[Federal Register Volume 69, Number 180 (Friday, September 17, 2004)]
[Proposed Rules]
[Pages 56132-56144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20998]



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

[[Page 56132]]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 870 and 872

RIN 1029-AC47


Coal Production Fees and Fee Allocation

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

ACTION: Proposed rule.

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SUMMARY: This rule sets forth the criteria and procedures that we are 
proposing to use to establish fees under the abandoned mine reclamation 
program provisions of the Surface Mining Control and Reclamation Act of 
1977 (SMCRA or the Act). The fixed-rate fees established under SMCRA 
expire September 30, 2004. However, the Act requires that, for coal 
produced after that date, fees be established to continue to provide 
for transfers from the Abandoned Mine Reclamation Fund (the AML Fund or 
the Fund) to the Combined Benefit Fund (the Combined Fund or CBF). This 
proposed rule would implement that requirement in part. We are also 
publishing a final rule in today's Federal Register that mirrors the 
fee establishment criteria and procedures in this proposed rule and 
establishes a fee for the fiscal year beginning October 1, 2004. 
Comments received on this proposed rule will assist us in determining 
whether to modify that final rule. We are also proposing to revise our 
regulations governing allocation and disposition of the fees collected 
and of other AML Fund income.

DATES: Electronic or written comments: We will accept written comments 
on the proposed rule until 4:30 p.m., Eastern time, on by November 16, 
2004.
    Public hearing: If you wish to testify at a public hearing, you 
must submit a request on or before 4:30 p.m., Eastern time, on October 
18, 2004. We will hold a public hearing only if there is sufficient 
interest. Hearing arrangements, dates and times, if any, will be 
announced in a subsequent Federal Register notice. If you are a 
disabled individual who needs special accommodation to attend a public 
hearing, please contact the person listed under FOR FURTHER INFORMATION 
CONTACT.

ADDRESSES: If you wish to comment on this proposed rule, you may submit 
your comments by any of the following methods to the address indicated:
     E-mail: [email protected]. Please include docket number 
1029-AC47 in the subject line of the message.
     Mail/Hand-Delivery/Courier: Office of Surface Mining 
Reclamation and Enforcement, Administrative Record, Room 210, 1951 
Constitution Avenue, NW., Washington, DC 20240. Please identify the 
comments as pertaining to docket number 1029-AC47.
     Federal e-Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions provided at http://www.regulations.gov under 
the ``How to Comment'' heading for this rule.
    You may submit a request for a public hearing on the proposed rule 
to the person and address specified under FOR FURTHER INFORMATION 
CONTACT. If you are disabled and require special accommodation to 
attend a public hearing, please contact the person listed under FOR 
FURTHER INFORMATION CONTACT.

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, the Abandoned Mine Reclamation Fund, and abandoned mine 
reclamation in general 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 Combined Benefit Fund?
    C. Why Do We Transfer Monies From the AML Fund to the CBF and 
How Do We Determine the Amount To Transfer?
II. How Do We Propose To Determine the Total Amount of Fees To 
Collect Each Year?
III. How Are We Proposing To Revise 30 CFR Part 870?
IV. What Alternatives Did We Consider in Developing the Proposed 
Changes to 30 CFR Part 870?
V. What Is the Rationale for the Cap on Annual Transfers to the CBF?
VI. What Would the Fees Be Under This Proposed Rule for Coal 
Produced After September 30, 2004?
VII. How Would the Fees Collected for Coal Produced After September 
30, 2004, Be Used?
VIII. How Else Are We Proposing To Revise the AML Fund Rules in 30 
CFR 872.11?
IX. Why Are We Publishing a Final Rule at the Same Time as This 
Proposed Rule?
X. How Do I Submit Comments on the Proposed Rule?
XI. Procedural Matters

I. Background information

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

    Title IV 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 Combined Benefit 
Fund 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

[[Page 56133]]

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 proposing today would implement this provision of SMCRA by 
establishing criteria and procedures for establishment of the fee for 
coal produced on or after October 1, 2004.

B. What Is the Combined Benefit Fund?

    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 Fund or CBF 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 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) for any one year may not 
exceed $70 million, 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

[[Page 56134]]

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. How Do We Propose To Determine the Total Amount of Fees To Collect 
Each Year?

    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 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 rationale for the fee collection target in section 
870.13(b)(2) of the proposed rule that we are publishing 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).
    For the reasons discussed above, we believe that the proposed rule 
is a reasonable reconciliation of the statutory language with 
congressional intent as evidenced by the legislative history.

III. How Are We Proposing To Revise 30 CFR Part 870?

    As discussed in Part IX of this preamble, we are publishing a final 
rule in today's Federal Register that adopts the same changes to Part 
870 that we are proposing in this rule and puts them into effect 
immediately. However, we will fully consider all comments that we 
receive on this proposed rule. If we determine that changes are needed 
in response to those comments, we will issue a new final rule 
containing the appropriate modifications. As mentioned in Part IX, we 
seek comment on whether those changes should be effective as of October 
1, 2004.
    We are proposing to revise 30 CFR 870.13 by--

[[Page 56135]]

     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 title and introductory language 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 would establish criteria 
and procedures for use in establishing fees for coal produced after 
September 30, 2004.
    In addition, in a conforming technical change, we are proposing to 
revise 30 CFR 870.12(d) to remove the September 30, 2004, expiration 
date for fee payment obligations.
    Proposed paragraph 870.13(b) would implement 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.
    We recognize that section 402(h) of SMCRA does not expressly 
require adjustments to reflect differences between estimated and actual 
AML Fund interest earnings and estimated and actual CBF expenditures 
for unassigned beneficiaries. Paragraphs (h)(1), (2), and (3) of 
section 402 refer only to the use of estimates when determining the 
amount required to be transferred. However, section 402(h)(4) of the 
Act provides that, ``[i]f, 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 our view, that provision essentially requires 
that the Secretary adjust the amount transferred to reflect any 
difference between the estimates used to determine the transfer amount 
at the beginning of the year and actual data for that year, as 
determined at a later date. Otherwise, section 402(h)(4) would have no 
real meaning, which would conflict with established principles of 
statutory construction. We invite comment on whether there is any other 
interpretation that would give effective meaning to section 402(h)(4). 
If so, we may reconsider adoption of proposed 30 CFR 870.13(b)(2)(ii).
    Proposed paragraph 870.13(b)(1) would require us to establish fees 
on an annual basis. We selected this frequency because the amount 
transferred to the CBF each year will vary. We would 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 would apply. 
Although not specified in the rule, we also would 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.
    Under the proposed rule, once we publish the fees for a given 
fiscal year, they would not change during that year. Later in this 
preamble we explain how we would 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.
    Proposed paragraph 870.13(b)(2) of the rule essentially would 
require that each year's fee 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 would cap 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 proposed section 870.13(b)(2), calculation of the total 
amount of fee collections needed would be a three-step process. First, 
under proposed paragraph (b)(2)(i), we would estimate the amount that 
must be transferred to the CBF at the beginning of that fiscal year. We 
would compare the net amount of interest the AML Fund is estimated to 
earn during that 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 would 
be the smallest of the three numbers.
    The second step, under proposed paragraph (b)(2)(ii), would be 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 is 
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 is 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 would not result in a 
revision of the previously established fee for that year. We would 
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 would 
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 increase fee collections in the following 
year 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 would 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 proposed paragraph (b)(2)(iii) would be 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 would essentially be a 
fraction. The numerator would be the amount of total fees to be 
collected for that fiscal year (with all adjustments), and the 
denominator would be based on our estimate of coal production for that 
year. If we overestimate production, the

[[Page 56136]]

calculated per-ton fee would be too low and we would undercollect for 
that year. Conversely, if we underestimate production, the calculated 
per-ton fee would be too high and we would 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 would calculate the fees we 
overcollected or undercollected and that number would 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 would 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 propose to reject this option. 
Under this proposed rule, we would not change the fee for a given 
fiscal year after we publish that fee in the Federal Register.
    Instead, we are proposing to adopt the second possible approach to 
account for adjustments. Under that approach, we would adjust fee 
calculations for future years to account for adjustments to transfers 
in prior years. However, we would 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 would 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 the proposed 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 
would recover the $3 million fee overcollection in FY 2006.
    If there are multiple adjustments for more than one prior fiscal 
year, they all would 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 would 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 would 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 process. Thus, 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.
    Proposed paragraph 870.13(b)(3) provides that we would 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. Proposed paragraph 
(b)(3)(ii) specifies that the new fees would 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 this fee differential should continue to apply 
to coal produced after September 30, 2004.
    After evaluating those factors, we propose to retain the per-ton 
fee ratios that have been in place since the enactment of SMCRA. 
Therefore, under proposed paragraph (b)(3)(ii), the fee per ton of non-
lignite coal produced by underground methods would 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 would 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 would 
remain substantively unchanged from the 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 in Developing the Proposed 
Changes to 30 CFR Part 870?

    In developing this proposed rule, 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.

[[Page 56137]]

     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 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?

    Proposed 30 CFR 870.13(b) and 872.11(e) would cap 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 
would later be adjusted to reflect actual interest earnings and actual 
CBF expenditures for that fiscal year, provided the adjustments would 
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 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. What Would the Fees Be Under This Proposed Rule for Coal Produced 
After September 30, 2004?

    Under proposed 30 CFR 870.13(b)(1), we would determine fees on an 
annual basis, with notice of the fees for each year published in the 
Federal Register 30 days before the beginning of the fiscal year to 
which they would apply.
    Part VII of the preamble to the final rule that we are publishing 
in today's Federal Register establishes fees for FY 2005.
    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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       Estimated CBF    Fees for  non-   Fees for non-
                                                                      Estimated AML      needs for       lignite coal     lignite coal       Fees for
                                                                      Fund interest      unassigned      produced by      produced by      lignite coal
                            Fiscal year                                  earnings      beneficiaries       surface        underground       (cents per
                                                                       (millions of     (millions of   methods  (cents  methods  (cents     short ton)
                                                                         dollars)         dollars)      per short ton)   per short ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In accordance with proposed 30 CFR 870.13(b) and 872.11(e), the 
fees in Table 1 are based upon a maximum annual transfer to the CBF of 
$70 million or the amount of estimated AML Fund interest earnings for 
that year, whichever is less. (The other limiting factor, estimated CBF 
needs for unassigned beneficiaries, does not come

[[Page 56138]]

into play because those estimates are in excess of $70 million for all 
years shown in the table.)
    Because section 402(h)(2)(A) of SMCRA refers to the transfer of an 
amount equal to the estimated interest ``earned and paid to the Fund 
during the fiscal year,'' we originally invested the Fund's assets only 
in short-term securities so as to maximize the amount of interest 
actually paid to the Fund during each year. By so doing, we also 
maximized the amount available for transfer to the CBF. However, we 
reevaluated that policy when short-term interest rates declined to the 
point that the Fund was earning less than $70 million in interest each 
year. We determined that interest on long-term securities could be 
deemed to be constructively earned and paid to the Fund on a prorated 
basis over the life of those securities even though it is not 
physically collected until the securities reach maturity. The estimated 
annual interest earnings reported in Table 1 reflect this 
interpretation. After changing our policy, in FY 2004, we invested $1.3 
billion of the Fund in long-term public debt securities with an average 
interest rate of 4.18 percent. That rate is significantly more than the 
minuscule returns (currently hovering around one percent) recently 
available on short-term securities. However, we anticipate that we will 
need to redeem those long-term securities before their maturity dates 
to meet future Fund obligations because Congress has not reauthorized 
collection of a fee for AML reclamation. Consequently, the net interest 
earnings shown in Table 1 for FY 2011-2014 reflect the early redemption 
penalties that we expect to incur in those years. In other words, we 
will need to subtract early redemption penalties from the total 
estimated interest earnings in each of those years. The increase in net 
interest earnings shown for FY 2015 reflects the fact that, based on 
current estimates and assumptions, as of the end of FY 2014, all long-
term securities will have been redeemed and that we will therefore 
incur no further early redemption penalties. By that time, the AML Fund 
would be invested exclusively in short-term securities and all 
estimated interest earnings on those securities would be available for 
transfer without first deducting any early redemption penalties for 
long-term securities.
    Table 2 contains the coal production estimates that we used to 
establish fees for FY 2005 and to estimate fees for the other years in 
Table 1.

                Table 2.--Estimated Coal Production for Coal Subject to Fee Payment Requirements
                                           [In millions of short tons]
----------------------------------------------------------------------------------------------------------------
                                                    Non-lignite     Underground
                   Fiscal year                     surface mines       mines          Lignite          Total
----------------------------------------------------------------------------------------------------------------
2005............................................             628             317              82           1,027
2006............................................             640             327              85           1,052
2007............................................             651             335              87           1,073
2008............................................             643             346              91           1,080
2009............................................             672             340              86           1,098
2010............................................             672             350              86           1,108
2011............................................             680             346              86           1,112
2012............................................             695             345              82           1,122
2013............................................             707             352              82           1,141
2014............................................             709             351              82           1,142
2015............................................             723             359              82           1,164
----------------------------------------------------------------------------------------------------------------

    The total production estimates in Table 2 are based upon 
projections in the Annual Energy Outlook (December 2003) prepared by 
the Energy Information Administration within the Department of Energy 
(DOE). We reduced those projections by ten percent to reflect our 
historical experience concerning the difference between DOE data and 
the tonnage subject to SMCRA's fee payment requirements. Allocation 
among the three production categories (surface, underground, and 
lignite) is based upon an extrapolation of our fee collection data for 
FY 2003.

VII. How Would the Fees Collected for Coal Produced After September 30, 
2004, Be Used?

    Section 401(b) of the Act provides that the AML Fund consists of 
``amounts deposited in the fund,'' including, among other things, 
``reclamation fees levied under section 402,'' and ``interest credited 
to the fund under subsection (e).'' Thus, under section 401(b) of 
SMCRA, fees collected under section 402 of the Act must be deposited 
into the AML Fund. Consistent with this requirement, the proposed rule 
considers all fees collected to be Fund revenues. See proposed 30 CFR 
872.11(a).
    The proposed rule would not affect the process by which transfers 
are made 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.
    Section 402(g) of the Act establishes an allocation formula that 
has been applied to date to the fees collected and to other AML Fund 
income. Fifty percent of the fees collected (but no other type of Fund 
income) was allocated to the appropriate State or tribal share account 
(``State share'' or ``Tribal share''). The remaining fifty percent of 
the fees collected, together with all other Fund income (including 
interest), were allocated among three other accounts, which are 
sometimes referred to collectively as the ``Federal share,'' as 
follows:
     Twenty percent to the Secretary of Agriculture for use 
under section 406 of the Act, which authorizes use of those funds for 
the rural abandoned mine program (RAMP). This account is known as the 
RAMP allocation.
     Forty percent for supplemental AML reclamation grants to 
non-certified States and tribes, based on historical coal production 
before August 3, 1977. This account is known as the historical 
production allocation.
     Forty percent for the other purposes of Title IV, 
including items such as the small operator assistance program, the 
Clean Streams program, the emergency reclamation program, reclamation 
of high priority AML sites in States and tribes without approved AML 
reclamation plans, minimum program makeup grants, and the cost of 
administering the AML program and collecting fees. This account is 
known as the Secretary's discretionary share.
    The existing regulations at 30 CFR 872.11(a) and (b) implement the

[[Page 56139]]

statutory requirements discussed above. Under our proposed rule, fees 
collected for coal produced for sale, transfer, or use before October 
1, 2004, would be allocated according to the statutory scheme. 
Similarly, any other Fund income listed in section 401(b) of SMCRA, 
including, but not limited to, interest, user charges, recovered 
monies, and donations, would continue to be allocated according to that 
scheme.
    However, we are proposing to add new paragraphs (d) and (e) to 
section 872.11 to address the disposition of fees collected for coal 
produced for sale, transfer, or use after September 30, 2004, and 
modify paragraphs (a) and (b) accordingly. Paragraph (d) would allocate 
fees collected for coal produced in any fiscal year beginning after 
September 30, 2004, only to the accounts from which the amount of the 
transfer to the CBF (as provided in new paragraph (e)) was taken at the 
beginning of that year. Fee collections would be distributed among the 
contributing accounts in amounts proportionate to which those accounts 
contributed to the transfer.
    We are proposing to adopt this approach because we believe that the 
direction in SMCRA section 402(b) to establish the fee at a rate to 
provide for the CBF transfer conflicts with the allocation scheme in 
section 402(g) and that the two provisions cannot both be given effect. 
Section 402(b) states that, after September 30, 2004, ``the fee shall 
be established at a rate to continue to provide for [transfers to the 
CBF].'' SMCRA section 402(b), 30 U.S.C. 1232(b). The only purpose of 
the fee after September 30, 2004, is to support the continued funding 
of the CBF. In this regard, any fees collected would effectively 
replace the amount transferred to the CBF. Thus, we believe that the 
section 402(b) requirement to establish a fee to provide for the CBF 
transfer provides us with a directive to put whatever fees are 
collected back into the account from which the transfer was taken.
    Transfers to the CBF after September 2004 will take place in the 
manner illustrated by the following example for FY 2005. On or about 
October 1, 2004, we will direct the Treasury Department to transfer 
from the AML Fund to the CBF an amount equal to the amount of interest 
that is estimated to be earned by the Fund during FY 2005. We will note 
from which accounts the transferred funds were withdrawn. We will levy 
a fee on mine operators pursuant to section 402(b) of the Act, with the 
goal of achieving aggregate fee collections in an amount equal to the 
amount transferred to the CBF. The section 402(b) directive can be 
construed as a requirement to use those fees, once collected, to 
replenish the accounts that contributed monies for the transfer to the 
CBF at the beginning of the year.
    We recognize that the section 402(g) allocation formula arguably 
conflicts with that requirement. However, we believe that it is 
anomalous to suggest that Congress intended, in requiring establishment 
of the fee based on the CBF transfer, to also require that the fees 
collected continue to be allocated in accordance with the formula 
established in section 402(g) of the Act. Thus, for fees from coal 
produced after September 30, 2004, there is an inherent conflict 
between the direction in section 402(b) and the allocation scheme in 
section 402(g).
    When there is an ambiguity that cannot be reconciled, the agency 
has discretion to reasonably interpret the statute. It is well-settled 
that when a court reviews an agency's construction of a statute that 
the agency administers, the first question for the court is--

whether Congress has directly spoken to the precise question at 
issue. If the intent of Congress is clear, that is the end of the 
matter; for the court, as well as the agency, must give effect to 
the unambiguously expressed intent of Congress * * * [I]f the 
statute is silent or ambiguous with respect to the specific issue, 
the question for the court is whether the agency's answer is based 
on a permissible construction of the statute.

    Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 
837, 842-43 (1984)(footnotes omitted).
    Here, the question is whether Congress has directly spoken to the 
precise question at issue; i.e., whether the statute mandates the 
allocation of fees collected for coal produced after September 30, 
2004, and, if not, whether an interpretation that such allocation is 
not required is reasonable. In this case, the statute does not 
unambiguously require allocation of these fees. Therefore, the agency 
may make the reasonable interpretation that fees collected pursuant to 
section 402(b) for transfer to the CBF are not required to be allocated 
pursuant to section 402(g). Our proposed addition of paragraph (d) to 
section 872.11 of our rules reflects this interpretation.

VIII. How Else Are We Proposing To Revise the AML Fund Rules in 30 CFR 
872.11?

    We are proposing to reorganize 30 CFR 872.11 to incorporate plain 
language principles and make the rules more user-friendly. Those 
changes are not substantive revisions. In addition, we are proposing to 
eliminate redundant or unnecessary language, improve clarity and 
consistency of terminology, consolidate provisions concerning interest, 
and add a paragraph reflecting the statutory requirements concerning 
transfers to the CBF. The most significant proposed changes (other than 
those discussed in Part VII of this preamble) are listed below:
     Removal of the sentence from 30 CFR 872.11(a)(6) providing 
that interest and other non-fee income to the Fund will be credited 
only to ``the Federal share.'' ``Federal share'' is an anachronistic 
term that refers to the structure of section 402(g) of SMCRA as 
originally enacted. At that time, there were only two types of 
accounts: State/tribal share and the Secretary's discretionary share. 
However, as part of the Abandoned Mine Reclamation Act of 1990 (Pub. L. 
101-508, 104 Stat. 1388-289 through 1388-299), Congress carved several 
other mandatory allocations (the RAMP allocation and the historical 
production allocation) from the original Secretary's discretionary 
share. The preamble to 30 CFR 872.11(a)(6), as revised on May 31, 1994 
(see 59 FR 28148-49), clarifies that the term Federal share refers to 
three separate allocations (RAMP, historical production, and the 
Secretary's discretionary share), consistent with the changes that 
Congress made to section 402(g) of the Act.
    Paragraph (b) of 30 CFR 872.11 also specifies that interest must be 
allocated among those three accounts. Therefore, we are proposing to 
remove this sentence from paragraph (a), both to eliminate any 
confusion that it may cause and because it is redundant to provisions 
in paragraph (b). Furthermore, the purpose of paragraph (a) is to 
identify all types of Fund revenues, not to allocate those revenues. 
Paragraph (b) addresses allocations.
     Removal of language from 30 CFR 872.11(a)(6), (b)(3), and 
(b)(4) that references transfers from the AML Fund to the CBF. Proposed 
new paragraph (e) would address those transfers in a comprehensive 
fashion. Specifically, consistent with paragraphs (g)(1) and (h)(1) of 
section 402 of SMCRA, proposed new paragraph (e)(4), like the language 
proposed for deletion, specifies that the amount transferred to the CBF 
is not subject to the allocation provisions of section 402(g) of the 
Act and 30 CFR 872.11(b).
     Modification of the introductory language of paragraph (b) 
of section 872.11 to clarify that that paragraph governs allocation of 
all Fund revenues (except fees collected for coal produced after 
September 30, 2004, and an amount of other revenues equal to

[[Page 56140]]

monies transferred to the CBF), not just those appropriated by 
Congress.
     Modification of the provision in paragraphs (b)(1) and (2) 
of section 872.11 concerning withdrawal of unexpended grant funds from 
States and Indian tribes to clarify that we will withdraw those funds 
only if the State or tribe no longer has any eligible and available 
abandoned mine sites to reclaim. This change is consistent with the 
explanation of the meaning of this provision in the preamble to the 
existing rule (see 59 FR 28150-51, May 31, 1994). In relevant part, the 
preamble states at 59 FR 28151 that:

    OSM's practice since the beginning of the AML program is not to 
withdraw funds from the States/Indian tribes. Rather, funds which 
are not expended by a State/Indian tribe during the grant period are 
returned to the State/Indian tribe account for future grants.

    Therefore, we are proposing in paragraphs (b)(1)(iii) and (2)(ii) 
to specify that unexpended grant funds will be reallocated only if the 
Director finds in writing that the amounts involved are not necessary 
to carry out reclamation activities on lands within the State or on 
Indian lands subject to the tribe's jurisdiction.
     Modification of paragraph (b)(3) of section 872.11 to 
specify that, consistent with the provisions of section 402(g)(2) of 
SMCRA, the RAMP allocation consists of 20 percent of all Fund revenues 
(including available interest) remaining after making State and tribal 
share allocations. The existing rule assigns RAMP ten percent of all 
Fund revenues plus 20 percent of available interest earnings and other 
miscellaneous Fund receipts.
     Removal of paragraph (b)(8) of section 872.11 as that 
paragraph merely duplicates the requirements of paragraph (b)(5)(iii).
     Revision of paragraph (b)(5)(iv) of section 872.11 to 
adopt language more consistent with that of section 402(g)(3)(D), which 
provides that money from the Secretary's discretionary share may be 
used ``[f]or the administration of this title by the Secretary.'' 
Existing paragraph (b)(5)(iv) provides that the Secretary may use those 
monies for ``[a]dministration of the Abandoned Mine Land Reclamation 
Program.'' To avoid any confusion about the scope of that provision, we 
are proposing to revise this paragraph to authorize expenditures for 
``[a]dministration of title IV of the Act and this subchapter 
[subchapter R of our regulations].''
     Modification of paragraph (b)(7) of section 872.11 to 
replace references to statutory provisions with references to the 
corresponding provisions of our regulations. This change would make our 
regulations more specific and user-friendly as the reader would not 
have to flip through the statute and then compare those provisions to 
our regulations to determine their applicability.
     Addition of a new paragraph (e) to section 872.11 to 
provide a partial counterpart in our regulations to the CBF transfer 
requirements of section 402(h) of SMCRA and to clarify certain of those 
requirements, especially the applicability of the $70 million cap on 
annual transfers (see Part V of this preamble).

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

    In this proposed rule, we are publishing and seeking comment on the 
same changes that we are making to 30 CFR part 870 in a final rule 
published separately in today's Federal Register. As explained in the 
preamble to the final rule, we are making those changes effective 
immediately because of the need to have a fee in place on October 1, 
2004, and ensure the continued transfer of monies to the Combined 
Benefit Fund. As discussed in Parts VII and VIII of this preamble, the 
proposed rule also includes changes to 30 CFR Part 872, the most 
significant of which would provide that the new fees need not be 
allocated under section 402(g) of SMCRA. After considering comments on 
the proposed rule, we may make changes to any or all of the provisions 
of this proposed rule. Because the proposed rule mirrors the final rule 
that we are adopting today with respect to 30 CFR Part 870, the public 
will have the opportunity to comment on all issues that we are 
addressing in both the proposed and final rules. However, the final 
rule that we are adopting today will remain in place until the 
effective date of any changes that we make. We invite comment on 
whether any changes that we make to 30 CFR Part 870 as a result of 
comments received should be made effective as of October 1, 2004, to 
ensure that they apply during the entirety of FY 2005.

X. How Do I Submit Comments on the Proposed Rule?

Electronic or Written Comments

    Your comments should reference a specific portion of the proposed 
rule or preamble, explain the reason for any recommended change or 
objection, and include supporting data when appropriate. The most 
helpful comments are those that include citations to and analyses of 
SMCRA, its legislative history, its implementing regulations, case law, 
other pertinent Federal laws or regulations, technical literature, or 
other relevant publications or that involve personal experience.
    We will not consider anonymous comments, but you may request that 
identifying information be withheld as discussed below under 
``Availability of comments.'' Please include the docket number for this 
rulemaking (1029-AC47) at the beginning of all written comments and in 
the subject line of all electronic comments. Except for comments 
provided in electronic format, please submit three copies of your 
comments if practicable. Comments received after the close of the 
comment period (see DATES) or at locations other than those listed 
above under ADDRESSES will not be considered or included in the 
administrative record of this rulemaking.

Availability of Comments

    Except as noted below, all comments, including the names and 
addresses of commenters, will be available for review during regular 
business hours in our Administrative Record room at the location listed 
under ADDRESSES.
    You may request that we withhold your home address from the 
administrative record. We will honor all such requests from individual 
commenters to the extent allowable by law. We also will withhold your 
identity upon request, to the extent allowable by law. If you wish us 
to withhold your name and/or address, you must state this request 
prominently at the beginning of your comment. In addition, if you wish 
this information withheld, please do not submit your comments by 
electronic means.
    We will not withhold names or addresses in comments submitted by 
organizations, business entities, or individuals identifying themselves 
as representatives or officials of organizations or business entities. 
All such comments will be available for public inspection in their 
entirety.

Public Hearings

    We will hold a public hearing on the proposed rule upon request 
only. We will announce the time, date, and address for any hearing in 
the Federal Register at least 7 days before the hearing.
    If you wish to testify at a hearing please contact the person 
listed in FOR FURTHER INFORMATION CONTACT, either orally or in writing, 
by 4:30 p.m., Eastern time, on November 16, 2004. If no one expresses 
an interest in testifying at a hearing by that date, we will not hold a 
hearing. If only one person

[[Page 56141]]

expresses an interest, we will hold a public meeting rather than a 
hearing. We will place a summary of the public meeting in the 
administrative record of this rulemaking.
    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 but wish to do so, you will be 
allowed to testify after the scheduled speakers. 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 testifies 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, we 
may hold a public meeting in place of a public hearing. If you wish to 
meet with us to discuss the proposed rule, you may request a meeting by 
contacting the person listed under FOR FURTHER INFORMATION CONTACT. All 
meetings will be open to the public and, if appropriate, we will post 
notice of the meetings. A written summary of each public meeting will 
be included in the administrative record of this rulemaking.

XI. Procedural Matters

A. Executive Order 12866

    This proposed rule is considered a significant rule and is subject 
to review by the Office of Management and Budget under Executive Order 
12866.
    a. This proposed rule would not have an effect of $100 million or 
more on the economy. It would 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 would 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 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 would be 
lower than the existing AML reclamation fees, which expire on September 
30, 2004. The fees imposed under this rule would 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 10 years.
    b. This proposed rule would not create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency.
    c. This proposed rule would not alter the budgetary effects of 
entitlements, grants, user fees, or loan programs or the rights or 
obligations of their recipients.
    d. This proposed 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 proposed rule 
would 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 XI.A. above.

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

    This proposed 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 
would not have a significant effect on the supply, distribution, or use 
of energy.

D. Small Business Regulatory Enforcement Fairness Act

    This proposed 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 XI.A. above, this proposed rule would 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 for the reasons 
stated above.

E. Executive Order 12630--Takings

    This proposed 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 proposed 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 proposed 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. 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 proposed 
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 proposed rule would 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 would be a reduction in the fee rates printed on the form.

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

[[Page 56142]]

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

30 CFR Part 870

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

30 CFR Part 872

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

    Dated: September 7, 2004.
Chad Calvert,
Acting Assistant Secretary, Land and Minerals Management.
    For the reasons set forth in the preamble, the Department is 
proposing to amend 30 CFR Parts 870 and 872 as follows:

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

    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.

    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.
    3. Amend Sec.  870.13 as follows:
    A. Revise the section heading.
    B. Redesignate paragraphs (a) through (d) as paragraphs (a)(1) 
through (4).
    C. Add a heading for paragraph (a).
    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 56143]]

    (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.

PART 872--ABANDONED MINE RECLAMATION FUNDS

    4. The authority citation for Part 872 is revised to read as 
follows:

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

    5. Amend Sec.  872.11 as follows:
    A. In paragraph (a):
    i. Revise the introductory text.
    ii. Revise paragraph (a)(1).
    iii. Remove the word ``and'' in paragraph (a)(4).
    iv. Remove the period and add in its place ``; and'' in paragraph 
(a)(5).
    v. Revise paragraph (a)(6).
    B. In paragraph (b):
    i. Revise the introductory text.
    ii. Revise paragraphs (b)(1) through (b)(5).
    iii. Add a new heading in paragraph (b)(6).
    iv. Revise paragraph (b)(7).
    v. Remove paragraph (b)(8).
    C. Add paragraphs (d) and (e).
    The revisions and additions read as follows.


Sec.  872.11  Abandoned Mine Reclamation Fund.

    (a) Fund revenues. Revenues to the Fund include--
    (1) Fees collected under section 402 of the Act and part 870 of 
this chapter;
* * * * *
    (6) Interest and any other income earned from investment of the 
Fund.
    (b) Allocation of Fund revenues. Except as provided in paragraphs 
(d) and (e) of this section, monies deposited in the Fund will be 
allocated and used as follows, subject to appropriation by Congress--
    (1) State share. An amount equal to 50 percent of the reclamation 
fees collected under Sec.  870.13(a) of this chapter during each fiscal 
year will be allocated at the end of that year to the State in which 
they were collected.
    (i) Reclamation fees collected from Indian lands will not be 
included in the calculation of amounts to be allocated to a State.
    (ii) No monies will be allocated to any State that advises OSM in 
writing that it does not intend to submit a State abandoned mine 
reclamation plan under section 405 of the Act.
    (iii) Amounts granted to a State that have not been expended within 
three years from the date of grant award will be available for use 
under paragraph (b)(5) of this section if the Director finds in writing 
that the amounts involved are not necessary to carry out reclamation 
activities on lands within the State.
    (2) Tribal share. An amount equal to 50 percent of the reclamation 
fees collected from Indian lands under Sec.  870.13(a) of this chapter 
during each fiscal year will be allocated at the end of that year to 
the Indian tribe or tribes having an interest in the lands from which 
the fees were collected.
    (i) No monies will be allocated to any Indian tribe that advises 
OSM in writing that it does not intend to submit a tribal abandoned 
mine reclamation plan under section 405 of the Act.
    (ii) Amounts granted to an Indian tribe that have not been expended 
within three years from the date of grant award will be available for 
use under paragraph (b)(5) of this section if the Director finds in 
writing that the amounts involved are not necessary to carry out 
reclamation activities on Indian lands subject to the tribe's 
jurisdiction.
    (3) Rural Abandoned Mine Program. An amount equal to 20 percent of 
the monies collected and deposited in the Fund each fiscal year 
(including interest but excluding monies allocated under paragraphs 
(b)(1) and (2) of this section) will be allocated for transfer to the 
Secretary of Agriculture for the Rural Abandoned Mine Program 
authorized by section 406 of the Act.
    (4) Grants based on historical coal production. An amount equal to 
40 percent of the monies collected and deposited in the Fund each 
fiscal year (including interest but excluding monies allocated under 
paragraphs (b)(1) and (2) of this section) will be allocated for use by 
the Secretary to supplement annual grants to States and Indian tribes 
under section 405 of the Act.
    (i) States and Indian tribes eligible for supplemental grants are 
those that have not--
    (A) Certified the completion of all eligible coal-related 
reclamation needs under section 411(a) of the Act; and
    (B) Completed the reclamation of all sites meeting the priorities 
in paragraphs (a)(1) and (2) of section 403 of the Act.
    (ii) In allocating these funds to eligible States and Indian 
tribes, the Secretary will use a formula based upon the amount of coal 
historically produced before August 3, 1977, in the State or from the 
Indian lands concerned.
    (iii) The Secretary will not provide funds under this paragraph to 
a State or Indian tribe in any year in which funds to be granted during 
that year from the State's allocation under paragraph (b)(1) of this 
section or the tribe's allocation under paragraph (b)(2) of this 
section will be sufficient to address all remaining eligible coal-
related sites in the State or on the tribe's Indian lands that meet the 
priorities in paragraphs (a)(1) and (2) of section 403 of the Act.
    (iv) Funds awarded to a State or Indian tribe under this paragraph 
may not exceed the amount needed to fully address all remaining 
eligible coal-related sites in the State or on the tribe's Indian lands 
that meet the priorities in paragraphs (a)(1) and (2) of section 403 of 
the Act after utilizing all available funds under paragraph (b)(1) or 
(2) of this section.
    (5) Secretary's discretionary share. Monies collected and deposited 
in the Fund that are not allocated under paragraphs (b)(1) through (4) 
of this section may be used for any of the following purposes--
    (i) Up to $10 million per year for the small operator assistance 
program under section 507(c) of the Act;
    (ii) Emergency projects under section 410 of the Act, including 
grants to States and Indian tribes for this purpose;
    (iii) Non-emergency abandoned mine land reclamation projects on 
eligible lands in States without an approved abandoned mine reclamation 
plan under section 405 of the Act or on eligible Indian lands where the 
Indian tribe does not have an approved abandoned mine reclamation plan 
under section 405 of the Act;
    (iv) Administration of title IV of the Act and this subchapter; and
    (v) Projects authorized under section 402(g)(4) of the Act in 
States without an approved abandoned mine reclamation plan under 
section 405 of the Act or on Indian lands where the Indian tribe does 
not have an approved abandoned mine reclamation plan under section 405 
of the Act.
    (6) Minimum program grants. * * *
    (7) Special allocation provisions. Funds allocated or expended by 
the Secretary under paragraphs (b)(3) and (5) of this section will not 
be deducted from funds allocated or granted to a State or Indian tribe 
under paragraphs (b)(1), (2), (4), and (6) of this section.
* * * * *
    (d) Disposition of fees collected for coal produced after September 
30, 2004. Fees collected under Sec.  870.13(b) of this

[[Page 56144]]

chapter for a fiscal year will be allocated to the accounts from which 
the amount transferred under paragraph (e) of this section was taken at 
the beginning of that fiscal year. The amount allocated to each account 
will be proportionate to the amount transferred from that account.
    (e) Transfers to Combined Benefit Fund. (1) At the beginning of 
each fiscal year for which fees must be paid under section 402 of the 
Act and Sec.  870.13 of this chapter, the Secretary will transfer 
monies from the Fund 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) for the purpose described in section 
402(h)(3)(A) of the Act and in the amount prescribed in paragraphs 
(h)(2) through (4) of section 402 of the Act.
    (2) The amount of estimated Fund interest earnings transferred to 
the Combined Benefit Fund under paragraph (e)(1) of this section in any 
one fiscal year may not exceed the lesser of $70 million or the amount 
of the expenditures described in section 402(h)(3)(A) of the Act.
    (3) If actual Combined Benefit Fund expenditures differ from the 
estimates provided under section 402(h)(3)(A) of the Act, or if 
interest earnings differ from the projections used to determine the 
amount of the transfer under section 402(h)(2)(A) of the Act, the 
amount transferred from the Fund to the Combined Benefit Fund in future 
years will be adjusted accordingly. However, the total amount 
ultimately transferred for any one fiscal year may not exceed $70 
million, although adjustments for transfers in prior fiscal years may 
result in the transfer of more than $70 million during any given year.
    (4) The amount transferred under paragraph (e)(1) of this section 
will be deducted from the amount of Fund revenues subject to allocation 
under paragraphs (b)(3) through (5) of this section at the end of the 
fiscal year.

[FR Doc. 04-20998 Filed 9-16-04; 8:45 am]
BILLING CODE 4310-05-P