[Federal Register Volume 62, Number 21 (Friday, January 31, 1997)]
[Proposed Rules]
[Pages 4836-4863]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2184]



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Part II





Department of the Interior





_______________________________________________________________________



Office of Surface Mining Reclamation and Enforcement



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30 CFR Part 740, et al.



Underground Mining Activities: Valid Existing Rights and Section 522(e) 
Prohibitions; Proposed Rules

  Federal Register / Vol. 62, No. 21 / Friday, January 31, 1997 / 
Proposed Rules  

[[Page 4836]]



DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 740, 745, 761, and 772

RIN 1029-AB42


Valid Existing Rights

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) 
is proposing to amend its regulations to redefine the circumstances 
under which a person has valid existing rights (VER) to conduct surface 
coal mining operations in areas where these operations are otherwise 
prohibited by section 522(e) of the Surface Mining Control and 
Reclamation Act of 1977 (SMCRA or ``the Act''). OSM also is proposing 
to establish requirements and procedures and define responsibilities 
for the submission and processing of requests for VER determinations, 
modify and clarify the applicability of the existing operation 
exemption, remove the requirement that requests for compatibility 
determinations for surface coal mining operations on national forest 
lands be accompanied by a permit application, and, with certain 
exceptions, require a VER determination as a prerequisite for approval 
of coal exploration activities that may result in substantial 
disturbance of the lands listed in section 522(e) of SMCRA. The 
proposed rule also contains numerous editorial revisions and 
organizational changes intended to improve overall consistency and 
clarity. If the proposed rule becomes final, it would result in removal 
of all existing suspensions of the affected regulations.

DATES: Electronic or written comments: OSM will accept electronic or 
written comments on the proposed rule until 5:00 p.m. Eastern time on 
June 2, 1997.
    Public hearings: Anyone wishing to testify at a public hearing must 
submit a request on or before 5:00 p.m. Eastern time on March 17, 1997. 
Because OSM will hold a public hearing at a particular location only if 
there is sufficient interest, hearing arrangements, dates and times, if 
any, will be announced in a subsequent Federal Register notice. Any 
disabled individual who needs special accommodation to attend a public 
hearing should contact the person listed under FOR FURTHER INFORMATION 
CONTACT.

ADDRESSES: Electronic or written comments: Submit electronic comments 
to [email protected]. Mail written comments to the Administrative 
Record, Office of Surface Mining Reclamation and Enforcement, 1951 
Constitution Avenue, N.W., Washington, DC 20240 or hand-deliver to the 
person listed under FOR FURTHER INFORMATION CONTACT.
    Public hearings: If there is sufficient interest, hearings may be 
held in Billings, MT; Denver, CO; Lexington, KY; Washington, DC; and 
Washington, PA. To request a hearing, contact the person listed under 
FOR FURTHER INFORMATION CONTACT by the time specified under DATES using 
any of the methods listed for ``Electronic or written comments''.

FOR FURTHER INFORMATION CONTACT: Dennis Rice, Rules and Legislation, 
Office of Surface Mining Reclamation and Enforcement, Room 115, South 
Interior Building, 1951 Constitution Avenue, N.W., Washington, DC 
20240. Telephone: (202) 208-2829. E-mail address: [email protected]. 
Additional information concerning OSM, this rule, and related documents 
may be found on OSM's home page at http://www.osmre.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Comment Procedures.
II. General Background on Proposed Rule.
III. Discussion of Proposed Rule.
    A. Sections 740.4, 740.11 and 745.13: VER Determinations for 
Lands Protected by Paragraphs (e)(1) and (e)(2) of Section 522 of 
SMCRA.
    1. Who is Responsible for VER Determinations for Non-Federal 
Lands Within Section 522(e)(1) Areas?
    2. Which VER Definition Applies to Lands Listed in Paragraphs 
(e)(1) and (e)(2) of Section 522?
    3. What Other Changes are Proposed?
    B. Sections 740.10 and 745.10: Information Collection.
    C. Section 761.5: Definition of Valid Existing Rights.
    1. Statutory and Regulatory History.
    2. Basic Definition.
    3. Property Rights Demonstration.
    4. Good Faith/All Permits Standard.
    5. Needed for and Adjacent Standard.
    6. VER for Access and Haul Roads.
    7. Transferability of VER.
    8. Continually Created VER: VER When Prohibitions Come into 
Effect After August 3, 1977.
D. Section 761.5: Definition of ``Surface Coal Mining Operations 
Which Exist on the Date of Enactment''.
E. Section 761.11: Areas Where Surface Coal Mining Operations are 
Prohibited or Limited.
    1. Existing Operation Exemption.
    2. Removal of Paragraph (h).
F. Section 761.12: Coordination with Permitting Process; Waiver 
Requirements and Procedures.
G. Section 761.13: Submission and Processing Requirements for 
Requests for VER Determinations.
    1. Paragraph (a): Which agency will process a request for a VER 
determination?
    2. Paragraph (b): What information must a request for a VER 
determination include?
    3. Paragraph (c): How may the public participate in the VER 
determination process?
    4. Paragraph (e): How may a determination be appealed?
H. Section 772.12: Requirements for Coal Exploration on Lands 
Unsuitable for Surface Coal Mining.
I. Effect in Federal Program States and on Indian Lands.
J. Effect on State Programs.
IV. Procedural Matters

I. Public Comment Procedures

Electric or Written Comments

    Comments should be specific and confined to issues pertinent to the 
proposed rule. They also should include explanations in support of the 
commenter's recommendations. OSM appreciates any and all comments, but 
those most useful and likely to influence decisions on the content of a 
final rule will be those that either involve personal experience or 
include citations to and analyses of the Act, its legislative history, 
its implementing regulations, case law, other pertinent State or 
Federal laws or regulations, technical literature, or other relevant 
publications.
    Except for comments provided in an electronic format, commenters 
should submit two copies of their comments whenever practicable. 
Comments received after the time indicated under DATES or at locations 
other than the OSM office listed under ADDRESSES will not necessarily 
be considered in the final decision or included in the administrative 
record.

Public Hearing

    Persons wishing to testify at a public hearing must contact the 
person listed under FOR FURTHER INFORMATION CONTACT by the time 
indicated under DATES. If no one requests an opportunity to comment at 
a public hearing, no hearing will be held.
    If a public hearing is held, it will continue until all persons 
scheduled to speak have been heard. Persons in the audience who were 
not scheduled to speak but who wish to do so will be heard following 
the scheduled speakers. The hearing will end after all scheduled 
speakers and any other persons present who wish to speak have been 
heard.

[[Page 4837]]

    Filing of a written statement at the time of the hearing will 
assist the transcriber and facilitate preparation of an accurate 
record. Submission of electronic or written statements to OSM in 
advance of the hearing will allow OSM officials to prepare adequate 
responses and appropriate questions.

Public Meeting

    If there is only limited interest in a hearing at a particular 
location, a public meeting, rather than a public hearing, may be held. 
Persons wishing to meet with OSM representatives to discuss the 
proposed rule may request a meeting by contacting the person listed 
under FOR FURTHER INFORMATION CONTACT. All meetings will be open to the 
public and, if possible, notice of the meetings will be posted at the 
appropriate locations listed under ADDRESSES. A written summary of each 
public meeting will be made a part of the administrative record of this 
rulemaking.

II. General Background on Proposed Rule

    Section 522(e) of SMCRA provides that, subject to VER, there shall 
be no surface coal mining operations on certain lands after the date of 
enactment (August 3, 1977). The Act exempts operations in existence on 
that date. Section 522(e)(1) protects all lands within the boundaries 
of units of the National Park System; the National Wildlife Refuge 
System; the National System of Trails; the National Wilderness 
Preservation System; the Wild and Scenic Rivers System, including study 
rivers designated under section 5(a) of the Wild and Scenic Rivers Act; 
and National Recreation Areas designated by Act of Congress. Section 
522(e)(2) protects Federal lands within the boundaries of any national 
forest, although it provides a mechanism and criteria for approving (a) 
surface operations and impacts incident to an underground mine on any 
type of national forest land, and (b) any type of surface operations on 
lands that lack significant forest cover and are located west of the 
100th meridian. Section 522(e)(3) prohibits operations that would 
adversely impact publicly owned parks and properties listed on the 
National Register of Historic Places; however, it permits operations 
that receive joint approval from the regulatory authority and the 
agency with jurisdiction over the park or place. Except for mine access 
and haul roads, section 522(e)(4) prohibits operations within 100 feet 
of the outside right-of-way line of any public road, but it provides a 
mechanism and criteria for approval of exceptions from this 
prohibition. Section 522(e)(5) prohibits operations within 100 feet of 
a cemetery or within 300 feet of a public building, school, church, 
community or institutional building, or public park. This paragraph 
also prohibits operations within 300 feet of an occupied dwelling, but 
it allows the owner of the dwelling to waive the prohibition.
    SMCRA does not define or explain the VER exemption. As discussed in 
greater detail in other sections of this preamble, OSM previously 
defined or attempted to define VER by regulation in 1979, 1983, 1988, 
and 1991. None of these efforts was fully successful. Judicial review 
of the 1979 and 1983 definitions and related rules resulted in the 
remand of several provisions, including most of the 1983 definition of 
VER. In 1988, OSM proposed a new definition, which it withdrew in 1989 
for further study.
    On July 18, 1991 (56 FR 33152-65), OSM again proposed to revise the 
definition of VER and related rules. The comment period for this 
proposal originally closed September 16, 1991, but, by notice dated 
September 12, 1991 (56 FR 46396), OSM extended the deadline until 
October 16, 1991. In addition, in response to requests from interested 
persons, OSM scheduled and held two public hearings on the proposed 
rule, one in Knoxville, Tennessee, which attracted 27 speakers, and 
another in Morgantown, West Virginia, at which 3 individuals offered 
testimony.
    The overwhelmingly majority of the approximately 750 comments 
received did not directly discuss either the proposed rule language or 
the specific issues upon which OSM had requested comment. Instead, the 
commenters opposed the proposed rule in principle because they believed 
that it would lead to increased mining in national parks and wildlife 
refuges and irreparable or uncompensated damage to dwellings, 
cemeteries, churches, and other structures. Copies of all comments 
received and transcripts of the public hearings are on file as part of 
the administrative record of the 1991 rulemaking effort.
    Before OSM completed development of a final rule, the President 
signed the Energy Policy Act of 1992 (EPAct), Public Law 102-486, 206 
Stat. 2776, into law on October 24, 1992. Section 2504(b) of that 
statute effectively placed a one-year moratorium on adoption of a new 
or revised VER definition.
    At the Department's request, Congress included a revised version of 
this moratorium in the appropriations acts for fiscal years 1994 and 
1995 for the Department of the Interior and related agencies. 
Specifically, the Fiscal Year 1995 Appropriations Act (Pub. L. 103-332) 
contained a provision that effectively prohibited the Department from 
publishing a final Federal VER definition or disapproving existing 
State definitions of VER until October 1, 1995. However, Congress did 
not include the moratorium language in the fiscal year 1996 
appropriations legislation or continuing resolutions.
    After evaluating the comments received and taking intervening 
events into consideration, OSM has decided to withdraw the 1991 
proposal and publish a new, extensively revised proposed rule 
concerning the definition of VER and related issues. The new proposed 
rule is based upon, but not identical to, the 1991 proposal. Except as 
discussed below, all substantive comments received in response to the 
1991 proposed rule have been considered in developing the rule being 
proposed today. However, because OSM has decided to withdraw the 1991 
proposal in favor of the rule being proposed today, the preamble does 
not necessarily discuss the disposition of all comments. Persons who 
believe that the new proposal does not adequately address their 1991 
concerns must submit new comments or resubmit relevant portions of 
earlier comments to insure consideration of those concerns during 
development of the final rule.
    Some commenters expressed opposition to OSM's position that the 
prohibitions and limitations of section 522(e) of SMCRA do not apply to 
subsidence or other adverse surface impacts resulting from underground 
mining activities conducted beneath or adjacent to protected lands. OSM 
announced this policy in a separate Federal Register document (56 FR 
33170-71) published on July 18, 1991, in tandem with the proposed rule 
concerning VER. However, on September 21, 1993, in National Wildlife 
Fed'n v. Babbitt, 835 F. Supp. 654 (D.D.C. 1993), the court vacated the 
policy set forth in the notice and remanded the issue to the Secretary 
for rulemaking in accordance with the notice and comment procedures of 
the Administrative Procedure Act (5 U.S.C. 553). OSM is addressing this 
issue in a separate rulemaking, which is also being published in 
proposed form in today's Federal Register.

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III. Discussion of Proposed Rule

A. Sections 740.4, 740.11 and 745.13: VER Determinations for Lands 
Protected by Paragraphs (e)(1) and (e)(2) of Section 522 of SMCRA

1. Who Is Responsible for VER Determinations for Non-Federal Lands 
Within Section 522(e)(1) Areas?
    While SMCRA does not directly address responsibilities for VER 
determinations, section 503(a) speaks of States having exclusive 
jurisdiction over the regulation of surface coal mining and reclamation 
operations on non-Federal lands. In accordance with this principle, 
former 30 CFR 761.4, as promulgated on March 13, 1979 (44 FR 15341), 
assigned the responsibility for VER determinations to the regulatory 
authority, with the Secretary retaining responsibility for VER 
determinations involving Federal lands.
    On February 16, 1983 (48 FR 6935), OSM revised the Federal lands 
regulations at 30 CFR 740.4 by adding paragraph (a)(4). This paragraph 
narrowed the Secretary's responsibility for VER determinations by 
restricting it to proposed surface coal mining operations that would be 
located on Federal lands within the boundaries of any areas listed in 
paragraph (e)(1) or (e)(2) of section 522 of the Act. In the same 
rulemaking, OSM revised 30 CFR 745.13 by adding paragraph (o). This 
paragraph specifies that the Secretary may not delegate the 
responsibility for making VER determinations on Federal lands within 
any areas listed in paragraph (e)(1) or (e)(2) of section 522 to the 
State in a cooperative agreement for the regulation of mining on 
Federal lands. The preamble to that rulemaking explains that exclusive 
authority for VER determinations involving those lands is an integral 
component of the Secretary's commitment to protect the areas listed in 
paragraphs (e)(1) and (e)(2) of section 522 in accordance with 
congressional direction and to prevent mining on Federal lands within 
the National Park System (48 FR 6917, col. 2, February 16, 1983).
    On September 14, 1983 (48 FR 41312), OSM removed 30 CFR 761.4 
because it was no longer needed in view of the provisions added to 30 
CFR 740.4 and 745.13 on February 16, 1983. Citizen and environmental 
groups filed a challenge to the removal; they also used this occasion 
as an opportunity to argue that SMCRA requires that the Secretary make 
VER determinations in all cases involving lands within the boundaries 
of section 522(e)(1) areas, regardless of ownership. The court rejected 
the plaintiffs' arguments, noting that section 503(a) of the Act 
``permits States to assume exclusive jurisdiction over the regulation 
of surface coal mining and reclamation operations on non-Federal 
lands.'' In re Permanent Surface Mining Regulation Litigation II, Round 
III--Valid Existing Rights, 22 ERC 1557, 1566 (D.D.C. 1985) (``PSMRL 
II, Round III--VER''). The court also noted that nothing in section 
523(c) of the Act, which prohibits the Secretary from delegating to the 
States his authority to designate Federal lands as unsuitable for 
mining under section 522 of the Act, ``persuades the court to the 
contrary.'' Ibid.
    However, in oral arguments defending against the challenge, counsel 
for the Government stated that:

    [I]n those situations where surface mining on private inholdings 
will affect federal lands, that kicks in the Federal Lands Program, 
and under the Federal Lands Program, the Secretary makes the VER 
determination, so there may be circumstances where you have a 
private inholding within the protected area, in which the Secretary 
would make the VER determination, but he can't in the abstract know 
when he's going to be required to make that determination, until he 
knows what land is going to be mined, and what potential impact that 
might have on federal lands.

    Transcript of Oral Argument, Dec. 21, 1984, at 46; quoted in PSMRL 
II, Round III--VER, 22 ERC at 1566.
    The court did not address the validity or interpretation of this 
argument, which, taken at face value, would extend the reach of the 
Federal lands program to lands in which there is no element of Federal 
ownership.
    On November 20, 1986 (51 FR 41952-62), OSM published a final rule 
document that suspended a number of regulations. Among other things, 
that document, which is known as the 1986 suspension notice, partially 
suspended the VER definition promulgated on September 14, 1983. In the 
preamble discussion of the impact of the suspension of the VER 
definition on the Federal lands program, OSM announced that the 
Secretary would make VER determinations for non-Federal lands within 
the boundaries of the areas listed in section 522(e)(1) whenever 
surface coal mining operations on those lands would affect the Federal 
interest (51 FR 41955). This policy is known as the ``affected by'' 
standard. However, the notice did not suspend or modify 30 CFR 
740.4(a)(4), which provides only that the Secretary is responsible for 
VER determinations for Federal lands, or any other rule to reflect this 
policy.
    In 1991, OSM requested comment on whether the policy set forth in 
the 1986 suspension notice (the ``affected by'' standard) should be 
codified. Based on the comments received and further review of the 
background of this issue, the agency is reconsidering the 1986 policy. 
OSM is now seeking comment on four alternatives with respect to 
responsibility for VER determinations for non-Federal lands within the 
areas protected by section 522(e)(1):
    (1) Reaffirming existing 30 CFR 740.4(a)(4), which would mean that 
OSM would be responsible for making all VER determinations for Federal 
lands in section 522(e)(1) areas and that the regulatory authority 
(either OSM or the State) would be responsible for making all 
determinations for non-Federal lands;
    (2) Reaffirming existing 30 CFR 740.4(a)(4) and revising 30 CFR 
Part 761 to provide that the regulatory authority (either OSM or the 
State) must obtain the concurrence of the pertinent land management 
agency before finding that a person has VER for any lands within the 
boundaries of the areas listed in 30 CFR 761.11(a)(1) and section 
522(e)(1) of the Act;
    (3) Codifying the ``affected by'' standard, the policy set forth in 
the 1986 suspension notice; or
    (4) In a variation on the affected by standard, requiring that OSM 
make all VER determinations for both Federal and non-Federal lands 
within the boundaries of the areas designated in 30 CFR 761.11(a)(1) 
and section 522(e)(1) of the Act.
    For the reasons discussed below, OSM has selected the first 
alternative as the preferred alternative. Therefore, although OSM 
retains the option of adopting any of the alternatives, the rule text 
being proposed today reflects the first alternative, which would assign 
responsibility for making VER determinations for all non-Federal lands 
to the regulatory authority. If OSM ultimately adopts an alternative 
other than the preferred alternative, the text of the final rules will 
be revised in a manner consistent with the alternative selected. As 
discussed in finding G of this preamble, OSM also is proposing to 
revise 30 CFR Part 761 to clearly delineate agency responsibilities for 
VER determinations for both Federal and non-Federal lands. See proposed 
30 CFR 761.13(a).
    Adoption of the first alternative would be consistent with the 
congressionally mandated doctrine of State primacy as expressed in 
sections 101(f) and 503(a) of SMCRA. In particular, section 503(a) 
provides for exclusive State jurisdiction over the regulation of 
surface coal mining and reclamation operations on non-Federal lands, 
except as specified in sections

[[Page 4839]]

521 (Federal oversight) and 523 (Federal lands) and Title IV of the Act 
(abandoned mine land reclamation). The first alternative would also 
complement OSM's policy of a shared commitment with the States to 
achieve the goals of SMCRA. This policy promotes mutual trust and a 
spirit of cooperation between OSM and the States and maximizes the 
States' role in environmental protection and the regulation of surface 
coal mining and reclamation operations within their borders. Subchapter 
C of 30 CFR Chapter VII provides that State regulatory programs must be 
no less stringent than the Act and no less effective than the 
Secretary's regulations in meeting the requirements of the Act. Hence, 
there should be no difference in the degree of environmental protection 
regardless of whether OSM or the State makes the VER determination.
    The second alternative is identical to the first in that the 
regulatory authority would be responsible for making VER determinations 
for all non-Federal lands, including those within the boundaries of 
section 522(e)(1) areas. However, under the second alternative, if the 
proposed operation would be located on land within the boundaries of an 
area listed in section 522(e)(1), the agency statutorily responsible 
for management of the protected lands would have to concur with the 
regulatory authority's determination before the determination could 
take effect. If adopted, this provision would be added to the 
decisionmaking requirements of proposed 30 CFR 761.13(d). This 
alternative would largely preserve the State's lead role in the 
regulatory process in keeping with the dictates of sections 101(f) and 
503(a) of SMCRA while providing additional assurance that the lands 
designated in section 522(e)(1) receive the level of protection that 
Congress intended; i.e., minimization of surface coal mining operations 
on lands that Congress designated as unsuitable for surface coal mining 
operations. It is somewhat analogous to 30 CFR 816.116(b)(3)(i) and 
817.116(b)(3)(i), which require that the regulatory authority obtain 
the concurrence of State agencies responsible for the administration of 
forestry and wildlife programs when approving revegetation success 
standards for operations with a postmining land use involving woody 
plants. Although SMCRA did not require adoption of that provision (just 
as SMCRA does not require the concurrence of the land management agency 
for VER determinations involving section 522(e)(1) areas), OSM 
nevertheless deemed it appropriate to promote attainment of SMCRA's 
environmental protection and land reclamation goals.
    The chief argument in favor of the third alternative (codification 
of the affected by standard) is that the Federal interest in lands 
included within the boundaries of section 522(e)(1) areas (national 
parks, wildlife refuges, wild and scenic rivers, wilderness areas, 
etc.) is not necessarily limited to lands included in the definition of 
Federal lands in section 701(4) of the Act. Activities on private 
inholdings may, in fact, affect Federal lands. The boundaries of 
section 522(e)(1) areas are established by Congress or the President in 
recognition of the national significance of these areas and the 
uniquely high natural, historical, or cultural values associated with 
the lands included therein. Surface coal mining operations on non-
Federal lands within the boundaries of section 522(e)(1) areas could 
affect the Federal interest by adversely impacting the values for which 
the lands were designated, at least on a short-term basis.
    Adoption of the third alternative would afford the Federal 
government (the Secretary) a decisionmaking role in VER determinations 
for operations on lands in which there is any type of Federal interest, 
even if the Federal government has no property interest in the lands in 
question. Historically, proponents of this alternative have argued that 
reserving this authority to the Secretary would ensure national 
consistency and may result in more favorable consideration of arguments 
advanced by the Federal land management agency with jurisdiction over 
the protected site. Implementation of this alternative would require 
delineation of the responsibilities of the various State and Federal 
agencies involved (including which agency has authority to make the 
affected by determination) and establishment of procedures to 
coordinate interagency processing of requests for VER determinations.
    The fourth alternative, under which OSM would be responsible for 
making all VER determinations for all lands within the boundaries of 
section 522(e)(1) areas, is a variation on the affected by standard. 
This alternative relies upon the argument that because Congress or the 
President established the boundaries of those areas, all lands within 
their boundaries must possess values of national significance or 
interest. Therefore, surface coal mining operations on any lands within 
the boundaries of those areas would automatically affect the Federal 
interest in some way. Also, in many cases, non-Federal lands are 
intertwined with Federal lands in such a fashion that activities on the 
non-Federal lands would have an impact on the Federal lands in terms of 
noise, dust, and other environmental factors.
    The affected by standard represents current OSM policy. Although 
the 1986 suspension notice does not explain the basis or origin of the 
policy, it appears that the policy arises from the Government's oral 
argument in PSMRL II, Round III-VER, as quoted in the decision. This 
argument apparently derives from and expands upon language in the 
court's earlier decision in In re Permanent Surface Mining Regulation 
II, Round I, No. 79-1144 (D.D.C. July 6, 1984), slip op. at 11-15 
(hereinafter ``PSMRL II, Round I''). In that decision, the court noted 
that the definition of ``surface coal mining operations'' in section 
701(28) of the Act includes a broad ``affected by'' test and that under 
section 523(a) of SMCRA and the definition of ``Federal lands program'' 
in section 701(5), all surface coal mining and reclamation operations 
on Federal lands are subject to the Federal lands program.
    Because the scope of the decision in PSMRL II, Round I was limited 
to Federal lands, and because the court in PSMRL II, Round III-VER did 
not review the merits of the position suggested in oral argument by 
Government counsel, neither decision compels adoption of an affected by 
standard.
    Also, in PSMRL II, Round I, the court struck down 30 CFR 
740.11(a)(3) (1983) only to the extent that that rule did not apply the 
Federal lands program to all Federal lands. Specifically, the court 
held that, with respect to the jurisdiction of the Federal lands 
program, the Secretary is ``powerless to limit'' the statutory 
definition of ``surface coal mining operations'' in section 701(28) and 
that, ``if surface mining activities take place on Federal lands, the 
Secretary is powerless to exclude them from the Federal lands 
program.'' Id. at 14-15. The court rejected the Secretary's argument, 
as stated in the preamble to the 1983 rulemaking, that

because of the interaction of the State primacy provision, section 
503 of the Act, with section 523 of the Act, the Federal lands 
program can be interpreted to exclude State or privately-owned 
surface overlying Federally-owned coal where the operation will not 
involve mining the Federally-owned coal and where there will be no 
disturbance of the Federally-owned estate.

48 FR 6921, February 16, 1983.


[[Page 4840]]


    Nothing in this decision would compel extension of the Federal 
lands program to lands in which there is no Federal property interest, 
i.e., lands in which both the surface and mineral estates are entirely 
in non-Federal ownership. There is no indication that the court 
contemplated using the affected by test in section 701(28) to extend 
the Federal lands program to lands in which there is no Federal 
property interest. The court noted that ``[w]hen Congress discussed 
state administration of the Act, it virtually always referred to non-
federal lands.'' Id. at 14.
    Furthermore, when OSM repromulgated 30 CFR 740.11(a) in 1990 to 
address the judicial remand, the agency rejected a commenter's argument 
that the court had explicitly endorsed an affected by test to determine 
the jurisdiction of the Federal lands program. In declining to adopt an 
affected by standard, OSM stated that:

    An ``affected by'' test would be very difficult to administer. A 
determination that the Federal interest would or would not be 
affected would have to be made on a case-by-case basis, and could be 
subject to different interpretations.

55 FR 94001, March 13, 1990.

    In summary, SMCRA does not appear to require adoption of an 
affected by standard. Therefore, OSM's preferred alternative is to 
return to the pre-1986 approach, which, in accordance with the language 
of section 503(a) of the Act, provided the regulatory authority with 
exclusive jurisdiction to make VER determinations for all non-Federal 
lands.
    Regardless of which alternative is adopted, the Secretary would 
retain exclusive authority for making VER determinations for Federal 
lands within the boundaries of the areas listed in 30 CFR 761.11(a)(1) 
and section 522(e)(1) of the Act and for Federal lands (but not private 
inholdings) within the boundaries of any national forest. None of the 
alternatives would affect the memorandum of understanding between OSM 
and the U.S. Department of Agriculture, Forest Service, which details 
the procedures applicable to the processing of requests for VER 
determinations involving lands for which the Forest Service owns the 
surface estate. Each primacy State (State with a regulatory program 
approved under section 503 of SMCRA) would retain the authority to make 
VER determinations for non-Federal lands within national forest 
boundaries.
    Under the first and second alternatives, the regulatory authority 
would be responsible for making VER determinations for all non-Federal 
lands, including those within the boundaries of section 522(e)(1) 
areas. The second alternative includes an additional requirement that 
the regulatory authority obtain the concurrence of the agency with 
management jurisdiction over the area if the land is located in an area 
listed in section 522(e)(1). The third alternative would extend the 
Secretary's responsibility to include VER determinations for non-
Federal lands within section 522(e)(1) areas whenever surface coal 
mining operations on those lands would affect the Federal interest. 
And, under the fourth alternative, the Secretary would be responsible 
for making VER determinations for all non-Federal lands within the 
boundaries of section 522(e)(1) areas.
    None of the alternatives would affect responsibilities for VER 
determinations for other types of Federal or non-Federal lands. Except 
as provided in the second, third, and fourth alternatives, the 
regulatory authority would retain sole responsibility for VER 
determinations for non-Federal lands. In primacy States without a 
Federal lands cooperative agreement pursuant to 30 CFR Part 745, the 
Secretary would remain responsible for making VER determinations for 
Federal lands under paragraphs (3), (4), and (5) of section 522(e) of 
the Act. In primacy States with a Federal lands cooperative agreement, 
the State regulatory authority would remain responsible for making VER 
determinations pursuant to paragraphs (3), (4), and (5) of section 
522(e) for Federal lands not listed in paragraph (1) or (2) of section 
522(e).
2. Which VER Definition Applies to Lands Listed in Paragraphs (e)(1) 
and (e)(2) of Section 522?
    Under section 503(a) of SMCRA, States with regulatory programs 
approved by the Secretary have exclusive jurisdiction (except as 
otherwise provided in sections 521 and 523 of the Act) over all surface 
coal mining and reclamation operations located or proposed to be 
located on non-Federal, non-Indian lands within the State's borders. 
Section 523(c) further provides that a State may enter into a 
cooperative agreement with the Secretary under which the State also 
would assume responsibility for the regulation of mining on Federal 
lands within its borders.
    The Federal lands rules at 30 CFR 740.11(a) currently specify that, 
upon approval of a State regulatory program pursuant to 30 CFR Part 732 
or promulgation of a Federal program for a State under 30 CFR Part 736, 
that program will apply to all surface coal mining and reclamation 
operations on any Federal lands within the State except Indian lands. 
Therefore, under the current rules, the Secretary must apply the State 
program definition of VER when making VER determinations for Federal 
lands in primacy States.
    However, on November 20, 1986, at 51 FR 41952-62, OSM published a 
document that, among other things, partially suspended the VER 
definition promulgated on September 14, 1983. Although the document did 
not suspend any provision of 30 CFR Part 740, the portion of the 
preamble that discusses the impact of the suspension of the VER 
definition on the Federal lands program slightly modifies the general 
principle that, consistent with 30 CFR 740.11(a) as discussed in the 
preceding paragraph, OSM must use the VER definition set forth in the 
applicable State or Federal regulatory program when making VER 
determinations for Federal lands. Specifically, the preamble states at 
51 FR 41955 that when a state definition relies upon an all-permits 
standard, OSM will apply the State standard as if it includes a good 
faith component. In addition, the preamble provides that, pending 
promulgation of a new Federal definition of VER, OSM will not process 
requests for VER determinations involving lands within the boundaries 
of units of the National Park System if the approved State program 
definition of VER includes a takings standard. (See Part III.C. of this 
preamble for an explanation of the all-permits, good faith/all permits, 
and takings standards for VER.) At present, the deferral policy affects 
only units of the National Park System within Illinois and West 
Virginia. OSM adopted this policy as a result of concerns expressed by 
the National Park Service.
    OSM is now proposing to revise 30 CFR 740.11 (a) and (g) to specify 
that the Federal definition of VER will apply whenever a VER 
determination involves lands listed in paragraph (e)(1) or (e)(2) of 
section 522 of SMCRA, regardless of whether OSM or the State is 
responsible for making the determination. Application of the Federal 
definition will ensure that requests for VER determinations involving 
lands of national interest and importance are evaluated on the basis of 
the same criteria.
    In primacy States without a Federal lands cooperative agreement 
pursuant to 30 CFR Part 745, the Secretary would continue to use the 
approved State program definition of VER when making VER determinations 
for all other types of Federal lands under paragraphs (3), (4), and (5) 
of section 522(e) of the Act.

[[Page 4841]]

Similarly, in States with a Federal lands cooperative agreement, the 
State regulatory authority would continue to use the State program 
definition of VER when making VER determinations pursuant to paragraphs 
(3), (4), and (5) of section 522(e) for Federal lands not listed in 
paragraph (1) or (2) of section 522(e) of the Act.
3. What Other Changes Are Proposed?
    OSM is proposing to revise 30 CFR 740.4(a)(5) and 30 CFR 745.13(p) 
to incorporate references to the provisions of 30 CFR Part 761 that 
correspond to section 522(e) of SMCRA. In addition, to conform with the 
language of section 522(e) of the Act, which refers only to surface 
coal mining operations, OSM is proposing to replace the term ``surface 
coal mining and reclamation operations'' in 30 CFR 740.4(a)(4) and 
745.13(o) with ``surface coal mining operations.'' This change will 
also ensure consistency with the policy set forth in the preamble to a 
final rule published on April 5, 1989 (54 FR 13814), which specifies 
that SMCRA does not require a permit or other regulatory authority 
approval as a prerequisite for conducting reclamation work alone. In 
other words, the latter change clarifies that the prohibitions and 
restrictions of 30 CFR 761.11(a) and section 522(e) do not apply to 
reclamation activities such as the restoration of abandoned mine lands 
or bond forfeiture sites.

B. Sections 740.10 and 745.10: Information Collection

    The proposed rule changes discussed in III.A. will not alter the 
information collection burden associated with Parts 740 and 745. 
However, OSM is proposing certain editorial revisions to Secs. 740.10 
and 745.10 to maintain consistency with Departmental guidance 
concerning the format and content of these sections.

C. Section 761.5: Definition of Valid Existing Rights

1. Statutory and Regulatory History
    As discussed in the portion of this preamble entitled ``General 
Background on Proposed Rule,'' section 522(e) of SMCRA (30 U.S.C. 
1272(e)) prohibits surface coal mining operations on certain lands in 
the absence of a waiver or compatibility finding unless a person has 
VER to conduct such operations or unless the operation was in existence 
on the date of enactment (August 3, 1977). SMCRA does not define or 
explain VER, and the legislative history of both section 522(e) in 
general and the phrase ``subject to valid existing rights'' in 
particular is sparse.
    The committee report on H.R. 2, the House version of the 
legislation that ultimately became SMCRA, contains the following 
discussion:

    The language ``subject to valid existing rights'' in section 
522(e) is intended, however, to make clear that the prohibition of 
strip mining on the national forests is subject to previous court 
interpretations of valid existing rights. For example, in West 
Virginia's Monongahela National Forest, strip mining of privately 
owned coal underlying federally owned surface has been prohibited as 
a result of United States v. Polino, 133 F. Supp. 772 (1955). In 
this case the court held that ``stripping was not authorized by 
mineral reservation in a deed executed before the practice was 
adopted in the county where the land lies, unless the contract 
expressly grants stripping rights by use of direct or clearly 
equivalent words. The party claiming such rights must show usage or 
custom at the time and place where the contract is to be executed 
and must show that such rights were contemplated by the parties.'' 
The phrase ``subject to valid existing rights'' is thus in no way 
intended to open up national forest lands to strip mining where 
previous legal precedents have prohibited stripping.

H.R. Rep. No. 218, 95th Cong., 1st Sess. 95 (1977).

    The committee report on S. 7, the Senate version of the legislation 
that ultimately became SMCRA, contains a similar discussion, including 
the statement that:

    The language of 422(e) [now 522(e)] is in no way intended to 
affect or abrogate any previous State court decisions. * * * The 
phrase ``subject to valid existing rights'' is thus in no way 
intended to open up national forest lands to strip mining where 
previous legal precedents have prohibited stripping.

S. Rep. No. 218, 95th Cong., 1st Sess. 94-95 (1977).

    Thus, the committee reports accompanying the versions of SMCRA 
passed by each chamber of Congress emphasize that the VER exemption is 
intended to maintain existing State prohibitions on surface coal mining 
operations. The reports do not discuss whether or how Congress intended 
VER to apply as a means of authorizing operations that SMCRA would 
otherwise prohibit. In other words, the reports emphasize that nothing 
in SMCRA was intended to create new property rights or mining authority 
for surface coal mining operations.
    The conference committee report does not address this issue. See 
H.R. Conf. Rep. No. 493, 95th Cong., 1st Sess. 110-11 (1977).
    On several occasions, a colloquy between Congressmen Udall and 
Roncalio during floor debate on H.R. 2, the House bill that eventually 
became SMCRA, has been interpreted to mean that one purpose of the VER 
provision in SMCRA may be to avoid the compensable takings that could 
otherwise result from the application of the prohibitions of section 
522(e). Congressman Roncalio proposed an amendment to delete the 
sentence in section 601(d) that reads, ``[v]alid existing rights shall 
be preserved and not affected by such designation.'' (Section 601 
provides for the designation of Federal lands as unsuitable for noncoal 
mining.) Congressman Udall, who is generally recognized as the chief 
architect of SMCRA, opposed the amendment ``because it takes from the 
bill a statement that valid legal rights should be preserved. I do not 
think we should do that without paying compensation under the fifth 
amendment.'' 123 Cong. Rec. 12,878 (1977). The House rejected the 
amendment and retained the language at issue.
    However, nothing in this colloquy provides any guidance on how 
Congress intended VER under section 522(e) to be defined. Because 
section 601 addresses only noncoal mining operations on Federal lands, 
Congressman Udall's statement and the sentence in question in section 
601(d) probably refer to VER as that term is defined under the General 
Mining Law of 1872 and similar Federal laws involving the public 
domain. In such statutes, the term VER typically refers to the set of 
circumstances under which persons who have unvested interests or 
expectations in Federal lands or minerals will be allowed to vest those 
interests or expectations as property rights when the United States is 
the fee owner. In general, the VER provisions of those statutes apply 
to cases in which the Federal government changes the eligibility 
criteria or other requirements for vesting of property rights. In such 
cases, the term VER refers to circumstances in which a person who has 
taken some action to vest a property right in Federal lands or minerals 
has the right to complete the process regardless of any statutory or 
regulatory changes to the contrary. This type of VER is not analogous 
to VER for surface coal mining operations under section 522(e) of 
SMCRA, which applies to both private and Federal lands and does not 
involve a transfer of a property right from the Federal government to 
another party. Instead, VER under section 522(e) of SMCRA concerns a 
person's right to use property for a particular purpose (conducting 
surface coal mining operations) when that person already has vested 
property rights.

[[Page 4842]]

    Although the legislative history of SMCRA is largely silent on the 
meaning of VER, the extent to which the Federal government and States 
may prohibit or restrict the exercise of private property rights 
without providing compensation is determined by case law established 
pursuant to the Fifth and Fourteenth Amendments to the U.S. 
Constitution. Accordingly, in its first rulemaking defining VER, OSM 
``endeavored to determine the point at which payment would be required 
because a taking had occurred, then to define `valid existing rights' 
in those terms, i.e., those rights which cannot be affected without 
paying compensation.'' 44 FR 14992-93, March 13, 1979.
    OSM's first regulatory definition of VER provided that, except for 
haul roads, VER included only those property rights in existence on 
August 3, 1977, the owners of which either had obtained all necessary 
permits for the proposed surface coal mining operation on or before 
August 3, 1977 (the ``all permits'' standard), or could demonstrate 
that the coal for which the exemption was sought was both needed for 
and immediately adjacent to a surface coal mining operation in 
existence on August 3, 1977 (the ``needed for and adjacent'' standard). 
44 FR 14902, 15342 (March 13, 1979).
    The mining industry, the State of Illinois, the National Wildlife 
Federation, and assorted environmental organizations all challenged the 
validity of the 1979 definition. Because the plaintiffs presented no 
evidence of specific harm, the court declined to rule on the 
constitutionality of the definition. However, the court held that a 
person who applies for all permits, but fails to receive one or more 
through government delay, engenders the same investments and 
expectations as a person who has obtained all permits. Specifically, 
the court stated that ``a good faith attempt to have obtained all 
permits before the August 3, 1977 cut-off date should suffice for 
meeting the all permits test.'' In re Permanent Surface Mining 
Regulation Litigation I, 14 ERC 1083, 1091 (D.D.C. 1980), (``PSMRL I, 
ROUND I'').
    To comply with this decision, which partially remanded the all 
permits standard, OSM suspended the definition of VER insofar as it 
required that all permits have been obtained prior to August 3, 1977 
(45 FR 51547-48, August 4, 1980). The suspension document stated that, 
pending further rulemaking, OSM would interpret the definition as 
including the court's suggestion that a good faith effort to obtain all 
permits should suffice to establish VER. This standard is known as the 
``good faith/all permits'' standard.
    The industry plaintiffs appealed those portions of the District 
Court's decision in PSMRL I, ROUND I that were adverse to their 
interests. However, the U.S. Court of Appeals for the District of 
Columbia Circuit remanded the appeal in 1981 after the government 
informed the court that it was reconsidering the 1979 definition. Thus, 
the court never reached a decision on the merits of the appeal.
    On June 10, 1982 (47 FR 25278), OSM published a proposed rule 
setting forth six options for revising the definition of VER. These 
options included the good faith/all permits standard, a mineral rights 
ownership standard, a mineral rights ownership plus right to mine by 
the method intended standard (the ``ownership and authority to mine'' 
standard), and three variations on the latter two standards. Since the 
proposed standards all attempted to establish a clearly defined 
``bright line'' test for VER, they became known as ``mechanical 
tests.''
    Commenters criticized each option as either too broad or too 
narrow, and many argued that one or more of the proposed options would 
result in a taking of property without just compensation in violation 
of the Fifth and Fourteenth Amendments to the U.S. Constitution. 
Because the Supreme Court has consistently declined to prescribe set 
formulas for determining when a taking will occur, OSM concluded that 
any mechanical test likely would be either over-inclusive or under-
inclusive of all potential takings that might result from the section 
522(e) prohibitions. Therefore, the final rule promulgated on September 
14, 1983 (48 FR 41314) included a definition of VER which provided, in 
part, that a person has VER if a prohibition on surface coal mining 
operations would result in a compensable taking of that person's 
property interests under the Fifth and Fourteenth Amendments to the 
U.S. Constitution. This standard is known as the ``takings'' standard.
    The revised definition also defined the ``needed for'' aspect of 
the needed for and adjacent standard and established the concept of 
``continually created VER'' to protect the rights of persons with 
mining operations or mineral interests in areas that come under the 
protection of section 522(e) sometime after August 3, 1977, as would 
occur, for example, when a park is created or expanded or a protected 
structure is built after that date.
    However, the U.S. District Court for the District of Columbia 
subsequently remanded most of the revised definition on procedural 
grounds. The court held that the takings standard represented such a 
significant departure from the options presented in the proposed rule 
that a new notice and comment period was necessary to comply with the 
public participation requirements of the Administrative Procedure Act 
(5 U.S.C. 553). See PSMRL II, ROUND III-VER, 22 ERC 1557, 1564. The 
court also held that the proposed rule failed to provide adequate 
notice that it would expand the needed for and adjacent standard to 
include properties acquired after the date of enactment of SMCRA 
(August 3, 1977). Accordingly, the court remanded both the takings 
standard (including that portion of the newly adopted continually 
created VER provision that relied on the takings standard) and the 
revised needed for and adjacent standard to the Secretary for proper 
notice and comment.
    In response to this order, on November 20, 1986 (51 FR 41952, 
41961), OSM suspended most of the September 14, 1983 definition of VER. 
Since the court upheld the concept of continually created VER for 
existing operations as set forth in 30 CFR 761.5(d)(1), that portion of 
the revised definition was not suspended. As discussed at 51 FR 41954-
55, in the absence of an applicable State program definition of VER, 
the suspension notice effectively reinstated the 1980 good faith/all 
permits standard and the original (1979) needed for and adjacent 
standard, while adding a continually created VER component for 
operations in existence at the time a protected feature comes into 
existence or is expanded. Except as discussed in Part III.A. of this 
preamble, the suspension notice did not impact State program 
definitions or their application by either the State or OSM.
    On December 27, 1988 (53 FR 52374), OSM proposed the good faith/all 
permits standard and the ownership and authority to mine standard as 
options for a regulatory definition of VER. Under the ownership and 
authority to mine standard, an individual could establish VER by 
demonstrating possession of both a right to the coal and the right to 
mine it by the method intended, as determined by State law. After 
evaluating the comments received, OSM withdrew the entire proposed rule 
for further study on July 21, 1989 (54 FR 30557).
    As part of that study, OSM and the University of Kentucky College 
of Law, in cooperation with the American Bar Association, cosponsored a 
national symposium on April 3-4, 1990, on the meaning of VER under 
SMCRA. Volume 5, Number 3 of the Journal of Mineral

[[Page 4843]]

Law and Policy, contains the proceedings of this symposium. The 
participants did not reach a consensus on how to define VER.
    Also in 1990, Belville Mining Company, an Ohio mining firm, filed 
suit against the Secretary of the Interior alleging that he had, among 
other things, (1) failed to perform a mandatory duty to promulgate the 
definition of VER needed to implement section 522(e); (2) in lieu of 
regulations, issued various statements and directives on VER (including 
the policy set forth in the November 20, 1986 suspension notice) 
without notice and comment in violation of the Administrative Procedure 
Act; and (3) made VER determinations relying on State regulations 
identical to an invalidated Federal regulation. Belville Mining Co. v. 
Lujan, No. C-1-89-790 (S.D. Ohio 1991) (``Belville I'').
    In a July 22, 1991, decision, the court in Belville I, (1) ordered 
the Secretary to begin proceedings to promulgate a final rule defining 
VER; (2) enjoined him from enforcing or applying the November 20, 1986 
suspension notice or any temporary directive that extends the policy of 
the suspension notice; and (3) directed him to immediately begin 
proceedings to disapprove State program definitions of VER that rely 
upon the all permits standard. On September 21, 1992, pursuant to the 
Government's motion for reconsideration, the court narrowed the latter 
portion of its ruling to require only the disapproval of the Ohio 
program definition of VER insofar as that definition affects Belville 
and its VER applications. In doing so, the court accepted the 
Government's argument that federal remedy law prohibits the imposition 
of injunctive remedies that are beyond the scope of the plaintiff's 
individual injuries and related VER applications. Consequently, OSM 
interprets the decision barring use of the 1986 policy as applying only 
to Ohio. In all other States, OSM continues to adhere to the policy set 
forth in the November 20, 1986 suspension document.
    On July 18, 1991, OSM proposed to revise the definition of VER by 
reinstating the takings standard, the good faith/all permits standard, 
and the 1979 version of the needed for and adjacent standard. In 
addition, the proposed rule eliminated the separate provisions 
concerning continually created VER for existing operations and 
incorporated the concept of continually created VER into the other 
standards for VER.
    OSM did not finalize this rule before the President signed the 
Energy Policy Act of 1992 (Pub. L. 102-486, 206 Stat. 2776) (EPAct) 
into law on October 24, 1992. Section 2504(b) of that law required 
adherence to the VER policy in the November 20, 1986 suspension notice 
(51 FR 41952) for one year after the date of enactment. That provision 
had the effect of suspending the Belville I decision in Ohio and 
halting publication of a new final rule defining VER. Although the 
EPAct provision expired on October 24, 1993, the appropriations acts 
for the Department of the Interior and related agencies for fiscal 
years 1994 and 1995 each included a moratorium on adoption of a new or 
revised Federal VER definition or disapproval of existing State program 
definitions of VER. The last moratorium (section 111 of H.R. 4602 
(1994)) expired October 1, 1995. Congress did not include similar 
language in any legislative for fiscal year 1996.
2. Basic Definition
    In many respect, the definition of VER being proposed today 
resembles the definition previously proposed on July 18, 1991. Both 
rules include a basic definition that describes VER as a set of 
circumstances under which a person may conduct surface coal mining 
operations which section 522(e) of the Act would otherwise prohibit. 
The definition also clarifies that, even if a person has VER, surface 
coal mining and reclamation operations on these lands are subject to 
all other requirements of the Act and the pertinent regulatory program. 
The VER exemption does not entitle a person to an exemption from any 
other permitting requirements or performance standards. This language 
establishes the conceptual framework within which the standards of 
paragraphs (a) and (b) of the definition must be applied.
3. Property Rights Demonstration
    Like the 1991 proposal, paragraph (a) of the definition of VER at 
30 CFR 761.5 in this proposed rule would reinstate the requirement that 
a person claiming VER for any type or aspect of surface coal mining 
operations other than roads must demonstrate that a legally binding 
conveyance, lease, deed, contract, or other document vests that person 
with the property right, as of the date that the land came under the 
protection of section 522(e) of the Act and 30 CFR 761.11, to conduct 
the type of surface coal mining operations intended. Interpretation of 
the comments relied upon to establish these rights must be based upon 
applicable State statutory or case law, or, if no applicable law 
exists, upon custom and generally accepted usage at the time and place 
that the documents came into existence.
    This provision, which originally appeared in the 1979 definition 
but was deleted in 1983 without explanation, should ensure consistency 
with section 510(b)(6)(C) of SMCRA, which provides that ``the surface-
subsurface legal relationship shall be determined in accordance with 
State law,'' and with the legislative history of the Act, which 
indicates that Congress did not intend to enlarge or diminish property 
rights under State law. See H.R. Conf. Rep. No. 493, 95th Cong. 1st 
Sess. 106 (1977); H.R. Rep. No. 218, 95th Cong. 1st Sess. 95 (1977); 
and S. Rep. No. 128, 95th Cong. 1st Sess. 94-95 (1977). The legislative 
history frequently references United States v. Polino, 131 F. Supp. 772 
N.D. W.Va. 1955), in which the court held that the right to use surface 
mining methods to recover privately owned coal underlying Federal lands 
within the Monongahela National Forest depends upon the language of the 
deed, the interpretation of which is a matter of State law.
    The property rights demonstration requirement being proposed today 
differs slightly from the 1979 rule. First, it incorporates the concept 
of continually created VER, which means that the property rights must 
be vested as of the date that the land comes under the protection of 
the Act. In some cases, this date may be later than the date of 
enactment of SMCRA (August 3, 1977), which is the date referenced in 
the 1979 rule. The proposed change recognizes that houses, churches, 
roads, parks, and other features protected by section 522(e) come into 
existence and are expanded on an ongoing basis. Because the protection 
of section 522(e) is not limited to those features in existence on the 
date of enactment, VER for lands coming under the protection of the Act 
after the date of enactment should not be limited to property rights in 
existence on the date of enactment.
    Second, the proposed rule no longer limits eligible property rights 
to the right to produce coal. Property rights (and hence VER) may exist 
for (1) surface coal mining operations such as coal preparation plants 
and coal mine waste disposal sites that do not involve coal extraction, 
and (2) non-extractive activities, facilities, and surface disturbances 
(such as support facilities, ventilation shafts, and topsoil storage 
areas) associated with coal-producing surface coal mining operations.
    As in the 1979 rule, the property rights demonstration requirement 
does not necessarily apply to roads. VER standards for roads are set 
forth in paragraph (b) of the proposed definition.

[[Page 4844]]

4. Good Faith/All Permits Standard
    In addition to the property rights demonstration, the proposed 
definition requires that a person claiming VER for surface coal mining 
operations other than roads meet either the good faith/all permits 
standard of paragraph (a)(1) or the need for and adjacent standard of 
paragraph (a)(2), which is discussed at length under a subsequent 
heading in this preamble.
    The good faith/all permits standard provides that a person has VER 
if, prior to the date the land came under the protection of 30 CFR 
761.11 and section 522(e) of the Act, that person or a predecessor in 
interest had obtained, or made a good faith effort to obtain, all State 
and Federal permits and other authorizations required to conduct 
surface coal mining operations. Potentially necessary permits and 
authorizations include, but are not limited to, State mining permits, 
National Pollutant Discharge Elimination System (NYDES) permits, U.S. 
Forest Service special use permits, air quality plan approvals, U.S. 
Mine Safety and Health Administration ground control plan approvals, 
and (for some types of facilities) building permits and zoning charges. 
Expired or lapsed permits or authorizations are not acceptable. If no 
permits were required prior to the enactment of SMCRA, none are needed 
to establish VER, provided the person obtained, or made a good faith 
attempt to obtain, all necessary authorizations to operate from all 
appropriate State and Federal agencies by the pertinent date. See the 
Greenwood Land and Mining Company and Mower Lumber Company VER 
determinations at 46 FR 36758 and 45 FR 52467, respectively.
    OSM believes that the good faith/all permits standard is the 
standard most consistent with the legislative history of section 
522(e), which indicates that Congress' purpose in enacting section 
522(e) was to prevent new surface coal mining operations in the listed 
areas, either to protect human health, safety, and general welfare or 
because the environment values and other features associated with these 
areas are generally incompatible with surface coal mining operations. 
See S. Rep. No. 128, 95th Cong. 1st Sess. 94 (1977). The two other 
principal potential standards (the takings standard and the ownership 
and authority to mine standard) would be either far more complex and 
difficult to administer (the takings standard) or much less protective 
of the areas listed in section 522(e) (the ownership and authority to 
mine standard).
    Almost all commenters from every interest group opposed the takings 
standard when OSM first formally proposed it in 1991. In particular, 
they objected to its subjective or unpredictable nature and the 
potentially onerous information collection and analytical burdens it 
would place on persons seeking a VER determination and the agency 
making the determination. The ownership and authority to mine standard 
arguably would be less complex and more objective than the takings 
standard, but it would offer no protection to section 522(e) lands 
beyond that afforded by the right-of-entry provisions of the permitting 
requirements applicable to surface coal mining and reclamation 
operations on all lands. Such a result most likely would not be in 
accordance with congressional intent in enacting the prohibitions of 
sections 522(e). See S. Rep. No. 128, 95th Cong. 1st Sess. 94 (1977).
    OSM recognizes that the U.S. Court of Appeals for the District of 
Columbia Circuit found that the legislative history of SMCRA suggests 
that ``Congress did not intend to infringe on valid property rights or 
effect takings through section 522(e).'' Nat'l Wildlife Fed'n v. Hodel, 
839 F.2d 694, 750 (D.D.C. 1988) (``NWF''). However, OSM does not 
believe that this statement militates against adoption of a good faith/
all permits standard for VER. As discussed at length in the portion of 
this preamble entitled ``Statutory and Regulatory History,'' in PSMRL 
I, ROUND I, supra, at 14 ERC 1091, the court declined to find the 
closely related 1979 all permits standard unconstitutional. The 
definition being proposed today is consistent with that court's 
decision that ``a good faith attempt to have obtained all permits 
before the August 3, 1977 cut-off date should suffice for meeting the 
all permits test.'' Furthermore, in Hodel v. Virginia Surface Mining & 
Reclamation Ass'n, 452 U.S. 264, 296 n.37 (1981) (``Hodel''), the U.S. 
Supreme Court stated that, while nothing in the statutory language of 
SMCRA or its legislative history would compel adoption of an all 
permits standard for VER, section 522(e) ``does not, on its face, 
deprive owners of land within its reach of economically viable use of 
their land since it does not proscribe nonmining uses of such land.'' 
There is nothing in court decisions to date, the statute, or the 
legislative history that would preclude OSM from exercising its 
discretion to adopt a good faith/all permits standard for VER under 
section 522(e).
    Section 522(e) is a form of land use regulation that may be 
considered analogous to certain provisions of zoning law. VER under 
section 522(e) is generally analogous to those provisions of land use 
laws that define when a person attains a vested right to a particular 
land use regardless of subsequent changes in zoning ordinances that 
would otherwise prohibit or restrict that use. State laws vary widely 
with respect to when a person develops a vested interest in a 
particular land use, but mere ownership is rarely sufficient. Some 
States require that a person both obtain all necessary permits and make 
significant expenditures in reliance on those permits. Others require 
that a person reach a certain point in the permit process or make 
substantial good faith expenditures based on the existing zoning before 
he or she develops a vested interest in uses allowed under that zoning.
    The good faith/all permits standard for VER has a similar effect 
and is based in part on a similar rationale. Therefore, OSM anticipates 
that, in any review of the validity of a final VER standard, a court 
would consider principles analogous to those that have guided judicial 
decisions on challenges to the validity of zoning ordinances and 
similar land use regulatory provisions. In general, the courts have 
upheld land use restrictions as a legitimate exercise of the police 
power under the U.S. Constitution.
    In making VER determinations, OSM and 20 of the 24 States with 
primacy rely upon a VER definition that includes either the all permits 
standard or the good faith/all permits standard. Apart from the 
Belville litigation and The Sunday Creek Coal Co. v. Hodel, No. C-2-88-
0416 (S.D. Ohio, June 2, 1988) (``Sunday Creek''), OSM is aware of no 
cases in which the State or Federal courts have found that the good 
faith/all permits standard or an agency determination that a person did 
not have VER under the good faith/all permits standard was invalid on 
the basis of a conclusion that the standard or determination would 
result in a compensable taking of a property interest under the Fifth 
and Fourteenth Amendments to the U.S. Constitution. Belville and Sunday 
Creek are isolated cases that do not establish precedent outside the 
Southern District of Ohio.
    OSM believes that the good faith/all permits standard proposed in 
this rule is both reasonable and consistent with congressional intent. 
As discussed above, there is a lack of clear or directly applicable 
legislative history with respect to how Congress intended the VER 
exemption in section 522(e) of the Act to be interpreted. In the 
absence of

[[Page 4845]]

such guidance or direction, the good faith/all permits standard would 
balance a number of statutory purposes and policy objectives for this 
rulemaking, including ensuring basic fairness, establishing a 
reasonable standard that is practicable to administer, providing 
substantial environmental protection to congressionally designated 
areas, encouraging efficient removal of coal resources, minimizing 
disruption of existing State regulatory programs and expectations 
engendered thereunder, and avoiding across-the-board or indiscriminate 
compensable takings of property interests.
5. ``Needed for and Adjacent'' Standard
    The ``needed for and adjacent'' standard in the definition of VER 
promulgated on March 13, 1979 (44 FR 14902, 15342) provided that any 
person who owned an ongoing surface coal mining operation for which all 
permits were obtained prior to August 3, 1977, possessed VER for coal 
immediately adjacent to that operation if the person had a property 
right to the coal as of August 3, 1977, and if he or she could 
demonstrate that the coal was needed for the ongoing operation. The 
National Wildlife Federation challenged this standard as unduly 
expanding the scope of the VER exemption beyond that intended by 
Congress. However, the court upheld the standard, finding it to be ``a 
rational method of allowing mining when denial would gravely diminish 
the value of the entire mining operation, thereby constituting a taking 
under Supreme Court declarations.'' PSMRL I, Round I, 14 ERC 1083, 
1091-92 (D.D.C. 1980).
    The revised definition of VER promulgated on September 14, 1983 (48 
FR 41315-16) modified the ``needed for and adjacent'' standard by 
deleting the requirement that the owner of the operation have acquired 
the property rights to the coal for which the exemption is sought prior 
to August 3, 1977 (although OSM's response to a comment concerning this 
issue at 48 FR 41316 suggests that the deletion may have been 
unintentional). In that rulemaking, OSM also defined ``needed for'' as 
meaning that the extension of mining to the coal in question is 
essential to make the surface coal mining operation as a whole 
economically viable.
    The National Wildlife Federation challenged these changes as being 
both procedurally and substantively improper. The U.S. District Court 
for the District of Columbia agreed in part, finding that the agency 
had failed to comply with the Administrative Procedure Act (5 U.S.C. 
553) by not affording the public adequate notice and opportunity for 
comment on these two changes. The court did not rule on the merits of 
the revised standard. PSMRL II, Round III-VER, 22 ERC 1566-67. In 
response, on November 20, 1986 (51 FR 41952, 41961), OSM suspended 
paragraph (c) of the 1983 definition of VER. In the preamble to the 
suspension notice, OSM stated that, pending adoption of a new rule, it 
would rely upon the approved State program definition in primacy 
States. In non-primacy States, the suspension had the effect of 
restoring the 1979 version of the needed for and adjacent standard, 
which did not contain a definition of ``needed for.'' 51 FR 41954-55, 
November 20, 1986.
    On July 18, 1991, OSM proposed to revise the 1983 definition by 
reinstating the property rights ownership requirement and removing the 
sentence defining the ``needed for'' component of the standard. In the 
preamble to this proposed rule, OSM stated that the explanation of 
``needed for'' in the 1983 definition did not substantively clarify the 
meaning or application of the needed for and adjacent standard. In 
addition, OSM proposed to replace the requirement that both the 
property rights and the operation have been in existence on August 3, 
1977, with a requirement that both have been in existence on the date 
that the land for which the exemption is sought came under the 
protection of 30 CFR 761.11 and section 522(e) of the Act. The latter 
change reflects the concept of continually created VER, which was 
upheld in NWF, supra, 839 F.2d 694, 750.
    With two significant exceptions, the definition being proposed 
today substantively resembles the one proposed on July 18, 1991. One 
change clarifies that the standard applies to land, not just coal, 
needed for an existing operation. Land may be essential to the 
operation for reasons other than the coal it contains. For example, an 
operator has little leeway in the location of ventilation shafts for 
underground mines.
    Also, OSM has attempted to eliminate any ambiguity caused by use of 
the term ``ongoing surface coal mining operation'' in the 1979 and 1983 
rules. In 1991, OSM essentially proposed to replace ``ongoing'' with 
``existing.'' However, comments received indicated some uncertainty as 
to whether this term included inactive or approved but unstarted 
operations. OSM believes that there is no rational basis for 
differentiating between active operations and those which are inactive 
or approved but unstarted. Both engender the same type of investment-
backed expectations and rely upon the same economic planning 
considerations. Both also require a significant resource outlay. 
Accordingly, OSM is now proposing to define this standard to include 
land needed for and adjacent to operations for which all permits had 
been obtained, or a good faith effort to obtain such permits had been 
made, as of the date the section 522(e) prohibitions became applicable 
to the land in question.
    Under the revised needed for and adjacent standard being proposed 
today, VER would exist if a person can (1) make the property rights 
demonstration required by paragraph (a) of the definition, and (2) 
document that the land is both needed for and immediately adjacent to a 
surface coal mining operation for which all State and Federal permits 
and other authorizations required to conduct surface coal mining 
operations had been obtained, or a good faith effort to obtain all 
necessary permits and authorizations had been made, prior to the date 
the land came under the protection of section 522(e) and 30 CFR 761.11. 
OSM does not intend for this standard to authorize surface coal mining 
operations on bond forfeiture sites, sites with expired or revoked 
permits (including permits that have expired under section 506(c) of 
SMCRA), abandoned sites, or long-dormant facilities for which no permit 
was required prior to the enactment of SMCRA and which would have to be 
substantially or completely reconstructed before usage could resume.
    To avoid subverting the congressional prohibitions in section 
522(e), OSM believes that VER determinations under this standard must 
be based on an analysis of how denial of the claim would affect the 
value, as of the date the land came under the protection of 30 CFR 
761.11 and section 522(e), of the operation as a whole from the time it 
began operation, not merely whether the additional land or coal would 
prolong the operation's life or provide increased profits. Otherwise, 
this standard could be used to justify unlimited expansion of 
operations adjoining protected areas, which could effectively nullify 
the prohibition. This approach receives implied support in PSMRL I, 
ROUND I, 14 ERC 1083, 1091-92, in which the court upheld the needed for 
and adjacent standard as a reasonable means of avoiding compensable 
takings. OSM seeks comment on whether the rule language should be 
revised to explicitly incorporate this interpretation.

[[Page 4846]]

6. VER for Access and Haul Roads
    As in 1991, OSM is proposing to revise paragraph (b) of the 
definition of VER to incorporate the concept of continually created 
VER, which was previously promulgated as paragraph (d) of the September 
14, 1983 definition and upheld in subsequent litigation. The revised 
definition would recognize VER for the use or construction of an access 
or haul road as part of a surface coal mining operation if (1) the road 
was in existence on the date the land upon which it is located came 
under the protection of section 522(e), (2) a right of way or easement 
for the road was properly recorded as of that date, (3) the regulatory 
authority had issued a permit for an access or haul road in that 
location as of the applicable date, or (4) the person can demonstrate 
the existence of VER under the standards of paragraph (a) of the 
definition. The last alternative is a new addition intended to clarify 
that, because the definition of surface coal mining operations in 30 
CFR 700.5 includes access and haul roads, a person may also demonstrate 
VER for such roads using the same criteria applicable to other types of 
surface coal mining operations and activities.
    OSM also is proposing to expand the scope of paragraph (b) to apply 
to access roads. Previous versions of this definition have applied only 
to haul roads. None of the earlier preambles explains why access roads 
were not included, but a reading of the 1979 preamble suggests that 
this failure may have been an accidental by-product of the fact that 
the comments received focused exclusively on haul roads. That preamble 
sets forth the following rationale for allowing existing roads to be 
used as haul roads, regardless of location or prior use:

    OSM believes that it is less damaging [to the environment] to 
use existing roads, whether or not previously used for coal haulage, 
than to require construction of additional roads. Therefore, all 
roads in existence as of August 3, 1977, have valid existing rights.

44 FR 14993, March 13, 1979.

    This line of reasoning would apply equally well to the use of 
existing roads as access roads--perhaps more so, since roads used 
solely for access generally involve less massive construction impacts 
and are usually used less intensively than haul roads. Consequently, 
the environmental impacts of access roads are usually less severe than 
those associated with haul roads, which often carry heavy truck and 
equipment traffic resulting in significant noise, dust, vibration, and 
other problems. In addition, permits and recorded rights of way for 
access roads are no less legitimate than permits and recorded rights of 
way for haul roads. Accordingly, OSM is proposing to apply the 
standards of paragraph (b) to both access and haul roads.
7. Transferability of VER
    As in 1991, OSM is proposing to reaffirm that VER are transferable, 
primarily because the proposed definition of VER includes a property 
rights component. In essence, OSM is proposing to consider VER as being 
attached to the property to which those rights pertain rather than as 
being valid only for the person claiming such rights or, with the 
exception of VER under the needed for and adjacent standard, for a 
specific operation. (VER under the needed for and adjacent standard 
would attach jointly to both the property and a specific surface coal 
mining operation.) Once attached to the property, VER would become 
subject to whatever State property law exists concerning rights of 
alienation as an element of property ownership. SMCRA (especially 
section 510(b)(6)) generally defers to State property law.
    The VER exemption is analogous to a zoning variance, which, in the 
interest of equity, allows an otherwise prohibited use to occur under 
certain fact-specific circumstances even though that use was not in 
existence on the land in question at the time the zoning ordinance took 
effect. Like VER under the proposed rule, zoning variances typically 
convey with the title to the property even if the rights conferred by 
the variance have not been exercised.
    However, the alienation or transfer of property is not an absolute 
right. Certain interests in real property, such as leases, licenses or 
profits a prendre, may be inherently nontransferable or of limited 
transferability, either by their terms or by operation of State law. If 
a person's coal property interests are of this nature, then any VER 
resting on those interests would also be nontransferable. Furthermore, 
it is possible that a State could designate VER under SMCRA as 
nontransferable as a matter of law.
    In the rule being published today, OSM is proposing to reaffirm the 
transferability of VER to the extent that the underlying property 
rights are transferable under State law. Therefore, to the extent that 
State law allows the sale or other transfer of the underlying coal 
rights or other pertinent property rights, a person with VER may sell 
or transfer the VER to another person as an appurtenance to the coal or 
other property rights. Nothing in this rule is intended to create 
rights that do not already exist in State law or expand upon those that 
do. Individual States may prohibit VER transfers to the extent that 
they have the authority to do so under State law.
8. Continually Created VER: VER When Prohibitions Come Into Effect 
After August 3, 1977
    On September 14, 1983, OSM added paragraph (d) to the definition of 
VER to address situations where the prohibitions of section 522(e) 
become applicable to a particular parcel after August 3, 1977, the date 
of enactment of SMCRA. This paragraph, which introduced the concept of 
continually created VER, provides that:
    Where an area comes under the protection of section 522(e) of the 
Act after August 3, 1977, valid existing rights shall be found if--
    (1) On the date the protection comes into existence, a validly 
authorized surface coal mining operation exists on that area; or
    (2) The prohibition caused by section 522(e) of the Act, if applied 
to the property interest that exists on the date the protection comes 
into existence, would effect a taking of the person's property which 
would entitle the person to just compensation under the Fifth and 
Fourteenth Amendments to the United States Constitution.
    Paragraph (d)(1) extends the existing operation exemption to 
validly authorized surface coal mining operations in existence on the 
date the land on which they are located comes under the protection of 
section 522(e). Paragraph (d)(2) was intended to extend the VER 
exemption in a parallel manner to situations in which operations were 
not yet in existence when the land came under the protection of section 
522(e).
    In PSMRL II, Round III-VER, the court upheld the basic concept of 
continually created VER, but remanded paragraph (d)(2) because it 
incorporated the takings standard, which, the court ruled, had not been 
subject to proper notice and opportunity for comment under the 
Administrative Procedure Act. 22 ERC 1564. To comply with the court's 
decision, OSM subsequently suspended paragraph (d)(2) to the extent 
that it incorporated the takings standard. 51 FR 41961, November 20, 
1986.
    The VER definitions proposed on December 27, 1988, and July 18, 
1991, would have deleted paragraph (d) in favor of incorporating the 
concept of continually created VER into each of the VER standards set 
forth in the other paragraphs of the definition. However, this change 
would have had the effect of eliminating continually created VER for 
existing operations since the

[[Page 4847]]

proposed definitions included no counterpart to paragraph (d)(1) of the 
1983 definition. This clearly was not the intent of the proposed rules. 
As stated in the preamble to the 1991 proposal, although the 
continually created VER provision adopted in 1983 ``is rewritten and 
reorganized in this proposal, the basic intent and application are not 
changed.'' 56 FR 33156, July 18, 1991.
    Therefore, although the definition of VER being proposed today is 
similar to the 1991 proposal in that the concept of continually created 
VER has been incorporated into each of the individual VER standards in 
paragraphs (a) and (b) of the definition, OSM also is proposing to 
revise the existing operation exemption, now proposed for 
recodification as 30 CFR 761.11(b), to incorporate language consistent 
with paragraph (d)(1) of the 1983 definition. Specifically, proposed 30 
CRF 761.11(b) provides that the prohibitions of 30 CFR 761.11(a) do not 
apply to (1) surface coal mining operations for which a valid permanent 
program permit exists on the date that the land came under the 
protection of 30 CFR 761.11(a) or section 522(e) of SMCRA, or (2) other 
surface coal mining operations that were validly authorized as of that 
date. Further discussion of this proposed change appears in Part 
III.E.1. of this preamble, which addresses the proposed revisions to 30 
CFR 761.11 with respect to the existing operation exemption.

D. Section 761.5: Definition of ``Surface Coal Mining Operations Which 
Exist on the Date of Enactment''

    In a nonsubstantive editorial change, OSM is proposing to remove 
the term ``surface coal mining operations which exist on the date of 
enactment'' and its definition from 30 CFR 761.5. Application of the 
concept of continually created VER to the existing operation exemption 
will render this term obsolete. Two variations of this term appear in 
the current versions of 30 CFR 761.12(h) and the introduction to 30 CFR 
761.11, but they are not used in the revised version of Part 761 being 
proposed today.

E. Section 761.11: Areas Where Mining Is Prohibited or Limited

    OSM is proposing to reorganize and revise this section for clarity 
and consistency with revisions to other sections of 30 CFR Part 761. 
Except as discussed below, no substantive changes in meaning are 
intended.
1. Existing Operation Exemption
    As discussed in the portion of this preamble addressing continually 
crated VER, OSM is proposing to recodify paragraph (d)(1) of the 1983 
definition of VER, which establishes continually created VER for 
operations in existence on the date that land comes under the 
protection of section 522(e) after August 3, 1977, as part of the 
existing operation exemption. In addition, because several commenters 
on the 1991 proposal reflected confusion over the scope of the current 
existing operation exemption, OSM is proposing to adopt clarifying 
language. To accommodate these changes, OSM is proposing to move the 
exemption from the introductory portion of 30 CFR 761.11 to a separate 
paragraph (b) within the section.
    Proposed 30 CFR 761.11(b) provides that the prohibitions of 30 CFR 
761.11(a) do not apply to surface coal mining operations for which a 
valid permanent regulatory program permit is in existence on the date 
that the land comes under the protection of 30 CFR 761.11(a) or section 
522(e) of the Act. To address situations in existence before completion 
of the transition between the initial and permanent regulatory 
programs, the rule further specifies that the exemption includes all 
other validly authorized operations in existence as of that date, 
although this provision has no prospective applicability apart from the 
one remaining active initial program mine. Illegal (``wildcat'') 
operations and operations for which the permit has expired or been 
revoked do not qualify.
    In all cases, the proposed rule limits the scope of the exemption 
to lands for which the permittee or operator had the right under State 
property law, as demonstrated in accordance with 30 CFR 778.15, to 
enter and conduct surface coal mining operations as of the date the 
land in question came under the protection of 30 CFR 761.11(a) or 
section 522(e) of SMCRA. By limiting the existing operation exemption 
in this fashion, the proposed rule effectively requires that the 
permittee seek and obtain a VER determination before initiating surface 
coal mining operations on any lands within the permit area for which no 
right of entry has been obtained as of the date the land comes under 
the protection of section 522(e). This additional step should ensure 
that the permittee demonstrates possession of the necessary property 
rights, including, when appropriate, a knowing waiver from the owner of 
the protected feature in accordance with 30 CFR 761.11(a) (2), (3), 
(4), or (5), before initiating surface coal mining operations in a 
protected area.
    On-site activity or physical disturbance of the protected land is 
not a prerequisite for the exemption. This interpretation is consistent 
with the underlying language in section 522(e), which exempts surface 
coal mining operations ``which exist on the date of enactment of this 
Act.'' Nothing in the term ``exist'' requires on-site activity or 
physical disturbance. In addition, this interpretation is consistent 
with the language of section 522(a)(6), which enumerates lands exempt 
from designation as unsuitable for mining and which the legislative 
history also characterizes as an existing operation exemption. 
Specifically, section 522(a)(6) exempts all ``lands on which surface 
coal mining operations are being conducted on the date of enactment of 
this Act or under a permit issued pursuant to this Act * * *.'' The 
legislative history of this provision states that ``an existing mine 
might not be one actually producing coal.'' H.R. Rep. No. 218, 95th 
Cong. 1st Sess. 94-95 (1977).
    The proposed rule is consistent with the language of paragraph 
(d)(1) of the 1983 VER definition, its preamble, and the rationale used 
by the courts in upholding the concept of continually created VER. In 
particular, the 1983 preamble states that paragraph (d)(1) was intended 
to prevent the disruption of mining or deprivation of the right to mine 
after the permittee made the substantial investments required to obtain 
a permit. By way of explanation, the preamble stated that to do 
otherwise would be totally inconsistent with the framework of 
protection that SMCRA provides to both permittees and citizens:

    Without the protection provided by this provision, it would be 
possible, for instance, for a person who objected to a mining 
operation to move a mobile home to the edge of the property 
adjoining a mine, and occupy it, thereby forcing the operator to 
cease all operations within 300 feet of this occupied dwelling. OSM 
does not believe that this is the intended result of section 522(e) 
of the Act. Congress provided the public ample opportunity to review 
and make objections to any proposed mining operation through the 
permitting process. The regulatory authority is required to seek and 
consider the views of the public [before] it issues or denies a 
permit. To allow any person the opportunity to take extraordinary 
means to disrupt mining or deprive the operator of a right to mine 
after the operator has made the substantial investments required to 
obtain a permit and begin operations is totally inconsistent with 
the framework of protection the Act gives to both operators and 
citizens.

48 FR 41315, September 14, 1983.

    OSM has adhered to these principles in developing the proposed 
rule.
    In upholding paragraph (d)(1) of the 1983 definition, the U.S. 
Court of Appeals for the District of Columbia

[[Page 4848]]

Circuit relied primarily on language in the legislative history of 
section 522 indicating that Congress intended to allow the continuance 
of mines already in existence at the time land is determined to be 
unsuitable for mining. The court held that this rule ``should apply 
equally to mines in existence as of August 3, 1977, or to mines 
subsequently started on lands which have permits approved for mining.'' 
NWF, supra, 839 F.2d 694, 750. The court rules that the operative 
principle in determining whether an operation is exempt from the 
section 522(e) prohibitions is whether it had been ``lawfully 
established'' before the land came under the protection of section 
522(e).
    The rule being proposed today would consider an operation to be 
lawfully established upon issuance of a permanent program permit for 
lands for which the permittee has procured the necessary right of entry 
under 30 CFR 778.15. This approach is consistent with 30 CFR 774.13, 
which provides that the regulatory authority cannot summarily revise or 
revoke an approved permanent program permit. Therefore, when lands 
within an approved permanent program permit come under the protection 
of section 522(e) after permit issuance, the permittee would appear to 
have the right to continue to operate on those lands under the existing 
operation exemption unless the regulatory authority orders the 
permittee to revise the permit to remove those lands from the permit 
area in accordance with the procedures and criteria of 30 CFR 774.13. 
If a person believes that a permit has been improperly issued because a 
protected feature came into existence prior to rather than after permit 
approval, he or she has the option of either filing a timely challenge 
to approval of the permit application or submitting a complaint to the 
regulatory authority. If the permit is ultimately found to be 
defective, the regulatory authority must require that the permittee 
revise the permit in accordance with 30 CFR 774.13.
    With respect to initial program operations (operations subject to 
Subchapter B of 30 CFR Chapter VII) and operations conducted prior to 
the effective date of the initial regulatory program, the existing 
operation exemption includes all lands disturbed by the operation as of 
the date the land came under the protection of section 522(e) or 30 CFR 
761.11(a). However, except for one operation on Indian lands, OSM and 
the States have completed the repermitting of initial program 
operations in accordance with 30 CFR 773.11 and section 502(d) of the 
Act. All initial program surface coal mining and reclamation operations 
on non-Indian lands that were not repermitted under the permanent 
program (and thus remain subject to the initial regulatory program) are 
now abandoned, reclaimed, or in the process of reclamation. Under 30 
CFR 773.11(a), no further coal removal or additional site disturbance 
for purposes of conducting surface coal mining operations is 
permissible unless the person first obtains a permanent program permit.
    The existing operation exemption is similar to a nonconforming use 
exemption under State zoning law in that the right to use the site for 
a nonconforming use (in this case, the right to conduct surface coal 
mining operations) is extinguished when the use (in this case, the 
existing operation) ceases. Any person seeking to repermit the site of 
an abandoned or reclaimed initial program operation must comply with 
the prohibitions and restrictions of 30 CFR 761.11(a) as a prerequisite 
for obtaining a permanent program permit.
    Since all States with the potential for coal production in the 
foreseeable future now have either a State or Federal regulatory 
program approved under SMCRA, there will be no new surface coal mining 
operations under the initial regulatory program. Therefore, in effect, 
both the existing and proposed rules will be applied only to operations 
with permanent program permits.
2. Removal of Paragraph (h)
    As in 1991, OSM is proposing to remove 30 CFR 761.11(h), which 
provides that no coal exploration or surface coal mining operations 
would be licensed or permitted on Federal lands within the National 
Park System, the National Wildlife Refuge System, the National System 
of Trails, the National Wilderness Preservation System, the Wild and 
Scenic Rivers System, or National Recreation Areas unless specifically 
authorized by acts of Congress. OSM promulgated this provision on 
September 14, 1983 (48 FR 41349), in response to numerous comments from 
persons concerned that mining or drilling would occur in national parks 
and other areas protected under section 522(e)(1) of the Act. Industry 
subsequently challenged the rule on both procedural and substantive 
grounds. Upon review, the court remanded the rule to the Secretary 
because it found that he had failed to provide adequate notice and 
opportunity for comment under the Administrative Procedure Act (5 
U.S.C. 553). In its opinion, the court also noted that there appeared 
to be no rational basis for distinguishing between Federal and non-
Federal lands in this context since section 522(e)(1) prohibits surface 
coal mining operations on any lands within the statutorily protected 
areas. PSMRL II, Round III-VER, 22 ERC 1557, 1565 (D.D.C. 1985).
    On November 20, 1986, OSM suspended 30 CFR 761.11(h) to comply with 
the court's order (51 FR 41952, 41956). As a result of the suspension, 
neither Federal nor private lands are subject to the absolute 
prohibitions found in 30 CFR 761.11(h).
    On September 22, 1988, the Department of the Interior issued a 
policy statement setting forth the actions the Department would take to 
prevent surface coal mining operations in section 522(e)(1) areas. This 
policy statement, which was published in the Federal Register at 53 FR 
52384 on December 27, 1988, in conjunction with a previous proposed 
rule concerning VER, remains in effect even though OSM subsequently 
withdrew the proposed rule on July 21, 1989. The policy statement 
commits the Department, subject to appropriation, to use available 
authorities (including exchange, negotiated purchase and condemnation) 
to seek to acquire mining rights within the areas listed in 30 CFR 
761.11(h) whenever a person attempts to exercise VER. The policy 
applies to all lands within the boundaries of the areas listed in 
section 522(e)(1), not just to Federal lands.
    The policy statement will not, and is not intended to, provide 
protection equivalent to that afforded by 30 CFR 761.11(h). As the 
court noted in its decision remaining paragraph (h), ``an absolute 
proscription on any mining, permitting, licensing or exploration within 
the 522(e)(1) protected areas might run directly contrary to the 
statute's language that such proscriptions are subject to VER.'' PSMRL 
II, Round III-VER at 1565.
    Accordingly, OSM believes that it would be inappropriate to 
repromulgate the prohibitions in paragraph (h). The 1988 policy 
statement expresses the Secretary's intent to acquire privately held 
coal interests in areas of national significance to the extent 
financial or other resources are available to do so. Any further 
commitment would, in most cases, exceed the Secretary's legal authority 
since most land acquisition actions are subject to congressional 
authorization and appropriation.

F. Section 761.12: Coordination With Permitting Process; Waiver 
Requirements and Procedures

    OSM is proposing only minor revisions and editorial changes in

[[Page 4849]]

Sec. 761.12. These revisions include correcting references to 
Sec. 761.11, adding a reference to newly proposed Sec. 761.13, 
combining existing paragraphs (a) and (b)(1) and revising them for 
consistency with Sec. 761.11. In addition, to be consistent with 
changes in terminology adopted as part of the permitting rules 
promulgated on September 28, 1983 (48 FR 44349), OSM is proposing to 
replace the obsolete term ``complete application'' in paragraph (a) 
with its current equivalent, ``administratively complete application.''
    OSM also is proposing to revise paragraph (a) to clarify that its 
requirements apply to applications for incidental and other boundary 
revisions. Although OSM always has interpreted the somewhat ambiguous 
term ``application for a surface coal mining operation permit'' in 30 
CFR 761.12 as including applications for all types of permit boundary 
revisions, this change will remove any question as to its meaning. 
Removal of this ambiguity should enhance adherence to the prohibitions 
of section 522(e) and 30 CFR 761.11(a).
    As in 1991, OSM is proposing to revise paragraph (c) to specify 
that requests for the findings required prior to the approval of 
surface coal mining operations on Federal lands in national forests may 
be submitted in advance of, and separate from, the permit application. 
OSM's experience in the 18 years since the enactment of SMCRA has shown 
that evaluation of the entire permit application is not essential to 
preparation of the requested findings. However, in response to a 
concern raised by the U.S. Environmental Protection Agency about the 
1991 proposal's complete lack of information requirements for such 
requests, OSM is proposing to specify that the requester remains 
responsible for submitting sufficiently comprehensive information about 
the nature and location of the proposed operation to enable OSM and 
other responsible parties to properly evaluate the request and prepare 
adequately documented findings.
    In 1991, OSM proposed to add a new paragraph (a)(1) to 30 CFR 
761.12 to establish information requirements for requests for VER 
determinations. However, section 761.12 pertains to permitting 
requirements and procedures. Because the rules being proposed today 
(like the preambles to both the 1983 final rule and the 1991 proposed 
rule) state that requests for VER determinations may be submitted and 
processed in advance of preparation and submission of a permit 
application, OSM is now proposing to place these information 
requirements in a new Sec. 761.13, which addresses only the submission 
and processing of requests for VER determinations. For the same reason, 
OSM also is proposing to move existing 30 CFR 761.12(h), the VER 
determination appeal provisions proposed as 30 CFR 761.12(i) in 1991, 
and the sentence in existing 30 CFR 761.12(b)(2) that pertains to 
notification of the National Park Service and the U.S. Fish and 
Wildlife Service to the new section.

G. Section 761.13: Submission and Processing of Requests for Valid 
Existing Rights Determinations

    This proposed new section consists of submission and documentation 
requirements for requests for VER determinations; notice, comment, 
public participation, and decision requirements for the processing of 
requests for VER determinations; and provisions for administrative and 
judicial review of decisions on requests for VER determinations. Major 
portions of this section previously appeared in, or were proposed in 
1991 for addition to, 30 CFR 761.12. Other portions were added in 
response to comments received on the 1991 proposed rule or to provide 
consistency with rule changes in other parts of 30 CFR Chapter VII.
    These requirements are intended to provide the procedural framework 
necessary to ensure that the prohibitions of section 522(e) are fully 
and properly implemented in the manner intended by Congress. They also 
should ensure that all affected persons receive equitable treatment and 
have adequate notice and opportunity to participate in the 
decisionmaking process.
1. Paragraph (a): Which Agency Will Process a Request for a VER 
Determination?
    Proposed 30 CFR 761.13(a) provides that OSM will make all VER 
determinations for Federal lands within the boundaries of the areas 
listed in 30 CFR 761.11(a) (1) and (2), which correspond to the areas 
listed in paragraphs (e)(1) and (e)(2) of section 522 of SMCRA. VER 
determinations for all other lands, including non-Federal lands within 
the boundaries of the areas listed in 30 CFR 761.11(a)(1), would be the 
responsibility of the regulatory authority.
    These provisions are consistent with the exiting and proposed 
Federal lands regulations at 30 CFR 740.4(a)(4) and 745.13(o), which 
are discussed in Part III.A. of this preamble.
    Consistent with the proposed changes to 740.11(g), the proposed 
rule also specifies that the definition of VER in 30 CFR 761.5 applies 
to all VER determinations for lands protected under 30 CFR 
761.11.(a)(1) or (2), including non-Federal lands within the boundaries 
of the areas listed in 30 CFR 761.11(a)(1), regardless of whether OSM 
or the State is responsible for making the determination. For all other 
lands, both OSM and State regulatory authorities must use the 
definition of VER in the appropriate approved regulatory program.
2. Paragraph (b): What Information Must a Request for a VER 
Determination Include?
    Paragraph (b) of proposed 30 CFR 761.13 contains submission and 
content requirements for requests for VER determinations. These 
requirements are primarily derived from provisions proposed as 30 CFR 
761.12(a)(1) on July 18, 1991, which, in turn, are similar to 
guidelines set forth in the preamble to the 1983 definition of VER. See 
48 FR 41314, September 14, 1983. However, because the proposed VER 
definition no longer contains an explicit takings standard, the 
proposed rule does not include items pertinent only to that standard. 
Other modifications are intended to improve clarity, provide additional 
specificity, and ensure that the rule includes requirements pertinent 
to each standard in the definition of VER.
    In keeping with the intent expressed in the preambles to the 1983 
final rule (see 48 FR 41322, September 14, 1983) and the 1991 proposed 
rule (see 56 FR 33161, July 18, 1991), proposed paragraph (b) expressly 
states that a request for a VER determination may be submitted and 
decided in advance of preparation and submission of a permit 
application. Surface coal mining operations may not always be 
technically feasible, legally permissible, or economically viable in 
the absence of VER. Therefore, a requirement that requests for VER 
determinations be accompanied by a permit application may be 
unreasonably burdensome in that it could result in significant permit 
application preparation expenditures that would be futile if the agency 
ultimately determines that the requester does not have VER and 
consequently is ineligible to receive a permit. This is especially true 
of Federal lands within the boundaries of the areas specified in 30 CFR 
761.11(a)(1) and (2), for which OSM has sole authority to process 
requests for VER determinations even when it is not the regulatory 
authority responsible for reviewing permit applications.
    Nothing in the foregoing discussion should be interpreted as 
meaning that

[[Page 4850]]

States may not require that requests for VER deteminations be 
accompanied by a permit application. Sections 503 and 505 of SMCRA 
afford States considerable discretionary authority to adopt 
requirements that either have no Federal counterparts or are more 
stringent than their Federal counterparts in achieving the requirements 
and purposes of the Act. Furthermore, OSM also reserves the right to 
require submission of a permit application if information in the 
application is needed or useful in evaluating the request for a VER 
determination.
    The intent of the provision for advance VER determinations is to 
allow VER questions to be fully settled in advance of permit 
application preparation and review. Therefore, OSM anticipates that 
advance VER determinations would be subject to de novo review during 
the permit application review process only under exceptional 
circumstances. Because the proposed rule establishes notice, comment, 
and public participation reqirements for the submission and processing 
of requests for VER determinations, the lack of opportunity for de novo 
review of VER determinations when such determinations are part of a 
subsequent permit application would not abridge violate the rights of 
citizens to participate in the permitting process.
    Circumstances that might justify reconsideration of an advance VER 
determination include, but are not limited to, a material 
misrepresentation of facts, discovery of new information that 
significantly alters the basis of the VER determination, or a 
substantial change in the nature of the intended operation (e.g., a 
switch from underground mining methods to surface mining techniques). 
If these circumstances arise after permit issuance, the regulatory 
authority should, based upon written findings and subject to 
administrative and judicial review, order that the permit be revised to 
correct any deficiencies. See 30 CFR 774.11 (b) and (c). However, a 
State regulatory authority may not reconsider or overturn a VER 
determination made by OSM.
    Because most of the VER standards for roads do not include the 
property rights component of paragraph (a) of the definition of VER in 
Sec. 761.5, proposed 30 CFR 761.13(b)(1) establishes special, more 
limited information requirements for requests for VER determinations 
for coal mine roads. Specifically, if the request is based on one of 
the standards in paragraphs (b)(1) through (b)(3) of the definition of 
VER in Sec. 761.5, the requester would have to submit satisfactory 
documentation that (1) the road was in existence on the date the land 
upon which it is located came under the protection of Sec. 761.11, (2) 
a right of way or easement for the road was properly recorded as of the 
date the land came under the protection of Sec. 761.11, or (3) the 
regulatory authority had issued a permit for the access or haul road on 
the land in question as of the date the land came under the protection 
of Sec. 761.11(a). If the request is based on the standard in paragraph 
(b)(4) of the definition of VER in Sec. 761.5, the requester would have 
to comply with all other applicable information requirements since 
paragraph (b)(4) merely incorporates the standards of paragraph (a) of 
the definition.
    All other requests for VER determinations would have to include the 
information set forth in paragraphs (b)(2) (i) through (vi) of proposed 
30 CFR 761.13 to demonstrate compliance with the property rights 
component of paragraph (a) of the definition of VER in Sec. 761.5. 
Specifically, these paragraphs would require a legal description of the 
land; complete documentation of the character and extent of the 
requester's current interests in the surface and mineral estates in 
question; a chain of title and discussion of any title instrument 
provisions concerning mining or mining-related surface disturbances or 
facilities; a description of the nature and ownership of all property 
rights for the surface or mineral estates in question as of the date 
the land came under the protection of Sec. 761.11; and a description of 
the type and extent of surface coal mining operations planned, 
including the intended method of mining and any mining-related surface 
facilities, and an explanation of how the planned operations are 
consistent with State property law. If the coal interests have been 
severed from other property interests and the surface estate is held by 
a Federal agency, paragraph (b)(2)(v) would require submission of a 
title opinion or other official statement from the Federal agency 
confirming that the requester has a property right to conduct the type 
of surface coal mining operations intended. This requirement is 
intended to ensure that the record is adequate to determine whether a 
property rights dispute exists.
    Proposed 30 CFR 761.13(b)(2)(vii) provides that, if the request is 
based on the needed for and adjacent standard set forth in paragraph 
(a)(2) of the definition of VER in 30 CFR 761.5, the requester must 
explain why and how the coal is needed for the operation. As several 
commenters noted in response to the lack of a similar provision in the 
1991 proposal, the agency will need this information to make an 
informed decision on the request.
    Proposed 30 CFR 761.13(b)(2)(viii) provides that, if the request is 
based on the good faith/all permits standard set forth in paragraph 
(a)(1) of the definition of VER in 30 CFR 761.5, the person making the 
request must submit the application dates and identification numbers 
and, if applicable, approval and issuance dates and identification 
numbers for any licenses, permits, or authorizations for surface coal 
mining operations on the land in question if such licenses, permits, or 
authorizations are or were held or applied for by the requester or 
predecessor in interest as of the date the land in question came under 
the protection of 30 CFR 761.11. Examples of relevant permits include 
State or Federal surface or underground coal mining permits, National 
Pollutant Discharge Elimination System permits, State air pollution 
control permits, and U.S. Forest Service special use permits, and (for 
some types of facilities such as coal preparation plants and 
ventilation housing for underground mines) building permits and zoning 
approvals. The agency will need this information to make an informed 
decision on the request.
3. Paragraph (c): How May the Public Participate in the VER 
Determination Process?
    Because section 102(i) of SMCRA provides that one of the purposes 
of the Act is to assure that appropriate procedures are provided for 
public participation in the development and enforcement of State and 
Federal regulatory programs, OSM is proposing to include notice and 
comment requirements and provisions for public participation in the VER 
determination process, as suggested by several commenters on the 1991 
proposal. The special protection Congress provided for the lands listed 
in section 522(e) also lends support to public participation in the VER 
determination process.
    With minor modifications, the notice and comment requirements set 
forth in proposed 30 CFR 761.13(c) parallel those currently in use by 
OSM for VER determinations as a matter of policy. They also resemble 
the notice and comment requirements for applications for coal 
exploration permits under 30 CFR 772.12, which have been tailored to 
minimize resource demands on affected parties while maintaining 
consistency with the statutory provisions encouraging public 
participation.
    Under the proposed rule, an agency receiving a request for a VER 
determination must publish a notice in

[[Page 4851]]

a newspaper of general circulation in the county in which the land is 
located inviting comment on whether the request should be approved. 
Because of the national significance of the areas listed in 30 CFR 
761.11(a) (1) and (2), this notice also must appear in the Federal 
Register if the request involves Federal lands within the boundaries of 
those areas. (Under proposed 30 CFR 761.13(a)(2), OSM would have sole 
responsibility for making VER determinations on those lands. Hence, the 
Federal Register publication requirement would not place any added 
burden on State regulatory authorities.) The notice must identify the 
applicable VER standard, the location of the land involved, the name 
and address of the agency office to which comments should be addressed, 
and the closing date of the comment period, which must be a sufficient 
amount of time after the date of publication so as to afford interested 
persons a reasonable opportunity to prepare and submit comments. It 
also must describe the property rights claimed, the basis for the 
claim, the type of surface coal mining operations planned, and the 
procedures the agency will follow in processing the request.
    If the land in question involves severed estates or divided 
interests, the proposed rule provides that the agency must make a 
reasonable effort to locate all owners of interest, both surface and 
mineral, and provide them with a copy of the notice. In addition, such 
notification must be provided to the owner of the structure or feature 
causing the lands to come under the protection of 30 CFR 761.11(a). 
These proposed requirements are intended to provide full protection for 
the listed lands consistent with section 102(b) of SMCRA, which states, 
that one of the Act's purposes is to ``assure that the rights of 
surface landowners and other persons with a legal interest in the land 
or appurtenances thereto are fully protected from [surface coal mining] 
operations.''
    Finally, in paragraph (c)(3), OSM is proposing to provide that, 
whenever a request for a VER determination pertains to land within the 
boundaries of an area under the protection of 30 CFR 761.11(a)(1) and 
section 522(e)(1), the agency responsible for processing the request 
must notify the agency with jurisdiction over the protected land and 
allow that agency 30 days from receipt of the notification to respond. 
Upon request, the agency responsible for the VER determination must 
grant the agency with jurisdiction over the protected area an 
additional 30 days to review and comment upon the request. After that 
time, the agency responsible for the VER determination would have the 
right to make the determination in accordance with proposed 30 CFR 
761.13(d).
    A similar requirement currently appears in 30 CFR 761.12(b)(2), 
where it applies only to lands within the jurisdiction of the National 
Park Service or the U.S. Fish and Wildlife Service. OSM is proposing to 
extend the consultation requirement to all lands protected under 30 CFR 
761.11(a)(1) and section 522(e)(1) because there does not appear to be 
a rational basis for limiting it to lands under the jurisdiction of the 
two agencies identified in the current rule.
4. Paragraph (d): How Will a Decision Be Made?
    Paragraph (d) of proposed 30 CFR 761.13 specifies requirements 
pertinent to the decisionmaking process for requests for VER 
determinations. OSM originally proposed a version of this paragraph as 
part of 30 CFR 761.12(h) on July 18, 1991 (56 FR 33162, 33165). The 
rule being proposed today includes additional language in response to 
commenters' concerns regarding public participation issues and property 
rights disputes.
    Specifically, the proposed rule provides that the agency 
responsible for making the VER determination must review the materials 
submitted with the request, the information received during the comment 
period, and any other relevant available information to determine 
whether the record is adequate to support a decision in favor of the 
requester. If not, the agency must notify the requester in writing, 
explaining the inadequacy of the record and requesting submittal, 
within a reasonable time, of any additional information the agency 
deems necessary to remedy the inadequacy. Upon receipt of the requested 
information or other explanation, the agency must determine whether the 
requester has demonstrated VER for the land in question.
    In keeping with the intent of Congress in enacting the prohibitions 
of section 522(e), the agency processing requests for VER 
determinations has an obligation to critically analyze such requests to 
ensure that section 522(e) is fully implemented and that new surface 
coal mining operations in these areas are prohibited except to the 
extent that they qualify for one of the statutorily authorized waivers 
or exemptions. The proposed rules establish the procedural requirements 
and decision criteria needed to meet this obligation.
    As currently proposed, 30 CFR 761.13(d)(2) includes a provision 
requiring deferral of a decision on a request for a VER determination 
if the underlying property rights are in dispute. The deferral would 
remain in effect until the parties resolve the dispute in the proper 
venue, which is normally the State courts. To do otherwise would 
constitute de facto adjudication of the property rights dispute in 
favor of one of the parties, a result that would violate the 
prohibition on such adjudication in section 510(b)(6)(C) of SMCRA. In 
addition, deferral of a decision in situations involving property 
rights disputes is consistent with section 102(b) of SMCRA, which 
states that one of the Act's purposes is to ``assure that the rights of 
surface landowners and other persons with a legal interest in the land 
or appurtenances thereto are fully protected from [surface coal mining] 
operations.''
    OSM does not interpret section 510(b)(6)(C) of SMCRA as requiring 
deferral of a decision if there is only a mere allegation of a property 
rights dispute. For example, if the parties to the alleged dispute are 
not diligently pursuing resolution of the disagreement in the proper 
venue, then, depending on the facts of the case, the agency processing 
the request for a VER determination might reasonably conclude that the 
lack of any serious attempt to resolve the dispute means that no bona 
fide dispute exists and, therefore, that no deferral is necessary.
    Finally, proposed 30 CFR 761.13(d)(3) specifies that the decision 
document must (1) explain how the requester has or has not satisfied 
all applicable elements of the definition of VER, (2) set forth the 
relevant findings of fact and conclusions, and (3) specify the reasons 
for the conclusions. Under the proposed rule, the agency must provide a 
copy of the decision to the requester and the owner of (or agency with 
jurisdiction over) the area or feature that caused the land to come 
under the protection of 30 CFR 761.11(a). The agency would also have to 
publish notice of the decision in a newspaper of general circulation in 
the county in which the land is located. When Federal lands within the 
areas listed in 30 CFR 761.11(a) (1) or (2) are involved. OSM would 
publish notice of the decision in the Federal Register.
    These requirements are similar to the procedures OSM has followed 
in the past to ensure adequate notice and public participation in VER 
determinations. OSM's experience indicates that the requirements are 
not unduly burdensome and should afford adequate notice and opportunity 
for adversely affected parties to appeal the decision. Federal Register 
publication

[[Page 4852]]

of decisions on requests for VER determinations affecting Federal lands 
within the boundaries of the areas listed in 30 CFR 761.11(a) (1) and 
(2) is appropriate because these lands are of national significance. 
Under proposed 30 CFR 761.13(d)(3)(ii), the Federal Register 
publication requirement would apply only to OSM and only to Federal 
lands.
5. Paragraph (e): How May a Determination Be Appealed?
    Paragraph (e) provides that VER determinations are subject to 
administrative and judicial review under 30 CFR 775.11 and 775.13, 
which contain administrative and judicial review requirements for 
permitting decisions. With respect to VER determinations, this 
provision is substantively identical to both existing 30 CFR 761.12(h) 
and 30 CFR 761.12(i) as proposed in 1991.

H. Section 772.12: Requirements for Coal Exploration on Lands 
Unsuitable for Surface Coal Mining

    As promulgated on September 8, 1983, the regulations at 30 CFR Part 
772 governing coal exploration require that a person who intends to 
conduct any type of coal exploration in areas designated as unsuitable 
for surface coal mining operations in 30 CFR 761.11(a) and section 
522(e) of SMCRA first obtain a permit in accordance with 30 CFR 772.12. 
However, the 1983 regulations did not require a VER demonstration 
either as a mandatory component of the permit application or as a 
prerequisite for permit approval or issuance. On June 22, 1988 (53 FR 
23532), OSM proposed to adopt a rule that would have done so, but the 
final rule promulgated on December 29, 1988 (53 FR 52942) did not 
include this provision. Instead, the preamble to that rule stated that 
OSM would reconsider the issue of VER requirements for coal exploration 
after promulgation of a new definition of VER (53 FR 52945).
    The National Wildlife Federation and other groups challenged OSM's 
failure to adopt the proposed rule. Upon judicial review, the U.S. 
District Court for the District of Columbia held that OSM had failed to 
articulate a proper rationale for not adopting the proposed rule. Nat'l 
Wildlife Fed'n versus Lujan, Nos. 89-0504, 89-1221 and 89-1614, slip 
op. at 25-33 (D.D.C. September 5, 1990). In response, on July 18, 1991 
(56 FR 33152), OSM proposed to add paragraph (b)(5) to 30 CFR 772.14 to 
require a VER demonstration as a prerequisite for approval of coal 
exploration activities in which coal is to be removed for sale or 
commercial use.
    After considering the comments received, OSM is withdrawing this 
proposed change and is instead proposing to add a new paragraph (b)(14) 
to 30 CFR 772.12, the section containing permitting requirements for 
exploration that will remove more than 250 tons of coal or that will 
occur on lands designated as unsuitable for surface coal mining 
operations. Under the proposed rule, a person planning to conduct 
exploration on lands listed in section 522(e) and 30 CFR 761.11(a) 
would have to submit an application that includes a demonstration that 
(1) the exploration activities will not substantially disturb the 
protected lands, (2) the owner of the coal possesses VER, (3) the 
exploration is needed for mineral valuation purposes or is authorized 
by judicial order, or (4) the applicant has obtained a waiver or 
exception in accordance with 30 CFR 761.12 (c) through (f).
    Similarly, OSM is proposing to add a new paragraph (d)(2)(iv) to 30 
CFR 772.12 to provide that the regulatory authority may not approve an 
application for exploration unless it first finds that the exploration 
activities described in the application will not substantially disturb 
any lands listed in 30 CFR 761.11(a). Alternatively, the regulatory 
authority may find that the applicant has (1) demonstrated VER in 
accordance with 30 CFR 761.13, (2) obtained one of the waivers or 
exceptions authorized under 30 CFR 761.11(a) (2) through (5) in 
accordance with 30 CFR 761.12 (c) through (f), or (3) demonstrated that 
the exploration is needed for mineral valuation purposes or authorized 
by judicial order.
    OSM recognizes that nothing in SMCRA prohibits coal exploration on 
lands designed as unsuitable for mining. The rule changes being 
proposed today do not ban exploration on any lands. Instead, they 
merely restrict the methods that may be used to conduct exploration on 
lands protected under section 522(e) of the Act or the potential impact 
of exploration on those lands.
    Section 512(a) of the Act provides broad authority for the 
promulgation of regulations governing coal exploration, and section 
201(c)(2) authorizes the Secretary to ``promulgate such rules and 
regulations as may be necessary to carry out the purposes and 
provisions of this Act.'' As discussed below, the rules being proposed 
today will further the purposes of section 522(e) of the Act.
    Coal exploration involving substantial disturbance can result in 
environmental impacts similar in both nature and extent to those 
resulting from surface coal mining operations. The legislative history 
of section 522(e) of the Act indicates that Congress' purpose in 
enacting that section was to prevent new surface coal mining operations 
in the areas listed therein, either to protect human health, safety, 
and general welfare or because the environmental values and other 
features associated with these areas are generally incompatible with 
surface coal mining operations and their impacts. See S. Rep. No. 128, 
95th Cong., 1st Sess. 94 (1977). In this context, allowing coal 
exploration that would result in similar impacts appears generally 
incompatible with congressional intent in the absence of VER or a 
waiver or exception authorized under section 522(e).
    OSM recognizes that there may be circumstances in which exploration 
activities causing such impacts are unavoidable. Specifically, coal 
exploration involving substantial disturbance (road construction to 
provide access for a drill rig, for example) may sometimes be necessary 
for mineral valuation purposes or to comply with a judicial order even 
when there is no possibility of obtaining approval to conduct surface 
coal mining operations. Accordingly, the proposed rules authorize 
approval of a coal exploration permit under these circumstances. 
However, all exploration activities must be planned and conducted in 
accordance with the requirements and performance standards of 30 CFR 
Parts 772 and 815, which are designed to minimize adverse environmental 
effects.
    Under proposed 30 CFR 772.12(b)(14)(ii), the VER determination 
requirements and procedures of 30 CFR 761.13(a) through (d) would apply 
to requests for VER determinations sought in connection with coal 
exploration. All determinations would be subject to administrative and 
judicial review in accordance with 30 CFR 761.13(e). The proposed 
prohibition of certain types of coal exploration in the absence of VER 
is intended to restrict the number of situations in which exploration 
could cause impacts similar to those that would result from surface 
coal mining operations. Specifically, it attempts to limit such 
exploration to those lands for which a person has the right to conduct 
surface coal mining operations. Therefore, OSM does not propose to 
define VER in a different fashion or differentiate procedurally between 
VER determinations sought in connection with plans to conduct surface 
coal mining operations and those sought in connection with plans to 
conduct coal exploration, regardless of the purpose of the exploration 
or type of mining operations contemplated.

[[Page 4853]]

    A VER determination obtained in connection with an application for 
a coal exploration permit would remain valid for any subsequent 
application seeking approval of a permit for surface coal mining 
operations, provided the type of surface coal mining operations 
proposed in the application is consistent with the type of operations 
contemplated by the VER determination.
    OSM acknowledges that exploration may sometimes be necessary to 
determine the feasibility of using underground mining methods to remove 
the coal underlying section 522(e) areas. Under current OSM policy, 
only surface facilities associated with underground operations are 
subject to the prohibitions of section 522(e). If no surface facilities 
are to be located on the lands protected by section 522(e), a VER 
determination is not a prerequisite for approval of a permit for an 
underground mine. For the reasons set forth above, the proposed rule 
would nevertheless require a VER determination as a prerequisite for 
approval of exploration in advance of such a mine if the exploration 
would involve substantial disturbance of the protected lands. This 
requirement would apply regardless of whether the person proposing the 
exploration planned to construct any surface facilities on the 
protected lands. To protect the values for which Congress designated 
certain lands as off-limits to surface coal mining operations, the 
guiding principle in determining whether a VER determination is needed 
for exploration should be the nature of the impacts of exploration on 
the protected lands, not the type of mining operation ultimately 
planned. Furthermore, OSM believes that, in most cases, the necessary 
exploration activities can be conducted either on adjacent lands or by 
using methods (such as core drilling from existing roads and pathways) 
that do not result in substantial disturbance of the land surface.
    OSM also is considering revising 30 CFR Part 772 (or possibly Part 
761 or both) to include a provision similar to 30 CFR 762.14, which 
provides that the regulatory authority has an obligation to use the 
exploration permit application review and approval process to ensure 
that exploration activities will not interfere with any of the values 
for which the area has been designated unsuitable for surface coal 
mining operations. (Section 762.14 applies only to lands designated 
unsuitable for surface coal mining operations pursuant to the petition 
process set forth in 30 CFR Part 762 and section 522(a) of the Act.) 
OSM seeks comment on whether this provision should be adopted either in 
addition to or in place of the proposed revisions to 30 CFR 772.12 set 
forth in this rulemaking. As currently proposed, the rules would not 
place these restrictions on exploration if the regulatory authority 
determines that a person has VER or qualifies for one of the other 
exemptions in 30 CFR 772.12(b)(14).
    Finally, as a housekeeping measure, OSM is proposing to revise 30 
CFR 772.12(d)(2)(ii) and (iii) to correct a citation to the Endangered 
Species Act and to add a reference to the National Historic 
Preservation Act Amendments of 1992 in Public Law 102-575.

I. Effect in Federal Program States and on Indian Lands

    Through cross-referencing in the respective regulatory programs, 
this proposed rule would apply to all lands in States with Federal 
regulatory programs. States with Federal regulatory programs include 
Arizona, California, Georgia, Idaho, Massachusetts, Michigan, North 
Carolina, Oregon, Rhode Island, South Dakota, Tennessee, and 
Washington. These programs are codified at 30 CFR Parts 903, 905, 910, 
912, 921, 922, 933, 937, 939, 941, 942, and 947, respectively.
    The proposed changes to 30 CFR Part 761 would apply to Indian lands 
by virtue of the incorporation of this part by reference in 30 CFR 
750.14. The proposed changes to 30 CFR Part 772 would apply to coal 
exploration on Indian lands to the extent provided in 30 CFR 750.15.
    In the preamble to the 1991 proposed rule, OSM invited the public 
to comment on whether there are unique conditions in any Federal 
program States or on Indian lands that should be reflected in the 
national rules or as specific amendments to the Federal programs or 
Indian lands rules. Since no commenters identified any unique 
conditions or amendment needs, the rules being proposed today do not 
include any changes to the Indian lands rules or individual Federal 
programs. However, the public is again invited to comment on whether 
any such changes would be necessary if OSM adopts the proposed rules.

J. Effect on State Programs

    If the proposed rules are adopted, OSM will evaluate State 
regulatory programs approved under 30 CFR Part 732 and section 503 of 
the Act to determine whether any changes in these programs will be 
necessary to maintain consistency with Federal requirements. If the 
Director determines that a State program provision needs to be amended 
as a result of these revisions to the Federal rules, he will notify the 
State in accordance with 30 CFR 732.17.
    In the preamble to the 1991 proposed rule, OSM solicited comments 
on whether State program VER definitions must be amended to include 
standards identical to those of the revised Federal definition to be no 
less effective than the revised Federal definition. 56 FR 33156, July 
18, 1991. Because the standards proposed today differ somewhat from 
those proposed in 1991, OSM once again invites comment on the need for 
revision of State program definitions of VER if the definition in 30 
CFR 761.5 is adopted as proposed. OSM particularly seeks comment on 
whether those States with an approved takings standard should be 
required to remove this standard or whether the rationale OSM relied 
upon to approve the takings standard in the Illinois definition remains 
valid. (See 30 CFR 917.15(j) and 54 FR 123, January 4, 1989.) In other 
words, may the takings standard be considered no less effective than 
the good faith/all permits standard in achieving the purposes and 
requirements of the Act even though it balances the purposes in a 
different manner with potentially different results?

IV. Procedural Matters

A. Federal Paperwork Reduction Act

    In accordance with 44 U.S.C. 3507(d), OSM has submitted the 
information collection and recordkeeping requirements of 30 CFR Parts 
761 and 772 to the Office of Management and Budget (OMB) for review and 
approval.
30 CFR Part 761
    Title: Areas designated by Act of Congress.
    OMB Control Number: 1029-0102.
    Abstract: Part 761 includes criteria and procedural requirements 
for waivers and exemptions (including the VER and existing operating 
exemptions) from the prohibition on conducting surface coal mining 
operations in the areas specified in section 522(e) of SMCRA. This part 
identifies the documentation persons need to provide to demonstrate 
possession of or eligibility for a waiver or exemption. It also 
establishes review and notification requirements and decision criteria 
for the agency responsible for making decisions on requests for VER 
determinations.
    Need for and Use: OSM and State regulatory authorities use the 
information collected under 30 CFR Part 761 to ensure that persons 
planning to conduct surface have the right to do so

[[Page 4854]]

under one of the exemptions or waivers provided by this section of the 
Act.
    Respondents: Persons who prepare the approximately 475 applications 
for permits for surface coal mining operations that OSM and State 
regulatory authorities receive each year, and the 24 State regulatory 
authorities who must evaluate the validity of waiver and exemption 
claims and requests for VER determinations that accompany or precede 
these applications.
    Total Annual Burden: OSM estimates that a person will need an 
average of 6 hours to prepare each request for a VER determination 
under 30 CFR 761.13. The agency responsible for processing the request 
will require an average of 8 hours to comply with the information 
collection requirements of these section, resulting in an average total 
burden of 14 hours for each request. Under 30 CFR 761.12, preparation 
and processing of requests for other types of exemptions and waivers 
will require an average of 2 hours per request. The estimated total 
annual burden for part 761 is 2,366 hours.
30 CFR PART 772
    Title: Requirements for coal exploration.
    OMB Control Number: 1029-0033.
    Abstract: Section 512 of SMCRA provides that persons conducting 
coal exploration on non-Federal lands must comply with exploration 
regulations issued by the regulatory authority. Section 512(d) of the 
Act requires a permit and the prior approval of the regulatory 
authority for exploration removing more than 250 tons of coal; 30 CFR 
Part 772 extends this requirement to all exploration on lands 
designated as unsuitable for surface coal mining operations. For all 
other types of exploration, the Act and regulations require submission 
of a notice of intent to explore. The regulations in 30 CFR Part 772 
establish content requirements for notices of intent, content and 
processing requirements for applications for coal exploration permits, 
and recordkeeping requirements for regulatory authorities.
    Need For and Use: OSM and State regulatory authorities use the 
information collected under 30 CFR Part 772 to maintain knowledge of 
coal exploration activities, evaluate the need for an exploration 
permit, and ensure that exploration activities comply with the 
environmental protection and reclamation requirements of 30 CFR Parts 
772 and 815 and section 512 of SMCRA.
    Respondents: Persons who prepare the approximately 1,225 notices of 
intent to explore and 4 applications for coal exploration permits 
received each year by OSM and State regulatory authorities. Also, the 
24 State regulatory authorities that process notices of intent and 
applications for exploration permits.
    Total Annual Burden: The estimated annual burden for this part 
totals 13,354 hours, which translates to an approximate burden of 11 
hours for the average notice of intent (10 hours to prepare the notice 
and 1 hour for the regulatory authority to review and file it), and 104 
hours for the average application for a coal exploration permit (70 
hours to prepare the application and 34 hours for the regulatory 
authority to process and file it). See 30 CFR 772.10 for a section-by-
section burden summary for this part.
    Comments are invited on:
    (a) Whether the proposed collection of information is necessary for 
the proper performance of OSM and State regulatory authorities, 
including whether the information will have practical utility;
    (b) The accuracy of OSM's estimate of the burden 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.
    Under the Paperwork Reduction Act, OSM must obtain OMB approval of 
all information and recordkeeping requirements. No person is required 
to respond to an information collection request unless the form or 
regulation requesting the information has a currently valid OMB control 
(clearance) number. These numbers appear in section xxx.10 of 30 CFR 
Parts 710 through 955. To obtain a copy of OSM's information collection 
clearance requests, explanatory information, and related forms, contact 
John A. Trelease at (202) 208-2783 or by e-mail at [email protected].
    By law, OMB must submit comments to OSM within 60 days of 
publication of this proposed rule, but may respond as soon as 30 days 
after publication. Therefore, to ensure consideration by OMB, you must 
send comments regarding these burden estimates or any other aspect of 
these information collection and recordkeeping requirements by March 3, 
1997, to the Office of Management and Budget, Office of Information and 
Regulatory Affairs, Attention: Interior Desk Officer, 725 17th Street, 
NW, Washington, DC 20503. Please refer to OMB Control Numbers 1029-0033 
and 1029-0102 in any correspondence.

B. Executive Order 12866

    The proposed rule is a significant regulatory action under section 
3(f) of Executive Order 12866. Accordingly, OSM has prepared a cost/
benefit assessment (economic analysis) of the rulemaking alternatives 
pursuant to section 6(a)(3)(C) of the executive order.

C. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., 
the Department of the Interior has determined that this proposed rule 
would not have a significant economic impact on a substantial number of 
small entities. See 50 FR 13250 (April 3, 1985). A small entity 
flexibility analysis has been prepared and placed in the administrative 
record of this rulemaking.

D. Unfunded Mandates

    For purposes of compliance with the Unfunded Mandates Reform Act of 
1995, this rule will not impose any obligations that individually or 
cumulatively would require an aggregate expenditure of $100 million or 
more by State, local, and Tribal governments and the private sector in 
any given year.

E. National Environmental Policy Act (NEPA)

    On April 3, 1985 (50 FR 13250), OSM published a notice of intent to 
conduct rulemaking on the applicability of the section 522(e) 
prohibitions to underground mining. On June 19, 1985 (50 FR 25473), OSM 
announced the agency's intent to prepare an environmental impact 
statement (EIS) pursuant to section 102(2)(C) of NEPA, 42 U.S.C. 
4332(2)(C) for this rulemaking. OSM held scoping meetings for the EIS 
on August 1, 1985, in Pittsburgh, Pennsylvania; August 6, 1985, in St. 
Louis, Missouri; and on August 9, 1985, in Washington, D.C. to obtain 
public input. Written comments on the scope of the EIS were accepted 
separately through September 10, 1985.
    Based on the comments received and the March 22, 1985, decision in 
PSMRL II, Round III-VER remanding the definition of VER, OSM decided to 
conduct a combined analysis of the rulemaking alternatives for both VER 
and the applicability of the section 522(e) prohibitions to underground 
mining. OSM announced its intent in another scoping notice published on 
January 22, 1987 (52 FR 2421). OSM also held a meeting on February 6, 
1987, to solicit further input on the rulemaking alternatives and the 
scope of the EIS from the public and potentially affected Federal 
agencies. On February

[[Page 4855]]

23, 1987, OSM held another meeting to receive testimony from 
environmental groups and other organizations unable to attend the 
earlier meeting.
    On December 27, 1988 (53 FR 52374), OSM published a draft EIS and 
regulatory impact analysis concurrently with a proposed rule addressing 
both VER and the applicability of the prohibitions to subsidence from 
underground mining. On July 21, 1989 (54 FR 30557), OSM withdrew the 
proposed rule.
    On April 19, 1991 (56 FR 16111), OSM published a revised draft EIS 
for review and comment, followed by a new proposed VER rule on July 18, 
1991 (56 FR 33152) and, on the same date, a notice of inquiry 
concerning the applicability of the prohibitions to underground mining.
    OSM never finalized the VER rule, electing instead to develop the 
new proposed rule being published today. On April 28, 1994 (59 FR 
21996), OSM published a notice of intent to prepare a revised EIS 
analyzing both VER and the applicability of the prohibitions to 
underground mining. After analyzing the comments received, OSM has 
completed a new draft EIS (OSM-EIS-29), which is now available to the 
public for review and comment.

F. Executive Order 12630 (Takings)

    In accordance with E.O. 12630 (March 18, 1988), and the ``Attorney 
General's Guidelines For the Evaluation of Risk and Avoidance of 
Unanticipated Takings,'' dated June 30, 1988, the Department has 
prepared a takings implication assessment, which has been made a part 
of the administrative record for this rulemaking, and is set forth 
below:
    Section 5221(e) of SMCRA provides that, subject to VER (and with 
certain other specified exceptions), no surface coal mining operations 
shall be permitted on certain lands designated by Congress. As stated 
in the preceding sections, the proposed rule defining VER would 
establish a GFAP standard for VER under section 522(e).
    Under the GFAP standard, a person would have VER if, prior to the 
date the land came under the protection of section 522(e), the person 
or a predecessor in interest had all necessary property rights and had 
obtained, or made a good faith effort to obtain all State and Federal 
permits and other authorizations required to conduct surface coal 
mining operations.
    The proposed rule may have some significant, but unquantifiable, 
takings implications. OSM expects that the proposed rule would not be 
found by a court to constitute a per se taking, since that issue was 
litigated in 1979-80.
1. No Per Se Takings
    It is unlikely that the GFAP standard would be determined to 
constitute a taking per se. This standard is a modification of the All 
Permits standard adopted on March 13, 1979, which required that a 
person demonstrate valid issuance by August 3, 1977, of all necessary 
State and Federal permits.
    The rule was challenged in In Re: Permanent Surface Mining 
Regulation Litigation I, No. 79-1144 (D.D.C. February 26, 1980), 14 
Env't Rep. Cas. 1083, as effecting a compensable taking of property. 
While the court declined to address the constitutionality of the VER 
definition, it found that a person who applies for all permits, but 
fails to receive one or more through government delay, engenders the 
same investments and expectations as a person who has obtained all 
permits. Therefore, the court found that a good faith attempt to obtain 
all permits before August 3, 1977, should suffice for purposes of VER. 
The court remanded to the Secretary that portion of the definition that 
required the property owner actually to have obtained all permits 
necessary to mine.
2. Likelihood of Compensable Takings
    In evaluating taking claims for compensation concerning government 
regulatory actions, the courts have typically considered three factors 
on a fact-specific, case-by-case basis: the character of the 
governmental action, the economic impact of the action, and the extent 
to which the government action interferes with reasonable investment-
backed expectations. See Penn Central Transportation Co. v. New York 
City, 438 U.S. 104, 124 (1977). Because of the scope of the proposed 
rule and the lack of information on specific property interests that 
might be affected, this assessment cannot predict or evaluate the 
effects of the proposed rule on property rights. Instead, the 
assessment will discuss generally the anticipated impacts of the 
proposed rule, and compare them to the impacts of the other 
alternatives considered.
    a. Character of the governmental action. The purpose served and the 
statutory provisions implemented by this proposed rulemaking are 
discussed in the preamble to the proposed rule. The proposed rule 
substantially advances a legitimate public purpose. The legitimate 
public purpose is the implementation of the protections for specified 
areas set forth in section 522(e) of SMCRA. In that section, Congress 
determined that subject to certain exceptions, including valid existing 
rights, surface coal mining is prohibited on specified lands because 
such mining is incompatible with the values for which those lands were 
designated as unsuitable for surface coal mining operations.
    The proposed rule substantially advances that purpose by providing 
that the VER exception for mining in those protected areas applies only 
to the extent that a person can demonstrate that a good faith effort 
had been made to obtain all required permits for a surface coal mining 
operation before the area came under the protection of section 522(e). 
The proposed definition of VER thus advances the regulatory scheme 
Congress developed to prevent the harms which surface coal mining 
operations would cause in those areas.
    OSM does not know of any other property use or actions that would 
significantly contribute to the problems caused by surface coal mining 
operations in such areas.
    b. Economic impact. Use of the GFAP standard or the All Permits 
standard by 20 States (and for a number of years, by OSM) has not 
resulted in any compensation awards to date, nor has it resulted in any 
financial compensation in those instances where the application of the 
standard by OSM has resulted in litigation, as discussed below. 
Therefore, OSM believes that adoption of a GFAP standard will not 
result in any change in the Government's financial exposure relative to 
the current situation.
    The property interests that could be affected by this rule are coal 
rights in section 522(e) areas. It cannot be determined in advance 
which coal rights would be affected by the eventual application of this 
proposed rule, or what value those rights would have. There is no data 
base that definitively or reliably lists all properties protected under 
section 522(e), or the nature or extent of individual coal rights 
included in such areas. Such a list would not remain current for any 
appreciable time because individual properties would be added or 
removed on a continual basis as protected features come into existence, 
evolve, and sometimes disappear. Even if it could be determined which 
coal rights are subject to section 522(e), it cannot reliably be 
predicted which coal an owner might seek to mine or for which a VER 
determination would be necessary. Because takings determinations are 
case-specific, OSM cannot predict all the factors necessary to 
determine whether a denial of VER would constitute a compensable 
taking.
    For purposes of this assessment, the evaluation of potential 
economic impact

[[Page 4856]]

utilizes in part the analyses set out in the Draft Environmental Impact 
Statement (DEIS) (OSM-EIS-29, September 1995) and Draft Economic 
Analysis (EA) (September 1, 1995) for the proposed rule. The DEIS and 
EA discussions of the alternatives summarize the number of acres 
estimated to be disturbed under each VER alternative over a 20-year 
period. Because of the difficulty in predicting the actual mining in 
protected areas under this rule, OSM could not predict the actual 
impacts of the alternatives. To provide a basis for comparing the 
relative environmental and economic impacts of the proposed rule and 
the alternatives, OSM developed impact estimates by using a model that 
relied on specific methodologies and assumptions.
    Therefore, the DEIS and EA estimates of coal acreage that could be 
mined under the GFAPT alternative and the other alternatives are 
relevant to this assessment only to the limited extent that they show 
the anticipated relative economic impacts of the proposed rule, 
compared to the other alternatives. Tables V-1 through V-5 of the DEIS 
show relative amounts of coal acreage estimated to be mined over a 20-
year period under the different alternatives, as calculated using the 
model.
    Generally speaking, these analyses assume that relatively few 
persons would be able to demonstrate VER under a GFAP standard; that, 
for some categories of lands, more persons might be able to demonstrate 
VER under a GFAPT standard, and that in some cases, even more persons 
might be able to demonstrate VER under an O&A standard. The analyses 
further assume that the impacts of a Bifurcated standard would be 
somewhere between the impacts of the GFAP standard and those of the O&A 
standard.
    In general, the GFAP standard is more likely to limit surface coal 
mining operations. As a result, more takings claims would be expected 
to be filed under a GFAP standard. Whether courts would find that a 
negative VER determination under the GFAP standard constituted a 
compensable taking should turn on the specific property rights 
involved.
    For purposes of evaluating the economic impact of the proposed 
rule, OSM surveyed historical permitting information, relevant 
litigation, and the DEIS and EA analyses of anticipated mining impacts 
in individual section 522(e) categories of lands.
    Historical data: Currently, five States use the All Permits 
standard and 15 use the GFAP standard. Two States use a Takings 
standard, one uses only the Needed for and Adjacent standard, and one 
State has no VER definition. OSM is not aware of any instance in which 
the States' use of these standards has resulted in a judicial 
determination of a compensable takings. Therefore, history does not 
suggest that the promulgation of a GFAP standard would result in a 
significant number of takings compensation awards. While the likelihood 
of some degree of financial exposure exists, the use of the GFAP 
standard or the All Permits standard by 20 States (and for a number of 
years, by OSM) has not resulted in any compensation awards to date, nor 
has it resulted in any financial compensation in those instances where 
the application of the standard by OSM has resulted in litigation, as 
discussed below. Therefore, based on the above data, OSM believes that 
the adoption of a GFAP standard will not result in any change in the 
Government's financial exposure.
    Litigation on use of a GFAP standard: The question of whether 
application of the GFAP standard for VER effects a compensable taking 
was examined by the court in Sunday Creek Coal Co. v. Hodel (``Sunday 
Creek''), No. 88-0416, Slip op. (S.D. Ohio June 2, 1988). In Sunday 
Creek, applying Ohio's equivalent of the GFAP standard of VER, OSM 
denied the plaintiff's VER request. The court ruled that OSM's 
application of Ohio's VER standard would deprive Sunday Creek of its 
property rights in violation of the Fifth Amendment. The court 
therefore reversed OSM's negative VER determination. In another case 
that considered the question of VER, Belville Mining Co. v. United 
States (``Belville II''), No. C-1-89-874 (S.D. Ohio), the court simply 
assumed that if an applicant could demonstrate a right to strip mine, 
then denial of VER would constitute a ``taking'' of that applicant's 
interest. These two decisions indicate that, at least in Ohio, a 
Federal court would be likely to find that application of the GFAP 
standard for VER would effect a compensable taking.
    Summary of takings implications for section 522(e) lands: Based 
upon available information, including the DEIS and EA for the proposed 
rule, and a survey of permits, the following takings impacts from the 
proposed rule are anticipated.
    Section 522(e)(1) lands: These areas include National Park lands, 
National Wildlife Refuge lands, National Trails, National Wilderness 
Areas, Wild and Scenic Rivers and study rivers, and National Recreation 
Areas. OSM anticipates relatively few takings impact in (e)(1) areas 
because there has been a relative dearth of VER determinations and any 
resulting takings claims concerning (e)(1) areas in the last 18 years.
    Further, as previously discussed, the Secretary's 1988 policy 
concerning exercise of VER in (e)(1) areas remains in effect. That 
policy states that, if a person acts to exercise VER on (e)(1) lands, 
then, subject to appropriation, the Secretary will use available 
authorities to seek to acquire the rights through exchange, negotiated 
purchase or condemnation.
    All of this suggests that there may continue to be few VER 
requests, little economic impact, few takings cases, and even fewer 
takings awards in (e)(1) areas.
    Surface mining: As discussed in the EA, OSM anticipates that in 
many cases a compensable taking for denial of VER to surface mine would 
not be found, because the requisite property right to surface mine coal 
could not be demonstrated. And in many cases, if VER for surface mining 
were denied, underground mining would still be a reasonable remaining 
use of the coal, so a takings award would not be likely for denial of 
VER to surface mine in section 522(e)(1) areas.
    Underground mining: The related OSM rulemaking concerning 
applicability of section 522(e) prohibitions to subsidence proposes 
that the prohibitions would not apply to subsidence. Therefore, OSM 
expects that any takings award for denial of VER for underground mining 
would be limited to coal that could not be mined from portals outside 
the (e)(1) area.
    Section 522(e)(2) lands: These areas consist of Federal lands 
within national forests. OSM anticipates relatively few takings from 
VER determinations on (e)(2) lands.
    Surface mining: OSM anticipates that no takings claims would arise 
out of application of the proposed VER standard in surface mining VER 
determinations in the western national forests and national grasslands. 
This is because coal owners in the western (e)(2) areas have never 
pursued surface mining VER determinations, but rather have obtained 
compatibility determinations under section 522(e)(2). OSM does 
anticipate that some acreage might be precluded from surface mining, 
and some takings claims might arise, concerning surface mining VER 
determinations in the eastern national forests.
    For surface coal mining, OSM expects that a compensable taking will 
be unlikely if underground mining is an economically and technically 
feasible alternative (because if VER were denied

[[Page 4857]]

for surface mining, most owners could qualify for a compatibility 
exception for underground mining, so underground mining would be a 
reasonable remaining use). As discussed in the DEIS and EA, OSM 
anticipates that in a substantial number of cases (a higher proportion 
in the eastern coal fields), a court would find no property right to 
surface mine under State property laws. This is because the coal in 
many cases was severed from the surface rights relatively early, when 
surface mining was not common at the time and place of severance. As a 
result, under State property law, typically the coal owner would not 
have the necessary right to surface mine. OSM does not have information 
on actual dates of severance of coal rights. (There might also be 
mitigation of takings in those limited instances where the United 
States decides to purchase coal rights.)
    Underground mining: The (e)(2) compatibility determination 
exception would continue to apply. Therefore, OSM would expect few 
takings claims from denial of VER for underground mining in national 
forests, because OSM assumes that virtually all underground mining 
could qualify for a compatibility determination. This is based in part 
on the fact that the Multiple-Use Sustained Yield Act and the National 
Forest Management Act establish multiple use as the guiding principle 
for management of national forest lands, and in part on the fact that, 
in the past, requests for compatibility determinations have never been 
denied. Surface operations and impacts associated with underground 
mining generally disturb only a relatively minimal amount of the land 
surface. Roads and surface facilities can generally be sited in such a 
way as to avoid significant impacts on other land uses such as timber 
production, livestock grazing, and recreation.
    Section 552(e)(3) lands: These areas include lands where surface 
coal mining operations would adversely affect a publicly owned park or 
site on the National Register of Historic Places. OSM does not 
anticipate that any significant takings would occur on (e)(3) lands as 
a result of surface or underground mining VER determinations. Pursuant 
to (e)(3), jurisdictional agencies, together with the regulatory 
authority, may approve mining in the vicinity of protected areas, and 
thus waive the prohibition of (e)(3). A sampling of permit records 
indicated that some such mining has occurred, but no VER requests were 
located for such areas. Therefore, OSM anticipates that, in many cases, 
operations may avoid such sites or resolve any jurisdictional agency 
concerns about mining impacts, so that the jurisdictional agency and 
the regulatory authority would jointly approve mining pursuant to 
(e)(3). In such cases, a VER determination would be unnecessary.
    Section 522(e)(4) lands: These areas include lands within one 
hundred feet of the right of way of a public road. OSM anticipates 
relatively few takings claims concerning VER determinations for (e)(4) 
areas. Coal mines now tend to avoid urban areas (where many roads and 
streets are located) because of increased acquisition and public 
safety-related costs of mining in such areas. In the vast majority of 
cases, an exception of the prohibitions of (e)(4) is obtained under the 
waiver provision of (e)(4), rather than through a VER determination. 
Therefore, OSM does not expect the choice of a VER standard to have a 
major effect on takings claims for coal located under roads. As noted 
above, OSM's survey of permitting data located only a few instances of 
VER determinations for (e)(4) areas.
    Section 522(e)(5) lands: These areas include lands within 300 feet 
of an occupied dwelling, public building, school, church, community or 
institutional building, or public park, or within 100 feet of a 
cemetery. OSM anticipates relatively little economic impact for takings 
purposes on (e)(5) areas other than (e)(5) public park lands.
    The survey of permit files indicated that in most cases (more than 
85%), mining near dwellings occurs because (e)(5) waivers are 
negotiated with dwelling owners. Therefore, OSM expects that VER would 
not be necessary and would continue not to be pursued in most such 
areas. Proposals to mine in areas occupied by public buildings, 
schools, churches, and cemeteries are typically limited. It is usually 
less expensive for the operator to avoid such areas, rather than to pay 
the costs of seeking VER, avoiding material damage where prohibited, 
and paying reclamation costs.
    In addition, the permit survey did not disclose any instances of 
VER requests for mining in the areas around non-NPS public parks 
protected under (e)(5). However, the OSM model does anticipate that in 
the next 20 years substantial coal acreage in (e)(5) public parks areas 
might be precluded from mining as a result of underground mining VER 
determinations under the proposed rule, and a relatively smaller but 
still significant acreage might be precluded from surface mining as a 
result of surface mining VER determinations under the proposed rule. 
Some portion of those acreages could result in takings awards.
    c. Interference with reasonable investment-backed expectations. 
Application of the proposed rule might result in more interference with 
reasonable investment-backed expectations than would occur under the 
other alternatives considered. Such interference could occur when coal 
rights holders would be unable to mine the coal because they could not 
demonstrate VER under the GFAP standard. However, any such interference 
could be limited by factors such as the following:
    In many cases, holders of coal rights in section 522(e) areas will 
not request VER, either because the holder determines that the coal is 
not economically minable, or because the holder determines that it is 
less costly to obtain some other exception (such as a compatibility 
determination or a waiver) from the prohibitions of section 522(e).
    In other cases, under State property law, where the mineral rights 
have been severed from the surface estate, OSM expects that coal 
holders would not hold the necessary property right to surface mine the 
coal, as discussed in more detail in the DEIS and EA. Such holders 
could have no reasonable expectation of surface mining the coal.
    If the holder of coal rights purchased those rights after the land 
came under the protections of section 522(e), the purchaser would be 
deemed to be on notice of the applicability of the prohibitions of 
section 522(e) and would have no reasonable expectation of being 
allowed to mine. Thus any significant investments made under these 
circumstances would not likely be found to be reasonable.
    If a coal holder has made no significant expenditures, the holder 
would probably be unable to demonstrate sufficient investment-backed 
expectations to support a takings claim. Further, if VER for surface 
mining were denied, but underground mining were possible and 
economical, a takings claim would similarly be difficult to sustain.
3. Alternatives to the Proposed Rule
    As previously discussed, OSM developed and considered three 
alternatives to the GFAP standard for VER. They are the GFAPT standard, 
the O&A standard, and the Bifurcated standard. The GFAP standard has 
the greatest potential for takings implications, and the only way to 
minimize the takings implications of the proposed rule is to select one 
of the other alternatives. However, OSM does not believe that such a 
selection is justified. OSM believes that the

[[Page 4858]]

proposed rule is the best alternative because it best protects the 
areas listed in section 522(e) from surface coal mining operations, as 
Congress intended.
    GFAPT standard: The GFAPT standard would provide that a person 
could demonstrate VER by demonstrating either compliance with the GFAP 
standard, or that denial of VER as of the date the area became subject 
to section 522(e) would reasonably be expected to result in a 
compensable taking.
    OSM would expect no takings implications from the GFAPT standard 
because in all cases, VER should be granted if denial would result in a 
compensable taking. However, as noted in the preamble to the proposed 
rule, when OSM proposed the GFAPT alternative in 1991, it elicited some 
of the strongest opposition OSM has ever received on a proposed rule. 
OSM received approximately 750 comments, and virtually every comment 
emphatically opposed the GFAPT standard. Opponents charged that the 
GFAPT standard would be impossibly burdensome for States to implement. 
Some commenters charged that it was too complex, unpredictable, and 
uncertain. Many commenters urged adoption of a ``bright-line'' standard 
instead. Some charged that it was not protective enough of section 
522(e) areas, and others charged that it was inappropriately 
restrictive of mining in section 522(e) areas. Some commenters felt 
that State regulatory authorities had no authority under State law to 
apply the standard. Every category of commenter rejected the GFAPT 
standard as unworkable, unacceptable, or demonstrably inferior to some 
other alternative.
    Ownership and authority standard: The O&A standard would provide 
that a person would have VER upon demonstrating ownership of the coal 
rights plus the property right under State law to remove the coal by 
the method intended. The O&A standard would require demonstrating, as 
of the date the land came under the protection of section 522(e), the 
property right to mine the coal by underground methods if VER for 
underground mining were sought; and by surface mining methods if VER 
for surface mining were sought.
    OSM would not expect the O&A standard to have significant takings 
implications. If a person could not demonstrate the right to mine the 
coal by the method intended, there would be no denial of or 
interference with property rights for which compensation would be due 
under takings law, since a person must have the property right to a 
particular use to be compensated for denial of that use.
    Although the O&A standard would have no significant takings 
implications, OSM believes that it suffers from a serious shortcoming 
in that it would effectively eviscreate the protections afforded under 
section 522(e). The O&A alternative would result in a finding of VER 
whenever a person met the permit application requirements for property 
rights. The prohibitions of section 522(e) would be meaningless and 
without practical effect. Such a result would clearly be inconsistent 
with congressional intent.
    Bifurcated standard: Under the Bifurcated standard, when the 
mineral and surface estates have been severed, the date of severance 
would determine whether the O&A or the GFAP standard for VER would be 
used. When the mineral estate was severed from the surface estate prior 
to the date the land came under the protection of section 522(e), the 
O&A standard would be used to determine VER. When the mineral estate 
was severed from the surface estate after the date the land came under 
the protection of section 522(e), the GFAP standard would be used.
4. Estimate of Potential Financial Exposure From the Proposed Rule
    The Attorney General's guidelines and the Department's supplemental 
guidelines for takings implications assessments provide that the 
assessment should set out an estimate of the financial exposure if the 
proposed rule were held to effect a compensable taking. Given the 
geographic scope of this proposed rule, however, and the lack of 
information on the effects on individual property rights, a meaningful 
estimate of financial exposure is impossible. Instead, as discussed 
above, this assessment discusses generally the anticipated takings 
impacts of the proposed rule, relative to the other alternatives 
considered. Federal financial exposure might arise primarily from 
claims concerning VER denials in the eastern United States in section 
522(e)(2) areas or from the costs associated with acquisition of 
property rights in section 522(e)(1) areas pursuant to the Secretary's 
1988 policy statement, as discussed above.
5. Conclusion
    The proposed rule for VER is expected to have a greater potential 
for takings implications than the other alternatives considered. More 
significant takings implications are anticipated primarily in some 
(e)(2) areas (Federal lands in eastern national forests); (e)(5) areas 
(State and local parks); and, to a lesser extent, (e)(4) areas (public 
roads). In light of the Secretary's 1988 policy on exercise of VER for 
(e)(1) areas, takings implications are less likely in (e)(1) areas. 
Takings implications are also substantially less likely in (e)(3) and 
(5) areas. Case-by-case application of the regulation might result in 
takings implications, but such an analysis is beyond the scope of this 
assessment and cannot be made until the rule is actually applied. Thus, 
insufficient information is available to enable an accurate assessment 
of the extent to which significant takings consequences might result 
from adoption of this rule.
    Under the standards set forth in the ``Attorney General's 
Guidelines For the Evaluation of Risk and Avoidance and Unanticipated 
Takings,'' dated June 30, 1988, and the Supplementary Takings 
Guidelines of the Department of the Interior, OSM therefore concludes 
that this rulemaking has significant takings implications.

G. Executive Order 12988 (Civil Justice Reform)

    This proposed rule has been reviewed under the applicable standards 
of section 3(b)(2) of E.O. 12988, ``Civil Justice Reform'' (61 FR 
4729). In general, the requirements of section 3(b)(2) are covered by 
the preamble discussion of this rule. Individual elements of the order 
are addressed below:
1. What is the Preemptive Effect, If Any, To Be Given to the 
Regulation?
    This proposed rule would have the same preemptive effect as other 
standards adopted pursuant to SMCRA. To retain primacy, States have to 
adopt and apply standards for their regulatory programs that are no 
less effective than those set forth in OSM's rules. Any State law that 
is inconsistent with or that would preclude implementation of this rule 
would be subject to preemption under section 505 of SMCRA and its 
implementing regulations at 30 CFR 730.11. To the extent that this rule 
might ultimately result in the preemption of State law, the provisions 
of SMCRA are intended to preclude inconsistent State laws and 
regulations unless they provide for more stringent land use or 
environmental controls and regulations. This approach is established in 
SMCRA and has been judicially affirmed.

[[Page 4859]]

2. What Is the Effect on Existing Federal Laws or Regulations, If Any, 
Including All Provisions Repealed, Circumscribed, Displaced, Impaired, 
or Modified?
    This proposed rule would modify the implementation of SMCRA as 
described in the preamble. It is not intended to modify the 
implementation of any other Federal statute. The preamble discussion 
specifies the Federal regulatory provisions that would be affected by 
this rule.
3. Does the Rule Provide a Clear and Certain Legal Standard for 
Affected Conduct Rather Than a General Standard, While Promoting 
Simplification and Burden Reduction?
    As discussed in the preamble, the standards proposed in this rule 
are as clear and certain as practicable, given the complexity of the 
topics covered, the mandates of SMCRA and the legislative history of 
section 522(e) of SMCRA.
4. What is the Retroactive Effect, if Any, To Be Given to This 
Regulation?
    This proposed rule is not intended to have retroactive effect.
5. Are Administrative Proceedings Required Before Parties May File Suit 
in Court? Which Proceedings Apply? Is the Exhaustion of Administrative 
Remedies Required?
    Since this rule is only in proposed form, these questions are not 
applicable. However, if the rule is adopted as proposed, the following 
answers would apply:
    No administrative proceedings are 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). However, administrative procedures 
must be exhausted prior to any judicial challenge to the application of 
this rule. In situations involving OSM application of this rule, 
applicable administrative procedures may be found at 30 CFR 775.11 and 
43 CFR part 4. In situations involving State regulatory authority 
application of provisions analogous to those contained in this rule, 
applicable administrative procedures are set forth in each State 
regulatory program.
6. Does the Rule Define Key Terms, Either Explicitly or By Reference to 
Other Regulations or Statutes That Explicitly Define Those Items?
    This proposed rule defines the term ``valid existing rights.'' 
Other terms important to the understanding of this rule are set forth 
in 30 CFR 700.5, 701.5 and 761.5.
7. 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 Office of Management and 
Budget, 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 matter.

    Author: The principal author of this proposed rule is Dennis G. 
Rice, Rules and Legislation, Office of Surface Mining Reclamation 
and Enforcement, 1951 Constitution Avenue, NW., Washington, DC 
20240; Telephone (202) 208-2829.

List of Subjects

30 CFR Part 740

    Public lands, Mineral resources, Reporting and recordkeeping 
requirements, Surety bonds, Surface mining, Underground mining.

30 CFR Part 745

    Intergovernmental relations, Public lands, Mineral resources, 
Reporting and recordkeeping requirements, Surface mining, Underground 
mining.

30 CFR Part 761

    Historic preservation, National forests, National parks, National 
trails system, National wild and scenic rivers system, Surface mining, 
Underground mining, Wilderness areas, Wildlife refuges.

30 CFR Part 772

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

    Dated: April 30, 1996.
Bob Armstrong,
Assistant Secretary, Land and Minerals Management.

    For the reasons set forth in the preamble, the Department is 
proposing to amend 30 CFR Parts 740, 745, 761, and 772 as set forth 
below:

PART 740--GENERAL REQUIREMENTS FOR SURFACE COAL MINING AND 
RECLAMATION OPERATIONS ON FEDERAL LANDS

    1. The authority citation for Part 740 continues to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq. and 30 U.S.C. 181 et seq.

    2. In Sec. 740.4, paragraphs (a)(4) and (a)(5) are revised to read 
as follows:


Sec. 740.4  Responsibilities.

    (a) * * *
    (4) Determining whether a person possesses valid existing rights to 
conduct surface coal mining operations on Federal lands within the 
areas specified in paragraphs (a)(1) and (a)(2) of Sec. 761.11 of this 
chapter.
    (5) Determining whether there are significant recreational, timber, 
economic, or other values that may be incompatible with surface coal 
mining operations on any Federal lands within the boundaries of any 
national forest under Sec. 761.11(a)(2) of this chapter.
    3. Section 740.10 is revised to read as follows:


Sec. 740.10  Information collection.

    (a) In accordance with 44 U.S.C. 3501 et seq., the Office of 
Management and Budget (OMB) has approved the information collection 
requirements of this part. The OMB clearance number is 1029-0027. This 
information is needed to implement section 523 of the Act, which 
governs surface coal mining operations on Federal lands. Persons 
intending to conduct such operations must respond to obtain a benefit.
    (b) OSM estimates that the public reporting burden for this part 
will average 26 hours per respondent, including time spent 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 these information collection requirements, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, 1951 Constitution Avenue, N.W., Washington, DC 20240; and the 
Office of Management and Budget, Office of Information and Regulatory 
Affairs, Attention: Interior Desk Officer, 725 17th Street, NW, 
Washington, DC 20503. Please refer to OMB Control Number 1029-0027 in 
any correspondence.
    4. In Sec. 740.11, paragraph (a) introductory text is revised and 
paragraph (g) is added to read as follows:


Sec. 740.11  Applicability.

    (a) Except as provided in paragraph (g) of this section, upon the 
approval of a State regulatory program under part 732 of this chapter 
or promulgation of a Federal regulatory program for a State pursuant to 
part 736 of this chapter, that program and this subchapter shall apply 
to:
* * * * *
    (g) Regardless of land ownership, the agency making the 
determination, or

[[Page 4860]]

State regulatory program provisions, the definition of valid existing 
rights in Sec. 761.5 of this chapter applies to all decisions on 
requests for a determination of valid existing rights to conduct 
surface coal mining operations on lands within the boundaries of the 
areas specified in paragraphs (a)(1) and (a)(2) of Sec. 761.11 of this 
chapter.

PART 745--STATE-FEDERAL COOPERATIVE AGREEMENTS

    5. The authority citation for Part 745 continues to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq. and 30 U.S.C. 181 et seq.

    6. Section 745.10 is revised to read as follows:


Sec. 745.10  Information collection.

    (a) In accordance with 44 U.S.C. 3501 et seq., the Office of 
Management and Budget (OMB) has approved the information collection 
requirements of this part. The OMB clearance number is 1029-0092. This 
information is needed to implement section 523(c) of the Act, which 
allows States to regulate surface coal mining operations on Federal 
lands under certain conditions. States that desire to enter into 
cooperative agreements to do so must respond to obtain a benefit.
    (b) OSM estimates that the public reporting burden for this part 
will average 1,364 hours per respondent, including time spent 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 these information collection requirements, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, 1951 Constitution Avenue, N.W., Washington, DC 20240; and the 
Office of Management and Budget, Office of Information and Regulatory 
Affairs, Attention: Interior Desk Officer, 725 17th Street, NW, 
Washington, DC 20503. Please refer to OMB Control Number 1029-0092 in 
any correspondence.
    7. In Sec. 745.13, paragraphs (o) and (p) are revised to read as 
follows:


Sec. 745.13  Authority reserved by the Secretary.

* * * * *
    (o) Determine whether a person possesses valid existing rights to 
conduct surface coal mining operations on Federal lands within the 
areas specified in paragraphs (a)(1) and (a)(2) of Sec. 761.11 of this 
chapter; or
    (p) Determine whether there are significant recreational, timber, 
economic, or other values that may be incompatible with surface coal 
mining operations on any Federal lands within the boundaries of any 
national forest, as specified in Sec. 761.11(a)(2) of this chapter.

PART 761--AREAS DESIGNATED BY ACT OF CONGRESS

    8. The authority citation for Part 761 continues to read as 
follows:

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

    9. Section 761.5 is amended by removing the definition of ``surface 
coal mining operations which exist on the date of enactment'' and 
revising the definition of ``valid existing rights'' to read as 
follows:


Sec. 761.5  Definitions.

* * * * *
    Valid existing rights means the conditions under which a person 
may, subject to the requirements of the Act and the pertinent 
regulatory program, conduct surface coal mining operations on lands 
where 30 U.S.C. 1272(e) and Sec. 761.11 would otherwise prohibit such 
operations.
    (a) Except as provided in paragraph (b) of this definition, a 
person claiming valid existing rights must demonstrate that a legally 
binding conveyance, lease, deed, contract, or other document vests that 
person with the right, as of the date the land came under the 
protection of 30 U.S.C. 1272(e) and Sec. 761.11 of this chapter, to 
conduct the type of surface coal mining operations intended. 
Interpretation of the documents relied upon to establish the rights to 
which this paragraph applies must be based upon applicable State 
statutory or case law concerning interpretation of documents of this 
nature or, if no applicable State law exists, upon custom and generally 
accepted usage at the time and place that the documents came into 
existence. In addition, except as provided in paragraph (b) of this 
definition, any person claiming valid existing rights must demonstrate 
that one of the following conditions exists:
    (1) All State and Federal permits and other authorizations required 
to conduct surface coal mining operations had been obtained, or a good 
faith effort to obtain all necessary permits and authorizations had 
been made, before the date the land came under the protection of 
Sec. 761.11; or
    (2) The land is needed for and immediately adjacent to a surface 
coal mining operation for which all State and Federal permits and other 
authorizations required to conduct surface coal mining operations had 
been obtained, or a good faith effort to obtain all necessary permits 
and authorizations had been made, before the date the land came under 
the protection of Sec. 761.11.
    (b) A person claiming valid existing rights to use or construct an 
access or haul road, for use as part of surface coal mining operations, 
across the surface of lands protected by Sec. 761.11 must demonstrate 
one of the following:
    (1) The road was in existence on the date the land upon which it is 
located came under the protection of Sec. 761.11;
    (2) A right of way or easement for the road was properly recorded 
as of the date the land came under the protection of Sec. 761.11;
    (3) The regulatory authority had issued a permit for the access or 
haul road on the land in question as of the date the land came under 
the protection of Sec. 761.11; or
    (4) Valid existing rights exist under paragraph (a) of this 
definition.
    10. Section 761.10 is added to read as follows:


Sec. 761.10  Information collection.

    (a) In accordance with 44 U.S.C. 3501 et seq., the Officer of 
Management and Budget (OMB) has approved the information collection 
requirements of this part. The OMB clearance number is 1029-0102. The 
regulatory authority or other responsible agency will use this 
information to determine whether a person has valid existing rights or 
qualifies for one of the other waivers or exemptions from the general 
prohibition on conducting surface coal mining operations in the areas 
listed in section 522(e) of the Act. Persons seeking to conduct surface 
coal mining operations on these lands must respond to obtain a benefit 
in accordance with 30 U.S.C. 1272(e).
    (b) OSM estimates that the public reporting and recordkeeping 
burden for this part will average 2 hours per response under 
Sec. 761.12 and 14 hours per response under Sec. 761.13, including time 
spent reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. The burden for Sec. 761.13 includes 6 
hours for the person seeking the determination and 8 hours for the 
agency processing the request. Send comments regarding this burden 
estimate or any other aspect of these information collection and 
recordkeeping requirements, including suggestions for reducing the 
burden, to the Office of Surface Mining Reclamation and Enforcement,

[[Page 4861]]

Information Collection Clearance Officer, 1951 Constitution Avenue, 
N.W., Washington, DC 20240; and the Office of Management and Budget, 
Office of Information and Regulatory Affairs, Attention: Interior Desk 
Officer, 725 17th Street, NW, Washington, DC 20503. Please refer to OMB 
Control Number 1029-0102 in any correspondence.
    11. In Sec. 761.11, the section title is revised, paragraphs (a) 
through (g) are redesignated as paragraphs (a)(1) through (a)(7) and 
revised, the introductory test is redesignated as paragraph (a) 
introductory text and revised, paragraph (h) is removed, and a new 
paragraph (b) is added to read as follows:


Sec. 761.11  Areas where surface coal mining operations are prohibited 
or limited.

    (a) Unless a person has valid existing rights as determined in 
accordance with Sec. 761.13, no surface coal mining operation except 
those identified in paragraph (b) of this section may be conducted 
after August 3, 1977:
    (1) On any lands within the boundaries of:
    (i) The National Park System;
    (ii) The National Wildlife Refuge System;
    (iii) The National System of Trails;
    (iv) The National Wilderness Preservation System;
    (v) The Wild and Scenic Rivers System, including study rivers 
designated under Sec. 5(a) of the Wild and Scenic Rivers Act (16 U.S.C. 
1276(a)) or study rivers or study river corridors established in any 
guidelines promulgated pursuant to that Act; or
    (vi) National Recreation Areas designated by Act of Congress.
    (2) On any Federal lands within the boundaries of any national 
forest, except that operations on these lands (excluding lands within 
the boundaries of the Custer National Forest) may be permitted if the 
Secretary finds that there are no significant recreational, timber, 
economic, or other values that may be incompatible with surface coal 
mining operations; and:
    (i) Any surface operations and impacts will be incident to an 
underground coal mine; or
    (ii) With respect to lands that do not have significant forest 
cover within national forests west of the 100th meridian, the Secretary 
of Agriculture has determined that surface mining is in compliance with 
the Act, the Multiple-Use Sustained Yield Act of 1960 (16 U.S.C. 528-
531), the Federal Coal Leasing Amendments Act of 1975 (30 U.S.C. 181 et 
seq.), and the National Forest Management Act of 1976 (16 U.S.C. 1600 
et seq.);
    (3) On any lands where the operation will adversely affect any 
publicly owned park or any place included in the National Register of 
Historic Places, unless the operation is jointly approved by the 
regulatory authority and the Federal, State, or local agency with 
jurisdiction over the park or place;
    (4) Within 100 feet, measured horizontally, of the outside right-
of-way line of any public road, except:
    (i) Where a mine access or haul road joins this right-of-way line, 
or
    (ii) When the regulatory authority (or the appropriate public road 
authority designated by the regulatory authority) allows the public 
road to be relocated or closed, or the area within the protected zone 
to be affected by the surface coal mining operation, after:
    (A) Providing public notice and opportunity for a public hearing in 
accordance with Sec. 761.12(d); and
    (B) Finding in writing that the interests of the affected public 
and landowners will be protected;
    (5) Within 300 feet, measured horizontally, of any occupied 
dwelling, except when:
    (i) The owner of the dwelling has provided a written waiver 
consenting to surface coal mining operations within the protected zone; 
or
    (ii) The part of the operation which is located closer than 300 
feet to the dwelling is an access or haul road that connects with an 
existing public road on the side of the public road opposite the 
dwelling;
    (6) Within 300 feet, measured horizontally, of any public building, 
school, church, community or institutional building, or public park; or
    (7) Within 100 feet, measured horizontally, of a cemetery, unless 
the cemetery is relocated in accordance with State law.
    (b) The prohibitions of paragraph (a) of this section do not apply 
to surface coal mining operations for which a valid permit, issued 
pursuant to Subchapter G of this chapter or an approved State 
regulatory program, existed when the land came under the protection of 
paragraph (a) of this section or section 522(e) of the Act (30 U.S.C. 
1272(e)), or to other validly authorized operations in existence on 
that date. This exemption applies only to lands upon which the 
permittee or operator had the right to enter and conduct the permitted 
or authorized surface coal mining operations as of the date the land 
comes under the protection of this section.
    12. Section 761.12 is amended by removing paragraph (h) and 
revising the section title, paragraphs (a) through (c), and the 
introductory text of paragraph (d) to read as follows:


Sec. 761.12  Coordination with permitting process; waiver requirements 
and procedures.

    (a) When the regulatory authority receives an administratively 
complete application for a permit for a surface coal mining operation 
or an administratively complete application for revision of the 
boundaries of a surface coal mining operation permit, the regulatory 
authority must review the application to determine whether the proposed 
surface coal mining operation would be located on any lands protected 
under Sec. 761.11(a). The regulatory authority must reject any portion 
of the application that would locate surface coal mining operations on 
those lands unless the applicant:
    (1) Qualifies for the existing operation exemption under 
Sec. 761.11(b);
    (2) Obtains a waiver or exception from the prohibitions of 
Sec. 761.11(a) in accordance with paragraphs (c) through (f) of this 
section; or
    (3) Has valid existing rights as determined in accordance with 
Sec. 761.13.
    (b) If the regulatory authority has difficulty determining whether 
an application reviewed under paragraph (a) of this section includes 
land within an area specified in Sec. 761.11(a)(1) or within the 
specified distance from a structure or feature listed in paragraph 
(a)(6) or (a)(7) of Sec. 761.11, the regulatory authority must request 
that the Federal, State, or local governmental agency with jurisdiction 
over the protected land, structure, or feature verify the location.
    (1) The request for location verification must include:
    (i) Relevant portions of the permit application;
    (ii) A notice that any response provided more than 30 days after 
receipt of the request for location verification will not necessarily 
be considered during the application review process; and
    (iii) A notice that, upon request, the agency will receive an 
additional 30 days to respond.
    (2) If the agency does not respond in a timely manner, the 
regulatory authority may make the necessary determination based on 
available information.
    (c) A person who intends to conduct surface coal mining operations 
on Federal lands within the boundaries of a national forest under the 
compatibility provisions of Sec. 761.11(a)(2) must submit to OSM a 
request that the Secretary make the findings required by 
Sec. 761.11(a)(2). If a person submits a request before preparing and 
submitting a permit application, the request must include sufficient 
information about the nature and location of the proposed

[[Page 4862]]

operation for the Secretary to evaluate the request and make adequately 
documented findings. The regulatory authority may not issue a permit 
for the proposed operation or approve a proposed boundary revision 
unless these findings have been made.
    (d) When a person proposes to relocate or close a public road, or 
to conduct surface coal mining operations (other than mine access and 
haul roads as provided in Sec. 761.11(a)(4)(i)) within 100 feet, 
measured horizontally, of the outside right-of-way line of a public 
road, the regulatory authority or public road authority designated by 
the regulatory authority must:
* * * * *
    13. Section 761.13 is added to read as follows:


Sec. 761.13  Submission and processing of requests for valid existing 
rights determinations.

    (a) Agency responsible for making valid existing rights 
determinations.
    (1) Except as provided in paragraph (a)(2) of this section, the 
regulatory authority will make valid existing rights determinations for 
all lands listed in Sec. 761.11(a).
    (i) In making these determinations, the regulatory authority must 
use the definition of valid existing rights in Sec. 761.5 for land 
within the boundaries of the areas specified in Sec. 761.11(a)(1).
    (ii) For all other lands, the regulatory authority must use the 
definition of valid existing rights in the applicable regulatory 
program.
    (2) OSM will make all determinations as to whether a person has 
valid existing rights to conduct surface coal mining operations on 
Federal lands within the areas specified in paragraphs (a)(1) and 
(a)(2) of Sec. 761.11. In making these determinations, OSM will use the 
definition of valid existing rights in Sec. 761.5.
    (b) What persons requesting valid existing rights determinations 
must submit. A person who, on the basis of valid existing rights, 
intends to conduct surface coal mining operations on lands listed in 
Sec. 761.11(a) must submit a request to the appropriate agency under 
paragraph (a) of this section. The request may be submitted with or 
without an application for a permit or boundary revision for those 
lands.
    (1) If the request is based on one of the standards for access and 
haul roads in paragraphs (b)(1) through (b)(3) of the definition of 
valid existing rights in Sec. 761.5, the requester must submit 
satisfactory documentation that:
    (i) The road existed on the date that the land upon which it is 
located came under the protection of Sec. 761.11;
    (ii) A right of way or easement for the road was properly recorded 
as of the date the land came under the protection of Sec. 761.11; or
    (iii) The regulatory authority had issued a permit for an access or 
haul road in that location as of the date the land came under the 
protection of Sec. 761.11.
    (2) If the request is based on the standards in paragraph (a) of 
the definition of valid existing rights in Sec. 761.5, the requester 
must submit:
    (i) A legal description of the land to which the request pertains;
    (ii) Complete documentation of the character and extent of the 
requester's current interests in the surface and mineral estates of the 
land to which the request pertains;
    (iii) A complete chain of title for the surface and mineral estates 
of the land to which the request pertains;
    (iv) A description of the nature and effect of each title 
instrument, including any provisions pertaining to the method of mining 
or mining-related surface disturbances and facilities;
    (v) Complete documentation of the nature and ownership of all 
property rights for the surface and mineral estates of the land to 
which the request pertains as of the date the land came under the 
protection of Sec. 761.11;
    (vi) If the coal interests have been severed from other property 
interests and the surface estate is held by a Federal agency, a title 
opinion or other official statement from the Federal agency confirming 
that the requester has a property right to conduct the type of surface 
coal mining operations intended;
    (vii) A description of the type and extent of surface coal mining 
operations planned, including the intended method of mining and any 
mining-related surface facilities, and an explanation of how the 
planned operations are consistent with State property law;
    (viii) If the request is based on the standard in paragraph (a)(2) 
of the definition of valid existing rights in Sec. 761.5, an 
explanation of why and how the coal is needed for the operation; and
    (ix) If the request is based on the standard in paragraph (a)(1) of 
the definition of valid existing rights in Sec. 761.5, the application 
dates and identification numbers and, if applicable, approval and 
issuance dates and identification numbers for any licenses, permits, 
and authorizations for surface coal mining operations on the land to 
which the request pertains. This requirement applies only to licenses, 
permits, and authorizations that the requester or predecessor in 
interest held or had applied for as of the date the land came under the 
protection of Sec. 761.11.
    (c) Notice and comment requirements and procedures.
    (1) When an agency receives a request for a determination of valid 
existing rights, the agency must publish a notice in a newspaper of 
general circulation in the county in which the land is located inviting 
comment on whether the request should be approved. If the request 
involves Federal lands within the boundaries of an area listed in 
paragraph (a)1) or (a)(2) of Sec. 761.11, OSM will publish a similar 
notice in the Federal Register. The notice must include:
    (i) The applicable standard(s) under the definition of valid 
existing rights in Sec. 761.5;
    (ii) The location of the land to which the request pertains;
    (iii) The name and address of the agency office to which comments 
should be addressed;
    (iv) The closing date of the comment period, which must be 
sufficient to afford interested persons a reasonable opportunity to 
prepare and submit comments;
    (v) A description of the property rights claimed and the basis for 
the claim;
    (vi) A description of the type of surface coal mining operations 
planned; and
    (vii) A description of the procedures the agency will follow in 
processing the request.
    (2) The agency must provide a copy of the notice to the owner of 
the structure or feature causing the land to come under the protection 
of Sec. 761.11(a).
    (3) If the land to which the request pertains involves severed 
estates or divided interests, the agency must make a reasonable effort 
to provide a copy of the notice to all owners of interest, both surface 
and mineral.
    (4) When a request pertains to land within the boundaries of an 
area protected under Sec. 761.11(a)(1) or 30 U.S.C. 1272(e)(1), the 
agency responsible for the VER determination must notify the agency 
with jurisdiction over the protected land and provide that agency 30 
days (with an option for a 30-day extension upon request) from receipt 
of the notification to comment. If the agency with jurisdiction over 
the land fails to respond in a timely manner, the agency responsible 
for the VER determination may make the determination in accordance with 
paragraph (d) of this section.
    (d) How a decision will be made.
    (1) The agency responsible for making the determination of valid 
existing

[[Page 4863]]

rights must review the materials submitted under paragraph (b) of this 
section, comments received under paragraph (c) of this section, and any 
other relevant information to determine whether the record supports a 
decision in favor of the requester. If not, the agency must notify the 
requester in writing, explaining the inadequacy of the record and 
requesting submittal, within a reasonable time, of any additional 
information the agency deems necessary to remedy the inadequacy.
    (2) Upon receipt of the requested information or other explanation, 
the responsible agency must determine whether the requester has 
demonstrated valid existing rights.
    (i) The decision document must explain how the requester has or has 
not satisfied all applicable elements of the definition of valid 
existing rights in Sec. 761.5. It must set forth the relevant findings 
of fact and conclusions and specify the reasons for the conclusions.
    (ii) If the underlying property rights are in dispute, the agency 
must defer a decision until the legal dispute is resolved.
    (3) After making a decision, the agency must:
    (i) Provide a copy of the decision to the requester and the owner 
of, or agency with jurisdiction over, the area or feature that caused 
the land to come under the protection of Sec. 761.11(a); and
    (ii) Publish notice of the decision in a newspaper of general 
circulation in the county in which the land is located. If the request 
includes Federal lands within an area listed in paragraph (a)(1) or 
(a)(2) of Sec. 761.11, OSM will publish notice of the decision in the 
Federal Register.
    (e) Administrative and judicial review. A determination under this 
section that a person has or does not have valid existing rights is 
subject to administrative and judicial review under Secs. 775.11 and 
775.13 of this chapter.

PART 772--REQUIREMENTS FOR COAL EXPLORATION

    14. The authority citation for Part 772 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq. and 16 U.S.C. 470 et seq.

    15. Section 772.10 is revised to read as follows:


Sec. 772.10  Information collection.

    (a) In accordance with 44 U.S.C. 3501 et seq., the Office of 
Management and Budget (OMB) has approved the information collection and 
recordkeeping requirements of this part. The OMB clearance number is 
1029-0033. OSM and State regulatory authorities use the information 
collected under this part to maintain knowledge of coal exploration 
activities, evaluate the need for an exploration permit, and ensure 
that exploration activities comply with the environmental protection, 
public participation, and reclamation requirements of parts 772 and 815 
of this chapter and section 512 of SMCRA (30 U.S.C. 1262). Persons 
seeking to conduct coal exploration must respond to obtain a benefit.
    (b) OSM estimates that the combined public reporting and 
recordkeeping burden for all respondents under this part will average 
11 hours per notice or application submitted, including time spent 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Specifically, OSM estimates that preparation 
of a notice of intent to explore under Sec. 772.11 will require an 
average of 10 hours, preparation and processing of an application for 
coal exploration under Sec. 772.12 will require an average of 103 
hours, compliance with Sec. 772.14 will require an average of 18 hours, 
and recordkeeping and information collection under Sec. 772.15 will 
require an average of approximately 1 hour per response. Send comments 
regarding this burden estimate or any other aspect of these information 
collection requirements, including suggestions for reducing the burden, 
to the Office of Surface Mining Reclamation and Enforcement, 
Information Collection Clearance Officer, 1951 Constitution Avenue, 
N.W., Washington, DC 20240; and the Office of Management and Budget, 
Office of Information and Regulatory Affairs, Attention: Interior Desk 
Officer, 725 17th Street, NW, Washington, DC 20503. Please refer to OMB 
Control Number 1029-0033 in any correspondence.
    16. Section 772.12 is amended by revising the section title and 
paragraphs (d)(2)(ii) and (d)(2)(iii) and adding paragraphs (b)(14) and 
(d)(2)(iv) to read as follows:


Sec. 772.12  Permit requirements for exploration that will remove more 
than 250 tons of coal or that will occur on lands designated as 
unsuitable for surface coal mining operations.

* * * * *
    (b) * * *
    (14) For the lands described in Sec. 761.11(a) of this chapter, a 
demonstration that one of the following conditions exists:
    (i) The exploration activities will not substantially disturb these 
lands.
    (ii) The owner of the coal possesses valid existing rights as that 
term is defined in Sec. 761.5 of this chapter. The demonstration of 
valid existing rights must be made in accordance with the requirements 
and procedures of Sec. 761.13 of this chapter. The demonstration and 
request for a determination of valid existing rights may be submitted 
in advance of the remainder of the coal exploration permit application. 
When the agency makes a determination in the absence of a permit 
application, the determination is subject to administrative and 
judicial review under Sec. 761.13(e) of this chapter.
    (iii) The exploration is needed for mineral valuation purposes or 
authorized by judicial order.
    (iv) The applicant has obtained a waiver or exception in accordance 
with paragraphs (c) through (f) of Sec. 761.12 of this chapter.
* * * * *
    (d) * * *
    (2) * * *
    (ii) Not jeopardize the continued existence of an endangered or 
threatened species listed pursuant to section 4 of the Endangered 
Species Act of 1973 (16 U.S.C. 1533) or result in the destruction or 
adverse modification of critical habitat of those species;
    (iii) Not adversely affect any cultural or historical resources 
listed on the National Register of Historic Places pursuant to the 
National Historic Preservation Act, as amended (16 U.S.C. 470 et seq. 
and Pub. L. 102-575), unless the proposed exploration has been approved 
by both the regulatory authority and the agency with jurisdiction over 
the resources to be affected; and
    (iv) Not substantially disturb any lands listed in Sec. 761.11(a) 
of this chapter unless the applicant has:
    (A) Obtained a waiver or exception in accordance with paragraphs 
(c) through (f) of Sec. 761.12 of this chapter;
    (B) Demonstrated the existence of valid existing rights in 
accordance with Sec. 761.13 of this chapter; or
    (C) Demonstrated that the disturbance is needed for mineral 
valuation purposes or is authorized by judicial order.
* * * * *
[FR Doc. 97-2184 Filed 1-30-97; 8:45 am]
BILLING CODE 4310-05-M