[Federal Register Volume 66, Number 158 (Wednesday, August 15, 2001)]
[Rules and Regulations]
[Pages 42743-42750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20447]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 914

[SPATS No. IN-151-FOR]


Indiana Regulatory Program

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

ACTION: Final rule; decision on amendment.

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SUMMARY: The Office of Surface Mining Reclamation and Enforcement (OSM) 
is not approving an amendment to the Indiana regulatory program 
(Indiana program) under the Surface Mining Control and Reclamation Act 
of 1977 (SMCRA or the Act). Indiana proposed the addition of a statute 
concerning post mining land use changes as nonsignificant permit 
revisions. Indiana intended to revise its program to improve 
operational efficiency.

EFFECTIVE DATE: August 15, 2001.

FOR FURTHER INFORMATION CONTACT: Andrew R. Gilmore, Director, 
Indianapolis Field Office, Office of Surface Mining, Minton-Capehart 
Federal Building, 575 North Pennsylvania Street, Room 301, 
Indianapolis, Indiana 46204-1521. Telephone (317) 226-6700. Internet: 
[email protected].

SUPPLEMENTARY INFORMATION:

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

I. Background on the Indiana Program

    Section 503(a) of the Act permits a State to assume primacy for the 
regulation of surface coal mining and reclamation operations on non-
Federal and non-Indian lands within its borders by demonstrating that 
its State program includes, among other things, ``a State law which 
provides for the regulation of surface coal mining and reclamation 
operations in accordance with the requirements of the Act * * *'' and 
``rules and regulations consistent with regulations issued by the 
Secretary'' pursuant to the Act. See 30 U.S.C. 1253(a)(1) and (7). On 
the basis of these criteria, the Secretary of the Interior 
conditionally approved the Indiana program on July 29, 1982. You can 
find background information on the Indiana program, including the 
Secretary's findings, the disposition of comments, and the conditions 
of approval in the July 26, 1982, Federal Register (47 FR 32107). You 
can find later actions on the Indiana program at 30 CFR 914.10, 914.15, 
914.16, and 914.17.

II. Submission of the Amendment

    By letter dated May 14, 1998 (Administrative Record No. IND-1606), 
Indiana submitted a proposed amendment to OSM in accordance with SMCRA. 
The proposed amendment concerned revisions of and additions to the 
Indiana Code (IC) made by House Enrolled Act (HEA) No. 1074. Indiana 
intended to revise its program to incorporate the additional 
flexibility afforded by SMCRA and to provide the guidelines for permit 
revisions, including incidental boundary revisions. We announced 
receipt of the proposed amendment in the May 29, 1998, Federal Register 
(63 FR 29365), and invited public comment on its adequacy. The public 
comment period for the amendment closed June 29, 1998. During our 
review of the proposed amendment, we identified concerns relating to 
the proposed amendment. We notified Indiana of these concerns by letter 
dated September 15, 1998 (Administrative Record No. IND-1621). By 
letter dated December 21, 1998 (Administrative Record No. IND-1627), 
Indiana responded to our concerns by submitting additional explanatory 
information. Because Indiana did not make any substantive revisions to 
the amendment, we did not reopen the public comment period. On March 
16, 1999, we approved Indiana's proposed amendment, with three 
exceptions (64 FR 12890). Specifically, we did not approve the 
amendment at IC 14-34-5-7(a) concerning guidance for permit revisions; 
the amendment at IC 14-34-5-8.2(4) concerning postmining land use 
changes; and the amendment at IC 14-34-5-8.4(c)(2)(K) concerning minor 
field revisions for temporary cessation of mining. On May 26, 1999, at 
Indiana's request, we provided clarification of our decision on 
Indiana's amendment (64 FR 28362).
    On May 14, 1999, the Indiana Coal Council (ICC) filed a complaint 
in the United States District Court, Southern District of Indiana, to 
challenge our decision not to approve the proposed Indiana program 
amendments at IC 14-34-5-7(a) and IC 14-34-5-8.2(4). Indiana Coal 
Council v. Babbitt, No. IP 99-0705-C-M/S, (S. D. Ind.). On September 
25, 2000, the Court issued its decision on the ICC's complaint. The 
Court found that, in the case of IC 14-34-5-7(a) concerning guidance 
for permit revisions, OSM was not arbitrary and capricious in not 
approving the amendment. Therefore, the Court upheld our decision. 
However, in the case of IC 14-34-5-8.2(4) concerning postmining land 
use changes, the Court found that our decision was arbitrary and 
capricious, and remanded the matter to OSM for ``further 
consideration.'' In accordance with the Court's ruling, we opened the 
public comment period for section IC 14-34-5-8.2(4) of Indiana's 
proposed amendment submitted on May 14, 1998, in the January 11, 2001, 
Federal Register (66 FR 2374). In the same document, we provided an 
opportunity for a public hearing or meeting on the adequacy of the 
amendment. The public comment period closed on February 12, 2001. We 
received comments from two industry groups and one Federal agency. 
However, because no one requested a public hearing or meeting, we did 
not hold one.

III. Director's Findings

    Following, under SMCRA and the Federal regulations at 30 CFR 732.15 
and 732.17, are the Director of OSM's findings concerning the proposed 
amendment to the Indiana program.

[[Page 42744]]

A. Indiana's Proposed Amendment at IC-14-34-5-8.2(4)

    Indiana's proposed amendment at IC 14-34-5-8.2(4) provides that a 
proposed permit revision is nonsignificant, and therefore not subject 
to the notice and hearing requirements of IC 14-34, if it is a 
postmining land use change other than a change described in IC 14-34-5-
8.1(8). IC 14-34-5-8.1(8) provides that a proposed permit revision is 
significant if a postmining land use will be changed to a residential 
land use, a commercial or industrial land use, a recreational land use, 
or developed water resources meeting MSHA requirements for a 
significant impoundment.

B. Summary of the Court's Decision

    In the U.S. District Court case, the ICC argued that our original 
decision not to approve IC 14-34-5-8.2(4) was arbitrary and capricious 
for two reasons: (1) Because we offered conflicting reasons for our 
decision; and (2) because we gave no reason for distinguishing 
Indiana's definition of a significant permit revision from the nearly 
identical program we approved for Tennessee.
    In evaluating whether we offered conflicting reasons for our 
decision, the Court stated that it did appear that we had changed our 
position as to whether the Director of the Indiana Department of 
Natural Resources (IDNR) retained discretion to determine if a proposed 
permit revision concerning a postmining land use change is significant. 
But, the Court stated that our ultimate conclusion--that the amendment 
was inconsistent with the Act because it would allow for certain 
significant changes to be made without notice and hearing 
requirements--never changed. Thus, the Court found that we had not been 
arbitrary and capricious just because we changed our position as it 
concerned the INDR Director's discretion.
    However, the Court found that we did not distinguish Indiana's 
definition of a significant permit revision from the definition in the 
Tennessee program. The Court concluded that, by adding the provision at 
IC 14-34-5-8.2(4), Indiana made its program essentially the same as the 
Tennessee program by providing that if a change did not fall under the 
definition of significant, it was nonsignificant. Specifically, the 
Court stated that ``it appears that the Tennessee and Indiana statutes 
would dictate the same results with respect to classifying certain 
postmining land use changes as either significant or nonsignificant.'' 
In the case of the example we used in our March 16, 1999, decision--a 
change from cropland to forest--the Court states, ``[a]ssuming such 
change would be significant, it is not one of the changes listed in 
Tennessee's approved definition of `significant.' Thus, by default, it 
would be `nonsignificant' under the Tennessee program''--just as it 
would under the Indiana program. Indiana Coal Council v. Babbit, No IP 
99-0705-C-M/S, slip op. at 14, (S. D. Ind., Sept. 25, 2000). Thus, it 
appeared to the Court that the existing Tennessee program and the 
proposed Indiana amendment would dictate the same results with respect 
to classifying certain postmining land use changes as significant or 
nonsignificant. The Court stated that we provided no explanation for 
not approving Indiana's statute when we had a regulation under the 
Tennessee program that was nearly identical. Because it appeared that 
we departed from our prior rulings and failed to explain why, the Court 
found that our ruling was arbitrary and capricious.

C. Analysis of the Court's Decision

    The existing Tennessee program and the proposed Indiana amendment 
would not dictate the same results with respect to classifying certain 
postmining land use changes as significant or nonsignificant. Under the 
Tennessee program, the Director of OSM retains discretion to determine 
whether land use changes other than those listed in 30 CFR 
942.774(c)(8) are significant or nonsignificant permit revisions. A 
postmining land use is not, by default, a nonsignificant permit 
revision just because it is not one of the changes listed in 
Tennessee's approved definition of ``significant.'' Instead, the 
Director of OSM makes that determination on a case-by case basis. We 
have always maintained that this discretion is a necessary part of the 
Tennessee program. In the December 5, 1988, preamble to 30 CFR 942.774, 
we state, ``OSMRE believes that some flexibility in language is 
necessary to allow for contingencies or applications that are not 
possible to foresee'' (53 FR 49104). Thus, in the case of the example 
we cited in our March 16, 1999, decision--a change from cropland to 
forest--the change may be processed as either a significant or 
nonsignificant permit revision depending upon the Director of OSM's 
determination.
    Indiana's provision at IC 14-34-5-8.2(4), on the other hand, 
eliminates the IDNR Director's discretion to determine whether a 
postmining land use change would classify as significant. Under IC 14-
34-5-8.2(4), all postmining land use changes other than those listed at 
IC 14-34-5-8.2(4) have to be nonsignificant. In the case of the example 
we cited in our March 16, 1999, decision--a change from cropland to 
forest--the change must be considered nonsignificant. Indiana's 
proposed amendment would not allow for any other determination. 
Clearly, the two programs are different. For these reasons, we conclude 
that our decision not to approve the Indiana amendment at IC 14-34-5-
8.2(4) was not a departure from our prior ruling in the Tennessee 
program. Instead, our decision was consistent with our longstanding 
position that some flexibility in language is necessary to allow for 
contingencies or applications of the rule that were not covered by the 
provision at 30 CFR 942.774(c). IC 14-34-5-8.2(4) would eliminate such 
flexibility.

D. Director's Findings

    Given the differences between the Indiana proposed amendment and 
the approved Tennessee program, and taking into account all the 
comments we received on this amendment, we find that our original 
decision not to approve IC 14-34-5-8.2(4) was correct in its result. We 
agree with the Court that our original decision not to approve required 
additional consideration and explanation of our rationale. Based on our 
additional consideration and explanation, we find IC 14-34-5-8.2(4) 
conflicts with section 511(a)(2) of SMCRA, which requires notice and 
hearing requirements for any significant alterations in a reclamation 
plan. IC 14-34-5-8.2(4) would allow many changes that could produce 
significant alterations in a reclamation plan without notice and 
hearing requirements. For example, it would allow a change from 
cropland to forest without notice and hearing requirements. Depending 
on the circumstances, this change could be a significant permit 
revision. The IDNR Director must be free to determine if such a change 
would constitute a significant permit revision so as to assure that 
appropriate procedures are provided for the public's participation in 
the revision of reclamation plans as required under section 102(i) of 
SMCRA. Indiana's proposed amendment at IC 14-34-5-8.2(4) does not 
provide for such a determination.
    In its December 21, 1998, letter, Indiana stated that it interprets 
this section to mean that the Director of the State regulatory 
authority retains discretion under IC 14-34-5-8.2(5) to determine 
whether land use changes other than those listed in IC 14-34-5-8.1(8) 
could be significant revisions. Indiana further stated that all permit

[[Page 42745]]

revision decisions are appealable under the Indiana Administrative 
Orders and Procedures Act.
    We agree that the IDNR Director retains discretion as to whether a 
permit revision is significant or nonsignificant. However, in the 
instance of postmining land use changes, it is clear on its face that 
the provision at IC 14-34-5-8.2(4) removes such discretion. Thus, as 
explained above, the statute is inconsistent with, and less stringent 
than, section 511(a)(2) of SMCRA, which requires notice and hearing 
requirements for any significant alterations in a reclamation plan. The 
fact that all permit revision decisions are appealable under the 
Indiana Administrative Orders and Procedures Act does not justify the 
inclusion of a provision in this section that is inconsistent with, and 
less stringent than, section 511(a)(2) of SMCRA. Therefore, we do not 
approve IC 14-34-5-8.2(4).

IV. Summary and Disposition of Comments

Federal Agency Comments

    On January 5, 2001, under section 503(b) of SMCRA and 30 CFR 
732.17(h)(11)(i) of the Federal regulations, we requested comments on 
the amendment from various Federal agencies with an actual or potential 
interest in the Indiana program (Administrative Record No. IND-1709). 
The Fish and Wildlife Service (FWS) responded on January 16, 2001 
(Administrative Record No. IND-1706). The FWS states that in its 
previous comments dated June 19, 1998 (Administrative Record No. IND-
1615), it had expressed concern that the amendment would result in 
reduced opportunities for the FWS to review land use changes that might 
adversely affect fish and wildlife resources. However, the amendment to 
IC 14-34-5-8.1(5), which provides that permit revisions that may result 
in an adverse impact on fish, wildlife, and related environmental 
values beyond that previously considered must be addressed as 
significant permit revisions, appears to have satisfied its concern, 
assuming that ``permit revisions'' include postmining land use changes. 
The FWS states that the amendment to IC 14-35-5-8.2(4) would allow 
changes from forest or fish and wildlife land to a category other than 
the four specified categories to be processed as nonsignificant permit 
revisions without notice and hearing requirements. The FWS contends 
that such a change could be in conflict with 8.1(5) because it may 
allow a postmining land use change that may result in an adverse impact 
on fish, wildlife and related environmental values beyond that 
previously considered to be addressed as a nonsignificant permit 
revision. The FWS states that this incompatibility should be resolved 
prior to approval. The FWS recommends that 8.2(4) be modified to 
include 8.1(5) as well as 8.1(8).
    We agree that IC 14-34-5-8.2(4) may allow a postmining land use 
change that may result in an adverse impact on fish, wildlife and 
related environmental values beyond that previously considered to be 
addressed as a nonsignificant permit revision. For that reason, we find 
that the provision conflicts with section 511(a)(2) of SMCRA, which 
requires notice and hearing requirements for any significant 
alterations in a reclamation plan, and we are therefore not approving 
the provision. Please refer to III. Director's Findings. Because we are 
not approving IC 14-34-5-8.2(4), there is no need to modify it.

Environmental Protection Agency (EPA)

    Under 30 CFR 732.17(h)(11)(ii), we are required to obtain the 
written concurrence of the EPA for those provisions of the program 
amendment that relate to air or water quality standards issued under 
the authority of the Clean Water Act (33 U.S.C. 1251 et seq.) or the 
Clean Air Act (42 U.S.C. 7401 et seq.). None of the revisions that 
Indiana proposed to make in this amendment pertain to such air or water 
quality standards. Therefore, we did not ask the EPA for its 
concurrence.
    Under 30 CFR 732.17(h)(11)(i), we requested comments on the 
amendment from the EPA (Administrative Record No. IND-1709). The EPA 
did not respond to our request.

State Historical Preservation Officer (SHPO) and the Advisory Council 
on Historic Preservation (ACHP)

    Under 30 CFR 732.17(h)(4), we are required to request comments from 
the SHPO and ACHP for amendments that may have an effect on historic 
properties. On January 5, 2001, we requested comments from the SHPO and 
ACHP on Indiana's amendment (Administrative Record No. IND-1706), but 
neither responded to our request.

Public Comments

    OSM requested public comments on the proposed amendment. We 
received comments from two groups representing the coal industry. By 
letter dated February 5, 2001, the ICC submitted comments on the 
proposed amendment (Administrative Record No. IND-1707). Also, by 
letter dated February 12, 2001, the National Mining Association (NMA) 
submitted comments on the proposed amendment (Administrative Record No. 
IND-1708). Both organizations provided comments supporting the 
amendment. For ease of discussion, the comments have been organized by 
topic and are discussed below.
    In addition, in its letter dated February 5, 2001, the ICC informed 
us that it had requested information from the Knoxville OSM Field 
Office under the Freedom of Information Act. The ICC stated that if it 
did not receive the information it requested, ``the ICC will be 
requesting an extension'' to the public comment period for this 
amendment. Although we did not receive a request for an extension, the 
ICC submitted additional comments on the proposed amendment by a letter 
dated February 28, 2001 (Administrative Record No. IND-1710). Given the 
level of interest the ICC has in this proposed amendment, we have 
incorporated the ICC additional comments into the discussion below.
1. Indiana Added the Proposed Language at IC 14-34-5-8.2(4) Because OSM 
Recommended It
    Both the ICC and the NMA contend that IC 14-34-5-8.2(4) was added 
to HEA 1074 at OSM's suggestion. As support for this contention, both 
organizations refer to a letter dated February 20, 1998, that we sent 
Indiana, providing preliminary comments on the legislative bill that 
was later enacted as HEA 1074. The ICC points out that, as originally 
proposed, HEA 1074 contained the provision at IC 14-34-5-8.1 
classifying certain postmining land uses as significant permit 
revisions and an additional provision in IC 14-34-5-8.2 stating that a 
revision is nonsignificant if it does not involve a significant change 
in land use. The ICC states that in our preliminary comments:

    OSM expressed concern that ``[t]he two standards for determining 
which revision requirements apply to a specific land use change * * 
* may result in different determinations, depending on which section 
of the statute is used.'' OSM suggested ``that guidance be provided 
for one or the other, but not both. * * * Generally then if a 
revision doesn't meet the standards specified in the program, it is 
by default that other type of revision.''

    The ICC maintains that Indiana followed our suggestion and inserted 
a provision at IC 14-34-5-8.2(4) which classified as nonsignificant 
revisions all postmining land use changes not defined as significant 
revisions at IC 14-34-5-8.1(8). The NMA asserts that

[[Page 42746]]

``[a]gencies should not recommend a course of action and then penalize 
IDNR for following their advice.''
    Response: The ICC has taken the comments in our February 20, 1998, 
letter out of context. In the letter, we offered specific comments on 
section 8.2(a)(5)(B), which provided that a revision was nonsignificant 
if it did not involve a significant change in land use. We expressed 
concern that the provision at 8.2(a)(5)(B) conflicted with the 
provision in section 8.1(8) which provided that land use changes to 
residential, commercial or industrial, recreational, or developed water 
resources are significant revisions. Specifically, we stated that there 
appear to be two standards for determining whether a post mining land 
use change is significant. We further stated that the two standards may 
result in different determinations, depending on which section of the 
statute is used.
    We then offered a general comment concerning permit revisions as a 
whole. Specifically, we stated:

    We recognize that it is not possible to list every kind of 
[permit] revision that might occur. Therefore, it is difficult to 
provide specific guidance that identifies all [permit] revisions 
that are significant and also all those [permit revisions] that are 
nonsignificant. We suggest that guidance be provided for one or the 
other, but not for both. That is the approach used by most other 
states. Generally, then if a [permit] revision doesn't meet the 
standards specified in the program, it is by default the other type 
of [permit] revision.

    Thus, we were not talking specifically about postmining land use 
changes when we commented, ``[g]enerally, then if a revision doesn't 
meet the standards specified in the program, it is by default that 
other type of revision.'' We were talking about permit revisions as a 
whole. Further, it is erroneous to assume, based on this comment, that 
revisions that do not meet the standards specified in a regulatory 
program are automatically the other type of revision because the 
comment was qualified by the word ``generally.'' The word ``generally'' 
clearly leaves the door open for discretion in determining if a 
revision that does not meet the standards specified in a regulatory 
program is significant or nonsignificant, just as the Tennessee program 
does. Finally, the only suggestion in the entire paragraph was that 
Indiana provide guidelines for only one type of permit revision. That 
way, Indiana would have guidelines for making permit revision 
determinations, but those guidelines would not eliminate Indiana's 
ability to determine, on a case-by-case basis, whether a permit 
revision was a significant or nonsignificant revision. Indiana did not 
adopt this suggestion. Therefore, the NMA's concern that we penalized 
IDNR for following our advice is unfounded.
2. OSM Tried To Not Approve the Amendment by Insisting That All 
Postmining Land Use Changes Must Be Considered Significant Permit 
Revisions.
    Both the ICC and the NMA contend that we first attempted to justify 
our decision not to approve IC 14-34-5-8.2(4) in the March 16, 1999, 
final rule (64 FR 12890) by claiming that all postmining land use 
changes should be treated as significant permit revisions. The ICC 
implies that we made this claim when we stated that ``changes in 
postmining land use are the kind of issue that the public should have 
an opportunity to comment on.'' The NMA asserts that such a claim is 
contradicted by the legislative history of SMCRA. The NMA states that 
Congress considered but rejected specific language that would have 
required a permit revision prior to modification of proposed future 
land use. The NMA argues that this legislative history demonstrates 
that not all modifications of future land uses must invoke notice and 
hearing requirements ``as alleged by OSM.'' It may even imply that some 
modifications of the proposed future land use do not require a permit 
revision at all.
    Response: We disagree that we attempted to justify our decision not 
to approve IC 14-34-5-8.2(4) by claiming that all postmining land use 
changes should be treated as significant permit revisions. We did not 
approve IC 14-34-5-8.2(4) because it was inconsistent with section 
511(a)(2) of SMCRA, which requires public notice and hearing procedures 
for any significant alteration in a reclamation plan. Please refer to 
III. Director's Findings 6. of our March 16, 1999, final rule in which 
we stated:

    Section 511(a)(2) of SMCRA requires the State to establish 
guidelines for determining which revision requests are subject to 
notice and hearing requirements. However, it also requires, at a 
minimum, notice and hearing requirements for any significant 
alterations in a reclamation plan. IC 14-34-5-8.2(4) would allow 
many changes that could produce significant alterations in a 
reclamation plan, such as a change from cropland to forest, without 
notice and hearing requirements. Allowing such a change without 
notice and hearing requirements is inconsistent with, and less 
stringent than, section 511(a)(2) of SMCRA (64 FR 12892).

    Further, we do not maintain that all postmining land use changes 
should be treated as significant permit revisions, and we disagree with 
the implication that we made such a claim with our statement concerning 
opportunities for public comments. The central purpose of our May 26, 
1999, final rule clarification was to make it clear that we in no way 
intended to indicate that all land use changes other than those listed 
at IC 14-34-5-8.1(8) must be considered significant revisions. Thus, we 
would agree with the NMA's assertion that the legislative history of 
SMCRA demonstrates that not all modifications of future land uses must 
invoke notice and hearing requirements. However, we do not agree that 
the legislative history implies that some modifications of the proposed 
future land use do not require a permit revision at all. The ICC made 
this basic contention in its comments on Indiana's proposed program 
amendment at IC 14-34-5-7(a) when it argued that nothing in SMCRA 
specifically states that all mining or reclamation changes are 
revisions subject to regulatory authority approval (Administrative 
Record No. IND-1617). However, as we explained in our decision not to 
approve that proposed program amendment, we have established that all 
revisions must be incorporated into the permit since they are changes 
to that document (64 FR 12894). As stated above, the ICC challenged our 
decision not to approve IC 14-34-5-7(a) and the Court upheld our 
decision. Indiana Coal Council v. Babbitt, No IP 99-0705-C-M/S (S. D. 
Ind, Sept. 25, 2000).
3. OSM Tried To Not Approve the Amendment by Claiming That It Deprived 
the IDNR of Discretion.
    The ICC states that we changed the reasoning behind our decision 
not to approve IC 14-34-5-8.2(4) in the May 26, 1999, final rule 
clarification (64 FR 28362) by claiming that the problem with the 
Indiana program amendment was that it deprived IDNR of discretion to 
require that post mining land use changes be treated as significant 
permit revisions. The ICC points out that the IDNR had explained that 
it interpreted IC 14-34-5-8.2 to mean that its Director would retain 
discretion under IC 14-34-5-8.2(5) to determine that land use changes 
other than those listed in IC 14-34-5-8.1(8) could be significant 
permit revisions. The NMA asserts that this interpretation by the IDNR 
Director refutes our argument that the proposed amendment would remove 
the IDNR Director's discretion to determine whether post mining land 
use changes other than the ones listed at IC 14-34-5-8.1(8) are 
significant. Both the ICC and the NMA further assert that we agreed 
with the IDNR's interpretation in the March 16, 1999, final decision. 
The

[[Page 42747]]

ICC states that nothing in either of our prior decisions explains how 
we can reconcile our statement that we agree with the IDNR's 
interpretation with our ``clarified'' position that section 14-34-5-8.2 
deprives the IDNR of discretion.
    Response: In our May 26, 1999, final rule clarification (64 FR 
28362), we specifically stated that we were supplementing our previous 
findings--not replacing them. Furthermore, the Court specifically 
stated that we never changed our ultimate conclusion that IC 14-34-5-
8.2(4) was inconsistent with section 511(a)(2) of SMCRA. Therefore, it 
is incorrect to assert that we changed our original decision. Please 
refer to III. Director's Findings 6. of our March 16, 1999, final rule 
in which we stated:

    Section 511(a)(2) of SMCRA requires the State to establish 
guidelines for determining which revision requests are subject to 
notice and hearing requirements. However, it also requires, at a 
minimum, notice and hearing requirements for any significant 
alterations in a reclamation plan. IC 14-34-5-8.2(4) would allow 
many changes that could produce significant alterations in a 
reclamation plan, such as a change from cropland to forest, without 
notice and hearing requirements. Allowing such a change without 
notice and hearing requirements is inconsistent with, and less 
stringent than, section 511(a)(2) of SMCRA (64 FR 12892).

    We published the May 26, 1999, final rule clarification at the 
request of a May 12, 1999, letter we received from the IDNR. In that 
letter, the IDNR asked us to ``provide clarification of the Federal 
Register language which disapproved portions of the program amendment 
pursuant to those issues which were subject to our May 10, 1999 
discussions.''
    On May 10, 1999, we held a telephone conference with 
representatives from both the IDNR and the ICC to discuss the ICC's 
concerns with the portions of the Indiana's May 29, 1998, amendment 
that we did not approve. During that meeting, the ICC argued that our 
decision not to approve IC 14-34-5-8.2(4) eliminated the IDNR's 
discretion to determine whether postmining land use changes are 
nonsignificant permit revisions because we had declared that all 
postmining land use changes should be treated as significant permit 
revisions.
    In our final rule clarification, we stated that it was not our 
intent to indicate that all other land use changes must be considered a 
significant revision or to alter OSM's position as reflected in other 
regulatory actions relating to significant permit revisions, such as 
those for the Federal program in Tennessee (see the response to 
comments under 3. above).
    We further went on to explain that we felt it is essential for 
Indiana to continue to have the discretion to determine, on a case-by-
case basis, that land use changes other than those listed in section IC 
14-34-5-8.1(8) may constitute a significant revision. Thus, one of the 
purposes of our clarification was to explain that, contrary to the 
ICC's assertion, our decision not to approve IC 14-34-5-8.2(4) did not 
eliminate IDNR's discretion to determine whether postmining land use 
changes are nonsignificant permit revisions. Instead, it was ``clear on 
its face that the proposed change would remove such discretion.'' Our 
decision not to approve IC 14-34-5-8.2(4) preserved IDNR's discretion. 
Therefore, we agreed with the IDNR when it claimed that its Director 
retained discretion as to whether a change is significant or 
nonsignificant. Our decision not to approve IC 14-34-5-8.2(4) 
guaranteed that.
4. The Proposed Amendment Is Identical to the Federal Program in 
Tennessee
    The NMA contends that our objections to Indiana's proposed 
amendment are particularly unusual because the current proposal at 
issue was copied almost verbatim from part of the Federal SMCRA program 
promulgated and approved by OSM on behalf of the State of Tennessee. 
Further, the NMA argues that the language of OSM's Federal program in 
Tennessee at 30 CFR 942.774 implies that items not listed as 
``significant'' are not significant. The NMA states, ``the Federal 
program run by OSM in Tennessee expressly considers changes to the 
reclamation plan of the type being cited by the agency as objectionable 
(cropland to forest) to be ``insignificant'' that do not require notice 
and hearings.''
    Response: The Tennessee SMCRA program provisions concerning permit 
revisions at 30 CFR 942.774 do not contain a counterpart to ``the 
current proposal at issue''--IC 14-34-5-8.2(4). Further, the language 
at 30 CFR 942.774 does not imply that items not listed as 
``significant'' are not significant. Nor does it expressly consider 
changes to the reclamation plan of the type being cited by the agency 
as objectionable (cropland to forest) to be ``insignificant.'' As 
stated in III. Director's Findings, in the preamble to the final rule 
approving 30 CFR 942.774, we explain that the language at 30 CFR 
942.774 was intentionally written in such a way ``to allow for 
contingencies or applications of the rule that are not possible to 
foresee'' (53 FR 49104). Thus, we have always maintained that revisions 
other that those found at 30 CFR 942.774 could be considered 
significant.
5. The Proposed Amendment Is Similar to the Federal Program in 
Tennessee
    The ICC argues that IC 14-34-5-8.1 is similar to the corresponding 
provision of the Federal SMCRA program adopted by OSM for the state of 
Tennessee. The ICC contends that IC 14-34-5-8.1 is virtually identical 
to 30 CFR 942.744(c)(8). The only way that Indiana's program differs 
from Tennessee's program is that Indiana's amendment added a new 
section 14-34-5-8.2(4) which provides that postmining land use changes 
other than those enumerated in section 14-34-5-8.1 are classified as 
nonsignificant revisions. The Tennessee program has no provision 
defining nonsignificant revisions.
    Response: We agree that IC 14-34-5-8.1 is virtually identical to 30 
CFR 942.744(c)(8) and we acknowledged this in our March 16, 1999, final 
rule when we approved IC 14-34-5-8.1 (64 FR 12892). However, we do not 
agree that the only way that Indiana's program differs from Tennessee's 
program is that Indiana's amendment added a new section 14-34-5-8.2(4). 
For example, the Tennessee program does not have a counterpart to any 
of the provisions at IC 14-34-5-8.2 concerning nonsignificant permit 
revisions. Still, even if Indiana's program were similar to the 
Tennessee program, Indiana's program is not entitled to instant 
approval. We still must review Indiana's program to determine if it is 
as stringent as the Federal program. We have determined it is not. 
Please refer to III. Director's Findings.
6. OSM Has Never Exercised Discretion in Tennessee
    The ICC questions whether we have in fact ever exercised our 
discretion under the Federal Tennessee program to require that a 
postmining land use change other than the ones specified in 30 CFR 
942.774(c)(8) be treated as a significant permit revision. On January 
31, 2001, under the Freedom of Information Act, the ICC submitted a 
request to the OSM Knoxville Field Office for information concerning 
``any correspondence, internal memoranda or notes, or permit decision 
documents reflecting any decision by OSM to require any permit revision 
to a surface coal mining and reclamation operations permit issued under 
the federal program for the State of Tennessee * * * to be treated as a 
significant permit revision.'' On February 20, 2001, the Knoxville 
Field Office responded to the ICC's

[[Page 42748]]

request by providing information about one permit revision which 
involved a change from non-commercial forest to an industrial 
postmining land use. Thus, the ICC states that OSM, as the regulatory 
authority under the Tennessee Federal program, has never required any 
change in postmining land use to be treated as a significant permit 
revision other than a change in one of the categories specifically 
listed in 30 CFR 9472.774(c)(8). Furthermore, the ICC argues that, to 
the extent that we may have retained discretion under the Tennessee 
program regulations to treat other categories of postmining land use 
changes as significant permit revisions, it does not appear that we 
have ever had occasion to exercise that discretion. In light of this 
experience under the Tennessee program, the ICC believes that we should 
reevaluate our prior position that Indiana must retain such discretion 
in order for its program to be no less effective than the federal 
regulations. The ICC contends that if postmining land use changes other 
than those specified at 30 CFR 942.774(c)(8) are not treated as 
significant permit revisions in practice in Tennessee, the Indiana 
program would be no less effective than OSM's rules regardless if the 
IDNR has discretion to so treat them. The NMA argues that the language 
of our Federal program in Tennessee does not provide for discretion by 
the Director of OSM, and that we have not provided any examples of 
discretion being exercised in Tennessee.
    Response: As stated above in the response to comment 4. and in III. 
Director's Findings, the language of our Federal program in Tennessee 
does provide for discretion by the Director of OSM, as it was written 
in such a way ``to allow for contingencies or applications of the rule 
that are not possible to foresee'' (53 FR 49104). In fact, under the 
Tennessee SMCRA program, every decision of the Director of OSM on a 
land use change revision other than those listed at 30 CFR 
942.774(c)(8) is discretionary.
    As for whether we have ever required a postmining land use change 
other than the ones specified in 30 CFR 942.774(c)(8) to be treated as 
a significant permit revision, the answer is no. However, this does not 
mean that we have never exercised our discretion under the Federal 
Tennessee program. In fact, we maintain that every decision the 
Director of OSM has made under the Federal Tennessee program relating 
to postmining land use changes not listed at 30 CFR 942.774(c)(8) is an 
exercise of discretion. The Director of OSM has merely determined that 
the postmining land use changes to date are nonsignificant. Under 
Indiana's proposed amendment, the IDNR Director would not be able to 
make such a determination. As stated above in III. Director's Findings, 
elimination of the IDNR Director's discretion in the Indiana program 
would render Indiana's program less effective than the Federal program 
and conflict with section 511(a)(2) of SMCRA. Therefore, we are not 
approving the provision at IC 14-34-5-8.2(4).
    Finally, the ICC argues that eliminating INDR discretion will not 
affect the way in which Indiana executes its program. If that is true, 
then preserving INDR discretion as we have by not approving IC 14-34-5-
8.2(4) will also not affect the way in which Indiana executes its 
program. Therefore, the ICC's concerns are unwarranted.
7. The Proposed Amendment Would Not Change the Way Indiana Has Been 
Handling Postmining Land Use Changes Since 1989
    Both the ICC and the NMA contend that, in practice, changes in post 
mining land uses of the type being proposed have not been considered 
significant permit revisions under IDNR's regulations since 1989. The 
ICC indicates this is because of an IDNR's Hearings Division 
determination in Albrecht v. DNR, Cause #88-294R (June 13, 1989) that 
postmining land uses were not significant permit revisions under IDNR's 
regulations. The NMA states that we have not offered any evidence that 
refutes this fact. Further, the ICC and the NMA point out that we have 
not noted any problems with the IDNR's practice over the past 12 years.
    Response: As stated above, if eliminating INDR discretion will not 
affect the way in which Indiana executes its program, then preserving 
INDR discretion as we have by not approving IC 14-34-5-8.2(4) will also 
not affect the way in which Indiana executes its program. Therefore, 
the ICC's and NMA's concerns are unwarranted.
8. There Is No Public Concern Over the Proposed Amendment
    The ICC contend there is no need for OSM to strain for reasons to 
not approve IC 14-34-5-8.2(4) because whether postmining land use 
changes are treated as significant permit revisions or not, existing 
provisions of the approved Indiana program already insure that 
postmining land use changes cannot be approved without consultation 
with the landowner or appropriate land management agency. The ICC 
suggests that it is the landowner or land management agency, not the 
public at large, which is most likely to be interested in proposed 
postmining land use changes. The NMA points out that OSM has not 
identified any public comments from the last round of notice and 
comments objecting to IDNR's proposed amendment.
    Response: We disagree with the contention that the public at large 
is not interested in proposed postmining land use changes. In fact, 
such a claim is in direct conflict with section 102(i) of SMCRA, which 
states that SMRCA was designed to assure that appropriate procedures 
are provided for the public participation in the revision of 
reclamation plans. As we stated in III. Director's Findings, we believe 
it is essential that regulatory authorities retain discretion to 
determine which revisions qualify as significant permit revisions so 
that the purposes of section 102(i) can be met. Therefore, we are not 
approving IC 14-34-5-8.2(4).
9. OSM Does Not Define ``Significant,'' So It Should Defer to Indiana's 
Definition
    The NMA also argues that Indiana's proposed language is consistent 
with SMCRA section 511(a)(2) because neither SMCRA nor OSM regulations 
define ``significant.'' Therefore, there can be no direct showing that 
the proposed amendment is ``less stringent than'' the requirement in 
section 511(a)(2) of SMCRA. The NMA argues that since there is no 
definition of ``significant'' in SMCRA or OSM's regulations, it is the 
State regulatory authority that should determine what constitutes 
``significant'' revisions to the reclamation plan. The NMA argues that 
this position is supported by the fact that SMCRA and OSM's 
implementing regulations clearly provide that: (1) States are supposed 
to enjoy ``exclusive'' jurisdiction over the regulation of surface coal 
mining and reclamation operations (30 USC 1253(a)), and (2) 
nonsignificant permit revisions are subject only to the review 
procedures established under the State or Federal programs (48 FR 
44377). According to the NMA, then, it is appropriate for OSM to defer 
to the IDNR's reasonable definition of ``significant.''
    Response: Indiana defined and provided eight specific examples of 
significant permit revisions at IC 14-34-5-8.1, and we approved the 
provisions on March 16, 1999 (64 FR 12890). Therefore, we have accepted 
the IDNR's reasonable definition of significant permit revisions. 
Furthermore, Indiana's definition of significant permit revisions is 
not all inclusive. We recognized this when we stated in our approval 
that

[[Page 42749]]

``this list cannot be considered all inclusive, as there are many other 
changes not listed at IC 14-34-5-8.1 that would be considered 
significant permit revisions.'' Indiana's provision at IC 14-5-34-
8.2(4) would make the provision at IC 14-34-5-8.1(8) all inclusive, 
thereby eliminating the possibility that a postmining land use change 
not listed at IC 14-34-5-8.1(8) could be considered a significant 
permit revision. Thus, the provision at IC 14-34-5-8.2(4) conflicts 
with Indiana's own reasonable definition of significant permit 
revisions. Our decision not to approve IC 14-34-5-8.2(2) is consistent 
with our approval of Indiana's reasonable definition of significant 
permit revisions.
10. Indiana Must Have Regulations That Are as Effective as OSM's
    The NMA points out that for almost twenty years, OSM has held that 
States do not have to adopt regulations that are identical to the 
Secretary's. Further, States do not need to demonstrate that 
alternative regulations are necessary to meet local requirements, 
environment, or agricultural conditions. Instead, States must 
demonstrate that their laws and regulations are as effective as the 
Secretary's in meeting the requirements of the Act. The NMA contends 
that there is no evidence in the record that IDNR's proposal would be 
less effective. The NMA states that OSM should be faithful to its 
longstanding policies of allowing States freedom to develop regulations 
that meet their needs, and approve the proposed amendment, especially 
when the evidence in the record supports the adoption of the proposed 
amendment and does not suggest that it would be less effective than OSM 
regulations. The NMA maintains that Indiana's proposed language is 
consistent with SMCRA section 511(a)(2).
    Response: As explained under III. Director's Findings, the 
provision at IC 14-34-5-8.2(4) would eliminate the IDNR Director's 
discretion to determine if a revision other than those listed at IC 14-
34-8.1(8) would constitute a significant permit revision and make it 
impossible for the IDNR Director to assure that appropriate procedures 
are provided for the public participation in the revision of 
reclamation plans as required under section 102(i) of SMCRA. Thus, 
Indiana's provision is less effective than the Secretary's regulations. 
Therefore, we are not approving it.
11. OSM Has Violated Section 503(c) of SMCRA and Section 553 of the 
Administrative Procedure Act (APA)
    The NMA asserts that OSM failed to provide any new rationale or 
basis for not approving Indiana's proposed amendment at IC 14-34-5-
8.2(4) in our January 11, 2001, Federal Register notice. The NMA 
contends that OSM has violated section 503(c) of SMCRA and section 553 
of the Administrative Procedure Act by failing to allow the IDNR and 
the public a meaningful opportunity to comment on why OSM plans to deny 
the proposed amendments to the Indiana regulatory program. The NMA 
points to a Court ruling in Macon County Samaritan Memorial Hospital v. 
Shalala, 7 F. 3d 762, 765-766 (8th Cir. 1993); quoting Motor Vehicle 
Mfrs. Ass'n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 42 (1983) to 
argue that if a new agency rule reflects departure from the agency's 
prior policy, the agency must apply reasoned analysis for change beyond 
that which may be required when the agency does not act in the first 
instance. The NMA also points to a Court ruling in Office of 
Communications of the Unitied Church of Christ v. FCC, 560 F. 2d 529, 
532 (2nd Cir. 1977) and contends that for an agency to change its 
previous holdings, there must be a thorough and comprehensive statement 
of reasons for the decision. The NMA states that it would be much more 
meaningful to provide comments as to whether Indiana's amendment 
satisfies the applicable program approval criteria of 30 CFR 732.15 if 
OSM explained in the notice exactly what part of the criteria the 
agency believes are not satisfied. The NMA states because OSM has 
chosen not to provide any additional information for the record and has 
not provided any new rationale for denying the amendment, the amendment 
should be approved. If OSM plans to attempt to not approve the 
amendment a second time, SMCRA and the APA require that it must at 
least provide the public and IDNR a meaningful opportunity to comment 
on that new rationale before the agency makes a final decision.
    Response: SMCRA and the Federal regulations are clear as to the 
review and decision process for proposed changes to State programs. We 
have followed those procedures. The U.S. District Court, Southern 
District of Indiana, required us to reconsider our initial decision. 
Therefore, we provided an opportunity to the public to comment on the 
proposed amendment as required by law.

V. Director's Decision

    Based on the above findings, we are not approving the amendment as 
remanded to us for further consideration by the U.S. District Court, 
Southern District of Indiana on September 25, 2000.
    To implement this decision, we are amending the Federal regulations 
at 30 CFR Part 914, which codify decisions concerning the Indiana 
program. We find that good cause exists under 5 U.S.C. 553(d)(3) to 
make this final rule effective immediately. Section 503(a) of SMCRA 
requires that the state's program demonstrates that the state has the 
capability of carrying out the provisions of the Act and meeting its 
purposes. Making this regulation effectively immediately will expedite 
that process and will encourage Indiana to bring its program into 
conformity with the Federal standards. SMCRA requires consistency of 
State and Federal standards.

Effect of Director's Decision

    Section 503 of SMCRA provides that a State may not exercise 
jurisdiction under SMCRA unless the State program is approved by the 
Secretary. Similarly, 30 CFR 732.17(a) requires that any alteration of 
an approved State program be submitted to OSM for review as a program 
amendment. The Federal regulations at 30 CFR 732.17(g) prohibit any 
changes to approved State programs that are not approved by OSM. In our 
oversight of the Indiana program, we will recognize only the statutes, 
regulations and other materials approved by the Secretary or by us, 
together with any consistent implementing policies, directives and 
other materials. We will require the enforcement by Indiana of only 
such provisions.

VI. Procedural Determinations

Executive Order 12866--Regulatory Planning and Review

    This rule is exempted from review by the Office of Management and 
Budget under Executive Order 12866.

Executive Order 12630--Takings

    This rule does not have takings implications. This determination is 
based on the analysis performed for the counterpart Federal 
regulations.

Executive Order 13132--Federalism

    This rule does not have federalism implications. 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

[[Page 42750]]

purposes of SMCRA is to ``establish a nationwide program to protect 
society and the environment from the adverse effects of surface coal 
mining operations.'' 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 under SMCRA.

Executive Order 12988--Civil Justice Reform

    The Department of the Interior has conducted the reviews required 
by section 3 of Executive Order 12988 and has determined that, to the 
extent allowed by law, this rule meets the applicable standards of 
subsections (a) and (b) of that section. However, these standards are 
not applicable to the actual language of State regulatory programs and 
program amendments because each program is drafted and promulgated by a 
specific State, not by OSM. Under sections 503 and 505 of SMCRA (30 
U.S.C. 1253 and 1255) and 30 CFR 730.11, 732.15, and 732.17(h)(10), 
decisions on proposed State regulatory programs and program amendments 
submitted by the States must be based solely on a determination of 
whether the submittal is consistent with SMCRA and its implementing 
Federal regulations and whether the other requirements of 30 CFR Parts 
730, 731, and 732 have been met.

Executive Order 13211--Regulations That Significantly Affect The 
Supply, Distribution, or Use of Energy

    On May 18, 2001, the President issued Executive Order 13211 which 
requires agencies to prepare a Statement of Energy Effects for a rule 
that is (1) considered significant under Executive Order 12866, and (2) 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. Because this rule is exempt from review 
under Executive Order 12866 and is not expected to have a significant 
adverse effect on the supply, distribution, or use of energy, a 
Statement of Energy Effects is not required.

National Environmental Policy Act

    Section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that a 
decision on a proposed State regulatory program provision does not 
constitute a major Federal action within the meaning of section 
102(2)(C) of the National Environmental Policy Act (NEPA) (42 U.S.C. 
4332(2)(C)). A determination has been made that such decisions are 
categorically excluded from the NEPA process (516 DM 8.4.A).

Paperwork Reduction Act

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

Regulatory Flexibility Act

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

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule: (a) Does not 
have an annual effect on the economy of $100 million; (b) will not 
cause a major increase in costs or prices for consumers, individual 
industries, federal, state, or local government agencies, or geographic 
regions; and (c) does not have significant adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S. based enterprises to compete with foreign-based 
enterprises.
    This determination is based upon the fact that the State submittal 
which is the subject of this rule is based upon counterpart Federal 
regulations for which an analysis was prepared and a determination made 
that the Federal regulation was not considered a major rule.

Unfunded Mandates

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

List of Subjects in 30 CFR Part 914

    Intergovernmental relations, Surface mining, Underground mining.

    Dated: August 24, 2001.
Charles E. Sandberg,
Acting Regional Director, Mid-Continent Regional Coordinating Center.

    For the reasons set out in the preamble, 30 CFR Part 914 is amended 
as set forth below:

PART 914--INDIANA

    1. The authority citation for Part 914 continues to read as 
follows:

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

    2. Section 914.17 is amended by revising the section heading and 
paragraph (b) to read as follows:


Sec. 914.17  State regulatory program and proposed program amendment 
provisions not approved.

* * * * *
    (b) The amendment at Indiana Code 14-34-5-8.2(4) submitted on May 
14, 1998 concerning postmining land use changes is not approved 
effective August 15, 2001.
* * * * *
[FR Doc. 01-20447 Filed 8-14-01; 8:45 am]
BILLING CODE 4310-05-P