99-3556. Abandoned Mine Land (AML) Reclamation Program; Enhancing AML Reclamation  

  • [Federal Register Volume 64, Number 29 (Friday, February 12, 1999)]
    [Rules and Regulations]
    [Pages 7470-7483]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-3556]
    
    
    
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    Part XI
    
    
    
    
    
    Department of the Interior
    
    
    
    
    
    _______________________________________________________________________
    
    
    
    Office of Surface Mining Reclamation and Enforcement
    
    
    
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    30 CFR Parts 707 and 874
    
    
    
    Abandoned Mine Land (AML) Reclamation Program; Enhancing AML 
    Reclamation; Final Rule
    
    Federal Register / Vol. 64, No. 29 / Friday, February 12, 1999 / 
    Rules and Regulations
    
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    DEPARTMENT OF THE INTERIOR
    
    Office of Surface Mining Reclamation and Enforcement
    
    30 CFR Parts 707 and 874
    
    RIN: 1029-AB89
    
    
    Abandoned Mine Land (AML) Reclamation Program; Enhancing AML 
    Reclamation
    
    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) 
    is amending its rules concerning the financing of Abandoned Mine Land 
    reclamation (AML) projects that involve the incidental extraction of 
    coal. Projections of receipts to the AML fund through the year 2004, 
    when the authority to collect fees will expire, strongly indicate that 
    there will be insufficient money to address all problems currently 
    listed in the Abandoned Mine Land Inventory System. Given these limited 
    AML reclamation resources, OSM is establishing an innovative way for 
    AML agencies, working with contractors, to maximize available funds to 
    increase AML reclamation.
        The first revision amends the definition of ``government-financed 
    construction'' to allow less than 50 percent government funding when 
    the construction is an approved AML project under the Surface Mining 
    Control and Reclamation Act of 1977 (SMCRA or ``the Act''). The second 
    revision adds a new section which requires specific consultations and 
    concurrences with the Title V regulatory authority for AML construction 
    projects receiving less than 50 percent government financing. These 
    consultations and concurrences are intended to ensure the 
    appropriateness of the project being undertaken as a Title IV AML 
    project and not under the Title V regulatory program.
    
    DATES: Effective March 15, 1999.
    
    FOR FURTHER INFORMATION CONTACT: D. J. Growitz, Office of Surface 
    Mining Reclamation and Enforcement, U.S. Department of the Interior, 
    1951 Constitution Avenue, NW, Washington, D.C. 20240; Telephone: 202-
    208-2634. E-Mail: dgrowitz@osmre.gov.
    
    SUPPLEMENTARY INFORMATION:
    
    I. Background
    
        A. What is the Abandoned Mine Land (AML) reclamation program?
        B. How is AML reclamation funded and how do States and Indian 
    Tribes implement their programs?
        C. What types of abandoned sites does this rule target?
        D. How will the final rule work?
        E. What is the relationship between the AML agency and the AML 
    contractor?
        F. What is an example of how the final rule will reduce the 
    government's share of reclamation costs under Title IV?
        G. Can private organizations (e.g., watershed groups) assist in 
    AML reclamation efforts?
        H. Will the final rule adversely affect AML reclamation at some 
    sites?
        I. How will an AML agency approve reclamation projects under the 
    final rule?
        J. What will be the consequence of AML contractors removing coal 
    outside the limits authorized by the AML project?
        K. The proposed rulemaking.
    
    II. Response to Comments and Final Rule
    
        A. What is the statutory authority for the final rule?
        B. What is the amended definition of ``government-financed 
    construction'' at section 707.5?
        C. What is the change in information collection for section 
    707.10?
        D. What are the information collection requirements for section 
    874.10?
        E. What is the purpose behind new section 874.17: ``AML agency 
    procedures for reclamation projects receiving less than 50 percent 
    government funding?'
        F. How will the consultation in section 874.17(a) work?
        G. What types of concurrences between the AML agency and the 
    regulatory authority will be required in section 874.17(b)?
        H. Under section 874.17(c), how will the AML agency document the 
    results of the consultation and the concurrences with the Title V 
    regulatory authority?
        I. What special requirements will apply for qualifying section 
    874.17(d) reclamation projects?
        J. What must the contractor do under final section 874.17(e) if 
    extracting coal beyond the limits of the incidental coal specified 
    in section 874.17(b)?
        K. How does this rulemaking relate to the established AML 
    priority system for selecting projects?
        L. Is this rulemaking really more about remining than AML 
    reclamation?
        M. Other comments.
    
    III. Procedural Determinations
    
    I. Background
    
    A. What is the Abandoned Mine Land (AML) Reclamation Program?
    
        Title IV of SMCRA established the AML Reclamation Program in 
    response to concern about extensive environmental damage caused by past 
    coal mining activities. The program is funded primarily from a fee 
    collected on each ton of coal mined in the country. This fee is 
    deposited into a special fund, the Abandoned Mine Land Fund (Fund), and 
    is appropriated annually to address abandoned and inadequately 
    reclaimed mining areas where there is no continuing reclamation 
    responsibility by any person under State or Federal law. Under Title 
    IV, the funding of reclamation projects is subject to a priority 
    schedule with emphasis on sites affecting public health, safety, 
    general welfare and property. In contrast, Title V establishes a 
    program for regulating active mining and reclamation.
        In most cases, the implementation of both Title IV and Title V 
    authority has been delegated to States. Depending upon each State's 
    internal organizational structure, the Title IV and Title V programs 
    are, in many cases, carried out by separate State authorities. 
    Currently, 23 States and 3 Indian Tribes (the Hopi, the Navajo and the 
    Crow) have authority to receive grants from the Fund and are 
    implementing Title IV reclamation programs in accordance with 30 CFR 
    Subchapter R, and through implementing guidelines published in the 
    Federal Register on March 6, 1980 (45 FR 27123), and revised on 
    December 30, 1996 (45 FR 68777). In States and on Indian lands that do 
    not have a Title IV program, reclamation is carried out by OSM.
    
    B. How is AML Reclamation Funded and How Do States and Indian Tribes 
    Implement Their Programs?
    
        State and Indian Tribal AML programs are funded at 100 percent by 
    OSM from money appropriated annually from the AML Fund. The States and 
    Indian Tribes must submit grant applications in accordance with 
    procedures established by OSM and existing grant regulations found at 
    30 CFR 886. They must certify with each grant that the requirements of 
    all applicable laws and regulations are met, including the Clean Water 
    Act, the Clean Air Act, the National Historic Preservation Act, and the 
    Endangered Species Act. They may undertake only projects that are 
    eligible for funding as described in either Section 404 or Section 411 
    of SMCRA and which meet the priorities established in Section 403 of 
    SMCRA. OSM requires that the State Attorney General or other chief 
    legal officer certify that each reclamation project to be undertaken is 
    an eligible site.
        Certain environmental, fiscal, administrative and legal 
    requirements must be in place in order for a program to receive grants 
    for reclamation. An extensive description of these requirements can be 
    found at 30 CFR 884, but certain of those are mentioned here to 
    highlight safeguards the AML program has in place. For example, the 
    agency must have written policies and procedures which outline how it 
    will comply with the requirements of
    
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    SMCRA and implementing regulations in conducting a reclamation program, 
    how it will comply with all applicable Federal and State laws and 
    regulations, how projects will be ranked for reclamation priority and 
    how the public will be given an opportunity to comment on proposed 
    reclamation projects. The State or Indian Tribe chooses individual 
    projects based upon the selection criteria in its reclamation program. 
    While these criteria differ among AML programs, all consider the 
    priority of the problem, public opinion regarding the project, cost 
    effectiveness, technical feasibility and how the area will be used once 
    reclaimed.
        State and Tribal programs seek public input in several ways. For 
    example, some AML programs require that a notice requesting comments on 
    proposed reclamation be published in newspapers of general circulation 
    in the area to be reclaimed. Some publish newspaper notices asking the 
    public to identify potential reclamation sites. Others have public 
    meetings to discuss upcoming reclamation or to identify potential 
    sites. Still other programs seek public input about reclamation 
    activities or potential sites through Federal Register notices.
        OSM does not approve individual projects. However, before 
    construction begins on any project, OSM must ensure that all 
    requirements of the National Environmental Policy Act of 1969 are met 
    before providing authorization to proceed on the project.
        OSM annually reviews the State and Tribal AML programs to ensure 
    that all program requirements are properly met, including site 
    eligibility, proper financial policies and procedures, and reclamation 
    accomplishments. State and Tribal agencies and OSM also review 
    completed projects to determine the success of AML reclamation. 
    Completed projects may be revisited as part of a site-specific 
    contract, as part of an annual post-construction evaluation, or as 
    otherwise specified under the State or Tribal AML reclamation program's 
    maintenance plan. Further, AML reclamation programs evaluate selected, 
    completed AML reclamation projects to determine how effective the 
    overall reclamation program has been. Normally, these evaluations are 
    annual, random samples of many types of reclamation, such as reclaimed 
    subsidence areas, eliminated landslides, sealed openings and removed 
    refuse piles.
    
    C. What Types of Abandoned Sites Does This Rule Target?
    
        The rule is intended to facilitate the reclamation of certain 
    abandoned mine lands that have little likelihood of otherwise being 
    reclaimed under either the current Title IV or Title V programs. These 
    sites would not likely be reclaimed under the Title IV program because 
    of severely limited funds; nor would they likely be mined under the 
    Title V regulatory program due to the marginal coal reserves they 
    contain and/or the potential risk for long-term liability associated 
    with existing acid mine drainage (AMD) or other environmental problems.
        According to estimates in the Abandoned Mine Land Inventory System, 
    the most serious AML problems--those identified as Priority 1 or 
    Priority 2 sites in the System--would cost more than 2.6 billion 
    dollars to reclaim. These include highwalls, open shafts and accessible 
    underground mines presenting a danger to human health, safety and 
    welfare.
        Thousands of other AML-eligible sites--Priority 3 sites that do not 
    pose the same degree of danger to the public but that do adversely 
    affect the environment--would cost tens of billions more dollars to 
    correct. Without an innovative way to finance more reclamation, there 
    is very little likelihood that enough AML money would ever be available 
    to fund the reclamation of even the most serious of these eligible 
    sites, let alone the eligible sites with primarily environmental 
    impacts. Without adequate funding, exposed coal seams and subsided 
    underground workings would continue to contribute acid mine drainage 
    (AMD) and other environmental problems, often far beyond their realty 
    boundaries. Interconnected abandoned mine passageways flooded with poor 
    quality water would continue to discharge the characteristic ``yellow-
    boy'' iron precipitates and low pH waters into streams. Coal refuse 
    piles would continue to yield excessive sediment and acid discharges 
    into local water supplies killing fish, endangering wildlife and 
    rendering streams useless for recreation.
        The challenge which OSM attempts to address with this rule is how 
    to accomplish reclamation at mines that the AML fund cannot afford to 
    reclaim and that the private sector is not interested in remining. The 
    answer for these sites lies in increasing the amount of reclamation 
    without increasing the cost to the AML Fund.
    
    D. How Will the Final Rule Work?
    
        The current rules at 30 CFR 707.1 and 707.5 provide for a Title V 
    exemption for the extraction of coal which is an incidental part of a 
    government-financed construction. ``Government-financed construction'' 
    requires that the project be funded 50 percent or more by funds 
    appropriated from the government financing agency's budget or obtained 
    from general revenue bonds. AML guidelines first published in the 
    Federal Register on March 6, 1980 (45 FR 14810) and later amended on 
    December 30, 1996 (61 FR 68777) provide for the sale of coal recovered 
    incidental to an approved AML reclamation project. The 50 percent 
    government-financing requirement of section 707.5 has not affected 
    agency selection of AML construction projects where the anticipated 
    proceeds from the sale of incidental coal were expected to be a small 
    percentage of the total project cost. However, in cases where the 
    anticipated proceeds from the sale of incidental coal were expected to 
    be 50 percent or greater of the total project cost--a level that would 
    have reduced the government contribution below the required 50 percent 
    floor--this funding requirement discouraged AML reclamation.
        For sites with substantial deposits of incidental coal, we expect 
    that AML contractors will reflect the anticipated sale of such coal 
    through a lowered project bid price. The lowered project bid price 
    would, in turn, reduce the government's share of the total cost of the 
    project. As a result, less public funding will be required for these 
    sites to accomplish the same level of AML reclamation. By reducing the 
    government's share of the cost of reclamation, AML money becomes 
    available for other AML reclamation projects that would otherwise not 
    be funded. Under this new rule, the contractor makes a profit, the 
    government saves money and--most important of all--additional abandoned 
    sites that we could not afford to reclaim in the past are reclaimed.
        The key limitation in the application of this rule is that the coal 
    removed and sold must be ``incidental'' to the reclamation project--
    physically necessary to remove in order to address the identified 
    health, safety or environmental problem of the approved AML 
    construction project. This concept conforms to existing regulations at 
    30 CFR 707.5. Coal extracted beyond that which is determined to be 
    incidental will be subject to Title V permitting provisions.
        This rule is not designed to address sites involving redisturbance 
    and subsequent reclamation of abandoned mine lands, such as highwalls 
    and outslopes that have become environmentally stable over the years 
    and no longer pose problems. Rather, we hope to target long-standing 
    AML
    
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    health, safety and environmental problems by the partial or complete 
    removal of coal during AML reclamation projects. Such projects have the 
    potential to remediate subsidence, to reduce the likelihood of 
    perpetual acid discharge problems that are costly to treat through 
    conventional chemical means, and, in some cases, to permanently 
    eliminate AMD by removing the source of the problem.
        This final rule will not alter existing AML program requirements. 
    The eligibility for AML projects, the procurement systems which States 
    and Indian Tribes use to contract for AML reclamation, and all Federal 
    and State requirements that pertain to AML projects will remain the 
    same. Undertaking AML projects that use less than 50 percent 
    government-financing will not be mandatory for States or Indian Tribes; 
    they may choose not to participate in this aspect of AML reclamation. 
    However, State and tribal programs that do participate will be 
    responsible to ensure that the provisions of this rule are applied 
    appropriately and not abused.
    
    E. What is the Relationship Between the AML Agency and the AML 
    Contractor?
    
        The relationship between the AML agency and the AML contractor 
    under the final rule will be the same as for any approved reclamation 
    project. Actual reclamation is usually done under a site-specific 
    contract between the reclamation agency and third-party contractors. 
    These contracts clearly outline the scope of work for each project, the 
    cost, the time frames involved, how the contractor will be paid and 
    penalties for failure to meet the contractual obligations by either 
    party. The content of the contracts, along with bidding and selection 
    procedures, performance bonding requirements and other contractual 
    matters are established within each program in accordance with State or 
    Tribal laws. The AML agency ensures that the contractor complies with 
    applicable procedures through site visits and other monitoring 
    techniques. If the contractor does not meet the terms of the contract, 
    the AML agency invokes the penalties contained in the contract and 
    allowed by law.
        Each contract sets forth any unique features for the project to be 
    reclaimed and any site-specific criteria for that project. For example, 
    a project to address water quality problems will outline the acceptable 
    pH or sediment levels for the water or sediment, the monitoring period 
    associated with the treatment, whether wetlands will be created, any 
    projected effects on wildlife and any particular environmental impacts 
    at the site or on adjacent properties. Sediment and water quality 
    control plans must provide for adequate environmental protection during 
    the construction phase of the reclamation project as well as after its 
    completion.
        When contracts are written, the AML reclamation agency can require 
    that a project pass specific requirements after reclamation. For 
    example, a contract could specify that a retaining wall provide 
    protection for a highway for a three-year period. The contract could 
    also specify that, should the retaining wall fail, the contractor must 
    return to repair the damage. The frequency and extent of follow-up by 
    the AML reclamation agency is written into the contract. AML contracts 
    also identify the incidental coal that can be extracted under the 
    project.
    
    F. What Is an Example of How the Final Rule Will Reduce the 
    Government's Share of Reclamation Costs Under Title IV?
    
        The following example illustrates the process by which extraction 
    of incidental coal under this rule can reduce the cost to the 
    government for Title IV reclamation at an AML eligible site.
    
        Example: After the requisite consultation and concurrences with 
    the Title V regulatory authority (see response to question E. in 
    Section I of this preamble: ``What is the relationship between the 
    AML agency and the AML contractor?''), the AML agency announces a 
    contract solicitation to receive bids for the reclamation of a 
    refuse pile contributing sediment and acid mine drainage to local 
    streams. Prior to the solicitation, the AML agency estimates the 
    total cost of reclaiming the refuse pile (removing it to another 
    site, burying it, and revegetating both sites) at $500,000. This 
    figure includes a $50,000 allowance for administrative expenses such 
    as project design and project monitoring.
        Based on existing chemical analysis of the refuse pile, 
    including BTU information, AML estimates place the net proceeds of 
    the incidental coal in the refuse pile (after transportation, 
    cleaning, royalty costs, etc.) at roughly $400,000. The estimated 
    net cost for completing the project would then be $100,000 
    ($500,000--$400,000). Based on these estimates, project bids from 
    contractors would be expected to come in around the $100,000 range.
        Therefore, reclamation of a project that would ordinarily cost 
    the AML agency $500,000 without contractor sale of incidental coal, 
    or that would cost the agency at least $250,000 under the existing 
    rule requiring at least 50 percent government financing, will now 
    cost only about $100,000 under this new rule. If the contract is 
    awarded, the contractor becomes fully responsible for the completion 
    of the work regardless of the contractor's actual proceeds on the 
    sale of incidental coal.
    
    G. Can Private Organizations (e.g., Watershed Groups) Assist in AML 
    Reclamation Efforts?
    
        Yes. AML agencies can form partnerships with industry, private 
    citizens and other government agencies to help address AML problems. 
    Partnerships, such as those developed under the Clean Streams 
    Initiative--a partnership of Federal, State and local government as 
    well as other public and private interests--can assist in reclaiming 
    lands. Outside funds can also be contributed for specific AML projects 
    as allowed by law.
    
    H. Will the Final Rule Adversely Affect AML Reclamation at Some Sites?
    
        No. Under the AML program, the percentage of government funding for 
    reclamation of an eligible site does not adversely impact the quality 
    of the reclamation of that site. As with any other AML reclamation 
    project, under this final rule the AML agency selects individual sites 
    from the Abandoned Mine Land Inventory using its priority system. The 
    AML agency then develops the reclamation parameters for that site and 
    includes them in its reclamation contract. We emphasize that the AML 
    agency, not the AML contractor or the owner of the coal, establishes 
    these parameters. The AML agency oversees the reclamation and ensures 
    that the contractor adheres to the contract requirements, including 
    removing and selling only that coal which has been identified as 
    incidental.
    
    I. How Will an AML Agency Approve Reclamation Projects Under the Final 
    Rule?
    
        As with any other AML project, reclamation projects involving the 
    incidental extraction of coal and reduced government funding levels 
    will have to meet the requirements specified in 30 CFR Subchapter R. 
    The AML agency controls every project specification from design, to 
    bidding, to final reclamation completion. The selection of reclamation 
    sites by the AML agency is based on the need to protect the public 
    health and safety and/or the environment from the adverse effects of 
    past mining activities. A particular site can be selected only after 
    the AML agency determines that private industry would be unable or 
    unwilling to remine and reclaim the site as a Title V operation, and 
    the State Attorney General or other legal officer certifies that the 
    project meets the eligibility requirements specified in State or Indian 
    Tribe counterparts to Title IV.
        OSM is expressly prescribing certain procedures to ensure that the 
    provisions
    
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    of this final rule are implemented appropriately. First, the AML 
    agency, in consultation with the Title V regulatory authority, 
    determines whether the site is appropriate for AML reclamation 
    activities based on the likelihood of extracting the coal under a Title 
    V permit. Second, the Title V regulatory authority and the Title IV AML 
    agency have to concur on the boundaries of the AML project and on the 
    identification of incidental coal--that which is physically necessary 
    to remove to accomplish the approved reclamation.
    
    J. What Will be the Consequence of AML Contractors Removing Coal 
    Outside the Limits Authorized by the AML Project?
    
        AML contractors removing coal outside the limits authorized by the 
    AML project will be subject to contract remedies as deemed appropriate 
    by the AML agency. These can include termination of AML contracts, 
    forfeiture of any performance and reclamation bonds, or other remedies 
    provided by law for breach of contract. The AML agency will further be 
    expected to notify the Title V regulatory authority when any 
    unauthorized coal is removed.
        Sometimes there is unintended and extremely limited removal of coal 
    beyond that which has been determined to be incidental to the project 
    that may not justify termination of the AML contract or bond 
    forfeiture. Further, when the amount of unauthorized coal removal is 
    less than 250 tons, the operation may be exempt from Title V permitting 
    requirements under 30 CFR 700.11(a)(2). We rely on the experience and 
    judgment of AML authorities, in consultation with Title V regulatory 
    authorities, as appropriate, to determine when a contractor has 
    exceeded the allowable limits for removal and sale of coal at an AML 
    project. The consequences of removing coal located outside the project 
    limits is discussed further at Section II of this preamble in the 
    response to question J: ``What must the contractor do under final 
    section 874.17(e) if extracting coal beyond the limits of the 
    incidental coal specified in section 874.17(b)?''
    
    K. The Proposed Rulemaking
    
        After substantial public outreach, OSM proposed rules on June 25, 
    1998 (63 FR 34768) with a 30-day comment period. The comment period was 
    reopened and extended on July 31, 1998 (63 FR 40871) until August 11, 
    1998, and reopened and extended again on September 3, 1998 (63 FR 
    46951) until September 18, 1998. No public meetings or hearings were 
    requested or held. OSM proposed to revise the definition of 
    ``government-financed construction'' at section 707.5 and add a new 
    section 874.17 detailing procedures for AML construction projects 
    initiated under the scope of the new definition.
        OSM received comments in response to the proposed rule from 21 
    commenters representing industry, State regulatory authorities, Federal 
    agencies, and environmental groups. OSM has reviewed each comment 
    carefully and has considered the commenters' suggestions and remarks in 
    preparing this final rule.
    
    II. Response to Comments and Final Rule
    
        The great majority of commenters generally supported the proposed 
    rule. Twelve commenters supported the proposal in whole or in part. Six 
    commented without supporting or opposing the proposed rule. And, three 
    objected to the proposed rule. The wide-ranging comment support 
    included such reasons as: the rule represents a sensible approach to 
    achieving greater AML reclamation at a lower cost; the rule would 
    permit greater flexibility needed to address reclamation problems that 
    are not being addressed under current rules; the rule would bring to 
    bear additional resources to remedy the effects of past mining, 
    including the numerous acid mine drainage problems occurring 
    nationwide; the rule would provide adequate safeguards, including sound 
    environmental protection safeguards, to ensure that it is applied only 
    in appropriate circumstances; and the rule would encourage on-the-
    ground reclamation improvements at many AML eligible sites that 
    otherwise would not occur due to limited AML funding and the absence of 
    sufficient incentives to remine and reclaim such sites as Title V 
    regulated operations.
        The three commenters objecting to the proposed rule asserted that 
    it was an incentive for remining--a process that involves Title V 
    regulated coal mining at previously mined sites where the original 
    operations left some coal in the ground, on the surface or in coal mine 
    waste piles. Our response to this assertion can be found in the answer 
    to question L. in Section II of this preamble: ``Is this rulemaking 
    really more about remining than AML reclamation?''
    
    A. What is the Statutory Authority for the Final Rule?
    
        Three sections in SMCRA outline the eligibility requirements for 
    sites being considered for funding under the AML program. They are 
    sections 404, 402(g)(4)(B)(I), and 402(g)(4)(B)(ii). Section 403 of 
    SMCRA establishes priorities for expenditures from the AML Fund on 
    eligible sites. An eligible site must then meet one of the five 
    priorities of Section 403(a)(1)-(5) in order to be funded.
        Section 413(a) of SMCRA provides the Secretary with the ``power and 
    the authority, if not granted it otherwise, to engage in any work and 
    to do all things necessary or expedient, including the promulgation of 
    rules and regulations, to implement and administer the provisions of 
    this [Title IV].'' This final rule change is narrowly limited in its 
    application to the AML program and is necessary and expedient for OSM 
    and the States and Tribes to more efficiently and effectively carry out 
    the reclamation mandate established by Congress. This statutory 
    authority allows OSM to propose revisions to the AML program that will 
    provide States and Tribes the authority to reduce project costs to the 
    maximum extent practical on abandoned mine sites which have deposits of 
    coal or coal refuse remaining. Thus, the final rule will allow for more 
    program-wide reclamation for the same level of program funding.
        In addition, Congress specifically provided under Section 528(2) 
    that SMCRA would not apply to activities involving the ``extraction of 
    coal as an incidental part of Federal, State or local government-
    financed highway or other construction under regulations established by 
    the regulatory authority.'' Thus, Title V permitting requirements do 
    not apply to areas from which coal is extracted as an incidental part 
    of a government-financed construction operation. Because AML 
    reclamation projects are government-financed, they qualify as 
    government-financed construction under Section 528(2).
        Each of the three opposing commenters challenged the legal 
    authority promulgating this rule. The first stated that the 
    congressional intent behind the Section 528(2) exemption was to 
    facilitate public works projects, including highway construction, 
    rather than projects authorized under Title IV. The second commenter 
    did not categorically exclude AML projects from the ambit of the 
    Section 528 exemption, but maintained that the elimination of the 50 
    percent funding requirement opened the exemption to ``all 
    construction'' in contravention to the intent of Congress (citing H.R. 
    Rep., No. 95-492, at 112 (1977)). The third commenter stated, without 
    support, his conclusion that OSM lacked legal authority for its rule.
        In response to these commenters, OSM notes that the plain language 
    of Section 528(2) exempts the ``extraction of coal incidental to * * * 
    government-
    
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    financed highway or other construction * * * .'' While the legislative 
    history of this exemption does not indicate what ``other [government-
    financed] construction'' Congress intended to exempt, the legislative 
    history is clear that Congress did not intend to exempt the broad brush 
    of private construction, i.e., the ``all construction'' referenced by 
    the second commenter. (See proposed rules, 43 FR 14672, September 18, 
    1978; citing to H.R. Conf. Rep. No. 95-493, at 112 (1977)). As the 
    legislative history of Section 528(2) indicates, Congress patterned the 
    exemption in some ways after the Pennsylvania Highway Law and was very 
    much concerned with ensuring appropriate government reclamation of 
    affected areas. (43 FR 14672, September 18, 1978; citing to H.R. 5988, 
    93d Cong. Sec. 203 (1973); 119 Cong. Rec. 1368 (January 18, 1973, 
    discussing Sec. 203 of H.R. 5988)).
        Approved AML construction projects are consistent with the 
    constituent elements of the Section 528(2) exemption for the extraction 
    of coal incidental to government-financed ``other'' construction. These 
    AML projects are ``government-financed'' and, from start to finish, 
    government-initiated, government-approved, and government-monitored. 
    The only coal that can be extracted by these projects is that which is 
    incidental to the reclamation of the site and delineated in the AML 
    contract. In this regard, AML construction projects are not unlike 
    other government-financed construction, such as that of airports and 
    schools, for which the ``other construction'' exemption provision of 
    Section 528 has been recognized to apply. Even more than in airport and 
    school construction, the preeminent reclamation purpose of AML 
    construction projects satisfies congressional intent that exempted 
    government-financed construction projects address the reclamation 
    concerns of affected areas.
        As early as 1980, the Secretary formally recognized the 
    applicability of the Section 528(2) exemption to the incidental 
    recovery of coal in conjunction with AML projects. (AML Guidelines, 
    Item B. 5., 45 FR 14810, March 6, 1980). Therefore, while the 
    application of the Section 528(2) exemption to AML construction 
    projects may not have been specifically envisioned by Congress twenty 
    years ago, such application is reasonable and consistent with what we 
    know from the legislative history of Congress' intent to exempt 
    ``other'' government-financed construction from the provisions of the 
    Act.
    
    B. What is the Amended Definition of ``Government-financed 
    Construction'' at Section 707.5?
    
        OSM proposed to amend the definition of ``government-financed 
    construction'' in section 707.5 of the permanent program regulations to 
    allow less than 50 percent government funding from OSM or other AML 
    agencies for construction undertaken as an approved AML reclamation 
    project under Title IV of the Act when the reclamation involves the 
    incidental extraction of coal. A government agency includes a State or 
    Indian Tribe with an approved Title IV program under the definition of 
    agency found at 30 CFR 870.5. For those States and Indian Tribes that 
    do not have approved Title IV programs, a government agency means OSM 
    or its designated State agent.
        AML reclamation projects are funded from several sources, including 
    private individuals who donate time and money, environmental groups, 
    utilities, industry and the government through the Title IV program. 
    Under the previous definition of ``government-financed construction,'' 
    the government's financial share of the AML reclamation had to be at 
    least 50 percent of the total project cost. By reducing the required 
    government share for these AML projects, we anticipate that the final 
    rule will free up AML money to do reclamation that otherwise might 
    never be accomplished.
        One commenter opposed the provisions of the proposed rule which 
    would allow less than 50 percent government funding when the 
    construction is an approved AML reclamation project. That commenter 
    cited the preamble to the 1978 rule, which originally proposed the 50 
    percent funding requirement, to support the claim that the funding 
    requirement serves to ``exempt only those projects in which the 
    government has a significant government interest.'' (Emphasis added by 
    commenter.) (43 FR 41672-3, September 18, 1978). The commenter also 
    viewed the funding requirement as fulfilling Congress' intent to limit 
    carefully and narrowly the scope of the Section 528(2) exemption.
        However, in the preamble to the 1979 final rule, OSM acknowledged 
    that it had considered alternatives to lowering the 50 percent funding 
    requirement. In that preamble, OSM stated that little rationale had 
    been received in support of a lower percentage and that the only 
    example which had been given of a public benefit from such lowering was 
    a donated haul road. In that same preamble discussion, OSM indicated 
    that it believed there would be few instances in which the 50 percent 
    funding requirement would discourage construction that otherwise would 
    comply with a lower percentage. (44 FR 14949, March 13, 1979).
        Now, some twenty years later, we fully support eliminating the 50 
    percent funding requirement for approved AML projects. Our rationale 
    is, to a large degree, based upon the unique governmental character and 
    protections associated with approved AML construction projects and the 
    substantial public benefit reasonably expected from the reclamation of 
    a considerable number of AML sites which would not otherwise be 
    reclaimed because of the prior 50 percent standard.
        See the response to question B. in Section II of this preamble for 
    a discussion of OSM's statutory authority for eliminating the funding 
    requirement for approved AML projects. As amended, the section 707.5 
    definition for ``government-financed construction'' will continue to 
    narrowly limit the scope of the exemption in a manner which we believe 
    is consistent with the congressional intent of Section 528 of SMCRA, 
    the overall structure of SMCRA, and its goal of promoting the 
    reclamation of previously mined eligible areas.
        Another commenter asked OSM to consider revising the proposed 
    definition in section 707.5 in a manner that would recognize that any 
    AML project which involves the incidental removal of coal is 
    government-funded construction, regardless of funding level and 
    technique. The commenter was concerned that in-kind payments such as 
    administrative expenses incurred by the AML agency in reviewing and 
    approving the project may not qualify as government funding and thus 
    preclude projects where there was no direct funding by the AML agency.
        OSM assures the commenter that all expenses incurred directly or 
    indirectly by the AML agency, such as project design, project 
    solicitation and project management and project oversight qualify as 
    government funding under the section 707.5 definition based on long-
    standing grants practice in the AML program. In light of this, OSM does 
    not believe there is a need to revise the proposed definition. The 
    definition of ``government-financed construction'' at section 707.5 is 
    adopted as proposed.
    
    C. What Is the Change in Information Collection for Section 707.10?
    
        OSM is revising section 707.10 which contains the information 
    collection requirements for Part 707. The revision changes the prior 
    justification for Part
    
    [[Page 7475]]
    
    707's exemption from the requirements of the Paperwork Reduction Act 
    (44 U.S.C. 3501 et seq.). The revised basis for this exemption is that 
    the information required to be maintained in section 707.12 consists 
    only of information that would be provided by persons in the normal 
    course of their business activities. No comments were received on 
    section 707.10, ``Information collection,'' and it is adopted as 
    proposed.
    
    D. What Are the Information Collection Requirements for Section 874.10?
    
        OSM is adding a section 874.10, which contains the information 
    collection requirements for Part 874 and the Office of Management and 
    Budget (OMB) clearance number. The addition includes the estimated 
    reporting burden per project for complying with the new information 
    collection requirements contained in the final rule.
        One commenter suggested that OSM's estimate of 27 hours for the 
    burden of the proposed collection of information under the requirements 
    of the proposal was too low. The commenter suggested 60 hours was a 
    more reasonable estimate and we have accepted this figure in the final 
    rule at section 874.10, ``Information collection.''
    
    E. What is the Purpose Behind New Section 874.17: ``AML Agency 
    Procedures for Reclamation Projects Receiving Less Than 50 Percent 
    Government Funding?''
    
        This new section outlines the procedures an AML agency will need to 
    follow in approving AML projects receiving less than 50 percent 
    government funding because of planned coal extraction incidental to the 
    reclamation. Its intent is to ensure that the revised definition of 
    ``government-financed construction'' at 30 CFR 707 is applied only when 
    appropriate to achieve reclamation at AML-eligible sites.
        Several commenters agreed with OSM that sufficient safeguards exist 
    to ensure the procedure is used only in appropriate circumstances. 
    Another acknowledged that it will now be incumbent upon both the States 
    and OSM to implement the rule in a professional and responsible manner. 
    These comments are consistent with our belief that the experience and 
    safeguards of the AML program, combined with OSM's oversight role, will 
    prevent abuse of the provisions in this rule. Again, we emphasize that 
    States--not contractors or operators--select projects, solicit bids and 
    decide whether to award contracts.
        Two commenters opposed the rule citing a potential for substantial 
    administrative abuse. One commenter quoted OSM's 1978 justification for 
    proposing the 50 percent funding requirement as minimizing the 
    opportunity for this abuse. Both commenters looked to the history of 
    SMCRA as providing examples of how its provisions had been abused and 
    such abuse had been tolerated by regulatory authorities. Each commenter 
    saw every reason to expect that regulatory authorities would 
    participate in such abuse in the future.
        OSM is very much aware of the pressure for regulatory authorities 
    to apply this rule in such a way as to maximize AML reclamation by 
    maximizing coal extraction. It was for this reason that OSM added to 
    its original outreach document the consultation and concurrence 
    requirements of section 874.17(a) and (b) and the documentation 
    requirements of section 874.17(c) which added an element of personal 
    accountability to the required determinations and decisions. 
    Notwithstanding, OSM has every reason to believe that the Title IV 
    authorities will continue to properly implement their programs as they 
    have done in the past. Should OSM discern a problem with program 
    implementation, we will address that problem through oversight.
        With regard to the commenter's reference to OSM's 1978 
    justification for the 50 percent funding requirement, we note that the 
    same pressures to maximize coal extraction exist under both the prior 
    and present rule. Yet the present rule, objected to by the commenters, 
    provides significantly less potential for abuse than the prior rule in 
    that it provides for the section 874.17 protections not found in that 
    prior rule.
        The introductory paragraph of section 874.17, ``AML agency 
    procedures for reclamation projects receiving less than 50 percent 
    government funding,'' is adopted as proposed. Paragraphs 874.17(a) 
    through (e) are discussed in the sections that follow.
    
    F. How Will the Consultation in Section 874.17(a) Work?
    
        The consultation process under 874.17(a) requires the AML agency to 
    consult with the regulatory authority to determine the likelihood of 
    the coal at a proposed AML project being mined under a Title V permit. 
    The purpose of this consultation is to ensure that the AML program and 
    funds are not used for activities that should properly be permitted and 
    regulated under Title V. Through this consultation process OSM seeks to 
    ensure that AML funds are directed only to eligible sites.
        OSM believes the information upon which the ``likelihood of the 
    coal being mined under a Title V permit'' determination is made should 
    be information that is reasonably available. In both our proposed and 
    final rules, we have listed certain kinds of information that we 
    believe would be available and helpful in reaching a decision on 
    whether or not to proceed with the project under the AML program. These 
    examples of ``available'' information are not exhaustive. Each site 
    will present a different set of circumstances and problems which are 
    best addressed on a case-by-case basis. We believe it best to leave to 
    the experience and technical and professional judgment of the Title IV 
    and Title V officials within each jurisdiction to decide if an 
    abandoned mine should be remined under a Title V permit or reclaimed 
    under the AML program. We will continue to monitor those decisions 
    through our oversight of the respective State programs.
        Under this section, the AML agency also will consult with the 
    regulatory authority to determine the likelihood for potential problems 
    and impacts arising between Title IV reclamation projects and any 
    adjacent or nearby Title V operations. The purpose of this provision is 
    to identify environmental problems at an early stage and to establish 
    reclamation responsibility. An example of where reclamation 
    responsibility needs to be established is where a hydrologic connection 
    exists between nearby or adjacent Title IV and Title V activities. In 
    such cases where there is acid mine drainage, OSM believes it is 
    essential to ensure that responsibility for acid mine drainage arising 
    from a permitted Title V activity but impacting a Title IV activity 
    remains with the Title V permittee. Conversely, a Title V permittee 
    would not be held responsible for any environmental problems 
    originating from a nearby or adjacent Title IV reclamation activity 
    impacting the Title V activity.
        One commenter suggested that this section be amended to include 
    consideration of economic factors which limit the development or 
    marketing of the coal resources as an active mining venture.
        OSM recognizes that economics related to environmental risks, 
    permitting costs, regulatory compliance costs, quantity and quality of 
    the coal as well as development and marketing issues are all important 
    factors leading to a decision by a coal operator to mine or not mine 
    under a Title V permit. A rough economic analysis is not precluded by 
    the regulatory language.
    
    [[Page 7476]]
    
    The AML agency and regulatory authority are free to use any information 
    and analyses, including an economic analysis, that they consider 
    appropriate to reach and support their section 874.17 decisions. On the 
    other hand, a thorough economic analysis would be costly, and the 
    information needed for its preparation would not always be readily 
    available. In light of these considerations, we are not requiring an 
    economic analysis in the final rule.
        The same commenter suggested that a finding be made during the 
    consultation as to the likelihood that the project will aid in 
    correcting existing off-site environmental damage caused by on-site 
    problems, such as discharge of acid mine drainage. Because AML 
    authorities already factor such considerations into their project-
    selection decisions, we see no reason to require an additional step in 
    the consultation process.
        Another commenter was encouraged that the ultimate determination of 
    whether an abandoned mine site should be remined under a Title V permit 
    or reclaimed under the Title IV AML program would be left to the 
    experience and technical and professional judgment of State officials. 
    This commenter, and one other, further expressed the hope that, under 
    OSM's oversight of State programs, OSM would not be second-guessing 
    State determinations about the likelihood that sites would be mined 
    under Title V. One of these commenters further questioned whether, if 
    OSM were to reverse a State determination, the State would then 
    disallow the AML funding and cite the contractor for mining without a 
    permit?
        State authorities will have to make determinations under this rule 
    based on experience, professional judgment, and the best available 
    information. OSM does not intend to second-guess individual decisions 
    by State Title IV authorities. Our approach to oversight will be to 
    review first the State determinations, as documented under paragraph 
    (c) of this section, to find out whether there is a pattern of 
    questionable State determinations and, if there is such a pattern, to 
    look into the reasons before deciding what remedial action would be 
    appropriate. This is consistent with OSM's overall approach to 
    oversight of State programs under SMCRA. Even if we were to determine 
    that a State is not properly implementing this rule, there would be no 
    basis for OSM to take action against a contractor who, in good faith, 
    is and has been complying with all terms and conditions of the 
    contract. Instead, our focus would be on working with the State to 
    correct any program deficiencies.
        One commenter indicated that the waiver of AML reclamation fees was 
    key to offsetting some fairly significant risks to contractors in 
    taking on an AML project under this rule. Among the risks noted by the 
    commenter were the quantity and quality of the incidental coal, 
    negotiation of a lease and associated royalty payments, potential 
    bonding requirements, and the responsibility to complete the project 
    regardless of the return on the sale of the incidental coal. The 
    commenter believed it might be necessary to consider ``additional 
    adjustments'' in the final rule in order to encourage contractors to 
    undertake this type of project.
        OSM realizes that there is a significant factor of operator risk in 
    any AML reclamation contract whether or not it involves the incidental 
    extraction of coal. However, when there is risk of loss there is also 
    potential for gain. Contractors who are uncomfortable with site-
    specific risks inherent in individual reclamation contracts should not 
    bid on the contract. The final rule is built upon the basic elements of 
    a standard AML contract. OSM will not consider adjustments to any of 
    these basic elements to encourage operators to undertake reclamation 
    projects. Concerning the comment on the waiver of AML fees, the payment 
    of AML fees has never been required of contractors extracting coal 
    under a Section 528(2) exemption.
        Another commenter suggested that it was unfair to hold the 
    contractor responsible for completing the AML work if the project was 
    begun with a reliance on agency estimates of coal amount, quality, 
    location, marketability, etc., that turned out to be miscalculated or 
    otherwise in error. The commenter also asked if OSM would amend the AML 
    contract if any material miscalculations were discovered.
        This commenter misinterprets the proposed rule to mean that 
    contractors will have to rely upon AML estimates of amount of coal, 
    quality of coal, etc.. Under this rule, the AML agency will establish 
    and describe the limits of the incidental coal to be removed and any 
    other information it has about the deposit. If the AML agency drills 
    the site as part of its determination of what coal is incidental to the 
    project, that information will be provided to interested contractors. 
    But as in any arms-length transaction, it behooves both sides to assure 
    themselves that they have sufficient accurate information to enter into 
    a contract. Contractors submit bids based on their own cost-benefit 
    considerations. Likewise, AML agencies select and reject bids based on 
    whether they are in the best interest of the agency. Once a contract is 
    executed, however, each party is bound by the terms and the conditions 
    of the contract. Contract amendments can take place if approved by the 
    AML agency for extraordinary circumstances. However, we stress that we 
    see no valid reason for modifying the contract because of the 
    contractor's incorrect estimate of either the amount of coal at the 
    site or its ultimate value.
        One commenter asserted that the determination in section 
    817.74(a)(1) as to the likelihood of the site being mined under a Title 
    V permit could not properly be made outside the context of the baseline 
    hydrologic, geologic and coal reserve information normally submitted as 
    part of a Title V permit application.
        OSM does not agree that a reasonable ``likelihood'' determination 
    cannot properly be made on the basis of available (a)(1) information. 
    On occasion, however, the AML agency may consider that available 
    documentation on coal reserves needs to be augmented, for example, by 
    the drilling of core samples. We expect that the results of such 
    drilling would be shared with contractors.
        One commenter asserted that the rule is deficient in not being 
    ``need-tested,'' namely that there is no requirement for the 
    ``operator'' to demonstrate that the reclamation would not otherwise be 
    accomplished under a viable Title V operation.
        OSM interprets this comment as a proposal to change the 
    ``likelihood'' test into a ``never-ever'' test. Such a proposed 
    limiting or narrowing of the ``likelihood'' determination would negate 
    the very purpose of this rulemaking by discouraging reclamation under 
    Title IV while doing nothing to increase the likelihood of reclamation 
    under Title V. In addition, this suggestion would essentially create a 
    requirement that a contractor know other companies' trade secrets with 
    which it would be impossible to comply. Section 874.17(a), 
    ``Consultation with the Title V Regulatory Authority,'' is adopted as 
    proposed.
    
    G. What Types of Concurrences Between the AML Agency and the Regulatory 
    Authority Will be Required in Section 874.17(b)?
    
        Under proposed section 874.17(b), if the AML agency would have 
    decided to proceed with the reclamation project after consulting with 
    the Title V regulatory authority, then the two
    
    [[Page 7477]]
    
    would have had to concur in determinations as to: (1) the extent and 
    amount of any coal refuse, coal waste, or other coal deposits, the 
    extraction of which would be covered by the Part 707 exemption or 
    counterpart State and Tribal laws and regulations, and (2) the 
    delineation of the boundaries of the AML project. These determinations 
    primarily were intended to ensure that only the amount of coal 
    physically needed to accomplish the reclamation is covered by the Part 
    707 exemption. This coal would be ``incidental'' and exempt from the 
    reclamation fee payment.
        One commenter suggested that the rule should have included a 
    provision that allows the contractor to amend or revise the boundaries 
    of the AML project where conditions or circumstances warrant the 
    removal of additional coal as long as the coal is incidental to the 
    reclamation. Another commenter suggested that a provision be included 
    for amending the determination on the amount and extent of incidental 
    coal if additional coal is found to be incidental to the reclamation.
        OSM does not accept either of these suggestions. As with any AML 
    reclamation project, the contractor can propose contract revisions 
    based on unusual or unanticipated conditions experienced on the site. 
    However, only the AML agency has the authority to revise or amend the 
    contract. Because the AML agency already has this authority, OSM does 
    not see the need for specifically providing for it through a new rule 
    provision.
        Two commenters suggested increasing the number and scope of the 
    required Title V concurrences. The first proposed to replace the 
    existing concurrence on the extent and amount of incidental coal with 
    one on the estimated contractor revenues from the sale of that coal. 
    This was seen as more appropriate because revenues from coal sales are 
    to be used to offset project costs. The second comment proposed 
    requiring Title V concurrence on all contract amendments.
        OSM considered but did not accept either of these suggestions. The 
    principal reason for involving the Title V authority in the paragraph 
    (b)(1) concurrence process is to secure the greatest assurance that the 
    limits of incidental coal are correctly identified. As discussed 
    elsewhere in this rulemaking, precise estimates of contractor returns 
    require company-specific information not available to either OSM or 
    State authorities. All that is needed by the AML agency for the 
    purposes of this rule is a rough estimate of contractor returns to set 
    the range of expected contractor bids on the project. Requiring a Title 
    V concurrence on this process is not necessary and would divert limited 
    agency resources away from addressing more crucial information needs.
        For similar reasons, OSM did not accept the second proposal that 
    Title V concurrence be required for amendments to the reclamation 
    contract. One of the principal purposes of the rule is secured by 
    involving the Title V authority in the initial determination of the 
    contract limits of incidental coal. Once this has occurred, the AML 
    authority should have little or no difficulty when considering 
    amendments affecting the determination of incidental coal. Requiring 
    concurrence of the Title V authority in subsequent revisions to the 
    contract, including adjustments to the limits of incidental coal, would 
    be of little benefit. If the AML authority decides there is a need to 
    discuss a contract amendment with the Title V authority, the AML 
    authority is free to seek such advice.
        Several comments focused on the language of proposed (b)(1) which 
    would have required specification of the ``amount'' of coal that could 
    be extracted under the Part 707 exemption. This ``amount'' 
    specification was complicated by the language of proposed (e) which 
    would have required a Title V permit in cases where a contractor 
    extracts ``more coal than specified in (b)(1).'' Read together, these 
    paragraphs appeared to require a Title V permit if more coal was 
    extracted than the extent and amount specified in the Title IV and 
    Title V concurrence. Commenters not only suggested that such language 
    would require AML auditing of company books but also offered opinions 
    on the senselessness of tonnage measurements. Other comments 
    interpreted the proposed (b)(1) and (e) language as requiring AML audit 
    of tonnage figures, company sales and net revenue figures.
        OSM never intended the proposed paragraphs (b)(1) and (e) language 
    to require a Title V permit for the extraction of any amount of coal 
    that lies within the incidental coal limits specified under (b)(1). 
    Instead, OSM intended that the language would only require a Title V 
    permit for coal extracted beyond those limits. The ``extent'' or limits 
    of incidental coal can reasonably be defined in terms of the dimensions 
    of the area containing the coal. Exact determination of tonnage within 
    these dimensions would, in most cases, be impossible to achieve prior 
    to removing the coal.
        To eliminate any ambiguities that may have appeared in the proposed 
    (b)(1) rule language, the final rule replaces the phrase ``extent and 
    amount'' with the word ``limits''. The remainder of section 
    874.17(b)(1) and (2), ``Concurrence with the Title V Regulatory 
    Authority,'' is adopted as proposed.
        Final section 874.17(b)(1) reads:
    
        You [the AML authority] must concur in a determination of the 
    limits on any coal refuse, coal waste, or other coal deposits which 
    can be extracted under the Part 707 exemption or counterpart State/
    Indian Tribe laws and regulations.
    
        For information on conforming changes to section 874.17(e), see the 
    response to question J. in Section II of this preamble: ``What must the 
    contractor do under final section 874.17(e) if extracting coal beyond 
    the limits of the incidental coal specified in section 874.17(b)?''
    
    H. Under Section 874.17(c), How Will the AML Agency Document the 
    Results of the Consultation and the Concurrences With the Title V 
    Regulatory Authority?
    
        Under the proposed and final rules, the AML agency documents, in 
    the AML case file, the determinations as to the likelihood of coal at 
    the site being mined under a Title V permit and the likelihood of 
    interactions between AML activities and nearby or adjacent Title V 
    activities that might create new environmental problems or adversely 
    affect existing situations. Also, the AML agency documents the 
    information used for making these determinations and the names of the 
    responsible agency officials.
        As we received no comments on section 874.17(c), ``Documentation,'' 
    it is adopted as proposed.
    
    I. What Special Requirements Will Apply for Qualifying Section 
    874.17(d) Reclamation Projects?
    
        Under the proposed and final rule, section 874.17(d)(2) expressly 
    requires that qualifying AML reclamation projects comply with 
    provisions for State and Tribal reclamation plans and grants found at 
    30 CFR Subchapter R. The required compliance with Subchapter R is 
    intended to ensure that the incidental coal extraction projects 
    authorized under this rulemaking is accomplished in accordance with the 
    substantial safeguards of the AML program. These safeguards include 
    such features as: public participation and involvement; environmental 
    evaluation to achieve compliance with the National Environmental Policy 
    Act of 1969; and use of appropriate State or Tribal procurement 
    procedures and regulations
    
    [[Page 7478]]
    
    as authorized under the grant common rule at 43 CFR 12.76.
        Further, to provide increased protections to the AML fund and to 
    citizens or landowners who might be affected by the project, we 
    proposed three additional requirements to qualifying section 874.17 
    reclamation projects. These three proposed requirements, with only a 
    minor wording adjustment in paragraph (d)(4) discussed below, are 
    included in the final rule. Paragraph (d)(1) requires the AML agency to 
    characterize the site in terms of existing hydrologic and other 
    environmental problems. Paragraph (d)(3) requires the AML agency to 
    develop site-specific reclamation and contractual provisions, such as 
    performance bonds, to ensure that the reclamation is completed. And, 
    paragraph (d)(4) requires the contractor to provide documents that 
    authorize the extraction of the coal and commit to the payment of 
    royalties to the mineral owner or other appropriate party.
        The purpose of the (d)(4) requirement is to ensure that before a 
    reclamation contract is awarded, there will be a valid coal lease 
    authorizing the contractor to extract the coal. The terms of the lease 
    will identify the party responsible for paying the royalty, the amount 
    of the royalty, and the party receiving the royalty. To make the rule 
    language clearer, we are including in final (d)(4) the qualifying 
    phrase that the contractor provide, ``prior to the time reclamation 
    begins,'' applicable documents that clearly ``commit to the payment of 
    royalties.''
        One commenter indicated that the documentation requirements of 
    section 874.17(d) must be interpreted as requirements for the AML 
    program and not as information to be supplied in lieu of a mining 
    permit. The commenter reasoned that the goal of the AML program is to 
    improve existing environmental conditions and not just to protect or 
    preserve existing conditions. OSM agrees with the commenter on both 
    points.
        Two other commenters raised issues regarding the payment of 
    royalties, severance taxes and related obligations. The first wanted to 
    ensure that the AML contractor secure a mineral lease and/or pay 
    associated royalties, particularly for Federal and State coal. The 
    second raised the question of the proof of payment for such ``other'' 
    fees as severance and black lung taxes.
        In response to both these commenters, we emphasize, as we have done 
    in the proposed rule and elsewhere in this final rule, that this 
    rulemaking is not intended to change, alter, or supersede any other 
    Federal or State laws, regulations, or requirements that apply to all 
    AML reclamation projects. The requirement for a Federal or State lease 
    and the payment of Federal or State royalties is unaffected by this 
    rule. Also, any requirements for proof of payment for severance and 
    black lung fees--fees which are not required under SMCRA--are 
    unaffected by this rule.
        A final commenter raised the question of whether the (d)(4) 
    documentation authorizing coal extraction (e.g., a lease) would be 
    required before or after project bid submission. OSM believes that 
    requiring the paragraph (d)(4) documentation before the reclamation 
    actually begins will provide the greatest latitude to parties 
    interested in bidding on the AML reclamation projects. As indicated 
    earlier, we have further revised final (d)(4) to include the qualifying 
    phrase ``prior to the time reclamation begins'' to reflect this 
    intention. In all other ways, final section 874.17(d), ``Special 
    requirements,'' is adopted as proposed and now reads:
        (d) Special requirements. For each project, you must:
        (1) Characterize the site in terms of mine drainage, active slides 
    and slide-prone areas, erosion and sedimentation, vegetation, toxic 
    materials, and hydrologic balance;
        (2) Ensure that the reclamation project is conducted in accordance 
    with the provisions of 30 CFR Subchapter R;
        (3) Develop specific-site reclamation requirements, including 
    performance bonds when appropriate in accordance with State procedures; 
    and
        (4) Require the contractor conducting the reclamation to provide 
    prior to the time reclamation begins applicable documents that clearly 
    authorize the extraction of coal and payment of royalties.
    
    J. What Must the Contractor do Under Final Section 874.17(e) if 
    Extracting Coal Beyond the Limits of the Incidental Coal Specified in 
    Section 874.17(b)?
    
        In proposed and final section 874.17(e), the contractor is required 
    to obtain a permit under Title V for the extraction of any coal not 
    included in the paragraph (b)(1) Part 707 exemption. Such coal is not 
    incidental to the AML reclamation project and thus is subject to all 
    the regulatory requirements of Title V.
        One commenter asked what OSM would do if, after a contract is 
    signed, the lessor and contractor wanted to take out additional coal 
    underlying the coal determined to be incidental to the project and 
    possibly provide more complete reclamation in the process. Would OSM 
    consider the additional coal extending beyond the established project 
    limits to be incidental because its removal could improve the 
    reclamation, or would OSM consider the coal non-incidental and expect 
    the contractor to obtain a Title V permit?
        This is an important issue, and we want to clarify how it must be 
    addressed under the final rule. All coal extracted beyond the limits of 
    the incidental coal identified in the AML contract, regardless of where 
    it is found relative to the incidental coal, is subject to Title V 
    requirements, including obtaining a permit and payment of reclamation 
    fees. Once the contractor begins work on the project and the AML 
    authority subsequently determines that additional coal is incidental to 
    the project, the contract could be amended to include the additional 
    coal. The standard for determining incidental coal is always whether 
    removal or extraction is physically necessary to accomplish the 
    reclamation of the approved AML construction project. This standard 
    must be applied in the initial contract determination and in any 
    amendments that change the contract limits of incidental coal. Any coal 
    whose removal or extraction is not physically necessary to complete the 
    reclamation is not incidental to that project--even if such removal and 
    sale would reduce the overall cost of the reclamation to the 
    government.
        One commenter suggested that the preamble discussion in the 
    proposed rule (question K. in Section II of the preamble to the 
    proposed rule) providing for contract remedies against AML projects for 
    the extraction of coal outside of the section 874.17(b)(1) project 
    limits, conflicted with the proposed rule language of section 874.17(e) 
    requiring a Title V permit for such extraction. While several 
    commenters read the proposed rule language of paragraphs (b)(1) and (e) 
    as establishing a tonnage limit on the amount of incidental coal that 
    could be extracted from the AML project (with a Title V permit being 
    required for coal exceeding the tonnage limit), most commenters 
    appeared to correctly interpret these paragraphs to mean that the 
    limits on incidental coal would be identified and described in terms of 
    dimensions of the area containing the coal. A Title V permit would not 
    be needed to extract coal within these prescribed limits, regardless of 
    how much coal is extracted or the quality and value of the coal. To 
    make it clear in this final rule that paragraph (e) requires a Title V 
    permit only for the extraction of coal beyond the paragraph (b)(1) 
    limits, we are making the following clarifying changes to that 
    paragraph.
    
    [[Page 7479]]
    
        Final paragraph (e) replaces the word ``more'' in front of the word 
    ``coal'' with the phrase ``beyond the limits of the incidental 
    [coal].'' The rule language concludes with the addition of the new 
    phrase ``for such coal.'' This change should clarify that extraction of 
    coal beyond that which has been determined to be incidental to the 
    project under (b)(1) is unauthorized and, thus, requires a Title V 
    permit. At the same time coal extracted within the (b)(1) limits, 
    regardless of how much or how valuable, is incidental and, therefore, 
    authorized under the project.
        Final section 874.17(e) reads:
    
        If the reclamation contractor extracts coal beyond the limits of 
    the incidental coal specified in paragraph (b)(1) of this section, 
    the contractor must obtain a permit under Title V of SMCRA for such 
    coal.
    
        Two commenters suggested an auditing or final adjusting of contract 
    cost to net revenues in lieu of the proposed regulatory requirement to 
    seek a Title V permit if the contractor extracts more coal than 
    authorized in the AML contract. One of the commenters believed that 
    this was fairer, more effective and would not halt the AML project if 
    the contractor could not obtain a permit or delay it until such time as 
    the contractor obtained a permit. These and other commenters proposed 
    alternative remedies, procedures, and sanctions to the paragraph (e) 
    requirement that a contractor obtain a Title V permit for extraction of 
    coal beyond the incidental coal limits of (b)(1).
        As previously mentioned, OSM recognizes that there are times that 
    unintended and extremely limited extraction of coal may occur beyond 
    prescribed (b)(1) limits. To the extent that such coal is less than 250 
    tons, the extraction may be exempt from regulation under the Title V 
    permitting requirement at 30 CFR 700.11(a)(2). Failing that exemption, 
    the Act allows no leeway in the requirement for Title V permitting. To 
    be reasonably assured that coal removal will not exceed the incidental 
    coal limits of (b)(1), contractors should design projects accurately 
    and precisely and pay close attention to project boundaries and 
    incidental coal limits when undertaking the project.
        We note that the paragraph (e) requirement that the contractor must 
    obtain a Title V permit does not preclude the AML agency from imposing 
    contract sanctions under the Title IV program if the contractor 
    breaches the conditions of the contract. As indicated in the preamble 
    discussion following question K. in Section II of the proposed rule, 
    AML contractors removing coal beyond the limits authorized by the AML 
    project could be subject to a wide range of remedies for breach of 
    contract. Such sanctions are already available to the Title IV agency 
    to use at its discretion to ensure that reclamation is conducted fully 
    in accordance with applicable laws, regulations and contract 
    requirements. Indeed, when a contractor clearly exceeds the (b)(1) 
    incidental coal limits, OSM expects that the AML agency would impose 
    appropriate sanctions, as well as refer the matter to Title V 
    authorities for appropriate action. Hence, we have not adopted any of 
    the suggested rule changes that would have limited the available 
    remedies or sanctions.
    
    K. How Does This Rulemaking Relate to the Established AML Priority 
    System for Selecting Projects?
    
        OSM received several comments concerning the relationship to the 
    priorities established in Section 403 of SMCRA relative to projects 
    involving the incidental recovery of coal. One of these commenters 
    encouraged OSM to add a paragraph (d) under section 874.17 titled 
    ``Project Priority,'' the purpose of which would be to remind the 
    States that the selection of projects shall reflect the priorities 
    outlined in Section 403 of SMCRA regardless of whether or not there is 
    coal recovery potential. This commenter suggested that such an advisory 
    statement would help States defend their project selection process 
    against political or business pressure to fund certain sites with coal 
    recovery potential. At the same time, the commenter suggested, an 
    advisory statement would not preclude States from approving low 
    priority projects where coal recovery potential allows reclamation to 
    be performed at little or no cost to the government.
        Another commenter indicated that the discussion in our proposal (63 
    FR 34770; June 25, 1998) suggested that the AML agency could select 
    sites independent of the priority ranking. The commenter recommended 
    that OSM clarify that the rule provides the State AML agency with the 
    authority to depart from the priority system in order to speed approval 
    of the incidental coal removal projects developed under this rule.
        A third commenter was encouraged by OSM's recognition that the 
    types of AML projects likely to attract most attention under this rule 
    are those listed as priority 3 under Section 403 of SMCRA. This same 
    commenter was encouraged again that the rule does not mandate that the 
    States approve all AML projects presented to them which involve less 
    than 50 percent government funding.
        OSM certainly did not intend by anything said in its proposed rule 
    to suggest that States disregard the established priority system. In 
    our proposed rule, we expressly stated that, ``The AML agency selects 
    individual sites from the AML Inventory using its priority system.'' 
    (63 FR 34771; June 25, 1998).
        OSM further does not believe that there is need to add an advisory 
    regulation to clarify the priority structure. Projects done under 
    authority of this rule will not differ from any other AML project with 
    regard to Section 403 of SMCRA. The States have been administering 
    quality AML programs since the early 1980's. Political or business 
    pressure in project selection has always been part of the process, and 
    there is every reason to believe that such pressure can be expected 
    here. While individual projects selected may be priority 1, 2 or 3, 
    depending on the State's needs and the amount of AML reclamation 
    remaining to be done, individual projects are approvable as long as 
    they reflect, within the context of other AML projects, the priorities 
    outlined in Section 403. States will retain the maximum discretion in 
    choosing AML projects consistent with their current authority in 
    Section 403.
        One commenter believed that OSM's statement that, ``The proposal 
    was not intended to address project sites involving redisturbance and 
    subsequent reclamation of abandoned mine lands, such as highwalls and 
    outslopes that have become environmentally stable over the years and 
    pose no other problems'' provides a significant obstacle to reducing 
    the current AML inventory through reclamation. OSM disagrees with the 
    commenter. Section 403 of SMCRA states that, in addition to the 
    eligibility criteria for AML reclamation found at Section 404, sites 
    must meet one of the priorities at Section 403. If an abandoned mine 
    site has become stable over the years, it would not meet the priorities 
    in Section 403 and it would not be subject to expenditures from the AML 
    fund. Such a site could properly be removed from the inventory at the 
    State's discretion.
    
    L. Is This Rulemaking Really More About Remining than AML Reclamation?
    
        No. The three commenters opposing the rule asserted that it was a 
    thinly veiled remining incentive. They uniformly decried what they 
    perceived to be the loss of Title V remining
    
    [[Page 7480]]
    
    protections for operations that they suggested would be conducted as 
    Title IV reclamation projects under this rule. Much of commenters' 
    concerns centered on their assertion that the rule would lead to 
    administrative abuse and operate as a remining incentive. One of the 
    three commenters asserted that the rule was a remining incentive 
    because it would lead to ``coal mining for commercial profit'' as part 
    of a government-financed operation.
        OSM has already addressed commenters' concerns about abuse of the 
    rule in Section II.E. of this preamble. With regard to the commenter's 
    concern that the rule would serve as a remining incentive because it 
    would lead to ``coal mining for commercial profit,'' we note that 
    Section 528(2) exempted operations can include the extraction of coal 
    for commercial profit. Profit is not in conflict with the goal or 
    intent of Section 528(2). This rule is not a remining incentive. It is 
    intended to encourage the reclamation at AML-eligible sites that have 
    little-to-no likelihood of ever being remined.
        The commenter's concern that operators might ``mine'' coal for 
    ``commercial profit'' under this rule is balanced by industry 
    commenters' often voiced concern over the same potential for 
    ``commercial loss.'' As under any AML reclamation contract, whether or 
    not it involves the extraction of coal, there will always be an element 
    of risk for the bidding party. OSM neither guarantees a profit nor 
    insures against a loss for reclamation contracts. OSM's primary 
    interest, particularly for the reclamation conducted under this rule, 
    is in negotiating a contract that reflects a savings from the 
    anticipated program costs of reclaiming the site and burying or 
    disposing of the incidental coal deposits. Such savings will in turn be 
    used to reclaim other eligible sites.
        This same commenter challenged the justification for the rule on 
    the basis of ``remining incentives'' already on the books. The 
    commenter cited: (1) the Clean Water Act Reauthorization of 1978, and 
    (2) the Energy Policy Act of 1992. Effective as these incentives may 
    have been in encouraging Title V remining, substantial acreage remains 
    unremined with little likelihood of being remined under existing 
    regulations. It is these sites that this final rule targets for Title 
    IV reclamation.
        The same commenter also characterized the rule as using AML funds 
    to improperly subsidize the remining industry. The commenter cited 
    Congress' prior rejection of such a subsidy in the legislative history 
    of the Energy Policy Act of 1992. Although no specific citation was 
    provided, the commenter probably was referring to the provisions of 
    House Bill 4053, which created a State remining insurance fund derived 
    mainly from AML monies. This fund would have assumed a Title V 
    permittee's liability for correcting environmental problems that 
    resulted from unanticipated events or conditions. H.R. 4053, 101st 
    Cong. Sec. 422 (1990). The concern expressed in hearings over these 
    provisions was that a few problem sites could deplete the entire fund. 
    Coal Remining: Hearings on H.R. 2791 and 4053 before the Subcommittee 
    on Mining and Natural Resources, 101st Cong. at 181,187 (1990) 
    (Statements of Dave Rosenbaum and Nick J. Rahall.)
        Beyond the fact that the present rule concerns Title IV reclamation 
    and not Title V remining, we note that the rule does not threaten to 
    exhaust AML funds on Title V reclamation, but rather is a means of 
    maximizing existing AML funds for Title IV reclamation. It could be 
    better said that this rule does not subsidize industry but, under 
    controlled parameters, uses industry to subsidize AML reclamation.
        Another commenter suggested that the proposal be withdrawn and that 
    OSM explore other approaches to the creation of ``remining'' 
    incentives. Several incentives were proposed which, because they dealt 
    with remining and not AML reclamation projects, were beyond the scope 
    of this rulemaking. We note, however, that the commenter's suggested 
    remining incentives (1) would require congressional action in the form 
    of statutory changes or appropriations, or (2) were conditioned with 
    such caveats so as to render them ineffective as incentives to the coal 
    industry. These recommended incentives highlight the difficulty 
    encountered over the last twenty years by industry, OSM, and the 
    environmental community in developing meaningful, environmentally 
    protective, mutually supportable remining incentives. As a result, an 
    enormous number of disturbed sites have yet to be remined and reclaimed 
    under Title V. We are promulgating the current rule in an effort to 
    encourage the Title IV reclamation of some of those sites.
        Following the prior theme from commenters that the rule is not a 
    reclamation procedure but a remining incentive, one commenter listed 
    seven areas in which projects authorized under this rule, although 
    providing Title IV protections, did not provide Title V level 
    protections. This less than Title V level of protection is not 
    unexpected considering that projects authorized under this final rule 
    are AML reclamation projects and not Title V activities. AML 
    reclamation has been successfully performed under SMCRA for 20 years 
    complying with numerous AML program and AML contract safeguards. The 
    commenter has, in effect, made a broad sweeping condemnation of the AML 
    procedures inherent to all reclamation projects, including those that 
    would be initiated under the scope of this final rule. At the same 
    time, despite OSM's detailed explanations of the safeguards in the 
    preamble to the proposed rule, the commenter did not specifically cite 
    which AML safeguards are deficient or have proved inadequate in the 
    past and did not offer suggestions on how they could be strengthened.
    
    M. Other Comments
    
        One commenter supporting the rule characterized it as a further 
    step in implementing primacy under SMCRA. This commenter correctly 
    noted that a State's adoption of this rule and the resulting change in 
    reach of its AML program is optional. Each State is free to manage its 
    AML program in light of its particular needs and resources.
        The three commenters categorically opposing the rule also attacked 
    it as lacking adequate justification. Two of the commenters asserted 
    that OSM was not justified in seeking new ways of funding the 
    reclamation of acreage that otherwise would not be reclaimed because 
    there was still a ``significant sum of [AML] money unexpended in the 
    treasury and unrequested by OSM.'' The commenters were referring to the 
    unappropriated balance in the AML Fund--more than $1 billion collected 
    in AML fees and deposited in the Fund but not appropriated by Congress 
    for reclamation. These and other commenters expressed support for 
    making all Fund money available for reclamation.
        This comment is outside of the scope of this rulemaking, and it 
    refers both to an agency budget request and a congressional 
    appropriation process over which OSM has little control. Further, if 
    every dollar in the Fund were to be appropriated for reclamation, it 
    would not come close to satisfying the reclamation need. Even if the 
    entire Fund became available for reclamation, this final rule would 
    still be necessary.
        One of these commenters stated that OSM had not provided any 
    figures showing how many additional abandoned mines would be reclaimed 
    under the proposal and demonstrating that the rule would have tangible 
    environmental benefits. While projections of the exact number of sites
    
    [[Page 7481]]
    
    that would be reclaimed as a result of this new rule cannot be reliably 
    made, OSM has information from 15 States that collectively estimated 
    that a range of from 32 to 80 sites per year could be reclaimed under 
    this rule.
        One commenter asked for confirmation that the proposed change in 
    the definition at section 707.5 would not affect the review 
    responsibility to identify historic properties and effects under 36 CFR 
    800. That commenter also suggested that it would be helpful to consider 
    coordination measures for AML and regulatory agencies to perform the 
    needed reviews and to avoid redundancy. This rule does not change any 
    existing requirements in the Title IV AML program or procedures and 
    thus will not change existing review requirements for historic 
    properties. Changes in coordination procedures, if any, will be left to 
    the discretion of the individual States.
        One commenter expressed the idea that the enhanced reclamation 
    scope of the rule leaves open for interpretation and possible 
    reevaluation of the procedures for State contracting and bonding. 
    Again, we emphasize that reclamation projects covered under the scope 
    of this rule making are intended to be accomplished within existing AML 
    processes and procedures. This final rule does not change, alter or 
    supercede any other Federal or State laws, regulations or requirements 
    that would otherwise apply to the AML projects. At the same time, it 
    does not preclude States from revising any procedures in order to 
    better implement the provisions of this final rule.
    
    III. Procedural Determinations
    
    1. Executive Order 12866--Regulatory Planning and Review
    
        This document is a significant rule and has been reviewed by the 
    Office of Management and Budget under Executive Order 12866.
        a. This rule will not have an effect of $100 million or more on the 
    economy. It will not adversely affect in a material way the economy, 
    productivity, competition, jobs, the environment, public health or 
    safety, or State, local, or Tribal governments or communities.
        b. This rule will not create a serious inconsistency or otherwise 
    interfere with an action taken or planned by another agency.
        c. This rule does not alter the budgetary effects or entitlements, 
    grants, user fees, or loan programs or the rights or obligations of 
    their recipients.
        d. This rule does raise novel policy issues.
    
    2. Regulatory Flexibility Act
    
        The Department of the Interior certifies that this rule will not 
    have a significant economic impact on a substantial number of small 
    entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
        The rule, when implemented, should slightly improve business 
    opportunities for all entities, small and large, by increasing the 
    likelihood that between 32 and 80 additional reclamation projects will 
    be undertaken each year. In February 1997, a survey of 15 States, 
    conducted by the National Association of Abandoned Mine Land Programs, 
    indicated that if the proposal were implemented, 13 States intended to 
    use the provisions to achieve reclamation of problem areas such as coal 
    refuse, dangerous highwalls, AMD, and subsidence. Of those States, 12 
    anticipated one to five projects per year, while one State anticipated 
    20 or more. Therefore, OSM estimates a range of from 32-80 additional 
    projects per year that will be undertaken as a result of the new rule. 
    In calendar year 1997, there were 476 AML reclamation projects approved 
    and in calendar year 1998, there were 460. This results in an average 
    of 468 projects per year for this two year period. Therefore, it is 
    anticipated that the average number of AML projects under the new rule 
    will increase from 468 to a low of 500 and a high of 548 projects per 
    year, or an increase of between 6.8 and 17.1 percent.
        Data from OSM's electronic Applicant Violator System indicates that 
    since July 1994, we have cleared approximately 724 businesses as 
    contractors for AML reclamation projects. While it is likely that some 
    of the 724 business were coal mining companies which we classify as 
    small businesses under the Small Business Administration (SBA) 
    criteria, some were also construction companies, landscape companies, 
    and other types of businesses with the heavy equipment necessary to 
    reclaim an abandoned coal mine site. Since we do not collect data on 
    the nature of the businesses bidding on reclamation projects, the 
    number of employees they have, or their annual receipts in millions of 
    dollars, we are unable to determine how many of the 724 would qualify 
    as small businesses under the SBA criteria at 13 CFR 121.201. However, 
    given a maximum increase of 80 new projects undertaken each year and a 
    potential bidding pool of over 724 distinct businesses from various 
    industries, it is unlikely that the rule will have an impact on a 
    substantial number of small businesses.
        The economic impact of the rule on small businesses is expected to 
    be minimal. This determination is based on the following facts:
    
    --The rule will not increase the cost or burden on businesses 
    reclaiming sites eligible under the existing regulations;
    --The rule merely makes possible for businesses to undertake the 
    reclamation of areas not previously remined or reclaimed under existing 
    regulations;
    --The undertaking of the discreet reclamation projects opened up by 
    this new rule is entirely voluntary; and
    --The only increase in cost due to these new projects will be that for 
    documentation related to the removal and sale of coal as an incidental 
    part of the reclamation project.
    
        This incremental cost will be factored into the cost of the project 
    bid submitted to the Title IV governmental authority and should prove 
    to be an insignificant percentage of the total bid. None of the 
    comments from businesses complained that the rule imposed additional 
    burdens on doing business. Instead, business commented that the rule 
    did not go far enough in encouraging the reclamation of eligible sites. 
    Those who do participate and bid on reclamation projects resulting from 
    the new rule will do so to reap an economic benefit in the form of a 
    profit on the sale of coal incidentally mined during the reclamation of 
    the site. The total amount of Federal money that will be available each 
    year for AML projects will neither increase nor decrease as a result of 
    this rule.
    
    3. Small Business Regulatory Enforcement Fairness Act
    
        This rule is not a major rule under 5 U.S.C. 804(2), the Small 
    Business Regulatory Enforcement Fairness Act. This rule:
        a. Does not have an annual effect on the economy of $100 million or 
    more. It would allow AML agencies to work in partnership with 
    contractors to leverage finite AML Reclamation Fund dollars to 
    accomplish more reclamation. To offset the reduction in government 
    funding, the contractor would be allowed to sell coal found incidental 
    to the project and recovered as part of the reclamation. Participation 
    under the rule change is strictly voluntary and those participating are 
    expected to do so because of the economic benefit.
        b. Will not cause a major increase in costs or prices for 
    consumers, individual industries, Federal, State, or local government 
    agencies, or geographic regions because the rule
    
    [[Page 7482]]
    
    does not impose any new requirements on the coal mining industry or 
    consumers, and State and Indian AML program administration is funded at 
    100 percent by the Federal government.
        c. Does not have significant adverse effects on competition, 
    employment, investment, productivity, innovation, or the ability of 
    U.S.-based enterprises to compete with foreign-based enterprises for 
    the reasons stated above.
    
    4. Unfunded Mandates
    
        This rule does not impose an unfunded mandate on State, local, or 
    Tribal governments or the private sector of more than $100 million per 
    year. The rule does not have a significant or unique effect on State, 
    local or Tribal governments or the private sector. The administration 
    of the AML program by a State or Indian Tribe is funded at 100 percent 
    by the Federal Government and the decision by a State or Indian Tribe 
    to participate is voluntary. A statement containing the information 
    required by the Unfunded Mandates Reform Act (1 U.S.C. 1531, et seq.) 
    is not required.
    
    5. Executive Order 12630--Takings
    
        In accordance with Executive Order 12630, the rule does not have 
    significant takings implications. The rule would allow AML agencies to 
    work in partnership with contractors to leverage finite AML Reclamation 
    Fund dollars to accomplish more reclamation. To offset the reduction in 
    government funding, the contractor would be allowed to sell coal found 
    incidental to the project and recovered as part of the reclamation.
    
    6. Executive Order 12612--Federalism
    
        In accordance with Executive Order 12612, the rule does not have 
    significant Federalism implications to warrant the preparation of a 
    Federalism Assessment for the reasons discussed above.
    
    7. Executive Order 12988--Civil Justice Reform
    
        In accordance with Executive Order 12988, the Office of the 
    Solicitor has determined that this rule does not unduly burden the 
    judicial system and meets the requirements of sections 3(a) and 3(b)(2) 
    of the Order.
    
    8. Paperwork Reduction Act
    
        Under the Paperwork Reduction Act, agencies may not conduct or 
    sponsor a collection of information unless the collection of 
    information displays a currently valid Office of Management and Budget 
    (OMB) control number. Also, no person is required to respond to an 
    information collection request unless the form or regulation requesting 
    the information has a currently valid OMB control number. Therefore, in 
    accordance with 44 U.S.C. 3501 et seq, OSM submitted the information 
    collection and record keeping requirements of 30 CFR Part 874 to OMB 
    for review and approval. OMB approved the collection activity for Part 
    874 and assigned it OMB control number 1029-0113. This control number 
    will appear in section 874.10. To obtain a copy of OSM's information 
    collection clearance authority, explanatory information, and related 
    form, contact John A. Trelease at (202) 208-2783 or by e-mail at 
    jtreleas@osmre.gov.
    
    9. National Environmental Policy Act
    
        OSM has prepared an environmental assessment (EA) of this rule and 
    has made a Finding of No Significant Impact (FONSI) on the quality of 
    the human environment under Section 102(2)(C) of the National 
    Environmental Policy Act of 1969 (NEPA), 42 U.S.C. Section 4332(2)(C). 
    The EA and FONSI are on file in the OSM Administrative Record for the 
    rule.
        Authors: D.J. Growitz and Danny Lytton, Office of Surface Mining 
    Reclamation and Enforcement, U.S. Department of the Interior, 1951 
    Constitution Avenue, N.W., Washington, D.C. 20240.
    
    List of Subjects
    
    30 CFR Part 707
    
        Highways and roads, Incidental mining, Reporting and recordkeeping 
    requirements, Surface mining, Underground mining.
    
    30 CFR Part 874
    
        Reclamation, Surface mining, Underground mining.
    
        Dated: December 21, 1998.
    Sylvia V. Baca,
    Acting Assistant Secretary, Land and Minerals Management.
    
        For the reasons given in the preamble, 30 CFR Parts 707 and 874 are 
    amended as set forth below:
    
    PART 707--EXEMPTION FOR COAL EXTRACTION INCIDENT TO GOVERNMENT-
    FINANCED HIGHWAY OR OTHER CONSTRUCTION
    
        1. The authority citation for Part 707 continues to read as 
    follows:
    
        Authority: Secs. 102, 201, 501, and 528 of Pub. L. 95-87, 91 
    Stat. 448, 449, 467, and 514 (30 U.S.C. 1202, 1211, 1251, 1278).
    
        2. In Sec. 707.5, the definition of Government-financed 
    construction is revised to read as follows:
    
    
    Sec. 707.5  Definitions.
    
    * * * * *
        Government-financed construction means construction funded 50 
    percent or more by funds appropriated from a government financing 
    agency's budget or obtained from general revenue bonds. Funding at less 
    than 50 percent may qualify if the construction is undertaken as an 
    approved reclamation project under Title IV of the Act. Construction 
    funded through government financing agency guarantees, insurance, 
    loans, funds obtained through industrial revenue bonds or their 
    equivalent, or in-kind payments does not qualify as government-financed 
    construction.
        3. Section 707.10 is revised to read as follows:
    
    
    Sec. 707.10  Information collection.
    
        Since the information collection requirement contained in 30 CFR 
    707.12 consists only of expenditures on information collection 
    activities that would be incurred by persons in the normal course of 
    their activities, it is exempt from the requirements of the Paperwork 
    Reduction Act (44 U.S.C. 3501 et seq.) and does not require clearance 
    by OMB.
    
    PART 874--GENERAL RECLAMATION REQUIREMENTS
    
        4. The authority citation for Part 874 continues to read as 
    follows:
    
        Authority: 30 U.S.C. 1201 et seq., as amended.
    
        5. Section 874.10 is added to read as follows:
    
    
    Sec. 874.10  Information collection.
    
        (a) In accordance with 44 U.S.C. 3501 et seq., the Office of 
    Management and Budget (OMB) has approved the information collection 
    requirements of this part. The OMB clearance number is 1029-0113. This 
    information is needed to ensure that appropriate reclamation projects 
    involving the incidental extraction of coal are conducted under the 
    authority of Section 528(2) of SMCRA and that selected projects contain 
    sufficient environmental safeguards. Persons must respond to obtain a 
    benefit.
        (b) OSM estimates that the public reporting burden for this part 
    will average 60 hours per project, including time spent reviewing 
    instructions, searching existing data sources, gathering and 
    maintaining the data needed, and completing and reviewing the 
    collection of information. Send comments regarding this burden estimate 
    or any other aspect of these information collection requirements, 
    including suggestions for reducing the
    
    [[Page 7483]]
    
    burden, to the Office of Surface Mining Reclamation and Enforcement, 
    Information Collection Clearance Officer, 1951 Constitution Avenue, 
    N.W., Washington, DC 20240; and the Office of Management and Budget, 
    Office of Information and Regulatory Affairs, Attention: Interior Desk 
    Officer, 725 17th Street, NW, Washington, DC 20503. Please refer to OMB 
    Control Number 1029-0113 in any correspondence.
        6. Section 874.17 is added to read as follows:
    
    
    Sec. 874.17  AML agency procedures for reclamation projects receiving 
    less than 50 percent government funding.
    
        This section tells you, the AML agency, what to do when considering 
    an abandoned mine land reclamation project as government-financed 
    construction under Part 707 of this chapter. This section only applies 
    if the level of funding for the construction will be less than 50 
    percent of the total cost because of planned coal extraction.
        (a) Consultation with the Title V Regulatory Authority. In 
    consultation with the Title V regulatory authority, you must make the 
    following determinations:
        (1) You must determine the likelihood of the coal being mined under 
    a Title V permit. This determination must take into account available 
    information such as:
        (i) Coal reserves from existing mine maps or other sources;
        (ii) Existing environmental conditions;
        (iii) All prior mining activity on or adjacent to the site;
        (iv) Current and historic coal production in the area; and
        (v) Any known or anticipated interest in mining the site.
        (2) You must determine the likelihood that nearby or adjacent 
    mining activities might create new environmental problems or adversely 
    affect existing environmental problems at the site.
        (3) You must determine the likelihood that reclamation activities 
    at the site might adversely affect nearby or adjacent mining 
    activities.
        (b) Concurrence with the Title V Regulatory Authority. If, after 
    consulting with the Title V regulatory authority, you decide to proceed 
    with the reclamation project, then you and the Title V regulatory 
    authority must concur in the following determinations:
        (1) You must concur in a determination of the limits on any coal 
    refuse, coal waste, or other coal deposits which can be extracted under 
    the Part 707 exemption or counterpart State/Indian Tribe laws and 
    regulations.
        (2) You must concur in the delineation of the boundaries of the AML 
    project.
        (c) Documentation. You must include in the AML case file:
        (1) The determinations made under paragraphs (a) and (b) of this 
    section;
        (2) The information taken into account in making the 
    determinations; and
        (3) The names of the parties making the determinations.
        (d) Special requirements. For each project, you must:
        (1) Characterize the site in terms of mine drainage, active slides 
    and slide-prone areas, erosion and sedimentation, vegetation, toxic 
    materials, and hydrologic balance;
        (2) Ensure that the reclamation project is conducted in accordance 
    with the provisions of 30 CFR Subchapter R;
        (3) Develop specific-site reclamation requirements, including 
    performance bonds when appropriate in accordance with State procedures; 
    and
        (4) Require the contractor conducting the reclamation to provide 
    prior to the time reclamation begins applicable documents that clearly 
    authorize the extraction of coal and payment of royalties.
        (e) Limitation. If the reclamation contractor extracts coal beyond 
    the limits of the incidental coal specified in paragraph (b)(1) of this 
    section, the contractor must obtain a permit under Title V of SMCRA for 
    such coal.
    
    [FR Doc. 99-3556 Filed 2-11-99; 8:45 am]
    BILLING CODE 4310-05-P
    
    
    

Document Information

Effective Date:
3/15/1999
Published:
02/12/1999
Department:
Surface Mining Reclamation and Enforcement Office
Entry Type:
Rule
Action:
Final rule.
Document Number:
99-3556
Dates:
Effective March 15, 1999.
Pages:
7470-7483 (14 pages)
PDF File:
99-3556.pdf
CFR: (4)
30 CFR 707.5
30 CFR 707.10
30 CFR 874.10
30 CFR 874.17