[Federal Register Volume 62, Number 168 (Friday, August 29, 1997)]
[Rules and Regulations]
[Pages 45920-45931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22903]



[[Page 45919]]

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Part II





Department of the Interior





_______________________________________________________________________



Office of Surface Mining Reclamation and Enforcement



_______________________________________________________________________



30 CFR Part 870



Coal Moisture; Final Rule

  Federal Register / Vol. 62, No. 168 / Friday, August 29, 1997 / Rules 
and Regulations  

[[Page 45920]]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 870

RIN 1029-AB78


Coal Moisture

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

ACTION: Final rule.

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

EFFECTIVE DATE: This regulation is effective October 1, 1997. The 
incorporation by reference of certain publications listed in the 
regulations is approved by the Director of the Federal Register as of 
October 1, 1997.

FOR FURTHER INFORMATION CONTACT: Dr. Kewal Kohli, Office of Surface 
Mining Reclamation and Enforcement, 3 Parkway Center, Pittsburgh, PA 
15220; telephone (412) 937-2175.

SUPPLEMENTARY INFORMATION:

I. Background
II. Discussion of Final Rule and Responses to Comments
    A. Section 870.5--Definitions.
    B. Section 870.18--General rules for calculating excess 
moisture.
    C. Section 870.19--How to calculate excess moisture in HIGH-rank 
coals.
    D. Section 870.20--How to calculate excess moisture in LOW-rank 
coals.
III. Procedural Matters

I. Background

    Section 402(a) of the SMCRA requires all operators of coal mining 
operations subject to its provisions to pay a reclamation fee on each 
ton of coal produced. In December 1977, OSM first promulgated 
regulations to implement this provision (42 FR 62714, December 13, 
1977). Briefly, the regulations require that the Abandoned Mine Land 
(AML) fees must be paid on the actual gross weight of the coal, at the 
time of the first transaction (sale, transfer of ownership, or use) 
involving the coal. This regulation has been in effect basically 
unchanged since 1977. In 1982, OSM revised the regulatory language to 
clarify the point in time of fee determination and to stress that the 
actual gross weight of the coal must be used for fee calculation. At 
that time OSM also specifically noted that no fees were owed on 
impurities physically removed before the sale, transfer of ownership, 
or use. In 1988, OSM again revised this regulation to allow an operator 
who mined coal after July 1, 1988, to elect to take an allowance for 
moisture contained in the coal at the time of sale that is determined 
to be in excess of the inherent, or natural bed, moisture in the coal.
    Initially, OSM adopted the excess moisture allowance to address an 
inconsistency in the methods of determining coal weight under various 
Federal taxation requirements. At the time OSM proposed to amend its 
regulation to allow a deduction for excess moisture, the ASTM Committee 
on Coal and Coke, whose membership included representatives of the 
Internal Revenue Service (IRS) and OSM, was conducting a study to 
develop and/or confirm precision statements for the ASTM standard test 
method used to estimate the bed moisture in high-rank coals, ASTM 
D1412-85, as it applied to all coals. In a letter of November 18, 1987, 
the IRS submitted the following comment in response to the OSM 
proposal, ``the results of the ASTM or a similar study should be 
received before one test is prescribed for use by all taxpayers.''
    As an interim measure, until adequate and fully reliable testing 
procedures became available for coals of all ranks, OSM's 1988 adopted 
regulation incorporated a suggestion made by the IRS. OSM decided to 
rely on a facts and circumstances test to allow an operator to elect to 
take an allowance for excess moisture provided the operator could 
demonstrate, through competent evidence, that there was a reasonable 
basis for determining the existence and amount of excess moisture. 
OSM's standard of reasonableness required an operator to provide 
sufficient documentation to sustain the weight reduction. Although no 
specific time periods were given for testing, an operator was also 
required to prove that time frames chosen to measure the existence and 
amount of excess moisture were reasonable.
    The preamble to the 1988 rule discussed OSM's willingness to accept 
the ASTM standard test methods to determine inherent moisture, ASTM 
D1412-85, and total moisture, ASTM D3302-82, pending the availability 
of more suitable alternatives. OSM recognized that these tests were not 
always reliable for this purpose and acknowledged its willingness to 
accept other testing methods for some subbituminous and lignite coals. 
OSM also stated its intent to develop technical guidance to assist 
operators and to assure uniform application of the excess moisture 
allowance throughout the industry.
    The final rule which OSM adopted in 1988, at 30 CFR 870.18, allowed 
an operator to elect to reduce the weight of coal tonnage subject to 
reclamation fee payment by a percentage of excess moisture estimated to 
be contained in the coal at the time of fee assessment. OSM 
subsequently issued five AML Payer Letters to provide technical 
guidance to the coal industry and assist with the application of this 
regulation. OSM also published the guidance in the OSM Payer Handbooks.
    OSM's audits of excess moisture reduced tonnages find that 
operators frequently fail to conform to inherent moisture test 
procedures described in AML Payer Letters, and do not provide adequate 
support for procedures they do use. Some operators mining large volumes 
of low-rank coal base tonnage reductions on test data that is known to 
be unreliable.
    On December 3, 1996 (61 FR 64220), OSM published its proposal for 
revising the rule in the Federal Register. The public comment period 
closed on February 3, 1997.

II. Discussion of the Final Rule and Responses to Comments

    Five commenters commented on the proposed rule revision: two coal 
companies, a trade association, a law firm representing a coal company, 
and an industry consulting firm. The majority of the commenters 
supported the intent of consolidating previous guidance into a single 
rulemaking, but

[[Page 45921]]

expressed various concerns on specific issues.
    Based on the comments received, OSM is revising its regulations 
governing the excess moisture allowance to codify regulatory technical 
requirements as proposed, with some changes. The proposal incorporates 
by reference ASTM standards used for collecting and testing a coal 
sample as specified in 30 CFR 870.19(a), Table 1 and Table 2, and 30 
CFR 870.20(a), Tables 1, 2, and 3. The ASTM standards were published in 
the 1994 Annual Book of ASTM Standards, Volume 05.05. A copy of the 
ASTM standards is available for inspection at the OSM Headquarters 
Office, Office of Surface Mining Reclamation and Enforcement, 
Administrative Record, Room 101, 1951 Constitution Avenue, NW., 
Washington, DC, and at the Office of the Federal Register, 800 North 
Capitol St., Washington, DC. The rule establishes a frequency for using 
ASTM standard test methods on coals of all ranks, and adopts the method 
approved by the ASTM to establish inherent moisture in low-rank coal, 
the ASTM D1412-93, Appendix X1. Use of this procedure for low-rank coal 
will ensure excess moisture allowances taken on low-rank coals are on a 
comparable basis to those taken on high-rank coal, and all excess 
moisture allowances are fair and equitable. Definitions for high and 
low rank coal are provided. The rule also includes an option that 
provides operators with a method to calculate an allowance for the 
excess moisture present in as-shipped coal. This is of particular 
benefit when an operator sells large volumes of coal, and/or sells coal 
with a substantial variance between the total and inherent moisture.

A. Section 870.5--Definitions

    None of the commenters addressed this section, and the revised 
definitions for excess, inherent, and total moisture are being adopted 
as proposed. The definition for excess moisture is revised by 
including, by reference, a formula for use in calculating excess 
moisture in high and low-rank coals. The formula to be used for high-
rank coals is found in a new section 870.19 and the formula for low-
rank coals is found in a new section 870.20. The existing definition of 
inherent moisture is expanded to incorporate by reference the specific 
ASTM methods of sample collection and test procedures shown in section 
870.19, Table 2, Calculating INHERENT moisture percentage in HIGH-rank 
coals, and section 870.20, Table 2, and Table 3, Calculating INHERENT 
moisture percentage in LOW-rank coals. The existing definition of total 
moisture is expanded to incorporate by reference ASTM criteria in 
section 870.19, Table 1, for Calculating the TOTAL moisture percentage 
in HIGH-rank coals, and section 870.20, Table 1, for Calculating the 
TOTAL moisture percentage in LOW-rank coals. The expansion of the 
existing definitions to incorporate by reference specific ASTM sample 
collection methods and test procedures provides precise technical 
standards to facilitate operator compliance with OSM's requirements, 
and provides a consistent basis to calculate all excess moisture 
allowances.

B. Section 870.18--General Rules for Calculating Excess Moisture

    The modifications to 30 CFR 870.18, excess moisture content 
allowance at section 870.18(a), (b), and (c) are adopted as proposed. 
The previous section 870.18(a) required an operator to demonstrate 
through competent evidence that the basis for determining the existence 
and amount of excess moisture is reasonable. Section 870.18(b) required 
standard laboratory analyses for testing inherent and total moisture. 
Section 870.18(c) required an operator who blended coal mined from 
multiple seams prior to the initial sale, transfer, or use of the coal 
to test for variations in the inherent moisture amounts from different 
seams.
    This revision replaces the reasonableness standard found at section 
870.18(a), the generic laboratory test requirement at section 
870.18(b), and the requirement for a separate test of coal from each 
seam mined prior to blending the coal for sale, transfer of ownership 
or use at section 870.18(c). The revision also recognizes the distinct 
differences in high and low-rank coals in sections 870.19 and 870.20. 
Section 870.19 provides acceptable standards for collecting and testing 
a sample of high-rank coals to establish the percentage of inherent and 
total moisture contained in the coal, and calculate the excess moisture 
allowance. Section 870.20 provides like standards for calculating the 
excess moisture allowance for low-rank coals.
    Revised section 870.18(c) adds definitions to further explain the 
meaning of terms as they are used in new sections 870.19 and 870.20. 
``As-shipped coal'' and ``tipple coal'' is defined as the coal found at 
the mine or loading facility. A precise meaning for a ``channel 
sample'' and ``core sample'' is given and the definitions incorporate 
by reference the specific ASTM procedure used to take the particular 
kind of sample. The ``correction factor'' is added as the method used 
to establish the difference between the equilibrium moisture and 
inherent moisture in low-rank coals under section 870.20. ``Equilibrium 
moisture'' is defined as the method used to estimate the inherent 
moisture in all coals, and ASTM D1412 and ASTM D1412, Appendix X1, are 
incorporated by reference. Types of ``high-rank coals'' and ``low-rank 
coals'' are defined to explain how these terms are used throughout 
sections 870.5 and 870.18-20.

C. Section 870.19--How To Calculate Excess Moisture in HIGH-Rank Coals

    The new section 870.19, which provides standard criteria for an 
operator to use to establish excess moisture in high-rank coals, is 
being adopted as proposed. Table 1 includes the ASTM standard sample 
collection method, ASTM D2234-89, Standard Test Methods for Collection 
of a Gross Sample of Coal, that OSM will accept for use as the basis 
for calculating the percentage of total moisture in as-shipped high-
rank coals each day the coal is either shipped or used. Table 1 also 
provides the test procedure, ASTM D3302-91, Standard Test Method for 
Total Moisture in Coal, that would be acceptable for that purpose.
    Two commenters suggested that more than one test method be accepted 
for determining total moisture in high-rank coals. The prescribed test 
methodology is designed to provide operators with the most reliable 
means of determining the total moisture in the coals. While other 
methods are available, the results produced may be less accurate, and 
they are not incorporated as being acceptable in all cases. Operators 
wishing to use other methodologies should obtain prior OSM approval to 
avoid possible disallowance of their excess moisture amounts. The 
operator must demonstrate that the test used yields accurate results.
    One commenter opposed the requirement to test for total moisture 
each day coal is shipped or used because:

--It would represent an excessive burden for small to medium-sized 
operators who do not now test for total moisture every day they ship 
coal;
--The cost involved with testing for total moisture every day in many 
cases will either exceed or substantially diminish the value of the 
coal moisture deduction; and
--The previous regulation did not require it.

    The commenter recommended that one analysis of each stockpile of 
coal be allowed as an alternative to daily

[[Page 45922]]

testing. OSM has considered these comments, but is retaining the daily 
testing requirement. The basis for the coal moisture deduction is to 
recognize that coal operators generally are not compensated for the 
weight of excess moisture in the coal they ship, and therefore, should 
not be required to pay fees on that weight. The total moisture of the 
coal can vary significantly from day to day based on weather and other 
conditions. The commenter stated that a single test of each stockpile, 
if depleted in 10 days or less, would provide an average value of the 
total moisture percentage for the stockpile for each day that the coal 
was used or shipped. In OSM's view, such an approach will not 
adequately recognize the variations in day-to-day moisture amounts and 
tonnages shipped. The more this relationship is obscured, the less 
relevant it becomes in recognizing the weight of excess moisture for 
which the operator may not be compensated.
    OSM also recognizes that the cost of daily moisture tests could 
exceed the value of the excess moisture fee deduction that would be 
derived. For that reason, OSM emphasizes in section 870.18(a) that the 
operator may use the customer's test results on the shipped coal in 
support of an excess moisture deduction. It has been OSM's experience 
that the majority of buyers conduct such tests as part of their efforts 
to ensure quality. By obtaining copies of the test results and related 
records, the seller could avoid the expense of testing.
    The daily total moisture test results must be converted to 
quarterly figures to be reported to OSM on the OSM-1 Form, Coal 
Reclamation Fee Report. To calculate the quarterly total moisture 
percentage an operator should: (1) Multiply the daily total moisture 
percentage by the tonnage shipped or used that day, to find the daily 
total moisture tonnage; and, (2) add the daily total moisture tonnage 
for each day in the quarter; and, (3) add the daily tonnage shipped or 
used in the quarter, to find the total tonnage shipped or used during 
the quarter. Then, divide the sum of the daily total moisture tonnage, 
step (2), by the sum of the daily tonnage shipped or used in the 
quarter, step (3). This will result in the total moisture percentage in 
high-rank coals for the quarter which is reported on the Coal 
Reclamation Fee Report.
    Table 2 provides three methods for sampling high-rank coals, and 
testing the sample to determine the inherent moisture percentage that 
will be acceptable to OSM. To collect a coal sample directly from a 
coal seam an operator could use either a core or a channel sample 
method. If a core sample is collected the operator is required to 
collect the sample using procedures in ASTM D5192-91, Standard Practice 
for Collection of Coal Samples from Core and to test by ASTM D1412-93, 
Standard Test Method for Equilibrium Moisture of Coal at 96 to 97 
Percent Relative Humidity and 30 deg.C. If a channel sample is used, 
the operator is required to collect the sample using procedures in ASTM 
D4596-93, Standard Practice for Collection of Channel Samples of Coal 
in a Mine and to test by either ASTM D1412-93, Standard Test Method for 
Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity and 
30 deg.C, or ASTM D3302-91, Standard Test Method for Total Moisture in 
Coal. To collect a sample of blended coal, as-shipped coal, tipple 
coal, commingled coal, or coal from slurry ponds an operator will use 
procedures in ASTM D2234-89, Standard Test Methods for Collection of a 
Gross Sample of Coal and test by ASTM D1412-93, Standard Test Method 
for Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity 
and 30 deg.C to estimate the inherent moisture.
    An operator may select one of two options for timing inherent 
moisture tests, either quarterly or monthly. If a quarterly inherent 
moisture test is chosen, the operator must report the results of one 
inherent moisture test taken at any time during the quarter on the OSM-
1 form for the quarter in which the test was taken. If monthly inherent 
moisture testing is preferred, the operator must create a 24-month 
inherent moisture baseline during the first 24-months a coal seam is in 
continuous operation. To create the 24-month inherent moisture 
baseline, an operator must collect and test one sample in each month of 
the calendar quarter. The quarterly inherent moisture percentage 
reported to OSM for each of the first 8 quarters a seam is in 
continuous operation is then based on a weighted average of the 3-
monthly inherent moisture tests results from each quarter. To determine 
the quarterly weighted average inherent moisture percentage an operator 
would then: (1) Multiply the inherent moisture percentage for one month 
by the number of tons produced or shipped in that month to find the 
monthly inherent moisture tonnage; (2) add the inherent moisture 
tonnage determined in (1) for each of the 3 months to find the 
quarterly inherent moisture tonnage; (3) divide the inherent moisture 
tonnage found in (2) by the total number of tons produced or shipped 
during the three months of the quarter; and, (4) report the weighted 
average percentage determined in (3) for the quarter to OSM on the OSM-
1 form. After the first 24-months, an operator would use an updated 
rolling average percentage to report inherent moisture percentages for 
all subsequent quarters in which a coal seam is continuously mined. The 
rolling average percentage would be calculated by: Adding the results 
of one inherent moisture test of one coal sample collected during every 
12-month period to the inherent moisture percentages for the preceding 
23 tests, and dividing the sum of these tests by 24.
    Section 870.19(a) provides instruction on how an operator would 
calculate the excess moisture in high-rank coals by using one of two 
methods. One method involves the simple subtraction of the inherent 
moisture percentage from the total moisture percentage as it is found 
in the existing rule. OSM expects that most operators of small to 
medium size mines would likely prefer to continue to use this method. A 
new alternative formula is added as a second method in section 
870.19(a) that allows an adjustment in the excess moisture calculation 
for a percentage of inherent moisture contained in the as-shipped coal. 
Some operators who either mine a large volume of coal, or mine coal 
with a significant variance in total and inherent moisture, have 
requested OSM's approval to use this formula for calculating a tonnage 
reduction for excess moisture. OSM is now providing this option as an 
alternative to the existing formula used to determine the excess 
moisture percentage. The excess moisture percentage found in section 
870.19(a) is multiplied by the tonnage sold, transferred, or used 
during the quarter to determine the excess moisture reduced tonnage for 
the quarter under section 870.19(b).

D. Section 870.20--How To Calculate Excess Moisture in LOW-Rank Coals

    A new section 870.20, which provides standard criteria for an 
operator to use to establish excess moisture in low-rank coals, is 
being adopted with changes. Table 1 includes the ASTM standard sample 
collection procedure, ASTM D2234-89, Standard Test Methods for 
Collection of a Gross Sample, and test procedure, ASTM D3302-91, 
Standard Test Method for Total Moisture in Coal, OSM will accept for 
use as the basis for calculating the percentage of total moisture in as 
shipped low-rank coals each day the coal is either shipped or used.
    The daily total moisture test results must be converted to 
quarterly figures to be reported to OSM on the OSM-1, Coal

[[Page 45923]]

Reclamation Fee Report. To calculate the quarterly total moisture 
percentage an operator must: (1) Multiply the daily total moisture 
percentage by the tonnage shipped or used that day, to find the daily 
total moisture tonnage; (2) add the daily total moisture tonnage for 
each day in the quarter; and, (3) add the daily tonnage shipped or used 
in the quarter, to find the total tonnage shipped or used during the 
quarter. Then, divide the sum of the daily total moisture tonnage, step 
(2), by the sum of the daily tonnage shipped or used in the quarter, 
step (3). This will result in the total moisture percentage in low-rank 
coal for the quarter which would be reported by the OSM-1, Coal 
Reclamation Fee Report.
    Table 2 provides instructions on how an operator will determine the 
inherent moisture percentage of coal mined from one or more benches of 
low-rank coals by: collecting one sample of as-shipped coal each month 
of the calendar quarter using procedure ASTM D2234-89, Standard Test 
Methods for Collection of a Gross Sample of Coal; and testing each 
sample for equilibrium moisture by ASTM D1412-93, Standard Test Method 
for Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity 
and 30 deg.C.
    The operator would calculate the inherent moisture percentage to 
report to OSM for the quarter by averaging the results from the 3 
monthly equilibrium moisture tests, and adding the correction factor.
    Table 3 provides the method an operator is required to use to 
establish the correction factor during the first quarter an excess 
moisture allowance is taken on low-rank coals mined from a bench or 
multiple benches. The correction factor is found by using procedures in 
ASTM D1412-93 Appendix X1, Standard Test Method for Equilibrium 
Moisture of Coal at 96 to 97 Percent Relative Humidity and 30 deg.C to 
collect 15 samples of coal from a freshly exposed, unweathered coal 
seam face during the quarter. All 15 samples would be tested for 
inherent moisture and equilibrium moisture as required by ASTM D1412-93 
Appendix X1, Standard Test Method for Equilibrium Moisture of Coal at 
96 to 97 Percent Relative Humidity and 30 deg.C.
    In the proposed rule, we stated that 5 samples had to be taken in 
each month of the first quarter for a total of 15 samples. Three 
commenters suggested a variety of alternatives, including allowing 
companies to:

--Perform a single annual collection of 20 samples;
--Collect all 15 samples in a single month; or
--Take 20 to 30 samples annually.

    The OSM-1 forms reporting tonnage and moisture amounts are to be 
filed for each calendar quarter. The purpose of the samples is to help 
determine the appropriate moisture amount for the coal shipped or used 
in the calendar quarter being reported. As a result, it is not feasible 
to delay the sampling and testing beyond that quarter. In response to 
the commenters, however, we have revised the final rule to state that 
the sampling and testing need not be done until the first quarter a 
deduction is taken, and that all 15 samples may be taken anytime during 
the quarter rather than 5 each month. This is also designed to address 
some commenters' concerns that sampling on some days during the quarter 
may be difficult due to harsh weather.
    The operator is required to establish the correction factor for the 
first quarter and all later quarters by: averaging the 15 inherent 
moisture test results; averaging the 15 equilibrium moisture test 
results; and, subtracting the average inherent moisture from the 
average equilibrium moisture.
    Three commenters also suggested that a regression formula be 
allowed to determine the correction factor rather than simple 
subtraction of the average equilibrium moisture from the average 
inherent moisture. Generally, regression analysis is a statistical 
approach which can be used to determine inherent moisture based on its 
relationship to possibly several other variables of coal content, such 
as ash, Btu, and equilibrium moisture. We examined this approach and 
found that it would require sampling for every variable used in the 
analysis and a substantially greater number of tests to produce 
reliable results. We also found it difficult to specify all the 
different variables that should be considered in every situation. As a 
result, we are not incorporating a regression approach into the final 
rule. If an operator elects to use a method other than that provided in 
the rule, the operator should obtain prior OSM approval to avoid having 
to revert to the simple subtraction method.
    One commenter objected to calculating a correction factor for each 
bench as we originally proposed, pointing out that multiple benches may 
be mined simultaneously. We have revised the requirement in the final 
rule to allow an average correction factor to be calculated and applied 
when such situations exist. The correction factor could be changed at 
any time provided new samples are taken and all procedures shown in 
Table 3 are repeated.

III. Procedural Matters

Federal Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, Public Law 
104-13, OSM requested comments from the public and the Office of 
Management and Budget (OMB) on the information collections contained in 
the proposed rulemaking. Commenters were asked to address: (a) Whether 
the proposed collection of information is necessary for the proper 
performance of OSM, including whether the information will have 
practical utility; (b) the accuracy of OSM's estimate of the burdens of 
the proposed collection of information; (c) ways to enhance the 
quality, utility, and clarity of the information to be collected; and 
(d) ways to minimize the burden of collection on the respondents, 
including the use of automated collection techniques or other forms of 
information technology. Comments received on the information collection 
requirements in the proposed rule have been addressed in the preamble 
above:
    Title: Abandoned mine reclamation fund--fee collection and coal 
production reporting: 30 CFR part 870.
    OMB Control Number: 1029-0090.
    Abstract: Section 402 of the Surface Mining Control and Reclamation 
Act of 1977 requires operators of coal mining operations to pay a 
reclamation fee to the Secretary for deposit in the Abandoned Mine 
Reclamation Fund for the purpose of reclaiming lands mined and left 
abandoned, or inadequately reclaimed, prior to the Act's effective 
date. Reclamation fees are to be paid on each ton of coal produced.
    Sections 870.18, 870.19, and 870.20 of the regulations allow an 
operator to take an excess moisture content allowance when calculating 
the amount of reclamation fees that are owed. To substantiate the 
calculated moisture deduction claimed, an operator (or other entity 
responsible for the payment of the reclamation fee) is required to 
document by standard laboratory analysis the excess moisture content 
for each coal seam mined. This documentation must be updated as 
necessary to establish the continuing validity of the excess moisture 
content allowance taken by the operator.
    Need For and Use: The information submitted will be used by OSM 
auditors to verify an operator's compliance with Section 402 of the Act 
and the requirements of the regulation at 30 CFR 870.18, 870.19, and 
870.20. During an audit, operators must substantiate how the 
calculation for excess moisture was determined. Response to this 
collection of information is required to obtain a

[[Page 45924]]

benefit and is held confidential under the Freedom of Information Act.
    Operators must retain their records for a 6-year period to allow 
for the audit of tax records. Courts have ruled that the AML fee is an 
excise tax. The applicable provision of the Energy Policy Act of 1992 
(Section 2515) extended the fee through 2004.
    Respondents: Approximately 1,050 coal mining operators who take the 
coal moisture deduction allowance.
    Total Annual Burden: OSM estimates that 2 hours will be required to 
prepare and maintain the documentation for audit purposes per 
respondent. The total annual burden is estimated to be 2,100 hours.

Executive Order 12988 on Civil Justice Reform

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

Executive Order 12866

    This rule has been determined to be significant under Executive 
Order 12866 and has been reviewed by the Office of Management and 
Budget.
    The rule is not considered economically significant under section 
3(f)(1) of Executive Order 12866 and will not have a significant 
economic effect on the coal mining industry, or on regional or national 
economies. OSM is providing a viable methodology that will enable coal 
mine operators to calculate the correct allowance for excess moisture. 
OSM is not attempting to specify any given amount, or percentage, as an 
excess moisture allowance. For that reason it is not possible to 
predict the cost that this revision will have in terms of the amount of 
the additional AML fees that the industry will pay and the government 
collect or the industry save and the government not collect. Based on 
AML tonnages reported, and the total moisture allowances taken for 
1996, the industry saved approximately $5,729,000 in terms of the 
tonnage reported. With regard to benefits, the rule revision will 
ensure that all excess moisture allowances are fair and equitable. 
OSM's revision also includes an option that will provide operators with 
a method to calculate an allowance for the inherent moisture present in 
as-shipped coal. This will be of particular benefit when an operator 
sells large volumes of coal, and/or sells coal with a substantial 
variance between the total and inherent moisture.

Regulatory Flexibility Act

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

Unfunded Mandates Reform Act

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

National Environmental Policy Act

    OSM has prepared an environmental assessment (EA) of this rule and 
has made a Finding of No Significant Impact (FONSI) on the quality of 
the human environment under section 102(2)(C) of the National 
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4332(2)(C). The EA 
and FONSI are on file in the OSM Administrative Record.
    Author: The principal author of this rule is Dr. Kewal Kohli, 
Mining Engineer, Office of Surface Mining, U.S. Department of the 
Interior, 3 Parkway Center, Pittsburgh, PA 15220. Inquiries with 
respect to the rule should be directed to Dr. Kohli at the address and 
telephone specified under FOR FURTHER INFORMATION CONTACT. 

List of Subjects in 30 CFR Part 870

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

    Dated: July 2, 1997.
Bob Armstrong,
Assistant Secretary, Land and Minerals Management.

    Accordingly, 30 CFR part 870 is amended as set forth below:

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

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

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

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


Sec. 870.5  Definitions.

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


Sec. 870.18  General rules for calculating excess moisture.

    If you are an operator who mined coal after June 1988, you may 
deduct the weight of excess moisture in the coal to determine 
reclamation fees you owe under 30 CFR 870.12(b)(3)(i). Excess moisture 
is the difference between total moisture and inherent moisture. To 
calculate excess moisture in HIGH-rank coal, follow Sec. 870.19. To 
calculate excess moisture in LOW-rank coal, follow Sec. 870.20. Report 
your calculations on the OSM-1 form, Coal Reclamation Fee Report, for 
every calendar quarter in which you claim a deduction. Some cautions:
    (a) You or your customer may do any test required by Secs. 870.19 
and 870.20. But whoever does a test, you are to keep test results and 
all related records for at least six years after the test date.
    (b) If OSM disallows any or all of an allowance for excess 
moisture, you must submit an additional fee plus interest computed 
according to Sec. 870.15(c) and penalties computed according to 
Sec. 870.15(f).
    (c) The following definitions are applicable to Secs. 870.19 and 
870.20. ASTM standards D4596-93, Standard Practice for Collection of 
Channel Samples of Coal in a Mine; D5192-91, Standard Practice for 
Collection of Coal Samples from Core; and, D1412-93,

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Standard Test Method for Equilibrium Moisture of Coal at 96 to 97 
Percent Relative Humidity and 30 deg.C are incorporated by reference as 
published in the 1994 Annual Book of ASTM Standards, Volume 05.05. The 
Director of the Federal Register approved this incorporation by 
reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Each 
applicable ASTM standard is incorporated as it exists on the date of 
the approval, and a notice of any change in it will be published in the 
Federal Register. You may obtain copies from the ASTM, 100 Barr Harbor 
Drive, West Conshohocken, Pennsylvania 19428. A copy of the ASTM 
standards is available for inspection at the Office of Surface Mining 
Reclamation and Enforcement, Administrative Record, Room 101, 1951 
Constitution Avenue, NW., Washington, DC, or at the Office of the 
Federal Register, 800 North Capitol St., NW., Suite 700, Washington, 
DC.
    (1) As-shipped coal means raw or prepared coal that is loaded for 
shipment from the mine or loading facility.
    (2) Blended coal means coals of various qualities and predetermined 
quantities mixed to control the final product.
    (3) Channel sample means a sample of coal collected according to 
ASTM standard D4596-93 from a channel extending from the top to the 
bottom of a coal seam.
    (4) Commingled coal means coal from different sources and/or types 
combined prior to shipment or use.
    (5) Core sample means a cylindrical sample of coal that represents 
the thickness of a coal seam penetrated by drilling according to ASTM 
standard D5192-91.
    (6) Correction factor means the difference between the equilibrium 
moisture and the inherent moisture in low rank coals for the purpose of 
Sec. 870.20(a).
    (7) Equilibrium moisture means the moisture in the coal as 
determined through ASTM standard D1412-93.
    (8) High-rank coals means anthracite, bituminous, and subbituminous 
A and B coals.
    (9) Low-rank coals means subbituminous C and lignite coals.
    (10) Slurry pond means any natural or artificial pond or lagoon 
used for the settlement and draining of the solids from the slurry 
resulting from the coal washing process.
    (11) Tipple coal means coal from a mine or loading facility that is 
ready for shipment.
    4. Sections 870.19 and 870.20 are added to read as follows:


Sec. 870.19  How to calculate excess moisture in HIGH-rank coals.

    Here are the requirements for calculating the excess moisture in 
high-rank coals for a calendar quarter. ASTM standards D2234-89, 
Standard Test Methods for Collection of a Gross Sample of Coal; D3302-
91, Standard Test Method for Total Moisture in Coal; D5192-91, Standard 
Practice for Collection of Coal Samples from Core; D1412-93, Standard 
Test Method for Equilibrium Moisture of Coal at 96 to 97 Percent 
Relative Humidity and 30 deg.C; and, D4596-93, Standard Practice for 
Collection of Channel Samples of Coal in a Mine are incorporated by 
reference as published in the 1994 Annual Book of ASTM Standards, 
Volume 05.05. The Director of the Federal Register approved this 
incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR 
part 51. Each applicable ASTM standard is incorporated as it exists on 
the date of the approval, and a notice of any change in it will be 
published in the Federal Register. You may obtain copies from the ASTM, 
100 Barr Harbor Drive, West Conshohocken, Pennsylvania 19428. A copy of 
the ASTM standards is available for inspection at the Office of Surface 
Mining Reclamation and Enforcement, Administrative Record, Room 101, 
1951 Constitution Avenue, NW., Washington, DC, or at the Office of the 
Federal Register, 800 North Capitol St., NW., Suite 700, Washington, 
DC.
    (a)(1) Calculate the excess moisture percentage using one of these 
equations:
[GRAPHIC] [TIFF OMITTED] TR29AU97.000

    (2) EM equals excess moisture percentage. TM equals total as-
shipped moisture percentage calculated according to Table 1 of this 
section. IM equals inherent moisture percentage calculated according to 
Table 2 of this section.
    (b) Multiply the excess moisture percentage by the tonnage from the 
bonafide sales, transfers of ownership, or uses by the operator during 
the quarter.

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

    Here are the requirements for calculating the excess moisture in 
low-rank coals for a calendar quarter. ASTM standards D2234-89, 
Standard Test Methods for Collection of a Gross Sample of Coal; D3302-
91, Standard Test Method for Total Moisture in Coal; and, D1412-93, 
Standard Test Method for Equilibrium Moisture of Coal at 96 to 97 
Percent Relative Humidity and 30 deg.C are incorporated by reference as 
published in the 1994 Annual Book of ASTM Standards, Volume 05.05. The 
Director of the Federal Register approved this incorporation by 
reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Each 
applicable ASTM standard is incorporated as it exists on the date of 
the approval, and a notice of any change in it will be published in the 
Federal Register. You may obtain copies from the ASTM, 100 Barr Harbor 
Drive, West Conshohocken, Pennsylvania 19428. A copy of the ASTM 
standards is available for inspection at the Office of Surface Mining 
Reclamation and Enforcement, Administrative Record, Room 120, 1951 
Constitution Avenue, NW., Washington, DC, or at the Office of the 
Federal Register, 800 North Capitol St., NW., Suite 700, Washington, 
DC.
    (a)(1) Calculate the excess moisture percentage using one of these 
equations:
[GRAPHIC] [TIFF OMITTED] TR29AU97.001

    (2) EM equals excess moisture percentage. TM equals total as-
shipped moisture percentage calculated according to Table 1 of this 
section. IM equals inherent moisture percentage calculated according to 
Tables 2 and 3 of this section.
    (b) Multiply the excess moisture percentage by the tonnage from the 
bona fide sales, transfers of ownership, or uses by the operator during 
the quarter.

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[FR Doc. 97-22903 Filed 8-28-97; 8:45 am]
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