30 CFR Part 917

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 917

Kentucky Permanent Regulatory Program; Bond Forfeiture,

Definitions, and Inspection Frequency

AGENCY: Office of Surface Mining Reclamation and Enforcement (OSM),

Interior.

ACTION: Final rule; approval of amendment.

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

SUMMARY: OSM is announcing the approval of proposed program amendments

to the Kentucky permanent regulatory program (hereinafter referred to

as the Kentucky program) under the Surface Mining Control and

Reclamation Act of 1977 (SMCRA). The proposed amendments include

revisions to those portions of the Kentucky Administrative Regulations

dealing with bond forfeiture funds, definitions of terms, and

inspection frequency.

EFFECTIVE DATE: February 24, 1994.

FOR FURTHER INFORMATION CONTACT:

William J. Kovacic, Director, Lexington Field Office, Office of Surface

Mining Reclamation and Enforcement, 2675 Regency Road, Lexington

Kentucky 40503, Telephone (606) 233-2896.

SUPPLEMENTARY INFORMATION:

I. Background on the Kentucky Program.

II. Submission of Amendment.

III. Director's Findings.

IV. Summary and Disposition of Comments.

V. Director's Decision.

VI. Procedural Determinations.

I. Background on the Kentucky Program

On May 18, 1982, the Secretary of the Interior conditionally

approved the Kentucky program. Information pertinent to the general

background, revisions, modifications, and amendments to the proposed

permanent program submission, as well as the Secretary's findings, the

disposition of comments and a detailed explanation of the conditions of

approval can be found in the May 18, 1982, Federal Register (47 FR

21404-21435). Subsequent actions concerning the conditions of approval

and program amendments are identified at 30 CFR 917.11, 917.13, 917.15,

917.16, and 917.17.

II. Submission of Amendments

By letter dated May 21, 1993, (Administrative Record No. KY-1221)

Kentucky submitted proposed amendments containing additions and

modifications to 405 KAR 10:050 Bond forfeiture, 405 KAR 12:001

Definitions, and 405 FAR 12:010 General provisions for inspection and

enforcement.

OSM announced receipt of the proposed amendments in the June 11,

1993, Federal Register (58 FR 32618), and in the same notice, opened

the public comment period and provided opportunity for a public hearing

on the adequacy of the proposed amendments. The comment period closed

on July 12, 1993.

On June 14, 1993 (Administrative Record No. KY-1226), Kentucky

revised the proposed amendment at 405 KAR 12:001 by adding a definition

of the term ``unwarranted failure to comply'', since that term is used

in 405 KAR 12:020 section 8. The proposed definition is identical to

the existing definition set forth in 405 KAR 7:001. Since the

definition already exists as part of Kentucky's approved program, the

Director determined that no purpose would be served by reopening the

public comment period for the modification submitted by Kentucky on

June 14, 1993.

By letter dated October 19, 1993 (Administrative Record No. KY-

1242), Kentucky submitted a proposed program amendment which was

intended to replace the proposals submitted on May 21, 1993, and June

14, 1993. The regulations contained in the October 19, 1993, submission

completed the Kentucky promulgation process under Kentucky Revised

Statue Chapter 13A.

OSM announced receipt of the October 19, 1993 proposed amendment in

the November 5, 1993, Federal Register (58 FR 58997), and in the same

notice, reopened the public comment period and provided opportunity for

a public hearing on the adequacy of the proposed amendment. The comment

period closed on November 22, 1993.

III. Director's Findings

Set forth below, pursuant to SMCRA and the Federal regulations at

30 CFR 732.15 and 732.17 are the Director's findings concerning the

proposed amendments to the Kentucky program.

Revisions not specifically discussed below concern nonsubstantive

wording changes, or revised cross-references and paragraph notations to

reflect organizational changes resulting from this amendment.

A. Revisions to Kentucky's Regulations That Are Substantively Identical

to the Corresponding Federal Regulations

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

Federal

State regulations (405 KAR) Subject counterpart

(30 CFR)

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

12:001Sec. 1(29)............. Definition of term-- 843.5

``unwarranted failure to

comply''.

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

Because the above proposed revision is identical in meaning to the

corresponding Federal regulation, the Director finds that Kentucky's

proposed rule is no less effective than the Federal rule.

B. Revisions to Kentucky's Regulations That Are Not Substantively

Identical to the Corresponding Federal Regulations

1. General

In several sections of the regulations affected by this amendment,

Kentucky is proposing to revise the use of the terms ``permittee'',

``operator'', and ``person'' in order to achieve consistency in the use

of the terms and to more clearly identify the entities that are

intended to be subject to the particular statutory requirements

involved. The Director finds that the proposed revisions add clarity to

Kentucky's rules and are no less effective than the Federal regulations

as listed below.

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

State regulations proposed for

revision Federal regulations

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

405 KAR 10:050Section 2(4)......... 30 CFR 800.50(d) (1)

405 KAR 12:010Necessity and 30 CFR 840.11(e) (2)

Function.

405 KAR 12:010Section 3(2)......... 30 CFR 840.12(a)

405 KAR 12:010Section 3(5) (a)..... 30 CFR 840.11(a)

405 KAR 12:010Section 3(5) (b)..... 30 CFR 840.11(b)

405 KAR 12:010Section 4(1)......... 30 CFR 840.14(c) (1)

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

2. 405 KAR 12:001 Definitions for 405 KAR Chapter 12

Kentucky proposes to add a definition of ``willfully and willful

violation'' which is identical to the definition currently found in

Kentucky's program at 405 KAR 7:001, 8:001 and 10:001, and which was

approved by the Director on October 1, 1992 (57 FR 45297). The Director

finds that this definition was previously approved in other sections of

the Kentucky program and the proposal to add it to 405 KAR Chapter 12

will not render Kentucky's regulations less effective than the Federal

program.

3. 405 KAR 12:010 General Provisions for Inspection and Enforcement

Kentucky proposes to revise its regulations governing frequency of

inspections set forth at 405 KAR 12:010 section 3(5) (a) by providing

an exception to the monthly partial inspection requirement where the

cabinet has received notice of temporary cessation of operations. As

proposed for revision, if the cabinet has received notice of temporary

cessation, the partial inspections shall continue until the cabinet

determines that the permit area is sufficiently stable to insure that

the quarterly complete inspections required by 405 KAR 12:010 section

3(5)(b) will provide adequate inspection of the permit area. The

Federal rule at 30 CFR 840.11(a) provides for ``partial inspections of

each inactive surface coal mining and reclamation operation . . . as

are necessary to ensure effective enforcement of the approved State

program.'' 30 CFR 840.11(f) (1) includes as an inactive surface coal

mining and reclamation operation one for which the regulatory authority

has received written notice of temporary cessation of mining. The

Director finds that the proposed rule represents reasonable exercise of

Kentucky's discretion under 30 CFR 840.11(a) and is no less effective

than the Federal counterparts at 30 CFR 840.11 (a) and (f).

C. Revisions to Kentucky's Regulations With No Corresponding Federal

Regulations

1. General

a. Kentucky proposes to revise the introductory material at 405 KAR

10:050 and 405 KAR 12:010 to include appropriate statutory and

regulatory citations relating to the materials covered by the

respective regulations. The Director finds that the inclusion of this

material is not inconsistent with any requirements of SMCRA or the

Federal regulations.

b. In proposed revisions to the Necessity and Function sections of

405 KAR 10:050, 12:001 and 12:010, as well as 405 KAR 10:050 section

1(1) and 405 KAR 12:010 section 4(3), Kentucky refers to administrative

regulations, rather than just regulations as currently expressed in

those provisions. The Director finds that the proposed revisions add

appropriate clarity to the State's program and do not adversely affect

any requirement of SMCRA or the Federal regulations.

c. Kentucky proposes to revise the Necessity and Function section

of 405 KAR 10:050 by adding the following clarifying sentence:

This administrative regulation establishes criteria under which

unused forfeited bond funds shall be returned to the person from

whom they were collected.

The Director finds that this proposed addition will not render

Kentucky's program inconsistent with any provisions of the Federal

program.

2. 405 KAR 10:050 Bond Forfeiture

Kentucky proposes to revise this regulation by adding section 2(5)

which provides for the return of unused forfeited bond funds to the

person from whom they were received, subject to the right to attach or

set-off the funds under state law. The provision applies where the

cabinet has not completed the reclamation plan on the forfeited site

and the site, including any related off-site disturbances, is

completely overlapped by a subsequent permanent program permit and is

completely disturbed by the overlapping permittee. As proposed, the

provision is limited to interim program sites forfeited on or after

July 15, 1988, and to forfeited permanent program sites. While there is

no direct Federal counterpart to this proposal, the Director has

determined that it is not inconsistent with the Federal rule at 30 CFR

800.50(d)(2) which provides for the return of unused funds to the

person from whom they were collected where the amount of performance

bond forfeited is more than the amount necessary to complete

reclamation. Therefore, the Director finds that the proposal is not

inconsistent with the requirements of SMCRA or the Federal regulations.

IV. Summary and Disposition of Comments

Public Comments

The public comment periods and opportunities to request a public

hearing were announced in the June 11, 1993 Federal Register (58 FR

32618), and the November 5, 1993 Federal Register (58 FR 58997). The

public comment periods closed on July 12, 1993, and November 22, 1993,

respectively. No one requested an opportunity to testify at the

scheduled public hearings so no hearings were held.

The Kentucky Resources Council (KRC) filed written comments on July

23, 1993 (Administrative Record Number KY-1331), and supplemented those

comments on November 30, 1993 (Administrative Record Number KY-1259). A

summary of those comments and their disposition is set forth below.

405 KAR 10:050

KRC expressed concern that the revisions to subsection (5) might

result in the release of forfeited bonds in cases where the permit area

is completely disturbed under an overlapping permit, and where there is

off-permit disturbance that should be addressed under the forfeited

bond. As a result of the concerns raised by KRC, Kentucky revised 405

KAR 10:050 section 2(5) in its October 19, 1993, resubmission by making

specific reference to the inclusion of any off-site disturbance. In its

November 30, 1993, letter, after reviewing Kentucky's revisions, KRC

restated its concern with particular reference to ``those cases, for

example, where the former mining operation has caused damage to the

hydrologic balance (such as loss or damage to water supplies, pollution

of groundwater resources), or where other off-site damage might not be

readily apparent or yet manifest, the allowance of a return of unused

bond funds where the site is overlapped by a new permit and bond may

result in unfunded liabilities''. In its Statement of Consideration

(Administrative Record Number KY-1333) filed by Kentucky on September

2, 1993, the State discusses these issues in some detail. In specific

response to KRC's original concerns, Kentucky stated that it ``has no

intention of releasing forfeited bond funds when there is off-permit

disturbance for which the original bond stands liable and such

disturbance was not encompassed in the overlapping permit.'' In

response to comments filed by another party (Item 7, Statement of

Consideration), Kentucky stated that ``[T]he original permittee's bond

does not become ``unused'' and ``more than the amount necessary to do

reclamation'' within the meaning of KRS 350.131(2) until the new

permittee disturbs the entire overlapped area, triggering a reclamation

obligation on his behalf. Prior to that, the new permittee could delete

the unreclaimed area from its permit. The Cabinet must be assured that

the original forfeited funds will in fact be unnecessary before it can

release the funds.'' Finally, in response to KRC's concern regarding

liabilities that may not become apparent until after a bond has been

released, there is no authority in SMCRA or the Federal regulations to

retain bond funds after all release requirements have been met, for

such unknown liabilities. The State can always pursue the original

permittee if such liabilities occur. The Director feels that the

clarification provided by Kentucky adequately responds to the concerns

raised by KRC.

405 KAR 12:001

KRC objects to the proposed definition of ``willfully and willful

violation'' because it appears to impose a higher burden for

demonstrating the willfulness of a violation than does the Federal

counterpart at 30 CFR 843.5. The State's definition was previously

considered and approved by OSM in a Federal Register notice dated

October 1, 1992 (57 FR 45295). In that approval, the Director observed

``[T]he Federal regulations provide separate definitions for

``willfully'' at 30 CFR 846.5, and ``willful violation'' at 30 CFR

701.5 and 843.5. Unlike the Federal definition of ``willful

violation'', Kentucky's proposed combined definition does not stipulate

that the person who committed the act or omission must have intended

the result that actually occurs. However, since Kentucky's proposed

definition includes all intentional acts and omissions, it will

necessarily include all acts and omissions specified in the Federal

definitions. Because Kentucky's proposed combined definition will

result in sanctions and penalties no less stringent than those

resulting from the separate Federal definitions, the Director finds

that the proposal is no less effective than the Federal regulations.''

Based upon the same reasoning as discussed above, the Director is

approving the proposed addition of the definition at 405 KAR

12:001(30).

405 KAR 12:010

KRC has raised two concerns regarding the reduction in inspection

frequency proposed in section 3(5). KRC feels that the proposal is

ambiguous as to whether or not a finding of site stability must precede

any reduction of inspection frequency. In response to this concern, the

State, in its Statement of Considerations dated August 13, 1993

(Administrative Record No. KY-1333), pointed out that ``[A]fter a

notice of temporary cessation is filed, the regulations require the

cabinet to conduct partial inspections until the cabinet determines

that the permit area is sufficiently stable with respect to mass

stability, erosion, revegetation, water quality, and other reclamation

requirements so that quarterly complete inspections will provide

adequate inspection of the permit area.'' OSM feels that the State's

explanation of its interpretation of this regulation resolves the

concern raised by KRC. The second concern expressed by KRC involves the

State's reference to reduction in partial inspection frequency upon

completion of Phase I reclamation. The cited reference was approved by

OSM on May 18, 1982 (47 FR 21404), and has not been submitted to OSM

for reconsideration as part of the current amendment. However, OSM

feels that the issue requires further review, in light of the

counterpart Federal rule at 30 CFR 840.11(f)(2) published on August 16,

1982 (47 FR 35620). If, as a result of that review, OSM determines that

revisions to Kentucky's regulations are required, action in accordance

with 30 CFR Part 732 will be taken to insure that Kentucky's program is

no less effective than the Federal counterpart.

Agency Comments

Pursuant to section 503(b) of SMCRA and the implementing

regulations of 30 CFR 732.17(h)(11)(i), comments were solicited from

various government agencies with an actual or potential interest in the

Kentucky program. The U.S. Forest Service, the Bureau of Land

Management, the Environmental Protection Agency, and the Soil

Conservation Service responded but did not have any substantive

comments on the proposed rules. The Mine Safety and Health

Administration (MSHA) raised two concerns in their response. In

connection with the bond forfeiture procedures at 405 KAR 10:050

section 2(4), MSHA feels that the word ``operator'' should be deleted

from this section since the agency questions how the operator could be

held liable if the operator is no longer on the site and/or has no

interest in the bond. However, the question of liability is one of fact

to be determined in each individual case. In addition, the use of the

term operator is not part of the current amendment inasmuch as the term

already exists in section 2(4) and is not part of the proposed

revisions. Therefore, the Director is taking no action regarding this

comment.

MSHA also feels that 405 KAR 12:010 section 3(5)(a), regarding

inspection frequency, should be revised in order to clarify that a

reduction in partial inspection frequency cannot occur until after

Phase I reclamation. In reviewing the proposed revisions to section

3(5)(a), as discussed in Finding III.B.2. herein, the Director has

determined that Kentucky's proposal is no less effective than the

Federal counterpart at 30 CFR 840.11 (a) and (f). The Federal rule

clearly provides the regulatory authority with certain discretion in

conducting partial inspections of inactive surface coal mining and

reclamation operations. In subsection (f), the rule identifies an

inactive site as one for which the regulatory authority has received

notice of temporary cessation of operations. Kentucky's proposal is

consistent with the Federal rule in that it allows for a reduction in

partial inspections upon completion of Phase I reclamation, or upon

receipt of notification of temporary cessation of operations.

Therefore, the Director believes that the proposal is acceptable as

submitted.

V. Director's Decision

Based on the above findings, the Director is approving the program

amendment as submitted by Kentucky on May 21, 1993, and revised and

resubmitted on June 14, 1993, and October 19, 1993. The Federal

regulations at 30 CFR part 917 codifying decisions concerning the

Kentucky program are being amended to implement this decision. This

final rule is being made effective immediately to expedite the State

program amendment process and to encourage the State to conform its

program with the Federal standards without delay. Consistency of State

and Federal standards is required by SMCRA.

Environmental Protection Agency (EPA) Concurrence

Under 30 CFR 732.17(h)(11)(ii), the Director is required to obtain

the written concurrence of the Administrator of the Environmental

Protection Agency (EPA) with respect to any provisions of a State

program amendment that relate to air or water quality standards

promulgated under the authority of the Clean Water Act (33 U.S.C. 1251

et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq.). The Director

has determined that this amendment contains no provisions in these

categories and that EPA's concurrence is not required.

VI. Procedural Determinations

Executive Order 12866

This final rule is exempt from review by the Office of Management

and Budget under Executive Order 12866.

Executive Order 12778

The Department of the Interior has conducted the reviews required

by section 2 of Executive Order 12778 and has determined that, to the

extent allowed by law, this rule meets the applicable standards of

subsections (a) and (b) of that section. However, these standards are

not applicable to the actual language of State regulatory programs and

program amendments since each such program is drafted and promulgated

by a specific State, not by OSM. Under sections 503 and 505 of the

Surface Mining Control and Reclamation Act (SMCRA) (30 U.S.C. 1253 and

1255) and 30 CFR 730.11, 732.15 and 732.17(h)(10), decisions on

proposed State regulatory programs and program amendments submitted by

the States must be based solely on a determination of whether the

submittal is consistent with SMCRA and its implementing Federal

regulations and whether the other requirements of 30 CFR parts 730,

731, and 732 have been met.

National Environmental Policy Act

No environmental impact statement is required for this rule since

section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency

decisions on proposed State regulatory program provisions do not

constitute major Federal actions within the meaning of section

102(2)(C) of the National Environmental Policy Act, 42 U.S.C.

4332(2)(C).

Paperwork Reduction Act

This rule does not contain information collection requirements that

require approval by the Office of Management and Budget under the

Paperwork Reduction Act, 44 U.S.C. 3507 et seq.

Regulatory Flexibility Act

The Department of the Interior has determined that this rule will

not have a significant economic impact on a substantial number of small

entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

The State submittal which is the subject of this rule is based upon

counterpart Federal regulations for which an economic analysis was

prepared and certification made that such regulations would not have a

significant economic effect upon a substantial number of small

entities. Hence, this rule will ensure that existing requirements

previously promulgated by OSM will be implemented by the State. In

making the determination as to whether this rule would have a

significant economic impact, the Department relied upon the data and

assumptions for the counterpart Federal regulations.

List of Subjects in 30 CFR 917

Intergovernmental relations, Surface mining, Underground mining.

Dated: February 11, 1994.

Carl C. Close,

Assistant Director, Eastern Support Center.

For the reasons set forth in the preamble, title 30, chapter VII,

subchapter T of the Code of Federal Regulations is amended as set forth

below:

PART 917--KENTUCKY

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

follows:

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

2. 30 CFR 917.15, is amended by adding new paragraph (uu) to read

as follows:

Sec. 917.15 Approval of regulatory program amendments.

* * * * *

(uu) The following amendment submitted to OSM on May 21, 1993, and

modified and resubmitted on June 14, 1993, and October 19, 1993, is

approved effective February 24, 1994. The amendment consists of

additions and modifications to the following provisions of the Kentucky

Administrative Regulations (KAR):

405 KAR 10:050 Statutory and regulatory citations

405 KAR 10:050 Necessity and Function section

405 KAR 10:050 Section 1(1) General

405 KAR 10:050 Section 2(4) and (5) Procedures

405 KAR 12:001 Necessity and Function section

405 KAR 12:001(29) Definition of ``unwarranted failure to comply''

405 KAR 12:001(30) Definition of ``willfully'' and ``willful

violation''

405 KAR 12:010 Statutory and regulatory citations

405 KAR 12:010 Necessity and Function section

405 KAR 12:010 Section 3(2) Presentation of credentials

405 KAR 12:010 Section 3(5)(a) Partial inspections

405 KAR 12:010 Section 3(5)(b) Complete inspections

405 KAR 12:010 Section 4(1) Records of inspections

405 KAR 12:010 Section 4(3) Records of inspections

[FR Doc. 94-4146 Filed 2-23-94; 8:45 am]

BILLING CODE 4310-55-M