[Federal Register Volume 62, Number 168 (Friday, August 29, 1997)]
[Rules and Regulations]
[Pages 45714-45717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23106]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 917

[KY-211-FOR]


Kentucky Regulatory Program

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

ACTION: Final rule; approval of amendment.

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[[Page 45715]]

SUMMARY: OSM is approving a proposed amendment to the Kentucky 
regulatory program (hereinafter referred to as the ``Kentucky 
program'') under the Surface Mining Control and Reclamation Act of 1977 
(SMCRA). Kentucky proposed revisions to the Kentucky Revised Statutes 
(KRS) pertaining to reclamation contracts, coal processing waste, and 
penalty assessment. The amendment is intended to revise the Kentucky 
program to be consistent with the Federal regulations and SMCRA.

EFFECTIVE DATE: August 29, 1997.

FOR FURTHER INFORMATION CONTACT:
William J. Kovacic, Director, Lexington Field Office, 2675 Regency 
Road, Lexington, Kentucky 40503. Telephone: (606) 233-2896.

SUPPLEMENTARY INFORMATION:

I. Background on the Kentucky Program
II. Submission of the Proposed Amendment
III. Director's Findings
IV. Summary and Disposition of Comments
V. Director's Decision
VI. Procedural Determinations

I. Background on the Kentucky Program

    On May 18, 1982, the Secretary of the Interior conditionally 
approved the Kentucky program. Background information on the Kentucky 
program, including the Secretary's findings, the disposition of 
comments, and the conditions of approval can be found in the May 18, 
1982 Federal Register (47 FR 21404). Subsequent actions concerning 
conditions of approval and program amendments can be found at 30 CFR 
917.11, 917.13, 917.15, 917.16, and 917.17.

II. Submission of the Proposed Amendment

    By letter dated August 15, 1996, (Administrative Record No. KY-
1371) Kentucky submitted a proposed amendment to its program pursuant 
to SMCRA at its own initiative. Two bills were enacted in the regular 
session of the 1996 Kentucky General Assembly that amend KRS Chapter 
350. Senate Bill (SB) 231 creates a new subsection (3) of KRS 350.131 
and amends 350.150(1). Both subsections pertain to reclamation 
contracts. SB 231 also creates a new section of KRS Chapter 350 to 
address backstowing of coal processing waste. House Bill (HB) 764 
amends KRS 350.0301(1) and 350.990(1). These subsections pertain to 
cessation orders.
    OSM announced receipt of the proposed amendment in the September 4, 
1996, Federal Register (61 FR 46577), and in the same document opened 
the public comment period and provided an opportunity for a public 
hearing on the adequacy of the proposed amendment. The public comment 
period closed on October 4, 1996.
    During its review of the amendment, OSM identified concerns 
relating to the issuance of cessation orders and the assessment of 
penalties. OSM notified Kentucky of these concerns by letter dated May 
28, 1997 (Administrative Record No. KY-1389). By letter dated June 27, 
1997 (Administrative Record No. KY-1392), Kentucky responded to OSM's 
concerns by submitting additional clarifying information. Because the 
information was explanatory in nature and did not constitute any major 
revision to the Kentucky program, OSM did not reopen the comment 
period.

III. Director's Findings

    Set forth below, pursuant to SMCRA and the Federal regulations at 
30 CFR 732.15 and 732.17, are the Director's findings concerning the 
proposed amendment.

A. KRS 350.131(3)--Reclamation Contract

    Kentucky proposes to add new subsection (3) to allow the Natural 
Resources and Environmental Protection Cabinet (Cabinet) to negotiate 
and enter into a contract with a permit applicant to reclaim the 
disturbed area of a permit area in exchange for all or part of the 
forfeited bond funds if requested by the applicant. This applies to 
those situations where a bond is forfeited and a person subsequently 
applies for a permit overlapping all or part of the disturbed area. If 
the applicant proposes to overlap only a part of the disturbed area, 
the Cabinet may enter into a contract with the applicant to reclaim the 
overlap if it has retained a portion of the forfeited bond that is 
sufficient to reclaim the part of the disturbed area that is not 
overlapped. The applicant is not eligible if he/she has any ownership 
or control connection with the permittee. The Cabinet will determine 
the amount of forfeited bond fund to pay the applicant based upon the 
estimated cost to reclaim the overlap but the amount cannot exceed the 
forfeited bond amount collected. If the applicant obtains a permanent 
program permit overlapping a forfeited interim permit, any disturbances 
created in connection with the overlapping permit on areas that were 
disturbed under the forfeited permit may be covered under a contract 
and shall be reclaimed to permanent program standards. Areas where coal 
is not removed under the overlapping permit and the disturbances are 
for reclamation of the interim permit shall be reclaimed to interim 
program standards. If the applicant obtains a permanent program permit 
overlapping a forfeited interim permit, any new disturbances shall not 
be covered by a contract and shall be reclaimed to permanent program 
standards. No person is exempt from the permitting, bonding, and 
reclamation requirements of Chapter 350 and the surety retains the 
right to reclaim any permit or increment thereof to avoid bond 
forfeiture.
    While there is no Federal counterpart to the Kentucky proposal, the 
Director finds the proposed statute at KRS 350.131(3) not inconsistent 
with SMCRA and the Federal regulations.

B. KRS 350.150(1)--Award of Contract

    Kentucky proposes to revise subsection (1) to exempt contracts 
negotiated under KRS 350.131(3) from the requirement that reclamation 
contracts be awarded to the lowest responsible bidder upon competitive 
bids after reasonable advertisement.
    While there is no Federal counterpart to the Kentucky proposal, the 
Director finds the proposed statute at KRS 350.150(1) not inconsistent 
with SMCRA and the Federal regulations.

C. KRS Chapter 350 Section 3--Backstowing

    Kentucky proposes to add a new section (3) in which the General 
Assembly affirms the authorization of backstowing of coal processing 
and coal underground development waste as a disposal method under 
appropriate conditions. The General Assembly directs the Cabinet to 
negotiate improved coordination of State and Federal agencies in the 
review of backstowing or reinjection of coal processing waste 
consistent with State and Federal laws.
    The Director finds the proposed statute at KRS Chapter 350, Section 
3, not inconsistent with SMCRA and the Federal regulations at 30 CFR 
817.81(f).

D. KRS 350.0301(1)--Administrative Hearings

    Kentucky proposes to revise subsection (1) to permit a petitioner 
to contest the validity of an underlying notice of noncompliance in a 
timely filed demand for hearing to contest the validity of a cessation 
order issued for failure to abate the violation contained in the notice 
of noncompliance.
    While there is no Federal counterpart to the Kentucky proposal, the 
Director finds the proposed statute at KRS 350.0301(1) not inconsistent 
with SMCRA and the Federal regulations.

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E. KRS 350.990(1)--Civil Penalty Assessments

    Kentucky proposes to revise subsection (1) to require that a civil 
penalty of not more than $5000 be assessed for each violation in a 
noncompliance underlying an imminent danger cessation order. No 
separate civil penalty shall be assessed for the order.
    The Director finds that the proposed statute at 350.990(1) is no 
less stringent than section 518(a) of SMCRA and consistent with the 
Federal penalty assessment provisions at 30 CFR 845.14 and 845.15.

IV. Summary and Disposition of Comments

Public Comments

    The Director solicited public comments and provided an opportunity 
for a public hearing on the proposed amendment submitted on August 15, 
1996. Because no one requested an opportunity to speak at a public 
hearing, no hearing was held.
    One public comment was received. The commenter generally supported 
the provisions of Senate Bill 231. However, the provisions of House 
Bill 764 are inconsistent with SMCRA and the Federal regulations 
according to the commenter. The change to KRS 350.0301(1) which permits 
a petitioner to contest the validity of an underlying notice of 
noncompliance in a timely filed demand for hearing may, in the 
commenter's opinion, encourage an operator to delay compliance. The 
commenter also expressed concern that the fact of the underlying 
violation could be raised for the first time in a hearing on a 
cessation order even when the time for appealing the underlying notice 
of violation had lapsed without an appeal. The Director notes that in 
Harman Mining Corp. v. Office of Surface Mining Reclamation and 
Enforcement, 114 IBLA 291,300 (May 10, 1990), the Interior Board of 
Land Appeals held that the fact of a violation set out in a notice of 
violation may be contested in a proceeding to review a cessation order 
issued for failure to abate the notice of violation, as well as in 
civil penalty proceedings.
    The change to KRS 350.990(1) which requires that a civil penalty of 
not more that $5000 be assessed for each violation in a noncompliance 
underlying an imminent danger cessation order has three distinct 
problems according to the commenter. The first is that the provision 
appears to prevent the imposition of a separate civil penalty for the 
issuance of an imminent danger cessation order. The second is that the 
provision appears to cap the amount of penalty for underlying 
violations at $5000 per violation but does not allow for imposition of 
penalties on a daily basis. The third is that there are instances in 
which an imminent harm cessation order is issued in which there is no 
underlying notice of noncompliance or violation issued in conjunction 
with the cessation order. The commenter contends that, in those cases, 
no civil penalty would result according to the revised statute. In 
response to the commenter's first two concerns, the Director notes that 
Kentucky stated in its June 27, 1997, letter that KRS 350,990(1) 
provides for the assessment of a civil penalty of up to $5,000 for each 
violation cited in the underlying notice of noncompliance underlying 
the cessation order. The statute further provides that each day of a 
continuing violation may be deemed a separate violation for purposes of 
penalty assessment. Kentucky may assess a ``per violation/per day'' 
penalty whenever an imminent danger cessation order is issued. The 
mandatory 2-day assessment for a violation which continues for two or 
more days and which is assigned more than 70 points is not affected by 
the amendment as provided by 405 KAR 7:095, Section 5. KRS 350.990(1) 
requires that a civil penalty of not less than $750 be assessed for 
each day during which a violation is not abated within the time period 
prescribed in the failure to abate cessation order or notice of 
noncompliance. Kentucky does not interpret the language at KRS 
350.990(1) to prohibit the imposition of a separate civil penalty for 
each day during which the violation continues. In response to the 
commenter's third concern, the Director notes that Kentucky affirmed in 
its June 27, 1997, letter that it always issues an underlying notice of 
noncompliance and order for remedial measures along with the related 
imminent danger cessation order (see 405 KAR 12:020, section 3(2)(b)). 
KRS 350.990(1), as amended by HB 764, links the penalty assessment for 
the cessation order to the underlying notice of noncompliance. KRS 
350.130(1) and 405 KAR 12:020, Section 2, require that a notice of 
noncompliance be issued for any violation of the statutes, regulations, 
permit conditions, or any other applicable requirement. For these 
reasons, the Director finds the provisions of HB 764 to be no less 
stringent than SMCRA and consistent with the Federal regulations.

Federal Agency Comments

    Pursuant to 30 CFR 732.17(h)(11)(I), the Director solicited 
comments on the proposed amendment submitted on August 15, 1996, and 
revised on January 11, 1995, from various Federal agencies with an 
actual or potential interest in the Kentucky program. No comments were 
received.

Environmental Protection Agency (EPA)

    Pursuant to 30 CFR 732.17(h)(11)(ii), OSM is required to obtain the 
written concurrence of the EPA with respect to those provisions of the 
proposed program amendment that relate to air or water quality 
standards promulgated under the authority of the Clean Water Act (33 
U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq.).
    None of the revisions that Kentucky proposed to make in its 
amendment pertains to air or water quality standards. Therefore, OSM 
did not request EPA's concurrence.

V. Director's Decision

    Based on the above findings, the Director approves the proposed 
amendment as submitted by Kentucky on August 15, 1996.
    The Federal regulations at 30 CFR part 917, codifying decisions 
concerning the Kentucky program, are being amended to implement this 
decision. This final rule is being made effective immediately to 
expedite the State program amendment process and to encourage States to 
bring their programs into conformity with the Federal standards without 
undue delay. Consistency of State and Federal standards is required by 
SMCRA.

VI. Procedural Determinations

Executive Order 12866

    This rule is exempted from review by the Office of Management and 
Budget (OMB) under Executive Order 12866 (Regulatory Planning and 
Review).

Executive Order 12988

    The Department of the Interior has conducted the reviews required 
by section 2 of Executive Order 12988 (Civil Justice Reform) and has 
determined that, to the extent allowed by law, this rule meets the 
applicable standards of subsections (a) and (b) of that section. 
However, these standards are not applicable to the actual language of 
State regulatory programs and program amendments since each such 
program is drafted and promulgated by a specific State, not by OSM. 
Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and 30 
CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State 
regulatory programs and program amendments submitted by the States must 
be based solely on a determination of whether the submittal is 
consistent with SMCRA and

[[Page 45717]]

its implementing Federal regulations and whether the other requirements 
of 30 CFR parts 730, 731, and 732 have been met.

National Environmental Policy Act

    No environmental impact statement is required for this rule since 
section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency 
decisions on proposed State regulatory program provisions do not 
constitute major Federal actions within the meaning of section 
102(2)(C) of the National Environmental Policy Act (42 U.S.C. 
4332(2)(C)).

Paperwork Reduction Act

    This rule does not contain information collection requirements that 
require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 
3507 et seq.).

Regulatory Flexibility Act

    The Department of the Interior has determined that this rule will 
not have a significant economic impact on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
The State submittal which is the subject of this rule is based upon 
corresponding Federal regulations for which an economic analysis was 
prepared and certification made that such regulations would not have a 
significant economic effect upon a substantial number of small 
entities. Accordingly, this rule will ensure that existing requirements 
previously promulgated by OSM will be implemented by the State. In 
making the determination as to whether this rule would have a 
significant economic impact, the Department relied upon the data and 
assumptions for the corresponding Federal regulations.

Unfunded Mandates

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

List of Subjects in 30 CFR Part 917

    Intergovernmental relations, Surface mining, Underground mining.

    Dated: July 30, 1997.
Allen D. Klein,
Regional Director, Appalachian Regional Coordinating Center.

    For the reasons set out in the preamble, Title 30, Chapter VII, 
Subchapter T of the Code of Federal Regulations is amended as set forth 
below:

PART 917--KENTUCKY

    1. The authority citation for Part 917 continues to read as 
follows:

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

    2. Section 917.15 is amended in the table by adding a new entry in 
chronological order by ``Date of Final Publication'' to read as 
follows:


Sec. 917.15  Approval of Kentucky regulatory program amendments.

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  Original amendment submission                                                                                 
               date                   Date of final  publication                Citation/description            
----------------------------------------------------------------------------------------------------------------
                                                                                                                
   *                  *                  *                  *                  *                  *             
August 15, 1996..................  August 29, 1997................  KRS 350.131(3), 350.150(1), Chapter 350     
                                                                     Section 3, KRS 350.0301(1), 350.990(1).    
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[FR Doc. 97-23106 Filed 8-28-97; 8:45 am]
BILLING CODE 4310-05-M