[Federal Register Volume 64, Number 242 (Friday, December 17, 1999)]
[Rules and Regulations]
[Pages 70766-70838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30892]



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Part II





Department of the Interior





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Office of Surface Mining Reclamation and Enforcement



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30 CFR Part 740 et al.



Valid Existing Rights; Final Rule

30 CFR Part 761



Interpretative Rule Related to Subsidence Due to Underground Coal 
Mining; Final Rule

  Federal Register / Vol. 64, No. 242 / Friday, December 17, 1999 / 
Rules and Regulations  

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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 740, 745, 761, 762, 772, 773, 778, 780, and 784

RIN 1029-AB42


Valid Existing Rights

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

ACTION: Final rule and record of decision.

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SUMMARY: This rule redefines the circumstances under which a person has 
valid existing rights (VER) to conduct surface coal mining operations 
on lands listed in section 522(e) of the Surface Mining Control and 
Reclamation Act of 1977 (SMCRA or ``the Act''). Section 522(e) 
prohibits or restricts surface coal mining operations on certain lands, 
including, among other areas, units of the National Park System, 
Federal lands in national forests, and buffer zones for public parks, 
public roads, occupied dwellings, and cemeteries. The rule also 
establishes requirements for submitting and processing requests for VER 
determinations for those lands. Finally, the rule modifies the 
exception for existing operations; revises the procedures for 
compatibility findings for surface coal mining operations on Federal 
lands in national forests; and establishes requirements governing coal 
exploration activities on the lands listed in section 522(e) of SMCRA. 
Adoption of this rule removes all existing suspensions affecting 30 CFR 
part 761.

EFFECTIVE DATE: January 18, 2000.

FOR FURTHER INFORMATION CONTACT: Dennis Rice, Office of Surface Mining 
Reclamation and Enforcement, Room 115, South Interior Building, 1951 
Constitution Avenue, NW, Washington, DC 20240. Telephone: (202) 208-
2829. E-mail address: [email protected]. Additional information 
concerning OSM, this rule, and related documents may be found on OSM's 
home page on the Internet at http://www.osmre.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. How did we obtain and consider public input?
II. What general comments did we receive on the proposed rule?
III. How does the final rule differ stylistically from the proposed 
rule?
IV. In what context does the term VER appear in SMCRA?
V. What is the legislative history of the VER provision in section 
522(e)?
VI. How did we previously define or attempt to define VER?
VII. Section 761.5: How are we defining VER in this final rule?
    A. Introductory Language.
    B. Paragraph (a): Property Rights Demonstration.
    C. Paragraph (b): Primary Standards for VER.
    1. What alternatives did we consider?
    2. Why did we select the good faith/all permits standard?
    3. What comments did we receive regarding takings issues 
concerning the good faith/all permits standard?
    4. Why did we reject the takings standard?
    5. Why did we reject the ownership and authority standard?
    D. Paragraph (b)(2): ``Needed for and Adjacent'' Standard.
    1. What is the history of this standard?
    2. How did we propose to revise this standard in 1997?
    3. How does the standard in the final rule differ from the one 
that we proposed in 1997?
    4. What comments did we receive on the proposed standard and how 
did we dispose of them?
    E. Paragraph (c): VER Standards for Roads.
    F. How does the definition address VER for lands that come under 
the protection of section 522(e) after August 3, 1977?
VIII. How does our definition of VER compare with VER under other 
Federal statutes?
IX. Are VER transferable?
X. Sections 740.4, 745.13, and 761.14(a): Who is responsible for VER 
determinations for non-Federal lands within section 522(e)(1) areas?
    A. Statutory Background and Rulemaking History.
    B. What alternatives did we consider?
    C. Which alternative are we adopting?
XI. Sections 740.11 and 761.14(a): Which VER definition (State or 
Federal) applies to lands listed in section 522(e)(1) and (e)(2) of 
the Act?
XII. What other changes are we making in the Federal lands program 
regulations in 30 CFR Parts 740 and 745?
XIII. Why are we removing the definition of ``surface coal mining 
operations which exist on the date of enactment'' from 30 CFR 761.5?
XIV. Why are we adding definitions of ``we'' and ``you'' and their 
grammatical forms to 30 CFR 761.5?
XV. How have we revised 30 CFR 761.11, which is the regulatory 
counterpart to the prohibitions and limitations of section 522(e) of 
the Act?
XVI. Section 761.12: Which operations qualify for the exception for 
existing operations?
XVII. Why are we removing the prohibitions in former 30 CFR 
761.11(h)?
XVIII. Why did we reorganize former 30 CFR 761.12 as Secs. 761.13 
through 761.17 and 762.14?
XIX. Section 761.13: How have we revised the procedural requirements 
for compatibility findings for surface coal mining operations on 
Federal lands in national forests?
XX. How do 30 CFR 761.14 and 761.15, which concern waivers for 
buffer zones for public roads and occupied dwellings, differ from 
former 30 CFR 761.12(d) and (e)?
XXI. Section 761.16: What are the submission requirements for 
requests for VER determinations and how will these requests be 
processed?
    A. In what major ways does the final rule differ from the 
proposed rule?
    1. Role of Federal Surface Management Agencies.
    2. Handling of Situations Involving Property Rights Disputes.
    3. Action on Incomplete Requests.
    4. Administrative Completeness Reviews.
    5. Notification Requirements for Lands Listed in 30 CFR 
761.11(a).
    B. Paragraph (a): To which agency must you submit a request for 
a VER determination?
    C. May a request for a VER determination be submitted separately 
from a permit application?
    D. Paragraph (b): What information must you include in a request 
for a VER determination?
    E. Paragraph (c): How will the agency initially review my 
request?
    F. Paragraph (d): What notice and comment requirements apply to 
the VER determination process?
    G. Paragraph (e): How will a decision be made?
    H. Paragraph (f): How may a VER determination be appealed?
    I. Paragraph (g): To what extent and in what manner must records 
related to the VER determination process be made available to the 
public?
    J. May the regulatory authority reconsider VER determinations 
during review of a subsequent permit application?
XXII. How does new 30 CFR 761.17, which concerns regulatory 
authority obligations at the time of permit application review, 
differ from its predecessor provisions in former 30 CFR 761.12?
XXIII. How and why are we revising Part 762, which contains criteria 
for the designation of lands as unsuitable for surface coal mining 
operations?
XXIV. Section 772.12: What are the requirements for coal exploration 
on lands designated unsuitable for surface coal mining operations?
XXV. Technical Amendments to Parts 773, 778, 780, and 784.
XXVI. What effect will this rule have in Federal program States and 
on Indian lands?
XXVII. How will this rule affect State programs?
XXVIII. How does this rule impact information collection 
requirements?
XXIX. Procedural Matters.
    A. Executive Order 12866: Regulatory Planning and Review.
    B. Regulatory Flexibility Act.

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    C. Small Business Regulatory Enforcement Fairness Act.
    D. Unfunded Mandates Reform Act of 1995.
    E. Executive Order 12630: Takings.
    F. Executive Order 13132: Federalism.
    G. Executive Order 12988: Civil Justice Reform.
    H. Paperwork Reduction Act.
    I. National Environmental Policy Act of 1969 and Record of 
Decision.

I. How Did We Obtain and Consider Public Input?

    This final rule is based on a proposed rule that we published for 
public review and comment on January 31, 1997 (62 FR 4836). We also 
posted the proposed rule and associated documents on our home page on 
the Internet. In response to requests from the public, we held public 
hearings on the proposed rule in Athens, Ohio; Billings, Montana; 
Washington, Pennsylvania; and Whitesburg, Kentucky. The comment period 
was originally scheduled to close June 2, 1997, but, in response to 
several requests, we extended the deadline until August 1, 1997. See 62 
FR 29314, May 30, 1997.
    In addition to the testimony offered at the four hearings, we 
received approximately 75 written comments specific to the proposed 
rule: 31 from private citizens, 28 from companies and associations 
affiliated with the mining industry, 4 from environmental 
organizations, and 11 from Federal, State, and local governmental 
entities and associations. In developing the final rule, we considered 
all comments that were germane to the proposed rule. In this preamble, 
we discuss how we revised the proposed rule in response to comments. We 
also explain the disposition of those comments that did not result in a 
change in the proposed rule.

II. What General Comments Did We Receive on the Proposed Rule?

    Many comments from private citizens expressed general opposition to 
mining on public lands, especially in national parks and national 
forests. Since SMCRA allows mining on these lands under certain 
circumstances, we have no authority to adopt a regulation that would 
impose an absolute prohibition on mining on these lands.
    One commenter representing several States disputed the need for any 
rulemaking, arguing that the present system is working well and is 
consistent with the principles of State primacy under SMCRA. However, 
some commenters representing individual State regulatory authorities 
expressed support for the clarity and additional specificity that the 
rule would provide. Furthermore, two Federal district courts have 
ordered OSM to take steps to promulgate a final rule defining VER. 
Belville Mining Co. v. Lujan, No. C-1-89-790 (S.D. Ohio 1991) and 
Helmick v. U.S., No. 95-0115 (N.D. W.Va. 1997).
    Finally, we believe that a Federal definition is necessary to 
establish a reference point for State definitions and to ensure that 
the lands listed in section 522(e) of the Act are protected as Congress 
intended. The good faith/all permits standard that we are adopting as 
part of the VER definition in this final rule will cause relatively 
little disruption to existing State regulatory programs. Twenty of the 
24 States with approved regulatory programs under section 503 of the 
Act already rely upon a good faith/all permits or all permits standard 
for VER.
    One commenter requested that the final rule and related documents 
consistently use the term ``type'' to refer to the distinction between 
surface and underground mining. Similarly, the commenter stated that 
the term ``method'' should refer only to the specific techniques 
employed for either surface or underground mining operations; e.g., 
area, contour or mountaintop removal for surface mining operations and 
longwall or room and pillar for underground mining operations. We have 
endeavored to apply these terms in the manner recommended, although 
``type'' may also mean ``method,'' depending upon context, deed 
nuances, and the vagaries of State property law.

III. How Does the Final Rule Differ Stylistically From the Proposed 
Rule?

    On June 1, 1998, President Clinton issued an Executive Memorandum 
requiring the use of plain language in all proposed and final 
rulemaking documents published after January 1, 1999. The memorandum 
provides the following description of plain language:

    Plain language requirements vary from one document to another, 
depending on the intended audience. Plain language documents have 
logical organization, easy-to-read design features, and use:
     Common, everyday words, except for necessary technical 
terms;
     ``you'' and other pronouns;
     the active voice, and
     short sentences.

    The President's memorandum includes an exception for final rules 
based upon proposed rules published before January 1, 1999. While that 
exception applies to this final rule, we have incorporated some plain 
language principles in this rule, as required by a memorandum dated 
June 10, 1998, from the Office of the Secretary of the Department of 
the Interior. Thus, the final rule and preamble use the pronouns 
``we,'' ``us,'' and ``our'' to refer to OSM, and the pronouns ``you'' 
and ``your'' to refer to a person who claims or seeks to obtain an 
exception or waiver authorized under 30 CFR 761.11 or section 522(e) of 
the Act. In all other cases, we specifically identify the person or 
agency to which the rule or preamble refers. Other changes include 
avoidance of the word ``shall.'' Instead, the final rule and preamble 
use ``must'' to indicate an obligation, ``will'' to identify a future 
event, and ``may not'' to convey a prohibition.
    We recognize that more could be done to comply more fully with 
plain language principles. However, further changes would require a 
wholesale revision of the entire regulation, which would delay 
considerably publication of a final rule. For this reason, we have 
deferred a more extensive plain language rewrite.

IV. In What Context Does the Term VER Appear in SMCRA?

    As summarized below, section 522(e) of SMCRA, 30 U.S.C. 1272(e), 
prohibits or restricts surface coal mining operations on certain lands 
after the date of SMCRA's enactment (August 3, 1977). However, the Act 
specifies that these prohibitions and restrictions are ``subject to 
valid existing rights.'' It further provides that these prohibitions 
and restrictions do not apply to operations in existence on the date of 
enactment.
    Section 522(e)(1) protects all lands within the boundaries of units 
of the National Park System; the National Wildlife Refuge System; the 
National System of Trails; the National Wilderness Preservation System; 
the Wild and Scenic Rivers System, including study rivers designated 
under section 5(a) of the Wild and Scenic Rivers Act; and National 
Recreation Areas designated by Act of Congress.
    Section 522(e)(2) prohibits surface coal mining operations on 
Federal lands within the boundaries of any national forest unless the 
Secretary finds that there are no significant recreational, timber, 
economic, or other resources that may be incompatible with such 
operations. If the Secretary makes this finding, the Act allows the 
approval of surface operations and impacts incident to an underground 
mine on any national forest lands. In addition, if the Secretary makes 
this finding, the Act allows approval of any type of surface coal 
mining operations on national forest lands west of the 100th meridian 
(except the Custer National Forest) that lack significant forest cover, 
provided

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the proposed operations comply with certain statutes.
    Section 522(e)(3) prohibits surface coal mining operations that 
would adversely impact publicly owned parks and properties listed on 
the National Register of Historic Places. However, this paragraph of 
the Act provides a waiver for surface coal mining operations that 
receive joint approval from the regulatory authority and the agency 
with jurisdiction over the park or place.
    Section 522(e)(4) prohibits surface coal mining operations within 
100 feet of the outside right-of-way line of any public road, but it 
provides a mechanism and criteria for approval of exceptions from this 
prohibition. It also exempts mine access and haulage roads at the point 
of intersection with a public road.
    Section 522(e)(5) prohibits surface coal mining operations within 
100 feet of a cemetery or within 300 feet of a public building, school, 
church, community or institutional building, or public park. This 
paragraph also prohibits operations within 300 feet of an occupied 
dwelling, but it allows the owner of the dwelling to waive the 
prohibition.
    The term VER also appears in section 601(d) of SMCRA, which 
pertains to the designation of Federal lands as unsuitable for mining 
operations for minerals or materials other than coal. Specifically, 
this paragraph of the Act provides that ``[v]alid existing rights shall 
be preserved and not affected by such designation.''
    SMCRA does not define or explain the meaning of VER in the context 
of either section 522(e) or section 601. Today's rulemaking addresses 
VER only in the context of section 522(e).

V. What Is the Legislative History of the VER Provision in Section 
522(e)?

    The legislative history of section 522(e) in general and the VER 
exception in particular is sparse. In this portion of the preamble, we 
either quote or summarize all the legislative history that we found 
pertinent to the rationale for the final rule and disposition of 
comments. The other portions of this preamble discuss how we and others 
interpret the legislative history, and how these interpretations 
influenced the decision-making process.

Language in Previous Versions of SMCRA

    The phrase ``subject to valid existing rights'' and the current 
outline of section 522(e) first appear in the conference committee 
version of the 1974 precursor to SMCRA. Prior to the conference 
committee changes, the Senate bill (S. 425) excluded only existing 
operations from the prohibitions of what is now section 522(e). The 
House bill (H.R. 11500) contained an exception only for certain 
situations in which a person had made substantial legal and financial 
commitments in an existing mine before September 1, 1973--and that 
exception applied only to the lands listed in what is now paragraphs 
(e)(1) and (e)(2) of section 522 of the Act.

Committee Reports

    The 1977 conference committee report on the legislation that became 
SMCRA does not address VER. See H.R. Conf. Rep. No. 95-493, at 110-11 
(1977). Thus, the most authoritative source in the legislative history 
of SMCRA does not clarify congressional intent with respect to the 
meaning of VER under section 522(e).
    The 1974 conference committee report explains that the addition of 
the phrase ``subject to valid existing rights'' to section 522(e) was 
intended to address surface coal mining operations on national forest 
lands. H.R. Conf. Rep. No. 93-1522, at 85 (1974). Subsequent committee 
reports on succeeding versions of SMCRA contain either substantively 
identical or abbreviated discussions of this topic without further 
elucidation on the meaning of VER under section 522(e). See S. Rep. No. 
94-28, at 220 (1975); H.R. Conf. Rep. No. 94-189, at 85 (1975); H.R. 
Rep. No. 94-896, at 47-48 (1976); H.R. Rep. No. 94-1445, at 47 (1976); 
H.R. Rep. No. 95-218, at 95 (1977); and S. Rep. No. 95-128, at 94-95 
(1977). Therefore, for purposes of providing background for this 
rulemaking, we will quote only the discussions from the most recent 
committee reports, which pertain to the legislation that the President 
ultimately signed into law.
    The committee report on H.R. 2, the House version of the 
legislation that ultimately became SMCRA, contains the following 
passage:

    The language ``subject to valid existing rights'' in section 
522(e) is intended, however, to make clear that the prohibition of 
strip mining on the national forests is subject to previous court 
interpretations of valid existing rights. For example, in West 
Virginia's Monongahela National Forest, strip mining of privately 
owned coal underlying federally owned surface has been prohibited as 
a result of United States v. Polino, [131] F. Supp. [772] (1955). In 
this case the court held that ``stripping was not authorized by 
mineral reservation in a deed executed before the practice was 
adopted in the county where the land lies, unless the contract 
expressly grants stripping rights by use of direct or clearly 
equivalent words. The party claiming such rights must show usage or 
custom at the time and place where the contract is to be executed 
and must show that such rights were contemplated by the parties.'' 
The phrase ``subject to valid existing rights'' is thus in no way 
intended to open up national forest lands to strip mining where 
previous legal precedents have prohibited stripping.

H.R. Rep. No. 95-218, at 95 (1977).

    The committee report on S. 7, the Senate version of the legislation 
that ultimately became SMCRA, contains a similar discussion:

    All of these bans listed in subsection (e) are subject to valid 
existing rights. This language is intended to make clear that the 
prohibition of strip mining on the national forests is subject to 
previous state court interpretation of valid existing rights. The 
language of 422(e) [now 522(e)] is in no way intended to affect or 
abrogate any previous State court decisions. The party claiming such 
rights must show usage or custom at the time and place where the 
contract is to be executed and must show that such rights were 
contemplated by the parties. The phrase ``subject to valid existing 
rights'' is thus in no way intended to open up national forest lands 
to strip mining where previous legal precedents have prohibited 
stripping.

S. Rep. No. 95-128, at 94-95 (1977).

    Congressman Manuel Lujan, Jr. attached the following statement of 
separate views to the House committee report:

    Much has been said about the problem presented by the language 
contained in Sec. 522(e) of H.R. 2 * * *.
    As the Committee Report indicates, this section's limitation 
that the prohibition is ``subject to valid existing rights'' is not 
intended to open up national forest lands to strip mining when 
previous legal precedents have prohibited stripping. Naturally, the 
bill's language is also subject to the corollary that it is not 
intended to preclude mining where the owner of the mineral has the 
legal right to extract the coal by surface mining method[s].
    Concerns in this area are not merely hypothetical. For example, 
in the establishment of the national forest system in many areas of 
the country, grantors sold the land to the United States government 
for inclusion in a national forest, but reserve[d] mineral rights 
for themselves and deeds of conveyance for which the United States 
was a party. The language of Sec. 522(e) itself, the thrust of the 
report discussion and common sense all dictate that the only logical 
interpretation of Sec. 522(e) is that enactment of this legislation 
does not disrupt the relationship between the owner of the coal and 
the Federal government.
    I believe, therefore, that it would be contrary to the intention 
of the Act, and a misuse of the Act, for the Forest Service (or 
anyone else) to argue that [SMCRA] somehow modifies the relationship 
between the owner of the surface and subsurface rights. Clearly, 
alienation by sale, assignment, gift, or inheritance of the property 
right of the coal is not affected by the Act nor is the legal right

[[Page 70769]]

to mine the coal in any way modified if such right existed prior to 
enactment of the Act.

H.R. Rep. No. 95-218, at 189 (1977).

    Part VII.C.5. of this preamble contains a discussion of the 
significance of Congressman Lujan's statements.

Floor Debate (Congressional Record)

    In remarks made on the House floor during debate on the 1975 
precursor to SMCRA, Congressman John Dingell questioned the need for 
the phrase ``subject to valid existing rights,'' stating that ``it is 
extra verbiage and really has no meaning.'' 121 Cong. Rec. H7048 (March 
18, 1975) (statement of Rep. Dingell). He offered an amendment that 
would have removed this phrase and replaced it with a provision 
allowing surface coal mining operations in national forests and 
grasslands whenever the deeds conveying lands to the United States 
reserved the coal and specifically provided for the use of surface 
mining methods. The House rejected the amendment. 121 Cong. Rec. H7050 
(March 18, 1975).
    During floor debate on the same bill, Congressman Delbert Latta 
asked ``whether this legislation affects in any way the rights of an 
owner of mineral rights situated below land owned by the Federal 
Government.'' 121 Cong. Rec. H6679 (March 14, 1975). In response, 
Congressman Morris Udall cited section 714 of SMCRA, which he 
characterized as requiring surface owner consent before any underlying 
Federal coal may be mined. Congressmen Latta, Udall, and others then 
engaged in the following exchange:

    Mr. LATTA. That takes care of the Federal Government when it 
owns the mineral rights, but I have reference to the opposite 
situation where the surface is owned by the Federal Government, but 
the mineral rights have been retained by a private owner.
    Mr. UDALL. We did not deal with that problem. I do not know of 
any instance in which it would arise or be affected.
    Mr. LATTA. It is not covered by this bill.
    Mr. OTTINGER. Mr. Speaker, if the gentleman would yield, why 
would not the rights of a surface owner be protected where the 
mineral rights were not owned by the Federal Government, but were 
owned privately?
    Mr. UDALL. The problem we dealt with was the situation in the 
instance where private interests owned the surface but the Federal 
Government owned the coal.
* * * * *
    Mr. OTTINGER. If the gentleman will yield further, I think there 
are situations where private owners own both the surface and the 
coal, and there is no protection provided.
    Mr. UDALL. In that case the whole thrust of the bill is to 
regulate how to mine coal, whatever the ownership is.
* * * * *
    Mr. LATTA. * * * [I]f I understood what you said, this bill does 
not deal with the situation propounded in my question, meaning where 
a private citizen has sold the surface to the Federal Government and 
has retained the mineral rights. This bill would not in any way 
affect the mineral rights of that private citizen?
    Mr. UDALL. This is a bill that deals with how one mines coal in 
that situation and every other situation, but we do not attempt to 
change property rights in the situation the gentleman talks about 
and thus the mineral rights are not affected.

121 Cong. Rec. H6679 (1975).

    Part VII.C.5. of this preamble includes a discussion of the 
significance of this colloquy.
    Some commenters referred to a floor debate on a proposed amendment 
to section 601 of H.R. 2, the House bill that eventually became SMCRA. 
(Section 601 provides for the designation of Federal lands as 
unsuitable for the mining of minerals and materials other than coal.) 
Congressman Teno Roncalio proposed an amendment to delete the sentence 
in section 601(d) that reads, ``[v]alid existing rights shall be 
preserved and not affected by such designation.'' Congressman Udall 
opposed the amendment ``because it takes from the bill a statement that 
valid legal rights should be preserved. I do not think we should do 
that without paying compensation under the fifth amendment [sic].'' 123 
Cong. Rec. H12878 (1977) (April 29, 1977) (statement of Rep. Udall). 
The House rejected the amendment and retained the language at issue. 
However, as discussed in parts VII.C.4. and VIII of this preamble, we 
now find this colloquy to be of little relevance to the meaning of VER 
under section 522(e).

VI. How Did We Previously Define or Attempt To Define VER?

The 1978 Proposed Rule

    In our first attempt to define VER after the enactment of SMCRA, we 
proposed to adopt different VER standards for different categories of 
lands. For lands protected under paragraphs (e)(1) and (e)(2) of 
section 522, we proposed a form of the ownership and authority 
standard. Specifically, the proposed rule would have defined VER as:

    Those property rights in existence on August 3, 1977, that were 
created by a legally binding conveyance, lease, deed, contract, or 
other document which expressly authorizes the applicant to produce 
coal by surface coal mining operations and the exercise of such 
rights cannot, under applicable State or Federal law, be conditioned 
or denied in the manner provided in [30 CFR Part 761].

    For lands protected under paragraphs (e)(3) through (e)(5) of 
section 522, we proposed to limit VER to those lands for which a person 
had obtained all State and Federal permits needed to conduct surface 
coal mining operations as of August 3, 1977. The preamble to the 
proposed rule indicates that we presumed that the first standard would 
apply only to Federal lands, while the second standard would apply only 
to State and privately owned lands. See 41 FR 41662, 41686, 41826, 
September 18, 1978.

The 1979 Final Rule

    After evaluating the comments received on the 1978 proposed rule, 
we decided that the proposed ``dual definition was not really workable 
because it did not distinctly separate Federal lands from private 
lands.'' 44 FR 14993, March 13, 1979. Section 522(e)(1) includes both 
Federal and non-Federal lands, and paragraphs (e)(3) through (e)(5) of 
that section apply regardless of land ownership. Except for paragraph 
(e)(2), Congress did not establish Federal versus non-Federal ownership 
as a criterion for protection under section 522(e). Nor did Congress 
prescribe different levels of protection under section 522(e) for 
Federal and non-Federal lands.
    Accordingly, the final rule promulgated in 1979 contains a single 
definition of VER that applies to all lands listed in section 522(e). 
In developing this definition, we relied upon (1) a belief that 
Congress created the VER exception as a means of avoiding compensable 
takings of private property and (2) the principle that the extent to 
which the Federal government and States may prohibit or restrict the 
exercise of private property rights without providing compensation is 
determined by case law established pursuant to the Fifth and Fourteenth 
Amendments to the Constitution. Specifically, we ``endeavored to 
determine the point at which payment would be required because a taking 
had occurred, then to define `valid existing rights' in those terms, 
i.e., those rights which cannot be affected without paying 
compensation.'' 44 FR 14992, March 13, 1979, col 1.
    The definition provided that, except for haul roads, VER included 
only those property rights in existence on August 3, 1977, the owners 
of which either had obtained all necessary permits for the proposed 
surface coal mining operation on or before August 3, 1977 (the ``all 
permits'' standard), or could demonstrate that the coal for which the 
exception was sought was both needed for and immediately adjacent to a 
surface coal mining operation in existence on August 3, 1977 (the

[[Page 70770]]

``needed for and adjacent'' standard). See 44 FR 14902, 15342, March 
13, 1979.

Litigation Concerning the 1979 Final Rule

    The mining industry, the State of Illinois, the National Wildlife 
Federation, and assorted environmental organizations all challenged the 
validity of the 1979 definition. Industry and Illinois alleged that 
this definition entailed a taking of property in violation of the Fifth 
and Fourteenth Amendments. Because the plaintiffs presented no evidence 
that the definition had caused actual loss or harm to a specific party, 
the court declined to rule on the constitutionality of the definition 
on the basis of a hypothetical claim. However, the court asserted that 
a person who applies for all permits, but fails to receive one or more 
through government delay, engenders the same investments and 
expectations as a person who has obtained all permits. Specifically, 
the court stated that ``a good faith attempt to have obtained all 
permits before the August 3, 1977 cut-off date should suffice for 
meeting the all permits test.'' In re Permanent Surface Mining 
Regulation Litigation I, 14 Env't Rep. Cas. (BNA) 1083, 1091 (D.D.C., 
Feb. 26, 1980), (``PSMRL I, Round I'').
    The industry plaintiffs appealed those portions of the district 
court's decision in PSMRL I, Round I that were adverse to their 
interests. However, the U.S. Court of Appeals for the Federal Circuit 
remanded the appeal after the government informed the court that it was 
reconsidering the 1979 definition. Thus, the court never reached a 
decision on the merits of the appeal. The remand order specified that 
the judgment of the District Court could not be considered final. See 
In re Permanent Surface Mining Regulation Litigation, No. 80-1810, 
Order of Remand (D.C. Cir., Feb. 1, 1983).

The 1980 Suspension Notice

    To comply with the decision in PSMRL I, Round I, 14 Env't Rep. Cas. 
(BNA) 1091 (1980), which partially remanded the all permits standard, 
we suspended the 1979 definition of VER to the extent that it required 
that all permits have been obtained before August 3, 1977. See 45 FR 
51547-48, August 4, 1980. The suspension document stated that, pending 
further rulemaking, we would interpret the definition as including the 
court's suggestion that a good faith effort to obtain all permits by 
that date should suffice to establish VER. This standard is known as 
the ``good faith/all permits'' standard.

The 1982 Proposed Rule

    On June 10, 1982 (47 FR 25278), we published a proposed rule 
setting out six options for revising the definition of VER. These 
options included the good faith/all permits standard, a mineral rights 
ownership standard, a mineral rights ownership plus right to mine by 
the method intended standard (the ``ownership and authority'' 
standard), and three variations on the latter two standards. Since the 
proposed standards all attempted to establish a clearly defined 
``bright-line'' test for VER, they became known as ``mechanical 
tests.''

The 1983 Final Rule

    Commenters criticized each option in the 1982 proposed rule as 
either too broad or too narrow, and many argued that one or more of the 
proposed options would result in a taking of property without just 
compensation in violation of the Fifth and Fourteenth Amendments to the 
Constitution. Because the Supreme Court has consistently declined to 
prescribe set formulas for determining when a taking will occur, we 
concluded that any mechanical test likely would be either over-
inclusive or under-inclusive of all potential takings that might result 
from the section 522(e) prohibitions. Therefore, on September 14, 1983 
(48 FR 41314), we adopted a definition of VER which provided, in part, 
that a person has VER if a prohibition on surface coal mining 
operations would result in a compensable taking of that person's 
property interests under the Fifth and Fourteenth Amendments to the 
Constitution. This standard is known as the ``takings'' standard.
    The revised definition also (1) removed the requirement for a 
demonstration of a property right to the coal on August 3, 1977, (2) 
defined the ``needed for'' aspect of the needed for and adjacent 
standard, and (3) added a provision (sometimes referred to as 
``continually created VER'') to establish VER standards for lands that 
come under the protection of section 522(e) after August 3, 1977. This 
situation would arise, for example, when a park is created or expanded 
or a protected structure is built after that date.

Litigation Concerning the 1983 Final Rule

    The mining industry, the National Wildlife Federation, and assorted 
environmental organizations all challenged the validity of the 1983 
definition. The U.S. District Court for the District of Columbia 
subsequently remanded most of that definition on procedural grounds. 
The court held that the takings standard represented such a significant 
departure from the options presented in the 1982 proposed rule that a 
new notice and comment period was necessary to comply with the public 
participation requirements of the Administrative Procedure Act, 5 
U.S.C. 553. See In re Permanent Surface Mining Regulation Litigation 
II, Round III--Valid Existing Rights, 22 Env't Rep. Cas. (BNA) 1557, 
1564 (D.D.C. 1985) (``PSMRL II, Round III--VER''). The court also held 
that the proposed rule failed to provide adequate notice that it would 
expand the needed for and adjacent standard to include properties 
acquired after the date of enactment of SMCRA (August 3, 1977). 
Accordingly, the court remanded paragraphs (a) and (d)(2) of the 
definition, which relied upon the takings standard to determine VER, 
and the revised needed for and adjacent standard in paragraph (c) of 
the definition to the Secretary for proper notice and comment.

The 1986 Suspension Notice

    In response to the remand order in PSMRL II, Round III--VER, 22 
Env't Rep. Cas. (BNA) at 1564 (1985), we suspended paragraphs (a) and 
(c) of the 1983 definition of VER on November 20, 1986 (51 FR 41952, 
41961). These paragraphs contained the takings standard and the revised 
needed for and adjacent standard. We also suspended paragraph (d)(2) of 
the definition to the extent that it relied upon the takings standard. 
As discussed at 51 FR 41954-55, this action effectively reinstated the 
1980 good faith/all permits standard and the 1979 needed for and 
adjacent standard.
    The preamble to the suspension notice stated that, with two 
exceptions, we would use the VER definition in the applicable State or 
Federal regulatory program when making VER determinations. As discussed 
at 51 FR 41955, one of these exceptions occurs when a State definition 
relies upon an all permits standard. In that case, we would apply the 
State standard as if it included a good faith component. The second 
exception involves State programs that include a takings standard for 
VER. In those situations, the preamble stated that, pending 
promulgation of a new Federal definition of VER, we would not process 
requests for VER determinations involving lands within units of the 
National Park System.

The 1988 Proposed Rule

    On December 27, 1988 (53 FR 52374), we proposed the good faith/all 
permits

[[Page 70771]]

standard and the ownership and authority standard as options for a 
regulatory definition of VER. Under the ownership and authority 
standard, a person could establish VER by demonstrating both a property 
right to the coal and the right to mine it by the method intended, as 
determined by State law. After evaluating the comments received, we 
withdrew the entire proposed rule for further study on July 21, 1989 
(54 FR 30557).

The 1990 VER Symposium

    On April 3-4, 1990, we and the University of Kentucky College of 
Law, in cooperation with the American Bar Association, cosponsored a 
national symposium on the meaning of VER under section 522(e) of SMCRA. 
Volume 5, Number 3 of the Journal of Mineral Law and Policy contains 
the proceedings of this symposium. The participants provided extensive 
analyses of takings jurisprudence and case law related to VER, but they 
did not reach a consensus on how to define VER. The arguments presented 
ranged from the theory that we could prohibit all mining in section 
522(e) areas as a public nuisance or noxious use to the position that 
Congress intended the VER exception to operate as complete protection 
for all property rights in existence on August 3, 1977.

The Belville Litigation

    In 1990, the Belville Mining Company, an Ohio mining firm, filed 
suit against the Secretary of the Interior alleging that he had, among 
other things:
     Failed to perform a mandatory duty to promulgate the 
definition of VER needed to implement section 522(e);
     In lieu of regulations, issued various statements and 
directives on VER, including the policy set forth in the November 20, 
1986 suspension notice, without notice and comment in violation of the 
Administrative Procedure Act; and
     Made VER determinations relying on State regulations 
identical to an invalidated Federal regulation.
    See Belville Mining Co. v. Lujan, No. C-1-89-790 (S.D. Ohio 1991), 
modified September 21, 1992 (``Belville I'').
    In a July 22, 1991, decision, the court in Belville I ordered the 
Secretary to begin proceedings to promulgate a final rule defining VER; 
enjoined him from enforcing or applying the November 20, 1986 
suspension notice or any temporary directive that extends the policy of 
the suspension notice; and directed him to immediately begin 
proceedings to disapprove State program definitions of VER that rely 
upon the all permits standard. On September 21, 1992, pursuant to the 
Government's motion for reconsideration, the court narrowed the portion 
of its ruling concerning disapproval of State program definitions to 
require only the disapproval of the Ohio program definition of VER 
insofar as that definition affects Belville and its requests for VER 
determinations. In doing so, the court accepted the Government's 
argument that Federal remedy law prohibits the imposition of injunctive 
remedies that are beyond the scope of the plaintiff's individual 
injuries and related requests for VER determinations. Consequently, we 
interpreted the decision barring use of the 1986 policy as applying 
only to Ohio. The final rule that we are adopting today effectively 
renders both the Belville I decision and the 1986 suspension notice 
moot with respect to the applicable definition of VER.

The 1991 Proposed Rule

    On July 18, 1991, we proposed to revise the definition of VER by 
reinstating the takings standard, the good faith/all permits standard, 
and the 1979 version of the needed for and adjacent standard. In 
addition, we proposed to eliminate the separate standards for VER for 
lands that come under the protection of section 522(e) after August 3, 
1977. Instead, the proposed rule modified the other VER standards in 
the definition to incorporate the concept that VER determinations 
should reflect the circumstances that existed when the land came under 
the protection of section 522(e), which may be later than August 3, 
1977.

The Energy Policy Act

    On October 24, 1992, the President signed the Energy Policy Act of 
1992 (Pub. L. 102-486, 206 Stat. 2776) (``EPAct'') into law. Section 
2504(b) of that law required adherence to the VER policy in the 
November 20, 1986 suspension notice (51 FR 41952) for one year after 
the date of enactment. That provision had the effect of staying 
implementation of the July 1991 Belville I decision, as modified in 
September 1992, and halting publication of a new final rule defining 
VER based upon the 1991 proposed rule.

Appropriations Act Moratoriums

    The EPAct provision expired on October 24, 1993. However, at the 
Department's request, the appropriations acts for the Department of the 
Interior and related agencies for fiscal years 1994 and 1995 each 
included language that effectively placed a moratorium on adoption of a 
new or revised Federal VER definition or disapproval of existing State 
program definitions of VER. The last moratorium (section 111 of Pub. L. 
103-332) lapsed on October 1, 1995. Congress did not include similar 
language in any legislation for fiscal year 1996 or subsequent fiscal 
years.

The 1997 Proposed Rule

    After evaluating the comments received on the 1991 proposed rule 
and taking intervening events into consideration, on January 31, 1997 
(62 FR 4836), we withdrew the 1991 proposal and published a new, 
extensively revised proposed rule concerning the definition of VER and 
related issues. This proposal forms the basis for the final rule being 
published today.

VII. Section 761.5: How Are We Defining VER in This Final Rule?

A. Introductory Language.

    The definition of VER that we are adopting today as part of 30 CFR 
761.5 describes VER as a set of circumstances under which a person may, 
subject to regulatory authority approval, conduct surface coal mining 
operations that section 522(e) of the Act and 30 CFR 761.11 would 
otherwise prohibit. This language establishes the conceptual framework 
within which the provisions of paragraphs (a) through (c) of the 
definition must be applied.
    In a change from the proposed rule, we have added the phrase 
``subject to regulatory authority approval'' to emphasize that a person 
with VER is not automatically entitled to conduct surface coal mining 
operations on protected lands. One commenter appeared to believe 
otherwise. For the same reason, we have added a sentence to the 
introductory portion of the definition to clarify that, even if a 
person has VER and thus is exempt from the prohibitions and limitations 
of section 522(e) and 30 CFR 761.11, surface coal mining operations on 
these lands are subject to all other pertinent requirements of the Act 
and the applicable regulatory program. The VER exception does not 
entitle a person to an exemption from any permitting requirements or 
performance standards.
    One commenter charged that by defining VER as a condition rather 
than as a right, the proposed rule altered the essence of VER from a 
recognition of property rights to a regulatory standard or condition 
that a surface coal mining operation must meet prior to mining. We have 
made a few essentially editorial changes in response to this

[[Page 70772]]

comment to clarify that VER means a set of circumstances (rather than 
``conditions'') under which a person is exempt from the prohibitions 
and restrictions of section 522(e) and 30 CFR 761.11 and may seek 
approval from the regulatory authority to conduct surface coal mining 
operations on those lands in accordance with standard regulatory 
program requirements.
    While property rights are an element of some of the standards for 
VER, we do not agree with the commenter's claim that VER must be 
defined solely in terms of property rights. Congress did not define 
VER, and the legislative history of section 522(e) emphasizes that, 
with certain exceptions, Congress intended to prohibit new surface coal 
mining operations on the lands listed in that section. See, for 
example, S. Rep. No. 95-128, at 55 (1977). We believe that these facts 
argue against adoption of a rule that defines VER solely in terms of 
property rights. Except for unleased Federally owned coal, such a rule 
would present little or no impediment to surface coal mining operations 
on the lands listed in section 522(e) of the Act. Thus, it would offer 
little protection to those lands beyond the protection that the 
permitting requirements and performance standards of the regulatory 
program afford to all lands.

B. Paragraph (a): Property Rights Demonstration.

    Paragraph (a) of the definition of VER in the final rule provides 
that a person claiming VER for any type or component of surface coal 
mining operations other than roads must demonstrate that a legally 
binding conveyance, lease, deed, contract, or other document vests that 
person with the right, as of the date that the land came under the 
protection of section 522(e) of the Act and 30 CFR 761.11, to conduct 
the type of surface coal mining operations intended. Interpretation of 
the documents relied upon to establish property rights must be based 
upon applicable State statutory or case law, unless otherwise provided 
under Federal law. If no applicable law exists, interpretation of these 
documents must reflect custom and generally accepted usage at the time 
and place that the documents came into existence.
    Under the final rule, a person need not necessarily provide a 
property rights demonstration for roads used or constructed as part of 
surface coal mining operations. Instead, a person may demonstrate VER 
for roads using any of the standards in paragraph (c) of the 
definition.
    The final rule is substantively identical to the corresponding 
provisions of the 1997 proposed rule, with one exception. We have added 
a clause clarifying that the provision requiring the use of State law 
to interpret documents does not apply if Federal law provides 
otherwise, as may be the case if the documents were issued under the 
Mineral Leasing Act or similar laws. In terms of organization, the 
final rule differs slightly from the proposed rule in that, for reasons 
of clarity and consistency with plain language principles, we have 
segregated the property rights demonstration into a separate paragraph, 
rather than including it in the same paragraph as the good faith/all 
permits and needed for and adjacent standards.
    The requirement for a property rights demonstration and the 
provisions concerning interpretation of documents are consistent with 
the legislative history of the Act, which indicates that Congress did 
not intend to enlarge or diminish property rights under State law. See 
H.R. Conf. Rep. No. 95-493, at 106 (1977); H.R. Rep. No. 95-218, at 95 
(1977); and S. Rep. No. 95-128, at 94-95 (1977). The legislative 
history frequently references United States v. Polino, 131 F. Supp. 772 
(N.D. W.Va. 1955), in which the court held that the right to use 
surface mining methods to recover privately owned coal underlying 
Federal lands within the Monongahela National Forest depends upon the 
language of the deed, the interpretation of which is a matter of State 
law.
    In addition, these provisions receive support from section 
510(b)(6)(C) of SMCRA, which provides that, in cases where the private 
mineral estate has been severed from the private surface estate, ``the 
surface-subsurface legal relationship shall be determined in accordance 
with State law,'' and that ``nothing in this Act shall be construed to 
authorize the regulatory authority to adjudicate property rights 
disputes.'' Language similar to the latter proviso also appears in the 
right-of-entry provisions of section 507(b)(9) of the Act.

History

    The requirement for a property rights demonstration has its origins 
in paragraphs (a)(1) and (c) of the March 13, 1979 VER definition. 
Paragraph (c) of that definition required that interpretation of the 
terms of the documents be based not only upon usage and custom, but 
also upon a showing that the parties to the document actually 
contemplated a right to conduct the same underground or surface mining 
activities for which the person claims VER. However, on November 27, 
1979, in connection with the PSMRL I, Round I litigation, we published 
a Federal Register notice stating that, as an alternative to the 
language of paragraph (c), ``existing State law may be applied to 
interpret whether the document relied upon establishes valid existing 
rights.'' 44 FR 67942, November 27, 1979. This alternative reflected 
the strong interest Congress expressed in deferring to State property 
law when interpreting documents relating to property interests. See the 
summary of and excerpts from the legislative history in Part V of this 
preamble.
    For reasons that the preamble does not explain, the revised VER 
definition that we adopted on September 14, 1983, did not contain a 
counterpart to the property rights demonstration required by paragraph 
(a)(1) of the 1979 definition. However, the 1983 rule retained a 
revised version of paragraph (c) of the 1979 definition, which 
concerned interpretation of documents. This provision, which was 
codified as paragraph (e) of the 1983 definition, required that 
interpretation of the terms of documents ``be based upon either 
applicable State statutory or case law concerning interpretation of 
documents conveying mineral rights or, where no applicable State law 
exists, upon the usage and custom at the time and place it came into 
existence.''
    On January 31, 1997 (62 FR 4836), we proposed to reinstate a 
revised version of the property rights demonstration required under 
paragraph (a)(1) of the 1979 definition. The proposed rule differed 
from the 1979 rule in three ways:
     It did not describe the person making the VER 
demonstration as the permit applicant, since the proposed rule also 
clarified that a person may request a VER determination without 
preparing and submitting a permit application.
     It provided that the requisite property rights must be 
vested as of the date that the land comes under the protection of 30 
CFR 761.11 or section 522(e), rather than as of August 3, 1977.
     It did not limit eligible property rights to the right to 
produce coal.
    The proposed rule incorporated the 1983 language pertaining to the 
interpretation of documents. However, we proposed to modify that 
language to eliminate its restriction to documents concerning mineral 
rights, since surface coal mining operations may involve property 
interests other than mineral rights. Also, unlike the 1983 definition, 
we proposed to require a property rights demonstration and apply the 
interpretation of documents provision to the needed for and adjacent 
standard.

[[Page 70773]]

(See the discussion of this standard in Part VII.D. of this preamble.)
    The final rule incorporates all elements of the proposed rule as 
described above. The following discussion summarizes the comments that 
we received on this aspect of the proposed rule and our disposition of 
those comments.

Summary and Disposition of Comments on the Proposed Rule

    One commenter requested that we revise the rule to clarify that the 
deed, lease, or other documents relied upon for the property rights 
demonstration must include explicit authority to conduct surface coal 
mining operations. In addition, the commenter asserted that these 
documents must explicitly sanction both the type of activity for which 
VER is claimed and the scope and location of that activity. We do not 
agree. In enacting the permitting requirements of sections 507(b)(9) 
and 510(b)(6) of SMCRA, Congress considered measures that would have 
required either explicit authority or surface owner consent in 
situations in which the surface and mineral estates are in separate 
ownership, but in the end decided to defer to State property law as 
interpreted by State courts. See S. Conf. Rep. No. 95-337 and H.R. 
Conf. Rep. No. 95-493, at 105-6 (1977); 123 Cong. Rec. H7587-88 (July 
21, 1977) (statement of Rep. Seiberling). See also, Congress' failure 
to adopt Secretary Andrus' recommendation that surface owner consent be 
required in all cases for the entire area covered by a permit 
application (H.R. Rep. No. 95-218, at 156 (1977)). There is no 
suggestion in the Act or its legislative history that Congress intended 
to accord lesser deference to State property law in determining VER 
under section 522(e). Indeed, the discussion of the Polino decision and 
related discussions concerning mining on national forest lands in the 
congressional reports quoted or referenced in Part V of this preamble 
indicate otherwise.
    Another commenter asserted that the property rights demonstration 
should be limited to discerning whether the person has a property right 
to conduct surface mining, not whether he or she has a right to use a 
specific method of surface mining. As summarized and excerpted in Part 
V of this preamble, the legislative history of the VER provision in 
section 522(e) clearly indicates that Congress did not intend for this 
provision to be construed in a manner that would allow surface coal 
mining operations of a nature that are not authorized under State 
property law. Therefore, the nature and detail of the property rights 
demonstration is dependent upon State property law concerning the 
interpretation of the language of deeds and other conveyances. It may 
be as simple as demonstrating the right to conduct surface coal mining 
operations in general, or, depending upon the wording of the conveyance 
and State property law, the requester may need to demonstrate that the 
method of surface coal mining operations meets the restrictions imposed 
by the conveyance or State law.
    Some commenters expressed concern that the definition could be 
interpreted as negating a VER determination each time an operation or 
permit experiences a change in ownership. We disagree. As discussed in 
Part IX of this preamble, State law, the applicable VER standard, and 
the terms of the instrument of conveyance govern the extent to which a 
transfer of property rights or a change in ownership of a permit or 
operation impact VER. In general, we view VER as transferable because, 
unless otherwise provided by State law, the property rights, permits, 
and operations that form the basis for VER determinations are 
transferable. Therefore, except as discussed in Part IX of this 
preamble, we anticipate that permit transfers and changes in ownership 
of operations and property rights subsequent to a VER determination 
would have no effect on VER or the validity of the VER determination.
    One commenter stated that, by requiring a property rights 
demonstration as part of the definition of VER, the proposed rule 
failed to recognize that mining entities may seek and obtain a permit 
for a surface coal mining operation before acquiring property rights 
for all lands within the permit area. We believe that the commenter's 
concern is misplaced. Under the final rule, there is no requirement 
that the same person make both the property rights demonstration 
required by paragraph (a) of the definition and the demonstration of 
compliance with the good faith/all permits or needed for and adjacent 
standard under paragraph (b) of the definition. In other words, under 
the final rule, the person who makes the property rights demonstration 
required by paragraph (a) of the definition need not be the same person 
as the one who demonstrates compliance with the requirements of the 
good faith/all permits or needed for and adjacent standards under 
paragraph (b) of the definition. However, each request must demonstrate 
compliance with both paragraphs (a) and (b) of the definition of VER. 
And the person holding the permits must obtain the necessary property 
rights before actually initiating surface coal mining operations on the 
land in question.
    Some commenters opposed the proposed rule to the extent that it 
provided that property rights must be vested as of the date that the 
land comes under the protection of the Act, rather than as of the date 
of enactment of SMCRA (August 3, 1977) as in the 1979 rule. The 
commenters argued that persons conducting surface coal mining 
operations after the enactment of SMCRA should have immediately 
procured all necessary property rights (e.g., purchased a 300-foot 
buffer around all planned minesites to preclude application of the 
prohibition on mining within 300 feet of an occupied dwelling) to avoid 
potential adverse impacts from the creation of new protected areas 
after August 3, 1977. We do not agree. The lease or purchase of a 
buffer zone would be impractical in cases where the owners of that land 
refuse to lease or sell. Moreover, we first adopted the concept of 
basing VER on the circumstances that existed when the land came under 
the protection of section 522(e) rather than on the circumstances that 
existed on August 3, 1977, as part of our 1983 definition of VER. As 
discussed in Parts VII.F. and XVI of this preamble, this concept 
withstood a legal challenge. In view of the existence of this concept 
as part of our rules for 16 years, and the expectations engendered by 
that rule, we are not persuaded by the commenters' argument.
    Some commenters opposed the proposed rule to the extent that it 
provided that property rights other than the right to produce coal are 
eligible for consideration. The commenters argued that this 
modification was arbitrary, an imprudent and unreasonable giveaway of 
surface rights, and inconsistent with congressional intent. They also 
argued that this aspect of the proposed rule had no basis under SMCRA, 
and that it was in violation of the definition of surface coal mining 
operations in section 701(28) of the Act. We disagree.
    The statutory definition of surface coal mining operations in 
section 701(28) includes ``activities conducted on the surface of lands 
in connection with a surface coal mine or * * * surface operations and 
surface impacts incident to an underground coal mine.'' In addition to 
``excavation for the purpose of obtaining coal,'' the definition 
expressly includes ``the cleaning, concentrating, or other processing 
or preparation'' of coal. And paragraph (B) of the definition includes 
``any adjacent land the use of which is

[[Page 70774]]

incidental to any such activities'' as well as roads, impoundments, 
ventilation shafts, refuse banks, overburden piles, ``repair areas, 
storage areas, processing areas, shipping areas and other areas upon 
are sited structures, facilities, or other property or materials on the 
surface, resulting from or incident to such activities [the activities 
listed in paragraph (A) of the definition].'' Clearly, the definition 
is not restricted to coal extraction activities or operations on lands 
from which coal is extracted. Therefore, our final rule properly 
acknowledges that, to the extent that a person has a right under State 
property law to conduct an activity or construct a facility included 
within the definition of surface coal mining operations on any lands 
listed in 30 CFR 761.11 and section 522(e), that person may seek to 
apply the VER exception to the proposed activity or facility even if 
there are no plans to extract coal from those lands.
    As discussed above, the legislative history of the right-of-entry 
provisions of sections 507(b)(9) and 510(b)(6)(C) of SMCRA and of the 
prohibitions of section 522(e) indicates that Congress wanted to 
respect and defer to State court interpretations of documents 
concerning property rights. Hence, we find it appropriate to defer to 
State property law to determine whether a person has a property right 
to use a particular parcel of land for any activity or facility 
included in the definition of surface coal mining operations, rather 
than arbitrarily limiting the scope of the property rights to which the 
VER exception applies to the right to extract coal.
    One commenter argued that the property rights demonstration must 
include explicit authority, by deed, lease or otherwise, to engage in 
non-extraction activities. He also asserted that the property rights 
documents must explicitly sanction both the type of activity for which 
VER is claimed and the scope and location of that activity. However, 
the commenter failed to provide a rationale for these statements. We 
see no reason or basis to establish differing standards for property 
rights demonstrations based on whether the land will be used for coal 
extraction or whether it will be used for other activities or 
facilities included within the definition of surface coal mining 
operations. Section 522(e) refers to surface coal mining operations 
without differentiating among the various activities and facilities 
included in the definition of that term. As discussed above and as 
excerpted in Part V of this preamble, the legislative history of SMCRA 
clearly indicates that Congress wanted to defer to State court 
interpretations of documents concerning property rights. Therefore, we 
see no basis or need to require that the documents in question 
expressly authorize use of the land for activities and facilities that 
are included in the definition of surface coal mining operations but 
that do not directly produce coal. A demonstration that State statutory 
or case law recognizes a person's right to use the land for those 
activities and facilities under the terms of the document used to 
establish property rights will suffice.
    Some commenters stated that the VER inquiry should begin and end 
with the property rights demonstration. They argue that the Act and its 
legislative history as well as various court decisions mandate adoption 
of an ownership and authority standard for VER. That is, if a person 
has the property right under State law to conduct surface coal mining 
operations, the person also has VER under section 522(e) of SMCRA. As 
discussed in detail in Part VII.C.5. of this preamble, we do not agree 
that the Act and its legislative history require the adoption of an 
ownership and authority standard for VER. For the reasons outlined in 
Parts VII.A. and VII.C. of this preamble, we do not view VER as 
coextensive or synonymous with property rights. Instead, we view 
property rights as a prerequisite for demonstrating VER under the good 
faith/all permits and needed for and adjacent standards.

C. Paragraph (b): Primary Standards for VER

    On January 31, 1997, we proposed to adopt two standards for VER for 
surface coal mining operations in general: the good faith/all permits 
standard (paragraph (a)(1) of the proposed definition) and the needed 
for and adjacent standard (paragraph (a)(2) of the proposed 
definition). The final rule revises these standards in response to 
comments and moves them to paragraph (b) of the definition. Part VII.C. 
of this preamble provides an explanation of the good faith/all permits 
standard and the disposition of related comments, while Part VII.D. of 
the preamble discusses the needed for and adjacent standard and related 
comments.
    Several commenters argued that standards for the VER exception in 
section 522(e), which identifies lands that Congress designated as 
unsuitable for surface coal mining operations, should be more 
restrictive than the standard for exceptions under section 522(a), 
which pertains to lands designated by petition. In the preamble to the 
1979 definition of VER, we concurred with this argument:

    OSM decided that the VER phrase must be distinguished from the 
definition of substantial legal and financial commitments. * * * The 
latter exemption applies to the petition process under Section 
522(a), whereas VER applies to the Congressional prohibitions of 
mining under Section 522(e). This distinction suggests that, in 
order to qualify for VER and thereby mine in the prohibited areas of 
Section 522(e), they must have a property interest in the mine that 
is even greater than the substantial legal and financial commitments 
needed to mine despite a designation by petition under Section 
522(a).

44 FR 14491-92, March 13, 1979.

    We repeated this position in the Greenwood Land and Mining Co. VER 
determinations at 46 FR 36758, July 15, 1981; 46 FR 50422, October 13, 
1981; and 47 FR 56191, December 15, 1982.
    However, we reversed our stance in the preamble to the 1983 VER 
definition, stating that ``the two concepts are separate and 
distinct.'' 48 FR 41316, September 14, 1983. Neither the language of 
the Act nor its legislative history supports the proposition that the 
lands designated by Congress under section 522(e) are more deserving of 
protection than the lands designated by petition under section 522(a). 
See S. Rep. No. 95-128, at 55 (1977), which states that:

    [C]ertain lands simply should not be subject to new surface coal 
mining operations. These include primarily and most emphatically 
those lands which cannot be reclaimed under the standards of this 
Act and the following areas dedicated by the Congress [in section 
522(e)].

    The phrase ``lands which cannot be reclaimed under the standards of 
this Act'' refers to petition-initiated mandatory designations under 
section 522(a)(2), while the remainder of this passage addresses lands 
designated by Congress under section 522(e). Clearly, the Senate 
committee found at least some lands designated under section 522(a) to 
be equal in importance to lands designated under section 522(e). 
Consequently, we find no basis for the assumption that VER under 
section 522(e) must be more restrictive than the standard for 
exemptions from petition-initiated designations under section 522(a).
    Another commenter asserts that restricting VER to the circumstances 
set out in the definition, especially the good faith/all permits 
standard, is inconsistent with our posture concerning the 1979 
definition. He notes that briefs filed on behalf of the Secretary in 
connection with assorted litigation concerning the definition of

[[Page 70775]]

VER interpret the preamble to the 1979 definition of VER as meaning 
that we did not intend to limit the scope of the VER exception to cases 
meeting the standards prescribed by the definition. According to the 
briefs, the definition identified only those situations in which a 
person unequivocally has VER. In all other cases, VER would be 
determined on a case-by-case basis.
    The briefs derive this characterization of the 1979 definition from 
the first and last sentences of the following preamble discussion:

    VER is a site-specific concept which can be fairly applied only 
by taking into account the particular circumstances of each permit 
applicant. OSM considered not defining VER, which would leave 
questions concerning VER to be answered by the States, the Secretary 
and the courts at later times. Without a definition, however, many 
interpretations of VER would be made and no doubt challenged by both 
operators and citizens; and once valid existing rights 
determinations are challenged, the permitting process would be 
delayed. OSM has therefore concluded that VER should be defined in 
order to achieve a measure of consistency in interpreting this 
important exemption. Under the final definition, VER must be applied 
on a case-by-case basis, except that there should be no question 
about the presence of VER where an applicant had all permits for the 
area as of August 3, 1977.

44 FR 14993 (March 13, 1979), col. 2-3.

    The supplemental final environmental impact statement prepared for 
a 1983 rulemaking describes the 1979 definition as follows:

    [T]he existing regulation, as modified by the court, provides 
that at a minimum, an operator should be determined to have VER if 
he had made a good faith effort to apply by August 3, 1977, for all 
permits necessary to mine in one area. OSM, however, has 
consistently maintained, in court and elsewhere, that in each case 
OSM would examine the totality of the circumstances before deciding 
on any VER application and that the regulatory standard is not the 
exclusive means of obtaining VER.

January 1983 Supplement to OSM-EIS-1, Vol. 1: Analysis, at IV-39 
(citations omitted).

    In 1985, the U.S. District Court for the District of Columbia 
acknowledged that the 1979 preamble could be read as suggesting the 
interpretation discussed above, but the court questioned both the 
accuracy of this interpretation, given the context of the sentence upon 
which it depends, and the validity of the premise that preamble 
language could supersede regulatory language:

    The government and the industry-intervenors argue that even 
under the old ``all-permits'' test promulgated in 1979, states had 
to make, in addition to the all-permits determination, an 
independent takings analysis on a case by case basis in order to 
determine whether VER existed. * * *
    To support their claim that the 1979 * * * rule included an 
independent takings test, in addition to the all-permits test, 
defendants and intervenors point to one sentence in the preamble to 
the 1979 rule. ``Under the final definition, VER must be applied on 
a case-by-case basis, except that there should be no question about 
the presence of VER where an applicant had all permits for the area 
as of August 3, 1977.'' 44 Fed. Reg. 14993 (1979). That sentence, to 
be sure, does suggest that there would be instances other than the 
all-permits situation in which a VER determination could be made. 
But the paragraph in which it is included, however, may also mean 
simply that the VER all-permits issue must of necessity be decided 
anew each time a person seeks VER. In any event, no such alternate 
method of obtaining VER was included in the final 1980 rule, see 30 
C.F.R. Sec. 761.5 (1980).

PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1561 (1985) 
(footnote omitted), emphasis in original.

    For purposes of this rulemaking, we find it unnecessary to 
determine whether the interpretation advanced in the briefs and 
environmental impact statement remains valid in view of the 
pronouncements in the court opinion. As discussed in Part VII.C. of 
this preamble, we have reevaluated the language of the Act and its 
legislative history. We have determined that adherence to the terms of 
the good faith/all permits and needed for and adjacent standards in 
paragraph (b) of the definition is the most reasonable interpretation 
of VER and will better satisfy congressional intent in enacting section 
522(e). And, in practice, to the extent allowed by the courts, we have 
always adhered to the definition established in the rules in making VER 
determinations, rather than relying upon the 1979 preamble to do 
otherwise.
    One commenter urged us to adopt more restrictive permitting and 
bonding requirements and performance standards for surface coal mining 
operations conducted under the VER exception, regardless of the 
standard that we selected for the definition of VER. We find no basis 
under SMCRA for doing so, since there is no indication that Congress 
intended stricter standards for surface coal mining operations on these 
lands. Furthermore, we believe that our existing requirements are 
sufficiently stringent to protect environmental resources to the extent 
that SMCRA authorizes or requires protection of those resources. Among 
other things, section 510(b)(2) of the Act and 30 CFR 773.15(c)(2) 
prohibit approval of a permit application unless the applicant 
affirmatively demonstrates that reclamation as required by the Act and 
the regulatory program can be accomplished under the reclamation plan 
in the permit application. In addition, section 509(a) of the Act and 
30 CFR 800.14(b) require that the permittee post a performance bond in 
an amount sufficient to assure completion of the reclamation plan if 
the regulatory authority has to complete the work in the event of 
forfeiture.
1. What Alternatives Did We Consider?
    In addition to the ``no action'' (no rulemaking) alternative, the 
environmental impact statement prepared for this rulemaking identified 
four major options for a primary standard for VER to accompany the 
needed for and adjacent standard:
     Good Faith/All Permits: Under this alternative, a person 
would have VER if, prior to the date the land came under the protection 
of 30 CFR 761.11 and section 522(e) of the Act, that person or a 
predecessor in interest had obtained, or made a good faith effort to 
obtain, all permits and other authorizations required to conduct 
surface coal mining operations.
     Good Faith/All Permits or Takings: Under this alternative, 
a person who could not meet the good faith/all permits standard would 
still have VER whenever a failure to recognize VER would be expected to 
result in a compensable taking of that person's property interests 
under the Fifth and Fourteenth Amendments to the U.S. Constitution.
     Ownership and Authority: Under this alternative, 
demonstration of both a property right to the coal and the right to 
mine it by the method intended would constitute VER.
     Bifurcated: Under this alternative, the ownership and 
authority standard would apply if the coal rights were severed from the 
surface estate before the land came under the protection of 30 CFR 
761.11 and section 522(e). Otherwise, the good faith/all permits 
standard would apply.
    In the proposed rule published on January 31, 1997, we announced 
our intention to adopt the good faith/all permits standard and the 
needed for and adjacent standard as the primary standards for VER. The 
draft environmental impact statement released on the same date 
identified the good faith/all permits standard as the preferred 
alternative to accompany the needed for and adjacent standard. In 
general, the environmental community and members of the public at large 
supported the good faith/all permits alternative, while industry 
advocated

[[Page 70776]]

the ownership and authority alternative. The few States that commented 
split among the good faith/all permits, takings, and bifurcated 
alternatives.
2. Why Did We Select the Good Faith/All Permits Standard?
    In enacting SMCRA, Congress did not provide clear or dispositive 
direction on the meaning or purpose of VER under section 522(e). There 
are credible supporting and opposing arguments for each alternative. 
Indeed, as summarized in Part VI of this preamble, at various times 
during the past two decades, we have either proposed or adopted all the 
listed alternatives, plus some variations on these alternatives.
    However, after carefully evaluating all comments received and 
conducting a rigorous analysis of the legislative history of section 
522(e), relevant litigation, and the potential environmental impacts of 
each alternative, we believe that the good faith/all permits standard 
best achieves protection of the lands listed in section 522(e) in a 
manner consistent with congressional intent at the time of SMCRA's 
enactment. At the same time, it protects the interests of those persons 
who had taken concrete steps to obtain regulatory approval for surface 
coal mining operations on lands listed in section 522(e) before those 
lands came under the protection of 30 CFR 761.11 and section 522(e). 
And, since 20 of the 24 approved State regulatory programs under SMCRA 
already rely upon either the good faith/all permits standard or the all 
permits standard, adoption of a good faith/all permits standard would 
cause the least disruption to existing State regulatory programs.
    The good faith/all permits standard is consistent with the 
legislative history of section 522(e), which indicates that Congress' 
purpose in enacting section 522(e) was to prevent new surface coal 
mining operations on the lands listed in that section, either to 
protect human health or safety, or because the environmental values and 
other features associated with those lands are generally incompatible 
with surface coal mining operations. The report prepared by the Senate 
Committee on Energy and Natural Resources on S. 7, the Senate version 
of the legislation that became SMCRA, states that:

    [T]he Committee has made a judgment that certain lands simply 
should not be subject to new surface coal mining operations. These 
include primarily and most emphatically those lands which cannot be 
reclaimed under the standards of this Act and the following areas 
dedicated by the Congress in trust for the recreation and enjoyment 
of the American people: lands within the National Park System, the 
National Wildlife Refuge System, the National Wilderness 
Preservation System, the Wild and Scenic Rivers System, National 
Recreation Areas, National Forests with certain exceptions, and 
areas which would adversely affect parks or [places listed on the] 
National Register of Historic Sites [sic].
    In addition, for reasons of public health and safety, surface 
coal mining will not be allowed within one hundred feet of a public 
road (except to provide access for a haul road), within 300 feet of 
an occupied building or within 500 feet of an active underground 
mine.
    Since mining has traditionally been accorded primary 
consideration as a land use there have been instances in which the 
potential for other equally or more desirable land uses has been 
destroyed. The provisions discussed in this section were 
specifically designed and incorporated in the bill in order to 
restore more balance to Federal land use decisions regarding mining.

S. Rep. No. 95-128, at 55 (1977).

    In addition, the report prepared by the House Committee on Interior 
and Insular Affairs on H.R. 2, the House version of the legislation 
that became SMCRA, states that:

    [T]he decision to bar surface mining in certain circumstances is 
better made by Congress itself. Thus section 522(e) provides that, 
subject to valid existing rights, no surface coal mining operations 
except those in existence on the date of enactment, shall be 
permitted on lands within the boundaries of units of certain Federal 
systems such as the national park system and national wildlife 
refuge system * * * or in other special circumstances * * *.

H.R. Rep. No. 95-218, at 95 (1977).
See also S. Rep. No. 95-128, at 94-95 (1977).

    The final environmental impact statement (EIS) for this rulemaking 
indicates that, compared with the other alternatives considered, the 
good faith/all permits standard is the most protective of the lands 
listed in section 522(e). According to the analysis in the EIS, 
adoption of the takings standard in place of the good faith/all permits 
standard would result in the mining of an estimated additional 2,855 
acres of protected lands between 1995 and 2015 (185 acres of section 
522(e)(1) lands, 1,686 acres of Federal lands in eastern national 
forests, and 984 acres of State park lands and buffer zones for State 
parks). Adoption of either the bifurcated alternative or the ownership 
and authority standard would result in the mining of an estimated 
additional 3,062 acres during that time frame (304 acres of section 
522(e)(1) lands, 1,761 acres of Federal lands in eastern national 
forests, and 997 acres of State park lands and buffer zones for State 
parks). See Table V-1 in Final Environmental Impact Statement OSM-EIS-
29 (July 1999), entitled ``Proposed Revisions to the Permanent Program 
Regulations Implementing Section 522(e) of the Surface Mining Control 
and Reclamation Act of 1977 and Proposed Rulemaking Clarifying the 
Applicability of Section 522(e) to Subsidence from Underground 
Mining.''
    As these numbers show, the model predicts that the additional 
disturbance would occur entirely on some of the lands for which the 
Senate Committee expressed the most concern; i.e., public parks and the 
lands protected by paragraphs (e)(1) and (e)(2) of section 522 of the 
Act. See S. Rep. No. 95-128, at 55 (1977). Therefore, we believe that 
adoption of the good faith/all permits standard for VER will best 
fulfil the intent of Congress, as expressed in that report, to prohibit 
new surface coal mining operations on the lands protected by section 
522(e), with certain exceptions.
    In addition, the economic analysis that the U.S. Geological Survey 
and we prepared for this rulemaking found that adoption of the good 
faith/all permits standard would have a net positive benefit to 
society, while adoption of the takings, ownership and authority, or 
bifurcated alternatives would have a net negative benefit to society. 
The analysis found negligible differences among the alternatives in 
terms of their economic impact. None of the alternatives would have a 
significant economic impact on the mining industry or the cost of 
producing and delivering coal, assuming that the prohibitions and 
restrictions of section 522(e) do not apply to subsidence from 
underground mining operations. See ``Final Economic Analysis: Proposed 
Revisions to the Permanent Program Regulations Implementing Section 
522(e) of the Surface Mining Control and Reclamation Act of 1977 and 
Proposed Rulemaking Clarifying the Applicability of Section 522(e) to 
Subsidence from Underground Mining'' (July 1999).
    The good faith/all permits standard in the final rule requires a 
demonstration that the person claiming VER, or a predecessor in 
interest, had obtained, or made a good faith effort to obtain, all 
permits and other authorizations required to conduct surface coal 
mining operations on the land before it came under the protection of 30 
CFR 761.11 and section 522(e) of the Act. Potentially necessary permits 
and authorizations include, but are not limited to, mining permits, 
National Pollutant Discharge Elimination System (NPDES) permits, U.S. 
Forest Service special use permits, Mine Safety and Health 
Administration authorizations, air quality plan approvals, local

[[Page 70777]]

government approvals, and (for some types of facilities) building 
permits and zoning changes.
    The proposed rule language referred only to ``State and Federal 
permits and other authorizations.'' Several commenters objected to this 
limitation, noting that other governmental entities such as counties 
may require permits for surface coal mining operations. The commenters 
argued that these permits should be included within the universe of all 
necessary permits and authorizations under the good faith/all permits 
standard. In response, we have deleted the limiting phrase ``State and 
Federal'' from the rule. We agree with the commenters that the good 
faith/all permits standard should consider all necessary permits and 
authorizations, not just State and Federal permits and authorizations.
    When permits and authorizations to operate do not establish 
boundaries for the mining operation, the geographical extent of the VER 
determination will be defined by the extent of surface coal mining 
operations contemplated by all parties at the time of issuance of or 
application for the permit or authorization. See the Greenwood Land and 
Mining Co. VER determinations at 46 FR 36758, July 15, 1981; 46 FR 
50422, October 13, 1981; and 47 FR 56191, December 15, 1982; and the 
Mower Lumber Co. VER determinations at 45 FR 52467, August 7, 1980 and 
45 FR 61798, September 17, 1980.
    Some commenters complained that the good faith/all permits standard 
is not truly a bright-line standard. They cited the potentially wide 
and continually changing array of permits and authorizations required 
for surface coal mining operations and the difficulty in identifying 
which permits were required at any particular time. We believe that 
persons requesting a VER determination and the agency responsible for 
making the VER determination will be able to use public records to 
reconstruct what permits and authorizations were required for a 
particular site on the date that the land comes under the protection of 
30 CFR 761.11 and section 522(e) of the Act. As demonstrated in the 
Greenwood and Mower determinations cited above, we have experienced 
little difficulty in identifying what permits are required at any 
particular time.
    One commenter expressed concern that the good faith/all permits 
standard does not take into consideration the fact that mining firms 
may not be legally required to apply for or obtain certain permits and 
authorizations, such as an air quality plan approval, before obtaining 
a SMCRA permit and initiating surface coal mining operations. We do not 
interpret the good faith/all permits standard as requiring submission 
of applications for all necessary permits and authorizations before the 
date that the land comes under the protection of 30 CFR 761.11 or 
section 522(e) of the Act. We believe that the language of this 
standard is sufficiently flexible to remedy the concern raised by the 
commenter. Specifically, we interpret this standard as providing the 
agency making the VER determination with the discretion to decide (1) 
which non-SMCRA permits and authorizations are needed to initiate 
surface coal mining operations, and (2) what constitutes a good faith 
effort to obtain all necessary permits and authorizations. In making 
these decisions, the agency should consider any permitting time lines 
or regulatory authority policies in place when the land came under the 
protection of 30 CFR 761.11 and section 522(e).
    A good faith effort may not necessarily require actual submission 
of applications for all required permits and authorizations in every 
instance. However, at a minimum, a good faith effort to obtain all 
necessary permits must include application for any required SMCRA 
permit. Because the SMCRA permit is the major permit needed for a 
surface coal mining operation, requiring submission of an application 
for this permit will ensure that the requester has made a significant 
effort to acquire the necessary permits. Therefore, we have added a 
sentence to paragraph (b)(1) of the definition specifying that, at a 
minimum, an application for any permit required under SMCRA must have 
been submitted before the land comes under the protection of 30 CFR 
761.11 and section 522(e).
    However, if, at the time that the land came under the protection of 
30 CFR 761.11 and section 522(e) of SMCRA, State and Federal law did 
not require a SMCRA permit for the type of operation planned, none is 
needed to establish VER for that type of operation under this standard. 
In that case, the person must have obtained, or made a good faith 
attempt to obtain, all other necessary permits and authorizations to 
operate from the appropriate agencies by that date.
    Revoked, expired or lapsed permits or authorizations do not qualify 
for consideration under the good faith/all permits standard because (1) 
they are no longer valid authorizations to operate and (2), in the case 
of an expired permit, the failure to renew or seek renewal in a timely 
fashion indicates a lack of a good faith effort to obtain all necessary 
permits and authorizations. One commenter stated that this restriction 
is incongruous with our position endorsing the transferability of VER 
and our statement in the preamble to the proposed rule that VER attach 
to the land rather than to a person or operation. The commenter 
expressed concern that this restriction would inhibit the remining and 
repermitting of bond forfeiture sites.
    The commenter has misinterpreted the scope of this restriction. 
What we are saying is that once a permit expires, lapses, or is 
revoked, a person who requests a VER determination subsequent to the 
expiration, lapse, or revocation of that permit cannot rely upon the 
prior existence of that permit to satisfy the requirements of paragraph 
(b)(1) of the definition of VER. However, the expiration, lapse, or 
revocation of a permit in no way alters the validity of VER 
determinations made under the good faith/all permits standard before 
the permit expired, lapsed, or was revoked. As discussed in Part IX of 
the preamble to this final rule, we no longer adhere to the position 
that VER always attach to the land. However, in the case of the good 
faith/all permits standard, VER would effectively attach to the land 
since the only requirement apart from the property rights demonstration 
is a requirement that someone have made a good faith effort to obtain 
all necessary permits. There is no requirement that a person actually 
obtain a permit to demonstrate VER under this standard. Therefore, once 
we or the State regulatory authority determine that a person has VER 
for a particular site under the good faith/all permits standard, that 
determination remains valid for all future surface coal mining 
operations of the type and method covered by the determination, 
regardless of the status of any permit that may exist for that land. 
Therefore, the language to which the commenter objects does not present 
a barrier to repermitting lands for which permits have expired, lapsed, 
or been revoked. Previous VER determinations applicable to the site 
under the good faith/all permits standard would remain valid and any 
areas that come under the protection of 30 CFR 761.11 and section 
522(e) before the permit expired, lapsed, or was revoked would be 
covered by the exception for existing operations in 30 CFR 761.12.
    Some commenters argued that the good faith/all permits standard is 
inherently unfair and unreasonable because so few persons could qualify 
for VER under that standard 20 years after the enactment of SMCRA. They 
also note that, while industry generally

[[Page 70778]]

acquires mineral rights well in advance of any planned mining, it does 
not seek permits for those lands until mining is reasonably imminent. 
Section 506(b) of the Act generally limits permit terms to 5 years and 
section 506(c) provides that a permit will terminate if the permittee 
has not begun surface coal mining operations within 3 years of the date 
of issuance. Thus, the commenters argue, the good faith/all permits 
standard unfairly penalizes persons who have purchased coal reserves 
for investment purposes or to provide for the company's long-term 
security or future expansion.
    We believe that the good faith/all permits standard properly 
implements the intent of Congress to prevent most new surface coal 
mining operations on the lands listed in section 522(e). We agree that, 
except for lands coming under the protection of 30 CFR 761.11 and 
section 522(e) after August 3, 1977, few persons will qualify for VER 
under this standard. But this result is fair, reasonable, and 
appropriate, given the congressional intent to protect section 522(e) 
lands.
    To some extent, speculative investors in land and interests in land 
assume the risk of future changes in the regulatory environment. Under 
the 1979 Federal rule, the 1980 suspension notice, State regulatory 
programs, and our 1986 suspension notice, an all permits or good faith/
all permits standard has been in place for most of the time since the 
enactment of SMCRA for most of the lands listed in section 522(e). 
Therefore, few mineral owners could plausibly claim that they were 
unaware of the applicability of the restriction, or that they had 
reasonable expectations of being held to a less restrictive standard. 
Furthermore, the needed for and adjacent VER standard in paragraph 
(b)(2) of the definition offers relief to some persons who are unable 
to meet the good faith/all permits standard. And, as discussed in the 
final environmental impact statement and final economic analysis for 
this rulemaking, mineral owners and mine operators frequently rely upon 
the other exceptions provided by section 522(e), such as waivers for 
the buffer zones for public roads and occupied dwellings, compatibility 
findings for Federal lands in national forests, and joint approval for 
publicly owned parks and historic places.
    Section 522(e) of the Act affects a person's eligibility to obtain 
a permit for surface coal mining operations. Logically, then, the VER 
exception under section 522(e) should ensure fairness by protecting a 
pre-existing interest under the regulatory process that was in place 
when the prohibitions of section 522(e) took effect. That is, in 
general, the VER exception should protect an equitable interest in 
regulatory approval of proposed surface coal mining operations for 
which a person had taken steps to obtain regulatory approval in 
reliance upon the circumstances that existed before the land came under 
the protection of section 522(e). The good faith/all permits standard 
protects this equitable interest in regulatory approval.
    This standard is also consistent with the general principles of 
equitable estoppel; i.e., that one who has in good faith relied upon 
and complied with the requirements for obtaining an interest by ``doing 
all he could do'' should not be deprived of the interest. See Shostak 
and Barrett, Valid Existing Rights in SMCRA, 5 J. Min. L. & Pol'y 585, 
600 (1990), and Note, Regulation and Land Withdrawals; Defining ``Valid 
Existing Rights'', 3 J. Min. L. & Pol'y 517 (1988). Thus, under the 
good faith/all permits standard, in determining whether a person has 
demonstrated VER, the agency will examine whether the record 
demonstrates that, by the time that the land came under the protection 
of 30 CFR 761.11 and section 522(e), that person or a predecessor in 
interest had relied upon and complied with all regulatory requirements 
for obtaining the necessary permits and authorizations by doing all 
that could be done to obtain those permits and authorizations. If a 
person makes both this demonstration and the property rights 
demonstration required by paragraph (a) of the definition of VER, it 
would be unfair to deny that person eligibility to apply for and obtain 
a permit under SMCRA.
    SMCRA and its legislative history do not compel or support adoption 
of a VER standard crafted to (1) ensure continuation of all standard 
pre-SMCRA industry practices, (2) preserve the ability of all mineral 
owners to extract coal from protected areas by surface coal mining 
operations whenever authorized under State property law, or (3) 
maintain broad eligibility for VER on a nondeclining basis. We believe 
that adoption of a standard incorporating these principles would 
effectively vitiate the protections of section 522(e) for all lands 
except those overlying unleased Federal coal. This result would 
contravene Congress' intention in enacting this section.
    Some commenters argued that nothing in the statute or its 
legislative history remotely suggests that VER be defined in terms of a 
good faith/all permits standard. We agree that neither the statute nor 
its legislative history mentions a good faith/all permits standard for 
VER. However, as discussed above, we believe that the good faith/all 
permits standard is consistent with the legislative history of section 
522(e). In addition, the definition of VER is not restricted to the 
good faith/all permits standard; it also includes the needed for and 
adjacent standard.
    Commenters also argue that if Congress had intended to provide a 
permit-based exception to the prohibitions of section 522(e), it would 
have done so expressly as it did in section 510(b)(5) (restrictions on 
mining alluvial valley floors), section 510(d)(2) (special requirements 
for surface coal mining operations on prime farmlands), and section 
522(a)(2) (petition-initiated designations of land as unsuitable for 
surface coal mining operations). According to the commenters, adoption 
of a permit-based definition of VER conflicts with the judicially 
endorsed presumption that Congress has acted both purposely and 
intentionally when it includes particular language in one statutory 
provision but not in another.
    We agree that the statute's use of different terminology for each 
of these exceptions means that Congress probably intended a somewhat 
different meaning for the VER exception under section 522(e) than for 
the exceptions provided under the other statutory provisions cited by 
the commenters. However, we do not agree that the difference in 
terminology rules out the adoption of any type of permit-based standard 
for VER under section 522(e). And the good faith/all permits standard 
in this final rule differs from the permit-based exceptions under other 
provisions of the Act in that it includes a good faith component, which 
the others do not. Furthermore, our definition of VER includes the 
needed for and adjacent standard, which is not a permit-based standard. 
Finally, nothing in the litigation history of the definition of VER 
indicates that the courts would likely find a permit-based standard 
unacceptable for the reasons advanced by the commenters.
    Many commenters characterized Hodel v. Virginia Surface Mining & 
Reclamation Ass'n, 452 U.S. 264, 296 n.37 (1981) (``Hodel v. VSMRA'') 
as representing a rejection of a permit-based standard for VER, or at 
least an indication that the courts would view such a standard with 
disfavor. In that case, the Supreme Court stated in a footnote that 
nothing in the statutory language of SMCRA or its legislative history 
would compel adoption of an all permits standard for VER. One commenter 
also argued that, in National

[[Page 70779]]

Wildlife Fed'n v. Hodel, 839 F.2d 694, 750 n.86 (D.C. Cir. 1988) (``NWF 
v. Hodel''), the U.S. Court of Appeals for the Federal Circuit 
characterized this Supreme Court pronouncement as a rejection of the 
all permits standard: ``[T]he Supreme Court has previously rejected a 
too-restrictive interpretation of VER in an early challenge to the 
SMCRA brought by industry.'' We respectfully disagree with these 
characterizations of the Supreme Court's decision and opinion. First, 
the definition of VER was not before the court. Second, the language 
chosen by the Supreme Court is decidedly neutral. It addresses only the 
question of whether the statute compels adoption of an all permits 
standard. It does not reach the issue of whether an all permits 
standard (or good faith/all permits standard) is permissible.
    Commenters attacked the good faith/all permits standard as 
unconstitutionally defining property rights in violation of the Tenth 
Amendment to the Constitution, which reserves that power to the States 
as one of their unenumerated powers. We disagree. Our definition of VER 
clearly defers to State property law on all questions of property 
rights. The final rule defining VER does not by its terms deprive any 
person of property rights. Instead, our definition establishes the 
limits of the VER exception to the prohibitions and restrictions of 
section 522(e), based on equitable considerations.
    Furthermore, in Hodel v. VSMRA, 452 U.S. at 291 (1981), the Supreme 
Court stated:

    The Court long ago rejected the suggestion that Congress invades 
areas reserved to the States by the Tenth Amendment simply because 
it exercises its authority under the Commerce Clause in a manner 
that displaces the States' exercise of their police powers.

    Commenters also argued that the good faith/all permits standard 
denies property owners due process under the Fifth Amendment because it 
conditions the retention of a property right on conditions that are 
unreasonable and of which the property owner had inadequate notice. We 
disagree. Property owners had the opportunity to comment on either an 
all permits or good faith/all permits standard in the 1978, 1982, 1988, 
1991, and 1997 proposed rules. Furthermore, the final rule creates 
little change in the status quo since most States have applied a good 
faith/all permits or all permits standard ever since they obtained 
approval of their SMCRA regulatory programs. In addition, when the VER 
standard is applied, all VER determinations have been and will continue 
to be subject to administrative and judicial review.
    Commenters allege that the good faith/all permits standard 
improperly relies upon the opinion in PSMRL I, Round I, 14 Env't Rep. 
Cas. (BNA) at 1090-91 (1980). They note that, on February 1, 1983, the 
U.S. Court of Appeals for the Federal Circuit remanded these 
regulations to the Secretary for review and revision at his request. 
The order of remand in this case stated that the judgment of the 
district court in PSMRL I, Round I, supra, could not be considered 
final. See In re Permanent Surface Mining Regulation Litigation, No. 
80-1810, Order of Remand (D.C. Cir., Feb. 1, 1983). While the district 
court's decision lacks precedential weight, the order of remand does 
not prohibit use of the opinion as guidance in developing revised 
regulations. Regardless, as discussed above, our rationale for adoption 
of the good faith/all permits standard rests primarily upon our 
analysis of the legislative history of section 522(e) and Congress' 
purpose in enacting that section, not upon the opinion accompanying the 
court's decision. Only the good faith component has its origins in the 
PSMRL I, Round I decision.
    Commenters also asserted that the definition of VER does not 
comport with our statement in the PSMRL I, Round I litigation that 
``Congress intended the term valid existing rights to encompass 
property rights recognized as valid under state case law.'' 14 Env't 
Rep. Cas. (BNA) at 1090 (1980). The commenters overlook the context of 
this statement, which pertained only to paragraph (c) of the 1979 
definition of VER. See 44 FR 67942, November 27, 1979. Paragraph (c) 
established criteria for the interpretation of documents used as part 
of the property rights demonstration. It did not comprise an 
independent standard for VER, contrary to the apparent assumptions of 
the commenters.
    As noted in the decision, the Secretary committed only to revise 
the definition to state that documents dealing with property rights 
entitling one to surface mine coal will be interpreted in accordance 
with appropriate State court decisions. He did not agree to waive the 
other requirements of the 1979 definition, which include compliance 
with one of the VER standards in paragraphs (a) and (b) of the 
definition (the all permits standard, the needed for and adjacent 
standard, or the separate standard for haul roads). Nor did he agree to 
alter paragraph (d) of the 1979 definition, which provided that VER 
``does not mean mere expectation of a right to conduct surface coal 
mining operations.''
    One commenter complained that the version of the good faith/all 
permits standard that we proposed in 1997 differs sharply from our 
representations to the courts concerning the meaning of VER under 
section 522(e). The commenter specifically referred to and quoted a 
reply brief that the Government filed with the Supreme Court in Hodel 
v. VSMRA, 452 U.S. 264 (1981), on behalf of the Secretary. We agree 
that the final rule is not fully consistent with the statements in this 
brief. However, as discussed above and in Part VII.C.5. of this 
preamble, we no longer subscribe to this brief's interpretation of the 
legislative history of section 522(e). Furthermore, the discussion of 
VER in the brief occurred in the context of a facial challenge to 
section 522(e) of the Act. The definition of VER was not before the 
Court, and the Court did not rule on the meaning of the VER exception. 
As the brief itself notes, the Secretary was engaged in rulemaking to 
redefine VER at the time that the brief was filed. And, as discussed 
above and in Part VII.C.5. of this preamble, we believe that the VER 
standards in the final rule are the standards that are most consistent 
with the legislative history and Congress' intent in enacting section 
522(e).
    Some commenters opposed the good faith/all permits standard as a 
violation of the principle of statutory construction that a statute 
must be construed in a manner that affords each provision separate 
effect. Specifically, they charged that adoption of the good faith/all 
permits standard would effectively merge the VER exception under 
section 522(e) into the exception for existing operations under the 
same section, and thus improperly render the VER exception superfluous. 
We do not agree. First, as defined in this rule, the exception for 
existing operations does not apply to lands for which a permit has not 
actually been obtained; i.e., it has no good faith component.
    Second, the exception for existing operations includes authorized 
operations that have already begun surface coal mining operations 
before the land comes under the protection of 30 CFR 761.11 and section 
522(e); the VER exception is not intended to apply to these operations. 
Third, the definition of VER is not restricted to the good faith/all 
permits standard. It also includes the needed for and adjacent standard 
and a separate standard for roads, neither of which has any counterpart 
in the exception for existing

[[Page 70780]]

operations in 30 CFR 761.12. Therefore, the VER exception includes 
significant differences from the exception for existing operations. The 
only overlap occurs with respect to unstarted operations that have 
obtained a permanent program permit under SMCRA.
    In summary, we believe that the good faith/all permits standard is 
both reasonable and consistent with congressional intent. As discussed 
above and as summarized in Part V of this preamble, the legislative 
history is sparse and unclear, and parts are arguably inapplicable with 
respect to how Congress intended the VER exception in section 522(e) of 
the Act to be interpreted. In the face of this difficulty in 
determining Congress' intent, we believe that the good faith/all 
permits standard best balances a number of statutory purposes and 
policy objectives. These purposes and objectives include establishing a 
reasonable standard that is practicable to administer, providing 
substantial environmental protection to congressionally designated 
areas, providing an exception to the prohibition on surface coal mining 
operations in those areas when it would be unfair to apply the 
prohibition, protecting surface landowners from the adverse effects of 
surface coal mining operations, minimizing disruption of existing State 
regulatory programs and expectations engendered thereunder, and, to the 
extent that it harmonizes with the other purposes and objectives, 
mitigating or minimizing compensable takings of property interests.
3. What Comments Did We Receive Regarding Takings Issues Concerning the 
Good Faith/All Permits Standard?
    Many commenters argued that the good faith/all permits standard is 
constitutionally infirm because of its Fifth Amendment takings 
implications. This argument appears to rely upon three premises: (1) 
that any interference with property rights recognized under State law 
would be a compensable taking, (2) that the good faith/all permits 
standard would effectively deny mineral owners any reasonable economic 
use of their property, and (3) that a standard which, when applied, 
might result in some compensable takings is facially unconstitutional. 
We do not agree that any of these premises is correct.
    With respect to the definition of VER under section 522(e) of 
SMCRA, the U.S. District Court for the District of Columbia has held 
that ``no mechanical formula [for VER] will ever perfectly define the 
universe of circumstances in which failure to grant VER will constitute 
a taking.'' PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1563 
(1985). And the Supreme Court has long held that regulation that 
affects the value, use, or transfer of property may constitute a 
compensable taking if it goes too far. Pennsylvania Coal Co. v. Mahon, 
260 U.S. 393 (1922). However, the courts have also long held that the 
rights of property owners are not absolute and that government may, 
within limits, regulate the use of property. See the summary of takings 
law published at 56 FR 33161, July 18, 1991.
    The Supreme Court has identified three factors as having particular 
significance in a regulatory takings analysis: (1) the economic impact 
of the proposed government policy or action on the property interest 
involved, (2) the extent to which the action or regulation interferes 
with any reasonable, investment-backed expectations of the owner of the 
property interest, and (3) the character of the government action. 
Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 224-25 
(1986). The courts generally find that a compensable taking exists only 
if the government action would cause inequitably disproportionate 
economic impacts on the property or interfere with reasonable, 
investment-backed expectations of persons with an interest in the 
property to such an extent that justice and fairness would require that 
the public, rather than the private property owners, pay for the public 
benefit resulting from the restrictions that the government action 
places on the property. Armstrong v. United States, 364 U.S. 40, 49 
(1960).
    In declining to review the constitutionality of section 522(e) of 
SMCRA, the Supreme Court explained its historic approach to takings 
analyses as follows:

    [T]his court has generally ``been unable to develop any ``set 
formula'' for determining when ``justice and fairness'' require that 
economic injuries caused by public action be compensated, rather 
than remain disproportionately concentrated on a few persons.'' 
Rather, it has examined the ``taking'' question by engaging in 
essentially ad hoc, factual inquiries that have identified several 
factors--such as the economic impact of the regulation, its 
interference with reasonable investment-backed expectations, and the 
character of the government action--that have particular 
significance. Kaiser Aetna v. United States, 444 U.S. 164, 175 
(1979). * * * These ``ad hoc factual inquiries'' must be conducted 
with respect to specific property, and the particular estimates of 
economic impact and ultimate valuation relevant in the unique 
circumstances.

Hodel v. VSMRA, 452 U.S. at 296 (1981) (citations omitted).

    When regulation goes too far in infringing on private property 
rights is not precisely definable. The Supreme Court has consistently 
``eschewed any `set formula' for determining how far is too far, 
preferring to `engage in * * * essentially ad hoc, factual inquiries.' 
'' Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015 (1992) 
(``Lucas''), quoting Penn Cent. Transp. Co. v. New York City, 438 U.S. 
104, 124 (1978). In Lucas, the Supreme Court recognized what it 
characterized as a ``logically antecedent inquiry'' into a takings 
claimant's title prior to the inquiry into whether the government has 
interfered with rights inherent in that title in a manner that rises to 
the level of a Fifth Amendment taking. Id. at 1027. The Court noted in 
Lucas that its takings jurisprudence ``has traditionally been guided by 
the understandings of our citizens regarding the content of, and the 
State's power over the `bundle of rights' that they acquire when they 
obtain title to property.'' Id. at 1027. Thus, the Court continued, 
some regulation of rights should be expected. ``In the case of personal 
property, by reason of the State's traditionally high degree of control 
over commercial dealings,'' the possibility of significant impacts 
should be anticipated. Id. at 1027-28. But the Court indicated that 
interests in land have greater expectations of protection. Id. at 1028. 
Further, the Court suggested that an ``owner's reasonable 
expectations'' may be critical to a takings determination. Id. at 1016 
n.7. These expectations are those that ``have been shaped by the 
State's law of property; i.e., whether and to what degree the State's 
law has accorded legal recognition and protection to the particular 
interest in land with respect to which the takings claimant alleges a 
diminution (or elimination) of value.'' Id. at 1016 n.7.
    However, in a subsequent case, the Supreme Court reiterated that 
``our cases have long established that mere diminution in the value of 
property, however serious, is insufficient to demonstrate a taking.'' 
Concrete Pipe & Prod. v. Construction Laborers Pension Trust, 508 U.S. 
602, 645 (1993). The Court cited Village of Euclid v. Ambler Realty 
Co., 272 U.S. 365, 384 (1926), which involved an approximate 75 percent 
diminution in value, and Hadacheck v. Sebastian, 239 U.S. 394, 405 
(1915), which involved a 92.5 percent diminution in value, as examples 
of the cases to which it was referring.

[[Page 70781]]

    Even under Lucas (see id. at 1027-28), coal owners and the coal 
mining industry may not necessarily enjoy the same expectations of 
freedom from government interference as persons who have historically 
been subject to a lesser degree of regulation, a factor that must be 
considered when evaluating the impact of the governmental action on 
investment-backed expectations. The Supreme Court recently held that 
``those who do business in the regulated field cannot object if the 
legislative scheme is buttressed by subsequent amendments to achieve 
the legislative end.'' Concrete Pipe & Prod. v. Construction Laborers 
Pension Trust, 508 U.S. 602, 645 (1993) (citations omitted). And, in 
the same case, the Court ruled that ``legislation readjusting rights 
and burdens is not unlawful solely because it upsets otherwise settled 
expectations.'' Id. at 646 (citations omitted).
    In PSMRL I, Round I, 14 Env't Rep. Cas. (BNA) at 1091 (1980), the 
U.S. District Court for the District of Columbia declined to rule on 
the constitutionality of the 1979 all permits standard for VER because 
the plaintiffs' takings claims were purely hypothetical. However, in 
its opinion, the court stated that it found persuasive the government's 
arguments that the definition met the standards of existing takings 
jurisprudence. And the definition that we are adopting today is 
consistent with that court's declaration that ``a good faith attempt to 
have obtained all permits before the August 3, 1977 cut-off date should 
suffice for meeting the all permits test.''
    Furthermore, in Hodel v. VSMRA, 452 U.S. at 296 n.37 (1981), the 
Supreme Court stated that, while nothing in the statutory language of 
SMCRA or its legislative history would compel adoption of an all 
permits standard for VER, section 522(e) ``does not, on its face, 
deprive owners of land within its reach of economically viable use of 
their land since it does not proscribe nonmining uses of such land.'' 
The definition of VER that we are adopting today likewise does not 
prohibit nonmining uses of land protected by section 522(e). Therefore, 
we believe that the good faith/all permits standard is consistent with 
the principles established by the Supreme Court.
    The commenters are correct in noting that neither of these 
decisions specifically endorses the good faith/all permits standard as 
constitutionally sound. However, there is nothing in these court 
decisions, SMCRA, or its legislative history that precludes adoption of 
a good faith/all permits standard for VER under section 522(e) or 
suggests that adoption of this standard would be a facial regulatory 
taking. Therefore, the only question is the degree to which its 
application to individual situations may result in a compensable 
taking.
    The takings implication assessment in Part XXIX.E. of this preamble 
states that the good faith/all permits standard has significant takings 
implications as that term is defined by Executive Order 12630. It also 
states that, of all the alternatives that we considered, this standard 
has the greatest potential to result in compensable takings. However, 
the assessment explains that, while these takings implications are 
unquantifiable, we anticipate that the rule will result in very few 
compensable takings. The final environmental impact statement and final 
economic analysis for this rulemaking suggest that any takings that do 
occur will be limited largely to lands in eastern national forests with 
Federal surface and non-Federal mineral ownership and to lands in State 
and local parks and buffer zones for those parks.
    Also, we anticipate that, in most cases, the lands protected by 
section 522(e) and 30 CFR 761.11 will comprise only a small portion of 
the relevant property interests as a whole. Therefore, under 
established takings jurisprudence, these prohibitions are unlikely to 
result in compensable takings. See Penn Cent. Transp. Co. v. New York 
City, 438 U.S. 104, 130 (1978) (``Takings jurisprudence does not divide 
a single parcel into discrete segments and attempt to determine whether 
rights in a particular segment have been entirely abrogated.'') For 
example, because mineral ownership is commonly less fragmented than 
surface ownership, the buffer zones for dwellings, cemeteries, roads, 
public buildings, and parks are unlikely to preclude surface coal 
mining operations on the bulk of a parcel for which a person owns the 
mineral rights. Even if the entire parcel lies within one or more of 
the prohibited areas, there may be no compensable taking because (1) 
the person may be able to recover the coal through underground mining 
methods without constructing surface facilities on the protected lands, 
or (2) there may be residual non-coal interests in the property which 
are unaffected or even enhanced by the prohibitions. For example, 
prohibition of surface coal mining operations could increase the value 
of the surface estate for residential or commercial development.
    One commenter stated that Penn Central retains little currency in 
view of the subsequent Lucas decision. We find nothing in Lucas that 
expressly or by implication reverses the aspect of Penn Central quoted 
in the previous paragraph. And, in a decision rendered after Lucas, the 
Supreme Court reaffirmed this aspect of its Penn Central decision:

    We reject Concrete Pipe's contention that the appropriate 
analytical framework is the one employed in our cases dealing with 
permanent physical occupation or destruction of economically 
beneficial use of real property. [Citation to Lucas omitted.] While 
Concrete Pipe tries to shoehorn its claim into this analysis by 
asserting that ``the property of [Concrete Pipe] which is taken, is 
taken in its entirety,'' we rejected this analysis years ago in Penn 
Central, where we held that a claimant's parcel of property could 
not first be divided into what was taken and what was left for the 
purpose of demonstrating the taking of the former to be complete and 
hence compensable. To the extent that any portion of property is 
taken, that portion is always taken in its entirety; the relevant 
question, however, is whether the property taken is all, or only a 
portion of, the parcel in question.

Concrete Pipe & Prod. v. Construction Laborers Pension Trust, 508 U.S. 
602, 643-44 (1993), citations omitted.
    One commenter argued that the statutory prohibition in section 
522(e), when combined with the good faith/all permits standard for VER, 
would physically appropriate a distinct property interest (the right to 
surface mine) and thus would constitute a compensable taking regardless 
of how much of a person's property was actually affected by section 
522(e) or what other uses of the property might remain. However, the 
commenter did not explain why this situation would qualify as a 
physical intrusion under the standard established in Loretto v. 
Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). And we are 
aware of no basis for such an argument under existing takings 
jurisprudence.
    One commenter stated that, based upon the takings implication 
assessment, adoption of the good faith/all permits standard is 
proscribed by Edward J. DeBartolo Corp. v. Florida Gulf Coast Building 
& Construction Trades Council, 485 U.S. 568 (1988). In that case, which 
dealt with First Amendment issues, the Supreme Court held that if ``an 
otherwise acceptable construction of a statute would raise serious 
constitutional problems, the Court will construe the statute to avoid 
such problems unless such construction is plainly contrary to the 
intent of Congress.'' Id. at 575. The commenter argued that, under this 
decision, we must select an alternative other than the good faith/all 
permits standard because the takings implication assessment in the 
proposed rule found that the good faith/all permits standard has the 
greatest potential to result in

[[Page 70782]]

compensable takings. We do not agree that the rationale in this 
decision prohibits adoption of the good faith/all permits standard.
    First, we believe that adoption of another alternative would be 
contrary to the intent of Congress. In enacting section 522(e) of 
SMCRA, Congress clearly intended to minimize the number of new surface 
coal mining operations on protected lands. The other alternatives for 
the definition of VER are all less protective of the lands in section 
522(e). Therefore, we believe that adoption of one of those 
alternatives would be contrary to the intent of Congress in enacting 
section 522(e).
    Second, we do not agree that adoption or implementation of the good 
faith/all permits standard presents a constitutional problem. The Fifth 
Amendment only prohibits the taking of property without compensation. 
And the Tucker Act, 28 U.S.C. 1491, provides recourse for an individual 
to seek compensation in any situation in which a compensable taking 
might arise as a result of a Federal action. According to the Supreme 
Court, when ``compensation is available for those whose property is in 
fact taken, the government action is not unconstitutional.'' United 
States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 128 (1985). And 
the Supreme Court also ruled that the Takings Clause ``is designed not 
to limit governmental interference with property rights per se, but 
rather to secure compensation in the event of otherwise proper 
interference amounting to a taking.'' First English Evangelical 
Lutheran Church v. County of Los Angeles, 482 U.S. 304, 315 (1987).
    Furthermore, we have used the good faith/all permits standard most 
of the time since SMCRA's enactment. And 20 of the 24 approved State 
regulatory programs under SMCRA rely upon a VER definition that 
includes either the all permits standard or the good faith/all permits 
standard. Apart from two cases of limited precedential weight from the 
U.S. District Court for the Southern District of Ohio, Belville Mining 
Co. v. Lujan, No. C-1-89-790 (S.D. Ohio 1991) (Belville I) and Sunday 
Creek Coal Co. v. Hodel, No. C-2-88-0416 (S.D. Ohio, June 2, 1988), we 
are not aware of any final decisions in which State or Federal courts 
have found that the good faith/all permits standard, or an agency 
determination that a person did not have VER under the good faith/all 
permits standard, was invalid on the basis of a conclusion that the 
standard or determination would result in a compensable taking of a 
property interest under the Fifth and Fourteenth Amendments to the U.S. 
Constitution. And we are aware of no final decisions in which the U.S. 
Court of Federal Claims has held that a person who could not meet the 
good faith/all permits standard suffered a compensable taking. 
Therefore, we anticipate that application of the good faith/all permits 
standard will result in very few compensable takings.
    The preamble to the proposed rule contains the following 
discussion, which relies upon a zoning analogy to support the validity 
of the good faith/all permits standard in the face of a Fifth Amendment 
challenge:

    Section 522(e) is a form of land use regulation that may be 
considered analogous to certain provisions of zoning law. VER under 
section 522(e) is generally analogous to those provisions of land 
use law that define when a person attains a vested right to a 
particular land use regardless of subsequent changes in zoning 
ordinances that would otherwise prohibit or restrict that use. State 
laws vary widely with respect to when a person develops a vested 
interest in a particular land use, but mere ownership is rarely 
sufficient. Some States require that a person both obtain all 
necessary permits and make significant expenditures in reliance on 
those permits. Others require that a person reach a certain point in 
the permit process or make substantial good faith expenditures based 
on the existing zoning before he or she develops a vested interest 
in uses allowed under that zoning.
    The good faith/all permits standard for VER has a similar effect 
and is based in part on a similar rationale. Therefore, OSM 
anticipates that, in any review of the validity of a final VER 
standard, a court would consider principles analogous to those that 
have guided judicial decisions on challenges to the validity of 
zoning ordinances and similar land use regulatory provisions. In 
general, the courts have upheld land use restrictions as a 
legitimate exercise of the police power under the U.S. Constitution.

62 FR 4844, January 31, 1997.
    One commenter attacked this analogy as inappropriate and 
inconsistent with constitutional law. The commenter argued that zoning 
authority arises from the plenary police powers reserved to the States 
under the Tenth Amendment to the Constitution, while Congress' 
authority to regulate intrastate coal mining derives from judicial 
interpretation of the Commerce Clause of the Constitution. See United 
States v. Lopez, 514 U.S. 549, 566 (1995), citing Hodel v. VSMRA, 
supra. The commenter also quoted a different Supreme Court decision on 
SMCRA, in which the Court stated:

    We do not share the view of the District Court that the Surface 
Mining Act is a land-use measure after the fashion of the zoning 
ordinances typically enacted by state and local governments.

Hodel v. Indiana, 452 U.S. 314, 331 n.18 (1981).

    We agree that the constitutional authority for SMCRA is the 
Commerce Clause. See Hodel v. VSMRA, 452 U.S. at 275-283 (1981), and 
Hodel v. Indiana, 452 U.S. at 321-329 (1981). We did not intend the 
discussion in the proposed rule to be interpreted as identifying the 
police power as a source of authority for either SMCRA or adoption of 
implementing regulations. Rather, we intended that discussion to 
explain in part why we do not anticipate that the courts will find this 
standard to be a facial regulatory taking; i.e., we expect the courts 
to evaluate this rule as a justifiable balancing of private rights with 
protection of public interests, given the dictates of SMCRA. Our 
statement that, in general, the courts have upheld land use 
restrictions as a legitimate exercise of the police power under the 
Constitution referred to litigation involving measures enacted by State 
and local governments, not Federal laws and regulations.
    One commenter argued that the good faith/all permits standard has 
no takings implications because all mining in section 522(e) areas 
would be either a public nuisance or a threat to public health and 
safety. The commenter stated that, under background principles of 
property and nuisance law, prohibition of surface coal mining 
operations in these areas would never rise to the level of a 
compensable taking. While this statement may be true in some cases for 
some lands listed in section 522(e), the ad hoc, fact-specific nature 
of takings jurisprudence means that we cannot assume that it will 
always be true.
    In Lucas, supra, at 17-25, the Supreme Court stated that the 
``harmful or noxious use'' principle in Goldblatt v. Town of Hempstead, 
369 U.S. 590 (1962), and Mugler v. Kansas, 123 U.S. 623 (1887) (the 
nuisance law to which the commenter refers) was merely an earlier 
description by the Court of the police power justification for allowing 
the government to cause some diminution in the value of private 
property without requiring that the owner of that property be 
compensated. However, in Lucas, the Court held that a property owner 
must be compensated for all total regulatory takings; i.e., situations 
in which the owner retains no economically viable or beneficial use of 
the property, unless the use or uses in question are already prohibited 
under background principles of State nuisance and property law.
    The Court further stated that ``[t]he fact that a particular use 
has long been engaged in by similarly situated owners

[[Page 70783]]

ordinarily imports a lack of any common law prohibition.'' Lucas, 505 
U.S. at 1015. This premise might apply to surface coal mining 
operations in many of the areas protected by section 522(e) because 
State and local laws often did not prohibit surface coal mining 
operations in these areas before SMCRA. Its exact applicability would 
vary from State to State and locality to locality depending on State 
and local laws and the facts of each case. Hence, the commenter's claim 
that all mining in section 522(e) areas is per se a public nuisance and 
a threat to public health and safety is of questionable merit. See also 
Whitney Benefits, Inc. v. United States, 18 Cl.Ct. 394 (1989), aff'd 
926 F.2d 1169 (Fed. Cir. 1991), in which the court of appeals held 
that, at least in the context of prohibiting surface coal mining 
operations on alluvial valley floors, ``Congress was not in SMCRA 
abating a `nuisance', within the meaning of Supreme Court and other 
cases.'' Whitney Benefits at 926 F.2d 1177. However, as discussed above 
and in the takings implication assessment, we believe that successful 
takings claims under the good faith/all permits standard will be rare.
    Some commenters argued that adoption of any standard other than the 
good faith/all permits standard would result in compensable takings of 
surface owners' property rights to peaceful enjoyment of their 
property. We know of no Federal case law supporting this argument. 
However, because we are adopting the good faith/all permits standard, 
which the commenters favored, there is no need to respond to this 
comment.
    A few commenters warned that the takings implications of the good 
faith/all permits standard may significantly disrupt State regulatory 
programs because a single successful claim could devastate State 
funding of these programs. The commenters stated that the threat of 
large inverse condemnation awards would cause some States to relinquish 
primacy, which, one commenter noted, would threaten ``the federalist 
foundation of the Act.'' We find this possibility to be remote since 20 
of the 24 approved State regulatory programs already include either an 
all permits or a good faith/all permits standard, and have done so 
since the date that we approved their programs under section 503 of the 
Act.
    One State regulatory authority warned that the financial exposure 
resulting from adoption of the good faith/all permits standard would 
likely lead to States referring all VER determinations to us to avoid 
any liability for compensable takings awards, which could easily 
bankrupt a regulatory agency. However, there is no provision of the Act 
that authorizes such referrals. Furthermore, we believe that referrals 
are unlikely because 20 of the 24 approved State programs, including 
the one for the State that the commenter represents, already include an 
all permits or good faith/all permits standard for VER. If a State does 
attempt to refer a VER determination to us, we will take whatever 
measures are appropriate under sections 503 and 504 of SMCRA.
4. Why Did We Reject the Takings Standard?
    For the reasons discussed in Part VII.C.2. of this preamble, we 
believe that, of all the alternatives considered for the definition of 
VER, the good faith/all permits standard best comports with the intent 
of Congress in enacting section 522(e). For this and other reasons, we 
did not propose to adopt a takings standard for VER. However, some 
persons elected to comment on either this standard or the validity of 
our reasons for failing to propose a takings standard. None of the 
comments received on the proposed rule provides sufficient basis for 
reconsideration of our preferred alternative.
    To the extent that they chose to comment on the possibility of a 
takings standard, most commenters from every interest group expressed 
opposition, just as they did when we formally proposed one in 1991. 
Commenters provided various reasons for their opposition. Some 
characterized the takings standard as unacceptably subjective or 
unpredictable, with results that would vary widely from State to State 
and perhaps within a State as well. Many expressed concern about the 
potentially onerous information collection and analytical burdens that 
this standard could place both on persons seeking a VER determination 
and on the agency making the determination. Commenters noted that these 
agencies are unlikely to have the resources needed to conduct a 
comprehensive takings analysis. Other commenters argued that only the 
courts have both the authority and the competence to determine whether 
an agency action would result in a compensable taking. In addition, a 
number of commenters opposed the takings standard because of their 
belief that it would be far less protective of the lands listed in 
section 522(e) than the good faith/all permits standard. Because we did 
not propose a takings standard, we find it unnecessary to discuss the 
merits of these arguments here.
    In the preamble to the 1997 proposed rule, we explained that one of 
the reasons why we did not propose to adopt the takings standard is 
that a takings standard would be relatively difficult to administer, 
compared to the other alternatives. The few commenters who supported a 
takings standard as either their first or second choice argued that 
difficulty in administration is not a valid reason for not selecting an 
otherwise viable rulemaking alternative. We disagree. Executive Order 
12988, ``Civil Justice Reform,'' encourages the adoption of rules that 
do not present or create administrative difficulties.
    And, in a 1985 opinion, the U.S. District Court for the District of 
Columbia, while declining to rule on the merits of a takings standard, 
cast doubt upon its administrative viability:

    The Secretary seems to assume, and this court expresses no 
opinion on this issue, that Congress intended each and every VER 
determination made by a state agency or OSM to coincide precisely 
with what a judicial determination of a taking would be in that 
given factual setting. But * * * only a court can decide whether a 
taking has occurred. Thus, while at first blush, it would appear 
that the broad constitutional takings test as promulgated by the 
Secretary comports with Congress' wishes to avoid any takings, it is 
not clear whether the broad test or one of the mechanical tests will 
better carry out congressional intent.

PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1563 (1985).
    One commenter stated that there is nothing in SMCRA or its 
legislative history that suggests that VER under section 522(e) is 
coextensive with the Takings Clause of the Fifth Amendment. As 
discussed above and in Parts VII.C.2. and VII.C.3. of this preamble, we 
agree.
    Other commenters who favored either the takings standard or the 
ownership and authority standard noted that both we and the courts have 
frequently stated or implied that a principal purpose of the VER 
exception in section 522(e) is to avoid compensable takings. This 
statement is true. However, the expressions of opinion in the court 
decisions cited by the commenters are not binding, either because this 
particular question was not at issue in the cases before the courts or 
because the court declined to rule on the merits of the issue. 
Furthermore, both our prior statements suggesting that Congress 
included the VER exception in section 522(e) to avoid compensable 
takings (see, for example, 44 FR 14992, March 13, 1979, col. 1) and 
similar expressions of opinion in court decisions relied upon the 
colloquy between Congressmen Udall and Roncalio concerning VER under 
section 601 of the Act. See 123 Cong. Rec. H12878 (April 29, 1977).

[[Page 70784]]

    We now believe that this colloquy has little if any relevance to 
the meaning of VER under section 522(e). Section 601 relates only to 
the mining of minerals and materials other than coal on Federal lands, 
while section 522(e) relates to surface coal mining operations on both 
Federal and non-Federal lands. Given this distinction and the 
references in section 601 to withdrawal of public lands from mineral 
entry or leasing, we believe that it is reasonable to conclude that the 
VER provision in section 601 refers to rights under the General Mining 
Law, the Mineral Leasing Act, and similar Federal statutes concerning 
the management and disposition of Federal lands and minerals. As 
discussed in Part VIII of this preamble, the concepts of VER under 
other Federal statutes are not readily translatable to VER under 
section 522(e).
    And, most importantly, under the canons of statutory construction, 
the colloquy deserves little weight as a statement of congressional 
intent. The quoted exchange is an extemporaneous discussion between two 
legislators, reflecting their individual concerns and perceptions, and 
it does not appear in any form in any congressional report. Thus, it 
cannot be relied upon or accorded substantial weight as an expression 
of congressional intent concerning VER under section 522(e). See PSMRL 
I, 627 F.2d 1346, 1362 (D.C. Cir. 1980) reh. den. July 10, 1980, 
quoting Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921), and 
referencing 2A Sutherland, Statutory Construction, Sec. 48.13 (4th ed. 
1973), which states that legislative debates ``are not a safe guide * * 
* in ascertaining the meaning and purpose of the law-making body'' 
because they are merely ``expressive of the views and motives of 
individual members.''
    One commenter argued that a takings standard would be more 
restrictive and environmentally protective than a good faith/all 
permits standard in situations in which application of the prohibitions 
would not constitute a compensable taking even though a good faith 
effort to obtain all permits had been made. While this situation is 
theoretically possible, the environmental impact statement for this 
rulemaking predicts that, on balance, the good faith/all permits 
standard would be more environmentally protective than a takings 
standard.
5. Why Did We Reject the Ownership and Authority Standard?
    Many commenters argued that the legislative history of SMCRA, in 
combination with court decisions concerning section 522(e) of the Act 
and its implementing regulations, compel the adoption of an ownership 
and authority standard for VER as the only effective means of complying 
with the expressed intent of Congress to preserve property rights and 
avoid infringement on State property law. Commenters also noted that 
the ownership and authority standard has some of the favorable 
characteristics that we ascribed to the good faith/all permits 
standard. In particular, they stated that the ownership and authority 
standard is a bright-line standard, easy to understand and administer, 
and more objective than the takings standard.
    We agree with the commenters that the ownership and authority 
standard is a relatively bright-line standard, relatively easy to 
understand and administer, and arguably more objective than the takings 
standard. However, these characteristics are not the primary factors 
that we considered in selecting the good faith/all permits standard. As 
discussed in part VII.C.2. of this preamble, we believe that the good 
faith/all permits standard best comports with the intent of Congress in 
enacting section 522(e).
    While the legislative history of SMCRA could be construed in a 
manner consistent with an ownership and authority standard for VER 
under section 522(e), we do not concur with the commenters' assertions 
that the legislative history and judicial remarks concerning that 
history compel the adoption of an ownership and authority standard. 
Indeed, one of the cases frequently cited, NWF v. Hodel, 839 F.2d 694 
(1988), states: ``Neither the statutory language nor the legislative 
history elaborate on the meaning of the phrase ``valid existing 
rights'' (``VER'').'' Id. at 749.
    The legislative history of section 522(e) provides little clear or 
dispositive guidance on the purpose or meaning of the VER exception 
apart from the statement in both the Senate and House Committee reports 
that the phrase ``subject to valid existing rights'' in section 522(e) 
is intended to clarify that the prohibition on strip mining in the 
national forests is subject to previous State court interpretations of 
VER, such as the Polino decision in West Virginia. The congressional 
reports further state that this phrase is ``in no way intended to open 
up national forest lands to strip mining where previous legal 
precedents have prohibited stripping.'' H. R. Rep. No. 95-218, at 95 
(1977) and S. Rep. No. 95-128, at 94-95 (1977).
    Commenters interpreted these passages, in combination with the 
separate views that Congressman Lujan attached to the House report, as 
meaning that Congress intended an ownership and authority standard for 
VER. In his statement of separate views, Congressman Lujan argued that:

    As the Committee Report indicates, this section's limitation 
that the prohibition is ``subject to valid existing rights'' is not 
intended to open up national forest lands to strip mining when 
previous legal precedents have prohibited stripping. Naturally, the 
bill's language is also subject to the corollary that it is not 
intended to preclude mining where the owner of the mineral has the 
legal right to extract the coal by surface mining method[s].

H.R. Rep. No. 95-218, at 189 (1977).
    However, the interpretation that Congressman Lujan insists is a 
corollary to the House committee report language appears only in his 
statement of separate views. If a majority of the committee concurred 
with his views, this corollary presumably would have appeared in the 
committee report. Because the committee report does not endorse 
Congressman Lujan's corollary, we are not persuaded that his 
interpretation of the committee report and the bill's language is a 
legitimate expression of the intent of Congress as a whole.
    In addition, the interpretation advanced by Congressman Lujan and 
endorsed by the commenters likely would negate the section 522(e) 
prohibitions in most situations except those involving unleased Federal 
coal. This result would be inconsistent with the frequently expressed 
desire of Congress to prevent new surface coal mining operations in the 
areas listed in section 522(e), with certain exceptions. See, e.g., S. 
Rep. No. 95-128, at 55 (1977).
    Therefore, we believe that the repeated legislative history 
discussions of the Polino case and property rights on national forest 
lands are best read as expressing Congress' intent that the VER clause 
not be construed in a manner that would ignore limitations under State 
property law. We believe that our reading receives support from the 
statement in the committee reports that the VER clause in section 
522(e) is ``in no way intended to open up national forest lands to 
strip mining where previous legal precedents have prohibited 
stripping.'' H.R. Rep. No. 95-218, at 95 (1977) and S. Rep. No. 95-128, 
at 94-95 (1977). And, regardless of which reading is correct, there is 
no clear indication that Congress intended these discussions to apply 
to lands other than the ones listed in section 522(e)(2) (Federal lands 
in national forests). See, e.g., 5 J. Min. L. & Pol'y 585, 591, 592, 
596 (1990).

[[Page 70785]]

    Some commenters cited a colloquy between Congressmen Delbert Latta 
and Morris Udall during floor debate on the 1975 version of SMCRA as 
supporting an ownership and authority standard for VER under section 
522(e). In this colloquy, Congressman Latta asked ``whether this 
legislation affects in any way the rights of an owner of mineral rights 
situated below land owned by the Federal Government.'' 121 Cong. Rec. H 
6679 (March 14, 1975). After a lengthy discussion, the colloquy 
concludes with the following exchange:

    Mr. LATTA. * * * [I]f I understood what you said, this bill does 
not deal with the situation propounded in my question, meaning where 
a private citizen has sold the surface to the Federal Government and 
has retained the mineral rights. This bill would not in any way 
affect the mineral rights of that private citizen?
    Mr. UDALL. This is a bill that deals with how one mines coal in 
that situation and every other situation, but we do not attempt to 
change property rights in the situation the gentleman talks about 
and thus the mineral rights are not affected.

121 Cong. Rec. H 6679 (1975).

    Although this colloquy does not specifically mention section 522(e) 
or VER, some commenters interpret Congressman Udall's concluding 
response as equating property rights under State law with VER under 
section 522(e). However, we believe that his response is better read as 
expressing the congressman's opinion that those provisions of SMCRA 
that govern how and where one may mine coal do not change mineral or 
other property rights. In any event, as discussed in part VII.C.4. of 
this preamble, legislative debates cannot be relied upon or accorded 
substantial weight as an expression of congressional intent. See PSMRL 
I, 627 F.2d 1346, 1362 (D.C. Cir. 1980) reh. den. July 10, 1980.
    Furthermore, in 1975, the House rejected an amendment that would 
have replaced the phrase ``subject to valid existing rights'' in 
section 522(e) with a provision allowing surface coal mining operations 
on Federal lands in national forests and grasslands whenever the deeds 
conveying lands to the United States reserved the coal and specifically 
provided for the use of surface mining methods. 121 Cong. Rec. H 7048-
50 (March 18, 1975). We find the House's rejection of an amendment 
providing an express ownership and authority standard for VER on 
Federal lands in national forests to be strongly suggestive of 
congressional intent. That is, we believe that this rejection suggests 
that Congress did not intend an ownership and authority standard for 
VER.
    Except for lands with unleased Federal coal, an ownership and 
authority standard would offer no significant protection to section 
522(e) lands beyond that independently afforded by the right-of-entry 
provisions of SMCRA's permitting requirements. Those permitting 
requirements apply to all surface coal mining operations on all lands. 
We find it unlikely that Congress intended the VER exception to be so 
broad that the prohibitions and restrictions of section 522(e) would 
afford only marginal and duplicative protection to most lands listed in 
that section. See the statements emphasizing the importance of 
protecting these lands in S. Rep. No. 95-128, at 54-55 and 94 (1977).
    Industry argues that the ownership and authority standard would 
still give meaning to the prohibitions of section 522(e) because it 
would prohibit surface coal mining operations on those lands in section 
522(e) for which the Federal Government owns the mineral interests. We 
do not agree with the commenters' argument. Federal coal leases in 
existence at the time that land comes under the protection of section 
522(e) and 30 CFR 761.11 might convey sufficient property rights to 
satisfy an ownership and authority standard. Furthermore, we do not 
believe that Congress intended to restrict the prohibitions in this 
fashion. If it did, Congress could have achieved this result in a far 
more straightforward manner by prohibiting any future leases of Federal 
coal interests for the lands listed in section 522(e). In fact, 
Congress did just that with respect to Federal lands designated as 
unsuitable for all or certain types of surface coal mining operations 
pursuant to section 522(b) of the Act. In addition, if this were 
Congress' sole intent in creating section 522(e), Congress would have 
had little reason to enact the prohibitions of paragraphs (e)(3) 
through (e)(5) of that section, since these paragraphs apply primarily 
to non-Federal lands.
    Commenters favoring the ownership and authority standard and 
opposing the good faith/all permits standard cite various Federal court 
decisions involving the application of SMCRA requirements as supporting 
their position. These cases include Meridian Land & Mineral Co. v. 
Hodel, 843 F.2d 340, 346 (9th Cir. 1988); Ainsley v. U.S., 8 Cl.Ct. 
394, 401 (1985); Otter Creek Coal Co. v. U.S., 231 Ct. Cl. 878, 880 
(1982); Sunday Creek Coal Co. v. Hodel, C.A. No. C-2-88-0416 (S.D. Ohio 
June 2, 1988); and Belville Mining Co. v. U.S., 763 F. Supp. 1411, 1420 
(S.D. Ohio 1991) and 999 F.2d 989, 992 (6th Cir. 1993) (``Belville 
II''). However, apart from Sunday Creek, which lacks precedential 
effect outside the Southern District of Ohio, these cases do not 
involve a challenge to the validity of the good faith/all permits 
standard for VER. Indeed, except for Belville II and Sunday Creek, the 
decisions do not even involve VER determinations. Therefore, to the 
extent that the judicial opinions cited by the commenters theorize on 
the meaning of VER under section 522(e), those statements of theory are 
properly regarded as dicta because that question was not properly 
before the court in any of these cases.
    Furthermore, the theoretical discussions in these opinions 
generally center on the colloquy between Congressmen Udall and Roncalio 
concerning VER under section 601 of the Act. See 123 Cong. Rec. H 12878 
(1977) (April 29, 1977). We believe that the colloquy, which does not 
concern surface coal mining operations or section 522(e), has little 
relevance to the meaning of VER under section 522(e). As discussed in 
part VII.C.4. of this preamble, it cannot be relied upon or accorded 
substantial weight as an expression of congressional intent concerning 
VER under section 522(e). See PSMRL I, 627 F.2d 1346, 1362 (D.C. Cir. 
1980) reh. den. July 10, 1980 (citations omitted).
    In Belville II, the courts did not consider any regulatory 
definition of VER in determining whether Belville had the right to 
conduct surface coal mining operations on Federal lands within the 
Wayne National Forest. Instead, they proceeded directly to an 
examination of property rights under State law, finding that Belville 
had VER under SMCRA whenever it had authority under State property law 
to conduct surface coal mining operations. However, these decisions 
lack precedential effect outside the Sixth Circuit.
    For the reasons discussed above and in other portions of Part 
VII.C. of this preamble, we decline to adopt the rationale advanced in 
the Belville II decisions. We believe that the legislative history of 
SMCRA either supports or is not demonstrably inconsistent with adoption 
of a good faith/all permits standard for VER. In addition, we believe 
that the good faith/all permits standard is the most reasonable policy 
choice for a VER standard consistent with the purposes of section 
522(e) as discussed in part VII.C.2. of this preamble.
    Commenters also point to the decision of the U.S. Court of Appeals 
for the Federal Circuit upholding the portion of the 1983 VER 
definition that extended VER to existing operations on lands that

[[Page 70786]]

come under the protection of section 522(e) after August 3, 1977. In 
its opinion, the court stated that:

    The legislative history, however, is of some help. Although it 
does not answer the specific question before us, it does suggest 
that Congress did not intend to infringe on valid property rights or 
effect takings through section 522(e).

NWF v. Hodel, 839 F.2d at 750 (1988) (footnote omitted).

    However, the court did not identify any element of the Act's 
legislative history that supports this conclusion. And its opinion also 
states: ``Neither the statutory language nor the legislative history 
elaborate on the meaning of the phrase `valid existing rights' 
(``VER'').'' Id. at 749. Finally, we note that the entire VER 
definition was not before the court--only the issue of VER for 
operations in existence on lands coming under the protection of the Act 
after August 3, 1977. Therefore, we cannot agree with the commenters 
that the court's decision provides clear guidance concerning the 
meaning of VER under section 522(e).

D. Paragraph (b)(2): ``Needed for and Adjacent'' Standard.

1. What Is the History of This Standard
    The needed for and adjacent standard first appears in the 
definition of VER promulgated on March 13, 1979 (44 FR 14902, 15342); 
we did not include it in the 1978 proposed rule that preceded the 1979 
final rule. The 1979 definition provided that a permit applicant with a 
property right to produce coal by surface coal mining operations as of 
August 3, 1977, possessed VER if the coal was both needed for and 
immediately adjacent to an ongoing surface coal mining operation for 
which all permits were obtained prior to August 3, 1977. The preamble 
provides the following explanation of the basis for this standard:

    In analyzing the value of the property, the courts have 
distinguished an owner's value in an ongoing operation which must be 
halted, as compared with value that an owner has paid for some 
future operation that will be restricted. The taking cases reflect 
less sympathy for property owners who are denied some future 
opportunity to exploit their property interests based on prior 
beliefs that the property would be available for development; but 
most courts express concern over government interference with an 
ongoing operation which causes a 100 percent diminution in value 
unless it is a harmful use and falls within the noxious use 
category. This distinction suggests that VER could be defined 
differently for owners of coal which is essential to continue an 
ongoing mine, as compared to property rights in coal for a potential 
new mine.
44 FR 14992, March 13, 1979, col. 2.

    The National Wildlife Federation challenged this standard as unduly 
expanding the scope of the VER exception beyond that intended by 
Congress. However, the court upheld the standard, finding it to be ``a 
rational method of allowing mining when denial would gravely diminish 
the value of the entire mining operation, thereby constituting a taking 
under Supreme Court declarations.'' PSMRL I, Round I, 14 Env't Rep. 
Cas. (BNA) at 1091-92 (1980).
    On September 14, 1983 (48 FR 41312, 41349), we promulgated a 
revised definition of VER that modified the needed for and adjacent 
standard by deleting the requirement for a demonstration that the 
property right to remove the coal by surface coal mining operations 
existed as of August 3, 1977 (although our response to a comment 
concerning this issue at 48 FR 41316 suggests that the deletion may 
have been unintentional). In that rulemaking, we also defined ``needed 
for'' as meaning that the extension of mining to the coal in question 
is essential to make the surface coal mining operation as a whole 
economically viable.
    The National Wildlife Federation challenged these changes as being 
both procedurally and substantively improper. The U.S. District Court 
for the District of Columbia agreed in part, finding that we had failed 
to comply with the Administrative Procedure Act (5 U.S.C. 553) by not 
affording the public adequate notice and opportunity for comment on 
these two changes. The court did not rule on the merits of the revised 
standard. See PSMRL II, Round III-VER, 22 Env't Rep. Cas. (BNA) at 
1566-67.
    On November 20, 1986 (51 FR 41952, 41961), we suspended paragraph 
(c) of the 1983 definition of VER. In the preamble to the suspension 
notice, we stated that, pending adoption of a new rule, we would rely 
upon the approved State program definition in primacy States. In non-
primacy States, the suspension had the effect of restoring the 1979 
version of the needed for and adjacent standard, which did not contain 
a definition of ``needed for.'' See 51 FR 41954-55, November 20, 1986.
    On July 18, 1991 (56 FR 33152, 33164), we proposed to revise the 
1983 definition by reinstating the property rights demonstration 
requirement and by removing the sentence defining the ``needed for'' 
component of the standard. In the preamble to that proposed rule, we 
stated that the explanation of ``needed for'' in the 1983 definition 
did not substantively clarify the meaning or application of the needed 
for and adjacent standard. In addition, we proposed to replace the 
requirement that both the operation and the property rights to expand 
the operation onto adjacent lands have been in existence on August 3, 
1977, with a requirement that both have been in existence on the date 
that the land for which the exception is sought came under the 
protection of 30 CFR 761.11 and section 522(e) of the Act. The latter 
change reflects the concept embodied in paragraph (d)(1) of the former 
(1983) definition, which was upheld in NWF v. Hodel, 839 F.2d at 750 
(1988).
2. How Did We Propose To Revise This Standard in 1997?
    On January 31, 1997 (62 FR 4836, 4860), we proposed a needed for 
and adjacent standard similar to the one proposed in 1991, with a few 
modifications. In addition to the changes in the property rights 
demonstration component (see Part VII.B. of this preamble), the 1997 
proposed rule specified that the standard would apply to land, not just 
coal, needed for an existing operation. Under State law, a permittee or 
operator may have legitimate property interests in land apart from the 
coal itself. Land may be essential to the operation for reasons other 
than the coal it contains. For example, an operator has little leeway 
in the location of ventilation shafts for underground mines. Part 
VII.B. of this preamble contains a more extensive discussion of this 
issue.
    The definition proposed in 1997 also attempted to eliminate any 
ambiguity caused by use of the term ``ongoing surface coal mining 
operation'' in the 1979 and 1983 rules. In 1991, we essentially 
proposed to replace ``ongoing'' with ``existing.'' However, comments 
received on that proposal indicated some uncertainty as to whether 
``ongoing'' or ``existing'' included operations that are fully approved 
but inactive or unstarted. Accordingly, in 1997, we proposed to define 
this standard to include land needed for and adjacent to surface coal 
mining operations for which all permits had been obtained, or a good 
faith effort to obtain such permits had been made, before the land came 
under the protection of 30 CFR 761.11 and section 522(e) of the Act. 
The preamble to the proposed rule explained that we could find no 
rational basis for differentiating between active operations and those 
that are approved but inactive or unstarted. Both categories of 
operations engender the same type of investment-backed expectations. 
Both involve situations in which the permittee has

[[Page 70787]]

made significant resource outlays in an effort to realize those 
expectations.
3. How Does the Standard in the Final Rule Differ From the One That We 
Proposed in 1997?
    After evaluating the comments received, we are adopting the needed 
for and adjacent standard as proposed in 1997, with several substantive 
and editorial changes. To establish VER under the needed for and 
adjacent standard in paragraph (b)(2) of the definition of VER in the 
final rule, a person must (1) make the property rights demonstration 
required by paragraph (a) of the definition, and (2) document that the 
land is both needed for and immediately adjacent to a surface coal 
mining operation for which all permits and other authorizations 
required to conduct surface coal mining operations had been obtained, 
or a good faith effort to obtain all necessary permits and 
authorizations had been made, before the land came under the protection 
of 30 CFR 761.11 and section 522(e) of the Act.
    In addition, we are adding the following language to the rule in 
response to comments:

    To meet this standard, a person must demonstrate that 
prohibiting expansion of the operation onto that land would unfairly 
impact the viability of the operation as originally planned before 
the land came under the protection of Sec. 761.11 or 30 U.S.C. 
1272(e). Except for operations in existence before August 3, 1977, 
or for which a good faith effort to obtain all necessary permits had 
been made before August 3, 1977, this standard does not apply to 
lands already under the protection of Sec. 761.11 or 30 U.S.C. 
1272(e) when the regulatory authority approved the permit for the 
original operation or when the good faith effort to obtain all 
necessary permits for the original operation was made.
    In evaluating whether a person meets this standard, the agency 
making the determination may consider factors such as:
    (i) The extent to which coal supply contracts or other legal and 
business commitments that predate the time that the land came under 
the protection of Sec. 761.11 depend upon use of that land for 
surface coal mining operations.
    (ii) The extent to which plans used to obtain financing for the 
operation before the land came under the protection of Sec. 761.11 
rely upon use of that land for surface coal mining operations.
    (iii) The extent to which investments in the operation before 
the land came under the protection of Sec. 761.11 rely upon use of 
that land for surface coal mining operations.
    (iv) Whether the land lies within the area identified on the 
life-of-mine map submitted under Sec. 779.24(c) or Sec. 783.24(c) of 
this chapter before the land came under the protection of 
Sec. 761.11.

    As stated in the preamble to the proposed rule, abandoned sites and 
sites with expired or revoked permits, including permits that have 
expired under section 506(c) of SMCRA, do not qualify as operations 
that could form the basis for a VER determination under the needed for 
and adjacent standard. Nor do long-inactive facilities for which no 
permit was required before SMCRA and which would have to be 
substantially or completely reconstructed before usage could resume. 
Allowing defunct operations such as those listed above to qualify as 
existing or authorized operations would contradict the plain meaning of 
that term and would be inconsistent with the congressional intent to 
prohibit, with certain exceptions, new surface coal mining operations 
on the lands identified in section 522(e). See, for example, S. Rep. 
No. 95-128, at 55 (1977).
4. What Comments Did We Receive on the Proposed Standard and How Did We 
Dispose of Them?
    Some commenters opposed reinstatement of any type of requirement 
for a property rights demonstration as part of the needed for and 
adjacent standard, arguing that Congress intended the exception for 
existing operations in section 522(e) to apply to all lands needed by 
existing surface coal mining operations, regardless of whether those 
operations had the legal right to mine those lands when the land came 
under the protection of section 522(e). We have revised the definition 
in the final rule in a manner that will allow the needed for and 
adjacent standard to be met even if the operation for which the land is 
needed and to which it is adjacent does not yet own the requisite 
property rights for the land. However, in that situation, the property 
right to conduct the type of surface coal mining operations intended 
must exist at the time that the land comes under the protection of 30 
CFR 761.11 or section 522(e), and the property rights demonstration 
required by paragraph (a) of the definition must be made as part of the 
request for a VER determination.
    One commenter expressed concern that the proposed rule did not 
explicitly address ``the misconception that the land for which VER is 
claimed must be `immediately adjacent' to an area covered by a permit 
issued or applied for before the enactment of SMCRA.'' The commenter 
noted that many large mining operations include sufficient reserves to 
operate for 20 to 50 years, even though, at least in pre-SMCRA times, 
most did not seek a permit for these lands that far in advance of 
mining. Because of the investments in reserves, land, equipment, and 
long-term coal supply contracts made on the assumption that these 
reserves would be available for surface coal mining operations, the 
commenter argued that all such lands should be considered part of, or 
at least needed for, the surface coal mining operation in existence at 
the time that the land came under the protection of 30 CFR 761.11 and 
section 522(e).
    As the commenter implicitly acknowledges, section 506(b) of SMCRA 
authorizes the issuance of a permit with a term in excess of 5 years 
when the applicant demonstrates a need for the longer term to obtain 
necessary financing. Even if the applicant does not qualify for a 
``life-of-mine'' permit term, nothing in SMCRA prohibits a company from 
seeking a permit with a normal term for the entire area upon which it 
plans to conduct operations for the life of the mine. Section 506(d) of 
the Act provides that any valid permit has the right of successive 
renewal upon expiration for lands within the permit area at that time. 
Once a valid permit exists for an area, that area becomes part of an 
existing operation and thus qualifies for the exception for existing 
operations under 30 CFR 761.12. Therefore, we do not believe that the 
commenter's concerns are valid with respect to post-SMCRA operations, 
because the operator or permittee can avoid these problems with proper 
planning.
    However, we recognize the possibility that operations that started 
before SMCRA may have a legitimate concern. Therefore, we have added 
language to the definition to clarify that, in evaluating whether a 
person meets the needed for and adjacent standard, the agency making 
the determination may consider factors such as:
     The extent to which coal supply contracts or other legal 
and business commitments that predate the time that the land came under 
the protection of section 522(e) or 30 CFR 761.11 depend upon use of 
that land for surface coal mining operations.
     The extent to which plans used to obtain financing for the 
operation before the land came under the protection of section 522(e) 
or 30 CFR 761.11 rely upon use of that land for surface coal mining 
operations.
     The extent to which investments in the operation before 
the land came under the protection of section 522(e) or 30 CFR 761.11 
rely upon use of that land for surface coal mining operations.
    We believe that these provisions will adequately protect the 
interests of companies that acquired contiguous

[[Page 70788]]

reserves for a pre-SMCRA operation with the expectation of being able 
to obtain permits for those reserves in a sequential fashion.
    One commenter also urged deletion of the ``immediately adjacent'' 
portion of the standard since, to meet market specifications, companies 
may need coal of a different quality for an operation if the coal 
immediately adjacent to the existing operation does not satisfy a 
customer's demands. We do not agree that changing market conditions 
provide a basis for VER under the needed for and adjacent standard. 
This situation represents the normal risks of the marketplace--and we 
do not believe that failure to anticipate changing market conditions 
entitles an operation to protection from the prohibitions of 30 CFR 
761.11 and section 522(e).
    However, there may be situations in which the company has included 
the coal in its mining plans but, for legitimate reasons, has been 
unable to obtain a permit for that area before the land came under the 
protection of section 522(e) and 30 CFR 761.11 despite efforts to do 
so. Therefore, we have revised the definition to include language that 
would allow the agency making the determination to consider lands 
within the area identified on the life-of-mine map submitted under 30 
CFR 779.24(c) or 783.24(c) before the land came under the protection of 
30 CFR 761.11 and section 522(e) to be adjacent to the original 
operation on a case-by-case basis. By adding this language, we do not 
intend to imply that all lands within the area identified on the life-
of-mine map automatically qualify for the VER exception under the 
needed for and adjacent standard. The agency responsible for the VER 
determination must evaluate each situation on its merits and determine 
whether the request meets all requirements of the needed for and 
adjacent standard, including a demonstration that prohibiting expansion 
of the operation onto those lands would unfairly impact the viability 
of the operation as originally planned before the land came under the 
protection of Sec. 761.11 or 30 U.S.C. 1272(e).
    In addition, there is some flexibility in the term ``adjacent,'' 
which ``Black's Law Dictionary'' defines as:

    Lying near or close to; sometimes, contiguous; neighboring. 
Adjacent implies that the two objects are not widely separated; 
though they may not actually touch, * * * while adjoining imports 
that they are so joined or united to each other that no third object 
intervenes.

    Certainly, an intervening road, pipeline, stream, or power line 
would not preclude land from being considered immediately adjacent to 
an existing operation's permit boundaries. Beyond that point, 
application of the needed for and adjacent standard is of necessity a 
judgment call, best decided on a documented, case-by-case basis by the 
agency responsible for the VER determination. In making this 
determination, the agency must consider both the ``needed for'' and 
``immediately adjacent to'' components of the standard. That is, a 
determination that the land is immediately adjacent to an existing 
operation, or an operation for which a good faith effort has been made 
to obtain all necessary permits, is not sufficient to find that the 
operation may proceed onto those lands under the VER exception. As 
stated in the final rule, the agency also must find that prohibiting 
expansion of the operation onto those lands would unfairly impact the 
viability of the operation as originally planned before the land came 
under the protection of 30 CFR 761.11 or section 522(e).
    Several commenters argued that the scope of the needed for and 
adjacent standard should be coextensive with that of the prime farmland 
grandfather exemption in section 510(d)(2) of the Act. According to one 
commenter, if an area has been determined to be part of an existing 
surface coal mining operation for purposes of the prime farmland 
grandfather exemption, then that area must qualify for the VER 
exception under the needed for and adjacent standard. We do not agree. 
The needed for and adjacent standard is part of the VER exception in 
section 522(e), not the exception for existing operations. Furthermore, 
the needed for and adjacent standard is created by rule, not by 
statute. Therefore, the argument that Congress must have intended 
similar terms to have similar meanings is not applicable, as Congress 
did not devise the needed for and adjacent standard.
    Some commenters asserted that because the needed for and adjacent 
standard requires the existence of an operation for which all permits 
have been obtained or a good faith effort to obtain all permits has 
been made, this standard should be a component of the exception for 
existing operations rather than the definition of VER. We disagree. 
Section 522(e) does not define either VER or the exception for existing 
operations, apart from describing the latter exception as including 
``surface coal mining operations which exist on the date of enactment 
of this Act.'' Therefore, we have considerable latitude in developing a 
final rule to implement these provisions of the Act. We believe that 
the final rule is a reasonable interpretation of both the VER exception 
and the exception for existing operations.
    In developing the 1997 proposed rule and this final rule, we 
endeavored, for practical reasons, to limit the exception for existing 
operations to those situations in which the operator has full 
authorization to conduct surface coal mining operations on the lands in 
question before those lands came under the protection of section 522(e) 
and 30 CFR 761.11. In other words, the exception for existing 
operations applies in those circumstances in which the regulatory 
authority does not need to take any additional action before the 
operator may continue or commence surface coal mining operations on the 
newly protected lands. In contrast, a person planning to conduct 
surface coal mining operations under the VER exception in the final 
rule must (1) demonstrate the existence of VER, and (2) obtain a permit 
from the regulatory authority before initiating surface coal mining 
operations on protected lands. There is some overlap between the two 
exceptions in that persons who have obtained all necessary permits and 
authorizations to operate before the land comes under the protection of 
30 CFR 761.11 and section 522(e) may either request a VER determination 
or avail themselves of the exception for existing operations.
    Some commenters argued that the needed for and adjacent standard 
functioned purely as a transitional device between pre-SMCRA and post-
SMCRA regulatory schemes. Since that transition is now complete, 
commenters assert that the standard is obsolete and should be removed 
or at least limited to surface coal mining operations in existence on 
August 3, 1977, the date of enactment of SMCRA. According to the 
commenters, the Constitution provides no protection to speculative 
investments. In addition, the commenters argue that the passage of 
SMCRA placed all parties on notice that surface coal mining operations 
in certain areas would be prohibited in the future, and that operators 
therefore should have planned their operations and acquired property 
and mining rights with a view to the existence of those prohibitions. 
In other words, the commenters assert that there is no longer any basis 
for anyone to have a reasonable expectation that properties outside the 
boundary of a mining permit could be incorporated into the permit area 
or mining plan.

[[Page 70789]]

    As discussed earlier in this section of the preamble, the Act's 
provisions allowing life-of-mine permit terms and granting a right of 
successive renewal to permits with normal terms should minimize the 
need for the needed for and adjacent standard for mines that begin 
operations after August 3, 1977. However, we do not agree that this 
standard has no post-transitional value. Nor do we agree that the 
standard should be limited to operations in existence on August 3, 
1977. The commenters' argument that the needed for and adjacent 
standard is purely a transitional device for persons who did not 
anticipate the enactment of SMCRA is true only if one assumes that no 
one would have a reasonable expectation of being able to conduct 
surface coal mining operations under the VER exception in section 
522(e).
    Since SMCRA does not define VER, this assumption is not necessarily 
correct. In particular, we do not agree with the commenters that, after 
the enactment of SMCRA, a person had a reasonable expectation of 
conducting surface coal mining operations on the lands listed in 
section 522(e) only if those lands were already under permit on August 
3, 1977. The history of our attempts to define VER by regulation 
provides some basis for persons to anticipate that the VER exception 
sweeps more broadly than the good faith/all permits standard. And in 
1983, we adopted a standard for ``continually created VER,'' which 
provided for the determination of VER on the basis of rights and 
documents in existence as of the date that the land came under the 
protection of section 522(e) and 30 CFR 761.11 rather than as of August 
3, 1977. The courts subsequently recognized this approach as valid. See 
PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1564 (1985), and 
NWF v. Hodel, 839 F.2d at 749-751 (1988). Adoption and judicial 
affirmation of this standard created the expectation that the VER 
exception would not be limited to lands under permit on August 3, 1977, 
or to operations in existence on that date. Similarly, our approval of 
a takings standard for VER as part of the West Virginia program in 1983 
and as part of the Illinois program in 1989 may have created the 
expectation, at least in those States, that the VER exception is not 
limited to the good faith/all permits standard and that a person may 
have the right to conduct surface coal mining operations in protected 
areas even if an operation was not in existence on August 3, 1977.
    Therefore, the final rule retains the needed for and adjacent 
standard and, as proposed, it extends that standard to lands needed for 
and immediately adjacent to surface coal mining operations in existence 
when those lands came under the protection of section 522(e) after 
August 3, 1977. Extension of the standard to these lands is a fair 
means of addressing the expectations discussed above. In addition, it 
is consistent with the purpose of the continually created VER standard 
that we adopted in 1983.
    Some commenters challenged our extension of this standard to lands 
needed for and immediately adjacent to operations for which a good 
faith attempt had been made to obtain all necessary permits. They 
argued that the standard should apply only to operations that had 
already received all necessary permits since only those operations 
could legitimately be considered existing operations. We do not agree. 
The scope of the VER exception is not restricted by the scope of the 
exception for existing operations in 30 CFR 761.12. We believe that the 
needed for and adjacent standard should apply to lands needed for and 
immediately adjacent to an operation for which a good faith attempt has 
been made to obtain all necessary permits since there is no question 
that such an operation has VER under paragraph (b)(1) of the definition 
of VER in the final rule. Accordingly, we believe that inclusion of a 
good faith component in the needed for and adjacent standard is 
appropriate because it provides fair treatment of reasonable 
expectations while avoiding significant impairment of the prohibitions 
of section 522(e).
    In the preamble to the proposed rule, we stated that, to avoid 
subverting the congressional prohibitions in section 522(e), we 
believed that VER determinations under the needed for and adjacent 
standard must be based on an analysis of how denial of the claim would 
affect the value, as of the date that the land came under the 
protection of 30 CFR 761.11 and section 522(e), of the operation as a 
whole from the time it began operation, not merely whether the 
additional land or coal would prolong the operation's life or provide 
increased profits. Otherwise, we stated, this standard could be used to 
justify unlimited expansion of operations adjoining protected areas, 
which could effectively nullify the prohibition. We suggested that this 
approach receives implied support in PSMRL I, Round I, 14 Env't Rep. 
Cas. (BNA) at 1091-92 (1980), in which the court upheld the needed for 
and adjacent standard as a reasonable means of avoiding compensable 
takings:

    The need and adjacent [sic] component of the Secretary's 
definition is consonant with Supreme Court declarations regarding 
taking of property. This test allows the grant of a valid existing 
right exemption when extension of mining to an adjacent area is 
necessary to maintain, as a whole, the value of the mining 
operation. Stated otherwise, the need and adjacent test requires a 
valid existing right exemption when denial of mining on the adjacent 
area will rob the mining operation, as a whole, of its value. See 
Penn Central, supra, 438 U.S. 130 at 130-31; Goldblatt v. Hempstead, 
369 U.S. 590, 8 L. Ed. 2d 130, 82 S. Ct. 987 (1962). The need and 
adjacent test is thus a rational method of allowing mining when 
denial would gravely diminish the value of the entire mining 
operation, thereby constituting a taking under Supreme Court 
declarations.

    In the preamble to the proposed rule, we requested comment on 
whether the rule language should be revised to explicitly incorporate 
this interpretation. Most commenters did not respond to this request. 
Of those who did, some favored codification of our preamble 
interpretation as a welcome limit on the scope of the exception. Others 
opposed this interpretation as too restrictive, too burdensome, and 
inconsistent with our arguments in favor of the good faith/all permits 
standard and against the takings standard. One commenter stated that it 
is disingenuous for us to argue, on the one hand, that Congress did not 
intend to define the VER exception in terms of avoiding compensable 
takings, and then to propose to define or interpret the needed for and 
adjacent standard in a manner that resembles a takings standard.
    One commenter asserted that the interpretation in the preamble to 
the proposed rule ignores the court's direction in PSMRL I, Round I, 14 
Env't Rep. Cas. (BNA) at 1091-92 (1980), and is impermissibly 
ambiguous. According to this commenter, the only legal interpretation 
is the ``gravely diminish'' standard that the court cited in the 
decision quoted above. We disagree. The court's reasoning does not 
require or suggest that we apply a takings analysis in determining 
whether a VER claim meets the needed for component of the needed for 
and adjacent standard. The court merely found that the 1979 needed for 
and adjacent standard was consistent with existing takings 
jurisprudence.
    After evaluating all comments received, we have decided not to 
codify or otherwise adopt the interpretation of ``needed for'' that we 
set forth in the preamble to the proposed rule. We believe that this 
determination is best made on a case-by-case basis by the agency 
responsible for the VER

[[Page 70790]]

determination, relying upon all available information. However, in 
response to those commenters who expressed concern that the lack of a 
definition of ``needed for'' would lead to abuse, we have revised the 
rule to specify that the requester must demonstrate that prohibiting 
expansion of an operation onto the land in question would unfairly 
impact the viability of the operation as originally planned before the 
land came under the protection of 30 CFR 761.11 or section 522(e). We 
also added a list of examples of the type of factors that the agency 
should consider in evaluating whether the land is needed for and 
immediately adjacent to the existing operation. This list is not 
exhaustive and it does not exclude consideration of other appropriate 
factors.
    Finally, in response to comments that the needed for and adjacent 
standard was too broad, we have added a sentence to the definition to 
clarify that, except for operations in existence before August 3, 1977, 
or for which a good faith effort to obtain all necessary permits had 
been made before August 3, 1977, this standard does not apply to lands 
already under the protection of 30 CFR 761.11 and section 522(e) when 
the regulatory authority approved the permit for the original operation 
or when the good faith effort to obtain all necessary permits for the 
original operation was made. We believe that this clarification is 
appropriate because the operator or permittee would have no reasonable 
expectation of being able to conduct surface coal mining operations on 
those lands.

E. Paragraph (c): VER Standards for Roads

    Paragraph (c) of the definition of VER in the final rule provides 
that a person has VER for the use or construction of a road included 
within the definition of ``surface coal mining operations'' in 30 CFR 
700.5 and section 701(28) of the Act if one or more of the following 
circumstances listed in paragraphs (c)(1) through (c)(4) of the 
definition exist:
     The road existed when the land upon which it is located 
came under the protection of 30 CFR 761.11 or section 522(e), and the 
person has a legal right to use the road for surface coal mining 
operations.
     A properly recorded right of way or easement for a road in 
that location existed when the land came under the protection of 30 CFR 
761.11 or section 522(e), and, under the document creating the right of 
way or easement, and under subsequent conveyances, the person has a 
legal right to use or construct a road across the right of way or 
easement for surface coal mining operations.
     A valid permit for use or construction of a road in that 
location for surface coal mining operations existed when the land came 
under the protection of 30 CFR 761.11 or section 522(e).
     A person has VER under paragraphs (a) and (b) of the 
definition of VER.
    With the exception of the modifications discussed below, the first 
three standards resemble those in both the proposed rule and the 
previous (1983) definition.
    The last standard, which we have added as proposed, reflects the 
fact that the definition of surface coal mining operations in section 
701(28) of the Act and 30 CFR 700.5 includes ``all lands affected by 
the construction of new roads or the improvement or use of existing 
roads to gain access to the site of such activities and for haulage.'' 
Therefore, if a person demonstrates VER for surface coal mining 
operations in general under the standards in paragraphs (a) and (b) of 
the definition, there is no reason why that person should have to 
separately demonstrate VER to use or construct roads on that land, 
since those roads are part of the operations for which he or she has 
already demonstrated VER. The standards in paragraphs (a) and (b) are 
of equal or greater rigor when compared with those in paragraphs (c)(1) 
through (c)(3). Accordingly, we have added paragraph (c)(4) to the 
definition to clarify that a person has the option of using the 
criteria and standards in paragraphs (a) and (b) of the definition to 
demonstrate VER for roads.
    One commenter found the phrase ``as of'' in paragraphs (b)(2) and 
(b)(3) of the proposed rule confusing. We have revised the wording of 
these paragraphs, which the final rule redesignates as paragraphs 
(c)(2) and (c)(3), to clarify that a properly recorded right of way or 
easement, or a valid permit, must have existed when the land came under 
the protection of section 522(e) and 30 CFR 761.11.
    As proposed, the final rule modifies the 1983 definition by 
incorporating the concept that VER for lands coming under the 
protection of section 522(e) or 30 CFR 761.11 after August 3, 1977, 
will be determined on the basis of the circumstances that exist when 
the land comes under the protection of section 522(e) and 30 CFR 
761.11, not the circumstances that exist on August 3, 1977. Some 
commenters supported this change, but others opposed it as inconsistent 
with section 522(e) of SMCRA, which references the date of enactment 
(August 3, 1977). As the commenters noted, the courts have held that 
SMCRA does not compel adoption of this approach. However, the same 
courts also have ruled that this approach is a reasonable 
interpretation of SMCRA. See PSMRL II, Round III--VER, 22 Env't Rep. 
Cas. (BNA) at 1564 (1985), and NWF v. Hodel,  839 F.2d at 749-751 
(1988). Also, we believe that requiring that the road, easement, right 
of way, or permit be in place when the land comes under the protection 
of section 522(e) and 30 CFR 761.11 is more reasonable and consistent 
with the principles of basic fairness than requiring that the road, 
easement, right of way, or permit be in place on August 3, 1977, as the 
commenters advocate.
    One commenter opposed this change because it ``would doom all new 
homeowners in coalfield areas to having their rights intruded upon by 
the use of their roads as haul and access roads.'' The commenter 
apparently was operating under the erroneous belief that the 300-foot 
buffer zone for occupied dwellings under section 522(e)(5) and proposed 
30 CFR 761.11(a)(5) [now 30 CFR 761.11(e)] would prohibit use of these 
roads in the absence of VER. We have never interpreted section 
522(e)(5) as prohibiting a surface coal mining operation from using a 
public road that lies within 300 feet of an occupied dwelling.
    The final rule differs from the previous and proposed definitions 
in that it expressly applies to all roads included within the 
definition of ``surface coal mining operations'' in 30 CFR 700.5 and 
section 701(28) of the Act. The 1979 and 1983 versions of this 
definition mentioned only haul roads. In the proposed rule, we used the 
term ``access or haul road.'' One commenter supported the proposed 
rule, noting that prior definitions were interpreted as including 
access roads. The commenter viewed the references to haul roads in 
those definitions as a product of draftsmanship, not intent. Another 
commenter requested, without elaboration, that we revise the rule to 
differentiate between access and haul roads to avoid future misunder- 
standings. After evaluating these comments and reviewing the language 
of the Act, we have decided to avoid any reference to either access or 
haul roads. Instead, paragraph (c) of the definition in the final rule 
applies to all roads included in the definition of surface coal mining 
operations in 30 CFR 700.5 and section 701(28) of the Act. We believe 
that this change is consistent with both the language of the Act and 
our historic approach to the regulation of roads

[[Page 70791]]

under the Act. We do not interpret SMCRA as affording differential 
treatment to roads based on whether they are access or haul roads.
    The definition of surface coal mining operations in section 701(28) 
of the Act includes ``all lands affected by the construction of new 
roads or the improvement or use of existing roads to gain access to the 
site of such activities and for haulage.'' Section 522(e)(4) refers to 
``mine access roads or haulage roads.'' Section 515(b)(18) refers to 
``the construction of roads.'' We have always interpreted section 
515(b)(17), which refers to ``the construction, maintenance, and 
postmining conditions of access roads into and across the site of 
operations,'' as including both access and haul roads since a haul road 
also provides access. No one has opposed this interpretation of section 
515(b)(17), which, in part, provides authority for our regulations 
governing roads that are used or constructed as part of surface coal 
mining operations. Our regulations at 30 CFR 701.5 define ``road'' as 
including both ``access and haul roads,'' but they do not define 
``access road'' or ``haul road.'' And our road classification system 
and performance standards at 30 CFR 816.150 and 817.150 do not 
distinguish between access roads and haul roads. Therefore, we see no 
reason to distinguish between access and haul roads when defining VER 
under section 522(e).
    One commenter opposed adoption of a separate, potentially less 
rigorous standard for VER for roads. We find this comment untimely. 
Both the 1979 and 1983 definitions similarly included separate, 
potentially less rigorous standards for roads, but no one filed suit 
challenging our authority to establish separate standards in those 
rules. Furthermore, we did not propose to change, nor did we seek 
comments on, this aspect of the definition. Like the 1979 and 1983 
rules, both the 1997 proposed rule and this final rule include separate 
standards for VER for roads.
    Several commenters alleged that we improperly adopted the original 
standard for VER for roads in 1979 without providing adequate public 
notice and opportunity for comment as required by the Administrative 
Procedure Act, 5 U.S.C. 551 et seq. One commenter stated that 
justifying a VER standard on the basis of environmental impacts, as we 
did in the preamble to the portion of the 1979 definition pertaining to 
roads, is inappropriate. The commenter also argued that we failed to 
provide documentation in the record of that rulemaking for our claim 
that allowing VER for all existing roads would be less environmentally 
disruptive than constructing new roads. We find these comments untimely 
since the deadline for challenging the 1979 rules has passed.
    One commenter asserted that there is no legal basis for providing a 
lower VER standard for roads than for any other aspect of a regulated 
surface coal mining operation because the statutory definition of 
surface coal mining operations draws no distinction between roads and 
the other activities and facilities that it includes. The commenter 
argued that the person claiming VER must demonstrate investment-backed 
expectations to use the road for surface coal mining operations. 
According to the commenter, if the mere existence of a property right 
to conduct surface coal mining operations does not suffice to 
demonstrate VER under paragraphs (a) and (b) of the definition, then 
the mere existence of a road should not suffice to demonstrate VER for 
a road under paragraph (c)(1) of the definition.
    As discussed in Parts VII.A. through VII.D. of this preamble, we 
are not adopting a takings standard for VER. Hence, we do not agree 
that a person must demonstrate investment-backed expectations to 
qualify for VER. And, because the courts have held that the definition 
of surface coal mining operations does not exclude all public roads, we 
believe that a separate standard for VER for existing roads is 
essential as a practical matter. Unless otherwise provided by the 
agency with jurisdiction over the road, all persons have a right to use 
a public road for any legitimate purpose, including access and haulage 
associated with a surface coal mining operation.
    One commenter noted that the concept of VER presupposes some claim 
of right to use of the road, which the existing and proposed rules did 
not require in all circumstances. The commenter further stated that the 
VER standard for roads should rely upon either the good faith/all 
permits standard or documentation that an existing road was actually in 
use as an access or haul road as of August 3, 1977. Finally, the 
commenter argued that the property rights demonstration required for 
demonstration of VER under paragraph (a) of the definition also should 
be a prerequisite for VER for roads.
    The facets of the proposed definition to which the commenter 
objects (VER for existing roads, regardless of whether the road has 
ever been used for surface coal mining operations, and the lack of a 
property rights demonstration requirement for VER for roads) have 
remained essentially unchanged since we first adopted a definition of 
VER on March 13, 1979. The deadline for challenging the validity of 
that definition has passed. The proposed rule did not alter those 
facets of the definition to which the comments pertain, nor did we seek 
comment on whether they should be changed. Therefore, these comments 
are neither timely nor within the scope of this rulemaking, and there 
is no requirement to address them in this rulemaking.
    However, we agree with the commenter that the concept of VER 
presupposes some claim of right to use of the road under applicable 
State law. Therefore, to avoid misapplication or abuse of the VER 
standards for roads, we have revised the definition in the final rule 
to clarify that, to qualify for VER under the existing road criterion 
in paragraph (c)(1) of the definition, a person must demonstrate a 
legal right to use the road for surface coal mining operations. In 
addition, we have revised paragraph (c)(2) of the definition to clarify 
that, to qualify for VER under the easement or right-of-way criterion, 
a person must demonstrate that, under the document creating the right 
of way or easement and under subsequent conveyances, that person has a 
legal right to use or construct a road across the right of way or 
easement for surface coal mining operations. These changes merely make 
explicit an unstated assumption in both the existing and proposed 
rules.
    The commenter also asserted that the proposed rule would effect an 
uncompensated taking by sanctioning physical intrusion through dust and 
noise on properties adjoining such roads. We do not agree. The VER 
standards for roads would not preclude any private remedy available to 
affected parties under State law, including State trespass and nuisance 
law. Therefore, this rule does not effect a facial taking.

F. How Does the Definition Address VER for Lands That Come Under the 
Protection of Section 522(e) After August 3, 1977?

    As we proposed, each standard in the definition of VER in the final 
rule provides for determination of VER based on property rights and 
other conditions in existence on the date that the land comes under the 
protection of 30 CFR 761.11 and section 522(e) of the Act. This concept 
has sometimes been referred to ``continually created VER.'' We have 
included this concept in the definition of VER in the final rule 
because houses, churches, roads, parks, and other features protected by 
section 522(e) and 30 CFR 761.11 come into

[[Page 70792]]

existence and are expanded on an ongoing basis. In the interest of 
fairness, persons claiming VER for lands coming under the protection of 
the Act after the date of enactment should not have to demonstrate that 
they owned the requisite property rights on August 3, 1977, the date of 
enactment, as the 1979 definition required.
    Some commenters opposed this change as being inconsistent with the 
express language of section 522(e) of SMCRA, which reads: ``After the 
enactment of this Act and subject to valid existing rights no surface 
coal mining operation except those which exist on the date of enactment 
of this Act shall be permitted'' on certain enumerated lands.
    According to the commenters, this language means that the Act does 
not authorize use of a date other than the date of enactment (August 3, 
1977) when determining exceptions from the prohibitions of section 
522(e). Under this interpretation, VER must be determined on the basis 
of property rights and other conditions as they existed on August 3, 
1977.
    We disagree. The Act provides that the prohibitions of section 
522(e) are subject to VER, but it neither defines VER nor specifies 
that VER must be determined on the basis of property rights and other 
conditions as they existed on the date of enactment. Because the lands 
and features protected by 30 CFR 761.11 and section 522(e) are 
continually changing, we believe that VER should be determined on the 
basis of the property rights and circumstances that exist at the time 
that lands come under the protection of section 522(e) and 30 CFR 
761.11, not the date of enactment of SMCRA, which recedes ever further 
into history.
    The commenters argue that this approach violates the purpose of 
section 522(e), which is to prohibit new surface coal mining operations 
on certain lands. They assert that an industry as pervasively regulated 
as coal mining had no reasonable expectation of being able to mine any 
lands without addressing the potential extension of protection to those 
lands once SMCRA became law. They state that the enactment of SMCRA 
placed operators and other interested persons on notice that certain 
lands are subject to the protections of section 522(e), even when the 
features triggering that protection do not come into existence until 
after the enactment of SMCRA. Therefore, according to the commenters, 
any investments after that date are made with full knowledge of that 
risk and are not entitled to protection from the prohibitions of 
section 522(e), regardless of when the features listed in section 
522(e) come into existence.
    One commenter argued that the only way to avoid the proscriptions 
of section 522(e) is to obtain a permit before the lands come under the 
protection of section 522(e). Alternatively, some commenters stated, 
persons conducting surface coal mining operations after the enactment 
of SMCRA should have immediately procured all necessary property rights 
(for example, purchased a 300-foot buffer around all planned minesites 
to preclude application of the prohibition on surface coal mining 
operations within 300 feet of an occupied dwelling) to avoid potential 
adverse impacts from the creation of new protected areas after August 
3, 1977.
    These arguments are identical to those advanced by the National 
Wildlife Federation in a challenge to paragraph (d) of the 1983 
definition of VER, where this concept first appeared. The district 
court rejected those arguments:

    The court does not agree with plaintiffs that the legislative 
history they cite, or the language of the statute[,] requires a 
finding that the Secretary's concept of ``continually created VER'' 
is inconsistent with law. Given the language of the Act, and 
Congress' concern with takings, the court finds that ``continually 
created VER'' is in accord with law.

PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1564 (1985).

    The district court's decision was upheld on appeal. See NWF v. 
Hodel, 839 F.2d at 749-751 (1988). ``We find such a rule to be a 
reasonable interpretation of the Act, and thus affirm the decision of 
the district court upholding the Secretary's VER regulation.'' Id. at 
751.
    These court decisions focused on paragraph (d)(1) of the 1983 
definition of VER. This paragraph established a ``continually created 
VER'' standard for existing operations. However, we believe that the 
rationale underlying this paragraph applies with equal force to all 
standards under the VER exception. In other words, when land comes 
under the protection of 30 CFR 761.11 and section 522(e) after August 
3, 1977, we believe that it is not fair to determine VER for those 
lands on the basis of property rights and other conditions in existence 
on August 3, 1977. Rights under the VER exception should be no less 
important than rights under the exception for existing operations.
    We previously endorsed this principle in adopting paragraph (d)(2) 
of the 1983 definition of VER. This paragraph provided that, when land 
comes under the protection of 30 CFR 761.11 and section 522(e) after 
August 3, 1977, we would determine VER using a takings standard based 
on the property rights that existed when the land came under the 
protection of section 522(e) rather than on the property rights that 
existed on August 3, 1977. The court subsequently remanded this portion 
of the rule because we failed to provide adequate notice and 
opportunity for comment on the takings standard. The court never 
reached a decision on the merits of this paragraph. However, in 
discussing the merits of paragraph (d) in general, the judge 
specifically rejected the argument that the word ``existing'' in the 
term valid existing rights means that those rights must have existed on 
August 3, 1977, the date of enactment of SMCRA. See PSMRL II, Round 
III--VER, 22 Env't Rep. Cas. (BNA) at 1564 (1985). And, in implementing 
the remand order, we suspended paragraph (d)(2) of the 1983 definition 
of VER only to the extent that it incorporated the takings standard. 
See 51 FR 41952, 41961, November 20, 1986.
    One commenter argued that this concept is inconsistent with the 
decision in M&J Coal versus United States, 47 F.3d 1148 (Fed. Cir. 
1995). The commenter argued that this case upheld the principle that 
persons have no legitimate expectation of the right to conduct surface 
coal mining operations on lands that come under the protection of the 
Act after August 3, 1977. We do not agree. In M&J, the court ruled that 
a person who acquires property after passage of a law restricting use 
of that property does not have sufficient legal basis to support a 
claim that the requirements of the law constitute a compensable taking. 
However, this case involved a situation in which a regulatory authority 
limited coal extraction from an underground mine to protect overlying 
structures from the damage that could result from subsidence caused by 
underground mining activities. It did not concern the applicability of 
the VER exception to lands that come under the protection of 30 CFR 
761.11 and section 522(e) after August 3, 1977, the date of enactment. 
Therefore, we do not believe that this decision is relevant to this 
rulemaking.
History and Disposition of Former 30 CFR 761.5(d), the Original 
``Continually Created VER'' Provision
    On September 14, 1983 (48 FR 41312, 41349), we added paragraph (d) 
to the definition of VER to address situations where the prohibitions 
of section 522(e) become applicable to a particular site after August 
3, 1977, the date of enactment of SMCRA. This paragraph provided that:


[[Page 70793]]


    Where an area comes under the protection of section 522(e) of 
the Act after August 3, 1977, valid existing rights shall be found 
if--
    (1) On the date the protection comes into existence, a validly 
authorized surface coal mining operation exists on that area; or
    (2) The prohibition caused by section 522(e) of the Act, if 
applied to the property interest that exists on the date the 
protection comes into existence, would effect a taking of the 
person's property which would entitle the person to just 
compensation under the Fifth and Fourteenth Amendments to the United 
States Constitution.

    Paragraph (d)(1) extended the exception for existing operations to 
validly authorized surface coal mining operations in existence on the 
date that the land upon which they are located comes under the 
protection of section 522(e). Paragraph (d)(2) extended the takings 
standard for VER to property interests that existed on the date that 
the land came under the protection of section 522(e), rather than 
limiting its scope to property interests that existed on August 3, 
1977.
    In PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1564 
(1985), the district court upheld both paragraph (d)(1) and the concept 
of determining VER based upon property rights and conditions in 
existence on the date that land comes under the protection of section 
522(e) rather than property rights and conditions in existence on 
August 3, 1977, the date of enactment of SMCRA. However, the court 
remanded paragraph (d)(2) because it incorporated the takings standard, 
which, the court held, had not been subject to proper notice and 
opportunity for comment under the Administrative Procedure Act. See 22 
Env't Rep. Cas. (BNA) at 1564. The district court's decision was upheld 
on appeal. See NWF versus Hodel, 839 F.2d at 749-751 (1988). To comply 
with these decisions, we subsequently suspended paragraph (d)(2) to the 
extent that it incorporated the takings standard. See 51 FR 41961, 
November 20, 1986.
    The VER definitions proposed on December 27, 1988, and July 18, 
1991, would have deleted paragraph (d) in favor of replacing the 
reference to August 3, 1977, in each of the VER standards in the other 
paragraphs of the definition with a reference to the date that the 
lands came under the protection of section 522(e) of the Act. However, 
neither of the proposed definitions included a counterpart to paragraph 
(d)(1) of the 1983 definition. This omission would have had the effect 
of eliminating the VER standard for existing operations with respect to 
lands that come under the protection of section 522(e) after August 3, 
1977. We did not intend this result. As stated in the preamble to the 
1991 proposal, although paragraph (d) of the 1983 VER definition ``is 
rewritten and reorganized in this proposal, the basic intent and 
application are not changed.'' 56 FR 33156, July 18, 1991.
    Therefore, we have revised the exception for existing operations, 
now located in 30 CFR 761.12, to incorporate language consistent with 
paragraph (d)(1) of the 1983 definition. Specifically, 30 CFR 761.12 
provides that the prohibitions of 30 CFR 761.11 do not apply to (1) 
surface coal mining operations on land for which a valid permanent 
program permit exists when the land comes under the protection of 30 
CFR 761.11 or section 522(e) of SMCRA, or, (2) for surface coal mining 
operations subject to the initial regulatory program in Subchapter B of 
30 CFR Chapter VII, lands upon which validly authorized surface coal 
mining operations exist on that date. Further discussion of this change 
and the exception for existing operations appears in Part XVI of this 
preamble.

VIII. How Does Our Definition of VER Compare With VER Under Other 
Federal Statutes?

    In the preamble to our proposed rule, we stated that the VER 
exception in section 522(e) of SMCRA differs from VER under other 
Federal laws because the section 522(e) VER exception applies to both 
Federal and non-Federal lands while VER provisions under other Federal 
laws apply only to lands in Federal ownership. Also, VER clauses and 
case law under other Federal statutes and executive orders typically 
relate to when a person may complete an already initiated process to 
obtain a property interest in public lands if there is a change in the 
laws or other requirements governing the vesting or perfecting of 
interests in those lands. In contrast, the preamble to the proposed 
rule explains, the VER exception in section 522(e) concerns a person's 
right to use land for a particular purpose (conducting surface coal 
mining operations) when that person already has fully vested property 
rights in the land. We arrived at this conclusion because, unlike other 
Federal statutes with VER provisions, section 522(e) of SMCRA does not 
involve a transfer of property rights or interests from the Federal 
government to another party. Instead, it prohibits surface coal mining 
operations on certain lands, generally without regard to who owns those 
lands.
    Commenters disagreed with our explanation of the significance of 
the difference between SMCRA and other Federal laws. Specifically, one 
commenter argued that the only distinction is the source law used to 
determine the nature of property interests and whether they are 
entitled to protection as VER. According to the commenter, the source 
law for VER under Federal statutes other than SMCRA is the Federal 
statute that prescribes the requirements for creation of a non-Federal 
right or interest in public lands. Conversely, the commenter argued, 
the source law for VER under section 522(e) of SMCRA is State common 
law, at least for non-Federal lands. As discussed in more detail later 
in this section of the preamble, we cannot concur with this analysis 
because to do so would effectively negate the prohibitions of section 
522(e) in most situations.
    The commenter attacked the good faith/all permits standard for VER 
as ``an unlawful attempt to prevent not the mere acquisition of an 
additional interest, but [to] preclude the use or enjoyment of an 
existing property interest under state law.'' The commenter noted that 
many public lands statutes prescribe certain steps or conditions that 
are necessary to secure legal title, equitable title, or other forms of 
property rights to use public lands or resources. According to the 
commenter, the government, in its proprietary capacity, may preclude 
someone from acquiring an additional property interest in public lands 
if that person does not satisfy all necessary conditions, but the 
government cannot extinguish an existing property interest. The 
commenter further noted that the VER exception under section 522(e) of 
SMCRA generally pertains to property rights under State law that are 
fully perfected and vested and that are not conditioned upon the 
satisfaction of any new requirements. Hence, the commenter argues, 
since VER provisions under other Federal statutes have ``historically 
protected unvested property rights in order to allow persons to perfect 
a vested property interest against the United States in its proprietary 
capacity, surely the same principles apply with more force to preserve 
superior vested rights against impairment when the United States acts, 
as it does under SMCRA, in its regulatory capacity.''
    We do not find the commenter's arguments persuasive. As discussed 
in more detail in Part VII.C. of this preamble, the definition of VER 
in this final rule does not extinguish any property rights. We agree 
with the commenter that, at least for non-Federal properties, State law 
is the appropriate source law to determine property rights when making 
a VER determination

[[Page 70794]]

under section 522(e) of SMCRA. But, as discussed below, we do not agree 
that the VER inquiry should end with the property rights demonstration.
    We continue to believe that VER under section 522(e) of SMCRA is 
not analogous to VER under other Federal statutes. We found no 
definitions of VER in other Federal statutes. Our review of these 
statutes, applicable case law, and the literature discussing them 
indicates that the VER provisions in these laws and pertinent executive 
orders usually protect an expectation or property interest that arose 
under an earlier law, which is normally a Federal public lands law but 
may occasionally be State law. Generally, the protected interest is 
less than vested title and is asserted against Federal title. See, 
e.g., Laitos, The Nature and Consequences of ``Valid Existing Rights'' 
Status in Public Land Law, 5 J. Min. L. & Pol'y 399, 416-18 (1990).
    As a commenter noted, the Supreme Court interpreted the phrase 
``valid existing claims'' in a VER exception in an executive order 
concerning the homestead laws in the following manner:

    Obviously, this means something less than a vested right, such 
as would follow from a completed final entry, since such a right 
would require no exception to insure its preservation. The purpose 
of the exception evidently was to save from the operation of the 
order claims which had been lawfully initiated and which, upon full 
compliance with the land laws, would ripen into a title.

Stockley v. United States, 260 U.S. 532, 544 (1923).

    As another example of the meaning of VER under other Federal 
statutes, we offer the following excerpt from one of the court 
decisions cited by several commenters:

    We conclude that ``valid existing rights'' does not necessarily 
mean vested rights. Under the [Alaska Native Townsite] Act before 
its repeal, a municipality, and all individuals who had occupied 
specific lots within the subdivision limits, had a legitimate claim 
for municipal control of any unoccupied lots * * *. It is rational 
to conclude that when the Congress repealed the law and enacted a 
savings clause for ``existing rights,'' that this claim would be 
preserved. The term ``valid existing rights'' does not necessarily 
mean present possessory rights, or even a future interest in the 
property law sense of existing ownership that becomes possessory 
upon the expiration of earlier estates. Legitimate expectations may 
be recognized as valid existing rights, especially where the 
expectancy is created by the government in the first instance. * * * 
A government is most responsible when it recognizes as a right that 
which is not strictly enforceable but which flows nevertheless from 
the government's own prior representations. That in essence is what 
the Secretary has done here. The Secretary's reading of the words 
``valid existing rights'' to mean something other than ``vested'' is 
reasonable.

Aleknagik Natives Ltd. v. U.S., 806 F.2d 924, 926-27 (9th Cir. 1986).

    Thus, under Federal laws other than section 522(e) of SMCRA, the 
term VER typically refers to the set of circumstances under which 
persons who have unvested or incompletely vested interests or 
expectations in Federal lands or minerals will be allowed to vest or 
complete those interests or expectations as property rights against the 
United States as the fee owner. In general, the VER provisions of those 
statutes, or case law concerning VER under those statutes, apply to 
situations in which the Federal government withdraws land from the 
operation of a public lands statute or changes the eligibility criteria 
or other requirements for vesting or completing of property rights. In 
these cases, the term VER refers to the point at which a person who has 
taken some action toward vesting or completing a property interest in 
Federal lands or minerals has the right to complete the process 
regardless of any statutory or regulatory changes to the contrary.
    In some instances, the courts have indicated that Congress intended 
for VER provisions under other Federal laws to operate as a means of 
avoiding compensable takings. See Cameron v. United States, 252 U.S. 
450 (1920) and Utah v. Andrus, 486 F. Supp. 995, 1011 (D. Utah 1979). 
However, there is no consensus that this principle is always true or 
even usually true. See, generally, 5 J. Min. L. & Pol'y No. 3. We 
conclude that the record does not clearly establish that Congress 
always intended avoidance of compensable takings to be an underlying 
principle for all VER provisions. If Congress had this intent, VER 
provisions would protect only those property rights that are protected 
under the Fifth Amendment. However, the purpose of a VER provision may 
be to protect expectations or interests that are not property for 
purposes of the Fifth Amendment, or to preserve the status quo for 
preexisting interests. See Arnold v. Morton, 529 F.2d 1101 (9th Cir. 
1976); Solicitor's Opinion M-36910 (Supp.), 88 I.D. 909, 913 (Oct. 5, 
1981); Sierra Club v. Hodel, 848 F.2d 1068, 1087-88 (10th Cir. 1988); 
and Beard Oil Co., 111 IBLA 191 (1989).
    For the reasons discussed below and in the first paragraph of this 
portion of the preamble, we do not find that the meaning of VER under 
other Federal laws provides useful guidance in determining the meaning 
of VER for surface coal mining operations under section 522(e) of 
SMCRA. First, section 522(e) and the VER exception in that section 
apply to both Federal and non-Federal lands. Neither section 522(e) nor 
the VER exception in that section involves a transfer of a property 
right from the Federal government or a vesting of a property right vis-
a-vis the Federal government. As discussed in Part VII.C.2. of this 
preamble, the VER exception in section 522(e) of SMCRA concerns a 
person's eligibility to obtain a permit to conduct surface coal mining 
operations when vested property rights already exist. In short, the VER 
exception in section 522(e) differs from VER under other Federal laws 
because SMCRA has a fundamentally different nature than the other 
Federal laws to which the commenters refer. Unlike those laws, SMCRA 
regulates the use of non-Federal lands.
    Second, the section 522(e) VER exception applies in the context of 
a regulatory program that already imposes a requirement that a permit 
applicant demonstrate the property right to mine the coal by the method 
intended. Thus, to provide that a person who has the necessary property 
rights under State law is exempt from the prohibitions and restrictions 
of section 522(e) would render the VER exception surplusage, or at best 
insignificant, in relation to the independent permitting requirements 
in the Act. Further, except in situations involving unleased Federal 
coal, this interpretation would effectively render the protections of 
section 522(e) void or insignificant. A fundamental principle of 
statutory construction provides that `` `effect must be given, if 
possible, to every word, clause and sentence of a statute' * * * so 
that no part will be inoperative or superfluous, void, or 
insignificant.'' PSMRL I, 627 F.2d at 1362, citing 2A Sutherland, 
supra, at Sec. 46.06.
    Third, a VER standard that is primarily intended to determine 
whether, under Federal law, property rights may vest against the 
Federal government, arguably would be irrelevant or inappropriate in 
the circumstances to which section 522(e) applies. Property rights for 
the lands listed in section 522(e) are already vested under State law. 
Furthermore, application of this type of VER standard would be 
inappropriate because SMCRA is not a statute under which Congress 
intended to resolve title disputes or change the process for vesting 
real property rights.

IX. Are VER Transferable?

    In general, we view VER as transferable because, unless otherwise

[[Page 70795]]

provided by State law, the property rights, permits, and operations 
that form the basis for VER determinations are transferable. There is 
one significant exception to this principle. If an operation with VER 
under the needed for and adjacent standard divests itself of the land 
to which the VER determination pertains, the new owner does not have 
the right to conduct surface coal mining operations on those lands 
under the prior VER determination. That determination is no longer 
valid because it was based on a representation that the lands were 
needed for the operation. Of course, if the sale involves the entire 
operation (as opposed to a portion of its reserves), the VER 
determination would retain validity since there is no change in the 
operation's need for the land.
    However, the right to alienate or transfer real or personal 
property is not absolute. Certain property interests such as leases, 
licenses, and contracts may be inherently nontransferable or of limited 
transferability, either by their terms or by operation of State law. If 
a person's property interests are of this nature, then any VER resting 
on those interests also would be nontransferable.
    The VER exception in section 522(e) may be considered analogous to 
a zoning variance, which, in the interest of equity, allows an 
otherwise prohibited use to occur under certain fact-specific 
circumstances even though that use was not in existence on the land in 
question at the time that the zoning ordinance took effect. Zoning 
variances typically convey with the title to the property even if the 
rights conferred by the variance have not been exercised.
    Some commenters objected strongly to our statements in the preamble 
to the proposed rule that characterize VER as attaching to the property 
interests. They argue that VER should attach only to the person, and 
that these rights should expire if the person does not exercise them. 
We do not find this argument persuasive. VER determinations are based 
on property rights, permits, and/or operations, depending upon the 
standard that applies. To the extent that State law and the conveyances 
in question either authorize or do not prohibit the transfer of these 
property rights, permits, and operations, we see no reason to prohibit 
the transfer of any associated VER. Furthermore, as specified in 
section 505(a) of the Act, SMCRA does not supersede any State law or 
regulation unless the State law or regulation is inconsistent with the 
Act. Since SMCRA does not address the transferability of VER, we have 
no authority under the Act to limit the operation of State laws related 
to or affecting transferability of VER.
    In adopting this rule, we do not intend to create rights that do 
not already exist in State law or expand upon those that do. Individual 
States may prohibit VER transfers to the extent that they have the 
authority to do so under State law. One commenter argued that any State 
law or regulation that prohibits the transfer of VER would constitute 
the taking of private property without compensation in violation of the 
Fifth and Fourteenth Amendments to the U.S. Constitution. We do not 
find it appropriate or necessary to respond to this theoretical 
argument, which lies outside the scope of SMCRA and is best left to the 
courts to address if the situation materializes.
    One commenter argued that VER is not a property right, but a 
recognition of some equitable consideration that Congress intended to 
afford to persons whose mine plans were in substantial stages of 
development on the date of enactment of SMCRA. According to the 
commenter, VER should not be transferable because they are personal 
rights intended to protect the legitimate expectations of the property 
owner. The commenter expressed concern that allowing transfer of VER 
would elevate an equitable consideration into an estate in land or a 
property right. However, the commenter failed to cite any supporting 
documentation for these arguments and characterizations of 
Congressional intent regarding VER.
    As summarized and excerpted in Part V of this preamble, the 
legislative history of the VER exception in section 522(e) is quite 
sparse; there is no passage that supports the commenter's claims. And 
we are aware of no basis for the commenter's belief that VER are 
personal rights and that allowing transfer of VER would convert an 
equitable consideration into a property right. But, even if the 
commenter is correct, we do not see how this distinction would preclude 
transfer of VER. Unless otherwise specified by agreement of the 
parties, a personal right to use property for a particular purpose or 
in a particular manner may also be transferable if State law so 
provides.
    The commenter also argued that allowing individual States to 
determine transferability of VER would result in disparate levels of 
protection for both public and private lands. The commenter provided no 
basis for this assertion. We know of no reason to expect that there 
will be any significant difference in terms of disturbance of protected 
lands between States that allow transferability and those that do not. 
However, to the extent that a difference may exist, we do not find any 
conflict with SMCRA. Section 505(a) of the Act provides that:

    No State law or regulation in effect on the date of enactment of 
this Act, or which may become effective thereafter, shall be 
superseded by any provision of this Act or any regulation issued 
pursuant thereto, except insofar as such State law or regulation is 
inconsistent with the provisions of this Act.

    Because SMCRA does not address the transferability of VER, we 
believe that deferral to State law is appropriate.
    The commenter also argued that to the extent that we allow transfer 
of VER, we should restrict transfers in the same manner as zoning law 
limits the transfer of a non-conforming use. According to the 
commenter, the right to a non-conforming use generally lapses unless 
exercised on a continuous basis. We do not accept the commenter's 
argument. There is no indication in SMCRA, its legislative history, or 
elsewhere that Congress intended the VER exception in section 522(e) to 
operate as a nonconforming use does under zoning law. We see no 
compelling reason to restrict transfer of VER in this fashion. And, as 
previously discussed, restricting transfer in the manner advocated by 
the commenter may run afoul of section 505(a) of the Act, which 
preserves State law unless it is inconsistent with SMCRA.
    One commenter expressed the fear that allowing transfer of VER 
would expand the scope of the VER exception to the point where nearly 
anyone with a backhoe could access protected lands in a devastating 
fashion. We do not agree that allowing transfer of VER would create the 
result feared by the commenter. The definition of VER in the final rule 
provides appropriate limitations on the scope of the VER exception.
    Finally, one commenter asserted, without further elaboration, that 
transfer of VER is not permissible under current law, and that our rule 
would create a new right contrary to law and in excess of our 
authority. We disagree. Both SMCRA and its implementing regulations are 
silent on the question of transferability.

X. Sections 740.4, 745.13, and 761.14(a): Who Is Responsible for 
VER Determinations for Non-Federal Lands Within Section 522(e)(1) 
areas?

A. Statutory Background and Rulemaking History

    SMCRA does not directly address responsibilities for VER 
determinations. However, section 503(a) of the Act

[[Page 70796]]

specifies that States with surface coal mining and reclamation 
operations on non-Federal lands may assume exclusive jurisdiction over 
the regulation of surface coal mining and reclamation operations within 
their borders, except as otherwise provided in section 521 (Federal 
oversight of State regulatory program implementation), section 523 
(Federal lands), and Title IV of the Act (reclamation of abandoned mine 
lands). In addition, section 101(f) of the Act asserts that ``the 
primary governmental responsibility for developing, authorizing, 
issuing, and enforcing regulations for surface coal mining and 
reclamation operations subject to this Act should rest with the 
States.'' In accordance with these principles, former 30 CFR 761.4, as 
published on March 13, 1979 (44 FR 15341), assigned the responsibility 
for VER determinations for non-Federal, non-Indian lands to the 
regulatory authority, with the Secretary retaining responsibility for 
VER determinations for Federal lands.
    On February 16, 1983 (48 FR 6935), we revised the Federal lands 
regulations at 30 CFR 740.4 by adding paragraph (a)(4). This paragraph 
narrowed the Secretary's responsibility for VER determinations by 
restricting it to proposed surface coal mining operations that would be 
located on Federal lands within the boundaries of any areas listed in 
section 522(e)(1) or (e)(2) of the Act. In the same rulemaking, we 
added paragraph (o) to 30 CFR 745.13 to specify that the Secretary may 
not delegate the responsibility for making VER determinations on 
Federal lands within any areas listed in section 522(e)(1) or (e)(2) to 
the State in a cooperative agreement for the regulation of surface coal 
mining and reclamation operations on Federal lands. The preamble to 
that rulemaking explains that exclusive authority for VER 
determinations involving those lands is an integral component of the 
Secretary's commitment to protect the areas listed in section 522(e)(1) 
and (e)(2) in accordance with congressional direction and to prevent 
mining on Federal lands within the National Park System. See 48 FR 
6917, col. 2, February 16, 1983.
    On September 14, 1983 (48 FR 41312), we removed 30 CFR 761.4 
because we found it unnecessary in view of the provisions added to 30 
CFR 740.4 and 745.13 on February 16, 1983. Citizen and environmental 
groups filed a challenge to the removal. They also used this occasion 
as an opportunity to argue that SMCRA requires that the Secretary make 
VER determinations in all cases involving lands within the boundaries 
of section 522(e)(1) areas, regardless of ownership. The court rejected 
the plaintiffs' arguments, noting that section 503(a) of the Act 
``permits States to assume exclusive jurisdiction over the regulation 
of surface coal mining and reclamation operations on non-Federal 
lands.'' PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1566 
(1985). The court also noted that nothing in section 523(c) of the Act, 
which prohibits the Secretary from delegating to the States his 
authority to designate Federal lands as unsuitable for mining under 
section 522 of the Act, ``persuades the court to the contrary.'' Id.
    However, in oral arguments defending against the challenge, counsel 
for the Government stated that:

    [I]n those situations where surface mining on private inholdings 
will affect federal lands, that kicks in the Federal Lands Program, 
and under the Federal Lands Program, the Secretary makes the VER 
determination, so there may be circumstances where you have a 
private inholding within the protected area, in which the Secretary 
would make the VER determination, but he can't in the abstract know 
when he's going to be required to make that determination, until he 
knows what land is going to be mined, and what potential impact that 
might have on federal lands.

Transcript of Oral Argument, Dec, 21, 1984, at 46; quoted in PSMRL II, 
Round III--VER, 22 Env't Rep. Cas. (BNA) at 1566 (1985).
    The court did not address the validity or interpretation of this 
argument, which, taken at face value, would extend the reach of the 
Federal lands program to lands in which there is no element of Federal 
ownership.
    On November 20, 1986 (51 FR 41952-62), we suspended a number of 
regulations. Among other things, that Federal Register document, which 
is known as the 1986 suspension notice, partially suspended the VER 
definition published on September 14, 1983. In the preamble discussion 
of the impact of this suspension on the Federal lands program, we 
announced that the Secretary would make VER determinations for non-
Federal lands within the boundaries of the areas listed in section 
522(e)(1) whenever surface coal mining operations on those lands would 
affect the Federal interest (51 FR 41955). This policy is known as the 
``affected by'' standard. However, the notice did not suspend or modify 
30 CFR 740.4(a)(4) or any other rule to reflect this policy. (Section 
740.4(a)(4) (1983) provides that the Secretary is responsible for VER 
determinations for Federal lands, but it does not extend that 
responsibility to non-Federal lands.)
    The 1986 suspension notice does not explain the basis or origin of 
the ``affected by'' standard. However, it appears to arise from the 
Government's oral argument in PSMRL II, Round III--VER, as quoted in 
the decision at 22 Env't Rep. Cas. (BNA) 1566 (1985). This argument 
apparently derives from and expands upon language in the court's 
earlier decision in In re Permanent Surface Mining Regulation II, Round 
I, No. 79-1144 (D.D.C. July 6, 1984), slip op. at 11-15 (hereinafter 
``PSMRL II, Round I''). In that decision, the court noted that the 
definition of ``surface coal mining operations'' in section 701(28) of 
the Act includes a broad ``affected by'' test and that under section 
523(a) of SMCRA and the definition of ``Federal lands program'' in 
section 701(5) of the Act, all surface coal mining and reclamation 
operations on Federal lands are subject to the Federal lands program.

B. What Alternatives Did We Consider?

    In the preamble to the proposed rule published on January 31, 1997 
(see 62 FR 4838-40), we requested comment on four alternatives with 
respect to responsibility for VER determinations for non-Federal lands 
within the areas protected by section 522(e)(1):
    (1) Reaffirming the 1983 version of 30 CFR 740.4(a)(4), which would 
mean that we would be responsible for making all VER determinations for 
Federal lands in section 522(e)(1) areas and that the regulatory 
authority (which may be either OSM or the State) would be responsible 
for making all determinations for non-Federal lands.
    (2) Reaffirming the 1983 version of 30 CFR 740.4(a)(4) and revising 
Part 761 to provide that the regulatory authority must obtain the 
concurrence of the pertinent land management agency before finding that 
a person has VER for any lands within the boundaries of the areas 
listed in 30 CFR 761.11(a) and section 522(e)(1) of the Act. Under this 
alternative, if the proposed operation would be located on land within 
the boundaries of an area listed in section 522(e)(1), the agency 
statutorily responsible for management of the protected lands would 
have to concur with the regulatory authority's VER determination before 
the determination could take effect.
    (3) Revising 30 CFR 740.4(a)(4) and Part 761 to codify the 
``affected by'' standard, which is the policy established in the 1986 
suspension notice. This alternative relies upon the theory that the 
scope of the Federal lands program is not necessarily limited to lands 
included in the definition of Federal lands in section 701(4) of the 
Act; i.e., lands in which the Federal

[[Page 70797]]

government has a property interest. Under this theory, the Federal 
lands program would extend to include non-Federal lands within the 
boundaries of section 522(e)(1) areas if surface coal mining operations 
on those lands could affect the Federal interest by adversely impacting 
the values for which the lands were designated as protected areas.
    (4) Revising 30 CFR 740.4(a)(4) and Part 761 to require that we 
make all VER determinations for both Federal and non-Federal lands 
within the boundaries of the areas listed in 30 CFR 761.11(a) and 
section 522(e)(1) of the Act. This alternative relies upon the same 
theory as the ``affected by'' standard, with the additional argument 
that because Congress or the President established the boundaries of 
the areas identified in section 522(e)(1), all lands within those 
boundaries must possess values of national significance or interest. 
Therefore, surface coal mining operations on any lands within those 
boundaries would automatically affect the Federal interest in some way.

C. Which Alternative Are We Adopting?

    Commenters divided sharply on which alternative we should adopt. 
After evaluating the comments and reviewing the Act, we have decided to 
adopt the first alternative, which means that we are not making any 
substantive changes to 30 CFR 740.4(a)(4). (We are making a few 
editorial changes to reflect plain language principles and update 
cross-references to other rules.) Under the final rule, the regulatory 
authority has the responsibility for making VER determinations for all 
non-Federal lands, including those within the areas listed in section 
522(e)(1) of the Act.
    Many commenters supported this alternative as the only one that is 
fully consistent with SMCRA's provisions for State primacy in the 
regulation of surface coal mining operations on non-Federal lands. We 
agree. Section 101(f) of the Act asserts that ``the primary 
governmental responsibility for developing, authorizing, issuing, and 
enforcing regulations for surface coal mining and reclamation 
operations subject to the Act should rest with the States.'' In 
relevant part, section 503(a) provides that, once a State meets certain 
conditions, it has the right to assume ``exclusive jurisdiction'' over 
the regulation of surface coal mining and reclamation operations on 
non-Federal lands within its borders, with the exception of the Federal 
oversight and enforcement authority reserved under section 521 of the 
Act. Other sections of the Act grant us specific, limited, additional 
authority in States with primacy, such as the right to conduct 
oversight inspections under section 517, but these rights and 
authorities do not extend to making VER determinations on non-Federal 
lands in those States.
    Commenters who supported this alternative opposed the second 
alternative because it would effectively grant the Federal surface 
management agency veto authority over all VER determinations for 
section 522(e)(1) areas. They argued that nothing in SMCRA supports 
this alternative and that Congress would have included a specific 
concurrence requirement if it believed that one was needed, as it did 
with respect to State program approval in section 503(b), compatibility 
findings under section 522(e)(2), and joint agency approval under 
section 522(e)(3). One commenter noted that delays in decision-making 
as a result of the concurrence requirement could increase the 
Government's exposure to compensable takings claims. On balance, we 
find that these arguments, while not necessarily fatal, militate 
against adoption of the second alternative, the concurrence 
requirement.
    These commenters also opposed the third and fourth alternatives as 
inconsistent with section 503(a) of SMCRA, because those alternatives 
would require us to make VER determinations on some or all non-Federal 
lands within section 522(e)(1) areas. In contrast, section 503(a) of 
the Act establishes a mechanism by which States may assume ``exclusive 
jurisdiction'' over surface coal mining and reclamation operations on 
non-Federal lands within their borders. As discussed at length in this 
portion of the preamble, we concur with this comment.
    Opponents of the alternative that we are adopting argue that 
reserving VER determination authority for all lands listed in section 
522(e)(1) to the Secretary would ensure national consistency and may 
result in more favorable consideration of arguments advanced by the 
Federal surface management agency with jurisdiction over the protected 
site. However, the commenters offered no empirical evidence to support 
this theory. Nor do we find it persuasive in view of SMCRA's emphasis 
on State primacy.
    Some commenters argued that the alternative that we are adopting 
would provide insufficient protection for lands of national 
significance, such as units of the National Park Service. In support of 
this argument, the commenters cite various provisions of SMCRA's 
legislative history in which Congress expresses dissatisfaction with 
the quality of State regulation prior to the enactment of SMCRA.
    We also find these arguments unpersuasive. Subchapter C of 30 CFR 
Chapter VII provides that State regulatory programs must be no less 
stringent than the Act and no less effective than the Federal 
regulations in meeting the requirements of the Act. We conduct 
oversight of the implementation of State regulatory programs to ensure 
that each State is properly administering and enforcing its approved 
program. The final rule requires that the regulatory authority use the 
Federal definition of VER whenever it is making determinations for non-
Federal lands within section 522(e)(1) areas, so both we and the States 
will use the same decision criteria for all lands within these areas. 
Hence, there should be no significant difference in the degree of 
environmental protection regardless of whether we or the States make 
the VER determination.
    The degree to which States failed to control the environmental 
impacts of surface coal mining operations or engaged in lax enforcement 
practices before the approval of permanent State regulatory programs 
under section 503 of SMCRA is not relevant because, before that time, 
States did not have to meet Federal standards. In addition, there was 
no back-up Federal enforcement authority, apart from the brief dual 
enforcement arrangement of the initial regulatory program under section 
502 of SMCRA. Furthermore, States and local communities generally value 
national parks and the other areas protected under section 522(e)(1) of 
the Act. We have no reason to anticipate that States will be less than 
conscientious in administering the VER determination provisions of 
their approved programs.
    Opponents of the alternative that we are adopting also express 
concern that allowing State regulatory authorities to make VER 
determinations for non-Federal inholdings within section 522(e)(1) 
areas, in combination with their authority under former 30 CFR 
761.12(f) [now redesignated as 30 CFR 761.17(d)] to determine whether 
surface coal mining operations would adversely affect features 
(including publicly owned parks) protected under section 522(e)(3), 
would leave the protection of Federal lands in the hands of State 
agencies. According to the commenters, these agencies are likely the 
least knowledgeable of the proper management of those lands and least 
able to determine whether mining would cause an adverse effect. The 
commenters argue that the agencies that

[[Page 70798]]

manage the Federal lands are in the best position to determine whether 
surface coal mining operations will adversely affect those lands, and 
that only the Federal surface management agency has the expertise to 
evaluate whether surface coal mining operations will adversely affect 
the values for which the land was designated as a protected area. The 
commenters further state that responsibility for VER determinations for 
private inholdings should reside with the agency that Congress 
designated to manage Federal lands within the protected area. According 
to the commenters, Congress would not have extended categorical 
protection to the areas in section 522(e) only to leave the protection 
of those lands in the hands of State regulatory authorities.
    We disagree with these comments. First, it is a matter of settled 
law that the regulatory authority has the responsibility for 
determining whether a proposed operation would adversely affect a 
publicly owned park or historic place under section 522(e)(3) of the 
Act. We adopted this provision as part of 30 CFR 761.12(f), now 
redesignated as 30 CFR 761.17(d), on September 14, 1983. The National 
Park Service expressed an interest in revisiting that version of 30 CFR 
761.12(f) and the section 522(e)(3) adverse effect determination 
process. However, this rulemaking is not the proper vehicle to do so 
since we did not propose changes to, or request comment on, former 30 
CFR 761.12(f).
    Second, as already discussed, we disagree with the commenters' 
unsubstantiated assertions concerning the capability of State 
regulatory authorities and the integrity of their decision-making 
procedures. Under section 503 of SMCRA, we may not approve State 
programs unless they demonstrate possession of the technical expertise 
necessary to administer all facets of the regulatory program, including 
decisions relating to designation of lands as unsuitable for surface 
coal mining operations under section 522 of the Act. See 30 CFR Parts 
731 and 732. In addition, State regulatory authorities deal with 
surface coal mining operations and their impacts on a daily basis, 
while most agencies with management responsibility for the features 
protected by section 522(e) rarely encounter such operations. 
Therefore, we believe that State regulatory authorities will likely 
have more technical expertise and greater familiarity with surface coal 
mining operations and their environmental impacts than the agency with 
jurisdiction over the protected feature.
    Furthermore, the environmental impacts of any potential surface 
coal mining operations are not germane to determining whether a person 
has VER. Under the standards in the definition of VER that we are 
adopting today, this decision is a strictly legal determination in 
which the potential impacts of mining play no role. The regulatory 
authority must address the impacts of any proposed surface coal mining 
operations as part of the permitting process and during inspection and 
enforcement activities.
    Third, the commenters err in stating that Congress could not have 
intended State regulatory authorities to determine whether a person has 
VER for non-Federal lands within section 522(e)(1) areas. Section 
503(a) of SMCRA clearly provides a mechanism for a State to assume 
exclusive jurisdiction for the regulation of surface coal mining 
operations on non-Federal lands within its borders. Congress did not 
exclude either VER determinations for section 522(e)(1) areas or 
adverse effect determinations under section 522(e)(3) from the reach of 
section 503(a).
    For the reasons discussed at length above, we reject the argument 
advanced by one commenter that section 102(a) of the Act obligates us 
to reserve the authority to make VER determinations for non-Federal 
inholdings within section 522(e)(1) areas. Section 102(a) provides that 
one of the purposes of the Act is ``to protect society and the 
environment from the adverse effects of surface coal mining 
operations.'' The commenter asserts that we must have authority over 
all lands within the boundaries of section 522(e)(1) areas to 
effectuate this purpose, since OSM authority is the only practical 
remedy for a wide range of violations of the Act. The commenter claims 
that reservation of this authority to the Secretary is consistent with 
the Supreme Court's description of SMCRA's regulatory structure as one 
of cooperative federalism:

    The most that can be said is that the Surface Mining Act 
establishes a program of cooperative federalism that allows the 
States, within limits established by federal minimum standards, to 
enact and administer their own regulatory programs, structured to 
meet their own particular needs.

Hodel v. VSMRA, 452 U.S. at 289 (1981).

    We strongly disagree with these comments. For the reasons discussed 
above, we believe that States are fully capable of implementing the 
Act. Commenters provided no evidence to support their inference that 
States either cannot or will not protect section 522(e)(1) areas to the 
extent required under SMCRA. The alternative that we have selected is 
fully consistent with both section 102(a) of SMCRA and the Supreme 
Court's description of the Act in Hodel v. VSMRA, supra, as 
establishing a program of cooperative federalism in which the States 
enact and administer their own regulatory programs within limits 
established by federal minimum standards. Id. at 289. And the 
commenters fail to take notice of section 102(g) of the Act, which 
clearly indicates that Congress envisioned that States would develop 
and implement ``a program to achieve the purposes of the Act,'' 
(including the purpose in section 102(a)); section 101(f), in which 
Congress declares that ``the primary governmental responsibility'' for 
the regulation of surface coal mining operations ``should rest with the 
States;'' and section 503(a), in which Congress provides that States 
may assume ``exclusive jurisdiction'' over the regulation of surface 
coal mining operations on non-Federal lands.
    To ensure that the interests of the Federal surface management 
agency and other surface owners are taken into consideration, we have 
added a provision to 30 CFR 761.16(b)(1) to require that each person 
seeking a VER determination first notify and request comments from the 
surface owner. Any comments received must be submitted as part of the 
request for a VER determination. In addition, under 30 CFR 
761.16(d)(2), the agency responsible for making the VER determination 
must independently notify and provide opportunity to comment to both 
the surface owner and, when applicable, any agency with primary 
jurisdiction over the values or features that caused the land to come 
under the protection of 30 CFR 761.11. Under 30 CFR 761.16(e)(1), when 
making a decision on the request for a VER determination, the agency 
must consider all comments received.
    We also disagree with the commenters' argument that the National 
Park Service Organic Act, 16 U.S.C. 1, prevents adoption of the 
alternative that we selected. The commenters represent this act as 
requiring the Secretary to ``promote and regulate'' units of the 
National Park System ``to conserve the scenery and the nature and 
historic objects and the wild life therein and * * * leave them 
unimpaired for the enjoyment of future generations.'' However, 16 
U.S.C. 1 assigns this responsibility to ``the service thus 
established,'' not the Secretary. Thus, by its own terms, this 
provision of the Organic Act applies only to the National

[[Page 70799]]

Park Service. It does not extend to other programs and other bureaus 
within the Department. We believe that if Congress had intended the 
National Park Service to have concurrent decision-making authority for 
VER determinations for non-Federal lands within units of the National 
Park System, it would have amended either the Organic Act or SMCRA to 
provide the Service with this authority. We acknowledge that, as the 
commenters note, the courts have held that the Organic Act and related 
statutes provide the Park Service with broad rulemaking authority. 
Wilkenson v. Dept. of Interior, 634 F. Supp. 1265, 1278-79 (D. Colo. 
1986). However, we do not agree with the commenters' argument that the 
reach of the Organic Act extends beyond the Park Service or that it 
governs rulemakings that interpret and implement other statutes for 
other bureaus within the Department.
    We find nothing in the Organic Act that would allow us to override 
the VER exception provided in section 522(e) of SMCRA or the State 
primacy provisions of section 503(a) of the Act, which allow States to 
assume exclusive jurisdiction for the regulation of surface coal mining 
and reclamation operations on non-Federal lands within their borders. 
Paragraphs (e)(1) and (e)(3) of section 522 of SMCRA provide special 
protection for units of the National Park System, but there is no 
indication that Congress intended to grant either the Federal land 
management agency or us exclusive or concurrent authority for VER 
determinations for non-Federal inholdings within those units. Whenever 
Congress intended other Federal agencies to have a concurring role in 
decisions made under SMCRA, it specifically provided for this role in 
the Act. See, for example, section 501(a), which requires the 
concurrence of the Environmental Protection Agency with respect to 
certain rulemaking activities, and section 515(f), which requires the 
concurrence of the U.S. Army Corps of Engineers with respect to 
regulations governing coal mine waste impoundments. Furthermore, if 
Congress had intended to subordinate SMCRA to the provisions of the 
Organic Act, it would have included that statute in section 702(a) of 
SMCRA, which lists the Federal laws to which SMCRA is subordinate. And, 
as previously discussed, we find no basis for the assumption that 
States will be lax in protecting units of the National Park System.
    Several commenters argue that the Property Clause of the U.S. 
Constitution provides us with the authority to reserve VER 
determination responsibilities on non-Federal lands within section 
522(e)(1) areas to the Secretary. The Property Clause (article IV, 
section 3, clause 2) provides that ``Congress shall have the Power to 
dispose of and make all needful Rules and Regulations respecting the 
Territory or other property belonging to the United States.'' We agree 
with the commenters that there is extensive case law supporting an 
expansive interpretation of the Property Clause as it relates to the 
ability of the Federal government to regulate activities on Federal 
lands. However, SMCRA is not a public lands statute and OSM is not a 
Federal land management agency. Therefore, we find no basis for 
reliance upon the Property Clause as authority for rulemaking under 
SMCRA. As previously discussed, in Hodel v. VSMRA, 452 U.S. at 275-283 
(1981), and Hodel v. Indiana, 452 U.S. at 321-329 (1981), the Supreme 
Court upheld Congress' authority to enact SMCRA under the Commerce 
Clause.
    Furthermore, our authority to regulate non-Federal lands under 
section 522(e)(1) is not at issue in this rulemaking. That authority is 
a matter of settled law under the two 1981 Hodel cases cited in the 
preceding paragraph. The issue is whether, under SMCRA, that authority, 
including the responsibility for VER determinations on non-Federal 
lands, is properly delegated to States with primacy. Therefore, the 
commenters' arguments concerning the meaning of the Property Clause are 
not helpful or relevant to this rulemaking.
    For the reasons discussed above, we believe that the alternative 
that we have adopted in the final rule is the alternative that is most 
consistent with SMCRA's emphasis on State primacy for the regulation of 
surface coal mining operations on non-Federal lands. See sections 
101(f), 102(g), and 503(a)) of the Act. As previously discussed, we 
believe that this alternative will provide an appropriate level of 
protection to these lands since, under 30 CFR 732.15(a) and 730.5, 
State regulatory programs must be no less effective than the Federal 
regulations in meeting the requirements of SMCRA. And, as discussed 
above and in Part XI of this preamble, we believe that the final rule 
provides for consistency in VER determinations for these lands by 
requiring use of the Federal definition of VER in all cases.
    One commenter argued that section 102(m) of SMCRA obligates us to 
adopt an alternative that reserves to the Secretary the right to make 
VER determinations on non-Federal inholdings within section 522(e)(1) 
areas. The paragraph that the commenter cites provides that one of the 
purposes of the Act is to ``wherever necessary, exercise the full reach 
of Federal constitutional powers to insure the protection of the public 
interest through effective control of surface coal mining operations.'' 
The commenter noted that under United States v. Vogler, 859 F.2d 638, 
641 (9th Cir. 1988), cert. denied, 488 U.S. 1006 (1989), those 
constitutional powers include the power to protect public lands from 
``trespass and injury.'' As discussed above, we believe that States are 
fully capable of protecting the public interest to the extent required 
by SMCRA. And we believe that the alternative that we have adopted in 
the final rule is the alternative that is most consistent with SMCRA's 
emphasis on State primacy for the regulation of surface coal mining 
operations on non-Federal lands. See sections 101(f), 102(g), and 
503(a)) of the Act. Therefore, we do not agree that section 102(m) of 
SMCRA requires adoption of the alternative favored by the commenter.
    One commenter argued that the decisions in PSMRL II, Round I, No. 
79-1144 (D.D.C. July 6, 1984), slip op. at 11-15, and PSMRL II, Round 
III--VER, 22 Env't Rep. Cas. (BNA) at 1566 (1985), compel adoption of 
an ``affected by'' standard. We disagree.
    PSMRL II, Round I, supra, has no applicability here because the 
issue that was before the court concerned Federal lands. In deciding 
that case, the court struck down 30 CFR 740.11(a)(3) (1983) only to the 
extent that that rule did not apply to the Federal lands program to all 
Federal lands. Specifically, the court held that, with respect to the 
jurisdiction of the Federal lands program, the Secretary is ``powerless 
to limit'' the statutory definition of ``surface coal mining 
operations'' in section 701(28) and that, ``if surface mining 
activities take place on Federal lands, the Secretary is powerless to 
exclude them from the Federal lands program.'' PSMRL II, Round I, 
supra, at 14-15. The court rejected the Secretary's argument, as stated 
in the preamble to the 1983 rulemaking, that,

because of the interaction of the State primacy provision, section 
503 of the Act, with section 523 of the Act, the Federal lands 
program can be interpreted to exclude State or privately-owned 
surface overlying Federally-owned coal where the operation will not 
involve mining the Federally-owned coal and where there will be no 
disturbance of the Federally-owned estate.

48 FR 6921, February 16, 1983.

    Nothing in the court's decision would compel extension of the 
Federal lands program to lands in which there is no

[[Page 70800]]

Federal property interest, i.e., lands in which both the surface and 
mineral estates are entirely in non-Federal ownership. There is no 
indication that the court contemplated using the ``affected by'' test 
in section 701(28) to extend the Federal lands program to lands in 
which there is no Federal property interest. The court noted that 
``[w]hen Congress discussed state administration of the Act, it 
virtually always referred to non-federal lands.'' PSMRL II, Round I, 
supra, at 14. Furthermore, when we repromulgated 30 CFR 740.11(a) in 
1990 to address the judicial remand of the 1983 version of this rule in 
PSMRL II, Round I, supra, we rejected a commenter's argument that the 
court had explicitly endorsed an ``affected by'' test to determine the 
jurisdiction of the Federal lands program. In declining to adopt an 
``affected by'' standard, we stated that:

    An ``affected by'' test would be very difficult to administer. A 
determination that the Federal interest would or would not be 
affected would have to be made on a case-by-case basis, and could be 
subject to different interpretations.

55 FR 94001, March 13, 1990.

    In PSMRL II, Round III-VER, 22 Env't Rep. Cas. (BNA) at 1566 
(1985), the other decision cited by the commenters as supporting 
adoption of an ``affected by'' standard, the court did not review the 
merits of the ``affected by'' standard suggested in oral argument by 
Government counsel. Hence, the court's mention of the Government's 
representation at oral argument concerning the applicability of an 
``affected by'' standard is purely dictum. Furthermore, the ``affected 
by'' standard outlined in the Government's oral arguments as quoted in 
the court's decision refers to section 701(28)(B) of the Act, which 
specifies that ``all lands affected by the construction of new roads or 
the improvement or use of existing roads to gain access to the site and 
for haulage'' are included within the definition of surface coal mining 
operations. Nothing in this definition differentiates between Federal 
and non-Federal lands or addresses which agency is responsible for 
regulating surface coal mining operations on those lands. Nor does it 
suggest use of an ``affected by'' standard to extend the scope of the 
Federal lands program to include non-Federal lands within section 
522(e)(1) areas.
    Therefore, we find no merit to the commenters' arguments in favor 
of an ``affected by'' standard. In addition, we do not believe that 
this standard is consistent with section 503(a) of SMCRA, which 
provides for exclusive State jurisdiction over the regulation of 
surface coal mining operations on non-Federal lands.
    Under the final rules adopted today, we retain exclusive authority 
for making VER determinations for Federal lands within the boundaries 
of the areas listed in 30 CFR 761.11(a) and for Federal lands within 
any national forest [the lands listed in 30 CFR 761.11(b)]. The 
regulatory authority has sole responsibility for VER determinations for 
all non-Federal lands, regardless of whether we or the State are the 
regulatory authority. If a State has a regulatory program approved 
under section 503 of SMCRA, but does not have a Federal lands 
cooperative agreement pursuant to 30 CFR Part 745, we are responsible 
for making VER determinations under the State program counterparts to 
30 CFR 761.11(c) through (g) for Federal lands. In States with a 
Federal lands cooperative agreement, the State regulatory authority is 
responsible for making VER determinations under the State program 
counterparts to 30 CFR 761.11(c) through (g) for Federal lands not 
listed in 30 CFR 761.11(a) or (b), unless the cooperative agreement 
specifies otherwise.
    One commenter opposed any rule that would require that we make VER 
determinations for Federal lands on which the State is otherwise the 
regulatory authority under a cooperative agreement approved under 30 
CFR Part 745 and section 523(c) of the Act. In the commenter's view, 
section 523(c) grants States with cooperative agreements exclusive 
authority to regulate surface coal mining and reclamation operations on 
Federal lands, except as specifically provided to the contrary in the 
Act. We disagree with the commenter's interpretation of the Act. While 
section 523(c) specifies certain functions that the Secretary may not 
delegate to a State, we find nothing in this section that expressly 
requires delegation of all other, unlisted functions. This 
interpretation forms the basis for the regulations governing 
cooperative agreements in 30 CFR part 745.

XI. Sections 740.11 and 761.14(a): Which VER Definition (State or 
Federal) Applies to Lands Listed in Section 522(e)(1) and (e)(2) of 
the Act?

    As proposed, the final rule modifies 30 CFR 740.11 by revising 
paragraph (a) and adding paragraph (g) to specify that the Federal 
definition of VER will apply to all VER determinations for the lands 
listed in 30 CFR 761.11 (a) and (b), regardless of whether we or the 
State are responsible for making the determination. Application of the 
Federal definition will ensure that requests for VER determinations 
involving lands of national interest and importance, as listed in 30 
CFR 761.11 (a) and (b) and section 522(e)(1) and (2) of the Act, are 
evaluated on the basis of the same criteria.
    The final rules differ from the 1990 version of 30 CFR 740.11(a), 
which required use of the State program definition in place of the 
Federal definition. However, the new rules differ from the 1990 rules 
only with respect to the lands listed in 30 CFR 761.11 (a) and (b). We 
will continue to use the approved State program definition when making 
VER determinations for Federal lands under the State program 
counterparts to 30 CFR 761.11 (c) through (g). Similarly, in States 
that assume responsibility for VER determinations under a Federal lands 
cooperative agreement, the State regulatory authority will continue to 
use the State program definition when making VER determinations under 
the State program counterparts to 30 CFR 761.11 (c) through (g) for 
Federal lands not listed in 30 CFR 761.11 (a) or (b).
    We received few comments on this issue, but those persons who did 
comment generally supported the approach adopted in the final rule. One 
commenter opposed the change, arguing that all existing State program 
VER definitions are illegal or improper and that we must require that 
States amend their programs to adopt an ownership and authority 
standard. As previously discussed, we do not agree that the Act 
mandates adoption of an ownership and authority standard for VER under 
section 522(e).
    In addition, we disagree with the commenter's assertion that, 
because the court remanded the 1979 and 1983 Federal definitions of 
VER, State VER definitions based on those Federal definitions are 
illegal or improper. We are not aware of any ruling of this nature that 
is still in effect. The commenter may be referring to the initial 
Belville decision in Ohio, but, in September 1992, the court modified 
its order by vacating the portion of its ruling concerning the validity 
of State program definitions of VER in States other than Ohio.

XII. What Other Changes Are We Making in the Federal Lands Program 
Regulations in 30 CFR Parts 740 and 745?

    We have revised 30 CFR 740.4(a)(5) and 30 CFR 745.13(p) to 
incorporate references to the provisions of 30 CFR part 761 that 
correspond to section 522(e) of SMCRA. In addition, to conform with the 
language of section

[[Page 70801]]

522(e) of the Act, which refers only to surface coal mining operations, 
we are replacing the term ``surface coal mining and reclamation 
operations'' in 30 CFR 740.4(a)(4) and 745.13(o) with ``surface coal 
mining operations.'' This change is consistent with the policy 
established in the preamble to a final rule published on April 5, 1989 
(54 FR 13814). In that preamble, we specify that SMCRA does not require 
a permit or other regulatory authority approval as a prerequisite for 
conducting reclamation work alone. In other words, this change in the 
terminology of the final rule clarifies that the prohibitions and 
restrictions of 30 CFR 761.11 and section 522(e) do not apply to 
reclamation activities such as the restoration of abandoned mine lands 
and bond forfeiture sites.
    Some commenters objected to this clarification, stating that 
reclamation work performed on abandoned mine lands or bond forfeiture 
sites must be done in accordance with plans approved by the abandoned 
mine land reclamation agency or the regulatory authority. We agree that 
reclamation work performed under a contract executed by the abandoned 
mine land reclamation agency under Title IV of the Act must adhere to 
contract plans and specifications. Similarly, we agree that any bond 
forfeiture reclamation activity conducted under 30 CFR 800.50 or its 
State counterpart must adhere to plans approved by the regulatory 
authority. However, neither the reclamation of abandoned mine lands nor 
the reclamation of bond forfeiture sites is a surface coal mining 
operation as 30 CFR 700.5 and section 701(28) of the Act define that 
term. Therefore, as discussed at 54 FR 13814-18 (April 5, 1989), there 
is no requirement for a permit for these reclamation activities. For 
similar reasons, there is no requirement that these reclamation 
activities comply with 30 CFR Part 761 or section 522(e) of the Act, 
which apply only to surface coal mining operations. Also, third parties 
that rely upon funds other than Title IV grants or bond forfeiture 
proceeds may perform reclamation work without any approval or 
involvement by the regulatory authority or the abandoned mine land 
reclamation agency. Reclamation activities of this nature are beyond 
the scope of SMCRA.
    The commenters also sought clarification that this change would not 
exempt reclamation work on illegally mined sites from the supervision 
and approval of the regulatory authority. We agree that the regulatory 
authority must monitor reclamation work performed by or for the illegal 
miner in response to an enforcement action. Nothing in this rule alters 
that responsibility. However, for the reasons discussed in the 
preceding paragraph, other parties may reclaim the site without the 
approval or involvement of the regulatory authority.

XIII. Why Are We Removing the Definition of ``Surface Coal Mining 
Operations Which Exist on the Date of Enactment'' From 30 CFR 
761.5?

    For the reasons discussed in Part XVI of this preamble, we are 
revising 30 CFR 761.12 to clarify that the statutory exception for 
existing operations in section 522(e) of the Act applies to all surface 
coal mining operations in existence before the land comes under the 
protection of section 522(e) and 30 CFR 761.11. Under the previous 
rule, this exception applied only to operations in existence on the 
date of enactment of SMCRA. As a result of this change, the term 
``surface coal mining operations which exist on the date of enactment'' 
no longer appears in the final rule or elsewhere in part 761. 
Therefore, we are revising 30 CFR 761.5 to delete the definition of 
this now-obsolete term.
    One commenter opposed the deletion as contrary to the express 
language of the Act, based on the mistaken impression that we were 
eliminating the exception for existing operations in section 522(e) and 
merging it with the definition of VER. In reality, the final rule 
maintains separate exceptions for both VER and existing operations, as 
does the Act. Any operation that would qualify for the exception for 
existing operations under the Act or the previous rules would continue 
to qualify for this exception under the revised rules.

XIV. Why Are We Adding Definitions of ``We'' and ``You'' and Their 
Grammatical Forms to 30 CFR 761.5?

    We are adding definitions of ``we'' and ``you'' and their 
grammatical forms because we have revised the other sections of part 
761 to reflect plain language principles, one of which requires the use 
of ``we'' and ``you'' whenever practicable. ``We,'' ``us,'' and ``our'' 
refer to the Office of Surface Mining Reclamation and Enforcement. 
``You'' and ``your'' refer to a person who claims or seeks to obtain an 
exception or waiver authorized by 30 CFR 761.11 and section 522(e) of 
the Act. In all other cases, we specifically identify the person or 
agency to whom we are referring.

XV. How Have We Revised 30 CFR 761.11, Which Is the Regulatory 
Counterpart to the Prohibitions and Limitations of Section 522(e) 
of the Act?

    We have reorganized and revised this section to incorporate plain 
language principles, improve clarity, maintain consistency with 
revisions to other sections of 30 CFR Part 761, and add informational 
cross-references to 30 CFR 761.12 through 761.17 as appropriate. The 
provisions concerning the exception for existing operations, which 
originally appeared in the introductory language of this part and which 
we proposed to revise and recodify as 30 CFR 761.11(b), now appear in 
revised form in 30 CFR 761.12. (See part XVI of this preamble.) Except 
for the removal of former paragraph (h) (see the discussion in part 
XVII of this preamble), there are no other substantive changes from the 
1983 version of this section.

XVI. Section 761.12: Which Operations Qualify for the Exception for 
Existing Operations?

    The exception for existing operations formerly appeared in the 
introductory language of 30 CFR 761.11. The 1997 proposed rule would 
have revised and recodified the exception as 30 CFR 761.11(b). To 
better adhere to plain language principles, the final rule recodifies 
this exception as a separate section, 30 CFR 761.12, and clearly 
distinguishes between initial program operations and permanent program 
operations. The exception for existing operations subject to the 
permanent regulatory program appears as paragraph (a) of that section, 
while the exception for existing operations subject to the initial 
regulatory program appears in paragraph (b) of that section.
    Paragraph (a) of the final rule provides that the prohibitions of 
30 CFR 761.11 do not apply to surface coal mining operations for which 
a valid permanent regulatory program permit exists when the land comes 
under the protection of 30 CFR 761.11 or section 522(e) of the Act. The 
rule further clarifies that this exception applies only to lands within 
the permit area as it exists when the land comes under the protection 
of 30 CFR 761.11.
    To address situations in existence before completion of the 
transition between the initial and permanent regulatory programs, 
paragraph (b) of the final rule further specifies that, with respect to 
operations subject to subchapter B of 30 CFR chapter VII, the exception 
applies to all lands upon which validly authorized surface coal mining 
operations exist when the land comes under the protection of section 
522(e) of the Act or 30 CFR 761.11. This provision has no prospective 
applicability apart from one remaining active initial program mine on 
Indian lands.

[[Page 70802]]

    As proposed, the exception for existing operations in the final 
rule incorporates paragraph (d)(1) of the 1983 definition of VER. This 
paragraph provided that validly authorized surface coal mining 
operations in existence on the date that land comes under the 
protection of section 522(e) after August 3, 1977, automatically have 
VER. For this reason and the reasons discussed below and in part VII.F. 
of this preamble, we believe that this former VER standard more 
properly resides with the exception for existing operations.
    As stated in the preamble to the proposed rule, illegal 
(``wildcat'') operations and operations for which the permit has 
expired or been revoked do not qualify as existing operations under 30 
CFR 761.12(b). Because no valid permit exists in those situations, 
there are no validly authorized surface coal mining operations. 
Similarly, the exception does not apply to sites for which the 
regulatory authority has terminated jurisdiction under 30 CFR 
700.11(d)(1) or its State program counterpart.
    On-site activity or physical disturbance of the protected land is 
not a prerequisite for the exception. This interpretation is consistent 
with the underlying language in section 522(e), which excludes surface 
coal mining operations ``which exist on the date of enactment of this 
Act'' from the prohibitions of that section. Nothing in the Act or the 
term ``exist'' requires on-site activity or physical disturbance as 
opposed to legal existence. Therefore, the final rule recognizes any 
validly authorized operation as eligible for the exception for existing 
operations regardless of whether the permittee has actually begun to 
conduct surface coal mining operations on the site.
    The exception for existing operations does not extend to abandoned 
or reclaimed operations. As discussed in part VII.C.2. of this 
preamble, in enacting section 522(e), Congress intended to prohibit new 
surface coal mining operations on the lands listed in that section, 
with certain exceptions. We believe that both that intent and the 
express language of section 522(e) extends to the prohibition of new 
operations on lands upon which surface coal mining operations 
permanently ceased before the lands came under the protection of 
section 522(e). Any person seeking to reactivate an abandoned mine or 
facility or to remine an abandoned or reclaimed site must comply with 
the prohibitions and limitations of section 522(e) and 30 CFR 761.11 as 
a prerequisite for obtaining a permanent program permit. Allowing 
abandoned or reclaimed operations to qualify for the exception for 
existing operations would be inconsistent with both the purpose of 
section 522(e) and the accepted meaning of ``existing.''
    The proposed rule would have limited the scope of the exception for 
existing operations to lands for which the permittee or operator had 
the right under State property law, as demonstrated in accordance with 
30 CFR 778.15, to enter and conduct surface coal mining operations as 
of the date that the land in question came under the protection of 30 
CFR 761.11 or section 522(e) of SMCRA. By limiting the exception for 
existing operations in this fashion, the proposed rule effectively 
required that the permittee seek and obtain a VER determination before 
initiating surface coal mining operations on any lands within the 
permit area for which no right of entry had been obtained before the 
land came under the protection of section 522(e).
    After evaluating the comments received, we have decided not to 
include this provision in the final rule. In implementing other 
requirements of SMCRA, we consider lands within the permit area for 
which the permittee has not yet obtained right of entry to be distinct 
from other lands within the permit area only in one respect: the 
permittee may not disturb those lands before obtaining right of entry. 
After obtaining right of entry, the permittee may enter those lands and 
conduct surface coal mining operations to the extent authorized under 
the permit.
    We anticipate that this change from the proposed rule will have 
little practical effect in terms of the actual right to mine. The final 
rule specifies that the exception for existing operations includes all 
lands covered by an approved permanent program permit at the time that 
the lands come under the protection of 30 CFR 761.11. However, nothing 
in SMCRA, its implementing regulations, or the permit authorizes the 
permittee to disturb lands within the permit area before obtaining 
proper right of entry. Therefore, if the permittee is unable to procure 
right of entry for the lands within the permit area covered by the 
exception for existing operations, there will be no surface coal mining 
operations on those lands.
    The final rule that we are adopting today is consistent with 
paragraph (d)(1) of the 1983 VER definition, its preamble, and the 
rationale used by the courts in upholding the concept of ``continually 
created VER.'' In particular, the 1983 preamble states that paragraph 
(d)(1) of the 1983 definition was intended to prevent the disruption of 
mining or deprivation of the right to mine after the permittee made the 
substantial investments required to obtain a permit. By way of 
explanation, the preamble stated that to do otherwise would be totally 
inconsistent with the framework of protection that SMCRA provides to 
both permittees and citizens:

    Without the protection provided by this provision, it would be 
possible, for instance, for a person who objected to a mining 
operation to move a mobile home to the edge of the property 
adjoining a mine, and occupy it, thereby forcing the operator to 
cease all operations within 300 feet of this occupied dwelling. OSM 
does not believe that this is the intended result of section 522(e) 
of the Act. Congress provided the public ample opportunity to review 
and make objections to any proposed mining operation through the 
permitting process. The regulatory authority is required to seek and 
consider the views of the public [before] it issues or denies a 
permit. To allow any person the opportunity to take extraordinary 
means to disrupt mining or deprive the operator of a right to mine 
after the operator has made the substantial investments required to 
obtain a permit and begin operations is totally inconsistent with 
the framework of protection the Act gives to both operators and 
citizens.

48 FR 41315, September 14, 1983.
    We relied upon the same rationale to develop the 1997 proposed rule 
and this final rule.
    In upholding paragraph (d)(1) of the 1983 definition, the U.S. 
Court of Appeals for the District of Columbia Circuit relied primarily 
on language in the legislative history of section 522 indicating that 
Congress intended to allow the continuance of mines already in 
existence at the time that land is determined to be unsuitable for 
surface coal mining operations. The court held that this principle 
``should apply equally to mines in existence as of August 3, 1977, or 
to mines subsequently started on lands which have permits approved for 
mining.'' NWF v. Hodel, 839 F.2d at 750 (1988). The court ruled that 
the operative principle in determining whether an operation is exempt 
from the section 522(e) prohibitions is whether it had been ``lawfully 
established'' before the land came under the protection of section 
522(e). Id. at 750-51. Although the court did not fully explain the 
meaning of ``lawfully established,'' we believe that its 
characterization of industry arguments is significant because it 
ultimately ruled in favor of industry:

    Industry, supporting the district court, argues that * * * once 
a permit has been validly issued the permit area is insulated from 
subsequent unsuitability designations.


[[Page 70803]]


Id. at 750.
    Furthermore, once a permit is issued, there is no legal impediment 
to initiating surface coal mining operations on the permit area, apart 
from any restrictions imposed as permit conditions.
    Therefore, the final rule considers an operation to be lawfully 
established upon issuance of a permanent program permit. This approach 
is consistent with 30 CFR 774.13, which provides that the regulatory 
authority cannot summarily revise or revoke an approved permanent 
program permit. Therefore, when lands covered by an approved permanent 
program permit come under the protection of 30 CFR 761.11 and section 
522(e) after permit issuance, the permittee has the right to continue 
to operate on those lands under the exception for existing operations 
unless the regulatory authority orders the permittee to revise the 
permit to remove those lands from the permit area in accordance with 
the procedures and criteria of 30 CFR 774.13. A person who believes 
that a permit has been improperly issued because a protected feature 
came into existence before rather than after permit issuance has the 
option of either filing a timely challenge to approval of the permit 
application or submitting a complaint to the regulatory authority in 
accordance with the State program counterpart to 30 CFR 842.12 or to us 
under 30 CFR 842.12. If the permit is ultimately found to be defective, 
the regulatory authority must require that the permittee revise the 
permit in accordance with 30 CFR 774.13.
    With respect to initial program operations (operations subject to 
Subchapter B of 30 CFR Chapter VII), the exception for existing 
operations includes all lands covered by whatever permit existed when 
the land came under the protection of section 522(e) or 30 CFR 761.11. 
However, except for one operation on Indian lands, we and the State 
regulatory authorities have completed the repermitting of initial 
program operations as required by 30 CFR 773.11 and section 502(d) of 
the Act. All initial program surface coal mining and reclamation 
operations on non-Indian lands that remain subject to the initial 
regulatory program are now abandoned, reclaimed, or in the process of 
reclamation. Under 30 CFR 773.11(a), no further coal removal or 
additional disturbance of these sites for purposes of conducting 
surface coal mining operations is permissible unless the person first 
obtains a permanent program permit under Subchapter G of 30 CFR Title 
VII or its State program counterpart.
    In addition, all States with the potential for coal production in 
the foreseeable future now have either a permanent State regulatory 
program approved under section 503 of SMCRA or a Federal regulatory 
program approved under section 504 of SMCRA. Therefore, we do not 
anticipate that there will be any new surface coal mining operations 
under the initial regulatory program. For all practical purposes, the 
rules that we are adopting today will be applied only to operations 
with permanent program permits.
    Some commenters argued that by its very terms, the phrase 
``existing operation'' applies only to mines for which at least some 
site preparation work has occurred. For the reasons discussed above, we 
do not agree.
    Some commenters argued that the exception for existing operations 
should apply to all lands that the permittee contemplates mining as 
part of the operation. Under this rationale, the exception would not be 
restricted to lands under permit before the land comes under the 
protection of section 522(e) and 30 CFR 761.11. We believe that such an 
expansive interpretation of the exception for existing operations runs 
contrary to the purpose for which Congress enacted section 522(e). To 
foreclose the possibility of this interpretation, we have added 
language to 30 CFR 761.12(a) to clarify that the exception applies only 
to lands under permit at the time that the land comes under the 
protection of 30 CFR 761.11.

XVII. Why Are We Removing the Prohibitions in Former 30 CFR 
761.11(h)?

    As proposed, we are removing former 30 CFR 761.11(h), which 
provided that no coal exploration or surface coal mining operations 
would be licensed or permitted on Federal lands within the National 
Park System, the National Wildlife Refuge System, the National System 
of Trails, the National Wilderness Preservation System, the Wild and 
Scenic Rivers System, or National Recreation Areas unless specifically 
authorized by acts of Congress. We published this provision on 
September 14, 1983 (48 FR 41349), in response to numerous comments from 
persons concerned that mining or drilling would occur in national parks 
and other areas protected under section 522(e)(1) of the Act.
    Industry challenged the rule on both procedural and substantive 
grounds. Upon review, the court remanded the rule to the Secretary 
because it found that he had failed to provide adequate notice and 
opportunity for comment under the Administrative Procedure Act, 5 
U.S.C. 553. The court also noted that there appeared to be no rational 
basis for distinguishing between Federal and non-Federal lands in this 
context since section 522(e)(1) of the Act prohibits surface coal 
mining operations on any lands within the statutorily protected areas 
listed in 30 CFR 761.11(h). See PSMRL II, Round III--VER, 22 Env't Rep. 
Cas. (BNA) at 1565 (1985).
    We subsequently suspended 30 CFR 761.11(h) to comply with the 
court's order. See 51 FR 41952, 41956, November 20, 1986.
    On September 22, 1988, the Department of the Interior issued a 
policy statement explaining the actions that the Department would take 
to prevent surface coal mining operations on lands protected under 
section 522(e)(1) of the Act. The policy statement commits the 
Department, subject to appropriation, to use available authorities 
(including exchange, negotiated purchase and condemnation) to seek to 
acquire mining rights within the areas listed in section 522(e)(1) 
whenever a person attempts to exercise VER. Unlike 30 CFR 761.11(h), 
the policy applies to all lands within the areas listed in section 
522(e)(1), not just to Federal lands.
    We published this policy statement in the Federal Register on 
December 27, 1988 (53 FR 52384), in conjunction with a previous 
proposed rule concerning VER. The policy remains in effect even though 
we subsequently withdrew the proposed rule on July 21, 1989.
    Contrary to the expectations of some commenters on our 1997 
proposed rule, the policy statement will not, and is not intended to, 
provide protection equivalent to that afforded by former 30 CFR 
761.11(h). As the court noted in its decision remanding paragraph (h), 
``an absolute proscription on any mining, permitting, licensing or 
exploration within the 522(e)(1) protected areas might run directly 
contrary to the statute's language that such proscriptions are subject 
to VER.'' PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1565 
(1985). Furthermore, section 522(e) only applies to surface coal mining 
operations, which section 701(28) of the Act specifically defines as 
excluding coal exploration.
    Therefore, we believe that it would be inappropriate to 
repromulgate the prohibitions in paragraph (h). The 1988 policy 
statement expresses the Secretary's intent to acquire privately held 
coal interests in areas of national significance to the extent 
financial or other resources are available to do so. Any further 
commitment would, in

[[Page 70804]]

most cases, exceed the Secretary's legal authority since most land 
acquisition actions are subject to congressional authorization and 
appropriation.
    Some commenters questioned the utility of the policy since the 
Department's discretionary funds for land acquisition are extremely 
limited, there is little Federal land in the East available for 
exchange, and the Federal Land Policy and Management Act places severe 
constraints on the exchange of Federal coal for non-Federal coal across 
State lines. The commenters also noted that most Federal lands in the 
East are in the National Forest System, which is under the jurisdiction 
of the Department of Agriculture and thus not available to the 
Secretary for exchange purposes. We acknowledge these limitations. If 
adequate funds or suitable exchange lands are not available, nothing in 
the policy obligates the Secretary to acquire lands for which a person 
has demonstrated VER.
    Other commenters argued that the policy should be extended to cover 
all lands protected under section 522(e), not just those areas listed 
in paragraph (e)(1). We understand the commenters' interest in 
protecting buffer zones for homes, schools, roads, and other features 
listed in paragraphs (e)(3) through (e)(5) of section 522 of the Act. 
However, the Secretary has neither the resources nor the authority to 
acquire these lands without specific congressional authorization or 
appropriation. Furthermore, in publishing the proposed rule, we did not 
seek comments on the policy or propose any changes to the policy. 
Therefore, both the policy and comments suggesting revision of the 
policy are outside the scope of this rulemaking.

XVIII. Why Did We Reorganize Former 30 CFR 761.12 as Secs. 761.13 
Through 761.17 and 762.14?

    Former Sec. 761.12 included a number of mostly unrelated provisions 
under the heading ``Procedures.'' Plain language principles encourage 
the use of multiple short sections with informative headings that 
address a single topic in preference to long, less focused sections 
with headings that convey relatively little information about their 
contents. We also determined that former 30 CFR 761.12(g), which 
addressed the eligibility of lands listed in section 522(e) for 
designation as unsuitable for surface coal mining operations under 30 
CFR Parts 762, 764, and 769, would be better placed in 30 CFR Part 762, 
which contains the criteria for designating lands as unsuitable for 
mining pursuant to those parts of our regulations.
    Therefore, we are reorganizing and recodifying former Sec. 761.12 
as shown in the following table:

------------------------------------------------------------------------
             Previous  citation                     New  citation
------------------------------------------------------------------------
761.12(a)..................................  761.17(a)
761.12(b)(1)...............................  761.17(b)
761.12(b)(2)...............................  761.17(c)
761.12(c)..................................  761.13
761.12(d)..................................  761.14
761.12(e)..................................  761.15
761.12(f)..................................  761.17(d)
761.12(g)..................................  762.14
761.12(h)..................................  761.16(f)
------------------------------------------------------------------------

    In addition, we are consolidating all procedural requirements 
related to VER determinations into a new Sec. 761.16 and expanding 
those requirements to cover all steps of the VER determination process. 
The portion of former 30 CFR 761.12(b)(2) that pertains to notification 
of the National Park Service and the U.S. Fish and Wildlife Service no 
longer appears as a separate requirement because the general 
notification requirements of new 30 CFR 761.16(d) subsume this 
provision.
    As proposed, we are removing the portion of former 30 CFR 761.12(h) 
that provided for administrative appeals of existing operation 
determinations. The exception for existing operations in 30 CFR 761.12 
does not require any affirmative action or decision on the part of 
either the permittee or the regulatory authority. As explained in Part 
XVI of this preamble, the exception for existing operations merely 
allows an already permitted operation to continue operating within the 
permit boundaries in existence at the time that the land comes under 
the protection of section 522(e) and 30 CFR 761.11. Hence, there is no 
action or decision to appeal.

XIX. Section 761.13: How Have We Revised the Procedural 
Requirements for Compatibility Findings for Surface Coal Mining 
Operations on Federal Lands in National Forests?

    This new section revises and replaces former 30 CFR 761.12(c). No 
commenters opposed the changes that we proposed. Nor did any commenter 
suggest revisions to the proposed rule.
    Paragraph (a) of the final rule provides that, if you intend to 
rely upon the compatibility exception in 30 CFR 761.11(b) to conduct 
surface coal mining operations on Federal lands in national forests, 
you must request that we obtain the Secretarial findings required by 30 
CFR 761.11(b). This paragraph does not differ substantively from the 
corresponding sentence in the proposed rule.
    Paragraph (b) of the final rule clarifies that you may submit a 
request for these findings before you prepare and submit an application 
for a permit or boundary revision. As we noted in the preamble to the 
proposed rule, our experience has shown that evaluation of the entire 
permit application is not essential to preparation of the requested 
findings. In addition, this clarification is consistent with 43 CFR 
4.1391(b)(1), which provides for administrative review of compatibility 
findings that are made independently of a decision on a permit 
application.
    If your request is part of a permit application, that application 
will usually include all the information that we and the U.S. Forest 
Service need to determine compatibility.
    However, if you seek a compatibility finding before preparing and 
submitting a permit application, we will not have access to the 
information normally included in the application. Therefore, paragraph 
(b) of the final rule also specifies that, if you submit a request 
independently of a permit application, your request must include 
sufficiently comprehensive information about the proposed operation to 
enable the U.S. Forest Service and us to properly evaluate the request 
and prepare adequately documented determinations and findings.
    To provide better guidance as to the meaning of this requirement, 
the final rule fleshes out the proposed rule, which required 
``information about the nature and location of the proposed surface 
coal mining operations,'' by requiring that you submit a map of the 
proposed operation and an explanation of how the proposed operation 
would not damage the values listed in the definition of ``significant 
recreational, timber, economic, or other values incompatible with 
surface coal mining operations' in 30 CFR 761.5. (Under 30 CFR 
761.11(b), one of the findings that the Secretary must make before the 
regulatory authority may approve a permit application is that there are 
no significant recreational, timber, economic, or other values that may 
be incompatible with the proposed surface coal mining operations.) 
Finally, paragraph (b) of the final rule specifies that we may request 
that you provide any additional information that we determine is needed 
to make the required findings. We believe that our authority to request 
this information is inherent in our responsibility to make the 
findings.
    Paragraph (c) of the final rule provides that, when a proposed 
surface

[[Page 70805]]

coal mining operation or a proposed boundary revision for an existing 
surface coal mining operation includes Federal lands within a national 
forest, the regulatory authority may not issue the permit or approve 
the boundary revision before the Secretary makes the findings required 
by 30 CFR 761.11(b). This paragraph does not differ substantively from 
the corresponding sentence in the proposed rule. As proposed, the final 
rule clarifies that this provision applies to all types of permit 
applications that involve the addition of new acreage, including 
incidental boundary revisions.

XX. How Do 30 CFR 761.14 and 761.15, Which Concern Waivers for 
Buffer Zones for Public Roads and Occupied Dwellings, Differ From 
Former 30 CFR 761.12(d) and (e)?

    Sections 761.14 and 761.15 establish procedures for obtaining a 
waiver from the prohibitions of 30 CFR 761.11(d) and (e) concerning 
public roads and occupied dwellings. We did not propose any substantive 
revisions to these rules, which previously appeared in 30 CFR 761.12(d) 
and (e). However, one commenter expressed a general concern that the 
proposed rule and its preamble did not clearly specify that the VER 
exception, the exception for existing operations, and the variance and 
waiver provisions of 30 CFR 761.11(c) through (e) operate independently 
of each other; i.e., that a person who qualifies for one type of 
exception or waiver does not need to comply with the requirements for 
other types of exceptions or waivers. To address this concern, we have 
added a new paragraph (a) to 30 CFR 761.14 and 761.15 to clarify that a 
person need not obtain a waiver or variance under those sections if the 
VER exception or the exception for existing operations applies. Section 
761.14(a)(3) also recognizes that, under the conditions specified in 30 
CFR 761.11(d)(2), a person need not obtain a waiver or variance under 
30 CFR 761.14(b) to use or construct an access or haul road that joins 
a public road. Similarly, 30 CFR 761.15(a)(3) recognizes that, 
consistent with 30 CFR 761.11(e)(2), a person need not obtain a waiver 
or variance under 30 CFR 761.15(b) to use or construct an access or 
haul road that joins a public road on the opposite side of the public 
road from an occupied dwelling.
    There are no other substantive changes from the previous rules. We 
have made some organizational and editorial changes to more closely 
adhere to plain language principles and to reflect the addition of the 
term ``you'' to the definitions in 30 CFR 761.5.

XXI. Section 761.16: What Are the Submission Requirements for 
Requests for VER Determinations and How Will These Requests Be 
Processed?

    We are adding this new section to codify submission and processing 
requirements for requests for VER determinations under section 522(e) 
of the Act. Apart from a few provisions transferred from former 30 CFR 
761.12(b)(2) and (h), this section has no counterpart in the previous 
(1983) version of Part 761. In the proposed rule, this section appeared 
in somewhat different form as 30 CFR 761.13.
    SMCRA does not contain procedural requirements for VER 
determinations under section 522(e), nor does it expressly require the 
development of regulations establishing such requirements. However, 
section 201(c)(2) of the Act provides sufficient authority for adoption 
of these regulations. This provision requires that we ``publish and 
promulgate such rules and regulations as may be necessary to carry out 
the purposes and provisions of this Act.'' The regulations in 30 CFR 
761.16 provide the procedural framework necessary to ensure that the 
prohibitions of 30 CFR 761.11 and section 522(e) of the Act are fully 
and properly implemented in the manner intended by Congress. These 
rules are intended to ensure that all affected persons receive 
equitable treatment and have adequate notice and opportunity to 
participate in the decision-making process, consistent with the 
Administrative Procedure Act (5 U.S.C. 551 et seq.) and section 102(i) 
of SMCRA, which states that one of the purposes of SMCRA is to assure 
that appropriate procedures are provided for public participation. Many 
of the requirements in these regulations, especially those pertaining 
to notice and comment, also address section 102(b) of SMCRA, which 
states that one of the Act's purposes is to ``assure that the rights of 
surface landowners and other persons with a legal interest in the land 
or appurtenances thereto are fully protected from [surface coal mining] 
operations.''
    Most commenters either supported the addition of rules establishing 
VER determination procedures or did not oppose such rules in principle. 
However, some commenters took issue with individual aspects of the 
proposed rules. As a result of these comments, the final rule contains 
a number of substantive, editorial, and format changes from the 
proposed rule.

I. In What Major Ways Does the Final Rule Differ From the Proposed 
Rule?

1. Role of Federal Surface Management Agencies
    If the coal interests have been severed from other property 
interests and the surface estate is in Federal ownership, proposed 30 
CFR 761.13(b)(2) would have required a person requesting a VER 
determination for those lands to first obtain a title opinion or other 
official statement from the Federal surface management agency 
confirming that the requester has the property right to conduct the 
type of surface coal mining operations intended. This proposed 
requirement was intended to ensure that the requester and the Federal 
surface management agency reach agreement on the underlying property 
rights, or, if there is a dispute, that the parties obtain proper 
adjudication of the dispute without involving the agency responsible 
for processing VER determination requests.
    Several commenters attacked this provision as effectively providing 
the Federal surface management agency with veto authority over the VER 
determination in violation of the principle of State primacy under 
SMCRA. They argued that nothing in section 522(e) or other provisions 
of SMCRA either requires or authorizes a decision-making role for the 
Federal surface management agency in the VER determination process. One 
commenter further noted that the proposed rule may be inconsistent with 
section 510(b)(6) of the Act, which does not necessarily require 
surface owner consent to a surface coal mining operation. Under that 
section of the Act, the permit applicant has the option of 
demonstrating the right to conduct surface coal mining operations 
either under the terms of the instrument of conveyance or under State 
law pertaining to interpretation of property conveyances.
    We agree that the commenters' arguments have some validity. In 
addition, SMCRA may provide insufficient basis for the proposed rule's 
disparate treatment of Federal and non-Federal surface owners of lands 
protected under section 522(e). When presented with a very similar 
controversy involving 30 CFR 761.11(h) in the 1983 rules, the court 
noted that there appeared to be no rational basis for distinguishing 
between Federal and non-Federal lands in the context of section 
522(e)(1) because Congress did not incorporate this distinction into 
that provision of the Act. See PSMRL II, Round III--VER, 22 Env't Rep. 
Cas. (BNA) at 1565 (1985). Therefore, we are

[[Page 70806]]

replacing proposed 30 CFR 761.13(b)(2)(vi) with two new paragraphs in 
30 CFR 761.16. The new paragraphs apply to all situations in which the 
coal rights have been severed from the surface estate, not just to 
those situations in which the surface estate is in Federal ownership.
    New paragraph (b)(2)(viii) of 30 CFR 761.16 provides that, if the 
coal interests have been severed from other property interests, the 
request for a VER determination must include documentation that the 
requester has notified and provided reasonable opportunity for the 
owners of all other property interests to comment on the validity of 
the rights claimed by the requester. New paragraph (b)(2)(ix) provides 
that the request must include copies of all comments received in 
response to this solicitation. Under the final rule, any person 
requesting a VER determination for Federal lands must seek and submit 
the views of the Federal surface management agency, but, unlike the 
proposed rule, the final rule does not require submission of a title 
opinion or other official statement confirming the property rights 
claimed by the requester. In other words, the final rule requires 
consideration of information provided by the Federal surface management 
agency, but, unlike the proposed rule, it does not provide that agency 
with a veto authority over the VER determination process.
    Some commenters expressed a desire for rules that would be more 
protective of Federal lands than of other lands, based on the argument 
that the national interest in Federal lands justifies special treatment 
of those lands. We find nothing in section 522(e) to support this 
argument. Congress did not provide for greater protection of the 
Federal lands listed in that section relative to the non-Federal lands 
listed therein. We believe that the final rule protects all section 
522(e) lands in an equitable manner.
    The final rule provides ample notice and comment opportunity to all 
surface owners, including Federal surface management agencies. First, 
under 30 CFR 761.16(b)(1)(viii) and (ix), the person requesting the VER 
determination must seek comment from the surface owner and other 
persons with a property interest in the land; any comments received 
must be submitted as part of the request. Second, under 30 CFR 
761.16(d)(2), upon finding that a request is administratively complete, 
the agency responsible for the VER determination must notify both the 
surface owner and, when applicable, any agency with primary 
jurisdiction over the feature or values causing the land to come under 
the protection of 30 CFR 761.11. Under 30 CFR 761.16(d)(3), the agency 
responsible for the VER determination must provide a 30-day comment 
period to all persons notified under 30 CFR 761.16(d)(2), with a 
minimum of another 30 days available upon request. And, under 30 CFR 
761.16(e)(1), the agency responsible for the VER determination must 
evaluate the merits of all comments received and the information 
presented by the requester before making a decision. Finally, the 
surface owner or any other person with an interest in the land has the 
option of filing a quiet title action in the appropriate administrative 
or judicial forum at any time. Under 30 CFR 761.16(e)(3)(i), when such 
an action is filed before or during the comment period on a request for 
a VER determination, the agency making the VER determination must find 
that the requester has not demonstrated VER, pending a final decision 
in the litigation process.
    One commenter argued that providing concurrence or veto authority 
to another Federal agency would expose the government to liability for 
both temporary or permanent takings claims under the Fifth Amendment to 
the Constitution. As discussed above, the final rule does not provide 
concurrence or veto authority to any other Federal agency, including 
the surface management agency. While we will continue to seek input 
from these agencies and consider all comments received, we will no 
longer suspend processing of a request for a VER determination solely 
because the surface management agency advises us that it does not 
concur with the requester's property rights claims. In reaching a 
decision on the request, we will evaluate the merits of all information 
in the record, including that supplied by the requester and the surface 
management agency.
2. Handling of Situations Involving Property Rights Disputes
    In establishing right-of-entry requirements for permit applications 
for surface coal mining operations, section 507(b)(9) of SMCRA provides 
that ``nothing in this Act shall be construed as vesting in the 
regulatory authority the jurisdiction to adjudicate property title 
disputes.'' Similarly, in setting forth the findings that the 
regulatory authority must make before approving a permit application, 
section 510(b)(6)(C) of SMCRA provides that ``nothing in this Act shall 
be construed to authorize the regulatory authority to adjudicate 
property rights disputes.''
    In deference to these provisos, proposed 30 CFR 761.13(d)(2) would 
have required deferral of a decision on a request for a VER 
determination if the underlying property rights are in dispute. The 
preamble contained the following discussion of the meaning of the 
proposed rule:

    The deferral would remain in effect until the parties resolve 
the dispute in the proper venue, which is normally the State courts. 
To do otherwise would constitute de facto adjudication of the 
property rights dispute in favor of one of the parties, a result 
that would violate the prohibition on such adjudication in section 
510(b)(6)(C) of SMCRA. In addition, deferral of a decision in 
situations involving property rights disputes is consistent with 
section 102(b) of SMCRA, which states that one of the Act's purposes 
is to ``assure that the rights of surface landowners and other 
persons with a legal interest in the land or appurtenances thereto 
are fully protected from [surface coal mining] operations.''
    OSM does not interpret section 510(b)(6)(C) of SMCRA as 
requiring deferral of a decision if there is only a mere allegation 
of a property rights dispute. For example, if the parties to the 
alleged dispute are not diligently pursuing resolution of the 
disagreement in the proper venue, then, depending on the facts of 
the case, the agency processing the request for a VER determination 
might reasonably conclude that the lack of any serious attempt to 
resolve the dispute means that no bona fide dispute exists and, 
therefore, that no deferral is necessary.

62 FR 4851, January 31, 1997, col. 3.

    One commenter argued that because sections 510(b)(6) and 507(b)(9) 
concern permitting requirements, their prohibitions on regulatory 
authority adjudication of property rights disputes are not applicable 
to VER determinations under section 522(e). We disagree. The sections 
of the Act that the commenter references specifically provide that 
``nothing in this Act'' authorizes regulatory authorities to adjudicate 
property rights disputes. Clearly, Congress did not intend to limit the 
scope of the prohibition to sections 507 and 510 of the Act, as the 
commenter asserts. Furthermore, VER determinations are precursors to 
the permitting process and they may be made as part of the permitting 
process in situations in which the regulatory authority and the agency 
responsible for the VER determination are the same.
    Some commenters supported the proposed rule and its preamble 
discussion. Others argued that, in view of Congress' expressed interest 
in section 102(b) in protecting the rights of surface owners, we should 
extend the deferral requirement to include all situations in which the 
surface owner or other parties disagree with the property rights claims 
made by the requester. For the reasons discussed later in this

[[Page 70807]]

section, we no longer believe that deferral is appropriate or 
necessary.
    Many commenters opposed the proposed deferral requirement, arguing 
that deferring a decision is an abdication of our decision-making 
responsibilities under SMCRA. One commenter expressed concern that 
deferral would deprive persons of the right to a reasonably timely 
decision under the Administrative Procedure Act (APA). At 5 U.S.C. 
555(b), the APA provides that ``[w]ith due regard for the convenience 
and necessity of the parties or their representatives and within a 
reasonable time, each agency shall proceed to conclude a matter 
presented to it.'' Some commenters argued that unreasonable delays in 
the decision-making process would expose the government to temporary or 
permanent takings claims.
    Several commenters stated that property rights disputes do not 
relieve the Secretary or the regulatory authority of the duty to render 
a final decision on a matter before the agency. These commenters argue 
that administrative decisions on requests for VER determinations would 
not violate the statutory prohibition on adjudication of property 
rights disputes because an aggrieved party still has the opportunity to 
file a quiet title action in the appropriate forum even after a VER 
determination is made. As discussed in greater detail later in this 
section, the final rule requires that the agency make a decision on 
each request for a VER determination. That decision must be made on the 
merits of the information in the record unless the property rights are 
the subject of pending litigation in an appropriate legal forum. If 
there is pending litigation, we believe that the statutory prohibitions 
on adjudication of property rights disputes apply. Therefore, in those 
cases, the final rule at 30 CFR 761.16(e)(3)(i) requires that the 
agency find that the requester has not demonstrated VER. This decision 
will be subject to administrative and judicial review, and it will be 
made without prejudice, meaning that the request may be refiled once 
the property rights dispute is finally adjudicated.
    Several commenters expressed concern that deferrals would deprive 
persons requesting a VER determination of the opportunity for 
administrative and judicial review. One commenter stated that the 
effect of a refusal to process a request for a VER determination is the 
same as a negative determination, with one important distinction: 
unlike a negative determination, a deferral or other cessation of 
processing means that there is no final agency action subject to 
judicial review. As discussed in greater detail later in this section, 
these comments have some merit and we have revised the rule 
accordingly. The final rule at 30 CFR 761.16(e) requires that the 
agency make a decision on each request for a VER determination that the 
agency receives. The requester will always have the opportunity to 
pursue administrative and judicial review of that decision.
    One commenter argued that when a Federal surface management agency 
asserts a title defect, the only vehicle to evaluate the merits of 
property rights disputes is a decision on whether the requester has 
demonstrated VER. We do not agree. Any person with a valid legal 
interest has the right to file a timely quiet title action in a court 
of competent jurisdiction to resolve a property rights dispute with a 
Federal surface management agency, provided the statute of limitations 
has not expired. There is no statutory or case law requiring an 
administrative VER determination as a prerequisite for such action.
    Other commenters argued that deferrals would violate the statutory 
prohibition on adjudication of property rights disputes. According to 
the commenters, a deferral is a de facto adjudication of the property 
rights dispute in favor of the surface owner because it effectively 
denies the requester the right to conduct surface coal mining 
operations. These commenters advocated revising the rule to require 
that the agency make an administrative decision on each request. They 
noted that any person with standing who disagrees with the agency's 
decision on the VER determination has the right to seek judicial review 
of the decision.
    For reasons discussed in greater detail later in this section, the 
final rule at 30 CFR 761.16(e) requires that the agency make a decision 
on each request for a VER determination that the agency receives. We 
are not adopting the proposed rule that would have authorized deferral 
of a decision under some circumstances. However, we do not agree with 
the commenters that a deferral would be a de facto adjudication of the 
property rights dispute in favor of the surface owner. Under the 
proposed rule, the agency would have had to make a decision on the 
request for a VER determination once the property rights dispute was 
properly adjudicated or ceased to exist. Therefore, a deferral would 
only temporarily delay a decision on whether the requester has 
demonstrated the property right to conduct surface coal mining 
operations.
    One commenter stated that we should revise the proposed rule to 
authorize the deferral, or dismissal without prejudice, of a request 
for a VER determination only for situations in which the property 
rights are currently the subject of pending litigation. The commenter 
argued that section 507(b)(9) of the Act implies that this is the only 
circumstance under which Congress did not envision that we or the 
regulatory authority would make a decision purely on the basis of a 
prima facie demonstration of property rights by the requester. As 
discussed in greater detail later in this section, we concur that 
section 507(b)(9) may reasonably be read in this manner. For this and 
other reasons, final 30 CFR 761.16(e) provides that, unless the 
underlying property rights are in litigation, the agency responsible 
for the VER determination must make that determination based on the 
merits of the information in the record. If the property rights are in 
litigation, final 30 CFR 761.16(e)(3)(i) requires that the agency find 
that the requester has not demonstrated VER. The final rule specifies 
that this decision must be made without prejudice, as the commenter 
suggested.
    One commenter expressed concern that, under the proposed rule, 
persons with no legal standing could allege a property rights dispute 
and thus preclude a decision on the request for a VER determination. 
The commenter urged that, at a minimum, we incorporate the preamble 
restrictions on the meaning of the term ``property rights disputes'' 
into the rule itself. As discussed below, we have revised the final 
rule to address the commenter's concerns.
    Most commenters opposing the proposed rule and its deferral 
requirement cited two Federal court decisions from the Eastern District 
of Kentucky, Akers v. Baldwin, No. 84-88 (February 28, 1985) and Akers 
v. Bradley, No. 84-88 (June 1988) as supporting their position. Both 
decisions concern the same case, which dealt with the issue of what 
action the regulatory authority could and should take on a permit 
application while a property rights dispute is pending resolution in 
State court. In its opinion, the court included the following 
discussion of the meaning of the section 510(b)(6)(C) prohibition on 
regulatory authority adjudication of property rights disputes:

    The court finds itself simply unable to accept the arguments of 
the state defendants and intervening defendants that Congress did 
not intend that the state agency regulating surface mining not be 
required to make a determination whether the permit

[[Page 70808]]

application reflects a prima facie right under state law to engage 
in surface mining.
    Such argument flies in the face of the plain and unambiguous 
language of the statute and also its context and history. Thus, 30 
U.S.C. Sec. 1260(b)(6) [section 510(b)(6) of SMCRA] requires the 
mining company applicant for a permit to demonstrate in one of three 
ways that it has the right to surface mine. This may be done by 
furnishing the written consent of the surface owner, a conveyance 
expressly granting the right to surface mine, or a deed which when 
considered with applicable state law will reflect such right.
    The state and intervening defendants argue that for the state 
agency to construe a deed in the light of state law is to engage in 
the resolution of a property dispute in violation of the language of 
the federal statute. This construction is not borne out by the 
legislative history.
* * * * *
    Proper principles of statutory construction require the court to 
construe the statute as a whole giving effect to all of its 
language. [Citation omitted.] The only construction of 30 U.S.C. 
1260(b)(6) which meets this criterion is that * * * Congress 
intended that the state regulatory authority reviewing the permit 
application administratively ascertain that a prima facie showing of 
the right to surface mine under state law has been properly 
documented by the applicant. To this extent, the agency is required 
to make a legal determination. This is subject, of course, to the 
right of the parties to resort to the courts for a final 
determination, which the state agency must then respect.
    The court concludes that the language so heavily relied upon by 
the state and intervening defendants appearing at the end of 
Sec. 1260(b)(6)(C)--
    ``Provided, That nothing in this [Act] shall be construed to 
authorize the regulatory authority to adjudicate property rights 
disputes''--means only that the regulatory agency would not have 
power to determine whether any given conveyance had been obtained by 
fraud, whether the consent obtained was signed by the proper heirs 
to a particular tract of land, whether there was a boundary line or 
other dispute concerning the realty's description, and other such 
individualized matters.

Akers v. Baldwin, C.A. No. 84-88 (E.D. Ky, Feb. 28, 1985), slip op. at 
9-12, emphasis added.
    The court noted that, under SMCRA, the regulatory authority has no 
administrative procedures for ruling on boundary line or fraud claims, 
on who is the proper heir to a particular tract of real estate, or 
other individualized disputes of similar nature. The court further 
stated its belief that the regulatory authority could not prohibit 
permit issuance on the basis of disputes of this nature. According to 
the court, construing the Act in this manner ``could prevent issuance 
of a permit even where a deed expressly granted the right to surface 
mine,'' a result which the court found to be inconsistent with 
Congressional intent. Akers v. Baldwin, supra, at 15.
    In a June 20, 1988 decision finally disposing of this case, now 
entitled Akers v. Bradley, the court reiterated its conclusion in Akers 
v. Baldwin, supra, that ``[30] U.S.C. Sec. 1260(b)(6) [section 
510(b)(6) of SMCRA] and the legislative history reflect a congressional 
intent that the regulatory authority reviewing the permit application 
make an administrative determination that the language of the severance 
instrument is construed under state law to authorize surface mining.'' 
The court also rejected plaintiffs' argument that the regulatory 
authority must withhold or suspend the permit if the agency receives an 
objection disputing the applicant's right to mine coal by surface 
methods: ``The court finds no clear indication that Congress intended 
the permit process to be suspended in this circumstance * * *.'' Akers 
v. Bradley, unpaginated slip op.
    After considering the Akers court's analysis of the meaning of the 
statutory prohibition on adjudication of property rights, commenters' 
arguments concerning the deferral provisions of the proposed rule, and 
the language of the Act, we have decided against adoption of proposed 
30 CFR 761.13(d)(2)(ii), which would have required deferral of a 
decision on a request for a VER determination whenever the underlying 
property rights are in dispute. Our decision not to proceed with the 
approach in the proposed rule also receives support from Helmick v. 
United States, No. 95-0115 (N.D. W.Va. 1997), in which the court 
ordered us to make a decision on a VER determination request even 
though the surface and mineral owners disagreed about the proper 
interpretation of the deeds for the property.
    By requiring that the agency make an appealable decision on every 
request, the final rule is consistent with the public policy interest 
in expeditious decision-making. And, by requiring that the agency find 
that the requester has not demonstrated VER if the property rights are 
the subject of pending litigation, the final rule properly balances 
that public policy interest with the need to protect the interests of 
surface landowners and other persons with a legal interest in the 
property, as directed by section 102(b) of SMCRA. In addition, the 
final rule is consistent with the Interior Board of Land Appeals' 
interpretation of section 510(b)(6)(C) of SMCRA in Marion A. Taylor, 
125 IBLA 271, 277 (February 19, 1993), as discussed later in this 
portion of the preamble.
    The final rule that we are adopting today requires that the agency 
make a decision on every request for a VER determination that it 
receives. Under 30 CFR 761.16(e)(3)(i), the agency must determine that 
the requester has not demonstrated VER whenever the property rights 
claimed by the requester are the subject of pending litigation in a 
court or administrative body with jurisdiction over the property rights 
in question. That determination must be subject to administrative and 
judicial review and it must be made without prejudice, meaning that the 
requester may refile the request once the property rights dispute is 
finally adjudicated. In all other cases involving property rights 
disagreements, the final rule, at 30 CFR 761.16(e)(3)(ii), requires 
that the agency evaluate the merits of the information in the record, 
including all comments received, and determine whether the requester 
has demonstrated that the requisite property rights exist in accordance 
with paragraph (a), (c)(1), or (c)(2) of the definition of VER. In the 
absence of pending litigation, the agency may not defer a decision on 
the merits of the request merely because the surface owner, the surface 
management agency, or other persons oppose the request or disagree with 
the validity of the property rights claimed by the requester.
    We believe that the final rule reflects good administrative 
practice by reducing the lengthy delays that sometimes result from 
deferring decisions until property rights disagreements are fully 
resolved. The rule is responsive to those comments arguing for a more 
expedited, understandable, and predictable decision-making process in 
situations that involve property rights disagreements. The rule also is 
consistent with commenters' desire for decisions that are subject to 
administrative and judicial review. And it provides ample opportunity 
for persons who disagree with the requester's property rights claims to 
initiate legal action contesting those claims and thus activate the 
provision of the rule that requires the agency to find that the 
requester has not demonstrated VER, pending final adjudication of the 
dispute.
    We believe that 30 CFR 761.16(e)(3)(i), which requires that the 
agency determine that the requester has not demonstrated VER whenever 
the property rights claimed by the requester are the subject of pending 
litigation, is consistent with section 102(b) of SMCRA. That section 
states that one of the Act's purposes is to ``assure that the rights of 
surface landowners and other

[[Page 70809]]

persons with a legal interest in the land or appurtenances thereto are 
fully protected from [surface coal mining] operations.'' Section 
102(m), which states that another purpose of SMCRA is ``protection of 
the public interest,'' provides further support for this rule.
    The final rule also is consistent with the court's assertion in the 
Akers decision that the regulatory authority should not issue mining 
permits prior to the conclusion of litigation concerning the 
interpretation of property rights conveyances for lands within those 
permit applications. In reaching this decision, the court found that:

    [T]he public interest dictates that the physical integrity of 
the surface lands be preserved until the constitutionality of the 
statute discussed herein [relating to broad form deeds] has been 
finally determined. The mining companies can always do their mining 
after the statute is declared unconstitutional, if such is the 
result. The lands, once strip mined, cannot be restored to their 
pristine state.

Akers v. Baldwin, No. 84-88 (E.D. Ky. 1985), slip op. at 14-15.
    We believe that a similar rationale should apply to VER 
determinations under section 522(e), since these determinations are 
precursors to permitting actions, and may be made as part of the 
permitting process.
    In addition, the final rule is consistent with the Interior Board 
of Land Appeals' interpretation of section 510(b)(6)(C) of SMCRA in 
Marion A. Taylor, 125 IBLA 271, 277 (February 19, 1993). In that case, 
the Board held that, if the regulatory authority receives notice of a 
legal dispute concerning the validity of property rights, but 
nonetheless allows the applicant or permittee to conduct surface coal 
mining operations on the disputed area, the regulatory authority has 
effectively adjudicated the property rights dispute in favor of the 
applicant or permittee in violation of section 510(b)(6)(C) of the Act. 
The Board found that the existence of a legitimate ongoing legal 
dispute means that the permit applicant was unable to demonstrate--and 
the regulatory authority was unable to find--that the applicant had the 
legal right to mine the coal by the method intended. VER determinations 
are precursors to permitting actions, and may be made as part of the 
permitting process. Therefore, the Board's rationale also would apply 
to VER determinations in situations involving property rights disputes 
that are pending resolution in a court of competent jurisdiction or 
other appropriate legal venue.
    However, we do not interpret the proviso in section 510(b)(6)(C) of 
SMCRA as applying to situations in which there is only a mere 
allegation of a property rights dispute. As stated in the preamble to 
the proposed rule, if the parties are not diligently pursuing 
resolution of their disagreement in the proper administrative or 
judicial venue, then the agency processing the request for a VER 
determination may reasonably conclude that the lack of any serious 
attempt to resolve the disagreement in the appropriate legal venue 
means that no bona fide dispute exists. We believe that the threshold 
that 30 CFR 761.16(e)(3)(i) establishes for property rights disputes is 
a reasonable approach that will comply with the requirements of the Act 
while avoiding the potential disruption of the permitting process and 
mining industry that could result from a lower threshold that 
countenances unsupported or frivolous allegations. This threshold also 
should resolve a commenter's concern that, under the proposed rule, 
persons with no legal standing could allege a property rights dispute 
and thus preclude a decision on the request for a VER determination.
    Further, as one commenter noted, applying the statutory prohibition 
on adjudication of property rights disputes only to those disputes 
pending resolution in the appropriate legal venue is consistent with 
section 507(b)(9) of the Act. This section, which, like section 
510(b)(6)(C), contains a prohibition on regulatory authority 
adjudication of property title disputes, provides that a permit 
applicant must identify whether the claimed right of entry is the 
subject of pending court litigation. Although not necessarily 
conclusive, this provision does suggest that Congress did not consider 
a property rights dispute to be bona fide in the absence of litigation.
    Finally, in Akers v. Bradley, supra, the court held that there is 
no indication that Congress intended section 510(b)(6)(C), the other 
provision of SMCRA that contains a prohibition on adjudication of 
property rights disputes, to be interpreted as requiring that the 
regulatory authority withhold or suspend the permit whenever the agency 
receives an objection disputing the applicant's right to mine coal by 
surface methods.
    Some commenters argued that a mere allegation of a property rights 
dispute should suffice to invoke the prohibition on adjudication of 
property rights disputes in section 510(b)(6)(C) of the Act because 
many persons would likely become aware of a potential dispute only upon 
receipt of the notice required by the rule. We recognize that the 
situation posited by the commenters is likely to occur. However, we 
believe that the final rule provides persons with legitimate property 
rights concerns ample opportunity to initiate the appropriate legal or 
administrative action during the comment period on the VER 
determination request.
    For clarity, we have revised the public notice content requirements 
in 30 CFR 761.16(d)(1) by adding a new paragraph (iv) to require that 
the notice include a statement specifying that the agency will not make 
a decision on the merits of the request if, by the close of the comment 
period on the request, a person with a legal interest in the property 
initiates appropriate legal action to resolve the property rights 
dispute in the proper venue. But even if a person is unable to take 
legal action during this time, the property rights adjudication 
prohibition of section 510(b)(6)(C) means that subsequent initiation of 
litigation to resolve the property rights dispute can prevent 
regulatory authority approval of any permit application that might 
follow the VER determination. See Marion A. Taylor, 125 IBLA 271 
(February 19, 1993).
    One commenter argued that an agency determination that a person has 
VER despite the presence of comments in the record that disagree with 
the requester's property rights claims would expose the agency to 
takings claims on the basis that the decision authorized physical 
intrusion. According to the commenter, it would constitute ``an 
official blessing of an improper usurpation of landowner and homeowner 
rights to uninterrupted possession and enjoyment of property.'' We are 
not aware of any case law supporting these assertions.
3. Action on Incomplete Requests
    The proposed rule did not specify what action the agency 
responsible for the VER determination could or should take if the 
person requesting the VER determination does not respond to an agency 
request for additional information. Final 30 CFR 761.16(c)(4) and 
(e)(4) state that if you do not provide the necessary additional 
information in a timely fashion, the agency must issue a determination 
that you have not demonstrated VER.
    The rules also specify that the agency must make these 
determinations without prejudice, meaning that you may refile the 
request at a later time if desired.
    We are adding these provisions to the final rule in response to 
several comments urging us to streamline the decision-making process to 
minimize delays. One commenter requested that the final rules be 
revised to ``avoid the inefficient and unfair delays attendant to the 
agency's historic procedural

[[Page 70810]]

posturing to avoid disposition of issues critical to private property 
rights.'' The commenter stated that prompt issuance of final decisions 
also would reduce the agency's takings exposure and better comport with 
5 U.S.C. 555(b), which provides that ``[w]ith due regard for the 
convenience and necessity of the parties or their representatives and 
within a reasonable time, each agency shall proceed to conclude a 
matter presented to it.''
    We do not agree that the commenter has accurately characterized the 
agency's previous actions concerning VER determinations. However, we 
agree that prompt decisions are desirable. Accordingly, we are adding 
30 CFR 761.16(c)(4) and (e)(4) to avoid decision-making delays 
resulting from incomplete submissions or failure to respond to agency 
requests for additional information. Under those rules, when a person 
does not supply the information requested by the agency under 30 CFR 
761.16(b) or (e)(1) within the time specified, the agency must issue a 
determination that the person has not demonstrated VER. A person who 
receives this type of VER determination has the right to seek 
administrative and judicial review of the determination. In addition, 
the final rules specify that the agency must make these determinations 
without prejudice, meaning that the request may be resubmitted at any 
time.
    We anticipate that this provision of the final rule will eliminate 
the lengthy delays in decision-making that sometimes have occurred in 
the past as a result of incomplete submissions. In addition, the final 
rule is consistent with Helmick v. United States, No. 95-0115 (N.D. 
W.Va. 1997), in which the court ordered us to issue a VER determination 
even though the requester had not supplied all requested information.
    Whenever an agency issues a decision under 30 CFR 761.16(c)(4) or 
(e)(4), it will retain the materials submitted with the request. Those 
materials will become part of the administrative record for the 
decision. If the requester subsequently desires a new determination, 
the agency may, at its discretion, either require complete resubmission 
of the request or allow the requester to submit only the new materials 
together with a request for reconsideration of the previous 
determination.
4. Administrative Completeness Reviews.
    When a person submits a request for a VER determination, the 
proposed rule would have required the agency responsible for the VER 
determination to initiate notice and comment procedures without first 
reviewing the request to determine whether it contained all components 
required under 30 CFR 761.13(b). We believe that this approach 
represents an inefficient use of resources on the part of both the 
agency and the requester because it could result in premature notice 
and comment.
    Therefore, the final rule includes a new 30 CFR 761.16(c), which 
provides that, upon receipt of a request for a VER determination, the 
agency must conduct an initial review to determine whether the request 
includes all applicable components of the submission requirements of 30 
CFR 761.16(b). This review addresses only the administrative 
completeness of the request, not its legal or technical adequacy.
    Under the final rule, the agency must proceed to implement the 
notice and comment requirements of 30 CFR 761.16(d) if the request 
includes all necessary components. However, if the request does not 
include all necessary components, the rule requires that the agency 
notify the requester and establish a reasonable time for submission of 
the missing information. If the requester does not submit this 
information within the specified time or any subsequent extensions, the 
final rule requires that the agency issue a determination that the 
requester has not demonstrated VER. Under the final rule, the agency 
must issue this determination without prejudice, meaning that the 
requester may refile the request at any time after obtaining the 
missing information.
    We believe that the addition of this step will streamline the 
decision-making process, as desired by several commenters. It also will 
promote more efficient use of resources by avoiding the expenses and 
delays associated with providing notice and comment on an incomplete 
request. And it is consistent with the permit application review 
requirements of 30 CFR 773.13(a), which do not require initiation of 
notice and comment procedures until the regulatory authority determines 
that the application is administratively complete. Since VER 
determinations are precursors to the permitting process, and may be 
made as part of that process, we believe that the use of similar review 
procedures is appropriate.
5. Notification Requirements for Lands Listed in 30 CFR 761.11(a)
    As published on September 14, 1983, 30 CFR 761.12(b)(2) included a 
requirement that the agency responsible for the VER determination 
notify the National Park Service or the U.S. Fish and Wildlife Service 
of any request for a VER determination for lands within the boundaries 
of an area over which one of those agencies has jurisdiction. Proposed 
30 CFR 761.13(c)(4) would have applied this requirement to all areas 
protected under section 522(e)(1) of SMCRA and 30 CFR 761.11(a), not 
just to those areas under the jurisdiction of the National Park Service 
or the Fish and Wildlife Service.
    However, upon reconsideration, we find no basis for disparate 
treatment of section 522(e)(1) lands relative to other lands protected 
under section 522(e). In enacting section 522(e), Congress did not 
establish a hierarchy of protection or make any other substantive 
distinction among the lands protected under that section. Furthermore, 
this provision is largely duplicative of proposed 30 CFR 
761.13(c)(1)(iv) and (2), which would have required that the agency 
provide notice and reasonable opportunity to comment to the owner of 
the structure or feature causing the land to come under the protection 
of 30 CFR 761.11.
    Therefore, we are not adopting proposed 30 CFR 761.13(c)(4). 
Instead, we are modifying the notice and comment provisions of proposed 
30 CFR 761.13(c)(1)(iv) and (2) to incorporate the minimum comment 
period requirements of proposed 30 CFR 761.13(c)(4) and the 1983 
version of 30 CFR 761.12(b)(2). In the final rule, those requirements 
appear at 30 CFR 761.16(d)(1)(vi) and (vii), (2)(ii), and (3), which 
provide for a minimum initial comment period of 30 days from the date 
that the agency with primary jurisdiction over the values or feature 
causing the land to come under the protection of 30 CFR 761.11 receives 
the notice, with another 30 days automatically available upon request. 
We have also added a proviso to 30 CFR 761.16(d)(3) stating that the 
agency responsible for the VER determination may grant additional time 
for good cause upon request. The latter provision is intended to cover 
extenuating and unusual circumstances such as situations in which 
critical agency personnel or one or more persons listed in 30 CFR 
761.16(d)(2) are legitimately absent or unavailable during the comment 
period. Another example would be a situation in which a surface owner 
or surface management agency is unable to complete the necessary legal 
research within 60 days despite reasonably diligent efforts to do so.

[[Page 70811]]

B. Paragraph (a): To Which Agency Must You Submit a Request for a VER 
Determination?

    Final 30 CFR 761.16(a) provides that we will make all VER 
determinations for Federal lands within the areas listed in 30 CFR 
761.11 (a) and (b). Those areas correspond to the areas listed in 
paragraphs (e)(1) and (e)(2) of section 522 of SMCRA. VER 
determinations for all other lands, including non-Federal lands within 
the areas listed in 30 CFR 761.11(a), are the responsibility of the 
regulatory authority. The final rule thus reflects the revised Federal 
lands regulations at 30 CFR 740.4(a)(4) and 745.13(o).
    Consistent with revised 30 CFR 740.11(g), the final rule also 
specifies that the definition of VER in 30 CFR 761.5 applies to all VER 
determinations for lands protected under 30 CFR 761.11 (a) or (b), 
including non-Federal lands within the areas listed in 30 CFR 
761.11(a), regardless of whether we or the State make the 
determination. For all other lands, both we and State regulatory 
authorities must use the definition of VER in the appropriate approved 
regulatory program. Within primacy States without a cooperative 
agreement under 30 CFR part 745, and in any State with a cooperative 
agreement that does not delegate VER determination responsibility to 
the State, we will apply the approved State program definition of VER 
when making VER determinations for Federal lands outside the areas 
listed in 30 CFR 761.11 (a) and (b), as required by 30 CFR 740.11(a).
    In keeping with plain language principles and a request from a 
commenter, final 30 CFR 761.16(a) presents these requirements in 
tabular form:

----------------------------------------------------------------------------------------------------------------
                                                 Type of land to       Agency
  Paragraph of Sec.  761.11        Protected      which  request  responsible for     Applicable definition of
   that provides protection         feature          pertains       determination      valid existing rights
----------------------------------------------------------------------------------------------------------------
(a)..........................  National parks,   Federal........  OSM............  Federal. \1\
                                wildlife
                                refuges, etc.
(a)..........................  National parks,   Non-Federal....  Regulatory       Federal. \1\
                                wildlife                           authority.
                                refuges, etc.
(b)..........................  Federal lands in  Federal........  OSM............  Federal. \1\
                                national
                                forests \3\.
(c)..........................  Public parks and  Does not matter  Regulatory       Regulatory program.\2\
                                historic places.                   authority.
(d)..........................  Public roads....  Does not matter  Regulatory       Regulatory program.\2\
                                                                   authority.
(e)..........................  Occupied          Does not matter  Regulatory       Regulatory program.\2\
                                dwellings.                         authority.
(f)..........................  Schools,          Does not matter  Regulatory       Regulatory program.\2\
                                churches,                          authority.
                                parks, etc.
(g)..........................  Cemeteries......  Does not matter  Regulatory       Regulatory program.\2\
                                                                   authority.
----------------------------------------------------------------------------------------------------------------
\1\ Definition in 30 CFR 761.5.
\2\ Definition in applicable State or Federal regulatory program in 30 CFR Chapter VII, Subchapter T.
\3\ Neither section 522(e) of SMCRA nor 30 CFR 761.11 provides special protection for non-Federal lands within
  national forests. Therefore, this table does not include a category for those lands.

    See Parts X and XI of this preamble for a discussion of the 
comments received on this aspect of the proposed rule.

C. May a Request for a VER Determination Be Submitted Separately From a 
Permit Application?

    Paragraph (b) of 30 CFR 761.16 expressly states that you may submit 
a request for a VER determination before preparing and submitting a 
permit application, unless the applicable regulatory program provides 
otherwise. The final rule thus codifies existing policy, as stated in 
the preambles to the 1983 final rule (see 48 FR 41322, September 14, 
1983) and the 1991 proposed rule (see 56 FR 33161, July 18, 1991), and 
removes language in conflict with that policy. It also is consistent 
with 43 CFR 4.1391(b)(1), which provides for administrative review of 
VER determinations that are made independently of a decision on a 
permit application.
    Surface coal mining operations may not always be technically 
feasible, legally permissible, or economically viable in the absence of 
VER. Therefore, a requirement that requests for VER determinations be 
accompanied by a permit application may be unreasonably burdensome in 
that it could result in significant permit application preparation 
expenditures that would be futile if the agency ultimately determines 
that the requester does not have VER and consequently is ineligible to 
receive a permit. This is especially true of Federal lands within the 
areas specified in 30 CFR 761.11 (a) and (b), for which we have sole 
authority to process requests for VER determinations even when we are 
not the regulatory authority responsible for reviewing permit 
applications.
    However, our adoption of this rule does not prevent States from 
requiring that requests for VER determinations be accompanied by a 
permit application. Sections 503 and 505 of SMCRA afford States 
considerable discretionary authority to adopt requirements that either 
have no Federal counterparts or are more stringent than their Federal 
counterparts in achieving the requirements and purposes of the Act. 
Furthermore, before reaching a decision on a request for a VER 
determination, we reserve the right to request information normally 
submitted as part of a permit application. We will make this request 
only if we determine, on a case-specific basis, that we need that 
information to properly evaluate the request for a VER determination.

D. Paragraph (b): What Information Must You Include in a Request for a 
VER Determination?

    Paragraph (b) of 30 CFR 761.16 contains submission and content 
requirements for requests for VER determinations. As discussed in the 
preamble to the proposed rule, we derived these requirements primarily 
from provisions that we proposed as 30 CFR 761.12(a)(1) on July 18, 
1991, which, in turn, are similar to guidelines in the preamble to the 
1983 definition of VER. See 48 FR 41314, September 14, 1983. However, 
because the definition of VER that we are adopting today does not 
contain a takings standard, the final rule does not include items from 
the 1983 and 1991 documents that pertain only to that standard.
Paragraph (b)(1): Submission Requirements for Property Rights 
Demonstration
    All requests for VER determinations for surface coal mining 
operations other than roads must include the information

[[Page 70812]]

required by 30 CFR 761.16(b)(1). The agency responsible for making the 
VER determination will use this information to evaluate whether you 
have met the property rights demonstration requirement of paragraph (a) 
of the definition of VER in 30 CFR 761.5.
    Paragraphs (b)(1) (i) through (vi) of the final rule are 
substantively identical to paragraphs (b)(2) (i) through (v) and (vii) 
of 30 CFR 761.13 in the proposed rule. These paragraphs require a legal 
description of the land; complete documentation of the character and 
extent of the requester's current interests in the surface and mineral 
estates in question; a complete chain of title and discussion of any 
title instrument provisions concerning mining or mining-related surface 
disturbances or facilities; a description of the nature and ownership 
of all property rights for the surface or mineral estates in question 
as of the date that the land came under the protection of 30 CFR 
761.11; and a description of the type and extent of surface coal mining 
operations planned, including the intended method of mining and any 
mining-related surface facilities, and an explanation of how the 
planned operations are consistent with State property law.
    Some commenters opposed these information requirements as 
excessive, overly burdensome, and improper. They argue that the rule 
should require no more documentation of property rights than the right-
of-entry information that must be submitted under 30 CFR 778.15 as part 
of a permit application. We do not agree. In enacting the prohibitions 
of section 522(e) of the Act, Congress clearly wished to minimize 
surface coal mining operations on the lands listed in that section. See 
the discussion in Part VII.C. of this preamble. Therefore, we and State 
regulatory authorities have an obligation to ensure that a person 
seeking to conduct surface coal mining operations on those lands 
provides complete documentation of the requisite property rights. It 
has been our experience that a simple description of the permit 
applicant's basis for claiming the right to enter and begin surface 
coal mining operations, which is all that 30 CFR 778.15 requires to 
obtain a permit, does not satisfy this obligation.
    We believe that the requirements of 30 CFR 761.16(b)(1) are the 
minimum necessary to ensure that the agency has a record which 
accurately and completely documents that the necessary property rights 
exist. Property rights and related legal issues can be very complex. 
The previous rules provided little guidance on what information must be 
submitted as part of a request for a VER determination. We have found 
that persons requesting VER under those rules sometimes had difficulty 
understanding exactly what information was necessary or what legal 
issues needed to be addressed. Incomplete submissions resulted in 
repeated requests for additional information. These requests and the 
time required to collect and review the additional documentation 
sometimes caused significant delays in the decision process and 
occasionally the permitting process. Therefore, in this final rule, we 
are establishing specific information requirements in an attempt to 
ensure that a person knows what documentation must be submitted as part 
of a request for a VER determination. These requirements should 
expedite the decision-making process.
    Proposed 30 CFR 761.13(b)(2)(vi) provided that, if the coal 
interests have been severed from other property interests and the 
surface estate is in Federal ownership, the request must include a 
title opinion or other official statement from the Federal surface 
management agency confirming that the requester has a property right to 
conduct the type of surface coal mining operations intended. However, 
several commenters opposed this provision of the proposed rule as 
improperly providing the Federal surface management agency with a veto 
authority over the VER determination in violation of the principle of 
State primacy under SMCRA.
    For the reasons discussed in Part XXI.A.1. of this preamble, we are 
replacing proposed paragraph (b)(2)(vi) with two new paragraphs in the 
final rule. New 30 CFR 761.16(b)(1)(viii) provides that, if the coal 
interests have been severed from other property interests, the request 
for a VER determination must include documentation that the requester 
has notified and provided reasonable opportunity for the owners of all 
other property interests to comment on the validity of the property 
rights claimed by the requester. New 30 CFR 761.16(b)(1)(ix) provides 
that the request must include copies of all comments received in 
response to that solicitation.
    Finally, in response to a request from a State regulatory 
authority, we are adding 30 CFR 761.16(b)(1)(vii) to clarify that the 
proposed rule's requirement for complete documentation of the nature 
and ownership of all property interests includes the names and 
addresses of all current owners of the surface and mineral estates in 
the land. As the commenter noted, the agency needs that information to 
comply with the notification requirements of 30 CFR 761.16(d)(2).
Paragraph (b)(2): Submission Requirements for Good Faith/All Permits 
Standard
    Final 30 CFR 761.16(b)(2) provides that, if your request relies 
upon the good faith/all permits standard in paragraph (b)(1) of the 
definition of VER in 30 CFR 761.5, you must submit the property rights 
information required by 30 CFR 761.16(b)(1). In addition, the final 
rule requires that you submit the following information about permits, 
licenses, and authorizations for surface coal mining operations on the 
land to which your request pertains:
     Approval and issuance dates and identification numbers for 
any permits, licenses, and authorizations that you or a predecessor in 
interest obtained before the land came under the protection of 30 CFR 
761.11 or section 522(e). [30 CFR 761.16(b)(2)(i)]
     Application dates and identification numbers for permits, 
licenses, and authorizations for which you or a predecessor in interest 
submitted an application before the land came under the protection of 
30 CFR 761.11 or section 522(e). [30 CFR 761.16(b)(2)(ii)]
     An explanation of any other good faith effort that you or 
a predecessor in interest made to obtain the necessary permits, 
licenses, and authorizations as of the date that the land came under 
the protection of 30 CFR 761.11 or section 522(e). [30 CFR 
761.16(b)(2)(iii)]
    Relevant permits and authorizations may include, but are not 
limited to, State or Federal surface or underground coal mining 
permits, site-specific wetlands disturbance permits, zoning or other 
local governmental approvals, National Pollutant Discharge Elimination 
System permits, State air pollution control permits, Mine Safety and 
Health Administration authorizations, U.S. Forest Service special use 
permits, and (for some types of facilities such as coal preparation 
plants and ventilation housing for underground mines) building permits. 
This list is not exhaustive, nor does it imply that every surface coal 
mining operation will require each of these permits and authorizations.
    Except for 30 CFR 761.16(b)(2)(iii), the requirements in the final 
rule are substantively identical to those that we proposed as 30 CFR 
761.13(b)(2)(ix) in 1997. We have added the third item because, under 
the good faith/all permits standard, a good faith effort does not 
necessarily mean that an application has been filed for all

[[Page 70813]]

required permits, licenses, and authorizations. See Part VII.C.2. of 
the preamble to this rulemaking for a full discussion of what a good 
faith effort entails.
    The agency responsible for the VER determination needs the 
information required by this rule to determine whether you have met the 
requirements of paragraph (b)(1) of the definition of VER in 30 CFR 
761.5 and to establish a documented record of the basis for that 
determination.
Paragraph (b)(3): Submission Requirements for Needed for and Adjacent 
Standard
    Final 30 CFR 761.16(b)(3), which we proposed as 30 CFR 
761.13(b)(1)(viii), provides that, if your request relies upon the 
needed for and adjacent standard in paragraph (b)(2) of the definition 
of VER in 30 CFR 761.5, you must explain how and why the land is needed 
for and immediately adjacent to the operation upon which the request is 
based. This explanation must include a demonstration that prohibiting 
expansion of the operation onto that land would unfairly impact the 
viability of the operation as originally planned before the land came 
under the protection of 30 CFR 761.11 or section 522(e). You also must 
supply the property rights information required by 30 CFR 761.16(b)(1). 
The agency responsible for the VER determination needs the information 
required by this rule to determine whether you have met the 
requirements of paragraph (b)(2) of the definition of VER in 30 CFR 
761.5 and to establish a documented record of the basis for that 
determination.
    The final rule contains three substantive differences from the 
proposed rule. First, the final rule applies to land needed for the 
operation. The proposed rule referred to coal needed for the operation. 
The change from coal to land ensures consistency with the revised 
definition of VER, which, in both the proposed and final rules, applies 
the needed for and adjacent standard to lands, not just coal reserves, 
that are needed for any activity or facility included in the definition 
of surface coal mining operations.
    Second, the final rule requires an explanation of how and why the 
land is needed for and immediately adjacent to the operation upon which 
the request is based. The proposed rule only applied this requirement 
to the ``needed for'' component of the standard.
    However, because paragraph (b)(2) of the definition of VER requires 
a demonstration that the land is both needed for and immediately 
adjacent to the operation upon which the request is based, we believe 
that a request for a VER determination under this standard must include 
an explanation of how and why the land meets both the ``needed for'' 
and ``immediately adjacent to'' components of the standard.
    Third, the final rule adds the requirement that the explanation of 
how and why the land is needed for the operation upon which the request 
is based must include a demonstration that prohibiting expansion of the 
operation onto the land would unfairly impact the viability of the 
operation as originally planned before the land came under the 
protection of 30 CFR 761.11 or section 522(e). This addition is 
consistent with paragraph (b)(2) of the definition of VER in 30 CFR 
761.5, which establishes that requirement as part of the needed for and 
adjacent standard.
    The new language also is responsive to those commenters who urged 
us to include a requirement that the requester explain how and why the 
land is needed to ensure the economic viability of the operation. 
However, we do not fully agree with the commenters' argument that the 
land must be necessary to ensure the economic viability of the 
operation. As provided in the final rule and discussed in Part VII.D.3. 
of the preamble to this rule, we believe that the ``needed for'' 
element of the needed for and adjacent standard may be satisfied by a 
demonstration that prohibiting expansion of the operation onto the land 
would unfairly impact the viability of the operation as originally 
planned before the land came under the protection of 30 CFR 761.11 or 
section 522(e).
Paragraph (b)(4): Submission Requirements for Roads
    The VER standards for roads in paragraphs (c)(1) through (c)(3) of 
the definition of VER in 30 CFR 761.5 do not include the property 
rights demonstration required by paragraph (a) of the definition of 
VER. Therefore, there is no need for requests for VER determinations 
for roads under those standards to include all information required to 
make that demonstration. Accordingly, the final rule establishes 
separate information requirements at 30 CFR 761.16(b)(4) for requests 
for VER determinations for roads. The final rule is substantively 
identical to the one that we proposed as 30 CFR 761.13(b)(1), except 
for the revisions needed to conform with the changes to the VER 
standards for roads in paragraph (c) of the definition of VER in 30 CFR 
761.5, as discussed in Part VII.E. of this preamble.
    If your request relies upon one of the VER standards for roads in 
paragraphs (c)(1) through (c)(3) of the definition of VER, you must 
submit satisfactory documentation that at least one of the following 
statements is true:
     The road existed when the land upon which it is located 
came under the protection of 30 CFR 761.11 and section 522(e), and you 
have a legal right to use the road for surface coal mining operations. 
[30 CFR 761.16(b)(4)(i)]
     A properly recorded right of way or easement for a road in 
that location existed when the land came under the protection of 30 CFR 
761.11 and section 522(e), and, under the document creating the right 
of way or easement, and under any subsequent conveyances, you have a 
legal right to use or construct a road across the right of way or 
easement to conduct surface coal mining operations. [30 CFR 
761.16(b)(4)(ii)]
     A valid permit for use or construction of a road in that 
location for surface coal mining operations existed when the land came 
under the protection of 30 CFR 761.11 and section 522(e). [30 CFR 
761.16(b)(4)(iii)]
    Paragraph (c)(4) of the definition of VER in 30 CFR 761.5 provides 
that you may elect to demonstrate VER for roads by demonstrating VER 
under either the good faith/all permits standard or the needed for and 
adjacent standard under paragraph (b) of the definition of VER. 
Therefore, if your request relies upon the standard in paragraph (c)(4) 
of the definition, you must submit the information required by 30 CFR 
761.16(b)(1), which relates to the property rights demonstration 
required under paragraph (a) of the definition. You also must submit 
the information required by either 30 CFR 761.16(b)(2) (for the good 
faith/all permits standard) or 30 CFR 761.16(b)(3) (for the needed for 
and adjacent standard).

E. Paragraph (c): How Will the Agency Initially Review My Request?

    For the reasons discussed in Part XXI.A.4. of this preamble, the 
final rule includes a new 30 CFR 761.16(c). Under paragraph (c)(1) of 
this rule, upon receipt of your request for a VER determination, the 
agency must conduct an initial review to determine whether the request 
includes all applicable components of the submission requirements of 30 
CFR 761.16(b). This review will address only the administrative 
completeness of your request, not its legal or technical adequacy. If 
your request includes all necessary components, paragraph (c)(3) of the 
final rule requires that the agency

[[Page 70814]]

implement the notice and comment requirements of 30 CFR 761.16(d).
    Under paragraph (c)(2) of the final rule, if your request does not 
include all components required by 30 CFR 761.16(b), the agency must 
notify you of the missing components and establish a reasonable time 
within which you must submit this information. If you do not submit 
this information within the specified time or any subsequent extensions 
that the agency approves, paragraph (c)(4) of the final rule requires 
that the agency issue a determination that you have not demonstrated 
VER. The rule specifies that the agency will issue this determination 
without prejudice, meaning that you may refile the request at any time.
    Whenever an agency issues a determination that you have not 
demonstrated VER, it will retain the materials that you submitted with 
the request. These materials will become part of the administrative 
record of the decision. If you subsequently desire a new determination, 
the agency may, at its discretion, either require complete resubmission 
of the request or allow you to submit only the new materials together 
with a request for reconsideration of the previous determination.
    We believe that the addition of this step will streamline the 
decision-making process, as desired by several commenters. It also will 
promote more efficient use of resources by avoiding the expenses and 
delays associated with providing notice and comment on an incomplete 
request.

F. Paragraph (d): What Notice and Comment Requirements Apply to the VER 
Determination Process?

    Paragraph (d) of 30 CFR 761.16 establishes notice and comment 
requirements and provisions for public participation in the VER 
determination process. We proposed those requirements as 30 CFR 
761.13(c), but, because of organizational changes, they appear as 30 
CFR 761.16(d) in the final rule.
    As we noted in the preamble to the proposed rule, the notice and 
comment requirements in 30 CFR 761.16(d) generally parallel those that 
we previously used for VER determinations. We have tailored these 
requirements to minimize resource demands on affected persons while 
maintaining consistency with section 102(i) of SMCRA, which states that 
one of purposes of the Act is to assure that appropriate procedures are 
provided for public participation.
    Under paragraph (d)(1) of the final rule, when the agency 
responsible for the VER determination finds that a request meets the 
requirements of 30 CFR 761.16(c)(3), the agency must publish a notice 
in a newspaper of general circulation in the county in which the land 
is located. The notice must invite comment on the merits of the 
request. In response to a comment, we have revised the final rule to 
clarify that the agency may require that the requester publish this 
notice and provide the agency with a copy of the published notice. As 
proposed, the final rule specifies that we will also publish the notice 
in the Federal Register if the request involves Federal lands listed in 
30 CFR 761.11(a) or (b).
    The final rule requires that the notice describe the location of 
the land involved, the type of surface coal mining operations planned, 
the applicable VER standard, and the procedures that the agency will 
follow in processing the request. See 30 CFR 761.16(d)(1)(i), (ii), 
(iii), and (v). It also requires that the notice include the name and 
address of the agency office at which a copy of the request is 
available for public inspection and to which comments should be sent, 
the closing date of the comment period, and a statement that an 
additional 30 days are available upon request. See 30 CFR 
761.16(d)(1)(vi) through (viii). We added the portion of 30 CFR 
761.16(d)(1)(viii) that requires the name and address of the agency 
office at which a copy of the request is available for public 
inspection in response to a comment expressing concern about the 
proposed rule's lack of a provision for public access to requests for 
VER determinations.
    Proposed 30 CFR 761.13(c)(1)(iv) would have required that the 
comment period be of sufficient length to afford interested persons a 
reasonable opportunity to prepare and submit comments. However, for the 
reasons discussed in Part XXI.A.5. of this preamble, final 30 CFR 
761.16(d)(1)(vi) and (vii) provide that the comment period must be a 
minimum of 30 days after the publication date, with another 30 days 
automatically available upon request.
    As proposed, the final rule requires that the notice describe the 
property rights claimed and the basis for that claim. See 30 CFR 
761.16(d)(1)(iii)(A). Because the definition of VER in 30 CFR 761.5 
only requires a property rights demonstration as part of requests for 
VER determinations based upon one of the standards in paragraph (b) of 
the definition, we are restricting the scope of 30 CFR 
761.16(d)(1)(iii)(A) to requests for VER determinations based upon the 
good faith/all permits standard or the needed for and adjacent standard 
under paragraph (b) of the definition of VER.
    Certain property rights also may be a component of the VER 
determination process for requests based upon one of the standards for 
roads in paragraphs (c)(1) and (c)(2) of the definition of VER. 
Therefore, we are adding two paragraphs to the final rule to address 
these situations. Under 30 CFR 761.16(d)(iii)(B), if your request 
relies upon the standard in paragraph (c)(1) of the definition of valid 
existing rights, the notice must include a description of the basis for 
your claim that the road existed when the land came under the 
protection of 30 CFR 761.11 or section 522(e). In addition, the notice 
must include a description of the basis for your claim that you have a 
legal right to use that road for surface coal mining operations. Under 
30 CFR 761.16(d)(iii)(C), if your request relies upon the standard in 
paragraph (c)(2) of the definition of valid existing rights, the notice 
must include a description of the basis for your claim that a properly 
recorded right of way or easement for a road in that location existed 
when the land came under the protection of 30 CFR 761.11 or section 
522(e). In addition, the notice must include a description of the basis 
for your claim that, under the document creating the right of way or 
easement, and under any subsequent conveyances, you have a legal right 
to use or construct a road across the right of way or easement to 
conduct surface coal mining operations.
    In response to commenters' concerns about property rights disputes, 
we have added 30 CFR 761.16(d)(1)(iv). This new paragraph requires that 
the notice include a statement that the agency will not make a decision 
on the merits of the VER determination request if, by the close of the 
comment period under this notice or the notice required by 30 CFR 
761.16(d)(3), a person with a legal interest in the property initiates 
appropriate legal action to resolve the property rights dispute in the 
proper venue. See Part XXI.A.2. of this preamble for further discussion 
of the background of and reasons for this requirement. We are 
restricting this provision to requests for VER determinations based 
upon one or more of the standards in paragraphs (b), (c)(1), or (c)(2) 
of the definition of VER in 30 CFR 761.5 because only those standards 
have the potential for property rights disputes as part of the VER 
determination process.
    We have combined proposed 30 CFR 761.13(c)(2) and (c)(3) into 30 
CFR 761.16(d)(2) in the final rule. That paragraph requires that the 
agency promptly provide a copy of the notice required under 30 CFR 
761.16(d)(1) to (i) all reasonably locatable owners of

[[Page 70815]]

surface and mineral estates in the land included in the request, and 
(ii) the owner of the feature causing the land to come under the 
protection of 30 CFR 761.11, and, when applicable, to the agency with 
primary jurisdiction over that feature with respect to the values 
causing the land to come under the protection of 30 CFR 761.11. The 
final rule differs from the proposed rule in two respects.
    First, paragraph (d)(2)(i) requires notification of all owners of 
surface and mineral estates in the land included in the request. The 
proposed rule would have only required notification of these owners if 
the land involved severed estates or divided interests. The final rule 
does not include this limitation because, upon further evaluation, we 
find no basis or reason for restricting notification in this fashion.
    Second, paragraph (d)(2)(ii) requires notification of both the 
owner of the feature causing the land to come under the protection of 
30 CFR 761.11, and, when applicable, the agency with primary 
jurisdiction over that feature with respect to the values causing the 
land to come under the protection of 30 CFR 761.11. The proposed rule 
would have required notification of only the owner of the feature. The 
change from the proposed rule to the final rule recognizes that the 
agency with jurisdiction over the protected feature may not own the 
feature or certain lands within the feature. For example, many sites 
listed on the National Register of Historic Places are privately owned. 
Similarly, some lands within section 522(e)(1) areas, such as national 
parks and national wildlife refuges, are in non-Federal ownership. In 
situations such as these, we believe that, in the interest of fairness, 
the agency with jurisdiction over the protected feature also should 
receive notice and opportunity to comment. For lands and features owned 
by the United States or by a State, notification of the Federal or 
State agency with responsibility for managing the land or feature will 
fully satisfy the requirements of 30 CFR 761.16(d)(2)(ii).
    One commenter expressed concern that the notification requirements 
of proposed 30 CFR 761.13(c)(3) could impose a significant burden on 
the agency responsible for the VER determination unless we revised the 
submission requirements to specify that the requester must provide 
names and addresses of all owners of interest. As discussed in Part 
XXI.D. of this preamble, we agree. Final 30 CFR 761.16(b)(1)(vii) 
requires that the requester supply current names and addresses of the 
owners of all property interests in the land. In adopting 30 CFR 
761.16(b)(1)(vii) and 761.16(d)(2)(i), we do not intend to impose an 
unreasonable burden to locate owners of property interests if that 
information is not readily available from established sources. 
Therefore, the final rule provides that the notification requirements 
of 30 CFR 761.16(d)(2)(i) extend only to reasonably locatable owners. 
If comments received on the request or other available information 
indicates that the names and addresses supplied by the requester are 
either inaccurate or incomplete, the agency may either conduct its own 
title research or require the requester to correct the deficiencies in 
the original submittal.
    Under final 30 CFR 761.16(d)(3), the letter transmitting the notice 
required under 30 CFR 761.16(d)(2) must clarify that the comment period 
for persons receiving notice is 30 days from the date of service of the 
notice, with another 30 days available upon request. At its discretion, 
the agency responsible for the VER determination may grant additional 
time for good cause upon request. These times originally appeared in 
proposed 30 CFR 761.13(c)(4), which would have applied only to requests 
for VER determinations involving land within an area under the 
protection of 30 CFR 761.11(a) and section 522(e)(1) of the Act. As 
discussed in Part XXI.A.5. of this preamble, we are not adopting 
proposed 30 CFR 761.13(c)(4). That paragraph of the proposed rule would 
duplicate the requirements of final 30 CFR 761.16(d)(1)(vi) and (vii), 
(2), and (3). In addition, we find no basis in SMCRA to establish 
notice and comment provisions that differ based upon which paragraph of 
section 522(e) protects the land.

G. Paragraph (e): How Will a Decision Be Made?

    Paragraph (e), which we proposed as 30 CFR 761.13(d), contains 
procedural requirements and decision-making criteria for the evaluation 
of requests for VER determinations. Under paragraph (e)(1) of the final 
rule, the agency responsible for the VER determination must review the 
materials submitted with the request, the information received during 
the comment period, and any other relevant, reasonably available 
information to determine whether the record is sufficiently complete 
and adequate to support a decision on the merits of the request. This 
language differs slightly from that of the proposed rule, which would 
have required a determination of whether the record was adequate to 
support a decision in favor of the requester. The new language reflects 
the fact that, under the Administrative Procedure Act, any agency 
decision must be supported by an adequate administrative record.
    If the record is not sufficiently complete and adequate to support 
a decision on the merits of the request, paragraph (e)(1) of the final 
rule requires that the agency notify the requester in writing, 
explaining the inadequacy of the record and requesting submittal, 
within a specified reasonable time, of any additional information that 
the agency deems necessary to remedy the inadequacy. The proposed rule 
did not specify what action the agency responsible for the VER 
determination could or should take if the person requesting the VER 
determination does not respond to the request for additional 
information. However, under paragraph (e)(4) of the final rule, if the 
necessary information is not submitted within the time specified or as 
subsequently extended, the agency must issue a determination that the 
requester has not demonstrated VER. Under the final rule, the agency 
must issue these determinations without prejudice, meaning that the 
person could refile the request at a later time. See Part XXI.A.3. of 
this preamble for a discussion of the reasons and basis for this final 
rule.
    Like the proposed rule, paragraph (e)(2) of the final rule provides 
that, once the record is complete and adequate, the agency must 
determine whether the requester has demonstrated VER. Under the rule, 
the decision document must explain how the requester has or has not 
satisfied all applicable elements of the definition of VER. Paragraph 
(e)(2) of the final rule also incorporates proposed 30 CFR 
761.13(d)(2)(i). Like that paragraph of the proposed rule, the final 
rule requires that the decision document also set forth relevant 
findings of fact and conclusions and specify the reasons for the 
conclusions.
    Paragraph (d)(2)(ii) of the proposed rule would have required that 
the agency defer a decision until all outstanding property rights 
disputes were resolved. For the reasons discussed in Part XXI.A.2. of 
this preamble, we are not adopting that paragraph of the proposed rule. 
Instead, the final rule includes a new paragraph (e)(3), which requires 
that the agency make a determination on the merits of the record unless 
the conflicting property rights claims are the subject of pending 
litigation in a court or administrative body of competent jurisdiction. 
If the property rights are the subject of such litigation, the final 
rule requires that the agency determine

[[Page 70816]]

that the requester has not demonstrated VER. The agency must make this 
determination without prejudice, meaning that the requester may refile 
the request at any time. See Part XXI.A.2. of this preamble for a more 
extensive discussion of this paragraph of the final rule. The final 
rule also clarifies that paragraph (e)(3) applies only to requests for 
VER determinations that rely upon one or more of the standards in 
paragraphs (b), (c)(1), and (c)(2) of the definition of VER in 30 CFR 
761.5. Only requests based upon those standards have the potential for 
a property rights dispute as part of the VER determination process.
    Under paragraph (e)(5)(i) of the final rule, which we proposed as 
30 CFR 761.13(d)(3)(i), the agency must provide a copy of the 
determination to the requester, the owner or owners of the land to 
which the determination applies, to the owner of the feature causing 
the land to come under the protection of 30 CFR 761.11, and, when 
applicable, to the agency with primary jurisdiction over the feature 
with respect to the values that caused the land to come under the 
protection of 30 CFR 761.11. The final rule differs from the proposed 
rule in two ways. First, the final rule includes a requirement to 
provide a copy of the determination to the owner or owners of the land 
to which the determination applies. We believe that, in the interest of 
fairness, landowners should receive the same notification as the 
requester and the agency with primary jurisdiction over the protected 
feature. Second, the final rule replaces the disjunctive ``or'' in the 
proposed rule with ``and'' to clarify that both the owner of the 
feature causing the land to come under the protection of 30 CFR 761.11 
and any agency with primary jurisdiction over that feature must receive 
notification, not just one or the other as the proposed rule could have 
been read to mean. As with the first change, we believe that, in the 
interest of fairness, both the owner of the feature and the agency with 
primary jurisdiction over that feature should receive notification of 
the decision. In addition, the final rule adds a requirement that the 
agency provide an explanation of appeal rights and procedures along 
with a copy of the determination. We believe that this provision is 
necessary to ensure that all persons are aware of those rights and 
procedures.
    Paragraph (e)(5)(ii) of the final rule, which we proposed as 30 CFR 
761.13(d)(3)(ii), requires that the agency publish notice of the 
determination in a newspaper of general circulation in the county in 
which the land is located. At the request of a commenter, the final 
rule clarifies that the agency may require that the requester publish 
this notice and provide a copy of the published notice to the agency. 
When the request includes Federal lands within the areas listed in 30 
CFR 761.11(a) or (b), the final rule requires that we publish the 
determination in the Federal Register. The final rule adds a 
requirement that both the notice of decision published in the newspaper 
and the determination published in the Federal Register must provide an 
explanation of appeal rights and procedures. We believe that this 
provision is necessary to ensure that all persons are aware of those 
rights and procedures.

H. Paragraph (f): How May a VER Determination Be Appealed?

    Paragraph (f), which we proposed as 30 CFR 761.13(e), provides that 
VER determinations are subject to administrative and judicial review 
under 30 CFR 775.11 and 775.13, which contain administrative and 
judicial review requirements for permitting decisions. This provision 
is substantively identical to the appeal rights for VER determinations 
in both the 1979 and 1983 versions of 30 CFR 761.12(h).
    Some commenters urged that we modify this provision to eliminate 
the requirement to exhaust administrative remedies before seeking 
judicial review of VER determinations. The commenters argued that these 
decisions are final for purposes of section 10(c) of the Administrative 
Procedure Act because SMCRA does not specifically require VER 
determinations. They also cite a series of Federal court decisions 
concerning SMCRA that have held that adherence to an administrative 
review process is a prerequisite to judicial review only when the Act 
expressly requires administrative review.
    We do not agree with the commenters' arguments. VER determinations 
are a threshold requirement in the permitting process and an inherent 
component of the permit application approval finding required by 
section 510(b)(4) of SMCRA and 30 CFR 773.15(c)(3)(ii). Hence, VER 
determinations are appropriately subject to the same administrative and 
judicial review requirements as apply to any other type of permitting 
decision under the Act; in this case, the regulations at 30 CFR 775.11 
and 775.13. In addition, providing the right of administrative review 
maximizes the opportunity for public participation in the VER 
determination process. Thus, the final rule is consistent with section 
102(i) of SMCRA, which states that one of the purposes of the Act is to 
assure that appropriate procedures are provided for public 
participation.

II. Paragraph (g): To What Extent and in What Manner Must Records 
Related to the VER Determination Process Be Made Available to the 
Public?

    Final 30 CFR 761.16(g) provides that, if a request for a VER 
determination is subject to the notice and comment requirements of 30 
CFR 761.16(d), the agency responsible for processing the request must 
make a copy of that request available to the public in the same manner 
as the agency, when acting as the regulatory authority, must make 
permit applications available to the public under 30 CFR 773.13(d). The 
final rule also specifies that the agency must make records associated 
with that request and any subsequent determination under 30 CFR 
761.16(e) available to the public in accordance with the requirements 
and procedures of either 30 CFR 840.14 or 30 CFR 842.16.
    We added this paragraph to the final rule in response to a 
commenter who argued that requests for VER determinations should be 
placed on file in the local courthouse or other accessible office for 
public inspection and copying, just as 30 CFR 773.13(a)(2) and section 
507(e) of the Act require for permit applications. We did not adopt the 
specific requirement sought by the commenter. Because requests for VER 
determinations are not complete permit applications, they are not 
necessarily subject to all statutory and regulatory provisions 
concerning permit applications.
    However, requests for VER determinations are subject to section 
517(f) of the Act, which requires that copies of any information that 
the regulatory authority obtains under Title V of SMCRA ``be made 
immediately available to the public at central and sufficient locations 
in the county, multicounty, and State area of mining so that they are 
conveniently available to residents in the areas of mining.'' 
Therefore, to address the commenter's concern, the final rule expressly 
requires that records associated with requests for VER determinations 
be made available for public review in accordance with the regulations 
that implement this statutory requirement: 30 CFR 773.13(d) and either 
30 CFR 840.14 (when a State regulatory authority is responsible for the 
VER determination) or 842.16 (when we are responsible for the VER 
determination). Under those rules, the agency has the option of making 
copies of records available to the public by mail upon

[[Page 70817]]

request instead of placing them on file in a government or other public 
office in the county to which the records pertain.
    We do not intend to require disclosure of proprietary information 
that is not otherwise available for public review as a matter of law. 
Requests for VER determinations may include information concerning 
property interests and the chemical and physical properties of coal. 
Under paragraphs (a)(12) and (b) of section 508 of SMCRA, with certain 
exceptions, the regulatory authority must hold that information in 
confidence unless it is on public file pursuant to State law. We see no 
reason why information should be treated differently when it is 
submitted as part of a request for a VER determination, especially 
since 30 CFR 761.16(b) allows a request for a VER determination to be 
submitted either as part of or in advance of a permit application. 
Therefore, under the final rule, the confidentiality provisions of 30 
CFR 773.13(d)(3) also apply to requests for VER determinations under 30 
CFR 761.16.

J. May the Regulatory Authority Reconsider VER Determinations During 
Review of a Subsequent Permit Application?

    Commenters divided on the question of whether VER determinations 
made in advance of submission of a permit application would or should 
be subject to comment and reevaluation at the time of permit 
application review. As discussed in Part XXI.C. of this preamble and in 
the preamble to the proposed rule, the intent of the provision in the 
final rule authorizing advance VER determinations is to allow VER 
questions to be fully settled in advance of permit application 
preparation and review. We anticipate that advance VER determinations 
would be subject to reconsideration during a subsequent permit 
application review process only under exceptional circumstances, as 
discussed below and in the preamble to the proposed rule. The final 
rule establishes notice, comment, and public participation requirements 
for the submission and processing of requests for VER determinations. 
Therefore, the lack of opportunity for reconsideration of advance VER 
determinations during a subsequent permit application review process 
would not improperly abridge or violate the rights of citizens to 
participate in the permitting process, as some commenters alleged.
    Circumstances that might justify reconsideration of an advance VER 
determination include, but are not limited to, a material 
misrepresentation of fact, discovery of new information that 
significantly alters the basis of the VER determination, or a 
substantial change in the nature of the intended operation (e.g., a 
switch from underground mining methods to surface mining techniques).
    Under 30 CFR 773.15(c)(3)(ii), the regulatory authority may not 
approve a permit application unless the agency first finds that the 
proposed permit area is not within an area subject to the prohibitions 
or limitations of 30 CFR 761.11. Therefore, when the permit application 
review process documents or provides reason to believe that the basis 
for a prior VER determination is false or inaccurate, the regulatory 
authority has an obligation to withhold approval of the application 
pending reevaluation of the VER determination by the agency responsible 
for that determination. Without VER, the application would not meet the 
criteria for permit approval in section 510(b)(4) of the Act 
(documentation that ``the area proposed to be mined is not included 
within an area designated unsuitable for surface coal mining pursuant 
to section 522'') or 30 CFR 773.15(c)(3)(ii) (a demonstration that the 
permit area is not subject to the prohibitions and limitations of 30 
CFR 761.11).
    We recognize that the regulatory authority or the agency 
responsible for the VER determination may not become aware of a 
defective VER determination until after permit issuance. In these 
circumstances, the regulatory authority should refer the information to 
us, if we are responsible for the determination, or reconsider the 
determination, if the regulatory authority is responsible for the 
determination. Then, using any reconsidered VER determination, the 
regulatory authority should, based upon written findings and subject to 
administrative and judicial review, order that the permit be revised to 
correct any deficiencies. See 30 CFR 774.11(b) and (c).
    A State regulatory authority may not reconsider or overturn a VER 
determination that we make for lands for which we have exclusive 
responsibility for VER determinations. However, the State may and 
should notify us of any concerns, changes in fact, or apparent errors 
in the determination. We will then reconsider the determination.
    In the preamble to the proposed rule, we referred to 
reconsideration as de novo review. One commenter opposed allowing de 
novo review of advance VER determinations under any circumstances, 
arguing that to do so would violate the principles of res judicata. We 
do not agree. In Belville Mining Co. v. U.S., 999 F.2d 989 (6th Cir. 
1993), the court held that we have the authority to reconsider VER 
determinations:

    Even where there is no express reconsideration authority for an 
agency, however, the general rule is that an agency has inherent 
authority to reconsider its decision, provided that reconsideration 
occurs within a reasonable time after the first decision.

Id. at 997 (citations omitted).

    The court also found that section 201(c)(1) of SMCRA, which 
provides that the Secretary, acting through OSM, shall ``review and 
vacate or modify or approve orders and decisions * * *,'' expressly 
authorizes us to review and vacate erroneous VER determinations. Id.
    Reconsideration may take one of several pathways. If the reason for 
reconsideration is an alleged misrepresentation of material facts, 
reconsideration might involve reopening the record to enter new 
information, investigating to determine whether misrepresentation of a 
material fact occurred, and issuing a reconsidered VER determination 
based on the record as supplemented by the new information. If the 
reason for reconsideration is discovery of new information that 
significantly alters the basis of the determination, reconsideration 
might involve reopening the record and issuing a reconsidered VER 
determination based on the record as supplemented by the new 
information. If the reason for reconsideration is a substantial change 
in the operation, such as a change from underground to surface mining, 
reconsideration might involve seeking comment on whether the person has 
demonstrated the property rights for that type of mining, reopening the 
record to enter new information, and issuing a reconsidered VER 
determination based on the revised record.
    One commenter argued that a change in the type of mining would 
necessitate a completely new VER determination since each determination 
is specific to a particular type of mining. We agree that a change of 
this magnitude should involve a new notice and comment period. However, 
we do not agree that a person must submit a completely new request for 
a VER determination if there is a change in the type of surface coal 
mining operations planned for the site. There is no need to resubmit 
those parts of the original request and determination that are 
unaffected by the

[[Page 70818]]

change. Completely discarding the original record and determination 
could result in an unnecessary duplication of effort and waste of 
resources on the part of both the requester and the reviewing agency. 
We believe that the agency should determine the scope of the 
reconsideration on a case-by-case basis. This approach also is 
consistent with the goals established by the Paperwork Reduction Act, 
44 U.S.C. 3501 et seq.
    The commenter also stated that misrepresentation of a material fact 
does not justify de novo review, or, as we refer to it in this 
preamble, reconsideration, of a VER determination. Instead, in his 
view, the agency should seek judicial review, issuance of an 
injunction, and possibly prosecution for fraud. For the reasons 
discussed above, we do not agree that the agency is limited to these 
alternatives or that reconsideration of the VER determination is 
inappropriate. However, the alternatives listed by the commenter may be 
useful measures to prevent the harm that may otherwise result from an 
inaccurate or defective VER determination.

XXII. How Does New 30 CFR 761.17, Which Concerns Regulatory 
Authority Obligations at the Time of Permit Application Review, 
Differ From Its Predecessor Provisions in Former 30 CFR 761.12?

    As discussed in Part XVIII of this preamble, we have revised and 
redesignated paragraphs (a), (b)(1), (b)(2), and (f) of former 30 CFR 
761.12 as paragraphs (a) through (d), respectively, of new 30 CFR 
761.17. This section identifies actions that the regulatory authority 
must take upon receipt of an application for a permit for surface coal 
mining operations.
    Apart from minor organizational and editorial changes, paragraphs 
(a) through (c) of 30 CFR 761.17 are substantively identical to the 
rules that we proposed as 30 CFR 761.12(a) and (b) on January 31, 1997. 
Most of our revisions reflect plain language principles. In addition, 
we have corrected obsolete cross-references, added new cross-references 
for clarity, more accurately characterized the exception provided in 30 
CFR 761.11(c), and modified these paragraphs to maintain consistency 
with the changes to the definition of VER in 30 CFR 761.5 and the 
exception for existing operations in 30 CFR 761.12.
    To be consistent with changes in terminology adopted as part of the 
permitting rules published on September 28, 1983 (48 FR 44349), we have 
replaced the obsolete term ``complete application'' in paragraph (a) 
with its current equivalent, ``administratively complete application.'' 
We also are revising paragraph (a) to clarify that its requirements 
apply to both applications for new permits and all applications for 
permit revisions (including incidental boundary revisions) that involve 
the addition of acreage not previously included within the permit 
boundaries. Although we always have interpreted the somewhat ambiguous 
term ``application for a surface coal mining operation permit'' in 30 
CFR 761.12 as including applications for all types of permit boundary 
revisions, this change will remove any question as to its meaning.
    We did not propose to revise former 30 CFR 761.12(f), which we have 
now redesignated as 30 CFR 761.17(d). This paragraph of the rules 
establishes procedures that the regulatory authority must follow when 
it determines that a proposed surface coal mining operation will 
adversely affect a publicly owned park or a place listed on the 
National Register of Historic Places. However, one commenter expressed 
the general concern that the proposed rule and its preamble did not 
clearly specify that the VER exception, the exception for existing 
operations, and the waivers and exceptions authorized by 30 CFR 
761.11(c) through (e) operate independently of each other; i.e., that a 
person who qualifies for one type of exception or waiver does not need 
to comply with the requirements for other types of exceptions or 
waivers. To address this concern, we have added paragraph (d)(3) to 30 
CFR 761.17 to clarify that the joint approval requirements of 30 CFR 
761.11(c) and the related procedural requirements of 30 CFR 761.17(d) 
do not apply to lands to which the VER exception or exception for 
existing operations applies.
    Section 761.17(d) contains no other substantive changes from former 
Sec. 761.12(f). We have made some editorial and organizational changes 
to more closely adhere to plain language principles.

XXIII. How and Why Are We Revising Part 762, Which Contains 
Criteria for the Designation of Lands as Unsuitable for Surface 
Coal Mining Operations?

    Former 30 CFR 761.12(g) provided that, pursuant to petition, the 
regulatory authority could consider lands listed in section 522(e) of 
the Act for designation as unsuitable for surface coal mining 
operations under 30 CFR Parts 762, 764, and 769. As discussed in Part 
XVIII of this preamble, we determined that this paragraph would be more 
appropriately placed in 30 CFR Part 762, which contains criteria and 
other requirements for designation pursuant to the petition process. 
Therefore, we are redesignating former 30 CFR 761.12(g) as 30 CFR 
762.14. To accommodate this addition to Part 762, we are redesignating 
former 30 CFR 762.14 as 30 CFR 762.15.
    We have revised the language of new 30 CFR 762.14 for clarity and 
conformity with Part 762 and plain language principles. We intend no 
substantive changes from former 30 CFR 761.12(g).

XXIV. Section 772.12: What Are the Requirements for Coal 
Exploration on Lands Designated Unsuitable for Surface Coal Mining 
Operations?

    Under 30 CFR 772.11(a) and 772.12(a), a person who intends to 
conduct any type of coal exploration on lands designated as unsuitable 
for surface coal mining operations under subchapter F of 30 CFR Chapter 
VII, which includes 30 CFR 761.11, must first obtain a permit in 
accordance with 30 CFR 772.12. These regulations do not require 
compliance with the prohibitions, restrictions, and procedural 
requirements of 30 CFR Part 761. On June 22, 1988 (53 FR 23532), we 
proposed a rule that would have required a VER demonstration as a 
prerequisite for approval or issuance of an exploration permit on the 
lands listed in 30 CFR 761.11 and section 522(e). However, we did not 
adopt that provision as part of the final rule published on December 
29, 1988 (53 FR 52942). At 53 FR 52945, the preamble to that rule 
stated that we would reconsider the issue of VER demonstration 
requirements for coal exploration after we adopted a new definition of 
VER.
    The National Wildlife Federation and other groups challenged our 
failure to adopt this provision of the proposed rule. Upon judicial 
review, the U.S. District Court for the District of Columbia held that 
we had failed to articulate a proper rationale for not adopting the 
proposed rule. National Wildlife Fed'n v. Lujan, Nos. 89-0504, 89-1221 
and 89-1614, slip op. at 25-33 (D.D.C. September 5, 1990). In response, 
on July 18, 1991 (56 FR 33152), we proposed to add paragraph (b)(5) to 
30 CFR 772.14 to require a VER demonstration as a prerequisite for 
approval of coal exploration activities on the lands listed in 30 CFR 
761.11 and section 522(e) if coal is to be removed for sale or 
commercial use.
    On January 31, 1997 (62 FR 4836), we withdrew the 1991 proposal. In 
its place, we proposed to add a new paragraph (b)(14) to 30 CFR 772.12, 
the

[[Page 70819]]

section that contains permitting requirements for exploration that will 
remove more than 250 tons of coal or that will occur on lands 
designated as unsuitable for surface coal mining operations. Under the 
proposed rule, a person planning to conduct exploration on lands listed 
in section 522(e) or 30 CFR 761.11 would have had to submit an 
application that includes a demonstration that (1) the exploration 
activities will not substantially disturb the protected lands, (2) the 
owner of the coal has demonstrated VER, (3) the exploration is needed 
for mineral valuation purposes or is authorized by judicial order, or 
(4) the applicant has obtained a waiver or exception authorized under 
proposed 30 CFR 761.11(a)(2) through (5) [now 30 CFR 761.11(a) through 
(e)].
    Similarly, the proposed rule would have added a new paragraph 
(d)(2)(iv) to 30 CFR 772.12 to provide that the regulatory authority 
may not approve an application for exploration unless it first finds 
that the exploration activities described in the application will not 
substantially disturb any lands listed in 30 CFR 761.11. If exploration 
would substantially disturb those lands, the proposed rule would have 
authorized approval of the application only when the regulatory 
authority finds that the applicant has (1) demonstrated VER, (2) 
obtained one of the waivers or exceptions authorized under proposed 30 
CFR 761.11(a)(2) through (5) [now 30 CFR 761.11(a) through (e)], or (3) 
demonstrated that the exploration is needed for mineral valuation 
purposes or authorized by judicial order.
    Commenters were sharply divided on the merits and legality of the 
proposed rules. After careful consideration, we have decided not to 
proceed with the rules as proposed. Section 512 of SMCRA governs coal 
exploration, and that section does not mention section 522(e) as one of 
the provisions of the Act with which exploration must comply. Section 
522(e) specifically limits the scope of its prohibitions and 
restrictions to surface coal mining operations. And the definition of 
surface coal mining operations in section 701(28) of the Act expressly 
excludes ``coal explorations subject to section 512 of this Act.'' 
Therefore, we believe that the Act provides insufficient basis for 
rules that would impose a requirement for a VER demonstration as a 
prerequisite for coal exploration on the lands listed in 30 CFR 761.11 
and section 522(e).
    The preamble to the proposed rule also sought comment on whether we 
should revise 30 CFR Part 772 and/or Part 761 to include a provision 
similar to 30 CFR 762.14, which we are redesignating as 30 CFR 762.15, 
either in addition to or in place of the proposed revisions to 30 CFR 
772.12. Redesignated 30 CFR 762.15 provides that the regulatory 
authority has an obligation to use the exploration permit application 
review and approval process to ensure that exploration activities will 
not interfere with any of the values for which the area has been 
designated unsuitable for surface coal mining operations. However, this 
section applies only to lands designated as unsuitable for surface coal 
mining operations under the petition process in 30 CFR Part 762 and 
section 522(a) of the Act.
    We have decided to adopt a modified version of this option rather 
than the rule language that we proposed. Under the final rule, coal 
exploration on lands listed in 30 CFR 761.11 and section 522(e) must be 
designed to minimize, but not necessarily prevent, interference with 
the values for which those lands were designated as unsuitable for 
surface coal mining operations. In other words, to gain the approval of 
the regulatory authority, an application for coal exploration on 
protected lands must demonstrate that, to the extent technologically 
and economically feasible, the operation has been designed to minimize 
interference with the values for which the land was designated as 
unsuitable for surface coal mining operations. However, the application 
need not demonstrate that the operation will prevent all interference 
with those values. Unlike the proposed rule language and, to some 
extent, the alternative discussed in the preamble to that rule, the 
provisions that we are adopting as part of the final rule do not 
include any conditions that would prohibit coal exploration. Therefore, 
we believe that the new provisions are consistent with the overall 
regulatory scheme for coal exploration under section 512 of SMCRA 
because they govern how coal exploration may be conducted, not whether 
it may be conducted.
    The final rule modifies 30 CFR 772.12(b)(14) to require that each 
application for coal exploration include, for any lands listed in 30 
CFR 761.11, a demonstration that, to the extent technologically and 
economically feasible, the proposed exploration activities have been 
designed to minimize interference with the values for which those lands 
were designated as unsuitable for surface coal mining operations. In 
addition, the final rule requires that the application include 
documentation of consultation with the owner of the feature causing the 
land to come under the protection of 30 CFR 761.11, and, when 
applicable, with the agency with primary jurisdiction over the feature 
with respect to the values that caused the land to come under the 
protection of 30 CFR 761.11. We added this provision in response to 
comments that expressed concern about the potential impacts of coal 
exploration on the lands listed in 30 CFR 761.11 and that urged the 
inclusion of the agency with jurisdiction over the protected feature in 
the decision-making process.
    The final rule also modifies 30 CFR 772.12(d)(2) by adding a new 
paragraph (iv). That paragraph requires that, as a prerequisite for 
issuance of a coal exploration permit for any lands listed in 30 CFR 
761.11, the regulatory authority must find that the applicant has 
demonstrated that, to the extent technologically and economically 
feasible, the exploration and reclamation described in the application 
will minimize interference with the values for which those lands were 
designated as unsuitable for surface coal mining operations. Before 
making this finding, the regulatory authority must provide reasonable 
opportunity to the owner of the feature causing the land to come under 
the protection of 30 CFR 761.11, and, when applicable, to the agency 
with primary jurisdiction over the feature with respect to the values 
that caused the land to come under the protection of 30 CFR 761.11, to 
comment on whether the finding is appropriate.
    We added the latter provision in response to comments that 
expressed concern about the potential impacts of coal exploration on 
the lands listed in 30 CFR 761.11. The new provision also responds to 
those commenters who urged us to revise the decision-making process to 
include the agency with jurisdiction over the protected feature. 
However, the final rule does not afford veto authority to the agency 
with jurisdiction over the protected feature. To do so would be 
inconsistent with the principles of State primacy under section 503 of 
SMCRA. Instead, the new provision requires that the regulatory 
authority consult with the agency with jurisdiction over the protected 
feature in determining which values are important and how exploration 
activities may be planned and conducted to minimize interference with 
those values. The administrative record of the decision on the 
exploration applications should indicate the disposition of all 
relevant comments received from the agency with jurisdiction over the 
protected feature.
    These rules do not ban exploration on any lands. Instead, they 
require that the

[[Page 70820]]

adverse impacts of exploration activities on lands protected under 
section 522(e) of the Act be minimized to the extent technologically 
and economically feasible. In this respect, they are more protective of 
the environment than the rule language that we proposed, which would 
not have placed any unique restrictions on exploration if the 
regulatory authority determined that a person had VER or qualified for 
one of the other exceptions proposed in 30 CFR 772.12(b)(14).
    Finally, as a housekeeping measure, the final rule revises 30 CFR 
772.12(d)(2)(ii) and (iii) to correct the manner in which they cite the 
Endangered Species Act and the National Historic Preservation Act.

XXV. Technical Amendments to Parts 773, 778, 780, and 784

    As shown in the following table, the organizational changes to Part 
761 require revision of cross-references to Part 761 in other portions 
of our regulations:

----------------------------------------------------------------------------------------------------------------
                Regulation                      Old cross-reference                New cross-reference
----------------------------------------------------------------------------------------------------------------
Sec.  773.13(a)(1)(v)....................  Sec.  761.12(d).............  Sec.  761.14
Sec.  773.15(c)(3)(ii)...................  Secs.  761.11 and 761.12....  Sec.  761.11
Sec.  778.16(c)..........................  Sec.  761.12................  Sec.  761.14 or 761.15
Sec.  780.31(a)(2).......................  Sec.  761.12(f).............  Sec.  761.17(d)
Sec.  780.33.............................  30 CFR 761.12(d)............  Sec.  761.14
Sec.  784.17(a)(2).......................  Sec.  761.12(f).............  Sec.  761.17(d)
Sec.  784.18.............................  30 CFR 761.12(d)............  Sec.  761.14
----------------------------------------------------------------------------------------------------------------

    To achieve consistency with the language of section 522(e) of the 
Act, we also made the following technical corrections to the language 
of those regulations:
     We replaced the term ``surface coal mining activities'' in 
30 CFR 778.16(c) with ``surface coal mining operations.'' Part 778 
applies to both surface and underground mines. Therefore, since section 
522(e) applies to surface coal mining operations in general, the 
information requirements of 30 CFR 778.16(c) for permit applications 
that propose to disturb lands within the buffer zones for occupied 
dwellings and public roads must apply to all proposed surface coal 
mining operations within those buffer zones, not just to surface coal 
mining activities.
     We revised the titles of 30 CFR 780.31 and 784.17 by 
replacing the term ``public parks'' with ``publicly owned parks.'' We 
separately define these terms in 30 CFR 761.5, and ``publicly owned 
parks'' is the term that appears in section 522(e)(3) of the Act, 
which, in relevant part, provides the basis for these regulations.
     We replaced the term ``underground mining activities'' in 
30 CFR 784.18(a) with ``surface coal mining operations.'' Paragraph (b) 
of the definition of ``underground mining activities'' in 30 CFR 701.5 
includes underground operations that are not included in the definition 
of surface coal mining operations in 30 CFR 700.5 and section 701(28) 
of the Act. Since section 522(e) applies only to surface coal mining 
operations, the underground operations described in paragraph (b) of 
the definition of underground mining activities are not subject to the 
provisions of 30 CFR Part 761 and section 522(e).
    In addition, since both 30 CFR 780.31(a)(2) and 784.17(a)(2) use 
the term ``valid existing rights,'' we revised those rules to include a 
cross-reference to the new VER determination rules at 30 CFR 761.16.
    Finally, we made minor editorial revisions to 30 CFR 
773.15(c)(3)(ii), 778.16(c), 780.31(a)(2), and 784.17(a)(2) to improve 
their accuracy, clarity, and consistency with plain language principles 
and to better accommodate the new or revised cross-references.

XXVI. What Effect Will This Rule Have in Federal Program States and 
on Indian Lands?

    Through cross-referencing in the respective regulatory programs, 
this final rule applies to all lands in States with Federal regulatory 
programs. States with Federal regulatory programs include Arizona, 
California, Georgia, Idaho, Massachusetts, Michigan, North Carolina, 
Oregon, Rhode Island, South Dakota, Tennessee and Washington. These 
programs are codified at 30 CFR Parts 903, 905, 910, 912, 921, 922, 
933, 937, 939, 941, 942, and 947, respectively.
    The revisions to 30 CFR Part 761 apply to Indian lands by virtue of 
the incorporation of this part by reference in 30 CFR 750.14. Revised 
30 CFR Part 772 applies to coal exploration on Indian lands to the 
extent provided in 30 CFR 750.15.
    In the preamble to the proposed rule, we invited the public to 
comment on whether there are unique conditions in any Federal program 
States or on Indian lands that should be reflected in the national 
rules or as specific amendments to the Federal programs or Indian lands 
rules. Since no commenters identified any unique conditions or 
amendment needs, the final rules do not include any changes to the 
Indian lands rules or individual Federal programs.
    One commenter stated that we should not adopt a final rule without 
seeking input from affected Indian nations and obtaining approval from 
both recognized Indian governmental entities and traditional elders who 
hold to native religions and traditions. As described in Part I of this 
preamble, we provided the public and all other interested parties ample 
notice and opportunity to comment on the proposed rule, as required by 
the Administrative Procedure Act, 5 U.S.C. 553. In developing the final 
rule, we gave serious consideration to all substantive comments 
received. Neither SMCRA nor any other Federal law or regulation 
requires that we obtain the approval of Indian governmental entities 
and traditional elders (or any other potentially affected parties) 
before adopting a final rule.

XXVII. How Will This Rule Affect State Programs?

    We will evaluate State regulatory programs approved under 30 CFR 
Part 732 and section 503 of the Act to determine whether any changes in 
these programs are necessary to maintain consistency with Federal 
requirements. If we determine that a State program provision needs to 
be amended as a result of these revisions to the Federal rules, we will 
notify the State in accordance with 30 CFR 732.17(d).
    Section 505(a) of the Act and 30 CFR 730.11(a) provide that SMCRA 
and Federal regulations adopted under SMCRA do not supersede any State 
law or regulation unless that law or regulation is inconsistent with 
the Act or the Federal regulations adopted under the Act. Section 
505(b) of the Act

[[Page 70821]]

and 30 CFR 730.11(b) provide that we may not construe existing State 
laws and regulations, or State laws and regulations adopted in the 
future, as inconsistent with SMCRA or the Federal regulations if these 
State laws and regulations either provide for more stringent land use 
and environmental controls and regulations or have no counterpart in 
the Act or the Federal regulations.
    Under 30 CFR 732.15(a), State programs must provide for the State 
to carry out the provisions of, and meet the purposes of, the Act and 
its implementing regulations. In addition, that rule requires that 
State laws and regulations be in accordance with the provisions of the 
Act and consistent with the Federal regulations. As defined in 30 CFR 
730.5, ``consistent with'' and ``in accordance with'' mean that the 
State laws and regulations are no less stringent than, meet the minimum 
requirements of, and include all applicable provisions of the Act. The 
definition also provides that these terms mean that the State laws and 
regulations are no less effective than the Federal regulations in 
meeting the requirements of the Act. Under 30 CFR 732.17(e)(1), we may 
require a State program amendment if, as a result of changes in SMCRA 
or the Federal regulations, the approved State program no longer meets 
the requirements of SMCRA or the Federal regulations.
    In the preamble to the proposed rule, we solicited comments on 
whether State program VER definitions must be amended to include 
standards identical to those of the revised Federal definition to be no 
less effective than the revised Federal definition. We received few 
comments on this point, and those that we did receive took opposing 
positions. In general, commenters from both industry and the 
environmental community argued that we should require that States adopt 
definitions identical to ours if we adopted the particular VER 
definition that the commenter advocated. Otherwise, they favored 
allowing States to retain their existing definitions. We did not find 
these comments logical or persuasive.
    One commenter argued that States should not have to change their 
VER definitions and procedures merely because we adopt a new definition 
and procedures, especially since States have not experienced problems 
using their current definitions and procedures. We do not agree. Under 
30 CFR 730.5 and 732.17(e)(1), the standard for determining whether a 
program change is necessary in response to a new or revised Federal 
rule is whether the State program provisions are no less effective than 
our regulations in meeting the requirements of the Act. Our adoption of 
a new definition of VER and related procedural rules determines the 
extent to which persons are eligible to receive permits for surface 
coal mining operations on lands protected under section 522(e) of the 
Act. Therefore, we will evaluate State programs to determine whether 
existing State program provisions would protect the lands listed in 
section 522(e) to the same extent as our rules and whether they would 
provide similar opportunity for public participation in the decision-
making process. Contrary to the commenter's arguments, past performance 
and the question of whether the public has identified problems with 
existing State program provisions are not relevant to this 
determination since this final rule alters the standards for VER (and 
hence the degree of protection for section 522(e) lands), as well as 
the opportunity for public participation.
    We specifically sought comment on whether we should require those 
States with an approved takings standard for VER to remove this 
standard or whether the rationale that we relied upon to approve the 
takings standard in the Illinois definition of VER remains valid. See 
30 CFR 917.15(j) and 54 FR 123, January 4, 1989. In other words, could 
the takings standard be considered no less effective than the good 
faith/all permits standard in achieving the purposes and requirements 
of the Act even though it purportedly balances the purposes of the Act 
and section 522(e) in a different manner with potentially different 
results in terms of the level of protection afforded to the areas 
listed in section 522(e) of the Act? Commenters were divided on this 
issue as well, depending upon which VER definition they favored.
    As previously noted, under 30 CFR 730.5 and 732.17(e)(1), the 
standard for determining whether a State program amendment is necessary 
in response to new or revised Federal regulations is whether the State 
program provisions are no less effective than our regulations in 
meeting the requirements of the Act. The final environmental impact 
statement (EIS) for this rulemaking describes the takings standard as 
likely to be somewhat less protective of the lands listed in section 
522(e) than the good faith/all permits standard. Specifically, the 
model used in the EIS analysis predicts that application of a takings 
standard nationwide would result in the mining of an additional 185 
acres of section 522(e)(1) lands, 1,686 acres of Federal lands in 
eastern national forests, and 984 acres in State parks between 1995 and 
2015. See Table V-1 of the EIS. Therefore, we anticipate that States 
would have difficulty justifying retention of a takings standard for 
VER unless they can convincingly demonstrate that the State program 
would ensure that application of the takings standard would be no less 
protective of section 522(e) lands than the good faith/all permits 
standard in the rule that we are adopting today.
    One commenter noted that we previously approved the takings 
standard in the Illinois program partly on the basis of the argument 
that section 522(e) has multiple purposes of equal importance. In the 
preamble to that decision, we stated that the purposes of section 
522(e) include protection of the lands listed therein, preservation of 
valid property rights, and avoidance of compensable takings. According 
to the preamble, the takings standard is consistent with the Act and no 
less effective than the good faith/all permits standard even though the 
takings standard accords greater weight to protection of the rights of 
mineral owners and avoidance of compensable takings than it does to 
protection of the lands listed in section 522(e). See 54 FR 120, 
January 4, 1989. The commenter argued that we should apply the same 
principle in evaluating State VER definitions today. We disagree.
    We no longer adhere to the position stated in the 1989 preamble. As 
discussed in Part VII.C. of this preamble, we believe that the purpose 
of section 522(e) is to prohibit new surface coal mining operations on 
the lands listed in that section, with certain exceptions. And, as we 
state in that discussion, in view of the purpose of section 522(e), we 
do not agree that VER must or should be defined in a way that would 
avoid all compensable takings. Therefore, we do not expect that an 
argument that the takings standard is more protective of the rights of 
the mineral owners and is more likely to avoid compensable takings than 
the good faith/all permits standard will provide sufficient 
justification for retention of the takings standard as no less 
effective than the good faith/all permits standard in protecting the 
lands listed in section 522(e).
    One commenter argued that since we had previously approved the 
Illinois takings standard as no less effective than the good faith/all 
permits standard, we could not now find Illinois' use of the takings 
standard to be less effective than the good faith/all permits standard 
in our proposed rule. We disagree. We based our prior approval of the 
Illinois standard on, among other things, an interpretation of the 
legislative history

[[Page 70822]]

of SMCRA and pertinent court decisions that we no longer believe to be 
appropriate. As discussed in Part VII.C. of this preamble, we no longer 
believe that the legislative history of SMCRA requires that we define 
VER in a way that completely avoids compensable takings. Therefore, the 
fact that we also based our prior approval of the Illinois definition 
on the argument that a takings standard is appropriate and necessary to 
avoid compensable takings under the Illinois Constitution is not 
relevant to an evaluation of whether the Illinois takings standard is 
no less effective than the good faith/all permits standard.

XXVIII. How Does This Rule Impact Information Collection 
Requirements?

    The final rule does not alter the information collection burden 
associated with Parts 740, 745, 772, 773, 778, 780, and 784. However, 
the final rule includes editorial revisions to Secs. 740.10, 745.10, 
and 772.10 to maintain consistency with Departmental guidance 
concerning the format and content of these sections.
    In addition, we have revised section 761.10 to reflect the 
information collection burden changes resulting from the rule changes 
that we are adopting today.

XXIX. Procedural Matters

A. 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.
    (1) This rule will not have an effect of $100 million or more on 
the economy. It will not adversely affect in a material way the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities. This determination is based on a cost-benefit analysis 
prepared for the final rule. The cost-benefit analysis indicated that 
the cost increase resulting from the rule will be negligible. A copy of 
the analysis is available for inspection at the Office of Surface 
Mining, Administrative Record--Room 101, 1951 Constitution Avenue, 
N.W., Washington, DC 20240. You may obtain a single copy by writing us 
or calling 202-208-2847. You may also request a copy via the Internet 
at [email protected].
    (2) This rule will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency. The rule 
will not significantly change costs to industry or to the Federal, 
State, or local governments. Furthermore, the rule will have no adverse 
effects on competition, employment, investment, productivity, 
innovation, or the ability of United States enterprises to compete with 
foreign-based enterprises in domestic or export markets.
    (3) This rule does not alter the budgetary effects of entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients because the rule does not affect such items.
    (4) This rule raises novel legal and policy issues as discussed in 
the preamble.

B. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., 
the Department of the Interior certifies that this rule will not have a 
significant economic impact on a substantial number of small entities. 
This certification is based on the findings that the rule will not 
significantly change costs to industry or to Federal, State, or local 
governments. Furthermore, the rule will have no adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of United States enterprises to compete with foreign-based 
enterprises in domestic or export markets.

C. 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, because it will not:
     Have an annual effect on the economy of $100 million or 
more.
     Cause a major increase in costs or prices for consumers; 
individual industries; Federal, State, or local government agencies; or 
geographic regions because the rule does not impose any substantial new 
requirements on the coal mining industry, consumers, or State and local 
governments. It essentially codifies current policy.
     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.

D. Unfunded Mandates Reform Act of 1995

    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. Therefore, a 
statement containing the information required by the Unfunded Mandates 
Reform Act, 1 U.S.C. 1531, et seq., is not required.

E. Executive Order 12630: Takings

    In accordance with Executive Order 12630 (March 18, 1988) and the 
``Attorney General's Guidelines for the Evaluation of Risk and 
Avoidance of Unanticipated Takings,'' dated June 30, 1988, the 
Department has prepared a takings implication assessment, which has 
been made a part of the administrative record for this rulemaking and 
is set forth below:
    Section 522(e) of SMCRA provides that, subject to VER (and with 
certain other specified exceptions), no surface coal mining operations 
shall be permitted on certain lands designated by Congress. As stated 
in the preceding parts of this preamble, the final rule defining VER 
establishes a good faith/all permits standard for VER under section 
522(e).
    Under the good faith/all permits standard, a person would have VER 
if, prior to the date the land came under the protection of section 
522(e), the person or a predecessor in interest had all necessary 
property rights and had obtained, or made a good faith effort to 
obtain, all State and Federal permits and other authorizations required 
to conduct surface coal mining operations.
    The final rule may have some significant, but unquantifiable, 
takings implications. We do not expect that a court would find that 
this final rule constitutes a facial taking, because, as discussed in 
Part VI of this preamble, that issue was litigated in 1979-80, in PSMRL 
I, Round I, 14 Env't Rep. Cas. (BNA) 1083 (1980).
1. No Facial Takings
    It is unlikely that the good faith/all permits standard would be 
determined to constitute a facial taking. This standard is a 
modification of the ``all permits'' standard adopted on March 13, 1979, 
which required that a person demonstrate valid issuance by August 3, 
1977 of all necessary State and Federal permits.
    The rule was challenged in PSMRL I, Round I, 14 Env't Rep. Cas. 
(BNA) at 1090-92 (1980), as effecting a compensable taking of property. 
While the court declined to address the constitutionality of the VER 
definition, it found that a person who applies for all permits, but 
fails to receive one or more through government delay, engenders the 
same investments and expectations as a person who has obtained all 
permits. Therefore, the court found that a good faith attempt to

[[Page 70823]]

obtain all permits before August 3, 1977, should suffice for purposes 
of VER. The court remanded to the Secretary that portion of the 
definition that required the property owner actually to have obtained 
all permits necessary to mine.
2. Likelihood of Compensable Takings
    In evaluating takings claims for compensation concerning government 
regulatory actions, the courts have typically considered three factors 
on a fact-specific, case-by-case basis: the character of the 
governmental action, the economic impact of the action, and the extent 
to which the government action interferes with reasonable investment-
backed expectations. See Penn Cent. Transp. Co. v. New York City, 438 
U.S. 104, 124 (1978). Because of the scope of the final rule and the 
lack of information on specific property interests that might be 
affected, this assessment cannot predict or evaluate the effects of the 
final rule on property rights. However, most States have been applying 
the good faith/all permits standard or a similar standard since the 
inception of state regulatory primacy under SMCRA, so experience to 
date with this standard provides some indication of the likelihood of 
future compensable takings. In light of this history, the assessment 
will discuss generally the anticipated impacts of the final rule, and 
compare them to the impacts of the other alternatives considered.
    a. History. History does not suggest that the promulgation of a 
good faith/all permits standard would result in a significant number of 
takings compensation awards. Twenty State programs currently include 
either the good faith/all permits standard (15 States) or the all 
permits standard (5 States); we also have used the good faith/all 
permits standard for a number of years. Two State programs use a 
takings standard, one uses only the needed for and adjacent standard, 
and one State has no VER definition. We are not aware of any instance 
in which the States' use of these standards has resulted in a judicial 
determination of a compensable taking.
    Likewise, use of these standards has not resulted in any financial 
compensation in those instances where our application of the standard 
has resulted in litigation.
    The question of whether application of the good faith/all permits 
standard for VER effects a compensable taking was examined by the court 
in Sunday Creek Coal Co. v. Hodel (``Sunday Creek''), No. 88-0416, slip 
op. (S.D. Ohio June 2, 1988). In Sunday Creek, applying Ohio's 
counterpart to the good faith/all permits standard, we found that the 
plaintiff did not have VER. The court ruled that our application of 
Ohio's VER standard would deprive Sunday Creek of its property rights 
in violation of the Fifth Amendment. The court therefore reversed our 
negative VER determination. In another case that considered the 
question of VER, Belville Mining Co. v. United States (``Belville 
II''), No. C-1-89-874 (S.D. Ohio), the court simply assumed that if an 
applicant could demonstrate a right to strip mine, then denial of VER 
would constitute a ``taking'' of that applicant's interest. These two 
decisions indicate that, at least in Ohio, a Federal court would be 
likely to conclude that application of the good faith/all permits 
standard for VER would effect a compensable taking. However, the United 
States Court of Federal Claims has exclusive jurisdiction to hear 
takings claims against the Federal government.
    While the likelihood of some degree of financial exposure exists, 
based on the above data, we believe that adoption of a good faith/all 
permits standard will not result in any change in the Government's 
financial exposure.
    b. Character of the Governmental Action. The purpose served and the 
statutory provisions implemented by this final rulemaking are discussed 
in the preamble to the final rule. The final rule substantially 
advances a legitimate public purpose. The legitimate public purpose is 
the implementation of the protections for specified areas set forth in 
section 522(e) of SMCRA. In that section, Congress determined that 
subject to certain exceptions, including valid existing rights, surface 
coal mining is prohibited on specified lands because such mining is 
incompatible with the values for which those lands were designated as 
unsuitable for surface coal mining operations.
    The final rule substantially advances that purpose in several 
respects.
    First, the final rule informs interested persons of what our 
interpretation and application of section 522(e) will be. Further, the 
rule sets out the procedures to be followed in implementation of 
section 522(e). Thus, the rule provides greater certainty, clarity, and 
predictability in implementation of section 522(e).
    Second, the rule advances Congress' purpose of protecting the areas 
specified in section 522(e), by providing that the primary VER 
exception for mining in those protected areas applies only to the 
extent that a person can demonstrate that a good faith effort had been 
made to obtain all required permits for a surface coal mining operation 
before the area came under the protection of section 522(e). (As 
discussed in the preamble to the final rule, the rulemaking also 
addresses other VER standards that may apply, and other exceptions to 
section 522(e).) The final definition of VER thus advances the 
regulatory scheme Congress developed to prevent the harms which surface 
coal mining operations would cause in those areas.
    We do not know of any other property use or actions that would 
significantly contribute to the problems caused by surface coal mining 
operations in such areas.
    c. Economic Impact.
Affected Property Interests
    The property interests that could be affected by this rule are 
primarily coal rights in section 522(e) areas. We cannot determine in 
advance which coal rights would be affected by the eventual application 
of this final rule, or what value those rights would have. However, 
under both the good faith/all permits standard and the needed for and 
adjacent standard in this final rule, the person requesting the VER 
determination must first demonstrate the requisite underlying property 
right to mine the coal by the proposed method. Thus, those coal owners 
that cannot demonstrate the requisite property right would not be able 
to demonstrate VER.
    In many instances, a coal holder may not be able to demonstrate the 
requisite property right to surface mine coal. This is the case when 
the coal rights were severed at such an early date that, under state 
property law, no right to surface mine was conveyed. In those cases, 
denial of VER to surface mine would not be a compensable taking, 
because no property rights would have been taken. See the discussion of 
this topic in Final Environmental Impact Statement OSM-EIS-29, entitled 
``Proposed Revisions to the Permanent Program Regulations Implementing 
Section 522(e) of the Surface Mining Control and Reclamation Act of 
1977 and Proposed Rulemaking Clarifying the Applicability of Section 
522(e) to Subsidence from Underground Mining'' (July, 1999), and the 
accompanying Final Economic Analysis (EA) entitled ``Proposed Revisions 
to the Permanent Program Regulations Implementing Section 522(e) of the 
Surface Mining Control and Reclamation Act of 1977 and Proposed 
Rulemaking Clarifying the Applicability of Section 522(e) to Subsidence 
from Underground Mining'' (July, 1999). As discussed in the EIS and EA, 
we have no means of precisely

[[Page 70824]]

estimating how many such instances will occur.
    In all other instances, if we find that a person does not have VER 
and a takings claim is filed with the United States Court of Federal 
Claims, that court would evaluate the claim. Because of the 
geographical scope and complexity of this rulemaking, we do not have 
sufficient information to accurately predict or evaluate the incidence 
of such claims, or their likely merits. There is no data base that 
definitively or reliably lists all properties protected under section 
522(e), or the nature or extent of individual coal rights included in 
such areas. Such a list would not remain current for any appreciable 
time because individual properties would be added or removed on a 
continual basis as protected features come into existence, evolve, and 
sometimes disappear. Even if it could be determined which coal rights 
are subject to section 522(e), it cannot reliably be predicted which 
coal an owner might seek to mine or for which lands a VER determination 
would be necessary.
Likely Degree of Economic Impact, Character and Present Use of 
Property, and Mitigating Benefits
    Similarly, because we cannot predict what VER determinations may be 
necessary, we cannot predict the likely degree of economic impact on 
the underlying property interests from application of this final rule. 
However, in general, application of the final rule might result in more 
economic impact on underlying property interests than would occur under 
the other alternatives considered. This greater impact could occur 
because, compared to those other alternatives, more holders of coal 
rights may be unable to mine the coal under the final rule because they 
could not demonstrate VER under the good faith/all permits standard.
    However, as discussed in the EIS and in this preamble, holders of 
coal rights do access the coal on lands protected by section 522(e) by 
methods other than the VER exception. These methods include the 
compatibility findings, waivers and joint approvals authorized under 
paragraphs (e)(2) through (e)(4) of section 522 as well as outright 
purchase of a protected feature such as an occupied dwelling to remove 
it from protected status.
    We do not have information on the character and present use of 
individual affected properties. Likewise, we do not have the specific 
information necessary to evaluate the extent to which, in particular 
cases, the benefits to the property holder from applying the 
prohibitions of section 522(e) offset or otherwise mitigate the adverse 
economic impact of applying those prohibitions. In general, application 
of the prohibitions is expected to ensure that incompatible use is not 
made of such lands, where Congress has determined that surface coal 
mining operations are an incompatible use. The availability of other 
alternatives to the final rule is discussed below.
    d. Interference with reasonable investment-backed expectations. 
Whether a coal holder has reasonable investment-backed expectations, 
and the degree to which application of the final rule might interfere 
with those expectations, cannot be determined until the coal holder has 
requested a determination or finding that a particular exception to the 
prohibitions and restrictions of section 522(e) applies. However, 
application of the final rule might result in more interference with 
reasonable investment-backed expectations than would occur under the 
other alternatives considered. Compared to the other alternatives, more 
holders of coal rights may be unable to mine the coal under the final 
rule because they could not demonstrate VER under the good faith/all 
permits standard. However, any such interference could be limited by 
factors such as the following:
    In many cases, holders of coal rights in section 522(e) areas will 
not request VER, either because the holder determines that the coal is 
not economically minable, or because the holder determines that it is 
less costly to obtain some other exception, such as a compatibility 
finding or a waiver, from the prohibitions of section 522(e).
    In other cases, under State property law, where the mineral rights 
have been severed from the surface estate, we expect that holders of 
coal rights would not have the necessary property right to surface mine 
the coal, as discussed in more detail in the EIS and EA. These holders 
could have no reasonable expectation of surface mining the coal.
    If the holder of coal rights purchased those rights after the land 
came under the protections of section 522(e), the purchaser would be on 
notice of the applicability of the prohibitions in section 522(e). If 
the purchaser unsuccessfully requested a determination or finding that 
a particular exception under section 522(e) applied, and filed a 
takings claim concerning denial of the request, it is likely that the 
United States Court of Federal Claims would deem the purchaser to be on 
notice concerning the prohibitions and the exceptions. Thus, we would 
expect the court to find that the purchaser could have no reasonable 
expectation of evading the application of those requirements. In some 
cases, it is also likely that the court would find no reasonable 
expectation of mining under an exception. And if there is no reasonable 
expectation of mining, we would not expect the court to find that 
reasonable investment-backed expectations exist.
    If a coal holder has made no significant expenditures, the holder 
probably would be unable to demonstrate sufficient investment-backed 
expectations to support a takings claim. Similarly, if VER for surface 
mining were denied, but underground mining were possible and 
economical, we expect that a takings claim would be difficult to 
sustain. Also, if a coal holder does not demonstrate VER, the holder 
may nonetheless be eligible for another exception to the prohibitions 
and restrictions of section 522(e), such as a compatibility finding or 
a waiver. The prohibitions and restrictions would not apply if the coal 
holder demonstrated that the other exception applies. We expect that a 
takings claim for denial of VER would be difficult to sustain if the 
holder failed to utilize another available exception--particularly in 
light of the fact that these other exceptions are used relatively 
often.

Summary of Takings Implications for Section 522(e) Lands

    To provide a basis for comparing the relative environmental and 
economic impacts of the final rule and the alternatives, we developed 
impact estimates by using a model that relied on specific methodologies 
and assumptions. For purposes of this assessment, the evaluation of 
takings implications utilizes in part the analyses set out in the EIS 
and EA for the final rule. The EIS and EA discussions of the 
alternatives summarize the number of acres estimated to be disturbed 
under each VER alternative over a 20-year period.
    Because of the difficulty in predicting the extent of actual mining 
in protected areas under this rule, we could not predict the actual 
impacts of the alternatives. Therefore, the EIS and EA estimates of 
coal acreage that could be mined under the good faith/all permits 
alternative and the other alternatives are relevant to this assessment 
only to the limited extent that they show the anticipated relative 
economic impacts of the final rule, compared to the other alternatives. 
Tables V-1 through V-5 of the EIS show relative amounts of coal acreage 
estimated to be mined over a 20-year period under the different

[[Page 70825]]

alternatives, as calculated using the model.
    Generally speaking, these analyses assume that:
    (1) Relatively few persons would be able to demonstrate VER under a 
good faith/all permits standard.
    (2) For some categories of lands, more persons might be able to 
demonstrate VER under a good faith/all permits or takings standard, and 
that in some cases, even more persons might be able to demonstrate VER 
under an ownership and authority standard.
    (3) The impacts of the bifurcated alternative would be somewhere 
between the impacts of the good faith/all permits standard and those of 
the ownership and authority standard.
    In general, as stated, the good faith/all permits standard is more 
likely to limit surface coal mining operations. As a result, more 
takings claims would be expected to be filed under a good faith/all 
permits standard. Whether courts would find that a negative VER 
determination under the good faith/all permits standard constituted a 
compensable taking should turn on the specific property rights 
involved.
    Based upon available information, including the EIS and EA for the 
final rule, and a survey of historical data concerning permitting, we 
anticipate that the final rule will have the following takings impacts.
    Section 522(e)(1) lands: These areas include National Park lands, 
National Wildlife Refuge lands, National Trails, National Wilderness 
Areas, Wild and Scenic Rivers and study rivers, and National Recreation 
Areas. We anticipate relatively few takings impacts in (e)(1) areas 
because there has been a relative dearth of VER determinations and any 
resulting takings claims concerning (e)(1) areas since the enactment of 
SMCRA.
    Further, as previously discussed, the Secretary's 1988 policy 
concerning exercise of VER in (e)(1) areas remains in effect. That 
policy states that, if a person acts to exercise VER on (e)(1) lands, 
then, subject to appropriation, the Secretary will use available 
authorities to seek to acquire the rights through exchange, negotiated 
purchase, or condemnation.
    All of this suggests that there may continue to be few VER 
requests, little economic impact, few takings cases, and even fewer 
takings awards in (e)(1) areas.
    Surface mining: As discussed in the EA, we anticipate that in many 
cases a compensable taking for denial of VER to surface mine would not 
be found, because the requisite property right to surface mine coal 
could not be demonstrated. And in many cases, if VER for surface mining 
were denied, underground mining would still be a reasonable remaining 
use of the coal, so a takings award would not be likely for denial of 
VER to surface mine in section 522 (e)(1) areas.
    Underground mining: As explained in a separate rulemaking published 
in today's Federal Register, the prohibitions of section 522(e) do not 
apply to subsidence from underground mining operations. Therefore, we 
expect that any takings award for denial of VER for surface activities 
in connection with underground mining would be limited to coal that 
could not be mined from portals outside the (e)(1) area.
    Section 522(e)(2) lands: These areas consist of Federal lands 
within national forests. For the reasons summarized below, we 
anticipate relatively few takings from VER determinations on (e)(2) 
lands.
    Surface mining: We anticipate that no takings claims would arise 
from application of the good faith/all permits standard in surface 
mining VER determinations in western national forests and national 
grasslands. Coal owners in the western (e)(2) areas have never pursued 
surface mining VER determinations, but rather have obtained 
compatibility findings under section 522(e)(2). We anticipate that some 
acreage might be precluded from surface mining, and some takings claims 
might arise, concerning surface mining VER determinations in eastern 
national forests.
    For surface coal mining, we do not expect that a court would find 
that a compensable taking exists if underground mining is an 
economically and technically feasible alternative. In the absence of 
VER for surface mining, most owners could qualify for a compatibility 
exception for underground mining, so underground mining would be a 
reasonable remaining use. As discussed in the EIS and EA, we anticipate 
that in a substantial number of cases (a higher proportion in the 
eastern coal fields), a court would find no property right to surface 
mine under State property laws. This is because the coal in many cases 
was severed from the surface rights relatively early, when surface 
mining was not common at the time and place of severance. As a result, 
under State property law, typically the coal owner would not have the 
necessary right to surface mine. We do not have information on actual 
dates of severance of coal rights. There might also be mitigation of 
takings in those limited instances where the United States decides to 
purchase coal rights.
    Underground mining: The (e)(2) compatibility exception would 
continue to apply. Therefore, we expect few takings claims from denial 
of VER for underground mining in national forests, because we assume 
that virtually all underground mining could qualify for a compatibility 
finding. This is based in part on the fact that the Multiple-Use 
Sustained Yield Act and the National Forest Management Act establish 
multiple use as the guiding principle for management of national forest 
lands, and in part on the fact that, in the past, requests for 
compatibility findings have never been denied. Surface operations and 
impacts associated with underground mining generally disturb only a 
relatively minimal amount of the land surface. Roads and surface 
facilities can generally be sited in such a way as to avoid significant 
impacts on other land uses such as timber production, livestock 
grazing, and recreation.
    Section 522(e)(3) lands: These areas include lands where surface 
coal mining operations would adversely affect a publicly owned park or 
site on the National Register of Historic Places. We do not anticipate 
that any significant takings would occur on (e)(3) lands as a result of 
surface or underground mining VER determinations. Pursuant to (e)(3), 
jurisdictional agencies, together with the regulatory authority, may 
approve mining in the vicinity of protected areas, and thus waive the 
prohibition of (e)(3). A sampling of permit records indicated that some 
such mining has occurred, but no VER requests were located for such 
areas. Therefore, we anticipate that, in many cases, operations may 
avoid such sites or resolve any jurisdictional agency concerns about 
mining impacts, so that the jurisdictional agency and the regulatory 
authority would jointly approve mining pursuant to (e)(3). In such 
cases, a VER determination would be unnecessary.
    Section 522(e)(4) lands: These areas include lands within one 
hundred feet of the right of way of a public road. We anticipate 
relatively few takings claims concerning VER determinations for (e)(4) 
areas. Coal mines now tend to avoid areas with numerous roads and 
streets because of increased acquisition and public safety-related 
costs of mining in such areas. In the vast majority of cases, an 
exception to the prohibition of (e)(4) is obtained under the waiver 
provision of (e)(4), rather than through a VER determination. 
Therefore, we do not expect the choice of a VER standard to have a 
major effect on takings claims for coal located within the buffer zones 
for public roads. As noted above, our

[[Page 70826]]

survey of permitting data located only a few instances of VER 
determinations for (e)(4) areas.
    Section 522(e)(5) lands: These areas include lands within 300 feet 
of an occupied dwelling, public building, school, church, community or 
institutional building, or public park, or within 100 feet of a 
cemetery. We anticipate relatively little economic impact for takings 
purposes on (e)(5) areas other than (e)(5) public park lands.
    The survey of permit files indicated that in most cases (more than 
85%), mining near dwellings occurs because (e)(5) waivers are 
negotiated with dwelling owners. Therefore, we expect that VER would 
not be necessary and would continue not to be pursued in most such 
areas. Proposals to mine in areas occupied by public buildings, 
schools, churches, and cemeteries are typically limited. It is usually 
less expensive for the operator to avoid such areas, rather than to pay 
the costs of seeking VER, avoiding material damage where prohibited, 
and paying reclamation costs.
    In addition, the permit survey did not disclose any instances of 
VER requests for mining in the areas around non-NPS public parks 
protected under (e)(5). However, our model does anticipate that in the 
next 20 years substantial coal acreage in (e)(5) public parks might be 
precluded from mining as a result of underground mining VER 
determinations under the final rule, and a relatively smaller but still 
significant acreage might be precluded from surface mining as a result 
of surface mining VER determinations under the final rule. Some portion 
of that acreage could result in takings awards.
3. Alternatives to the Final Rule
    As summarized above in this assessment, and as discussed in detail 
in the EIS and the EA, we developed and considered three alternatives 
to the good faith/all permits standard for VER. They are the good 
faith/all permits or takings (GFAP/T) standard, the ownership and 
authority standard, and the bifurcated alternative. The good faith/all 
permits standard has the greatest potential for takings implications, 
and we have found no way to minimize the takings implications of the 
final rule except by selecting one of the other alternatives. However, 
we do not believe that such a selection is justified. We believe that 
the good faith/all permits standard adopted as part of the final rule 
is the best alternative because it best protects the areas listed in 
section 522(e) from surface coal mining operations, as Congress 
intended.
GFAP/T Standard
    Under this standard, a person could demonstrate VER by (1) 
demonstrating compliance with the good faith/all permits standard, or 
(2) demonstrating that denial of VER as of the date that the area 
became subject to section 522(e) would reasonably be expected to result 
in a compensable taking.
    We would expect no takings implications from the GFAP/T standard 
because in all cases, VER should be granted if denial would result in a 
compensable taking. However, as noted in the preamble to the final 
rule, when we proposed the GFAP/T alternative in 1991, it elicited some 
of the strongest opposition that we have ever received on a proposed 
rule. We received approximately 750 comments, and virtually every 
comment emphatically opposed the GFAP/T standard. Opponents charged 
that this standard would be impossibly burdensome for States to 
implement. Some commenters charged that it was too complex, 
unpredictable, and uncertain. Many commenters urged adoption of a 
``bright-line'' standard instead. Some charged that it was not 
protective enough of section 522(e) areas, and others charged that it 
was inappropriately restrictive of mining in section 522(e) areas. Some 
commenters felt that State regulatory authorities had no authority 
under State law to apply the standard. Every category of commenter 
rejected the GFAP/T standard as unworkable, unacceptable, or 
demonstrably inferior to some other alternative.
Ownership and Authority Standard
    Under this standard, a person would have VER upon demonstrating 
ownership of the coal rights plus the property right under State law to 
remove the coal by the method intended. The ownership and authority 
standard would require demonstrating, as of the date that the land came 
under the protection of section 522(e), the property right to mine the 
coal by underground methods if VER for underground mining were sought, 
and by surface mining methods if VER for surface mining were sought.
    We would not expect the ownership and authority standard to have 
significant takings implications. If a person could not demonstrate the 
right to mine the coal by the method intended, there would be no denial 
of or interference with property rights for which compensation would be 
due under takings law, since a person must have the property right to a 
particular use to be compensated for denial of that use.
    Although the ownership and authority standard would have no 
significant takings implications, we believe that it suffers from a 
serious shortcoming in that it would effectively eviscerate the 
protections afforded under section 522(e) to lands underlain by non-
Federal coal. This evisceration would result from the fact that the 
ownership and authority alternative would result in a finding of VER 
whenever a person met the permit application requirements for property 
rights. As a result, except for lands overlying unleased Federal coal, 
the prohibitions of section 522(e) would be meaningless and without 
practical effect, because they would add almost nothing to the 
protection already offered by the SMCRA permit requirements. Such a 
result would clearly be inconsistent with congressional intent.
Bifurcated Alternative
    Under this alternative, when the mineral and surface estates have 
been severed, the date of severance would determine whether the 
ownership and authority or the good faith/all permits standard for VER 
would be used. When the mineral estate was severed from the surface 
estate before the land came under the protection of section 522(e), the 
ownership and authority standard would be used to determine VER. When 
the mineral estate was severed from the surface estate after the date 
the land came under the protection of section 522(e), the good faith/
all permits standard would be used. Thus, we believe the takings 
implications of this alternative would be somewhere between those of 
the ownership and authority and the good faith/all permits standards. 
We did not propose this alternative, because we concluded that it was 
questionable whether there is a basis in SMCRA for applying two 
different VER standards, depending on the date of severance.
4. Estimate of Potential Financial Exposure From the Final Rule
    The Attorney General's guidelines and the Department's supplemental 
guidelines for takings implications assessments provide that the 
assessment should set out an estimate of the financial exposure if the 
final rule were held to effect a compensable taking. Given the 
geographic scope of this final rule, however, and the lack of 
information on the effects on individual property rights, a meaningful 
estimate of financial exposure is impossible. Instead, as discussed 
above, this assessment discusses generally the

[[Page 70827]]

anticipated takings impacts of the final rule, relative to the other 
alternatives considered. Federal financial exposure is greatest from 
claims concerning VER denials in the eastern United States in section 
522(e)(2) areas or from the costs associated with acquisition of 
property rights in section 522(e)(1) areas pursuant to the Secretary's 
1988 policy statement, as discussed above.
5. Conclusion
    The final rule for VER is expected to have a greater potential for 
takings implications than the other alternatives considered. More 
significant takings implications are anticipated primarily in some 
(e)(2) areas (Federal lands in eastern national forests) and (e)(5) 
areas (State and local parks). In light of the Secretary's 1988 policy 
on exercise of VER for (e)(1) areas, takings implications are less 
likely in (e)(1) areas. Takings implications are also substantially 
less likely in (e)(3) through (e)(5) areas other than public parks. 
Case-by-case application of the regulation might result in takings 
implications, but such an analysis is beyond the scope of this 
assessment and cannot be made until the rule is actually applied. Thus, 
insufficient information is available to enable an accurate assessment 
of the extent to which significant takings consequences might result 
from adoption and application of this rule.
    Under the standards set forth in the ``Attorney General's 
Guidelines For the Evaluation of Risk and Avoidance of Unanticipated 
Takings,'' dated June 30, 1988, and the Supplementary Takings 
Guidelines of the Department of the Interior, we therefore conclude 
that this rulemaking has significant takings implications.

F. Executive Order 13132: Federalism

    In accordance with Executive Order 13132, this rule does not have 
Federalism implications. The rule does not have substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.
    SMCRA delineates the roles of the Federal and State governments 
with regard to the regulation of surface coal mining and reclamation 
operations. One of the purposes of SMCRA is to ``establish a nationwide 
program to protect society and the environment from the adverse effects 
of surface coal mining operations.'' States are not required to 
regulate surface coal mining and reclamation operations under SMCRA, 
but they may do so if they wish and if they meet certain requirements. 
The Act also provides for Federal funding of 50% of the cost of 
administering State regulatory programs approved under SMCRA. Section 
503(a)(1) of SMCRA requires that State laws regulating surface coal 
mining and reclamation operations be ``in accordance with'' the 
requirements of SMCRA, and section 503(a)(7) requires that State 
programs contain rules and regulations ``consistent with'' regulations 
issued by the Secretary pursuant to SMCRA. Further, section 505 of 
SMCRA provides for the preemption of State laws and regulations that 
are inconsistent with the provisions of SMCRA.

G. Executive Order 12988: Civil Justice Reform

    In accordance with Executive Order 12988, the Office of the 
Solicitor has determined that this rule (1) does not unduly burden the 
judicial system and (2) meets the requirements of sections 3(a) and 
3(b)(2) of the order.

H. Paperwork Reduction Act

    Under the Paperwork Reduction Act, agencies may not conduct or 
sponsor a collection of information unless the collection displays a 
currently valid Office of Management and Budget (OMB) control number. 
Also, no person must 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, we submitted the information collection and 
recordkeeping requirements of 30 CFR Parts 761 and 772 to OMB for 
review and approval. OMB subsequently approved the collection 
activities and assigned them OMB control numbers 1029-0111 and 1029-
0112, respectively.

I. National Environmental Policy Act of 1969 and Record of Decision

    This rule, issued in conjunction with the rule concerning the 
applicability of the prohibitions of section 522(e) of SMCRA to 
subsidence from underground mining operations (RIN 1029-AB82), 
constitutes a major Federal action significantly affecting the quality 
of the human environment under the National Environmental Policy Act of 
1969 (NEPA). Therefore, we have prepared a final environmental impact 
statement (EIS) pursuant to section 102(2)(C) of NEPA, 42 U.S.C. 
4332(2)(C). The Environmental Protection Agency has published a 
separate notice of the availability of the EIS in today's edition of 
the Federal Register. A copy of the EIS, which is entitled ``Proposed 
Revisions to the Permanent Program Regulations Implementing Section 
522(e) of the Surface Mining Control and Reclamation Act of 1977 and 
Proposed Rulemaking Clarifying the Applicability of Section 522(e) to 
Subsidence from Underground Mining: Final Environmental Impact 
Statement OSM-EIS-29 (July, 1999),'' is available for inspection at the 
Office of Surface Mining, Administrative Record--Room 101, 1951 
Constitution Avenue, N.W., Washington, DC 20240. You may obtain a 
single copy by writing us or calling 202-208-2847. You also may request 
a copy via the Internet at [email protected].
    The preamble to this final rule serves as the ``Record of 
Decision'' under NEPA. Because of the length of the preamble, we have 
prepared the following concise summary of the EIS and the decisions 
made in the final rule relative to the alternatives considered in the 
EIS.
    The EIS addressed the general setting of the proposal, its purpose 
and need, the alternatives considered, existing environmental 
protection measures, the affected environment, the environmental 
consequences, and overall consultation and coordination activities. In 
addition, the EIS discussed the regulatory protections of SMCRA, the 
history of VER, and related rulemaking issues such as coal exploration 
on protected lands, the transferability of VER, procedural requirements 
for VER determinations, and responsibility for VER determinations for 
non-Federal inholdings within the areas listed in section 522(e)(1) of 
the Act.
    We used a generic mine impact analysis on a hypothetical site-
specific basis to describe impacts to certain resources when surface 
and underground mining operations are conducted within, and adjacent 
to, section 522(e) areas (see Chapter IV of the EIS). In addition, we 
estimated the coal resources within the areas defined by section 522(e) 
and subjected them to various tests and assumptions to provide an 
estimate of the number of acres that could be affected over a 20-year 
period (1995 to 2015). Using the generic mine impact analysis and the 
potentially affected acreage of section 522(e) areas, we were able to 
provide a measure of the relative degree of potential environmental 
impacts under each alternative.
    Because of the comments the we received on the proposed rule, the 
final rule differs somewhat from the proposed rule. In making these 
changes, we used the EIS to understand the potential environmental 
impacts. We

[[Page 70828]]

determined that there are no measurable environmental impacts 
associated with these changes, and that, in terms of environmental 
impacts, the changes do not constitute a significant departure from the 
alternatives evaluated in the EIS.
Alternatives Considered
    We identified five alternatives for implementing the VER exception 
in section 522(e) of SMCRA. These alternatives are no action, good 
faith/all permits (the preferred alternative), good faith/all permits 
or takings, ownership and authority, and bifurcated. The last 
alternative is a combination of the good faith/all permits and the 
ownership and authority alternatives.
    No Action (NA) Alternative: Under the no action alternative, we 
would not adopt a rule defining VER and establishing implementing 
procedures; the status quo would continue. We would make VER 
determinations using the policy established in the suspension notice 
published November 20, 1986 (51 FR 41954) in all States except Ohio. In 
Ohio, we would use a takings standard. We would continue to make VER 
determinations for Federal lands in section 522(e)(1) and (2) areas. We 
also would continue to make VER determinations for non-Federal lands 
within section 522(e)(1) areas when surface coal mining operations on 
those lands would affect the Federal interest. States would continue to 
use their current standards and procedures for determining VER.
    Good Faith/All Permits Alternative: Under the good faith/all 
permits standard, a person has VER if, prior to the date that the land 
came under the protection of section 522(e), the person or a 
predecessor in interest had obtained, or made a good faith effort to 
obtain, all permits and other authorizations required to conduct 
surface coal mining operations.
    Good Faith/All Permits or Takings Alternative: Under this 
alternative, a person must either comply with the good faith/all 
permits standard or demonstrate that denial of VER would result in a 
compensable taking. VER would be found to exist whenever the agency 
making the VER determination finds that, based on existing takings 
jurisprudence, denial of VER would be expected to result in a 
compensable taking of property under the Fifth and Fourteenth 
Amendments to the Constitution.
    Ownership and Authority Alternative: Under this alternative, an 
individual could establish VER by demonstrating possession of both a 
right to the coal and the right to mine it by the method intended. 
Adoption of the ownership and authority alternative would likely result 
in the greatest number of determinations that VER did exist.
    Bifurcated Alternative: Under this alternative, VER standards would 
be based on the date of severance of the mineral and surface estates in 
relation to the date that the land came under the protection of section 
522(e). When the mineral estate was severed from the surface estate 
before the land came under the protections of section 522(e), VER would 
be determined based on the ownership and authority standard. When the 
mineral estate had not been severed from the surface estate before the 
land came under the protection of section 522(e), VER would be based on 
the good faith/all permits standard.
Decision
    The final rule establishes the good faith/all permits alternative 
as the standard for VER. This decision is based upon the belief that 
the good faith/all permits standard best achieves protection of the 
lands listed in section 522(e) in a manner consistent with 
congressional intent at the time of SMCRA's enactment. At the same 
time, it protects the interests of those persons who had taken concrete 
steps to obtain regulatory approval for surface coal mining operations 
on lands listed in section 522(e) before those lands came under the 
protection of section 522(e). And, since 20 of the 24 approved State 
regulatory programs already rely upon either the good faith/all permits 
standard or the all permits standard, adoption of a good faith/all 
permits standard would cause the least disruption to existing State 
regulatory programs.
    The good faith/all permits standard is consistent with the 
legislative history of section 522(e), which indicates that Congress' 
purpose in enacting section 522(e) was to prevent new surface coal 
mining operations on the lands listed in that section, either to 
protect human health or safety, or because the environmental values and 
other features associated with those lands are generally incompatible 
with surface coal mining operations.
    The analysis of environmental impacts indicated that, compared with 
the other alternatives considered, the good faith/all permits standard 
is the most protective of the lands listed in section 522(e). Adoption 
of the takings standard in place of the good faith/all permits standard 
would result in surface coal mining operations on an estimated 
additional 2,855 acres of protected lands between 1995 and 2015. 
Adoption of either the bifurcated standard or the ownership and 
authority standard would result in surface coal mining operations on an 
estimated additional 3,062 acres of protected lands during that time 
frame. Therefore, adoption of the good faith/all permits standard for 
VER will best fulfil the intent of Congress to prohibit, with certain 
exceptions, new surface coal mining operations on the lands protected 
by section 522(e).
    The EIS also identified certain issues common to the VER 
alternatives. We discussed these issues and their potential impacts in 
Chapters II and V of the EIS. As discussed below, we made the following 
decisions with respect to these issues.
    VER Definition Applicable to Section 522(e)(1) and (e)(2) Lands: 
Under 30 CFR Title VII, Subchapter C, State regulatory programs under 
SMCRA must be no less effective than the Federal regulations in meeting 
the requirements of the Act. Therefore, we expect that there would be 
no differences in the environmental impacts of the two alternatives 
that we considered (use of State versus Federal definition). The final 
rule specifies that the Federal definition of VER, not the approved 
State program definition, will apply to all VER determinations for the 
lands listed in section 522(e)(1) and (e)(2) of SMCRA, regardless of 
whether OSM or the State regulatory authority is responsible for making 
the determination. Application of the Federal definition will ensure 
that requests for VER determinations involving lands of national 
interest and importance are evaluated on the basis of the same 
criteria.
    Continually Created VER: The definition of VER in the final rule 
provides for determination of VER based on property rights and 
circumstances in existence when the land comes under the protection of 
section 522(e) of SMCRA. This concept has sometimes been referred to as 
``continually created VER.'' We first adopted it as a separate standard 
in the 1983 definition of VER. In the final rule, we are removing the 
separate standard and incorporating the concept into each VER standard 
and the exception for existing operations. The EIS found the 
differences in environmental impact between the existing and proposed 
(now final) rules to be negligible.
    Transferability of VER: The final rule provides that, in general, 
VER are transferable because, unless otherwise provided by State law, 
the property rights, permits, and operations that form the basis for 
VER determinations are transferable. There is one significant 
exception. If an operation with VER

[[Page 70829]]

under the needed for and adjacent standard divests itself of the land 
to which the VER determination pertains, the new owner does not have 
the right to conduct surface coal mining operations on those lands 
under the prior VER determination. States may prohibit VER transfers to 
the extent that they have the authority to do so under State law.
    Needed for and Adjacent Standard: The final rule adopts the needed 
for and adjacent standard as proposed in 1997, with several changes. To 
establish VER under the needed for and adjacent standard, a person must 
(1) make the required property rights demonstration, and (2) document 
that the land is both needed for and immediately adjacent to a surface 
coal mining operation for which all permits and other authorizations 
required to conduct surface coal mining operations had been obtained, 
or a good faith effort to obtain all necessary permits and 
authorizations had been made, before the land came under the protection 
of section 522(e) of SMCRA. Except for operations in existence before 
August 3, 1977, or for which a good faith effort to obtain all 
necessary permits had been made before August 3, 1977, this standard 
does not apply to lands already under the protection of section 522(e) 
when the regulatory authority approved the permit for the original 
operation or when the good faith effort to obtain all necessary permits 
was made. As stated in Chapter V of the EIS, we found that application 
of this standard would have no more than minor environmental impacts 
overall.
    Procedural Requirements for VER Determinations: The existing rules 
had few requirements governing the submission and processing of 
requests for VER determinations. The final rule includes more complete 
requirements to promote public participation and establish consistent 
review and decision-making procedures. As discussed in Chapter V of the 
EIS, we found that adoption of more complete procedural requirements 
would result in minor to significant environmental benefits by 
improving decision accuracy and ensuring consideration of all relevant 
information.
    Responsibility for VER Determinations for Non-Federal Inholdings in 
Section 522(e)(1) Areas: As discussed in Chapter V of the EIS, we 
determined that the environmental impacts of the alternatives that we 
considered for this issue would be determined more by the applicable 
VER standard than by which agency is responsible for making VER 
determinations for non-Federal lands within section 522(e)(1) areas. 
Under the final rule, the regulatory authority has the responsibility 
for making VER determinations for all non-Federal lands within the 
areas listed in section 522(e)(1), but, as noted above, the agency must 
use the Federal definition of VER when doing so.
    VER for Coal Exploration Operations: Of the five alternatives under 
consideration regarding requirements for coal exploration on the lands 
protected by section 522(e), we decided that the no action alternative 
best conforms with the provisions of SMCRA. The prohibitions of section 
522(e) apply only to surface coal mining operations, and SMCRA 
specifically excludes coal exploration from the definition of surface 
coal mining operations. Therefore, we decided not to add any VER 
demonstration requirements or other potentially prohibitory barriers to 
coal exploration on the lands listed in section 522(e). However, as 
discussed in Chapter V of the EIS, the no action alternative is the 
least protective of the environment. To mitigate the environmental 
impacts of this alternative, we have revised our rules to add a 
requirement that each application for coal exploration on lands listed 
in section 522(e) include a demonstration that the proposed exploration 
activities have been designed to minimize interference with the values 
for which those lands were designated as unsuitable for surface coal 
mining operations. The final rule also provides that, before approving 
an application for coal exploration on lands listed in section 522(e), 
the regulatory authority must find that the proposed exploration 
activities have been designed to minimize interference with the values 
for which those lands were designated as unsuitable for surface coal 
mining operations.
Environmental Effects of the Alternatives
    The areas most likely to be impacted by surface coal mining 
operations as a result of the VER exception are the lands listed in 
section 522(e)(1), State and local parks, and eastern national forests. 
Rather than claiming VER, operators generally use the waivers and 
compatibility findings authorized under SMCRA to gain access to coal 
resources within western national forests, adjacent to historic sites, 
or within the buffer zones for roads and occupied dwellings. While 
access to coal within the buffer zones for public parks, churches, 
schools, public buildings, and cemeteries is generally dependent upon 
establishing VER, mining operations can generally avoid these protected 
areas without difficulty.
    Good Faith/All Permits Alternative: According to our model, the 
good faith/all permits alternative would have the least environmental 
impact. It also would provide surface owners and resource management 
agencies with the greatest degree of control over surface coal mining 
operations and any resultant adverse impacts in protected areas. Our 
model predicts that the only section 522(e) areas that would be 
disturbed by surface coal mining operations between 1995 and 2015 
pursuant to VER determinations under this alternative would be 883 
acres of Federal lands in eastern national forests, 996 acres within 
the buffer zones for public roads, and 4,823 acres within the buffer 
zones for occupied dwellings. Therefore, the good faith/all permits 
alternative is the environmentally preferable alternative for the VER 
rulemaking.
    No Action Alternative: The impacts of this alternative would likely 
resemble those of the good faith/all permits alternative. However, this 
alternative would allow use of the takings standard in Ohio and in 
those States that have adopted the takings standard as part of their 
approved regulatory programs. Therefore, some areas protected by 
section 522(e) would be mined under this alternative that would not be 
mined under the good faith/all permits alternative. The model used in 
the EIS predicts that, relative to the good faith/all permits 
alternative, the no action alternative would result in surface coal 
mining operations on an additional 711 acres of Federal lands in 
eastern national forests between 1995 and 2015.
    All Other VER Alternatives: The ownership and authority, 
bifurcated, and good faith/all permits or takings alternatives afford 
the greatest potential for mining-related disturbances in protected 
areas. Our model predicts that use of one of these alternatives in 
place of the good faith/all permits alternative would result in surface 
coal mining operations on an additional 185 to 304 acres of section 
522(e)(1) lands (national parks, national wildlife refuges, and 
national recreation areas), 1,686 to 1,761 acres of Federal lands in 
eastern national forests, and 984 to 997 acres of State park lands 
because of VER determinations under these alternatives between 1995 and 
2015. See Figure V-1 of the EIS.
    The potentially affected section 522(e)(1) acreage appears to be 
confined to one National Park unit in the Central Appalachian region, 
several wildlife refuge system units within North Dakota, and, to a 
lesser degree, two

[[Page 70830]]

national recreation areas in the Central Appalachian region. The 
estimated cost to implement the Department's policy to acquire the 
interests of persons with VER who plan to conduct surface coal mining 
operations in section 522(e)(1) areas is $4.185 million during the 20-
year time frame covered by our model.
    VER Alternatives in Combination with Alternatives for Companion 
Rulemaking: As discussed above, the good faith/all permits standard is 
the most environmentally preferable of the alternatives considered for 
the VER definition. However, the EIS also considered the impact of the 
VER alternatives in combination with the alternatives for the 
rulemaking concerning the applicability of the prohibitions of section 
522(e) to subsidence from underground mining. Based upon the number of 
acres of section 522(e) lands that could be subject to either surface 
coal mining operations or subsidence from underground mining, the 
combination of the good faith/all permits alternative for the VER rule 
and the ``prohibitions apply'' (PA) alternative for the prohibitions 
rulemaking would be the most environmentally protective of all 
potential combinations of alternatives for the two rulemakings. 
However, for reasons discussed in the preamble to the rulemaking 
concerning the applicability of the prohibitions of section 522(e) to 
subsidence from underground mining, we have selected the ``prohibitions 
do not apply'' alternative rather than any of the PA alternatives for 
that rulemaking.
Mitigation, Monitoring and Enforcement
    We have adopted all practicable means to avoid or minimize 
environmental harm from the alternatives selected. Congress enacted 
SMCRA to establish a nationwide program to protect society and the 
environment from the adverse effects of surface coal mining operations; 
assure that the rights of surface landowners and other persons with a 
legal interest in the land are fully protected from such operations; 
assure that surface coal mining operations are not conducted where 
reclamation required by SMCRA is not feasible; and assure that surface 
coal mining operations are conducted so as to protect the environment.
    SMCRA's permitting requirements and performance standards generally 
require avoidance, minimization, or mitigation of impacts to important 
environmental resources, and our regulations do likewise. Each SMCRA 
regulatory program includes five major elements: permitting 
requirements and procedures, performance bonds to guarantee reclamation 
in the event that the permittee defaults on any reclamation 
obligations, performance standards to which the operator must adhere, 
inspection and enforcement to maintain compliance with performance 
standards and the terms and conditions of the permit, and designation 
of lands as unsuitable for surface coal mining operations. Each State 
regulatory program must be no less effective than our regulations in 
achieving the requirements of the Act. And we conduct oversight of each 
State's implementation of its approved regulatory program.
Timing of Agency Action
    The regulations of the Council on Environmental Quality at 40 CFR 
1506.10(b)(2) allow an agency engaged in rulemaking under the 
Administrative Procedure Act to publish a decision on the final rule 
simultaneous with the publication of the notice of availability of the 
final EIS. Under section 526(a) of SMCRA, 30 U.S.C. 1276(a), anyone 
wishing to challenge the agency's decision may do so by filing suit in 
the United States District Court for the District of Columbia within 60 
days of the date that the final rule is published in the Federal 
Register.
    Author: The principal author of this rule is Dennis G. Rice, 
Division of Technical Support, Office of Surface Mining Reclamation and 
Enforcement, 1951 Constitution Avenue, N.W., Washington, DC 20240; 
Telephone (202) 208-2829. E-mail address: [email protected].

List of Subjects

30 CFR Part 740

    Public lands, Mineral resources, Reporting and recordkeeping 
requirements, Surety bonds, Surface mining, Underground mining.

30 CFR Part 745

    Intergovernmental relations, Public lands, Mineral resources, 
Reporting and recordkeeping requirements, Surface mining, Underground 
mining.

30 CFR Part 761

    Historic preservation, National forests, National parks, National 
trails system, National wild and scenic rivers system, Surface mining, 
Underground mining, Wilderness areas, Wildlife refuges.

30 CFR Part 762

    Historic preservation, Surface mining, Underground mining.

30 CFR Part 772

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

30 CFR Part 773

    Administrative practice and procedure, Reporting and recordkeeping 
requirements, Surface mining, Underground mining.

30 CFR Part 778

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

30 CFR Part 780

    Reporting and recordkeeping requirements, Surface mining.

30 CFR Part 784

    Reporting and recordkeeping requirements, Underground mining.

    Dated: September 3, 1999.
Sylvia V. Baca,
Acting Assistant Secretary, Land and Minerals Management.

    For the reasons set forth in the preamble, the Department is 
amending 30 CFR Parts 740, 745, 761, 762, 772, 773, 778, 780, and 784 
as set forth below:

PART 740--GENERAL REQUIREMENTS FOR SURFACE COAL MINING AND 
RECLAMATION OPERATIONS ON FEDERAL LANDS

    1. The authority citation for Part 740 continues to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq. and 30 U.S.C. 181 et seq.

    2. Section 740.4 is amended by deleting the word ``and'' at the end 
of paragraph (a)(2), replacing the period at the end of paragraph 
(a)(3) with a semicolon, and revising paragraphs (a)(4) and (a)(5) to 
read as follows:


Sec. 740.4  Responsibilities.

    (a) * * *
* * * * *
    (4) Decisions on requests to determine whether a person possesses 
valid existing rights to conduct surface coal mining operations on 
Federal lands within the areas specified in Sec. 761.11(a) and (b) of 
this chapter; and
    (5) Issuance of findings concerning whether there are significant 
recreational, timber, economic, or other values that may be 
incompatible with surface coal mining operations on Federal lands 
within a national forest, as specified in Sec. 761.11(b) of this 
chapter.
    3. Section 740.10 is revised to read as follows:

[[Page 70831]]

Sec. 740.10  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 1029-0027. This 
information is needed to implement section 523 of the Act, which 
governs surface coal mining operations on Federal lands. Persons 
intending to conduct such operations must respond to obtain a benefit.
    (b) OSM estimates that the public reporting burden for this part 
will average 26 hours per respondent, including time spent reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Send comments regarding this burden estimate 
or any other aspect of these information collection requirements, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, 1951 Constitution Avenue, NW, Washington, DC 20240; and the 
Office of Management and Budget, Office of Information and Regulatory 
Affairs, Attention: Interior Desk Officer, 725 17th Street, N.W, 
Washington, DC 20503. Please refer to OMB Control Number 1029-0027 in 
any correspondence.
    4. In Sec. 740.11, paragraph (a) is revised and paragraph (g) is 
added to read as follows:


Sec. 740.11  Applicability.

    (a) Except as provided in paragraph (g) of this section, both this 
subchapter and the pertinent State or Federal regulatory program in 
subchapter T of this chapter apply to:
* * * * *
    (g) The definition of valid existing rights in Sec. 761.5 of this 
chapter applies to any decision on a request for a determination of 
valid existing rights to conduct surface coal mining operations on the 
lands specified in Sec. 761.11(a) and (b) of this chapter.

PART 745--STATE-FEDERAL COOPERATIVE AGREEMENTS

    5. The authority citation for Part 745 continues to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq. and 30 U.S.C. 181 et seq.

    6. Section 745.10 is revised to read as follows:


Sec. 745.10  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 1029-0092. This 
information is needed to implement section 523(c) of the Act, which 
allows States to regulate surface coal mining operations on Federal 
lands under certain conditions. States that desire to enter into 
cooperative agreements to do so must respond to obtain a benefit.
    (b) OSM estimates that the public reporting burden for this part 
will average 1,364 hours per respondent, including time spent reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Send comments regarding this burden estimate 
or any other aspect of these information collection requirements, 
including suggestions for reducing the burden, to the Office of Surface 
Mining Reclamation and Enforcement, Information Collection Clearance 
Officer, 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, N.W., 
Washington, DC 20503. Please refer to OMB Control Number 1029-0092 in 
any correspondence.
    7. In Sec. 745.13, paragraphs (o) and (p) are revised to read as 
follows:


Sec. 745.13  Authority reserved by the Secretary.

* * * * *
    (o) Determine whether a person has valid existing rights to conduct 
surface coal mining operations on Federal lands within the areas 
specified in Sec. 761.11(a) and (b) of this chapter; or
    (p) Issue findings on whether there are significant recreational, 
timber, economic, or other values that may be incompatible with surface 
coal mining operations on Federal lands within a national forest, as 
specified in Sec. 761.11(b) of this chapter.

PART 761--AREAS DESIGNATED BY ACT OF CONGRESS

    8. The authority citation for Part 761 continues to read as 
follows:

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

    9. Section 761.5 is amended by removing the definition of ``surface 
coal mining operations which exist on the date of enactment,'' adding 
definitions of ``we, us, and our'' and ``you and your'' in alphabetical 
order, and revising the definition of ``valid existing rights'' to read 
as follows:


Sec. 761.5  Definitions.

* * * * *
    Valid existing rights means a set of circumstances under which a 
person may, subject to regulatory authority approval, conduct surface 
coal mining operations on lands where 30 U.S.C. 1272(e) and Sec. 761.11 
would otherwise prohibit such operations. Possession of valid existing 
rights only confers an exception from the prohibitions of Sec. 761.11 
and 30 U.S.C. 1272(e). A person seeking to exercise valid existing 
rights must comply with all other pertinent requirements of the Act and 
the applicable regulatory program.
    (a) Property rights demonstration. Except as provided in paragraph 
(c) of this definition, a person claiming valid existing rights must 
demonstrate that a legally binding conveyance, lease, deed, contract, 
or other document vests that person, or a predecessor in interest, with 
the right to conduct the type of surface coal mining operations 
intended. This right must exist at the time that the land came under 
the protection of Sec. 761.11 or 30 U.S.C. 1272(e). Applicable State 
statutory or case law will govern interpretation of documents relied 
upon to establish property rights, unless Federal law provides 
otherwise. If no applicable State law exists, custom and generally 
accepted usage at the time and place that the documents came into 
existence will govern their interpretation.
    (b) Except as provided in paragraph (c) of this definition, a 
person claiming valid existing rights also must demonstrate compliance 
with one of the following standards:
    (1) Good faith/all permits standard. All permits and other 
authorizations required to conduct surface coal mining operations had 
been obtained, or a good faith effort to obtain all necessary permits 
and authorizations had been made, before the land came under the 
protection of Sec. 761.11 or 30 U.S.C. 1272(e). At a minimum, an 
application must have been submitted for any permit required under 
subchapter G of this chapter or its State program counterpart.
    (2) Needed for and adjacent standard. The land is needed for and 
immediately adjacent to a surface coal mining operation for which all 
permits and other authorizations required to conduct surface coal 
mining operations had been obtained, or a good faith attempt to obtain 
all permits and authorizations had been made, before the land came 
under the protection of Sec. 761.11 or 30 U.S.C. 1272(e). To meet this 
standard, a person must demonstrate that prohibiting expansion of the 
operation onto that land would unfairly impact

[[Page 70832]]

the viability of the operation as originally planned before the land 
came under the protection of Sec. 761.11 or 30 U.S.C. 1272(e). Except 
for operations in existence before August 3, 1977, or for which a good 
faith effort to obtain all necessary permits had been made before 
August 3, 1977, this standard does not apply to lands already under the 
protection of Sec. 761.11 or 30 U.S.C. 1272(e) when the regulatory 
authority approved the permit for the original operation or when the 
good faith effort to obtain all necessary permits for the original 
operation was made. In evaluating whether a person meets this standard, 
the agency making the determination may consider factors such as:
    (i) The extent to which coal supply contracts or other legal and 
business commitments that predate the time that the land came under the 
protection of Sec. 761.11 or 30 U.S.C. 1272(e) depend upon use of that 
land for surface coal mining operations.
    (ii) The extent to which plans used to obtain financing for the 
operation before the land came under the protection of Sec. 761.11 or 
30 U.S.C. 1272(e) rely upon use of that land for surface coal mining 
operations.
    (iii) The extent to which investments in the operation before the 
land came under the protection of Sec. 761.11 or 30 U.S.C. 1272(e) rely 
upon use of that land for surface coal mining operations.
    (iv) Whether the land lies within the area identified on the life-
of-mine map submitted under Sec. 779.24(c) or Sec. 783.24(c) of this 
chapter before the land came under the protection of Sec. 761.11.
    (c) Roads. A person who claims valid existing rights to use or 
construct a road across the surface of lands protected by Sec. 761.11 
or 30 U.S.C. 1272(e) must demonstrate that one or more of the following 
circumstances exist if the road is included within the definition of 
``surface coal mining operations'' in Sec. 700.5 of this chapter:
    (1) The road existed when the land upon which it is located came 
under the protection of Sec. 761.11 or 30 U.S.C. 1272(e), and the 
person has a legal right to use the road for surface coal mining 
operations.
    (2) A properly recorded right of way or easement for a road in that 
location existed when the land came under the protection of Sec. 761.11 
or 30 U.S.C. 1272(e), and, under the document creating the right of way 
or easement, and under subsequent conveyances, the person has a legal 
right to use or construct a road across the right of way or easement 
for surface coal mining operations.
    (3) A valid permit for use or construction of a road in that 
location for surface coal mining operations existed when the land came 
under the protection of Sec. 761.11 or 30 U.S.C. 1272(e).
    (4) Valid existing rights exist under paragraphs (a) and (b) of 
this definition.
    We, us, and our refer to the Office of Surface Mining Reclamation 
and Enforcement.
    You and your refer to a person who claims or seeks to obtain an 
exception or waiver authorized by Sec. 761.11 or 30 U.S.C. 1272(e).
    10. Section 761.10 is added to read as follows:


Sec. 761.10  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 1029-0111. The 
regulatory authority or other responsible agency will use this 
information to determine whether a person has valid existing rights or 
qualifies for one of the other waivers or exemptions from the general 
prohibition on conducting surface coal mining operations in the areas 
listed in 30 U.S.C. 1272(e). Persons seeking to conduct surface coal 
mining operations on these lands must respond to obtain a benefit in 
accordance with 30 U.S.C. 1272(e).
    (b) We estimate that the public reporting and recordkeeping burden 
for this part will average 15 hours per response under Sec. 761.13, 0.5 
hour per response under Sec. 761.14, 2 hours per response under 
Sec. 761.15, 14 hours per response under Sec. 761.16, 2 hours per 
response under Sec. 761.17(c), and 2 hours per response under 
Sec. 761.17(d), including time spent reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. The burden for 
Sec. 761.16 includes 6 hours for the person seeking the determination 
and 8 hours for the agency processing the request. Send comments 
regarding this burden estimate or any other aspect of these information 
collection and recordkeeping requirements, including suggestions for 
reducing the burden, to the Office of Surface Mining Reclamation and 
Enforcement, Information Collection Clearance Officer, 1951 
Constitution Avenue, N.W., Washington, DC 20240; and the Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
Attention: Interior Desk Officer, 725 17th Street, N.W., Washington, DC 
20503. Please refer to OMB Control Number 1029-0111 in any 
correspondence.
    11. Sections 761.11 and 761.12 are revised and new Secs. 761.13 
through 761.17 are added to read as follows:


Sec. 761.11  Areas where surface coal mining operations are prohibited 
or limited.

    You may not conduct surface coal mining operations on the following 
lands unless you either have valid existing rights, as determined under 
Sec. 761.16, or qualify for the exception for existing operations under 
Sec. 761.12:
    (a) Any lands within the boundaries of:
    (1) The National Park System;
    (2) The National Wildlife Refuge System;
    (3) The National System of Trails;
    (4) The National Wilderness Preservation System;
    (5) The Wild and Scenic Rivers System, including study rivers 
designated under section 5(a) of the Wild and Scenic Rivers Act, 16 
U.S.C. 1276(a), or study rivers or study river corridors established in 
any guidelines issued under that Act; or
    (6) National Recreation Areas designated by Act of Congress.
    (b) Any Federal lands within a national forest. This prohibition 
does not apply if the Secretary finds that there are no significant 
recreational, timber, economic, or other values that may be 
incompatible with surface coal mining operations, and:
    (1) Any surface operations and impacts will be incident to an 
underground coal mine; or
    (2) With respect to lands that do not have significant forest cover 
within national forests west of the 100th meridian, the Secretary of 
Agriculture has determined that surface mining is in compliance with 
the Act, the Multiple-Use Sustained Yield Act of 1960, 16 U.S.C. 528-
531; the Federal Coal Leasing Amendments Act of 1975, 30 U.S.C. 181 et 
seq.; and the National Forest Management Act of 1976, 16 U.S.C. 1600 et 
seq. This provision does not apply to the Custer National Forest.
    (c) Any lands where the operation would adversely affect any 
publicly owned park or any place in the National Register of Historic 
Places. This prohibition does not apply if, as provided in 
Sec. 761.17(d), the regulatory authority and the Federal, State, or 
local agency with jurisdiction over the park or place jointly approve 
the operation.
    (d) Within 100 feet, measured horizontally, of the outside right-
of-way line of any public road. This prohibition does not apply:
    (1) Where a mine access or haul road joins a public road, or

[[Page 70833]]

    (2) When, as provided in Sec. 761.14, the regulatory authority (or 
the appropriate public road authority designated by the regulatory 
authority) allows the public road to be relocated or closed, or the 
area within the protected zone to be affected by the surface coal 
mining operation, after:
    (i) Providing public notice and opportunity for a public hearing; 
and
    (ii) Finding in writing that the interests of the affected public 
and landowners will be protected.
    (e) Within 300 feet, measured horizontally, of any occupied 
dwelling. This prohibition does not apply when:
    (1) The owner of the dwelling has provided a written waiver 
consenting to surface coal mining operations within the protected zone, 
as provided in Sec. 761.15; or
    (2) The part of the operation to be located closer than 300 feet to 
the dwelling is an access or haul road that connects with an existing 
public road on the side of the public road opposite the dwelling.
    (f) Within 300 feet, measured horizontally, of any public building, 
school, church, community or institutional building, or public park.
    (g) Within 100 feet, measured horizontally, of a cemetery. This 
prohibition does not apply if the cemetery is relocated in accordance 
with all applicable laws and regulations.


Sec. 761.12  Exception for existing operations.

    The prohibitions and limitations of Sec. 761.11 do not apply to:
    (a) Surface coal mining operations for which a valid permit, issued 
under Subchapter G of this chapter or an approved State regulatory 
program, exists when the land comes under the protection of 
Sec. 761.11. This exception applies only to lands within the permit 
area as it exists when the land comes under the protection of 
Sec. 761.11.
    (b) With respect to operations subject to Subchapter B of this 
chapter, lands upon which validly authorized surface coal mining 
operations exist when the land comes under the protection of 30 U.S.C. 
1272(e) or Sec. 761.11.


Sec. 761.13  Procedures for compatibility findings for surface coal 
mining operations on Federal lands in national forests.

    (a) If you intend to rely upon the exception provided in 
Sec. 761.11(b) to conduct surface coal mining operations on Federal 
lands within a national forest, you must request that we obtain the 
Secretarial findings required by Sec. 761.11(b).
    (b) You may submit a request to us before preparing and submitting 
an application for a permit or boundary revision. If you do, you must 
explain how the proposed operation would not damage the values listed 
in the definition of ``significant recreational, timber, economic, or 
other values incompatible with surface coal mining operations'' in 
Sec. 761.5. You must include a map and sufficient information about the 
nature of the proposed operation for the Secretary to make adequately 
documented findings. We may request that you provide any additional 
information that we determine is needed to make the required findings.
    (c) When a proposed surface coal mining operation or proposed 
boundary revision for an existing surface coal mining operation 
includes Federal lands within a national forest, the regulatory 
authority may not issue the permit or approve the boundary revision 
before the Secretary makes the findings required by Sec. 761.11(b).


Sec. 761.14  Procedures for relocating or closing a public road or 
waiving the prohibition on surface coal mining operations within the 
buffer zone of a public road.

    (a) This section does not apply to:
    (1) Lands for which a person has valid existing rights, as 
determined under Sec. 761.16.
    (2) Lands within the scope of the exception for existing operations 
in Sec. 761.12.
    (3) Access or haul roads that join a public road, as described in 
Sec. 761.11(d)(1).
    (b) You must obtain any necessary approvals from the authority with 
jurisdiction over the road if you propose to:
    (1) Relocate a public road;
    (2) Close a public road; or
    (3) Conduct surface coal mining operations within 100 feet, 
measured horizontally, of the outside right-of-way line of a public 
road.
    (c) Before approving an action proposed under paragraph (b) of this 
section, the regulatory authority, or a public road authority that it 
designates, must determine that the interests of the public and 
affected landowners will be protected. Before making this 
determination, the authority must:
    (1) Provide a public comment period and opportunity to request a 
public hearing in the locality of the proposed operation;
    (2) If a public hearing is requested, publish appropriate advance 
notice at least two weeks before the hearing in a newspaper of general 
circulation in the affected locality; and
    (3) Based upon information received from the public, make a written 
finding as to whether the interests of the public and affected 
landowners will be protected. If a hearing was held, the authority must 
make this finding within 30 days after the hearing. If no hearing was 
held, the authority must make this finding within 30 days after the end 
of the public comment period.


Sec. 761.15  Procedures for waiving the prohibition on surface coal 
mining operations within the buffer zone of an occupied dwelling.

    (a) This section does not apply to:
    (1) Lands for which a person has valid existing rights, as 
determined under Sec. 761.16.
    (2) Lands within the scope of the exception for existing operations 
in Sec. 761.12.
    (3) Access or haul roads that connect with an existing public road 
on the side of the public road opposite the dwelling, as provided in 
Sec. 761.11(e)(2).
    (b) If you propose to conduct surface coal mining operations within 
300 feet, measured horizontally, of any occupied dwelling, the permit 
application must include a written waiver by lease, deed, or other 
conveyance from the owner of the dwelling. The waiver must clarify that 
the owner and signator had the legal right to deny mining and knowingly 
waived that right. The waiver will act as consent to surface coal 
mining operations within a closer distance of the dwelling as 
specified.
    (c) If you obtained a valid waiver before August 3, 1977, from the 
owner of an occupied dwelling to conduct operations within 300 feet of 
the dwelling, you need not submit a new waiver.
    (d) If you obtain a valid waiver from the owner of an occupied 
dwelling, that waiver will remain effective against subsequent 
purchasers who had actual or constructive knowledge of the existing 
waiver at the time of purchase. A subsequent purchaser will be deemed 
to have constructive knowledge if the waiver has been properly filed in 
public property records pursuant to State laws or if surface coal 
mining operations have entered the 300-foot zone before the date of 
purchase.


Sec. 761.16  Submission and processing of requests for valid existing 
rights determinations.

    (a) Basic framework for valid existing rights determinations. The 
following table identifies the agency responsible for making a valid 
existing rights determination and the definition that it must use, 
based upon which paragraph of Sec. 761.11 applies and whether the 
request includes Federal lands.

[[Page 70834]]



----------------------------------------------------------------------------------------------------------------
                                                 Type of land to       Agency
  Paragraph of Sec.  761.11        Protected      which  request  responsible for     Applicable definition of
   that provides protection         feature          pertains       determination      valid existing rights
----------------------------------------------------------------------------------------------------------------
(a)..........................  National parks,   Federal........  OSM............  Federal \1\
                                wildlife
                                refuges, etc..
(a)..........................  National parks,   Non-Federal....  Regulatory       Federal \1\
                                wildlife                           authority.
                                refuges, etc..
(b)..........................  Federal lands in  Federal........  OSM............  Federal \1\
                                national
                                forests \3\.
(c)..........................  Public parks and  Does not matter  Regulatory       Regulatory program \2\
                                historic places.                   authority.
(d)..........................  Public roads....  Does not matter  Regulatory       Regulatory program \2\
                                                                   authority.
(e)..........................  Occupied          Does not matter  Regulatory       Regulatory program \2\
                                dwellings.                         authority.
(f)..........................  Schools,          Does not matter  Regulatory       Regulatory program \2\
                                churches,                          authority.
                                parks, etc..
(g)..........................  Cemeteries......  Does not matter  Regulatory       Regulatory program \2\
                                                                   authority.
----------------------------------------------------------------------------------------------------------------
\1\ Definition in 30 CFR 761.5.
\2\ Definition in applicable State or Federal regulatory program under 30 CFR Chapter VII, Subchapter T.
\3\ Neither 30 U.S.C. 1272(e) nor 30 CFR 761.11 provides special protection for non-Federal lands within
  national forests. Therefore, this table does not include a category for those lands.

    (b) What you must submit as part of a request for a valid existing 
rights determination. You must submit a request for a valid existing 
rights determination to the appropriate agency under paragraph (a) of 
this section if you intend to conduct surface coal mining operations on 
the basis of valid existing rights under Sec. 761.11 or wish to confirm 
the right to do so. You may submit this request before preparing and 
submitting an application for a permit or boundary revision for the 
land, unless the applicable regulatory program provides otherwise.
    (1) Requirements for property rights demonstration. You must 
provide a property rights demonstration under paragraph (a) of the 
definition of valid existing rights in Sec. 761.5 if your request 
relies upon the good faith/all permits standard or the needed for and 
adjacent standard in paragraph (b) of the definition of valid existing 
rights in Sec. 761.5. This demonstration must include the following 
items:
    (i) A legal description of the land to which your request pertains.
    (ii) Complete documentation of the character and extent of your 
current interests in the surface and mineral estates of the land to 
which your request pertains.
    (iii) A complete chain of title for the surface and mineral estates 
of the land to which your request pertains.
    (iv) A description of the nature and effect of each title 
instrument that forms the basis for your request, including any 
provision pertaining to the type or method of mining or mining-related 
surface disturbances and facilities.
    (v) A description of the type and extent of surface coal mining 
operations that you claim the right to conduct, including the method of 
mining, any mining-related surface activities and facilities, and an 
explanation of how those operations would be consistent with State 
property law.
    (vi) Complete documentation of the nature and ownership, as of the 
date that the land came under the protection of Sec. 761.11 or 30 
U.S.C. 1272(e), of all property rights for the surface and mineral 
estates of the land to which your request pertains.
    (vii) Names and addresses of the current owners of the surface and 
mineral estates of the land to which your request pertains.
    (viii) If the coal interests have been severed from other property 
interests, documentation that you have notified and provided reasonable 
opportunity for the owners of other property interests in the land to 
which your request pertains to comment on the validity of your property 
rights claims.
    (ix) Any comments that you receive in response to the notification 
provided under paragraph (b)(1)(viii) of this section.
    (2) Requirements for good faith/all permits standard. If your 
request relies upon the good faith/all permits standard in paragraph 
(b)(1) of the definition of valid existing rights in Sec. 761.5, you 
must submit the information required under paragraph (b)(1) of this 
section. You also must submit the following information about permits, 
licenses, and authorizations for surface coal mining operations on the 
land to which your request pertains:
    (i) Approval and issuance dates and identification numbers for any 
permits, licenses, and authorizations that you or a predecessor in 
interest obtained before the land came under the protection of 
Sec. 761.11 or 30 U.S.C. 1272(e).
    (ii) Application dates and identification numbers for any permits, 
licenses, and authorizations for which you or a predecessor in interest 
submitted an application before the land came under the protection of 
Sec. 761.11 or 30 U.S.C. 1272(e).
    (iii) An explanation of any other good faith effort that you or a 
predecessor in interest made to obtain the necessary permits, licenses, 
and authorizations as of the date that the land came under the 
protection of Sec. 761.11 or 30 U.S.C. 1272(e).
    (3) Requirements for needed for and adjacent standard. If your 
request relies upon the needed for and adjacent standard in paragraph 
(b)(2) of the definition of valid existing rights in Sec. 761.5, you 
must submit the information required under paragraph (b)(1) of this 
section. In addition, you must explain how and why the land is needed 
for and immediately adjacent to the operation upon which your request 
is based, including a demonstration that prohibiting expansion of the 
operation onto that land would unfairly impact the viability of the 
operation as originally planned before the land came under the 
protection of Sec. 761.11 or 30 U.S.C. 1272(e).
    (4) Requirements for standards for mine roads. If your request 
relies upon one of the standards for roads in paragraphs (c)(1) through 
(c)(3) of the definition of valid existing rights in Sec. 761.5, you 
must submit satisfactory documentation that:
    (i) The road existed when the land upon which it is located came 
under the protection of Sec. 761.11 or 30 U.S.C. 1272(e), and you have 
a legal right to use the road for surface coal mining operations;
    (ii) A properly recorded right of way or easement for a road in 
that location existed when the land came under the protection of 
Sec. 761.11 or 30 U.S.C. 1272(e), and, under the document creating the 
right of way or easement, and under any subsequent conveyances, you 
have a legal right to use or construct

[[Page 70835]]

a road across that right of way or easement to conduct surface coal 
mining operations; or
    (iii) A valid permit for use or construction of a road in that 
location for surface coal mining operations existed when the land came 
under the protection of Sec. 761.11 or 30 U.S.C. 1272(e).
    (c) Initial review of request. (1) The agency must conduct an 
initial review to determine whether your request includes all 
applicable components of the submission requirements of paragraph (b) 
of this section. This review pertains only to the completeness of the 
request, not the legal or technical adequacy of the materials 
submitted.
    (2) If your request does not include all applicable components of 
the submission requirements of paragraph (b) of this section, the 
agency must notify you and establish a reasonable time for submission 
of the missing information.
    (3) When your request includes all applicable components of the 
submission requirements of paragraph (b) of this section, the agency 
must implement the notice and comment requirements of paragraph (d) of 
this section.
    (4) If you do not provide information that the agency requests 
under paragraph (c)(2) of this section within the time specified or as 
subsequently extended, the agency must issue a determination that you 
have not demonstrated valid existing rights, as provided in paragraph 
(e)(4) of this section.
    (d) Notice and comment requirements and procedures. (1) When your 
request satisfies the completeness requirements of paragraph (c) of 
this section, the agency must publish a notice in a newspaper of 
general circulation in the county in which the land is located. This 
notice must invite comment on the merits of the request. Alternatively, 
the agency may require that you publish this notice and provide the 
agency with a copy of the published notice. We will publish a similar 
notice in the Federal Register if your request involves Federal lands 
within an area listed in Sec. 761.11(a) or (b). Each notice must 
include:
    (i) The location of the land to which the request pertains.
    (ii) A description of the type of surface coal mining operations 
planned.
    (iii) A reference to and brief description of the applicable 
standard(s) under the definition of valid existing rights in 
Sec. 761.5.
    (A) If your request relies upon the good faith/all permits standard 
or the needed for and adjacent standard in paragraph (b) of the 
definition of valid existing rights in Sec. 761.5, the notice also must 
include a description of the property rights that you claim and the 
basis for your claim.
    (B) If your request relies upon the standard in paragraph (c)(1) of 
the definition of valid existing rights in Sec. 761.5, the notice also 
must include a description of the basis for your claim that the road 
existed when the land came under the protection of Sec. 761.11 or 30 
U.S.C. 1272(e). In addition, the notice must include a description of 
the basis for your claim that you have a legal right to use that road 
for surface coal mining operations.
    (C) If your request relies upon the standard in paragraph (c)(2) of 
the definition of valid existing rights in Sec. 761.5, the notice also 
must include a description of the basis for your claim that a properly 
recorded right of way or easement for a road in that location existed 
when the land came under the protection of Sec. 761.11 or 30 U.S.C. 
1272(e). In addition, the notice must include a description of the 
basis for your claim that, under the document creating the right of way 
or easement, and under any subsequent conveyances, you have a legal 
right to use or construct a road across the right of way or easement to 
conduct surface coal mining operations.
    (iv) If your request relies upon one or more of the standards in 
paragraphs (b), (c)(1), and (c)(2) of the definition of valid existing 
rights in Sec. 761.5, a statement that the agency will not make a 
decision on the merits of your request if, by the close of the comment 
period under this notice or the notice required by paragraph (d)(3) of 
this section, a person with a legal interest in the land initiates 
appropriate legal action in the proper venue to resolve any differences 
concerning the validity or interpretation of the deed, lease, easement, 
or other documents that form the basis of your claim.
    (v) A description of the procedures that the agency will follow in 
processing your request.
    (vi) The closing date of the comment period, which must be a 
minimum of 30 days after the publication date of the notice.
    (vii) A statement that interested persons may obtain a 30-day 
extension of the comment period upon request.
    (viii) The name and address of the agency office where a copy of 
the request is available for public inspection and to which comments 
and requests for extension of the comment period should be sent.
    (2) The agency must promptly provide a copy of the notice required 
under paragraph (d)(1) of this section to:
    (i) All reasonably locatable owners of surface and mineral estates 
in the land included in your request.
    (ii) The owner of the feature causing the land to come under the 
protection of Sec. 761.11, and, when applicable, the agency with 
primary jurisdiction over the feature with respect to the values 
causing the land to come under the protection of Sec. 761.11. For 
example, both the landowner and the State Historic Preservation Officer 
must be notified if surface coal mining operations would adversely 
impact any site listed on the National Register of Historic Places. As 
another example, both the surface owner and the National Park Service 
must be notified if the request includes non-Federal lands within the 
authorized boundaries of a unit of the National Park System.
    (3) The letter transmitting the notice required under paragraph 
(d)(2) of this section must provide a 30-day comment period, starting 
from the date of service of the letter, and specify that another 30 
days is available upon request. At its discretion, the agency 
responsible for the determination of valid existing rights may grant 
additional time for good cause upon request. The agency need not 
necessarily consider comments received after the closing date of the 
comment period.
    (e) How a decision will be made. (1) The agency responsible for 
making the determination of valid existing rights must review the 
materials submitted under paragraph (b) of this section, comments 
received under paragraph (d) of this section, and any other relevant, 
reasonably available information to determine whether the record is 
sufficiently complete and adequate to support a decision on the merits 
of the request. If not, the agency must notify you in writing, 
explaining the inadequacy of the record and requesting submittal, 
within a specified reasonable time, of any additional information that 
the agency deems necessary to remedy the inadequacy.
    (2) Once the record is complete and adequate, the responsible 
agency must determine whether you have demonstrated valid existing 
rights. The decision document must explain how you have or have not 
satisfied all applicable elements of the definition of valid existing 
rights in Sec. 761.5. It must contain findings of fact and conclusions, 
and it must specify the reasons for the conclusions.
    (3) Impact of property rights disagreements. This paragraph applies 
only when your request relies upon one

[[Page 70836]]

or more of the standards in paragraphs (b), (c)(1), and (c)(2) of the 
definition of valid existing rights in Sec. 761.5.
    (i) The agency must issue a determination that you have not 
demonstrated valid existing rights if your property rights claims are 
the subject of pending litigation in a court or administrative body 
with jurisdiction over the property rights in question. The agency will 
make this determination without prejudice, meaning that you may refile 
the request once the property rights dispute is finally adjudicated. 
This paragraph applies only to situations in which legal action has 
been initiated as of the closing date of the comment period under 
paragraph (d)(1) or (d)(3) of this section.
    (ii) If the record indicates disagreement as to the accuracy of 
your property rights claims, but this disagreement is not the subject 
of pending litigation in a court or administrative agency of competent 
jurisdiction, the agency must evaluate the merits of the information in 
the record and determine whether you have demonstrated that the 
requisite property rights exist under paragraph (a), (c)(1), or (c)(2) 
of the definition of valid existing rights in Sec. 761.5, as 
appropriate. The agency must then proceed with the decision process 
under paragraph (e)(2) of this section.
    (4) The agency must issue a determination that you have not 
demonstrated valid existing rights if you do not submit information 
that the agency requests under paragraph (c)(2) or (e)(1) of this 
section within the time specified or as subsequently extended. The 
agency will make this determination without prejudice, meaning that you 
may refile a revised request at any time.
    (5) After making a determination, the agency must:
    (i) Provide a copy of the determination, together with an 
explanation of appeal rights and procedures, to you, to the owner or 
owners of the land to which the determination applies, to the owner of 
the feature causing the land to come under the protection of 
Sec. 761.11, and, when applicable, to the agency with primary 
jurisdiction over the feature with respect to the values that caused 
the land to come under the protection of Sec. 761.11.
    (ii) Publish notice of the determination in a newspaper of general 
circulation in the county in which the land is located. Alternatively, 
the agency may require that you publish this notice and provide a copy 
of the published notice to the agency. We will publish the 
determination, together with an explanation of appeal rights and 
procedures, in the Federal Register if your request includes Federal 
lands within an area listed in Sec. 761.11(a) or (b).
    (f) Administrative and judicial review. A determination that you 
have or do not have valid existing rights is subject to administrative 
and judicial review under Secs. 775.11 and 775.13 of this chapter.
    (g) Availability of records. The agency responsible for processing 
a request subject to notice and comment under paragraph (d) of this 
section must make a copy of that request available to the public in the 
same manner as the agency, when acting as the regulatory authority, 
must make permit applications available to the public under 
Sec. 773.13(d) of this chapter. In addition, the agency must make 
records associated with that request, and any subsequent determination 
under paragraph (e) of this section, available to the public in 
accordance with the requirements and procedures of Sec. 840.14 or 
Sec. 842.16 of this chapter.


Sec. 761.17  Regulatory authority obligations at time of permit 
application review.

    (a) Upon receipt of an administratively complete application for a 
permit for a surface coal mining operation, or an administratively 
complete application for revision of the boundaries of a surface coal 
mining operation permit, the regulatory authority must review the 
application to determine whether the proposed surface coal mining 
operation would be located on any lands protected under Sec. 761.11.
    (b) The regulatory authority must reject any portion of the 
application that would locate surface coal mining operations on land 
protected under Sec. 761.11 unless:
    (1) The site qualifies for the exception for existing operations 
under Sec. 761.12;
    (2) A person has valid existing rights for the land, as determined 
under Sec. 761.16;
    (3) The applicant obtains a waiver or exception from the 
prohibitions of Sec. 761.11 in accordance with Secs. 761.13 through 
761.15; or
    (4) For lands protected by Sec. 761.11(c), both the regulatory 
authority and the agency with jurisdiction over the park or place 
jointly approve the proposed operation in accordance with paragraph (d) 
of this section.
    (c) Location verification. If the regulatory authority has 
difficulty determining whether an application includes land within an 
area specified in Sec. 761.11(a) or within the specified distance from 
a structure or feature listed in Sec. 761.11(f) or (g), the regulatory 
authority must request that the Federal, State, or local governmental 
agency with jurisdiction over the protected land, structure, or feature 
verify the location.
    (1) The request for location verification must:
    (i) Include relevant portions of the permit application.
    (ii) Provide the agency with 30 days after receipt to respond, with 
a notice that another 30 days is available upon request.
    (iii) Specify that the regulatory authority will not necessarily 
consider a response received after the comment period provided under 
paragraph (c)(1)(ii) of this section.
    (2) If the agency does not respond in a timely manner, the 
regulatory authority may make the necessary determination based on 
available information.
    (d) Procedures for joint approval of surface coal mining operations 
that will adversely affect publicly owned parks or historic places.
    (1) If the regulatory authority determines that the proposed 
surface coal mining operation will adversely affect any publicly owned 
park or any place included in the National Register of Historic Places, 
the regulatory authority must request that the Federal, State, or local 
agency with jurisdiction over the park or place either approve or 
object to the proposed operation. The request must:
    (i) Include a copy of applicable parts of the permit application.
    (ii) Provide the agency with 30 days after receipt to respond, with 
a notice that another 30 days is available upon request.
    (iii) State that failure to interpose an objection within the time 
specified under paragraph (d)(1)(ii) of this section will constitute 
approval of the proposed operation.
    (2) The regulatory authority may not issue a permit for a proposed 
operation subject to paragraph (d)(1) of this section unless all 
affected agencies jointly approve.
    (3) Paragraphs (d)(1) and (d)(2) of this section do not apply to:
    (i) Lands for which a person has valid existing rights, as 
determined under Sec. 761.16.
    (ii) Lands within the scope of the exception for existing 
operations in Sec. 761.12.

PART 762--CRITERIA FOR DESIGNATING AREAS AS UNSUITABLE FOR SURFACE 
COAL MINING OPERATIONS

    12. The authority citation for part 762 is revised to read as 
follows:


[[Page 70837]]


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

    13. Section 762.14 is redesignated as Sec. 762.15 and a new 
Sec. 762.14 is added to read as follows:


Sec. 762.14  Applicability to lands designated as unsuitable by 
Congress.

    Pursuant to appropriate petitions, lands listed in Sec. 761.11 of 
this chapter are subject to designation as unsuitable for all or 
certain types of surface coal mining operations under this part and 
parts 764 and 769 of this chapter.

PART 772--REQUIREMENTS FOR COAL EXPLORATION

    14. The authority citation for part 772 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq. and 16 U.S.C. 470 et seq.

    15. Section 772.10 is revised to read as follows:


Sec. 772.10  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 and 
recordkeeping requirements of this part. The OMB clearance number is 
1029-0112. OSM and State regulatory authorities use the information 
collected under this part to maintain knowledge of coal exploration 
activities, evaluate the need for an exploration permit, and ensure 
that exploration activities comply with the environmental protection, 
public participation, and reclamation requirements of parts 772 and 815 
of this chapter and 30 U.S.C. 1262. Persons seeking to conduct coal 
exploration must respond to obtain a benefit.
    (b) OSM estimates that the combined public reporting and 
recordkeeping burden for all respondents under this part will average 
11 hours per notice or application submitted, including time spent 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Specifically, OSM estimates that preparation 
of a notice of intent to explore under Sec. 772.11 will require an 
average of 10 hours per notice, preparation and processing of an 
application for coal exploration under Sec. 772.12 will require an 
average of 103 hours per application, compliance with Sec. 772.14 will 
require an average of 18 hours per application, and recordkeeping and 
information collection under Sec. 772.15 will require an average of 
approximately 1 hour per response. Send comments regarding this burden 
estimate or any other aspect of these information collection 
requirements, including suggestions for reducing the burden, to the 
Office of Surface Mining Reclamation and Enforcement, Information 
Collection Clearance Officer, 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, N.W., Washington, DC 20503. Please refer to 
OMB Control Number 1029-0112 in any correspondence.
    16. Section 772.12 is amended by revising the section heading, 
adding paragraph (b)(14), revising paragraphs (d)(2)(ii) and 
(d)(2)(iii), and adding paragraph (d)(2)(iv) to read as follows:


Sec. 772.12  Permit requirements for exploration that will remove more 
than 250 tons of coal or that will occur on lands designated as 
unsuitable for surface coal mining operations.

* * * * *
    (b) * * *
    (14) For any lands listed in Sec. 761.11 of this chapter, a 
demonstration that, to the extent technologically and economically 
feasible, the proposed exploration activities have been designed to 
minimize interference with the values for which those lands were 
designated as unsuitable for surface coal mining operations. The 
application must include documentation of consultation with the owner 
of the feature causing the land to come under the protection of 
Sec. 761.11 of this chapter, and, when applicable, with the agency with 
primary jurisdiction over the feature with respect to the values that 
caused the land to come under the protection of Sec. 761.11 of this 
chapter.
* * * * *
    (d) * * *
    (2) * * *
    (ii) Not jeopardize the continued existence of an endangered or 
threatened species listed pursuant to section 4 of the Endangered 
Species Act of 1973, 16 U.S.C. 1533, or result in the destruction or 
adverse modification of critical habitat of those species;
    (iii) Not adversely affect any cultural or historical resources 
listed on the National Register of Historic Places pursuant to the 
National Historic Preservation Act, 16 U.S.C. 470 et seq., unless the 
proposed exploration has been approved by both the regulatory authority 
and the agency with jurisdiction over the resources to be affected; and
    (iv) With respect to exploration activities on any lands protected 
under Sec. 761.11 of this chapter, minimize interference, to the extent 
technologically and economically feasible, with the values for which 
those lands were designated as unsuitable for surface coal mining 
operations. Before making this finding, the regulatory authority must 
provide reasonable opportunity to the owner of the feature causing the 
land to come under the protection of Sec. 761.11 of this chapter, and, 
when applicable, to the agency with primary jurisdiction over the 
feature with respect to the values that caused the land to come under 
the protection of Sec. 761.11 of this chapter, to comment on whether 
the finding is appropriate.
* * * * *

PART 773--REQUIREMENTS FOR PERMITS AND PERMIT PROCESSING

    17. The authority citation for Part 773 is revised to read as 
follows:

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

Sec. 773.13  [Amended]

    18. In paragraph (a)(1)(v) of Sec. 773.13, ``Sec. 761.12(d)'' is 
revised to read ``Sec. 761.14''.
    19. In Sec. 773.15, paragraph (c)(3)(ii) is revised to read as 
follows:


Sec. 773.15  Review of permit applications.

* * * * *
    (c) * * *
    (3) * * *
    (ii) Not within an area designated as unsuitable for surface coal 
mining operations under parts 762 and 764 or 769 of this chapter or 
within an area subject to the prohibitions of Sec. 761.11 of this 
chapter.

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

    20. The authority citation for Part 778 is revised to read as 
follows:

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

    21. In Sec. 778.16, paragraph (c) is revised to read as follows:


Sec. 778.16  Status of unsuitability claims.

* * * * *
    (c) An application that proposes to conduct surface coal mining 
operations within 100 feet of a public road or within 300 feet of an 
occupied dwelling must meet the requirements of Sec. 761.14 or 
Sec. 761.15 of this chapter, respectively.

[[Page 70838]]

PART 780--SURFACE MINING PERMIT APPLICATIONS--MINIMUM REQUIREMENTS 
FOR RECLAMATION AND OPERATION PLAN

    22. The authority citation for part 780 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq. and 16 U.S.C. 470 et seq.

    23. In Sec. 780.31, the section heading and paragraph (a)(2) are 
revised to read as follows:


Sec. 780.31  Protection of publicly owned parks and historic places.

    (a) * * *
    (2) If a person has valid existing rights, as determined under 
Sec. 761.16 of this chapter, or if joint agency approval is to be 
obtained under Sec. 761.17(d) of this chapter, to minimize adverse 
impacts.
* * * * *


Sec. 780.33  [Amended]

    24. In Sec. 780.33, ``30 CFR 761.12(d)'' is revised to read 
``Sec. 761.14 of this chapter''.

PART 784--UNDERGROUND MINING PERMIT APPLICATIONS--MINIMUM 
REQUIREMENTS FOR RECLAMATION AND OPERATION PLAN

    25. The authority citation for part 784 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq. and 16 U.S.C. 470 et seq.

    26. In Sec. 784.17, the section heading and paragraph (a)(2) are 
revised to read as follows:


Sec. 784.17  Protection of publicly owned parks and historic places.

    (a) * * *
    (2) If a person has valid existing rights, as determined under 
Sec. 761.16 of this chapter, or if joint agency approval is to be 
obtained under Sec. 761.17(d) of this chapter, to minimize adverse 
impacts.


Sec. 784.18  [Amended]

    27. In Sec. 784.18:
    a. In the introductory paragraph, ``30 CFR 761.12(d)'' is revised 
to read ``Sec. 761.14 of this chapter''; and
    b. In paragraph (a), ``underground mining activities'' is revised 
to read ``surface coal mining operations.''

[FR Doc. 99-30892 Filed 12-16-99; 8:45 am]
BILLING CODE 4310-05-p