[Federal Register Volume 64, Number 29 (Friday, February 12, 1999)]
[Rules and Regulations]
[Pages 7470-7483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3556]



[[Page 7469]]

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Part XI





Department of the Interior





_______________________________________________________________________



Office of Surface Mining Reclamation and Enforcement



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30 CFR Parts 707 and 874



Abandoned Mine Land (AML) Reclamation Program; Enhancing AML 
Reclamation; Final Rule

  Federal Register / Vol. 64, No. 29 / Friday, February 12, 1999 / 
Rules and Regulations  

[[Page 7470]]



DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 707 and 874

RIN: 1029-AB89


Abandoned Mine Land (AML) Reclamation Program; Enhancing AML 
Reclamation

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Surface Mining Reclamation and Enforcement (OSM) 
is amending its rules concerning the financing of Abandoned Mine Land 
reclamation (AML) projects that involve the incidental extraction of 
coal. Projections of receipts to the AML fund through the year 2004, 
when the authority to collect fees will expire, strongly indicate that 
there will be insufficient money to address all problems currently 
listed in the Abandoned Mine Land Inventory System. Given these limited 
AML reclamation resources, OSM is establishing an innovative way for 
AML agencies, working with contractors, to maximize available funds to 
increase AML reclamation.
    The first revision amends the definition of ``government-financed 
construction'' to allow less than 50 percent government funding when 
the construction is an approved AML project under the Surface Mining 
Control and Reclamation Act of 1977 (SMCRA or ``the Act''). The second 
revision adds a new section which requires specific consultations and 
concurrences with the Title V regulatory authority for AML construction 
projects receiving less than 50 percent government financing. These 
consultations and concurrences are intended to ensure the 
appropriateness of the project being undertaken as a Title IV AML 
project and not under the Title V regulatory program.

DATES: Effective March 15, 1999.

FOR FURTHER INFORMATION CONTACT: D. J. Growitz, Office of Surface 
Mining Reclamation and Enforcement, U.S. Department of the Interior, 
1951 Constitution Avenue, NW, Washington, D.C. 20240; Telephone: 202-
208-2634. E-Mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    A. What is the Abandoned Mine Land (AML) reclamation program?
    B. How is AML reclamation funded and how do States and Indian 
Tribes implement their programs?
    C. What types of abandoned sites does this rule target?
    D. How will the final rule work?
    E. What is the relationship between the AML agency and the AML 
contractor?
    F. What is an example of how the final rule will reduce the 
government's share of reclamation costs under Title IV?
    G. Can private organizations (e.g., watershed groups) assist in 
AML reclamation efforts?
    H. Will the final rule adversely affect AML reclamation at some 
sites?
    I. How will an AML agency approve reclamation projects under the 
final rule?
    J. What will be the consequence of AML contractors removing coal 
outside the limits authorized by the AML project?
    K. The proposed rulemaking.

II. Response to Comments and Final Rule

    A. What is the statutory authority for the final rule?
    B. What is the amended definition of ``government-financed 
construction'' at section 707.5?
    C. What is the change in information collection for section 
707.10?
    D. What are the information collection requirements for section 
874.10?
    E. What is the purpose behind new section 874.17: ``AML agency 
procedures for reclamation projects receiving less than 50 percent 
government funding?'
    F. How will the consultation in section 874.17(a) work?
    G. What types of concurrences between the AML agency and the 
regulatory authority will be required in section 874.17(b)?
    H. Under section 874.17(c), how will the AML agency document the 
results of the consultation and the concurrences with the Title V 
regulatory authority?
    I. What special requirements will apply for qualifying section 
874.17(d) reclamation projects?
    J. What must the contractor do under final section 874.17(e) if 
extracting coal beyond the limits of the incidental coal specified 
in section 874.17(b)?
    K. How does this rulemaking relate to the established AML 
priority system for selecting projects?
    L. Is this rulemaking really more about remining than AML 
reclamation?
    M. Other comments.

III. Procedural Determinations

I. Background

A. What is the Abandoned Mine Land (AML) Reclamation Program?

    Title IV of SMCRA established the AML Reclamation Program in 
response to concern about extensive environmental damage caused by past 
coal mining activities. The program is funded primarily from a fee 
collected on each ton of coal mined in the country. This fee is 
deposited into a special fund, the Abandoned Mine Land Fund (Fund), and 
is appropriated annually to address abandoned and inadequately 
reclaimed mining areas where there is no continuing reclamation 
responsibility by any person under State or Federal law. Under Title 
IV, the funding of reclamation projects is subject to a priority 
schedule with emphasis on sites affecting public health, safety, 
general welfare and property. In contrast, Title V establishes a 
program for regulating active mining and reclamation.
    In most cases, the implementation of both Title IV and Title V 
authority has been delegated to States. Depending upon each State's 
internal organizational structure, the Title IV and Title V programs 
are, in many cases, carried out by separate State authorities. 
Currently, 23 States and 3 Indian Tribes (the Hopi, the Navajo and the 
Crow) have authority to receive grants from the Fund and are 
implementing Title IV reclamation programs in accordance with 30 CFR 
Subchapter R, and through implementing guidelines published in the 
Federal Register on March 6, 1980 (45 FR 27123), and revised on 
December 30, 1996 (45 FR 68777). In States and on Indian lands that do 
not have a Title IV program, reclamation is carried out by OSM.

B. How is AML Reclamation Funded and How Do States and Indian Tribes 
Implement Their Programs?

    State and Indian Tribal AML programs are funded at 100 percent by 
OSM from money appropriated annually from the AML Fund. The States and 
Indian Tribes must submit grant applications in accordance with 
procedures established by OSM and existing grant regulations found at 
30 CFR 886. They must certify with each grant that the requirements of 
all applicable laws and regulations are met, including the Clean Water 
Act, the Clean Air Act, the National Historic Preservation Act, and the 
Endangered Species Act. They may undertake only projects that are 
eligible for funding as described in either Section 404 or Section 411 
of SMCRA and which meet the priorities established in Section 403 of 
SMCRA. OSM requires that the State Attorney General or other chief 
legal officer certify that each reclamation project to be undertaken is 
an eligible site.
    Certain environmental, fiscal, administrative and legal 
requirements must be in place in order for a program to receive grants 
for reclamation. An extensive description of these requirements can be 
found at 30 CFR 884, but certain of those are mentioned here to 
highlight safeguards the AML program has in place. For example, the 
agency must have written policies and procedures which outline how it 
will comply with the requirements of

[[Page 7471]]

SMCRA and implementing regulations in conducting a reclamation program, 
how it will comply with all applicable Federal and State laws and 
regulations, how projects will be ranked for reclamation priority and 
how the public will be given an opportunity to comment on proposed 
reclamation projects. The State or Indian Tribe chooses individual 
projects based upon the selection criteria in its reclamation program. 
While these criteria differ among AML programs, all consider the 
priority of the problem, public opinion regarding the project, cost 
effectiveness, technical feasibility and how the area will be used once 
reclaimed.
    State and Tribal programs seek public input in several ways. For 
example, some AML programs require that a notice requesting comments on 
proposed reclamation be published in newspapers of general circulation 
in the area to be reclaimed. Some publish newspaper notices asking the 
public to identify potential reclamation sites. Others have public 
meetings to discuss upcoming reclamation or to identify potential 
sites. Still other programs seek public input about reclamation 
activities or potential sites through Federal Register notices.
    OSM does not approve individual projects. However, before 
construction begins on any project, OSM must ensure that all 
requirements of the National Environmental Policy Act of 1969 are met 
before providing authorization to proceed on the project.
    OSM annually reviews the State and Tribal AML programs to ensure 
that all program requirements are properly met, including site 
eligibility, proper financial policies and procedures, and reclamation 
accomplishments. State and Tribal agencies and OSM also review 
completed projects to determine the success of AML reclamation. 
Completed projects may be revisited as part of a site-specific 
contract, as part of an annual post-construction evaluation, or as 
otherwise specified under the State or Tribal AML reclamation program's 
maintenance plan. Further, AML reclamation programs evaluate selected, 
completed AML reclamation projects to determine how effective the 
overall reclamation program has been. Normally, these evaluations are 
annual, random samples of many types of reclamation, such as reclaimed 
subsidence areas, eliminated landslides, sealed openings and removed 
refuse piles.

C. What Types of Abandoned Sites Does This Rule Target?

    The rule is intended to facilitate the reclamation of certain 
abandoned mine lands that have little likelihood of otherwise being 
reclaimed under either the current Title IV or Title V programs. These 
sites would not likely be reclaimed under the Title IV program because 
of severely limited funds; nor would they likely be mined under the 
Title V regulatory program due to the marginal coal reserves they 
contain and/or the potential risk for long-term liability associated 
with existing acid mine drainage (AMD) or other environmental problems.
    According to estimates in the Abandoned Mine Land Inventory System, 
the most serious AML problems--those identified as Priority 1 or 
Priority 2 sites in the System--would cost more than 2.6 billion 
dollars to reclaim. These include highwalls, open shafts and accessible 
underground mines presenting a danger to human health, safety and 
welfare.
    Thousands of other AML-eligible sites--Priority 3 sites that do not 
pose the same degree of danger to the public but that do adversely 
affect the environment--would cost tens of billions more dollars to 
correct. Without an innovative way to finance more reclamation, there 
is very little likelihood that enough AML money would ever be available 
to fund the reclamation of even the most serious of these eligible 
sites, let alone the eligible sites with primarily environmental 
impacts. Without adequate funding, exposed coal seams and subsided 
underground workings would continue to contribute acid mine drainage 
(AMD) and other environmental problems, often far beyond their realty 
boundaries. Interconnected abandoned mine passageways flooded with poor 
quality water would continue to discharge the characteristic ``yellow-
boy'' iron precipitates and low pH waters into streams. Coal refuse 
piles would continue to yield excessive sediment and acid discharges 
into local water supplies killing fish, endangering wildlife and 
rendering streams useless for recreation.
    The challenge which OSM attempts to address with this rule is how 
to accomplish reclamation at mines that the AML fund cannot afford to 
reclaim and that the private sector is not interested in remining. The 
answer for these sites lies in increasing the amount of reclamation 
without increasing the cost to the AML Fund.

D. How Will the Final Rule Work?

    The current rules at 30 CFR 707.1 and 707.5 provide for a Title V 
exemption for the extraction of coal which is an incidental part of a 
government-financed construction. ``Government-financed construction'' 
requires that the project be funded 50 percent or more by funds 
appropriated from the government financing agency's budget or obtained 
from general revenue bonds. AML guidelines first published in the 
Federal Register on March 6, 1980 (45 FR 14810) and later amended on 
December 30, 1996 (61 FR 68777) provide for the sale of coal recovered 
incidental to an approved AML reclamation project. The 50 percent 
government-financing requirement of section 707.5 has not affected 
agency selection of AML construction projects where the anticipated 
proceeds from the sale of incidental coal were expected to be a small 
percentage of the total project cost. However, in cases where the 
anticipated proceeds from the sale of incidental coal were expected to 
be 50 percent or greater of the total project cost--a level that would 
have reduced the government contribution below the required 50 percent 
floor--this funding requirement discouraged AML reclamation.
    For sites with substantial deposits of incidental coal, we expect 
that AML contractors will reflect the anticipated sale of such coal 
through a lowered project bid price. The lowered project bid price 
would, in turn, reduce the government's share of the total cost of the 
project. As a result, less public funding will be required for these 
sites to accomplish the same level of AML reclamation. By reducing the 
government's share of the cost of reclamation, AML money becomes 
available for other AML reclamation projects that would otherwise not 
be funded. Under this new rule, the contractor makes a profit, the 
government saves money and--most important of all--additional abandoned 
sites that we could not afford to reclaim in the past are reclaimed.
    The key limitation in the application of this rule is that the coal 
removed and sold must be ``incidental'' to the reclamation project--
physically necessary to remove in order to address the identified 
health, safety or environmental problem of the approved AML 
construction project. This concept conforms to existing regulations at 
30 CFR 707.5. Coal extracted beyond that which is determined to be 
incidental will be subject to Title V permitting provisions.
    This rule is not designed to address sites involving redisturbance 
and subsequent reclamation of abandoned mine lands, such as highwalls 
and outslopes that have become environmentally stable over the years 
and no longer pose problems. Rather, we hope to target long-standing 
AML

[[Page 7472]]

health, safety and environmental problems by the partial or complete 
removal of coal during AML reclamation projects. Such projects have the 
potential to remediate subsidence, to reduce the likelihood of 
perpetual acid discharge problems that are costly to treat through 
conventional chemical means, and, in some cases, to permanently 
eliminate AMD by removing the source of the problem.
    This final rule will not alter existing AML program requirements. 
The eligibility for AML projects, the procurement systems which States 
and Indian Tribes use to contract for AML reclamation, and all Federal 
and State requirements that pertain to AML projects will remain the 
same. Undertaking AML projects that use less than 50 percent 
government-financing will not be mandatory for States or Indian Tribes; 
they may choose not to participate in this aspect of AML reclamation. 
However, State and tribal programs that do participate will be 
responsible to ensure that the provisions of this rule are applied 
appropriately and not abused.

E. What is the Relationship Between the AML Agency and the AML 
Contractor?

    The relationship between the AML agency and the AML contractor 
under the final rule will be the same as for any approved reclamation 
project. Actual reclamation is usually done under a site-specific 
contract between the reclamation agency and third-party contractors. 
These contracts clearly outline the scope of work for each project, the 
cost, the time frames involved, how the contractor will be paid and 
penalties for failure to meet the contractual obligations by either 
party. The content of the contracts, along with bidding and selection 
procedures, performance bonding requirements and other contractual 
matters are established within each program in accordance with State or 
Tribal laws. The AML agency ensures that the contractor complies with 
applicable procedures through site visits and other monitoring 
techniques. If the contractor does not meet the terms of the contract, 
the AML agency invokes the penalties contained in the contract and 
allowed by law.
    Each contract sets forth any unique features for the project to be 
reclaimed and any site-specific criteria for that project. For example, 
a project to address water quality problems will outline the acceptable 
pH or sediment levels for the water or sediment, the monitoring period 
associated with the treatment, whether wetlands will be created, any 
projected effects on wildlife and any particular environmental impacts 
at the site or on adjacent properties. Sediment and water quality 
control plans must provide for adequate environmental protection during 
the construction phase of the reclamation project as well as after its 
completion.
    When contracts are written, the AML reclamation agency can require 
that a project pass specific requirements after reclamation. For 
example, a contract could specify that a retaining wall provide 
protection for a highway for a three-year period. The contract could 
also specify that, should the retaining wall fail, the contractor must 
return to repair the damage. The frequency and extent of follow-up by 
the AML reclamation agency is written into the contract. AML contracts 
also identify the incidental coal that can be extracted under the 
project.

F. What Is an Example of How the Final Rule Will Reduce the 
Government's Share of Reclamation Costs Under Title IV?

    The following example illustrates the process by which extraction 
of incidental coal under this rule can reduce the cost to the 
government for Title IV reclamation at an AML eligible site.

    Example: After the requisite consultation and concurrences with 
the Title V regulatory authority (see response to question E. in 
Section I of this preamble: ``What is the relationship between the 
AML agency and the AML contractor?''), the AML agency announces a 
contract solicitation to receive bids for the reclamation of a 
refuse pile contributing sediment and acid mine drainage to local 
streams. Prior to the solicitation, the AML agency estimates the 
total cost of reclaiming the refuse pile (removing it to another 
site, burying it, and revegetating both sites) at $500,000. This 
figure includes a $50,000 allowance for administrative expenses such 
as project design and project monitoring.
    Based on existing chemical analysis of the refuse pile, 
including BTU information, AML estimates place the net proceeds of 
the incidental coal in the refuse pile (after transportation, 
cleaning, royalty costs, etc.) at roughly $400,000. The estimated 
net cost for completing the project would then be $100,000 
($500,000--$400,000). Based on these estimates, project bids from 
contractors would be expected to come in around the $100,000 range.
    Therefore, reclamation of a project that would ordinarily cost 
the AML agency $500,000 without contractor sale of incidental coal, 
or that would cost the agency at least $250,000 under the existing 
rule requiring at least 50 percent government financing, will now 
cost only about $100,000 under this new rule. If the contract is 
awarded, the contractor becomes fully responsible for the completion 
of the work regardless of the contractor's actual proceeds on the 
sale of incidental coal.

G. Can Private Organizations (e.g., Watershed Groups) Assist in AML 
Reclamation Efforts?

    Yes. AML agencies can form partnerships with industry, private 
citizens and other government agencies to help address AML problems. 
Partnerships, such as those developed under the Clean Streams 
Initiative--a partnership of Federal, State and local government as 
well as other public and private interests--can assist in reclaiming 
lands. Outside funds can also be contributed for specific AML projects 
as allowed by law.

H. Will the Final Rule Adversely Affect AML Reclamation at Some Sites?

    No. Under the AML program, the percentage of government funding for 
reclamation of an eligible site does not adversely impact the quality 
of the reclamation of that site. As with any other AML reclamation 
project, under this final rule the AML agency selects individual sites 
from the Abandoned Mine Land Inventory using its priority system. The 
AML agency then develops the reclamation parameters for that site and 
includes them in its reclamation contract. We emphasize that the AML 
agency, not the AML contractor or the owner of the coal, establishes 
these parameters. The AML agency oversees the reclamation and ensures 
that the contractor adheres to the contract requirements, including 
removing and selling only that coal which has been identified as 
incidental.

I. How Will an AML Agency Approve Reclamation Projects Under the Final 
Rule?

    As with any other AML project, reclamation projects involving the 
incidental extraction of coal and reduced government funding levels 
will have to meet the requirements specified in 30 CFR Subchapter R. 
The AML agency controls every project specification from design, to 
bidding, to final reclamation completion. The selection of reclamation 
sites by the AML agency is based on the need to protect the public 
health and safety and/or the environment from the adverse effects of 
past mining activities. A particular site can be selected only after 
the AML agency determines that private industry would be unable or 
unwilling to remine and reclaim the site as a Title V operation, and 
the State Attorney General or other legal officer certifies that the 
project meets the eligibility requirements specified in State or Indian 
Tribe counterparts to Title IV.
    OSM is expressly prescribing certain procedures to ensure that the 
provisions

[[Page 7473]]

of this final rule are implemented appropriately. First, the AML 
agency, in consultation with the Title V regulatory authority, 
determines whether the site is appropriate for AML reclamation 
activities based on the likelihood of extracting the coal under a Title 
V permit. Second, the Title V regulatory authority and the Title IV AML 
agency have to concur on the boundaries of the AML project and on the 
identification of incidental coal--that which is physically necessary 
to remove to accomplish the approved reclamation.

J. What Will be the Consequence of AML Contractors Removing Coal 
Outside the Limits Authorized by the AML Project?

    AML contractors removing coal outside the limits authorized by the 
AML project will be subject to contract remedies as deemed appropriate 
by the AML agency. These can include termination of AML contracts, 
forfeiture of any performance and reclamation bonds, or other remedies 
provided by law for breach of contract. The AML agency will further be 
expected to notify the Title V regulatory authority when any 
unauthorized coal is removed.
    Sometimes there is unintended and extremely limited removal of coal 
beyond that which has been determined to be incidental to the project 
that may not justify termination of the AML contract or bond 
forfeiture. Further, when the amount of unauthorized coal removal is 
less than 250 tons, the operation may be exempt from Title V permitting 
requirements under 30 CFR 700.11(a)(2). We rely on the experience and 
judgment of AML authorities, in consultation with Title V regulatory 
authorities, as appropriate, to determine when a contractor has 
exceeded the allowable limits for removal and sale of coal at an AML 
project. The consequences of removing coal located outside the project 
limits is discussed further at Section II of this preamble in the 
response to question J: ``What must the contractor do under final 
section 874.17(e) if extracting coal beyond the limits of the 
incidental coal specified in section 874.17(b)?''

K. The Proposed Rulemaking

    After substantial public outreach, OSM proposed rules on June 25, 
1998 (63 FR 34768) with a 30-day comment period. The comment period was 
reopened and extended on July 31, 1998 (63 FR 40871) until August 11, 
1998, and reopened and extended again on September 3, 1998 (63 FR 
46951) until September 18, 1998. No public meetings or hearings were 
requested or held. OSM proposed to revise the definition of 
``government-financed construction'' at section 707.5 and add a new 
section 874.17 detailing procedures for AML construction projects 
initiated under the scope of the new definition.
    OSM received comments in response to the proposed rule from 21 
commenters representing industry, State regulatory authorities, Federal 
agencies, and environmental groups. OSM has reviewed each comment 
carefully and has considered the commenters' suggestions and remarks in 
preparing this final rule.

II. Response to Comments and Final Rule

    The great majority of commenters generally supported the proposed 
rule. Twelve commenters supported the proposal in whole or in part. Six 
commented without supporting or opposing the proposed rule. And, three 
objected to the proposed rule. The wide-ranging comment support 
included such reasons as: the rule represents a sensible approach to 
achieving greater AML reclamation at a lower cost; the rule would 
permit greater flexibility needed to address reclamation problems that 
are not being addressed under current rules; the rule would bring to 
bear additional resources to remedy the effects of past mining, 
including the numerous acid mine drainage problems occurring 
nationwide; the rule would provide adequate safeguards, including sound 
environmental protection safeguards, to ensure that it is applied only 
in appropriate circumstances; and the rule would encourage on-the-
ground reclamation improvements at many AML eligible sites that 
otherwise would not occur due to limited AML funding and the absence of 
sufficient incentives to remine and reclaim such sites as Title V 
regulated operations.
    The three commenters objecting to the proposed rule asserted that 
it was an incentive for remining--a process that involves Title V 
regulated coal mining at previously mined sites where the original 
operations left some coal in the ground, on the surface or in coal mine 
waste piles. Our response to this assertion can be found in the answer 
to question L. in Section II of this preamble: ``Is this rulemaking 
really more about remining than AML reclamation?''

A. What is the Statutory Authority for the Final Rule?

    Three sections in SMCRA outline the eligibility requirements for 
sites being considered for funding under the AML program. They are 
sections 404, 402(g)(4)(B)(I), and 402(g)(4)(B)(ii). Section 403 of 
SMCRA establishes priorities for expenditures from the AML Fund on 
eligible sites. An eligible site must then meet one of the five 
priorities of Section 403(a)(1)-(5) in order to be funded.
    Section 413(a) of SMCRA provides the Secretary with the ``power and 
the authority, if not granted it otherwise, to engage in any work and 
to do all things necessary or expedient, including the promulgation of 
rules and regulations, to implement and administer the provisions of 
this [Title IV].'' This final rule change is narrowly limited in its 
application to the AML program and is necessary and expedient for OSM 
and the States and Tribes to more efficiently and effectively carry out 
the reclamation mandate established by Congress. This statutory 
authority allows OSM to propose revisions to the AML program that will 
provide States and Tribes the authority to reduce project costs to the 
maximum extent practical on abandoned mine sites which have deposits of 
coal or coal refuse remaining. Thus, the final rule will allow for more 
program-wide reclamation for the same level of program funding.
    In addition, Congress specifically provided under Section 528(2) 
that SMCRA would not apply to activities involving the ``extraction of 
coal as an incidental part of Federal, State or local government-
financed highway or other construction under regulations established by 
the regulatory authority.'' Thus, Title V permitting requirements do 
not apply to areas from which coal is extracted as an incidental part 
of a government-financed construction operation. Because AML 
reclamation projects are government-financed, they qualify as 
government-financed construction under Section 528(2).
    Each of the three opposing commenters challenged the legal 
authority promulgating this rule. The first stated that the 
congressional intent behind the Section 528(2) exemption was to 
facilitate public works projects, including highway construction, 
rather than projects authorized under Title IV. The second commenter 
did not categorically exclude AML projects from the ambit of the 
Section 528 exemption, but maintained that the elimination of the 50 
percent funding requirement opened the exemption to ``all 
construction'' in contravention to the intent of Congress (citing H.R. 
Rep., No. 95-492, at 112 (1977)). The third commenter stated, without 
support, his conclusion that OSM lacked legal authority for its rule.
    In response to these commenters, OSM notes that the plain language 
of Section 528(2) exempts the ``extraction of coal incidental to * * * 
government-

[[Page 7474]]

financed highway or other construction * * * .'' While the legislative 
history of this exemption does not indicate what ``other [government-
financed] construction'' Congress intended to exempt, the legislative 
history is clear that Congress did not intend to exempt the broad brush 
of private construction, i.e., the ``all construction'' referenced by 
the second commenter. (See proposed rules, 43 FR 14672, September 18, 
1978; citing to H.R. Conf. Rep. No. 95-493, at 112 (1977)). As the 
legislative history of Section 528(2) indicates, Congress patterned the 
exemption in some ways after the Pennsylvania Highway Law and was very 
much concerned with ensuring appropriate government reclamation of 
affected areas. (43 FR 14672, September 18, 1978; citing to H.R. 5988, 
93d Cong. Sec. 203 (1973); 119 Cong. Rec. 1368 (January 18, 1973, 
discussing Sec. 203 of H.R. 5988)).
    Approved AML construction projects are consistent with the 
constituent elements of the Section 528(2) exemption for the extraction 
of coal incidental to government-financed ``other'' construction. These 
AML projects are ``government-financed'' and, from start to finish, 
government-initiated, government-approved, and government-monitored. 
The only coal that can be extracted by these projects is that which is 
incidental to the reclamation of the site and delineated in the AML 
contract. In this regard, AML construction projects are not unlike 
other government-financed construction, such as that of airports and 
schools, for which the ``other construction'' exemption provision of 
Section 528 has been recognized to apply. Even more than in airport and 
school construction, the preeminent reclamation purpose of AML 
construction projects satisfies congressional intent that exempted 
government-financed construction projects address the reclamation 
concerns of affected areas.
    As early as 1980, the Secretary formally recognized the 
applicability of the Section 528(2) exemption to the incidental 
recovery of coal in conjunction with AML projects. (AML Guidelines, 
Item B. 5., 45 FR 14810, March 6, 1980). Therefore, while the 
application of the Section 528(2) exemption to AML construction 
projects may not have been specifically envisioned by Congress twenty 
years ago, such application is reasonable and consistent with what we 
know from the legislative history of Congress' intent to exempt 
``other'' government-financed construction from the provisions of the 
Act.

B. What is the Amended Definition of ``Government-financed 
Construction'' at Section 707.5?

    OSM proposed to amend the definition of ``government-financed 
construction'' in section 707.5 of the permanent program regulations to 
allow less than 50 percent government funding from OSM or other AML 
agencies for construction undertaken as an approved AML reclamation 
project under Title IV of the Act when the reclamation involves the 
incidental extraction of coal. A government agency includes a State or 
Indian Tribe with an approved Title IV program under the definition of 
agency found at 30 CFR 870.5. For those States and Indian Tribes that 
do not have approved Title IV programs, a government agency means OSM 
or its designated State agent.
    AML reclamation projects are funded from several sources, including 
private individuals who donate time and money, environmental groups, 
utilities, industry and the government through the Title IV program. 
Under the previous definition of ``government-financed construction,'' 
the government's financial share of the AML reclamation had to be at 
least 50 percent of the total project cost. By reducing the required 
government share for these AML projects, we anticipate that the final 
rule will free up AML money to do reclamation that otherwise might 
never be accomplished.
    One commenter opposed the provisions of the proposed rule which 
would allow less than 50 percent government funding when the 
construction is an approved AML reclamation project. That commenter 
cited the preamble to the 1978 rule, which originally proposed the 50 
percent funding requirement, to support the claim that the funding 
requirement serves to ``exempt only those projects in which the 
government has a significant government interest.'' (Emphasis added by 
commenter.) (43 FR 41672-3, September 18, 1978). The commenter also 
viewed the funding requirement as fulfilling Congress' intent to limit 
carefully and narrowly the scope of the Section 528(2) exemption.
    However, in the preamble to the 1979 final rule, OSM acknowledged 
that it had considered alternatives to lowering the 50 percent funding 
requirement. In that preamble, OSM stated that little rationale had 
been received in support of a lower percentage and that the only 
example which had been given of a public benefit from such lowering was 
a donated haul road. In that same preamble discussion, OSM indicated 
that it believed there would be few instances in which the 50 percent 
funding requirement would discourage construction that otherwise would 
comply with a lower percentage. (44 FR 14949, March 13, 1979).
    Now, some twenty years later, we fully support eliminating the 50 
percent funding requirement for approved AML projects. Our rationale 
is, to a large degree, based upon the unique governmental character and 
protections associated with approved AML construction projects and the 
substantial public benefit reasonably expected from the reclamation of 
a considerable number of AML sites which would not otherwise be 
reclaimed because of the prior 50 percent standard.
    See the response to question B. in Section II of this preamble for 
a discussion of OSM's statutory authority for eliminating the funding 
requirement for approved AML projects. As amended, the section 707.5 
definition for ``government-financed construction'' will continue to 
narrowly limit the scope of the exemption in a manner which we believe 
is consistent with the congressional intent of Section 528 of SMCRA, 
the overall structure of SMCRA, and its goal of promoting the 
reclamation of previously mined eligible areas.
    Another commenter asked OSM to consider revising the proposed 
definition in section 707.5 in a manner that would recognize that any 
AML project which involves the incidental removal of coal is 
government-funded construction, regardless of funding level and 
technique. The commenter was concerned that in-kind payments such as 
administrative expenses incurred by the AML agency in reviewing and 
approving the project may not qualify as government funding and thus 
preclude projects where there was no direct funding by the AML agency.
    OSM assures the commenter that all expenses incurred directly or 
indirectly by the AML agency, such as project design, project 
solicitation and project management and project oversight qualify as 
government funding under the section 707.5 definition based on long-
standing grants practice in the AML program. In light of this, OSM does 
not believe there is a need to revise the proposed definition. The 
definition of ``government-financed construction'' at section 707.5 is 
adopted as proposed.

C. What Is the Change in Information Collection for Section 707.10?

    OSM is revising section 707.10 which contains the information 
collection requirements for Part 707. The revision changes the prior 
justification for Part

[[Page 7475]]

707's exemption from the requirements of the Paperwork Reduction Act 
(44 U.S.C. 3501 et seq.). The revised basis for this exemption is that 
the information required to be maintained in section 707.12 consists 
only of information that would be provided by persons in the normal 
course of their business activities. No comments were received on 
section 707.10, ``Information collection,'' and it is adopted as 
proposed.

D. What Are the Information Collection Requirements for Section 874.10?

    OSM is adding a section 874.10, which contains the information 
collection requirements for Part 874 and the Office of Management and 
Budget (OMB) clearance number. The addition includes the estimated 
reporting burden per project for complying with the new information 
collection requirements contained in the final rule.
    One commenter suggested that OSM's estimate of 27 hours for the 
burden of the proposed collection of information under the requirements 
of the proposal was too low. The commenter suggested 60 hours was a 
more reasonable estimate and we have accepted this figure in the final 
rule at section 874.10, ``Information collection.''

E. What is the Purpose Behind New Section 874.17: ``AML Agency 
Procedures for Reclamation Projects Receiving Less Than 50 Percent 
Government Funding?''

    This new section outlines the procedures an AML agency will need to 
follow in approving AML projects receiving less than 50 percent 
government funding because of planned coal extraction incidental to the 
reclamation. Its intent is to ensure that the revised definition of 
``government-financed construction'' at 30 CFR 707 is applied only when 
appropriate to achieve reclamation at AML-eligible sites.
    Several commenters agreed with OSM that sufficient safeguards exist 
to ensure the procedure is used only in appropriate circumstances. 
Another acknowledged that it will now be incumbent upon both the States 
and OSM to implement the rule in a professional and responsible manner. 
These comments are consistent with our belief that the experience and 
safeguards of the AML program, combined with OSM's oversight role, will 
prevent abuse of the provisions in this rule. Again, we emphasize that 
States--not contractors or operators--select projects, solicit bids and 
decide whether to award contracts.
    Two commenters opposed the rule citing a potential for substantial 
administrative abuse. One commenter quoted OSM's 1978 justification for 
proposing the 50 percent funding requirement as minimizing the 
opportunity for this abuse. Both commenters looked to the history of 
SMCRA as providing examples of how its provisions had been abused and 
such abuse had been tolerated by regulatory authorities. Each commenter 
saw every reason to expect that regulatory authorities would 
participate in such abuse in the future.
    OSM is very much aware of the pressure for regulatory authorities 
to apply this rule in such a way as to maximize AML reclamation by 
maximizing coal extraction. It was for this reason that OSM added to 
its original outreach document the consultation and concurrence 
requirements of section 874.17(a) and (b) and the documentation 
requirements of section 874.17(c) which added an element of personal 
accountability to the required determinations and decisions. 
Notwithstanding, OSM has every reason to believe that the Title IV 
authorities will continue to properly implement their programs as they 
have done in the past. Should OSM discern a problem with program 
implementation, we will address that problem through oversight.
    With regard to the commenter's reference to OSM's 1978 
justification for the 50 percent funding requirement, we note that the 
same pressures to maximize coal extraction exist under both the prior 
and present rule. Yet the present rule, objected to by the commenters, 
provides significantly less potential for abuse than the prior rule in 
that it provides for the section 874.17 protections not found in that 
prior rule.
    The introductory paragraph of section 874.17, ``AML agency 
procedures for reclamation projects receiving less than 50 percent 
government funding,'' is adopted as proposed. Paragraphs 874.17(a) 
through (e) are discussed in the sections that follow.

F. How Will the Consultation in Section 874.17(a) Work?

    The consultation process under 874.17(a) requires the AML agency to 
consult with the regulatory authority to determine the likelihood of 
the coal at a proposed AML project being mined under a Title V permit. 
The purpose of this consultation is to ensure that the AML program and 
funds are not used for activities that should properly be permitted and 
regulated under Title V. Through this consultation process OSM seeks to 
ensure that AML funds are directed only to eligible sites.
    OSM believes the information upon which the ``likelihood of the 
coal being mined under a Title V permit'' determination is made should 
be information that is reasonably available. In both our proposed and 
final rules, we have listed certain kinds of information that we 
believe would be available and helpful in reaching a decision on 
whether or not to proceed with the project under the AML program. These 
examples of ``available'' information are not exhaustive. Each site 
will present a different set of circumstances and problems which are 
best addressed on a case-by-case basis. We believe it best to leave to 
the experience and technical and professional judgment of the Title IV 
and Title V officials within each jurisdiction to decide if an 
abandoned mine should be remined under a Title V permit or reclaimed 
under the AML program. We will continue to monitor those decisions 
through our oversight of the respective State programs.
    Under this section, the AML agency also will consult with the 
regulatory authority to determine the likelihood for potential problems 
and impacts arising between Title IV reclamation projects and any 
adjacent or nearby Title V operations. The purpose of this provision is 
to identify environmental problems at an early stage and to establish 
reclamation responsibility. An example of where reclamation 
responsibility needs to be established is where a hydrologic connection 
exists between nearby or adjacent Title IV and Title V activities. In 
such cases where there is acid mine drainage, OSM believes it is 
essential to ensure that responsibility for acid mine drainage arising 
from a permitted Title V activity but impacting a Title IV activity 
remains with the Title V permittee. Conversely, a Title V permittee 
would not be held responsible for any environmental problems 
originating from a nearby or adjacent Title IV reclamation activity 
impacting the Title V activity.
    One commenter suggested that this section be amended to include 
consideration of economic factors which limit the development or 
marketing of the coal resources as an active mining venture.
    OSM recognizes that economics related to environmental risks, 
permitting costs, regulatory compliance costs, quantity and quality of 
the coal as well as development and marketing issues are all important 
factors leading to a decision by a coal operator to mine or not mine 
under a Title V permit. A rough economic analysis is not precluded by 
the regulatory language.

[[Page 7476]]

The AML agency and regulatory authority are free to use any information 
and analyses, including an economic analysis, that they consider 
appropriate to reach and support their section 874.17 decisions. On the 
other hand, a thorough economic analysis would be costly, and the 
information needed for its preparation would not always be readily 
available. In light of these considerations, we are not requiring an 
economic analysis in the final rule.
    The same commenter suggested that a finding be made during the 
consultation as to the likelihood that the project will aid in 
correcting existing off-site environmental damage caused by on-site 
problems, such as discharge of acid mine drainage. Because AML 
authorities already factor such considerations into their project-
selection decisions, we see no reason to require an additional step in 
the consultation process.
    Another commenter was encouraged that the ultimate determination of 
whether an abandoned mine site should be remined under a Title V permit 
or reclaimed under the Title IV AML program would be left to the 
experience and technical and professional judgment of State officials. 
This commenter, and one other, further expressed the hope that, under 
OSM's oversight of State programs, OSM would not be second-guessing 
State determinations about the likelihood that sites would be mined 
under Title V. One of these commenters further questioned whether, if 
OSM were to reverse a State determination, the State would then 
disallow the AML funding and cite the contractor for mining without a 
permit?
    State authorities will have to make determinations under this rule 
based on experience, professional judgment, and the best available 
information. OSM does not intend to second-guess individual decisions 
by State Title IV authorities. Our approach to oversight will be to 
review first the State determinations, as documented under paragraph 
(c) of this section, to find out whether there is a pattern of 
questionable State determinations and, if there is such a pattern, to 
look into the reasons before deciding what remedial action would be 
appropriate. This is consistent with OSM's overall approach to 
oversight of State programs under SMCRA. Even if we were to determine 
that a State is not properly implementing this rule, there would be no 
basis for OSM to take action against a contractor who, in good faith, 
is and has been complying with all terms and conditions of the 
contract. Instead, our focus would be on working with the State to 
correct any program deficiencies.
    One commenter indicated that the waiver of AML reclamation fees was 
key to offsetting some fairly significant risks to contractors in 
taking on an AML project under this rule. Among the risks noted by the 
commenter were the quantity and quality of the incidental coal, 
negotiation of a lease and associated royalty payments, potential 
bonding requirements, and the responsibility to complete the project 
regardless of the return on the sale of the incidental coal. The 
commenter believed it might be necessary to consider ``additional 
adjustments'' in the final rule in order to encourage contractors to 
undertake this type of project.
    OSM realizes that there is a significant factor of operator risk in 
any AML reclamation contract whether or not it involves the incidental 
extraction of coal. However, when there is risk of loss there is also 
potential for gain. Contractors who are uncomfortable with site-
specific risks inherent in individual reclamation contracts should not 
bid on the contract. The final rule is built upon the basic elements of 
a standard AML contract. OSM will not consider adjustments to any of 
these basic elements to encourage operators to undertake reclamation 
projects. Concerning the comment on the waiver of AML fees, the payment 
of AML fees has never been required of contractors extracting coal 
under a Section 528(2) exemption.
    Another commenter suggested that it was unfair to hold the 
contractor responsible for completing the AML work if the project was 
begun with a reliance on agency estimates of coal amount, quality, 
location, marketability, etc., that turned out to be miscalculated or 
otherwise in error. The commenter also asked if OSM would amend the AML 
contract if any material miscalculations were discovered.
    This commenter misinterprets the proposed rule to mean that 
contractors will have to rely upon AML estimates of amount of coal, 
quality of coal, etc.. Under this rule, the AML agency will establish 
and describe the limits of the incidental coal to be removed and any 
other information it has about the deposit. If the AML agency drills 
the site as part of its determination of what coal is incidental to the 
project, that information will be provided to interested contractors. 
But as in any arms-length transaction, it behooves both sides to assure 
themselves that they have sufficient accurate information to enter into 
a contract. Contractors submit bids based on their own cost-benefit 
considerations. Likewise, AML agencies select and reject bids based on 
whether they are in the best interest of the agency. Once a contract is 
executed, however, each party is bound by the terms and the conditions 
of the contract. Contract amendments can take place if approved by the 
AML agency for extraordinary circumstances. However, we stress that we 
see no valid reason for modifying the contract because of the 
contractor's incorrect estimate of either the amount of coal at the 
site or its ultimate value.
    One commenter asserted that the determination in section 
817.74(a)(1) as to the likelihood of the site being mined under a Title 
V permit could not properly be made outside the context of the baseline 
hydrologic, geologic and coal reserve information normally submitted as 
part of a Title V permit application.
    OSM does not agree that a reasonable ``likelihood'' determination 
cannot properly be made on the basis of available (a)(1) information. 
On occasion, however, the AML agency may consider that available 
documentation on coal reserves needs to be augmented, for example, by 
the drilling of core samples. We expect that the results of such 
drilling would be shared with contractors.
    One commenter asserted that the rule is deficient in not being 
``need-tested,'' namely that there is no requirement for the 
``operator'' to demonstrate that the reclamation would not otherwise be 
accomplished under a viable Title V operation.
    OSM interprets this comment as a proposal to change the 
``likelihood'' test into a ``never-ever'' test. Such a proposed 
limiting or narrowing of the ``likelihood'' determination would negate 
the very purpose of this rulemaking by discouraging reclamation under 
Title IV while doing nothing to increase the likelihood of reclamation 
under Title V. In addition, this suggestion would essentially create a 
requirement that a contractor know other companies' trade secrets with 
which it would be impossible to comply. Section 874.17(a), 
``Consultation with the Title V Regulatory Authority,'' is adopted as 
proposed.

G. What Types of Concurrences Between the AML Agency and the Regulatory 
Authority Will be Required in Section 874.17(b)?

    Under proposed section 874.17(b), if the AML agency would have 
decided to proceed with the reclamation project after consulting with 
the Title V regulatory authority, then the two

[[Page 7477]]

would have had to concur in determinations as to: (1) the extent and 
amount of any coal refuse, coal waste, or other coal deposits, the 
extraction of which would be covered by the Part 707 exemption or 
counterpart State and Tribal laws and regulations, and (2) the 
delineation of the boundaries of the AML project. These determinations 
primarily were intended to ensure that only the amount of coal 
physically needed to accomplish the reclamation is covered by the Part 
707 exemption. This coal would be ``incidental'' and exempt from the 
reclamation fee payment.
    One commenter suggested that the rule should have included a 
provision that allows the contractor to amend or revise the boundaries 
of the AML project where conditions or circumstances warrant the 
removal of additional coal as long as the coal is incidental to the 
reclamation. Another commenter suggested that a provision be included 
for amending the determination on the amount and extent of incidental 
coal if additional coal is found to be incidental to the reclamation.
    OSM does not accept either of these suggestions. As with any AML 
reclamation project, the contractor can propose contract revisions 
based on unusual or unanticipated conditions experienced on the site. 
However, only the AML agency has the authority to revise or amend the 
contract. Because the AML agency already has this authority, OSM does 
not see the need for specifically providing for it through a new rule 
provision.
    Two commenters suggested increasing the number and scope of the 
required Title V concurrences. The first proposed to replace the 
existing concurrence on the extent and amount of incidental coal with 
one on the estimated contractor revenues from the sale of that coal. 
This was seen as more appropriate because revenues from coal sales are 
to be used to offset project costs. The second comment proposed 
requiring Title V concurrence on all contract amendments.
    OSM considered but did not accept either of these suggestions. The 
principal reason for involving the Title V authority in the paragraph 
(b)(1) concurrence process is to secure the greatest assurance that the 
limits of incidental coal are correctly identified. As discussed 
elsewhere in this rulemaking, precise estimates of contractor returns 
require company-specific information not available to either OSM or 
State authorities. All that is needed by the AML agency for the 
purposes of this rule is a rough estimate of contractor returns to set 
the range of expected contractor bids on the project. Requiring a Title 
V concurrence on this process is not necessary and would divert limited 
agency resources away from addressing more crucial information needs.
    For similar reasons, OSM did not accept the second proposal that 
Title V concurrence be required for amendments to the reclamation 
contract. One of the principal purposes of the rule is secured by 
involving the Title V authority in the initial determination of the 
contract limits of incidental coal. Once this has occurred, the AML 
authority should have little or no difficulty when considering 
amendments affecting the determination of incidental coal. Requiring 
concurrence of the Title V authority in subsequent revisions to the 
contract, including adjustments to the limits of incidental coal, would 
be of little benefit. If the AML authority decides there is a need to 
discuss a contract amendment with the Title V authority, the AML 
authority is free to seek such advice.
    Several comments focused on the language of proposed (b)(1) which 
would have required specification of the ``amount'' of coal that could 
be extracted under the Part 707 exemption. This ``amount'' 
specification was complicated by the language of proposed (e) which 
would have required a Title V permit in cases where a contractor 
extracts ``more coal than specified in (b)(1).'' Read together, these 
paragraphs appeared to require a Title V permit if more coal was 
extracted than the extent and amount specified in the Title IV and 
Title V concurrence. Commenters not only suggested that such language 
would require AML auditing of company books but also offered opinions 
on the senselessness of tonnage measurements. Other comments 
interpreted the proposed (b)(1) and (e) language as requiring AML audit 
of tonnage figures, company sales and net revenue figures.
    OSM never intended the proposed paragraphs (b)(1) and (e) language 
to require a Title V permit for the extraction of any amount of coal 
that lies within the incidental coal limits specified under (b)(1). 
Instead, OSM intended that the language would only require a Title V 
permit for coal extracted beyond those limits. The ``extent'' or limits 
of incidental coal can reasonably be defined in terms of the dimensions 
of the area containing the coal. Exact determination of tonnage within 
these dimensions would, in most cases, be impossible to achieve prior 
to removing the coal.
    To eliminate any ambiguities that may have appeared in the proposed 
(b)(1) rule language, the final rule replaces the phrase ``extent and 
amount'' with the word ``limits''. The remainder of section 
874.17(b)(1) and (2), ``Concurrence with the Title V Regulatory 
Authority,'' is adopted as proposed.
    Final section 874.17(b)(1) reads:

    You [the AML authority] must concur in a determination of the 
limits on any coal refuse, coal waste, or other coal deposits which 
can be extracted under the Part 707 exemption or counterpart State/
Indian Tribe laws and regulations.

    For information on conforming changes to section 874.17(e), see the 
response to question J. in Section II of this preamble: ``What must the 
contractor do under final section 874.17(e) if extracting coal beyond 
the limits of the incidental coal specified in section 874.17(b)?''

H. Under Section 874.17(c), How Will the AML Agency Document the 
Results of the Consultation and the Concurrences With the Title V 
Regulatory Authority?

    Under the proposed and final rules, the AML agency documents, in 
the AML case file, the determinations as to the likelihood of coal at 
the site being mined under a Title V permit and the likelihood of 
interactions between AML activities and nearby or adjacent Title V 
activities that might create new environmental problems or adversely 
affect existing situations. Also, the AML agency documents the 
information used for making these determinations and the names of the 
responsible agency officials.
    As we received no comments on section 874.17(c), ``Documentation,'' 
it is adopted as proposed.

I. What Special Requirements Will Apply for Qualifying Section 
874.17(d) Reclamation Projects?

    Under the proposed and final rule, section 874.17(d)(2) expressly 
requires that qualifying AML reclamation projects comply with 
provisions for State and Tribal reclamation plans and grants found at 
30 CFR Subchapter R. The required compliance with Subchapter R is 
intended to ensure that the incidental coal extraction projects 
authorized under this rulemaking is accomplished in accordance with the 
substantial safeguards of the AML program. These safeguards include 
such features as: public participation and involvement; environmental 
evaluation to achieve compliance with the National Environmental Policy 
Act of 1969; and use of appropriate State or Tribal procurement 
procedures and regulations

[[Page 7478]]

as authorized under the grant common rule at 43 CFR 12.76.
    Further, to provide increased protections to the AML fund and to 
citizens or landowners who might be affected by the project, we 
proposed three additional requirements to qualifying section 874.17 
reclamation projects. These three proposed requirements, with only a 
minor wording adjustment in paragraph (d)(4) discussed below, are 
included in the final rule. Paragraph (d)(1) requires the AML agency to 
characterize the site in terms of existing hydrologic and other 
environmental problems. Paragraph (d)(3) requires the AML agency to 
develop site-specific reclamation and contractual provisions, such as 
performance bonds, to ensure that the reclamation is completed. And, 
paragraph (d)(4) requires the contractor to provide documents that 
authorize the extraction of the coal and commit to the payment of 
royalties to the mineral owner or other appropriate party.
    The purpose of the (d)(4) requirement is to ensure that before a 
reclamation contract is awarded, there will be a valid coal lease 
authorizing the contractor to extract the coal. The terms of the lease 
will identify the party responsible for paying the royalty, the amount 
of the royalty, and the party receiving the royalty. To make the rule 
language clearer, we are including in final (d)(4) the qualifying 
phrase that the contractor provide, ``prior to the time reclamation 
begins,'' applicable documents that clearly ``commit to the payment of 
royalties.''
    One commenter indicated that the documentation requirements of 
section 874.17(d) must be interpreted as requirements for the AML 
program and not as information to be supplied in lieu of a mining 
permit. The commenter reasoned that the goal of the AML program is to 
improve existing environmental conditions and not just to protect or 
preserve existing conditions. OSM agrees with the commenter on both 
points.
    Two other commenters raised issues regarding the payment of 
royalties, severance taxes and related obligations. The first wanted to 
ensure that the AML contractor secure a mineral lease and/or pay 
associated royalties, particularly for Federal and State coal. The 
second raised the question of the proof of payment for such ``other'' 
fees as severance and black lung taxes.
    In response to both these commenters, we emphasize, as we have done 
in the proposed rule and elsewhere in this final rule, that this 
rulemaking is not intended to change, alter, or supersede any other 
Federal or State laws, regulations, or requirements that apply to all 
AML reclamation projects. The requirement for a Federal or State lease 
and the payment of Federal or State royalties is unaffected by this 
rule. Also, any requirements for proof of payment for severance and 
black lung fees--fees which are not required under SMCRA--are 
unaffected by this rule.
    A final commenter raised the question of whether the (d)(4) 
documentation authorizing coal extraction (e.g., a lease) would be 
required before or after project bid submission. OSM believes that 
requiring the paragraph (d)(4) documentation before the reclamation 
actually begins will provide the greatest latitude to parties 
interested in bidding on the AML reclamation projects. As indicated 
earlier, we have further revised final (d)(4) to include the qualifying 
phrase ``prior to the time reclamation begins'' to reflect this 
intention. In all other ways, final section 874.17(d), ``Special 
requirements,'' is adopted as proposed and now reads:
    (d) Special requirements. For each project, you must:
    (1) Characterize the site in terms of mine drainage, active slides 
and slide-prone areas, erosion and sedimentation, vegetation, toxic 
materials, and hydrologic balance;
    (2) Ensure that the reclamation project is conducted in accordance 
with the provisions of 30 CFR Subchapter R;
    (3) Develop specific-site reclamation requirements, including 
performance bonds when appropriate in accordance with State procedures; 
and
    (4) Require the contractor conducting the reclamation to provide 
prior to the time reclamation begins applicable documents that clearly 
authorize the extraction of coal and payment of royalties.

J. What Must the Contractor do Under Final Section 874.17(e) if 
Extracting Coal Beyond the Limits of the Incidental Coal Specified in 
Section 874.17(b)?

    In proposed and final section 874.17(e), the contractor is required 
to obtain a permit under Title V for the extraction of any coal not 
included in the paragraph (b)(1) Part 707 exemption. Such coal is not 
incidental to the AML reclamation project and thus is subject to all 
the regulatory requirements of Title V.
    One commenter asked what OSM would do if, after a contract is 
signed, the lessor and contractor wanted to take out additional coal 
underlying the coal determined to be incidental to the project and 
possibly provide more complete reclamation in the process. Would OSM 
consider the additional coal extending beyond the established project 
limits to be incidental because its removal could improve the 
reclamation, or would OSM consider the coal non-incidental and expect 
the contractor to obtain a Title V permit?
    This is an important issue, and we want to clarify how it must be 
addressed under the final rule. All coal extracted beyond the limits of 
the incidental coal identified in the AML contract, regardless of where 
it is found relative to the incidental coal, is subject to Title V 
requirements, including obtaining a permit and payment of reclamation 
fees. Once the contractor begins work on the project and the AML 
authority subsequently determines that additional coal is incidental to 
the project, the contract could be amended to include the additional 
coal. The standard for determining incidental coal is always whether 
removal or extraction is physically necessary to accomplish the 
reclamation of the approved AML construction project. This standard 
must be applied in the initial contract determination and in any 
amendments that change the contract limits of incidental coal. Any coal 
whose removal or extraction is not physically necessary to complete the 
reclamation is not incidental to that project--even if such removal and 
sale would reduce the overall cost of the reclamation to the 
government.
    One commenter suggested that the preamble discussion in the 
proposed rule (question K. in Section II of the preamble to the 
proposed rule) providing for contract remedies against AML projects for 
the extraction of coal outside of the section 874.17(b)(1) project 
limits, conflicted with the proposed rule language of section 874.17(e) 
requiring a Title V permit for such extraction. While several 
commenters read the proposed rule language of paragraphs (b)(1) and (e) 
as establishing a tonnage limit on the amount of incidental coal that 
could be extracted from the AML project (with a Title V permit being 
required for coal exceeding the tonnage limit), most commenters 
appeared to correctly interpret these paragraphs to mean that the 
limits on incidental coal would be identified and described in terms of 
dimensions of the area containing the coal. A Title V permit would not 
be needed to extract coal within these prescribed limits, regardless of 
how much coal is extracted or the quality and value of the coal. To 
make it clear in this final rule that paragraph (e) requires a Title V 
permit only for the extraction of coal beyond the paragraph (b)(1) 
limits, we are making the following clarifying changes to that 
paragraph.

[[Page 7479]]

    Final paragraph (e) replaces the word ``more'' in front of the word 
``coal'' with the phrase ``beyond the limits of the incidental 
[coal].'' The rule language concludes with the addition of the new 
phrase ``for such coal.'' This change should clarify that extraction of 
coal beyond that which has been determined to be incidental to the 
project under (b)(1) is unauthorized and, thus, requires a Title V 
permit. At the same time coal extracted within the (b)(1) limits, 
regardless of how much or how valuable, is incidental and, therefore, 
authorized under the project.
    Final section 874.17(e) reads:

    If the reclamation contractor extracts coal beyond the limits of 
the incidental coal specified in paragraph (b)(1) of this section, 
the contractor must obtain a permit under Title V of SMCRA for such 
coal.

    Two commenters suggested an auditing or final adjusting of contract 
cost to net revenues in lieu of the proposed regulatory requirement to 
seek a Title V permit if the contractor extracts more coal than 
authorized in the AML contract. One of the commenters believed that 
this was fairer, more effective and would not halt the AML project if 
the contractor could not obtain a permit or delay it until such time as 
the contractor obtained a permit. These and other commenters proposed 
alternative remedies, procedures, and sanctions to the paragraph (e) 
requirement that a contractor obtain a Title V permit for extraction of 
coal beyond the incidental coal limits of (b)(1).
    As previously mentioned, OSM recognizes that there are times that 
unintended and extremely limited extraction of coal may occur beyond 
prescribed (b)(1) limits. To the extent that such coal is less than 250 
tons, the extraction may be exempt from regulation under the Title V 
permitting requirement at 30 CFR 700.11(a)(2). Failing that exemption, 
the Act allows no leeway in the requirement for Title V permitting. To 
be reasonably assured that coal removal will not exceed the incidental 
coal limits of (b)(1), contractors should design projects accurately 
and precisely and pay close attention to project boundaries and 
incidental coal limits when undertaking the project.
    We note that the paragraph (e) requirement that the contractor must 
obtain a Title V permit does not preclude the AML agency from imposing 
contract sanctions under the Title IV program if the contractor 
breaches the conditions of the contract. As indicated in the preamble 
discussion following question K. in Section II of the proposed rule, 
AML contractors removing coal beyond the limits authorized by the AML 
project could be subject to a wide range of remedies for breach of 
contract. Such sanctions are already available to the Title IV agency 
to use at its discretion to ensure that reclamation is conducted fully 
in accordance with applicable laws, regulations and contract 
requirements. Indeed, when a contractor clearly exceeds the (b)(1) 
incidental coal limits, OSM expects that the AML agency would impose 
appropriate sanctions, as well as refer the matter to Title V 
authorities for appropriate action. Hence, we have not adopted any of 
the suggested rule changes that would have limited the available 
remedies or sanctions.

K. How Does This Rulemaking Relate to the Established AML Priority 
System for Selecting Projects?

    OSM received several comments concerning the relationship to the 
priorities established in Section 403 of SMCRA relative to projects 
involving the incidental recovery of coal. One of these commenters 
encouraged OSM to add a paragraph (d) under section 874.17 titled 
``Project Priority,'' the purpose of which would be to remind the 
States that the selection of projects shall reflect the priorities 
outlined in Section 403 of SMCRA regardless of whether or not there is 
coal recovery potential. This commenter suggested that such an advisory 
statement would help States defend their project selection process 
against political or business pressure to fund certain sites with coal 
recovery potential. At the same time, the commenter suggested, an 
advisory statement would not preclude States from approving low 
priority projects where coal recovery potential allows reclamation to 
be performed at little or no cost to the government.
    Another commenter indicated that the discussion in our proposal (63 
FR 34770; June 25, 1998) suggested that the AML agency could select 
sites independent of the priority ranking. The commenter recommended 
that OSM clarify that the rule provides the State AML agency with the 
authority to depart from the priority system in order to speed approval 
of the incidental coal removal projects developed under this rule.
    A third commenter was encouraged by OSM's recognition that the 
types of AML projects likely to attract most attention under this rule 
are those listed as priority 3 under Section 403 of SMCRA. This same 
commenter was encouraged again that the rule does not mandate that the 
States approve all AML projects presented to them which involve less 
than 50 percent government funding.
    OSM certainly did not intend by anything said in its proposed rule 
to suggest that States disregard the established priority system. In 
our proposed rule, we expressly stated that, ``The AML agency selects 
individual sites from the AML Inventory using its priority system.'' 
(63 FR 34771; June 25, 1998).
    OSM further does not believe that there is need to add an advisory 
regulation to clarify the priority structure. Projects done under 
authority of this rule will not differ from any other AML project with 
regard to Section 403 of SMCRA. The States have been administering 
quality AML programs since the early 1980's. Political or business 
pressure in project selection has always been part of the process, and 
there is every reason to believe that such pressure can be expected 
here. While individual projects selected may be priority 1, 2 or 3, 
depending on the State's needs and the amount of AML reclamation 
remaining to be done, individual projects are approvable as long as 
they reflect, within the context of other AML projects, the priorities 
outlined in Section 403. States will retain the maximum discretion in 
choosing AML projects consistent with their current authority in 
Section 403.
    One commenter believed that OSM's statement that, ``The proposal 
was not intended to address project sites involving redisturbance and 
subsequent reclamation of abandoned mine lands, such as highwalls and 
outslopes that have become environmentally stable over the years and 
pose no other problems'' provides a significant obstacle to reducing 
the current AML inventory through reclamation. OSM disagrees with the 
commenter. Section 403 of SMCRA states that, in addition to the 
eligibility criteria for AML reclamation found at Section 404, sites 
must meet one of the priorities at Section 403. If an abandoned mine 
site has become stable over the years, it would not meet the priorities 
in Section 403 and it would not be subject to expenditures from the AML 
fund. Such a site could properly be removed from the inventory at the 
State's discretion.

L. Is This Rulemaking Really More About Remining than AML Reclamation?

    No. The three commenters opposing the rule asserted that it was a 
thinly veiled remining incentive. They uniformly decried what they 
perceived to be the loss of Title V remining

[[Page 7480]]

protections for operations that they suggested would be conducted as 
Title IV reclamation projects under this rule. Much of commenters' 
concerns centered on their assertion that the rule would lead to 
administrative abuse and operate as a remining incentive. One of the 
three commenters asserted that the rule was a remining incentive 
because it would lead to ``coal mining for commercial profit'' as part 
of a government-financed operation.
    OSM has already addressed commenters' concerns about abuse of the 
rule in Section II.E. of this preamble. With regard to the commenter's 
concern that the rule would serve as a remining incentive because it 
would lead to ``coal mining for commercial profit,'' we note that 
Section 528(2) exempted operations can include the extraction of coal 
for commercial profit. Profit is not in conflict with the goal or 
intent of Section 528(2). This rule is not a remining incentive. It is 
intended to encourage the reclamation at AML-eligible sites that have 
little-to-no likelihood of ever being remined.
    The commenter's concern that operators might ``mine'' coal for 
``commercial profit'' under this rule is balanced by industry 
commenters' often voiced concern over the same potential for 
``commercial loss.'' As under any AML reclamation contract, whether or 
not it involves the extraction of coal, there will always be an element 
of risk for the bidding party. OSM neither guarantees a profit nor 
insures against a loss for reclamation contracts. OSM's primary 
interest, particularly for the reclamation conducted under this rule, 
is in negotiating a contract that reflects a savings from the 
anticipated program costs of reclaiming the site and burying or 
disposing of the incidental coal deposits. Such savings will in turn be 
used to reclaim other eligible sites.
    This same commenter challenged the justification for the rule on 
the basis of ``remining incentives'' already on the books. The 
commenter cited: (1) the Clean Water Act Reauthorization of 1978, and 
(2) the Energy Policy Act of 1992. Effective as these incentives may 
have been in encouraging Title V remining, substantial acreage remains 
unremined with little likelihood of being remined under existing 
regulations. It is these sites that this final rule targets for Title 
IV reclamation.
    The same commenter also characterized the rule as using AML funds 
to improperly subsidize the remining industry. The commenter cited 
Congress' prior rejection of such a subsidy in the legislative history 
of the Energy Policy Act of 1992. Although no specific citation was 
provided, the commenter probably was referring to the provisions of 
House Bill 4053, which created a State remining insurance fund derived 
mainly from AML monies. This fund would have assumed a Title V 
permittee's liability for correcting environmental problems that 
resulted from unanticipated events or conditions. H.R. 4053, 101st 
Cong. Sec. 422 (1990). The concern expressed in hearings over these 
provisions was that a few problem sites could deplete the entire fund. 
Coal Remining: Hearings on H.R. 2791 and 4053 before the Subcommittee 
on Mining and Natural Resources, 101st Cong. at 181,187 (1990) 
(Statements of Dave Rosenbaum and Nick J. Rahall.)
    Beyond the fact that the present rule concerns Title IV reclamation 
and not Title V remining, we note that the rule does not threaten to 
exhaust AML funds on Title V reclamation, but rather is a means of 
maximizing existing AML funds for Title IV reclamation. It could be 
better said that this rule does not subsidize industry but, under 
controlled parameters, uses industry to subsidize AML reclamation.
    Another commenter suggested that the proposal be withdrawn and that 
OSM explore other approaches to the creation of ``remining'' 
incentives. Several incentives were proposed which, because they dealt 
with remining and not AML reclamation projects, were beyond the scope 
of this rulemaking. We note, however, that the commenter's suggested 
remining incentives (1) would require congressional action in the form 
of statutory changes or appropriations, or (2) were conditioned with 
such caveats so as to render them ineffective as incentives to the coal 
industry. These recommended incentives highlight the difficulty 
encountered over the last twenty years by industry, OSM, and the 
environmental community in developing meaningful, environmentally 
protective, mutually supportable remining incentives. As a result, an 
enormous number of disturbed sites have yet to be remined and reclaimed 
under Title V. We are promulgating the current rule in an effort to 
encourage the Title IV reclamation of some of those sites.
    Following the prior theme from commenters that the rule is not a 
reclamation procedure but a remining incentive, one commenter listed 
seven areas in which projects authorized under this rule, although 
providing Title IV protections, did not provide Title V level 
protections. This less than Title V level of protection is not 
unexpected considering that projects authorized under this final rule 
are AML reclamation projects and not Title V activities. AML 
reclamation has been successfully performed under SMCRA for 20 years 
complying with numerous AML program and AML contract safeguards. The 
commenter has, in effect, made a broad sweeping condemnation of the AML 
procedures inherent to all reclamation projects, including those that 
would be initiated under the scope of this final rule. At the same 
time, despite OSM's detailed explanations of the safeguards in the 
preamble to the proposed rule, the commenter did not specifically cite 
which AML safeguards are deficient or have proved inadequate in the 
past and did not offer suggestions on how they could be strengthened.

M. Other Comments

    One commenter supporting the rule characterized it as a further 
step in implementing primacy under SMCRA. This commenter correctly 
noted that a State's adoption of this rule and the resulting change in 
reach of its AML program is optional. Each State is free to manage its 
AML program in light of its particular needs and resources.
    The three commenters categorically opposing the rule also attacked 
it as lacking adequate justification. Two of the commenters asserted 
that OSM was not justified in seeking new ways of funding the 
reclamation of acreage that otherwise would not be reclaimed because 
there was still a ``significant sum of [AML] money unexpended in the 
treasury and unrequested by OSM.'' The commenters were referring to the 
unappropriated balance in the AML Fund--more than $1 billion collected 
in AML fees and deposited in the Fund but not appropriated by Congress 
for reclamation. These and other commenters expressed support for 
making all Fund money available for reclamation.
    This comment is outside of the scope of this rulemaking, and it 
refers both to an agency budget request and a congressional 
appropriation process over which OSM has little control. Further, if 
every dollar in the Fund were to be appropriated for reclamation, it 
would not come close to satisfying the reclamation need. Even if the 
entire Fund became available for reclamation, this final rule would 
still be necessary.
    One of these commenters stated that OSM had not provided any 
figures showing how many additional abandoned mines would be reclaimed 
under the proposal and demonstrating that the rule would have tangible 
environmental benefits. While projections of the exact number of sites

[[Page 7481]]

that would be reclaimed as a result of this new rule cannot be reliably 
made, OSM has information from 15 States that collectively estimated 
that a range of from 32 to 80 sites per year could be reclaimed under 
this rule.
    One commenter asked for confirmation that the proposed change in 
the definition at section 707.5 would not affect the review 
responsibility to identify historic properties and effects under 36 CFR 
800. That commenter also suggested that it would be helpful to consider 
coordination measures for AML and regulatory agencies to perform the 
needed reviews and to avoid redundancy. This rule does not change any 
existing requirements in the Title IV AML program or procedures and 
thus will not change existing review requirements for historic 
properties. Changes in coordination procedures, if any, will be left to 
the discretion of the individual States.
    One commenter expressed the idea that the enhanced reclamation 
scope of the rule leaves open for interpretation and possible 
reevaluation of the procedures for State contracting and bonding. 
Again, we emphasize that reclamation projects covered under the scope 
of this rule making are intended to be accomplished within existing AML 
processes and procedures. This final rule does not change, alter or 
supercede any other Federal or State laws, regulations or requirements 
that would otherwise apply to the AML projects. At the same time, it 
does not preclude States from revising any procedures in order to 
better implement the provisions of this final rule.

III. Procedural Determinations

1. Executive Order 12866--Regulatory Planning and Review

    This document is a significant rule and has been reviewed 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 raise novel 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.).
    The rule, when implemented, should slightly improve business 
opportunities for all entities, small and large, by increasing the 
likelihood that between 32 and 80 additional reclamation projects will 
be undertaken each year. In February 1997, a survey of 15 States, 
conducted by the National Association of Abandoned Mine Land Programs, 
indicated that if the proposal were implemented, 13 States intended to 
use the provisions to achieve reclamation of problem areas such as coal 
refuse, dangerous highwalls, AMD, and subsidence. Of those States, 12 
anticipated one to five projects per year, while one State anticipated 
20 or more. Therefore, OSM estimates a range of from 32-80 additional 
projects per year that will be undertaken as a result of the new rule. 
In calendar year 1997, there were 476 AML reclamation projects approved 
and in calendar year 1998, there were 460. This results in an average 
of 468 projects per year for this two year period. Therefore, it is 
anticipated that the average number of AML projects under the new rule 
will increase from 468 to a low of 500 and a high of 548 projects per 
year, or an increase of between 6.8 and 17.1 percent.
    Data from OSM's electronic Applicant Violator System indicates that 
since July 1994, we have cleared approximately 724 businesses as 
contractors for AML reclamation projects. While it is likely that some 
of the 724 business were coal mining companies which we classify as 
small businesses under the Small Business Administration (SBA) 
criteria, some were also construction companies, landscape companies, 
and other types of businesses with the heavy equipment necessary to 
reclaim an abandoned coal mine site. Since we do not collect data on 
the nature of the businesses bidding on reclamation projects, the 
number of employees they have, or their annual receipts in millions of 
dollars, we are unable to determine how many of the 724 would qualify 
as small businesses under the SBA criteria at 13 CFR 121.201. However, 
given a maximum increase of 80 new projects undertaken each year and a 
potential bidding pool of over 724 distinct businesses from various 
industries, it is unlikely that the rule will have an impact on a 
substantial number of small businesses.
    The economic impact of the rule on small businesses is expected to 
be minimal. This determination is based on the following facts:

--The rule will not increase the cost or burden on businesses 
reclaiming sites eligible under the existing regulations;
--The rule merely makes possible for businesses to undertake the 
reclamation of areas not previously remined or reclaimed under existing 
regulations;
--The undertaking of the discreet reclamation projects opened up by 
this new rule is entirely voluntary; and
--The only increase in cost due to these new projects will be that for 
documentation related to the removal and sale of coal as an incidental 
part of the reclamation project.

    This incremental cost will be factored into the cost of the project 
bid submitted to the Title IV governmental authority and should prove 
to be an insignificant percentage of the total bid. None of the 
comments from businesses complained that the rule imposed additional 
burdens on doing business. Instead, business commented that the rule 
did not go far enough in encouraging the reclamation of eligible sites. 
Those who do participate and bid on reclamation projects resulting from 
the new rule will do so to reap an economic benefit in the form of a 
profit on the sale of coal incidentally mined during the reclamation of 
the site. The total amount of Federal money that will be available each 
year for AML projects will neither increase nor decrease as a result of 
this rule.

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. It would allow AML agencies to work in partnership with 
contractors to leverage finite AML Reclamation Fund dollars to 
accomplish more reclamation. To offset the reduction in government 
funding, the contractor would be allowed to sell coal found incidental 
to the project and recovered as part of the reclamation. Participation 
under the rule change is strictly voluntary and those participating are 
expected to do so because of the economic benefit.
    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

[[Page 7482]]

does not impose any new requirements on the coal mining industry or 
consumers, and State and Indian AML program administration is funded at 
100 percent by the Federal government.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises for 
the reasons stated above.

4. Unfunded Mandates

    This rule does not impose an unfunded mandate on State, local, or 
Tribal governments or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State, 
local or Tribal governments or the private sector. The administration 
of the AML program by a State or Indian Tribe is funded at 100 percent 
by the Federal Government and the decision by a State or Indian Tribe 
to participate is voluntary. A statement containing the information 
required by the Unfunded Mandates Reform Act (1 U.S.C. 1531, et seq.) 
is not required.

5. Executive Order 12630--Takings

    In accordance with Executive Order 12630, the rule does not have 
significant takings implications. The rule would allow AML agencies to 
work in partnership with contractors to leverage finite AML Reclamation 
Fund dollars to accomplish more reclamation. To offset the reduction in 
government funding, the contractor would be allowed to sell coal found 
incidental to the project and recovered as part of the reclamation.

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 above.

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

    Under the Paperwork Reduction Act, agencies may not conduct or 
sponsor a collection of information unless the collection of 
information displays a currently valid Office of Management and Budget 
(OMB) control number. Also, 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 number. Therefore, in 
accordance with 44 U.S.C. 3501 et seq, OSM submitted the information 
collection and record keeping requirements of 30 CFR Part 874 to OMB 
for review and approval. OMB approved the collection activity for Part 
874 and assigned it OMB control number 1029-0113. This control number 
will appear in section 874.10. To obtain a copy of OSM's information 
collection clearance authority, explanatory information, and related 
form, contact John A. Trelease at (202) 208-2783 or by e-mail at 
[email protected].

9. National Environmental Policy Act

    OSM has prepared an environmental assessment (EA) of this rule and 
has made a Finding of No Significant Impact (FONSI) on the quality of 
the human environment under Section 102(2)(C) of the National 
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. Section 4332(2)(C). 
The EA and FONSI are on file in the OSM Administrative Record for the 
rule.
    Authors: D.J. Growitz and Danny Lytton, 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 707

    Highways and roads, Incidental mining, Reporting and recordkeeping 
requirements, Surface mining, Underground mining.

30 CFR Part 874

    Reclamation, Surface mining, Underground mining.

    Dated: December 21, 1998.
Sylvia V. Baca,
Acting Assistant Secretary, Land and Minerals Management.

    For the reasons given in the preamble, 30 CFR Parts 707 and 874 are 
amended as set forth below:

PART 707--EXEMPTION FOR COAL EXTRACTION INCIDENT TO GOVERNMENT-
FINANCED HIGHWAY OR OTHER CONSTRUCTION

    1. The authority citation for Part 707 continues to read as 
follows:

    Authority: Secs. 102, 201, 501, and 528 of Pub. L. 95-87, 91 
Stat. 448, 449, 467, and 514 (30 U.S.C. 1202, 1211, 1251, 1278).

    2. In Sec. 707.5, the definition of Government-financed 
construction is revised to read as follows:


Sec. 707.5  Definitions.

* * * * *
    Government-financed construction means construction funded 50 
percent or more by funds appropriated from a government financing 
agency's budget or obtained from general revenue bonds. Funding at less 
than 50 percent may qualify if the construction is undertaken as an 
approved reclamation project under Title IV of the Act. Construction 
funded through government financing agency guarantees, insurance, 
loans, funds obtained through industrial revenue bonds or their 
equivalent, or in-kind payments does not qualify as government-financed 
construction.
    3. Section 707.10 is revised to read as follows:


Sec. 707.10  Information collection.

    Since the information collection requirement contained in 30 CFR 
707.12 consists only of expenditures on information collection 
activities that would be incurred by persons in the normal course of 
their activities, it is exempt from the requirements of the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.) and does not require clearance 
by OMB.

PART 874--GENERAL RECLAMATION REQUIREMENTS

    4. The authority citation for Part 874 continues to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq., as amended.

    5. Section 874.10 is added to read as follows:


Sec. 874.10  Information collection.

    (a) In accordance with 44 U.S.C. 3501 et seq., the Office of 
Management and Budget (OMB) has approved the information collection 
requirements of this part. The OMB clearance number is 1029-0113. This 
information is needed to ensure that appropriate reclamation projects 
involving the incidental extraction of coal are conducted under the 
authority of Section 528(2) of SMCRA and that selected projects contain 
sufficient environmental safeguards. Persons must respond to obtain a 
benefit.
    (b) OSM estimates that the public reporting burden for this part 
will average 60 hours per project, 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

[[Page 7483]]

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 1029-0113 in any correspondence.
    6. Section 874.17 is added to read as follows:


Sec. 874.17  AML agency procedures for reclamation projects receiving 
less than 50 percent government funding.

    This section tells you, the AML agency, what to do when considering 
an abandoned mine land reclamation project as government-financed 
construction under Part 707 of this chapter. This section only applies 
if the level of funding for the construction will be less than 50 
percent of the total cost because of planned coal extraction.
    (a) Consultation with the Title V Regulatory Authority. In 
consultation with the Title V regulatory authority, you must make the 
following determinations:
    (1) You must determine the likelihood of the coal being mined under 
a Title V permit. This determination must take into account available 
information such as:
    (i) Coal reserves from existing mine maps or other sources;
    (ii) Existing environmental conditions;
    (iii) All prior mining activity on or adjacent to the site;
    (iv) Current and historic coal production in the area; and
    (v) Any known or anticipated interest in mining the site.
    (2) You must determine the likelihood that nearby or adjacent 
mining activities might create new environmental problems or adversely 
affect existing environmental problems at the site.
    (3) You must determine the likelihood that reclamation activities 
at the site might adversely affect nearby or adjacent mining 
activities.
    (b) Concurrence with the Title V Regulatory Authority. If, after 
consulting with the Title V regulatory authority, you decide to proceed 
with the reclamation project, then you and the Title V regulatory 
authority must concur in the following determinations:
    (1) You must concur in a determination of the limits on any coal 
refuse, coal waste, or other coal deposits which can be extracted under 
the Part 707 exemption or counterpart State/Indian Tribe laws and 
regulations.
    (2) You must concur in the delineation of the boundaries of the AML 
project.
    (c) Documentation. You must include in the AML case file:
    (1) The determinations made under paragraphs (a) and (b) of this 
section;
    (2) The information taken into account in making the 
determinations; and
    (3) The names of the parties making the determinations.
    (d) Special requirements. For each project, you must:
    (1) Characterize the site in terms of mine drainage, active slides 
and slide-prone areas, erosion and sedimentation, vegetation, toxic 
materials, and hydrologic balance;
    (2) Ensure that the reclamation project is conducted in accordance 
with the provisions of 30 CFR Subchapter R;
    (3) Develop specific-site reclamation requirements, including 
performance bonds when appropriate in accordance with State procedures; 
and
    (4) Require the contractor conducting the reclamation to provide 
prior to the time reclamation begins applicable documents that clearly 
authorize the extraction of coal and payment of royalties.
    (e) Limitation. If the reclamation contractor extracts coal beyond 
the limits of the incidental coal specified in paragraph (b)(1) of this 
section, the contractor must obtain a permit under Title V of SMCRA for 
such coal.

[FR Doc. 99-3556 Filed 2-11-99; 8:45 am]
BILLING CODE 4310-05-P