[Federal Register Volume 61, Number 233 (Tuesday, December 3, 1996)]
[Proposed Rules]
[Pages 64220-64227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30134]



[[Page 64219]]

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Part III

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Department of the Interior





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Office of Surface Mining Reclamation and Enforcement



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30 CFR Part 870



Coal Moisture; Proposed Rule

  Federal Register / Vol. 61, No. 233 / Tuesday, December 3, 1996 / 
Proposed Rules  

[[Page 64220]]



DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 870

RIN 1029-AB78


Coal Moisture

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

ACTION: Proposed rule.

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SUMMARY: The Office of Surface Mining Reclamation and Enforcement (OSM) 
proposes to amend its regulations governing how the excess moisture 
allowance is determined for reclamation fee purposes. This action will 
define terms and phrases related to the collection and testing of coal 
samples used to determine the inherent and total moisture of coal; 
identify acceptable American Society for Testing and Materials (ASTM) 
standard sampling and testing methods for high and low-rank coals; 
prescribe frequencies for collecting and testing coal samples; and 
provide the coal industry with formulas for use in calculating an 
excess moisture tonnage allowance for the purpose of reducing the 
weight of coal subject to the abandoned mine land reclamation fee.
    The proposed regulatory revision is necessary to clarify and 
simplify technical guidance for all users, and to provide the coal 
industry with standard criteria for calculating an excess moisture 
allowance on all coals subject to reclamation fee payment. The intended 
effect of this proposal is to enhance compliance with the provisions of 
section 402 of the Surface Mining Control and Reclamation Act of 1977 
(SMCRA or the ACT). Operator use of the prescribed criteria will ensure 
that all tonnage reductions for excess moisture are taken on the same 
basis.

DATES: Written comments: OSM will accept written comments on the 
proposed rule until 5 p.m. Eastern time on February 3, 1997.
    Public Hearings: OSM will accept requests for public hearings until 
5 p.m. Eastern time on January 2, 1997.

ADDRESSES: Written comments: Hand-deliver or mail to the Office of 
Surface Mining Reclamation and Enforcement, Administrative Record, Room 
120, 1951 Constitution Avenue, NW., Washington, D.C. 20240.
    Comments may also be sent through the Internet to OSM's 
Administrative Record, Internet address: [email protected]. Copies of 
any messages received electronically will be filed with the 
Administrative Record.
    Request for public hearings: Submit requests to Dr. Kewal Kohli, 
Office of Surface Mining Reclamation and Enforcement, U.S. Department 
of the Interior, 9 Parkway Center, Pittsburgh, PA 15220, telephone 
(412) 937-2175.

FOR FURTHER INFORMATION CONTACT: Dr. Kewal Kohli, telephone (412) 937-
2175.

SUPPLEMENTARY INFORMATION:

    I. Public Comment Procedures
    II. Background
    III. Discussion of the Proposed Rules
    IV. Procedural Matters

I. Public Comment Procedures

Written Comments

    Written comments submitted on the proposed rule should be specific, 
should be confined to issues pertinent to the proposed rule, and should 
explain the reason for any recommended change. Where practical, 
commenters should submit three copies of their comments. Comments 
received after the close of the comment period (see DATES) or delivered 
to addresses other than those listed above (see ADDRESSES), may not be 
considered or included in the Administrative Record for the final rule.

Public Hearings

    OSM will hold public hearings on the proposed rule by request only. 
The times, dates, and addresses for all hearings will be announced in 
the Federal Register at least 7 days prior to any hearings which are to 
be held. Upon request, OSM will hold a public hearing on the proposed 
rule in Washington, D.C. and in the State of Colorado. Individuals 
wishing to attend, but not testify at any hearing should contact the 
person identified under FOR FURTHER INFORMATION CONTACT beforehand to 
verify that the hearing will be held, should also contact the person 
listed under FOR FURTHER INFORMATION CONTACT.
    Any person interested in participating at a hearing at a particular 
location, or any disabled individual who requires special accommodation 
to attend a public hearing, should inform Dr. Kohli (see FOR FURTHER 
INFORMATION CONTACT) either orally or in writing of the desired hearing 
location by 5 p.m. Eastern time on January 2, 1997. If no one has 
contacted Dr. Kohli to express an interest in participating in a 
hearing at a given location by that date the hearing will not be held. 
If only one person expresses an interest, a public meeting rather than 
a hearing may be held and the results will be included in the 
Administrative Record.
    If a hearing is held, it will continue until all persons wishing to 
testify have been heard. To assist the transcriber and ensure an 
accurate record, OSM requests that persons who testify at a hearing 
provide the transcriber a written copy of their testimony.
    To assist OSM in preparing appropriate questions, OSM also requests 
that persons who plan to testify submit to OSM at the address 
previously specified for the submission of written comments (see 
ADDRESSES) an advance copy of their testimony.

II. Background

    Section 402(a) of the SMCRA requires all operators of coal mining 
operations subject to its provisions to pay a reclamation fee on each 
ton of coal produced. In December 1977 OSM first promulgated 
regulations to implement this provisions (42 FR 62714, December 13, 
1977). Briefly, the regulations require that the Abandoned Mine Land 
(AML) fees must be paid on the actual gross weight of the coal, at the 
time of the first transaction (sale, transfer of ownership, or use) 
involving the coal. This regulation has been in effect basically 
unchanged since 1977. In 1982, OSM revised the regulatory language to 
clarify the point in time of fee determination and to stress that the 
actual gross weight of the coal must be used for fee calculation. At 
that time OSM also specifically noted that no fees were owed on 
impurities physically removed before the sale, transfer of possession 
or use. In 1988, OSM again revised this regulation to allow an operator 
who mined coal after July 1, 1988, to elect to take an allowance for 
moisture contained in the coal at the time of sale that is determined 
to be in excess of the inherent, or natural bed moisture, in the coal.
    Initially, OSM adopted the excess moisture allowance to address an 
inconsistency in the methods of determining coal weight under various 
Federal taxation requirements. At the time OSM proposed to amend its 
regulation to allow a deduction for excess moisture, the ASTM Committee 
on Coal and Coke, whose membership included representatives of the 
Internal Revenue Service (IRS) and OSM, was conducting a study to 
develop and/or confirm precision statements for the ASTM standard test 
method used to estimate the bed moisture in high-rank coals, ASTM 
D1412-85, as it applied to coals of all ranks. In a letter of November 
18, 1987, the IRS submitted the following comment in response to the 
OSM proposal, ``the results of the ASTM or a similar study should be 
received before one test is prescribed for use by all taxpayers.''

[[Page 64221]]

    As an interim measure, until adequate and fully reliable testing 
procedures became available for coals of all ranks, OSM's 1988 adopted 
regulation incorporated a suggestion made by the IRS. OSM decided to 
rely on a facts and circumstances test to allow an operator to elect to 
take an allowance for excess moisture provided the operator could 
demonstrate, through competent evidence, that there was a reasonable 
basis for determining the existence and amount of excess moisture. 
OSM's standard of reasonableness required an operator to provide 
sufficient documentation to sustain the weight reduction. Although no 
specific time periods were prescribed for testing, an operator was also 
required to prove that time frames chosen to measure the existence and 
amount of excess moisture were reasonable.
    The preamble to the 1988 rule discussed OSM's willingness to accept 
the standard ASTM test methods to determine inherent moisture, ASTM 
D1412-85, and total moisture, ASTM D3302-82, pending the availability 
of more suitable alternatives. OSM recognized that these tests were not 
always reliable for this purpose and acknowledged its willingness to 
accept other testing methods for some sub-bituminous and lignite coals. 
OSM also stated its intent to develop technical guidance to assist 
operators and to assure uniform application of the excess moisture 
allowance throughout the industry.
    As a result of the 1988 regulatory revision, under both OSM's 
regulatory requirements, and the IRS Ruling (86-96), an operator may 
claim a reduction in coal subject to reclamation fees, and a reduction 
in coal subject to the black lung tax, by estimating the excess 
moisture contained in the coal. OSM has notified the IRS of its intent 
to propose a revision to its current regulation, and will continue to 
consult with the IRS throughout this rulemaking process.
    The final rule which OSM adopted in 1988, at 30 CFR Sec. 870.12, 
allows an operator to elect to reduce the weight of coal tonnage 
subject to reclamation fee payment by a percentage of excess moisture 
estimated to be contained in the coal at the time of fee assessment. 
OSM defines the term ``excess moisture'' as the difference between 
``total moisture'' and ``inherent moisture.'' The ASTM definitions are 
used for the terms ``total moisture'' and ``inherent moisture,'' at 30 
CFR Sec. 870.5.
    Standard laboratory test methods must be used to determine the 
estimated amount of excess moisture contained in the coal that is used 
as the basis for an excess moisture allowance. The excess moisture 
contained in mined coal must be found by collecting a coal sample and 
testing the sample to determine a percentage of inherent moisture 
estimated to be in the undisturbed coal as it lies in the seam. The 
operator must also collect and test coal at the shipping point to find 
the estimated total moisture percentage in as-shipped coal. The 
percentage of excess moisture that may be deducted from the weight of 
the coal for fee payment purposes is then calculated by finding the 
difference between the total moisture percentage and the inherent 
moisture percentage.
    OSM has issued five AML Payer Letters to provide technical guidance 
to the coal industry and assist with the application of this 
regulation. OSM has also published this guidance in the OSM Payer 
Handbooks. The first AML Payer Letter, issued on June 16, 1988, 
provided for the operator to: Make an inventory of any coal mined prior 
to July 1, 1988, that was stockpiled, or otherwise stored on the mine 
site; use the ASTM D1412 test as the standard test method to determine 
the estimated percentage of inherent moisture; establish an accurate 
estimate of the coal seam's baseline inherent moisture by taking one 
inherent moisture test in each month of the first 24 months a coal seam 
is in continuous operation; and, take one annual inherent moisture test 
after completion of the baseline study period. The baseline can be 
based, in part, on information from existing sources such as the United 
States Geological Survey or the Department of Energy, provided the 
operator uses its own sampling and testing data to validate or update 
data obtained from these sources. An operator can use either ASTM 
Standard Test Method for Total Moisture in Coal, D3302, or ASTM 
Standard Practice for Proximate Analysis of Coal and Coke, test method 
D3172, to determine an estimated total moisture percentage. Total 
moisture is tested at the time of the initial bona fide sale, transfer 
of ownership, or use of the coal. Operators are advised to maintain a 
full description and rationale for any deviations from standard test 
methods, according to 30 CFR Sec. 870.18(d).
    The second AML Payer Letter, issued on September 28, 1988, provided 
ten different examples illustrating how to calculate an excess moisture 
allowance under various circumstances for coal that was either raw, 
clean, or blended. That Letter also provides instructions for 
completing the Coal Production and Reclamation Fee Report (Coal 
Reclamation Fee Report), Form OSM-1, to report the excess moisture 
allowance.
    A third AML Payer Letter dated July 17, 1989, acknowledged that OSM 
would accept: Total moisture tests performed by the operator's 
customer, provided the operator maintains documentation to support the 
test results; and, moisture percentages accepted by another taxing 
authority only when the percentages were supported by actual test data. 
This Letter provided notice that OSM would not accept the use of a core 
sample to establish inherent moisture. The use of a weighted average in 
calculations, and the type of test documentation an operator would need 
to maintain are illustrated.
    On September 14, 1990, OSM issued its fourth AML Payer Letter. This 
Letter consolidated and replaced the guidance in the three previous AML 
Payer letters on testing, completion of the Form OSM-1, and computing 
the excess moisture allowance under various scenarios. OSM also re-
emphasized that total moisture should be determined for each day's 
shipments.
    In an AML Payer Letter issued on July 15, 1993, OSM was able to 
expand its testing frequency guidelines for inherent moisture to 
include quarterly testing as an alternative to monthly testing. This 
came about as a result of research conducted by the OSM engineering 
staff on actual excess moisture allowances taken for more than 4 years. 
The AML Payer Letter advised operators that OSM would accept either 
quarterly inherent moisture estimates based on tests taken once in a 
quarter, or monthly tests. The ASTM had adopted the use of a corehole 
sample to test for inherent moisture. The AML Payer Letter informed the 
industry that OSM also accepts the use of corehole samples to test coal 
for inherent moisture. OSM advised the industry that it cannot accept 
residual moisture as inherent moisture because residual moisture and 
inherent moisture are not equal. This AML Payer Letter also informed 
the industry that OSM will provide notice when it proposes to adopt an 
alternative procedure that will more accurately establish inherent 
moisture in low-rank coal.
    OSM's audits of excess moisture reduced tonnages find that 
operators frequently fail to conform to inherent moisture test 
procedures described in AML Payer Letters, and do not provide adequate 
support for procedures they do use. Some operators mining large volumes 
of low-rank coal base tonnage reductions on test data that is known to 
be unreliable.
    In October 1992, OSM conducted its own independent sampling and 
testing program in Wyoming's Powder River

[[Page 64222]]

Basin to assess the reliability of existing ASTM methods and procedures 
for determining inherent moisture in low-rank coal. In March 1993, OSM 
met with operators in Gillette, Wyoming, to provide them with the 
results of its study and inform them that OSM was considering 
regulatory requirements for inherent moisture testing. This rulemaking 
proposes to adopt a new requirement for establishing inherent moisture 
in low rank coal based, in part, on the results of OSM's Powder River 
Basin sampling and testing program.

III. Discussion of the Proposed Rules

    At this time OSM is proposing to revise its regulations governing 
the excess moisture allowance to codify regulatory technical 
requirements to be met by an operator who elects to take an excess 
moisture allowance in either high- or low-rank coals. The proposal 
incorporates by reference ASTM standards used for collecting and 
testing a coal sample as specified in Sec. 870.19(a), Table 1 and Table 
2, and Sec. 870.20(a), Tables 3, 4, and 5, as published in the 1994 
Annual Book of ASTM Standards, Volume 05.05. A copy of the ASTM 
standards is available for inspection at the OSM Headquarters Office, 
Office of Surface Mining Reclamation and Enforcement, Administrative 
Record, Room 120, 1951 Constitution Avenue, NW., Washington, DC, or at 
the Office of the Federal Register, 800 North Capitol St., Washington, 
DC. The proposed rule establishes a frequency for using ASTM standard 
test methods on coals of all ranks, and adopts the method approved by 
the ASTM to establish inherent moisture in low-rank coal, the ASTM 
D1412-93, Appendix XI. Use of this procedure for low-rank coal would 
ensure excess moisture allowances taken on low-rank coals are on a 
comparable basis to those taken on high-rank coal, and all excess 
moisture allowances are fair and equitable. OSM's proposal also 
includes an option that would provide operators with a method to 
calculate an allowance for the inherent moisture present in as-shipped 
coal. This would be of particular benefit when an operator sells large 
volumes of coal, and/or sells coal with a substantial variance between 
the total and inherent moisture.

Definitions--Section 870.5

    OSM would modify the existing definition for excess moisture by 
including, by reference, a formula for use in calculating excess 
moisture in high- and low-rank coals. The formula to be used for high-
rank coals is found in a new Sec. 870.19 and the formula for low-rank 
coals is in a new Sec. 870.20. The existing definition of inherent 
moisture would be expanded to incorporate by reference the specific 
ASTM sample collection methods and test procedures shown in 
Sec. 870.19, Table 2, Calculating INHERENT moisture percentage in HIGH-
rank coal, and Sec. 870.20, Table 4, and Table 5, Calculating INHERENT 
moisture percentage in LOW-rank coal. The existing definition of total 
moisture would be expanded to incorporate by reference ASTM criteria in 
Sec. 870.19, Table 1, for Calculating the TOTAL moisture percentage in 
HIGH-rank coal, and Sec. 870.20, Table 3, for Calculating the TOTAL 
moisture percentage in LOW-rank coal. The expansion of the existing 
definitions to incorporate by reference specific ASTM sample collection 
methods and test procedures would provide precise technical standards 
to facilitate operator compliance with OSM's requirements, and to 
ensure that the same basis is used to calculate all excess moisture 
allowances.

General Rules for Calculating Excess Moisture--Section 870.18

    OSM proposes to modify 30 CFR Sec. 870.18, Excess moisture content 
allowance at Sec. 870.18 (a), (b), and (c). Section 870.18(a) requires 
an operator to demonstrate through competent evidence that the basis 
for determining the existence and amount of excess moisture is 
reasonable. OSM requires documentation to be updated as needed to prove 
an excess moisture allowance taken by an operator continues to be 
valid. Section 870.18(b) requires standard laboratory analyses for 
testing inherent and total moisture. Section 870.18(c) requires an 
operator who blends coal mined from multiple seams prior to the initial 
sale, transfer or use of the coal to test for variations in the 
inherent moisture amounts from different seams.
    This proposal would replace the reasonableness standard found at 
Sec. 870.18(a), the generic laboratory test requirement at 
Sec. 870.18(b), and the requirement for a separate test of coal from 
each seam mined prior to blending the coal for sale, transfer of 
ownership or use. OSM proposes a revision to the existing regulation 
that would recognize the distinct differences in high- and low-rank 
coals in new Secs. 870.19 and 870.20. Section 870.19 proposes 
acceptable standards for collecting and testing a sample of high-rank 
coal to establish the percentage of inherent and total moisture 
contained in the coal, and calculate the excess moisture allowance. 
Section 870.20 proposes like standards for calculating the excess 
moisture allowance for low-rank coal.
    Revised section 870.18(c) would add definitions to further explain 
the meaning of terms as they are used in new Secs. 870.19 and 870.20. 
``As-shipped coal'' and ``tipple coal'' is defined as the coal found at 
the mine or loading facility. A precise meaning for a ``channel 
sample'' and ``core sample'' is given and the definitions incorporate 
by reference the specific ASTM procedure used to take the particular 
kind of sample. The ``correction factor'' is added as the method used 
to establish the difference between the equilibrium moisture and 
inherent moisture in low-rank coal under Sec. 870.20. ``Equilibrium 
moisture'' is defined as the method used to estimate the inherent 
moisture in all coals, and ASTM D1412 and ASTM D1412, Appendix XI, are 
incorporated by reference. Types of ``high-rank coals'' and ``low-rank 
coals'' are defined to explain how these terms are used throughout 
Sec. 870.5 and Secs. 870.18-20.

How To Calculate Excess Moisture in HIGH-Rank Coal--Section 870.19

    A new Sec. 870.19 would provide standard criteria for an operator 
to use to establish excess moisture in high-rank coal. Table 1 includes 
the ASTM standard sample collection method, ASTM D2234-89, Standard 
Test Methods for Collection of a Gross Sample; and test procedure, 
ASTM-D3302-91, Standard Test Method for Total Moisture in Coal, that 
OSM would accept for use as the basis for calculating the percentage of 
total moisture in as-shipped high-rank coal each day the coal is either 
shipped or used.
    The daily total moisture test results would be converted to 
quarterly figures to be reported to OSM on the OSM-1 Coal Reclamation 
Fee Report. To calculate the quarterly total moisture percentage an 
operator would: (1) multiply the daily total moisture percentage by the 
tonnage shipped or used that day, to find the daily total moisture 
tonnage; and, (2) add the daily total moisture tonnage for each day in 
the quarter; and, (3) add the daily tonnage shipped or used in the 
quarter, to find the total tonnage shipped or used during the quarter. 
Then, divide the sum of the daily total moisture tonnage, step (2), by 
the sum of the daily tonnage shipped or used in the quarter, step (3). 
This will result in the total moisture percentage in high-rank coal for 
the quarter which would be reported on the OSM-1, Coal Reclamation Fee 
Report.
    Table 2 provides three methods for sampling high-rank coal, and 
testing the sample to determine the inherent moisture percentage that 
would be acceptable to OSM. To collect a coal

[[Page 64223]]

sample directly from a coal seam an operator could use either a core or 
a channel sample method. If a core sample is collected the operator 
would be required to collect the sample using procedures in ASTM D5192-
91, Standard Practice for Collection of Coal Samples from Core and to 
use laboratory procedures in ASTM D1412-93, Standard Test Method for 
Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity and 
30  deg.C to estimate the inherent moisture in the sample. If a channel 
sample method is used the operator would be required to collect the 
sample using procedures in ASTM D4596-93, Standard Practice for 
Collection of Channel Samples of Coal in a Mine and to use laboratory 
procedures in either ASTM D1412-93, Standard Test Method for 
Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity and 
30  deg.C, or ASTM D3302-91, Standard Test Method for Total Moisture in 
Coal to estimate the inherent moisture in the sample. To collect a 
sample of blended coal, as-shipped coal, tipple coal, commingled coal, 
or coal from slurry ponds an operator would use Procedures in ASTM 
D2234-89, Standard Test Methods for Collection of a Gross Sample and 
laboratory procedures in ASTM D1412-93, Standard Test Method for 
Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity and 
30  deg.C would be required to estimate the inherent moisture in the 
sample.
    An operator would be required to select one of two options for 
timing inherent moisture tests, either quarterly or monthly. If a 
quarterly inherent moisture test is chosen, the operator would have to 
report the results of one inherent moisture test taken at any time 
during the quarter on the OSM-1 form for the quarter in which the test 
was taken. If monthly inherent moisture testing is preferred, the 
operator would be required to create a 24-month inherent moisture 
baseline during the first 24-months a coal seam is in continuous 
operation. To create the 24-month inherent moisture baseline an 
operator would have to collect and test one sample in each month of the 
calendar quarter. The quarterly inherent moisture percentage reported 
to OSM for the first 8 quarters a seam is in continuous operation would 
then be based on a weighted average of the 3-monthly inherent moisture 
test results. To determine the quarterly weighted average inherent 
moisture percentage an operator would have to: (1) multiply the 
inherent moisture percentage for one month by the number of tons 
produced or shipped in that month to find the monthly inherent moisture 
tonnage; (2) add the inherent moisture tonnage determined in (1) for 
each of the 3 months to find the quarterly inherent moisture tonnage; 
(3) divide the inherent moisture tonnage found in (2) by the total 
number of tons produced or shipped during the three months of the 
quarter; and, (4) report the weighted average percentage for the 
quarter to OSM on the OSM-1 form. After the first 24-months an operator 
would have to use an updated rolling average percentage to report 
inherent moisture percentages for all subsequent quarters in which a 
coal seam is continuously mined. The rolling average percentage would 
be calculated by: adding the results of one inherent moisture test of 
one coal sample collected during every 12-month period to the inherent 
moisture percentages for the preceding 23 tests, and dividing the sum 
of these tests by 24.
    Section 870.19(a) provides instruction on how an operator would 
calculate the excess moisture in high-rank coal by using one of two 
methods. One method involves the simple subtraction of the inherent 
moisture percentage from the total moisture percentage as it is found 
in the existing rule. OSM expects that most operators of small to 
medium size mines would likely prefer to continue to use this method. A 
new alternative formula is added as a second method in Sec. 870.19(a) 
that would allow an adjustment in the excess moisture calculation for a 
percentage of inherent moisture contained in the as-shipped coal. Some 
operators who either mine a large volume of coal, or mine coal with a 
significant variance in total and inherent moisture, have requested 
OSM's approval to use this formula for calculating a tonnage reduction 
for excess moisture. OSM is now proposing this option as an alternative 
to the existing formula used to determine the excess moisture 
percentage. The excess moisture percentage found in Sec. 870.19(a) is 
multiplied by the tonnage shipped or used during the quarter to 
determine the excess moisture reduced tonnage for the quarter under 
Sec. 870.19(b).

How to calculate excess moisture in LOW-rank coal--Section 870.20

    A new Sec. 870.20 would provide standard criteria for an operator 
to use to establish excess moisture in low-rank coal. Table 3 includes 
the ASTM standard sample collection method, ASTM D2234-89, Standard 
Test Methods for Collection of a Gross Sample, and test procedure, 
ASTM-D 3302-91, Standard Test Method for Total Moisture in Coal, that 
OSM would accept for use as the basis for calculating the percentage of 
total moisture in as shipped low-rank coal each day the coal is either 
shipped or used.
    The daily total moisture test results would be converted to 
quarterly figures to be reported to OSM on the OSM-1 Coal Reclamation 
Fee Report. To calculate the quarterly total moisture percentage an 
operator would: (1) multiply the daily total moisture percentage by the 
tonnage shipped or used that day, to find the daily total moisture 
tonnage; (2) add the daily total moisture tonnage for each day in the 
quarter; and, (3) add the daily tonnage shipped or used in the quarter, 
to find the total tonnage shipped or used during the quarter. Then, 
divide the sum of the daily total moisture tonnage, step (2), by the 
sum of the daily tonnage shipped or used in the quarter, step (3). This 
will result in the total moisture percentage in low-rank coal for the 
quarter which would be reported on the OMS-1, Coal Reclamation Fee 
Report.
    Table 4 provides instructions on how an operator would determine 
the inherent moisture percentage of coal mined from a bench of low-rank 
coal by: collecting one sample of as-shipped coal in each month of the 
calendar quarter using ASTM D2234-89, Standard Test Methods for 
Collection of a Gross Sample of Coal; and, testing each sample for 
equilibrium moisture following laboratory procedures in ASTM D1412-93, 
Standard Test Method for Equilibrium Moisture of Coal at 96 to 97 
Percent Relative Humidity and 30  deg.C.
    The operator would calculate the inherent moisture percentage to 
report to OSM for the quarter by averaging the results from the 3 
monthly equilibrium moisture tests, and adding the correction factor. 
Table 5 provides the methodology for establishing the correction factor 
for all coal mined from each bench of low-rank coal.
    Table 5 provides the method an operator would be required to use to 
establish a correction factor during the first quarter an excess 
moisture allowance is taken on low-rank coal mined from a bench. The 
correction factor would be found by using ASTM D1412 Appendix XI, 
Standard Test Method for Equilibrium Moisture of Coal at 96 to 97 
Percent Relative Humidity and 30  deg.C to collect 5 samples of coal 
from a freshly exposed, unweathered coal seam face during each month of 
the quarter. Each of the 15 samples, 5 in each quarter, would be tested 
for inherent moisture and equilibrium moisture as required by ASTM 
D1412 Appendix XI, Standard Test Method for

[[Page 64224]]

Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity and 
30  deg.C.
    The operator would be required to establish the correction factor 
for the first quarter and all later quarters by: averaging the 15 
monthly inherent moisture test results; and, averaging the 15 monthly 
equilibrium moisture test results; and, subtracting the average 
inherent moisture from the average equilibrium moisture. The correction 
factor would apply only to coal mined from the bench that is sampled. 
The correction factor could be changed at any time provided new samples 
are taken and all procedures shown in Table 5 are repeated.

IV. Procedural Matters

Federal Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, Public Law 
104-13, OSM is requesting comments from the public and the Office of 
Management and Budget (OMB) on the information collections contained in 
this proposed rulemaking. Comments should address: (a) Whether the 
proposed collection of information is necessary for the proper 
performance of OSM, including whether the information will have 
practical utility; (b) the accuracy of OSM's estimate of the burdens of 
the proposed collection of information; (c) ways to enhance the 
quality, utility, and clarity of the information to be collected; and 
(d) ways to minimize the burden of collection on the respondents, 
including the use of automated collection techniques or other forms of 
information technology. No person is required to respond to a 
collection of information unless it displays a currently valid OMB 
Control Number. OSM's Control Numbers are displayed in 30 CFR Parts 
710-955.
30 CFR Part 870
    Title: Abandoned mine reclamation fund--fee collection and coal 
production reporting.
    OMB Control Number: 1029-0090.
    Abstract: Section 402 of the Surface Mining Control and Reclamation 
Act of 1977 requires operators of coal mining operations to pay a 
reclamation fee to the Secretary for deposit in the Abandoned Mine 
Reclamation Fund for the purpose of reclaiming lands mined and left 
abandoned, or inadequately reclaimed, prior to the Act's effective 
date. Reclamation fees are to be paid on each ton of coal produced.
    Section 870.18 of the regulations allows an operator to take an 
excess moisture content allowance when calculating the amount of 
reclamation fees that are owed. Top substantiate the calculated 
moisture deduction claimed, an operator (or other entity responsible 
for the payment of the reclamation fee) is required to document by 
standard laboratory analysis the excess moisture content for each coal 
seam mined. This documentation must be updated as necessary to 
establish the continuing validity of the excess moisture content 
allowance taken by the operator.
    Need For and Use: The information submitted will be used by OSM 
auditors to verify an operator's compliance with Section 402 of the Act 
and the requirements of the regulation at 30 CFR 870.18, 870.19, and 
870.20. During an audit, operators must substantiate how the 
calculation for excess moisture was determined. Operators must retain 
their records for a 6-year period to allow for the audit of tax 
records. Courts have ruled that the AML fee is an excise tax. The 
applicable provision of the Energy Policy Act of 1992 (Section 2515) 
extended the fee through 2004.
    Respondents: Approximately 1,050 coal mining operators who take the 
coal moisture deduction allowance.
    Total Annual Burden: OSM estimates that 2 hours will be required to 
prepare and maintain the documentation for audit purposes per 
respondent. The total annual burden is estimated to be 2,100 hours.
    Send comments regarding these burden estimates or any other aspect 
of these information collection requirements by January 2, 1997, to the 
Office of Surface Mining Reclamation and Enforcement, Information 
Collection Clearance Officer, SIB 120, 1951 Constitution Avenue, NW., 
Washington, DC 20240; and the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: Interior Desk 
Officer, 725 17th Street, NW, Washington, DC 20503.
    Please refer to OMB Control Number 1029-090 in any correspondence.

Executive Order 12988 on Civil Justice Reform

    The Department of the Interior has determined that this proposed 
rule meets the requirements of sections (3)(a) and 3(b)(2) of Executive 
Order 12988, Civil Justice Reform (56 FR 55195).

Executive Order 12866

    This proposed rule has been determined to be significant under 
Executive Order 12866 and has been reviewed by the Office of Management 
and Budget.
    The proposed rule is not considered economically significant under 
section 3(f)(1) of Executive Order 12866 and will not have a 
significant economic effect on the coal mining industry, or on regional 
or national economies. OSM is attempting to provide a viable 
methodology that will enable coal mine operators to calculate the 
correct allowance for excess moisture. OSM is not attempting to specify 
any given amount, or percentage, as an excess moisture allowance. For 
that reason it is not possible to predict the cost that this revision 
will have in terms of the amount of the additional AML fees that the 
industry will pay and the government collect or the industry save and 
the government not collect. Based on AML tonnages reported, and the 
total moisture allowances taken for 1995, the industry saved 
approximately $5,284,000 (rounded) in terms of the tonnage reported. 
With regard to benefits, the proposed rule will ensure that all excess 
moisture allowances are fair and equitable. OSM's proposal also 
includes an option that would provide operators with a method to 
calculate an allowance for the inherent moisture present in as-shipped 
coal. This would be of particular benefit when an operator sells large 
volumes of coal, and/or sells coal with a substantial variance between 
the total and inherent moisture.
    To assist OSM in complying with the requirements of Executive Order 
12866, OSM invites comments on the potential costs and benefits of the 
proposed rule.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq., the Department of the Interior has determined that this rule 
would not have a significant economic effect on a substantial number of 
small entities for the reason stated below. This proposed rule will 
provide two methods for operators to calculate the excess moisture in 
high-rank coal. OSM expects that most operators of small to medium size 
mines would likely prefer to continue to use the current method of 
calculation while operators who either mine a large volume of coal, or 
mine coal with a significant variance in total and inherent moisture, 
will use the proposed option as an alternative to the existing formula 
used to determine the excess moisture percentage. Thus, for small 
operators any change from current practices would be optional.

Unfunded Mandates Reform Act

    This rule is not expected to impose a cost of $100 million or more 
in any given year on any governmental entity or the private sector.

[[Page 64225]]

National Environmental Policy Act

    OSM has prepared a draft environmental assessment (EA) of this 
proposed rule and has made a tentative finding that the proposed rule 
would not significantly affect the quality of the human environment 
under section 102(2)(C) of the National Environmental Policy Act of 
1969 (NEPA), 42 U.S.C. 4332(2)(C). It is anticipated that a Finding of 
No Significant Impact (FONSI) will be approved for the final rule in 
accordance with OSM procedures under NEPA. The EA is on file in the OSM 
Administrative Record at the address specified previously (see 
ADDRESSES). An EA will be completed on the final rule and a finding 
made on the significance of any resulting impacts prior to promulgation 
of the final rule.

Author

    The principal author of this proposed rule is Dr. Kewal Kohli, 
Mining Engineer, Office of Surface Mining, U.S. Department of the 
Interior, 3 Parkway Center, Pittsburgh, PA 15220.
    Inquiries with respect to the proposed rule should be directed to 
Dr. Kohli at the address and telephone specified under FOR FURTHER 
INFORMATION CONTACT.

List of Subjects in 30 CFR Part 870

    Incorporation by reference, Reporting and recordkeeping 
requirements, Surface mining, Underground mining.

    Dated: June 24, 1996.
Bob Armstrong,
Assistant Secretary, Land and Minerals Management.
Accordingly, it is proposed to amend 30 CFR part 870 as set forth 
below:

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

    1. The authority citation for part 870 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq.

    2. Section 870.5 is amended by revising definitions of ``excess 
moisture,'' ``inherent moisture'' and ``total moisture'' to read as 
follows:


Sec. 870.5  Definitions.

* * * * *
    Excess moisture means the difference between total moisture and 
inherent moisture, calculated according to Sec. 870.19 for high-rank 
coals or the difference between total moisture and inherent moisture 
calculated according to Sec. 870.20 for low-rank coals.
* * * * *
    Inherent moisture means moisture that exists as an integral part of 
the coal seam in its natural state, including water in pores, but 
excluding that present in macroscopically visible fractures, as 
determined according to Sec. 870.19(a) or Sec. 870.20(a).
* * * * *
    Total moisture means the measure of weight loss in an air 
atmosphere under rigidly controlled conditions of temperature, time and 
air flow, as determined according to either Sec. 870.19(a) or 
Sec. 870.20(a).
* * * * *
    3. Section 870.18 is revised to read as follows:


Sec. 870.18  General rules for calculating excess moisture.

    If you are an operator who mined coal after June 1988, you may 
deduct the weight of excess moisture in the coal to determine 
reclamation fees you owe under Sec. 870.12(b)(3)(i). Excess moisture is 
the difference between total moisture and inherent moisture. To 
calculate excess moisture in HIGH-rank coal, follow Sec. 870.19. To 
calculate excess moisture in LOW-rank coal, follow Sec. 870.20. Report 
your calculations on OSM-1, Coal Reclamation Fee Report, for every 
calendar quarter in which you claim a deduction. Some cautions:
    (a) You or a customer of yours may do any test required by 
Secs. 870.19 and 870.20. But whoever does a test, you are to keep test 
results and all related records for at least six years after the test 
date.
    (b) If OSM disallows any or all of an allowance for excess 
moisture, you must submit an additional fee plus interest computed 
according to Sec. 870.15(c) and penalties computed according to 
Sec. 870.15(f).
    (c) The following definitions are applicable to Secs. 870.19 and 
870.20. Applicable ASTM standards are incorporated by reference as 
published in the 1994 Annual Book of ASTM Standards, Volume 05.05. The 
Director of the Federal Register approved this incorporation by 
reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Each 
applicable ASTM standard is incorporated as it exists on the date of 
the approval, and a notice of any change in it will be published in the 
Federal Register. You may obtain copies from the ASTM, 1916 Race 
Street, Philadelphia, Pennsylvania, 19103-1187. A copy of the ASTM 
standards is available for inspection at the Office of Surface Mining 
Reclamation and Enforcement, Administrative Record, Room 120, 1951 
Constitution Avenue, NW., Washington, DC, or at the Office of the 
Federal Register, 800 North Capitol St., NW., Suite 700, Washington, 
DC.

    Note: The incorporation by reference and availability of 
inspection copies are pending approval by the Office of the Federal 
Register.

    (1) As-shipped coal means raw or prepared coal that is loaded for 
shipment from the mine or loading facility.
    (2) Channel sample means a sample of coal collected according to 
ASTM standard D4596-93 from a channel extending from the top to the 
bottom of a coal seam.
    (3) Core sample means a cylindrical sample of coal that represents 
the thickness of a coal seam penetrated by drilling according to ASTM 
standard D5192-91.
    (4) Correction factor means the difference between the equilibrium 
moisture and the inherent moisture in low rank coals for the purpose of 
Sec. 870.20(a).
    (5) Equilibrium moisture means an estimate of the inherent moisture 
in all coals. The equilibrium moisture is determined according to ASTM 
standard D1412-93 and accompanying appendices, as appropriate.
    (6) High-rank coals means anthracite, bituminous, and subbituminous 
A and B coals.
    (7) Low-rank coals means subbituminous C and lignite coals.
    (8) Tipple coal means coal from a mine or loading facility that is 
ready for shipment.
    4. Sections 870.19 and 870.20 are added to read as follows:

Sec. 870.19   How to calculate excess moisture in high-rank coal.

    Here are the requirements for calculating the excess moisture in 
high-rank coal for a calendar quarter. Applicable ASTM standards are 
incorporated by reference as published in the 1994 Annual Book of ASTM 
Standards, Volume 05.05. The Director of the Federal Register approved 
this incorporation by reference in accordance with 5 U.S.C. 552(a) and 
1 CFR part 51. Each applicable ASTM standard is incorporated as it 
exists on the date of the approval, and a notice of any change in it 
will be published in the Federal Register. You may obtain copies from 
the ASTM, 1916 Race Street, Philadelphia, Pennsylvania, 19103-1187. A 
copy of the ASTM standards is available for inspection at the Office of 
Surface Mining Reclamation and Enforcement, Administrative Record, Room 
120, 1951 Constitution Avenue, NW., Washington, DC, or at the Office of 
the Federal Register, 800 North

[[Page 64226]]

Capitol St., NW., Suite 700, Washington, DC.

    Note: The incorporation by reference and availability of 
inspection copies are pending approval by the Office of the Federal 
Register.

    (a)(1) Calculate the excess moisture percentage using one of these 
equations:
[GRAPHIC] [TIFF OMITTED] TP03DE96.000

    (2) EM equals excess moisture percentage. TM equals total as-
shipped moisture percentage calculated according to Table 1 of this 
section. IM equals inherent moisture percentage calculated according to 
Table 2 of this section.
    (b) Multiply the excess moisture percentage by the tonnage shipped 
or used during the quarter.

Table 1 to Sec.  870.19.--Calculating Total Moisture Percentage in High-
                              Rank coal \1\                             
------------------------------------------------------------------------
  Collect and test each day you        Convert daily test results to    
         ship or use coal            quarterly figures and report them  
------------------------------------------------------------------------
Collect a sample of as-shipped or  1. Multiply daily total moisture     
 used coal. Follow procedures in    percentage by daily tonnage shipped 
 ASTM D2234-89                      or used. You now have daily total   
Test the sample for daily total     moisture tonnage.                   
 moisture percentage. Follow       2. Add up daily total moisture       
 laboratory procedures in ASTM      tonnage for the quarter.            
 D3302-91.                         3. Add up daily tonnage shipped or   
                                    used in the quarter.                
                                   4. Divide 2 by 3.                    
                                   Report this total moisture percentage
                                    in high-rank coal for the quarter on
                                    OSM-1, Coal Reclamation Fee Report. 
------------------------------------------------------------------------
\1\ See Sec.  870.19 for the incorporation by reference of the ASTM     
  standards.                                                            


  Table 2 to Sec.  870.19.--Calculating INHERENT Moisture Percentage in 
                           HIGH-Rank Coal \1\                           
------------------------------------------------------------------------
                                    Choose from 2 ways to time the tests
Choose from 3 ways to collect and  and convert the results for quarterly
               test                              reporting              
------------------------------------------------------------------------
              First                                 First               
Collect a core sample. Follow      Collect and test once each quarter.  
 procedures in ASTM D5192-91.       Report test results by quarter on   
                                    OSM-1. Test results need no         
                                    converting; they are in quarterly   
                                    units already.                      
Test the sample to estimate                                             
 inherent moisture. Follow                                              
 laboratory procedures in ASTM                                          
 D1412-93.                                                              
            Or second                            Or second              
Collect a channel sample. Follow   Create a 24-month baseline and update
 procedures in ASTM D4596-93.       as follows:                         
Test the sample to estimate        For reporting months 1-24...         
 inherent moisture. Follow         Collect and test one sample each     
 laboratory procedures in ASTM      month. Each quarter, calculate a    
 D1412-93 or ASTM D3302-91.         weighted average percentage of      
                                    inherent moisture:                  
                                    Multiply a month's inherent 
                                    moisture percentage by tons produced
                                    or shipped. You now have the month's
                                    inherent moisture tonnage.          
                                    Add up 3 months of that     
                                    inherent moisture tonnage.          
                                    Divide by tons produced or  
                                    shipped in those 3 months.          
                                   Report the quarter's weighted average
                                    percentage on OSM-1.                
             Or third                                                   
Collect a sample of blended coal,  For all subsequent months...         
 as-shipped coal, tipple coal,     Collect and test one sample for      
 commingled coal, or coal from      inherent moisture every 12 months.  
 slurry ponds. Follow procedures    Calculate--and report in the        
 in ASTM D2234-89.                  following 4 quarters--one updated   
Test the sample to estimate         rolling average percentage:         
 inherent moisture. Follow          Add to the annual sample    
 laboratory procedures in ASTM      percentage the inherent moisture    
 D1412-93.                          percentages for the preceding 23    
                                    tests.                              
                                    Divide by 24.               
                                   Report the quarter's weighted average
                                    percentage on OSM-1.                
------------------------------------------------------------------------
\1\ See Sec.  870.19 for the incorporation by reference of the ASTM     
  standards.                                                            

      


Sec. 870.20  How to calculate excess moisture in LOW-rank coal.

    Here are the requirements for calculating the excess moisture in 
low-rank coal for a calendar quarter. Applicable ASTM standards are 
incorporated by reference as published in the 1994 Annual Book of ASTM 
Standards, Volume 05.05. The Director of the Federal Register approved 
this incorporation by reference in accordance with 5 U.S.C. 552(a) and 
1 CFR part 51. Each applicable ASTM standard is incorporated as it 
exists on the date of the approval, and a notice of any change in it 
will be published in the Federal Register. You may obtain copies from 
the ASTM, 1916 Race Street, Philadelphia, Pennsylvania, 19103-1187. A 
copy of the ASTM standards is available for inspection at the Office of 
Surface Mining Reclamation and Enforcement, Administrative Record, Room 
120, 1951 Constitution Avenue, NW., Washington, DC, or at the Office of 
the Federal Register, 800 North Capitol St., NW., Suite 700, 
Washington, DC.

    Note: The incorporation by reference and availability of 
inspection copies are pending approval by the Office of the Federal 
Register.

    (a)(1) Calculate the excess moisture percentage using one of these 
equations:
[GRAPHIC] [TIFF OMITTED] TP03DE96.001

    (2) EM equals excess moisture percentage. TM equals total as-
shipped moisture percentage calculated according to Table 1 of this 
section. IM equals inherent moisture percentage calculated according to 
Tables 2 and 3 of this section.

[[Page 64227]]

    (b) Multiply the excess moisture percentage by the tonnage shipped 
or used during the quarter.

 Table 1 to Sec.  870.20.--Calculating TOTAL Moisture Percentage in LOW-
                              Rank Coal\1\                              
------------------------------------------------------------------------
  Collect and test each day you      Convert test results to quarterly  
         ship or use coal                 figures and report them       
------------------------------------------------------------------------
Collect a sample of as-shipped or  Convert daily total moisture         
 used coal. Follow procedures in    percentage to quarterly total       
 ASTM D2234-89.                     moisture percentage:                
Test the sample for daily total    1. Multiply daily total moisture     
 moisture percentage. Follow        percentage by daily tonnage shipped 
 laboratory procedures in ASTM      or used. You now have daily total   
 D3302-91.                          moisture tonnage.                   
                                   2. Add up daily total moisture       
                                    tonnage for the quarter.            
                                   3. Add up daily tonnage shipped or   
                                    used in the quarter.                
                                   4. Divide 2 by 3.                    
                                   Report this total moisture percentage
                                    in low-rank coal for the quarter on 
                                    OSM-1, Coal Reclamation Fee Report. 
------------------------------------------------------------------------
\1\ See Sec.  870.20 for the incorporation by reference of the ASTM     
  standards.                                                            


  Table 2 to Sec.  870.20.--Calculating INHERENT Moisture Percentage in 
                            LOW-Rank Coal \1\                           
------------------------------------------------------------------------
                                     Convert test results to quarterly  
  Collect and test once a month           figures and report them       
------------------------------------------------------------------------
Collect 1 sample of as-shipped     Calculate inherent moisture          
 coal. Follow procedures in ASTM    percentage for the quarter:         
 D2234-89.                          Average the 3 equilibrium   
Test the sample for equilibrium     moisture results from your monthly  
 moisture. Follow laboratory        tests.                              
 procedures in ASTM D1412-93.       Add to this average a       
                                    Correction Factor that you calculate
                                    for the first quarter according to  
                                    Table 5 below.                      
                                   Report this inherent moisture        
                                    percentage for the quarter on OSM-1.
------------------------------------------------------------------------
\1\ See Sec.  870.20 for the incorporation by reference of the ASTM     
  standards.                                                            


 Table 3 to Sec.  870.20.--Calculating the Correction Factor for Table 4
                                   \1\                                  
------------------------------------------------------------------------
                                        Convert test results into a     
  Collect and test each month in    correction factor for all quarterly 
        the first quarter                         reports               
------------------------------------------------------------------------
Collect 5 samples of a freshly     Use the test results to calculate a  
 exposed, unweathered coal seam     correction factor:                  
 face. Follow procedures in ASTM    Average the 15 inherent     
 D1412-93 Appendix XI.              moisture results from your monthly  
                                    tests.                              
                                    Average the 15 equilibrium  
                                    moisture results from your monthly  
                                    tests.                              
                                    Subtract the average        
                                    equilibrium moisture from the       
                                    average inherent moisture.          
Test each sample for two things:   You now have a correction factor for 
 Inherent moisture          the first quarter the deduction is  
 Equilibrium moisture.      taken, and all later quarters. Use  
                                    it in Table 4 above. You may change 
                                    the correction factor at any time by
                                    repeating the steps in this table.  
Follow laboratory procedures in    A correction factor applies to only  
 ASTM D1412-93 Appendix XI.         the bench you sample.               
------------------------------------------------------------------------
\1\ See Sec.  870.20 for the incorporation by reference of the ASTM     
  standards.                                                            

[FR Doc. 96-30134 Filed 12-2-96; 8:45 am]
BILLING CODE 4310-05-M