[Federal Register Volume 59, Number 208 (Friday, October 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26554]
[Federal Register: October 28, 1994]
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Part III
Department of the Interior
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Office of Surface Mining Reclamation and Enforcement
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30 CFR Parts 701, 773, 778, 840, and 843
Applicant/Violator Computer System (AVS); Standards and Procedures for
Ownership and Control Determinations; Final Rule
_______________________________________________________________________
Office of Hearings and Appeals
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43 CFR Part 4
Hearings and Appeals Procedures; Special Rules Applicable to Surface
Coal Mining; Final Rule
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation and Enforcement
30 CFR Parts 701, 773, 778, 840, and 843
RIN 1029-AB34
Use of the Applicant/Violator Computer System (AVS) in Surface
Coal Mining and Reclamation Permit Approval; Standards and Procedures
for Ownership and Control Determinations
AGENCY: Office of Surface Mining Reclamation and Enforcement, Interior.
ACTION: Final rule.
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SUMMARY: The Office of Surface Mining Reclamation and Enforcement (OSM)
establishes new regulations to require regulatory authorities to use
OSM's Applicant/Violator Computer System (AVS) and other information
sources to identify ownership or control links between permit
applicants and violators.
The regulations establish the procedures, standards, and type of
proof required to challenge ownership or control links and to disprove
violations.
OSM also amends a number of regulations affecting blocking of
permits, abatement of notices of violation, improvidently issued
permits, and permit application information.
The regulations reduce the possibility of violators receiving and
retaining permits in violation of the permit approval provisions of
SMCRA. Finally, the rules establish enhanced due process procedures for
the regulated community.
EFFECTIVE DATE: November 28, 1994.
ADDRESSES: Office of Surface Mining Reclamation and Enforcement, U.S.
Department of the Interior, 1951 Constitution Avenue, NW., Washington,
DC 20240.
FOR FURTHER INFORMATION CONTACT: Russell Frum, Acting Chief, Applicant/
Violator System Office, Office of Surface Mining Reclamation and
Enforcement, U.S. Department of the Interior, 1849 C Street NW.,
Washington, DC 20240. Telephone: 202-208-4655.
SUPPLEMENTARY INFORMATION:
I. Background.
II. Rules Adopted and Responses to Public Comments.
III. Procedural Matters.
I. Background
Section 510(c) of the Surface Mining Control and Reclamation Act of
1977 (SMCRA or the Act) and 30 CFR part 773 establish certain
requirements for permits and permit processing. These requirements
include the identification of ownership or control links between permit
applicants and individuals or entities who are responsible for unabated
violations of certain Federal or State laws and rules. See 30 CFR
773.5; 30 CFR 773.15(b). The purpose of such inquiry is to determine
whether a permit applicant is linked to unabated violations of the Act
and related air and water quality requirements. See 30 CFR 773.15(b).
In the event that a permit applicant is so linked, the regulatory
authority may not issue a permit to the applicant unless the applicant
submits proof that the violation has been or is in the process of being
corrected to the satisfaction of the agency that has jurisdiction over
the violation. In the alternative, the applicant may establish that the
violation is the subject of a good faith, direct, administrative or
judicial appeal which contests the validity of the violation. Id. In
the event that a permit applicant is so linked and proof of the
violation's correction or good faith appeal is not submitted, issuance
of a permit to the applicant may constitute improvident issuance and
may subject the permittee to certain remedial measures including
suspension or rescission of the permit. See 30 CFR 773.20 and 30 CFR
773.21.
Under a court order in the case of Save Our Cumberland Mountains,
Inc. et al. v. Clark, No. 81-2134 (D.D.C. January 31, 1985) (Parker,
J.), the Secretary of the Interior was required to improve the
enforcement and implementation of Section 510(c) of SMCRA, and to
establish a computerized Applicant/Violator System (``AVS'') to match
permit applicants and their owners and controllers with current
violators of SMCRA. OSM has developed such a computer system to enable
OSM and State regulatory authorities to comply effectively with the
responsibilities prescribed by Section 510(c) of SMCRA and 30 CFR part
773.
On January 24, 1990, OSM and DOI entered into a Settlement
Agreement attempting to resolve litigation with Save Our Cumberland
Mountains (``SOCM'') and other plaintiffs. The Settlement Agreement was
approved by the U.S. District Court on September 5, 1990, and became
effective, by its own terms, on that date. See Memorandum of the Court,
Save Our Cumberland Mountains, Inc., et al., v. Lujan, No. 81-2134
(D.D.C. September 5, 1990). That Settlement Agreement contained
provisions whereby OSM agreed to propose rules to implement Section
510(c) of SMCRA and the AVS. Accordingly, on September 6, 1991, OSM
proposed rules whose purpose was:
to require that, prior to issuing permits to applicants, regulatory
authorities consider complete ownership and control information in
conducting the analysis mandated by section 510(c) of SMCRA and 30
CFR 773.15(b). The proposed rules would mandate the use of AVS as a
critical component of the ownership and control information
consideration process.
See Proposed Rule, Use of the Applicant/Violator Computer System in
Surface Coal Mining and Reclamation Permit Approval, 56 FR 45780, 45781
(September 6, 1991). While the proposal of the rules fulfilled certain
provisions of OSM's Settlement Agreement with SOCM, OSM indicated that:
it must be emphasized that OSM independently believes that the
proposal and public consideration of such rules are important to
assist OSM in implementing its duties under Section 510(c) of SMCRA
and duties imposed by regulations such as 30 CFR 773.15. The
proposed rules should be viewed as proposals that OSM would have
made regardless of any litigation or settlement.
Id. Subsequently, on March 16, 1992, the U.S. Court of Appeals (D.C.
Cir.) vacated the District Court's approval of the Settlement Agreement
with SOCM. Save Our Cumberland Mountains, Inc., et al., v. Lujan, No.
90-5374, Slip. Op. (U.S. Court of Appeals, D.C. Cir., May 22, 1992). In
its decision, the Court noted that ``nothing'' in the Court's opinion
precluded OSM's maintenance and improvement of the AVS as agency
policy. Id., at page 22.
As OSM indicated at the time of its proposal of September 1991,
these rules are important and appropriate--independent of any
litigation or settlement. OSM continues to be committed to the
maintenance and improvement of the AVS as a matter of agency policy and
believes that the publication of final rules is now necessary to the
effective implementation of section 510(c) of the Act and the
implementation of the AVS. OSM's commitment to AVS is in accord with
the position recently expressed by the Senate Appropriations Committee:
Regarding the AVS, the Committee joins the House in commending
OSM for improvements made to the system. The Committee has
consistently supported development and implementation of the AVS
because the AVS is essential to effective enforcement of the Surface
Mining Control and Reclamation Act of 1977 [SMCRA].
Report of the Senate Appropriations Committee, Senate Report No. 103-
114, at page 47 (July 28, 1993). Accordingly, OSM has determined to go
forward with the final rules published today without regard to the
course of litigation between OSM and SOCM or any other person. OSM has
reviewed the proposed rules in light of the comments that have been
made with a view towards serving the agency's commitment to protecting
the environment, to implementing SMCRA, and ultimately, to serving the
public interest.
These final rules incorporate the AVS into the Federal regulations
and mandate the use of the system by State and Federal surface mining
regulatory authorities. At the same time that these rules strengthen
the enforcement of Section 510(c), they also establish a detailed set
of procedural pathways to assure the protection of due process for the
regulated community.
Public Participation
As indicated above, OSM published proposed rules on September 6,
1991. The proposed regulations were available for public comment until
November 20, 1991. Comments were received from members of the regulated
community, representatives of environmental advocacy groups,
representatives of State regulatory authorities, and various citizens.
While a total of 20 commenters submitted written comments, most
comments can be grouped into three major categories which are captioned
below. After the discussion of these three major issues, this preamble
will then provide a section-by-section discussion of the final rules.
II. Rules Adopted and Responses to Public Comments
A. Summary of Rules Adopted
These final rules include the following provisions:
Part 701--Permanent Regulatory Program
Section 701.5 is amended to delete the definition of ``Violation
notice.''
Part 773--Requirements for Permits and Permit Processing
The Table of Contents is amended to include new section numbers
773.22, verification of ownership or control application information;
773.23, review of ownership or control and violation information;
773.24, procedures for challenging ownership or control links shown in
AVS; and 773.25, standards for challenging ownership or control links
and the status of violations.
Section 773.5 is amended to include definitions of ``Applicant/
Violator System'' or ``AVS.'' The terms are defined to mean the
computer system maintained by OSM to identify ownership or control
links involving permit applicants, permittees, and persons cited in
violation notices. The regulation is further amended to include
definitions of ``Federal violation notice,'' ``Ownership or control
link,'' ``State violation notice,'' and ``Violation notice.''
A ``Federal violation notice'' is defined to include a violation
notice issued by OSM or by another agency or instrumentality of the
United States.
An ``ownership or control link'' is defined as any relationship
included in the definition of ``owned or controlled'' or ``owns or
controls'' in 30 CFR 773.5 or in the violations review provisions of 30
CFR 773.15(b). It includes any relationship presumed to constitute
ownership or control under 30 CFR 773.5(b) unless such presumption has
been successfully rebutted under sections 773.24 and 773.25 of this
rule or under the provisions of 30 CFR part 775 and Sec. 773.25 of this
rule. It also includes an identity between persons, e.g., an applicant
and a violator.
A ``State violation notice'' is defined as a violation notice
issued by a State regulatory authority or by another agency or
instrumentality of State government.
``Violation notice'' is defined as any written notification from
any governmental entity advising of violations of the Act or any other
laws which would form the basis for a regulatory authority to deny
issuance of a permit in accordance with the criteria contained in
Sec. 773.15(b) of the regulations. The type of written notification is
broadly defined to include a letter, memorandum, legal or
administrative pleading, or other written communication. Consistent
with the provisions of Sec. 773.15(b), the term includes notification
of a violation of the Act, any Federal rule or regulation promulgated
pursuant thereto, a State program, or any Federal or State law, rule,
or regulation pertaining to air or water environmental protection in
connection with a surface coal mining operation. It includes, but is
not limited to, a notice of violation; an imminent harm cessation
order; a failure-to-abate cessation order; a final order, bill, or
demand letter pertaining to a delinquent civil penalty; a bill or
demand letter pertaining to delinquent abandoned mine reclamation fees;
and a notice of bond forfeiture, where one or more violations upon
which the forfeiture was based have not been corrected.
Section 773.10 is revised to include the new sections of the AVS-
related rules that result in information collection requirements. The
revision provides an estimate of the average public reporting burden of
four and one-half hours per response for the collection of information
under part 773 as such part is revised by these final rules. The
section also lists the addresses for OSM and OMB where comments on the
information collection requirements may be sent.
Paragraph 773.15(b)(1) is amended to require the regulatory
authority to review all reasonably available information concerning
violation notices and ownership or control links involving the
applicant. Such information would include that obtained pursuant to
Sec. 773.22 (verification of ownership or control application
information); Sec. 773.23 (review of ownership or control and violation
information); Sec. 778.13 (identification of interests); and
Sec. 778.14 (violation information).
The net effect of referencing such provisions in Sec. 773.15(b)(1)
is to assure that the regulatory authority makes a decision with
respect to permit issuance or denial based upon complete information
relating to ownership, control, and violations. Such complete
information includes the mandated use of AVS.
Furthermore, in accordance with Sec. 773.23, the regulatory
authority will follow the procedures and standards set forth in
Secs. 773.24 and 773.25 in deciding whether to issue the permit under
Sec. 773.15(b).
OSM has also decided to amend 30 CFR 773.15(b)(1) to provide that,
in the absence of a failure-to-abate cessation order (FTACO), a
regulatory authority may presume that a notice of violation (NOV) is
being corrected to the satisfaction of the agency with jurisdiction
over the violation where the abatement period for such notice of
violation has not yet expired and where the permit applicant has
provided certification in his or her permit application that such
violation is in the process of being abated to the satisfaction of the
agency with jurisdiction over the violation. In addition, OSM has also
amended 30 CFR 773.15(b)(2) to provide that any permits issued incident
to such presumption and certification will be conditionally issued
based upon successful completion of the necessary abatement.
Section 773.20 is amended by the insertion of a new paragraph
(b)(2), which makes the provisions of proposed Sec. 773.25, standards
for challenging ownership or control links and the status of
violations, applicable when a regulatory authority makes determinations
with respect to improvidently issued permits. In this context,
Sec. 773.25 is applicable when a regulatory authority determines
whether a violation, penalty, or fee existed at the time that it was
cited, remains unabated or delinquent, has been corrected, is in the
process of being corrected, or is the subject of a good faith appeal,
and whether any ownership or control link between the permittee and the
person responsible for the violation, penalty, or fee existed, still
exists, or has been severed.
The insertion of the language referring to Sec. 773.25 has the
effect of assuring that the standards, responsibilities, and procedures
created by proposed Sec. 773.25 are consistently applied to permit
issuance and to determinations regarding improvident permit issuance.
Such an approach enhances the fairness of the permitting process and
the prospect for the uniform enforcement of nationwide minimum
standards. In one respect, however, the improvident permit issuance
process will differ from the permit issuance process. In the
improvident permit issuance process, prior to permit suspension or
rescission, the permittee will be able to challenge the existence of
the violation at the time it was cited. In the permit issuance process,
prior to permit denial, the applicant will not be able to challenge the
existence of the violation at the time it was cited.
OSM has also renumbered certain provisions of the regulation at 30
CFR 773.20(c). Among such provisions, renumbered paragraph (c)(1)(iv),
which authorizes the regulatory authority to use rescission as one of
the remedial measures for improvident permit issuance, deletes a
specific reference contained in the former 30 CFR 773.20(c)(4) to the
rescission procedures of 30 CFR 773.21.
The reason for this deletion is that OSM today establishes a prior
notice and a common appeal procedure for both permit suspensions and
permit rescissions with respect to improvidently issued permits. The
former regulation governing permit suspensions at 30 CFR 773.20(c)(3)
did not impose any specific requirements for prior notice, opportunity
to be heard, or right of appeal for the permittee whose permit is to be
suspended. See 54 FR 18450 (1989). In contrast to this, regulations
governing permit rescissions at 30 CFR 773.21 contained specific
requirements for prior notice to a permittee and an explicit right of
appeal. OSM has now provided for greater consistency in its procedures
governing suspension and rescission of permits.
Accordingly, OSM amends 30 CFR 773.20 to add a new paragraph (c)(2)
which requires that a regulatory authority which decides to suspend a
permit must provide at least 30 days' prior written notice to the
permittee. In the event that the regulatory authority decides to
rescind a permit, it must provide notice in accordance with the
provisions of 30 CFR 773.21. The amendment further provides that a
permittee be given the opportunity to request administrative review of
the notice under Office of Hearings and Appeals, (OHA) rule 43 CFR
4.1370 et seq., where OSM is the regulatory authority, or under the
State program equivalent, where the State is the regulatory authority.
The regulation further allows for enhanced due process protection
and fairness by providing that temporary relief from the regulatory
authority's decision is available in accordance with the provisions of
OHA rule 43 CFR 4.1376 or the State program equivalent. In the absence
of such temporary relief, the regulatory authority's decision remains
in effect during the pendency of appeal.
OSM has retained the language in paragraph 773.20 which addresses
the situation which occurs when a permit is issued in reliance upon the
presumption that an NOV is being abated in the absence of a cessation
order and a cessation order is, in fact, issued with respect to the
violation. In such an event, a regulatory authority is required to find
that the permit has been improvidently issued.
OSM amends paragraph (a) of 30 CFR 773.21 to make the provisions of
Sec. 773.25, standards for challenging ownership or control links and
the status of violations, applicable when a regulatory authority
invokes the automatic suspension and rescission procedures of 30 CFR
773.21. The rationale for such amendment is the same as that discussed
above with respect to similar language contained in Sec. 773.20.
Further, OSM deletes former paragraph (c) of 30 CFR 773.21 which
provides for appeals of rescission notices. As discussed above,
rescission appeal procedures are incorporated in 30 CFR 773.20.
Section 773.22 is a new section and mandates an inquiry whose focus
is to assure that the regulatory authority develops complete and
accurate information as to the identification of the applicant and all
owners or controllers of the applicant prior to making a determination
on a permit application and enters such information promptly into the
AVS. Accordingly, this section focuses on verification of ownership or
control application information. Such accurate and complete information
enables the regulatory authority to make an informed decision as to
whether the applicant is linked to a surface coal mining and
reclamation operation in violation of the Act or other any other
environmental law within the terms of 30 CFR 773.15(b)(1).
Paragraph (a) of Sec. 773.22 imposes a duty upon a regulatory
authority to review the information provided in the permit application,
pursuant to 30 CFR 778.13(c) and 778.13(d), to determine whether the
information provided, including the identification of the operator and
all owners and controllers of the operator, is complete and accurate.
In making such determination, the regulatory authority is required to
compare information provided in the application with information
contained in manual and automated data sources. Manual sources for
review include the regulatory authority's own enforcement and
inspection records and State corporation commission or tax records, to
the extent they contain information concerning ownership or control
links. Automated data sources include the regulatory authority's own
computer systems, if any, and the AVS.
Paragraph (b) of Sec. 773.22 provides that, if it appears from
information provided in the application pursuant to paragraphs (c) and
(d) of Sec. 778.13 that none of the persons identified in the
application has had any previous mining experience, the regulatory
authority has to inquire of the applicant and investigate whether
anyone other than those persons identified in the application will own
or control the mining operation as either an operator or as another
type of owner or controller.
Paragraph (c) of Sec. 773.22 provides that if, after conducting the
information review described above, the regulatory authority identifies
any potential omission, inaccuracy, or inconsistency in the ownership
or control information provided in the application, it must contact the
applicant prior to making a final determination with respect to the
application. The applicant is then required to resolve the potential
omission, inaccuracy, or inconsistency through submission of an
amendment to the application or a satisfactory explanation which
includes credible information sufficient to demonstrate that no actual
omission, inaccuracy, or inconsistency exists. The regulation also
contains a reference to required action by the regulatory authority in
accordance with Sec. 843.23, sanctions for knowing omissions or
inaccuracies in ownership or control and violation information, or the
State program equivalent, where appropriate. As will be described more
fully below, OSM is deferring action at this time with respect to
proposed Sec. 843.23. Such proposed section will be considered as part
of a subsequent rulemaking. OSM has, however, retained the reference to
proposed Sec. 843.23 in final Sec. 773.22 in the event that proposed
Sec. 843.23 is ultimately adopted. Nevertheless, OSM has made no
decision with respect to the adoption of proposed Sec. 843.23 and the
retention of such reference does not mean that OSM will ultimately
adopt proposed Sec. 843.23 as a final rule.
Paragraph (d) of Sec. 773.22 requires that, upon completion of the
information review mandated by Sec. 773.22, the regulatory authority
promptly enter into or update all ownership or control information on
AVS.
Section 773.23 is a new section which delineates the regulatory
authority's review obligations with respect to a permit application
after the regulatory authority has completed the process of verifying
ownership or control application information as described in proposed
Sec. 773.22.
Paragraph (a) of Sec. 773.23 requires the regulatory authority to
review all reasonably available information concerning violation
notices and ownership or control links involving the applicant to
determine whether the application can be approved under the provisions
of 30 CFR 773.15(b). With respect to ownership or control links
involving the applicant, such information includes all information
obtained under proposed Sec. 773.22 and 30 CFR 778.13. With respect to
violation notices, such information includes all information obtained
under Sec. 778.14, information obtained from OSM, including information
shown in the AVS, and information obtained from the regulatory
authority's own records concerning violation notices.
In substance, the regulation assures that the regulatory authority
considers complete ownership, control, and violation information in
making the decision required by 30 CFR 773.15(b)(1) with respect to a
permit application.
Paragraph (b) of Sec. 773.23 provides the course of action which a
regulatory authority is required to take if the review conducted
pursuant to paragraph (a) of the section discloses any ownership or
control link between the applicant and any person cited in a violation
notice.
Thus, paragraph (b)(1) of Sec. 773.23 requires that the regulatory
authority notify the applicant of such link and refer the applicant to
the agency with jurisdiction over the violation notice.
Paragraph (b)(2) of Sec. 773.23 requires that the regulatory
authority not approve the permit application unless and until it
determines that all ownership or control links between the applicant
and any person cited in a violation notice are erroneous or have been
rebutted, or the regulatory authority determines that the violation to
which the applicant has been linked has been corrected, is in the
process of being corrected, or is the subject of a good faith appeal,
within the meaning of 30 CFR 773.15(b)(1) or the State program
equivalent. The determinations to be made by the regulatory authority
under paragraph (b)(2) of the regulation are made in accordance with
the provisions of Sec. 773.24, procedures for challenging ownership or
control links shown in AVS, and Sec. 773.25, standards for challenging
ownership or control links and the status of violations, or their State
program equivalents.
Paragraph (c) of Sec. 773.23 requires that, following the
regulatory authority's decision on the application or following the
applicant's withdrawal of the application, the regulatory authority is
required to promptly enter all relevant information related to the
decision or withdrawal into AVS. The regulatory authority's decision
could include unconditional issuance, conditional issuance, or denial
of the permit. The requirement that all relevant information be
promptly entered into AVS is intended to insure that AVS is continually
updated to reflect the most current information available with respect
to permit applicants. A critical source of such information is the
regulatory authority.
Section 773.24 is a new section that establishes the procedures to
be followed if a person wishes to challenge an ownership or control
link between a person and any other person shown on AVS. The procedures
to be followed by both OSM and the challenger are included. The section
provides procedures for direct appeals of such links to OSM by persons
who have been so linked. The section also provides for challenges
concerning the status of violations to which persons shown on AVS have
been linked. The section further provides the opportunity for those
persons making a challenge to obtain a temporary relief from any
adverse use of the challenged link or violation information during the
pendency of such challenge.
Paragraph (a)(1) of Sec. 773.24 provides that an applicant or
anyone else shown in AVS is an ownership or control link to any person
could challenge such a link in accordance with the provisions of
paragraphs (b) through (d) of Sec. 773.24 and in accordance with the
provisions of Sec. 773.25. Paragraph (a)(1) of Sec. 773.24 provides,
however, that such challenge is not available if the challenger is
bound by a prior administrative or judicial decision with respect to
the link.
Paragraph (a)(1) of Sec. 773.24 provides that challenges of
ownership or control links shown on AVS are made before OSM.
Paragraph (a)(2) of Sec. 773.24 provides that an applicant or
anyone else shown in AVS in an ownership or control link to a person
cited in a Federal violation notice seeking to challenge the status of
such violation may do so in accordance with the provisions of
paragraphs (b) through (d) of Sec. 773.24 and in accordance with the
provisions of Sec. 773.25, which are discussed in detail below. The
procedures applicable are similar to those described in paragraph
(a)(1) of Sec. 773.24.
The ``status of the violation'' means whether the violation remains
outstanding, has been corrected, is in the process of being corrected,
or is the subject of a good faith, direct administrative or judicial
appeal to contest the validity of the violation. See 30 CFR
773.15(b)(1)(i)-(ii). This usage is carried forward into paragraphs (b)
and (c) of Sec. 773.24 and into the provisions of paragraph (b)(1)(iv)
of Sec. 773.25. The process for challenging the status of a Federal
violation is a Federal process and such challenges will be made before
OSM.
In challenging the current status of a violation under Sec. 773.24
or 773.25, a person will not be able to challenge the existence of the
violation at the time it was cited unless the challenge is made by a
permittee within the context of the improvidently issued permit process
or by an applicant after permit denial. In general, the existence of
the violation will have been established by prior administrative or
judicial proceedings involving the person cited in the violation
notice, or by such person's failure to exhaust its available remedies
in a timely manner.
Paragraph (a)(2) of Sec. 773.24 provides, in language similar to
that contained in paragraph (a)(1) of the regulation, that the
opportunity to challenge the status of a violation is not available to
any person who ``is bound by a prior administrative or judicial
determination concerning the status of the violation.''
Paragraph (a)(3) of Sec. 773.24 provides that any applicant or
person shown in AVS to be linked by ownership or control to a person
cited in a State violation notice may challenge the status of the
violation before the State that issued the violation notice. The
challenge must be made in accordance with the State's program
equivalents to paragraphs (b) through (d) of Sec. 773.24 and
Sec. 773.25. Again, the challenge may not involve the existence of the
violation at the time it was cited, and is not available if the
challenger is bound by a prior administrative or judicial determination
with respect to status of the violation.
Paragraph (b) of Sec. 773.24 requires that any applicant or other
person seeking to challenge ownership or control links shown in AVS or
the status of Federal violations must submit to OSM a written
explanation of the basis for his or her challenge and provide relevant
evidentiary materials and supporting documents. The information must be
submitted to the Chief of OSM's AVS Office in Washington, DC.
Paragraph (c) of Sec. 773.24 provides that, in response to a
challenge made under paragraph (b) of that section, OSM must make a
written decision with respect to the ownership or control link and/or
with respect to the status of the violation.
Paragraph (d)(1) of Sec. 773.24 provides that, if OSM has
determined that the ownership or control link has been shown to be
erroneous or has been rebutted and/or that the violation covered by the
violation notice has been corrected, is in the process of being
corrected, or is the subject of a good faith appeal, OSM is required to
provide notice of its determination to the permit applicant or other
person challenging the link or the status of the violation. If an
application is pending, OSM must also notify the regulatory authority
before whom the application is pending. Further, OSM is required to
correct information contained in AVS to reflect the determination which
has been made.
Paragraph (d)(2) of Sec. 773.24 provides that, if OSM has
determined that the challenged ownership or control link has not been
shown to be erroneous and has not been rebutted, and that the violation
remains outstanding, OSM must provide notice of its determination to
the permit applicant or other person challenging the link or the status
of the violation. If an application is pending, OSM must also notify
the regulatory authority before whom the application is pending.
Further, OSM is required to update information contained in AVS, if
necessary, to reflect OSM's determinations.
Paragraph (d)(2)(i) of Sec. 773.24 provides that OSM must serve a
copy of its decision with respect to a challenge upon the applicant or
other challenger by certified mail, or by any other means consistent
with the rules governing service of a summons and complaint under Rule
4 of the Federal Rules of Civil Procedure. The regulation provides that
service is complete upon tender of the notice or of the mail and is not
deemed incomplete by virtue of a challenger's refusal to accept the
notice or mail.
Paragraph (d)(2)(ii) of Sec. 773.24 provides that the applicant or
other challenger can appeal OSM's decision to the Department of the
Interior's Office of Hearings and Appeals (OHA) within 30 days of such
decision in accordance with OHA regulations at 43 CFR 4.1380 et seq.
Paragraph (d)(2)(ii) further provides that OSM's decision remains in
effect unless temporary relief was granted in accordance with OHA
regulations at 43 CFR 4.1386. The filing of an appeal will not
automatically suspend the use of the information in AVS during the
pendency of such appeal. The challenger must explicitly seek such
relief in appeal proceeding before OHA.
Section 773.25 is a new section which establishes standards for
challenges to ownership or control links and for challenges to the
status of violations. The section allocates responsibilities between
OSM and State regulatory authorities for resolving issues related to
ownership and control and provides the standards for evidence to
resolve such issues.
Paragraph (a) of Sec. 773.25 provides that provisions of
Sec. 773.25 are applicable to any challenge concerning an ownership or
control link to any person or the status of any violation covered by a
violation notice when such challenge is made under the provisions of 30
CFR 773.20 and 30 CFR 773.21 (improvidently issued permits);
Secs. 773.23 (the regulatory authority's review of ownership or control
and violation information), and 773.24 (procedures for challenging
ownership or control links shown in AVS); or 30 CFR part 775
(administrative and judicial review of permitting decisions).
Paragraph (b) of Sec. 773.25 provides the basic allocation of
responsibility among regulatory authorities to make decisions with
respect to ownership or control and with respect to the status of
violations.
Paragraph (b)(1)(i) of Sec. 773.25 provides that the regulatory
authority before which an application is pending has responsibility for
making decisions with respect to the ownership or control relationships
of the application.
Paragraph (b)(1)(ii) of Sec. 773.25 provides that the regulatory
authority that issued a permit has responsibility for making decisions
with respect to the ownership or control relationships of the permit.
Paragraph (b)(1)(iii) of Sec. 773.25 provides that the State
regulatory authority that issued a State violation notice has
responsibility for making decisions with respect to the ownership or
control relationships of the violation.
Paragraph (b)(1)(iv) of Sec. 773.25 provides that the regulatory
authority that issued a violation notice, whether State or Federal, has
responsibility for making decisions concerning the status of the
violation covered by the notice.
The ``status'' of the violation means whether the violation remains
outstanding, has been corrected, is in the process of being corrected,
or is the subject of a good faith appeal, within the meaning of 30 CFR
773.15(b)(1).
Paragraph (b)(2) of Sec. 773.25 provides that OSM has
responsibility for making decisions with respect to the ownership or
control relationships of a Federal violation notice.
Paragraph (b)(3)(i) of Sec. 773.25 provides that with respect to
information shown on AVS, the responsibilities of State regulatory
authorities to make decisions with respect to ownership or control
links are subject to the plenary authority of OSM.
Paragraph (b)(3)(ii) of Sec. 773.25 provides that with respect to
information shown on AVS relating to the status of a violation and with
respect to ownership or control information which has not been entered
into AVS by a State, the authority of a State regulatory authority is
subject to OSM's oversight authority under 30 CFR parts 773, 842, and
843.
Paragraph (c) of Sec. 773.25 establishes evidentiary standards
applicable to the formal and informal review of ownership or control
links and the status of violations.
Paragraph (c)(1) of Sec. 773.25 provides that in any formal or
informal review of an ownership or control link or of the status of a
violation covered by a violation notice, the agency responsible for
making a decision is required to first make a prima facie determination
or showing that the link exists, existed during the relevant period,
and/or that the violation remains outstanding. A prima facie
determination is made when the agency is reviewing the evidence itself,
in an informal process; a prima facie showing is made when the agency's
determination is the subject of a formal administrative or judicial
review process. When the agency makes such a determination or showing,
the person seeking to challenge the link or the status of the violation
then has the burden of proving the necessary elements of his or her
challenge to the link or to the status of the violation by a
preponderance of the evidence.
Under paragraph (c) of Sec. 773.25, a challenger of a link has to
prove at least one of three proposed conclusions by a preponderance of
the evidence to succeed in his or her challenge.
First, under paragraph (c)(1)(i) of Sec. 773.25, a challenger could
prove that the facts relied upon by the responsible agency to establish
ownership or control under the definition of ``owned or controlled'' or
``owns or controls'' in 30 CFR 773.5 do not or did not exist or that
the facts relied upon to establish a presumption of ownership or
control under the definition of ``owned or controlled'' or ``owns or
controls'' in 30 CFR 773.5 do not or did not exist.
Paragraph (c)(1)(ii) of Sec. 773.25 provides that a person subject
to a presumption of ownership or control under the definition of
``owned or controlled'' or ``owns or controls'' in 30 CFR 773.5 could
rebut such presumption by demonstrating that he or she does not or did
not in fact have the authority directly or indirectly to determine the
manner in which surface coal mining operations are or were conducted.
Paragraph (c)(1)(iii) of Sec. 773.25 provides that a challenger
could prove that the violation covered by a violation notice did not
exist, has been corrected, is in the process of being corrected, or is
the subject of a good faith appeal within the meaning of 30 CFR
773.15(b)(1). Paragraph (c)(1)(iii) further provides, however, that a
person challenging the status of a violation would not be able to
challenge the existence of the violation at the time it was cited under
the provisions of Sec. 773.24 unless such challenger is a permittee
acting within the context of Secs. 773.20-773.21 of this part. In any
circumstance, a person who had failed to take timely advantage of a
prior opportunity to challenge the violation notice or who was bound by
a previous administrative or judicial determination concerning the
existence of the violation would also be precluded from making a
challenge to the existence of the violation at the time it was cited in
any proceeding.
Paragraph (c)(2) of Sec. 773.25 describes the type of evidence that
a person challenging an ownership or control link or the status of a
violation has to present to meet the burden of proof by a preponderance
of the evidence. The regulation provides that the evidence presented be
probative, reliable, and substantial. See 5 U.S.C. 556(d).
Paragraph (c)(2) of Sec. 773.25 provides a list of examples of such
evidence for proceedings before the ``responsible agency'' (the agency
with responsibility for making a decision with respect to a challenge)
and for proceedings before administrative or judicial tribunals
reviewing the decisions of the responsible agency. The list of the
types of acceptable evidence is intended to be illustrative, not
exhaustive. It is expected that regulatory authorities will add to this
list as they develop experience in making determinations under the
regulation.
Paragraph (c)(2)(i) of Sec. 773.25 focuses upon proceedings before
the responsible agency. The list of examples includes documents which
are likely to be truthful and which have certain indicators of
reliability which go beyond the mere assertions of the individual
presenting the evidence.
Paragraph (c)(2)(i)(A) of the section provides that a challenger
may submit affidavits setting forth specific facts concerning the scope
of responsibility of the various owners or controllers of an applicant,
a permittee, or any person cited in a violation notice; the duties
actually performed by such owners or controllers; the beginning and
ending dates of such owners' or controllers' affiliation with the
applicant, permittee, or person cited in a violation notice; and the
nature and details of any transaction creating or serving an ownership
or control link; or specific facts concerning the status of the
violation.
Paragraphs (c)(2)(i)(B) and (c)(2)(i)(C) of section 773.25 each
look to official certification as the basis for the reliability of a
submitted document. Paragraph (c)(2)(i)(B) allows for the submission of
copies of certain types of documents if they are certified. Such
documents include copies of corporate minutes, stock ledgers,
contracts, purchase and sale agreements, leases, correspondence or
other relevant company records. Paragraph (c)(2)(i)(C) allows for
submission of certified copies of documents filed with or issued by any
State, municipal, or Federal governmental agency.
Paragraph (c)(2)(i)(D) of final Sec. 773.25 provides for a
challenger's submission of an opinion of counsel in support of his or
her position. Such opinion would be appropriate for submission when it
is supported by evidentiary materials; when it is rendered by an
attorney who certifies that he or she is qualified to render an opinion
of law; and when counsel states that he or she has personally and
diligently investigated the facts of the matter or where counsel states
that such opinion is based upon information which has been supplied to
counsel and which is assumed to be true.
Paragraph (c)(2)(ii) of Sec. 773.25 provides that, when the
decision of the responsible agency is reviewed by an administrative or
judicial tribunal, the challenger could present any evidence to such
tribunal which is admissible under the rules of the tribunal. Under the
regulation, however, the evidence submitted still has to be probative,
credible, and substantial.
Paragraph (d) of Sec. 773.25 provides for the review and revision
of information in AVS to reflect determinations made by regulatory
authorities in response to challenges of ownership or control links or
the status of violations. Paragraph (d) provides that, following any
determination by a State regulatory authority or other State agency, or
following any decision by an administrative or judicial tribunal
reviewing such determination, the State regulatory authority shall
review the information in AVS to determine if the information in AVS is
consistent with the determination or decision. If it is not consistent,
the State regulatory authority is required to promptly inform OSM and
request that the AVS information be revised to reflect the
determination or decision.
Part 778--Permit Applications--Minimum Requirements for Legal,
Financial, Compliance, and Related Information
Paragraph (c) of 30 CFR 778.14 is amended to require a permit
applicant to disclose ``all violation notices'' received by the
applicant within the preceding three years. In addition, the
introductory language of the provision is amended to require the
disclosure of all outstanding violation notices for any surface coal
mining operation that is deemed or presumed to be owned or controlled
by either the applicant or by any person who is deemed or presumed to
own or control the applicant under definitions of ``owned or
controlled'' or ``owns or controls'' under 30 CFR 773.5.
The regulation previously required the applicant to disclose
violations of a number of various laws listed in 30 CFR 778.14(c). Use
of the amended definition of ``violation notice'' adopted today as part
of 30 CFR 773.5 obviates the need for listing each of these violations
in 30 CFR 778.14.
The regulation also previously required that the applicant provide
only a list of unabated cessation orders and unabated air and water
quality violation notices received prior to the date of the application
by any surface coal mining and reclamation operation owned or
controlled by either the applicant or by any person who owns or
controls the applicant. With respect to this list, the previous
regulation did not require that an applicant list notices of violation
received or unpaid penalties or fees incurred by any surface coal
mining operation owned or controlled by the applicant or by any person
who owns or controls the applicant.
Paragraph (c) of Sec. 778.14 is now amended to require an applicant
to disclose all outstanding violation notices received by any surface
coal mining operation that is deemed or presumed to own or control the
applicant.
In addition, OSM has amended paragraph (c) of Sec. 778.14 to
provide that for each notice of violation issued pursuant to 30 CFR
843.12 or under a Federal or State program for which the abatement
period has not expired, the applicant must certify that such notice of
violation is in the process of being abated to the satisfaction of the
agency with jurisdiction over the violation.
Part 840--State Regulatory Authority: Inspection and Enforcement
Paragraph (b) of 30 CFR 840.13 is amended to include a reference to
Sec. 843.23, a proposed rule. As has been explained previously, OSM has
deferred action on adopting proposed Sec. 843.23 at this time. The
reference, however, to that section has been placed in Sec. 840.13 in
the event that proposed Sec. 843.23 is adopted. The use of such
reference does not mean, however, that OSM will ultimately adopt
proposed Sec. 843.23.
Part 843--Federal Enforcement
OSM amends the Table of Contents of 30 CFR part 843 to add
Sec. 843.24, oversight of State permitting decisions with respect to
ownership or control of the status of violations.
Former Sec. 843.10 is deleted since part 843 did not contain any
information collection requirements which require approval by the
Office of Management and Budget under 44 U.S.C. 3507. The references to
Secs. 843.14(c) and 843.16 formerly in Sec. 843.10 did not represent
information collection requirements. The requirement in Sec. 843.14(c)
for OSM to furnish copies of notices and orders to the State regulatory
authority and to any person having an interest did not require OMB
approval because the obligation to provide the information is imposed
upon OSM and not upon the State or upon a member of the public. Section
843.16 merely informs the public of the right to file an application
for review and request a hearing under 43 CFR part 4.
Section 843.24 is a new section which provides standards for OSM's
oversight of State permitting decisions with respect to ownership or
control or the status of violations.
Paragraph (a) of Sec. 843.24 establishes the bases which require
OSM to take action under the provisions of paragraphs (b) and (c) of
proposed Sec. 843.24. Paragraph (a) provides that OSM is required to
take action whenever it determines, through its oversight of the
implementation of State programs, that a State has issued a permit
without complying with the State program equivalents of proposed
Secs. 773.22 (verification of ownership or control application
information), 773.23 (review of ownership or control and violation
information), 773.24 (procedures for challenging ownership or control
links shown in AVS), 773.25 (standards for challenging ownership or
control links and the status of violations), and Sec. 843.23. As has
been explained previously, OSM has deferred action on adopting proposed
Sec. 843.23 at this time. The reference, however, to that proposed rule
has been placed in Sec. 843.24 in the event that Sec. 843.23 is
adopted. The use of such reference does not mean, however, that OSM
will ultimately adopt proposed Sec. 843.23.
If, as a result of determination made under paragraph (a) of
Sec. 843.24, OSM has reason to believe that the State has issued a
permit improvidently within the meaning of 30 CFR 773.20, paragraph (b)
of Sec. 843.24 requires OSM to initiate action under 30 CFR 843.21.
Paragraph (c) of Sec. 843.24 provides for remedial actions by OSM
against a State which knowingly fails to comply with the regulations
relating to ownership or control and violation information during the
permit application process.
B. General Comments
Numerous comments were made which addressed various issues with
respect to the overall rulemaking. While such comments also invoked
particular sections of the proposed rules, these comments asserted
several central themes which went beyond particular sections of the
rulemaking even through specific sections of the proposed rulemaking
were referenced as areas of concern by the commenters. Accordingly, OSM
has decided to address these central issues in this portion of the
preamble. Within the context of such discussion, particular sections of
the proposed and final rules will be referred to as necessary.
Nevertheless, in these responses, OSM focuses upon central issues which
appear to be of overarching concern to the commenters.
Due Process
Industry commenters asserted that the proposed rules violated due
process and the underlying principles of the Act. These commenters
further argued that OSM's proposed rules violated due process
principles because they did not allow for a permit conditioned upon the
outcome of an appeal of an ownership or control link, upon the
challenge of the status of the violation, or upon the challenge of the
existence of the violation at the time it was cited. They also asserted
that because OSM did not allow for de novo challenges of the existence
of violations by owners or controllers, the proposed rules violated due
process principles.
OSM disagrees with these commenters' characterizations. The
proposed rules and the rules which have been adopted today provide
detailed procedures to assure that those wishing to contest ownership
or control links and the status of violations may do so. Further, the
proposed and final rules provide that decisions on these matters are
made based upon credible evidence and fair processes. Those seeking to
challenge the existence of violations have the opportunity to do so,
incident to permit denial, in accordance with currently existing rules
which predate this rulemaking. See Preamble to Requirements for Surface
Coal Mining and Reclamation Permit Approval; Ownership and Control;
Final Rule, 53 FR 38868 at page 38885 (``Due Process Provided.'')
(October 3, 1988). In addition, today's final rules clarify that
permittees may make such challenges within the context of the
improvidently issued permit process. The procedures provided in today's
final rules supplement current rules contained at 30 CFR part 773 to
provide more than sufficient due process to protect the limited
property interest a permit applicant has in the expectancy of a permit
to engage in surface coal mining operations.
OSM does not believe that principles of due process mandate, as a
necessary condition precedent to the denial of a permit to an owner or
controller of a violator, that the agency provide a full, formal, de
novo hearing on the merits of an ownership or control link, the
existence of the violation at the time it was cited, and the status of
the violation--followed by an exhaustive appeal on each of these
matters to the court of last resort. Instead, the final rules adopted
today provide due process commensurate with the limited interest of a
permit applicant--the expectancy of permit issuance. OSM's position is
consistent with the agency's earlier statements relating to the
sufficiency of due process and the protection of property rights
provided by the ownership and control rules and the AVS. See Preamble
to Requirements for Surface Coal Mining and Reclamation Permit
Approval; Ownership and Control; Final Rule, 53 FR 38868 at page 38885
(October 3, 1988).
Moreover, in the cases of Pittston Co. v. Lujan, No. 92-1606 (4th
Cir.) and No. 91-0006-A (W.D. Va.), National Wildlife Federation v.
Lujan, No. 88-3117 (D.D.C.), and Save Our Cumberland Mountains, Inc. v.
Lujan, No 81-2134 (D.D.C.), coal industry interests advanced similar
due process arguments attacking the agency's ownership and control
rules published at 53 FR 38868 et seq. on October 3, 1988, and the
agency's implementation of AVS and those rules. In the briefs submitted
by the Department of the Interior in those cases, the Department
analyzed relevant case law and carefully explained why the due process
criticisms were not well taken. Copies of these briefs are being placed
in the Administrative Record of this rulemaking. To the extent
relevant, OSM incorporates the arguments advanced by the Department in
those briefs herein by reference.
Further, OSM disagrees with the commenters' view that due process
requires that conditional permits be made available during the tendency
of the appeal of an ownership or control link as a condition precedent
to permit block. The final rules published today provide ample
protection for an owner or controller by providing the opportunity for
an owner or controller to challenge an ownership or control link.
Further, the final rules provide for the Department's Office of
Hearings and Appeals (OHA) to grant temporary relief from a permit
block, where, inter alia, the challenger has a substantial likelihood
of prevailing on the merits of the appeal. OHA is contemporaneously
publishing final rules establishing procedures for the granting of
temporary relief. Under OSM's final rules published today and the OHA
rules, the likelihood of the erroneous deprivation of a permit due to
an erroneous link is minimal. An appellant with a meritorious claim can
get relief. Conditional permits for all appellants, without regard to
the merits of their claims, are unnecessary and unwarranted.
Moreover, the final rules published today provide a measure of
protection commensurate with the very limited interest that a permit
applicant has in his or her application for a permit. An applicant does
not have a right to a permit to mine coal in the same way that he or
she has title to real property or a leasehold interest in a mineral
lease. A permit to mine coal is a privilege granted by the regulatory
authority to those who have complied with the requirements of the Act
and the applicable regulatory program, including the provisions of
Section 510(c) of the Act and the provisions of 30 CFR part 773. Until
an applicant has been found in compliance with the applicable
provisions of the program; until the other provisions governing permit
issuance have been satisfied; and until a permit has been issued, the
applicant has, at most, an expectation which may or may not be
reasonable, depending upon the circumstances, that he or she will
qualify for permit issuance. Such an expectancy is highly speculative,
continent, and limited. Investments based on an expectancy do not
transform the expectancy into a presently vested property right. See
generally Jacobsen v. Hannifin, 627 F.2d 177, 179-80 (9th Cir. 1980).
``To have a property interest in a benefit, a person clearly must have
more than an abstract need or desire for it. He must have more than a
unilateral expectation of it. He must, instead, have a legislation
claim of entitlement to it.'' See also Board of Regents v. Roth, 408
U.S. 564, 577 (1972).
In contrast to this, the agency's interest in and responsibility
for implementing Section 510(c) of the Act is substantial and must be
balanced against the limited property interest of the permit applicant.
OSM's ability to implement the provisions of Section 510(c) of the Act
is critical to the agency's enforcement of the Act. Those provisions of
the Act prevent violators from receiving new permits and, thus, from
injuring the environment at new surface coal mining operations. Those
provisions of the Act encourage abatement of violations and deter
operators and their owners or controllers from committing violations.
Potential applicants fear permit denial in the future. Therefore, such
applicants are motivated to prevent or abate violations in the present.
Thus, OSM has a substantial interest in the successful, credible
implementation of Section 510(c) of the Act.
If conditional permits were allowed during the pendency of a
prolonged appellate process challenging an ownership or control link,
the agency's ability to enforce the provisions of section 510(c) of the
Act and the ownership and control rules would be severely compromised.
Rather than abate the violations of their owned or controlled
operations, it is possible that some applicants would routinely appeal
ownership or control links without regard to the strength of the link
as demonstrated by a full proceeding on the merits. Such applicants
would appeal merely for the purpose of gaining conditional permits.
Depending upon how long the appeals process ran, an operator with a
conditional permit could extract a significant portion of the coal in a
permitted mine and would have no incentive to abate the violations of
the surface coal mining operation to which he had been linked. The Act
does not contemplate such a result; nor does the Constitution require
it.
Further, such a result would provide an unfair competitive
advantage to an unscrupulous operator to the detriment of the interests
of the other members of the coal industry, the majority of whom take
responsibility for environmental reclamation and are responsible
corporate citizens.
Nevertheless, industry commenters have asserted that there is
little likelihood of operators making frivolous or bad faith ownership
or control appeals because they have significant investments in their
surface coal mining operations. While OSM recognizes that this is
probably true for the majority of operators, including those who have
provided comments on the proposed rules, experience has shown that a
small minority of irresponsible operators can create harm
disproportionate to their numbers. In the process, such irresponsible
operators do harm not just to OSM's effective implementation of the
Act, but also to the reputation of the industry as well.
For instance, a marginal operator's significant investment in coal
extraction equipment may mask his/her plan to avoid spending resources
on reclamation. Indeed, there could be a serious economic temptation
for such an operator to protect a significant investment by appealing,
if such appeal would support the continuation of operations.
Accordingly, OSM considers the extent of an applicant's investment in a
surface coal mining operation to be an unreliable indicator of an
applicant's motive in initiating an appeal. Thus, OSM declines to
develop a process requiring the evaluation of operators' good faith
based upon their comparative investments in surface coal mining
operations.
OSM does recognize, however, that a permittee has an interest in
his permit deserving of a higher level of protection than that of an
applicant with respect to an application. A valid permit represents
more than the mere expectancy represented by an application. A current,
valid permit represents legal authorization to conduct surface coal
mining operations in accordance with the terms of such permit. See
section 506 of the Act. Further, a permit carries with it the right of
successive renewal. See section 506(d)(1) of the Act; 30 CFR 774.15.
Thus, a detailed process governing improvidently issued permits has
been established which recognizes this interest. See 30 CFR 773.20;
773.21. In response to concerns asserted by industry with respect to
due process, OSM has amended the regulations governing improvident
permit issuance to provide that a permittee can challenge the existence
of the violation at the time it was cited as part of the improvidently
issued permit process. See 773.20(b)(2). OSM has done this in
recognition of the more substantial interest that a permit represents
in contrast to the limited interest represented by a permit
application.
Industry commenters have further asserted that an owner or
controller must be afforded the opportunity to challenge the validity
of the existence of the violation at the time that it was cited as a
condition precedent to the recommendation of a denial of a permit
application for an owner or controller of the violation. These
commenters argued that owners or controllers may not have had the
opportunity to challenge the validity of the violation which forms the
basis of the permit denial at the time it was cited. They argued that
only the actual violators were cited at that time and that the owners
or controllers would not have received notice in a timely manner to
enable them to challenge the violation then. They further asserted that
a right to contest the merits of a violation after permit denial is not
sufficient to redress the harm caused by permit denial. Rather than
face permit denial, they asserted that coal operators will be forced to
pay the disputed fees or to reclaim land. Accordingly, they asserted
that they should be allowed to challenge the violation prior to any
permit denial.
OSM disagrees with those views. The rights of an owner or
controller are well protected by the ability to challenge the link to
the violation. If the ownership or control link is not well taken, then
the violation is irrelevant as a basis for permit block. If the link is
meritorious, the owner or controller would have been well-positioned to
have had knowledge in fact of the citations, if he or she desired such
knowledge, see, e.g., 30 CFR 843.15(d), and to have compelled the
controlled surface coal mining operation to abate the violation or to
challenge the violation in a timely manner. See, e.g., 30 CFR
843.16(a). Accordingly, if an ownership or control link is well taken,
the owner or controller has already had an opportunity to challenge the
violation or to abate the violation through the controlled entity.
Under these circumstances, OSM does not believe that an owner or
controller is entitled to an additional opportunity to challenge the
existence of a violation before the regulatory authority can deny
issuance of a permit.
Even so, the final rules promulgated today would not prohibit the
challenge of the existence of the violation. Such a challenge, however,
must be made at the time of permit denial, rather than before, by
persons who are not bound by prior administrative or judicial
proceedings with respect to the existence of the violation or who have
not had a prior opportunity to challenge the existence of the
violation. This is entirely consistent with OSM's position as expressed
in the preamble to the ownership and control rules published in 1988.
See Preamble to Requirements for Surface Coal Mining and Reclamation
Permit Approval; Ownership and Control; Final Rule, 53 FR 38868 at page
38885 (October 3, 1988).
Additionally, within the context of today's final provisions
amending the regulations governing improvident permit issuance, OSM has
made explicit that a permittee may challenge the existence of the
violation at the time it was cited. A permittee may make such challenge
if the challenge is not otherwise precluded by a permittee's previous
failure to take advantage of a prior opportunity to challenge or by a
prior administrative or judicial determination concerning the existence
of the violation. See Secs. 773.20 and 773.25.
Nevertheless, the industry commenters questioned whether the
ability to challenge a violation after permit denial is illusory
because OSM may attempt to argue that the owner or controller failed to
take advantage of a prior opportunity to challenge the violation at the
time that it was issued or that the challenger was bound by a prior
administrative or judicial determination. This is not OSM's intent.
Each specific case must be evaluated on its merits. In general, a
challenge would be precluded only when the facts indicate that a
potential challenger has already had the opportunity to challenge and
has squandered it, or when the potential challenger is bound by a prior
determination. The purpose of this portion of the proposed rules and
the final rules as adopted is to eliminate multiple repetitive
opportunities for challenge for those who have already had a
substantive opportunity to challenge, either directly or through a
controlled entity. It is not OSM's intention to assert these defenses
to a challenge unless such defenses are supported by the facts of a
particular case.
Industry commenters argued that a State's decision to deny a permit
based upon violation information contained in AVS is also not subject
to challenge. OSM disagrees. The existence of the violation at the time
it was cited, along with any other bases for permit denial, may be
challenged in a proceeding under 30 CFR part 775, or the equivalent
State programs, subject to the defenses discussed above. To the extent
that a regulatory authority has based its permit denial decision upon
violation information contained in AVS, that information would be an
integral part of the challenge proceeding. When administrative and
judicial tribunals consider appeals of permit denials, it is probable
that evidence related to violations which form the basis of a permit
denial will be relevant to the tribunal. OSM will work with State
regulatory authorities to provide supporting documentation if required
for appeals of State permitting decisions. OSM anticipates that State
regulatory authorities will similarly cooperate with OSM and with each
other in making such evidence related to violation information
available to administrative and judicial tribunals.
Industry commenters also asserted that the proposed rules, along
with the ownership and control rules promulgated in 1988, deny due
process in that they retroactively impose responsibilities for
violations upon owners and controllers. Again, OSM must reject this
characterization of the effect of the proposed rules and 1988 ownership
and control rules. OSM must further reject this characterization with
respect to the final regulations adopted today. The ownership and
control rules published in 1988, the AVS-related proposed rules
published in September, 1991, and the final rules published today
subject the owners or controllers of violations to permit denial for
currently outstanding violations, rather than past, abated violations.
This obligation follows the clear mandate of section 510(c) of the Act
which requires the denial of permits when ``any surface coal mining
operation owned or controlled by the applicant is currently in
violation'' of the Act or other laws cited.
Moreover, the presumptions of ownership and control provided by 30
CFR 773.5 and the final rules merely reflect the reality that owners or
controllers have the authority, by reason of their control at the time
that the violations are committed or during any period when the
violations remained outstanding, to be aware of violations, to compel
their controlled entities to undertake timely challenges of violations,
and to compel their controlled entities to abate violations of the Act.
Under these circumstances, there is no retroactive application of
responsibility.
Moreover, the clear provisions of section 507(b)(4) of the Act
require, in substance, that permit applicants identify most of those
people who are considered owners or controllers for purposes of section
510(c) of the Act and 30 CFR 773.15 and 773.5. As OSM observed in the
preamble to the ownership and control rules published in 1988:
The legislative history of section 507(b)(4) includes the
statement that ``[t]he information required by [section 507(b)(4)]
is a key element of the operator's affirmative demonstration that
the environmental protection provisions of the Act can be met as
stipulated in Section 510 and includes: (1) Identification of all
parties, corporations, and officials involved to allow
identification of parties ultimately responsible * * *.'' H.R. Rep.
No. 94-896, 94th Cong., 2nd Sess. 111 (1976). (Emphasis added.) See
also S. Rep. No. 94-28, 94th Cong., 1st Sess. 206 (1975).
See Preamble to Requirements for Surface Coal Mining and Reclamation
Permit Approval; Ownership and Control; Final Rule, 53 FR 38868 at page
38875 (October 3, 1988).
With the ownership and control rules published in October of 1988
and with these final rules published today, OSM is simply implementing
sections 510(c) and 507(b)(4) of the Act. None of these provisions
impose retroactive responsibilities.
Finally, related to their due process concerns, industry commenters
argued that the proposed rules also violate the Act by not providing
conditional permits during the appeal of ownership or control links,
the current status of the violation, or the existence of the violation
at the time it was cited. They pointed to the provisions of current 30
CFR 773.15(b)(2) which allow for a permit to be conditioned upon a good
faith, direct administrative or judicial appeal to contest the validity
of the current violation as indicative of the agency's longstanding
recognition that such an appeal is consistent with the Act.
OSM disagrees with the commenters' analysis and rejects the view
that OSM's historic interpretation of the Act requires that owners or
controllers be entitled to permits conditioned upon the appeals of
ownership or control links, the status of the violation, or the
existence of the violation at the time that it was cited.
OSM's regulation at 30 CFR 773.15(b)(2) does not constitute the
agency's recognition that all appeals form the basis for conditional
permits. Such a blanket interpretation would negate the clear mandate
of the provisions of section 510(c) of the Act and of 30 CFR
773.15(b)(1) which require the denial of permits to applicants who own
or control surface coal mining operations in current violation of the
Act. As has been discussed previously in this preamble, the issuance of
permits conditioned upon the appeal of ownership or control links
thwarts the effective implementation of section 510(c) of the Act. OSM
has never interpreted its regulations to allow for such a result.
Contrary to commenters' assertions, the regulation at 30 CFR
773.15(b)(2) only allows a limited exception for good faith, direct
administrative or judicial appeals contesting the validity of the
violation as the basis for conditional issuance. An appeal of an
ownership or control link which tests a person's relationship to a
violator or to a violation does not test the validity of the underlying
violation. To the extent that the provisions of a State program allow
for conditional issuance based upon the appeal of an ownership or
control link, those provisions must be considered less effective than
comparable Federal provisions. See 30 CFR parts 730 and 732.
Moreover, in many instances, the existence of ownership or control
links in AVS may be readily discovered by the presumed controllers, and
the accuracy of those links administratively challenged prior to the
actual denial of a permit by a regulatory authority. An appeal
challenging the current status of a violation does not constitute a
direct challenge to the validity of the violation at the time that it
was cited. Instead, it would test whether the violation is currently
abated or not.
An appeal as to the existence of the violation at the time it was
cited could constitute a challenge as to the validity of the violation.
Nevertheless, there is nothing in the Act or OSM's regulations which
requires that such an appeal, undertaken by an owner or controller of a
violator after standard appeal times have run, be the basis for
conditional issuance. Conditional issuance is particularly
inappropriate when the controller's ability to compel the controlled
entity to act is taken into account. A controller has the capacity to
force the controlled entity to abate or to appeal and would have had
such rights at the time that the violation was cited. Thus, a timely
appeal of the violation, directly made through administrative or
judicial tribunals, could have been made at that time.
One commenter argued that due process protection in the proposed
rules should be enhanced. In substance, this commenter asserted that it
is unfair to deny permits to applicants or to subject active permits to
treatment as improvidently issued permits where the applicants or
permittees are subjectively unaware of their ownership or control links
to violators or of the import of such relationships. Accordingly, this
commenter proposed that such persons should have extended opportunities
for ``corrections and questions'' without the risk of permit denial or
revocation.
OSM appreciates the commenter's suggestion, but does not believe
that further proposed rules are needed or that amendments to the final
rules should be made to reflect the commenter's proposal. The AVS
Office will work with anyone at any time, including when there is no
pending permitting action, to answer questions and make appropriate
corrections to ownership and control information in the database. Data
in the system is available on-line to any interested party, and the AVS
Office will provide print-outs of AVS data on request. The AVS Office
will also provide training to interested parties on the use of the
system. The AVS Office routinely works with major companies to insure
that their ownership and control information in the system is kept
current. Given all these factors, there is no ``risk of permit denial''
necessarily involved in the resolution of an ownership and control
link.
Furthermore, applicants and permittees are deemed to be aware of
the law. The ownership and control rules were published in October,
1988. Since that time, applicants and permittees could reasonably be
expected to be aware of the regulations and could have acted to cure
any outstanding violations or to resolve any erroneous links in the AVS
which would form the basis for a permit denial or revocation. Thus, any
``unfair surprise'' to applicants or permittees posited by the
commenter is not an actual problem. Accordingly, it is entirely
legitimate to deny permits to such applicants or permittees when they
are linked to violations.
Further, permit applicants are required to provide full ownership
and control information at the time of permit application. See 30 CFR
778.13; 778.14. Permittees are required to update relevant ownership
and control information in a timely manner. See 30 CFR 774.17. Thus,
the proposed remedy offered by the commenter is already a requirement
of the rules. Finally, in the unlikely event that a person has been
unfairly subjected to permit denial by the process, that person could
still seek temporary relief from OHA in accordance with procedures
governing such relief provided by OHA's and OSM's regulations.
Primacy
Industry and State commenters asserted a number of concerns
relating to the impact of the proposed rules upon the primacy of
States.
In general, industry commenters argued that the proposed rules and
the AVS itself impermissibly substitute Federal authority for State
authority in the permitting process. They argued that, under the
principle of State primacy, once a State's program has been approved by
OSM, the State should have sole authority for making decisions with
respect to permit issuance, including the determination of ownership
and control matters. They asserted that requiring a State to query the
AVS before making a permitting decision takes the decision out of the
hands of the State and transfers substantive control of the decision to
OSM which controls the content of the AVS. As evidence of this Federal
control, industry commenters cited, with disapproval, provisions of the
proposed rules which provide that challenges of ownership and control
information on the AVS must be made to OSM.
OSM disagrees. First, in the cases of National Wildlife Federation
v. Lujan, No. 88-3117 (D.D.C.), and Save Our Cumberland Mountains, Inc.
v. Lujan, No. 81-2134 (D.D.C.), coal industry interests advanced
similar primacy arguments attacking the agency's ownership and control
rules published in 1988. OSM responded to those arguments in detail
demonstrating that the ownership and control rules support State
programs, rather than undermine them. Copies of these briefs are being
placed in the Administrative Record of this rulemaking. OSM
incorporates the arguments advanced by the Department in those briefs
herein by reference.
Similarly, the purpose of AVS is to assist, rather than to
undermine, the States in the exercise of their primary authority for
the implementation of their approved programs. The provisions of
section 510(c) of the Act require that the regulatory authority deny a
permit to an applicant where ``information available'' to the
regulatory authority indicates that any surface coal mining operation
owned or controlled by the applicant is currently in violation'' of the
Act or certain other governmental laws. See section 510(c) of the Act.
In a State which has an approved program to regulate surface coal
mining operations pursuant to section 503 of the Act, neither OSM nor
AVS decides whether or not to issue a permit to an applicant in that
State. The State regulatory authority is the decisionmaker.
Contrary to the commenter's assertions, however, the Federal
government has an ongoing role in this system of State primacy. The Act
and Federal regulations require that OSM assist the States in the
implementation of their programs under the Act and that OSM provide
oversight of the State regulatory authorities' activities. See sections
102(g), 201(c), 503, 504, 505, and 521 of the Act; 30 CFR parts 732,
733, and 842.
Consistent with the State's role as primary decisionmaker, the AVS
is a tool, developed by the Federal government in concert with the
States, which provides information in a convenient mode, readily
accessible to State regulatory authorities. It is a source of relevant
``information available'' of the type which the State regulatory
authority is required by the Act to consider when the State regulatory
authority decides whether to issue a permit to conduct surface coal
mining operations. Absent AVS, a State regulatory authority would have
to laboriously contact other State regulatory authorities for violation
and ownership and control information or would have to simply reply
upon the voluntary disclosure of information supplied by applicants or
by public-spirited citizens. That OSM has taken the lead in developing
the AVS and in proposing to require to use of AVS through rulemaking is
consistent with the Federal government's role to assist and to oversee
the State regulatory authorities. Even then, the content of AVS is the
product of the efforts of both State regulatory authorities and OSM
working together to incorporate into AVS ownership and control and
violation information developed through their regulatory programs.
Accordingly, a State's authority to make a decision with respect to
a permit application is primary and is unimpaired by anything in the
proposed rules and by the State's use of AVS. To the extent that the
rules support OSM's oversight of the State's decisions, such oversight
is mandated by and consistent with the provisions of the Act and the
regulations cited above.
To the extent that the proposed rules provide that challenges of
information already on AVS be made to OSM, such provisions do not
impair primacy. Instead, the rules recognize that the Federal
government is uniquely situated to maintain the accuracy and integrity
of a nationwide database that will be used by many States. To be sure,
each of the State regulatory authorities has a valuable contribution to
make to the quality of AVS information. Yet, the individual States may
have differing perspectives on ownership and control issues. The
potential for inconsistency is significant--particularly with respect
to ownership and control decisions relating to multistate companies
with complex organizational structures. Also, potential challengers of
such information need, if possible, a single point at which they can
challenge ownership or control information which will be used in many
States and which, absent such a locus, could subject them to
inconsistent outcomes. Such a role for OSM is consistent with the role
for the agency envisioned by SMCRA. See sections 201(c)(9) and
201(c)(12) of SMCRA.
Further, it must be recognized that the decision to deny a permit
because an operator is linked to a violation through ownership or
control can be an unpopular one, subjecting a local economy to stress.
An operator may claim that he ``has been put out of business'' by the
State regulatory authority. This is one area where the Federal
government can assist the States by accepting the responsibility of
maintaining ownership and control information which may ultimately lead
to permit denials in the various States. Federal acceptance of such a
role helps to assure the integrity, consistency, and accuracy of
ownership and control information on the AVS. It is also consistent
with one of the purposes of the Act which is ``to insure that
competition in interstate commerce among sellers of coal produced in
different States will not be used to undermine the ability of the
several States to improve and maintain adequate standards of coal
mining operations within their borders.'' See section 101(g) of the
Act.
Finally, even with the State using information on AVS as part of
its information gathering incident to making a determination with
respect to a permit application, the State retains the authority,
subject to Federal oversight, to decide whether to issue the permit or
not. Appeals of such a decision are made to the appropriate State
reviewing tribunal, in accordance with the provisions of the State
program. Also, the final rules published today make clear that the
State regulatory authority which issues a permit has responsibility,
subject to OSM's oversight, for determining the ownership or control
relationships of the permit. See Sec. 773.25(b)(1)(ii). Contrary to
commenters' assertions, the State's use of AVS does not transmute the
process into a Federal proceeding.
To the extent that a State denies a permit based upon information
in AVS indicating that the applicant is linked through ownership or
control to an outstanding violation of the Act, such denial is made
based upon the mandate of section 510(c) as implemented by the
applicable State program, rather than some extraordinary Federal
intervention in the State's process. A State regulatory authority
denying a permit based upon ownership or control information shown in
AVS would be obligated under the Act to take the same action based upon
a phone call, letter, or other communication from another regulatory
authority advising of an applicant's ownership or control of a surface
coal mining operation in current violation of the Act.
Further, it must be emphasized that the cooperation of all
regulatory authorities, including the States and OSM, is necessary to
facilitate the implementation of section 510(c) of the Act. Information
on violations wherever they have occurred is needed by each regulatory
authority considering a permit application to ensure true compliance
with the provisions of section 510(c) of the Act. It is unreasonable,
ineffective, and inefficient for each regulatory authority to attempt
to develop such information by itself. It is both reasonable and
prudent for OSM to fulfill this role. See sections 201(c)(9) and
201(c)(12) of SMCRA.
Industry commenters further asserted that the proposed rules will
have the effect of ``Balkanizing'' (i.e., dispersing) regulatory
authorities' permitting decisions. They were especially concerned about
the provisions of Sec. 773.26 of the proposed rules which allocated
responsibility to particular regulatory authorities to make decisions
with respect to ownership or control relationships.
Proposed Sec. 773.26 allocated responsibility among the respective
regulatory authorities such that the regulatory authority before which
an application is pending would have had authority for making decisions
with respect to the ownership or control relationships of the
applicant; the regulatory authority that issued a permit would have had
authority for making decisions with respect to the ownership or control
relationships of the permittee; the State regulatory authority that
issued a State violation notice would have had authority for making
decisions with respect to the ownership or control relationships of
persons cited in the violation; and the regulatory authority that
issued a violation notice, whether State or Federal, would have had
authority for making decisions concerning the status of the violation
covered by the notice. The proposed rule provided that these
allocations of authority were subject to OSM's oversight.
In substance, the industry commenters asserted that the provisions
of this proposed section would impermissibly weaken the authority of
the State regulatory authority before whom a permit application is
pending. They asserted that the allocations of authority contained in
the proposed rule would create confusion and delay in the permitting
process.
OSM disagrees with these comments. The interaction between the
Federal government and the States described above does not constitute a
``balkanization'' of the permit application process. Nor will such
interaction lead to confusion in the permit application process. Such
interaction is consistent with the mandate of SMCRA to implement
section 510(c) within a context of State primacy supported by Federal
oversight. The proposed rules and the final rules adopted today attempt
to establish a road map which is consistent with SMCRA for the making
of decisions with respect to ownership or control and for the
development of information to be used in AVS.
First, the allocations of responsibility are consistent with the
requirements of the Act. The provisions of section 510(c) of the Act
mandate a separation of decisionmaking in the permit application
process which commenters might characterize as ``balkanization.'' The
provisions of section 510(c) of the Act are very explicit in stating
that permits shall be denied to applicants who own or control surface
coal mining operations with outstanding violations of the Act ``until
the applicant submits proof that such violation has been corrected or
is in the process of being corrected to the satisfaction of the
regulatory authority, department, or agency which has jurisdiction over
such violation.''
Thus, the Act contemplates that the State regulatory authority
before which an application is pending could require information from
another State regulatory authority with respect to violations issued by
the other State regulatory authority before issuing a permit.
Further, the Act is equally specific in establishing a mandated
role for the Federal government to oversee the States in the
implementation of their State regulatory programs. See sections
201(c)(1); 503; 504; 505; and 521 of the Act. Thus, to the extent that
the proposed rules and the final rules adopted today envision the
exercise of Federal oversight, such a role is responsive to the
provisions of SMCRA.
Moreover, while the proposed rule and the final rule, modified and
renumbered as Sec. 773.25, will be compared and discussed in more
detail below in this preamble, it is appropriate to offer some
responses at this point since these critical comments refer to the
issue of relationships between governments. These comments invoke
issues of State primacy. Contrary to commenters' assertions, the rules
in question allocate responsibility in a manner which is supportive of,
and consistent with, State primacy.
For instance, the final rule provides that a State regulatory
authority which issues a violation has responsibility, subject to OSM
oversight, for identifying the ownership and control relationships of
the violation. See 30 CFR 773.25(b)(1)(iii). The State regulatory
authority which issues a violation has the greatest interest, among
those regulatory authorities with an interest in the ownership and
control relationships of that violation, in seeing that the persons
responsible for the violation abate the violation. Such abatement
directly improves the environmental quality of the State which issues
the violation. Accordingly, the State which issued a violation should
have the first opportunity, subject to Federal oversight, to identify
the owners or controllers of the violation. Well before OSM made its
proposals in September, 1991, which form the basis for today's final
rules, both SMCRA and Federal regulations recognized that a violation
had to be corrected to the satisfaction of the agency that has
jurisdiction over the violation, before a permit could be issued by a
regulatory authority. See section 510(c) of SMCRA; 30 CFR
773.15(b)(1)(i).
Moreover, today's final provisions further recognize the relative
access to ownership and control information that the interested
regulatory authorities have at each stage of the process. The
regulatory authority which issued the violation is in the best position
to investigate and to develop all of the relevant facts about the
violation, including the identification of those responsible for the
violation. The violation was committed within the jurisdiction of the
regulatory authority which issued the violation. That regulatory
authority has access to the actors on the ground at the surface coal
mining operation and would be able to question them to identify
ownership and control information.
A similar analysis can be offered in support of affording the
agency before which an application is pending responsibility for
identifying the ownership and control of the application. This
regulatory authority has the applicant before it and can inquire of the
applicant directly with respect to any ownership and control
information contained in the application. Thus, the regulatory
authority before which an application is pending has responsibility,
subject to Federal oversight, to decide the ownership and control
relationships of the application. See 30 CFR 773.25(b)(1)(i).
A regulatory authority which has issued a permit has ongoing
authority for the permittee's surface coal mining operations on the
permitted site. Thus, this regulatory authority has responsibility,
subject to Federal oversight, to decide the ownership and control
relationships of the permit. See 30 CFR 773.25(b)(1)(ii).
Moreover, OSM recognizes that the industry commenters are deeply
troubled by any use of the AVS in the permit application process and
any application of OSM's ownership or control rules as contained at 30
CFR 773.5 and 773.15(b)(1). Nevertheless, OSM has accepted the mandate
of Congress to develop and implement the AVS because ``the AVS is
essential to effective enforcement of the Surface Mining Control and
Reclamation Act of 1977 [SMCRA].'' See Report of the Senate
Appropriations Committee, Senate Report No. 103-114, at page 47 (July
28, 1993). Thus, the allocation of responsibilities for the various
regulatory authorities contained in the proposed rules and the final
rules adopted today also attempt to reflect the pragmatic realities of
implementing a national computer system.
Once a decision has been made to go forward with a national
computer system to aid the enforcement of section 510(c) of SMCRA,
certain pragmatic realities must be recognized. First, information will
be coming to the computer system from many sources. As each State
regulatory authority analyzes ownership and control information
contained in permit applications and reports such information to AVS,
such information is incorporated into AVS. A national computer system
requires centralized management and maintenance to assure the accuracy
and consistency of information. Centralized management provides a focus
of responsibility when inaccuracies or technical problems are
identified. Accordingly, the Federal government, acting through OSM,
has responsibility for such system management. At the same time, the
States are primary actors in the permit application process and
critically important actors in the development and the support of AVS.
With respect to AVS, the States play a critical role in using the
computer system as an information resource in the permit application
process and in supplying information to AVS gleaned from the permit
application process and other research.
Consistent with the need for centralized management of the
database, OSM has such a role with respect to the AVS and the
information contained therein. As will be discussed below in the
discussion of specific sections of the final rules, one of the changes
made from the September, 1991, proposal was to place language in the
final rule clarifying OSM's plenary role with respect to the content of
ownership or control information in the AVS. See 30 CFR
773.25(b)(3)(i). OSM will also have sole responsibility over the
ownership and control relationships incident to Federal violations. See
30 CFR 773.25(b)(2). Further, OSM will exercise oversight over State
regulatory authorities' activities. See 30 CFR 773.25(b)(3)(ii). This
role provided for OSM under the final rule, consistent with that
proposed under the proposed rule, recognizes that, under the Act, while
the States are subject to Federal oversight, OSM is not subject to the
oversight of State regulatory authorities.
The industry commenters asserted that the proposed rules will
create confusion and conflict among the States with the potential for
conflicting decisions on ownership and control by multiple State
regulatory authorities and OSM. Again, OSM disagrees with the
commenters' characterization of the effect of the rules. As indicated
above, the proposed rules and the final rules clearly allocate
responsibility among the various regulatory agencies. The regulatory
authority before which an application is pending decides whether or not
to issue a permit.
OSM retains the authority to oversee the decision of the State.
Indeed, OSM's role as controller of information already on AVS and as
overseer of State ownership or control decisions will reduce, not
create, confusion and conflict by establishing one final authority to
make decisions in cases where disagreements among States might occur
about information already on AVS.
Accordingly, the rules do not inappropriately disperse
decisionmaking among State and Federal regulatory authorities with
respect to ownership and control. Further, prior to the publication of
these final rules, OSM's AVS Office and the States have worked well
together to implement AVS and the ownership and control regulations
promulgated in 1988. To the extent that there have been disagreements
between OSM's AVS Office and the State regulatory counterparts, such
disagreements have been addressed expeditiously and resolved in a
collegial and cooperative manner.
Some commenters expressed concern that the proposed rules did not
sufficiently address the issues of conflicts between the States and OSM
and between the States themselves on matters of ownership and control.
OSM believes that these issues will be addressed adequately by the
provisions of 30 CFR 773.25. That section is based upon proposed
Sec. 773.26 and establishes the relative responsibilities of agencies
responsible for making ownership and control decisions. As noted
previously, this regulation is discussed in detail below. Within the
framework of State primacy, OSM will exercise its oversight role to
review State ownership or control decisions, in response to citizen
complaints or as otherwise appropriate, to assure the integrity of the
AVS. See 30 CFR 773.12; 842.11; and 843.21.
One commenter asserted, in substance, that the proposed rules did
not go far enough in imposing Federal responsibility. This commenter
proposed that all matters relating to ownership and control under
section 510(c) of the Act should be OSM's responsibility. While OSM
appreciates the commenter's suggestion, OSM must reject this proposal.
As OSM indicated above, the Act establishes a system of State primacy
with Federal oversight and assistance to the States. While it is
understandable that some persons would prefer that the entire
responsibility for permit decisionmaking be shouldered by the Federal
government, such a system would require a significant restructuring of
the statutory framework established by the Act. In contrast to this,
today's final rules address the responsibilities established by section
510(c) of the Act in a manner more consistent with the statutory
framework.
One commenter questioned whether OSM had given adequate
consideration to the implications of the rules upon Federal and State
relations. As the above discussion indicates, OSM has considered, in
detail, the effect of AVS and these rules upon the relationship between
OSM and the State regulatory authorities and believes that the rules
are consistent with the framework for Federal and State relations
established by the Act. Further, as indicated above, the working
relationship between OSM's AVS Office and its State colleagues has been
heretofore very productive and cooperative. OSM believes that State and
Federal cooperation on AVS matters has been, overall, a significant
success. Accordingly, OSM intends to continue to work closely and
cooperatively with State regulatory authorities to resolve issues
related to the implementation of AVS and section 510(c) of the Act.
Citizen Participation
Commenters representing environmental groups criticized the
proposed rules as not containing sufficient provision for citizen
participation. They asserted that citizens should be afforded the
opportunity to add ownership and control links to AVS. They further
argued that citizens should have appeal rights when the regulatory
authority denies their requests to add ownership or control links and
that citizens should have rights of intervention when decisions are
made to sever links. They also urged that citizens should have explicit
rights to request enforcement action with respect to improvidently
issued permits, with respect to other provisions of the rules relating
to ownership and control, and with respect to the imposition of
sanctions.
OSM strongly supports citizen participation and agrees that
opportunities for citizen participation need to be addressed in the
rules governing ownership and control. OSM further agrees that the
proposed rules did not sufficiently address these issues in the
September, 1991, proposal. Under the Administrative Procedure Act,
however, the agency has a responsibility to propose regulations for
public comment, prior to finalizing such regulations. The changes
proposed by commenters would represent significant modifications of the
September, 1991, proposals.
Thus, OSM does not consider it appropriate to incorporate
commenters' proposals into today's final rules without first providing
opportunity for comment to the regulated community, the States, and the
public generally. While OSM could delay finalization of today's rules
to allow for such proposal and for opportunity for comment, OSM does
not believe that the public interest would be served by such delay.
Nevertheless, suggestions made by the commenters are worthy of
further consideration. Accordingly, at some future date, OSM may
present proposals to respond to the concerns expressed by the
commenters. Until such proposals are made, however, the interests of
concerned citizens should be asserted pursuant to the provisions of 30
CFR 773.13, 842.11, 842.12, 843.21 and other regulations providing for
citizen participation, as appropriate. In this respect, if citizens
disagree with a decision of OSM finding that an ownership or control
link does not exist, citizens can challenge such decision by demanding
a Federal inspection of relevant permits affected by such decision in
accordance with the current provisions of 30 CFR 842.12. If OSM rejects
their demand to conduct an inspection, citizens can seek review of such
rejection and the issues related thereto pursuant to 30 CFR 842.15 to
the Director or his designee and, if necessary, to OHA in accordance
with 43 CFR part 4.
Further, OSM's AVS Office will receive and consider ownership or
control information from concerned citizens as part of OSM's ongoing
research activities to incorporate ownership or control and violation
information into the AVS database. Such information is relevant and
will be used by the agency in the making of ownership or control
determinations and for inclusion, upon verification by the agency, into
AVS. OSM strongly encourages concerned citizens, environmental
advocates, and members of the industry to come forward with information
relevant to ownership or control matters. It is in everyone's interest
for the AVS to contain the most complete, comprehensive, and accurate
information possible.
C. Discussion of Final Rules
The following text, which describes the final rules and responds to
the specific public comments that OSM received on the proposed rules,
is organized by the part and section number of the affected provisions.
Grammatical or stylistic changes that do not affect the substance of
the final rules are generally not discussed.
1. Part 701--Permanent Regulatory Program
Section 701.5--Definitions. In the proposed rule, OSM deleted the
definition of ``violation notice'' previously contained in the
regulations and transferred such definition in expanded form to
Sec. 773.5. The final rule is identical to the proposed rule. As
described below, the definition of ``violation notice'' refers to the
types of violations of the Act or other laws which will form the basis
for a regulatory authority to deny a permit application under the
provisions of Sec. 773.15(b).
2. Part 773--Requirements for Permits and Permit Processing
Part 773--The Table of Contents. In the proposed rule, OSM had
included an amendment to the Table of Contents to provide for a
proposed rule governing procedures for the challenge of ownership or
control links prior to entry in AVS. Since OSM has determined not to go
forward with that portion of the proposal, that reference is not
included in the final Table of Contents adopted today. Also, since OSM
has deferred action with respect to the adoption of proposed
Sec. 773.27 to a subsequent rulemaking, that reference has also been
deleted. The final Table of Contents is adopted as described in Summary
of Rules Adopted.
Section 773.5--Definitions. The proposed rule added certain
definitions to Sec. 773.5. Such definitions included the terms
``Applicant/Violator System or AVS,'' ``Federal violation notice,''
``Ownership or control link,'' ``State violation notice,'' and
``Violation notice.'' Such definitions were necessary to an
understanding of the proposed comprehensive regulations relating to the
implementation of AVS.
Industry commenters objected that the proposed definition of
``violation notice'' contained in the regulation was too broad. They
argued that the proposed definition, insofar as it applies to a
``Federal violation notice'' should be explicitly limited to violations
of environmental laws. Further, they asserted that the definition
inappropriately included written communications and demand letters as
``violations.''
OSM disagrees with the commenters' concern over the need for an
explicit limitation for violations of environmental laws in the
definition of a ``Federal violation notice.'' Commenters conceded that
such a limitation is already contained in the proposed definition of
``violation notice.'' The definition of a Federal violation notice is
modified by any limitations contained in the definition of a violation
notice. Accordingly, there is no need for an explicit additional
limitation to address commenters' concerns. It is already clear that it
is limited to violations of environmental laws. Thus, OSM has adopted
the proposed definition of ``Federal violation notice'' as a final
definition without modification.
Further, commenters asserted that the proposed rule inappropriately
expanded the definition of violation notice to include various written
communications and demand letters. They asserted that a demand letter
could somehow preclude a permit applicant from pursuing a good faith
appeal and that a person's ability to challenge the debt would depend
on whether the agency attempted to collect the debt. In substance,
commenters took exception to the prospect of a demand letter being the
basis for a permit denial when the demand letter contains notice of a
delinquent civil penalty and the applicable statute of limitations has
expired precluding further action to collect the debt. They asserted
that the proposed rule impermissibly expands the types of violations
for which a person could be subject to permit block without affording
the person a right of timely challenge.
Again, OSM disagrees with commenters' analysis. First, it must be
emphasized that the type of document is less significant than the
violation of which it provides notice. The document is merely a vehicle
for communicating notice of the substantive violation. The documents
listed in the proposed definition merely recount the possible types of
documents providing notice and do not substantively expand the universe
of violations which would be the basis for permit denial under section
510(c) of the Act and the provisions of 30 CFR 773.15(b). The
substantive violation, rather than the type of document, forms the
basis for a permit denial under the provisions of section 510(c) of the
Act and 30 CFR 773.15(b)(1). Pursuant to those provisions, a regulatory
authority is required to refuse permit issuance where available
information indicates that any surface coal mining operation owned or
controlled by an applicant is currently in violation of the Act or
other indicated laws. Delinquent fees or penalties which have ripened
to the level for which a demand letter is indicated constitute
available information for which an applicant will be held accountable
and which a regulatory authority must take into account in any permit
decision. Contrary to commenters' assertions, the filing of a suit to
collect delinquent reclamation fees or civil penalties is not a
condition precedent to such debts being valid violations or a condition
precedent to such debts being considered the bases for permit denial.
With respect to the commenters' concerns about rights of challenge
incident to demand letters, OSM believes that current quality control
procedures will prevent the entry of unripe violations into the system.
Furthermore, with this final rule and with OHA's rule which is being
contemporaneously published, OSM and OHA have acted to provide a means
for applicants to obtain temporary relief from permit blocks where they
are likely to prevail on the merits. Thus, if a violation has not
actually ripened into the basis for a permit block, temporary relief
could be sought. The discussion of these provisions of the final rule
are contained at the discussion of 30 CFR 773.25 below in this
preamble.
Industry commenters also objected to the prospect that a demand
letter or other notice could contain notice of a delinquent civil
penalty the collection of which is barred by the applicable statute of
limitations. In substance, they argued that such a notice should not be
the basis for a permit denial. OSM disagrees. In 1988, OSM addressed
similar concerns expressed by commenters with respect to the ownership
and control rules. OSM stated, in relevant part, as follows:
Effect of Statute of Limitations on Collection Actions
A commenter asserted that permit blocking cannot occur for any
civil penalty which has not been reduced to judgment within the
applicable statute of limitations in 28 U.S.C. 2462 (barring an
action, suit or proceeding for enforcement of any civil fine,
penalty unless commenced within five years).
OSMRE disagree[s] with the commenter's position. Although the
statute of limitations may provide a defense to suit for collection
of money filed five years following the entry of a final order, it
does not invalidate the final order or cancel the underlying debt,
which will continue to be listed in the Applicant Violator System
and will result in blocking the issuance of a permit.
See Preamble to Requirements for Surface Coal Mining and Reclamation
Permit Approval; Ownership and Control; Final Rule, 53 FR 38868 at page
38884 (October 3, 1988). The agency considers this position to be sound
and has no intention of changing course. Accordingly, this criticism of
the proposed definition is rejected.
A number of commenters representing industry interests asserted
that the definition of violation contained in the rule was overbroad in
that it potentially included violations of laws other than SMCRA as the
basis for permit denial. These commenters proposed that the rule
incorporate explicit limitations to the effect that only violations
relevant to SMCRA or consistent with the environmental protection
standards of SMCRA be the basis for permit denial.
OSM rejects the commenters' proposals as unnecessary. To the extent
that the final definition of ``violation notice'' describes the type of
violation for which the listed types of notice will be provided, the
final rule is intended to track the language of section 510(c) of the
Act. That provision of the Act states that the basis for permit denial
includes violations of the Act ``and any law, rule or regulation of the
United States, or of any department or agency in the United States
pertaining to air or water environmental protection incurred by the
applicant in connection with any surface coal mining operation * * *''
(Emphasis added.)
Commenters' concerns are already addressed by the Act and the
proposed and final definitions of ``violation notice'' which
incorporate the above-emphasized language of the Act. This language
requires that violations which support permit denial must be those
pertaining to air or water environmental protection incurred in
connection with any surface coal mining operation. Any air or water
environmental protection violations incurred in connection with a
surface coal mining operation would be of a type ``relevant to SMCRA.''
If the violations are committed not in connection with a surface coal
mining operation, they would not be a basis for the denial of a permit
under section 510(c) of the Act. Thus, OSM does not believe that a
change in the proposed rule language to reflect commenters' concern is
needed.
A commenter representing certain State regulatory authorities also
criticized the proposed definition of ``violation notice'' as being too
broad and was concerned that such definition, when read with the
provisions of 30 CFR 778.14(c), would lead to ``nationwide gridlock''
or undue delay in State regulatory authorities' processing of permit
applications.
The proposed definition of ``violation notice'' is designed to
incorporate the full range of violations which would form the basis for
permit denial under section 510(c) of SMCRA. The definition is intended
to implement the statutory definition, not expand such definition. A
more limited definition would be an impermissible constraint upon the
broad language of the Act. Accordingly, OSM rejects the view that the
proposed definition is overbroad.
OSM further disagrees with commenter's view that applicants'
reporting of such violation notices in accordance with the provisions
of 30 CFR 778.14(c) will lead to undue delay in the processing of
permit applications. Applicants must supply complete information with
respect to outstanding violations to enable regulatory authorities to
make informed decisions as to permit issuance as mandated by section
510(c) of the Act and 30 CFR 773.15(b)(1). The reporting of such
information by an applicant may, indeed, lead to permit denial. That,
however, constitutes with the mandates of the Act, not inappropriate
delay or stalemate. OSM is confident that OSM and Sate regulatory
authorities can evaluate and use the information provided by applicants
with respect to outstanding violations in accordance with the
definitions of ``violation'' and ``violation notice'' along with
information contained in AVS to meet the requirements of the Act in a
timely fashion.
The same commenter additionally urged that OSM retain the limited
definition of ``violation notice'' previously contained in 30 CFR 701.5
because such definition is more ``realistic'' in its scope and because
there is a need for such a definition across OSM's regulations, not
just those contained in 30 CFR part 773.
Again, OSM disagrees with commenter's views. The definition of
``violation notice'' previously contained in the regulations did not
identify the types of violations of the Act or other laws which would
form the basis for a regulatory authority to deny a permit under 30 CFR
773.15(b)(1). A fuller definition of the term which would encompass
these types of violations as mandated by section 510(c) of the Act was
necessary for incorporation by reference into a proposed amended
version of 30 CFR 773.15(b)(1). While commenter has asserted that there
is a need for a general definition of the term ``violation notice''
across OSM's regulations, commenter has identified no urgent need for a
universal definition of the term that would outweigh the need to
clarify the provisions of 30 CFR part 773. Further, in the event that
it becomes apparent that the implementation of other regulations have
been somehow significantly compromised by the deletion of the general
definition of ``violation notice'' contained in 30 CFR 701.5, OSM can
address these issues as necessary. Accordingly, OSM must reject the
commenter's position.
Further, a commenter urged that any violations be in a final,
unappealable posture before they can be the basis for permit denial.
OSM disagrees with the commenter's characterization of the current
state of the law and with what the commenter believes ought to prevail.
First, Federal regulations which predate the proposed rules and
today's final rules already provide that permits may be conditionally
issued based upon a good faith, direct administrative or judicial
appeal testing the validity of the underlying violation. See 30 CFR
773.15(b)(1)(ii)-(b)(2). Thus, contrary to commenter's implication,
permits are not necessarily denied while violations are under appeal.
The burden, however, is on a violator to assert appeal rights in good
faith and in a timely manner. There is no legitimate reason to afford
additional appeal rights to people who have squandered their
opportunity to appeal. In the absence of a timely appeal, a violation
should be the basis for denial of a permit, in accordance with the
provisions of section 510(c). In this preamble under the topic
captioned ``Due Process,'' OSM has responded in detail to commenters
who have asserted that permits should be conditioned upon the appeals
of ownership or control links or upon the appeals of the existence of
the violation asserted by owners or controllers of violations after
standard appeal times for the violations have run. As stated in this
preamble, OSM rejects these assertions.
To the extent that the commenter implied that permits should be
issued unconditionally during the pendency of an appeal of a violation,
OSM also rejects this proposal. Under this proposal, a violator could
commit a violation at his or her surface coal mining operation; take a
timely appeal; and then be approved unconditionally for permit issuance
at another site. Following the failure of his or her appeal, he or she
could continue to mine on the new site with no interruption or
termination of his or her rights on the new site. This course of events
violates the provisions of section 510(c) of the Act which mandate that
regulatory authorities deny permits when applicants have current
violations of the Act or other laws. Also, the commenter's proposal is
inconsistent with the provisions of 30 CFR 773.15(b)(1)(ii)-(b)(2)
cited above which allow only conditional issuance, rather than
unconditional issuance, for permits issued to applicants who have
appealed outstanding violations.
In that final rule, OSM has adopted the definitions of ``Federal
violation notice'' and ``violation notice'' as proposed and without any
of the changes requested by commenters.
In the proposed rule, the definition of ``ownership or control
link'' included references to ownership or control ``under paragraph
(b)'' of 30 CFR 773.5. Since the publication date of that proposal, OSM
has proposed changes in the definitions of ``owned or controlled'' or
``owns or controls'' contained at 30 CFR 773.5. See Proposed Rule,
Definitions and Procedures for Transfer, Assignment and Sale of Permit
Rights; Definition of Ownership and Control, 58 FR 34652 et seq. (June
28, 1993). If some of those proposed changes are ultimately adopted,
the reference to ownership or control as defined by ``paragraph (b)''
contained in the proposed definition of ``ownership or control link''
would be inappropriate.
Accordingly, to assure flexibility, OSM has deleted the reference
to ``paragraph (b)'' of 30 CFR 773.5 from the final definition of
``ownership or control link.''
Also, the proposed definition of ``ownership or control link''
indicated that a link included presumptive ownership or control
relationships which had not ``been successfully rebutted under the
provisions of Secs. 773.24 and 773.26 or Secs. 773.25 and 773.26 or
under the provisions of part 775 of this chapter and Sec. 773.26 of
this part.'' As is discussed below in this preamble, OSM has deleted
proposed section 773.25, procedures for challenging ownership or
control links prior to entry in AVS and has renumbered proposed
Sec. 773.26 as final Sec. 773.25, standards for challenging ownership
or control links and the status of violations. The final definition of
``ownership or control link'' has been amended to reflect these
changes.
The final rules are adopted containing the provisions described in
this preamble above at Summary of Rules Adopted.
Section 773.10--Information Collection. The proposed rule would
have revised Sec. 773.10 which contained a list of the existing
information collection requirements in part 773 and also the OMB
clearance number indicating OMB approval of the information collection
requirements. The proposed rule revision would have updated Sec. 773.10
by including the proposed AVS-related rules containing information
collection requirements. The proposed revision provided an estimate of
the average public reporting burden per response of three hours,
including the time for reviewing instructions, searching existing data
sources, gathering and maintaining the data needed, and completing and
reviewing the collection of information. The proposed section also
listed the addresses for OSM and the Office of Management and Budget
(OMB) where comments on the information collection requirements may be
sent.
Industry commenters asserted that the estimate of three hours to
prepare an average response for the collection of information required
was unrealistically low.
OSM disagrees with commenters' assertion. The three hours estimated
burden was an estimated average, rather than a predicted figure for the
burden of a single, typical response. The calculation of an ``average''
response means that there are some responses which may require larger
amounts of time to prepare and that there are also some responses which
may require significantly lesser amounts of time. It is entirely
reasonable to expect that the reporting and information collection
burden of these regulations may vary among entities depending upon the
entities' size and structural complexity.
Further, once companies have researched and compiled their
particular ownership or control information, they have done the basic
research which can be used for future compliance. This basic ownership
or control research will then be readily available to the company and
the company only needs to update such research to reflect changes in
ownership or control for future applications. Once entities and
regulatory authorities develop experience in complying with the
regulations, they will also develop experience in collecting, storing,
retrieving, and reporting the necessary compliance information. A
number of large companies have told OSM that they have already
collected and stored their ownership or control information in a
computerized database or are in the process of doing so. Once such
information has been so stored, it would be readily accessible and
easily retrieved for compliance purposes. Thus, the amount of time
required to prepare a typical response under these regulations should
diminish over time.
Nevertheless, in the final rule adopted today, OSM has recalculated
the estimated time for compliance in accordance with standard
procedures required by the OMB. OSM has concluded that the public
reporting burden for the collection of information required by part 773
as amended by these final regulations is four and one half hours per
response, rather than three hours. The final rule also has been
modified to delete specific references to the particular sections of
part 773 which are relevant for information collection purposes.
Instead, OSM has provided a reference to the collection of information
required by 30 CFR part 773, since this part encompasses all sections
of part 773, including the final rules adopted today, which generate an
information collection obligation.
Section 773.15--Review of permit applications. In the proposed
rule. OSM proposed to amend 30 CFR 773.15(b)(1) to refer to relevant
amended definitions and AVS-related rules as the basis for a regulatory
authority's analysis when reviewing a permit application.
The proposed regulation required the regulatory authority to review
all reasonably available information concerning violation notices and
ownership or control links involving the applicant.
Such information would include that obtained pursuant to
Sec. 773.22 (verification of ownership or control application
information); Sec. 773.23 (review of ownership or control and violation
information); amended Sec. 778.13 (identification of interests); and
amended Sec. 778.14 (violation information).
While those regulations will be discussed in detail later in this
preamble, the net effect of referencing such provisions in
Sec. 773.15(b)(1) was to assure that the regulatory authority makes a
decision with respect to permit issuance or denial based upon complete
information relating to ownership, control, and violations. Such
compete information includes the mandated use of AVS.
The proposed rule would have further added a paragraph (b)(4) to 30
CFR 773.15. This provision would have provided that delinquent civil
penalties for violations cited prior to October 3, 1988, not form the
basis for a permit block against persons linked through ownership or
control to such violations, where reclamation had been completed in
accordance with the provisions of the applicable regulatory program and
where, with respect to each cessation order for which a delinquent
civil penalty exists, such persons had paid $750 of the amount of such
penalty to the regulatory authority which issued such cessation order.
In substance, this regulation proposed a ``safe harbor'' with respect
to owners or controllers of delinquent civil penalties cited prior to
October 3, 1988.
In addition, the proposed amendments to 30 CFR 773.15(b)(1) would
also have deleted the presumption contained in the then current version
of that rule that allows a regulatory authority, in evaluating whether
a surface coal mining operation owned or controlled by a permit
applicant is currently in violation of the law, to presume, in the
absence of a failure to abate cessation order (FTACO), that a notice of
violation (NOV) has been or is being corrected, except where evidence
to the contrary is set forth in the permit application, or where the
notice of violation is issued for non-payment of abandoned mine
reclamation fees or civil penalties.
Further, the proposed amendment to 30 CFR 773.15(b)(1) would have
incorporated by reference the amended definition of ``violation
notice'' and the proposed definition of ``ownership or control link''
contained in proposed Sec. 773.5 by requiring a regulatory authority to
review ``all reasonably available information concerning violation
notices and ownership or control links involving the applicant.'' This
proposed change would have eliminated the need for the detailed list
contained in 30 CFR 773.15(b)(1) of the types of violation information
which a regulatory authority must review as part of the application
review process provided by 30 CFR 773.15(b)(1).
The two issues which generated the most significant comments were
the proposed deletion of the presumption of NOV abatement and the
proposed safe harbor for owners or controllers of surface coal mining
operations with delinquent civil penalties for violations issued prior
to October 3, 1988.
The first of these issues to be addressed is the proposed deletion
of the presumption of NOV abatement. Commenters representing a number
of State regulatory authorities strongly objected to the deletion of
the presumption. They asserted that the elimination of the presumption
would lead to ``nationwide gridlock.'' They asserted that such a rule
provision would lead to automatic appeals of all NOV's; that State
regulatory authorities would have to expend significant resources
tracking the course of NOV's and NOV appeals; that companies operating
before multiple State regulatory authorities would never be able to
definitively prove that NOV's were being abated such that they could be
issued permits; and that such efforts would be a significant waste of
State and Federal resources. They asserted that 80%-85% of all NOV's
are resolved and never ripen into CO's in any event.
Also, commenters representing industry interests strongly
criticized the proposed deletion of the NOV presumption as both
impractical and counterproductive. They asserted that the proposed
deletion of the presumption would be especially burdensome on large
multi-state corporations. They questioned whether such entities would
be able to keep track of the abatement status of the NOV's of their
many operating subsidiaries and contract miners. They further asserted
that most NOV's are routinely and timely abated. They argued that
eliminating the NOV presumption would lead to information overload in
the permit application process; to increased costs and delays in permit
processing; and to increased errors in data collection. They argued
that the deletion of the presumption would require the reallocation of
personnel from enforcement to document processing.
In contrast to the positions of State regulatory authorities and
the industry, one commenter representing environmental advocacy groups
supported the deletion of the NOV presumption, asserting that the
deletion of the presumption would lead to better tracking of the status
of violations and to faster remediation of violations. Another
commenter did concede, however, that it would be difficult for the OSM
to keep AVS accurate and current with respect to violation information
if the presumption of NOV abatement in the absence of an FTACO was
eliminated.
OSM considers the arguments raised by the State regulatory
authorities and by the industry to be persuasive. OSM must give
particular consideration to the concerns expressed by the State
regulatory authorities on this issue. These agencies have the
responsibility of implementing the ownership and control process. If
the State regulatory authorities believe that the complete elimination
of the presumption of NOV abatement will impose a significantly
increased burden upon them for limited environmental return, this
position cannot be discounted. OSM recognizes that there may be a
potential benefit in having multiple jurisdictions tracking the course
of NOV's for purposes of permit issuance. Such multiple supervision
could theoretically encourage prompt abatement. Nevertheless, the
mechanics of implementing such a process through AVS and other means
would be sufficiently complex so as to create significant uncertainty
among permit applicants and regulatory authorities. Such uncertainty
outweighs the benefits of the complete elimination of the presumption
of NOV abatement.
In response to the environmentalists' arguments, OSM recognizes
that there is a theoretical, potential benefit in multiple regulatory
authorities tracking the course of an NOV for purposes of permit
issuance. Under this scenario, a State would deny a permit to an
applicant based upon his or her being linked through ownership or
control to an NOV in another State even though the abatement period for
the NOV had not expired. The threat of permit denial could enhance the
prospect for prompt abatement of that NOV.
Nevertheless, the mechanics of implementing this process with
respect to AVS would be complex and would create such uncertainty as to
outweigh the benefits. Assuming that NOV's whose abatement period had
not yet expired and which had not yet generated FTACO's were loaded
onto AVS, OSM would have to check the status of such NOV's and
continually update such information on AVS. It is unclear whether OSM
would be able to keep up with the changing status of NOV's and
incorporate such information in a timely manner into AVS. This would
add an additional element of uncertainty with respect to the currency
of violation information in AVS. OSM believes it is more desirable to
have information in AVS which is both current and reliable, so that
State regulatory authorities may depend on the system during the permit
application review process.
Further, OSM believes that the decision to retain at least a
limited presumption of NOV abatement is consistent with positions taken
by the Department of the Interior in previous litigation. In litigation
relating to Sec. 773.15(b)(1) and related matters before the U.S.
District Court of the District of Columbia, the Secretary advised the
court that he had decided to reconsider the issue of whether, in the
absence of an FTACO, the regulatory authority may presume that an NOV
has been or is being corrected. The Secretary further advised the court
that he would, if appropriate, engage in further rulemaking on the
subject as expeditiously as possible. See National Wildlife Fed'n v.
Lujan, No. 88-3117-AER (D.D.C.), Memorandum of Points and Authorities
in Support of the Federal Defendants' Cross-Motion for Summary Judgment
and in Opposition to Plaintiffs' Motions for Summary Judgment, at pages
89-90.
As indicated in the preamble to the proposed rule, the proposed
amendment to delete the presumption of NOV abatement represented the
``further rulemaking'' of which the court was advised. However, the
Secretary committed only to reconsider the presumption of NOV
abatement. The Secretary never committed to finalize any proposed rule.
After receiving the States' and industry's comments cited above, OSM
has determined that the complete deletion of the presumption would
impose a significant burden upon the States and provide little
enforcement benefit.
As indicated in the preamble to the September, 1991 proposed rule,
it was, in fact, never OSM's intention to load NOV's (other than
delinquent NOV civil penalties) into the AVS database, given the large
volume of data entry that would be required to keep such violation
information up to date. Id. Thus, even if OSM had completely deleted
the presumption of NOV abatement by adopting the proposed modification
to 30 CFR 773.15(b)(1), there would have been no immediate, direct
impact upon the AVS database. If OSM had eliminated the presumption,
there would have been, however, a significant indirect impact upon AVS.
The States would have been required to spend scarce resources tracking
other States' NOV's, including those whose abatement periods had not
yet expired, for permit application purposes. The States would have had
fewer resources available to focus upon the other information that AVS
believes is more critical to the effective implementation of section
510(c) of the Act, including the development of complete information
with respect to entities' ownership and control. Further, OSM is
committed to making its best effort to provide, through the AVS, a
complete list of violations which are required to be used as the basis
for a permit block.
Accordingly, OSM has determined to retain a presumption of NOV
abatement in 30 CFR 773.15(b)(1). The focus of State regulatory
authorities' concern appears to be the uncertainty incident to NOV's
with abatement periods which have not yet expired. In substance, where
an NOV has been issued and the abatement period has not yet expired, it
is uncertain whether the violation will be ultimately abated or will
ripen into the basis for the issuance of a failure to abate cessation
order. The State regulatory authorities and the coal industry argue
that such uncertainty justifies unconditional permit issuance. The
environmentalists argue that such uncertainty demands permit denial.
While OSM recognizes the needs of the State regulatory authorities, OSM
believes that environmental advocates have also asserted legitimate
concerns about the consequences of a blanket presumption of abatement
for all NOV's. OSM has therefore chosen a middle ground which will
serve to reduce the uncertainty while balancing the concerns of the
various interests.
In response to the comments made to its proposal, OSM has amended
30 CFR 773.15(b)(1) to provide that, in the absence of a failure-to-
abate cessation order, a regulatory authority may presume that a notice
of violation is being corrected to the satisfaction of the agency with
jurisdiction over the violation where the abatement period for such
notice of violation has not yet expired and where the permit applicant
has provided certification in his or her permit application that such
violation is in the process of being corrected to the satisfaction of
the agency with jurisdiction over the violation. Where OSM is
regulatory authority, OSM will incorporate such certification into the
statement of verification currently required in OSM's permit
applications. Any permits issued incident to such certification will be
conditionally issued based upon successful completion of the necessary
abatement.
The above approach balances the concerns of the commenters. A
blanket presumption of abatement for all NOV's--including those whose
abatement period has expired--is inappropriate. It is entirely possible
that there are NOV's with expired abatement periods for which cessation
orders have not yet been written. To presume that such NOV's are abated
is unjustified. At the same time, today's final rule recognizes that,
until the abatement period has expired, diligent operators should have
the opportunity to correct their NOV's in a timely manner without being
subjected to permit denial during the period of abatement if they
certify that such violations are in the process of abatement. State
regulatory authorities can conserve limited resources by having the
benefit of a reasonable presumption of NOV abatement which applies to
those NOV's which are in a true state of uncertainty with respect to
abatement. In considering whether a particular NOV should be the basis
for permit denial, State regulatory authorities will also have the
comfort of certification by the applicant and the protection of
conditional issuance to assure that any representations made with
respect to NOV abatement are actually fulfilled.
OSM recognizes that some large companies may not be aware of all
NOV's whose abatement periods have not expired where such NOV's are
cited against one or more of their many subsidiaries. Nevertheless, OSM
expects that companies will make a good faith effort to track their
NOV's and report such NOV's as part of permit applications. Where a
company has developed a good faith NOV tracking procedure and, in the
diligent exercise of such procedure, has inadvertently failed to report
an NOV whose abatement period has not yet expired, such failure would
not constitute willful nondisclosure by the company. On the other hand,
where a company fails to set up a tracking procedure or where a company
sets up a tracking procedure or corporate structure designed or
intended to shield it from knowledge of NOV's or the ability to track
NOV's this will not excuse a company's failure to accurately report
NOV's in permit applications. Further, OSM expects that any
certifications of ongoing correction provided with respect to NOV's be
based upon truthful information and be submitted in good faith. To the
extent that a company asserts that it cannot certify because it is not
certain whether all violations have been identified, the presumption of
NOV abatement would not apply. OSM recognizes that companies may assert
this argument, but OSM considers the certification necessary to assure
that violations are in the process of being corrected.
As indicated above, the second issue in the proposed rule which
generated significant comments was the proposed safe harbor for the
owners or controllers of delinquent civil penalties for violations
issued prior to October 3, 1988.
Commenters from the coal industry and the States criticized the
safe harbor proposal because it required, as a condition precedent for
safe harbor treatment, that reclamation be completed within 120 days
after the effective date of the rule. These commenters asserted that
this proposed condition limiting the availability of safe harbor
protection was inadequate and insufficiently flexible. They argued that
the proposal did not take into account the time required to perform
reclamation and the potential for reclamation to be effected by
changing events and environmental conditions.
Moreover, commenters representing the environmental community also
criticized the safe harbor provision. These commenters criticized the
proposed $750 settlement amount as arbitrarily and artificially low.
Commenters representing the State regulatory authorities asserted that
the proposed penalty amount provided insufficient flexibility and that
a State regulatory authority should be able to demand a greater penalty
if the circumstances warrant.
While the industry and the States focused upon the limited window
of time available to perform abatement and the environmentalists and
the States questioned the limited penalty amount, all of these
commenters seemed to share the view, subject to their particular and
differing perspectives, that the proposed safe harbor provision was
artificial and unnecessarily rigid.
Upon consideration of the comments, OSM agrees that the proposal
was unnecessarily rigid and has, therefore, not finalized the safe
harbor proposal. Accordingly, regulatory authorities will have the
discretion to review the totality of the facts on a case by case basis
to determine whether a person who is linked, through ownership or
control, to delinquent civil penalties may avoid permit block through
payment of a portion of such penalties. OSM will review the adequacy of
such settlements within the context of OSM's routine oversight of the
State regulatory authorities under 30 CFR parts 732 and 733 and of case
specific complaints and investigations under 30 CFR part 842.
Whether a settlement is adequate will be a function of the entire
context of a particular case. Factors to be considered include, but are
not limited to, whether the settling owner or controller has performed
required reclamation to abate the violations other than the delinquent
civil penalties in a timely manner. The regulatory authority should
also consider the degree to which the facts indicate that the owner or
controller had the authority to exercise control of the violator. If
the owner or controller had such authority, whether it chose to
exercise such authority or not, it is less credible for the owner or
controller to argue that it was unaware of the activities and
violations such that a significant discount in civil penalty amount is
warranted for the owner or controller. In substance, with such
authority, the owner or controller would have had the ability to be
informed of violations in a timely manner if he or she had wanted to be
so informed. The regulatory authority should also consider the size and
solvency of the owner or controller and the impact that the payment of
a reduced amount of the civil penalty will have upon the activities of
that company and other companies similarly situated. Further, the
regulatory authority should consider the impact of the settlement upon
the integrity of the regulatory authority's enforcement program. In
other words, will the proposed settlement encourage companies to
conclude that there is an economic benefit in ignoring the civil
penalties and violations of their owned or controlled entities until
such companies are required to settle by regulatory authorities?
In accordance with the above discussion, OSM has not adopted the
provisions of the proposed rule which would have deleted the
presumption that NOV abatement currently contained in 30 CFR
773.15(b)(1) and which would have created a safe harbor for owners or
controllers with respect to delinquent civil penalties for violations
cited prior to October 3, 1988. In paragraph (b)(1) of the final rule,
OSM has inserted language providing for a presumption of NOV abatement
for NOV's whose abatement periods have not yet expired where the permit
applicants have certified that such NOV's are in the process of being
corrected to the satisfaction of the agency with jurisdiction over the
violation. In the final rule, OSM has also deleted the language
contained in the proposed rule which would have provided the safe
harbor for certain owners or controllers. OSM has otherwise adopted the
provisions of the proposed rule as the final rule.
Section 773.20--Improvidently Issued Permits: General Procedures.
In the proposed rule, OSM proposed to amend paragraph (b)(1)(ii) of 30
CFR 773.20 to delete the reference to the presumption of NOV abatement
contained in 30 CFR 773.15(b)(1). See Proposed Rule, Use of the
Applicant/Violator Computer System in Surface Coal Mining and
Reclamation Permit Approval, 56 FR 45780, 45784-45785 (September 6,
1991). The basis for such deletion was to assure consistency with the
provisions of 30 CFR 773.15(b)(1) which were to be similarly amended.
In the final rule, OSM has reinserted language which addresses the
situation which occurs when a permit is issued in reliance upon the
presumption that an NOV is being abated in the absence of a cessation
order and a cessation order is, in fact, issued with respect to the
violation. In such an event, a regulatory authority is required to find
that the permit has been improvidently issued. The September, 1991,
proposed rule deleted this language to assure consistency with OSM's
proposal to delete the presumption of NOV abatement from the permit
review process of 30 CFR 773.15(b). As described in this preamble in
the discussion relating to 30 CFR 773.15(b), OSM has decided to include
a presumption of NOV abatement for that regulation. To assure
consistency between the treatment of improvidently issued permits and
permit applications, OSM has reinserted language which addresses the
presumption of NOV abatement into 30 CFR 773.20(b)(1)(i)(B). The
agency's reasons for retaining a presumption of NOV abatement are
described fully in the preamble discussion with respect to 30 CFR
773.15(b)(1).
In the proposed rule, OSM also proposed to renumber certain
provisions of the then current 30 CFR 773.20 such that paragraph (b)(2)
would become (b)(1)(ii), paragraph (b)(2)(i) would become
(b)(1)(ii)(A), paragraph (b)(2)(ii) would become (b)(1)(ii)(B), and
paragraph (b)(3) would become (b)(1)(iii). In the final rule, such
renumbering is also adopted.
OSM also proposed to amend the then current 30 CFR 773.20 by
inserting a new paragraph (b)(2), which would have made the provisions
of proposed Sec. 773.26, standards for challenging ownership or control
links and the status of violations, applicable when a regulatory
authority makes determinations with respect to improvidently issued
permits. Proposed Sec. 773.26 would have been applicable when a
regulatory authority determines whether a violation, penalty, or fee
remains unabated or delinquent, has been corrected, is in the process
of being corrected, or is the subject of a good faith appeal, and
whether any ownership or control link between the permittee and the
person responsible for the violation, penalty, or fee existed, still
exists, or has been severed.
The proposed insertion of the language referring to Sec. 773.26
would have had the effect of assuring that the standards,
responsibilities, and procedures created by proposed Sec. 773.26 were
consistently applied to permit issuance and to determinations regarding
improvident permit issuance. OSM took such an approach in the belief
that this would enhance the fairness of the permitting process and the
prospect for the uniform enforcement of nationwide minimum standards.
In the final rule, this approach is adopted. The reference to
Sec. 773.26 is changed, however, to Sec. 773.25 to reflect the
renumbering of that section. Also, as has been indicated previously,
OSM has inserted language in paragraph (b)(2) of final Sec. 773.20 to
clarify that a challenge as to the existence of a violation at the time
it was cited may be made within the context of the improvident permit
issuance process.
OSM further proposed to renumber provisions of the regulation at 30
CFR 773.20(c), which relate to remedial measures for improvidently
issued permits, so that then current paragraph (c) would become (c)(1),
then current paragraph (c)(1) would become (c)(1)(i), then current
paragraph (c)(2) would become (c)(1)(ii), then current paragraph (c)(3)
would become (c)(1)(iii), and then current paragraph (c)(4) would
become (c)(1)(iv). In the final rule, such renumbering is adopted.
Further, proposed renumbered paragraph (c)(1)(iv), which would
authorize the regulatory authority to use rescission as one of the
remedial measures for improvident permit issuance, would have deleted a
specific reference contained in the former 30 CFR 773.20(c)(4) to the
rescission procedures of 30 CFR 773.21.
The reason for such proposed deletion was that OSM sought to
establish a prior notice and common appeal procedure for both permit
suspensions and permit rescissions with respect to improvidently issued
permits. The then current regulation governing permit suspensions at 30
CFR 773.20(c)(3) did not impose any specific requirements for prior
notice, opportunity to be heard, or right of appeal for the permittee
whose permit is to be suspended. See 54 FR 18450 (1989). In contrast to
this, then current regulations governing permit rescissions at 30 CFR
773.21 contained specific requirements for prior notice to a permittee
and an explicit right of appeal. Accordingly, through its proposed
rule, OSM sought to provide for greater consistency in its procedures
governing suspension and rescission of permits. In the final rule, the
proposed change has been adopted.
OSM further proposed to amend 30 CFR 773.20 to add a new paragraph
(c)(2) which would have required that a regulatory authority which
decides to suspend a permit must provide at least 30 days' prior
written notice to the permittee. The proposed rule would have provided
that, in the event that the regulatory authority decides to rescind a
permit, it would provide notice in accordance with the provisions of 30
CFR 773.21. The proposed amendment further provided that a permittee
would be given the opportunity to request administrative review of the
notice under proposed OHA rules 43 CFR 4.1370 et seq., where OSM is the
regulatory authority, or under the State program equivalent, where the
State is the regulatory authority. In the absence of such temporary
relief, the regulatory authority's decision would have remained in
effect during the pendency of appeal.
OSM's proposed rule amendments made no change in the requirement
contained at 30 CFR 773.20(b) that a regulatory authority analyze a
potentially improvidently issued permit ``[U]nder the violations review
criteria of the regulatory program at the time that the permit was
issued.''
A commenter representing one of the State regulatory authorities
criticized the provisions of the proposed rule which would have
required that the regulatory authority provide thirty days' written
notice to the permittee, if the regulatory authority decides to suspend
the permit. This commenter asserted that there may be circumstances
which require the immediate suspension and, possibly, outright
rescission of a permit. This commenter asserted that delay, in the
interests of due process rights, may not serve the public interest.
OSM appreciates the commenter's concerns. It is entirely
conceivable that a permittee could have been issued a permit even
though the permittee was linked, through ownership or control, to a
string of unabated violations at the time of permit issuance. The
permittee could have willfully and fraudulently concealed such links
through some clever scheme or artifice at the time of permit
application. While AVS has reduced the potential for such a scenario to
occur, it remains possible. Such a permit ought to be subject to
immediate suspension.
Nevertheless, OSM must weigh the public interest in preventing
violators from keeping permits against the public interest in assuring
that permittees' due process rights are protected. The remedies of
permit suspension and rescission are serious. Unlike an applicant who
merely has an expectancy in his application to receive a permit to
mine, a permittee has, in fact and as a matter of law, assumed the
rights and responsibilities incident to the permit to engage in surface
coal mining operations. Indeed, OSM's regulations provide that a valid
permit carries with it the right of successive renewal. See 30 CFR
774.15(a). Thus, a permittee has an interest which is deserving of a
higher level of protection than the interest of an applicant.
Further, the provisions of 30 CFR 773.21 previously provided for
notice to the permittee only prior to a proposed permit suspension and
rescission. Thus, a permittee got prior notice of a suspension only if
the suspension was the precursor to a subsequent rescission. If the
regulatory authority did not intend the suspension of a permit to be
followed by the permit's rescission, there was no requirement for prior
notice. Also, the provisions of 30 CFR 773.21 provided appeal rights
for a notice of suspension and rescission. There were no similar appeal
rights in 30 CFR 773.20 with respect to suspension. In substance,
permit suspension had the potential of being a harsher punishment than
permit rescission by reason of these procedural differences. These were
anomalies that OSM wanted to correct.
Accordingly, the final version of 30 CFR 773.20(c)(2) provides for
notice prior to permit suspension; for administrative review of the
notice of suspension under 43 CFR 4.1370 et seq. or under the State
program equivalent; for a common appeal procedure for both permit
suspensions and permit rescissions with respect to improvidently issued
permits and for the regulatory authority's decision to remain in effect
during the pendency of an appeal, unless temporary relief has been
granted in accordance with 43 CFR 4.1376 or the State program
equivalent. States can be more stringent with respect to providing less
prior notice, but they are responsible for the legal consequences of
such actions.
Industry commenters objected to OSM's assertion of any role in
revoking or setting aside improvidently issued permits based upon the
totality of their objections to the AVS, the ownership and control
rules, and the proposed rules. These reasons included the proposed
rules' alleged deficiencies with respect to due process, State primacy,
dispersion of authority for permit decisionmaking, and all other
objections asserted by industry commenters.
OSM disagrees with the commenters' views, including their view that
OSM has no legitimate role in the improvidently issued permit process.
OSM has an essential role to play, both as a regulatory authority and
as an agency of the Federal government overseeing the States' programs.
OSM incorporates by reference its previous responses to industry
commenters in this preamble which address the commenters' concerns.
Further, in the preamble to the rules governing improvidently issued
permits, OSM has explained the legal basis for the improvidently issued
permit rules and the rationale for OSM's role with respect to the
implementation of such rules in relation to the States. See Preamble to
30 CFR 773.20, 773.21, and 843.21; Final Rule, 54 FR 18438 et seq.,
especially see pages 18458-18461 (April 28, 1989). OSM also
incorporates these explanations by reference.
Environmentalist commenters criticized the portions of 30 CFR
773.20 which provide that the test for evaluating whether a permit was
improvidently issued is ``the violations review criteria of the
regulatory program at the time the permit was issued.'' See 30 CFR
773.20(b). These commenters asserted that OSM should clearly spell out
the violations review criteria, rather than rely upon the individual
regulatory programs' criteria at the time of permit issuance as the
applicable standards. These commenters criticized the provisions of
OSM's regulations as being contrary to the Act and cited in support
portions of their brief filed in the case of National Wildlife
Federation v. Lujan, No. 88-3117 (D.D.C.).
OSM disagrees with the commenters' position. As indicated above,
OSM's proposed rule did not propose substantive changes to this
provision of the regulation. In the preamble to the improvidently
issued permit rules cited above, OSM explained its rationale for using
the violations review criteria of the regulatory program at the time
the permit was issued as the standard for improvident issuance. See
Preamble to 30 CFR 773.20, 773.21, and 843.21; Final Rule, 54 FR 18438,
18440-18441 (April 28, 1989).
Further, in the case of National Wildlife Federation v. Lujan, No.
88-3117 (D.D.C.), and Save Our Cumberland Mountains, Inc. v. Lujan, No.
81-2134 (D.D.C.), environmental advocates advanced similar arguments
with respect to the agency's improvidently issued permit rules and the
provisions of the rules applying the violations review criteria of the
regulatory program at the time of permit issuance. In the briefs
submitted by the Department of the Interior in those cases, the
Department analyzed relevant statutory language and legislative history
and carefully explained why the environmental advocates' criticisms
were not well taken. Copies of these briefs are being placed in the
Administrative Record of this rulemaking. OSM incorporates the
arguments advanced by the Department in those briefs herein by
reference.
Environmental commenters also criticized other portions of 30 CFR
773.20 for which OSM did not propose any substantive amendments as part
of the September, 1991, proposed rules. The commenters asserted that
OSM should clarify that the remedial measures available to a regulatory
authority to cure an improvidently issued permit require that the
regulatory authority impose both an abatement plan and a permit
condition incorporating such plan before an improvidently issued permit
is considered resolved. They asserted that the provisions of 30 CFR
773.20(c) inappropriately allow the regulatory authority to choose
whether to require a permit condition or an abatement plan.
OSM disagrees with the commenters that a rule amendment is needed.
The provisions of the regulation require that the regulatory authority
``use one or more'' of the listed remedial measures including requiring
the implementation of an abatement agreement; conditioning the permit
upon abatement of outstanding violations within a reasonable period of
time; suspension of the permit; or rescission of the permit. This
provision affords the regulatory authority the opportunity to exercise
discretion, in light of the circumstances, to make a reasoned choice as
to the appropriate remedy. In the preamble to the improvidently issued
permit rule, OSM stated, in relevant part, as follows:
This section * * * includes four alternative remedial measures
because of the diversity of circumstances under which a regulatory
authority might find that a permit was improvidently issued, and the
resulting need to apply a remedy that not only is administratively
appropriate, but also is fair and equitable to the permittee * * *.
OSMRE believes that the term [``improvidently issued''] reflects
the severity of the problem involved when a regulatory authority
should not have issued a permit, while at the same time not
foreclosing reasonable flexibility in the adoption of appropriate
remedial measures * * *.
[T]he rule affords the regulatory authority reasonable
discretion to consider the circumstances involving a particular
improvidently issued permit and to fashion an appropriate remedy * *
*.
Although the rule does not require a regulatory authority to use
any particular one of the four remedial measures, OSMRE intends that
the measure or measures used will be commensurate with the
circumstances under which a permit was improvidently issued.
(Emphasis added.) See 54 FR 18438, 18447-18448 (April 28, 1989).
Certainly, it could be reasonable, depending upon particular
circumstances, for a regulatory authority to require both a plan of
abatement and a permit condition implementing such plan. The agency has
previously rejected the view, however, that there is only one correct
option or options from the alternative remedies provided in the
improvidently issued permit rule which is or are appropriate for all
circumstances. Id. The provisions of the regulation afford the
regulatory authority the opportunity to tailor a remedy ``package''
appropriate for the particular circumstances under which a permit was
improvidently issued. The goals of any such remedy are ``to correct the
defect in the permit and achieve a state of compliance.'' Id., at
18447. If either a permit condition or an abatement agreement could
reasonably be expected to accomplish these goals under the
circumstances, then either would be sufficient to resolve the
improvidently issued permit. In the event that it becomes apparent that
selected remedial measures are not effective, each of the remedies
affords leverage to the regulatory authority to compel compliance. Such
choices are appropriately made by the regulatory authority, subject to
OSM's oversight under 30 CFR 843.21. At this time, OSM sees no reason
to amend the regulation to routinely require the use of both remedies
in all circumstances where abatement of a violation is to be undertaken
as a necessary part of the resolution of an improvidently issued
permit.
Section 773.21--Improvidently issued permits: Rescission
procedures. In the proposed rule, OSM proposed to amend the then
current regulation at 30 CFR 773.21(a) to make the provisions of
proposed Sec. 773.26, standards for challenging ownership or control
links and the status of violations, applicable when a regulatory
authority invokes the automatic suspension and rescission procedures of
30 CFR 773.21. The rationale for such amendment is the same as that
discussed above with respect to similar language contained in
Sec. 773.20. In substance, that was to assure that the standards,
responsibilities, and procedures created by proposed Sec. 773.26 were
consistently applied to permit issuance and to determinations regarding
improvident permit issuance. OSM proposed such an approach in the
belief that this would enhance the fairness of the permitting process
and the prospect for the uniform enforcement of nationwide minimum
standards.
Further, OSM proposed to delete paragraph (c) of then current 30
CFR 773.21 which provided for appeals of rescission notices. Under the
proposal, rescission appeal procedures were to be incorporated in 30
CFR 773.20.
One commenter representing a State regulatory authority asserted
that the States typically have provisions for the administrative review
of a regulatory authority's decision to suspend or rescind a permit.
Accordingly, this commenter questioned why OSM's proposed rules needed
to include provisions for the appeals of permit rescissions due to
improvidently issued permits.
The rationale for providing appeal procedures for permit
rescissions incident to improvidently issued permits is essentially the
same as the rationale for providing appeal procedures for permit
suspensions. In substance, a permittee has, in fact and as a matter of
law, assumed the rights and responsibilities incident to the permit to
engage in surface coal mining operations. Indeed, OSM's regulation
provides that a valid permit carries with it the right of successive
renewal. See 30 CFR 774.15(a). Thus, a permittee has an interest which
is deserving of protection. Thus, a permittee whose permit has been
rescinded is entitled to a review of the decision to rescind.
Prior to the proposed amendment of September, 1991, then current 30
CFR 773.21 provided notice and appeal rights with respect to permit
rescission incident to improvidently issued permits. By proposing to
amend this rule to achieve a common set of procedural protections for
permit suspensions and permit rescissions incident to improvidently
issued permits, it was not OSM's intention to reduce the appellate
rights previously provided by 30 CFR 773.21 or comparable State
provisions. Instead, OSM wanted to assure that procedures of review
were available for both permit suspensions and permit rescissions. The
absence of such procedures for suspensions was a matter which OSM
sought to address.
To the extent that State programs already have adequate appeals and
notice procedures with respect to permit rescissions incident to
improvidently issued permits, OSM believes that the proposed rules
should impose little, if any, additional burden upon such States. Under
the Act, OSM's responsibility is to establish minimum national
standards which approved State programs are required to meet.
Accordingly, individual State programs may exceed OSM's standards. A
State which has such provisions may respond to any 732 letters OSM
sends as a result of this rule by affirming that the State already
interprets its program consistent with this Federal provision.
For the above reasons, the commenter's position is rejected.
OSM has decided to adopt the proposed changes as part of the final
rules. In adopting the proposal, OSM has modified the provisions at
paragraph (a) of 30 CFR 773.21 to make the provisions of Sec. 773.25,
standards for challenging ownership or control links and the status of
violation, applicable when a regulatory authority invokes the automatic
suspension and rescission procedures of 30 CFR 773.21. The proposed
rule contained a reference to Sec. 773.26. This change reflects that
proposed Sec. 773.26 has been renumbered as final Sec. 773.25. OSM has
made an additional non-substantive change to the introductory paragraph
of Sec. 773.21 to reflect that Sec. 773.20(c)(4) has been renumbered to
be Sec. 773.20(c)(1)(iv). Further, OSM deletes former paragraph (c) of
30 CFR 773.21 which provides for appeals of rescission notices. As
discussed above, rescission appeal procedures are incorporated in 30
CFR 773.20.
Section 773.22--Verification of ownership or control application
information. OSM proposed Sec. 773.22 to mandate an inquiry whose focus
was to assure that the regulatory authority develops complete and
accurate information as to the identification of the applicant and all
owners or controllers of the applicant prior to making a determination
on a permit application. Accordingly, the proposed section focused on
verification of ownership or control application information. Such
accurate and complete information would enable the regulatory authority
to make an informed decision as to whether the applicant was linked to
a surface coal mining and reclamation operation in violation of the Act
or of any other environmental laws within the terms of 30 CFR
773.15(b)(1).
Paragraph (a) of proposed Sec. 773.22 would have imposed a duty
upon a regulatory authority to review the information provided in the
permit application, pursuant to 30 CFR 778.13(c) and 778.13(d), to
determine whether the information provided, including the
identification of the operator and all owners and controllers of the
operator, was complete and accurate. In making such determination, the
regulatory authority would have been required to compare information
provided in the application with information contained in manual and
automated data sources. Manual sources for review would have included
the regulatory authority's own enforcement and inspection records and
State corporation commission or tax records, to the extent they contain
information concerning ownership or control links. Automated data
sources would have included the regulatory authority's own computer
systems, if any, and the AVS.
Paragraph (b) of proposed Sec. 773.22 would have provided that, if
it appeared from information provided in the application pursuant to
paragraphs (c) and (d) of Sec. 778.13 that none of the persons
identified in the application had had any previous mining experience,
the regulatory authority would have been required to inquire of the
applicant whether anyone other than those persons identified in the
application would own or control the mining operation as either an
operator or as another type of owner or controller.
The proposed rule assumed that, given the complexity of modern coal
mining operations, it was likely that most applicants would have at
least someone in an ownership or control capacity who had had previous
mining experience. If it appeared from the face of an application that
that was not the case, the regulatory authority would have been
required to contact the applicant to verify that the applicant had not
omitted from the application an operator or other owner or controller
who had such experience. The intent of this proposal was to ensure that
the regulatory authority obtains information on other, experienced
persons who may actually be running the operation and should therefore
have been disclosed as part of the ownership and control data in a
permit application, but were not.
Paragraph (c) of proposed Sec. 773.22 provided that if, after
conducting the information review described above, the regulatory
authority identified any potential omission, inaccuracy, or
inconsistency in the ownership or control information provided in the
application, it would be required to contact the applicant prior to
making a final determination with respect to the application. The
applicant would then be required to resolve the potential omission,
inaccuracy, or inconsistency through submission of an amendment to the
application or a satisfactory explanation which includes credible
information sufficient to demonstrate that no actual omission,
inaccuracy, or inconsistency existed. The regulatory authority was also
required to take action in accordance with the provisions of proposed
Sec. 843.23, sanctions for knowing omissions or inaccuracies in
ownership or control and violation information, or the State program
equivalent, where appropriate.
Paragraph (d) of proposed Sec. 773.22 would have required that,
upon completion of the information review mandated by Sec. 773.22, the
regulatory authority promptly enter all ownership or control
information into AVS.
Industry commenters objected to the provision of the proposed rule
requiring that the regulatory authority compare information provided in
the permit application with sources such as State corporation
commission or tax records. They asserted that such records are
typically updated only on an annual basis and may be obviously
inaccurate. They further asserted that requiring the applicant to
explain discrepancies between information contained in the application
and the State corporation commission or tax records will lead to
inappropriate delays in the permit process.
OSM disagrees with the commenters' criticisms of the proposed
requirement. The proposed requirement was designed to assure that the
regulatory authority reviewing an application has complete ownership
and control information. Such information is necessary to enable the
regulatory authority to determine whether the application should be
issued in accordance with the provisions of section 510(c) of the Act
and 30 CFR 773.15(b)(1).
Unfortunately, a regulatory authority cannot simply rely upon all
applicants to supply complete ownership or control information. Some
applicants may err in good faith, others may conceal information
knowingly. Accordingly, the regulatory authority must look to other
sources of information. The information contained in the records of
State corporation commissions or taxing authorities is a good potential
source of ownership or control information. Depending upon particular
State requirements, such information may have been submitted under
oath. Further, such information is submitted subject to the review of
State corporation commissions and State taxing authorities. Thus, a
State regulatory authority reviewing such information has the benefit
of any efforts made by these other agencies to assure that information
submitted to them is accurate and complete.
Moreover, such information is important because it provides a basis
for inquiry and for comparison with information submitted in the permit
application. If there are discrepancies between the ownership or
control information in such records and that submitted in the permit
application, the applicant should be able to readily explain such
discrepancies. Thus, if any information previously submitted to State
taxing authorities or corporation commission has become subsequently
outdated, this can be explained with minimal inconvenience to an
applicant and minimal delay in the permit application process. On the
other hand, if important ownership or control information has been
omitted from a permit application, the State taxing and corporation
commission records may be the key to identifying such omissions. In any
event, the benefits of such information to the regulatory authority
outweigh the risks identified by the industry commenters.
A commenter representing State regulatory authorities also asserted
that these records rarely provide information not contained in previous
permit applications or in AVS. This commenter also indicated that these
records are difficult to obtain because tax records are not typically
available for review by State agencies other than the taxing
authorities.
OSM disagrees with the view that these types of records merely
contain information which is duplicative of information already
available to the State regulatory authorities through permit
applications or AVS. While OSM makes every effort to assure that AVS
contains complete and accurate information with respect to ownership or
control links, OSM has never asserted that AVS is perfect. Even if AVS
were a perfectly complete source of such information, new corporations
are being formed and new applications to conduct surface coal mining
operations are submitted. AVS must be regularly updated. It is likely
that there is relevant ownership or control information contained in
corporation commission and tax records of the various States which is
not yet reflected on AVS. Thus, there is a need for State regulatory
authorities to review such information and compare such information
with permit applications to identify accurate and complete ownership or
control information. Such information can then be added to the AVS
database.
With respect to commenter's concern about the availability of State
tax and corporation commission records, OSM recognizes that particular
State laws may limit a State regulatory authority's access to such
records. The requirement of the proposed regulation was for the
regulatory authority to review ``reasonably available sources.'' Thus,
if a State law explicitly forbids the regulatory authority's access to
State tax information, the information would not be ``reasonably
available'' for review. In the absence of such explicit prohibition,
however, State regulatory authorities should review such information.
OSM encourages State regulatory authorities to work with their sister
tax and corporation commission agencies to develop information access
arrangements to the extent permissible under applicable laws.
Nevertheless, OSM rejects the view that the difficulty of obtaining the
information justifies withdrawing or amending the proposing regulation.
The commenter representing State regulatory authorities further
questioned the requirement contained in paragraph (c)(2) of proposed
Sec. 773.22 that ``credible information,'' rather that ``credible
evidence,'' support an applicant's satisfactory explanation of
omissions, inaccuracies, or inconsistencies with respect to ownership
or control information in an application. OSM used the term ``credible
information,'' rather than ``credible evidence'' because this is a
broader concept than credible evidence. This term would include
credible evidence which would be admissible at trial. Nevertheless, an
applicant might be able to provide a satisfactory explanation based
upon information which would not necessarily be admissible at trial,
but which is a reliable and believable basis to conclude that no actual
omission, inaccuracy, or inconsistency exists. Accordingly, the
language of the proposed regulation was intended to provide flexibility
to the regulatory authority to consider such information, including
credible evidence.
OSM has determined to adopt the proposed rule at Sec. 773.22 as a
final rule with minor modifications which are now described.
As indicated above, paragraph (b) of the proposed rule would have
required that, if it appeared from information provided in the
application pursuant to paragraphs (c) and (d) of Sec. 778.13, that
none of the persons identified in the application had any previous
mining experience, the regulatory authority had to inquire of the
applicant whether anyone other than those persons identified in the
application would own or control the mining operation as either an
operator or as another type of owner or controller. The final rule
imposes the duty upon the regulatory authority to both inquire of the
applicant and to investigate.
In the proposed rule, there may have been an implication that the
regulatory authority could simply conclude its inquiry in reliance upon
the applicant's explanation. Such an implication was not intended.
Accordingly, OSM has added explicit language to paragraph (b) of final
Sec. 773.22 to insure that, if none of the persons identified in the
permit application has had any previous mining experience, the
regulatory authority will not simply rely upon the applicant's
explanations. Instead, the regulatory authority will go forward to
investigate whether any persons other than those identified in the
application will conduct the mining.
In the final version of Sec. 773.22, OSM has retained language from
paragraph (c) of the proposed Sec. 773.22 requiring the regulatory
authority to take action in accordance with the provisions of
Sec. 843.23 or the State program equivalent. However, OSM has deferred
action on the adoption of proposed Sec. 843.23 for a later rulemaking.
See 58 FR 34652 et seq. (June 28, 1993). The reference to that rule has
been left in final Sec. 773.22 in the event that a final version of
Sec. 843.23 is adopted. The inclusion of such reference, however, does
not prejudge whether OSM will ultimately adopt such a rule.
As indicated above, paragraph (d) of the proposed rule would have
required that, upon completion of the information review mandated by
Sec. 773.22, the regulatory authority promptly enter all ownership or
control information into AVS. OSM has adopted the final version of this
paragraph to require that, upon completion of its review, the
regulatory authority enter ownership or control information ``into''
AVS. If such information is already on the system, the regulatory
authority is required to ``update'' such information. Such changes have
been made to provide better clarity to the rule language.
Section 773.23--Review of Ownership or Control and Violation
Information. OSM proposed Sec. 773.23 as a new section which would
delineate the regulatory authority's review obligations with respect to
a permit application after the regulatory authority had completed the
process of verifying ownership or control application information as
described in Sec. 773.22.
The provisions of paragraph (a) of proposed Sec. 773.23 would have
required the regulatory authority to review all reasonably available
information concerning violation notices and ownership or control links
involving the applicant to determine whether the application could be
approved under the provisions of 30 CFR 773.15(b). With respect to
ownership or control links involving the applicant, such information
would have included all information obtained under 30 CFR 773.22 and
778.13. With respect to violation notices, such information would have
included all information obtained under Sec. 778.14, information
obtained from OSM, including information shown in the AVS, and
information obtained from the regulatory authority's own records
concerning violation notices.
In substance, the proposed regulation was designed to assure that
the regulatory authority considers complete ownership, control, and
violation information in making the decision required by 30 CFR
773.15(b)(1) with respect to a permit application.
The provisions of paragraph (b) of proposed Sec. 773.23 were
proposed to provide the course of action which a regulatory authority
would be required to take if the review conducted pursuant to paragraph
(a) of the section disclosed any ownership or control link between the
applicant and any person cited in a violation notice.
Thus, paragraph (b)(1) of proposed Sec. 773.23 would have required
that the regulatory authority notify the applicant of such link and
refer the applicant to the agency with jurisdiction over the violation
notice.
Paragraph (b)(2) of proposed Sec. 773.23 would have required that
the regulatory authority not approve the permit application unless and
until it determined that all ownership or control links between the
applicant and any person cited in a violation notice were erroneous or
had been rebutted, or the regulatory authority determined that the
violation to which the applicant had been linked had been corrected,
was in the process of being corrected, or was the subject of a good
faith appeal, within the meaning of 30 CFR 773.15(b)(1) or the State
program equivalent. The determinations to be made by the regulatory
authority under paragraph (b)(2) of the proposed regulation were to
have been made in accordance with the provisions of proposed
Sec. 773.24, procedures for challenging ownership or control links
shown in AVS, and proposed Sec. 773.26, standards for challenging
ownership or control links and the status of violations, or their State
program equivalents.
Paragraph (c) of proposed Sec. 773.23 would have required that,
following the regulatory authority's decision on the application or
following the applicant's withdrawal of the application, the regulatory
authority be required to promptly enter all relevant information
related to the decision or withdrawal into AVS. The regulatory
authority's decision could have included unconditional issuance,
conditional issuance, or denial of the permit. The requirement that all
relevant information be promptly entered into AVS was intended to
insure that AVS was continually updated to reflect the most current
information available with respect to permit applicants. A critical
source of such information would be the regulatory authority.
Commenters representing members of the coal industry criticized the
provisions of the proposed regulation as being unnecessarily
duplicative of the provisions of proposed Sec. 773.22 and of 30 CFR
773.15(b). In support of this position, they pointed to the provisions
of the proposed regulation which require the review of violation
information and ownership or control links to determine whether an
application could be approved. They questioned why the requirements of
proposed Secs. 773.22 and 773.23 would be imposed as two separate
stages, rather than as a single stage of the permit application process
under 30 CFR 773.15(b)(1).
OSM disagrees with the view that the provisions of proposed
Secs. 773.22 and 773.23 are duplicative or redundant to each other or
with respect to the provisions of 30 CFR 773.15(b)(1). Further, OSM
does not believe that these provisions should be consolidated with the
provisions of 30 CFR 773.15(b)(1).
While each of the regulatory sections at issue are part of the
permit application and review process, the two proposed Secs. 773.22
and 773.23 represent separate tasks for the regulatory authority. In
implementing the provisions of proposed Sec. 773.22, the regulatory
authority would be focusing upon information contained in the permit
application and attempting to verify such information by comparing it
with other readily available sources of information. The purpose of
such activity is to identify complete and accurate information with
respect to the application, including identification of the person or
persons who will own or control the surface coal mining operation. In
implementing the provisions of proposed Sec. 773.23, the regulatory
authority takes the information gleaned from its research on the
application and then evaluates whether there are any ownership or
control links between the applicant and any person cited in a violation
notice. In this stage, the focus of inquiry is to determine whether the
permit can be approved in accordance with the provisions of 30 CFR
773.15(b).
While both of these stages involve the use of AVS, this does not
mean that such stages are redundant or duplicative. The AVS should be
consulted throughout the permit application process to assure that the
regulatory authority has the most current ownership or control and
violation information available from OSM and other State regulatory
authorities. The AVS is an evolving information system which is
routinely supplemented with new information. The use of AVS in the
earlier stage, proposed Sec. 773.22, provides an information resource
for comparison with application ownership or control information and a
basis for inquiry with the applicant. During the later stage, proposed
Sec. 773.23, the regulatory authority takes previously developed
ownership or control information and compares such information with
outstanding violation information in deciding whether or not to issue
the permit. The use of AVS in this stage enables the regulatory
authority to have the benefit of any information which may have been
subsequently added to AVS by OSM or other State regulatory authorities.
Further, neither of the provisions of proposed sections are
redundant with 30 CFR 773.15(b)(1). The provisions of 30 CFR
773.15(b)(1) do not delineate the means by which a regulatory authority
may comply with the mandates of section 510(c) of the Act or 30 CFR
773.15(b)(1). Proposed Secs. 773.22 and 773.23 fill this need. These
proposed sections provide the specific steps to be taken by a
regulatory authority to achieve compliance with the provisions of 30
CFR 773.15(b)(1).
One industry commenter suggested that all of these provisions
should be consolidated into a single violations review provision. While
this is a reasonable alternative, OSM is convinced that the approach
contained in the proposed rules is a better alternative. The placement
of the required tasks in separate sections of the regulations, with
appropriate cross references, better highlights the particular duties
necessary at each stage of the permit application review process in a
way which is more likely to support compliance. Also, as the above
discussion demonstrates, the tasks are sufficiently separable that they
lend themselves to separate regulatory sections. Such separation,
however, does not mean that there must be unnecessary delays. A
regulatory authority can move forward methodically through each
required task in a timely manner.
A commenter representing State regulatory authorities criticized
the provisions of paragraph (b)(2)(ii) of proposed Sec. 773.23 because
such provision would prohibit the issuance of a permit if there are
outstanding violations. He asserted that these provisions would
significantly increase the burden on applicants, because the provisions
did not incorporate the presumption that an NOV is considered abated
unless an FTACO has been issued.
In this preamble, OSM has already addressed the matter of the
presumption of NOV abatement within the discussion of the amendments to
30 CFR 773.15(b)(1) which have been adopted today. As indicated, OSM
has determined to retain a presumption of NOV abatement where the
abatement period for the NOV has not expired and the applicant has
provided certification that the violation is in the process of being
corrected to the satisfaction of the agency with jurisdiction over the
violation. Since the provisions of proposed Sec. 773.23 incorporate the
provisions of 30 CFR 773.15(b)(1), such presumption would be similarly
applied as part of proposed Sec. 773.23. Thus, the substance of
commenter's concern has been addressed.
Commenters representing environmental advocacy groups urged that
paragraph (a) of proposed Sec. 773.23 be clarified with respect to the
regulatory authority's duty to review the accuracy of ownership or
control information. They pointed out that there are many additional
sources of ownership or control information beyond those listed in the
regulation which a regulatory authority could review. They asserted
that the regulatory authority should be required to review the sources
listed in the regulation, the AVS and the regulatory authority's own
records, at a minimum.
OSM agrees that there are many potential sources of ownership or
control information and that the sources for review listed in the
proposed regulation are those which the regulatory authority should be
required to review, at a minimum. OSM disagrees, however, that the
proposed regulation needs to be further clarified or modified. There is
already language in the proposed regulation which meets the substance
of commenters' concerns. In paragraph (a) of proposed Sec. 773.23, the
regulatory authority is required to ``review all reasonably available
information concerning violation notices and ownership or control links
involving the applicant * * *.'' (Emphasis added.) In addition, the
language makes clear that ``[s]uch information shall include'' the
listed items which follow in paragraphs (a)(1-2) of the proposed
regulation. The clear meaning of this proposed language is that the
listed examples are those sources which the regulatory authority must
review. In addition, the regulatory authority can choose to review
other sources.
Commenters representing environmental advocacy groups also urged
OSM to incorporate standards to demonstrate whether an outstanding
violation has been corrected or is in the process of being corrected to
the satisfaction of the agency with jurisdiction over such violation.
OSM believes that the regulatory authority which issued the violation
can effectively define the status of such violation with additional
standards. This regulatory authority is well positioned to determine
whether the violation which it has issued has been abated or is in the
process of being abated to its satisfaction. A regulatory authority
before which a permit application is pending should consult the
regulatory authority which issued the violation to ascertain the status
of any violation to which an applicant has been linked through
ownership or control.
OSM has determined to adopt the proposed rule as a final rule with
a small modification which is now described. In adopting the proposal,
OSM has modified the provisions of paragraph (b)(2) of section 773.23
to make the provisions of Secs. 773.25, standards for challenging
ownership or control links and the status of violations, along with
those contained in Sec. 773.24, applicable when a regulatory authority
makes a determination whether to approve a permit. The proposed rule
contained a reference to proposed section 773.26. This change reflects
that proposed section 773.26 has been renumbered as final Sec. 773.25.
The rule is otherwise adopted as proposed.
Section 773.24--Procedures for Challenging Ownership or Control
Links Shown in AVS. OSM proposed Sec. 773.24 to establish the
procedures to be followed in the event that the AVS showed an ownership
or control link between a person and any person cited in a violation
notice. The proposed section would have provided procedures for direct
appeals of such links to OSM by persons who had been so linked. The
proposed section would also have provided for challenges concerning the
status of violations to which persons shown on AVS had been linked. The
proposed section would have further provided the opportunity for those
persons making a challenge to have obtained temporary relief from any
adverse use of the challenged link or violation information during the
pendency of such challenge.
Paragraph (a)(1) of proposed Sec. 773.24 would have provided that
an applicant or anyone else shown in AVS in an ownership or control
link to any person cited in a Federal or State violation could have
challenged such a link in accordance with the provisions of paragraphs
(b) through (d) of proposed Sec. 773.24 and in accordance with the
provisions of proposed Sec. 773.26, standards for challenging ownership
or control links and the status of violations. Paragraph (a)(1) of
proposed Sec. 773.24 would have provided, however, that such challenge
would not be available if the challenger was bound by a prior
administrative or judicial decision with respect to the link.
In substance, paragraph (a)(1) of proposed Sec. 773.24 would have
provided that challenges of ownership or control links shown on AVS be
made before OSM. The theory of the proposed regulation was that, once
information with respect to particular ownership or control links has
become part of the AVS and accessible to regulatory authorities across
the country, the responsibility for the maintenance of such information
would be a Federal responsibility. Accordingly, the process for
challenging such information would be a Federal process.
Paragraph (a)(2) of proposed Sec. 773.24 would have provided that
an applicant or anyone else shown in AVS in an ownership or control
link to a person cited in a Federal violation notice would have
challenged the status of such violation in accordance with the
provisions of paragraphs (b) through (d) of proposed Sec. 773.24 and in
accordance with the provisions of proposed Sec. 773.26, standards for
challenging ownership or control links and the status of violations.
The procedures applicable would have been similar to those described in
paragraph (a)(1) of proposed Sec. 773.24.
Paragraph (a)(2) of proposed Sec. 773.24 would have provided, in
language similar to that contained in paragraph (a)(1) of the proposed
regulation, that the opportunity to challenge the status of a violation
would not be available to any person who was bound by a prior
administrative or judicial determination concerning the status of the
violation.
The ``status of the violation'' would have meant whether the
violation remained outstanding, had been corrected, was in the process
of being corrected, or was the subject of a good faith, direct
administrative or judicial appeal to contest the validity of the
violation. See 30 CFR 773.15(b)(1)(i)-(ii). This usage was to have been
carried forward into the provisions of proposed Sec. 773.26, standards
for challenging ownership or control links and the status of
violations. Further, the provisions of proposed Sec. 773.26 would have
limited challenges make to the status of violations under proposed
Sec. 773.24 to prevent challenges of the existence of the violation at
the time that it was cited. Again, the process for challenging the
status of a Federal violation was to have been a Federal process.
Challenges would have been made before OSM.
Paragraph (a)(3) of proposed Sec. 773.24 would have provided that
any applicant or person shown in AVS to have been linked by ownership
or control to a person cited in a State violation notice could
challenge the status of such violation before the State that issued the
violation notice. Such challenge would have to have been made in
accordance with that State's program equivalents to paragraphs (b)
through (d) of proposed Sec. 773.24 and proposed Sec. 773.26. Again,
the provisions of proposed section 773.26 would have been incorporated
under proposed Sec. 773.24 to prevent challenges as to the existence of
the violation at the time that it was cited.
Paragraph (a)(3) of proposed Sec. 773.24 would have provided, in
language similar to that contained in paragraph (a)(2) of the proposed
regulation, that the opportunity to challenge the status of a violation
before a State program would not be available to any person who was
bound by a prior administrative or judicial determination concerning
the status of the violation.
Paragraph (b) of proposed Sec. 773.24 would have required that a
person seeking to challenge ownership or control links shown in AVS or
the status of Federal violations submit to OSM a written explanation of
the basis for his or her challenge and provide relevant evidentiary
materials and supporting documents. The proposed regulation would have
required that such information be submitted to the Chief of OSM's AVS
Office in Washington, DC.
Paragraph (c) of proposed Sec. 773.24 would have required that OSM
make a written determination with respect to the ownership or control
link and/or with respect to the status of the violation. The proposal
required that, if an ownership or control link had been challenged, OSM
would then determine whether the link had been shown to be erroneous or
had been rebutted.
Paragraph (d)(1) of proposed Sec. 773.24 would have provided that,
if OSM had determined that the ownership or control link had been shown
to be erroneous or had been rebutted and/or that the violation covered
by the violation notice had been corrected, appropriately appealed, or
otherwise resolved within the terms of 30 CFR 773.15(b)(1) (i)-(ii),
OSM would be required to have provided notice of its determination to
the permit applicant or other person challenging the link or the status
of the violation. Under the proposed regulation, if an application was
pending, OSM would also have to notify the regulatory authority before
which the application was pending. Further, OSM would have been
required to correct information contained in AVS to reflect the
determination which had been made.
Paragraph (d)(2) of proposed Sec. 773.24 would have provided that,
if OSM had determined that the challenged ownership or control link had
not been shown to be erroneous and had not been rebutted, and that the
violation remained outstanding, OSM would have been required to provide
notice of its determination to the permit applicant or other person
challenging the link or the status of the violation. Under the proposed
regulation, if an application was pending, OSM would have also been
required to notify the regulatory authority before whom the application
was pending. Further, OSM would have been required to update
information contained in AVS, if necessary, to reflect OSM's
determinations.
Paragraph (d)(2)(i) of proposed Sec. 773.24 would have provided
that OSM be required to serve a copy of its decision with respect to a
challenge upon the applicant or other challenger by U.S. certified mail
or by any other means consistent with the rules governing service of a
summons and complaint under Rule 4 of the Federal Rules of Civil
Procedure.
Paragraph (d)(2)(ii) of proposed Sec. 773.24 would have provided
that the applicant or other challenger could have appealed OSM's
decision to the Department of the Interior's Office of Hearings and
Appeals (OHA) within 30 days of such decision in accordance with
proposed OHA regulations at 43 CFR 4.1380 et seq. Paragraph (d)(2)(ii)
would have further provided that OSM's decision remained in effect
unless temporary relief was granted in accordance with OHA regulations
at 43 CFR 4.1386.
Paragraph (d)(2)(ii) of proposed Sec. 773.24 would have further
provided for temporary relief from OSM's decision, if OHA granted such
relief in accordance with proposed OHA regulations at 43 CFR 4.1386.
Under the proposed regulation, OSM's decision would have remained in
effect during the pendency of appeal, unless temporary relief was
granted.
Commenters representing the coal industry took exception to the
provisions of paragraph (a)(2) of the proposed section which would
preclude an applicant or other person from challenging the status of a
violation if he or she was ``bound by a prior administrative or
judicial determination concerning'' the status of the violation. The
commenters asserted that determining whether a person was ``bound'' by
a prior determination was vague and susceptible to conflicting
interpretations. They further asserted that if, by this proposed
language, OSM intended to apply the doctrines of res judicata or
collateral estoppel, there was no need to include such language in the
proposed regulation, since these doctrines would be available as legal
defenses to OSM in any event. The commenters indicated that their
objection to this language also applied to the other portions of the
proposed regulations where similar language imposing such a limit on
challenges was incorporated.
OSM disagrees with the commenters' characterization of the rule
language. The proposed rule language is clear in standing for the
principle that a person is entitled to his or her challenge opportunity
before an administrative or judicial tribunal. Nevertheless, a person
is not entitled to the multiple relitigation of issues which he or she
has already litigated to conclusion. Accordingly, the proposed rule is
explicit in requiring that a person who is bound by a prior
administrative or judicial determination with respect to the status of
a violation may not relitigate such issue. In determining whether a
person is bound by a prior determination, traditional principles of res
judicata and collateral estoppel will apply. Contrary to commenters'
view, however, it is insufficient to assume that such principles will
apply as a matter of law and that there is no need to provide an
explicit limitation in the regulation. Such a limitation is necessary
to eliminate any ambiguity in the regulation with respect to this issue
and to assure that judicial and administrative tribunals are not
clogged with duplicative, repetitive claims by persons who have already
litigated such claims. The limiting language provides a clear statement
of OSM's intent and will be adopted as part of the final rule.
Commenters representing environmental advocacy groups indicated
approval of the provisions of the proposed regulation which would have
limited challenges of the existence of the violation at the time it was
cited. Such commenters did indicate concern, however, that the proposed
regulation did not provide an explicit time limit for OSM to make its
decision with respect to a challenge. They urged that the regulation
incorporate an explicit time limit of 30 days for OSM to make a
decision to avoid undue delay with respect to the permit application
process.
OSM disagrees with the view that the regulation needs to contain an
explicit time limit for the agency to make a decision with respect to
challenges of ownership or control links or the status of violations.
While OSM makes every effort to decide these issues in an expeditious
manner, the review and determination of an ownership or control link
can be a complex endeavor, requiring the review of significant amounts
of complex documentary material. Such a process typically involves a
dialogue involving the exchange of numerous documents and testimony
between the agency and the challenger. Such issues may require
extensive research and investigation by trained specialists. The
imposition of artificial time limits on the process could create a risk
that decisions will be inaccurate and that investigations will be
incomplete.
Further, there is no risk to the environment during the period of
challenge. During the period of challenge, the permit is not issued.
Once a presumption of ownership or control has been established
pursuant to 30 CFR 773.5 and such presumption is shown on AVS, the
burden is upon an applicant to rebut the presumption. The regulatory
authority should not issue the permit until the presumption has been
rebutted. While an expeditious process is encouraged, the regulatory
authority should not be rushed in making such a decision. It should
conduct a thorough investigation and review all of the relevant
evidence presented. Some challenges can be resolved within 30 days.
Other challenges may require six months. Imposing an absolute time
limit disregards the differences that particular cases have with
respect to factual and legal complexity. Accordingly, OSM must reject
the commenters' suggestion that a time limit should be incorporated
into the proposed regulation.
A commenter representing State regulatory authorities criticized
the provisions of proposed Sec. 773.24 which would require that
challenges of ownership or control links shown on AVS be heard before
OSM. In substance, the commenter was concerned that, for such
challenges to be meaningfully addressed, OSM would need copies of
supporting documentation from the States and challengers would be
referred to the States to review various documents with respect to
ownership or control relationships and with respect to violations. The
commenter asserted that the States would have an ``unnecessary burden''
to provide duplicate copies of documents to OSM and other participants.
While OSM appreciates commenter's concern, OSM disagrees that the
process provided in the proposed rule will impose an unnecessary burden
upon the States. Under the proposed regulation, OSM is assuming the
responsibility to entertain challenges to ownership or control
information shown on AVS. In the absence of OSM's assumption of such
responsibility, the States would have to hear such challenges. Further,
regardless of which party assumes responsibility for addressing such
challenges, that party would have to obtain complete documentation from
all other parties which might have relevant records. Thus, each State
would have to provide copies of essential documentation to the
participants and to whichever regulatory authority was reviewing the
case, be it OSM or a specific State, to enable the challenges to be
fairly considered and resolved. It is in the interests of all concerned
with the process--including OSM, the States, the challengers, and the
public--that determinations of such challenges are based upon a
complete administrative record. OSM is confident that the cooperative
relationship between OSM and the States which has characterized the
development and implementation of AVS would be carried forward with
respect to challenges of ownership or control information on AVS made
before OSM.
Commenters representing State regulatory authorities also
questioned whether proposed Sec. 773.24 was inconsistent with other
provisions of the proposed rules which would allocate responsibility to
State regulatory authorities to make ownership or control decisions. In
support of these positions, the commenters cited the provisions of
proposed Sec. 773.26(b) which they considered to be inconsistent with
proposed Sec. 773.24. As is noted elsewhere in this preamble, proposed
Sec. 773.26 is being modified, renumbered, and adopted today as final
Sec. 773.25. The commenters were concerned that there would be
confusion in the permit application process if OSM would be the
deciding agency with respect to ownership or control information on
AVS.
OSM disagrees with the commenters' analysis. The provisions of
proposed Sec. 773.24 were designed to avoid confusion. In substance,
the proposed rule would provide challengers with a single forum, OSM,
before which they could contest ownership or control information shown
on AVS. The alternative to the proposed rule's approach would be for
challengers to challenge ownership or control links shown on AVS before
the various States. There is a greater likelihood of inconsistent
results with multiple jurisdictions making such decisions as opposed to
a single agency making such decisions. Further, the content of AVS
would be subject to such inconsistency, since the resolution of
challenges would have to be reflected in the AVS database. Given that
AVS is a national database which is used across State lines, there is a
need for consistency in the decisionmaking which forms the content of
AVS. Moreover, the approach provided in proposed Sec. 773.24 is
consistent with that provided in proposed Sec. 773.26(b).
Paragraph (b)(1)(i) of proposed Sec. 773.26 would provide that the
regulatory authority before which an application is pending has
authority for making decisions with respect to the ownership or control
of the applicant. Paragraph (b)(1)(ii) of proposed Sec. 773.26 would
provide that the regulatory authority that issued a permit would have
authority for making decisions with respect to the ownership or control
of the permittee. As will be discussed below in detail, OSM's final
regulation adopted as final Sec. 773.25 modifies this language to refer
to ownership or control of applications, permits, and violations,
rather than ownership or control of applicants, permittees, and
violators.
Under paragraph (b) of proposed Sec. 773.26, the authority of the
regulatory authority is initial authority, subject to OSM's oversight.
Under that paragraph of proposed Sec. 773.26, a regulatory authority
would analyze the facts and make an initial decision with respect to
the ownership or control links of an applicant or a permittee. Such
decision would be subject to OSM's oversight. Then, the regulatory
authority would enter such information into AVS, to the extent
necessary to update the system. The entry of such information into AVS
would also be subject to OSM's oversight. Since OSM has ultimate
authority, through the exercise of oversight, as to the content of the
ownership or control information on AVS, it is consistent for OSM to be
the single forum for the challenge of ownership or control information
shown on AVS as provided by proposed Sec. 773.24. If OSM later amends
the AVS to reflect a different conclusion with respect to a particular
ownership or control link than that reached by a State regulatory
authority, that reflects OSM's exercise of its oversight authority and
its responsibility for the ownership or control information contained
in AVS. If a regulatory authority would then consider a subsequent
application, it would be required to review AVS and to factor the
information shown in AVS, as amended by OSM, into the regulatory
authority's decision with respect to the later permit application.
Thus, proposed Secs. 773.24 and 773.26 are consistent with each other
and will not lead to confusion in the permit application process.
A commenter representing State regulatory authorities also proposed
a revision of proposed Sec. 773.24 such that OSM's decisions made under
the proposed regulation would be considered preliminary decisions which
would become final within 30 days thereafter if the person challenging
the link could show no valid reason why the decision should not become
final. The commenter asserted that such a provision would enable the
challenger to provide supplemental information which could lead to a
corrected final decision and, thus, obviate the need for an appeal to
OHA.
OSM appreciates the commenter's suggestion. OSM believes, however,
that persons should have the opportunity to seek review of the agency's
decision by OHA as soon as possible upon the agency's determination
that they are linked, through ownership or control, to violations. In
the absence of a final agency decision, such review by OHA would not be
routinely available. Accordingly, the proposed regulation provides for
a final agency decision which may then be appealed to OHA by a
challenger. If a challenger has new information which would lead OHA to
conclude that the challenger is likely to win a reversal of OSM's
decision, then such information would support temporary relief with
respect to the decision. On the other hand, where OSM has reviewed
information submitted and concluded that an ownership or control link
has been severed, OSM may choose to reserve the right to reopen such
decision in the event that new information or evidence comes to light
subsequently. Such reservation of the right to reopen by the agency
would be necessary to assure that the agency can correct its mistakes
and assure the accuracy of the AVS. Thus, OSM can supplement the record
with information discovered subsequent to any decision. Accordingly,
OSM has determined not to adopt the commenter's proposal.
In accordance with the above discussion, OSM has decided to adopt a
final version of Sec. 773.24 which is substantively similar to the
proposed version. OSM has, however, made some minor modifications to
the proposed rule which are now described.
In paragraph (a)(1) of the proposed rule, the rule provided for the
challenge of links by persons linked to any person cited in a Federal
or State violation notice. At the time that this proposal was published
in September, 1991, OSM expected that most challenges would be by
persons seeking to challenge links to violators to avoid permit blocks.
In actuality, members of the regulated community have also routinely
come before OSM seeking to challenge ownership or control links to
persons who are not violators. The language of the proposal did not
reflect this reality and was, therefore, too narrow. Further, the
language was potentially inconsistent with language contained in the
1988 preamble to OSM's ownership and control rules. In that preamble,
OSM stated, in relevant part, as follows:
Procedures to Amend Applicant Violator System Information. In
addition to the procedures described above, both individuals and
organizations may seek to amend the information in the Applicant
Violator System, independent of the existence of a permit
application if they believe that the records are not accurate,
relevant, timely or complete.
See Preamble to Requirements for Surface Coal Mining and Reclamation
Permit Approval; Ownership and Control; Final Rule, 53 FR 38868 at page
38879 (October 3, 1988). Accordingly, the final rule broadens the
proposed language to provide that ``[a]ny applicant or other person
shown in AVS in an ownership or control link to any person may
challenge such link'' even if the link is to persons who are not
violators. OSM intends to protect due process rights and provide an
efficient avenue to challenge information shown on AVS. The substance
of paragraph (a)(1) of the rule proposed in September, 1991 is
otherwise retained.
Proposed Sec. 773.24 has been further modified to delete references
in paragraphs (a)(2) and (a)(3) to proposed Sec. 773.26 and substitute
references to final Sec. 773.25 in the place of the deleted section
references. This reflects OSM's renumbering of the sections of the
proposed rule. No substantive change in the rule has been made by such
modification.
Paragraph (b) of proposed Sec. 773.24 would have required that a
person seeking to challenge ownership or control links or the status of
Federal violations submit to OSM a written explanation of the basis for
his or her challenge and provide relevant evidentiary materials and
supporting documents. Proposed paragraph (b) did not explicitly state
that the process of challenge described in this paragraph applied to
links shown in AVS. That was OSM's intent, however, as stated in the
preamble to the proposed rule. Accordingly, OSM has corrected the
oversight in the rule language by explicitly incorporating this
language into this final rule.
Paragraph (c) of proposed Sec. 773.24 has been adopted as proposed.
This provision requires OSM to make a written determination with
respect to the ownership or control link and/or with respect to the
status of the violation. The provision of the rule requires that, if an
ownership or control link is challenged, OSM then determines whether
the link has been shown to be erroneous or has been rebutted. While no
change has been made to the proposed rule, OSM believes that the
following explanation will be helpful in clarifying the operation of
the rule.
Under the rule, a determination that a link is ``erroneous'' means
that the facts in the case show that no ownership or control
relationship set forth in 30 CFR 773.5 ever existed. Thus, if an
individual is shown on AVS as being linked to a corporation by virtue
of his or her position as an officer of such corporation, see 30 CFR
773.5(b)(1), evidence demonstrating that such individual is not and has
never been an officer of the corporation would support a determination
that an ownership or control link based upon such a relationship is
erroneous.
A determination that a link has been ``rebutted'' means that, while
the facts in the case show that a presumed ownership or control
relationship as set forth in 30 CFR 773.5(b) exists or existed,
sufficient evidence has been presented to demonstrate that the ``person
subject to the presumption [did] * * * not in fact have the authority
directly or indirectly to determine the manner in which the relevant
surface coal mining operation [was] conducted * * *.'' See 30 CFR
773.5(b).
Accordingly, if the individual in the preceding example was, in
fact, an officer of the corporation, but did not have authority or
demonstrated control over the conduct of the surface coal mining
operation, the presumption of ownership or control would be rebutted.
The provisions of paragraph (d) of the proposed rule have been
adopted as proposed. Paragraph (d)(2)(i) of Sec. 773.24 provides that
OSM is required to serve a copy of its decision with respect to a
challenge upon the applicant or other challenger by U.S. certified mail
or by any other means consistent with the rules governing service of a
summons and complaint under Rule 4 of the Federal Rules of Civil
Procedure.
The date of service of the decision will set a date certain from
which the time for appeals will begin to run. The regulation provides
that service is complete upon tender of the notice or of the mail and
is not deemed incomplete by virtue of a challenger's refusal to accept
the notice or mail. The theory of this provision is to assure that a
challenger is not able to delay the running of the time for appeal by
avoiding or refusing service of OSM's decision and then claiming that
he or she was never served.
Paragraph (d)(2)(ii) of Sec. 773.24 has been adopted as proposed.
As provided in the proposed rule, the final version of this paragraph
provides that the applicant or other challenger can appeal OSM's
decision to OHA within 30 days of such decision in accordance with OHA
regulations at 43 CFR 4.1380 et seq.
As provided in the proposed rule, paragraph (d)(2)(ii) of the final
regulation provides all challengers to an OSM decision in these matters
with the opportunity to appeal the decision to OHA.
The preamble to the ownership or control rules published in 1988
provided that appeals by individuals from OSM decisions with respect to
information contained in AVS were made to the Department's Assistant
Secretary--Policy, Management, and Budget under procedures developed
under the Privacy Act of 1974. Appeals by entities other than
individuals were made to OHA. See Preamble to Requirements for Surface
Coal Mining and Reclamation Permit Approval; Ownership and Control;
Final Rule, 53 FR 38868 at page 38879 (``Procedures to Amend Applicant
Violator System Information'') (October 3, 1988).
In 1993, pursuant to a delegation from the Department's Assistant
Secretary--Policy, Management and Budget, the authority to decide
appeals with respect to information contained in AVS was delegated to
OHA. Consistent with such delegation, OSM believes that a single
process of appeal for both individuals and entities will promote
consistency for both the public and the regulated community and that
such appeal process should be explicitly contained in the final rule.
As provided in the proposed rule, paragraph (d)(2)(ii) of the final
rule provides that OSM's decision would remain in effect unless
temporary relief were granted in accordance with OHA regulations at 43
CFR 4.1386.
Paragraph (d)(2)(ii) of Sec. 773.24 provides for temporary relief
from OSM's decision, if OHA grants such relief in accordance with OHA
regulations at 43 CFR part 4. Under the final regulation, the period
during which a person may file a notice of appeal or the actual filing
of an appeal will not automatically suspend the use of the information
in AVS during the pendency of such appeal. The challenger will have to
explicitly seek such relief in appeal proceedings before OHA and be
granted such relief. See also 43 CFR 4.21(a).
In considering a request for temporary relief, OHA will apply the
criteria of Section 525(c) of the Act, 30 U.S.C. 1275(c), to determine
whether such relief is warranted. See OHA regulations at 43 CFR 4.1386.
To grant temporary relief under such criteria, OHA will have to find
that the challenger has a substantial likelihood of prevailing in his
appeal of the OSM decision and that temporary relief, if granted, will
not adversely affect the health or safety of the public or cause
significant, imminent environmental harm to land, air, or water
resources.
In determining whether the granting of temporary relief would cause
significant, imminent environmental harm, OHA will not attempt to
decide whether a denial of temporary relief will compel the applicant
or other challenger to abate a violation posing such harm. It is not
the intent of these rules to force a person to abate a violation even
if he or she is able to show a substantial likelihood that he or she
had no ownership or control over the operation that is in violation.
Instead, OHA will focus its attention upon the compliance history
of those persons who do appear to have had ownership or control over
operations in violation, to determine whether the granting of temporary
relief would pose a risk of significant, imminent environmental harm at
sites for which new permits could be issued during the pendency of the
appeal process.
In accordance with the above discussion, the provisions of the
proposed rule are adopted with the modifications noted.
Withdrawal of former proposed Sec. 773.25 which would have provided
procedures for challenging ownership or control links prior to entry in
AVS. In the September, 1991 proposal, OSM proposed a rule to provide
procedures for challenging ownership or control links prior to entry in
AVS. That proposal which was numbered as proposed Sec. 773.25
represented OSM's attempt to go beyond the Constitutional requirements
of due process. The proposal would have prospectively required OSM or a
State regulatory authority to provide notice to those persons who were
actively involved in surface coal mining operations and who were linked
to a violation through ownership or control before such link
information would be used to subject them to permit denial through AVS.
Such persons would then have had an opportunity to challenge such
information. Upon further consideration, OSM has decided to withdraw
the proposed regulation.
OSM believes that adequate due process rights to notice and an
opportunity to be heard are afforded by current practices which permit
a challenge to ownership or control and violation information after it
is incorporated into AVS. Such challenges can be made currently both
within the context of a permit application and independent of such an
application. OSM believes that these opportunities suffice to pass
constitutional muster. See Preamble to Requirements for Surface Coal
Mining and Reclamation Permit Approval; Ownership and Control; Final
Rule, 53 FR 38868 at page 38885 (``Due Process Provided'') and at page
38879 (``Procedures to Amend Applicant Violator System Information'')
(October 3, 1988).
Further, the Department's OHA is contemporaneously adopting a rule
providing for temporary relief from an ownership or control link, under
specified conditions. Such a rule significantly enhances the already
available due process protections available to the members of the
regulated community. The risk that someone will be inappropriately
subjected to a permit block due to an erroneous link is substantially
mitigated by the temporary relief procedures available before OHA.
Moreover, the proposed rule would have subjected OSM and State
regulatory authorities to a substantial paperwork morass as a condition
precedent to implementing the provisions of Sec. 510(c) of the Act.
OSM, which has been utilizing procedures similar to those proposed in
the September, 1991, rule, discovered that the process was taking
substantial amounts of time and resources to implement. The dialogue
and paper exchange between the agency and persons debating the proposed
ownership or control link was a prolonged exercise lasting, in some
cases, for many months. Also, OSM was finding that most of these
debates made no difference in the ultimate outcome, except where
entities refuted the facts which would invoke a link. Typically, the
ownership or control link was found to be well taken. The prolonged
debate was preventing accurate information from being incorporated into
AVS. During the period of the dialogue, the individual or entity
subject to the ownership or control link was not relieved of the cloud
of the potential link and the agency was not able to directly implement
the link. Neither OSM nor the person challenging the link benefited by
this course of events.
Further, industry, environmental advocates, and representatives of
State regulatory authorities were dissatisfied with the proposed rule.
Industry commenters condemned the proposed rule as providing
insufficient due process for challengers of ownership or control links.
Environmental advocates criticized the proposal as deficient in not
providing a set time frame for OSM to bring ownership or control
decisions to closure and to incorporate such decisions into AVS. A
commenter representing State regulatory authorities asserted that the
proposed rules should either provide for no challenge of an ownership
or control link prior to permit denial or for conditional issuance of a
permit pending full challenge of an ownership or control link. As is
stated above in the portion of this preamble captioned ``Due Process,''
OSM is unwilling, for a number of significant reasons, to accept that
permits may be conditioned upon the appeal of ownership or control
links. Nevertheless, the criticisms of the commenter representing the
State regulatory authorities, the industry commenters, and the
environmental advocacy groups also caused OSM to reconsider the
proposed rules.
Given that the incorporation of accurate and complete information
into AVS in a timely manner is critical to the development and
implementation of AVS, OSM believes that the needs of these constituent
groups are addressed more effectively by the provisions of the OHA
rule. OSM remains committed to developing complete and accurate
information for entry into AVS, and as part of this process will of
course consider information submitted by any party which would
establish or refute facts relevant to an ownership or control link. To
the extent that a person is injured by an erroneous ownership or
control link, the OHA temporary relief procedure quickly and
effectively neutralizes such injury in a timely manner. The
availability of such a process enables OSM to go forward in an
expeditious manner to utilize its resources to develop information,
rather than engage in prolonged paper exchanges; to avoid delay in
incorporating information into AVS, thus responding to the concerns of
environmental advocates; and to address effectively the concerns of the
industry which can invoke an administrative process outside of OSM for
quick relief if the claims of injury are meritorious. Additionally, by
enabling challengers to go to OHA more quickly, the focus of the
challenge procedures shifts to OHA, a forum created to address such
challenges of agency decisions. Finally, OSM can meet the terms of its
continuing mandate from Congress to develop and implement the AVS. See
Report of the Senate Appropriations Committee, Senate Report No. 103-
114, at page 47 (July 28, 1993).
In appropriate cases, OSM may engage in a dialogue and exchange of
documents with persons subject to a proposed ownership or control link
prior to incorporating an ownership or control link into AVS. OSM will
do this, however, only when OSM believes it needs additional
information concerning the proposed ownership or control link. In that
case, such a dialogue would enhance OSM's investigative process and
assist in the development of relevant information.
In accordance with the above, OSM has withdrawn this portion of the
September, 1991, proposal and is renumbering the remaining provisions
of the final rules presented today to reflect the deletion of former
proposed Sec. 773.25.
Section 773.25--Standards for Challenging Ownership or Control
Links and the Status of Violations. Proposed section 773.26 would have
established standards for challenges to ownership or control links and
for challenges to the status of violations. The proposed section would
have allocated responsibilities between OSM and State regulatory
authorities for resolving issues related to ownership and control and
would have provided the substantive criteria for resolving such issues.
In recognition of OSM's withdrawal of former proposed Sec. 773.25,
proposed Sec. 773.26 has been renumbered as final rule Sec. 773.25. For
the reasons discussed below, the final rule also has been modified to
delete the substantive criteria to resolve ownership or control issues
previously contained in the proposed rule.
Paragraph (a) of proposed Sec. 773.26 provided that its provisions
would have been applicable to any challenge concerning an ownership or
control link or the status of a violation when such challenge was made
under the provisions of 30 CFR 773.20 and 30 CFR 773.21 (improvidently
issued permits); proposed Sec. 773.23 (the regulatory authority's
review of ownership or control and violation information), proposed
Sec. 773.24 (procedures for challenging ownership or control links
shown in AVS), and proposed Sec. 773.25 (procedures for challenging
ownership or control links prior to entry in AVS); or 30 CFR part 775
(administrative and judicial review of permitting decisions).
Paragraph (b) of proposed Sec. 773.26 would have provided the basic
allocation of authority among regulatory authorities to make decisions
with respect to ownership or control and with respect to the status of
violations.
Paragraph (b)(1)(i) of proposed Sec. 773.26 would have provided
that the regulatory authority before which an application was pending
would have had authority for making decisions with respect to the
ownership or control of the applicant. Such regulatory authority would
have had responsibility for reviewing information submitted by the
applicant and other available information to ensure the complete
identification of the applicant's ownership or control links.
Paragraph (b)(1)(ii) of proposed Sec. 773.26 would have provided
that the regulatory authority that issued a permit would have had
authority for making decisions with respect to the ownership or control
of the permittee. Such decisions would be necessary in determining
whether the permit was improvidently issued, pursuant to 30 CFR 773.20.
The regulatory authority which issued a permit would have done so based
upon a complete review of ownership or control information.
Paragraph (b)(1)(iii) of proposed Sec. 773.26 would have provided
that the State regulatory authority that issued a State violation
notice would have had authority for making decisions with respect to
the ownership or control of any person cited in the notice.
Paragraph (b)(1)(iv) of proposed Sec. 773.26 would have provided
that the regulatory authority that issued a violation notice, whether
State or Federal, would have had authority for making decisions
concerning the status of the violation covered by the notice. The
``status'' of the violation meant whether the violation remained
outstanding, had been corrected, was in the process of being corrected,
or was the subject of a good faith appeal, within the meaning of 30 CFR
773.15(b)(1).
Paragraph (b)(2) of proposed Sec. 773.26 would have provided that
OSM would have authority for making decisions with respect to the
ownership or control of any person cited in a Federal violation notice.
Under the allocation principles set forth in paragraphs (b)(1) and
(b)(2) of the proposed rule, a regulatory authority that was deciding
whether a permit application should be granted or whether a permit had
been improvidently issued would have determined for itself the
ownership or control of the applicant or permittee, but it would have
deferred to the regulatory authority that issued a violation notice for
a determination of the ownership or control of the violator. The
application would be blocked or the permit would be found improvidently
issued if any owner or controller of the applicant or permittee were
also an owner or controller of a violator, as determined by the
respective regulatory authorities.
Paragraph (b)(3) of proposed Sec. 773.26 would have provided that
the authority of State regulatory authorities to make decisions with
respect to ownership or control links or the status of violations would
have been subject to OSM's oversight authority under 30 CFR parts 733,
842, and 843. Under paragraph (b)(3) of proposed Sec. 773.26, when OSM
disagreed with a decision of a State regulatory authority, it would
have taken action, as appropriate, under proposed Sec. 843.24,
oversight of State permitting decisions with respect to ownership or
control of the status of violations.
Paragraph (c) of proposed Sec. 773.26 would have established
evidentiary standards applicable to the formal and informal review of
ownership or control links and the status of violations.
Paragraph (c)(1) of proposed Sec. 773.26 would have provided that
in any formal or informal review of an ownership or control link or of
the status of a violation, the agency responsible for making a decision
would be required to make first a prima facie determination or showing
that the link exists or that the violation remains outstanding.
Under paragraph (c) of proposed Sec. 773.26, a challenger of a link
to a violation would have had to prove at least one of three proposed
conclusions by a preponderance of the evidence to succeed in his or her
challenge.
First, under paragraph (c)(1)(i) of proposed Sec. 773.26, a
challenger could have proven that the facts relied upon by the
responsible agency to establish ownership or control within the terms
of 30 CFR 773.5(a) or to establish a presumption of ownership or
control under 30 CFR 773.5(b) do not or did not exist.
Paragraph (c)(1)(ii) of proposed Sec. 773.26 provided that a person
subject to a presumption of ownership or control under 30 CFR 773.5(b)
could have rebutted such presumption by demonstrating that he or she
does not or did not in fact have the authority directly or indirectly
to determine the manner in which surface coal mining operations are or
were conducted. Such demonstration would have been made in accordance
with the provisions of paragraph (d) of proposed Sec. 773.26.
Paragraph (c)(1)(iii) of proposed Sec. 773.26 provided that a
challenger could have proven that the violation covered by a violation
notice did not exist, had been corrected, was in the process of being
corrected, or was the subject of a good faith appeal within the meaning
of 30 CFR 773.15(b)(1).
Paragraph (c)(2) of proposed section 773.26 described the type of
evidence that a person challenging an ownership or control link or the
status of a violation would have had to present to meet the burden of
proof by a preponderance of the evidence. The proposed regulation
provided that the evidence presented would have had to have been
probative, reliable, and substantial. See 5 U.S.C. 556(d).
Paragraph (c)(2)(i)(A) of proposed Sec. 773.26 provided that a
challenger could have submitted affidavits setting forth specific facts
concerning the scope of responsibility of the various owners or
controllers of an applicant, a permittee, or any person cited in a
violation notice; the duties actually performed by such owners or
controllers; the beginning and ending dates of such owners' or
controllers' affiliation with the applicant, permittee, or person cited
in a violation notice; and the nature and details of any transaction
creating or severing an ownership or control link; or specific facts
concerning the status of the violation.
Paragraphs (c)(2)(i)(B) and (c)(2)(i)(C) of proposed Sec. 773.26
looked to official certification as the basis for the reliability of a
submitted document. Paragraph (c)(2)(i)(B) would have allowed for the
submission of certified copies of corporate minutes, stock ledgers,
contracts, purchase and sale agreements, leases, correspondence, or
other relevant company records. Paragraph (c)(2)(i)(C) would have
allowed for the submission of certified copies of documents filed with
or issued by any State, municipal, or Federal governmental agency.
Paragraph (c)(2)(i)(D) of proposed Sec. 773.26 provided for a
challenger's submission of an opinion of counsel in support of his or
her position. Under the proposed rule, such opinion would have been
appropriate for submission when it was supported by evidentiary
materials and when it was rendered by an attorney who certified that he
or she had personally and diligently investigated the facts of the
matter and that he or she was qualified to render the opinion.
Paragraph (c)(2)(ii) of proposed Sec. 773.26 provided that, when
the decision of the responsible agency was reviewed by an
administrative or judicial tribunal, the challenger could have
presented any evidence to such tribunal which was admissible under the
rules of the tribunal. Under the proposed regulation, however, the
evidence submitted would still have to have been probative, credible,
and substantial.
Paragraph (d) of proposed Sec. 773.26 represented OSM's attempt to
offer substantive standards which would have established what must be
proved by those seeking to rebut the presumptions of ownership or
control contained in current Sec. 773.5(b) of this title. Proof of the
facts set forth in the proposed regulation would have established that
the presumed owner or controller did not, in fact, have the authority
directly or indirectly to determine the manner in which the relevant
surface coal mining operation was conducted, under the provisions of 30
CFR 773.5(b).
In general, the proposed standards contained in paragraph (d) of
proposed Sec. 773.26 would have allowed a presumed owner or controller
to demonstrate that he or she lacked control over a surface coal mining
operation by presenting evidence that he or she actually lacked
authority directly or indirectly to determine the manner in which the
relevant surface coal mining operation would be conducted. In the
alternative, with respect to a presumed owner or controller of a
violator, the proposed standards would have allowed a person to present
evidence that he or she took all reasonable steps within his or her
authority to cause the violation to be abated and that such abatement
was prevented by those in actual control of the mining operation.
Paragraph (e) of proposed Sec. 773.26 would have provided for the
review and revision of information in AVS to reflect determinations
made by regulatory authorities in response to challenges of ownership
or control links or the status of violations. The proposed provision
would have provided that, following any determination by a State
regulatory authority or other State agency, or following any decision
by an administrative or judicial tribunal reviewing such determination,
the State regulatory authority would have been required to review the
information in AVS to determine if such information was consistent with
the determination or decision. If it were not consistent, the State
regulatory authority would have been required to promptly inform OSM
and to request that the AVS information be revised to reflect the
determination or decision.
Industry commenters criticized the provisions of paragraphs (a) and
(b) of proposed Sec. 773.26 as violating due process by not providing
an owner or controller with the opportunity to challenge the existence
of the violation at the time it was cited. They further criticized the
provisions of the proposed rule as violating State primacy. In
substance, they asserted that the proposed rule ``balkanized'' the
permit application process by allowing the regulatory authority that
issued a violation to identify the ownership or control links to the
violation. They asserted that this provision impermissibly allowed such
regulatory authority to play a role in the permit application process.
They further argued that the regulatory authority before which an
application was pending should be the sole decisionmaker.
OSM disagrees with these views. OSM has already addressed these
issues in detail in previous sections of this preamble captioned ``Due
Process'' and ``Primacy.'' Further, OSM has clarified that a permittee
may, within the context of the improvident permit issuance process,
challenge the existence of the violation at the time it was cited. See
discussion above in this preamble, ``Section 773.20--Improvidently
Issued Permits: General Procedures.''
A commenter representing State regulatory authorities took
exception to the provisions of paragraph (b)(3) of proposed Sec. 773.26
which would have provided that State determinations of ownership or
control challenges be subject to OSM's oversight authority. The
commenter asserted that those provisions were duplicative of other
provisions of current regulations which provide for OSM's oversight of
the States such as 30 CFR parts 733, 842, and 843. He further asserted
that the Act established OSM's oversight power over the States and that
such power required no reiteration by the proposed regulation.
In addition, commenters representing State regulatory authorities
argued that, under a system of State primacy, OSM has no authority to
act, on a case by case basis, with respect to a particular permit
decision by a State regulatory program, other than revoking the State's
approved regulatory program. Thus, they questioned OSM's authority to
review a State's decision with respect to ownership or control. They
also argued that, if OSM review of State ownership or control decisions
was done, this would lead to duplication and disruption in the permit
application process.
While these commenters asserted that the provisions of the proposed
regulation should be deleted, they proposed that, if OSM insisted on
going forward with the proposed provision or a similar rule providing
for OSM oversight of State decisions, the final rule should make
explicit that the initial decision of a State regulatory authority with
respect to an ownership or control issue would be considered
presumptively correct. They also proposed that a standard such as
``gross inadequacy'' should be the standard for OSM to apply to the
review of the State decision.
OSM disagrees with the commenters' analysis. First, OSM rejects the
commenters' view that the proposed regulation is unnecessary since the
Act and regulations already provide for OSM's oversight of the States.
The provisions of SMCRA such as sections 201, 503, 504, 505, and 521,
and the provisions of the Federal regulations at 30 CFR parts 733, 842,
and 843 do establish a system of State primacy subject to Federal
oversight. Nevertheless, such provisions do not explicitly address
every question which could arise in the implementation of the
relationship between OSM and the States with respect to Sec. 510(c) of
the Act which, as has been previously discussed in this preamble,
invokes significant issues of State primacy and Federal oversight.
Further, the implementation of the AVS also invokes issues of State
primacy and Federal oversight. Multiple State regulatory authorities
and OSM will be making ownership or control decisions at various stages
which are relevant to issues arising under section 510(c) of the Act.
While the proposed regulation is consistent with the Act and with OSM's
existing regulations, the proposed regulation's allocation of
responsibilities among the regulatory authorities who will be making
ownership or control decisions relevant to section 510(c) of the Act
has not been previously part of the Federal regulations. The allocation
of responsibilities provides necessary clarification to the regulated
community, to regulatory authorities, and to the public. Accordingly,
OSM must reject the view that the proposed regulation is duplicative of
current regulations.
OSM further rejects the view that, under a system of State primacy,
OSM has no authority to act, on a case by case basis, with respect to a
particular permit decision by a State regulatory program, other than
revoking the State's approved regulatory program. A number of
provisions of the Federal regulations, including 30 CFR 842.11 and
843.21, are very explicit in providing that OSM can exercise necessary
oversight authority with respect to a particular permit without
revoking a State's entire regulatory program. These other provisions
are consistent with the system of State primacy established by SMCRA.
The proposed regulation is similarly consistent.
Moreover, OSM has a particularly strong interest in working to
assure that ownership or control decisions are made correctly because
the fruits of such decisionmaking will be incorporated into AVS. As has
been previously discussed, AVS is used across State lines by the
various State regulatory authorities and by OSM itself. Accordingly, a
decision made with respect to an ownership or control link by one State
regulatory authority has the potential to effect the outcomes of permit
decisions by many regulatory authorities. Without consistency, there
would be chaos. Federal oversight in these matters supports consistency
among the various States in the application of the ownership or control
rules and the outcomes of the decisions on ownership or control issues.
Since these State decisions are ultimately incorporated into AVS, OSM's
oversight supports the quality of the AVS.
Also, there is no reason to conclude that the exercise of Federal
oversight, pursuant to the provisions of the proposed regulation, will
lead to disruption in the permit application process. Paragraph (b)(1)
of proposed Sec. 773.26 and the provisions of the final regulation
discussed below are designed to avoid such disruption by allocating
responsibilities among the various regulatory authorities who each have
a legitimate interest in the outcome of an ownership or control issue.
The oversight provisions of paragraph (b)(3) of proposed Sec. 773.26
are designed to support such allocation of responsibilities in a way
that is consistent with SMCRA and OSM's implementing regulations.
OSM further believes that the commenter's proposal that a final
rule should make explicit that the initial decision of a State
regulatory authority with respect to an ownership or control issue will
be considered presumptively correct is adequately addressed. In
substance, the provisions of paragraph (b)(3) of final Sec. 773.25
discussed below already provide that State regulatory authorities who
are issuing violations, considering permit applications, and issuing
permits with the first opportunity to decide the owners or controllers
of, respectively, violations, applications, and permits. While the
first opportunity to make a particular decision is not equivalent to a
legal presumption in favor of the decision, such an opportunity does
give a State regulatory authority the chance to define the status quo
which would be subject to oversight review. OSM declines, however, to
convert such initial decisionmaking opportunity into a presumption. The
need for consistency with respect to ownership or control decisions and
with respect to AVS require that OSM conduct oversight reviews of such
State decisions as are necessary without the application of a
presumption favoring the affirmance of such decisions.
OSM also declines to incorporate a standard such as ``gross
inadequacy'' or some other criterion as the basis for Federal oversight
of State ownership or control decisions under paragraph (b)(3) of
proposed Sec. 773.26. The application of such a standard would limit
OSM's ability to review State decisions for purposes of protecting the
consistency and accuracy of information in the AVS. As will be
discussed with respect to the final rule Sec. 773.25 below, OSM has
made modifications to proposed Sec. 773.26 to reflect OSM's
responsibility for the ownership or control information shown on AVS
and to enable OSM to act to maintain the integrity of the AVS database.
With respect to oversight incident to particular applications, permits,
and violations, paragraph (b)(3) of proposed Sec. 773.26 already
contains references to 30 CFR parts 733, 842, and 843. Final rule
Sec. 773.25 contains identical references. Each of these parts of Title
30 of the Code of Federal Regulations contains provisions which have
explicit criteria and triggering standards for OSM's review and action
with respect to State decisions. Such criteria and standards are
incorporated by reference in paragraph (b)(3) of proposed Sec. 773.26
and would be applied, as appropriate, by OSM. Accordingly, there is no
need for additional review criteria in OSM's oversight under the
proposed regulation. As discussed below, final rule Sec. 773.25 adopts
the same approach.
A commenter representing environmental advocacy groups questioned
whether the provisions of paragraph (b) of proposed Sec. 773.26
sufficiently explained the allocation of responsibilities between OSM
and State regulatory authorities. The commenter questioned the
provision of the proposal contained at paragraph (b)(3) which provided
that State regulatory authorities' authority to make ownership or
control decisions would be subject to OSM's review as an element of
State program oversight. The commenter asserted that this provision
required further clarification as to the respective roles of OSM and
the State regulatory authorities in the making of ownership or control
decisions.
OSM agrees with the commenter's observation that further
clarification is in order with respect to the allocation of
responsibilities and authority contained in paragraph (b)(3) of
proposed Sec. 773.26. Accordingly, OSM has made a change to the final
rule to clarify that, with respect to information shown on AVS, State
responsibilities to make decisions with respect to ownership or control
are subject to OSM's plenary authority.
Thus, under the final rule, once ownership or control information
is entered into AVS, OSM will assume control of such data. If OSM
reviews such information and concludes that it is incorrect, OSM will
act to correct such ownership or control information and will
incorporate such corrected information into AVS. The rationale for
OSM's plenary authority is that AVS is used across State lines by all
of the State regulatory authorities and the Federal government must act
to protect the accuracy and integrity of AVS. With respect to the State
regulatory authority's decision underlying such ownership or control
information, OSM will further act pursuant to the provisions of final
Sec. 843.24, which is described in detail below.
Nevertheless, OSM must reject the view that, because ownership or
control issues are invoked, OSM must be initially involved in every
permit application decision made by a State regulatory authority. The
primary responsibility and authority for making a decision whether to
issue or deny a permit is with the regulatory authority before which an
application is pending. The primary responsibility and authority under
a State regulatory program for issuing a violation is with that State's
regulatory authority. The primary responsibility for the ongoing
supervision of a permit is with the State regulatory authority which
issued the permit. Accordingly, while OSM has changed some of the
terminology in the final rule for reasons which are discussed below,
OSM has not changed the basic conceptual framework contained in
paragraph (b)(3) of proposed section 773.26. That framework is that the
regulatory authority which is considering an application, which has
issued a permit, or which has issued a violation has initial authority
for making decisions with respect to the ownership or control
relationships respectively invoked by the application, the permit, and
the violation. OSM has program oversight authority of such decisions
under 30 CFR parts 733, 842, and 843.
This commenter further indicated that the provisions of paragraph
(b)(3) of the proposed section allocated the authority to review State
decisions with respect to permit applications to OSM, but that OSM
could exercise such authority only after a permit had been issued, in
accordance with proposed Sec. 843.24, and that this would cause
friction between OSM and the States. The commenter proposed that, if
OSM believed that an ownership or control link had not been made or had
been severed improperly by a State regulatory authority considering a
permit application, the permit should not be issued until OSM and the
State regulatory authority resolved their dispute.
OSM appreciates the commenter's concern. In any system involving
Federal oversight of the States, there is the potential for
disagreements between the States and the Federal government. SMCRA is
no exception. For instance, the invocation of the improvidently issued
permit process by OSM, pursuant to 30 CFR 843.21, subjects the State's
permit application review process to close scrutiny with respect to the
permit in question. This is one of the remedies provided in proposed
Sec. 843.24 which paragraph (b)(3) of proposed Sec. 773.26 would make
applicable. There is potential for stress in this process. To help
avoid to improvident issuance of permits, however, OSM, through its AVS
Office, has attempted to be accessible to the States and to work with
the States have the benefit of OSM's most current opinions with respect
to particular ownership or control situations. Whether a State
regulatory authority chooses to avail itself of this service is a
matter within the discretion of the State regulatory authority which
has the primary authority to decide whether to issue a permit.
Principles of State primacy make it inappropriate, however, to mandate
such consultations with respect to every permit application.
Accordingly, OSM declines to modify the rule to mandate that OSM
intervene in the State permit application process to require that the
State not issue a permit if OSM disagrees with the State's resolution
of an ownership or control issue.
Industry commenters criticized the provisions of paragraph (c)(1)
of proposed Sec. 773.26. They questioned the requirement contained in
the proposed regulation that a regulatory authority make a prima facie
determination whether an ownership or control link exists to a
violation and that such violation remains ``outstanding.'' They
asserted that the provisions of section 510(c) of the Act require the
denial of permits for ``unabated'' violations only, not ``outstanding''
violations.
OSM disagrees with the commenters' analysis. The provisions of
section 510(c) of the Act require that a regulatory authority not issue
a permit if information available to it indicates that ``any surface
coal mining operation owned or controlled by the applicant is currently
in violation of the Act'' or other laws specified. (Emphasis added.)
Paragraph (c)(1) of proposed Sec. 773.26 requires a prima facie
determination whether the violation covered by a violation notice
``remains outstanding.'' A violation which ``remains outstanding'' is
one which is ``current.'' The plain meaning of these phrases is the
same. Further, by the use of the words ``remains outstanding'' in the
proposed regulation, OSM did not intend to change the standard
established by section 510(c) of the Act. Instead, OSM merely sought,
as the Federal agency charged with implementing SMCRA, to provide a
workable phrase defining a current violation.
Industry commenters further objected to paragraph (c)(1) of
proposed Sec. 773.26 insofar as such proposal required an applicant to
demonstrate, by a preponderance of the evidence, that the applicant did
not own or control the violator within the meaning of the regulations.
The commenters asserted that the imposition of such a burden of proof
upon the applicant was inconsistent with section 510(c) of the Act and
that the use of such an evidentiary burden was only appropriate for
formal proceedings before tribunals, rather than informal proceedings
before State regulatory authorities.
OSM disagrees with commenters' objections. The imposition of such a
burden of proof is entirely consistent with the provisions of section
510(c) of the Act which require that, when available information
indicates that a surface coal mining operation ``owned or controlled by
the applicant'' is in current violation of the Act or other laws
listed, the permit not be issued ``until the applicant submits proof
that such violation has been corrected or is in the process of being
corrected.''
Moreover, the statute is silent as to how an applicant may
demonstrate that he or she does not own or control a surface coal
mining operation. Under the Act, it is the duty of OSM, the
administrative agency charged with implementing the Act, to ``publish
and promulgate such rules and regulations as may be necessary to carry
out the purposes and provisions of * * * [the] Act.'' See section
201(c)(2) of the Act.
Thus, OSM proposed, and today is finalizing, a regulation which
carries out the purposes of section 510(c) of the Act and places the
burden of evidence production and persuasion upon the person
challenging an ownership or control link to a current violation. This
is consistent with the provisions of that section of the Act which
clearly place the burden of going forward with proof that a violation
has been corrected or is in the process of correction upon the
applicant who owns or controls a surface coal mining operation which is
in violation of the Act.
Moreover, in the absence of some means of showing that he or she
does not own or control a particular surface coal mining operation
which is in violation of the Act, an applicant who owned or controlled
such an operation would only be able to receive a permit if he or she
could produce proof that the current violation was corrected or was in
the process of correction. As indicated above, consistent with its
statutory role to propose regulations, OSM has provided the ``means''
for an applicant to show that he or she does not control a surface coal
mining operation by establishing the burden of proof and evidentiary
standards contained in paragraph (c) of proposed Sec. 773.26.
Finally, OSM must reject the notion that the burden of proof
contained in the proposed regulation is inappropriate for use by State
regulatory authorities. Burdens of proof are used in formal litigation
before tribunals because they are helpful to the resolution of such
litigation. Such burdens establish the parameters of what parties to
litigation must do to prevail in their claims. Similarly, challengers
of ownership or control links need to know what parameters they need to
meet in proceedings before regulatory authorities to challenge such
links. Also, in making decisions with respect to ownership or control
or with respect to the status of violations, regulatory authorities
need guidance in assisting their decisionmaking process. In the absence
of guidance establishing burdens of proof and evidentiary standards,
the resulting decisions made may be inconsistent and based upon
uncertain standards. For instance, one regulatory authority may believe
the any quantity of evidence, including a mere scintilla, is sufficient
to successfully challenge an ownership or control link to a violation.
Another regulatory authority may believe that a successful challenge
requires a challenger to demonstrate that an ownership or control link
is rebutted beyond any reasonable doubt.
Thus, OSM's proposed rule has provided a single standard of
persuasion and production, a preponderance of the evidence, to be
required for the successful challenge of an ownership or control link.
OSM believes that such a standard represents a prudent middle ground
between the possible extremes of burdens of proof requiring a mere
scintilla of evidence and those requiring proof beyond a reasonable
doubt. OSM is confident that State regulatory authorities will be able
to implement such a standard and that it will prove helpful.
Accordingly, OSM rejects the commenters' assertion that the use of the
evidentiary burden of production contained in the proposed rule is
inappropriate for State regulatory authorities.
Industry commenters further criticized paragraph (c)(1) of proposed
Sec. 773.26 for requiring, as one of the bases to rebut a presumption
of ownership or control, proof that the facts relied upon to establish
such presumption do not or did not exist. The commenters asserted that
such a test may foreclose a demonstration that the regulatory authority
which established such presumption reached the wrong legal conclusion,
notwithstanding the truth of the facts. Further, the commenters
asserted, in substance, that the provisions of the proposed section
imply that the challenger would have to disprove all of the facts which
were considered by the agency which established the presumption of
ownership or control, not just the relevant facts which support the
presumption.
OSM does not agree with commenters' assertions. Paragraph (c)(1) of
proposed Sec. 773.26 was intended to provide the parameters as to what
factual demonstration must be made by a challenger of an ownership or
control link. Accordingly, paragraph (c)(1)(i) of proposed Sec. 773.26
provision provides for the challenge of a link by proof that the facts
necessary to invoke the presumption of ownership or control did not or
do not exist. Nothing in such proof of facts precludes legal arguments
which could be made, including those questioning the application of the
presumption under the operative facts. Further, facts relevant to that
legal issue could be presented under the provisions of paragraph
(c)(1)(ii) of proposed Sec. 773.26 which provides that a person could
demonstrate that he or she does not or did not have authority directly
or indirectly to determine the manner in which surface coal mining
operations are or were conducted.
Moreover, under the provisions of the proposed regulation,
challengers would only have to present proof with respect to factual
issues which are relevant to the invocation of the presumption of
ownership or control. If the presumption turns upon certain key factual
issues, these are the issues upon which the challenge will focus.
Challengers will not be required to disprove irrelevant facts which may
have been included in the administrative record of the agency which
initially established the presumption of ownership or control.
The industry commenters further objected to paragraph (c)(1)(ii) of
proposed Sec. 773.26 which provides that a person seeking to challenge
a presumption could demonstrate that he or she did not have authority
directly or indirectly to determine the manner in which surface coal
mining operations were conducted. The commenters questioned whether the
requirement that a person prove that he or she did not have such
indirect authority was an attempt by OSM to impermissibly extend the
reach of the ownership or control regulations to cover persons remote
from surface coal mining operations.
OSM denies that the proposed provision represents an attempt to
impermissibly extend the reach of the ownership or control regulations.
In fact, the proposed standard was taken from currently operative
ownership and control regulations. The provisions of paragraph (b) of
30 CFR 773.5, which have been effective since November 2, 1988, state
that a person subject to one or more of the presumptions contained in
paragraph (b) of that regulation is presumed to be an owner or
controller unless there is a demonstration that ``the person subject to
the presumption does not in fact have the authority directly or
indirectly to determine the manner in which the relevant surface coal
mining operation is conducted.'' (Emphasis added.) This is the same
standard which is also contained in paragraph (a)(3) of 30 CFR 773.5.
The purpose of this standard is to enable:
the regulatory authority * * * [to] examine any relationships and
the facts surrounding them, such as informal agreements, personal
relationships, and the mining history of the parties in question to
determine if the relationship results in control over a surface coal
mining operation. The regulatory authority may also consider any of
the circumstances surrounding a surface coal mining operation to
determine control. Such circumstances might include, for example,
the fact that a person has financed the operation, or owns the
equipment or the rights to the coal, or directs on-site operations.
See Preamble to Requirements for Surface Coal Mining and Reclamation
Permit Approval; Ownership and Control; Final Rule, 53 FR 38868 at page
38870 (October 3, 1988). Further, whether a person is ``remote'' in a
corporate chain of command is not the issue under the standard. The
issue is whether the totality of the circumstances indicate that the
person had the authority to exercise control over the relevant surface
coal mining operation. Such ``authority'' includes control or the power
to control. Id., at pages 38870-38871. The resolution of such issues is
necessary for the regulatory authority's analysis of an ownership or
control challenge. Accordingly, requiring a person challenging a
presumption of ownership or control to make such demonstration is
appropriate.
Industry commenters proposed that paragraph (c) of proposed
Sec. 773.26 be modified to provide that a person challenging the
presumption be able to prove that the agency relied upon incorrect
facts to support its determination of ownership or control; that the
person subject to the presumption did not have knowledge of the
violation, did not authorize the activity that led to the violation, or
did not have direct authority to determine the manner in which surface
coal mining operations were conducted; or that the ownership or control
link has been severed.
OSM appreciates the commenters' proposal. Nevertheless, OSM will
not adopt the commenters' proposed modifications for the following
reasons.
The provisions of paragraph (c)(1)(i) of proposed Sec. 773.26
already contain language providing for a challenger's proof that the
facts relied upon by regulatory authority to make a determination of
ownership or control did not or do not exist. Such language is
inclusive of the commenters' proposal that a challenger be allowed to
submit proof that the agency relied upon incorrect facts to support its
determination of ownership or control.
Further, the language contained in OSM's proposed regulation would
also encompass the commenters' proposal that a challenger be able to
provide proof that an ownership or control link has been severed. Under
paragraph (c)(1)(i) of the proposed regulation, such proof would be
included as evidence that the facts relied upon by the regulatory
authority to establish ownership or control or a presumption of
ownership or control did not or do not exist. Whether such proof is
sufficient to support a successful challenge to an ownership or control
link will depend upon the facts of each case. OSM must reject the
implication of commenters' proposal that the severance of a current
ownership or control link to a violator would relieve a person from
permit block in all cases. For instance, if a person was an owner or
controller of a violator during the period in which the violation was
committed, severance of his or her current ownership or control
relationship with the company would not relieve him or her of
responsibility created through the prior ownership or control link.
OSM must further reject commenters' proposal to the extent that it
would establish a standard which would enable a challenger of an
ownership or control link to a violation to challenge the link by proof
that he lacked knowledge of the violation; that he did not authorize
the activity which led to the violation; or that he did not have direct
authority to determine the manner in which surface coal mining
operations were conducted. Commenters' proposal must be rejected
because it ignores the control which stems from indirect authority.
OSM agrees that all of commenters' proposed standards invoke
factual matters which may be relevant when a regulatory authority
considers an ownership or control link to a violation. As such, proof
of each of these matters could be presented within the context of the
presentation of facts made under paragraph (c) of proposed Sec. 773.26.
For instance, proof presented that a person had no knowledge of a
violation; that he or she did not actually authorize a violation; or
that he or she did not have direct authority for the surface coal
mining operation may well reflect on the contours of the person's
responsibilities with a presumptively owned or controlled entity.
Nevertheless, such facts may also constitute a false shield which has
been created to conceal the substantive, indirect control that the
person has over a surface coal mining operation. Commenters' proposal
is flawed, therefore, because it would enable a challenger to
successfully challenge an ownership or control link by simply proving
lack of actual knowledge, actual authority, or direct control, without
requiring proof that a presumed owner or controller also lacked
indirect authority over the surface coal mining operation.
Industry commenters further proposed a modification to paragraph
(c)(1)(iii) of proposed Sec. 773.26. In OSM's proposal, that paragraph
prohibited a challenge as to the existence of the violation within the
context of a challenge to an ownership or control link or a challenge
to the status of the violation. Commenters proposed changes to allow a
challenge as to the existence of the violation at the time it was
cited. For the reasons discussed with respect to this issue in the
section of this preamble captioned ``Due Process'' and in the previous
discussion of changes made to final Sec. 773.20, OSM has generally
rejected commenters' proposal but has accepted such proposal with
respect to the improvident permit issuance process. Also, at the time
of permit denial, a permit applicant can appeal any reason for such
denial including the existence of a violation assuming that the
applicant is not bound by a prior administrative or judicial
determination or has not had a prior opportunity to challenge the
existence of the violation. Accordingly, OSM has amended paragraph
(c)(1)(iii) of final rule Sec. 773.25 to clarify that a challenge may
be made by a permittee acting within the context of the improvident
permit issuance process under Secs. 773.20-773.21. This is in
recognition of the more significant interest that a permittee has in a
permit compared to the limited interest that an applicant has in a
permit application. A permittee's ability to assert such a challenge
will be limited, however, if he or she had a prior opportunity to
challenge the violation notice and failed to do so in a timely manner
or if he or she is bound by a prior administrative or judicial
determination concerning the existence of the violation.
A commenter representing State regulatory authorities indicated
concern that paragraph (c) of proposed Sec. 773.26 contained legal
terms such as ``prima facie determination,'' proof ``by a preponderance
of the evidence,'' and ``probative, reliable, and substantial
evidence'' without providing definitions of such terms. The commenter
indicated that all of these terms have ``particular legal meanings.''
He urged that the proposed regulation be amended to incorporate
definitions of such terms, ``consistent with their common legal
meanings.''
OSM appreciates the commenter's proposal. OSM disagrees, however,
with commenter's view that the cited terms need formal definition in
the proposed regulation. As commenter has correctly noted, each of the
cited terms has a traditional, common legal meaning. In a proceeding to
challenge an ownership or control link or the status of a violation,
such terms would have their traditional legal meanings. It is
anticipated that such meanings will further evolve on a case by case
basis over time. Finally, with respect to the terms ``probative,
reliable, and substantial'' as such terms describe evidence, paragraph
(c)(2) of proposed Sec. 773.26 provides some examples of this type of
evidence.
A commenter representing a State regulatory authority criticized
the provisions of paragraph (c)(2)(ii) of the proposed regulation
because such provisions would potentially allow a challenger of an
ownership or control link to present evidence to a tribunal reviewing a
decision of a regulatory authority which had not previously been
presented to the regulatory authority. The commenter proposed a
modification to the regulation such that any evidence presented on
appeal by a challenger be limited to that which was presented to the
regulatory authority at the time when the decision being reviewed was
made. The commenter proposed that evidence which was not reasonably
available to the challenger at the time of the regulatory authority's
decision could, however, be presented for the consideration of the
reviewing tribunal.
OSM appreciates the commenter's proposal. One legitimate approach
to the process of such challenges might be to limit the presentation of
evidence on review to that which had been previously presented to the
regulatory authority which made the decision which has been subjected
to review. OSM believes, however, that the better approach is to allow
the presentation of any evidence admissible under the rules of the
reviewing tribunal, including evidence which was not previously
presented to the regulatory authority. This will assure that the review
of the decision with respect to the ownership or control link or the
status of a violation is based upon the most complete evidence
available to all parties participating in the review process. Such a
review will help assure that all parties have the opportunity to
present their complete proof with respect to their respective positions
in what is, substantively, a de novo proceeding. Such complete evidence
presentation and review may aid the legitimacy and acceptance of any
final decision made incident to such review.
Further, OSM disagrees with the view that such a process might
encourage a challenger to withhold relevant evidence for surprise
presentation at a subsequent review proceeding. A challenger will have
sufficient incentive to overcome a presumed ownership or control link
at the earliest possible time because he or she will want to avoid
permit blocks or further litigation. Accordingly, he or she can be
expected to present the best evidence available to make the case in
favor of overcoming the presumed ownership or control link. Thus, OSM
must reject the commenter's suggested modification to the proposed
regulation.
A number of commenters criticized paragraph (c)(2) of the proposed
regulation for allowing the use of affidavits in support of a challenge
to an ownership or control link or to the status of a violation. The
commenters asserted that such materials contain self-serving statements
and are unreliable. The commenters further asserted that affidavits
should not be the basis to overcome a presumption, in the absence of
additional evidence supporting such affidavits. The commenters proposed
various modifications to the proposed rule which would require the
submission of additional information when affidavits are presented in
support of a challenge to an ownership or control link. In this
respect, one commenter proposed a ``best evidence'' rule which would
not allow the presentation of affidavits when there was ``better''
documentary evidence available, such as official copies of corporate
records previously filed with State corporation commissions.
OSM appreciates the commenters' concern with respect to affidavits.
Nevertheless, affidavits do have certain indicators of reliability.
They are made under oath before a government official licensed to
witness such oaths, a notary public. Further, affidavits are recognized
as evidence sufficient to support a motion for summary judgment in
civil litigation. See Rule 56 of the Federal Rules of Civil Procedure.
Accordingly, OSM continues to consider affidavits as appropriate
evidence for a regulatory authority's review in the evaluation of a
challenge to an ownership or control link.
Nevertheless, OSM agrees that, in most cases, an affidavit
unsupported by other evidence may be insufficient to overcome a
presumption of ownership or control. There could be rare circumstances,
however, where an affidavit by itself could be the basis for rebuttal,
given the totality of the circumstances involved. Such matters are
appropriately addressed on a case by case basis, rather than through a
rule. Under the proposed rule, challengers are encouraged to submit
additional evidence along with affidavits.
Accordingly, OSM will not modify the proposed regulation to delete
the use of affidavits or to require that affidavits only be allowed as
proof if accompanied by other supporting evidence in every case. Also,
while OSM agrees that State corporation commissions may be a good
source of relevant ownership or control information, OSM declines to
adopt a ``best evidence'' test which would prevent the submission of
affidavits when documents have been filed with State corporation
commissions.
One commenter representing environmental advocacy groups criticized
paragraph (c)(2)(i)(D) of proposed Sec. 773.26 insofar as the
provisions allowed for the submission of an opinion of counsel in
support of a challenge with respect to an ownership or control link or
with respect to the status of a violation. In substance, the commenter
asserted that such opinions present no factual evidence for the
regulatory authority. Such opinions of counsel represent legal opinions
with respect to ownership or control and invade the province of the
decisionmaker, the regulatory authority.
OSM agrees that an opinion of counsel should not, in itself, be
considered ``evidence.'' Indeed, opinions of counsel constitute legal
analysis based upon factual information. Both proposed and final
regulations require that such opinions ``be supported by evidentiary
materials.''
Nevertheless, OSM must disagree that such opinions should be
excluded. By providing an opportunity for the submission of such
opinions, OSM is seeking to encourage counsel to conduct a diligent
investigation of the facts and to assist regulatory authorities by
presenting the fruits of such investigation--the factual materials--
along with counsel's legal opinions as to the import of such evidence.
The decision as to the weight to be given to the evidentiary materials
and the persuasiveness of the counsel's opinions remain with the
regulatory authority considering the challenge to the ownership or
control link. Lawyers routinely argue their clients' positions to
triers of fact and law. Such argument does not invade the province of
the decisionmaker which retains the authority to make the decision.
OSM has decided to allow for a challenger's submission of an
opinion of counsel in support of his or her position as part of final
Sec. 773.25. Such opinion would be appropriate for submission when it
is supported by evidentiary materials; when it is rendered by an
attorney who certifies that he or she is qualified to render an opinion
of law; and when counsel states that he or she has personally and
diligently investigated the facts of the matter or where counsel states
that such opinion is based upon information which has been supplied to
counsel and which is assumed to be true.
Whereas the proposed rule only provided for such opinion when
counsel made a personal investigation of the facts, the final rule
incorporates language to provide for opinions where such investigation
has not been made. The basis for this change is to reflect that, under
certain circumstances, attorneys might not choose to conduct a complete
personal investigation of the factual representations made within the
opinion. See Formal Opinion 346 (Revised), Tax Law Opinions in Tax
Shelter Investment Offerings, Standing Committee on Ethics and
Professional Responsibility, American Bar Association (January 29,
1982).
Such opinion is similar in type to that provided by counsel to an
adversary party as to title, tax issues, or environmental compliance in
real estate transactions. The indicator of reliability in this document
is that the attorney is offering his or her opinion subject to
professional standards provided by national and local bar associations
and possible sanctions for the violations of such standards which may
be imposed by applicable rules of conduct governing attorneys. In
addition, under the final regulation, the attorney's opinion by itself
is not enough to challenge an ownership or control link. Evidentiary
materials need to be submitted along with such opinion.
In addition to the substantive change noted above, OSM has made
non-substantive changes to the provision which clarify the requirements
of the final rule provision. Accordingly, OSM has adopted the proposed
rule with the changes noted as paragraph (c)(2)(i)(D) of final
Sec. 773.25.
As described above, paragraph (d) of proposed Sec. 773.26, required
proof for the rebuttal of ownership or control presumptions,
represented OSM's attempt to offer substantive standards which would
have established what must be proved by those seeking to rebut the
presumptions of ownership or control contained in current Sec. 773.5(b)
of this title. Proof of the type of facts set forth in the proposed
regulations would have established that the presumed owner or
controller did not, in fact, have the authority directly or indirectly
to determine the manner in which the relevant surface coal mining
operation was conducted, under the provisions of 30 CFR 773.5(b).
OSM has determined not to go forward with paragraph (d) of proposed
Sec. 773.26 and has, therefore, withdrawn that portion of the proposed
rule. In substance, OSM believes that ownership and control
determinations are inherently a case specific process. Each ownership
or control matter turns on the totality of circumstances in a given
case and whether the evidence presented demonstrates that the presumed
owner or controller does not or did not, in fact, have the authority
directly or indirectly to determine the manner in which the relevant
surface coal mining operation was conducted. See 30 CFR 773.5(b)(1).
The pragmatic focus of such an inquiry will continue to be whether a
presumed controller actually exercised control over an entity or had
the substantive power to exercise control over an entity, even if he or
she chose not to actually exercise such power. As OSM has stated
previously in the preamble to 30 CFR Sec. 773.5(b), ``To the extent
that a coal company controls or can exercise control over a contract
operator, it should be held responsible for any outstanding violations
of the Act which it should have prevented or corrected.'' (Emphasis
added.) See Preamble to Requirements for Surface Coal Mining and
Reclamation Permit Approval; Ownership and Control; Final Rule, 53 FR
38868 at page 38877 (October 3, 1988). In effect, a person challenging
a presumption of control must demonstrate, by a preponderance of the
evidence, that neither of these two circumstances is applicable.
While it might be initially attractive for the agency to create a
standard containing three or four elements, the proof of which
automatically rebuts a presumption, OSM is unwilling to impose such
potentially rigid substantive tests upon the process of analyzing
ownership or control cases. OSM believes that such rigid standards do
not serve the interests of the States, industry, or OSM, because they
might be taken to preclude consideration of other rebuttal evidence not
listed or, conversely, might force a State regulatory authority to
accept a rebuttal which conforms substantially to OSM's model but
which, in the opinion of the regulatory authority, does not in fact
rebut the presumption. OSM's experience has taught that each ownership
or control rebuttal requires an analysis of the presumed relationship
within the complete factual context.
Accordingly, in analyzing the ownership or control profile of an
entity, OSM will look to the totality of circumstances--with the view
to understanding how a particular entity operates and operated--to
determine the true owners or controllers of a surface coal mining
operation.
Commenters representing environmental advocacy groups asserted that
the rules should provide that any documents submitted by persons
challenging presumptions of ownership or control be considered part of
the public record and part of the permit file. On the other hand,
industry commenters argued that the rules are deficient because they do
not contain a provision by which documentation submitted could be held
confidential. They further asserted that there was no means for a
challenger to obtain a protective order with respect to confidential
materials submitted in support of a challenge.
OSM agrees that documents submitted in support of a challenge to an
ownership or control link or in support of a challenge to the status or
the existence of a violation should normally be considered part of the
public record. The public has a legitimate interest in knowing and
understanding the basis for a regulatory authority's decisions in these
matters. In a democracy, it is unreasonable for a governmental agency
to make such decisions based upon secret information. Further, the
credibility of the regulatory authority and the integrity of its
decisionmaking process require that its decisions be supported by an
adequate record.
At the same time, OSM also recognizes that there may be valid
competitive reasons why industry operators believe that certain
information needs to be kept confidential. For instance, a person may
not wish to reveal the price which he or she has paid for the coal
extracted by a mine contractor for fear that other contractors or
competitors will learn of this information and change their prices or
bids to the disadvantage of the person revealing the information. A
person concerned about such disclosure may be reluctant to submit a
copy of the relevant contract because it contains the agreed price. OSM
disagrees, however, that these industry concerns require special
provisions in the rules to seal documents or to otherwise protect
confidentiality.
In balancing the concerns of the public and the coal industry with
respect to public access to the submitted documents, OSM will be guided
by the principles of the Freedom of Information Act, 5 U.S.C. 552
(FOIA), and the Departmental regulations implementing FOIA. See 43 CFR
2.11-2.22. Upon request by a member of the public, OSM will ordinarily
make available to the requestor documents provided by challengers of
ownership or control links, the status of violations, and the existence
of violations. To the extent that a person submitting information to
OSM asserts that the materials should be kept confidential, OSM will
evaluate that request in accordance with the applicable provisions of
FOIA.
In accordance with the above analysis, OSM has determined that the
interests of the commenters can be addressed under current law and that
the rule does not need to be modified.
In accordance with the above discussion, OSM has determined to
adopt a final version of the proposed rule. The final rule has been
renumbered as Sec. 773.25 to reflect the withdrawal of proposed
Sec. 773.25, procedures for challenging ownership or control links
prior to entry in AVS. As indicated above, OSM has modified the
provisions of the proposal to allow for the submission of an opinion of
counsel based upon evidence developed through counsel's personal
investigation or based upon facts which have been supplied to counsel
in support of a challenge of an ownership or control presumption. As
further discussed above, OSM has inserted language in paragraph
(c)(1)(iii) to clarify that a permittee may challenge the existence of
the violation at the time it was cited within the context of
improvident permit issuance as provided by Secs. 773.20 and 773.21. OSM
has also withdrawn paragraph (d) of the proposed rule, required proof
for the rebuttal of ownership or control presumptions, described above.
The final rule contains no other substantive changes from proposed rule
Sec. 773.26. The final rule contains certain other non-substantive
modifications as described below.
Paragraph (a) of final Sec. 773.25 provides that provisions of
Sec. 773.25 are applicable to any challenge concerning an ownership or
control link or the status of a violation when such challenge is made
under the provisions of 30 CFR 773.20 and 30 CFR 773.21 (improvidently
issued permits); Secs. 773.23 (the regulatory authority's review of
ownership or control and violation information), and 773.24 (procedures
for challenging ownership or control links shown in AVS); or under 30
CFR part 775 (administrative and judicial review of permitting
decisions).
Paragraph (a) of the final rule differs from the proposed rule in
that references to proposed Sec. 773.25, procedures for challenging
ownership or control links prior to entry in AVS, have been deleted. A
further change in this paragraph from the proposed rule provides that
the provisions of final Sec. 773.25 apply to challenges of an ownership
or control ``link to any person'' rather than only to a ``link to any
person in a violation notice.'' The purpose of this change is to
clarify that the provisions of the section apply to challenges of
ownership or control links including those which do not generate a
current link to an outstanding violation. OSM's experience has
demonstrated that members of the regulated community have, in many
cases, sought proactively to challenge ownership or control links to
other persons, without regard to whether there were outstanding
violations. Such challenges have been asserted, among other reasons, to
avoid the risk of being linked to future violations through such
ownership or control relationships. OSM recognizes that this is a
legitimate concern. Accordingly, the change in the final rule allows
the challenge of ownership or control links without regard to whether
there are outstanding violations.
Paragraph (a)(2) of final Sec. 773.25 contains a further change
from the proposed rule in that the regulation provides that the
provisions of the rule apply to challenges of ``the status of any
violation covered by a notice.'' (Emphasis added.) The comparable
section of the proposed regulation provided that the regulation applied
to the status of ``the violation covered by such notice.'' The purpose
of the change is to recognize that there may be multiple violations,
rather than a single violation, to which a person is linked through
ownership or control. A person may wish to challenge the status of each
of these violations, rather than only the violation contained in a
single notice. If so, the provisions of final Sec. 773.25 apply to such
challenges. Consistent with this change, ``such notice'' is changed to
``a notice.''
Paragraph (b) of final Sec. 773.25 provides the basic allocation of
responsibility among regulatory authorities to make decisions with
respect to ownership or control and with respect to the status of
violations. State regulatory authorities are expected to have
procedures in place to address challenges made in accordance with these
rules, including in situations where there are ongoing State
proceedings in other jurisdictions on permit applications.
Paragraph (b)(1)(i) if final Sec. 773.25 provides that the
regulatory authority before which an application is pending has
``responsibility'' for making decisions with respect to the ``ownership
or control relationships of the application.'' This represents a change
of terminology from the comparable provision of the proposed rule which
provided that the regulatory authority would have ``authority for
making decisions with respect to the ownership or control of the
applicant.''
First, the use of the word ``responsibility,'' rather than
``authority,'' more accurately describes the regulatory authority's
mandate under this regulation. ``Responsibility'' encompasses both
authority, the power to act, and the obligation to act.
Further, paragraph (b)(1)(i) of final Sec. 773.25 speaks of
``ownership or control relationships of the application,'' rather than
of the ``ownership or control of the applicant,'' as provided in the
proposed rule. This change clarifies that the regulatory authority
before which an application is pending will evaluate and make decisions
with respect to the ownership and control issues with respect to an
entire application, rather than just the particular applicant,
consistent with this regulatory authority's primary responsibility for
the application. This regulatory authority has responsibility for
revising ownership or control information submitted as part of the
permit application and other available information to ensure the
complete identification of ownership or control relationships relevant
to the decision to be made with respect to the application. The word
``relationships'' has been added to the regulation because it better
explains the focus of this process.
Paragraph (b)(1)(ii) of final Sec. 773.25 provides that the
regulatory authority that issued a permit has responsibility for making
decisions with respect to the ownership or control relationships of the
permit. The regulatory authority which issued a permit would have done
so based upon a complete review of ownership or control information as
required by the regulations. In the event that the improvidently issued
permit regulations of 30 CFR 773.20 and 773.21 are invoked, this
regulatory authority will have to decide whether such permit has been
improvidently issued and whether, if the basis for such improvident
issuance was an ownership or control link to a violator, whether such
improvident issuance has been remedied. Accordingly, that regulatory
authority must make decisions with respect to ownership or control
relationships incident to the permit.
In paragraph (b)(1)(ii) of final Sec. 773.25, ``responsibility''
has replaced the word ``authority'' contained in the proposed rule. The
reasoning provided with respect to the changes made to paragraph
(b)(1)(i) of the final rule is applicable here. Again, the regulatory
authority will be making decisions ``with respect to the ownership or
control relationships of the permit, ``rather than with respect to the
ownership or control of the permittee,'' as provided in the proposed
rule. This reflects that regulatory authority's primary responsibility
for the permit which it has issued.
Paragraph (b)(1)(iii) of final Sec. 773.25 provides that the State
regulatory authority that issued a State violation notice has
responsibility for making decisions with respect to the ownership or
control relationships of the violation. The State regulatory authority
issuing the violation is in the best position to be aware, in the first
instance, of operative facts which identify those owners or controllers
who have the ``authority directly or indirectly to determine the manner
in which the relevant surface coal mining operation is conducted'' and
who can thus cause the abatement of the violation. See 30 CFR 773.5(b).
As in paragraph (b)(1)(i) of final Sec. 773.25, ``responsibility''
has replaced the word ``authority'' contained in the proposed rule. The
reasoning provided with respect to these changes in paragraph (b)(1)(i)
of the final rule is applicable here. Again, the regulatory authority
will be making decisions ``with respect to the ownership or control
relationships of the violation,'' rather than ``with respect to the
ownership or control of any person cited in such notice [of
violation],'' as provided in the proposed rule.
Paragraph (b)(1)(iv) of the final Sec. 773.25 provides that the
regulatory authority that issued a violation notice, whether State or
Federal, would have responsibility for making decisions concerning the
status of the violation covered by the notice. As in paragraph
(b)(1)(i) of the final rule, ``responsibility'' has replaced the word
``authority'' previously contained in the proposed rule. The reasoning
provided with respect to the similar change in paragraph (b)(1)(i) of
this final rule is applicable here.
As in the proposed rule, the ``status'' of the violation means
whether the violation remains outstanding, has been corrected, is in
the process of being corrected, or is the subject of a good faith
appeal, within the meaning of 30 CFR 773.15(b)(1). This approach is
consistent with the provisions of section 510(c) of SMCRA which require
that a regulatory authority considering a permit application look to
the ``agency that has jurisdiction over such violation'' to determine
whether a violation ``has been or is in the process of being
corrected.''
Paragraph (b)(2) of final Sec. 773.25 provides that OSM has
responsibility for making decisions with respect to the ownership or
control relationships of a Federal violation notice.
As in paragraph (b)(1)(i) of final Sec. 773.25, ``responsibility''
has replaced the word ``authority'' contained in the proposed rule. The
reasoning provided with respect to this change in paragraph (b)(1)(i)
is applicable here.
Paragraph (b)(2) of final Sec. 773.25 is essentially a Federal
counterpart to paragraph (b)(1)(iii) and the same basic rationale
applies here, as well. This provision differs from (b)(1)(iii),
however, in that OSM's authority to decide the ownership and control
relationships of a Federal violation notice is not initial
responsibility as the State's responsibility is in (b)(1)(iii).
Instead, OSM's responsibility is final.This difference recognizes that
State regulatory authorities are subject to oversight by OSM. OSM is
not subject to similar oversight by the States.
Under the allocation principles set forth in paragraphs (b)(1) and
(b)(2) of final Sec. 773.25, a regulatory authority deciding whether a
permit application should be granted or whether a permit has been
improvidently issued determines for itself the ownership or control
relationships of the application or permit, but it defers to the
regulatory authority that issued a violation notice for a determination
of the ownership or control relationships of the violation. The
application is then denied or the permit subject to treatment under the
regulations governing improvident issuance if any owner or controller
of the applicant or permittee is also an owner or controller of a
violator, as determined by the respective regulatory authorities.
Paragraph (b)(3)(i) of final Sec. 773.25 provides that with respect
to information shown on AVS, the responsibility of State regulatory
authorities to make decisions concerning ownership or control links
will be subject to the plenary authority of OSM. This represents a
change from the comparable provision of the proposed rule which
provided that the authority of regulatory authorities to make ownership
or control decisions with respect to applicants, permittees, and
persons cited in violation notices and decisions with respect to the
status of violations would be subject to OSM's review as an element of
State program oversight under parts 733, 842, and 843.
The rationale for this change is simply that OSM is ultimately
responsible for the maintenance and content of the AVS with respect to
ownership or control information. OSM believes that the quality of
ownership or control information is the core of AVS. OSM must closely
monitor such information to maintain the accuracy of such information
and the integrity of AVS. The need to protect the integrity of the AVS
dictates that OSM have the ability to review the underlying basis
supporting any ownership or control link shown on the system and to
change information with respect to any ownership or control link or all
such links, if necessary. Accordingly, the final rule provides that
OSM's authority will be plenary with respect to ownership or control
information shown on AVS.
Thus, once ownership or control information is entered into AVS,
OSM will assume control of such data. If OSM reviews such information
and concludes that it is incorrect, OSM will act to correct such
ownership or control information and incorporate such corrected
information into AVS. OSM intends to coordinate any such changes with
the regulatory authority responsible for initial entry of the data in
question.
Under paragraph (b)(3)(ii) of final Sec. 773.25, with respect to
information shown on AVS relating to the status of a violation and with
respect to ownership or control information which has not been entered
into AVS by a State, the authority of a State regulatory authority will
be subject to OSM's program oversight authority under 30 CFR parts 733,
842, and 843. OSM relies primarily upon the States to determine whether
State violations have been abated or not. SMCRA section 510(c)
explicitly states that an applicant must demonstrate that any current
violation ``has been corrected or is in the process of being corrected
to the satisfaction of the regulatory authority, department, or agency
which has jurisdiction over such violation * * *'' See also 30 CFR
773.15(b)(1).
Further, where State ownership or control information has not yet
become part of AVS, the information has not yet entered the Federal
information stream and has not yet become OSM's immediate
responsibility. Such information is, in effect, still the primary
responsibility of the State regulatory authority and potentially
subject to correction through procedures of the State regulatory
program. If correct information fails to enter the AVS, that may
represent a weakness of the regulatory authority's decisionmaking
process. Accordingly, that process may require review. With respect to
the State's decisionmaking process, principles of primacy require that
OSM review State actions in these matters in accordance with OSM's
program oversight under parts 733, 842, and 843. In the exercise of
program oversight however, it is also probable that OSM would review
particular decisions with a view to determining whether the State
regulatory authority complied with the provisions of its approved
program. Accordingly, in the event that a State determines not to enter
an ownership or control link into AVS, OSM will review such decision
when it has reason to believe, through information provided in a
citizen's complaint or otherwise, that the State's ownership or control
decision is arbitrary, capricious, or an abuse of discretion under the
State program.
In final Sec. 773.25, OSM has deleted language contained in the
proposed rule which would have provided that when OSM disagreed with
the decisions of State regulatory authorities, OSM would take action,
as appropriate, under Sec. 843.24, oversight of State permitting
decisions with respect to ownership or control or the status of
violations. This language has been deleted for two reasons. First, the
proposed language was redundant. Paragraph (b)(3)(ii) of final
Sec. 773.25 already provides that State regulatory authorities'
decisions are subject to OSM's oversight under parts 733, 842, and 843
of 30 CFR. As a section of part 843, the provisions of final
Sec. 843.24 would thus be applicable under appropriate circumstances.
Further, the agency was concerned that additional language specifically
requiring OSM to take action under final Sec. 843.24 could somehow be
construed as a limiting factor on OSM's authority to take action under
parts 733 or 842 or under other sections of part 843 as provided by
previous paragraph (b)(3)(ii) or 773.25.
Paragraph (c) of final Sec. 773.25 establishes evidentiary
standards applicable to the formal and informal review of ownership or
control links and the status of violations. The provisions of the final
section are substantively similar to the provisions of the comparable
provisions of the proposed rule. Certain minor changes described below
have been made to the proposal.
Paragraph (c)(1) of final Sec. 773.25 provides that in any formal
or informal review of an ownership or control link or of the status of
a violation covered by a violation notice, the agency responsible for
making a decision is required to first make a prima facie determination
or showing that the link exists, existed during the relevant period,
and/or that the violation remains outstanding. The language ``existed
during the relevant period'' has been added to the final rule to
clarify that, even when a person is not a current owner or controller
of a surface coal mining operation, a previous ownership or control
link to that operation may be the basis for permit denial where the
surface coal mining operation has an outstanding violation and that
violation had its inception during the previous period of ownership or
control. The requirement of a prima facie determination or prima facie
showing is satisfied by evidence presented establishing a presumption
of ownership or control. A prima facie determination is made when the
agency is reviewing the evidence itself, in an informal process; a
prima facie showing is made when the agency's determination is the
subject of a formal administrative or judicial review process. When the
agency makes such a determination or showing, the person seeking to
challenge the link or the status of the violation than has the burden
of proving the necessary elements of his or her challenge to the link
or to the status of the violation by a preponderance of the evidence.
Also, in the comparable provision of the proposed rule, the rule
language referred to the evidentiary standards applicable to the review
of ownership or control links ``to a person cited in a violation
notice.'' The final rule has been changed to reflect that these
standards will be applicable to the review of an ownership or control
link, without regard to whether such relationship involves a link to an
outstanding violation. The rationale for such a change has been
explained previously in this preamble in the discussion of a similar
change made in paragraph (a)(1) of this final rule section. As in the
proposed rule, where there is a link to a violation, these evidentiary
standards will apply to the review of the status of a violation.
Paragraph (c)(1) of final Sec. 773.25, requires a challenger of an
ownership or control link to prove at least one of three proposed
conclusions by a preponderance of the evidence to succeed in his or her
challenge.
Under paragraph (c)(1)(i) of final Sec. 773.25, a challenger can
demonstrate that the facts relied upon by the responsible agency to
prove ownership or control under the definitions of ``owned or
controlled'' or ``owns or controls'' contained in 30 CFR 773.5 do not
or did not exist. The final regulation differs from the comparable
provision of the proposed regulation in that while the final regulation
refers to 30 CFR 773.5, it does not specifically cite particular
paragraphs of 30 CFR 773.5 defining presumed and deemed relationships
of ownership or control. On June 28, 1993, OSM proposed rules which, if
adopted, would modify the organization of regulatory language in 30 CFR
773.5. See Proposed Rule, 58 Fed. Reg. 34652 (June 28, 1993). By
changing the language in paragraph (c)(1)(i) of final Sec. 773.25 to
delete references to the current paragraph organization of 30 CFR
773.5, OSM retains the flexibility to adopt or reject its rule proposal
of June 28, 1993, without having to further modify final Sec. 773.25.
Paragraph (c)(1)(ii) of final Sec. 773.25 provides that a person
challenging a presumption of ownership or control can prove that the
person subject to the presumption does not and did not have authority
directly or indirectly to determine the manner in which surface coal
mining operations were conducted. The final rule deletes a reference
contained in the proposed rule to the paragraph (d) of the proposed
rule which provided the required proof for the rebuttal of ownership or
control presumptions. As indicated above, that portion of the proposed
rule has been withdrawn.
Paragraph (c)(1)(iii) of final Sec. 773.25 provides that a
challenger can prove that the violation covered by a violation notice
did not exist, has been corrected, is in the process of being
corrected, or is the subject of a good faith appeal within the meaning
of 30 CFR 773.15(b)(1). The final rule provides that a person
challenging the status of a violation under Sec. 773.24 will not be
able to challenge the existence of the violation at the time it was
cited unless such challenge is made by a permittee within the context
of Secs. 773.20-773.21 of this part. As indicated previously, the
proposed rule did not explicitly allow challenge of the existence of
the violation by a permittee within the context of improvident permit
issuance. The proposed rule also did not include the words ``at the
time it was cited'' with respect to the concept ``existence of the
violation.'' The final rule has provided such clarification. Also,
references to proposed Sec. 773.25, procedures for challenging
ownership or control links prior to entry in AVS, have been deleted. In
addition, while no further substantive change has been made to the text
of paragraph (c)(1)(iii) of final Sec. 773.25, some editing has been
done to clarify the parallel construction of the regulatory text.
Under the provisions of final Sec. 773.25, the existence of the
violation at the time it was cited could also be challenged in a
proceeding under 30 CFR part 775 (involving administrative or judicial
appeals of permitting decisions), unless the challenger has failed to
take timely advantage of a prior opportunity to litigate the violation
or is bound by a previous administrative or judicial determination
concerning the existence of the violation.
In addition, certain minimal changes have been made to the proposed
rule with respect to the submission of documents in the proof of
challenges. Paragraphs (c)(2)(i)(B) and (c)(2)(i)(C) of proposed
Sec. 773.26 provided that certified copies of corporate documents and
certified copies of documents filed with or issued by State, Municipal,
or Federal government agencies could be submitted. Paragraphs
(c)(2)(i)(B) and (c)(2)(i)(C) of final Sec. 773.25 clarify that copies
of such documents can be submitted only ``if certified.''
Paragraph (c)(2)(i)(D) of final Sec. 773.25 provides for a
challenger's submission of an opinion of counsel in support of his or
her position. Such opinion would be appropriate for submission when it
is supported by evidentiary materials; when it is rendered by an
attorney who certifies that he or she is qualified to render an opinion
of law; and when counsel states that he or she has personally and
diligently investigated the facts of the matter or where counsel states
that such opinion is based upon information which has been supplied to
counsel and which is assumed to be true.
In accordance with the discussion above, the proposed rule has been
renumbered as final rule Sec. 773.25 and adopted as modified.
Deferral of action on proposed Sec. 773.27--Periodic Check of
Ownership or Control Information. In the September, 1991 proposed rule
package, OSM proposed this section which would have required that the
regulatory authority engage in periodic review of a permitted site to
assure that basic ownership and control information contained in the
current official record of the permit was and remains complete and
accurate. Subsequent to the publication of that proposal, OSM published
a modified version of such proposal as part of a comprehensive rule
proposal designed to address permit information requirements; ownership
or control; and the transfer, assignment and sale of permit rights. See
58 FR 34652, 34666 (June 28, 1993). OSM intends to address the proposed
rule within the context of the subsequent rulemaking. Accordingly, OSM
defers any decision with respect to this proposed rule.
3. Part 778--Permit Applications--Minimum Requirements for Legal,
Financial, Compliance, and Related Information
Deferral of action on proposed Sec. 778.13--Identification of
Interests. In the September, 1991 proposal, OSM proposed to revise the
provisions of paragraphs (c) and (d) of then current 30 CFR 778.13 to
clarify that permit applicants would be required to disclose relevant
information with respect to both ``deemed'' and ``presumed'' owners or
controllers within the meaning of the definitions of ``owned or
controlled'' and ``owns or controls'' under 30 CFR 773.5 (a) and (b),
respectively.
Subsequent to the publication of that proposal, OSM published a new
proposed amendment to 30 CFR 778.13 as part of the comprehensive rule
proposal cited above which was designed to address permit information
requirements; ownership or control; and the transfer, assignment and
sale of permit rights. See 58 FR 34652, 34668 (June 28, 1993).
Accordingly, OSM hereby defers any decision with respect to the
amendments proposed to 30 CFR 778.13 in today's rulemaking. Instead,
OSM will address proposed amendments to 30 CFR 778.13 within the
context of that subsequent proposal.
Section 778.14--Violation information. The proposed amendment would
have provided that the introductory language in paragraph (c) of 30 CFR
778.14 be amended to require a permit applicant to disclose all
violation notices received by the applicant within the preceding three
years. In addition, such introductory language would have been amended
to require the disclosure of all outstanding violation notices for any
surface coal mining operation that is deemed or presumed to be owned or
controlled by either the applicant or by any person who is deemed or
presumed to own or control the applicant under definitions of ``owned
or controlled'' or ``owns or controls'' under 30 CFR 773.5.
The regulation to be amended required the applicant to disclose
violations of various laws listed in 30 CFR 778.14(c). Use of the
proposed amended definition of ``violation notice'' from 30 CFR 773.5
would have obviated the need for such a list.
The regulation to be amended further required that the applicant
provide only a list of unabated cessation orders and unabated air and
water quality violation notices received prior to the date of the
application by any surface coal mining and reclamation operation owned
or controlled by either the applicant or by any person who owns or
controls the applicant. With respect to this second list, that
regulation did not require that an applicant list notices of violation
received or unpaid penalties or fees incurred by any surface coal
mining operation owned or controlled by the applicant or by any person
who owns or controls the applicant.
Moreover, in litigation relating to Secs. 778.14, 773.15(b)(1), and
related matters before the U.S. District Court of the District of
Columbia, the Secretary advised the court that he had decided to
reconsider Sec. 778.14(c). The Secretary stated that he intended to
propose a regulation ``which considers the extent to which violation
information should be reported concerning owners and controllers of
applicants as well as entities owned or controlled by the applicant.''
See National Wildlife Fed'n v. Lujan, No. 88-3117-AER (D.D.C.),
Memorandum of Points and Authorities in Support of the Federal
Defendants' Cross-Motion for Summary Judgment and in Opposition to
Plaintiffs' Motions for Summary Judgment, footnote 33, at page 90.
Consistent with the representation made to the court, the proposed
amendment to paragraph (c) of Sec. 778.14 would have required an
applicant to disclose all outstanding violation notices received by any
surface coal mining operation that was deemed or presumed to be owned
or controlled by either the applicant or any person who was deemed or
presumed to own or control the applicant.
Commenters representing members of the coal industry expressed
concern over the proposed amendment to 30 CFR 778.14(c) for essentially
three reasons. They asserted that the proposed amendment impermissibly
expanded the types of violations which must be reported by an applicant
by incorporating the newly amended definition of ``violation notice''
as the basis for reporting; that the proposal inappropriately expanded
the definition of ``owners or controllers'' which must be reported; and
that the proposal inappropriately expanded the type of information
required for operations linked through ownership or control.
OSM disagrees with the commenters' assertions. First, the proposed
regulation does incorporate the new definition of the term ``violation
notice'' which had been proposed, and has now been adopted, in
Sec. 773.5. The new definition of violation notice, however, is not
overly broad. In this preamble, OSM has already responded to similar
comments made with respect to this definition in the section of this
preamble captioned ``Section 773.5--Definitions.''
By incorporating the amended definition of ``violation notice,''
the proposed amendment to paragraph (c) of Sec. 778.14 would have
incorporated the list and types of violations which are relevant to a
regulatory authority's decision whether to issue a permit under section
510(c) of the Act and under the provisions of 30 CFR 773.15(b)(1). In
contrast to this, the unamended version of the regulation did not
require that an applicant list unpaid penalties or fees incurred by any
surface coal mining operation owned or controlled by the applicant or
by any person who owns or controls the applicant. Accordingly, the
proposed amendment would expand what has to be reported to enable the
regulatory authority to have necessary information to make its
decision. It is entirely appropriate to require that a permit applicant
report such information to the regulatory authority so that the
regulatory authority can make an informed decision.
As indicated above, commenters further asserted that the proposal
inappropriately expanded the definition of ``owners or controllers'' by
requiring the reporting of all outstanding violations received prior to
the date of permit applications by surface coal mining operations
deemed or presumed to be owned or controlled by the applicant or by any
person who owns or controls the applicant. The commenters asserted that
this placed the applicant in an untenable position. OSM disagrees with
this assertion.
Even if 30 CFR 778.14(c) would not be amended by the proposal, the
regulation already required the reporting of violations of surface coal
mining operations which the applicant is deemed or presumed to own or
control under the provisions of 30 CFR 773.5. Such reporting is
required even if the applicant believes that he or she can rebut the
presumption of ownership or control. The permit application is not
forced to admit ownership or control. On the contrary, such reporting
can be done by an applicant who, at the same time, reserves his or her
rights to deny ownership or control. Even under current law, the
applicant must disclose violations incident to the presumed ownership
or control relationship so that the regulatory authority can evaluate
this information. Thus, the amendment would just clarify what the
regulation already does. Therefore, the amendment has not
inappropriately expanded the definition of what constitutes surface
coal mining operations owned or controlled by the applicant.
Commenters further asserted that the proposal inappropriately
expanded the type of information required for operations linked through
ownership or control. In substance, the commenters argued that the
proposed regulation is overbroad and vague in requiring the reporting
of ``all outstanding violation notices'' received prior to the date of
application which are linked, through ownership or control, to the
applicant. Again, OSM disagrees with the commenters.
As discussed previously in this preamble with respect to
Sec. 773.25 of the final rule, an ``outstanding violation'' is one
which is currently in violation of the Act or of other laws specified
in Sec. 510(c) of the Act. Under the proposed amendment to 30 CFR
778.14(d), an ``outstanding violation notice'' is a written
notification from a governmental entity advising of a violation which
remains uncorrected. Such violations are the basis for permit denial
unless an applicant can demonstrate that the violation is in the
process of being corrected or is the subject of a good faith appeal,
within the meaning of 30 CFR 773.15(b)(1). It is reasonable to require,
prior to the date of application, that a permit applicant disclose such
violations to the regulatory authority with respect to surface coal
mining operations to which it is linked through ownership or control.
One commenter suggested that the proposed amendment should be
modified to require only the reporting of violations which would
subject an applicant to permit block. OSM considers this proposal to be
too restrictive. For instance, under commenter's proposal, an applicant
correcting a violation to the satisfaction of the agency which has
jurisdiction over such violation would not report such violation at the
time of application. Nevertheless, any permit to be issued should be
conditioned upon the performance of the corrective work being
accomplished. Absent the reporting of such violation by the applicant,
a regulatory authority might overlook the violation and issue the
permit unconditioned upon such performance. The same rationale would
apply with respect to the reporting of violations which are the subject
of good faith appeal, within the meaning of 30 CFR 773.15(b)(1).
Accordingly, OSM must reject the proposed change.
In addition, commenters asserted that requiring such disclosure by
large companies with multiple affiliates and multiple surface coal
mining operations is overly burdensome. OSM believes that companies
which own or control surface coal mining operations should be aware of
the compliance status of such operations. If companies choose to engage
in surface coal mining operations, they should also have the capability
of monitoring such operations. It is reasonable to require the
disclosure of outstanding violations. Thus, OSM disagrees with the
commenters' assertion.
Nevertheless, OSM intends to further address the issues of
compliance under 30 CFR 778.13 and 778.14. In a recently proposed rule
package of June 28, 1993, OSM proposed the streamlining of companies'
reporting under 30 CFR 778.13 and 778.14 through the use of information
already incorporated into AVS. See 58 FR 34652 et seq. (June 28, 1993).
Further, OSM's AVS Office stands ready to work with companies in the
development of methods to report such companies' ownership or control
relationships and to track the compliance of surface coal mining
operations.
As indicated previously in the preamble discussion of final section
773.15, OSM has decided to retain a limited presumption that notices of
violation are in the process of being abated for purposes of a
regulatory authority's review of a permit application. OSM made this
decision as result of comments received in response to its proposed
rules. Accordingly, OSM has amended paragraph (b)(1) of final
Sec. 773.15 to provide that a regulatory authority may presume, in the
absence of a cessation order, that a notice of violation is in the
process of abatement if certain conditions are present. These
conditions include that the abatement period for the notice of
violation has not yet expired and that the applicant has provided
certification that such violation is in the process of being corrected
to the agency with jurisdiction over the violation as part of the
violation information provided pursuant to Sec. 778.14. In accordance
with that change made to final Sec. 773.15, OSM has added language to
paragraph (c) of final Sec. 778.14 requiring that an applicant provide
such certification along with his or her disclosure of violations.
In accordance with the above discussion, OSM has determined to
adopt, with the modification noted, the proposed amendment to 30 CFR
778.14(c) as a final rule.
4. Part 840--State Regulatory Authority: Inspection and Enforcement
Section 840.13--Enforcement Authority. The proposed rule provided
that paragraph (b) of 30 CFR 840.13 be amended to include a reference
to proposed Sec. 843.23 as an enforcement provision whose stringency
must be matched by State programs. As has been stated previously in
this preamble, OSM has deferred action on the adoption of proposed
Sec. 843.23 for a later rulemaking. See Proposed Rule, 58 FR 34652 et
seq. (June 28, 1993). While OSM has adopted the reference to 843.23 for
inclusion in paragraph (b) of 30 CFR 840.13, the adoption of such
reference does not prejudge whether OSM will ultimately adopt proposed
Sec. 843.23 as a final rule.
5. Part 843--Federal Enforcement
Part 843--Table of Contents. In the September, 1991, proposal, OSM
proposed to amend the Table of Contents of 30 CFR part 843 to add, in
numerical order, the proposed regulations for the Federal enforcement
of the proposed AVS-related regulations. The proposed additions would
have included Sec. 843.23, sanctions for knowing omissions or
inaccuracies in ownership or control and violation information, and
Sec. 843.24, oversight of State permitting decisions with respect to
ownership or control of the status of violations.
Subsequent to the publication of the proposed additions to the
Table of Contents, OSM proposed a modified version of 843.23 as part of
a separate rulemaking. See Proposed Rule, 58 FR 34652 et seq. (June 28,
1993). OSM has deferred action on the adoption of proposed Sec. 843.23
for that later rulemaking. Since action on proposed Sec. 843.23 has
been deferred, OSM will not adopt a reference to Sec. 843.23 for
inclusion in the Table of Contents at this time. If a final version of
843.23 is adopted, a reference to the section will be added to the
Table of Contents.
OSM has adopted the proposed reference to 843.24, oversight of
State permitting decisions with respect to ownership or control or the
status of violations, for inclusion in the Table of Contents.
Section 843.10--Information collection. The September, 1991,
proposal would have removed existing section 843.10 since part 843 did
not contain any information collection requirements which required the
approval by the Office of Management and Budget under 44 U.S.C. 3507.
The references to Sec. 843.14(c) and 843.16 in existing 843.10 did not
represent information collection requirements. The requirements in
Sec. 843.14(c) for OSM to furnish copies of notices and orders to the
State regulatory authority and to any person having an interest did not
require OMB approval because the obligation to provide the information
was imposed upon OSM and not upon the State or upon a member of the
public. Section 843.16 merely informed the public of the right to file
an application for review and request a hearing under 43 CFR part 4.
In accordance with the proposal, OSM has deleted section 843.10.
Deferral of decision with respect to proposed Sec. 843.23--
Sanctions for knowing omissions or inaccuracies in ownership or control
and violation information. Proposed Sec. 843.23 was designed to respond
to those circumstances in which there had been a knowing failure to
provide the regulatory authority with complete and accurate ownership
and control or violation information in an application or other
document submitted pursuant to parts 773 and 778 of Title 30.
Proposed Sec. 843.23 was designed ``to carry out the purposes'' of
sections 507(b)(4), 510(b), 510(c), and 518(g) of SMCRA. The proposed
section was designed to deter and punish the intentional failure to
provide the complete and accurate ownership and control information
required by sections 507(b)(4) and 510 (b)-(c) of the Act. It would
have further implemented the criminal provisions of section 518(g)
where appropriate.
Subsequently, OSM again proposed this rule with certain
modifications. See 58 FR 34652 et seq. (June 28, 1993).
At this time, OSM has determined to defer further action on the
proposed rule. OSM will address the proposed rule within the context of
the subsequent rulemaking initiated on June 28, 1993.
As has been discussed previously in this preamble, OSM has allowed
references to Sec. 843.23 to remain in various sections of some of the
other final rules adopted today in the event that a final Sec. 843.23
is adopted. That such references have been allowed to remain, however,
does not constitute a prejudgment by OSM to ultimately adopt proposed
Sec. 843.23 or some version of that rule. Any decision of this type
will be made within the context of the subsequent rulemaking.
Section 843.24--Oversight of State permitting decisions with
respect to ownership or control or the status of violations. Proposed
Sec. 843.24 would have provided standards for OSM's oversight of State
permitting decisions with respect to ownership or control or the status
of violations.
Paragraph (a) of proposed Sec. 843.24 would have established the
bases which would have required OSM to have taken action under the
provisions of paragraphs (b) and (c) of proposed Sec. 843.24.
Paragraph (a)(1) of proposed Sec. 843.24 would have provided that
OSM would have been required to take action whenever it determined,
through its oversight of the implementation of State programs, that a
State had issued a permit without complying with the State program
equivalents of proposed Secs. 773.22 (verification of ownership or
control application information), 773.23 (review of ownership or
control and violation information), 773.24 (procedures for challenging
ownership or control links in AVS), 773.26 (standards for challenging
ownership or control links and the status of violations), and 843.23
(sanctions for knowing omissions or inaccuracies in ownership or
control and violation information).
Paragraph (a)(2) of proposed Sec. 843.24 would have provided that
OSM would have been required to take action whenever it had determined,
through its oversight of the implementation of State programs, that a
State had failed in a systemic manner to comply with the State program
equivalent of proposed Sec. 773.27 (periodic check of ownership or
control information).
Paragraph (a)(2) of proposed Sec. 843.24 would have defined
``failure to comply in a systemic manner'' to include a continuing
pattern of noncompliance by a State, or one of more instances of
noncompliance that result from or evidence a legal or policy decision
which the State intended to apply to similar cases.
Under paragraph (a) of proposed Sec. 843.24, a State's isolated
failure to comply with proposed Sec. 773.27 (periodic check of
ownership and control information) would have been treated differently
from isolated failures to comply with the proposed regulations listed
in paragraph (a)(1) of proposed Sec. 843.24.
Paragraph (b) of proposed Sec. 843.24 would have required OSM to
initiate action under 30 CFR 843.21 if, as a result of the
determination made under paragraph (a) of the proposed section, OSM had
reason to believe that the State had issued a permit improvidently
within the meaning of 30 CFR 773.20.
Paragraph (c) of proposed Sec. 843.24 would have provided for
remedial actions by OSM against a State which did not comply with the
proposed regulations relating to ownership or control and violation
information during the permit application process. Such actions would
have been applied where the State had knowingly failed to comply with
the State program equivalents of sections 773.22 (verification of
ownership or control application information), 773.23 (review of
ownership or control and violation information), 773.24 (procedures for
challenging ownership or control links in AVS), 773.26 (standards for
challenging ownership or control links and the status of violations),
or 843.23 (sanctions for knowing omissions or inaccuracies in ownership
or control and violation information), or where the State had failed in
a systemic manner to comply with Sec. 773.27 (periodic check of
ownership and control information).
Under the proposed regulation, the remedial actions against a non-
complying State could have included grant reduction or termination
under 30 CFR 735.21 or 30 CFR 886.18 and the substitution of Federal
enforcement or other action pursuant to 30 CFR 733.12(b). Such remedial
actions would not have been used where the State's actions were
mandated by court order or where the State had not knowingly failed to
comply.
A commenter representing environmental advocacy groups expressed
concern that proposed Sec. 843.24 did not expressly provide that
citizens could petition OSM to take enforcement action where they had
reason to believe that violations of the sections subject to
Sec. 843.24 exist. OSM recognizes commenter's concern about citizen
participation and has addressed that issue in some detail above in this
preamble in the section captioned ``Citizen Participation.'' The
analysis in that section of the preamble is generally applicable to
proposed Sec. 843.24. For reasons similar to those expressed in that
section of the preamble, OSM must reject commenter's proposal to
explicitly modify the proposed rule at this time.
Until these matters are addressed directly by further proposal of
the agency, citizens could, however, assert their rights in a number of
ways in accordance with the provisions of proposed Sec. 843.24. With
respect to specific permits under paragraph (b) of proposed
Sec. 843.24, concerned citizens could assert their complaints within
the context of 30 CFR 842.11, 842.12, 842.15, and 843.21. With respect
to more global remedies such as the reduction of State grants or the
termination or the substitution of Federal enforcement provided by
paragraph (c) of proposed Sec. 843.24, OSM could accept and review
information submitted by citizens with a view to determining whether
such remedies were appropriate under the circumstances.
The commenter also took issue with the provision of paragraph (b)
of proposed Sec. 843.24 in that such provision would have provided that
OSM take action under the provisions of 30 CFR 843.21 if OSM had reason
to believe that a State had issued a permit improvidently within the
meaning of 30 CFR 773.20. The commenter questioned the legality of 30
CFR 773.20 and 843.21 and asserted that these improvidently issued
permit rules violated SMCRA. OSM disagrees with commenter's criticisms.
OSM considers these rules to be legal. OSM incorporates by reference
the arguments that the Department has made defending such rules in
briefs filed in the case of National Wildlife Federation v. Lujan, No.
88-3117 (D.D.C.), and Save Our Cumberland Mountains, Inc., v. Lujan,
No. 81-2134 (D.D.C.). As indicated previously, copies of these briefs
are being placed in the Administrative Record of this rulemaking.
A commenter representing State regulatory authorities questioned
the provision of paragraph (c) of proposed Sec. 843.24 which stated
that a State regulatory authority would be excused from a failure to
comply with the State program equivalents of the AVS-related
regulations if such non-compliance was the result of a ``mandatory
injunction.'' The commenter asked for clarification of this term.
Under the proposed regulation, a mandatory injunction would be an
order to a regulatory authority by a court with jurisdiction over which
the regulatory authority has no control. Such an order would have the
effect of ordering or otherwise preventing the regulatory authority
from complying with the provisions of the regulations cited in
paragraph (c) of proposed Sec. 843.24.
A commenter representing a State regulatory authority indicated
approval of the requirement contained in paragraph (c) of proposed
Sec. 843.24 that a State's failure to comply with proposed
Secs. 773.22, 773.23, 773.24, 773.26, and 843.23 be a ``knowing''
failure, before sanctions could be imposed.
OSM agrees with commenter and has retained the ``knowing'' standard
in paragraph (c) of the final rule adopted as described below. The
determination of what constitutes a State's ``knowing'' behavior would
be made based upon a full consideration of the facts. In substance, the
issue would be whether the State knew or had reason to know that its
actions constituted a failure to comply with the regulations.
OSM has determined to adopt the proposed rule, with certain
modifications, as final rule Sec. 843.24. The final rule and the
rationale behind such modifications are now described.
First, in paragraph (a) of the proposed rule, a reference to
proposed Sec. 773.26 has been deleted from among the list of
regulations with which a State must comply to avoid action by OSM. As
discussed previously, proposed Sec. 773.26 has been renumbered and
adopted as final Sec. 773.25. Accordingly, a reference to Sec. 773.25
has been substituted in paragraph (a) of final Sec. 843.24. A similar
substitution has also been made in paragraph (c) of the final rule.
Second, OSM has deleted subparagraph (a)(2) of proposed
Sec. 843.24. The proposed section would have required action by OSM
when OSM determined that a State had systemically failed to comply with
proposed Sec. 773.27, periodic check of ownership or control
information. As has been discussed previously, OSM is deferring action
on proposed Sec. 773.27 as part of a subsequent rulemaking. See 58 FR
34652 et seq.
In dealing with a similar deferral with respect to proposed
Sec. 843.23 described above in this preamble, OSM was able to allow
references to proposed Sec. 843.23 to remain in other final rules in
the event of the ultimate adoption of 843.23. If Sec. 843.23 is
ultimately not adopted, the references in the final rules to it will be
mere surplusage.
Unlike those other references to proposed Sec. 843.23, the
references to proposed Sec. 773.27 contained in final Sec. 843.24 are
presented within a context of defining and applying a special standard,
systemic noncompliance, applicable only to a State's failure to comply
with Sec. 773.27. The rationale for adopting the particular standard of
systemic noncompliance is inextricably linked to the issue of whether
the adoption of proposed Sec. 773.27 is appropriate. Accordingly, both
issues will be appropriately addressed together in the separate
rulemaking. Thus, OSM has deleted all of subparagraph (a)(2) of
proposed Sec. 843.24.
Further, the provisions of paragraph (c) of proposed Sec. 843.24
would have required OSM to initiate action under Secs. 735.21 or 886.18
and/or Sec. 733.12 if OSM determined that a State had failed to comply
in a systemic manner with the State program equivalent to Sec. 773.27.
In the final Sec. 843.24, OSM has deleted such language for the reasons
justifying a similar deletion of subparagraph (a)(2) of the proposed
rule.
OSM emphasizes that the deletion of this language does not indicate
that OSM has made a prejudgment with respect to the ultimate adoption
of proposed Sec. 773.27 or with respect to the issue of systemic
noncompliance with respect to such proposed section. These matters will
be addressed in the subsequent rulemaking.
In accordance with the above discussion, Sec. 843.24 is adopted as
modified.
III. Procedural Matters
Effect of the Rule in Federal Program States and on Indian Lands
This rule will apply, through cross-referencing, in those States
with Federal programs: California, Georgia, Idaho, Massachusetts,
Michigan, North Carolina, Oregon, Rhode Island, South Dakota,
Tennessee, and Washington. The Federal programs for these States appear
at 30 CFR parts 905, 910, 912, 921, 922, 933, 937, 939, 941, 942, and
947, respectively. The rule will also apply through cross-referencing
to Indian lands as provided in 30 CFR part 750. No comments were
received concerning unique conditions in any of these Federal program
states or on Indian lands which would require changes to the national
rules or as specific amendments to any or all of the Federal programs
or the Indian lands program.
Effect of the Rule on State Programs
The provisions of section 503(a)(1) of the Act require that State
laws regulating surface coal mining and reclamation operations be ``in
accordance with'' the requirements of the Act. Further, section
503(a)(7) of the Act requires that State programs contain rules and
regulations ``consistent with'' regulations issued by the Secretary
pursuant to the Act.
These terms are defined at Sec. 730.5 of title 30 of the Code of
Federal Regulations to require that State programs contain procedures
which are, with respect to the Act, no less stringent than the Act; and
with respect to the Secretary's regulations, no less effective than the
Secretary's regulations in meeting the requirements of the Act.
Following promulgation of this final rule, OSM will evaluate State
programs to determine whether any changes in these programs will be
necessary. If the Director determines that any State program provisions
should be amended to be made no less effective than the revised Federal
rules, the individual States will be notified in accordance with the
provisions of 30 CFR 732.17.
Federal Paperwork Reduction Act
The collection of information contained in this rule has been
approved by the Office of Management and Budget under 44 U.S.C. 3501 et
seq. and assigned clearance numbers 1029-0034, 1029-0041, and 1029-
0051.
Executive Order 12778; Civil Justice Reform Certification
This rule has been reviewed under the applicable standards of
Section 2(b)(2) of Executive Order 12778, Civil Justice Reform (56 FR
55195). In general, the requirements of Section 2(b)(2) of Executive
Order 12778 are covered by the preamble discussion of this rule.
Additional remarks follow concerning individual elements of the
Executive Order:
A. What is the Preemptive Effect, if any, to be Given to the
Regulation?
The rule would have the same preemptive effect as other standards
adopted pursuant to SMCRA. To retain primacy, States have to adopt and
apply standards for their regulatory programs that are no less
effective than those set forth in OSM's rules. Any State law that is
inconsistent with, or that would preclude implementation of this
proposed rule would be subject to preemption under SMCRA section 505
and implementing regulations at 30 CFR 730.11. To the extent that the
rules would result in preemption of State law, the provisions of SMCRA
are intended to preclude inconsistent State laws and regulations. This
approach is established in SMCRA, and has been judicially affirmed. See
Hodel v. Virginia Surface Mining and Reclamation Ass'n, 452 U.S. 264
(1981).
B. What is the Effect on Existing Federal Law or Regulation, if any,
Including all Provisions Repealed or Modified?
This rule modifies the implementation of SMCRA as described herein,
and is not intended to modify the implementation of any other Federal
statute. The preceding discussion of this rule specifies the Federal
regulatory provisions that are affected by this rule.
C. Does the Rule Provide a Clear and Certain Legal Standard for
Affected Conduct Rather than a General Standard, While Promoting
Simplification and Burden Reduction?
The standard established by this rule are as clear and certain as
practicable, given the complexity of topics covered and the mandates of
SMCRA.
D. What is the Retroactive Effect, if any, to be Given to the
Regulation?
This rule is not intended to have retroactive effect.
E. Are Administrative Proceedings Required Before Parties may File Suit
in Court? Which Proceedings Apply? Is the Exhaustion of Administrative
Remedies Required?
No administrative proceedings are required before parties may file
suit in court challenging the provisions of this rule under section
526(a) of SMCRA, 30 U.S.C. 1276(a)
Prior to any judicial challenge to the application of the rule,
however, administrative procedures must be exhausted. In situations
involving OSM application of the rule, applicable administrative
procedures may be found at 43 CFR part 4. In situations involving State
regulatory authority application of provisions equivalent to those
contained in this rule, applicable administrative procedures are set
forth in the particular State program.
F. Does the Rule Define Key Terms, Either Explicitly or by Reference to
Other Regulations or Statutes That Explicitly Define Those Items?
Terms which are important to the understanding of this rule are set
forth in 30 CFR 700.5 and 701.5.
G. Does the Rule Address Other Important Issues Affecting Clarity and
General Draftsmanship of Regulations set Forth by the Attorney General,
With the Concurrence of the Director of the Office of Management and
Budget, That are Determined to be in Accordance With the Purposes of
the Executive Order?
The Attorney General and the Director of the Office of Management
and Budget have not issued any guidance on this requirement.
Regulatory Flexibility Act
The Department of the Interior has determined that this final rule
will not have a significant economic impact on a substantial number of
small entities under the Regulatory Flexibility Act, 5 U.S.C. et seq.
The final rule will not change costs to industry or to the Federal,
State, or local governments. Furthermore, the rules produce 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.
Executive Order 12866
The final rule has been reviewed under Executive Order 12866.
National Environmental Policy Act (NEPA)
OSM has prepared a final environmental assessment (EA) of this rule
and has made a finding that the rules adopted in this rulemaking will
not significantly affect the quality of the human environment under
section 102(2)(C) of the National Environmental Policy Act of 1969
(NEPA), 42 U.S.C. 4332(2)(C). A finding of no significant impact
(FONSI) has been approved for the final rule in accordance with OSM
procedures under NEPA. The EA is on file in the OSM Administrative
Record, room 660, 800 North Capitol St., NW., Washington, DC.
Author: The principal author of this final rule is Harvey P.
Blank, Attorney-Adviser, Division of Surface Mining, Office of the
Solicitor, U.S. Department of the Interior, 1849 C Street, NW,
Washington, DC 20240. Inquiries, however, with respect to the rule
should be directed to Russell Frum at the address and telephone
number specified in FOR FURTHER INFORMATION CONTACT.
List of Subjects
30 CFR Part 701
Law enforcement, 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 840
Intergovernmental relations, Reporting and recordkeeping
requirements, Surface mining, Underground mining.
30 CFR Part 843
Administrative practice and procedure, Law enforcement, Reporting
and recordkeeping requirements, Surface mining, Underground mining.
Dated: July 18, 1994.
Bob Armstrong,
Assistant Secretary, Land and Minerals Management.
Accordingly, 30 CFR Parts 701, 773, 778, 840, and 843 are amended
as set forth below:
PART 701--PERMANENT REGULATORY PROGRAM
1. The authority citation for part 701 continues to read as
follows:
Authority: Pub. L. 95-87 (30 U.S.C. 1201 et seq.), and Pub. L.
100-34.
Sec. 701.5 [Amended]
2. Section 701.5 is amended by deleting the definition of
``Violation notice.''
PART 773--REQUIREMENTS FOR PERMITS AND PERMIT PROCESSING
3. and 4. The authority citation for part 773 continues to read as
follows:
Authority: 30 U.S.C. 1201 et seq., 16 U.S.C. 470 et seq., 16
U.S.C. 1531 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., 16 U.S.C. 470aa et
seq., and Pub. L. 100-34.
5. Section 773.5 is amended by adding the definitions of
``Applicant/Violator System or AVS,'' ``Federal violation notice,''
``Ownership or control link,'' ``State violation notice,'' and
``Violation notice,'' in alphabetical order as follows:
Sec. 773.5 Definitions.
* * * * *
Applicant/Violator System or AVS means the computer system
maintained by OSM to identify ownership or control links involving
permit applicants, permittees, and persons cited in violation notices.
Federal violation notice means a violation notice issued by OSM or
by another agency or instrumentality of the United States.
* * * * *
Ownership or control link means any relationship included in the
definition of ``owned or controlled'' or ``owns or controls'' in this
section or in the violations review provisions of Sec. 773.15(b) of
this part. It includes any relationship presumed to constitute
ownership or control under the definition of ``owned or controlled'' or
``owns or controls'' in this section, unless such presumption has been
successfully rebutted under the provisions of Secs. 773.24 and 773.25
of this part or under the provisions of part 775 of this chapter and
Sec. 773.25.
State violation notice means a violation notice issued by a State
regulatory authority or by another agency or instrumentality of State
government.
Violation notice means any written notification from a governmental
entity, whether by letter, memorandum, judicial or administrative
pleading, or other written communication, of a violation of the Act;
any Federal rule or regulation promulgated pursuant thereto; a State
program; or any Federal or State law, rule, or regulation pertaining to
air or water environmental protection in connection with a surface coal
mining operation. It includes, but is not limited to, a notice of
violation; an imminent harm cessation order; a failure-to-abate
cessation order; a final order, bill, or demand letter pertaining to a
delinquent civil penalty; a bill or demand letter pertaining to
delinquent abandoned mine reclamation fees; and a notice of bond
forfeiture, where one or more violations upon which the forfeiture was
based have not been corrected.
6. Section 773.10 is revised to read as follows:
Sec. 773.10 Information collection.
(a) The collections of information contained in 30 CFR part 773
have been approved by the Office of Management and Budget under 44
U.S.C. 3501 et seq. and assigned clearance number 1029-0041. The
information will be used by the regulatory authorities in processing
applications. Response is required to obtain a benefit in accordance
with 30 U.S.C. 1201 et seq.
(b) Public reporting burden for this collection of information is
estimated to average four and one-half hours per response, including
the time for 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 to OSM Information Collection Clearance Officer, Room 640 NC,
1951 Constitution Ave., Washington, DC 20240; and the Office of
Management and Budget, Paperwork Reduction Project (1029-0041),
Washington, DC 20503.
7. Section 773.15 is amended by revising paragraphs (b)(1)
introductory text and (b)(2) as follows:
Sec. 773.15 Review of permit applications.
* * * * *
(b) Review of violations. (1) Based on a review of all reasonably
available information concerning violation notices and ownership or
control links involving the applicant, including information obtained
pursuant to Secs. 773.22, 773.23, 778.13, and 778.14 of this chapter,
the regulatory authority shall not issue the permit if any surface coal
mining and reclamation operation owned or controlled by either the
applicant or by any person who owns or controls the applicant is
currently in violation of the Act, any Federal rule or regulation
promulgated pursuant thereto, a State program, or any Federal or State
law, rule, or regulation pertaining to air or water environmental
protection. In the absence of a failure-to-abate cessation order, the
regulatory authority may presume that a notice of violation issued
pursuant to Sec. 843.12 of this chapter or under a Federal or State
program is being corrected to the satisfaction of the agency with
jurisdiction over the violation where the abatement period for such
notice of violation has not yet expired and where, as part of the
violation information provided pursuant to Sec. 778.14 of this chapter,
the applicant has provided certification that such violation is in the
process of being so corrected. Such presumption shall not apply where
evidence to the contrary is set forth in the permit application, or
where the notice of violation is issued for nonpayment of abandoned
mine land reclamation fees or civil penalties. If a current violation
exists, the regulatory authority shall require the applicant or person
who owns or controls the applicant, before the issuance of the permit,
to either--
* * * * *
(2) Any permit that is issued on the basis of a presumption
supported by certification under Sec. 778.14 of this chapter that a
violation is in the process of being corrected, on the basis of proof
submitted under paragraph (b)(1)(i) of this section that a violation is
in the process of being corrected, or pending the outcome of an appeal
described in paragraph (b)(1)(ii) of this section, shall be
conditionally issued.
* * * * *
8. Section 773.20 is amended by revising paragraphs (b) and (c) to
read as follows:
Sec. 773.20 Improvidently issued permits: General procedures.
* * * * *
(b) Review criteria. (1) A regulatory authority shall find that a
surface coal mining and reclamation permit was improvidently issued
if--
(i) Under the violations review criteria of the regulatory program
at the time the permit was issued:
(A) The regulatory authority should not have issued the permit
because of an unabated violation or a delinquent penalty or fee; or
(B) The permit was issued on the presumption that a notice of
violation was in the process of being corrected to the satisfaction of
the agency with jurisdiction over the violation, but a cessation order
subsequently was issued; and
(ii) The violation, penalty, or fee:
(A) Remains unabated or delinquent; and
(B) Is not the subject of a good faith appeal, or of an abatement
plan or payment schedule with which the permittee or other person
responsible is complying to the satisfaction of the responsible agency;
and
(iii) Where the permittee was linked to the violation, penalty, or
fee through ownership or control under the violations review criteria
of the regulatory program at the time the permit was issued, an
ownership or control link between the permittee and the person
responsible for the violation, penalty, or fee still exists, or where
the link has been severed, the permittee continues to be responsible
for the violation, penalty, or fee.
(2) The provisions of Sec. 773.25 of this part shall be applicable
when a regulatory authority determines:
(i) Whether a violation, penalty, or fee existed at the time that
it was cited, remains unabated or delinquent, has been corrected, is in
the process of being corrected, or is the subject of a good faith
appeal, and
(ii) Whether any ownership or control link between the permittee
and the person responsible for the violation, penalty, or fee existed,
still exists, or has been severed.
(c) Remedial measures. (1) A regulatory authority which, under
paragraph (b) of this section, finds that because of an unabated
violation or a delinquent penalty or fee a permit was improvidently
issued shall use one or more of the following remedial measures:
(i) Implement, with the cooperation of the permittee or other
person responsible, and of the responsible agency, a plan for abatement
of the violation or a schedule for payment of the penalty or fee;
(ii) Impose on the permit a condition requiring that in a
reasonable time the permittee or other person responsible abate the
violation or pay the penalty or fee;
(iii) Suspend the permit until the violation is abated or the
penalty or fee is paid; or
(iv) Rescind the permit.
2. If the regulatory authority decides to suspend the permit, it
shall afford at least 30 days' written notice to the permittee. If the
regulatory authority decides to rescind the permit, it shall issue a
notice in accordance with Sec. 773.21 of this part. In either case, the
permittee shall be given the opportunity to request administrative
review of the notice under 43 CFR 4.1370 through 4.1377, where OSM is
the regulatory authority, or under the State program equivalent, where
a State is the regulatory authority. The regulatory authority's
decision shall remain in effect during the pendency of the appeal,
unless temporary relief is granted in accordance with 43 CFR 4.1376 or
the State program equivalent.
9. Section 773.21 is amended by replacing the reference to
``Sec. 773.20(c)(4)'' in the introductory paragraph with
``Sec. 773.20(c)(1)(iv)'' and by revising the introductory language
contained in paragraph (a) to read as follows:
Sec. 773.21 Improvidently issued permits: Rescission procedures.
* * * * *
(a) Automatic suspension and rescission. After a specified period
of time not to exceed 90 days the permit automatically will become
suspended, and not to exceed 90 days thereafter rescinded, unless
within those periods the permittee submits proof, and the regulatory
authority finds, consistent with the provisions of Sec. 773.25 of this
part, that--
* * * * *
10. Section 773.21 is further amended by deleting paragraph (c).
11. Section 773.22 is added as follows:
Sec. 773.22 Verification of ownership or control application
information.
(a) In accordance with Sec. 773.15(c)(1) of this part, prior to the
issuance of a permit, the regulatory authority shall review the
information in the application provided pursuant to Sec. 778.13 of this
chapter to determine that such information, including the
identification of the operator and all owners and controllers of the
operator, is complete and accurate. In making such determination, the
regulatory authority shall compare the information provided in the
application with information from other reasonably available sources,
including--
(1) Manual data sources within the State in which the regulatory
authority exercises jurisdiction, including: (i) The regulatory
authority's inspection and enforcement records and (ii) State
corporation commission or tax records, to the extent they contain
information concerning ownership or control links; and
(2) Automated data sources, including: (i) The regulatory
authority's own computer systems and (ii) the Applicant/Violator
System.
(b) If it appears from the information provided in the application
pursuant to Sec. 778.13(c) through (d) of this chapter that none of the
persons identified in the application has had any previous mining
experience, the regulatory authority shall inquire of the applicant and
investigate whether any person other than those identified in the
application will own or control the operation (as either an operator or
other owner or controller).
(c) If, as a result of the review conducted under paragraphs (a)
and (b) of this section, the regulatory authority identifies any
potential omission, inaccuracy, or inconsistency in the ownership or
control information provided in the application, it shall, prior to
making a final determination with regard to the application, contact
the applicant and require that the matter be resolved through
submission of (1) An amendment to the application or (2) a satisfactory
explanation which includes credible information sufficient to
demonstrate that no actual omission, inaccuracy, or inconsistency
exists. The regulatory authority shall also take action in accordance
with the provisions of Sec. 843.23 of this chapter (or the State
program equivalent), where appropriate.
(d) Upon completion of the review conducted under this section, the
regulatory authority shall promptly enter into or update all ownership
or control information on AVS.
12. Section 773.23 is added as follows:
Sec. 773.23 Review of ownership or control and violation information.
(a) Following the verification of ownership or control information
pursuant to Sec. 773.22(b) of this part, the regulatory authority shall
review all reasonably available information concerning violation
notices and ownership or control links involving the applicant to
determine whether the application can be approved under Sec. 773.15(b)
of this part. Such information shall include--
(1) With respect to ownership or control links involving the
applicant, all information obtained under Secs. 773.22 and 778.13 of
this chapter; and
(2) With respect to violation notices, all information obtained
under Sec. 778.14 of this chapter, information obtained from OSM,
including information shown in the AVS, and information from the
regulatory authority's own records concerning violation notices.
(b) If the review conducted under paragraph (a) of this section
discloses any ownership or control link between the applicant and any
person cited in a violation notice--
(1) The regulatory authority shall so notify the applicant and
shall refer the applicant to the agency with jurisdiction over such
violation notice; and
(2) The regulatory authority shall not approve the application
unless and until it determines, in accordance with the provisions of
Secs. 773.24 and 773.25 of this part (or the State program equivalent),
(i) That all ownership or control links between the applicant and any
person cited in a violation notice are erroneous or have been rebutted,
or (ii) that the violation has been corrected, is in the process of
being corrected, or is the subject of a good faith appeal, within the
meaning of Sec. 773.15(b)(1) of this part (or the State program
equivalent).
(c) Following the regulatory authority's decision on the
application (including unconditional issuance, conditional issuance, or
denial of the permit) or following the applicant's withdrawal of the
application, the regulatory authority shall promptly enter all relevant
information related to such decision or withdrawal into AVS.
13. Section 773.24 is added as follows:
Sec. 773.24 Procedures for challenging ownership or control links
shown in AVS.
(a)(1) Any applicant or other person shown in AVS in an ownership
or control link to any person may challenge such link in accordance
with the provisions of paragraphs (b) through (d) of this section and
Sec. 773.25 of this part, unless such applicant or other person is
bound by a prior administrative or judicial determination concerning
the link.
(2) Any applicant or other person shown in AVS in an ownership or
control link to any person cited in a Federal violation notice may
challenge the status of the violation covered by such notice in
accordance with the provisions of paragraphs (b) through (d) of this
section and Sec. 773.25 of this part, unless such applicant or other
person is bound by a prior administrative or judicial determination
concerning the status of the violation.
(3) Any applicant or other person shown in AVS in an ownership or
control link to any person cited in a State violation notice may
challenge the status of the violation covered by such notice in
accordance with the State program equivalents to paragraphs (b) through
(d) of this section and Sec. 773.25 of this part for the State that
issued the violation notice, unless such applicant or other person is
bound by a prior administrative or judicial determination concerning
the status of the violation.
(b) Any applicant or other person who wishes to challenge an
ownership or control link shown in AVS or the status of a Federal
violation, and who is eligible to do so under the provisions of
paragraphs (a)(1) or (a)(2) of this section, shall submit a written
explanation of the basis for the challenge, along with any relevant
evidentiary materials and supporting documents, to OSM, addressed to
the Chief of the AVS Office, Office of Surface Mining Reclamation and
Enforcement, U.S. Department of the Interior, Washington, D.C. 20240.
(c) OSM shall review any information submitted under paragraph (b)
of this section and shall make a written decision whether or not the
ownership or control link has been shown to be erroneous or has been
rebutted and/or whether the violation covered by the notice remains
outstanding, has been corrected, is in the process of being corrected,
or is the subject of a good faith appeal within the meaning of
Sec. 773.15(b)(1) of this part.
(d)(1) If, as a result of the decision reached under paragraph (c)
of this section, OSM determines that the ownership or control link has
been shown to be erroneous or has been rebutted and/or that the
violation covered by the notice has been corrected, is in the process
of being corrected, or is the subject of a good faith appeal, OSM shall
so notify the applicant or other person and, if an application is
pending, the regulatory authority, and shall correct the information in
AVS.
(2) If, as a result of the decision reached under paragraph (c) of
this section, OSM determines that the ownership or control link has not
been shown to be erroneous and has not been rebutted and that the
violation covered by the notice remains outstanding, OSM shall so
notify the applicant or other person and, if an application is pending,
the regulatory authority, and shall update the information in AVS, if
necessary.
(i) OSM shall serve a copy of the decision on the applicant or
other person by certified mail, or by any means consistent with the
rules governing service of a summons and complaint under Rule 4 of the
Federal Rules of Civil Procedure. Service shall be complete upon tender
of the notice or of the mail and shall not be deemed incomplete because
of a refusal to accept.
(ii) The applicant or other person may appeal OSM's decision to the
Department of the Interior's Office of Hearings and Appeals within 30
days of service of the decision in accordance with 43 CFR 4.1380
through 4.1387. OSM's decision shall remain in effect during the
pendency of the appeal, unless temporary relief is granted in
accordance with 43 CFR 4.1386.
14. Section 773.25 is added as follows:
Sec. 773.25 Standards for challenging ownership or control links and
the status of violations.
(a) The provisions of this section shall apply whenever a person
has and exercises a right, under the provisions of Secs. 773.20,
773.21, 773.23, or 773.24 of this part or under the provisions of part
775 of this chapter, to challenge (1) an ownership or control link to
any person and/or (2) the status of any violation covered by a notice.
(b) Agencies responsible. (1) Except as provided in paragraph
(b)(3) of this section--
(i) The regulatory authority before which an application is pending
shall have responsibility for making decisions with respect to
ownership or control relationships of the application.
(ii) The regulatory authority that issued a permit shall have
responsibility for making decisions with respect to the ownership or
control relationships of the permit.
(iii) The State regulatory authority for the State that issued a
State violation notice shall have responsibility for making decisions
with respect to the ownership or control relationships of the
violation.
(iv) The regulatory agency that issued a violation notice, whether
State or Federal, shall have responsibility for making decisions
concerning the status of the violation covered by such notice, i.e.,
whether the violation remains outstanding, has been corrected, is in
the process of being corrected, or is the subject of a good faith
appeal, within the meaning of Sec. 773.15(b)(1) of this part.
(2) OSM shall have responsibility for making decisions with respect
to the ownership or control relationships of a Federal violation
notice.
(3)(i) With respect to information shown on AVS, the
responsibilities referred to in paragraph (b)(1) of this section shall
be subject to the plenary authority of OSM to review any State
regulatory authority decision regarding an ownership or control link.
(ii) With respect to ownership or control information which has not
been entered into AVS by a State and with respect to information shown
on AVS relating to the status of a violation, State regulatory
authorities' determinations are subject to OSM's program authority
oversight under parts 733, 842, and 843 of this chapter.
(c) Evidentiary standards. (1) In any formal or informal review of
an ownership or control link or of the status of a violation covered by
a violation notice, the responsible agency shall make a prima facie
determination or showing that such link exists, existed during the
relevant period, and/or that the violation covered by such notice
remains outstanding. Once such a prima facie determination or showing
has been made, the person challenging such link or the status of the
violation shall have the burden of proving by a preponderance of the
evidence, with respect to any relevant time period--
(i) That the facts relied upon by the responsible agency to
establish: (A) Ownership or control under the definition of ``owned or
controlled'' or ``owns or controls'' in Sec. 773.5 of this part or (B)
a presumption of ownership or control under the definition of ``owned
or controlled'' or ``owns or controlls'' in Sec. 773.5 of this part, do
not or did not exist;
(ii) That a person subject to a presumption of ownership or control
under the definition of ``owned or controlled'' or ``owns or controls''
in Sec. 773.5 of this part, does not or did not in fact have the
authority directly or indirectly to determine the manner in which
surface coal mining operations are or were conducted, or
(iii) That the violation covered by the violation notice did not
exist, has been corrected, is in the process of being corrected, or is
the subject of a good faith appeal within the meaning of
Sec. 773.15(b)(1) of this part; provided that the existence of the
violation at the time it was cited may not be challenged under the
provisions Sec. 773.24 of this part: (A) By a permittee, unless such
challenge is made by the permittee within the context of Secs. 773.20
through 773.21 of this part; (B) by any person who had a prior
opportunity to challenge the violation notice and who failed to do so
in a timely manner; or (C) by any person who is bound by a prior
administrative or judicial determination concerning the existence of
the violation.
(2) In meeting the burden of proof set forth in paragraph (c)(1) of
this section, the person challenging the ownership or control link or
the status of the violation shall present probative, reliable, and
substantial evidence and any supporting explanatory materials, which
may include--
(i) Before the responsible agency--
(A) Affidavits setting forth specific facts concerning the scope of
responsibility of the various owners or controllers of an applicant,
permittee, or any person cited in a violation notice; the duties
actually performed by such owners or controllers; the beginning and
ending dates of such owners' or controllers' affiliation with the
applicant, permittee, or person cited in a violation notice; and the
nature and details of any transaction creating or severing an ownership
or control link; or specific facts concerning the status of the
violation;
(B) If certified, copies of corporate minutes, stock ledgers,
contracts, purchase and sale agreements, leases, correspondence, or
other relevant company records;
(C) If certified, copies of documents filed with or issued by any
State, Municipal, or Federal governmental agency.
(D) An opinion of counsel, when supported by (1) Evidentiary
materials; (2) a statement by counsel that he or she is qualified to
render the opinion; and (3) a statement that counsel has personally and
diligently investigated the facts of the matter or, where counsel has
not so investigated the facts, a statement that such opinion is based
upon information which has been supplied to counsel and which is
assumed to be true.
(ii) Before any administrative or judicial tribunal reviewing the
decision of the responsible agency, any evidence admissible under the
rules of such tribunal.
(d) Following any determination by a State regulatory authority or
other State agency, or any decision by an administrative or judicial
tribunal reviewing such determination, the State regulatory authority
shall review the information in AVS to determine if it is consistent
with the determination or decision. If it is not, the State regulatory
authority shall promptly inform OSM and request that the AVS
information be revised to reflect the determination or decision.
PART 778--PERMIT APPLICATIONS--MINIMUM REQUIREMENTS FOR LEGAL,
FINANCIAL, COMPLIANCE, AND RELATED INFORMATION
15. The authority citation for part 778 continues to read as
follows:
Authority: Public Law 95-87, 30 U.S.C. 1201 et seq., and Public
Law 100-34.
16. Section 778.14 is amended by revising the introductory language
in paragraph (c) to read as follows:
Sec. 778.14 Violation information.
* * * * *
(c) A list of all violation notices received by the applicant
during the three-year period preceding the application date, and a list
of all outstanding violation notices received prior to the date of the
application by any surface coal mining operation that is deemed or
presumed to be owned or controlled by either the applicant or any
person who is deemed or presumed to own or control the applicant under
the definition of ``owned or controlled'' and ``owns or controls'' in
Sec. 773.5 of this chapter. For each notice of violation issued
pursuant to Sec. 843.12 of this chapter or under a Federal or State
program for which the abatement period has not expired, the applicant
shall certify that such notice of violation is in the process of being
corrected to the satisfaction of the agency with jurisdiction over the
violation. For each violation notice reported, the list shall include
the following information, as applicable:
* * * * *
PART 840--STATE REGULATORY AUTHORITY: INSPECTION AND ENFORCEMENT
17. The authority citation for Part 840 continues to read as
follows:
Authority: Public Law 95-87, 30 U.S.C. 1201 et seq., and Public
Law 100-34, unless otherwise noted.
18. Section 840.13 is amended by revising paragraph (b) to read as
follows:
Sec. 840.13 Enforcement authority.
* * * * *
(b) The enforcement provisions of each State program shall contain
sanctions which are no less stringent than those set forth in section
521 of the Act and shall be consistent with Secs. 843.11, 843.12,
843.13, and 843.23 and subchapters G and J of this chapter.
PART 843--FEDERAL ENFORCEMENT
19. and 20. The authority citation for part 843 continues to read
as follows:
Authority: 30 U.S.C. 1201 et seq., as amended; and Pub. L. 100-
34.
Sec. 843.10 [Removed]
21. Section 843.10 is removed.
22. Section 843.24 is added as follows:
Sec. 843.24 Oversight of State permitting decisions with respect to
ownership or control or the status of violations.
(a) The Office shall take action pursuant to paragraphs (b) and (c)
of this section whenever it determines, through its oversight of the
implementation of State programs, that a State has issued a permit
without complying with the State program equivalents of Secs. 773.22,
773.23, 773.24, 773.25, and 843.23 of this chapter.
(b) If, as a result of its determination that a State has failed to
comply with the provisions set forth in paragraph (a) of this section,
the Office has reason to believe that the State has issued a permit
improvidently within the meaning of Sec. 773.20 of this chapter, the
Office shall initiate action under the provisions of Sec. 843.21 of
this part.
(c) If the Office determines that a State's failure to comply with
the State program equivalents of Secs. 773.22, 773.23, 773.24, 773.25,
and 843.23 of this chapter was knowing, it shall initiate action under
Secs. 735.21 or 886.18 (as allowed by law) and/or Sec. 733.12(b) of
this chapter, unless the State's action was the result of a mandatory
injunction of a court of competent jurisdiction.
[FR Doc. 94-26554 Filed 10-27-94; 8:45 am]
BILLING CODE 4310-05-M
