[Federal Register Volume 69, Number 180 (Friday, September 17, 2004)]
[Rules and Regulations]
[Pages 56122-56131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20997]



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Part III





Department of the Interior





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Office of Surface Mining Reclamation and Enforcement



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30 CFR Parts 870 and 872



Coal Production Fees and Fee Allocations; Final Rule and Proposed Rule

  Federal Register / Vol. 69, No. 180 / Friday, September 17, 2004 / 
Rules and Regulations  

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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 870

RIN 1029-AC46


Coal Production Fees

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

ACTION: Final rule.

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SUMMARY: This rule sets forth the criteria and procedures that we will 
use to establish fees under the Surface Mining Control and Reclamation 
Act of 1977 (SMCRA or the Act) for coal produced after September 30, 
2004, when the current statutory fees expire. We also are providing 
notice of the fees established for FY 2005. We are establishing the fee 
at a rate to provide for the transfer from the Abandoned Mine 
Reclamation Fund (AML Fund or the Fund) to the Combined Benefit Fund 
(CBF), a total expected to be approximately $69 million for FY 2005. 
The fees necessary to generate the transfer amount are established as 
follows for each ton of coal produced for sale, transfer, or use: 
Surface-mined coal (except lignite), 8.8 cents per ton; Underground-
mined coal (except lignite), 3.8 cents per ton; and, Lignite, 2.5 cents 
per ton.
    We also are publishing in today's Federal Register a proposed rule 
that includes the changes made in this final rule as well as some 
additional issues related to the fee and the AML Fund.

DATES: This rule is effective September 17, 2004.

FOR FURTHER INFORMATION CONTACT: Dennis Rice, Office of Surface Mining 
Reclamation and Enforcement, 1951 Constitution Avenue, NW., Washington, 
DC 20240. Telephone: (202) 208-2829. E-mail address: [email protected]. 
You will find additional information concerning OSM, fees on coal 
production, and abandoned mine reclamation on our home page at http://www.osmre.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background information
    A. What Is the History of the SMCRA Fee on Coal Production?
    B. What Is the CBF?
    C. Why Do we Transfer Monies From the AML Fund to the CBF and 
How Do We Determine the Amount To Transfer?
II. What Is the Rationale for Our Determination of the Total Amount 
of Fees To Be Collected Each Year Under This rule?
III. What Will This Rule Accomplish?
IV. What Alternatives Did We Consider?
V. What Is the Rationale for the Cap on Annual Transfers to the CBF?
VI. Will the Fees Collected Continue To Be Feposited Into the AML 
Fund?
VII. What Are the Fees for Coal Produced in FY 2005?
VIII. Why Are We Publishing a Proposed Rule at the Same Time as the 
Final Rule?
IX. Why are We Publishing This Rule as a Final Rule Without 
Opportunity for Comment?
X. Procedural Matters

I. Background Information

A. What Is the History of the SMCRA Fee on Coal Production?

    Title IV of SMCRA created an abandoned mine land reclamation 
program funded by a fee, known as the reclamation fee, assessed on each 
ton of coal produced for sale, transfer, or use (produced). The fees 
collected are placed in the AML Fund. We, either directly or through 
grants to States and Indian tribes with approved AML reclamation plans 
under SMCRA, use appropriations from the Fund primarily to reclaim 
lands and waters adversely impacted by mining conducted before the 
enactment of SMCRA and to mitigate the adverse impacts of mining on 
individuals and communities. In addition, subject to appropriation, up 
to $10 million per year may be used for the small operator assistance 
program under section 507(c) of SMCRA, which pays for certain costs 
involved with the preparation of coal mining permit applications under 
Title V of SMCRA. Also, since Fiscal Year (FY) 1996, an amount equal to 
the interest earned by and paid to the Fund has been available for 
direct transfer to the United Mine Workers of America CBF to defray the 
cost of providing health care benefits for certain retired coal miners 
and their dependents.
    Section 402(a) of SMCRA and existing 30 CFR 870.13 fix the 
reclamation fee at 35 cents per ton (or 10 percent of the value of the 
coal, whichever is less) for surface-mined coal other than lignite; 15 
cents per ton (or 10 percent of the value of the coal, whichever is 
less) for coal from underground mines; and 10 cents per ton (or 2 
percent of the value of the coal, whichever is less) for lignite. Under 
section 402(b) of SMCRA, our authority to collect fees at those rates 
will expire with respect to coal produced after September 30, 2004, as 
will our authority to collect fees for AML reclamation purposes. 
However, unappropriated monies remaining in the Fund after that date 
will remain available for grants to State and tribal AML reclamation 
programs and the other purposes for which the AML Fund was established.
    As originally enacted, section 402 of SMCRA authorized collection 
of reclamation fees for 15 years following the date of enactment 
(August 3, 1977), meaning that our fee collection authority would have 
expired August 3, 1992. However, Congress has twice extended that 
deadline. As enacted on November 5, 1990, Section 6003(a) of the 
Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508, 104 Stat. 
1388) extended both the fees and our fee collection authority through 
September 30, 1995. Section 6002(c) of that law also required that the 
Fund be invested in interest-bearing public debt securities, with the 
interest becoming part of the Fund. Section 19143(b) of Title XIX of 
the Energy Policy Act of 1992 (Pub. L. 102-486, 106 Stat. 2776, 3056) 
subsequently extended the fees and our fee collection authority through 
September 30, 2004.
    Section 2515 of Title XXV of the Energy Policy Act (106 Stat. 2776, 
3113) further amended section 402(b) of SMCRA by adding the requirement 
that, after September 30, 2004, ``the fee shall be established at a 
rate to continue to provide for the deposit referred to in subsection 
(h) [of section 402 of SMCRA].'' See 30 U.S.C. 1232(b). The rule that 
we are adopting today implements this provision of SMCRA by 
establishing criteria and procedures for establishment of fees for coal 
produced on or after October 1, 2004.

B. What Is the CBF?

    The Energy Policy Act of 1992 also included provisions known as the 
Coal Industry Retiree Health Benefit Act of 1992 (the Coal Act), which 
is codified at 26 U.S.C. 9701 et seq. See Pub. L. 102-486, 106 Stat. 
2776, 3036. The Coal Act created the United Mine Workers of America 
(UMWA) Combined Benefit Fund by merging two financially troubled health 
care plans, the UMWA 1950 Benefit Plan and Trust and the UMWA 1974 
Benefit Plan and Trust, effective February 1, 1993. See 26 U.S.C. 9702. 
The CBF is a private employee benefit trust fund that provides health 
care and death benefits to UMWA coal industry retirees and their 
dependents and survivors who were both eligible to receive and were 
receiving benefits from the 1950 Benefit Plan or the 1974 Benefit Plan 
on July 20, 1992. See 26 U.S.C. 9703(f). Most current beneficiaries are 
widows and dependents of coal miners. The CBF health insurance plan 
provides ``Medigap'' coverage; i.e., it pays for health care expenses 
remaining after

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Medicare and Medicaid reimbursement and covers prescription drugs.
    Under the Coal Act, the Social Security Administration (SSA) has 
the duty of assigning retirees and their dependents to former employers 
or related companies. See 26 U.S.C. 9706. Coal operators and related 
companies pay monthly premiums (also determined by the SSA) to the CBF 
to cover the costs of benefits for the beneficiaries assigned to them. 
In addition, under 26 U.S.C. 9704(a)(3), those companies must pay a 
monthly premium for the health care costs of eligible unassigned 
beneficiaries; i.e., those beneficiaries associated with now-defunct 
coal operators for which no related company exists or remains in 
business. However, as discussed in Part I.C. below, Congress created a 
mechanism to wholly or partially offset premium costs for unassigned 
beneficiaries by transferring an amount equal to certain interest 
earned by the AML Fund to the CBF.

C. Why Do We Transfer Monies From the AML Fund to the CBF and How Do We 
Determine the Amount To Transfer?

    In paragraphs (a) and (b) of section 19143 of the Energy Policy Act 
of 1992, respectively, Congress amended the Internal Revenue Code of 
1986 and SMCRA to require that, at the beginning of each fiscal year, 
starting with FY 1996, an amount equal to the AML Fund's estimated 
interest earnings for that year be transferred to the CBF to help 
defray the cost of health care benefits for unassigned beneficiaries. 
See section 402(h) of SMCRA (30 U.S.C. 1232(h)) and section 9705(b) of 
the Internal Revenue Code (26 U.S.C. 9705(b)). See also Pub. L. 102-
486, 106 Stat. 3047 and 3056.
    Section 9705(b)(2) of the Internal Revenue Code provides that any 
amount transferred to the CBF under section 402(h) of SMCRA ``shall be 
used to proportionately reduce the unassigned beneficiary premium under 
section 9704(a)(3) of each assigned operator for the plan year in which 
transferred.'' However, to the extent that these transfers do not fully 
cover costs for unassigned beneficiaries, assigned operators remain 
obligated to pay the difference under 26 U.S.C. 9704(a)(3) and 
(d)(3)(A).
    Section 402(h) of SMCRA (30 U.S.C. 1232(h)) states that--

    (1) In the case of any fiscal year beginning on or after October 
1, 1995, with respect to which fees are required to be paid under 
this section, the Secretary shall, as of the beginning of such 
fiscal year and before any allocation under subsection (g), make the 
transfer provided in paragraph (2).
    (2) The Secretary shall transfer from the [AML] fund to the 
United Mine Workers of America Combined Benefit Fund established 
under section 9702 of the Internal Revenue Code of 1986 for any 
fiscal year an amount equal to the sum of--
    (A) the amount of interest which the Secretary estimates will be 
earned and paid to the Fund during the fiscal year, plus
    (B) the amount by which the amount described in subparagraph (A) 
is less than $70,000,000.
    (3)(A) The aggregate amount which may be transferred under 
paragraph (2) for any fiscal year shall not exceed the amount of 
expenditures which the trustees of the Combined Fund estimate will 
be debited against the unassigned beneficiaries premium account 
under section 9704(e) of the Internal Revenue Code of 1986 for the 
fiscal year of the Combined Fund in which the transfer is made.
    (B) The aggregate amount which may be transferred under 
paragraph (2)(B) for all fiscal years shall not exceed an amount 
equivalent to all interest earned and paid to the fund after 
September 30, 1992, and before October 1, 1995.
    (4) If, for any fiscal year, the amount transferred is more or 
less than the amount required to be transferred, the Secretary shall 
appropriately adjust the amount transferred for the next fiscal 
year.

    In sum, section 402(h)(2)(A) of SMCRA requires an annual transfer 
of estimated interest earnings from the AML Fund to the CBF. Paragraphs 
(h)(2)(B) and (3)(B) of section 402 require the transfer of an 
additional amount from a reserve (the interest earned on the AML Fund 
between FY 1993 and FY 1995) if the estimated interest earnings during 
the fiscal year will not cover eligible estimated CBF expenditures for 
that year. However, as explained further below, the amounts in the 
reserve fund were fully utilized in FY 2003 and no longer are available 
to supplement the annual transfer. In addition, the total amount 
transferred under paragraphs (h)(2)(A) and (B) may not exceed $70 
million for any one year, as discussed more fully in Part V below.
    The section 402(h)(2)(A) transfer is further limited by section 
402(h)(3)(A), which precludes the transfer of monies to the CBF in 
excess of the CBF's yearly costs for health benefits for unassigned 
beneficiaries. However, under a memorandum of understanding between OSM 
and the CBF trustees, which was signed on January 19, 2001, the amount 
transferred is not limited to estimated costs based on premium amounts 
determined by the SSA--it includes all actual health care expenditures 
for all unassigned beneficiaries, up to the amount authorized in 
section 402(h)(3) of SMCRA (subject to the $70 million cap). This 
approach reflects language in the conference report accompanying the FY 
2001 appropriations bill for Interior and related agencies. Page 200 of 
that report (H.R. Rep. No. 106-914) states:

    As a general matter, the managers note that it has been the 
practice for the amount of the annual interest transfers under 
current law to be based on a calculation which multiplies the number 
of unassigned beneficiaries by that year's per beneficiary premium 
rate established by the Social Security Administration (SSA) with 
adjustments made later (normally two years after the initial 
transfer) to reflect the Combined Benefit Fund's actual expenditures 
for unassigned beneficiaries. This practice has an adverse effect on 
the Combined Benefit Fund's cash flow and is contributing to its 
financial difficulties. * * * The managers believe that the interest 
transfer at the beginning of each fiscal year should be based on the 
Combined Benefit Fund trustees' estimate of the year's actual 
expenditures for unassigned beneficiaries, which may be adjusted to 
the actual amount of those expenditures at a later time if the 
initial transfer proves to be either too high or too low. This 
approach is completely consistent with the underlying statutory 
provision found in section 402(h) of the Surface Mining Control and 
Reclamation Act of 1977 which provides that the amount of interest 
transferred ``shall not exceed the amount of expenditures that the 
trustees of the Combined Fund estimate will be debited against the 
unassigned beneficiaries premium account.''

    The transfer from the AML Fund to the CBF occurs at the beginning 
of the fiscal year based on our estimate of interest the AML Fund will 
earn during the fiscal year and the CBF trustees' estimate of their 
health care expenditures for unassigned beneficiaries for that year. 
After the close of the fiscal year, we adjust the amount of the 
transfer to reflect actual interest earnings and CBF expenditures. 
There is no statute of limitations on adjustments to the number of 
beneficiaries. Therefore, several adjustments to the transfer for a 
particular year may be made in following years as figures are refined 
(usually as a result of bankruptcies and litigation), provided that the 
statutory transfer cap of $70 million for that year has not been 
reached. For example, our transfer in FY 2002 included adjustments to 
our first transfer in FY 1996.

II. What Is the Rationale for Our Determination of the Total Amount of 
Fees To Be Collected Each Year Under This Rule?

    As explained above, section 402(b) of SMCRA requires the 
establishment of a fee ``to continue to provide for the deposit 
referred to in subsection (h)'' of SMCRA. We interpret that language as 
requiring establishment of a fee that will generate revenue up to, but 
not more than, the amount of net interest that the

[[Page 56124]]

AML Fund is anticipated to earn in the coming fiscal year, subject to 
certain limitations described in detail below. This interpretation 
gives meaning to the section 402(b) requirement that some ``rate'' be 
established. Furthermore, this reading construes the phrase ``deposit 
referred to subsection (h)'' in section 402(b) to mean only what is 
currently provided for in section 402(h) (i.e., the transfer of an 
amount of money equal to estimated AML Fund interest earnings subject 
to the ``caps'' described below) and nothing more.
    The legislative history of paragraphs (b) and (h) of section 402 
sheds little light on congressional intent with respect to the amount 
of fees to be collected for coal produced after September 30, 2004. The 
provision in section 402(b) concerning post-September 30, 2004, fees 
appears to have originated in two bills introduced in 1992 in the 102nd 
Congress. Those bills, H.R. 4344 and H.R. 776, both included a version 
of section 402(h) that would have required an annual transfer of $50 
million from the AML Fund to the CBF. However, H.R. 4344 was never 
adopted, and the House removed the CBF transfer provisions from H.R. 
776 prior to passage. In acting on H.R. 776, the Senate added a 
variation of the provisions that the House had removed. However, 
instead of authorizing the transfer of $50 million from the AML Fund to 
the CBF each year as in the prior House version of section 402(h), the 
Senate version authorized transfer only of an amount equal to interest 
earned or estimated to be earned by the Fund. See 138 Cong. Rec. 10558, 
July 29, 1992. The Senate did not make any conforming changes to 
section 402(b). The House subsequently accepted the Senate version 
without change and the provisions became law as part of the Energy 
Policy Act of 1992.
    Thus, the basis for the fee collection target in new section 
870.13(b)(2) of the final rule that we are adopting today is the plain 
language of the statute and the absence of any legislative history to 
support a contrary reading. Section 402(b) of SMCRA provides that, 
after September 30, 2004, ``the fee shall be established at a rate to 
continue to provide for the deposit referred to in subsection (h).'' 
Section 402(h) of the Act lists two components of the deposit:
    (1) An estimate of the interest that will be earned by and paid to 
the AML Fund during the fiscal year (paragraph (h)(2)(A)); and
    (2) A ``supplement'' to increase that amount to $70 million if 
necessary (paragraph (h)(2)(B)), but with a cap on the total amount of 
the supplement for ``all fiscal years'' equal to the interest earned 
and paid to the AML Fund from October 1, 1992 to September 30, 1995 
(paragraph (h)(3)(B)), and further capped by the needs of the CBF 
(paragraph (h)(3)(A)).
    The supplement referenced in paragraph (h)(2)(B) is no longer 
available because the cap in paragraph (h)(3)(B) has been reached. By 
its terms, the cap applies to ``all fiscal years'' without any 
limitation. There is nothing in the legislative history to suggest that 
in section 402(b) Congress meant to refer only to certain portions of 
section 402(h). That is, we have no indication that Congress intended 
to continue the supplement in paragraph (h)(2)(B) without regard to the 
cap on that supplement in paragraph (h)(3)(B)). Moreover, the cap 
resulted in a transfer from the AML Fund to the CBF of only $49.8 
million in FY 2004, which was based only on the estimate of interest 
that the Fund would earn in FY 2004. There was no supplement provided 
to raise that amount because the supplement already was exhausted. It 
would be anomalous to suggest that Congress intended for the cap in 
paragraph (h)(3)(B) to apply to the transfer in FY 2004 (as it did), 
but not in FY 2005, when the plain language of that paragraph applies 
the cap to ``all fiscal years.''
    In sum, at this time nothing in SMCRA authorizes transfer of any 
monies to the CBF in excess of an amount equal to estimated interest 
earnings for that year (adjusted in future years to reflect actual 
interest earnings). Furthermore, there is no indication in the 
legislative history of sections 402(b) and (h) that Congress intended 
otherwise.
    Therefore, the reference in section 402(b) to ``the deposit 
referred to in subsection (h)'' is best read as meaning that the fees 
established for coal produced after September 30, 2004, must be 
designed to generate an amount of revenue equal to the estimated 
interest earnings transferred to the CBF at the beginning of each 
fiscal year, with any modifications needed to reflect the true-up 
adjustments required by section 402(h)(4).
    Table 1 shows the fees for FY 2005 and our projection of fees for 
the following ten years based on this rule; on currently available 
estimates on interest rates, CBF needs, and coal production; and on 
maintaining current congressional appropriations, grant formulas, and 
AML Fund assets available for investment.

                                             Table 1.--Fees for FY 2005 and Fee Projections for FY 2006-2015
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                                                                                Estimated CBF      Fees for non-      Fees for non-
                                                             Estimated AML        needs for         lignite coal       lignite coal
                                                             Fund interest        unassigned        produced by        produced by      Fees for lignite
                       Fiscal year                              earnings        beneficiaries     surface methods      underground      coal  (cents per
                                                              (millions of       (millions of     (cents per short   methods  (cents      short  ton)
                                                                dollars)           dollars)             ton)         per short  ton)
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2005.....................................................               69.0               85.0                8.8                3.8                2.5
2006.....................................................               72.0               99.6                8.7                3.7                2.5
2007.....................................................               71.9               97.9                8.5                3.7                2.4
2008.....................................................               69.4               96.3                8.5                3.6                2.4
2009.....................................................               65.8               94.1                7.8                3.4                2.2
2010.....................................................               61.6               92.2                7.3                3.1                2.1
2011.....................................................               22.1               90.1                2.6                1.1                0.7
2012.....................................................               17.6               87.7                2.0                0.9                0.6
2013.....................................................               14.2               85.4                1.6                0.7                0.5
2014.....................................................               10.9               83.2                1.2                0.5                0.4
2015.....................................................               46.4               81.0                5.2                2.2                1.5
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    For the reasons discussed above, we believe that this rule is a 
reasonable reconciliation of the statutory language with congressional 
intent as evidenced by the legislative history.

III. What Will This Rule Accomplish?

    This final rule revises 30 CFR 870.13 by--
     Changing the section heading from ``Fee computations'' to 
``Fee rates'';
     Redesignating existing paragraphs (a) through (d) as 
paragraphs (a)(1) through (4);
     Adding a new heading for paragraph (a) to clarify that the 
rates in that paragraph apply only to fees for coal produced on or 
before September 30, 2004; and
     Adding a new paragraph (b), which establishes criteria and 
procedures for use in establishing the fee for coal produced after 
September 30, 2004.
    In addition, in a conforming technical change, we are revising 30 
CFR 870.12(d) to remove the September 30, 2004, expiration date for fee 
payment obligations.
    As explained further below, we are publishing a proposed rule in 
today's Federal Register that proposes the same changes we are making 
in this final rule. The proposed rule also includes some provisions 
(i.e., proposed revisions to 30 CFR 872.11) that are not in this final 
rule. After considering any comments that we receive on that proposed 
rule, we may adopt a new final rule that makes changes to the final 
rule we are adopting today.
    New paragraph (b) of section 870.13 of the final rule implements in 
part the provision in section 402(b) of SMCRA that requires that, after 
September 30, 2004, ``the fee shall be established at a rate to 
continue to provide for the deposit referred to in subsection (h).'' As 
discussed in Part I.C. above, section 402(h) of SMCRA essentially 
requires the transfer from the AML Fund to the CBF, at the beginning of 
each fiscal year, of an amount equal to estimated AML Fund interest 
earnings during that year to defray the cost of health care benefits 
for the plan's unassigned beneficiaries. Those transfers effectively 
are capped at the estimated AML Fund interest earnings for that year, 
$70 million, or the CBF's estimated expenditures for health care 
benefits for unassigned beneficiaries for that year, whichever is the 
smallest amount. Therefore, effective October 1, 2004, we must 
determine the fee based on the amount of the transfer from the AML Fund 
to the CBF.
    New paragraph (b)(1) of section 870.13 of the final rule requires 
us to establish fees on an annual basis because the amount transferred 
to the CBF each year will vary. We will publish the fees for each 
fiscal year after FY 2005 in the Federal Register at least 30 days 
before the start of the fiscal year to which the fees will apply. Part 
VII of this preamble provides notice of the fees that we have 
established for FY 2005. Although not specified in the rule, we also 
will provide notice of the new fees by modifying the Abandoned Mine 
Land Payer Handbook (http://ismdfmnt5.osmre.gov), revising the OSM-1 
form, and issuing Payer Letters to permittees.
    Once we publish the fees for a given fiscal year, they will not 
change during that year. Later in this preamble we explain how we will 
make adjustments for differences between the estimates (for factors as 
interest earnings and coal production) used to establish the fees and 
actual data once the actual data becomes available.
    New paragraph (b)(2) of section 870.13 of the final rule 
essentially provides that each year's fee must be established to 
generate an amount of revenue equal to the amount of estimated AML Fund 
interest earnings that will transfer from the AML Fund to the trustees 
of the CBF at the beginning of that year under section 402(h) of SMCRA. 
Consistent with paragraphs (h)(2)(B) and (h)(3)(A) of section 402 of 
SMCRA (see Part V of this preamble), paragraph (b)(2)(i) of the rule 
caps the amount of estimated interest earnings transferred--and hence 
the total amount of fee collections needed--at the lesser of either $70 
million or the amount that the trustees of the CBF estimate will be 
debited against the unassigned beneficiaries premium account under 
section 9704(e) of the Internal Revenue Code of 1986 (26 U.S.C. 
9704(e)) for that fiscal year.
    Under new section 870.13(b)(2), calculation of the total amount of 
fees that must be collected is a three-step process. First, under 
paragraph (b)(2)(i), we will estimate the amount that must be 
transferred to the CBF at the beginning of that fiscal year. We will 
compare the net amount of interest the AML Fund is estimated to earn in 
the coming fiscal year, the most recent estimate from the CBF trustees 
of their needs for unassigned beneficiaries for that year, and the 
statutory cap of $70 million. The estimated transfer amount will be the 
smallest of the three numbers.
    The second step, in paragraph (b)(2)(ii), is to adjust the 
estimated transfer amount to account for overcollections or 
undercollections in prior years. SMCRA requires us to establish a fee 
that will provide for the transfer under section 402(h). As explained 
above, the initial transfer to the CBF under that section of the Act 
will be based on estimates of AML Fund interest earnings and the CBF's 
needs for unassigned beneficiaries during that year. After the close of 
the fiscal year, the amount of the transfer will be adjusted to reflect 
actual interest earnings (and, if necessary, actual CBF expenditures) 
when that data becomes available. As explained more fully below, any 
difference between estimated and actual data will not result in a 
revision of the previously established fee for that year. We will 
account for any excess fees collected, or any deficiencies, by 
adjusting the next fee scheduled to be determined.
    For example, if we underestimate interest earnings, we will 
transfer the difference to the CBF, provided the CBF needs that amount 
for expenditures from the unassigned beneficiary premium account during 
that year and the transfer would not exceed the $70 million statutory 
cap. We would then need to recover the additional amount transferred. 
On the other hand, if we overestimate interest earnings or if the CBF's 
expenditures were lower than the original amount transferred, the CBF 
will refund the difference and we would need to address the excess 
amount of fees collected. However, this requirement would apply only to 
adjustments for fiscal years after FY 2004. Therefore, if we determine 
in FY 2005 that we underestimated FY 2003 interest earnings by $10 
million, we would not include that adjustment in the fee calculation 
for FY 2006 (i.e., we would not increase the fee collection needs for 
FY 2006 by $10 million), although we would send the $10 million to the 
CBF.
    The third step under new paragraph (b)(2)(iii) is to adjust the 
estimated transfer amount to reflect differences between estimated and 
actual coal production in prior years. As explained above, the fee 
calculation for a fiscal year essentially is a fraction. The numerator 
is the amount of total fees to be collected for that fiscal year (with 
all adjustments), and the denominator is based on our estimate of coal 
production for that year. If we overestimate production, the calculated 
per-ton fee will be too low and we will undercollect for that year. 
Conversely, if we underestimate production, the calculated per-ton fee 
will be too high and we will overcollect for that year. Therefore, just 
like when we adjust the estimated interest and CBF needs to actual in 
step two, when we obtain actual production figures for fiscal years 
after October 1, 2004, we will calculate

[[Page 56126]]

the fees we overcollected or undercollected and that number will become 
an adjustment in the next fee calculation.
    We identified two options to remedy fee undercollections and 
overcollections. Under the first option, we would recalculate the fee 
and have all operators submit amended reports with additional payments 
or requests for credit or refund. We find this option impractical for 
several reasons. First, it would impose a huge paperwork burden on both 
operators and OSM. Second, we often make several adjustments over a 
number of years as actual data become available for comparison with the 
estimates used to establish the fees. Therefore, multiple supplemental 
reports would be required. Third, the adjustments likely will be very 
small (fractions of a cent), so the cost to operators and OSM of 
accounting for adjustments may exceed the dollar value of the 
adjustment. For all these reasons, we rejected this option. We will not 
change the fee for a given fiscal year after we publish that fee in the 
Federal Register.
    Instead, we are adopting the second possible approach to account 
for adjustments. We will adjust fee calculations for future years to 
account for adjustments to transfers in prior years. However, we will 
not adjust the fee calculations for future years when the transfer 
adjustments relate to FY 2004 or earlier fiscal years. Adjustments for 
transfers in those years would be inappropriate because the fee was 
statutorily set for those years.
    The following example illustrates how this process will work: 
Assume estimated AML Fund interest earnings for FY 2008 are $60 million 
and the CBF's estimated unassigned beneficiary needs are $85 million. 
Under that scenario, the amount transferred to the CBF would be $60 
million. Under paragraph (b)(2)(i) of this rule, that amount also would 
be the starting point for our fee calculations for FY 2008. Assume 
further that in FY 2006 we overestimate AML Fund interest earnings by 
$3 million, which means that fee collections for FY 2006 are $3 million 
higher than they should have been. To correct this situation, we would 
subtract the $3 million overcollection for FY 2006 from the $60 million 
estimated transfer in FY 2008, thereby reducing fees collected for that 
year. Hence, in FY 2008 operators as a group will recover the $3 
million fee overcollection in FY 2006.
    If there are multiple adjustments for more than one prior fiscal 
year, they all will be incorporated in the next fee calculation. In 
addition, if we later find that further adjustments are needed for a 
previously adjusted fiscal year, we will account for that adjustment in 
the next fee calculation. Thus, returning to the example in the 
previous paragraph, if we determine in FY 2008 that FY 2006 interest 
was overestimated by $4 million, not $3 million, we will adjust the 
next scheduled fiscal year's fee calculation (i.e., FY 2009) by the 
additional $1 million.
    Finally, if Congress were to specifically appropriate additional 
funds for transfer from the AML Fund to the CBF, that appropriation 
would not become part of the fee calculation. For example, if, in the 
FY 2007 appropriations act for the Department of the Interior, Congress 
designated a one-time $25 million supplemental payment to the CBF, we 
would not include that $25 million in the fee calculations for FY 2007.
    Paragraph (b)(3) of section 870.13 of the final rule provides that 
we will determine per-ton fees after comparing the amount of the 
estimated transfer to the CBF (and hence the total amount of fee 
collections needed) with projected coal production for that fiscal 
year. Paragraph (b)(3)(ii) specifies that the new fees will maintain 
the same proportionality among surface-mined coal, coal produced by 
underground mining, and lignite as did the fees previously in effect 
under section 402(a) of SMCRA. In section 402(a) of SMCRA, Congress 
originally established lower fees for lignite and for coal produced by 
underground methods than it did for non-lignite coal produced by 
surface mining methods. According to the legislative history, the lower 
fees for underground mining reflect the ``disproportionately high 
social costs incurred by underground coal mine operators in meeting 
responsibilities under the Coal Mine Safety and Health Act of 1969, as 
amended.'' H.R. Rep. No. 94-1445 (1976), at 85. Section 402(b) of SMCRA 
is silent on the question of whether differential rates should continue 
to apply to coal produced after September 30, 2004.
    After evaluating those factors, we have decided to retain the per-
ton fee ratios that have been in place since the enactment of SMCRA. 
Therefore, under paragraph (b)(3)(ii) of section 870.13 of the final 
rule, the fee per ton of non-lignite coal produced by underground 
methods will be 43 percent of the fee per ton of non-lignite coal 
produced by surface methods and the fee per ton of lignite coal 
produced will be 29 percent of the fee per ton of non-lignite coal 
produced by surface methods. The provision concerning fees for coal 
produced by in situ mining methods also will remain substantively 
unchanged from the existing rule governing fees for coal produced by 
in-situ mining methods before October 1, 2004, in that it would 
continue to apply the underground fee to all non-lignite coal produced 
by in-situ methods and the lignite fee to lignite coal produced by in-
situ methods.

IV. What Alternatives Did We Consider?

    We considered and rejected the following options to implement the 
provision of section 402(b) of SMCRA requiring the establishment of a 
fee for coal produced after September 30, 2004:
     Set the fee at zero and transfer only estimated interest 
earnings.
    This option is inconsistent with the principles of statutory 
construction because it would render the section 402(b) provision 
concerning establishment of post-September 30, 2004, fee rates 
superfluous and essentially inoperative. See In re Surface Mining 
Regulation Litigation, 627 F.2d 1346, 1362 (D.C. Cir. 1980) (``It is, 
however, a fundamental principal of statutory construction that `effect 
must be given, if possible, to every word, clause and sentence of a 
statute * * * so that no part will be inoperative or superfluous, void 
or insignificant.' ''), quoting from and citing to 2A Sutherland, 
Statutory Construction, at Sec.  46.06 (4th ed. 1973). See also Boise 
Cascade Corp. v. EPA, 942 F.2d 1427, 1432 (9th Cir. 1991) (statutes 
should not be construed so as to render any of their provisions 
superfluous). In addition, a fee of zero likely would not satisfy the 
section 402(h)(1) requirement that transfers from the AML Fund to the 
CBF may be made only when ``fees are required to be paid under this 
section.'' Under this approach, the AML Fund and, consequently, the 
interest earned thereon, would decline the fastest.
     Assess fees at a rate that would generate revenues 
adequate to maintain the AML Fund at a level that would earn an amount 
of interest sufficient to meet CBF needs for unassigned beneficiaries, 
up to a maximum of $70 million.
    This option could be construed to comply with the requirement to 
establish a fee that provides for the transfer to the Combined Fund 
under section 402(h). However, to maintain the principal in the AML 
Fund at a level that would earn sufficient interest to continue to 
provide for transfers to the CBF at recent levels, the fees under this 
option could be almost equal to, or even higher than, the current fees. 
There is no evidence that, in enacting section 402(b), Congress 
intended that the

[[Page 56127]]

principal balance of the AML Fund would or should be maintained at a 
level adequate to generate interest sufficient to meet CBF needs. This 
option also could have the effect of indefinitely extending the AML 
reclamation program by requiring collection of fees to replace 
appropriations for grants to States and tribes for those programs. 
There is no evidence that Congress intended for fees collected from 
coal produced after September 30, 2004, to be used for this purpose. 
Instead, the fact that Congress terminated the statutorily established 
reclamation fee in section 402(a) as of September 30, 2004 suggests the 
opposite, as does the language in section 402(b) that requires that, 
after September 30, 2004, the fee be established at a rate sufficient 
to continue to provide for transfers to the CBF.
     Assess a fee at a rate sufficient to meet any deficit 
between anticipated CBF health care benefit needs for unassigned 
beneficiaries (or $70 million, whichever is less) and the amount of 
estimated interest earnings transferred.
    There is insufficient statutory authority to implement this option 
because nothing in either the statutory language or the legislative 
history of SMCRA suggests that, in section 402(b), Congress intended 
for any transfers to be made to the CBF in excess of an amount equal to 
yearly estimated AML Fund interest earnings (plus the reserve 
supplement of prior interest earnings, which is now depleted). 
Moreover, it would be anomalous to suggest that Congress intended for 
the CBF to receive a transfer of funds in an amount equal to estimated 
interest earnings in FY 2004 (as it did) and then to receive transfers 
in excess of that amount in FY 2005 and thereafter.

V. What Is the Rationale for the Cap on Annual Transfers to the CBF?

    This final rule (see 30 CFR 870.13(b)) caps the amount transferred 
to the CBF at the beginning of each fiscal year at the estimated amount 
of interest earned by the AML Fund, estimated CBF expenditures for 
health care benefits for unassigned beneficiaries, or $70 million, 
whichever is the smallest amount. The first two items are later 
adjusted to reflect actual interest earnings and actual CBF 
expenditures for that fiscal year, provided the adjustments do not 
cause aggregate transfers for that year to exceed $70 million. This cap 
is consistent with both historical practice and section 402(h) of 
SMCRA. Paragraphs (3)(A) and (4) of section 402(h) impose the cap 
relating to actual CBF expenditures. The $70 million cap receives 
implied support from section 402(h)(2)(B) of SMCRA, which allows 
transfers of estimated interest earnings to be supplemented by prior 
interest earnings, but only up to a total transfer amount of $70 
million. It also reflects the intent of Congress as described in the 
conference report on the Energy Policy Act. See 138 Cong. Rec. 17578, 
17605 (1992) (``provision is made for monies to be transferred from the 
Abandoned Mine Land Fund in an amount up to, but not more than, $70 
million per year * * * ''). In addition, a report from the House 
Resources Committee on a bill approved by the Committee but never 
adopted by the full House characterizes section 402(h) in its entirety 
as allowing ``the transfer to the CBF of not more than $70 million 
annually.'' See H.R. Rep. No. 106-1014, pt. 1 (2000).

VI. Will the Fees Collected Continue To Be Deposited Into the AML Fund?

    Yes. Section 401(b)(1) of SMCRA requires that fees collected under 
section 402 be deposited into the AML Fund. In a proposed rule 
published separately in the Federal Register today, we are seeking 
comment on how those fees should be accounted for within the AML Fund. 
However, neither this final rule nor the proposed rule will affect the 
process for transfers between the AML Fund and the CBF. That process 
will remain the same as in previous fiscal years under applicable law 
and our agreements with the Treasury Department and the CBF trustees.

VII. What Are the Fees for Coal Produced in FY 2005?

    Under new section 870.13(b)(2)(i), as adopted in this rulemaking, 
the total amount of fees collected for coal produced during FY 2005 
should equal the amount of estimated AML Fund interest earnings that we 
anticipate will be transferred from the AML Fund to the trustees of the 
CBF at the beginning of the fiscal year pursuant to section 402(h) of 
the Act. The other two elements of the transfer cap--$70 million or the 
amount that the trustees of the CBF estimate will be debited against 
the unassigned beneficiaries premium account under section 9704(e) of 
the Internal Revenue Code of 1986 (26 U.S.C. 9704(e)) for that fiscal 
year--do not come into play for FY 2005 because estimated AML Fund 
interest earnings for that year are less than $70 million while the CBF 
estimate of its needs for unassigned beneficiaries during that year 
exceeds $70 million.
    We estimate that the AML Fund, which is invested in a mix of long-
term and short-term public debt securities, will earn $69,040,000 in 
interest during FY 2005. The most current available actuarial estimate 
of the CBF's health care benefit expenditures for unassigned 
beneficiaries in FY 2005 is approximately $85 million. The CBF trustees 
will provide an updated estimate in September 2004. However, that 
estimate will arrive too late for use in calculating fee rates for FY 
2005. As provided in new section 870.13(b)(2)(ii) of this rule, any 
difference between the estimate we used to set the fees for FY 2005 in 
this rule and the estimate that the CBF provides in September (or a 
later actual number) will appear as an adjustment to the fee collection 
target for a subsequent fiscal year and thus will be reflected in the 
fee calculation for that year. However, no adjustment will be necessary 
if the new estimate or actual numbers show CBF needs for FY 2005 exceed 
the AML Fund's interest earnings for that year.
    To summarize, because estimated AML Fund interest earnings during 
FY 2005 are less than $70 million while estimated CBF expenditures for 
unassigned beneficiaries during that year are in excess of $70 million, 
we estimate that the amount that we must transfer to the CBF at the 
beginning of the 2005 fiscal year will be $69,040,000.
    Under new section 870.13(b)(3) of this rule, we must establish per-
ton fees for FY 2005 based upon a comparison of the total amount of fee 
collections needed for that year, as determined under new section 
870.13(b)(2) of this rule, with estimated coal production during FY 
2005, broken out by type of coal and method of mining. We estimate that 
1,027 million short tons of coal will be subject to fee payment 
obligations during FY 2005. We based that estimate on Department of 
Energy (DOE) projections published in December 2003. Relying upon our 
experience with historical differences between DOE data and our own fee 
compliance data, we reduced the DOE projection by ten percent to 
include only coal for which we anticipate that there will be a fee 
payment obligation. Applying the same ratios as in our data from fee 
collections in FY 2003, we estimate that the total amount of coal 
produced in FY 2005 will include 628 million tons of non-lignite coal 
mined by surface methods, 317 million tons of non-lignite coal mined by 
underground methods, and 82 million tons of lignite coal.
    Under new section 870.13(b)(3)(ii) of this rule, the fee per ton of 
non-lignite coal produced by underground methods must be 43 percent of 
the fee for non-lignite coal produced by surface methods, while the fee 
for lignite coal

[[Page 56128]]

must be 29% of the fee for non-lignite coal produced by surface 
methods. Applying those ratios and rounding to the nearest 0.1 cent, we 
are establishing the following fees for coal produced during FY 2005:
     Surface-mined coal (except lignite): 8.8 cents per ton.
     Underground-mined coal (except lignite): 3.8 cents per 
ton.
     Lignite: 2.5 cents per ton.
    By our calculations, those are the fees necessary to generate the 
$69,040,000 needed to equal the amount that we estimate will be 
transferred to the CBF at the beginning of the 2005 fiscal year, while 
maintaining the appropriate fee ratios. To the extent that the 
estimates upon which our calculations are based prove inaccurate, we 
will adjust the fee collection target for future years accordingly, as 
required by new section 870.13(b)(2)(ii) and (iii) of this rule.
    We do not anticipate any in situ mining during the 2005 fiscal 
year. However, if such mining occurs, the fee will be the same as the 
fee for underground-mined coal (if the in situ-mined coal is 
anthracite, bituminous, or subbituminous coal) or for lignite (if that 
is the type of coal being mined by in situ methods). If in situ mining 
occurs, the fee will be based upon the quantity and quality of gas 
produced at the site, converted to Btu's per ton of coal upon which in 
situ mining was conducted, as determined by an analysis performed and 
certified by an independent laboratory.
    Stockpiled coal that was mined before October 1, 2004, is subject 
to the fees established in this rule at the time it is used, sold, or 
transferred. For example, coal that was sold before October 1, 2004, 
but that has not physically left the minesite is subject to the fees 
established in section 402(a) of the Act, which will now be codified in 
paragraph (a) of section 870.13.
    This portion of the preamble satisfies the notice requirements of 
new section 870.13(b)(1) of this rule with respect to the establishment 
of fees for FY 2005.

VIII. Why Are We Publishing a Proposed Rule at the Same Time as the 
Final Rule?

    As explained further below, we are publishing a proposed rule in 
today's Federal Register that proposes the same changes that we are 
making in this final rule. The proposed rule also addresses some 
additional issues related to allocation and disposition of monies 
deposited in the AML Fund. Most significantly, the proposed rule 
includes a provision addressing whether the new fees should be 
allocated under section 402(g) of SMCRA. Because AML Fund revenues are 
not allocated until the end of the fiscal year, we have time to 
consider the allocation issue at a later date. Thus, we will not 
publish a final rule addressing the allocation issue until after the 
public has received notice and an opportunity for comment. In addition, 
after considering comments on the proposed rule, we may publish a new 
final rule that makes changes to the provisions of the final rule that 
we are adopting today.

IX. Why Are We Publishing This Rule as a Final Rule Without Opportunity 
for Comment?

    We are adopting these regulations as final under the ``good cause'' 
exception in the Administrative Procedure Act (APA) at 5 U.S.C. 
553(b)(3)(B). That provision of the APA allows an agency to issue a 
rule without prior notice or opportunity for public comment ``when the 
agency for good cause finds (and incorporates the finding and a brief 
statement of the reasons therefore in the rules issued) that notice and 
public procedure thereon are impracticable, unnecessary, or contrary to 
the public interest.'' Using the same rationale, we are also invoking 
the good-cause exemption at 5 U.S.C. 553(d)(3) to the APA requirement 
that rules be published at least 30 days prior to their effective date.
    Section 402(b) of SMCRA imposes a clear expiration date (September 
30, 2004) for the fee rates established in section 402(a) of the 
statute. It also specifies that, after that date, fees shall be 
established at a rate that will continue to provide for the deposit 
referred to in section 402(h), which pertains to transfers to the CBF. 
As explained above, we believe that provision is susceptible to only 
one reasonable interpretation. Therefore, comment is unnecessary.
    Further, waiting to adopt a final rule until we provide advance 
notice and an opportunity for public comment would be impracticable and 
contrary to the public interest. Generally, the existence of a 
statutory deadline will provide an agency with a good cause 
justification for the publication of a final rule without advanced 
notice and an opportunity for comment. See, e.g., United States Steel 
Corp. v. United States Environmental Protection Agency, 605 F.2d 283 
(5th Cir.), cert. denied, 444 U.S. 1035 (1979). In the current 
situation, a statutory deadline exists because unless operators are 
required to pay fees for coal produced during the fiscal year beginning 
on October 1, 2004, we may be unable to transfer AML Fund monies to the 
CBF. This is explained in greater detail below.
    We recognize that an agency delay in beginning a rulemaking may not 
necessarily establish the time constraint that would give rise to good 
cause for dispensing with advance notice and comment. However, unusual 
circumstances causing the delay in the present situation justify the 
use of the APA good cause exception. In this case, we delayed 
initiating a rulemaking to implement a new fee requirement because we 
thought that considerable activity in Congress, including the 
introduction of at least seven bills (H.R. 3778, H.R. 3796, H.R. 4529, 
S. 2049, S. 2086, S. 2208, and S. 2211), would lead to enactment of 
legislation that would establish fees for coal produced after September 
30, 2004. In short, we thought it highly imprudent to begin the 
rulemaking process to attempt to solve a problem that Congress itself 
appeared prepared to solve. Moreover, we thought it to be an 
unnecessary waste of agency resources to begin the rulemaking process 
earlier given the likelihood that any new rule ultimately would become 
moot in light of what we believed to be a forthcoming congressional 
solution.
    However, because those legislative efforts have thus far been 
unsuccessful, we now must establish those fees through the rulemaking 
process to provide for the transfer to the CBF on or about October 1. 
Section 402(h)(1) of SMCRA specifies that the Secretary may make the 
transfer to the CBF only in any fiscal year ``with respect to which 
fees are required to be paid under this section.'' Therefore, unless we 
adopt this rule as final, allowing us to set new fees for coal produced 
on or after October 1, 2004, operators may be under no obligation to 
pay fees in the coming fiscal year and we may not be authorized to make 
the transfer to the CBF. Such a situation would be untenable and would 
adversely affect the approximately 17,000 unassigned beneficiaries 
currently receiving health care benefits from the CBF. See N. Am. Coal 
Corp. v. Dir., Office of Workers' Compensation Programs, United States 
Dep't of Labor, 854 F.2d 386 (10th Cir. 1988) (``good cause'' found for 
emergency rule concerning claims for medical benefits under the Black 
Lung Act since any delay in publication of the rule that caused loss or 
interruption of medical benefits to eligible coal miners would be 
``contrary to public interest'').
    Maintaining the continuity of payment of health care premiums is an 
important public policy goal that will be accomplished through the 
continuing payment of fees by coal operators at a level significantly 
lower than they paid

[[Page 56129]]

for coal produced before October 1, 2004. We do not intend to 
jeopardize health care benefits for unassigned beneficiaries by waiting 
to publish a final rule until after October 1, 2004.
    In addition, because the fee may be a factor in negotiating sale 
prices for coal, it is beneficial to notify industry as soon as 
possible about changes in fees. Companies enter into a variety of 
mining and sales contracts with varying provisions for payment of the 
fee. For example, a mining contract may call for the mine owner, the 
permittee, the person extracting the coal, or the purchaser to pay the 
fee.
    For those reasons, it is not in the public interest to provide 
notice and an opportunity for public comment before publication of a 
final rule establishing fees for coal produced after September 30, 
2004.
    Adoption of this rule on a final basis does not mean that we have 
no interest in seeking input from the public. To the contrary, in a 
separate document published in today's Federal Register, we are also 
publishing these rule changes as a proposed rule, soliciting comment on 
what changes, if any, we should make in the final rule that we are 
adopting today. Upon receipt and evaluation of those comments, we will 
publish a document addressing the comments and, if necessary, a new 
final rule making any appropriate changes to the final rule that we are 
adopting today.

X. Procedural Matters

A. Executive Order 12866

    This document is considered a significant rule and is 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 rule 
will not add to the existing cost of operating a mine under an approved 
regulatory program in any significant fashion. We anticipate that the 
average fee under this rule over the next ten years would be 5.7 cents 
per ton of surface-mined, non-lignite coal, which is less than 0.2 
percent of the value of the coal, assuming an average price of $30 per 
ton. Furthermore, the fees established under this rule will be lower 
than the existing AML reclamation fees, which expire on September 30, 
2004. The fees imposed under this rule will result in the collection of 
an estimated $469 million from the coal industry during FY 2005-2014, 
an average of $46.9 million per year. That amount is approximately $3 
billion less than what would be collected if the existing AML 
reclamation fee were extended another ten years.
    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 raises novel legal and policy issues, which is why the 
rule is considered significant under Executive Order 12866.

B. 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.). 
See the discussion in Part X.A. above.

C. 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 replacement of the AML reclamation fee by a 
much smaller fee for continuation of the transfers to the CBF will not 
have a significant effect on the supply, distribution, or use of 
energy.

D. 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. For the reasons stated in 
Part X.A. above, this rule will not:
    a. Have an annual effect on the economy of $100 million or more.
    b. Cause a major increase in costs or prices for consumers, 
individual industries, Federal, State, or local government agencies, or 
geographic regions.
    c. Have significant adverse effects on competition, employment, 
investment, productivity, innovation, or the ability of U.S.-based 
enterprises to compete with foreign-based enterprises.

E. Executive Order 12630--Takings

    This rule does not have any significant takings implications under 
Executive Order 12630. Therefore, a takings implication assessment is 
not required.

F. Executive Order 13132--Federalism

    This rule does not have significant Federalism implications because 
it does not concern relationships between the Federal government and 
State or local governmental units. Therefore, there is no need to 
prepare a Federalism Assessment.

G. Executive Order 13175--Consultation and Coordination With Indian 
Tribal Governments

    To the extent that this rule may have a substantial direct effect 
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, potentially affected tribal 
governments will be notified through this publication in the Federal 
Register, and by direct notification from OSM, of the ramifications of 
this rulemaking. More importantly, in a separate document published in 
today's Federal Register, we are publishing this rule as a proposed 
rule, soliciting comment on what changes, if any, we should make in the 
final rule. This will enable tribal officials and other tribal 
constituencies throughout Indian Country to have meaningful and timely 
input in the development of the final rule. Upon receipt and evaluation 
of all comments, we will publish a document addressing the comments and 
making any appropriate changes to the final rule.

H. Executive Order 12988 on Civil Justice Reform

    The Department of the Interior has determined that this rule meets 
the requirements of sections 3(a) and 3(b)(2) of Executive Order 12988, 
``Civil Justice Reform'' (56 FR 55195).

I. Unfunded Mandates Reform Act

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

J. Federal Paperwork Reduction Act

    The Department of the Interior has determined that this rule does 
not contain collections of information which require approval by the 
Office of Management and Budget under 44 U.S.C. 3501 et seq. OMB has 
previously approved the collection activities and assigned clearance 
numbers 1029-0063 and 1029-0090 for the OSM-1 form and coal weight 
determination, respectively. Under this rule, the only change to the 
OSM-1 form will be a reduction in the fee rates printed on the form.

[[Page 56130]]

K. National Environmental Policy Act

    OSM has determined that this rulemaking action is categorically 
excluded from the requirement to prepare an environmental document 
under the National Environmental Policy Act of 1969, as amended, 42 
U.S.C. 4332 et seq. In addition, we have determined that none of the 
``extraordinary circumstances'' exceptions to the categorical exclusion 
apply. This determination was made in accordance with the Departmental 
Manual (516 DM 2, Appendixes 1.9 and 2).

L. 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 rule easier to understand, including answers to questions such as 
the following:
    (1) Are the requirements in the rule clearly stated?
    (2) Does the rule contain technical language or jargon that 
interferes with its clarity?
    (3) Does the format of the 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 numerous but shorter sections? (A ``section'' appears in bold type 
and is preceded by the symbol ``Sec. '' and a numbered heading; for 
example, ``Sec.  870.13.'')
    (5) Is the description of the rule in the SUPPLEMENTARY INFORMATION 
section of this preamble helpful in understanding the rule?
    (6) What else could we do to make the rule easier to understand?
    Send a copy of any comments that concern how we could make this 
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 in 30 CFR Part 870

    Abandoned Mine Reclamation Fund, Reclamation fees, Reporting and 
recordkeeping requirements, Surface mining, Underground mining.

    Dated: September 7, 2004.
Chad Calvert,
Acting Assistant Secretary, Land and Minerals Management.


0
For the reasons set forth in the preamble, the Department is amending 
30 CFR Part 870 as follows:

PART 870--ABANDONED MINE RECLAMATION FUND--FEE COLLECTION AND COAL 
PRODUCTION REPORTING

0
1. The authority citation for Part 870 continues to read as follows:

    Authority: 28 U.S.C. 1746, 30 U.S.C. 1201 et seq., and Pub. L. 
105-277.


0
2. In Sec.  870.12, paragraph (d) is revised to read as follows:


Sec.  870.12  Reclamation fee.

* * * * *
    (d) The reclamation fee shall be paid after the end of each 
calendar quarter beginning with the calendar quarter starting October 
1, 1977.

0
3. Amend Sec.  870.13 as follows:
0
A. Revise the section heading.
0
B. Redesignate paragraphs (a) through (d) as paragraphs (a)(1) through 
(4).
0
C. Add a heading for paragraph (a).
0
D. Add a new paragraph (b).
    The revision and additions read as follows:


Sec.  870.13  Fee rates.

    (a) Fees for coal produced for sale, transfer, or use through 
September 30, 2004. (1) * * *
* * * * *
    (b) Fees for coal produced for sale, transfer, or use after 
September 30, 2004. In this paragraph (b), ``we'' refers to OSM, 
``Combined Fund'' refers to the United Mine Workers of America Combined 
Benefit Fund established under section 9702 of the Internal Revenue 
Code of 1986 (26 U.S.C. 9702), and ``unassigned beneficiaries premium 
account'' refers to the account established under section 9704(e) of 
the Internal Revenue Code of 1986 (26 U.S.C. 9704(e)).
    (1) Fees to be set annually. We will establish the fee for each ton 
of coal produced for sale, transfer, or use after September 30, 2004, 
on an annual basis. The fee per ton is based on the total fees required 
to be paid each fiscal year, as determined under paragraph (b)(2) of 
this section, allocated among the estimated coal production categories, 
as provided in paragraph (b)(3) of this section. We will publish the 
fees for each fiscal year after Fiscal Year 2005 in the Federal 
Register at least 30 days before the start of that fiscal year. Once we 
publish the fees, they will not change for that fiscal year and they 
will apply to all coal produced during that fiscal year.
    (2) Calculation of the total fee collections needed. The total 
amount of fee collections needed for any fiscal year is the amount that 
must be transferred from the Fund to the Combined Fund under section 
402(h) of the Act (30 U.S.C. 1232(h)) for that fiscal year, with any 
necessary adjustments for the amount of any fee overcollections or 
undercollections in prior fiscal years. We will calculate the amount of 
total fee collections needed as follows:
    (i) Step one. We will determine the smallest of the following 
numbers:
    (A) The estimated net interest earnings of the Fund during the 
fiscal year;
    (B) $70 million; or
    (C) The most recent estimate provided by the trustees of the 
Combined Fund of the amount that will be debited against the unassigned 
beneficiary premium account for that fiscal year (``the Combined Fund's 
needs'').
    (ii) Step two. We will increase or decrease, as appropriate, the 
amount determined under step one by the amount of any adjustments to 
previous transfers to the Combined Fund resulting from a difference 
between estimated and actual interest earnings or the estimated and 
actual Combined Fund's needs. This paragraph (b)(2)(ii) applies only to 
adjustments to transfers for prior fiscal years beginning on or after 
October 1, 2004, and only to those adjustments that have not previously 
been taken into account in establishing fees for prior years.
    (iii) Step three. We will adjust the amount determined under steps 
one and two of this section by an amount equal to the difference 
between the fees actually collected (based on estimated production) and 
the amount that should have been collected (based on actual production) 
for any prior fiscal year beginning on or after October 1, 2004, if the 
difference has not previously been taken into account in establishing 
fees for prior years.
    (3) Establishment of fees. We will use the following procedure to 
establish the per-ton fees for each fiscal year:
    (i) Step one. We will estimate the total tonnage of coal that will 
be produced during that fiscal year and for which a fee payment 
obligation exists, categorized by the types of coal and mining methods 
described in paragraph (b)(3)(ii) of this section.
    (ii) Step two. We will allocate the total fee collection needs 
determined under paragraph (b)(2) of this section among the various 
categories of estimated coal production under paragraph (b)(3)(i) of 
this section to establish a per-ton fee based upon the following 
parameters:
    (A) The per-ton fee for anthracite, bituminous or subbituminous 
coal produced by underground methods will be 43 percent of the rate for 
the same type of coal produced by surface methods.

[[Page 56131]]

    (B) Regardless of the method of mining, the per-ton fee for lignite 
coal will be 29 percent of the rate for other types of coal mined by 
surface methods.
    (C) The per-ton fee for in situ mined coal will be the same as the 
fees set under paragraphs (b)(3)(ii)(A) and (B) of this section, 
depending on the type of coal mined. The fee will be based upon the 
quantity and quality of gas produced at the site, converted to Btu's 
per ton of coal upon which in situ mining was conducted, as determined 
by an analysis performed and certified by an independent laboratory.

[FR Doc. 04-20997 Filed 9-16-04; 8:45 am]
BILLING CODE 4310-05-P