[Federal Register Volume 68, Number 194 (Tuesday, October 7, 2003)]
[Rules and Regulations]
[Pages 57805-57814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-25300]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 938

[PA-144-FOR]


Pennsylvania Regulatory Program

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

ACTION: Final rule.

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SUMMARY: We are removing a required amendment to the Pennsylvania 
regulatory program (the Pennsylvania program) under the Surface Mining 
Control and Reclamation Act of 1977 (SMCRA or the Act). The amendment 
required Pennsylvania to demonstrate that the revenues generated by its 
collection of the reclamation fee will assure that Pennsylvania's 
Surface Mining Conservation and Reclamation Fund can be operated in a 
manner that will meet the alternative bonding system requirements 
contained in the Federal regulations. In addition, the amendment 
required Pennsylvania to clarify the procedures to be used for bonding 
the surface impacts of underground mines and the procedures to reclaim 
underground mining permits where the operator has defaulted on the 
obligation to reclaim. In response to the amendment, Pennsylvania 
submitted information to us describing existing and planned changes and 
enhancements to its bonding program that we have found satisfactorily 
address the amendment's requirements.

EFFECTIVE DATE: October 7, 2003.

FOR FURTHER INFORMATION CONTACT: George Rieger, Acting Director, 
Harrisburg Field Office, Telephone: (717) 782-4036, e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background on the Pennsylvania 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 Pennsylvania 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 Pennsylvania program on July 30, 1982. You 
can find background information on the Pennsylvania program, including 
the Secretary's findings, the disposition of comments, and conditions 
of approval in the July 30, 1982, Federal Register (47 FR 33050). You 
can also find later actions concerning Pennsylvania's program and 
program amendments at 30 CFR 938.11, 938.12, 938.15 and 938.16.

II. Submission of the Proposed Amendment

    The required amendment we are removing as a result of this 
rulemaking is codified at 30 CFR 938.16(h). We required the amendment 
in a May 31, 1991, final rule (56 FR 24687) (1991 rulemaking). By 
letter dated June 5, 2003 (Administrative Record No. PA 802.27), 
Pennsylvania sent us a document entitled, ``Pennsylvania Bonding System 
Program Enhancements'' (program enhancements document). The letter was 
sent in response to the October 1, 1991, notice sent to Pennsylvania 
under 30 CFR 732.17(c) through (e) (1991 notice). In a second letter, 
also dated June 5, 2003 (Administrative Record No. PA 802.28), 
Pennsylvania stated that the material submitted with the first letter 
also addresses the first part of the 1991 rulemaking dealing with its 
alternative bonding system (ABS). The second letter also clarified that 
bonding for the surface impacts of underground mines and the procedures 
to reclaim underground mining permits where the operator has defaulted 
on the obligation to reclaim, are handled by conventional bonds and are 
not, and have not been, a part of the alternative bonding program at 
issue in the first part of the 1991 rulemaking. This later information 
was intended to address the remainder of the 1991 rulemaking. In a 
letter to Pennsylvania dated June 12, 2003 (Administrative Record No. 
PA 802.29), we found the actions taken, as described in the attachment 
to the first letter, were sufficient to resolve our 1991 notice. 
Therefore, we terminated that notice, which addressed deficiencies in 
the Pennsylvania ABS. We found the letters were also responsive to the 
required program amendment at 30 CFR 938.16(h) and proposed removing 
that provision codified in the 1991 rulemaking.
    We announced our proposal to remove the required amendment in the 
June 26, 2003, Federal Register (68 FR 37987). In the same document, we 
opened the public comment period and provided an opportunity for a 
public hearing or meeting on removing the required amendment. We did 
not hold a public hearing because no one requested one. We received a 
request for a public meeting, but it was withdrawn before the meeting 
was held. The public comment period ended on July 28, 2003. We received 
comments from two Federal agencies (the United States Environmental 
Protection Agency, Region III, and the United States Department of 
Labor, Mine Safety and Health Administration's (MSHA) New

[[Page 57806]]

Stanton and Wilkes-Barre Offices). We also received comments from 
Citizens for Pennsylvania's Future (PennFuture) and the Pennsylvania 
Coal Association (PCA).

III. OSM's Findings

    Following are the findings we made concerning removing the required 
amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 
732.17. We are removing the required amendment at 30 CFR 938.16(h).
    As we noted in our proposed rulemaking concerning removal of 30 CFR 
938.16(h), our oversight activities had determined that Pennsylvania's 
ABS contained unfunded reclamation liabilities for backfilling, 
grading, and revegetation. In addition, our oversight determined that 
the ABS was financially incapable of abating or treating pollutional 
discharges from bond forfeiture sites. In the 1991 notice, we notified 
Pennsylvania of these deficiencies. In the course of approving a 
proposed program amendment to the Pennsylvania regulatory program in 
the 1991 rulemaking, we imposed the required amendment codified at 30 
CFR 938.16(h). That amendment required Pennsylvania to demonstrate that 
the revenues generated by its collection of the reclamation fee will 
assure that its Surface Mining Conservation and Reclamation Fund (Fund) 
can be operated in a manner that will meet the ABS requirements 
contained in the Federal regulations. In addition, the amendment 
required Pennsylvania to clarify the procedures to be used for bonding 
the surface impacts of underground mines and the procedures to reclaim 
underground mining permits where the operator has defaulted on the 
obligation to reclaim. The 1991 notice stated that Pennsylvania's ABS 
was no longer in conformance with Federal requirements and mandated 
that Pennsylvania propose amendments or descriptions of amendments to 
address the identified deficiencies. Thus, the 1991 notice addressed 
the same issue covered by the 1991 rulemaking.
    In the June 5, 2003, letter the Pennsylvania Department of 
Environmental Protection (PADEP) responded to the deficiencies noted in 
our 1991 notice by sending us the program enhancements document. This 
document, jointly prepared by OSM and PADEP, explains steps that 
Pennsylvania has taken, and plans to take, to assure appropriate 
bonding for both land reclamation and postmining discharge treatment on 
existing active/inactive permits and forfeited sites. In our June 12, 
2003, letter to PADEP, we indicated that the actions taken by 
Pennsylvania, as described in its June 5, 2003, letter, were sufficient 
to resolve the 1991 notice. Because we have completed our 
administrative decision terminating the 1991 notice as a separate and 
distinct action not subject to the public notice and review procedures 
governing this rulemaking, we will not respond to comments on 
terminating that action in this rulemaking.
    The purpose of our June 26, 2003, proposed rule was to seek public 
comment on whether Pennsylvania's actions taken in response to the 1991 
notice were sufficient to remove the required amendment at 30 CFR 
938.16(h) imposed in the 1991 rulemaking. In that rulemaking, we 
required the amendment as a result of our review of changes 
Pennsylvania made to its program at 25 Pa. Code 86.17 which describes 
Pennsylvania's permit and reclamation fees. In the 1991 rulemaking, we 
indicated that the proposed revisions raised questions concerning the 
ability of Pennsylvania's ABS to meet the requirements of 30 CFR 
800.11(e) (56 FR at 24689). We also required information from 
Pennsylvania that would demonstrate that the revenues generated by the 
collection of the reclamation fee are sufficient.
    The requirement was generated because of our uncertainty that the 
Fund could be operated in a manner that will meet the ABS requirements 
of 30 CFR 800.11(e). Our uncertainty resulted from information 
Pennsylvania reported that an analysis of the solvency of the Fund for 
1989 and 1990 showed a deficit in both years. In addition, our review 
of proposed revisions to 25 Pa. Code 86.17 left questions as to the 
procedures to be used for bonding the surface impacts of underground 
mines and the procedures to reclaim underground mining permits where 
the operator has defaulted on the obligation to reclaim. We were 
uncertain about the relationship of the ABS and fees collected under 25 
Pa. Code 86.17 to the reclamation of underground mining permits where 
bonds were forfeited.
    The June 5, 2003, PADEP submission provides a complete description 
of ongoing and planned activities that address the issues that formed 
the basis for 30 CFR 938.16(h). Those activities include: (1) The 
appropriation of $5.5 million for land reclamation, (2) Continued 
collection of the permit fee at 25 Pa. Code 86.17(e), (3) Requiring new 
permits to post conventional bonds and requiring existing active/
inactive permits to replace ABS coverage with conventional bonds, and 
(4) The targeting of significant resources through a number of 
financial, and reclamation mechanisms at discharges on current primacy 
forfeitures covered by the ABS.
    After careful consideration of the comments we received, we have 
found that the actions taken, as described in the June 5, 2003, 
submission, including Pennsylvania's shift from an ABS to conventional 
bonds, adequately address the requirements of 30 CFR 938.16(h). 
Pennsylvania's conversion from the ABS to full cost bonding, renders 
moot that portion of the required amendment concerned with the solvency 
of the Fund. Also, the clarification that bonding for the surface 
effects of underground mining has not been a part of the Fund and has 
been (and will continue to be) handled by conventional bonds is 
sufficient to address the remainder of the required amendment. 
Therefore, 30 CFR 938.16(h) is being removed.

IV. Summary and Disposition of Comments

Public Comments

    We asked for public comments on the amendment (Administrative 
Record No. PA 802.31), and received responses from PennFuture and PCA. 
We will first discuss the PennFuture comments and then the comments 
from PCA.
    At the outset, however, we wish to clarify the scope of the subject 
matter for which we requested comments, particularly as it relates to 
satisfaction of the first portion of the 1991 rulemaking. In the June 
26, 2003, Federal Register Notice announcing our intention to consider 
the removal of the required amendment at 30 CFR 938.16(h), we noted 
that the 1991 notice ``dealt with the same subject matter, i.e., the 
solvency of the State's Surface Mining Conservation and Reclamation 
Fund, as does the first portion of * * * 30 CFR 938.16(h).'' We stated 
further that:

    Since we are now satisfied that the State's bonding program 
enhancements adequately address our concerns about the ability of 
the bonding program to ensure the completion of the reclamation 
plans for all operations on which the operators default on their 
obligations to reclaim, we are proposing the removal of the first 
portion of 30 CFR 938.16(h). 68 FR at 37988.

    We then clarified the scope of the opportunity to comment as 
follows:

    We are seeking your comments on whether OSM should consider the 
information submitted by Pennsylvania sufficient to satisfy the 
required amendment at 30 CFR 938.16(h). Because we decided on June 
12, 2003, that PADEP's bonding program enhancements satisfy the 
concerns expressed in our October 1, 1991, Part 732 Notification 
Letter, we are not seeking comments on the

[[Page 57807]]

adequacy of those bonding program enhancements.

    As such, we were effectively asking for comment as to the validity 
of the proposition that the first portion of the required amendment and 
the 1991 notice were one and the same and that, therefore, there was 
nothing more needed from Pennsylvania to satisfy 30 CFR 938.16(h). This 
question, we believe, is markedly different from the question, not open 
for comment, of whether actions taken as described in the program 
enhancements document satisfied the 1991 notice on deficiencies in the 
ABS.
    Nevertheless, we recognize that the June 26, 2003, Federal Register 
Notice may not have presented the scope of proposed action upon which 
comment was invited with optimal clarity and that, as a result, members 
of the public may have reasonably believed that they were invited to 
comment not only on whether resolution of the 1991 Notice also resolved 
the first part of 30 CFR 938.16(h), but also on the sufficiency of 
actions described in the program enhancements document to address the 
deficiencies in the ABS, and, further, on the adequacy of 
Pennsylvania's bonding program as a whole. For this reason, we are 
addressing their comments on these latter two issues. However, we 
continue to maintain that they are outside the scope of this 
rulemaking.
    The PennFuture comments dated July 28, 2003 (Administrative Record 
No. PA 802.36), were made on behalf of the Pennsylvania Federation of 
Sportsmen's Clubs, Inc., the Pennsylvania Chapter of the Sierra Club, 
Pennsylvania Trout, Inc., Tri-State Citizens Mining Network, Inc., and 
Mountain Watershed Association, Inc.
    On July 25, 2003 (Administrative Record No. PA 802.35), PennFuture 
wrote us concerning our termination of the 1991 notice. PennFuture has 
requested that we incorporate the comments of its July 25 letter into 
the comments on removal of 30 CFR 938.16(h). We will consider those 
comments to the extent that they address the removal of 30 CFR 
938.16(h). However, comments that pertain to whether the June 5, 2003, 
submission satisfies the 1991 notice and comments on the 30 CFR 
732.17(c) through (e) process are considered as non-responsive to this 
rulemaking.
    PennFuture commented that OSM is refusing to hear from the public 
on the adequacy of the June 5, 2003, PADEP submission of the program 
enhancements document and that in doing so, OSM has violated the 
public's right to a meaningful ``opportunity to participate'' in this 
proceeding, as required by 5 U.S.C. 553(c). It claims this also 
violates our obligation to ``consider all relevant information'' in 
making our decision as required by 30 CFR 732.17(h)(7).
    We disagree that we have violated the notice and comment 
requirements of 5 U.S.C. 553(c) and 30 CFR 732.17(h). We have provided 
the public a meaningful opportunity to participate in this rulemaking 
and have considered all relevant information in making our decision on 
the proposal to remove the required amendment at 30 CFR 938.16(h). Our 
June 26, 2003, proposed rule specifically identified that the proposal 
to remove 30 CFR 938.16(h) is based upon the information contained in 
the June 5, 2003, PADEP submission that was submitted in response to 
our 1991 notice. In addition, the proposed rule specifically requested 
comments on whether we should consider the information submitted by 
Pennsylvania sufficient to satisfy the required amendment at 30 CFR 
938.16(h).
    The June 12, 2003, administrative decision by OSM with regard to 
the satisfaction of the 1991 notice was a separate and distinct action 
not subject to the public notice and review procedures governing this 
rulemaking. To assist the public in commenting, OSM decided that it was 
appropriate to clarify in this rulemaking that it will consider 
comments to the extent that they address the satisfaction of 30 CFR 
938.16(h) and that comments that address the 1991 notice will be 
considered as non-responsive to this rulemaking.
    PennFuture commented that our pre-rulemaking commitment to finding 
that the program enhancements are adequate violate the notice and 
comment requirements of 5 U.S.C. 553(c) and 30 CFR 732.17(h) and is 
violating our obligation to serve as a fully informed, impartial 
decision maker.
    We disagree with the comment's presumption that our involvement 
with the program enhancements document has violated the notice and 
comment requirements of 5 U.S.C. 553(c) and 30 CFR 732.17(h) or that it 
compromises our role as a decision maker. Interaction of our staff with 
State regulatory authorities in the administration of their programs or 
in the development of State policies and procedures and State program 
amendments is a routine practice. That interaction does not alter the 
fact that once material is submitted to us for consideration and a 
regulatory action is proposed in the Federal Register, as was done in 
this case, any final decision will be based upon the merits after full 
consideration of the public comments, including any information 
provided, on that proposal.
    PennFuture commented that because OSM's proposed deletion of the 
actuarial study requirement from 30 CFR 938.16(h) is entirely dependent 
on this finding that the program enhancements are adequate, it would 
seem indisputable that comments or data contesting its adequacy 
constitute relevant information for OSM to consider under 30 CFR 
732.17(h)(7). PennFuture further stated that the notice of proposed 
rulemaking prevents such information and that OSM will not consider 
comments on the adequacy of the bonding program enhancements document.
    PennFuture has mischaracterized the commenting opportunities 
provided by this rulemaking. As discussed in response to previous 
comments, the notice initiating this rulemaking activity specifically 
identified that the proposal to remove 30 CFR 938.16(h) is based upon 
the information contained in the June 5, 2003, PADEP submission that 
addressed our 1991 notice. In addition, the notice specifically 
requested comments on whether we should consider the information 
submitted by Pennsylvania sufficient to satisfy the required amendment 
at 30 CFR 938.16(h). While comments addressing the basis for OSM's 
administrative decision that the 1991 notice has been resolved are not 
part of this rulemaking, OSM is considering comments to the extent that 
they address the satisfaction of the requirements at 30 CFR 938.16(h).
    PennFuture has suggested that OSM has firmly committed itself to 
the positions that the program enhancements are adequate and that the 
actuarial study requirement of 30 CFR 938.16(h) therefore may be 
terminated. PennFuture stated that agencies engaged in rulemaking or 
similar decisions that are subject to notice and comment procedures may 
not foreordain the results by agreement. Additionally PennFuture stated 
that OSM must treat the adequacy of the ``program enhancements'' as an 
open issue that it can decide only after inviting public comment on the 
issue and giving due consideration to the input in receives. Finally, 
PennFuture stated that OSM therefore should publish a new notice of 
proposed rulemaking, expressly invite comment on the adequacy of the 
program enhancements to address the concerns about the ability of the 
bonding program to ensure the completion of the reclamation plans for 
all operations on which the operators default on their obligations to 
reclaim, and then make its decision whether to delete the actuarial 
study requirement

[[Page 57808]]

from 30 CFR 938.16(h) only after it appropriately considers all 
relevant information it receives.
    We disagree with the comments. The results of this rulemaking were 
not foreordained by agreement. The fact that OSM staff worked with 
PADEP staff in developing the program enhancements document does not 
constitute a binding agreement on OSM as it relates to this rulemaking. 
As provided for under 30 CFR.732.17(c) through (e), OSM has separately 
exercised its decision-making authority to review actions taken by 
PADEP to address the issues identified in the 1991 notice and concluded 
that the 1991 notice has been resolved. There is no requirement for 
public notice before revising or terminating such notices and the basis 
for our June 12, 2003, decision terminating the 1991 notice is beyond 
the scope of this rulemaking. Separately, we published a proposed 
rulemaking to obtain public input on whether the information submitted 
by Pennsylvania in the June 5, 2003, PADEP submission provides 
sufficient basis for the removal of the requirements at 30 CFR 
938.16(h). We are now making our final decision after reviewing all 
responsive comments. Therefore, further public participation in this 
decision is not warranted.
    PennFuture requested that OSM publish a new notice that completely 
explains why it believes the program enhancements have been adequately 
addressed.
    Again, we have decided not to adopt the suggestion to publish a new 
notice with revised discussions of how the program enhancements 
document addresses the requirements at 30 CFR 938.16(h). The notice of 
proposed rulemaking for this action provides a complete description of 
the events leading up to the requirements imposed at 30 CFR 938.16(h). 
The notice also provides a summary of the activities proposed and 
undertaken by PADEP that potentially satisfy the outstanding issues as 
well as a listing of the specific documents that form the basis for our 
proposal. Because it was not reasonable or practical for us to publish 
the voluminous documents in the Federal Register, we made these 
documents available to the public in both paper and electronic form 
upon request. In addition, we offered the opportunity for a public 
hearing where interested persons could seek clarification of any points 
needed to facilitate their ability to provide meaningful comment. We 
believe that the Federal Register notice, the information we made 
available to the public, and the opportunity for a public hearing 
provided sufficient information to persons interested in commenting on 
the notice of proposed rulemaking. Further, PennFuture's extensive 
comments on this rulemaking exhibit an extensive review of the basis 
for proposing removal of 30 CFR 938.16(h).
    PennFuture commented that PADEP has failed to provide the hard 
proof of financial soundness and sufficient reclamation performance 
required by 30 CFR 938.16(h) and that until PADEP submits an actuarial 
study or similar analysis showing that its bonding program actually 
guarantees complete reclamation of all permanent program sites, the 
first requirement of 30 CFR 938.16(h) will remain unresolved and 
therefore must remain in place.
    We disagree with the comment, which misstates the scope of the 
required amendment. The scope of 30 CFR 938.16(h) was limited to 
deficiencies in the ABS. PADEP has terminated reliance upon the ABS for 
its regulatory program and demonstrated that the ABS did not play a 
role in bonding for the surface effects of underground mining. As such, 
the Pennsylvania regulatory program now operates consistent with 30 CFR 
800.11(a) through (d) rather than under (e) as was cited in the 
required amendment. While there are residual issues in the transition 
from the ABS to conventional bonds, they are adequately addressed in 
the program enhancements document.
    PennFuture commented that the fundamental reason PADEP still is 
unable to submit an actuarial study or similar information 
demonstrating the solvency of its bonding program is that the program 
remains insolvent and unable to guarantee treatment of all the post-
mining discharges emanating from permanent program sites. PennFuture 
also indicated that in order to demonstrate the ``soundness or 
financial solvency'' of its bonding program, PADEP first would have to 
make its bonding program fiscally sound.
    Again, the comment misstates the scope of the required amendment, 
which is limited to the ABS. In the case of a State operated ABS, the 
State's obligation to expend funds to reclaim a forfeited site extends 
to all assets of the ABS unless the scope of reclamation covered by the 
ABS is expressly limited. Where it is determined that an ABS lacks 
sufficient assets to cover the full cost of reclamation for which it is 
applicable, as was the case with Pennsylvania in the required 
amendment, the State must take steps to sufficiently increase the 
assets of the ABS to cover existing and reasonably anticipated 
obligations. Efforts to fix an ABS are evaluated on their ability to 
make the ABS solvent. However, a State always has the option to 
terminate use of its ABS and require conventional bonds to replace ABS 
coverage. In doing so, a State does not have an obligation to make its 
ABS solvent before converting to a conventional bonding system (CBS) 
and requiring applicants to post conventional bonds and existing 
permittees to replace ABS coverage with conventional bonds. Such a 
requirement would be well beyond what is required of a CBS under 30 CFR 
part 800 where posted bonds are deficient or insolvent, as well as 
beyond anything OSM would be able to require should it withdraw 
approval of a State program because of an inadequate ABS. In the case 
of Pennsylvania, which initiated this process in 2001, terminating 
reliance upon the ABS and requiring all applicants and permittees to 
shift to conventional bonds did not require a program amendment because 
the program already included a CBS, which was being applied to 
underground mines.
    PennFuture commented that the ABS Bond Forfeiture Discharge 
Workplan (Workplan) and the program enhancements document attempt to 
balance the books not by expanding the assets of the ABS to match the 
long-term treatment costs it must cover, but by attempting to write off 
many of those liabilities, and perhaps all of them.
    We disagree with the comment. We can find no provisions in the 
Workplan where PADEP proposes to ``write-off'' primacy discharges 
forfeited under the Pennsylvania ABS. To the contrary, the Workplan 
provides for continued revenue to the Fund; precludes the addition of 
any more potential liabilities to the Fund by halting its use for new 
permits; reduces potential obligations to the Fund by requiring the 
replacement of ABS coverage with conventional bonds or other financial 
guarantees at existing permits; and provides a structured approach to 
achieving reclamation of pollutional discharges by targeting 
significant resources through a variety of financial and reclamation 
mechanisms at current primacy forfeitures which fall under the ABS. Any 
initiative to eliminate the revenue to the fund would be an amendment 
to the program, which could not be implemented without going through 
the program amendment process, including opportunity for public 
comment.
    PennFuture commented that until PADEP has actually implemented all 
of its ``program enhancements'' and actually shown that they achieve 
the objectives applicable to all SMCRA bonding programs, it cannot 
satisfy the first requirement of 30 CFR 938.16(h) to ``demonstrate'' 
the adequacy and

[[Page 57809]]

solvency of its bonding program. PennFuture further stated that because 
the program enhancements document does not (and cannot) provide that 
proof, OSM must leave the first requirement of 30 CFR 938.16(h) in 
place, and must institute Part 733 proceedings based on PADEP's failure 
to satisfy it.
    Again, the comment misstates the scope of the required amendment, 
which is limited to the ABS. In fact, if we were to accept the comment 
and initiate a Part 733 action and ultimately take over all or a 
portion of Pennsylvania's approved program or substitute a Federal 
Program, we couldn't begin to address the problems caused by the 
deficiencies in the ABS as well as the program enhancements document 
does. PADEP has provided a credible approach to addressing outstanding 
bond program reclamation responsibilities and OSM has concluded that 
the required amendment at 30 CFR 938.16(h) is satisfied. Therefore, OSM 
has no basis for initiating proceedings under 30 CFR part 733.
    PennFuture raised questions on PADEP's June 5, 2003, letter 
regarding the payment of reclamation fees by underground mine 
operators.
    The 1991 rulemaking at 30 CFR 938.16(h) required Pennsylvania to 
clarify the procedures to be used for bonding the surface impacts of 
underground mines and the procedures to reclaim underground mining 
permits where the operator has defaulted on the obligation to reclaim. 
OSM imposed the requirement to clarify bonding forfeiture funding 
procedures and the responsibilities of the ABS. Bond program shortfalls 
have been documented by the 1993 Milliman & Robertson actuarial study 
and the February 2000 PADEP Assessment Report. Because PADEP has 
clarified that it has not been relying on the ABS for bond coverage for 
the surface effects of underground mines that portion of the required 
amendment has been satisfied.
    PennFuture commented that statements that underground mines are 
bonded under a CBS is erroneous because, lacking a mandatory site-
specific bond adjustment provision, Pennsylvania's approved program has 
never included a conventional SMCRA bonding system.
    We do not agree with this comment. The fact that Pennsylvania did 
not have a mandatory adjustment provision does not alter the fact that, 
under its approved program, it had been accepting conventional bonds as 
providing full bond coverage, separate from the ABS, for the surface 
effects of underground mines. We agree that Pennsylvania needs to 
modify its program to include a mandatory bond adjustment provision. 
However, imposing such a required amendment is beyond the scope of 30 
CFR 938.16(h). In any case, a commitment to propose such an amendment 
was included in the program enhancement document. In fact, the proposed 
amendment has now been received by OSM and we have published it for 
comment in a separate FR notice.
    PennFuture commented that because the authorization in 25 Pa. Code 
86.17(e) to use reclamation fees on all bond forfeiture sites is part 
of the OSM-approved State regulatory program, PADEP may not deviate 
from the terms of that program through an unwritten policy or a mere 
letter to OSM. PennFuture asserted that the plain terms of the permit 
fee regulation at 25 Pa. Code 86.17(b), approved at primacy, required 
payment of the $50 per acre fee by everyone planning to engage in 
surface mining activities (a term that included surface activities 
associated with an underground mining operation). That provision was 
deleted in 1991 and replaced with 25 Pa. Code 86.17(e), which expressly 
exempts underground operators from the permit fee requirement, but does 
not expressly prohibit the use of fee moneys to reclaim surface effects 
of underground mining. PennFuture further stated that if PADEP wants to 
place such a restriction on the use of the funds, the only way it can 
do so is through a program amendment. PennFuture believes that the 
explanation presented in PADEP's June 5, 2003, letter does not resolve, 
but rather highlights, an inconsistency between the terms of the 
approved Pennsylvania program and its implementation and that the 
inconsistency can be ``clarified'' in only one of two ways: (1) PADEP's 
elimination of the unpromulgated and unapproved restriction on the use 
of the ABS reclamation fees, or (2) PADEP's submission and our approval 
of a program amendment incorporating the restriction that PADEP claims 
to apply in practice.
    We do not agree with PennFuture's assertion that 25 Pa. Code 
86.17(b) prevented PADEP from establishing and operating within the 
boundaries of the Pennsylvania ABS. Pennsylvania's regulation at 25 Pa. 
Code 86.17(b) provided the authority to collect a permit application 
fee. When Pennsylvania deleted subsection (b) and added subsection (e) 
in 1990, it stated that ``[s]ection 86.17 is changed to clarify that 
the $50 per acre reclamation fee does not apply to the surface effects 
of underground mining.'' Volume 18, Pennsylvania Bulletin, 3385, June 
16, 1990. (Emphasis added) Since the 1990 changes ``clarified,'' rather 
than ``created,'' the reclamation fee exemption for underground 
operators, PADEP's June 5, 2003 assertion that ``[b]onding of surface 
impacts of underground mines has always been under a conventional 
bonding system'' is consistent with previously approved and currently 
approved regulations. The discretionary authority under 25 Pa. Code 
86.152 and 86.149(b)(7) provided PADEP with the option of adjusting 
bonds on sites it determined were covered by the ABS. In addition, 
there were no program restrictions preventing PADEP from allocating the 
reclamation fees collected to those sites where bonds were adjusted 
pursuant to the discretionary authority. The required amendment at 30 
CFR 938.16(h) requested that Pennsylvania clarify its existing 
procedures with regard to that process. PADEP has done so, by stating 
in its June 5, 2003, letter that underground mines are not subject to 
the reclamation fee, and that the ABS moneys are not used for 
reclaiming underground mines. We believe these statements are legally 
supported by the flexible language contained in the State's regulations 
at 25 Pa. Code 86.17 and 86.152. Moreover, and as stated above, PADEP 
is now requiring all mine permits to post a full cost reclamation bond 
and PADEP has proposed a number of enhancements, as well as an 
amendment making it clear that bond adjustment will be mandatory when 
adjustment is needed.
    PennFuture commented that the PADEP technical guidance document 
that remains in effect provides that the mine drainage treatment 
component for an underground anthracite (see PADEP Technical Guidance 
Document No. 563-2504-45 1, ``Bonding: Anthracite Underground Mines'' 
(February 15, 1997)) is limited to the cost of replacing the treatment 
system.
    We appreciate the commenter pointing out that Pennsylvania's 1997 
guidance document is not consistent with our 1997 acid mine drainage 
(AMD) policy statement issued shortly after their guidance document 
(while the Pennsylvania guidance document reflects Federal bonding 
requirements for underground mines promulgated in 1980, those 
requirements were simplified with that express provision limiting 
bonding to the cost of removing or replacing the treatment system being 
removed in 1983). However, that inappropriate limitation in the 
guidance document is not germane to the requirements of 30 CFR 
938.16(h) nor

[[Page 57810]]

our basis for proposing to remove it. Therefore, the comment is outside 
the scope of this action.
    PennFuture indicated that the program enhancements document 
suggests that PADEP will include long term treatment costs in 
calculating the water treatment component of conventional bonds, but 
the formula it provides (in Appendix 1) incongruously does not take 
into account the costs of replacing the treatment system.
    First, the approach to calculating costs for conventional bonds is 
outside the scope of the 1991 rulemaking codified at 30 CFR 938.16(h) 
and our basis for proposing to remove it. In any case, we have found 
that PADEP's approach to calculating the annual treatment cost includes 
a component for recapitalization. Our technical staff has been working 
with PADEP on refining treatment cost calculations and confirms that 
the cost of reconstructing the discharge treatment system is included. 
Please note that PADEP plans to address this issue through a specific 
guidance document that will be open to public comment. We encourage you 
to contact PADEP and notify them of your interest to review and comment 
on new and revised technical guidance documents.
    PennFuture commented that the method for calculating the bond for 
an underground mine can be ``clarified'' once and for all only if it is 
part of the OSM-approved, OSM-enforceable State regulatory program.
    Underground bond calculation procedures are part of the approved 
program. Consistent with Federal regulatory programs, States may 
implement bonding calculations and bond rates through agency 
guidelines. Pennsylvania maintains bond rate guidelines through its 
Technical Guidance Document system. We have generally not required the 
submission of those guidance documents as program amendments nor would 
we expect to unless they seemed to conflict with the approved program. 
In any case, the method for calculating the bond amount for 
conventional bonds required to be posted for the surface effects of 
underground mines is beyond the scope of this rulemaking which, as 
previously explained, is limited to the ABS.
    PennFuture commented that PADEP's June 5, 2003, submission does not 
satisfy the first requirement of 30 CFR 938.16(h) to demonstrate that 
Pennsylvania's bonding program guarantees timely and complete 
reclamation of all bond forfeiture sites. PADEP has not submitted such 
proof, and the unfolding situation with C&K Coal Company shows that it 
is unable to do so.
    Please review our responses to a number of similar comments above. 
PADEP's June 5, 2003, submission does satisfy the requirements of 30 
CFR 938.16(h). In addition, PADEP has provided a credible approach to 
addressing residual reclamation obligations covered by the ABS. These 
include the provision of $5.5 million for land reclamation, the 
conversion of active mine permits to full cost bonding, and the 
development of a long-term treatment approach to pollutional discharges 
on active and forfeited mine sites. Forfeiture situations such as those 
presented by C&K Coal Company are unfortunate and are representative of 
the types of challenges that PADEP faces as it addresses those residual 
obligations. We have committed to a cooperative partnership with PADEP 
that will target the resources of both agencies towards the 
implementation of the bond program enhancements put forth by PADEP 
under the program enhancements document. We are confident that the 
shift from the ABS to conventional bonds (which brings the Pennsylvania 
program into conformance with Federal requirements) together with 
ongoing and planned enhancements to address the residual ABS 
obligations, constitutes the best approach to resolving residual 
obligations of the ABS such as the one referenced in the comment.
    PennFuture commented that we should allow the required program 
amendment codified at 30 CFR 938.16(h) to remain in place, and should 
now institute the Parp 733 proceedings we should have initiated in 
early 1992 based on PADEP's failure to satisfy the two requirements 
codified therein.
    Please see our response above to similar comments. The required 
amendment at 30 CFR 938.16(h) has been satisfied and we have no basis 
for initiating proceedings under 30 CFR part 733.
    The following comments from PennFuture are derived from its letter 
to us dated July 25, 2003, regarding our action in terminating the 1991 
notice. As we noted above, we are identifying and responding to these 
comments only to the extent that they arguably apply to removal of the 
required amendment at 30 CFR 938.16(h) and have not already been 
addressed above.
    PennFuture stated that OSM has flip-flopped from its previous 
insistence that all forfeiture discharges receive timely treatment.
    We do not agree with this comment. We have consistently required, 
in Pennsylvania as well as other states, that any ABS must have 
sufficient assets to complete the reclamation plan of all sites covered 
by the ABS. We have consistently judged efforts to correct identified 
deficiencies in an ABS by that same standard. However, this is the 
first time we have faced a situation in which a State has decided to 
replace ABS bond coverage for new and existing permits with 
conventional bonds rather than trying to fix a deficient ABS and 
continue reliance upon it. Again, when the bond coverage being provided 
to operations as part of an approved program under 30 CFR 800.11(e) is 
determined to be insufficient, it is appropriate to require replacement 
of that bond coverage with a conventional bond posted under 30 CFR 
800.11(a) through (d). That is what OSM would do if we were to 
institute a Federal bonding program in Pennsylvania or any other State 
with an ABS. However, there is no obligation to make the bond coverage 
under subsection (e) solvent before doing so. That does not mean that 
the obligation to treat forfeiture discharges goes away. That 
obligation remains first with the permittee. Second, it resides with 
the bond coverage to the extent funds are available. However, 
Pennsylvania, or any other State, is only obligated to treat forfeiture 
discharges to the extent bond funds are available.
    PennFuture stated that by using a watershed approach to address 
primacy forfeiture discharges, OSM is attempting to hide the failure of 
PADEP and OSM to ensure full implementation of the reclamation plan for 
every primacy forfeiture site.
    We do not believe this comment is within the scope of this 
rulemaking. However, we will respond. We support PADEP's approach to 
address all mine drainage problems in the Commonwealth, including those 
from primacy forfeitures, on a watershed basis. Given the range of 
State and Federal government programs and citizen based mine drainage 
treatment efforts ongoing in Pennsylvania, PADEP must carefully 
consider each primacy forfeiture discharge in the context of all 
pollution in the watershed. Without such an approach, scarce 
programmatic and technical resources could be wasted. SMCRA and the 30 
CFR part 800 bonding regulations do not prohibit the regulatory 
authority from implementing discharge abatement activities in the 
context of an entire watershed.
    PennFuture stated that it will take years for the agencies to 
perform all the studies, calculate all the wasteload allocations, 
create the priority lists, evaluate the available funding and other 
mechanisms, and confront the hard decisions to formally abandon certain

[[Page 57811]]

primacy discharges. PennFuture stated that in the meantime, the primacy 
forfeiture discharges will continue to flow without treatment, and the 
list of them will grow longer.
    While we do not believe it is within the scope of this rulemaking, 
we agree with the comment that collecting the appropriate scientific 
information and developing effective abatement plans may require a 
considerable amount of time. However, PADEP and we have committed to a 
joint agency cooperative approach to developing watershed plans that 
will successfully abate forfeiture discharges. We acknowledge that 
until such time as a discharge abatement plan becomes effective, 
certain discharges may go untreated.
    PennFuture commented that the program enhancements document fails 
to show that sufficient financial guarantees have been or will be 
posted for active and inactive discharge sites to prevent the 
discharges from going untreated after forfeiture occurs.
    Again, while we believe this comment is outside the scope of this 
rulemaking, we will respond. PADEP has invested a great deal of effort 
in developing a remedy to the inadequacies of the classic bonding 
approach to long-term discharges. In the short-term, it has used its 
enforcement and compliance process to initiate a number of treatment 
trusts on active mine sites. It has invested staff resources in the 
development of a workable trust approach. For the long-term, PADEP has 
committed a process where operators will have to put up a separate bond 
that will provide for long-term treatment in the event of a forfeiture. 
If operators refuse or are unable to come up with the bond, PADEP will 
use its enforcement and compliance process to have the operator commit 
to building a financial assurance (trust) over a specified period of 
time. PADEP's approach is within their approved statutory and 
regulatory requirements and will take some time to be fully 
implemented. We agree that it is possible that certain sites may 
forfeit their bonds leaving insufficient funds for the immediate 
treatment of any pollutional discharges. In such cases, PADEP has 
committed to addressing the sites as part of their watershed approach 
under the Workplan.
    PennFuture commented that the bond conversion program was a 
misdirected effort because instead of focusing on the major problem of 
mine drainage treatment guarantees, PADEP conducted a multi-year effort 
to revamp parts of its program for guaranteeing land reclamation, which 
consumed considerable resources of both mine operators and PADEP staff.
    We do not agree with the comment. PADEP's plan for converting 
existing operations from the ABS to conventional bonds was designed to 
maximize the number of sites obtaining conventional bonds and minimize 
the number of forfeitures that might be triggered by the conversion 
process. It also addresses the water treatment component in a manner 
consistent with OSM's 1997 AMD policy statement as applied under 
programs with conventional bonds.
    PennFuture submitted a list of activities ongoing in the 
Pennsylvania regulatory program, in support of a contention that 
Pennsylvania's transition to a CBS is not complete. PennFuture 
commented that based upon the submitted reasons, Pennsylvania is still 
operating an ABS.
    We acknowledge that the Fund still exists. However, with regard to 
the comment and its relevance to the removal of the required amendment 
at 30 CFR 938.16(h), we note that PADEP, rather than continuing efforts 
to make the ABS solvent, is now requiring all mine permits to post a 
full cost reclamation bond. We also acknowledge that, through 
implementation of the workplan described in the enhancements document, 
PADEP is continuing efforts to further reduce the residual potential 
obligations to the Fund by obtaining other forms of financial 
guarantees for those potential obligations where possible. However, 
that does not alter the fact that the required actions described in 30 
CFR 938.16(h) are now moot because Pennsylvania chose a different 
course to address the issues raised.
    PennFuture commented that the Workplan is inconsistent with SMCRA 
because it allows primacy discharges to be lumped with all other post 
mining discharges under a prioritized reclamation approach. That 
process, PennFuture contends, is inconsistent with SMCRA. PennFuture 
further stated that, under SMCRA, primacy sites are legally distinctive 
and are not supposed to be thrown in with every other abandoned coal 
mine in the State and that the Workplan explicitly allows for primacy 
forfeiture discharges to go without treatment based on the 
unavailability of funds, and it effectively writes off some primacy 
discharges permanently because they fall below the treatment threshold 
on the priority list.
    We do not agree that the Workplan is inconsistent with SMCRA. As we 
have stated in a previous decision on a Pennsylvania bonding amendment, 
SMCRA does not prevent regulatory authorities from prioritizing 
reclamation efforts to effectively allocate staff resources or to 
improve the environmental outcome of program operations. See 56 FR 
55080, 55084 (October 24, 1991) (``To the extent that [State programs] 
provide only for a ranking of sites for reclamation without 
compromising the requirement that all sites for which bonds were posted 
be properly reclaimed, however, they are not inconsistent with * * * 
SMCRA * * *'') Likewise, there are no provisions under SMCRA or the 30 
CFR part 800 bonding regulations that prevent the regulatory authority 
implementing discharge abatement activities in the context of an entire 
watershed. OSM supports PADEP's approach to address all mine drainage 
problems in the Commonwealth, including those from primacy forfeitures, 
on a watershed basis. As we noted above, PADEP must carefully consider 
each primacy forfeiture discharge in the context of all pollution in 
the watershed. Without such an approach, programmatic and technical 
resources could be wasted. We disagree that the discharge Workplan 
would allow PADEP to ``write-off'' sites based upon a treatment 
threshold established on a priority list. We expect that some 
discharges will be addressed under abatement plans where treatment may 
not be at the specific discharge location or may be carried out in 
combination with non-primacy forfeiture discharges. However, we 
anticipate that all primacy forfeiture pollutional discharges will be 
addressed by PADEP.
    PennFuture commented that OSM has previously ruled on the 
prioritization of bond forfeiture reclamation in the October 24, 1991, 
Federal Register (56 FR 55080), when it stated that ``neither SMCRA nor 
the Federal regulations provide for prioritizing sites for reclamation, 
since both presume that site-specific bonds, together with necessary 
supplemental funding from alternative bonding systems, will be 
immediately available and adequate to cover reclamation costs for each 
site.'' 56 FR at 55084.
    In response, we note that our October 24, 1991, finding, also 
stated that prioritization would be inconsistent with SMCRA where it 
``would allow high priority sites to be reclaimed while neglecting 
lower priority sites.'' Id. The Workplan calls for reclamation, 
including water treatment, for all permanent program sites, even though 
some will have to wait longer than others, and some will be treated on 
a watershed basis. Neither of these approaches equates to a ``write-
off'' of permanent program site reclamation costs.

[[Page 57812]]

    In support of its previous comment that OSM and PADEP cannot 
``write-off'' outstanding obligations of an ABS, PennFuture referenced 
past OSM decisions in Missouri (56 FR at 21281), Kentucky (57 FR at 
37090), and West Virginia (60 FR at 51918) (codifying quoted language 
at 30 CFR 948.16(lll)).
    We do not agree that The Workplan will ``write-off'' primacy 
forfeiture discharges. The Workplan provides for PADEP to develop and 
maintain a statewide strategy and to dedicate staff resources 
expeditiously to address primacy forfeiture discharges. The Workplan 
also provides for periodic reporting on the status of the discharge 
inventory, reclamation accomplishments, and to provide us with 
information on program issues encountered during the process. In 
addition, the Workplan makes information on the statewide strategy, 
site-specific abatement plans and abatement schedules available to the 
public. We have concluded that the development of a statewide strategy 
and site-specific plans with periodic reporting and public involvement 
provides a process that will address all primacy forfeiture discharges 
in a manner that will maximize the environmental benefits on a 
watershed basis. At the same time, we reiterate an earlier response 
that pointed out that converting from an ABS that is deficient to 
conventional bonds is quite distinct from efforts to maintain and 
correct deficiencies in an ABS, as was done by Missouri, Kentucky and 
West Virginia. Again, Pennsylvania is not obligated to make its ABS 
solvent before replacing the ABS with conventional bonds.
    PennFuture commented that it disagreed with the discussion in the 
program enhancements document that dealt with bond program 
``liability'' versus ``programmatic accountability.'' PennFuture stated 
that the document makes no effort to explain the distinction between 
the State not being ``liable'' for treatment costs on bond forfeiture 
sites and it having ``programmatic accountability'' to ensure there is 
sufficient funding available for that purpose.
    While this comment is outside the scope of this rulemaking we will 
clarify the point. Again, the operator remains liable for all 
unfinished reclamation obligations, including water treatment at a 
forfeited site. The regulatory authority has an obligation to use 
forfeited and/or ABS funds to complete the reclamation plan to the 
extent funds are available. The regulatory authority also has 
programmatic accountability to assure that there are sufficient funds 
available. However, failure to fulfill its programmatic responsibility 
to assure that sufficient funds are available in the event of 
forfeiture does not make the State liable for completing the 
reclamation plan.
    Penn Future commented that the Workplan wrongly classifies Title V 
primacy bond forfeiture sites as a subset of ``[t]he universe of 
abandoned mine lands,'' and that PADEP has decided that discharges from 
primacy forfeiture sites are properly classified as nonpoint source 
discharges for TMDL purposes. Penn Future takes issue with the letter 
from the Environmental Protection Agency dated November 7, 2001, that 
discusses the use of TMDL's when addressing discharges on abandoned 
mine sites.
    While we believe this comment falls outside the scope of this rule 
making, we will address it. We disagree with the Penn Future's 
characterization of the letter with regard to the Workplan. The 
Workplan does not address whether specific discharges are point or non-
point sources. Primacy forfeiture discharges will be addressed by PADEP 
through a variety of financial and reclamation mechanisms consistent 
with Pennsylvania's approved Environmental Protection Agency (EPA) 
water quality program. The Workplan includes a commitment by PADEP to 
make discharge abatement plans available to the public. At that time, 
the public will have an opportunity to comment on the treatment of 
discharges on a site-by-site basis.
    Penn Future commented that the Workplan fails to mention any 
discharges addressed by remining or the ``rec-in-lieu'' program.
    While we believe this comment falls outside the scope of this rule 
making, we will address it. The value of remining efforts in 
Pennsylvania is well known and OSM and PADEP chose to not devote the 
considerable space needed to establish the value of the activity. 
Persons interested in the accomplishments of the remining program in 
Pennsylvania can visit the EPA website and obtain a copy of the 
document ``Coal Remining--Best Management Practices Guidance Manual'' 
(EPA 821-B-01-010). Under Section 6 of that document, there is a 
considerable amount of information on the water quality accomplishments 
of remining in Pennsylvania. Both reclamation mechanisms, and 
particularly remining, present opportunities for PADEP to address 
primacy forfeiture discharges.
    PennFuture commented that PADEP is unable to pledge future use or 
availability of certain resources as part of the discharge abatement 
Workplan. PennFuture specifically questioned the availability of 
Growing Greener grants and the 10% Set-Aside under the SMCRA Abandoned 
Mine Land Program.
    While we believe this comment falls outside the scope of this 
rulemaking, we will address it. We do not agree with the comment. The 
Workplan provides for PADEP to develop and maintain a statewide 
strategy using a number of financial and reclamation resources. Growing 
Greener Grants and the 10% Set-Aside represent potentially significant 
resources and have been used to achieve meaningful reclamation in the 
treatment of post-mining pollutional discharges. While the extent of 
their contribution will have to be determined on an annual basis, past 
accomplishments demonstrate their value to the overall Workplan 
approach to pollution abatement.
    PennFuture commented that treatment bonds and trust funds will not 
prevent future primacy forfeitures. PennFuture stated that although the 
posting of full-cost water treatment bonds or, as an alternative to 
those bonds, establishment of treatment trusts may curb the rate of 
growth of the ABS funding shortfall, they will not prevent that 
shortfall from expanding or the list of untreated primacy forfeiture 
discharges from lengthening.
    While we believe this comment is outside the scope of this 
rulemaking, we agree that bonds and trusts funds specifically covering 
the treatment of pollutional may not be a final solution for every 
discharge. However, we believe these efforts will significantly reduce 
the potential shortfall of the ABS. PADEP has invested a great deal of 
effort in developing a remedy to the inadequacies of the classic 
bonding approach to long-term discharges. In the short-term, it has 
used its enforcement and compliance process to initiate a number of 
treatment trusts on active mine sites. It has invested staff resources 
to the development of a workable trust approach. For the long-term, 
PADEP has committed to a process whereby operators will have to put up 
a separate bond that will provide for long-term treatment in the event 
of a forfeiture. If operators refuse or are unable to come up with the 
bond, PADEP will use its enforcement and compliance process to force 
the operator to commit to building a financial assurance (trust) over a 
specified period of time. This is an approach PennFuture supported in a 
request for comments on OSM's Advance Notice of Proposed Rulemaking 
published in the Federal Register on May 17, 2002 regarding AMD bonding 
issues (67 FR 35070). We

[[Page 57813]]

believe that treatment bonds and trust funds will lead to successful 
treatment of many more discharges than could be successfully treated 
employing the classic approach to conventional bonding, and will also 
remove potential obligations to the ABS.
    PCA submitted comments on July 28, 2003 (Administrative Record No. 
PA 802.37). PCA commented that it supported the removal of the required 
amendment at 30 CFR 938.16(h). However, PCA believed that it was 
important that the final rulemaking clarify the nature of the removal 
through four points. We will respond to each point in turn.
    In its first point, PCA indicated that it believes that 
Pennsylvania's proposal for financial assurances at sites with post 
mining discharges is more detailed and advanced than any proposed 
Federal regulatory requirements. PCA wanted us to state clearly that 
Pennsylvania may make changes to its proposed submission and that 
changes will be subject to public participation.
    We acknowledge PCA's support of removal of the required amendment. 
As we noted earlier, in our proposed rule of June 26, 2003, we 
requested comments on PADEP's submission of the program enhancements 
document as it related to removal of the required amendment at 30 CFR 
938.16(h). We believe that Pennsylvania has the existing statutory and 
regulatory authority to implement the provisions discussed in the 
document. As such, there is no need for the document to be submitted to 
us for processing as a program amendment under 30 CFR part 732. While 
Pennsylvania is free to make changes to the document, we will be 
closely monitoring any such changes to insure that they are based on 
Pennsylvania's approved program. Any changes that are not based on the 
approved program will be subject to the program amendment standards of 
30 CFR part 732, including public participation.
    In its second point, PCA is concerned with Pennsylvania's plans to 
move ahead with implementing a trust fund system that could put 
operators at a competitive disadvantage because it is more detailed, 
comprehensive and rigorous than other states require. PCA is also 
concerned that the trust fund system could put some operators out of 
business altogether. PCA requests that PADEP implement a treatment 
trust fund system that is no more stringent than any Federal program.
    We disagree with the premise of the comment. We believe that the 
steps PADEP is taking are consistent with Federal requirements and, as 
such, will not put Pennsylvania operators at a competitive 
disadvantage.
    In its third point, PCA indicated that there exists a bonding 
crisis in the mining industry making it difficult for operators to 
obtain bonds and it believes that surety bonding will not be available 
to address postmining discharges. PCA wants us and PADEP to acknowledge 
the need to review options in light of the bonding crisis and to ensure 
that our efforts to implement the joint workplan are designed to avoid 
further worsening of bonding difficulties.
    We acknowledge the problems operators have in securing bonds. We 
believe that the trust fund option described as part of the bonding 
enhancements document is a valid alternative that will assist operators 
in their meeting reclamation requirements without adding to the burden 
of securing conventional bonds. The trust fund provisions will also 
assist in securing the release of conventional bonds, thus assisting 
operators to secure conventional bonds for other minesites.
    In its fourth and final point, PCA indicated that operators have 
been treating discharges from minesites for years. Often, these treated 
discharges are entering streams that are severely degraded which means 
the treatment has little or no benefit to the hydrologic balance of the 
receiving watershed. In those cases, PCA indicated that it may not be 
prudent for PADEP to require operators to post a conventional bond or a 
trust fund for perpetual treatment.
    As previously stated, the operator remains liable for completing 
the reclamation plan, including water treatment, and the regulatory 
authority has a programmatic accountability to assure that adequate 
financial resources are available in the event of bond forfeiture. 
Therefore, we do not agree with this comment.

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 Pennsylvania program 
(Administrative Record No. PA 802.31). On July 3, 2003 (Administrative 
Record No. PA 802.32), MSHA's Wilkes-Barre Office wrote to us noting 
that it had no comments on the proposal.
    On July 16, 2003 (Administrative Record No. PA 802.33), MSHA's New 
Stanton Office wrote to us indicating that before a mine is abandoned, 
MSHA requires that all underground mine openings are sealed and refuse 
piles and impoundments are abandoned according to its requirements at 
30 CFR 77.215. MSHA observed that there are many impoundments in 
Pennsylvania attached to bankrupt mines that have not been abandoned. 
MSHA noted that the conversion of all active and inactive mining 
permits to a full cost conventional bond should allow Pennsylvania to 
reclaim these sites. MSHA concluded by noting that it had no objections 
to removing the required amendment at 30 CFR 938.16(h).
    We agree with MSHA's comments.

Environmental Protection Agency (EPA) Comments

    Under 30 CFR 732.17(h)(11)(i) we requested comments on the 
amendment from EPA (Administrative Record No. PA 802.31). EPA responded 
on July 17, 2003 (Administrative Record No. PA 802.34) that it appears 
that PADEP has provided sufficient information to justify removal of 
the required amendment at 30 CFR 938.16(h). EPA further indicated that 
it determined that there are no apparent inconsistencies with the Clean 
Water Act or other statutes or regulations under its jurisdiction.

V. OSM's Decision

    Based on the above findings, we are removing the required amendment 
at 30 CFR 938.16(h).

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 exempted 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

[[Page 57814]]

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 
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 13175--Consultation and Coordination With Indian Tribal 
Governments

    In accordance with Executive Order 13175, we have evaluated the 
potential effects of this rule on Federally-recognized Indian tribes 
and have determined that the rule does not have substantial direct 
effects on one or more Indian tribes, on the relationship between the 
Federal Government and Indian tribes, or on the distribution of power 
and responsibilities between the Federal Government and Indian Tribes. 
Pennsylvania does not regulate any Native Tribal lands.

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, 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. In making the determination as to whether this rule would 
have a significant economic impact, the Department relied upon 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 
Pennsylvania 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 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 
Pennsylvania 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 did not impose an 
unfounded mandate.

List of Subjects in 30 CFR Part 938

    Intergovernmental relations, Surface mining, Underground mining.

    Dated: September 18, 2003.
Brent Wahlquist,
Regional Director, Appalachian Regional Coordinating Center.

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For the reasons set out in the preamble, 30 CFR part 938 is amended as 
set forth below:

PART 938--PENNSYLVANIA

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1. The authority citation for part 938 continues to read as follows:

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


Sec.  938.16  [Amended]

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2. Section 938.16 is amended by removing and reserving paragraph (h).
[FR Doc. 03-25300 Filed 10-6-03; 8:45 am]
BILLING CODE 4310-05-P