[Federal Register Volume 60, Number 145 (Friday, July 28, 1995)]
[Rules and Regulations]
[Pages 38682-38685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18581]



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DEPARTMENT OF THE INTERIOR
30 CFR Part 917


Kentucky Regulatory Program

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

ACTION: Notice of decision.

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SUMMARY: OSM is announcing its decision on initial enforcement of 
underground coal mine subsidence control and water replacement 
requirements in Kentucky. Amendments to the Surface Mining Control and 
Reclamation Act of 1977 (SMCRA) and the implementing Federal 
regulations require that underground coal mining operations conducted 
after October 24, 1992: promptly repair or compensate for subsidence-
caused material damage to noncommercial buildings and to occupied 
dwellings and related structures, and promptly replace drinking, 
domestic, and residential water supplies that have been adversely 
affected by underground coal mining. After consultation with Kentucky 
and consideration of public comments, OSM has decided that initial 
enforcement in Kentucky will be accomplished through State and OSM 
enforcement.

EFFECTIVE DATE: July 28, 1995.

FOR FURTHER INFORMATION CONTACT:
William J. Kovacic, Director, Lexington Field Office, OSM, 2675 Regency 
Road, Lexington, Kentucky 40503, Telephone (606) 233-2894.

SUPPLEMENTARY INFORMATION:

A. The Energy Policy Act

    Section 2504 of the Energy Policy Act of 1992, Pub. L. 102-486, 106 
Stat. 2776 (1992) added new section 720 to SMCRA. Section 720(a)(1) 
requires that all underground coal mining operations promptly repair or 
compensate for subsidence-caused material damage to noncommercial 
buildings and to occupied residential dwellings and related structures. 
Repair of damage includes rehabilitation, restoration, or replacement 
of the structures identified in section 720(a)(1), and compensation 
must be provided to the owner in the full amount of the reduction in 
value of the damaged structures as a result of subsidence. Section 
720(a)(2) requires prompt replacement of certain identified water 
supplies if those supplies have been adversely affected by underground 
coal mining operations.
    These provisions requiring prompt repair or compensation for damage 
to structures, and prompt replacement of water supplies, went into 
effect upon passage of the Energy Policy Act on October 24, 1992. As a 
result, underground coal mine permittees in States with OSM-approved 
regulatory programs are required to comply with these provisions for 
operations conducted after October 24, 1992.

B. The Federal Regulations Implementing the Energy Policy Act

    On March 31, 1995, OSM promulgated regulations at 30 CFR part 817 
to implement the performance standards of sections 720(a)(1) and (2) of 
SMCRA (60 FR 16722).
    30 CFR 817.121(c)(2) requires in part that:

    The permittee must promptly repair, or compensate the owner for, 
material damage resulting from subsidence caused to any non-
commercial building or occupied residential dwelling or structure 
related thereto that existed at the time of mining. * * * The 
requirements of this paragraph apply only to subsidence-related 
damage caused by underground mining activities conducted after 
October 24, 1992.

    30 CFR 817.41(j) requires in part that:

    The permittee must promptly replace any drinking, domestic or 
residential water supply that is contaminated, diminished or 
interrupted by underground mining activities conducted after October 
24, 1992, if the affected well or spring was in existence before the 
date the regulatory authority received the permit application for 
the activities causing the loss, contamination or interruption.

    Alternative OSM enforcement decisions. 30 CFR 843.25 provides that 
by July 31, 1995, OSM will decide, in consultation with each State 
regulatory authority with an approved program, how enforcement of the 
new requirements will be accomplished. As discussed in the April 7, 
1995, Federal Register (60 FR 17739) and as reiterated below, 
enforcement could be accomplished through the 30 CFR Part 732 State 
program amendment process, or by State, OSM, or joint State and OSM 
enforcement of the requirements.

    (1) State program amendment process. If the State's promulgation 
of regulatory 

[[Page 38683]]
provisions that are counterpart to 30 CFR 817.41(j) and 817.121(c)(2) 
is imminent, the number and extent of underground mines that have 
operated in the State since October 24, 1992, is low, the number of 
complaints in the State concerning section 720 of SMCRA is low, or 
the State's investigation of subsidence-related complaints has been 
thorough and complete so as to assure prompt remedial action, then 
OSM could decide not to directly enforce the Federal provisions in 
the State. In this situation, the State would enforce its State 
statutory and regulatory provisions once it has amended its program 
to be in accordance with the revised SMCRA and to be consistent with 
the revised Federal regulations. This program revision process, 
which is addressed in the Federal regulations at 30 CFR Part 732, is 
commonly referred to as the State program amendment process.
    (2) State enforcement. If the State has statutory or regulatory 
provisions in place that correspond to all of the requirements of 
the above-described Federal regulations at 30 CFR 817/41(j) and 
817.121(c)(2) and the State has authority to implement its statutory 
and regulatory provisions for all underground mining activities 
conducted after October 24, 1992, then the State would enforce its 
provisions for these operations.
    (3) Interim direct OSM enforcement. If the State does not have 
any statutory or regulatory provisions in place that correspond to 
the requirements of the Federal regulations at 30 CFR 817.41(j) and 
817.121(c)(2), then OSM would enforce in their entirety 30 CFR 
817.41(j) and 817.121(c)(2) for all underground mining activities 
conducted in the State after October 24, 1992.
    (4) State and OSM enforcement. If the State has statutory or 
regulatory provisions in place that correspond to some but not all 
of the requirements of the Federal regulations at 30 CFR 817.41(j) 
and 817.121(c)(2) and the State has authority to implement its 
provisions for all underground mining activities conducted after 
October 24, 1992, then the State would enforce its provisions for 
these operations. OSM would then enforce those provisions of 30 CFR 
817.41(j) and 817.121(c)(2) that are not covered by the State 
provisions for these operations.
    If the State has statutory or regulatory provisions in place 
that correspond to some but not all of the requirements of the 
Federal regulations at 30 CFR 817.41(j) and 817.121(c)(2) and if the 
State's authority to enforce its provisions applies to operations 
conducted on or after some date later than October 24, 1992, the 
State would enforce its provisions for these operations on and after 
the provisions' effective date. OSM would then enforce 30 CFR 
817.41(j) and 817.121(c)(2) to the extent the State statutory and 
regulatory provisions do not include corresponding provisions 
applicable to all underground mining activities conducted after 
October 24, 1992; and OSM would enforce those provisions of 30 CFR 
817.41(j) and 817.121(c)(2) that are included in the State program 
but are not enforceable back to October 24, 1992, for the time 
period from October 24, 1992, until the effective date of the 
State's rules.

    As described in items (3) and (4) above, OSM could directly enforce 
in total or in part the applicable Federal regulatory provisions until 
the State adopts and OSM approves under 30 CFR Part 732, the State's 
counterparts to the required provisions. However, as discussed in item 
(1) above, OSM could decide not to initiate direct Federal enforcement 
but rather to rely instead on the 30 CFR part 732 State program 
amendment process.
    In those situations where OSM determined that direct Federal 
enforcement was necessary, the ten-day notice provisions of 30 CFR 
843.12(a)(2) would not apply. That is, when on the basis of a Federal 
inspection, OSM determined that a violation of 30 CFR 817.41(j) or 
817.121(c)(2) existed, OSM would issue a notice of violation or 
cessation order without first sending a ten-day notice to the State.
    Also under direct Federal enforcement, the provisions of 30 CFR 
817.121(c)(4) would apply. This regulation states that if damage to any 
noncommercial building or occupied residential dwelling or structure 
related thereto occurs as a result of earth movement within an area 
determined by projecting a specified angle of draw from the outermost 
boundary of any underground mine workings to the surface of the land 
(normally a 30 degree angle of draw), a rebuttable presumption exists 
that the permittee caused the damage.
    Lastly, under direct Federal enforcement, OSM would also enforce 
the new definitions at 30 CFR 701.5 of ``drinking, domestic or 
residential water supply,'' ``material damage,'' ``non-commercial 
building,'' ``occupied dwelling and structures related thereto,'' and 
``replacement of water supply'' that were adopted with the new 
underground mining performance standards.
    OSM would enforce 30 CFR 817.41(j), 817.121(c) (2) and (4), and 30 
CFR 701.5 for operations conducted after October 24, 1992.

C. Enforcement in Kentucky

    Kentucky program activity, requirements, and enforcement. By letter 
to Kentucky dated December 14, 1994, OSM requested information that 
would be useful in determining how to implement section 720(a) of SMCRA 
and the implementing Federal regulations in Kentucky (Administrative 
Record No. KY-1336). By letter dated January 31, 1995, Kentucky 
responded to this request (Administrative Record No. KY-1337).
    Kentucky stated that 410 underground coal mines were active in 
Kentucky after October 24, 1992. Kentucky indicated that existing State 
program provisions at 405 Kentucky Administrative Regulations (KAR) 
18:210 section 3 are adequate State counterparts to section 720(a)(1) 
of SMCRA and the implementing Federal regulations. Section 720(a)(1) of 
SMCRA requires prompt repair or compensation to the owner for 
subsidence-related material damage to non-commercial buildings or 
occupied dwellings and related structures. Kentucky explained that it 
will enforce this State program provision in accordance with 405 KAR 
18:210 section 3.
    Kentucky stated that the Kentucky program does not fully authorize 
enforcement of the new water replacement requirements of section 
720(a)(2) of SMCRA and the implementing Federal regulations. Kentucky 
submitted a program amendment to OSM dated April 29, 1994, 
(Administrative Record No. KY-1279) which will modify language at 
Kentucky Revised Statutes (KRS) 350.421. KRS 350.421, as modified, will 
require replacement of water loss caused by underground mining 
operations. OSM approved the amendment on June 27, 1995 (60 FR 33110) 
with two exceptions. The Director required that Kentucky amend its 
program to provide for the ``prompt'' replacement of water. He deferred 
a decision on the enforcement of the provisions of SMCRA section 720 
during the period from October 24, 1992 (the effective date of SMCRA 
section 720) to July 16, 1994 (the effective date of Kentucky's House 
Bill 338 which provides for water replacement). Kentucky has stated 
that the effective date of the program amendment, when approved, will 
be July 16, 1994. Kentucky also stated that it does not have authority 
to issue enforcement actions for water loss caused by underground 
mining operations conducted after October 24, 1992, and before July 16, 
1994.
    Kentucky has investigated 115 citizen complaints alleging water 
supply loss or contaminations as a result of underground mining 
operations conducted after October 14, 1992, and before July 16, 1994. 
Of the 115 citizens' complaints, 30 are pending resolution of currently 
outstanding ten-day notices; 29 have been satisfactorily resolved; and 
47 will require further investigation.
    By letter dated June 2, 1995, Kentucky submitted additional 
clarifying information (Administrative Record No. KY-1358). Kentucky 
stated, in part:

    KRS 350.421 was revised effective July 16, 1994, to place upon 
underground mining 

[[Page 38684]]
operations the same obligation to replace affected water supplies that 
previously applied only to surface mining operations. The Kentucky 
provisions apply to water supplies for domestic, agricultural, 
industrial or other legitimate use from an underground or surface 
source, and thus are at least as broadly encompassing as the Federal 
requirements with regard to the types of supplies that must be 
replaced when affected by mining operations. For underground mining, 
the Kentucky after July 16, 1994, the effective date of the 
legislation. With regard to the level of replacement, we believe the 
affected party must be made whole, and that depends upon the factual 
circumstances of each case and, to some appropriated degree, the 
preferences of the affected party.
    We recognize that it will be necessary to amend the approved 
Kentucky program by amending the cabinet's administrative 
regulations to be consistent with and as effective as the OSM 
regulations revised March 31, 1995. While it is difficult to 
establish a rigid timetable for adoption of amended administrative 
regulations, we believe the following target dates may be the 
earliest feasible dates for these actions, considering the length of 
Kentucky's promulgation process and considering that we also must 
continue development and promulgation of amendments to our 
regulations for impoundments and roads.
    1. By August 15, 1995, submit to the Kentucky Legislative 
Research commission (LRC), a Notice of Intent to promulgate 
administrative regulations on water supply replacement and 
subsidence consistent with the March 31, 1995, OSM rules.
    2. By December 15, 1995, file with LRC proposed amendments to 
administrative regulations.

    On June 14, 1995, representatives from OSM's Lexington Field Office 
(LFO) and Kentucky's Department for Surface Mining Reclamation and 
Enforcement (DSMRE) met to discuss and finalize the implementation of 
the Energy Policy Act in Kentucky. A written record of the issues 
discussed was made (Administrative Record No. KY-1359). The following 
decisions were made. For repair or compensation of material damage, 
Kentucky's program has the equivalent provisions and enforcement 
authority. Therefore, DSMRE would enforce the State counterparts to 30 
CFR 817.121(c)(2) while OSM would conduct normal oversight using the 
ten-day notice process if necessary. This enforcement approach was 
agreed to by the participants.
    For water replacement, LFO as a result of the consultation with 
DSMRE, is recommending State and OSM Federal enforcement of 30 CFR 
817.41(j). For the period October 24, 1992, through July 15, 1994, LFO 
will enforce EPACT water replacement provisions at 30 CFR 817.41(j) in 
Kentucky. After July 16, 1994, DSMRE has established both the authority 
to enforce and equivalent State provisions for water replacement 
resulting from damage caused by underground mining.
    Comments. On April 7, 1995, OSM published in the Federal Register 
(60 FR 17741) an opportunity for a public hearing and a request for 
public comment to assist OSM in making its decision on how the 
underground coal mine subsidence control and water replacement 
requirements should be implemented in Kentucky. The comment period 
closed on May 8, 1995. Because OSM did not receive a request for one, 
OSM did not hold a public hearing. Following are summaries of all 
substantive comments that OSM received and OSM's responses to them
    A mining association responded on May 12, 1995 (Administrative 
Record No. KY-1356). The party commented that the enforcement 
alternatives incorporating total or partial direct interim Federal 
enforcement (items (3) and (4) in section I.B. above) have no statutory 
basis in SMCRA and are not consistent with Congress' intent in creating 
section 720 of SMCRA. Specifically, the party commented that SMCRA 
contains various statutory procedures for the amendment, preemption, 
and substitution of Federal enforcement of State programs (sections 
503, 505, and 521(b) that should be used in lieu of direct interim 
Federal enforcement.
    In response to this comment, OSM's position remains as was stated 
in the March 31, 1995, preamble for the Federal regulations at 30 CFR 
843.25, which in part implement section 720 of SMCRA:

    OSM has concluded that it is not clear from the legislation or 
legislative history, how Congress intended that section 720 was to 
be implemented, in light of existing SMCRA provisions for State 
primacy. Thus, OSM has a certain amount of flexibility in 
implementing section 720. After weighing these considerations, OSM 
intends to implement section 720 promptly, but will pursue Federal 
enforcement without undermining State primacy under SMCRA.

    (60 FR 16722, 16743). Using this rationale, OSM concludes that 
there is not inconsistency in its implementation of section 720 of 
SMCRA with sections 503, 505, and 521(b) of SMCRA.
    Further, the party commented that Congress' intent was that 
agreements between coal mine operators and landowners would be used to 
ensure that the protection standards of section 720 of SMCRA would 
occur rather than enforcement by State regulatory authorities and OSM. 
The party did not supply any legislative history to support this 
conclusion, and the plain language of section 720 of SMCRA does not 
support this conclusion.
    Lastly, the party commented that the waiving of ten-day notice 
procedures in implementing direct Federal enforcement is not consistent 
with Federal case law. OSM does not agree with the commenter's 
assertion. The following response to a similar comment in the March 31, 
1995, Federal Register (60 FR 16722, 16742-16745) also applies to this 
comment.

    [The commenter stated that] the proposal to provide for direct 
Federal enforcement ignores Federal case law which indicates that, 
as a general proposition, the State program, not SMCRA, is the law 
within the State. OSM recognizes that, under existing rules 
implementing SMCRA, States with approved regulatory programs have 
primary responsibility for implementing SMCRA, based on the approved 
program. However, in this rule, OSM has carved out a limited 
exception to the general proposition, to the extent necessary to 
give reasonable force and effect to section 720, while maintaining 
so far as possible State primacy procedures. OSM believes that the 
process adopted in this final rule is consistent with and authorized 
by Congress under the Energy Policy Act, and that case law 
interpreting other provisions of SMCRA is not necessarily 
dispositive.

    A non-profit organization responded on May 8, 1995 (Administrative 
Record No. KY-1354), with several comments. Because of Kentucky's lack 
of statutory authority to mandate replacement of water supplies damaged 
by underground mining prior to July 16, 1994, the party feels OSM 
should initiate direct enforcement. The Director agrees. As discussed 
in the Director's Decision below, the Director has decided that OSM 
will enforce the provisions of 30 CFR 817.41(j) for the period from 
October 24, 1992, to July 16, 1994.
    The party commented that Kentucky should be placed on an expedited 
schedule for submission of a State program amendment which incorporates 
emergency regulations for immediate implementation of the permitting 
requirements for water replacement and subsidence protection. The 
Director recognizes that Kentucky needs to amend its administrative 
regulations and accepts Kentucky's proposed schedule for the 
development and promulgation of amendments. As discussed in section 
I.C. above, by letter dated June 2, 1995, Kentucky proposes to amend 
its regulations to be consistent with the revised Federal regulations. 
By August 15, 1995, it plans to begin the promulgation process by 
submitting to its LRC a Notice of Intent to promulgate regulations on 
water supply replacement and subsidence.

[[Page 38685]]

    The party also recommends that the implementation of the subsidence 
and water replacement rules should be an oversight topic (special 
study) for at least the first two years of implementation. The Director 
notes that OSM will continue to consider special studies of interest to 
its stakeholders as required by OSM's Directive REG-8 which establishes 
the procedures for conducting oversight. The State will be required to 
enforce the provisions of its approved program while OSM will conduct 
normal oversight using the ten-day notice process if necessary.
    The party recommends that all citizen complaints relating to the 
water loss or subsidence provisions that are the subject of this notice 
be logged and tracked by OSM to assure proper implementation of the 
Energy Policy Act. The Director notes that the LFO has compiled a list 
of all water loss complaints received after October 24, 1992, and each 
complaint will be evaluated. Since Kentucky has equivalent provisions 
to the Federal subsidence regulations, the Director notes that State 
will enforce those provisions while OSM will conduct normal oversight 
using the ten-day notice process, if necessary.
    The party feels that in those cases when the State has previously 
investigated a complaint, the ten-day notice process should not be used 
prior to Federal investigation and enforcement. The Director does not 
agree and reiterates his response to the comment above. For all 
subsidence-related complaints and for those water replacement-related 
complaints where damage occurred after July 16, 1994, OSM will conduct 
normal oversight using the ten-day notice process, if necessary.
    The party's last comment concerned the permitting process. It 
recommends that pending submission of the State program amendment, if 
Kentucky does not modify the permitting process immediately through the 
use of existing language in the State program to require additional 
groundwater and subsidence information, OSM should demand that each 
permittee be required, prior to permit issuance, to develop groundwater 
and subsidence information for OSM's approval prior to permit issuance. 
Failing this, individual enforcement actions should be taken. The 
Director does not agree. Kentucky has jurisdiction over the regulation 
of its surface coal mining operations. Through the 30 CFR 732.17 
process, the Director will notify Kentucky of required changes to its 
program.
    Director's decision. Based on the information provided by Kentucky, 
discussions held with the State on June 14, 1995, and the comments 
discussed above, the Director has decided that the enforcement of the 
underground coal mine subsidence control and water replacement 
requirements in Kentucky will be accomplished by State and OSM 
enforcement--Option #4. Kentucky will enforce its provisions that 
correspond to the Federal regulations at 30 CFR 817.41(c)(2) pertaining 
to the repair or compensation of material damage resulting from 
subsidence. Kentucky has statutory provisions in place that correspond 
to the Federal regulations and has the authority to implement its 
provisions for all underground activities conducted after October 24, 
1992. Kentucky will also enforce its provisions that correspond to the 
Federal regulations at 30 CFR 817.41(j) pertaining to water replacement 
for the period after July 16, 1994. It has statutory provisions in 
place that correspond to the Federal regulations and has the authority 
to implement its provisions for all underground mining activities 
conducted after July 16, 1994--the effective date of Kentucky's 
statutory provisions for water replacement. For those underground 
mining activities conducted after October 24, 1992, and before July 16, 
1994, OSM will enforce the provisions of 30 CFR 817.41(j) because 
Kentucky does not have the statutory authority to retroactively apply 
water replacement requirements to water losses prior to the effective 
date of its statute.
    If circumstances within Kentucky change significantly, the Director 
may reassess this decision. Formal reassessment of this decision would 
be addressed by Federal Register notice.

    Dated: July 24, 1995.
Allen D. Klein,
Regional Director, Appalachian Regional Coordinating Center.
[FR Doc. 95-18581 Filed 7-27-95; 8:45 am]
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