[Federal Register Volume 70, Number 250 (Friday, December 30, 2005)]
[Rules and Regulations]
[Pages 77321-77325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24643]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 948

[WV-108-FOR]


West Virginia Regulatory Program

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

ACTION: Final rule; approval of amendment.

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SUMMARY: We are approving an amendment to the West Virginia regulatory 
program (the West Virginia program) under the Surface Mining Control 
and Reclamation Act of 1977 (SMCRA or the Act). West Virginia revised 
its Code of State Regulations (CSR) concerning surety bonds. The 
amendment is intended to provide the State with an alternative source 
of reliable financial information about the surety, and to allow 
sureties that are licensed and in good financial condition but are not 
currently listed with the U.S. Department of the Treasury as an 
acceptable surety of Federal bonds to provide surety bonds to the coal 
industry in West Virginia. The amendment was authorized by the West 
Virginia Secretary of State as an emergency rule under the State's 
Administrative Procedures Act.

DATES: Effective Date: December 30, 2005.

FOR FURTHER INFORMATION CONTACT: Mr. Roger W. Calhoun, Director, 
Charleston Field Office, 1027 Virginia Street East, Charleston, West 
Virginia 25301. Telephone: (304) 347-7158, Internet address: 
[email protected].

SUPPLEMENTARY INFORMATION:

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

I. Background on the West Virginia Program

    Section 503(a) of the Act permits a State to assume primacy for the 
regulation of surface coal mining and reclamation operations on non-
Federal and non-Indian lands within its borders by demonstrating that 
its program includes, among other things, ``* * * a State law which 
provides for the regulation of surface coal mining and reclamation 
operations in accordance with the requirements of the Act * * *; and 
rules and regulations consistent with regulations issued by the 
Secretary pursuant to the Act.'' See 30 U.S.C. 1253(a)(1) and (7). On 
the basis of these criteria, the Secretary of the Interior 
conditionally approved the West Virginia program on January 21, 1981. 
You can find background information on the West Virginia program, 
including the Secretary's findings, the disposition of comments, and 
conditions of approval of the West Virginia program in the January 21, 
1981, Federal Register (46 FR 5915). You can also find later actions 
concerning West Virginia's program and program amendments at 30 CFR 
948.10, 948.12, 948.13, 948.15, and 948.16.

II. Submission of the Amendment

    By letter dated October 17, 2005 (Administrative Record Number WV-
1441), the West Virginia Department of Environmental Protection (WVDEP) 
submitted an amendment to its program under SMCRA (30 U.S.C. 1201 et 
seq.). The amendment consists of a proposed emergency rule revision to 
CSR 38-2-11.3.a.3 concerning surety bonds, a briefing document, an 
emergency rule justification, which includes an affidavit that was 
submitted in support of the emergency rule package, and a decision by 
the Secretary of State dated October 11, 2005, approving the emergency 
rule.
    In its submittal of this amendment, the WVDEP stated that its 
current rule at CSR 38-2-11.3.a.3 requires that after July 1, 2001, a 
surety must be recognized by the Treasurer of the State as holding a 
certificate of authority from the United States Department of the 
Treasury as an acceptable surety on Federal bonds (otherwise referred 
to as being ``T-Listed''). The WVDEP stated that the original standard 
was adopted to address concerns about the financial solvency of 
sureties providing reclamation bonds in West Virginia. The WVDEP did 
not have the necessary resources or expertise to regularly and timely 
monitor the financial condition of sureties doing business in West 
Virginia. However, a surety that is T-Listed is required to provide, on 
a regular basis, financial information to the U.S. Department of the 
Treasury, which reviews this information and provides its findings to 
State regulatory agencies. While this information provided by the 
Department of the Treasury has been helpful, WVDEP

[[Page 77322]]

stated, this restriction has prevented sureties that are not T-Listed, 
and that are otherwise in good financial condition, from providing 
reclamation bonds in West Virginia. The WVDEP stated that this, along 
with other reasons, has adversely impacted the market for reclamation 
bonds in West Virginia. Further, the WVDEP stated, since a surety must 
have at least two years experience providing surety bonds before it can 
be T-Listed, a new insurance company or an existing insurance company 
that has not previously issued surety bonds cannot offer surety bonds 
in West Virginia.
    The WVDEP stated that the emergency rule amendment to CSR 38-2-
11.3.a.3 not only addresses the concerns noted above by providing an 
alternative source of reliable financial information about the surety, 
but it also allows sureties that are licensed and in good financial 
condition but are not T-Listed to provide surety bonds in West 
Virginia.
    The WVDEP stated that an ``emergency'' exists under the State's 
Administrative Procedures Act because there is presently a great demand 
for reclamation bonds from the coal industry in West Virginia that is 
not being met by the limited number of sureties currently offering 
surety bonds in West Virginia. As a result, alternative, more expensive 
means are being used by coal companies to comply with the State's 
bonding requirements. Among other things, this has greatly restricted 
the availability of capital for the development of new coal mines and 
the creation of new jobs. The State acknowledges that at a time when 
coal is so important to West Virginia's economy, this dearth of surety 
bonds is having a significant negative impact on West Virginia's coal 
industry. The proposed amendment to 38 CSR 2 is thus necessary ``to 
prevent substantial harm to the public interest.''
    By electronic mail dated November 4, 2005, WVDEP submitted 
revisions it made to its emergency rule based upon the State's comment 
period which ended on October 27, 2005 (Administrative Record Number 
WV-1447). The revision package consists of the amended emergency rule, 
Form 8 Notice of an Emergency Amendment to an Emergency Rule, 
amended Emergency Rule Questionnaire dated October 28, 2005, and Form 
3 Notice of Agency Approval of a Proposed Rule and Filing with 
the Legislative Rulemaking Review Committee. These documents were filed 
with the West Virginia Secretary of State and the Legislative 
Rulemaking Review Committee on November 2, 2005.
    We announced receipt of the proposed amendment in the November 8, 
2005, Federal Register (70 FR 67654). In the same document, we opened 
the public comment period and provided an opportunity for a public 
hearing or meeting on the adequacy of the proposed amendment 
(Administrative Record Number WV-1448). We did not hold a hearing or a 
meeting because no one requested one. The public comment period closed 
on December 8, 2005. We received comments from one industry 
organization and one Federal agency.

III. OSM's Findings

    Following are the findings that we made concerning the amendment 
under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We 
are approving the amendment in full, as modified on November 4, 2005. 
Any revisions that we do not specifically discuss below concern 
nonsubstantive wording or editorial changes and are approved here 
without discussion.

CSR 38-2-11.3.a.3 Surety

    The existing rule currently provides that surety received after 
July 1, 2001, must be recognized by the Treasurer of the State as 
holding a current certificate of authority from the U.S. Department of 
the Treasury as an acceptable surety on Federal bonds. In its October 
17, 2005, submittal, CSR 38-2-11.3.a.3 was proposed to be amended by 
adding new language at the end of the existing requirement to provide 
as follows:

    11.3.a.3. Surety received after July 1, 2001 must: (i) be 
recognized by the treasurer of state as holding a current 
certificate of authority from the United States Department of the 
Treasury as an acceptable surety on federal bonds; Or (ii) submit to 
the Secretary proof that the surety holds a valid license issued by 
the basis a certificate of good standing or other evidence 
demonstrating that the surety remains licensed or otherwise in good 
standing with the West Virginia Insurance Commissioner and the 
insurance regulator of its domiciliary state and within four (4) 
years take all steps necessary to obtain a certificate of authority 
from the United States Department of the Treasury as an acceptable 
surety on federal bonds.

    The WVDEP filed the emergency rule with the West Virginia Secretary 
of State on September 21, 2005. The Secretary of State approved the 
rule on an emergency basis pursuant to W. Va. Code 29A-3-15a on October 
11, 2005.
    The WVDEP also filed a legislative rule containing the same 
language with the Secretary of State on September 21, 2005 
(Administrative Record Number WV-1442). At the same time, the State 
announced a public comment period on the legislative rule. The public 
comment period commenced on September 21, 2005, and closed on October 
27, 2005. A public hearing was held at the WVDEP office in Kanawha City 
prior to the close of the comment period.
    On October 3, 2005, the WVDEP provided OSM a copy of the proposed 
rule for informal review. Unlike the State's existing surety bond 
provisions at CSR 38-2-11.3.a.1 and the Federal surety bond 
requirements at 30 CFR 800.20(a), the proposed revision at CSR 38-2-
11.3.a.3 did not appear to require the surety to be licensed to do 
business in the State. To resolve this concern and to make additional 
clarifications without altering the purpose or intent of either the 
emergency or the legislative rule, on October 14, 2005 (Administrative 
Record Number WV-1443), OSM recommended that the language in both rules 
be revised as follows:

    11.3.a.3. Any company that executes surety bonds in the State 
after July 1, 2001, must: (i) Be recognized by the treasurer of the 
state as holding a current certificate of authority from the United 
States Department of the Treasury as an acceptable surety on federal 
bonds by being included on the Treasury Department's listing of 
approved sureties (Department Circular 570); or (ii) submit proof to 
the Secretary that it holds a valid license issued by the West 
Virginia Insurance Commissioner, and agree to submit to the 
Secretary on at least a quarterly basis a certificate of good 
standing from the West Virginia Insurance Commissioner and such 
other evidence from the insurance regulator of its domiciliary 
state, if other than West Virginia, demonstrating that it is also in 
good standing in that state. Companies not included on the United 
States Treasury Department's listing of approved sureties must 
diligently pursue application for listing, submit evidence on a 
semi-annual basis demonstrating that they are pursuing such listing, 
and within four (4) years, obtain a certificate of authority from 
the United States Department of the Treasury as an acceptable surety 
on federal bonds.

    At the time, State officials agreed that while the recommended 
technical revisions offered by OSM appeared to clarify that a surety 
must be licensed to do business in the State and did not change the 
intent of their initial rule, they needed to wait until after the close 
of their comment period before making any changes to the rule. The 
WVDEP stated that it would submit the revisions and any additional 
changes to OSM after the close of the State's comment period on October 
27, 2005. The WVDEP further stated that the revision would be in the 
form of both an emergency and a legislative rule. We subsequently 
stated in our November 8, 2005, proposed rule notice that if the WVDEP 
submits revised rules that contain language identical to the language 
recommended by OSM, and

[[Page 77323]]

quoted above, that revised language would be acted upon by OSM in this 
final rulemaking. If substantive changes beyond or other than those 
recommended by OSM were included in the revised rules, we stated that 
we may need to reopen the comment period.
    The legislative rule was submitted to the Legislative Rulemaking 
Review Committee after the close of the comment period, and it is to be 
acted upon by the West Virginia Legislature during the upcoming 2005-
2006 regular legislative session. If that rule is adopted with the 
identical language recommended by OSM as quoted above, no further 
action will be required by OSM, and it will become part of West 
Virginia's permanent regulatory program upon submission by the State.
    Given that an emergency situation currently exists in West Virginia 
with regard to surety bonds and to avoid any unnecessary delays in 
approving the proposed State rule, we requested comments on both the 
proposed State rule and our suggested revisions to that rule as quoted 
above. We stated in the proposed rule notice that any changes adopted 
by the State after the close of its public comment period would result 
in the revision to both its emergency and legislative rules. As 
mentioned above, any substantive changes in the proposed State rules 
that go beyond the suggested language provided by OSM and quoted above 
would also be subject to further rulemaking.
    In its November 4, 2005, submittal, the WVDEP provided revisions to 
its emergency rule at CSR 38-2-11.3.a.3 that were approved by the West 
Virginia Secretary of State. The effective date of the revision is 
September 21, 2005. As proposed in the State's November 4, 2005, 
submittal, the existing language was deleted and CSR 38-2-11.3.a.3 now 
provides as follows:

    11.3.a.3. Any company that executes surety bonds in the State 
after July 1, 2001, must: (i) Be recognized by the treasurer to [of] 
the state as holding a current certificate of authority from the 
United States Department of the Treasury as an acceptable surety on 
federal bonds by being included on the Treasury Department's listing 
of approved sureties (Department Circular 570); or (ii) submit proof 
to the Secretary that it holds a valid license issued by the West 
Virginia Insurance Commissioner, and agree to submit to the 
Secretary on at least a quarterly basis a certificate of good 
standing from the West Virginia Insurance Commissioner and such 
other evidence from the insurance regulator of its domiciliary 
state, if other than West Virginia, demonstrating that it is also in 
good standing in that state. Companies not included on the United 
States Treasury Department's listing of approved sureties must 
diligently pursue application for listing, submit evidence on a 
semi-annual basis demonstrating that they are pursuing such listing, 
and within four (4) years, obtain a certificate of authority from 
the United States Department of the Treasury as an acceptable surety 
on federal bonds.

    With the exception of the typographical error which the State 
intends to correct (``to'' should be changed to ``of''), we find that 
the revised emergency rule language submitted by the State on November 
4, 2005, is identical to the language that OSM recommended it adopt, 
and that is quoted above, to resolve our initial concerns with the 
language that was submitted on October 17, 2005. Furthermore, we find 
that, as amended, the emergency rule at CSR 38-2-11.3.a.3 contains 
changes that have no direct Federal counterparts, but is, nevertheless, 
consistent with and no less effective than the Federal regulations at 
30 CFR 800.20(a) concerning surety bonds and can be approved. As we 
stated above, the legislative rule that will make permanent the 
provisions of the emergency rule was submitted to the West Virginia 
Legislative Rulemaking Review Committee on November 2, 2005. That 
provision will be acted upon by the West Virginia Legislature during 
the upcoming 2005-2006 regular legislative session. If that legislative 
rule is adopted with language identical to that which we are approving 
here, and quoted above, no further action will be required by OSM, and 
it will become part of West Virginia's permanent regulatory program 
upon submission by the State. Any substantive changes to that 
legislative rule that go beyond the language that we are approving here 
and quoted above will be subject to public review and further 
rulemaking.

IV. Summary and Disposition of Comments

Public Comments

    We published a Federal Register notice on November 8, 2005, and 
asked for public comments on the proposed State amendment 
(Administrative Record Number WV-1448). One organization responded on 
December 2, 2005 (Administrative Record Number WV-1450). The West 
Virginia Coal Association (WVCA) encouraged OSM's approval of the 
amendment. According to the WVCA, there are currently a very limited 
number of surety companies offering surety bonds in West Virginia. 
Because of market conditions, there is a great demand for surety bonds. 
The WVCA said that the proposed amendment would not only have the 
potential to increase the availability of bonds in West Virginia, but 
it would do so without increasing any risk for the State. It would only 
allow surety companies that are licensed in West Virginia and in good 
standing/good financial condition, but are not T-listed, to market 
surety bonds in West Virginia. As noted above in the finding, we are 
approving the amendment.

Federal Agency Comments

    Under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA, we 
requested comments on the amendment from various Federal agencies with 
an actual or potential interest in the West Virginia program 
(Administrative Record Number WV-1446). We only received comments from 
the U.S. Environmental Protection Agency. Its comments are summarized 
below.

Environmental Protection Agency (EPA) Concurrence and Comments

    Under 30 CFR 732.17(h)(11)(ii), we are required to obtain written 
concurrence from EPA for those provisions of the program amendment that 
relate to air or water quality standards issued under the authority of 
the Clean Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 
U.S.C. 7401 et seq.). None of the revisions that West Virginia proposed 
to make in this amendment pertain to air or water quality standards. 
Therefore, we did not ask EPA to concur on the amendment.
    Under 30 CFR 732.17(h)(11)(i), we requested comments on the 
amendment from EPA (Administrative Record Number WV-1446). EPA 
responded by letter dated December 5, 2005, and stated that it did not 
identify any apparent inconsistencies with the Clean Water Act or other 
statutes and regulations under EPA's jurisdiction. EPA went on to say, 
``Our primary interests concerning reclamation bonds are that they be 
sufficient to provide restoration of land and water resources in case 
of bankruptcy and that surety companies which underwrite these bonds 
remain solvent.'' (Administrative Record Number WV-1451). We note that 
the amendment that we are approving here does not alter the State's 
approved bonding requirements concerning the amount of bond.

V. OSM's Decision

    Based on the above findings, we are approving the program amendment 
West Virginia sent us on October 17, 2005, and amended on November 4, 
2005. To implement this decision, we are amending the Federal 
regulations at 30 CFR part 948, which codify decisions concerning the 
West Virginia program. We find that good cause exists under 5

[[Page 77324]]

U.S.C. 553(d)(3) to make this final rule effective immediately. Section 
503(a) of SMCRA requires that the State's program demonstrate that the 
State has the capability of carrying out the provisions of the Act and 
meeting its purposes. Making this rule effective immediately will 
expedite that process. SMCRA requires consistency of State and Federal 
standards.

VI. Procedural Determinations

Executive Order 12630--Takings

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

Executive Order 12866--Regulatory Planning and Review

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

Executive Order 12988--Civil Justice Reform

    The Department of the Interior has conducted the reviews required 
by section 3 of Executive Order 12988 and has determined that this rule 
meets the applicable standards of subsections (a) and (b) of that 
section. However, these standards are not applicable to the actual 
language of State regulatory programs and program amendments because 
each program is drafted and promulgated by a specific State, not by 
OSM. Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and 
the Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10), 
decisions on proposed State regulatory programs and program amendments 
submitted by the States must be based solely on a determination of 
whether the submittal is consistent with SMCRA and its implementing 
Federal regulations and whether the other requirements of 30 CFR parts 
730, 731, and 732 have been met.

Executive Order 13132--Federalism

    This rule does not have federalism implications. SMCRA delineates 
the roles of the Federal and State Governments with regard to the 
regulation of surface coal mining and reclamation operations. One of 
the purposes of SMCRA is to ``establish a nationwide program to protect 
society and the environment from the adverse effects of surface coal 
mining operations.'' Section 503(a)(1) of SMCRA requires that State 
laws regulating surface coal mining and reclamation operations be ``in 
accordance with'' the requirements of SMCRA, and section 503(a)(7) 
requires that State programs contain rules and regulations ``consistent 
with'' regulations issued by the Secretary pursuant to SMCRA.

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

    In accordance with Executive Order 13175, we have evaluated the 
potential effects of this rule on Federally-recognized Indian tribes 
and have determined that the rule does not have substantial direct 
effects on one or more Indian tribes, on the relationship between the 
Federal Government and Indian tribes, or on the distribution of power 
and responsibilities between the Federal Government and Indian tribes. 
The basis for this determination is that our decision is on a State 
regulatory program and does not involve a Federal regulation involving 
Indian lands.

Executive Order 13211--Regulations That Significantly Affect the 
Supply, Distribution, or Use of Energy

    On May 18, 2001, the President issued Executive Order 13211 which 
requires agencies to prepare a Statement of Energy Effects for a rule 
that is (1) considered significant under Executive Order 12866, and (2) 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. Because this rule is exempt from review 
under Executive Order 12866 and is not expected to have a significant 
adverse effect on the supply, distribution, or use of energy, a 
Statement of Energy Effects is not required.

National Environmental Policy Act

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

Paperwork Reduction Act

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

Regulatory Flexibility Act

    The Department of the Interior certifies that this rule will not 
have a significant economic impact on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
The State submittal, which is the subject of this rule, is consistent 
with and no less effective than the Federal bonding regulations for 
which an economic analysis was prepared and certification made that 
such regulations would not have a significant economic effect upon a 
substantial number of small entities. In making the determination as to 
whether this rule would have a significant economic impact, the 
Department relied upon the data and assumptions used in the Federal 
bonding regulations.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule: (a) Does not 
have an annual effect on the economy of $100 million; (b) Will not 
cause a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions; and (c) Does not have significant adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S.-based enterprises to compete with foreign-based 
enterprises. This determination is based upon the analysis performed 
under various laws and executive orders for the Federal bonding 
regulations.

Unfunded Mandates

    This rule will not impose an unfunded mandate on State, local, or 
tribal governments or the private sector of $100 million or more in any 
given year. This determination is based upon the analysis performed 
under various laws and executive orders for the Federal bonding 
regulations.

List of Subjects in 30 CFR Part 948

    Intergovernmental relations, Surface mining, Underground mining.

    Dated: December 15, 2005.
Michael K. Robinson,
Acting Regional Director, Appalachian Region.

0
For the reasons set out in the preamble, 30 CFR part 948 is amended as 
set forth below:

PART 948--WEST VIRGINIA

0
1. The authority citation for part 948 continues to read as follows:

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


0
2. Section 948.15 is amended by adding a new entry to the table in 
chronological order by ``Date of publication of final rule'' to read as 
follows:

[[Page 77325]]

Sec.  948.15  Approval of West Virginia regulatory program amendments.

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Original amendment submission date    Date of publication of  final rule            Citation/description
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                                                  * * * * * * *
October 17, 2005, and amended       December 30, 2005....................  CSR 38-2-11.3.a.3.
 November 4, 2005.
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[FR Doc. 05-24643 Filed 12-29-05; 8:45 am]
BILLING CODE 4310-05-P