[Federal Register Volume 73, Number 120 (Friday, June 20, 2008)]
[Proposed Rules]
[Pages 35214-35267]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-13310]



[[Page 35213]]

-----------------------------------------------------------------------

Part II





Department of the Interior





-----------------------------------------------------------------------



Office of Surface Mining Reclamation and Enforcement



-----------------------------------------------------------------------



30 CFR Parts 700, 724, et al.



Abandoned Mine Land Program; Proposed Rule

  Federal Register / Vol. 73, No. 120 / Friday, June 20, 2008 / 
Proposed Rules  

[[Page 35214]]


-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 700, 724, 773, 785, 816, 817, 845, 846, 870, 872, 873, 
874, 875, 876, 879, 880, 882, 884, 885, 886, and 887

RIN 1029-AC56
[Docket ID: OSM-2008-0003]


Abandoned Mine Land Program

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: We, the Office of Surface Mining Reclamation and Enforcement 
(OSM), are proposing regulation changes to the Abandoned Mine 
Reclamation Fund (Fund) and the Abandoned Mine Land (AML) program. This 
proposed rule revises our regulations to be consistent with the Tax 
Relief and Health Care Act of 2006, Pub. L. 109-432, signed into law on 
December 20, 2006, which included the Surface Mining Control and 
Reclamation Act Amendments of 2006 (the 2006 amendments). The proposed 
rule reflects the extension of our statutory authority to collect 
reclamation fees for an additional fourteen years and to reduce the fee 
rates. This proposal also updates the regulations in light of the 
statutory amendments that change the activities State and Tribal 
reclamation programs may perform under the AML program, funding for 
reclamation grants to States and Indian tribes, and transfers to the 
United Mine Workers of America (UMWA) Combined Benefit Fund (CBF), the 
UMWA 1992 Benefit Plan, and the UMWA Multiemployer Health Benefit Plan 
(1993 Benefit Plan). Finally, our proposed rule extends incentives 
reauthorized by the 2006 amendments pertaining to the remining of 
certain lands and water adversely affected by past mining.

DATES: Comments on the proposed rule must be received on or before 
August 19, 2008, in order to ensure our consideration. We will accept 
requests to speak at a public hearing until 5 p.m., Eastern Time on 
July 11, 2008.

ADDRESSES: You may submit comments by any of the following methods:
     Federal e-Rulemaking Portal: http://www.regulations.gov. 
The rule is listed under the agency name ``OFFICE OF SURFACE MINING 
RECLAMATION AND ENFORCEMENT.'' The proposed rule has been assigned 
Docket ID: OSM-2008-0003.
    If you would like to submit comments through the Federal e-
Rulemaking Portal, go to www.regulations.gov and do the following. 
Click on the ``Advanced Docket Search'' button on the right side of the 
screen. Type in the Docket ID OSM-2008-0003 and click the ``Submit'' 
button at the bottom of the page. The next screen will display the 
Docket Search Results for the rulemaking. If you click on OSM-2008-
0003, you can view the proposed rule and submit a comment. You can also 
view supporting material and any comments submitted by others.
     Mail/Hand-Delivery/Courier to: Office of Surface Mining 
Reclamation and Enforcement, Administrative Record, Room 252-SIB, 1951 
Constitution Avenue, NW., Washington, DC 20240. Please include the rule 
Docket ID (OSM-2008-0003) with your comment.
    We cannot ensure that comments received after the close of the 
comment period (see DATES) will be included in the docket for the 
rulemaking and considered. Comments sent to an address other than those 
listed above (see ADDRESSES) will not be included in the docket for the 
rulemaking.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see ``IV. Public Comment 
Procedures'' in the SUPPLEMENTARY INFORMATION section of this document.
    If you wish to comment on the information collection aspects of 
this proposed rule, you may submit your comments to the Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
Attention: Interior Desk Officer, via e-mail to [email protected], or via facsimile to 202-365-6566.

FOR FURTHER INFORMATION CONTACT: Danny Lytton, Chief, Reclamation 
Support Division, 1951 Constitution Ave., NW., Washington, DC 20240; 
Telephone: 202-208-2788; E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background on the Reclamation Fee and the Abandoned Mine Land 
Program
II. Outreach, Guidance, and Comments
III. Description of the Proposed Rule
IV. Public Comment Procedures
V. Procedural Determinations

I. Background on the Reclamation Fee and the Abandoned Mine Land 
Program

A. How did the reclamation fee work before the 2006 amendments?

    Title IV of the Surface Mining Control and Reclamation Act of 1977 
(SMCRA) created an AML reclamation program funded by a reclamation fee 
assessed on each ton of coal produced. The fees collected have been 
placed in the Fund. We, either directly or through grants to States and 
Indian tribes with approved AML reclamation plans under SMCRA, have 
been using money 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. 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 UMWA CBF to defray the cost of providing health care 
benefits for certain retired coal miners and their dependents. See 
Energy Policy Act of 1992, Pub. L. 102-486, 106 Stat. 2776, 3056, Sec.  
19143(b)(2) of Title XIX.
    Section 402(a) of SMCRA fixed the reclamation fee for the period 
before September 30, 2007, 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. As originally enacted, section 402(b) of SMCRA authorized 
collection of reclamation fees for 15 years following the date of 
enactment (August 3, 1977); thus, our fee collection authority would 
have expired August 3, 1992. However, Congress extended the fees and 
our fee collection authority through September 30, 1995, in the Omnibus 
Budget Reconciliation Act of 1990 (Pub. L. 101-508, 104 Stat. 1388, 
Sec.  6003(a)). The Energy Policy Act of 1992 (Pub. L. 102-486, 106 
Stat. 2776, 3056, Sec.  19143(b)(1) of Title XIX), extended the fees 
through September 30, 2004. A series of short interim extensions in 
appropriations and other acts extended the fees through September 30, 
2007.

B. How did the AML program work before the 2006 amendments?

    SMCRA established the AML reclamation program in response to 
concern over extensive environmental damage caused by past coal mining 
activities. Before the 2006 amendments, the AML program reclaimed 
eligible lands and waters using money appropriated by Congress from the 
Fund, which came from the reclamation fees collected from the coal 
mining industry. Eligible lands and waters were those which were mined 
for coal or affected by coal mining or coal processing, were abandoned 
or left inadequately reclaimed prior to the

[[Page 35215]]

enactment of SMCRA on August 3, 1977, and for which there was no 
continuing reclamation responsibility under State or other Federal 
laws.
    SMCRA established a priority system for reclaiming coal problems. 
Before the 2006 amendments, the AML program had five priority levels, 
but reclamation was focused on eligible lands and waters that reflected 
the top three priorities. The first priority was ``the protection of 
public health, safety, general welfare, and property from extreme 
danger of adverse effects of coal mining practices.'' 30 U.S.C. 
1233(a)(1) (unamended). The second priority was ``the protection of 
public health, safety, and general welfare from adverse effects of coal 
mining practices.'' 30 U.S.C. 1233(a)(2) (unamended). The third 
priority was ``the restoration of land and water resources and the 
environment previously degraded by adverse effects of coal mining 
practices * * *.'' 30 U.S.C. 1233(a)(3) (unamended).
    As the law required, the Fund was divided into State or Tribal and 
Federal shares. Each State or Indian tribe with a Federally approved 
reclamation plan was entitled to receive 50 percent of the reclamation 
fees collected annually from coal operations conducted within its 
borders. The ``Secretary's share'' of the Fund consisted of the 
remaining 50 percent of the reclamation fees collected annually and all 
other receipts to the Fund. The Secretary's share was allocated into 
three shares as required by the 1990 amendments to SMCRA. See Omnibus 
Budget Reconciliation Act of 1990, Pub. L. 101-508, 104 Stat. 1388, 
Sec.  6004. First, we allocated 40% of the Secretary's share to 
``historic coal'' funds to increase reclamation grants to States and 
Indian tribes for coal reclamation. However, all the funds which were 
allocated may not have been appropriated. Second, we allocated 20% to 
the Rural Abandoned Mine Program (RAMP), operated by the Department of 
Agriculture, which was authorized to receive AML funding but has not 
been appropriated AML funds since the mid 1990's. Last, SMCRA required 
us to allocate 40% to ``Federal expense'' funds to provide grants to 
States for emergency programs that abate sudden dangers to public 
health or safety needing immediate attention, to increase reclamation 
grants in order to provide a minimum level of funding to State and 
Indian tribal programs with unreclaimed coal sites, to conduct 
reclamation of emergency and high-priority coal sites in areas not 
covered by State and Indian tribal programs, and to fund our operations 
that administer Title IV of SMCRA.
    States with an approved State coal regulatory program under Title V 
of SMCRA and with eligible coal mined lands may develop a State program 
for reclamation of abandoned mines. The Secretary may approve the State 
reclamation program and fund it. At the time the 2006 amendments were 
enacted, 23 States received annual AML grants to operate their approved 
reclamation programs. Three Indian tribes (the Navajo, Hopi and Crow 
Indian tribes) without approved regulatory programs have received 
grants for their approved reclamation programs as authorized by section 
405(k) of SMCRA.
    Before the 2006 amendments, only a State or Indian tribe was 
authorized to certify that it had addressed all known coal problems 
within the State or on Indian lands within its jurisdiction. These 
certified States and Indian tribes were able to use AML grant funds to 
abate the impacts of mineral mining and processing. SMCRA established 
the following priorities for the certified programs:
    (1) The protection of public health, safety, general welfare, and 
property from extreme danger of adverse effects from mineral mining and 
processing practices.
    (2) The protection of public health, safety, and general welfare 
from adverse effects of mineral mining and processing practices.
    (3) The restoration of land and water resources and the environment 
previously degraded by the adverse effects of mineral mining and 
processing practices.

30 U.S.C. 1240a(c). Certified States and Indian tribes could also use 
these funds to improve or construct utilities adversely affected by 
mineral mining and to construct public facilities in communities 
impacted by coal or mineral mining or processing. 30 U.S.C. 1240a(e). 
Certified States and Indian tribes could also use these funds for 
activities or construction of specific public facilities related to the 
coal or minerals industry in areas impacted by coal or minerals 
development. 30 U.S.C. 1240a(f).

    In contrast, uncertified States and Indian tribes could use AML 
grant funds on noncoal projects only to abate extreme dangers to public 
health, safety, general welfare, and property that arose from the 
adverse effects of mineral mining and processing and only at the 
request of the Governor or the governing body of the Indian tribe. 30 
U.S.C. 1239.
    The minimum program funding level provided additional grant funding 
to uncertified States and Indian tribes so that each reclamation 
program would receive enough annual AML funding to support a viable 
program. Before the 2006 amendments, SMCRA set the minimum program 
level at $2 million. 30 U.S.C. 1232(g)(8) (as amended by the Omnibus 
Budget Reconciliation Act of 1990, Pub. L. 101-508, Sec.  6004). 
However, appropriations have generally only funded the minimum program 
level at $1.5 million. See, e.g., Department of the Interior, 
Environment, and Related Agencies Appropriations Act, 2006, Pub. L. 
109-54, 119 Stat. 513 (2005) (``[G]rants to minimum program States will 
be $1,500,000 per State in fiscal year 2006.''). The Federal Fiscal 
Year runs from October 1 through September 30, so that FY 2006 is 
October 1, 2005, through September 30, 2006. SMCRA did not mandate a 
particular share of the Fund be used to support the minimum program, 
and we chose to use moneys from the Federal expenses share of the Fund 
for this purpose.
    Before the 2006 amendments, States and Indian tribes were allowed 
to deposit up to 10 percent of their State or Tribal share and 10 
percent of their historic coal share funds into set-aside accounts for 
either future coal reclamation or acid mine drainage treatment programs 
or both. 30 U.S.C. 1232(g)(6) (as amended by the Omnibus Budget 
Reconciliation Act of 1990, Pub. L. 101-508, Sec.  6004). In addition, 
uncertified States and Indian tribes were allowed to spend up to 30% of 
their funds on water supply projects that protect, repair, replace, 
construct, or enhance water supply facilities adversely affected by 
coal mining practices. 30 U.S.C. 1233(b)(1) (as amended by the Omnibus 
Budget Reconciliation Act of 1990, Pub. L. 101-508, Sec.  6005).

C. How did the 2006 amendments change these programs?

    The Surface Mining Control and Reclamation Act Amendments of 2006 
were signed into law as part of the Tax Relief and Health Care Act of 
2006, on December 20, 2006. Pub. L. 109-432. The 2006 amendments revise 
Title IV of SMCRA to make significant changes to the reclamation fee 
and the AML program. The changes are summarized as follows:
     OSM's reclamation fee collection authority is extended 
through September 30, 2021. The statutory fee rates are reduced by 10 
percent from the current levels for the period from October 1, 2007, 
through September 30, 2012. The fee rates are reduced by an additional 
10 percent from the original levels for the period from October 1,

[[Page 35216]]

2012, through September 30, 2021. 30 U.S.C. 1232(a).
     The Fund allocation formula is changed. Beginning October 
1, 2007, certified States will no longer be eligible to receive State 
share funds. 30 U.S.C. 1231(f)(3)(B). Instead, amounts which would have 
been distributed as State share for fee collections for certified 
States will be distributed as historic coal funds. 30 U.S.C. 
1240a(h)(4). The RAMP share is eliminated. See 30 U.S.C. 1232(g). The 
historic coal allocation is further increased by the amount that 
previously was allocated to RAMP. 30 U.S.C. 1232(g)(5).
     Distributions of annual fee collections are made outside 
of the appropriations process. Once fully phased in, most fee 
collections will go to States and Indian tribes in annual mandatory 
distributions. Mandatory distributions from the Fund for uncertified 
States and Indian tribes include the State or Tribal share of all fees 
collected for coal produced the previous fiscal year, historic coal 
funds allocated from previous fiscal year production and also 
transferred from collections for certified States and Indian tribes for 
the previous fiscal year, and minimum program make up funding. 30 
U.S.C. 1232(g)(1), (g)(5), and (g)(8)(A). These mandatory distributions 
are phased in at 50 percent for FY 2008 and FY 2009, and 75 percent for 
FY 2010 and FY 2011; full funding will be reached in FY 2012. 30 U.S.C. 
1231(f)(5). After the end of the fee collection period, mandatory 
distributions of money from the Fund for FY 2023 and subsequent years 
will continue from balances in the Fund at the same level as FY 2022 to 
the extent funds are available. 30 U.S.C. 1231(f)(2)(B).
     Certified States and Indian tribes will receive mandatory 
distributions of Treasury funds in lieu of the State and Tribal share 
they will no longer be eligible to receive. 30 U.S.C. 1240a(h)(2). This 
mandatory distribution will be phased in at 25 percent for the first 
year, 50 percent for the second year, 75 percent for the third year, 
and fully distributed in the fourth year and thereafter. 30 U.S.C. 
1240a(h)(3)(B). These funds may be used to address coal problems that 
arise after certification and for other purposes.
     All States and Indian tribes with approved reclamation 
plans are paid amounts equal to their unappropriated prior balance of 
State and Tribal share funds from fees collected on coal produced 
before October 1, 2007. 30 U.S.C. 1240a(h)(1)(A)(i). Payments will be 
made in seven equal annual installments beginning in FY 2008. 30 U.S.C. 
1240a(h)(1)(C). Payments are mandatory distributions from Treasury 
funds. These payments must be used by uncertified States and Indian 
tribes for the purposes of section 403 of SMCRA. 30 U.S.C. 
1240a(h)(1)(D)(ii). These payments must be used by certified States and 
Indian tribes for purposes established by the State legislature or 
Tribal council, with priority given for addressing the impacts of 
mineral development. 30 U.S.C. 1240a(h)(1)(D)(i). Amounts in the Fund 
previously designated as State or Tribal share equal to the 
unappropriated balance payments will be transferred to historic coal 
funds as payments are made and used for reclamation grants in FY 2023 
and thereafter. 30 U.S.C. 1240a(h)(4).
     The minimum funding level for each State or Indian tribe 
with an approved reclamation plan and unfunded high priority coal 
reclamation problems is increased to $3 million. 30 U.S.C. 
1232(g)(8)(A). This funding is also a mandatory distribution. However, 
like the rest of the distributions from the Fund, these distributions 
will be phased in at 50 percent for FY 2008 and FY 2009, and 75 percent 
for FY 2010 and FY 2011; full funding will be reached in FY 2012. 30 
U.S.C. 1231(f)(5).
     The States of Tennessee and Missouri are each authorized 
to receive minimum program make up funding for their approved State 
reclamation programs even if they do not meet other requirements, such 
as having an approved coal regulatory program. 30 U.S.C. 1232(g)(8)(B).
     Other than for minimum program make up funding, 
expenditures from the Secretary's share must be appropriated by 
Congress. 30 U.S.C. 1231(d)(a). These uses for Federal expense funding 
include the emergency reclamation program, Federal reclamation 
programs, the Watershed Cooperative Agreement Program, and our AML 
administrative expenses.
     The limit on set aside funding for acid mine drainage 
(AMD) treatment programs is increased from 10 percent to 30 percent of 
State or Tribal share funds and historic coal funds. 30 U.S.C. 
1232(g)(6). In addition, States and Indian tribes are no longer 
required to get our approval for AMD plans. Id. Set aside funding for 
future coal reclamation is no longer authorized. Id. The previous cap 
of 30 percent for water supply restoration projects is eliminated. 30 
U.S.C. 1233(b).
     There are only three AML coal reclamation priorities 
because the previous priorities 4 and 5 have been removed. 30 U.S.C. 
1233(a). Also, ``general welfare'' is eliminated as a component of 
priorities 1 and 2. 30 U.S.C. 1233(a)(1) and (a)(2). OSM must now 
ensure strict compliance with the coal priorities until the State or 
Indian tribe is certified. 30 U.S.C. 1232(g)(2). States and Indian 
tribes may initiate Priority 3 reclamation projects before completing 
all Priority 1 and 2 projects only if the Priority 3 reclamation is 
performed in conjunction with a Priority 1 or 2 project. 30 U.S.C. 
1232(g)(7). Priority 3 lands and waters adjacent to past, present, and 
future Priority 1 and 2 project sites may be reclassified to Priority 1 
or 2. 30 U.S.C. 1233(a)(1)(B)(ii) and 1233(a)(2)(B)(ii).
     The previous prohibition on filing a lien against the 
beneficiary of an AML reclamation project if the person owned the 
surface before May 2, 1977, is eliminated. 30 U.S.C. 1238(a). The 
automatic lien waiver is now extended to all landowners who did not 
consent to, participate in, or exercise control over the mining 
operations that necessitated the reclamation.
     We must approve amendments to the AML inventory system. 30 
U.S.C. 1233(c).
     We may certify that a State or Indian tribe has completed 
coal reclamation without prior request from the State or Indian tribe. 
30 U.S.C. 1240a(a)(2).
     There is a cap of $490 million on total annual Treasury 
funding under this legislation. 30 U.S.C. 1232(i)(3)(A). This cap 
limits payments to States and Indian tribes under 30 U.S.C. 1240a(h) 
and the payments to the CBF, 1992 Benefit Plan, and the 1993 Benefit 
Plan, collectively known as the ``UMWA health care plans,'' under 30 
U.S.C. 1232(h) and 1232(i)(1).
     Subject to certain limitations, to the extent payments 
from premiums and other sources do not meet the financial needs of the 
UMWA health care plans, all estimated Fund interest earnings for each 
fiscal year must be transferred to these plans. 30 U.S.C. 1232(h). The 
unappropriated balance of the RAMP allocation as of December 20, 2006, 
is also available for transfer to the UMWA health care plans. 30 U.S.C. 
1232(h)(4)(B). These additional transfers to the CBF began in FY 2007, 
while transfers to the 1992 and 1993 Benefit Plans began in FY 2008. 30 
U.S.C. Sec.  1232(h)(1). Transfers to the 1992 and 1993 Benefit Plans 
are phased in, with transfers in FY 2008-2010 limited to 25%, 50%, and 
75% respectively, of the amounts that would otherwise be transferred. 
30 U.S.C. 1232(h)(5)(C). If necessary to meet their financial needs, 
the UMWA health care plans are also entitled to payments from

[[Page 35217]]

unappropriated amounts in the Treasury, subject to the overall $490 
million cap on all transfers from the Treasury under the 2006 
amendments. 30 U.S.C. 1232(i)(1)(B) and (i)(3)(A). All interest earned 
by the Fund before December 20, 2006, and not previously transferred to 
the CBF is set aside in a reserve fund that will be used to make 
payments to the UMWA health care plans in the event that their 
financial needs exceed the annual cap. 30 U.S.C. 1232(h)(4)(A).
     The 2006 amendments removed the expiration date for 
remining incentives initially authorized on October 24, 1992, when 
SMCRA was amended to include a new section 510(e) that created an 
exemption from the section 510(c) permit-block sanction for remining 
operations and a new section 515(b)(20)(B) that provided incentives for 
certain eligible remining operations in the form of reduced 
revegetation responsibility periods (2 years in the East and 5 years in 
the West). Energy Policy Act of 1992, Pub. L. 102-486, Sec.  2503. 
Until the 2006 amendments, those remining incentives had a statutorily 
defined expiration date of September 20, 2004, under 510(e) of SMCRA. 
Id.
     The 2006 amendments authorized us to develop regulations 
to promote remining of eligible land under section 404 in a manner that 
leverages the use of amounts from the Fund to achieve more reclamation. 
30 U.S.C. 1244
     Upon our approval, an Indian tribe may develop ``a tribal 
program under section 503 [of SMCRA] regulating in whole or in part 
surface coal mining and reclamation operations on reservation land 
under the jurisdiction of the Indian tribe using the procedures of 
section 504(e).'' 30 U.S.C. 1300(j).

II. Outreach, Guidance, and Comments

    Since the enactment of the 2006 amendments, we have notified 
potentially affected parties of the statutory amendments and solicited 
comments on issues related to the 2006 amendments. In January and 
September 2007, we notified all fee payers in writing of the fee rate 
changes. In January, February, and May 2007, we met with 
representatives of States and Indian tribes with approved reclamation 
programs at meetings hosted by the Interstate Mining Compact Commission 
(IMCC) and the National Association of Abandoned Mine Land Programs 
(NAAMLP) to notify the States and Indian tribes of the 2006 amendments' 
changes to SMCRA and to seek their input on the amendments. The IMCC 
and NAAMLP subsequently submitted joint written comments on specific 
provisions of the amendments. The IMCC and the NAAMLP, among others, 
raised the following major issues in their written comments.
    First, the commenters proposed that we allow individual States and 
Indian tribes to choose between receiving Treasury moneys under section 
411(h) through a traditional grant or by a ``direct payment 
mechanism.'' The commenters recognized that we might prefer to use 
grants to pay the section 411(h) funds rather than some type of 
``direct distribution of cash from the Treasury.'' However, the 
commenters noted that SMCRA does not directly address this issue and 
stated that the ``Secretary has the discretion to design a payment 
mechanism that meets the needs of the States and tribes.'' They urged 
us to develop some type of ``direct payment mechanism'' similar to that 
used to pay mineral royalties to States under the Mineral Leasing Act. 
The commenters stated that the State legislatures and Tribal councils 
will ensure States and Indian tribes use the funds legally and 
appropriately under SMCRA and State and Tribal contracting law and that 
Federal audits will scrutinize project selection and expenditures.
    Second, the commenters expressed concern that States and Indian 
tribes at the minimum program funding level would receive less than $3 
million until FY 2012. The commenters pointed out that uncertified 
States that receive funding at the ``minimum program'' level often have 
serious Priority 1 and 2 abandoned coal mine problems. They also 
discussed the fact that SMCRA historically guaranteed States and Indian 
tribes at least $2 million, but that this minimum funding level was 
rarely, if ever, met. The IMCC and NAAMLP asserted that the $3 million 
floor amount in section 402(g)(8)(A) only mandates that we cannot spend 
more than $3 million from the Federal expense funds. In addition, they 
contend that section 401(f)(5)(B) of SMCRA requires us to phase in only 
those Federal expense funds that we might provide in excess of the $3 
million floor level of funding provided for in section 402(g)(8)(A).
    Third, the commenters specifically objected to any limitations that 
would prohibit uncertified States and Indian tribes from using prior 
balance replacement funds from Treasury under section 411(h)(1) to 
abate high priority noncoal hazards or for placement in an AMD set 
aside account. The commenters expressed concern that requiring 
uncertified States and Indian tribes to use prior balance replacement 
funds for coal reclamation only would prevent those States and Indian 
tribes from using the moneys to reclaim equally or even more dangerous 
hazards associated with noncoal mining and hinder the treatment of AMD. 
In addition, they pointed out that the prior balance replacement funds 
are received in place of State or Tribal share funds from reclamation 
fees previously collected in each State and on Indian lands that 
Congress never appropriated for distribution to the respective States 
and Indian tribes. Because uncertified States and Indian tribes are 
permitted to use section 402(g)(1) funds for noncoal reclamation and 
for AMD set-aside funds, the commenters maintain that they should be 
allowed to use the prior balance replacement funds for the same 
purposes.
    The IMCC and NAAMLP also raised many other issues in their 
comments. They suggested that the first certified in lieu payments 
should be for FY 2009. They suggested that the terms ``adjacent'' and 
``in conjunction'' should be applied to AML Priority decisions using 
simple definitions without additional monetary or timing criteria. They 
urged OSM to make fund distributions as early in the FY as possible.
    We considered all the comments we received in developing this 
proposed rule.
    In order to facilitate distribution of funds for FY 2008, as 
required in the 2006 amendments, the Director of OSM issued written 
guidance in December, 2007. To the extent feasible, we have restated 
and expanded upon the content of that guidance in this proposed rule. 
We intend to make that December 2007 written guidance part of the 
docket for this rulemaking to be available for public inspection.
    The December 2007 written guidance was based in part on a December 
2007 memorandum opinion (M opinion), from the Department of the 
Interior, Office of the Solicitor, which analyzed three issues related 
to AML funding. See Funding to States and Indian Tribes Under the 
Surface Mining Control and Reclamation Act of 1977, as Amended by the 
Tax Relief and Health Care Act of 2006, M-37014 (December 5, 2007). In 
this M-opinion, the Office of the Solicitor advised us that:
     We are required to use grants to pay prior balance 
replacement funds and certified in lieu funds to eligible States and 
Indian tribes under sections 411(h)(1) and (h)(2) of SMCRA;
     Uncertified States and Indian tribes may not use prior 
balance replacement funds that they receive under section 411(h)(1) of 
SMCRA for noncoal

[[Page 35218]]

reclamation and for the AMD set aside authorized by section 402(g)(6); 
and
     The minimum program make up funds that eligible 
uncertified States and Indian tribes are entitled to receive under 
section 402(g)(8)(A) of SMCRA are subject to the four year phase-in 
provision of section 401(f)(5)(B).

III. Description of the Proposed Rule

    This proposed rulemaking seeks to revise our regulations to be 
consistent with all of the revisions to SMCRA contained in the 2006 
amendments, except for those provisions relating to the remining 
incentives provisions leveraging amounts from the Fund. The remining 
incentives provisions that leverage amounts from the Fund are the 
subject of a separate rulemaking published on May 1, 2008, at 73 FR 
24120.
    Generally, this rulemaking sets forth proposed standards and 
procedures for the coal reclamation fee, the Fund, and the AML program. 
This proposed rule includes extensive proposals for long term 
operations of the amended Title IV program, including provisions of the 
2006 amendments that will become effective at later dates. We are also 
taking advantage of this rulemaking opportunity to propose other 
changes that we believe are needed to update and clarify related Parts 
of our existing regulations. Throughout this proposed rule, the terms 
``money'' and ``moneys'' are interchangeable with the terms ``fund'' or 
``funds,'' but not with the term ``Fund,'' as defined in proposed Sec.  
700.5.
    The proposed changes generally fall into three categories:
     Align our existing regulations to be consistent with the 
2006 amendments to SMCRA as interpreted by the M-opinion;
     Use plain English to make the regulations easier to 
understand where no substantive change is intended; and
     Provide further guidance and clarification on 
implementation of the 2006 amendments where appropriate or needed.
    A detailed discussion of all of the proposed revisions follows.

Part 700--General

Definitions (Sec.  700.5)
    We are proposing to revise the definitions in Sec.  700.5 in 
several ways. First, we are proposing to add two new definitions 
(``AML'' and ``AML inventory''). The addition of these two definitions 
will improve the clarity of the proposed regulations contained in this 
rulemaking.
    Second, we are moving six existing definitions (``eligible lands 
and water,'' ``emergency,'' ``extreme danger,'' ``left or abandoned in 
either an unreclaimed or inadequately reclaimed condition,'' 
``project,'' and ``reclamation activity'') to Sec.  700.5 because these 
terms apply to all of the regulations in Chapter VII of Title 30 of the 
Code of Federal Regulations. These terms were previously codified in 
Sec.  870.5, which only applies to regulations related to AML 
reclamation fee collection. We are not proposing any substantive 
changes to the text of the definitions of these six terms. We are, 
however, correcting a mistake in the definition of eligible lands and 
water. The existing definition states, in part, that ``[f]ollowing 
certification of the completion of all known coal problems, eligible 
lands and water for noncoal reclamation purposes are those sites that 
meet the eligibility requirements specified'' in Sec.  874.14 of this 
chapter. The reference to Sec.  874.14 was incorrect. The correct 
reference is Sec.  875.14--Eligible lands and water subsequent to 
certification. In addition, we propose to reword two definitions 
(``eligible lands and water,'' and ``left or abandoned in either an 
unreclaimed or inadequately reclaimed condition'') using plain English.
    Third, to eliminate some redundancy between two definitions, we 
combined two definitions from Sec.  870.5 (``Indian reclamation 
program'' and ``State reclamation program'') into one definition in 
Sec.  700.5 (``reclamation program''). The substance of the definition 
did not change.
    Fourth, we moved the definition of ``expended'' from Sec.  870.5 to 
Sec.  700.5. In order to make the definition consistent with the entire 
chapter, we removed the existing limitation that it only applies to 
costs for reclamation.
    Last, we are proposing to expand the definition of ``Fund'' in 
Sec.  700.5. Previously, this term was defined slightly differently in 
both Sec. Sec.  700.5 and 870.5. Under the proposed rule, the 
definition of this term in Sec.  700.5 will be expanded to include 
additional information that was contained in Sec.  870.5 (``Abandoned 
Mine Reclamation Fund or Fund''). We believe this will eliminate any 
confusion that may have resulted from having different terminology and 
definitions to describe the same source of money in two Parts of the 
regulations.

Part 724--Requirements for Permits and Permit Processing

Payment of Penalty (Sec.  724.18)
    We propose to revise Sec.  724.18(d) to update the references in 
that section to reflect our proposal to split existing Sec.  870.15 
into separate sections within part 870 and to update information on how 
to find the interest rate for late payments.

Part 773--Requirements for Permits and Permit Processing

Unanticipated Events or Conditions at Remining Sites (Sec.  
773.13(a)(2))
    On October 24, 1992, SMCRA was amended to include a new section 
510(e) that created an exemption from the section 510(c) permit-block 
sanction for remining operations. At that time section 510(e) had a 
statutorily defined expiration date of September 30, 2004. Because the 
2006 amendments removed the expiration date, we are revising Sec.  
773.13(a)(2) to reflect continued applicability of the provision.

Part 785--Requirements for Permits for Special Categories of Mining

Lands Eligible for Remining (Sec.  785.25(c))
    On October 24, 1992, SMCRA was amended to include a new section 
515(b)(20)(B) that provided incentives for certain eligible remining 
operations in the form of reduced revegetation responsibility periods 
(2 years in the East and 5 years in the West). Those remining 
incentives had a statutorily defined expiration date of September 30, 
2004, under section 510(e) of SMCRA. Because the 2006 amendments 
removed the expiration date, we propose to remove paragraph (c) to 
reflect the continued applicability of this section.

Part 816--Permanent Program Performance Standards--Surface Mining 
Activities

    Revegetation: Standards for Success (Sec.  816.116)
    On October 24, 1992, SMCRA was amended to include a new section 
515(b)(20)(B) that provided incentives for certain eligible remining 
operations in the form of reduced revegetation responsibility periods 
(2 years in the East and 5 years in the West). Those remining 
incentives had a statutorily defined expiration date of September 30, 
2004, under section 510(e) of SMCRA. Because the 2006 amendments 
removed the expiration date, we propose to revise Sec.  
816.116(c)(2)(ii) and (c)(3)(ii) to reflect continued applicability of 
the provisions. We also reworded this section using plain English.

[[Page 35219]]

Part 817--Permanent Program Performance Standards--Underground Mining 
Activities

Revegetation: Standards for Success (Sec.  817.116)
    On October 24, 1992, SMCRA was amended to include a new section 
515(b)(20)(B) that provided incentives for certain eligible remining 
operations in the form of reduced revegetation responsibility periods 
(2 years in the East and 5 years in the West). Those remining 
incentives had a statutorily defined expiration date of September 30, 
2004, under section 510(e) of SMCRA. Because the 2006 amendments 
removed the expiration date, we propose to revise Sec.  
817.116(c)(2)(ii) and (c)(3)(ii) to reflect continued applicability of 
the provisions. We also reworded this section using plain English.

Part 845--Civil Penalties

Use of Civil Penalties for Reclamation (Sec.  845.21)
    We propose to revise Sec.  845.21(b)(1) to reflect our proposal to 
move the definition of ``emergency'' from Sec.  870.5 to Sec.  700.5 of 
this chapter.

Part 846--Individual Civil Penalties

Payment of Penalty (Sec.  846.18)
    We propose to revise Sec.  846.18(d) to update the references in 
that section to reflect our proposal to split existing Sec.  870.15 
into separate sections within Part 870 and to update information on how 
to find the interest rate for late payments.

Part 870--Abandoned Mine Reclamation Fund--Fee Collection and Coal 
Production Reporting

    Part 870 describes the requirements and process for you, the coal 
mine operator, to report coal production and to pay the AML reclamation 
fee.
Scope (Sec.  870.1)
    We propose to add coal production reporting to this paragraph, 
because this is a major topic of this Part, and also to change the term 
``Abandoned Mine Reclamation Fund'' to ``Fund'' to be consistent with 
our definition in proposed Sec.  700.5.
Definitions (Sec.  870.5)
    We propose to correct a defect in the Part 870 definitions section. 
The current Sec.  870.1 specifies that the scope of Part 870 is limited 
to the procedures for the collection of reclamation fees, but existing 
Sec.  870.5 provides that the definitions apply to Parts 870 through 
888. In order to correct this issue, we propose to revise Sec.  870.5 
to state that the definitions apply only to Part 870 and to move 
definitions unrelated to Part 870 to the regulations where they are 
used. As such, we moved 17 existing definitions out of this section. In 
addition, one definition (``OSM'') was essentially a duplicate of a 
preexisting definition in Sec.  700.5; thus, we deleted that term from 
Sec.  870.5. Any substantive changes made to the definitions are 
described in the preamble related to the section where the definitions 
are moved.
    As described in the preamble discussion regarding proposed 
revisions to Sec.  700.5, six definitions from Sec.  870.5 that apply 
to multiple Parts of the chapter were moved to Sec.  700.5 (``eligible 
lands and water,'' ``emergency,'' ``extreme danger,'' ``left or 
abandoned in either an unreclaimed or inadequately reclaimed 
condition,'' ``project,'' and ``reclamation activity''). Two 
definitions from existing Sec.  870.5 (``Indian reclamation program'' 
and ``State reclamation program'') were combined into one definition 
(``reclamation program'') and were moved to proposed Sec.  700.5. In 
addition, because ``Fund'' or ``Abandoned Mine Reclamation Fund'' was 
defined in both existing Sec. Sec.  700.5 and 870.5, we deleted the 
definition in existing Sec.  870.5 and merged the two definitions into 
the one proposed at Sec.  700.5.
    Furthermore, we propose to move four definitions (``allocate,'' 
``Indian Abandoned Mine Reclamation Fund or Indian Fund,'' 
``reclamation plan,'' and ``State Abandoned Mine Reclamation Fund or 
State Fund'') to Part 872. One of these terms (``reclamation plan'') is 
defined again in Sec. Sec.  874.5, 875.5, 879.5, 880.5, 884.5, 885.5, 
886.5, and 887.5, but it is defined first and discussed in greater 
detail in the preamble discussion of Sec.  872.5. We also propose to 
move one definition (``qualified hydrologic unit'') to proposed Sec.  
876.12(c), and one definition (``permanent facility'') to proposed 
Sec.  879.11(a)(2). We propose to delete two definitions: one (``OSM'') 
which is already defined in existing Sec.  700.5; and one (``agency'') 
which is no longer used because of plain English rewording.
Information Collection (Sec.  870.10)
    We propose to reword this paragraph using plain English and to use 
the current format approved by the Office of Management and Budget 
(OMB). It describes OMB's approval of information collections in Part 
870, our use of that information, and the estimated reporting burden 
associated with those collections.
Fee Rates (Sec.  870.13)
    The 2006 amendments both extended the AML reclamation fee for 14 
years and provided for a two-step reduction in the amount of the fee 
rate. 30 U.S.C. 1232(a). We propose revising Sec.  870.13 to conform 
these regulations to the changes made by the 2006 amendments.
    First, we propose revising paragraph (a) of Sec.  870.13, which 
sets forth the reclamation fee rates per ton for coal produced by 
surface, underground, and lignite mining that were in effect from 
August 3, 1977, until September 30, 2007. We also propose to indicate 
that the rates expired on September 30, 2007, rather than September 30, 
2004, as formerly provided in the regulations. We propose to retain 
these expired rates for historical purposes and for use in future 
audits of production from the years in which those rates applied.
    We propose to delete the existing paragraph (b), which set out the 
procedure for us to set fees and the first fee rate in the event that 
the AML reclamation fee was not extended. As mentioned in the section 
of this preamble entitled ``Background on the Reclamation Fee and the 
Abandoned Mine Land Program'', Congress extended the fee before it 
expired. Thus, paragraph (b) never came into effect, and the fee 
extension in the 2006 amendments has made it obsolete.
    In its place, we propose to add a new paragraph (b), with a table 
that sets out the fee rates established by the 2006 amendments for coal 
produced in the period from October 1, 2007, through September 30, 
2012. The new fee rates per ton for surface and underground coal and 
lignite are each reduced by 10% from the previous rates. Similarly, we 
propose a new paragraph (c) with a table showing the fee rates reduced 
by an additional 10% of the original rates for coal produced in the 
period from October 1, 2012, through September 30, 2021.
    SMCRA and the 2006 amendments specifically prescribe fee rates for 
surface, underground, and lignite coal mining. As in the previous 
regulation, we propose to show rates for in situ mining, which means 
gasification of the coal at the mine. We continue to consider in situ 
mining to be covered by SMCRA because it is included in the definition 
of ``surface coal mining operations'' in section 701(28) of SMCRA and 
is therefore subject to the AML reclamation fee. As we have done in the 
past, when developing these proposed regulations, we classified in situ 
mining as underground mining (see Sec.  785.22 and Part 828). In these 
proposed regulations, we continue to

[[Page 35220]]

include a separate paragraph for the fee rates for in situ mining in 
order to clarify that the fees are set at the same rate as the fees for 
underground mining.
Determination of Percentage-Based Fees (Sec.  870.14)
    We propose rewording this paragraph using plain English. We also 
propose updating the reference in paragraph (b) to conform this 
provision to our proposed revisions of existing Sec.  870.15.
Reclamation Fee Payment (Sec.  870.15)
    We propose to break out the information from the existing Sec.  
870.15 into four separate sections to better organize this varied 
material and make it easier to find and understand. Paragraph (a) was 
reworded using plain English. We divided existing paragraph (b) into 3 
new paragraphs (b), (c), and (d) within proposed Sec.  870.15. This 
division separates these related, but distinct, topics for easier 
understanding. We also reworded these provisions using plain English. 
The remaining paragraphs (existing paragraphs 870.15(c) through (g)) 
were moved: existing paragraphs (c), (f), and (g) related to late 
payments were moved to proposed Sec.  870.21; existing paragraph (d) 
related to acceptable payment methods was moved to proposed Sec.  
870.16; existing paragraph (e) related to the consequences of 
noncompliance was moved to proposed Sec.  870.23.
Acceptable Payment Methods (Sec.  870.16)
    We propose to move the contents of existing Sec.  870.16 on 
production records to new Sec.  870.22 to better organize related 
topics. In turn, we propose to move the contents of existing Sec.  
870.15(d) to proposed Sec.  870.16, and reword those provisions using 
plain English. The proposed reorganization will keep information 
related to payment methods immediately after the fee payment 
information contained in Sec.  870.15.
Filing the OSM-1 Form (Sec.  870.17)
    This section proposes to expand on the existing Sec.  870.17, which 
covers the electronic filing of the coal reclamation fee report, known 
as the OSM-1 Form. We kept existing Sec.  870.17 and made it proposed 
Sec.  870.17(a). However, we added a paragraph (b) on filing a paper 
OSM-1 Form. Now, under the proposed rule, both options for filing the 
OSM-1 Form are listed together in the same section.
    In addition, section 402(c) of SMCRA requires that ``all operators 
of coal mine operations shall submit a statement of the amount of coal 
produced during the calendar quarter, the method of coal removal and 
the type of coal, the accuracy of which shall be sworn to by the 
operator and notarized.'' 30 U.S.C. 1232(c). Although SMCRA states that 
your OSM-1 Form is to be notarized, we believe that 28 U.S.C. 1746 
allows us to accept the OSM-1 Form along with a statement made under 
penalty of perjury that the information contained in the form is true 
and correct. Section 1746 provides that any matter required to be sworn 
may with like force be established by an unsworn written declaration 
consistent with the statute. Currently, if you file your report 
electronically on our Web site, we allow you to choose whether to keep 
a paper notarized copy or to make an unsworn statement using acceptable 
certification language that the system provides. See also 66 FR 28634. 
We are adding a similar unsworn statement option in paragraph (b) to 
reduce your burden if you choose to file your OSM-1 Form on paper.
General Rules for Calculating Excess Moisture (Sec.  870.18)
    The only change we propose to make in this section is to update a 
reference in paragraph (b) to reflect our proposed division of existing 
Sec.  870.15 into four sections. We are not considering any substantive 
changes to this section. We only intend to make those changes needed to 
correct any cross-references to other sections that may be altered by 
this rulemaking.
Late Payments (Sec.  870.21)
    We propose to move this information from the existing paragraphs 
Sec.  870.15(c), (f), and (g) to new Sec.  870.21 and reword these 
provisions using plain English. This reorganization will make proposed 
Sec.  870.15 more focused on the payment of the reclamation fee while 
grouping the specific information on the interest and penalties that we 
may charge on delinquent reclamation fees into this new section.
Maintaining Required Production Records (Sec.  870.22)
    We propose to move the information in the existing Sec.  870.16 to 
this new section for better organization because it allows us to group 
the payment and reporting sections together. We also propose to reword 
this section using plain English.
Consequences of Noncompliance (Sec.  870.23)
    We propose to move existing Sec.  870.15(e)(1)-(5) to this new 
section. We believe this section should be separated from the late 
payments section because it also applies to the failure to comply with 
the record maintenance provisions. In addition, we reworded this 
section using plain English.

Part 872--Moneys Available to Eligible States and Indian Tribes

    Our proposed revision of Part 872 describes the moneys that make up 
the Fund and other sources of money, including otherwise unappropriated 
funds in the U.S. Treasury as specified by the 2006 amendments, that 
are available to you, the eligible States and Indian Tribes with 
approved reclamation programs. This part also describes how we will 
convey these funds to you and what you may use them for.
    We are proposing regulations to address the changes to SMCRA that 
the 2006 amendments made. In addition, we are proposing to divide, 
remove, and renumber parts of existing Sec. Sec.  872.11(a) through 
872.11(c) and Sec.  872.12, change headings, add new sections and 
headings as appropriate, and more clearly describe the different types 
of funds available under this Part. We propose these additional changes 
to make the regulations easier to read and understand. Each proposed 
change is described below in more detail.
What does this Part do? (Sec.  872.1)
    In this section, we explain that the purpose of Part 872 is to set 
forth the responsibilities for administering reclamation programs and 
the procedures for managing funds used to finance these programs. We 
propose to change the section heading to ``What does this Part do?'', 
to reword the section using plain English, and to remove a reference to 
the Fund, instead referring more generically to ``funds.'' We believe 
removing the reference to the Fund recognizes that the 2006 amendments 
provide funds to you both from the Fund and from otherwise 
unappropriated funds of the U.S. Treasury. Throughout this Part, the 
terms ``money'' and ``moneys'' are interchangeable with the terms 
``fund'' or ``funds,'' but not with the term ``Fund,'' as defined in 
proposed Sec.  700.5.
Definitions (Sec.  872.5)
    We propose adding Sec.  872.5 to contain definitions pertinent to 
Part 872. This proposed section contains four definitions 
(``allocate,'' ``Indian Abandoned Mine Reclamation Fund or Indian 
Fund,'' ``reclamation plan,'' and ``State Abandoned Mine Reclamation 
Fund or State Fund'') moved from existing Sec.  870.5 and two new 
definitions (``award'' and ``distribute''). As described below, we also 
propose to

[[Page 35221]]

revise the existing definitions that were moved from Sec.  870.5 and to 
use plain English for these definitions.
    First, we propose to revise the definitions of ``Indian Abandoned 
Mine Reclamation Fund or Indian Fund'' and ``State Abandoned Mine 
Reclamation Fund or State Fund'' to include references to Parts 885 and 
886. Those Parts address grants for certified and uncertified States 
and Indian tribes.
    Second, we propose to revise the definition of ``reclamation plan'' 
to refer to States and Indian tribes and to have the same meaning as 
``State reclamation plan.'' As proposed, a ``reclamation plan or State 
reclamation plan'' means ``a plan that a State or Indian tribe 
submitted and that we approved under section 405 of SMCRA and Part 884 
of this subchapter.'' Our definition makes ``reclamation plan'' and 
``State reclamation plan'' interchangeable wherever those terms appear 
in this subchapter, recognizing that certain Parts still use ``State 
reclamation plan.'' We included a reference to section 405 of SMCRA to 
be consistent with its use of the term ``State reclamation plan'' as 
well. 30 U.S.C. 1235. Our proposed definition also is consistent with 
section 405(k) of SMCRA, which considers Indian tribes that have 
eligible lands under section 404 the same as States for the purposes of 
Title IV, except for the purposes of section 405(c). 30 U.S.C. 1235(k).
    Next, we propose two changes to the definition of ``allocate.'' The 
revised definition now states that ``allocate'' means ``to identify 
moneys in our records at the time they are received by the Fund.'' We 
also added a statement to clarify that the allocation process 
identifies the type of funds or the specific State or Indian tribal 
share.
    The definition of ``allocate'' is distinguishable from the new 
definitions of ``distribute'' and ``award'' that we propose to add. We 
define ``distribute'' as meaning ``to annually assign funds to a 
specific State or Indian tribe. After distribution, funds are available 
for award in a grant to that specific State or Indian tribe.'' We 
define ``award'' as meaning ``to approve our grant agreement 
authorizing you to draw down and expend program funds.''
    We use the terms ``allocate,'' ``distribute,'' and ``award'' 
throughout Part 872 to describe the process that we follow to make 
funds available to States and Indian tribes. Our accounting process 
first allocates funds to a particular share (State and Tribal shares or 
historic coal funds, for example) as soon as we receive the collected 
fees. Next, we distribute funds annually after the end of each Federal 
FY to specific States and Indian tribes according to the statutory 
provisions and the regulations governing those funds (for example, we 
will follow proposed Sec.  872.15 to distribute State share funds). 
After the funds are distributed, we award funds to States and Indian 
tribes in grants following the procedures of proposed Part 885 for 
certified States and Indian tribes and Part 886 for uncertified States 
and Indian tribes if and when they apply for such grants.
Information Collection (Sec.  872.10)
    We propose to update this section and reword it using plain 
English. It describes the OMB's approval of information collections in 
Part 872, our use of that information, and the estimated reporting 
burden associated with those collections.
Where do moneys in the Fund come from? (Sec.  872.11)
    This proposed section describes the funds we collect, recover, and 
otherwise receive that are the sources of revenue to the Fund. Here we 
propose to change the section heading to ``Where do moneys in the Fund 
come from?'' and to renumber existing Sec. Sec.  872.11(a) through 
(a)(6) as Sec. Sec.  872.11 through 872.11(f). We also reworded this 
section in plain English.
    In addition, we propose to remove language from existing Sec.  
872.11(a)(6) (now renumbered as proposed Sec.  872.11(f)) that makes 
interest earned after September 30, 1992, available for possible future 
transfer to the UMWA CBF under section 402(h) of SMCRA. The 2006 
amendments to SMCRA added new provisions related to our payments to the 
UMWA health care plans. However, this rulemaking does not address those 
changes.
    In addition, we propose to revise and reorganize the information in 
existing Sec. Sec.  872.11(b), including paragraphs (b)(1) through 
(b)(8), into various other sections. Existing Sec.  872.11(b)(1) is 
included in proposed Sec. Sec.  872.14 and 872.15 on State share funds 
and Sec.  886.20 on unused funds. Similarly, existing Sec.  
872.11(b)(2) is included in proposed Sec. Sec.  872.17 and 872.18 on 
Tribal share funds and Sec.  886.20 on unused funds. Existing Sec.  
872.11(b)(3) related to the RAMP program is moved to proposed Sec.  
872.20. Existing Sec.  872.11(b)(4) is included in proposed Sec. Sec.  
872.21 and 872.22 on historic coal funds. Existing Sec.  872.11(b)(5), 
as well as Sec. Sec.  872.11(b)(7) and (b)(8), are moved to Sec. Sec.  
872.24 and 872.25 on Federal expense funds. Existing Sec.  872.11(b)(6) 
is included in proposed Sec. Sec.  872.26 and 872.27 on minimum program 
makeup funds. We propose to move existing Sec.  872.11(c) to Sec.  
872.12(c). We propose to revise all these provisions to be consistent 
with the 2006 amendments and to reword them using plain English.
Where do moneys distributed from the Fund and other sources go? (Sec.  
872.12)
    We propose to change the heading of existing Sec.  872.12 to 
``Where do moneys distributed from the Fund and other sources go?'', 
and to reword the section using plain English. We also propose to add 
paragraph Sec.  872.12(c) for information moved from existing Sec.  
872.11(c) and to make a conforming change. The conforming change 
involves the requirement in existing Sec.  872.11(c) that States and 
Indian tribes use money deposited in their State or Indian Abandoned 
Mine Reclamation Funds to carry out their reclamation plans approved 
under Part 884 and projects approved under Part 888. On February 22, 
1995, we removed Part 888, which related to special Indian land 
procedures, and replaced it with Sec.  886.25, but did not change the 
cross-reference in existing Sec.  872.11(c). 60 FR 9974. In Sec.  
872.12(c), we now propose to replace that cross-reference with a 
reference to proposed Sec.  886.27, which is the proposed renumbering 
of existing Sec.  886.25.
What money does OSM distribute each year? (Sec.  872.13)
    We propose to add new Sec.  872.13 to describe how we distribute 
moneys each year to States and Indian tribes under SMCRA, as revised by 
the 2006 amendments. We address each type of funding elsewhere in this 
proposed rule in greater detail.
    Paragraph (a) lists the funds that we must distribute because they 
are not subject to prior Congressional appropriation. These 
distributions include State share (Sec.  872.14), Tribal share (Sec.  
872.17), historic coal (Sec.  872.21), minimum program make up (Sec.  
872.26), prior balance replacement (Sec.  872.29), and certified in 
lieu funds (Sec.  872.32).
    Paragraph (b) explains we use fee collections for coal produced in 
the previous Federal FY on a net cash basis to calculate the annual 
distribution. In other words, collections from the most recent FY 
include any adjustments to fees collected in previous years. In order 
to meet our customer service obligation, we must quickly determine how 
much money we collected each FY so that we can complete the mandatory 
distribution of AML funds to the States and Indian tribes as early in 
the FY as possible. When we make adjustments to the fees collected in 
an earlier FY, we must add or subtract the changes from

[[Page 35222]]

collections for the year in which we actually receive them because we 
cannot go back and revise the prior year fee collection amounts and 
distributions that we have already made to the States and Indian 
tribes.
    Paragraph (c) briefly states that we distribute Congressionally-
appropriated Federal expense funds when the appropriation becomes 
available.
    Last, paragraph (d) states that you may apply for funds any time 
after we distribute them. Certified States and Indian tribes will apply 
for grants using the procedures of Part 885 and uncertified States and 
Indian tribes will use the procedures of Part 886.
What are State share funds? (Sec.  872.14)
    We are proposing to remove and replace the existing Sec. Sec.  
872.11(b) and 872.11(b)(1) with Sec. Sec.  872.14 and 872.15. The new 
sections include language consistent with the 2006 amendments and are 
worded in plain English. Proposed Sec.  872.14 replaces the first and 
second sentences of existing Sec.  872.11(b)(1), which included 
provisions for what commonly have been called ``State share'' funds and 
that are provided for under section 402(g)(1)(A) of SMCRA. 
Specifically, this proposed provision explains that State share funds 
are 50 percent of the reclamation fees collected on coal mined in your 
State (excluding Indian lands) and allocated to you under section 
402(g)(1)(A) of SMCRA for coal produced in the previous fiscal year.
How does OSM distribute and award State share funds? (Sec.  872.15)
    Proposed Sec.  872.15 explains how we distribute and award State 
share funds to you if you are eligible to receive them. Section 
872.15(a)(1) replaces the third sentence of existing Sec.  872(b)(1) 
and states that to be eligible to receive State share funds you must 
have and maintain an approved reclamation plan. Section 872.15(a)(2) 
adds that to be eligible you cannot be certified under section 411(a) 
of SMCRA because under section 401(f)(3)(B) of SMCRA, as revised by the 
2006 amendments, certified States are ineligible to receive moneys from 
their State share of the Fund as of October 1, 2007. 30 U.S.C. 
1231(f)(3)(B).
    We did not distribute State share funds to certified States in the 
2008 distributions because section 401(f)(3)(B) of SMCRA, as revised by 
the 2006 amendments, prohibits us from distributing any moneys from the 
Fund to certified States beginning on October 1, 2007. So, consistent 
with SMCRA, proposed Sec.  872.13(a)(1) prohibits certified States from 
receiving any State share funds from the Fund after September 30, 2007.
    In proposed Sec.  872.15(b), we describe how we distribute and 
award State share funds if you meet the eligibility criteria of 
paragraph (a). In paragraph (b)(1), we include a table explaining the 
distributions, which will be phased-in under 401(d)(3) and (f) of 
SMCRA, as amended. 30 U.S.C. 1231(d)(3) and (f). Although section 
402(g)(1) of SMCRA generally requires us, acting on behalf of the 
Secretary, to distribute annually to an uncertified State 50 percent of 
the reclamation fees we collect in that State for the previous FY 
without prior Congressional appropriation, section 401(f)(5) of SMCRA, 
as added by the 2006 amendments, requires us to phase-in the mandatory 
distribution of these funds. 30 U.S.C. 1231(f)(5)(B). As a result, for 
FY 2008 and FY 2009, which begin on October 1, 2007, and October 1, 
2008, respectively, we will distribute to each uncertified State only 
50 percent of the State share allocated to it. Because the State share 
is 50 percent of the reclamation fees collected on production in that 
State, for FY 2008 and FY 2009, uncertified States will receive only 25 
percent of the reclamation fees collected on coal produced in their 
State (a 50 percent phase-in of the 50 percent in reclamation fees for 
the State share). Likewise, State shares that we distribute in FY 2010 
and FY 2011, which begin October 1, 2009, and October 1, 2010, 
respectively, will be 75 percent of the 50 percent share, which is 37.5 
percent of the reclamation fees collected on coal produced in that 
State. We will distribute to uncertified States their full 50 percent 
State share from the Fund each year beginning with FY 2012, which 
starts on October 1, 2011, and lasting through FY 2022, which ends on 
September 30, 2022. In FY 2023, we expect to distribute to uncertified 
States all moneys remaining in their State share of the Fund.
    Proposed Sec.  872.15(b)(2) explains that we will continue to award 
funds under this paragraph in grants in accordance with Part 886. 
Awarding State share funds in grants is consistent with section 
402(g)(1)(C) of SMCRA. 30 U.S.C. 1232(g)(1)(C). In addition, we note 
that many States were awarded State share funds in prior year grants, 
before the 2006 amendments. Those funds would continue to be subject to 
the provisions of Part 886.
What may States use State share funds for? (Sec.  872.16)
    Proposed Sec.  872.16 describes what you, the uncertified State, 
may use your State share grant funds for. You may only use them for the 
following purposes: (1) To reclaim coal lands and waters under Sec.  
874.12; (2) to restore water supplies under Sec.  874.14; (3) to 
reclaim noncoal lands and waters under Sec.  875.12 as requested by the 
Governor under section 409(c) of SMCRA; (4) to deposit into an acid 
mine drainage abatement and treatment fund under Part 876; and (5) to 
acquire land under Sec.  879.11.
    We note that the Fund consists mostly of reclamation fees we 
collect on each ton of coal produced. Although we have been collecting 
those fees under Title IV of SMCRA for almost 30 years, many abandoned 
coal problems remain to be addressed nationwide. The 2006 amendments 
emphasize the need to abate the country's remaining abandoned coal mine 
problems. See, e.g., 30 U.S.C. 1232(g)(2) and 1240a(h)(1)(D)(ii). We 
believe that under the 2006 amendments, the Fund is to be used 
primarily to abate coal problems. We intend proposed Sec.  872.16 to 
emphasize abandoned coal mine reclamation while continuing to allow 
uncertified States to abate Priority 1 noncoal hazards using moneys 
from the Fund in accordance with sections 402(g)(1)(A)(ii) and (C), 
402(g)(6), and 409(b) and (c) of SMCRA.
What are Tribal share funds? (Sec.  872.17)
    We are proposing to revise the first three sentences of existing 
Sec.  872.11(b)(2) and divide it into Sec. Sec.  872.17 and 872.18. 
Existing Sec.  872.11(b)(2) includes provisions for what commonly have 
been called ``Tribal share'' funds that are provided by section 
402(g)(1)(B) of SMCRA. The new sections include language to address the 
2006 amendments and are worded in plain English.
    In proposed Sec.  872.17 we explain that ``Tribal share funds'' are 
moneys we distribute to you each year from your Tribal share of the 
Fund. Your Tribal share of the Fund is 50 percent of the reclamation 
fees we collect and allocate under 402(g)(1)(A) of SMCRA to you, the 
Indian tribe(s), in the Fund for coal produced in the previous fiscal 
year from the Indian lands in which you have an interest.
How does OSM distribute and award Tribal share funds? (Sec.  872.18)
    This section largely is a duplicate of proposed Sec.  872.15 except 
that it applies to Indian tribes and the Tribal share funds. So, the 
explanations in the preamble for Sec.  872.15 are largely the same for 
distributing and awarding Tribal share funds under this section 
(including the phase-in provisions), and we will not repeat them. 
However, we

[[Page 35223]]

will discuss a few distinctions involving the distribution of Tribal 
share funds to Indian tribes.
    As of October 1, 2007, under amended section 401(f)(3)(B) of SMCRA, 
States that are certified under section 411(a) are ineligible to 
receive State share funds. 30 U.S.C. 1231(f)(3)(B). This exclusion does 
not specifically say whether it applies to Indian tribes. However, to 
be consistent, we propose in Sec.  872.18 to exclude all certified 
Indian tribes from receiving Tribal share funds after October 1, 2007.
    At this time, only the Crow, Hopi, and Navajo Indian tribes have 
approved reclamation programs and have Tribal share funds. All three of 
those Indian tribes are certified under section 411(a) of SMCRA. 
Section 405(k) of SMCRA generally requires us to consider Indian tribes 
``as a `State' for the purposes of this title * * *.'' 30 U.S.C. 
1235(k). So, because section 405(k) considers the Crow, Hopi, and 
Navajo Indian tribes as States for the purposes of Title IV and because 
they are certified under section 411(a), we must apply section 
401(f)(3)(B) to those three Indian tribes. The Hopi and Navajo Indian 
tribes were certified before October 1, 2007, and they cannot receive 
Tribal share funds as of that date. 30 U.S.C. 1231(f)(3)(B), 1235(k). 
Therefore, we did not include Tribal share funds in their 2008 
distributions. The Crow Indian tribe was uncertified as of December 17, 
2007, which was when we made the 2008 AML distribution, so it received 
Tribal share funds. Since then, however, the Crow Indian tribe 
certified under section 411(a)(1) of SMCRA (73 FR 17247, April 1, 
2008), so it cannot receive any additional Tribal share funds. 
Presently, there are no uncertified Indian tribes. However, at some 
future date, it is possible an uncertified Indian tribe could qualify 
for Tribal share funds.
What may Indian tribes use Tribal share funds for? (Sec.  872.19)
    Proposed Sec.  872.19 describes what you, the uncertified Indian 
tribe, may use your Tribal share grant funds for. You may only use 
Tribal share funds for the following purposes: (1) To reclaim coal 
lands and waters under Sec.  874.12; (2) to restore water supplies 
under Sec.  874.14; (3) to reclaim noncoal lands and waters under Sec.  
875.12 as requested by the governing body of the Indian tribe according 
to section 409(c) of SMCRA; (4) to deposit into an acid mine drainage 
abatement and treatment fund under Part 876; and (5) to acquire land 
under Sec.  879.11. Our explanation in the preamble for Sec.  872.16, 
which allows States to use State share funds for noncoal reclamation, 
also applies to Indian tribes' use of Tribal share funds. Therefore, we 
will not repeat it here.
What will OSM do with unappropriated AML funds currently allocated to 
the Rural Abandoned Mine Program? (Sec.  872.20)
    We are proposing to renumber existing Sec.  872.11(b)(3) as Sec.  
872.20 under the new heading ``What will OSM do with unappropriated AML 
funds currently allocated to the Rural Abandoned Mine Program?'' and to 
remove the existing provisions for transferring money from the Fund to 
the Rural Abandoned Mine Program (RAMP). The 2006 amendments removed 
the statutory provisions that provided funding for RAMP and created 
section 402(h)(4)(B) of SMCRA. That section requires us to take any 
funds that were allocated to RAMP but that were not appropriated before 
December 20, 2006, and set them aside for possible transfer to the UMWA 
health care plans. Proposed Sec.  872.20 is consistent with this 
provision. Note that the only funds currently allocated to RAMP and 
affected by this section are those we collected and allocated between 
October 1, 2005, and December 20, 2006, because the RAMP balance on 
September 30, 2005, was reallocated to the Federal expense funds 
(section 402(g)(3) of SMCRA) by the Department of the Interior, 
Environment, and Related Agencies Appropriations Act, 2006, (Pub. L. 
109-54, 119 Stat. 513 (2005)).
What are historic coal funds? (Sec.  872.21)
    We are proposing to remove existing Sec.  872.11(b)(4) and its 
subsections (b)(4)(i) and (ii) and to replace them with Sec. Sec.  
872.21 and 872.22. These new sections describe what commonly are known 
as ``historic coal funds.'' These sections address the 2006 amendments 
for historic coal funds and are worded in plain English.
    Proposed Sec.  872.21 describes historic coal funds and reflects 
the requirements of sections 401(d)(3), 401(f)(3)(A)(i), 401(f)(5)(B), 
402(g)(5), 411(h)(1)(A)(ii), and 411(h)(4) of SMCRA, as revised by the 
2006 amendments. 30 U.S.C. 1231(d)(3), 1231(f)(3)(A)(i), 1231(f)(5)(B), 
1232(g)(5), 1240a(h)(1)(A)(ii), and 1240a(h)(4). Historic coal funds 
are part of the Fund. They are provided for under section 402(g)(5) of 
SMCRA based on the amount of coal produced before August 3, 1977, in 
your State or on Indian lands in which you have an interest. Section 
401(d)(3) mandates that we distribute historic coal funds annually and 
that the distribution of historic coal funds is not subject to prior 
Congressional appropriation. To determine the amount of the historic 
coal funds, section 402(g)(5)(A) now requires us to allocate 60 percent 
of the amount of money left in the Fund after we allocate the 50 
percent of reclamation fees to the State or Tribal shares under section 
402(g)(1). This is an increase from the pre-2006 amendments amount of 
historic coal funds, which only allowed us to allocate 40 percent of 
the amount of money left in the Fund after the State or Tribal share 
funds were allocated. We distribute the historic coal funds for each FY 
to supplement grants awarded to uncertified States and Indian tribes 
that have not completed reclamation of their Priority 1 and 2 coal 
problems as defined by section 403(a).
    We are proposing to word Sec.  872.21(a) to more clearly describe 
the source and percentages of funds that will make up the historic coal 
funds. Only 50 percent of the reclamation fees collected annually is 
left in the Fund after the State or Tribal share funds are allocated. 
Under section 402(g)(5)(A), 60 percent of that remaining 50 percent 
(for a total of 30 percent), of reclamation fees is used to supplement 
grants. That section also provides for using 60 percent of all other 
revenue to the Fund for the same purpose. So, proposed Sec.  872.21(a) 
states that, each year, 30 percent of AML fee collections for coal 
produced in the previous FY plus 60 percent of all other revenue to the 
Fund become historic coal funds.
    Proposed Sec.  872.21(b) describes other moneys included in 
historic coal funds as a result of the reallocations we must make 
during our annual fund distribution under sections 401(f)(3)(A)(i), 
411(h)(1)(A)(ii), and 411(h)(4) of SMCRA. 30 U.S.C. 1231(f)(3)(A)(i), 
1240a(h)(1)(A)(ii), and 1240a(h)(4). Paragraph (b)(1) specifies that 
moneys we reallocate to historic coal funds based on the prior balance 
replacement funds, which are distributed under Sec.  872.29, will be 
available for grants beginning with Federal FY 2023. Paragraph (b)(2) 
states that moneys we reallocate to historic coal funds based on 
certified in lieu funds we distribute under Sec.  872.32 will be 
available for grants in FY 2009 through FY 2022. 30 U.S.C. 
1231(f)(3)(A)(i). As we explained in our discussions of Sec. Sec.  
872.15 and 872.18, after September 30, 2007, certified States and 
Indian tribes are no longer eligible to receive their State or Tribal 
share funds, which would have been 50 percent of the reclamation fees 
paid for coal mined on lands in their State or on Indian lands within 
their jurisdiction. 30 U.S.C. 1231(f)(3)(B). In addition,

[[Page 35224]]

section 402(g)(5)(A) prohibits certified States and Indian tribes from 
receiving historic coal funds. 30 U.S.C. 1232(g)(5)(A).
    Although the certified States and Indian tribes no longer receive a 
portion of the reclamation fees paid for coal mined on their lands, we 
still collect reclamation fees from coal mining operators in certified 
States and on Indian lands as authorized by section 402(a) of SMCRA. 
Section 411(h)(4) of SMCRA, as revised by the 2006 amendments, directs 
us to reallocate to the historic coal funds money that would formerly 
have constituted a certified State's or Indian tribe's State or Tribal 
share, i.e., 50 percent of the amount of reclamation fees that coal 
mining operations in certified States and on Indian lands paid for coal 
produced in each FY. 30 U.S.C. 1240a(h)(4). Sections 411(h)(1)(A)(ii) 
and 411(h)(4) also require us to reallocate certified States' or Indian 
tribes' prior unappropriated balance of State or Tribal share funds to 
the historic coal funds. 30 U.S.C. 1240a(h)(4).
How does OSM distribute and award historic coal funds? (Sec.  872.22)
    We propose to add Sec.  872.22 to describe how we distribute and 
award historic coal funds. We distribute historic coal funds by 
determining which States and Indian tribes are eligible for historic 
coal funds. We also determine the total amount of funds available from 
fee collections for coal produced in the previous FY and from 
reallocations based on Treasury payments. Then we divide the available 
total between the eligible States and Indian tribes according to each 
State's or Indian tribe's percentage of the total tons of coal produced 
prior to August 3, 1977, from all eligible States and Indian tribal 
lands. We also propose to remove existing Sec.  872.11(b)(4)(i) and 
(ii) and to include similar provisions at Sec. Sec.  872.22(d) and (e) 
as explained below.
    Section 872.22(a) includes three criteria you must meet to be 
eligible to receive historic coal funds. First, in paragraph (a)(1), 
you must have and maintain an approved reclamation plan under Part 884 
to be eligible to receive historic coal funds. Second, you cannot be 
certified under section 411(a) of SMCRA. Third, because section 
402(g)(5)(A) of SMCRA states that you can receive historic coal funds 
only if you have unfunded Priority 1 and 2 coal problems under section 
403(a), to meet the criterion of paragraph (a)(2) you cannot have 
reclaimed all your Priority 1 and 2 coal problems. Thus, if you are an 
uncertified State or Indian tribe that has no remaining unfunded 
Priority 1 or 2 problems, you cannot receive historic coal funds.
    Proposed Sec.  872.22(b) says that once the eligibility criteria 
listed in Sec.  872.22(a)(1) and (2) are met, we calculate the historic 
coal funds you receive using a formula based on the amount of coal 
historically produced before August 3, 1977, in your State or from the 
Indian lands concerned.
    The table in proposed Sec.  872.22(c) describes how we distribute 
historic coal funds. Section 401(f)(5)(B) of SMCRA requires that we 
phase in these distributions over four years beginning October 1, 2007. 
For the years beginning October 1, 2011, and continuing through 
September 30, 2022, we will distribute the full amount we calculated 
using the formula mentioned in paragraph (b). For the years beginning 
October 1, 2022, and continuing thereafter, we will distribute to you 
the amount needed to reclaim your remaining Priority 1 and 2 coal 
problems to the extent the funds are available.
    Section 401(f)(2)(B) of SMCRA requires us to distribute the same 
overall amount from the Fund in FY 2023 and thereafter that we 
distribute in FY 2022, if the money is available. 30 U.S.C. 
1231(f)(2)(B). Most of the moneys remaining in the Fund by that time 
will be historic coal funds. These moneys will be available for 
distribution in FY 2023 and later years because of the reallocation of 
prior balance replacement fund amounts to historic coal funds under 
sections 401(f)(3)(A)(i), 411(h)(1)(A)(ii) and 411(h)(4) of SMCRA. 30 
U.S.C. 1231(f)(3)(A)(i), 1240a(h)(1)(A)(ii), and 411(h)(4). We will 
continue to use the formula described in paragraph (b) of this section 
to distribute historic coal funds to you in FY 2023 and afterward.
    Proposed Sec.  872.22(d) states that we will only distribute the 
historic coal funds you need to reclaim your unfunded Priority 1 or 2 
coal problems. This paragraph includes the provisions that we propose 
to move from existing Sec.  872.11(b)(4)(i) and (ii). It addresses the 
situation where the cost to reclaim all remaining Priority 1 and 2 coal 
problems in an uncertified State or Indian tribe is more than the 
amount that the State or Indian tribe receives for its State or Tribal 
share alone, but is less than the amount that the State or Indian tribe 
receives for its State or Tribal share, unused funds from prior 
allocations, and historic coal funds combined. In this situation, we 
will reduce the amount of historic coal funds the State or Indian tribe 
receives to the amount it needs to fund reclamation of its remaining 
Priority 1 or 2 coal problems.
    Under proposed Sec.  872.22(e), we will continue the long-standing 
practice of awarding historic coal funds to you in grants following the 
provisions of Part 886.
What may you use historic coal funds for? (Sec.  872.23)
    Proposed Sec.  872.23 describes how you may use historic coal 
funds. Consistent with sections 402(g)(5), 402(g)(6)(A), and 409(b) of 
SMCRA, this section allows you to use historic coal funds for the 
following purposes only: (1) Abandoned coal mine reclamation under 
Sec.  874.12; (2) water supply restoration under Sec.  874.14; (3) 
abating noncoal problems prior to certification under Sec.  875.12 
based on requests made under section 409(c) of SMCRA; (4) for deposit 
into an acid mine drainage abatement and treatment fund under Part 876; 
and (5) land acquisition under Sec.  879.11.
    The use of historic coal funds for some noncoal reclamation is 
clearly authorized in section 409(b) of SMCRA. That section, which was 
not modified by the 2006 amendments, states that ``[f]unds available 
for use in carrying out the purpose of this section [the reclamation of 
Priority 1 noncoal sites] shall be limited to those funds which must be 
allocated to the respective States or Indian tribes under the 
provisions of paragraphs (1) and (5) of section 402(g).'' 30 U.S.C. 
1239(b). Because the historic coal funds are allocated to the States 
and Indian tribes under section 402(g)(5), uncertified States and 
Indian tribes are able to use historic coal funds provided under 
section 402(g)(5) to abate Priority 1 noncoal hazards based on requests 
made under section 409(c). We believe that amended section 402(g)(2), 
which requires ``strict compliance'' by uncertified States and Indian 
tribes with the reclamation of coal problems, does not impact the 
authorization in section 409(b) that allows historic coal funds to be 
expended on noncoal reclamation. Although we request comment on this 
issue, proposed Sec.  872.23(a)(3) explicitly allows uncertified States 
and Indian tribes to continue using historic coal funds for noncoal 
reclamation consistent with section 409(b) of SMCRA.
    In addition to the use of historic coal funds for coal reclamation, 
water supply restoration, and noncoal reclamation, paragraph (a)(4) 
specifies, consistent with section 402(g)(6) of SMCRA, as revised by 
the 2006 amendments, that you may use historic coal funds for deposit 
into an acid mine drainage

[[Page 35225]]

abatement and treatment fund under Part 876.
What are Federal expense funds? (Sec.  872.24)
    We propose to divide existing Sec.  872.11(b)(5) into two sections 
and to renumber those sections as Sec. Sec.  872.24 and 872.25. These 
sections address what previously were known as ``Federal share funds'' 
under section 402(g)(3) of SMCRA. We call them ``Federal expense'' 
funds in this proposed rule. The new sections address the 2006 
amendments and are worded in plain English.
    Proposed Sec.  872.24 replaces the introductory paragraph at 
existing Sec.  872.11(b)(5) and identifies what Federal expense funds 
are. Federal expense funds are moneys in the Fund that are not 
allocated as State share, Tribal share, historic coal, or minimum 
program make up funds. Under section 401(d)(1) of SMCRA, we may use 
Federal expense funds only if Congress appropriates them.
What may OSM use Federal expense funds for? (Sec.  872.25)
    Proposed Sec.  872.25 describes how we may use Federal expense 
funds. Paragraphs (a) through (a)(5) list allowed uses in detail. For 
example, we may use these funds to perform nonemergency and other 
projects for States and Indian tribes that do not have approved 
reclamation programs and for the Secretary's administration of Title IV 
of SMCRA and subchapter R of the Federal regulations. Section 872.25 
replaces existing Sec. Sec.  872.11(b)(5)(i) through (v) as well as 
Sec. Sec.  872.11(b)(7) and 872.11(b)(8) and is worded in plain 
English.
    We propose to renumber existing Sec.  872.11(b)(7) as Sec.  
872.25(b) and to reword it in plain English to describe the Federal 
expense distributions. This paragraph reflects the provision in the 
last sentence of section 402(g)(5)(A) of SMCRA, which states ``[f]unds 
made available under paragraph (3) or (4) of this subsection for any 
State or Indian tribe shall not be deducted against any allocation of 
funds to the State or Indian tribe under paragraph (1) or under this 
paragraph.'' 30 U.S.C. 1232(g)(5)(A). This paragraph clarifies that we 
are prohibited from deducting the amount of funds we allocate or 
distribute as Federal expenses, described at Sec.  872.25, from your 
State or Tribal share funds and historic coal funds. Proposed Sec.  
872.25(b) also would remove a reference in existing Sec.  872.11(b)(7) 
to minimum program make up funds provided under section 402(g)(8) of 
SMCRA because, under section 402(g)(3)(E) of SMCRA, as revised by the 
2006 amendments, minimum program make up funds are expressly included 
in Federal expenses so the additional reference is no longer necessary. 
30 U.S.C. 1232 (g)(3)(E).
    In addition, we are proposing to renumber existing Sec.  
872.11(b)(8) as Sec.  872.25(c) and reword it using plain English. This 
paragraph is consistent with section 402(g)(3)(C) of SMCRA. That 
section allows us to use Federal expense funds to address Priority 1, 
2, and 3 coal problems that meet the eligibility requirements of 
section 404 in States and on Indian lands where the State or Indian 
tribe does not have an abandoned mine reclamation program approved 
under section 405. 30 U.S.C. 1232(g)(3)(C).
What are minimum program make up funds? (Sec.  872.26)
    Our proposed changes to existing Sec.  872.11(b)(6) include 
removing it and replacing it with Sec. Sec.  872.26 and 872.27 and 
wording them in plain English. These sections are consistent with the 
provisions of section 402(g)(8) of SMCRA, as revised by the 2006 
amendments, for what commonly has been called ``minimum program 
funding'' or the ``minimum program make-up.''
    Section 872.26 addresses what we call ``minimum program make up 
funds'' in this rule. Paragraph (a) describes these funds as additional 
moneys that we distribute to eligible States and Indian tribes each 
year to make up the difference between their total distribution of 
other funds and $3 million. It also identifies the source of these 
moneys as the non-appropriated Federal expense funds. Section 
402(g)(3)(E) of SMCRA requires us to use Federal expense funds provided 
under section 402(g)(3) for this mandatory distribution. 30 U.S.C. 
1232(g)(3)(E). However, unlike other Federal expense funds provided 
under section 402(g)(3) and Sec.  872.24 of the regulations, these 
funds are not subject to prior Congressional appropriation. 30 U.S.C. 
1231(d)(1).
    Proposed Sec. Sec.  872.26(b) through (b)(4) describe four criteria 
you must meet to be eligible to receive minimum program make up funds. 
First, you must have and maintain an approved reclamation plan under 
Part 884. Next, you cannot be certified under section 411(a) of SMCRA. 
Third, the total amount of State or Tribal share, historic coal, and 
prior balance replacement funds you receive annually must be less than 
$3 million. Last, you must have unfunded Priority 1 and 2 coal problems 
greater than your total annual amount of State or Tribal share, 
historic coal, and prior balance replacement funds.
    Consistent with section 402(g)(8)(B) of SMCRA, proposed Sec.  
872.26(c) makes the same amount of funding available to the States of 
Missouri and Tennessee to reclaim Priority 1 and 2 coal problems 
provided they have abandoned mine reclamation plans under Part 884.
How does OSM distribute and award minimum program make up funds? (Sec.  
872.27)
    Proposed Sec.  872.27 describes how we distribute and award minimum 
program make up funds. Paragraph (a) provides that we distribute these 
funds to you if you meet the eligibility requirements of Sec.  
872.26(b). In paragraph (a)(1), we describe how we calculate the amount 
of the Federal expense funds, if any, we use to supplement the other 
funds you receive under Title IV of SMCRA. We add up the annual 
distributions you receive for your prior balance replacement funding 
under Sec.  872.29, your State or Tribal share moneys under Sec. Sec.  
872.14 or 872.17, and your historic coal funds under Sec.  872.21. If 
your distribution of these funds is equal to or greater than $3 million 
annually, you will not receive any minimum program funding under this 
section. If your distribution of these funds is less than $3 million 
annually, we add Federal expense funds to increase your total 
distribution to $3 million.
    Although we use Federal expense funds to ensure that all 
uncertified States and Indian tribes receive at least $3 million in 
their distributions, we are required to reduce the amount of these 
minimum program make up distributions for the first four years to 
comply with the phase-in provision of section 401(f)(5)(B) of SMCRA, as 
revised by the 2006 amendments. 30 U.S.C. 1231(f)(5)(B). The table in 
paragraph (a)(2) describes how we phase-in funding beginning October 1, 
2007, until you reach the full funding level beginning October 1, 2011.
    Proposed Sec.  872.27 is consistent with provisions of sections 
401(f)(5) and 402(g)(8) of SMCRA, as revised in the 2006 amendments. 
Section 402(g)(8)(A) requires us to ensure that ``[i]n making funds 
available under this title'' your ``grant awards total not less than $3 
million annually.'' 30 U.S.C. 1232(g)(8)(A). We interpret this 
provision to mean the full funding level for grants we must annually 
award to eligible States and Indian tribes under this section is $3 
million. So, we must include the total of funds an uncertified State or 
Indian tribe receives under all of Title IV--including the State or 
Tribal share funds (section 402(g)(1)), the

[[Page 35226]]

historic coal funds (section 402(g)(5)), and the prior balance 
replacement funds (section 411(h)(1))--as part of the $3 million 
referred to in section 402(g)(8)(A).
    All section 402(g)(8) funds are distributed under section 401(d)(3) 
and (f) of SMCRA. Despite the amounts listed in section 401(f)(3) for 
distribution to the uncertified State and Indian tribes, this section 
requires us to phase in all ``amount[s] distributed under this 
subsection'' for the first four fiscal years beginning with FY 2008. 30 
U.S.C. 1231(f)(5)(B). Section 401(f)(3) clearly covers the money 
allocated by section 402(g)(8) to ensure the $3 million distribution to 
eligible States and Indian Tribes. 30 U.S.C. 1231(f)(3)(A).
    We are phasing-in this funding based on sections 401(f)(2)(A)(ii), 
401(f)(3)(A)(ii), and 401(f)(5) of SMCRA. There are other ways to 
calculate the phased-in distribution. We are proposing the method that 
we chose for the 2008 distribution because we believe it maximizes 
funding for the minimum program States. To calculate the distribution, 
we first add up your annual prior balance replacement, State or Tribal 
share, and historic coal fund distributions. Then we calculate how much 
additional minimum program make up funding you would need to reach $3 
million. We apply the phase-in only to that additional minimum program 
make up funding.
    The following example illustrates the phase-in method: The 
distribution of State A's prior balance replacement funds and its 
phased-in State share funds and historic coal funds totals $400,000. 
The amount of minimum program funds we would add to bring State A's 
total distribution to $3 million is $2.6 million. In FY 2008 and FY 
2009, we would add 50 percent of the $2.6 million in minimum program 
make up funds, or $1.3 million, to the $400,000 sum of the State's 
other funding. State A's total distributions for FY 2008 and FY 2009 
therefore would be $1.7 million each. In FY 2010 and FY 2011, we would 
add 75 percent of the $2.6 million amount of minimum program funds, or 
$1,950,000, to the $400,000 sum of State A's other funding (assuming, 
for this example, that those other funding levels remain constant). 
State A would therefore receive $2,350,000 in both FY 2010 and FY 2011.
    We invite you to comment on other ways to calculate minimum program 
make up funding that meet SMCRA's requirements.
    The table in Sec.  872.27(a)(2)(iii) shows that beginning in FY 
2012, your total annual distribution will not be less than $3 million 
unless the estimated reclamation cost of your remaining Priority 1 and 
2 coal problems is less than $3 million. Section 872.27(a)(2)(iv) 
explains that if you have Priority 1 and 2 coal problems remaining 
after September 30, 2022, we will continue to fund your total annual 
distribution at no less than $3 million (to the extent funds still are 
available) until the estimated cost of reclaiming your Priority 1 and 2 
coal problems is less than $3 million. If the estimated cost of 
reclaiming your Priority 1 and 2 coal problems is less than $3 million 
but more than your total annual distribution of all other types of 
Title IV funds, we will provide minimum program make up funding up to 
the amount of your total unfunded reclamation cost.
    Last, proposed Sec.  872.27(b) states that we will award minimum 
program make up funds to you in grants following the procedures of Part 
886 for uncertified States and Indian tribes, as we have for many 
years.
What may you use minimum program make up funds for? (Sec.  872.28)
    Consistent with section 402(g)(8)(A) of SMCRA, we propose to add 
Sec.  872.28 to state that you may only use minimum program make up 
funds to reclaim Priority 1 and 2 coal problems. You may not use 
minimum program make up funds for Priority 3 coal problems, AMD set-
asides, noncoal problems, or any other work except Priority 1 and 2 
coal problems.
What are prior balance replacement funds? (Sec.  872.29)
    Section 872.29 is one of three new sections we propose to add to 
explain the provisions of section 411(h)(1) of SMCRA, as revised by the 
2006 amendments, for what we call ``prior balance replacement funds'' 
in this rule. This section describes them as moneys we must distribute 
to you instead of the moneys that we allocated to your State or Tribal 
share of the Fund before October 1, 2007, but that we did not actually 
distribute to you because Congress never appropriated them. It 
identifies the source of these funds as general funds of the U.S. 
Treasury that are otherwise unappropriated, not the Fund. Under the 
2006 amendments, distributions of prior balance replacement funds from 
general funds of the U.S. Treasury are mandatory and are not subject to 
Congressional appropriation. These distributions start in FY 2008 and 
last for seven years.
    We do not propose to add a provision to this section, or to 
proposed Sec.  872.32 which addresses certified in lieu funds from 
Treasury, to reflect the funding cap set forth in section 402(i)(3)(A) 
of SMCRA. 30 U.S.C. 1232(i)(3)(A). That cap limits to $490 million in 
any fiscal year the total amount of Treasury funding for grants to 
States and Indian tribes and for transfers to the three UMWA health 
care plans described in sections 402(h) and (i) of SMCRA. In addition, 
section 402(i)(3)(B) provides that if the cap is exceeded, each 
transfer would be reduced proportionally. 30 U.S.C. 1232(i)(3)(B). At 
this time, we project that total needs for this funding will remain 
below the cap amount; therefore, we have not proposed specific rule 
language describing how we would reduce our distribution of prior 
balance replacement funds and certified in lieu funds if the cap were 
reached. We request your comments on whether we should add such a 
provision, and, if so, what should it contain.
How does OSM distribute and award prior balance replacement funds? 
(Sec.  872.30)
    We added Sec.  872.30 to describe how we propose to distribute and 
award prior balance replacement funds. Under paragraph (a)(1), we 
propose to distribute U.S. Treasury funds to you, all States and Indian 
tribes with approved reclamation plans, equal to the moneys that we 
allocated to your State or Tribal share before October 1, 2007, but 
that were not distributed before then. Under paragraph (a)(2), we 
propose to distribute these funds to you if you are, or are not, 
certified under section 411(a) of SMCRA. Consistent with section 
411(h)(1)(C) of SMCRA, proposed paragraph (a)(3) requires us to 
distribute these funds to you in seven equal annual installments, 
beginning in FY 2008.
    Under proposed Sec.  872.30(b), we will award prior balance 
replacement funds to you in grants under Part 885 if you are a 
certified State or Indian tribe or under Part 886 if you are 
uncertified. Section 411(h)(1) of SMCRA says `` * * * the Secretary 
shall make payments to States or Indian tribes for the amount due * * * 
.'' 30 U.S.C. 1240a(h)(1)(A)(i).
    We recognize that SMCRA, as amended, unambiguously requires us to 
distribute moneys from the general Treasury to the States and Indian 
tribes, but the 2006 amendments do not specify a method of payment for 
us to use to make the ``payments.'' See, e.g., 30 U.S.C. 1232(i)(2) 
(``[O]ut of any funds in the Treasury not otherwise appropriated, the 
Secretary of the Treasury shall transfer to the Secretary of the 
Interior for distribution to States and Indian tribes such sums as are

[[Page 35227]]

necessary to pay amounts described in paragraphs (1)(A) and (2)(A) of 
section 411(h).''). We considered many methods for making the payments 
to States and Indian Tribes under section 411(h)(1). Based on that 
consideration and the Solicitor's M-opinion, we are required to make 
these payments as grants.
    Not only are we required to use grants to distribute prior balance 
replacement funds under section 411(h)(1), but doing so also has 
advantages. First, using grants allows us to continue the established 
and effective process we have been using to disburse moneys from the 
Fund to States and Indian tribes for almost 30 years. Grants policies 
and procedures currently are described in our Federal Assistance Manual 
(FAM; OSM Directive GMT-10). They are simplified compared to those 
procedures used for the grants we award under Title V of SMCRA. The FAM 
and all grant application forms are available on-line, and States and 
Indian tribes can develop and submit grant applications to us 
electronically. Likewise, much of our application processing and all of 
our grant approval and award actions occur electronically. These 
capabilities are integrated with the Department of the Interior's 
Financial and Business Management System (FBMS). States' and Indian 
tribes' finance and accounting departments are experienced in following 
these procedures for receiving and managing grant funds we award. In 
addition, they are well versed in OMB Circular A-102, the ``Grants 
Common Rule'' at 43 CFR Part 12, and FAM requirements that we follow 
for providing financial assistance under Title IV of SMCRA. Those 
requirements include periodic reporting and auditing that help States, 
Indian tribes, and us ensure proper accounting for funds and their use.
    Second, using grants can help us address our programmatic 
responsibilities concerning certified and uncertified States and Indian 
tribes under sections 201(c)(1) and (4) of SMCRA. 30 U.S.C. 1211(c)(1) 
and (4). Grant requirements for periodic reporting provide some of the 
information we need to monitor and evaluate States' and Indian tribes' 
accomplishments, determine if they are following their approved grants 
and reclamation plans, identify the need for assistance, and to help us 
with our reporting requirement mandated by section 405(j) of SMCRA.
    Third, using grants allows us to maintain financial accountability 
for the prior balance replacement funds. As discussed in proposed Sec.  
872.31, the 2006 amendments require that prior balance replacement 
funds be used for specific purposes: Certified States and Indian tribes 
must use them for ``the purposes established by the State legislature 
or tribal council of the Indian tribe, with priority given for 
addressing the impacts of mineral development''; and uncertified States 
and Indian tribes must use them for coal reclamation as described in 
section 403. 30 U.S.C. 1240a(h)(1)(D). Using grants provides us with 
oversight to ensure that the States and Indian tribes are spending 
prior balance replacement funds as required by SMCRA, as revised by the 
2006 amendments, and specifically that uncertified States and Indian 
tribes are directing prior balance replacement funds into coal 
reclamation.
    Last, the Treasury regulations associated with grants (31 CFR Part 
205) allow States and Indian tribes to draw down prior balance 
replacement funds to pay expenses while otherwise keeping funds in the 
U.S. Treasury until needed.
    Proposed Sec.  872.30(c) addresses sections 411(h)(1)(A)(ii) and 
411(h)(4)(A) of SMCRA, as revised by the 2006 amendments. 30 U.S.C. 
1240a(h)(1)(A)(ii) and 1240a(h)(4)(A). It requires us to transfer to 
historic coal funds the moneys in your State or Tribal share of the 
Fund that were allocated, but not appropriated to you, before October 
1, 2007. The amount of this transfer will be of the same amount that we 
pay you as prior balance replacement funds under this section and 
411(h)(1) of SMCRA. Proposed Sec.  872.30(c) further requires us to 
make the amounts transferred to the historic coal funds available for 
annual grants beginning in FY 2023, which is the same time we 
distribute the remaining moneys under Title IV. Finally, it requires us 
to allocate, distribute, and award the transferred amounts to you 
according to the provisions applicable to historic coal funds under 
Sec. Sec.  872.21, 872.22, and 872.23.
What may you use prior balance replacement funds for? (Sec.  872.31)
    Consistent with section 411(h)(1)(D)(i) of SMCRA, proposed Sec.  
872.31(a) requires you, a certified State or Indian tribe, to use the 
prior balance replacement funds you receive only for the purposes that 
your State legislature or Tribal council establishes, giving priority 
to addressing the impacts of mineral development. 30 U.S.C. 
1240a(h)(1)(D)(i). While this language is taken essentially verbatim 
from the 2006 amendments, we realize this provision may significantly 
affect certified States' and Indian tribes' reclamation programs, and 
we specifically invite your comments on this proposal.
    Under SMCRA, as revised by the 2006 amendments, the State 
legislature or Tribal council has broad and sole discretion to 
determine how prior balance replacement funds will be spent. Because 
OSM has no basis for approving or disapproving individual projects to 
be undertaken with these funds, we do not believe that projects paid 
for with prior balance replacement funds would be subject to OSM review 
requirements under laws such as the National Environmental Policy Act 
of 1969 (NEPA) and the National Historic Preservation Act (NHPA). 
Certified States or Indian tribes would be solely responsible for 
determining what other Federal laws are applicable to their activities. 
Therefore, we are not proposing that an Authorization to Proceed (ATP) 
from OSM with an accompanying NEPA review would be required. We invite 
your comments on this issue.
    Proposed Sec. Sec.  872.31(b) through (b)(3) require that 
uncertified States and Indian tribes use their prior balance 
replacement funds only for activities related to abandoned coal mine 
problems. Section 411(h)(1)(D)(ii) specifies that uncertified States 
``shall use any amounts provided under this paragraph for the purposes 
described in section 403.'' 30 U.S.C. 1240a(h)(1)(D)(ii). So, 
uncertified States and Tribes must use prior balance replacement funds 
to reclaim Priority 1, 2, and 3 coal problems under Sec.  874.12, to 
restore water supplies under Sec.  874.14, and to maintain the AML 
inventory under section 403(c) of SMCRA. Though not a required use in 
proposed Sec.  872.31(b), we believe uncertified States and Indian 
tribes may use these funds to acquire lands under Sec.  879.11 as 
needed to address coal problems under section 403.
    Congress enacted the 2006 amendments out of a concern for 
addressing remaining coal problems. Section 409(b) specifies that only 
certain types of funds can be used to address noncoal problems. 30 
U.S.C. 1239(b). Prior balance replacement funds, authorized to be paid 
under section 411(h)(1), are not among the types of funds specified for 
noncoal reclamation under section 409(b).
    Prior balance replacement funds described in section 411(h)(1) are 
based on the amount of the reclamation fees we collected in each State 
and on Indian lands and allocated to those States and Indian tribes 
under section 402(g)(1), but that Congress did not appropriate through 
FY 2007. However, the 2006 amendments reallocate those unappropriated 
section 402(g)(1) moneys to the historic coal funds of

[[Page 35228]]

section 402(g)(5). 30 U.S.C. 1240a(h)(1)(A)(ii) and 1240a(h)(4)(A). The 
prior balance replacement funds that the uncertified States and Indian 
tribes receive may be of an amount equivalent to the unappropriated 
balance, but they are paid from U.S. Treasury funds and have not been 
allocated under section 402(g)(1). There is a fundamental distinction 
between the prior balance replacement funds and section 402(g) moneys 
distributed from the Fund.
    Therefore, proposed Sec.  872.31(b) requires you, the uncertified 
State or Indian tribe, to use prior balance replacement funds only for 
the three purposes described above. This interpretation will not 
prevent you from abating Priority 1 noncoal hazards to public health 
and safety with the State or Tribal share funds we distribute to you 
annually under Sec. Sec.  872.14 or 872.17 and historic coal funds we 
distribute under Sec.  872.21.
What are certified in lieu funds? (Sec.  872.32)
    We propose three new sections addressing funds distributed to 
States and Indian tribes described in section 411(h)(2) of SMCRA. 30 
U.S.C. 1240a(h)(2). We call these moneys ``certified in lieu funds'' in 
this proposed rule. As the first of these three sections, Sec.  872.32 
describes certified in lieu funds as moneys that we will distribute to 
you, a certified State or Indian tribe, in lieu of moneys otherwise 
allocated to your State or Tribal share of the Fund after October 1, 
2007. We are prohibited from distributing State and Tribal share moneys 
to you because of the exclusion in section 401(f)(3)(B) of SMCRA. 30 
U.S.C. 1231(f)(3)(B). This proposed section also identifies the source 
of these certified in lieu funds as otherwise unappropriated funds in 
the United States Treasury, not the Fund. The annual distribution of 
certified in lieu funds is mandatory and not subject to prior 
Congressional appropriation. These distributions will start in FY 2009 
because section 411(h)(2) of SMCRA specifies that our payments must 
equal the State and Tribal share funds ``allocated on or after October 
1, 2007.'' 30 U.S.C. 1240a(h)(2)(A). So, the first fees collected that 
can serve as the basis for calculating certified in lieu payments are 
those allocated on coal produced during FY 2008. As a result, we will 
distribute certified in lieu funds for the first time in FY 2009.
How does OSM distribute and award certified in lieu funds? (Sec.  
872.33)
    Proposed Sec.  872.33 describes how we will distribute and award 
certified in lieu funds. Paragraph (a) states that you must be 
certified under section 411(a) of SMCRA to receive certified in lieu 
funds, as required in section 411(h)(2) and defined in section 
411(h)(2)(B). If you meet that requirement, we will follow the steps 
described in paragraph (b) to distribute these moneys to you. Under 
paragraph (b)(1), we will annually distribute to you, beginning in FY 
2009, an amount based on 50 percent of the reclamation fees we received 
for coal produced during the previous FY in your State or on Indian 
lands within the jurisdiction of your Indian tribe. Proposed paragraph 
(b)(2) states that the funds we annually distribute to you will be in 
lieu of moneys you would have received from your State or Tribal share 
of the Fund if section 401(f)(3)(B) of SMCRA, as revised by the 2006 
amendments, did not specifically exclude you from receiving those 
funds. 30 U.S.C. 1231(f)(3)(B). Although the Fund will not be the 
source of these moneys that we distribute to you, you will receive 
moneys each year as though you were still receiving them from your 
State or Tribal share of the Fund.
    Proposed Sec.  872.33(b)(3) explains, using a table, how we intend 
to phase-in our distribution of certified in lieu funds to you over the 
first three years beginning October 1, 2008. This paragraph is 
consistent with section 411(h)(3)(B) of SMCRA, which requires that in 
the first three fiscal years beginning with FY 2009, the amount we 
annually distribute to you will be equal to 25 percent, 50 percent, and 
75 percent, respectively, of 50 percent of the annual reclamation fee 
collections in your State or from Indian lands within your 
jurisdiction. 30 U.S.C. 1240a(h)(3)(B). You will receive an amount 
equal to 100 percent of your 50 percent State or Tribal share of annual 
reclamation fee collections in the fiscal year beginning October 1, 
2011, and in the following fiscal years.
    Proposed Sec.  872.33(c) states our intention to use grants to pay 
these funds to you. Section 411(h)(2) of SMCRA says ``the Secretary 
shall pay to each certified State or Indian tribe * * * .'' 30 U.S.C. 
1240a(h)(2)(A). As with the section 411(h)(1) prior balance replacement 
fund ``payments,'' we must use grants to pay certified in lieu funds to 
you. See the discussion of Sec.  872.30 above.
    The proposed paragraph Sec.  872.33(d) addresses the provisions of 
sections 401(f)(3)(A)(i) and 411(h)(4) of SMCRA. It requires us to 
transfer to historic coal funds the same amount of funds that we 
distribute to you as certified in lieu funds. The transferred amounts 
will come from moneys in your State or Tribal share of the Fund that 
are otherwise allocated to you for the prior fiscal year, but which you 
are barred from receiving. We must make those transferred amounts 
available for annual grants beginning in FY 2009, and will do so at the 
same time we distribute all other moneys under Title IV. Finally, 
proposed Sec.  872.33(d) requires us to allocate, distribute, and award 
the transferred amounts to uncertified States and Indian tribes 
according to the provisions applicable to historic coal funds under 
Sec. Sec.  872.21, 872.22, and 872.23.
    Section 411(h)(3)(C) of SMCRA requires us to distribute to you, in 
two equal annual installments in FY 2018 and FY 2019, the amounts we 
withhold from the first three payments of certified in lieu funds as a 
result of the phased-in distribution. 30 U.S.C. 1240a(h)(3)(C). 
Proposed Sec.  872.33(e) incorporates that provision into the 
regulations.
What may you use certified in lieu funds for? (Sec.  872.34)
    Proposed Sec.  872.34 states that you may use certified in lieu 
funds for any purpose. We believe that by not specifying any prescribed 
uses for these moneys, the 2006 amendments allow you to use certified 
in lieu funds for any purpose. Congress could have easily imposed a 
requirement to use the funds for a specific purpose as it did for prior 
balance replacement funds in sections 411(h)(1)(A)(i) and (ii). Because 
section 411(h)(2) does not specify the purpose(s) for which the funding 
it provides may be used, we interpret it to mean that the use of the 
funds it provides is not restricted.
    However, we also recognize there is an alternative reading of 
SMCRA, as amended, and invite comment on whether our proposal reflects 
the better reading. Section 411(h)(2) of SMCRA, as revised by the 2006 
amendments, is silent on how certified in lieu funds can be used. An 
argument can be made that this section's silence on the use of these 
funds does not mean certified States and Indian tribes can use them for 
any purpose. Instead, it might be viewed as meaning that the other 
provisions of section 411 of SMCRA, specifically 411(b) through (g), 
apply to the use of certified in lieu funds. Because this would make a 
major difference in not only how these funds may be used, but in OSM's 
role in overseeing that use, we invite comment on which alternative is

[[Page 35229]]

the better reading of the 2006 amendments.
    In any case, as a certified State or Indian tribe, you must address 
coal problems that arise after certification under existing Sec.  
875.14(b), and we do not propose to change this requirement. In 
addition, when each State and Indian tribe became certified under the 
existing regulations at Sec.  875.13(a)(3), they had to provide an 
agreement to ``give top priority'' to any coal problems that occur 
after certification. So, certified States and Indian tribes must 
address these coal problems, regardless of the funding source.

Part 873--Future Reclamation Set-Aside Program

Applicability (Sec.  873.11)
    The 2006 amendments eliminated the authority for States and Indian 
tribes to set-aside funds for future reclamation that was once 
contained in section 402(g)(6). The proposed changes to Sec. Sec.  
873.11 and 873.12 reflect that change by restricting future set-aside 
actions to funding received prior to December 20, 2006, while 
preserving the requirements that existing funds contained in the set-
aside account be used for their intended purpose. We reworded this 
section to account for this change and to use plain English.
Future Set-Aside Program Criteria (Sec.  873.12)
    We propose to revise paragraph (a) to include December 20, 2006, as 
the cutoff date for deposits to future set-aside fund accounts. As 
explained above, we are making this change because the 2006 amendments 
removed the authority for States and Indian tribes to use Fund moneys 
for this purpose. We are also removing the phrase, ``or (2) An acid 
mine drainage abatement and treatment fund pursuant to 30 CFR part 
876,'' as the acid mine drainage set-aside program is addressed in that 
Part of this rule. Likewise, we are deleting paragraph (b) because it 
repeats the conditions for funds that were previously set aside which 
are already included in paragraph (a). We are deleting the first 
sentence of existing paragraph (c) because it is now obsolete. We also 
reworded this section in plain English.

Part 874--General Reclamation Requirements

Definitions (Sec.  874.5)
    We propose to add this new section to Part 874 to include the 
definition of the term ``Reclamation plan or State reclamation plan'' 
as it is defined in proposed Sec.  872.5.
Information Collection (Sec.  874.10)
    We propose to reword this paragraph using plain English and to use 
the current format approved by the OMB. It describes OMB's approval of 
information collections in Part 874, our use of that information, and 
the estimated reporting burden associated with those collections.
Applicability (Sec.  874.11)
    We are proposing revisions to this section to clarify how the 
provisions of Part 874 apply to the types of funding made available 
under the 2006 amendments and to reword it using plain English. The new 
paragraph (a) continues to impose the existing requirement for 
compliance when reclaiming eligible lands and waters with moneys from 
the Fund. The new paragraph (b) would impose compliance when conducting 
reclamation projects with the prior balance replacement funds received 
by uncertified programs from section 411(h)(1) of SMCRA because section 
411(h)(1)(D)(ii) states that the funds received must be used for the 
purposes of section 403. 30 U.S.C. 1240a(h)(1)(D)(ii). Section 403 
imposes coal reclamation priorities, authorizes water supply 
restoration, and requires the maintenance of the AML inventory. 30 
U.S.C. 1233. The new paragraph (c) would impose compliance by certified 
programs when using certified in lieu funds provided under section 
411(h)(2) of SMCRA to address eligible coal problems after 
certification. We are proposing this requirement to ensure that coal 
problems are uniformly addressed under each program, regardless of 
certification status under section 411.
    The new paragraph (d) requires certified programs to follow the 
requirements of this Part when expending the prior balance replacement 
funds provided by section 411(h)(1) of SMCRA to address coal problems 
after certification. Certified States and Indian tribes are to expend 
their prior balance replacement funds for the purposes established by 
the State legislature or Tribal council with priority given to 
addressing the impacts of mineral development. 30 U.S.C. 
1240a(h)(1)(D)(i). However, when certified States and Indian tribes use 
prior balance replacement funds to address coal problems subsequent to 
certification, compliance with the provisions under Part 874 will be 
central to our review and approval process.
Eligible Coal Lands and Water (Sec.  874.12)
    We are proposing to revise existing paragraphs (c), (e), and (f) of 
Sec.  874.12 to reflect our proposed changes to the funding 
applicability in Sec.  874.11, to correct minor errors in the existing 
regulations, and to reword these paragraphs using plain English. First, 
Sec.  874.12(c) would be updated to allow the use of prior balance 
replacement funds by uncertified programs to supplement the cost of 
reclamation at eligible bond forfeiture sites consistent with section 
411(h)(1)(D)(ii), which allows funds to be spent for the purposes 
described in section 403. Next, we propose inserting language in Sec.  
874.12(e) to allow uncertified programs to use prior balance 
replacement funds for the reclamation and abatement of inadequately 
reclaimed Priority 1 or Priority 2 sites that were mined between August 
4, 1977, and the date on which the Secretary approved a State 
regulatory program, known as ``interim program sites,'' or where the 
surety of the mining operator became insolvent as of November 5, 1990, 
known as ``insolvent surety sites.'' We also corrected an error in the 
first sentence by replacing the second ``may'' with ``made'' so that 
the sentence reads: ``An uncertified State or Indian tribe may expend 
funds made available * * *.'' Last, the revisions to Sec.  874.12(f) 
are minor conforming changes and do not alter the existing scope or 
meaning of that paragraph.
Reclamation Objectives and Priorities (Sec.  874.13)
    We are proposing changes to Sec.  874.13 that reflect expenditure 
priorities outlined in section 403(a) of SMCRA, as revised by the 2006 
amendments, and clarify how reclamation programs should address 
Priority 3 reclamation objectives. Proposed paragraph (a) of Sec.  
874.13 contains the most recent date for our ``Final Guidelines for 
Reclamation Programs and Projects'' published in 2001. 66 FR 31250, 
31258. In addition, it contains the long-standing requirement in 
section 403(a) of SMCRA that expenditures must ``reflect the * * * 
priorities in the order stated.'' 30 U.S.C. 1233(a).
    The remainder of the proposed Sec.  874.13(a) is generally the same 
as the text of sections 403(a)(1), (a)(2), and (a)(3) of SMCRA, as 
revised by the 2006 amendments. However, the last sentence of Sec.  
874.13(a)(3) was added to clarify the term ``adjacent,'' which was 
added by the 2006 amendments. More specifically, sections 
403(a)(1)(B)(ii) and (a)(2)(B)(ii) of SMCRA allow for certain lands and 
waters that have been

[[Page 35230]]

degraded by past coal mining practices to be restored as either a 
Priority 1 or Priority 2 expenditure if they are adjacent to a Priority 
1 or Priority 2 site. This new statutory provision also extends to 
Priority 3 lands and waters adjacent to Priority 1 or 2 sites that have 
already been reclaimed under the approved reclamation plan. In effect, 
the 2006 amendments allow reclamation programs to offer amendments to 
the AML inventory, where applicable, that would reclassify certain 
current Priority 3 lands and waters as Priority 1 or Priority 2 
expenditures.
    We propose that the term ``adjacent'' means Priority 3 eligible 
lands and waters that are ``geographically contiguous.'' Under our 
proposal, land and water resources that are spatially connected to a 
Priority 1 or Priority 2 site, even those sites previously reclaimed, 
may now be recorded in the AML inventory as Priority 1 or Priority 2 
unfunded costs, funded costs, or completed expenditures, as applicable.
    Given that our proposed Sec.  874.13(a) contains only geographical 
considerations, we are also seeking comment on possible alternative 
definitions of or restrictions to the term ``adjacent.'' For example, 
we would like to receive comments on whether the term ``adjacent'' 
should include all disturbances by a single mining operation or 
company. Should the term ``adjacent'' allow for a hydrologic connection 
even though there may be great distances between the sites? Should the 
term contain restrictions on the types of Priority 3 problems or costs 
that can qualify? States can now set up 30% AMD set-aside trusts under 
402(g)(6) of SMCRA. In view of that option, should there be any 
restrictions on how the term ``adjacent'' is used for Priority 3 AMD 
problems? Should permanent facility construction and perpetual 
treatment costs associated with AMD from a Priority 2 mine opening or 
highwall be elevated to Priority 2 status? Some facilities and 
perpetual treatment costs can run into hundreds of thousands, if not 
millions, of dollars. Should the expenditures for large acreages of 
Priority 3 subsidence be elevated in priority because they are 
geographically contiguous to a small Priority 2 subsidence event, 
regardless of cost? What about small Priority 2 tipples connected to 
large Priority 3 refuse piles? Finally, because the 2006 amendments 
removed the 30% cap in water supply replacement expenditures under 
section 403(b), should adversely affected water supplies be elevated in 
priority when adjacent to other kinds of Priority 1 or 2 reclamation 
sites? We would like to receive comments on whether there should be any 
limitations, monetary or otherwise, on the kinds of AML programs that 
should be addressed under the term ``adjacent.''
    The proposed paragraph (b) of Sec.  874.13 incorporates the 2006 
amendments' complete revision of section 402(g)(7) of SMCRA. 
Previously, section 402(g)(7) contained the requirements for developing 
hydrologic unit plans consistent with the AMD set-aside trust provision 
of section 402(g)(6). The amended language of section 402(g)(7) now 
addresses how Priority 3 work can be undertaken; it states:

    In complying with the priorities described in section 403(a), 
any State or Indian tribe may use amounts available in grants made 
annually to the State or tribe under paragraphs (1) and (5) for the 
reclamation of eligible land and water described in section 
403(a)(3) before the completion of reclamation projects under 
paragraphs (1) and (2) of section 403(a) only if the expenditure of 
funds for the reclamation is done in conjunction with the 
expenditure before, on, or after the date of enactment of the 
Surface Mining Control and Reclamation Act Amendments of 2006 of 
funds for reclamation projects under paragraphs (1) and (2) of 
section 403(a).

30 U.S.C. 1232(g)(7)

    In effect, section 402(g)(7) prevents uncertified States or Indian 
tribes from using State or Tribal share funds, as discussed in section 
402(g)(1) of SMCRA, and Sec. Sec.  872.14 and 872.17, and historic coal 
funds, as discussed in section 402(g)(5) of SMCRA and Sec.  872.21, for 
the reclamation of Priority 3 lands and water before they have 
completed their Priority 1 and 2 reclamation projects. However, section 
402(g)(7) does provide an exception that allows State or Tribal share 
funds and historic coal funds to be used for Priority 3 lands and 
waters, but only if that reclamation is done in conjunction with the 
expenditure of funds before, on, or after December 20, 2006, for 
Priority 1 and Priority 2 reclamation.
    To be consistent with this section, we propose to apply section 
402(g)(7) of SMCRA in a manner that is slightly more restrictive than 
the way we have promoted Priority 3 land and water reclamation in the 
past. Our longstanding approach, based on the first sentence of section 
403(a), has been that reclamation programs can reclaim Priority 3 land 
and water projects before the completion of all Priority 1 and 2 
projects as long as the overall reclamation program generally reflects 
the priorities in section 403(a) of SMCRA. The Department of the 
Interior initially expressed this approach in a May 18, 1982, 
memorandum by the Office of the Solicitor that recognized the 
discretion program officials have in selecting projects based upon a 
wide range of qualitative and quantitative data. This memorandum also 
concluded that the States and the Secretary have ample authority and 
rationale to select projects based upon such factors as are outlined in 
Sec.  874.13 and to fund lower priority projects together with higher 
priority projects as long as the total program reflects the achievement 
of objectives in section 403(a) of SMCRA.
    Through the life of the AML program, we published and maintained an 
advisory document titled ``Final Guidelines for Reclamation Programs 
and Projects'' (see latest version 66 FR 31250, June 11, 2001). These 
guidelines direct that, generally, reclamation of lower priority 
projects should not begin until all known higher priority projects have 
been completed, are in the process of being reclaimed, or have been 
approved for funding by the Secretary. See 66 FR 31252, (``Reclamation 
Site Ranking''). Our guidance further explains that lower priority 
projects or contiguous work may be undertaken in conjunction with high 
priority projects, but it sets forth factors to weigh to determine if 
the lower priority projects should be considered over higher priority 
projects. Examples of these factors include: When a landowner consents 
to participate in post reclamation maintenance activities of the area; 
when the reclamation provides many benefits to the landowner and those 
benefits have a greater cumulative value than other projects; and when 
reclamation provides offsite public benefits. Id. We also promote the 
reclamation of lower priority lands and waters when it is cost 
effective. See 66 FR 31253 (``Reclamation Extent''). To date, we have 
encouraged stand-alone Priority 3 projects and Priority 3 work that is 
contiguous with higher priority work based upon the efficiencies gained 
for the program and the environmental and community benefits.
    To be consistent with the revised language of section 402(g)(7) of 
SMCRA, we are proposing to replace the existing language under Sec.  
874.13(b) with language that specifies that this provision applies to 
uncertified States and Indian tribes who seek to use State or Tribal 
share funds and historic coal funds for Priority 3 reclamation. 
However, based on section 402(g)(7) and our past experience, this 
proposed provision also requires uncertified States and Indian tribes 
to meet one of two conditions before being allowed to reclaim Priority 
3 sites.
    Under the first condition, described in proposed Sec.  
874.13(b)(1), uncertified

[[Page 35231]]

States and Indian tribes may only complete stand alone Priority 3 
projects after the State or Indian tribe has completed all Priority 1 
and 2 reclamation projects in its jurisdiction. We believe this 
proposal to be slightly more restrictive than the existing regulations 
because, if finalized, it would prohibit stand-alone Priority 3 
projects until all known Priority 1 or 2 sites have been completed, 
unless the uncertified State or Indian tribe meets the conditions 
detailed in proposed Sec.  874.13(b)(2).
    Proposed Sec.  874.13(b)(2) allows uncertified States and Indian 
tribes to reclaim Priority 3 lands and waters before all higher 
priority sites are reclaimed, as long as they are being done ``in 
conjunction with'' a Priority 1 or Priority 2 project. Specifically, 
proposed Sec.  874.13(b)(2) allows you to expend State or Tribal share 
and historic coal funds for the reclamation of Priority 3 lands and 
water that are related to past, present, or future projects, but only 
if you determine that such expenditures would or would have (i) 
facilitate(d) the Priority 1 or Priority 2 reclamation or, (ii) 
provide(d) reasonable savings at the time of the project towards the 
objective of reclaiming all Priority 3 land and water problems. We are 
proposing these two conditions because they will promote Priority 3 
reclamation while emphasizing the elevated Priority 1 and 2 reclamation 
objectives contained in the 2006 amendments. Under our proposed 
revision, program officials could not only use State and Tribal share 
and historic coal funds for Priority 3 sites that would aid in the 
reclamation of higher priority sites or would be cost efficient to do 
so, but they could also revisit each completed project and determine if 
there are Priority 3 lands and waters related to those past projects 
that still need to be reclaimed. These Priority 3 sites could then be 
reclaimed before the all Priority 1 and 2 problems have been addressed.
    While we anticipate that most Priority 3 lands that fall within 
Sec.  874.13(b)(2)(i) would have been addressed during the initial 
project, there may be areas where, at the time, the efficiencies of 
combined contracting or other cost saving factors would have satisfied 
Sec.  874.13(b)(2)(ii). Reasons why such lands may not have been 
incorporated in the initial project could include past landowner 
restrictions, shortage of available grant funding, staffing and 
administrative considerations, or the potential for remining.
    We believe that the language of Sec.  874.13(b)(2), as proposed, 
does not specifically preclude allowing Priority 3 work as a separate 
phase of construction within a Priority 1 or 2 project. However, 
Priority 3 work that is undertaken as a separate phase may not realize 
the administrative and contracting efficiencies of combined design and 
development, one-time mobilization and demobilization costs, or reduced 
unit costs that can be attributed to larger projects. These types of 
factors would be central to an analysis to determine whether there are 
reasonable savings under proposed Sec.  874.13(b)(2)(ii). We welcome 
comments on the effect of our proposed language on construction project 
phasing.
    As described above, the 2006 amendments substantially elevated and 
redirected resources towards the uncertified programs with the most 
hazardous--Priority 1 and 2--coal sites. This was accomplished through 
the mandatory distributions of State or Tribal share funds and historic 
coal funds, the reallocation of the section 402(g)(1) funding away from 
certified programs, and raising the minimum program make up funding 
level. 30 U.S.C. 1231(f)(3)(B), 1232(g)(1)(A), 1232(g)(1)(B), 
1232(g)(5), 1232(g)(8)(A), and 1240a(h)(4). In addition, the 2006 
amendments strengthened our responsibilities towards oversight of 
reclamation by obliging us to ensure that uncertified States and Indian 
tribes strictly comply with the priorities in section 403, by requiring 
us to review amendments to the AML inventory, by granting us the 
authority to unilaterally certify the completion of coal problems, and 
by restricting the use of prior balance replacement funds to address 
coal problems under section 403. 30 U.S.C. 1232(g)(2), 1233(c), 
1240a(a)(A), and 1240a(h)(1)(D)(ii).
    Given these new funding directives and our enhanced oversight 
responsibilities, we believe that limiting the number and types of 
Priority 3 projects that could be addressed under the ``in conjunction 
with'' provision is consistent with the intent of SMCRA, as revised by 
the 2006 amendments. To ensure that high priority site reclamation is 
promoted while we observe our long term commitment to eliminate all 
coal problems, we are proposing that you may use State or Tribal share 
funds or historic coal funds to reclaim Priority 3 sites even if you 
have not completed all Priority 1 and Priority 2 problems if the 
reclamation of those sites facilitates the reclamation of Priority 1 
and 2 problems or if you determine that there would be reasonable 
savings towards the objective of reclaiming all Priority 3 land and 
water problems.
    Generally, we would expect reasonable savings to be composed of a 
number of reduced expenditures in project development and construction, 
such as reduced design costs, reduced mobilization and demobilization 
charges, reduced unit prices, and administrative efficiencies, and that 
as the Priority 3 work increases in size or cost, the amount of 
potential savings would diminish. As part of our oversight and 
inventory management responsibilities, we will review individual State 
or Indian tribe determinations under Sec.  874.13(b)(2)(ii) that the 
reclamation of specific Priority 3 lands and waters is appropriate 
because they facilitate reclamation or provide reasonable savings 
towards the long-term objective of reclaiming all coal problems.
    We do not believe that our efforts to define the use of ``in 
conjunction with'' will significantly reduce the types of Priority 3 
projects that are reclaimed. While our proposed Sec.  874.13(b)(2) is 
intended to address Priority 3 reclamation undertaken as part of the 
process of developing and undertaking traditional reclamation projects 
under 403(a) of SMCRA, there are a number of activities that are 
performed by reclamation programs to address eligible lands and waters 
that are not subject to this provision, including water supply 
restoration, the 30 percent set-aside for AMD projects, the use of 
prior balance replacement funds, projects authorized under the AML 
Enhancement Rule, Appalachian Clean Streams projects, Watershed 
Cooperative Agreement projects, and any AML sites reclaimed under the 
remining incentives provided under section 415 of SMCRA, as revised by 
the 2006 amendments. These activities primarily address Priority 3 
lands and waters but are not affected by the limitation contained in 
Sec.  874.13(b)(2) for a variety of reasons. Water supply restoration 
projects and the AMD 30 percent set-aside program are authorized by 
sections 403(b) and 402(g)(6)(A) of SMCRA, respectively. 30 U.S.C. 
1233(b) and 1232(g)(6)(A). Prior balance replacement funds may be used 
for Priority 3 reclamation because they are specifically directed to be 
used for the purposes of section 403 of SMCRA, as provided in Sec.  
872.31. Although funded from the Federal expense share of the Fund, 
Appalachian Clean Streams projects and Watershed Cooperative Agreement 
projects are authorized through specific Congressional appropriations. 
AML Enhancement Rule projects were established through a specific 
rulemaking process where the Secretary used the powers and authority

[[Page 35232]]

under section 413(a) of SMCRA to provide States and Indian tribes with 
the authority to reduce project costs to the maximum extent practicable 
on abandoned mine sites which have deposits of coal or coal refuse 
remaining. 30 U.S.C. 1242(a); see also 64 FR 7470. Qualifying sites are 
specifically provided for as an exception to SMCRA under section 528. 
30 U.S.C. 1278. Neither section 413(a) nor section 528 was revised by 
the 2006 amendments, and we do not believe anything in the 2006 
amendments would affect the existing AML Enhancement Rule. Finally, 
many of the AML sites that may be reclaimed pursuant to the remining 
incentives contained in the 2006 amendments would be Priority 3 sites. 
These remining incentives are specifically authorized by section 415 of 
SMCRA, as amended. In conclusion, while our proposed requirements at 
Sec.  874.13(b)(2) would prevent the reclamation of some stand-alone 
Priority 3 sites previously undertaken as part of the traditional 
reclamation program, the programs discussed above would still offer 
many Priority 3 land and water reclamation opportunities.
    We welcome all comments on how these regulations should incorporate 
section 402(g)(7) of SMCRA, as amended. Specifically, we encourage 
comments on how we should promote the responsible reclamation of 
Priority 3 lands and waters while we advance the objectives of 
reclaiming all Priority 1 and 2 health and safety problems within the 
administrative boundaries of each approved AML program. We also 
encourage comments relating to the standards that we have proposed in 
Sec.  874.13(b) for Priority 3 sites reclaimed in conjunction with 
past, present, and future Priority 1 and 2 projects. We recognize there 
is a likelihood of confusion because ``conjunction'' typically means an 
``occurrence together in time and space.'' (Merriam-Webster Collegiate 
Dictionary, 11th ed. 2003). Thus, we would particularly like to 
encourage comments on how we can be consistent with the statutory 
standard while minimizing confusion.
    Our proposed Sec.  874.13(b)(2) contains only a general direction 
that qualifying Priority 3 work should either facilitate the higher 
priority work or represent reasonable savings towards the goal of 
reclaiming all Priority 3 coal problems. Thus, we are also seeking 
comments on possible alternatives or refinements to our proposal. We 
would like your opinion on whether Priority 3 work requested by a 
property owner as a condition of his or her agreement to provide 
written entry to address health and safety problems should fall within 
the scope of paragraph (b)(2)(i). What kinds of activities do you think 
should be considered as facilitators of higher priority reclamation? 
Also, what kinds of cost savings should be considered as ``reasonable'' 
for our proposed Sec.  874.13(b)(2)(ii)? Should there be any 
restrictions on the types of Priority 3 problems or overall cost under 
Sec.  874.13(b)(2)? Given that States and Indian tribes can set aside 
up to 30 percent of State share or Tribal share funds and historic coal 
funds for AMD trusts under section 402(g)(6) of SMCRA, should there be 
any restrictions on the expenditure of moneys from the Fund for 
Priority 3 AMD projects when applying the ``in conjunction with'' 
provision? Should the construction of permanent facilities with 
perpetual treatment costs qualify? Should the expenditures for Priority 
3 reclamation be allowed to exceed the cost of reclaiming the Priority 
1 and 2 problems? Should there be any physical or administrative 
barriers, such as watershed or mine permit boundaries, property lines, 
or environmental constraints associated with Sec.  874.13(b)(2)?
Water Supply Restoration (Sec.  874.14)
    We propose to change the title of this section from ``Utilities and 
other facilities'' to ``Water supply restoration'' in order to reflect 
more accurately the purpose of this section and the changes made by the 
2006 amendments to section 403(b) of SMCRA. The existing title of this 
section, ``Utilities and other facilities,'' related to former section 
403(a)(4) of SMCRA, which made certain public facilities eligible for 
reclamation. This was sometimes referred to as ``Priority 4'' 
reclamation. The 2006 amendments removed section 403(a)(4) and retitled 
section 403(b) ``Water Supply Restoration.'' We are changing this 
section in a similar fashion.
    We note that the language similar to ``utilities and other 
facilities'' is also used to describe some noncoal restoration work 
that may be completed by certified States and Indian tribes under Sec.  
875.15(c). We do not propose to change the language of Sec.  875.15 
because the scope of that section involves certified States and Indian 
tribes using funds that are not subject to section 403(b) for 
utilities, roads, and other community infrastructure. Unlike Sec.  
875.15, however, this section only applies to water supplies adversely 
affected by coal mining in uncertified States and Indian tribes.
    We are proposing to revise paragraph (a) of this section, 
consistent with the 2006 amendments, to remove the 30 percent 
limitation on grant funds that States and Indian tribes may expend on 
water supply restoration. Beginning with grants awarded on or after 
December 20, 2006, uncertified States and Indian tribes may expend any 
or all of their grants from State or Tribal share funds, historic coal 
funds, and prior balance replacement funds for water supply 
restoration. Prior balance replacement funds are eligible for such 
expenditures because they are specifically directed to be used for the 
purposes of section 403 of SMCRA. States and Indian tribes may use 
minimum program makeup funding for water supply projects as long as 
they represent Priority 1 or 2 problems. Expenditures for water supply 
restoration are an optional feature of the reclamation program, and 
uncertified States and Indian tribes can decide to what extent they 
want to expend funds for water supply projects. The remainder of the 
existing section, including eligibility of projects, would remain the 
same.
Contractor Eligibility (Sec.  874.16)
    We are proposing revisions to Sec.  874.16 to reflect our proposed 
changes to the funding applicability section in Sec.  874.11. Our 
proposed change would impose the requirement that successful bidders 
for an AML contract must also be eligible under Sec. Sec.  773.12, 
773.13, and 773.14 to receive a permit or be provisionally issued a 
permit to conduct surface coal mining operations at the time of the 
contract award to conduct reclamation projects using moneys from the 
Fund, prior balance replacement funds provided to uncertified States 
and Indian tribes under Sec.  872.29, or a combination of both types of 
AML funds.

Part 875--Certification and Noncoal Reclamation

    We propose to amend the title of this Part to more accurately 
describe the subject matter covered by these regulatons. Also, our 
proposed revisions to this Part contain an addition of a new definition 
section at Sec.  875.5 and changes to existing Sec. Sec.  875.11 
(Applicability), 875.12 (Eligible lands and water prior to 
certification), 875.13 (Certification of completion of coal sites), 
875.14 (Eligible lands and water subsequent to certification), 875.16 
(Exclusion of certain noncoal reclamation sites), and 875.20 
(Contractor eligibility). These revisions propose changes to fund 
applicability, certification procedures, and how certified States and 
Indian tribes must address remaining or newly discovered coal problems. 
One

[[Page 35233]]

substantive change we propose is to acknowledge that this Part may not 
apply to certified States and Indian tribes when they expend certified 
in lieu funds and prior balance replacement funds received under 
section 411(h) of SMCRA. Consistent with revised Part 884, certified 
States and Indian tribes may choose to modify their reclamation plan to 
expend funding on activities not related to the reclamation of noncoal 
mine problems, or to undertake noncoal reclamation outside the 
framework of this Part.
    In addition to requesting your comments on the sections discussed 
below, we are also seeking comments on any other sections within this 
Part that you may feel are affected by our proposed changes or the 2006 
amendments. For example, we are not revising any of the language in 
Sec.  875.15 (Reclamation priorities for noncoal program) because we 
believe that fund applicability requirements in Part 872 along with any 
reclamation plan revisions completed under Part 884 will properly 
define how the section applies to a project conducted by a certified 
program under this Part. In addition, we are making revisions to Sec.  
875.20 (Contractor eligibility) to make clear that contractor 
eligibility requirements for certified States and tribes only apply to 
coal reclamation work. We did not revise this section to address the 
applicability of certified in lieu or prior balance replacement funds 
received by certified States and Indian tribes because we believe that 
matter is addressed best through revisions to the reclamation plan 
under Part 884. We are interested in any comments you may have 
concerning that approach.
Definitions (Sec.  875.5)
    We propose to add a new section to Part 875 to include the 
definition of the term ``Reclamation plan or State reclamation plan.'' 
The definition is identical to that in proposed Sec.  872.5.
Information Collection (Sec.  875.10)
    We propose only to reword this paragraph using plain English and to 
use the current format approved by the OMB. It describes OMB's approval 
of information collections in Part 875, our use of that information, 
and the estimated reporting burden associated with those collections.
Applicability (Sec.  875.11)
    Except in connection with the sources of funding that may be used 
for reclamation, our proposed revisions to this section make minimal 
changes for uncertified States and Indian tribes with approved 
reclamation plans. Generally, our proposed changes relate to the use of 
certified in lieu funds and prior balance replacement funds by 
certified State and Indian tribes because, as explained in Part 872 
(Moneys Available to Eligible States and Indian Tribes) and Part 884 
(State Reclamation Plans), certified States are not required to spend 
these funds according to Part 875.
    In paragraph (a) we are proposing that when you, an uncertified 
State or Indian tribe, expend State share funds, Tribal share funds, 
and historic coal funds for noncoal reclamation, you are subject to the 
limitations on the use of those funds contained in this Part and in 
proposed Sec. Sec.  872.16, 872.19, or 872.23. This portion of our 
proposal does not change the existing requirements and is consistent 
with section 409 of SMCRA, which requires that moneys provided by 
sections 402(g)(1) and (g)(5) of SMCRA may be used to address high 
priority noncoal hazards at the request of the Governor or governing 
body of an Indian tribe. 30 U.S.C. 1239(b) and (c). We did not include 
minimum program makeup funds or prior balance replacement funds as a 
source of moneys that uncertified States may use for noncoal 
reclamation under this Part for the reasons discussed in the preamble 
to proposed Sec. Sec.  872.28 and 872.31, respectively.
    In paragraph (b) we are proposing that you, a certified State or 
Indian tribe, may use prior balance replacement funds provided to you 
under Sec.  872.29 and certified in lieu funds provided to you under 
Sec.  872.32 to address eligible coal problems to maintain 
certification as required by Sec. Sec.  875.13 and 875.14.
    As discussed in the preamble to proposed Sec.  872.34, before 
proposing this regulation, we also considered an alternative where Part 
875 requirements would apply to certified in lieu funds received under 
Sec.  872.32, but not to prior balance replacement funds unless so 
directed by the State legislature or Tribal council. Under this 
alternative approach, certified States and Indian tribes would continue 
to conduct noncoal reclamation under this Part and would be mandated to 
use certified in lieu funds for the reclamation of lands or water 
affected by the mining of minerals and materials other than coal. 
Reclamation programs would be required to follow the eligibility 
requirements of Sec.  875.14, the priorities of Sec.  875.15, the 
requirements related to land acquisition in Sec.  875.17, the 
contractor eligibility provision in Sec.  875.20, and the limited 
liability aspects of Sec.  875.19. Overall, this alternative approach 
would require that the certified States and Indian tribes use their 
certified in lieu funds to address mining related impacts inside their 
boundaries. We specifically request comments on this alternative 
approach.
Eligible Lands and Water Prior to Certification (Sec.  875.12)
    We are proposing minor revisions to Sec.  875.12. We are revising 
the title using plain English. In addition, we are revising Sec.  
875.12(c) so that the word ``monies'' will become ``moneys.'' Finally, 
we are removing the reference to former Part 888. None of these 
revisions result in substantive changes in the application of the 
paragraph.
Certification of Completion of Coal Sites (Sec.  875.13)
    We are proposing some minor changes to paragraph (a) of this 
section that do not result in any change in the authority or scope of 
the existing regulation. We are revising the introductory paragraph to 
create a lead sentence that clearly states that certification is for 
the completion of coal sites, and to reword it using plain English. In 
Sec.  875.13(a)(1), we are eliminating the reference to Priorities 4 
and 5 of section 403(a) of SMCRA because the 2006 amendments removed 
Priorities 4 and 5. 30 U.S.C. 1233(a). No changes were made in 
paragraphs (a)(2) and (a)(3) of this section.
    We are proposing to add a new paragraph (d) under Sec.  875.13 that 
would allow us, on behalf of the Secretary of the Interior, to make the 
certification of completion of coal reclamation projects without a 
certification request from the Governor of a State or the equivalent 
head of an Indian tribe. This paragraph is needed in order to be 
consistent with section 411(a)(2) of SMCRA, as revised by the 2006 
amendments. 30 U.S.C. 1240a(a)(2). Our proposed paragraph (d) requires 
a determination by the Director of OSM based upon the information in 
the AML inventory that all coal reclamation projects in your State or 
Tribal jurisdiction, which meet the priorities described in Sec.  
874.13(a), have been completed. We also propose, consistent with 
section 411(a) of SMCRA, to require an opportunity for public comment, 
announced through the Federal Register, before we certify a State or 
Indian tribe.
    Furthermore, we believe that we have the authority to suspend or 
remove certification from a State or Indian tribe that is unable or 
unwilling to address coal problems once they are known to exist after 
certification. At this time we have not proposed specific language to 
set forth a certification suspension or removal process. However, we 
request comment on whether we should add a

[[Page 35234]]

suspension or removal process in these regulations, and if so, where 
such a provision should be added and what it should contain.
Eligible Lands and Water Subsequent to Certification (Sec.  875.14)
    We are proposing revisions to the introductory paragraph of Sec.  
875.14(a) and paragraph (a)(1) to clarify eligibility dates for noncoal 
reclamation performed on Federal lands, waters, and facilities under 
the jurisdiction of the Forest Service and the Bureau of Land 
Management. We are also revising the title and the section using plain 
English. There is no substantive change in the applicability or scope 
of these paragraphs.
    We are proposing Sec.  875.14(b) to clarify the timing of 
reclamation efforts and the sources of funds that may be used to 
address coal problems after certification. Under existing Sec.  
875.14(b), you, the certified State or Indian tribe, are required to 
address coal problems no later than the next grant cycle, subject to 
the availability of funds distributed. Under our proposed changes you 
must submit to us a plan that describes the approach and funding 
sources that you will use to address any coal problems in a timely 
manner. While we are not requiring you to use certified in lieu or 
prior balance replacement funds, we anticipate that those sources will 
most likely be identified in any plans submitted to us. Plans submitted 
to us will be reviewed to ensure they represent a timely approach to 
reclamation of existing coal problems, and we will monitor your 
progress towards completion of the plan. We are retaining the 
requirement that any coal reclamation projects, regardless of funding 
source, must conform to sections 401 through 410 of SMCRA. 30 U.S.C. 
1231-1240.
    We are interested in receiving comments on our proposed revisions 
to this section. We would like to receive comments on how we might 
review any plans submitted and how we might make determinations that 
the plans represent timely approaches to addressing remaining coal 
reclamation. We would also like comments on whether we should require 
the plans submitted under this section to be reviewed and processed as 
part of a formal reclamation plan amendment under Sec.  884.15.
Exclusion of Certain Noncoal Reclamation Sites (Sec.  875.16)
    We are proposing revisions to Sec.  875.16 to exclude you, an 
uncertified State or Indian tribe, from expending moneys from the Fund 
or prior balance replacement funds provided under Sec.  872.29 for the 
reclamation of sites and areas designated for remedial action pursuant 
to the Uranium Mill Tailings Radiation Control Act of 1978, 42 U.S.C. 
7901 et seq., or that have been listed for remedial action pursuant to 
the Comprehensive Environmental Response Compensation and Liability Act 
of 1980, 42 U.S.C. 9601 et seq. Our proposal is to maintain consistency 
with the existing prohibitions on the use of moneys from the Fund and 
the statutory restrictions on the use of prior balance replacement 
funds as explained in the preamble to Sec.  872.29. Certified States 
and Indian tribes may use prior balance replacement funds or certified 
in lieu funds for these purposes provided they comply with the general 
statutory and regulatory restrictions of those funds. We are also 
rewording this section using plain English. We invite you to comment on 
whether this paragraph is still needed.
Contractor Eligibility (Sec.  875.20)
    We are proposing revisions to Sec.  875.20 for clarity and to limit 
its applicability. We removed the phrase ``To receive AML funds for 
noncoal reclamation'' to clarify that prior balance replacement funds 
received by uncertified States and Indian tribes are also subject to 
the restrictions of this section. Contracts by certified States and 
Indian tribes are also subject to the restrictions of this section when 
used to address coal problems as necessary to maintain certification. 
However, this section is not intended to apply to use of section 411(h) 
funds by certified States and Indian Tribes for any purpose other than 
coal AML reclamation.

Part 876--Acid Mine Drainage Treatment and Abatement Program

    Along with some minor changes, we are proposing three major changes 
to this Part consistent with the 2006 amendments. First, to comply with 
amended section 402(g)(6)(A), we propose to raise the previous 10% 
limitation on grants for AMD abatement and treatment set-asides to 30% 
of annual State or Tribal share and historic coal funds. Second, we 
propose to specify the requirements for an uncertified State or Indian 
tribe to establish an AMD abatement and treatment fund. Third, we 
propose to eliminate the requirements for a State or Indian tribe to 
prepare AMD abatement and treatment plans and for those plans to be 
approved by the Director of OSM.
    The decision by an uncertified State or Indian tribe to establish 
an AMD abatement and treatment fund, or to deposit moneys into an 
established fund, is optional. Section 403(a) of SMCRA established 
health and safety coal AML problems as the top two priorities for 
reclamation programs. SMCRA, as revised by the 2006 amendments, 
provides uncertified States and Indian tribes with a mechanism for 
abating AMD while working on high priority reclamation projects, if the 
water resources are adjacent to a high priority problem. 30 U.S.C. 
1233(a)(1)(B)(ii) and (a)(2)(B)(ii). We are seeking comments on this 
section and under Sec.  874.13 as to whether AMD abatement and 
treatment should be included in the types of Priority 3 reclamation 
projects subject to the ``adjacent to'' and ``in conjunction with'' 
provisions discussed in Sec.  874.13.
Information Collection (Sec.  876.10)
    We propose only to reword this paragraph using plain English and to 
use the current format approved by the OMB. It describes OMB's approval 
of information collections in Part 876, our use of that information, 
and the estimated reporting burden associated with those collections.
Eligibility (Sec.  876.12)
    In the first sentence of paragraph (a), we propose to delete the 
reference to the three year time limit for grant expenditures. The 2006 
amendments provide for different time limits based on the FY in which 
the funds were distributed. Detailing the time restrictions in this 
Part is unnecessary because the limits are set out in section 
402(g)(1)(D) of SMCRA and Sec.  886.14. Also in this sentence, we 
propose to raise the existing 10% cap on deposits to AMD abatement and 
treatment funds to 30%, as required by the 2006 amendments, and to make 
minor revisions using plain English. We have proposed to delete 
paragraph (a)(1) because it referred to the future reclamation set-
aside fund, which is addressed in proposed Part 873. Therefore, we have 
moved the requirement that States and Indian tribes create the AMD 
funds under their State or Tribal law, which is located in existing 
paragraph (a)(2), to the text of the last sentence of proposed Sec.  
876.13(a).
    In addition, we have revised this subsection to clarify that 
section 402(g)(6) of SMCRA establishes that the only moneys from the 
Fund that you may set aside for AMD treatment under this section are 
those that you receive as State or Tribal share funds under section 
402(g)(1) of SMCRA, Sec. Sec.  872.14 and 872.17, or as historic coal 
funds under section 402(g)(5) of SMCRA, Sec.  872.21. Therefore, the 
funds you

[[Page 35235]]

receive as minimum program make up funds under Sec.  872.26 and prior 
balance replacement funds under Sec.  872.29, may not be set aside 
under this Part. As indicated in our discussion of Sec.  872.29, we 
believe that section 411(h)(1) of SMCRA clearly requires uncertified 
States and Indian tribes to use prior balance replacement funds only 
for the purposes of section 403 of SMCRA. We have also explained that 
generally up to 10% of the funds we awarded to you before December 20, 
2006, may be deposited into an AMD abatement and treatment fund.
    We have proposed to eliminate former paragraph (b), because it 
required States and Indian tribes to spend their AMD abatement and 
treatment funds according to a plan approved by the Director. Under the 
2006 amendments, the requirements to prepare a plan, consult with the 
Natural Resources Conservation Service, or get the Director's approval 
were eliminated, so paragraph (b) is no longer needed.
    We propose adding a new paragraph (b) that requires an uncertified 
State or Indian tribe to establish a special fund account providing for 
the earning of interest as required by section 402(g)(6)(A) of SMCRA. 
U.S.C. 1232(g)(6)(A). This AMD fund must specify that moneys in it may 
only be used for the abatement of the causes and the treatment of the 
effects of AMD in a comprehensive manner. We used the modifier 
``comprehensive'' in the regulatory text of proposed paragraph (b)(2) 
because we propose to delete Sec.  876.13 where ``comprehensive 
abatement of the causes and treatment of the effects of acid mine 
drainage'' was previously contained.
    Also, paragraph (b)(2) requires AMD abatement and treatment 
projects to occur within ``qualified hydrologic units.'' We propose to 
define ``qualified hydrologic unit'' in new paragraph (c). We removed 
this definition from existing Sec.  870.5 of this chapter and added it 
to this section for clarity and ease of use because the phrase is used 
only in this section. In addition, we reworded the definition slightly 
in an attempt to make it easier to understand. We also propose to add a 
new paragraph (d) providing that deposits into the State or Tribal AMD 
accounts are considered State or Indian tribal moneys.
Plan Content (Sec.  876.13)
    We propose to remove this section because the 2006 amendments 
eliminated the previous requirement for States and Indian tribes to 
prepare AMD abatement and treatment plans.
Plan Approval (Sec.  876.14)
    We also propose to remove this section because the 2006 amendments 
eliminated the previous requirement for the Secretary to approve AMD 
abatement and treatment plans that were prepared by the States and 
Indian tribes.

Part 879--Acquisition, Management, and Disposition of Lands and Water

Definitions (Sec.  879.5)
    We propose to add a new section to Part 879 to include the 
definition of the term ``Reclamation plan or State reclamation plan.'' 
This definition is identical to the one contained in proposed Sec.  
872.5.
Information Collection (Sec.  879.10)
    We propose to remove Sec.  879.10 because the information 
collection requirements contained in Part 879 have been approved by OMB 
under the grants provisions for Part 886 and assigned clearance number 
1029-0059.
Land Eligible for Acquisition (Sec.  879.11)
    In addition to minor plain English revisions, this proposed section 
is modified to incorporate the appropriate references to prior balance 
replacement funds received by uncertified programs under section 
411(h)(1) of SMCRA and Sec.  872.29. We are proposing to revise Sec.  
879.11(a), (b), and (c) to remove references that restrict land 
acquisition to moneys that States and Indian tribes receive from the 
Fund because the prior balance replacement funds to uncertified States 
are derived from the Treasury. We believe that uncertified States and 
Indian tribes can use prior balance replacement funds to acquire land 
as part of their obligation under section 411(h)(1)(D)(ii) to use the 
moneys for the purposes described in section 403 of SMCRA.
    We are also proposing to move the definition of ``permanent 
facility'' from Sec.  870.5 to Sec.  879.11(a)(2) for clarity and ease 
of use because that term is primarily used in that section. In 
addition, we modified the definition slightly by changing the phrase 
``any manipulation or modification of the surface'' to ``any 
manipulation or modification of the site'' to accommodate the 
possibility that permanent facilities may not always be located on the 
surface of the land. Some permanent facilities may be located 
underground to control drainage or prevent AMD.
    While our revisions indicate that this proposed section only 
applies to uncertified States and Indian tribes and us, we are seeking 
comment on how this Part would be implemented under certified State and 
Indian tribal reclamation plans that commit certified in lieu funds, 
prior balance replacement funds, or both towards the reclamation of 
noncoal problems under the requirements of Part 875. For example, we 
would like to receive comments on how land acquisition, management, and 
disposal requirements would apply to certified programs using prior 
balance replacement funds or certified in lieu funds under Sec. Sec.  
872.29 and 872.32, respectively. Furthermore, we would like comments on 
how to handle any proceeds resulting for the disposition of property by 
certified States and Indian tribes when implementing Sec.  879.15.
Disposition of Reclaimed Land (Sec.  879.15)
    We propose to revise the language in existing Sec.  879.15 to 
remove the provision (h) which states that ``all moneys received from 
disposal of land under this Part shall be deposited in the appropriate 
Abandoned Mine Reclamation Fund in accordance with 30 CFR Part 872 of 
this chapter.'' We propose to replace this provision with the 
requirement that funds be returned to us, and that we will implement 
the requirements of Sec. Sec.  885.19 and 886.20. Proposed Sec. Sec.  
885.19 and 886.20 direct the disposition of unused funds, particularly 
those that are deobligated. This revision is necessary because States 
and Indian tribes may acquire land with moneys from the Fund or from 
the Treasury when implementing coal and noncoal reclamation under their 
approved reclamation plan.

Part 880--Mine Fire Control

Definitions (Sec.  880.5)
    We propose to add a new section to Part 880 to include the 
definition of the term ``Reclamation plan or State reclamation plan.'' 
This definition is identical to the one contained in proposed Sec.  
872.5.

Part 882--Reclamation on Private Land

Information Collection (Sec.  882.10)
    We propose only to reword this paragraph using plain English and to 
use the current format approved by the OMB. It describes OMB's approval 
of information collections in Part 882, our use of that information, 
and the estimated reporting burden associated with those collections.
Liens (Sec.  882.13)
    Consistent with the 2006 amendments' revision of section 408(a) of 
SMCRA, in paragraph (a)(1) we propose to remove the authority for

[[Page 35236]]

liens to be placed against property for the sole reason that the owners 
purchased the property after May 2, 1977. 30 U.S.C. 1238(a). We are 
also replacing the word ``shall'' with ``must'' in accordance with 
plain English.

Part 884--State Reclamation Plans

    With the exception of Sec.  884.11 and Sec.  884.17, both discussed 
specifically below, and the addition of a definitions section at Sec.  
884.5, we are not proposing any changes to the regulations under Part 
884. However, we do want to clarify and seek comments on the 
implementation of Part 884 provisions as they relate to the prior 
balance replacement funds and certified in lieu funds as discussed in 
the preamble to Part 872.
    As discussed under Part 872, prior balance replacement funds and 
certified in lieu funds provided under sections 411(h)(1) and 411(h)(2) 
of SMCRA, respectively, are Treasury funds and not moneys from the 
Fund. Consistent with the language of section 411(h)(1), we are 
proposing revisions to Part 872 that specify that 411(h)(1) funds are 
to be used by uncertified States and Tribes for the purposes of section 
403 of SMCRA and by certified States and Tribes for purposes 
established by the State legislature or Tribal council with priority 
given to the impacts of mineral development. In addition, our revised 
Part 872 proposes that certified programs may use certified in lieu 
funds for any purpose, even purposes not covered by this subchapter.
    In light of these changes to Part 872, we propose to clarify in 
Part 884 that the requirement to maintain an approved reclamation plan 
continues to apply to all States and Indian tribes, regardless of 
certification status under section 411(a) of SMCRA. This proposed 
clarification is consistent with section 405(h) of SMCRA which requires 
a State or Indian tribe to have an approved reclamation plan to receive 
a grant. 30 U.S.C. 1235(h).
    Because certified and uncertified States and Indian tribes will 
receive funding from different sources (the Fund and Treasury funds) 
and for different purposes, we expect that their reclamation plans may 
vary in scope and content. For example, prior balance replacement funds 
provided to uncertified States and Indian tribes must be used for the 
purposes of section 403 of SMCRA and are not subject to the Priority 3 
reclamation restrictions under section 402(g)(7). Because we have 
historically interpreted section 403 of SMCRA to mean that expenditures 
must ``reflect the * * * priorities in the order stated,'' the 
reclamation plans for uncertified programs may reflect different 
approaches to addressing Priority 3 problems with prior balance 
replacement funds.
    Under these proposed rules, the reclamation plans for certified 
programs will potentially show an even greater range of variability 
with little specificity required beyond undertaking the coal work 
necessary to maintain certification. In addition, if certified States 
and Indian tribes choose to conduct noncoal reclamation in accordance 
with Part 875 using certified in lieu funds or prior balance 
replacement funds, their reclamation plan must continue to provide all 
of the information and the assurances that are central to operating 
under the Part 875 umbrella. Only under these circumstances could State 
or Indian tribe noncoal reclamation activities continue to enjoy the 
protection of the limited liability provisions of Sec.  875.19 for 
those efforts.
    On the other hand, certified programs may also modify their 
reclamation plans to disclose how they would commit their grant funding 
to purposes other than noncoal reclamation in accordance with Part 875. 
In such instances, reclamation plans must contain the basic information 
needed for these programs to continue to receive grants, disclose how 
any existing or newly discovered coal problems will be addressed, and 
contain descriptions in sufficient detail to demonstrate that 
activities to be funded do not fall under the reclamation objectives of 
subchapter R.
    Because our proposed changes and clarifications under this and 
other Parts represent a change in application of reclamation plan 
requirements, we are seeking your comments on how we should implement 
the Part 884 requirements for certified and uncertified States and 
Indian tribes. We would like your comments on the types of information 
you believe that uncertified programs and certified programs should 
maintain in approved reclamation plans.
Definitions (Sec.  884.5)
    We propose to add a new section to Part 884 to include the 
definition of the term ``Reclamation plan or State reclamation plan.'' 
This definition is identical to the one contained in proposed Sec.  
872.5.
State Eligibility (Sec.  884.11)
    Existing Sec.  884.11 requires a State with eligible lands and 
water to submit a reclamation plan, which we cannot approve unless the 
State has an approved regulatory program that is consistent with other 
requirements of SMCRA and its implementing regulations except as 
discussed below. We are proposing several revisions to this section. 
First, we are updating the citation to the definition of ``eligible 
lands and water'' because we have proposed to move that definition from 
Sec.  870.5 to Sec.  700.5. In addition, we are adding the appropriate 
reference to Indian tribes because section 405(k) of SMCRA authorizes 
the Navajo, Hopi, and Crow Indian tribes to have an approved 
reclamation plan without having an approved regulatory program. 30 
U.S.C. 1235(k); see also 30 CFR Part 756.
    More substantively, we also want to use this proposed section to 
clarify how Tennessee and Missouri are affected by this requirement to 
have and maintain a reclamation plan in light of the statutory 
direction under section 402(g)(8) of SMCRA, as revised by the 2006 
amendments. As discussed in the preamble to Sec.  872.26, section 
402(g)(8)(A) of SMCRA provides that each State and Indian tribal 
reclamation program will receive a minimum amount of funding to address 
Priority 1 and 2 problems. Section 402(g)(8)(B) states that the minimum 
program make up funding will apply to Tennessee and Missouri 
``notwithstanding any other provision of law.'' 30 U.S.C. 
1232(g)(8)(B). Previously, we did not award reclamation grants to 
States when they no longer maintained an approved regulatory program 
under section 503 of SMCRA.
    We believe that the 2006 amendments now mandate that Tennessee and 
Missouri receive minimum program make up funding under section 
402(g)(8)(A), and that they should receive grants in spite of the 
section 405(c) requirement to have an approved State regulatory program 
under section 503 of SMCRA. We propose to clarify in Sec.  884.11 that 
so long as Tennessee and Missouri maintain an approved reclamation 
program, they may receive grants and modify their reclamation plans as 
long as the funds are necessary according to section 402(g)(8)(A) of 
SMCRA. We are interested in receiving your comments on our provisions 
and preamble discussion relative to providing section 402(g)(8) funding 
to Tennessee and Missouri.
Other Uses by Certified States and Indian Tribes (Sec.  884.17)
    The proposed revisions to paragraph (b) of this section change the 
grant application reference from Sec.  886.15 to Sec.  885.13 to be 
consistent with our proposal to create a new Part 885 for certified 
State and Indian tribal program

[[Page 35237]]

grant application procedures. Under our proposed regulations, certified 
States and Indian tribes have significant discretion in how to use 
certified in lieu or prior balance replacement funds. Therefore, we 
have changed the heading and wording of this section to reflect that 
greater discretion.

Part 885--Grants to Certified States and Indian Tribes

    We propose to add this new Part to provide different rules for 
Title IV grants to certified States and Indian tribes. Previously, 
Title IV grants to all States and Indian tribes were administered 
pursuant to Part 886. This Part recognizes that the 2006 amendments 
gave certified States and Indian tribes broad authority and discretion 
over grant activities and expenditures. In proposed Sec.  872.31, we 
propose that certified States and Indian tribes may spend prior balance 
replacement funds for the purposes established by the State legislature 
or the Tribal council with priority given to addressing the impacts of 
mineral development. In addition, Sec.  872.34 allows certified States 
and Indian tribes to spend certified in lieu funds for any purpose. 
Because of the wide flexibility and discretion given to States and 
Indian tribes in the 2006 amendments, we recognize that certified 
States and Indian tribes should not be required to comply with all the 
restrictions governing uncertified States and Indian tribes using AML 
funds under existing Part 886. Instead, we have drafted Part 885 to 
reflect OSM's limited role after coal reclamation is completed.
What does this Part do? (Sec.  885.1)
    This proposed section specifies that this Part provides procedures 
for grants to certified States and Indian tribes only. It includes a 
reference to OSM's guidance on reclamation programs (66 FR 31250), but 
provides it as an optional information source that certified States and 
Indian tribes may use if they choose to conduct reclamation projects.
Definitions (Sec.  885.5)
    We propose this section to include definitions of the terms 
``award,'' ``distribute,'' and ``reclamation plan or State reclamation 
plan.'' These definitions are identical to those in proposed Sec.  
872.5.
Information Collection (Sec.  885.10)
    The information collection section refers to all Title IV grants 
because we currently have an information collection clearance from OMB 
for existing Part 886, which covers all Title IV grants to all eligible 
certified and uncertified States and Indian tribes. We propose to 
change Part 886 by limiting it to grants to uncertified States and 
Indian tribes and to add new Part 885 for grants to certified States 
and Indian tribes. Though the information collection burden for grants 
will be split between the two Parts, the total burden will remain the 
same. We expect to notify OMB of the change and to reflect both Parts 
in future clearance actions.
Who is eligible for a grant? (Sec.  885.11)
    This proposed section establishes that only certified States or 
Indian tribes with an approved reclamation plan are eligible for grants 
under this Part. We believe that certified States and Indian tribes are 
still required by section 405 of SMCRA to have an approved reclamation 
plan in order to receive grants under SMCRA.
What can I use grant funds for? (Sec.  885.12)
    This proposed section describes how you, a certified State or 
Indian tribe, may use funds awarded in Title IV grants. Paragraph (a) 
proposes that grant funds awarded to certified States and Indian tribes 
can only be used for activities authorized in SMCRA and either included 
in your reclamation plan or described in your grant application. The 
description in the plan or application may be very general; for 
example, we expect that a certified State could amend its plan to 
specify that it will expend prior balance replacement funds for 
purposes established by the State legislature, with priority given to 
addressing the impacts of mineral development. In addition, we propose 
to include the option of describing activities in the grant application 
in order to provide you with a method to request funds under the new 
authorities in the 2006 amendments before your plan has been amended. 
This paragraph also allows you to choose to use these grant moneys to 
administer your program.
    Paragraph (b) provides that you may use grant funds in the ways 
established for each type of funding you receive. It describes the 
types of funds and refers you to the sections in Part 872 of this 
chapter describing how you may use the various types of funds. We 
expect most funding for certified States and Indian tribes to come from 
prior balance replacement funds and certified in lieu funds. We are 
including a provision in this paragraph to allow you to receive and use 
other moneys from the Fund because we recognize that you may still have 
State share or Tribal share funds that were distributed to you before 
October 1, 2007, but not awarded or expended. We do not plan to use the 
provision in section 401(f)(3)(B) of SMCRA that certified States and 
Indian tribes are no longer eligible to receive State or Tribal share 
funds after October 1, 2007, retroactively to take back funds that were 
already distributed to you before that date. These moneys from the Fund 
will still be subject to noncoal reclamation rules in Part 875.
    Paragraph (c) proposes that you may use grant funds for any costs 
determined to be allowable under OMB's cost principles.
What are the maximum grant amounts? (Sec.  885.13)
    Proposed paragraph (a) allows you to apply for a grant of any or 
all available funds at any time.
    Paragraph (b) states how we determine the amount of Title IV funds 
available to your State or Indian tribe, which is:
     The current annual AML distribution;
     Plus any funds distributed in previous years that were not 
awarded in a grant;
     Plus any funds distributed in previous years that were 
awarded but were subsequently deobligated from a grant; but
     Minus any funds already awarded to you this fiscal year.
    Paragraph (c) provides that current FY funds will not be available 
for award until after we complete the annual distribution, which will 
occur after we receive fee collections for coal produced in the final 
quarter of the previous fiscal year.
    Paragraph (d) requires us to give you current information on the 
amounts and types of funds that are available for award. In the 
immediate future, we expect to meet this requirement by providing a 
report similar to our current share balance report to you whenever you 
request it, but the report and the process will likely change over 
time. If you have suggestions about how we can better meet your 
financial information needs, we encourage you to comment.
How long is my grant? (Sec.  885.14)
    The performance period of your grant will be the period of time you 
request in your grant application. This proposed section does not 
establish any requirements for how long your grants should be or how 
many grants you may have open at any time. The proposed rule would 
allow you to change the pattern under Part 886 of annual awards of new 
grants with one year for administrative costs and three years for 
project costs. However, we are concerned about the administrative

[[Page 35238]]

burden of managing grants which are open for very long periods. We 
would appreciate your comments on this proposal. If we were to set a 
period limitation, would you prefer 3 years, 5 years, 10 years, or some 
other period?
How do I apply for a grant? (Sec.  885.15)
    In this section, we are proposing the application procedures for 
certified States and Indian tribes to receive Title IV grant awards. 
Our goal is to make these procedures as brief and simple as possible. 
We encourage your suggestions for further streamlining these 
procedures.
    Paragraph (a) mandates that you must use the application forms and 
procedures that we specify. We are not proposing to specify in these 
rules exactly what information we will require because the information 
we need is likely to evolve over time based upon changing laws and OMB 
requirements for Federal grants. Based on current grant requirements, 
we expect that your current application will include:
    (1) Cover page, the government-wide SF-424 form or an electronic 
equivalent, with a signature or electronic approval, and summary 
information about you and the proposed project, which we need to 
complete reports which we are required to make public on all assistance 
awards;
    (2) High-level budget breakdown separating the award into general 
categories or subaccounts, such as noncoal reclamation costs and non-
reclamation activity costs, which we need to enter the award into our 
accounting system and generate national information on Title IV program 
funds;
    (3) Narrative explanation of your program, which may be as brief as 
``carry out our approved reclamation plan''; and
    (4) Certifications and assurances required by law. You must certify 
that you meet legal requirements for lobbying, drug-free workplace, and 
debarment and suspension. You must assure us that you will comply with 
Federal laws and regulations such as nondiscrimination statutes.
    Paragraph (b) requires us to award your grant agreement as soon as 
practicable, but no later than 30 days after we receive your complete 
application. This timeline is reduced from 60 days in Part 886 for 
uncertified States and Indian tribes because we expect it will take us 
less time to process awards to you. Paragraph (c) proposes that if your 
application is not complete, we must notify you as soon as practicable 
of what additional information we need to process the award. Paragraph 
(d) proposes that you agree to perform the grant in accordance with 
SMCRA, all applicable Federal laws, including nondiscrimination 
statutes, and applicable Federal regulations, including those issued by 
OMB and Treasury.
After OSM approves my grant, what responsibilities do I have? (Sec.  
885.16)
    This proposed section covers the formal grant agreement and your 
operations under it. Paragraph (a) requires us to send you a written 
grant agreement when we award you a grant. The agreement sets out the 
terms of the award, such as the amount of funds and the grant beginning 
and ending dates. Paragraph (b) provides that you may subgrant 
functions and funds to other organizations, but that you will still be 
responsible for administration of the grant, including funds and 
reporting. Paragraph (c) provides that funds are obligated when we 
approve the grant agreement. It goes on to provide that you accept the 
grant by starting work or drawing down funds under it. This is a change 
from the procedure in the existing Part 886 that requires you to 
countersign the award and return it to us to document your acceptance 
of the grant.
    In paragraph (d), we are proposing that you are responsible for 
ensuring that all applicable laws, clearances, permits, or requirements 
are met before you expend funds. This provision is intended as a new 
requirement for certified States and Indian tribes conducting 
activities other than coal reclamation under our regulations in Part 
874 of this chapter. A certified State or Indian tribe has very wide 
discretion over the use of grant funds. When you conduct activities 
other than coal reclamation as necessary to maintain certification, you 
will decide which activities to fund. Because no Federal decision 
authorizing individual expenditures will be made, OSM will not conduct 
or approve NEPA or other clearance procedures for such activities. In 
contrast, paragraph (e) proposes that when you reclaim coal projects 
under our regulations in Part 874, we are jointly responsible with you 
for compliance with NEPA and any other laws, clearances, permits or 
requirements. This alternate provision is the same as the existing 
requirement for grants under Part 886. We believe that OSM has 
responsibility and involvement for compliance matters only for coal 
reclamation projects meeting our regulations in Part 874.
    Proposed paragraph (f) requires that public facilities constructed 
with grant funds should use fuel other than petroleum or natural gas to 
the extent technologically and economically feasible. This requirement 
is included in these rules because of Executive Order 12185, which is 
applicable to all Federal funds. Proposed paragraph (g) requires you 
not to commit or spend more funds than we have awarded. It provides 
that our award of a grant does not obligate us to award continuation 
grants or grant amendments providing more funds to cover cost overruns. 
This does not affect our annual mandatory distributions to you under 
section 411(h) of SMCRA.
How can my grant be amended? (Sec.  885.17)
    This proposed section describes the procedures to amend an existing 
grant. In paragraph (a), we define an amendment as a change to the 
terms or conditions of your grant agreement. We note that either you or 
we may initiate an amendment action. Paragraph (b) requires either you 
or us to inform the other in writing as soon as practicable when an 
amendment becomes necessary. Paragraph (c) requires that all 
requirements and procedures for grant amendments follow the ``Grants 
Common Rule.'' Among other matters, the Grants Common Rule includes 
provisions about what types of changes do and do not require our 
approval. Proposed paragraph (d) requires us to award your amendment 
within 20 days of receiving your request. This timeline is reduced from 
30 days in Part 886.
What audit, accounting, and administrative requirements must I meet? 
(Sec.  885.18)
    This proposed section requires you and us to follow standard 
procedures from OMB for grants management actions. We propose to adopt 
these procedures as they stand without adding any additional agency or 
program requirements. Paragraph (a) requires you to comply with OMB's 
audit requirements. Paragraph (b) requires you to follow the procedures 
in the ``Grants Common Rule'' for accounting, advance or reimbursement 
cash payments, records, and property.
What happens to unused funds from my grant? (Sec.  885.19)
    This proposed section describes how we will handle any funds 
awarded in grants but not expended. Unused funds must be taken out of 
the completed grant when we close it out. At your request, we will 
either award the funds in a new grant or in a grant amendment to 
increase funding in an existing grant. Because section 402(i)(4) of 
SMCRA provides that Treasury funds for payments under sections 
411(h)(1) and

[[Page 35239]]

(2) will remain available until expended, any distributed funds that 
you do not request or expend in an award will be reserved for use only 
by your State or Indian tribe until you do expend them. 30 U.S.C. 
1232(i)(4).
What must I report? (Sec.  885.20)
    This proposed section describes the information you must report to 
us about your grant. This proposal attempts to reduce reporting 
requirements to the minimum information we need in order to report the 
accomplishments and expenditures of the national Title IV program. We 
encourage you to comment with any suggestions for streamlining these 
procedures.
    Paragraph (a) mandates that you annually report to us about each of 
your grants. You must report performance information, telling us what 
your program has accomplished, and financial information, telling us 
what grant funds your program has spent. Proposed paragraph (b) 
requires you to report performance and financial information to us at 
the end of each grant so that we can close out the grant in our system. 
Proposed paragraph (c) requires you to maintain a current list in the 
AML inventory of any known AML problems. Paragraph (1) requires you, if 
you complete any mine reclamation projects, to report project 
accomplishments with grant funds in the AML inventory annually as 
required by section 403(c) of SMCRA. Paragraph (2) reflects the new 
requirement in section 403(c) that we must approve proposed amendments 
to the AML inventory made by States and Indian tribes. 30 U.S.C. 
1233(c). The provision is included here because it is possible that 
certified States and Indian tribes will need to make amendments to the 
AML inventory. In this paragraph, we are proposing to define 
``amendment'' to mean any new coal problem under section 403(a) or 
section 403(b) of SMCRA that is added to the system after December 20, 
2006. We do not intend for this provision to require our approval to 
add noncoal problems, but if you conduct projects under Part 875 you 
must enter them in the AML inventory.
What happens if I do not comply with applicable Federal law or the 
terms of my grant? (Sec.  885.21)
    This section proposes that if you fail to comply with your grant 
award or a Federal law or regulation, we will take appropriate action. 
The Grants Common Rule provides remedies for noncompliance including 
withholding cash payments, suspending or terminating the grant, and 
taking other legal actions. We must follow the procedures in the Grants 
Common Rule when we take any enforcement action.
When and how can my grant be terminated for convenience? (Sec.  885.22)
    This section proposes to allow either you or us to terminate the 
grant for convenience if that should become appropriate. We must follow 
the procedures in the Grants Common Rule.

Part 886--Reclamation Grants to Uncertified States and Indian Tribes

    This Part describes the procedures for you, the uncertified State 
or Indian tribe, and for us, OSM, to use in applying, awarding, 
managing, and closing grants authorized by SMCRA, as revised by the 
2006 amendments. Existing Part 886 covered all reclamation grants, but 
because we are proposing a new Part 885 for grants to certified States 
and Indian tribes, we propose to limit this Part to grants to 
uncertified States and Indian tribes only. Throughout this Part, we 
changed section titles to a question format in order to make it easier 
to use.
What does this Part do? (Sec.  886.1)
    In this section, we added ``uncertified'' to limit this Part to 
grants to uncertified States and Indian tribes. We updated the 
reference to ``OSM's Final Guidelines for Reclamation Programs and 
Projects'' from the 1980 version in the existing regulations to the 
current version published in 2001. 66 FR 31250. In addition, we 
reworded this section using plain English.
Authority (Sec.  886.3)
    We propose to delete this section because it is unnecessary and 
duplicative. Information about grant amounts is provided in proposed 
Sec.  886.13.
Definitions (Sec.  886.5)
    We propose to add a new section to Part 886 defining the terms 
``award,'' ``distribute,'' and ``reclamation plan or State reclamation 
plan.'' These definitions are identical to those in proposed Sec.  
872.5.
Information Collection (Sec.  886.10)
    We propose to reword this paragraph using plain English and to use 
the current format approved by OMB. It describes OMB's approval of 
information collections under Part 886, our use of that information, 
and the estimated reporting burden associated with those collections. 
In the future, these information collections will apply to fewer States 
and Indian tribes because of the new Part 885. We expect to notify OMB 
of the change and to reflect both Parts in future clearance actions.
Who is eligible for a grant? (Sec.  886.11)
    We added language to this paragraph to specify that this Part 
applies to grants to uncertified States and Indian tribes only. This 
Part will no longer apply to States and Indian tribes that have 
certified completion of coal reclamation under section 411(a) of SMCRA 
and will receive grants under the new Part 885.
What can I use grant funds for? (Sec.  886.12)
    We propose to reword existing paragraph (a) using plain English. We 
also propose to move the existing provision about OMB cost principles 
from this paragraph to new paragraph (e). In proposed paragraph (b), we 
reworded the provision about our reclamation grants. We also propose to 
move the existing provision about fuels to be used in public facilities 
to proposed Sec.  886.16(f), because it is more closely related to that 
section than to the main topic of this paragraph. We propose to add a 
new paragraph (c) to this section requiring you to use each type of 
funds according to the provisions in Part 872 of this chapter. The 
paragraph lists each type of funds that may be awarded in an AML grant 
to an uncertified State or Tribe and references the section number 
which governs its use. We propose to move existing paragraph (c) to 
paragraph (d), reword it using plain English, and correct a spelling 
error. Finally, we propose to add new paragraph (e) requiring you to 
use grant funds only for costs that are allowable according to OMB cost 
principles in Circular A-87. This expands the provision in existing 
paragraph (a) that costs for services and materials from other State, 
Federal and local agencies are governed by the cost principles. OMB 
cost principles must be used to determine the allowability of costs 
from all sources.
What are the maximum grant amounts? (Sec.  886.13)
    We propose to move existing Sec.  886.13 to proposed Sec.  886.14 
and to add this new section establishing and clarifying our current 
grant procedures. Proposed paragraph (a) allows you to apply for a 
grant of any or all available funds at any time. Paragraph (b) states 
how we determine the amount of funds available to your State or Tribe:
     The current annual AML distribution;
     Plus any funds distributed in previous years that were not 
awarded in a grant;

[[Page 35240]]

     Plus any funds distributed in previous years that were 
awarded but were subsequently deobligated from a grant; but
     Minus any funds already awarded to you this fiscal year.
    Proposed paragraph (c) provides that current FY funds will not be 
available for award until after we complete the annual distribution, 
which will occur after we receive fee collections for coal produced in 
the final quarter of the previous fiscal year. This provision reflects 
the change from appropriated funding to mandatory distributions as 
established in the 2006 amendments.
    Proposed paragraph (d) requires us to give you current information 
on the amounts and types of funds that are available for award. In the 
immediate future, we expect to meet this requirement by providing a 
report similar to our current share balance report to you whenever you 
request it, but the report and the process will likely change over 
time. If you have suggestions about how we can better meet your 
financial information needs, we encourage you to comment.
How long will my grant be? (Sec.  886.14)
    We propose to delete existing Sec.  886.14, ``Annual submission of 
budget information,'' which requires you to submit budget estimates and 
information for our use in preparing appropriation requests for 
reclamation grants. We no longer need estimates for appropriation 
requests. Instead we propose to recodify existing Sec.  886.13 as Sec.  
886.14 and revise it to reflect the way we are currently organizing AML 
grants. Since 1993, we have used the ``simplified'' grants concept to 
combine all AML grant funding in a single annual grant. Each grant 
normally lasts for three years. Each grant has subaccounts for 
different functions such as administration costs, coal reclamation 
projects, water projects, and emergency administration and project 
costs. These subaccounts remain open for different periods of time. 
Administrative accounts normally stay open for one year, so that only 
one account is active at any one time. Project cost accounts normally 
last for three years to allow for planning, design, construction, and 
completion of reclamation projects.
    Proposed Sec.  886.14(a) is the existing Sec.  886.13(b) reworded 
using plain English. Proposed Sec.  886.14(b) establishes three years 
as the normal grant period. Proposed Sec.  886.14(c) allows us to 
extend the grant period if you request it. We will normally extend a 
grant once for up to one additional year, following our established 
practice. We may allow more or longer extensions in special or unusual 
circumstances. Proposed Sec.  886.14(d), which establishes one year as 
the normal period for administrative accounts, is the existing Sec.  
886.13(a) reworded using plain English.
    We also propose to add Sec.  886.14(e) to allow us to lengthen the 
time period for new or amended AML grants that contain State share or 
Tribal share funds distributed during FY 2008, 2009, and 2010 for up to 
five years at your request. We proposed this revision to comply with 
the new provision in section 402(g)(1)(D) of SMCRA that requires that 
State share and Tribal share funds that are not expended within 3 years 
after the date of any grant award (except for grants during FY 2008, 
2009, and 2010 to the extent not expended within 5 years), will be 
transferred to historic coal share funds. 30 U.S.C. 1232(g)(1)(D).
    An alternative approach to this provision would be to award all 
grants in FY 2008-2010 for five years. However, we expect that in many 
cases uncertified States and Indian tribes will be able to expend the 
State or Tribal share funds within the normal three year grant period. 
If we were to automatically award all grants to five years, the 
administrative burden on you and us to track, manage, and report on 
open grants would increase. We believe that our proposal to allow new 
awards or extension amendments for up to five years at your request 
when you need the additional time will eliminate an unnecessary burden 
in managing all the grants that can be completed sooner.
How do I apply for a grant? (Sec.  886.15)
    In paragraph (a), we propose to remove a provision that a 
preapplication is not required under certain conditions. We do not 
require a preapplication for AML grants. In paragraph (b), we propose 
to remove the requirement that we must prepare and sign the grant 
agreement because this provision was duplicated in Sec.  886.16, which 
is a more appropriate location. We reworded this entire section using 
plain English.
After OSM approves my grant, what responsibilities do I have? (Sec.  
886.16)
    We revised this entire section to reflect the electronic processing 
of our grant awards, to remove references to signatures and other 
paper-based procedures, and to use plain English. In addition, we added 
language to paragraph (e) to reflect the 2006 amendments' changes to 
the AML inventory under section 403(c) of SMCRA. We describe specific 
changes to the content of this regulation below.
    To begin, we propose revising paragraph (a) to remove the 
requirements that a grant agreement include a statement of the work to 
be covered and a statement of required approvals and conditions. We 
removed these requirements because our electronic grant system does not 
display such information clearly and effectively in agreement 
documents. All required information is normally included in your 
application and reclamation plan, as well as our regulations and 
directives.
    Next, we propose to revise paragraph (c) in order to remove the 
requirement that you countersign the grant agreement within 20 days to 
accept the award or we will deobligate the grant amount. Instead, we 
propose that you accept the agreement when you initiate work under the 
grant or first draw down any funds. We made this change when we 
implemented our electronic grant system to eliminate unnecessary 
processing.
    We propose to revise paragraph (d) to clarify our existing ATP 
process. Although funds are obligated when the grant is awarded, you 
must not expend construction funds on an individual project until you 
and we have ensured that we are in compliance with NEPA and all other 
applicable laws and requirements. We send you a written ATP to confirm 
that we have completed the compliance actions and that you may expend 
funds on construction of that project.
    We propose revising paragraph (e) to reflect section 403(c) of 
SMCRA that now requires proposed amendments to the AML inventory that 
are made by States and Indian tribes to be approved by OSM, acting for 
the Secretary. 30 U.S.C. 1233(c). In this paragraph, we are proposing 
to define ``amendment'' to mean any new coal problem under section 
403(a) or section 403(b) of SMCRA that is added to the system after 
December 20, 2006. In addition, we are proposing that the term 
``amendment'' would also include instances where you, the State or 
Indian tribe, elevate a Priority 3 coal problem contained in the AML 
inventory to either Priority 1 or Priority 2 status. We are proposing 
these changes to be consistent with section 403(c) of SMCRA, and also 
section 402(g)(2), which requires us to ensure strict compliance by 
uncertified States and Indian tribes with the priorities described in 
section 403(a) of SMCRA. Problems will normally be approved and entered 
in the AML inventory when identified, before you begin development, 
design and construction activities, but our approval may occur during 
the ATP process if the problem

[[Page 35241]]

has not previously been approved. Non-emergency problems must be 
approved and entered in the AML inventory before we approve the ATP.
    We do not intend for this provision to require our approval for a 
30% AMD set-aside, or noncoal work conducted by uncertified States 
under section 409 of SMCRA, or for salaries or administrative costs of 
the AML program. With the exception of those instances where Priority 3 
inventory problems are being elevated to a Priority 1 or Priority 2, we 
also do not intend for this provision to require our approval for 
subsequent revisions to coal problems once they have been included in 
the AML inventory. This provision does not change existing procedures 
where States and Indian tribes routinely update the AML inventory at 
the time projects are funded or completed.
    Under Sec.  886.16(e)(1), we are proposing that our approval of an 
emergency project under section 410 of SMCRA, which is our ATP for the 
emergency project, also constitutes our approval to place the coal 
problems being addressed by the emergency into the AML inventory. We 
are proposing this process for emergency projects because the 
declaration of an emergency by us confirms that the problem is a danger 
to the public health, safety, or general welfare under section 
410(a)(1) of SMCRA.
    In paragraph (e)(2), we propose to add the approval requirement in 
section 403(c) so that you cannot use funds for project development, 
design, or construction of new coal reclamation projects before we have 
approved the problems for inclusion in the AML inventory. This 
paragraph would apply only to coal reclamation problems added to the 
AML inventory after December 20, 2006. We believe this proposal helps 
fulfill our responsibility under section 402(g)(2) to ensure strict 
compliance by uncertified States and Indian tribes with the priorities 
described in section 403(a) of SMCRA. 30 U.S.C. 1232(g)(2). Requiring 
AML coal problems to be in the AML inventory prior to the development 
of designs will promote coordination between us and uncertified States 
and Indian tribes early in the planning process. This early 
coordination will help eliminate the potential for agency conflict 
after property owners have been promised reclamation and substantial 
design funding has been spent. Finally, requiring AML coal problems to 
be in the AML inventory before the development of designs would spread 
out our review workload and potentially expedite later project ATP 
reviews because field staff would already be familiar with the proposed 
project area.
    The provision in paragraph (f) was moved here from the last 
sentence of existing regulation Sec.  886.12(b) because we believe it 
is more appropriate in this section as a separate paragraph. The 
requirement that public facilities constructed with grant funds should 
use fuel other than petroleum or natural gas to the extent 
technologically and economically feasible is from Executive Order 12185 
and applies to all Federal funds.
    In proposed paragraph (g), we added an introductory sentence 
advising you that you must not expend more funds than we have awarded. 
The remainder of the paragraph is existing Sec.  886.16(f), which 
provides that we are not committed to award additional funds for cost 
overruns.
How can my grant be amended? (Sec.  886.17)
    We propose to move the requirement that grant amendment procedures 
must follow the Grants Common Rule from the last sentence of existing 
paragraph (a) to new paragraph (c). In paragraph (b), we deleted the 
second sentence, with specific conditions which require an advance 
amendment, because we believe it is unnecessary. The Grants Common Rule 
provides sufficient information on amendment requirements, and we will 
address how these requirements apply to many specific types of grant 
changes in our directives. We renumbered existing paragraph (c) to (d). 
We also reworded this section using plain English.
What audit and administrative requirements must I meet? (Sec.  886.18)
    We propose to move and divide existing Sec.  886.18 into proposed 
Sec. Sec.  886.20, 886.23, 886.24, 886.25, and 886.26. Proposed Sec.  
886.18 is a combination of two short existing sections, Sec. Sec.  
886.19 and 886.20. Proposed paragraph (a) contains the audit 
requirement from existing Sec.  886.19, which we updated by deleting 
the reference to the General Accounting Office and adding OMB Circular 
A-133. Paragraph (b) is from the existing Sec.  886.20 on 
administrative procedures. We deleted the existing requirement that you 
use our property inventory form because the form is now optional. In 
addition, this section now refers to the Grants Common Rule, which 
provides sufficient information on property management requirements. 
Specific requirements and forms will be addressed in our directives. We 
reworded this section using plain English.
How must I account for grant funds? (Sec.  886.19)
    As explained above, we moved existing Sec.  886.19 to proposed 
886.18(a). We moved the content of existing Sec.  886.22, ``Financial 
management,'' to this proposed section in order to group the management 
sections together. We also reworded it using plain English.
What happens to unused funds from my grant? (Sec.  886.20)
    We propose to move existing Sec.  886.20 to proposed Sec.  
886.18(b) and add a new section here to clarify how we will treat 
unused grant funds. However, portions of this section are based on 
existing Sec.  886.18(a)(2) and on the fourth and fifth sentences of 
existing Sec. Sec.  872.11(b)(1) and (b)(2). Grant funds may be left 
unexpended at the end of a grant due to changes during the grant period 
such as increases or decreases in project scope or reclamation costs. 
Changes may also occur after the end of a grant period that reduce the 
total funds expended under the grant, such as the receipt of funds from 
the sale of property. We also consider unawarded funds, moneys which 
have been distributed to a State or Indian tribe but not awarded in a 
grant, as unused funds.
    Proposed paragraph (a) explains that we will deobligate all 
unexpended funds from a completed grant agreement in order to close it 
out and describes how we will treat unexpended funds. Paragraph (a)(1) 
is based on existing Sec.  886.18(a)(2), which allows us to reduce your 
grant if you fail to obligate funds within three years of the grant 
award. We propose to modify this provision to address section 
402(g)(1)(D) of SMCRA, as revised in the 2006 amendments, which 
mandates that State and Tribal share funds that are not spent within 3 
years, or 5 years for funds distributed in FY 2008, 2009, or 2010, must 
be made available for expenditure as historic coal funds. 30 U.S.C. 
1232(g)(1)(D). Our proposed paragraph (1) of this section requires us 
to transfer any State share funds or Tribal share funds that 
uncertified States and Indian tribes do not expend within 3 years, or 5 
years for FY 2008, 2009, or 2010 funds, from that State or Indian tribe 
to historic coal funds. We will distribute transferred funds to 
uncertified States and Indian tribes at the next annual distribution 
using the prescribed historic coal formula described in proposed Sec.  
872.22. In proposed paragraph (a)(2), we propose to hold any unused 
Federal expense funds, such as State emergency program funds, for 
distribution to any State or Indian tribe which needs them for the 
specific

[[Page 35242]]

activity for which Congress appropriated the funds. Finally, paragraph 
(3) specifies that unused funds of all other types will be made 
available for inclusion in a grant to the State or Indian tribe for 
which we originally distributed the funds.
    Paragraph (b) provides that we will transfer any State or Tribal 
share funds that have not been awarded in a grant within three years of 
the date we distributed them to you, or five years for funds 
distributed in FY 2008, 2009, or 2010, to historic coal funds in the 
same way that we transfer unused funds under paragraph (a)(1). We are 
proposing to add this paragraph because we believe that funds that have 
not been requested and approved for award within 3 or 5 years of the 
distribution date are unneeded and should be transferred to other 
States and Indian tribes that can use them more efficiently. We are 
interested in your comments on this proposal.
What must I report? (Sec.  886.21)
    We propose to delete existing Sec.  886.21 because this topic is 
addressed in Sec.  886.12. This proposed section was moved from Sec.  
886.23 to improve readability. The existing paragraph (a) in Sec.  
886.23 required you to submit to us every year the reporting forms that 
we specified. We are proposing to replace this paragraph with a 
requirement that each year you report to us the program performance and 
financial information that we specify. We propose not to establish a 
uniform method for you to submit this information because allowing you 
to use various forms, formats, and methods to submit your annual 
reports will make it less of a burden on you.
    The existing paragraph (b) combines two different reporting 
requirements by requiring you to submit an OSM-76 inventory form upon 
project completion and any other closeout reports we specify. We 
propose to clarify this requirement by separating the AML inventory and 
grant closeout requirements. Proposed paragraph (b) covers the reports 
you must provide us upon completion of each grant. These are final 
performance and financial reports, as well as property and any other 
reports that we specify. Proposed paragraph (c) requires you to update 
the AML inventory upon completing each reclamation project. Removing 
this item from the grant closeout requirements clarifies that you must 
update the AML inventory as you complete each project rather than 
waiting until the grant is completed.
What records must I maintain? (Sec.  886.22)
    As proposed, existing Sec.  886.22 was moved to Sec.  886.19. This 
proposed section was moved from existing Sec.  886.24 and reworded 
using plain English. To clarify that this section covers all records, 
programmatic as well as accounting, we added a sentence noting that 
your records must support all the information you reported to us for 
your grant.
What actions can OSM take if I do not comply with the terms of my 
grant? (Sec.  886.23)
    We propose to move existing Sec.  886.23 to proposed Sec.  886.21 
and to divide the existing Sec.  886.18, ``Grant reduction, suspension 
and termination,'' into five sections for clarification. One section 
was already described in proposed Sec.  886.20. This is the first of 
four additional proposed new sections, which will be followed by 
Sec. Sec.  886.24, 886.25, and 886.26.
    Proposed paragraph (a) of this section begins with the existing 
paragraph Sec.  886.18(b), which lists various actions we may choose to 
take for noncompliance, ranging from temporarily withholding cash 
payments to terminating your grant. We deleted the existing paragraph 
Sec.  886.18(a)(1), which duplicated some of these provisions.
    Proposed Sec.  886.23(b) is based on existing paragraph (a)(3) and 
requires us to terminate your reclamation grant if we terminate your 
regulatory administration and enforcement grant. We propose to modify 
this to state the exceptions to this requirement provided in SMCRA for 
the States of Missouri and Tennessee in section 402(g)(8)(B), and for 
the Navajo, Hopi, and Crow Indian tribes in section 405(k). In 
addition, we reworded this entire section using plain English.
    Proposed Sec.  886.23(c) is moved from existing Sec.  886.18(a)(5). 
Likewise, proposed Sec.  886.23(d) is moved from existing paragraph 
(a)(6). This proposed paragraph is modified to require us to take 
appropriate remedial action for overdue reports up to terminating the 
grant, rather than providing no option but termination. Proposed Sec.  
886.23(e) was moved from existing Sec.  886.18(a)(7). Similarly, 
proposed Sec.  886.23(f) was moved from existing Sec.  886.18(a)(4). 
These paragraphs were reworded using plain English.
What procedures will OSM follow to reduce, suspend, or terminate my 
grant? (Sec.  886.24)
    We propose to move existing Sec.  886.24 to Sec.  886.22. This 
proposed Sec.  886.24 is another section we have separated from 
existing Sec.  886.18. This section was taken from the existing Sec.  
886.18(c)(1) through (c)(6) and reworded using plain English. Existing 
Sec.  886.18(c)(7) was taken out of this section and moved to proposed 
new Sec.  886.26 because termination for convenience does not require 
the procedures for adverse actions provided in this section.
How can I appeal a decision to reduce, suspend, or terminate my grant? 
(Sec.  886.25)
    Under our proposal, existing Sec.  886.25 was reworded and 
renumbered as Sec.  886.27. This section, split from existing Sec.  
886.18, was taken from paragraph (d) of that section. In addition, the 
final appeal authority was changed from the Secretary to the Department 
of the Interior's Office of Hearings and Appeals. The section was 
reworded using plain English.
When and how can my grant be terminated for convenience? (Sec.  886.26)
    This proposed new paragraph was separated from the existing Sec.  
886.18(c)(7) to distinguish it from the unilateral reduction, 
suspension, or termination procedures in that section. A termination 
for convenience is a joint decision and procedures are much simpler.
What special procedures apply to Indian lands not subject to an 
approved Tribal reclamation program? (Sec.  886.27)
    This proposed new section was renumbered from Sec.  886.25. The 
reference in paragraph (d) to a particular type of funding in Part 872 
was also updated.

Part 887--Subsidence Insurance Program Grants

    Throughout this Part, we added references to Indian tribes to 
clarify that Indian tribes may choose to establish a subsidence 
insurance program under the same rules as States.
Scope (Sec.  887.1)
    We added references to Indian tribes wherever the existing rule 
says States.
Authority (Sec.  887.3)
    We propose to delete this section because it is unnecessary and 
duplicative.
Definitions (Sec.  887.5)
    We propose to expand the term ``State administered'' defined in 
this section to ``State or Indian tribe administered.'' We also propose 
to reword two definitions (``Self-sustaining'' and ``State or Indian 
tribe administered'') to add other

[[Page 35243]]

references to Indian tribes and to use plain English. We also propose 
to include the definition of the term ``reclamation plan or State 
reclamation plan'' as it is defined in proposed Sec.  872.5.
Information Collection (Sec.  887.10)
    We propose rewording this paragraph to add references to Indian 
tribes, to use plain English, and to use the current format approved by 
the OMB. This paragraph describes OMB's approval of information 
collections in Part 887, our use of that information, and the estimated 
reporting burden associated with those collections.
Eligibility for Grants (Sec.  887.11)
    The existing section allows only State or Tribal share funds to be 
used for subsidence insurance programs. We propose adding language to 
allow certified States and Indian tribes to fund this program with 
prior balance replacement funds if their State legislature or Tribal 
council establishes that use, or with certified in lieu funds.
Coverage and Amount of Grants (Sec.  887.12)
    We are proposing to revise paragraph (b) to add a reference to the 
proposed new Part 885 for grants to certified States and Indian tribes. 
We are proposing to revise paragraph (c) to clarify that the funding 
limit of $3 million is cumulative over the lifetime of the program. In 
addition, we also reworded this section using plain English.
Grant Period (Sec.  887.13)
Grant Administration Requirements and Procedures (Sec.  887.15)
    We reworded these sections using plain English and updated Sec.  
887.15 to include proposed Part 885.

IV. Public Comment Procedures

    Written Comments: If you submit written comments, they should be 
specific, confined to issues pertinent to the proposed rule, and 
explain the reason for any recommended changes. We appreciate all 
comments, but those most useful and likely to influence decisions on 
any revisions will be those that either involve personal experience or 
include citations to and analyses of SMCRA, its legislative history, 
its implementing regulations, the 2006 amendments, case law, or other 
pertinent State or Federal laws or regulations.
    We cannot ensure that comments received after the close of the 
comment period (see DATES) will be included in the docket for the 
rulemaking and considered. Comments sent to an address other than those 
listed above (see ADDRESSES) will not be included in the docket for the 
rulemaking.
    Public Availability of Comments: Before including your address, 
phone number, e-mail address, or other personal identifying information 
in your comment, you should be aware that your entire comment--
including your personal identifying information--may be made publicly 
available at any time. While you can ask us in your comment to withhold 
your personal identifying information from public review, we cannot 
guarantee that we will be able to do so.
    Public hearings: We will only hold a public hearing on the proposed 
rule upon request. The time, date, and address for any hearing will be 
announced in the Federal Register at least 7 days prior to the hearing.
    Any person interested in participating in a hearing should inform 
Mr. Lytton (see FOR FURTHER INFORMATION CONTACT), either orally or in 
writing by 5 p.m., Eastern Time, on July 11, 2008. If no one has 
contacted Mr. Lytton to express an interest in participating in a 
hearing by that date, a hearing will not be held. If there is only 
limited interest, a public meeting or teleconference rather than a 
hearing may be held, with the results included in the docket for this 
rulemaking.
    The public hearing on the specified date will continue until all 
persons scheduled to speak have been heard. If you are in the audience 
and have not been scheduled to speak and wish to do so, you will be 
allowed to speak after those who have been scheduled. We will end the 
hearing after all persons scheduled to speak and persons present in the 
audience who wish to speak have been heard. To assist the transcriber 
and ensure an accurate record, we request, if possible, that each 
person who 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 at a 
particular location, a public meeting or teleconference, rather than a 
public hearing, may be held. People wishing to meet with us to discuss 
the proposed rule may request a meeting by contacting Mr. Lytton (See 
FOR FURTHER INFORMATION CONTACT). All meetings will be open to the 
public and, if possible, notice of the meetings will be posted at the 
appropriate locations listed under ADDRESSES. A written summary of each 
public meeting or teleconference will be made a part of the docket for 
this rulemaking.

V. Procedural Determinations

Executive Order 12866--Regulatory Planning and Review

    This proposed rule is considered an ``economically significant 
regulatory action'' under the criteria of section 3(f) of Executive 
Order 12866 and has been reviewed by the Office of Management and 
Budget. Based on the criteria for an ``economically significant 
regulatory action'' found in section 3(f), we have made a preliminary 
determination that:
    a. The rule may raise novel legal or policy issues arising from 
legal mandates, the President's priorities, or the principles set forth 
in the Executive Order.
    b. The rule would not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency.
    c. The rule would not materially alter the budgetary impacts of 
entitlements, grants, user fees, or loan programs or the rights or 
obligations of their recipients. However, as discussed below, grants to 
States and Indian tribes have increased, as required by the provisions 
of the 2006 amendments.
    d. The rule 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 align our regulations with statutory 
provisions contained in the 2006 amendments pertaining to the 
collection of reclamation fees and the distribution of money from the 
Fund and Treasury in the form of mandatory grants to States and Indian 
tribes. The provisions of the 2006 amendments have an annual effect on 
the economy of $100 million or more. Coal operators subject to the 
extension of the fee and the new rates received actual notice before 
they became effective. These new fees have already been collected for 
the two quarters beginning October 1, 2007 and ending March 31, 2008. 
In addition, we have already distributed approximately $274 million in 
FY 2008 mandatory grants to the States and Indian tribes.

Assessment of Potential Costs and Benefits

    Executive Order 12866 requires OSM to conduct an assessment of the 
potential costs and benefits of any regulatory action deemed 
significant under Executive Order 12866. OMB Circular A-4 provides 
guidance to Federal agencies on the development of a regulatory 
analysis. It requires us to identify a baseline because benefits and 
costs are defined in comparison with a clearly stated alternative. OMB 
has

[[Page 35244]]

stated that ``this normally will be a `no action' baseline: what the 
world will be like if the proposed rule is not adopted.'' OMB Circular 
A-4, Regulatory Analysis (Sept. 17, 2003). As previously stated, the 
new fee rates have gone into effect and are being paid and the grant 
distributions mandated by the 2006 amendments have been made for FY 
2008. These statutory changes are already in effect regardless of 
whether this proposed rule is finalized. For comparison purposes, OSM 
will use as the ``no action baseline'' the fee rates paid by operators 
and grant distribution requirements for States and Indian tribes that 
would have been in effect if the 2006 amendments had not been signed 
into law. We will refer to this as the ``old law'' or the ``no action 
alternative.'' The second alternative we will analyze consists of the 
requirements pertaining to fee collections and grant distributions to 
States and Indian tribes established by the 2006 amendments. We will 
refer to this as the 2006 amendments alternative.
    The basic difference between the two alternatives is the cost to 
the coal operators and the Treasury and the resulting benefits 
quantified in terms of the acres of environmental problems that can be 
reclaimed. Under the old law, the fee rates that would have been in 
effect on October 1, 2007, would have been the rates established using 
the formula specified in our existing regulations at 30 CFR 870.13(b). 
Those fee rates would be paid for approximately 13-14 years. They would 
be established before the start of each fiscal year and would be based 
on estimates of coal production and the amount of the interest 
transferred to the CBF for that year. The fees for each year would have 
been structured to replace the amount of money transferred to the CBF 
at the beginning of the year (generally the amount of interest that the 
Fund earns that year, subject to a $70 million cap, with corrections 
for adjustments to previous transfers and differences between estimated 
and actual coal production in prior years). The purpose of the fee was 
to reimburse the Fund for the interest transferred to the CBF. Under 
the old law alternative, the money in the Fund would have been 
exhausted in approximately 13-14 years--after which time, no more money 
would have been available for reclamation projects and no interest 
would have been transferred to the CBF.
    Under the old law, grants would have been made based on the amount 
of money appropriated each year by Congress. Uncertified States and 
Indian tribes would be required to use the money for AML reclamation 
projects. Certified States and Indian tribes would be required to use 
the money for noncoal reclamation as specified in existing Sec.  
875.15. Pursuant to existing Sec.  875.15, certified States and Indian 
tribes could use any money that they received for reclamation projects 
involving the restoration of lands and water adversely affected by past 
mineral mining, projects involving the protection, repair, replacement, 
construction, or enhancement of utilities (such as those relating to 
water supply, roads, and other such facilities serving the public 
adversely affected by mineral mining and processing practices), and the 
construction of public facilities in communities impacted by coal or 
other mineral mining and processing practices.
    As explained in the preamble, the 2006 amendments both extended the 
reclamation fee for 14 years and provided for a two-step reduction in 
the amount of the fee rate from the rate originally established in 
1977. The statutory fee rates were reduced by 10 percent from the 
levels established in 1977, for the period from October 1, 2007, 
through September 30, 2012. The fee rates will again be reduced by 
another 10 percent from the levels established in 1977 for the period 
from October 1, 2012, through September 30, 2021. The fee rates under 
2006 amendments are specified in the proposed rule at Sec.  870.13. The 
fee rates for 2007-2012 will range from 31.5 cents per ton down to 9 
cents per ton.
    While the rates established by the 2006 amendments are lower than 
the 1977 rates, they are higher than the rates that would have been 
established under existing Sec.  870.13(b), which would have gone into 
effect had the 2006 amendments not been enacted into law. Fee rates 
under existing Sec.  870.13(b) for years 2007-2012 were estimated to 
range as follow:

 
----------------------------------------------------------------------------------------------------------------
                                                                   Fees for non-   Fees for non-
                                                                   lignite coal    lignite coal      Fees for
                                                                    produced by     produced by    lignite coal
                           Fiscal year                                surface       underground     (cents per
                                                                  methods (cents  methods (cents    short ton)
                                                                  per short ton)  per short ton)
----------------------------------------------------------------------------------------------------------------
2007............................................................             8.5             3.7             2.4
2008............................................................             8.5             3.6             2.4
2009............................................................             7.8             3.4             2.2
2010............................................................             7.3             3.1             2.1
2011............................................................             2.6             1.1             0.7
2012............................................................             2.0             0.9             0.6
----------------------------------------------------------------------------------------------------------------

    In addition to the fee rate extension, the 2006 amendments also 
require that:
    1. Once fully phased in, the majority of the distributions to 
States and Indian tribes of moneys annually collected from the 
reclamation fee will be made outside of the appropriations process. 30 
U.S.C. 1231(d).
    2. All States and Indian tribes with approved reclamation programs 
will be paid amounts equal to their portion of the unappropriated prior 
balance of State and Tribal share funds as of September 30, 2007. 30 
U.S.C. 1240a(h)(1)(A). These payments are mandatory distributions from 
Treasury funds and will be made in seven equal annual installments that 
began in FY 2008. 30 U.S.C. 1232(i)(2) and 1240a(h)(1)(C). Uncertified 
States and Indian tribes must use these prior balance replacement funds 
for the purposes of section 403 of SMCRA. 30 U.S.C. 1240a(h)(1)(D)(ii). 
Certified States and Indian tribes must use these payments for purposes 
established by their State legislature or Tribal council, ``with 
priority given for addressing the impacts of mineral development.'' 30 
U.S.C. 1240a(h)(1)(D)(i).
    3. Subject to certain limitations, to the extent premium payments 
and other revenue sources do not meet the financial needs of the UMWA 
health care plans, all unappropriated past

[[Page 35245]]

interest earnings and all future interest earned by the Fund must be 
transferred to these plans, together with any remaining unappropriated 
balance in the RAMP allocation, which the 2006 amendments repealed. 30 
U.S.C. 1232(h). In addition, the three UMWA health care plans are 
eligible to receive Treasury transfers to cover any remaining deficit, 
subject to certain limitations. 30 U.S.C. 1232(i).
    In general, under the old law and the 2006 amendments, the type of 
coal reclamation problems that would be remediated, mainly by the 
uncertified States and Indian tribes, would be the most serious AML 
problems (Priority 1 and Priority 2 also referred to as ``high 
priority'' problems). High priority AML problems include:
     Clogged Streams;
     Clogged Stream Lands;
     Dangerous Piles or Embankments;
     Dangerous Highwalls;
     Dangerous Impoundments;
     Dangerous Slides;
     Hazardous or Explosive Gases;
     Hazardous Equipment or Facilities;
     Hazardous Recreational Water Bodies;
     Industrial or Residential Waste;
     Portals;
     Polluted Water: Agricultural/Industrial;
     Polluted Water: Human Consumption;
     Subsidence-Prone Areas;
     Surface Burning;
     Underground Mine Fires; and
     Vertical Openings.
    Under the old law, certified States and Indian tribes were required 
to use grant money for noncoal reclamation. Under the 2006 amendments, 
certified States and Indian tribes must use prior balance replacement 
funds for purposes established by the State legislature or Tribal 
council, with priority given for addressing the impacts of mineral 
development. Exactly what these purposes will be is undetermined at 
this time.
    In the proposed rule, certified States and Indian tribes are 
allowed to use certified in lieu funds for any purpose they deem 
appropriate. In the preamble discussion for proposed Sec.  872.34, we 
are seeking comment on an alternative which would require certified 
States and Indian tribes to use the money for noncoal reclamation. 
Under this alternative, we assume that the same types of activity would 
continue as are required by our existing regulations. Noncoal 
reclamation activities have included reclamation activities at 
abandoned mines affected by hard rock mining operations and sand and 
gravel operations. Also, in communities impacted by coal or other 
mineral mining, funds have been used for the construction of public 
facilities such as schools, hospitals, and water treatment plants. 
Under either alternative, we assume that States and Indian tribes will 
use the money for the public good but the wide discretion given to the 
States and Indian tribes makes any meaningful discussion of the effects 
too speculative.

Summary of Costs and Benefits

    The following two tables summarize the costs and benefits under the 
no action alternative and the 2006 amendments alternative.
    Table 1 indicates the estimated costs associated with each 
alternative. Under the no action alternative, the cost to operators is 
approximately $612 million. This sum consists of the fees that 
operators would pay under our current regulations at Sec.  870.13(b). 
Under the 2006 amendments alternative, the estimated cost is 
approximately $6.9 billion. This sum consists of: (1) The fees 
operators will pay under the rates established by the 2006 amendments; 
(2) money from the general fund of the Treasury that we are required to 
transfer to certified and uncertified States and Indian tribes for 
their share of the prior unappropriated balance; and (3) Treasury funds 
that will be transferred to certified States and Tribes as in lieu 
funds equal to 50% of fees collected on coal produced in their State or 
on Tribal lands. This sum does not include money that we will pay to 
the UMWA under the 2006 amendments because those payments are not 
addressed in this proposed rule. .

       Table 1.--Estimated Costs Associated With the Alternatives From October 1, 2007-September 30, 2021
----------------------------------------------------------------------------------------------------------------
                                  Estimated costs to
                                  operators for fees
                                  paid under the old
                                   law from October
                                     1, 2007 thru
                                  September 30, 2021
                                     (the 1977 fee    Estimated costs to  Estimated costs to
                                     rates at Sec.    operators for fees      the Federal
                                       870.13(a)        paid under the       Treasury (for      Estimated total
          Alternatives               terminate on       2006 amendments      prior balance           costs
                                     September 30,      from October 1,    replacement funds
                                     2007; new fee         2007 thru       and certified in
                                     rates at Sec.    September 30, 2021      lieu funds)
                                       870.13(b)
                                     sufficient to
                                  replenish interest
                                  transferred to CBF
                                     take effect)
----------------------------------------------------------------------------------------------------------------
                                  A.................  B.................  C.................  D
 
2. 2006 Amendments..............  ..................  $4.1 billion......  $2.8 billion......  $6.9 billion.
----------------------------------------------------------------------------------------------------------------

    Table 2 indicates the estimated benefits expressed in acres of land 
reclaimed. Column A indicates the estimated total amount of money 
available for reclamation under each alternative. Column B indicates 
acres of high priority sites that need to be reclaimed under each 
alternative. Column C indicates the estimated acres of high priority 
sites that can be reclaimed with the funds available under each 
alternative. In Column D, D1 indicates the estimated acres of high 
priority coal sites that would not be reclaimed under the no action 
alternative because of insufficient funds. D2 indicates the estimated 
additional reclamation that could be achieved under the 2006 
amendments. For uncertified States and Indian tribes, the additional 
reclamation would be at Priority 1 and 2 sites, Priority 3 sites, and 
noncoal reclamation. For certified States and Indian tribes, the 
reclamation could be at newly discovered Priority 1, 2, and 3 coal 
sites, and noncoal reclamation. However, as previously discussed, under 
the 2006 amendments, certified States and Indian tribes may use prior 
balance replacement funds for purposes established by the State 
legislature or Tribal council, with priority given for addressing the 
impacts of mineral development; we are proposing in the rule that they 
may use certified in lieu funds for any purpose.

[[Page 35246]]

Therefore, the $1.981 billion dollars that will come from Treasury 
funds may be used for coal and noncoal reclamation but it also may be 
used for other undetermined purposes. We assume that certified States 
and Indian tribes will use the money for the public good, as they have 
in the past, but the wide discretion given to the States and Indian 
tribes make any meaningful discussion of the actual benefits 
speculative.

                        Table 2.--Estimated Benefits Expressed in Acres of Land Reclaimed
----------------------------------------------------------------------------------------------------------------
                                                              P1 and P2
                                                             sites acres      Estimated     Estimated number of
                                       Amount of money       identified       number of        acres of land
                                       estimated to be        with high       acres of      unreclaimed (D1) or
           Alternatives                 available for         priority       identified          additional
                                        reclamation ($      environmental     problems      reclamation possible
                                     rounded in millions)   problems that  reclaimed with  after P1 and P2 sites
                                                                need          available        completed (D2)
                                                             reclamation        funds
----------------------------------------------------------------------------------------------------------------
                                    A....................               B               C  D
 
2. 2006 Amendments................  $6,027.6.............         210,379         210,379  210,257.
Uncertified States and Indian       $4,045.7 (Source:             208,131         208,131  60,284.
 tribes.                             prior balance
                                     replacement funds,
                                     50% State share, 30%
                                     historic coal share
                                     and 3% estimated
                                     minimum program
                                     share).
Certified States and Indian tribes  $1,981.9 (Source:               2,248           2,248  149,973 (under 2006
                                     prior balance                                          amendments, funds
                                     replacement funds                                      are not committed to
                                     and certified in                                       reclamation).
                                     lieu funds).
----------------------------------------------------------------------------------------------------------------
Note: For activity beyond FY 2023, an additional estimated amount available for reclamation of $1.6 billion is
  projected to be used to reclaim an additional 106,000 acres.

    As can be seen from the above tables, under the no action 
alternative the cost to industry would be approximately $612 million, 
but there would be approximately 52,442 acres of Priority 1 and 
Priority 2 coal sites left unreclaimed. Under the 2006 amendments 
alternative, the cost to industry would be substantially greater, 
approximately $4.1 billion, but that amount in combination with the 
$2.8 billion in Treasury funds would be sufficient to reclaim all 
Priority 1 and Priority 2 sites. In addition, there would be additional 
funds remaining which could be used for reclamation at Priority 3 
sites, for noncoal reclamation projects, construction of public 
facilities, and for other purposes deemed appropriate by the State or 
Indian tribe.
    In addition to the quantifiable benefits expressed in acres 
reclaimed, unquantifiable benefits also result. These include:
     Reduction or elimination in health and safety problems, 
which would benefit nearby residents;
     Reduction or elimination of adverse environmental effects 
such as acid mine drainage and erosion and sedimentation;
     Improved habitat for fish and wildlife;
     Increased employment opportunities for those employed by 
the reclamation projects;
     An increase in the number of potential land uses at these 
sites and a reduction or elimination of hazardous features that are 
often attractive but dangerous to outdoor recreationists; and
     General increase in the quality of life in nearby 
communities and adjacent property values.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
requires that a Federal agency, when developing proposed and final 
regulations, consider the impact of its regulations on small entities. 
If a proposed rule is expected to have a significant economic impact on 
a substantial number of small entities, the agency must prepare an 
initial regulatory flexibility analysis. If a proposed rule is not 
expected to have a significant economic impact on a substantial number 
of small entities the agency is not required to perform an initial 
regulatory flexibility analysis and may certify in the rule that the 
rule would not have a significant economic impact on a substantial 
number of small entities under the RFA.
    The Small Business Administration size standards for small 
businesses in the coal mining industry are established by the North 
American Industry Classification System Codes (NAICS). NAICS classifies 
the ``coal mining ``industry under Code 2121; subsets of this sector 
include ``Bituminous Coal and Lignite Surface Mining'' code 212111; 
``Bituminous Coal Underground Mining'' code 212112; and ``Anthracite 
Mining'' code 212113. The size standards established for each of these 
categories is 500 employees or less for each business concern and 
associated affiliates. Data available from the U.S. Census Bureau and 
from the Mine Safety and Health Administration indicates that over 90 
percent of those engaged in coal mining operations are considered small 
entities.
    As previously stated, it is the 2006 amendments which require coal 
operators to pay reclamation fees. Those subject to the fees received 
individual letters informing them of the fee and the extension of time 
during which the fee must be paid. Approximately $135 million has 
already been collected. The proposed rule merely reflects the extension 
of our statutory authority to collect reclamation fees for an 
additional fourteen years. Based on these facts, the Department of the 
Interior certifies that the proposed rule would not have a significant 
economic

[[Page 35247]]

impact on a substantial number of small entities under the RFA.
    The administrative and procedural provisions in the rule are not 
expected to have an adverse economic impact on the regulated industry 
including small entities. The increased grant funding to States and 
Indian tribes required by the 2006 amendments is expected to provide 
increased contracting opportunities for firms, including small 
entities, to do reclamation-related work. Further, the proposed rule is 
not expected to produce adverse effects on competition, employment, 
investment, productivity, innovation, or the ability of United States 
enterprises to compete with foreign-based enterprises in domestic or 
export markets.

Small Business Regulatory Enforcement Fairness Act

    OSM does not consider the proposed rule to be a major rule under 5 
U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act 
for the following reasons.
    a. The provisions of the 2006 amendments pertaining to the new fee 
rates and grant requirements are self-implementing. Coal operators 
subject to the new rates received actual notice of the rates and of the 
extension of the time during which they must be paid. They have already 
begun to pay the fee at the new rate, and for the two quarters 
beginning October 1, 2007 and ending March 31, 2008, we already 
collected approximately $135 million in reclamation fees. In addition, 
we have already distributed approximately $274 million in FY 2008 
mandatory grants to the States and Indian tribes. The proposed rule 
merely aligns our regulations with the self-implementing provisions of 
the 2006 amendments.
    b. The proposed rule would not cause a major increase in costs or 
prices for consumers, individual industries, Federal, State, or local 
government agencies, or geographic regions.
    c. The proposed rule would not have significant adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S.-based enterprises to compete with foreign-based 
enterprises for the reasons stated above.

Unfunded Mandates

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

Executive Order 12630--Takings

    In accordance with Executive Order 12630, the proposed rule does 
not have significant takings implications. The proposed rule is not a 
governmental action capable of interference with constitutionally 
protected property rights. A takings implication assessment is not 
required.

Executive Order 12988--Civil Justice Reform

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

Executive Order 13132--Federalism

    We have reviewed the proposed rule under the criteria specified in 
Executive Order 13132 and have determined that the rule does not have 
sufficient federalism implications to warrant the preparation of a 
Federalism Assessment. The proposed rule does not preempt State law, it 
does not impose substantial direct compliance costs on State and local 
governments, it does not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government.
    As required by section 6 of the executive order, we consulted with 
representatives of States and Indian tribes early in the process of 
developing the proposed rule. In January, February, and May 2007, we 
met with representatives of States and Indian tribes with approved 
reclamation programs at meetings hosted by the Interstate Mining 
Compact Commission (IMCC) and the National Association of Abandoned 
Mine Land Programs (NAAMLP) to notify the States and Indian tribes of 
the 2006 amendments' changes to SMCRA and to seek their input on the 
amendments. The IMCC and NAAMLP subsequently submitted joint written 
comments on specific provisions of the amendments. We considered all 
the comments we received in developing the proposed rule. The 
consultations and concerns that were expressed are discussed above in 
``II. Outreach, Guidance, and Comments.'' Based on input the Department 
received after issuance of the Solicitor's Memorandum Opinion, one or 
more States may object to several provisions in these proposed rules, 
but we believe that the 2006 amendments and other applicable statutes 
mandate adoption of these particular provisions. We do not have the 
option of adopting any other interpretation.

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

    Executive Order 13175 requires that Federal agencies consult with 
potentially affected Indian Tribal governments before taking any 
actions (including promulgation of regulations) that may have a 
substantial direct effect on one of 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. In addition, section 5 of that order 
requires the agency to prepare a Tribal summary impact statement for 
regulations that impose compliance costs on Tribal governments or that 
preempt Tribal law. The summary statement must be included in the 
preamble to the final rule.
    We have determined that this proposed rule will have some effect on 
the three Indian tribes with AML programs, with changes in annual 
funding and increased discretion over the use of funds, but that this 
effect is not substantial. The rule does not impose compliance costs on 
Tribal governments or preempt Tribal law. Indian Tribal representatives 
were invited to informal meetings in January, February, and May of 
2007, in which OSM met with State and Indian Tribal reclamation 
programs to get input on the 2006 amendments.

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

Paperwork Reduction Act

    In accordance with 44 U.S.C. 3507(d), OSM has submitted the 
following request for information collection and recordkeeping 
authority for 30 CFR 785 to the Office of Management and Budget (OMB) 
for review and approval:
    Title: 30 CFR 785--Requirements for permits for special categories 
of mining.
    OMB Control Number: 1029-0040.
    Summary: The information is being collected to meet the 
requirements of sections 507, 508, 510, 515, 701 and 711 of Pub. L. 95-
87, which requires

[[Page 35248]]

applicants for special types of mining activities to provide 
descriptions, maps, plans and data of the proposed activity. This 
information will be used by the regulatory authority in determining if 
the applicant can meet the applicable performance standards for the 
special type of mining activity. Response is required to obtain a 
benefit.
    Bureau Form Number: None.
    Frequency of Collection: Once.
    Description of Respondents: Applicants for coalmine permits and 
State Regulatory Authorities.
    Total Annual Responses: 387.
    Total Annual Burden Hours: 24,442.
    Total Non-Wage Costs: 0.

                                                   Information Collection Summary For 30 CFR Part 785
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Number of    Number of
                           Section                              applicant      State      Hours per    Hours per   Total hours  Current ICB   Changes to
                                                                responses    responses    applicant      State      requested      hours         ICB
--------------------------------------------------------------------------------------------------------------------------------------------------------
785.13.......................................................            6            6          110           40          900          900            0
785.14.......................................................            4            4          250          420        2,680        2,680            0
785.15.......................................................           50           50          150           40        9,500        9,500            0
785.16.......................................................            5            5           10           40          250          250            0
785.17.......................................................            6            6           60           10          420          420            0
785.18.......................................................            7            6           10           10          130          130            0
785.19.......................................................            1            1          300            7          307          307            0
785.20.......................................................           35           34           25           30        1,895        1,895            0
785.22.......................................................            1            1           40           24           64           64            0
785.25.......................................................           80           79           80           79        8,296            0        8,296
                                                              ------------------------------------------------------------------------------------------
    Total....................................................          195          192  ...........  ...........       24,442       16,146        8,296
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Under the Paperwork Reduction Act, OSM must obtain OMB approval of 
all information and recordkeeping requirements. No person is required 
to respond to an information collection request unless the form or 
regulation requesting the information has a currently valid OMB control 
(clearance) number. The control number appears in section 785.10. To 
obtain a copy of OSM's information collection clearance request contact 
John A. Trelease at (202) 208-2783 or by e-mail at [email protected].
    Comments are invited on:
    (a) Whether the proposed collection of information is necessary for 
SMCRA regulatory authorities to implement their responsibilities, 
including whether the information will have practical utility;
    (b) The accuracy of OSM's estimate of the burden of the proposed 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (d) Ways to minimize the burden of collection on the respondents.
    By law, OMB must respond to OSM within 60 days of publication of 
this proposed rule, but may respond as soon as 30 days after 
publication. Therefore, to ensure consideration by OMB, you must send 
comments regarding these burden estimates or any other aspect of these 
information collection and recordkeeping requirements by July 21, 2008 
to the Office of Management and Budget, Office of Information and 
Regulatory Affairs, Attention: Interior Desk Officer, via e-mail to 
[email protected], or via facsimile to (202) 395-6566. Also, 
please send a copy of your comments to John A. Trelease, Office of 
Surface Mining Reclamation and Enforcement, 1951 Constitution Ave, NW., 
Room 202 SIB, Washington, DC 20240, or electronically to 
[email protected]. Please include the OMB control number, 1029-0040, 
at the top of your correspondence.

National Environmental Policy Act

    OSM has determined that these proposed regulations are 
categorically excluded from the National Environmental Policy Act 
(NEPA), 42 U.S.C. 4332(2)(C), pursuant to Department Manual 516 DM 
2.3A(2), Section 1.10 of 516 DM 2, Appendix 1. In addition, we have 
determined that none of the ``extraordinary circumstances'' exceptions 
to the categorical exclusion applies.

Data Quality Act

    In developing this rule we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554).

Clarity of This Regulation

    Executive Order 12866 requires each agency to write regulations 
that are easy to understand. We invite your comments on how to make 
this proposed rule easier to understand, including answers to questions 
such as the following: (1) Are the requirements in the proposed rule 
clearly stated? (2) Does the proposed rule contain technical language 
or jargon that interferes with its clarity? (3) Does the format of the 
proposed rule (grouping and order of sections, use of headings, 
paragraphing, etc.) aid or reduce its clarity? (4) Would the rule be 
easier to understand if it were divided into more (but shorter) 
sections? (A ``section'' appears in bold type and is preceded by the 
symbol ``Sec.  '' and a numbered heading; for example, Sec.  700.5); 
(5) Is the description of the proposed rule in the SUPPLEMENTARY 
INFORMATION section of this preamble helpful in understanding the 
proposed rule? (6) What else could we do to make the proposed rule 
easier to understand? Send a copy of any comments that concern how we 
could make this proposed rule easier to understand to: Office of 
Regulatory Affairs, Department of the Interior, Room 7229, 1849 C 
Street, NW., Washington, DC 20240. You may also e-mail the comments to 
this address: [email protected].

List of Subjects

30 CFR Part 700

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

30 CFR Part 724

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

30 CFR Part 773

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

[[Page 35249]]

30 CFR Part 785

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

30 CFR Part 816

    Environmental protection, Reporting and recordkeeping requirements, 
Surface mining.

30 CFR Part 817

    Environmental protection, Reporting and recordkeeping requirements, 
Underground mining.

30 CFR Part 845

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

30 CFR Part 846

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

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, 
Surface mining, Underground mining.

30 CFR Part 873

    Abandoned Mine Reclamation Fund, Indian lands, Reclamation fees, 
Surface mining, Underground mining.

30 CFR Part 874

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

30 CFR Part 875

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

30 CFR Part 876

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

30 CFR Part 879

    Abandoned Mine Reclamation Fund, Indian lands, Reclamation fees, 
Surface mining, Underground mining.

30 CFR Part 880

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

30 CFR Part 882

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

30 CFR Part 884

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

30 CFR Part 885

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

30 CFR Part 886

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

30 CFR Part 887

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

    Dated: May 2, 2008.
C. Stephen Allred,
Assistant Secretary, Land and Minerals Management.
    For the reasons given in the preamble, we are proposing to amend 30 
Chapter VII as set forth below:

PART 700--GENERAL

    1. The authority citation for part 700 continues to read as 
follows:

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

    2. Amend Sec.  700.5, by revising the definition for the term 
``Fund'' and adding definitions for the terms ``AML,'' ``AML 
inventory,'' ``Eligible lands and water,'' ``Emergency,'' ``Expended,'' 
``Extreme danger,'' ``Left or abandoned in either an unreclaimed or 
inadequately reclaimed condition,'' ``Project,'' ``Reclamation 
activity,'' and ``Reclamation program'' in alphabetical order to read 
as follows:


Sec.  700.5  Definitions.

* * * * *
    AML means abandoned mine land(s).
    AML inventory means OSM's listing of abandoned mine land problems 
eligible to be reclaimed using moneys from the Abandoned Mine 
Reclamation Fund or the Treasury as appropriate.
* * * * *
    Eligible lands and water means land and water eligible for 
reclamation or drainage abatement expenditures under the Abandoned Mine 
Land program. Eligible lands and water are those which were mined for 
coal or which were affected by such mining, wastebanks, coal 
processing, or other coal mining processes and left or abandoned in 
either an unreclaimed or inadequately reclaimed condition prior to 
August 3, 1977, and for which there is no continuing reclamation 
responsibility. However, lands and water damaged by coal mining 
operations after that date and on or before November 5, 1990, may also 
be eligible for reclamation if they meet the requirements specified in 
Sec.  874.12(d) and (e) of this chapter. Following certification of the 
completion of all known coal problems, eligible lands and water for 
noncoal reclamation purposes are those sites that meet the eligibility 
requirements specified in Sec.  875.14 of this chapter. For additional 
eligibility requirements for water projects, see Sec.  874.14 of this 
chapter, and for lands affected by remining operations, see section 404 
of SMCRA.
    Emergency means a sudden danger or impairment that presents a high 
probability of substantial physical harm to the health, safety, or 
general welfare of people before the danger can be abated under normal 
program operation procedures.
* * * * *
    Expended means that moneys have been obligated, encumbered, or 
committed by contract by the State, Tribe, or us for work to be 
accomplished or services to be rendered.
    Extreme danger means a condition that could reasonably be expected 
to cause substantial physical harm to persons, property, or the 
environment and to which persons or improvements on real property are 
currently exposed.
* * * * *
    Fund means the Abandoned Mine Reclamation Fund established on the 
books of the U.S. Treasury for the purpose of accumulating revenues 
designated for reclamation of abandoned mine lands and other activities 
authorized by section 401 of SMCRA.
* * * * *
    Left or abandoned in either an unreclaimed or inadequately 
reclaimed

[[Page 35250]]

condition means, for Abandoned Mine Land programs, lands and water:
    (a) Which were mined or which were affected by such mining, 
wastebanks, processing or other mining processes prior to August 3, 
1977, or between August 3, 1977, and November 5, 1990, as authorized 
pursuant to section 402(g)(4) of SMCRA, and on which all mining has 
ceased;
    (b) Which continue, in their present condition, to degrade 
substantially the quality of the environment, prevent or damage the 
beneficial use of land or water resources, or endanger the health and 
safety of the public; and
    (c) For which there is no continuing reclamation responsibility 
under State or Federal laws, except as provided in sections 402(g)(4) 
and 403(b)(2) of SMCRA.
* * * * *
    Project means a delineated area containing one or more abandoned 
mine land problems. A project may be a group of related reclamation 
activities with a common objective within a political subdivision of a 
State or within a logical, geographically defined area, such as a 
watershed, conservation district, or county planning area.
* * * * *
    Reclamation activity means the reclamation, abatement, control, or 
prevention of adverse effects of past mining by an Abandoned Mine Land 
program.
    Reclamation program means a program established by a State or an 
Indian tribe in accordance with Title IV of SMCRA for reclamation of 
lands and water adversely affected by past mining, including the 
reclamation plan and annual applications for grants under the plan.
* * * * *

PART 724--INDIVIDUAL CIVIL PENALTIES

    3. The authority citation for part 724 continues to read as 
follows:

    Authority: 28 U.S.C. 2461, 30 U.S.C. 1201 et seq., and 31 U.S.C. 
3701.

    4. Amend Sec.  724.18 by revising paragraph (d) to read as follows:


Sec.  724.18  Payment of penalty.

* * * * *
    (d) Delinquent payment. Following the expiration of 30 days after 
the issuance of a final order assessing an individual civil penalty, 
any delinquent penalty shall be subject to interest at the rate 
established by the U.S. Department of the Treasury for late charges on 
late payments to the Federal Government. The Treasury current value of 
funds rate is published by the Fiscal Service in the notices section of 
the Federal Register and on Treasury's Web site. Interest on unpaid 
penalties will run from the date payment first was due until the date 
of payment. Failure to pay overdue penalties may result in one or more 
of the actions specified in Sec.  870.23(a) through (f) of this 
chapter. Delinquent penalties are subject to late payment penalties 
specified in Sec.  870.21(c) of this chapter and processing and 
handling charges specified in Sec.  870.21(d) of this chapter.

PART 773--REQUIREMENTS FOR PERMITS AND PERMIT PROCESSING

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

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

    6. Amend Sec.  773.13 by revising paragraph (a)(2) to read as 
follows:


Sec.  773.13  Unanticipated events or conditions at remining sites.

    (a) * * *
    (2) Resulted from an unanticipated event or condition at a surface 
coal mining and reclamation operation on lands that are eligible for 
remining under a permit that was held by the person applying for the 
new permit.
* * * * *

PART 785--REQUIREMENTS FOR PERMITS FOR SPECIAL CATEGORIES OF MINING

    7. The authority citation for part 785 continues to read as 
follows:

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


Sec.  785.25  [Amended]

    8. In Sec.  785.25, remove paragraph (c).

PART 816--PERMANENT PROGRAM PERFORMANCE STANDARDS--SURFACE MINING 
ACTIVITIES

    9. The authority citation for part 816 continues to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq. and section 115 of Pub. L. 98-
146.

    10. In Sec.  816.116, revise paragraphs (c)(2)(ii) and (c)(3)(ii) 
to read as follows:


Sec.  816.116  Revegetation: Standards for success.

* * * * *
    (c) * * *
    (2) * * *
    (ii) Two full years for lands eligible for remining included in a 
permit for which a finding has been made under Sec.  773.15(m) of this 
chapter. To the extent that the success standards are established by 
paragraph (b)(5) of this section, the lands must equal or exceed the 
standards during the growing season of the last year of the 
responsibility period.
    (3) * * *
    (ii) Five full years for lands eligible for remining included in a 
permit for which a finding has been made under Sec.  773.15(m) of this 
chapter. To the extent that the success standards are established by 
paragraph (b)(5) of this section, the lands must equal or exceed the 
standards during the growing seasons of the last two consecutive years 
of the responsibility period.
* * * * *

PART 817--PERMANENT PROGRAM PERFORMANCE STANDARDS--UNDERGROUND 
MINING ACTIVITIES

    11. The authority citation for part 817 continues to read as 
follows:

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

    12. In Sec.  817.116, revise paragraphs (c)(2)(ii) and (c)(3)(ii) 
to read as follows:


Sec.  817.116  Revegetation: Standards for success.

* * * * *
    (c) * * *
    (2) * * *
    (ii) Two full years for lands eligible for remining included in a 
permit for which a finding has been made under Sec.  773.15(m) of this 
chapter. To the extent that the success standards are established by 
paragraph (b)(5) of this section, the lands must equal or exceed the 
standards during the growing season of the last year of the 
responsibility period.
    (c) * * *
    (3) * * *
    (ii) Five full years for lands eligible for remining included in a 
permit for which a finding has been made under Sec.  773.15(m) of this 
chapter. To the extent that the success standards are established by 
paragraph (b)(5) of this section, the lands must equal or exceed the 
standards during the growing seasons of the last two consecutive years 
of the responsibility period.
* * * * *

PART 845--CIVIL PENALTIES

    13. The authority citation for part 845 continues to read as 
follows:

    Authority: 28 U.S.C. 2461, 30 U.S.C. 1201 et seq., 31 U.S.C. 
3701, Pub. L. 100-202, and Pub. L. 100-446.

    14. In Sec.  845.21, revise paragraph (b)(1) to read as follows:

[[Page 35251]]

Sec.  845.21  Use of civil penalties for reclamation.

* * * * *
    (b) * * *
    (1) Emergency projects as defined in Sec.  700.5 of this chapter;
* * * * *

PART 846--INDIVIDUAL CIVIL PENALTIES

    15. The authority citation for part 846 continues to read as 
follows:

    Authority: 28 U.S.C. 2461, 30 U.S.C. 1201 et seq., and 31 U.S.C. 
3701.

    16. Amend Sec.  846.18 by revising paragraph (d) to read as 
follows:


Sec.  846.18  Payment of penalty.

* * * * *
    (d) Delinquent payment. Following the expiration of 30 days after 
the issuance of a final order assessing an individual civil penalty, 
any delinquent penalty shall be subject to interest at the rate 
established by the U.S. Department of the Treasury for late charges on 
late payments to the Federal Government. The Treasury current value of 
funds rate is published by the Fiscal Service in the notices section of 
the Federal Register and on Treasury's Web site. Interest on unpaid 
penalties will run from the date payment first was due until the date 
of payment. Failure to pay overdue penalties may result in one or more 
of the actions specified in Sec. Sec.  870.23(a) through (f) of this 
chapter. Delinquent penalties are subject to late payment penalties 
specified in Sec.  870.21(c) of this chapter and processing and 
handling charges specified in Sec.  870.21(d) of this chapter.

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

    17. 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, sections 1701-1710

    18. Revise Sec.  870.1 to read as follows:


Sec.  870.1  Scope.

    This Part sets out our procedures to collect fees for the Fund and 
to report coal production.
    19. Amend Sec.  870.5 as follows:
    a. Revise the introductory text as set forth below; and
    b. Remove the following definitions: ``Abandoned Mine Reclamation 
Fund or Fund'', ``Agency'', ``Allocate'', ``Eligible lands and water'', 
``Emergency'', ``Extreme danger'', ``Indian Abandoned Mine Reclamation 
Fund or Indian Fund'', ``Indian reclamation program'', ``Left or 
abandoned in either an unreclaimed or inadequately reclaimed 
condition'', ``OSM'', ``Permanent facility'', ``Project'', ``Qualified 
hydrologic unit'', ``Reclamation activity'', ``Reclamation plan'', 
``State Abandoned Mine Reclamation Fund or State Fund'', and ``State 
reclamation program''.


Sec.  870.5  Definitions.

    As used in this Part--
* * * * *
    20. Revise Sec.  870.10 to read as follows:


Sec.  870.10  Information collection.

    In accordance with 44 U.S.C. 3501 et seq., the Office of Management 
and Budget (OMB) has approved the information collection requirements 
of Part 870 and the OSM-1 Form and assigned control number 1029-0063. 
The information is used to maintain a record of coal produced 
nationwide each calendar quarter, the method of coal removal, the type 
of coal, and the basis for coal tonnage reporting. Persons must respond 
to meet the requirements of SMCRA. A Federal agency may not conduct or 
sponsor, and you are not required to respond to, a collection of 
information unless it displays a currently valid OMB control number.


Sec.  870.11  [Amended]

    21. Amend Sec.  870.11 by removing paragraph (b) and redesignating 
paragraphs (c), (d), and (e) as paragraphs (b), (c), and (d), 
respectively.
    22. In Sec.  870.13, revise the heading of paragraph (a), revise 
paragraph (b) and add paragraph (c) to read as follows:


Sec.  870.13  Fee rates.

    (a) Fees for coal produced for sale, transfer, or use through 
September 30, 2007.
* * * * *
    (b) Fees for coal produced for sale, transfer, or use from October 
1, 2007, through September 30, 2012. Fees for coal produced for sale, 
transfer, or use from October 1, 2007, through September 30, 2012, are 
shown in the following table:

------------------------------------------------------------------------
          Type of fee              Type of coal        Amount of fee
------------------------------------------------------------------------
(1) Surface mining fee........  Anthracite,        (i) If value of coal
                                 bituminous, and    is $ 3.15 per ton or
                                 subbituminous,     more, fee is 31.5
                                 including          cents per ton.
                                 reclaimed.        (ii) If value of coal
                                                    is less than $ 3.15
                                                    per ton, fee is 10
                                                    percent of the
                                                    value.
(2) Underground mining fee....  Anthracite,        (i) If value of coal
                                 bituminous, and    is $ 1.35 per ton or
                                 subbituminous.     more, fee is 13.5
                                                    cents per ton.
                                                   (ii) If value of coal
                                                    is less than $ 1.35
                                                    per ton, fee is 10
                                                    percent of the
                                                    value.
(3) Surface and underground     Lignite..........  (i) If value of coal
 mining fee.                                        is $ 4.50 per ton or
                                                    more, fee is 9 cents
                                                    per ton.
                                                   (ii) If value of coal
                                                    is less than $ 4.50
                                                    per ton, fee is 2
                                                    percent of the
                                                    value.
(4) In situ coal mining fee...  All types other    13.5 cents per ton
                                 than lignite.      based on Btu's per
                                                    ton in place equated
                                                    to the gas produced
                                                    at the site as
                                                    certified through
                                                    analysis by an
                                                    independent
                                                    laboratory.
(5) In situ coal mining fee...  Lignite..........  9 cents per ton based
                                                    on the Btu's per ton
                                                    of coal in place
                                                    equated to the gas
                                                    produced at the site
                                                    as certified through
                                                    analysis by an
                                                    independent
                                                    laboratory.
------------------------------------------------------------------------

    (c) Fees for coal produced for sale, transfer, or use from October 
1, 2012, through September 30, 2021. The fees for coal produced for 
sale, transfer, or use from October 1, 2012, through September 30, 
2021, are shown in the following table:

[[Page 35252]]



------------------------------------------------------------------------
          Type of fee              Type of coal        Amount of fee
------------------------------------------------------------------------
(1) Surface mining fee........  Anthracite,        (i) If value of coal
                                 bituminous, and    is $ 2.80 per ton or
                                 subbituminous,     more, fee is 28
                                 including          cents per ton.
                                 reclaimed coal.   (ii) If value of coal
                                                    is less than $ 2.80
                                                    per ton, fee is 10
                                                    percent of the
                                                    value.
(2) Underground mining fee....  Anthracite,        (i) If value of coal
                                 bituminous, and    is $ 1.20 per ton or
                                 subbituminous.     more, fee is 12
                                                    cents per ton.
                                                   (ii) If value of coal
                                                    is less than $ 1.20
                                                    per ton, fee is 10
                                                    percent of the
                                                    value.
(3) Surface and underground     Lignite..........  (i) If value of coal
 mining fee.                                        is $ 4.00 per ton or
                                                    more, fee is 8 cents
                                                    per ton.
                                                   (ii) If value of coal
                                                    is less than $ 4.00
                                                    per ton, fee is 2
                                                    percent of the
                                                    value.
(4) In situ coal mining fee...  All types other    12 cents per ton
                                 than lignite.      based on Btu's per
                                                    ton in place equated
                                                    to the gas produced
                                                    at the site as
                                                    certified through
                                                    analysis by an
                                                    independent
                                                    laboratory.
(5) In situ coal mining fee...  Lignite..........  8 cents per ton based
                                                    on the Btu's per ton
                                                    of coal in place
                                                    equated to the gas
                                                    produced at the site
                                                    as certified through
                                                    analysis by an
                                                    independent
                                                    laboratory.
------------------------------------------------------------------------

    23. Revise Sec. Sec.  870.14 through 870.17 to read as follows:


Sec.  870.14  Determination of percentage-based fees.

    (a) If you pay a fee based on a percentage of the value of coal, 
you must include documentation supporting the claimed coal value with 
your fee payment and production report. We may review this information 
and any additional documentation we may require, including examination 
of your books and records. We may accept the valuation you claim, or we 
may determine another value of the coal.
    (b) If we determine that a higher fee must be paid, you must pay 
the additional fee together with interest computed under Sec.  870.21.


Sec.  870.15  Reclamation fee payment.

    (a) You must pay the reclamation fee based on calendar quarter 
tonnage no later than 30 days after the end of each calendar quarter.
    (b) Along with any fee payment due, you must submit to us a 
completed Coal Sales and Reclamation Fee Report (OSM-1 Form). You can 
file the OSM-1 Form either in paper format or in electronic format as 
specified in Sec.  870.17. On the OSM-1 Form, you must report:
    (1) The tonnage of coal sold, used, or transferred;
    (2) The name and address of any person or entity who is the owner 
of 10 percent or more of the mineral estate for a given permit; and
    (3) The name and address of any person or entity who purchases 10 
percent or more of the production from a given permit, during the 
applicable quarter.
    (c) If no single mineral owner or purchaser meets the 10 percent 
criterion in paragraphs (b)(2) and (b)(3) of this section, then you 
must report the name and address of the largest single mineral owner 
and purchaser. If several persons have successively transferred the 
mineral rights, you must include on the OSM-1 Form information on the 
last owner(s) in the chain before the permittee, i.e. the person or 
persons who have granted the permittee the right to extract the coal.
    (d) At the time of reporting, you may designate the information 
required by paragraphs (b) and (c) of this section as confidential.


Sec.  870.16  Acceptable payment methods.

    (a) If you owe total quarterly reclamation fees of $25,000 or more 
for one or more mines, you must:
    (1) Use an electronic fund transfer mechanism approved by the U.S. 
Department of the Treasury;
    (2) Forward payments by electronic transfer;
    (3) Include the applicable Master Entity No.(s) (Part 1--Block 4 on 
the OSM-1 Form), and OSM Document No.(s) (Part 1--upper right corner of 
the OSM-1 Form) on the wire message; and
    (4) Use our approved form or approved electronic form to report 
coal tonnage sold, used, or for which ownership was transferred to the 
address indicated in the Instructions for Completing the OSM-1 Form.
    (b) If you owe less than $25,000 in quarterly reclamation fees for 
one or more mines, you may:
    (1) Forward payments by electronic transfer in accordance with the 
procedures specified in paragraph (a) of this section; or
    (2) Submit a check or money order payable to the Office of Surface 
Mining Reclamation and Enforcement in the same envelope with the OSM-1 
Form to: Office of Surface Mining Reclamation and Enforcement, P.O. Box 
360095M, Pittsburgh, Pennsylvania 15251.
    (c) If you pay more than $25,000 by a method other than an 
electronic fund transfer mechanism approved by the U.S. Department of 
the Treasury, you will be in violation of the Surface Mining Control 
and Reclamation Act of 1977, as amended.


Sec.  870.17  Filing the OSM-1 Form.

    (a) Filing an OSM-1 Form electronically. You may submit a quarterly 
electronic OSM-1 Form in place of a quarterly paper OSM-1 Form. 
Submitting the OSM-1 Form electronically is optional. If you submit 
your form electronically, you must use a methodology and medium 
approved by us and do one of the following:
    (1) Maintain a properly notarized paper copy of the identical OSM-1 
Form for review and approval by our Fee Compliance auditors (in order 
to comply with the notary requirement in SMCRA); or
    (2) Submit an electronically signed and dated statement made under 
penalty of perjury that the information contained in the OSM-1 Form is 
true and correct.
    (b) Filing a paper OSM-1 Form. Alternatively, you may submit a 
quarterly paper OSM-1 Form. If you choose to submit your form on paper, 
you must do one of the following:
    (1) Submit a properly notarized copy of the OSM-1 Form; or
    (2) Submit the OSM-1 Form with a signed and dated statement made 
under penalty of perjury that the information contained in the form is 
true and correct. Under the unsworn statement option, you must sign the 
following statement: ``I declare under penalty of perjury that the 
foregoing is true and correct. Executed on [date].''
    24. In Sec.  870.18, revise paragraph (b) to read as follows:


Sec.  870.18  General rules for calculating excess moisture.

* * * * *
    (b) If OSM disallows any or all of an allowance for excess 
moisture, you must submit an additional fee plus interest computed 
according to Sec.  870.21(a) and

[[Page 35253]]

penalties computed according to Sec.  870.21(c).
* * * * *
    25. Add new Sec. Sec.  870.21 through 870.23 to read as follows:


Sec.  870.21  Late payments.

    (a) Fee payments postmarked later than 30 days after the calendar 
quarter for which the fee was owed are subject to interest. Late 
reclamation fee payments are subject to interest at the rate 
established by the U.S. Department of the Treasury for late charges on 
payments to the Federal Government. The Treasury current value of funds 
rate is published annually in the Federal Register and on Treasury's 
Web site.
    (b) We will charge interest on unpaid reclamation fees from the 
31st day following the end of the calendar quarter for which the fee 
payment is owed to the date of payment. If you are delinquent, we will 
bill you monthly and initiate whatever action is necessary to collect 
full payment of all fees and interest.
    (c) When a reclamation fee debt is more than 91 days overdue, a 6 
percent annual penalty on the amount owed for fees will begin and will 
run until the date of payment. This penalty is in addition to the 
interest described in paragraph (a) of this section.
    (d) For all delinquent fees, interest, and penalties, you must pay 
a processing and handling charge that we will set based upon the 
following components:
    (1) For debts referred to a collection agency, the amount charged 
to us by the collection agency;
    (2) For debts we processed and handled, a standard amount we set 
annually based upon similar charges by collection agencies for debt 
collection;
    (3) For debts referred to the Office of the Solicitor within the 
U.S. Department of the Interior, but paid before litigation, the 
estimated average cost to prepare the case for litigation as of the 
time of payment;
    (4) For debts referred to the Office of the Solicitor within the 
U.S. Department of the Interior, and litigated, the estimated cost to 
prepare and litigate a debt case as of the time of payment; and
    (5) If not otherwise provided for, all other administrative 
expenses associated with collection, including, but not limited to, 
billing, recording payments, and follow-up actions.
    (e) We will not charge prejudgment interest on any processing and 
handling charges.


Sec.  870.22  Maintaining required production records.

    (a) If you engage in or conduct a surface coal mining operation, 
you must maintain up-to-date records that contain at least the 
following information:
    (1) The tons of coal you produced, bought, sold, or transferred, 
the amount of money you received per ton, the name of person to whom 
you sold or transferred the coal, and the date of each sale or 
transfer;
    (2) The tons of coal you used and your date of your consumption;
    (3) The tons of coal you stockpiled or inventoried that are not 
classified as sold for fee computation purposes under Sec.  870.12; and
    (4) For in situ coal mining operations, the total Btu value of gas 
you produced, the Btu value of a ton of coal in place certified at 
least semiannually by an independent laboratory, and the amount of 
money you received for gas sold, transferred, or used.
    (b) We must have access to your records of any surface coal mining 
operation for review. Your records must be available to us at 
reasonable times.
    (c) We may inspect and copy any of your books or records that are 
necessary to substantiate the accuracy of your OSM-1 Form and payments. 
If the fee is paid at the maximum rate, we will not copy information 
relative to price. We will protect all copied information as authorized 
or required by the Privacy Act (5 U.S.C. 552a) and the Freedom of 
Information Act (5 U.S.C. 552).
    (d) You must maintain your books and records for 6 years from the 
end of the calendar quarter in which the fee was due or paid, whichever 
is later.
    (e) If you do not maintain or make available your books and records 
as required in this section, we will estimate the fee due under this 
Part through use of average production figures based upon the nature 
and acreage of your coal mining operation.
    (1) We will assess the fee at the amount we estimate plus an 
additional 20 percent to account for possible error in our fee 
liability estimate.
    (2) After you receive our fee liability estimate, you may request 
that we revise that estimate based upon your information. However, you 
must demonstrate that our fee liability estimate is incorrect. You may 
do this by providing adequate documentation that we find to be 
acceptable and comparable to the information required in Sec.  
870.19(a).


Sec.  870.23  Consequences of noncompliance.

    If you do not maintain adequate records, provide us with access to 
records of a surface coal mining operation, or pay overdue reclamation 
fees, including interest on late payments or underpayments, we may take 
one or more of the following actions:
    (a) Start a legal action against you;
    (b) Report you to the Internal Revenue Service;
    (c) Report you to State agencies responsible for taxation;
    (d) Report you to credit bureaus;
    (e) Refer you to collection agencies; or
    (f) Take some other appropriate action against you.
    26. Revise part 872 to read as follows:

PART 872--MONEYS AVAILABLE TO ELIGIBLE STATES AND INDIAN TRIBES

Sec.
872.1 What does this Part do?
872.5 Definitions.
872.10 Information collection.
872.11 Where do moneys in the Fund come from?
872.12 Where do moneys distributed from the Fund and other sources 
go?
872.13 What moneys does OSM distribute each year?
872.14 What are State share funds?
872.15 How does OSM distribute and award State share funds?
872.16 What may States use State share funds for?
872.17 What are Tribal share Funds?
872.18 How does OSM distribute and award Tribal share funds?
872.19 What may Indian tribes use Tribal share funds for?
872.20 What will OSM do with unappropriated AML funds currently 
allocated to the Rural Abandoned Mine Program?
872.21 What are historic coal funds?
872.22 How does OSM distribute and award historic coal funds?
872.23 What may you use historic coal funds for?
872.24 What are Federal expense funds?
872.25 What may OSM use Federal expense funds for?
872.26 What are minimum program make up funds?
872.27 How does OSM distribute and award minimum program make up 
funds?
872.28 What may you use minimum program make up funds for?
872.29 What are prior balance replacement funds?
872.30 How does OSM distribute and award prior balance replacement 
funds?
872.31 What may you use prior balance replacement funds for?
872.32 What are certified in lieu funds?
872.33 How does OSM distribute and award certified in lieu funds?
872.34 What may you use certified in lieu funds for?

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


Sec.  872.1  What does this Part do?

    This Part sets forth procedures and general responsibilities for 
managing funds received under Title IV of the Surface Mining Control 
and Reclamation Act of 1977, as amended.

[[Page 35254]]

Sec.  872.5  Definitions.

    As used in this Part--
    Allocate means to identify moneys in our records at the time they 
are received by the Fund. The allocation process identifies moneys in 
the Fund by the type of funds collected, including the specific State 
or Indian tribal share.
    Award means to approve our grant agreement authorizing you to draw 
down and expend program funds.
    Distribute means to annually assign funds to a specific State or 
Indian tribe. After distribution, funds are available for award in a 
grant to that specific State or Indian tribe.
    Indian Abandoned Mine Reclamation Fund or Indian Fund means a 
separate fund that an Indian tribe established to account for moneys we 
award under Parts 885 or 886 of this chapter or other moneys these 
regulations authorize to be deposited in the Indian Fund.
    Reclamation plan or State reclamation plan means a plan that a 
State or Indian tribe submitted and that we approved under section 405 
of SMCRA and Part 884 of this chapter.
    State Abandoned Mine Reclamation Fund or State Fund means a 
separate fund that a State established to account for moneys we award 
under Parts 885 or 886 of this chapter or other moneys these 
regulations authorize to be deposited in the State Fund.


Sec.  872.10  Information collection.

    In accordance with 44 U.S.C. 3501 et seq., the Office of Management 
and Budget (OMB) has approved the information collection requirements 
of Part 872 and assigned it control number 1029-0054. The information 
is used to determine whether States and Indian tribes will be granted 
funds for reclamation activities. States and Indian tribes must respond 
to obtain a benefit in accordance with SMCRA. A Federal agency may not 
conduct or sponsor, and you are not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.


Sec.  872.11  Where do moneys in the Fund come from?

    Revenue to the Fund includes--
    (a) Reclamation fees we collect under section 402 of SMCRA and Part 
870 of this chapter;
    (b) Amounts we collect from charges for use of land acquired or 
reclaimed with moneys from the Fund under Part 879 of this chapter;
    (c) Moneys we recover through satisfaction of liens filed against 
privately owned lands reclaimed with moneys from the Fund under Part 
882 of this chapter;
    (d) Moneys we recover from the sale of lands acquired with moneys 
from the Fund or by donation;
    (e) Moneys donated to us for the purpose of abandoned mine land 
reclamation; and
    (f) Interest and any other income earned from investment of the 
Fund. We will credit interest and other income only to the Secretary's 
share.


Sec.  872.12  Where do moneys distributed from the Fund and other 
sources go?

    (a) Each State or Indian tribe with an approved reclamation plan 
must establish an account to be known as a State or Indian Abandoned 
Mine Reclamation Fund. These funds will be managed in accordance with 
the OMB Circular A-102.
    (b) Revenue for the State and Indian Abandoned Mine Reclamation 
Funds will include--(1) Amounts we granted for purposes of conducting 
the approved reclamation plan;
    (2) Moneys collected from charges for uses of land acquired or 
reclaimed with moneys from the State or Indian Abandoned Mine 
Reclamation Fund under Part 879 of this chapter;
    (3) Moneys recovered through the satisfaction of liens filed 
against privately owned lands;
    (4) Moneys the State or Indian tribe recovered from the sale of 
lands acquired under Title IV of SMCRA; and
    (5) Such other moneys as the State or Indian tribe decides should 
be deposited in the State or Indian Abandoned Mine Reclamation Fund for 
use in carrying out the approved reclamation program.
    (c) Moneys deposited in State or Indian Abandoned Mine Reclamation 
Funds must be used to carry out the reclamation plan approved under 
Part 884 of this chapter and projects approved under Sec.  886.27 of 
this chapter.


Sec.  872.13  What moneys does OSM distribute each year?

    (a) Under Title IV of SMCRA, each Federal fiscal year we must 
distribute to you, the States and Indian tribes with approved 
reclamation plans, the moneys listed in this section. We will 
distribute all Fund moneys and other moneys from the Treasury that have 
been designated for mandatory distribution. We will provide information 
to you showing how we calculated your distribution. We will distribute 
the following moneys:
    (1) State share funds to uncertified States as described in Sec.  
872.14;
    (2) Tribal share funds to uncertified Indian tribes as described in 
Sec.  872.17;
    (3) Historic coal funds to uncertified States and Indian tribes as 
described in Sec.  872.21;
    (4) Minimum program make up funds to eligible uncertified States 
and Indian tribes as described in Sec.  872.26;
    (5) Prior balance replacement funds to certified and uncertified 
States and Indian tribes as described in Sec.  872.29; and
    (6) Certified in lieu funds to certified States and Indian tribes 
as described in Sec.  872.32.
    (b) We will calculate annual fee collections for coal produced in 
the previous Federal fiscal year on a net cash basis. This means that 
we will use collections that are paid for the current Federal fiscal 
year to adjust fees that were overpaid or underpaid in prior fiscal 
years.
    (c) We will distribute any Congressionally-appropriated funds for 
grants to you out of the Federal expenses funds when the appropriation 
becomes available.
    (d) You may apply for any or all distributed funds at any time 
after the distribution using the procedures in Part 885 of this chapter 
for certified States and Indian tribes or Part 886 for uncertified 
States and Indian tribes.


Sec.  872.14  What are State share funds?

    ``State share funds'' are moneys we distribute to you from your 
State share of the Fund each Federal fiscal year under section 
402(g)(1)(A) of SMCRA. Your State share of the Fund is 50 percent of 
the reclamation fees we collected from within your State (excluding 
fees collected on Indian lands) and allocated to you, the State, in the 
Fund for coal produced in the previous fiscal year.


Sec.  872.15  How does OSM distribute and award State share funds?

    (a) To be eligible to receive State share funds, you must meet the 
following criteria:
    (1) You must have and maintain an approved reclamation plan under 
Part 884 of this chapter; and
    (2) You cannot be certified under section 411(a) of SMCRA.
    (b) If you meet the eligibility requirements in paragraph (a) of 
this section, we will distribute and award these State share funds to 
you as follows:
    (1) We will annually distribute State share funds to you as shown 
in the following table:

[[Page 35255]]



------------------------------------------------------------------------
                                         the amount of State share funds
     For the Federal fiscal year(s)       we annually distribute to you
            beginning . . .                       will be . . .
------------------------------------------------------------------------
(i) October 1, 2007, and October 1,      50 percent of your 50 percent
 2008.                                    share of reclamation fees
                                          collected on prior fiscal year
                                          coal production.
(ii) October 1, 2009, and October 1,     75 percent of your 50 percent
 2010.                                    share of reclamation fees
                                          collected on prior fiscal year
                                          coal production.
(iii) October 1, 2011, and continuing    100 percent of your 50 percent
 through September 30, 2022.              share of reclamation fees
                                          collected on prior fiscal year
                                          coal production.
(iv) October 1, 2022 (fiscal year 2023)  the amount remaining in your
                                          State share of the Fund.
------------------------------------------------------------------------

    (2) We will award these funds to you in grants according to the 
provisions of Part 886 of this chapter.


Sec.  872.16  What may States use State share funds for?

    You may only use State share funds for:
    (a) Coal reclamation under Sec.  874.12 of this chapter;
    (b) Water supply restoration under Sec.  874.14 of this chapter;
    (c) Noncoal reclamation under Sec.  875.12 of this chapter that is 
requested under section 409(c) of SMCRA;
    (d) Deposit into an acid mine drainage abatement and treatment fund 
under Part 876 of this chapter; and
    (e) Land acquisition under Sec.  879.11 of this chapter.


Sec.  872.17  What are Tribal share funds?

    ``Tribal share funds'' are moneys we distribute to you from your 
Tribal share of the Fund each Federal fiscal year under section 
402(g)(1)(B) of SMCRA. Your Tribal share of the Fund is 50 percent of 
the reclamation fees we collected and allocated to you, the Indian 
tribe(s), in the Fund for coal produced in the previous fiscal year 
from the Indian lands in which you have an interest.


Sec.  872.18  How will OSM distribute and award Tribal share funds?

    (a) To be eligible to receive Tribal share funds, you must meet the 
following criteria:
    (1) You must have and maintain an approved reclamation plan under 
Part 884 of this chapter; and
    (2) You cannot be certified under section 411(a) of SMCRA.
    (b) If you meet the eligibility requirements in paragraph (a) of 
this section, we will distribute and award these Tribal share funds to 
you as follows:
    (1) We will annually distribute Tribal share funds to you as shown 
in the following table:

------------------------------------------------------------------------
                                            the amount of Tribal share
     For the Federal fiscal year(s)      funds we annually distribute to
            beginning . . .                     you will be . . .
------------------------------------------------------------------------
(i) October 1, 2007, and October 1,      50 percent of your 50 percent
 2008.                                    share of reclamation fees
                                          collected on prior fiscal year
                                          coal production.
(ii) October 1, 2009, and October 1,     75 percent of your 50 percent
 2010.                                    share of reclamation fees
                                          collected on prior fiscal year
                                          coal production.
(iii) October 1, 2011, and continuing    100 percent of your 50 percent
 through September 30, 2022.              share of reclamation fees
                                          collected on prior fiscal year
                                          coal production.
(iv) October 1, 2022 (fiscal year 2023)  the amount remaining in your
                                          Tribal share of the Fund.
------------------------------------------------------------------------

    (2) We will award these funds to you in grants according to the 
provisions of Part 886 of this chapter.


Sec.  872.19  What may Indian tribes use Tribal share funds for?

    You may only use Tribal share funds for:
    (a) Coal reclamation under Sec.  874.12 of this chapter;
    (b) Water supply restoration under Sec.  874.14 of this chapter;
    (c) Noncoal reclamation under Sec.  875.12 of this chapter that is 
requested under section 409(c) of SMCRA;
    (d) Deposit into an acid mine drainage abatement and treatment fund 
under Part 876 of this chapter; and
    (e) Land acquisition under Sec.  879.11 of this chapter.


Sec.  872.20  What will OSM do with unappropriated AML funds currently 
allocated to the Rural Abandoned Mine Program?

    Under section 402(h)(4)(B) of SMCRA, we will make available any 
moneys that remain allocated to RAMP and that were not appropriated or 
moved to other allocations before December 20, 2006, for possible 
transfer to the three United Mine Workers of America (UMWA) health care 
plans described in section 402(h)(2) of SMCRA.


Sec.  872.21  What are historic coal funds?

    (a) ``Historic coal funds'' are moneys provided under section 
402(g)(5) of SMCRA based on the amount of coal produced before August 
3, 1977, in your State or on Indian lands in which you have an 
interest. Under the 2006 amendments, each year we allocate and 
distribute 30 percent of annual AML fee collections for coal produced 
in the previous fiscal year plus 60 percent of any other revenue to the 
Fund as historic coal funds to supplement grants to States and Indian 
tribes.
    (b) Historic coal funds also will include moneys we reallocate 
under sections 401(f)(3)(A)(i), 411(h)(1)(A)(ii), and 411(h)(4) of 
SMCRA, including:
    (1) The moneys we reallocate based on prior balance replacement 
funds distributed under Sec.  872.29, which will be available to 
supplement grants beginning with Federal fiscal year 2023; and
    (2) The moneys we reallocate based on certified in lieu funds 
distributed under Sec.  872.32, which will be available to supplement 
grants in Federal fiscal years 2009 through 2022.


Sec.  872.22  How does OSM distribute and award historic coal funds?

    (a) To be eligible to receive historic coal funds, you must meet 
the following criteria:
    (1) You must have and maintain an approved reclamation plan under 
Part 884 of this chapter;
    (2) You cannot be certified under section 411(a) of SMCRA; and
    (3) You must have unfunded Priority 1 and 2 coal problems remaining 
under sections 403(a)(1) and (2) of SMCRA.
    (b) If you meet the eligibility requirements in paragraph (a) of 
this section, we distribute these moneys to you using a formula based 
on the

[[Page 35256]]

amount of coal historically produced before August 3, 1977, in your 
State or from the Indian lands concerned.
    (c) We annually distribute historic coal funds to you as shown in 
the following table:

------------------------------------------------------------------------
                                           the amount of historic coal
     For the Federal fiscal year(s)      funds we annually distribute to
            beginning . . .                     you will be . . .
------------------------------------------------------------------------
(1) October 1, 2007, and October 1,      50 percent of the amount we
 2008.                                    calculated using the formula
                                          described in paragraph (b) of
                                          this section.
(2) October 1, 2009, and October 1,      75 percent of the amount we
 2010.                                    calculated using the formula
                                          described in paragraph (b) of
                                          this section.
(3) October 1, 2011, and continuing      100 percent of the amount we
 through September 30, 2022.              calculated using the formula
                                          described in paragraph (b) of
                                          this section.
(4) October 1, 2022 (fiscal year 2023),  to the extent funds are
 and thereafter.                          available, the amount needed
                                          to reclaim your remaining
                                          Priority 1 and 2 coal
                                          problems.
------------------------------------------------------------------------

    (d) In any given year, we will only distribute to you the historic 
coal funds that you need to reclaim your unfunded Priority 1 or 2 coal 
problems. Your distribution of State or Tribal share funds under 
Sec. Sec.  872.14 or 872.17 plus your distribution of historic coal 
funds along with unused funds from prior allocations could be more than 
you need to reclaim your remaining high priority problems. If that 
occurs, we will reduce the historic coal funds we distribute to you to 
the amount that you need to fully fund reclamation of all your 
remaining Priority 1 or 2 coal problems.
    (e) We will award these funds to you in grants according to the 
provisions of Part 886 of this chapter.


Sec.  872.23  What may you use historic coal funds for?

    You may only use historic coal funds for:
    (a) Coal reclamation under Sec.  874.12 of this chapter;
    (b) Water supply restoration under Sec.  874.14 of this chapter;
    (c) Noncoal reclamation under Sec.  875.12 of this chapter that is 
requested under section 409(c) of SMCRA;
    (d) Deposit into an acid mine drainage abatement and treatment fund 
under Part 876 of this chapter; and
    (e) Land acquisition under Sec.  879.11 of this chapter.


Sec.  872.24  What are Federal expense funds?

    ``Federal expense funds'' are moneys available in the Fund that are 
not allocated or distributed as State share funds (Sec.  872.14), 
Tribal share funds (Sec.  872.17), historic coal funds (Sec.  872.21), 
or minimum program make up funds (Sec.  872.26). Congress must 
appropriate Federal expense funds before we may expend them.


Sec.  872.25  What may OSM use Federal expense funds for?

    (a) We may use Federal expense funds only for the purposes in 
section 402(g)(3) of SMCRA, which include the following:
    (1) The Small Operator Assistance Program under section 507(c) of 
SMCRA (not more than $10 million annually);
    (2) Emergency projects under State, Tribal, and Federal programs 
under section 410 of SMCRA;
    (3) Nonemergency projects in States and on lands within the 
jurisdiction of Indian tribes that do not have an approved abandoned 
mine reclamation program under section 405 of SMCRA;
    (4) The Secretary's administration of Title IV of SMCRA and this 
subchapter; and
    (5) Projects authorized under section 402(g)(4) in States and on 
lands within the jurisdiction of Indian tribes that do not have an 
approved abandoned mine reclamation program under section 405 of SMCRA.
    (b) We will not deduct moneys that we have annually allocated or 
distributed as Federal expense funds under sections 402(g)(3) or (4) of 
SMCRA for any State or Indian tribe from moneys we will annually 
allocate or distribute to a State or Indian tribe under the authority 
of sections 402(g)(1) or (5) of SMCRA.
    (c) We will expend moneys under the authority in section 
402(g)(3)(C) of SMCRA only in States or on Indian lands where the State 
or Indian tribe does not have an abandoned mine reclamation program 
approved under section 405 of SMCRA.


Sec.  872.26  What are minimum program make up funds?

    (a) ``Minimum program make up funds'' are additional moneys we will 
distribute each Federal fiscal year to eligible States and Indian 
tribes to make up the difference between their total distribution of 
other funds and $3 million. The source of these moneys is the non-
appropriated Federal expense funds.
    (b) To be eligible to receive funds under this section, you must 
meet the following criteria:
    (1) You must have and maintain an approved reclamation plan under 
Part 884 of this chapter;
    (2) You cannot have certified under section 411(a) of SMCRA;
    (3) The total amount you receive annually from State share funds 
(Sec.  872.14) or Tribal share funds (Sec.  872.17), historic coal 
funds (Sec.  872.21), and prior balance replacement funds (Sec.  
872.29) must be less than $3 million; and
    (4) You must need more than the total of funds you will receive 
from State or Tribal share, historic coal, and prior balance 
replacement funds to reclaim Priority 1 and 2 coal problems under 
sections 403(a)(1) and (2) of SMCRA in your State or on Indian lands 
within your jurisdiction.
    (c) We will make funds available to the States of Missouri and 
Tennessee under this section to reclaim Priority 1 and 2 coal problems 
included in the AML inventory, provided each State has a reclamation 
plan approved under Part 884 of this chapter.


Sec.  872.27  How does OSM distribute and award minimum program make up 
funds?

    (a) If you meet the eligibility requirements in Sec.  872.26(b), we 
will distribute these minimum program make up funds to you as follows:
    (1) We calculate your total distribution under this Part by first 
adding, in order, your prior balance replacement funds distribution 
(Sec.  872.29), your applicable State or Tribal share funds 
distribution (Sec. Sec.  872.14 or 872.17), and your historic coal 
funds distribution (Sec.  872.21). If the sum of these funds is less 
than $3 million, we will calculate the amount of minimum program make 
up funds to add to your distribution under this section to increase it 
to that level.
    (2) For each of the Federal fiscal years 2007 through 2022, we add 
minimum program make up funds to your combined distribution of prior 
balance replacement, State or Tribal share, and

[[Page 35257]]

historic coal funds as shown in the following table:

------------------------------------------------------------------------
                                          The amount of minimum program
 For each of the Federal fiscal year(s)    make up funds we add to your
            beginning . . .                 distribution will be . . .
------------------------------------------------------------------------
(i) October 1, 2007, and October 1,      50 percent of the amount that
 2008..................................   we calculated should be added
                                          under paragraph (a)(1) of this
                                          section.
(ii) October 1, 2009, and October 1,     75 percent of the amount that
 2010..................................   we calculated should be added
                                          under paragraph (a)(1) of this
                                          section.
(iii) October 1, 2011, and continuing    100 percent of the amount that
 through September 30, 2022............   we calculated should be added
                                          under paragraph (a)(1) of this
                                          section as long as you have at
                                          least $3 million of Priority 1
                                          and 2 coal problems remaining.
(iv) October 1, 2022, and thereafter...  to the extent funds are
                                          available, 100 percent of the
                                          amount that we calculated
                                          should be added under
                                          paragraph (a)(1) until you
                                          have less than $3 million of
                                          Priority 1 and 2 coal problems
                                          remaining.
------------------------------------------------------------------------

    (b) We award these funds to you in grants according to the 
provisions of Part 886 of this chapter.


Sec.  872.28  What may you use minimum program make up funds for?

    You may only use minimum program make up funds to reclaim Priority 
1 and 2 coal problems under sections 403(a)(1) and (2) of SMCRA.


Sec.  872.29  What are prior balance replacement funds?

    ``Prior balance replacement funds'' are moneys we must distribute 
to you instead of the moneys we allocated to your State or Tribal share 
of the Fund before October 1, 2007, but did not distribute to you 
because Congress did not appropriate them. They come from general funds 
of the United States Treasury that are otherwise unappropriated. Under 
section 411(h)(1) of SMCRA, we distribute prior balance replacement 
funds to you, the State or Indian tribe, for seven years starting in 
the Federal fiscal year beginning October 1, 2008.


Sec.  872.30  How does OSM distribute and award prior balance 
replacement funds?

    (a) We distribute prior balance replacement funds to you as 
follows:
    (1) In an amount equal to the aggregate, unappropriated amount 
allocated to you before October 1, 2007, under sections 402(g)(1)(A) or 
(B) of SMCRA;
    (2) If you are, or are not, certified under section 411(a) of 
SMCRA; and
    (3) In seven equal annual installments beginning with the 2008 
Federal fiscal year which starts on October 1, 2007.
    (b) We award these funds to you in grants according to the 
provisions of Part 885 of this chapter for certified States and Indian 
tribes or Part 886 of this chapter for uncertified States and Indian 
tribes.
    (c) At the same time we distribute prior balance replacement funds 
to you under this section, we transfer the same amount to historic coal 
funds from moneys in your State or Tribal share of the Fund that were 
allocated to you before October 1, 2007. The transferred funds will be 
available for annual grants under Sec.  872.21 for the Federal fiscal 
year beginning October 1, 2022, and annually thereafter. We will 
allocate, distribute, and award the transferred funds according to the 
provisions of Sec. Sec.  872.21, 872.22, and 872.23.


Sec.  872.31  What may you use prior balance replacement funds for?

    (a) If you are certified under section 411(a) of SMCRA, you may 
only use prior balance replacement funds for those purposes your State 
legislature or Tribal council establishes, giving priority to 
addressing the impacts of mineral development.
    (b) If you are not certified under section 411(a) of SMCRA, you may 
only use prior balance replacement funds for the purposes in section 
403 of SMCRA, which include:
    (1) Reclamation of coal problems under Sec.  874.12 of this 
chapter;
    (2) Water supply restoration under Sec.  874.14 of this chapter; 
and
    (3) Maintenance of the AML inventory.


Sec.  872.32  What are certified in lieu funds?

    ``Certified in lieu funds'' are moneys that we must distribute to 
you, the certified State or Indian tribe, in lieu of moneys allocated 
to your State or Tribal share of the Fund after October 1, 2007. 
Certified in lieu funds come from general funds of the United States 
Treasury that are otherwise unappropriated. Beginning with the 2009 
Federal fiscal year which starts on October 1, 2008, we will distribute 
certified in lieu funds to you under section 411(h)(2) of SMCRA.


Sec.  872.33  How does OSM distribute and award certified in lieu 
funds?

    (a) You must be certified under section 411(a) of SMCRA to receive 
certified in lieu funds.
    (b) If you meet the eligibility requirement in paragraph (a) of 
this section, we will distribute these certified in lieu funds to you 
as follows:
    (1) Starting in the Federal fiscal year that begins on October 1, 
2008, we annually distribute funds to you based on 50 percent of 
reclamation fees received for coal produced during the previous Federal 
fiscal year in your State or on Indian lands within your jurisdiction;
    (2) The funds we annually distribute to you are in lieu of moneys 
we otherwise would distribute to you from State share funds under Sec.  
872.14 or Tribal share funds under Sec.  872.17 had you not been 
excluded from receiving those funds under section 401(f)(3)(B) of 
SMCRA; and
    (3) We annually distribute certified in lieu funds to you as shown 
in the following table:

------------------------------------------------------------------------
                                         The amount of certified in lieu
In the Federal fiscal year(s) beginning  funds we annually distribute to
                on . . .                    you will be equal to . . .
 
------------------------------------------------------------------------
(i) October 1, 2008....................  25 percent of your 50 percent
                                          share of annual reclamation
                                          fee collections.
(ii) October 1, 2009...................  50 percent of your 50 percent
                                          share of annual reclamation
                                          fee collections.

[[Page 35258]]

 
(iii) October 1, 2010..................  75 percent of your 50 percent
                                          share of annual reclamation
                                          fee collections.
(iv) October 1, 2011, and thereafter...  100 percent of your 50 percent
                                          share of annual reclamation
                                          fee collections.
------------------------------------------------------------------------

    (c) We award these funds to you in grants according to the 
provisions of Part 885 of this chapter.
    (d) At the same time we distribute certified in lieu funds to you 
under this section, we will transfer the same amount to historic coal 
funds and make those funds available for annual grants under Sec.  
872.21 that same Federal fiscal year. We will allocate, distribute, and 
award the transferred funds according to the provisions of Sec. Sec.  
872.21, 872.22, and 872.23.
    (e) We will distribute to you the amounts we withhold under 
paragraph (b) of this section in two equal annual installments. We will 
do this in Federal fiscal years 2018 and 2019.


Sec.  872.34  What may you use certified in lieu funds for?

    You may use certified in lieu funds for any purpose.

PART 873--FUTURE RECLAMATION SET-ASIDE PROGRAM

    27. The authority citation for part 873 is revised to read as 
follows:

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

    28. Revise Sec. Sec.  873.11 and 873.12 to read as follows:


Sec.  873.11  Applicability.

    The provisions of this Part apply to funds awarded, as defined in 
Sec.  872.5 of this chapter, under section 402(g)(6)(A) of SMCRA before 
its amendment on December 20, 2006, and their use by the States or 
Indian tribes for coal reclamation purposes after September 30, 1995.


Sec.  873.12  Future set-aside program criteria.

    (a) Any State or Indian tribe may receive and retain, without 
regard to the limitation referred to in section 402(g)(1)(D) of SMCRA, 
up to 10 percent of the total of the funds distributed annually to such 
State or Indian tribe under sections 402(g) (1) and (5) of SMCRA for a 
future set-aside fund if such amounts were awarded before December 20, 
2006. The State or Indian tribe must deposit all set-aside funds 
awarded into a special fund established under State or Indian tribal 
law. The State or Indian tribe must expend amounts awarded (together 
with all interest earned on such amounts) solely to achieve the 
priorities stated in section 403(a) of SMCRA.
    (b) Moneys the State or Indian tribe deposited in the special fund 
account, together with any interest earned, are considered State or 
Indian tribal moneys.

PART 874--GENERAL RECLAMATION REQUIREMENTS

    29. The authority citation for part 874 continues to read as 
follows:

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

    30. Add Sec.  874.5 to read as follows:


Sec.  874.5  Definitions.

    As used in this Part--
    Reclamation plan or State reclamation plan means a plan that a 
State or Indian tribe submitted and that we approved under section 405 
of SMCRA and Part 884 of this chapter.
    31. Revise Sec. Sec.  874.10 and 874.11 to read as follows:


Sec.  874.10  Information collection.

    In accordance with 44 U.S.C. 3501 et seq., the Office of Management 
and Budget (OMB) has approved the information collection requirements 
of Part 874 and assigned it control number 1029-0113. This information 
is used to ensure that appropriate reclamation projects involving the 
incidental extraction of coal are conducted under the authority of 
section 528(2) of SMCRA and that selected projects contain sufficient 
environmental safeguards. Persons must respond to obtain a benefit. A 
Federal agency may not conduct or sponsor, and you are not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number.


Sec.  874.11  Applicability.

    You must comply with the requirements in this Part if--
    (a) You conduct reclamation projects using moneys from the Fund;
    (b) You conduct reclamation projects using prior balance 
replacement funds provided to uncertified States and Indian tribes 
under Sec.  872.29 of this chapter;
    (c) You choose to use certified in lieu funds provided under Sec.  
872.32 of this chapter to address coal problems subsequent to 
certification; or
    (d) You, a certified State or Indian tribe, at the direction of 
your State legislature or Tribal council, choose to use prior balance 
replacement funds received under Sec.  872.29 of this chapter to 
address coal problems subsequent to certification.
    32. Amend Sec.  874.12 by revising paragraphs (c), (e), and (f) to 
read as follows:


Sec.  874.12  Eligible coal lands and water.

* * * * *
    (c) There is no continuing responsibility for reclamation by the 
operator, permittee, or agent of the permittee under statutes of the 
State or Federal government, or as a result of bond forfeiture. Bond 
forfeiture will render lands or water ineligible only if the amount 
forfeited is sufficient to pay the total cost of the necessary 
reclamation. In cases where the forfeited bond is insufficient to pay 
the total cost of reclamation, additional moneys from the Fund or any 
prior balance replacement funds provided under Sec.  872.29 of this 
chapter may be used.
* * * * *
    (e) An uncertified State or Indian tribe may expend funds made 
available under paragraphs 402(g)(1) and (5) of SMCRA and prior balance 
replacement funds under section 411(h)(1) of SMCRA for the reclamation 
and abatement of any site eligible under paragraph (d) of this section, 
if the State or Indian tribe, with the concurrence of the Secretary, 
makes the findings required in paragraph (d) of this section and the 
State or Indian tribe determines that the reclamation priority of the 
site is the same or more urgent than the reclamation priority for the 
lands and water eligible under paragraphs (a), (b), or (c) of this 
section that qualify as a Priority 1 or 2 site under section 403(a) of 
SMCRA.
    (f) With respect to lands eligible under paragraph (d) or (e) of 
this section, moneys available from sources outside the Fund or that 
are ultimately recovered from responsible parties must either be used 
to offset the cost of the reclamation or transferred to the Fund if not 
required for further reclamation activities at the permitted site.
* * * * *
    33. Revise Sec.  874.13 to read as follows:

[[Page 35259]]

Sec.  874.13  Reclamation objectives and priorities.

    (a) When you conduct reclamation projects under this Part, you 
should follow OSM's ``Final Guidelines for Reclamation Programs and 
Projects'' (66 FR 31250, June 11, 2001) and the expenditures must 
reflect the following priorities in the order stated:
    (1) Priority 1: The protection of public health, safety, and 
property from extreme danger of adverse effects of coal mining 
practices, including the restoration of land and water resources and 
the environment that:
    (i) Have been degraded by the adverse effects of coal mining 
practices; and
    (ii) Are adjacent to a site that has been or will be addressed to 
protect the public health, safety, and property from extreme danger of 
adverse effects of coal mining practices.
    (2) Priority 2: The protection of public health and safety from 
adverse effects of coal mining practices, including the restoration of 
land and water resources and the environment that:
    (i) Have been degraded by the adverse effects of coal mining 
practices; and
    (ii) Are adjacent to a site that has been or will be addressed to 
protect the public health and safety from adverse effects of coal 
mining practices.
    (3) Priority 3: The restoration of land and water resources and the 
environment previously degraded by adverse effects of coal mining 
practices, including measures for the conservation and development of 
soil, water (excluding channelization), woodland, fish and wildlife, 
recreation resources, and agricultural productivity. Priority 3 land 
and water resources that are geographically contiguous with existing or 
remediated Priority 1 or 2 problems will be considered adjacent under 
paragraphs (a)(1)(ii) or (a)(2)(ii) of this section.
    (b) This paragraph applies to State or Tribal share funds available 
under Sec. Sec.  872.14 and 872.17 of this chapter and historic coal 
funds available under Sec.  872.21 of this chapter. You may expend 
these funds to reclaim Priority 3 lands and waters, if either of the 
following conditions applies:
    (1) You have completed all of the Priority 1 and Priority 2 
reclamation in the jurisdiction of your State or Indian tribe; or
    (2) The expenditure for Priority 3 reclamation is made in 
conjunction with the expenditure of funds for Priority 1 or Priority 2 
reclamation projects, including Priority 1 or Priority 2 reclamation 
projects conducted before December 20, 2006. Expenditures under this 
paragraph must either:
    (i) Facilitate the Priority 1 or Priority 2 reclamation; or
    (ii) Provide reasonable savings towards the objective of reclaiming 
all Priority 3 land and water problems within the jurisdiction of your 
State or Indian tribe.
    34. Amend Sec.  874.14 by revising the section heading and 
paragraph (a) to read as follows:


Sec.  874.14  Water supply restoration.

    (a) Any State or Indian tribe that has not certified completion of 
all coal-related reclamation under section 411(a) of SMCRA may expend 
funds under Sec. Sec.  872.16, 872.19, 872.23, and 872.31 of this 
chapter for water supply restoration projects. For purposes of this 
section, ``water supply restoration projects'' are those that protect, 
repair, replace, construct, or enhance facilities related to water 
supplies, including water distribution facilities and treatment plants 
that have been adversely affected by coal mining practices. For funds 
awarded before December 20, 2006, any uncertified State or Indian tribe 
may expend up to 30 percent of the funds distributed to it for water 
supply restoration projects.
* * * * *
    35. Revise Sec.  874.16 to read as follows:


Sec.  874.16  Contractor eligibility.

    To receive moneys from the Fund or Treasury funds provided to 
uncertified States and Indian tribes under Sec.  872.29 of this 
chapter, every successful bidder for an AML contract must be eligible 
under Sec. Sec.  773.12, 773.13, and 773.14 of this chapter at the time 
of contract award to receive a permit or be provisionally issued a 
permit to conduct surface coal mining operations.

PART 875--CERTIFICATION AND NONCOAL RECLAMATION

    36. The authority citation for part 875 continues to read as 
follows:

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

    37. Revise the heading for part 875 to read as set forth above.
    38. Add Sec.  875.5 to read as follows:


Sec.  875.5  Definitions.

    As used in this Part--
    Reclamation plan or State reclamation plan means a plan that a 
State or Indian tribe submitted and that we approved under section 405 
of SMCRA and Part 884 of this chapter.
    39. Revise Sec. Sec.  875.10 and 875.11 to read as follows:


Sec.  875.10  Information collection.

    In accordance with 44 U.S.C. 3501 et seq., the Office of Management 
and Budget (OMB) has approved the information collection requirements 
of Part 875 and assigned it control number 1029-0103. This information 
establishes procedures and requirements for State and Indian tribes to 
conduct noncoal reclamation under abandoned mine land funding. The 
information is needed to assure compliance with SMCRA and the Omnibus 
Budget Reconciliation Act of 1990. Persons must respond to obtain a 
benefit. A Federal agency may not conduct or sponsor, and you are not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.


Sec.  875.11  Applicability.

    (a) If you are a State or Indian tribe that has not certified under 
section 411(a) of SMCRA, you must follow these noncoal reclamation 
requirements when you use State share funds under Sec.  870.16, Tribal 
share funds under Sec.  870.19, or historic coal funds under Sec.  
870.23 to conduct reclamation projects on lands or water affected by 
mining of minerals and materials other than coal.
    (b) If you are a State or Indian tribe that has certified under 
section 411(a) of SMCRA, you may use prior balance replacement funds 
under Sec.  872.31 of this chapter, certified in lieu funds under Sec.  
872.34 of this chapter, or both to:
    (1) Maintain certification as required by Sec. Sec.  875.13 and 
875.14 by addressing eligible coal problems; and
    (2) To implement the other requirements of this Part as provided 
for under an approved reclamation plan according to Part 884 of this 
chapter.
    40. Amend Sec.  875.12 by revising paragraph (c) to read as 
follows:


Sec.  875.12  Eligible lands and water before certification.

* * * * *
    (c) There is no continuing responsibility for reclamation by the 
operator, permittee, or agent of the permittee under statutes of the 
State or Federal Government or by the State as a result of bond 
forfeiture. Bond forfeiture will render lands or water ineligible only 
if the amount forfeited is sufficient to pay the total cost of the 
necessary reclamation. In cases where the forfeited bond is 
insufficient to pay the total cost of reclamation, moneys sufficient to 
complete the reclamation may be sought under Part 886 of this chapter;
* * * * *
    41. Amend Sec.  875.13 by revising paragraph (a) introductory text 
and paragraph (a)(1) and by adding paragraph (d) to read as follows:

[[Page 35260]]

Sec.  875.13  Certification of completion of coal sites.

    (a) The Governor of a State, or the equivalent head of an Indian 
tribe, may submit to the Secretary a certification of completion of 
coal sites. The certification must express the finding that the State 
or Indian tribe has achieved all existing known coal-related 
reclamation objectives for eligible lands and waters under section 404 
of SMCRA or has instituted the necessary processes to reclaim any 
remaining coal related problems. In addition to the above finding, the 
certification of completion must contain:
    (1) A description of both the rationale and the process used to 
arrive at the above finding for the completion of all coal-related 
reclamation under section 403(a)(1) through (3).
* * * * *
    (d) The Director may, on his or her own initiative, make the 
certification referred to in paragraph (a) of this section on behalf of 
your State or Indian tribe if:
    (1) Based upon information contained in the AML inventory, the 
Director determines that all coal reclamation projects meeting the 
priorities described in Sec.  874.13(a) of this chapter in the 
jurisdiction of your State or Indian tribe have been completed; and
    (2) Before making any determination, the Director provides the 
public an opportunity to comment through a notice in the Federal 
Register.
    42. Revise Sec.  875.14 to read as follows:


Sec.  875.14  Eligible lands and water after certification.

    (a) Following certification, eligible noncoal lands, waters, and 
facilities are those-(1) Which were mined or processed for minerals or 
which were affected by such mining or processing, and abandoned or left 
in an inadequate reclamation status before August 3, 1977. However, for 
Federal lands, waters, and facilities under the jurisdiction of the 
Forest Service, the eligibility date is August 28, 1974. For Federal 
lands, waters and facilities under the jurisdiction of the Bureau of 
Land Management, the eligibility date is November 26, 1980; and
    (2) For which there is no continuing reclamation responsibility 
under State or other Federal laws.
    (b) If eligible coal problems are found or occur after 
certification, you must submit to us a plan that describes the approach 
and funds that will be used to address those problems in a timely 
manner. You may address any eligible coal problems with the certified 
in lieu funds that you have already received or will receive from Sec.  
872.32 of this chapter. You may, at the direction of the State 
legislature or Tribal council, also use the prior balance replacement 
funds received from Sec.  872.29 of this chapter to address coal 
problems subsequent to certification. Any coal reclamation projects 
that you do must conform to sections 401 through 410 of SMCRA.
    43. Revise Sec.  875.16 to read as follows:


Sec.  875.16  Exclusion of certain noncoal reclamation sites.

    You, the uncertified State or Indian tribe, may not use moneys from 
the Fund or from prior balance replacement funds provided under Sec.  
872.29 of this chapter of this chapter for the reclamation of sites and 
areas designated for remedial action under the Uranium Mill Tailings 
Radiation Control Act of 1978 (42 U.S.C. 7901 et seq.) or that have 
been listed for remedial action under the Comprehensive Environmental 
Response Compensation and Liability Act of 1980 (42 U.S.C. 9601 et 
seq.).
    44. Revise Sec.  875.20 to read as follows:


Sec.  875.20  Contractor eligibility.

    Every successful bidder for any contract by an uncertified State or 
Indian tribe under this Part, or for a contract by a certified State or 
Indian tribe to undertake coal AML reclamation as required to maintain 
certification under this Part, must be eligible under Sec. Sec.  
773.12, 773.13, and 773.14 of this chapter at the time of contract 
award to receive a permit or be provisionally issued a permit to 
conduct surface coal mining operations. This section does not apply to 
any contract by a certified State or Indian tribe that is not for coal 
reclamation.

PART 876--ACID MINE DRAINAGE TREATMENT AND ABATEMENT PROGRAM

    45. The authority citation for part 876 is revised to read as 
follows:

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

    46. Revise Sec.  876.10 to read as follows:


Sec.  876.10  Information collection.

    In accordance with 44 U.S.C. 3501 et seq., the Office of Management 
and Budget (OMB) has approved the information collection requirements 
of Part 876 and assigned it control number 1029-0104. OSM will use the 
information to determine if the State's or Indian tribe's Acid Mine 
Drainage Abatement and Treatment Programs is in compliance with 
legislative mandate. States and Indian tribes are required to respond 
to obtain a benefit in accordance with SMCRA. A Federal agency may not 
conduct or sponsor, and you are not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.
    47. Revise Sec.  876.12 to read as follows:


Sec.  876.12  Eligibility.

    (a) Beginning December 20, 2006, any uncertified State or Indian 
tribe having an approved reclamation program may receive and retain, 
without regard to the limitation in section 402(g)(1)(D) of SMCRA, up 
to 30 percent of the total of the funds distributed annually to that 
State or Indian tribe under section 402(g)(1) of SMCRA (State or Tribal 
share) and section 402(g)(5) of SMCRA (historic coal funds). For funds 
awarded before December 20, 2006, any uncertified State or Indian tribe 
may retain up to 10 percent of the funds distributed to it for an acid 
mine drainage fund. All amounts set aside under this section must be 
deposited into an acid mine drainage abatement and treatment fund 
established under State or Indian tribal law.
    (b) Before depositing funds under this Part, an uncertified State 
or Indian tribe must:
    (1) Establish a special fund account providing for the earning of 
interest on fund balances; and
    (2) Specify that moneys in the account may only be used for the 
comprehensive abatement of the causes and treatment of the effects of 
acid mine drainage within qualified hydrologic units (as defined in 
paragraph (c) of this section) affected by coal mining practices.
    (c) As used in paragraph (b) of this section, ``qualified 
hydrologic unit'' means a hydrologic unit:
    (1) In which the water quality has been significantly affected by 
acid mine drainage from coal mining practices in a manner that 
adversely impacts biological resources; and
    (2) That contains lands and waters that are:
    (i) Eligible under section 404 of SMCRA and include any of the 
priorities described in section 403(a) of SMCRA; and
    (ii) The subject of the expenditure from the forfeiture of a bond 
required under section 509 of SMCRA or from other State sources to 
abate and treat acid mine drainage.
    (d) After the conditions specified in paragraphs (a) and (b) of 
this section are met, OSM may approve a grant and the State or Indian 
tribe may deposit moneys into the special fund account. The moneys so 
deposited, together with any interest earned, must be considered State 
or Indian tribal moneys.


Sec. Sec.  876.13 and 876.14  [Removed]

    48. Remove Sec. Sec.  876.13 and 876.14.

[[Page 35261]]

PART 879--ACQUISITION, MANAGEMENT, AND DISPOSITION OF LANDS AND 
WATER

    49. The authority citation for part 879 is revised to read as 
follows:

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

    50. Add Sec.  879.5 to read as follows:


Sec.  879.5  Definitions.

    As used in this Part--
    Reclamation plan or State reclamation plan means a plan that a 
State or Indian tribe submitted and that we approved under section 405 
of SMCRA and Part 884 of this chapter.


Sec.  879.10  [Removed]

    51. Remove Sec.  879.10.
    52. Amend Sec.  879.11 by revising paragraph (a) introductory text, 
paragraph (a)(2), paragraph (b), and paragraph (c) to read as follows:


Sec.  879.11  Land eligible for acquisition.

    (a) We may acquire land adversely affected by past coal mining 
practices with moneys from the Fund. If approved in advance by us, you, 
an uncertified State or Indian tribe, may also acquire land adversely 
affected by past coal mining practices with moneys from the Fund or 
with prior balance replacement funds provided under Sec.  872.29 of 
this chapter. Our approval must be in writing, and we must make a 
finding that the land acquisition is necessary for successful 
reclamation and that--
* * * * *
    (2) Permanent facilities will be constructed on the land for the 
restoration, reclamation, abatement, control, or prevention of the 
adverse effects of past coal mining practices. For the purposes of this 
paragraph, ``permanent facility'' means any structure that is built, 
installed or established to serve a particular purpose or any 
manipulation or modification of the site that is designed to remain 
after the reclamation activity is completed, such as a relocated stream 
channel or diversion ditch.
    (b) You, an uncertified State or Indian tribe, if approved in 
advance by us, may acquire coal refuse disposal sites, including the 
coal refuse, with moneys from the Fund and with prior balance 
replacement funds provided under Sec.  872.29 of this chapter. We, OSM, 
also may use moneys from the Fund to acquire coal refuse disposal 
sites, including the coal refuse.
    (1) Before the approval of the acquisition, the reclamation program 
seeking to acquire the site will make a finding in writing that the 
acquisition is necessary for successful reclamation and will serve the 
purposes of their reclamation program.
    (2) Where an emergency situation exists and a written finding as 
set out in Sec.  877.14 of this chapter has been made, we may acquire 
lands where public ownership is necessary and will prevent recurrence 
of the adverse effects of past coal mining practices.
    (c) Land adversely affected by past coal mining practices may be 
acquired by us if the acquisition is an integral and necessary element 
of an economically feasible plan or project to construct or 
rehabilitate housing which meets the specific requirements in section 
407(h) of SMCRA.
* * * * *
    53. Amend Sec.  879.15 by revising paragraph (h) to read as 
follows:


Sec.  879.15  Disposition of reclaimed land.

* * * * *
    (h) All moneys received from disposal of land under this Part must 
be returned to us. We will handle all moneys received under this 
paragraph as unused funds in accordance with Sec. Sec.  885.19 and 
886.20 of this chapter.

PART 880--MINE FIRE CONTROL

    54. The authority citation for part 880 is revised to read as 
follows:

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

    55. Amend Sec.  880.5 by adding paragraph (h) to read as follows:


Sec.  880.5  Definitions.

* * * * *
    (h) Reclamation plan or State reclamation plan means a plan that a 
State or Indian tribe submitted and that we approved under section 405 
of SMCRA and Part 884 of this chapter.

PART 882--RECLAMATION ON PRIVATE LAND

    56. The authority citation for part 882 is revised to read as 
follows:

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

    57. Revise Sec.  882.10 to read as follows:


Sec.  882.10  Information collection.

    In accordance with 44 U.S.C. 3501 et seq., the Office of Management 
and Budget (OMB) has approved the information collection requirements 
of Part 882 and assigned it control number 1029-0057. This information 
is being collected to meet the mandate of section 408 of SMCRA, which 
allows the State or Indian tribe to file liens on private property that 
has been reclaimed under certain conditions. This information will be 
used by the regulatory authority to ensure that the State or Indian 
tribe has sufficient programmatic capability to file liens to recover 
costs for reclaiming private lands. States and Indian tribes are 
required to respond to obtain a benefit in accordance with SMCRA. A 
Federal agency may not conduct or sponsor, and you are not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number.
    58. Amend Sec.  882.13 by revising paragraph (a)(1) to read as 
follows:


Sec.  882.13  Liens.

* * * * *
    (a) * * *
    (1) A lien must not be placed against the property of a surface 
owner who did not consent to, participate in or exercise control over 
the mining operation which necessitated the reclamation work.
* * * * *

PART 884--STATE RECLAMATION PLANS

    59. The authority citation for part 884 is revised to read as 
follows:

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

    60. Add Sec.  884.5 to read as follows:


Sec.  884.5  Definitions.

    As used in this Part--
    Reclamation plan or State reclamation plan means a plan that a 
State or Indian tribe submitted and that we approved under section 405 
of SMCRA and Part 884 of this chapter.
    61. Revise Sec.  884.11 to read as follows:


Sec.  884.11  State eligibility.

    You, a State or Indian tribe, are eligible to submit a reclamation 
plan if you have eligible lands or water as defined in Sec.  700.5 of 
this chapter within your jurisdiction. We may approve your proposed 
reclamation plan if you have an approved State regulatory program under 
section 503 of SMCRA, and you meet the other requirements of this 
chapter and SMCRA. The States of Tennessee and Missouri are exempt from 
the requirement for an approved State regulatory program by section 
402(g)(8)(B) of SMCRA. The Navajo, Hopi, and Crow Indian tribes are 
exempt from the requirement for an approved regulatory program by 
section 405(k) of SMCRA.
    62. Amend Sec.  884.17 by revising the section heading and 
paragraph (b) to read as follows:


Sec.  884.17  Other uses by certified States and Indian tribes.

* * * * *
    (b) Grant applications for uses other than coal reclamation by 
certified States and Indian tribes may be submitted in accordance with 
Sec.  885.15 of this chapter.

[[Page 35262]]

    63. Add part 885 as follows:

PART 885--GRANTS FOR CERTIFIED STATES AND INDIAN TRIBES

Sec.
885.1 What does this Part do?
885.5 Definitions.
885.10 Information collection.
885.11 Who is eligible for a grant?
885.12 What can I use grant funds for?
885.13 What are the maximum grant amounts?
885.14 How long is my grant?
885.15 How do I apply for a grant?
885.16 After OSM approves my grant, what responsibilities do I have?
885.17 How can my grant be amended?
885.18 What audit, accounting, and administrative requirements must 
I meet?
885.19 What happens to unused funds from my grant?
885.20 What must I report?
885.21 What happens if I do not comply with applicable Federal law 
or the terms of my grant?
885.22 When and how can my grant be terminated for convenience?

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


Sec.  885.1  What does this Part do?

    This Part sets forth procedures for grants to you, a State or 
Indian tribe that has certified under Sec.  875.13 of this chapter that 
all known coal reclamation problems in your State or on Indian lands 
within your jurisdiction have been addressed. OSM's ``Final Guidelines 
for Reclamation Programs and Projects'' (66 FR 31250, June 11, 2001) 
may be used if applicable.


Sec.  885.5  Definitions.

    As used in this Part--
    Award means to approve our grant agreement authorizing you to draw 
down and expend program funds.
    Distribute means to annually assign funds to a specific State or 
Indian tribe. After distribution, funds are available for award in a 
grant to that specific State or Indian tribe.
    Reclamation plan or State reclamation plan means a plan that a 
State or Indian tribe submitted and that we approved under section 405 
of SMCRA and Part 884 of this chapter.


Sec.  885.10  Information collection.

    In accordance with 44 U.S.C. 3501 et seq., the Office of Management 
and Budget (OMB) has approved the information collection requirements 
for all Title IV grants and assigned clearance number 1029-0059. This 
information is being collected to obtain an estimate from you, the 
certified State or Indian tribe, of the funds you believe necessary to 
implement your program and to provide OSM with a means to measure 
performance results under the Government Performance and Results Act 
through your obligations of funds. Certified States and Indian tribes 
are required to respond to obtain a benefit in accordance with SMCRA. A 
Federal agency may not conduct or sponsor, and you are not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number.


Sec.  885.11  Who is eligible for a grant?

    You are eligible for grants under this Part if:
    (a) You are a State or Indian tribe with a reclamation plan 
approved under Part 884 of this chapter; and
    (b) You have certified under Sec.  875.13 of this chapter that all 
known coal problems in your State or on Indian lands in your 
jurisdiction have been addressed.


Sec.  885.12  What can I use grant funds for?

    (a) For all awards under this Part, you must use moneys for 
activities authorized in SMCRA and included in your approved 
reclamation plan or described in the grant application. In addition, 
you may use moneys granted under this Part to administer your approved 
reclamation program.
    (b) You may use grant funds as established for each type of funds 
you receive. You may use prior balance replacement funds as provided 
under Sec.  872.31 of this chapter. You may use certified in lieu funds 
as provided under Sec.  872.34 of this chapter. You may use any moneys 
which may be available to you from the Fund for noncoal reclamation as 
authorized under section 411 of SMCRA and Part 875 of this chapter.
    (c) You may use grant funds for any allowable cost as determined by 
the OMB cost principles in Circular A-87.


Sec.  885.13  What are the maximum grant amounts?

    (a) You may apply at any time for a grant of any or all of the 
Title IV funds that are available to you.
    (b) We will not award an amount greater than the total funds 
distributed to your State or Indian tribe in the current annual fund 
distribution less any previous awards of current year funds, plus any 
funds distributed to you in previous years but not awarded, plus any 
unexpended funds recovered from previous grants and made available to 
you under Sec.  885.19 of this chapter.
    (c) Funds for the current fiscal year will be available for award 
after the annual fund distribution described in Sec.  872.13 of this 
chapter.
    (d) Whenever you request it, we will give you information on the 
amounts and types of funds that are currently available to you.


Sec.  885.14  How long is my grant?

    The performance period for your grant will be the time period you 
request in your grant application.


Sec.  885.15  How do I apply for a grant?

    (a) You must use application forms and procedures specified by OSM.
    (b) We will award your grant as soon as practicable but no more 
than 30 days after we receive your complete application.
    (c) If your application is not complete, we will inform you as soon 
as practicable of the additional information we need to receive from 
you before we can process the award.
    (d) You must agree to expend the funds of the grant in accordance 
with SMCRA, applicable Federal laws and regulations, and applicable OMB 
and Treasury Circulars.


Sec.  885.16  After OSM approves my grant, what responsibilities do I 
have?

    (a) When we award your grant, we will send you a written grant 
agreement stating the terms of the grant.
    (b) After you are awarded a grant, you may assign functions and 
funds to other Federal, State, or local organizations. However, we will 
hold you responsible for the overall administration of that grant, 
including the proper use of funds and reporting.
    (c) The grant award constitutes an obligation of Federal funds. You 
accept the grant and its conditions once you initiate work under the 
agreement or draw down awarded funds.
    (d) Although we have approved the grant agreement, you must ensure 
that any applicable laws, clearances, permits, or requirements are met 
before you expend funds for projects other than coal reclamation under 
Part 874.
    (e) If you conduct a coal reclamation project under Part 874 of 
this chapter, you must not expend any funds until we have ensured that 
all necessary actions have been taken by you and us to ensure 
compliance with the National Environmental Policy Act of 1969 (NEPA) 
(42 U.S.C. 4321 et seq.) and any other applicable laws, clearances, 
permits or requirements.
    (f) To the extent technologically and economically feasible, you 
must use fuel other than petroleum or natural gas for all public 
facilities that are planned, constructed, or modified in whole or in 
part with Title IV grant funds.
    (g) You must not expend more funds than we have awarded. Our award 
of any grant does not commit or obligate the United States to award any

[[Page 35263]]

continuation grant or to enter into any grant revision, including grant 
increases to cover cost overruns.


Sec.  885.17  How can my grant be amended?

    (a) A grant amendment is a change of terms or conditions of the 
grant agreement. An amendment may be initiated by you or by us.
    (b) You must promptly notify us in writing, or we must promptly 
notify you in writing, of events or proposed changes that may require a 
grant amendment.
    (c) All requirements and procedures for grant amendments will 
follow 43 CFR part 12.
    (d) We must award your amended grant agreement within 20 days of 
receiving your request.


Sec.  885.18  What audit, accounting, and administrative requirements 
must I meet?

    (a) You must comply with the audit requirements of the OMB Circular 
A-133.
    (b) You must follow procedures governing grant accounting, payment, 
records, property, and management contained in 43 CFR part 12.


Sec.  885.19  What happens to unused funds from my grant?

    All program grant funds are available until expended. If there are 
any unexpended funds after your grant is completed, we will deobligate 
the funds when we close your grant. We will make these unused funds 
available for re-award to the same certified State or Indian tribe to 
which they were originally distributed. You may apply for unused funds 
whenever you choose to request them either in a new grant award or as 
an amendment to an existing open grant.


Sec.  885.20  What must I report?

    (a) For each grant, you must annually report to us the performance 
and financial information that we request.
    (b) Upon completion of each grant, you must report to us final 
performance and financial information that we request.
    (c) You must use the AML inventory to maintain a current list of 
AML problems and to report annual reclamation accomplishments with 
grant funds.
    (1) If you conduct reclamation projects, you must update the AML 
inventory for each reclamation project you complete as you complete it.
    (2) We must approve any amendments to the AML inventory after 
December 20, 2006. We define ``amendment'' as any coal problems added 
to the AML inventory in a new or existing problem area.


Sec.  885.21  What happens if I do not comply with applicable Federal 
law or the terms of my grant?

    If you or your subgrantee materially fails to comply with an award, 
a reclamation plan, or a Federal statute or regulation, including 
statutes relating to nondiscrimination, we may take appropriate 
remedial actions. Enforcement actions and procedures must follow 43 CFR 
part 12.


Sec.  885.22  When and how can my grant be terminated for convenience?

    Either you or we may terminate the grant for convenience following 
the procedures in 43 CFR part 12.
    64. Revise part 886 to read as follows:

PART 886--RECLAMATION GRANTS FOR UNCERTIFIED STATES AND INDIAN 
TRIBES

Sec.
886.1 What does this Part do?
886.5 Definitions.
886.10 Information collection.
886.11 Who is eligible for a grant?
886.12 What can I use grant funds for?
886.13 What are the maximum grant amounts?
886.14 How long will my grant be?
886.15 How do I apply for a grant?
886.16 After OSM approves my grant, what responsibilities do I have?
886.17 How can my grant be amended?
886.18 What audit and administrative requirements must I meet?
886.19 How must I account for grant funds?
886.20 What happens to unused funds from my grant?
886.21 What must I report?
886.22 What records must I maintain?
886.23 What actions can OSM take if I do not comply with the terms 
of my grant?
886.24 What procedures will OSM follow to reduce, suspend, or 
terminate my grant?
886.25 How can I appeal a decision to reduce, suspend, or terminate 
my grant?
886.26 When and how can my grant be terminated for convenience?
886.27 What special procedures apply to Indian lands not subject to 
an approved Tribal reclamation program?

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


Sec.  886.1  What does this Part do?

    This Part sets forth procedures for grants to you, an uncertified 
State or Indian tribe, to reclaim eligible lands and water and conduct 
other activities necessary to carry out your approved reclamation plan. 
OSM's ``Final Guidelines for Reclamation Programs and Projects'' (66 FR 
31250, June 11, 2001) should be used as applicable.


Sec.  886.5  Definitions.

    As used in this Part--
    Award means to approve our grant agreement authorizing you to draw 
down and expend program funds.
    Distribute means to annually assign funds to a specific State or 
Indian tribe. After distribution, funds are available for award in a 
grant to that specific State or Indian tribe.
    Reclamation plan or State reclamation plan means a plan that a 
State or Indian tribe submitted and that we approved under section 405 
of SMCRA and Part 884 of this chapter.


Sec.  886.10  Information collection.

    In accordance with 44 U.S.C. 3501 et seq., the Office of Management 
and Budget (OMB) has approved the information collection requirements 
of Part 886, and Forms OSM-47, OSM-49, and OSM-51, and assigned 
clearance number 1029-0059. This information is being collected to 
obtain an estimate from you the uncertified State or Indian tribe of 
the funds you believe necessary to implement your reclamation program 
and to provide OSM with a means to measure performance results under 
the Government Performance and Results Act through State and Tribal 
obligations of funds. Uncertified States and Indian tribes are required 
to respond to obtain a benefit in accordance with SMCRA. A Federal 
agency may not conduct or sponsor, and you are not required to respond 
to, a collection of information unless it displays a currently valid 
OMB control number.


Sec.  886.11  Who is eligible for a grant?

    You are eligible for grants under this Part if:
    (a) You are a State or Indian tribe with a reclamation plan 
approved under Part 884 of this chapter; and
    (b) You have not certified that all known coal problems in your 
State or on Indian lands in your jurisdiction have been addressed.


Sec.  886.12  What can I use grant funds for?

    (a) You must use moneys granted under this Part to administer your 
approved reclamation program and to carry out the specific reclamation 
and other activities authorized in SMCRA as included in your 
reclamation plan or your grant application.
    (b) We award grants for reclamation of eligible lands and water in 
accordance with sections 404 and 409 of SMCRA and Sec. Sec.  874.12 and 
875.12 of this chapter, and in accordance with the priorities stated in 
section 403 of SMCRA and Sec.  874.13 of this chapter.
    (c) You may use grant funds as established in this chapter for each 
type of funds you receive in your AML grant. You may use State share 
funds as provided in Sec.  872.16 of this chapter; Tribal share funds 
as in Sec.  872.19 of this chapter; historic coal funds as in

[[Page 35264]]

Sec.  872.23 of this chapter; minimum program make up funds as in Sec.  
872.28 of this chapter; prior balance replacement funds as in Sec.  
872.31 of this chapter; and federal expense funds as in Sec.  872.25 of 
this chapter and in the appropriation.
    (d) You may use grant funds for acquisition of land or interests in 
land, and any mineral or water rights associated with the land, for up 
to 90 percent of the costs.
    (e) You may use grant funds only for costs which are allowable as 
determined by OMB cost principles in Circular A-87.


Sec.  886.13  What are the maximum grant amounts?

    (a) You may apply at any time for a grant of any or all of the 
program funds that are distributed to you.
    (b) We will not award an amount greater than the total funds 
distributed to your State or Indian tribe in the current annual fund 
distribution, less any previous awards of current year funds, plus any 
funds distributed to you in previous years but not awarded, plus any 
unexpended funds recovered from previous grants and made available to 
you under Sec.  886.20 of this chapter.
    (c) Funds for the current fiscal year will be available for award 
after the annual fund distribution described in Sec.  872.13 of this 
chapter.
    (d) Whenever you request it, we will give you information on the 
amounts and types of funds that are currently available to you.


Sec.  886.14  How long will my grant be?

    (a) We will approve a grant period on the basis of the information 
contained in the grant application showing that projects to be funded 
will fulfill the objectives of SMCRA and the approved reclamation plan.
    (b) The grant period will normally be for 3 years.
    (c) We may extend the grant period at your request. We will 
normally approve one extension for up to one additional year.
    (d) The grant period for funding your administrative costs will not 
normally exceed the first year of the grant.
    (e) At your request, we may award or extend grants containing State 
or Tribal share funds distributed to you in Fiscal Years 2008, 2009, or 
2010 for a budget period of up to five years.


Sec.  886.15  How do I apply for a grant?

    (a) You must use application forms and procedures specified by OSM.
    (b) We will approve or disapprove your grant application within 60 
days of receipt.
    (c) If we do not approve your application, we will inform you in 
writing of the reasons for disapproval. We may propose modifications if 
appropriate. You may resubmit the application or appropriate revised 
portions of the application. We will process the revised application as 
an original application.
    (d) You must agree to carry out activities funded by the grant in 
accordance with SMCRA, applicable Federal laws and regulations, and 
applicable OMB and Treasury Circulars.
    (e) We will not require complete copies of plans and specifications 
for projects either before the grant is approved or at the start of the 
project. However, after the start of the project, we may review your 
plans and specifications at your office, the project site, or any other 
appropriate site.


Sec.  886.16  After OSM approves my grant, what responsibilities do I 
have?

    (a) When we award your grant, we will send you a written grant 
agreement stating the terms of the grant.
    (b) After you are awarded a grant, you may assign functions and 
funds to other Federal, State, or local agencies. However, we will hold 
you responsible for the overall administration of that grant, including 
the proper use of funds and reporting.
    (c) The grant award constitutes an obligation of Federal funds. You 
accept the grant and its conditions once you initiate work under the 
agreement or draw down awarded funds.
    (d) Although we have approved the grant agreement, you must not 
expend any construction funds until you receive a written authorization 
to proceed with reclamation on the individual project. Our 
Authorization to Proceed ensures that both you and we have taken all 
actions necessary to ensure compliance with the National Environmental 
Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and any other 
applicable laws, clearances, permits, or requirements.
    (e) You must enter coal problems in the AML inventory before you 
expend funds on design or construction activities for a site. We must 
approve any amendments to the AML inventory made after December 20, 
2006. For purposes of this section, we define ``amendment'' as any coal 
problem added to the AML inventory in a new or existing problem area 
and any Priority 3 coal problem in the AML inventory that is elevated 
to either Priority 1 or Priority 2 status.
    (1) For emergency projects conducted under section 410 of SMCRA, 
our finding that an emergency condition exists constitutes our approval 
for the abandoned mine lands problem to be entered into the AML 
inventory.
    (2) We must approve amendments to the AML inventory for non-
emergency coal problems before you, the State or Indian tribe, begin 
project development or design or use funds for construction activities. 
In projects where development and design is minimal, this approval may 
occur during the Authorization to Proceed process.
    (f) To the extent technologically and economically feasible, you 
must use fuel other than petroleum or natural gas for all public 
facilities that are planned, constructed, or modified in whole or in 
part with abandoned mine land grant funds.
    (g) You must not expend more funds than we have awarded. Our award 
of any grant does not commit or obligate the United States to award any 
continuation grant or to enter into any grant revision, including grant 
increases to cover cost overruns.


Sec.  886.17  How can my grant be amended?

    (a) A grant amendment is a change of the terms or conditions of the 
grant agreement. An amendment may be initiated by you or by us.
    (b) You must promptly notify us in writing, or we must promptly 
notify you in writing, of events or proposed changes that may require a 
grant amendment.
    (c) All procedures for grant amendments will follow 43 CFR part 12.
    (d) We must approve or disapprove the amendment within 30 days of 
receiving your request.


Sec.  886.18  What audit and administrative requirements must I meet?

    (a) You must comply with the audit requirements of the OMB Circular 
A-133.
    (b) You must follow administrative procedures governing grant 
payments, property, and related requirements contained in 43 CFR part 
12.


Sec.  886.19  How must I account for grant funds?

    You must do all of the following in accordance with the 
requirements of 43 CFR part 12:
    (a) Accurately and timely account for grant funds;
    (b) Adequately safeguard all funds, property, and other assets and 
assure that they are used solely for authorized purposes;
    (c) Provide a comparison of actual amounts spent with budgeted 
amounts for each grant;
    (d) Request any cash advances as closely as possible to the actual 
time of the disbursement; and

[[Page 35265]]

    (e) Design a systematic method to assure timely and appropriate 
resolution of audit findings and recommendations.


Sec.  886.20  What happens to unused funds from my grant?

    (a) If there are any unexpended funds after your grant is 
completed, we will deobligate the funds when we close your grant. We 
will treat unused funds as follows:
    (1) We will transfer any State share funds under Sec.  872.14 of 
this chapter or Tribal share funds under Sec.  872.17 that were not 
expended within three years of the date they were awarded in a grant, 
except five years for funds awarded in Fiscal Years 2008, 2009, and 
2010, to historic coal funds, Sec.  872.21 of this chapter. We will 
distribute any funds transferred to historic coal in the next annual 
distribution in the same way as historic coal funds from fee 
collections during that fiscal year.
    (2) We will hold any unused Federal expense funds under Sec.  
872.24 of this chapter for distribution to any State or Indian tribe as 
needed for the activity for which the funds were appropriated.
    (3) We will make unused funds of all other types available for re-
award to the same State or Indian tribe to which they were originally 
distributed. This includes historic coal funds under Sec.  872.21 of 
this chapter, minimum program make up funds under Sec.  872.26 of this 
chapter, and prior balance replacement funds under Sec.  872.29 of this 
chapter.
    (b) If you have any State share funds or Tribal share funds that 
were distributed to you in an annual distribution under Sec. Sec.  
872.15 or 872.18 of this chapter but that were not awarded to you in 
grant within 3 years of the date they were distributed, or 5 years for 
funds distributed in Fiscal Years 2008, 2009, and 2010, we will 
transfer the unawarded funds to the historic coal fund under Sec.  
872.21 of this chapter and distribute them in the next annual 
distribution.


Sec.  886.21  What must I report?

    (a) For each grant, you must annually report to us the performance 
and financial information that we specify.
    (b) Upon completion of each grant, you must submit to us final 
performance, financial, and property reports, and any other information 
that we specify.
    (c) When you complete each reclamation project, you must update the 
AML inventory.


Sec.  886.22  What records must I maintain?

    You must maintain complete records in accordance with 43 CFR Part 
12. Your records must support the information you reported to us. This 
includes, but is not limited to, books, documents, maps, and other 
evidence. Accounting records must document procedures and practices 
sufficient to verify:
    (a) The amount and use of all Title IV funds received; and
    (b) The total direct and indirect costs of the reclamation program 
for which you received the grant.


Sec.  886.23  What actions can OSM take if I do not comply with the 
terms of my grant?

    (a) If you, or your subgrantee, fail to comply with the terms of 
your grant, we may take one or more of the following remedial actions, 
as appropriate in the circumstances:
    (1) Temporarily withhold cash payments pending your correction of 
the deficiency;
    (2) Disallow (that is, deny both use of Federal funds and matching 
credit for non-Federal funds) all or part of the cost of the activity 
or action not in compliance;
    (3) Wholly or partly reduce, suspend or terminate the current award 
for your program;
    (4) Withhold further grant awards for the program; or
    (5) Take other remedies that may be legally available.
    (b) If we terminate your State regulatory administration and 
enforcement grant, provided under Part 735 of this chapter, for failure 
to implement, enforce, or maintain an approved State regulatory program 
or any part thereof, we will terminate the grant awarded under this 
Part. This paragraph does not apply to the States of Missouri or 
Tennessee under section 402(g)(8)(B) of SMCRA, or to the Navajo, Hopi 
and Crow Indian tribes under section 405(k) of SMCRA.
    (c) If you fail to enforce the financial interest provisions of 
Part 705 of this chapter, we will terminate the grant.
    (d) If you fail to submit reports required by this Part or Part 705 
of this chapter, we will take appropriate remedial actions. We may 
terminate the grant.
    (e) If you fail to submit a reclamation plan amendment as required 
by Sec.  884.15 of this chapter, we may reduce, suspend, or terminate 
all existing AML grants in whole or in part or may refuse to process 
all future grant applications.
    (f) If you are not in compliance with all Federal statutes relating 
to nondiscrimination, including but not limited to the following, we 
will terminate the grant:
    (1) Title VI of the Civil Rights Act of 1964, Pub. L. 88-352, 78 
Stat. 252 (42 U.S.C. 2000d et seq.). ``Nondiscrimination in Federally 
Assisted Programs,'' which provides that no person in the United States 
shall on the grounds of race, color, or national origin be excluded 
from participation in, be denied the benefits of, or be subjected to 
discrimination under any program or activity receiving Federal 
financial assistance, and the implementing regulations in 43 CFR part 
17.
    (2) Executive Order 11246, as amended by Executive Order 11375, 
``Equal Employment Opportunity,'' requiring that employees or 
applicants for employment not be discriminated against because of race, 
creed, color, sex, or national origin, and the implementing regulations 
in 40 CFR part 60.
    (3) Section 504 of the Rehabilitation Act of 1973, Pub. L. 93-112, 
87 Stat. 355 (29 U.S.C. 794), as amended by Executive Order 11914, 
``Nondiscrimination with Respect to the Handicapped in Federally 
Assisted Programs.''


Sec.  886.24  What procedures will OSM follow to reduce, suspend, or 
terminate my grant?

    We will use the following procedures to reduce, suspend, or 
terminate your grant:
    (a) We must give you at least 30 days written notice of intent to 
reduce, suspend, or terminate a grant. An OSM official authorized to 
approve your grant must sign our notice of intent. We must send this 
notice by certified mail, return receipt requested. Our notice must 
include the reasons for the proposed action and the proposed effective 
date of the action.
    (b) We must give you opportunity for consultation and remedial 
action before we reduce or terminate a grant.
    (c) We must notify you in writing of the termination, suspension, 
or reduction of the grant. The notice must be signed by the authorized 
approving official and sent by certified mail, return receipt 
requested.
    (d) Upon termination, you must refund to us that remaining portion 
of the grant money not encumbered. However, you may retain any portion 
of the grant that is required to meet contractual commitments made 
before the effective date of termination.
    (e) You must not make any new commitments of grant funds after 
receiving notification of our intent to terminate the grant without our 
approval.
    (f) We may allow termination costs as determined by applicable 
Federal cost principles listed in OMB Circular A-87.

[[Page 35266]]

Sec.  886.25  How can I appeal a decision to reduce, suspend, or 
terminate my grant?

    (a) Within 30 days of our decision to reduce, suspend, or terminate 
a grant, you may appeal the decision to the Director.
    (1) You must include in your appeal a statement of the decision 
being appealed and the facts that you believe justify a reversal or 
modification of the decision.
    (2) The Director must decide the appeal within 30 days of receipt.
    (b) Within 30 days of a decision by the Director to reduce, 
suspend, or terminate a grant, you may appeal the decision to the 
Department of the Interior's Office of Hearings and Appeals. You must 
include in the appeal a statement of the decision being appealed and 
the facts that you believe justify a reversal or modification of the 
decision.


Sec.  886.26  When and how can my grant be terminated for convenience?

    Either you or we may terminate or reduce a grant if both parties 
agree that continuing the program would not produce benefits worth the 
additional costs. We will handle a termination for convenience as an 
amendment to the grant to be approved by the OSM official authorized to 
approve your grant.


Sec.  886.27  What special procedures apply to Indian lands not subject 
to an approved Tribal reclamation program?

    (a) This section applies to Indian lands not subject to an approved 
Tribal reclamation program. The Director is authorized to mitigate 
emergency situations or extreme danger situations arising from past 
mining practices and begin reclamation of other areas determined to 
have high priority on such lands.
    (b) The Director is authorized to receive proposals from Indian 
tribes for projects that should be carried out on Indian lands subject 
to this section and to carry out these projects under Parts 872 through 
882 of this chapter.
    (c) For reclamation activities carried out under this section on 
Indian lands, the Director shall consult with the Indian tribe and the 
Bureau of Indian Affairs office having jurisdiction over the Indian 
lands.
    (d) If a proposal is made by an Indian tribe and approved by the 
Director, the Tribal governing body shall approve the project plans. 
The costs of the project may be charged against Federal expense funds 
under Sec.  872.25 of this chapter.
    (e) Approved projects may be carried out directly by the Director 
or through such arrangements as the Director may make with the Bureau 
of Indian Affairs or other agencies.

PART 887--SUBSIDENCE INSURANCE PROGRAM GRANTS

    65. The authority citation for part 887 continues to read as 
follows:

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

    66. Revise Sec.  887.1 to read as follows:


Sec.  887.1  Scope.

    This Part sets forth the procedures for grants to you, a State or 
Indian tribe with an approved reclamation plan to establish, 
administer, and operate a self-sustaining individual State or Indian 
tribe administered program to insure private property against damages 
caused by land subsidence resulting from underground coal mining.


Sec.  887.3  [Removed]

    67. Remove Sec.  887.3.
    68. Amend Sec.  887.5 by revising the definition of ``Self-
sustaining,'' removing the definition of ``State Administered'' and 
adding the definitions of ``reclamation plan or State reclamation 
plan'' and ``State or Indian tribe administered'' to read as follows:


Sec.  887.5  Definitions.

* * * * *
    Reclamation plan or State reclamation plan means a plan that a 
State or Indian tribe submitted and that we approved under section 405 
of SMCRA and Part 884 of this chapter.
    Self-sustaining means maintaining an insurance rate structure which 
is designed to be actuarially sound. Self-sustaining requires that 
State or Indian tribal subsidence insurance programs provide for 
recovery of payments made in settlement for damages from any party 
responsible for the damages under the law of the State or Indian tribe. 
Actuarial soundness implies that funds are sufficient to cover expected 
losses and expenses including a reasonable allowance for underwriting 
services and contingencies. Self-sustaining must not preclude the use 
of funds from other non-Federal sources.
    State or Indian tribe administered means administered either 
directly by a State or Indian tribe or for a State or Indian tribe 
through a State or Indian tribal authorized commission, board, 
contractor such as an insurance company, or other entity subject to 
State or Indian tribal direction.
    69. Revise Sec. Sec.  887.10 through 887.13 to read as follows:


Sec.  887.10  Information collection.

    In accordance with 44 U.S.C. 3501 et seq., the OMB has approved the 
information collection requirements of Part 887 and assigned it control 
number 1029-0107. This information is being collected to support State 
and Indian tribal grant requests for moneys for the establishment, 
administration, and operation of self-sustaining State or Indian tribal 
administered subsidence insurance programs. States and Indian tribes 
are required to respond to obtain a benefit in accordance with SMCRA. A 
Federal agency may not conduct or sponsor, and you are not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number.


Sec.  887.11  Eligibility for grants.

    You are eligible for grants under this Part if you are a State or 
Indian tribe with a reclamation plan approved under Part 884 of this 
chapter. If you are uncertified, you must have State share funds 
available under Sec.  872.14 of this chapter or Tribal share funds 
available under Sec.  872.17 of this chapter. If you have certified 
completion of coal reclamation under section 411(a) of SMCRA, you must 
have certified in lieu funds available under Sec.  872.32 of this 
chapter, or prior balance replacement funds available under Sec.  
872.29 of this chapter if the State legislature or Tribal council has 
established this purpose.


Sec.  887.12  Coverage and amount of grants.

    (a) You may use moneys granted under this Part to develop, 
administer, and operate a subsidence insurance program to insure 
private property against damages caused by subsidence resulting from 
underground coal mining. The moneys may be used to cover your costs for 
services and materials according to OMB cost principles, Circular A-87. 
You may use eligible grant moneys to cover capitalization requirements 
and initial reserve requirements mandated by applicable State or Tribal 
law provided use of such moneys is consistent with the 43 CFR part 12.
    (b) You must submit a grant application under the procedures of 
Part 885 of this chapter for certified States and Indian tribes or Part 
886 of this chapter for uncertified States or Indian tribes. Your 
application must include the following:
    (1) A narrative statement describing how the subsidence insurance 
program is ``State or Indian tribe administered''; and
    (2) A narrative statement describing how the funds requested will 
achieve a self-sustaining individual State or Indian tribe administered 
program to insure private property against subsidence resulting from 
underground coal mining.
    (c) Grants awarded to you under this Part cannot exceed a 
cumulative total

[[Page 35267]]

over the lifetime of the program of $3 million.
    (d) You may not use grant moneys from the Fund for lands that are 
ineligible for reclamation funding under Title IV of SMCRA.
    (e) Insurance premiums must be considered program income and must 
be used to further eligible subsidence insurance program objectives in 
accordance with 43 CFR part 12.


Sec.  887.13  Grant period.

    The grant funding period must not exceed 8 years from the time we 
approve the grant. You must return any unexpended funds remaining at 
the end of any grant period to us according to 43 CFR part 12.
    70. Revise Sec.  887.15 to read as follows:


Sec.  887.15  Grant administration requirements and procedures.

    The requirements and procedures for grant administration set forth 
in Part 885 of this chapter for reclamation grants to certified States 
and Indian tribes or in Part 886 of this chapter for reclamation grants 
to uncertified States and Indian tribes must be used for subsidence 
insurance funds in grants.

[FR Doc. E8-13310 Filed 6-19-08; 8:45 am]
BILLING CODE 4310-05-P