99-30892. Valid Existing Rights  

  • [Federal Register Volume 64, Number 242 (Friday, December 17, 1999)]
    [Rules and Regulations]
    [Pages 70766-70838]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-30892]
    
    
    
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    Part II
    
    
    
    
    
    Department of the Interior
    
    
    
    
    
    _______________________________________________________________________
    
    
    
    Office of Surface Mining Reclamation and Enforcement
    
    
    
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    30 CFR Part 740 et al.
    
    
    
    Valid Existing Rights; Final Rule
    
    30 CFR Part 761
    
    
    
    Interpretative Rule Related to Subsidence Due to Underground Coal 
    Mining; Final Rule
    
    Federal Register / Vol. 64, No. 242 / Friday, December 17, 1999 / 
    Rules and Regulations
    
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    DEPARTMENT OF THE INTERIOR
    
    Office of Surface Mining Reclamation and Enforcement
    
    30 CFR Parts 740, 745, 761, 762, 772, 773, 778, 780, and 784
    
    RIN 1029-AB42
    
    
    Valid Existing Rights
    
    AGENCY: Office of Surface Mining Reclamation and Enforcement (OSM), 
    Interior.
    
    ACTION: Final rule and record of decision.
    
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    SUMMARY: This rule redefines the circumstances under which a person has 
    valid existing rights (VER) to conduct surface coal mining operations 
    on lands listed in section 522(e) of the Surface Mining Control and 
    Reclamation Act of 1977 (SMCRA or ``the Act''). Section 522(e) 
    prohibits or restricts surface coal mining operations on certain lands, 
    including, among other areas, units of the National Park System, 
    Federal lands in national forests, and buffer zones for public parks, 
    public roads, occupied dwellings, and cemeteries. The rule also 
    establishes requirements for submitting and processing requests for VER 
    determinations for those lands. Finally, the rule modifies the 
    exception for existing operations; revises the procedures for 
    compatibility findings for surface coal mining operations on Federal 
    lands in national forests; and establishes requirements governing coal 
    exploration activities on the lands listed in section 522(e) of SMCRA. 
    Adoption of this rule removes all existing suspensions affecting 30 CFR 
    part 761.
    
    EFFECTIVE DATE: January 18, 2000.
    
    FOR FURTHER INFORMATION CONTACT: Dennis Rice, Office of Surface Mining 
    Reclamation and Enforcement, Room 115, South Interior Building, 1951 
    Constitution Avenue, NW, Washington, DC 20240. Telephone: (202) 208-
    2829. E-mail address: drice@osmre.gov. Additional information 
    concerning OSM, this rule, and related documents may be found on OSM's 
    home page on the Internet at http://www.osmre.gov.
    
    SUPPLEMENTARY INFORMATION:
    
    Table of Contents
    
    I. How did we obtain and consider public input?
    II. What general comments did we receive on the proposed rule?
    III. How does the final rule differ stylistically from the proposed 
    rule?
    IV. In what context does the term VER appear in SMCRA?
    V. What is the legislative history of the VER provision in section 
    522(e)?
    VI. How did we previously define or attempt to define VER?
    VII. Section 761.5: How are we defining VER in this final rule?
        A. Introductory Language.
        B. Paragraph (a): Property Rights Demonstration.
        C. Paragraph (b): Primary Standards for VER.
        1. What alternatives did we consider?
        2. Why did we select the good faith/all permits standard?
        3. What comments did we receive regarding takings issues 
    concerning the good faith/all permits standard?
        4. Why did we reject the takings standard?
        5. Why did we reject the ownership and authority standard?
        D. Paragraph (b)(2): ``Needed for and Adjacent'' Standard.
        1. What is the history of this standard?
        2. How did we propose to revise this standard in 1997?
        3. How does the standard in the final rule differ from the one 
    that we proposed in 1997?
        4. What comments did we receive on the proposed standard and how 
    did we dispose of them?
        E. Paragraph (c): VER Standards for Roads.
        F. How does the definition address VER for lands that come under 
    the protection of section 522(e) after August 3, 1977?
    VIII. How does our definition of VER compare with VER under other 
    Federal statutes?
    IX. Are VER transferable?
    X. Sections 740.4, 745.13, and 761.14(a): Who is responsible for VER 
    determinations for non-Federal lands within section 522(e)(1) areas?
        A. Statutory Background and Rulemaking History.
        B. What alternatives did we consider?
        C. Which alternative are we adopting?
    XI. Sections 740.11 and 761.14(a): Which VER definition (State or 
    Federal) applies to lands listed in section 522(e)(1) and (e)(2) of 
    the Act?
    XII. What other changes are we making in the Federal lands program 
    regulations in 30 CFR Parts 740 and 745?
    XIII. Why are we removing the definition of ``surface coal mining 
    operations which exist on the date of enactment'' from 30 CFR 761.5?
    XIV. Why are we adding definitions of ``we'' and ``you'' and their 
    grammatical forms to 30 CFR 761.5?
    XV. How have we revised 30 CFR 761.11, which is the regulatory 
    counterpart to the prohibitions and limitations of section 522(e) of 
    the Act?
    XVI. Section 761.12: Which operations qualify for the exception for 
    existing operations?
    XVII. Why are we removing the prohibitions in former 30 CFR 
    761.11(h)?
    XVIII. Why did we reorganize former 30 CFR 761.12 as Secs. 761.13 
    through 761.17 and 762.14?
    XIX. Section 761.13: How have we revised the procedural requirements 
    for compatibility findings for surface coal mining operations on 
    Federal lands in national forests?
    XX. How do 30 CFR 761.14 and 761.15, which concern waivers for 
    buffer zones for public roads and occupied dwellings, differ from 
    former 30 CFR 761.12(d) and (e)?
    XXI. Section 761.16: What are the submission requirements for 
    requests for VER determinations and how will these requests be 
    processed?
        A. In what major ways does the final rule differ from the 
    proposed rule?
        1. Role of Federal Surface Management Agencies.
        2. Handling of Situations Involving Property Rights Disputes.
        3. Action on Incomplete Requests.
        4. Administrative Completeness Reviews.
        5. Notification Requirements for Lands Listed in 30 CFR 
    761.11(a).
        B. Paragraph (a): To which agency must you submit a request for 
    a VER determination?
        C. May a request for a VER determination be submitted separately 
    from a permit application?
        D. Paragraph (b): What information must you include in a request 
    for a VER determination?
        E. Paragraph (c): How will the agency initially review my 
    request?
        F. Paragraph (d): What notice and comment requirements apply to 
    the VER determination process?
        G. Paragraph (e): How will a decision be made?
        H. Paragraph (f): How may a VER determination be appealed?
        I. Paragraph (g): To what extent and in what manner must records 
    related to the VER determination process be made available to the 
    public?
        J. May the regulatory authority reconsider VER determinations 
    during review of a subsequent permit application?
    XXII. How does new 30 CFR 761.17, which concerns regulatory 
    authority obligations at the time of permit application review, 
    differ from its predecessor provisions in former 30 CFR 761.12?
    XXIII. How and why are we revising Part 762, which contains criteria 
    for the designation of lands as unsuitable for surface coal mining 
    operations?
    XXIV. Section 772.12: What are the requirements for coal exploration 
    on lands designated unsuitable for surface coal mining operations?
    XXV. Technical Amendments to Parts 773, 778, 780, and 784.
    XXVI. What effect will this rule have in Federal program States and 
    on Indian lands?
    XXVII. How will this rule affect State programs?
    XXVIII. How does this rule impact information collection 
    requirements?
    XXIX. Procedural Matters.
        A. Executive Order 12866: Regulatory Planning and Review.
        B. Regulatory Flexibility Act.
    
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        C. Small Business Regulatory Enforcement Fairness Act.
        D. Unfunded Mandates Reform Act of 1995.
        E. Executive Order 12630: Takings.
        F. Executive Order 13132: Federalism.
        G. Executive Order 12988: Civil Justice Reform.
        H. Paperwork Reduction Act.
        I. National Environmental Policy Act of 1969 and Record of 
    Decision.
    
    I. How Did We Obtain and Consider Public Input?
    
        This final rule is based on a proposed rule that we published for 
    public review and comment on January 31, 1997 (62 FR 4836). We also 
    posted the proposed rule and associated documents on our home page on 
    the Internet. In response to requests from the public, we held public 
    hearings on the proposed rule in Athens, Ohio; Billings, Montana; 
    Washington, Pennsylvania; and Whitesburg, Kentucky. The comment period 
    was originally scheduled to close June 2, 1997, but, in response to 
    several requests, we extended the deadline until August 1, 1997. See 62 
    FR 29314, May 30, 1997.
        In addition to the testimony offered at the four hearings, we 
    received approximately 75 written comments specific to the proposed 
    rule: 31 from private citizens, 28 from companies and associations 
    affiliated with the mining industry, 4 from environmental 
    organizations, and 11 from Federal, State, and local governmental 
    entities and associations. In developing the final rule, we considered 
    all comments that were germane to the proposed rule. In this preamble, 
    we discuss how we revised the proposed rule in response to comments. We 
    also explain the disposition of those comments that did not result in a 
    change in the proposed rule.
    
    II. What General Comments Did We Receive on the Proposed Rule?
    
        Many comments from private citizens expressed general opposition to 
    mining on public lands, especially in national parks and national 
    forests. Since SMCRA allows mining on these lands under certain 
    circumstances, we have no authority to adopt a regulation that would 
    impose an absolute prohibition on mining on these lands.
        One commenter representing several States disputed the need for any 
    rulemaking, arguing that the present system is working well and is 
    consistent with the principles of State primacy under SMCRA. However, 
    some commenters representing individual State regulatory authorities 
    expressed support for the clarity and additional specificity that the 
    rule would provide. Furthermore, two Federal district courts have 
    ordered OSM to take steps to promulgate a final rule defining VER. 
    Belville Mining Co. v. Lujan, No. C-1-89-790 (S.D. Ohio 1991) and 
    Helmick v. U.S., No. 95-0115 (N.D. W.Va. 1997).
        Finally, we believe that a Federal definition is necessary to 
    establish a reference point for State definitions and to ensure that 
    the lands listed in section 522(e) of the Act are protected as Congress 
    intended. The good faith/all permits standard that we are adopting as 
    part of the VER definition in this final rule will cause relatively 
    little disruption to existing State regulatory programs. Twenty of the 
    24 States with approved regulatory programs under section 503 of the 
    Act already rely upon a good faith/all permits or all permits standard 
    for VER.
        One commenter requested that the final rule and related documents 
    consistently use the term ``type'' to refer to the distinction between 
    surface and underground mining. Similarly, the commenter stated that 
    the term ``method'' should refer only to the specific techniques 
    employed for either surface or underground mining operations; e.g., 
    area, contour or mountaintop removal for surface mining operations and 
    longwall or room and pillar for underground mining operations. We have 
    endeavored to apply these terms in the manner recommended, although 
    ``type'' may also mean ``method,'' depending upon context, deed 
    nuances, and the vagaries of State property law.
    
    III. How Does the Final Rule Differ Stylistically From the Proposed 
    Rule?
    
        On June 1, 1998, President Clinton issued an Executive Memorandum 
    requiring the use of plain language in all proposed and final 
    rulemaking documents published after January 1, 1999. The memorandum 
    provides the following description of plain language:
    
        Plain language requirements vary from one document to another, 
    depending on the intended audience. Plain language documents have 
    logical organization, easy-to-read design features, and use:
         Common, everyday words, except for necessary technical 
    terms;
         ``you'' and other pronouns;
         the active voice, and
         short sentences.
    
        The President's memorandum includes an exception for final rules 
    based upon proposed rules published before January 1, 1999. While that 
    exception applies to this final rule, we have incorporated some plain 
    language principles in this rule, as required by a memorandum dated 
    June 10, 1998, from the Office of the Secretary of the Department of 
    the Interior. Thus, the final rule and preamble use the pronouns 
    ``we,'' ``us,'' and ``our'' to refer to OSM, and the pronouns ``you'' 
    and ``your'' to refer to a person who claims or seeks to obtain an 
    exception or waiver authorized under 30 CFR 761.11 or section 522(e) of 
    the Act. In all other cases, we specifically identify the person or 
    agency to which the rule or preamble refers. Other changes include 
    avoidance of the word ``shall.'' Instead, the final rule and preamble 
    use ``must'' to indicate an obligation, ``will'' to identify a future 
    event, and ``may not'' to convey a prohibition.
        We recognize that more could be done to comply more fully with 
    plain language principles. However, further changes would require a 
    wholesale revision of the entire regulation, which would delay 
    considerably publication of a final rule. For this reason, we have 
    deferred a more extensive plain language rewrite.
    
    IV. In What Context Does the Term VER Appear in SMCRA?
    
        As summarized below, section 522(e) of SMCRA, 30 U.S.C. 1272(e), 
    prohibits or restricts surface coal mining operations on certain lands 
    after the date of SMCRA's enactment (August 3, 1977). However, the Act 
    specifies that these prohibitions and restrictions are ``subject to 
    valid existing rights.'' It further provides that these prohibitions 
    and restrictions do not apply to operations in existence on the date of 
    enactment.
        Section 522(e)(1) protects all lands within the boundaries of units 
    of the National Park System; the National Wildlife Refuge System; the 
    National System of Trails; the National Wilderness Preservation System; 
    the Wild and Scenic Rivers System, including study rivers designated 
    under section 5(a) of the Wild and Scenic Rivers Act; and National 
    Recreation Areas designated by Act of Congress.
        Section 522(e)(2) prohibits surface coal mining operations on 
    Federal lands within the boundaries of any national forest unless the 
    Secretary finds that there are no significant recreational, timber, 
    economic, or other resources that may be incompatible with such 
    operations. If the Secretary makes this finding, the Act allows the 
    approval of surface operations and impacts incident to an underground 
    mine on any national forest lands. In addition, if the Secretary makes 
    this finding, the Act allows approval of any type of surface coal 
    mining operations on national forest lands west of the 100th meridian 
    (except the Custer National Forest) that lack significant forest cover, 
    provided
    
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    the proposed operations comply with certain statutes.
        Section 522(e)(3) prohibits surface coal mining operations that 
    would adversely impact publicly owned parks and properties listed on 
    the National Register of Historic Places. However, this paragraph of 
    the Act provides a waiver for surface coal mining operations that 
    receive joint approval from the regulatory authority and the agency 
    with jurisdiction over the park or place.
        Section 522(e)(4) prohibits surface coal mining operations within 
    100 feet of the outside right-of-way line of any public road, but it 
    provides a mechanism and criteria for approval of exceptions from this 
    prohibition. It also exempts mine access and haulage roads at the point 
    of intersection with a public road.
        Section 522(e)(5) prohibits surface coal mining operations within 
    100 feet of a cemetery or within 300 feet of a public building, school, 
    church, community or institutional building, or public park. This 
    paragraph also prohibits operations within 300 feet of an occupied 
    dwelling, but it allows the owner of the dwelling to waive the 
    prohibition.
        The term VER also appears in section 601(d) of SMCRA, which 
    pertains to the designation of Federal lands as unsuitable for mining 
    operations for minerals or materials other than coal. Specifically, 
    this paragraph of the Act provides that ``[v]alid existing rights shall 
    be preserved and not affected by such designation.''
        SMCRA does not define or explain the meaning of VER in the context 
    of either section 522(e) or section 601. Today's rulemaking addresses 
    VER only in the context of section 522(e).
    
    V. What Is the Legislative History of the VER Provision in Section 
    522(e)?
    
        The legislative history of section 522(e) in general and the VER 
    exception in particular is sparse. In this portion of the preamble, we 
    either quote or summarize all the legislative history that we found 
    pertinent to the rationale for the final rule and disposition of 
    comments. The other portions of this preamble discuss how we and others 
    interpret the legislative history, and how these interpretations 
    influenced the decision-making process.
    
    Language in Previous Versions of SMCRA
    
        The phrase ``subject to valid existing rights'' and the current 
    outline of section 522(e) first appear in the conference committee 
    version of the 1974 precursor to SMCRA. Prior to the conference 
    committee changes, the Senate bill (S. 425) excluded only existing 
    operations from the prohibitions of what is now section 522(e). The 
    House bill (H.R. 11500) contained an exception only for certain 
    situations in which a person had made substantial legal and financial 
    commitments in an existing mine before September 1, 1973--and that 
    exception applied only to the lands listed in what is now paragraphs 
    (e)(1) and (e)(2) of section 522 of the Act.
    
    Committee Reports
    
        The 1977 conference committee report on the legislation that became 
    SMCRA does not address VER. See H.R. Conf. Rep. No. 95-493, at 110-11 
    (1977). Thus, the most authoritative source in the legislative history 
    of SMCRA does not clarify congressional intent with respect to the 
    meaning of VER under section 522(e).
        The 1974 conference committee report explains that the addition of 
    the phrase ``subject to valid existing rights'' to section 522(e) was 
    intended to address surface coal mining operations on national forest 
    lands. H.R. Conf. Rep. No. 93-1522, at 85 (1974). Subsequent committee 
    reports on succeeding versions of SMCRA contain either substantively 
    identical or abbreviated discussions of this topic without further 
    elucidation on the meaning of VER under section 522(e). See S. Rep. No. 
    94-28, at 220 (1975); H.R. Conf. Rep. No. 94-189, at 85 (1975); H.R. 
    Rep. No. 94-896, at 47-48 (1976); H.R. Rep. No. 94-1445, at 47 (1976); 
    H.R. Rep. No. 95-218, at 95 (1977); and S. Rep. No. 95-128, at 94-95 
    (1977). Therefore, for purposes of providing background for this 
    rulemaking, we will quote only the discussions from the most recent 
    committee reports, which pertain to the legislation that the President 
    ultimately signed into law.
        The committee report on H.R. 2, the House version of the 
    legislation that ultimately became SMCRA, contains the following 
    passage:
    
        The language ``subject to valid existing rights'' in section 
    522(e) is intended, however, to make clear that the prohibition of 
    strip mining on the national forests is subject to previous court 
    interpretations of valid existing rights. For example, in West 
    Virginia's Monongahela National Forest, strip mining of privately 
    owned coal underlying federally owned surface has been prohibited as 
    a result of United States v. Polino, [131] F. Supp. [772] (1955). In 
    this case the court held that ``stripping was not authorized by 
    mineral reservation in a deed executed before the practice was 
    adopted in the county where the land lies, unless the contract 
    expressly grants stripping rights by use of direct or clearly 
    equivalent words. The party claiming such rights must show usage or 
    custom at the time and place where the contract is to be executed 
    and must show that such rights were contemplated by the parties.'' 
    The phrase ``subject to valid existing rights'' is thus in no way 
    intended to open up national forest lands to strip mining where 
    previous legal precedents have prohibited stripping.
    
    H.R. Rep. No. 95-218, at 95 (1977).
    
        The committee report on S. 7, the Senate version of the legislation 
    that ultimately became SMCRA, contains a similar discussion:
    
        All of these bans listed in subsection (e) are subject to valid 
    existing rights. This language is intended to make clear that the 
    prohibition of strip mining on the national forests is subject to 
    previous state court interpretation of valid existing rights. The 
    language of 422(e) [now 522(e)] is in no way intended to affect or 
    abrogate any previous State court decisions. The party claiming such 
    rights must show usage or custom at the time and place where the 
    contract is to be executed and must show that such rights were 
    contemplated by the parties. The phrase ``subject to valid existing 
    rights'' is thus in no way intended to open up national forest lands 
    to strip mining where previous legal precedents have prohibited 
    stripping.
    
    S. Rep. No. 95-128, at 94-95 (1977).
    
        Congressman Manuel Lujan, Jr. attached the following statement of 
    separate views to the House committee report:
    
        Much has been said about the problem presented by the language 
    contained in Sec. 522(e) of H.R. 2 * * *.
        As the Committee Report indicates, this section's limitation 
    that the prohibition is ``subject to valid existing rights'' is not 
    intended to open up national forest lands to strip mining when 
    previous legal precedents have prohibited stripping. Naturally, the 
    bill's language is also subject to the corollary that it is not 
    intended to preclude mining where the owner of the mineral has the 
    legal right to extract the coal by surface mining method[s].
        Concerns in this area are not merely hypothetical. For example, 
    in the establishment of the national forest system in many areas of 
    the country, grantors sold the land to the United States government 
    for inclusion in a national forest, but reserve[d] mineral rights 
    for themselves and deeds of conveyance for which the United States 
    was a party. The language of Sec. 522(e) itself, the thrust of the 
    report discussion and common sense all dictate that the only logical 
    interpretation of Sec. 522(e) is that enactment of this legislation 
    does not disrupt the relationship between the owner of the coal and 
    the Federal government.
        I believe, therefore, that it would be contrary to the intention 
    of the Act, and a misuse of the Act, for the Forest Service (or 
    anyone else) to argue that [SMCRA] somehow modifies the relationship 
    between the owner of the surface and subsurface rights. Clearly, 
    alienation by sale, assignment, gift, or inheritance of the property 
    right of the coal is not affected by the Act nor is the legal right
    
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    to mine the coal in any way modified if such right existed prior to 
    enactment of the Act.
    
    H.R. Rep. No. 95-218, at 189 (1977).
    
        Part VII.C.5. of this preamble contains a discussion of the 
    significance of Congressman Lujan's statements.
    
    Floor Debate (Congressional Record)
    
        In remarks made on the House floor during debate on the 1975 
    precursor to SMCRA, Congressman John Dingell questioned the need for 
    the phrase ``subject to valid existing rights,'' stating that ``it is 
    extra verbiage and really has no meaning.'' 121 Cong. Rec. H7048 (March 
    18, 1975) (statement of Rep. Dingell). He offered an amendment that 
    would have removed this phrase and replaced it with a provision 
    allowing surface coal mining operations in national forests and 
    grasslands whenever the deeds conveying lands to the United States 
    reserved the coal and specifically provided for the use of surface 
    mining methods. The House rejected the amendment. 121 Cong. Rec. H7050 
    (March 18, 1975).
        During floor debate on the same bill, Congressman Delbert Latta 
    asked ``whether this legislation affects in any way the rights of an 
    owner of mineral rights situated below land owned by the Federal 
    Government.'' 121 Cong. Rec. H6679 (March 14, 1975). In response, 
    Congressman Morris Udall cited section 714 of SMCRA, which he 
    characterized as requiring surface owner consent before any underlying 
    Federal coal may be mined. Congressmen Latta, Udall, and others then 
    engaged in the following exchange:
    
        Mr. LATTA. That takes care of the Federal Government when it 
    owns the mineral rights, but I have reference to the opposite 
    situation where the surface is owned by the Federal Government, but 
    the mineral rights have been retained by a private owner.
        Mr. UDALL. We did not deal with that problem. I do not know of 
    any instance in which it would arise or be affected.
        Mr. LATTA. It is not covered by this bill.
        Mr. OTTINGER. Mr. Speaker, if the gentleman would yield, why 
    would not the rights of a surface owner be protected where the 
    mineral rights were not owned by the Federal Government, but were 
    owned privately?
        Mr. UDALL. The problem we dealt with was the situation in the 
    instance where private interests owned the surface but the Federal 
    Government owned the coal.
    * * * * *
        Mr. OTTINGER. If the gentleman will yield further, I think there 
    are situations where private owners own both the surface and the 
    coal, and there is no protection provided.
        Mr. UDALL. In that case the whole thrust of the bill is to 
    regulate how to mine coal, whatever the ownership is.
    * * * * *
        Mr. LATTA. * * * [I]f I understood what you said, this bill does 
    not deal with the situation propounded in my question, meaning where 
    a private citizen has sold the surface to the Federal Government and 
    has retained the mineral rights. This bill would not in any way 
    affect the mineral rights of that private citizen?
        Mr. UDALL. This is a bill that deals with how one mines coal in 
    that situation and every other situation, but we do not attempt to 
    change property rights in the situation the gentleman talks about 
    and thus the mineral rights are not affected.
    
    121 Cong. Rec. H6679 (1975).
    
        Part VII.C.5. of this preamble includes a discussion of the 
    significance of this colloquy.
        Some commenters referred to a floor debate on a proposed amendment 
    to section 601 of H.R. 2, the House bill that eventually became SMCRA. 
    (Section 601 provides for the designation of Federal lands as 
    unsuitable for the mining of minerals and materials other than coal.) 
    Congressman Teno Roncalio proposed an amendment to delete the sentence 
    in section 601(d) that reads, ``[v]alid existing rights shall be 
    preserved and not affected by such designation.'' Congressman Udall 
    opposed the amendment ``because it takes from the bill a statement that 
    valid legal rights should be preserved. I do not think we should do 
    that without paying compensation under the fifth amendment [sic].'' 123 
    Cong. Rec. H12878 (1977) (April 29, 1977) (statement of Rep. Udall). 
    The House rejected the amendment and retained the language at issue. 
    However, as discussed in parts VII.C.4. and VIII of this preamble, we 
    now find this colloquy to be of little relevance to the meaning of VER 
    under section 522(e).
    
    VI. How Did We Previously Define or Attempt To Define VER?
    
    The 1978 Proposed Rule
    
        In our first attempt to define VER after the enactment of SMCRA, we 
    proposed to adopt different VER standards for different categories of 
    lands. For lands protected under paragraphs (e)(1) and (e)(2) of 
    section 522, we proposed a form of the ownership and authority 
    standard. Specifically, the proposed rule would have defined VER as:
    
        Those property rights in existence on August 3, 1977, that were 
    created by a legally binding conveyance, lease, deed, contract, or 
    other document which expressly authorizes the applicant to produce 
    coal by surface coal mining operations and the exercise of such 
    rights cannot, under applicable State or Federal law, be conditioned 
    or denied in the manner provided in [30 CFR Part 761].
    
        For lands protected under paragraphs (e)(3) through (e)(5) of 
    section 522, we proposed to limit VER to those lands for which a person 
    had obtained all State and Federal permits needed to conduct surface 
    coal mining operations as of August 3, 1977. The preamble to the 
    proposed rule indicates that we presumed that the first standard would 
    apply only to Federal lands, while the second standard would apply only 
    to State and privately owned lands. See 41 FR 41662, 41686, 41826, 
    September 18, 1978.
    
    The 1979 Final Rule
    
        After evaluating the comments received on the 1978 proposed rule, 
    we decided that the proposed ``dual definition was not really workable 
    because it did not distinctly separate Federal lands from private 
    lands.'' 44 FR 14993, March 13, 1979. Section 522(e)(1) includes both 
    Federal and non-Federal lands, and paragraphs (e)(3) through (e)(5) of 
    that section apply regardless of land ownership. Except for paragraph 
    (e)(2), Congress did not establish Federal versus non-Federal ownership 
    as a criterion for protection under section 522(e). Nor did Congress 
    prescribe different levels of protection under section 522(e) for 
    Federal and non-Federal lands.
        Accordingly, the final rule promulgated in 1979 contains a single 
    definition of VER that applies to all lands listed in section 522(e). 
    In developing this definition, we relied upon (1) a belief that 
    Congress created the VER exception as a means of avoiding compensable 
    takings of private property and (2) the principle that the extent to 
    which the Federal government and States may prohibit or restrict the 
    exercise of private property rights without providing compensation is 
    determined by case law established pursuant to the Fifth and Fourteenth 
    Amendments to the Constitution. Specifically, we ``endeavored to 
    determine the point at which payment would be required because a taking 
    had occurred, then to define `valid existing rights' in those terms, 
    i.e., those rights which cannot be affected without paying 
    compensation.'' 44 FR 14992, March 13, 1979, col 1.
        The definition provided that, except for haul roads, VER included 
    only those property rights in existence on August 3, 1977, the owners 
    of which either had obtained all necessary permits for the proposed 
    surface coal mining operation on or before August 3, 1977 (the ``all 
    permits'' standard), or could demonstrate that the coal for which the 
    exception was sought was both needed for and immediately adjacent to a 
    surface coal mining operation in existence on August 3, 1977 (the
    
    [[Page 70770]]
    
    ``needed for and adjacent'' standard). See 44 FR 14902, 15342, March 
    13, 1979.
    
    Litigation Concerning the 1979 Final Rule
    
        The mining industry, the State of Illinois, the National Wildlife 
    Federation, and assorted environmental organizations all challenged the 
    validity of the 1979 definition. Industry and Illinois alleged that 
    this definition entailed a taking of property in violation of the Fifth 
    and Fourteenth Amendments. Because the plaintiffs presented no evidence 
    that the definition had caused actual loss or harm to a specific party, 
    the court declined to rule on the constitutionality of the definition 
    on the basis of a hypothetical claim. However, the court asserted that 
    a person who applies for all permits, but fails to receive one or more 
    through government delay, engenders the same investments and 
    expectations as a person who has obtained all permits. Specifically, 
    the court stated that ``a good faith attempt to have obtained all 
    permits before the August 3, 1977 cut-off date should suffice for 
    meeting the all permits test.'' In re Permanent Surface Mining 
    Regulation Litigation I, 14 Env't Rep. Cas. (BNA) 1083, 1091 (D.D.C., 
    Feb. 26, 1980), (``PSMRL I, Round I'').
        The industry plaintiffs appealed those portions of the district 
    court's decision in PSMRL I, Round I that were adverse to their 
    interests. However, the U.S. Court of Appeals for the Federal Circuit 
    remanded the appeal after the government informed the court that it was 
    reconsidering the 1979 definition. Thus, the court never reached a 
    decision on the merits of the appeal. The remand order specified that 
    the judgment of the District Court could not be considered final. See 
    In re Permanent Surface Mining Regulation Litigation, No. 80-1810, 
    Order of Remand (D.C. Cir., Feb. 1, 1983).
    
    The 1980 Suspension Notice
    
        To comply with the decision in PSMRL I, Round I, 14 Env't Rep. Cas. 
    (BNA) 1091 (1980), which partially remanded the all permits standard, 
    we suspended the 1979 definition of VER to the extent that it required 
    that all permits have been obtained before August 3, 1977. See 45 FR 
    51547-48, August 4, 1980. The suspension document stated that, pending 
    further rulemaking, we would interpret the definition as including the 
    court's suggestion that a good faith effort to obtain all permits by 
    that date should suffice to establish VER. This standard is known as 
    the ``good faith/all permits'' standard.
    
    The 1982 Proposed Rule
    
        On June 10, 1982 (47 FR 25278), we published a proposed rule 
    setting out six options for revising the definition of VER. These 
    options included the good faith/all permits standard, a mineral rights 
    ownership standard, a mineral rights ownership plus right to mine by 
    the method intended standard (the ``ownership and authority'' 
    standard), and three variations on the latter two standards. Since the 
    proposed standards all attempted to establish a clearly defined 
    ``bright-line'' test for VER, they became known as ``mechanical 
    tests.''
    
    The 1983 Final Rule
    
        Commenters criticized each option in the 1982 proposed rule as 
    either too broad or too narrow, and many argued that one or more of the 
    proposed options would result in a taking of property without just 
    compensation in violation of the Fifth and Fourteenth Amendments to the 
    Constitution. Because the Supreme Court has consistently declined to 
    prescribe set formulas for determining when a taking will occur, we 
    concluded that any mechanical test likely would be either over-
    inclusive or under-inclusive of all potential takings that might result 
    from the section 522(e) prohibitions. Therefore, on September 14, 1983 
    (48 FR 41314), we adopted a definition of VER which provided, in part, 
    that a person has VER if a prohibition on surface coal mining 
    operations would result in a compensable taking of that person's 
    property interests under the Fifth and Fourteenth Amendments to the 
    Constitution. This standard is known as the ``takings'' standard.
        The revised definition also (1) removed the requirement for a 
    demonstration of a property right to the coal on August 3, 1977, (2) 
    defined the ``needed for'' aspect of the needed for and adjacent 
    standard, and (3) added a provision (sometimes referred to as 
    ``continually created VER'') to establish VER standards for lands that 
    come under the protection of section 522(e) after August 3, 1977. This 
    situation would arise, for example, when a park is created or expanded 
    or a protected structure is built after that date.
    
    Litigation Concerning the 1983 Final Rule
    
        The mining industry, the National Wildlife Federation, and assorted 
    environmental organizations all challenged the validity of the 1983 
    definition. The U.S. District Court for the District of Columbia 
    subsequently remanded most of that definition on procedural grounds. 
    The court held that the takings standard represented such a significant 
    departure from the options presented in the 1982 proposed rule that a 
    new notice and comment period was necessary to comply with the public 
    participation requirements of the Administrative Procedure Act, 5 
    U.S.C. 553. See In re Permanent Surface Mining Regulation Litigation 
    II, Round III--Valid Existing Rights, 22 Env't Rep. Cas. (BNA) 1557, 
    1564 (D.D.C. 1985) (``PSMRL II, Round III--VER''). The court also held 
    that the proposed rule failed to provide adequate notice that it would 
    expand the needed for and adjacent standard to include properties 
    acquired after the date of enactment of SMCRA (August 3, 1977). 
    Accordingly, the court remanded paragraphs (a) and (d)(2) of the 
    definition, which relied upon the takings standard to determine VER, 
    and the revised needed for and adjacent standard in paragraph (c) of 
    the definition to the Secretary for proper notice and comment.
    
    The 1986 Suspension Notice
    
        In response to the remand order in PSMRL II, Round III--VER, 22 
    Env't Rep. Cas. (BNA) at 1564 (1985), we suspended paragraphs (a) and 
    (c) of the 1983 definition of VER on November 20, 1986 (51 FR 41952, 
    41961). These paragraphs contained the takings standard and the revised 
    needed for and adjacent standard. We also suspended paragraph (d)(2) of 
    the definition to the extent that it relied upon the takings standard. 
    As discussed at 51 FR 41954-55, this action effectively reinstated the 
    1980 good faith/all permits standard and the 1979 needed for and 
    adjacent standard.
        The preamble to the suspension notice stated that, with two 
    exceptions, we would use the VER definition in the applicable State or 
    Federal regulatory program when making VER determinations. As discussed 
    at 51 FR 41955, one of these exceptions occurs when a State definition 
    relies upon an all permits standard. In that case, we would apply the 
    State standard as if it included a good faith component. The second 
    exception involves State programs that include a takings standard for 
    VER. In those situations, the preamble stated that, pending 
    promulgation of a new Federal definition of VER, we would not process 
    requests for VER determinations involving lands within units of the 
    National Park System.
    
    The 1988 Proposed Rule
    
        On December 27, 1988 (53 FR 52374), we proposed the good faith/all 
    permits
    
    [[Page 70771]]
    
    standard and the ownership and authority standard as options for a 
    regulatory definition of VER. Under the ownership and authority 
    standard, a person could establish VER by demonstrating both a property 
    right to the coal and the right to mine it by the method intended, as 
    determined by State law. After evaluating the comments received, we 
    withdrew the entire proposed rule for further study on July 21, 1989 
    (54 FR 30557).
    
    The 1990 VER Symposium
    
        On April 3-4, 1990, we and the University of Kentucky College of 
    Law, in cooperation with the American Bar Association, cosponsored a 
    national symposium on the meaning of VER under section 522(e) of SMCRA. 
    Volume 5, Number 3 of the Journal of Mineral Law and Policy contains 
    the proceedings of this symposium. The participants provided extensive 
    analyses of takings jurisprudence and case law related to VER, but they 
    did not reach a consensus on how to define VER. The arguments presented 
    ranged from the theory that we could prohibit all mining in section 
    522(e) areas as a public nuisance or noxious use to the position that 
    Congress intended the VER exception to operate as complete protection 
    for all property rights in existence on August 3, 1977.
    
    The Belville Litigation
    
        In 1990, the Belville Mining Company, an Ohio mining firm, filed 
    suit against the Secretary of the Interior alleging that he had, among 
    other things:
         Failed to perform a mandatory duty to promulgate the 
    definition of VER needed to implement section 522(e);
         In lieu of regulations, issued various statements and 
    directives on VER, including the policy set forth in the November 20, 
    1986 suspension notice, without notice and comment in violation of the 
    Administrative Procedure Act; and
         Made VER determinations relying on State regulations 
    identical to an invalidated Federal regulation.
        See Belville Mining Co. v. Lujan, No. C-1-89-790 (S.D. Ohio 1991), 
    modified September 21, 1992 (``Belville I'').
        In a July 22, 1991, decision, the court in Belville I ordered the 
    Secretary to begin proceedings to promulgate a final rule defining VER; 
    enjoined him from enforcing or applying the November 20, 1986 
    suspension notice or any temporary directive that extends the policy of 
    the suspension notice; and directed him to immediately begin 
    proceedings to disapprove State program definitions of VER that rely 
    upon the all permits standard. On September 21, 1992, pursuant to the 
    Government's motion for reconsideration, the court narrowed the portion 
    of its ruling concerning disapproval of State program definitions to 
    require only the disapproval of the Ohio program definition of VER 
    insofar as that definition affects Belville and its requests for VER 
    determinations. In doing so, the court accepted the Government's 
    argument that Federal remedy law prohibits the imposition of injunctive 
    remedies that are beyond the scope of the plaintiff's individual 
    injuries and related requests for VER determinations. Consequently, we 
    interpreted the decision barring use of the 1986 policy as applying 
    only to Ohio. The final rule that we are adopting today effectively 
    renders both the Belville I decision and the 1986 suspension notice 
    moot with respect to the applicable definition of VER.
    
    The 1991 Proposed Rule
    
        On July 18, 1991, we proposed to revise the definition of VER by 
    reinstating the takings standard, the good faith/all permits standard, 
    and the 1979 version of the needed for and adjacent standard. In 
    addition, we proposed to eliminate the separate standards for VER for 
    lands that come under the protection of section 522(e) after August 3, 
    1977. Instead, the proposed rule modified the other VER standards in 
    the definition to incorporate the concept that VER determinations 
    should reflect the circumstances that existed when the land came under 
    the protection of section 522(e), which may be later than August 3, 
    1977.
    
    The Energy Policy Act
    
        On October 24, 1992, the President signed the Energy Policy Act of 
    1992 (Pub. L. 102-486, 206 Stat. 2776) (``EPAct'') into law. Section 
    2504(b) of that law required adherence to the VER policy in the 
    November 20, 1986 suspension notice (51 FR 41952) for one year after 
    the date of enactment. That provision had the effect of staying 
    implementation of the July 1991 Belville I decision, as modified in 
    September 1992, and halting publication of a new final rule defining 
    VER based upon the 1991 proposed rule.
    
    Appropriations Act Moratoriums
    
        The EPAct provision expired on October 24, 1993. However, at the 
    Department's request, the appropriations acts for the Department of the 
    Interior and related agencies for fiscal years 1994 and 1995 each 
    included language that effectively placed a moratorium on adoption of a 
    new or revised Federal VER definition or disapproval of existing State 
    program definitions of VER. The last moratorium (section 111 of Pub. L. 
    103-332) lapsed on October 1, 1995. Congress did not include similar 
    language in any legislation for fiscal year 1996 or subsequent fiscal 
    years.
    
    The 1997 Proposed Rule
    
        After evaluating the comments received on the 1991 proposed rule 
    and taking intervening events into consideration, on January 31, 1997 
    (62 FR 4836), we withdrew the 1991 proposal and published a new, 
    extensively revised proposed rule concerning the definition of VER and 
    related issues. This proposal forms the basis for the final rule being 
    published today.
    
    VII. Section 761.5: How Are We Defining VER in This Final Rule?
    
    A. Introductory Language.
    
        The definition of VER that we are adopting today as part of 30 CFR 
    761.5 describes VER as a set of circumstances under which a person may, 
    subject to regulatory authority approval, conduct surface coal mining 
    operations that section 522(e) of the Act and 30 CFR 761.11 would 
    otherwise prohibit. This language establishes the conceptual framework 
    within which the provisions of paragraphs (a) through (c) of the 
    definition must be applied.
        In a change from the proposed rule, we have added the phrase 
    ``subject to regulatory authority approval'' to emphasize that a person 
    with VER is not automatically entitled to conduct surface coal mining 
    operations on protected lands. One commenter appeared to believe 
    otherwise. For the same reason, we have added a sentence to the 
    introductory portion of the definition to clarify that, even if a 
    person has VER and thus is exempt from the prohibitions and limitations 
    of section 522(e) and 30 CFR 761.11, surface coal mining operations on 
    these lands are subject to all other pertinent requirements of the Act 
    and the applicable regulatory program. The VER exception does not 
    entitle a person to an exemption from any permitting requirements or 
    performance standards.
        One commenter charged that by defining VER as a condition rather 
    than as a right, the proposed rule altered the essence of VER from a 
    recognition of property rights to a regulatory standard or condition 
    that a surface coal mining operation must meet prior to mining. We have 
    made a few essentially editorial changes in response to this
    
    [[Page 70772]]
    
    comment to clarify that VER means a set of circumstances (rather than 
    ``conditions'') under which a person is exempt from the prohibitions 
    and restrictions of section 522(e) and 30 CFR 761.11 and may seek 
    approval from the regulatory authority to conduct surface coal mining 
    operations on those lands in accordance with standard regulatory 
    program requirements.
        While property rights are an element of some of the standards for 
    VER, we do not agree with the commenter's claim that VER must be 
    defined solely in terms of property rights. Congress did not define 
    VER, and the legislative history of section 522(e) emphasizes that, 
    with certain exceptions, Congress intended to prohibit new surface coal 
    mining operations on the lands listed in that section. See, for 
    example, S. Rep. No. 95-128, at 55 (1977). We believe that these facts 
    argue against adoption of a rule that defines VER solely in terms of 
    property rights. Except for unleased Federally owned coal, such a rule 
    would present little or no impediment to surface coal mining operations 
    on the lands listed in section 522(e) of the Act. Thus, it would offer 
    little protection to those lands beyond the protection that the 
    permitting requirements and performance standards of the regulatory 
    program afford to all lands.
    
    B. Paragraph (a): Property Rights Demonstration.
    
        Paragraph (a) of the definition of VER in the final rule provides 
    that a person claiming VER for any type or component of surface coal 
    mining operations other than roads must demonstrate that a legally 
    binding conveyance, lease, deed, contract, or other document vests that 
    person with the right, as of the date that the land came under the 
    protection of section 522(e) of the Act and 30 CFR 761.11, to conduct 
    the type of surface coal mining operations intended. Interpretation of 
    the documents relied upon to establish property rights must be based 
    upon applicable State statutory or case law, unless otherwise provided 
    under Federal law. If no applicable law exists, interpretation of these 
    documents must reflect custom and generally accepted usage at the time 
    and place that the documents came into existence.
        Under the final rule, a person need not necessarily provide a 
    property rights demonstration for roads used or constructed as part of 
    surface coal mining operations. Instead, a person may demonstrate VER 
    for roads using any of the standards in paragraph (c) of the 
    definition.
        The final rule is substantively identical to the corresponding 
    provisions of the 1997 proposed rule, with one exception. We have added 
    a clause clarifying that the provision requiring the use of State law 
    to interpret documents does not apply if Federal law provides 
    otherwise, as may be the case if the documents were issued under the 
    Mineral Leasing Act or similar laws. In terms of organization, the 
    final rule differs slightly from the proposed rule in that, for reasons 
    of clarity and consistency with plain language principles, we have 
    segregated the property rights demonstration into a separate paragraph, 
    rather than including it in the same paragraph as the good faith/all 
    permits and needed for and adjacent standards.
        The requirement for a property rights demonstration and the 
    provisions concerning interpretation of documents are consistent with 
    the legislative history of the Act, which indicates that Congress did 
    not intend to enlarge or diminish property rights under State law. See 
    H.R. Conf. Rep. No. 95-493, at 106 (1977); H.R. Rep. No. 95-218, at 95 
    (1977); and S. Rep. No. 95-128, at 94-95 (1977). The legislative 
    history frequently references United States v. Polino, 131 F. Supp. 772 
    (N.D. W.Va. 1955), in which the court held that the right to use 
    surface mining methods to recover privately owned coal underlying 
    Federal lands within the Monongahela National Forest depends upon the 
    language of the deed, the interpretation of which is a matter of State 
    law.
        In addition, these provisions receive support from section 
    510(b)(6)(C) of SMCRA, which provides that, in cases where the private 
    mineral estate has been severed from the private surface estate, ``the 
    surface-subsurface legal relationship shall be determined in accordance 
    with State law,'' and that ``nothing in this Act shall be construed to 
    authorize the regulatory authority to adjudicate property rights 
    disputes.'' Language similar to the latter proviso also appears in the 
    right-of-entry provisions of section 507(b)(9) of the Act.
    
    History
    
        The requirement for a property rights demonstration has its origins 
    in paragraphs (a)(1) and (c) of the March 13, 1979 VER definition. 
    Paragraph (c) of that definition required that interpretation of the 
    terms of the documents be based not only upon usage and custom, but 
    also upon a showing that the parties to the document actually 
    contemplated a right to conduct the same underground or surface mining 
    activities for which the person claims VER. However, on November 27, 
    1979, in connection with the PSMRL I, Round I litigation, we published 
    a Federal Register notice stating that, as an alternative to the 
    language of paragraph (c), ``existing State law may be applied to 
    interpret whether the document relied upon establishes valid existing 
    rights.'' 44 FR 67942, November 27, 1979. This alternative reflected 
    the strong interest Congress expressed in deferring to State property 
    law when interpreting documents relating to property interests. See the 
    summary of and excerpts from the legislative history in Part V of this 
    preamble.
        For reasons that the preamble does not explain, the revised VER 
    definition that we adopted on September 14, 1983, did not contain a 
    counterpart to the property rights demonstration required by paragraph 
    (a)(1) of the 1979 definition. However, the 1983 rule retained a 
    revised version of paragraph (c) of the 1979 definition, which 
    concerned interpretation of documents. This provision, which was 
    codified as paragraph (e) of the 1983 definition, required that 
    interpretation of the terms of documents ``be based upon either 
    applicable State statutory or case law concerning interpretation of 
    documents conveying mineral rights or, where no applicable State law 
    exists, upon the usage and custom at the time and place it came into 
    existence.''
        On January 31, 1997 (62 FR 4836), we proposed to reinstate a 
    revised version of the property rights demonstration required under 
    paragraph (a)(1) of the 1979 definition. The proposed rule differed 
    from the 1979 rule in three ways:
         It did not describe the person making the VER 
    demonstration as the permit applicant, since the proposed rule also 
    clarified that a person may request a VER determination without 
    preparing and submitting a permit application.
         It provided that the requisite property rights must be 
    vested as of the date that the land comes under the protection of 30 
    CFR 761.11 or section 522(e), rather than as of August 3, 1977.
         It did not limit eligible property rights to the right to 
    produce coal.
        The proposed rule incorporated the 1983 language pertaining to the 
    interpretation of documents. However, we proposed to modify that 
    language to eliminate its restriction to documents concerning mineral 
    rights, since surface coal mining operations may involve property 
    interests other than mineral rights. Also, unlike the 1983 definition, 
    we proposed to require a property rights demonstration and apply the 
    interpretation of documents provision to the needed for and adjacent 
    standard.
    
    [[Page 70773]]
    
    (See the discussion of this standard in Part VII.D. of this preamble.)
        The final rule incorporates all elements of the proposed rule as 
    described above. The following discussion summarizes the comments that 
    we received on this aspect of the proposed rule and our disposition of 
    those comments.
    
    Summary and Disposition of Comments on the Proposed Rule
    
        One commenter requested that we revise the rule to clarify that the 
    deed, lease, or other documents relied upon for the property rights 
    demonstration must include explicit authority to conduct surface coal 
    mining operations. In addition, the commenter asserted that these 
    documents must explicitly sanction both the type of activity for which 
    VER is claimed and the scope and location of that activity. We do not 
    agree. In enacting the permitting requirements of sections 507(b)(9) 
    and 510(b)(6) of SMCRA, Congress considered measures that would have 
    required either explicit authority or surface owner consent in 
    situations in which the surface and mineral estates are in separate 
    ownership, but in the end decided to defer to State property law as 
    interpreted by State courts. See S. Conf. Rep. No. 95-337 and H.R. 
    Conf. Rep. No. 95-493, at 105-6 (1977); 123 Cong. Rec. H7587-88 (July 
    21, 1977) (statement of Rep. Seiberling). See also, Congress' failure 
    to adopt Secretary Andrus' recommendation that surface owner consent be 
    required in all cases for the entire area covered by a permit 
    application (H.R. Rep. No. 95-218, at 156 (1977)). There is no 
    suggestion in the Act or its legislative history that Congress intended 
    to accord lesser deference to State property law in determining VER 
    under section 522(e). Indeed, the discussion of the Polino decision and 
    related discussions concerning mining on national forest lands in the 
    congressional reports quoted or referenced in Part V of this preamble 
    indicate otherwise.
        Another commenter asserted that the property rights demonstration 
    should be limited to discerning whether the person has a property right 
    to conduct surface mining, not whether he or she has a right to use a 
    specific method of surface mining. As summarized and excerpted in Part 
    V of this preamble, the legislative history of the VER provision in 
    section 522(e) clearly indicates that Congress did not intend for this 
    provision to be construed in a manner that would allow surface coal 
    mining operations of a nature that are not authorized under State 
    property law. Therefore, the nature and detail of the property rights 
    demonstration is dependent upon State property law concerning the 
    interpretation of the language of deeds and other conveyances. It may 
    be as simple as demonstrating the right to conduct surface coal mining 
    operations in general, or, depending upon the wording of the conveyance 
    and State property law, the requester may need to demonstrate that the 
    method of surface coal mining operations meets the restrictions imposed 
    by the conveyance or State law.
        Some commenters expressed concern that the definition could be 
    interpreted as negating a VER determination each time an operation or 
    permit experiences a change in ownership. We disagree. As discussed in 
    Part IX of this preamble, State law, the applicable VER standard, and 
    the terms of the instrument of conveyance govern the extent to which a 
    transfer of property rights or a change in ownership of a permit or 
    operation impact VER. In general, we view VER as transferable because, 
    unless otherwise provided by State law, the property rights, permits, 
    and operations that form the basis for VER determinations are 
    transferable. Therefore, except as discussed in Part IX of this 
    preamble, we anticipate that permit transfers and changes in ownership 
    of operations and property rights subsequent to a VER determination 
    would have no effect on VER or the validity of the VER determination.
        One commenter stated that, by requiring a property rights 
    demonstration as part of the definition of VER, the proposed rule 
    failed to recognize that mining entities may seek and obtain a permit 
    for a surface coal mining operation before acquiring property rights 
    for all lands within the permit area. We believe that the commenter's 
    concern is misplaced. Under the final rule, there is no requirement 
    that the same person make both the property rights demonstration 
    required by paragraph (a) of the definition and the demonstration of 
    compliance with the good faith/all permits or needed for and adjacent 
    standard under paragraph (b) of the definition. In other words, under 
    the final rule, the person who makes the property rights demonstration 
    required by paragraph (a) of the definition need not be the same person 
    as the one who demonstrates compliance with the requirements of the 
    good faith/all permits or needed for and adjacent standards under 
    paragraph (b) of the definition. However, each request must demonstrate 
    compliance with both paragraphs (a) and (b) of the definition of VER. 
    And the person holding the permits must obtain the necessary property 
    rights before actually initiating surface coal mining operations on the 
    land in question.
        Some commenters opposed the proposed rule to the extent that it 
    provided that property rights must be vested as of the date that the 
    land comes under the protection of the Act, rather than as of the date 
    of enactment of SMCRA (August 3, 1977) as in the 1979 rule. The 
    commenters argued that persons conducting surface coal mining 
    operations after the enactment of SMCRA should have immediately 
    procured all necessary property rights (e.g., purchased a 300-foot 
    buffer around all planned minesites to preclude application of the 
    prohibition on mining within 300 feet of an occupied dwelling) to avoid 
    potential adverse impacts from the creation of new protected areas 
    after August 3, 1977. We do not agree. The lease or purchase of a 
    buffer zone would be impractical in cases where the owners of that land 
    refuse to lease or sell. Moreover, we first adopted the concept of 
    basing VER on the circumstances that existed when the land came under 
    the protection of section 522(e) rather than on the circumstances that 
    existed on August 3, 1977, as part of our 1983 definition of VER. As 
    discussed in Parts VII.F. and XVI of this preamble, this concept 
    withstood a legal challenge. In view of the existence of this concept 
    as part of our rules for 16 years, and the expectations engendered by 
    that rule, we are not persuaded by the commenters' argument.
        Some commenters opposed the proposed rule to the extent that it 
    provided that property rights other than the right to produce coal are 
    eligible for consideration. The commenters argued that this 
    modification was arbitrary, an imprudent and unreasonable giveaway of 
    surface rights, and inconsistent with congressional intent. They also 
    argued that this aspect of the proposed rule had no basis under SMCRA, 
    and that it was in violation of the definition of surface coal mining 
    operations in section 701(28) of the Act. We disagree.
        The statutory definition of surface coal mining operations in 
    section 701(28) includes ``activities conducted on the surface of lands 
    in connection with a surface coal mine or * * * surface operations and 
    surface impacts incident to an underground coal mine.'' In addition to 
    ``excavation for the purpose of obtaining coal,'' the definition 
    expressly includes ``the cleaning, concentrating, or other processing 
    or preparation'' of coal. And paragraph (B) of the definition includes 
    ``any adjacent land the use of which is
    
    [[Page 70774]]
    
    incidental to any such activities'' as well as roads, impoundments, 
    ventilation shafts, refuse banks, overburden piles, ``repair areas, 
    storage areas, processing areas, shipping areas and other areas upon 
    are sited structures, facilities, or other property or materials on the 
    surface, resulting from or incident to such activities [the activities 
    listed in paragraph (A) of the definition].'' Clearly, the definition 
    is not restricted to coal extraction activities or operations on lands 
    from which coal is extracted. Therefore, our final rule properly 
    acknowledges that, to the extent that a person has a right under State 
    property law to conduct an activity or construct a facility included 
    within the definition of surface coal mining operations on any lands 
    listed in 30 CFR 761.11 and section 522(e), that person may seek to 
    apply the VER exception to the proposed activity or facility even if 
    there are no plans to extract coal from those lands.
        As discussed above, the legislative history of the right-of-entry 
    provisions of sections 507(b)(9) and 510(b)(6)(C) of SMCRA and of the 
    prohibitions of section 522(e) indicates that Congress wanted to 
    respect and defer to State court interpretations of documents 
    concerning property rights. Hence, we find it appropriate to defer to 
    State property law to determine whether a person has a property right 
    to use a particular parcel of land for any activity or facility 
    included in the definition of surface coal mining operations, rather 
    than arbitrarily limiting the scope of the property rights to which the 
    VER exception applies to the right to extract coal.
        One commenter argued that the property rights demonstration must 
    include explicit authority, by deed, lease or otherwise, to engage in 
    non-extraction activities. He also asserted that the property rights 
    documents must explicitly sanction both the type of activity for which 
    VER is claimed and the scope and location of that activity. However, 
    the commenter failed to provide a rationale for these statements. We 
    see no reason or basis to establish differing standards for property 
    rights demonstrations based on whether the land will be used for coal 
    extraction or whether it will be used for other activities or 
    facilities included within the definition of surface coal mining 
    operations. Section 522(e) refers to surface coal mining operations 
    without differentiating among the various activities and facilities 
    included in the definition of that term. As discussed above and as 
    excerpted in Part V of this preamble, the legislative history of SMCRA 
    clearly indicates that Congress wanted to defer to State court 
    interpretations of documents concerning property rights. Therefore, we 
    see no basis or need to require that the documents in question 
    expressly authorize use of the land for activities and facilities that 
    are included in the definition of surface coal mining operations but 
    that do not directly produce coal. A demonstration that State statutory 
    or case law recognizes a person's right to use the land for those 
    activities and facilities under the terms of the document used to 
    establish property rights will suffice.
        Some commenters stated that the VER inquiry should begin and end 
    with the property rights demonstration. They argue that the Act and its 
    legislative history as well as various court decisions mandate adoption 
    of an ownership and authority standard for VER. That is, if a person 
    has the property right under State law to conduct surface coal mining 
    operations, the person also has VER under section 522(e) of SMCRA. As 
    discussed in detail in Part VII.C.5. of this preamble, we do not agree 
    that the Act and its legislative history require the adoption of an 
    ownership and authority standard for VER. For the reasons outlined in 
    Parts VII.A. and VII.C. of this preamble, we do not view VER as 
    coextensive or synonymous with property rights. Instead, we view 
    property rights as a prerequisite for demonstrating VER under the good 
    faith/all permits and needed for and adjacent standards.
    
    C. Paragraph (b): Primary Standards for VER
    
        On January 31, 1997, we proposed to adopt two standards for VER for 
    surface coal mining operations in general: the good faith/all permits 
    standard (paragraph (a)(1) of the proposed definition) and the needed 
    for and adjacent standard (paragraph (a)(2) of the proposed 
    definition). The final rule revises these standards in response to 
    comments and moves them to paragraph (b) of the definition. Part VII.C. 
    of this preamble provides an explanation of the good faith/all permits 
    standard and the disposition of related comments, while Part VII.D. of 
    the preamble discusses the needed for and adjacent standard and related 
    comments.
        Several commenters argued that standards for the VER exception in 
    section 522(e), which identifies lands that Congress designated as 
    unsuitable for surface coal mining operations, should be more 
    restrictive than the standard for exceptions under section 522(a), 
    which pertains to lands designated by petition. In the preamble to the 
    1979 definition of VER, we concurred with this argument:
    
        OSM decided that the VER phrase must be distinguished from the 
    definition of substantial legal and financial commitments. * * * The 
    latter exemption applies to the petition process under Section 
    522(a), whereas VER applies to the Congressional prohibitions of 
    mining under Section 522(e). This distinction suggests that, in 
    order to qualify for VER and thereby mine in the prohibited areas of 
    Section 522(e), they must have a property interest in the mine that 
    is even greater than the substantial legal and financial commitments 
    needed to mine despite a designation by petition under Section 
    522(a).
    
    44 FR 14491-92, March 13, 1979.
    
        We repeated this position in the Greenwood Land and Mining Co. VER 
    determinations at 46 FR 36758, July 15, 1981; 46 FR 50422, October 13, 
    1981; and 47 FR 56191, December 15, 1982.
        However, we reversed our stance in the preamble to the 1983 VER 
    definition, stating that ``the two concepts are separate and 
    distinct.'' 48 FR 41316, September 14, 1983. Neither the language of 
    the Act nor its legislative history supports the proposition that the 
    lands designated by Congress under section 522(e) are more deserving of 
    protection than the lands designated by petition under section 522(a). 
    See S. Rep. No. 95-128, at 55 (1977), which states that:
    
        [C]ertain lands simply should not be subject to new surface coal 
    mining operations. These include primarily and most emphatically 
    those lands which cannot be reclaimed under the standards of this 
    Act and the following areas dedicated by the Congress [in section 
    522(e)].
    
        The phrase ``lands which cannot be reclaimed under the standards of 
    this Act'' refers to petition-initiated mandatory designations under 
    section 522(a)(2), while the remainder of this passage addresses lands 
    designated by Congress under section 522(e). Clearly, the Senate 
    committee found at least some lands designated under section 522(a) to 
    be equal in importance to lands designated under section 522(e). 
    Consequently, we find no basis for the assumption that VER under 
    section 522(e) must be more restrictive than the standard for 
    exemptions from petition-initiated designations under section 522(a).
        Another commenter asserts that restricting VER to the circumstances 
    set out in the definition, especially the good faith/all permits 
    standard, is inconsistent with our posture concerning the 1979 
    definition. He notes that briefs filed on behalf of the Secretary in 
    connection with assorted litigation concerning the definition of
    
    [[Page 70775]]
    
    VER interpret the preamble to the 1979 definition of VER as meaning 
    that we did not intend to limit the scope of the VER exception to cases 
    meeting the standards prescribed by the definition. According to the 
    briefs, the definition identified only those situations in which a 
    person unequivocally has VER. In all other cases, VER would be 
    determined on a case-by-case basis.
        The briefs derive this characterization of the 1979 definition from 
    the first and last sentences of the following preamble discussion:
    
        VER is a site-specific concept which can be fairly applied only 
    by taking into account the particular circumstances of each permit 
    applicant. OSM considered not defining VER, which would leave 
    questions concerning VER to be answered by the States, the Secretary 
    and the courts at later times. Without a definition, however, many 
    interpretations of VER would be made and no doubt challenged by both 
    operators and citizens; and once valid existing rights 
    determinations are challenged, the permitting process would be 
    delayed. OSM has therefore concluded that VER should be defined in 
    order to achieve a measure of consistency in interpreting this 
    important exemption. Under the final definition, VER must be applied 
    on a case-by-case basis, except that there should be no question 
    about the presence of VER where an applicant had all permits for the 
    area as of August 3, 1977.
    
    44 FR 14993 (March 13, 1979), col. 2-3.
    
        The supplemental final environmental impact statement prepared for 
    a 1983 rulemaking describes the 1979 definition as follows:
    
        [T]he existing regulation, as modified by the court, provides 
    that at a minimum, an operator should be determined to have VER if 
    he had made a good faith effort to apply by August 3, 1977, for all 
    permits necessary to mine in one area. OSM, however, has 
    consistently maintained, in court and elsewhere, that in each case 
    OSM would examine the totality of the circumstances before deciding 
    on any VER application and that the regulatory standard is not the 
    exclusive means of obtaining VER.
    
    January 1983 Supplement to OSM-EIS-1, Vol. 1: Analysis, at IV-39 
    (citations omitted).
    
        In 1985, the U.S. District Court for the District of Columbia 
    acknowledged that the 1979 preamble could be read as suggesting the 
    interpretation discussed above, but the court questioned both the 
    accuracy of this interpretation, given the context of the sentence upon 
    which it depends, and the validity of the premise that preamble 
    language could supersede regulatory language:
    
        The government and the industry-intervenors argue that even 
    under the old ``all-permits'' test promulgated in 1979, states had 
    to make, in addition to the all-permits determination, an 
    independent takings analysis on a case by case basis in order to 
    determine whether VER existed. * * *
        To support their claim that the 1979 * * * rule included an 
    independent takings test, in addition to the all-permits test, 
    defendants and intervenors point to one sentence in the preamble to 
    the 1979 rule. ``Under the final definition, VER must be applied on 
    a case-by-case basis, except that there should be no question about 
    the presence of VER where an applicant had all permits for the area 
    as of August 3, 1977.'' 44 Fed. Reg. 14993 (1979). That sentence, to 
    be sure, does suggest that there would be instances other than the 
    all-permits situation in which a VER determination could be made. 
    But the paragraph in which it is included, however, may also mean 
    simply that the VER all-permits issue must of necessity be decided 
    anew each time a person seeks VER. In any event, no such alternate 
    method of obtaining VER was included in the final 1980 rule, see 30 
    C.F.R. Sec. 761.5 (1980).
    
    PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1561 (1985) 
    (footnote omitted), emphasis in original.
    
        For purposes of this rulemaking, we find it unnecessary to 
    determine whether the interpretation advanced in the briefs and 
    environmental impact statement remains valid in view of the 
    pronouncements in the court opinion. As discussed in Part VII.C. of 
    this preamble, we have reevaluated the language of the Act and its 
    legislative history. We have determined that adherence to the terms of 
    the good faith/all permits and needed for and adjacent standards in 
    paragraph (b) of the definition is the most reasonable interpretation 
    of VER and will better satisfy congressional intent in enacting section 
    522(e). And, in practice, to the extent allowed by the courts, we have 
    always adhered to the definition established in the rules in making VER 
    determinations, rather than relying upon the 1979 preamble to do 
    otherwise.
        One commenter urged us to adopt more restrictive permitting and 
    bonding requirements and performance standards for surface coal mining 
    operations conducted under the VER exception, regardless of the 
    standard that we selected for the definition of VER. We find no basis 
    under SMCRA for doing so, since there is no indication that Congress 
    intended stricter standards for surface coal mining operations on these 
    lands. Furthermore, we believe that our existing requirements are 
    sufficiently stringent to protect environmental resources to the extent 
    that SMCRA authorizes or requires protection of those resources. Among 
    other things, section 510(b)(2) of the Act and 30 CFR 773.15(c)(2) 
    prohibit approval of a permit application unless the applicant 
    affirmatively demonstrates that reclamation as required by the Act and 
    the regulatory program can be accomplished under the reclamation plan 
    in the permit application. In addition, section 509(a) of the Act and 
    30 CFR 800.14(b) require that the permittee post a performance bond in 
    an amount sufficient to assure completion of the reclamation plan if 
    the regulatory authority has to complete the work in the event of 
    forfeiture.
    1. What Alternatives Did We Consider?
        In addition to the ``no action'' (no rulemaking) alternative, the 
    environmental impact statement prepared for this rulemaking identified 
    four major options for a primary standard for VER to accompany the 
    needed for and adjacent standard:
         Good Faith/All Permits: Under this alternative, a person 
    would have VER if, prior to the date the land came under the protection 
    of 30 CFR 761.11 and section 522(e) of the Act, that person or a 
    predecessor in interest had obtained, or made a good faith effort to 
    obtain, all permits and other authorizations required to conduct 
    surface coal mining operations.
         Good Faith/All Permits or Takings: Under this alternative, 
    a person who could not meet the good faith/all permits standard would 
    still have VER whenever a failure to recognize VER would be expected to 
    result in a compensable taking of that person's property interests 
    under the Fifth and Fourteenth Amendments to the U.S. Constitution.
         Ownership and Authority: Under this alternative, 
    demonstration of both a property right to the coal and the right to 
    mine it by the method intended would constitute VER.
         Bifurcated: Under this alternative, the ownership and 
    authority standard would apply if the coal rights were severed from the 
    surface estate before the land came under the protection of 30 CFR 
    761.11 and section 522(e). Otherwise, the good faith/all permits 
    standard would apply.
        In the proposed rule published on January 31, 1997, we announced 
    our intention to adopt the good faith/all permits standard and the 
    needed for and adjacent standard as the primary standards for VER. The 
    draft environmental impact statement released on the same date 
    identified the good faith/all permits standard as the preferred 
    alternative to accompany the needed for and adjacent standard. In 
    general, the environmental community and members of the public at large 
    supported the good faith/all permits alternative, while industry 
    advocated
    
    [[Page 70776]]
    
    the ownership and authority alternative. The few States that commented 
    split among the good faith/all permits, takings, and bifurcated 
    alternatives.
    2. Why Did We Select the Good Faith/All Permits Standard?
        In enacting SMCRA, Congress did not provide clear or dispositive 
    direction on the meaning or purpose of VER under section 522(e). There 
    are credible supporting and opposing arguments for each alternative. 
    Indeed, as summarized in Part VI of this preamble, at various times 
    during the past two decades, we have either proposed or adopted all the 
    listed alternatives, plus some variations on these alternatives.
        However, after carefully evaluating all comments received and 
    conducting a rigorous analysis of the legislative history of section 
    522(e), relevant litigation, and the potential environmental impacts of 
    each alternative, we believe that the good faith/all permits standard 
    best achieves protection of the lands listed in section 522(e) in a 
    manner consistent with congressional intent at the time of SMCRA's 
    enactment. At the same time, it protects the interests of those persons 
    who had taken concrete steps to obtain regulatory approval for surface 
    coal mining operations on lands listed in section 522(e) before those 
    lands came under the protection of 30 CFR 761.11 and section 522(e). 
    And, since 20 of the 24 approved State regulatory programs under SMCRA 
    already rely upon either the good faith/all permits standard or the all 
    permits standard, adoption of a good faith/all permits standard would 
    cause the least disruption to existing State regulatory programs.
        The good faith/all permits standard is consistent with the 
    legislative history of section 522(e), which indicates that Congress' 
    purpose in enacting section 522(e) was to prevent new surface coal 
    mining operations on the lands listed in that section, either to 
    protect human health or safety, or because the environmental values and 
    other features associated with those lands are generally incompatible 
    with surface coal mining operations. The report prepared by the Senate 
    Committee on Energy and Natural Resources on S. 7, the Senate version 
    of the legislation that became SMCRA, states that:
    
        [T]he Committee has made a judgment that certain lands simply 
    should not be subject to new surface coal mining operations. These 
    include primarily and most emphatically those lands which cannot be 
    reclaimed under the standards of this Act and the following areas 
    dedicated by the Congress in trust for the recreation and enjoyment 
    of the American people: lands within the National Park System, the 
    National Wildlife Refuge System, the National Wilderness 
    Preservation System, the Wild and Scenic Rivers System, National 
    Recreation Areas, National Forests with certain exceptions, and 
    areas which would adversely affect parks or [places listed on the] 
    National Register of Historic Sites [sic].
        In addition, for reasons of public health and safety, surface 
    coal mining will not be allowed within one hundred feet of a public 
    road (except to provide access for a haul road), within 300 feet of 
    an occupied building or within 500 feet of an active underground 
    mine.
        Since mining has traditionally been accorded primary 
    consideration as a land use there have been instances in which the 
    potential for other equally or more desirable land uses has been 
    destroyed. The provisions discussed in this section were 
    specifically designed and incorporated in the bill in order to 
    restore more balance to Federal land use decisions regarding mining.
    
    S. Rep. No. 95-128, at 55 (1977).
    
        In addition, the report prepared by the House Committee on Interior 
    and Insular Affairs on H.R. 2, the House version of the legislation 
    that became SMCRA, states that:
    
        [T]he decision to bar surface mining in certain circumstances is 
    better made by Congress itself. Thus section 522(e) provides that, 
    subject to valid existing rights, no surface coal mining operations 
    except those in existence on the date of enactment, shall be 
    permitted on lands within the boundaries of units of certain Federal 
    systems such as the national park system and national wildlife 
    refuge system * * * or in other special circumstances * * *.
    
    H.R. Rep. No. 95-218, at 95 (1977).
    See also S. Rep. No. 95-128, at 94-95 (1977).
    
        The final environmental impact statement (EIS) for this rulemaking 
    indicates that, compared with the other alternatives considered, the 
    good faith/all permits standard is the most protective of the lands 
    listed in section 522(e). According to the analysis in the EIS, 
    adoption of the takings standard in place of the good faith/all permits 
    standard would result in the mining of an estimated additional 2,855 
    acres of protected lands between 1995 and 2015 (185 acres of section 
    522(e)(1) lands, 1,686 acres of Federal lands in eastern national 
    forests, and 984 acres of State park lands and buffer zones for State 
    parks). Adoption of either the bifurcated alternative or the ownership 
    and authority standard would result in the mining of an estimated 
    additional 3,062 acres during that time frame (304 acres of section 
    522(e)(1) lands, 1,761 acres of Federal lands in eastern national 
    forests, and 997 acres of State park lands and buffer zones for State 
    parks). See Table V-1 in Final Environmental Impact Statement OSM-EIS-
    29 (July 1999), entitled ``Proposed Revisions to the Permanent Program 
    Regulations Implementing Section 522(e) of the Surface Mining Control 
    and Reclamation Act of 1977 and Proposed Rulemaking Clarifying the 
    Applicability of Section 522(e) to Subsidence from Underground 
    Mining.''
        As these numbers show, the model predicts that the additional 
    disturbance would occur entirely on some of the lands for which the 
    Senate Committee expressed the most concern; i.e., public parks and the 
    lands protected by paragraphs (e)(1) and (e)(2) of section 522 of the 
    Act. See S. Rep. No. 95-128, at 55 (1977). Therefore, we believe that 
    adoption of the good faith/all permits standard for VER will best 
    fulfil the intent of Congress, as expressed in that report, to prohibit 
    new surface coal mining operations on the lands protected by section 
    522(e), with certain exceptions.
        In addition, the economic analysis that the U.S. Geological Survey 
    and we prepared for this rulemaking found that adoption of the good 
    faith/all permits standard would have a net positive benefit to 
    society, while adoption of the takings, ownership and authority, or 
    bifurcated alternatives would have a net negative benefit to society. 
    The analysis found negligible differences among the alternatives in 
    terms of their economic impact. None of the alternatives would have a 
    significant economic impact on the mining industry or the cost of 
    producing and delivering coal, assuming that the prohibitions and 
    restrictions of section 522(e) do not apply to subsidence from 
    underground mining operations. See ``Final Economic Analysis: Proposed 
    Revisions to the Permanent Program Regulations Implementing Section 
    522(e) of the Surface Mining Control and Reclamation Act of 1977 and 
    Proposed Rulemaking Clarifying the Applicability of Section 522(e) to 
    Subsidence from Underground Mining'' (July 1999).
        The good faith/all permits standard in the final rule requires a 
    demonstration that the person claiming VER, or a predecessor in 
    interest, had obtained, or made a good faith effort to obtain, all 
    permits and other authorizations required to conduct surface coal 
    mining operations on the land before it came under the protection of 30 
    CFR 761.11 and section 522(e) of the Act. Potentially necessary permits 
    and authorizations include, but are not limited to, mining permits, 
    National Pollutant Discharge Elimination System (NPDES) permits, U.S. 
    Forest Service special use permits, Mine Safety and Health 
    Administration authorizations, air quality plan approvals, local
    
    [[Page 70777]]
    
    government approvals, and (for some types of facilities) building 
    permits and zoning changes.
        The proposed rule language referred only to ``State and Federal 
    permits and other authorizations.'' Several commenters objected to this 
    limitation, noting that other governmental entities such as counties 
    may require permits for surface coal mining operations. The commenters 
    argued that these permits should be included within the universe of all 
    necessary permits and authorizations under the good faith/all permits 
    standard. In response, we have deleted the limiting phrase ``State and 
    Federal'' from the rule. We agree with the commenters that the good 
    faith/all permits standard should consider all necessary permits and 
    authorizations, not just State and Federal permits and authorizations.
        When permits and authorizations to operate do not establish 
    boundaries for the mining operation, the geographical extent of the VER 
    determination will be defined by the extent of surface coal mining 
    operations contemplated by all parties at the time of issuance of or 
    application for the permit or authorization. See the Greenwood Land and 
    Mining Co. VER determinations at 46 FR 36758, July 15, 1981; 46 FR 
    50422, October 13, 1981; and 47 FR 56191, December 15, 1982; and the 
    Mower Lumber Co. VER determinations at 45 FR 52467, August 7, 1980 and 
    45 FR 61798, September 17, 1980.
        Some commenters complained that the good faith/all permits standard 
    is not truly a bright-line standard. They cited the potentially wide 
    and continually changing array of permits and authorizations required 
    for surface coal mining operations and the difficulty in identifying 
    which permits were required at any particular time. We believe that 
    persons requesting a VER determination and the agency responsible for 
    making the VER determination will be able to use public records to 
    reconstruct what permits and authorizations were required for a 
    particular site on the date that the land comes under the protection of 
    30 CFR 761.11 and section 522(e) of the Act. As demonstrated in the 
    Greenwood and Mower determinations cited above, we have experienced 
    little difficulty in identifying what permits are required at any 
    particular time.
        One commenter expressed concern that the good faith/all permits 
    standard does not take into consideration the fact that mining firms 
    may not be legally required to apply for or obtain certain permits and 
    authorizations, such as an air quality plan approval, before obtaining 
    a SMCRA permit and initiating surface coal mining operations. We do not 
    interpret the good faith/all permits standard as requiring submission 
    of applications for all necessary permits and authorizations before the 
    date that the land comes under the protection of 30 CFR 761.11 or 
    section 522(e) of the Act. We believe that the language of this 
    standard is sufficiently flexible to remedy the concern raised by the 
    commenter. Specifically, we interpret this standard as providing the 
    agency making the VER determination with the discretion to decide (1) 
    which non-SMCRA permits and authorizations are needed to initiate 
    surface coal mining operations, and (2) what constitutes a good faith 
    effort to obtain all necessary permits and authorizations. In making 
    these decisions, the agency should consider any permitting time lines 
    or regulatory authority policies in place when the land came under the 
    protection of 30 CFR 761.11 and section 522(e).
        A good faith effort may not necessarily require actual submission 
    of applications for all required permits and authorizations in every 
    instance. However, at a minimum, a good faith effort to obtain all 
    necessary permits must include application for any required SMCRA 
    permit. Because the SMCRA permit is the major permit needed for a 
    surface coal mining operation, requiring submission of an application 
    for this permit will ensure that the requester has made a significant 
    effort to acquire the necessary permits. Therefore, we have added a 
    sentence to paragraph (b)(1) of the definition specifying that, at a 
    minimum, an application for any permit required under SMCRA must have 
    been submitted before the land comes under the protection of 30 CFR 
    761.11 and section 522(e).
        However, if, at the time that the land came under the protection of 
    30 CFR 761.11 and section 522(e) of SMCRA, State and Federal law did 
    not require a SMCRA permit for the type of operation planned, none is 
    needed to establish VER for that type of operation under this standard. 
    In that case, the person must have obtained, or made a good faith 
    attempt to obtain, all other necessary permits and authorizations to 
    operate from the appropriate agencies by that date.
        Revoked, expired or lapsed permits or authorizations do not qualify 
    for consideration under the good faith/all permits standard because (1) 
    they are no longer valid authorizations to operate and (2), in the case 
    of an expired permit, the failure to renew or seek renewal in a timely 
    fashion indicates a lack of a good faith effort to obtain all necessary 
    permits and authorizations. One commenter stated that this restriction 
    is incongruous with our position endorsing the transferability of VER 
    and our statement in the preamble to the proposed rule that VER attach 
    to the land rather than to a person or operation. The commenter 
    expressed concern that this restriction would inhibit the remining and 
    repermitting of bond forfeiture sites.
        The commenter has misinterpreted the scope of this restriction. 
    What we are saying is that once a permit expires, lapses, or is 
    revoked, a person who requests a VER determination subsequent to the 
    expiration, lapse, or revocation of that permit cannot rely upon the 
    prior existence of that permit to satisfy the requirements of paragraph 
    (b)(1) of the definition of VER. However, the expiration, lapse, or 
    revocation of a permit in no way alters the validity of VER 
    determinations made under the good faith/all permits standard before 
    the permit expired, lapsed, or was revoked. As discussed in Part IX of 
    the preamble to this final rule, we no longer adhere to the position 
    that VER always attach to the land. However, in the case of the good 
    faith/all permits standard, VER would effectively attach to the land 
    since the only requirement apart from the property rights demonstration 
    is a requirement that someone have made a good faith effort to obtain 
    all necessary permits. There is no requirement that a person actually 
    obtain a permit to demonstrate VER under this standard. Therefore, once 
    we or the State regulatory authority determine that a person has VER 
    for a particular site under the good faith/all permits standard, that 
    determination remains valid for all future surface coal mining 
    operations of the type and method covered by the determination, 
    regardless of the status of any permit that may exist for that land. 
    Therefore, the language to which the commenter objects does not present 
    a barrier to repermitting lands for which permits have expired, lapsed, 
    or been revoked. Previous VER determinations applicable to the site 
    under the good faith/all permits standard would remain valid and any 
    areas that come under the protection of 30 CFR 761.11 and section 
    522(e) before the permit expired, lapsed, or was revoked would be 
    covered by the exception for existing operations in 30 CFR 761.12.
        Some commenters argued that the good faith/all permits standard is 
    inherently unfair and unreasonable because so few persons could qualify 
    for VER under that standard 20 years after the enactment of SMCRA. They 
    also note that, while industry generally
    
    [[Page 70778]]
    
    acquires mineral rights well in advance of any planned mining, it does 
    not seek permits for those lands until mining is reasonably imminent. 
    Section 506(b) of the Act generally limits permit terms to 5 years and 
    section 506(c) provides that a permit will terminate if the permittee 
    has not begun surface coal mining operations within 3 years of the date 
    of issuance. Thus, the commenters argue, the good faith/all permits 
    standard unfairly penalizes persons who have purchased coal reserves 
    for investment purposes or to provide for the company's long-term 
    security or future expansion.
        We believe that the good faith/all permits standard properly 
    implements the intent of Congress to prevent most new surface coal 
    mining operations on the lands listed in section 522(e). We agree that, 
    except for lands coming under the protection of 30 CFR 761.11 and 
    section 522(e) after August 3, 1977, few persons will qualify for VER 
    under this standard. But this result is fair, reasonable, and 
    appropriate, given the congressional intent to protect section 522(e) 
    lands.
        To some extent, speculative investors in land and interests in land 
    assume the risk of future changes in the regulatory environment. Under 
    the 1979 Federal rule, the 1980 suspension notice, State regulatory 
    programs, and our 1986 suspension notice, an all permits or good faith/
    all permits standard has been in place for most of the time since the 
    enactment of SMCRA for most of the lands listed in section 522(e). 
    Therefore, few mineral owners could plausibly claim that they were 
    unaware of the applicability of the restriction, or that they had 
    reasonable expectations of being held to a less restrictive standard. 
    Furthermore, the needed for and adjacent VER standard in paragraph 
    (b)(2) of the definition offers relief to some persons who are unable 
    to meet the good faith/all permits standard. And, as discussed in the 
    final environmental impact statement and final economic analysis for 
    this rulemaking, mineral owners and mine operators frequently rely upon 
    the other exceptions provided by section 522(e), such as waivers for 
    the buffer zones for public roads and occupied dwellings, compatibility 
    findings for Federal lands in national forests, and joint approval for 
    publicly owned parks and historic places.
        Section 522(e) of the Act affects a person's eligibility to obtain 
    a permit for surface coal mining operations. Logically, then, the VER 
    exception under section 522(e) should ensure fairness by protecting a 
    pre-existing interest under the regulatory process that was in place 
    when the prohibitions of section 522(e) took effect. That is, in 
    general, the VER exception should protect an equitable interest in 
    regulatory approval of proposed surface coal mining operations for 
    which a person had taken steps to obtain regulatory approval in 
    reliance upon the circumstances that existed before the land came under 
    the protection of section 522(e). The good faith/all permits standard 
    protects this equitable interest in regulatory approval.
        This standard is also consistent with the general principles of 
    equitable estoppel; i.e., that one who has in good faith relied upon 
    and complied with the requirements for obtaining an interest by ``doing 
    all he could do'' should not be deprived of the interest. See Shostak 
    and Barrett, Valid Existing Rights in SMCRA, 5 J. Min. L. & Pol'y 585, 
    600 (1990), and Note, Regulation and Land Withdrawals; Defining ``Valid 
    Existing Rights'', 3 J. Min. L. & Pol'y 517 (1988). Thus, under the 
    good faith/all permits standard, in determining whether a person has 
    demonstrated VER, the agency will examine whether the record 
    demonstrates that, by the time that the land came under the protection 
    of 30 CFR 761.11 and section 522(e), that person or a predecessor in 
    interest had relied upon and complied with all regulatory requirements 
    for obtaining the necessary permits and authorizations by doing all 
    that could be done to obtain those permits and authorizations. If a 
    person makes both this demonstration and the property rights 
    demonstration required by paragraph (a) of the definition of VER, it 
    would be unfair to deny that person eligibility to apply for and obtain 
    a permit under SMCRA.
        SMCRA and its legislative history do not compel or support adoption 
    of a VER standard crafted to (1) ensure continuation of all standard 
    pre-SMCRA industry practices, (2) preserve the ability of all mineral 
    owners to extract coal from protected areas by surface coal mining 
    operations whenever authorized under State property law, or (3) 
    maintain broad eligibility for VER on a nondeclining basis. We believe 
    that adoption of a standard incorporating these principles would 
    effectively vitiate the protections of section 522(e) for all lands 
    except those overlying unleased Federal coal. This result would 
    contravene Congress' intention in enacting this section.
        Some commenters argued that nothing in the statute or its 
    legislative history remotely suggests that VER be defined in terms of a 
    good faith/all permits standard. We agree that neither the statute nor 
    its legislative history mentions a good faith/all permits standard for 
    VER. However, as discussed above, we believe that the good faith/all 
    permits standard is consistent with the legislative history of section 
    522(e). In addition, the definition of VER is not restricted to the 
    good faith/all permits standard; it also includes the needed for and 
    adjacent standard.
        Commenters also argue that if Congress had intended to provide a 
    permit-based exception to the prohibitions of section 522(e), it would 
    have done so expressly as it did in section 510(b)(5) (restrictions on 
    mining alluvial valley floors), section 510(d)(2) (special requirements 
    for surface coal mining operations on prime farmlands), and section 
    522(a)(2) (petition-initiated designations of land as unsuitable for 
    surface coal mining operations). According to the commenters, adoption 
    of a permit-based definition of VER conflicts with the judicially 
    endorsed presumption that Congress has acted both purposely and 
    intentionally when it includes particular language in one statutory 
    provision but not in another.
        We agree that the statute's use of different terminology for each 
    of these exceptions means that Congress probably intended a somewhat 
    different meaning for the VER exception under section 522(e) than for 
    the exceptions provided under the other statutory provisions cited by 
    the commenters. However, we do not agree that the difference in 
    terminology rules out the adoption of any type of permit-based standard 
    for VER under section 522(e). And the good faith/all permits standard 
    in this final rule differs from the permit-based exceptions under other 
    provisions of the Act in that it includes a good faith component, which 
    the others do not. Furthermore, our definition of VER includes the 
    needed for and adjacent standard, which is not a permit-based standard. 
    Finally, nothing in the litigation history of the definition of VER 
    indicates that the courts would likely find a permit-based standard 
    unacceptable for the reasons advanced by the commenters.
        Many commenters characterized Hodel v. Virginia Surface Mining & 
    Reclamation Ass'n, 452 U.S. 264, 296 n.37 (1981) (``Hodel v. VSMRA'') 
    as representing a rejection of a permit-based standard for VER, or at 
    least an indication that the courts would view such a standard with 
    disfavor. In that case, the Supreme Court stated in a footnote that 
    nothing in the statutory language of SMCRA or its legislative history 
    would compel adoption of an all permits standard for VER. One commenter 
    also argued that, in National
    
    [[Page 70779]]
    
    Wildlife Fed'n v. Hodel, 839 F.2d 694, 750 n.86 (D.C. Cir. 1988) (``NWF 
    v. Hodel''), the U.S. Court of Appeals for the Federal Circuit 
    characterized this Supreme Court pronouncement as a rejection of the 
    all permits standard: ``[T]he Supreme Court has previously rejected a 
    too-restrictive interpretation of VER in an early challenge to the 
    SMCRA brought by industry.'' We respectfully disagree with these 
    characterizations of the Supreme Court's decision and opinion. First, 
    the definition of VER was not before the court. Second, the language 
    chosen by the Supreme Court is decidedly neutral. It addresses only the 
    question of whether the statute compels adoption of an all permits 
    standard. It does not reach the issue of whether an all permits 
    standard (or good faith/all permits standard) is permissible.
        Commenters attacked the good faith/all permits standard as 
    unconstitutionally defining property rights in violation of the Tenth 
    Amendment to the Constitution, which reserves that power to the States 
    as one of their unenumerated powers. We disagree. Our definition of VER 
    clearly defers to State property law on all questions of property 
    rights. The final rule defining VER does not by its terms deprive any 
    person of property rights. Instead, our definition establishes the 
    limits of the VER exception to the prohibitions and restrictions of 
    section 522(e), based on equitable considerations.
        Furthermore, in Hodel v. VSMRA, 452 U.S. at 291 (1981), the Supreme 
    Court stated:
    
        The Court long ago rejected the suggestion that Congress invades 
    areas reserved to the States by the Tenth Amendment simply because 
    it exercises its authority under the Commerce Clause in a manner 
    that displaces the States' exercise of their police powers.
    
        Commenters also argued that the good faith/all permits standard 
    denies property owners due process under the Fifth Amendment because it 
    conditions the retention of a property right on conditions that are 
    unreasonable and of which the property owner had inadequate notice. We 
    disagree. Property owners had the opportunity to comment on either an 
    all permits or good faith/all permits standard in the 1978, 1982, 1988, 
    1991, and 1997 proposed rules. Furthermore, the final rule creates 
    little change in the status quo since most States have applied a good 
    faith/all permits or all permits standard ever since they obtained 
    approval of their SMCRA regulatory programs. In addition, when the VER 
    standard is applied, all VER determinations have been and will continue 
    to be subject to administrative and judicial review.
        Commenters allege that the good faith/all permits standard 
    improperly relies upon the opinion in PSMRL I, Round I, 14 Env't Rep. 
    Cas. (BNA) at 1090-91 (1980). They note that, on February 1, 1983, the 
    U.S. Court of Appeals for the Federal Circuit remanded these 
    regulations to the Secretary for review and revision at his request. 
    The order of remand in this case stated that the judgment of the 
    district court in PSMRL I, Round I, supra, could not be considered 
    final. See In re Permanent Surface Mining Regulation Litigation, No. 
    80-1810, Order of Remand (D.C. Cir., Feb. 1, 1983). While the district 
    court's decision lacks precedential weight, the order of remand does 
    not prohibit use of the opinion as guidance in developing revised 
    regulations. Regardless, as discussed above, our rationale for adoption 
    of the good faith/all permits standard rests primarily upon our 
    analysis of the legislative history of section 522(e) and Congress' 
    purpose in enacting that section, not upon the opinion accompanying the 
    court's decision. Only the good faith component has its origins in the 
    PSMRL I, Round I decision.
        Commenters also asserted that the definition of VER does not 
    comport with our statement in the PSMRL I, Round I litigation that 
    ``Congress intended the term valid existing rights to encompass 
    property rights recognized as valid under state case law.'' 14 Env't 
    Rep. Cas. (BNA) at 1090 (1980). The commenters overlook the context of 
    this statement, which pertained only to paragraph (c) of the 1979 
    definition of VER. See 44 FR 67942, November 27, 1979. Paragraph (c) 
    established criteria for the interpretation of documents used as part 
    of the property rights demonstration. It did not comprise an 
    independent standard for VER, contrary to the apparent assumptions of 
    the commenters.
        As noted in the decision, the Secretary committed only to revise 
    the definition to state that documents dealing with property rights 
    entitling one to surface mine coal will be interpreted in accordance 
    with appropriate State court decisions. He did not agree to waive the 
    other requirements of the 1979 definition, which include compliance 
    with one of the VER standards in paragraphs (a) and (b) of the 
    definition (the all permits standard, the needed for and adjacent 
    standard, or the separate standard for haul roads). Nor did he agree to 
    alter paragraph (d) of the 1979 definition, which provided that VER 
    ``does not mean mere expectation of a right to conduct surface coal 
    mining operations.''
        One commenter complained that the version of the good faith/all 
    permits standard that we proposed in 1997 differs sharply from our 
    representations to the courts concerning the meaning of VER under 
    section 522(e). The commenter specifically referred to and quoted a 
    reply brief that the Government filed with the Supreme Court in Hodel 
    v. VSMRA, 452 U.S. 264 (1981), on behalf of the Secretary. We agree 
    that the final rule is not fully consistent with the statements in this 
    brief. However, as discussed above and in Part VII.C.5. of this 
    preamble, we no longer subscribe to this brief's interpretation of the 
    legislative history of section 522(e). Furthermore, the discussion of 
    VER in the brief occurred in the context of a facial challenge to 
    section 522(e) of the Act. The definition of VER was not before the 
    Court, and the Court did not rule on the meaning of the VER exception. 
    As the brief itself notes, the Secretary was engaged in rulemaking to 
    redefine VER at the time that the brief was filed. And, as discussed 
    above and in Part VII.C.5. of this preamble, we believe that the VER 
    standards in the final rule are the standards that are most consistent 
    with the legislative history and Congress' intent in enacting section 
    522(e).
        Some commenters opposed the good faith/all permits standard as a 
    violation of the principle of statutory construction that a statute 
    must be construed in a manner that affords each provision separate 
    effect. Specifically, they charged that adoption of the good faith/all 
    permits standard would effectively merge the VER exception under 
    section 522(e) into the exception for existing operations under the 
    same section, and thus improperly render the VER exception superfluous. 
    We do not agree. First, as defined in this rule, the exception for 
    existing operations does not apply to lands for which a permit has not 
    actually been obtained; i.e., it has no good faith component.
        Second, the exception for existing operations includes authorized 
    operations that have already begun surface coal mining operations 
    before the land comes under the protection of 30 CFR 761.11 and section 
    522(e); the VER exception is not intended to apply to these operations. 
    Third, the definition of VER is not restricted to the good faith/all 
    permits standard. It also includes the needed for and adjacent standard 
    and a separate standard for roads, neither of which has any counterpart 
    in the exception for existing
    
    [[Page 70780]]
    
    operations in 30 CFR 761.12. Therefore, the VER exception includes 
    significant differences from the exception for existing operations. The 
    only overlap occurs with respect to unstarted operations that have 
    obtained a permanent program permit under SMCRA.
        In summary, we believe that the good faith/all permits standard is 
    both reasonable and consistent with congressional intent. As discussed 
    above and as summarized in Part V of this preamble, the legislative 
    history is sparse and unclear, and parts are arguably inapplicable with 
    respect to how Congress intended the VER exception in section 522(e) of 
    the Act to be interpreted. In the face of this difficulty in 
    determining Congress' intent, we believe that the good faith/all 
    permits standard best balances a number of statutory purposes and 
    policy objectives. These purposes and objectives include establishing a 
    reasonable standard that is practicable to administer, providing 
    substantial environmental protection to congressionally designated 
    areas, providing an exception to the prohibition on surface coal mining 
    operations in those areas when it would be unfair to apply the 
    prohibition, protecting surface landowners from the adverse effects of 
    surface coal mining operations, minimizing disruption of existing State 
    regulatory programs and expectations engendered thereunder, and, to the 
    extent that it harmonizes with the other purposes and objectives, 
    mitigating or minimizing compensable takings of property interests.
    3. What Comments Did We Receive Regarding Takings Issues Concerning the 
    Good Faith/All Permits Standard?
        Many commenters argued that the good faith/all permits standard is 
    constitutionally infirm because of its Fifth Amendment takings 
    implications. This argument appears to rely upon three premises: (1) 
    that any interference with property rights recognized under State law 
    would be a compensable taking, (2) that the good faith/all permits 
    standard would effectively deny mineral owners any reasonable economic 
    use of their property, and (3) that a standard which, when applied, 
    might result in some compensable takings is facially unconstitutional. 
    We do not agree that any of these premises is correct.
        With respect to the definition of VER under section 522(e) of 
    SMCRA, the U.S. District Court for the District of Columbia has held 
    that ``no mechanical formula [for VER] will ever perfectly define the 
    universe of circumstances in which failure to grant VER will constitute 
    a taking.'' PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1563 
    (1985). And the Supreme Court has long held that regulation that 
    affects the value, use, or transfer of property may constitute a 
    compensable taking if it goes too far. Pennsylvania Coal Co. v. Mahon, 
    260 U.S. 393 (1922). However, the courts have also long held that the 
    rights of property owners are not absolute and that government may, 
    within limits, regulate the use of property. See the summary of takings 
    law published at 56 FR 33161, July 18, 1991.
        The Supreme Court has identified three factors as having particular 
    significance in a regulatory takings analysis: (1) the economic impact 
    of the proposed government policy or action on the property interest 
    involved, (2) the extent to which the action or regulation interferes 
    with any reasonable, investment-backed expectations of the owner of the 
    property interest, and (3) the character of the government action. 
    Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 224-25 
    (1986). The courts generally find that a compensable taking exists only 
    if the government action would cause inequitably disproportionate 
    economic impacts on the property or interfere with reasonable, 
    investment-backed expectations of persons with an interest in the 
    property to such an extent that justice and fairness would require that 
    the public, rather than the private property owners, pay for the public 
    benefit resulting from the restrictions that the government action 
    places on the property. Armstrong v. United States, 364 U.S. 40, 49 
    (1960).
        In declining to review the constitutionality of section 522(e) of 
    SMCRA, the Supreme Court explained its historic approach to takings 
    analyses as follows:
    
        [T]his court has generally ``been unable to develop any ``set 
    formula'' for determining when ``justice and fairness'' require that 
    economic injuries caused by public action be compensated, rather 
    than remain disproportionately concentrated on a few persons.'' 
    Rather, it has examined the ``taking'' question by engaging in 
    essentially ad hoc, factual inquiries that have identified several 
    factors--such as the economic impact of the regulation, its 
    interference with reasonable investment-backed expectations, and the 
    character of the government action--that have particular 
    significance. Kaiser Aetna v. United States, 444 U.S. 164, 175 
    (1979). * * * These ``ad hoc factual inquiries'' must be conducted 
    with respect to specific property, and the particular estimates of 
    economic impact and ultimate valuation relevant in the unique 
    circumstances.
    
    Hodel v. VSMRA, 452 U.S. at 296 (1981) (citations omitted).
    
        When regulation goes too far in infringing on private property 
    rights is not precisely definable. The Supreme Court has consistently 
    ``eschewed any `set formula' for determining how far is too far, 
    preferring to `engage in * * * essentially ad hoc, factual inquiries.' 
    '' Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015 (1992) 
    (``Lucas''), quoting Penn Cent. Transp. Co. v. New York City, 438 U.S. 
    104, 124 (1978). In Lucas, the Supreme Court recognized what it 
    characterized as a ``logically antecedent inquiry'' into a takings 
    claimant's title prior to the inquiry into whether the government has 
    interfered with rights inherent in that title in a manner that rises to 
    the level of a Fifth Amendment taking. Id. at 1027. The Court noted in 
    Lucas that its takings jurisprudence ``has traditionally been guided by 
    the understandings of our citizens regarding the content of, and the 
    State's power over the `bundle of rights' that they acquire when they 
    obtain title to property.'' Id. at 1027. Thus, the Court continued, 
    some regulation of rights should be expected. ``In the case of personal 
    property, by reason of the State's traditionally high degree of control 
    over commercial dealings,'' the possibility of significant impacts 
    should be anticipated. Id. at 1027-28. But the Court indicated that 
    interests in land have greater expectations of protection. Id. at 1028. 
    Further, the Court suggested that an ``owner's reasonable 
    expectations'' may be critical to a takings determination. Id. at 1016 
    n.7. These expectations are those that ``have been shaped by the 
    State's law of property; i.e., whether and to what degree the State's 
    law has accorded legal recognition and protection to the particular 
    interest in land with respect to which the takings claimant alleges a 
    diminution (or elimination) of value.'' Id. at 1016 n.7.
        However, in a subsequent case, the Supreme Court reiterated that 
    ``our cases have long established that mere diminution in the value of 
    property, however serious, is insufficient to demonstrate a taking.'' 
    Concrete Pipe & Prod. v. Construction Laborers Pension Trust, 508 U.S. 
    602, 645 (1993). The Court cited Village of Euclid v. Ambler Realty 
    Co., 272 U.S. 365, 384 (1926), which involved an approximate 75 percent 
    diminution in value, and Hadacheck v. Sebastian, 239 U.S. 394, 405 
    (1915), which involved a 92.5 percent diminution in value, as examples 
    of the cases to which it was referring.
    
    [[Page 70781]]
    
        Even under Lucas (see id. at 1027-28), coal owners and the coal 
    mining industry may not necessarily enjoy the same expectations of 
    freedom from government interference as persons who have historically 
    been subject to a lesser degree of regulation, a factor that must be 
    considered when evaluating the impact of the governmental action on 
    investment-backed expectations. The Supreme Court recently held that 
    ``those who do business in the regulated field cannot object if the 
    legislative scheme is buttressed by subsequent amendments to achieve 
    the legislative end.'' Concrete Pipe & Prod. v. Construction Laborers 
    Pension Trust, 508 U.S. 602, 645 (1993) (citations omitted). And, in 
    the same case, the Court ruled that ``legislation readjusting rights 
    and burdens is not unlawful solely because it upsets otherwise settled 
    expectations.'' Id. at 646 (citations omitted).
        In PSMRL I, Round I, 14 Env't Rep. Cas. (BNA) at 1091 (1980), the 
    U.S. District Court for the District of Columbia declined to rule on 
    the constitutionality of the 1979 all permits standard for VER because 
    the plaintiffs' takings claims were purely hypothetical. However, in 
    its opinion, the court stated that it found persuasive the government's 
    arguments that the definition met the standards of existing takings 
    jurisprudence. And the definition that we are adopting today is 
    consistent with that court's declaration that ``a good faith attempt to 
    have obtained all permits before the August 3, 1977 cut-off date should 
    suffice for meeting the all permits test.''
        Furthermore, in Hodel v. VSMRA, 452 U.S. at 296 n.37 (1981), the 
    Supreme Court stated that, while nothing in the statutory language of 
    SMCRA or its legislative history would compel adoption of an all 
    permits standard for VER, section 522(e) ``does not, on its face, 
    deprive owners of land within its reach of economically viable use of 
    their land since it does not proscribe nonmining uses of such land.'' 
    The definition of VER that we are adopting today likewise does not 
    prohibit nonmining uses of land protected by section 522(e). Therefore, 
    we believe that the good faith/all permits standard is consistent with 
    the principles established by the Supreme Court.
        The commenters are correct in noting that neither of these 
    decisions specifically endorses the good faith/all permits standard as 
    constitutionally sound. However, there is nothing in these court 
    decisions, SMCRA, or its legislative history that precludes adoption of 
    a good faith/all permits standard for VER under section 522(e) or 
    suggests that adoption of this standard would be a facial regulatory 
    taking. Therefore, the only question is the degree to which its 
    application to individual situations may result in a compensable 
    taking.
        The takings implication assessment in Part XXIX.E. of this preamble 
    states that the good faith/all permits standard has significant takings 
    implications as that term is defined by Executive Order 12630. It also 
    states that, of all the alternatives that we considered, this standard 
    has the greatest potential to result in compensable takings. However, 
    the assessment explains that, while these takings implications are 
    unquantifiable, we anticipate that the rule will result in very few 
    compensable takings. The final environmental impact statement and final 
    economic analysis for this rulemaking suggest that any takings that do 
    occur will be limited largely to lands in eastern national forests with 
    Federal surface and non-Federal mineral ownership and to lands in State 
    and local parks and buffer zones for those parks.
        Also, we anticipate that, in most cases, the lands protected by 
    section 522(e) and 30 CFR 761.11 will comprise only a small portion of 
    the relevant property interests as a whole. Therefore, under 
    established takings jurisprudence, these prohibitions are unlikely to 
    result in compensable takings. See Penn Cent. Transp. Co. v. New York 
    City, 438 U.S. 104, 130 (1978) (``Takings jurisprudence does not divide 
    a single parcel into discrete segments and attempt to determine whether 
    rights in a particular segment have been entirely abrogated.'') For 
    example, because mineral ownership is commonly less fragmented than 
    surface ownership, the buffer zones for dwellings, cemeteries, roads, 
    public buildings, and parks are unlikely to preclude surface coal 
    mining operations on the bulk of a parcel for which a person owns the 
    mineral rights. Even if the entire parcel lies within one or more of 
    the prohibited areas, there may be no compensable taking because (1) 
    the person may be able to recover the coal through underground mining 
    methods without constructing surface facilities on the protected lands, 
    or (2) there may be residual non-coal interests in the property which 
    are unaffected or even enhanced by the prohibitions. For example, 
    prohibition of surface coal mining operations could increase the value 
    of the surface estate for residential or commercial development.
        One commenter stated that Penn Central retains little currency in 
    view of the subsequent Lucas decision. We find nothing in Lucas that 
    expressly or by implication reverses the aspect of Penn Central quoted 
    in the previous paragraph. And, in a decision rendered after Lucas, the 
    Supreme Court reaffirmed this aspect of its Penn Central decision:
    
        We reject Concrete Pipe's contention that the appropriate 
    analytical framework is the one employed in our cases dealing with 
    permanent physical occupation or destruction of economically 
    beneficial use of real property. [Citation to Lucas omitted.] While 
    Concrete Pipe tries to shoehorn its claim into this analysis by 
    asserting that ``the property of [Concrete Pipe] which is taken, is 
    taken in its entirety,'' we rejected this analysis years ago in Penn 
    Central, where we held that a claimant's parcel of property could 
    not first be divided into what was taken and what was left for the 
    purpose of demonstrating the taking of the former to be complete and 
    hence compensable. To the extent that any portion of property is 
    taken, that portion is always taken in its entirety; the relevant 
    question, however, is whether the property taken is all, or only a 
    portion of, the parcel in question.
    
    Concrete Pipe & Prod. v. Construction Laborers Pension Trust, 508 U.S. 
    602, 643-44 (1993), citations omitted.
        One commenter argued that the statutory prohibition in section 
    522(e), when combined with the good faith/all permits standard for VER, 
    would physically appropriate a distinct property interest (the right to 
    surface mine) and thus would constitute a compensable taking regardless 
    of how much of a person's property was actually affected by section 
    522(e) or what other uses of the property might remain. However, the 
    commenter did not explain why this situation would qualify as a 
    physical intrusion under the standard established in Loretto v. 
    Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). And we are 
    aware of no basis for such an argument under existing takings 
    jurisprudence.
        One commenter stated that, based upon the takings implication 
    assessment, adoption of the good faith/all permits standard is 
    proscribed by Edward J. DeBartolo Corp. v. Florida Gulf Coast Building 
    & Construction Trades Council, 485 U.S. 568 (1988). In that case, which 
    dealt with First Amendment issues, the Supreme Court held that if ``an 
    otherwise acceptable construction of a statute would raise serious 
    constitutional problems, the Court will construe the statute to avoid 
    such problems unless such construction is plainly contrary to the 
    intent of Congress.'' Id. at 575. The commenter argued that, under this 
    decision, we must select an alternative other than the good faith/all 
    permits standard because the takings implication assessment in the 
    proposed rule found that the good faith/all permits standard has the 
    greatest potential to result in
    
    [[Page 70782]]
    
    compensable takings. We do not agree that the rationale in this 
    decision prohibits adoption of the good faith/all permits standard.
        First, we believe that adoption of another alternative would be 
    contrary to the intent of Congress. In enacting section 522(e) of 
    SMCRA, Congress clearly intended to minimize the number of new surface 
    coal mining operations on protected lands. The other alternatives for 
    the definition of VER are all less protective of the lands in section 
    522(e). Therefore, we believe that adoption of one of those 
    alternatives would be contrary to the intent of Congress in enacting 
    section 522(e).
        Second, we do not agree that adoption or implementation of the good 
    faith/all permits standard presents a constitutional problem. The Fifth 
    Amendment only prohibits the taking of property without compensation. 
    And the Tucker Act, 28 U.S.C. 1491, provides recourse for an individual 
    to seek compensation in any situation in which a compensable taking 
    might arise as a result of a Federal action. According to the Supreme 
    Court, when ``compensation is available for those whose property is in 
    fact taken, the government action is not unconstitutional.'' United 
    States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 128 (1985). And 
    the Supreme Court also ruled that the Takings Clause ``is designed not 
    to limit governmental interference with property rights per se, but 
    rather to secure compensation in the event of otherwise proper 
    interference amounting to a taking.'' First English Evangelical 
    Lutheran Church v. County of Los Angeles, 482 U.S. 304, 315 (1987).
        Furthermore, we have used the good faith/all permits standard most 
    of the time since SMCRA's enactment. And 20 of the 24 approved State 
    regulatory programs under SMCRA rely upon a VER definition that 
    includes either the all permits standard or the good faith/all permits 
    standard. Apart from two cases of limited precedential weight from the 
    U.S. District Court for the Southern District of Ohio, Belville Mining 
    Co. v. Lujan, No. C-1-89-790 (S.D. Ohio 1991) (Belville I) and Sunday 
    Creek Coal Co. v. Hodel, No. C-2-88-0416 (S.D. Ohio, June 2, 1988), we 
    are not aware of any final decisions in which State or Federal courts 
    have found that the good faith/all permits standard, or an agency 
    determination that a person did not have VER under the good faith/all 
    permits standard, was invalid on the basis of a conclusion that the 
    standard or determination would result in a compensable taking of a 
    property interest under the Fifth and Fourteenth Amendments to the U.S. 
    Constitution. And we are aware of no final decisions in which the U.S. 
    Court of Federal Claims has held that a person who could not meet the 
    good faith/all permits standard suffered a compensable taking. 
    Therefore, we anticipate that application of the good faith/all permits 
    standard will result in very few compensable takings.
        The preamble to the proposed rule contains the following 
    discussion, which relies upon a zoning analogy to support the validity 
    of the good faith/all permits standard in the face of a Fifth Amendment 
    challenge:
    
        Section 522(e) is a form of land use regulation that may be 
    considered analogous to certain provisions of zoning law. VER under 
    section 522(e) is generally analogous to those provisions of land 
    use law that define when a person attains a vested right to a 
    particular land use regardless of subsequent changes in zoning 
    ordinances that would otherwise prohibit or restrict that use. State 
    laws vary widely with respect to when a person develops a vested 
    interest in a particular land use, but mere ownership is rarely 
    sufficient. Some States require that a person both obtain all 
    necessary permits and make significant expenditures in reliance on 
    those permits. Others require that a person reach a certain point in 
    the permit process or make substantial good faith expenditures based 
    on the existing zoning before he or she develops a vested interest 
    in uses allowed under that zoning.
        The good faith/all permits standard for VER has a similar effect 
    and is based in part on a similar rationale. Therefore, OSM 
    anticipates that, in any review of the validity of a final VER 
    standard, a court would consider principles analogous to those that 
    have guided judicial decisions on challenges to the validity of 
    zoning ordinances and similar land use regulatory provisions. In 
    general, the courts have upheld land use restrictions as a 
    legitimate exercise of the police power under the U.S. Constitution.
    
    62 FR 4844, January 31, 1997.
        One commenter attacked this analogy as inappropriate and 
    inconsistent with constitutional law. The commenter argued that zoning 
    authority arises from the plenary police powers reserved to the States 
    under the Tenth Amendment to the Constitution, while Congress' 
    authority to regulate intrastate coal mining derives from judicial 
    interpretation of the Commerce Clause of the Constitution. See United 
    States v. Lopez, 514 U.S. 549, 566 (1995), citing Hodel v. VSMRA, 
    supra. The commenter also quoted a different Supreme Court decision on 
    SMCRA, in which the Court stated:
    
        We do not share the view of the District Court that the Surface 
    Mining Act is a land-use measure after the fashion of the zoning 
    ordinances typically enacted by state and local governments.
    
    Hodel v. Indiana, 452 U.S. 314, 331 n.18 (1981).
    
        We agree that the constitutional authority for SMCRA is the 
    Commerce Clause. See Hodel v. VSMRA, 452 U.S. at 275-283 (1981), and 
    Hodel v. Indiana, 452 U.S. at 321-329 (1981). We did not intend the 
    discussion in the proposed rule to be interpreted as identifying the 
    police power as a source of authority for either SMCRA or adoption of 
    implementing regulations. Rather, we intended that discussion to 
    explain in part why we do not anticipate that the courts will find this 
    standard to be a facial regulatory taking; i.e., we expect the courts 
    to evaluate this rule as a justifiable balancing of private rights with 
    protection of public interests, given the dictates of SMCRA. Our 
    statement that, in general, the courts have upheld land use 
    restrictions as a legitimate exercise of the police power under the 
    Constitution referred to litigation involving measures enacted by State 
    and local governments, not Federal laws and regulations.
        One commenter argued that the good faith/all permits standard has 
    no takings implications because all mining in section 522(e) areas 
    would be either a public nuisance or a threat to public health and 
    safety. The commenter stated that, under background principles of 
    property and nuisance law, prohibition of surface coal mining 
    operations in these areas would never rise to the level of a 
    compensable taking. While this statement may be true in some cases for 
    some lands listed in section 522(e), the ad hoc, fact-specific nature 
    of takings jurisprudence means that we cannot assume that it will 
    always be true.
        In Lucas, supra, at 17-25, the Supreme Court stated that the 
    ``harmful or noxious use'' principle in Goldblatt v. Town of Hempstead, 
    369 U.S. 590 (1962), and Mugler v. Kansas, 123 U.S. 623 (1887) (the 
    nuisance law to which the commenter refers) was merely an earlier 
    description by the Court of the police power justification for allowing 
    the government to cause some diminution in the value of private 
    property without requiring that the owner of that property be 
    compensated. However, in Lucas, the Court held that a property owner 
    must be compensated for all total regulatory takings; i.e., situations 
    in which the owner retains no economically viable or beneficial use of 
    the property, unless the use or uses in question are already prohibited 
    under background principles of State nuisance and property law.
        The Court further stated that ``[t]he fact that a particular use 
    has long been engaged in by similarly situated owners
    
    [[Page 70783]]
    
    ordinarily imports a lack of any common law prohibition.'' Lucas, 505 
    U.S. at 1015. This premise might apply to surface coal mining 
    operations in many of the areas protected by section 522(e) because 
    State and local laws often did not prohibit surface coal mining 
    operations in these areas before SMCRA. Its exact applicability would 
    vary from State to State and locality to locality depending on State 
    and local laws and the facts of each case. Hence, the commenter's claim 
    that all mining in section 522(e) areas is per se a public nuisance and 
    a threat to public health and safety is of questionable merit. See also 
    Whitney Benefits, Inc. v. United States, 18 Cl.Ct. 394 (1989), aff'd 
    926 F.2d 1169 (Fed. Cir. 1991), in which the court of appeals held 
    that, at least in the context of prohibiting surface coal mining 
    operations on alluvial valley floors, ``Congress was not in SMCRA 
    abating a `nuisance', within the meaning of Supreme Court and other 
    cases.'' Whitney Benefits at 926 F.2d 1177. However, as discussed above 
    and in the takings implication assessment, we believe that successful 
    takings claims under the good faith/all permits standard will be rare.
        Some commenters argued that adoption of any standard other than the 
    good faith/all permits standard would result in compensable takings of 
    surface owners' property rights to peaceful enjoyment of their 
    property. We know of no Federal case law supporting this argument. 
    However, because we are adopting the good faith/all permits standard, 
    which the commenters favored, there is no need to respond to this 
    comment.
        A few commenters warned that the takings implications of the good 
    faith/all permits standard may significantly disrupt State regulatory 
    programs because a single successful claim could devastate State 
    funding of these programs. The commenters stated that the threat of 
    large inverse condemnation awards would cause some States to relinquish 
    primacy, which, one commenter noted, would threaten ``the federalist 
    foundation of the Act.'' We find this possibility to be remote since 20 
    of the 24 approved State regulatory programs already include either an 
    all permits or a good faith/all permits standard, and have done so 
    since the date that we approved their programs under section 503 of the 
    Act.
        One State regulatory authority warned that the financial exposure 
    resulting from adoption of the good faith/all permits standard would 
    likely lead to States referring all VER determinations to us to avoid 
    any liability for compensable takings awards, which could easily 
    bankrupt a regulatory agency. However, there is no provision of the Act 
    that authorizes such referrals. Furthermore, we believe that referrals 
    are unlikely because 20 of the 24 approved State programs, including 
    the one for the State that the commenter represents, already include an 
    all permits or good faith/all permits standard for VER. If a State does 
    attempt to refer a VER determination to us, we will take whatever 
    measures are appropriate under sections 503 and 504 of SMCRA.
    4. Why Did We Reject the Takings Standard?
        For the reasons discussed in Part VII.C.2. of this preamble, we 
    believe that, of all the alternatives considered for the definition of 
    VER, the good faith/all permits standard best comports with the intent 
    of Congress in enacting section 522(e). For this and other reasons, we 
    did not propose to adopt a takings standard for VER. However, some 
    persons elected to comment on either this standard or the validity of 
    our reasons for failing to propose a takings standard. None of the 
    comments received on the proposed rule provides sufficient basis for 
    reconsideration of our preferred alternative.
        To the extent that they chose to comment on the possibility of a 
    takings standard, most commenters from every interest group expressed 
    opposition, just as they did when we formally proposed one in 1991. 
    Commenters provided various reasons for their opposition. Some 
    characterized the takings standard as unacceptably subjective or 
    unpredictable, with results that would vary widely from State to State 
    and perhaps within a State as well. Many expressed concern about the 
    potentially onerous information collection and analytical burdens that 
    this standard could place both on persons seeking a VER determination 
    and on the agency making the determination. Commenters noted that these 
    agencies are unlikely to have the resources needed to conduct a 
    comprehensive takings analysis. Other commenters argued that only the 
    courts have both the authority and the competence to determine whether 
    an agency action would result in a compensable taking. In addition, a 
    number of commenters opposed the takings standard because of their 
    belief that it would be far less protective of the lands listed in 
    section 522(e) than the good faith/all permits standard. Because we did 
    not propose a takings standard, we find it unnecessary to discuss the 
    merits of these arguments here.
        In the preamble to the 1997 proposed rule, we explained that one of 
    the reasons why we did not propose to adopt the takings standard is 
    that a takings standard would be relatively difficult to administer, 
    compared to the other alternatives. The few commenters who supported a 
    takings standard as either their first or second choice argued that 
    difficulty in administration is not a valid reason for not selecting an 
    otherwise viable rulemaking alternative. We disagree. Executive Order 
    12988, ``Civil Justice Reform,'' encourages the adoption of rules that 
    do not present or create administrative difficulties.
        And, in a 1985 opinion, the U.S. District Court for the District of 
    Columbia, while declining to rule on the merits of a takings standard, 
    cast doubt upon its administrative viability:
    
        The Secretary seems to assume, and this court expresses no 
    opinion on this issue, that Congress intended each and every VER 
    determination made by a state agency or OSM to coincide precisely 
    with what a judicial determination of a taking would be in that 
    given factual setting. But * * * only a court can decide whether a 
    taking has occurred. Thus, while at first blush, it would appear 
    that the broad constitutional takings test as promulgated by the 
    Secretary comports with Congress' wishes to avoid any takings, it is 
    not clear whether the broad test or one of the mechanical tests will 
    better carry out congressional intent.
    
    PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1563 (1985).
        One commenter stated that there is nothing in SMCRA or its 
    legislative history that suggests that VER under section 522(e) is 
    coextensive with the Takings Clause of the Fifth Amendment. As 
    discussed above and in Parts VII.C.2. and VII.C.3. of this preamble, we 
    agree.
        Other commenters who favored either the takings standard or the 
    ownership and authority standard noted that both we and the courts have 
    frequently stated or implied that a principal purpose of the VER 
    exception in section 522(e) is to avoid compensable takings. This 
    statement is true. However, the expressions of opinion in the court 
    decisions cited by the commenters are not binding, either because this 
    particular question was not at issue in the cases before the courts or 
    because the court declined to rule on the merits of the issue. 
    Furthermore, both our prior statements suggesting that Congress 
    included the VER exception in section 522(e) to avoid compensable 
    takings (see, for example, 44 FR 14992, March 13, 1979, col. 1) and 
    similar expressions of opinion in court decisions relied upon the 
    colloquy between Congressmen Udall and Roncalio concerning VER under 
    section 601 of the Act. See 123 Cong. Rec. H12878 (April 29, 1977).
    
    [[Page 70784]]
    
        We now believe that this colloquy has little if any relevance to 
    the meaning of VER under section 522(e). Section 601 relates only to 
    the mining of minerals and materials other than coal on Federal lands, 
    while section 522(e) relates to surface coal mining operations on both 
    Federal and non-Federal lands. Given this distinction and the 
    references in section 601 to withdrawal of public lands from mineral 
    entry or leasing, we believe that it is reasonable to conclude that the 
    VER provision in section 601 refers to rights under the General Mining 
    Law, the Mineral Leasing Act, and similar Federal statutes concerning 
    the management and disposition of Federal lands and minerals. As 
    discussed in Part VIII of this preamble, the concepts of VER under 
    other Federal statutes are not readily translatable to VER under 
    section 522(e).
        And, most importantly, under the canons of statutory construction, 
    the colloquy deserves little weight as a statement of congressional 
    intent. The quoted exchange is an extemporaneous discussion between two 
    legislators, reflecting their individual concerns and perceptions, and 
    it does not appear in any form in any congressional report. Thus, it 
    cannot be relied upon or accorded substantial weight as an expression 
    of congressional intent concerning VER under section 522(e). See PSMRL 
    I, 627 F.2d 1346, 1362 (D.C. Cir. 1980) reh. den. July 10, 1980, 
    quoting Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921), and 
    referencing 2A Sutherland, Statutory Construction, Sec. 48.13 (4th ed. 
    1973), which states that legislative debates ``are not a safe guide * * 
    * in ascertaining the meaning and purpose of the law-making body'' 
    because they are merely ``expressive of the views and motives of 
    individual members.''
        One commenter argued that a takings standard would be more 
    restrictive and environmentally protective than a good faith/all 
    permits standard in situations in which application of the prohibitions 
    would not constitute a compensable taking even though a good faith 
    effort to obtain all permits had been made. While this situation is 
    theoretically possible, the environmental impact statement for this 
    rulemaking predicts that, on balance, the good faith/all permits 
    standard would be more environmentally protective than a takings 
    standard.
    5. Why Did We Reject the Ownership and Authority Standard?
        Many commenters argued that the legislative history of SMCRA, in 
    combination with court decisions concerning section 522(e) of the Act 
    and its implementing regulations, compel the adoption of an ownership 
    and authority standard for VER as the only effective means of complying 
    with the expressed intent of Congress to preserve property rights and 
    avoid infringement on State property law. Commenters also noted that 
    the ownership and authority standard has some of the favorable 
    characteristics that we ascribed to the good faith/all permits 
    standard. In particular, they stated that the ownership and authority 
    standard is a bright-line standard, easy to understand and administer, 
    and more objective than the takings standard.
        We agree with the commenters that the ownership and authority 
    standard is a relatively bright-line standard, relatively easy to 
    understand and administer, and arguably more objective than the takings 
    standard. However, these characteristics are not the primary factors 
    that we considered in selecting the good faith/all permits standard. As 
    discussed in part VII.C.2. of this preamble, we believe that the good 
    faith/all permits standard best comports with the intent of Congress in 
    enacting section 522(e).
        While the legislative history of SMCRA could be construed in a 
    manner consistent with an ownership and authority standard for VER 
    under section 522(e), we do not concur with the commenters' assertions 
    that the legislative history and judicial remarks concerning that 
    history compel the adoption of an ownership and authority standard. 
    Indeed, one of the cases frequently cited, NWF v. Hodel, 839 F.2d 694 
    (1988), states: ``Neither the statutory language nor the legislative 
    history elaborate on the meaning of the phrase ``valid existing 
    rights'' (``VER'').'' Id. at 749.
        The legislative history of section 522(e) provides little clear or 
    dispositive guidance on the purpose or meaning of the VER exception 
    apart from the statement in both the Senate and House Committee reports 
    that the phrase ``subject to valid existing rights'' in section 522(e) 
    is intended to clarify that the prohibition on strip mining in the 
    national forests is subject to previous State court interpretations of 
    VER, such as the Polino decision in West Virginia. The congressional 
    reports further state that this phrase is ``in no way intended to open 
    up national forest lands to strip mining where previous legal 
    precedents have prohibited stripping.'' H. R. Rep. No. 95-218, at 95 
    (1977) and S. Rep. No. 95-128, at 94-95 (1977).
        Commenters interpreted these passages, in combination with the 
    separate views that Congressman Lujan attached to the House report, as 
    meaning that Congress intended an ownership and authority standard for 
    VER. In his statement of separate views, Congressman Lujan argued that:
    
        As the Committee Report indicates, this section's limitation 
    that the prohibition is ``subject to valid existing rights'' is not 
    intended to open up national forest lands to strip mining when 
    previous legal precedents have prohibited stripping. Naturally, the 
    bill's language is also subject to the corollary that it is not 
    intended to preclude mining where the owner of the mineral has the 
    legal right to extract the coal by surface mining method[s].
    
    H.R. Rep. No. 95-218, at 189 (1977).
        However, the interpretation that Congressman Lujan insists is a 
    corollary to the House committee report language appears only in his 
    statement of separate views. If a majority of the committee concurred 
    with his views, this corollary presumably would have appeared in the 
    committee report. Because the committee report does not endorse 
    Congressman Lujan's corollary, we are not persuaded that his 
    interpretation of the committee report and the bill's language is a 
    legitimate expression of the intent of Congress as a whole.
        In addition, the interpretation advanced by Congressman Lujan and 
    endorsed by the commenters likely would negate the section 522(e) 
    prohibitions in most situations except those involving unleased Federal 
    coal. This result would be inconsistent with the frequently expressed 
    desire of Congress to prevent new surface coal mining operations in the 
    areas listed in section 522(e), with certain exceptions. See, e.g., S. 
    Rep. No. 95-128, at 55 (1977).
        Therefore, we believe that the repeated legislative history 
    discussions of the Polino case and property rights on national forest 
    lands are best read as expressing Congress' intent that the VER clause 
    not be construed in a manner that would ignore limitations under State 
    property law. We believe that our reading receives support from the 
    statement in the committee reports that the VER clause in section 
    522(e) is ``in no way intended to open up national forest lands to 
    strip mining where previous legal precedents have prohibited 
    stripping.'' H.R. Rep. No. 95-218, at 95 (1977) and S. Rep. No. 95-128, 
    at 94-95 (1977). And, regardless of which reading is correct, there is 
    no clear indication that Congress intended these discussions to apply 
    to lands other than the ones listed in section 522(e)(2) (Federal lands 
    in national forests). See, e.g., 5 J. Min. L. & Pol'y 585, 591, 592, 
    596 (1990).
    
    [[Page 70785]]
    
        Some commenters cited a colloquy between Congressmen Delbert Latta 
    and Morris Udall during floor debate on the 1975 version of SMCRA as 
    supporting an ownership and authority standard for VER under section 
    522(e). In this colloquy, Congressman Latta asked ``whether this 
    legislation affects in any way the rights of an owner of mineral rights 
    situated below land owned by the Federal Government.'' 121 Cong. Rec. H 
    6679 (March 14, 1975). After a lengthy discussion, the colloquy 
    concludes with the following exchange:
    
        Mr. LATTA. * * * [I]f I understood what you said, this bill does 
    not deal with the situation propounded in my question, meaning where 
    a private citizen has sold the surface to the Federal Government and 
    has retained the mineral rights. This bill would not in any way 
    affect the mineral rights of that private citizen?
        Mr. UDALL. This is a bill that deals with how one mines coal in 
    that situation and every other situation, but we do not attempt to 
    change property rights in the situation the gentleman talks about 
    and thus the mineral rights are not affected.
    
    121 Cong. Rec. H 6679 (1975).
    
        Although this colloquy does not specifically mention section 522(e) 
    or VER, some commenters interpret Congressman Udall's concluding 
    response as equating property rights under State law with VER under 
    section 522(e). However, we believe that his response is better read as 
    expressing the congressman's opinion that those provisions of SMCRA 
    that govern how and where one may mine coal do not change mineral or 
    other property rights. In any event, as discussed in part VII.C.4. of 
    this preamble, legislative debates cannot be relied upon or accorded 
    substantial weight as an expression of congressional intent. See PSMRL 
    I, 627 F.2d 1346, 1362 (D.C. Cir. 1980) reh. den. July 10, 1980.
        Furthermore, in 1975, the House rejected an amendment that would 
    have replaced the phrase ``subject to valid existing rights'' in 
    section 522(e) with a provision allowing surface coal mining operations 
    on Federal lands in national forests and grasslands whenever the deeds 
    conveying lands to the United States reserved the coal and specifically 
    provided for the use of surface mining methods. 121 Cong. Rec. H 7048-
    50 (March 18, 1975). We find the House's rejection of an amendment 
    providing an express ownership and authority standard for VER on 
    Federal lands in national forests to be strongly suggestive of 
    congressional intent. That is, we believe that this rejection suggests 
    that Congress did not intend an ownership and authority standard for 
    VER.
        Except for lands with unleased Federal coal, an ownership and 
    authority standard would offer no significant protection to section 
    522(e) lands beyond that independently afforded by the right-of-entry 
    provisions of SMCRA's permitting requirements. Those permitting 
    requirements apply to all surface coal mining operations on all lands. 
    We find it unlikely that Congress intended the VER exception to be so 
    broad that the prohibitions and restrictions of section 522(e) would 
    afford only marginal and duplicative protection to most lands listed in 
    that section. See the statements emphasizing the importance of 
    protecting these lands in S. Rep. No. 95-128, at 54-55 and 94 (1977).
        Industry argues that the ownership and authority standard would 
    still give meaning to the prohibitions of section 522(e) because it 
    would prohibit surface coal mining operations on those lands in section 
    522(e) for which the Federal Government owns the mineral interests. We 
    do not agree with the commenters' argument. Federal coal leases in 
    existence at the time that land comes under the protection of section 
    522(e) and 30 CFR 761.11 might convey sufficient property rights to 
    satisfy an ownership and authority standard. Furthermore, we do not 
    believe that Congress intended to restrict the prohibitions in this 
    fashion. If it did, Congress could have achieved this result in a far 
    more straightforward manner by prohibiting any future leases of Federal 
    coal interests for the lands listed in section 522(e). In fact, 
    Congress did just that with respect to Federal lands designated as 
    unsuitable for all or certain types of surface coal mining operations 
    pursuant to section 522(b) of the Act. In addition, if this were 
    Congress' sole intent in creating section 522(e), Congress would have 
    had little reason to enact the prohibitions of paragraphs (e)(3) 
    through (e)(5) of that section, since these paragraphs apply primarily 
    to non-Federal lands.
        Commenters favoring the ownership and authority standard and 
    opposing the good faith/all permits standard cite various Federal court 
    decisions involving the application of SMCRA requirements as supporting 
    their position. These cases include Meridian Land & Mineral Co. v. 
    Hodel, 843 F.2d 340, 346 (9th Cir. 1988); Ainsley v. U.S., 8 Cl.Ct. 
    394, 401 (1985); Otter Creek Coal Co. v. U.S., 231 Ct. Cl. 878, 880 
    (1982); Sunday Creek Coal Co. v. Hodel, C.A. No. C-2-88-0416 (S.D. Ohio 
    June 2, 1988); and Belville Mining Co. v. U.S., 763 F. Supp. 1411, 1420 
    (S.D. Ohio 1991) and 999 F.2d 989, 992 (6th Cir. 1993) (``Belville 
    II''). However, apart from Sunday Creek, which lacks precedential 
    effect outside the Southern District of Ohio, these cases do not 
    involve a challenge to the validity of the good faith/all permits 
    standard for VER. Indeed, except for Belville II and Sunday Creek, the 
    decisions do not even involve VER determinations. Therefore, to the 
    extent that the judicial opinions cited by the commenters theorize on 
    the meaning of VER under section 522(e), those statements of theory are 
    properly regarded as dicta because that question was not properly 
    before the court in any of these cases.
        Furthermore, the theoretical discussions in these opinions 
    generally center on the colloquy between Congressmen Udall and Roncalio 
    concerning VER under section 601 of the Act. See 123 Cong. Rec. H 12878 
    (1977) (April 29, 1977). We believe that the colloquy, which does not 
    concern surface coal mining operations or section 522(e), has little 
    relevance to the meaning of VER under section 522(e). As discussed in 
    part VII.C.4. of this preamble, it cannot be relied upon or accorded 
    substantial weight as an expression of congressional intent concerning 
    VER under section 522(e). See PSMRL I, 627 F.2d 1346, 1362 (D.C. Cir. 
    1980) reh. den. July 10, 1980 (citations omitted).
        In Belville II, the courts did not consider any regulatory 
    definition of VER in determining whether Belville had the right to 
    conduct surface coal mining operations on Federal lands within the 
    Wayne National Forest. Instead, they proceeded directly to an 
    examination of property rights under State law, finding that Belville 
    had VER under SMCRA whenever it had authority under State property law 
    to conduct surface coal mining operations. However, these decisions 
    lack precedential effect outside the Sixth Circuit.
        For the reasons discussed above and in other portions of Part 
    VII.C. of this preamble, we decline to adopt the rationale advanced in 
    the Belville II decisions. We believe that the legislative history of 
    SMCRA either supports or is not demonstrably inconsistent with adoption 
    of a good faith/all permits standard for VER. In addition, we believe 
    that the good faith/all permits standard is the most reasonable policy 
    choice for a VER standard consistent with the purposes of section 
    522(e) as discussed in part VII.C.2. of this preamble.
        Commenters also point to the decision of the U.S. Court of Appeals 
    for the Federal Circuit upholding the portion of the 1983 VER 
    definition that extended VER to existing operations on lands that
    
    [[Page 70786]]
    
    come under the protection of section 522(e) after August 3, 1977. In 
    its opinion, the court stated that:
    
        The legislative history, however, is of some help. Although it 
    does not answer the specific question before us, it does suggest 
    that Congress did not intend to infringe on valid property rights or 
    effect takings through section 522(e).
    
    NWF v. Hodel, 839 F.2d at 750 (1988) (footnote omitted).
    
        However, the court did not identify any element of the Act's 
    legislative history that supports this conclusion. And its opinion also 
    states: ``Neither the statutory language nor the legislative history 
    elaborate on the meaning of the phrase `valid existing rights' 
    (``VER'').'' Id. at 749. Finally, we note that the entire VER 
    definition was not before the court--only the issue of VER for 
    operations in existence on lands coming under the protection of the Act 
    after August 3, 1977. Therefore, we cannot agree with the commenters 
    that the court's decision provides clear guidance concerning the 
    meaning of VER under section 522(e).
    
    D. Paragraph (b)(2): ``Needed for and Adjacent'' Standard.
    
    1. What Is the History of This Standard
        The needed for and adjacent standard first appears in the 
    definition of VER promulgated on March 13, 1979 (44 FR 14902, 15342); 
    we did not include it in the 1978 proposed rule that preceded the 1979 
    final rule. The 1979 definition provided that a permit applicant with a 
    property right to produce coal by surface coal mining operations as of 
    August 3, 1977, possessed VER if the coal was both needed for and 
    immediately adjacent to an ongoing surface coal mining operation for 
    which all permits were obtained prior to August 3, 1977. The preamble 
    provides the following explanation of the basis for this standard:
    
        In analyzing the value of the property, the courts have 
    distinguished an owner's value in an ongoing operation which must be 
    halted, as compared with value that an owner has paid for some 
    future operation that will be restricted. The taking cases reflect 
    less sympathy for property owners who are denied some future 
    opportunity to exploit their property interests based on prior 
    beliefs that the property would be available for development; but 
    most courts express concern over government interference with an 
    ongoing operation which causes a 100 percent diminution in value 
    unless it is a harmful use and falls within the noxious use 
    category. This distinction suggests that VER could be defined 
    differently for owners of coal which is essential to continue an 
    ongoing mine, as compared to property rights in coal for a potential 
    new mine.
    44 FR 14992, March 13, 1979, col. 2.
    
        The National Wildlife Federation challenged this standard as unduly 
    expanding the scope of the VER exception beyond that intended by 
    Congress. However, the court upheld the standard, finding it to be ``a 
    rational method of allowing mining when denial would gravely diminish 
    the value of the entire mining operation, thereby constituting a taking 
    under Supreme Court declarations.'' PSMRL I, Round I, 14 Env't Rep. 
    Cas. (BNA) at 1091-92 (1980).
        On September 14, 1983 (48 FR 41312, 41349), we promulgated a 
    revised definition of VER that modified the needed for and adjacent 
    standard by deleting the requirement for a demonstration that the 
    property right to remove the coal by surface coal mining operations 
    existed as of August 3, 1977 (although our response to a comment 
    concerning this issue at 48 FR 41316 suggests that the deletion may 
    have been unintentional). In that rulemaking, we also defined ``needed 
    for'' as meaning that the extension of mining to the coal in question 
    is essential to make the surface coal mining operation as a whole 
    economically viable.
        The National Wildlife Federation challenged these changes as being 
    both procedurally and substantively improper. The U.S. District Court 
    for the District of Columbia agreed in part, finding that we had failed 
    to comply with the Administrative Procedure Act (5 U.S.C. 553) by not 
    affording the public adequate notice and opportunity for comment on 
    these two changes. The court did not rule on the merits of the revised 
    standard. See PSMRL II, Round III-VER, 22 Env't Rep. Cas. (BNA) at 
    1566-67.
        On November 20, 1986 (51 FR 41952, 41961), we suspended paragraph 
    (c) of the 1983 definition of VER. In the preamble to the suspension 
    notice, we stated that, pending adoption of a new rule, we would rely 
    upon the approved State program definition in primacy States. In non-
    primacy States, the suspension had the effect of restoring the 1979 
    version of the needed for and adjacent standard, which did not contain 
    a definition of ``needed for.'' See 51 FR 41954-55, November 20, 1986.
        On July 18, 1991 (56 FR 33152, 33164), we proposed to revise the 
    1983 definition by reinstating the property rights demonstration 
    requirement and by removing the sentence defining the ``needed for'' 
    component of the standard. In the preamble to that proposed rule, we 
    stated that the explanation of ``needed for'' in the 1983 definition 
    did not substantively clarify the meaning or application of the needed 
    for and adjacent standard. In addition, we proposed to replace the 
    requirement that both the operation and the property rights to expand 
    the operation onto adjacent lands have been in existence on August 3, 
    1977, with a requirement that both have been in existence on the date 
    that the land for which the exception is sought came under the 
    protection of 30 CFR 761.11 and section 522(e) of the Act. The latter 
    change reflects the concept embodied in paragraph (d)(1) of the former 
    (1983) definition, which was upheld in NWF v. Hodel, 839 F.2d at 750 
    (1988).
    2. How Did We Propose To Revise This Standard in 1997?
        On January 31, 1997 (62 FR 4836, 4860), we proposed a needed for 
    and adjacent standard similar to the one proposed in 1991, with a few 
    modifications. In addition to the changes in the property rights 
    demonstration component (see Part VII.B. of this preamble), the 1997 
    proposed rule specified that the standard would apply to land, not just 
    coal, needed for an existing operation. Under State law, a permittee or 
    operator may have legitimate property interests in land apart from the 
    coal itself. Land may be essential to the operation for reasons other 
    than the coal it contains. For example, an operator has little leeway 
    in the location of ventilation shafts for underground mines. Part 
    VII.B. of this preamble contains a more extensive discussion of this 
    issue.
        The definition proposed in 1997 also attempted to eliminate any 
    ambiguity caused by use of the term ``ongoing surface coal mining 
    operation'' in the 1979 and 1983 rules. In 1991, we essentially 
    proposed to replace ``ongoing'' with ``existing.'' However, comments 
    received on that proposal indicated some uncertainty as to whether 
    ``ongoing'' or ``existing'' included operations that are fully approved 
    but inactive or unstarted. Accordingly, in 1997, we proposed to define 
    this standard to include land needed for and adjacent to surface coal 
    mining operations for which all permits had been obtained, or a good 
    faith effort to obtain such permits had been made, before the land came 
    under the protection of 30 CFR 761.11 and section 522(e) of the Act. 
    The preamble to the proposed rule explained that we could find no 
    rational basis for differentiating between active operations and those 
    that are approved but inactive or unstarted. Both categories of 
    operations engender the same type of investment-backed expectations. 
    Both involve situations in which the permittee has
    
    [[Page 70787]]
    
    made significant resource outlays in an effort to realize those 
    expectations.
    3. How Does the Standard in the Final Rule Differ From the One That We 
    Proposed in 1997?
        After evaluating the comments received, we are adopting the needed 
    for and adjacent standard as proposed in 1997, with several substantive 
    and editorial changes. To establish VER under the needed for and 
    adjacent standard in paragraph (b)(2) of the definition of VER in the 
    final rule, a person must (1) make the property rights demonstration 
    required by paragraph (a) of the definition, and (2) document that the 
    land is both needed for and immediately adjacent to a surface coal 
    mining operation for which all permits and other authorizations 
    required to conduct surface coal mining operations had been obtained, 
    or a good faith effort to obtain all necessary permits and 
    authorizations had been made, before the land came under the protection 
    of 30 CFR 761.11 and section 522(e) of the Act.
        In addition, we are adding the following language to the rule in 
    response to comments:
    
        To meet this standard, a person must demonstrate that 
    prohibiting expansion of the operation onto that land would unfairly 
    impact the viability of the operation as originally planned before 
    the land came under the protection of Sec. 761.11 or 30 U.S.C. 
    1272(e). Except for operations in existence before August 3, 1977, 
    or for which a good faith effort to obtain all necessary permits had 
    been made before August 3, 1977, this standard does not apply to 
    lands already under the protection of Sec. 761.11 or 30 U.S.C. 
    1272(e) when the regulatory authority approved the permit for the 
    original operation or when the good faith effort to obtain all 
    necessary permits for the original operation was made.
        In evaluating whether a person meets this standard, the agency 
    making the determination may consider factors such as:
        (i) The extent to which coal supply contracts or other legal and 
    business commitments that predate the time that the land came under 
    the protection of Sec. 761.11 depend upon use of that land for 
    surface coal mining operations.
        (ii) The extent to which plans used to obtain financing for the 
    operation before the land came under the protection of Sec. 761.11 
    rely upon use of that land for surface coal mining operations.
        (iii) The extent to which investments in the operation before 
    the land came under the protection of Sec. 761.11 rely upon use of 
    that land for surface coal mining operations.
        (iv) Whether the land lies within the area identified on the 
    life-of-mine map submitted under Sec. 779.24(c) or Sec. 783.24(c) of 
    this chapter before the land came under the protection of 
    Sec. 761.11.
    
        As stated in the preamble to the proposed rule, abandoned sites and 
    sites with expired or revoked permits, including permits that have 
    expired under section 506(c) of SMCRA, do not qualify as operations 
    that could form the basis for a VER determination under the needed for 
    and adjacent standard. Nor do long-inactive facilities for which no 
    permit was required before SMCRA and which would have to be 
    substantially or completely reconstructed before usage could resume. 
    Allowing defunct operations such as those listed above to qualify as 
    existing or authorized operations would contradict the plain meaning of 
    that term and would be inconsistent with the congressional intent to 
    prohibit, with certain exceptions, new surface coal mining operations 
    on the lands identified in section 522(e). See, for example, S. Rep. 
    No. 95-128, at 55 (1977).
    4. What Comments Did We Receive on the Proposed Standard and How Did We 
    Dispose of Them?
        Some commenters opposed reinstatement of any type of requirement 
    for a property rights demonstration as part of the needed for and 
    adjacent standard, arguing that Congress intended the exception for 
    existing operations in section 522(e) to apply to all lands needed by 
    existing surface coal mining operations, regardless of whether those 
    operations had the legal right to mine those lands when the land came 
    under the protection of section 522(e). We have revised the definition 
    in the final rule in a manner that will allow the needed for and 
    adjacent standard to be met even if the operation for which the land is 
    needed and to which it is adjacent does not yet own the requisite 
    property rights for the land. However, in that situation, the property 
    right to conduct the type of surface coal mining operations intended 
    must exist at the time that the land comes under the protection of 30 
    CFR 761.11 or section 522(e), and the property rights demonstration 
    required by paragraph (a) of the definition must be made as part of the 
    request for a VER determination.
        One commenter expressed concern that the proposed rule did not 
    explicitly address ``the misconception that the land for which VER is 
    claimed must be `immediately adjacent' to an area covered by a permit 
    issued or applied for before the enactment of SMCRA.'' The commenter 
    noted that many large mining operations include sufficient reserves to 
    operate for 20 to 50 years, even though, at least in pre-SMCRA times, 
    most did not seek a permit for these lands that far in advance of 
    mining. Because of the investments in reserves, land, equipment, and 
    long-term coal supply contracts made on the assumption that these 
    reserves would be available for surface coal mining operations, the 
    commenter argued that all such lands should be considered part of, or 
    at least needed for, the surface coal mining operation in existence at 
    the time that the land came under the protection of 30 CFR 761.11 and 
    section 522(e).
        As the commenter implicitly acknowledges, section 506(b) of SMCRA 
    authorizes the issuance of a permit with a term in excess of 5 years 
    when the applicant demonstrates a need for the longer term to obtain 
    necessary financing. Even if the applicant does not qualify for a 
    ``life-of-mine'' permit term, nothing in SMCRA prohibits a company from 
    seeking a permit with a normal term for the entire area upon which it 
    plans to conduct operations for the life of the mine. Section 506(d) of 
    the Act provides that any valid permit has the right of successive 
    renewal upon expiration for lands within the permit area at that time. 
    Once a valid permit exists for an area, that area becomes part of an 
    existing operation and thus qualifies for the exception for existing 
    operations under 30 CFR 761.12. Therefore, we do not believe that the 
    commenter's concerns are valid with respect to post-SMCRA operations, 
    because the operator or permittee can avoid these problems with proper 
    planning.
        However, we recognize the possibility that operations that started 
    before SMCRA may have a legitimate concern. Therefore, we have added 
    language to the definition to clarify that, in evaluating whether a 
    person meets the needed for and adjacent standard, the agency making 
    the determination may consider factors such as:
         The extent to which coal supply contracts or other legal 
    and business commitments that predate the time that the land came under 
    the protection of section 522(e) or 30 CFR 761.11 depend upon use of 
    that land for surface coal mining operations.
         The extent to which plans used to obtain financing for the 
    operation before the land came under the protection of section 522(e) 
    or 30 CFR 761.11 rely upon use of that land for surface coal mining 
    operations.
         The extent to which investments in the operation before 
    the land came under the protection of section 522(e) or 30 CFR 761.11 
    rely upon use of that land for surface coal mining operations.
        We believe that these provisions will adequately protect the 
    interests of companies that acquired contiguous
    
    [[Page 70788]]
    
    reserves for a pre-SMCRA operation with the expectation of being able 
    to obtain permits for those reserves in a sequential fashion.
        One commenter also urged deletion of the ``immediately adjacent'' 
    portion of the standard since, to meet market specifications, companies 
    may need coal of a different quality for an operation if the coal 
    immediately adjacent to the existing operation does not satisfy a 
    customer's demands. We do not agree that changing market conditions 
    provide a basis for VER under the needed for and adjacent standard. 
    This situation represents the normal risks of the marketplace--and we 
    do not believe that failure to anticipate changing market conditions 
    entitles an operation to protection from the prohibitions of 30 CFR 
    761.11 and section 522(e).
        However, there may be situations in which the company has included 
    the coal in its mining plans but, for legitimate reasons, has been 
    unable to obtain a permit for that area before the land came under the 
    protection of section 522(e) and 30 CFR 761.11 despite efforts to do 
    so. Therefore, we have revised the definition to include language that 
    would allow the agency making the determination to consider lands 
    within the area identified on the life-of-mine map submitted under 30 
    CFR 779.24(c) or 783.24(c) before the land came under the protection of 
    30 CFR 761.11 and section 522(e) to be adjacent to the original 
    operation on a case-by-case basis. By adding this language, we do not 
    intend to imply that all lands within the area identified on the life-
    of-mine map automatically qualify for the VER exception under the 
    needed for and adjacent standard. The agency responsible for the VER 
    determination must evaluate each situation on its merits and determine 
    whether the request meets all requirements of the needed for and 
    adjacent standard, including a demonstration that prohibiting expansion 
    of the operation onto those lands would unfairly impact the viability 
    of the operation as originally planned before the land came under the 
    protection of Sec. 761.11 or 30 U.S.C. 1272(e).
        In addition, there is some flexibility in the term ``adjacent,'' 
    which ``Black's Law Dictionary'' defines as:
    
        Lying near or close to; sometimes, contiguous; neighboring. 
    Adjacent implies that the two objects are not widely separated; 
    though they may not actually touch, * * * while adjoining imports 
    that they are so joined or united to each other that no third object 
    intervenes.
    
        Certainly, an intervening road, pipeline, stream, or power line 
    would not preclude land from being considered immediately adjacent to 
    an existing operation's permit boundaries. Beyond that point, 
    application of the needed for and adjacent standard is of necessity a 
    judgment call, best decided on a documented, case-by-case basis by the 
    agency responsible for the VER determination. In making this 
    determination, the agency must consider both the ``needed for'' and 
    ``immediately adjacent to'' components of the standard. That is, a 
    determination that the land is immediately adjacent to an existing 
    operation, or an operation for which a good faith effort has been made 
    to obtain all necessary permits, is not sufficient to find that the 
    operation may proceed onto those lands under the VER exception. As 
    stated in the final rule, the agency also must find that prohibiting 
    expansion of the operation onto those lands would unfairly impact the 
    viability of the operation as originally planned before the land came 
    under the protection of 30 CFR 761.11 or section 522(e).
        Several commenters argued that the scope of the needed for and 
    adjacent standard should be coextensive with that of the prime farmland 
    grandfather exemption in section 510(d)(2) of the Act. According to one 
    commenter, if an area has been determined to be part of an existing 
    surface coal mining operation for purposes of the prime farmland 
    grandfather exemption, then that area must qualify for the VER 
    exception under the needed for and adjacent standard. We do not agree. 
    The needed for and adjacent standard is part of the VER exception in 
    section 522(e), not the exception for existing operations. Furthermore, 
    the needed for and adjacent standard is created by rule, not by 
    statute. Therefore, the argument that Congress must have intended 
    similar terms to have similar meanings is not applicable, as Congress 
    did not devise the needed for and adjacent standard.
        Some commenters asserted that because the needed for and adjacent 
    standard requires the existence of an operation for which all permits 
    have been obtained or a good faith effort to obtain all permits has 
    been made, this standard should be a component of the exception for 
    existing operations rather than the definition of VER. We disagree. 
    Section 522(e) does not define either VER or the exception for existing 
    operations, apart from describing the latter exception as including 
    ``surface coal mining operations which exist on the date of enactment 
    of this Act.'' Therefore, we have considerable latitude in developing a 
    final rule to implement these provisions of the Act. We believe that 
    the final rule is a reasonable interpretation of both the VER exception 
    and the exception for existing operations.
        In developing the 1997 proposed rule and this final rule, we 
    endeavored, for practical reasons, to limit the exception for existing 
    operations to those situations in which the operator has full 
    authorization to conduct surface coal mining operations on the lands in 
    question before those lands came under the protection of section 522(e) 
    and 30 CFR 761.11. In other words, the exception for existing 
    operations applies in those circumstances in which the regulatory 
    authority does not need to take any additional action before the 
    operator may continue or commence surface coal mining operations on the 
    newly protected lands. In contrast, a person planning to conduct 
    surface coal mining operations under the VER exception in the final 
    rule must (1) demonstrate the existence of VER, and (2) obtain a permit 
    from the regulatory authority before initiating surface coal mining 
    operations on protected lands. There is some overlap between the two 
    exceptions in that persons who have obtained all necessary permits and 
    authorizations to operate before the land comes under the protection of 
    30 CFR 761.11 and section 522(e) may either request a VER determination 
    or avail themselves of the exception for existing operations.
        Some commenters argued that the needed for and adjacent standard 
    functioned purely as a transitional device between pre-SMCRA and post-
    SMCRA regulatory schemes. Since that transition is now complete, 
    commenters assert that the standard is obsolete and should be removed 
    or at least limited to surface coal mining operations in existence on 
    August 3, 1977, the date of enactment of SMCRA. According to the 
    commenters, the Constitution provides no protection to speculative 
    investments. In addition, the commenters argue that the passage of 
    SMCRA placed all parties on notice that surface coal mining operations 
    in certain areas would be prohibited in the future, and that operators 
    therefore should have planned their operations and acquired property 
    and mining rights with a view to the existence of those prohibitions. 
    In other words, the commenters assert that there is no longer any basis 
    for anyone to have a reasonable expectation that properties outside the 
    boundary of a mining permit could be incorporated into the permit area 
    or mining plan.
    
    [[Page 70789]]
    
        As discussed earlier in this section of the preamble, the Act's 
    provisions allowing life-of-mine permit terms and granting a right of 
    successive renewal to permits with normal terms should minimize the 
    need for the needed for and adjacent standard for mines that begin 
    operations after August 3, 1977. However, we do not agree that this 
    standard has no post-transitional value. Nor do we agree that the 
    standard should be limited to operations in existence on August 3, 
    1977. The commenters' argument that the needed for and adjacent 
    standard is purely a transitional device for persons who did not 
    anticipate the enactment of SMCRA is true only if one assumes that no 
    one would have a reasonable expectation of being able to conduct 
    surface coal mining operations under the VER exception in section 
    522(e).
        Since SMCRA does not define VER, this assumption is not necessarily 
    correct. In particular, we do not agree with the commenters that, after 
    the enactment of SMCRA, a person had a reasonable expectation of 
    conducting surface coal mining operations on the lands listed in 
    section 522(e) only if those lands were already under permit on August 
    3, 1977. The history of our attempts to define VER by regulation 
    provides some basis for persons to anticipate that the VER exception 
    sweeps more broadly than the good faith/all permits standard. And in 
    1983, we adopted a standard for ``continually created VER,'' which 
    provided for the determination of VER on the basis of rights and 
    documents in existence as of the date that the land came under the 
    protection of section 522(e) and 30 CFR 761.11 rather than as of August 
    3, 1977. The courts subsequently recognized this approach as valid. See 
    PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1564 (1985), and 
    NWF v. Hodel, 839 F.2d at 749-751 (1988). Adoption and judicial 
    affirmation of this standard created the expectation that the VER 
    exception would not be limited to lands under permit on August 3, 1977, 
    or to operations in existence on that date. Similarly, our approval of 
    a takings standard for VER as part of the West Virginia program in 1983 
    and as part of the Illinois program in 1989 may have created the 
    expectation, at least in those States, that the VER exception is not 
    limited to the good faith/all permits standard and that a person may 
    have the right to conduct surface coal mining operations in protected 
    areas even if an operation was not in existence on August 3, 1977.
        Therefore, the final rule retains the needed for and adjacent 
    standard and, as proposed, it extends that standard to lands needed for 
    and immediately adjacent to surface coal mining operations in existence 
    when those lands came under the protection of section 522(e) after 
    August 3, 1977. Extension of the standard to these lands is a fair 
    means of addressing the expectations discussed above. In addition, it 
    is consistent with the purpose of the continually created VER standard 
    that we adopted in 1983.
        Some commenters challenged our extension of this standard to lands 
    needed for and immediately adjacent to operations for which a good 
    faith attempt had been made to obtain all necessary permits. They 
    argued that the standard should apply only to operations that had 
    already received all necessary permits since only those operations 
    could legitimately be considered existing operations. We do not agree. 
    The scope of the VER exception is not restricted by the scope of the 
    exception for existing operations in 30 CFR 761.12. We believe that the 
    needed for and adjacent standard should apply to lands needed for and 
    immediately adjacent to an operation for which a good faith attempt has 
    been made to obtain all necessary permits since there is no question 
    that such an operation has VER under paragraph (b)(1) of the definition 
    of VER in the final rule. Accordingly, we believe that inclusion of a 
    good faith component in the needed for and adjacent standard is 
    appropriate because it provides fair treatment of reasonable 
    expectations while avoiding significant impairment of the prohibitions 
    of section 522(e).
        In the preamble to the proposed rule, we stated that, to avoid 
    subverting the congressional prohibitions in section 522(e), we 
    believed that VER determinations under the needed for and adjacent 
    standard must be based on an analysis of how denial of the claim would 
    affect the value, as of the date that the land came under the 
    protection of 30 CFR 761.11 and section 522(e), of the operation as a 
    whole from the time it began operation, not merely whether the 
    additional land or coal would prolong the operation's life or provide 
    increased profits. Otherwise, we stated, this standard could be used to 
    justify unlimited expansion of operations adjoining protected areas, 
    which could effectively nullify the prohibition. We suggested that this 
    approach receives implied support in PSMRL I, Round I, 14 Env't Rep. 
    Cas. (BNA) at 1091-92 (1980), in which the court upheld the needed for 
    and adjacent standard as a reasonable means of avoiding compensable 
    takings:
    
        The need and adjacent [sic] component of the Secretary's 
    definition is consonant with Supreme Court declarations regarding 
    taking of property. This test allows the grant of a valid existing 
    right exemption when extension of mining to an adjacent area is 
    necessary to maintain, as a whole, the value of the mining 
    operation. Stated otherwise, the need and adjacent test requires a 
    valid existing right exemption when denial of mining on the adjacent 
    area will rob the mining operation, as a whole, of its value. See 
    Penn Central, supra, 438 U.S. 130 at 130-31; Goldblatt v. Hempstead, 
    369 U.S. 590, 8 L. Ed. 2d 130, 82 S. Ct. 987 (1962). The need and 
    adjacent test is thus a rational method of allowing mining when 
    denial would gravely diminish the value of the entire mining 
    operation, thereby constituting a taking under Supreme Court 
    declarations.
    
        In the preamble to the proposed rule, we requested comment on 
    whether the rule language should be revised to explicitly incorporate 
    this interpretation. Most commenters did not respond to this request. 
    Of those who did, some favored codification of our preamble 
    interpretation as a welcome limit on the scope of the exception. Others 
    opposed this interpretation as too restrictive, too burdensome, and 
    inconsistent with our arguments in favor of the good faith/all permits 
    standard and against the takings standard. One commenter stated that it 
    is disingenuous for us to argue, on the one hand, that Congress did not 
    intend to define the VER exception in terms of avoiding compensable 
    takings, and then to propose to define or interpret the needed for and 
    adjacent standard in a manner that resembles a takings standard.
        One commenter asserted that the interpretation in the preamble to 
    the proposed rule ignores the court's direction in PSMRL I, Round I, 14 
    Env't Rep. Cas. (BNA) at 1091-92 (1980), and is impermissibly 
    ambiguous. According to this commenter, the only legal interpretation 
    is the ``gravely diminish'' standard that the court cited in the 
    decision quoted above. We disagree. The court's reasoning does not 
    require or suggest that we apply a takings analysis in determining 
    whether a VER claim meets the needed for component of the needed for 
    and adjacent standard. The court merely found that the 1979 needed for 
    and adjacent standard was consistent with existing takings 
    jurisprudence.
        After evaluating all comments received, we have decided not to 
    codify or otherwise adopt the interpretation of ``needed for'' that we 
    set forth in the preamble to the proposed rule. We believe that this 
    determination is best made on a case-by-case basis by the agency 
    responsible for the VER
    
    [[Page 70790]]
    
    determination, relying upon all available information. However, in 
    response to those commenters who expressed concern that the lack of a 
    definition of ``needed for'' would lead to abuse, we have revised the 
    rule to specify that the requester must demonstrate that prohibiting 
    expansion of an operation onto the land in question would unfairly 
    impact the viability of the operation as originally planned before the 
    land came under the protection of 30 CFR 761.11 or section 522(e). We 
    also added a list of examples of the type of factors that the agency 
    should consider in evaluating whether the land is needed for and 
    immediately adjacent to the existing operation. This list is not 
    exhaustive and it does not exclude consideration of other appropriate 
    factors.
        Finally, in response to comments that the needed for and adjacent 
    standard was too broad, we have added a sentence to the definition to 
    clarify that, except for operations in existence before August 3, 1977, 
    or for which a good faith effort to obtain all necessary permits had 
    been made before August 3, 1977, this standard does not apply to lands 
    already under the protection of 30 CFR 761.11 and section 522(e) when 
    the regulatory authority approved the permit for the original operation 
    or when the good faith effort to obtain all necessary permits for the 
    original operation was made. We believe that this clarification is 
    appropriate because the operator or permittee would have no reasonable 
    expectation of being able to conduct surface coal mining operations on 
    those lands.
    
    E. Paragraph (c): VER Standards for Roads
    
        Paragraph (c) of the definition of VER in the final rule provides 
    that a person has VER for the use or construction of a road included 
    within the definition of ``surface coal mining operations'' in 30 CFR 
    700.5 and section 701(28) of the Act if one or more of the following 
    circumstances listed in paragraphs (c)(1) through (c)(4) of the 
    definition exist:
         The road existed when the land upon which it is located 
    came under the protection of 30 CFR 761.11 or section 522(e), and the 
    person has a legal right to use the road for surface coal mining 
    operations.
         A properly recorded right of way or easement for a road in 
    that location existed when the land came under the protection of 30 CFR 
    761.11 or section 522(e), and, under the document creating the right of 
    way or easement, and under subsequent conveyances, the person has a 
    legal right to use or construct a road across the right of way or 
    easement for surface coal mining operations.
         A valid permit for use or construction of a road in that 
    location for surface coal mining operations existed when the land came 
    under the protection of 30 CFR 761.11 or section 522(e).
         A person has VER under paragraphs (a) and (b) of the 
    definition of VER.
        With the exception of the modifications discussed below, the first 
    three standards resemble those in both the proposed rule and the 
    previous (1983) definition.
        The last standard, which we have added as proposed, reflects the 
    fact that the definition of surface coal mining operations in section 
    701(28) of the Act and 30 CFR 700.5 includes ``all lands affected by 
    the construction of new roads or the improvement or use of existing 
    roads to gain access to the site of such activities and for haulage.'' 
    Therefore, if a person demonstrates VER for surface coal mining 
    operations in general under the standards in paragraphs (a) and (b) of 
    the definition, there is no reason why that person should have to 
    separately demonstrate VER to use or construct roads on that land, 
    since those roads are part of the operations for which he or she has 
    already demonstrated VER. The standards in paragraphs (a) and (b) are 
    of equal or greater rigor when compared with those in paragraphs (c)(1) 
    through (c)(3). Accordingly, we have added paragraph (c)(4) to the 
    definition to clarify that a person has the option of using the 
    criteria and standards in paragraphs (a) and (b) of the definition to 
    demonstrate VER for roads.
        One commenter found the phrase ``as of'' in paragraphs (b)(2) and 
    (b)(3) of the proposed rule confusing. We have revised the wording of 
    these paragraphs, which the final rule redesignates as paragraphs 
    (c)(2) and (c)(3), to clarify that a properly recorded right of way or 
    easement, or a valid permit, must have existed when the land came under 
    the protection of section 522(e) and 30 CFR 761.11.
        As proposed, the final rule modifies the 1983 definition by 
    incorporating the concept that VER for lands coming under the 
    protection of section 522(e) or 30 CFR 761.11 after August 3, 1977, 
    will be determined on the basis of the circumstances that exist when 
    the land comes under the protection of section 522(e) and 30 CFR 
    761.11, not the circumstances that exist on August 3, 1977. Some 
    commenters supported this change, but others opposed it as inconsistent 
    with section 522(e) of SMCRA, which references the date of enactment 
    (August 3, 1977). As the commenters noted, the courts have held that 
    SMCRA does not compel adoption of this approach. However, the same 
    courts also have ruled that this approach is a reasonable 
    interpretation of SMCRA. See PSMRL II, Round III--VER, 22 Env't Rep. 
    Cas. (BNA) at 1564 (1985), and NWF v. Hodel,  839 F.2d at 749-751 
    (1988). Also, we believe that requiring that the road, easement, right 
    of way, or permit be in place when the land comes under the protection 
    of section 522(e) and 30 CFR 761.11 is more reasonable and consistent 
    with the principles of basic fairness than requiring that the road, 
    easement, right of way, or permit be in place on August 3, 1977, as the 
    commenters advocate.
        One commenter opposed this change because it ``would doom all new 
    homeowners in coalfield areas to having their rights intruded upon by 
    the use of their roads as haul and access roads.'' The commenter 
    apparently was operating under the erroneous belief that the 300-foot 
    buffer zone for occupied dwellings under section 522(e)(5) and proposed 
    30 CFR 761.11(a)(5) [now 30 CFR 761.11(e)] would prohibit use of these 
    roads in the absence of VER. We have never interpreted section 
    522(e)(5) as prohibiting a surface coal mining operation from using a 
    public road that lies within 300 feet of an occupied dwelling.
        The final rule differs from the previous and proposed definitions 
    in that it expressly applies to all roads included within the 
    definition of ``surface coal mining operations'' in 30 CFR 700.5 and 
    section 701(28) of the Act. The 1979 and 1983 versions of this 
    definition mentioned only haul roads. In the proposed rule, we used the 
    term ``access or haul road.'' One commenter supported the proposed 
    rule, noting that prior definitions were interpreted as including 
    access roads. The commenter viewed the references to haul roads in 
    those definitions as a product of draftsmanship, not intent. Another 
    commenter requested, without elaboration, that we revise the rule to 
    differentiate between access and haul roads to avoid future misunder- 
    standings. After evaluating these comments and reviewing the language 
    of the Act, we have decided to avoid any reference to either access or 
    haul roads. Instead, paragraph (c) of the definition in the final rule 
    applies to all roads included in the definition of surface coal mining 
    operations in 30 CFR 700.5 and section 701(28) of the Act. We believe 
    that this change is consistent with both the language of the Act and 
    our historic approach to the regulation of roads
    
    [[Page 70791]]
    
    under the Act. We do not interpret SMCRA as affording differential 
    treatment to roads based on whether they are access or haul roads.
        The definition of surface coal mining operations in section 701(28) 
    of the Act includes ``all lands affected by the construction of new 
    roads or the improvement or use of existing roads to gain access to the 
    site of such activities and for haulage.'' Section 522(e)(4) refers to 
    ``mine access roads or haulage roads.'' Section 515(b)(18) refers to 
    ``the construction of roads.'' We have always interpreted section 
    515(b)(17), which refers to ``the construction, maintenance, and 
    postmining conditions of access roads into and across the site of 
    operations,'' as including both access and haul roads since a haul road 
    also provides access. No one has opposed this interpretation of section 
    515(b)(17), which, in part, provides authority for our regulations 
    governing roads that are used or constructed as part of surface coal 
    mining operations. Our regulations at 30 CFR 701.5 define ``road'' as 
    including both ``access and haul roads,'' but they do not define 
    ``access road'' or ``haul road.'' And our road classification system 
    and performance standards at 30 CFR 816.150 and 817.150 do not 
    distinguish between access roads and haul roads. Therefore, we see no 
    reason to distinguish between access and haul roads when defining VER 
    under section 522(e).
        One commenter opposed adoption of a separate, potentially less 
    rigorous standard for VER for roads. We find this comment untimely. 
    Both the 1979 and 1983 definitions similarly included separate, 
    potentially less rigorous standards for roads, but no one filed suit 
    challenging our authority to establish separate standards in those 
    rules. Furthermore, we did not propose to change, nor did we seek 
    comments on, this aspect of the definition. Like the 1979 and 1983 
    rules, both the 1997 proposed rule and this final rule include separate 
    standards for VER for roads.
        Several commenters alleged that we improperly adopted the original 
    standard for VER for roads in 1979 without providing adequate public 
    notice and opportunity for comment as required by the Administrative 
    Procedure Act, 5 U.S.C. 551 et seq. One commenter stated that 
    justifying a VER standard on the basis of environmental impacts, as we 
    did in the preamble to the portion of the 1979 definition pertaining to 
    roads, is inappropriate. The commenter also argued that we failed to 
    provide documentation in the record of that rulemaking for our claim 
    that allowing VER for all existing roads would be less environmentally 
    disruptive than constructing new roads. We find these comments untimely 
    since the deadline for challenging the 1979 rules has passed.
        One commenter asserted that there is no legal basis for providing a 
    lower VER standard for roads than for any other aspect of a regulated 
    surface coal mining operation because the statutory definition of 
    surface coal mining operations draws no distinction between roads and 
    the other activities and facilities that it includes. The commenter 
    argued that the person claiming VER must demonstrate investment-backed 
    expectations to use the road for surface coal mining operations. 
    According to the commenter, if the mere existence of a property right 
    to conduct surface coal mining operations does not suffice to 
    demonstrate VER under paragraphs (a) and (b) of the definition, then 
    the mere existence of a road should not suffice to demonstrate VER for 
    a road under paragraph (c)(1) of the definition.
        As discussed in Parts VII.A. through VII.D. of this preamble, we 
    are not adopting a takings standard for VER. Hence, we do not agree 
    that a person must demonstrate investment-backed expectations to 
    qualify for VER. And, because the courts have held that the definition 
    of surface coal mining operations does not exclude all public roads, we 
    believe that a separate standard for VER for existing roads is 
    essential as a practical matter. Unless otherwise provided by the 
    agency with jurisdiction over the road, all persons have a right to use 
    a public road for any legitimate purpose, including access and haulage 
    associated with a surface coal mining operation.
        One commenter noted that the concept of VER presupposes some claim 
    of right to use of the road, which the existing and proposed rules did 
    not require in all circumstances. The commenter further stated that the 
    VER standard for roads should rely upon either the good faith/all 
    permits standard or documentation that an existing road was actually in 
    use as an access or haul road as of August 3, 1977. Finally, the 
    commenter argued that the property rights demonstration required for 
    demonstration of VER under paragraph (a) of the definition also should 
    be a prerequisite for VER for roads.
        The facets of the proposed definition to which the commenter 
    objects (VER for existing roads, regardless of whether the road has 
    ever been used for surface coal mining operations, and the lack of a 
    property rights demonstration requirement for VER for roads) have 
    remained essentially unchanged since we first adopted a definition of 
    VER on March 13, 1979. The deadline for challenging the validity of 
    that definition has passed. The proposed rule did not alter those 
    facets of the definition to which the comments pertain, nor did we seek 
    comment on whether they should be changed. Therefore, these comments 
    are neither timely nor within the scope of this rulemaking, and there 
    is no requirement to address them in this rulemaking.
        However, we agree with the commenter that the concept of VER 
    presupposes some claim of right to use of the road under applicable 
    State law. Therefore, to avoid misapplication or abuse of the VER 
    standards for roads, we have revised the definition in the final rule 
    to clarify that, to qualify for VER under the existing road criterion 
    in paragraph (c)(1) of the definition, a person must demonstrate a 
    legal right to use the road for surface coal mining operations. In 
    addition, we have revised paragraph (c)(2) of the definition to clarify 
    that, to qualify for VER under the easement or right-of-way criterion, 
    a person must demonstrate that, under the document creating the right 
    of way or easement and under subsequent conveyances, that person has a 
    legal right to use or construct a road across the right of way or 
    easement for surface coal mining operations. These changes merely make 
    explicit an unstated assumption in both the existing and proposed 
    rules.
        The commenter also asserted that the proposed rule would effect an 
    uncompensated taking by sanctioning physical intrusion through dust and 
    noise on properties adjoining such roads. We do not agree. The VER 
    standards for roads would not preclude any private remedy available to 
    affected parties under State law, including State trespass and nuisance 
    law. Therefore, this rule does not effect a facial taking.
    
    F. How Does the Definition Address VER for Lands That Come Under the 
    Protection of Section 522(e) After August 3, 1977?
    
        As we proposed, each standard in the definition of VER in the final 
    rule provides for determination of VER based on property rights and 
    other conditions in existence on the date that the land comes under the 
    protection of 30 CFR 761.11 and section 522(e) of the Act. This concept 
    has sometimes been referred to ``continually created VER.'' We have 
    included this concept in the definition of VER in the final rule 
    because houses, churches, roads, parks, and other features protected by 
    section 522(e) and 30 CFR 761.11 come into
    
    [[Page 70792]]
    
    existence and are expanded on an ongoing basis. In the interest of 
    fairness, persons claiming VER for lands coming under the protection of 
    the Act after the date of enactment should not have to demonstrate that 
    they owned the requisite property rights on August 3, 1977, the date of 
    enactment, as the 1979 definition required.
        Some commenters opposed this change as being inconsistent with the 
    express language of section 522(e) of SMCRA, which reads: ``After the 
    enactment of this Act and subject to valid existing rights no surface 
    coal mining operation except those which exist on the date of enactment 
    of this Act shall be permitted'' on certain enumerated lands.
        According to the commenters, this language means that the Act does 
    not authorize use of a date other than the date of enactment (August 3, 
    1977) when determining exceptions from the prohibitions of section 
    522(e). Under this interpretation, VER must be determined on the basis 
    of property rights and other conditions as they existed on August 3, 
    1977.
        We disagree. The Act provides that the prohibitions of section 
    522(e) are subject to VER, but it neither defines VER nor specifies 
    that VER must be determined on the basis of property rights and other 
    conditions as they existed on the date of enactment. Because the lands 
    and features protected by 30 CFR 761.11 and section 522(e) are 
    continually changing, we believe that VER should be determined on the 
    basis of the property rights and circumstances that exist at the time 
    that lands come under the protection of section 522(e) and 30 CFR 
    761.11, not the date of enactment of SMCRA, which recedes ever further 
    into history.
        The commenters argue that this approach violates the purpose of 
    section 522(e), which is to prohibit new surface coal mining operations 
    on certain lands. They assert that an industry as pervasively regulated 
    as coal mining had no reasonable expectation of being able to mine any 
    lands without addressing the potential extension of protection to those 
    lands once SMCRA became law. They state that the enactment of SMCRA 
    placed operators and other interested persons on notice that certain 
    lands are subject to the protections of section 522(e), even when the 
    features triggering that protection do not come into existence until 
    after the enactment of SMCRA. Therefore, according to the commenters, 
    any investments after that date are made with full knowledge of that 
    risk and are not entitled to protection from the prohibitions of 
    section 522(e), regardless of when the features listed in section 
    522(e) come into existence.
        One commenter argued that the only way to avoid the proscriptions 
    of section 522(e) is to obtain a permit before the lands come under the 
    protection of section 522(e). Alternatively, some commenters stated, 
    persons conducting surface coal mining operations after the enactment 
    of SMCRA should have immediately procured all necessary property rights 
    (for example, purchased a 300-foot buffer around all planned minesites 
    to preclude application of the prohibition on surface coal mining 
    operations within 300 feet of an occupied dwelling) to avoid potential 
    adverse impacts from the creation of new protected areas after August 
    3, 1977.
        These arguments are identical to those advanced by the National 
    Wildlife Federation in a challenge to paragraph (d) of the 1983 
    definition of VER, where this concept first appeared. The district 
    court rejected those arguments:
    
        The court does not agree with plaintiffs that the legislative 
    history they cite, or the language of the statute[,] requires a 
    finding that the Secretary's concept of ``continually created VER'' 
    is inconsistent with law. Given the language of the Act, and 
    Congress' concern with takings, the court finds that ``continually 
    created VER'' is in accord with law.
    
    PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1564 (1985).
    
        The district court's decision was upheld on appeal. See NWF v. 
    Hodel, 839 F.2d at 749-751 (1988). ``We find such a rule to be a 
    reasonable interpretation of the Act, and thus affirm the decision of 
    the district court upholding the Secretary's VER regulation.'' Id. at 
    751.
        These court decisions focused on paragraph (d)(1) of the 1983 
    definition of VER. This paragraph established a ``continually created 
    VER'' standard for existing operations. However, we believe that the 
    rationale underlying this paragraph applies with equal force to all 
    standards under the VER exception. In other words, when land comes 
    under the protection of 30 CFR 761.11 and section 522(e) after August 
    3, 1977, we believe that it is not fair to determine VER for those 
    lands on the basis of property rights and other conditions in existence 
    on August 3, 1977. Rights under the VER exception should be no less 
    important than rights under the exception for existing operations.
        We previously endorsed this principle in adopting paragraph (d)(2) 
    of the 1983 definition of VER. This paragraph provided that, when land 
    comes under the protection of 30 CFR 761.11 and section 522(e) after 
    August 3, 1977, we would determine VER using a takings standard based 
    on the property rights that existed when the land came under the 
    protection of section 522(e) rather than on the property rights that 
    existed on August 3, 1977. The court subsequently remanded this portion 
    of the rule because we failed to provide adequate notice and 
    opportunity for comment on the takings standard. The court never 
    reached a decision on the merits of this paragraph. However, in 
    discussing the merits of paragraph (d) in general, the judge 
    specifically rejected the argument that the word ``existing'' in the 
    term valid existing rights means that those rights must have existed on 
    August 3, 1977, the date of enactment of SMCRA. See PSMRL II, Round 
    III--VER, 22 Env't Rep. Cas. (BNA) at 1564 (1985). And, in implementing 
    the remand order, we suspended paragraph (d)(2) of the 1983 definition 
    of VER only to the extent that it incorporated the takings standard. 
    See 51 FR 41952, 41961, November 20, 1986.
        One commenter argued that this concept is inconsistent with the 
    decision in M&J Coal versus United States, 47 F.3d 1148 (Fed. Cir. 
    1995). The commenter argued that this case upheld the principle that 
    persons have no legitimate expectation of the right to conduct surface 
    coal mining operations on lands that come under the protection of the 
    Act after August 3, 1977. We do not agree. In M&J, the court ruled that 
    a person who acquires property after passage of a law restricting use 
    of that property does not have sufficient legal basis to support a 
    claim that the requirements of the law constitute a compensable taking. 
    However, this case involved a situation in which a regulatory authority 
    limited coal extraction from an underground mine to protect overlying 
    structures from the damage that could result from subsidence caused by 
    underground mining activities. It did not concern the applicability of 
    the VER exception to lands that come under the protection of 30 CFR 
    761.11 and section 522(e) after August 3, 1977, the date of enactment. 
    Therefore, we do not believe that this decision is relevant to this 
    rulemaking.
    History and Disposition of Former 30 CFR 761.5(d), the Original 
    ``Continually Created VER'' Provision
        On September 14, 1983 (48 FR 41312, 41349), we added paragraph (d) 
    to the definition of VER to address situations where the prohibitions 
    of section 522(e) become applicable to a particular site after August 
    3, 1977, the date of enactment of SMCRA. This paragraph provided that:
    
    
    [[Page 70793]]
    
    
        Where an area comes under the protection of section 522(e) of 
    the Act after August 3, 1977, valid existing rights shall be found 
    if--
        (1) On the date the protection comes into existence, a validly 
    authorized surface coal mining operation exists on that area; or
        (2) The prohibition caused by section 522(e) of the Act, if 
    applied to the property interest that exists on the date the 
    protection comes into existence, would effect a taking of the 
    person's property which would entitle the person to just 
    compensation under the Fifth and Fourteenth Amendments to the United 
    States Constitution.
    
        Paragraph (d)(1) extended the exception for existing operations to 
    validly authorized surface coal mining operations in existence on the 
    date that the land upon which they are located comes under the 
    protection of section 522(e). Paragraph (d)(2) extended the takings 
    standard for VER to property interests that existed on the date that 
    the land came under the protection of section 522(e), rather than 
    limiting its scope to property interests that existed on August 3, 
    1977.
        In PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1564 
    (1985), the district court upheld both paragraph (d)(1) and the concept 
    of determining VER based upon property rights and conditions in 
    existence on the date that land comes under the protection of section 
    522(e) rather than property rights and conditions in existence on 
    August 3, 1977, the date of enactment of SMCRA. However, the court 
    remanded paragraph (d)(2) because it incorporated the takings standard, 
    which, the court held, had not been subject to proper notice and 
    opportunity for comment under the Administrative Procedure Act. See 22 
    Env't Rep. Cas. (BNA) at 1564. The district court's decision was upheld 
    on appeal. See NWF versus Hodel, 839 F.2d at 749-751 (1988). To comply 
    with these decisions, we subsequently suspended paragraph (d)(2) to the 
    extent that it incorporated the takings standard. See 51 FR 41961, 
    November 20, 1986.
        The VER definitions proposed on December 27, 1988, and July 18, 
    1991, would have deleted paragraph (d) in favor of replacing the 
    reference to August 3, 1977, in each of the VER standards in the other 
    paragraphs of the definition with a reference to the date that the 
    lands came under the protection of section 522(e) of the Act. However, 
    neither of the proposed definitions included a counterpart to paragraph 
    (d)(1) of the 1983 definition. This omission would have had the effect 
    of eliminating the VER standard for existing operations with respect to 
    lands that come under the protection of section 522(e) after August 3, 
    1977. We did not intend this result. As stated in the preamble to the 
    1991 proposal, although paragraph (d) of the 1983 VER definition ``is 
    rewritten and reorganized in this proposal, the basic intent and 
    application are not changed.'' 56 FR 33156, July 18, 1991.
        Therefore, we have revised the exception for existing operations, 
    now located in 30 CFR 761.12, to incorporate language consistent with 
    paragraph (d)(1) of the 1983 definition. Specifically, 30 CFR 761.12 
    provides that the prohibitions of 30 CFR 761.11 do not apply to (1) 
    surface coal mining operations on land for which a valid permanent 
    program permit exists when the land comes under the protection of 30 
    CFR 761.11 or section 522(e) of SMCRA, or, (2) for surface coal mining 
    operations subject to the initial regulatory program in Subchapter B of 
    30 CFR Chapter VII, lands upon which validly authorized surface coal 
    mining operations exist on that date. Further discussion of this change 
    and the exception for existing operations appears in Part XVI of this 
    preamble.
    
    VIII. How Does Our Definition of VER Compare With VER Under Other 
    Federal Statutes?
    
        In the preamble to our proposed rule, we stated that the VER 
    exception in section 522(e) of SMCRA differs from VER under other 
    Federal laws because the section 522(e) VER exception applies to both 
    Federal and non-Federal lands while VER provisions under other Federal 
    laws apply only to lands in Federal ownership. Also, VER clauses and 
    case law under other Federal statutes and executive orders typically 
    relate to when a person may complete an already initiated process to 
    obtain a property interest in public lands if there is a change in the 
    laws or other requirements governing the vesting or perfecting of 
    interests in those lands. In contrast, the preamble to the proposed 
    rule explains, the VER exception in section 522(e) concerns a person's 
    right to use land for a particular purpose (conducting surface coal 
    mining operations) when that person already has fully vested property 
    rights in the land. We arrived at this conclusion because, unlike other 
    Federal statutes with VER provisions, section 522(e) of SMCRA does not 
    involve a transfer of property rights or interests from the Federal 
    government to another party. Instead, it prohibits surface coal mining 
    operations on certain lands, generally without regard to who owns those 
    lands.
        Commenters disagreed with our explanation of the significance of 
    the difference between SMCRA and other Federal laws. Specifically, one 
    commenter argued that the only distinction is the source law used to 
    determine the nature of property interests and whether they are 
    entitled to protection as VER. According to the commenter, the source 
    law for VER under Federal statutes other than SMCRA is the Federal 
    statute that prescribes the requirements for creation of a non-Federal 
    right or interest in public lands. Conversely, the commenter argued, 
    the source law for VER under section 522(e) of SMCRA is State common 
    law, at least for non-Federal lands. As discussed in more detail later 
    in this section of the preamble, we cannot concur with this analysis 
    because to do so would effectively negate the prohibitions of section 
    522(e) in most situations.
        The commenter attacked the good faith/all permits standard for VER 
    as ``an unlawful attempt to prevent not the mere acquisition of an 
    additional interest, but [to] preclude the use or enjoyment of an 
    existing property interest under state law.'' The commenter noted that 
    many public lands statutes prescribe certain steps or conditions that 
    are necessary to secure legal title, equitable title, or other forms of 
    property rights to use public lands or resources. According to the 
    commenter, the government, in its proprietary capacity, may preclude 
    someone from acquiring an additional property interest in public lands 
    if that person does not satisfy all necessary conditions, but the 
    government cannot extinguish an existing property interest. The 
    commenter further noted that the VER exception under section 522(e) of 
    SMCRA generally pertains to property rights under State law that are 
    fully perfected and vested and that are not conditioned upon the 
    satisfaction of any new requirements. Hence, the commenter argues, 
    since VER provisions under other Federal statutes have ``historically 
    protected unvested property rights in order to allow persons to perfect 
    a vested property interest against the United States in its proprietary 
    capacity, surely the same principles apply with more force to preserve 
    superior vested rights against impairment when the United States acts, 
    as it does under SMCRA, in its regulatory capacity.''
        We do not find the commenter's arguments persuasive. As discussed 
    in more detail in Part VII.C. of this preamble, the definition of VER 
    in this final rule does not extinguish any property rights. We agree 
    with the commenter that, at least for non-Federal properties, State law 
    is the appropriate source law to determine property rights when making 
    a VER determination
    
    [[Page 70794]]
    
    under section 522(e) of SMCRA. But, as discussed below, we do not agree 
    that the VER inquiry should end with the property rights demonstration.
        We continue to believe that VER under section 522(e) of SMCRA is 
    not analogous to VER under other Federal statutes. We found no 
    definitions of VER in other Federal statutes. Our review of these 
    statutes, applicable case law, and the literature discussing them 
    indicates that the VER provisions in these laws and pertinent executive 
    orders usually protect an expectation or property interest that arose 
    under an earlier law, which is normally a Federal public lands law but 
    may occasionally be State law. Generally, the protected interest is 
    less than vested title and is asserted against Federal title. See, 
    e.g., Laitos, The Nature and Consequences of ``Valid Existing Rights'' 
    Status in Public Land Law, 5 J. Min. L. & Pol'y 399, 416-18 (1990).
        As a commenter noted, the Supreme Court interpreted the phrase 
    ``valid existing claims'' in a VER exception in an executive order 
    concerning the homestead laws in the following manner:
    
        Obviously, this means something less than a vested right, such 
    as would follow from a completed final entry, since such a right 
    would require no exception to insure its preservation. The purpose 
    of the exception evidently was to save from the operation of the 
    order claims which had been lawfully initiated and which, upon full 
    compliance with the land laws, would ripen into a title.
    
    Stockley v. United States, 260 U.S. 532, 544 (1923).
    
        As another example of the meaning of VER under other Federal 
    statutes, we offer the following excerpt from one of the court 
    decisions cited by several commenters:
    
        We conclude that ``valid existing rights'' does not necessarily 
    mean vested rights. Under the [Alaska Native Townsite] Act before 
    its repeal, a municipality, and all individuals who had occupied 
    specific lots within the subdivision limits, had a legitimate claim 
    for municipal control of any unoccupied lots * * *. It is rational 
    to conclude that when the Congress repealed the law and enacted a 
    savings clause for ``existing rights,'' that this claim would be 
    preserved. The term ``valid existing rights'' does not necessarily 
    mean present possessory rights, or even a future interest in the 
    property law sense of existing ownership that becomes possessory 
    upon the expiration of earlier estates. Legitimate expectations may 
    be recognized as valid existing rights, especially where the 
    expectancy is created by the government in the first instance. * * * 
    A government is most responsible when it recognizes as a right that 
    which is not strictly enforceable but which flows nevertheless from 
    the government's own prior representations. That in essence is what 
    the Secretary has done here. The Secretary's reading of the words 
    ``valid existing rights'' to mean something other than ``vested'' is 
    reasonable.
    
    Aleknagik Natives Ltd. v. U.S., 806 F.2d 924, 926-27 (9th Cir. 1986).
    
        Thus, under Federal laws other than section 522(e) of SMCRA, the 
    term VER typically refers to the set of circumstances under which 
    persons who have unvested or incompletely vested interests or 
    expectations in Federal lands or minerals will be allowed to vest or 
    complete those interests or expectations as property rights against the 
    United States as the fee owner. In general, the VER provisions of those 
    statutes, or case law concerning VER under those statutes, apply to 
    situations in which the Federal government withdraws land from the 
    operation of a public lands statute or changes the eligibility criteria 
    or other requirements for vesting or completing of property rights. In 
    these cases, the term VER refers to the point at which a person who has 
    taken some action toward vesting or completing a property interest in 
    Federal lands or minerals has the right to complete the process 
    regardless of any statutory or regulatory changes to the contrary.
        In some instances, the courts have indicated that Congress intended 
    for VER provisions under other Federal laws to operate as a means of 
    avoiding compensable takings. See Cameron v. United States, 252 U.S. 
    450 (1920) and Utah v. Andrus, 486 F. Supp. 995, 1011 (D. Utah 1979). 
    However, there is no consensus that this principle is always true or 
    even usually true. See, generally, 5 J. Min. L. & Pol'y No. 3. We 
    conclude that the record does not clearly establish that Congress 
    always intended avoidance of compensable takings to be an underlying 
    principle for all VER provisions. If Congress had this intent, VER 
    provisions would protect only those property rights that are protected 
    under the Fifth Amendment. However, the purpose of a VER provision may 
    be to protect expectations or interests that are not property for 
    purposes of the Fifth Amendment, or to preserve the status quo for 
    preexisting interests. See Arnold v. Morton, 529 F.2d 1101 (9th Cir. 
    1976); Solicitor's Opinion M-36910 (Supp.), 88 I.D. 909, 913 (Oct. 5, 
    1981); Sierra Club v. Hodel, 848 F.2d 1068, 1087-88 (10th Cir. 1988); 
    and Beard Oil Co., 111 IBLA 191 (1989).
        For the reasons discussed below and in the first paragraph of this 
    portion of the preamble, we do not find that the meaning of VER under 
    other Federal laws provides useful guidance in determining the meaning 
    of VER for surface coal mining operations under section 522(e) of 
    SMCRA. First, section 522(e) and the VER exception in that section 
    apply to both Federal and non-Federal lands. Neither section 522(e) nor 
    the VER exception in that section involves a transfer of a property 
    right from the Federal government or a vesting of a property right vis-
    a-vis the Federal government. As discussed in Part VII.C.2. of this 
    preamble, the VER exception in section 522(e) of SMCRA concerns a 
    person's eligibility to obtain a permit to conduct surface coal mining 
    operations when vested property rights already exist. In short, the VER 
    exception in section 522(e) differs from VER under other Federal laws 
    because SMCRA has a fundamentally different nature than the other 
    Federal laws to which the commenters refer. Unlike those laws, SMCRA 
    regulates the use of non-Federal lands.
        Second, the section 522(e) VER exception applies in the context of 
    a regulatory program that already imposes a requirement that a permit 
    applicant demonstrate the property right to mine the coal by the method 
    intended. Thus, to provide that a person who has the necessary property 
    rights under State law is exempt from the prohibitions and restrictions 
    of section 522(e) would render the VER exception surplusage, or at best 
    insignificant, in relation to the independent permitting requirements 
    in the Act. Further, except in situations involving unleased Federal 
    coal, this interpretation would effectively render the protections of 
    section 522(e) void or insignificant. A fundamental principle of 
    statutory construction provides that `` `effect must be given, if 
    possible, to every word, clause and sentence of a statute' * * * so 
    that no part will be inoperative or superfluous, void, or 
    insignificant.'' PSMRL I, 627 F.2d at 1362, citing 2A Sutherland, 
    supra, at Sec. 46.06.
        Third, a VER standard that is primarily intended to determine 
    whether, under Federal law, property rights may vest against the 
    Federal government, arguably would be irrelevant or inappropriate in 
    the circumstances to which section 522(e) applies. Property rights for 
    the lands listed in section 522(e) are already vested under State law. 
    Furthermore, application of this type of VER standard would be 
    inappropriate because SMCRA is not a statute under which Congress 
    intended to resolve title disputes or change the process for vesting 
    real property rights.
    
    IX. Are VER Transferable?
    
        In general, we view VER as transferable because, unless otherwise
    
    [[Page 70795]]
    
    provided by State law, the property rights, permits, and operations 
    that form the basis for VER determinations are transferable. There is 
    one significant exception to this principle. If an operation with VER 
    under the needed for and adjacent standard divests itself of the land 
    to which the VER determination pertains, the new owner does not have 
    the right to conduct surface coal mining operations on those lands 
    under the prior VER determination. That determination is no longer 
    valid because it was based on a representation that the lands were 
    needed for the operation. Of course, if the sale involves the entire 
    operation (as opposed to a portion of its reserves), the VER 
    determination would retain validity since there is no change in the 
    operation's need for the land.
        However, the right to alienate or transfer real or personal 
    property is not absolute. Certain property interests such as leases, 
    licenses, and contracts may be inherently nontransferable or of limited 
    transferability, either by their terms or by operation of State law. If 
    a person's property interests are of this nature, then any VER resting 
    on those interests also would be nontransferable.
        The VER exception in section 522(e) may be considered analogous to 
    a zoning variance, which, in the interest of equity, allows an 
    otherwise prohibited use to occur under certain fact-specific 
    circumstances even though that use was not in existence on the land in 
    question at the time that the zoning ordinance took effect. Zoning 
    variances typically convey with the title to the property even if the 
    rights conferred by the variance have not been exercised.
        Some commenters objected strongly to our statements in the preamble 
    to the proposed rule that characterize VER as attaching to the property 
    interests. They argue that VER should attach only to the person, and 
    that these rights should expire if the person does not exercise them. 
    We do not find this argument persuasive. VER determinations are based 
    on property rights, permits, and/or operations, depending upon the 
    standard that applies. To the extent that State law and the conveyances 
    in question either authorize or do not prohibit the transfer of these 
    property rights, permits, and operations, we see no reason to prohibit 
    the transfer of any associated VER. Furthermore, as specified in 
    section 505(a) of the Act, SMCRA does not supersede any State law or 
    regulation unless the State law or regulation is inconsistent with the 
    Act. Since SMCRA does not address the transferability of VER, we have 
    no authority under the Act to limit the operation of State laws related 
    to or affecting transferability of VER.
        In adopting this rule, we do not intend to create rights that do 
    not already exist in State law or expand upon those that do. Individual 
    States may prohibit VER transfers to the extent that they have the 
    authority to do so under State law. One commenter argued that any State 
    law or regulation that prohibits the transfer of VER would constitute 
    the taking of private property without compensation in violation of the 
    Fifth and Fourteenth Amendments to the U.S. Constitution. We do not 
    find it appropriate or necessary to respond to this theoretical 
    argument, which lies outside the scope of SMCRA and is best left to the 
    courts to address if the situation materializes.
        One commenter argued that VER is not a property right, but a 
    recognition of some equitable consideration that Congress intended to 
    afford to persons whose mine plans were in substantial stages of 
    development on the date of enactment of SMCRA. According to the 
    commenter, VER should not be transferable because they are personal 
    rights intended to protect the legitimate expectations of the property 
    owner. The commenter expressed concern that allowing transfer of VER 
    would elevate an equitable consideration into an estate in land or a 
    property right. However, the commenter failed to cite any supporting 
    documentation for these arguments and characterizations of 
    Congressional intent regarding VER.
        As summarized and excerpted in Part V of this preamble, the 
    legislative history of the VER exception in section 522(e) is quite 
    sparse; there is no passage that supports the commenter's claims. And 
    we are aware of no basis for the commenter's belief that VER are 
    personal rights and that allowing transfer of VER would convert an 
    equitable consideration into a property right. But, even if the 
    commenter is correct, we do not see how this distinction would preclude 
    transfer of VER. Unless otherwise specified by agreement of the 
    parties, a personal right to use property for a particular purpose or 
    in a particular manner may also be transferable if State law so 
    provides.
        The commenter also argued that allowing individual States to 
    determine transferability of VER would result in disparate levels of 
    protection for both public and private lands. The commenter provided no 
    basis for this assertion. We know of no reason to expect that there 
    will be any significant difference in terms of disturbance of protected 
    lands between States that allow transferability and those that do not. 
    However, to the extent that a difference may exist, we do not find any 
    conflict with SMCRA. Section 505(a) of the Act provides that:
    
        No State law or regulation in effect on the date of enactment of 
    this Act, or which may become effective thereafter, shall be 
    superseded by any provision of this Act or any regulation issued 
    pursuant thereto, except insofar as such State law or regulation is 
    inconsistent with the provisions of this Act.
    
        Because SMCRA does not address the transferability of VER, we 
    believe that deferral to State law is appropriate.
        The commenter also argued that to the extent that we allow transfer 
    of VER, we should restrict transfers in the same manner as zoning law 
    limits the transfer of a non-conforming use. According to the 
    commenter, the right to a non-conforming use generally lapses unless 
    exercised on a continuous basis. We do not accept the commenter's 
    argument. There is no indication in SMCRA, its legislative history, or 
    elsewhere that Congress intended the VER exception in section 522(e) to 
    operate as a nonconforming use does under zoning law. We see no 
    compelling reason to restrict transfer of VER in this fashion. And, as 
    previously discussed, restricting transfer in the manner advocated by 
    the commenter may run afoul of section 505(a) of the Act, which 
    preserves State law unless it is inconsistent with SMCRA.
        One commenter expressed the fear that allowing transfer of VER 
    would expand the scope of the VER exception to the point where nearly 
    anyone with a backhoe could access protected lands in a devastating 
    fashion. We do not agree that allowing transfer of VER would create the 
    result feared by the commenter. The definition of VER in the final rule 
    provides appropriate limitations on the scope of the VER exception.
        Finally, one commenter asserted, without further elaboration, that 
    transfer of VER is not permissible under current law, and that our rule 
    would create a new right contrary to law and in excess of our 
    authority. We disagree. Both SMCRA and its implementing regulations are 
    silent on the question of transferability.
    
    X. Sections 740.4, 745.13, and 761.14(a): Who Is Responsible for 
    VER Determinations for Non-Federal Lands Within Section 522(e)(1) 
    areas?
    
    A. Statutory Background and Rulemaking History
    
        SMCRA does not directly address responsibilities for VER 
    determinations. However, section 503(a) of the Act
    
    [[Page 70796]]
    
    specifies that States with surface coal mining and reclamation 
    operations on non-Federal lands may assume exclusive jurisdiction over 
    the regulation of surface coal mining and reclamation operations within 
    their borders, except as otherwise provided in section 521 (Federal 
    oversight of State regulatory program implementation), section 523 
    (Federal lands), and Title IV of the Act (reclamation of abandoned mine 
    lands). In addition, section 101(f) of the Act asserts that ``the 
    primary governmental responsibility for developing, authorizing, 
    issuing, and enforcing regulations for surface coal mining and 
    reclamation operations subject to this Act should rest with the 
    States.'' In accordance with these principles, former 30 CFR 761.4, as 
    published on March 13, 1979 (44 FR 15341), assigned the responsibility 
    for VER determinations for non-Federal, non-Indian lands to the 
    regulatory authority, with the Secretary retaining responsibility for 
    VER determinations for Federal lands.
        On February 16, 1983 (48 FR 6935), we revised the Federal lands 
    regulations at 30 CFR 740.4 by adding paragraph (a)(4). This paragraph 
    narrowed the Secretary's responsibility for VER determinations by 
    restricting it to proposed surface coal mining operations that would be 
    located on Federal lands within the boundaries of any areas listed in 
    section 522(e)(1) or (e)(2) of the Act. In the same rulemaking, we 
    added paragraph (o) to 30 CFR 745.13 to specify that the Secretary may 
    not delegate the responsibility for making VER determinations on 
    Federal lands within any areas listed in section 522(e)(1) or (e)(2) to 
    the State in a cooperative agreement for the regulation of surface coal 
    mining and reclamation operations on Federal lands. The preamble to 
    that rulemaking explains that exclusive authority for VER 
    determinations involving those lands is an integral component of the 
    Secretary's commitment to protect the areas listed in section 522(e)(1) 
    and (e)(2) in accordance with congressional direction and to prevent 
    mining on Federal lands within the National Park System. See 48 FR 
    6917, col. 2, February 16, 1983.
        On September 14, 1983 (48 FR 41312), we removed 30 CFR 761.4 
    because we found it unnecessary in view of the provisions added to 30 
    CFR 740.4 and 745.13 on February 16, 1983. Citizen and environmental 
    groups filed a challenge to the removal. They also used this occasion 
    as an opportunity to argue that SMCRA requires that the Secretary make 
    VER determinations in all cases involving lands within the boundaries 
    of section 522(e)(1) areas, regardless of ownership. The court rejected 
    the plaintiffs' arguments, noting that section 503(a) of the Act 
    ``permits States to assume exclusive jurisdiction over the regulation 
    of surface coal mining and reclamation operations on non-Federal 
    lands.'' PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1566 
    (1985). The court also noted that nothing in section 523(c) of the Act, 
    which prohibits the Secretary from delegating to the States his 
    authority to designate Federal lands as unsuitable for mining under 
    section 522 of the Act, ``persuades the court to the contrary.'' Id.
        However, in oral arguments defending against the challenge, counsel 
    for the Government stated that:
    
        [I]n those situations where surface mining on private inholdings 
    will affect federal lands, that kicks in the Federal Lands Program, 
    and under the Federal Lands Program, the Secretary makes the VER 
    determination, so there may be circumstances where you have a 
    private inholding within the protected area, in which the Secretary 
    would make the VER determination, but he can't in the abstract know 
    when he's going to be required to make that determination, until he 
    knows what land is going to be mined, and what potential impact that 
    might have on federal lands.
    
    Transcript of Oral Argument, Dec, 21, 1984, at 46; quoted in PSMRL II, 
    Round III--VER, 22 Env't Rep. Cas. (BNA) at 1566 (1985).
        The court did not address the validity or interpretation of this 
    argument, which, taken at face value, would extend the reach of the 
    Federal lands program to lands in which there is no element of Federal 
    ownership.
        On November 20, 1986 (51 FR 41952-62), we suspended a number of 
    regulations. Among other things, that Federal Register document, which 
    is known as the 1986 suspension notice, partially suspended the VER 
    definition published on September 14, 1983. In the preamble discussion 
    of the impact of this suspension on the Federal lands program, we 
    announced that the Secretary would make VER determinations for non-
    Federal lands within the boundaries of the areas listed in section 
    522(e)(1) whenever surface coal mining operations on those lands would 
    affect the Federal interest (51 FR 41955). This policy is known as the 
    ``affected by'' standard. However, the notice did not suspend or modify 
    30 CFR 740.4(a)(4) or any other rule to reflect this policy. (Section 
    740.4(a)(4) (1983) provides that the Secretary is responsible for VER 
    determinations for Federal lands, but it does not extend that 
    responsibility to non-Federal lands.)
        The 1986 suspension notice does not explain the basis or origin of 
    the ``affected by'' standard. However, it appears to arise from the 
    Government's oral argument in PSMRL II, Round III--VER, as quoted in 
    the decision at 22 Env't Rep. Cas. (BNA) 1566 (1985). This argument 
    apparently derives from and expands upon language in the court's 
    earlier decision in In re Permanent Surface Mining Regulation II, Round 
    I, No. 79-1144 (D.D.C. July 6, 1984), slip op. at 11-15 (hereinafter 
    ``PSMRL II, Round I''). In that decision, the court noted that the 
    definition of ``surface coal mining operations'' in section 701(28) of 
    the Act includes a broad ``affected by'' test and that under section 
    523(a) of SMCRA and the definition of ``Federal lands program'' in 
    section 701(5) of the Act, all surface coal mining and reclamation 
    operations on Federal lands are subject to the Federal lands program.
    
    B. What Alternatives Did We Consider?
    
        In the preamble to the proposed rule published on January 31, 1997 
    (see 62 FR 4838-40), we requested comment on four alternatives with 
    respect to responsibility for VER determinations for non-Federal lands 
    within the areas protected by section 522(e)(1):
        (1) Reaffirming the 1983 version of 30 CFR 740.4(a)(4), which would 
    mean that we would be responsible for making all VER determinations for 
    Federal lands in section 522(e)(1) areas and that the regulatory 
    authority (which may be either OSM or the State) would be responsible 
    for making all determinations for non-Federal lands.
        (2) Reaffirming the 1983 version of 30 CFR 740.4(a)(4) and revising 
    Part 761 to provide that the regulatory authority must obtain the 
    concurrence of the pertinent land management agency before finding that 
    a person has VER for any lands within the boundaries of the areas 
    listed in 30 CFR 761.11(a) and section 522(e)(1) of the Act. Under this 
    alternative, if the proposed operation would be located on land within 
    the boundaries of an area listed in section 522(e)(1), the agency 
    statutorily responsible for management of the protected lands would 
    have to concur with the regulatory authority's VER determination before 
    the determination could take effect.
        (3) Revising 30 CFR 740.4(a)(4) and Part 761 to codify the 
    ``affected by'' standard, which is the policy established in the 1986 
    suspension notice. This alternative relies upon the theory that the 
    scope of the Federal lands program is not necessarily limited to lands 
    included in the definition of Federal lands in section 701(4) of the 
    Act; i.e., lands in which the Federal
    
    [[Page 70797]]
    
    government has a property interest. Under this theory, the Federal 
    lands program would extend to include non-Federal lands within the 
    boundaries of section 522(e)(1) areas if surface coal mining operations 
    on those lands could affect the Federal interest by adversely impacting 
    the values for which the lands were designated as protected areas.
        (4) Revising 30 CFR 740.4(a)(4) and Part 761 to require that we 
    make all VER determinations for both Federal and non-Federal lands 
    within the boundaries of the areas listed in 30 CFR 761.11(a) and 
    section 522(e)(1) of the Act. This alternative relies upon the same 
    theory as the ``affected by'' standard, with the additional argument 
    that because Congress or the President established the boundaries of 
    the areas identified in section 522(e)(1), all lands within those 
    boundaries must possess values of national significance or interest. 
    Therefore, surface coal mining operations on any lands within those 
    boundaries would automatically affect the Federal interest in some way.
    
    C. Which Alternative Are We Adopting?
    
        Commenters divided sharply on which alternative we should adopt. 
    After evaluating the comments and reviewing the Act, we have decided to 
    adopt the first alternative, which means that we are not making any 
    substantive changes to 30 CFR 740.4(a)(4). (We are making a few 
    editorial changes to reflect plain language principles and update 
    cross-references to other rules.) Under the final rule, the regulatory 
    authority has the responsibility for making VER determinations for all 
    non-Federal lands, including those within the areas listed in section 
    522(e)(1) of the Act.
        Many commenters supported this alternative as the only one that is 
    fully consistent with SMCRA's provisions for State primacy in the 
    regulation of surface coal mining operations on non-Federal lands. We 
    agree. Section 101(f) of the Act asserts that ``the primary 
    governmental responsibility for developing, authorizing, issuing, and 
    enforcing regulations for surface coal mining and reclamation 
    operations subject to the Act should rest with the States.'' In 
    relevant part, section 503(a) provides that, once a State meets certain 
    conditions, it has the right to assume ``exclusive jurisdiction'' over 
    the regulation of surface coal mining and reclamation operations on 
    non-Federal lands within its borders, with the exception of the Federal 
    oversight and enforcement authority reserved under section 521 of the 
    Act. Other sections of the Act grant us specific, limited, additional 
    authority in States with primacy, such as the right to conduct 
    oversight inspections under section 517, but these rights and 
    authorities do not extend to making VER determinations on non-Federal 
    lands in those States.
        Commenters who supported this alternative opposed the second 
    alternative because it would effectively grant the Federal surface 
    management agency veto authority over all VER determinations for 
    section 522(e)(1) areas. They argued that nothing in SMCRA supports 
    this alternative and that Congress would have included a specific 
    concurrence requirement if it believed that one was needed, as it did 
    with respect to State program approval in section 503(b), compatibility 
    findings under section 522(e)(2), and joint agency approval under 
    section 522(e)(3). One commenter noted that delays in decision-making 
    as a result of the concurrence requirement could increase the 
    Government's exposure to compensable takings claims. On balance, we 
    find that these arguments, while not necessarily fatal, militate 
    against adoption of the second alternative, the concurrence 
    requirement.
        These commenters also opposed the third and fourth alternatives as 
    inconsistent with section 503(a) of SMCRA, because those alternatives 
    would require us to make VER determinations on some or all non-Federal 
    lands within section 522(e)(1) areas. In contrast, section 503(a) of 
    the Act establishes a mechanism by which States may assume ``exclusive 
    jurisdiction'' over surface coal mining and reclamation operations on 
    non-Federal lands within their borders. As discussed at length in this 
    portion of the preamble, we concur with this comment.
        Opponents of the alternative that we are adopting argue that 
    reserving VER determination authority for all lands listed in section 
    522(e)(1) to the Secretary would ensure national consistency and may 
    result in more favorable consideration of arguments advanced by the 
    Federal surface management agency with jurisdiction over the protected 
    site. However, the commenters offered no empirical evidence to support 
    this theory. Nor do we find it persuasive in view of SMCRA's emphasis 
    on State primacy.
        Some commenters argued that the alternative that we are adopting 
    would provide insufficient protection for lands of national 
    significance, such as units of the National Park Service. In support of 
    this argument, the commenters cite various provisions of SMCRA's 
    legislative history in which Congress expresses dissatisfaction with 
    the quality of State regulation prior to the enactment of SMCRA.
        We also find these arguments unpersuasive. Subchapter C of 30 CFR 
    Chapter VII provides that State regulatory programs must be no less 
    stringent than the Act and no less effective than the Federal 
    regulations in meeting the requirements of the Act. We conduct 
    oversight of the implementation of State regulatory programs to ensure 
    that each State is properly administering and enforcing its approved 
    program. The final rule requires that the regulatory authority use the 
    Federal definition of VER whenever it is making determinations for non-
    Federal lands within section 522(e)(1) areas, so both we and the States 
    will use the same decision criteria for all lands within these areas. 
    Hence, there should be no significant difference in the degree of 
    environmental protection regardless of whether we or the States make 
    the VER determination.
        The degree to which States failed to control the environmental 
    impacts of surface coal mining operations or engaged in lax enforcement 
    practices before the approval of permanent State regulatory programs 
    under section 503 of SMCRA is not relevant because, before that time, 
    States did not have to meet Federal standards. In addition, there was 
    no back-up Federal enforcement authority, apart from the brief dual 
    enforcement arrangement of the initial regulatory program under section 
    502 of SMCRA. Furthermore, States and local communities generally value 
    national parks and the other areas protected under section 522(e)(1) of 
    the Act. We have no reason to anticipate that States will be less than 
    conscientious in administering the VER determination provisions of 
    their approved programs.
        Opponents of the alternative that we are adopting also express 
    concern that allowing State regulatory authorities to make VER 
    determinations for non-Federal inholdings within section 522(e)(1) 
    areas, in combination with their authority under former 30 CFR 
    761.12(f) [now redesignated as 30 CFR 761.17(d)] to determine whether 
    surface coal mining operations would adversely affect features 
    (including publicly owned parks) protected under section 522(e)(3), 
    would leave the protection of Federal lands in the hands of State 
    agencies. According to the commenters, these agencies are likely the 
    least knowledgeable of the proper management of those lands and least 
    able to determine whether mining would cause an adverse effect. The 
    commenters argue that the agencies that
    
    [[Page 70798]]
    
    manage the Federal lands are in the best position to determine whether 
    surface coal mining operations will adversely affect those lands, and 
    that only the Federal surface management agency has the expertise to 
    evaluate whether surface coal mining operations will adversely affect 
    the values for which the land was designated as a protected area. The 
    commenters further state that responsibility for VER determinations for 
    private inholdings should reside with the agency that Congress 
    designated to manage Federal lands within the protected area. According 
    to the commenters, Congress would not have extended categorical 
    protection to the areas in section 522(e) only to leave the protection 
    of those lands in the hands of State regulatory authorities.
        We disagree with these comments. First, it is a matter of settled 
    law that the regulatory authority has the responsibility for 
    determining whether a proposed operation would adversely affect a 
    publicly owned park or historic place under section 522(e)(3) of the 
    Act. We adopted this provision as part of 30 CFR 761.12(f), now 
    redesignated as 30 CFR 761.17(d), on September 14, 1983. The National 
    Park Service expressed an interest in revisiting that version of 30 CFR 
    761.12(f) and the section 522(e)(3) adverse effect determination 
    process. However, this rulemaking is not the proper vehicle to do so 
    since we did not propose changes to, or request comment on, former 30 
    CFR 761.12(f).
        Second, as already discussed, we disagree with the commenters' 
    unsubstantiated assertions concerning the capability of State 
    regulatory authorities and the integrity of their decision-making 
    procedures. Under section 503 of SMCRA, we may not approve State 
    programs unless they demonstrate possession of the technical expertise 
    necessary to administer all facets of the regulatory program, including 
    decisions relating to designation of lands as unsuitable for surface 
    coal mining operations under section 522 of the Act. See 30 CFR Parts 
    731 and 732. In addition, State regulatory authorities deal with 
    surface coal mining operations and their impacts on a daily basis, 
    while most agencies with management responsibility for the features 
    protected by section 522(e) rarely encounter such operations. 
    Therefore, we believe that State regulatory authorities will likely 
    have more technical expertise and greater familiarity with surface coal 
    mining operations and their environmental impacts than the agency with 
    jurisdiction over the protected feature.
        Furthermore, the environmental impacts of any potential surface 
    coal mining operations are not germane to determining whether a person 
    has VER. Under the standards in the definition of VER that we are 
    adopting today, this decision is a strictly legal determination in 
    which the potential impacts of mining play no role. The regulatory 
    authority must address the impacts of any proposed surface coal mining 
    operations as part of the permitting process and during inspection and 
    enforcement activities.
        Third, the commenters err in stating that Congress could not have 
    intended State regulatory authorities to determine whether a person has 
    VER for non-Federal lands within section 522(e)(1) areas. Section 
    503(a) of SMCRA clearly provides a mechanism for a State to assume 
    exclusive jurisdiction for the regulation of surface coal mining 
    operations on non-Federal lands within its borders. Congress did not 
    exclude either VER determinations for section 522(e)(1) areas or 
    adverse effect determinations under section 522(e)(3) from the reach of 
    section 503(a).
        For the reasons discussed at length above, we reject the argument 
    advanced by one commenter that section 102(a) of the Act obligates us 
    to reserve the authority to make VER determinations for non-Federal 
    inholdings within section 522(e)(1) areas. Section 102(a) provides that 
    one of the purposes of the Act is ``to protect society and the 
    environment from the adverse effects of surface coal mining 
    operations.'' The commenter asserts that we must have authority over 
    all lands within the boundaries of section 522(e)(1) areas to 
    effectuate this purpose, since OSM authority is the only practical 
    remedy for a wide range of violations of the Act. The commenter claims 
    that reservation of this authority to the Secretary is consistent with 
    the Supreme Court's description of SMCRA's regulatory structure as one 
    of cooperative federalism:
    
        The most that can be said is that the Surface Mining Act 
    establishes a program of cooperative federalism that allows the 
    States, within limits established by federal minimum standards, to 
    enact and administer their own regulatory programs, structured to 
    meet their own particular needs.
    
    Hodel v. VSMRA, 452 U.S. at 289 (1981).
    
        We strongly disagree with these comments. For the reasons discussed 
    above, we believe that States are fully capable of implementing the 
    Act. Commenters provided no evidence to support their inference that 
    States either cannot or will not protect section 522(e)(1) areas to the 
    extent required under SMCRA. The alternative that we have selected is 
    fully consistent with both section 102(a) of SMCRA and the Supreme 
    Court's description of the Act in Hodel v. VSMRA, supra, as 
    establishing a program of cooperative federalism in which the States 
    enact and administer their own regulatory programs within limits 
    established by federal minimum standards. Id. at 289. And the 
    commenters fail to take notice of section 102(g) of the Act, which 
    clearly indicates that Congress envisioned that States would develop 
    and implement ``a program to achieve the purposes of the Act,'' 
    (including the purpose in section 102(a)); section 101(f), in which 
    Congress declares that ``the primary governmental responsibility'' for 
    the regulation of surface coal mining operations ``should rest with the 
    States;'' and section 503(a), in which Congress provides that States 
    may assume ``exclusive jurisdiction'' over the regulation of surface 
    coal mining operations on non-Federal lands.
        To ensure that the interests of the Federal surface management 
    agency and other surface owners are taken into consideration, we have 
    added a provision to 30 CFR 761.16(b)(1) to require that each person 
    seeking a VER determination first notify and request comments from the 
    surface owner. Any comments received must be submitted as part of the 
    request for a VER determination. In addition, under 30 CFR 
    761.16(d)(2), the agency responsible for making the VER determination 
    must independently notify and provide opportunity to comment to both 
    the surface owner and, when applicable, any agency with primary 
    jurisdiction over the values or features that caused the land to come 
    under the protection of 30 CFR 761.11. Under 30 CFR 761.16(e)(1), when 
    making a decision on the request for a VER determination, the agency 
    must consider all comments received.
        We also disagree with the commenters' argument that the National 
    Park Service Organic Act, 16 U.S.C. 1, prevents adoption of the 
    alternative that we selected. The commenters represent this act as 
    requiring the Secretary to ``promote and regulate'' units of the 
    National Park System ``to conserve the scenery and the nature and 
    historic objects and the wild life therein and * * * leave them 
    unimpaired for the enjoyment of future generations.'' However, 16 
    U.S.C. 1 assigns this responsibility to ``the service thus 
    established,'' not the Secretary. Thus, by its own terms, this 
    provision of the Organic Act applies only to the National
    
    [[Page 70799]]
    
    Park Service. It does not extend to other programs and other bureaus 
    within the Department. We believe that if Congress had intended the 
    National Park Service to have concurrent decision-making authority for 
    VER determinations for non-Federal lands within units of the National 
    Park System, it would have amended either the Organic Act or SMCRA to 
    provide the Service with this authority. We acknowledge that, as the 
    commenters note, the courts have held that the Organic Act and related 
    statutes provide the Park Service with broad rulemaking authority. 
    Wilkenson v. Dept. of Interior, 634 F. Supp. 1265, 1278-79 (D. Colo. 
    1986). However, we do not agree with the commenters' argument that the 
    reach of the Organic Act extends beyond the Park Service or that it 
    governs rulemakings that interpret and implement other statutes for 
    other bureaus within the Department.
        We find nothing in the Organic Act that would allow us to override 
    the VER exception provided in section 522(e) of SMCRA or the State 
    primacy provisions of section 503(a) of the Act, which allow States to 
    assume exclusive jurisdiction for the regulation of surface coal mining 
    and reclamation operations on non-Federal lands within their borders. 
    Paragraphs (e)(1) and (e)(3) of section 522 of SMCRA provide special 
    protection for units of the National Park System, but there is no 
    indication that Congress intended to grant either the Federal land 
    management agency or us exclusive or concurrent authority for VER 
    determinations for non-Federal inholdings within those units. Whenever 
    Congress intended other Federal agencies to have a concurring role in 
    decisions made under SMCRA, it specifically provided for this role in 
    the Act. See, for example, section 501(a), which requires the 
    concurrence of the Environmental Protection Agency with respect to 
    certain rulemaking activities, and section 515(f), which requires the 
    concurrence of the U.S. Army Corps of Engineers with respect to 
    regulations governing coal mine waste impoundments. Furthermore, if 
    Congress had intended to subordinate SMCRA to the provisions of the 
    Organic Act, it would have included that statute in section 702(a) of 
    SMCRA, which lists the Federal laws to which SMCRA is subordinate. And, 
    as previously discussed, we find no basis for the assumption that 
    States will be lax in protecting units of the National Park System.
        Several commenters argue that the Property Clause of the U.S. 
    Constitution provides us with the authority to reserve VER 
    determination responsibilities on non-Federal lands within section 
    522(e)(1) areas to the Secretary. The Property Clause (article IV, 
    section 3, clause 2) provides that ``Congress shall have the Power to 
    dispose of and make all needful Rules and Regulations respecting the 
    Territory or other property belonging to the United States.'' We agree 
    with the commenters that there is extensive case law supporting an 
    expansive interpretation of the Property Clause as it relates to the 
    ability of the Federal government to regulate activities on Federal 
    lands. However, SMCRA is not a public lands statute and OSM is not a 
    Federal land management agency. Therefore, we find no basis for 
    reliance upon the Property Clause as authority for rulemaking under 
    SMCRA. As previously discussed, in Hodel v. VSMRA, 452 U.S. at 275-283 
    (1981), and Hodel v. Indiana, 452 U.S. at 321-329 (1981), the Supreme 
    Court upheld Congress' authority to enact SMCRA under the Commerce 
    Clause.
        Furthermore, our authority to regulate non-Federal lands under 
    section 522(e)(1) is not at issue in this rulemaking. That authority is 
    a matter of settled law under the two 1981 Hodel cases cited in the 
    preceding paragraph. The issue is whether, under SMCRA, that authority, 
    including the responsibility for VER determinations on non-Federal 
    lands, is properly delegated to States with primacy. Therefore, the 
    commenters' arguments concerning the meaning of the Property Clause are 
    not helpful or relevant to this rulemaking.
        For the reasons discussed above, we believe that the alternative 
    that we have adopted in the final rule is the alternative that is most 
    consistent with SMCRA's emphasis on State primacy for the regulation of 
    surface coal mining operations on non-Federal lands. See sections 
    101(f), 102(g), and 503(a)) of the Act. As previously discussed, we 
    believe that this alternative will provide an appropriate level of 
    protection to these lands since, under 30 CFR 732.15(a) and 730.5, 
    State regulatory programs must be no less effective than the Federal 
    regulations in meeting the requirements of SMCRA. And, as discussed 
    above and in Part XI of this preamble, we believe that the final rule 
    provides for consistency in VER determinations for these lands by 
    requiring use of the Federal definition of VER in all cases.
        One commenter argued that section 102(m) of SMCRA obligates us to 
    adopt an alternative that reserves to the Secretary the right to make 
    VER determinations on non-Federal inholdings within section 522(e)(1) 
    areas. The paragraph that the commenter cites provides that one of the 
    purposes of the Act is to ``wherever necessary, exercise the full reach 
    of Federal constitutional powers to insure the protection of the public 
    interest through effective control of surface coal mining operations.'' 
    The commenter noted that under United States v. Vogler, 859 F.2d 638, 
    641 (9th Cir. 1988), cert. denied, 488 U.S. 1006 (1989), those 
    constitutional powers include the power to protect public lands from 
    ``trespass and injury.'' As discussed above, we believe that States are 
    fully capable of protecting the public interest to the extent required 
    by SMCRA. And we believe that the alternative that we have adopted in 
    the final rule is the alternative that is most consistent with SMCRA's 
    emphasis on State primacy for the regulation of surface coal mining 
    operations on non-Federal lands. See sections 101(f), 102(g), and 
    503(a)) of the Act. Therefore, we do not agree that section 102(m) of 
    SMCRA requires adoption of the alternative favored by the commenter.
        One commenter argued that the decisions in PSMRL II, Round I, No. 
    79-1144 (D.D.C. July 6, 1984), slip op. at 11-15, and PSMRL II, Round 
    III--VER, 22 Env't Rep. Cas. (BNA) at 1566 (1985), compel adoption of 
    an ``affected by'' standard. We disagree.
        PSMRL II, Round I, supra, has no applicability here because the 
    issue that was before the court concerned Federal lands. In deciding 
    that case, the court struck down 30 CFR 740.11(a)(3) (1983) only to the 
    extent that that rule did not apply to the Federal lands program to all 
    Federal lands. Specifically, the court held that, with respect to the 
    jurisdiction of the Federal lands program, the Secretary is ``powerless 
    to limit'' the statutory definition of ``surface coal mining 
    operations'' in section 701(28) and that, ``if surface mining 
    activities take place on Federal lands, the Secretary is powerless to 
    exclude them from the Federal lands program.'' PSMRL II, Round I, 
    supra, at 14-15. The court rejected the Secretary's argument, as stated 
    in the preamble to the 1983 rulemaking, that,
    
    because of the interaction of the State primacy provision, section 
    503 of the Act, with section 523 of the Act, the Federal lands 
    program can be interpreted to exclude State or privately-owned 
    surface overlying Federally-owned coal where the operation will not 
    involve mining the Federally-owned coal and where there will be no 
    disturbance of the Federally-owned estate.
    
    48 FR 6921, February 16, 1983.
    
        Nothing in the court's decision would compel extension of the 
    Federal lands program to lands in which there is no
    
    [[Page 70800]]
    
    Federal property interest, i.e., lands in which both the surface and 
    mineral estates are entirely in non-Federal ownership. There is no 
    indication that the court contemplated using the ``affected by'' test 
    in section 701(28) to extend the Federal lands program to lands in 
    which there is no Federal property interest. The court noted that 
    ``[w]hen Congress discussed state administration of the Act, it 
    virtually always referred to non-federal lands.'' PSMRL II, Round I, 
    supra, at 14. Furthermore, when we repromulgated 30 CFR 740.11(a) in 
    1990 to address the judicial remand of the 1983 version of this rule in 
    PSMRL II, Round I, supra, we rejected a commenter's argument that the 
    court had explicitly endorsed an ``affected by'' test to determine the 
    jurisdiction of the Federal lands program. In declining to adopt an 
    ``affected by'' standard, we stated that:
    
        An ``affected by'' test would be very difficult to administer. A 
    determination that the Federal interest would or would not be 
    affected would have to be made on a case-by-case basis, and could be 
    subject to different interpretations.
    
    55 FR 94001, March 13, 1990.
    
        In PSMRL II, Round III-VER, 22 Env't Rep. Cas. (BNA) at 1566 
    (1985), the other decision cited by the commenters as supporting 
    adoption of an ``affected by'' standard, the court did not review the 
    merits of the ``affected by'' standard suggested in oral argument by 
    Government counsel. Hence, the court's mention of the Government's 
    representation at oral argument concerning the applicability of an 
    ``affected by'' standard is purely dictum. Furthermore, the ``affected 
    by'' standard outlined in the Government's oral arguments as quoted in 
    the court's decision refers to section 701(28)(B) of the Act, which 
    specifies that ``all lands affected by the construction of new roads or 
    the improvement or use of existing roads to gain access to the site and 
    for haulage'' are included within the definition of surface coal mining 
    operations. Nothing in this definition differentiates between Federal 
    and non-Federal lands or addresses which agency is responsible for 
    regulating surface coal mining operations on those lands. Nor does it 
    suggest use of an ``affected by'' standard to extend the scope of the 
    Federal lands program to include non-Federal lands within section 
    522(e)(1) areas.
        Therefore, we find no merit to the commenters' arguments in favor 
    of an ``affected by'' standard. In addition, we do not believe that 
    this standard is consistent with section 503(a) of SMCRA, which 
    provides for exclusive State jurisdiction over the regulation of 
    surface coal mining operations on non-Federal lands.
        Under the final rules adopted today, we retain exclusive authority 
    for making VER determinations for Federal lands within the boundaries 
    of the areas listed in 30 CFR 761.11(a) and for Federal lands within 
    any national forest [the lands listed in 30 CFR 761.11(b)]. The 
    regulatory authority has sole responsibility for VER determinations for 
    all non-Federal lands, regardless of whether we or the State are the 
    regulatory authority. If a State has a regulatory program approved 
    under section 503 of SMCRA, but does not have a Federal lands 
    cooperative agreement pursuant to 30 CFR Part 745, we are responsible 
    for making VER determinations under the State program counterparts to 
    30 CFR 761.11(c) through (g) for Federal lands. In States with a 
    Federal lands cooperative agreement, the State regulatory authority is 
    responsible for making VER determinations under the State program 
    counterparts to 30 CFR 761.11(c) through (g) for Federal lands not 
    listed in 30 CFR 761.11(a) or (b), unless the cooperative agreement 
    specifies otherwise.
        One commenter opposed any rule that would require that we make VER 
    determinations for Federal lands on which the State is otherwise the 
    regulatory authority under a cooperative agreement approved under 30 
    CFR Part 745 and section 523(c) of the Act. In the commenter's view, 
    section 523(c) grants States with cooperative agreements exclusive 
    authority to regulate surface coal mining and reclamation operations on 
    Federal lands, except as specifically provided to the contrary in the 
    Act. We disagree with the commenter's interpretation of the Act. While 
    section 523(c) specifies certain functions that the Secretary may not 
    delegate to a State, we find nothing in this section that expressly 
    requires delegation of all other, unlisted functions. This 
    interpretation forms the basis for the regulations governing 
    cooperative agreements in 30 CFR part 745.
    
    XI. Sections 740.11 and 761.14(a): Which VER Definition (State or 
    Federal) Applies to Lands Listed in Section 522(e)(1) and (e)(2) of 
    the Act?
    
        As proposed, the final rule modifies 30 CFR 740.11 by revising 
    paragraph (a) and adding paragraph (g) to specify that the Federal 
    definition of VER will apply to all VER determinations for the lands 
    listed in 30 CFR 761.11 (a) and (b), regardless of whether we or the 
    State are responsible for making the determination. Application of the 
    Federal definition will ensure that requests for VER determinations 
    involving lands of national interest and importance, as listed in 30 
    CFR 761.11 (a) and (b) and section 522(e)(1) and (2) of the Act, are 
    evaluated on the basis of the same criteria.
        The final rules differ from the 1990 version of 30 CFR 740.11(a), 
    which required use of the State program definition in place of the 
    Federal definition. However, the new rules differ from the 1990 rules 
    only with respect to the lands listed in 30 CFR 761.11 (a) and (b). We 
    will continue to use the approved State program definition when making 
    VER determinations for Federal lands under the State program 
    counterparts to 30 CFR 761.11 (c) through (g). Similarly, in States 
    that assume responsibility for VER determinations under a Federal lands 
    cooperative agreement, the State regulatory authority will continue to 
    use the State program definition when making VER determinations under 
    the State program counterparts to 30 CFR 761.11 (c) through (g) for 
    Federal lands not listed in 30 CFR 761.11 (a) or (b).
        We received few comments on this issue, but those persons who did 
    comment generally supported the approach adopted in the final rule. One 
    commenter opposed the change, arguing that all existing State program 
    VER definitions are illegal or improper and that we must require that 
    States amend their programs to adopt an ownership and authority 
    standard. As previously discussed, we do not agree that the Act 
    mandates adoption of an ownership and authority standard for VER under 
    section 522(e).
        In addition, we disagree with the commenter's assertion that, 
    because the court remanded the 1979 and 1983 Federal definitions of 
    VER, State VER definitions based on those Federal definitions are 
    illegal or improper. We are not aware of any ruling of this nature that 
    is still in effect. The commenter may be referring to the initial 
    Belville decision in Ohio, but, in September 1992, the court modified 
    its order by vacating the portion of its ruling concerning the validity 
    of State program definitions of VER in States other than Ohio.
    
    XII. What Other Changes Are We Making in the Federal Lands Program 
    Regulations in 30 CFR Parts 740 and 745?
    
        We have revised 30 CFR 740.4(a)(5) and 30 CFR 745.13(p) to 
    incorporate references to the provisions of 30 CFR part 761 that 
    correspond to section 522(e) of SMCRA. In addition, to conform with the 
    language of section
    
    [[Page 70801]]
    
    522(e) of the Act, which refers only to surface coal mining operations, 
    we are replacing the term ``surface coal mining and reclamation 
    operations'' in 30 CFR 740.4(a)(4) and 745.13(o) with ``surface coal 
    mining operations.'' This change is consistent with the policy 
    established in the preamble to a final rule published on April 5, 1989 
    (54 FR 13814). In that preamble, we specify that SMCRA does not require 
    a permit or other regulatory authority approval as a prerequisite for 
    conducting reclamation work alone. In other words, this change in the 
    terminology of the final rule clarifies that the prohibitions and 
    restrictions of 30 CFR 761.11 and section 522(e) do not apply to 
    reclamation activities such as the restoration of abandoned mine lands 
    and bond forfeiture sites.
        Some commenters objected to this clarification, stating that 
    reclamation work performed on abandoned mine lands or bond forfeiture 
    sites must be done in accordance with plans approved by the abandoned 
    mine land reclamation agency or the regulatory authority. We agree that 
    reclamation work performed under a contract executed by the abandoned 
    mine land reclamation agency under Title IV of the Act must adhere to 
    contract plans and specifications. Similarly, we agree that any bond 
    forfeiture reclamation activity conducted under 30 CFR 800.50 or its 
    State counterpart must adhere to plans approved by the regulatory 
    authority. However, neither the reclamation of abandoned mine lands nor 
    the reclamation of bond forfeiture sites is a surface coal mining 
    operation as 30 CFR 700.5 and section 701(28) of the Act define that 
    term. Therefore, as discussed at 54 FR 13814-18 (April 5, 1989), there 
    is no requirement for a permit for these reclamation activities. For 
    similar reasons, there is no requirement that these reclamation 
    activities comply with 30 CFR Part 761 or section 522(e) of the Act, 
    which apply only to surface coal mining operations. Also, third parties 
    that rely upon funds other than Title IV grants or bond forfeiture 
    proceeds may perform reclamation work without any approval or 
    involvement by the regulatory authority or the abandoned mine land 
    reclamation agency. Reclamation activities of this nature are beyond 
    the scope of SMCRA.
        The commenters also sought clarification that this change would not 
    exempt reclamation work on illegally mined sites from the supervision 
    and approval of the regulatory authority. We agree that the regulatory 
    authority must monitor reclamation work performed by or for the illegal 
    miner in response to an enforcement action. Nothing in this rule alters 
    that responsibility. However, for the reasons discussed in the 
    preceding paragraph, other parties may reclaim the site without the 
    approval or involvement of the regulatory authority.
    
    XIII. Why Are We Removing the Definition of ``Surface Coal Mining 
    Operations Which Exist on the Date of Enactment'' From 30 CFR 
    761.5?
    
        For the reasons discussed in Part XVI of this preamble, we are 
    revising 30 CFR 761.12 to clarify that the statutory exception for 
    existing operations in section 522(e) of the Act applies to all surface 
    coal mining operations in existence before the land comes under the 
    protection of section 522(e) and 30 CFR 761.11. Under the previous 
    rule, this exception applied only to operations in existence on the 
    date of enactment of SMCRA. As a result of this change, the term 
    ``surface coal mining operations which exist on the date of enactment'' 
    no longer appears in the final rule or elsewhere in part 761. 
    Therefore, we are revising 30 CFR 761.5 to delete the definition of 
    this now-obsolete term.
        One commenter opposed the deletion as contrary to the express 
    language of the Act, based on the mistaken impression that we were 
    eliminating the exception for existing operations in section 522(e) and 
    merging it with the definition of VER. In reality, the final rule 
    maintains separate exceptions for both VER and existing operations, as 
    does the Act. Any operation that would qualify for the exception for 
    existing operations under the Act or the previous rules would continue 
    to qualify for this exception under the revised rules.
    
    XIV. Why Are We Adding Definitions of ``We'' and ``You'' and Their 
    Grammatical Forms to 30 CFR 761.5?
    
        We are adding definitions of ``we'' and ``you'' and their 
    grammatical forms because we have revised the other sections of part 
    761 to reflect plain language principles, one of which requires the use 
    of ``we'' and ``you'' whenever practicable. ``We,'' ``us,'' and ``our'' 
    refer to the Office of Surface Mining Reclamation and Enforcement. 
    ``You'' and ``your'' refer to a person who claims or seeks to obtain an 
    exception or waiver authorized by 30 CFR 761.11 and section 522(e) of 
    the Act. In all other cases, we specifically identify the person or 
    agency to whom we are referring.
    
    XV. How Have We Revised 30 CFR 761.11, Which Is the Regulatory 
    Counterpart to the Prohibitions and Limitations of Section 522(e) 
    of the Act?
    
        We have reorganized and revised this section to incorporate plain 
    language principles, improve clarity, maintain consistency with 
    revisions to other sections of 30 CFR Part 761, and add informational 
    cross-references to 30 CFR 761.12 through 761.17 as appropriate. The 
    provisions concerning the exception for existing operations, which 
    originally appeared in the introductory language of this part and which 
    we proposed to revise and recodify as 30 CFR 761.11(b), now appear in 
    revised form in 30 CFR 761.12. (See part XVI of this preamble.) Except 
    for the removal of former paragraph (h) (see the discussion in part 
    XVII of this preamble), there are no other substantive changes from the 
    1983 version of this section.
    
    XVI. Section 761.12: Which Operations Qualify for the Exception for 
    Existing Operations?
    
        The exception for existing operations formerly appeared in the 
    introductory language of 30 CFR 761.11. The 1997 proposed rule would 
    have revised and recodified the exception as 30 CFR 761.11(b). To 
    better adhere to plain language principles, the final rule recodifies 
    this exception as a separate section, 30 CFR 761.12, and clearly 
    distinguishes between initial program operations and permanent program 
    operations. The exception for existing operations subject to the 
    permanent regulatory program appears as paragraph (a) of that section, 
    while the exception for existing operations subject to the initial 
    regulatory program appears in paragraph (b) of that section.
        Paragraph (a) of the final rule provides that the prohibitions of 
    30 CFR 761.11 do not apply to surface coal mining operations for which 
    a valid permanent regulatory program permit exists when the land comes 
    under the protection of 30 CFR 761.11 or section 522(e) of the Act. The 
    rule further clarifies that this exception applies only to lands within 
    the permit area as it exists when the land comes under the protection 
    of 30 CFR 761.11.
        To address situations in existence before completion of the 
    transition between the initial and permanent regulatory programs, 
    paragraph (b) of the final rule further specifies that, with respect to 
    operations subject to subchapter B of 30 CFR chapter VII, the exception 
    applies to all lands upon which validly authorized surface coal mining 
    operations exist when the land comes under the protection of section 
    522(e) of the Act or 30 CFR 761.11. This provision has no prospective 
    applicability apart from one remaining active initial program mine on 
    Indian lands.
    
    [[Page 70802]]
    
        As proposed, the exception for existing operations in the final 
    rule incorporates paragraph (d)(1) of the 1983 definition of VER. This 
    paragraph provided that validly authorized surface coal mining 
    operations in existence on the date that land comes under the 
    protection of section 522(e) after August 3, 1977, automatically have 
    VER. For this reason and the reasons discussed below and in part VII.F. 
    of this preamble, we believe that this former VER standard more 
    properly resides with the exception for existing operations.
        As stated in the preamble to the proposed rule, illegal 
    (``wildcat'') operations and operations for which the permit has 
    expired or been revoked do not qualify as existing operations under 30 
    CFR 761.12(b). Because no valid permit exists in those situations, 
    there are no validly authorized surface coal mining operations. 
    Similarly, the exception does not apply to sites for which the 
    regulatory authority has terminated jurisdiction under 30 CFR 
    700.11(d)(1) or its State program counterpart.
        On-site activity or physical disturbance of the protected land is 
    not a prerequisite for the exception. This interpretation is consistent 
    with the underlying language in section 522(e), which excludes surface 
    coal mining operations ``which exist on the date of enactment of this 
    Act'' from the prohibitions of that section. Nothing in the Act or the 
    term ``exist'' requires on-site activity or physical disturbance as 
    opposed to legal existence. Therefore, the final rule recognizes any 
    validly authorized operation as eligible for the exception for existing 
    operations regardless of whether the permittee has actually begun to 
    conduct surface coal mining operations on the site.
        The exception for existing operations does not extend to abandoned 
    or reclaimed operations. As discussed in part VII.C.2. of this 
    preamble, in enacting section 522(e), Congress intended to prohibit new 
    surface coal mining operations on the lands listed in that section, 
    with certain exceptions. We believe that both that intent and the 
    express language of section 522(e) extends to the prohibition of new 
    operations on lands upon which surface coal mining operations 
    permanently ceased before the lands came under the protection of 
    section 522(e). Any person seeking to reactivate an abandoned mine or 
    facility or to remine an abandoned or reclaimed site must comply with 
    the prohibitions and limitations of section 522(e) and 30 CFR 761.11 as 
    a prerequisite for obtaining a permanent program permit. Allowing 
    abandoned or reclaimed operations to qualify for the exception for 
    existing operations would be inconsistent with both the purpose of 
    section 522(e) and the accepted meaning of ``existing.''
        The proposed rule would have limited the scope of the exception for 
    existing operations to lands for which the permittee or operator had 
    the right under State property law, as demonstrated in accordance with 
    30 CFR 778.15, to enter and conduct surface coal mining operations as 
    of the date that the land in question came under the protection of 30 
    CFR 761.11 or section 522(e) of SMCRA. By limiting the exception for 
    existing operations in this fashion, the proposed rule effectively 
    required that the permittee seek and obtain a VER determination before 
    initiating surface coal mining operations on any lands within the 
    permit area for which no right of entry had been obtained before the 
    land came under the protection of section 522(e).
        After evaluating the comments received, we have decided not to 
    include this provision in the final rule. In implementing other 
    requirements of SMCRA, we consider lands within the permit area for 
    which the permittee has not yet obtained right of entry to be distinct 
    from other lands within the permit area only in one respect: the 
    permittee may not disturb those lands before obtaining right of entry. 
    After obtaining right of entry, the permittee may enter those lands and 
    conduct surface coal mining operations to the extent authorized under 
    the permit.
        We anticipate that this change from the proposed rule will have 
    little practical effect in terms of the actual right to mine. The final 
    rule specifies that the exception for existing operations includes all 
    lands covered by an approved permanent program permit at the time that 
    the lands come under the protection of 30 CFR 761.11. However, nothing 
    in SMCRA, its implementing regulations, or the permit authorizes the 
    permittee to disturb lands within the permit area before obtaining 
    proper right of entry. Therefore, if the permittee is unable to procure 
    right of entry for the lands within the permit area covered by the 
    exception for existing operations, there will be no surface coal mining 
    operations on those lands.
        The final rule that we are adopting today is consistent with 
    paragraph (d)(1) of the 1983 VER definition, its preamble, and the 
    rationale used by the courts in upholding the concept of ``continually 
    created VER.'' In particular, the 1983 preamble states that paragraph 
    (d)(1) of the 1983 definition was intended to prevent the disruption of 
    mining or deprivation of the right to mine after the permittee made the 
    substantial investments required to obtain a permit. By way of 
    explanation, the preamble stated that to do otherwise would be totally 
    inconsistent with the framework of protection that SMCRA provides to 
    both permittees and citizens:
    
        Without the protection provided by this provision, it would be 
    possible, for instance, for a person who objected to a mining 
    operation to move a mobile home to the edge of the property 
    adjoining a mine, and occupy it, thereby forcing the operator to 
    cease all operations within 300 feet of this occupied dwelling. OSM 
    does not believe that this is the intended result of section 522(e) 
    of the Act. Congress provided the public ample opportunity to review 
    and make objections to any proposed mining operation through the 
    permitting process. The regulatory authority is required to seek and 
    consider the views of the public [before] it issues or denies a 
    permit. To allow any person the opportunity to take extraordinary 
    means to disrupt mining or deprive the operator of a right to mine 
    after the operator has made the substantial investments required to 
    obtain a permit and begin operations is totally inconsistent with 
    the framework of protection the Act gives to both operators and 
    citizens.
    
    48 FR 41315, September 14, 1983.
        We relied upon the same rationale to develop the 1997 proposed rule 
    and this final rule.
        In upholding paragraph (d)(1) of the 1983 definition, the U.S. 
    Court of Appeals for the District of Columbia Circuit relied primarily 
    on language in the legislative history of section 522 indicating that 
    Congress intended to allow the continuance of mines already in 
    existence at the time that land is determined to be unsuitable for 
    surface coal mining operations. The court held that this principle 
    ``should apply equally to mines in existence as of August 3, 1977, or 
    to mines subsequently started on lands which have permits approved for 
    mining.'' NWF v. Hodel, 839 F.2d at 750 (1988). The court ruled that 
    the operative principle in determining whether an operation is exempt 
    from the section 522(e) prohibitions is whether it had been ``lawfully 
    established'' before the land came under the protection of section 
    522(e). Id. at 750-51. Although the court did not fully explain the 
    meaning of ``lawfully established,'' we believe that its 
    characterization of industry arguments is significant because it 
    ultimately ruled in favor of industry:
    
        Industry, supporting the district court, argues that * * * once 
    a permit has been validly issued the permit area is insulated from 
    subsequent unsuitability designations.
    
    
    [[Page 70803]]
    
    
    Id. at 750.
        Furthermore, once a permit is issued, there is no legal impediment 
    to initiating surface coal mining operations on the permit area, apart 
    from any restrictions imposed as permit conditions.
        Therefore, the final rule considers an operation to be lawfully 
    established upon issuance of a permanent program permit. This approach 
    is consistent with 30 CFR 774.13, which provides that the regulatory 
    authority cannot summarily revise or revoke an approved permanent 
    program permit. Therefore, when lands covered by an approved permanent 
    program permit come under the protection of 30 CFR 761.11 and section 
    522(e) after permit issuance, the permittee has the right to continue 
    to operate on those lands under the exception for existing operations 
    unless the regulatory authority orders the permittee to revise the 
    permit to remove those lands from the permit area in accordance with 
    the procedures and criteria of 30 CFR 774.13. A person who believes 
    that a permit has been improperly issued because a protected feature 
    came into existence before rather than after permit issuance has the 
    option of either filing a timely challenge to approval of the permit 
    application or submitting a complaint to the regulatory authority in 
    accordance with the State program counterpart to 30 CFR 842.12 or to us 
    under 30 CFR 842.12. If the permit is ultimately found to be defective, 
    the regulatory authority must require that the permittee revise the 
    permit in accordance with 30 CFR 774.13.
        With respect to initial program operations (operations subject to 
    Subchapter B of 30 CFR Chapter VII), the exception for existing 
    operations includes all lands covered by whatever permit existed when 
    the land came under the protection of section 522(e) or 30 CFR 761.11. 
    However, except for one operation on Indian lands, we and the State 
    regulatory authorities have completed the repermitting of initial 
    program operations as required by 30 CFR 773.11 and section 502(d) of 
    the Act. All initial program surface coal mining and reclamation 
    operations on non-Indian lands that remain subject to the initial 
    regulatory program are now abandoned, reclaimed, or in the process of 
    reclamation. Under 30 CFR 773.11(a), no further coal removal or 
    additional disturbance of these sites for purposes of conducting 
    surface coal mining operations is permissible unless the person first 
    obtains a permanent program permit under Subchapter G of 30 CFR Title 
    VII or its State program counterpart.
        In addition, all States with the potential for coal production in 
    the foreseeable future now have either a permanent State regulatory 
    program approved under section 503 of SMCRA or a Federal regulatory 
    program approved under section 504 of SMCRA. Therefore, we do not 
    anticipate that there will be any new surface coal mining operations 
    under the initial regulatory program. For all practical purposes, the 
    rules that we are adopting today will be applied only to operations 
    with permanent program permits.
        Some commenters argued that by its very terms, the phrase 
    ``existing operation'' applies only to mines for which at least some 
    site preparation work has occurred. For the reasons discussed above, we 
    do not agree.
        Some commenters argued that the exception for existing operations 
    should apply to all lands that the permittee contemplates mining as 
    part of the operation. Under this rationale, the exception would not be 
    restricted to lands under permit before the land comes under the 
    protection of section 522(e) and 30 CFR 761.11. We believe that such an 
    expansive interpretation of the exception for existing operations runs 
    contrary to the purpose for which Congress enacted section 522(e). To 
    foreclose the possibility of this interpretation, we have added 
    language to 30 CFR 761.12(a) to clarify that the exception applies only 
    to lands under permit at the time that the land comes under the 
    protection of 30 CFR 761.11.
    
    XVII. Why Are We Removing the Prohibitions in Former 30 CFR 
    761.11(h)?
    
        As proposed, we are removing former 30 CFR 761.11(h), which 
    provided that no coal exploration or surface coal mining operations 
    would be licensed or permitted on Federal lands within the National 
    Park System, the National Wildlife Refuge System, the National System 
    of Trails, the National Wilderness Preservation System, the Wild and 
    Scenic Rivers System, or National Recreation Areas unless specifically 
    authorized by acts of Congress. We published this provision on 
    September 14, 1983 (48 FR 41349), in response to numerous comments from 
    persons concerned that mining or drilling would occur in national parks 
    and other areas protected under section 522(e)(1) of the Act.
        Industry challenged the rule on both procedural and substantive 
    grounds. Upon review, the court remanded the rule to the Secretary 
    because it found that he had failed to provide adequate notice and 
    opportunity for comment under the Administrative Procedure Act, 5 
    U.S.C. 553. The court also noted that there appeared to be no rational 
    basis for distinguishing between Federal and non-Federal lands in this 
    context since section 522(e)(1) of the Act prohibits surface coal 
    mining operations on any lands within the statutorily protected areas 
    listed in 30 CFR 761.11(h). See PSMRL II, Round III--VER, 22 Env't Rep. 
    Cas. (BNA) at 1565 (1985).
        We subsequently suspended 30 CFR 761.11(h) to comply with the 
    court's order. See 51 FR 41952, 41956, November 20, 1986.
        On September 22, 1988, the Department of the Interior issued a 
    policy statement explaining the actions that the Department would take 
    to prevent surface coal mining operations on lands protected under 
    section 522(e)(1) of the Act. The policy statement commits the 
    Department, subject to appropriation, to use available authorities 
    (including exchange, negotiated purchase and condemnation) to seek to 
    acquire mining rights within the areas listed in section 522(e)(1) 
    whenever a person attempts to exercise VER. Unlike 30 CFR 761.11(h), 
    the policy applies to all lands within the areas listed in section 
    522(e)(1), not just to Federal lands.
        We published this policy statement in the Federal Register on 
    December 27, 1988 (53 FR 52384), in conjunction with a previous 
    proposed rule concerning VER. The policy remains in effect even though 
    we subsequently withdrew the proposed rule on July 21, 1989.
        Contrary to the expectations of some commenters on our 1997 
    proposed rule, the policy statement will not, and is not intended to, 
    provide protection equivalent to that afforded by former 30 CFR 
    761.11(h). As the court noted in its decision remanding paragraph (h), 
    ``an absolute proscription on any mining, permitting, licensing or 
    exploration within the 522(e)(1) protected areas might run directly 
    contrary to the statute's language that such proscriptions are subject 
    to VER.'' PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1565 
    (1985). Furthermore, section 522(e) only applies to surface coal mining 
    operations, which section 701(28) of the Act specifically defines as 
    excluding coal exploration.
        Therefore, we believe that it would be inappropriate to 
    repromulgate the prohibitions in paragraph (h). The 1988 policy 
    statement expresses the Secretary's intent to acquire privately held 
    coal interests in areas of national significance to the extent 
    financial or other resources are available to do so. Any further 
    commitment would, in
    
    [[Page 70804]]
    
    most cases, exceed the Secretary's legal authority since most land 
    acquisition actions are subject to congressional authorization and 
    appropriation.
        Some commenters questioned the utility of the policy since the 
    Department's discretionary funds for land acquisition are extremely 
    limited, there is little Federal land in the East available for 
    exchange, and the Federal Land Policy and Management Act places severe 
    constraints on the exchange of Federal coal for non-Federal coal across 
    State lines. The commenters also noted that most Federal lands in the 
    East are in the National Forest System, which is under the jurisdiction 
    of the Department of Agriculture and thus not available to the 
    Secretary for exchange purposes. We acknowledge these limitations. If 
    adequate funds or suitable exchange lands are not available, nothing in 
    the policy obligates the Secretary to acquire lands for which a person 
    has demonstrated VER.
        Other commenters argued that the policy should be extended to cover 
    all lands protected under section 522(e), not just those areas listed 
    in paragraph (e)(1). We understand the commenters' interest in 
    protecting buffer zones for homes, schools, roads, and other features 
    listed in paragraphs (e)(3) through (e)(5) of section 522 of the Act. 
    However, the Secretary has neither the resources nor the authority to 
    acquire these lands without specific congressional authorization or 
    appropriation. Furthermore, in publishing the proposed rule, we did not 
    seek comments on the policy or propose any changes to the policy. 
    Therefore, both the policy and comments suggesting revision of the 
    policy are outside the scope of this rulemaking.
    
    XVIII. Why Did We Reorganize Former 30 CFR 761.12 as Secs. 761.13 
    Through 761.17 and 762.14?
    
        Former Sec. 761.12 included a number of mostly unrelated provisions 
    under the heading ``Procedures.'' Plain language principles encourage 
    the use of multiple short sections with informative headings that 
    address a single topic in preference to long, less focused sections 
    with headings that convey relatively little information about their 
    contents. We also determined that former 30 CFR 761.12(g), which 
    addressed the eligibility of lands listed in section 522(e) for 
    designation as unsuitable for surface coal mining operations under 30 
    CFR Parts 762, 764, and 769, would be better placed in 30 CFR Part 762, 
    which contains the criteria for designating lands as unsuitable for 
    mining pursuant to those parts of our regulations.
        Therefore, we are reorganizing and recodifying former Sec. 761.12 
    as shown in the following table:
    
    ------------------------------------------------------------------------
                 Previous  citation                     New  citation
    ------------------------------------------------------------------------
    761.12(a)..................................  761.17(a)
    761.12(b)(1)...............................  761.17(b)
    761.12(b)(2)...............................  761.17(c)
    761.12(c)..................................  761.13
    761.12(d)..................................  761.14
    761.12(e)..................................  761.15
    761.12(f)..................................  761.17(d)
    761.12(g)..................................  762.14
    761.12(h)..................................  761.16(f)
    ------------------------------------------------------------------------
    
        In addition, we are consolidating all procedural requirements 
    related to VER determinations into a new Sec. 761.16 and expanding 
    those requirements to cover all steps of the VER determination process. 
    The portion of former 30 CFR 761.12(b)(2) that pertains to notification 
    of the National Park Service and the U.S. Fish and Wildlife Service no 
    longer appears as a separate requirement because the general 
    notification requirements of new 30 CFR 761.16(d) subsume this 
    provision.
        As proposed, we are removing the portion of former 30 CFR 761.12(h) 
    that provided for administrative appeals of existing operation 
    determinations. The exception for existing operations in 30 CFR 761.12 
    does not require any affirmative action or decision on the part of 
    either the permittee or the regulatory authority. As explained in Part 
    XVI of this preamble, the exception for existing operations merely 
    allows an already permitted operation to continue operating within the 
    permit boundaries in existence at the time that the land comes under 
    the protection of section 522(e) and 30 CFR 761.11. Hence, there is no 
    action or decision to appeal.
    
    XIX. Section 761.13: How Have We Revised the Procedural 
    Requirements for Compatibility Findings for Surface Coal Mining 
    Operations on Federal Lands in National Forests?
    
        This new section revises and replaces former 30 CFR 761.12(c). No 
    commenters opposed the changes that we proposed. Nor did any commenter 
    suggest revisions to the proposed rule.
        Paragraph (a) of the final rule provides that, if you intend to 
    rely upon the compatibility exception in 30 CFR 761.11(b) to conduct 
    surface coal mining operations on Federal lands in national forests, 
    you must request that we obtain the Secretarial findings required by 30 
    CFR 761.11(b). This paragraph does not differ substantively from the 
    corresponding sentence in the proposed rule.
        Paragraph (b) of the final rule clarifies that you may submit a 
    request for these findings before you prepare and submit an application 
    for a permit or boundary revision. As we noted in the preamble to the 
    proposed rule, our experience has shown that evaluation of the entire 
    permit application is not essential to preparation of the requested 
    findings. In addition, this clarification is consistent with 43 CFR 
    4.1391(b)(1), which provides for administrative review of compatibility 
    findings that are made independently of a decision on a permit 
    application.
        If your request is part of a permit application, that application 
    will usually include all the information that we and the U.S. Forest 
    Service need to determine compatibility.
        However, if you seek a compatibility finding before preparing and 
    submitting a permit application, we will not have access to the 
    information normally included in the application. Therefore, paragraph 
    (b) of the final rule also specifies that, if you submit a request 
    independently of a permit application, your request must include 
    sufficiently comprehensive information about the proposed operation to 
    enable the U.S. Forest Service and us to properly evaluate the request 
    and prepare adequately documented determinations and findings.
        To provide better guidance as to the meaning of this requirement, 
    the final rule fleshes out the proposed rule, which required 
    ``information about the nature and location of the proposed surface 
    coal mining operations,'' by requiring that you submit a map of the 
    proposed operation and an explanation of how the proposed operation 
    would not damage the values listed in the definition of ``significant 
    recreational, timber, economic, or other values incompatible with 
    surface coal mining operations' in 30 CFR 761.5. (Under 30 CFR 
    761.11(b), one of the findings that the Secretary must make before the 
    regulatory authority may approve a permit application is that there are 
    no significant recreational, timber, economic, or other values that may 
    be incompatible with the proposed surface coal mining operations.) 
    Finally, paragraph (b) of the final rule specifies that we may request 
    that you provide any additional information that we determine is needed 
    to make the required findings. We believe that our authority to request 
    this information is inherent in our responsibility to make the 
    findings.
        Paragraph (c) of the final rule provides that, when a proposed 
    surface
    
    [[Page 70805]]
    
    coal mining operation or a proposed boundary revision for an existing 
    surface coal mining operation includes Federal lands within a national 
    forest, the regulatory authority may not issue the permit or approve 
    the boundary revision before the Secretary makes the findings required 
    by 30 CFR 761.11(b). This paragraph does not differ substantively from 
    the corresponding sentence in the proposed rule. As proposed, the final 
    rule clarifies that this provision applies to all types of permit 
    applications that involve the addition of new acreage, including 
    incidental boundary revisions.
    
    XX. How Do 30 CFR 761.14 and 761.15, Which Concern Waivers for 
    Buffer Zones for Public Roads and Occupied Dwellings, Differ From 
    Former 30 CFR 761.12(d) and (e)?
    
        Sections 761.14 and 761.15 establish procedures for obtaining a 
    waiver from the prohibitions of 30 CFR 761.11(d) and (e) concerning 
    public roads and occupied dwellings. We did not propose any substantive 
    revisions to these rules, which previously appeared in 30 CFR 761.12(d) 
    and (e). However, one commenter expressed a general concern that the 
    proposed rule and its preamble did not clearly specify that the VER 
    exception, the exception for existing operations, and the variance and 
    waiver provisions of 30 CFR 761.11(c) through (e) operate independently 
    of each other; i.e., that a person who qualifies for one type of 
    exception or waiver does not need to comply with the requirements for 
    other types of exceptions or waivers. To address this concern, we have 
    added a new paragraph (a) to 30 CFR 761.14 and 761.15 to clarify that a 
    person need not obtain a waiver or variance under those sections if the 
    VER exception or the exception for existing operations applies. Section 
    761.14(a)(3) also recognizes that, under the conditions specified in 30 
    CFR 761.11(d)(2), a person need not obtain a waiver or variance under 
    30 CFR 761.14(b) to use or construct an access or haul road that joins 
    a public road. Similarly, 30 CFR 761.15(a)(3) recognizes that, 
    consistent with 30 CFR 761.11(e)(2), a person need not obtain a waiver 
    or variance under 30 CFR 761.15(b) to use or construct an access or 
    haul road that joins a public road on the opposite side of the public 
    road from an occupied dwelling.
        There are no other substantive changes from the previous rules. We 
    have made some organizational and editorial changes to more closely 
    adhere to plain language principles and to reflect the addition of the 
    term ``you'' to the definitions in 30 CFR 761.5.
    
    XXI. Section 761.16: What Are the Submission Requirements for 
    Requests for VER Determinations and How Will These Requests Be 
    Processed?
    
        We are adding this new section to codify submission and processing 
    requirements for requests for VER determinations under section 522(e) 
    of the Act. Apart from a few provisions transferred from former 30 CFR 
    761.12(b)(2) and (h), this section has no counterpart in the previous 
    (1983) version of Part 761. In the proposed rule, this section appeared 
    in somewhat different form as 30 CFR 761.13.
        SMCRA does not contain procedural requirements for VER 
    determinations under section 522(e), nor does it expressly require the 
    development of regulations establishing such requirements. However, 
    section 201(c)(2) of the Act provides sufficient authority for adoption 
    of these regulations. This provision requires that we ``publish and 
    promulgate such rules and regulations as may be necessary to carry out 
    the purposes and provisions of this Act.'' The regulations in 30 CFR 
    761.16 provide the procedural framework necessary to ensure that the 
    prohibitions of 30 CFR 761.11 and section 522(e) of the Act are fully 
    and properly implemented in the manner intended by Congress. These 
    rules are intended to ensure that all affected persons receive 
    equitable treatment and have adequate notice and opportunity to 
    participate in the decision-making process, consistent with the 
    Administrative Procedure Act (5 U.S.C. 551 et seq.) and section 102(i) 
    of SMCRA, which states that one of the purposes of SMCRA is to assure 
    that appropriate procedures are provided for public participation. Many 
    of the requirements in these regulations, especially those pertaining 
    to notice and comment, also address section 102(b) of SMCRA, which 
    states that one of the Act's purposes is to ``assure that the rights of 
    surface landowners and other persons with a legal interest in the land 
    or appurtenances thereto are fully protected from [surface coal mining] 
    operations.''
        Most commenters either supported the addition of rules establishing 
    VER determination procedures or did not oppose such rules in principle. 
    However, some commenters took issue with individual aspects of the 
    proposed rules. As a result of these comments, the final rule contains 
    a number of substantive, editorial, and format changes from the 
    proposed rule.
    
    I. In What Major Ways Does the Final Rule Differ From the Proposed 
    Rule?
    
    1. Role of Federal Surface Management Agencies
        If the coal interests have been severed from other property 
    interests and the surface estate is in Federal ownership, proposed 30 
    CFR 761.13(b)(2) would have required a person requesting a VER 
    determination for those lands to first obtain a title opinion or other 
    official statement from the Federal surface management agency 
    confirming that the requester has the property right to conduct the 
    type of surface coal mining operations intended. This proposed 
    requirement was intended to ensure that the requester and the Federal 
    surface management agency reach agreement on the underlying property 
    rights, or, if there is a dispute, that the parties obtain proper 
    adjudication of the dispute without involving the agency responsible 
    for processing VER determination requests.
        Several commenters attacked this provision as effectively providing 
    the Federal surface management agency with veto authority over the VER 
    determination in violation of the principle of State primacy under 
    SMCRA. They argued that nothing in section 522(e) or other provisions 
    of SMCRA either requires or authorizes a decision-making role for the 
    Federal surface management agency in the VER determination process. One 
    commenter further noted that the proposed rule may be inconsistent with 
    section 510(b)(6) of the Act, which does not necessarily require 
    surface owner consent to a surface coal mining operation. Under that 
    section of the Act, the permit applicant has the option of 
    demonstrating the right to conduct surface coal mining operations 
    either under the terms of the instrument of conveyance or under State 
    law pertaining to interpretation of property conveyances.
        We agree that the commenters' arguments have some validity. In 
    addition, SMCRA may provide insufficient basis for the proposed rule's 
    disparate treatment of Federal and non-Federal surface owners of lands 
    protected under section 522(e). When presented with a very similar 
    controversy involving 30 CFR 761.11(h) in the 1983 rules, the court 
    noted that there appeared to be no rational basis for distinguishing 
    between Federal and non-Federal lands in the context of section 
    522(e)(1) because Congress did not incorporate this distinction into 
    that provision of the Act. See PSMRL II, Round III--VER, 22 Env't Rep. 
    Cas. (BNA) at 1565 (1985). Therefore, we are
    
    [[Page 70806]]
    
    replacing proposed 30 CFR 761.13(b)(2)(vi) with two new paragraphs in 
    30 CFR 761.16. The new paragraphs apply to all situations in which the 
    coal rights have been severed from the surface estate, not just to 
    those situations in which the surface estate is in Federal ownership.
        New paragraph (b)(2)(viii) of 30 CFR 761.16 provides that, if the 
    coal interests have been severed from other property interests, the 
    request for a VER determination must include documentation that the 
    requester has notified and provided reasonable opportunity for the 
    owners of all other property interests to comment on the validity of 
    the rights claimed by the requester. New paragraph (b)(2)(ix) provides 
    that the request must include copies of all comments received in 
    response to this solicitation. Under the final rule, any person 
    requesting a VER determination for Federal lands must seek and submit 
    the views of the Federal surface management agency, but, unlike the 
    proposed rule, the final rule does not require submission of a title 
    opinion or other official statement confirming the property rights 
    claimed by the requester. In other words, the final rule requires 
    consideration of information provided by the Federal surface management 
    agency, but, unlike the proposed rule, it does not provide that agency 
    with a veto authority over the VER determination process.
        Some commenters expressed a desire for rules that would be more 
    protective of Federal lands than of other lands, based on the argument 
    that the national interest in Federal lands justifies special treatment 
    of those lands. We find nothing in section 522(e) to support this 
    argument. Congress did not provide for greater protection of the 
    Federal lands listed in that section relative to the non-Federal lands 
    listed therein. We believe that the final rule protects all section 
    522(e) lands in an equitable manner.
        The final rule provides ample notice and comment opportunity to all 
    surface owners, including Federal surface management agencies. First, 
    under 30 CFR 761.16(b)(1)(viii) and (ix), the person requesting the VER 
    determination must seek comment from the surface owner and other 
    persons with a property interest in the land; any comments received 
    must be submitted as part of the request. Second, under 30 CFR 
    761.16(d)(2), upon finding that a request is administratively complete, 
    the agency responsible for the VER determination must notify both the 
    surface owner and, when applicable, any agency with primary 
    jurisdiction over the feature or values causing the land to come under 
    the protection of 30 CFR 761.11. Under 30 CFR 761.16(d)(3), the agency 
    responsible for the VER determination must provide a 30-day comment 
    period to all persons notified under 30 CFR 761.16(d)(2), with a 
    minimum of another 30 days available upon request. And, under 30 CFR 
    761.16(e)(1), the agency responsible for the VER determination must 
    evaluate the merits of all comments received and the information 
    presented by the requester before making a decision. Finally, the 
    surface owner or any other person with an interest in the land has the 
    option of filing a quiet title action in the appropriate administrative 
    or judicial forum at any time. Under 30 CFR 761.16(e)(3)(i), when such 
    an action is filed before or during the comment period on a request for 
    a VER determination, the agency making the VER determination must find 
    that the requester has not demonstrated VER, pending a final decision 
    in the litigation process.
        One commenter argued that providing concurrence or veto authority 
    to another Federal agency would expose the government to liability for 
    both temporary or permanent takings claims under the Fifth Amendment to 
    the Constitution. As discussed above, the final rule does not provide 
    concurrence or veto authority to any other Federal agency, including 
    the surface management agency. While we will continue to seek input 
    from these agencies and consider all comments received, we will no 
    longer suspend processing of a request for a VER determination solely 
    because the surface management agency advises us that it does not 
    concur with the requester's property rights claims. In reaching a 
    decision on the request, we will evaluate the merits of all information 
    in the record, including that supplied by the requester and the surface 
    management agency.
    2. Handling of Situations Involving Property Rights Disputes
        In establishing right-of-entry requirements for permit applications 
    for surface coal mining operations, section 507(b)(9) of SMCRA provides 
    that ``nothing in this Act shall be construed as vesting in the 
    regulatory authority the jurisdiction to adjudicate property title 
    disputes.'' Similarly, in setting forth the findings that the 
    regulatory authority must make before approving a permit application, 
    section 510(b)(6)(C) of SMCRA provides that ``nothing in this Act shall 
    be construed to authorize the regulatory authority to adjudicate 
    property rights disputes.''
        In deference to these provisos, proposed 30 CFR 761.13(d)(2) would 
    have required deferral of a decision on a request for a VER 
    determination if the underlying property rights are in dispute. The 
    preamble contained the following discussion of the meaning of the 
    proposed rule:
    
        The deferral would remain in effect until the parties resolve 
    the dispute in the proper venue, which is normally the State courts. 
    To do otherwise would constitute de facto adjudication of the 
    property rights dispute in favor of one of the parties, a result 
    that would violate the prohibition on such adjudication in section 
    510(b)(6)(C) of SMCRA. In addition, deferral of a decision in 
    situations involving property rights disputes is consistent with 
    section 102(b) of SMCRA, which states that one of the Act's purposes 
    is to ``assure that the rights of surface landowners and other 
    persons with a legal interest in the land or appurtenances thereto 
    are fully protected from [surface coal mining] operations.''
        OSM does not interpret section 510(b)(6)(C) of SMCRA as 
    requiring deferral of a decision if there is only a mere allegation 
    of a property rights dispute. For example, if the parties to the 
    alleged dispute are not diligently pursuing resolution of the 
    disagreement in the proper venue, then, depending on the facts of 
    the case, the agency processing the request for a VER determination 
    might reasonably conclude that the lack of any serious attempt to 
    resolve the dispute means that no bona fide dispute exists and, 
    therefore, that no deferral is necessary.
    
    62 FR 4851, January 31, 1997, col. 3.
    
        One commenter argued that because sections 510(b)(6) and 507(b)(9) 
    concern permitting requirements, their prohibitions on regulatory 
    authority adjudication of property rights disputes are not applicable 
    to VER determinations under section 522(e). We disagree. The sections 
    of the Act that the commenter references specifically provide that 
    ``nothing in this Act'' authorizes regulatory authorities to adjudicate 
    property rights disputes. Clearly, Congress did not intend to limit the 
    scope of the prohibition to sections 507 and 510 of the Act, as the 
    commenter asserts. Furthermore, VER determinations are precursors to 
    the permitting process and they may be made as part of the permitting 
    process in situations in which the regulatory authority and the agency 
    responsible for the VER determination are the same.
        Some commenters supported the proposed rule and its preamble 
    discussion. Others argued that, in view of Congress' expressed interest 
    in section 102(b) in protecting the rights of surface owners, we should 
    extend the deferral requirement to include all situations in which the 
    surface owner or other parties disagree with the property rights claims 
    made by the requester. For the reasons discussed later in this
    
    [[Page 70807]]
    
    section, we no longer believe that deferral is appropriate or 
    necessary.
        Many commenters opposed the proposed deferral requirement, arguing 
    that deferring a decision is an abdication of our decision-making 
    responsibilities under SMCRA. One commenter expressed concern that 
    deferral would deprive persons of the right to a reasonably timely 
    decision under the Administrative Procedure Act (APA). At 5 U.S.C. 
    555(b), the APA provides that ``[w]ith due regard for the convenience 
    and necessity of the parties or their representatives and within a 
    reasonable time, each agency shall proceed to conclude a matter 
    presented to it.'' Some commenters argued that unreasonable delays in 
    the decision-making process would expose the government to temporary or 
    permanent takings claims.
        Several commenters stated that property rights disputes do not 
    relieve the Secretary or the regulatory authority of the duty to render 
    a final decision on a matter before the agency. These commenters argue 
    that administrative decisions on requests for VER determinations would 
    not violate the statutory prohibition on adjudication of property 
    rights disputes because an aggrieved party still has the opportunity to 
    file a quiet title action in the appropriate forum even after a VER 
    determination is made. As discussed in greater detail later in this 
    section, the final rule requires that the agency make a decision on 
    each request for a VER determination. That decision must be made on the 
    merits of the information in the record unless the property rights are 
    the subject of pending litigation in an appropriate legal forum. If 
    there is pending litigation, we believe that the statutory prohibitions 
    on adjudication of property rights disputes apply. Therefore, in those 
    cases, the final rule at 30 CFR 761.16(e)(3)(i) requires that the 
    agency find that the requester has not demonstrated VER. This decision 
    will be subject to administrative and judicial review, and it will be 
    made without prejudice, meaning that the request may be refiled once 
    the property rights dispute is finally adjudicated.
        Several commenters expressed concern that deferrals would deprive 
    persons requesting a VER determination of the opportunity for 
    administrative and judicial review. One commenter stated that the 
    effect of a refusal to process a request for a VER determination is the 
    same as a negative determination, with one important distinction: 
    unlike a negative determination, a deferral or other cessation of 
    processing means that there is no final agency action subject to 
    judicial review. As discussed in greater detail later in this section, 
    these comments have some merit and we have revised the rule 
    accordingly. The final rule at 30 CFR 761.16(e) requires that the 
    agency make a decision on each request for a VER determination that the 
    agency receives. The requester will always have the opportunity to 
    pursue administrative and judicial review of that decision.
        One commenter argued that when a Federal surface management agency 
    asserts a title defect, the only vehicle to evaluate the merits of 
    property rights disputes is a decision on whether the requester has 
    demonstrated VER. We do not agree. Any person with a valid legal 
    interest has the right to file a timely quiet title action in a court 
    of competent jurisdiction to resolve a property rights dispute with a 
    Federal surface management agency, provided the statute of limitations 
    has not expired. There is no statutory or case law requiring an 
    administrative VER determination as a prerequisite for such action.
        Other commenters argued that deferrals would violate the statutory 
    prohibition on adjudication of property rights disputes. According to 
    the commenters, a deferral is a de facto adjudication of the property 
    rights dispute in favor of the surface owner because it effectively 
    denies the requester the right to conduct surface coal mining 
    operations. These commenters advocated revising the rule to require 
    that the agency make an administrative decision on each request. They 
    noted that any person with standing who disagrees with the agency's 
    decision on the VER determination has the right to seek judicial review 
    of the decision.
        For reasons discussed in greater detail later in this section, the 
    final rule at 30 CFR 761.16(e) requires that the agency make a decision 
    on each request for a VER determination that the agency receives. We 
    are not adopting the proposed rule that would have authorized deferral 
    of a decision under some circumstances. However, we do not agree with 
    the commenters that a deferral would be a de facto adjudication of the 
    property rights dispute in favor of the surface owner. Under the 
    proposed rule, the agency would have had to make a decision on the 
    request for a VER determination once the property rights dispute was 
    properly adjudicated or ceased to exist. Therefore, a deferral would 
    only temporarily delay a decision on whether the requester has 
    demonstrated the property right to conduct surface coal mining 
    operations.
        One commenter stated that we should revise the proposed rule to 
    authorize the deferral, or dismissal without prejudice, of a request 
    for a VER determination only for situations in which the property 
    rights are currently the subject of pending litigation. The commenter 
    argued that section 507(b)(9) of the Act implies that this is the only 
    circumstance under which Congress did not envision that we or the 
    regulatory authority would make a decision purely on the basis of a 
    prima facie demonstration of property rights by the requester. As 
    discussed in greater detail later in this section, we concur that 
    section 507(b)(9) may reasonably be read in this manner. For this and 
    other reasons, final 30 CFR 761.16(e) provides that, unless the 
    underlying property rights are in litigation, the agency responsible 
    for the VER determination must make that determination based on the 
    merits of the information in the record. If the property rights are in 
    litigation, final 30 CFR 761.16(e)(3)(i) requires that the agency find 
    that the requester has not demonstrated VER. The final rule specifies 
    that this decision must be made without prejudice, as the commenter 
    suggested.
        One commenter expressed concern that, under the proposed rule, 
    persons with no legal standing could allege a property rights dispute 
    and thus preclude a decision on the request for a VER determination. 
    The commenter urged that, at a minimum, we incorporate the preamble 
    restrictions on the meaning of the term ``property rights disputes'' 
    into the rule itself. As discussed below, we have revised the final 
    rule to address the commenter's concerns.
        Most commenters opposing the proposed rule and its deferral 
    requirement cited two Federal court decisions from the Eastern District 
    of Kentucky, Akers v. Baldwin, No. 84-88 (February 28, 1985) and Akers 
    v. Bradley, No. 84-88 (June 1988) as supporting their position. Both 
    decisions concern the same case, which dealt with the issue of what 
    action the regulatory authority could and should take on a permit 
    application while a property rights dispute is pending resolution in 
    State court. In its opinion, the court included the following 
    discussion of the meaning of the section 510(b)(6)(C) prohibition on 
    regulatory authority adjudication of property rights disputes:
    
        The court finds itself simply unable to accept the arguments of 
    the state defendants and intervening defendants that Congress did 
    not intend that the state agency regulating surface mining not be 
    required to make a determination whether the permit
    
    [[Page 70808]]
    
    application reflects a prima facie right under state law to engage 
    in surface mining.
        Such argument flies in the face of the plain and unambiguous 
    language of the statute and also its context and history. Thus, 30 
    U.S.C. Sec. 1260(b)(6) [section 510(b)(6) of SMCRA] requires the 
    mining company applicant for a permit to demonstrate in one of three 
    ways that it has the right to surface mine. This may be done by 
    furnishing the written consent of the surface owner, a conveyance 
    expressly granting the right to surface mine, or a deed which when 
    considered with applicable state law will reflect such right.
        The state and intervening defendants argue that for the state 
    agency to construe a deed in the light of state law is to engage in 
    the resolution of a property dispute in violation of the language of 
    the federal statute. This construction is not borne out by the 
    legislative history.
    * * * * *
        Proper principles of statutory construction require the court to 
    construe the statute as a whole giving effect to all of its 
    language. [Citation omitted.] The only construction of 30 U.S.C. 
    1260(b)(6) which meets this criterion is that * * * Congress 
    intended that the state regulatory authority reviewing the permit 
    application administratively ascertain that a prima facie showing of 
    the right to surface mine under state law has been properly 
    documented by the applicant. To this extent, the agency is required 
    to make a legal determination. This is subject, of course, to the 
    right of the parties to resort to the courts for a final 
    determination, which the state agency must then respect.
        The court concludes that the language so heavily relied upon by 
    the state and intervening defendants appearing at the end of 
    Sec. 1260(b)(6)(C)--
        ``Provided, That nothing in this [Act] shall be construed to 
    authorize the regulatory authority to adjudicate property rights 
    disputes''--means only that the regulatory agency would not have 
    power to determine whether any given conveyance had been obtained by 
    fraud, whether the consent obtained was signed by the proper heirs 
    to a particular tract of land, whether there was a boundary line or 
    other dispute concerning the realty's description, and other such 
    individualized matters.
    
    Akers v. Baldwin, C.A. No. 84-88 (E.D. Ky, Feb. 28, 1985), slip op. at 
    9-12, emphasis added.
        The court noted that, under SMCRA, the regulatory authority has no 
    administrative procedures for ruling on boundary line or fraud claims, 
    on who is the proper heir to a particular tract of real estate, or 
    other individualized disputes of similar nature. The court further 
    stated its belief that the regulatory authority could not prohibit 
    permit issuance on the basis of disputes of this nature. According to 
    the court, construing the Act in this manner ``could prevent issuance 
    of a permit even where a deed expressly granted the right to surface 
    mine,'' a result which the court found to be inconsistent with 
    Congressional intent. Akers v. Baldwin, supra, at 15.
        In a June 20, 1988 decision finally disposing of this case, now 
    entitled Akers v. Bradley, the court reiterated its conclusion in Akers 
    v. Baldwin, supra, that ``[30] U.S.C. Sec. 1260(b)(6) [section 
    510(b)(6) of SMCRA] and the legislative history reflect a congressional 
    intent that the regulatory authority reviewing the permit application 
    make an administrative determination that the language of the severance 
    instrument is construed under state law to authorize surface mining.'' 
    The court also rejected plaintiffs' argument that the regulatory 
    authority must withhold or suspend the permit if the agency receives an 
    objection disputing the applicant's right to mine coal by surface 
    methods: ``The court finds no clear indication that Congress intended 
    the permit process to be suspended in this circumstance * * *.'' Akers 
    v. Bradley, unpaginated slip op.
        After considering the Akers court's analysis of the meaning of the 
    statutory prohibition on adjudication of property rights, commenters' 
    arguments concerning the deferral provisions of the proposed rule, and 
    the language of the Act, we have decided against adoption of proposed 
    30 CFR 761.13(d)(2)(ii), which would have required deferral of a 
    decision on a request for a VER determination whenever the underlying 
    property rights are in dispute. Our decision not to proceed with the 
    approach in the proposed rule also receives support from Helmick v. 
    United States, No. 95-0115 (N.D. W.Va. 1997), in which the court 
    ordered us to make a decision on a VER determination request even 
    though the surface and mineral owners disagreed about the proper 
    interpretation of the deeds for the property.
        By requiring that the agency make an appealable decision on every 
    request, the final rule is consistent with the public policy interest 
    in expeditious decision-making. And, by requiring that the agency find 
    that the requester has not demonstrated VER if the property rights are 
    the subject of pending litigation, the final rule properly balances 
    that public policy interest with the need to protect the interests of 
    surface landowners and other persons with a legal interest in the 
    property, as directed by section 102(b) of SMCRA. In addition, the 
    final rule is consistent with the Interior Board of Land Appeals' 
    interpretation of section 510(b)(6)(C) of SMCRA in Marion A. Taylor, 
    125 IBLA 271, 277 (February 19, 1993), as discussed later in this 
    portion of the preamble.
        The final rule that we are adopting today requires that the agency 
    make a decision on every request for a VER determination that it 
    receives. Under 30 CFR 761.16(e)(3)(i), the agency must determine that 
    the requester has not demonstrated VER whenever the property rights 
    claimed by the requester are the subject of pending litigation in a 
    court or administrative body with jurisdiction over the property rights 
    in question. That determination must be subject to administrative and 
    judicial review and it must be made without prejudice, meaning that the 
    requester may refile the request once the property rights dispute is 
    finally adjudicated. In all other cases involving property rights 
    disagreements, the final rule, at 30 CFR 761.16(e)(3)(ii), requires 
    that the agency evaluate the merits of the information in the record, 
    including all comments received, and determine whether the requester 
    has demonstrated that the requisite property rights exist in accordance 
    with paragraph (a), (c)(1), or (c)(2) of the definition of VER. In the 
    absence of pending litigation, the agency may not defer a decision on 
    the merits of the request merely because the surface owner, the surface 
    management agency, or other persons oppose the request or disagree with 
    the validity of the property rights claimed by the requester.
        We believe that the final rule reflects good administrative 
    practice by reducing the lengthy delays that sometimes result from 
    deferring decisions until property rights disagreements are fully 
    resolved. The rule is responsive to those comments arguing for a more 
    expedited, understandable, and predictable decision-making process in 
    situations that involve property rights disagreements. The rule also is 
    consistent with commenters' desire for decisions that are subject to 
    administrative and judicial review. And it provides ample opportunity 
    for persons who disagree with the requester's property rights claims to 
    initiate legal action contesting those claims and thus activate the 
    provision of the rule that requires the agency to find that the 
    requester has not demonstrated VER, pending final adjudication of the 
    dispute.
        We believe that 30 CFR 761.16(e)(3)(i), which requires that the 
    agency determine that the requester has not demonstrated VER whenever 
    the property rights claimed by the requester are the subject of pending 
    litigation, is consistent with section 102(b) of SMCRA. That section 
    states that one of the Act's purposes is to ``assure that the rights of 
    surface landowners and other
    
    [[Page 70809]]
    
    persons with a legal interest in the land or appurtenances thereto are 
    fully protected from [surface coal mining] operations.'' Section 
    102(m), which states that another purpose of SMCRA is ``protection of 
    the public interest,'' provides further support for this rule.
        The final rule also is consistent with the court's assertion in the 
    Akers decision that the regulatory authority should not issue mining 
    permits prior to the conclusion of litigation concerning the 
    interpretation of property rights conveyances for lands within those 
    permit applications. In reaching this decision, the court found that:
    
        [T]he public interest dictates that the physical integrity of 
    the surface lands be preserved until the constitutionality of the 
    statute discussed herein [relating to broad form deeds] has been 
    finally determined. The mining companies can always do their mining 
    after the statute is declared unconstitutional, if such is the 
    result. The lands, once strip mined, cannot be restored to their 
    pristine state.
    
    Akers v. Baldwin, No. 84-88 (E.D. Ky. 1985), slip op. at 14-15.
        We believe that a similar rationale should apply to VER 
    determinations under section 522(e), since these determinations are 
    precursors to permitting actions, and may be made as part of the 
    permitting process.
        In addition, the final rule is consistent with the Interior Board 
    of Land Appeals' interpretation of section 510(b)(6)(C) of SMCRA in 
    Marion A. Taylor, 125 IBLA 271, 277 (February 19, 1993). In that case, 
    the Board held that, if the regulatory authority receives notice of a 
    legal dispute concerning the validity of property rights, but 
    nonetheless allows the applicant or permittee to conduct surface coal 
    mining operations on the disputed area, the regulatory authority has 
    effectively adjudicated the property rights dispute in favor of the 
    applicant or permittee in violation of section 510(b)(6)(C) of the Act. 
    The Board found that the existence of a legitimate ongoing legal 
    dispute means that the permit applicant was unable to demonstrate--and 
    the regulatory authority was unable to find--that the applicant had the 
    legal right to mine the coal by the method intended. VER determinations 
    are precursors to permitting actions, and may be made as part of the 
    permitting process. Therefore, the Board's rationale also would apply 
    to VER determinations in situations involving property rights disputes 
    that are pending resolution in a court of competent jurisdiction or 
    other appropriate legal venue.
        However, we do not interpret the proviso in section 510(b)(6)(C) of 
    SMCRA as applying to situations in which there is only a mere 
    allegation of a property rights dispute. As stated in the preamble to 
    the proposed rule, if the parties are not diligently pursuing 
    resolution of their disagreement in the proper administrative or 
    judicial venue, then the agency processing the request for a VER 
    determination may reasonably conclude that the lack of any serious 
    attempt to resolve the disagreement in the appropriate legal venue 
    means that no bona fide dispute exists. We believe that the threshold 
    that 30 CFR 761.16(e)(3)(i) establishes for property rights disputes is 
    a reasonable approach that will comply with the requirements of the Act 
    while avoiding the potential disruption of the permitting process and 
    mining industry that could result from a lower threshold that 
    countenances unsupported or frivolous allegations. This threshold also 
    should resolve a commenter's concern that, under the proposed rule, 
    persons with no legal standing could allege a property rights dispute 
    and thus preclude a decision on the request for a VER determination.
        Further, as one commenter noted, applying the statutory prohibition 
    on adjudication of property rights disputes only to those disputes 
    pending resolution in the appropriate legal venue is consistent with 
    section 507(b)(9) of the Act. This section, which, like section 
    510(b)(6)(C), contains a prohibition on regulatory authority 
    adjudication of property title disputes, provides that a permit 
    applicant must identify whether the claimed right of entry is the 
    subject of pending court litigation. Although not necessarily 
    conclusive, this provision does suggest that Congress did not consider 
    a property rights dispute to be bona fide in the absence of litigation.
        Finally, in Akers v. Bradley, supra, the court held that there is 
    no indication that Congress intended section 510(b)(6)(C), the other 
    provision of SMCRA that contains a prohibition on adjudication of 
    property rights disputes, to be interpreted as requiring that the 
    regulatory authority withhold or suspend the permit whenever the agency 
    receives an objection disputing the applicant's right to mine coal by 
    surface methods.
        Some commenters argued that a mere allegation of a property rights 
    dispute should suffice to invoke the prohibition on adjudication of 
    property rights disputes in section 510(b)(6)(C) of the Act because 
    many persons would likely become aware of a potential dispute only upon 
    receipt of the notice required by the rule. We recognize that the 
    situation posited by the commenters is likely to occur. However, we 
    believe that the final rule provides persons with legitimate property 
    rights concerns ample opportunity to initiate the appropriate legal or 
    administrative action during the comment period on the VER 
    determination request.
        For clarity, we have revised the public notice content requirements 
    in 30 CFR 761.16(d)(1) by adding a new paragraph (iv) to require that 
    the notice include a statement specifying that the agency will not make 
    a decision on the merits of the request if, by the close of the comment 
    period on the request, a person with a legal interest in the property 
    initiates appropriate legal action to resolve the property rights 
    dispute in the proper venue. But even if a person is unable to take 
    legal action during this time, the property rights adjudication 
    prohibition of section 510(b)(6)(C) means that subsequent initiation of 
    litigation to resolve the property rights dispute can prevent 
    regulatory authority approval of any permit application that might 
    follow the VER determination. See Marion A. Taylor, 125 IBLA 271 
    (February 19, 1993).
        One commenter argued that an agency determination that a person has 
    VER despite the presence of comments in the record that disagree with 
    the requester's property rights claims would expose the agency to 
    takings claims on the basis that the decision authorized physical 
    intrusion. According to the commenter, it would constitute ``an 
    official blessing of an improper usurpation of landowner and homeowner 
    rights to uninterrupted possession and enjoyment of property.'' We are 
    not aware of any case law supporting these assertions.
    3. Action on Incomplete Requests
        The proposed rule did not specify what action the agency 
    responsible for the VER determination could or should take if the 
    person requesting the VER determination does not respond to an agency 
    request for additional information. Final 30 CFR 761.16(c)(4) and 
    (e)(4) state that if you do not provide the necessary additional 
    information in a timely fashion, the agency must issue a determination 
    that you have not demonstrated VER.
        The rules also specify that the agency must make these 
    determinations without prejudice, meaning that you may refile the 
    request at a later time if desired.
        We are adding these provisions to the final rule in response to 
    several comments urging us to streamline the decision-making process to 
    minimize delays. One commenter requested that the final rules be 
    revised to ``avoid the inefficient and unfair delays attendant to the 
    agency's historic procedural
    
    [[Page 70810]]
    
    posturing to avoid disposition of issues critical to private property 
    rights.'' The commenter stated that prompt issuance of final decisions 
    also would reduce the agency's takings exposure and better comport with 
    5 U.S.C. 555(b), which provides that ``[w]ith due regard for the 
    convenience and necessity of the parties or their representatives and 
    within a reasonable time, each agency shall proceed to conclude a 
    matter presented to it.''
        We do not agree that the commenter has accurately characterized the 
    agency's previous actions concerning VER determinations. However, we 
    agree that prompt decisions are desirable. Accordingly, we are adding 
    30 CFR 761.16(c)(4) and (e)(4) to avoid decision-making delays 
    resulting from incomplete submissions or failure to respond to agency 
    requests for additional information. Under those rules, when a person 
    does not supply the information requested by the agency under 30 CFR 
    761.16(b) or (e)(1) within the time specified, the agency must issue a 
    determination that the person has not demonstrated VER. A person who 
    receives this type of VER determination has the right to seek 
    administrative and judicial review of the determination. In addition, 
    the final rules specify that the agency must make these determinations 
    without prejudice, meaning that the request may be resubmitted at any 
    time.
        We anticipate that this provision of the final rule will eliminate 
    the lengthy delays in decision-making that sometimes have occurred in 
    the past as a result of incomplete submissions. In addition, the final 
    rule is consistent with Helmick v. United States, No. 95-0115 (N.D. 
    W.Va. 1997), in which the court ordered us to issue a VER determination 
    even though the requester had not supplied all requested information.
        Whenever an agency issues a decision under 30 CFR 761.16(c)(4) or 
    (e)(4), it will retain the materials submitted with the request. Those 
    materials will become part of the administrative record for the 
    decision. If the requester subsequently desires a new determination, 
    the agency may, at its discretion, either require complete resubmission 
    of the request or allow the requester to submit only the new materials 
    together with a request for reconsideration of the previous 
    determination.
    4. Administrative Completeness Reviews.
        When a person submits a request for a VER determination, the 
    proposed rule would have required the agency responsible for the VER 
    determination to initiate notice and comment procedures without first 
    reviewing the request to determine whether it contained all components 
    required under 30 CFR 761.13(b). We believe that this approach 
    represents an inefficient use of resources on the part of both the 
    agency and the requester because it could result in premature notice 
    and comment.
        Therefore, the final rule includes a new 30 CFR 761.16(c), which 
    provides that, upon receipt of a request for a VER determination, the 
    agency must conduct an initial review to determine whether the request 
    includes all applicable components of the submission requirements of 30 
    CFR 761.16(b). This review addresses only the administrative 
    completeness of the request, not its legal or technical adequacy.
        Under the final rule, the agency must proceed to implement the 
    notice and comment requirements of 30 CFR 761.16(d) if the request 
    includes all necessary components. However, if the request does not 
    include all necessary components, the rule requires that the agency 
    notify the requester and establish a reasonable time for submission of 
    the missing information. If the requester does not submit this 
    information within the specified time or any subsequent extensions, the 
    final rule requires that the agency issue a determination that the 
    requester has not demonstrated VER. Under the final rule, the agency 
    must issue this determination without prejudice, meaning that the 
    requester may refile the request at any time after obtaining the 
    missing information.
        We believe that the addition of this step will streamline the 
    decision-making process, as desired by several commenters. It also will 
    promote more efficient use of resources by avoiding the expenses and 
    delays associated with providing notice and comment on an incomplete 
    request. And it is consistent with the permit application review 
    requirements of 30 CFR 773.13(a), which do not require initiation of 
    notice and comment procedures until the regulatory authority determines 
    that the application is administratively complete. Since VER 
    determinations are precursors to the permitting process, and may be 
    made as part of that process, we believe that the use of similar review 
    procedures is appropriate.
    5. Notification Requirements for Lands Listed in 30 CFR 761.11(a)
        As published on September 14, 1983, 30 CFR 761.12(b)(2) included a 
    requirement that the agency responsible for the VER determination 
    notify the National Park Service or the U.S. Fish and Wildlife Service 
    of any request for a VER determination for lands within the boundaries 
    of an area over which one of those agencies has jurisdiction. Proposed 
    30 CFR 761.13(c)(4) would have applied this requirement to all areas 
    protected under section 522(e)(1) of SMCRA and 30 CFR 761.11(a), not 
    just to those areas under the jurisdiction of the National Park Service 
    or the Fish and Wildlife Service.
        However, upon reconsideration, we find no basis for disparate 
    treatment of section 522(e)(1) lands relative to other lands protected 
    under section 522(e). In enacting section 522(e), Congress did not 
    establish a hierarchy of protection or make any other substantive 
    distinction among the lands protected under that section. Furthermore, 
    this provision is largely duplicative of proposed 30 CFR 
    761.13(c)(1)(iv) and (2), which would have required that the agency 
    provide notice and reasonable opportunity to comment to the owner of 
    the structure or feature causing the land to come under the protection 
    of 30 CFR 761.11.
        Therefore, we are not adopting proposed 30 CFR 761.13(c)(4). 
    Instead, we are modifying the notice and comment provisions of proposed 
    30 CFR 761.13(c)(1)(iv) and (2) to incorporate the minimum comment 
    period requirements of proposed 30 CFR 761.13(c)(4) and the 1983 
    version of 30 CFR 761.12(b)(2). In the final rule, those requirements 
    appear at 30 CFR 761.16(d)(1)(vi) and (vii), (2)(ii), and (3), which 
    provide for a minimum initial comment period of 30 days from the date 
    that the agency with primary jurisdiction over the values or feature 
    causing the land to come under the protection of 30 CFR 761.11 receives 
    the notice, with another 30 days automatically available upon request. 
    We have also added a proviso to 30 CFR 761.16(d)(3) stating that the 
    agency responsible for the VER determination may grant additional time 
    for good cause upon request. The latter provision is intended to cover 
    extenuating and unusual circumstances such as situations in which 
    critical agency personnel or one or more persons listed in 30 CFR 
    761.16(d)(2) are legitimately absent or unavailable during the comment 
    period. Another example would be a situation in which a surface owner 
    or surface management agency is unable to complete the necessary legal 
    research within 60 days despite reasonably diligent efforts to do so.
    
    [[Page 70811]]
    
    B. Paragraph (a): To Which Agency Must You Submit a Request for a VER 
    Determination?
    
        Final 30 CFR 761.16(a) provides that we will make all VER 
    determinations for Federal lands within the areas listed in 30 CFR 
    761.11 (a) and (b). Those areas correspond to the areas listed in 
    paragraphs (e)(1) and (e)(2) of section 522 of SMCRA. VER 
    determinations for all other lands, including non-Federal lands within 
    the areas listed in 30 CFR 761.11(a), are the responsibility of the 
    regulatory authority. The final rule thus reflects the revised Federal 
    lands regulations at 30 CFR 740.4(a)(4) and 745.13(o).
        Consistent with revised 30 CFR 740.11(g), the final rule also 
    specifies that the definition of VER in 30 CFR 761.5 applies to all VER 
    determinations for lands protected under 30 CFR 761.11 (a) or (b), 
    including non-Federal lands within the areas listed in 30 CFR 
    761.11(a), regardless of whether we or the State make the 
    determination. For all other lands, both we and State regulatory 
    authorities must use the definition of VER in the appropriate approved 
    regulatory program. Within primacy States without a cooperative 
    agreement under 30 CFR part 745, and in any State with a cooperative 
    agreement that does not delegate VER determination responsibility to 
    the State, we will apply the approved State program definition of VER 
    when making VER determinations for Federal lands outside the areas 
    listed in 30 CFR 761.11 (a) and (b), as required by 30 CFR 740.11(a).
        In keeping with plain language principles and a request from a 
    commenter, final 30 CFR 761.16(a) presents these requirements in 
    tabular form:
    
    ----------------------------------------------------------------------------------------------------------------
                                                     Type of land to       Agency
      Paragraph of Sec.  761.11        Protected      which  request  responsible for     Applicable definition of
       that provides protection         feature          pertains       determination      valid existing rights
    ----------------------------------------------------------------------------------------------------------------
    (a)..........................  National parks,   Federal........  OSM............  Federal. \1\
                                    wildlife
                                    refuges, etc.
    (a)..........................  National parks,   Non-Federal....  Regulatory       Federal. \1\
                                    wildlife                           authority.
                                    refuges, etc.
    (b)..........................  Federal lands in  Federal........  OSM............  Federal. \1\
                                    national
                                    forests \3\.
    (c)..........................  Public parks and  Does not matter  Regulatory       Regulatory program.\2\
                                    historic places.                   authority.
    (d)..........................  Public roads....  Does not matter  Regulatory       Regulatory program.\2\
                                                                       authority.
    (e)..........................  Occupied          Does not matter  Regulatory       Regulatory program.\2\
                                    dwellings.                         authority.
    (f)..........................  Schools,          Does not matter  Regulatory       Regulatory program.\2\
                                    churches,                          authority.
                                    parks, etc.
    (g)..........................  Cemeteries......  Does not matter  Regulatory       Regulatory program.\2\
                                                                       authority.
    ----------------------------------------------------------------------------------------------------------------
    \1\ Definition in 30 CFR 761.5.
    \2\ Definition in applicable State or Federal regulatory program in 30 CFR Chapter VII, Subchapter T.
    \3\ Neither section 522(e) of SMCRA nor 30 CFR 761.11 provides special protection for non-Federal lands within
      national forests. Therefore, this table does not include a category for those lands.
    
        See Parts X and XI of this preamble for a discussion of the 
    comments received on this aspect of the proposed rule.
    
    C. May a Request for a VER Determination Be Submitted Separately From a 
    Permit Application?
    
        Paragraph (b) of 30 CFR 761.16 expressly states that you may submit 
    a request for a VER determination before preparing and submitting a 
    permit application, unless the applicable regulatory program provides 
    otherwise. The final rule thus codifies existing policy, as stated in 
    the preambles to the 1983 final rule (see 48 FR 41322, September 14, 
    1983) and the 1991 proposed rule (see 56 FR 33161, July 18, 1991), and 
    removes language in conflict with that policy. It also is consistent 
    with 43 CFR 4.1391(b)(1), which provides for administrative review of 
    VER determinations that are made independently of a decision on a 
    permit application.
        Surface coal mining operations may not always be technically 
    feasible, legally permissible, or economically viable in the absence of 
    VER. Therefore, a requirement that requests for VER determinations be 
    accompanied by a permit application may be unreasonably burdensome in 
    that it could result in significant permit application preparation 
    expenditures that would be futile if the agency ultimately determines 
    that the requester does not have VER and consequently is ineligible to 
    receive a permit. This is especially true of Federal lands within the 
    areas specified in 30 CFR 761.11 (a) and (b), for which we have sole 
    authority to process requests for VER determinations even when we are 
    not the regulatory authority responsible for reviewing permit 
    applications.
        However, our adoption of this rule does not prevent States from 
    requiring that requests for VER determinations be accompanied by a 
    permit application. Sections 503 and 505 of SMCRA afford States 
    considerable discretionary authority to adopt requirements that either 
    have no Federal counterparts or are more stringent than their Federal 
    counterparts in achieving the requirements and purposes of the Act. 
    Furthermore, before reaching a decision on a request for a VER 
    determination, we reserve the right to request information normally 
    submitted as part of a permit application. We will make this request 
    only if we determine, on a case-specific basis, that we need that 
    information to properly evaluate the request for a VER determination.
    
    D. Paragraph (b): What Information Must You Include in a Request for a 
    VER Determination?
    
        Paragraph (b) of 30 CFR 761.16 contains submission and content 
    requirements for requests for VER determinations. As discussed in the 
    preamble to the proposed rule, we derived these requirements primarily 
    from provisions that we proposed as 30 CFR 761.12(a)(1) on July 18, 
    1991, which, in turn, are similar to guidelines in the preamble to the 
    1983 definition of VER. See 48 FR 41314, September 14, 1983. However, 
    because the definition of VER that we are adopting today does not 
    contain a takings standard, the final rule does not include items from 
    the 1983 and 1991 documents that pertain only to that standard.
    Paragraph (b)(1): Submission Requirements for Property Rights 
    Demonstration
        All requests for VER determinations for surface coal mining 
    operations other than roads must include the information
    
    [[Page 70812]]
    
    required by 30 CFR 761.16(b)(1). The agency responsible for making the 
    VER determination will use this information to evaluate whether you 
    have met the property rights demonstration requirement of paragraph (a) 
    of the definition of VER in 30 CFR 761.5.
        Paragraphs (b)(1) (i) through (vi) of the final rule are 
    substantively identical to paragraphs (b)(2) (i) through (v) and (vii) 
    of 30 CFR 761.13 in the proposed rule. These paragraphs require a legal 
    description of the land; complete documentation of the character and 
    extent of the requester's current interests in the surface and mineral 
    estates in question; a complete chain of title and discussion of any 
    title instrument provisions concerning mining or mining-related surface 
    disturbances or facilities; a description of the nature and ownership 
    of all property rights for the surface or mineral estates in question 
    as of the date that the land came under the protection of 30 CFR 
    761.11; and a description of the type and extent of surface coal mining 
    operations planned, including the intended method of mining and any 
    mining-related surface facilities, and an explanation of how the 
    planned operations are consistent with State property law.
        Some commenters opposed these information requirements as 
    excessive, overly burdensome, and improper. They argue that the rule 
    should require no more documentation of property rights than the right-
    of-entry information that must be submitted under 30 CFR 778.15 as part 
    of a permit application. We do not agree. In enacting the prohibitions 
    of section 522(e) of the Act, Congress clearly wished to minimize 
    surface coal mining operations on the lands listed in that section. See 
    the discussion in Part VII.C. of this preamble. Therefore, we and State 
    regulatory authorities have an obligation to ensure that a person 
    seeking to conduct surface coal mining operations on those lands 
    provides complete documentation of the requisite property rights. It 
    has been our experience that a simple description of the permit 
    applicant's basis for claiming the right to enter and begin surface 
    coal mining operations, which is all that 30 CFR 778.15 requires to 
    obtain a permit, does not satisfy this obligation.
        We believe that the requirements of 30 CFR 761.16(b)(1) are the 
    minimum necessary to ensure that the agency has a record which 
    accurately and completely documents that the necessary property rights 
    exist. Property rights and related legal issues can be very complex. 
    The previous rules provided little guidance on what information must be 
    submitted as part of a request for a VER determination. We have found 
    that persons requesting VER under those rules sometimes had difficulty 
    understanding exactly what information was necessary or what legal 
    issues needed to be addressed. Incomplete submissions resulted in 
    repeated requests for additional information. These requests and the 
    time required to collect and review the additional documentation 
    sometimes caused significant delays in the decision process and 
    occasionally the permitting process. Therefore, in this final rule, we 
    are establishing specific information requirements in an attempt to 
    ensure that a person knows what documentation must be submitted as part 
    of a request for a VER determination. These requirements should 
    expedite the decision-making process.
        Proposed 30 CFR 761.13(b)(2)(vi) provided that, if the coal 
    interests have been severed from other property interests and the 
    surface estate is in Federal ownership, the request must include a 
    title opinion or other official statement from the Federal surface 
    management agency confirming that the requester has a property right to 
    conduct the type of surface coal mining operations intended. However, 
    several commenters opposed this provision of the proposed rule as 
    improperly providing the Federal surface management agency with a veto 
    authority over the VER determination in violation of the principle of 
    State primacy under SMCRA.
        For the reasons discussed in Part XXI.A.1. of this preamble, we are 
    replacing proposed paragraph (b)(2)(vi) with two new paragraphs in the 
    final rule. New 30 CFR 761.16(b)(1)(viii) provides that, if the coal 
    interests have been severed from other property interests, the request 
    for a VER determination must include documentation that the requester 
    has notified and provided reasonable opportunity for the owners of all 
    other property interests to comment on the validity of the property 
    rights claimed by the requester. New 30 CFR 761.16(b)(1)(ix) provides 
    that the request must include copies of all comments received in 
    response to that solicitation.
        Finally, in response to a request from a State regulatory 
    authority, we are adding 30 CFR 761.16(b)(1)(vii) to clarify that the 
    proposed rule's requirement for complete documentation of the nature 
    and ownership of all property interests includes the names and 
    addresses of all current owners of the surface and mineral estates in 
    the land. As the commenter noted, the agency needs that information to 
    comply with the notification requirements of 30 CFR 761.16(d)(2).
    Paragraph (b)(2): Submission Requirements for Good Faith/All Permits 
    Standard
        Final 30 CFR 761.16(b)(2) provides that, if your request relies 
    upon the good faith/all permits standard in paragraph (b)(1) of the 
    definition of VER in 30 CFR 761.5, you must submit the property rights 
    information required by 30 CFR 761.16(b)(1). In addition, the final 
    rule requires that you submit the following information about permits, 
    licenses, and authorizations for surface coal mining operations on the 
    land to which your request pertains:
         Approval and issuance dates and identification numbers for 
    any permits, licenses, and authorizations that you or a predecessor in 
    interest obtained before the land came under the protection of 30 CFR 
    761.11 or section 522(e). [30 CFR 761.16(b)(2)(i)]
         Application dates and identification numbers for permits, 
    licenses, and authorizations for which you or a predecessor in interest 
    submitted an application before the land came under the protection of 
    30 CFR 761.11 or section 522(e). [30 CFR 761.16(b)(2)(ii)]
         An explanation of any other good faith effort that you or 
    a predecessor in interest made to obtain the necessary permits, 
    licenses, and authorizations as of the date that the land came under 
    the protection of 30 CFR 761.11 or section 522(e). [30 CFR 
    761.16(b)(2)(iii)]
        Relevant permits and authorizations may include, but are not 
    limited to, State or Federal surface or underground coal mining 
    permits, site-specific wetlands disturbance permits, zoning or other 
    local governmental approvals, National Pollutant Discharge Elimination 
    System permits, State air pollution control permits, Mine Safety and 
    Health Administration authorizations, U.S. Forest Service special use 
    permits, and (for some types of facilities such as coal preparation 
    plants and ventilation housing for underground mines) building permits. 
    This list is not exhaustive, nor does it imply that every surface coal 
    mining operation will require each of these permits and authorizations.
        Except for 30 CFR 761.16(b)(2)(iii), the requirements in the final 
    rule are substantively identical to those that we proposed as 30 CFR 
    761.13(b)(2)(ix) in 1997. We have added the third item because, under 
    the good faith/all permits standard, a good faith effort does not 
    necessarily mean that an application has been filed for all
    
    [[Page 70813]]
    
    required permits, licenses, and authorizations. See Part VII.C.2. of 
    the preamble to this rulemaking for a full discussion of what a good 
    faith effort entails.
        The agency responsible for the VER determination needs the 
    information required by this rule to determine whether you have met the 
    requirements of paragraph (b)(1) of the definition of VER in 30 CFR 
    761.5 and to establish a documented record of the basis for that 
    determination.
    Paragraph (b)(3): Submission Requirements for Needed for and Adjacent 
    Standard
        Final 30 CFR 761.16(b)(3), which we proposed as 30 CFR 
    761.13(b)(1)(viii), provides that, if your request relies upon the 
    needed for and adjacent standard in paragraph (b)(2) of the definition 
    of VER in 30 CFR 761.5, you must explain how and why the land is needed 
    for and immediately adjacent to the operation upon which the request is 
    based. This explanation must include a demonstration that prohibiting 
    expansion of the operation onto that land would unfairly impact the 
    viability of the operation as originally planned before the land came 
    under the protection of 30 CFR 761.11 or section 522(e). You also must 
    supply the property rights information required by 30 CFR 761.16(b)(1). 
    The agency responsible for the VER determination needs the information 
    required by this rule to determine whether you have met the 
    requirements of paragraph (b)(2) of the definition of VER in 30 CFR 
    761.5 and to establish a documented record of the basis for that 
    determination.
        The final rule contains three substantive differences from the 
    proposed rule. First, the final rule applies to land needed for the 
    operation. The proposed rule referred to coal needed for the operation. 
    The change from coal to land ensures consistency with the revised 
    definition of VER, which, in both the proposed and final rules, applies 
    the needed for and adjacent standard to lands, not just coal reserves, 
    that are needed for any activity or facility included in the definition 
    of surface coal mining operations.
        Second, the final rule requires an explanation of how and why the 
    land is needed for and immediately adjacent to the operation upon which 
    the request is based. The proposed rule only applied this requirement 
    to the ``needed for'' component of the standard.
        However, because paragraph (b)(2) of the definition of VER requires 
    a demonstration that the land is both needed for and immediately 
    adjacent to the operation upon which the request is based, we believe 
    that a request for a VER determination under this standard must include 
    an explanation of how and why the land meets both the ``needed for'' 
    and ``immediately adjacent to'' components of the standard.
        Third, the final rule adds the requirement that the explanation of 
    how and why the land is needed for the operation upon which the request 
    is based must include a demonstration that prohibiting expansion of the 
    operation onto the land would unfairly impact the viability of the 
    operation as originally planned before the land came under the 
    protection of 30 CFR 761.11 or section 522(e). This addition is 
    consistent with paragraph (b)(2) of the definition of VER in 30 CFR 
    761.5, which establishes that requirement as part of the needed for and 
    adjacent standard.
        The new language also is responsive to those commenters who urged 
    us to include a requirement that the requester explain how and why the 
    land is needed to ensure the economic viability of the operation. 
    However, we do not fully agree with the commenters' argument that the 
    land must be necessary to ensure the economic viability of the 
    operation. As provided in the final rule and discussed in Part VII.D.3. 
    of the preamble to this rule, we believe that the ``needed for'' 
    element of the needed for and adjacent standard may be satisfied by a 
    demonstration that prohibiting expansion of the operation onto the land 
    would unfairly impact the viability of the operation as originally 
    planned before the land came under the protection of 30 CFR 761.11 or 
    section 522(e).
    Paragraph (b)(4): Submission Requirements for Roads
        The VER standards for roads in paragraphs (c)(1) through (c)(3) of 
    the definition of VER in 30 CFR 761.5 do not include the property 
    rights demonstration required by paragraph (a) of the definition of 
    VER. Therefore, there is no need for requests for VER determinations 
    for roads under those standards to include all information required to 
    make that demonstration. Accordingly, the final rule establishes 
    separate information requirements at 30 CFR 761.16(b)(4) for requests 
    for VER determinations for roads. The final rule is substantively 
    identical to the one that we proposed as 30 CFR 761.13(b)(1), except 
    for the revisions needed to conform with the changes to the VER 
    standards for roads in paragraph (c) of the definition of VER in 30 CFR 
    761.5, as discussed in Part VII.E. of this preamble.
        If your request relies upon one of the VER standards for roads in 
    paragraphs (c)(1) through (c)(3) of the definition of VER, you must 
    submit satisfactory documentation that at least one of the following 
    statements is true:
         The road existed when the land upon which it is located 
    came under the protection of 30 CFR 761.11 and section 522(e), and you 
    have a legal right to use the road for surface coal mining operations. 
    [30 CFR 761.16(b)(4)(i)]
         A properly recorded right of way or easement for a road in 
    that location existed when the land came under the protection of 30 CFR 
    761.11 and section 522(e), and, under the document creating the right 
    of way or easement, and under any subsequent conveyances, you have a 
    legal right to use or construct a road across the right of way or 
    easement to conduct surface coal mining operations. [30 CFR 
    761.16(b)(4)(ii)]
         A valid permit for use or construction of a road in that 
    location for surface coal mining operations existed when the land came 
    under the protection of 30 CFR 761.11 and section 522(e). [30 CFR 
    761.16(b)(4)(iii)]
        Paragraph (c)(4) of the definition of VER in 30 CFR 761.5 provides 
    that you may elect to demonstrate VER for roads by demonstrating VER 
    under either the good faith/all permits standard or the needed for and 
    adjacent standard under paragraph (b) of the definition of VER. 
    Therefore, if your request relies upon the standard in paragraph (c)(4) 
    of the definition, you must submit the information required by 30 CFR 
    761.16(b)(1), which relates to the property rights demonstration 
    required under paragraph (a) of the definition. You also must submit 
    the information required by either 30 CFR 761.16(b)(2) (for the good 
    faith/all permits standard) or 30 CFR 761.16(b)(3) (for the needed for 
    and adjacent standard).
    
    E. Paragraph (c): How Will the Agency Initially Review My Request?
    
        For the reasons discussed in Part XXI.A.4. of this preamble, the 
    final rule includes a new 30 CFR 761.16(c). Under paragraph (c)(1) of 
    this rule, upon receipt of your request for a VER determination, the 
    agency must conduct an initial review to determine whether the request 
    includes all applicable components of the submission requirements of 30 
    CFR 761.16(b). This review will address only the administrative 
    completeness of your request, not its legal or technical adequacy. If 
    your request includes all necessary components, paragraph (c)(3) of the 
    final rule requires that the agency
    
    [[Page 70814]]
    
    implement the notice and comment requirements of 30 CFR 761.16(d).
        Under paragraph (c)(2) of the final rule, if your request does not 
    include all components required by 30 CFR 761.16(b), the agency must 
    notify you of the missing components and establish a reasonable time 
    within which you must submit this information. If you do not submit 
    this information within the specified time or any subsequent extensions 
    that the agency approves, paragraph (c)(4) of the final rule requires 
    that the agency issue a determination that you have not demonstrated 
    VER. The rule specifies that the agency will issue this determination 
    without prejudice, meaning that you may refile the request at any time.
        Whenever an agency issues a determination that you have not 
    demonstrated VER, it will retain the materials that you submitted with 
    the request. These materials will become part of the administrative 
    record of the decision. If you subsequently desire a new determination, 
    the agency may, at its discretion, either require complete resubmission 
    of the request or allow you to submit only the new materials together 
    with a request for reconsideration of the previous determination.
        We believe that the addition of this step will streamline the 
    decision-making process, as desired by several commenters. It also will 
    promote more efficient use of resources by avoiding the expenses and 
    delays associated with providing notice and comment on an incomplete 
    request.
    
    F. Paragraph (d): What Notice and Comment Requirements Apply to the VER 
    Determination Process?
    
        Paragraph (d) of 30 CFR 761.16 establishes notice and comment 
    requirements and provisions for public participation in the VER 
    determination process. We proposed those requirements as 30 CFR 
    761.13(c), but, because of organizational changes, they appear as 30 
    CFR 761.16(d) in the final rule.
        As we noted in the preamble to the proposed rule, the notice and 
    comment requirements in 30 CFR 761.16(d) generally parallel those that 
    we previously used for VER determinations. We have tailored these 
    requirements to minimize resource demands on affected persons while 
    maintaining consistency with section 102(i) of SMCRA, which states that 
    one of purposes of the Act is to assure that appropriate procedures are 
    provided for public participation.
        Under paragraph (d)(1) of the final rule, when the agency 
    responsible for the VER determination finds that a request meets the 
    requirements of 30 CFR 761.16(c)(3), the agency must publish a notice 
    in a newspaper of general circulation in the county in which the land 
    is located. The notice must invite comment on the merits of the 
    request. In response to a comment, we have revised the final rule to 
    clarify that the agency may require that the requester publish this 
    notice and provide the agency with a copy of the published notice. As 
    proposed, the final rule specifies that we will also publish the notice 
    in the Federal Register if the request involves Federal lands listed in 
    30 CFR 761.11(a) or (b).
        The final rule requires that the notice describe the location of 
    the land involved, the type of surface coal mining operations planned, 
    the applicable VER standard, and the procedures that the agency will 
    follow in processing the request. See 30 CFR 761.16(d)(1)(i), (ii), 
    (iii), and (v). It also requires that the notice include the name and 
    address of the agency office at which a copy of the request is 
    available for public inspection and to which comments should be sent, 
    the closing date of the comment period, and a statement that an 
    additional 30 days are available upon request. See 30 CFR 
    761.16(d)(1)(vi) through (viii). We added the portion of 30 CFR 
    761.16(d)(1)(viii) that requires the name and address of the agency 
    office at which a copy of the request is available for public 
    inspection in response to a comment expressing concern about the 
    proposed rule's lack of a provision for public access to requests for 
    VER determinations.
        Proposed 30 CFR 761.13(c)(1)(iv) would have required that the 
    comment period be of sufficient length to afford interested persons a 
    reasonable opportunity to prepare and submit comments. However, for the 
    reasons discussed in Part XXI.A.5. of this preamble, final 30 CFR 
    761.16(d)(1)(vi) and (vii) provide that the comment period must be a 
    minimum of 30 days after the publication date, with another 30 days 
    automatically available upon request.
        As proposed, the final rule requires that the notice describe the 
    property rights claimed and the basis for that claim. See 30 CFR 
    761.16(d)(1)(iii)(A). Because the definition of VER in 30 CFR 761.5 
    only requires a property rights demonstration as part of requests for 
    VER determinations based upon one of the standards in paragraph (b) of 
    the definition, we are restricting the scope of 30 CFR 
    761.16(d)(1)(iii)(A) to requests for VER determinations based upon the 
    good faith/all permits standard or the needed for and adjacent standard 
    under paragraph (b) of the definition of VER.
        Certain property rights also may be a component of the VER 
    determination process for requests based upon one of the standards for 
    roads in paragraphs (c)(1) and (c)(2) of the definition of VER. 
    Therefore, we are adding two paragraphs to the final rule to address 
    these situations. Under 30 CFR 761.16(d)(iii)(B), if your request 
    relies upon the standard in paragraph (c)(1) of the definition of valid 
    existing rights, the notice must include a description of the basis for 
    your claim that the road existed when the land came under the 
    protection of 30 CFR 761.11 or section 522(e). In addition, the notice 
    must include a description of the basis for your claim that you have a 
    legal right to use that road for surface coal mining operations. Under 
    30 CFR 761.16(d)(iii)(C), if your request relies upon the standard in 
    paragraph (c)(2) of the definition of valid existing rights, the notice 
    must include a description of the basis for your claim that a properly 
    recorded right of way or easement for a road in that location existed 
    when the land came under the protection of 30 CFR 761.11 or section 
    522(e). In addition, the notice must include a description of the basis 
    for your claim that, under the document creating the right of way or 
    easement, and under any subsequent conveyances, you have a legal right 
    to use or construct a road across the right of way or easement to 
    conduct surface coal mining operations.
        In response to commenters' concerns about property rights disputes, 
    we have added 30 CFR 761.16(d)(1)(iv). This new paragraph requires that 
    the notice include a statement that the agency will not make a decision 
    on the merits of the VER determination request if, by the close of the 
    comment period under this notice or the notice required by 30 CFR 
    761.16(d)(3), a person with a legal interest in the property initiates 
    appropriate legal action to resolve the property rights dispute in the 
    proper venue. See Part XXI.A.2. of this preamble for further discussion 
    of the background of and reasons for this requirement. We are 
    restricting this provision to requests for VER determinations based 
    upon one or more of the standards in paragraphs (b), (c)(1), or (c)(2) 
    of the definition of VER in 30 CFR 761.5 because only those standards 
    have the potential for property rights disputes as part of the VER 
    determination process.
        We have combined proposed 30 CFR 761.13(c)(2) and (c)(3) into 30 
    CFR 761.16(d)(2) in the final rule. That paragraph requires that the 
    agency promptly provide a copy of the notice required under 30 CFR 
    761.16(d)(1) to (i) all reasonably locatable owners of
    
    [[Page 70815]]
    
    surface and mineral estates in the land included in the request, and 
    (ii) the owner of the feature causing the land to come under the 
    protection of 30 CFR 761.11, and, when applicable, to the agency with 
    primary jurisdiction over that feature with respect to the values 
    causing the land to come under the protection of 30 CFR 761.11. The 
    final rule differs from the proposed rule in two respects.
        First, paragraph (d)(2)(i) requires notification of all owners of 
    surface and mineral estates in the land included in the request. The 
    proposed rule would have only required notification of these owners if 
    the land involved severed estates or divided interests. The final rule 
    does not include this limitation because, upon further evaluation, we 
    find no basis or reason for restricting notification in this fashion.
        Second, paragraph (d)(2)(ii) requires notification of both the 
    owner of the feature causing the land to come under the protection of 
    30 CFR 761.11, and, when applicable, the agency with primary 
    jurisdiction over that feature with respect to the values causing the 
    land to come under the protection of 30 CFR 761.11. The proposed rule 
    would have required notification of only the owner of the feature. The 
    change from the proposed rule to the final rule recognizes that the 
    agency with jurisdiction over the protected feature may not own the 
    feature or certain lands within the feature. For example, many sites 
    listed on the National Register of Historic Places are privately owned. 
    Similarly, some lands within section 522(e)(1) areas, such as national 
    parks and national wildlife refuges, are in non-Federal ownership. In 
    situations such as these, we believe that, in the interest of fairness, 
    the agency with jurisdiction over the protected feature also should 
    receive notice and opportunity to comment. For lands and features owned 
    by the United States or by a State, notification of the Federal or 
    State agency with responsibility for managing the land or feature will 
    fully satisfy the requirements of 30 CFR 761.16(d)(2)(ii).
        One commenter expressed concern that the notification requirements 
    of proposed 30 CFR 761.13(c)(3) could impose a significant burden on 
    the agency responsible for the VER determination unless we revised the 
    submission requirements to specify that the requester must provide 
    names and addresses of all owners of interest. As discussed in Part 
    XXI.D. of this preamble, we agree. Final 30 CFR 761.16(b)(1)(vii) 
    requires that the requester supply current names and addresses of the 
    owners of all property interests in the land. In adopting 30 CFR 
    761.16(b)(1)(vii) and 761.16(d)(2)(i), we do not intend to impose an 
    unreasonable burden to locate owners of property interests if that 
    information is not readily available from established sources. 
    Therefore, the final rule provides that the notification requirements 
    of 30 CFR 761.16(d)(2)(i) extend only to reasonably locatable owners. 
    If comments received on the request or other available information 
    indicates that the names and addresses supplied by the requester are 
    either inaccurate or incomplete, the agency may either conduct its own 
    title research or require the requester to correct the deficiencies in 
    the original submittal.
        Under final 30 CFR 761.16(d)(3), the letter transmitting the notice 
    required under 30 CFR 761.16(d)(2) must clarify that the comment period 
    for persons receiving notice is 30 days from the date of service of the 
    notice, with another 30 days available upon request. At its discretion, 
    the agency responsible for the VER determination may grant additional 
    time for good cause upon request. These times originally appeared in 
    proposed 30 CFR 761.13(c)(4), which would have applied only to requests 
    for VER determinations involving land within an area under the 
    protection of 30 CFR 761.11(a) and section 522(e)(1) of the Act. As 
    discussed in Part XXI.A.5. of this preamble, we are not adopting 
    proposed 30 CFR 761.13(c)(4). That paragraph of the proposed rule would 
    duplicate the requirements of final 30 CFR 761.16(d)(1)(vi) and (vii), 
    (2), and (3). In addition, we find no basis in SMCRA to establish 
    notice and comment provisions that differ based upon which paragraph of 
    section 522(e) protects the land.
    
    G. Paragraph (e): How Will a Decision Be Made?
    
        Paragraph (e), which we proposed as 30 CFR 761.13(d), contains 
    procedural requirements and decision-making criteria for the evaluation 
    of requests for VER determinations. Under paragraph (e)(1) of the final 
    rule, the agency responsible for the VER determination must review the 
    materials submitted with the request, the information received during 
    the comment period, and any other relevant, reasonably available 
    information to determine whether the record is sufficiently complete 
    and adequate to support a decision on the merits of the request. This 
    language differs slightly from that of the proposed rule, which would 
    have required a determination of whether the record was adequate to 
    support a decision in favor of the requester. The new language reflects 
    the fact that, under the Administrative Procedure Act, any agency 
    decision must be supported by an adequate administrative record.
        If the record is not sufficiently complete and adequate to support 
    a decision on the merits of the request, paragraph (e)(1) of the final 
    rule requires that the agency notify the requester in writing, 
    explaining the inadequacy of the record and requesting submittal, 
    within a specified reasonable time, of any additional information that 
    the agency deems necessary to remedy the inadequacy. The proposed rule 
    did not specify what action the agency responsible for the VER 
    determination could or should take if the person requesting the VER 
    determination does not respond to the request for additional 
    information. However, under paragraph (e)(4) of the final rule, if the 
    necessary information is not submitted within the time specified or as 
    subsequently extended, the agency must issue a determination that the 
    requester has not demonstrated VER. Under the final rule, the agency 
    must issue these determinations without prejudice, meaning that the 
    person could refile the request at a later time. See Part XXI.A.3. of 
    this preamble for a discussion of the reasons and basis for this final 
    rule.
        Like the proposed rule, paragraph (e)(2) of the final rule provides 
    that, once the record is complete and adequate, the agency must 
    determine whether the requester has demonstrated VER. Under the rule, 
    the decision document must explain how the requester has or has not 
    satisfied all applicable elements of the definition of VER. Paragraph 
    (e)(2) of the final rule also incorporates proposed 30 CFR 
    761.13(d)(2)(i). Like that paragraph of the proposed rule, the final 
    rule requires that the decision document also set forth relevant 
    findings of fact and conclusions and specify the reasons for the 
    conclusions.
        Paragraph (d)(2)(ii) of the proposed rule would have required that 
    the agency defer a decision until all outstanding property rights 
    disputes were resolved. For the reasons discussed in Part XXI.A.2. of 
    this preamble, we are not adopting that paragraph of the proposed rule. 
    Instead, the final rule includes a new paragraph (e)(3), which requires 
    that the agency make a determination on the merits of the record unless 
    the conflicting property rights claims are the subject of pending 
    litigation in a court or administrative body of competent jurisdiction. 
    If the property rights are the subject of such litigation, the final 
    rule requires that the agency determine
    
    [[Page 70816]]
    
    that the requester has not demonstrated VER. The agency must make this 
    determination without prejudice, meaning that the requester may refile 
    the request at any time. See Part XXI.A.2. of this preamble for a more 
    extensive discussion of this paragraph of the final rule. The final 
    rule also clarifies that paragraph (e)(3) applies only to requests for 
    VER determinations that rely upon one or more of the standards in 
    paragraphs (b), (c)(1), and (c)(2) of the definition of VER in 30 CFR 
    761.5. Only requests based upon those standards have the potential for 
    a property rights dispute as part of the VER determination process.
        Under paragraph (e)(5)(i) of the final rule, which we proposed as 
    30 CFR 761.13(d)(3)(i), the agency must provide a copy of the 
    determination to the requester, the owner or owners of the land to 
    which the determination applies, to the owner of the feature causing 
    the land to come under the protection of 30 CFR 761.11, and, when 
    applicable, to the agency with primary jurisdiction over the feature 
    with respect to the values that caused the land to come under the 
    protection of 30 CFR 761.11. The final rule differs from the proposed 
    rule in two ways. First, the final rule includes a requirement to 
    provide a copy of the determination to the owner or owners of the land 
    to which the determination applies. We believe that, in the interest of 
    fairness, landowners should receive the same notification as the 
    requester and the agency with primary jurisdiction over the protected 
    feature. Second, the final rule replaces the disjunctive ``or'' in the 
    proposed rule with ``and'' to clarify that both the owner of the 
    feature causing the land to come under the protection of 30 CFR 761.11 
    and any agency with primary jurisdiction over that feature must receive 
    notification, not just one or the other as the proposed rule could have 
    been read to mean. As with the first change, we believe that, in the 
    interest of fairness, both the owner of the feature and the agency with 
    primary jurisdiction over that feature should receive notification of 
    the decision. In addition, the final rule adds a requirement that the 
    agency provide an explanation of appeal rights and procedures along 
    with a copy of the determination. We believe that this provision is 
    necessary to ensure that all persons are aware of those rights and 
    procedures.
        Paragraph (e)(5)(ii) of the final rule, which we proposed as 30 CFR 
    761.13(d)(3)(ii), requires that the agency publish notice of the 
    determination in a newspaper of general circulation in the county in 
    which the land is located. At the request of a commenter, the final 
    rule clarifies that the agency may require that the requester publish 
    this notice and provide a copy of the published notice to the agency. 
    When the request includes Federal lands within the areas listed in 30 
    CFR 761.11(a) or (b), the final rule requires that we publish the 
    determination in the Federal Register. The final rule adds a 
    requirement that both the notice of decision published in the newspaper 
    and the determination published in the Federal Register must provide an 
    explanation of appeal rights and procedures. We believe that this 
    provision is necessary to ensure that all persons are aware of those 
    rights and procedures.
    
    H. Paragraph (f): How May a VER Determination Be Appealed?
    
        Paragraph (f), which we proposed as 30 CFR 761.13(e), provides that 
    VER determinations are subject to administrative and judicial review 
    under 30 CFR 775.11 and 775.13, which contain administrative and 
    judicial review requirements for permitting decisions. This provision 
    is substantively identical to the appeal rights for VER determinations 
    in both the 1979 and 1983 versions of 30 CFR 761.12(h).
        Some commenters urged that we modify this provision to eliminate 
    the requirement to exhaust administrative remedies before seeking 
    judicial review of VER determinations. The commenters argued that these 
    decisions are final for purposes of section 10(c) of the Administrative 
    Procedure Act because SMCRA does not specifically require VER 
    determinations. They also cite a series of Federal court decisions 
    concerning SMCRA that have held that adherence to an administrative 
    review process is a prerequisite to judicial review only when the Act 
    expressly requires administrative review.
        We do not agree with the commenters' arguments. VER determinations 
    are a threshold requirement in the permitting process and an inherent 
    component of the permit application approval finding required by 
    section 510(b)(4) of SMCRA and 30 CFR 773.15(c)(3)(ii). Hence, VER 
    determinations are appropriately subject to the same administrative and 
    judicial review requirements as apply to any other type of permitting 
    decision under the Act; in this case, the regulations at 30 CFR 775.11 
    and 775.13. In addition, providing the right of administrative review 
    maximizes the opportunity for public participation in the VER 
    determination process. Thus, the final rule is consistent with section 
    102(i) of SMCRA, which states that one of the purposes of the Act is to 
    assure that appropriate procedures are provided for public 
    participation.
    
    II. Paragraph (g): To What Extent and in What Manner Must Records 
    Related to the VER Determination Process Be Made Available to the 
    Public?
    
        Final 30 CFR 761.16(g) provides that, if a request for a VER 
    determination is subject to the notice and comment requirements of 30 
    CFR 761.16(d), the agency responsible for processing the request must 
    make a copy of that request available to the public in the same manner 
    as the agency, when acting as the regulatory authority, must make 
    permit applications available to the public under 30 CFR 773.13(d). The 
    final rule also specifies that the agency must make records associated 
    with that request and any subsequent determination under 30 CFR 
    761.16(e) available to the public in accordance with the requirements 
    and procedures of either 30 CFR 840.14 or 30 CFR 842.16.
        We added this paragraph to the final rule in response to a 
    commenter who argued that requests for VER determinations should be 
    placed on file in the local courthouse or other accessible office for 
    public inspection and copying, just as 30 CFR 773.13(a)(2) and section 
    507(e) of the Act require for permit applications. We did not adopt the 
    specific requirement sought by the commenter. Because requests for VER 
    determinations are not complete permit applications, they are not 
    necessarily subject to all statutory and regulatory provisions 
    concerning permit applications.
        However, requests for VER determinations are subject to section 
    517(f) of the Act, which requires that copies of any information that 
    the regulatory authority obtains under Title V of SMCRA ``be made 
    immediately available to the public at central and sufficient locations 
    in the county, multicounty, and State area of mining so that they are 
    conveniently available to residents in the areas of mining.'' 
    Therefore, to address the commenter's concern, the final rule expressly 
    requires that records associated with requests for VER determinations 
    be made available for public review in accordance with the regulations 
    that implement this statutory requirement: 30 CFR 773.13(d) and either 
    30 CFR 840.14 (when a State regulatory authority is responsible for the 
    VER determination) or 842.16 (when we are responsible for the VER 
    determination). Under those rules, the agency has the option of making 
    copies of records available to the public by mail upon
    
    [[Page 70817]]
    
    request instead of placing them on file in a government or other public 
    office in the county to which the records pertain.
        We do not intend to require disclosure of proprietary information 
    that is not otherwise available for public review as a matter of law. 
    Requests for VER determinations may include information concerning 
    property interests and the chemical and physical properties of coal. 
    Under paragraphs (a)(12) and (b) of section 508 of SMCRA, with certain 
    exceptions, the regulatory authority must hold that information in 
    confidence unless it is on public file pursuant to State law. We see no 
    reason why information should be treated differently when it is 
    submitted as part of a request for a VER determination, especially 
    since 30 CFR 761.16(b) allows a request for a VER determination to be 
    submitted either as part of or in advance of a permit application. 
    Therefore, under the final rule, the confidentiality provisions of 30 
    CFR 773.13(d)(3) also apply to requests for VER determinations under 30 
    CFR 761.16.
    
    J. May the Regulatory Authority Reconsider VER Determinations During 
    Review of a Subsequent Permit Application?
    
        Commenters divided on the question of whether VER determinations 
    made in advance of submission of a permit application would or should 
    be subject to comment and reevaluation at the time of permit 
    application review. As discussed in Part XXI.C. of this preamble and in 
    the preamble to the proposed rule, the intent of the provision in the 
    final rule authorizing advance VER determinations is to allow VER 
    questions to be fully settled in advance of permit application 
    preparation and review. We anticipate that advance VER determinations 
    would be subject to reconsideration during a subsequent permit 
    application review process only under exceptional circumstances, as 
    discussed below and in the preamble to the proposed rule. The final 
    rule establishes notice, comment, and public participation requirements 
    for the submission and processing of requests for VER determinations. 
    Therefore, the lack of opportunity for reconsideration of advance VER 
    determinations during a subsequent permit application review process 
    would not improperly abridge or violate the rights of citizens to 
    participate in the permitting process, as some commenters alleged.
        Circumstances that might justify reconsideration of an advance VER 
    determination include, but are not limited to, a material 
    misrepresentation of fact, discovery of new information that 
    significantly alters the basis of the VER determination, or a 
    substantial change in the nature of the intended operation (e.g., a 
    switch from underground mining methods to surface mining techniques).
        Under 30 CFR 773.15(c)(3)(ii), the regulatory authority may not 
    approve a permit application unless the agency first finds that the 
    proposed permit area is not within an area subject to the prohibitions 
    or limitations of 30 CFR 761.11. Therefore, when the permit application 
    review process documents or provides reason to believe that the basis 
    for a prior VER determination is false or inaccurate, the regulatory 
    authority has an obligation to withhold approval of the application 
    pending reevaluation of the VER determination by the agency responsible 
    for that determination. Without VER, the application would not meet the 
    criteria for permit approval in section 510(b)(4) of the Act 
    (documentation that ``the area proposed to be mined is not included 
    within an area designated unsuitable for surface coal mining pursuant 
    to section 522'') or 30 CFR 773.15(c)(3)(ii) (a demonstration that the 
    permit area is not subject to the prohibitions and limitations of 30 
    CFR 761.11).
        We recognize that the regulatory authority or the agency 
    responsible for the VER determination may not become aware of a 
    defective VER determination until after permit issuance. In these 
    circumstances, the regulatory authority should refer the information to 
    us, if we are responsible for the determination, or reconsider the 
    determination, if the regulatory authority is responsible for the 
    determination. Then, using any reconsidered VER determination, the 
    regulatory authority should, based upon written findings and subject to 
    administrative and judicial review, order that the permit be revised to 
    correct any deficiencies. See 30 CFR 774.11(b) and (c).
        A State regulatory authority may not reconsider or overturn a VER 
    determination that we make for lands for which we have exclusive 
    responsibility for VER determinations. However, the State may and 
    should notify us of any concerns, changes in fact, or apparent errors 
    in the determination. We will then reconsider the determination.
        In the preamble to the proposed rule, we referred to 
    reconsideration as de novo review. One commenter opposed allowing de 
    novo review of advance VER determinations under any circumstances, 
    arguing that to do so would violate the principles of res judicata. We 
    do not agree. In Belville Mining Co. v. U.S., 999 F.2d 989 (6th Cir. 
    1993), the court held that we have the authority to reconsider VER 
    determinations:
    
        Even where there is no express reconsideration authority for an 
    agency, however, the general rule is that an agency has inherent 
    authority to reconsider its decision, provided that reconsideration 
    occurs within a reasonable time after the first decision.
    
    Id. at 997 (citations omitted).
    
        The court also found that section 201(c)(1) of SMCRA, which 
    provides that the Secretary, acting through OSM, shall ``review and 
    vacate or modify or approve orders and decisions * * *,'' expressly 
    authorizes us to review and vacate erroneous VER determinations. Id.
        Reconsideration may take one of several pathways. If the reason for 
    reconsideration is an alleged misrepresentation of material facts, 
    reconsideration might involve reopening the record to enter new 
    information, investigating to determine whether misrepresentation of a 
    material fact occurred, and issuing a reconsidered VER determination 
    based on the record as supplemented by the new information. If the 
    reason for reconsideration is discovery of new information that 
    significantly alters the basis of the determination, reconsideration 
    might involve reopening the record and issuing a reconsidered VER 
    determination based on the record as supplemented by the new 
    information. If the reason for reconsideration is a substantial change 
    in the operation, such as a change from underground to surface mining, 
    reconsideration might involve seeking comment on whether the person has 
    demonstrated the property rights for that type of mining, reopening the 
    record to enter new information, and issuing a reconsidered VER 
    determination based on the revised record.
        One commenter argued that a change in the type of mining would 
    necessitate a completely new VER determination since each determination 
    is specific to a particular type of mining. We agree that a change of 
    this magnitude should involve a new notice and comment period. However, 
    we do not agree that a person must submit a completely new request for 
    a VER determination if there is a change in the type of surface coal 
    mining operations planned for the site. There is no need to resubmit 
    those parts of the original request and determination that are 
    unaffected by the
    
    [[Page 70818]]
    
    change. Completely discarding the original record and determination 
    could result in an unnecessary duplication of effort and waste of 
    resources on the part of both the requester and the reviewing agency. 
    We believe that the agency should determine the scope of the 
    reconsideration on a case-by-case basis. This approach also is 
    consistent with the goals established by the Paperwork Reduction Act, 
    44 U.S.C. 3501 et seq.
        The commenter also stated that misrepresentation of a material fact 
    does not justify de novo review, or, as we refer to it in this 
    preamble, reconsideration, of a VER determination. Instead, in his 
    view, the agency should seek judicial review, issuance of an 
    injunction, and possibly prosecution for fraud. For the reasons 
    discussed above, we do not agree that the agency is limited to these 
    alternatives or that reconsideration of the VER determination is 
    inappropriate. However, the alternatives listed by the commenter may be 
    useful measures to prevent the harm that may otherwise result from an 
    inaccurate or defective VER determination.
    
    XXII. How Does New 30 CFR 761.17, Which Concerns Regulatory 
    Authority Obligations at the Time of Permit Application Review, 
    Differ From Its Predecessor Provisions in Former 30 CFR 761.12?
    
        As discussed in Part XVIII of this preamble, we have revised and 
    redesignated paragraphs (a), (b)(1), (b)(2), and (f) of former 30 CFR 
    761.12 as paragraphs (a) through (d), respectively, of new 30 CFR 
    761.17. This section identifies actions that the regulatory authority 
    must take upon receipt of an application for a permit for surface coal 
    mining operations.
        Apart from minor organizational and editorial changes, paragraphs 
    (a) through (c) of 30 CFR 761.17 are substantively identical to the 
    rules that we proposed as 30 CFR 761.12(a) and (b) on January 31, 1997. 
    Most of our revisions reflect plain language principles. In addition, 
    we have corrected obsolete cross-references, added new cross-references 
    for clarity, more accurately characterized the exception provided in 30 
    CFR 761.11(c), and modified these paragraphs to maintain consistency 
    with the changes to the definition of VER in 30 CFR 761.5 and the 
    exception for existing operations in 30 CFR 761.12.
        To be consistent with changes in terminology adopted as part of the 
    permitting rules published on September 28, 1983 (48 FR 44349), we have 
    replaced the obsolete term ``complete application'' in paragraph (a) 
    with its current equivalent, ``administratively complete application.'' 
    We also are revising paragraph (a) to clarify that its requirements 
    apply to both applications for new permits and all applications for 
    permit revisions (including incidental boundary revisions) that involve 
    the addition of acreage not previously included within the permit 
    boundaries. Although we always have interpreted the somewhat ambiguous 
    term ``application for a surface coal mining operation permit'' in 30 
    CFR 761.12 as including applications for all types of permit boundary 
    revisions, this change will remove any question as to its meaning.
        We did not propose to revise former 30 CFR 761.12(f), which we have 
    now redesignated as 30 CFR 761.17(d). This paragraph of the rules 
    establishes procedures that the regulatory authority must follow when 
    it determines that a proposed surface coal mining operation will 
    adversely affect a publicly owned park or a place listed on the 
    National Register of Historic Places. However, one commenter expressed 
    the general concern that the proposed rule and its preamble did not 
    clearly specify that the VER exception, the exception for existing 
    operations, and the waivers and exceptions authorized by 30 CFR 
    761.11(c) through (e) operate independently of each other; i.e., that a 
    person who qualifies for one type of exception or waiver does not need 
    to comply with the requirements for other types of exceptions or 
    waivers. To address this concern, we have added paragraph (d)(3) to 30 
    CFR 761.17 to clarify that the joint approval requirements of 30 CFR 
    761.11(c) and the related procedural requirements of 30 CFR 761.17(d) 
    do not apply to lands to which the VER exception or exception for 
    existing operations applies.
        Section 761.17(d) contains no other substantive changes from former 
    Sec. 761.12(f). We have made some editorial and organizational changes 
    to more closely adhere to plain language principles.
    
    XXIII. How and Why Are We Revising Part 762, Which Contains 
    Criteria for the Designation of Lands as Unsuitable for Surface 
    Coal Mining Operations?
    
        Former 30 CFR 761.12(g) provided that, pursuant to petition, the 
    regulatory authority could consider lands listed in section 522(e) of 
    the Act for designation as unsuitable for surface coal mining 
    operations under 30 CFR Parts 762, 764, and 769. As discussed in Part 
    XVIII of this preamble, we determined that this paragraph would be more 
    appropriately placed in 30 CFR Part 762, which contains criteria and 
    other requirements for designation pursuant to the petition process. 
    Therefore, we are redesignating former 30 CFR 761.12(g) as 30 CFR 
    762.14. To accommodate this addition to Part 762, we are redesignating 
    former 30 CFR 762.14 as 30 CFR 762.15.
        We have revised the language of new 30 CFR 762.14 for clarity and 
    conformity with Part 762 and plain language principles. We intend no 
    substantive changes from former 30 CFR 761.12(g).
    
    XXIV. Section 772.12: What Are the Requirements for Coal 
    Exploration on Lands Designated Unsuitable for Surface Coal Mining 
    Operations?
    
        Under 30 CFR 772.11(a) and 772.12(a), a person who intends to 
    conduct any type of coal exploration on lands designated as unsuitable 
    for surface coal mining operations under subchapter F of 30 CFR Chapter 
    VII, which includes 30 CFR 761.11, must first obtain a permit in 
    accordance with 30 CFR 772.12. These regulations do not require 
    compliance with the prohibitions, restrictions, and procedural 
    requirements of 30 CFR Part 761. On June 22, 1988 (53 FR 23532), we 
    proposed a rule that would have required a VER demonstration as a 
    prerequisite for approval or issuance of an exploration permit on the 
    lands listed in 30 CFR 761.11 and section 522(e). However, we did not 
    adopt that provision as part of the final rule published on December 
    29, 1988 (53 FR 52942). At 53 FR 52945, the preamble to that rule 
    stated that we would reconsider the issue of VER demonstration 
    requirements for coal exploration after we adopted a new definition of 
    VER.
        The National Wildlife Federation and other groups challenged our 
    failure to adopt this provision of the proposed rule. Upon judicial 
    review, the U.S. District Court for the District of Columbia held that 
    we had failed to articulate a proper rationale for not adopting the 
    proposed rule. National Wildlife Fed'n v. Lujan, Nos. 89-0504, 89-1221 
    and 89-1614, slip op. at 25-33 (D.D.C. September 5, 1990). In response, 
    on July 18, 1991 (56 FR 33152), we proposed to add paragraph (b)(5) to 
    30 CFR 772.14 to require a VER demonstration as a prerequisite for 
    approval of coal exploration activities on the lands listed in 30 CFR 
    761.11 and section 522(e) if coal is to be removed for sale or 
    commercial use.
        On January 31, 1997 (62 FR 4836), we withdrew the 1991 proposal. In 
    its place, we proposed to add a new paragraph (b)(14) to 30 CFR 772.12, 
    the
    
    [[Page 70819]]
    
    section that contains permitting requirements for exploration that will 
    remove more than 250 tons of coal or that will occur on lands 
    designated as unsuitable for surface coal mining operations. Under the 
    proposed rule, a person planning to conduct exploration on lands listed 
    in section 522(e) or 30 CFR 761.11 would have had to submit an 
    application that includes a demonstration that (1) the exploration 
    activities will not substantially disturb the protected lands, (2) the 
    owner of the coal has demonstrated VER, (3) the exploration is needed 
    for mineral valuation purposes or is authorized by judicial order, or 
    (4) the applicant has obtained a waiver or exception authorized under 
    proposed 30 CFR 761.11(a)(2) through (5) [now 30 CFR 761.11(a) through 
    (e)].
        Similarly, the proposed rule would have added a new paragraph 
    (d)(2)(iv) to 30 CFR 772.12 to provide that the regulatory authority 
    may not approve an application for exploration unless it first finds 
    that the exploration activities described in the application will not 
    substantially disturb any lands listed in 30 CFR 761.11. If exploration 
    would substantially disturb those lands, the proposed rule would have 
    authorized approval of the application only when the regulatory 
    authority finds that the applicant has (1) demonstrated VER, (2) 
    obtained one of the waivers or exceptions authorized under proposed 30 
    CFR 761.11(a)(2) through (5) [now 30 CFR 761.11(a) through (e)], or (3) 
    demonstrated that the exploration is needed for mineral valuation 
    purposes or authorized by judicial order.
        Commenters were sharply divided on the merits and legality of the 
    proposed rules. After careful consideration, we have decided not to 
    proceed with the rules as proposed. Section 512 of SMCRA governs coal 
    exploration, and that section does not mention section 522(e) as one of 
    the provisions of the Act with which exploration must comply. Section 
    522(e) specifically limits the scope of its prohibitions and 
    restrictions to surface coal mining operations. And the definition of 
    surface coal mining operations in section 701(28) of the Act expressly 
    excludes ``coal explorations subject to section 512 of this Act.'' 
    Therefore, we believe that the Act provides insufficient basis for 
    rules that would impose a requirement for a VER demonstration as a 
    prerequisite for coal exploration on the lands listed in 30 CFR 761.11 
    and section 522(e).
        The preamble to the proposed rule also sought comment on whether we 
    should revise 30 CFR Part 772 and/or Part 761 to include a provision 
    similar to 30 CFR 762.14, which we are redesignating as 30 CFR 762.15, 
    either in addition to or in place of the proposed revisions to 30 CFR 
    772.12. Redesignated 30 CFR 762.15 provides that the regulatory 
    authority has an obligation to use the exploration permit application 
    review and approval process to ensure that exploration activities will 
    not interfere with any of the values for which the area has been 
    designated unsuitable for surface coal mining operations. However, this 
    section applies only to lands designated as unsuitable for surface coal 
    mining operations under the petition process in 30 CFR Part 762 and 
    section 522(a) of the Act.
        We have decided to adopt a modified version of this option rather 
    than the rule language that we proposed. Under the final rule, coal 
    exploration on lands listed in 30 CFR 761.11 and section 522(e) must be 
    designed to minimize, but not necessarily prevent, interference with 
    the values for which those lands were designated as unsuitable for 
    surface coal mining operations. In other words, to gain the approval of 
    the regulatory authority, an application for coal exploration on 
    protected lands must demonstrate that, to the extent technologically 
    and economically feasible, the operation has been designed to minimize 
    interference with the values for which the land was designated as 
    unsuitable for surface coal mining operations. However, the application 
    need not demonstrate that the operation will prevent all interference 
    with those values. Unlike the proposed rule language and, to some 
    extent, the alternative discussed in the preamble to that rule, the 
    provisions that we are adopting as part of the final rule do not 
    include any conditions that would prohibit coal exploration. Therefore, 
    we believe that the new provisions are consistent with the overall 
    regulatory scheme for coal exploration under section 512 of SMCRA 
    because they govern how coal exploration may be conducted, not whether 
    it may be conducted.
        The final rule modifies 30 CFR 772.12(b)(14) to require that each 
    application for coal exploration include, for any lands listed in 30 
    CFR 761.11, a demonstration that, to the extent technologically and 
    economically feasible, the proposed exploration activities have been 
    designed to minimize interference with the values for which those lands 
    were designated as unsuitable for surface coal mining operations. In 
    addition, the final rule requires that the application include 
    documentation of consultation with the owner of the feature causing the 
    land to come under the protection of 30 CFR 761.11, and, when 
    applicable, with the agency with primary jurisdiction over the feature 
    with respect to the values that caused the land to come under the 
    protection of 30 CFR 761.11. We added this provision in response to 
    comments that expressed concern about the potential impacts of coal 
    exploration on the lands listed in 30 CFR 761.11 and that urged the 
    inclusion of the agency with jurisdiction over the protected feature in 
    the decision-making process.
        The final rule also modifies 30 CFR 772.12(d)(2) by adding a new 
    paragraph (iv). That paragraph requires that, as a prerequisite for 
    issuance of a coal exploration permit for any lands listed in 30 CFR 
    761.11, the regulatory authority must find that the applicant has 
    demonstrated that, to the extent technologically and economically 
    feasible, the exploration and reclamation described in the application 
    will minimize interference with the values for which those lands were 
    designated as unsuitable for surface coal mining operations. Before 
    making this finding, the regulatory authority must provide reasonable 
    opportunity to the owner of the feature causing the land to come under 
    the protection of 30 CFR 761.11, and, when applicable, to the agency 
    with primary jurisdiction over the feature with respect to the values 
    that caused the land to come under the protection of 30 CFR 761.11, to 
    comment on whether the finding is appropriate.
        We added the latter provision in response to comments that 
    expressed concern about the potential impacts of coal exploration on 
    the lands listed in 30 CFR 761.11. The new provision also responds to 
    those commenters who urged us to revise the decision-making process to 
    include the agency with jurisdiction over the protected feature. 
    However, the final rule does not afford veto authority to the agency 
    with jurisdiction over the protected feature. To do so would be 
    inconsistent with the principles of State primacy under section 503 of 
    SMCRA. Instead, the new provision requires that the regulatory 
    authority consult with the agency with jurisdiction over the protected 
    feature in determining which values are important and how exploration 
    activities may be planned and conducted to minimize interference with 
    those values. The administrative record of the decision on the 
    exploration applications should indicate the disposition of all 
    relevant comments received from the agency with jurisdiction over the 
    protected feature.
        These rules do not ban exploration on any lands. Instead, they 
    require that the
    
    [[Page 70820]]
    
    adverse impacts of exploration activities on lands protected under 
    section 522(e) of the Act be minimized to the extent technologically 
    and economically feasible. In this respect, they are more protective of 
    the environment than the rule language that we proposed, which would 
    not have placed any unique restrictions on exploration if the 
    regulatory authority determined that a person had VER or qualified for 
    one of the other exceptions proposed in 30 CFR 772.12(b)(14).
        Finally, as a housekeeping measure, the final rule revises 30 CFR 
    772.12(d)(2)(ii) and (iii) to correct the manner in which they cite the 
    Endangered Species Act and the National Historic Preservation Act.
    
    XXV. Technical Amendments to Parts 773, 778, 780, and 784
    
        As shown in the following table, the organizational changes to Part 
    761 require revision of cross-references to Part 761 in other portions 
    of our regulations:
    
    ----------------------------------------------------------------------------------------------------------------
                    Regulation                      Old cross-reference                New cross-reference
    ----------------------------------------------------------------------------------------------------------------
    Sec.  773.13(a)(1)(v)....................  Sec.  761.12(d).............  Sec.  761.14
    Sec.  773.15(c)(3)(ii)...................  Secs.  761.11 and 761.12....  Sec.  761.11
    Sec.  778.16(c)..........................  Sec.  761.12................  Sec.  761.14 or 761.15
    Sec.  780.31(a)(2).......................  Sec.  761.12(f).............  Sec.  761.17(d)
    Sec.  780.33.............................  30 CFR 761.12(d)............  Sec.  761.14
    Sec.  784.17(a)(2).......................  Sec.  761.12(f).............  Sec.  761.17(d)
    Sec.  784.18.............................  30 CFR 761.12(d)............  Sec.  761.14
    ----------------------------------------------------------------------------------------------------------------
    
        To achieve consistency with the language of section 522(e) of the 
    Act, we also made the following technical corrections to the language 
    of those regulations:
         We replaced the term ``surface coal mining activities'' in 
    30 CFR 778.16(c) with ``surface coal mining operations.'' Part 778 
    applies to both surface and underground mines. Therefore, since section 
    522(e) applies to surface coal mining operations in general, the 
    information requirements of 30 CFR 778.16(c) for permit applications 
    that propose to disturb lands within the buffer zones for occupied 
    dwellings and public roads must apply to all proposed surface coal 
    mining operations within those buffer zones, not just to surface coal 
    mining activities.
         We revised the titles of 30 CFR 780.31 and 784.17 by 
    replacing the term ``public parks'' with ``publicly owned parks.'' We 
    separately define these terms in 30 CFR 761.5, and ``publicly owned 
    parks'' is the term that appears in section 522(e)(3) of the Act, 
    which, in relevant part, provides the basis for these regulations.
         We replaced the term ``underground mining activities'' in 
    30 CFR 784.18(a) with ``surface coal mining operations.'' Paragraph (b) 
    of the definition of ``underground mining activities'' in 30 CFR 701.5 
    includes underground operations that are not included in the definition 
    of surface coal mining operations in 30 CFR 700.5 and section 701(28) 
    of the Act. Since section 522(e) applies only to surface coal mining 
    operations, the underground operations described in paragraph (b) of 
    the definition of underground mining activities are not subject to the 
    provisions of 30 CFR Part 761 and section 522(e).
        In addition, since both 30 CFR 780.31(a)(2) and 784.17(a)(2) use 
    the term ``valid existing rights,'' we revised those rules to include a 
    cross-reference to the new VER determination rules at 30 CFR 761.16.
        Finally, we made minor editorial revisions to 30 CFR 
    773.15(c)(3)(ii), 778.16(c), 780.31(a)(2), and 784.17(a)(2) to improve 
    their accuracy, clarity, and consistency with plain language principles 
    and to better accommodate the new or revised cross-references.
    
    XXVI. What Effect Will This Rule Have in Federal Program States and 
    on Indian Lands?
    
        Through cross-referencing in the respective regulatory programs, 
    this final rule applies to all lands in States with Federal regulatory 
    programs. States with Federal regulatory programs include Arizona, 
    California, Georgia, Idaho, Massachusetts, Michigan, North Carolina, 
    Oregon, Rhode Island, South Dakota, Tennessee and Washington. These 
    programs are codified at 30 CFR Parts 903, 905, 910, 912, 921, 922, 
    933, 937, 939, 941, 942, and 947, respectively.
        The revisions to 30 CFR Part 761 apply to Indian lands by virtue of 
    the incorporation of this part by reference in 30 CFR 750.14. Revised 
    30 CFR Part 772 applies to coal exploration on Indian lands to the 
    extent provided in 30 CFR 750.15.
        In the preamble to the proposed rule, we invited the public to 
    comment on whether there are unique conditions in any Federal program 
    States or on Indian lands that should be reflected in the national 
    rules or as specific amendments to the Federal programs or Indian lands 
    rules. Since no commenters identified any unique conditions or 
    amendment needs, the final rules do not include any changes to the 
    Indian lands rules or individual Federal programs.
        One commenter stated that we should not adopt a final rule without 
    seeking input from affected Indian nations and obtaining approval from 
    both recognized Indian governmental entities and traditional elders who 
    hold to native religions and traditions. As described in Part I of this 
    preamble, we provided the public and all other interested parties ample 
    notice and opportunity to comment on the proposed rule, as required by 
    the Administrative Procedure Act, 5 U.S.C. 553. In developing the final 
    rule, we gave serious consideration to all substantive comments 
    received. Neither SMCRA nor any other Federal law or regulation 
    requires that we obtain the approval of Indian governmental entities 
    and traditional elders (or any other potentially affected parties) 
    before adopting a final rule.
    
    XXVII. How Will This Rule Affect State Programs?
    
        We will evaluate State regulatory programs approved under 30 CFR 
    Part 732 and section 503 of the Act to determine whether any changes in 
    these programs are necessary to maintain consistency with Federal 
    requirements. If we determine that a State program provision needs to 
    be amended as a result of these revisions to the Federal rules, we will 
    notify the State in accordance with 30 CFR 732.17(d).
        Section 505(a) of the Act and 30 CFR 730.11(a) provide that SMCRA 
    and Federal regulations adopted under SMCRA do not supersede any State 
    law or regulation unless that law or regulation is inconsistent with 
    the Act or the Federal regulations adopted under the Act. Section 
    505(b) of the Act
    
    [[Page 70821]]
    
    and 30 CFR 730.11(b) provide that we may not construe existing State 
    laws and regulations, or State laws and regulations adopted in the 
    future, as inconsistent with SMCRA or the Federal regulations if these 
    State laws and regulations either provide for more stringent land use 
    and environmental controls and regulations or have no counterpart in 
    the Act or the Federal regulations.
        Under 30 CFR 732.15(a), State programs must provide for the State 
    to carry out the provisions of, and meet the purposes of, the Act and 
    its implementing regulations. In addition, that rule requires that 
    State laws and regulations be in accordance with the provisions of the 
    Act and consistent with the Federal regulations. As defined in 30 CFR 
    730.5, ``consistent with'' and ``in accordance with'' mean that the 
    State laws and regulations are no less stringent than, meet the minimum 
    requirements of, and include all applicable provisions of the Act. The 
    definition also provides that these terms mean that the State laws and 
    regulations are no less effective than the Federal regulations in 
    meeting the requirements of the Act. Under 30 CFR 732.17(e)(1), we may 
    require a State program amendment if, as a result of changes in SMCRA 
    or the Federal regulations, the approved State program no longer meets 
    the requirements of SMCRA or the Federal regulations.
        In the preamble to the proposed rule, we solicited comments on 
    whether State program VER definitions must be amended to include 
    standards identical to those of the revised Federal definition to be no 
    less effective than the revised Federal definition. We received few 
    comments on this point, and those that we did receive took opposing 
    positions. In general, commenters from both industry and the 
    environmental community argued that we should require that States adopt 
    definitions identical to ours if we adopted the particular VER 
    definition that the commenter advocated. Otherwise, they favored 
    allowing States to retain their existing definitions. We did not find 
    these comments logical or persuasive.
        One commenter argued that States should not have to change their 
    VER definitions and procedures merely because we adopt a new definition 
    and procedures, especially since States have not experienced problems 
    using their current definitions and procedures. We do not agree. Under 
    30 CFR 730.5 and 732.17(e)(1), the standard for determining whether a 
    program change is necessary in response to a new or revised Federal 
    rule is whether the State program provisions are no less effective than 
    our regulations in meeting the requirements of the Act. Our adoption of 
    a new definition of VER and related procedural rules determines the 
    extent to which persons are eligible to receive permits for surface 
    coal mining operations on lands protected under section 522(e) of the 
    Act. Therefore, we will evaluate State programs to determine whether 
    existing State program provisions would protect the lands listed in 
    section 522(e) to the same extent as our rules and whether they would 
    provide similar opportunity for public participation in the decision-
    making process. Contrary to the commenter's arguments, past performance 
    and the question of whether the public has identified problems with 
    existing State program provisions are not relevant to this 
    determination since this final rule alters the standards for VER (and 
    hence the degree of protection for section 522(e) lands), as well as 
    the opportunity for public participation.
        We specifically sought comment on whether we should require those 
    States with an approved takings standard for VER to remove this 
    standard or whether the rationale that we relied upon to approve the 
    takings standard in the Illinois definition of VER remains valid. See 
    30 CFR 917.15(j) and 54 FR 123, January 4, 1989. In other words, could 
    the takings standard be considered no less effective than the good 
    faith/all permits standard in achieving the purposes and requirements 
    of the Act even though it purportedly balances the purposes of the Act 
    and section 522(e) in a different manner with potentially different 
    results in terms of the level of protection afforded to the areas 
    listed in section 522(e) of the Act? Commenters were divided on this 
    issue as well, depending upon which VER definition they favored.
        As previously noted, under 30 CFR 730.5 and 732.17(e)(1), the 
    standard for determining whether a State program amendment is necessary 
    in response to new or revised Federal regulations is whether the State 
    program provisions are no less effective than our regulations in 
    meeting the requirements of the Act. The final environmental impact 
    statement (EIS) for this rulemaking describes the takings standard as 
    likely to be somewhat less protective of the lands listed in section 
    522(e) than the good faith/all permits standard. Specifically, the 
    model used in the EIS analysis predicts that application of a takings 
    standard nationwide would result in the mining of an additional 185 
    acres of section 522(e)(1) lands, 1,686 acres of Federal lands in 
    eastern national forests, and 984 acres in State parks between 1995 and 
    2015. See Table V-1 of the EIS. Therefore, we anticipate that States 
    would have difficulty justifying retention of a takings standard for 
    VER unless they can convincingly demonstrate that the State program 
    would ensure that application of the takings standard would be no less 
    protective of section 522(e) lands than the good faith/all permits 
    standard in the rule that we are adopting today.
        One commenter noted that we previously approved the takings 
    standard in the Illinois program partly on the basis of the argument 
    that section 522(e) has multiple purposes of equal importance. In the 
    preamble to that decision, we stated that the purposes of section 
    522(e) include protection of the lands listed therein, preservation of 
    valid property rights, and avoidance of compensable takings. According 
    to the preamble, the takings standard is consistent with the Act and no 
    less effective than the good faith/all permits standard even though the 
    takings standard accords greater weight to protection of the rights of 
    mineral owners and avoidance of compensable takings than it does to 
    protection of the lands listed in section 522(e). See 54 FR 120, 
    January 4, 1989. The commenter argued that we should apply the same 
    principle in evaluating State VER definitions today. We disagree.
        We no longer adhere to the position stated in the 1989 preamble. As 
    discussed in Part VII.C. of this preamble, we believe that the purpose 
    of section 522(e) is to prohibit new surface coal mining operations on 
    the lands listed in that section, with certain exceptions. And, as we 
    state in that discussion, in view of the purpose of section 522(e), we 
    do not agree that VER must or should be defined in a way that would 
    avoid all compensable takings. Therefore, we do not expect that an 
    argument that the takings standard is more protective of the rights of 
    the mineral owners and is more likely to avoid compensable takings than 
    the good faith/all permits standard will provide sufficient 
    justification for retention of the takings standard as no less 
    effective than the good faith/all permits standard in protecting the 
    lands listed in section 522(e).
        One commenter argued that since we had previously approved the 
    Illinois takings standard as no less effective than the good faith/all 
    permits standard, we could not now find Illinois' use of the takings 
    standard to be less effective than the good faith/all permits standard 
    in our proposed rule. We disagree. We based our prior approval of the 
    Illinois standard on, among other things, an interpretation of the 
    legislative history
    
    [[Page 70822]]
    
    of SMCRA and pertinent court decisions that we no longer believe to be 
    appropriate. As discussed in Part VII.C. of this preamble, we no longer 
    believe that the legislative history of SMCRA requires that we define 
    VER in a way that completely avoids compensable takings. Therefore, the 
    fact that we also based our prior approval of the Illinois definition 
    on the argument that a takings standard is appropriate and necessary to 
    avoid compensable takings under the Illinois Constitution is not 
    relevant to an evaluation of whether the Illinois takings standard is 
    no less effective than the good faith/all permits standard.
    
    XXVIII. How Does This Rule Impact Information Collection 
    Requirements?
    
        The final rule does not alter the information collection burden 
    associated with Parts 740, 745, 772, 773, 778, 780, and 784. However, 
    the final rule includes editorial revisions to Secs. 740.10, 745.10, 
    and 772.10 to maintain consistency with Departmental guidance 
    concerning the format and content of these sections.
        In addition, we have revised section 761.10 to reflect the 
    information collection burden changes resulting from the rule changes 
    that we are adopting today.
    
    XXIX. Procedural Matters
    
    A. Executive Order 12866: Regulatory Planning and Review
    
        This document is a significant rule and has been reviewed by the 
    Office of Management and Budget under Executive Order 12866.
        (1) This rule will not have an effect of $100 million or more on 
    the economy. It will not adversely affect in a material way the 
    economy, productivity, competition, jobs, the environment, public 
    health or safety, or State, local, or tribal governments or 
    communities. This determination is based on a cost-benefit analysis 
    prepared for the final rule. The cost-benefit analysis indicated that 
    the cost increase resulting from the rule will be negligible. A copy of 
    the analysis is available for inspection at the Office of Surface 
    Mining, Administrative Record--Room 101, 1951 Constitution Avenue, 
    N.W., Washington, DC 20240. You may obtain a single copy by writing us 
    or calling 202-208-2847. You may also request a copy via the Internet 
    at osmrules@osmre.gov.
        (2) This rule will not create a serious inconsistency or otherwise 
    interfere with an action taken or planned by another agency. The rule 
    will not significantly change costs to industry or to the Federal, 
    State, or local governments. Furthermore, the rule will have no 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.
        (3) This rule does not alter the budgetary effects of entitlements, 
    grants, user fees, or loan programs or the rights or obligations of 
    their recipients because the rule does not affect such items.
        (4) This rule raises novel legal and policy issues as discussed in 
    the preamble.
    
    B. Regulatory Flexibility Act
    
        Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., 
    the Department of the Interior certifies that this rule will not have a 
    significant economic impact on a substantial number of small entities. 
    This certification is based on the findings that the rule will not 
    significantly change costs to industry or to Federal, State, or local 
    governments. Furthermore, the rule will have no 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.
    
    C. 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, because it will not:
         Have an annual effect on the economy of $100 million or 
    more.
         Cause a major increase in costs or prices for consumers; 
    individual industries; Federal, State, or local government agencies; or 
    geographic regions because the rule does not impose any substantial new 
    requirements on the coal mining industry, consumers, or State and local 
    governments. It essentially codifies current policy.
         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.
    
    D. Unfunded Mandates Reform Act of 1995
    
        This 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, 
    local, or Tribal governments or the private sector. Therefore, a 
    statement containing the information required by the Unfunded Mandates 
    Reform Act, 1 U.S.C. 1531, et seq., is not required.
    
    E. Executive Order 12630: Takings
    
        In accordance with Executive Order 12630 (March 18, 1988) and the 
    ``Attorney General's Guidelines for the Evaluation of Risk and 
    Avoidance of Unanticipated Takings,'' dated June 30, 1988, the 
    Department has prepared a takings implication assessment, which has 
    been made a part of the administrative record for this rulemaking and 
    is set forth below:
        Section 522(e) of SMCRA provides that, subject to VER (and with 
    certain other specified exceptions), no surface coal mining operations 
    shall be permitted on certain lands designated by Congress. As stated 
    in the preceding parts of this preamble, the final rule defining VER 
    establishes a good faith/all permits standard for VER under section 
    522(e).
        Under the good faith/all permits standard, a person would have VER 
    if, prior to the date the land came under the protection of section 
    522(e), the person or a predecessor in interest had all necessary 
    property rights and had obtained, or made a good faith effort to 
    obtain, all State and Federal permits and other authorizations required 
    to conduct surface coal mining operations.
        The final rule may have some significant, but unquantifiable, 
    takings implications. We do not expect that a court would find that 
    this final rule constitutes a facial taking, because, as discussed in 
    Part VI of this preamble, that issue was litigated in 1979-80, in PSMRL 
    I, Round I, 14 Env't Rep. Cas. (BNA) 1083 (1980).
    1. No Facial Takings
        It is unlikely that the good faith/all permits standard would be 
    determined to constitute a facial taking. This standard is a 
    modification of the ``all permits'' standard adopted on March 13, 1979, 
    which required that a person demonstrate valid issuance by August 3, 
    1977 of all necessary State and Federal permits.
        The rule was challenged in PSMRL I, Round I, 14 Env't Rep. Cas. 
    (BNA) at 1090-92 (1980), as effecting a compensable taking of property. 
    While the court declined to address the constitutionality of the VER 
    definition, it found that a person who applies for all permits, but 
    fails to receive one or more through government delay, engenders the 
    same investments and expectations as a person who has obtained all 
    permits. Therefore, the court found that a good faith attempt to
    
    [[Page 70823]]
    
    obtain all permits before August 3, 1977, should suffice for purposes 
    of VER. The court remanded to the Secretary that portion of the 
    definition that required the property owner actually to have obtained 
    all permits necessary to mine.
    2. Likelihood of Compensable Takings
        In evaluating takings claims for compensation concerning government 
    regulatory actions, the courts have typically considered three factors 
    on a fact-specific, case-by-case basis: the character of the 
    governmental action, the economic impact of the action, and the extent 
    to which the government action interferes with reasonable investment-
    backed expectations. See Penn Cent. Transp. Co. v. New York City, 438 
    U.S. 104, 124 (1978). Because of the scope of the final rule and the 
    lack of information on specific property interests that might be 
    affected, this assessment cannot predict or evaluate the effects of the 
    final rule on property rights. However, most States have been applying 
    the good faith/all permits standard or a similar standard since the 
    inception of state regulatory primacy under SMCRA, so experience to 
    date with this standard provides some indication of the likelihood of 
    future compensable takings. In light of this history, the assessment 
    will discuss generally the anticipated impacts of the final rule, and 
    compare them to the impacts of the other alternatives considered.
        a. History. History does not suggest that the promulgation of a 
    good faith/all permits standard would result in a significant number of 
    takings compensation awards. Twenty State programs currently include 
    either the good faith/all permits standard (15 States) or the all 
    permits standard (5 States); we also have used the good faith/all 
    permits standard for a number of years. Two State programs use a 
    takings standard, one uses only the needed for and adjacent standard, 
    and one State has no VER definition. We are not aware of any instance 
    in which the States' use of these standards has resulted in a judicial 
    determination of a compensable taking.
        Likewise, use of these standards has not resulted in any financial 
    compensation in those instances where our application of the standard 
    has resulted in litigation.
        The question of whether application of the good faith/all permits 
    standard for VER effects a compensable taking was examined by the court 
    in Sunday Creek Coal Co. v. Hodel (``Sunday Creek''), No. 88-0416, slip 
    op. (S.D. Ohio June 2, 1988). In Sunday Creek, applying Ohio's 
    counterpart to the good faith/all permits standard, we found that the 
    plaintiff did not have VER. The court ruled that our application of 
    Ohio's VER standard would deprive Sunday Creek of its property rights 
    in violation of the Fifth Amendment. The court therefore reversed our 
    negative VER determination. In another case that considered the 
    question of VER, Belville Mining Co. v. United States (``Belville 
    II''), No. C-1-89-874 (S.D. Ohio), the court simply assumed that if an 
    applicant could demonstrate a right to strip mine, then denial of VER 
    would constitute a ``taking'' of that applicant's interest. These two 
    decisions indicate that, at least in Ohio, a Federal court would be 
    likely to conclude that application of the good faith/all permits 
    standard for VER would effect a compensable taking. However, the United 
    States Court of Federal Claims has exclusive jurisdiction to hear 
    takings claims against the Federal government.
        While the likelihood of some degree of financial exposure exists, 
    based on the above data, we believe that adoption of a good faith/all 
    permits standard will not result in any change in the Government's 
    financial exposure.
        b. Character of the Governmental Action. The purpose served and the 
    statutory provisions implemented by this final rulemaking are discussed 
    in the preamble to the final rule. The final rule substantially 
    advances a legitimate public purpose. The legitimate public purpose is 
    the implementation of the protections for specified areas set forth in 
    section 522(e) of SMCRA. In that section, Congress determined that 
    subject to certain exceptions, including valid existing rights, surface 
    coal mining is prohibited on specified lands because such mining is 
    incompatible with the values for which those lands were designated as 
    unsuitable for surface coal mining operations.
        The final rule substantially advances that purpose in several 
    respects.
        First, the final rule informs interested persons of what our 
    interpretation and application of section 522(e) will be. Further, the 
    rule sets out the procedures to be followed in implementation of 
    section 522(e). Thus, the rule provides greater certainty, clarity, and 
    predictability in implementation of section 522(e).
        Second, the rule advances Congress' purpose of protecting the areas 
    specified in section 522(e), by providing that the primary VER 
    exception for mining in those protected areas applies only to the 
    extent that a person can demonstrate that a good faith effort had been 
    made to obtain all required permits for a surface coal mining operation 
    before the area came under the protection of section 522(e). (As 
    discussed in the preamble to the final rule, the rulemaking also 
    addresses other VER standards that may apply, and other exceptions to 
    section 522(e).) The final definition of VER thus advances the 
    regulatory scheme Congress developed to prevent the harms which surface 
    coal mining operations would cause in those areas.
        We do not know of any other property use or actions that would 
    significantly contribute to the problems caused by surface coal mining 
    operations in such areas.
        c. Economic Impact.
    Affected Property Interests
        The property interests that could be affected by this rule are 
    primarily coal rights in section 522(e) areas. We cannot determine in 
    advance which coal rights would be affected by the eventual application 
    of this final rule, or what value those rights would have. However, 
    under both the good faith/all permits standard and the needed for and 
    adjacent standard in this final rule, the person requesting the VER 
    determination must first demonstrate the requisite underlying property 
    right to mine the coal by the proposed method. Thus, those coal owners 
    that cannot demonstrate the requisite property right would not be able 
    to demonstrate VER.
        In many instances, a coal holder may not be able to demonstrate the 
    requisite property right to surface mine coal. This is the case when 
    the coal rights were severed at such an early date that, under state 
    property law, no right to surface mine was conveyed. In those cases, 
    denial of VER to surface mine would not be a compensable taking, 
    because no property rights would have been taken. See the discussion of 
    this topic in Final Environmental Impact Statement OSM-EIS-29, entitled 
    ``Proposed Revisions to the Permanent Program Regulations Implementing 
    Section 522(e) of the Surface Mining Control and Reclamation Act of 
    1977 and Proposed Rulemaking Clarifying the Applicability of Section 
    522(e) to Subsidence from Underground Mining'' (July, 1999), and the 
    accompanying Final Economic Analysis (EA) entitled ``Proposed Revisions 
    to the Permanent Program Regulations Implementing Section 522(e) of the 
    Surface Mining Control and Reclamation Act of 1977 and Proposed 
    Rulemaking Clarifying the Applicability of Section 522(e) to Subsidence 
    from Underground Mining'' (July, 1999). As discussed in the EIS and EA, 
    we have no means of precisely
    
    [[Page 70824]]
    
    estimating how many such instances will occur.
        In all other instances, if we find that a person does not have VER 
    and a takings claim is filed with the United States Court of Federal 
    Claims, that court would evaluate the claim. Because of the 
    geographical scope and complexity of this rulemaking, we do not have 
    sufficient information to accurately predict or evaluate the incidence 
    of such claims, or their likely merits. There is no data base that 
    definitively or reliably lists all properties protected under section 
    522(e), or the nature or extent of individual coal rights included in 
    such areas. Such a list would not remain current for any appreciable 
    time because individual properties would be added or removed on a 
    continual basis as protected features come into existence, evolve, and 
    sometimes disappear. Even if it could be determined which coal rights 
    are subject to section 522(e), it cannot reliably be predicted which 
    coal an owner might seek to mine or for which lands a VER determination 
    would be necessary.
    Likely Degree of Economic Impact, Character and Present Use of 
    Property, and Mitigating Benefits
        Similarly, because we cannot predict what VER determinations may be 
    necessary, we cannot predict the likely degree of economic impact on 
    the underlying property interests from application of this final rule. 
    However, in general, application of the final rule might result in more 
    economic impact on underlying property interests than would occur under 
    the other alternatives considered. This greater impact could occur 
    because, compared to those other alternatives, more holders of coal 
    rights may be unable to mine the coal under the final rule because they 
    could not demonstrate VER under the good faith/all permits standard.
        However, as discussed in the EIS and in this preamble, holders of 
    coal rights do access the coal on lands protected by section 522(e) by 
    methods other than the VER exception. These methods include the 
    compatibility findings, waivers and joint approvals authorized under 
    paragraphs (e)(2) through (e)(4) of section 522 as well as outright 
    purchase of a protected feature such as an occupied dwelling to remove 
    it from protected status.
        We do not have information on the character and present use of 
    individual affected properties. Likewise, we do not have the specific 
    information necessary to evaluate the extent to which, in particular 
    cases, the benefits to the property holder from applying the 
    prohibitions of section 522(e) offset or otherwise mitigate the adverse 
    economic impact of applying those prohibitions. In general, application 
    of the prohibitions is expected to ensure that incompatible use is not 
    made of such lands, where Congress has determined that surface coal 
    mining operations are an incompatible use. The availability of other 
    alternatives to the final rule is discussed below.
        d. Interference with reasonable investment-backed expectations. 
    Whether a coal holder has reasonable investment-backed expectations, 
    and the degree to which application of the final rule might interfere 
    with those expectations, cannot be determined until the coal holder has 
    requested a determination or finding that a particular exception to the 
    prohibitions and restrictions of section 522(e) applies. However, 
    application of the final rule might result in more interference with 
    reasonable investment-backed expectations than would occur under the 
    other alternatives considered. Compared to the other alternatives, more 
    holders of coal rights may be unable to mine the coal under the final 
    rule because they could not demonstrate VER under the good faith/all 
    permits standard. However, any such interference could be limited by 
    factors such as the following:
        In many cases, holders of coal rights in section 522(e) areas will 
    not request VER, either because the holder determines that the coal is 
    not economically minable, or because the holder determines that it is 
    less costly to obtain some other exception, such as a compatibility 
    finding or a waiver, from the prohibitions of section 522(e).
        In other cases, under State property law, where the mineral rights 
    have been severed from the surface estate, we expect that holders of 
    coal rights would not have the necessary property right to surface mine 
    the coal, as discussed in more detail in the EIS and EA. These holders 
    could have no reasonable expectation of surface mining the coal.
        If the holder of coal rights purchased those rights after the land 
    came under the protections of section 522(e), the purchaser would be on 
    notice of the applicability of the prohibitions in section 522(e). If 
    the purchaser unsuccessfully requested a determination or finding that 
    a particular exception under section 522(e) applied, and filed a 
    takings claim concerning denial of the request, it is likely that the 
    United States Court of Federal Claims would deem the purchaser to be on 
    notice concerning the prohibitions and the exceptions. Thus, we would 
    expect the court to find that the purchaser could have no reasonable 
    expectation of evading the application of those requirements. In some 
    cases, it is also likely that the court would find no reasonable 
    expectation of mining under an exception. And if there is no reasonable 
    expectation of mining, we would not expect the court to find that 
    reasonable investment-backed expectations exist.
        If a coal holder has made no significant expenditures, the holder 
    probably would be unable to demonstrate sufficient investment-backed 
    expectations to support a takings claim. Similarly, if VER for surface 
    mining were denied, but underground mining were possible and 
    economical, we expect that a takings claim would be difficult to 
    sustain. Also, if a coal holder does not demonstrate VER, the holder 
    may nonetheless be eligible for another exception to the prohibitions 
    and restrictions of section 522(e), such as a compatibility finding or 
    a waiver. The prohibitions and restrictions would not apply if the coal 
    holder demonstrated that the other exception applies. We expect that a 
    takings claim for denial of VER would be difficult to sustain if the 
    holder failed to utilize another available exception--particularly in 
    light of the fact that these other exceptions are used relatively 
    often.
    
    Summary of Takings Implications for Section 522(e) Lands
    
        To provide a basis for comparing the relative environmental and 
    economic impacts of the final rule and the alternatives, we developed 
    impact estimates by using a model that relied on specific methodologies 
    and assumptions. For purposes of this assessment, the evaluation of 
    takings implications utilizes in part the analyses set out in the EIS 
    and EA for the final rule. The EIS and EA discussions of the 
    alternatives summarize the number of acres estimated to be disturbed 
    under each VER alternative over a 20-year period.
        Because of the difficulty in predicting the extent of actual mining 
    in protected areas under this rule, we could not predict the actual 
    impacts of the alternatives. Therefore, the EIS and EA estimates of 
    coal acreage that could be mined under the good faith/all permits 
    alternative and the other alternatives are relevant to this assessment 
    only to the limited extent that they show the anticipated relative 
    economic impacts of the final rule, compared to the other alternatives. 
    Tables V-1 through V-5 of the EIS show relative amounts of coal acreage 
    estimated to be mined over a 20-year period under the different
    
    [[Page 70825]]
    
    alternatives, as calculated using the model.
        Generally speaking, these analyses assume that:
        (1) Relatively few persons would be able to demonstrate VER under a 
    good faith/all permits standard.
        (2) For some categories of lands, more persons might be able to 
    demonstrate VER under a good faith/all permits or takings standard, and 
    that in some cases, even more persons might be able to demonstrate VER 
    under an ownership and authority standard.
        (3) The impacts of the bifurcated alternative would be somewhere 
    between the impacts of the good faith/all permits standard and those of 
    the ownership and authority standard.
        In general, as stated, the good faith/all permits standard is more 
    likely to limit surface coal mining operations. As a result, more 
    takings claims would be expected to be filed under a good faith/all 
    permits standard. Whether courts would find that a negative VER 
    determination under the good faith/all permits standard constituted a 
    compensable taking should turn on the specific property rights 
    involved.
        Based upon available information, including the EIS and EA for the 
    final rule, and a survey of historical data concerning permitting, we 
    anticipate that the final rule will have the following takings impacts.
        Section 522(e)(1) lands: These areas include National Park lands, 
    National Wildlife Refuge lands, National Trails, National Wilderness 
    Areas, Wild and Scenic Rivers and study rivers, and National Recreation 
    Areas. We anticipate relatively few takings impacts in (e)(1) areas 
    because there has been a relative dearth of VER determinations and any 
    resulting takings claims concerning (e)(1) areas since the enactment of 
    SMCRA.
        Further, as previously discussed, the Secretary's 1988 policy 
    concerning exercise of VER in (e)(1) areas remains in effect. That 
    policy states that, if a person acts to exercise VER on (e)(1) lands, 
    then, subject to appropriation, the Secretary will use available 
    authorities to seek to acquire the rights through exchange, negotiated 
    purchase, or condemnation.
        All of this suggests that there may continue to be few VER 
    requests, little economic impact, few takings cases, and even fewer 
    takings awards in (e)(1) areas.
        Surface mining: As discussed in the EA, we anticipate that in many 
    cases a compensable taking for denial of VER to surface mine would not 
    be found, because the requisite property right to surface mine coal 
    could not be demonstrated. And in many cases, if VER for surface mining 
    were denied, underground mining would still be a reasonable remaining 
    use of the coal, so a takings award would not be likely for denial of 
    VER to surface mine in section 522 (e)(1) areas.
        Underground mining: As explained in a separate rulemaking published 
    in today's Federal Register, the prohibitions of section 522(e) do not 
    apply to subsidence from underground mining operations. Therefore, we 
    expect that any takings award for denial of VER for surface activities 
    in connection with underground mining would be limited to coal that 
    could not be mined from portals outside the (e)(1) area.
        Section 522(e)(2) lands: These areas consist of Federal lands 
    within national forests. For the reasons summarized below, we 
    anticipate relatively few takings from VER determinations on (e)(2) 
    lands.
        Surface mining: We anticipate that no takings claims would arise 
    from application of the good faith/all permits standard in surface 
    mining VER determinations in western national forests and national 
    grasslands. Coal owners in the western (e)(2) areas have never pursued 
    surface mining VER determinations, but rather have obtained 
    compatibility findings under section 522(e)(2). We anticipate that some 
    acreage might be precluded from surface mining, and some takings claims 
    might arise, concerning surface mining VER determinations in eastern 
    national forests.
        For surface coal mining, we do not expect that a court would find 
    that a compensable taking exists if underground mining is an 
    economically and technically feasible alternative. In the absence of 
    VER for surface mining, most owners could qualify for a compatibility 
    exception for underground mining, so underground mining would be a 
    reasonable remaining use. As discussed in the EIS and EA, we anticipate 
    that in a substantial number of cases (a higher proportion in the 
    eastern coal fields), a court would find no property right to surface 
    mine under State property laws. This is because the coal in many cases 
    was severed from the surface rights relatively early, when surface 
    mining was not common at the time and place of severance. As a result, 
    under State property law, typically the coal owner would not have the 
    necessary right to surface mine. We do not have information on actual 
    dates of severance of coal rights. There might also be mitigation of 
    takings in those limited instances where the United States decides to 
    purchase coal rights.
        Underground mining: The (e)(2) compatibility exception would 
    continue to apply. Therefore, we expect few takings claims from denial 
    of VER for underground mining in national forests, because we assume 
    that virtually all underground mining could qualify for a compatibility 
    finding. This is based in part on the fact that the Multiple-Use 
    Sustained Yield Act and the National Forest Management Act establish 
    multiple use as the guiding principle for management of national forest 
    lands, and in part on the fact that, in the past, requests for 
    compatibility findings have never been denied. Surface operations and 
    impacts associated with underground mining generally disturb only a 
    relatively minimal amount of the land surface. Roads and surface 
    facilities can generally be sited in such a way as to avoid significant 
    impacts on other land uses such as timber production, livestock 
    grazing, and recreation.
        Section 522(e)(3) lands: These areas include lands where surface 
    coal mining operations would adversely affect a publicly owned park or 
    site on the National Register of Historic Places. We do not anticipate 
    that any significant takings would occur on (e)(3) lands as a result of 
    surface or underground mining VER determinations. Pursuant to (e)(3), 
    jurisdictional agencies, together with the regulatory authority, may 
    approve mining in the vicinity of protected areas, and thus waive the 
    prohibition of (e)(3). A sampling of permit records indicated that some 
    such mining has occurred, but no VER requests were located for such 
    areas. Therefore, we anticipate that, in many cases, operations may 
    avoid such sites or resolve any jurisdictional agency concerns about 
    mining impacts, so that the jurisdictional agency and the regulatory 
    authority would jointly approve mining pursuant to (e)(3). In such 
    cases, a VER determination would be unnecessary.
        Section 522(e)(4) lands: These areas include lands within one 
    hundred feet of the right of way of a public road. We anticipate 
    relatively few takings claims concerning VER determinations for (e)(4) 
    areas. Coal mines now tend to avoid areas with numerous roads and 
    streets because of increased acquisition and public safety-related 
    costs of mining in such areas. In the vast majority of cases, an 
    exception to the prohibition of (e)(4) is obtained under the waiver 
    provision of (e)(4), rather than through a VER determination. 
    Therefore, we do not expect the choice of a VER standard to have a 
    major effect on takings claims for coal located within the buffer zones 
    for public roads. As noted above, our
    
    [[Page 70826]]
    
    survey of permitting data located only a few instances of VER 
    determinations for (e)(4) areas.
        Section 522(e)(5) lands: These areas include lands within 300 feet 
    of an occupied dwelling, public building, school, church, community or 
    institutional building, or public park, or within 100 feet of a 
    cemetery. We anticipate relatively little economic impact for takings 
    purposes on (e)(5) areas other than (e)(5) public park lands.
        The survey of permit files indicated that in most cases (more than 
    85%), mining near dwellings occurs because (e)(5) waivers are 
    negotiated with dwelling owners. Therefore, we expect that VER would 
    not be necessary and would continue not to be pursued in most such 
    areas. Proposals to mine in areas occupied by public buildings, 
    schools, churches, and cemeteries are typically limited. It is usually 
    less expensive for the operator to avoid such areas, rather than to pay 
    the costs of seeking VER, avoiding material damage where prohibited, 
    and paying reclamation costs.
        In addition, the permit survey did not disclose any instances of 
    VER requests for mining in the areas around non-NPS public parks 
    protected under (e)(5). However, our model does anticipate that in the 
    next 20 years substantial coal acreage in (e)(5) public parks might be 
    precluded from mining as a result of underground mining VER 
    determinations under the final rule, and a relatively smaller but still 
    significant acreage might be precluded from surface mining as a result 
    of surface mining VER determinations under the final rule. Some portion 
    of that acreage could result in takings awards.
    3. Alternatives to the Final Rule
        As summarized above in this assessment, and as discussed in detail 
    in the EIS and the EA, we developed and considered three alternatives 
    to the good faith/all permits standard for VER. They are the good 
    faith/all permits or takings (GFAP/T) standard, the ownership and 
    authority standard, and the bifurcated alternative. The good faith/all 
    permits standard has the greatest potential for takings implications, 
    and we have found no way to minimize the takings implications of the 
    final rule except by selecting one of the other alternatives. However, 
    we do not believe that such a selection is justified. We believe that 
    the good faith/all permits standard adopted as part of the final rule 
    is the best alternative because it best protects the areas listed in 
    section 522(e) from surface coal mining operations, as Congress 
    intended.
    GFAP/T Standard
        Under this standard, a person could demonstrate VER by (1) 
    demonstrating compliance with the good faith/all permits standard, or 
    (2) demonstrating that denial of VER as of the date that the area 
    became subject to section 522(e) would reasonably be expected to result 
    in a compensable taking.
        We would expect no takings implications from the GFAP/T standard 
    because in all cases, VER should be granted if denial would result in a 
    compensable taking. However, as noted in the preamble to the final 
    rule, when we proposed the GFAP/T alternative in 1991, it elicited some 
    of the strongest opposition that we have ever received on a proposed 
    rule. We received approximately 750 comments, and virtually every 
    comment emphatically opposed the GFAP/T standard. Opponents charged 
    that this standard would be impossibly burdensome for States to 
    implement. Some commenters charged that it was too complex, 
    unpredictable, and uncertain. Many commenters urged adoption of a 
    ``bright-line'' standard instead. Some charged that it was not 
    protective enough of section 522(e) areas, and others charged that it 
    was inappropriately restrictive of mining in section 522(e) areas. Some 
    commenters felt that State regulatory authorities had no authority 
    under State law to apply the standard. Every category of commenter 
    rejected the GFAP/T standard as unworkable, unacceptable, or 
    demonstrably inferior to some other alternative.
    Ownership and Authority Standard
        Under this standard, a person would have VER upon demonstrating 
    ownership of the coal rights plus the property right under State law to 
    remove the coal by the method intended. The ownership and authority 
    standard would require demonstrating, as of the date that the land came 
    under the protection of section 522(e), the property right to mine the 
    coal by underground methods if VER for underground mining were sought, 
    and by surface mining methods if VER for surface mining were sought.
        We would not expect the ownership and authority standard to have 
    significant takings implications. If a person could not demonstrate the 
    right to mine the coal by the method intended, there would be no denial 
    of or interference with property rights for which compensation would be 
    due under takings law, since a person must have the property right to a 
    particular use to be compensated for denial of that use.
        Although the ownership and authority standard would have no 
    significant takings implications, we believe that it suffers from a 
    serious shortcoming in that it would effectively eviscerate the 
    protections afforded under section 522(e) to lands underlain by non-
    Federal coal. This evisceration would result from the fact that the 
    ownership and authority alternative would result in a finding of VER 
    whenever a person met the permit application requirements for property 
    rights. As a result, except for lands overlying unleased Federal coal, 
    the prohibitions of section 522(e) would be meaningless and without 
    practical effect, because they would add almost nothing to the 
    protection already offered by the SMCRA permit requirements. Such a 
    result would clearly be inconsistent with congressional intent.
    Bifurcated Alternative
        Under this alternative, when the mineral and surface estates have 
    been severed, the date of severance would determine whether the 
    ownership and authority or the good faith/all permits standard for VER 
    would be used. When the mineral estate was severed from the surface 
    estate before the land came under the protection of section 522(e), the 
    ownership and authority standard would be used to determine VER. When 
    the mineral estate was severed from the surface estate after the date 
    the land came under the protection of section 522(e), the good faith/
    all permits standard would be used. Thus, we believe the takings 
    implications of this alternative would be somewhere between those of 
    the ownership and authority and the good faith/all permits standards. 
    We did not propose this alternative, because we concluded that it was 
    questionable whether there is a basis in SMCRA for applying two 
    different VER standards, depending on the date of severance.
    4. Estimate of Potential Financial Exposure From the Final Rule
        The Attorney General's guidelines and the Department's supplemental 
    guidelines for takings implications assessments provide that the 
    assessment should set out an estimate of the financial exposure if the 
    final rule were held to effect a compensable taking. Given the 
    geographic scope of this final rule, however, and the lack of 
    information on the effects on individual property rights, a meaningful 
    estimate of financial exposure is impossible. Instead, as discussed 
    above, this assessment discusses generally the
    
    [[Page 70827]]
    
    anticipated takings impacts of the final rule, relative to the other 
    alternatives considered. Federal financial exposure is greatest from 
    claims concerning VER denials in the eastern United States in section 
    522(e)(2) areas or from the costs associated with acquisition of 
    property rights in section 522(e)(1) areas pursuant to the Secretary's 
    1988 policy statement, as discussed above.
    5. Conclusion
        The final rule for VER is expected to have a greater potential for 
    takings implications than the other alternatives considered. More 
    significant takings implications are anticipated primarily in some 
    (e)(2) areas (Federal lands in eastern national forests) and (e)(5) 
    areas (State and local parks). In light of the Secretary's 1988 policy 
    on exercise of VER for (e)(1) areas, takings implications are less 
    likely in (e)(1) areas. Takings implications are also substantially 
    less likely in (e)(3) through (e)(5) areas other than public parks. 
    Case-by-case application of the regulation might result in takings 
    implications, but such an analysis is beyond the scope of this 
    assessment and cannot be made until the rule is actually applied. Thus, 
    insufficient information is available to enable an accurate assessment 
    of the extent to which significant takings consequences might result 
    from adoption and application of this rule.
        Under the standards set forth in the ``Attorney General's 
    Guidelines For the Evaluation of Risk and Avoidance of Unanticipated 
    Takings,'' dated June 30, 1988, and the Supplementary Takings 
    Guidelines of the Department of the Interior, we therefore conclude 
    that this rulemaking has significant takings implications.
    
    F. Executive Order 13132: Federalism
    
        In accordance with Executive Order 13132, this rule does not have 
    Federalism implications. The rule 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.
        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.'' States are not required to 
    regulate surface coal mining and reclamation operations under SMCRA, 
    but they may do so if they wish and if they meet certain requirements. 
    The Act also provides for Federal funding of 50% of the cost of 
    administering State regulatory programs approved under SMCRA. 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. Further, section 505 of 
    SMCRA provides for the preemption of State laws and regulations that 
    are inconsistent with the provisions of SMCRA.
    
    G. Executive Order 12988: Civil Justice Reform
    
        In accordance with Executive Order 12988, the Office of the 
    Solicitor has determined that this rule (1) does not unduly burden the 
    judicial system and (2) meets the requirements of sections 3(a) and 
    3(b)(2) of the order.
    
    H. Paperwork Reduction Act
    
        Under the Paperwork Reduction Act, agencies may not conduct or 
    sponsor a collection of information unless the collection displays a 
    currently valid Office of Management and Budget (OMB) control number. 
    Also, no person must respond to an information collection request 
    unless the form or regulation requesting the information has a 
    currently valid OMB control number. Therefore, in accordance with 44 
    U.S.C. 3501 et seq, we submitted the information collection and 
    recordkeeping requirements of 30 CFR Parts 761 and 772 to OMB for 
    review and approval. OMB subsequently approved the collection 
    activities and assigned them OMB control numbers 1029-0111 and 1029-
    0112, respectively.
    
    I. National Environmental Policy Act of 1969 and Record of Decision
    
        This rule, issued in conjunction with the rule concerning the 
    applicability of the prohibitions of section 522(e) of SMCRA to 
    subsidence from underground mining operations (RIN 1029-AB82), 
    constitutes a major Federal action significantly affecting the quality 
    of the human environment under the National Environmental Policy Act of 
    1969 (NEPA). Therefore, we have prepared a final environmental impact 
    statement (EIS) pursuant to section 102(2)(C) of NEPA, 42 U.S.C. 
    4332(2)(C). The Environmental Protection Agency has published a 
    separate notice of the availability of the EIS in today's edition of 
    the Federal Register. A copy of the EIS, which is entitled ``Proposed 
    Revisions to the Permanent Program Regulations Implementing Section 
    522(e) of the Surface Mining Control and Reclamation Act of 1977 and 
    Proposed Rulemaking Clarifying the Applicability of Section 522(e) to 
    Subsidence from Underground Mining: Final Environmental Impact 
    Statement OSM-EIS-29 (July, 1999),'' is available for inspection at the 
    Office of Surface Mining, Administrative Record--Room 101, 1951 
    Constitution Avenue, N.W., Washington, DC 20240. You may obtain a 
    single copy by writing us or calling 202-208-2847. You also may request 
    a copy via the Internet at osmrules@osmre.gov.
        The preamble to this final rule serves as the ``Record of 
    Decision'' under NEPA. Because of the length of the preamble, we have 
    prepared the following concise summary of the EIS and the decisions 
    made in the final rule relative to the alternatives considered in the 
    EIS.
        The EIS addressed the general setting of the proposal, its purpose 
    and need, the alternatives considered, existing environmental 
    protection measures, the affected environment, the environmental 
    consequences, and overall consultation and coordination activities. In 
    addition, the EIS discussed the regulatory protections of SMCRA, the 
    history of VER, and related rulemaking issues such as coal exploration 
    on protected lands, the transferability of VER, procedural requirements 
    for VER determinations, and responsibility for VER determinations for 
    non-Federal inholdings within the areas listed in section 522(e)(1) of 
    the Act.
        We used a generic mine impact analysis on a hypothetical site-
    specific basis to describe impacts to certain resources when surface 
    and underground mining operations are conducted within, and adjacent 
    to, section 522(e) areas (see Chapter IV of the EIS). In addition, we 
    estimated the coal resources within the areas defined by section 522(e) 
    and subjected them to various tests and assumptions to provide an 
    estimate of the number of acres that could be affected over a 20-year 
    period (1995 to 2015). Using the generic mine impact analysis and the 
    potentially affected acreage of section 522(e) areas, we were able to 
    provide a measure of the relative degree of potential environmental 
    impacts under each alternative.
        Because of the comments the we received on the proposed rule, the 
    final rule differs somewhat from the proposed rule. In making these 
    changes, we used the EIS to understand the potential environmental 
    impacts. We
    
    [[Page 70828]]
    
    determined that there are no measurable environmental impacts 
    associated with these changes, and that, in terms of environmental 
    impacts, the changes do not constitute a significant departure from the 
    alternatives evaluated in the EIS.
    Alternatives Considered
        We identified five alternatives for implementing the VER exception 
    in section 522(e) of SMCRA. These alternatives are no action, good 
    faith/all permits (the preferred alternative), good faith/all permits 
    or takings, ownership and authority, and bifurcated. The last 
    alternative is a combination of the good faith/all permits and the 
    ownership and authority alternatives.
        No Action (NA) Alternative: Under the no action alternative, we 
    would not adopt a rule defining VER and establishing implementing 
    procedures; the status quo would continue. We would make VER 
    determinations using the policy established in the suspension notice 
    published November 20, 1986 (51 FR 41954) in all States except Ohio. In 
    Ohio, we would use a takings standard. We would continue to make VER 
    determinations for Federal lands in section 522(e)(1) and (2) areas. We 
    also would continue to make VER determinations for non-Federal lands 
    within section 522(e)(1) areas when surface coal mining operations on 
    those lands would affect the Federal interest. States would continue to 
    use their current standards and procedures for determining VER.
        Good Faith/All Permits Alternative: Under the good faith/all 
    permits standard, a person has VER if, prior to the date that the land 
    came under the protection of section 522(e), the person or a 
    predecessor in interest had obtained, or made a good faith effort to 
    obtain, all permits and other authorizations required to conduct 
    surface coal mining operations.
        Good Faith/All Permits or Takings Alternative: Under this 
    alternative, a person must either comply with the good faith/all 
    permits standard or demonstrate that denial of VER would result in a 
    compensable taking. VER would be found to exist whenever the agency 
    making the VER determination finds that, based on existing takings 
    jurisprudence, denial of VER would be expected to result in a 
    compensable taking of property under the Fifth and Fourteenth 
    Amendments to the Constitution.
        Ownership and Authority Alternative: Under this alternative, an 
    individual could establish VER by demonstrating possession of both a 
    right to the coal and the right to mine it by the method intended. 
    Adoption of the ownership and authority alternative would likely result 
    in the greatest number of determinations that VER did exist.
        Bifurcated Alternative: Under this alternative, VER standards would 
    be based on the date of severance of the mineral and surface estates in 
    relation to the date that the land came under the protection of section 
    522(e). When the mineral estate was severed from the surface estate 
    before the land came under the protections of section 522(e), VER would 
    be determined based on the ownership and authority standard. When the 
    mineral estate had not been severed from the surface estate before the 
    land came under the protection of section 522(e), VER would be based on 
    the good faith/all permits standard.
    Decision
        The final rule establishes the good faith/all permits alternative 
    as the standard for VER. This decision is based upon the belief that 
    the good faith/all permits standard best achieves protection of the 
    lands listed in section 522(e) in a manner consistent with 
    congressional intent at the time of SMCRA's enactment. At the same 
    time, it protects the interests of those persons who had taken concrete 
    steps to obtain regulatory approval for surface coal mining operations 
    on lands listed in section 522(e) before those lands came under the 
    protection of section 522(e). And, since 20 of the 24 approved State 
    regulatory programs already rely upon either the good faith/all permits 
    standard or the all permits standard, adoption of a good faith/all 
    permits standard would cause the least disruption to existing State 
    regulatory programs.
        The good faith/all permits standard is consistent with the 
    legislative history of section 522(e), which indicates that Congress' 
    purpose in enacting section 522(e) was to prevent new surface coal 
    mining operations on the lands listed in that section, either to 
    protect human health or safety, or because the environmental values and 
    other features associated with those lands are generally incompatible 
    with surface coal mining operations.
        The analysis of environmental impacts indicated that, compared with 
    the other alternatives considered, the good faith/all permits standard 
    is the most protective of the lands listed in section 522(e). Adoption 
    of the takings standard in place of the good faith/all permits standard 
    would result in surface coal mining operations on an estimated 
    additional 2,855 acres of protected lands between 1995 and 2015. 
    Adoption of either the bifurcated standard or the ownership and 
    authority standard would result in surface coal mining operations on an 
    estimated additional 3,062 acres of protected lands during that time 
    frame. Therefore, adoption of the good faith/all permits standard for 
    VER will best fulfil the intent of Congress to prohibit, with certain 
    exceptions, new surface coal mining operations on the lands protected 
    by section 522(e).
        The EIS also identified certain issues common to the VER 
    alternatives. We discussed these issues and their potential impacts in 
    Chapters II and V of the EIS. As discussed below, we made the following 
    decisions with respect to these issues.
        VER Definition Applicable to Section 522(e)(1) and (e)(2) Lands: 
    Under 30 CFR Title VII, Subchapter C, State regulatory programs under 
    SMCRA must be no less effective than the Federal regulations in meeting 
    the requirements of the Act. Therefore, we expect that there would be 
    no differences in the environmental impacts of the two alternatives 
    that we considered (use of State versus Federal definition). The final 
    rule specifies that the Federal definition of VER, not the approved 
    State program definition, will apply to all VER determinations for the 
    lands listed in section 522(e)(1) and (e)(2) of SMCRA, regardless of 
    whether OSM or the State regulatory authority is responsible for making 
    the determination. Application of the Federal definition will ensure 
    that requests for VER determinations involving lands of national 
    interest and importance are evaluated on the basis of the same 
    criteria.
        Continually Created VER: The definition of VER in the final rule 
    provides for determination of VER based on property rights and 
    circumstances in existence when the land comes under the protection of 
    section 522(e) of SMCRA. This concept has sometimes been referred to as 
    ``continually created VER.'' We first adopted it as a separate standard 
    in the 1983 definition of VER. In the final rule, we are removing the 
    separate standard and incorporating the concept into each VER standard 
    and the exception for existing operations. The EIS found the 
    differences in environmental impact between the existing and proposed 
    (now final) rules to be negligible.
        Transferability of VER: The final rule provides that, in general, 
    VER are transferable because, unless otherwise provided by State law, 
    the property rights, permits, and operations that form the basis for 
    VER determinations are transferable. There is one significant 
    exception. If an operation with VER
    
    [[Page 70829]]
    
    under the needed for and adjacent standard divests itself of the land 
    to which the VER determination pertains, the new owner does not have 
    the right to conduct surface coal mining operations on those lands 
    under the prior VER determination. States may prohibit VER transfers to 
    the extent that they have the authority to do so under State law.
        Needed for and Adjacent Standard: The final rule adopts the needed 
    for and adjacent standard as proposed in 1997, with several changes. To 
    establish VER under the needed for and adjacent standard, a person must 
    (1) make the required property rights demonstration, and (2) document 
    that the land is both needed for and immediately adjacent to a surface 
    coal mining operation for which all permits and other authorizations 
    required to conduct surface coal mining operations had been obtained, 
    or a good faith effort to obtain all necessary permits and 
    authorizations had been made, before the land came under the protection 
    of section 522(e) of SMCRA. Except for operations in existence before 
    August 3, 1977, or for which a good faith effort to obtain all 
    necessary permits had been made before August 3, 1977, this standard 
    does not apply to lands already under the protection of section 522(e) 
    when the regulatory authority approved the permit for the original 
    operation or when the good faith effort to obtain all necessary permits 
    was made. As stated in Chapter V of the EIS, we found that application 
    of this standard would have no more than minor environmental impacts 
    overall.
        Procedural Requirements for VER Determinations: The existing rules 
    had few requirements governing the submission and processing of 
    requests for VER determinations. The final rule includes more complete 
    requirements to promote public participation and establish consistent 
    review and decision-making procedures. As discussed in Chapter V of the 
    EIS, we found that adoption of more complete procedural requirements 
    would result in minor to significant environmental benefits by 
    improving decision accuracy and ensuring consideration of all relevant 
    information.
        Responsibility for VER Determinations for Non-Federal Inholdings in 
    Section 522(e)(1) Areas: As discussed in Chapter V of the EIS, we 
    determined that the environmental impacts of the alternatives that we 
    considered for this issue would be determined more by the applicable 
    VER standard than by which agency is responsible for making VER 
    determinations for non-Federal lands within section 522(e)(1) areas. 
    Under the final rule, the regulatory authority has the responsibility 
    for making VER determinations for all non-Federal lands within the 
    areas listed in section 522(e)(1), but, as noted above, the agency must 
    use the Federal definition of VER when doing so.
        VER for Coal Exploration Operations: Of the five alternatives under 
    consideration regarding requirements for coal exploration on the lands 
    protected by section 522(e), we decided that the no action alternative 
    best conforms with the provisions of SMCRA. The prohibitions of section 
    522(e) apply only to surface coal mining operations, and SMCRA 
    specifically excludes coal exploration from the definition of surface 
    coal mining operations. Therefore, we decided not to add any VER 
    demonstration requirements or other potentially prohibitory barriers to 
    coal exploration on the lands listed in section 522(e). However, as 
    discussed in Chapter V of the EIS, the no action alternative is the 
    least protective of the environment. To mitigate the environmental 
    impacts of this alternative, we have revised our rules to add a 
    requirement that each application for coal exploration on lands listed 
    in section 522(e) include a demonstration that the proposed exploration 
    activities have been designed to minimize interference with the values 
    for which those lands were designated as unsuitable for surface coal 
    mining operations. The final rule also provides that, before approving 
    an application for coal exploration on lands listed in section 522(e), 
    the regulatory authority must find that the proposed exploration 
    activities have been designed to minimize interference with the values 
    for which those lands were designated as unsuitable for surface coal 
    mining operations.
    Environmental Effects of the Alternatives
        The areas most likely to be impacted by surface coal mining 
    operations as a result of the VER exception are the lands listed in 
    section 522(e)(1), State and local parks, and eastern national forests. 
    Rather than claiming VER, operators generally use the waivers and 
    compatibility findings authorized under SMCRA to gain access to coal 
    resources within western national forests, adjacent to historic sites, 
    or within the buffer zones for roads and occupied dwellings. While 
    access to coal within the buffer zones for public parks, churches, 
    schools, public buildings, and cemeteries is generally dependent upon 
    establishing VER, mining operations can generally avoid these protected 
    areas without difficulty.
        Good Faith/All Permits Alternative: According to our model, the 
    good faith/all permits alternative would have the least environmental 
    impact. It also would provide surface owners and resource management 
    agencies with the greatest degree of control over surface coal mining 
    operations and any resultant adverse impacts in protected areas. Our 
    model predicts that the only section 522(e) areas that would be 
    disturbed by surface coal mining operations between 1995 and 2015 
    pursuant to VER determinations under this alternative would be 883 
    acres of Federal lands in eastern national forests, 996 acres within 
    the buffer zones for public roads, and 4,823 acres within the buffer 
    zones for occupied dwellings. Therefore, the good faith/all permits 
    alternative is the environmentally preferable alternative for the VER 
    rulemaking.
        No Action Alternative: The impacts of this alternative would likely 
    resemble those of the good faith/all permits alternative. However, this 
    alternative would allow use of the takings standard in Ohio and in 
    those States that have adopted the takings standard as part of their 
    approved regulatory programs. Therefore, some areas protected by 
    section 522(e) would be mined under this alternative that would not be 
    mined under the good faith/all permits alternative. The model used in 
    the EIS predicts that, relative to the good faith/all permits 
    alternative, the no action alternative would result in surface coal 
    mining operations on an additional 711 acres of Federal lands in 
    eastern national forests between 1995 and 2015.
        All Other VER Alternatives: The ownership and authority, 
    bifurcated, and good faith/all permits or takings alternatives afford 
    the greatest potential for mining-related disturbances in protected 
    areas. Our model predicts that use of one of these alternatives in 
    place of the good faith/all permits alternative would result in surface 
    coal mining operations on an additional 185 to 304 acres of section 
    522(e)(1) lands (national parks, national wildlife refuges, and 
    national recreation areas), 1,686 to 1,761 acres of Federal lands in 
    eastern national forests, and 984 to 997 acres of State park lands 
    because of VER determinations under these alternatives between 1995 and 
    2015. See Figure V-1 of the EIS.
        The potentially affected section 522(e)(1) acreage appears to be 
    confined to one National Park unit in the Central Appalachian region, 
    several wildlife refuge system units within North Dakota, and, to a 
    lesser degree, two
    
    [[Page 70830]]
    
    national recreation areas in the Central Appalachian region. The 
    estimated cost to implement the Department's policy to acquire the 
    interests of persons with VER who plan to conduct surface coal mining 
    operations in section 522(e)(1) areas is $4.185 million during the 20-
    year time frame covered by our model.
        VER Alternatives in Combination with Alternatives for Companion 
    Rulemaking: As discussed above, the good faith/all permits standard is 
    the most environmentally preferable of the alternatives considered for 
    the VER definition. However, the EIS also considered the impact of the 
    VER alternatives in combination with the alternatives for the 
    rulemaking concerning the applicability of the prohibitions of section 
    522(e) to subsidence from underground mining. Based upon the number of 
    acres of section 522(e) lands that could be subject to either surface 
    coal mining operations or subsidence from underground mining, the 
    combination of the good faith/all permits alternative for the VER rule 
    and the ``prohibitions apply'' (PA) alternative for the prohibitions 
    rulemaking would be the most environmentally protective of all 
    potential combinations of alternatives for the two rulemakings. 
    However, for reasons discussed in the preamble to the rulemaking 
    concerning the applicability of the prohibitions of section 522(e) to 
    subsidence from underground mining, we have selected the ``prohibitions 
    do not apply'' alternative rather than any of the PA alternatives for 
    that rulemaking.
    Mitigation, Monitoring and Enforcement
        We have adopted all practicable means to avoid or minimize 
    environmental harm from the alternatives selected. Congress enacted 
    SMCRA to establish a nationwide program to protect society and the 
    environment from the adverse effects of surface coal mining operations; 
    assure that the rights of surface landowners and other persons with a 
    legal interest in the land are fully protected from such operations; 
    assure that surface coal mining operations are not conducted where 
    reclamation required by SMCRA is not feasible; and assure that surface 
    coal mining operations are conducted so as to protect the environment.
        SMCRA's permitting requirements and performance standards generally 
    require avoidance, minimization, or mitigation of impacts to important 
    environmental resources, and our regulations do likewise. Each SMCRA 
    regulatory program includes five major elements: permitting 
    requirements and procedures, performance bonds to guarantee reclamation 
    in the event that the permittee defaults on any reclamation 
    obligations, performance standards to which the operator must adhere, 
    inspection and enforcement to maintain compliance with performance 
    standards and the terms and conditions of the permit, and designation 
    of lands as unsuitable for surface coal mining operations. Each State 
    regulatory program must be no less effective than our regulations in 
    achieving the requirements of the Act. And we conduct oversight of each 
    State's implementation of its approved regulatory program.
    Timing of Agency Action
        The regulations of the Council on Environmental Quality at 40 CFR 
    1506.10(b)(2) allow an agency engaged in rulemaking under the 
    Administrative Procedure Act to publish a decision on the final rule 
    simultaneous with the publication of the notice of availability of the 
    final EIS. Under section 526(a) of SMCRA, 30 U.S.C. 1276(a), anyone 
    wishing to challenge the agency's decision may do so by filing suit in 
    the United States District Court for the District of Columbia within 60 
    days of the date that the final rule is published in the Federal 
    Register.
        Author: The principal author of this rule is Dennis G. Rice, 
    Division of Technical Support, Office of Surface Mining Reclamation and 
    Enforcement, 1951 Constitution Avenue, N.W., Washington, DC 20240; 
    Telephone (202) 208-2829. E-mail address: drice@osmre.gov.
    
    List of Subjects
    
    30 CFR Part 740
    
        Public lands, Mineral resources, Reporting and recordkeeping 
    requirements, Surety bonds, Surface mining, Underground mining.
    
    30 CFR Part 745
    
        Intergovernmental relations, Public lands, Mineral resources, 
    Reporting and recordkeeping requirements, Surface mining, Underground 
    mining.
    
    30 CFR Part 761
    
        Historic preservation, National forests, National parks, National 
    trails system, National wild and scenic rivers system, Surface mining, 
    Underground mining, Wilderness areas, Wildlife refuges.
    
    30 CFR Part 762
    
        Historic preservation, Surface mining, Underground mining.
    
    30 CFR Part 772
    
        Reporting and recordkeeping requirements, Surface mining, 
    Underground mining.
    
    30 CFR Part 773
    
        Administrative practice and procedure, Reporting and recordkeeping 
    requirements, Surface mining, Underground mining.
    
    30 CFR Part 778
    
        Reporting and recordkeeping requirements, Surface mining, 
    Underground mining.
    
    30 CFR Part 780
    
        Reporting and recordkeeping requirements, Surface mining.
    
    30 CFR Part 784
    
        Reporting and recordkeeping requirements, Underground mining.
    
        Dated: September 3, 1999.
    Sylvia V. Baca,
    Acting Assistant Secretary, Land and Minerals Management.
    
        For the reasons set forth in the preamble, the Department is 
    amending 30 CFR Parts 740, 745, 761, 762, 772, 773, 778, 780, and 784 
    as set forth below:
    
    PART 740--GENERAL REQUIREMENTS FOR SURFACE COAL MINING AND 
    RECLAMATION OPERATIONS ON FEDERAL LANDS
    
        1. The authority citation for Part 740 continues to read as 
    follows:
    
        Authority: 30 U.S.C. 1201 et seq. and 30 U.S.C. 181 et seq.
    
        2. Section 740.4 is amended by deleting the word ``and'' at the end 
    of paragraph (a)(2), replacing the period at the end of paragraph 
    (a)(3) with a semicolon, and revising paragraphs (a)(4) and (a)(5) to 
    read as follows:
    
    
    Sec. 740.4  Responsibilities.
    
        (a) * * *
    * * * * *
        (4) Decisions on requests to determine whether a person possesses 
    valid existing rights to conduct surface coal mining operations on 
    Federal lands within the areas specified in Sec. 761.11(a) and (b) of 
    this chapter; and
        (5) Issuance of findings concerning whether there are significant 
    recreational, timber, economic, or other values that may be 
    incompatible with surface coal mining operations on Federal lands 
    within a national forest, as specified in Sec. 761.11(b) of this 
    chapter.
        3. Section 740.10 is revised to read as follows:
    
    [[Page 70831]]
    
    Sec. 740.10  Information collection.
    
        (a) In accordance with 44 U.S.C. 3501 et seq., the Office of 
    Management and Budget (OMB) has approved the information collection 
    requirements of this part. The OMB clearance number is 1029-0027. This 
    information is needed to implement section 523 of the Act, which 
    governs surface coal mining operations on Federal lands. Persons 
    intending to conduct such operations must respond to obtain a benefit.
        (b) OSM estimates that the public reporting burden for this part 
    will average 26 hours per respondent, including time spent reviewing 
    instructions, searching existing data sources, gathering and 
    maintaining the data needed, and completing and reviewing the 
    collection of information. Send comments regarding this burden estimate 
    or any other aspect of these information collection requirements, 
    including suggestions for reducing the burden, to the Office of Surface 
    Mining Reclamation and Enforcement, Information Collection Clearance 
    Officer, 1951 Constitution Avenue, NW, Washington, DC 20240; and the 
    Office of Management and Budget, Office of Information and Regulatory 
    Affairs, Attention: Interior Desk Officer, 725 17th Street, N.W, 
    Washington, DC 20503. Please refer to OMB Control Number 1029-0027 in 
    any correspondence.
        4. In Sec. 740.11, paragraph (a) is revised and paragraph (g) is 
    added to read as follows:
    
    
    Sec. 740.11  Applicability.
    
        (a) Except as provided in paragraph (g) of this section, both this 
    subchapter and the pertinent State or Federal regulatory program in 
    subchapter T of this chapter apply to:
    * * * * *
        (g) The definition of valid existing rights in Sec. 761.5 of this 
    chapter applies to any decision on a request for a determination of 
    valid existing rights to conduct surface coal mining operations on the 
    lands specified in Sec. 761.11(a) and (b) of this chapter.
    
    PART 745--STATE-FEDERAL COOPERATIVE AGREEMENTS
    
        5. The authority citation for Part 745 continues to read as 
    follows:
    
        Authority: 30 U.S.C. 1201 et seq. and 30 U.S.C. 181 et seq.
    
        6. Section 745.10 is revised to read as follows:
    
    
    Sec. 745.10  Information collection.
    
        (a) In accordance with 44 U.S.C. 3501 et seq., the Office of 
    Management and Budget (OMB) has approved the information collection 
    requirements of this part. The OMB clearance number is 1029-0092. This 
    information is needed to implement section 523(c) of the Act, which 
    allows States to regulate surface coal mining operations on Federal 
    lands under certain conditions. States that desire to enter into 
    cooperative agreements to do so must respond to obtain a benefit.
        (b) OSM estimates that the public reporting burden for this part 
    will average 1,364 hours per respondent, including time spent reviewing 
    instructions, searching existing data sources, gathering and 
    maintaining the data needed, and completing and reviewing the 
    collection of information. Send comments regarding this burden estimate 
    or any other aspect of these information collection requirements, 
    including suggestions for reducing the burden, to the Office of Surface 
    Mining Reclamation and Enforcement, Information Collection Clearance 
    Officer, 1951 Constitution Avenue, N.W., Washington, DC 20240; and the 
    Office of Management and Budget, Office of Information and Regulatory 
    Affairs, Attention: Interior Desk Officer, 725 17th Street, N.W., 
    Washington, DC 20503. Please refer to OMB Control Number 1029-0092 in 
    any correspondence.
        7. In Sec. 745.13, paragraphs (o) and (p) are revised to read as 
    follows:
    
    
    Sec. 745.13  Authority reserved by the Secretary.
    
    * * * * *
        (o) Determine whether a person has valid existing rights to conduct 
    surface coal mining operations on Federal lands within the areas 
    specified in Sec. 761.11(a) and (b) of this chapter; or
        (p) Issue findings on whether there are significant recreational, 
    timber, economic, or other values that may be incompatible with surface 
    coal mining operations on Federal lands within a national forest, as 
    specified in Sec. 761.11(b) of this chapter.
    
    PART 761--AREAS DESIGNATED BY ACT OF CONGRESS
    
        8. The authority citation for Part 761 continues to read as 
    follows:
    
        Authority: 30 U.S.C. 1201 et seq.
    
        9. Section 761.5 is amended by removing the definition of ``surface 
    coal mining operations which exist on the date of enactment,'' adding 
    definitions of ``we, us, and our'' and ``you and your'' in alphabetical 
    order, and revising the definition of ``valid existing rights'' to read 
    as follows:
    
    
    Sec. 761.5  Definitions.
    
    * * * * *
        Valid existing rights means a set of circumstances under which a 
    person may, subject to regulatory authority approval, conduct surface 
    coal mining operations on lands where 30 U.S.C. 1272(e) and Sec. 761.11 
    would otherwise prohibit such operations. Possession of valid existing 
    rights only confers an exception from the prohibitions of Sec. 761.11 
    and 30 U.S.C. 1272(e). A person seeking to exercise valid existing 
    rights must comply with all other pertinent requirements of the Act and 
    the applicable regulatory program.
        (a) Property rights demonstration. Except as provided in paragraph 
    (c) of this definition, a person claiming valid existing rights must 
    demonstrate that a legally binding conveyance, lease, deed, contract, 
    or other document vests that person, or a predecessor in interest, with 
    the right to conduct the type of surface coal mining operations 
    intended. This right must exist at the time that the land came under 
    the protection of Sec. 761.11 or 30 U.S.C. 1272(e). Applicable State 
    statutory or case law will govern interpretation of documents relied 
    upon to establish property rights, unless Federal law provides 
    otherwise. If no applicable State law exists, custom and generally 
    accepted usage at the time and place that the documents came into 
    existence will govern their interpretation.
        (b) Except as provided in paragraph (c) of this definition, a 
    person claiming valid existing rights also must demonstrate compliance 
    with one of the following standards:
        (1) Good faith/all permits standard. All permits and other 
    authorizations required to conduct surface coal mining operations had 
    been obtained, or a good faith effort to obtain all necessary permits 
    and authorizations had been made, before the land came under the 
    protection of Sec. 761.11 or 30 U.S.C. 1272(e). At a minimum, an 
    application must have been submitted for any permit required under 
    subchapter G of this chapter or its State program counterpart.
        (2) Needed for and adjacent standard. The land is needed for and 
    immediately adjacent to a surface coal mining operation for which all 
    permits and other authorizations required to conduct surface coal 
    mining operations had been obtained, or a good faith attempt to obtain 
    all permits and authorizations had been made, before the land came 
    under the protection of Sec. 761.11 or 30 U.S.C. 1272(e). To meet this 
    standard, a person must demonstrate that prohibiting expansion of the 
    operation onto that land would unfairly impact
    
    [[Page 70832]]
    
    the viability of the operation as originally planned before the land 
    came under the protection of Sec. 761.11 or 30 U.S.C. 1272(e). Except 
    for operations in existence before August 3, 1977, or for which a good 
    faith effort to obtain all necessary permits had been made before 
    August 3, 1977, this standard does not apply to lands already under the 
    protection of Sec. 761.11 or 30 U.S.C. 1272(e) when the regulatory 
    authority approved the permit for the original operation or when the 
    good faith effort to obtain all necessary permits for the original 
    operation was made. In evaluating whether a person meets this standard, 
    the agency making the determination may consider factors such as:
        (i) The extent to which coal supply contracts or other legal and 
    business commitments that predate the time that the land came under the 
    protection of Sec. 761.11 or 30 U.S.C. 1272(e) depend upon use of that 
    land for surface coal mining operations.
        (ii) The extent to which plans used to obtain financing for the 
    operation before the land came under the protection of Sec. 761.11 or 
    30 U.S.C. 1272(e) rely upon use of that land for surface coal mining 
    operations.
        (iii) The extent to which investments in the operation before the 
    land came under the protection of Sec. 761.11 or 30 U.S.C. 1272(e) rely 
    upon use of that land for surface coal mining operations.
        (iv) Whether the land lies within the area identified on the life-
    of-mine map submitted under Sec. 779.24(c) or Sec. 783.24(c) of this 
    chapter before the land came under the protection of Sec. 761.11.
        (c) Roads. A person who claims valid existing rights to use or 
    construct a road across the surface of lands protected by Sec. 761.11 
    or 30 U.S.C. 1272(e) must demonstrate that one or more of the following 
    circumstances exist if the road is included within the definition of 
    ``surface coal mining operations'' in Sec. 700.5 of this chapter:
        (1) The road existed when the land upon which it is located came 
    under the protection of Sec. 761.11 or 30 U.S.C. 1272(e), and the 
    person has a legal right to use the road for surface coal mining 
    operations.
        (2) A properly recorded right of way or easement for a road in that 
    location existed when the land came under the protection of Sec. 761.11 
    or 30 U.S.C. 1272(e), and, under the document creating the right of way 
    or easement, and under subsequent conveyances, the person has a legal 
    right to use or construct a road across the right of way or easement 
    for surface coal mining operations.
        (3) A valid permit for use or construction of a road in that 
    location for surface coal mining operations existed when the land came 
    under the protection of Sec. 761.11 or 30 U.S.C. 1272(e).
        (4) Valid existing rights exist under paragraphs (a) and (b) of 
    this definition.
        We, us, and our refer to the Office of Surface Mining Reclamation 
    and Enforcement.
        You and your refer to a person who claims or seeks to obtain an 
    exception or waiver authorized by Sec. 761.11 or 30 U.S.C. 1272(e).
        10. Section 761.10 is added to read as follows:
    
    
    Sec. 761.10  Information collection.
    
        (a) In accordance with 44 U.S.C. 3501 et seq., the Office of 
    Management and Budget (OMB) has approved the information collection 
    requirements of this part. The OMB clearance number is 1029-0111. The 
    regulatory authority or other responsible agency will use this 
    information to determine whether a person has valid existing rights or 
    qualifies for one of the other waivers or exemptions from the general 
    prohibition on conducting surface coal mining operations in the areas 
    listed in 30 U.S.C. 1272(e). Persons seeking to conduct surface coal 
    mining operations on these lands must respond to obtain a benefit in 
    accordance with 30 U.S.C. 1272(e).
        (b) We estimate that the public reporting and recordkeeping burden 
    for this part will average 15 hours per response under Sec. 761.13, 0.5 
    hour per response under Sec. 761.14, 2 hours per response under 
    Sec. 761.15, 14 hours per response under Sec. 761.16, 2 hours per 
    response under Sec. 761.17(c), and 2 hours per response under 
    Sec. 761.17(d), including time spent reviewing instructions, searching 
    existing data sources, gathering and maintaining the data needed, and 
    completing and reviewing the collection of information. The burden for 
    Sec. 761.16 includes 6 hours for the person seeking the determination 
    and 8 hours for the agency processing the request. Send comments 
    regarding this burden estimate or any other aspect of these information 
    collection and recordkeeping requirements, including suggestions for 
    reducing the burden, to the Office of Surface Mining Reclamation and 
    Enforcement, Information Collection Clearance Officer, 1951 
    Constitution Avenue, N.W., Washington, DC 20240; and the Office of 
    Management and Budget, Office of Information and Regulatory Affairs, 
    Attention: Interior Desk Officer, 725 17th Street, N.W., Washington, DC 
    20503. Please refer to OMB Control Number 1029-0111 in any 
    correspondence.
        11. Sections 761.11 and 761.12 are revised and new Secs. 761.13 
    through 761.17 are added to read as follows:
    
    
    Sec. 761.11  Areas where surface coal mining operations are prohibited 
    or limited.
    
        You may not conduct surface coal mining operations on the following 
    lands unless you either have valid existing rights, as determined under 
    Sec. 761.16, or qualify for the exception for existing operations under 
    Sec. 761.12:
        (a) Any lands within the boundaries of:
        (1) The National Park System;
        (2) The National Wildlife Refuge System;
        (3) The National System of Trails;
        (4) The National Wilderness Preservation System;
        (5) The Wild and Scenic Rivers System, including study rivers 
    designated under section 5(a) of the Wild and Scenic Rivers Act, 16 
    U.S.C. 1276(a), or study rivers or study river corridors established in 
    any guidelines issued under that Act; or
        (6) National Recreation Areas designated by Act of Congress.
        (b) Any Federal lands within a national forest. This prohibition 
    does not apply if the Secretary finds that there are no significant 
    recreational, timber, economic, or other values that may be 
    incompatible with surface coal mining operations, and:
        (1) Any surface operations and impacts will be incident to an 
    underground coal mine; or
        (2) With respect to lands that do not have significant forest cover 
    within national forests west of the 100th meridian, the Secretary of 
    Agriculture has determined that surface mining is in compliance with 
    the Act, the Multiple-Use Sustained Yield Act of 1960, 16 U.S.C. 528-
    531; the Federal Coal Leasing Amendments Act of 1975, 30 U.S.C. 181 et 
    seq.; and the National Forest Management Act of 1976, 16 U.S.C. 1600 et 
    seq. This provision does not apply to the Custer National Forest.
        (c) Any lands where the operation would adversely affect any 
    publicly owned park or any place in the National Register of Historic 
    Places. This prohibition does not apply if, as provided in 
    Sec. 761.17(d), the regulatory authority and the Federal, State, or 
    local agency with jurisdiction over the park or place jointly approve 
    the operation.
        (d) Within 100 feet, measured horizontally, of the outside right-
    of-way line of any public road. This prohibition does not apply:
        (1) Where a mine access or haul road joins a public road, or
    
    [[Page 70833]]
    
        (2) When, as provided in Sec. 761.14, the regulatory authority (or 
    the appropriate public road authority designated by the regulatory 
    authority) allows the public road to be relocated or closed, or the 
    area within the protected zone to be affected by the surface coal 
    mining operation, after:
        (i) Providing public notice and opportunity for a public hearing; 
    and
        (ii) Finding in writing that the interests of the affected public 
    and landowners will be protected.
        (e) Within 300 feet, measured horizontally, of any occupied 
    dwelling. This prohibition does not apply when:
        (1) The owner of the dwelling has provided a written waiver 
    consenting to surface coal mining operations within the protected zone, 
    as provided in Sec. 761.15; or
        (2) The part of the operation to be located closer than 300 feet to 
    the dwelling is an access or haul road that connects with an existing 
    public road on the side of the public road opposite the dwelling.
        (f) Within 300 feet, measured horizontally, of any public building, 
    school, church, community or institutional building, or public park.
        (g) Within 100 feet, measured horizontally, of a cemetery. This 
    prohibition does not apply if the cemetery is relocated in accordance 
    with all applicable laws and regulations.
    
    
    Sec. 761.12  Exception for existing operations.
    
        The prohibitions and limitations of Sec. 761.11 do not apply to:
        (a) Surface coal mining operations for which a valid permit, issued 
    under Subchapter G of this chapter or an approved State regulatory 
    program, exists when the land comes under the protection of 
    Sec. 761.11. This exception applies only to lands within the permit 
    area as it exists when the land comes under the protection of 
    Sec. 761.11.
        (b) With respect to operations subject to Subchapter B of this 
    chapter, lands upon which validly authorized surface coal mining 
    operations exist when the land comes under the protection of 30 U.S.C. 
    1272(e) or Sec. 761.11.
    
    
    Sec. 761.13  Procedures for compatibility findings for surface coal 
    mining operations on Federal lands in national forests.
    
        (a) If you intend to rely upon the exception provided in 
    Sec. 761.11(b) to conduct surface coal mining operations on Federal 
    lands within a national forest, you must request that we obtain the 
    Secretarial findings required by Sec. 761.11(b).
        (b) You may submit a request to us before preparing and submitting 
    an application for a permit or boundary revision. If you do, you must 
    explain how the proposed operation would not damage the values listed 
    in the definition of ``significant recreational, timber, economic, or 
    other values incompatible with surface coal mining operations'' in 
    Sec. 761.5. You must include a map and sufficient information about the 
    nature of the proposed operation for the Secretary to make adequately 
    documented findings. We may request that you provide any additional 
    information that we determine is needed to make the required findings.
        (c) When a proposed surface coal mining operation or proposed 
    boundary revision for an existing surface coal mining operation 
    includes Federal lands within a national forest, the regulatory 
    authority may not issue the permit or approve the boundary revision 
    before the Secretary makes the findings required by Sec. 761.11(b).
    
    
    Sec. 761.14  Procedures for relocating or closing a public road or 
    waiving the prohibition on surface coal mining operations within the 
    buffer zone of a public road.
    
        (a) This section does not apply to:
        (1) Lands for which a person has valid existing rights, as 
    determined under Sec. 761.16.
        (2) Lands within the scope of the exception for existing operations 
    in Sec. 761.12.
        (3) Access or haul roads that join a public road, as described in 
    Sec. 761.11(d)(1).
        (b) You must obtain any necessary approvals from the authority with 
    jurisdiction over the road if you propose to:
        (1) Relocate a public road;
        (2) Close a public road; or
        (3) Conduct surface coal mining operations within 100 feet, 
    measured horizontally, of the outside right-of-way line of a public 
    road.
        (c) Before approving an action proposed under paragraph (b) of this 
    section, the regulatory authority, or a public road authority that it 
    designates, must determine that the interests of the public and 
    affected landowners will be protected. Before making this 
    determination, the authority must:
        (1) Provide a public comment period and opportunity to request a 
    public hearing in the locality of the proposed operation;
        (2) If a public hearing is requested, publish appropriate advance 
    notice at least two weeks before the hearing in a newspaper of general 
    circulation in the affected locality; and
        (3) Based upon information received from the public, make a written 
    finding as to whether the interests of the public and affected 
    landowners will be protected. If a hearing was held, the authority must 
    make this finding within 30 days after the hearing. If no hearing was 
    held, the authority must make this finding within 30 days after the end 
    of the public comment period.
    
    
    Sec. 761.15  Procedures for waiving the prohibition on surface coal 
    mining operations within the buffer zone of an occupied dwelling.
    
        (a) This section does not apply to:
        (1) Lands for which a person has valid existing rights, as 
    determined under Sec. 761.16.
        (2) Lands within the scope of the exception for existing operations 
    in Sec. 761.12.
        (3) Access or haul roads that connect with an existing public road 
    on the side of the public road opposite the dwelling, as provided in 
    Sec. 761.11(e)(2).
        (b) If you propose to conduct surface coal mining operations within 
    300 feet, measured horizontally, of any occupied dwelling, the permit 
    application must include a written waiver by lease, deed, or other 
    conveyance from the owner of the dwelling. The waiver must clarify that 
    the owner and signator had the legal right to deny mining and knowingly 
    waived that right. The waiver will act as consent to surface coal 
    mining operations within a closer distance of the dwelling as 
    specified.
        (c) If you obtained a valid waiver before August 3, 1977, from the 
    owner of an occupied dwelling to conduct operations within 300 feet of 
    the dwelling, you need not submit a new waiver.
        (d) If you obtain a valid waiver from the owner of an occupied 
    dwelling, that waiver will remain effective against subsequent 
    purchasers who had actual or constructive knowledge of the existing 
    waiver at the time of purchase. A subsequent purchaser will be deemed 
    to have constructive knowledge if the waiver has been properly filed in 
    public property records pursuant to State laws or if surface coal 
    mining operations have entered the 300-foot zone before the date of 
    purchase.
    
    
    Sec. 761.16  Submission and processing of requests for valid existing 
    rights determinations.
    
        (a) Basic framework for valid existing rights determinations. The 
    following table identifies the agency responsible for making a valid 
    existing rights determination and the definition that it must use, 
    based upon which paragraph of Sec. 761.11 applies and whether the 
    request includes Federal lands.
    
    [[Page 70834]]
    
    
    
    ----------------------------------------------------------------------------------------------------------------
                                                     Type of land to       Agency
      Paragraph of Sec.  761.11        Protected      which  request  responsible for     Applicable definition of
       that provides protection         feature          pertains       determination      valid existing rights
    ----------------------------------------------------------------------------------------------------------------
    (a)..........................  National parks,   Federal........  OSM............  Federal \1\
                                    wildlife
                                    refuges, etc..
    (a)..........................  National parks,   Non-Federal....  Regulatory       Federal \1\
                                    wildlife                           authority.
                                    refuges, etc..
    (b)..........................  Federal lands in  Federal........  OSM............  Federal \1\
                                    national
                                    forests \3\.
    (c)..........................  Public parks and  Does not matter  Regulatory       Regulatory program \2\
                                    historic places.                   authority.
    (d)..........................  Public roads....  Does not matter  Regulatory       Regulatory program \2\
                                                                       authority.
    (e)..........................  Occupied          Does not matter  Regulatory       Regulatory program \2\
                                    dwellings.                         authority.
    (f)..........................  Schools,          Does not matter  Regulatory       Regulatory program \2\
                                    churches,                          authority.
                                    parks, etc..
    (g)..........................  Cemeteries......  Does not matter  Regulatory       Regulatory program \2\
                                                                       authority.
    ----------------------------------------------------------------------------------------------------------------
    \1\ Definition in 30 CFR 761.5.
    \2\ Definition in applicable State or Federal regulatory program under 30 CFR Chapter VII, Subchapter T.
    \3\ Neither 30 U.S.C. 1272(e) nor 30 CFR 761.11 provides special protection for non-Federal lands within
      national forests. Therefore, this table does not include a category for those lands.
    
        (b) What you must submit as part of a request for a valid existing 
    rights determination. You must submit a request for a valid existing 
    rights determination to the appropriate agency under paragraph (a) of 
    this section if you intend to conduct surface coal mining operations on 
    the basis of valid existing rights under Sec. 761.11 or wish to confirm 
    the right to do so. You may submit this request before preparing and 
    submitting an application for a permit or boundary revision for the 
    land, unless the applicable regulatory program provides otherwise.
        (1) Requirements for property rights demonstration. You must 
    provide a property rights demonstration under paragraph (a) of the 
    definition of valid existing rights in Sec. 761.5 if your request 
    relies upon the good faith/all permits standard or the needed for and 
    adjacent standard in paragraph (b) of the definition of valid existing 
    rights in Sec. 761.5. This demonstration must include the following 
    items:
        (i) A legal description of the land to which your request pertains.
        (ii) Complete documentation of the character and extent of your 
    current interests in the surface and mineral estates of the land to 
    which your request pertains.
        (iii) A complete chain of title for the surface and mineral estates 
    of the land to which your request pertains.
        (iv) A description of the nature and effect of each title 
    instrument that forms the basis for your request, including any 
    provision pertaining to the type or method of mining or mining-related 
    surface disturbances and facilities.
        (v) A description of the type and extent of surface coal mining 
    operations that you claim the right to conduct, including the method of 
    mining, any mining-related surface activities and facilities, and an 
    explanation of how those operations would be consistent with State 
    property law.
        (vi) Complete documentation of the nature and ownership, as of the 
    date that the land came under the protection of Sec. 761.11 or 30 
    U.S.C. 1272(e), of all property rights for the surface and mineral 
    estates of the land to which your request pertains.
        (vii) Names and addresses of the current owners of the surface and 
    mineral estates of the land to which your request pertains.
        (viii) If the coal interests have been severed from other property 
    interests, documentation that you have notified and provided reasonable 
    opportunity for the owners of other property interests in the land to 
    which your request pertains to comment on the validity of your property 
    rights claims.
        (ix) Any comments that you receive in response to the notification 
    provided under paragraph (b)(1)(viii) of this section.
        (2) Requirements for good faith/all permits standard. If your 
    request relies upon the good faith/all permits standard in paragraph 
    (b)(1) of the definition of valid existing rights in Sec. 761.5, you 
    must submit the information required under paragraph (b)(1) of this 
    section. You also must submit the following information about permits, 
    licenses, and authorizations for surface coal mining operations on the 
    land to which your request pertains:
        (i) Approval and issuance dates and identification numbers for any 
    permits, licenses, and authorizations that you or a predecessor in 
    interest obtained before the land came under the protection of 
    Sec. 761.11 or 30 U.S.C. 1272(e).
        (ii) Application dates and identification numbers for any permits, 
    licenses, and authorizations for which you or a predecessor in interest 
    submitted an application before the land came under the protection of 
    Sec. 761.11 or 30 U.S.C. 1272(e).
        (iii) An explanation of any other good faith effort that you or a 
    predecessor in interest made to obtain the necessary permits, licenses, 
    and authorizations as of the date that the land came under the 
    protection of Sec. 761.11 or 30 U.S.C. 1272(e).
        (3) Requirements for needed for and adjacent standard. If your 
    request relies upon the needed for and adjacent standard in paragraph 
    (b)(2) of the definition of valid existing rights in Sec. 761.5, you 
    must submit the information required under paragraph (b)(1) of this 
    section. In addition, you must explain how and why the land is needed 
    for and immediately adjacent to the operation upon which your request 
    is based, including a demonstration that prohibiting expansion of the 
    operation onto that land would unfairly impact the viability of the 
    operation as originally planned before the land came under the 
    protection of Sec. 761.11 or 30 U.S.C. 1272(e).
        (4) Requirements for standards for mine roads. If your request 
    relies upon one of the standards for roads in paragraphs (c)(1) through 
    (c)(3) of the definition of valid existing rights in Sec. 761.5, you 
    must submit satisfactory documentation that:
        (i) The road existed when the land upon which it is located came 
    under the protection of Sec. 761.11 or 30 U.S.C. 1272(e), and you have 
    a legal right to use the road for surface coal mining operations;
        (ii) A properly recorded right of way or easement for a road in 
    that location existed when the land came under the protection of 
    Sec. 761.11 or 30 U.S.C. 1272(e), and, under the document creating the 
    right of way or easement, and under any subsequent conveyances, you 
    have a legal right to use or construct
    
    [[Page 70835]]
    
    a road across that right of way or easement to conduct surface coal 
    mining operations; or
        (iii) A valid permit for use or construction of a road in that 
    location for surface coal mining operations existed when the land came 
    under the protection of Sec. 761.11 or 30 U.S.C. 1272(e).
        (c) Initial review of request. (1) The agency must conduct an 
    initial review to determine whether your request includes all 
    applicable components of the submission requirements of paragraph (b) 
    of this section. This review pertains only to the completeness of the 
    request, not the legal or technical adequacy of the materials 
    submitted.
        (2) If your request does not include all applicable components of 
    the submission requirements of paragraph (b) of this section, the 
    agency must notify you and establish a reasonable time for submission 
    of the missing information.
        (3) When your request includes all applicable components of the 
    submission requirements of paragraph (b) of this section, the agency 
    must implement the notice and comment requirements of paragraph (d) of 
    this section.
        (4) If you do not provide information that the agency requests 
    under paragraph (c)(2) of this section within the time specified or as 
    subsequently extended, the agency must issue a determination that you 
    have not demonstrated valid existing rights, as provided in paragraph 
    (e)(4) of this section.
        (d) Notice and comment requirements and procedures. (1) When your 
    request satisfies the completeness requirements of paragraph (c) of 
    this section, the agency must publish a notice in a newspaper of 
    general circulation in the county in which the land is located. This 
    notice must invite comment on the merits of the request. Alternatively, 
    the agency may require that you publish this notice and provide the 
    agency with a copy of the published notice. We will publish a similar 
    notice in the Federal Register if your request involves Federal lands 
    within an area listed in Sec. 761.11(a) or (b). Each notice must 
    include:
        (i) The location of the land to which the request pertains.
        (ii) A description of the type of surface coal mining operations 
    planned.
        (iii) A reference to and brief description of the applicable 
    standard(s) under the definition of valid existing rights in 
    Sec. 761.5.
        (A) If your request relies upon the good faith/all permits standard 
    or the needed for and adjacent standard in paragraph (b) of the 
    definition of valid existing rights in Sec. 761.5, the notice also must 
    include a description of the property rights that you claim and the 
    basis for your claim.
        (B) If your request relies upon the standard in paragraph (c)(1) of 
    the definition of valid existing rights in Sec. 761.5, the notice also 
    must include a description of the basis for your claim that the road 
    existed when the land came under the protection of Sec. 761.11 or 30 
    U.S.C. 1272(e). In addition, the notice must include a description of 
    the basis for your claim that you have a legal right to use that road 
    for surface coal mining operations.
        (C) If your request relies upon the standard in paragraph (c)(2) of 
    the definition of valid existing rights in Sec. 761.5, the notice also 
    must include a description of the basis for your claim that a properly 
    recorded right of way or easement for a road in that location existed 
    when the land came under the protection of Sec. 761.11 or 30 U.S.C. 
    1272(e). In addition, the notice must include a description of the 
    basis for your claim that, under the document creating the right of way 
    or easement, and under any subsequent conveyances, you have a legal 
    right to use or construct a road across the right of way or easement to 
    conduct surface coal mining operations.
        (iv) If your request relies upon one or more of the standards in 
    paragraphs (b), (c)(1), and (c)(2) of the definition of valid existing 
    rights in Sec. 761.5, a statement that the agency will not make a 
    decision on the merits of your request if, by the close of the comment 
    period under this notice or the notice required by paragraph (d)(3) of 
    this section, a person with a legal interest in the land initiates 
    appropriate legal action in the proper venue to resolve any differences 
    concerning the validity or interpretation of the deed, lease, easement, 
    or other documents that form the basis of your claim.
        (v) A description of the procedures that the agency will follow in 
    processing your request.
        (vi) The closing date of the comment period, which must be a 
    minimum of 30 days after the publication date of the notice.
        (vii) A statement that interested persons may obtain a 30-day 
    extension of the comment period upon request.
        (viii) The name and address of the agency office where a copy of 
    the request is available for public inspection and to which comments 
    and requests for extension of the comment period should be sent.
        (2) The agency must promptly provide a copy of the notice required 
    under paragraph (d)(1) of this section to:
        (i) All reasonably locatable owners of surface and mineral estates 
    in the land included in your request.
        (ii) The owner of the feature causing the land to come under the 
    protection of Sec. 761.11, and, when applicable, the agency with 
    primary jurisdiction over the feature with respect to the values 
    causing the land to come under the protection of Sec. 761.11. For 
    example, both the landowner and the State Historic Preservation Officer 
    must be notified if surface coal mining operations would adversely 
    impact any site listed on the National Register of Historic Places. As 
    another example, both the surface owner and the National Park Service 
    must be notified if the request includes non-Federal lands within the 
    authorized boundaries of a unit of the National Park System.
        (3) The letter transmitting the notice required under paragraph 
    (d)(2) of this section must provide a 30-day comment period, starting 
    from the date of service of the letter, and specify that another 30 
    days is available upon request. At its discretion, the agency 
    responsible for the determination of valid existing rights may grant 
    additional time for good cause upon request. The agency need not 
    necessarily consider comments received after the closing date of the 
    comment period.
        (e) How a decision will be made. (1) The agency responsible for 
    making the determination of valid existing rights must review the 
    materials submitted under paragraph (b) of this section, comments 
    received under paragraph (d) of this section, and any other relevant, 
    reasonably available information to determine whether the record is 
    sufficiently complete and adequate to support a decision on the merits 
    of the request. If not, the agency must notify you in writing, 
    explaining the inadequacy of the record and requesting submittal, 
    within a specified reasonable time, of any additional information that 
    the agency deems necessary to remedy the inadequacy.
        (2) Once the record is complete and adequate, the responsible 
    agency must determine whether you have demonstrated valid existing 
    rights. The decision document must explain how you have or have not 
    satisfied all applicable elements of the definition of valid existing 
    rights in Sec. 761.5. It must contain findings of fact and conclusions, 
    and it must specify the reasons for the conclusions.
        (3) Impact of property rights disagreements. This paragraph applies 
    only when your request relies upon one
    
    [[Page 70836]]
    
    or more of the standards in paragraphs (b), (c)(1), and (c)(2) of the 
    definition of valid existing rights in Sec. 761.5.
        (i) The agency must issue a determination that you have not 
    demonstrated valid existing rights if your property rights claims are 
    the subject of pending litigation in a court or administrative body 
    with jurisdiction over the property rights in question. The agency will 
    make this determination without prejudice, meaning that you may refile 
    the request once the property rights dispute is finally adjudicated. 
    This paragraph applies only to situations in which legal action has 
    been initiated as of the closing date of the comment period under 
    paragraph (d)(1) or (d)(3) of this section.
        (ii) If the record indicates disagreement as to the accuracy of 
    your property rights claims, but this disagreement is not the subject 
    of pending litigation in a court or administrative agency of competent 
    jurisdiction, the agency must evaluate the merits of the information in 
    the record and determine whether you have demonstrated that the 
    requisite property rights exist under paragraph (a), (c)(1), or (c)(2) 
    of the definition of valid existing rights in Sec. 761.5, as 
    appropriate. The agency must then proceed with the decision process 
    under paragraph (e)(2) of this section.
        (4) The agency must issue a determination that you have not 
    demonstrated valid existing rights if you do not submit information 
    that the agency requests under paragraph (c)(2) or (e)(1) of this 
    section within the time specified or as subsequently extended. The 
    agency will make this determination without prejudice, meaning that you 
    may refile a revised request at any time.
        (5) After making a determination, the agency must:
        (i) Provide a copy of the determination, together with an 
    explanation of appeal rights and procedures, to you, to the owner or 
    owners of the land to which the determination applies, to the owner of 
    the feature causing the land to come under the protection of 
    Sec. 761.11, and, when applicable, to the agency with primary 
    jurisdiction over the feature with respect to the values that caused 
    the land to come under the protection of Sec. 761.11.
        (ii) Publish notice of the determination in a newspaper of general 
    circulation in the county in which the land is located. Alternatively, 
    the agency may require that you publish this notice and provide a copy 
    of the published notice to the agency. We will publish the 
    determination, together with an explanation of appeal rights and 
    procedures, in the Federal Register if your request includes Federal 
    lands within an area listed in Sec. 761.11(a) or (b).
        (f) Administrative and judicial review. A determination that you 
    have or do not have valid existing rights is subject to administrative 
    and judicial review under Secs. 775.11 and 775.13 of this chapter.
        (g) Availability of records. The agency responsible for processing 
    a request subject to notice and comment under paragraph (d) of this 
    section must make a copy of that request available to the public in the 
    same manner as the agency, when acting as the regulatory authority, 
    must make permit applications available to the public under 
    Sec. 773.13(d) of this chapter. In addition, the agency must make 
    records associated with that request, and any subsequent determination 
    under paragraph (e) of this section, available to the public in 
    accordance with the requirements and procedures of Sec. 840.14 or 
    Sec. 842.16 of this chapter.
    
    
    Sec. 761.17  Regulatory authority obligations at time of permit 
    application review.
    
        (a) Upon receipt of an administratively complete application for a 
    permit for a surface coal mining operation, or an administratively 
    complete application for revision of the boundaries of a surface coal 
    mining operation permit, the regulatory authority must review the 
    application to determine whether the proposed surface coal mining 
    operation would be located on any lands protected under Sec. 761.11.
        (b) The regulatory authority must reject any portion of the 
    application that would locate surface coal mining operations on land 
    protected under Sec. 761.11 unless:
        (1) The site qualifies for the exception for existing operations 
    under Sec. 761.12;
        (2) A person has valid existing rights for the land, as determined 
    under Sec. 761.16;
        (3) The applicant obtains a waiver or exception from the 
    prohibitions of Sec. 761.11 in accordance with Secs. 761.13 through 
    761.15; or
        (4) For lands protected by Sec. 761.11(c), both the regulatory 
    authority and the agency with jurisdiction over the park or place 
    jointly approve the proposed operation in accordance with paragraph (d) 
    of this section.
        (c) Location verification. If the regulatory authority has 
    difficulty determining whether an application includes land within an 
    area specified in Sec. 761.11(a) or within the specified distance from 
    a structure or feature listed in Sec. 761.11(f) or (g), the regulatory 
    authority must request that the Federal, State, or local governmental 
    agency with jurisdiction over the protected land, structure, or feature 
    verify the location.
        (1) The request for location verification must:
        (i) Include relevant portions of the permit application.
        (ii) Provide the agency with 30 days after receipt to respond, with 
    a notice that another 30 days is available upon request.
        (iii) Specify that the regulatory authority will not necessarily 
    consider a response received after the comment period provided under 
    paragraph (c)(1)(ii) of this section.
        (2) If the agency does not respond in a timely manner, the 
    regulatory authority may make the necessary determination based on 
    available information.
        (d) Procedures for joint approval of surface coal mining operations 
    that will adversely affect publicly owned parks or historic places.
        (1) If the regulatory authority determines that the proposed 
    surface coal mining operation will adversely affect any publicly owned 
    park or any place included in the National Register of Historic Places, 
    the regulatory authority must request that the Federal, State, or local 
    agency with jurisdiction over the park or place either approve or 
    object to the proposed operation. The request must:
        (i) Include a copy of applicable parts of the permit application.
        (ii) Provide the agency with 30 days after receipt to respond, with 
    a notice that another 30 days is available upon request.
        (iii) State that failure to interpose an objection within the time 
    specified under paragraph (d)(1)(ii) of this section will constitute 
    approval of the proposed operation.
        (2) The regulatory authority may not issue a permit for a proposed 
    operation subject to paragraph (d)(1) of this section unless all 
    affected agencies jointly approve.
        (3) Paragraphs (d)(1) and (d)(2) of this section do not apply to:
        (i) Lands for which a person has valid existing rights, as 
    determined under Sec. 761.16.
        (ii) Lands within the scope of the exception for existing 
    operations in Sec. 761.12.
    
    PART 762--CRITERIA FOR DESIGNATING AREAS AS UNSUITABLE FOR SURFACE 
    COAL MINING OPERATIONS
    
        12. The authority citation for part 762 is revised to read as 
    follows:
    
    
    [[Page 70837]]
    
    
        Authority: 30 U.S.C. 1201 et seq.
    
        13. Section 762.14 is redesignated as Sec. 762.15 and a new 
    Sec. 762.14 is added to read as follows:
    
    
    Sec. 762.14  Applicability to lands designated as unsuitable by 
    Congress.
    
        Pursuant to appropriate petitions, lands listed in Sec. 761.11 of 
    this chapter are subject to designation as unsuitable for all or 
    certain types of surface coal mining operations under this part and 
    parts 764 and 769 of this chapter.
    
    PART 772--REQUIREMENTS FOR COAL EXPLORATION
    
        14. The authority citation for part 772 is revised to read as 
    follows:
    
        Authority: 30 U.S.C. 1201 et seq. and 16 U.S.C. 470 et seq.
    
        15. Section 772.10 is revised to read as follows:
    
    
    Sec. 772.10  Information collection.
    
        (a) In accordance with 44 U.S.C. 3501 et seq., the Office of 
    Management and Budget (OMB) has approved the information collection and 
    recordkeeping requirements of this part. The OMB clearance number is 
    1029-0112. OSM and State regulatory authorities use the information 
    collected under this part to maintain knowledge of coal exploration 
    activities, evaluate the need for an exploration permit, and ensure 
    that exploration activities comply with the environmental protection, 
    public participation, and reclamation requirements of parts 772 and 815 
    of this chapter and 30 U.S.C. 1262. Persons seeking to conduct coal 
    exploration must respond to obtain a benefit.
        (b) OSM estimates that the combined public reporting and 
    recordkeeping burden for all respondents under this part will average 
    11 hours per notice or application submitted, including time spent 
    reviewing instructions, searching existing data sources, gathering and 
    maintaining the data needed, and completing and reviewing the 
    collection of information. Specifically, OSM estimates that preparation 
    of a notice of intent to explore under Sec. 772.11 will require an 
    average of 10 hours per notice, preparation and processing of an 
    application for coal exploration under Sec. 772.12 will require an 
    average of 103 hours per application, compliance with Sec. 772.14 will 
    require an average of 18 hours per application, and recordkeeping and 
    information collection under Sec. 772.15 will require an average of 
    approximately 1 hour per response. Send comments regarding this burden 
    estimate or any other aspect of these information collection 
    requirements, including suggestions for reducing the burden, to the 
    Office of Surface Mining Reclamation and Enforcement, Information 
    Collection Clearance Officer, 1951 Constitution Avenue, N.W., 
    Washington, DC 20240; and the Office of Management and Budget, Office 
    of Information and Regulatory Affairs, Attention: Interior Desk 
    Officer, 725 17th Street, N.W., Washington, DC 20503. Please refer to 
    OMB Control Number 1029-0112 in any correspondence.
        16. Section 772.12 is amended by revising the section heading, 
    adding paragraph (b)(14), revising paragraphs (d)(2)(ii) and 
    (d)(2)(iii), and adding paragraph (d)(2)(iv) to read as follows:
    
    
    Sec. 772.12  Permit requirements for exploration that will remove more 
    than 250 tons of coal or that will occur on lands designated as 
    unsuitable for surface coal mining operations.
    
    * * * * *
        (b) * * *
        (14) For any lands listed in Sec. 761.11 of this chapter, a 
    demonstration that, to the extent technologically and economically 
    feasible, the proposed exploration activities have been designed to 
    minimize interference with the values for which those lands were 
    designated as unsuitable for surface coal mining operations. The 
    application must include documentation of consultation with the owner 
    of the feature causing the land to come under the protection of 
    Sec. 761.11 of this chapter, and, when applicable, with the agency with 
    primary jurisdiction over the feature with respect to the values that 
    caused the land to come under the protection of Sec. 761.11 of this 
    chapter.
    * * * * *
        (d) * * *
        (2) * * *
        (ii) Not jeopardize the continued existence of an endangered or 
    threatened species listed pursuant to section 4 of the Endangered 
    Species Act of 1973, 16 U.S.C. 1533, or result in the destruction or 
    adverse modification of critical habitat of those species;
        (iii) Not adversely affect any cultural or historical resources 
    listed on the National Register of Historic Places pursuant to the 
    National Historic Preservation Act, 16 U.S.C. 470 et seq., unless the 
    proposed exploration has been approved by both the regulatory authority 
    and the agency with jurisdiction over the resources to be affected; and
        (iv) With respect to exploration activities on any lands protected 
    under Sec. 761.11 of this chapter, minimize interference, to the extent 
    technologically and economically feasible, with the values for which 
    those lands were designated as unsuitable for surface coal mining 
    operations. Before making this finding, the regulatory authority must 
    provide reasonable opportunity to the owner of the feature causing the 
    land to come under the protection of Sec. 761.11 of this chapter, and, 
    when applicable, to the agency with primary jurisdiction over the 
    feature with respect to the values that caused the land to come under 
    the protection of Sec. 761.11 of this chapter, to comment on whether 
    the finding is appropriate.
    * * * * *
    
    PART 773--REQUIREMENTS FOR PERMITS AND PERMIT PROCESSING
    
        17. The authority citation for Part 773 is revised 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.
    
    Sec. 773.13  [Amended]
    
        18. In paragraph (a)(1)(v) of Sec. 773.13, ``Sec. 761.12(d)'' is 
    revised to read ``Sec. 761.14''.
        19. In Sec. 773.15, paragraph (c)(3)(ii) is revised to read as 
    follows:
    
    
    Sec. 773.15  Review of permit applications.
    
    * * * * *
        (c) * * *
        (3) * * *
        (ii) Not within an area designated as unsuitable for surface coal 
    mining operations under parts 762 and 764 or 769 of this chapter or 
    within an area subject to the prohibitions of Sec. 761.11 of this 
    chapter.
    
    PART 778--PERMIT APPLICATIONS--MINIMUM REQUIREMENTS FOR LEGAL, 
    FINANCIAL, COMPLIANCE, AND RELATED INFORMATION
    
        20. The authority citation for Part 778 is revised to read as 
    follows:
    
        Authority: 30 U.S.C. 1201 et seq.
    
        21. In Sec. 778.16, paragraph (c) is revised to read as follows:
    
    
    Sec. 778.16  Status of unsuitability claims.
    
    * * * * *
        (c) An application that proposes to conduct surface coal mining 
    operations within 100 feet of a public road or within 300 feet of an 
    occupied dwelling must meet the requirements of Sec. 761.14 or 
    Sec. 761.15 of this chapter, respectively.
    
    [[Page 70838]]
    
    PART 780--SURFACE MINING PERMIT APPLICATIONS--MINIMUM REQUIREMENTS 
    FOR RECLAMATION AND OPERATION PLAN
    
        22. The authority citation for part 780 is revised to read as 
    follows:
    
        Authority: 30 U.S.C. 1201 et seq. and 16 U.S.C. 470 et seq.
    
        23. In Sec. 780.31, the section heading and paragraph (a)(2) are 
    revised to read as follows:
    
    
    Sec. 780.31  Protection of publicly owned parks and historic places.
    
        (a) * * *
        (2) If a person has valid existing rights, as determined under 
    Sec. 761.16 of this chapter, or if joint agency approval is to be 
    obtained under Sec. 761.17(d) of this chapter, to minimize adverse 
    impacts.
    * * * * *
    
    
    Sec. 780.33  [Amended]
    
        24. In Sec. 780.33, ``30 CFR 761.12(d)'' is revised to read 
    ``Sec. 761.14 of this chapter''.
    
    PART 784--UNDERGROUND MINING PERMIT APPLICATIONS--MINIMUM 
    REQUIREMENTS FOR RECLAMATION AND OPERATION PLAN
    
        25. The authority citation for part 784 is revised to read as 
    follows:
    
        Authority: 30 U.S.C. 1201 et seq. and 16 U.S.C. 470 et seq.
    
        26. In Sec. 784.17, the section heading and paragraph (a)(2) are 
    revised to read as follows:
    
    
    Sec. 784.17  Protection of publicly owned parks and historic places.
    
        (a) * * *
        (2) If a person has valid existing rights, as determined under 
    Sec. 761.16 of this chapter, or if joint agency approval is to be 
    obtained under Sec. 761.17(d) of this chapter, to minimize adverse 
    impacts.
    
    
    Sec. 784.18  [Amended]
    
        27. In Sec. 784.18:
        a. In the introductory paragraph, ``30 CFR 761.12(d)'' is revised 
    to read ``Sec. 761.14 of this chapter''; and
        b. In paragraph (a), ``underground mining activities'' is revised 
    to read ``surface coal mining operations.''
    
    [FR Doc. 99-30892 Filed 12-16-99; 8:45 am]
    BILLING CODE 4310-05-p
    
    
    

Document Information

Effective Date:
1/18/2000
Published:
12/17/1999
Department:
Surface Mining Reclamation and Enforcement Office
Entry Type:
Rule
Action:
Final rule and record of decision.
Document Number:
99-30892
Dates:
January 18, 2000.
Pages:
70766-70838 (73 pages)
RINs:
1029-AB42: Definition and Criteria for Valid Existing Rights
RIN Links:
https://www.federalregister.gov/regulations/1029-AB42/definition-and-criteria-for-valid-existing-rights
PDF File:
99-30892.pdf
CFR: (34)
30 CFR 761.11(b)
30 CFR 761.11(d)(1)
30 CFR 761.17(d)
30 CFR 773.13(d)
30 CFR 761.11(e)(2)
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