[Federal Register Volume 68, Number 248 (Monday, December 29, 2003)]
[Proposed Rules]
[Pages 75036-75048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-31791]



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Part II





Department of the Interior





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Office of Surface Mining Reclamation and Enforcement



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30 CFR Parts 701, 773, et al.



Ownership and Control Settlement Rule; Proposed Rule

  Federal Register / Vol. 68, No. 248 / Monday, December 29, 2003 / 
Proposed Rules  

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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 701, 773, 774, 778, 843 and 847

RIN 1029-AC08


Ownership and Control Settlement Rule

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

ACTION: Proposed rule.

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SUMMARY: We, the Office of Surface Mining Reclamation and Enforcement 
(OSM), propose to amend certain provisions of our December 19, 2000, 
final ownership and control rule (hereinafter referred to as the 2000 
final rule) in order to effectuate a settlement agreement we entered 
into with the National Mining Association (NMA). Specifically, we 
propose to amend the provisions of the 2000 final rule pertaining to 
the definitions of ownership and control; permit eligibility 
determinations; eligibility for provisionally issued permits; 
improvidently issued permits; challenges to ownership or control 
listings or findings; post-permit issuance requirements for regulatory 
authorities and other actions based on ownership, control, and 
violation information; providing applicant, operator, and ownership and 
control information; improvidently issued State permits; and 
alternative enforcement. This proposed rule does not suspend any of the 
provisions of the 2000 final rule. The proposed revisions are 
authorized under the Surface Mining Control and Reclamation Act of 
1977, as amended (hereinafter referred to as SMCRA or the Act).

DATES: Written comments: We will accept written comments on the 
proposed rule until 5 p.m., Eastern Time, on February 27, 2004.
    Public hearings: Upon request, we will hold a public hearing on the 
proposed rule at a date, time, and location to be announced in the 
Federal Register before the hearing. We will accept requests for a 
public hearing until 5 p.m., Eastern Time, on January 20, 2004. If you 
wish to attend a hearing, but not speak, you should contact the person 
identified under FOR FURTHER INFORMATION CONTACT before the hearing 
date to verify that the hearing will be held. If you wish to attend and 
speak at a hearing, you should follow the procedures under ``III. 
Public Comment Procedures.''

ADDRESSES: If you wish to provide written comments, you may submit your 
comments by any one of three methods (see ``III. Public Comment 
Procedures''). We will make comments available for public viewing 
during regular business hours. You may mail or hand-deliver comments to 
the Office of Surface Mining Reclamation and Enforcement, 
Administrative Record, Room 101, 1951 Constitution Avenue, NW., 
Washington, DC 20240. You may also submit comments electronically to 
OSM at the following Internet address: [email protected].
    If you wish to comment on the information collection aspects of 
this proposed rule, submit your comments to the Office of Management 
and Budget, Office of Information and Regulatory Affairs, Attention: 
Interior Desk Officer, via e-mail to [email protected] or via 
facsimile to (202) 395-6566.
    You may submit a request for a public hearing orally or in writing 
to the person and address specified under FOR FURTHER INFORMATION 
CONTACT. We will announce the address, date and time for any hearing in 
the Federal Register before the hearing. If you are disabled and 
require special accommodation to attend a public hearing, you should 
contact the person listed under FOR FURTHER INFORMATION CONTACT.

FOR FURTHER INFORMATION CONTACT: Earl D. Bandy, Jr., Office of Surface 
Mining Reclamation and Enforcement, Appalachian Regional Coordinating 
Center, Applicant/Violator System Office, 2679 Regency Road, Lexington, 
Kentucky 40503. Telephone: (859) 260-8424 or (800) 643-9748. E-Mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background to the Proposed Rule
II. Discussion of the Proposed Rule
III. Public Comment Procedures
IV. Procedural Determinations

I. Background to the Proposed Rule

    This proposed rule would amend certain provisions of our 2000 final 
ownership and control rule published on December 19, 2000 at 65 FR 
79582. That rule, which took effect for Federal programs (i.e., SMCRA 
programs for which OSM is the regulatory authority) on January 18, 
2001, primarily addresses ownership or control of surface coal mining 
operations under section 510(c) of SMCRA. 30 U.S.C. 1260(c). Under 
section 510(c), a permit applicant is not eligible to receive a permit 
if the applicant owns or controls any surface coal mining operation 
that is in violation of SMCRA or other applicable laws. In addition to 
implementing section 510(c), the rule also addresses, among other 
things, permit application information requirements, post-permit 
issuance information requirements, entry of information into the 
Applicant/Violator System (AVS), application processing procedures, and 
alternative enforcement. See generally 65 FR 79661-71.
    On February 15, 2001, the National Mining Association (NMA) filed a 
lawsuit in the U.S. District Court for the District of Columbia in 
which it challenges the 2000 final rule on multiple grounds. National 
Mining Ass'n v. Office of Surface Mining, No. 01-366 (CKK) (D.D.C.). 
NMA's lawsuit is the latest chapter in litigation concerning ownership 
and control and related issues. Litigation in this area--involving, at 
various times, OSM, State regulatory authorities (administering OSM-
approved State programs), NMA, and environmental groups--has been 
contentious and ongoing, virtually uninterrupted, since at least 1988. 
The 2000 final rule, which we are proposing to revise, replaced a 1997 
interim final rule (62 FR 19451), which was partially invalidated by 
the U.S. Court of Appeals for the District of Columbia Circuit. 
National Mining Ass'n v. Department of the Interior, 177 F.3d 1 (D.C. 
Cir. 1999) (NMA v. DOI II). The interim final rule replaced three sets 
of predecessor regulations dating back to 1988 and 1989 (53 FR 38868 
[1988], 54 FR 8982 [1989], 54 FR 18438 [1989]), which were invalidated 
by the D.C. Circuit because the court found that one aspect of the 
rules was inconsistent with section 510(c) of the Act. National Mining 
Ass'n v. Department of the Interior, 105 F.3d 691 (D.C. Cir. 1997) (NMA 
v. DOI I). The preamble to the 2000 final rule contains a detailed 
discussion of the prior rules and the related litigation. See generally 
65 FR 79582-84.
    This ongoing cycle of litigation has created a great deal of 
regulatory uncertainty for OSM, State regulatory authorities 
(administering OSM-approved State programs), the regulated community, 
and the public in general. Thus, in an effort to introduce regulatory 
stability and bring the litigation between OSM and NMA to an end, we 
entered into negotiations with NMA in an attempt to settle NMA's 
challenge to the 2000 final rule. Ultimately, the parties were able to 
settle all of the issues presented in NMA's rule challenge. Under the 
terms of the settlement, we agreed to propose certain regulatory 
amendments `` which are the subject of this proposed rulemaking--in 
accordance with the

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Administrative Procedure Act's standard notice and comment procedures. 
We did not agree to finalize any of the provisions as proposed. We also 
agreed to publish--in this proposed rulemaking--certain clarifications 
to our preamble supporting the 2000 final rule.
    We are not obligated, as a result of the settlement agreement, to 
issue a final rule based on this proposal. We will give due 
consideration to any public comments received on the proposed rule 
before deciding whether to issue a final rule and whether to finalize 
any provisions as proposed. However, we do view this rulemaking effort 
as an opportunity to ensure that we have the tools we need to enforce 
SMCRA, clarify ambiguous provisions, and reduce any unnecessary 
reporting burdens on industry and regulatory authorities. We are 
hopeful that any final rule flowing from this proposal will introduce a 
measure of regulatory stability to an area that has been in flux since 
at least 1988. As stated earlier, this proposed rule does not suspend 
any of the provisions of the 2000 final rule.

II. Discussion of the Proposed Rule

    In this section, we discuss the proposed regulatory revisions to 
each section of the Code of Federal Regulations (CFR). The revisions 
include both those we propose in accordance with our settlement with 
NMA as well as certain non-substantive modifications that flow 
logically from the settlement proposals.
    At the end of this section, we include certain clarifications to 
the preamble to our 2000 final rule. Although these aspects of the 2000 
preamble did not impose any regulatory requirements, we agreed to 
publish clarifications as part of our settlement with NMA. Like the 
corresponding preamble provisions in the 2000 final rule, the 
clarifications we announce today do not impose regulatory requirements. 
As such, we are not seeking public comments on these issues, and we do 
not plan to address these topics again in a final rule.

30 CFR 701.5--Definitions

Control or Controller
    In the 2000 final rule, we defined control or controller in terms 
of certain relationships that establish control of a surface coal 
mining operation. We also provided examples of persons who may be, but 
are not necessarily, controllers. NMA challenged the definition on 
multiple grounds, including that the definition is vague, arbitrary and 
capricious, and contrary to NMA v. DOI II. Given the alleged vagueness 
of the definition, NMA also objected to the requirement that a permit 
applicant must list all of its controllers in the permit application.
    In order to settle this claim, we agreed to propose removing from 
the definition of control or controller at 30 CFR 701.5 the following: 
all of paragraph (3)--general partner in a partnership; all of 
paragraph (4)--person who has the ability to commit financial or real 
property assets; from paragraph (5), the phrase ``alone or in concert 
with others,'' the phrase ``indirectly or directly,'' and the list of 
examples at paragraphs (5)(i) through (5)(vi). Both parties agreed that 
if the proposed revisions were finalized, the remaining portion of the 
definition would still allow the regulatory authority to reach any 
person or entity with the ``ability'' to determine the manner in which 
a surface coal mining operation is conducted. Both parties also agreed 
that standard could encompass indirect and direct control, as well as 
control in concert with others, where there is actual ability to 
control.
    While we are proposing to remove from the regulatory text two 
categories of controllers (general partner in a partnership; person who 
has the ability to commit financial or real property assets), as well 
as the list of examples of persons who may be controllers, we stress 
that, under this proposal, all of these persons may still be 
controllers. In fact, general partners and persons who can commit 
assets are almost always controllers. See, e.g., NMA v. DOI II, 177 
F.3d at 7. However, because these persons are already covered under the 
``ability to control'' standard, we propose to remove them from the 
regulatory text in order to simplify the definition. Likewise, although 
we propose to remove the examples of controllers, these persons may 
still be controllers if they in fact have the ability to control a 
surface coal mining operation. In our experience implementing section 
510(c) of the Act since 1977, the persons identified in the examples 
are often controllers. Therefore, our discussion of these examples in 
the preamble to the 2000 final rule remains instructive, though it is 
important to remember that these examples are not exhaustive. See 65 FR 
79598-600.
    The proposed modification of the definition of control or 
controller is coupled with a proposal to remove the requirement to list 
all controllers in a permit application under current 30 CFR 778.11. 
Instead, we propose that only the natural person that is expected to 
have the greatest level of control must be disclosed as a controller. 
Permit applicants will continue to be required to include in a permit 
application the information required to be disclosed under sections 507 
and 510(c) of SMCRA. We propose this modification to the permit 
application information requirements in order to establish a ``bright 
line,'' objective standard for both applicants (who must submit certain 
information in a permit application) and regulatory authorities (who 
review applications for completeness and compliance with the Act). The 
``ability to control'' standard discussed above gives regulatory 
authorities flexibility to consider all of the relevant facts, on a 
case-by-case basis, in determining whether control is present; 
regulatory authorities also have the leeway to follow control wherever 
it may exist in a series of business relationships. However, while it 
is important for regulatory authorities to retain this flexibility and 
leeway, it is difficult, or impossible, to have an objective 
information disclosure standard based on this type of definition. By 
removing the requirement for applicants to list all of their 
controllers in a permit application, this proposal would greatly reduce 
any uncertainty or subjectivity associated with the relevant permit 
information disclosure requirements. In sum, the proposals discussed 
above would give regulatory authorities the flexibility they need to 
enforce the Act, while simultaneously making the permit information 
requirements more objective.
Own, Owner, or Ownership
    In its judicial challenge, NMA claimed that the definition of own, 
owner, or ownership at 30 CFR 701.5 in our 2000 final rule is 
inconsistent with SMCRA, arbitrary and capricious, and contrary to NMA 
v. DOI II. NMA also took issue with the ``downstream'' reach of the 
rule, as it pertains to ownership. The term ``downstream,'' as used by 
the D.C. Circuit in the NMA v. DOI I and NMA v. DOI II litigation, 
refers to surface coal mining operations that are down a corporate (or 
other business) chain from the applicant. For example, if the applicant 
has a subsidiary, the subsidiary would be considered ``downstream'' 
from the applicant; by contrast, if the applicant has a parent company, 
the parent company would generally be considered ``upstream'' from the 
applicant. NMA's claim pertained to how far downstream the regulatory 
authority can look when making a permit eligibility determination based 
on ownership (as distinct from control) of a surface coal mining 
operation.

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    In order to settle this claim, we agreed to propose revisions to 
the definition of own, owner, or ownership at current 30 CFR 701.5 and 
the provision at current 30 CFR 773.12(a)(2) that governs the 
downstream reach of the definition. The first revision is to the 
definition itself. The current definition, at 30 CFR 701.5, includes 
persons ``possessing or controlling in excess of 50 percent of the 
voting securities or other instruments of ownership of an entity.'' 
This definition could be confusing in that it uses the word 
``controlling,'' which is a separately defined term. In order to remove 
any potential confusion, we propose to add the term ``owning of 
record'' in place of ``possessing or controlling.'' The term ``owning 
of record'' is a variant of ``owners of record,'' which is found in 
section 507(b) of the Act. Thus, regulatory authorities and the 
regulated industry will be familiar with the term and its meaning. This 
proposed revision would not change the substance of the definition of 
own, owner, or ownership.
    The second proposed revision is at current 30 CFR 773.12(a)(2), 
which addresses the downstream reach of the rule. In NMA v. DOI II, the 
U.S. Court of Appeals for the Federal Circuit clearly held that we can 
deny a permit based on limitless ``downstream'' control relationships. 
NMA v. DOI II, 177 F.3d at 4-5. That is, if the applicant indirectly 
controls an operation with a violation, through its ownership or 
control of intermediary entities, it is not eligible for a permit. Id. 
at 5. The operation with a violation can be limitlessly downstream from 
the applicant. While we believe the court's logic arguably extends to 
ownership, the NMA v. DOI II decision is not entirely clear on this 
point.
    At present, the 2000 final rule allows us to reach downstream with 
regard to both ownership and control. Thus, under the current rule, we 
can deny a permit if the applicant indirectly owns an operation in 
violation of SMCRA or other applicable laws. The operation in violation 
can be infinitely downstream from the applicant--meaning that ownership 
of the operation can be indirect, through intermediary entities--as 
long as there is an uninterrupted chain of ownership between the 
applicant and the operation. NMA argued that this provision is contrary 
to the plain meaning of SMCRA and violates principles of corporate law. 
NMA claimed that ownership of a corporation does not equate to 
ownership of the corporation's assets (including mining operations). 
Thus, according to NMA, we should only be able to block a permit based 
on ownership if one of the applicant's own operations has a violation.
    While we do not necessarily agree with NMA's analysis, in order to 
settle this claim, we agreed to propose a regulatory revision at 30 CFR 
773.12(a), the effect of which would be to limit the reach of permit 
blocking based on ownership to ``one level down'' from the applicant. 
For example, if an applicant directly owns an entity with an unabated 
or uncorrected violation of SMCRA or other applicable laws--meaning 
there are no intermediary entities between the applicant and the entity 
with a violation--the applicant would not be eligible for a permit. In 
other words, the rule would reach one level down from the applicant to 
the entity the applicant owns. However, if the applicant indirectly 
owns an entity with a violation--meaning that there is at least one 
intermediary entity between the applicant and the entity with a 
violation--the applicant would not be ineligible for a permit based on 
ownership of a violator entity. Of course, the same applicant would be 
ineligible for a permit if it controlled the violator entity.
    While we do not believe this approach is compelled by SMCRA or the 
decision in NMA v. DOI II, it is a reasonable interpretation of the 
Act. Moreover, as it pertains to control, the rule will continue to 
reach limitlessly ``downstream.'' That is, in determining an 
applicant's eligibility for a permit, we may continue to consider 
violations at ``downstream'' operations, as long as there is control by 
the applicant. Because we can still deny a permit based on indirect 
control of an operation with a violation, through intermediary 
entities, the proposed modification to the downstream reach of 
ownership will not impair our ability to adequately enforce section 
510(c) of the Act.
    The proposed revision at 30 CFR 773.12(a) that pertains to the 
downstream reach of the definition of own, owner, or ownership is 
further discussed below in 30 CFR 773.12.

30 CFR 773.8--General Provisions for Review of Permit Application 
Information and Entry of Information Into AVS

    We propose to revise current 30 CFR 773.8 by removing the phrase 
``ownership and control'' from paragraph (b)(1). The proposed revision 
at (b)(1) would read: ``We will enter into AVS the information you 
submit under Sec. Sec.  778.11 and 778.12(c) of this subchapter.'' We 
note that this proposed revision would require regulatory authorities 
to enter into AVS one piece of information that they typically have not 
loaded into the system in the past: the identity of the person(s) 
responsible for submitting the Coal Reclamation Fee Report (Form OSM-1) 
and for remitting the reclamation fee payment to OSM. See current 30 
CFR 778.11(a)(4). With this one minor exception, this is a non-
substantive proposed revision that flows logically from our proposed 
revision to 30 CFR 778.11, discussed below.

30 CFR 773.9--Review of Applicant, Operator, and Ownership and Control 
Information

    We propose to revise 30 CFR 773.9 by removing the phrase 
``applicant, operator, and ownership and control'' where it occurs in 
paragraph (a). Revised paragraph (a) would read: ``We, the regulatory 
authority, will rely upon the information that you, the applicant, 
submit under Sec.  778.11 of this subchapter, information from AVS, and 
any other available information, to review your and your operator's 
business structure and ownership or control relationships.'' This non-
substantive proposed revision flows logically from our proposed 
revision to 30 CFR 778.11, discussed below.

30 CFR 773.10--Review of Permit History

    We propose to revise sections 30 CFR 773.10(b) and (c). In 
paragraph (b), we would remove the phrase ``any of your controllers 
disclosed under Sec. Sec.  778.11(c)(5) and 778.11(d)'' and replace it 
with the phrase ``your designated controller disclosed under Sec.  
778.11(d).'' Paragraph (b) would then read: ``We will also determine if 
you, your operator, or your designated controller disclosed under Sec.  
778.11(d) of this subchapter have previous mining experience.'' In 
paragraph (c), we would remove the language ``your controllers, or your 
operator's controllers'' from the first sentence and replace it with 
``or your designated controller.'' In the second sentence of paragraph 
(c), we would remove ``and was not disclosed under Sec.  778.11(c)(5) 
of this subchapter.'' Paragraph (c) would then read: ``If you, your 
operator, or your designated controller do not have any previous mining 
experience, we may conduct additional reviews under Sec.  774.11(f) of 
this subchapter. The purpose of this review will be to determine if 
someone else with mining experience controls the mining operation.'' 
These proposed revisions flow logically from our proposed revision to 
30 CFR 778.11, discussed below.

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30 CFR 773.12--Permit Eligibility Determinations

    As indicated above, under our discussion of the definition of own, 
owner, or ownership, we also propose to revise 30 CFR 773.12(a), the 
provision in the 2000 final rule that affects the ``downstream'' reach 
of the rule. Specifically, we propose to revise paragraph (a)(2) so 
that we can no longer deny a permit based on indirect ownership of a 
surface coal mining operation with a violation; but we would retain the 
right to deny a permit based on indirect control. In order to simplify 
the rule, we also propose to merge paragraphs (a)(2) and (a)(3). The 
proposed revision to paragraph (a)(2), which would remove references to 
ownership, would provide that you, a permit applicant, are not eligible 
for a permit if any surface coal mining operation that ``You or your 
operator indirectly control has an unabated or uncorrected violation 
and your control was established or the violation was cited after 
November 2, 1988.'' Thus, as explained above, with regard to ownership, 
we could only look ``one level down'' from the applicant in making a 
permit eligibility determination.
    We are also proposing to revise 30 CFR 773.12(b). Consistent with 
the D.C. Circuit's ruling on retroactivity in NMA v. DOI II, 30 CFR 
773.12(b) of our 2000 final rule provides that an applicant is eligible 
to receive a permit, notwithstanding the fact that the applicant or the 
applicant's operator indirectly owns or controls an operation with an 
unabated or uncorrected violation, if both the violation and the 
assumption of ownership or control occurred before November 2, 1988. 
However, 30 CFR 773.12(b) also provides that the applicant is not 
eligible to receive a permit under this provision if there ``was an 
established legal basis, independent of authority under section 510(c) 
of the Act, to deny the permit * * *.'' NMA challenged 30 CFR 
773.12(b), claiming that if there is an ``independent authority'' to 
deny the permit, that authority exists whether or not it is referenced 
in the regulatory language. According to NMA, the provision is 
superfluous and potentially confusing. We agree that any ``independent 
authority'' exists independent of this regulatory provision. Thus, in 
order to settle this claim, we propose to remove 30 CFR 773.12(b). 
Because we propose to remove 30 CFR 773.12(b), we also propose to 
redesignate paragraphs (c), (d), and (e) as (b), (c), and (d), 
respectively.

30 CFR 773.14--Eligibility for Provisionally Issued Permits

    Section 773.14 of our 2000 final rule allows for the issuance of a 
provisionally issued permit if the applicant meets the criteria under 
30 CFR 773.14(b). The promulgated regulatory language uses the word 
``may,'' which indicates that the regulatory authority retains 
discretion to grant a provisionally issued permit, even if the 
applicant otherwise meets the eligibility criteria at 30 CFR 773.14(b). 
While our preamble discussion is not explicit on this point, we 
intended in this context that an applicant is eligible to receive a 
provisionally issued permit under the specified circumstances. See, 
e.g., 65 FR 79618-19, 79622-24, 79632, 79634-35, and 79638.
    In order to reconcile any ambiguity, and to settle a claim brought 
by NMA, today we propose to amend our rule language at 30 CFR 773.14(b) 
to clarify that an applicant who meets the 30 CFR 773.14(b) eligibility 
criteria will be eligible for a provisionally issued permit. We stress 
that an applicant must also meet all other permit application approval 
and issuance requirements before receiving a provisionally issued 
permit and that the provisional permittee must comply with all 
performance standards. See generally 65 FR 79622.

30 CFR 773.21--Initial Review and Finding Requirements for 
Improvidently Issued Permits

    Sections 773.21 through 773.23 of our 2000 final rule set forth 
provisions relating to ``improvidently issues permits,'' which are, in 
this context, permits that we should not have issued in the first 
instance because of the applicant's ownership or control of a surface 
coal mining operation with a violation. We propose two substantive 
revisions to 30 CFR 773.21(c).
    The first revision relates to our burden of proof in making a 
preliminary finding that a permit was improvidently issued. This 
proposed revision would clarify that a preliminary finding of 
improvident issuance ``must be based on reliable, credible, and 
substantial evidence and establish a prima facie case that [the] permit 
was improvidently issued.'' This proposed revision flows from the 
related proposed revisions to 30 CFR 773.27(a), which is discussed in 
more detail below.
    We also propose to remove current 30 CFR 773.21(c)(2), which 
requires us to post notices of our preliminary findings of improvident 
permit issuance at our office closest to the permit area and on the 
Internet. This proposed revision is similar to one of our proposed 
revisions to 30 CFR 843.21; our rationale for removing these and 
similar posting requirements is set forth more fully under the 
discussion of 30 CFR 843.21, below.

30 CFR 773.22--Notice Requirements for Improvidently Issued Permits

    We propose to remove current 30 CFR 773.22(d), which contains 
similar posting requirements to those found at current 30 CFR 
773.21(c)(2), discussed above. Specifically, we propose to remove the 
requirement to post a notice of proposed suspension or rescission at 
our office closest to the permit area and on the Internet. Our 
rationale for removing these and similar posting requirements is set 
forth under the discussion of 30 CFR 843.21, below. Because we propose 
to remove paragraph (d), we further propose to redesignate current 
paragraphs (e) through (h) accordingly.

30 CFR 773.23--Suspension or Rescission Requirements for Improvidently 
Issued Permits

    We propose to revise the posting requirements contained in current 
30 CFR 773.23. Current 30 CFR 773.23(c)(2) requires us to post a final 
notice of permit suspension or rescission (which requires the holder of 
the improvidently issued permit to cease all surface coal mining 
operations on the permit) at our office closest to the permit area and 
on the Internet. As with the proposed revisions to sections 30 CFR 
773.21 and 773.22, we propose to remove the requirement to post the 
final notices on the Internet. However, because this section pertains 
to final findings (as opposed to the preliminary and proposed findings 
under sections 30 CFR 773.21 and 773.22, respectively), we propose to 
retain the requirement to post the final notice at our office closest 
to the permit area. It is appropriate to post notices of such final 
actions for public view. Our rationale for revising these and similar 
posting requirements is set forth more fully under the discussion of 30 
CFR 843.21, below.

30 CFR 773.26--How to Challenge an Ownership or Control Listing or 
Finding

    Sections 773.25 through 773.28 of our 2000 final rule set forth 
provisions for challenging ownership or control listing or findings. 
Generally speaking, an ownership or control listing arises when a 
permit applicant identifies, or ``lists,'' a person as an owner or 
controller in a permit application. That information is, in turn, 
entered into the AVS by the regulatory authority. By contrast, an

[[Page 75040]]

ownership or control finding under 30 CFR 774.11(f) constitutes a 
regulatory authority's fact-specific determination that a person owns 
or controls a surface coal mining operation.
    In its judicial challenge to our 2000 final rule, NMA claimed that 
30 CFR 773.26(a) is confusing. That section explains how and where a 
person may challenge an ownership or control listing or finding. NMA 
claimed that the provision does not clearly delineate the appropriate 
forum in which to bring a challenge. Also, NMA was concerned that the 
provision seems to refer only to applicants and permittees, but not 
other persons who are identified in the AVS as owners or controllers.
    Section 773.25 of the 2000 final rule provides that any person 
listed in a permit application or in the AVS as an owner or controller, 
or found by a regulatory authority to be an owner or controller, may 
challenge the listing or finding. As we explained in the preamble, our 
intent was, in fact, to allow any person listed in a permit application 
or in the AVS, or found to be an owner or controller, to initiate a 
challenge at any time, regardless of whether there is a pending permit 
application (or issued permit). See 65 FR 79631. Section 773.26(a) was 
not intended to limit in any way the universe of persons who may avail 
themselves of the challenge procedures under 30 CFR 773.25; rather, it 
merely specifies the procedure and forum in which to challenge an 
ownership or control listing or finding.
    Nonetheless, in order to provide greater clarity and to settle 
NMA's claim, today we propose to amend our regulations at 30 CFR 
773.26(a) to specify more clearly the forum in which to initiate an 
ownership or control challenge. The proposed revision specifies that 
challenges pertaining to a pending permit application are to be 
submitted to the regulatory authority with jurisdiction over the permit 
application. All other challenges concerning ownership or control of a 
surface coal mining operation are to be submitted to the regulatory 
authority with jurisdiction over that surface coal mining operation.
    We note that, in meeting its obligations under section 510(c) of 
the Act and the State counterparts to that provision, each State, when 
it receives a permit application, must apply its own ownership and 
control rules to determine whether the applicant owns or controls any 
surface coal mining operations with violations. See generally 65 FR 
79637. Further, we stress that an ownership or control decision by one 
State is not necessarily binding on any other State. This provision 
comports with principles of State primacy, and recognizes that not all 
States will have identical ownership and control rules.
    We also propose to add new 30 CFR 773.26(e) in partial satisfaction 
of our settlement with NMA concerning the relative burdens of proof in 
ownership or control challenges. This new provision would allow a 
person who is unsure why he or she is shown in the AVS as an owner or 
controller of a surface coal mining operation to request an explanation 
from our AVS Office. The new provision would require us to respond to 
such a request within 14 days. Our response would be informal and would 
set forth in simple terms why the person is shown in AVS. In most, if 
not all, cases, the explanation would be as simple as specifying that 
the person was found to be an owner or controller under 30 CFR 
774.11(f) (of which the person should already be aware due to that 
section's written notice requirement) or was listed as an owner or 
controller in a permit application. Understanding the basis for being 
shown in the AVS will give persons a better sense of the type of 
evidence they will need to introduce in an ownership or control 
challenge.

30 CFR 773.27--Burden of Proof for Ownership or Control Challenges

    As mentioned above, our 2000 final rule contains provisions for 
challenging ownership or control listings or findings. A successful 
challenger must prove by a preponderance of the evidence that he or she 
is not, or was not, an owner or controller. In its judicial challenge, 
NMA argued that the rule should be amended so that we must first 
demonstrate at least a prima facie case so that the challenger can know 
what evidence he or she must rebut. The preamble to our 2000 final rule 
already states:

    [I]n making a finding under final Sec.  774.11(f), the 
regulatory authority must indeed make a prima facie determination of 
ownership and control, based on the evidence available to the 
regulatory authority. In making a prima facie determination, the 
finding should include evidence of facts which demonstrate that the 
person subject to the finding meets the definition of own, owner, or 
ownership or control or controller in Sec.  701.5.
65 FR 79640.

    Nonetheless, in order to set forth more clearly the relative 
burdens of the parties, we agreed to propose regulatory revisions to 
sections 30 CFR 773.27(a) and 774.11(f), as well as a related change to 
30 CFR 773.21(c), discussed above. We also agreed to propose a new 30 
CFR 773.26(e), discussed above. The proposed revision to 30 CFR 
774.11(f), discussed further under the proposed revisions to 30 CFR 
774.11, below, clarifies that a regulatory authority's finding of 
ownership or control must be based on reliable, credible, and 
substantial evidence and establish a prima facie case of ownership or 
control. The proposed revision to 30 CFR 773.27(a) merely clarifies 
that a person can challenge either an ownership or control listing or a 
prima facie finding of ownership or control under 30 CFR 774.11(f).
    If the challenge concerns a finding of ownership or control, the 
regulatory authority bears the initial burden of establishing a prima 
facie case of ownership or control based on reliable, credible, and 
substantial evidence. (In this context, a prima facie case is one 
consisting of sufficient evidence to establish the elements of 
ownership or control and that would entitle the regulatory authority to 
prevail unless the evidence is overcome by other evidence.) If the 
challenge concerns an ownership or control listing, the regulatory 
authority's initial burden is substantially lower: the regulatory 
authority must specify only the circumstances of the listing, such as 
who listed the person, the date of the listing, and in what capacity 
the person was listed. In either type of challenge, after the 
regulatory authority meets its initial burden, the burden shifts to the 
challenger to prove, by a preponderance of the evidence, that he or she 
does not, or did not, own or control the relevant surface coal mining 
operation. The challenger bears the ultimate burden of persuasion.

30 CFR 773.28--Written Agency Decision on Challenges to Ownership or 
Control Listings or Findings

    We propose to revise the posting requirements contained in current 
30 CFR 773.28. Current 30 CFR 773.28(d) requires us to post final 
decisions on ownership and control challenges on the AVS and on the 
Internet. We propose to remove the requirement to post these decisions 
on the Internet. However, because this section pertains to final 
decisions on ownership or control challenges, we propose to retain the 
requirement to post these decision on the AVS. Because these final 
findings may have permit eligibility consequences, it is appropriate to 
make such findings publicly available by posting them on the AVS. Our 
rationale for revising these and similar posting requirements is set 
forth more fully under the discussion of 30 CFR 843.21, below.

[[Page 75041]]

30 CFR 774.11--Post-permit Issuance Requirements for Regulatory 
Authorities and Other Actions Based on Ownership, Control, and 
Violation Information

    We propose several revisions to 30 CFR 774.11 of our 2000 final 
rule, which contains, among other things, requirements for regulatory 
authorities after a permit is issued. The first proposed revision is to 
current 30 CFR 774.11(a)(3), which requires the regulatory authority to 
enter into AVS all ``[c]hanges of ownership or control within 30 days 
after receiving notice of a change.'' We propose to revise 30 CFR 
774.11(a)(3) by removing ``Changes of ownership or control'' and 
replacing it with ``Changes to information initially required to be 
provided by the applicant under 30 CFR 778.11.'' This proposed change 
flows from the proposed revision to 30 CFR 778.11, discussed under 30 
CFR 701.5 (definition of control or controller), above, and under 30 
CFR 778.11, below.
    The second proposed revision is to current 30 CFR 774.11(e). Under 
the specified circumstances, 30 CFR 774.11(c) of our 2000 final rule 
requires us to make a preliminary finding of permanent permit 
ineligibility. Section 30 CFR 774.11(d) provides for administrative 
review of the preliminary finding. Section 30 CFR 774.11(e), as 
promulgated, reads as follows: ``We must enter the results of the 
finding and any hearing into AVS.'' Confusion has arisen as to whether 
a preliminary finding must be entered into AVS before administrative 
resolution.
    To settle a claim brought by NMA, we today clarify that a finding 
of permanent permit ineligibility may only be entered into AVS if it is 
affirmed on administrative review or if the person subject to the 
finding does not seek administrative review and the time for seeking 
administrative review has expired. We propose to revise 30 CFR 
774.11(e) to effectuate this clarification. At paragraph (e), we 
propose to create a subheading ``Entry into AVS.'' Revised paragraph 
(e)(1) would then read, ``If you do not request a hearing, and the time 
for seeking a hearing has expired, we will enter our finding into 
AVS.'' Revised paragraph (e)(2) would read, ``If you request a hearing, 
we will enter our finding into AVS only if that finding is upheld by 
the Office of Hearings and Appeals.''
    The next proposed revision relates to a regulatory authority's 
finding of ownership or control. As explained above, under the 
discussion of the burden of proof provisions in 30 CFR 773.27, we 
propose to revise 30 CFR 774.11(f) to clarify that a regulatory 
authority's written finding of ownership or control must be based on 
reliable, credible, and substantial evidence and establish a prima 
facie case of ownership or control. The written finding requirement is 
found at current 774.11(f)(1); we propose to incorporate the 
requirement into revised 30 CFR 774.11(f). In the preamble to our 2000 
final rule, we already explained that a finding of ownership or control 
must be based on a prima facie determination of ownership or control 
(65 FR 79640); the proposed revision makes this requirement explicit. 
The proposed revision would add the requirement that a finding of 
ownership or control must be based on reliable, credible, and 
substantial evidence.
    Another proposed revision to 30 CFR 774.11 concerns NMA's claim 
that our 2000 final rule denies a person the right to challenge a 
decision to ``link'' it by ownership or control to a violation before 
the link is entered into AVS, which is an ``automated information 
system of applicant, permittee, operator, violation and related data 
OSM maintains to assist in implementing the Act.'' 30 CFR 701.5. In 
order to settle this claim, we agreed to propose a new paragraph (g) at 
30 CFR 774.11 and related regulatory revisions.
    The new paragraph (g) would provide that after we make a finding of 
ownership or control under 30 CFR 774.11(f), and before we enter the 
finding into AVS, we will allow the person subject to the finding 30 
days in which to submit information tending to demonstrate a lack of 
ownership or control. After reviewing any information submitted, if we 
are persuaded that the person is not an owner or controller, we will 
serve the person with a written notice to that effect; if we still find 
the person to be an owner or controller, we will enter the finding into 
AVS and require the person to satisfy the requirements of 30 CFR 
778.11(d), if appropriate. The latter two requirements--entry of the 
decision into AVS and compliance with 30 CFR 778.11(d)--are found, in 
substance, at 30 CFR 774.11(f)(2) and (f)(3); we propose to incorporate 
them into proposed sections 30 CFR 774.11(g)(1) and (g)(2). The process 
envisioned in proposed paragraph (g) will be informal and non-
adjudicatory.
    Finally, we propose to add new paragraph (h). This new paragraph 
would provide that we do not need to make a finding of ownership or 
control before entering into AVS the information that permit applicants 
are required to disclose under sections 30 CFR 778.11(b) and (c). For 
example, if we find that an applicant failed to disclose the operator 
in a permit application, we can enter the operator into AVS without 
making a finding of ownership or control. This is so because the 
applicant is required to identify the operator under section 507(b)(1) 
of the Act, 30 U.S.C. 1257(b)(1), and under 30 CFR 778.11(b)(3). 
However, proposed paragraph (h) would also make clear that the mere 
listing of a person in the AVS pursuant to 30 CFR 778.11(b) or (c) does 
not create a presumption or constitute a determination that such person 
owns or controls a surface coal mining operation. Of course, some of 
the persons required to be disclosed under sections 30 CFR 778.11(b) 
and (c) will be owners or controllers, but that is because they meet 
the definition of own, owner, or ownership or control or controller at 
30 CFR 701.5, not because they are listed in AVS. We propose to make 
non-substantive revisions to current paragraph (g) and redesignate that 
provision as paragraph (i).

30 CFR 778.11--Providing Applicant, Operator, and Ownership and Control 
Information

    We are proposing several revisions in 30 CFR 778.11. First, we 
propose to remove the term ``ownership and control'' from the heading 
of the section. Thus, the heading for 30 CFR 778.11 would be revised to 
read ``Providing applicant and operator information.'' We are proposing 
this revision largely because we are also proposing to remove current 
30 CFR 778.11(c)(5), which requires an applicant to disclose all of its 
owners and controllers in a permit application (see discussions under 
30 CFR 701.5, definition of control or controller, and below). As a 
result of this change, together with the proposed revisions discussed 
below, revised 30 CFR 778.11 would comport more closely with certain of 
the permit information requirements contained in section 507(b) of the 
Act. 30 U.S.C. 1257(b). While some of the persons identified in revised 
30 CFR 778.11 will in fact be owners or controllers, we believe the 
broad term ``applicant and operator information'' more aptly describes 
the range of information an applicant would be required to disclose 
under revised 30 CFR 778.11.
    Current 30 CFR 778.11(a)(1) requires an applicant to identify 
whether it and its operator are ``corporations, partnerships, sole 
proprietorships, or other business entities.'' We propose to add 
``associations'' to this list of business entities to conform the 
provision more closely to section 507(b)(4) of the Act. Similarly, an 
applicant must provide certain information for the persons identified 
in

[[Page 75042]]

30 CFR 778.11(c). We propose to add ``partner'' to this list of 
persons. We also propose to redesignate current 30 CFR 778.11(c)(4) as 
30 CFR 778.11(c)(5) and revise it to read ``Person who owns 10 percent 
or more of the applicant or the operator.'' These changes likewise 
comport with section 507(b)(4) of the Act.
    As we explain under the discussion of 30 CFR 701.5, above, in 
conjunction with revising the definition of control or controller, we 
propose to remove the requirement at 30 CFR 778.11(c)(5), which 
requires an applicant to identify all of its owners or controllers in a 
permit application. We propose this revision because we believe it is 
important to establish ``bright line,'' objective permit information 
requirements. Since we propose to retain a definition of control that 
vests regulatory authorities with discretion to make fact-specific 
findings of control on a case-by-case basis, it is difficult, or 
impossible, to have an objective reporting requirement based on that 
definition. Even though we propose to remove this reporting 
requirement, we are confident that the disclosure requirements at 
sections 507(b) and 510(c) of the Act will give regulatory authorities 
all the information they need to enforce section 510(c). Further, we 
note that this information is not required to be disclosed under the 
Act. We have submitted a request to the Office of Management and Budget 
that modifies the information collection requirements for Part 778 to 
reflect this proposed change.
    Finally, in litigation concerning our 2000 final rule, NMA 
challenged 30 CFR 778.11(d). This section provides that ``[t]he natural 
person with the greatest level of effective control over the entire 
proposed surface coal mining operation must submit a certification, 
under oath, that he or she controls the proposed surface coal mining 
operation.'' NMA challenged the provision on procedural and substantive 
grounds, claiming, among other things, that it is vague and raises 
self-incrimination concerns. In order to settle this claim, we propose 
to revise the regulatory language at 30 CFR 778.11(d) to clarify the 
applicability and scope of the provision.
    Particularly, we are proposing that a permit applicant must 
designate the natural person expected to have the greatest level of 
control over the entire proposed surface coal mining operation. That 
person would, in turn, sign the permit application, thereby 
acknowledging the designation. The proposed amendment would also 
clarify that a designation will not, by itself, be sufficient evidence 
on which to base the imposition of an individual civil penalty under 
sections 30 CFR 724.12 or 846.12 or an alternative enforcement action 
under sections 30 CFR 847.11 or 847.16. However, if the operation that 
the designated person controls has an unabated or uncorrected 
violation, the designated person would not be eligible to receive a 
permit under 30 CFR 773.12 or section 510(c) of SMCRA, unless he 
successfully challenges his control of the operation under sections 30 
CFR 773.25 through 773.28. See, e.g., 65 FR 79631 (explaining that even 
persons who must currently certify as to their control can, in effect, 
``de-certify'' if they can demonstrate changed circumstances).

30 CFR 843.21--Procedures for Improvidently Issued State Permits

    Section 843.21 of our 2000 final rule revised the procedures 
governing State permits that have been improvidently issued based on 
ownership or control relationships. This section provides for direct 
Federal enforcement, including notices of violation and cessation 
orders, if a State fails to take appropriate action. NMA objected to a 
provision that requires Internet posting of our initial notice that we 
have reason to believe a State permit may have been improvidently 
issued. In order to settle this claim, we agreed to propose a 
regulatory revision at paragraph (a), but we did not agree to remove 
the Internet posting requirement. The revision at paragraph (a) would 
provide that the initial notice must be based upon reliable and 
credible information. Since a finding of improvident issuance can have 
potentially serious ramifications, it is only fair that the initial 
notice be based on reliable and credible information.
    Upon further consideration, we propose to remove all Internet 
posting requirements found in the 2000 final rule. These Internet 
posting requirements can be found at current sections 30 CFR 
773.21(c)(2), 773.22(d), 773.23(c)(2), 773.28(d), 843.21(a)(2), 
843.21(c)(2), and 843.21(d). We also propose to remove the requirement 
to post certain preliminary decisions ``at our office closest to the 
permit area.'' These posting requirements are found at current sections 
30 CFR 773.21(c)(2), 773.22(d), 843.21(a)(2), and 843.21(c)(2). We 
propose to retain the requirement to post certain final decisions at 
our office closest to the permit area (or, in one instance, on AVS). 
These final decision posting requirements are found at proposed 
sections 30 CFR 773.23(c)(2), 773.28(d), and 843.21(d).
    Our inclusion of the Internet posting requirements in the first 
instance was primarily based on comments that we should expand the 
public's access to our decisions. See, e.g., 65 FR 79632. While public 
access to final decisions remains important, we have come to believe 
that the various Internet posting requirements in the 2000 final rule 
could be unduly burdensome to regulatory authorities, especially when 
public notice of final decisions can be accomplished by the less 
burdensome, conventional method of posting them at our office closest 
to the permit area. Further, regulatory authorities are already 
required to enter much of the relevant information into AVS, which is 
available to the public. Posting preliminary findings by any method 
could likewise become unduly burdensome; further, posting of 
preliminary findings is of questionable value to the public. For these 
reasons, we propose to remove all Internet and preliminary finding 
posting requirements, but retain public posting of our final decisions. 
In terms of information collection burdens on regulatory authorities, 
we note that we have not yet required the States to implement these 
posting requirements. Thus, because we propose to eliminate an 
information collection that never took effect for the States, there is 
no net change to the information collection burden.

30 CFR 847.11--Criminal Penalties

30 CFR 847.16--Civil Actions for Relief

    During the course of litigation over our 2000 final rule, NMA 
claimed that certain of the rule's ``alternative enforcement'' 
provisions unlawfully abrogate State prosecutorial discretion by making 
it mandatory for States to seek criminal penalties or institute civil 
actions for relief upon the occurrence of certain specified conditions. 
See sections 30 CFR 847.11 (criminal penalties), 847.16 (civil actions 
for relief), and 847.2(c) (requiring State regulatory programs to 
include criminal penalty and civil action provisions that are no less 
stringent than the Federal requirements). Upon further reflection, we 
agree that the regulatory authority--Federal or State--should retain 
the discretion to evaluate the severity of a violation and ultimately 
to determine whether referral for alternative enforcement is warranted. 
As such, and in order to settle NMA's claim, we propose to amend our 
regulations at sections 30 CFR 847.11 and 847.16 to remove the 
mandatory nature of referrals for alternative enforcement. We propose 
to accomplish this by changing the word ``will'' to ``may'' in the 
operative provisions to underscore that

[[Page 75043]]

a regulatory authority ``may,'' but is not obligated to, refer a 
particular matter for alternative enforcement.

Clarifications to the Preamble to Our 2000 Final Ownership and Control 
Rule

    As explained above, as part of our settlement with NMA, we agreed 
to publish certain clarifications to the preamble supporting our 2000 
final rule. Like the corresponding preamble provisions in our 2000 
final rule, the clarifications we announce today do not impose 
regulatory requirements. As such, we are not seeking public comments on 
these issues, and we do not plan to address these topics again in a 
final rule.
    1. In NMA v. DOI I, the court of appeals explained that, as a 
general rule, we may not deny a permit based on violations of persons 
who own or control the applicant (so-called ``upstream'' owners and 
controllers). However, the court explained: ``OSM has leeway in 
determining who the applicant is. As [NMA] concedes, OSM has the 
authority, in instances where there is subterfuge, to pierce the 
corporate veil in order to identify the real applicant.'' NMA v. DOI I, 
105 F.3d at 695. Thus, the court held, ``once OSM has determined that 
it has the true applicant before it, OSM's power is constrained by the 
specific statutory language of section 510(c)--only those violations of 
operations owned or controlled by the applicant are relevant.'' Id.
    At 65 FR 79609 through 79611 of the preamble of our 2000 final 
ownership and control rule, there is substantial discussion of the 
``true applicant'' concept and a related discussion of corporate veil-
piercing. In that portion of the 2000 final rule's preamble, our intent 
was to explain why we chose not to define the term ``true applicant,'' 
as well as to identify a non-exclusive list of theories that may be 
available to a regulatory authority in attempting to ascertain the 
identity of the true applicant. This general preamble language was not 
intended to impose any regulatory requirement on regulatory 
authorities.
    Nonetheless, confusion has arisen as to whether we are directing 
State regulatory authorities, via preamble language, to use any of the 
identified theories to identify the true applicant. To settle a claim 
brought by NMA in its judicial challenge to our 2000 final rule, we 
today clarify that we are not directing State regulatory authorities to 
use any of the three identified tools, or any other particular means, 
in ascertaining whether the nominal permit applicant is also the true 
applicant. Should a State attempt to pierce a corporate veil or 
otherwise ascertain the identity of the true applicant, it is for the 
State to decide which legal authorities it can and will advance. 
Ultimately, however, each permitting authority--whether State or 
Federal--must be satisfied that it indeed has the ``true applicant 
before it.'' NMA v. DOI I, 105 F.3d at 695. As we stated in the 
preamble of the 2000 final rule:

    In most cases, the nominal applicant (the person whose name 
appears on the permit application) will also be the true applicant. 
* * * However, if the regulatory authority has reason to believe 
that the nominal applicant is not the true applicant, the regulatory 
[authority] should conduct an investigation to determine the 
identity of the true applicant. In short, each regulatory authority 
should consider the totality of circumstances in determining whether 
the nominal applicant is also the true applicant.

65 FR 79610-11.
    2. Section 773.12 of our 2000 final rule requires regulatory 
authorities to determine whether permit applicants are eligible to 
receive a permit under section 510(c) of SMCRA, based on certain 
ownership or control relationships. At 65 FR page 79616 of the 
preamble, in response to public comments, we explained that permit 
revisions and renewals are not necessarily exempt from the requirements 
of section 510(c) of SMCRA. Specifically, we stated that regulatory 
authorities may evaluate all permitting actions, including revisions 
and renewals, for eligibility under section 510(c). Confusion has 
arisen as to whether we are directing States to conduct a section 
510(c) permit eligibility review for permit revisions and renewals.
    To settle a claim brought by NMA, today we clarify that we are not 
requiring States to conduct such a review for permit renewals and 
revisions other than transfers, assignments, or sales of permit rights 
under 30 CFR 774.17. However, in our view, States retain the discretion 
to require section 510(c) reviews for any revision or renewal. 
Nonetheless, we do not believe a section 510(c) review is necessarily 
warranted when a regulatory authority orders a revision under 30 CFR 
774.10. In that circumstance, we believe that it would make little 
sense to conduct a section 510(c) review if such a review would 
preclude the permittee from correcting the problem that resulted in 
issuance of the revision order. Other than the clarification we 
announce today, the 2000 final rule's preamble discussion on this 
topic, including the legal rationale supporting our position, remains 
in force.

III. Public Comment Procedures

    Electronic or Written Comments: If you submit written comments, 
they should be specific, confined to issues pertinent to the proposed 
rule, and explain the reason for any recommended change(s). We 
appreciate any and all comments, but those most useful and likely to 
influence decisions on a final rule will be those that either involve 
personal experience or include citations to and analyses of SMCRA, its 
legislative history, its implementing regulations, case law, other 
pertinent State or Federal laws or regulations, technical literature, 
or other relevant publications.
    Except for comments provided in an electronic format, you should 
submit three copies of your comments if practicable. We will not 
consider anonymous comments. Comments received after the close of the 
comment period (see DATES) or at locations other than those listed 
above (see ADDRESSES) will not be considered or included in the 
Administrative Record.
    Availability of Comments: Our practice is to make comments, 
including names and home addresses of respondents, available for public 
review during regular business hours at the OSM Administrative Record 
Room (see ADDRESSES). Individual respondents may request that we 
withhold their home address from the rulemaking record. We will honor 
this request to the extent allowable by law. There also may be 
circumstances in which we would withhold from the rulemaking record a 
respondent's identity, to the extent allowed by law. If you wish us to 
withhold your name and/or address, you must state this prominently at 
the beginning of your comment. We will make all submissions from 
organizations or businesses, and from individuals identifying 
themselves as representatives or officials of organizations or 
businesses, available for public inspection in their entirety.
    Public hearings: We will hold a public hearing on the proposed rule 
upon request only. The time, date, and address for any hearing will be 
announced in the Federal Register at least 7 days prior to the hearing.
    Any person interested in participating in a hearing should inform 
Mr. Earl Bandy (see FOR FURTHER INFORMATION CONTACT), either orally or 
in writing by 5 p.m., Eastern time, on January 20, 2004. If no one has 
contacted Mr. Bandy to express an interest in participating in a 
hearing by that date, a hearing will not be held. If only one person 
expresses an interest, a public meeting rather than a

[[Page 75044]]

hearing may be held, with the results included in the Administrative 
Record.
    The public hearing will continue on the specified date until all 
persons scheduled to speak have been heard. If you are in the audience 
and have not been scheduled to speak and wish to do so, you will be 
allowed to speak after those who have been scheduled. We will end the 
hearing after all persons scheduled to speak and persons present in the 
audience who wish to speak have been heard. To assist the transcriber 
and ensure an accurate record, we request, if possible, that each 
person who speaks at a public hearing provide us with a written copy of 
his or her testimony.
    Public meeting: If there is only limited interest in a hearing at a 
particular location, a public meeting, rather than a public hearing, 
may be held. Persons wishing to meet with us to discuss the proposed 
rule may request a meeting by contacting the person listed under FOR 
FURTHER INFORMATION CONTACT. All meetings will be open to the public 
and, if possible, notice of the meetings will be posted at the 
appropriate locations listed under ADDRESSES. A written summary of each 
public meeting will be made a part of the administrative record of this 
rulemaking.

IV. Procedural Determinations

Executive Order 12866--Regulatory Planning and Review

    This document is not a significant rule and is not subject to 
review by the Office of Management and Budget under Executive Order 
12866.
    a. This rule will not have an effect of $100 million or more on the 
economy. It will not adversely affect in a material way the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or Tribal governments or communities. The 
revisions to the provisions governing the section 510(c) review 
required by SMCRA and related provisions will not have an adverse 
economic impact on the coal industry or State regulatory authorities. 
It may in fact reduce expenses for the coal industry and States by 
reducing the reporting and posting requirements contained in our 
existing regulations.
    b. This rule will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency.
    c. This rule does not alter the budgetary effects of entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients.
    d. This rule does not raise novel legal or policy issues.

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.). 
As previously stated, the revisions to the existing provisions may 
reduce the cost of doing business for the regulated industry and State 
regulatory authorities. Further, the rule produces no adverse effects 
on competition, employment, investment, productivity, innovation, or 
the ability of United States enterprises to compete with foreign-based 
enterprises in domestic or export markets.

Small Business Regulatory Enforcement Fairness Act

    For the reasons previously stated, this rule is not a major rule 
under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement 
Fairness Act. This rule:
    a. Does not have an annual effect on the economy of $100 million or 
more.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises for 
the reasons stated above.

Unfunded Mandates

    This rule does not impose an unfunded mandate on State, local, or 
Tribal governments or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State, 
Tribal, or local governments or the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1501 et seq.) is not required.

Executive Order 12630--Takings

    In accordance with Executive Order 12630, the rule does not have 
significant takings implications. The revisions being proposed are 
procedural in nature and do not affect the use or value of private 
property.

Executive Order 12988--Civil Justice Reform

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

Executive Order 13132--Federalism

    In accordance with Executive Order 13132, the rule does not have 
significant Federalism implications to warrant the preparation of a 
Federalism Assessment for the reasons discussed above.

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 proposed revisions pertaining to section 
510(c) reviews required by SMCRA and related provisions would not have 
substantial direct effects 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.

Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This rule is not considered a significant energy action under 
Executive Order 13211. The revisions to the provisions governing the 
section 510(c) review required by SMCRA and related provisions would 
not have a significant effect on the supply, distribution, or use of 
energy.

Paperwork Reduction Act

    In accordance with 44 U.S.C. 3507(d), OSM has submitted the 
information collection and recordkeeping requirements of 30 CFR part 
778 to the Office of Management and Budget (OMB) for review and 
approval.
30 CFR Part 778
    Title: Permit Applications--Minimum Requirements for Legal, 
Financial, Compliance, and Related Information--30 CFR 778.
    OMB Control Number: 1029-XXX3.
    Summary: Sections 507(b) and 510(c) of Pub. L. 95-87 provide that 
applicants for permits to engage in or carry out surface coal mining 
operations must submit certain information to the regulatory authority 
in a permit application. The required disclosures include information 
about the applicant's legal identity, business structure and business 
relationships, permit and violation histories, and related information. 
This information is used to ensure all legal, financial and compliance 
requirements are satisfied prior to issuance or denial of a permit.
    Bureau Form Number: None.
    Frequency of Collection: Once.

[[Page 75045]]

    Description of Respondents: 301 Surface coal mining permit 
applicants and 24 State regulatory authorities.
    Total Annual Responses: 2,388.

                                   Information Collection for 30 CFR Part 778
----------------------------------------------------------------------------------------------------------------
                                                                                     Hours per
                     Section                        Respondents      Responses       response       Total hours
----------------------------------------------------------------------------------------------------------------
778.9...........................................             301             888            1.15           1,024
778.11..........................................             301             376            1.4              526
778.12..........................................             301              75            2.4              180
778.13..........................................             301              75            2.4              180
778.14..........................................             301              45            2.6              120
778.15..........................................             324             324            5.6            1,806
778.16..........................................             213             213            8              1,710
778.17..........................................             324             324            2.8              903
778.22..........................................              68              68            2                135
                                                 ---------------------------------------------------------------
    Totals......................................             301           2,388            2.75           6,584
----------------------------------------------------------------------------------------------------------------

    Total Annual Burden Hours: 6,584.
    Comments are invited on:
    (a) Whether the proposed collection of information is necessary for 
the proper performance of OSM and State regulatory authorities, 
including whether the information will have practical utility;
    (b) The accuracy of OSM's estimate of the burden of the proposed 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (d) Ways to minimize the burden of collection on the respondents.
    Under the Paperwork Reduction Act, OSM must obtain OMB approval of 
all information and recordkeeping requirements. No person is required 
to respond to an information collection request unless the form or 
regulation requesting the information has a currently valid OMB control 
(clearance) number. This number appears in section 778.8 of 30 CFR part 
778. To obtain a copy of OSM's information collection clearance 
requests, explanatory information, and related forms, contact John A. 
Trelease at (202) 208-2783 or by e-mail at [email protected].
    By law, OMB must respond to OSM's request for approval within 60 
days of publication of this proposed rule, but may respond as soon as 
30 days after publication. Therefore, to ensure consideration by OMB, 
you must send comments regarding these burden estimates or any other 
aspect of these information collection and recordkeeping requirements 
by January 28, 2004, to the Office of Management and Budget, Office of 
Information and Regulatory Affairs, Attention: Interior Desk Officer, 
via e-mail to [email protected], or via facsimile to (202) 395-
6566. Also, please send a copy of your comments to John A. Trelease, 
Office of Surface Mining Reclamation and Enforcement, 1951 Constitution 
Ave, NW., Room 210--SIB, Washington, DC 20240, or electronically to 
[email protected].

National Environmental Policy Act

    OSM has reviewed this rule and determined that it is categorically 
excluded from the National Environmental Policy Act process in 
accordance with the Departmental Manual 516 DM 2, Appendix 1.10.

How Will This Rule Affect State and Indian Programs?

    Following publication of a final rule, we will evaluate the State 
and Indian programs approved under section 503 of SMCRA to determine 
any changes in those programs that may be necessary. When we determine 
that a particular State program provision should be amended, the 
particular State will be notified in accordance with the provisions of 
30 CFR 732.17. On the basis of the proposed rule, we have made a 
preliminary determination that State program revisions will be 
required.

Clarity of This Regulation

    Executive Order 12866 requires each agency to write regulations 
that are easy to understand. We invite your comments on how to make 
this proposed rule easier to understand, including answers to questions 
such as the following: (1) Are the requirements in the proposed rule 
clearly stated? (2) Does the proposed rule contain technical language 
or jargon that interferes with its clarity? (3) Does the format of the 
proposed rule (grouping and order of sections, use of headings, 
paragraphing, etc. aid or reduce its clarity? (4) Would the rule be 
easier to understand if it were divided into more (but shorter) 
sections (a ``section'' appears in bold type and is preceded by the 
symbol ``Sec. '' and a numbered heading; for example, Sec.  773.14)? 
(5) Is the description of the proposed rule in the SUPPLEMENTARY 
INFORMATION section of this preamble helpful in understanding the 
proposed rule? (6) What else could we do to make the proposed rule 
easier to understand? Send a copy of any comments that concern how we 
could make this proposed rule easier to understand to: Office of 
Regulatory Affairs, Department of the Interior, Room 7229, 1849 C 
Street, NW., Washington, DC 20240. You may also e-mail the comments to 
this address: [email protected].

List of Subjects

30 CFR Part 701

    Law enforcement, Surface mining, Underground mining.

30 CFR Part 773

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

30 CFR Part 774

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

30 CFR Part 778

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

30 CFR Part 843

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

[[Page 75046]]

30 CFR Part 847

    Administrative practice and procedure, Penalties, Surface mining, 
Underground mining.

    Dated: December 19, 2003.
Patricia E. Morrison,
Acting Assistant Secretary, Land and Minerals Management.

    For the reasons given in the preamble, OSM proposes to amend 30 CFR 
Parts 701, 773, 774, 778, 843, and 847 as set forth below:

PART 701--PERMANENT REGULATORY PROGRAM

    1. The authority citation for part 701 continues to read as 
follows:

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

    2. Amend Sec.  701.5 as follows:
    a. Revise the definition of control or controller.
    b. Revise the definition of own, owner, or ownership.
    The revised definitions read as follows.


Sec.  701.5  Definitions.

* * * * *
    Control or controller, when used in parts 773, 774, and 778 and 
Sec.  843.21 of this chapter, refers to or means--
    (1) A permittee of a surface coal mining operation;
    (2) An operator of a surface coal mining operation; or
    (3) Any other person who has the ability to determine the manner in 
which a surface coal mining operation is conducted.
* * * * *
    Own, owner, or ownership, as used in parts 773, 774, and 778 and 
Sec.  843.21 of this chapter (except when used in the context of 
ownership of real property), means being a sole proprietor or owning of 
record in excess of 50 percent of the voting securities or other 
instruments of ownership of an entity.
* * * * *

PART 773--REQUIREMENTS FOR PERMITS AND PERMIT PROCESSING

    3. The authority citation for part 773 continues to read as 
follows:

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

    4. In Sec.  773.8, revise paragraph (b)(1) to read as follows:


Sec.  773.8  General provisions for review of permit application 
information and entry of information into AVS.

* * * * *
    (b) * * *
    (1) The information you submit under Sec. Sec.  778.11 and 
778.12(c) of this subchapter.
* * * * *
    5. In Sec.  773.9, revise paragraph (a) to read as follows:


Sec.  773.9  Review of applicant, operator, and ownership and control 
information.

    (a) We, the regulatory authority, will rely upon the information 
that you, the applicant, submit under Sec.  778.11 of this subchapter, 
information from AVS, and any other available information, to review 
your and your operator's business structure and ownership or control 
relationships.
* * * * *
    6. In Sec.  773.10, revise paragraphs (b) and (c) to read as 
follows:


Sec.  773.10  Review of permit history.

* * * * *
    (b) We will also determine if you, your operator, or your 
designated controller disclosed under Sec.  778.11(d) of this 
subchapter have previous mining experience.
    (c) If you, your operator, or your designated controller do not 
have any previous mining experience, we may conduct additional reviews 
under Sec.  774.11(f) of this subchapter. The purpose of this review 
will be to determine if someone else with mining experience controls 
the mining operation.
    7. In Sec.  773.12, revise paragraphs (a)(1) and (a)(2), remove 
paragraphs (a)(3) and (b), and redesignate paragraphs (c), (d) and (e) 
as paragraphs (b), (c), and (d), respectively, to read as follows:


Sec.  773.12  Permit eligibility determination.

    (a) * * *
    (1) You directly own or control has an unabated or uncorrected 
violation; or
    (2) You or your operator indirectly control has an unabated or 
uncorrected violation and your control was established or the violation 
was cited after November 2, 1988.
* * * * *
    8. In Sec.  773.14, revise paragraph (b) introductory text to read 
as follows:


Sec.  773.14  Eligibility for provisionally issued permits.

* * * * *
    (b) We, the regulatory authority, will find you eligible for a 
provisionally issued permit under this section if you demonstrate that 
one or more of the following circumstances exists with respect to all 
violations listed in paragraph (a) of this section--
* * * * *
    9. In Sec.  773.21, revise paragraph (c) to read as follows:


Sec.  773.21  Initial review and finding requirements for improvidently 
issued permits.

* * * * *
    (c) When we make a preliminary finding under paragraph (a) of this 
section, we must serve you with a written notice of the preliminary 
finding, which must be based on reliable, credible, and substantial 
evidence and establish a prima facie case that your permit was 
improvidently issued.
* * * * *
    10. Amend Sec.  773.22 by removing paragraph (d) and redesignating 
paragraphs (e), (f), (g) and (h) as (d), (e) (f), and (g), 
respectively.
    11. In Sec.  773.23, revise paragraph (c)(2) to read as follows:


Sec.  773.23  Suspension or rescission requirements for improvidently 
issued permits.

* * * * *
    (c) * * *
    (2) Post the notice at our office closest to the permit area.
* * * * *
    12. In Sec.  773.26, revise the table in paragraph (a) and add 
paragraph (e) to read as follows:


Sec.  773.26  How to challenge an ownership or control listing or 
finding.

* * * * *
    (a) * * *

------------------------------------------------------------------------
                                        then you must submit a written
   If the challenge concerns . . .           explanation to . . .
------------------------------------------------------------------------
(1) A pending State or Federal        the regulatory authority with
 permit application . . .              jurisdiction over the
                                       application.
(2) Your ownership or control of a    the regulatory authority with
 surface coal mining operation, and    jurisdiction over the surface
 you are not currently seeking a       coal mining operation.
 permit . . .
------------------------------------------------------------------------

* * * * *
    (e) At any time, you, a person listed in AVS as an owner or 
controller of a surface coal mining operation, may request an 
explanation from the AVS Office as to the reason you are shown in AVS 
in an ownership or control capacity. Within 14 days of your request, 
the AVS Office will provide a response describing why you are listed in 
AVS.
    13. In Sec.  773.27, revise paragraph (a) to read as follows:


Sec.  773.27  Burden of proof for ownership or control challenges.

* * * * *

[[Page 75047]]

    (a) When you challenge a listing of ownership or control or a prima 
facie finding of ownership or control made under Sec.  774.11(f) of 
this subchapter, you must prove by a preponderance of the evidence that 
you either--
    (1) Do not own or control the entire surface coal mining operation 
or relevant portion or aspect thereof; or
    (2) Did not own or control the entire surface coal mining operation 
or relevant portion or aspect thereof during the relevant time period.
* * * * *
    14. In Sec.  773.28, revise paragraph (d) to read as follows:


Sec.  773.28  Written agency decision on challenges to ownership or 
control listings or findings.

* * * * *
    (d) We will post all decisions made under this section on AVS.
* * * * *

PART 774--REVISION; RENEWAL; TRANSFER, ASSIGNMENT, OR SALE OF 
PERMIT RIGHTS; POST-PERMIT ISSUANCE REQUIREMENTS; AND OTHER ACTIONS 
BASED ON OWNERSHIP, CONTROL, AND VIOLATION INFORMATION

    15. The authority citation for part 774 continues to read as 
follows:

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

    16. In Sec.  774.11, revise paragraphs (a)(3), (e), (f), 
redesignate paragraph (g) as paragraph (i), add new paragraphs (g) and 
(h), and revise newly designated paragraph (i) to read as follows:


Sec.  774.11  Post-permit issuance requirements for regulatory 
authorities and other actions based on ownership, control, and 
violation information.

    (a) * * *

------------------------------------------------------------------------
     We must enter into AVS all . . .        within 30 days  after . . .
------------------------------------------------------------------------
 
                                * * * * *
(3) Changes to information initially        receiving notice of a
 required to be provided by the applicant    change.
 under 30 CFR 778.11.
 
                                * * * * *
------------------------------------------------------------------------

* * * * *
    (e) Entry into AVS. (1) If you do not request a hearing, and the 
time for seeking a hearing has expired, we will enter our finding into 
AVS.
    (2) If you request a hearing, we will enter our finding into AVS 
only if that finding is upheld by the Office of Hearings and Appeals.
    (f) At any time, we may identify any person who owns or controls an 
entire operation or any relevant portion or aspect thereof. If we 
identify such a person, we must issue a written finding to the person 
and the applicant or permittee describing the nature and extent of 
ownership or control; our written finding must be based on reliable, 
credible, and substantial evidence and establish a prima facie case of 
ownership or control.
    (g) After we issue a written finding under paragraph (f) of this 
section, we will allow you, the person subject to the finding, 30 days 
in which to submit any information tending to demonstrate your lack of 
ownership or control. If, after reviewing any information you submit, 
we are persuaded that you are not an owner or controller, we will serve 
you a written notice to that effect. If, after reviewing any 
information you submit, we still find that you are an owner or 
controller or if you do not submit any information within the 30-day 
period, we must--
    (1) Enter our finding under paragraph (f) of this section into AVS; 
and
    (2) Require you to satisfy the requirements of Sec.  778.11(d) of 
this subchapter, if appropriate.
    (h) We need not make a finding as provided for under paragraph (f) 
of this section before entering into AVS the information required to be 
disclosed under Sec. Sec.  778.11(b) and (c) of this subchapter; 
however, the mere listing of a person in the AVS pursuant to Sec. Sec.  
778.11(b) or (c) does not create a presumption or constitute a 
determination that such person owns or controls a surface coal mining 
operation.
    (i) If we identify you as an owner or controller under paragraph 
(f) of this section, you may challenge the finding using the provisions 
of Sec. Sec.  773.25, 773.26 and 773.27 of this subchapter.

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

    17. The authority citation for part 778 continues to read as 
follows:

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

    18. In Sec.  778.11, revise the section heading and paragraphs 
(a)(1), (c)(2), (c)(3), (c)(4), (c)(5) and (d) to read as follows:


Sec.  778.11  Providing applicant and operator information.

    (a) * * *
    (1) A statement indicating whether you and your operator are 
corporations, partnerships, associations, sole proprietorships, or 
other business entities;
* * * * *
    (c) * * *
    (2) Partner.
    (3) Director.
    (4) Person performing a function similar to a director.
    (5) Person who owns 10 percent or more of the applicant or the 
operator.
    (d) In the permit application, you must designate the natural 
person expected to have the greatest level of control over the entire 
proposed surface coal mining operation. That person must also sign the 
permit application, acknowledging the designation. Such designation 
will not, by itself, be sufficient evidence on which to base the 
imposition of an individual civil penalty under Sec. Sec.  724.12 or 
846.12 or an alternative enforcement action under Sec. Sec.  847.11 or 
847.16 of this chapter.
* * * * *

PART 843--FEDERAL ENFORCEMENT

    19. The authority citation for part 843 continues to read as 
follows:

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

    20. In Sec.  843.21, revise paragraphs (a) and (d), remove 
paragraph (c)(2), redesignate paragraph (c)(3) as paragraph (c)(2), to 
read as follows:


Sec.  843.21  Procedures for improvidently issued State permits.

    (a) Initial notice. If we, OSM, on the basis of any reliable and 
credible information available to us, including any such information 
submitted by any person, have reason to believe that a State-issued 
permit meets the criteria for an improvidently issued permit under 
Sec.  773.21 of this chapter, or the State regulatory program 
equivalent, and the State has failed to take appropriate action on the 
permit under the State regulatory program equivalents of Sec. Sec.  
773.21 through 773.23 of this chapter, we must issue a notice, by 
certified mail, to the State, to you, the permittee, and to any person 
providing information under paragraph (a) of this section. The notice 
will state in writing the reasons for our belief that your permit was 
improvidently issued. The notice also will request the State to take 
the appropriate action, as specified in paragraph (b) of this section, 
within 10 days.
* * * * *
    (d) Federal inspection and written finding. No less than 10 days 
but no more than 30 days after providing notice under paragraph (c) of 
this section, we will conduct an inspection and make a written finding 
as to whether your

[[Page 75048]]

permit was improvidently issued under the criteria in Sec.  773.21 of 
this chapter. In making that finding, we will consider all available 
information, including information submitted by you, the State, or any 
other person. We will post that finding at our office closest to the 
permit area. If we find that your permit was improvidently issued, we 
must issue a notice to you and the State by certified mail. The notice 
will state in writing the reasons for our finding under this section.
* * * * *

PART 847--ALTERNATIVE ENFORCEMENT

    21. The authority citation for part 847 continues to read as 
follows:

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

    22. In Sec.  847.11, revise the introductory text to read as 
follows:


Sec.  847.11  Criminal penalties.

    Under sections 518(e) and (g) of the Act, we, the regulatory 
authority, may request the Attorney General to pursue criminal 
penalties against any person who--
* * * * *
    23. In Sec.  847.16, revise paragraph (a) introductory text to read 
as follows:


Sec.  847.16  Civil actions for relief.

    (a) Under section 521(c) of the Act, we, the regulatory authority, 
may request the Attorney General to institute a civil action for relief 
whenever you, the permittee, or your agent--
* * * * *
[FR Doc. 03-31791 Filed 12-24-03; 8:45 am]
BILLING CODE 4310-05-P