[Federal Register Volume 67, Number 83 (Tuesday, April 30, 2002)]
[Rules and Regulations]
[Pages 21173-21176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10517]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 917

[KY-225-FOR]


Kentucky Regulatory Program

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

ACTION: Final rule; approval of amendment.

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SUMMARY: We, the Office of Surface Mining Reclamation and Enforcement 
(OSM), are approving an amendment to the Kentucky regulatory program 
(the ``Kentucky program'') under the Surface Mining Control and 
Reclamation Act of 1977 (SMCRA or the Act). Kentucky is proposing 
revisions to the Kentucky Revised Statute (KRS) 350.085(6) to reaffirm, 
with some modifications, the circumstances under which the regulatory 
authority may not issue a permit, based upon ownership and control of 
an operation with an unabated violation. This rule addresses the permit 
block provisions. The remaining provision will be addressed in a future 
rulemaking (KY-234-FOR).

EFFECTIVE DATE: April 30, 2002.

FOR FURTHER INFORMATION CONTACT: William J. Kovacic, Field Office 
Director; Telephone: (859) 260-8400; E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

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

I. Background on the Kentucky 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 Kentucky program on May 18, 1982. You can 
find background information on the Kentucky program, including the 
Secretary's findings, the disposition of comments, and conditions of 
approval in the May 18, 1982 Federal Register (47 FR 21404). You can 
also find later actions concerning Kentucky's program and program 
amendments at 30 CFR 917.11, 917.12, 917.13, 917.15, 917.16, and 
917.17.

II. Submission of the Proposed Amendment

    By letter dated May 9, 2000 (administrative record no. KY-1473), 
Kentucky sent us an amendment to its approved SMCRA regulatory program. 
The amendment, which includes only changes that the Commonwealth is 
making on its own initiative, concerns permit blocking, easements of 
necessity, and revisions to KRS 350.445(3) to address roads above 
highwalls.
    In this rulemaking, we are addressing only the permit block 
provisions. We announced our decision on the easement of necessity 
provision in a rule published on June 20, 2001 (66 FR 33020). The 
provision concerning roads above highwalls will be addressed in a 
future rulemaking.
    We announced receipt of the proposed amendment in the May 31, 2000, 
Federal Register (65 FR 34625). In the same document, we opened the 
public comment period and provided an opportunity for a public hearing 
or meeting on the amendment's adequacy. We did not hold a public 
hearing or meeting because no one requested one. The public comment 
period ended on June 30, 2000. We received several comments from 
industry groups addressing various parts of the amendment, but only one 
commenter representing an environmental council addressed the ownership 
and control provisions.

[[Page 21174]]

III. OSM's Findings

    As discussed below, we find that the amendment is approvable under 
the criteria in 30 CFR 732.15 and 732.17, with the proviso that the 
Commonwealth needs to make certain additional changes in a future 
rulemaking. Any amendment provisions that we do not specifically 
discuss below concern nonsubstantive wording or editorial changes.

Revisions to Kentucky's Statutes That Are Not the Same As the 
Corresponding Provisions of the Federal Regulations

    House Bill 502. Part IX, Item 36(b), provides that the permit block 
provisions of KRS 350.085(6) apply to either the applicant or any 
person who owns or controls the applicant who is currently in 
violation. It requires the Kentucky Natural Resources and Environment 
Protection Cabinet (cabinet) to continue in effect the current 
administrative regulations on ownership and control, provided that a 
due process hearing is afforded at the time the cabinet makes a 
preliminary determination to impose a permit block. It also requires 
the cabinet to conditionally issue a permit, permit renewal, or 
authorization to conduct surface coal mining and reclamation operations 
if it finds that a direct administrative or judicial appeal is 
presently being pursued in good faith to contest the validity of the 
determination of ownership and control linkage. The cabinet must 
conditionally issue permits if the applicant submits proof, including a 
settlement agreement, that the violation is being abated to the 
satisfaction of the issuing State or Federal agency. If the initial 
judicial appeal affirms the ownership and control linkage, the 
applicant has 30 days to submit proof that the violation has been or is 
in the process of being corrected. Finally, it provides that nothing 
within this new provision shall preclude the applicant from seeking 
further judicial relief.
    The first sentence in Item 36(b)states that ``the permit block 
provisions of KRS 350.085(6) apply to either the applicant or any 
person who owns or controls the applicant who is currently in 
violation.'' In National Mining Ass'n. v. U.S. Dep't. of Interior, 105 
F.3d 691, 693 (D.C. Cir. 1997), the United States Court of Appeals for 
the District of Columbia Circuit struck down the Federal ownership and 
control regulations that required ``upstream'' blocking of applicants 
because of violations incurred by the applicant's owners or 
controllers. However, section 505(b) of SMCRA allows States to enact 
laws or regulations that provide for ``more stringent land use and 
environmental controls and regulations of surface coal mining and 
reclamation operations'' than are provided for in SMCRA or the 
implementing Federal regulations. Therefore, to the extent that the 
Kentucky provision may be read as authorizing upstream permit blocking, 
it is not inconsistent with SMCRA. For this reason, we are approving 
the first sentence of Item 36(b) in Part IX of H.B. 502 as submitted by 
Kentucky.
    Because we previously approved Kentucky's current ownership and 
control regulations, we also are approving the first portion of the 
second sentence of Item 36(b), which requires the cabinet to ``continue 
in effect the current administrative regulations on ownership and 
control.'' However, as discussed in Part VIII of the preamble to the 
rule that we published on December 19, 2000 (see 65 FR 79658), at some 
point in the future, we will evaluate Kentucky's regulations to 
determine whether any changes are needed for those regulations to 
remain no less effective than the Federal regulations as revised on 
December 19, 2000. If we determine that program amendments are 
necessary, we will notify Kentucky in accordance with 30 CFR 732.17(d).
    H.B. 502 conditions the continuation of the current regulations on 
provision of an opportunity for a due process hearing at the time that 
the cabinet makes a preliminary determination to impose a permit block. 
As published on December 19, 2000, the Federal regulations provide that 
``[a]ny person who receives a written decision [on a challenge a 
finding of ownership or control] ***, and who wishes to appeal that 
decision, must exhaust administrative remedies under the procedures at 
43 CFR. 4.1380 through 4.1387 or, when a state is the regulatory 
authority, the State regulatory authority counterparts, before seeking 
judicial review.'' 30 CFR 773.28(e);65 FR 79582, 79666, December 19, 
2000. Included in a right to appeal is a right to a due process 
hearing. However, the appeal must be taken from a final, rather than a 
preliminary decision.
    H.B. 502 allows for an additional, earlier due process hearing 
after a preliminary determination to impose a permit block. This ``pre-
deprivation'' hearing is presumably desired because the Kentucky 
program does not allow for the issuance of a provisional or conditional 
permit while a preliminary permit block determination is being 
challenged internally, i.e., prior to any administrative review of a 
final decision by the regulatory authority. The new Federal ``ownership 
and control regulations'' do allow for ``provisional'' permit issuances 
to applicants who are pursuing good faith challenges to all pertinent 
ownership and control findings. 30 CFR 773.14(b)(3)(i). These 
challenges include those that are before OSM itself, after an initial 
OSM determination of an ownership and control link, and prior to a 
final OSM decision that would be subject to administrative review. It 
has been our longstanding position that ownership and control challenge 
procedures provide due process even without allowing for the issuance 
of a provisional permit. See 59 FR 54306, 54312-16 (1994) (Preamble to 
OSM's Applicant/Violator System Procedures Rule, or ``AVS Procedures 
Rule''). The AVS Procedures Rule, which contained the previous 
ownership or control challenge procedures, was upheld in court against 
all due process challenges. National Mining Assoc. v. Babbitt, 43 Env't 
Rep. Cas. (BNA) 1097, 1111-17, (D.D.C. 1996), appeal docketed, No. 96-
5274 (D.C. Cir.). Nevertheless, OSM chose to allow issuance of 
provisional permits even during internal agency challenges. Regulatory 
authorities are not obligated to provide for the issuance of 
provisional permits, however. Indeed, Kentucky has chosen not to issue 
provisional permits at the time of a preliminary determination to 
impose a permit block, but to offer instead the opportunity for a 
hearing. This hearing should serve to protect the applicant's interest 
in much the same manner as would the issuance of a provisional permit. 
Therefore, we find that Kentucky's allowance of a hearing prior to a 
preliminary permit block determination is no less effective than the 
Federal requirement to issue a provisional permit during the pendency 
of an internal challenge of a positive determination of ownership and 
control. Accordingly, we are approving this provision.
    H.B. 502 also requires the cabinet to conditionally issue a permit, 
permit renewal, or authorization to conduct surface coal mining and 
reclamation operations if it finds that a direct administrative or 
judicial appeal is presently being pursued in good faith to contest the 
validity of the determination of ownership and control linkage. These 
circumstances are substantively identical to the circumstances under 
which the Federal regulations at 30 CFR 773.14(b)(3)(ii) require 
provisional issuance of a permit. Therefore, we are approving this 
portion of H.B. 502, although we may require further changes at a later 
date as a result of the evaluation discussed in Part VIII of the

[[Page 21175]]

preamble to the Federal rules published on December 19, 2000.
    Next, H.B. 502 provides that ``[t]he cabinet shall conditionally 
issue permits where the applicant submits proof, including a settlement 
agreement, that the violation is being abated to the satisfaction of 
the issuing State or Federal agency.'' These circumstances are 
substantively identical to the circumstances under which the Federal 
regulations at 30 CFR 773.14(b)(1) require provisional issuance of a 
permit. Therefore, we are approving this portion of H.B. 502, although 
we may require further changes at a later date as a result of the 
evaluation discussed in Part VIII of the preamble to the Federal rules 
published on December 19, 2000.
    H.B. 502 also provides that if the initial judicial appeal affirms 
the ownership and control linkage, the applicant has 30 days to submit 
proof that the violation has been or is in the process of being 
corrected. Nothing in the Federal regulations at 30 CFR part 773 
precludes allowance of a 30-day period for an applicant to submit proof 
that a violation has been or is in the process of being corrected. 
Therefore, we are approving this section of H.B. 502 because it is not 
inconsistent with the Federal regulations.
    However, the Federal regulations at 30 CFR 773.14(c)(4) require the 
initiation of proceedings to suspend or rescind an improvidently issued 
permit where the initial judicial review decision affirms the validity 
of the violation or the ownership or control listing or finding. 
Therefore, we may require further changes at a later date as a result 
of the evaluation discussed in Part VIII of the preamble to the Federal 
rules published on December 19, 2000. If we determine that program 
amendments are necessary, we will notify Kentucky in accordance with 30 
CFR 732.17(d).
    Finally, we find that the portion of H.B. 502 that states that 
``nothing within this new provision shall preclude the applicant from 
seeking further judicial relief'' is not inconsistent with any 
provision of SMCRA or the Federal regulations. Therefore, we are 
approving it.

IV. Summary and Disposition of Comments

Public Comments

    We asked for public comments on the amendment (administrative 
record no. KY-1469), and received several from industry groups. None 
pertained to HB 502, however. The National Citizens' Coal Law Project, 
an environmental group, submitted a letter dated June 30, 2000 
(administrative record no. KY-1483), supporting the approval of the 
provisions of HB 502.

Federal Agency Comments

    Under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA, we 
requested comments on the amendment from various Federal agencies with 
an actual or potential interest in the Kentucky program (administrative 
record no.KY-1469). We received no comments.

Environmental Protection Agency (EPA) Concurrence and Comments

    Under 30 CFR 732.17(h)(11)(i) and (ii), we are required to get a 
written concurrence from 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 
Kentucky proposed to make in this amendment pertain to air or water 
quality standards. Therefore, we did not ask EPA to concur on the 
amendment.

State Historic 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 on amendments that may have an effect on historic 
properties. Because none of the proposed amendment provisions relates 
to historic properties, we did not ask the SHPO and ACHP to comment.

V. OSM's Decision

    As discussed in section III of this preamble, we are approving 
House Bill 502, Part IX, Item 36(b) concerning permit block provisions.
    To implement this decision, we are amending the Federal regulations 
at 30 CFR Part 917, which codify decisions concerning the Kentucky 
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 
demonstrate that it has the capability of carrying out the provisions 
of the Act and meeting its purposes. Making this regulation effective 
immediately will expedite that process. SMCRA requires consistency of 
State and Federal standards.

Effect of OSM'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 change 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 the 
oversight of the Kentucky program, we will recognize only the statutes, 
regulations, and other materials we have approved, together with any 
consistent implementing policies, directives, and other materials. We 
will only require Kentucky to enforce approved provisions.

VI. Procedural Determinations

Executive Order 12630--Takings

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

Executive Order 12866--Regulatory Planning and Review

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

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 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 
the Federal regulations at 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 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 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

[[Page 21176]]

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.

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

    This rule does not require an environmental impact statement 
because section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that 
agency decisions on proposed State regulatory program provisions do not 
constitute major Federal actions within the meaning of section 
102(2)(C) of the National Environmental Policy Act (42 U.S.C. 
4332(2)(C)).

Paperwork Reduction Act

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

Regulatory Flexibility Act

    The Department of the Interior certifies that this rule will not 
have a significant economic impact on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
The State submittal that 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. 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 that 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 an unfunded mandate on State, local, or 
tribal governments or the private sector of $100 million or more in any 
given year. This determination is based upon the fact that the State 
submittal that 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 did not impose an 
unfunded mandate.

List of Subjects in 30 CFR Part 917

    Intergovernmental relations, Surface mining, Underground mining.

    Dated: March 11, 2002.
Allen D. Klein,
Regional Director, Appalachian Regional Coordinating Center.

    For the reasons set out in the preamble, 30 CFR part 917 is amended 
as set forth below:

PART 917--KENTUCKY

    1. The authority citation for part 917 continues to read as 
follows:

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

    2. Section 917.15 is amended by adding a new entry to the table in 
chronological order to read as follows:


Sec. 917.15  Approval of Kentucky regulatory program amendments.

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  Original amendment submission date          Date of final  publication              Citation/description
----------------------------------------------------------------------------------------------------------------
 
*                  *                  *                  *                  *                  *
                                                        *
May 9, 2000...........................  April 30, 2002........................  House Bill 502, Part IX,
                                                                                 Subsection 36(b), KRS
                                                                                 350.085(6).
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[FR Doc. 02-10517 Filed 4-29-02; 8:45 am]
BILLING CODE 4310-05-P