[Federal Register Volume 63, Number 244 (Monday, December 21, 1998)]
[Proposed Rules]
[Pages 70580-70628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33620]



[[Page 70579]]

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Part V





Department of the Interior





_______________________________________________________________________



Office of Surface Mining Reclamation and Enforcement



_______________________________________________________________________



30 CFR Part 701, et al.



Application and Permit Information Requirements; Permit Eligibility; 
Definitions of Ownership and Control; the Applicant/Violator System; 
Alternative Enforcement Actions; Proposed Rule

  Federal Register / Vol. 63, No. 244 / Monday, December 21, 1998 / 
Proposed Rules  

[[Page 70580]]



DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 701, 724, 773, 774, 778, 842, 843, and 846

RIN 1029-AB94


Application and Permit Information Requirements; Permit 
Eligibility; Definitions of Ownership and Control; the Applicant/
Violator System; Alternative Enforcement Actions

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

ACTION: Proposed rule.

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SUMMARY: We are proposing revised permit eligibility requirements for 
surface coal mining operations under the Surface Mining Control and 
Reclamation Act of 1977 (SMCRA or the Act). In particular, we propose 
to revise how ownership and control of mining operations is determined 
under section 510(c) of the Act so that applicants who are responsible 
for unabated violations do not receive new permits. We have designed 
this proposal to be effective, fair, and consistent with a 1997 
decision by the U.S. Court of Appeals for the D.C. Circuit addressing 
ownership and control issues.
    In addition, we are proposing other changes to other aspects of our 
regulations in response to comments we received when we sought public 
participation in developing this proposed rule. Our intent is to 
improve, clarify, and simplify current regulations as well as to reduce 
duplicative and burdensome permit information requirements.

DATES: Written comments: We will accept written comments on the 
proposed rule until 5 p.m., Eastern time, on February 19, 1999.
    Public hearings: Upon request, we will hold public hearings on the 
proposed rule at dates, times and locations to be announced in the 
Federal Register prior to the hearings. We will accept requests for 
public hearings until 5 p.m., Eastern time, on January 11, 1999. If you 
wish to attend, but not testify at, any hearing, you should contact the 
person identified under FOR FURTHER INFORMATION CONTACT before the 
hearing date to verify that the hearing will be held. If you wish to 
attend and testify at any hearing, you should follow procedures under 
I. Public Comment Procedures--Public hearings. 

ADDRESSES: If you wish to provide written comment, you may submit your 
comments by any one of several methods (see Public Comment Procedures). 
We will make comments available for public review during regular 
business hours. You may mail or hand-deliver comments to the Office of 
Surface Mining Reclamation and Enforcement, Administrative Record, Room 
101, 1951 Constitution Avenue, NW, Washington, D.C. 20240. You may also 
submit comments to OSM via the Internet at: [email protected].
    You may submit a request for a public hearing orally or in writing 
to the person and address specified under `FOR FURTHER INFORMATION 
CONTACT. We will announce the address, date and time for any hearing in 
the Federal Register prior to the hearing. If you are disabled and 
require special accommodation to attend a public hearing, you should 
contact the person listed under FOR FURTHER INFORMATION CONTACT.

FOR FURTHER INFORMATION CONTACT: Earl D. Bandy, Jr., Office of Surface 
Mining Reclamation and Enforcement, Applicant/Violator System Office, 
2679 Regency Road, Lexington, Kentucky 40503. Telephone: (606) 233-2796 
or (800) 643-9748. E-Mail: [email protected].

SUPPLEMENTARY INFORMATION

Table of Contents

I.  Public Comment Procedures
II.  Background to Proposed Rules
    A.  What is the permit-block sanction in the Surface Mining 
Control and Reclamation Act?
    B.  How has OSM implemented the permit-blocking requirement?
    C.  What is the Applicant/Violator System and how is it used in 
permit-blocking?
    D.  What happened to the regulations OSM issued in 1988 and 
1989?
    E.  What did the Appeals Court say was wrong with OSM's 
regulations?
    F.  What did OSM do in response to the Appeals Court decision?
    G.  How has OSM met its April 1997 commitment to propose 
additional regulations?
    H.  How does this proposal relate to the Appeals Court decision 
and interim final rule?
    I.  How would these rules help bring about more effective 
regulation of mining?
    J.  What would be the major effects of this proposal?
    K.  How would conditioning permits based on compliance history 
work?
    L.  What are some examples of how the new rules would treat 
different applicants?
    M.  Would this rule affect other documents that OSM has 
published in the past?
    N.  Would the rule affect State primacy?
    O.  How does OSM address the information collection burdens of 
this rule?
    P.  What provisions in SMCRA authorize these proposed changes?
III.  Discussion of Proposed Rules
IV.  Procedural Determinations

I. Public Comment Procedures

    Sixty (60) Day Comment Period: In view of the extensive outreach 
activity conducted in advance of this rulemaking and in order to 
expedite the publication of final rules, we will not extend the comment 
period beyond the usual 60 days.
    Written comments: Written comments on the proposed rule by mail, 
electronically, or in person, should be specific, confined to issues 
pertinent to the proposed rule, and explain the reason for any 
recommended change. Submit three copies of your comments.
    We will consider only those comments sent within the allowed time 
period (see DATES). We will log into the administrative record for the 
rulemaking all comments sent to the addresses listed above (see 
ADDRESSES). Comments delivered to addresses other than those listed 
above (see ADDRESSES) may not be logged in.
    Comments over the Internet should be in an ASCII file, and you 
should avoid using special characters and any form of encryption. 
Please also include ``Attn: RIN 1029-AB94'' and your name and return 
address in your Internet message. If you do not receive a confirmation 
from the system that we have received your Internet message, contact us 
directly at 202-208-2847.
    Public hearings: We will hold a public hearing on the proposed rule 
only upon request. We will announce the time, date, and address for any 
hearing in the Federal Register at least 7 days prior to the hearing.
    If you are interested in participating at a hearing, you need to 
inform Mr. Bandy (see FOR FURTHER INFORMATION CONTACT) by 5:00 p.m., 
Eastern time, on January 11, 1999. If no one has contacted Mr. Bandy to 
express an interest in participating in a hearing by that date, we will 
not hold a hearing. If only one person expresses an interest, we may 
hold a public meeting rather than a hearing and include the results in 
the Administrative Record. We will determine the location of the 
hearing, if one is held, after reviewing the number of requests 
received and the locations desired.
    If we hold a hearing, it will be transcribed, and it will continue 
until all persons wishing to testify have been heard. To ensure that we 
have an accurate record of the hearing, we ask that you provide a 
written copy of your testimony to the transcriber at the beginning of 
the hearing. We also

[[Page 70581]]

request that you send an advance copy of your testimony to us at the 
address specified for submitting written comments (see ADDRESSES).
    We will make comments, including names and addresses of commenters, 
available in our Administrative Record for public review during regular 
business hours.

II. Background to Proposed Rules

    In this Background section, we use a question-and-answer format to 
provide some of the history of this rulemaking and to explain the 
concepts we are introducing in the proposed rule. In Section III, 
Discussion of Proposed Rules, we have put together a section-by-section 
description of the proposed changes and the effects they would have if 
they were to become final rules. The proposed regulatory text is 
included in its entirety in the latter portion of this publication.
    In 1998, the President ordered Federal agencies to begin writing 
public documents, including regulations, in plain language. Today's 
proposal introduces some plain language principles into OSM's body of 
regulations.
    For example, there are numerous references to ``you'' and ``we'' in 
this document. In the regulatory text, ``you'' refers to the applicant 
for a surface coal mining operation, and ``we'' refers to the 
regulatory authority charged with enforcing the requirements in the 
regulations. In all but a few States, ``we'' means the State regulatory 
authority approved by the Secretary of the Interior to carry out the 
Surface Mining Act's requirements within the State's boundaries. In 
some cases, however, ``we'' means the Office of Surface Mining 
Reclamation and Enforcement (OSM)--the regulatory authority on Indian 
Lands and in the few States that do not have an approved State 
regulatory program. Where the regulatory text specifically refers to 
``OSM'' or ``the State,'' it is usually in reference to separate roles 
or responsibilities as the regulatory authority.
    While ``we'' means the regulatory authority in the text of the 
regulation, it has a different meaning in the introductory text--also 
known as the preamble. Because the preamble describes how OSM has 
developed the regulation, the use of ``we'' in the preamble always 
refers to OSM.

A. What is the Permit-Block Sanction in the Surface Mining Control and 
Reclamation Act?

    The Surface Mining Control and Reclamation Act of 1977 (SMCRA or 
the Act), 30 U.S.C. 1201 et seq., establishes requirements for the 
regulation of active surface coal mining and reclamation and for the 
restoration of abandoned mine lands. The Act authorizes OSM to review 
and approve a State program so that the State may become the regulatory 
authority and have primary responsibility to enforce the Act's 
requirements within its borders. The Act also contains numerous 
provisions governing the permitting of mining operations. One of the 
most powerful tools provided in SMCRA is the permit-block sanction in 
section 510(c).
    Under Section 510(c), the regulatory authority may not issue a 
permit for a new operation when another surface coal mining operation 
``owned or controlled by the applicant'' is in current violation of 
SMCRA. Such violators may have mined coal and left behind unreclaimed, 
on-the-ground, environmental problems. They may have forfeited their 
surety bonds. Some may owe the government for unpaid Abandoned Mine 
Land fees or civil penalty assessments. Still others may have multiple 
infractions in all of these areas. Section 510(c)'s intent is to 
prohibit the regulatory authority from issuing new permits to 
applicants who own or control operations with violations until they 
abate the violations for which they are responsible.
    As a first step in this process, regulatory authorities must 
determine whether an applicant for a surface coal mining permit owns or 
controls an operation with a violation. This ownership or control 
determination is key to deciding whether an applicant should be held 
responsible for violations that do not appear in violation records 
under the applicant's name. Because individuals may apply for permits 
under different corporate names, it is easy to avoid being linked to 
violations at mines that the applicant may have controlled--violations 
that they should have abated.

B. How has OSM Implemented the Permit-Blocking Requirement?

    Unfortunately, for most of the decade following enactment of SMCRA 
in 1977, neither States nor the Federal Government had devised an 
effective means of determining ownership and control to effectively 
implement section 510(c). While some States had attempted to set up 
mechanisms for tracking violators and their controllers, they relied 
heavily on the manual interpretation of paper files which were 
difficult to access and keep up-to-date. Even if an individual State 
had developed an effective method of tracking violators within its 
boundaries, it still had to consult with other regulatory authorities 
to determine if out-of-State violators were trying to set up operations 
locally. These consultations often lacked consistency and relied on 
different filing systems and data standards. There was no national or 
regional system in place for keeping up with violators who moved from 
State to State leaving behind the mining and reclamation problems they 
had created.
    In 1981, environmental groups sued the Secretary of the Interior 
alleging a nationwide failure to enforce section 510(c). The parties 
eventually negotiated a settlement (Save Our Cumberland Mountains, 
Inc., et al. v. Clark, No. 81-2134 (D.D.C. 1985) (Parker, J.)) under 
which OSM established the computer system now known as the Applicant/
Violator System (AVS). The AVS became the central repository for 
violation information, as well as ownership and control information, 
enabling regulatory authorities to more effectively implement section 
510(c).
    During the two years following the settlement, we designed and 
built the AVS and negotiated Memoranda of Understanding with each of 
the primacy States detailing how States would use the AVS and how they 
would assist OSM in maintaining and updating system data. Over the same 
period of time, we developed proposed rules to implement section 510(c) 
and related sections of SMCRA. We issued those rules in final form in 
1988 and 1989 in Title 30, Chapter VII of the Code of Federal 
Regulations. They were known as the ``ownership and control'' rule (53 
FR 38868 (1988)), the ``permit information'' rule (54 FR 8982 (1989)) 
and the ``permit rescission'' rule (54 FR 18438 (1989)). Under those 
rules, a regulatory authority would deny an application for a surface 
coal mining permit if the applicant owned or controlled an operation 
that was in violation of the Act, or if others who were in violation 
owned or controlled the applicant.
    Specifically, the 1988 rule defined ``ownership and control'' at 
Sec. 773.5 and required the regulatory authority to review violations 
associated with the applicant at Sec. 773.15(b) so that regulatory 
authorities could determine who was eligible for a permit. The ``permit 
information'' rule published in 1989 described the requirements for the 
applicant to provide information on interests at Sec. 778.13 and 
violations at Sec. 778.14 needed by the regulatory authority to review 
the application. The ``permit information'' rule, while separate from 
the original ownership

[[Page 70582]]

and control rule, complemented it by requiring the applicant to supply 
the information necessary for the regulatory authority to make a 
permitting decision. The ``permit rescission'' rule, also published in 
1989, included requirements at Secs. 773.20, 773.21, and 843.21 for 
dealing with improvidently issued permits `` those permits that must be 
rescinded due to the existence of a violation that would have prevented 
issuance of the permit had the regulatory authority been aware of it.

C. What is the Applicant/Violator System and how is it Used in Permit-
Blocking?

    The AVS is a computerized system containing two large banks of 
data. One bank houses information on owners and controllers of mining 
operations. As part of the permit application requirements, companies 
and individuals provide this information to the regulatory authority, 
which then loads the information in the AVS. The other bank houses 
information on violations, including failure to pay required fees and 
penalties, which we get primarily from regulatory authorities and our 
own financial management records.
    Under current regulations, the regulatory authority checks the AVS 
during the review of each application for a mining permit. The AVS 
automatically compares the ownership and control information with the 
violation information to determine if links exist between the applicant 
and any outstanding violations. If the applicant is linked to certain 
violations in the AVS, OSM recommends to the regulatory authority that 
it deny the application unless the applicant submits proof that the 
violation has been corrected, is being corrected, or is being appealed 
through proper channels. By matching permit applicants to outstanding 
violations that they own or control, the AVS helps regulatory 
authorities implement section 510(c) faster, easier, and more reliably 
than was possible before AVS.

D. What Happened to the Regulations OSM Issued in 1988 and 1989?

    The National Mining Association (NMA) and National Wildlife 
Federation filed suit challenging the validity of all three sets of 
OSM's rules implementing section 510(c). On August 31, 1995, the U.S. 
District Court for the District of Columbia upheld the three challenged 
rules in their entirety. See National Wildlife Fed'n v. Babbitt, Nos. 
88-3117, 88-3464, 88-3470 (consolidated) (D.D.C. Aug. 31, 1995); 
National Wildlife Fed'n v. Babbitt, Nos. 89-1130, 89-1167 
(consolidated) (D.D.C. Aug. 31, 1995); National Wildlife Fed'n v. 
Babbitt, Nos. 89-1751, 89-1811 (consolidated) (D.D.C. Aug. 31, 1995).
    The NMA appealed the ruling and, on January 31, 1997, the U.S. 
Court of Appeals for the D.C. Circuit reversed the district court's 
decision. See National Mining Ass'n v. Department of Interior, 105 F.3d 
691 (D.C. Cir. 1997) (hereinafter NMA v. DOI).

E. What did the Appeals Court Say was Wrong With OSM's Regulations?

    The Appeals Court held that section 510(c) of SMCRA authorizes OSM 
to deny a permit only when ``any surface coal mining operation owned or 
controlled by the applicant'' is currently in violation of SMCRA. Thus, 
because under OSM's 1988 ownership and control rules the regulatory 
authority could also deny a permit when any person who owned or 
controlled the applicant was in violation of the Act, the Appeals Court 
invalidated OSM's ownership and control rule in its entirety. In 
addition, the court held that because OSM's permit information and 
permit rescission rules ``are centered on the ownership and control 
rule * * *, they too must fall.'' Id. at 696.
    Although the Appeals Court found only one aspect of OSM's rules to 
be flawed, it invalidated the entire ownership and control rule as well 
as the two related sets of regulations, including many provisions which 
were not inconsistent with the rationale in the court's decision. At 
the same time, nothing in the court's decision eliminated the 
responsibility of OSM and State regulatory authorities to implement the 
permit-blocking requirements of section 510(c) and the requirement in 
section 507(b) of the Act to collect certain permit information. This 
meant that OSM and the States faced the prospect of making permitting 
decisions as required in the Act without any regulations to support 
those decisions. The Appeals Court's action created a great deal of 
uncertainty among State regulatory authorities about how to continue to 
meet their responsibility to determine who was eligible to receive a 
permit.

F. What did OSM do in Response to the Appeals Court Decision?

    Immediately following the Appeals Court decision, we made 
adjustments in our process for responding to regulatory authorities' 
requests for permit recommendations. In each case, before we 
recommended that a permit be denied based on the AVS check, we 
determined if the recommendation would be consistent with the court's 
decision. In those cases where it would have been inconsistent--those 
where the recommendation would be based on the violations of those who 
owned or controlled the applicant--we informed the regulatory authority 
that we could no longer recommend that it deny the permit.
    Soon after the Appeals Court decision, we formed a team of 
Department of the Interior employees with experience in ownership and 
control issues. We instructed the team to evaluate the court's decision 
and determine what we needed to do to comply with it. As a first step, 
to remove the uncertainty created by the decision, and to ensure there 
would be no lapse in approved State programs, we published interim 
final rules (the IFR) on an emergency basis on April 21, 1997 (62 FR 
19451). The IFR were consistent with the rationale in the Appeals Court 
decision. The rules did not authorize the regulatory authority to deny 
permits because of outstanding violations of an applicant's owners and 
controllers.
    We determined that we had ``good cause'' to publish the IFR without 
notice and comment because of the need to have regulations in place. At 
the same time, we committed to propose further rulemaking ``in 
accordance with standard notice and comment procedures.''

G. How has OSM Met its April 1997 Commitment to Propose Additional 
Regulations?

    In June of 1997, our ownership and control team met with State 
regulatory authorities to discuss rulemaking options. As a result of 
those discussions, further deliberations within the Department of the 
Interior, and input from citizens and the regulated industry, we 
decided to take full advantage of the opportunity to re-evaluate all 
aspects of the ownership and control rules and related regulations, to 
propose improvements, to clarify requirements, and to reduce 
unnecessary burdens wherever possible.
    On October 29, 1997, we issued an Advance Notice of Proposed 
Rulemaking in the Federal Register our intent to propose rules, hold 
public meetings and solicit comments from all interested parties on a 
wide range of topics related to ownership and control. 62 FR 56,139 
(1997). Also on October 29, OSM Director Kathy Karpan held a press 
conference to announce a new and innovative rulemaking process that 
would include extensive public outreach and consideration of any 
suggestions that could improve the ownership and control rules.
    Representatives from the coal industry, environmental groups, State

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regulatory authorities, the press, and a congressional authorizing 
subcommittee with responsibility for OSM's programs participated in the 
Director's press conference. The Director promised a ``no-holds-
barred'' approach in which all aspects of OSM's ownership and control 
rules would be open for discussion. Though the task was considerable, 
the goal was simple: develop the best possible rules that would be 
fair, effective and legally defensible.
    The Ownership and Control Team conducted the Director's public 
outreach initiative from October 29, 1997, through January 16, 1998. 
The Team invited about 900 people and organizations to participate and 
provided everyone with a topics paper to elicit ideas, comments, and 
suggestions on possible regulatory changes. Seventy people attended 
seven public meetings held in different locations throughout the U.S. 
We offered to meet separately with any person or group requesting a 
meeting. Based upon such a request, members of the Team met with the 
National Mining Association. We also held individual discussions with 
several environmental advocates. In addition to holding the public 
meetings, the team received written comments.
    At the conclusion of the outreach, the team began developing 
rulemaking options and recommendations to present to the Director on 
dozens of regulatory provisions related to ownership and control. As 
the team developed proposed rule language, members continued 
discussions with our State partners and kept them informed of the 
team's progress, including holding a formal States-OSM meeting to 
discuss the results of the outreach. Today's proposal is the 
culmination of months-long review, analysis and deliberation that 
fulfills our commitment in the IFR to proposed further rules with full 
public notice and opportunity for comment.

H. How Does This Proposal Relate to the Appeals Court Decision and 
Interim Final Rule?

    This proposal is consistent with the IFR and the January 31, 1997, 
Appeals Court decision in that it would not authorize the denial of 
permits based on outstanding violations of an applicant's owners and 
controllers. However, it goes farther in reflecting our decision to 
take full advantage of the opportunity to re-evaluate all aspects of 
the ownership and control rules, propose improvements, clarify 
requirements, and reduce any unnecessary burdens placed on States and 
the regulated industry. It also reflects suggestions and ideas 
presented to us during the public outreach period.
    In addition to ensuring that the current proposal is consistent 
with the scope of section 510(c) as described by the Appeals Court, we 
have looked to the court's decision for guidance in interpreting other 
aspects of SMCRA and implementing regulations. For example, the court 
explained that, while we may only block permits based on the violation 
histories of operations owned or controlled by the applicant, we have 
``leeway in determining who the applicant is'' and may ``pierce the 
corporate veil'' when appropriate to identify the ``true applicant.'' 
NMA v. DOI, 105 F. 3d at 695.
    Keeping in mind the Appeals Court's commentary, and in consultation 
with our State partners, and fully considering the views expressed 
during public outreach, we have evaluated our existing authorities to 
determine how we can more effectively address violations of the Act. 
While the permit-block sanction authorized in section 510(c) will 
continue to be the primary tool for determining who is eligible to 
mine, it will be much less effective without the ability to consider 
the violations of those who own or control the applicant. This makes it 
even more important that we effectively use our other authorities under 
SMCRA to deter mining by those who are either unwilling or unable to 
meet the obligations of their permits. Indeed, during the public 
outreach, some commenters suggested that we make more use of 
enforcement authorities already granted under the Act and in 
regulations rather than relying so heavily on permit blocking. In this 
vein, the Appeals Court noted that ``blocking permits under section 
510(c) is not the only regulatory mechanism under SMCRA.'' Id. at 695.

I. How Would These Rules Help Bring About More Effective Regulation of 
Mining?

    In assessing how we could use available authorities to improve 
compliance with SMCRA, we have focused on four key areas: (1) improving 
the quality and usefulness of the information gathered during the 
permit application process and holding applicants fully accountable for 
providing all required information; (2) ensuring that permit 
eligibility determinations include consideration of all information 
indicating the likelihood of an applicant meeting the obligations of 
the permit; (3) verifying, through the increased use of investigations, 
that applicants have provided complete and accurate information; and 
(4) more effectively using currently available alternative enforcement 
capabilities to ensure compliance by those who own, control or direct 
mining operations in cases where conventional enforcement mechanisms 
prove inadequate. We have concluded that these tools can be used more 
effectively to achieve greater overall compliance with SMCRA.

J. What Would be the Major Effects of This Proposal?

    The major effects of this proposal are as follows:
     Consistent with the January 1997 Appeals Court decision, 
regulatory authorities would continue to deny applications for permits 
when the applicant has an outstanding violation or when the applicant 
owns or controls an operation with an outstanding violation.
     An applicant also would not be eligible for a permit if an 
owner or controller of the applicant has demonstrated such disregard 
for the environment that such person has been barred, disqualified, 
restrained, enjoined, or otherwise prohibited from mining by a Federal 
or State court.
     The controllers of an applicant would be on notice of 
their duty to comply with the requirements of the Act and the rules 
would require them to attest to this fact.
     The regulatory authority would more thoroughly review and 
verify violation and ownership and control information.
     Uncorrected violations of the Act and Federal and State 
regulations that remain uncorrected would be subject to enforcement 
actions, including the alternative enforcement mechanisms already 
available in regulations.
     The regulatory authority would more heavily focus 
enforcement resources on those operators who lack a demonstrated 
history of compliance and place less emphasis on those who have a 
demonstrated history of compliance.
     The information the regulatory authority would require 
from applicants would more closely conform to the information 
requirements of section 507(b) of the Act.
     The definitions of ``ownership'' and ``control'' in the 
rules would aid both the applicant and the regulatory authority in 
identifying all parties with obligations under a permit.
     Duplicative and burdensome information requirements that 
applicants and regulatory authorities must currently meet would be 
eliminated.
     The current presumptions that ownership or control exists 
would be

[[Page 70584]]

replaced with a requirement that the regulatory authority make a 
finding of actual ownership or control.
     Regulatory authorities would condition permits to ensure 
compliance based on how long the applicant has been mining, whether the 
applicant has a successful environmental compliance record, and whether 
the applicant has owners or controllers with outstanding violations.

 K. How Would Conditioning Permits Based on Compliance History Work?

    In this proposal, we introduce the concept of having additional 
permit conditions for applicants depending on how well each has 
demonstrated a commitment to sound mining and reclamation practices. 
Possibly the best predictor of the likelihood that an applicant will 
meet the obligations of a permit is the record of how well the 
applicant has met them for past operations. Applicants with good 
environmental compliance records have earned a greater degree of trust 
than those who have not practiced sound mining and reclamation, or who 
have limited surface coal mining experience, or who have owners and 
controllers linked to outstanding violations. While all permittees 
would still be subject to the same on-the-ground mining and reclamation 
requirements, we propose that some of the administrative and procedural 
requirements or permit conditions would differ depending on the record 
of past mining.
    Specifically, we propose that regulatory authorities place 
additional conditions in the permits of applicants who do not have 
established a record of successful environmental compliance. Such 
additional conditions also would apply to applicants whose owners or 
controllers have links to outstanding violations. Those additional 
conditions would include payment of all civil penalties, AML 
reclamation fees, and AML audit debts within the 30-days after we 
provide specific notice that they are due. These permittees also must 
take all possible steps to abate any outstanding violation within the 
period set for abatement. And, the permittee must maintain 
uninterrupted compliance with all provisions of any abatement plan or 
payment schedule or other settlement agreement.
    Under our proposal, establishing a record of successful 
environmental compliance would be demonstrated if the applicant (1) has 
mined and reclaimed under approved permits for at least five years 
before the date of application; (2) has no outstanding violations; and 
(3) does not have owners or controllers who are linked to any 
outstanding violations.
    We also propose that the regulatory authority may presume that a 
notice of violation existing at the time of application is being 
corrected for applicants having established a record of successful 
environmental compliance, as long as the period allowed for abatement 
of the notice of violation has not yet expired. This presumption would 
not apply to applicants who do not have an established record of 
successful environmental compliance.
    The proposed rule provides that failure to comply with any permit 
condition by a permittee who was found not to have established a record 
of successful compliance at the time the permit was issued may result 
in a regulatory finding that the permittee is unable or unwilling to 
comply with the mining and reclamation plan. Further, such a finding 
would constitute adequate reason for the regulatory authority to 
promptly issue an order for the permittee to show cause why the permit 
should not be suspended or revoked.

L. What are Some Examples of how the New Rules Would Treat Different 
Applicants?

    The following examples illustrate how this rule changes permit 
eligibility and permit conditions. Six hypothetical mining companies--
Able, Baker, Austin, Charley, Destiny and Eagle--have applied for 
permits to mine. Able, Baker and Austin are denied permits, while 
Charley, Destiny and Eagle are issued permits. Charley's and Destiny's 
permits have the additional permit conditions described in this 
proposed rule, while the permit issued to Eagle does not. Here's why:
    1. Able Coal Company has been mining coal for 12 years and has one 
outstanding violation from a prior operation. Regardless of Able's 
overall compliance record or the number of years the company has been 
mining, Able is ineligible for a permit under section 510(c) of SMCRA 
until the violation is remedied.
    2. Baker Industries has been mining coal for 14 years and has no 
outstanding violations; however, a company that Baker controls--
Farthing Coal--does. Under section 510(c), Baker is ineligible for a 
permit because it owns or controls an operation with a violation. As 
with Able Coal, regardless of Baker's overall compliance record or the 
number of years the company has been mining, Baker is ineligible for a 
permit under section 510(c) of SMCRA until Farthing's violation is 
remedied.
    3. Austin Coal has been in operation without compliance problems 
for 10 years. Six months ago, Austin was purchased by Owens 
Enterprises. John Owens, president of Owens Enterprises, was recently 
issued a permanent injunction by a State court prohibiting him from 
mining due to numerous environmental problems at a half-dozen Owens 
mining operations. Issuing a permit to Austin would be inconsistent 
with the state court order in that it would again place John Owens in a 
position of control over a mining operation. Austin's application would 
be denied.
    4. Charley Mining Company has been mining coal for six years 
without any compliance problems. However, Charley is controlled by 
Fickle Commodities, which has an outstanding violation. Charley would 
be eligible for a permit because it does not own or control the 
operation with the violation. However, the control that Fickle 
exercises over Charley puts Charley at an increased risk of not meeting 
all the requirements of its permit. The permit issued to Charley would 
be conditioned as described in this proposed rule.
    5. Destiny Mining, which began mining operations three years ago, 
also has been mining without any compliance problems. Destiny is 
controlled by Fathom, Inc., which has no outstanding violations. 
Destiny would be eligible for a permit because it does not own or 
control any operations with violations. However, despite the good 
compliance record of Destiny and the violation-free status of its 
controller, the permit issued to Destiny would have to be conditioned 
as described in this proposed rule because the company has not yet 
accumulated the minimum required five years of successful compliance 
experience.
    6. Eagle Coal Works also has been mining without any compliance 
problems for six years. Eagle is controlled by Frisk Mining, which is 
controlled by F&A Enterprises, which is a wholly owned subsidiary of 
the Faithful Corporation. None of the owners or controllers--Frisk, F&A 
or Faithful--has any outstanding violations. Eagle would be eligible 
for a permit because it does not own or control any operations with 
violations. Further, because of Eagle's successful compliance record 
over a period of at least five years, and the violation-free status of 
the three companies that own or control Eagle, the company's permit 
would not have the additional permit conditions described in this 
proposed rule.

[[Page 70585]]

M. Would This Rule Affect Other Documents That OSM has Published in the 
Past?

    OSM proposes to incorporate into the regulations the provisions of 
the existing Memoranda of Understanding (MOUs) with primacy States 
regarding use of the AVS. Thus, requirements for State regulatory 
authorities related to ownership and control will be consolidated for 
improved clarity and ease of reference. The MOUs have been widely 
accepted by the States and OSM as effective mechanisms for working 
together in operating and maintaining the AVS.
    In addition, as part of today's action, we formally withdraw our 
June 28, 1993, proposal (58 FR 34652 et seq.). Our 1993 proposal would 
have amended the regulations invalidated by the Appeals Court but, as a 
result of the court's decision, has been rendered moot.

N. Would the Rule Affect State Primacy?

    In the process of re-evaluating our ownership and control 
procedures, and in response to concerns raised during public outreach, 
we will be changing the recommendation process that we use in response 
to State requests for AVS checks. Currently, when information in the 
AVS indicates that the regulatory authority should deny an application, 
we review the relevant data to confirm that the recommendation to deny 
is based on accurate and recent information. If we do not discover 
anything that would call the recommendation into question, we recommend 
to the regulatory authority that it deny the permit, except in 
instances where the recommendation would be inconsistent with the court 
ruling.
    A long-standing issue concerning the use of AVS has been our 
permitting recommendations to State regulatory authorities. Frequently, 
State regulatory authorities were perceived as considering our 
recommendations as dictates, rather than as advice, on how States were 
to make permitting decisions. While our intent in making 
recommendations to States has been to ensure quality control of AVS-
generated information, we believe that a change would help to clarify 
our role and the role of the States in permitting. Instead of providing 
permit eligibility recommendations, we propose to use AVS to provide a 
variety of reports, including ownership and control and violation 
reports. State regulatory authorities would then perform their own 
analysis of applicants' legal identity information, permit history, and 
compliance history and make permitting decisions without an OSM 
recommendation.
    This revised approach should leave no doubt that it is OSM's 
responsibility to operate the AVS and maintain the integrity of the 
data in the system, and it is the State's responsibility to decide 
whether to issue the permit (of course, OSM would make the permitting 
decisions in Federal program States). As with other aspects of the 
implementation of approved State programs, this activity would be 
subject to our oversight reviews.
    Although our policy concerning whether or not to provide 
recommendations to regulatory authorities is not established in 
regulations, and the change described here would not require any 
revision to our regulations, we are mentioning this change here for the 
public's information because it arose in large part from the public 
outreach process for this rulemaking.

O. How Does OSM Address the Information Collection Burdens of This 
Rule?

    Sections 773.10, 774.10 and 778.10 address information collection 
requirements and the appropriate Office of Management and Budget (OMB) 
clearance numbers for each part. We propose to amend these sections by 
updating the data in each section and estimating the burden of 
complying with the information collection requirements for each 
response. The proposal also includes the addresses of OSM and OMB 
officials where comments on the information collection requirements may 
be sent.

P. What Provisions in SMCRA Authorize These Proposed Changes?

    The proposed rules are based on the following sections of SMCRA:

Section 201--Creation of the Office
Section 402--Reclamation Fee
Section 506--Permits
Section 507--Application Requirements
Section 510--Permit Approval or Denial
Section 511--Revision of Permits
Section 518--Penalties
Section 521--Enforcement

III. Discussion of Proposed Rules

    This proposal affects the following sections of OSM's current 
regulations: Secs. 701.5, 724.5, 773.5, 773.10, 773.15, 773.16, 773.17, 
773.18, 773.20, 773.21, 773.22, 773.23, 773.24, 773.25, 774.10, 774.13, 
774.17, 778.5, 778.10, 778.13, 778.14, 842.11, 843.5, 843.11, 843.13, 
843.21, 843.24, and part 846.
    Below is a table listing changes to the rules. We have included it 
here to describe briefly where the rules are proposed to be changed, 
the nature of the changes, and the intended effect. The table is 
arranged in the same sequence as the text of the proposed rule and the 
section-by-section description of rule changes, which follows the 
table. It is an important cross-reference in identifying provisions 
that are proposed to be added, revised, deleted, and moved.
    In trying to understand the proposed changes, it is best to start 
with the table. For many of the proposed changes, the table will be 
sufficient to understand what we are proposing and its intended effect. 
For those changes where more explanation is needed, additional 
description is included in the discussion of our proposal following the 
table. And, to further clarify the proposed changes, we have included 
the full text of the regulatory changes at the end of this publication.

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BILLING CODE 4310-05-C
    Following is the section-by-section description of the proposed 
changes to OSM's regulations.

A. Section 701.5--Definitions

    We propose ``Applicant/Violator System or AVS'' to mean the 
automated information system of applicant, permittee, operator, 
violation, and related data OSM maintains to achieve compliance with, 
and to implement, the purposes of SMCRA. The amended definition 
clarifies the purpose of the computerized system of data and 
information in light of the January 31, 1997 Appeals Court decision, 
including removing language from the current definition to make it more 
consistent with the court's ruling.
    We propose ``knowing or knowingly'' to mean that an individual knew 
or had reason to know in authorizing, ordering, or carrying out an act 
or omission that such an act or omission constituted a violation of the 
Act, or a failure or refusal to comply with the Act.
    We also propose the related term ``willful or willfully'' to mean 
that an individual acted either intentionally, voluntarily or 
consciously, and with intentional disregard or plain indifference to 
legal requirements in authorizing, ordering or carrying out an action 
or omission that constituted a violation of the Act, or a failure or 
refusal to comply with the Act.
    We propose to define ``knowing'' and ``knowingly'' together, and 
``willful'' and ``willfully'' together, and to expand the scope of the 
definitions so that they apply to persons in addition to corporate 
permittees.
    We propose to delete ``willful violation'' from Secs. 701.5 and 
843.5. We believe that the definition of ``willful violation'' is 
inconsistent with the definition of ``willfully.'' By deleting 
``willful violation'' and adding ``willful'' to the definition of 
``willfully,'' we intend to make the terms ``willful'' and 
``willfully'' consistent in their meaning.
    We propose to add ``link to a violation'' to the regulatory 
definitions at Sec. 701.5. ``Link to a violation'' is proposed to mean 
that a person owning or having the ability to control a proposed 
surface coal mining operation has owned or had the ability to control 
surface coal mining operations at another site at the time a violation 
existed at that operation. In proposing this definition, we emphasize 
an important distinction in both coverage and use. It does not cover an 
applicant's ownership or control of operations that are in violation of 
the Act--a relationship to violations considered in determining permit 
eligibility under section 510(c) of the Act. Instead, it covers the 
relationship between an applicant and an outstanding violation

[[Page 70591]]

where the two operations share the same controller--a relationship that 
we propose should serve as the basis for conditioning a permit once it 
is issued. We also propose that a ``link to a violation'' is the basis 
for determining the proper means of enforcement to achieve abatement or 
correction of an outstanding violation, including alternative 
enforcement.
    We propose to add ``outstanding violation'' to the regulatory 
definitions at Sec. 701.5 to mean a violation notice that remains 
unabated or uncorrected beyond the abatement or correction period. The 
definition encompasses all violation notices that remain unabated or 
uncorrected after all regulatory provisions for abatement or correction 
have expired. We propose to define ``outstanding violation'' so that 
the regulatory definition coincides with how the term is commonly used 
and widely accepted.
    We propose ``successful environmental compliance'' to mean having 
no outstanding violations and demonstrating consistent abatement and 
other correction of violations, payment of civil penalties, and payment 
of reclamation fees within the time frames established for abatement 
and payment, allowing for administrative due process. We are adding 
this definition to Sec. 701.5 to assist regulatory authorities in 
making a finding regarding an applicant's or other person's history of 
compliance with the Act, State laws, and any other relevant laws, 
regulations, or requirements. The definition of ``successful 
environmental compliance'', and the provisions proposed at 
Secs. 773.15(b)(3), 773.16, and 773.17, are intended to assist 
regulatory authorities in making the distinction between persons who 
have a record of successful environmental compliance and those who do 
not.
    We propose ``successor in interest'' to mean a person who applies 
to the regulatory authority for approval under a change in an existing 
permittee. This change reflects the distinction we propose to make 
between those instances of a transfer, assignment, or sale of the 
rights granted under a permit that require only approval for a 
modification of the existing permit information and where a new permit 
is required as a result of a successor in interest.
    We intend this change in the definition and the changes in proposed 
Sec. 774.17 to be more consistent with the permitting requirements for 
a successor in interest in section 506(b) of the Act. Section 506(b) of 
the Act requires that the person proposing to continue mining and 
reclamation operations under the existing permittee's approved mining 
and reclamation plans must apply for a new permit within 30 days of 
succeeding to the interests of the existing permittee. The person also 
must be able to obtain bond coverage equivalent to the coverage 
obtained by the existing permittee.
    We propose ``violation notice'' to mean any written notification 
from a governmental entity of a violation of the Act or any Federal 
regulation issued under the Act, a State program, or any Federal or 
State law, or regulation pertaining to air or water environmental 
protection in connection with a surface coal mining operation. The 
definition includes, but is not limited to: (1) a notice of violation; 
(2) an imminent harm cessation order; (3) a failure-to-abate cessation 
order; (4) a final order, bill, or demand letter pertaining to a 
delinquent civil penalty; (5) a bill or demand letter pertaining to 
delinquent reclamation fees; (6) a notice of bond forfeiture where one 
or more violations upon which the forfeiture was based have not been 
corrected; (7) a notice of bond forfeiture where the cost of 
reclamation has exceeded the amount forfeited, or in States with bond 
pools, a determination that additional reclamation or reimbursement is 
required.
    In addition to moving the definition of ``violation notice'' from 
Sec. 773.5 to Sec. 701.5, we are proposing several amendments. The 
phrase ``delinquent abandoned mine reclamation fees,'' which is in the 
current definition, is changed to ``delinquent reclamation fees'' to be 
more consistent with language in section 402 of the Act. The definition 
also would apply to a notice of bond forfeiture where the cost of 
reclamation has exceeded the amount forfeited and, in States with bond 
pools, a determination that additional reclamation or reimbursement is 
required. This is intended to cover additional circumstances of bond 
forfeiture in response to information gathered in the public outreach.
    We propose to move the definitions of ``Federal violation notice'' 
and ``State violation notice'' from Sec. 773.5 to Sec. 701.5.

B. Section 773.5--Definitions

    We propose to move each regulatory definition currently contained 
in Sec. 773.5, with the exception of ``ownership or control link,'' 
``owned or controlled'' and ``owns or controls'' to Sec. 701.5. We 
propose to eliminate definition the of ``ownership or control link.'' 
``Ownership or control link'' is too closely associated with the way we 
implemented the 1988 ``ownership or control'' and related rules that 
the Appeals Court invalidated. Our reasons for proposing to move and 
amend the definition of ``owned or controlled'' or ``owns or controls'' 
to Sec. 778.5 are discussed below, in that section. The net result of 
these proposed changes to Sec. 773.5 means is that this section is no 
longer required under part 773.

C. Section 773.10--Information Collection

    We propose to amend the information collection provision in 
Sec. 773.10. Consistent with the Paperwork Reduction Act, we note in 
paragraph (a) that the Office of Management and Budget (OMB) has 
approved the information collection requirements of this part. The 
regulatory authorities will use this information in processing surface 
coal mining permit applications. Persons intending to conduct such 
operations must respond to obtain a benefit. A Federal agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number. The OMB clearance number for this part is 1029-NEW.
    In proposed paragraph (b) we estimate that the public reporting 
burden for this part will average 34 hours per response, including time 
spent reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. Send comments regarding this burden 
estimate or any other aspect of these information collection 
requirements, including suggestions for reducing the burden, to the 
Office of Surface Mining Reclamation and Enforcement, Information 
Collection Clearance Officer, Room 210, 1951 Constitution Avenue, NW, 
Washington, DC 20240; and the Office of Management and Budget, Office 
of Information and Regulatory Affairs, Attention: Interior Desk 
Officer, 725 17th Street, NW, Washington, DC 20503. Please refer to OMB 
Control Number 1029-NEW in any correspondence.

D. Section 773.15--Review of Permit Applications

    At Sec. 773.15, we propose to revise the general requirements to be 
consistent with other changes we are proposing today and to include 
additional responsibilities for regulatory authorities in reviewing 
permit applications. These responsibilities include determining permit 
eligibility and requiring information to be accurate and complete. We 
also propose to ensure that applicants, and those persons who certify 
themselves to be the

[[Page 70592]]

owners and controllers of an applicant, comply with these requirements 
in order to obtain a permit for surface coal mining and reclamation 
operations.
    Paragraph (a)(1) is proposed to be amended by changing the 
reference to a hearing in the last sentence from (b)(2) of this section 
to part 775. Part 775 provides requirements for administrative and 
judicial review of decisions on permits.
    Proposed paragraph (a)(3) requires that the regulatory authority 
make a determination under proposed Sec. 773.15 as to the eligibility 
of every applicant under Sec. 773.16 before an applicant may receive a 
permit. Proposed Sec. 773.16 provides for a determination of permit 
eligibility and is discussed below.
    Proposed paragraph (a)(3)(i) provides that the regulatory authority 
must evaluate each application for a permit to determine whether it 
contains accurate and complete information to make the finding required 
under Sec. 773.15(c)(1).
    Proposed paragraph (a)(3)(ii) provides that if, at any time during 
the review process, the regulatory authority determines that the 
applicant has omitted, or provided inaccurate or incomplete, legal 
identity, compliance, or technical information, the regulatory 
authority must require the applicant to correct the omission, 
inaccuracy, or inconsistency. It also provides that the regulatory 
authority may discontinue review of the application until the issue is 
resolved. Such failure to provide accurate and complete information 
will result in, at a minimum, a delay in the approval of an application 
for a permit.
    Proposed paragraph (b) requires that the regulatory authority 
review each applicant's legal identity information, permit history, and 
compliance history. We have restructured and amended the provisions at 
Sec. 773.15(b) to enable regulatory authorities to evaluate an 
applicant based upon a three-part review. In reviewing the permit 
application and deciding whether to place additional conditions on a 
permit, the regulatory authority will evaluate the applicant's (1) 
legal identity information, (2) permit history, and (3) compliance 
history. This evaluation process incorporates the use of investigations 
to build a body of findings in the assessment of an applicant's 
eligibility.
    Proposed paragraph (b)(1), the first part of the permit eligibility 
review process, requires the regulatory authority to make an initial 
determination whether the applicant's legal identity information 
submitted under Sec. 778.13 is accurate and complete based upon the 
best information available. Within 30 days after the preliminary 
determination that the information is accurate and complete, regulatory 
authorities are required to update the relevant records in AVS. The 
determination and update of AVS records would have to occur before any 
regulatory authority request for applicant compliance reports from AVS 
under paragraph (b)(3) in this section. This preliminary determination 
should not be confused with the finding the regulatory authority makes 
on all information in the permit application under Sec. 773.15(c)(1).
    Proposed paragraph (b)(1)(i) requires that, if the regulatory 
authority finds that an applicant, permittee, operator, or any owner, 
controller, principal, or agent of the applicant, permittee, or 
operator has knowingly or willfully concealed information about any 
person owning or having the ability to control the applicant, 
permittee, or operator, the regulatory authority will follow the 
courses of action described in paragraph (b)(1)(i)(A) and (B).
    Proposed paragraph (b)(1)(i)(A) requires the regulatory authority 
to inform the applicant in writing of the regulatory authority's 
finding; request that the applicant, permittee, or operator disclose 
all persons owning or having the ability to control the applicant; and 
convey to the applicant, permittee, or operator that the information 
must be provided to the regulatory authority before it makes a decision 
on the application.
    Proposed paragraph (b)(1)(i)(B) requires the regulatory authority 
to investigate the applicant, permittee, or operator and the 
information provided to determine if the request made under paragraph 
(b)(1)(i)(A) has been met with full disclosure. This provision is the 
first instance where we have incorporated investigation into the review 
of permit applications. Investigation is one of the four key elements 
of this redesigned approach to our regulatory program, in addition to 
permit information, permit eligibility, and alternative enforcement. In 
this provision, we intend that the regulatory authority actively 
determine whether the applicant, permittee, or operator has complied 
with the regulatory authority's request to fully disclose all 
relationships under proposed Sec. 778.13.
    Proposed paragraph (b)(1)(i)(B)(1) provides that, depending on the 
results of the applicant's response to the provision in paragraph 
(b)(1)(i)(A) and the investigation under (b)(1)(i)(B), the regulatory 
authority may deny approval of the application. We believe that if the 
applicant, permittee, or operator fails to comply with the regulatory 
authority's request to fully disclose all relationships under proposed 
Sec. 778.13, the applicant, permittee, or operator has not complied 
with the requirements of Sec. 778.13, and therefore, the application is 
incomplete. On that basis, the regulatory authority may elect to deny 
approval of the application.
    Proposed paragraph (b)(1)(i)(B)(2) provides that, if the regulatory 
authority denies the application under paragraph (b)(1)(i)(B)(1), the 
regulatory authority may refer the applicant, or owner, controller, 
principal, or agent of the applicant, to the Attorney General or 
equivalent State office for prosecution under section 518(g) of the Act 
and proposed Sec. 846.11 of the regulations.
    Proposed paragraph (b)(2), the second part of the permit 
eligibility review process, provides for the review of the applicant's 
permit history. First, proposed paragraph (b)(2)(i) requires the 
regulatory authority to use AVS and any other available databases or 
information to review the permit history of the applicant, and that of 
any person with the ability to control the applicant. The purpose of 
the review is to determine how long they have conducted surface coal 
mining operations and whether their conduct is in compliance with 
applicable requirements of the Act, Federal regulations and equivalent 
State regulations.
    Proposed paragraph (b)(2)(ii) provides that an applicant with five 
or more years of experience as a permittee or operator of a surface 
coal mining operation will not be subject to additional permit 
conditions proposed at Sec. 773.18 unless any person with the ability 
to control the applicant or the operation is responsible for an 
outstanding violation.
    In proposed Sec. 773.15, we introduce the concept of considering 
past mining experience and placing additional conditions on issued 
permits for those applicants lacking successful experience. We propose 
that five years is the minimum amount of experience that an applicant 
should have in order for a regulatory authority to be reasonably 
confident that a surface coal mining and reclamation operation will be 
successful and not become a burden to the regulatory authority and the 
general public. We propose the experience criterion to provide 
regulatory authorities with an indicator of the potential success of a 
surface coal mining operation.
    Proposed paragraph (b)(2)(iii) provides that, if it appears that 
none of the persons identified in the application has any previous 
mining experience, the regulatory authority must request that the 
applicant affirmatively state that neither the applicant nor any person 
owning or having the ability to control

[[Page 70593]]

the proposed operation possesses mining experience. This provision also 
requires that the regulatory authority investigate to determine whether 
any person other than those identified in the application will control 
the proposed operation as either an operator or other controller. As 
with paragraph (b)(2)(ii) above, we propose paragraph (b)(2)(iii) to 
provide regulatory authorities with an indicator of the potential 
success of a surface coal mining operation.
    Failed mining operations place increased burdens on State programs 
to reclaim such sites. We believe that permittees that fail, and their 
owners and controllers, must be required to comply with special 
conditions in order to continue to receive approval for additional 
permits. We received comments during the public outreach preceding the 
development of this proposal that stressed the need for some form of 
distinguishing criteria to apply to applicants for permits. It was 
suggested that we consider giving an advantage in the permitting 
process to applicants with successful compliance records and impose 
additional requirements on applicants who do not meet the criteria.
    We invite comments on the two criteria proposed here in 
Sec. 773.15--five or more years of mining experience and successful 
environmental compliance--as well as suggestions for other criteria 
that may be used to distinguish among proposed operations that are 
likely to be successful and those that are not. We also invite comments 
on the criterion proposed in Sec. 773.16--withholding of the 
presumption of abatement of a notice of violation--and other 
suggestions as to how the distinctions may be implemented. For example, 
should the criteria apply to the owners and controllers of applicants 
in addition to the applicant itself?
    Paragraph (b)(3), the third part of the permit eligibility review 
process, provides for the review of an applicant's compliance history. 
We propose that this review include a review of violations and an 
examination of the applicant's controllers.
    Proposed paragraph (b)(3)(i) provides that the regulatory authority 
must request a report from AVS on the applicant's history of compliance 
with SMCRA for an application for a permit; revision; renewal; 
transfer, assignment, or sale of the rights granted under a permit; and 
an application from a successor in interest to the rights granted under 
a permit. This provision specifies all of the circumstances under which 
a review of violations must be conducted and includes each of the 
relevant permitting or approval processes. We intend that an applicant 
under each of these processes must prove eligible to hold a permit 
under the permit eligibility standard of section 510(c) of the Act. In 
the case of an application for a renewal of a permit, the burden of 
proof to find that an applicant is not eligible under section 510(c) 
rests with the regulatory authority, as provided under 
Sec. 774.15(c)(2).
    Paragraph (b)(3)(i) also would replace OSM's current policy that 
requires regulatory authorities to obtain permit eligibility 
recommendations on pending applications from AVS through a two-step 
process. Currently, the regulatory authority first uses the AVS to 
obtain a computer system-generated recommendation of permit 
eligibility. Second, to ensure that AVS data is reliable and up-to-
date, OSM reviews the system recommendation and supporting data and 
uses AVS to provide a final recommendation to the regulatory authority.
    In the future, instead of providing permit eligibility 
recommendations, we would use AVS to provide a variety of reports, 
including a report on applicants and violations on the operations they 
own or control, for use by the regulatory authority in reviewing 
applications and permits. Consistent with the principle of State 
primacy, regulatory authorities would then perform their own analyses 
of an applicant's legal identity information, permit history, and 
compliance history, and make permitting decisions based on their 
findings without receiving a recommendation from OSM. Our role would be 
to administer and operate the AVS and maintain the integrity of the 
system data. The State, subject to OSM oversight reviews, would have 
full authority in deciding whether to issue a permit. As discussed 
below at Sec. 773.15(b)(3)(ii), the AVS report on the compliance 
history of the applicant and the AVS report on the applicant's owners 
and controllers will be used for distinctly different purposes.
    Proposed paragraph (b)(3)(i)(A) provides that the regulatory 
authority will rely upon the applicant's compliance history, and the 
history of operations owned or controlled by the applicant, to make a 
permit eligibility finding under section 510(c) of SMCRA, unless there 
is an indication that the history of persons other than the applicant 
should be included as well. This provision has been expressly crafted 
to reflect the January 31, 1997, ruling in NMA v. DOI. The Appeals 
Court ruled that OSM could not apply section 510(c) of the Act to the 
individual owners or controllers of an applicant. In other words, OSM 
could not deny permits under section 510(c) based upon the violations 
of those who controlled the applicant.
    In proposed Sec. 773.15, we have provided for regulatory 
authorities to obtain compliance history reports on persons in addition 
to the applicant for the purposes of determining permit eligibility. As 
described in (b)(3)(i)(G) below, when certain persons who own or 
control an applicant are, themselves, barred from mining, that 
prohibition could be sufficient to warrant denial of the permit 
application under provisions other than Sec. 510(c). The regulatory 
authority may identify such persons by way of investigation or through 
other information available to the regulatory authority.
    Proposed paragraphs (b)(3)(i)(B)(1) through (3) provide that if the 
applicant, or any surface coal mining operation owned or controlled by 
the applicant, has an outstanding violation, the regulatory authority 
may not approve the application unless one of the following apply:
     the applicant obtains a properly executed abatement plan 
or payment schedule that is approved by the regulatory authority with 
jurisdiction over the violation;
     the violation is in the process of being abated;
     the violation is the subject of a good faith 
administrative or judicial appeal contesting the validity of the 
violation; or
     the violation is subject to the presumption of NOV 
abatement under proposed Sec. 773.16(b).
    In addition, proposed paragraph (b)(3)(i)(C) requires that any 
application approved with outstanding violations must be conditioned in 
accordance with Sec. 773.17(l).
    These provisions describe the actions an applicant must take in 
order to obtain approval when the applicant, or an operation owned or 
controlled by the applicant, has outstanding violations. ``Outstanding 
violation'' is proposed to be defined at Sec. 701.5 and means a 
violation notice that remains unabated or uncorrected beyond the 
abatement or correction period. A proposed change in the definition of 
``violation notice'' will add a new violation type to the more typical 
violations under this review process. An applicant will be ineligible 
for a permit if the applicant has forfeited a performance bond and has 
failed to reimburse the regulatory authority for any costs in excess of 
the amount forfeited to achieve full reclamation under the applicable 
reclamation standards in Sec. 800.50(d)(1). Similarly, in States with 
bond pools--a type of

[[Page 70594]]

bonding where many operators contribute to a combined fund--an 
applicant will not be eligible for a permit if a determination is made 
that additional reclamation or reimbursement is required beyond any 
existing reclamation or the amount contributed to the bond pool by the 
applicant. This is intended to provide relief to regulatory authorities 
from the harmful effects of bond forfeiture on their programs, 
especially from permittees responsible for repeated bond forfeiture. In 
instances where States have been required to complete reclamation at an 
additional cost to the State, an applicant would not be eligible if it 
failed to reimburse the State for the cost of reclamation in excess of 
the amount of the performance bond. The provisions proposed here are 
based, in part, upon the current regulation at Sec. 773.15(b)(1), 
(b)(1)(i), and (b)(1)(ii).
    Proposed paragraph (b)(3)(i)(D) is the first of two provisions that 
describe circumstances under which an applicant or other person will be 
found ineligible to hold a permit. This paragraph provides that OSM 
will serve a preliminary finding under 43 CFR Sec. 4.1351 upon an 
applicant or operator if (1) the applicant or operator is found to have 
owned or controlled mining operations with a demonstrated pattern of 
willful violations of the Act and its implementing regulations, and (2) 
the violations are of such nature and duration that they result in 
irreparable harm to the environment, so as to indicate an intent on the 
part of the applicant or operator not to comply with the Act or 
implementing regulations.
    Proposed paragraph (b)(3)(i)(E) provides that the applicant or 
operator may request a hearing under 43 CFR Sec. 4.1350 et seq., with 
the Office of Hearings and Appeals within 30 days of receipt of the 
preliminary finding. It further provides that, if the applicant or 
operator files a request for a hearing under 43 CFR 4.1350 et seq., the 
Office of Hearings and Appeals will give written notice of the hearing 
to the applicant or operator and must issue a decision within 60 days 
of the filing of the request for a hearing.
    Proposed paragraph (b)(3)(i)(F) provides that the decision of the 
administrative law judge may be appealed to the Interior Board of Land 
Appeals under procedures set forth in 43 CFR 4.1271 et seq. within 20 
days of receipt of the decision.
    We propose this amendment, which is based upon the current 
regulation at Sec. 773.15(b)(3), to more fully state the administrative 
remedies and due process rights of persons preliminarily found to be 
permanently ineligible for a permit. We believe a full description of 
the remedies and rights is important because regulatory authorities 
should be able to implement the second part of section 510(c) of the 
Act to permanently withhold the benefit of a surface coal mining permit 
from those persons who have committed the most flagrant violations and 
have not made a reasonable attempt to rectify the resulting 
environmental damage. However, we also recognize that upholding a 
preliminary finding under this proposed provision would have very 
serious consequences. We intend to ensure full due process and those 
rights are expressly addressed in the implementing regulation.
    Proposed paragraph (b)(3)(i)(G) is the second of three provisions 
that describe circumstances under which an applicant will be found 
ineligible to hold a permit. It provides that an applicant will not be 
eligible for a permit if the applicant or anyone proposing to engage in 
or carry out operations on the proposed permit has been barred, 
disqualified, restrained, enjoined, or otherwise prohibited from mining 
under Sec. 773.15(b)(3)(i)(D) or proposed Sec. 846.16 by a Federal or 
State court. Proposed Sec. 846.16, civil actions for relief, is 
discussed below in part 846.
    We cannot deny a permit under section 510(c) of the Act based upon 
the violations of an applicant's owners or controllers at other 
operations. However, we can and should withhold permit approval if the 
person controlling the operation has been barred, disqualified, 
restrained, enjoined, or otherwise prohibited from mining by 
administrative or judicial decision.
    We must seek to protect the benefit to hold a surface coal mining 
permit for those persons who have demonstrated compliance with 
statutory and regulatory requirements. In cases where a person is 
adjudicated to have demonstrated such disregard for the environment 
that the person has been barred, disqualified, restrained, enjoined, or 
otherwise prohibited from mining, the presence of such a person as an 
owner, controller, or agent of an applicant is sufficient basis for 
denying the permit. To decide otherwise would result in actions that 
would contravene the administrative or judicial decision issued against 
such a person.
    Paragraph (b)(3)(ii) provides for the examination of the 
controllers of the applicant to determine if any controller is 
responsible for outstanding violations. The provisions at (b)(3)(ii) 
are intended to enable regulatory authorities to compel compliance to 
rectify or otherwise resolve outstanding violations. We intend that the 
eligibility of its controllers based on outstanding violations will not 
impair the eligibility of the applicant. However, we also intend that 
regulatory authorities will identify persons who have failed to fulfill 
their environmental and debt obligations under the Act and its 
implementing regulations.
    Proposed paragraph (b)(3)(ii)(A) provides that the regulatory 
authority will request a report from AVS to identify whether the owners 
or controllers of an applicant are also owners or controllers of a 
surface coal mining operation at the time a violation notice was issued 
and such violation notice remains outstanding. Unlike the report 
required for the applicant, the report required for owners and 
controllers will not be used as a basis to determine the eligibility of 
the applicant for a permit. Instead, it will be used to identify 
whether the owners or controllers of an applicant should be subject to 
investigation to determine whether remedial enforcement, including 
alternative enforcement actions, are appropriate to compel compliance 
with SMCRA and its implementing regulations. This provision establishes 
that OSM will no longer provide recommendations regarding the 
eligibility of applicants, either from AVS or from our quality 
assurance activities. Instead, we will provide reports of organized 
information generated from AVS. Regulatory authorities must use this 
information to formulate their own determinations.
    Proposed paragraph (b)(3)(ii)(B) requires that the appropriate 
regulatory authority investigate each person and violation to determine 
whether alternative enforcement action is appropriate, as discussed 
below under part 846. OSM and the State regulatory authority will make 
the appropriate determination or referral for violations under their 
jurisdiction and must enter the results of each determination or 
referral into the AVS. Paragraph (b)(3)(ii)(B) enables regulatory 
authorities to compel the owners and controllers of applicants to 
fulfill their environmental and debt obligations where they are found 
to be responsible for violations. We believe that regulatory 
authorities must still compel compliance from these persons. To 
accomplish this, we are amending part 846 to provide for remedies 
available to regulatory authorities to compel compliance from the 
owners and controllers of applicants who are responsible for 
outstanding violations.

[[Page 70595]]

    Proposed paragraph (b)(3)(ii)(C) provides that if the regulatory 
authority finds that an applicant has less than five years experience 
in surface coal mining operations or has owners or controllers that are 
linked to outstanding violations, the regulatory authority will 
consider the applicant to have insufficient or unsuccessful 
environmental compliance and therefore be subject to additional permit 
conditions under proposed Sec. 773.18, which is discussed below. We 
propose to make clear distinctions between applicants that have 
demonstrated successful mining and reclamation experience, compliance 
with the Act and regulations, and those applicants that have not. As 
indicated above, we are interested in receiving comments specific to 
the proposed criteria (less than five years experience; owners or 
controllers linked to violations) for distinguishing among applicants 
eligible for permit approval in determining which applicants should be 
subject to additional permit conditions. We are also interested in 
receiving comments on what permit conditions under proposed Sec. 773.18 
would be appropriate.
    Paragraph (b)(4) is unchanged from the current regulation, except 
to correct ``September 30, 1994'' to ``September 30, 2004'' at 
Sec. 773.15(b)(4)(i)(C)(1). Paragraphs (c) and (d) are unchanged from 
the current regulation.
    Proposed paragraph (e) provides for the final compliance review of 
an application. It requires that, after an applicant is determined 
eligible, but before the permit is issued, the regulatory authority 
will review any new information submitted or discovered during the 
permit application review. Proposed paragraph (e) further provides 
that, no more than three business days before permit issuance, the 
regulatory authority must again request a report from AVS on the 
applicant's history of compliance to ensure that the applicant is, or 
operations owned or controlled by the applicant are, not currently 
linked to any outstanding violations. This provision is based, in 
principle, on agreements with the States documented in Memoranda of 
Understanding (MOU) regarding AVS operation and current OSM policy 
regarding the frequency and timing for States to obtain permit 
eligibility recommendations prior to making permitting decisions. We 
also intend to incorporate other provisions contained in the MOUs that 
remain relevant to the regulatory program under this proposal, and 
eliminate the need for the MOUs.
    This proposal also has the effect of removing the current provision 
at Sec. 773.15(b)(2). This regulation refers to the certification of 
violation information provided by an applicant under Sec. 778.14. This 
certification requirement is proposed to be removed from the 
regulations at proposed Sec. 778.14. The current provision also refers 
to presumptions. One significant effect of the proposed redesign 
approach would be to eliminate the use of presumptions of ownership or 
control. We propose to eliminate the concept of the rebuttable 
presumption of ownership or control, discussed in more detail at 
Sec. 778.5, and the effect of presumptions on permit eligibility, 
discussed above at Sec. 773.15(b)(3).
    With respect to current Sec. 773.15(b)(2), the regulation is based 
upon the presumption of links to violations and is not in conformity 
with the conceptual basis of this proposal. The remaining portions of 
the current regulation at Sec. 773.15(b)(2) regarding the status of 
violations disclosed under Sec. 778.14 and the terms of permit 
issuance, have been incorporated into proposed Sec. 773.15(b)(3)(i), 
discussed above, and Sec. 773.18, discussed below.

E. Section 773.16--Permit Eligibility Determination

    We propose to create Sec. 773.16 to provide for permit eligibility 
determinations. These provisions represent the net effect of the 
regulatory authority's review of permit applications in the proposed 
amendments to Sec. 773.15(b), discussed above in Sec. 773.15.
    Proposed paragraph (a) requires that the regulatory authority 
determines whether the applicant is eligible based upon the permit and 
compliance history of the applicant, operations the applicant owns or 
controls, and operations it owned or controlled provided for in 
proposed Sec. 773.15(b).
    Paragraph (a)(1) further provides that the regulatory authority 
will determine whether the application for a permit should be approved 
subject to additional permit conditions proposed in Sec. 773.18, 
depending upon the applicant's permit and compliance history and the 
compliance history of the applicant's owners and controllers. These 
permit conditions are in addition to those routinely required of 
applicants under Sec. 773.17. These additional conditions would be 
required for applicants that either fail to meet either the experience 
requirement or whose owners or controllers are found to be responsible 
for outstanding violations. We invite comments specifically addressing 
the criteria for distinguishing which applicants should be subject to 
additional permit conditions and what type of conditions should be 
imposed.
    Paragraph (a)(2) requires the regulatory authority to send the 
applicant written notice if found ineligible. The regulatory authority 
will include in the notice the reasons you were found ineligible and 
how to challenge a finding on the ability to control a surface coal 
mining operation.
    Proposed paragraph (b) provides for the presumption of NOV 
abatement. The proposed provision states that, in the absence of a 
failure-to-abate cessation order, the regulatory authority may presume 
that a notice of violation issued under Sec. 843.12 or under a Federal 
or State program is being corrected to the satisfaction of the agency 
with jurisdiction over the violation where the abatement period for the 
notice of violation has not yet expired. Paragraph (b) further provides 
that permits approved utilizing the presumption of NOV abatement will 
be conditioned as required under proposed Sec. 773.17(l). Paragraph (b) 
further provides that the presumption will not apply: (1) if the 
abatement period has expired; (2) to applicants subject to additional 
permit conditions under proposed Sec. 773.18; (3) where evidence that 
the violation is not being abated is either set forth in the permit 
application or discovered; or (4) if the notice of violation is issued 
for nonpayment of reclamation fees or civil penalties.
    Proposed paragraph (b)(3) provides the regulatory authority may not 
approve the application unless the applicant meets one of the criteria 
addressing the violation under paragraph Sec. 773.15(b)(3)(i)(B).

F. Section 773.17--Permit Conditions

    We have established in current regulations permit conditions that 
are routinely attached to all approved permits. In this proposal, we 
propose to amend paragraphs (h)(1) and (h)(2) and to add new conditions 
under paragraphs (i) through (m).
    Proposed paragraph (h) provides that within thirty days after a 
cessation order is issued under Sec. 843.11, or the State program 
equivalent, for operations conducted under the permit, the permittee 
must either submit to the regulatory authority updated or corrected 
information, current to the date the cessation order was issued, or 
notify the regulatory authority in writing that there has been no 
change since the submission of such information. This provision applies 
except where a stay of the cessation order is granted and remains in 
effect.
    Proposed paragraph (h)(1) provides that a permittee or operator 
must

[[Page 70596]]

provide any new information needed to update or correct information 
previously submitted to the regulatory authority under Sec. 778.13(c), 
(e), and (g). This amendment is proposed in order to revise the cross-
references to Sec. 778.13. To the extent that provisions at Sec. 778.13 
are revised, the cross-references here in Sec. 773.17 are amended.
    Proposed paragraph (h)(1)(i) provides that if the information 
required in a permit application under Sec. 778.13(c), (e), and (g) has 
not been previously submitted to the regulatory authority, it must be 
submitted. We propose to amend the current provision such that ``permit 
applicant'' is changed to ``permit application''.
    We propose to add paragraph (i) to Sec. 773.17. It provides that 
the permittee, operator, or another person named in the application as 
having the ability to determine the manner in which the surface coal 
mining operation would be conducted will be considered the controllers 
of the permit.
    Paragraph (j) provides that: all controllers are jointly and 
severally responsible for compliance with the terms and conditions of 
the permit and regulatory program; all controllers are subject to the 
jurisdiction of the Secretary of the Interior; and a breach of the 
responsibility for compliance with the terms and conditions of the 
permit and the regulatory program may result in a controller's 
individual liability.
    Paragraph (k) provides that regulatory authorities may, at any 
time, through investigation, determine that additional persons are 
controllers. Paragraph (k) also provides that, after the permit is 
issued, if any controllers are identified by the regulatory authority 
or added by the permittee or operator, the new controller will be 
subject to the requirement to certify under proposed Sec. 778.13(m), 
discussed below.
    We propose to add this condition to all approved permits to 
accomplish several purposes. First, and most notably, all persons named 
in an application that have the ability to determine the manner in 
which the surface coal mining operation is conducted will be considered 
controllers of the permit. Under the redesigned approach, we are 
eliminating the use of rebuttable presumptions in the definitions of 
ownership and control. The effect of eliminating the use of the 
rebuttable presumption is that all persons identified as owners or 
controllers, or otherwise identified as having the ability to determine 
the manner in which operations are conducted, are all proposed to be 
control relationships with respect to the surface coal mining 
operation. This means that certification by such persons in an 
application will establish their responsibility under the regulatory 
program. In addition, persons having the ability to determine the 
manner in which surface coal mining operations are conducted, however 
they may be identified, are made fully aware that they are subject to 
the jurisdiction of the Secretary of the Interior for the purposes of 
their compliance with all Federal and State terms and conditions under 
which their permit is issued.
    Any breach of a controller's responsibility for compliance with the 
terms and conditions of the regulatory program may result in individual 
liability. We are enabling regulatory authorities to pursue individual 
liability through a variety of remedies, including pursuit of the 
suspension or revocation of a permit for failure to comply with the 
conditions under which a permit is issued, discussed below at proposed 
Sec. 846.15.
    We propose to add paragraph (l) to Sec. 773.17. It provides that, 
as applicable, the permittee or operator must abate or correct any 
outstanding violation or payment, absent an administrative or judicial 
decision invalidating the violation. This provision conveys to the 
owners and controllers of a permittee that issuance of a permit does 
not defer the obligation of the permittee or operator to abate or 
correct any violation notice that may be outstanding at the time of 
permit issuance. This provision applies to applicants that have been 
approved for a permit that have also received the benefit of the 
presumption of NOV abatement, proposed at Sec. 773.16(b). This 
provision is based upon the current regulation at 
Sec. 773.20(c)(1)(ii), which is a permit condition. Therefore, we 
propose to move the provision from Sec. 773.20(c)(1)(ii) to 
Sec. 773.17(l).
    We propose to add paragraph (m) to Sec. 773.17. It provides that a 
permit will be subject to any other special permit conditions the 
regulatory authority determines are necessary to ensure compliance with 
the performance standards and regulations.

G. Section 773.18--Additional Permit Conditions

    We propose to create Sec. 773.18 to provide for the permit 
conditions required of applicants eligible under Sec. 773.15(b) but 
that have less than five years experience in surface coal mining 
operations or whose controllers are responsible for outstanding 
violations and thus, have not demonstrated successful environmental 
compliance. These are permit conditions that the regulatory authority 
must require of such applicants in addition to the standard permit 
conditions provided for in Sec. 773.17. We propose these additional 
conditions to enable the regulatory authority to more closely monitor 
the operations of permittees with limited surface coal mining 
experience and whose owners and controllers have not demonstrated 
successful environmental compliance. We believe these permittees are a 
higher risk. If their operations are unsuccessful, their reclamation 
obligations would default to the regulatory authority. While the higher 
risk permittees are entitled to hold a permit under the redesigned 
approach, these permittees should be subject to greater scrutiny until 
they and their owners and controllers demonstrate their ability to 
comply with statutory and regulatory requirements with respect to their 
surface coal mining and reclamation operations.
    These proposed distinctions among applicants are based on comments 
received during the public outreach preceding the development of this 
proposal. Certain comments stressed the need for some form of criteria 
to distinguish between applicants more likely to succeed and those that 
are not. It was suggested that we consider giving an advantage to 
applicants with demonstrated successful compliance records in the 
permitting process. We invite suggestions for other criteria that may 
be used to distinguish between proposed operations that are likely to 
succeed and those that are not. Also, we invite comments on how the 
proposed criteria should be applied. For example: would the experience 
criterion apply to all persons intending to engage in or carry out 
surface coal mining operations, including the owners and controllers of 
an applicant as well as to the applicant; would the experience 
criterion mean five consecutive years; and would the experience of a 
parent company count towards the experience of an applicant?
    Proposed paragraph Sec. 773.18(a) provides that a permittee's 
failure to comply with any additional permit condition provided for in 
this section may result in a regulatory finding that the permittee is 
unable or unwilling to comply with its mining and reclamation plan. 
Paragraph (a) further provides that such a finding constitutes adequate 
reason for the regulatory authority to promptly issue an order for the 
permittee to show cause why the permit should not be suspended or 
revoked under proposed Sec. 846.15.
    Proposed paragraph (b) provides that the permittee must pay all 
civil penalties assessed under part 845 within 30 days of the date of a 
final

[[Page 70597]]

order of the Secretary or State counterpart. While all permitted 
operations are expected to pay civil penalties in a timely manner, we 
believe that for higher risk operations, untimely payment of civil 
penalties is an indicator of the potential lack of success of the 
operation.
    Proposed paragraph (c) provides that the permittee must take all 
possible steps to abate any outstanding violation before the expiration 
of the abatement period. As with the payment of civil penalties, all 
permitted operations are expected to abate violations in a timely 
manner. However, we believe that for higher risk operations, untimely 
abatement is another indicator of the potential lack of success of the 
operation.
    Proposed paragraph (d) provides that the permittee must maintain 
continuous and uninterrupted compliance with any provision of an 
abatement plan, payment schedule or other settlement agreement. We 
readily enter into agreements with permittees, operators, or other 
persons to abate violations or to fulfill financial obligations where 
they are unable to abate or pay within the required time limits. We 
count on the good faith of these persons to adhere to the abatement 
plan or payment schedule or other terms of an agreement. In the case of 
the higher risk permittee, we believe that a lapse in compliance with 
an abatement plan, payment schedule, or other settlement agreement is 
yet another indicator of the potential lack of success of the 
operation.

H. Section 773.20--Improvidently Issued Permits: General Procedures

    Proposed paragraph (a) provides for the permit review. The 
provision states that a regulatory authority which has reason to 
believe that it improvidently issued a surface coal mining and 
reclamation permit must review the circumstances under which the permit 
was issued, using the criteria in paragraph (b) of this section. 
Paragraph (a) further provides that, when the regulatory authority 
finds that the permit was improvidently issued, it must comply with 
paragraph (c) of this section. The language is unchanged from the 
current regulation.
    At paragraph (b), which provides for the review criteria to 
determine whether a permit has been improvidently issued, the numerical 
identifier (1) in the paragraph is removed. The heading and language of 
the current regulation are unchanged.
    Paragraph (b)(1)(i) of the current regulation would be re-numbered 
(b)(1). The language is unchanged from the current regulation.
    Paragraph (b)(1)(i)(A) of the current regulation would be re-
numbered (b)(1)(i) and amended. The phrase ``unabated violation'' would 
be changed to ``outstanding violation.'' This change is proposed 
because a regulatory definition for ``outstanding violation,'' proposed 
at Sec. 701.5, defines a more inclusive set of violations and, as such, 
is more applicable to the circumstance described in the provision where 
a regulatory authority finds it should not have issued a permit.
    Paragraph (b)(1)(i)(B) of the current regulation would be re-
numbered (b)(1)(ii). In addition, we propose to add a provision to 
follow (b)(1)(ii) which also describes a circumstance where a 
regulatory authority finds it should not have issued a permit. 
Therefore, the last word in paragraph (b)(1)(ii) is proposed to be 
changed from ``and'' to ``or.''
    We propose to add paragraph (b)(1)(iii) to Sec. 773.20 to provide 
that the failure of an applicant to disclose in its application any 
other relevant information that if properly disclosed at the time of 
the initial application would have made the applicant ineligible, is 
also cause for a finding that the permit was improvidently issued. We 
propose to add this provision to Sec. 773.20 in keeping with the 
emphasis placed on permit information. The amendment is also consistent 
with the provisions of the MOUs with States regarding AVS operation 
that provide for States to require the resolution of inaccurate and 
incomplete application information. In this proposal, ``permit 
information'' means information required from applicants and 
permittees.
    Paragraph (b)(1)(ii) in the current regulation would be re-numbered 
(b)(2). The language of the provision is unchanged from the current 
regulation.
    Paragraph (b)(1)(ii)(A) would be re-numbered (b)(2)(i) and amended. 
The word ``unabated'' is changed to ``outstanding'' for the same 
reasons as stated above in proposed paragraph (b)(1)(i) of this 
section.
    Paragraph (b)(1)(ii)(B) would be re-numbered (b)(2)(ii). The 
language in the provision is unchanged from the current regulation.
    Paragraph (b)(1)(iii) would be re-numbered (b)(3). Paragraph (b)(3) 
also would be amended. The word ``person'' is changed to ``operation.'' 
We propose this change because the regulatory definition of ``person'' 
at Sec. 700.5 includes ``an individual.'' The word ``operation'' is 
more in keeping with this proposal's approach to permit eligibility.
    Paragraph (b)(2), including paragraphs (b)(2)(i) and (b)(2)(ii), 
would be removed from Sec. 773.20. To the extent that Sec. 773.25 is 
amended in this proposal and Secs. 773.20(b)(2) and (3) already provide 
for the same regulations, we believe the current Sec. 773.20(b)(2) is 
an unnecessary duplication of provisions.
    We propose to amend paragraph (c) of Sec. 773.20. As discussed 
below in the individual provisions within paragraph (c), we propose to 
amend existing provisions and to add provisions to address the failure 
of an applicant to disclose accurate and complete information. These 
revisions address permit information, one of the four key elements of 
this proposal.
    Proposed paragraph (c)(1) provides that a regulatory authority 
which finds that a permit was improvidently issued must use one or more 
of the three remedial measures that follow in the succeeding paragraphs 
proposed at Secs. 773.20(c)(1)(i) through (c)(1)(iii). Paragraph (c)(1) 
is proposed to be amended to remove what we believe to be unnecessary 
language from the provision. As a result, proposed paragraph (c)(1) is 
more succinct.
    Proposed paragraph (c)(1)(i) describes the first remedial measure. 
It provides for a plan to abate the violation, or a schedule to pay the 
penalty or fee, or that the regulatory authority require the permittee 
to correct the inaccurate information or provide the incomplete 
information. We propose to amend this provision by removing ``with the 
cooperation of the responsible agency, the permittee, and persons owned 
or controlled by the permittee'' from the provision. We believe this 
language is unnecessary to the provision. Instead, we propose to add 
``or require the permittee to correct the inaccurate information or 
provide the incomplete information'' at the end of the provision. This 
change adds inaccurate or incomplete information to the criteria under 
which the regulatory authority may find a permit was improvidently 
issued. As with certain other provisions in this proposal, the concept 
governing sanctions for providing inaccurate and incomplete information 
is based upon provisions contained in the MOUs with State regulatory 
authorities regarding the operation of the AVS.
    Paragraph (c)(1)(ii) in the current regulation would be removed 
from Sec. 773.20. It provides for the imposition of a permit condition 
requiring the abatement of the violation or payment of the penalty or 
fee. We believe this requirement is more appropriate to the regulations 
governing permit conditions. Thus, we have proposed this provision as 
Sec. 773.17(j).
    Paragraph (c)(1)(iii) in the current regulation would be re-
numbered (c)(1)(ii) and is the second remedial

[[Page 70598]]

measure. Proposed paragraph (c)(1)(ii) is largely a reorganization of 
current (c)(1)(iii) and provides that the regulatory authority may 
suspend the permit until one or more of three conditions are met. The 
three conditions are provided for in proposed paragraph (c)(1)(ii).
    Proposed paragraph (c)(1)(ii)(A) provides that permit suspension 
will continue until the violation is corrected to the satisfaction of 
the regulatory authority or other issuing authority with jurisdiction 
over the violation. This provision is essentially a restatement of the 
first part of the condition stated in the current paragraph (c)(iii).
    Proposed paragraph (c)(1)(ii)(B) provides that permit suspension 
will continue until the penalty or fee is paid. This provision is 
essentially a restatement of the second part of the condition stated in 
the current regulation at paragraph (c)(iii).
    Proposed paragraph (c)(1)(ii)(C) provides that permit suspension 
will continue until the inaccurate or incomplete information is 
corrected or provided. We propose to add paragraph (c)(1)(iii) to be 
internally consistent with proposed Secs. 773.20(b)(1)(iii) and 
(c)(1)(i) that add inaccurate or incomplete information to both the 
reasons for the suspension of a permit and the conditions under which 
the suspension could be lifted or terminated.
    Paragraph (c)(1)(iv) in the current regulation would be re-numbered 
(c)(1)(iii) and is the third remedial measure. Proposed paragraph 
(c)(1)(iii) provides that the regulatory authority may rescind the 
permit under the provisions in Sec. 773.21, which is also proposed to 
be amended. We propose to add the reference to Sec. 773.21 to 
specifically reference the permit rescission procedures contained in 
that section.
    Paragraph (c)(2) of Sec. 773.20 is unchanged from the current 
regulation.

I. Section 773.21--Improvidently Issued Permits: Rescission Procedures

    We propose to amend the rescission procedures for improvidently 
issued permits at Sec. 773.21.
    The proposed introductory paragraph at Sec. 773.21 provides that a 
regulatory authority which, under Sec. 773.20(c)(1) (iii), elects to 
rescind an improvidently issued permit, must serve a notice of proposed 
suspension and rescission on the permittee and individuals who have the 
ability to control the permittee. The notice must include the reasons 
for the regulatory authority's finding under proposed Sec. 773.20(b). 
We propose two revisions to the current regulation. We propose to 
change the cross-reference from Sec. 773.20(c)(1)(iv) to 
Sec. 773.20(c)(1)(iii). We propose to add the phrase, ``and individuals 
who have the ability to control the permittee'' to the introductory 
paragraph. This proposal is consistent with the redesigned approach 
because the individual owners or controllers of an applicant or 
permittee that are responsible for outstanding violations will be 
treated separately from the applicant or permittee. The notification 
provision means that the permittee and the individuals that have the 
ability to control the permittee will be served the notice of proposed 
suspension and rescission.
    Proposed paragraph (a) provides for the automatic suspension and 
rescission of a permit. The provision states that, after a specified 
period of time, not to exceed 90 days, the permit automatically will 
become suspended. Further, not more than 90 days thereafter it would be 
rescinded, unless within those periods the permittee submits proof, and 
the regulatory authority finds, consistent with the provisions of 
Sec. 773.25, that one or more of the provisions in paragraphs (a)(1) 
through (a)(4) are met. The current regulation at Sec. 773.21(a) is 
unchanged.
    Proposed paragraph (a)(1) provides that the regulatory authority 
will not suspend or revoke the permit if the finding of the regulatory 
authority under Sec. 773.20(b) of this part was erroneous. This 
provision is unchanged from the current regulation.
    Proposed paragraph (a)(2) provides that the regulatory authority 
will not suspend or revoke the permit if the violation has been abated, 
the penalty or fee paid, or the information corrected to the 
satisfaction of the responsible agency. This provision is proposed to 
be amended such that the phrase, ``or the information corrected'' has 
been added. As we have previously indicated, the MOUs with States 
regarding AVS operation require States to resolve inaccurate and 
incomplete application information. Therefore, the amendment proposed 
at paragraph (a)(2) is also consistent with our intent to eliminate the 
need for the MOUs.
    Proposed paragraph (a)(3) provides that the regulatory authority 
will not suspend or revoke the permit if the violation, penalty, or fee 
is the subject of a good faith appeal, or of an abatement plan or 
payment schedule that is being met to the satisfaction of the 
responsible agency. This provision in Sec. 773.21 (a)(3) is unchanged 
from the current regulation.
    Proposed paragraph (a)(4) provides that the regulatory authority 
will not suspend or revoke the permit if the permittee and all 
operations owned or controlled by the permittee are no longer 
responsible for the violation, penalty, or fee, or for providing the 
information. In this provision, ``operations'' substitutes for 
``persons'' and ``or for providing the information'' is added.
    Proposed paragraph (a)(5) provides that the regulatory authority 
will not suspend or revoke the permit if the information is subject to 
a pending challenge under Sec. 773.24. In this provision, the phrase 
``the information is subject to a pending challenge under Sec. 773.24'' 
is added.
    Paragraph (b) provides for the cessation of operations following 
permit suspension or rescission and would be amended only slightly from 
the current regulation, but it is a meaningful change. The words, ``and 
reclamation'' are removed from the activities the permittee must cease 
after permit suspension or rescission so that it is clear that 
reclamation activities do, in fact, continue following the suspension 
or revocation of an improvidently issued permit.

J. Section 773.22--Identifying Entities Responsible for Violations

    We propose to withdraw current provisions in Sec. 773.22 in their 
entirety and replace them with provisions for identifying entities 
responsible for violations. The current provisions in Sec. 773.22 are 
centered on presumptions of ownership or control to create links based 
on common control between applicants and operations with violations. 
Thus, they have no meaning in the proposed redesigned approach to 
permit information, permit eligibility, investigation, and alternative 
enforcement.
    Instead, we propose to use Sec. 773.22 to establish provisions for 
regulatory authorities to identify in AVS outstanding violations 
attributable to applicants, permittees, and the controllers of surface 
coal mining operations. The concept governing the identification of 
persons responsible for violations is based upon provisions contained 
in the MOUs with State regulatory authorities regarding the operation 
of the AVS. By incorporating these provisions into this proposal, we 
intend to eliminate the need for the MOUs.
    In the introductory paragraph of Sec. 773.22, we propose to make 
clear that all persons who own or have the ability to control surface 
coal mining operations as a permittee, operator, owner, controller, or 
agent have an affirmative duty to comply with the Act, regulatory 
program, and approved

[[Page 70599]]

permit. The introductory statement sets the stage for the provisions 
that address the alternative to successful environmental compliance. In 
Sec. 773.22, we intend to provide for the identification of persons in 
AVS that are responsible for violations. In addition, we intend that 
OSM and State regulatory authorities are obligated to enter and 
maintain in AVS their respective violation information so that the 
purposes of the Act may be effectively implemented.
    Proposed paragraph (a) provides that OSM or the State regulatory 
authority with jurisdiction over the violation will investigate each 
outstanding violation of the regulatory program to determine the 
identity of those responsible for preventing and correcting the 
violation.
    Proposed paragraph (b) provides that each owner, controller, 
principal, or agent responsible for preventing or ensuring abatement or 
correction of the violation will be designated in the AVS as a person 
OSM or the State regulatory authority may compel to comply with the Act 
and other applicable laws and regulations, as necessary, to correct the 
violation. Paragraph (b) is proposed so that persons identified as a 
result of the investigation in paragraph (a) are so designated in the 
AVS as responsible for the violation.
    Proposed paragraph (c) provides that OSM and State regulatory 
authorities must enter into AVS all violations issued under the Act or 
the regulatory program no more than 30 days after the abatement or 
correction period has expired. It further provides that OSM and State 
regulatory authorities must maintain the accuracy and completeness of 
this information to reflect the most recent changes in status, such as 
abatement, correction, termination, and administrative or judicial 
appeal. Paragraph (c) is proposed to convey our commitment to maintain 
the accuracy and completeness of Federal violation data in AVS and to 
require that State regulatory authorities maintain the accuracy and 
completeness for State violation data. The integrity of Federal and 
State violation data is critical to the effective performance of the 
computer system and is therefore critical to our implementation of the 
regulatory program.
    Proposed paragraph (d) provides that OSM and the State regulatory 
authorities must either pursue the appropriate alternative enforcement 
action under part 846 against the permittee, operator, or an owner, 
controller, or agent, to compel correction of the violation, or make a 
determination that referral for alternative enforcement action is not 
warranted. Paragraph (d) further provides that the existence of a 
performance bond is not the sole basis for a regulatory authority's 
determination that alternative enforcement action is not warranted. 
Paragraph (d) would enable regulatory authorities, as a result of their 
investigation under proposed paragraph (a), to use the proposed 
alternative enforcement provisions to make, as appropriate, a 
determination under proposed Sec. 846.12, 846.14, or 846.15, or a 
referral for prosecution under proposed Sec. 846.11 or 846.16.

K. Section 773.23--Review of Ownership or Control and Violation 
Information

    We propose to remove the provisions in Sec. 773.23 from our 
regulations that provide for the review of ownership or control and 
violation information. The current provisions are centered on ownership 
or control to create links based on presumptions of common control 
between applicants and operations with violations. Insofar as we 
propose to revise definitions for ``ownership'' and ``control'' and 
eliminate the use of rebuttable presumptions, the current provisions in 
this section have no meaning in the proposed redesign.

L. Section 773.24--Procedures for Challenging a Finding on the Ability 
to Control a Surface Coal Mining Operation

    We propose to revise the provisions at Sec. 773.24 to provide for 
challenges to a finding on the ability to control a surface coal mining 
operation. We believe that the redesigned approach entitles persons, 
under certain conditions, to challenge whether they have the ability to 
control a surface coal mining operation. Unlike the current regulations 
at Sec. 773.24, the proposed provisions are not centered on the use of 
the rebuttable presumption, jurisdiction based upon whether entity 
relationships are shown in AVS, ownership or control links, or the 
existence of a violation.
    To further contribute to the clarity of Sec. 773.24, we propose to 
add headings to improve the organization of the provisions. We also 
propose to amend the language and to remove references to ``ownership 
or control links'' and to add instead ``a finding on the ability to 
control a surface coal mining operation.'' The provisions would be 
organized under the following headings: (1) who may challenge; (2) how 
to submit a written challenge; (3) the issuance of a written decision; 
(4) service procedures; (5) the relevant procedures for appeal; and (6) 
a limitation on the use of the provisions.
    We propose to change the title of Sec. 773.24 from ``Procedures for 
challenging ownership or control links shown in AVS'' to ``Procedures 
for challenging a finding on the ability to control a surface coal 
mining operation.'' The proposed change of the section's title 
illustrates the change in the focus of these procedures.
    Proposed paragraph (a) provides for who may challenge a finding on 
the ability to control a surface coal mining operation. It states that 
any person listed as owning or controlling a surface coal mining 
operation in a pending permit application, or who OSM or a State 
regulatory authority finds as an owner or controller, may, prior to 
providing certification under proposed Sec. 778.13(m), challenge the 
listing or finding in accordance with paragraphs (b) through (d) of 
proposed Sec. 773.25. We propose to change the phrase, ``[a]ny 
applicant or other person'' to ``[a]ny person'' for succinctness. The 
definition of ``person'' at Sec. 700.5 includes all entities that are 
entitled to make use of these procedures.
    We propose to amend the current provision to clarify that persons 
who wish to challenge a finding on their ability to control a surface 
coal mining operation are entitled to do so, either (1) while the 
relevant application is pending before the regulatory authority, or (2) 
after OSM or the regulatory authority has found that a person has the 
ability to control an operation but was not identified to the 
regulatory authority either by the applicant or later by the permittee. 
We believe that once a person certifies, under proposed Sec. 778.13(m), 
to being a controller of the applicant and under the jurisdiction of 
the Secretary and the regulatory program, that any attempt to challenge 
a finding of control is without merit.
    We believe that while an application is pending before the 
regulatory authority, a person has sufficient knowledge and opportunity 
to challenge its ability to control the proposed operation. In the case 
of persons that OSM or the regulatory authority discovers have the 
ability to control the operation after a permit is issued, we believe 
such persons are entitled to challenge the finding. However, we also 
believe that such persons and the permittee are also subject to 
investigation, under proposed Sec. 773.15(b)(1)(i), as to the 
circumstances surrounding the permittee's failure to disclose the 
controller.
    Proposed paragraph (b) explains how a person may challenge a 
finding on the ability to control a surface coal mining

[[Page 70600]]

operation. It states that any person who wishes to challenge his status 
in the application, or a finding that he has or had the ability to 
control a surface coal mining operation, must submit a written 
explanation of the basis of the challenge to the agency with 
jurisdiction over any existing violations, or absent a violation, to 
the agency with jurisdiction over the pending application. The written 
challenge should be accompanied by supporting evidence and supporting 
documents.
    Proposed paragraph (c) provides for the agency's written decision 
in response to a challenge of a finding on the ability to control a 
surface coal mining operation.
    Proposed paragraph (c)(1) provides that the agency with 
jurisdiction will review any information submitted under paragraph (b) 
and will issue a written decision on whether the person filing the 
challenge has the ability to control the relevant surface coal mining 
operation. Proposed paragraph (c)(1) further provides that the agency 
issuing the decision will notify the person and any regulatory 
authorities with an interest in the challenge. The agency issuing the 
decision is also required to update, as necessary, the relevant 
information in AVS. By way of this provision, we intend that the agency 
with jurisdiction will issue a written decision, as a matter of record, 
on each challenge made under these procedures. In addition, we intend 
that each regulatory authority with an interest in the challenge should 
receive a copy of the decision. We also intend that the agency issuing 
the decision will update AVS, as necessary, should the decision affect 
information contained in the computer system. In keeping with our 
commitment to maintain the integrity of the system's data, we believe 
that it is important to require any necessary updates to the 
information in AVS under these procedures.
    Proposed paragraph (c)(2) requires that the agency issuing the 
decision must serve a copy of the decision on the person by certified 
mail, or by any means consistent with the rules governing service of a 
summons and compliant under Rule 4 of the Federal Rules of Civil 
Procedure, or the equivalent State counterpart. Proposed paragraph 
(c)(2) further provides that service will be complete upon delivery of 
the notice or of the mail and will not be considered incomplete because 
of a refusal to accept.
    Proposed paragraph (c)(3) provides for the appeals procedures 
afforded to persons who use these procedures. We propose that any 
person who is or may be adversely affected by a decision under 
paragraph (c)(1) may appeal the agency's decision to the Department of 
the Interior's Office of Hearings and Appeals within 30 days of service 
of the decision in accordance with 43 CFR Sec. 4.1380 et seq., or the 
equivalent State counterparts. Paragraph (c)(3) further provides that 
the decision will remain in effect during the pendency of an appeal, 
unless temporary relief is granted in accordance with 43 CFR 
Sec. 4.1386, or the equivalent State counterpart.
    Proposed paragraph (d) provides that a permittee or operator may 
not use these procedures to challenge their joint and several liability 
to pay reclamation fees under section 402 of the Act. We have proposed 
this provision to clarify that challenges to the ability to control a 
surface coal mining and reclamation operation does not include the 
ability to challenge the joint and several liability of permittees and 
operators to pay reclamation fees.

M. Section 773.25--Standards for Challenging a Finding or Decision on 
the Ability to Control a Surface Coal Mining Operation

    We propose to revise the provisions at Sec. 773.25 to provide 
standards for challenging a finding on the ability to control a surface 
coal mining operation. We propose to change the title of Sec. 773.25 
from ``Standards for challenging ownership or control links and the 
status of violations'' to ``Standards for challenging a finding or 
decision on the ability to control a surface coal mining operation'' to 
be consistent with the redesigned approach.
    Proposed paragraph (a) provides that the provisions of Sec. 773.25 
apply whenever a person exercises a right, under the provisions of 
Secs. 773.20, 773.21, or 773.24 or under the provisions of part 775, to 
challenge a decision that he or she has the ability to control a 
surface coal mining operation. We are amending paragraph (a) to delete 
the reference to Sec. 773.23. Section 773.23 would be deleted from our 
regulations as unnecessary within the proposed redesign. The phrase, 
``ownership or control link'' is deleted because the definition for the 
phrase is proposed to be deleted.
    Proposed paragraph (b) provides for agency responsibility in these 
provisions. Paragraph (b) includes four subparagraphs as follows.
    Proposed paragraph (b)(1) provides that the State regulatory 
authority which cites a violation must make a decision on a challenge 
to a finding of the ability to control surface coal mining operations 
with respect to a State-issued citation. The proposed provision is 
based upon the current regulation at Sec. 773.25(b)(1)(i). Current 
Sec. 773.25(b)(3) assigns exclusive jurisdiction to OSM for challenges 
to information shown in AVS.
    We propose to change the focus of the challenge procedures to 
whether a person has the ability to control a surface coal mining 
operation. In addition, we propose to remove the condition that a 
challenge involve a pending application. We believe the standards in 
proposed Sec. 773.25 should apply regardless of whether an application 
is pending.
    Proposed paragraph (b)(2) provides that OSM must make a decision on 
a challenge to a finding on the ability to control surface coal mining 
operations with respect to Federal violation notices. The proposed 
provision is based upon the current regulation at Sec. 773.25(b)(2) but 
is restated within the context of a challenge of a person's ability to 
control a surface coal mining operation.
    Proposed paragraph (b)(3) provides that the regulatory authority 
that processed the application or that issued the permit must make the 
decision on a challenge to a finding on the ability to control a 
surface coal mining operation where there is no outstanding violation. 
The proposed provision is based upon the current regulation at 
Sec. 773.25(b)(2)(ii), but like proposed (b)(2), it is restated within 
the context of a challenge of a person's ability to control a surface 
coal mining operation.
    Proposed paragraph (b)(4) provides that the State or Federal agency 
with jurisdiction over the violation determines whether the violation 
has been abated or corrected. The proposed provision is based upon the 
current regulation at Sec. 773.25(b)(2)(iv) but is amended to 
streamline the language of the current provision.
    Proposed paragraph (c) provides for the evidentiary standards that 
apply under Sec. 773.25. The evidentiary standards are also found at 
paragraph (c) in the current regulation.
    Proposed paragraph (c)(1) provides that in any formal or informal 
review of a challenge to a finding, the responsible agency will issue a 
written decision if it determines that the ability to control exists or 
existed during the relevant period. We propose to add this provision to 
Sec. 773.25 to expressly require a written decision from the 
responsible agency.
    Proposed paragraph (c)(2) provides that a person challenging a 
finding on his or her ability to control the relevant surface coal 
mining operation will have the burden of proving by a preponderance of 
evidence, with respect

[[Page 70601]]

to any relevant time period, that he or she did not have the ability to 
control the surface coal mining operation. Since we propose to remove 
the rebuttable presumption and ``ownership or control link'' from the 
regulations, we believe that it follows that the requirement for a 
prima facie determination in these standards is no longer necessary.
    Proposed paragraph (c)(3) provides that in meeting the burden of 
proof set forth in paragraph (c)(2), the person challenging the finding 
on his or her ability to control the relevant surface coal mining 
operation must present reliable, credible, and substantial evidence and 
any supporting explanatory materials. Paragraph (c)(3) further provides 
that such evidence and materials submitted to the appropriate 
jurisdiction may include those described in the paragraphs that follow. 
The proposed provision is based upon the current regulation at 
Sec. 773.25(c)(2), but it no longer requires the existence of an 
ownership or control link for the reasons previously stated in this 
section.
    Proposed paragraph (c)(3)(i) provides examples of evidence and 
materials that may be submitted to the agency responsible for issuing 
the written decision under these provisions.
    Proposed paragraph (c)(3)(i)(A) provides that such evidence may 
include notarized affidavits containing specific facts concerning the 
scope of the duties actually performed by the person; the beginning and 
ending dates of the person's control of the applicant, permittee, 
operator, or violator; and the nature and details of any transaction 
creating or severing the ability to control the applicant, permittee, 
operator, or violator. The proposed provision is based on the current 
regulation at Sec. 773.25(c)(3)(i)(A) but is restated to be consistent 
with proposed provisions.
    Proposed paragraph (c)(3)(i)(B) provides that such evidence may 
include certified copies of corporate minutes, stock ledgers, 
contracts, purchase and sale agreements, leases, correspondence, or 
other relevant company records. The proposed provision is based on the 
current regulation at Sec. 773.25(c)(3)(i)(B) but is restated to be 
consistent with the preceding proposed provisions.
    Proposed paragraph (c)(3)(i)(C) provides that such evidence may 
include certified copies of documents filed with or issued by any 
State, Municipal, or Federal governmental agency. The proposed 
provision is based on the current regulation at Sec. 773.25(c)(3)(i)(C) 
but is restated to be consistent with the preceding proposed 
provisions.
    Proposed paragraph (c)(3)(i)(D) provides that such evidence may 
include an opinion of counsel when supported by (1) evidentiary 
materials; (2) a statement by counsel that he or she is qualified to 
render the opinion; and (3) a statement that counsel has personally and 
diligently investigated the facts of the matter or, where counsel has 
not so investigated the facts, a statement that such opinion is based 
upon information which has been supplied to counsel and which is 
assumed to be true. The proposed provision is based on the current 
regulation at Sec. 773.25(c)(3)(i)(C) but is restated to be consistent 
with the preceding proposed provisions.
    Proposed paragraph (c)(3)(ii) provides that evidence and materials 
presented in proceedings before any administrative or judicial tribunal 
reviewing the decision of the responsible agency must be admissible 
under the rules of the reviewing tribunal. The proposed provision is 
unchanged from the current regulation at Sec. 773.25(c)(3)(ii).
    Proposed paragraph (d) provides that, following any determination 
by a regulatory authority, or any decision by an administrative or 
judicial tribunal reviewing such determination, the regulatory 
authority will review the information in AVS to determine if it is 
consistent with the determination or decision. Paragraph (d) further 
provides that if the regulatory authority finds that the information in 
AVS is not consistent with the determination or decision, it will 
promptly revise the AVS information to reflect the determination or 
decision.

N. Section 774.10--Information Collection

    We propose to amend the provisions for information collection in 
part 774, Revision, Renewal, and Transfer, Assignment or Sale of Permit 
Rights. Consistent with the Paperwork Reduction Act, in proposed 
paragraph (a) we note that OMB has approved the information collection 
requirements of part 774. Paragraph (a) further provides that this 
information will be used by regulatory authorities to determine if the 
applicant meets the requirements for revision, renewal, transfer, sale, 
or assignment of permit rights and that persons must respond to obtain 
a benefit. Paragraph (a) further provides that a Federal agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number. The OMB clearance number for this part is 1029-NEW.
    In proposed paragraph (b), we estimate that the public reporting 
burden for this part will average 32 hours per response, including time 
spent reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. Paragraph (b) further provides that 
comments regarding this burden estimate or any other aspect of these 
information collection requirements, including suggestions for reducing 
the burden, may be sent to the Office of Surface Mining Reclamation and 
Enforcement, Information Collection Clearance Officer, Room 210, 1951 
Constitution Avenue, NW, Washington, DC 20240; and the Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
Attention: Interior Desk Officer, 725 17th Street, NW, Washington, DC 
20503. Please refer to OMB Control Number 1029-NEW in any 
correspondence.
    We propose to amend Sec. 774.10 to indicate the authority under 
which we may require collection of information for part 774. This 
section conforms to OMB requirements to publish the estimated time 
needed to collect information under certain regulatory provisions. We 
invite comments on the estimated average number of hours required to 
fulfill the information collection requirements under part 774.

O. Section 774.13--Permit Revisions

    We propose to create a paragraph (e) at Sec. 774.13 to provide for 
a permittee to report certain ownership or control changes to the 
regulatory authority. Proposed paragraph (e) requires a permittee to 
report changes of officers, owners, or other controllers where the 
permittee is not required to obtain the approval of the regulatory 
authority for the change under proposed Sec. 774.17(a)(2). Changes of 
persons under proposed Sec. 774.13(e) would not be subject to the 
certification provision under proposed Sec. 778.13(m). However, a 
permittee must report such a change to the regulatory authority within 
60 days after it occurs.

P. Section 774.17--Transfer, Assignment, or Sale of Permit Rights

    We propose to amend the provisions at Sec. 774.17, regarding 
transfer, assignment, or sale of permit rights. The proposed revisions 
include a reorganization of the provisions in this section and various 
amendments to the regulatory language. We have found that there is 
great variance among the State regulatory authorities in the 
implementation of their counterparts to these regulations. In this 
proposal, we

[[Page 70602]]

intend to further clarify the use of these regulations, including 
distinguishing among those instances where a new permit is required and 
those that only require approval for modification of the existing 
permit information.
    In proposed Sec. 774.17, we have incorporated the effect of the 
change in the definition of ``successor in interest'' proposed in 
Sec. 701.5. We believe that the proposed definition and the 
corresponding procedural changes proposed here in Sec. 774.17(d) 
conform more to the statutory requirements for a successor in interest 
at section 506(b) of SMCRA. Section 506(b) of SMCRA covers the 
conditions under which a successor in interest may continue mining 
operations on an approved permit. Section 506(b) requires that the 
successor in interest obtain bond coverage and apply for a new permit 
within 30 days of succeeding to the interest of an existing permittee. 
The procedural change incorporates additional requirements, notably the 
permit eligibility requirements proposed at Secs. 773.15 and 773.16, 
and the information and certification requirements proposed at 
Secs. 778.13 and 778.14.
    The proposed heading at paragraph (a), and paragraphs (a)(1) and 
(a)(2) that follow are newly-proposed provisions. As indicated above, 
we propose to add these provisions to Sec. 774.17 to further clarify 
who must obtain approval of a transfer, assignment, or sale of permit 
rights.
    Proposed paragraph (a) contains two significant changes. First, it 
seeks to resolve the identity of the applicant in the case of a 
transfer, assignment, or sale of permit rights. We believe that the 
permittee has the obligation to obtain the approval of a transfer, 
assignment, or sale of permit rights whenever there is a change in 
ownership or other effective control over the right to conduct surface 
coal mining operations under a permit issued by the regulatory 
authority. Second, although all changes in legal identity or 
identification of interests require notification to the regulatory 
authority under proposed Sec. 774.13(e), only those changes that 
require certification under proposed Sec. 778.13(m) will require 
written approval from the regulatory authority under this section.
    Proposed paragraph (a)(1) provides that the permittee is always the 
applicant for a transfer, assignment, or sale of rights granted under a 
permit. The proposed provision further provides that the permittee has 
the burden of establishing that the application for transfer, 
assignment, or sale of permit rights complies with the requirements of 
the regulatory program.
    Proposed paragraph (a)(2) provides that the permittee must obtain 
approval of a transfer, assignment, or sale of permit rights. We 
believe that a change or addition of an operator, officer, owner, 
controller, permittee, or other person on a permit constitutes a change 
of the rights granted under that permit. The permittee must obtain 
approval of any transaction for a transfer, assignment, or sale of 
permit rights, by which the rights granted under a permit are 
transferred, assigned, or sold for any length of time, to a person not 
identified on the currently approved permit. The requirement for 
approval only applies for those whom certification under proposed 
Sec. 778.13(m) will be required.
    Proposed paragraph (b) specifies what information is required in 
the application for a transfer, assignment, or sale. We propose to 
create a heading for paragraph (b) to identify these provisions. 
Proposed paragraph (b) provides that the permittee must provide the 
regulatory authority with an application for approval of the proposed 
transfer, assignment, or sale. As proposed, the application must 
include the information specified in the four paragraphs that follow. 
This provision is proposed as a consolidation and amendment to the 
current regulation at Secs. 774.17(b), (b)(1), and (b)(3).
    Proposed paragraph (b)(1) provides that the name and address of the 
existing permittee and the relevant permit number must be provided in 
the application. This provision is proposed as an amendment to the 
current regulation at Sec. 774.17(b)(1)(i). The phrase, ``or other 
identifier'' is proposed to be deleted because we believe that for the 
transfer, assignment, or sale of rights granted under a permit, an 
identifier other than the permit number is irrelevant.
    Proposed paragraph (b)(2) provides that a brief description of the 
proposed action requiring approval must be provided in the application. 
This provision is in the current regulations at Sec. 774.17(b)(1)(ii). 
The proposed language is unchanged from the current provision.
    Proposed paragraph (b)(3) provides that the legal, financial, 
compliance, and related information and violation information required 
under Secs. 778.13 and 778.14 for the person(s) proposed to receive 
permit rights by way of transfer, assignment, or sale must be provided 
in the application. This provision is the current regulation at 
Sec. 774.17(b)(1)(iii) and is proposed to be amended. We propose to 
amend `` Part 778'' to ``Secs. 778.13 and 778.14.'' We propose to amend 
``applicant for approval'' to ``person(s) proposed to receive permit 
rights by way of.'' The latter change is proposed to be internally 
consistent within the context of the provisions proposed in paragraph 
(a).
    Paragraph (b)(4) provides that the application contain the bonding 
company's written acceptance of those proposed to gain permit rights. 
Paragraph (b)(4) is proposed as a new provision. This change is based 
on comments received from bonding companies during the outreach phase 
of this rulemaking.
    The proposed heading and provisions for proposed paragraph (c) are 
newly-created. This section explains how the regulatory authority will 
review and approve applications for a transfer, assignment, or sale of 
permit rights. We are proposing that, as with all other permitting 
processes, approval of a transfer, assignment, or sale of permit rights 
should require a written finding by the regulatory authority and should 
be subject to the permit eligibility review requirements proposed in 
Secs. 773.15 and 773.16. We propose to remove prior approval from the 
requirements under these procedures. Based upon our experience with 
this regulation, we believe that to require prior written approval of a 
transfer, assignment, or sale of permit rights is unnecessary. In most 
cases the change would have already occurred prior to the request for 
regulatory authority approval. The provisions in paragraph (c) also 
reflect the incorporation of concepts in related provisions proposed at 
part 846 into the procedures for transfer, assignment, or sale of 
permit rights.
    Proposed paragraph (c)(1) provides that the regulatory authority 
must issue a written finding either approving or denying the transfer, 
assignment, or sale.
    Proposed paragraph (c)(2) provides that the regulatory authority 
must evaluate each proposed transfer, assignment, or sale to determine 
whether a new permit or bond is required pursuant to the regulatory 
program requirements.
    Proposed paragraph (c)(3) provides that the regulatory authority 
must add the conditions specified in proposed Sec. 773.18 to the 
permit, if the transfer, assignment, or sale is to owners or 
controllers responsible for outstanding violations.
    Proposed paragraph (c)(4) provides that the regulatory authority 
must not approve the transfer, assignment, or sale if applicant is 
ineligible for a permit under proposed Secs. 773.15(b)(2) or 773.16.

[[Page 70603]]

    Proposed paragraph (c)(5) provides that the regulatory authority 
must not approve the transfer, assignment, or sale if the proposed 
recipient is enjoined or otherwise prohibited from mining under 
Sec. 846.16 or by a Federal or State court.
    Proposed paragraph (d) provides for the procedures governing a 
successor in interest. The provisions in paragraph (d) and paragraphs 
that follow are based upon the current regulations at Secs. 774.17(c), 
(d), and (f). However, the proposed provisions in paragraph (d) also 
reflect revisions based on what we believe conforms more with the 
requirements of section 506(b) of SMCRA.
    Proposed paragraph (d)(1) requires a successor in interest to apply 
for and obtain a new permit in instances where the current permittee 
gives up all rights granted under the existing permit. It further 
requires that an existing permittee cannot give up all of its rights 
granted under a permit until the successor in interest is approved by 
the regulatory authority. Section 506(b) of the Act requires that a 
successor in interest obtain a new permit. We therefore propose to add 
this requirement in these procedures.
    Proposed paragraph (d)(2) consists of the requirements a successor 
in interest must meet to continue operations under the existing permit. 
Paragraph (d)(2) is largely based upon the current regulation at 
Secs. 774.17(d) and (f). In order to continue operations, all of the 
requirements must be met.
    Proposed paragraph (d)(2)(i) provides that the existing permittee 
must first obtain written approval of the transfer, assignment, or sale 
to allow for the successor to continue operations for the 30 days 
pending submittal of a new permit application. The transfer, 
assignment, or sale application from the permittee and the items 
required from the successor under (d)(2)(i) can be submitted at the 
same time and processed simultaneously by us. The application and 
information may have to be submitted and processed rapidly to allow for 
continued uninterrupted operations.
    Proposed paragraph (d)(2)(i)(A) requires that the successor submit 
the legal, financial, compliance, and related information and violation 
information required under Secs. 778.13 and 778.14.
    Proposed paragraph (d)(2)(i)(B) requires that the successor submit 
a performance bond, or proof of other guarantee, or obtain the bond 
coverage of the original permittee, as required by Subchapter J.
    Proposed paragraph (d)(2)(i)(C) requires the successor submit a 
signed and notarized written statement assuming the liability and 
reclamation responsibilities of the existing permit.
    Proposed paragraph (d)(2)(ii) provides that we will review the 
information submitted by the successor under paragraph (d)(2)(i)(A) of 
this section using the criteria in Secs. 773.15(b)(2) and 773.16 of 
this Subchapter.
    Paragraph (d)(2)(iii) provides the requirements that if the 
successor receives preliminary written approval, they may conduct 
mining operations for up to 30 days.
    Proposed paragraph (d)(2)(iii)(A) requires that the successor must 
conduct the surface coal mining and reclamation operations in full 
compliance with the Act and the regulatory program.
    Proposed paragraph (d)(2)(iii)(B) provides that the successor must 
conduct the surface coal mining and reclamation operations under the 
terms and conditions of the existing permit and any additional terms or 
conditions that may be imposed by us.
    Proposed paragraphs (d)(2)(i)(C), (d)(2)(iii)(A), and 
(d)(2)(iii)(B) are based on the current provision at Sec. 774.17(f). 
They have been separated here for clarity. The language in the proposed 
provisions is basically unchanged from the current regulation.
    Proposed paragraph (d)(2)(iii)(C) provides that the successor must 
meet any other requirement specified by the regulatory authority.
    Proposed paragraph (d)(2)(iii)(D) provides that the successor in 
interest must submit an application for a new permit within 30 days of 
succeeding to the interests of an existing permittee.
    Proposed paragraph (d)(2)(iv) provides that if the successor 
submits a complete permit application within 30 days of succeeding to 
the existing permittee's interest and meets the other requirements 
under paragraph (d)(2(iii), then the successor can continue operations 
until we make the decision to either approve or deny the application 
for a permit. If we deny the successor's permit application, then the 
successor must cease operations.
    Proposed paragraph (d)(3) is amended from the current provision at 
Sec. 774.17(b)(2). The change means that the advertisement requirements 
will only apply to a successor in interest. Persons subject to a 
transfer, assignment, or sale of rights granted under a permit will no 
longer be required to advertise such a change.
    Proposed paragraph (d)(4) is based upon the current provision at 
Sec. 774.17(c). The effect of incorporating this requirement into 
paragraph (d) is that public participation is limited to situations 
involving a successor in interest.
    Proposed paragraph (d)(5) provides that the previous permittee will 
not be released from responsibilities for any affected area or 
disturbed area of the permit unless the successor engages in surface 
coal mining operations which affect or disturb previously affected or 
disturbed areas and the regulatory authority approves the successor's 
application for a new permit. Paragraph (d)(5) further provides that, 
until the successor's application for a new permit is approved, both 
the previous permittee and its successor will be responsible for 
violations created after the successor begins surface coal mining 
operations, but prior to the approval of the new permit. We propose to 
add this provision to ensure that the permit is protected under the 
regulations until the successor is approved as the new permittee. We 
believe that it is extremely important that both the previous permittee 
and the successor understand their environmental obligations under 
these regulations.
    Proposed paragraph (d)(6) provides that the successor in interest's 
replacement bond should not form the basis for the release of the 
previous permittee's bond. We propose to add this provision to be 
consistent with the requirements for the release of a performance bond 
under Sec. 800.40. We believe that bond release is a separate 
consideration from the eligibility of a successor and the issuance of a 
new permit. Therefore, the previous permittee would remain under the 
Secretary's jurisdiction until the permitted operation has been 
substantially re-disturbed or affected by the successors' operations. 
The regulatory authorities will continue to pursue compliance from the 
correct party that it finds responsible for creating any violations on 
the permitted area.
    Proposed paragraph (e) provides for the notification procedures 
that apply to Sec. 774.17. Proposed paragraph (e)(1) provides that the 
regulatory authority must notify the permittee and the successor, the 
new operator, or other person gaining permit rights and commenters of 
its findings. This provision is based upon the current provision at 
Sec. 774.17(e)(1) and is amended to be consistent with other proposed 
provisions in Sec. 774.17.
    Proposed paragraph (e)(2) provides that the person must immediately 
provide notice to the regulatory authority when the transfer, 
assignment, or sale of permit rights is complete. The proposed language 
is based upon the current provision at Sec. 774.17(e)(2).

[[Page 70604]]

    Proposed paragraph (e)(3) provides that the regulatory authority 
must update the relevant records in the AVS with the approved transfer, 
assignment, or sale or successor in interest information within 30 days 
of approval. We propose this mechanism to ensure that the information 
in AVS is current.

Q. Section 778.5--Applicability and Definitions

    We propose to amend and reorganize the current definition of 
``owned or controlled'' and ``owns or controls.'' We propose separate 
definitions for ``ownership'' and ``control'' and would move the 
definitions from Sec. 773.5 to Sec. 778.5. We believe that the proposed 
concepts of ownership or control are similar to the current definition, 
but that reorganizing ``ownership'' and ``control'' into separate 
definitions will improve clarity and provide a greater understanding of 
the various circumstances that meet the definitions.
    We have concluded that we should clarify the definitions and better 
define who must be disclosed in an application. This change would more 
appropriately support the permit information requirements of our 
regulations in part 778, which in turn, support the requirements under 
section 507 of the Act.
    This proposal will eliminate the use of the rebuttable presumption 
as it is applied to the current definition of ``owned or controlled'' 
and ``owns or controls'' and as it is used in various procedures that 
we propose to amend. A rebuttable presumption is where OSM's current 
definition of ``owns or controls'' presumes that a type of 
relationship, an officer for example, is able to control the surface 
coal mining operation. In our example, an officer may challenge or 
rebut the presumption of control under existing procedures at 
Secs. 773.24 and 773.25.
    We believe that the emphasis on accurate and complete information 
and the mechanisms for investigation and alternative enforcement 
reflected in this proposal render the rebuttable presumption 
unnecessary under this proposal's redesigned approach to permit 
information and permit eligibility. Those persons that certify in an 
application under proposed Sec. 778.13(m) that they have the ability to 
control the operation and are under the Secretary's jurisdiction for 
compliance have established the basis of their responsibility. In this 
proposal at Sec. 773.15(b), we have given regulatory authorities the 
ability to identify persons who have the ability to control the surface 
coal mining operation that have not been identified in an application. 
However, we have retained amended procedures for persons to challenge a 
finding on their ability to control a surface coal mining operation at 
Sec. 773.24 in order to protect the due process rights of such persons. 
Taken together, we believe these amendments eliminate the need of the 
rebuttable presumption of ownership or control. Accordingly, we propose 
to create new Sec. 778.5 and to provide for the separate definitions of 
``ownership'' and ``control'' in this new section within part 778, 
which provides for the information required from applicants and 
permittees.
    We propose ``ownership'' to mean holding an interest in a sole 
proprietorship, being a general partner in a partnership, owning 50 
percent or more of the stock in a corporation, or having the right to 
use, enjoy, or transmit to others the rights granted under a permit.
    We propose ``control'' to mean to own, manage, or supervise surface 
coal mining and reclamation operations, as either a principal or an 
agent, such that the person has the ability, alone or in concert with 
others, to influence or direct the manner in which surface coal mining 
and reclamation operations are conducted.
    We do not propose to provide an exhaustive list of persons who 
would be covered under the proposed definition of ``control.'' However, 
we propose to include in the regulation at Sec. 778.5, that persons who 
engage in or carry out surface coal mining and reclamation operations 
as an owner or controller, include, but are not limited to: (1) the 
president, other officers, directors, agent or person performing 
functions similar to a director; (2) those persons who have the ability 
to direct the day-to-day business of the surface coal mining operation; 
(3) the permittee or an operator, if different from the permittee; (4) 
partners in a partnership, the general partner in a limited 
partnership, or the participant(s), member(s), or manager(s) of a 
limited liability company; (5) persons owning the coal (through lease, 
assignment, or other agreement) and retaining the right to receive, or 
direct delivery of, the coal; (6) persons who make the mining 
operations possible by contribution (to the permittee or operator) of 
capital or other resources necessary for mining to commence or to 
continue operations at the site; (7) persons who control the cash flow 
or can cause the financial or real property assets of a corporate 
permittee or operator to be employed in the mining operation or 
distributed to creditors; and (8) persons who cause operations to be 
conducted in anticipation of their desires or who are the animating 
force behind the conduct of operations.
    At (6), examples of resources include a personal guarantee to 
obtain the reclamation bond, the assumption of responsibility for the 
liability insurance, a captive coal supply contract, and mining 
equipment.
    At (8), ``persons who cause operations to be conducted in 
anticipation of their desires'' is consistent with the holding in S & M 
Coal Co. and Jewell Smokeless Coal Co. v. OSMRE, 79 IBLA 350 (1984). 
Also at (8), ``persons who are the animating force behind the conduct 
of operations'' is consistent with the holding in Citronelle-Mobile 
Gathering, Inc. v. Herrington, 826 F.2d 16 (Temp. Emer. Ct. App. 1987), 
cert. denied sub nom Chamberlain v. United States, 108 S.Ct. 327 
(1987).
    Those who engage in or carry out surface coal mining operations by 
owning or controlling the manner in which mining operations are 
conducted are clearly within the Secretary's regulatory jurisdiction 
under sections 506(a) and 510(c) of SMCRA. However, not everyone who 
``engages in or carries out surface coal mining operations'' under 
section 506(a) of the Act needs to be identified in an application. The 
proposed definitions of ``ownership'' and ``control'' create a clear 
distinction between employees of mining operations and those who 
``engage in or carry out mining operations'' by owning, controlling, or 
influencing the manner in which mining operations are conducted. A 
broad class of persons, including employees, falls under the 
jurisdiction of the Secretary of the Interior. However, as proposed 
under this redesigned regulatory concept, we would only require a 
permit application to identify those who engage in or carry out mining 
operations as owners or controllers, and not employees per se. 
Requiring the disclosure in an application of all those who engage in 
or carry out surface coal mining operations as owners or controllers is 
critical under the redesigned approach.
    There is a valid reason for making this regulatory distinction 
between the different types of persons and business entities who engage 
in or carry out mining operations. Employees, as opposed to the owners 
and controllers of mining operations, have few responsibilities under 
the Act other than to refrain from intentional violations. See section 
518(e) of SMCRA. On the other hand, persons who can influence the 
manner in which mining operations are conducted have much broader 
duties and responsibilities under the Act. Therefore, it is more 
important that those who can directly control or

[[Page 70605]]

indirectly influence mining operations be identified in a permit 
application.
    The failure of the current regulation to require the identification 
in an application of persons who own, control, or influence mining 
operations has resulted in regulatory authorities expending significant 
resources to investigate and identify those who have breached their 
responsibilities under the Act. Additionally, many persons who engage 
in or carry out mining operations by owning or controlling mining 
operations do so without a clear understanding of their personal 
responsibilities under SMCRA. All persons who engage in or carry out 
mining operations as owners or controllers should recognize that 
breaches of their personal duties and obligations place their personal 
assets at risk under SMCRA, its implementing regulations, and the case 
law interpreting those statutory and regulatory provisions. The 
proposed definitions of ``ownership'' and ``control'' will put those 
persons and entities who fall within the definitions on express notice 
that they have personal duties and obligations under SMCRA.

R. Section 778.10--Information Collection

    We propose to amend the provisions for information collection in 
part 778, Permit Applications-- Minimum Requirements for Legal, 
Financial, Compliance, and Related Information. Consistent with the 
Paperwork Reduction Act, in proposed paragraph (a) we note that OMB has 
approved the information collection requirements of part 778. Section 
507(b) of SMCRA is the authority for regulatory authorities to require 
that persons applying for a permit to conduct surface coal mining and 
reclamation operations must submit certain information regarding the 
applicant and affiliated entities, their compliance status and history, 
property ownership and other property rights, right of entry, liability 
insurance, the status of unsuitability claims, and proof of publication 
of a newspaper notice. Paragraph (a) further provides that the 
regulatory authority uses this information to ensure that all legal, 
financial and compliance requirements are satisfied prior to issuance 
of a permit and the persons seeking to conduct surface coal mining 
operations must respond to obtain a benefit. Paragraph (a) finally 
provides that a Federal agency may not conduct or sponsor, and a person 
is not required to respond to, a collection of information unless it 
displays a currently valid OMB control number and that the OMB 
clearance number for this part is 1029-0034.
    In proposed paragraph (b), we estimate that the public reporting 
and record keeping burden for this part averages 25 hours per response, 
including time spent reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information. Send comments regarding this 
burden estimate or any other aspect of these information collection and 
record keeping requirements, including suggestions for reducing the 
burden, to the Office of Surface Mining Reclamation and Enforcement, 
Information Collection Clearance Officer, 1951 Constitution Avenue, NW, 
Washington, DC 20240; and the Office of Management and Budget, Office 
of Information and Regulatory Affairs, Attention: Interior Desk 
Officer, 725 17th Street, NW, Washington, DC 20503. Please refer to OMB 
Control Number 1029-0034 in any correspondence.
    We propose to amend Sec. 778.10 to indicate the authority under 
which we may require collection of information for part 778. This 
section conforms to OMB requirements to publish the estimated time 
needed to collect information under certain regulatory provisions. We 
invite comments on the estimated average number of hours required to 
fulfill the information collection requirements under part 778.

S. Section 778.13--Legal Identity and Identification of Interests

    We propose to amend the provisions governing the required 
disclosure of information by applicants. We tried to provide for the 
complete range of information regulatory authorities may require from 
applicants. At Sec. 778.13, we first propose to amend the title of the 
section to ``legal identity and identification of interests.'' We 
propose this change to clarify that the information requirements of 
Sec. 778.13 include both the information that identifies various 
interests of an applicant and the legal identity of the applicant. The 
change also emphasizes the importance of full disclosure of the 
applicant's identity and the identity of those who engage in or carry 
out surface coal mining operations as owners and controllers to the 
review of an application under the provisions of proposed 
Secs. 773.15(b)(1) and (b)(3)(ii).
    We also propose in Sec. 778.13 to make the disclosure of the 
information required in Sec. 778.13 easier for applicants that have 
existing or previous permits by using the technology afforded by AVS. 
Those applicants may provide the information required under Sec. 778.13 
by certifying that the information contained in AVS at the time of 
application is accurate and complete. This provision substantially 
reduces the information collection burden for such applicants. 
Moreover, we expect regulatory authorities may also reduce their review 
of the certified information under Sec. 778.13.
    We also propose to amend the provisions at Sec. 778.13 to require 
applicants to disclose the identity of any operator, known at the time 
of application, that is different from the applicant. We propose that 
the applicant provide not only the identity of the operator, but of 
those who engage in or carry out surface coal mining operations as the 
operator's owners and controllers. The entire Sec. 778.13 is proposed 
here, including parts of the regulation that we are not proposing to 
change, so that the section may be viewed in its entirety. As discussed 
below, there are certain individual provisions for which no substantial 
changes is proposed, but that have been re-numbered to accommodate 
additional provisions.
    We propose in the introductory paragraph of Sec. 778.13 that an 
application must contain the information specified in proposed 
paragraphs (a) through (n), unless the applicant has existing permits, 
in which case certification under proposed paragraph (o) also applies.
    Proposed paragraph (a) requires that an application contain a 
statement as to whether the applicant is a corporation, partnership, 
single proprietorship, association, or other business entity. This 
provision is unchanged from the current regulation.
    Proposed paragraph (b) requires that an application contain the 
name, address, telephone number, and taxpayer identification number of 
(1) the applicant, (2) the applicant's resident agent who will accept 
service of process, (3) the operator (if different from the applicant), 
(4) person(s) responsible for submitting the Coal Reclamation Fee 
Report (OSM-1) and for remitting the reclamation fee payment to OSM, 
and (5) the identity of all other persons who will engage in or carry 
out surface coal mining operations as an owner or controller on the 
permit.
    We propose three amendments in paragraph (b). First, we would 
delete reference to the voluntary submission of social security numbers 
for individuals. Instead, we will require a taxpayer identification 
number for each person identified in the provision. We would amend this 
provision under the authority of the Debt Collection

[[Page 70606]]

Improvement Act of 1996. The effect of this statute is that if a person 
wishes to conduct business with the Federal Government, then the person 
must supply its taxpayer identification number. Taxpayer identification 
number means the social security number for individuals and the 
employer identification number for businesses.
    Second, we propose to amend ``resident agent'' to ``resident agent 
who will accept service of process.'' We propose this change because we 
believe the principal function of a resident agent is to receive 
communications for a company that is domiciled in a State apart from 
where it conducts business. We also believe that it is important not to 
confuse a company's resident agent with those individuals who both 
represent the interests of the company and have the ability to control 
the company, and who are therefore agents of the company.
    Third, we would require the identity of all persons who will engage 
in or carry out surface coal mining operations as owners or controllers 
on the proposed permit. We believe that the applicant has the 
responsibility to provide this information.
    As indicated by way of the provisions proposed below in paragraphs 
(c), (e), (f), (g), and (m), there are certain inescapable obligations 
on the part of the applicant and those persons who propose to engage in 
or carry out surface coal mining operations. One such obligation is the 
full disclosure of persons having the ability to control the surface 
coal mining and reclamation operation. Therefore, the regulatory 
authority should have the ability to take certain actions if persons 
having the ability to control the operation are not identified in an 
application or later by the applicant or permittee, but instead, are 
later discovered by OSM or the State regulatory authority.
    We propose that OSM and the regulatory authority take such actions 
against the permittee, persons identified in the application, and 
persons not identified in the application, for failure to fully 
identify the applicant or permittee. They should be subject to a range 
of sanctions, including those provided for in section 521(c) of the Act 
and proposed at Sec. 846.16.
    Proposed paragraph (c) requires that the information required in 
paragraphs (c)(1), (c)(2), and (c)(3).
    Proposed paragraph (c)(1)(i) requires each person's name, address, 
and taxpayer identification number. We propose to amend the current 
provision to delete the language for the voluntary submission of an 
individual's social security number. As explained above ``taxpayer 
identification number'' would mean either an employer identification 
number or a social security number, whichever is applicable.
    Proposed paragraph (c)(1)(ii) requires disclosure of the person's 
ownership or control relationship to the applicant, including 
percentage of ownership and location in the organizational structure.
    Proposed paragraph (c)(1)(iii) requires that the application 
include the title of the person's position, the date that the person 
assumed the position, and, when submitted under existing 
Sec. 773.17(h), the date of departure from the position. This provision 
is unchanged from the current regulations.
    Proposed paragraph (c)(2) requires the name, address, and taxpayer 
identification number for publicly traded corporations.
    Proposed paragraphs (c)(3)(i) through (iii) require you to provide 
the information required by paragraphs (c)(1) or (2) of the section for 
every officer, director, and person performing a function similar to a 
director.
    Proposed paragraph (c)(3)(iv) requires this information for a 
person who owns or controls the applicant or the operator. Paragraph 
(c)(3)(v) requires this information for a person who owns 10 to 50 
percent of the applicant or the operator.
    Proposed paragraph (d) provides that the applicant need not report 
any owner that is a corporation not licensed to do business in any 
State or territory of the United States. This is a new provision that 
we propose as a mechanism to reduce the information collection burden 
of applicants. Based upon the experience of OSM and State regulatory 
authorities with the information collection provisions of Sec. 778.13, 
we see no need to continue to require the identity of any owner of an 
applicant that is not licensed to do business in any State or territory 
of the United States. We believe that in any communication with an 
applicant, or the owners or controllers of an applicant, whether it 
routine correspondence or the notification of a violation, it is 
unlikely that a business entity so far removed from the surface coal 
mining operation could adequately respond. It has been our experience 
that shareholders of applicants and permittees that are ``foreign'' to 
the States and territories of the United States have little direct 
knowledge of the surface coal mining operation. We believe that it is 
unnecessary to continue to collect information that provides little 
benefit to the regulatory program.
    Proposed paragraph (e) requires that for the applicant and each 
partner or principal shareholder of the applicant and operator, the 
application must include each name under which the person operates or 
previously operated a surface coal mining and reclamation operation in 
the United States within the five years preceding the date of the 
application. Paragraph (e) is former paragraph (d) proposed in an 
amended form. We would revise the requirements to apply to the 
operation of a surface coal mining and reclamation operation instead of 
the ownership or control of a surface coal mining and reclamation 
operation, as provided in the current regulation. This amendment is 
internally consistent with the redesign of the regulatory program 
represented by this proposal.
    Proposed paragraph (f) requires that the application contain the 
application number or other identifier of, and the regulatory authority 
for, any other pending surface coal mining operation permit application 
filed by the applicant in any State in the United States. Paragraph (f) 
consists of the current regulation at Sec. 778.13(e) and is re-
numbered. The language of the provision is unchanged from the current 
regulation.
    Proposed paragraph (g) requires that the application contain the 
operation's name, address, identifying numbers, including taxpayer 
identification number, Federal or State permit number and Mine Safety 
and Health Administration (MSHA) number, and the regulatory authority, 
for any surface coal mining operation permit held by the applicant or 
operator during the five years preceding the date of the application. 
Paragraph (g) is proposed as a revision of the current Sec. 778.13(f) 
to change the focus from operations owned or controlled by the 
applicant to the permits held by the applicant or operator during the 
five years preceding the date of application. The information provided 
here in proposed Sec. 778.13(g) forms the basis for a regulatory 
authority's review of an applicant's permit history at proposed 
Sec. 773.15(b)(2). The current provision at Sec. 778.13(f)(2) is 
deleted. The proposed provision requires permit information from the 
applicant and any operator different from the applicant. The current 
regulation at Sec. 778.13(f)(2) provides for identifying ownership or 
control relationships to the applicant, including percentages of 
ownership. This information is unnecessary within this proposal's 
redesigned approach.
    Proposed paragraph (h) requires that the application must contain 
the name and address of each legal or equitable

[[Page 70607]]

owner of record of the surface and mineral property to be mined, each 
holder of record of any leasehold interest in the property to be mined, 
and any purchaser of record under a real estate contract for the 
property to be mined. Paragraph (h) consists of the current regulation 
at Sec. 778.13(g) and is proposed to be re-numbered. The language of 
the provision is unchanged from the current regulation.
    Proposed paragraph (i) requires the name and address of each owner 
of record of all property (surface and subsurface) contiguous to any 
part of the proposed permit area. Paragraph (i) consists of the current 
regulation at Sec. 778.13(h) and is re-numbered. The language of the 
provision is unchanged from the current regulation.
    Proposed paragraph (j) requires the MSHA numbers for all mine-
associated structures that require MSHA approval. Paragraph (j) 
consists of the current regulation at Sec. 778.13(i) and is re-
numbered. The language of the provision is unchanged from the current 
regulation.
    Proposed paragraph (k) requires that an application must contain a 
statement of all lands, interest in lands, options, or pending bids on 
interests held or made by the applicant for lands contiguous to the 
area described in the permit application. Paragraph (k) further 
provides that, if requested by the applicant, any information required 
by this paragraph which is not on public file pursuant to State law 
must be held in confidence by the regulatory authority, as provided 
under Sec. 773.13(d)(3)(ii). Paragraph (k) consists of the current 
regulation at Sec. 778.13(j) and is re-numbered. The language of the 
provision is unchanged from the current regulation.
    Proposed paragraph (l) requires that after an applicant is notified 
that its application is approved, but before the permit is issued, the 
applicant must, as applicable, update, correct or indicate that no 
change has occurred in the information previously submitted under 
paragraphs (a) through (k). Paragraph (l) consists of the current 
regulation at Sec. 778.13(k) and is re-numbered. The provision is 
proposed to be amended to change the reference, ``(a) through (f)'' to 
``(a) through (k)'' to conform to the revisions proposed in 
Sec. 778.13.
    Proposed paragraph (m) requires that, prior to permit approval, all 
persons who will engage in or carry out surface coal mining operations 
as owners or controllers on the proposed operation must certify that 
they have the ability to control the proposed surface coal mining 
operation. This certification must also include a statement that these 
persons are under the jurisdiction of the Secretary of the Interior for 
the purposes of compliance with the terms and conditions of the permit 
and the requirements of the regulatory program. We intend that all 
persons who will engage in or carry out surface coal mining operations 
as owners, controllers, or persons having the ability to control a 
proposed operation, should be fully aware of their statutory and 
regulatory obligations under the Act, the regulatory program, and the 
permit. It is important they understand that they will be held 
accountable for compliance with the Act and the regulatory program 
under the authority of the Secretary of the Interior. We propose to 
require that all such persons attest to their knowledge of these 
obligations in the application for a surface coal mining and 
reclamation permit. By acknowledging and attesting to their obligations 
under the Act, the regulatory program, and the permit prior to approval 
and issuance, such certification will establish the basis of their 
responsibility.
    Proposed paragraph (n) provides that the applicant must submit the 
information required by this section and Sec. 778.14 of this part in 
the format that OSM prescribes. Paragraph (n) consists of the current 
regulation at Sec. 778.13(l) and is proposed to be re-numbered. The 
language of the provision is essentially unchanged from the current 
regulation.
    Proposed paragraph (o) provides that applicants who have previously 
applied for permits and for whom relevant data resides in AVS may 
certify to the regulatory authority that the information in AVS is 
complete, accurate, and up-to-date. Paragraph (o) further provides that 
only information that has changed from a previous application or site-
specific information needs to be provided in the current application. 
We propose to add this provision in response to comments received 
during the public outreach. We believe that the AVS computer system 
offers many as yet unused benefits. The most beneficial advantage to 
the regulated community is the use of the system's data to relieve 
certain information collection burdens, notably the information 
requirements in Sec. 778.13.
    Proposed paragraph (p) provides that the regulatory authority may 
establish a central file to house the legal identity information for 
each applicant, rather than placing duplicate information in each 
permit application file. This provision is proposed in response to 
comments received during the public outreach effort conducted before 
the development of this proposal. We believe that the provision could 
effectively reduce the amount of duplicate information required from 
applicants by the regulatory authorities. It is important to note, 
however, that the establishment of such files by a regulatory authority 
is voluntary.

T. Section 778.14--Violation information

    We propose to retain the current provisions in Sec. 778.14, except 
to amend paragraph (c). However, the entire Sec. 778.14 is proposed 
here, in order that the section may be viewed in its entirety. There 
are no substantive changes proposed in the provisions at paragraphs 
(a), (b), and (d). At paragraph (c), we propose to remove reference to 
Sec. 773.5, reference to the definition of ``owned or controlled'' and 
``owns or controls,'' and to confine the information requirement, 
regarding violation notices and outstanding violation notices, to the 
applicant and to surface coal mining operations owned or controlled by 
the applicant. The reason for this change is sufficiently explained 
elsewhere in this preamble, notably at Secs. 773.5 and 778.5. We also 
propose to eliminate the requirement that an applicant certify that 
violation notices are in the process of being corrected. Applicants who 
must prove that violation notices are in the process of being corrected 
would be identified in proposed Sec. 773.18(b). We believe that 
experience with this regulation has raised the question as to the 
benefits of the certification requirement. By proposing to eliminate 
the certification requirement, we intend to reduce the information 
collection burden for applicants under Sec. 778.14. In this proposal, 
the current provision at Sec. 773.15(b)(2) containing the cross-
reference to the certification requirement here in Sec. 778.14 is 
removed and replaced with new provisions.
    We propose that the introductory statement of Sec. 778.14 provide 
that each application must contain the information required in the 
section. This statement is unchanged from the current regulation.
    Proposed paragraph (a) requires that an application must state 
whether the applicant or any subsidiary, affiliate, or persons 
controlled by or under common control with the applicant has either had 
a Federal or State coal mining permit suspended or revoked in the five 
years preceding the date of submission of the application or forfeited 
a performance bond or similar security deposited in lieu of bond. This 
provision is unchanged from the current regulation.
    Proposed paragraph (b) requires the application contain a brief 
explanation

[[Page 70608]]

of the facts involved if any such suspension, revocation, or forfeiture 
referred to in paragraphs (a)(1) and (a)(2) of this section has 
occurred, including: (1) the identification number and date of issuance 
of the permit, and the date and amount of bond or similar security; (2) 
identification of the authority that suspended or revoked the permit or 
forfeited the bond and the stated reasons for the action; (3) the 
current status of the permit, bond, or similar security involved; (4) 
the date, location, and type of any administrative or judicial 
proceedings initiated concerning the suspension, revocation, or 
forfeiture; and (5) the current status of the proceedings. The 
provisions of paragraph (b) and its five subparagraphs are unchanged 
from the current regulation.
    Proposed paragraph (c) requires that an application contain a list 
of all violation notices received by the applicant during the three-
year period preceding the application date, and a list of all 
outstanding violation notices received prior to the date of the 
application by any surface coal mining operation owned or controlled by 
the applicant. Proposed paragraph (c) further provides that for each 
violation notice reported, the list must include the information, as 
applicable, described in the five subparagraphs that follow. In 
addition to the proposed changes described above, we propose to amend 
paragraph (c) by deleting the phrase ``that is deemed or presumed to 
be'' from the provision. A significant effect of the changes to the 
definitions of ``ownership'' and ``control'' at Sec. 778.5, as 
discussed above in that section, is that presumptions of ownership or 
control will no longer exist in these regulations. Therefore, we 
believe that any reference to a deemed or presumed relationship of the 
applicant to operations the applicant owns or controls here in 
Sec. 778.14 is unnecessary.
    Proposed paragraph (c)(1) provides that for each violation notice 
reported, the list must include any identifying numbers for the 
operation, including the Federal or State permit number and MSHA 
number, the date of issuance of the violation notice, the name of the 
person to whom the violation notice was issued, and the name of the 
issuing regulatory authority, department or agency. We would amend the 
provision by deleting the requirement to provide the date of issuance 
of the MSHA number. We intend this change to mean that only the 
identifying numbers are required. OSM believes that the list need not 
include the date an MSHA number was issued, since the actual MSHA 
number should provide sufficient identifying information.
    Proposed paragraph (c)(2) provides that for each violation notice 
reported, the list must include a brief description of the violation 
alleged in the notice. This provision is unchanged from the current 
regulation.
    Proposed paragraph (c)(3) provides that for each violation notice 
reported, the list must include the date, location, and type of any 
administrative or judicial proceedings initiated concerning the 
violation, including, but not limited to, proceedings initiated by any 
person identified in paragraph (c) of this section to obtain 
administrative or judicial review of the violation. This provision is 
unchanged from the current regulation.
    Proposed paragraph (c)(4) provides that for each violation notice 
reported, the list must include the current status of the proceedings 
and of the violation notice. This provision is unchanged from the 
current regulation.
    Proposed paragraph (c)(5) provides that for each violation notice 
reported, the list must include the actions, if any, taken by any 
person identified in paragraph (c) of this section to abate the 
violation. This provision is unchanged from the current regulation.
    Proposed paragraph (d) provides that after an applicant is notified 
that his or her application is approved, but before the permit is 
issued, the applicant must, as applicable, update, correct or indicate 
that no change has occurred in the information previously submitted 
under this section. This provision is unchanged from the current 
regulation.

U. Section 842.11--Federal inspections and monitoring

    We propose to amend paragraph (e)(3)(i) at Sec. 842.11. It provides 
that OSM will take action to ensure that the permittee and operator 
will be precluded from receiving future permits while violations 
continue at the site. This provision is a consequence of an OSM 
finding, in writing, that a surface coal mining operation has been 
abandoned and at least one notice of violation has been cited. 
Paragraph (e)(3)(i) is proposed to be amended to remove the phrase, 
``and owners and controllers of the permittee and operator'' from the 
provision. This change is consistent with the redesigned approach 
represented by this proposal. The phrase proposed to be removed 
indicates that future applications by an applicant whose principals 
include the owners or controllers of a permittee or operator of a site 
having been abandoned with violations will not be found permit 
ineligible based solely upon the violations at the abandoned site. We 
propose no changes for the remaining provisions in Sec. 842.11.

V. Section 843.5--Definitions

    We propose to delete the entire Sec. 843.5 which contains two 
definitions. The definition for ``unwarranted failure to comply'' is 
proposed to be moved to Sec. 846.5 under alternative enforcement. The 
definition for ``willful violation'' is proposed to be deleted as 
inconsistent with the proposed definition of ``willful'' or 
``willfully'' under Sec. 701.5.

W. Section 843.11--Cessation Orders

    We propose to amend paragraph (g) at Sec. 843.11. It provides that 
where OSM is the regulatory authority, OSM will provide written notice 
within 60 days after issuing a cessation order to any person who has 
been identified under proposed Secs. 773.17(h) and 778.13(c) as a 
controller or who has the ability to control the operation against 
which the cessation order was issued. We propose this amendment to 
revise the cross-references to Secs. 773.17 and 778.13 to be consistent 
with the amendments proposed in those sections. No other revisions to 
Sec. 843.11 are proposed.

X. Section 843.13--Suspension or Revocation of Permits: Pattern of 
Violations

    We propose to move Sec. 843.13, the provisions for suspension or 
revocation of permits for a pattern of violations, from part 843 to 
Sec. 846.14 of part 846, which is proposed to be devoted to alternative 
enforcement actions. We have consistently considered suspension or 
revocation for a pattern of violations to be one of the remedial 
measures that we call alternative enforcement actions. Accordingly, we 
propose to move the provisions governing suspension or revocation of 
permits for a pattern of violations to part 846. Proposed amendments to 
the provisions are discussed below, at part 846.

Y. Section 843.21--Procedures for Improvidently Issued State Permits

    We propose to amend paragraphs (d) and (e) of the provisions at 
Sec. 843.21, procedures for improvidently issued State permits. We 
propose no changes to the current regulations in paragraphs (a), (b), 
(c), and (f) at Sec. 843.21, but have re-proposed these provisions to 
provide the opportunity for public review and comment. We propose to 
amend the Federal enforcement provision at paragraph (d) to add 
accurate and complete information to the reasons for not taking 
remedial action. We propose to amend the remedies to a notice of

[[Page 70609]]

violation at paragraph (e) to add accurate and complete information to 
the reasons a notice of violation might be terminated.
    Proposed paragraph (a) of Sec. 843.21 provides for the initial 
notice. It provides that, if OSM has reason to believe that a State 
surface coal mining and reclamation permit meets the criteria for an 
improvidently issued permit in Sec. 773.20(b), or the State program 
equivalent, and the State has failed to take appropriate action on the 
permit under State program equivalents of Secs. 773.20 and 773.21, OSM 
will issue to the State, and should provide to the permittee, an 
initial notice stating in writing the reasons for that belief. This 
provision is unchanged from the current regulation.
    Proposed paragraph (b) provides for the State's response to the 
initial notice. It provides that within 30 days of the date on which an 
initial notice is issued under paragraph (a) of this section, the State 
must demonstrate to OSM in writing either: (1) the permit does not meet 
the criteria of Sec. 773.20(b), or the State program equivalent; or (2) 
the State is in compliance with the State program equivalents of 
Secs. 773.20 and 773.21. This provision is unchanged from the current 
regulation.
    Proposed paragraph (c) provides for the issuance of a ten-day 
notice. It provides that if OSM finds that the State has failed to make 
the demonstration required by paragraph (b) of this section, OSM will 
issue to the State a ten-day notice stating in writing the reasons for 
that finding and requesting that within 10 days the State take 
appropriate action under the State program equivalents of Secs. 773.20 
and 773.21. This provision is unchanged from the current regulation.
    Proposed paragraph (d) provides for Federal enforcement under these 
procedures. After 10 days from the date on which a ten-day notice is 
issued under paragraph (c) of Sec. 843.21, if OSM finds that the State 
has failed to take appropriate action under the State program 
equivalents of Secs. 773.20 and 773.21, or to show good cause for such 
failure, OSM will take appropriate remedial action. Paragraph (d) 
further provides that such remedial action may include the issuance of 
a notice of violation to the permittee or operator requiring that by a 
specified date all mining operations must cease and reclamation of all 
areas for which a reclamation obligation exists must commence or 
continue. This requirement would apply unless certain conditions were 
met to the satisfaction of the responsible agency. These conditions 
would include: (1) abatement of any violation, or the payment of any 
penalty, or fee; (2) execution of a plan to abate the violation or a 
schedule to pay the penalty or fee; (3) the information questions have 
been resolved; or (4) the permittee, operator, and all operations owned 
or controlled by the permittee and operator are no longer responsible 
for the violation, penalty, fee, or information. Paragraph (d) further 
provides that, under this paragraph, good cause does not include the 
lack of State program equivalents of Secs. 773.20 and 773.21. We 
propose to amend paragraph (d) to clarify that the regulatory authority 
will not take remedial action if the information questions are resolved 
to the satisfaction of the responsible agency.
    Proposed paragraph (e) provides for the remedies to a notice of 
violation. Upon receipt from any person of information concerning the 
issuance of a notice of violation under paragraph (d) of this section, 
OSM will review the information and either vacate or terminate the 
notice as provided for in the subparagraphs that follow.
    Proposed paragraph (e)(1) provides that OSM will vacate the notice 
of violation if it resulted from an erroneous conclusion under this 
section or if ownership or control has been refuted. We propose to 
amend this provision to add ``or if ownership or control has been 
refuted'' to allow for a successful challenge to the ability to control 
a surface coal mining operation under proposed Sec. 773.24. A 
successful challenge under Sec. 773.24 would also result in the 
vacation of the notice of violation.
    Proposed paragraph (e)(2) provides that OSM will terminate the 
notice of violation if the three criteria discussed in the 
subparagraphs that follow are met.
    Proposed paragraph (e)(2)(i) provides that the notice of violation 
will be terminated if all violations have been abated, all penalties or 
fees have been paid, and all information questions have been resolved. 
As with paragraph (d) above, we propose to add information to the 
issues covered by this provision. This change is consistent with the 
proposed changes at Secs. 773.20 and 773.21.
    Proposed paragraph (e)(2)(ii) provides that the notice of violation 
will be terminated if the permittee or any operation owned or 
controlled by the permittee has filed and is pursuing a good faith 
appeal of the violation, penalty, fee, or information request, or has 
entered into and is complying with an abatement plan or payment 
schedule to the satisfaction of the responsible agency. As with 
paragraphs (d) and (e)(2)(i) above, we propose to add information to 
the issues covered by this provision.
    Proposed paragraph (e)(2)(iii) provides that the notice of 
violation will be terminated if the permittee and all operations owned 
or controlled by the permittee are no longer responsible for the 
violation, penalty, fee, or information. As with paragraphs (d), 
(e)(2)(i), and (e)(2)(ii) above, we propose to add information to the 
issues covered by this provision.
    Proposed paragraph (f) provides for no civil penalty under the 
provisions at Sec. 843.21. OSM will not assess a civil penalty for a 
notice of violation issued under this section. This provision is 
unchanged from the current regulation.

Z. Section 843.24--Oversight of State Permitting Decisions With Respect 
to Ownership or Control or the Status of Violations

    We would remove the provisions for the oversight of State 
permitting decisions with respect to ownership or control or the status 
of violations at Sec. 843.24 from the regulations. Our approach to 
permit eligibility and permitting decisions would be redesigned by way 
of this proposal. Therefore, provisions for oversight of a State's 
permitting decisions in the context of presumptions of ownership or 
control or the status of a violation are no longer required. However, 
this change in no way alters our oversight obligations with respect to 
permit information, permitting decisions or the use of the AVS. 
Provisions for States to maintain data on State-issued violations in 
AVS is provided for in proposed Sec. 773.22. Accordingly, Sec. 843.24 
is proposed to be removed from our rules.

AA. Part 846--Alternative Enforcement

    We have devoted considerable time and effort to eliciting comments 
and suggestions from a broad range of interested parties prior to the 
development of a conceptual framework for this proposal. As the 
concepts for permit information, permit eligibility, and investigation 
evolved, it became apparent that another element was required to 
complete the conceptual framework of the redesigned approach. That key 
element is alternative enforcement.
    In the current regulations, provisions exist for alternative 
enforcement at 30 CFR Sec. 845.15(b)(2). Those provisions provide for 
appropriate action under sections 518(e), 518(f), 521(a)(4), and 521(c) 
of SMCRA whenever a violation has remained unabated for 30 days.
    We propose to amend part 846 to provide further regulatory 
authority for the use of certain enforcement actions

[[Page 70610]]

that we collectively call ``alternative enforcement.'' We view 
alternative enforcement actions as those enforcement measures provided 
for under sections 518 and 521 of SMCRA. These actions would be in 
addition to those provided for in Sec. 845.15(b)(2), and would include 
provisions for individual civil penalties, currently the whole of part 
846. Additionally the proposed regulations make it clear that we will 
pursue all appropriate remedies to correct SMCRA violations. Permittees 
have occasionally acted as if a regulatory authority may pursue only 
one of the alternative enforcement options set out in 30 CFR 
Sec. 845.15(b)(2). This proposed rule makes it clear that we may pursue 
more than one option and are not limited to any single remedy to 
correct SMCRA violations.
    We have concluded that under the January 31, 1997, Court of 
Appeals' ruling, an applicant's owners or controllers with violations 
might be able to continue unimpeded, in the surface coal mining 
business, although not as a permittee. Therefore, we have sought 
through alternative enforcement to compel compliance from those who 
would ignore, fail, or refuse to meet their affirmative duty to comply 
with the Act and regulatory program. We propose to rely upon the 
powerful statutory provisions in the Act which authorize alternative 
enforcement. The proposal provides the regulatory means whereby those 
statutory remedies are implemented to compel compliance under the 
regulatory program. State regulatory authorities have similar 
alternative enforcement remedies available under State-law counterparts 
to SMCRA. Under this proposal the regulatory authorities will more 
readily be able to invoke the remedies available to them.
AA.1. Section 846.1--Scope
    We propose to amend Sec. 846.1, the scope of part 846. It states 
that part 846 will govern the use of measures provided for in the Act 
at sections 201(c)(1), 510(c), 518(e), 518(f), 518(g), 521(a)(4), and 
521(c), that we collectively call ``alternative enforcement'' measures 
or actions. OSM and State regulatory authorities will use these 
measures to compel compliance whenever any person engaging in or 
carrying out surface coal mining operations as an owner, controller, 
agent, permittee, or operator has failed in his or her duty to promptly 
correct violations. A determination, finding, or conviction made under 
these provisions must be so designated in the AVS by OSM or the State 
regulatory authority for the person for whom the determination, 
finding, or conviction is made.
AA.2. Section 846.5--Definitions
    We propose to amend Sec. 846.5 by moving the definitions of 
``knowingly'' and ``willfully'' to Sec. 701.5 and amend them. The 
definition of ``unwarranted failure to comply'' is proposed to be moved 
from Sec. 843.5 to Sec. 846.5 to support the provisions for suspension 
or revocation of a permit for a pattern of violations.
    ``Unwarranted failure to comply'' would mean the failure of a 
permittee, operator, agent, or owner or controller of a permittee or 
operator to prevent the occurrence of any violation of his or her 
permit or any requirement of the Act or regulations due to 
indifference, lack of diligence, or lack of reasonable care. It also 
would mean the failure to abate any violation of such permit or any 
requirement of the Act or regulations due to indifference, lack of 
diligence, or lack of reasonable care. This amended definition would 
pertain to an operator, owner, controller, or agent of a permittee or 
operator in addition to the permittee. We also propose to add ``or any 
requirement'' between ``any violation of such permit'' and ``of the Act 
or regulations.'' This revision addresses an apparent typographical 
error in the current definition. We believe the definition of 
``unwarranted failure to comply'' is more meaningful within the 
provisions for alternative enforcement.
    The definition of ``violation, failure, or refusal'' in Sec. 846.5 
would mean: (1) A violation of a condition of a permit issued under a 
Federal program, a Federal lands program, Federal enforcement under 
section 502 of the Act, or Federal enforcement of a State program under 
section 521 of the Act; or (2) a failure or refusal to comply with any 
order issued under section 521 of the Act, or any order incorporated in 
a final decision issued by the Secretary under the Act, except an order 
incorporated in a decision issued under sections 518(b) or 703 of the 
Act. This language is unchanged from the current definition.
AA.3. Section 846.11--Criminal Penalties
    We propose to create Sec. 846.11 to contain the provisions for 
criminal penalties. It would provide OSM and State regulatory 
authorities with regulatory language to implement the statutory 
provisions of section 518(e) of the Act. The language in the proposed 
provisions is taken directly from the statutory provisions in section 
518(e). Use of these provisions would entail a finding by the 
regulatory authority for a person meeting the criteria for criminal 
prosecution and the referral of that finding to the Attorney General, 
as appropriate, to pursue prosecution under the provisions of the Act 
and these regulations.
    Proposed paragraph (a) provides that the regulatory authority may 
pursue criminal sanctions against any person who willfully and 
knowingly (1) violates a condition of a permit; or (2) fails or refuses 
to comply with any order issued under section 521 or 526 of the Act or 
any order incorporated into a final decision issued by the Secretary; 
or (3) makes any false statement, representation, or certification, or 
fails to make any statement, representation, or certification in any 
application, record, report, plan, or other document filed or required 
to be maintained pursuant to the regulatory program or any order or 
decision issued by the Secretary under the Act.
    Proposed paragraph (b) provides that the regulatory authority may 
pursue criminal sanctions against a permittee, operator, or any owner, 
controller, principal or agent of the permittee or operator if the 
violation, failure or refusal under paragraph (a) of this section 
remains uncorrected for more than 30 days after (1) the suspension or 
revocation of a permit under Sec. 846.14 of this part, or (2) the 
issuance of a violation notice to an unpermitted operation.
    Proposed paragraph (c) provides that any person convicted under 
proposed Sec. 846.11 may be subject to punishment by a fine of not more 
than $10,000 or imprisonment of not more than one year, or both.
AA.4. Section 846.12--Individual Civil Penalties
    We propose to replace current Sec. 846.12 with the provisions for 
individual civil penalties. Proposed Sec. 846.12 is based on the 
existing provisions for individual civil penalties which are currently 
the entire part 846 and which, in turn, are based upon the statutory 
requirements of section 518(f) of the Act. We propose to re-number the 
existing regulations governing individual civil penalties, with only 
minor edits to the language of the provisions. We propose these 
provisions to authorize the regulatory authority to make a 
determination for persons who meet the criteria for the assessment of 
an individual civil penalty.
    Proposed paragraph (a) introduces the two criteria that must be met 
in order for an individual civil penalty to be assessed. The heading is 
provided for at current Sec. 846.12.

[[Page 70611]]

    Proposed paragraph (a)(1) provides that, except as provided in 
paragraph (a)(2) of this section, the regulatory authority may assess 
an individual civil penalty against any corporate director, officer or 
agent of a corporate permittee or operator who knowingly and willfully 
authorized, ordered or carried out a violation, failure or refusal. 
This provision is currently at Sec. 846.12(a). The cross-reference 
``paragraph (b)'' is changed to ``paragraph (a)(2)'' in the proposed 
provisions. In addition, we propose to add ``or operator'' to paragraph 
(a)(1) to indicate that any corporate director, officer, or agent of an 
operator may also be assessed an individual civil penalty. This 
amendment is consistent with other revisions in this proposal, notably 
at Secs. 773.15 and 778.13, where we propose to provide for the 
responsibilities and obligations of operators, different from the 
permittee, in the conduct of surface coal mining and reclamation 
operations.
    Proposed paragraph (a)(2) provides that the agency will not assess 
an individual civil penalty in situations resulting from a permit 
violation by a corporate permittee until the agency issues a cessation 
order to the corporate permittee for the violation, and the cessation 
order has remained unabated for 30 days. The proposed language is 
unchanged from the current regulation at Sec. 846.12(b).
    Proposed paragraph (b) provides for the amount of individual civil 
penalty. The proposed heading is unchanged from the current heading at 
Sec. 846.14.
    Proposed paragraph (b)(1) provides that in determining the amount 
of an individual civil penalty assessed under paragraph (a) of this 
section, the regulatory authority will consider the criteria specified 
in section 518(a) of the Act, including (i) the individual's history of 
authorizing, ordering or carrying out previous violations, failures or 
refusals at the particular surface coal mining operation; (ii) the 
seriousness of the violation, failure or refusal (as indicated by the 
extent of damage and/or the cost of reclamation), including any 
irreparable harm to the environment and any hazard to the health and 
safety of the public; and (iii) the demonstrated good faith of the 
individual charged in attempting to achieve rapid compliance after 
notification of the violation, failure or refusal. The current 
provision is at Secs. 846.14(a)(i) through (a)(iii). Except for the 
amended cross-reference in paragraph (b)(1), the proposed language is 
unchanged from the current regulation.
    Proposed paragraph (b)(2) provides that the penalty will not exceed 
$5,000 for each violation. Paragraph (b)(2) further provides that each 
day of a continuing violation may be deemed a separate violation and 
the regulatory authority may assess a separate individual civil penalty 
for each day the violation, failure or refusal continues, from the date 
of service of the underlying notice of violation, cessation order or 
other order incorporated in a final decision issued by the Secretary, 
until abatement or compliance is achieved. The proposed language is 
unchanged from the current regulation at Sec. 846.14(b).
    Proposed paragraph (c) provides for the procedure for the 
assessment of an individual civil penalty. The heading is unchanged 
from the current regulation at Sec. 846.17.
    Proposed paragraph (c)(1) provides for the notice of an individual 
civil penalty. It states that the regulatory authority will serve on 
each individual to be assessed an individual civil penalty a notice of 
proposed individual civil penalty assessment, including a narrative 
explanation of the reasons for the penalty, the amount to be assessed, 
and a copy of any underlying notice of violation and cessation order. 
The proposed language is unchanged from the current regulation at 
Sec. 846.17(a).
    Proposed paragraph (c)(2) provides for the final order and the 
opportunity for review. It provides that the notice of proposed 
individual civil penalty assessment will become a final order of the 
Secretary, 30 days after service upon the individual, unless the 
individual files within 30 days of service of the notice of proposed 
individual civil penalty assessment a petition for review with the 
Hearings Division, Office of Hearings and Appeals, U.S. Department of 
the Interior, 4015 Wilson Boulevard, Arlington, Virginia 22203 (Phone: 
703-235-3800), in accordance with 43 CFR 4.1300 et seq.; or the OSM and 
the individual or responsible corporate permittee agree within 30 days 
of service of the notice of proposed individual civil penalty 
assessment to a schedule or plan for the abatement or correction of the 
violation, failure or refusal. The proposed language is based on the 
current regulations at Secs. 846.17(b)(i) and (b)(ii).
    Proposed paragraph (c)(3) provides for the service of an individual 
civil penalty. Paragraph (c)(3) provides that for purposes of this 
section, OSM will perform service on the individual to be assessed an 
individual civil penalty by certified mail or by any alternative means 
consistent with the rules governing service of a summons or complaint 
under Rule 4 of the Federal Rules of Civil Procedure. Service is 
complete upon tender of the notice of proposed assessment and included 
information or of the certified mail and is not deemed incomplete 
because of refusal to accept. The proposed language is based on the 
current regulation at Sec. 846.17(c).
    Proposed paragraph (d) provides for the conditions under which an 
individual civil penalty is paid. The proposed heading is unchanged 
from the current heading Sec. 846.18.
    Paragraph (d)(1) provides for the payment of an individual civil 
penalty when there has been no abatement or appeal of the penalty. It 
provides that if a notice of proposed individual civil penalty becomes 
a final order in the absence of a petition for review or abatement 
agreement, the penalty will be due upon the issuance of the final 
order. The proposed language is unchanged from the current regulation 
at Sec. 846.18(a).
    Proposed paragraph (d)(2) provides for the payment of an individual 
civil penalty when the individual subject to the penalty appeals the 
penalty. It provides that if an individual named in the notice of 
proposed individual civil penalty assessment files a petition for 
review in accordance with 43 CFR 4.1300 et seq., the penalty becomes 
due upon issuance of a final administrative order affirming, 
increasing, or decreasing the proposed penalty. The proposed language 
is unchanged from the current regulation at Sec. 846.18(b).
    Proposed paragraph (d)(3) provides for the payment of an individual 
civil penalty when an abatement agreement has been executed. It 
provides that where the regulatory authority and the corporate 
permittee or individual have agreed in writing on a plan for the 
abatement of, or compliance with, the unabated order, an individual 
named in a notice of proposed individual civil penalty assessment may 
postpone payment until receiving either a final order from the 
regulatory authority stating that the penalty is due on the date of 
such final order, or written notice that abatement or compliance is 
satisfactory and the penalty has been withdrawn. This provision is 
currently at Sec. 846.18(c). Except for punctuation, the proposed 
provision is unchanged from the current regulation.
    Proposed paragraph (d)(4) provides for instances of delinquent 
payment. It provides that following the expiration of 30 days after the 
issuance of a final order assessing an individual civil penalty, any 
delinquent penalty is subject to interest at the rate established 
quarterly by the U.S. Department of the Treasury for use in applying 
late charges on late payments to the Federal government, under Treasury 
Financial

[[Page 70612]]

Manual 6-8020.20. Paragraph (d)(4) further provides that the Treasury 
current value of funds rate is published by the Fiscal Service in the 
notices section of the Federal Register and that interest on unpaid 
penalties will run from the date payment first was due until the date 
of payment. Paragraph (d)(4) further provides that failure to pay 
overdue penalties may result in one or more of the actions specified in 
Secs. 870.15(e)(1) through (e)(5) and that delinquent penalties are 
subject to late payment penalties specified in Sec. 870.15(f) and 
processing and handling charges in Sec. 870.15(g). The proposed 
language is unchanged from the current regulation at Sec. 846.18(d).
AA.5. Section 846.14--Suspension or Revocation of Permits: Pattern of 
Violations
    We propose to replace current Sec. 846.14 with provisions to allow 
the regulatory authority to suspend or revoke permits for a pattern of 
violations. The provisions proposed in Sec. 846.14 are based upon the 
current provisions at Sec. 843.13 which, in turn, are based upon the 
statutory requirements of section 521(a)(4) of the Act.
    Proposed paragraph (a)(1) provides that the Director will issue an 
order to a permittee, requiring them to show cause why the permit and 
their right to mine under the Act should not be suspended or revoked, 
if the regulatory authority determines that a pattern of violations of 
any requirements of the Act, this Chapter, the applicable program, or 
any permit condition required by the Act exists or has existed, and 
that the violations were caused by the permittee willfully or through 
unwarranted failure to comply with those requirements or conditions.
    Paragraph (a)(2) further provides that violations committed by any 
person conducting surface coal mining operations on behalf of the 
permittee would be attributed to the permittee, unless the permittee 
establishes that the violations were: (1) acts of deliberate sabotage 
or in direct contravention of the expressed orders of the permittee; or 
(2) willful and knowing violations of a contract provision which the 
permittee actively tried to prevent.
    Paragraph (a)(3) provides that if OSM determines that a pattern of 
violations exists, it will promptly file a copy of any order to show 
cause with the Office of Hearings and Appeals. We believe that the 
permittee should be protected from a determination under the provisions 
of proposed Sec. 846.14 in instances where a violation resulted from 
activities that occur in direct opposition to orders or direction given 
by the permittee and where the permittee actively tried to prevent a 
violation that results from the willful and knowing disregard of a 
provision in a contract between the permittee and its operator.
    Proposed paragraph (a)(4) provides that the regulatory authority 
may determine that a pattern of violations exists or has existed after 
considering the circumstances, including: (1) the number of violations, 
cited on more than one occasion, of the same or related requirements of 
the Act, the regulations, the applicable program, or the permit; (2) 
the number of violations, cited on more than one occasion, of different 
requirements of the Act, the regulations, the applicable program, or 
the permit; and (3) the extent to which the violations were isolated 
departures from lawful conduct. We would remove the language in the 
current provision whereby a determination of a pattern of violations is 
based upon two or more Federal inspections within any 12-month period. 
We have concluded that the Act at section 521(a)(4) does not contain 
specific criteria as set out in the current regulation. However, we 
invite comments on this proposed change.
    Proposed paragraph (a)(5) provides that the regulatory authority 
will promptly review the history of violations of any permittee or 
operator who has been cited for violations of the same or related 
requirements of the Act, this Chapter, the applicable program, or the 
permit. Paragraph (a)(5) further provides that if, after such review, 
the regulatory authority determines that a pattern of violations exists 
or has existed, the regulatory authority will issue an order to show 
cause as provided in paragraph (a)(1) of this section. This provision 
is currently at Sec. 843.13(a)(3). We would amend the provision to add 
that we will review a history of violations for the operator in 
addition to the permittee. We propose this change to provide for the 
responsibilities and obligations of operators, different from the 
permittee, in the conduct of surface coal mining and reclamation 
operations. We would further amend the provision to remove the language 
whereby the review of violations is based upon three or more Federal 
inspections within any 12-month period. As discussed above in proposed 
paragraph (a)(4), we have concluded that the Act at section 521(a)(4) 
does not contain specific criteria as set out in the current 
regulation. Therefore, we propose to remove the criteria in the 
proposed rule. We also invite comments on this proposed change.
    Proposed paragraph (a)(6) provides that, in determining whether a 
pattern exists or has existed, OSM will consider only violations issued 
as a result of: (1) the enforcement of the provisions of Title IV of 
the Act, or a Federal program or a Federal lands program under Title V; 
(2) a Federal inspection during the interim program and before the 
applicable State program was approved under sections 502 or 504 of the 
Act; or (3) Federal enforcement of a State program in accordance with 
sections 504(b) or 521(b) of the Act. This provision is currently at 
Sec. 843.13(a)(4)(i) and includes paragraphs (A), (B), and (C). We 
would amend the current regulation at Sec. 843.13(a)(4) by revising the 
language and reorganizing the provisions. In proposed paragraph (a)(6), 
the phrase, ``the number of violations within any 12-month period'' is 
replaced with ``whether a pattern exists or has existed.'' This 
revision is consistent with the amendments to provisions here in 
proposed Sec. 846.14 in paragraphs (a)(1) and (a)(3). We would delete 
the last clause in paragraph (a)(4) to make the language in paragraph 
(a)(6) more concise. In addition, we are re-proposing current 
subparagraph (a)(4)(i)(A) as subparagraph (a)(6)(i) to require that the 
provision applies not only to Title V, but also to Title IV of the Act.
    As indicated above in proposed paragraphs (a)(5) and (a)(6), we 
invite comments on what constitutes a pattern of violations. 
Specifically, we ask whether the review of the history of violations 
and a determination of whether a pattern exists is permit-specific. 
Alternatively, should it include a controller's compliance history at 
prior operations. For example, if a controller has been associated with 
two previous mining operations that have failed to pay reclamation fees 
and the current operation is delinquent in paying reclamation fees, 
would this constitute a pattern of violations?
    We have not re-proposed the current provision at 
Sec. 843.13(a)(4)(ii) in Sec. 846.14. We believe that this provision is 
inconsistent with our proposal to eliminate the pre-determined number 
of inspections and the defined time frame for the occurrence of the 
violations in order to establish a pattern of violations.
    Proposed paragraph (b) provides for the hearing and order in the 
procedures for suspension or revocation of a permit for a pattern of 
violations. A heading would be inserted at paragraph (b) identifying 
that the provisions that follow pertain to the hearing and order under 
these regulations.
    Proposed paragraph (b)(1) provides that if the permittee files an 
answer to

[[Page 70613]]

the show cause order and requests a hearing under 43 CFR Part 4.1190 et 
seq., a public hearing will be provided as set forth in that part. 
Paragraph (b)(1) corresponds to the current regulation at 
Sec. 843.13(b). Paragraph (b)(1) would be amended to provide for the 
specific regulatory citation in 43 CFR Part 4.
    Proposed paragraph (b)(2) provides that within the time limits set 
forth in 43 CFR Part 4.1190 et seq., the Office of Hearings and Appeals 
will issue a written determination as to whether a pattern of 
violations exists and, if appropriate, an order. Paragraph (b)(2) 
further provides that if the Office of Hearings and Appeals revokes or 
suspends the permit and the permittee's right to mine under the Act, 
the permittee must immediately cease surface coal mining operations on 
the permit and must comply with whichever of the two following 
paragraphs is applicable. This provision is revised from the current 
regulation at Sec. 843.13(c). We would amend the provision by deleting 
``sixty days'' and thereby deferring to 43 CFR Part 4.1190 et seq. for 
the time period within which the Office of Hearings and Appeals will 
issue a written determination and order.
    Proposed paragraph (b)(2)(i) provides that if the permit and the 
right to mine under the Act are revoked, the permittee must complete 
reclamation within the time specified in the order. The proposed 
language is unchanged from the current regulation at Sec. 843.13(c)(1).
    Proposed paragraph (b)(2)(ii) provides that if the permit and the 
right to mine under the Act are suspended, the permittee must complete 
all affirmative obligations to abate all conditions, practices, or 
violations as specified in the order. The proposed language is 
unchanged from the current regulation at Sec. 843.13(c)(2).
    Proposed paragraph (c) provides for the review of violations under 
the procedures for suspension or revocation of a permit for a pattern 
of violations. It provides that whenever a permittee fails to abate a 
violation contained in a notice of violation or cessation order within 
the abatement period set in the notice or order or as subsequently 
extended, the regulatory authority will review the permittee's history 
of violations to determine whether a pattern of violations exists and 
will issue an order to show cause as appropriate. This provision is 
currently at Sec. 843.13(d). We propose to add a heading to identify 
the content of the provision and to delete the cross-reference to 
Sec. 845.15(b)(2) from the current regulation. Insofar as we are 
proposing fully-developed regulatory provisions for alternative 
enforcement actions here in part 846, we believe the cross-reference to 
Sec. 845.15(b)(2) in the regulations for suspension or revocation of a 
permit for a pattern of violations is no longer required.
    Proposed paragraph (d) provides for the service of the show cause 
order under the procedures for suspension or revocation of a permit for 
a pattern of violations. Paragraph (d) provides that for purposes of 
this section and Sec. 846.15 of this part, the permittee and/or 
operator, or owner, controller, principal, or agent of the permittee or 
operator must be served by certified mail, or by any alternative means 
consistent with the rules governing service of a summons or complaint 
under Rule 4 of the Federal Rules of Civil Procedure. Paragraph (d) 
further provides that service is complete upon delivery of the order or 
of the certified mail and is not considered incomplete because of a 
person's refusal to accept.
AA.6. Section 846.15--Suspension or Revocation of Permits: Failure to 
Comply With a Permit Condition
    We propose to create Sec. 846.15 to provide procedures for the 
suspension or revocation of a permit for failure to comply with a 
permit condition. We believe these provisions are required under the 
redesigned approach and are included under alternative enforcement 
actions. One of the aspects of the redesign proposed today is an 
increased emphasis on the obligations and responsibilities of persons 
after a permit is approved and issued. We believe that all persons who 
engage in or carry out surface coal mining operations, including 
permittees and operators, have an affirmative duty to comply with every 
condition under which a permit is issued in order to continue to have 
the benefit of an approved permit. We also believe that regulatory 
authorities must have the ability to compel compliance of persons who 
fail to comply with permit conditions. Moreover, we have concluded that 
the statutory provisions in section 201(c) of the Act provide the 
authority for proposed Sec. 846.15.
    Paragraph (a) of proposed Sec. 846.15 provides the general 
provision for suspension or revocation for failure to comply with a 
permit condition. It states that if the regulatory authority finds that 
a permittee or operator, or any owner, controller, principal, or agent 
of a permittee or operator, has failed to comply with any condition 
imposed on an approved permit, the agency will order the permittee or 
operator, or any owner, controller, principal, or agent of the 
permittee or operator, to show cause why the permit should not be 
suspended or revoked.
    Proposed paragraph (b) provides procedures for suspension or 
revocation for failure to comply with additional permit conditions 
provided for in proposed Sec. 773.18. Paragraph (b) provides that if 
the regulatory authority finds: (1) a permittee has less than five 
years experience or controllers without demonstrated successful 
environmental compliance; and (2) the permittee or operator, or any 
owner, controller, principal, or agent of the permittee or operator has 
failed to comply with the additional permit conditions imposed under 
Sec. 773.18 and the permittee is unable or unwilling to comply with the 
mining and reclamation plans. We have proposed this provision to 
provide regulatory authorities with an administrative remedy to use 
when a permittee or operator or other person subject to the additional 
permit conditions under Sec. 773.18 fails to comply with the additional 
conditions. We also invite comments on the proposal in Sec. 846.15, 
especially the criteria the regulatory authority would use to find a 
permittee unable or unwilling to comply with the mining and reclamation 
plan.
    Proposed paragraph (c) provides for the hearing and order under the 
procedures for suspension or revocation of a permit for failure to 
comply with a permit condition.
    Proposed paragraph (c)(1) provides that if the permittee files an 
answer to the show cause order and requests a hearing under 43 CFR part 
4 Subpart L, a public hearing may be provided as set forth in that 
part.
    Proposed paragraph (c)(2) provides that if the Office of Hearings 
and Appeals revokes the permit, the permittee and the operator, if any, 
must immediately cease surface coal mining operations on the permit and 
must complete reclamation within the time specified in the order.
    Proposed paragraph (c)(3) provides that if the permit is suspended, 
the permittee and operator must complete all affirmative obligations to 
abate all conditions, practices, or violations as specified in the 
order.
    Proposed paragraph (c)(4) provides that if the right of an owner, 
controller, principal or agent of the permittee or operator to engage 
in or carry out surface coal mining operations is suspended or revoked, 
such person is prohibited from owning, controlling, or serving as a 
principal or agent for any surface coal mining operation as specified 
in the order.
    Proposed paragraph (d) provides for the service of the show cause 
order under the procedures for suspension or revocation of a permit for 
failure to

[[Page 70614]]

comply with a permit condition. Paragraph (d) provides that the 
provisions for service in Sec. 846.14 also govern service under 
Sec. 846.15.
AA.7. Section 846.16--Civil Actions for Relief
    We propose to create Sec. 846.16 to provide procedures whereby OSM 
and State regulatory authorities may pursue civil actions for relief 
under the authority of section 521(c) of the Act. We propose to add 
these provisions to part 846 to complement administrative 
determinations and referrals for prosecution. Under each remedial 
action, whether administrative, civil, or criminal, we would seek 
compliance from those who would ignore, fail, or refuse to meet their 
affirmative duty to comply with the Act and the regulatory program. The 
use of the regulations in Sec. 846.16 entails a finding by the 
regulatory authority that a person meets the proposed criteria and 
referral to the Attorney General, as appropriate, to pursue one or more 
appropriate civil actions under the Act and these regulations.
    Proposed paragraph (a) provides that under section 521(c) of the 
Act, OSM will request the Attorney General to institute civil action 
for relief according to these procedures. Civil actions for relief 
include a permanent or temporary injunction, restraining order, or any 
other appropriate order in the district court of the United States for 
the district in which the surface coal mining operation is located or 
in which the permittee or operator has its principal office. OSM or the 
State regulatory authority will seek such civil action whenever a 
permittee or operator, or owner, controller, principal, or agent of the 
permittee or operator is found to have committed any one of six actions 
described in the paragraphs that follow.
    Proposed paragraph (a)(1) provides that OSM or a State regulatory 
authority may pursue a civil action for relief if the permittee or 
operator, or owner, controller, principal, or agent of the permittee or 
operator has: (i) violated or failed or refused to comply with any 
order or decision issued by OSM or the State regulatory authority with 
jurisdiction under the Act; or (ii) interfered with, hindered, or 
delayed the agency with jurisdiction in carrying out the provisions of 
the Act or its implementing regulations.
    Proposed paragraph (a)(1)(iii) provides that OSM or a State 
regulatory authority may pursue a civil action for relief if the 
permittee or operator, or owner, controller, principal, or agent of the 
permittee or operator has refused to admit the agency's authorized 
representative onto the mine site.
    Proposed paragraph (a)(1)(iv) provides that OSM or a State 
regulatory authority may pursue a civil action for relief if the 
permittee or operator, or owner, controller, principal, or agent of the 
permittee or operator has refused to allow inspection of the mine by 
the agency's authorized representative.
    Proposed paragraph (a)(1)(v) provides that OSM or a State 
regulatory authority may pursue a civil action for relief if the 
permittee or operator, or owner, controller, principal, or agent of the 
permittee or operator has refused to furnish any information or report 
requested by the agency under the provisions of the Act or its 
implementing regulations.
    Proposed paragraph (a)(1)(vi) provides that OSM or a State 
regulatory authority may pursue a civil action for relief if the 
permittee or operator, or owner, controller, principal, or agent of the 
permittee or operator has refused to allow access to, and copying of, 
such records as the agency determines necessary to carry out the 
provisions of the Act and its implementing regulations.
    Proposed paragraph (b) provides that temporary restraining orders 
will be issued in accordance with Rule 65 of the Federal Rules of Civil 
Procedure, as amended.
    Proposed paragraph (c) provides that any relief granted by the 
court to enforce an order under paragraph (a)(1)(i) of this section 
will continue in effect until completion of all proceedings for review 
of such order under the Act or its implementing regulations unless, 
beforehand, the district court granting such relief sets aside or 
modifies the order.
    We also propose to incorporate the current provisions at 
Secs. 846.17 and 846.18 into the provisions proposed at Sec. 846.12, as 
noted in that section.

IV. 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.
    a. 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.
    b. This rule will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency.
    c. This rule does not alter the budgetary effects or entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients.
    d. 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 determination is based on the findings that the regulatory 
additions in the rule will not significantly change costs to industry 
or to the Federal, State, or local governments. Furthermore, the rule 
produces no adverse effects on competition, employment, investment, 
productivity, innovation, or the ability of United States enterprises 
to compete with foreign-based enterprises in domestic or export 
markets.

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.
    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 major 
new requirements on the coal mining industry or consumers.
    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. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 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. This determination is based on the 
fact that the rule will not have an impact on the use or value of 
private property and so,

[[Page 70615]]

does not result in significant costs to the government.

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 for the reasons discussed in the Record of 
Compliance on file in OSM's Administrative Record. The proposed rule 
does not meet the threshold criteria for requiring a Federalism 
Assessment because it would not ``have substantial direct effects on 
the States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among 
various levels of government.''

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

    In accordance with 44 U.S.C. 3507, OSM has submitted the 
information collection and record keeping requirements of 30 CFR Parts 
773, 774, and 778 to the Office of Management and Budget (OMB) for 
review and approval.
30 CFR Part 773
    Title: Requirements for Permits and Permit Processing.
    OMB Control Number: 1029-NEW.
    Abstract: The regulations at 30 CFR 773 implement section 510 (c) 
of the Act by requiring information from permit applicants, the 
coordination and regulatory review of information regarding ownership 
and control of the applicant and violation history, and the public 
participation in the approval process for a surface coal mining permit. 
It also establishes notification requirements and decision criteria for 
the agency responsible for making decisions on applications.
    Need for and Use: OSM and State regulatory authorities use the 
information collected under 30 CFR Part 773 to ensure that persons 
planning to conduct surface coal mining operations meet the criteria 
for permit approval under section 510(b) of the Act, and is eligible to 
receive a permit under section 510(c).
    Respondents: Persons who prepare the approximately 300 applications 
for permits for surface coal mining operations that OSM and State 
regulatory authorities receive each year, and the 24 State regulatory 
authorities who must evaluate the permit applications.
    Total Annual Burden: OSM estimates that a person will need an 
average of 34 hours to prepare the portion of the permit application 
required under part 733, including the regulatory review time. The 
burden placed on respondents by section is as follows:

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[GRAPHIC] [TIFF OMITTED] TP21DE98.058


30 CFR Part 774
    Title: Revision; Renewal; and Transfer, Assignment, or Sale of 
Permit Rights.
    OMB Control Number: 1029-NEW.
    Abstract: Sections 506 and 511 of the Act provide that persons 
seeking permit revisions, renewals, transfer, assignment, or sale of 
permit rights for surface coal mining activities submit relevant 
information to the regulatory authority to determine whether the 
applicant meets the requirements for the action anticipated.
    Need For and Use: OSM and State regulatory authorities use the 
information collected to determine whether the application meets the 
statutory and regulatory standards for approval of a permit revision, 
renewal, or transfer, assignment or sale of permit rights.
    Respondents: Persons who prepare the approximately 5,370 annual 
permit revisions, renewals, and requests for approval of permit 
transfers, sales or assignments and the 24 State regulatory authorities 
that process these permit changes.
    Total Annual Burden: The estimated annual burden for this part 
totals 97,214 hours. Specifically, OSM estimates that 4,000 permit 
revisions will be received annually, requiring 8 hours for each 
respondent to prepare, and an additional 8 hours for each State 
regulatory authority to review and approve or deny. OSM anticipates 
receiving 725 permit renewals annually requiring 16 hours for operators 
to prepare, and an additional 16 hours for each State regulatory 
authority to review and approve or deny. Finally, OSM estimates that 
645 applications for transfer, assignment, or sale of permit rights 
will be received annually requiring 8 hours to prepare and 8 hours to 
review by the appropriate regulatory authority. Therefore, OSM 
estimates that respondent burden will be 32 hours for the average 
request for permit renewals, revisions, or transfers, assignments or 
sales, in addition to the time required for regulatory review.
30 CFR Part 778
    Title: Permit Applications--Minimum Requirements for Legal, 
Financial, Compliance, and Related Information.
    OMB Control Number: 1029-NEW.
    Abstract: Part 778 implements section 507(b) of the Act which 
provides that

[[Page 70616]]

persons applying for a permit to conduct surface coal mining operations 
must submit to the regulatory authority certain information regarding 
the applicant and affiliated entities, their compliance history, 
property ownership and other property rights, right of entry, liability 
insurance, the status of unsuitability claims, and proof of publication 
of a newspaper notice to promote public participation.
    Need For and Use: OSM and State regulatory authorities use the 
information collected to insure that all legal, financial and 
compliance requirements are satisfied prior to issuance of a permit.
    Respondents: Persons who prepare the approximately 300 annual 
permit applications to conduct surface coal mining and reclamation 
operations, and the 24 State regulatory authorities who process the 
information prior to approval or denial of the application.
    Total Annual Burden: The estimated annual burden for this part 
totals 8,223 hours, which translates to an approximate burden of 25 
hours for respondents to complete this portion of the permit 
application, in addition to the time required for regulatory review. 
The burden placed on respondents by section is as follows:

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[GRAPHIC] [TIFF OMITTED] TP21DE98.059


    Comments are invited on:
    (a) Whether the proposed collection of information is necessary for 
the proper performance of OSM and State regulatory authorities, 
including whether the information will have practical utility;
    (b) The accuracy of OSM's estimate of the burden of the proposed 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (d) Ways to minimize the burden of collection on the respondents.
    Under the Paperwork Reduction Act, OSM must obtain OMB approval of 
all information and record keeping requirements. No person is required 
to respond to an information collection request unless the form or 
regulation requesting the information has a currently valid OMB control 
(clearance) number. These numbers appear in section xxx.10 of 30 CFR 
Parts 700 through 955. To obtain a copy of OSM's information collection 
clearance requests, explanatory information, and related forms, contact 
John A. Trelease at (202) 208-2783 or by e-mail at [email protected].
    By law, OMB must submit comments to OSM within 60 days of 
publication of this proposed rule, but may respond as soon as 30 days 
after publication. Therefore, to ensure consideration by OMB, you must 
send comments regarding these burden estimates or any other aspect of 
these information collection and record keeping requirements by January 
20, 1999, to the Office of Management and Budget, Office of Information 
and Regulatory Affairs, Attention: Interior Desk Officer, 725 17th 
Street, NW, Washington, DC 20503. Please refer to the appropriate OMB 
Control Numbers in any correspondence.

9. National Environmental Policy Act

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

10. Clarity of this regulation.

    Executive Order 12866 requires each agency to write regulations 
that are easy to understand. We invite your comments on how to make 
this proposed rule easier to understand, including answers to questions 
such as the following: (1) Are the requirements in the proposed rule 
clearly stated? (2) Does the proposed rule contain technical language 
or jargon that interferes with its clarity? (3) Does the format of the 
proposed rule (grouping and order of sections, use of headings, 
paragraphing, etc.) aid or reduce its clarity? (4) Would the rule be 
easier to understand if it were divided into more (but shorter) 
sections? (A ``section'' appears in bold type and is preceded by the 
symbol ``Sec. '' and a numbered heading; for example, Sec. 773.15). (5) 
Is the description of the proposed rule in the SUPPLEMENTARY 
INFORMATION section of this preamble helpful in

[[Page 70617]]

understanding the proposed rule? What else could we do to make the 
proposed rule easier to understand?
    Send a copy of any comments that concern how we could make this 
proposed rule easier to understand to: Office Regulatory Affairs, 
Department of the Interior, Room 7229, 1849 C Street NW, Washington, DC 
20240. You may also e-mail the comments to this address: 
E[email protected]

11. Authors

    The proposed rule has been developed by the Ownership and Control 
Redesign Team. Earl Bandy is the Team Leader. The principal authors 
from the Team were Ann Singleton, Gary Kitzmiller, Sherry Wilson, and 
Steve McEntegart. Editing the proposed rule was coordinated by Steve 
McEntegart, Office of Surface Mining Reclamation and Enforcement, U.S. 
Department of the Interior, 1951 Constitution Avenue, N.W., Washington, 
D.C. 20240.

List of Subjects

30 CFR Part 701

    Law enforcement, Surface mining, Underground mining.

30 CFR Part 724

    Administrative practice and procedure, Penalties, Surface mining, 
Underground mining.

30 CFR Part 773

    Administrative practice and procedure, Reporting and record keeping 
requirements, Surface mining, Underground mining.

30 CFR Part 774

    Reporting and record keeping requirements, Surface mining, 
Underground mining.

30 CFR Part 778

    Reporting and record keeping requirements, Surface mining, 
Underground mining.

30 CFR Part 842

    Law enforcement, Surface mining, Underground mining.

30 CFR Part 843

    Administrative practice and procedure, Law enforcement, Reporting 
and record keeping requirements, Surface mining, Underground mining.

30 CFR Part 846

    Administrative practice and procedure, Penalties, Surface mining, 
Underground mining.

    Dated: December 4, 1998.
Sylvia V. Baca,
Acting Assistant Secretary, Land and Minerals Management.
    For the reasons given in the preamble, OSM proposes to amend 30 CFR 
Parts 701, 724, 773, 774, 778, 842, 843, and 846 as set forth below:

PART 701--PERMANENT REGULATORY PROGRAM

    1. Revise the authority citation for part 701 to read as follows:

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

    2. Amend Sec. 701.5 as follows:
    a. Remove the definition of Willful violation.
    b. Revise the definition of Successor in interest to read as set 
forth below:
    c. Add the following definitions in alphabetical order to read as 
set forth below:


Sec. 701.5  Definitions.

    Applicant/Violator System or AVS means the automated information 
system of applicant, permittee, operator, violation, and related data 
OSM maintains to achieve compliance with SMCRA.
* * * * *
    Federal violation notice means a violation notice issued by OSM or 
by another agency or instrumentality of the United States.
* * * * *
    Knowing or knowingly means that an individual knew or had reason to 
know in authorizing, ordering, or carrying out an act or omission that 
such an act or omission constituted a violation of the Act, or a 
failure or refusal to comply with the Act.
* * * * *
    Link to a violation means that a person owning or having the 
ability to control the proposed surface coal mining operation has owned 
or had the ability to control surface coal mining operations at another 
site at the time a violation existed at that other operation.
* * * * *
    Outstanding violation means a violation notice that remains 
unabated or uncorrected beyond the abatement or correction period.
* * * * *
    State violation notice means a violation notice issued by a State 
regulatory authority or by another agency or instrumentality of State 
government.
* * * * *
    Successful environmental compliance means having no outstanding 
violations and demonstrating consistent abatement and other correction 
of violations, payment of civil penalties, and payment of reclamation 
fees within the time frames established for abatement and payment, 
allowing for administrative due process.
    Successor in interest means a person who the regulatory authority 
approves as the new permittee when there is a permittee change.
* * * * *
    Violation notice means any written notification from a governmental 
entity of a violation of the Act or any Federal regulation issued under 
the Act, a State program, or any Federal or State law or regulation 
pertaining to air or water environmental protection, in connection with 
a surface coal mining operation. It includes, but is not limited to, a 
notice of violation; an imminent harm cessation order; a failure-to-
abate cessation order; a final order, bill, or demand letter pertaining 
to a delinquent civil penalty; a bill or demand letter pertaining to 
delinquent reclamation fees; a notice of bond forfeiture, where one or 
more violations upon which the forfeiture was based have not been 
corrected; a notice of bond forfeiture where the cost of reclamation 
has exceeded the amount forfeited, or in States with bond pools, a 
determination that additional reclamation or reimbursement is required.
* * * * *
    Willful or willfully means that an individual acted either 
intentionally, voluntarily or consciously, and with intentional 
disregard or plain indifference to legal requirements in authorizing, 
ordering or carrying out an action or omission that constituted a 
violation of the Act, or a failure or refusal to comply with the Act or 
any Federal or State law or regulation applicable to surface coal 
mining operations.

Part 724--INDIVIDUAL CIVIL PENALTIES

    3. Revise the authority citation for part 724 to read as follows:

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


Sec. 724.5  [Amended]

    4. In Sec. 724.5 remove the definitions of Knowingly and Willfully.

PART 773--REQUIREMENTS FOR PERMITS AND PERMIT PROCESSING

    5. Revise the authority citation for part 773 to read as follows:

    Authority: 30 U.S.C. 1201 et seq., 16 U.S.C. 470 et seq., 16 
U.S.C. 661 et seq., 16 U.S.C. 703 et seq., 16 U.S.C. 668a et seq., 
16 U.S.C. 469 et seq., and 16 U.S.C. 1531 et seq.

[[Page 70618]]

Sec. 773.5   [Removed]

    6. Remove Sec. 773.5.
    7. Revise Sec. 773.10 to read as follows:


Sec. 773.10  Information Collection.

    (a) Under the Paperwork Reduction Act, the Office of Management and 
Budget (OMB) has approved the information collection requirements of 
this part. Regulatory authorities will use this information in 
processing surface coal mining permit applications. Persons intending 
to conduct such operations must respond to obtain a benefit. A Federal 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number. The OMB clearance number for this part is 
1029-NEW.
    (b) We estimate that the public reporting burden for this part will 
average 34 hours per response, including time spent reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Send comments regarding this burden estimate 
or any other aspect of these information collection requirements, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, Room 210, 1951 Constitution Avenue, NW, Washington, DC 20240; 
and the Office of Management and Budget, Office of Information and 
Regulatory Affairs, Attention: Interior Desk Officer, 725 17th Street, 
NW, Washington, DC 20503. Please refer to OMB Control Number 1029-NEW 
in any correspondence.
    8. Amend Sec. 773.15 as follows:
    a. In the last sentence of paragraph (a)(1) remove the reference to 
``paragraph (b)(2) of this section'' and add ``part 775 of this 
chapter'' in its place.
    b. Add paragraph (a)(3) to read as set forth below.
    c. Revise paragraphs (b)(1), (b)(2), and (b)(3) to read as set 
forth below.
    d. In paragraph (b)(4)(i)(C)(1) remove the date ``September 30, 
1994'' and add ``September 30, 2004'' in its place.
    e. Revise paragraph (e) to read as set forth below.


Sec. 773.15  Review of permit applications.

    (a) * * *
    (3) We, the regulatory authority, will determine whether you, the 
applicant, are eligible under Sec. 773.16 to receive a permit.
    (i) We will evaluate whether your application contains accurate and 
complete information, to make the finding required under paragraph 
(c)(1) of this section.
    (ii) If we find that you have submitted inaccurate, incomplete, or 
inconsistent legal identity, compliance, or technical information, you 
must correct the omission, inaccuracy, or inconsistency. We may stop 
review of the application until the issue is resolved.
    (b) Review of the applicant's legal identity information. (1) We 
will make an initial determination whether your legal identity 
information submitted under Sec. 778.13 of this chapter is accurate and 
complete, based upon information provided in the permit application, an 
AVS check, and all other reasonably available information. Once we make 
a preliminary determination that the information is accurate and 
complete, we will update the relevant records in the AVS with any 
previously unreported legal identity information within 30 days. This 
update must occur before requesting a report from the AVS on the 
applicant's compliance history under paragraph (b)(3)(i) of this 
section.
    (i) If we find that you, the operator, or any owner, controller, 
principal, or agent of you or your operator has knowingly or willfully 
concealed information about any person owning or having the ability to 
control you or your operator we will--
    (A) Inform you in writing of our finding and ask you or the 
operator to disclose all persons having such a relationship to you or 
the operator before making a decision on a permit application; and
    (B) Investigate to determine if your response under paragraph 
(b)(1)(i)(A) of this section is a full disclosure.
    (1) Depending on the results of your response to paragraph 
(b)(1)(i)(A) of this section and the investigation under paragraph 
(b)(1)(i)(B), we may deny the permit application; and
    (2) Refer our finding to the Attorney General or equivalent State 
office for prosecution under section 518(g) of the Act and Sec. 846.11 
of this chapter.
    (2) Review of the applicant's permit history. (i) We will use AVS 
and any other available information to review your permit history and 
the permit history of any person with the ability to control you. Our 
review will determine how long you or those with the ability to control 
you or the operation have conducted surface coal mining operations and 
whether such conduct has been in compliance with applicable 
requirements.
    (ii) If you have 5 years or more experience as a permittee or 
operator of a surface coal mining operation, you are not subject to 
additional permit conditions under Sec. 773.18 unless any person with 
the ability to control you or the operation is linked to an outstanding 
violation.
    (iii) If we determine from the information provided in the 
application under Sec. 778.13 of this chapter that none of the persons 
identified in the application has had any previous mining experience, 
we will ask you to affirm that neither you nor any person with the 
ability to control you has mining experience. We will investigate 
whether any person not identified in the application will control the 
proposed surface coal mining operation as either an operator or other 
controller as defined in Sec. 778.5 of this chapter.
    (3) Review of the applicant's compliance history. (i) Review of 
violations. We will request a report from AVS on your history of 
compliance with SMCRA whenever there is an application for a permit or 
revision, renewal, transfer, assignment, or sale of permit rights.
    (A) We will rely upon your compliance history, and the history of 
operations you owned or controlled, to make a permit eligibility 
finding under section 510(c) of SMCRA, unless there is an indication 
that the history of persons other than you also should be included.
    (B) If you, or any surface coal mining operation you owned or 
controlled, has an outstanding violation, we may not approve the 
application unless:
    (1) The regulatory authority with jurisdiction over the violation 
approves a properly executed abatement plan or payment schedule; or
    (2) The violation is being abated or is the subject of a good faith 
administrative or judicial appeal, contesting the validity of the 
violation; or
    (3) The violation is subject to the presumption of NOV abatement 
under Sec. 773.16(b).
    (C) Any application approved with outstanding violations must be 
conditioned under Sec. 773.17(j).
    (D) OSM will serve a preliminary finding of permanent permit 
ineligibility under 43 CFR 4.1351 on you or an operator if we find 
that:
    (1) You owned or controlled mining operations with a demonstrated 
pattern of willful violations of the Act and its implementing 
regulations, and
    (2) The violations are of such nature and duration that they result 
in irreparable damage to the environment so as to indicate your or your 
operator's intent not to comply with the Act or implementing 
regulations.
    (E) You or your operator may request a hearing under 43 CFR 4.1350 
through

[[Page 70619]]

4.1356 with the Office of Hearings and Appeals within 30 days of 
receiving a preliminary finding under paragraph (3)(i)(D) of this 
section. If you or your operator files a request for a hearing under 43 
CFR 4.1350 through 4.1356, the Office of Hearings and Appeals will:
    (1) Give written notice of the hearing to you or the operator and
    (2) Issue a decision within 60 days of the filing of the request 
for a hearing.
    (F) You or your operator may appeal the decision of the 
administrative law judge to the Interior Board of Land Appeals under 
procedures in 43 CFR 4.1271 through 4.1276 within 20 days after you or 
your operator receives the decision.
    (G) You are not eligible for a permit if you or anyone proposing to 
engage in or carry out operations on the proposed permit has been 
barred, disqualified, restrained, enjoined, or otherwise prohibited 
from mining under Secs. 773.15(b)(3)(i)(C) or 846.16 of this chapter or 
by a Federal or State court.
    (ii) Examination of the applicant's controllers. (A) We ask for an 
AVS report on your owners or controllers that shows:
    (1) If they owned or controlled a surface coal mining operation 
when a violation notice was issued regarding that operation; and
    (2) If the violation remains outstanding.
    (B) We will investigate each person and violation to determine 
whether alternative enforcement action under part 846 of this chapter 
is appropriate. We will enter the results of each determination or 
referral into AVS.
    (C) If we find that you have less than 5 years experience or have 
owners or controllers that are linked to outstanding violations:
    (1) We will consider you to have insufficient or unsuccessful 
environmental compliance and
    (2) You will be subject to additional permit conditions under 
Sec. 773.18.
* * * * *
    (e) Final compliance review. After we determine you are eligible 
for a permit, but before the permit is issued, we will review any new 
information submitted or discovered during the permit application 
review. No more than 3 business days before permit issuance, we will 
again request a report from AVS on your history of compliance with 
SMCRA to ensure that you are not currently linked to any outstanding 
violations.
    9. Add Sec. 773.16 to read as follows:


Sec. 773.16  Permit eligibility determination.

    (a) We will determine whether you are eligible for a permit based 
upon your permit and compliance history, operations you own or control, 
and operations you owned or controlled.
    (1) If we find you eligible based upon your permit and compliance 
history and the compliance history of your owners and controllers under 
Sec. 773.15, then we will determine whether we should impose additional 
conditions under Sec. 773.18 before permit issuance.
    (2) If we find you ineligible, we will send you written notice of 
our decision. The notice will tell you why you are ineligible and how 
to challenge a finding on the ability to control a surface coal mining 
operation.
    (b) Presumption of NOV abatement. This paragraph applies to a 
notice of violation (NOV) issued under Sec. 843.12 of this chapter or 
under a Federal or State program. If the requirements in paragraph 
(b)(1) of this section are met, we may presume that an NOV is being 
corrected. We then will add conditions to an approved permit using the 
presumption of NOV abatement as required under Sec. 773.17(l).
    (1) We may presume that an NOV is being corrected to the 
satisfaction of the agency with jurisdiction over the violation if:
    (i) There is no failure-to-abate cessation order; and
    (ii) The abatement period for the notice of violation has not yet 
expired.
    (2) The presumption in paragraph (b) of this section does not 
apply:
    (i) If the abatement period has expired;
    (ii) If applicants are subject to additional permit conditions 
under Sec. 773.18;
    (iii) Where evidence that the violation is not being abated appears 
in the permit application or otherwise discovered; or
    (iv) If the notice of violation is issued for nonpayment of 
reclamation fees or civil penalties.
    (3) Where the conditions in paragraph (b)(2) of this section apply, 
we may not approve the application unless you meet one of the criteria 
under Sec. 773.15(b)(3)(i)(B).
    10. In Sec. 773.17 revise paragraph (h) and add paragraphs (i) 
through (m) to read as follows:


Sec. 773.17  Permit conditions.

* * * * *
    (h) Within 30 days after a cessation order is issued under 
Sec. 843.11 of this chapter, you, the applicant, must comply with the 
requirements of this paragraph.
    (1) You must submit to us, the regulatory authority, either:
    (i) All of the information required from a permit application by 
Sec. 778.13(c), (e) and (g) of this chapter; or
    (ii) If you have already submitted the information required by 
paragraph (h)(1)(i) of this section:
    (A) Any new information needed to correct or update your previous 
submission; or
    (B) A written notification that there has been no change since the 
last time you submitted the information.
    (2) You do not have to make a submission under paragraph (h) of 
this section if a stay of the cessation order is granted and remains in 
effect.
    (i) We assume that you are a controller under the permit if:
    (1) You are the permittee, operator, or another person named in the 
application; and (2) You are named in the application as having the 
ability to determine the manner in which the surface coal mining 
operation is conducted.
    (j) All controllers are jointly and severally responsible for 
compliance with the terms and conditions of the permit and the 
regulatory program. All controllers are subject to the jurisdiction of 
the Secretary of the Interior. A breach of their responsibility for 
compliance with the terms and conditions of the permit and the 
regulatory program may result in individual liability for a controller.
    (k) We may determine at any time that additional persons are 
controllers. After the permit is issued, if we identify any additional 
controllers or they are added by you or the operator, the new 
controller will be subject to the requirement to certify under 
Sec. 778.13(m) of this chapter.
    (l) As applicable, you or the operator must abate or correct any 
outstanding violation or payment or receive an administrative or 
judicial decision invalidating the violation.
    (m) The permit is subject to any other special permit conditions we 
determine necessary to ensure compliance with the performance standards 
and regulations.
    11. Add Sec. 773.18 to read as follows:


Sec. 773.18  Additional permit conditions.

    We, the regulatory authority, will include additional permit 
conditions in any permit issued to you, the applicant, if you have less 
than 5 years experience in surface coal mining operations, or if your 
controllers have not demonstrated successful environmental compliance.
    (a) If you fail to comply with additional permit conditions under 
this section, we may find that you are unable or unwilling to comply 
with the mining and reclamation plan. This finding constitutes adequate 
reason for us to promptly issue an order for you to show cause why we 
should not suspend or

[[Page 70620]]

revoke the permit under Sec. 846.15 of this chapter.
    (b) You must pay all civil penalties assessed under part 845 of 
this chapter within 30 days of the date of a final order of the 
Secretary. You must pay all Abandoned Mine Land (AML) reclamation fees 
under part 870 of this chapter within 30 days of the end of the 
calendar quarter for which they are due. You must pay AML audit debts 
within 30 days of the date of the demand letter sent from OSM.
    (c) You must take all possible steps to abate any violation within 
the period set for abatement.
    (d) You must maintain continuous and uninterrupted compliance with 
any provision of an abatement plan or payment schedule or other 
settlement agreement.
    12. Revise Sec. 773.20 to read as follows:


Sec. 773.20  Improvidently issued permits: General procedures.

    (a) Permit review. If a regulatory authority believes that it 
improvidently issued a surface coal mining and reclamation permit, it 
must review the circumstances under which the permit was issued, using 
the criteria in paragraph (b) of this section. If we, the regulatory 
authority, find that the permit was improvidently issued, we will take 
remedial measures under paragraph (c) of this section.
    (b) Review criteria. We will find that a surface coal mining and 
reclamation permit was improvidently issued if:
    (1) Under the violations review criteria of the regulatory program 
at the time the permit was issued:
    (i) The permit should not have been issued because of an 
outstanding violation or a delinquent penalty or fee; or
    (ii) The permit was issued on the presumption that a notice of 
violation was in the process of being corrected to the satisfaction of 
the agency with jurisdiction over the violation, but a cessation order 
subsequently was issued; or
    (iii) You, the applicant, failed to disclose any other relevant 
information that, if properly disclosed at the time of the initial 
application, would have made you ineligible; and
    (2) The violation, penalty, or fee:
    (i) Remains outstanding or delinquent; and
    (ii) Is not the subject of a good faith appeal, or of an abatement 
plan or payment schedule that is being met to the satisfaction of the 
responsible agency; and
    (3) You or any operation owned or controlled by you continues to be 
responsible for the violation, penalty, or fee.
    (c) Remedial measures. (1) If we find that a permit was 
improvidently issued, we will use one or more of the following remedial 
measures:
    (i) Implement a plan for abatement of the violation, establish a 
schedule for payment of the penalty or fee, or require you to correct 
the inaccurate information or provide the incomplete information;
    (ii) Suspend the permit until:
    (A) The violation is corrected to the satisfaction of the 
regulatory authority or other issuing authority with jurisdiction over 
the violation; or
    (B) The penalty or fee is paid; or
    (C) The inaccurate or incomplete information is corrected or 
provided; or
    (iii) Rescind the permit under Sec. 773.21.
    (2) If we decide to suspend the permit, we will give you written 
notice at least 30 days before the suspension is effective. If we 
decide to rescind the permit, we will issue you a notice under 
Sec. 773.21. In either case, we will give you the opportunity to 
request administrative review of the notice under 43 CFR 4.1370 through 
4.1377. Our decision will remain in effect during the pendency of the 
appeal, unless you receive temporary relief under 43 CFR 4.1376.
    13. Revise Sec. 773.21 to read as follows:


Sec. 773.21  Improvidently issued permits: Rescission procedures.

    If we, the regulatory authority, elect under Sec. 773.20(c)(1)(iii) 
to rescind an improvidently issued permit, we will serve you, the 
permittee, and persons who have the ability to control the operation, a 
notice of proposed suspension and rescission. The notice will include 
the reasons for our finding under Sec. 773.20(b) and state that:
    (a) Automatic suspension and rescission. If we determine that your 
permit was improvidently issued, after a period of time we specify (but 
not to exceed 90 days), the permit is automatically suspended. We will 
rescind your permit within 90 days after the suspension date. However, 
we will not suspend or rescind your permit if you submit proof, and we 
find, consistent with the provisions of Sec. 773.25, that:
    (1) Our finding under Sec. 773.20(b) was erroneous;
    (2) The violation has been abated, the penalty or fee paid, or the 
information corrected to the satisfaction of the responsible agency;
    (3) The violation, penalty, or fee is the subject of a good faith 
appeal, or of an abatement plan or payment schedule that is being met 
to the satisfaction of the responsible agency;
    (4) You and all operations owned or controlled by you are no longer 
responsible for the violation, penalty, fee or for providing the 
information; or
    (5) The information is subject to a pending challenge under 
Sec. 773.24.
    (b) Cessation of operations. After a permit suspension or 
rescission under paragraph (a) of this section, you must cease all 
surface coal mining operations under the permit, except for violation 
abatement and for reclamation and other environmental protection 
measures we require.
    14. Revise Sec. 773.22 to read as follows:


Sec. 773.22  Identifying entities responsible for violations.

    If you own or have the ability to control a surface coal mining 
operation, you have an affirmative duty to comply with the Act, the 
regulatory program, and the approved permit.
    (a) OSM or the State regulatory authority with jurisdiction over 
the violation will investigate each outstanding violation of the 
regulatory program to determine the identity of those responsible for 
preventing and for correcting the violation.
    (b) We will designate you in the AVS as a person we may compel to 
correct the violation through compliance with the Act and applicable 
laws and regulations if you are an:
    (1) Owner;
    (2) Controller;
    (3) Principal; or
    (4) Agent responsible for preventing or ensuring abatement or 
correction of the violation.
    (c) We will enter into AVS all outstanding violation notices issued 
under the Act and regulatory program no later than 30 days after the 
abatement or correction period has expired. We will update violation 
data in AVS to reflect the most recent change in status, such as 
abatement, correction, termination, and administrative or judicial 
appeal.
    (d) If there is a violation, we will decide whether to pursue the 
appropriate alternative enforcement action under part 846 of this 
chapter against you, the operator, or an owner, controller, or agent, 
to compel correction of the violation. The existence of a performance 
bond can not be used as the sole basis for our determination that 
alternative enforcement action is not warranted.


Sec. 773.23  [Removed]

    15. Remove Sec. 773.23.
    16. Revise Sec. 773.24 to read as follows:

[[Page 70621]]

Sec. 773.24  Procedures for challenging a finding on the ability to 
control a surface coal mining operation.

    (a) Who may challenge. Any person listed as owning or controlling a 
surface coal mining operation in a pending permit application, or who 
we find as an owner or controller, may, before certification under 
Sec. 778.13(m) of this chapter, challenge the listing or finding in 
accordance with paragraphs (b) through (d) of this section and 
Sec. 773.25.
    (b) How to challenge. If you wish to challenge your status in the 
application or a finding that you have or had the ability to control a 
surface coal mining operation, you must submit a written explanation of 
the basis for the challenge to the agency with jurisdiction over any 
existing violations. Include any supporting evidence and supporting 
documents with your explanation. If there is no violation, submit your 
written explanation to the agency with jurisdiction over the pending 
permit application.
    (c) Written decision. (1) We will review any information you submit 
under paragraph (b) of this section and issue a written decision on 
whether you have the ability to control the relevant surface coal 
mining operation. The agency issuing the decision will notify you and 
any regulatory authorities with an interest in the challenge, of the 
decision and will update, as necessary, the relevant information in 
AVS.
    (2) Service. The agency making the decision will serve a copy of 
the decision on you by certified mail, or by any means consistent with 
the rules governing service of a summons and complaint under Rule 4 of 
the Federal Rules of Civil Procedure, or the equivalent State 
counterparts. Service is complete upon delivery of the notice or of the 
mail and is not incomplete because of a refusal to accept.
    (3) Appeals procedures. Any person who is or may be adversely 
affected by a decision under paragraph (c)(1) of this section may 
appeal OSM's decision to the Department of the Interior's Office of 
Hearings and Appeals within 30 days of service of the decision in 
accordance with 43 CFR 4.1380 through 4.1387, or the equivalent State 
counterparts. The decision will remain in effect during the pendency of 
an appeal, unless temporary relief is granted in accordance with 43 CFR 
4.1386, or the equivalent State counterpart.
    (d) Limitations. No person, including a permittee or operator, may 
use these procedures, the procedures in Sec. 773.25, or the procedures 
in 43 CFR 4.1380 through 4.1387 to challenge the liability of a 
permittee, operator, or other person for reclamation fees assessed 
under Title IV of SMCRA.
    17. Revise Sec. 773.25 to read as follows:


Sec. 773.25  Standards for challenging a finding or decision on the 
ability to control a surface coal mining operation.

    (a) When do these provisions apply. The provisions of this section 
apply whenever you challenge a decision that you have the ability to 
control a surface coal mining operation under the provisions of 
Secs. 773.20, 773.21, or 773.24 or under the provisions of part 775 of 
this chapter.
    (b) Agencies responsible. (1) The State regulatory authority will 
make a decision on a challenge to a finding on the ability to control 
surface coal mining operations with respect to a State-issued citation.
    (2) OSM will make a decision on a challenge to a finding on the 
ability to control surface coal mining operations with respect to a 
Federal violation notice issued under SMCRA.
    (3) The regulatory authority (OSM or the State) which processed the 
application or which issued the permit will make a decision on a 
challenge to a finding on the ability to control surface coal mining 
operations not associated with a violation.
    (4) The State or Federal agency with jurisdiction over the 
violation will determine whether the violation has been abated or 
corrected.
    (c) Evidentiary standards. (1) In any formal or informal review of 
a challenge to a finding, the responsible agency will issue a written 
decision if it determines that the ability to control exists or existed 
during the relevant period.
    (2) When you challenge a finding on your ability to control the 
relevant surface coal mining operation, you must prove by a 
preponderance of the evidence, for any relevant time period, that you 
did not have the ability to control the surface coal mining operation.
    (3) In meeting the burden of proof in paragraph (c)(2) of this 
section, you must present reliable, credible, and substantial evidence 
and any explanatory materials.
    (i) Evidence and supporting material that you present before the 
responsible agency may include--
    (A) Notarized affidavits containing specific facts concerning the 
duties you performed; the beginning and ending dates of your control of 
the applicant, permittee, operator, or violator; and the nature and 
details of any transaction creating or severing the ability to control 
that person;
    (B) Certified copies of corporate minutes, stock ledgers, 
contracts, purchase and sale agreements, leases, correspondence, or 
other relevant company records;
    (C) Certified copies of documents filed with or issued by any 
State, Municipal, or Federal governmental agency;
    (D) An opinion of counsel, when supported by: evidentiary 
materials; a statement by counsel that he or she is qualified to render 
the opinion; and a statement that counsel has personally and diligently 
investigated the facts of the matter or, where counsel has not 
investigated the facts, a statement that the opinion is based upon 
information which has been supplied to counsel and which is assumed to 
be true.
    (ii) Evidence and supporting material that you present before any 
administrative or judicial tribunal reviewing the decision of the 
responsible agency, may include any evidence admissible under the rules 
of such tribunal.
    (d) Following any regulatory authority determination or any 
decision by an administrative or judicial tribunal reviewing such a 
determination, the regulatory authority will review the information in 
AVS to determine if it is consistent with the determination or 
decision. If it is not, the regulatory authority will promptly revise 
the information in AVS to reflect the determination or decision.

PART 774--REVISION; RENEWAL; AND TRANSFER, ASSIGNMENT, OR SALE OF 
PERMIT RIGHTS

    18. Revise the authority citation for part 774 to read as follows:

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

    19. Revise Sec. 774.10 to read as follows:


Sec. 774.10  Information Collection.

    (a) Under the Paperwork Reduction Act, the Office of Management and 
Budget (OMB) has approved the information collection requirements of 
this part. Regulatory authorities will use this information to 
determine if the applicant meets the requirements for revision, 
renewal, transfer, sale, or assignment of permit rights. Persons must 
respond to obtain a benefit. A Federal agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control number. 
The OMB clearance number for this part is 1029-NEW.
    (b) We estimate that the public reporting burden for this part will 
average 32 hours per response, including time spent reviewing 
instructions, searching existing data sources, gathering and 
maintaining the

[[Page 70622]]

data needed, and completing and reviewing the collection of 
information. Send comments regarding this burden estimate or any other 
aspect of these information collection requirements, including 
suggestions for reducing the burden, to the Office of Surface Mining 
Reclamation and Enforcement, Information Collection Clearance Officer, 
Room 210, 1951 Constitution Avenue, NW, Washington, DC 20240; and the 
Office of Management and Budget, Office of Information and Regulatory 
Affairs, Attention: Interior Desk Officer, 725 17th Street, NW, 
Washington, DC 20503. Please refer to OMB Control Number 1029-NEW in 
any correspondence.
    20. In Sec. 774.13 add paragraph (e) to read as follows:


Sec. 774.13  Permit revisions.

* * * * *
    (e) Notice to regulatory authority. You must report changes in 
interests required under Sec. 778.13 of this chapter but that do not 
require our written approval under Sec. 774.17. You must report this 
type of information to us within 60 days of the change. This type of 
change includes a change or addition of an officer or other person not 
identified on the currently approved permit and not requiring 
certification under Sec. 778.13(m).
    21. Revise Sec. 774.17 to read as follows:


Sec. 774.17  Transfer, assignment, or sale of permit rights.

    (a) Who must obtain approval of a transfer, assignment, or sale of 
permit rights?
    (1) You, the permittee, must apply to us for a transfer, 
assignment, or sale of permit rights. You must be able to show that 
your application complies with the requirements of the regulatory 
program.
    (2) You must obtain our approval for changes--including the change 
or addition of an operator, officer, owner, other controller, or 
permittee--by which the rights granted under a permit are transferred, 
assigned, or sold to a person not identified under the currently 
approved permit and requiring certification under Sec. 778.13(m) of 
this chapter.
    (b) What must your application contain? You must submit an 
application to us requesting approval of any proposed transfer, 
assignment, or sale, of rights granted under a permit described in 
paragraph (a)(2) of this section including--
    (1) Your name, address, and permit number;
    (2) A brief description of the proposed action requiring approval;
    (3) The legal, financial, compliance, and related information and 
violation information required under Secs. 778.13 and 778.14 of this 
chapter for the person proposed to receive permit rights by way of the 
transfer, assignment, or sale; and
    (4) The bonding company's written acceptance of those gaining 
permit rights.
    (c) How will the regulatory authority review and approve 
applications for transfer, assignment, or sale?
    (1) We, the regulatory authority, will issue written findings 
either approving or denying any application for a transfer, assignment, 
or sale of rights granted under a permit described in paragraph (a)(2) 
of this section.
    (2) We will evaluate your application for a transfer, assignment, 
or sale to determine whether a new permit or bond is required under the 
regulatory program requirements.
    (3) We will impose additional permit conditions under Sec. 773.18 
of this chapter, if the permit is not already subject to the additional 
conditions and if the transfer, assignment, or sale involves a person 
responsible for outstanding violations or an operator with owners or 
controllers responsible for outstanding violations.
    (4) We will disapprove the permittee's request for a transfer, 
assignment, or sale of rights under the permit, if the applicant is 
ineligible for a permit under Secs. 773.15(b)(2) or 773.16 of this 
chapter.
    (5) We will disapprove the permittee's request for a transfer, 
assignment, or sale of rights under the permit, if the person, 
operator, or any owner or controller of the person or operator, 
proposed to receive rights under the permit is enjoined or otherwise 
prohibited from mining under Sec. 846.16 of this chapter or by a 
Federal or State court.
    (d) Successor in interest. (1) A permittee cannot give up all 
rights granted under an existing permit until the successor in interest 
to the existing permit obtains a new permit.
    (2) Continued operations under existing permit. (i) In order for 
the successor in interest to continue uninterrupted operations under 
the existing permit, the permittee must obtain our written approval of 
the transfer, assignment, or sale of permit rights and the successor in 
interest must submit the following:
    (A) The legal, financial, compliance, and related information and 
violation information required under Secs. 778.13 and 778.14 of this 
chapter;
    (B) A performance bond, or proof of other guarantee, or obtain the 
bond coverage of the original permittee, as required by subchapter J of 
this title; and
    (C) A signed and notarized written statement assuming the liability 
and reclamation responsibilities of the existing permit.
    (ii) We will review the information submitted by the successor in 
interest under paragraph (d)(2)(i)(A) of this section using the 
criteria in Secs. 773.15(b)(2) and 773.16 of this chapter.
    (iii) If the successor in interest receives preliminary written 
approval, mining operations may commence and continue for up to 30 
days. The successor must:
    (A) Conduct the surface coal mining and reclamation operations in 
full compliance with the Act and the regulatory program;
    (B) Conduct the surface coal mining and reclamation operations 
under the terms and conditions of the existing permit and any 
additional terms or conditions that may be imposed by us;
    (C) Meet any other requirements specified by us; and
    (D) Submit an application for a new permit within 30 days of 
succeeding to such interest.
    (iv) If the successor submits a complete permit application under 
subchapter G of this title within 30 days of succeeding to such 
interest and meets the other requirements under paragraph (d)(2)(iii) 
of this section, then the successor can continue operations until we 
make the decision to either approve or deny the application for a 
permit. If we deny the successor's permit application, then the 
successor must cease operations.
    (3) Advertisement. The successor in interest must advertise the 
filing of the permit application in a newspaper of general circulation 
in the local area of the operation. The advertisement must indicate the 
name and address of the applicant, permittee, and regulatory authority 
where comments may be sent, the permit number, mine name generally 
associated with the permit, geographic location of the permit, and the 
date the regulatory authority requires receipt of comments.
    (4) Public participation. Any person having an interest which is or 
may be adversely affected by a decision on the successor in interest's 
application, including an official of any Federal, State, or local 
government agency, may submit written comments on the application to 
the regulatory authority within the time specified by the regulatory 
authority and announced in the advertisement.
    (5) We will not release the previous permittee from 
responsibilities for any affected or disturbed area of the permit until 
the successor in interest engages in

[[Page 70623]]

surface coal mining operations which substantially re-affect or re-
disturb the areas previously mined and not before the successor's 
application for a new permit is approved. Until such time, both the 
previous permittee and its successor are responsible for violations 
created after the successor begins surface coal mining operations.
    (6) The successor in interest's replacement of the previous 
permittee's performance bond needed under paragraph (d)(2)(ii) of this 
section does not form the basis for a release of the previous 
permittee's bond under Sec. 800.40 of this chapter. Bond release for 
the previous permittee is a separate consideration from the issuance of 
a new permit to its successor.
    (e) Notification. (1) We will notify the permittee, the successor, 
the new operator, or other person gaining permit rights, and 
commenters, of our findings.
    (2) The person gaining permit rights must immediately notify us 
when the transfer, assignment, or sale of permit rights or successor in 
interest transaction is complete.
    (3) We will update the relevant records in the AVS with the 
approved transfer, assignment, or sale or successor in interest 
information within 30 days of approval.

PART 778--PERMIT APPLICATIONS--MINIMUM REQUIREMENTS FOR LEGAL, 
FINANCIAL, COMPLIANCE, AND RELATED INFORMATION

    22. Revise the authority citation for part 778 to read as follows:

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

    23. In part 778, add Sec. 778.5 to read as follows:


Sec. 778.5  Applicability and definitions.

    (a) Applicability. This part applies to any person who engages in 
or carries out mining operations as an owner or controller. An owner or 
controller includes, but is not limited to, the following:
    (1) The president, other officers, directors, agents or persons 
performing functions similar to a director.
    (2) Those persons who have the ability to direct the day-to-day 
business of the surface coal mining operation.
    (3) The permittee, or an operator if different from the permittee.
    (4) Partners in a partnership, the general partner in a limited 
partnership, or the participants, members, or managers of a limited 
liability company.
    (5) Persons owning the coal (through lease, assignment, or other 
agreement) and retaining the right to receive or direct delivery of the 
coal.
    (6) Persons who make the mining operations possible by contribution 
(to the permittee or operator) of capital or other resources necessary 
for mining to commence or for operations to continue at the site. 
Examples of resources include a personal guarantee to obtain the 
reclamation bond, the assumption of responsibility for the liability 
insurance, a captive coal supply contract, and mining equipment.
    (7) Persons who control the cash flow or can cause the financial or 
real property assets of a corporate permittee or operator to be 
employed in the mining operation or distributed to creditors.
    (8) Persons who cause operations to be conducted in anticipation of 
their desires or who are the animating force behind the conduct of 
operations.
    (b) For the purposes of this subchapter:
    (1) Ownership means holding an interest in a sole proprietorship, 
being a general partner in a partnership, owning 50 percent or more of 
the stock in a corporation, or having the right to use, enjoy, or 
transmit to others the rights granted under a permit.
    (2) Control means to own, manage, or supervise surface coal mining 
and reclamation operations, as either a principal or an agent, such 
that the person has the ability, alone or in concert with others, to 
influence or direct the manner in which surface coal mining operations 
are conducted.
    24. Revise Sec. 778.10 to read as follows:


Sec. 778.10  Information collection.

    (a) Under the Paperwork Reduction Act, the Office of Management and 
Budget (OMB) has approved the information collection requirements of 
this part. Section 507(b) of SMCRA provides that persons applying for a 
permit to conduct surface coal mining operations must submit to the 
regulatory authority certain information regarding the applicant and 
affiliated entities, their compliance status and history, property 
ownership and other property rights, right of entry, liability 
insurance, the status of unsuitability claims, and proof of publication 
of a newspaper notice. The regulatory authority uses this information 
to ensure that all legal, financial and compliance requirements are 
satisfied before issuance of a permit. Persons seeking to conduct 
surface coal mining operations must respond to obtain a benefit. A 
Federal agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB clearance number for this 
part is 1029-NEW.
    (b) We estimate that the public reporting and record keeping burden 
for this part averages 25 hours per response, including time spent 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Send comments regarding this burden estimate 
or any other aspect of these information collection and record keeping 
requirements, including suggestions for reducing the burden, to the 
Office of Surface Mining Reclamation and Enforcement, Information 
Collection Clearance Officer, 1951 Constitution Avenue, N.W., 
Washington, DC 20240; and the Office of Management and Budget, Office 
of Information and Regulatory Affairs, Attention: Interior Desk 
Officer, 725 17th Street, NW, Washington, DC 20503. Please refer to OMB 
Control Number 1029-NEW in any correspondence.
    25. Revise Sec. 778.13 to read as follows:


Sec. 778.13  Legal identity and identification of interests.

    Your permit application must contain the following information (if 
you have existing permits, paragraph (o) of this section applies to 
you):
    (a) A statement as to whether you are a corporation, partnership, 
single proprietorship, association, or other business entity.
    (b) The name, address, telephone number, and taxpayer 
identification number of the:
    (1) Applicant;
    (2) Your resident agent who will accept service of process;
    (3) Operator (if different from applicant);
    (4) Person(s) responsible for submitting the Coal Reclamation Fee 
Report (OSM-1) and for remitting the reclamation fee payment to OSM; 
and
    (5) All other persons who will engage in or carry out surface coal 
mining operations as an owner or controller on the permit.
    (c) You must provide the information required by paragraphs (c)(1) 
through (3) of this section.
    (1) You must provide for every person (except a publicly traded 
corporation) specified in paragraph (c)(3) of this section:
    (i) The person's name, address, and taxpayer identification number;
    (ii) The person's ownership or control relationship to you, 
including the percentage of ownership and location in the 
organizational structure; and
    (iii) The title of the person's position, the date that the person 
assumed the position, and, when submitted under

[[Page 70624]]

Sec. 773.17(h) of this chapter, the date of departure from the 
position.
    (2) If a person specified in paragraph (c)(3) of this section is a 
publicly traded corporation, you must provide the corporation's:
    (i) Name;
    (ii) Address; and
    (iii) Taxpayer identification number.
    (3) You must provide the information required by paragraph (c)(1) 
or (2) of this section for every:
    (i) Officer;
    (ii) Director;
    (iii) Person performing a function similar to a director;
    (iv) Person who owns or controls the applicant or the operator 
under the definitions of ``ownership'' and ``control'' in Sec. 778.5, 
if that person is different from the applicant; and
    (v) Person who owns 10 to 50 percent of the applicant or the 
operator.
    (d) You don't need to report any owner that is a corporation not 
licensed to do business in any State or territory of the United States.
    (e) For each of your or your operator's partners or principal 
shareholders, all names under which those persons operate or previously 
operated a surface coal mining and reclamation operation in the United 
States within the 5 years preceding the date of the application.
    (f) The application number or other identifier of, and the 
regulatory authority for, any other pending surface coal mining 
operation permit application either you or your operator filed in any 
State in the United States.
    (g) For any surface coal mining operation permit held by you or 
your operator during the 5 years preceding the date of the application, 
the operation's name, address, identifying numbers, including taxpayer 
identification number, Federal or State permit number and MSHA number, 
and the regulatory authority.
    (h) The name and address of each legal or equitable owner of record 
of the surface and mineral property to be mined, each holder of record 
of any leasehold interest in the property to be mined, and any 
purchaser of record under a real estate contract for the property to be 
mined.
    (i) The name and address of each owner of record of all property 
(surface and subsurface) contiguous to any part of the proposed permit 
area.
    (j) The Mine Safety and Health Administration (MSHA) numbers for 
all mine-associated structures that require MSHA approval.
    (k) A statement of all lands, interests in lands, options, or 
pending bids on interests you held or made for lands contiguous to the 
area described in the permit application. If you request, we will hold 
as confidential any information required by this paragraph which is not 
on public file under State law as provided under Sec. 773.13(d)(3)(ii) 
of this chapter.
    (l) After we notify you that we have approved your application, but 
before the permit is issued, you must, as applicable, update, correct, 
or indicate that no change has occurred in the information previously 
submitted under paragraphs (a) through (k) of this section.
    (m) Before approval, the persons that will engage in or carry out 
surface coal mining operations as owners or controllers of the proposed 
operation (e.g., those persons identified under paragraph (c) of this 
section) must certify that they have the ability to control and that 
they are under the jurisdiction of the Secretary for the purposes of 
compliance with the terms and conditions of the permit and the 
requirements of the regulatory program.
    (n) You must submit the information required by this section and 
Sec. 778.14 in the format that we prescribe.
    (o) If you have previously applied for permits and the data 
required under this section is in AVS, you may certify to us that the 
information in AVS is complete, accurate, and up to date. Or, if only 
some of the information is different, tell us what to change.
    (p) We may establish a central file to house your legal identity 
information, rather than place duplicate information in each of your 
permit application files.
    26. Revise Sec. 778.14 to read as follows:


Sec. 778.14  Violation information.

    You, the applicant, must include the following information in your 
permit application:
    (a) A statement of whether you or any subsidiary, affiliate, or 
persons controlled by or under common control with you has:
    (1) Had a Federal or State coal mining permit suspended or revoked 
in the five years preceding the date of submission of the application; 
or
    (2) Forfeited a performance bond or similar security deposited in 
lieu of bond.
    (b) A brief explanation of the facts involved if any suspension, 
revocation, or forfeiture referred to in paragraphs (a)(1) and (a)(2) 
of this section has occurred, including:
    (1) Identification number and date of issuance of the permit, and 
the date and amount of bond or similar security;
    (2) Identification of the authority that suspended or revoked the 
permit or forfeited the bond and the stated reasons for the action;
    (3) The current status of the permit, bond, or similar security 
involved;
    (4) The date, location, and type of any administrative or judicial 
proceedings initiated concerning the suspension, revocation, or 
forfeiture; and
    (5) The current status of the proceedings.
    (c) A list of all violation notices you received during the three-
year period preceding the application date, and a list of all 
outstanding violation notices you received before the date of the 
application for any surface coal mining operation you owned or 
controlled. For each violation notice reported, you must include the 
following information, as applicable:
    (1) Any identifying numbers for the operation, including the 
Federal or State permit number and MSHA number, the issue date of the 
violation notice, the name of the person to whom the violation notice 
was issued, and the name of the issuing regulatory authority, 
department or agency;
    (2) A brief description of the violation alleged in the notice;
    (3) The date, location, and type of any administrative or judicial 
proceedings initiated concerning the violation, including, but not 
limited to, proceedings initiated by any person identified in paragraph 
(c) of this section to obtain administrative or judicial review of the 
violation;
    (4) The current status of the proceedings and of the violation 
notice; and
    (5) The actions, if any, taken by any person identified in 
paragraph (c) of this section to abate the violation.
    (d) After we notify you that we have approved your application, but 
before we issue the permit, you must, as applicable, update, correct, 
or indicate that no change has occurred in the information previously 
submitted under this section.

PART 842--FEDERAL INSPECTIONS AND MONITORING

    27. Revise the authority citation for part 842 to read as follows:

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

    28. In Sec. 842.11, revise paragraph (e)(3)(i) to read as follows:


Sec. 842.11  Federal inspections and monitoring.

* * * * *
    (e) * * *
    (3) * * *
    (i) Is taking action to ensure that the permittee and operator will 
be precluded from receiving future permits

[[Page 70625]]

while violations continue at the site; and
* * * * *

PART 843--FEDERAL ENFORCEMENT

    29. Revise the authority citation for part 843 to read as follows:

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


Sec. 843.5  [Removed]

    30. Remove Sec. 843.5.
    31. In Sec. 843.11, revise paragraph (g) to read as follows:


Sec. 843.11  Cessation orders.

* * * * *
    (g) Within 60 days after issuing a cessation order, OSM will notify 
in writing any person who has been identified under Secs. 773.17(h) and 
778.13(c) of this chapter as an owner or controller of the operation 
that the cessation order was issued.


Sec. 843.13  [Removed]

    32. Remove Sec. 843.13.
    33. Revise Sec. 843.21 to read as follows:


Sec. 843.21  Procedures for improvidently issued State permits.

    (a) Initial notice. If OSM believes that a State surface coal 
mining and reclamation permit meets the criteria for an improvidently 
issued permit in Sec. 773.20(b) of this chapter, or the State program 
equivalent, and the State failed to take appropriate action on the 
permit under State program equivalents of Secs. 773.20 and 773.21, OSM 
will issue to the State and the permittee an initial notice stating in 
writing the reasons for that belief.
    (b) State response. Within 30 days of the date that OSM notifies 
the State under paragraph (a) of this section, the State must 
demonstrate to OSM in writing that either:
    (1) The permit does not meet the criteria of Sec. 773.20(b) of this 
chapter or the State program equivalent; or
    (2) The State is in compliance with the State program equivalents 
of Secs. 773.20 and 773.21.
    (c) Ten-day notice. If OSM finds that the State has failed to make 
the demonstration required by paragraph (b) of this section, OSM will 
issue to the State a 10-day notice stating in writing the reasons for 
that finding and requesting that within 10 days the State take 
appropriate action under the State program equivalents of Secs. 773.20 
and 773.21 of this chapter.
    (d) Federal enforcement. (1) OSM will take appropriate remedial 
action after 10 days from the date OSM issues a 10-day notice under 
paragraph (c) of this section, if OSM finds that the State has failed 
to:
    (i) Take appropriate action under the State program equivalents of 
Secs. 773.20 and 773.21 of this chapter; or
    (ii) Show good cause for not taking action under State program 
equivalents of Secs. 773.20 and 773.21.
    (2) Remedial action may include issuing to the permittee or the 
operator a notice of violation requiring that by a specified date:
    (i) All mining operations must cease; and
    (ii) Reclamation of all areas for which a reclamation obligation 
exists must commence or continue.
    (3) OSM will not take remedial action if:
    (i) Any violation, penalty, or fee on which the notice of violation 
was based is abated or paid;
    (ii) An abatement plan or payment schedule is entered into;
    (iii) All inaccurate or incomplete information questions are 
resolved; or
    (iv) The permittee and the operator, and all operations owned or 
controlled by the permittee and the operator, are no longer responsible 
for the violation, penalty, fee, or information.
    (4) Under this paragraph, good cause does not include the absence 
of State program equivalents of Secs. 773.20 and 773.21.
    (e) Remedies to notice of violation. Upon receipt from any person 
of information concerning the issuance of a notice of violation under 
paragraph (d) of this section, OSM will review the information and:
    (1) Vacate the notice of violation if it resulted from an erroneous 
conclusion under this section or ownership and control has been 
refuted; or
    (2) Terminate the notice of violation if:
    (i) All violations have been abated, all penalties or fees have 
been paid, and all informational questions have been resolved;
    (ii) You, or any operation owned or controlled by you, have filed 
and are pursuing a good faith appeal of the violation, penalty, fee, or 
information request, or have entered into and are complying with an 
abatement plan or payment schedule to the satisfaction of the 
responsible agency; or
    (iii) You, and all operations owned or controlled by you, are no 
longer responsible for the violation, penalty, fee, or requested 
information.
    (f) No civil penalty. OSM will not assess a civil penalty for a 
notice of violation issued under this section.


Sec. 843.24  [Removed]

    34. Remove Sec. 843.24.
    35. Revise part 846 to read as follows:

PART 846--ALTERNATIVE ENFORCEMENT

Sec.
846.1  Scope.
846.5  Definitions.
846.11  Criminal penalties.
846.12  Individual civil penalties.
846.14  Suspension or revocation of permits: Pattern of violations.
846.15  Suspension or revocation of permits: Failure to comply with 
a permit condition.
846.16  Civil actions for relief.

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


Sec. 846.1  Scope.

    This part governs the use of measures provided for in the Act at 
sections 201(c)(1), 510(c), 518(e), 518(f), 518(g), 521(a)(4), and 
521(c), that we collectively call ``alternative enforcement'' measures 
or actions that we may use to compel compliance with any provision of 
the Act. These measures are available to us whenever any person 
engaging in or carrying out surface coal mining operations has allowed 
a violation notice to remain outstanding and has thus failed to comply 
with the provisions of the Act and its implementing regulations. 
Whenever we make a determination, finding, or conviction under these 
provisions, we will designate the person determined, found, or 
convicted in the AVS.


Sec. 846.5  Definitions.

    Unwarranted failure to comply means the failure of a permittee, 
operator, agent, or owner or controller of a permittee or operator--
    (1) To prevent the occurrence of any violation of his or her permit 
or any requirement of the Act or regulations due to indifference, lack 
of diligence, or lack of reasonable care, or
    (2) To abate any violation of such permit or any requirement of the 
Act or regulations due to indifference, lack of diligence, or lack of 
reasonable care.
    Violation, failure, or refusal means--
    (1) A violation of a condition of a permit issued under a Federal 
program, a Federal lands program, Federal enforcement under section 502 
of the Act, or Federal enforcement of a State program under section 521 
of the Act; or
    (2) A failure or refusal to comply with any order issued under 
section 521 of the Act, or any order incorporated in a final decision 
issued by the Secretary under the Act, except an order incorporated in 
a decision issued under sections 518(b) or 703 of the Act.

[[Page 70626]]

Sec. 846.11  Criminal penalties.

    (a) We may pursue criminal sanctions against any person who 
willfully and knowingly:
    (1) Violates a condition of a permit, or
    (2) Fails or refuses to comply with:
    (i) Any order issued under section 521 or 526 of the Act; or
    (ii) Any order incorporated into a final decision issued by the 
Secretary.
    (3) Makes any false statement, representation, or certification, or 
fails to make any statement, representation, or certification in any 
application, record, report, plan, or other document filed or required 
to be maintained under the regulatory program or any order or decision 
issued by the Secretary under the Act.
    (b) We may pursue criminal sanctions against a permittee, operator, 
or any owner, controller, principal, or agent of the permittee or 
operator if the violation, failure, or refusal under paragraph (a) of 
this section remains uncorrected for more than 30 days after--
    (1) Suspension or revocation of a permit under Sec. 846.14; or
    (2) Issuance of a violation notice to an unpermitted operation.
    (c) Any person convicted under this section may be subject to 
punishment by a fine of not more than $10,000 or imprisonment of not 
more than one year, or both.


Sec. 846.12  Individual civil penalties.

    (a) When an individual civil penalty may be assessed. (1) Except as 
provided in paragraph (a)(2) of this section, we may assess an 
individual civil penalty against any corporate director, officer, or 
agent of a corporate permittee or operator who knowingly and willfully 
authorized, ordered, or carried out a violation, failure, or refusal.
    (2) We will not assess an individual civil penalty in situations 
resulting from a permit violation by a corporate permittee until we 
issue a cessation order to the corporate permittee for the violation, 
and the cessation order has remained unabated for 30 days.
    (b) Amount of individual civil penalty. (1) In determining the 
amount of an individual civil penalty assessed under paragraph (a) of 
this section, we will consider the criteria in section 518(a) of the 
Act, including:
    (i) The individual's history of authorizing, ordering or carrying 
out previous violations, failures or refusals at the particular surface 
coal mining operation;
    (ii) The seriousness of the violation, failure or refusal (as 
indicated by the extent of damage and/or the cost of reclamation), 
including any irreparable harm to the environment and any hazard to the 
health and safety of the public; and
    (iii) The demonstrated good faith of the individual charged in 
attempting to achieve rapid compliance after notification of the 
violation, failure, or refusal.
    (2) The penalty will not exceed $5,000 for each violation. We may 
assess a separate individual civil penalty for each day the violation, 
failure, or refusal continues, from the date of service of the 
underlying notice of violation, cessation order, or other order 
incorporated in a final decision issued by the Secretary, until 
abatement or compliance is achieved.
    (c) Procedure for assessment of individual civil penalty. (1) 
Notice. We will serve on each individual to be assessed an individual 
civil penalty a notice of proposed individual civil penalty assessment, 
including a narrative explanation of the reasons for the penalty, the 
amount to be assessed, and a copy of any underlying notice of violation 
and cessation order.
    (2) Final order and opportunity for review. The notice of proposed 
individual civil penalty assessment becomes a final order of the 
Secretary 30 days after service upon the individual unless:
    (i) The individual files within 30 days of service of the notice of 
proposed individual civil penalty assessment a petition for review with 
the Hearings Division, Office of Hearings and Appeals, U.S. Department 
of the Interior, 4015 Wilson Boulevard, Arlington, Virginia 22203 
(Phone: 703-235-3800), in accordance with 43 CFR 4.1300 through 4.1309; 
or
    (ii) We and the individual or responsible corporate permittee agree 
within 30 days of service of the notice of proposed individual civil 
penalty assessment to a schedule or plan for the abatement or 
correction of the violation, failure or refusal.
    (3) Service. For purposes of this section, service must be 
performed on the individual to be assessed an individual civil penalty 
by certified mail, or by any alternative means consistent with the 
rules governing service of a summons or complaint under Rule 4 of the 
Federal Rules of Civil Procedure. Service is complete upon tender of 
the notice of proposed assessment and included information or of the 
certified mail and is not incomplete because of refusal to accept.
    (d) Payment of penalty. (1) No abatement or appeal. If a notice of 
proposed individual civil penalty becomes a final order in the absence 
of a petition for review or abatement agreement, the penalty is due 
upon issuance of the final order.
    (2) Appeal. If an individual named in the notice of proposed 
individual civil penalty assessment files a petition for review in 
accordance with 43 CFR 4.1300 through 4.1309, the penalty is due upon 
issuance of a final administrative order affirming, increasing or 
decreasing the proposed penalty.
    (3) Abatement agreement. Where we and the corporate permittee or 
individual have agreed in writing on a plan for the abatement of, or 
compliance with, the unabated order, an individual named in a notice of 
proposed individual civil penalty assessment may postpone payment until 
receiving either a final order from us stating that the penalty is due 
on the date of the final order, or written notice that abatement or 
compliance is satisfactory and the penalty has been withdrawn.
    (4) Delinquent payment. Any delinquent penalty is subject to 
interest beginning 30 days after the final order assessing a civil 
penalty is issued.
    (i) Interest will be charged at the rate established quarterly by 
the U.S. Department of the Treasury for use in applying late charges on 
late payments to the Federal government, under Treasury Financial 
Manual 6-8020.20. The Treasury current value of funds rate is published 
by the Fiscal Service in the notices section of the Federal Register.
    (ii) Interest on unpaid penalties will run from the date payment 
first was due until the date of payment.
    (iii) Failure to pay overdue penalties may result in one or more of 
the actions specified in Secs. 870.15(e)(1) through (e)(5) of this 
chapter.
    (iv) Delinquent penalties are subject to late payment penalties 
specified in Sec. 870.15(f) and processing and handling charges in 
Sec. 870.15(g).


Sec. 846.14  Suspension or revocation of permits: Pattern of 
violations.

    (a) Issuing an order. (1) We will issue an order to you, requiring 
you to show cause why your permit and right to mine under the Act 
should not be suspended or revoked, if we determine that:
    (i) A pattern of violations of any requirements of the Act, this 
chapter, the applicable program, or any permit condition required by 
the Act exists or has existed; and
    (ii) The violations were caused by you willfully or through 
unwarranted failure to comply with those requirements or conditions.
    (2) We will attribute to you violations by any person conducting 
surface coal mining operations on your behalf,

[[Page 70627]]

unless you establish that the violations were:
    (i) Acts of deliberate sabotage or in direct contravention of your 
expressed orders, or
    (ii) Willful and knowing violations of a contract provision which 
you actively tried to prevent.
    (3) If we determine that a pattern of violations exists, we will 
promptly file a copy of any order to show cause with the Office of 
Hearings and Appeals.
    (4) We may determine that a pattern of violations exists or has 
existed after considering the circumstances, including:
    (i) The number of violations, cited on more than one occasion, of 
the same or related requirements of the Act, this chapter, the 
applicable program, or the permit;
    (ii) The number of violations, cited on more than one occasion, of 
different requirements of the Act, this chapter, the applicable 
program, or the permit; and
    (iii) The extent to which the violations were isolated departures 
from lawful conduct.
    (5) We will promptly review your history of violations or the 
history of violations of an operator who has been cited for violations 
of the same or related requirements of the Act, this chapter, the 
applicable program, or the permit. If we determine that a pattern of 
violations exists or has existed, we will issue an order to show cause 
as provided in paragraph (a)(1) of this section.
    (6) In determining whether a pattern exists or has existed, we will 
consider only violations issued as a result of:
    (i) Enforcement of the provisions of Title IV of the Act, or a 
Federal program or a Federal lands program under Title V;
    (ii) Federal inspection during the interim program and before the 
applicable State program was approved under sections 502 or 504 of the 
Act; or (iii) Federal enforcement of a State program in accordance with 
sections 504(b) or 521(b) of the Act.
    (b) Hearing and order. (1) If you file an answer to the show cause 
order and request a hearing under 43 CFR 4.1190 through 4.1196, a 
public hearing will be held as set forth in those sections.
    (2) Within the time limits in 43 CFR 4.1190 through 4.1196, the 
Office of Hearings and Appeals will issue a written determination as to 
whether a pattern of violations exists and, if appropriate, an order. 
If the Office of Hearings and Appeals revokes or suspends the permit 
and your right to mine under the Act, you must immediately cease 
surface coal mining operations on the permit.
    (i) If the permit and the right to mine under the Act are revoked, 
you must complete reclamation within the time specified in the order.
    (ii) If the permit and the right to mine under the Act are 
suspended, you must complete all affirmative obligations to abate all 
conditions, practices, or violations as specified in the order.
    (c) Review of violations. Whenever you fail to abate a violation 
contained in a notice of violation or cessation order within the 
prescribed abatement period, we will review your history of violations 
to determine whether a pattern of violations exists under this section, 
and will issue an order to show cause as appropriate.
    (d) Service of show cause orders. For purposes of this section and 
Sec. 846.15, we must serve you and/or the operator, or owner, 
controller, principal, or agent of the permittee or operator by 
certified mail, or by any alternative means consistent with the rules 
governing service of a summons or complaint under Rule 4 of the Federal 
Rules of Civil Procedure. Service is complete upon delivery of the 
order or of the certified mail and is not considered incomplete because 
of a person's refusal to accept.


Sec. 846.15  Suspension or revocation of permits: Failure to comply 
with a permit condition.

    (a) General. If we find that you, or your operator, or any owner, 
controller, principal, or agent of you or your operator, have failed to 
comply with any condition imposed on an approved permit, then we may 
order you to show cause why we should not suspend or revoke the permit.
    (b) Additional permit conditions. We will order you to show cause 
why the permit should not be suspended or revoked if:
    (1) You have less than 5 years experience, or have controllers 
without demonstrated successful environmental compliance; and
    (2) We find that you have failed to comply with additional permit 
conditions imposed on an approved permit under Sec. 773.18(a) of this 
chapter, and find you are unable or unwilling to comply with the mining 
and reclamation plan.
    (c) Hearing and order. (1) If you file an answer to the show cause 
order and request a hearing under 43 CFR part 4, subpart L, then a 
public hearing may be provided as set forth in that subpart.
    (2) If the Office of Hearings and Appeals revokes the permit, then 
you must immediately cease surface coal mining operations on the permit 
and complete reclamation within the time specified in the order.
    (3) If the Office of Hearings and Appeals suspends the permit, then 
you must abate all conditions, practices, or violations as specified in 
the order.
    (4) If your right to engage in or carry out surface coal mining 
operations is suspended or revoked, then you are prohibited from 
owning, controlling, or serving as a principal or agent for any surface 
coal mining operations as specified in the order.
    (d) Service. The provisions for service set out in Sec. 846.14 
govern service under this section.


Sec. 846.16  Civil actions for relief.

    (a) Under section 521(c) of the Act, we will request the Attorney 
General to institute civil action for relief whenever you or your 
operator, or any owner, controller, principal, or agent of you or your 
operator are found to have met the criteria in this section.
    (1) We will request action under this section whenever you or your 
operator, or any owner, controller, principal, or agent of you or your 
operator are found to have--
    (i) Violated or failed or refused to comply with any order or 
decision issued by OSM or the State regulatory authority with 
jurisdiction under the Act; or
    (ii) Interfered with, hindered, or delayed the agency with 
jurisdiction in carrying out the provisions of the Act or its 
implementing regulations; or
    (iii) Refused to admit our authorized representative onto the mine; 
or
    (iv) Refused to allow inspection of the mine by our authorized 
representative; or
    (v) Refused to furnish any information or report that we have 
requested; or
    (vi) Refused to allow access to, and copying of, such records as we 
determine necessary to carry out the provisions of the Act and its 
implementing regulations.
    (2) Civil action for relief includes a permanent or temporary 
injunction, restraining order, or any other appropriate order in the 
district court of the United States for the district in which the 
surface coal mining operation is located or in which you have your 
principal office.
    (b) Temporary restraining orders will be issued in accordance with 
Rule 65 of the Federal Rules of Civil Procedure, as amended.
    (c) Any relief the court grants to enforce an order under paragraph 
(a)(1)(i) of this section will continue in effect until completion or 
final termination of all proceedings for

[[Page 70628]]

review of such order under the Act or its implementing regulations 
unless, beforehand, the district court granting such relief sets aside 
or modifies the order.

[FR Doc. 98-33620 Filed 12-18-98; 8:45 am]
BILLING CODE 4310-05-P