[Federal Register Volume 82, Number 220 (Thursday, November 16, 2017)]
[Rules and Regulations]
[Pages 53411-53414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24707]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 917

[KY-254-FOR; OSM-2011-0005; S1D1SSS08011000SX064A000189S180110; 
S2D2SSS08011000SX066A00018XS501520]


Kentucky Regulatory Program

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

ACTION: Final rule; approval of amendment.

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SUMMARY: We are approving an amendment to the Kentucky regulatory 
program (hereinafter, the ``Kentucky program'') under the Surface 
Mining Control and Reclamation Act of 1977 (SMCRA or the Act). Kentucky 
submitted a proposed amendment to OSMRE that includes revisions to the 
Kentucky Revised Statutes (KRS) as authorized by House Bill 385 (HB 
385), regarding bonding of surface coal mining and reclamation 
operations.

DATES: The effective date is December 18, 2017.

FOR FURTHER INFORMATION CONTACT: Robert Evans, Telephone: (859) 260-
3900. Email: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background on the Kentucky Program
II. Description of the Amendment
III. OSMRE's Findings
IV. Summary and Disposition of Comments
V. OSMRE's Decision
VI. Procedural Determinations

I. Background on the Kentucky Program

    Section 503(a) of the Act permits a State to assume primacy for the 
regulation of surface coal mining and reclamation operations on non-
Federal and non-Indian lands within its borders by demonstrating that 
its program includes, among other things, State laws and regulations 
that govern surface coal mining and reclamation operations in 
accordance with the Act and consistent with the Federal regulations. 
See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the 
Secretary of the Interior conditionally approved the Kentucky program 
on May 18, 1982. You can find background information on the Kentucky 
program, including the Secretary's findings, the disposition of 
comments, and conditions of approval of the Kentucky program in the May 
18, 1982, Federal Register (47 FR 21404, 21434). You can also find 
later actions concerning Kentucky's program and program amendments at 
30 CFR 917.11, 917.12, 917.13, 917.15, 917.16, and 917.17.

II. Description of the Proposed Amendment

    On May 10, 2011, Kentucky submitted an amendment to OSMRE for 
approval that proposed bonding revisions to the KRS as authorized by HB 
385, which passed during the State's regular 2011 legislative session. 
HB 385 was passed in response to OSMRE's findings in its January 5, 
2011, National Priority Oversight Evaluation of the Adequacy of 
Kentucky Reclamation Performance Bond Amounts (National Oversight 
Study) report. In that report, OSMRE oversight and programmatic reviews 
identified that current reclamation performance bonds in Kentucky are 
not sufficient to complete the reclamation required in approved 
permits. On February 3, 2011, the Kentucky Department for Natural 
Resources (KYDNR) and OSMRE signed an Action Plan detailing the steps 
necessary for correcting identified bond calculation deficiencies. The 
Action Plan required KYDNR to complete revised bonding protocols by 
April 1, 2011, along with a timetable for implementation for new and 
existing permits. HB 385 amends Kentucky Revised Statutes 350.060 to 
provide that:

    Within thirty (30) days of a cabinet determination of a need to 
change a bond protocol currently in use, the cabinet shall 
immediately promulgate administrative regulations setting forth 
bonding requirements including, but not limited to, requirements for 
the amount, duration, release, and forfeiture of bonds. Bond 
protocols shall not be exempt from KRS 13A.100 and shall be 
established by promulgating administrative regulations under KRS 
Chapter 13A. Failure to include the formula for establishing the 
amount of the bond in any administrative regulation on bonding 
requirements shall be deemed a failure to comply with the 
prescriptions of this section and the administrative regulation 
shall automatically be declared deficient in accordance with KRS 
Chapter 13A.

    We announced receipt of the amendment and asked for comments in a 
Federal Register notice published on August 15, 2011 (76 FR 50436). In 
the same document, we opened the public comment period and provided an 
opportunity for a public hearing or meeting. We did not hold a public 
hearing or meeting because no one requested one. The public comment 
period ended on September 14, 2011. We received comments from two 
organizations.

III. OSMRE's Findings

    The following are the findings we made concerning Kentucky's 
proposed amendment under SMCRA at Section 509, 30 U.S.C. 1259 and the 
Federal regulations at 30 CFR 800.14 and 800.15.

KRS 350.060 (11) Processing Permit Applications

    The new language in KRS 350.060 (11) is intended to ensure that 
bond protocol regulations include the formula for establishing the 
amount of the bond. Failure to do so would result in any administrative 
regulations or bonding requirements to be declared deficient 
automatically, in accordance with KRS Chapter 13A.
    While these proposed State revisions have no direct Federal 
counterparts there is no provision in SMCRA or its implementing 
regulations that prohibits a State from requiring its bond protocols to 
be implemented solely as regulations. On their face, the proposed 
revisions are not inconsistent with Section 509 of SMCRA and 30 CFR 
800.14, and we are therefore approving them, as noted below.
    While HB 385 could be construed to require the KYDNR to implement 
all bond adjustments as regulations before the adjustments can be made, 
to do so would be inconsistent with the literal construction of the 
language of the bill. Therefore, we do not construe HB 385 to apply to 
individual bonding adjustments, or other individual bonding decisions.
    Rather, we are approving the proposed amendment, in accordance with 
its plain language, which will not impede implementation of the 
requirement in Section 509 of SMCRA that ``[t]he amount of the bond 
shall be sufficient to assure the completion of the reclamation plan if 
the work had to be performed by the regulatory authority in the event 
of forfeiture.'' Nor will the proposed amendment impede the obligation 
of the regulatory authority to adjust the amount of bond in accordance 
with 30 CFR 800.15. Should we find, however, during oversight, that the 
amendment is being interpreted in a manner that would render it 
inconsistent with either Section 509 of

[[Page 53412]]

SMCRA or 30 CFR 800.15 we will initiate proceedings under 30 CFR 
730.11(a), to publish a notice in the Federal Register setting forth 
the text or a summary of that provision and provide 30 days' notice for 
public comment. Following the public comment period, a final 
determination will be made and published in the Federal Register.
    Further, we are approving the proposed amendment because, in 
accordance with its plain language, it will not impede the regulatory 
authority's ability to address the current bond deficiencies identified 
in the National Oversight Study and the February 3, 2011, Action Plan 
detailing the steps necessary for correcting bond calculation 
deficiencies that were identified in the study. Specifically, OSMRE 
expects the KYDNR to ensure the adequacy of bonds on all currently 
issued permits through the adjustment process, and all permits issued 
pending the formal revision to any existing bonding protocol. Should we 
find, however, during oversight, that the amendment is being 
implemented in a manner that would impede the regulatory authority's 
ability to address current bond deficiencies, we will initiate 
proceedings under 30 CFR 730.11(a), as appropriate, to have the 
provisions of the amendment set forth and set aside.
    Finally, we are approving the amendment with the understanding that 
it would not apply to bond protocols or bonding regulations in 
existence as of the date that HB 385 became effective. Should we find, 
however, during oversight, that the amendment is being interpreted in a 
manner that would render it applicable to bond protocols or regulations 
in existence as of the date that the amendment became effective, we 
will initiate proceedings under 30 CFR 730.11(a) to publish a notice in 
the Federal Register setting forth the text or a summary of that 
provision and provide 30 days' notice for public comment. Following the 
public comment period, a final determination will be made and published 
in the Federal Register.

IV. Summary and Disposition of Comments

Public Comments

    We asked for public comments on the amendment and received 
responses from Coal Operators & Associates, Inc. (COA) and Kentucky 
Resources Council (KRC).
    1. COA stated that the language of our August 15, 2011, Federal 
Register Notice (76 FR 50436) was somewhat misleading, insofar as it 
would lead one to believe that HB 385 addresses individual bond 
amounts. To the contrary, according to COA, HB 385 pertains to ``bond 
protocols'' and ``bonding requirements,'' not ``a bond amount.'' The 
plural nature of the phrases as well as common usage of the words 
``protocols'' and ``requirements'' accurately reflect the fact that HB 
385 addresses the overall scheme or template that will be used to 
establish bond amounts and the ``formula'' to be used.
    Response--OSMRE has interpreted HB 385 to apply to bond protocols 
and bond formulas and not individual bond amounts. OSMRE's approval of 
the proposed amendment reflects its understanding that it addresses 
these protocols and bond formulas used to determine bond amounts and 
that Kentucky will require all surface coal mining and reclamation 
permit applications to post a bond amount sufficient to meet the 
requirement in Section 509 of SMCRA that ``[t]he amount of the bond 
shall be sufficient to assure the completion of the reclamation plan if 
the work had to be performed by the regulatory authority in the event 
of forfeiture.''
    2. COA stated that the intent of HB 385 is to prevent Kentucky from 
arbitrarily changing bond protocols, requirements or formulae without 
adequate transparency and public comment.
    Response--We believe that our approval of this amendment, with the 
limitations as set forth in the Findings above, will not diminish any 
requirements of the Kentucky program regarding the ability of the 
public to comment on regulations regarding bonding.
    3. According to COA, the purpose of HB 385 is to insure that the 
Energy and Environment Cabinet (EEC) follows the statutory mandates 
that have existed since the inception of the Kentucky Permanent 
Regulatory Program. To accomplish that, HB 385 provides for statutory 
declarations of deficiency if the bonding formula is not promulgated as 
a KRS Ch. 13A regulation.
    Response--While we agree that HB 385 provides for statutory 
declaration of deficiency in the event bonding formulas are not 
promulgated as regulation, the basis of our decision is based on the 
understanding that bond adjustments for specific surface coal mining 
operations are not required to be promulgated as regulations.
    4. The COA stated that the KRS Ch. 13A Administrative Regulation 
process is one based upon public input, comment and review. Briefly, 
proposed regulations are not only published in the Administrative 
Register of Kentucky, but, EEC provides electronic notification to any 
interested citizen or stakeholder. Oral testimonies at public hearings, 
written comments that are submitted, as well as testimonies before the 
Administrative Regulation Review Sub-committee and the appropriate 
House and Senate Committees provide interested parties adequate notice 
and input on proposed regulations.
    Response--This is not an issue before OSMRE in its consideration or 
review of Kentucky's proposed amendment on bonding protocols.
    5. COA explained that some concern has been expressed about the 
length of time it takes under KRS Ch. 13A to adopt new, ordinary 
regulations. The Governor of the Commonwealth can issue an emergency 
regulation which becomes effective upon his signature. (KRS 13A.170 and 
190). The ordinary regulation is filed simultaneously and proceeds 
through the mandatory process. Concurrently, the emergency regulation 
is in effect.
    Response--OSMRE agrees that the Kentucky Governor can, under 
appropriate circumstances, issue emergency regulations.
    6. KRC stated its belief that HB 385 was sought by the Kentucky 
coal industry as a mechanism for delaying the adoption of changes in 
the bonding calculations and amounts.
    Response--As stated previously, OSMRE's approval of the proposed 
amendment is based on its conclusion that it applies to bond protocols 
and formulas, and does not require bond adjustments for specific 
surface coal mining operations to be promulgated as regulations.
    7. KRC asserted that HB 385 was enacted at a time when Kentucky was 
in default of its ongoing, enforceable obligation under 30 CFR 733.11 
to ``implement, administer, enforce and maintain it in accordance with 
the Act, this chapter and the provisions of the approved State 
program.'' More specifically, Kentucky was, and is, in continuing 
violation of mandatory obligations outlined in 30 CFR 800.4. KRC also 
believes that absent a commitment from Kentucky to resolve the bond 
amount issue, they are in default as required by 30 CFR 733.11. 
Therefore, KRC urged OSMRE to take steps to promptly remove State 
regulation approval with respect to bond calculation and adjustment for 
new and existing permits, and to substitute direct Federal enforcement 
of the requirements of 30 U.S.C. 1259, unless Kentucky revises the bond 
calculation protocols to assure adequate

[[Page 53413]]

bond amounts for new and existing permits, and commits to incorporate 
those revisions into emergency regulation.
    Response--This comment, which requests that we take action pursuant 
to 30 CFR part 733 is beyond the scope of this rulemaking.
    8. KRC does not oppose the amendments on their face, since SMCRA is 
silent as to whether bond calculation methodologies must be implemented 
in regulatory form, and since requiring these methodologies to be 
promulgated as regulations will require OSMRE approval and public 
opportunity to comment. However, KRC states that OSMRE should request 
that the State clarify that it interprets the amendment to apply to 
bond calculation formulae and not to individual bond calculation 
decisions, or revisions thereto.
    Response--As noted in the Findings, above, OSMRE is approving this 
proposed amendment based on the plain language of the amendment and 
OSMRE's conclusion that the amendment does not apply to bond 
calculations for individual permits.
    9. Next, KRC stated that OSMRE should require the State to clarify 
that the provision declaring deficient any bond calculation formula 
that is not promulgated as a regulation applies only to changes in such 
protocols, and not to existing protocols. KRC further stated that 
clarification should also be sought as to the State's interpretation of 
the last sentence of the amendment, since, read broadly; it could 
affect existing, approved bonding regulations that are a necessary 
component of the state regulatory program.
    Response--As noted above, we are approving the amendment based on 
our understanding that the proposed amendment would not apply to bond 
protocols or bonding regulations in existence on the date that HB 385 
became effective. Further, approval of this proposed amendment will not 
affect existing, approved bonding regulations that are a necessary 
component of the State regulatory program. If OSMRE finds that the 
promulgation of regulations impedes the implementation of the bond 
sufficiency requirement, OSMRE will notify Kentucky that the approval 
of the amendment will be revoked. If this occurs, the State will not be 
permitted to amend bond protocols via regulation.

Federal Agency Comments

    Under 30 CFR 732.17(h)(11)(i) and Section 503(b) of SMCRA, on 
August 15, 2011, we requested comments on the amendments from various 
Federal agencies with an actual or potential interest in the Kentucky 
program (Administrative Record No. KY-1665). No comments were received.

Environmental Protection Agency (EPA) Concurrence and Comments

    Under 30 CFR 732.17(h)(11)(ii), we are required to get a written 
concurrence from EPA for those provisions of the program amendment that 
relate to air or water quality standards issued under the authority of 
the Clean Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 
U.S.C. 7401 et seq.). None of the revisions that Kentucky proposed to 
make in this amendment pertains to air or water quality standards. 
Therefore, we did not ask EPA to concur on the amendment.

V. OSMRE's Decision

    Based on our findings, OSMRE approves the amendment Kentucky sent 
to us on May 10, 2011, revising the Kentucky Revised Statues (KRS) as 
authorized by HB 385 regarding bonding of surface coal mining and 
reclamation operations.
    To implement this decision, we are amending the Federal regulations 
at 30 CFR part 917 which codify decisions concerning the Kentucky 
program. In accordance with the Administrative Procedure Act, this rule 
will take effect 30 days after date of publication. Section 503(a) of 
SMCRA requires that the State's program demonstrate that the State has 
the capability of carrying out the provisions of the Act and meeting 
its purposes. SMCRA requires consistency of State and Federal 
standards.

VI. Procedural Determinations

Executive Order 12630--Takings

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

Executive Order 12866--Regulatory Planning and Review

    This rule is exempted from review by the Office of Management and 
Budget (OMB) under Executive Order 12866.

Executive Order 12988--Civil Justice Reform

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

Executive Order 13132--Federalism

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

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

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

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

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

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of energy, a Statement of Energy Effects is not required.

National Environmental Policy Act

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

Paperwork Reduction Act

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

Regulatory Flexibility Act

    The Department of the Interior certifies that this rule will not 
have a significant economic impact on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
The State submittal, which is the subject of this rule, is based upon 
counterpart Federal regulations for which an economic analysis was 
prepared and certification made that such regulations would not have a 
significant economic effect upon a substantial number of small 
entities. In making the determination as to whether this rule would 
have a significant economic impact, the Department relied upon data and 
assumptions for the counterpart Federal regulations.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule: (a) Does not 
have an annual effect on the economy of $100 million; (b) will not 
cause a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions; and (c) does not have significant adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S.-based enterprises to compete with foreign-based 
enterprises. This determination is based upon the fact that the 
Kentucky submittal, which is the subject of this rule, is based upon 
counterpart Federal regulations for which an analysis was prepared and 
a determination made that the Federal regulation was not considered a 
major rule.

Unfunded Mandates

    This rule will not impose an unfunded mandate on State, local, or 
tribal governments or the private sector of $100 million or more in any 
given year. This determination is based upon the fact that the Kentucky 
submittal, which is the subject of this rule, is based upon counterpart 
Federal regulations for which an analysis was prepared and a 
determination made that the Federal regulation did not impose an 
unfunded mandate.

List of Subjects in 30 CFR Part 917

    Intergovernmental relations, Surface mining, Underground mining.

    Dated: September 19, 2017.
Thomas D. Shope
Regional Director, Appalachian Region.
    For the reasons set out in the preamble, 30 CFR part 917 is amended 
as set forth below:

PART 917--KENTUCKY

0
1. The authority citation for part 917 continues to read as follows:

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


0
2. Section 917.15 is amended by adding a new entry to the table in 
paragraph (a) in chronological order by ``Date of final publication'' 
to read as follows:


917.15  Approval of Kentucky regulatory program amendments.

    (a) * * *

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     Original amendment           Date of final
       submission date             publication      Citation/description
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                              * * * * * * *
May 10, 2011................  November 16, 2017...  KRS 350.060(11).
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[FR Doc. 2017-24707 Filed 11-15-17; 8:45 am]
 BILLING CODE 4310-05-P