[Federal Register Volume 63, Number 191 (Friday, October 2, 1998)]
[Rules and Regulations]
[Pages 53252-53260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26491]



[[Page 53251]]

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Part IV





Department of the Interior





_______________________________________________________________________



Office of Surface Mining Reclamation and Enforcement



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30 CFR Part 917



Surface Coal Mining and Reclamation Operations on Federal Lands; State-
Federal Cooperative Agreements; Kentucky; Final Rule

  Federal Register / Vol. 63, No. 191 / Friday, October 2, 1998 / Rules 
and Regulations  

[[Page 53252]]



DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 917

[KY-214-FOR]


Surface Coal Mining and Reclamation Operations On Federal Lands; 
State-Federal Cooperative Agreements; Kentucky

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

ACTION: Final rule.

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SUMMARY: The Governor of the Commonwealth of Kentucky and the Secretary 
of the Department of the Interior (Secretary) are entering into a 
cooperative agreement between the Department of the Interior and the 
Commonwealth of Kentucky for the regulation of surface coal mining and 
reclamation operations on Federal lands within Kentucky. The 
cooperative agreement provides for the regulation of surface coal 
mining and reclamation operations on Federal lands in Kentucky under 
the permanent regulatory program. The cooperative agreement is 
authorized by section 523(c) of the Surface Mining Control and 
Reclamation Act of 1977 (SMCRA).

EFFECTIVE DATE: November 2, 1998.

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

SUPPLEMENTARY INFORMATION:
I. Background on the Kentucky Program
II. Submission of the Cooperative Agreement
III. Director's Findings
IV. Approval of the Cooperative Agreement
V. Summary and Disposition of Comments
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, 917.15, 917.16, and 917.17.

II. Submission of the Cooperative Agreement

    By letter dated May 2, 1997, (Administrative Record No. KY-1387) 
from the Commissioner of the Natural Resources and Environmental 
Protection Cabinet (NREPC), Kentucky submitted a request for a State-
Federal cooperative agreement pursuant to 30 CFR 745.11.
    OSM announced receipt of the proposed cooperative agreement in the 
June 4, 1997, Federal Register (62 FR 30540), and in the same document 
opened the public comment period and provided an opportunity for a 
public hearing on the adequacy of the proposed cooperative agreement. 
The public comment period closed on July 7, 1997. OSM received two 
requests for an extension of the comment period on July 7, 1997. The 
requests were granted by the Director of the Appalachian Regional 
Coordinating Center in letters dated July 15, 1997. Both letters 
established a deadline of August 4, 1997, to receive the comments.

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 cooperative agreement.
    Under 30 CFR 745.11(f), the Director, OSM, must make the following 
three findings before recommending to the Secretary that the Department 
of the Interior enter into a cooperative agreement with a State.
    1. The Director finds that the Commonwealth of Kentucky has a State 
program which was conditionally approved and became effective upon 
publication in the Federal Register on May 18, 1982 (47 FR 21404).
    2. The Director finds that the State regulatory authority has 
sufficient budget, equipment and personnel to enforce fully the State's 
statutes and regulations for the regulation of surface coal mining and 
reclamation operations on Federal lands covered by the cooperative 
agreement in Kentucky.
    3. The Director finds that the Commonwealth of Kentucky has the 
legal authority to administer the cooperative agreement. This finding 
is made based on the written certification of the Attorney General of 
Kentucky and on the conditional approval of the State's permanent 
regulatory program.
    These findings were reported to the Secretary in a decision 
memorandum in which the Director, Office of Surface Mining, recommended 
approval of the cooperative agreement.

IV. Approval of the Cooperative Agreement

    Based on the conditional approval of the Kentucky State Program, 
the administrative record of this rulemaking, written comments, and the 
findings and recommendations of the Director, the Secretary has 
approved a permanent program cooperative agreement with the 
Commonwealth of Kentucky. The signed cooperative agreement is being 
published as part of this rulemaking and will be codified at 30 CFR 
Part 917. By its terms, the cooperative agreement becomes effective on 
October 1, 1998.

V. Summary and Disposition of Comments

    The Director solicited public comments and provided an opportunity 
for a public hearing on the proposed amendment. Written comments were 
received from members of the public, Federal agencies, and industry 
representatives. Because no one requested an opportunity to speak at a 
public hearing, no hearing was held. Several minor wording changes were 
made to the cooperative agreement in response to comments received. The 
changes are detailed in the disposition of comments below. The 
effective date of the cooperative agreement as described in Article II 
was changed to correspond to the Federal Government's fiscal year.

A. Public Comments

    One commenter stated that Kentucky was obligated to provide 
detailed information as to its present staffing and budget to allow OSM 
to make a finding pursuant to 30 CFR 745.11(f)(2) that the State 
regulatory authority (SRA) has sufficient budget, equipment and 
personnel to implement the cooperative agreement. That commenter also 
wanted the SRA to provide assurances that they would always have 
sufficient budget, equipment and personnel to do so especially in light 
of the anticipated increase in permitting activity that will likely 
attend the deregulation of electric utilities.
    The Director has found that sufficient information is available to 
make a determination that Kentucky has adequate budget, equipment and 
personnel levels to administer the cooperative agreement. OSM's annual 
evaluations of the Kentucky program showed that inspection frequency is 
being met, violations are being cited, permits are being approved in a 
timely manner and in accordance with the approved program, and citizen 
complaints are being addressed. While there are some minor issues 
identified in these program areas, none has been the result of 
inadequate budget, equipment and personnel. Additionally, OSM and the 
Kentucky Department for Surface Mining Reclamation and

[[Page 53253]]

Enforcement (DSMRE) have performed a review of Kentucky's program with 
respect to these areas (Administrative Record No. KY-1420). The review 
results indicated that duties arising from regulating the additional 
sites and acreage on Federal lands will not impact Kentucky's ability 
to enforce the provisions of SMCRA. The additional permitting duties 
arising from the acquisition will not require additional personnel as a 
majority of the Federal lands being mined are located adjacent to mines 
on private lands which are already permitted by DSMRE. The commenter 
believed that a staffing review should determine whether Kentucky has 
sufficient capability to review permits for the areas of prediction and 
prevention of subsidence impacts on natural resources, hydrology, and 
prevention of acid or toxic-forming drainage. The oversight agreement 
outlines the plans that OSM and DSMRE have for improving program 
performance in these areas. DSMRE has a total of seven geo-hydrologists 
on its staff, most (if not all) with Master's degrees. OSM believes 
that this is sufficient expertise for these program areas. In addition, 
for the last two years, both DSMRE and OSM have been collecting field 
data in order to verify that base line hydrologic data provided in 
permit applications truly reflect on-site conditions. The results of 
this study will determine any measures taken to improve the basis for 
permitting decisions based upon mine site hydrology.
    DSMRE and OSM have also been working closely together to inventory 
and map all acid mine discharges from sites mined both before and after 
the passage of SMCRA. This study is the beginning of an effort to 
enable permit reviewers to better predict acid mine problems by 
identifying areas where closer attention should be paid to this issue 
during the review process. Other studies, such as geologic data in 
permit applications, are being developed for future work.
    DSMRE and OSM are also studying the issue of outcrop barriers. As 
part of this study, adherence to subsidence control plans is also being 
reviewed. Based upon these on-going joint studies, OSM believes that 
the commenter's concerns in these areas are being adequately addressed.
    As for assurances that budget, equipment and personnel will always 
remain adequate, 30 CFR 745.11(f)(2) does not require that this finding 
be made. This section of the regulations only requires that a finding 
be made at the time the cooperative agreement is signed. Budget, 
equipment and personnel levels within the Kentucky program are, and 
will continue to be, items which OSM reviews annually. Should shortages 
in these areas jeopardize implementation of SMCRA on Federal lands, OSM 
can and will take appropriate action to cause such problems to be 
corrected or will revoke the cooperative agreement. Furthermore, too 
great a level of specificity as to budget, equipment and personnel 
levels within the body of the cooperative agreement would lead to the 
need to constantly amend the cooperative agreement as conditions change 
over time. The Director believes that determining resource needs on the 
possibility that additional permitting may be required as a result of 
the deregulation of the electric industry is ill-advised given the 
uncertainty the effects of deregulation will have.
    A commenter was concerned that the cooperative agreement must 
specifically identify the State agency that would have authority to 
implement the cooperative agreement. This concern evidently stems from 
past discussions concerning the possibility of transferring the 
responsibilities for program implementation from the DSMRE to another 
agency that would have authority not only over reclamation of mined 
lands but also over promotion of coal marketing. Article I.C of the 
cooperative agreement designates the NREPC acting through DSMRE as the 
agency responsible for administering the cooperative agreement. 
Additionally, a cooperative agreement is not the instrument whereby the 
SRA is approved by the Secretary. Any change to the SRA would have to 
be reviewed and denied or approved by the Secretary under a separate 
process which would also require an amendment to the cooperative 
agreement. The commenter also wanted a revision to Article I.C 
requiring the cooperative agreement to be reopened automatically for 
public comment and review if management of the Kentucky program is 
assigned to a different agency. Automatic reopening of the cooperative 
agreement is not required under 30 CFR 745.12.
    One commenter expressed concern with Article III of the cooperative 
agreement when there is a conflict between the definitions in the 
Federal and State programs. Specifically, the commenter mentioned 
right-of-entry and public roads. The cooperative agreement specifically 
indicates that in the event of a dispute, the definitions in the 
approved State program will apply. However, when Kentucky implements 
provisions of its approved program in a manner which is inconsistent 
with the Federal standard, OSM's regulations, policies and procedures 
establish remedial actions designed to ensure State implementation that 
is consistent with the Federal requirements. OSM is already aware of 
the issues in question and is requiring Kentucky to amend its approved 
program accordingly. In the interim, should any instance of these 
issues arise, on either State or Federal lands, OSM will take 
appropriate actions to ensure compliance with the approved program. OSM 
does not think it would be appropriate to impose time commitments upon 
Kentucky as suggested by the commenter. Such issues are more 
appropriately handled within the context of the State program amendment 
process.
    A commenter also suggests that the terms ``Kentucky State Program'' 
or ``State Program'' as used in Article I.A of the cooperative 
agreement are not specific enough to distinguish between the approved 
State Program and some other law or regulation adopted by the State but 
not approved by OSM. The comment has merit as a means of increasing 
clarity. Accordingly, the Cooperative agreement has been modified to 
use the terms ``Approved Kentucky State Program'' or the ``Approved 
State Program'' in lieu of ``Kentucky State Program'' or ``State 
Program''.
    One commenter suggested that the annual reporting required under 
Article V.C of the proposed cooperative agreement in compliance with 30 
CFR 745.12(d) be, instead, required at least quarterly. The rationale 
given was that increased reporting would ensure that minimum inspection 
frequency and other required actions were occurring on Federal lands. 
Additionally, the commenter believes that public notice and review of 
the State management of the Federal lands program should be solicited 
on an annual basis. OSM conducts an active oversight program in 
Kentucky that focuses on examining the SRA's ability to meet the goals 
of SMCRA and the implementing regulations including meeting minimum 
inspection frequency. The oversight process will continue after the 
cooperative agreement becomes effective and will be expanded to include 
the SRA's activities on Federal lands. OSM will not rely solely on the 
data provided by the SRA to determine adherence to the approved 
program. Data from oversight collected throughout the year will also be 
used. The Director has found there to be no benefit to requiring more 
frequent reporting of data in light of the ongoing oversight process. 
Increased reporting frequency can be required should it

[[Page 53254]]

appear that a more frequent report would enhance or ensure compliance 
with the cooperative agreement.
    A commenter suggested that OSM should provide public notice and 
solicit public review on Kentucky's management of this Federal lands 
cooperative agreement. The Federal regulations at 30 CFR Part 733 
provide ample opportunity for citizens concerned with the 
implementation of SMCRA to petition the Director for review of a 
program. In addition, OSM Directive REG-8 solicits public participation 
in all aspects of its oversight program. Anyone wishing to assist OSM 
and Kentucky in overseeing implementation of this cooperative agreement 
need only take advantage of these opportunities.
    One commenter listed several actions contemplated under the 
cooperative agreement which he felt would require preparation of 
environmental documentation under the National Environmental Policy Act 
(NEPA). He expressed an opinion that the cooperative agreement should 
specifically State that NEPA documentation be provided on each of these 
actions. These actions, and OSM's opinion as to NEPA requirements, are 
as follows:
     Review of applicable portions of the permit application 
package for compliance with non-delegated responsibilities under SMCRA 
and for compliance with other Federal laws, executive orders, and 
regulations. Where a cooperative agreement is in place, the permit 
application package will be submitted to OSM and the State. The State 
will be responsible for review and approval of the SMCRA permit 
application. However, OSM will continue to be responsible for ensuring 
compliance with other applicable Federal laws, regulations and orders 
not otherwise covered under the SMCRA review. These actions will not be 
delegated to the State, therefore, there is no reason to discuss NEPA 
requirements in the context of this cooperative agreement.
     Designation of Federal lands as unsuitable for mining 
under Subchapter F. Designation of Federal lands as unsuitable for 
mining cannot be delegated to any State under a cooperative agreement. 
That function remains OSM's responsibility. As this function cannot be 
delegated by the cooperative agreement, there would be no need to here 
discuss OSM's responsibilities for NEPA compliance with regard to this 
function.
     Development of land use management plans for Federal lands 
where the surface is federally-owned. Neither OSM nor the Commonwealth 
of Kentucky administers Federally-owned lands. Neither agency has any 
authority to develop land use management plans for such lands. The 
cooperative agreement cannot give OSM or Kentucky the authority to do 
so. Any compliance with NEPA in the development of such plans would be 
the responsibility of the Federal agency designated as the land 
management agency.
     Approval and determination of post-mining land uses for 
Federal lands where the surface estate is Federally owned. 
Determination of the post-mining land use is part of the overall permit 
review and approval process. However, it is a duty reserved to the 
Secretary pursuant to 30 CFR 745.13(k). Therefore, any NEPA 
documentation required will be provided.
     Evaluation of the State administration and enforcement of 
the approved cooperative agreement. Since this function is reserved to 
the Secretary, pursuant to 30 CFR 745.13(m), any applicable NEPA 
responsibilities are also reserved to the Secretary.
     Determination of valid existing rights (VER) with respect 
to Federal surface lands and Federal coal. Section 702(d) of SMCRA 
expressly provides that ``implementation [not just promulgation] of the 
Federal lands programs, pursuant to section 523 of this Act, shall not 
constitute a major action within the meaning of section 102(2)(C) of 
the National Environmental Policy Act.'' 30 CFR 740.13(b)(3)(iii) 
requires NEPA documentation, among other supplemental information, for 
permitting actions involving Federal lands when OSM is the regulatory 
authority or when the permit involves leased Federal coal (thus 
necessitating preparation of a mining plan under the Mineral Leasing 
Act, which is subject to NEPA). However, in the latter case, only the 
mine plan approved by the Secretary, not the permit issued by the 
State, would be subject to NEPA. Also, NREPC will assume responsibility 
for making VER determinations under Section 522(e) (3), (4) and (5). 
These determinations are part of the permit application review process 
delegated to the NREPC, pursuant to Article VI.A of the cooperative 
agreement, first paragraph, last sentence. Section 523(c) of SMCRA, 
which pertains to Federal lands, reserves to the Secretary the 
authority to designate Federal lands as unsuitable pursuant to section 
522. However, section 523(c) pertains to the designation process 
conducted pursuant to section 522(b); it does not pertain to VER 
determinations, which are carried out under section 522(e). Therefore, 
SMCRA allows OSM to delegate VER determinations to the SRA. The Federal 
regulations, at 30 CFR 745.13(o), do reserve 522(e)(1) and (e)(2) 
determinations to the Secretary, but are silent as to VER 
determinations made pursuant to 522(e)(3), (4) and (5). As discussed 
above, these three VER determinations fall within the general 
delegation of permit review authority made by the Secretary to NREPC 
under Article VI.A of the cooperative agreement. Because these 
determinations are to be made by the NREPC as part of the permitting 
process, they are State actions, rather than Federal actions, and are 
therefore not subject to NEPA requirements.
     Finding of no significant values incompatible with mining 
as required by Section 522(e)(2). As with lands unsuitable 
designations, this function remains the responsibility of the Federal 
government, and the cooperative agreement has no impact upon the 
Government's obligation under NEPA in performing this function.
    Finally, OSM notes that 30 CFR 745.13(b) provides that compliance 
with NEPA is a duty reserved to the Secretary and cannot be delegated 
to a State through a cooperative agreement.
    One commenter wanted assurances that Kentucky's laws at KRS 224.01-
040, referred to by the commenter as ``environmental audit privilege 
legislation'', could not be used as a means under Article V.C of the 
proposed agreement to block disclosure of information required to be 
submitted under SMCRA. A reading of KRS 224.01-040 does not provide any 
indication that this statute has any effect upon KRS 350, the SMCRA 
approved Kentucky program. Discussions with officials of DSMRE reveal 
that the agency does not consider this statute to have any effect upon 
the approved program.
    Kentucky provided written clarification to that effect 
(Administrative Record # KY-1414). KRS 224 has no known effect on 
implementation of the approved Kentucky program. OSM has no authority 
to require any revision to these statutes unless they specifically 
impact the approved program.
    It was suggested that Article VI.C should specifically state that 
the time frame for OSM's review and comment does not begin until such 
time as the permit application package (PAP) has been determined to be 
administratively complete. For the sake of clarity, the cooperative 
agreement has been modified to reflect this suggestion.

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    One commenter expressed major concerns that the cooperative 
agreement did not specifically state that OSM had the authority to take 
appropriate enforcement actions in the event of an imminent danger or 
significant, imminent environmental harm; or Kentucky's failure to take 
appropriate actions on any violation referred to them by OSM via Ten-
Day Notice. OSM's authority to take appropriate actions is found at 30 
CFR Parts 843, 845, and 846. These provisions are all referenced under 
Article VIII. There are no provisions in the cooperative agreement that 
hinder or condition OSM's ability under these regulations to take 
appropriate action whenever warranted. There is no need to further 
specify OSM's enforcement authority under this cooperative agreement.
    The same commenter also requested that the cooperative agreement 
clarify that any enforcement action taken by OSM could not be 
judicially or administratively challenged in any State forum. This 
clarification is not necessary. The provisions for appealing Federal 
actions are clearly stated in 30 CFR 843.16. Adding additional language 
to this cooperative agreement would neither diminish nor strengthen 
these provisions.
    The same commenter also wished for clarification of the method of 
referral for citizen complaints submitted to OSM. The procedures for 
referring citizen complaints from OSM to the SRA are already delineated 
in SMCRA, the Federal regulations at 30 CFR 842.11 and 842.15, and 
under the provisions of OSM Directives INE-24, ``Response to Citizen 
Complaints in Primacy States'', dated May 26, 1987, and INE-35, ``Ten 
Day Notices'' dated October 19, 1990. Including these provisions in 
this cooperative agreement would neither augment nor detract from this 
function.
    There is no need to repeat these provisions within the body of the 
cooperative agreement, or to specifically reference these provisions. 
To do so would require a separate program amendment for this 
cooperative agreement every time one of these provisions should be 
revised or modified. OSM will add the phrase ``in accordance with OSM 
regulations, policies, and procedures'' to the end of the last 
paragraph in Article VII to clarify that this cooperative agreement 
does nothing to distinguish between the way in which citizen complaints 
on either State or Federal lands will be referred to the State.
    The same commenter also claimed that OSM was attempting under 
Article VII to impose a standard of ``just cause'' prior to conducting 
a Federal inspection on a citizen's complaint that alleged an imminent 
danger or significant, imminent environment hazard in place of the 
``reason to believe'' standard at 30 CFR 842.11(b)(1)(i). OSM has 
corrected this inadvertent change in phrases.
    One commenter suggested that since Kentucky's approved program does 
not allow self-bonding, all current Federal permits should be reviewed 
and all self-bonded operations be required to obtain sufficient bond in 
a form approved for acceptance in Kentucky. At this time, there are no 
permits that would be affected under this proposed cooperative 
agreement that are self-bonded. The one Federal permit that was bonded 
in this manner is currently covered under surety bonding. No action can 
be taken in response to this comment.
    One commenter suggested that the ``working agreements'' proposed 
under Article VI whereby implementation or compliance with other 
Federal laws may be delegated to Kentucky should become amendments to 
the cooperative agreement and thus subject to public scrutiny and 
review. The commenter stated that these working agreements and their 
ability to impact the implementation of these other Federal laws is a 
matter of significant public interest. For several reasons, OSM will 
not require that the ``working agreements'' anticipated under Article 
VI be made a part of this cooperative agreement. First, many of these 
working agreements will contain provisions which OSM has no authority 
to require or approve. Second, many of the provisions that will be part 
of these ``working agreements'' will pertain only to communications 
between Kentucky and other agencies. Third, one reason for not making 
these working agreements part of the cooperative agreement is to avoid 
the necessity of a formal amendment of this cooperative agreement for 
inevitable minor changes to the working agreements (such as the change 
of a contact person, address, or phone number). Fourth, implementation 
of the cooperative agreements, including any ``working agreements,'' 
will be subject to oversight. As previously stated, OSM Directive REG-8 
and the Federal regulations solicit public participation in all aspects 
of the oversight program. Anyone wishing to assist OSM and Kentucky in 
overseeing implementation of this cooperative agreement, or any working 
agreement developed to assist in its implementation, need only take 
advantage of this opportunity. OSM will not allow any provision to a 
``working agreement'' that would preclude or prevent implementation of 
any provision required by this cooperative agreement, SMCRA, applicable 
Federal regulations, or Kentucky's approved regulatory program.
    Two commenters from industry were of the opinion that OSM should 
require Kentucky to adopt self-bonding as part of its approved program. 
At this time, Kentucky's approved program does not have regulations 
that allow the acceptance of self-bonds. OSM can only require a program 
amendment when it determines that some provision of the approved State 
program would be less effective than SMCRA in obtaining compliance and 
adequate reclamation. The fact that Kentucky does not allow self-
bonding is not grounds for making such a decision. OSM will not require 
Kentucky to submit an amendment to the approved program to include this 
bonding provision. One of these commenters has met with Kentucky's 
DSMRE and OSM and has asked that Kentucky adopt regulations that would 
allow this bonding method. A record of this meeting has been placed 
into the Administrative Record as document number KY-1417. DSMRE has 
agreed to look into the possibility of such an amendment, but gave the 
requestor little indication that it would wish to adopt this form of 
bonding due to the potential liability it might impose upon the 
Commonwealth of Kentucky.
    Another commenter from industry stated that it supported the 
cooperative agreement but only if it allowed conversion of any existing 
Federal permits to State permits without having to go through a new 
review and approval process. OSM and Kentucky have already discussed 
this issue and a tentative working agreement has been reached wherein 
all Federal permits that have already been issued will be accepted by 
Kentucky without further review. There would, of course, be review and 
approval by the State for any amendments, revisions, renewals, or other 
permitting actions that take place after the cooperative agreement is 
in place. OSM anticipates that a working agreement will be in place 
with Kentucky upon final approval of the cooperative agreement.

B. Federal Agency Comments

    The U.S. Forest Service (USFS) stated that it interpreted 30 CFR 
740.4 to mean that OSM would retain responsibility for implementing 
NEPA requirements on Federal lands. Under 30 CFR 740.4(c)(7), OSM will 
remain responsible for the content of any documentation required under 
NEPA, or determining Federal actions to be taken on alternatives 
presented in such documents.

[[Page 53256]]

    The USFS also commented that the Federal land management agency 
should have approval authority on the adequacy of performance bonds. 
There are no provisions in SMCRA that would allow OSM or the SRA to 
delegate this responsibility to the land management agencies. In fact, 
30 CFR 800.4(c) and 800.14(a)(2) specify that the amount of bond shall 
be determined by the SRA. This does not mean that the USFS has no 
avenue to influence bonding amounts. Under 30 CFR 740.13(c)(5), the SRA 
cannot approve a permit, permit revision or renewal thereof without 
considering the comments of the Federal land management agency and 
including these comments in the record of permit decision. As the 
determination of bond is integral to any permitting decision, the USFS 
would have opportunity to assist in ensuring that adequate bonding was 
provided.
    The USFS stated that it supported the cooperative agreement but 
raised concerns stemming from past mining operations that adversely 
impacted Forest Service properties. They acknowledged and applauded 
ongoing efforts by Kentucky and OSM to address these concerns, and also 
requested that the cooperative agreement embody the intent to continue 
to ameliorate the problems caused by past mining abuses. It is OSM's 
opinion that remediation of past mining impacts to USFS property would 
best be handled between DSMRE and the USFS through a working agreement 
between these agencies. OSM will provide any assistance requested in 
developing such an agreement.
    The U.S. Army Corps of Engineers requested that it be kept apprised 
of inspections and be allowed to accompany inspectors, be provided 
copies of inspection reports and enforcement actions, be informed of 
actions taken on violations, be provided with copies of any changes to 
State laws, regulations or policies, and be notified of any changes in 
State personnel or organization that might impact implementation of the 
cooperative agreement. These requested provisions would best be handled 
between DSMRE and the Corps through a working agreement between these 
agencies. OSM will provide any assistance requested in developing such 
an agreement.
    The U.S. Fish and Wildlife Service (FWS) recommended that the 
cooperative agreement be withdrawn. The FWS believes that the current 
system of Federal review of permit applications on Federal lands is 
preferable to State reviews because State reviews have led to approvals 
of permits with defects, including: (1) regular placement of sediment 
control structures and fills within streams with watersheds smaller 
than 480 acres without mitigation; (2) failure to return the land to 
its original use, such as forest habitat; (3) regular variances from 
the 100-foot stream buffer zone requirement; and (4) failure to 
evaluate cumulative hydrologic impacts.
    Notwithstanding FWS's general opposition to this cooperative 
agreement, Section 523(c) authorizes such agreements providing for 
state regulation of surface coal mining and reclamation operations on 
Federal lands. Currently, we have Federal lands cooperative agreements 
with 12 other states. Under the Kentucky cooperative agreement, OSM 
will oversee state implementation of the Kentucky regulatory program to 
insure that mining and reclamation operations on Federal lands are in 
compliance with program requirements. OSM does note, that with regard 
to the laws and regulations of the Kentucky program approved pursuant 
to SMCRA, the state requirements were found to be no less stringent 
than SMCRA and no less effective than SMCRA's implementing regulations. 
In conducting oversight of Kentucky's implementation of this program, 
OSM has found that the Commonwealth is implementing its program in a 
manner consistent with SMCRA and the Federal regulations. Therefore, we 
do not agree with the FWS statement that the state regularly approves 
defective permits.
    With regard to FWS's concern over the regular placement of sediment 
structures and fills in streams without mitigation, it appears that 
FWS's objections are to state laws and regulations adopted pursuant to 
the Clean Water Act, over which OSM has no jurisdiction. Because of 
growing concerns in this area, an interagency working group has been 
established to review this issue and make recommendations as 
appropriate.
    The second concern of the FWS was failure to return the land to its 
original land use such as forest habitat. The Federal regulations at 30 
CFR 780.23(b)(2), 780.23(c), 816.133(c), and 816.133(d)(9) and the 
Kentucky equivalent, 405 KAR 8:030 Section 37(c), 8:030 Section 37(e), 
16:210 Section 4, and 20:060 Section 3(5), provide that an alternative 
postmining land use may be selected so long as the criteria at 30 CFR 
816.133(c) and the Kentucky equivalent, 405 KAR 16:210 Section 4, are 
met. These regulations and SMCRA at section 515 (30 U.S.C. 1265) allow 
land use changes so long as the new land use is a higher or better use 
than the pre-mining land use. They also require consultation with the 
landowner or the land management agency having jurisdiction over the 
land. The regulations clearly provide that landowner choice is an 
important factor in choosing the post mining land use.
    The third area of concern to the FWS was variances for stream 
buffer zones. The Federal regulations at 30 CFR 816.57 and the Kentucky 
equivalent, 405 KAR 16:060 Section 11, provide that the regulatory 
authority may authorize surface mining activities within 100 feet of a 
perennial or intermittent stream or through such streams. Before 
allowing such mining activities, however, the regulatory authority must 
make a finding that the activities will not cause or contribute to the 
violation of applicable State or Federal water quality standards, and 
will not adversely affect the water quantity and quality or other 
environmental resources of the stream. OSM's oversight of Kentucky's 
permitting activities indicates that the required findings are made 
before issuance of a permit allowing mining activities within stream 
buffer zones.
    The final concern expressed by FWS included failure to evaluate 
cumulative impacts. Federal regulations at 30 CFR 780.21(g) and the 
Kentucky equivalent, 405 KAR 8:010 Section 14(3), require the 
regulatory authority to provide an assessment of the probable 
cumulative hydrologic impacts (CHIA) of the proposed operation and all 
anticipated mining upon surface and ground water systems in the 
cumulative impact area. The CHIA must be sufficient to determine 
whether the proposed operation has been designed to prevent material 
damage to the hydrologic balance outside the permit area. Oversight 
activities have found that the CHIA is part of all mining permits 
issued by Kentucky. OSM has no evidence to find that material damage is 
occurring outside permit areas due to insufficient CHIA documentation. 
Absent any information to the contrary, OSM finds that Kentucky's 
permitting activities are not deficient in this area.
    The FWS also indicated its belief that because implementation of 
the cooperative agreement would constitute a major Federal action as 
defined by NEPA, development of an Environmental Impact Statement would 
be required. In addition, the FWS believes that formal consultation in 
accordance with Section 7 of the Endangered Species act is required. 
The resolution of NEPA issues has been discussed earlier in detail. 
Subsequent to receipt of the FWS's comments, a letter from the FWS 
(Administrative

[[Page 53257]]

Record # KY-1407) was received indicating that formal consultation is 
not required due to the programmatic biological opinion issued by the 
FWS to OSM on September 24, 1997.

VI. Procedural Determinations

1. Executive Order 12866--Regulatory Planning and Review

    This document is not a significant rule and is not subject to 
review by the Office of Management and Budget under Executive Order 
12866.
    (1) This rule will not have an effect of $100 million or more on 
the economy. It will not adversely affect in a material way the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities.
    (2) This rule will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency.
    (3) This rule does not alter the budgetary effects or entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients.
    (4) This rule does not raise novel legal or policy issues.

2. Regulatory Flexibility Act

    The Department of the Interior certifies 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.). 
This rule will establish a cooperative agreement between the Department 
of the Interior and the Commonwealth of Kentucky. The cooperative 
agreement does not impose any new substantive requirements on the coal 
industry, it merely authorizes the Commonwealth to regulate surface 
coal mining and reclamation activities on Federal lands in Kentucky in 
lieu of the Federal government.

3. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    a. Does not have an annual effect on the economy of $100 million or 
more. The rule only affects the Commonwealth of Kentucky and the costs 
of carrying out the functions under the cooperative agreement are 
offset by grants from the Federal government.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions because the rule does not impose any 
new requirements on the coal mining industry or consumers. The 
functions being performed by the State under the cooperative agreement 
are offset by grants from the Federal government.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises for 
the reasons stated above.

4. Unfunded Mandates

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State 
local or tribal governments or the private sector. The rule establishes 
a cooperative agreement at the request of the Commonwealth of Kentucky 
and will result in the delegation of authority to the State. A 
statement containing the information required by the Unfunded Mandates 
Reform Act (1 U.S.C. 1531, et seq.) is not required.

5. Executive Order 12630--Takings

    In accordance with Executive Order 12630, the rule does not have 
significant takings implications. The rule establishes a cooperative 
agreement at the request of the Commonwealth of Kentucky and will 
result in the delegation of authority to the State. A takings 
implication assessment is not required.

6. Executive Order 12612--Federalism

    In accordance with Executive Order 12612, the rule does not have 
significant Federalism implications to warrant the preparation of a 
Federalism Assessment. The rule establishes a cooperative agreement at 
the request of the Commonwealth of Kentucky and will result in a 
delegation of authority to the State. Therefore, a Federalism 
assessment is not required.
    7. Executive Order 12988--Civil Justice Reform
    In accordance with Executive Order 12988, the Office of the 
Solicitor has determined that this rule does not unduly burden the 
judicial system and meets the requirements of sections 3(a) and 3(b)(2) 
of the Order.

8. Paperwork Reduction Act

    This rule does not require an information collection from 10 or 
more parties and a submission under the Paperwork Reduction Act is not 
required. An OMB form 83-I is not required.

9. 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 the 
implementation of a Federal lands program pursuant to section 523 of 
SMCRA does not constitute a major Federal action within the meaning of 
section 102(2)(C) of the National Environmental Policy Act of 1969 (42 
U.S.C. 4332(2)(C)).

10. Authors

    The co-authors of this final rule are Dave Beam, Office of Surface 
Mining, Lexington Field Office, 2657 Regency Road, Lexington, KY 40503, 
telephone 606-233-2896, and Michael Bower, Office of Surface Mining, 
Appalachian Regional Coordinating Center, Three Parkway Center, 
Pittsburgh, PA 15220, telephone 412-937-2857.

List of Subjects in 30 CFR Part 917

    Intergovernmental relations, Surface mining, Underground mining.

    Dated: September 3, 1998.
Sylvia V. Baca,
Acting Assistant Secretary, Land and Minerals Management.
    Accordingly, 30 CFR part 917 is amended as follows:

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 917.30 is added to read as follows:


Sec. 917.30  State-Federal cooperative agreement.

Cooperative Agreement

    The Governor of the Commonwealth of Kentucky (the Governor) and 
the Secretary of the Department of the Interior (the Secretary) 
enter into a Cooperative Agreement (Agreement) to read as follows:

Article I: Introduction, Purpose, and Responsible Agencies

A. Authority

    This Agreement is authorized by Section 523(c) of the Surface 
Mining Control and Reclamation Act (Act), 30 U.S.C. 1273(c), which 
allows a State with a permanent regulatory program approved by the 
Secretary under 30 U.S.C. 1253, to elect to enter into an Agreement 
for the regulation and control of coal exploration operations not 
subject to 43 CFR Group 3400 and surface coal mining and reclamation 
operations on Federal lands. This Agreement provides for State 
regulation consistent with the Act, the Federal lands program (30 
CFR Chapter VII, Subchapter D) and the approved Kentucky State 
Program (Program) for surface coal mining and reclamation operations 
on Federal lands.

[[Page 53258]]

B. Purposes

    The purposes of this Agreement are to (a) foster Federal-State 
cooperation on the regulation of surface coal mining and reclamation 
operations and coal exploration operations not subject to 43 CFR 
Group 3400, (b) minimize intergovernmental duplication of effort, 
and (c) provide for uniform and effective application of the Program 
on all lands in Kentucky in accordance with the Act and the Program.

C. Responsible Administrative Agencies

    The Kentucky Natural Resources and Environmental Protection 
Cabinet (NREPC), acting through the Department for Surface Mining 
Reclamation and Enforcement (DSMRE), shall be responsible for 
administering this Agreement on behalf of the Governor. The Office 
of Surface Mining Reclamation and Enforcement (OSM) shall administer 
this Agreement on behalf of the Secretary.

Article II: Effective Date

    After being signed by the Secretary and the Governor, this 
Agreement shall be effective on October 1, 1998. This Agreement 
shall remain in effect until terminated as provided for in Article 
XI.

Article III: Definitions

    The terms and phrases used in this Agreement, which are defined 
in the Act, 30 CFR Parts 700, 701 and 740 and defined in the KRS 350 
and the rules and regulations promulgated pursuant to that Act, 
shall have the same meanings as set forth in said definitions. Where 
there is a conflict between the above referenced State and Federal 
definitions, the definitions used in the approved State Program will 
apply except in the case of a term which defines the Secretary's 
continuing responsibilities under the Act or other laws.

Article IV: Applicability

    In accordance with the Federal lands program, the laws, 
regulations, terms and provisions of the Program are applicable to 
Federal lands in Kentucky except as otherwise stated in this 
Agreement, The Act, 30 CFR 740.4 and 745.13 or other applicable 
Federal laws, Executive Orders or regulations.
    Orders and decisions issued by the NREPC in accordance with the 
Program that are appealable shall be appealed to the reviewing 
authority in accordance with the Program. Orders and decisions 
issued by the Secretary or his authorized agents that are appealable 
shall be appealed to the Department of the Interior's Office of 
Hearings and Appeals.

Article V: General Requirements

    The Governor and the Secretary affirm that they will comply with 
all provisions of this Agreement.

A. Authority of State Agency

    NREPC has and shall continue to have the authority under State 
law to carry out this agreement.

B. Funding

    Upon application by NREPC, and subject to appropriations, OSM 
will provide the State with funds to defray the costs associated 
with carrying out its responsibilities under this Agreement as 
provided in Section 705(c) of the Act and 30 CFR Part 735. Such 
funds will cover the full cost incurred by NREPC in carrying out 
those responsibilities. The amount of the grant will be determined 
using the procedures specified in the Federal Assistance Manual 
Chapter 3-10 and Appendix III.
    For purposes of this agreement, actual costs of NREPC's 
administration of its approved program on Federal lands in 
accordance with this agreement shall be that percentage of NRECP's 
total program expenditures during any specific grant period that 
equals the percentage of Federal lands within all lands under permit 
in the State of Kentucky for that specific grant period.
    If NREPC applies for a grant but sufficient funds have not been 
appropriated to OSM, OSM and NREPC will meet to decide upon 
appropriate measures that will insure that mining operations on 
Federal lands located in Kentucky are regulated in accordance with 
the approved Program. The NREPC also reserves the right to terminate 
this agreement should OSM be unable to adequately fund this program.

C. Reports and Records

    NREPC will make annual reports to OSM containing information 
with respect to compliance with terms of this Agreement pursuant to 
30 CFR 745.12(d).
    Upon request, NREPC and OSM will exchange information generated 
under this Agreement, except where prohibited by Federal or State 
law.
    OSM will provide NREPC with a copy of any final evaluation 
reports prepared concerning State administration and enforcement of 
this Agreement. NREPC comments on the report will be attached before 
being sent to the Congress or other interested parties.

D. Personnel

    NREPC shall have the personnel necessary to fully implement this 
Agreement in accordance with the provision of the Act, applicable 
regulations, the Federal lands program and the approved Program.

E. Equipment and Facilities

    NREPC will assure itself access to equipment, laboratories and 
facilities to perform all inspections, investigations, studies, 
tests and analyses that are necessary to carry out the requirements 
of this Agreement.

F. Permit Application Fees and Civil Penalties

    The amount of the fee accompanying an application for a permit 
for operations on Federal lands in Kentucky shall be determined in 
accordance with KRS 350.060 and Federal law. All permit fees and 
civil penalties collected from operations on Federal lands will be 
retained by the State. Permit fees shall be considered Program 
income. Civil penalties shall not be considered Program income. The 
financial status report submitted to OSM pursuant to 30 CFR 735.26 
shall include the amount of fees and civil penalties collected and 
attributable to Federal lands during the prior State fiscal year.

Article VI: Review of Permit Application Package

A. Responsibilities

    NREPC will assume primary responsibility for the analysis, 
review, and approval, disapproval, or conditional approval of the 
permit application component of the permit application package (PAP) 
required by 30 CFR 740.13 for surface coal mining and reclamation 
operations in Kentucky on Federal lands. NREPC will assume the 
responsibilities for review of permit applications to the extent 
authorized in 30 CFR 740.4(c)(1), (2), (3), (4), (6), and (7).
    For proposals to conduct surface coal mining operations 
involving leased Federal coal, OSM is responsible for preparing a 
mining plan decision document in accordance with 30 CFR 746.13 and 
obtaining the Secretary's approval.
    The Bureau of Land Management (BLM) is responsible for matters 
concerned exclusively with regulations under 43 CFR Group 3400.
    The Secretary reserves the right to act independently of NREPC 
to carry out responsibilities under laws other than the Act or 
provisions of the Act not covered by the Program, and in instances 
of disagreement over the Act and the Federal lands program. The 
Secretary will make determinations under the Act that cannot be 
delegated to the State, some of which have been delegated to OSM.
    Responsibilities and decisions which can be delegated to NREPC 
under other applicable Federal laws may be specified in working 
agreements between OSM and the State with the concurrence of any 
Federal agency involved and without amendment to this agreement.

B. Permit Application Package

    NREPC shall require an applicant proposing to conduct surface 
coal mining and reclamation operations on Federal lands to submit a 
PAP with an appropriate number of copies to NREPC. NREPC will 
furnish OSM, the Federal land management agency, and any other 
agency with jurisdiction or responsibility over Federal lands 
affected by operations proposed in the PAP with an appropriate 
number of copies of the PAP. The PAP will be in the form required by 
NREPC and will include any supplemental information required by OSM, 
the Federal land management agency, and any other agency with 
jurisdiction or responsibility over Federal lands affected by 
operations proposed in the PAP.
    At a minimum, the PAP will satisfy the requirements of 30 CFR 
740.13(b) and include the information necessary for NREPC to make a 
determination of compliance with the Program, and for OSM, the 
appropriate Federal land management agencies, and any other agencies 
with jurisdiction or responsibilities over Federal lands affected by 
operations proposed in the PAP to make determinations of compliance 
with applicable requirements of the Act, the Federal lands program, 
other Federal laws, Executive Orders, and regulations for which they 
are responsible.

[[Page 53259]]

C. Review Procedures

    NREPC will be the primary point of contact for applicants 
regarding the review of the PAP for compliance with the Program and 
State laws and regulations. OSM will review the applicable portions 
of the PAP for compliance with the non-delegated responsibilities of 
the Act and for compliance with the requirements of other Federal 
laws, Executive Orders, and regulations.
    OSM and NREPC will develop a work plan and schedule for PAP 
reviews that comply with the time limitations established by the 
approved State program, and each agency will designate a person as 
the Federal lands liaison. The Federal lands liaisons will serve as 
the primary points of contact between OSM and NREPC throughout the 
review process. Not later than 45 calendar days after receipt of an 
administratively complete PAP, unless a different schedule is agreed 
upon, OSM will furnish NREPC with its review comments on the PAP and 
specify any requirements for additional data.
    OSM and NREPC will coordinate with each other during the review 
process as needed. NREPC will send to OSM copies of any 
correspondence with the applicant and any information received from 
the applicant regarding the PAP.
    OSM will send to NREPC copies of all OSM correspondence which 
may have a bearing on the PAP.
    OSM will provide technical assistance to NREPC when requested, 
and will have access to NREPC files concerning operations on Federal 
lands. NREPC will keep OSM informed of findings made during the 
review process which bear on the responsibilities of OSM or other 
Federal agencies.

D. Coordination Between NREPC, OSM, and Other Federal Agencies

    NREPC will, to the extent authorized, consult with the Federal 
land management agency and BLM pursuant to 30 CFR 740.4(c)(2) and 
(3), respectively. NREPC will also be responsible for obtaining the 
comments and determinations of other agencies with jurisdiction or 
responsibility over the Federal lands affected by the operations 
proposed in the PAP. NREPC will request all Federal agencies to 
furnish their findings or any request for additional information to 
NREPC within 45 calendar days of the date of receipt of the PAP. OSM 
will, upon request, assist NREPC in obtaining such information.
    In accordance with 30 CFR 745.12(g)(2), where lands containing 
leased Federal coal are involved, NREPC will provide OSM, in the 
form specified by OSM in consultation with NREPC, with written 
findings indicating that each permit application is in compliance 
with the terms of the regulatory program and a technical analysis of 
each permit application to assist OSM in meeting its 
responsibilities under other applicable Federal laws and 
regulations.
    Where leased Federal coal is involved, OSM will consult with and 
obtain the concurrences of BLM, the Federal land management agency, 
and any other agency with jurisdiction or responsibility over the 
Federal lands affected by the operations proposed in the PAP as 
required to make its recommendation for the Secretary's decision on 
the mining plan.
    Where BLM contacts the applicant in carrying out its 
responsibilities under 43 CFR Group 3400, BLM will immediately 
inform NREPC of its actions and provide NREPC with a copy of 
documentation of all decisions within 5 calendar days.

E. Permit Application Decision and Permit Issuance

    NREPC will prepare a State decision package, including written 
findings and supporting documentation, indicating whether the PAP is 
in compliance with the Program. NREPC will make the decision on 
approval, disapproval, or conditional approval of the permit on 
Federal lands.
    Any permit issued by NREPC will incorporate any lawful terms or 
conditions imposed by the Federal land management agency, including 
conditions relating to post-mining land use, and will be conditioned 
upon compliance with the requirements of the Federal land management 
agency.
    NREPC may make a decision on approval, disapproval, or 
conditional approval of the permit on Federal lands in accordance 
with the Program prior to the necessary Secretarial decision on the 
mining plan when leased Federal coal is involved, provided that 
NREPC advises the operator in the permit that Secretarial approval 
of the mining plan must be obtained before the operator may conduct 
surface coal mining operations on the Federal lease. NREPC will 
reserve the right to amend or rescind any requirements of the permit 
to conform with any terms or conditions imposed by the Secretary in 
the approval of the mining plan.
    After making its decision on the PAP, NREPC will send a notice 
to the applicant, OSM, the Federal land management agencies, and any 
other agency with jurisdiction or responsibility over Federal lands 
affected by the operations proposed in the PAP. A copy of the permit 
and written findings will be provided to OSM upon request.

F. Review Procedures for Permit Revisions; Renewals; and Transfer, 
Assignment, or Sale of Permit Rights

    Any permit revision or renewal for a surface coal mining and 
reclamation operation on Federal lands will be reviewed and 
approved, or disapproved, by NREPC after consultation with OSM on 
whether such revision or renewal constitutes a mining plan 
modification pursuant to 30 CFR 746.18. OSM will inform NREPC within 
10 calendar days of receiving a copy of a proposed permit revision 
or renewal, whether the permit revision or renewal constitutes a 
mining plan modification.
    Transfer, assignment, or sale of permit rights on Federal lands 
shall be processed in accordance with the Program and 30 CFR 
740.13(e).

Article VII: Inspections

    NREPC will conduct inspections of all surface coal mining and 
reclamation operations on Federal lands, in accordance with 30 CFR 
740.4(c)(5) and the Program and prepare and file inspection reports 
in accordance with the Program. NREPC, subsequent to conducting any 
inspection pursuant to 30 CFR 740.4(c)(5), and in a timely fashion 
which will not exceed 45 calendar days, will file with OSM's 
Lexington Field Office a legible copy of the completed State 
inspection report.
    NREPC will be the point of contact and primary inspection 
authority in dealing with the operator concerning operations and 
compliance with the requirements covered by this Agreement, except 
as described hereinafter. Nothing in this Agreement will prevent 
inspections by authorized Federal or State land management agencies 
for purposes other than those covered by this Agreement. The 
Department of the Interior acting through OSM, the Federal land 
management agency or any other agency with jurisdiction or 
responsibility over Federal lands to be affected under the proposed 
PAP, may conduct any inspections necessary to comply with 
obligations under 30 CFR Parts 842 and 843 and any laws other than 
the Act.
    OSM will give NREPC reasonable notice of its intent to conduct 
an inspection under 30 CFR 842.11 in order to provide NREPC 
inspectors with an opportunity to accompany OSM inspectors. When OSM 
is responding to a citizen complaint of an imminent danger to the 
public health and safety, or of significant, imminent environmental 
harm to land, air or water resources pursuant to 30 CFR 
842.11(b)(1)(ii)(c), it will contact NREPC and provide the 
opportunity for a joint Federal/State inspection. Inability of NREPC 
to make an immediate joint inspection will not be cause for OSM to 
delay a Federal inspection where a citizen has alleged, and OSM has 
reason to believe, that an imminent danger to the public health and 
safety, or significant, imminent environmental harm to land, air or 
water resources exists. All citizen complaints which do not involve 
an imminent danger or significant, imminent environmental harm will 
be referred to NREPC for action in accordance with OSM regulations, 
policies, and procedures.

Article VIII: Enforcement

    NREPC will have primary enforcement authority under the Act 
concerning compliance with the requirements of this Agreement and 
the Program in accordance with 30 CFR 740.4(c)(5). Enforcement 
authority given to the Secretary under other Federal laws and 
Executive Orders including, but not limited to, those listed in 
Appendix A (attached) is reserved to the Secretary.
    During any joint inspections by OSM and NREPC, NREPC will have 
primary responsibility for enforcement procedures including issuance 
of orders of cessation, notices of violation, and assessment of 
penalties. NREPC will inform OSM prior to issuance of any decision 
to suspend or revoke a permit on Federal lands.
    During any inspection made solely by OSM or any joint inspection 
where NREPC and OSM fail to agree regarding the propriety of any 
particular enforcement action, OSM may take any enforcement action 
necessary to comply with 30 CFR Parts 843, 845, and 846. Such 
enforcement action will be based on the standards in the Program, 
the Act, or both, and will be taken using the procedures and penalty 
system contained in 30 CFR Parts 843, 845, and 846.

[[Page 53260]]

    NREPC and OSM will within 5 calendar days notify each other of 
all violations of applicable laws, regulations, orders, or approved 
mining permits subject to this Agreement, and of all actions taken 
with respect to such violations.
    Personnel of NREPC and OSM will be mutually available to serve 
as witnesses in enforcement actions taken by either party.
    This Agreement does not affect or limit the Secretary's 
authority to enforce violations of Federal laws other than the Act.

Article IX: Bonds

    NREPC and the Secretary will require each permittee who conducts 
operations on Federal lands to submit a performance bond payable to 
the State of Kentucky for an amount adequate to cover the operator's 
responsibilities under the Act and Program. Such performance bond 
will be conditioned upon compliance with all requirements of the 
Act, the Program, State rules and regulations, and any other 
requirements imposed by the Department of the Interior. Such bond 
will state on its face that in the event the Federal Lands 
Cooperative Agreement between Kentucky and the U.S. Department of 
the Interior is terminated, the portion of the bond covering the 
Federal lands increment(s) shall be assigned to the United States. 
The bond shall also state that if subsequent to the forfeiture of 
the bond, the Cooperative Agreement is terminated, any unspent or 
uncommitted proceeds of the portion of the bond covering the Federal 
lands increment(s) shall be assigned to and forwarded to the United 
States. NREPC will advise OSM within 30 calendar days of any 
adjustments to the performance bond made pursuant to the Program.
    Prior to releasing the permittee from any obligation under such 
bond for surface coal mining operations involving leased Federal 
coal, NREPC will obtain the concurrence of OSM. OSM concurrence will 
include coordination with the Federal land management agency and any 
other agency with jurisdiction or responsibility over Federal lands 
affected by the surface coal mining and reclamation operation.
    Submission of a performance bond does not satisfy the 
requirements for a Federal lease bond required by 43 CFR Subpart 
3474 or lessee protection bond required in addition to a performance 
bond, in certain circumstances, by Section 715 of the Act. Where 
Federal lease bonds or protections are required, OSM or the 
appropriate Federal agency is responsible for the collection and 
maintenance of such bonds.

Article X: Designating Areas Unsuitable for All or Certain Types of 
Surface Coal Mining and Reclamation Operations and Activities, 
Valid Existing Rights (VER), and Compatibility Determinations

A. Unsuitability Petitions

    1. Authority to designate Federal lands as unsuitable for mining 
pursuant to a petition is reserved to the Secretary.
    2. When either NREPC or OSM receives a petition to designate 
land areas unsuitable for all or certain types of surface coal 
mining operations that could impact adjacent Federal or non-Federal 
lands pursuant to Section 522(c) of the Act, the agency receiving 
the petition will notify the other agency of receipt within 5 
calendar days and of the anticipated schedule for reaching a 
decision, and request and fully consider data, information and 
recommendations of the other agency. OSM will coordinate with the 
Federal land management agency and any other agency with 
jurisdiction or responsibility over Federal lands within or adjacent 
to the petition area and will solicit comments from these agencies.

B. VER and Compatibility Determinations

    The following actions will be taken when requests for 
determinations of VER pursuant to Section 522(e)(1) or (2) of the 
Act or for determinations of compatibility pursuant to Section 
522(e)(2) of the Act are received:
    1. For Federal lands where proposed operations are prohibited or 
limited by Section 522(e)(1) or (2) of the Act and 30 CFR 761.11(a) 
or (b), OSM will make the VER determination.
    2. OSM will process requests for determinations of compatibility 
under Section 522(e)(2) of the Act and 30 CFR 761.11(b) and 
761.12(c).

Article XI: Termination of Cooperative Agreement

    This Agreement may be terminated by the Governor or the 
Secretary under the provisions of 30 CFR 745.15.

Article XII: Reinstatement of Cooperative Agreement

    If this Agreement has been terminated in whole or in part, it 
may be reinstated under the provisions of 30 CFR 745.16. The 
Secretary reserves the powers and authority specified in 30 CFR 
745.13.

Article XIII: Amendment of Cooperative Agreement

    This Agreement may be amended by mutual agreement of the 
Governor and the Secretary in accordance with 30 CFR 745.14.

Article XIV: Changes in State or Federal Standards

    The Secretary or NREPC may, from time to time, promulgate new or 
revised performance or reclamation requirements or enforcement and 
administrative procedures. Each party will, if it determines it to 
be necessary to keep this Agreement in force, change or revise its 
regulations or request necessary legislative action.
    Such changes will be made under the procedures of 30 CFR Part 
732 for changes to the Program and under the procedures of Section 
501 of the Act for changes to the Federal lands program.
    NREPC and OSM will provide each other with copies of any changes 
to their respective laws, rules, regulations, policy statements, 
guidelines or standards pertaining to the enforcement and 
administration of this Agreement.

Article XV: Changes in Personnel and Organization

    Each party to this Agreement will notify the other, when 
necessary, of any changes in personnel, organization and funding, or 
other changes that may affect the implementation of this Agreement 
to ensure coordination of responsibilities and facilitate 
cooperation.

Article XVI: Reservation of Rights

    This Agreement will not be construed as waiving or preventing 
the assertion of any rights in this Agreement that the State or the 
Secretary may have under laws other than the Act or their 
regulations, including but not limited to those listed in Appendix 
A.

    Dated: August 18, 1998.
Paul E. Patton,
Commonwealth of Kentucky.

    Dated: September 24, 1998.
Bruce Babbitt,
Secretary of the Interior.

Appendix A

    1. The Federal Land Policy and Management Act, 43 U.S.C. 1701 et 
seq., and implementing regulations.
    2. The Mineral Leasing Act of 1920, 30 U.S.C. 181 et seq., and 
implementing regulations, including 43 CFR Part 3480.
    3. The National Environmental Policy Act of 1969, 42 U.S.C. 4321 
et seq., and implementing regulations, including 40 CFR Part 1500.
    4. The Endangered Species Act, 16 U.S.C. 1531 et seq., and 
implementing regulations, including 50 CFR Part 402.
    5. The Fish and Wildlife Coordination Act, as amended, 16 U.S.C. 
661 et seq., 48 Stat. 401.
    6. The Bald and Golden Eagle Protection Act of 1940, as amended, 
16 U.S.C. 668-668d, and implementing regulations.
    7. The Migratory Bird Treaty Act, as amended, 16 U.S.C. 701-718h 
et seq.
    8. The National Historic Preservation Act of 1966, 16 U.S.C. 470 
et seq., and implementing regulations, including 36 CFR Part 800.
    9. The Clean Air Act, 42 U.S.C. 7401 et seq., and implementing 
regulations.
    10. The Federal Water Pollution Control Act, 33 U.S.C. 1251 et 
seq., and implementing regulations.
    11. The Resource Conservation and Recovery Act of 1976, 42 
U.S.C. 6901 et seq., and implementing regulations.
    12. The Reservoir Salvage Act of 1960, amended by the 
Preservation of Historical and Archaeological Data Act of 1974, 16 
U.S.C. 469 et seq.
    13. Executive Order 11593 (May 13, 1971), Cultural Resource 
Inventories on Federal Lands.
    14. Executive Order 11988 (May 24, 1977), for flood plain 
protection.
    15. Executive Order 11990 (May 24, 1977), for wetlands 
protection.
    16. The Mineral Leasing Act for Acquired Lands, 30 U.S.C. 351 et 
seq., and implementing regulations.
    17. The Stock Raising Homestead Act of 1916, 43 U.S.C. 291 et 
seq.
    18. The Archaeological Resources Protection Act of 1979, 16 
U.S.C. 470aa et seq., as amended.
    19. The Constitution of the United States.
    20. The Surface Mining Control and Reclamation Act of 1977, 30 
U.S.C. 1201 et seq.
    21. 30 CFR Chapter VII.
    22. The Constitution of the Commonwealth of Kentucky and State 
Law.
[FR Doc. 98-26491 Filed 10-1-98; 8:45 am]
BILLING CODE 4310-05-P