[Federal Register Volume 59, Number 103 (Tuesday, May 31, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12566]


[[Page Unknown]]

[Federal Register: May 31, 1994]


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Part II





Department of the Interior





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Office of Surface Mining Reclamation and Enforcement



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30 CFR Parts 795, 870, et al.




Abandoned Mine Land Reclamation Fund Reauthorization Implementation; 
Final Rule
DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 795, 870, 872, 873, 874, 875, 876, and 886

RIN 1029-AB49

 
Abandoned Mine Land Reclamation Fund Reauthorization 
Implementation

AGENCY: Office of Surface Mining Reclamation and Enforcement (OSM), 
Interior.

ACTION: Final rule.

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SUMMARY: The Office of Surface Mining Reclamation and Enforcement (OSM) 
of the U.S. Department of the Interior is issuing final rules to amend 
its abandoned mine land regulations, 30 CFR Subchapter R implementing 
amendments made to Title IV of the Surface Mining Control and 
Reclamation Act (SMCRA) of 1977, by the Omnibus Budget Reconciliation 
Act of 1990 (November 5, 1990) (which included the Abandoned Mine 
Reclamation Act of 1990, as amended), and by the Energy Policy Act of 
1992 (October 24, 1992).

EFFECTIVE DATE: June 30, 1994.

FOR FURTHER INFORMATION CONTACT: Norman J. Hess, Office of Surface 
Mining Reclamation and Enforcement, U.S. Department of the Interior, 
1951 Constitution Avenue, NW., Washington, DC 20240; Telephone: 202-
208-2949.

SUPPLEMENTARY INFORMATION: 
I. Background
II. Organization
III. Final Rules and Disposition of Comments
IV. Procedural Matters

I. Background

A. Summary of the Abandoned Mine Land Program--Public Law 95-87

    The Abandoned Mine Land (AML) Reclamation Program was established 
by SMCRA, Public Law 95-87, 30 U.S.C. 1201 et seq., in response to 
concern over extensive environmental damage caused by past coal mining 
activities. In effect, the Abandoned Mine Reclamation Fund (Fund) and 
the program it supports is the coal industry's equivalent to the 
``Superfund'' administered by the Environmental Protection Agency to 
address hazardous waste discharges.
    As originally enacted, only areas abandoned prior to the date of 
enactment of SMCRA, where there is no continuing reclamation 
responsibility by any person under State or Federal law, were eligible 
for reclamation under Title IV. Funding of reclamation projects is 
subject to a priority schedule. For example, ``priority 1'' projects 
concern those that involve the protection of public health, safety, 
general welfare and property from extreme danger of the adverse effects 
of coal mining practices. ``Priority 3'' projects, on the other hand, 
concern environmental problems associated with past coal mining 
practices that do not necessarily constitute a public health or safety 
threat.
    The Fund, administered by the Secretary of the Interior through 
OSM, is financed by a reclamation fee assessed on every ton of mined 
coal at the rate of 35 cents per ton of surface mined coal, 15 cents 
per ton of underground mined coal and 10 cents per ton for lignite. 
Expenditures from the Fund are subject to appropriation by Congress. 
The authority to collect the reclamation fee was due to expire on 
August 3, 1992, 15 years after the date of enactment of SMCRA.
    The Fund is divided into the State/Tribal and Federal shares with 
each State or Indian tribe under a federally approved reclamation 
program (generally referred to as ``program'' or ``primacy'' States) 
entitled to 50 percent of the reclamation fees collected from coal 
operations within the State or Indian lands. Annually, these States/
Indian tribes receive reclamation project construction grants and 
administrative grants from their share of the Fund. States are also 
authorized to use up to $3 million of their State share funds to 
establish State coal mine subsidence insurance programs, and deposit 
ten percent of their annual grants into special interest-bearing State 
trust accounts for use after August 3, 1992, to carry out reclamation 
activities.
    The Federal share of the Fund is allocated among a number of 
Federal programs such as emergency projects (involving sudden and life-
threatening situations which demand immediate attention), high-priority 
reclamation projects in States and Indian tribes without federally 
approved reclamation programs (referred to as ``nonprogram'' States), 
the Rural Abandoned Mine Program (RAMP) administered by the Secretary 
of Agriculture through the Soil Conservation Service (SCS), and the 
Small Operators Assistance Program (SOAP) which provides financial 
assistance to coal operators who produce less than 100,000 tons per 
year to help defray certain costs associated with the surface coal 
mining permitting process. Remaining funds are distributed to program 
States under an allocation formula. At present, 23 States and three 
Indian tribes have OSM-approved abandoned mine reclamation programs.
    Noncoal abandoned mine reclamation projects can be undertaken in 
only two instances. Program States and Indian tribes can utilize State 
or Tribal share monies to reclaim an abandoned noncoal mine site if the 
request is made by the State governor or Tribal head and the project 
represents a public health and safety hazard. Moreover, once a program 
State or Indian tribe certifies it has completed the reclamation of all 
eligible abandoned coal mine projects, it can then use the full amount 
of its State or Tribal share for abandoned noncoal mine land 
reclamation projects.

B. AML Regulations

    On October 25, 1978, OSM published final regulations implementing 
an abandoned mine land reclamation program incorporating the provisions 
of Title IV of the Act. The regulations establish procedures and 
requirements for the preparation and implementation of State and Indian 
reclamation programs, consisting of reclamation plans, submission of 
annual projects, and applications for annual grants. Additional parts 
of this subchapter include provisions for Federal, State, and Indian 
Abandoned Mine Reclamation Funds, general reclamation objectives, 
rights-of-entry, liens, emergency reclamation acquisitions, disposition 
of lands and waters, reclamation on private lands, and Indian 
reclamation programs.
    Regulations relating to the amount and collection of fees were 
promulgated in 30 CFR part 837 on December 31, 1977 (42 FR 62713). This 
part has since been redesignated as part 870.
    On June 30, 1982, OSM published revisions to its abandoned mine 
land regulations in response to the Administration's request for 
regulatory review. These revised rules concerned the establishment and 
administration of the Abandoned Mine Land Reclamation Program by the 
States, Indian tribes, and Federal Government, as required by SMCRA. 
For more information regarding the exact nature of these revisions 
refer to 47 FR 28574-28604 (June 30, 1982).

C. Accomplishments of the Abandoned Mine Land Reclamation Program

AML Fee Collections
    From the beginning of the program through the Fiscal Year 1992, 
reclamation fee collections into the Abandoned Mine Land Reclamation 
Fund amounted to approximately $3.2 billion. The Fund also received 
donations, user charges, and other recovered amounts such as late-
payment fines.
AML Emergency Program
    Since the beginning of the program, OSM has encouraged States to 
take over emergency project responsibility. Beginning in 1983, Arkansas 
and Montana assumed emergency project responsibility, followed by 
Illinois in 1984. During 1988-89, Kansas, Virginia, and West Virginia 
took over responsibility for their emergency projects, and Alabama 
assumed responsibility in 1990. In 1992, Ohio and Alaska assumed 
responsibility. In 1989, OSM established a new emergency program policy 
that provided Federal share funds, in addition to the formula-based 
allocation, to States with emergency programs. Since 1988, it has been 
OSM policy to stabilize the emergency portion of AML problems 
permanently, and then to refer any remaining work at the site to the 
State for consideration under its regular AML reclamation program. In 
1992, OSM declared 179 new emergency projects, while States with 
emergency programs initiated 110.
State and Tribal AML Programs
    Beginning with Texas in 1980, OSM has approved State reclamation 
programs so that currently all primacy States except Mississippi have 
approved AML programs. During 1988 the Navajo and Hopi Tribe programs 
were approved, and in 1989 the Crow Tribe received approval for its 
program. States and the Indian tribes received grants totaling 
$143,541,172 in 1993. Since 1981, when the States began receiving AML 
administrative grants to operate their programs and construction grants 
to complete reclamation projects, through 1993, they have received over 
$1.9 billion from the Fund.
Minimum Programs
    The minimum-level AML program was established by Congress in 1988 
to assure funding for existing high-priority projects in States where 
the annual State share allocation is too small for the State to 
administer a program and initiate reclamation. Eleven States and Indian 
tribes (Alaska, Arkansas, Iowa, Kansas, Maryland, Missouri, New Mexico, 
North Dakota, Oklahoma, Utah, and the Crow Tribe) were eligible for 
minimum-level program funding during 1993 and received such grants 
during the year. Authorized funding of the minimum-level program was up 
to $2,000,000 per eligible State/Indian tribe for 1993. The minimum-
program States/Indian tribes received $14,669,719 of Federal share 
money in 1993, to bring these States to the minimum program level.

D. Abandoned Mine Reclamation Act (AMRA) of 1990

    Since 1977, when the AML Fund was established, many of the scars 
left from past mining practices have been reclaimed. Thousands of acres 
have been contoured, revegetated and brought back to productive uses. 
Despite such accomplishments, the inventory of unreclaimed high 
priority public health and safety problems is still significantly high. 
All such problems would not have been addressed with AML Funds 
collected through 1992, the original expiration date for fee 
collection.
    In light of this continuing need to address high priority coal 
problems, Congressman Rahall introduced a bill, H.R. 2095, in the 101st 
Congress to extend the AML fee and adjust the allocation of AML Funds. 
A detailed examination of this bill, as amended, can be found in H.R. 
Report 294, 101st Congress, 1st Session (October 18, 1989). H.R. 2095, 
as amended, was passed by the House of Representatives on October 23, 
1989.
    On October 16, 1990, the House again passed H.R. 2095 as part of 
H.R. 5835, the Omnibus Budget Reconciliation Act of 1990. In conference 
with the Senate, the text of H.R. 2095 was retained except for six 
modifications and one addition. They are as follows: First, the 
authority to collect reclamation fees was extended through September 
30, 1995, rather than the year 2007. Second, a provision that provided 
for modified reclamation fees after 1992 in States which have certified 
the completion of all abandoned coal mine projects was dropped. Third, 
provisions that would have expanded the scope of the emergency program 
were deleted. Fourth, while the House bill limited the objectives of 
the Fund to the first three priorities listed in current law, the 
amendments maintain the current law list of project priorities. Fifth, 
the requirement that the Secretary promulgate environmental standards 
for reclamation projects was deleted. Sixth, the bill's authorization 
of a new abandoned minerals and mineral materials mine reclamation fund 
was dropped. Finally, an amendment relating to certain projects in 
certified States was adopted.
    On November 5, 1990, the President signed into law the Omnibus 
Budget Reconciliation Act of 1990, Public Law 101-508, which included 
the Abandoned Mine Reclamation Act of 1990, as amended. Besides 
extending the authority to collect reclamation fees, the amendments to 
Title IV contain several other significant provisions as follows:
    The amendments concentrate a greater amount of resources toward 
combating the highest priority abandoned coal mine reclamation 
projects. This goal is accomplished by allocating forty percent of the 
Federal share of funds to program States and Indian tribes until they 
complete all of their priority 1 and 2 abandoned coal mine reclamation 
projects.
    The new provisions also provide additional resources to combat 
abandoned coal mine hazards by enabling interest to accrue to amounts 
in the AML Fund and by strengthening reclamation fee collection and 
auditing authority.
    The legislation also recognizes the severe hazards to public health 
and safety caused by water supplies contaminated by past mining 
practices.
    The new amendments allow States and Indian tribes to establish 
comprehensive acid mine drainage programs to combat the devastating 
effects on land, water and quality of life in areas affected by acid 
mine drainage.
    The new provisions allow States and Indian tribes to address high 
priority coal sites abandoned after enactment of the 1977 Act. Sites 
which were abandoned prior to a State receiving primacy pursuant to 
Title V of SMCRA, or which remain unreclaimed due to the insolvency of 
a surety company, can now be addressed with Title IV funds.
    The new legislation provides for a specific allocation of collected 
fees from which funds may be transferred annually to the Department of 
Agriculture to administer RAMP under Section 406 of SMCRA.
    The new legislation expands the rights of States and Indian tribes 
which have certified the completion of all known coal problems to 
utilize State/Indian tribe share funds for noncoal reclamation 
purposes, including the protection, repair, replacement, construction, 
or enhancement of public facilities damaged by past mining practices or 
which exist in communities adversely impacted by present mining.
    The new legislation also provides that mineral owners and 
purchasers be reported to OSM each quarter with the filing of the Form 
OSM-1.
    Finally, the new legislation raised the annual coal production 
limit from 100,000 to 300,000 tons for eligibility under the Small 
Operator Assistance Program authorized at Section 507(c).

E. Proposed Rules

    OSM published proposed rules implementing the 1990 amendments to 
Title IV and Title V of SMCRA and requested comments from the public. 
In addition, other changes were proposed for part 795, Small Operator 
Assistance, based on statutory authority existing under SMCRA. 56 FR 
57376-57401 (November 8, 1991). During the comment period on the 
proposed rules, OSM received comments through three public hearings as 
well as written comments from a variety of sources.
    Pursuant to Executive Order 12866, every Federal agency is required 
within applicable statutory limits to choose regulatory goals that 
maximize benefits to society and to select the most effective means to 
achieve these goals. To this end OSM has met with and received comments 
and recommendations from the representatives of coal mining States/
Indian tribes.
    All comments received during the comment period were considered in 
this rulemaking process, and all substantive comments received are 
addressed in the following preamble. All comments received, as well as 
summaries of meetings held and the record of the public hearings, are 
available for inspection in the OSM Administrative Record, room 660, 
800 N. Capitol Street, NW., Washington, DC.

F. The Energy Policy Act of 1992

    On October 24, 1992 the President signed into law the Energy Policy 
Act of 1992, Public Law 102-486. Included in this law were several 
amendments to the Abandoned Mine Reclamation Program under Title IV of 
SMCRA and to the Small Operator Assistance Program established pursuant 
to Section 507(c) of SMCRA. The legislative changes to the AML program 
include: an extension of the AML reclamation fee; the transfer of AML 
funds to the United Mine Workers of America Combined Benefit Fund; a 
reallocation of interest earned by the AML Fund; the deletion of the 
reclamation priority regarding AML funded coal research; the extension 
of reclamation eligibility for AML water problems created after August 
3, 1977; new mine fire control procedures; and the modification of AML 
eligibility criteria for sites affected by remaining operations.
    The Energy Policy Act of 1992, Public Law 102-486, also amended the 
Small Operator Assistance Program (SOAP) authorized at Section 507(c) 
of SMCRA. The changes to the SOAP at Section 2513 of the Energy Policy 
Act fall into two areas that will be covered in this rulemaking. First, 
enhancements have been added to the basic technical services to provide 
a more complete permitting package. These enhancements include: 
Engineering analyses and designs necessary for the determination of 
probable hydrologic consequences; cross-section maps related to the 
permitting requirements of SMCRA; collection of archaeological and 
historical information required by SMCRA and regulatory authorities and 
development of associated plans; collection of site-specific resource 
information and production of protection and enhancement plans for fish 
and wildlife habitats and other environmental values required by the 
regulatory authority; and pre-blast surveys required by SMCRA. Geologic 
drilling for collection of samples associated with the statement of 
results of test borings and core samplings is also authorized by the 
Energy Policy Act.
    Second, This rulemaking also includes another SOAP provision from 
the Energy Policy Act that deals with reimbursement of costs. A coal 
operator who has received assistance must reimburse the regulatory 
authority if the operator's actual and attributed annual production of 
coal for all locations exceeds 300,000 tons during the 12 months 
immediately following the date on which the operator is issued the 
surface coal mining and reclamation permit.
    Except for provisions dealing with mine fire control procedures and 
the training of eligible small operators concerning the preparation of 
permit applications (which will be the subject of separate 
rulemakings), OSM has included in these final rules the provisions made 
by the Energy Policy Act, as outlined above for the Small Operators 
Assistance Program and for the Abandoned Mine Reclamation Program. Such 
changes are mandated by statute and do not require additional 
implementing provisions or conditions. Accordingly, OSM is adopting 
these provisions, as enacted, without interpretation or the addition of 
any new requirements. Notice and comment pursuant to the Administrative 
Procedure Act, 5 U.S.C. 553 is not required. All amendments made by the 
Energy Policy Act of 1992 that are adopted by these final rules are 
specifically explained in more detail in Part III--Final Rules and 
Disposition of Comments.

II. Organization

    The regulatory revisions are intended to implement the requirements 
of the Act consistent with the purposes stated in Section 102(h), its 
legislative history, and the Secretary's commitment to avoid excessive 
and burdensome rules. The material concerning the Abandoned Mine Land 
Program is organized into parts which comprise Subchapter R. The 
material regarding the Small Operator Assistance Program (SOAP) is 
found in Subchapter H. At the end of each part, comments received from 
interested parties are addressed. It should also be noted that the term 
``allocated'' as used in this preamble refers to the earmarking of 
funds for a specific purpose. This administrative identification in OSM 
records of monies in the Fund for a specific purpose does not mean that 
such monies will be appropriated in a specific appropriation or will be 
available for use in the year in which they were allocated.
    In response to comments from Indian tribes, OSM has inserted 
throughout the regulations references to Indian tribes when it uses the 
word ``State''. Section 405(k) of SMCRA specifically provides that an 
Indian tribe should be considered as a ``State'' for purposes of Title 
IV. OSM has also made one further adjustment for Indian tribes. 
Regarding the reclamation of post-SMCRA sites pursuant to Section 
402(g)(4)(E) of SMCRA, the new amendments reference the date in which 
the Secretary approved a State program pursuant to Section 503. Indian 
tribes, however, do not have approved regulatory programs. To rectify 
this problem, OSM has used September 28, 1984, as the applicable date 
for Indian tribes. This date was chosen because it is the date that the 
permanent Federal regulatory program on Indian lands took effect.

III. Final Rules and Disposition of Comments

Part 795--Permanent Regulatory Program--Small Operator Assistance 
Program

General
    The initial authorization for the SOAP at Section 507(c) of SMCRA 
provided certain technical permitting services for hydrology and 
overburden and geology for operators annually producing 100,000 tons or 
less of coal from all locations. These technical services are directly 
linked to the permitting requirements associated with the determination 
of probably hydrologic consequences (PHC) and the statement of results 
of test borings.
    The Abandoned Mine Land Act of 1990 amended Section 507(c) by 
raising the annual coal production cap from 100,000 to 300,000 tons at 
all locations for eligibility for the technical permitting services 
provided under the program.
    The Energy Policy Act of 1992, Public Law 102-486, further amended 
Section 507(c) by adding enhancements to the program's basic services 
in order to provide a more complete permitting package. These 
enhancements include: Engineering analyses and designs necessary for 
the PHC; cross-section maps required by the permitting provisions of 
SMCRA; collection of archaeological and historical information; 
collection of site-specific resource information and production of 
protection and enhancement plans for fish and wildlife habitat and 
other environmental values; and pre-blast surveys. Furthermore, 
geologic drilling for the collection of samples associated with the 
requirements for the statement of the results of test borings is 
authorized. The Energy Policy Act also reduced the operator's liability 
period for reimbursement of costs from up to five years or the length 
of the permit, whichever is shorter, as specified in OSM regulations, 
to 12 months starting with the date the operator is issued the permit.
Discussion

Section 795.3  Definitions

    The definition of ``qualified laboratory'' is being amended by 
adding ``or other services as specified at Sec. 795.9.'' This will 
ensure that qualified laboratories provide all technical services 
authorized for the SOAP, i.e., the new technical services mandated by 
the Energy Policy Act, as well as the basic hydrologic and geologic 
services.

Section 795.4  Information Collection

    Section 795.4 contains a list of the information collection 
requirements contained in part 795 and the Office of Management and 
Budget (OMB) clearance number. The proposed revision updates the data 
contained in this section by including the estimated reporting burden 
per respondent for complying with the information collection 
requirements. The revision also provides the OSM and OMB addresses 
where comments regarding the information collection requirements may be 
sent.
    No comments were received on this section which is therefore 
adopted as proposed.

Section 795.6  Eligibility for Assistance

    In paragraph 795.6(a)(2), OSM proposed revising the production 
level of 100,000 tons to 300,000 tons with respect to operator 
eligibility under the SOAP program. This change is nondiscretionary and 
has been mandated by the Abandoned Mine Land Reclamation Act of 1990. 
OSM wishes to emphasize that past production will be used as the 
standard for evaluating whether an operator's probable total attributed 
annual production from all locations is reasonably expected to be 
within the 300,000 ton limit for eligibility under the SOAP. This 
approach will reduce the potential for fraud and abuse by eliminating 
large independent operators who might otherwise qualify under the 
reduced liability period of paragraph (a)(2).
    No comments were received on this paragraph.
    Regarding paragraphs 795.6(a)(2)(i) and (a)(2)(ii), OSM proposed 
changing the five percent to ten percent with respect to the baseline 
above which ownership will play a role in determining ``attributed coal 
production.'' The basis for the ten percent baseline is Section 
507(b)(4) and regulations for determining ownership and control, as 
well as permit information requirements promulgated thereunder. The 
change would make SOAP eligibility provisions for ownership and control 
consistent with all other similar requirements in the permanent program 
rules.
    One commenter stated that the proposal to change five percent to 
ten percent with respect to the baseline above which ownership would 
play a role in determining attributed coal production is logical and 
necessary to have SOAP consistent with the normal permitting 
requirements of ownership and control.
    Another commenter, however, disagreed stating that the change from 
five to ten percent for the purposes of attributing coal production 
mistakenly links the percentage of ownership to the other provisions of 
the Act where ownership is relevant only for permit-blocking and other 
enforcement purposes. The commenter noted that existing part 795 
already contains self-limiting language and believes that threshold for 
attributed production should be set low so that assistance through the 
SOAP is provided to those most in need. The commenter offered that the 
Security and Exchange Commission (SEC) considers five percent ownership 
significant for reporting purposes.
    OSM disagrees with the dissenting comment. SOAP provides permitting 
services and like all permitting requirements is authorized under 
Section 507 of SMCRA. Furthermore, eligibility for the SOAP is tied to 
eligibility for a permit at existing Sec. 795.6(a)(3) as explained at 
48 FR 2268, January 18, 1983. OSM is unaware of any significance or 
benefits to be gained by linking the percentage of attributed 
production to SEC reporting requirements and the commenter provided 
none. For these reasons, attributed production in the final rule will 
be tied to the ten percent ownership as proposed and thus be consistent 
with related permitting requirements.

Section 795.9  Program Services and Data Requirements

    Paragraph (a) contains a general description of the basic technical 
services available under the SOAP and references paragraph (b). The 
language ``and provide other services'' is being added to reference the 
list of enhancements added to paragraph (b) by the Energy Policy Act of 
1992.
    Paragraph (b) lists the specific technical services authorized for 
the SOAP. Paragraph (b)(1) authorizes the determination of probable 
hydrologic consequences. The phrase ``including the engineering 
analyses and designs necessary for the determination'' is being added 
based on the similar provision in the Energy Policy Act.
    Under Sec. 795.9(b)(2), OSM proposed adding ``Drilling and'' at the 
beginning of Sec. 795.9(b)(2). The objective is to clarify, consistent 
with Section 507(c) of the Act, that drilling where it is needed to 
provide the rock samples for overburden analysis is an authorized 
service under the program. OSM believes that to link these services is 
both logically and technically sound. Drilling of ground observation 
wells is authorized currently on a case-by-case basis. To coordinate 
any drilling with respect to serving needs for both rock samples and 
ground water monitoring for baseline data would integrate several 
important technical components of SOAP assistance and help to create a 
sounder environmental analysis. It would also have the added benefit of 
shortening the time frame for completion of technical studies.
    OSM wishes to emphasize that drilling would be used only in 
situations where adequate samples cannot be obtained from other sources 
such as existing cores or nearby freshly exposed highwalls. 
Furthermore, drilling is in no way intended to be explorative in 
nature. Exploration activities are the responsibility of the operator 
and the program administrator must ensure that the information on coal 
depth, thickness, and reserves required under existing Sec. 795.7 is 
reasonably accurate before authorizing drilling.
    In the proposal, the phrase ``drilling and'' was inadvertently 
placed in the middle of the rule instead of at the beginning. The 
objective of the proposal as discussed in the preamble at 56 FR 53379, 
November 8, 1991, would authorize drilling under the SOAP.
    Two comments were received on this proposal and both were 
supportive. One of the commenters pointed out the editorial error 
discussed above and recommended that section 795.9(b)(2) be reworded, 
as done in this final rule, to reflect that drilling is being added as 
an authorized SOAP service. The other commenter noted that adding the 
words ``Drilling and'' at the beginning of this paragraph to allow for 
the payment of geologic drilling services is a long sought change and 
totally supported.
    This paragraph is being adopted as proposed with the exception of 
the editorial changes highlighted earlier.
    Paragraphs (b)(3) through (b)(6) are being added based on specific 
provisions contained in the Energy Policy Act.
    Statutory references to SMCRA contained in the Energy Policy Act 
for these provisions have been changed to the corresponding permanent 
program regulations.
    Paragraph (b)(3) authorizes cross-section maps and plans as 
required by 30 CFR 779.25 and 783.25 of the permanent program 
regulations.
    Paragraph (b)(4) authorizes the collection of archaeological and 
historical information and related plans required by 30 CFR 779.12(b), 
780.31, 783.12(b) and 784.17 of the permanent program regulations, as 
well as other information required by the regulatory authority.
    Paragraph (b)(5) authorizes pre-blast surveys required by 30 CFR 
780.13 of the permanent program regulations.
    Paragraph (b)(6) authorizes the collection of site-specific 
resources information and production of protection and enhancement 
plans for fish and wildlife habitats required by 30 CFR 780.16 and 
784.21 of the permanent program regulations and information and plans 
for any other environmental values required by the regulatory authority 
under SMCRA.

Section 795.12  Applicant Liability

    Paragraph (a) sets forth an introduction for the liability factors. 
An editorial change is being made by substituting the phrase ``services 
rendered'' for the existing phrase ``laboratory services performed'' to 
be consistent with similar language associated with the Energy Policy 
Act codified in paragraph (a)(2) below.
    Paragraph (a)(2) deals with the liability period during which the 
operator must reimburse the regulatory authority if the operator's 
production exceeds the 300,000 annual ton limit. Paragraph (a)(2) is 
being revised by substituting the following language from the Energy 
Policy Act for the current requirement which references a liability 
period of five years or the length of the permit, whichever is shorter: 
``A coal operator who has received assistance pursuant to Sec. 795.9 
shall reimburse the regulatory authority for the cost of the services 
rendered if * * * (2) The program administrator finds that the 
operator's actual and attributed annual production of coal for all 
locations exceeds 300,000 tons during the 12 months immediately 
following the date on which the operator is issued the surface coal 
mining and reclamation permit.''
    One commenter stated all operators being monitored under a 
liability period should be held to the 300,000 ton standard for any 
coal produced after October 1, 1991. The commenter believed this option 
to be simple, logical and fair and consistent with the intent of 
Congress in raising the eligibility standard for new operators to 
300,000 effective that date. Another commenter stressed that it made 
little sense to be providing SOAP services to a new company mining 
300,000 tons while at the same time penalizing a smaller company for 
exceeding a 100,000 ton production cap.
    OSM agrees with the first comment and believes a dual standard for 
liability as proposed, would cause confusion and disenchantment with 
the SOAP, contrary to the intent of Congress. The final rule deletes 
the phrase ``exceeds coal tonnage governing SOAP eligibility in effect 
at the time assistance was approved'' from the proposal and in its 
place the final rule will provide for an annual liability limit of 
300,000 tons as mandated by AMRA. The 300,000 ton limit will not be 
retroactive. Coal production prior to October 1, 1991, must be less 
than 100,000 tons to avoid liability and reimbursement under the SOAP.
    Section 795.12(a)(3) deals with transferred liability in the event 
a permit acquired with SOAP assistance is sold, transferred, or 
assigned to another person. OSM proposed removing this section and thus 
eliminating liability in cases where SOAP supported permits were sold, 
transferred, or assigned to others as a normal business practice. 
Notwithstanding this view, OSM believed there to be a potential for 
abuse by removing 795.12(a)(3) and specifically sought comments on this 
concern or on regulatory criteria that could be used to distinguish 
between normal business practices and those practices that could result 
in abuse of the SOAP.
    Two comments were received. One commenter supported the proposal 
and stated that no significant potential for abuse is perceived. The 
other commenter opposed the proposal and stated that requirements such 
as contained in Sec. 795.12(a)(3) are essential to ensuring that SOAP 
funds are not raided through the use of sham entities and further that 
SOAP is not mandatory and thus anyone believing transferred liability 
to be disruptive need not participate in the SOAP.
    Because of the potential for abuse and the fact that no substantive 
reasons were provided to balance this concern and no regulatory 
criteria were offered to distinguish between normal business practices 
and those that could result in abuse of the SOAP, the proposal to 
remove Sec. 795.12(a)(3) which deals with transferred liability in the 
event a permit acquired with SOAP assistance is sold, transferred, or 
assigned to another person, has been rejected. This paragraph is being 
updated to reflect the Energy Policy Act provisions by replacing the 
phrase ``100,000 ton annual production limit during any consecutive 12-
month period of the remaining term of the permit'' with the new phrase 
``300,000 ton production limit during the 12 months immediately 
following the date on which the permit was originally issued.''

Part 870--Abandoned Mine Reclamation Fund--Fee Collection and Coal 
Production Reporting

General
    Title IV of the Surface Mining Control and Reclamation Act of 1977 
directed the Secretary of the Interior to collect per-ton reclamation 
fees from coal mine operators to support the reclamation and other 
activities listed under this Title. OSM developed a reclamation fee 
collection program and published rules in the Federal Register to 
assist mine operators in meeting their fee obligations, to specify 
management activities for fee collection, and to define a range of 
compliance activities that include compliance audits, debt collection, 
and litigation procedures.
    The major components of the fee collection program are the fee 
collection system, the fee compliance system, and the litigation 
system.
    Fee collection system: OSM operates and maintains the Abandoned 
Mine Land Fee Collection System (AMLFCS) in Denver, Colorado.
    The AMLFCS is an automated system which records and accounts for: 
(1) Collections and deposits of reclamation fees into the Federal 
depository, (2) fee payments and delinquencies, and (3) identification 
of collections for appropriation and use by States and Indian tribes 
under OSM approved reclamation programs.
    Fee compliance system: Duly authorized officers, employees, or 
representatives of the Secretary are located in the coal producing 
regions to ensure that fees are collected through appropriate 
investigations and audits.
    Litigation system: The Associate Solicitor, Division of Surface 
Mining, in concert with the Department of Justice (Justice), is 
responsible for litigation associated with the collection of delinquent 
fees. The Division initiates enforcement action through Justice to 
collect delinquent fees and provides legal assistance to OSM on fee-
related issues.
    On December 13, 1977, OSM published final rules as part 837 (42 FR 
62713) setting forth procedures for payment of reclamation fees and 
recordkeeping requirements. On May 15, 1978, OSM published an amendment 
to these rules (43 FR 20793) to establish the interest rate on late 
payments. These rules were later renumbered in the Code of Federal 
Regulations as part 870.

Discussion

Section 870.5  Definitions

    OSM has amended the definitions in section 870.5 for ``eligible 
lands and water,'' and ``left or abandoned in either an unreclaimed or 
inadequately reclaimed condition,'' and added new definitions for 
``mineral owner'' and ``qualified hydrologic unit.'' The new 
definitions update these terms so that they are consistent with the 
amendments made by the Abandoned Mine Land Act of 1990, Public Law 101-
508 (November 5, 1990) and the Energy Policy Act of 1992, Public Law 
102-486 (October 24, 1992). Although, due to oversight, most of these 
definitions were not presented in the proposed rules published November 
8, 1991 (56 FR 57376-57401), OSM is publishing them in the final rule. 
These definitions merely reflect the eligibility criteria already 
presented in the proposed rule. OSM therefore believes that it has 
received adequate comment on the eligibility criteria. In addition, the 
changes to the definitions reflect the mandatory changes to eligibility 
as set forth in the 1990 and 1992 amendments to Title IV of SMCRA. The 
definitions now reflect the additional eligibility for lands adversely 
affected by mining between August 3, 1977 and November 5, 1990; for 
noncoal lands after certification of the reclamation of all known coal 
problems; for water projects; and finally for lands affected by 
qualifying remaining operations.

Section 870.10  Information Collection

    OSM has revised section 870.10 which contains a list of the 
information collection requirements contained in part 870 and the OMB 
clearance numbers. The revision updates the data contained in the 
section by including the estimated reporting burden per respondent for 
complying with the information collection requirements. The revision 
also provides the OSM and OMB addresses where comments regarding the 
information collection requirements may be sent.

Section 870.12  Reclamation Fee

    New section 870.12(d) has been added to specify the new termination 
date for the payment of reclamation fees. As originally passed by 
Congress in 1977, the reclamation fee obligation was for a 15-year 
period starting in the last quarter of 1977 and extending to September 
30, 1992. Congress extended this date 3 years through the enactment of 
Public Law 101-508. The reclamation fee obligation was applicable to 
coal produced through September 30, 1995. As noted in H.R. Report No. 
294, 101st Congress, 1st Session 17-18 (1989), the extension of the 
reclamation fee was based in large measure on the continuing need to 
address high priority coal problems. Though the AML program over the 
last 13 years has reclaimed a significant number of acres of abandoned 
lands, Congress found that the ``inventory of unreclaimed high priority 
coal mine sites was still overwhelming''. Id. at 17.
    In 1992 Congress once again took up the issue of an AML fee 
extension as part of the Energy Policy Act of 1992. H.R. Report No. 
474, accompanying H.R. 776, recommended that the AML fee be extended 
until 2010. Of significance to the House Committee was an OSM estimate 
that when the existing authority to collect the reclamation fee expires 
in 1995, approximately $1.6 billion worth of high priority health and 
safety threatening sites would remain unreclaimed. In order to finance 
the reclamation of these remaining sites, the Committee recommended 
extending the AML fee until 2010 (H.R. Rept. No. 474, 102d Cong., 2d 
Sess. 90 (May 5, 1992)). In conference this date was revised to 
September 30, 2004. The amendment to 30 CFR 870.12 would implement this 
new fee extension date.
    One commenter stated that based on the estimated costs for 
reclaiming all AML sites under its jurisdiction, OSM would not complete 
this task under current funding levels until 2035 AD. Thus, OSM is 
urged to consider extending the AML fee.
    OSM does not accept this comment. Extensions of the fee collection 
authority are a matter to be addressed by legislation and are 
considered to be beyond the scope of this rulemaking.

Section 870.15  Reclamation Fee Payment

    OSM has amended Form OSM-1 to collect additional coal production 
and ownership information. Public Law 101-508 requires that additional 
information be reported in the quarterly report filed by operators; 
specific requirements include identification of the permittee, the 
permit number, the Mine Safety and Health Act (MSHA) number, the owner 
of the coal, the preparation plant, tipple, or loading point for the 
coal, and the purchaser of the coal.
    In OSM's proposed rule the Agency sought comments regarding the 
detail to which this information must be collected so as to ensure that 
information that is to be collected is useful. Also, as a means of 
achieving Congress' intent of minimizing the reporting burden, OSM 
noted its consideration of the establishment of thresholds (percentage 
of coal purchased, or percent of mineral ownership) for purposes of 
determining who qualifies as a reportable mineral owner and reportable 
purchaser, with the requirement that each Form OSM-1, when the 
thresholds are not met, identify at least the largest mineral owner and 
purchaser.
    Information contained in the quarterly reports, including 
information updates would be maintained in a computerized data base by 
OSM. In enacting these new reporting requirements, Congress believed 
that this information would be necessary for the agency to determine 
the identity of entities from whom to seek payment in the event of 
under-payment or non-payment of the reclamation fees. H.R. Report. No. 
294, 101st Congress, 1st Session 26 (1989).
    OSM has also made a minor editorial change to section 870.15(C) 
consistent with its proposed rule. This modification changes the title 
of the current Form OSM-1 from ``Coal Production and Reclamation Fee 
Report'' to ``Coal Sales and Reclamation Fee Report.'' This is intended 
to more closely reflect the rules under section 870.15(b) which require 
operators to report tonnage of coal sold, used, or transferred as 
opposed to coal produced.
    The SMCRA amendments require that mine operators report changes in 
mineral ownership, purchasers, tipples, preparation plants, loading 
points, and other information required to be reported as part of the 
quarterly Form OSM-1 process. Congress stated it did not expect these 
new requirements to place a significant additional reporting burden on 
operators.
    The revised Form OSM-1 incorporates the new information required by 
the amendments. The instructions accompanying the Form OSM-1 set forth 
the new data reporting requirements, including mineral owner, 
purchaser, tipples, loading points, etc. As part of OSM's analysis of 
the new amendments for this part, the Agency conducted a study of 
owner/purchaser profiles in large, medium, and small coal producing 
companies to develop an estimate of the nature and extent of the owner/
purchaser information which OSM might collect (and require operators to 
report) as a result of the 1990 AML amendments.
    OSM analyzed data from eight coal companies to determine how the 
amendments could impact their administrative reporting burden. The 
Agency gathered ownership and sales statistics for two large companies, 
four medium companies and two small companies in order to evaluate the 
potential impact of the SMCRA amendments. While the study was not based 
on statistical selection criteria, the data fairly represents the kind 
of owner/purchaser relationships that OSM would expect to encounter 
across the industry.
    The study supports the need to establish reasonable interpretations 
of the terms ``owner'' and ``purchaser'' in order that the data 
furnished by operators to OSM is both manageable and useful. The eight 
companies examined represent a wide spectrum of purchaser and owner 
relationships. For example, during 1990, one large company in Kentucky 
operated its own mines, bought coal from contract miners, brokered coal 
representing several purchasers, and sold coal to 90 individual 
purchasers. Four purchasers (major public utilities) accounted for 
about 90 percent of its sales. The company reported 2,100,000 tons of 
coal sales during 1990.
    In contrast, a small Colorado coal company operated a single mine. 
Except for one major buyer, the company sold coal on a cash basis to as 
many as 652 customers during a single quarter, each purchasing one ton 
or less. Annual sales amounted to 24,500 tons.
    Another coal company located in Ohio operates eight company mines 
and purchases coal from seven contract miners. There are 47 permits 
associated with the 8 MSHA-ID's under which the company reports and 
pays its quarterly fees. On one permit number which OSM selected for 
review, there were three mineral owners registered with the regulatory 
authority. Similar profiles exist for other companies selected for 
review.
    Although OSM's study was limited, the data suggests that thresholds 
would assure that the information collected identifies only those 
mineral owners and purchasers who are in a position to influence the 
coal operations that are reported. This would avoid a proliferation of 
reporting and data collection and the associated significant 
administrative and cost burden that would otherwise result.
    On the basis of this study and other information, OSM proposed the 
following threshold definition of ``owners'' and ``purchasers'' for 
Form OSM-1.

    The name and address of any person or entity who, in a given 
quarter, is the owner of (  ) percent or more of the mineral estate 
for a given permit, and any business entity or individual who, in a 
given quarter, purchases (  ) percent or more of the production from 
a given permit shall be reported to OSM on a quarterly basis. In the 
event that no single mineral owner or purchaser meets the (  ) 
percent rule, then the largest single mineral owner and purchaser 
shall be reported.

    OSM suggested that the threshold value of 10 percent be 
incorporated into the above definition, and accordingly requested 
comments on this or other threshold values. Without thresholds, OSM 
believed that data reporting and collection would proliferate without 
significant benefit. However, by establishing reporting limits, OSM 
would not only minimize its own administrative burden and that of the 
operator, but it would assure the usefulness of the data by identifying 
only those individuals and entities who, by the significance of their 
ownership and/or purchasing power, may influence coal mining 
operations.
    Three commenters provided detailed comments regarding their 
opposition to the reporting requirements in 30 CFR 870.15, particularly 
the requirements relating to the submission of information on persons 
who own 10 percent or more of the mineral or who purchase 10 percent or 
more of the production. The commenters note that the current proposal 
would amend the regulations at 30 CFR 870.15 to require operators to 
report tonnage on a revised Form OSM-1. One of these commenters refers 
to the preamble wherein OSM states that the legislation reauthorizing 
the AML fee expanded the reporting requirements to include the 
identification of the permittee, the permit number, any operator in 
addition to the permittee, the owner of the coal, the preparation 
plant, tipple, or loading point for the coal and the purchaser of the 
coal. 30 U.S.C. 1232(c), 56 FR 57379, 57396.
    OSM's own study, however, reveals that the reporting of all 
ownership and purchaser data would impose costly reporting burdens on 
companies with multiple operations and/or purchasers. Requiring the 
operator to report all ownership and purchaser information on a 
quarterly basis would be a wasteful and costly exercise. Thus, OSM set 
the threshold value at 10 percent.
    The commenters agree that the results of the OSM study demonstrate 
the need to establish reasonable interpretations of the terms ``owner'' 
and ``purchaser'' in order that ``the data furnished by operators to 
OSM is both manageable and useful.'' 56 FR 57380 (col. 1). They further 
agree that establishing limits on such reporting data would ``minimize 
[OSM's] own reporting burden and that of the operator.''
    The commenters disagreed, however, with several aspects of the 
proposal. First, they disagree with the establishment of an arbitrary 
10 percent threshold (or any numerical threshold) for reporting mineral 
purchases and ownership. Instead, they suggest that OSM simply require 
the operator to report the single largest mineral owner and purchaser. 
In many cases, they assert, the operator/lessee will be the single 
largest mineral owner, often leasing reserves from several different 
mineral owners prior to submitting a permit application. Requiring the 
identification of all lessors will only increase the administrative 
burden on the operator and OSM, and will duplicate the existing permit 
application information requirements at Section 507(b), 30 U.S.C. 
1257(b).
    The commenters further state that while the OSM proposal to reduce 
the reporting burden is a step in the right direction, there is no 
rational basis for establishing a minimum 10 percent threshold for 
reporting mineral ownership or coal purchases on Form OSM-1. In fact, 
the commenters assert, OSM itself provides no justification in the 
preamble for its suggestion that a 10 percent threshold be set. They 
argue that, while the ownership and control rules provide that the 
ownership of 10 percent of the voting stock of an entity creates a 
rebuttable presumption of control over the surface coal mining 
operation, 30 CFR 773.5(b)(5), the rules do not establish a similar 
presumption for 10 percent mineral owners, nor has OSM cited evidence 
demonstrating that such owners/purchasers are responsible for payment 
of the fee. Moreover, many operations lease the coal from several 
different owners, and are, for all practical purposes, the owners of 
the coal. The commenters assert that requiring the additional listing 
of all coal owners who lease to any company will only increase the 
reporting burden on operators and OSM, without providing any meaningful 
information on the person responsible for the fee payment.
    The commenters believe that in order to meet the requirements of 
Section 402(c) of SMCRA, it should be sufficient for an operator/
lessee, especially one that leases coal from multiple lessors and that 
sells to more than one purchaser, to list the single largest purchaser 
and mineral owner on Form OSM-1. They argue that requiring coal 
operators to list all mineral owners or purchasers would impose a heavy 
administrative burden on both the industry and the Secretary, without 
any corresponding benefit. In the commenters' view, identifying all of 
the coal purchasers or purchasers of 10 percent or more of the coal or 
all of mineral owners or owners of 10 percent or more would reveal no 
useful information and would subvert the Congressional intent that the 
agency collect and computerize the information required by Section 
402(c) for the purpose of determining ``what parties are responsible 
for payment of the reclamation fees, and * * * the identity of entities 
from whom to seek payment in the event of under or non-payment of the 
reclamation fees.'' H.R. Rep. No. 101-294, 101st Cong., 1st Session 26 
(1990).
    The commenters further state that identifying the mineral owners 
and purchasers is a costly, time-consuming task. One company that is 
among the nation's ``top 10'' coal producers, reported that it took 8 
man-days to compete approximately 50 OSM-1 forms, with each form 
listing an average number of 3 purchasers. This substantial amount of 
time does not include the time it would take to list all mineral 
lessors, as the company/lessee has listed itself as the owner of the 
coal on each form.
    Secondly, these commenters also raised concerns regarding OSM's 
revised Form OSM-1 and the agency's proposed 10 percent threshold for 
reportable mineral ownership or coal purchaser information. They state 
that the proposed rules refer to the revised Form OSM-1 and request 
comment on whether the agency should establish a 10 percent threshold 
for reportable mineral ownership or coal purchaser information. 30 CFR 
870.15. Yet the agency has proceeded to implement the 10 percent 
threshold requirement prior to the close of the comment period. The 
revised Form OSM-1 currently requires operators to list ``the names and 
addresses of any person or entity owning 10 percent or more of the 
mineral estate for [the] permit.'' Similarly, a purchaser of coal is 
defined as follows:

* * * those persons or entities who purchased 10 percent or more of 
the production from a given permit.

    See, Instructions for Completing Form OSM-1, Part 3.
    The commenters questioned the agency's apparent predisposition to 
establish a 10 percent threshold without benefit of public comment on 
the issue, pursuant to the Administrative Procedure Act.
    Third, a commenter stated that the 10 percent threshold for 
reporting mineral ownership is the same definition used in 30 CFR 773.5 
in the context of ownership and control (as it pertains to permit 
applications). The commenter argued that, although it is conceivable 
that an entity who owns the coal may indeed have the authority to 
directly or indirectly determine the manner an applicant, operator, or 
other entity conducts the coal mining operations, OSM must also realize 
that many mineral owners do not exercise ``control'' of the surface 
mining operations.
    Even more troubling to the commenter is the assertion that the 
definition as used on the Form OSM-1 is one for which there is no 
rebuttable presumption, particularly if it is the same definition that 
OSM uses for ``owned or controlled and owns or controls.''
    Another commenter disagreed. This commenter stated that the 
establishment of thresholds for mineral owners and purchasers undercuts 
the collection of information that may be of significance for both 
Title IV purposes, and for supporting the database for ownership and 
control under Title V. Particularly in the case of contract mining 
situations, the purchaser and mineral owner information becomes of 
critical importance.
    Typically, the commenter noted, the mineral owner information is 
readily available to the reporting entity, since it appears on the mine 
lease or other document authorizing coal removal, or is readily 
accessed in courthouse records. Establishment of a threshold in this 
case is unnecessary. Similarly, direct marketing of small amounts of 
coal is unheard of, and the reporting entity can readily access the 
information relating to where the coal was marketed or brokered.
    Alternatively, the commenter said, if a tonnage or percentage of 
sales threshold is to be used, it should be set at a level so as to 
exclude de minimis amounts but low enough to ``capture'' all 
information that might reflect ownership or control of the disposition 
of the coal.
    In response to the first general comment, regarding the 
appropriateness and practicality of the 10 percent threshold, OSM has 
carefully reviewed these concerns but has elected to retain the 10 
percent threshold. A strict interpretation of the language of the Act 
might require collection of information on all mineral owners and 
purchasers. OSM, on the basis of its experience and the study conducted 
after this legislation was enacted, however, has determined that a 
lesser level of information collection is justified and is consistent 
with Congressional intent.
    OSM believes that Congress' intent in enacting this language was to 
provide information relevant to the collection of ownership and control 
data on mining operations. For instance, it must be noted that Congress 
specifically required that the information be retained in a 
computerized database. Clearly, the best known computerized database 
maintained by OSM, both at the time that the AML legislation was 
enacted and currently, is the Applicant/Violator System (AVS). The 
information provided under Section 402(c) would be relevant to the 
identification of ownership or control links pursuant to 30 CFR 773.5. 
Such identified owners or controllers might, under certain 
circumstances, be responsible for implementing certain requirements 
under the Act, such as the payment of AML fees. See 30 CFR 773.5(a)(3) 
and 30 773.5(b)(6). See also United States v. Rapoca Energy Co., 613 F. 
Supp 1161 (1985).
    Application of Section 402(c) to all mineral owners and purchasers 
would impose an excessive administrative burden on the agency. If 
information on every owner or purchaser, no matter how minor their 
interest, were collected and maintained on AVS, AVS would be cluttered 
with irrelevant information that would not clearly identify actual 
owners or controllers of surface coal mining operations. The net effect 
of such extraneous information would be to hinder the effective 
implementation and maintenance of AVS. Accordingly, OSM believes that 
limiting the collection of information to owners or purchasers with 
interest of 10 percent or more fulfills the intent of the legislation 
by enabling OSM to identify the most likely owners or controllers of 
surface coal mining operations. In substance, the larger percentage 
owners or purchasers are more likely to be the actual owners or 
controllers of surface coal mining operations.
    On the other hand, with respect to the concern that OSM should 
require identification of only the single largest owner or purchaser, 
OSM believes that this could create a misleading picture of a surface 
coal mining operation. For instance, under the theory of this comment, 
a surface coal mining operation with a significant number of both 
mineral owners and purchasers would only report the single largest 
owner and purchaser. The difference between the largest purchaser or 
owner and the smallest purchaser or owner could be a de minimis amount. 
There is no useful purpose in distinguishing one small percentage owner 
or purchaser from another. This in no way would advance OSM's mission 
of identifying the true owners or controllers of the site. Further, 
under the theory of this comment, a site with only a few owners or 
purchasers would report only one of each category under this theory. 
Thus, OSM would not have access to information identifying potentially 
influential persons who can exercise control over the site.
    With respect to the concern about how time-consuming it is to 
identify purchasers and mineral owners, OSM recognizes that this task 
will require some commitment on the part of the regulated community. 
Nevertheless, the task has been imposed by the Congress in its revision 
of Section 402(c). OSM has made every attempt to make this a manageable 
task by establishing the 10 percent threshold, which should ensure that 
no more than 10 owners and 10 purchasers are required for each Form 
OSM-1 submission. Furthermore, the commenters should remember that 
information on all mineral owners is already a requirement of the 
permit application; this information thus should be readily available 
for Form OSM-1 compliance.
    OSM also understands the commenters' concern regarding the 
collection of information prior to promulgation of this rule. This rule 
is prospective in its application, and OSM's actions prior to 
promulgation were not intended to affect the decisions made in this 
rulemaking. However, the relevant provisions of SMCRA contained in 
Section 402(c) went into effect on October 1, 1991. As of that date, 
OSM was required to collect the information required by the Federal 
statute, and did so. In the absence of a reasonable threshold standard 
for the information collection, OSM and the AVS would have been 
inundated with information which would have included de minimis owners 
and purchasers. Such information would have been of limited utility for 
purposes of identifying parties responsible for the payment of 
reclamation fees and the owners and controllers of surface coal mining 
operations. Accordingly, OSM acted to limit the amount of information 
collected to assure that useful information was collected in a 
manageable manner for storage and use on AVS. To the extent that the 
commenter believes that insufficient information was collected prior to 
the promulgation of this rule, that issue is beyond the scope of the 
current rulemaking, and may be addressed in another forum.
    The third issue raised by the commenters concerned the use of 
ownership and control concepts in AML reporting requirements. In 
substance, the commenters' concern appears to be that OSM has 
inappropriately mixed the statutory requirements of Title IV with the 
regulatory requirements of Title V. For instance, they note that OSM 
has applied the 10 percent threshold of presumed control by 
stockholders under 30 CFR 773.5(b) to the reporting of mineral owners 
and purchasers under Section 402(c) of SMCRA.
    OSM disagrees with the view that ownership and control concepts are 
irrelevant to the implementation of Section 402(c) of SMCRA. The 
reporting requirements imposed by Congress in the legislation appear to 
track the needs of OSM's ownership and control regulation at 30 CFR 
773.5(b)(6) which provides a presumption of control of surface coal 
mining operations for certain mineral owners. Further, the legislation 
contains an explicit reference to OSM's computerized database (i.e., 
AVS), which indicates that the focus of the amended reporting 
requirements of Section 402(c) is to assist the ownership and control 
review process.
    Accordingly, the use of ownership and control concepts, such as a 
10 percent threshold, are appropriate in OSM's implementation of 
Section 402(c) of SMCRA. Although the 10 percent threshold is not 
applied to mineral owners or purchasers under the current ownership and 
control rule, application of a 10 percent threshold to such individuals 
under Section 402(c) of SMCRA is consistent with Congressional intent, 
serves the public interest, and is within the spirit of the ownership 
and control rules.
    OSM further recognizes that the application of the 10 percent 
threshold to purchasers and mineral owners may not identify the 
controllers of a surface coal mining operation in every case, or those 
otherwise responsible for the payment of AML fees in every case. 
Nevertheless, such a threshold for reporting is a good starting point 
to enable OSM to identify potential owners or controllers, and 
represents an achievable level of reporting and record keeping for both 
the agency and the regulated community.
    Further, in response to the concern that the use of ownership and 
control concepts creates an irrebuttable presumption that the 
purchasers or mineral owners control surface coal mining operations, 
OSM observes that the disclosure of the purchaser, mineral owner, or 
other information pursuant to Section 402(c) would not, in and of 
itself, establish a presumption of ownership or control for either 
Title IV or Title V purposes. OSM's use of concepts from the ownership 
or control rule is undertaken to simplify reporting by the regulated 
community and data collection by OSM under section 402(c) in a manner 
which OSM believes is consistent with Congressional intent in revising 
Section 402(c) and requiring such disclosure.
    Besides those comments regarding the 10 percent threshold issue, 
other comments were submitted on 30 CFR 870.15, raising issues of 
privacy regarding information collected under the revised Form OSM-1 
requirements. The commenters state that requiring disclosure of owners 
and purchasers raises serious concerns about the potential disclosure 
of sensitive and confidential information about coal markets, royalty 
rates and utility customers. They argue that release of this 
information could prove extremely damaging and that there is no 
guarantee in the statute or the proposed rules that such information 
shall remain confidential. They indicate that although the information 
on owners and controllers of surface coal mining operations is a matter 
of public record, the proposed regulations would go well beyond that, 
to require operators to list all purchasers and coal owners whose 
interests exceed 10 percent of the resources produced. Thus, the 
commenters assert, operators should have the right to request 
confidentiality of such information, in order to avoid the disclosure 
of sensitive information about coal purchasers and markets that might 
be used unfairly by competitors. This, they argue, is consistent with 
the Freedom of Information Act (FOIA) policy against disclosure of 
commercial or financial information deemed privileged or confidential. 
5 U.S.C. 552(b)(4). They assert that the identity of all coal 
purchasers from a mine is not a matter of public record and should 
remain confidential.
    OSM permitting regulations allow coal operators to request that 
certain data be withheld from public disclosure. 30 CFR 773.13(d)(3). 
The commenters believe that OSM should incorporate similar protection 
for confidential financial information in the rules governing the 
submission of Form OSM-1.
    With regard to these comments on privacy, OSM accepts the comments 
in part. OSM has concluded that the comments, by themselves, do not 
establish a reason to believe that disclosure of this information may 
result in competitive harm. However, OSM recognizes commenters' 
concerns that they be able to request confidentiality for certain 
information submitted under Section 402(c) of SMCRA. In response to 
these concerns, OSM has revised Sec. 870.15(b) to allow submitters to 
request confidentiality.
    Section 870.15(b) includes a provision specifically intended to 
afford submitters of information under Section 402(c) with the 
opportunity to designate such information as confidential. Following 
such opportunity, if a submitter does not designate the information as 
confidential, OSM will treat the infornation as subject to disclosure 
upon request. Conversely, if a submitter in good faith designates the 
information as confidential, OSM will treat the information as subject 
to disclosure upon request. Conversely, if a submitter in good faith 
designates the information as confidential, OSM will notify the 
submitter of any request for that information unless an exception to 
the notification requirement applies. Such exceptions appear in the 
Department's FOIA regulations at 43 CFR 2.15(d)(4).
    For example, under 43 CFR 2.15(d)(4)(iii) OSM would not be required 
to notify submitters of Section 402(c) information when the information 
is required to be disclosed by statute or regulation. Two sections of 
SMCRA, Sections 507(e) and 517(f), require public disclosure of permit 
applications and other information on file with regulatory authorities. 
30 U.S.C. 1257(e) and 1267(f) (1988). The information required to be 
listed in permit applications, in part, is set forth in 30 CFR part 
778, Permit Applications--Minimum Requirements for Legal, Financial, 
Compliance, and Related Information. Specifically, 30 CFR 778.13(d) 
requires permit applicants to list their owners or controllers. Under 
30 CFR 773.5(b)(6), ``owners'' or ``controllers'' presumptively include 
persons who own or lease coal to be mined by another and who have a 
right to receive the coal after mining. Thus, in permit applications 
coal operators are required to identify coal purchasers when such 
persons own or control surface coal mining operations. As previously 
noted, these applications are required to be publicly disclosed under 
Sections 507(e) and 517(f) of SMCRA (30 U.S.C. 1257(e) and 1267(f)). 
Consequently, to the extent a submitter provides OSM with coal 
purchaser information that identifies owners or controllers, the 
exception in 43 CFR 2.15(d)(4)(iii) applies, regardless of a 
confidentiality designation.
    In addition, Congress authorized disclosure of coal purchaser 
information to the extent such information is available on OSM's AVS. 
Section 402(c), as amended, requires the Secretary of the Interior to 
maintain coal production and purchaser information on a computerized 
database. 30 U.S.C. 1232(c), as amended by Public Law 101-508 (November 
5, 1990). At the time of the 1990 amendments, Congress was aware that 
OSM maintained the AVS as the pertinent computerized database for 
including such information. In accordance with Section 402(c) as 
amended, OSM thus intends to place such information on the AVS.
    Congress also was aware, at the time the 1990 AML amendments were 
enacted, that it is the function of the AVS database to disclose 
ownership and control information: To Federal, State, and local 
authorities responsible for investigating and enforcing violations of 
SMCRA; to the Internal Revenue Service when assisting OSM in collecting 
civil penalties and AML fees; to Congressional offices upon request; to 
public interest groups as may be required by court order; to applicants 
and permittees pursuant to permit determinations; and to individuals or 
entities in response to their requests for permit-related information 
about themselves and related entities. See, 52 FR 29570 (1987), amended 
53 FR 22575 (1988). Thus, the statutory requirement that Section 402(c) 
information be placed in a computerized database that, as its function, 
discloses information to various parties, falls squarely within the 
exception to notification found in 43 CFR 2.15(d)(4)(iii). 
Consequently, to the extent information is available on the AVS, the 
exception in 43 CFR 2.15(d)(4)(iii) applies, regardless of a 
confidentiality designation.
    The commenters are also concerned about the structure of the 
revised Form OSM-1. Part 3 provides that the operator list the mineral 
owners and purchasers of coal by permit number. For large companies 
operating mines under several different permit numbers, tracking the 
coal produced by permit number and consumer presents an impossible 
burden. Typically an operator delivers the coal produced from its mines 
to a preparation plant, where it is blended with coal produced at other 
mines operated by the same company and then delivered to the utility 
consumer. The companies do not possess the ability to report the 
specific amount of coal purchased by a customer from a particular 
permit number. The company simply reports the total tonnage produced at 
its various mines. While it can identify purchasers of coal, it cannot 
link the specific amount purchased to a particular permit number.
    For these reasons, the commenters believe that Form OSM-1 should be 
further revised to allow the company to report the tonnage produced 
from its mines, without having to track that tonnage to a particular 
utility purchaser or broker, and that simply reporting the tonnage and 
identifying the largest purchaser meets the requirements of SMCRA.
    OSM appreciates the commenter's concern, but disagrees with the 
commenter's suggested solution. Instead of only identifying one 
purchaser, it would be acceptable to report purchasers on a pro rata 
basis in situations involving the commingling of coal produced under 
several permits and sold to multiple purchasers. For example, if coal 
produced from five permitted mines was commingled and sold to three 
purchasers, operators would identify each of the three purchasers on 
the Form OSM-1 filed for each permit, according to their percentage of 
the total coal sold.
    In response to these comments OSM has included a definition of 
``mineral owner'' in Form OSM-1 and revised Sec. 870.5 to include a 
similar definition. ``Mineral owner'' is defined as any person or 
entity owning 10 percent or more of the mineral estate for a permit. If 
no single mineral owner meets the 10 percent rule, then the largest 
single mineral owner shall be considered to be the mineral owner. If 
there are several persons who have successively transferred the mineral 
rights, OSM is requesting in Form OSM-1, information on the last 
owner(s) in the chain prior to the permittee, i.e. the person or 
persons who have granted the permittee the right to extract the coal. 
If the permittee has obtained the right to mine the coal directly from 
the fee simple property owner(s), then those owners should be shown.

Sections 870.16 and 17  Production records and Compliance Authority

    Although the regulations in Sec. 870.16 have not been amended, OSM 
notes that provisions in Public Law 101-508 have clarified and ratified 
the Secretary's authority to conduct compliance audits of coal 
operators. Moreover, the provisions would require the Secretary to 
share information obtained through audits of coal operators with the 
Internal Revenue Service. In addition, the provisions in Sec. 870.17 
have been expanded and clarified, utilizing the authority in Sections 
201(c) and 413(a) of SMCRA, to cover all persons involved in a coal 
transaction, including without limitation, permittees, operators, 
brokers, purchasers, and persons operating preparation plants and 
tipples.
    Section 870.17 currently provides that fee compliance officers have 
the authority to examine records of the second party involved in the 
sale or transfer of ownership of coal by the operator. The amended 
section no longer refers to the terms ``fee compliance officers'' or 
``second party,'' and specifies that the Secretary or any duly 
authorized officer, employee, or representative of the Secretary would 
have access to relevant documents. The final language regarding duly 
authorized persons makes this section consistent with the language in 
Sec. 870.16.
    These revisions are supported by a number of provisions of SMCRA in 
addition to Section 402(c). Section 413(a) of SMCRA provides that the 
Secretary shall have the power and authority, if not granted otherwise, 
to engage in any work and to do all things necessary or expedient, 
including the promulgation of rules and regulations, to implement and 
administer the provisions of Title IV. Section 201(c) (1) and (2) also 
provides authority for these rules.
    The legislative authority to conduct audits of coal production and 
the payment of fees, including tipples and preparation plants as well 
as the authority to have access to relevant documents of any other 
person involved in a coal transaction, including purchasers of coal 
whether or not the purchase is from one who originally produced the 
coal, a secondary seller or an ultimate end user of the coal is a means 
to provide reasonable assurance that coal operators are properly 
reporting coal produced and subsequently sold, used, or transferred. 
This authority is necessary for the Agency to determine the identity of 
entities from whom to seek payment in the event of underpayment or 
nonpayment of the reclamation fees. The Agency believes that the new 
provisions in Section 402(d)(2) of SMCRA reinforce OSM's ongoing audit 
activities and do not mandate any specific level of tipple or 
preparation plant audit. OSM auditors have always verified the AML fee 
payment or non-payment and the accuracy of the tonnage reported. The 
legislative amendments confirm OSM's interpretation of its existing 
authority as implemented through current regulations.
    In enacting these provisions, Congress sought to provide OSM the 
authority to verify for accuracy and completeness the representations 
made in the quarterly reports. H.R. Report No. 294, 101st Congress, 1st 
Session 26 (1989). Moreover, through these amendments Congress provided 
that the Secretary report any failure to pay the full amount of the 
reclamation fee to the federal agency responsible for ensuring 
compliance with provisions of Section 4121 of the Internal Revenue 
Code.
    Congress believed that this sharing of information would foster 
greater compliance under the Black Lung Disability Trust Fund.
    Two commenters state that the proposed rules dramatically expand 
the powers of OSM to conduct audits of coal sales, transfers and use, 
beyond the authority contained in SMCRA. Under the proposed rules at 30 
CFR 870.17, OSM would gain access not only to records of the permittee 
or the operator of a surface coal mining operation, but also to ``* * * 
any person involved in a coal transaction, including without limitation 
* * *'' brokers, purchases, persons operating preparation plants and 
tipples, and any recipients of royalty payments for the coal.
    The commenters oppose the expanded audit requirements that allow 
the OSM compliance officers access, without guarantee of 
confidentiality, to records of mineral owners, brokers and other 
parties to a coal transaction. The commenters assert that matters 
involving royalties paid to mineral owners are matters of utmost 
secrecy within the industry and their potential disclosure through an 
audit to third parties could have substantial anti-competitive impacts.
    The commenters believe that under the proposed regulation, OSM 
seeks to gain access to the records of mineral owners, as well as 
utilities and other end users of the coal, without limitation and 
without any showing that the information is needed to identify the 
person responsible for payment of the fee or the tonnage produced. In 
the commenters' view, such sweeping, limitless authority to conduct 
audits of persons whose only involvement with the permittee or operator 
is through a coal purchase or royalty agreement exceeds the authority 
conferred by Congress in Section 402(d)(2) of SMCRA that only permits 
the Secretary to audit the books and records of ``any person who is 
subject to the provisions of this Title.'' 30 U.S.C. 1232(d)(2). Title 
IV of SMCRA does not apply to mineral owners, coal brokers, or end 
users of the product. Thus, the commenters argue, such persons are 
``not subject to the provisions of this Title,'' as that term is used 
therein. Section 402(a) of SMCRA limits the provisions of Title IV and 
the levy on coal production to ``operators of coal mining operations 
subject to the provisions of this Act.'' 30 U.S.C. 1232(a). Thus, the 
statute only empowers the Secretary to ``conduct audits of any surface 
coal mining and reclamation operation, including without limitation, 
tipples and preparation plants,'' but goes no further. 30 U.S.C. 
1232(d)(2).
    The commenters further stated that as defined by SMCRA, the term 
``operator'' includes a person ``engaged in coal mining who removes or 
intends to remove more than 250 tons of coal from the earth,'' a term 
that does not automatically include coal brokers, owners and 
particularly end users. 30 U.S.C. 1291(13). According to the 
commenters, OSM had offered no explanation of the reasons why the 
authority to audit operators is not sufficient to ensure that the 
Secretary has access to the documents and other records needed to 
determine the accuracy of AML fee reporting.
    The commenters stated that OSM also has failed to explain why such 
a dramatic expansion of its auditing authority is needed to implement 
the changes in the AML program enacted by Congress. The statute clearly 
does not command or authorize such a rule, they asserted. OSM itself 
admits that the new provisions in Section 402(d)(2) ``do not mandate 
any specific level of tipple or preparation plant audit * * * and 
merely confirm OSM's interpretation of its existing authority as 
implemented through current regulations.'' 56 FR at 57380 (col. 3). If 
anything, the commenters said, OSM's preamble explanation demonstrates 
that the existing regulatory scheme is adequate and sufficient to 
ensure that the agency has reasonable access to books and records 
verifying the accuracy of the tonnage reported and/or fees paid. OSM 
has pointed to no evidence of under collection or noncollection of AML 
fees that necessitates granting it the sweeping powers of audit 
virtually every person connected with the coal transaction, regardless 
of whether they are in a position to control the operation, nor does 
such evidence exist.
    The commenters believe that OSM's current regulations provide 
sufficient authority to audit the books and records of persons 
associated with a coal transaction most likely to be responsible for 
the payment of AML fees. Compliance officers possess the authority to 
examine the records of: (1) The second party involved in the sale or 
transfer of coal by the operator and (2) any party selling coal to the 
operator. 30 CFR 870.17. The ability to review the records of the 
second party enables the fee compliance officer to review the records 
maintained by coal tipple operators and those immediately involved in 
the coal sales transaction who might exercise control over the surface 
coal mining operation, to determine the person ultimately responsible 
for payment of the fee. There is no indication that OSM has ever used 
such authority to audit the records of the end user of the coal, nor is 
such authority necessary or appropriate, the commenters stated. 47 FR 
28579 (June 30, 1982).
    According to the commenters, OSM's reliance on its general powers 
in Section 413(a) and 201(c) of SMCRA to do all things necessary or 
expedient to implement the provisions of SMCRA, including the 
promulgation of rules and regulations, provides no independent basis 
for this rulemaking. As the Supreme Court has held, an administrative 
agency's powers to promulgate regulations is limited to the authority 
delegated by Congress. Bowen v. Georgetown University Hospital, 109 S. 
Ct. 468, 471 (1988). An ``agency may not bootstrap itself into an area 
in which it has no jurisdiction.'' SEC v. Sloan, 436 U.S. 103, 118-119 
(1978). Congress limited the agency's authority to audit the records of 
the operator of a ``surface coal mining operation,'' the commenters 
stated, including tipple and preparation plant operators subject to the 
provisions of Title IV of SMCRA, a term that does not include end users 
of coal or minerals owners not engaged in coal mining operations. Thus, 
in the commenters' view, the general powers to do all things necessary 
an expedient to implement the provisions of SMCRA provide no basis for 
the current rulemaking proposal, where no authority to promulgate such 
rules exists in the first place.
    OSM does not accept these comments. Section 402(d)(2) states, in 
part, that ``The Secretary shall conduct such audits * * * as may be 
necessary to ensure full compliance with the provisions of this 
title.'' The rule, as proposed, is a proper and natural interpretation 
of the congressional intent to recognize a need to expand and 
strengthen OSM's audit powers. Experience gained by OSM auditors is 
evidence of the need for that authority. In Fiscal Year 1993, OSM's 
audit staff identified $7.3 million in unreported or under reported AML 
fees. In identifying those amounts, the audit staff has used the 
existing authority in Sec. 870.17 to examine the records of a second 
party involved in a coal transaction, with little or no objection from 
those parties. This produced was necessary because the operators failed 
to meet their recordkeeping obligations, In effect, the expanded rule 
language in Sec. 870.17 further defines and identifies the term 
``second party'' in a way that will enable OSM to more effectively 
execute and enforce the Section 402 provisions of SMCRA in those cases 
where such action is necessary. For OSM to ensure compliance with the 
reclamation fee provisions of SMCRA, it is essential for the audit 
staff to have access to information of all parties involved in coal 
transactions. The OSM auditors frequently encounter cases involving 
missing or incomplete operator records, thus necessitating a 
determination of the correct tonnage through other means. While data 
from buyers is useful in these circumstances, royalty information is 
also an invaluable aid in validating the tonnage subject to fees.
    These comments also opposed the expanded audit authority due to 
concerns about potential disclosure of financial information. OSM 
rejects these comments for two reasons: (1) As explained previously, 
the rule is consistent with Congressional intent; and (2) the need for 
expanded audit authority outweighs commenters' concerns, which can be 
accommodated in other ways. Where requested, all copied information 
shall be protected to the extent authorized or required by the Privacy 
Act and the Freedom of Information Act (5 U.S.C. 522, 552a). OSM would 
point out that Sec. 870.16(c) already provides that if the AML fee is 
paid at the maximum rate, fee compliance officers shall not copy 
information relative to price.
    Furthermore, OSM does not intend to use this expanded authority as 
a primary means of identifying audit targets. Instead, it generally 
will be used to provide the agency with additional sources of 
information to identify coal sales or transfers.

Part 872--Abandoned Mine Reclamation Funds

General
    The United States Department of the Treasury established an account 
on its books in accordance with Title IV provisions of Public Law 95-87 
and Treasury's rules for a fund of this type. Section 401(a) creates 
the authority for the account:

    There is created on the books of the Treasury of the United 
States a trust fund to be known as the Abandoned Mine Reclamation 
Fund (hereinafter referred to as the ``fund'') which shall be 
administered by the Secretary of the Interior.

    Section 401(d) delineates availability and purpose of account 
monies:

    Moneys from the fund shall be available for the purposes of this 
Title, only when appropriated therefor, and such appropriations 
shall be made without fiscal year limitations.

    These provisions provide the authority for a fiduciary relationship 
whereby Congress controls the use of fund monies for Title IV purposes 
by the appropriation process, and the Treasury maintains the amounts 
collected in a special account.
    Fund revenues are derived from per-ton reclamation fees and late 
payment interest charges, sales of acquired lands, and donations. The 
fees and interest charges are paid by coal mine operations and 
submitted with coal sales and reclamation fee reports for payment 
identification and credit through a lockbox operation to OSM's Finance 
Center in Denver.
    Collections and related transactions are controlled by Deposit 
Tickets (prepared by the collection officer), Debit Vouchers issued by 
the Federal depository for uncollected checks, and Refund Schedules for 
overpayment. These transactions are identified by mine operators as 
well as by mine and geographic location. Data from the OMB approved 
Form OSM-1 submitted by mine operators with their payments are coded 
and stored in OSM's automated system for compliance and disbursement 
purposes. Net collections (per deposit tickets, debit vouchers and 
refund schedules) are reconciled on a monthly basis with the amounts 
reported by mine operators on OSM's approved forms.
    All accounts are closed at the end of business on September 30, the 
final day of the Federal fiscal year. The system is reconciled and 
collections are identified by State and Indian lands. Fifty percent of 
the fiscal year collection is reserved for use by States and Indian 
tribes to carry on approved reclamation programs. The remainder is to 
be allocated or expended by the Secretary of the Interior through the 
Director, OSM, as set forth in Section 402(g) of Title IV. Any errors 
found in prior year allocations are corrected in current allocations. 
This financial information is one of the inputs for budget requests to 
support Title IV programs.
    SMCRA, as originally enacted, did not authorize the investment of 
the AML Fund. In the new amendments to Title IV, however, Congress 
specifically provided for the investment of the AML Fund into interest-
bearing accounts.
    To comply with this mandate OSM has developed, with the assistance 
of the Department of the Treasury, a cash management plan providing for 
the investment of AML monies not required for current withdrawals.
Discussion

Section 872.10  Information Collection

    This section deals with information collection requirements and 
includes the estimated reporting burden per respondent for complying 
with these requirements. Due to oversight this section did not appear 
in the proposed regulation, however, it is now being included in the 
interest of providing a comprehensive regulation.

Section 872.11  Abandoned Mine Reclamation Fund

    OSM has added a new paragraph 6 to Sec. 872.11(a) to note that 
interest and any other investment income from the AML Fund would be 
earned and credited to the Federal share of the Fund. Options for 
splitting the earned interest between the State and Federal shares were 
not accepted. As explained in the response to comments below, it is 
clear from the language of the amendments and the legislative history 
that Congress sought to place the interest only in the Federal share. 
H.R. Report No. 294, 101st Congress, 1st Session 19, 20 (1989). See 
amended Section 402(g) of SMCRA.
    The Energy Policy Act of 1992 established a different use relating 
to the interest earned by the AML fund, however. Rather than using the 
money to supplement Federal reclamation responsibilities, Congress 
directed that an amount equal to the interest earned by the AML fund be 
available for transfer to a private pension fund. Beginning on October 
1, 1995, the Secretary is directed to transfer from the AML fund to the 
United Mine Workers of America Combined Benefit Fund (Combined Benefit 
Fund) an amount goal to: (1) the interest estimated to be earned and 
paid to the AML fund during the fiscal year and (2) to the extent that 
such amount transferred is less than $70,000,000, and amount sufficient 
so that the total of the amounts transferred equal $70,000,000, or the 
amount requested by the Trustees of the Benefit Fund, whichever is 
less. OSM has implemented these provisions in the final rules.
    Congress did limit these additional funds, however, so that the 
aggregate amount transferred under (2) for all fiscal years could not 
exceed an amount equivalent to all interest earned and paid to the fund 
after September 30, 1992 and before September 30, 1995. Additionally, 
the aggregate amount transferred for any fiscal year may not exceed the 
amount of expenditures which the trustees of the Combined Benefit Fund 
estimate may be debited against the unassigned beneficiaries premium 
account under Section 9704(e) of the Internal Revenue Code of 1986 for 
the fiscal year of the Combined Benefit Fund in which the transfer is 
made.
    To summarize, interest earned by the AML Fund in fiscal year 1992 
would be credited to the Federal-share of the AML fund and used to 
carry out the Federal reclamation responsibilities enumerated in Title 
IV. All interest earned in fiscal years 1993, 1994, and 1995, would be 
recorded and, beginning in fiscal year 1996, an amount equal to such 
interest would be used to supplement the funds transferred to the 
private pension fund if the AML interest amounts earned and the amount 
necessary to be transferred were less than $70,000,000. Assuming that 
the trustees of the pension fund document the need for additional 
funds, as set forth in Section 402(h) of SMCRA, an amount equal to all 
interest earned by the AML fund starting in fiscal year 1996 would be 
transferred by the Secretary to the pension fund. Such transfers would 
continue under the present statutory scheme as long as a need is 
documented by the trustees and the AML fund earns interest.
    The United Mine Workers of America (UMWA) health and retirement 
funds were established in 1974 pursuant to an agreement between the 
UMWA and the Bituminous Coal Operator's Association (BCOA) to provide 
pension and health benefits to retired coal miners and their 
dependents. The funds have been maintained for this purpose through a 
series of collective bargaining agreements. The funds created in 1974 
were a restructuring of the original benefit fund which was established 
in 1946.
    The funds consist of four different plans, each of which is funded 
through a separate trust. The 1950 Pension Plan provides retirement 
benefits to miners who retired on or before December 31, 1950 and their 
beneficiaries. The 1950 Benefit Plan provides health benefits for 
retired mine workers who receive pensions under the 1950 Pension Plan 
and their dependents. The 1974 Pension Plan provides retirement 
benefits to miners who retire after December 31, 1975 and their 
beneficiaries. The 1974 Benefit Plan provides health benefits to miners 
who retire after December 31, 1975. It also provides health benefits to 
miners whose last employers are no longer in business or, in some 
cases, no longer signatory to the applicable bargaining agreement. 
These miners are generally referred to as ``orphaned'' retirees.
    The Energy Policy Act of 1992 provides that the 1950 Benefit Plan 
and the 1974 Benefit Plan are to be merged into a new UMWA Combined 
Benefit Fund to provide health and death benefits for eligible retirees 
and their dependents. The Combined Benefit Fund is to be financed by 
health benefit premiums, death benefit premiums, and unassigned 
beneficiaries premiums imposed on assigned operators. The Combined 
Benefit Fund would also receive additional funding from transfers from 
the 1950 Pension Plan and, as discussed above, moneys from the AML 
Fund. The Energy Policy Act also created a 1992 Benefit Fund to provide 
benefits for persons not eligible under the Combined Benefit Fund. 
Congressional Record H-12169-70 (October 5, 1992) (Conference Committee 
statement on H.R. 776).
    The final rules in section 872.11(a)(6) implement the statutory 
scheme discussed above. This is, AML interest payments earned in fiscal 
year 1992 would be allocated to the Federal share for use in carrying 
out Federal reclamation responsibilities as outlined in Title IV of 
SMCRA. An amount equal to interest earned in succeeding years would be 
available for use as specified in Section 402(h) of SMCRA regarding 
transfers to the Combined Benefit Fund. OSM is also revising the 
language of Sec. 872.11(b)(3) regarding allocation of AML fees and 
interest to the Rural Abandoned Mine Program (RAMP). In 1992 RAMP would 
be allocated 20% of the interest earned from the AML fund. This 
represents RAMP's percentage allocation of the Federal share of the AML 
fund. Further allocations of AML interest would be made to RAMP; 
however, an amount equal to such interest might have to be transferred 
to the Combined Benefit Fund unless the trustees of the Combined 
Benefit Fund notify OSM pursuant to Section 402(h) of SMCRA that the 
estimated expenditures to be debited against the unassigned 
beneficiaries premium account for the fiscal year of the Combined 
Benefit Fund in which the transfer is made would be less than the AML 
interest estimated to be earned that year.
    The following comments address OSM's proposed rule for allocating 
interest income. As noted in the preceding discussion, however, 
subsequent to the publication of the proposed rule, Congress in the 
Energy Policy Act of 1992 designated a new scheme relating to interest. 
Accordingly, the comments received on the proposed rule do not reflect 
the current statutory scheme. Because of certain Federal/State issues 
raised by the comments, OSM has decided to respond to these comments.
    The majority of the comments received on section 872.11(a)(6) 
disagree with OSM's proposed rule regarding the allocation of related 
income and believe that interest income should be credited to the 
entire Fund (i.e., Federal and State share). Commenters state that the 
controlling authority for allocating interest is found in Section 
401(e) (e.g., credited to and form a part of the Fund) and that OSM's 
references to the legislature history to support its proposal is 
invalid.
    Another commenter, however, disagreed with the other commenters and 
stated that it supported OSM's allocation of interest.
    Although OSM is sympathetic to the arguments raised by the 
commenters favoring the distribution of interest payments to the State 
accounts, OSM believes that it is constrained by the specific statutory 
language of SMCRA and the legislative history of the 1990 and 1992 
amendments, and therefore has decided to allocate interest income only 
to the Federal share accounts consistent with the rationale set forth 
above.
    Specifically, Section 402(g)(1) of SMCRA allocates to the States/
Indian tribes only 50 percent of the fees collected. There is no 
mention of interest payments as was done for RAMP in Section 402(g)(2). 
In addition, the language regarding the allocations to the different 
Federal accounts does not refer to percent allocations as was done for 
State/Indian tribe allocations, but instead refers to distributions of 
monies from the Fund not previously allocated (see Sections 402(g) (2), 
(3), (4), and (5)). OSM therefore interprets the language of SMCRA as 
directing that interest allocations are only to be distributed to the 
Federal accounts. Commenters argue that OSM should give greater 
credence to the language in Section 401(e) which specifies that 
interest income is to be ``credited to, and form a part of, the fund.'' 
This language, however, is not dispositive. The interest income does 
become a part of the AML Fund. The States/Indian tribes, though, have 
no additional rights to this income money merely because the income is 
credited to the Fund. The AML fees result from a Federal tax and are 
Federal funds. Their distribution to the States must be based on 
specific Congressional direction and, based on OSM's review of the 
statute, there is no explicit directive to allocate income money to the 
individual State/Indian tribe accounts.
    To support this decision, OSM has also reviewed the legislative 
history of this section, and it is clear that Congress intended that 
the interest income to be distributed only to the Federal accounts. For 
example, the following three excerpts from the House Report 
accompanying H.R. 2095 (the legislation which formed the core of the 
1990 amendments) clearly demonstrate how Congress envisioned the 
distribution of interest income.
    H.R. Report 294, 95th Cong., 1st Sess. 19 (1989)

    * * * The remaining 50 percent of reclamation fees collected 
would continue to be dedicated to the Secretary's discretionary 
share of the Abandoned Mine Land Reclamation Fund for Federal 
programs. However, the legislation provides for the Secretarial 
share to be augmented by interest authorized to accrue to the 
unappropriated balance in the entire Fund * * *

    H.R. Report 294, 95th Cong., 1st Sess. 20 (1989)

    * * * Under the bill, after allocation of the State and tribal 
shares, the remaining amounts in the Fund (the Secretary's share of 
the reclamation fees plus all interest which would accrue to the 
unappropriated balances as authorized by legislation) would be 
available for a number of current Federal Title IV programs * * *

    H.R. Report 294, 95th Cong., 1st Sess. 27 (1989)

    * * * The Committee further notes that while interest would 
accrue to the entire unappropriated balance in the Fund, amounts 
earned from this interest would be dedicated solely to programs 
financed under the Secretarial share of the Fund * * *

    Some commenters argue that OSM should not resort to this 
legislative history since the bill was never enacted as originally 
passed by the House of Representatives. OSM, however, discounts this 
argument. Although H.R. 2095 was not passed as a separate bill, it was 
included in the Omnibus Budget Reconciliation Act of 1990. Accordingly, 
the legislative history for H.R. 2095 is relevant. Additionally, 
although the bill was ultimately amended during the House-Senate 
conference review process (see previous discussion in preamble 
regarding conference amendments), these amendments did not alter the 
statutory provisions regarding interest. Moreover, if the commenters 
are correct in their assertion, logic would dictate that the House-
Senate Conference Committee would have noted such concerns about the 
relevance of the legislative history. However, there are no such 
references. Accordingly, OSM believes that the legislative history to 
H.R. 2095 is relevant in determining Congressional intent.
    Based on the specific language in SMCRA and the legislative 
language discussed above, OSM has decided to keep the provisions 
originally set forth in the proposed rule to allocate interest income 
only to Federal accounts.
    Section 872.11(b) has been revised to incorporate the provisions of 
Section 402(g) of the Act as amended by the Abandoned Mine Reclamation 
Act of 1990. Section 872.11(b) describes the manner in which monies 
deposited into the Fund are allocated by the Secretary. These funds, 
once appropriated by Congress, would be used to accomplish the purposes 
of Title IV of SMCRA.
    Existing paragraph (b)(1) has been removed and allocations of funds 
of SOAP are addressed at new paragraph (b)(5) as specified at Section 
401(c)(11) of SMCRA. The distribution of AML Funds for RAMP is funded 
from the 20 percent to the funds remaining after allocation of 
collections to the States/Indian tribes in accordance with Section 
402(g)(2) of the Act. The distribution of funds for RAMP is set forth 
in paragraph (b)(3).
    In response to comments regarding the discretionary authority to 
withdraw granted unexpended AML funds, OSM has deleted 
Sec. 872.11(b)(1)(ii) and (b)(2)(ii) and merged the language in 
(b)(1)(i) and (b)(2)(i) into the main text of those sections. OSM's 
practice is not to withdraw funds. Rather, it is to deobligate funds 
and make them available to the States/Indian tribes in future years. 
This policy is further explained in the following comment response 
section.
    Existing paragraphs (b)(2) and (b)(3) of the regulations are 
revised and redesignated as paragraphs (b)(1) and (b)(2). These 
redesignated and revised paragraphs continue to require the allocation 
of 50 percent of annual fee collections to a specific State or Indian 
tribe. This fulfills the requirements of the Act at Section 402(g)(1). 
The new amendments use the grant award date as the time from which to 
calculate the three year period the States and Indian tribes have to 
use appropriated funds. Monies which remain unexpended by a State or 
Indian tribe after the three year period may, under certain conditions, 
or withdrawn and expended by the Secretary to accomplish the purposes 
of Title IV.
    Existing paragraph (b)(4) of the regulations has been redesignated 
as paragraph (b)(3) and revised to require that 10 percent of the 
monies collected and deposited annually, and 20 percent of the 
interest, if such amount is not necessary for transfer to the Combined 
Benefit Fund based on the provisions of 402(b) of SMCRA under the 1992 
amendments, and other miscellaneous receipts to the Fund, be allocated 
for use by the Secretary of Agriculture for the purpose of funding 
RAMP. Twenty percent of funds, if withdrawn from the State's and Indian 
tribe's unexpended grant awards under Section 402(g)(1)(D) of the Act, 
would also be reprogrammed to RAMP. This requirement is consistent with 
Section 402(g)(2) of the Act.
    A new paragraph (b)(4) has been added to the regulations to fulfill 
the requirement of Section 402(g)(5) of SMCRA. New paragraph (b)(4) 
requires that 40 percent of the monies deposited in the Fund annually 
after making the allocations of subparagraphs (b) (1) and (2) shall be 
allocated for use in making additional grants to the States and Indian 
tribes. To be eligible for funds allocated under this provision, a 
State or Indian tribe would not have certified under Section 411 (a) of 
SMCRA and would have priority 1 and priority 2 coal problems within the 
State or on Tribal lands. Under this paragraph, the distribution of 
funds would be based on a formula addressing the respective State's or 
Indian tribe's historical coal production prior to August 3, 1977, as a 
percentage of the nationwide total for eligible States and Indian 
tribes.
    Also, funds to be granted under this paragraph could be reduced or 
curtailed under two specific conditions relating to the adequacy of 
funding. These two conditions are: (1) if State or Tribal share funds 
to be granted in a given year are sufficient to address remaining 
eligible priority 1 or priority 2 coal sites, no additional funds will 
be provided during that year; and (2) if the cost to reclaim all 
remaining priority 1 or priority 2 coal sites exceeds the amount of 
State or Tribal share funds to be granted in a year pursuant to Section 
402(g)(1), but is less than the total amount of funds to be granted to 
the State or Indian tribe in that year under paragraphs (b) (1), (2), 
(3) and (4) of this section, Federal funds granted under this paragraph 
will be reduced to that amount required to fully fund all remaining 
priority 1 or priority 2 coal sites after utilizing all available State 
share funds. To make the above determination each year on September 30, 
OSM will continue to use its Abandoned Mine Land Inventory System in 
order to determine the dollar amount of remining (i.e., unfunded) 
eligible priority 1 and priority 2 coal problems.
    Existing paragraph (b)(5) of the regulations has been revised to 
list the purposes for which the Secretary may expend funds from the 
remaining or unallocated balance of the AML Fund (not already allocated 
to the States, Indian tribes, and RAMP), in accordance with Section 
402(g)(3) of the Act. These purposes would include SOAP, emergency 
projects, nonemergency projects in nonprogram States and on nonprogram 
Tribal lands, funding for eligible interim program and insolvent surety 
sites, and administration of Title IV of the Act.
    Two million dollars is the minimum program level established at 
Section 402(g)(8) of the Act. A new paragraph (b)(6) is added to the 
regulations to specify that not less than $2,000,000 would be 
distributed annually to States and Indian tribes having an approved 
abandoned mine reclamation program and eligible lands and waters 
pursuant to Section 404, so long as an allocation of funds is necessary 
to achieve the priorities stated in paragraphs (1) and (2) of Section 
403(a) (priority 1 or priority 2 coal problems). However, annual State 
share funds must be utilized first, and supplemental funds granted 
under paragraph (b)(4) and this paragraph shall not exceed the costs of 
reclaiming all remaining priority 1 and priority 2 sites. In response 
to comments, OSM notes that minimum program States, like all other AML 
States, will still be able to do associated priority 3 work when they 
do priority 1 or 2 reclamation projects. No change to the proposed rule 
was deemed necessary.
    A new paragraph (b)(7) is also added to the regulations to specify 
that additional funds allocated or expended annually by the Secretary 
would not be deducted from funds allocated or granted annually to a 
State or Indian tribe pursuant to Sections 402(g)(1), (5) or (8) of 
SMCRA. In response to comments, OSM added the word ``allocate'' to 
ensure States and Indian tribes that there will be no reduction against 
allocated funds.
    Finally, the new statutory provisions in Section 402(g)(3)(C) 
authorize the Secretary to expend monies for reclamation purposes in 
States or on Indian lands which do not have an approved abandoned mine 
land program. Section 872.11(b)(8) implements this provision.
    One commenter stated that the word ``expended'' in Sec. 872.11(b) 
(1) and (2) should be defined so that it can be used consistently. In 
the past words like ``expended'' and ``obligated'' have had different 
meanings depending on the context. ``Expended'' could mean obligated, 
paid out for goods or services, drawn down from the Federal account, 
etc., the commenter said.
    The term ``expended'' is already defined in Sec. 870.5. For 
purposes of these regulations ``expended'' means that monies have been 
obligated, encumbered, or committed for reclamation by contract by OSM, 
State, or Indian tribe for work to be accomplished or services to be 
rendered.
    Another commenter stated that proposed regulation 872.11(b)(1)(ii) 
concerning the withdrawal after three years of unexpended grant funds 
is too subjective and could result in arbitrary OSM Field Office 
recommendations.
    The commenter suggested that this term be defined as follows:

    * * * as a result of avoidable delays that are beyond the direct 
control of the state AML Program director * * *.

    This language would not hold the State AML programs hostage to 
delays caused by other State agencies, programs, or policies over which 
the State program director has no direct control or authority, the 
commenter argued.
    Another commenter stated that the phrase ``granted to a State or 
Indian tribe that have not been expended'' does not appear to include 
those unspent funds from a prior grant which are deobligated for grants 
management purposes and are again available to be regranted to that 
State. Such funds should not be included in the three year limitation, 
the commenter stated.
    The regulations should clarify this. Also, all funds withdrawn from 
a State or Indian tribe because of the three year limitation should be 
returned to the Federal share of the Fund and should then be available 
for any other discretionary share purpose, not restricted solely to 
those purposes identified under Sec. 872.11(b)(5), as proposed. If 
these are discretionary share funds, they should be made available for 
any and all discretionary purposes, the commenter asserted.
    OSM has accepted the spirit of the comments. The language regarding 
the withdrawal of funds in Sec. 872.11(b) (1) and (2) implements a 
specific statutory provision in Section 402(g)(1) of SMCRA. OSM notes, 
however, that the authority to withdraw is discretionary. OSM's 
practice since the beginning of the AML program is not to withdraw 
funds from the States/Indian tribes. Rather, funds which are not 
expended by a State/Indian tribe during the grant period are returned 
to the State/Indian tribe account for future grants. This practice is 
within the discretionary language of the Act and still provides States/
Indian tribes flexibility to manage their programs. To avoid any 
misunderstanding regarding this practice, OSM has decided to delete the 
language in proposed Sec. 872.11(b)(1)(ii) and (b)(2)(ii) and to merge 
the language found in (b)(1)(i) and (b)(2)(i) into the main text in 
those sections.
    One Indian tribe commented that there are 11 abandoned coal sites 
located on Tribal land. Three of these sites are priority 1. The total 
estimated cost to reclaim the sites is $2 million. There are 86 
abandoned noncoal sites located throughout the reservation. Four sites 
are priority 2. The estimated cost to reclaim all sites is $17.9 
million. The Indian tribe has $3.2 million available as Tribal share 
money, but has inventoried $19.9 million of abandoned sites. It is 
apparent that the current allocation method will leave numerous sites 
which present a hazard to public health and safety unreclaimed. Due to 
this inadequate funding and due to the fact that the Indian tribe has 
no historical production records for coal which was stolen from the 
Indian tribe, the Indian tribe urges OSM to amend the proposed 
regulations to allow a State/Indian tribe with a demonstrated need for 
reclamation to qualify for minimum program funding of priority 3 
projects. In addition, since there are no historical records of the 
stolen coal, OSM should provide some special consideration under this 
regulation.
    OSM has not been able to implement this comment due to the specific 
provisions contained in Section 402(g)(8) of SMCRA which limits 
allocations for minimum program States and Indian tribes to those 
necessary to carry out priority 1 and 2 coal projects. OSM has looked 
into the matter of historic coal production from Indian lands and 
determined that the three Indian tribes with approved AML programs 
would not qualify for more funds pursuant to Section 402(g)(5) of 
SMCRA. This is caused by the amount of unfunded priority 1 and 2 coal 
projects in each Indian tribe and not historical coal production.
    Other commenters also stated that prohibiting minimum program 
States and Indian tribes from doing priority 3 work would be 
discriminatory. Minimum program States need the latitude to determine 
when associated priority 3 reclamation is necessary and beneficial to 
the total priority 1 and 2 reclamation within the State. All States and 
Indian tribes receiving discretionary and or minimum program monies 
should be treated equally and impartially.
    OSM has accepted these comments. OSM will treat minimum program 
States/Indian tribes the same as other States/Indian tribes. That is, 
all States/Indian tribes with approved AML programs under Title IV of 
SMCRA will be able to do priority 3 projects that are associated with a 
priority 1 or 2 site. There will be no artificial limitation on minimum 
program States. In addition, OSM will be reviewing the criteria for 
priority 1 and 2 projects to provide the States and Indian tribes 
greater flexibility in selecting eligible projects. Due to the 
limitations in SMCRA regarding the funding of priority 1 and 2 projects 
from minimum program and historic coal production allocations, however, 
OSM believes States/Indian tribes must still maintain their focus on 
projects that qualify as a priority 1 or 2 site.
    Another commenter stated that the Act in Section 402(g)(5) provides 
that 40 percent of discretionary funds should be allocated to the 
States and Indian tribes on a historical production basis as 
inventoried high priority problems require. This 40 percent of the 
remaining funds includes the interest and other fund revenues including 
withdrawn funds from States and Indian tribes plus other miscellaneous 
receipts to the Fund. According to the commenters, the regulations 
should specifically state this to be consistent with the Act. This is 
consistent with the allocation of 20 percent of the interest and other 
fund revenues to RAMP in Sec. 872.11(b)(3).
    OSM has declined to implement this comment. As previously discussed 
in this preamble, interest earned by the AML fund will be allocated 
among the three Federal accounts based on the percentages specified in 
SMCRA. OSM does not believe that such language needs to be specified in 
a regulation. Furthermore, as previously noted, under Section 402(h) an 
amount equal to the interest earned by the AML Fund needs to be 
available, if necessary, to transfer to the United Mine Workers of 
America Combined Benefit Fund.
    Another commenter stated concerning Sec. 872.11(b)(4)(ii) that the 
proposed regulation should provide that if the actual cost of 
reclamation to accomplish all inventory priority 1 and 2 problems is 
less than the Federal share funds actually granted for minimum program 
States or Indian tribes, then any excess funds must be returned to the 
Federal share of the Fund.
    OSM has not accepted this comment. The preamble to the rules 
specifies how distributions will be made as a State or Indian tribe 
funds all remaining 1 or 2 priority projects. Further references in the 
regulations regarding funding procedures are unnecessary.
    Another commenter agreed with OSM's proposed rule which provided 
funding only until all priority 1 and 2 problems have been addressed. 
This commenter states, however, that the rules should further provide 
that no supplemental grants under this provision will be expended on 
any site other than a priority 1 or 2 problem area as defined in 
Section 403(a) of SMCRA.
    As noted previously, OSM has decided to fund the reclamation of 
priority 3 problems if they are associated with priority 1 or 2 problem 
sites. This should avoid artificial distinctions and arguments on what 
qualifies as a priority 2 or 3 problem and allow States and Indian 
tribes greater flexibility in selecting eligible projects. By allowing 
States and Indian tribes the authority to do associated priority 3 
work, OSM believes that the cost effectiveness and overall efficiency 
of the AML program will be improved.
    Most commenters responding to OSM's proposed rules in 872.11(b)(4) 
(historical coal production allocation) and 872.11(b)(6) (minimum 
program funding) disagreed with OSM's approach and stated that minimum 
program States should be able reclaim priority 3 projects. Some 
commenters felt that minimum program States or Indian tribes should be 
able to do any priority 3 reclamation work; others, however, were more 
limited. Some felt that minimum program States should be able to do 
priority 3 work if it is associated with higher priority reclamation 
activities, and others felt that minimum program States should be able 
to utilize their State share funds for any priority. Most commenters 
requesting authority to do some type of priority 3 work felt that such 
authority was consistent with the intent of Congress and the purposes 
of the AML program. According to these commenters, such authority is 
cost-effective and provides the States the management authority which 
OSM's consolidated grant approach is supposed to provide.
    Other commenters, however, disagreed and stated the minimum program 
States should be required to complete all known priority 1 and 2 sites 
before funding priority 3 projects. Moreover, OSM should consider funds 
set-aside by the State for future reclamation purpose (873.12(a)) in 
determining the appropriate distribution amount.
    Given the various limitations in SMCRA regarding program funding, 
OSM's options regarding distributions to minimum program States and 
Indian tribes are somewhat constrained. Federal share funds are limited 
to priority 1 or 2 problem coal sites. Accordingly, comments suggesting 
no restrictions concerning the funding for priority 3 sites could not 
be accepted. Similarly, OSM does not believe it would be proper to go 
to the opposite extreme and deny funding for all types of priority 3 
work. States and Indian tribes are still receiving State/Indian tribe 
share funds and in many instances doing associated priority 3 work 
would increase the efficiency of the State/Indian tribe program. OSM 
has, instead, chosen a middle ground. OSM will not single out minimum 
program States/Indian tribes for more stringent funding criteria, but 
instead will treat all States/Indian tribes equally. OSM will fund 
associated priority 3 work.
    OSM has not accepted the part of the comment requesting that OSM 
require minimum program States and Indian Tribes to use their future 
set-aside funds first. By statute once these funds have been granted 
and placed in a special trust fund, the monies are considered to be 
State funds. In addition, the purpose behind the establishment of 
specific State set-aside funds was to allow the AML States to prepare 
for a time when the AML program had ended and the AML funding had 
ceased. At that time States could utilize the set-aside funds if AML 
problems arose. Mandating the use of such funds at this time would be 
contrary to this purpose.
    One commenter commended OSM for funding emergency projects 
separately from grants allocated to the States pursuant to the annual 
reclamation plan. This funding mechanism encourages States which do not 
presently administer an emergency program to work toward eliminating 
those obstacles which prevent them from assuming these 
responsibilities. The unpredictable nature of emergencies coupled with 
the potential for expensive reclamation techniques could seriously 
disrupt a State's reclamation plan if emergency funding had to come 
from the State's annual grant.
    Another commenter observed that under Sec. 872.11(b)(7), ``Funds 
allocated or expended annually by the Secretary under Sections 
402(g)(2), (3) or (4) of SMCRA for any State or Indian tribe shall not 
be deducted against funds to be granted annually to a State or Indian 
tribe under the authority of Section 402(g)(1) (5) or (8) of SMCRA.'' 
According to the commenter, the use of the word ``granted'' as opposed 
to ``allocated'' suggests that Section 402(g)(2), (3) or (4) 
expenditures may still ultimately be deducted from State share 
allocations, even though OSM will not reduce annual grants. This should 
be clarified to provide that such expenditures shall not reduce annual 
grants or be deducted from total allocations, the commenter said.
    OSM notes the language in Sec. 872.11(b)(7) implements language in 
Section 402(g)(5) of SMCRA. This provision controls funds that are 
either ``allocated or expended.'' To avoid any misunderstanding OSM has 
made the change suggested by the comment and has added the word 
``allocated'' to the regulatory language.

Part 873--Future Reclamation Set-Aside Program

General
    In 1987 Congress amended Section 402(g)(3) SMCRA authorizing States 
to deposit up to ten percent of their annual State share grant funds 
into special trust accounts. Such funds deposited, together with any 
interest earned, could then be utilized by a State after August 3, 
1992, to carry out the purposes of Title IV. The purpose behind the 
1987 provision was to ensure that a State would have AML Funds 
available after the expiration of the AML fee provisions to handle 
future reclamation problems.
    The new statutory amendments in Public Law 101-508 also include a 
future reclamation set-aside program with five specific differences. 
First, this new set-aside program does not supersede or transfer funds 
deposited under the original set-aside program established in 1987. 
Funds deposited under that program can still be utilized by a State/
Indian tribe at its discretion after August 3, 1992, to carry out the 
purposes of Title IV. Second, the new trust fund accounts have a new 
timeframe. Funds deposited pursuant to the amendments of 1990 may only 
be utilized after September 30, 1995. Third, the new trust accounts 
would only be utilized to reclaim eligible coal problems. The original 
set-aside accounts could be used for any purposes in Title IV; thus 
both coal and noncoal problems could be addressed. Fourth, rather than 
being limited to up to ten percent of the State/Indian tribe share 
funds granted annually, the States/Indian tribes can now deposit up to 
ten percent of the total State/Indian tribe share and historic coal 
production (Federal share) funds granted annually. Fifth, the State/
Indian tribe now has an option on whether to utilize funds for the 
future reclamation set-aside program or to deposit the monies in a 
special trust account for use in a State/Indian tribe acid mine 
drainage program. The statute and regulations allow States/Indian 
tribes to utilize available funds for either the acid mine drainage 
program or the future reclamation set-aside program. However, a ten 
percent cap is placed on the total funds available annually.
Discussion

Section 873.1  Scope

    This section provides requirements for the award of grants to 
States/Indian tribes for the creation of special trust accounts to 
provide funds for coal reclamation purposes after September 30, 1995.

Section 873.11  Applicability

    This section provides that provisions of this Part would apply only 
to the granting of funds and their use by the States/Indian tribes for 
coal reclamation purposes after September 30, 1995.

Section 873.12  Future Reclamation Set-Aside Program Fund Criteria

    This section tracks the legislative language of Congress and limits 
the use of the monies to eligible coal reclamation purposes after 
September 30, 1995. To be eligible to receive a grant for such 
purposes, a State/Indian tribe would have to first establish a special 
trust fund account which would limit the use and withdrawal of the 
funds as specified earlier.
    If the conditions are met and monies are properly deposited, 
Sec. 873.12(c) specifies that the monies so deposited, together with 
interest earned, would be considered State/Indian tribe monies. The 
1987 amendment originally establishing the special State set-aside 
specified that monies deposited in the special State trust accounts, as 
well as interest earned, would be considered State monies. Although the 
1990 amendments do not contain equivalent language, OSM intends to 
provide the same treatment under these proposed rules because the 
legislative history of the 1990 Act does not evidence Congressional 
intent to change this feature of the set-aside.
    All comments received on this Part objected to OSM's proposal to 
limit future set-aside funds to coal problems only. These commenters 
argued that OSM's reliance upon the legislative history to H.R. 2095 
was inappropriate given the vast difference between the original bill 
and the fund language in the Omnibus Budget Bill. Moreover, these 
commenters believe that Sections 403(a) and 404 can be interpreted to 
include both coal and noncoal problems.
    OSM is unable to accept this comment and therefore has made no 
changes to part 873. OSM interprets the 1990 amendments to SMCRA as 
limiting future set-aside grants to coal projects only. This 
interpretation is consistent with the statutory language and the 
legislative history. As stated in H.R. Report 294:

    * * * Provision is made for a State to deposit up to 10% of its 
annual state share allocations, including amounts available to the 
State from Secretarial share supplemental grants, into a special 
interest-bearing trust fund established by the State for the purpose 
of undertaking abandoned coal mine reclamation * * *. The Committee 
notes that several states have already established such a program 
under the current law provision limiting use of set-aside amounts 
for use after August 3, 1992. The current law provision does not 
necessarily restrict the use of set-aside amounts for abandoned coal 
mine reclamation projects. As such, the Committee intends for states 
to have the opportunity, at their discretion, on or after August 3, 
1992, either to withdraw or maintain as a separate account for the 
purpose of accomplishing authorized Title IV purposes, as set forth 
prior to the amendment of this Title by the legislation, amounts 
set-aside prior to enactment of the Abandoned Mine Reclamation Act 
of 1989.

    H.R. Report 294, 101st. Cong., 1st. Sess. 28 (1989).
    The modifications made to Section 403(a) do not expand this 
authority as urged by the commenters. These modifications merely cross 
reference another set of priorities which would be applicable to a 
State's noncoal program. The commenters' position is not supported by 
any references in the legislative history. As demonstrated above, 
however, the opposite is true. House Report 294 specifically directs 
that set-aside funds be limited to coal projects only and that this 
future set-aside program (limited to coal only) is different than the 
previous set-aside program which authorized expenditures to carry out 
any Title IV purposes. See H.R. Report 294, 101st. Cong., 1st. Sess. 28 
(1989). Finally, if the commenters' position were correct that Congress 
wanted to fund both coal and noncoal projects with future set-aside 
monies, logic would dictate that the language in the old law would have 
been repeated, i.e. ``accomplish the purposes of this title.'' However, 
this was not the case. Instead, Congress referenced the coal 
eligibility section only.

Part 874--General Reclamation Requirements

General
    Part 874 sets forth requirements relating to eligibility and 
selection of reclamation projects that are equally applicable to those 
reclamation activities to be carried out by OSM and to the Rural 
Abandoned Mine Program administrated by the Secretary of Agriculture 
under Title IV.
Discussion

Section 874.11 and 12  Applicability and Eligible Coal Lands and Water

    SMCRA, as enacted in 1977, specified that lands and water eligible 
for reclamation funding are those which were mined for coal or which 
were affected by such mining, wastebanks, coal processing, or other 
coal mining processes, and abandoned or left in an inadequate 
reclamation status prior to the date of enactment (August 3, 1977) and 
for which there is no continuing reclamation responsibility under State 
or other Federal law.
    The amendments to Title IV significantly enlarge these original 
eligibility criteria. Most notably, Congress has extended in two 
instances the eligibility criteria for reclamation funding to priority 
1 or 2 coal problems on lands which have been mined and abandoned after 
August 3, 1977. The first time interval involves land mined and 
abandoned between August 4, 1977 and the date on which the Secretary 
approved a State program under Section 503 of SMCRA and specifies that 
any funds for reclamation or abatement which are available pursuant to 
a bond or other form of financial guarantee or from any other source 
must not be sufficient to provide for adequate reclamation or abatement 
at the site. Regarding the reclamation of post-SMCRA sites pursuant to 
Section 402(g)(4)(E) of SMCRA, the new amendments reference the date on 
which the Secretary approved a State program pursuant to Section 503. 
Indian tribes, however, do not have approved regulatory programs. To 
rectify this problem, OSM has used September 28, 1984 as the applicable 
date for Indian tribes. This date was chosen because it is the date 
that the permanent Federal regulatory program on Indian lands took 
effect. The second time interval would extend eligibility to lands 
mined and abandoned between August 3, 1977 and November 5, 1990, where 
the surety of the mining operator became insolvent and funds 
immediately available from other proceedings or sources are not 
sufficient to provide for adequate reclamation or abatement at the 
site.
    The eligibility requirements for sites abandoned prior to August 3, 
1977, are set forth in Sec. 874.12 (a), (b), and (c). To these general 
eligibility requirements, OSM has added subsections 874.12 (d), (e), 
(f), (g) and (h) to address eligibility for sites abandoned after 
August 3, 1977.
    In order for sites abandoned after August 3, 1977, to be eligible 
for funding, lands adversely affected during either of the time 
intervals as discussed above and specified in Sec. 874.12(d), must be 
abandoned and must qualify as a priority 1 or 2 problem pursuant to 
Section 403(a) of SMCRA.
    Subsection 874.12(e) establishes the eligibility criteria for 
States and Indian tribes to reclaim lands adversely affected after 
August 3, 1977. It is similar to subsection (d), and includes the same 
criteria with one additional requirement. In addition to making the 
findings required for subsection (d), a State or Indian tribe would 
also have to find in writing that the reclamation priority of the site 
is the same or more urgent than the reclamation priority for the lands 
and water adversely affected prior to August 3, 1977 and that the site 
qualifies as a priority 1 or 2 site. This subsection implements Section 
402(g)(4)(E) of SMCRA.
    In extending eligibility to high priority sites left abandoned 
after August 3, 1977, Congress noted that tens of thousands of acres of 
land mined since August 3, 1977 remain unreclaimed due to the less 
stringent standards applicable during the ``interim program'' period 
and the bankruptcies of the mining companies and their insurers. The 
damage to these lands has created a new generation of abandoned mine 
problems unforeseen by the original law. Indeed, Congress notes in its 
report on H.R. 2095 that the public health and safety threat posed by 
these acres may exceed those of eligible but lower priority pre-August 
3, 1977, sites. H.R. Report No. 294, 101st Congress, 1st Session 24 
(1977).
    Although not part of the amendments passed by Congress in 1990, the 
Secretary is utilizing his rulemaking authority granted under Section 
413(a) of SMCRA in establishing two additional subsections to 
Sec. 874.12. Subsection (f) provides that any monies recovered or 
available from other sources to reclaim sites abandoned after August 3, 
1977, should be either utilized to offset the cost of the reclamation 
or transferred to the AML Fund. This ensures that monies available for 
reclamation purposes are ultimately used for such purposes and not lost 
due to the intervention of Title IV activities. The operative language 
in the statutory amendments states that ``available funds are 
insufficient to reclaim'' the lands. This language addresses only 
availability and does not specifically state that the monies must be 
utilized. Subsection (f) resolves this ambiguity by requiring that the 
monies either be used to reclaim the land or transferred to the AML 
Fund if no longer needed to reclaim the entire permitted site.
    Subsection (g) is similar to the intent and purpose of subsection 
(f) in that it tries to prevent unjust enrichment. This subsection 
specifies that a person shall be liable for reclamation expenses which 
are in excess of any bond forfeited to ensure reclamation. The 
permittee shall reimburse the Abandoned Mine Land Fund for the cost of 
reclamation. This ensures that a party liable for the reclamation 
damages does not evade his legal and financial responsibilities to 
reclaim the land. Further, this subsection specifies that neither the 
Secretary nor a State or Indian tribe performing reclamation on these 
sites would be held liable for any Title V violations, whether they 
occur before, during or after the reclamation. As provided in 
Sec. 874.13(a), the reclamation activities need only comply with the 
AML Final Guidelines for Reclamation Programs and Projects (45 FR 
14810-14819, March 6, 1980). These requirements should protect the 
public and health and safety, while also protecting a State or Indian 
tribe or the Secretary from potential liability and provide the State 
flexibility to utilize its scarce resources in the most efficient 
manner.
    The Energy Policy Act of 1992 affected the eligibility criteria in 
two ways. First, Congress extended eligibility to lands which are 
reaffected by remining operations. OSM has added a new Sec. 874.12(h) 
to specify that surface coal mining operations on lands eligible for 
reclamation under SMCRA Sections 404 (abandoned prior to August 3, 
1977), 402(g)(4)(B)(i) (affected between August 3, 1977 and the date on 
which the Secretary approved the State program pursuant to Section 
503), and 402(g)(4)(B)(ii) (affected between August 3, 1977 and 
November 5, 1990) would not affect the eligibility of such lands for 
reclamation and restoration following the release of the bond for any 
such operation as provided for under Section 519 of the Act. In the 
event the bond or deposit for a surface coal mining operation on lands 
eligible for remining is forfeited, funds available under Title IV of 
the Act may be used if the amount of such bond or deposit is not 
sufficient to provide for adequate reclamation or abatement, except 
that if the conditions warrant, the Secretary may immediately exercise 
his emergency authority under Section 410 of the Act. The regulatory 
text tracks the amended language of SMCRA and is not intended to impose 
additional requirements.
    One commenter stated that Section 402(g)(4)(B)(i) does not seem to 
require that eligible interim sites must be abandoned prior to primacy. 
Specifically, mining must have ``occurred during the period beginning 
on August 4, 1977, and ending on or before the date in which the 
Secretary approved a State program * * *'' (emphasis added). Mining 
activities prior to August 4, 1977 may be eligible as provided under 
Section 404 of SMCRA. According to the commenter, mining activities 
occurring after States achieved primacy should be eligible to the 
extent that ``mining occurred'' during the statutory period and those 
mining activities were not conducted under authority of permanent 
program permits. Not until after State primacy was granted were 
operators confronted with the new mining constraints and required to 
make a decision as to whether they would proceed with mining under 
permanent program permits. The interim program regulations, 30 CFR 
773.11, allowed operators eight months after primacy to obtain these 
permits. In reality, it took much longer. If they did not proceed, 
abandonment and forfeiture frequently occurred in some cases, several 
years after primacy. The commenter did not believe Congress desire to 
exclude these sites from eligibility through Public Law 101-508. The 
Civil Penalty program which funds reclamation of similar forfeiture 
sites does not preclude reclamation of sites mined after State primacy.
    The commenter said that the interim reclamation program is, in many 
respects, a continuation of the Civil Penalty program, and, therefore, 
the cut-off date should be the date of the issuance of the permanent 
program permit for the site, if there was one. In other words, eligible 
interim sites should be defined as sites without permanent program 
permits where mining activities occurred during the period beginning 
August 4, 1977, and ending on or before the date at which the State was 
awarded primacy.
    Similarly, the commenter believes that site eligibility under 
Section 402(g)(4)(B)(ii) should be addressed in the same manner with 
the further requirement that the surety of the mine operator became 
insolvent sometime during the period from August 4, 1977 through 
November 5, 1990. A literal interpretation of Sec. 874.12(d)(3) may 
require that mining end exactly on November 5, 1990. The section seems 
to extend eligibility for Title IV funding to primacy sites. The 
commenter asked if this possibility is consistent with OSM's position.
    OSM has not accepted this comment. Although OSM realizes that 
certain interim sites were allowed to exist after a State received 
primacy, the language of the 1990 amendments does not allow 
flexibility. The amendment states that it applies to coal operations 
abandoned between two specific dates. The ability to alter those dates 
does not exist.
    Another commenter stated that OSM appears to favor retention by 
States and Indian tribes of flexibility in determining standards to be 
achieved for these interim program and insolvent surety sites. The 
commenter asked how this flexibility will be implemented in a 
consistent manner by the various OSM Field Offices. The commenter 
believes that OSM must strive to assure consistent application of Title 
IV regulations and policies nationwide. Additionally, this commenter 
questioned whether environmental assessments were necessary for mined 
and permitted sites.
    OSM will develop the necessary guidance documents to ensure that 
the regulations are consistently applied by its Field Offices. In 
addition, OSM will be reviewing its procedures for complying with the 
National Environmental Policy Act (NEPA). OSM will ensure that all NEPA 
requirements are met.
    Another commenter stated that under the new SMCRA amendments post-
1977 sites which are in the immediate vicinity of a residential area or 
which have an adverse economic impact upon a community should be 
considered a priority 1 or 2 site. Furthermore, the commenter asserted, 
consistent with Section 402(g)(4)(E) of SMCRA, the State is the sole 
determiner of reclamation priorities and the extent of reclamation. 
This SMCRA section provides that if the reclamation priority of a post-
1977 site is the same or more urgent then sites eligible under Section 
404, the State may make the sole determination of the priority.
    OSM has accepted this comment in part. Sites that are in the 
immediate vicinity of a residential area or which have an adverse 
economic impact upon a community will be considered priority 1 or 2 
sites eligible for funding. Similarly, if a State makes a determination 
that the priority of a site is the same or more urgent than the 
reclamation priority of sites eligible under Section 404, and meeting 
the criteria in Sections 403(a) (1) or (2), that site automatically 
will become a priority 1 or 2 site eligible for funding.
    One commenter stated that Sec. 874.12(d)(2) expands eligibility to 
include interim program sites where bonds are insufficient to provide 
for adequate reclamation at the site. The commenter believes that the 
site would be eligible if mining ended before the date on which the 
Secretary approved a State program if the site qualified as a priority 
1 or 2. Further, Section 506(a) of the Act allows mining activities 
under the interim program for up to eight months beyond the date of 
primacy. The commenter believes that the interim period should include 
this eight month grace period, and in certain circumstances could even 
extend further. The commenter requested clarification of this section 
in order to assure that all sites which can be technically defined as 
interim could be considered under this section.
    OSM has examined this issue and, as discussed previously, the new 
amendments to SMCRA do not provide flexibility on this point. The dates 
on eligibility are specific and OSM does not believe that it has the 
authority to extend such dates to take into account the ``grace 
period'' mentioned in the comment.
    Several commenters noted that Sec. 874.12(d)(3) would expand 
eligibility to include sites where mining ended prior to November 5, 
1990 where the surety of the mining operator became insolvent and funds 
available from proceedings are not sufficient to provide for adequate 
reclamation at the site. In some States alternate bonding pools have 
been set up to provide a more economic method of such bonding 
opportunities. In these cases, the commenters stated, when an alternate 
bonding pool is insufficient, such sites should remain eligible and if 
the alternate bonding source is insufficient the State or Indian tribe 
should not incur any additional financial liability for the 
reclamation. The commenters requested clarification in this regard in 
the rules.
    OSM has not made any changes to its regulations based on these 
comments. The new amendments to SMCRA do not specifically prohibit 
eligibility for sites abandoned after 1977 in primacy States which 
utilize bonding pools. However, where bond pools are solvent and 
applicable, such sites would not be eligible.
    An additional commenter suggested that the term ``immediately 
available'' in Section 402(g)(4)(B)(ii) should be interpreted in the 
AML regulations to mean ``in-hand'' as illustrated by an account 
deposit entry on or before November 5, 1990. Any funds collected after 
that date and before completion of construction should simply be 
expended to pay billings, to the extent necessary to settle 
obligations, in preference to using grant funds. Money recovered in 
excess of remaining billings during construction and money recovered 
after project completion would be payable to the Fund, limited to the 
total cost and consistent with the statute. Bond recovered in excess of 
the total cost of reclamation and specific to the site would be 
returned consistent with surety law. Recoveries or settlements, not 
site specific, resulting from State actions would be managed at the 
discretion of the State.
    Another commenter urged OSM to revise the proposal in 30 CFR 
874.12(d)(3) to enable States with alternative bonding systems to 
qualify for Title IV monies on sites with insolvent surety bond. 
Further, this commenter does not believe that the proposed rule at 
Sec. 874.12(g) is consistent with OSM's established regulation at 30 
CFR 800.50(b)(2) (relating to the use of bond forfeiture funds). The 
commenter received notification in 1985 under 30 CFR 732.17 that its 
program was deficient, and subsequently revised its regulation in 
response to OSM's interpretation. The commenter's regulations now 
require permanent permit sites to be reclaimed to Title V standards; 
they do not allow for reclamation under Title IV requirements. If it is 
not OSM's intention that the relaxed reclamation standards suggested in 
30 CFR 874.12(g) be extended to insolvent surety sites that were 
permitted and eventually forfeited under a State's approved permanent 
regulatory program, OSM should clarify this in the regulation.
    This commenter believes that OSM could better meet its goal stated 
in the preamble (56 FR 57385), to ``* * * provide the State flexibility 
to utilize its scarce revenues in the most efficient manner,'' by 
eliminating the restrictions on funding eligibility at 30 CFR 874.12(d) 
(3) and (4) pertaining to other sources of funding and the AML priority 
1 and 2 criteria.
    OSM has accepted these comments in part. As stated before regarding 
another comment, the alternative bonding system in a State would 
normally foreclose the AML eligibility of sites abandoned after a State 
achieves primacy so long as the alternative system was solvent and 
applicable to the remaining work. This is a matter that may require a 
case-by-case determination. OSM does not however, believe that it has 
to adopt a definition of ``immediately available'' to mean ``in-hand''. 
The term ``immediately available'' is one that may depend on State 
specific criteria. OSM believes that it is necessary for each State to 
address this issue in its legal eligibility opinion. Furthermore, if a 
site is reclaimed using Title IV funds, there is no requirement that 
the site be reclaimed to Title V standards. The State bond pool where 
applicable, or the operator, is still liable for meeting the full Title 
V standards. The State AML program may design the reclamation it 
believes best addresses the situation within its own budget restraints 
and such reclamation could, but does not have to, meet Title V 
standards. Finally, OSM has not accepted that part of the comment that 
asked for the deletion of Sec. 874.12(d) (3) and (4). These 
requirements are found directly in the language of the 1990 amendments.
    One commenter stated that it was unclear whether the term ``site'' 
in 30 CFR 874.12(f) referred to the actual site where the AML funds are 
applied or the entire interim permit. This commenter stated that it 
would be more appropriate to use the term ``permit'' rather than 
``site''. The proposed regulation did not appear to give the State/
Indian tribe the authority to reclaim a priority 1 or 2 site within an 
interim permit site using AML funds and use the posted bond money, once 
collected, to supplement reclamation on other areas of the same permit, 
the commenter said. A scenario would be an interim program permit with 
incremental bonding that is currently under a time consuming bond 
forfeiture process. There is an extremely dangerous highwall requiring 
immediate attention on Bond Area A which has a $75,000 bond earmarked 
for this reclamation. The State/Indian tribe elects to apply for and is 
awarded $100,000 of AML funds to reclaim the dangerous highwall. After 
the highwall is reclaimed, the entire bond for all increments is 
collected. According to the proposed regulations, the State/Indian 
tribe could not retain the $75,000 earmarked for Bond Area A to 
supplement the remaining reclamation, but rather must reimburse the AML 
Reclamation Fund for the amount expended, unless the bond money was 
needed to do additional work at the site that was reclaimed with AML 
money.
    OSM has accepted this comment and has clarified the regulation to 
note that recovered monies need only be transferred if no further 
reclamation of the ``permitted site'' is required.
    Another commenter stated that it supported including of language in 
subsection (f) that would require the utilization of existing monies 
from bond forfeitures and likewise inclusion of language in subsection 
(g) to prevent unjust enrichment.
    The commenter believes the Act's language ``available funds are 
insufficient to reclaim[,]'' plainly suggest that those other funds 
must be expended on the reclamation in conjunction with the AML funds 
that might be dedicated to reclamation. The commenter believes that it 
is pivotal that the operator who defaulted on reclamation obligations 
remain liable, both for additional reclamation at the site where AML 
funds are expended in conjunction with available forfeiture funds, and 
further that the responsible entity be blocked from obtaining Title V 
permits until such time as both the site is reclaimed and all monies 
expended from AML awards be repaid to the State or OSM as appropriate.
    In Kentucky, for example, current law allows a party who has 
defaulted on reclamation obligations to regain access to new mining 
permits on abatement of violations and restoration of the site. It is 
important that violations that have been written against the 
responsible entity not be vacated, as one commenter suggested, to avoid 
both unjust enrichment and subsequent mining by an entity whose 
failures have been offset through the use of AML funds. Repayment 
should be included in subsection (g).
    Sections 874.12 (f) and (g) in the final regulations require the 
use of existing monies from bond forfeitures and avoids unjust 
enrichment of defaulting operators. The regulations require the 
permittee of a site to reimburse the AML fund for the cost of 
reclamation which is in excess of any bond forfeited to ensure 
reclamation.
    Another commenter stated that in providing that neither the 
Secretary nor the State performing reclamation is liable for Title V 
violations, the rules do not properly recognize that a third party 
performing reclamation pursuant to a State or Federal AML contract must 
meet the obligations of the National Pollutant Discharge Elimination 
System program under the Clean Water Act. This continuing obligation to 
control sediment and other parameters to assure that no water quality 
violations occur during reclamation should be clarified in the final 
rule or preamble.
    OSM has declined to make any changes to the regulations based on 
this comment. All AML programs are responsible for insuring that all 
Federal, State, or local permitting laws or requirements are met. There 
is nothing in SMCRA which relieves an AML agency from such 
responsibilities. This has been standard agency practice since the 
beginning of the AML program and is already clearly set forth in the 
1980 AML reclamation guidelines.
    Another commenter stated that it supported the statement in OSM's 
preamble to the proposed rules at page 57387 that the reclamation 
standards applicable to AML work on bankrupt surety sites and other 
post-August 3, 1977 sites are not those specified in Title V but 
instead are the AML program's reclamation guidelines. Any other 
interpretation would be inconsistent with past practice and would 
greatly inhibit effective AML work at these sites. OSM agrees with this 
comment and has made no changes to the final rules regarding 
reclamation guidelines.

Section 874.13  Reclamation Objectives and Priorities

    This section sets forth the reclamation priorities listed in 
Section 403(a) of the Act. The provisions in this regulation have been 
expanded and clarified. Subsection (a), like the original Sec. 874.13, 
specifies that reclamation projects, as applicable, should be 
accomplished in accordance with OSM's ``Final Guidelines for 
Reclamation Programs and Projects'' (45 FR 14810-14819, March 6, 1980). 
Subsection (b) specifies that the priorities in Section 403(a) of the 
Act be followed.
    To implement the directive that AML resources be directed to the 
highest priority problems, OSM is including a new requirement in 
Sec. 874.13(b) specifying that, in general, lower priority projects 
(priority 3 or below) should only be undertaken if (1) All known higher 
priority projects either have been addressed or are in the process of 
being reclaimed (i.e., included in a current grant request) or (2) such 
lower priority projects are undertaken in conjunction with a priority 1 
or 2 site. However, it must also be noted that final rule language 
differs from that proposed in that the word ``generally'' has been 
inserted in Sec. 874.13(b). This was done to expand the original 
proposed language to allow greater flexibility in performing lower 
priority reclamation work.
    Two commenters questioned whether OSM would allow States to do 
priority 3 projects when remaining priority 1 or 2 projects are either 
in the process of being reclaimed or should be deferred (e.g., due to a 
potential for private reclamation, lack of adequate reclamation 
technology, lack of landowner consent, or proper grant management).
    One commenter noted that the proposed Sec. 874.13(b) states that 
projects lower than a priority 2 may not be undertaken until all known 
high priority projects have been or are in the process of being 
reclaimed, are funded, or are done in conjunction with priority 1 or 2 
sites in accordance with OSM's ``Final Guidelines for Reclamation 
Programs and Projects'' (1980 Guidelines). The commenter notes that the 
selection criteria in the 1980 Guidelines require that the following 
criteria, among other things, be considered prior to selecting sites 
for reclamation:
     Landowner consent for post reclamation maintenance
     Public and/or multiple benefits
     Probability of success using current technology
     Future remining potential
     Post reclamation plan use benefits
    In response to these comments, OSM has included the word 
``generally'' in the final regulation in order to allow greater 
flexibility in performing lower priority reclamation work. Further, OSM 
recognizes that site-specific situations related to the criteria listed 
above can develop which may require postponement of priority 1 or 2 
sites. If this occurs, and no other priority 1 or 2 sites are available 
or meet the selection criteria of the Guidelines, a State or Indian 
tribe may reclaim lower level priorities if it is consistent with the 
State or Indian tribe's approved Reclamation Plan and such work 
reflects the order of priorities listed in Section 403 of the Act. 
Likewise, there may be instances when a State or Indian tribe is aware 
of eligible land previously affected by coal mining but believes it 
does not warrant expending AML funds to restore or reclaim that area 
since current site conditions do not warrant consideration under the 
priorities established under the Act. Also, where a landowner refuses 
access to the property, reclamation need not be undertaken unless site 
conditions meet the standards established in Section 407(a) (1) and (2) 
and the State/Indian tribe reclamation plan provides a mechanism for 
implementing Section 407 at the subject site. Postponement of higher 
priority sites in accordance with the 1980 Guidelines, for reasons 
beyond the control of the administering agency, does not preclude a 
State/Indian tribe from utilizing State share funds for lower priority 
work, as long as all discretionary funds still go toward priority 1 and 
2 work. The regulations have been revised to add this flexibility. The 
general rule, however, is that the States/Indian tribes should follow 
the priorities in the order stated; lower priority projects should be 
undertaken in conjunction with high priority projects. In addition, 
Federal share funds cannot be utilized to fund lower priority projects 
due to the specific limitations in the 1990 amendments.
    Additional guidance concerning the reclamation of lower priority 
projects in conjunction with the reclamation of higher priority 
projects is found in OSM's ``Final Guidelines for Reclamation Programs 
and Projects'' (45 FR 14810-14819, March 6, 1980).
    Although no regulatory changes have been proposed, OSM notes that 
the Energy Policy Act of 1992 deleted the fourth priority regarding 
coal research originally found in Section 403(4). OSM has notified all 
States that grant requests for research funding pursuant to Section 
403(4) of SMCRA is no longer authorized.

Section 874.14  Utilities and Other Facilities

    Section 874.14 sets forth the requirements for funding water 
projects, including the protection, repair, replacement, construction, 
or enhancement of facilities relating to water treatment, supply or 
distribution. In the 1990 amendments to SMCRA, Congress specifically 
recognized the severe public health hazards that are associated with 
water supplies contaminated by abandoned coal mine workings. As pointed 
out in the Committee report accompanying H.R. 2095:

    For many areas of the Appalachian Region groundwater resources 
used for household water supply have been contaminated as a result 
of drainage from abandoned underground and surface mines. The 
Committee strongly believes that when abandoned mines have degraded 
groundwater quality or depleted groundwater quantity to such an 
extent that citizens no longer have an acceptable supply, an adverse 
impact on health, safety and the general welfare is self evident.

H.R. Report No. 294, 101st Congress, 1st Session 24 (1989).
    To reflect the new provisions regarding the funding of water 
projects, OSM is promulgating a new Sec. 874.14. Subsection (a) 
provides that a State/Indian tribe not certified under Section 411(a) 
of the Act may expend up to 30 percent of the funds granted annually 
from State share or historic coal distribution share to such State or 
Indian tribe for the purpose of protecting, repairing, replacing, 
constructing, or enhancing facilities relating to water supply, 
including water distribution facilities and treatment plants, to 
replace water supplies adversely affected by past coal mining 
practices.
    Subsection (b) implements Section 403(b)(2) of the Act by modifying 
the eligibility standards in 30 CFR 874.12(b) by stating that the water 
supply projects remain eligible if the State or Indian tribe finds in 
writing that the adverse effects to the water system processes are due 
predominately to effects of mining processes undertaken and abandoned 
prior to August 3, 1977.
    Subsection (c) as proposed would have provided criteria for not 
only funding projects to repair or replace existing water facilities, 
but also to enhance them. In order to receive monies to enhance public 
facilities, States would have had to demonstrate and the Director 
concur in the finding that: (1) Monies from other sources are either 
not available or such other sources are contributing their fair share 
of construction funds, (2) there is an urgent need to undertake the 
project which gives it the same or higher priority than projects 
remaining, and (3) the enhancement of the facility is necessary to 
achieve the objectives set forth in Title IV of SMCRA. These 
requirements, however, have been removed from the final rules based on 
the comments received.
    Several commenters objected to the detailed requirements set forth 
in proposed Sec. 874.14(c) regarding alternative funding sources for 
water projects. They state that the statutory language in Section 
403(b) and its legislation history do not provide any basis for this 
financial information. If a State chooses to fund a water project 
involving water supplies predominantly contaminated prior to August 3, 
1977, and that condition is a hazard to human health and safety, OSM, 
they believe, should have no discretion to disapprove it. The 
availability of other funding sources is irrelevant to the inquiry.
    Some commenters objected further by stating that OSM has no 
authority to require documentation that the water supply is a public 
health hazard. Many of the typical mine drainage pollution constituents 
such as iron, manganese and sulphur are considered secondary 
recommended water quality parameters. They believe that it is almost 
impossible to establish a direct health hazard without extensive 
research that might take years to accumulate at a significant expense. 
Water supply loss and quantitative diminution, as well as qualitative 
damage to ground supplies, should be accorded the highest priorities 
for abatement, giving particular emphasis to the loss of or damage to 
private water wells where no public water supply system is available as 
an alternative source of water. The treatment of AML projects related 
to replacement of water supplies damaged in quality or quantity by past 
mining, as priority 5 projects, is inconsistent with the language of 
the Act and with the expressed legislative concern.
    Two commenters agreed with OSM's conditions on the funding of 
projects related to the construction or enhancement of water 
facilities. These commenters also urge OSM to adopt further limitations 
which were discussed in the proposed rule preamble and to deny funding 
for projects when the agency cannot by clear and convincing evidence 
determine the extent to which problems result from past mining 
practices or their non-AML problems. Even priority 5 projects must 
involve facilities adversely affected by coal mining.
    OSM has reviewed carefully all comments regarding water projects 
and, as urged by the vast majority of commenters, has decided to delete 
the requirements regarding alternative funding sources. The States and 
Indian tribes have been granted the exclusive responsibility to 
administer their AML programs. This approval carries with it the 
responsibility to administer the AML program in an efficient manner and 
to carefully consider all expenditures. States are responsible for 
specific funding selections; however, compliance with the State's 
approved reclamation plan is subject to OSM oversight. States/Indian 
tribes are granted only limited funds, and it is ultimately their 
responsibility to use such monies wisely.
    The Energy Policy Act of 1992 also affected the eligibility 
criteria as they relate to water projects specified in Section 403(b) 
of SMCRA and 30 CFR 874.14 of the proposed regulations.
    In 1992, as part of the Energy Policy Act amendments to Title IV, 
Congress extended authority to States and Indian tribes to undertake 
water projects on lands eligible under Section 402(g)(4) of SMCRA, that 
is, certain lands affected after August 3, 1977. Accordingly, projects 
now remain eligible for reclamation if the States or Indian tribes find 
that the adverse effects to the water supplies are due predominantly to 
effects from mining practices undertaken prior to November 5, 1990 (see 
dates listed in Section 402(g)(4) of SMCRA). To implement this 
statutory requirement, OSM has deleted proposed paragraph (c) as 
discussed above and replaced it with a new paragraph (c) regarding the 
eligibility of water supply projects. The new language in paragraph (c) 
tracks the statutory requirements; no comments are therefore needed.
    Finally, a new subsection (d) is added stating specifically that an 
enhancement of a facility or utility would include upgrades necessary 
to meet local, State, or Federal health, safety or other applicable 
code requirements. For example, access ramps for handicapped 
individuals would be eligible improvements. Enhancement would not 
include, however, any service area expansion of the utility or facility 
which is not necessary to address a specific AML problem. For example, 
if a water system is damaged by subsidence, a State could possibly 
increase the size of the replacement pipes for the water system and 
thereby increase the carrying capacity. The State, however, would not 
be allowed to use AML funds to extend the water system to an area or 
town not adversely affected by the AML problem.

Section 874.15  Limited Liability

    A new Sec. 874.15 (Limited liability) reiterates the language of 
Section 405(l) of SMCRA which provides that no State or Indian tribe 
shall be liable under Federal law for any costs or damages as a result 
of any action or omitted action while carrying out an approved 
abandoned mine reclamation plan. This section, however, does not 
preclude liability for gross negligence or intentional misconduct by a 
State or Indian tribe. OSM intends to conduct discussions with the 
Environmental Protection Agency (EPA) regarding the funding of projects 
which may be eligible under the Comprehensive Environmental Response 
Compensation and Liability Act of 1980 (CERCLA).
    One commenter sought clarification of the language in 30 CFR 874.15 
as to whether this provision limits liability only under SMCRA or also 
under other Federal laws. The statutory language limits liability under 
all Federal laws, not just SMCRA, in carrying out an approved State or 
Tribal abandoned mine reclamation plan.

Section 874.16  Contractor Responsibility

    A new Sec. 874.16, ``Contractor responsibility'' has been added to 
the regulations. This regulation specifies that to receive AML funds 
every successful bidder for an AML contract must be eligible under 30 
CFR 773.15(b)(1) at the time of contract award to receive a permit or 
conditional permit to conduct surface coal mining operations. Such 
eligibility must be confirmed by OSM's automated AVS.
    In the proposed rules published November 8, 1991, 56 FR 57376, 
57401, OSM had proposed a similar provision as part of the state grants 
provisions in 30 CFR part 886. This provision would have established a 
grant condition requiring States, prior to contract award, to ensure 
that a successful bidder for a project funded by the grant is not 
precluded under Sec. 773.15(b)(1) from receiving a permit or 
conditional permit to conduct surface coal mining operations. To 
satisfy this condition, the State would have had to check OSM's 
automated AVS for each contract to be awarded, and verify such 
information with OSM. By making those who are listed as violators or 
linked to violators through ownership or control ineligible for AML 
contracts, OSM intended to deny those certain parties the opportunity 
to share in the utilization of public AML funds.
    Due to comments regarding grant conditions and the applicability to 
Federal agencies, OSM decided to move the provision to Part 874--
``General Reclamation Requirements''. By placing the requirement in 
this part, OSM is able to specify that the section applies to both the 
Federal Government and the States/Indian tribes. If the State or Indian 
tribe does not now have the legal authority to implement such 
requirements, then pursuant to 30 CFR 884.15, the State or Indian tribe 
must adopt the appropriate statutory and/or regulatory authority as an 
AML plan amendment. OSM will cooperate with the States and Indian 
tribes to assist in making the required statutory and/or regulatory 
changes and provide a phase-in period as determined on a case specific 
basis that takes into account the particular regulatory process in each 
jurisdiction. OSM considers the implementation of these changes to be 
an important priority item in view of the shared OSM and State/Indian 
tribe commitment to implement this concept and will work to achieve 
prompt action.
    The requirement in Sec. 874.16, as now formulated, stipulates that 
in order to receive a contract to conduct AML activities, a person must 
be eligible under the regulations implementing Section 510(c) of the 
Surface Mining Act to receive permits the regulations implementing to 
conduct surface coal mining activities. This provision provides a tool 
to OSM as well as the States/Indian tribes to help them prevent persons 
with outstanding violations from conducting further mining or AML 
reclamation activities in the State. Those persons who have outstanding 
violations should not be allowed to benefit under Title IV of SMCRA 
while such outstanding violations exist. Preclusion of Title IV 
contract eligibility to persons owning and controlling surface coal 
mining operations encourages compliance with Title IV and V 
requirements by persons seeking AML contracts.
    While OSM believes that there are a number of methods which might 
be used by a State/Indian tribe to achieve this end, it acknowledges 
that an ``AVS check'' is probably the least burdensome and time-
consuming. However, such a check presupposes that the potential 
contractor has submitted ownership and control information and 
violation history information to either OSM or the State regulatory 
authority, for entry into the AVS. Once such data entry is 
accomplished, the workload and time delay impacts on the Federal 
Government, the State, or the potential contractor, should be minimal. 
OSM, through its AVS Office in Lexington, will provide assistance to 
any potential contractor to enter needed information into the AVS.
    In order to provide information that will allow the States to meet 
this requirement, potential contractors may submit to either OSM or the 
State regulatory authority that ownership and control information 
enumerated at 30 CFR 778.13(c) and (d). OSM believes that it is not 
necessary to require other information listed in 30 CFR 778.13 and 
778.14 from potential AML contractors. The AVS contains extensive 
information on the ownership and control relationships and violation 
history of a large majority of persons with outstanding violations of 
the Act. This information should prove sufficient, when compared to the 
information submitted by the potential contractor, to ensure that the 
contractor is eligible under Section 510(c).
    Several commenters stated that OSM's proposal to deny AML contracts 
to successful bidders who may be listed on OSM's AVS, though appearing 
sensible, has serious problems which need to be addressed before a 
final rule is adopted.
    One commenter outlined 8 problem areas. The following is a response 
to those highlighted problems.
    1. Pre-certification process. The commenter expressed concern that 
AML emergency projects could be delayed for many weeks pending receipt 
of contractor eligibility checks from the AVS office. This commenter 
suggests that OSM adopt a pre-certification procedure in order to 
facilitate the contracting process and to prevent such delays.
    OSM will be available to work with any prospective AML contractor 
to enter required ownership and control information into the AVS. AVS 
Office staff in Lexington, Kentucky, routinely work with industry to 
ensure that such information is complete and up-to-date. Once this 
information is in the system, an AVS check requires a few minutes. 
There is no requirement for a company to be actively seeking an AML 
contract before it provides such ownership and control information to 
OSM. Accordingly, OSM does not see any need to establish a formal pre-
certification procedure, nor does it anticipate time consuming delays 
in achieving an AVS check.
    Inquiries regarding AVS matters can be handled simply and 
efficiently. They can be, and generally are, made by telephone. 
Responses to such inquiries are routinely given in a matter of minutes, 
not hours or days. In order to facilitate such requests, OSM's AVS 
Office Program Support Branch maintains a toll free number, 1-800-643-
9748, that is available to answer eligibility questions. Further, 
permit eligibility queries can be made by telephone, facsimile, in 
person, or by overnight or regular mail directly to the AVS at its 
Washington, DC. Headquarters, or at its Lexington, Kentucky, Field 
Office. All State offices have similar capabilities to process AVS 
checks.
    OSM believes that companies bidding on projects should have the 
responsibility to remain eligible to receive contracts by maintaining 
current ownership and control information in the AVS system, and 
avoiding the occurrence of violations which would make them ineligible.
    2. Contract mining arrangements. The commenter is concerned that 
companies who provide construction services to a mining company which 
is permit blocked might be prevented from bidding on an AML project 
because of their relationship to the blocked company. OSM holds 
entities which ``own or control'' operations with outstanding 
violations of the Surface Mining Act responsible for those violations. 
Depending on the specific nature of the relationship between the 
company seeking the AML contract and the blocked company, the AML 
contractor may or may not be blocked. If the AML contractor simply 
provided construction services to the blocked company, and was 
therefore not an ``owner or controller'' of the operation in violation, 
the AML contractor would not be blocked. On the other hand, if the AML 
contractor was an owner or controller of the operation with the 
violation, it would be blocked--which is the intent of this regulatory 
provision.
    3. State contracting authority. The commenter said that OSM did not 
consider the impact of the regulation on State contracting systems.
    OSM has considered the overall impact that complying with the 
requirements of the regulation would have on reclamation contracting 
procedures. It has concluded that the impact would be very slight. This 
is especially true if the burden is placed on bidders to show their 
eligibility early in the bidding process. (See 2 above).
    4. Lack of statutory authority. A commenter said there is no 
authority under SMCRA to regulate construction contractors. Therefore, 
the regulation attempts to do what the Statute does not permit.
    OSM disagrees. Section 201(c)(2) of SMCRA, 30 U.S.C. 1211(c)(2), 
authorizes the Secretary to ``publish and promulgate such rules and 
regulations as may be necessary to carry out the purposes and 
provisions of this act.'' This grant of power is repeated in Section 
413(a) of SMCRA, 30 U.S.C. 1243, which provides that ``the Secretary or 
the State pursuant to an approved State program, shall have the power 
and authority, if not granted it otherwise, to engage in any work and 
to do all things necessary or expedient, including the promulgation of 
rules and regulations, to implement and administer the provisions of 
this title.''
    OSM is of the opinion that these statutory grants of power amply 
support the authority of the Secretary to promulgate this regulation.
    5. APA requirements. The commenter claims that 30 CFR 773.15(b)(1) 
was not intended to be applied to contractors bidding on AML projects. 
To apply it now is contrary to the Administrative Procedures Act (APA).
    OSM disagrees. OSM complied with all requirements of the APA in 
promulgating and adopting 30 CFR 773.15(b)(1), and is complying with 
all such requirements in promulgating this rule. This requirement was 
discussed in the proposed rule published November 8, 1991 (56 FR 57376, 
57401). OSM has received many comments on this proposed rule and after 
carefully considering these comments, has decided to promulgate this 
final rule with only slight modifications.
    6. Constitutional challenge. The commenter claims that the 
ownership and control rules adopted October 3, 1988, are 
constitutionally deficient.
    OSM disagrees. This question has already been raised, and is 
currently being considered by the United States District Court for the 
District of Columbia, National Wildlife Federation v. Lujan, No. 88-
3117 (D.D.C.), (consolidated with Nos. 88-3464, 88-3470). The court has 
not yet ruled, nor did it enjoin OSM from enforcing the rule during the 
pendency of the court challenge. OSM considers its actions to be 
proper.
    7. Innocent parties. The commenter said that innocent individuals 
are being prevented from pursuing their occupations simply because of 
their past associations.
    OSM disagrees. Congress, in adopting Section 410(c) of SMCRA, 30 
U.S.C. 1260, did not believe that individuals who own or control 
operations with outstanding violations were ``innocent'' but instead 
should be held accountable. All such persons have an opportunity to 
rebut their ownership or control relationship to the violator. If they 
cannot rebut this relationship, OSM believes it to be appropriate, as 
well as consistent with Congressional intent, to prevent such 
individuals from mining or benefiting from mining and reclamation 
activities.
    8. Unnecessary burden. The commenter says that adopting this rule 
will cause an unnecessary burden because there is no limitation on how 
far up or across the ownership and control chain an applicant must go 
in providing information.
    OSM disagrees. As mentioned earlier, this rule does not impose 
separate information submittal requirements. In many instances, 
information currently contained in the AVS will suffice. OSM currently 
has proposed new ``permit information'' provisions in relationship to 
AVS ownership and control requirements, Proposed Rule, Use of the 
Applicant/Violator Computer System in Surface Coal Mining and 
Reclamation Permit Approval, 56 FR 45780 et seq., (September 6, 1991). 
As part of the process of considering comments on this proposal and 
finalizing the rule, OSM is considering issues related to the limits 
placed on permit information requirements.
    In addition to the eight issues raised by the above commenter, 
other commenters stated their opposition to the proposed rule, on the 
basis that it would (a) be contrary to State contracting law and 
unenforceable; (b) be time consuming; and (c) needlessly intrude upon 
State sovereignty.
    OSM disagrees with all these points. In addressing (a), OSM notes 
that States must adopt statutes and regulations that implement the 
Federal requirements. Accordingly, if this requirement does conflict 
with State contracting laws, the States will be required to remedy this 
situation by adopting the appropriate statutory and regulatory 
authority. As previously noted, OSM considers the adoption of these 
statutory and/or regulatory changes to be an important priority item. 
OSM will cooperate with the States and Indian tribes to assist in 
making required changes and provide a phase-in period as determined on 
a case specific basis that takes into account the particular regulatory 
process in each jurisdiction. As to (b), as OSM noted above under 1, 
AVS checks can be performed very rapidly. Furthermore, regarding (c), 
OSM does not believe this intrudes upon State sovereignty. Rather, OSM 
believes that this regulation represents an additional tool to be used 
by the States to ensure that mining and reclamation activities are 
conducted to the highest possible standards by the most qualified and 
responsible persons available.
    Another commenter noted that the rule was unnecessary, since States 
already have the ability to prevent contractors from receiving AML 
contracts based on their record of past performance and other factors 
without mandatory AVS checks. OSM points out that this regulation 
requires mandatory AVS checks. That is, it requires that a successful 
bidder for an AML contract be eligible to receive permits to mine under 
30 CFR 773.15.

Part 875--Noncoal Reclamation

General
    Part 875 sets forth the requirements for reclamation of noncoal 
mined lands and water conducted under Title IV of SMCRA by State and 
Indian Reclamation Programs. OSM is altering the contents of several 
provisions and adding additional subsections to reflect Congress's new 
directive regarding the funding of noncoal projects. Sections 875.1 and 
875.11 are not being revised. In essence, Congress has created a two-
tiered process for addressing noncoal problems. Prior to completing all 
known coal problems, Congress has limited a State's/Indian tribes's 
ability to do noncoal work. This is shown in Sec. 875.12. A State/
Indian tribe desiring to implement a greatly expanded noncoal 
reclamation program (see Secs. 875.14-19), or what could be called the 
second tier, would first have to certify that it had completed all 
known coal problems and the Director would have to concur in the 
finding (see Sec. 875.13).
    Section 409 of SMCRA, as enacted in 1977, authorized States and 
Indian tribes to undertake noncoal reclamation activities if: (a) the 
Governor of a State or the Chairman of an Indian tribe requested 
funding and the State had either completed all known coal reclamation 
objectives or (b) if coal problems remained, the project for which 
funding was requested was necessary to protect the public health and 
safety. The Secretary has no independent authority to undertake noncoal 
reclamation activities, and only the States and Indian tribes, 
utilizing AML funds allocated pursuant to Section 402(g)(2) (as amended 
in 1990, this section is now Section 402(g)(1)), could carry out such 
tasks.
    In 1982 OSM established the eligibility criteria for noncoal 
projects utilizing its rulemaking authority under Section 412(a) of 
SMCRA. Essentially, the eligibility criteria that applied to coal were 
also applied to noncoal. OSM had reviewed the legislative history of 
Section 409 and concluded that Congress intended the eligibility 
requirements for noncoal reclamation be consistent with the statutory 
eligibility requirements contained in Section 404 of SMCRA that applied 
to coal mined lands and waters. Since the source of the funds for all 
reclamation conducted under Title IV of SMCRA comes from a fee 
collected from coal mine operators, less stringent requirements for 
noncoal reclamation cannot be logically justified in fairness to the 
coal mine operators. Moreover, there is no basis in the legislative 
history of Section 409 (30 U.S.C. 1239) to justify a conclusion that 
Congress intended to allow funding for reclamation on noncoal mineral 
lands and water abandoned after August 3, 1977.
    The noncoal regulations did not contain a definition of what 
constituted a threat to the public health and safety (i.e. in order to 
receive funding for a noncoal project prior to the completion of all 
coal problems) nor did they explicitly establish a formal procedure to 
follow regarding the transition from a coal reclamation program to a 
noncoal reclamation program.
    As to the issue of what constituted a threat to the public health 
and safety, OSM did establish a policy providing that: (a) There must 
be a clearly definable threat; (b) the threat must present a danger 
that results in a high probability of serious physical harm to the 
health or safety of people; (c) the threat cannot await resolution 
until all coal projects have been completed; (d) the project must be 
necessary and appropriate to abate, control, or prevent the threat; and 
(e) there is no private party legally responsible under any other 
Federal or State law to abate, control, or prevent the threat.
    Similarly, in regard to a State's transition to a noncoal program, 
OSM established a procedure requiring a specific review of a State's 
finding prior to funding noncoal projects. The significant features of 
the procedure were: (1) Coordination with the State regarding its 
finding that all coal problems had been addressed; (2) notification of 
the public, through publication in the Federal Register, regarding the 
State's finding of the completion of all coal problems and/or specific 
request for comments; and (3) assuring no known coal problems are 
unaddressed and an agreement with the State that if eligible coal 
problems occur in the future, the State would give such projects its 
highest funding priority.
    OSM has in the past provided flexibility to the States in making 
the finding that all known coal problems have been addressed. This was 
done in two specific ways. First, OSM did not order an independent 
analysis of the State's certification since such an analysis would not 
only be time consuming and costly, but it could cause an unnecessary 
disruption of the efficient distribution of funds to the State (i.e. no 
monies would be granted to a State until a study had been completed). 
Second, the Secretary did not require that all coal projects actually 
be completed; rather, it was sufficient that all coal problems had 
either been addressed or were in the process of being addressed through 
a current grant application. Again, the rationale for not waiting until 
the coal projects were completed was to avoid, as much as possible, an 
interval where the State's administrative staff would be idle awaiting 
the completion of one final project. OSM believes this process was in 
accord with the Congressional mandate in Section 405(d) granting the 
State ``exclusive responsibility and authority to implement the 
provisions of its approved program.''
    Such flexibility, OSM believed, was warranted since it provided for 
the efficient utilization of funds and personnel and did not jeopardize 
the State's ability to address any coal problems which might have been 
missed or might arise in the future. In order to obtain the Secretary's 
concurrence that all known coal problems had been addressed, a State or 
Indian tribe would have to agree to give any coal problem which might 
arise in the future its top funding priority. Thus, the transition from 
a coal program to a noncoal program did not jeopardize funding future 
coal reclamation and allowed States flexibility in how they utilized 
their funds and planned for the transition.
    The amendments to Title IV enacted in 1990 significantly affect how 
and when a State/Indian tribe undertakes noncoal reclamation 
activities. There are eight major provisions.
    First, prior to the completion of all coal problems, a State or 
Indian tribe now can undertake only noncoal projects which protect the 
public health, safety, general welfare, and property from the extreme 
danger of the adverse effects of mining practices. In other words, a 
priority 1 type of project (see Section 403(a) of SMCRA).
    Second, the amendments specifically adopt the same eligibility 
requirements that are applicable to coal reclamation work.
    Third, following certification by a State or Indian tribe of the 
completion of all known coal problems and the Secretary's concurrence, 
the State or Indian tribe may establish a noncoal reclamation program 
which utilizes the top three priorities applied to coal projects 
(extreme danger, danger, and environmental--Section 411(c)); 
establishes eligibility criteria for lands and water which are similar 
in most respects to the criteria originally enacted in Section 404 of 
SMCRA in Public Law 95-87; and utilizes the same lien requirements and 
land acquisition authorities that would be applicable to coal.
    Fourth, Congress specifically expanded the scope of funding 
involving projects relating to the protection, repair, replacement, or 
enhancement of facilities utilized by the public which are affected by 
coal or noncoal mining activities.
    Fifth, Congress adopted language which would allow the Secretary to 
approve funding for projects where the Governor of a State or the head 
of a governing body of an Indian tribe determined there is a need for 
activities or construction of specific buildings or facilities related 
to coal or mineral industry in States or on Indian lands impacted by 
coal or minerals development.
    Sixth, Congress specifically prohibited funding for projects which 
are designated for remedial action pursuant to the Uranium Mill 
Tailings Control Act of 1978 (42 U.S.C. 7901) or which have been listed 
for remedial action pursuant to the Comprehensive Environmental 
Response Compensation and Liability Act of 1980 (42 U.S.C. 9601).
    Seventh, Congress enacted limited immunity for States and Indian 
tribes under any provision of Federal law for any costs or damages as a 
result of action taken or omitted in the course of carrying out an 
approved abandoned mine reclamation plan.
    Eighth, Congress provided that nothing in the amendments should be 
construed to affect the certifications made by the States of Wyoming, 
Montana, and Louisiana.
    To explain these eight major revisions to the noncoal reclamation 
authority in SMCRA, OSM has made several amendments to part 875.
Discussion

Section 875.10  Information Collection

    OSM added a Sec. 875.10 which deals with the information collection 
requirements contained in part 875. This section contains a list of the 
information collection requirements contained in part 875, the OMB 
clearance number, the estimated reporting burden per respondent for 
complying with the information collection requirements and the OSM and 
OMB addresses where comments regarding the information collection 
requirements may be sent.

Section 875.12  Eligible Lands and Water Prior to Certification

    OSM has established two eligibility sections. The first, 
Sec. 875.12, reflects Congress' directive to limit expenditures for 
noncoal projects until a State had certified that all known coal 
problems had been addressed. Subsection 875.12 specifically limits 
funding prior to certification to lands which were mined and abandoned 
prior to August 3, 1977; when there is no continuing reclamation 
responsibility; and when the project relates to the protection of the 
public health, safety, general welfare, and property from extreme 
danger of adverse effects of noncoal mining practices (i.e., a priority 
1 project--see Section 403(a) of SMCRA). SMCRA as enacted in 1977 was 
broader in scope and had allowed States to undertake noncoal projects, 
prior to completing all coal projects, if the noncoal project related 
to the protection of the public health and safety. OSM has tried to 
treat States and Indian tribes similarly. Thus, the language in 
Sec. 875.12 would provide that the Governor of a State or the 
equivalent head of an Indian tribe would have to request the noncoal 
funding.
    Congress directed the limiting language of Section 409 due to a 
perception that OSM had been lax in allowing the States to use funds 
for noncoal purposes prior to their certifying the completion of all 
known coal projects. By limiting noncoal projects to a priority 1 type 
problem (extreme danger), Congress intended to limit the use of AML 
monies for noncoal projects in States which had not completed all 
abandoned coal mine projects. H.R. Report No. 294, 101st Congress, 1st 
Session 32 (1977).
    The second eligibility section is Sec. 875.14 which greatly expands 
the noncoal reclamation capabilities of the States and Indian tribes 
and is only applicable after a State or Indian tribe has met the 
certification requirements set out in Sec. 875.13. This subsection is 
discussed after Sec. 875.13.
    One commenter stated the preference that noncoal AML reclamation be 
allowed as long as all known coal projects are completed or have been 
funded by OSM and the State/Indian tribe is in the process of 
certification. This would be in keeping with past practices and would 
allow the proper transition to noncoal reclamation.
    Another commenter stated that States/Indian tribes should be 
required to certify the completion of all coal problems prior to 
obtaining certification and the right to proceed to noncoal reclamation 
activities.
    OSM has decided not to place new limitations when noncoal projects 
can be initiated by the States/Indian tribes. Noncoal projects may be 
funded when all AML coal projects have either been accomplished or 
funds have been granted to carry out the remaining coal projects. If 
States/Indian tribes had to wait until the last coal projects were 
actually completed, the State AML staff might be idle for two or three 
years. Nothing would be gained by such a delay. OSM currently requires 
that if coal projects are identified, such projects must be given top 
priority by the States/Indian tribes. Thus, even though States/Indian 
tribes may be allowed to move on to noncoal projects prior to the 
actual completion of all coal reclamation activities, OSM is confident 
that coal work, whenever it is identified, will be given top priority. 
Moreover, given the certification review process, OSM believes that if 
known abandoned coal lands still exist, they will be identified through 
this review process. Once identified and brought to the State's/Indian 
tribe's attention, such coal projects would then have to be addressed 
before certification could be finalized.

Section 875.13  Certification of Completion of Coal Sites

    This section sets forth the requirements necessary for a State/
Indian tribe to fully implement a noncoal reclamation program. In order 
to fully implement a noncoal reclamation program as set forth in 
Section 411 of SMCRA, a Governor of a State or the equivalent head of 
an Indian tribe would have to certify to the Secretary, who has 
delegated this certification authority to the Director of OSM, that the 
State/Indian tribe had achieved all known coal related reclamation 
objectives (i.e., priorities 1 to 5). Section 875.13(a) provides the 
requirements for this certification. Briefly, a State/Indian tribe has 
to provide a discussion regarding the process and rationale for its 
certification, along with an analysis of the public involvement process 
it used and any public comments. These materials would assist the 
Director in his concurrence finding and ensure that the State/Indian 
tribe properly canvassed the public to ascertain whether, indeed, all 
coal problems had been addressed.
    Subsection (b) describes the Director's review of the certification 
process. At a minimum the Director would prepare a Federal Register 
notice informing the public of the State's/Indian tribe's proposed 
certification. After a review of the public comments and any other 
relevant information, the Director would publish a final notice 
regarding his decision. If the Director concurs in the State's/Indian 
tribe's finding, such concurrence would be premised on the State's/
Indian tribe's pledge to immediately give the highest priority to any 
coal problems which thereafter arise. If a coal problem does occur, the 
State/Indian tribe would carry out the coal reclamation activity under 
the State/Indian tribe authorities relating to coal and not pursuant to 
the noncoal authority in Section 411 of SMCRA.

Section 875.14  Eligibility of Lands and Water Subsequent to 
Certification

    This is the second eligibility section for noncoal. This subsection 
marks the beginning of the provisions relating to a State's/Indian 
tribe's noncoal reclamation program, a program which is only 
implemented after the requirements set forth in Sec. 875.13 have been 
met.
    The new eligibility requirements allow funding for lands, waters, 
and facilities which were mined and abandoned in an inadequate 
reclamation status prior to August 3, 1977, and for which there is no 
continuing reclamation responsibility under State or other Federal 
laws. In determining eligibility under this subsection, for Federal 
lands, waters, and facilities under the jurisdiction of the Forest 
Service or Bureau of Land Management, in lieu of the August 3, 1977 
date, the applicable dates are August 28, 1974 and November 26, 1980, 
respectively. As noted in H.R. Report 294, these dates refer to the 
promulgation of surface management regulations for Mining Law of 1972 
operations by these agencies. H.R. Report No. 294, 101st Congress, 1st 
Session 34 (1989).
    A subsection (b) has also been included in section 875.14 to 
clarify that if a coal problem is found or occurs after certification a 
State/Indian tribe is required to address this problem utilizing State/
Indian tribe share monies no later than the next grant cycle. No 
Federal share monies will be distributed to a certified State/Indian 
tribe regardless of whether coal problems occur. In addition, States/
Indian tribes would be required to address the coal problems utilizing 
its coal authority; that is, the State/Indian tribe plan provisions 
relating to Sections 401 through 410 of SMCRA.

Section 875.15  Reclamation Priorities for Noncoal Program

    This section establishes the reclamation priorities applicable to a 
State/Indian tribe noncoal reclamation program following the 
certification of all known coal problems. Reclamation projects 
involving the restoration of lands and water adversely affected by past 
mineral mining, as well as projects involving the protection, repair, 
replacement, construction, or enhancement of utilities, such as those 
relating to water supply, roads and other such facilities serving the 
public adversely affected by mineral mining and processing practices 
and the construction of public facilities in communities impacted by 
coal or other mineral mining, would have to reflect three priorities.
    The first priority is the protection of public health and safety 
and general welfare from the extreme danger of adverse effects of 
mineral mining processes. The second priority is the protection of 
public health, safety, and general welfare from the adverse effects of 
mineral mining. The third priority is the restoration of lands and 
waters previously degraded by the adverse effects.
    OSM notes that Section 411(c) of SMCRA only contains three 
priorities. There was some confusion, therefore, expressed by 
commenters regarding a fourth priority set forth in OSM's proposed 
rule. Based on comments received, and its review of the statutory 
language OSM has decided to delete this fourth priority in the final 
rule.
    OSM agrees with the commenters that the best way to deal with 
community impact assistance issues is not to create a fourth priority, 
but rather to follow the explicit language of the amendments to Title 
IV of the Act and to relate these projects back to one of the three 
priorities listed in Section 411(c) of SMCRA. Accordingly, OSM has 
deleted the reference to a fourth priority in the final rules. If a 
State wishes to undertake a project relating to community impact 
assistance pursuant to Section 411(e) of SMCRA, then it must prioritize 
such a project based on the priority language specified in Section 
411(c) of the Act.
    Subsection 875.15(c) addresses the issue of ``enhancement.'' The 
noncoal reclamation priorities provide for projects which protect, 
repair, replace, or ``enhance'' facilities or utilities that may be 
adversely affected by mining processes or practices. In order to 
provide some parameters involving the scope and size of ``enhancement'' 
projects, OSM's proposed rules contained detailed criteria relating to 
the availability of alternative funding sources. This information would 
have been used to assess the necessity for funding these types of 
projects. In response to comments received on the proposed rule, 
however, OSM has elected to drop these criteria. They are not mandated 
by SMCRA, and they could infringe upon the Congressional directive in 
Section 405(d) of SMCRA that States are to be given the exclusive 
responsibility and authority to implement the provisions of the 
approved program.
    States and Indian tribes will be allowed to enhance facilities or 
utilities in order to meet local, State, or Federal public health, 
safety or other applicable code requirements but would not be able to 
use AML funds to expand the service area of a utility or facility 
service to another area under Sec. 875.15(a), (b) or (c) if it is not 
necessary to address an AML problem. For example, although a State may 
replace and upgrade (enhance) a waterline damaged by past mining, it 
would not be able to use the authority in Section 411(e) regarding 
``enhancement'' to use AML funds to extend the waterline to a nearby 
community not impacted by the AML problem. We note, however, that such 
an extension might be authorized under the provisions of Section 
411(f).
    Subsection (d) addresses a new provision in SMCRA (Section 411(f)) 
which allows a State to request funding notwithstanding the priorities 
in Section 411(e) for a public facility if a Governor of a State or the 
head of a governing body of an Indian tribe determines there is a need 
for the construction of the public facility related to the coal or 
minerals industry in States or on Tribal lands impacted by coal or 
minerals development.
    The proposed rules had required extensive public review and 
detailed accounting of alternative funding sources. Many commenters 
objected to such requirements as being unauthorized by SMCRA and an 
intrusion into their ``exclusive responsibility'' to administer their 
approved program. Section 411(f) requires that where a State/Indian 
tribe determines there is a need for activities or construction, the 
Secretary must concur in that need prior to the funding of such 
activities or construction. It is clear that the State/Indian tribe 
must first justify a need and then OSM must concur. OSM is concerned 
that the AML Program, which is financed by a tax on coal production, 
not be ``side tracked'' from its primary mission to reclaim lands and 
waters damaged by coal and noncoal mining processes. Accordingly, prior 
to approval, projects involving the construction of facilities pursuant 
to Section 411(f) of SMCRA would be given extensive public review.
    Subsection (e) would specify that each State grant application for 
funding under Section 411(f) of SMCRA would have to include information 
regarding (1) the need or urgency of the activity or facility; (2) the 
expected impact on the mining industry in the State; (3) the 
availability of funding from other sources; (4) the impact on the State 
if the activity or facilities is not undertaken; (5) the reason why the 
project was selected over other projects related to the public health 
and safety or to the environment; (6) the extent of the public 
involvement in the State's decision, and (7) funding decisions made by 
other local, State, and Federal agencies with oversight for such 
facilities.
    These requirements would assist the Director in determining whether 
a ``need'' exists, whether the public has been fully appraised and 
informed of the request, and whether other Federal and State agencies 
with primary responsibility for such facilities or activities have been 
contacted and involved in the project design and funding request.
    Several commenters objected to the requirements regarding the 
submission of information on alternative funding sources for the 
construction or enhancement of public facilities relating to Section 
411(f) of SMCRA. The information is either not available or is 
irrelevant, they argued. The State or Indian tribe need only meet the 
requirements set out in Section 411 of SMCRA in order to qualify for 
funding. Other commenters questioned how the ``availability of funds'' 
from other sources could ever be documented. These commenters believed 
that all conditions other than those expressed in Part 411 of SMCRA 
should be deleted.
    OSM disagrees with this comment and has decided to retain 
requirements regarding the submission of alternative funding sources 
for the reasons discussed above. Since Congress has specifically 
directed that the Secretary concur in any State decision regarding the 
requirements set forth in Section 411(f) of SMCRA, OSM believes that 
this information is necessary to carry out such responsibilities.
    Commenters also stated that OSM needs to clarify the distinction 
between eligible assistance under Sections 411(e) and (f).
    OSM sees no need to provide further regulatory language clarifying 
the difference between Sections 411(e) and (f). Section 411(f) is 
clearly outside the normal reclamation priorities and may be utilized 
at any time after certification by the Governor of a State or head of a 
governing body of a Indian tribe if the criteria in Section 411(f) are 
met. OSM has not included detailed information requirements for public 
facilities funding provided pursuant to Section 403(b) or 411(e) of 
SMCRA. These sections specifically deal with facilities which have been 
adversely affected by past mining abuses. SMCRA does not require any 
concurrence by the Secretary for funding such projects. The scope of 
public facilities funded under Section 411(f) of SMCRA, however, is 
much greater. These projects are not related to any physical damage 
from past mining. Rather they relate solely to situations where the 
Governor of a State or equivalent head of an Indian tribe believes 
there is a need for the facility and the facility is related in some 
way to the coal or minerals industry in the State or Indian tribe. 
Under such circumstances, the Secretary must concur. OSM views this 
requirement and this situation as being distinct from other public 
facility funding.
    One commenter stated that neither Title IV nor the proposed AML 
rule defines the term ``minerals industry'' as it is used in Section 
411(f) of SMCRA. The commenter states that OSM should make it clear 
whether the definition is the same as that found in Title V of the Act.
    OSM agrees with the commenter. The term ``minerals industry'' as 
used in section 411(f) of SMCRA refers to the same minerals as are 
specified in Section 701(14) of SMCRA. However, no new regulatory 
provisions are required.
    A commenter stated that they did not believe that congress intended 
to allow for the construction of public facilities under Section 411(f) 
prior to reclamation of all adverse effects of past mining activities. 
Accordingly, the agency should include language mandating the 
completion of the priorities in Section 411(c) prior to approving any 
such funding.
    OSM disagrees with this comment and has made no changes to the 
final regulations as suggested. As stated previously, OSM interprets 
the language in Section 411(f) as being independent of the priorities 
specified in Section 411(c) of SMCRA. That is, a State Governor or head 
of a governing body of an Indian tribe may request funding for 
activities pursuant to Section 411(f) at any time after certification. 
There is no requirement that a State or Indian tribe complete all known 
noncoal reclamation before utilizing this authority. The commenters' 
premise is based on the original statutory language of Section 
402(g)(2) as enacted in 1977. This section provided that once a state 
had completed all of its coal and noncoal reclamation, it could utilize 
AML funds for community impact assistance. This old statutory scheme 
was deleted, and OSM can find no references in the legislative history 
which supports the commenter's position. Indeed, if the commenter's 
position were proper, logic would dictate that Congress would have 
merely made the language in Section 411(f) the last priority specified 
in Section 411(c) of SMCRA. This was not done, however, and there is no 
reference to the priority section. In the absence of restricting 
language in Section 411(f) or qualifying language in Section 411(c), 
OSM believes the proper interpretation is to permit States and Indian 
tribes to utilize the authority in Section 411(f) without regard to the 
completion of the priorities specified in Section 411(c).
    In line with the preceding rationale, OSM also declines to add the 
additional language urged by the commenter. This language does not 
specifically add any additional guidance that is not already available 
to the States and Indian tribes.
    Other commenters stated that they agreed generally with the need to 
establish criteria for funding noncoal construction projects, as set 
forth in proposed Sec. 875.15(d). However, they urged OSM to include a 
provision that would prohibit any funding from AML sources to the 
extent that funding is available form other State or Federal sources. 
Otherwise, the State will have not made the requisite showing of 
``need'' to construct such facilities. Insertion of such a limitation 
would avoid using funds inappropriately for projects entirely unrelated 
to correcting environmental problems from past mining practices.
    OSM has declined to implement this comment. OSM does not interpret 
the language in Section 411(f) as narrowly as the commenters suggest. 
``Need'' does not necessarily mean that there are no other possible 
sources of funds. How could one ever say that a certain government has 
no available funds? Monies can always be transferred, or taxes raised. 
The term ``need'' refers instead to the need for construction or the 
need to undertake a specific activity. The allocation of State funds is 
an internal State matter in which the Federal Government should not be 
involved. The State has the responsibility to allocate its limited AML 
funds in order to carry out the purposes of Title IV. This program is 
but one small component of a much larger State budget system. When 
reviewing a State or Indian tribe request for funding OSM will not look 
at alternative funding sources but instead will confine its review to 
analyzing the ``need'' identified by the State or Indian tribe.
    One commenter noted that OSM plans to conduct discussions with EPA 
regarding the funding of projects which may be eligible under CERCLA. 
This commenter questioned whether States should check all potential 
Title IV noncoal projects to ensure that they have not been listed on 
EPA's National Priority List.
    As stated in the rule, sites listed for remedial action under the 
CERCLA are ineligible for funding under SMCRA. OSM believes therefore 
that the Sates should take whatever measures they deem necessary to 
ensure that this requirement is met.

Section 875.16  Exclusion of Certain Noncoal Reclamation Sites

    This section sets forth noncoal reclamation sites which Congress 
has specifically excluded from the coverage of SMCRA. Monies cannot be 
used for the reclamation of sites designated for remedial action 
pursuant to the Uranium Mill Tailings Radiation Control Act of 1978 (42 
U.S.C. 7901 et seq.) or the Comprehensive Environmental Response 
Compensation and Liability Act of 1980 (CERCLA) (42 U.S.C. 9601 et 
seq.). OSM interprets this provision as allowing reclamation activities 
to proceed on any noncoal site which is not listed on EPA's National 
Priority List pursuant to Section 105 of CERCLA, 42 U.S.C. 
9605(a)(8)(B).

Section 875.17  Land Acquisition Authority--Noncoal

    This section makes the land acquisition provisions set out in 
Section 407 of SMCRA and 30 CFR parts 877 and 879 of the Secretary's 
regulations applicable to a State's/Indian tribe's noncoal reclamation 
program. This section implements the provisions set forth in Section 
411(g) of SMCRA.

Section 875.18  Lien Requirements

    Section 875.18 makes the lien provisions of Section 408 of SMCRA 
and 30 CFR part 882 of the Secretary's regulations applicable to a 
State's/Indian tribe's noncoal reclamation program. This provision does 
not alter OSM's original regulations in 30 CFR part 882 which holds the 
lien requirements applicable to all reclamation on private land 
regardless of whether it was mined for coal or noncoal purposes. Monies 
recovered through the satisfaction of liens filed against privately 
owned lands will continue to be handled in accordance with 30 CFR 
872.12.

Section 875.19  Limited Liability

    This section reiterates the language in Section 405(e) of SMCRA 
which provides that no State or Indian tribe shall be liable under 
Federal law for any costs or damages as a result of any action or 
omitted action while carrying out an approved abandoned mine 
reclamation plan. This section does not preclude liability for gross 
negligence or intentional misconduct.

Section 875.20  Contractor Responsibility

    A new Sec. 875.20, ``Contractor responsibility'' has been added to 
the regulations. This regulation specifies that to receive AML funds 
every successful bidder for an AML noncoal contract must be eligible 
under 30 CFR 773.15(b)(1) at the time of contract award to receive a 
permit or conditional permit to conduct surface coal mining operations. 
Such eligibility must be confirmed by OSM's automated AVS. This section 
is being added to assure consistency between coal and noncoal 
reclamation programs.
    The reader is referred to Sec. 874.16 for a parallel discussion of 
this requirement. Comments received concerning the contractor 
responsibility requirement may be found in the discussion of that 
section and are applicable to both coal and noncoal reclamation.

Part 876--Acid Mine Drainage Treatment and Abatement Program

General
    Because thousands of miles of Appalachian streams and numerous 
waterways have been degraded and the biological life significantly 
impaired or destroyed by acid mine drainage, Congress acknowledge a 
need too engage in an abatement and treatment program for acid mine 
damage through the Abandoned Mine Reclamation Act of 1990.
    In response to the mandate by Congress, OSM promulgated Part 876. 
Part 876 is an optional program for States/Indian tribes having an 
approved abandoned mine land program. Up to ten percent of the funds a 
State/Indian tribe receives through its annual grants, both from the 
State/Indian tribe share and from amounts based on historical coals 
production, may be deposited in a special interest-bearing fund and 
used, without regard to lapsing of fund authority, for the purpose of 
acid mine drainage treatment and abatement projects in qualified 
hydrologic units. Plans for the use of this acid mine drainage 
treatment and abatement fund, which must be authorized by State law, 
are subject to approval by the Secretary who had delegated this 
authority to the Director of OSM.
    The acid mine drainage abatement and treatment plan is encouraged 
to be developed in coordination with SCS. OSM will ask SCS and the 
Director of the Bureau of Mines to comment on each proposed plan. The 
intent of this coordination is to encourage joint efforts with projects 
initiated by SCS under the Rural Abandoned Mine Program. This will 
allow States/Indian tribes to address acid mine drainage problems on a 
broader basis, i.e. qualified hydrologic units, instead of a more 
restricted site specific approach. Through this joint approach it is 
anticipated that more environmentally sound and cost effective methods 
will be utilized. Projects to address acid mine drainage problems in 
hydrologic units as defined as Sec. 870.5 are independent of the order 
of priorities for projects under Section 403(a) of SMCRA.
Discussion
    The term ``qualified hydrologic unit'' has been defined at section 
870.5. OSM has interpreted the statutory language to mean those lands 
and waters which are (1) eligible pursuant to Section 404 and include 
any of the first three priorities as stated in Section 403(a), or (2) 
proposed to be the subject of expenditures by the State/Indian tribe 
(from amounts available from the forfeiture of bonds required under 
Section 509 or from other State/Indian tribe sources) to mitigate acid 
mine drainage. Based upon the legislative history, it was apparent that 
the intent was to make both categories independently eligible for 
funding.
    Five comments were received regarding this interpretation. The 
comments to a large degree merely pointed out the difference between an 
``and'' found in Section 402(g)(7) of SMCRA and the ``or'' used in 
OSM's proposed regulations. The issue is whether this term should be 
limited to those units which contain both eligible Title IV and Title V 
sites or whether it should also encompass units where only Title IV 
sites exist or eligible Title V sites. OSM believes that Congress 
contemplated all situations. OSM believes its definition for qualified 
hydrologic unit is within the intent of Congress to provide a broad 
comprehensive approach to the problem of acid mine drainage. A 
qualified hydrologic until under a strict reading of the statute would 
have to contain both Title IV and Title V AML sites contributing acid 
mine drainage. Under the proposed and final rule, either Title IV lands 
contributing acid mine drainage or Title V lands contributing acid mine 
drainage could qualify. Adoption of this interpretation does not 
preclude a combination of Title IV and Title V sites and thus allows 
States significant discretion in setting priorities and focusing on the 
most serious acid mine drainage problems within their boundaries. The 
goal of the legislation is to contain and abate acid mine drainage 
problems. To artificially limit this authority to only those units 
which contain both Title IV and Title V sites appears unduly 
restrictive and illogical and therefore not in furtherance of Congress' 
intended goal.
    One commenter raised the concern that the independent eligibility 
of either Title IV or Title V sites provided in the proposal would 
allow States to use the Fund to supplement inadequate Title V bonding 
systems. This cannot be done. Bonding and bond pool requirements have 
no relationship to the Fund and its objective to deal with acid mine 
drainage on a comprehensive basis. While it is true that the 
eligibility of Title V sites, in part, is tied to the bond forfeiture 
sites by the definition of qualified hydrologic unit found at 870.5, 
this is not intended to provide authority in any way to use the Fund to 
supplement inadequate bonding systems. OSM wishes, however, to stress 
that other Title IV funds or existing bond pool funds, or both, can be 
used to address acid mine drainage problems under this program.
    The same commenter asked for clarification for the reference to 
``other State sources'' in the definition of qualified hydrologic unit 
relative to qualified Title V units. OSM believes Congress' intent was 
for State/Indian tribes to share a financial commitment to the acid 
mine drainage problem associated with Title V activities while at the 
same time providing ample flexibility to the State/Indian tribes. Many 
sources of funding beyond bond forfeitures would be acceptable provided 
there is a direct connection between the funding and the qualified 
hydrologic unit.
    It is noted that, with the exception of Sec. 876.1, the numerical 
designations of the sections of part 876 have been revised in the final 
regulation to reflect a more concise sequence.

Section 876.1  Scope

    This paragraph describes the scope of the program to address acid 
mine drainage treatment and abatement. No comments were received on 
this paragraph which is adopted as proposed.

Section 876.10  Information Collection

    This section deals with information collection requirements. Since 
there were no comments, this section is being adopted as proposed.

Section 876.12  Eligibility

    This section establishes eligibility criteria for States/Indian 
tribes to receive funds and authorizes such funds to be deposited in 
either an interest-bearing special fund established under State/Tribal 
law or an acid mine drainage treatment and abatement fund established 
under State/Tribal law.
    One comment was received dealing with Sec. 876.12(b) and 
recommended that States and Indian tribes have the authority to consult 
directly with SCS and, at the option of the State or Indian tribe, with 
or without OSM involvement. OSM wishes to clarify that it has no 
planned involvement at the planning or implementation stages. OSM's 
involvement is limited to approval of acid mine drainage abatement and 
treatment plans by the Director prior to implementation. By statutory 
mandate, however, the Director must give priority to those plans which 
will be implemented in coordination with measures undertaken by the 
Secretary of Agriculture under RAMP. The Director's action does not 
preclude the States or Indian tribes from consulting with SCS during 
development of the plan. Such coordination would have tangible benefits 
and is encouraged.
    The section is being adopted as proposed with one minor change to 
Sec. 876.12(b). The reference to the Secretary approving plans in the 
proposal is being changed to the Director in the final rulemaking. This 
change is consistent with Sec. 876.14 of the proposal which provides 
authority for approving plans to the Director and also reflects that 
such program authorities in the past have commonly been delegated 
through rulemaking to the Director for efficiency.

Section 876.13  Plan Content

    This section outlines the major components of the State plans for 
the comprehensive abatement of the causes and treatment of the effects 
of acid mine drainage affected by coal mining practices.
    No comments were received on this section. The section is being 
adopted as proposed.

Section 876.14  Plan Approval

    This section sets forth that the Director's process for approving 
plans, obtaining comments from the Director of the U.S. Bureau of Mines 
(BOM) with regard to acid mine drainage abatement and treatment 
measures and associated costs and giving priority to plans that 
complement efforts under RAMP.
    One commenter raised concern with the perceived role of the SCS in 
plan approval based on its limited expertise for this purpose. The 
commenter also wished to work directly with SCS at the State level in 
the development and approval of the plans with limited involvement of 
OSM and SCS headquarters. OSM wishes to clarify that SCS at either the 
State or National level has no direct responsibility for plan approval. 
This responsibility rests exclusively with the Director of OSM. As 
mentioned previously, however, coordination with RAMP efforts and SCS 
at the State level is encouraged. This is expected to have the added 
benefit of providing a basis for the Director to assign priority for 
those plans that complement RAMP efforts as required Sec. 876.14.
    The same commenter believed BOM was better suited than SCS to have 
a lead role in plan approval. For the reasons explained above, BOM has 
no direct role in plan approval. The BOM role has been limited by 
Congress to a technical supporting role of providing comments on 
abatement and treatment measures and associated costs for each plan as 
needed by the Director of OSM in order to analyze the plans.

Part 886--State Reclamation Grants

General
    This part sets forth procedures for grants to States having an 
approved State reclamation plan for the reclamation of eligible lands 
and water and others activities necessary to carry out the plan as 
approved.
Discussion
    OSM set forth a grant condition in the proposed rules requiring 
States, prior to grant award, to ensure that a successful bidder for an 
AML project funded by the grant is not precluded under 30 CFR 
773.15(b)(1) from receiving a permit or conditional permit to conduct 
surface coal mining operations. OSM has decided in the final rules to 
retain this language. This requirement, however, will not be a grant 
condition but rather has been placed in 30 CFR 874.16 and 875.20, 
``Contractor responsibility,'' as an AML program requirement. For a 
discussion of this rule and responses to comments, refer to 874.16 and 
875.20 in this preamble.

Section 886.16  Grant Agreements

    A new provision was proposed for Sec. 886.16(a). OSM has decided to 
move this proposed section in the final rule to ``Contractor 
responsibility'' in Secs. 874.16 and 875.20. For further discussion 
regarding contractor responsibility see Secs. 874.16 and 875.20 of the 
regulation and the associated preamble discussion. For consistency, all 
comments regarding contractor responsibility and the AVS are discussed 
in Sec. 874.16.

Section 886.23  Reports

    In section 886.23, a new paragraph (c) has been added to 
incorporate the reporting requirement under State and Indian tribe 
reclamation grants that, upon project completion, States and Indian 
tribes are required to submit to OSM a completed Form OSM-76 (Problem 
Area Description Forms) for any completed coal and noncoal project. The 
OSM-76 is used to provide the data for the Abandoned Mine Land 
Inventory System. Instructions for completing and processing the 
completed Form OSM-76 are available in the National Abandoned Mine 
Lands Inventory Problem Area Description Manual. This requirement is 
necessary so that the Secretary may provide an updated inventory of 
abandoned mine land problems to Congress on an annual basis as required 
by Section 403(c) of the Act. Also, the information is necessary to 
track and report on accomplishments of the AML Program. For the 
purposes of updating the National Inventory, completed projects are 
defined as those AML construction projects funded through an approved 
reclamation grant, where on-the-ground reclamation has been completed 
and the cost figures represent final funding on the project. In 
promulgating this rule, OSM acknowledges that because of the nature of 
grant funded projects, preliminary cost figures given prior to grant 
closeout may be revised at a later time.
    Several commenters agreed that the Secretary should provide updated 
AML information to Congress on an annual basis. However, they asserted, 
Form OSM-76 needs further modification before it can provide Congress 
with more accurate AML accomplishments by States an Indian tribes.
    Form OSM-76 itself is not a subject of this rulemaking. In 1990, 
OSM conducted a separate outreach effort to solicit State and Tribal 
views on proposed changes to Form OSM-76. OSM deemed that changes to 
Form OSM-76 were essential in order to collect the additional 
information needed so as to note on the inventory, as required by 
Section 403(c) of SMCRA, those projects completed under Title IV. Form 
OSM-76 has been approved by OMB and was distributed to the States and 
Indian tribes in April 1992 for their use.
    One State commenter suggested that Form OSM-76 only be submitted to 
OSM, pursuant to funding activity, when a project is completed. The 
information, it believes, submitted at the time of grant application or 
at any other time prior to project completion is only an estimate and 
may result in confusing data as well as generating a burdensome amount 
of paper work with very little value.
    The comment is accepted in part. The regulation is revised to 
clarify that this rulemaking deals only with reporting requirements for 
approved reclamation projects. However, it must be noted that Section 
403(c) of SMCRA requires the Secretary to maintain an inventory of 
priority 1 and 2 coal problems. In order to place sites on the OSM 
inventory, States and Indian tribes submit a Form OSM-76 for new 
problem areas, and for such new problems that occur on problem areas 
already in the inventory. OSM realizes that the inventory necessarily 
will contain estimated costs for unfunded problems and not yet competed 
reclamation projects. However, OSM believes that sufficient guidance 
and flexibility in factors to consider when making reclamation costs 
estimates has already been provided to States and Indian tribes through 
the AML reclamation program final guidelines (45 FR 14810, March 6, 
1980), and the instructions for Form OSM-76.
    Another commenter stated regarding Sec. 886.23(c) that the language 
should be modified to exclude interim program and insolvent surety bond 
forfeiture projects done under Sec. 874.12(d). The commenter believes 
that these sites are specifically excluded from the AML inventory per 
the preamble discussion on page 57387.
    The comment cannot be accepted. Although interim program and 
insolvent surety sites need not be inventoried prior to actual funding 
of a reclamation project, OSM is required to update the inventory so as 
to reflect all projects completed under Title IV. That requirement 
includes interim program and insolvent surety bond forfeiture projects. 
For this reason, States/Indian tribes need to submit a Form OSM-76 
whenever activities funded under those programs are completed in order 
for OSM to update the inventory.
    Another commenter stated that the AML inventory has continued to 
serve an important role in the AML program. In order to keep the 
inventory current, however, OSM would provide computer print-outs semi-
annually which track the status of each State's inventory.
    OSM is committed to maintaining the inventory current as required 
by Section 403(c). While the commenter's suggestion is not directly 
related to the rule, OSM agrees with its intent and will work on an 
informal basis with the States and Indian tribes to ensure that 
information from the inventory is readily available.

IV. Procedural Matters

Federal Paperwork Reduction Act

    The collections of information contained in this rule have been 
approved by OMB under 44 U.S.C. 3501 et seq. and assigned clearance 
numbers 1029-0054, 1029-0061, 1029-0063, 1029-0090, 1029-0103 and 1029-
0104.

Author

    The principal author of this rule is Norman J. Hess, Division of 
Abandoned Mine Land Reclamation, Office of Surface Mining Reclamation 
and Enforcement, U.S. Department of the Interior, 1951 Constitution 
Avenue NW., Washington, DC 20240; Telephone: 202-208-2949.

Executive Order 12866

    This final rule has been reviewed under Executive Order 12866.

Regulatory Flexibility Act

    The Department of the Interior has determined, pursuant to the 
Regulatory Flexibility Act, 5 U.S.C. 601 et seq., that the final rule 
will not have a significant economic impact on a substantial number of 
small entities. The legislation enacted by Congress extends an existing 
program, and the resulting costs to the regulated industry and to 
consumers are not expected to vary from current levels. Further, the 
provisions in the legislation and the regulations changing the 
threshold for qualifying as a small operator from less than 100,000 
tons per year of coal produced to less than 300,000 tons per year is 
expected to increase the number of coal operators that will qualify as 
small operators and thereby be eligible for economic assistance under 
SOAP.

Executive Order 12778 on Civil Justice Reform

    This rule has been reviewed under the applicable standards of 
Section 2(b)(2)
of Executive Order 12778, Civil Justice Reform (56 FR 55195). In 
general, the requirements of Section 2(b)(2) of Executive Order 12778 
are covered by the preamble discussion of this rule. Additional remarks 
follow concerning individual elements of the Executive Order:
    A. What is the preemptive effect, if any, to be given to the 
regulation?
    This rule will have no preemptive effect on State/Indian tribal 
laws or regulations. However, while States/Indian tribes will have to 
amend their programs to take advantage of the additional authority 
provided by these regulations, the decision to do so is at their sole 
discretion.
    B. What is the effect on existing Federal law or regulation, if 
any, including all provisions repealed or modified?
    This rule modifies the implementation of SMCRA as described herein, 
and is not intended to modify the implementation of any other Federal 
statute. The preceding discussion of this rule specifies the Federal 
regulatory provisions that are affected by this rule.
    C. Does the rule provide a clear and certain legal standard for 
affected conduct rather than a general standard, while promoting 
simplification and burden reduction?
    The standards established by this rule are as clear and certain as 
practicable, given the complexity of the topics covered and the 
mandates of SMCRA.
    D. What is the retroactive effect, if any, to be given to the 
regulation?
    This rule is not intended to have retroactive effect.
    E. Are administrative proceedings required before parties may file 
suit in court? Which proceedings apply? Is the exhaustion of 
administrative remedies required?
    No administrative proceedings would be required before parties may 
file suit in court challenging the provisions of this rule under 
section 526(a) of SMCRA, 30 U.S.C. 1276(a). Prior to any judicial 
challenge to the application of the rule to private parties, however, 
exhaustion of administrative procedures may be required. Applicable 
administrative procedures may be found at 43 CFR part 4.
    F. Does the rule define key terms, either explicitly or by 
reference to other regulations or statutes that explicitly define those 
items?
    Terms which are important to the understanding of this rule are set 
forth in 30 CFR 700.5, 701.5, 795.3 and 870.5.
    G. Does the rule address other important issues affecting clarity 
and general draftsmanship of regulations set forth by the Attorney 
General, with the concurrence of the Director of the OMB, that are 
determined to be in accordance with the purposes of the Executive 
Order?
    The Attorney General and the Director of the Office of Management 
and Budget have not issued any guidance on this requirement.

National Environmental Policy Act

    OSM has prepared an environmental assessment (EA), and has made a 
finding that this rule will not significantly effect the quality of the 
human environment under Section 102(2)(C) of NEPA, 42 U.S.C. 
4332(2)(C). The EA and finding of no significant impact are on file in 
the OSM Administrative Record, room 660, 800 N. Capitol St., NW., 
Washington, DC.

List of Subjects

30 CFR Part 795

    Grant programs-natural resources, Reporting and recordkeeping 
requirements, Small businesses, Surface mining, Technical assistance, 
Underground mining.

30 CFR Part 870

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

30 CFR Part 872

    Indian-lands, Reporting and recordkeeping requirements, Surface 
mining, Underground mining.

30 CFR Part 873

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

30 CFR Part 874

    Indian-lands, Surface mining, Underground mining.

30 CFR Part 875

    Indians-lands, Surface mining, Underground mining.

30 CFR Part 876

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

30 CFR Part 886

    Grant programs-natural resources, Reporting and recordkeeping 
requirements, Surface mining, Underground mining.

    Dated: April 14, 1994.
Bob Armstrong,
Assistant Secretary for Land and Minerals Management.
    Accordingly, 30 CFR Parts 795, 870, 872, 873, 874, 875, 876, and 
886 are amended as set forth below.

PART 795--PERMANENT REGULATORY PROGRAM--SMALL OPERATORS ASSISTANCE 
PROGRAM

    1. The authority citation for part 795 continues to read as 
follows:
    Authority: Secs. 201, 501, 502, and 507, Pub. L. 95-87, 91 Stat. 
445 (30 U.S.C. 1201 et seq.).
    2. Section 795.3, the definition of ``qualified laboratory'', is 
revised to read as follows:


Sec. 795.3  Definitions.

* * * * *
    Qualified laboratory means a designated public agency, private 
firm, institution, or analytical laboratory that can provide the 
required determination of probable hydrologic consequences or statement 
of results of test borings or core samplings or other services as 
specified at Sec. 795.9 under the Small Operator Assistance Program and 
that meets the standards of Sec. 795.10.
    3. Section 795.4 is revised to read as follows:


Sec. 795.4  Information collection.

    The collections of information contained in part 795 have been 
approved by the Office of Management and Budget under 44 U.S.C. 3501 et 
seq. and assigned clearance number 1029-0061. The information will be 
used to determine if the applicants meet the requirements of the Small 
Operator Assistance Program. Response is required to obtain a benefit 
in accordance with Public Law 95-87. Public reporting burden for this 
information is estimated to average 24.2 hours per response, including 
the time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. Send comments regarding this burden 
estimate or any other aspect of this collection of information, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, room 640 N.C., 1951 Constitution Avenue NW., Washington, DC 
20240 and the Office of Management and Budget, Paperwork Reduction 
Project (1029-0061), Washington, DC 20503.
    4. Section 795.6 is amended by revising the introduction text of 
paragraph (a)(2) and paragraphs (a)(2) (i) and (ii) to read as follows:

Sec. 795.6  Eligibility for assistance.

    (a) * * *
    (1) * * *
    (2) Establishes that his or her probable total attributed annual 
production from all locations on which the operator is issued the 
surface coal mining and reclamation permit will not exceed 300,000 
tons. Production from the following operations shall be attributed to 
the applicant:
    (i) The pro rata share, based upon percentage of ownership of 
applicant, of coal produced by operations in which the applicant owns 
more than a 10 percent interest;
    (ii) The pro rata share, based upon percentage of ownership of 
applicant, of coal produced in other operations by persons who own more 
than 10 percent of the applicant's operation;
* * * * *
    5. Section 795.9 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec. 795.9  Program services and data requirements.

    (a) To the extent possible with available funds, the program 
administrator shall select and pay a qualified laboratory to make the 
determination and statement and provide other services referenced in 
paragraph (b) of this section for eligible operators who request 
assistance.
    (b) The program administrator shall determine the data needed for 
each applicant or group of applicants. Data collected and the results 
provided to the program administrator shall be sufficient to satisfy 
the requirements for:
    (1) The determination of the probable hydrologic consequences of 
the surface mining and reclamation operation in the proposed permit 
area and adjacent areas, including the engineering analyses and designs 
necessary for the determination in accordance with Secs. 780.21(f), 
784.14(e), and any other applicable provisions of this chapter;
    (2) The drilling and statement of the results of test borings or 
core samplings for the proposed permit area in accordance with 
Secs. 780.22(b) and 784.22(b) and any other applicable provisions of 
this chapter;
    (3) The development of cross-section maps and plans required by 
Secs. 779.25 and 783.25;
    (4) The collection of archaeological and historic information and 
related plans required by Secs. 779.12(b) and 783.12(b) and 
Secs. 780.31 and 784.17 and any other archaeological and historic 
information required by the regulatory authority;
    (5) Pre-blast surveys required by Sec. 780.13; and
    (6) The collection of site-specific resources information, the 
production of protection and enhancement plans for fish and wildlife 
habitats required by Secs. 780.16 and 784.21, and information and plans 
for any other environmental values required by the regulatory authority 
under the act.
* * * * *
    6. Section 795.12 is amended by revising paragraphs (a) 
introductory text, (a)(2) and (a)(3) to read as follows:


Sec. 795.12   Applicant liability.

    (a) A coal operator who has received assistance pursuant to 
Sec. 795.9 shall reimburse the regulatory authority for the cost of the 
services rendered if:
    (1) * * *
    (2) The program administrator finds that the operator's actual and 
attributed annual production of coal for all locations exceeds 300,000 
tons during the 12 months immediately following the date on which the 
operator is issued the surface coal mining and reclamation permit; or
    (3) The permit is sold, transferred, or assigned to another person 
and the transferee's total actual and attributed production exceeds the 
300,000 ton production limit during the 12 months immediately following 
the date on which the permit was originally issued. Under this 
paragraph the applicant and its successor are jointly and severally 
obligated to reimburse the regulatory authority.
* * * * *

PART 870--ABANDONED MINE RECLAMATION FUND--FEE COLLECTION AND COAL 
PRODUCTION REPORTING

    7. The authority citation for part 870 continues to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq., as amended; and Pub. L. 100-
34.

    8. Section 870.5 is amended by revising the definitions for 
``eligible lands and water'' and ``left or abandoned in either an 
unreclaimed or inadequately reclaimed condition,'' and adding 
alphabetically new definitions for ``mineral owner'' and ``qualified 
hydrologic unit'' as follows:


Sec. 870.5   Definitions.

* * * * *
    Eligible lands and water means land and water eligible for 
reclamation or drainage abatement expenditures which were mined for 
coal or which were affected by such mining, wastebanks, coal 
processing, or other coal mining processes and left or abandoned in 
either an unreclaimed or inadequately reclaimed condition prior to 
August 3, 1977, and for which there is no continuing reclamation 
responsibility. Provided, however, that lands and water damaged by coal 
mining operations after that date and on or before November 5, 1990, 
may also be eligible for reclamation if they meet the requirements 
specified in 30 CFR 874.12 (d) and (e). Following certification of the 
completion of all known coal problems, eligible lands and water for 
noncoal reclamation purposes are those sites that meet the eligibility 
requirements specified in 30 CFR 874.14. For additional eligibility 
requirements for water projects, see 30 CFR 874.14, and for lands 
affected by remining operations, see Section 404 of the Act.
* * * * *
    Left or abandoned in either an unreclaimed or inadequately 
reclaimed condition means lands and water:
    (a) Which were mined or which were affected by such mining, 
wastebanks, processing or other mining processes prior to August 3, 
1977, or between August 3, 1977 and November 5, 1990, as authorized 
pursuant to Section 402(g)(4) of the Act, and on which all mining has 
ceased;
    (b) Which continue, in their present condition, to degrade 
substantially the quality of the environment, prevent or damage the 
beneficial use of land or water resources, or endanger the health and 
safety of the public; and
    (c) For which there is no continuing reclamation responsibility 
under State or Federal Laws, except as provided in Sections 402(g)(4) 
and 403(b)(2) of the Act.
* * * * *
    Mineral owner means any person or entity owning 10 percent or more 
of the mineral estate for a permit. If no single mineral owner meets 
the 10 percent rule, then the largest single mineral owner shall be 
considered to be the mineral owner. If there are several persons who 
have successively transferred the mineral rights, information shall be 
provided on the last owner(s) in the chain prior to the permittee, i.e. 
the person or persons who have granted the permittee the right to 
extract the coal.
* * * * *
    Qualified hydrologic unit means a hydrologic unit:
    (a) In which the water quality has been significantly affected by 
acid mine drainage from coal mining practices in a manner that 
adversely impacts biological resources; and
    (b) That contains lands and waters which are:
    (1) Eligible pursuant to Section 404 and include any of the first 
three priorities stated in Section 403(a); or
    (2) Proposed to be the subject of the expenditures by the State 
(from amounts available from the forfeiture of a bond required under 
Section 509 or from other State sources) to mitigate acid mine 
drainage.
* * * * *
    9. Section 870.10 is revised to read as follows:


Sec. 870.10  Information collection.

    The collections of information contained in part 870 and the Form 
OSM-1 have been approved by the Office of Management and Budget under 
44 U.S.C. 3501 et seq. and assigned clearance numbers 1029-0090 and 
1029-0063 respectively. The information will be used by the Office of 
Surface Mining Reclamation and Enforcement to determine whether coal 
mine operators are reporting accurate production figures and paying 
proper fees. Response is mandatory in accordance with Public Law 95-87. 
Public reporting burden for this collection of information is estimated 
to average 2 hours (1029-0090) and 16 minutes (1029-0063) per response, 
including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information. Send comments regarding this 
burden estimate or any other aspect of this collection of information, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, room 640 N.C., 1951 Constitution Avenue NW., Washington, DC 
20240 and the Office of Management and Budget, Paperwork Reduction 
Project (1029-0063) or (1029-0090), Washington, DC 20503.
    10. Section 870.12 is amended by adding paragraph (d) to read as 
follows:
* * * * *


Sec. 870.12  Reclamation fee.

* * * * *
    (d) The reclamation fee shall be paid after the end of each 
calendar quarter beginning with the calendar quarter starting October 
1, 1977, and ending September 30, 2004.
    11. Section 870.15 is amended by revising paragraph (b) and the 
penultimate sentence of paragraph (c) to read as follows:


Sec. 870.15  Reclamation fee payment.

* * * * *
    (b) Each operator shall use mine report Form OSM-1 (or any approved 
successor form) to report tonnage of coal sold, used or transferred, as 
well as the name and address of any person or entity who, in a given 
quarter, is the owner of 10 percent or more of the mineral estate for a 
given permit, and any entity or individual who, in a given quarter, 
purchases ten percent or more of the production from a given permit 
during the applicable quarter. If no single mineral owner or purchaser 
meets the 10 percent rule, then the largest single mineral owner and 
purchaser shall be reported. If several persons have successively 
transferred the mineral rights, information shall be provided on the 
last owner(s) in the chain prior to the permittee, i.e. the person or 
persons who have granted the permittee the right to extract the coal. 
At the time of reporting, a submitter may designate such information as 
confidential.
    (c) * * * All operators who receive a Coal Sales and Reclamation 
Fee Report (Form OSM-1), including those with zero sales, uses, or 
transfers, must submit a completed Form OSM-1, as well as any fee 
payment due. * * *
* * * * *
    12. Section 870.17 is revised to read as follows:


Sec. 870.17  Compliance authority.

    The Secretary or any duly designated officer, employee, or 
representative of the Secretary may conduct such audits of coal sales, 
transfers, and use, and the payment of AML fees as may be necessary to 
ensure compliance with the provisions of the Act, and for such purposes 
shall, at all reasonable times, upon request, have access to, and may 
copy, all books, papers, and other documents of any person involved in 
a coal transaction, including without limitation, permittees, 
operators, brokers, purchasers, and persons operating preparation 
plants and tipples, and any recipients of royalty payments for the 
coal.

PART 872--ABANDONED MINE RECLAMATION FUNDS

    13. The authority citation for Part 872 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201, et seq., as amended.

    14. Section 872.10 is revised to read as follows:


Sec. 872.10  Information collection.

    The collections of information contained in part 872 have been 
approved by the Office of Management and Budget under 44 U.S.C. 3501 et 
seq. and assigned clearance number 1029-0054. The information will be 
used by OSM to determine whether delays by States/Indian tribes in use 
of allocated and granted funds were due to unavoidable delays in 
program approval. Response is required to obtain a benefit in 
accordance with Public Law 95-87. Public reporting burden for this 
information is estimated to average one hour per response, including 
the time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. Send comments regarding this burden 
estimate or any other aspect of this collection of information, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, room 640 N.C., 1951 Constitution Avenue NW., Washington, DC, 
20240, and the Office of Management and Budget, Paperwork Reduction 
Project (1029-0054), Washington, DC, 20503.
    15. Section 872.11 is amended by adding new paragraph (a)(6); 
revising paragraphs (b)(1) through (5); and adding paragraphs (b)(6) 
through (8) to read as follows:


Sec. 872.11  Abandoned Mine Reclamation Fund.

    (a) * * *
    (6) Interest and any other income earned from investment of the 
Fund. Such interest and other income shall be credited only to the 
Federal share. In addition, an amount equal to the interest earned 
after September 30, 1992, shall be available pursuant to Section 402(h) 
of the Act for possible future transfer to the United Mine Workers of 
America Combined Benefit Fund.
    (b) * * *
    (1) An amount equal to 50 percent of the reclamation fees collected 
from within a State shall be allocated at the end of the fiscal year to 
the State in which they were collected. Reclamation fees collected from 
Indian lands shall not be included in the calculation of amounts to be 
allocated to a State. If a State advises OSM in writing that it does 
not intend to submit a State reclamation plan, no monies shall be 
allocated to the State. Amounts granted to a State that have not been 
expended within three years from the date of grant award shall be 
available to the Director for other purposes under paragraph (b)(5) of 
this section. Such funds may be withdrawn from the State if the 
Director finds in writing that the amounts involved are not necessary 
to carry out the approved reclamation activities.
    (2) An amount equal to 50 percent of the reclamation fees collected 
from Indian lands shall be allocated to the Indian tribe or tribes 
having an interest in those lands. This shall occur at the end of the 
fiscal year in which the fees were collected. If an Indian tribe 
advises OSM in writing that it does not intend to submit an Indian 
reclamation plan, no monies shall be allocated to that Indian tribe. 
Amounts granted to an Indian tribe that have not been expended within 
three years from the date of grant award shall be available to the 
Director for other purposes under paragraph (b)(5) of this section. 
Such funds may be withdrawn from the Indian tribe if the Director finds 
in writing that the amounts involved are not necessary to carry out the 
approved reclamation activities.
    (3) An amount equal to the 10 percent of the monies collected and 
deposited in the Fund annually, as well as 20 percent of the interest 
and other miscellaneous receipts to the Fund, if such amount is not 
necessary pursuant to Section 402(h) of the Act for transfer to the 
United Mine Workers of America Combined Benefit Fund, shall be 
allocated by the Secretary for transfer to the U.S. Department of 
Agriculture's Rural Abandoned Mine Program.
    (4) An amount equal to 40 percent of the monies deposited in the 
Fund annually, including interest, if not required to satisfy the 
provisions of Section 402(h) of the Act, shall be allocated for use by 
the Secretary to supplement annual grants to States and Indian tribes 
after making the allocations referred to in paragraphs (b)(1) and (2) 
of this section. States and Indian tribes eligible for supplemental 
grants under this provision are those that have not certified the 
completion of all coal-related reclamation under Section 411(a) of the 
Act and that have not achieved the priorities stated in paragraphs (1) 
and (2) of Section 403(a) of the Act. The allocation of these monies by 
the Secretary to eligible States and Indian tribes shall be through a 
formula based upon the amount of coal historically produced prior to 
August 3, 1977, in the State or from the Indian lands concerned. Funds 
to be granted to specific States or Indian tribes under this paragraph 
may be reduced or curtailed under the following two conditions:
    (i) If State or Indian tribal share funds to be granted in a year 
are sufficient to address all remaining eligible priority 1 or 2 coal 
sites in the State or on Indian lands, no additional funds under this 
paragraph will be provided during that year; or
    (ii) If the cost to reclaim all remaining priority 1 or 2 coal 
sites in a specific State or on a specific Indian tribe's land exceeds 
the amount of State or Indian tribal share funds to be granted in a 
year to that State or Indian tribe pursuant to Section 402(g)(1) of the 
Act, but is less than the total amount of funds to be granted to the 
State or Indian tribe in that year utilizing State or Indian tribe and 
Federal funds under paragraphs (b) (1), (2), (3), and (4) of this 
section, the Federal funds granted under this paragraph will be reduced 
to that amount needed to fully fund all remaining priority 1 or 2 coal 
sites after utilizing all available State or Indian tribe share funds.
    (5) Amounts available in the Fund that are not allocated pursuant 
to paragraphs (b) (1), (2), (3), and (4) of this section are authorized 
to be expended by the Secretary for any of the following:
    (i) The Small Operator Assistance Program under Section 507(c) of 
the Act (not more than $10,000,000 annually).
    (ii) Emergency projects under State, Indian tribal, and Federal 
programs under Section 410 of the Act.
    (iii) Nonemergency projects in States and on Indian tribal lands 
that do not have an approved abandoned mine reclamation program 
pursuant to Section 405 of the Act.
    (iv) Administration of the Abandoned Mine Land Reclamation Program 
by the Secretary.
    (v) Projects authorized under Section 402(g)(4) in States and on 
Indian lands that do not have an approved abandoned mine reclamation 
program pursuant to Section 405 of the Act.
    (6) If necessary to achieve the priorities stated in paragraphs 
403(a) (1) and (2) of the Act, the Secretary, subject to the provision 
below, shall grant annually not less than $2,000,000 for expenditure in 
each State and Indian tribe having an approved abandoned mine land 
program, provided however, that annual State or Indian tribe share 
funds are utilized first, and that supplemental funds granted under 
this paragraph and paragraph (b)(4) of this section shall not exceed 
the costs of reclaiming all remaining priority 1 or 2 coal sites in a 
State or on Indian tribal land.
    (7) Funds allocated or expended annually by the Secretary under 
Sections 402(g) (2), (3), or (4) of the Act for any State or Indian 
tribe shall not be deducted from funds allocated or granted annually to 
a State or Indian tribe under the authority of Sections 402(g) (1), 
(5), or (8) of the Act.
    (8) The Secretary shall expend funds pursuant to the authority in 
Section 402(g)(3)(C) of the Act only in States or on Indian lands where 
the State or Indian tribe does not have an abandoned mine reclamation 
program approved under Section 405 of the Act.
* * * * *
    16. Part 873 is added to read as follows:

PART 873--FUTURE RECLAMATION SET-ASIDE PROGRAM

Sec.
873.1  Scope.
873.11  Applicability.
873.12  Future set-aside program criteria.

    Authority: Pub. L. 95-87, (30 U.S.C. 1201 et seq.); and Pub. L. 
101-508.


Sec. 873.1  Scope.

    This part provides requirements for the award of grants to States 
or Indian tribes for the establishment of special trust accounts that 
will provide funds for coal reclamation purposes after September 30, 
1995.


Sec. 873.11  Applicability.

    The provisions of this part apply to the granting of funds pursuant 
to Section 402(g)(6) of the Act and their use by the States or Indian 
tribes for coal reclamation purposes after September 30, 1995.


Sec. 873.12  Future set-aside program criteria.

    (a) Any State or Indian tribe may receive and retain without regard 
to the three-year limitation referred to in Section 402(g)(1)(D) of the 
Act, 30 U.S.C. 1232, up to 10 percent of the total of the grant funds 
made annually to such State or Indian tribe pursuant to the authority 
in Sections 402(g) (1) and (5) of the Act, if such amounts are 
deposited into either of the following: (1) A special fund established 
under State or Indian tribal law pursuant to which such amounts 
(together with all interest earned on such amounts) are expended by the 
State or Indian tribe solely to achieve the priorities stated in 
Section 403(a) of the Act, 30 U.S.C. 1233, after September 30, 1995; or 
(2) An acid mine drainage abatement and treatment fund pursuant to 30 
CFR part 876.
    (b) Prior to receiving a grant pursuant to this part, a State or 
Indian tribe must:
    (1) Establish a special fund account providing for the earning of 
interest on fund balances; and
    (2) Specify that monies in the account may only be used after 
September 30, 1995, by the designated State or Indian tribal agency to 
achieve the priorities stated in Section 403(a) of the Act, 30 U.S.C. 
1233.
    (c) After the conditions specified in paragraphs (a) and (b) of 
this section are met, a grant may be approved and monies deposited into 
the special fund account. The monies so deposited, together with any 
interest earned, shall be considered State or Indian tribal monies.

PART 874--GENERAL RECLAMATION REQUIREMENTS

    17. The authority citation for part 874 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq., as amended.

    18. Section 874.1 is revised to read as follows:


Sec. 874.1  Scope.

    This part establishes land and water eligibility requirements, 
reclamation objectives and priorities, and reclamation contractor 
responsibility.
    19. Section 874.11 is revised to read as follows:


Sec. 874.11  Applicability.

    The provisions of this part apply to all reclamation projects 
carried out with monies from the AML Fund.
    20. Section 874.12 is amended by adding paragraphs (d), (e), (f), 
(g) and (h) to read as follows:


Sec. 874.12  Eligible coal lands and water.

* * * * *
    (d) Notwithstanding paragraphs (a), (b), and (c) of this section, 
coal lands and waters in a State or on Indian lands damaged and 
abandoned after August 3, 1977, by coal mining processes are also 
eligible for funding if the Secretary finds in writing that:
    (1) They were mined for coal or affected by coal mining processes; 
and
    (2) The mining occurred and the site was left in either an 
unreclaimed or inadequately reclaimed condition between August 4, 1977, 
and:
    (i) The date on which the Secretary approved a State regulatory 
program pursuant to Section 503 of the Act (30 U.S.C. 1253) for a State 
or September 28, 1994, for an Indian tribe, and that any funds for 
reclamation or abatement that are available pursuant to a bond or other 
form of financial guarantee or from any other source are not sufficient 
to provide for adequate reclamation or abatement at the site; or
    (ii) November 5, 1990, that the surety of the mining operator 
became insolvent during such period and that, as of November 5, 1990, 
funds immediately available from proceedings relating to such 
insolvency or from any financial guarantee or other source are not 
sufficient to provide for adequate reclamation or abatement at the 
site; and
    (3) The site qualifies as a priority 1 or 2 site pursuant to 
Section 403(a)(1) and (2) of the Act. Priority will be given to those 
sites that are in the immediate vicinity of a residential area or that 
have an adverse economic impact upon a community.
    (e) Any State or Indian tribe may expend funds may available under 
paragraphs 402(g)(1) and (5) of the Act (30 U.S.C. 1232(g)(1) and (5)) 
for reclamation and abatement of any site eligible under paragraph (d) 
of this section, if the State or Indian tribe, with the concurrence of 
the Secretary, makes the findings required in paragraph (d) of this 
section and the State or Indian tribe determines that the reclamation 
priority of the site is the same or more urgent than the reclamation 
priority for the lands and water eligible pursuant to paragraphs (a), 
(b) or (c) of this section that qualify as a priority 1 or 2 site under 
Section 403(a) of the Act (30 U.S.C. 1233(a)).
    (f) With respect to lands eligible pursuant to paragraph (d) or (e) 
of this section, monies available from sources outside the Abandoned 
Mine Reclamation Fund or that are ultimately recovered from responsible 
parties shall either be used to offset the cost of the reclamation or 
transferred to the Abandoned Mine Reclamation Fund if not required for 
further reclamation activities at the permitted site.
    (g) If reclamation of a site covered by an interim or permanent 
program permit is carried out under the Abandoned Mine Land Program, 
the permittee of the site shall reimburse the Abandoned Mine Land Fund 
for the cost of reclamation that is in excess of any bond forfeited to 
ensure reclamation. Neither the Secretary nor a State or Indian tribe 
performing reclamation under paragraph (d) or (e) of this section shall 
be held liable for any violations of any performance standards or 
reclamation requirements specified in Title V of the Act nor shall a 
reclamation activity undertaken on such lands or waters be held to any 
standards set forth in Title V of the Act.
    (h) Surface coal mining operations on lands eligible for remining 
pursuant to Section 404 of the Act shall not affect the eligibility of 
such lands for reclamation activities after the release of the bonds or 
deposits posted by any such operation as provided by Sec. 800.40 of 
this chapter. If the bond or deposit for a surface coal mining 
operation on lands eligible for remining is forfeited, funds available 
under this title may be used if the amount of such bond or deposit is 
not sufficient to provide for adequate reclamation or abatement, except 
that if conditions warrant the Secretary shall immediately exercise 
his/her authority under Section 410 of the Act.
    21. Section 874.13 is revised to read as follows:


Sec. 874.13  Reclamation objectives and priorities.

    (a) Reclamation projects should be accomplished in accordance with 
OSM's ``Final Guidelines for Reclamation Programs and Projects'' (45 FR 
14810-14819, March 6, 1980).
    (b) Reclamation projects shall reflect the priorities of Section 
403(a) of the Act (30 U.S.C. 1233). Generally, projects lower than a 
priority 2 should not be undertaken until all known higher priority 
coal projects either have been accomplished, are in the process of 
being reclaimed, or have been approved for funding by the Secretary, 
except in those instances where such lower priority projects may be 
undertaken in conjunction with a priority 1 or 2 site in accordance 
with OSM's ``Final Guidelines for Reclamation Programs and Projects.''
    22. Section 874.14 is added to read as follows:


Sec. 874.14  Utilities and other facilities.

    (a) Any state or Indian tribe that has not certified the completion 
of all coal-related reclamation under Section 411(a) of the Act, 30 
U.S.C. 1241(a), may expend up to 30 percent of the funds granted 
annually to such State or Indian tribe pursuant to the authority in 
Sections 402(g) (1) and (5) of the Act for the purpose of protecting, 
repairing, replacing, constructing, or enhancing facilities relating to 
water supplies, including water distribution facilities and treatment 
plants, to replace water supplies adversely affected by coal mining 
practices.
    (b) If the adverse effect on water supplies referred to in this 
section occurred both prior to and after August 3, 1977, the project 
shall remain eligible, notwithstanding the criteria specified in 30 CFR 
874.12(b), if the State or Indian tribe finds in writing, as part of 
its eligibility opinion, that such adverse affects are due 
predominately to effects of mining processes undertaken and abandoned 
prior to August 3, 1977.
    (c) If the adverse effect on water supplies referred to in this 
section occurred both prior to and after the dates (and under the 
criteria) set forth under Section 402(g)(4)(B) of the Act, the project 
shall remain eligible, notwithstanding the criteria specified in 30 CFR 
874.12(b), if the State or Indian tribe finds in writing, as part of 
its eligibility opinion, that such adverse effects are due 
predominately to the effects of mining processes undertaken and 
abandoned prior to those dates.
    (d) Enhancement of facilities or utilities under this section shall 
include upgrading necessary to meet any local, State, or Federal public 
health or safety requirement. Enhancement shall not include, however, 
any service area expansion of a utility or facility not necessary to 
address a specific abandoned mine land problem.
    23. Section 874.15 is added to read as follows:


Sec. 874.15  Limited liability.

    No State or Indian tribe shall be liable under any provision of 
Federal law for any costs or damages as a result of action taken or 
omitted in the course of carrying out an approved State or Indian tribe 
abandoned mine reclamation plan. This section shall not preclude 
liability for costs or damages as a result of gross negligence or 
intentional misconduct by the State or Indian tribe. For purposes of 
this section, reckless, willful, or wanton misconduct shall constitute 
gross negligence or intentional misconduct.
    24. Section 874.16 is added to read as follows:


Sec. 874.16  Contractor responsibility.

    To receive AML funds, every successful bidder for an AML contract 
must be eligible under 30 CFR 773.15(b)(1) at the time of contract 
award to receive a permit or conditional permit to conduct surface coal 
mining operations. Bidder eligibility must be confirmed by OSM's 
automated Applicant/Violator System for each contract to be awarded.

PART 875--NONCOAL RECLAMATION

    25. The authority citation for part 875 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq., as amended.
    26. Section 875.10 is added to read as follows:


Sec. 875.10  Information collection.

    The collection of information contained in part 875 have been 
approved by the Office of Management and Budget under 44 U.S.C. 3501 et 
seq. and assigned clearance number 1029-0103. The information will be 
used to determine if noncoal reclamation is being accomplished 
according to legislative mandate. Response is required to obtain a 
benefit in accordance with Public Law 95-87. Public reporting burden 
for this information is estimated to average 32 hours per response, 
including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information. Send comments regarding this 
burden estimate or any other aspect of this collection of information, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, room 640 N.C., 1951 Constitution Avenue NW., Washington, DC 
20240 and the Office of Management and Budget, Paperwork Reduction 
Project (1029-0103), Washington, DC 20503.
    27. Section 875.12 is revised to read as follows:


Sec. 875.12  Eligible lands and water prior to certification.

    Noncoal lands and water are eligible for reclamation if:
    (a) They were mined or affected by mining processes;
    (b) They were mined and left or abandoned in either an unreclaimed 
or inadequately reclaimed condition prior to August 3, 1977;
    (c) There is no continuing responsibility for reclamation by the 
operator, permittee, or agent of the permittee under statutes of the 
State or Federal Government or by the State as a result of bond 
forfeiture. Bond forfeiture will render lands or water ineligible only 
if the amount forfeited is sufficient to pay the total cost of the 
necessary reclamation. In cases where the forfeited bond is 
insufficient to pay the total cost of reclamation, monies sufficient to 
complete the reclamation may be sought under parts 886 or 888 of this 
chapter;
    (d) The reclamation has been requested by the Governor of the State 
or equivalent head of the Indian tribe; and
    (e) The reclamation is necessary to protect the public health, 
safety, general welfare, and property from extreme danger of adverse 
effects of noncoal mining practices.
    28. Section 875.13 is revised to read as follows:


Sec. 875.13  Certification of completion of coal sites.

    (a) The Governor of a State, or the equivalent head of an Indian 
tribe, may submit to the Secretary a certification of completion 
expressing the finding that the State or Indian tribe has achieved all 
existing known coal-related reclamation objectives for eligible lands 
and waters pursuant to Section 404 of the Act (30 U.S.C. 1234), or has 
instituted the necessary processes to reclaim any remaining coal 
related problems. In addition to the above finding, the certification 
of completion shall contain:
    (1) A description of both the rationale and the process utilized to 
arrive at the above finding for the completion of all coal-related 
reclamation pursuant to Section 403(a) (1) through (5).
    (2) A brief summary and resolution of all relevant public comments 
concerning coal-related impacts, problems, and reclamation projects 
received by the State or Indian tribe prior to preparation of the 
certification of completion.
    (3) A State or Indian tribe agreement to acknowledge and give top 
priority to any coal-related problem(s) that may be found or occur 
after submission of the certification of completion and during the life 
of the approved abandoned mine reclamation program.
    (b) After review and verification of the information contained in 
the certification of completion, the Director shall provide notice in 
the Federal Register and opportunity for public comment. After receipt 
and evaluation of all public comments and a determination by the 
Director that the certification is correct, the Director shall concur 
with the certification and provide final notice of such concurrence in 
the Federal Register. This concurrence shall be based upon the State's 
or Indian tribes commitment to give top priority to any coal problem 
which may thereafter be found or occur.
    (c) Following concurrence by the Director, a State or Indian tribe 
may implement a noncoal reclamation program pursuant to provisions in 
Section 411 of SMCRA.
    29. Section 875.14 is added to read as follows:


Sec. 875.14  Eligible lands and water subsequent to certification.

    (a) Following certification by the State or Indian tribe of the 
completion of all known coal projects and the Director's concurrence in 
such certification, eligible noncoal lands, waters, and facilities 
shall be those--
    (1) Which were mined or processed for minerals or which were 
affected by such mining or processing, and abandoned or left in an 
inadequate reclamation status prior to August 3, 1977. In determining 
the eligibility under this subsection of Federal lands, waters, and 
facilities under the jurisdiction of the Forest Service or Bureau of 
Land Management, in lieu of the August 3, 1977, date, the applicable 
date shall be August 28, 1974, and November 26, 1980, respectively; and
    (2) For which there is no continuing reclamation responsibility 
under State or other Federal laws.
    (b) If eligible coal problems are found or occur after 
certification under Sec. 875.13, a State or Indian tribe must address 
the coal problem utilizing State or Indian tribe share funds no later 
than the next grant cycle, subject to the availability of funds 
distributed to the State or Indian tribe in that cycle. The coal 
project would be subject to the coal provisions specified in Sections 
401 through 410 of SMCRA.
    30. Section 875.15 is added to read as follows:


Sec. 875.15  Reclamation priorities for noncoal program.

    (a) This section applies to reclamation projects involving the 
restoration of lands and water adversely affected by past mineral 
mining; projects involving the protection, repair, replacement, 
construction, or enhancement of utilities (such as those relating to 
water supply, roads, and other such facilities serving the public 
adversely affected by mineral mining and processing practices); and the 
construction of public facilities in communities impacted by coal or 
other mineral mining and processing practices.
    (b) Following certification pursuant to Sec. 875.13, the projects 
and construction of public facilities identified in paragraph (a) of 
this section shall reflect the following priorities in the order 
stated:
    (1) The protection of public health, safety, general welfare and 
property from the extreme danger of adverse effects of mineral mining 
and processing practices;
    (2) The protection of public health, safety, and general welfare 
from the adverse effects of mineral mining and processing practices; 
and
    (3) The restoration of land and water resources and the environment 
previously degraded by the adverse effects of mineral mining and 
processing practices.
    (c) Enhancement of facilities or utilities shall include upgrading 
necessary to meet local, State, or Federal public health or safety 
requirements. Enhancement shall not include, however, any service area 
expansion of a utility or facility not necessary to address a specific 
abandoned mine land problem.
    (d) Notwithstanding the requirements specified in paragraph (a) of 
this section, where the Governor of a State or the equivalent head of 
an Indian tribe, after determining that there is a need for activities 
or construction of specific public facilities related to the coal or 
minerals industry in States or on Tribal lands impacted by coal or 
minerals development, submits a grant application as required by 
paragraph (d) of this section and the Director concurs in such need, as 
set forth in paragraph (e) of this section, the Director may grant 
funds made available under section 402(g)(1) of the Act, 30 U.S.C. 
1232, to carry out such activities or construction.
    (e) To qualify for funding pursuant to the authority in paragraph 
(c) of this section, a State or Indian tribe must submit a grant 
application that specifically sets forth:
    (1) The need or urgency for the activity or the construction of the 
public facility;
    (2) The expected impact the project will have on the coal or 
minerals industry in the State or Indian tribe;
    (3) The availability of funding from other sources and, if other 
funding is provided, its percentage of the total costs involved;
    (4) Documentation from other local, State, and Federal agencies 
with oversight for such utilities or facilities regarding what funding 
resources they have available and why this specific project is not 
being fully funded by their agency;
    (5) The impact on the State or Indian tribe, the public, and the 
minerals industry if the activity or facility is not funded;
    (6) The reason why this project should be selected before a 
priority project relating to the protection of the public health and 
safety or the environment from the damages caused by past mining 
activities; and
    (7) An analysis and review of the procedures used by the State or 
Indian tribe to notify and involve the public in this funding request 
and a copy of all comments received and their resolution by the State 
or Indian tribe.
    (f) After review of the information contained in the application, 
the Director shall prepare a Federal Register notice regarding the 
State's or Indian tribe's submission and provide for public comment. 
After receipt and evaluation of the comments and a determination that 
the funding meets the requirements of the regulations in this part and 
is in the best interests of the State or Indian tribe AML program, the 
Director shall approve the request for funding the activity or 
construction at a cost commensurate with its benefits towards achieving 
the purposes of the Surface Mining Control and Reclamation Act of 1977.
    31. Section 875.16 is added to read as follows:


Sec. 875.16  Exclusion of certain noncoal reclamation sites.

    Money from the Fund shall not be used for the reclamation of sites 
and areas designated for remedial action pursuant to the Uranium Mill 
Tailings Radiation Control Act of 1978 (42 U.S.C. 7901 et seq.) or that 
have been listed for remedial action pursuant to the Comprehensive 
Environmental Response Compensation and Liability Act of 1980 (42 
U.S.C. 9601 et seq.).
    32. Section 875.17 is added to read as follows:


Sec. 875.17  Land acquisition authority--noncoal.

    The requirements specified in Parts 877 (Rights of Entry) and 879 
(Acquisition, Management and Disposition of Lands and Water) shall 
apply to a State's or Indian tribe's noncoal program except that, for 
purposes of this section, the references to coal shall not apply. In 
lieu of the term coal, the word noncoal should be used.
    33. Section 875.18 is added to read as follows:


Sec. 875.18  Lien requirements.

    The lien requirements found in Part 882--Reclamation on Private 
Land shall apply to a State's or Indian tribe's noncoal reclamation 
program under Section 411 of the Act, except that for purposes of this 
section, references made to coal shall not apply. In lieu of the term 
coal, the word noncoal should be used.
    34. Section 875.19 is added to read as follows:


Sec. 875.19  Limited liability.

    No State or Indian tribe shall be liable under any provision of 
Federal law for any costs or damages as a result of action taken or 
omitted in the course of carrying out an approved State or Indian tribe 
abandoned mine reclamation plan. This section shall not preclude 
liability for costs or damages as a result of gross negligence or 
intentional misconduct by the State or Indian tribe. For purposes of 
the preceding sentence, reckless, willful, or wanton misconduct shall 
constitute gross negligence or intentional misconduct.
    35. Section 875.20 is added to read as follows:


Sec. 875.20  Contractor responsibility.

    To receive AML funds for noncoal reclamation, every successful 
bidder for an AML contract must be eligible under 30 CFR 773.15(b)(1) 
at the time of contract award to receive a permit or conditional permit 
to conduct surface coal mining operations. Bidder eligibility must be 
confirmed by OSM's automated Applicant/Violator System for each 
contract to be awarded.
    36. Part 876 is added to read as follows:

PART 876--ACID MINE DRAINAGE TREATMENT AND ABATEMENT PROGRAM

Sec.
876.1  Scope.
876.10  Information collection.
876.12  Eligibility.
876.13  Plan content.
876.14  Plan approval.

    Authority: 30 U.S.C. 1201 et seq., as amended.


Sec. 876.1  Scope.

    This part establishes the requirements and procedures for the 
preparation, submission and approval of State or Indian tribe Acid Mine 
Drainage Treatment and Abatement Programs.


Sec. 876.10  Information collection.

    The collections of information contained in part 876 have been 
approved by the Office of Management and Budget under 44 U.S.C. 3501 et 
seq. and assigned clearance number 1029-0104. The information will be 
used to determine if the State's or Indian tribe's Acid Mine Drainage 
Abatement and Treatment Programs are being established according to 
legislative mandate. Response is required to obtain a benefit in 
accordance with Public Law 95-87. Public reporting burden for this 
information is estimated to average 1,040 hours per response, including 
the time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. Send comments regarding this burden 
estimate or any other aspect of this collection of information, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, room 640 N.C., 1951 Constitution Avenue NW., Washington, DC 
20240 and the Office of Management and Budget, Paperwork Reduction 
Project (1029-0104), Washington, DC 20503.


Sec. 876.12  Eligibility.

    (a) Any State or Indian tribe having an approved abandoned mine 
land program may receive and retain, without regard to the three-year 
limitation set forth in Section 402(g)(1)(D) of the Act, up to 10 
percent of the total of the grants made under Section 402(g) (1) and 
(5) of the Act to such State or Indian tribe for the purpose of 
abandoned mine land reclamation if such amounts are deposited into 
either:
    (1) A special fund established under State or Indian tribal law 
pursuant to which such amounts (together with all interest earned) are 
expended by the State or Indian tribe solely to achieve the priorities 
stated in Section 403(a) after September 30, 1995; or
    (2) An acid mine drainage abatement and treatment fund established 
under State or Indian tribal law.
    (b) Any State or Indian tribe may establish under State or Indian 
tribal law an acid mine drainage abatement and treatment fund from 
which amounts (together with all interest earned on such amounts) are 
expended by the State or Indian tribe to implement, in consultation 
with the Soil Conservation Service, acid mine drainage abatement and 
treatment plans approved by the Director.


Sec. 876.13  Plan content.

    Acid Mine Drainage Abatement Plans shall provide for the 
comprehensive abatement of the causes and treatment of the effects of 
acid mine drainage within qualified hydrologic units affected by coal 
mining practices. The plan shall include, but shall not be limited to, 
each of the following:
    (a) An identification of the qualified hydrologic unit;
    (b) The extent to which acid mine drainage is affecting the water 
quality and biological resources within the hydrologic unit;
    (c) An identification of the sources of acid mine drainage within 
the hydrologic unit;
    (d) An identification of individual projects and the measures 
proposed to be undertaken to abate and treat the causes or effects of 
acid mine drainage within the hydrologic unit;
    (e) The cost of undertaking the proposed abatement and treatment 
measures;
    (f) An identification of existing and proposed sources of funding 
for such measures; and
    (g) An analysis of the cost-effectiveness and environmental 
benefits of abatement and treatment measures.


Sec. 876.14  Plan approval.

    The Director may approve any plan under Sec. 876.13(b) only after 
determining that such plan meets the requirements of Sec. 876.13. In 
conducting an analysis of the items referred to in Sec. 876.13(d), (e) 
and (g), the Director shall obtain the comments of the Director of the 
U.S. Bureau of Mines. In approving plans under this section, the 
Director shall give priority to those plans which will be implemented 
in coordination with measures undertaken by the Secretary of 
Agriculture under the Rural Abandoned Mine Program.

PART 886--STATE RECLAMATION GRANTS

    37. The authority citation for part 886 is revised to read as 
follows:

    Authority: Pub. L. 95-87; 30 U.S.C. 1201 et seq.; and Pub. L. 
101-508.


Sec. 886.23  [Amended]

    38. Paragraph 886.23(b)(2)(ii) is amended to remove the word 
``and'' at the end of the paragraph.
    39. Paragraph 886.23(b)(2)(iii) is amended to revise the period at 
the end of the sentence to a semicolon followed by the word ``and''.
    40. A new paragraph (c) is added to Sec. 886.23 to read as follows:


Sec. 886.23  Reports.

* * * * *
    (c) A Form OSM-76, ``Abandoned Mine Land Problem Area 
Description,'' shall be submitted upon project completion to report the 
accomplishments achieved through the project.

[FR Doc. 94-12566 Filed 5-27-94; 8:45 am]
BILLING CODE 4310-05-M