to address deficiencies that OSMRE previously identified during its review of Wyoming's program related to valid existing rights determination requests, as discussed more fully below, and individual civil penalties (WY-044-FOR; Docket ID No. OSM-2013-0001) and ownership and control (WY-045-FOR; Docket ID No. OSM-2013-0002) amendments. The amendment also revises a provision about periodic monitoring of blasting in response to a concern that the Casper Area Office identified during its annual oversight review of the Wyoming program.

We announced receipt of the proposed amendment in the November 12, 2014, Federal Register (79 FR 67116). In the same document, we opened the public comment period and provided an opportunity for a public hearing or meeting on the amendment's adequacy (Administrative Record Document ID No. OSM-2014-0007). OSMRE did not hold a public hearing or meeting, as neither were requested. The public comment period ended on December 12, 2014. We received comments from two Federal agencies (discussed below in section “IV. Summary and Disposition of Comments”.

The following are the findings we made about the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We are approving the amendment as described below.

Wyoming proposed minor grammatical changes to several previously approved rules. Wyoming did not propose any substantive changes to the text of these regulations. Because the proposed revisions to these previously approved rules are minor and result in no substantive changes to the Wyoming program, we are approving the changes and find that they are no less effective than the corresponding Federal regulations at 30 CFR parts 700 through 887. The specific, minor revisions to the Code of Wyoming Rules and the Federal regulation counterparts are as follows:

• Chapter 1, Section 2(co), related to Notice of violation, [30 CFR 701.5];

• Chapter 2, Section 2(a)(ii)(A)(II), related to Adjudication Requirements, [30 CFR 778.14(a)(2)];

• Chapter 2, Section 2(a)(ii)(B), related to Adjudication Requirements, [30 CFR 778.14(c)];

• Chapter 6, related to Blasting for Surface Coal Mining Operations, [30 CFR 816.61 and 817.61]

• Chapter 12, Section 1(a)(vii)(A), related to VER submission requirements and procedures, [30 CFR 761.16(b)];

• Chapter 12, Section 1(a)(vii)(B)(IV), related to VER submission requirements and procedures,[30 CFR 761.16(c)(4)];

• Chapter 12, Section 1(a)(vii)(E), related to VER submission requirements and procedures, [30 CFR 761.16(f)];

• Chapter 12, Section 1(a)(x), related to VER submission requirements and procedures, [30 CFR 773.12];

• Chapter 12, Section 1(a)(xiv)(D)(II), related to VER submission requirements and procedures, [30 CFR 774.11(g)(2)];

• Chapter 16, Section 2(h), related to Enforcement, [30 CFR 774.12a]; and

• Chapter 16, Section 4(c)(i), related to Individual Civil Penalties, [30 CFR 846.14(a)(1)].

Wyoming proposes additions and revisions to several regulations containing language that is the same as or substantially similar to the corresponding sections of the Federal regulations and/or SMCRA. Therefore, we are approving them.

In particular, Wyoming is revising Chapter 6, Section 4(b)(i)(A); Blasting for Surface Coal Mining Operations; Blasting Standards, after OSMRE identified an inconsistency in this provision in its Annual Oversight Report for Evaluation Year 2013. Wyoming's revision makes the provision consistent with the corresponding language at 30 CFR 816.67(b)(2)(i).

The specific citations to Wyoming additions and revisions that have the same meaning as the corresponding provisions of the Federal regulations, along with the applicable Federal counterpart, are as follows:

• Chapter 2, Section 2(a)(ii)(A)(I); Permit Application Requirements; adjudication requirements and statement of compliance; [30 CFR 778.14(a)(1)];

• Chapter 6, Section 4(b)(i)(A); Blasting for Surface Coal Mining Operations; Blasting Standards; periodic monitoring of blasting; [30 CFR 816.67(b)(2)(i)];

• Chapter 12, Section 1(a)(x)(D)(I); Permitting Procedures; unanticipated events or conditions at remining sites; [30 CFR 773.13(a)(2)]; and

• Chapter 16, Section 4(c)(i)(A); Individual Civil Penalties; amount of civil penalty; [30 CFR 846.14(a)(1)].

In a letter to Wyoming dated October 2, 2009, OSMRE identified several required rule changes under 30 CFR 732.17(c) (“732 letter”) concerning ownership and control. Item A.2 of the 732 letter required Wyoming to adopt a State counterpart to the Federal definition of “Control or Controller” at 30 CFR 701.5 (OSMRE's 2000 Rule, 65 FR 79852, 79594 (Dec. 19, 2000) and OSMRE's 2007 Rule, 72 FR 68000, 68003 (December 3, 2007)).

In response, Wyoming proposed to define the term “Control or Controller” at Chapter 1, Section 2(aa) in a previous rulemaking action (WY-045-FOR) as a State counterpart to the Federal regulations at 30 CFR 701.5. OSMRE replied in a letter dated April 9, 2013, (Administrative Record Document ID. No. WY-50-09) that in order to maintain consistency with its own rules and be no less effective than the corresponding Federal regulations at 30 CFR 701.5, Wyoming must include the term “surface” in its newly proposed definition of “Control or Controller” at Chapter 1, Section 2(aa). In addition, we required Wyoming to reinsert the phrase “For Surface Coal Mining Operations” in the title for Chapter 2 that was simply entitled, “Permit Application Requirements.” As a result, we did not approve Wyoming's newly proposed rule at Chapter 1, Section 2(aa) in a December 7, 2017, Federal Register document (82 FR 57664, 57668).

In response, Wyoming now proposes to include the term “surface” in its newly proposed definition of “Control or Controller” at Chapter 1, Section 2(aa). In addition, Wyoming reinserts the phrase “For Surface Coal Mining Operations” in the title for Chapter 2 concerning permit application requirements. Wyoming's proposed revisions are consistent with and no less effective than the corresponding Federal regulations at 30 CFR 701.5. Accordingly, we are approving the aforementioned rule changes.

Item K.3 of OSMRE's October 2, 2009, 732 letter instructs the reader to “See LQD [Land Quality Division] Rules and Regulations, Chapter 1, Section 2 and Chapter 2, Section 2” about counterpart rules to the Federal requirements for providing applicant and operator permit history information at 30 CFR 778.12. The 732 letter indicates that the requirement for an applicant to provide the permit history information for the operator was newly added in OSMRE's 2000 rule, and it was constructed from provisions in previous 30 CFR 778.13.

In response, Wyoming proposed in a previous rulemaking action (WY-045-FOR) to revise its rules at Chapter 2, Section 2(a)(i)(B), to require permit applicants to identify additional organizational members in an application for a surface coal mining permit, including owners of record of ten (10) percent or more of the business entity in question, as required under 30 CFR 778.11(b).

Wyoming's proposed rule at Chapter 2, Section 2(a)(i)(B), includes counterpart provisions to 30 CFR 778.11(b)(1)-(3). In addition, the counterpart language to 30 CFR 778.11(b)(4) was found in proposed subsection (D). As a result, OSMRE determined that the language in these provisions, taken together, are consistent with and no less effective than the Federal regulations at 30 CFR 778.11(b). However, Wyoming's existing rule language in subsection (B) warranted the inclusion of additional clarifying language to be consistent with and no less effective than both the Federal counterpart rule at 30 CFR 778.12(a) and its rule language in subsection (F) regarding operator's permit history information. Consequently, we did not approve Wyoming's proposed revisions to Chapter 2, Section 2(a)(i)(B), and we published that decision in a December 7, 2017, Federal Register document (82 FR 57664, 57668).

In response, Wyoming now proposes to further revise subsection (B) by providing additional language that requires permit applicants to provide permit history information for the operator. Specifically, Wyoming proposes to revise Chapter 2, Section 2(a)(i)(B), to be consistent with the Federal regulations at 30 CFR 778.12(a) by requiring that a complete identification of interests must include a list of all the names under which the applicant, the applicant's partners or principal shareholders, and the operator and the operator's partners or principal shareholders operates or previously operated a surface coal mining operation in the United States within the five years period preceding the date of submission of the application. Based on the discussion above, we find that Wyoming's newly proposed rule at Chapter 2, Section 2(a)(i)(B), is consistent with and no less effective than the counterpart Federal regulations at 30 CFR 778.12(a), and satisfies the requirement specified in Item K.3 of OSMRE's October 2, 2009, 732 letter. Accordingly, we approve it.

In a letter to Wyoming dated April 2, 2001, OSMRE identified several required rule changes under 30 CFR 732.17(c) concerning valid existing rights. Item G-4 of the 732 letter required Wyoming to submit State counterpart provisions to 30 CFR 761.16(g) about availability of records requirements.

In response, Wyoming proposed to revise its rules at Chapter 12, Section 1(a)(vii)(F), in a previous rulemaking action (WY-040-FOR) by requiring that the Division or agency responsible for processing a valid existing rights (VER) request must make a copy of the request and related materials available to the public. OSMRE subsequently did not approve proposed subsection (F) in a February 14, 2013, Federal Register document (78 FR 10512, 10517) because Wyoming did not specify in the heading that the rule pertains to “Availability of records” and did not provide counterpart language to the Federal requirements in 30 CFR 761.16(g) explaining that, in addition to the VER request and related materials, records associated with any subsequent VER determination must also be made available to the public. As a result, we required Wyoming to revise its proposed rule language at Chapter 12, Section 1(a)(vii)(F), by making the aforementioned changes.

In response to the February 14, 2013, Federal Register document, Wyoming proposed to further revise its rules at Chapter 12, Section 1(a)(vii)(F), by specifying that the rule pertains to “Availability of records” (WY-044-FOR). Wyoming also proposed language explaining that, in addition to the valid existing rights request and related materials, records associated with any subsequent valid existing rights determination under subsection (D) of its rules shall be made available to the public in accordance with the requirements and procedures of W.S. section 35-11-1101. Once again, OSMRE did not approve proposed subsection (F) in a March 31, 2014, Federal Register document (79 FR 17863, 17865). In that document, OSMRE stated that while referenced statute, W.S. section 35-11-1101, satisfies some of the requirements of 30 CFR 840.14, it fails to satisfy all of them. In particular, OSMRE explained that 30 CFR 840.14(b) specifies that the regulatory authority must make copies of all records immediately available to the public in the area of mining until at least five years after the expiration of the period during which the operation is active or is covered by any portion of a reclamation bond. Because W.S. section 35-11-1101 failed to include a similar provision, Wyoming's reference to the statute did not satisfy the requirements of 30 CFR 840.14, as referenced in 30 CFR 761.16(g), and newly proposed subsection (F) remained less effective than the Federal regulations at 30 CFR 761.16(g).

Title 30 CFR 761.16(g) requires the agency responsible for processing valid existing rights determination requests to make a copy of the request available to the public in the same manner as it makes permit applications available under 30 CFR 773.6(d). The responsible agency must also make records associated with the valid existing rights request and any subsequent determination available to the public in accordance with the requirements and procedures of 30 CFR 840.14 or 30 CFR 842.16.

Wyoming now proposes to revise Subsection (F) by providing additional statutory and regulatory citations to clarify that valid existing rights related documents are subject to the same public availability requirements as are permit applications. Specifically, Wyoming references its statutory provisions about the availability of records to the public and confidentiality at W.S. section 35-11-1101, and the requirements for public inspection of mining permit applications at W.S. section 35-11-406(d) in the Wyoming Environmental Quality Act. Wyoming also references its Public Records Act at W.S. sections 16-4-201 through 16-4-205, as well as the Division's rules and regulations related to public review and participation.

Lastly, Wyoming proposes language requiring, at a minimum, that copies of records associated with valid existing rights requests must be made immediately available to the public in the area of mining until at least five years after the expiration of the period during which the operation is active or is covered by any portion of a reclamation bond so that they are conveniently available to residents of that area in compliance with the Federal regulations at 30 CFR 840.14 (b), (c), and (d).

Wyoming's statutory counterpart to 30 CFR 840.14(a) concerning the availability of all documents relating to applications for and approvals of surface coal mining and reclamation operation permits and inspection and enforcement actions to the OSMRE Director upon request is found at W.S. section 35-11-1101(b). Wyoming's regulatory counterpart to 30 CFR 773.6(d)(1) about public availability of permit applications is found at Chapter 12, Section 1(b), and requires, in pertinent part, that all procedural requirements of the Act and the regulations relating to review, public participation, and approval or disapproval of permit applications, and permit term and conditions must, unless otherwise provided, apply to permit revisions, amendments, renewals and permit transfer, assignment or sale of permit rights.

In its Statement of Principal Reasons for Adoption (SOPR), Wyoming explains that, with the exception of references to the State requirements, the additional clarifying language is a mirror of the Federal language and is intended to ensure that the minimum Federal requirements in 30 CFR 840.14 are met. Taken together, Wyoming's references to its statutes, rules, and the Federal regulations regarding public availability of records meet the requirements of 30 CFR 840.14, as referenced in 30 CFR 761.16(g). We find that newly proposed Chapter 12, Section 1(a)(vii)(F), is consistent with and no less effective than the counterpart Federal regulations at 30 CFR 761.16(g), and satisfies the requirements specified in Item G-4 of OSMRE's April 2, 2001, 732 letter. Accordingly, we approve it.

Item E.4 of OSMRE's October 2, 2009, 732 letter required Wyoming to adopt a State counterpart to the Federal requirements for reviewing an applicant's or operator's permit history at 30 CFR 773.10 (OSMRE's 2000 Rule, 65 FR 79582, 79664 and OSMRE's 2007 Rule, 72 FR 68000, 68029). The preamble discussion of the 2007 rule states that the provision for an additional review was retained to determine if there are undisclosed controllers when an applicant or operator is determined to have no previous mining experience.

In response to the 732 letter, Wyoming revised its rules at Chapter 12, Section 1(a)(viii)(B), in a previous rulemaking action (WY-045-FOR) to include State counterpart language to the Federal regulations at 30 CFR 773.10(a)-(c) that address an applicant's or operator's permit history. OSMRE determined that Wyoming's newly proposed rule language is consistent with and no less effective than the Federal regulations at 773.10(a) and (b).

However, Wyoming's proposed rule at subsection (B) warranted the inclusion of additional clarifying language with respect to conducting additional ownership and control investigations to be consistent with and no less effective than the Federal counterpart rule at 30 CFR 773.10(c). As a result, we did not approve Wyoming's newly proposed rule at Chapter 12, Section 1(a)(viii)(B), in a December 7, 2017, Federal Register document (82 FR 57664, 57669).

In response, Wyoming now proposes to revise subsection (B) by including a provision for additional review to determine if there are undisclosed controllers when an applicant or operator is determined to have no previous mining experience. Specifically, Wyoming revises proposed Chapter 12, Section 1(a) (viii) (B), to be consistent with the Federal regulations at 30 CFR 773.10(c) by stating that additional ownership and control investigations may be conducted under subsection (ix)(E) to determine if someone else with mining experience controls the mining operation if the applicant or operator does not have any previous mining experience. Subsection (ix)(E) of Wyoming's rules includes counterpart language to 30 CFR 774.11(f), which is referenced in 30 CFR 773.10(c). Wyoming also replaces the term “regulatory authority” with “Division” in order to maintain consistency throughout its rules.

Based on the discussion above, we find that Wyoming's newly proposed rule at Chapter 12, Section 1(a)(viii)(B), is consistent with and no less effective than the counterpart Federal regulations at 30 CFR 773.10, and satisfies the requirements specified in Item E.4 of OSMRE's October 2, 2009, 732 letter. Accordingly, we approve it.

On December 3, 2007, OSMRE published a new Ownership and Control; Permit and Application Information; and Transfer, Assignment, or Sale of Permit rights Federal rulemaking (72 FR 6800). The new Federal regulation at 30 CFR 773.26(e) allowed a person who is unsure why he or she is shown in OSMRE's Applicant Violator System (AVS) as an owner or controller of a surface coal mining operation to request an informal explanation from OSMRE's AVS office. The provision also required a response to such a request within 14 days. The preamble discussion of the 2007 Rule clarified at 30 CFR 773.26(e) that a person listed in the AVS may request an informal explanation from OSMRE's AVS office at any time and should expect a response within 14 days. Item F.2 of OSMRE's October 2, 2009, 732 letter indicated that Wyoming did not have a State counterpart to 30 CFR 773.26(e). In response, Wyoming revised its rules at Chapter 12, Section 1(a)(xiv)(C), in a previous rulemaking action (WY-045-FOR) to include a State counterpart provision to the Federal regulations at 30 CFR 773.26(e). During OSMRE's review of the amendment, we found that while Wyoming's newly proposed rule language clarifies that a person listed in AVS may request an informal explanation from the AVS office at any time, it did not include language requiring a response to such a request within 14 days. Consequently, we did not approve Wyoming's newly proposed rule at Chapter 12, Section 1(a)(xiv)(C), in a December 7, 2017, Federal Register document (82 FR 57664, 57670).

In response, Wyoming now proposes additional clarifying language that references the Federal regulations at 30 CFR 773.26(e), which states that within 14 days of a request for an informal explanation, the AVS Office will provide a response describing why a person is listed in AVS.

In its SOPR, Wyoming explains that it decided to include a citation to the Federal regulations to account for the many variables that may affect the timing of a response if the State were to provide one. For example, OSMRE's AVS Office noted that Wyoming may not have access to documents that cause an entry into AVS if the operator has operations in multiple jurisdictions.

Based on the discussion above, we find that Wyoming's newly proposed rule at Chapter 12, Section 1(a)(xiv)(C), is consistent with and no less effective than the Federal regulations at 30 CFR 773.26(e), and satisfies the requirement specified in Item F.2 of OSMRE's October 2, 2009, 732 letter. Accordingly, we approve it.

Item F.4 of OSMRE's October 2, 2009, 732 letter required Wyoming to adopt a State counterpart to the Federal requirements about written agency decisions on challenges to ownership and control listings or findings at 30 CFR 773.28 (OSMRE's 2000 Rule, 65 FR 79852, 79666 and OSMRE's 2007 Rule, 72 FR 68000, 68030). In response, Wyoming proposed new rules at Chapter 12, Section 1(a)(xiv)(F), in a previous rulemaking action (WY-045-FOR) to include State counterpart provisions to the Federal regulations at 30 CFR 773.28(a)-(f) that address the requirements for written agency decisions on challenges to ownership and control listings or findings.

Although OSMRE found that Wyoming's newly proposed rule language was consistent with and no less effective than the Federal regulations at 30 CFR 773.28(a)-(d), additional clarifying language was required with respect to appeals of written decisions to be consistent with and no less effective than the Federal counterpart rule at 30 CFR 773.28(e). Wyoming's proposed language merely stated that “appeals of written decisions will be administered under the Department's Rules of Practice and Procedure.” Wyoming also failed to include a counterpart provision to 30 CFR 773.28(f) concerning required updates to the AVS following the Wyoming Land Quality Division's (Division) written decision or any decision by a reviewing administrative or judicial tribunal.

Finally, the last sentence of proposed subsection (F) was very general and only stated that “AVS shall be revised as necessary to reflect these decisions.” As a result, we did not approve Wyoming's newly proposed rule at Chapter 12, Section 1(a)(xiv)(F), in a December 7, 2017, Federal Register document (82 FR 57664, 57670).

In response, Wyoming proposes to further revise subsection (F) to require that all administrative remedies must be exhausted before seeking judicial review of an ownership and control decision and to add the requirement that the Division must update the AVS, as appropriate, to be consistent with 30 CFR 773.28(e) and (f), respectively. Specifically, Wyoming revises proposed Chapter 12, Section 1(a)(xiv)(F), to be consistent with the Federal regulations at 30 CFR 773.28(e) by requiring that all administrative remedies must be exhausted under the procedures of the Wyoming Environmental Quality Act, the Department's Rules of Practice and Procedure, the Wyoming Administrative Procedure Act and Chapter 12 of the Rules and Regulations before seeking judicial review. Newly proposed subsection (F) also includes counterpart language to 30 CFR 773.28(f) that requires the Division to review the information in the AVS following its written decision or any decision by a reviewing administrative or judicial tribunal about a challenge to ownership or control listings or findings to determine if it is consistent with the decision. If it is not, the Division must promptly revise the information to reflect the decision.

Based on the discussion above, we find that Wyoming's newly proposed rule at Chapter 12, Section 1(a)(xiv)(F), is consistent with and no less effective than the counterpart Federal regulations at 30 CFR 773.28(a)-(f), and satisfies the requirements specified in Item F.4 of OSMRE's October 2, 2009, 732 letter. Accordingly, we approve it.

Item I. of OSMRE's October 2, 2009, 732 letter instructs the reader to “See W.S. § 35-11-408” about transfer, assignment, or sale of permit rights (TAS). The 732 letter states that the 2007 Rule clarifies, at (a) and (d) of 30 CFR 774.17, that at the regulatory authority's discretion, a prospective successor in interest, with sufficient bond coverage, may continue to mine during the TAS process. This recognizes that an acquiring entity becomes the successor in interest to the rights granted under the permit (under 30 CFR 701.5) only after the regulatory authority approves the transfer, assignment, or sale.

In response, Wyoming proposed to revise its existing rule at Chapter 12, Section 1(b), in a previous rulemaking action (WY-045-FOR) to apply all procedural requirements of the Act and the regulations relating to review, public participation, and approval or disapproval of permit applications, and permit term and conditions to permit transfer, assignment or sale of permit rights. Similarly, Wyoming proposed to revise subsection (b)(ii) by applying the requirements imposed by W.S. section 35-11-408 about procedures for permit transfers to the assignment or sale of permit rights. Wyoming also revised subsection (b)(ii)(B) by adding a cross reference to its rules at Chapter 2, Section 2(a)(i) through (iii), which is the counterpart to 30 CFR part 778 regarding permit application requirements for all legal, financial, compliance and related information. Finally, Wyoming added language to require that a potential transferee's statement of qualifications must include the name, address and permit number of the existing permit holder, which is the counterpart to 30 CFR 774.17(b)(1)(i).

OSMRE subsequently approved Wyoming's proposed revision to Chapter 12, Section 1(b), in a December 7, 2017, Federal Register document (82 FR 57664, 57671). However, we did not approve Wyoming's proposed revisions to subsection (b)(ii) because they did not address many of the specific application approval requirements for a transfer, assignment, or sale of permit rights at 30 CFR 774.17. For example, the proposed rule changes did not include counterpart provisions to 30 CFR 774.17(b)(2) about advertisement requirements for newly filed applications; subsection (d) about criteria for approval by the regulatory authority that allows a permittee to transfer, assign, or sell permit rights to a successor; and subsection (e) about notification requirements.

In addition, the language in W.S. section 35-11-408 and subsections (b)(ii)(A) and (B) of Wyoming's rules all refer to a “potential transferee” and do not address the assignment or sale of permit rights. OSMRE noted that Wyoming neither defines “potential transferee” in its rules nor has a counterpart to the Federal definition of “successor in interest” at 30 CFR 701.5 as it relates to TAS in 30 CFR 774.17. As a result, we required Wyoming to submit counterpart provisions to the specific TAS requirements at 30 CFR 774.17(a)-(f) (OSMRE's 2000 Rule, 65 FR 79852, 79668 (Dec. 19, 2000) and OSMRE's 2007 Rule, 72 FR 68000, 68030), as well as a counterpart to the Federal definition of “successor in interest” at 30 CFR 701.5.

In response, Wyoming proposes counterpart rules to the specific TAS requirements at 30 CFR 774.17(a)-(f). Wyoming's existing rule at Chapter 12, Section 1(b), the revisions which were approved in the December 7, 2017, Federal Register document, is the counterpart provision to 30 CFR 774.17(b) about application requirements for approval of the transfer, assignment, or sale of permit rights. Chapter 12, Section 1(b), states, in pertinent part, that all procedural requirements of the Act and the regulations relating to approval or disapproval of permit applications must, unless otherwise provided, apply to permit transfer, assignment, or sale of permit rights. In addition, Wyoming's general permit application requirements at Chapter 2, Section 1(a), state that all applications must be filed in a format required by the Administrator of the Land Quality Division and must include, at a minimum, all information required by the Act. Further, subsection (b) requires that information set forth in the application must be current and must be presented clearly and concisely. OSMRE interprets these existing State rules, taken together, as being counterpart provisions to the Federal regulations at 30 CFR 774.17(b)(1)(ii), which require an applicant for approval of the transfer, assignment, or sale of permit rights to provide the regulatory authority with an application that includes a brief description of the proposed action requiring approval.

Wyoming next proposes to revise Chapter 12, Section 1(b)(ii), to be consistent with the Federal regulations at 30 CFR 774.17(a) by applying the requirements imposed by W.S. section 35-11-408 and the section to a permit transfer, assignment, or sale of permit rights. Revised Section 1(b)(ii) also includes a definition for the previously undefined term “potential transferee,” the language for which is identical to the Federal definition of “successor in interest.”

Wyoming's existing regulation at Chapter 12, Section 1(b)(ii)(A), is the counterpart to 30 CFR 774.17(b)(3), which requires an applicant [potential transferee] for approval of the transfer, assignment, or sale of permit rights to obtain appropriate performance bond coverage in an amount sufficient to cover the proposed operations. As it did in the previous rulemaking action (WY-045-FOR), Wyoming again proposes to revise its rules at Chapter 12, Section 1(b)(ii)(B), for applications for a permit transfer, assignment, or sale of permit rights by adding a cross reference to Wyoming's regulations at Chapter 2, Section 2(a)(i) through (iii), which is the counterpart to 30 CFR part 778 about permit application requirements for all legal, financial, compliance, and related information. Wyoming also adds language requiring that a potential transferee's statement of qualifications must include the name, address and permit number of the existing permit holder. Wyoming's proposed revisions to Chapter 12, Section 1(b)(ii)(B), are consistent with the TAS application requirements set forth at 30 CFR 774.17(b)(1)(i) and (iii).

In addition, Wyoming proposes new substantively identical State counterpart provisions to the Federal regulations in the Code of Wyoming Rules at Chapter 12, Section 1(b)(ii)(C), pertaining to advertisement requirements for newly filed permit transfer, assignment or sale of permit rights applications found at 30 CFR 774.17(b)(2); subsection (D) regarding public participation requirements allowing any person having an interest, which is or may be adversely affected by a decision on TAS, to submit written comments on the application, similar to the provisions in 30 CFR 774.17(c); subsections (E)(I)-(III) concerning criteria for approval by the regulatory authority that allows a permittee to transfer, assign, or sell permit rights to a successor in interest [potential transferee] similar to the provisions in 30 CFR 774.17(d)(1)-(3); subsections (F)(I)-(II) pertaining to notification requirements as they apply to applications for TAS, similar to the provisions in 30 CFR 774.17(e)(i)-(ii); and subsection (G) regarding continued operation under existing permit that requires a successor in interest [potential transferee] to assume the liability and reclamation responsibilities of the existing permit and to conduct the surface coal mining and reclamation operations in full compliance with the Act, the regulatory program, and the terms and conditions of the existing permit, unless the applicant has obtained a new or revised permit under the Environmental Quality Act and the Division's rules and regulations similar to the provisions in 30 CFR 774.17(f).

Wyoming's revised and newly proposed rules at Chapter 12, Section 1(b)(ii)(B), (E), (F), and (G), use the previously discussed State term “potential transferee,” rather than the Federal term “successor in interest.” In addition, the terms “Division” and “Administrator” are used instead of the term “regulatory authority” in the revised and newly proposed State rules at Chapter 12, Section 1(b)(ii)(D), (E), and (F). Otherwise, Wyoming's proposed rule language is substantively identical to the aforementioned counterpart Federal provisions.

Based on the discussion above, we are approving Wyoming's proposed definition of “potential transferee” at Chapter 12, Section 1(b)(ii), as the State counterpart to the identical Federal definition of “successor in interest.” We also find that Wyoming's proposed revisions to its existing rules at Chapter 12, Section 1(b)(ii)(B), as well as the newly proposed rules at subsections (C) through (G) are consistent with and no less effective than the Federal regulations at 30 CFR 774.17(a)-(f), and satisfy the requirements specified in Item I of OSMRE's October 2, 2009, 732 letter. Accordingly, we are approving them.

OSMRE asked for public comments on the amendment (Administrative Record Document ID No. OSM-2014-0007). OSMRE did not receive any public comments or a request to hold a public meeting or public hearing.

Under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA (30 U.S.C. 1253), we requested comments on the amendment from various Federal agencies concerned with or having special expertise relevant to the Wyoming program amendment (Administrative Record No. WY-51-03). We received comments from two Federal Agencies.

The National Park Service (NPS) commented in a November 3, 2014, email response (Administrative Record Document ID No. OSM-2014-0007-0006), and the Mine Safety and Health Administration (MSHA) commented in a November 7, 2014, letter (Administrative Record Document ID No. OSM-2014-0007-0005). The NPS responded that it had reviewed the project and did not find it necessary to comment at this time. MSHA responded that it reviewed the formal State program amendment and had no comments to the proposed changes to the State's statute as written.

Under 30 CFR 732.17(h)(11)(i) and (ii), we are required to seek the views of the EPA on the program amendment and obtain the written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq.). Under 30 CFR 732.17(h)(11)(i), OSMRE requested comments on the amendment from the EPA (Administrative Record No. WY-51-03). EPA did not respond to our request. Because the amendment does not relate to air or water quality standards, written concurrence from the EPA is not necessary.

Under 30 CFR 732.17(h)(4), we are required to request comments from the SHPO and ACHP on amendments that may have an effect on historic properties. Although the amendment will not have an effect on historic properties, on October 8, 2014, we requested comments on Wyoming's amendment from the SHPO and ACHP (Administrative Record Nos. WY-51-04 and WY-51-05), but neither responded to our request.

Based on the above findings, we approve Wyoming's September 30, 2014, amendment.

To implement this decision, we are amending the Federal regulations, at 30 CFR part 950, which codify decisions concerning the Wyoming program. In accordance with the Administrative Procedure Act, this rule will take effect 30 days after the date of publication. Section 503(a) of SMCRA (30 U.S.C. 1253) requires that the State's program demonstrates that the State has the capability of carrying out the provisions of the Act and meeting its purposes. SMCRA requires consistency of State and Federal standards.

This rule would not have effect a taking of private property or otherwise have taking implications that would result in public property being taken for government use without just compensation under the law. Therefore, a takings implication assessment is not required. This determination is based on an analysis of the corresponding Federal regulations.

Executive Order 12866 provides that the Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB) will review all significant rules. Pursuant to OMB guidance, dated October 12, 1993, the approval of state program amendments is exempted from OMB review under Executive Order 12866. Executive Order 13563, which reaffirms and supplements Executive Order 12866, retains this exemption.

State program amendments are not regulatory actions under Executive Order 13771 because they are exempt from review under Executive Order 12866.

The Department of the Interior has reviewed this rule as required by Section 3 of Executive Order 12988. The Department determined that this Federal Register document meets the criteria of Section 3 of Executive Order 12988, which is intended to ensure that the agency review its legislation and proposed regulations to eliminate drafting errors and ambiguity; that the agency write its legislation and regulations to minimize litigation; and that the agency's legislation and regulations provide a clear legal standard for affected conduct, rather than a general standard, and promote simplification and burden reduction. Because Section 3 focuses on the quality of Federal legislation and regulations, the Department limited its review under this Executive Order to the quality of this Federal Register document and to changes to the Federal regulations. The review under this Executive Order did not extend to the language of the State regulatory program or to the program amendment that the State of Wyoming drafted.

This rule is not a “[p]olicy that [has] Federalism implications” as defined by section 1(a) of Executive Order 13132 because it does not have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Instead, this rule approves an amendment to the Wyoming program submitted and drafted by that State. OSMRE reviewed the submission with fundamental federalism principles in mind, as set forth in sections 2 and 3 of the Executive order, and with the principles of cooperative federalism set forth in SMCRA. See, e.g., 30 U.S.C. 1201(f). As such, pursuant to section 503(a)(1) an (7) (30 U.S.C. 1253(a)(1) and (7)), OSMRE reviewed the program amendment to ensure that it is “in accordance with” the requirements of SMCRA and is “consistent with” the regulations issued by the Secretary pursuant to SMCRA.

The Department of the Interior strives to strengthen its government-to-government relationship with Tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in Executive Order 13175, and have determined that it has no substantial direct effects on federally recognized Tribes or on the distribution of power and responsibilities between the Federal Government and Tribes. Therefore, consultation under the Department's tribal consultation policy is not required. The basis for this determination is that our decision is on the Wyoming program that does not include Tribal lands or regulation of activities on Tribal lands. Tribal lands are regulated independently under the applicable, approved Federal program.

Executive Order 13211 requires agencies to prepare a Statement of Energy Effects for a rulemaking that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866, and is not a significant energy action under the definition in Executive Order 13211, a Statement of Energy Effects is not required.

This rule is not subject to Executive Order 13045 because this is not an economically significant regulatory action as defined by Executive Order 12866; and this action does not address environmental health or safety risks disproportionately affecting children.

Consistent with sections 501(a) and 702(d) of SMCRA (30 U.S.C. 1251(a) and 1292(d), respectively) and the U.S. Department of the Interior Departmental Manual, part 516, section 13.5(A), State program amendments are not major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C).

Section 12(d) of the National Technology Transfer and Advancement Act (15 U.S.C. 3701 et seq.) directs OSMRE to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. (OMB Circular A-119 at p. 14). This action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with SMCRA.

This rule does not include requests and requirements of an individual, partnership, or corporation to obtain information and report it to a Federal agency. As this rule does not contain information collection requirements, a submission to OMB under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) is not required.

This rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The State submittal, which is the subject of this rule, is based upon corresponding Federal regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. In making the determination as to whether this rule would have a significant economic impact, the Department relied upon the data and assumptions for the corresponding Federal regulations.

This rule is not a major rule under 5 U.S.C. 804(2), of the Small Business Regulatory Enforcement Fairness Act. This rule: (a) Does not have an annual effect on the economy of $100 million; (b) will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S. based enterprises to compete with foreign-based enterprises. This determination is based on an analysis of the corresponding Federal regulations, which were determined not to constitute a major rule.

This rule does not impose an unfunded mandate on State, local, or Tribal governments, or the private sector of more than $100 million per year. This rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. This determination is based on an analysis of the corresponding Federal regulations, which were determined not to impose an unfunded mandate. Therefore, a statement containing the information required by the Unfunded mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.

For the reasons set out in the preamble, 30 CFR part 950 is amended as set forth below:

Throughout this document “we,” “us,” and “our” refer to the EPA.

Starting January 1, 2015, large electricity generating units (EGUs) in Missouri were required under a Federal Implementation Plan (FIP) to participate in CSAPR Federal trading programs for SO2 and annual NOX emissions to address Missouri's obligations under CAA section 110(a)(2)(D)(i)(I) (the good neighbor provision) with respect to the 1997 and 2006 PM2.5 NAAQS. At the same time, the EPA stopped administering Missouri's previous CAIR state trading programs for SO2 and annual NOX. See 76 FR 48208 (August 8, 2011).

The CSAPR regulations at 40 CFR 52.38 and 52.39 allow states to adopt either “abbreviated” CSAPR SIP revisions that modify emission allowance allocations but leave the CSAPR FIPs in place or “full” CSAPR SIP revisions that contain complete CSAPR state trading program rules. Approval of a full CSAPR SIP revision (but not an abbreviated CSAPR SIP revision) results in automatic withdrawal of the corresponding CSAPR FIP requirements and satisfies the State's good neighbor obligations to the same extent as the FIP requirements being replaced. See, e.g., 40 CFR 52.38(b)(10)(i). On June 28, 2016, the EPA approved an abbreviated CSAPR SIP revision for Missouri adopting State-determined allocation methodologies for emission allowances under the CSAPR Federal SO2 and annual NOX trading programs but otherwise leaving the Federal trading programs in place. See 81 FR 41838 (June 28, 2016).

Starting May 1, 2017, pursuant to a FIP issued under the CSAPR Update, large EGUs in Missouri were required to participate in a new CSAPR Federal trading program for ozone season NOX emissions to at least partially address Missouri's good neighbor obligation with respect to the 2008 ozone NAAQS. These FIP requirements also fully addressed Missouri's good neighbor obligation with respect to the 1997 ozone NAAQS that had previously been partially addressed by the EGUs' participation in an earlier CSAPR Federal trading program. See 81 FR 74504 (October 26, 2016).1

On July 30, 2019, the EPA proposed approval of revisions to the Missouri SIP in the Federal Register to remove from the SIP the State's CAIR trading program rules for SO2 and annual NOX. The EPA did not propose action on the State's request to also remove from the SIP the State's CAIR trading program rule for ozone season NOX. In the same Federal Register document, EPA also proposed to approve Missouri's full CSAPR SIP revision adopting complete CSAPR state trading program rules for SO2, annual NOX, and ozone season NOX to replace the CSAPR Federal trading program rules. See 84 FR 36859. The EPA solicited comments on the proposed revision to Missouri's SIP, and received no comments.

The EPA is approving a revision to Missouri's SIP by approving the State's request to remove 10 CSR 10-6.362 Clean Air Interstate Rule Annual NOX Trading Program and 10 CSR 10-6.366 Clean Air Interstate Rule Annual SO2 Trading Program, which implemented the State's CAIR annual NOX and SO2 trading programs. The EPA is also finalizing approval of Missouri's revisions to 10 CSR 10-6.372 Cross-State Air Pollution Rule NOX Annual Trading Program and 10 CSR 10-6.376 Cross-State Air Pollution Rule SO2 Group 1 Trading Program that add to the State's previously approved allocation provisions all the other provisions necessary for complete state trading programs. Finally, the EPA is also finalizing approval of Missouri's addition of 10 CSR 10-6.374 Cross-State Air Pollution Rule NOX Ozone Season Group 2 Trading Program.

A discussion of the CSAPR regulations at 40 CFR 52.38 and 52.39 governing full and abbreviated CSAPR SIP revisions can be found in the EPA's June 28, 2016 approval of Missouri's previous abbreviated CSAPR SIP revision for SO2 and annual NOX. See 81 FR 41838. A detailed discussion of Missouri's current SIP revision was provided in the EPA's July 30, 2019, proposed rule. See 84 FR 36859.

The State's SIP revision meets the requirements for approval of full CSAPR SIPs under 40 CFR 52.38 and 52.39. Missouri's CSAPR state trading program rules incorporate by reference the corresponding provisions of the CSAPR Federal trading program rules at 40 CFR part 97, subparts AAAAA, CCCCC, and EEEEE, with two exceptions. First, the State has retained the allocation provisions for SO2 and annual NOX allowances from the State's previous abbreviated CSAPR SIP instead of adopting the default Federal allocation provisions for those allowances. Second, consistent with the CSAPR SIP approval criteria, the State's rules do not incorporate the Federal rule provisions governing allocation of allowances to new units in Indian country. Missouri's CSAPR state trading program rules are complete, and the State has not adopted any other substantive changes to the CSAPR Federal trading program regulations.

The State submission has met the public notice requirements for SIP submissions in accordance with 40 CFR 51.102. The submission also satisfied the completeness criteria of 40 CFR part 51, appendix V. The State provided public notice on the March 7, 2019, SIP revisions from August 24, 2018 to October 4, 2018 and received seven comments from the EPA during the Regulatory Impact Review. The EPA's comments are in the docket for this action. Missouri amended the rule in response to the comments and the EPA did not comment further. In addition, as explained above, the revision meets the substantive SIP requirements of the CAA, including section 110 and implementing regulations.

We are taking final action to approve the removal of 10 CSR 10-6.362 Clean Air Interstate Rule Annual NOX Trading Program and 10 CSR 10-6.366 Clean Air Interstate Rule Annual SO2 Trading Program from the SIP. The EPA is also taking final action to approve into the SIP the revisions to 10 CSR 10-6.372 CSAPR NOX Annual Trading Program and 10 CSR 10-6.376 CSAPR SO2 Group 1 Trading Program and the addition of 10 CSR 10-6.374 CSAPR NOX Ozone Season Group 2 Trading Program. As a result of this approval, the FIP requirements for Missouri EGUs to participate in the corresponding CSAPR Federal trading programs are automatically terminated. Approval of this SIP revision fully satisfies Missouri's good neighbor obligations with respect to the 1997 and 2006 PM2.5 NAAQS and the 1997 ozone NAAQS and at least partially satisfies Missouri's good neighbor obligations with respect to the 2008 ozone NAAQS.

In this document, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the Missouri Regulations described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 7 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Therefore, these materials have been approved by the EPA for inclusion in the State Implementation Plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of the EPA's approval, and will be incorporated by reference in the next update to the SIP compilation.2

Also, in this document, as described in the amendments to 40 CFR part 52 set forth below, the EPA is removing provisions of the EPA-Approved Missouri Regulations and Statutes from the Missouri State Implementation Plan, which is incorporated by reference in accordance with the requirements of 1 CFR part 51.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866.

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of the National Technology Transfer and Advancement Act (NTTA) because this rulemaking does not involve technical standards; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 3, 2020. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2)).

For the reasons stated in the preamble, the EPA amends 40 CFR part 52 as set forth below:

The Foundation operates under the National Foundation on the Arts and the Humanities Act of 1965, as amended (20 U.S.C. 951 et seq.), and consists of NEA, NEH, IMLS, and FCAH (collectively, the “Foundation's constituent agencies”). The Privacy Act regulations published at part 1115 within Subchapter A of 45 CFR Chapter XI apply to the entire Foundation.

As of August 19, 2019, however, the Foundation's Privacy Act regulations are obsolete because NEA, NEH, and IMLS have each adopted their own, agency-specific regulations, and FCAH is not required to implement Privacy Act regulations. On that date, NEH added NEH-specific Privacy Act regulations to 45 CFR Chapter XI, Subchapter D (45 CFR part 1169), replacing the Foundation's Privacy Act regulations with respect to NEH. NEA and IMLS had previously added NEA- and IMLS-specific Privacy Act regulations to 45 CFR, subchapters B and E (45 CFR parts 1159 and 1182), respectively, which replaced the Foundation's Privacy Act regulations with respect to NEA and IMLS. FCAH relies upon NEA and NEH for its administration and does not maintain any systems of records of its own; thus, it has no need or obligation to publish Privacy Act regulations. See 5 U.S.C. 552a(f) (requiring that only an agency that “maintains a system of records shall promulgate rules” implementing the Privacy Act).

Because the Foundation's Privacy Act regulations are now obsolete, NEA, NEH, and IMLS are issuing this joint final rule to remove them.

Consistent with the Administrative Procedure Act (APA), the Foundation's constituent agencies find that there is “good cause” to remove the Foundation's obsolete Privacy Act regulations without public notice and comment. See 5 U.S.C. 553(b)(3)(B). Public notice and comment is unnecessary because this final rule is a minor, non-controversial technical amendment that is unlikely to attract public comment. Moreover, NEA, NEH, and IMLS previously issued their own Privacy Act regulations subject to public notice and comment, and at that time they indicated that the Foundation's regulations would no longer apply to their specific agency. See 84 FR 34788 (July 19, 2019); 65 FR 46371 (July 28, 2000); and 71 FR 6374 (February 8, 2006).

In addition, the Foundation's constituent agencies find “good cause” to issue this final rule without a delayed effective date. See 5 U.S.C. 553(d)(8). A delayed effective date is not necessary in this instance because NEA's, NEH's, and IMLS's agency-specific regulations are already in effect, and thus the public does not need advance notice to prepare for the removal of the Foundation's obsolete regulations.

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

This action is not expected to be an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.

This action does not impose an information collection burden under the PRA. This action contains no provisions constituting a collection of information under the PRA.

This action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities.

This action does not contain any unfunded mandate as described in the UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments.

This final rule does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This final rule does not have tribal implications as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this action.

On June 14, 2018, the National Association of Reversionary Property Owners (NARPO) filed a petition requesting that the Board consider issuing three rules related to 16 U.S.C. 1247(d), the codification of section 8(d) of the National Trails System Act (Trails Act), Public Law 90-543, section 8, 82 Stat. 919, 925 (1968) (codified, as amended, at 16 U.S.C. 1241-1251). Specifically, NARPO asked that the Board open a proceeding to consider rules that would: (1) Limit the number of 180-day extensions of a trail use negotiating period to six; (2) require a rail carrier or trail sponsor negotiating an interim trail use agreement to send notice of the issuance of a Certificate of Interim Trail Use or Abandonment (CITU) or Notice of Interim Trail Use or Abandonment (NITU) 1 to landowners adjacent to the right-of-way covered by the CITU or NITU; and (3) require all entities, including government entities, filing a request for a CITU or NITU, or extension thereof, to pay a filing fee. After considering NARPO's petition for rulemaking and the comments received, the Board granted the petition in part as it pertained to NARPO's first request and instituted a rulemaking proceeding in Limiting Extensions of Trail Use Negotiating Periods, Docket No. EP 749 (Sub-No. 1), to propose modifications to 49 CFR 1152.29 that would limit the number of 180-day extensions of the interim trail use/railbanking negotiating period to a maximum of six extensions, absent extraordinary circumstances. Nat'l Ass'n of Reversionary Prop. Owners—Pet. for Rulemaking (NPR), EP 749 et al., (STB served Oct. 2, 2018) (83 FR 50,326). The Board, however, denied NARPO's petition with regard to its other requests.

On March 22, 2019, after the comment period closed in Docket No. EP 749 (Sub-No. 1), Rails-to-Trails Conservancy (RTC) petitioned the Board in Rails-to-Trails Conservancy—Petition for Rulemaking, Docket No. EP 753, to institute a rulemaking proceeding to further revise section 1152.29 to establish a one-year period for any initial interim trail use negotiating period and codify the Board's authority to grant extensions of the negotiating period for good cause shown. Because Docket Nos. EP 479 (Sub-No. 1) and EP 753 both pertain to the same regulation, section 1152.29, and concern procedures for the extension of interim trail use negotiation/railbanking negotiating periods, the Board consolidated the two proceedings. After carefully reviewing all the comments on the NPR and the RTC petition, the Board, in a supplemental notice of proposed rulemaking, proposed to establish a one-year period for any initial interim trail use/railbanking negotiating period, permit up to three one-year extensions if the trail sponsor and railroad agree, and provide that requests for additional one-year extensions (beyond three extensions of the initial period) would not be favored but may be granted if the trail sponsor and railroad agree and good cause is shown. Limiting Extensions of Trail Use Negotiating Periods (SNPR), EP 749 (Sub-No. 1) et al., slip op. at 6, 8-9 (STB served June 6, 2019) (84 FR 26,387).

The Board received comments from over 100 parties in response to the SNPR. After consideration of the comments, the Board is adopting a final rule amending its regulations related to the Trails Act as explained below.

Pursuant to the Trails Act, the Board must “preserve established railroad rights-of-way for future reactivation of rail service” by prohibiting abandonment where a trail sponsor agrees to assume certain responsibilities for the right-of-way for use in the interim as a trail. 16 U.S.C. 1247(d); Nat'l Wildlife Fed'n v. ICC, 850 F.2d 694, 699-702 (D.C. Cir. 1988). The statute expressly provides that “if such interim use is subject to restoration or reconstruction for railroad purposes, such interim use shall not be treated, for [any] purposes . . . as an abandonment.” section 1247(d). Instead, the right-of-way is “railbanked,” 2 which means that the railroad is relieved of the current obligation to provide service over the line but that the railroad (or any other approved rail service provider,3 in appropriate circumstances) may reassert control over the right-of-way to restore service on the line in the future. See Birt, 90 F.3d at 583; Iowa Power—Const. Exemption—Council Bluffs, Iowa, 8 I.C.C.2d 858, 866-67 (1990); 49 CFR 1152.29.4

The Trails Act is invoked when a prospective trail sponsor files a request with the Board to railbank a line that a rail carrier has proposed to abandon. The request must include a statement of willingness to assume responsibility for management of, legal liability for, and payment of taxes on, the right-of-way and an acknowledgement that interim trail use/railbanking is subject to possible future reconstruction and reactivation of rail service at any time. 49 CFR 1152.29(a).5 If the railroad indicates its willingness to negotiate an interim trail use/railbanking agreement for the line, the Board will issue a CITU or NITU. 49 CFR 1152.29(c)(1), (d)(1). Currently, pursuant to the Board's regulations, a CITU or NITU grants parties a 180-day period (which can be extended by Board order) to negotiate an interim trail use/railbanking agreement. Id.; Birt, 90 F.3d at 583, 588-90 (affirming the agency's authority to grant reasonable extensions of the Trails Act negotiating period). See also Grantwood Vill. v. Mo. Pac. R.R., 95 F.3d 654, 659 (8th Cir. 1996) (stating that the ICC “was free to extend [the 180-day CITU or NITU] time period for an agreement”).

If parties reach an agreement during the interim trail use/railbanking negotiating period, the CITU or NITU automatically authorizes interim trail use/railbanking. Preseault, 494 U.S. at 7 n.5. If no interim trail use/railbanking agreement is reached by the expiration of the CITU or NITU 180-day negotiation period (and any extension thereof), the CITU or NITU authorizes the railroad to exercise its option to “fully abandon” the line by consummating the abandonment, without further action by the agency, provided that there are no legal or regulatory barriers to consummation. Birt, 90 F.3d at 583; see also 49 CFR 1152.29(c)(1), (d)(1), (e)(2); Consummation of Rail Line Abans. That Are Subject to Historic Pres. & Other Envtl. Conditions, EP 678, slip op. at 3-4 (STB served Apr. 23, 2008).6

As noted above, RTC petitioned the Board to institute a rulemaking proceeding to revise 49 CFR 1152.29 to establish a one-year period for any initial interim trail use negotiating period and codify the Board's authority to grant extensions of the negotiating period for good cause shown. RTC states that, since 1987, it has tracked all abandonment filings by the Board-assigned docket number and filing and decision dates, and has included in its database, among other things, information on whether the Board issued a CITU or NITU to allow interim trail use/railbanking negotiations between a prospective trail sponsor and a railroad. (RTC Pet. 2.) RTC further notes that, as of November 2018, its database contained records for 718 issued CITUs/NITUs dating from 1987. (Id. at 6.) RTC asserts that, of the 718 CITUs/NITUs, at least 393 corridors—representing 5,895.53 miles of right-of-way—were successfully railbanked and remain railbanked today. (Id. at 7.) RTC further asserts that, of the 370 railbanked corridors for which its database indicated the length of negotiations,7 289 railbanking agreements (78.1%) required more than 180 days to negotiate, while approximately half (183 of the 370 corridors) were negotiated within one year. (RTC Pet. 7.) RTC, therefore, argues that its data supports the conclusion that an initial railbanking negotiating period of one year, rather than 180 days, would more closely reflect the actual length of time required to complete railbanking negotiations. (Id.) After considering the comments filed in response to the Board's NPR, and the comments filed in response to RTC's petition, the Board issued the SNPR, proposing a rule establishing a one-year initial period for interim trail use/railbanking negotiations.

Most of the parties commenting on the SNPR 8 support the Board's proposal, asserting that the proposal effectively balances the interests of all affected parties and stakeholders. Many agree that establishing a one-year interim trail use/railbanking negotiating period would reduce burdens on prospective trail sponsors and railroads related to the filing of extension requests, reduce the number of filings requiring Board action (thereby conserving Board resources), and more closely reflect the actual time needed to complete interim trail use/railbanking negotiations. (See, e.g., Hunter Area Trail Coalition Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.; City of St. Charles Comments 1, July 3, 2019, EP 749 (Sub-No. 1) et al.)

Few commenters oppose this aspect of the Board's SNPR proposal. One commenter argues that negotiations should be open-ended to allow parties more time to finalize their agreements, (see Stimson Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.), but, as discussed below, the Board seeks to bring administrative finality to the interim trail use/railbanking negotiating process. Two commenters express general concerns that extended interim trail use/railbanking negotiations and trail use harm property owners, and, without further explanation beyond those general concerns, also seem to oppose the Board's proposal to establish one-year negotiating periods. (See Pennsylvania Transit Expansion Coalition Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.; Presnell Comments 1, June 19, 2019, EP 749 (Sub-No. 1) et al.) The Board, however, is taking action here to protect against unduly protracted interim trail use/railbanking negotiating periods and is unpersuaded by the few comments that raise general concerns about the Board's proposed one-year initial trail use/railbanking negotiating period.

In light of the data from RTC and for the reasons cited in the many comments received in support of the Board's SNPR proposal, the Board will adopt its proposed rule changing the duration of the initial interim trail use/railbanking negotiating period to one year. This change would reduce burdens on parties before the Board, conserve Board resources, and reflect more closely the actual length of time in which many interim trail use/railbanking negotiations are completed.

In the SNPR, EP 749 (Sub-No. 1) et al., slip op. at 8-9, the Board sought comment on whether it should limit the number of extensions of an interim trail use/railbanking negotiating period to three one-year extensions, unless good cause for additional extension(s) is shown.

Most commenters support the Board's proposed rule that would permit up to three one-year extensions of the interim trail use/railbanking negotiating period. Commenters, however, disagree as to whether a “good cause” standard of review or an “extraordinary circumstances” standard should apply to additional one-year extensions requested beyond the first three. Landowners and related interested parties generally oppose any rule that would extend the interim trail use/railbanking negotiating period for “good cause” and would prefer an “extraordinary circumstances” standard.9 (See, e.g., Rahmer Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.; Borek Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.; West Comments 1, June 27, 2019, EP 749 (Sub-No. 1) et al.) Many of these commenters argue that a “good cause” standard of review is too vague, lenient, subjective, or broad. (See, e.g., Falcsik Comments 1, July 3, 2019, EP 749 (Sub-No. 1) et al., Watt Comments 1, June 27, 2019, EP 749 (Sub-No. 1) et al.; Pennsylvania Transit Expansion Coalition Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.) Many commenters that support an “extraordinary circumstances” standard also support the inclusion of language stating that requests for extensions are not favored. (See, e.g., Falcsik Comments 2, July 3, 2019, EP 749 (Sub-No. 1) et al.)

Trail proponents, which include government entities, individuals, and other interested parties, support the Board's proposal, which was sought by RTC to require a showing of “good cause” for extensions beyond the first three. (See, e.g., Alabama Trails Commission Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.; Humboldt Trails Council Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.; Capps Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.; City of Chicago Comments 1, July 5, 2019, EP 749 (Sub-No. 1) et al.) Most trail proponents urge the Board to adopt the regulations proposed in the SNPR, including the “good cause” standard for granting extensions beyond the first three, but request that the Board eliminate the proposed language that more than three extensions are “not favored.” According to some, the inclusion of this language would undermine the purposes of the Trails Act based on what they characterize as “vague and unsubstantiated concerns about reducing `uncertainty for some property owners.'” (See, e.g., Alabama Trails Commission Comments 1, July 8, 2019, EP 749 (Sub-No. 1) et al.; Hummingbird Trail Alliance Comments 1, June 27, 2019, EP 749 (Sub-No. 1) et al.) RTC also argues that the “not favored” language is not supported by any demonstrated need to discourage extension requests, would create a higher standard governing extensions of ordinary regulatory deadlines that is unprecedented in the Board's regulations, and would create uncertainty and invite baseless challenges that could delay and discourage railbanking negotiations. (RTC Comments 1, July 8, 2019, (filing ID 248138) EP 749 (Sub-No. 1).)

The Board has considered the comments received following issuance of the NPR and the SNPR, and it continues to conclude that reasonably limiting the number of extensions of the interim trail use/railbanking negotiating period would foster administrative efficiency, clarity, and finality. See NPR, EP 749 et al., slip op. at 5. Moreover, having reviewed all the comments with respect to the different standards of review for extension requests beyond three, the Board finds the “extraordinary circumstances” standard originally proposed in the NPR—together with the proposed language in the SNPR that more than three extensions are “not favored”—to be more consistent with the Board's intent than the “good cause” standard of review proposed in the SNPR. The Board desires to bring more efficiency, clarity, and finality to the interim trail use/railbanking process as Trails Act negotiations at times have gone on for many years. NPR, EP 749 et al., slip op. at 5. An “extraordinary circumstances” standard would achieve this goal more effectively than a more permissive “good cause” standard by making clear that extensions beyond the third would be unusual and by giving participants in Trails Act proceedings a clear understanding of the appropriate timeframe for reaching an interim trail use/railbanking agreement, as well as a more definitive deadline under which to work.10

Advocates of the “good cause” standard assume that the more stringent “extraordinary circumstances” standard would result in legitimate, diligently pursued negotiations being truncated, preventing consummation of trail use agreements and frustrating the policy of the Trails Act to encourage railbanking. (See, e.g., RTC Comments 5-6, 9-10, July 8, 2019, (filing ID 248138) EP 749 (Sub-No. 1)). Similarly, many of the commenters who oppose language stating that additional extensions beyond three “are not favored” argue that such language suggests an unnecessary presumption against granting additional extensions. (See, e.g., Friends of the Cheat Comments 1-2, July 16, 2019, EP 749 (Sub-No. 1) et al.; Transportation for America Comments 1; June 21, 2019, EP 749 (Sub-No. 1) et al.) Indeed, these commenters appear to support a “good cause” standard precisely because that standard would be liberal and would allow for potentially open-ended extensions. (See, e.g., RTC Pet. 10-12.)

However, adopting a more liberal standard would undercut the Board's goals in this rulemaking. The Board must balance the need to allow parties enough time to complete their negotiations and finalize an interim trail use/railbanking agreement with the need to conclude the Trails Act process within a reasonable amount of time. Four years is a significant amount of time to reach an interim trail use/railbanking agreement. Based on the record here, the Board does not anticipate that the “extraordinary circumstances” standard will impair the ability of prospective trail sponsors and railroads, operating diligently and in good faith, to successfully conclude interim trail use/railbanking agreements. The record supports the conclusion that an “extraordinary circumstances” standard would be implicated in only a relatively small percentage of cases. Based on RTC's data, 327 out of 370 negotiated Trails Act agreements (approximately 88%) have been reached within four years—that is, before an “extraordinary circumstances” requirement would even apply under the rule adopted here. (See RTC Pet., Decl. Griffen 2.) Therefore, in the vast majority of cases, parties who have reached an interim trail use/railbanking agreement have been able to do so within a four-year period such as that established by this final rule (a one-year initial negotiation period followed by three one-year extensions). The Board anticipates that, with a clearer understanding of the deadlines that will apply under the final rule, parties would be better incentivized to conclude their negotiations and enter into an agreement in a more timely manner, which would both give landowners more certainty by providing a timeline for the conclusion of negotiations and conserve Board resources. Moreover, where, due to extraordinary circumstances, parties are unable to finalize an agreement within four years, they will retain the ability to demonstrate those extraordinary circumstances to the Board and obtain further extensions. Given that the Board does not anticipate this rule would impair the ability of trail sponsors and railroads to successfully conclude interim trail use/railbanking agreements, the final rule is consistent with the underlying purposes of the Trails Act: To preserve established railroad rights-of-way for future reactivation of rail service and encourage their use in the interim as recreational trails. Preseault, 494 U.S. at 17-18.

RTC argues that there is little precedent in the Board's regulations or regulatory practice to adopt a standard that strongly disfavors extensions, regardless of “any good cause for the requests.” (RTC Comments 11, Nov. 21, 2018, EP 749 (Sub-No. 1).) According to RTC, the Board routinely waives its regulatory deadlines for other stakeholders based on “good cause shown.” (Id. (citing Buckingham Branch R.R.—Change in Operators Exemption—Cassatt Mgmt., LLC, FD 36202 (STB served July 31, 2018).) However, based on the Board's experience with Trails Act negotiations, some of which have gone on for more than a decade, the Board finds that a different, “extraordinary circumstances” standard of review for such cases is warranted and appropriate. As noted above, the Board believes that this standard will improve the efficiency, clarity, and finality of the Trails Act process while balancing the objectives of trail proponents, landowners, railroads, and the agency. It has been long recognized that agencies have broad discretion to manage and control their own dockets and proceedings. See Neighborhood TV Co. v. FCC, 742 F.2d 629, 636 (D.C. Cir. 1984) (“There is a general principle that `[i]t is always within the discretion of a court or an administrative agency to relax or modify its procedural rules adopted for the orderly transaction of business when in a given case the ends of justice require it.'”) (quoting Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 539 (1970)).11 Therefore, the Board may, in its discretion, modify its Trails Act procedures to accomplish the goals set forth in the NPR and SNPR. 12

Finally, in jointly filed comments in response to both the NPR and SNPR, Madison County Mass Transit District and the Iowa Natural Heritage Foundation (MCTD/INHF) argue that the Board's sole basis for any limitation on the CITU or NITU negotiation period is dicta in Birt, 90 F.3d at 589, which notes that NITU extensions “ad infinitum” could have the undesirable effect of “allowing the railroad to stop service without either relinquishing its rights to the easement or putting the right-of-way to productive use.” (MCTD/INHF Comments 6-7, Oct. 25, 2018, EP 749 et al.); MCTD/INHF Comments 6-7, July 5, 2019, EP 749 (Sub-No. 1) et al.) MCTD/INHF asserts that there is no authority in 16 U.S.C. 1247(d) or in rail transportation policy generally to impose any limitations on the NITU negotiating period. (MCTD/INHF Comments 11, Oct. 25, 2018, EP 749 et al.) Similarly, the Missouri Central Railroad Company (MCRR) argues that the Board's proposal is unnecessary given that the Board can and does evaluate extension requests on a case-by-case basis. (MCRR Comments 2, Nov. 1, 2018, EP 749 (Sub-No. 1); MCRR Comments 1, July 2, 2019, EP 749 (Sub-No. 1) et al.) Nevertheless, MCRR states that it understands the need for administrative finality. (MCRR Comments 1, July 2, 2019, EP 749 (Sub-No. 1) et al.)

MCTD/INHF misinterpret Birt. The court in Birt found that the Board's predecessor, the Interstate Commerce Commission (ICC), could, in its discretion, interpret 16 U.S.C. 1247(d) to allow it to grant reasonable extensions of the Trails Act negotiating period. See 90 F.3d at 588-89. That holding is entirely consistent with the Board's determination in the final rule here. Nothing in Birt or the rest of MCTD/INHF's comments provides support for the proposition that the Board may not impose reasonable restrictions on the number of extensions it grants. As noted above, agencies have the discretion to modify procedural rules “when in a given case the ends of justice require it.” See Neighborhood TV, 742 F.2d at 636. Here, as discussed above, adoption of a rule establishing a one-year initial negotiating period, allowing three one-year extensions, and permitting additional one-year extensions if extraordinary circumstances are shown is reasonable and strikes an appropriate balance between the interests of landowners, trail proponents, railroads, and the agency. The final rule will lead to more efficiency, clarity, and finality in the Trails Act process, reducing burdens on parties, conserving Board resources, and providing greater overall certainty, while also providing a reasonable amount of time (at least four years) for railroads and prospective trail sponsors to negotiate voluntary agreements for interim trail use/railbanking.13

In its petition, NARPO requested that the Board require a rail carrier or trail sponsor to “send notice” to adjoining landowners following the issuance of a CITU or NITU. (NARPO Pet. 4.) In the NPR, the Board found that NARPO had not provided a sufficient basis for altering the existing notice requirements. NPR, EP 749 et al., slip op. at 6-7. In its comments in response to the NPR, NARPO asks the Board to further consider NARPO's request to require rail carriers to provide “due process notice” to property owners. (NARPO Reply 1-2, Nov. 20, 2018, EP 749 (Sub-No. 1)). As stated in the NPR, the Board, and its predecessor, the ICC, have repeatedly considered similar notice proposals by NARPO and declined to adopt such a rule. See Nat'l Ass'n of Reversionary Prop. Owners v. STB, 158 F.3d 135 (D.C. Cir. 1998); Nat'l Trails System Act & R.R. Rights-of-Way, EP 702, slip op. at 7-8 (STB served Feb. 16, 2011); Rail Abans.—Use of Rights-of-Way as Trails—Supplemental Trails Act Procedures, EP 274 (Sub-No. 13) (ICC served July 28, 1994). NARPO has provided the Board no basis for altering that position.

NARPO also argues that the Board should “rein in the games the railroads are playing” with NITU extensions and the Section 106 process of the National Historic Preservation Act, 54 U.S.C. 306108. (NARPO Reply 6, Nov. 20, 2018, EP 749 (Sub-No. 1)). According to NARPO, rail carriers use the need to complete the Section 106 process and comply with certain other types of environmental conditions imposed during the environmental review process to extend the time available to consummate abandonments under 49 CFR 1152.29(e)(2)—with the goal that prospective trail sponsors, during such time, can raise the necessary capital to acquire rights-of-way for interim trail use/railbanking. (Id.)

Similarly, certain landowners collectively filed comments arguing that the Board's SNPR omits “a necessary corollary concern to extensions of temporary and permanent trail use negotiating periods.” (Nelson et al. Comments 1, June 28, 2019, EP 749 (Sub-No. 1) et al.) These landowners assert that, if there are limits on the number of extensions of the CITU or NITU negotiating period, there, likewise, “should be a concurrent amendment pertaining to the limitation of consummation of abandonment after these newly enlarged negotiation periods, and the likelihood of the termination/vacation of a NITU.” (Id. at 4.) They propose four amendments to the Board's regulations at section 1152.29(e), governing notices of consummation of abandonments; these proposed changes include a proposal that “a railroad's consummation of abandonment shall automatically occur 180 days after the expiration or vacation of a NITU.” (Id. at 5.)

A notice of consummation is required in every abandonment case in which a railroad decides to exercise its authority to abandon a rail line and thereby terminate the Board's jurisdiction—not just in abandonment proceedings where a trail use condition has been imposed. 49 CFR 1152.29(e)(2); Honey Creek, FD 34869 et al., slip op. at 5. Moreover, certain other conditions commonly imposed in abandonment proceedings to implement provisions of law unrelated to the Trails Act can affect the timing and permissibility of a railroad's filing a notice consummating an abandonment. See Consummation of Rail Line Abans. that are Subject to Historic Pres. & Other Envtl. Conditions, EP 678 (STB served Apr. 23, 2008). Any proposal that would alter or otherwise impact how and when consummation of abandonment can take place is beyond the scope of this proceeding, which relates only to restrictions on the negotiating periods for interim trail use/railbanking, not the broader issues implicated in the consummation of abandonments in general. Thus, the Board declines to address the comments and proposals relating to the filing of a consummation notice under section 1152.29(e).

For the reasons discussed above, and as set forth in the Appendix, the Board is adopting a final rule to amend its regulations to: (1) Provide that the initial term for CITUs or NITUs will be one year (instead of the current 180 days); (2) permit up to three one-year extensions of the initial period if the trail sponsor and the railroad agree; and (3) permit additional one-year extensions if the trail sponsor and the railroad agree and extraordinary circumstances are shown. Requests for additional extensions will not be favored but may be granted if the trail sponsor and railroad agree and “extraordinary circumstances” are shown.14 A showing of “extraordinary circumstances” will depend on the specific facts of each case but might include, for example, specific evidence that necessary financing is imminent or specific evidence of problems or complications demonstrably beyond the negotiators' control that arise in connection with an unusually lengthy, multi-jurisdictional trail. It is unlikely that issues within negotiators' control, such as insurance coverage, title review, appraisal issues, or personnel turnover, will constitute extraordinary circumstances.

The aspect of the final rule establishing a one-year duration for any initial interim trail use/railbanking negotiating period will apply to any new CITU or NITU requested on or after the effective date of the rule. Parties in negotiations under existing CITUs or NITUs on the effective date of these rules who wish to extend their negotiating period will be required to seek extensions of one year, rather than 180 days as is the current common practice (or any other duration). The aspect of the final rule that limits the number of one-year extensions of an interim trail use/railbanking negotiating period to three will apply both to new CITUs or NITUs requested on or after the rule's effective date and to cases where a CITU or NITU was requested before the final rule took effect. In the latter instance, a showing of extraordinary circumstances will be required for any request that would extend the interim trail use/railbanking negotiating period to a date after the four-year anniversary of the issuance of the CITU or NITU (including cases where the existing CITU or NITU already extends beyond that anniversary), unless the request is eligible for the transitional measure described below.

In the NPR, the Board stated that it may more liberally provide additional extensions for extraordinary circumstances in certain instances in which a CITU or NITU is pending when this rule takes effect. NPR, EP 749 et al., slip op. at 8. The Board clarifies now that, as a transitional measure, parties engaged in negotiations under an existing CITU or NITU that was originally issued before February 2, 2017, may request one additional extension of one year, beyond the four-year anniversary of the issuance of the CITU or NITU, without showing extraordinary circumstances.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, generally requires a description and analysis of new rules that would have a significant economic impact on a substantial number of small entities. In drafting a rule, an agency is required to: (1) Assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation's impact; and (3) make the analysis available for public comment. Section 601-604. In its final rule, the agency must either include a final regulatory flexibility analysis, section 604(a), or certify that the proposed rule would not have a “significant impact on a substantial number of small entities,” section 605(b). The impact must be a direct impact on small entities “whose conduct is circumscribed or mandated” by the proposed rule. White Eagle Coop. v. Conner, 553 F.3d 467, 480 (7th Cir. 2009).

In the SNPR, the Board certified under 5 U.S.C. 605(b) that the proposed rule would not have a significant economic impact on a substantial number of small entities within the meaning of the RFA.15 The Board explained that its proposed changes to its regulations would improve the efficiency, clarity, and finality of its interim trail use/railbanking procedures and would not mandate the conduct of small entities. Indeed, the changes proposed are largely procedural and would not have a significant economic impact on Class III rail carriers or prospective trail sponsors (whether as small businesses, not-for-profits, or small governmental jurisdictions) to which the RFA applies. The proposed rules would lengthen, from 180 days to one year, the duration of the initial voluntary interim trail use/railbanking negotiating period and the current typical extension periods, reducing the frequency with which trail sponsors and railroads would need to file extension requests and replies. The Board, therefore, noted that the impact of the proposed rule would be a reduction in the paperwork burden for small entities. Further, the Board asserted that the economic impact of the reduction in paperwork, if any, would be minimal and entirely beneficial to small entities as such entities would have reduced filing burdens associated with negotiating an interim trail use/railbanking agreement. Therefore, the Board certified under 5 U.S.C. 605(b) that these proposed rules, if promulgated, would not have a significant economic impact on a substantial number of small entities within the meaning of the RFA.

The final rule adopted here revises the rules proposed in the SNPR; however, the same basis for the Board's certification of the proposed rule applies to the final rule. Therefore, the Board again certifies under 5 U.S.C. 605(b) that the final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the RFA. A copy of this decision will be served upon the Chief Counsel for Advocacy, Offices of Advocacy, U.S. Small Business Administration, Washington, DC 20416.

In this proceeding, the Board is modifying an existing collection of information that is currently approved by the Office of Management and Budget (OMB) through September 30, 2021, under the collection of Preservation of Rail Service (OMB Control No. 2140-0022). In the SNPR, the Board sought comments pursuant to the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3549, and OMB regulations at 5 CFR 1320.8(d)(3) regarding: (1) Whether the collection of information, as modified in the proposed rule in the Appendix, is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility; (2) the accuracy of the Board's burden estimates; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate. No comments were received pertaining to the collection of this information under the PRA.

This modification to an existing collection will be submitted to OMB for review as required under the PRA, 44 U.S.C. 3507(d), and 5 CFR 1320.11.

Pursuant to the Congressional Review Act, 5 U.S.C. 801-808, the Office of Information and Regulatory Affairs has designated this rule as a non-major rule, as defined by 5 U.S.C. 804(2).

It is ordered:

1. The Board adopts the final rule set forth in this decision. Notice of the final rule will be published in the Federal Register.

2. All pleadings received by the Board as of the date of issuance of this decision are accepted into the record.

3. A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration, Washington, DC 20416.

4. This decision is effective on February 2, 2020.

For the reasons set forth in the preamble, the Surface Transportation Board amends part 1152 of title 49, chapter X, of the Code of Federal Regulations as follows: