Texas Regulatory Program

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 943

[SPATS No. TX-024-FOR]

Texas Regulatory Program

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

Interior.

ACTION: Final rule; approval of amendment.

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

SUMMARY: OSM is approving a proposed amendment to the Texas regulatory

program (hereinafter referred to as the ``Texas program'') under the

Surface Mining Control and Reclamation Act of 1977 (SMCRA). Texas

proposed revisions to its regulations pertaining to self-bonding. The

amendment is intended to revise the Texas program to be consistent with

the corresponding Federal regulations, provide additional safeguards,

and improve operational efficiency.

EFFECTIVE DATE: December 13, 1995.

FOR FURTHER INFORMATION CONTACT:

Jack R. Carson, Acting Director, Tulsa Field Office, Office of Surface

Mining Reclamation and Enforcement, 5100 East Skelly Drive, Suite 470,

Tulsa, Oklahoma 74135-6548, Telephone: (918) 581-6430.

SUPPLEMENTARY INFORMATION:

I. Background on the Texas Program

II. Submission of the Proposed Amendment

III. Director's Findings

IV. Summary and Disposition of Comments

V. Director's Decision

VI. Procedural Determinations

I. Background on the Texas Program

On February 16, 1980, the Secretary of the Interior conditionally

approved the Texas program. Background information on the Texas

program, including the Secretary's findings, the disposition of

comments, and the conditions of approval can be found in the February

27, 1980, Federal Register (45 FR 12998). Subsequent actions concerning

the conditions of approval and program amendments can be found at 30

CFR 943.10, 943.15, 943.16.

II. Submission of the Proposed Amendment

By letter dated August 11, 1995 (Administrative Record No. TX-593),

Texas submitted a proposed amendment to its program pursuant to SMCRA.

Texas submitted the proposed amendment at its own initiative. Texas

proposed to revise 16 Texas Administrative Code 11.221, Texas Coal

Mining Regulations (TCMR) at subsection 806.309(j)(2)(C)(iv) concerning

alternative criteria for acceptance of self-bonds to ensure reclamation

performance.

OSM announced receipt of the proposed amendment in the September

12, 1995, Federal Register (60 FR 47316), and in the same document

opened the public comment period and provided an opportunity for a

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

comment period would have closed on October 12, 1995.

During its review of the amendment, OSM identified a concern

relating to TCMR 806.309(j)(2)(C)(iv)(II)(C). Specifically OSM needed

clarification on what effect, if any, Texas' existing 25 percent net

worth limitation provision at TCMR 806.309(j)(5)(A) would have on the

proposed 16\2/3\ percent net worth limitation provision at TCMR

806.309(j)(2)(C)(iv)(II)(C). OSM notified Texas of this concern by

telephone on September 23, 1995 (Administrative Record No. TX-593.03).

By letter dated September 25, 1995 (Administrative Record No. TX-

593.02), Texas responded to OSM's concern by submitting a revision to

its proposed program amendment. Texas proposed an additional revision

to TCMR 806.309(j)(2)(C)(iv) by adding the following clarification

provision.

The limitation contained in subparagraph (II)(C) of this section

applies to applicants or guarantors qualifying pursuant to

subparagraph (II) only and does not affect the limitation set out in

Section 806.309(j)(5)(A) for applicants or guarantors seeking

acceptance of a self-bond pursuant to paragraphs i-iii or

subparagraph (I) of this section.

Based upon the additional explanatory revision to the proposed

program amendment submitted by Texas, OSM reopened the public comment

period in the October 16, 1995, Federal Register (60 FR 53567). The

public comment period closed on October 31, 1995.

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 amendment.

TCMR 806.309(j)(2)(C)(iv) Self-Bonding: Requirements for a Business and

Governmental Entities, Alternative Financial Eligibility Criteria

1. Existing State Regulation Requirements

Like the Federal self-bonding regulations at 30 CFR 800.23(b)(3)

(i), (ii), and (iii), Texas has standard financial criteria for self-

bonding at Sec. 806.309(j)(2)(C) (i), (ii), and (iii) that are

substantively identical to the corresponding Federal regulations. Under

the State's standard criteria, an applicant can qualify for self-

bonding by meeting one of three criteria that pertain to having either

a bond rating of A or higher; or $10 million net worth and certain

financial ratio values; or having fixed assets of $20 million and

certain financial ratio values.

To provide additional flexibility to financially strong firms,

Texas proposed an alternative four-part test at

Sec. 806.309(j)(2)(C)(iv) that was approved by OSM on February 19,

1992, as an alternative test under the Texas self-bonding program (57

FR 5983). Texas' alternative test allows an applicant to qualify if it

meets four criteria in combination. Specifically, an applicant applying

for self-bonding under Sec. 806.309(j)(2)(C)(iv) must have an

investment-grade bond rating (Sec. 806.309(j)(2)(C)(iv)(I)); tangible

net worth of at least $10 million and fixed assets in the United States

of $20 million (Sec. 806.309(j)(2)(C)(iv)(II)); a ratio of total

liabilities to net worth that is equal to or less than the industry

median (Sec. 806.309(j)(2)(C)(iv)(III)); and a ratio of current assets

to current liabilities that is equal to or greater than the industry

median or a current credit

[[Page 63923]]

rating of 4A2 or higher from Dun and Bradstreet Corporation

(Sec. 806.309)(j)(2)(C)(iv)(IV)).

There is no direct Federal counterpart regulation to Texas'

alternative test for self-bonding. However, as explained in the

February 19, 1992, Federal Register (57 FR 5983), the Director found

that when an applicant for self-bonding in Texas meets the combined

requirements of the alternative test at Sec. 806.309(j)(2)(C)(iv), the

applicant is complying with financial strength and solvency

requirements that are no less effective than the standard financial

safeguards of the Federal regulations at 30 CFR 800.23(b)(3).

2. Proposed State Regulation Requirements

On its own initiative, Texas proposes to recodify and expand the

existing alternative financial criteria at Sec. 806.309(j)(2)(C)(iv) to

provide applicants a choice between two, four-part financial tests. The

State's intention is to maintain consistency with the Federal

regulations while providing flexibility to financially strong

applicants who apply for self-bonding under its alternative eligibility

criteria.

Texas proposes to recodify its existing regulations at

Sec. 806.309(j)(2)(C)(iv) (I)-(IV) as Sec. 806.309(j)(2)(C)(iv)(I) (A),

(B), and (C). This remodified section serves as the first optional

financial test under the State's proposed alternative tests for self-

bonding. Texas proposes to add Sec. 806.309(j)(2)(C)(iv)(II) (A), (B),

and (C). This new section constitutes the second optional financial

test under the State's proposed alternative tests for self-bonding.

The State's proposal allows applicants the option of qualifying for

self-bonding by meeting the combined requirements of either

subparagraph (I) or subparagraph (II) of Sec. 806.309(j)(2)(C)(iv).

These proposed requirements are further discussed below:

a. Investment-Grade Bond Rating (Applicable to both Alternative

Test I and Test II). TCMR Sec. 806.309(j)(2)(C)(iv). First, an

applicant applying for self-bonding under either of the two proposed

alternative financial tests at Sec. 806.309(j)(2)(C)(iv) (I) or (II)

must have an investment-grade rating for its most recent bond issuance

(Baa3 or higher from Moody's Investor Service and BBB- or higher from

Standard and Poor's Corporation). This requirement is identical to the

existing criteria at Sec. 806.309(j)(2)(C)(iv)(I).

In the preamble to the final Federal self-bonding regulations (48

FR 36418, August 10, 1983), OSM stated that ``The services [bond rating

services] are relied upon heavily by creditors and maintain a high rate

of predictive success [about a bond issuer's ability to re-pay bond

issues].'' OSM's allowance of a bond rating of ``A or higher'' in the

Federal regulations as a stand-alone test for self-bonding is based on

reliance on the expertise of the rating service to evaluate the

financial position of a firm. In determining the rating of a bond

issue, rating services conduct an in-depth financial analysis of the

issuer. Using Standard and Poor's rating of bonds issued by public

utilities as an example, some factors that it considers include: (1)

Legal considerations such as the rate covenant (which defines the size

and source of the utility's financial reserve); the flow of funds (or

the priority of claims on the revenue stream); and the legal

implications of energy sales contracts (the company's potential

liabilities); (2) economic considerations such as income trends;

diversification of the employment base (analysis of key local

industries); and growth trends; and (3) systems considerations such as

projected energy growth; generating capacity and fuel sources; and

whether customer profiles indicate that end-users are balanced in terms

of including residential, commercial and industrial customers. Also

considered are the company's capital improvement and financing plans;

the stability and predictability of the revenue stream pledged to pay

debt service; the liquidity position and equity position of the

company; and the financial implications of the regulatory environment.

In the preamble to OSM's final self-bonding regulations, OSM also

explained that since it was allowing a self-bonding applicant to

qualify by meeting one financial test (unlike EPA that requires more

than one test, and thus allows a lower, investment-grade bond rating),

an applicant that selected the bond rating test would have to have

bonds rated ``A or higher.'' This is because the bond rating of ``A or

higher'' is a stand-alone test in the Federal regulations. While not

specifically addressed by OSM in its final regulations on self-bonding,

it follows that a State's self-bonding program that requires an

applicant to meet multiple financial criteria in addition to having an

investment-grade bond rating is no less effective than the Federal

regulations that allow a bond rating of ``A or higher'' as a stand-

alone financial test.

As an additional safeguard, Texas is requiring applicants to notify

the Commission of any rating change to a lower bond rating than the

applicant had at the time the self-bond was approved. If an applicant's

rating is down-graded, then the Commission will immediately hold a

hearing to decide whether the applicant may remain in the self-bonding

program. This requirement is in addition to the existing requirement at

Sec. 806.309(j)(8) for applicants to notify the Commission if it no

longer meets the criteria at (2)(C) and (2)(D) of the self-bonding

regulations.

b. Alternative Test I. TCMR 806.309(j)(2)(C)(iv)(I)(A). Under

subparagraph (I)(A), Texas proposes to recodify the exiting

requirements at Sec. 806.309(j)(2)(C)(iv)(II) [wherein an applicant

must demonstrate that it has a tangible net worth of at least $10

million and fixed assets in the United States totaling at least $20

million]. Other than recodifying this section, no changes are proposed;

therefore, the requirements at Sec. 806.308(j)(2)(C)(iv)(I)(A) are no

less effective than the Federal self-bonding requirements at 30 CFR

800.23(b)(3).

TCMR 806.309(j)(2)(C)(iv)(I)(B). Texas is revising requirements at

Sec. 806.309(j)(2)(C)(iv)(III) to provide flexibility under the

recodified subparagraph at Sec. 806.309(j)(2)(C)(iv)(I)(B). The State

is revising this sub-part to provide an optional test whereby an

applicant must demonstrate that it has either a ratio of total

liabilities to net worth of 2.5 or less or a ratio of total liabilities

to net worth that is equal to or less than the industry median reported

by Dun and Bradstreet Corporation for the applicant's primary SIC code.

A ratio value of 2.5 or less is the current standard test in the

State's self-bonding program at Sec. 806.309(j)(2)(C) (ii) and (iii),

and in the Federal regulations at 30 CFR 800.23(b)(3) (ii) and (iii).

Therefore, allowing applicants the option of meeting either the

standard ratio value of 2.5 or less, or having a ratio value that is

equal to or less than the industry median is no less effective than the

Federal regulations for reasons further explained below.

The rationale for comparing an applicant's ratio of total

liabilities to net worth to the industry median was discussed in detail

in the preamble to the final Texas rule (57 FR 5983, February 19,

1992). Industry medians reflect the relative financial status of firms

within an industry classified by net worth. Comparing a firm with

current industry medians is more meaningful than comparing it with

static values for financial ratios that represent the conditions of an

industry at an historical point in time. OSM determined that ratio

values that are keyed to an applicant's industry

[[Page 63924]]

medians are an appropriate measure of how the applicant performs

financially in comparison to the rest of its industry. On this basis,

OSM approved the use of industry median values in lieu of the standard

value of 2.5 or less. However, since OSM's approval of Texas'

alternative self-bonding test on February 19, 1992, changes have

occurred in general financial accounting requirements resulting in

industry median values that do not consistently reflect the true

comparative financial strength of applicants for self-bonding.

For example, the Financial Accounting Standards Board (FASB) has

issued new accounting standards that firms must follow in order to be

in compliance with Generally Accepted Accounting Principles (GAAP). One

such standard is the ``Statement of Financial Accounting Standards No.

109, `Accounting for Income Taxes' '' (SFAS 109) issued in 1991. The

effects of SFAS 109 and another accounting standard, ``Employer's

Accounting for Postretirement Benefits Other than Pensions'' (SFAS

106), are complex and affect both sides of a firm's balance sheet in a

variety of ways.

Upon review, ratio values for a firm that has adopted SFAS 106

(post-retiree health benefits) may not compare well with ratio values

for a firm that has not yet adopted the standard or a firm that is on

different implementation schedule. On the other hand, a firm that has

adopted SFAS 109 (accounting for deferred income taxes) may appear

financially stronger than it actually is. Accounting for deferred tax

assets is an example. In an article entitled ``Evaluating Deferred-Tax

Assets: Some Guidance for Lenders'' (Commercial Lending Review, July

1994, pp. 12-25), Eugene Comiskey and Charles Mulford state that

``deferred tax assets result in increases to earnings, assets, and

shareholders' equity which in essence do not increase the financial

strength of the firm from that before adoption of FASB 109 [SFAS

109].'' The authors advise that deferred tax assets ``especially those

recorded for various tax carryforwards, share features with intangible

assets--assets that are often deducted from equity in the measurement

of tangible net worth in debt covenants.'' These examples illustrate

the many complexities involved in analyzing the interdependent effects

that recent FASB standards have had on the financial status of self-

bonding applicants. Therefore, Texas proposes to revise its alternative

test to allow financially strong applicants the flexibility of

qualifying by either having a ratio of total liabilities to net worth

that meets the standard criteria (2.5 or less) or a ratio value that

meets the industry median test.

Changes to accounting standards notwithstanding, ratio analysis

based on industry medians, (industry norms) has merit when comparing

firms with similar conditions (net worth and asset size) in the same

industry. However, not all firms are adopting the FASB financial

accounting standards during the same accounting year and/or in the same

manner; so the industry medians do not always reflect a level financial

playing field for the purpose of comparing a firm to its industry.

Under the State's proposal, an applicant that meets the standard

criterion, 2.5 or less for the ratio of total liabilities to net worth,

satisfies the Federal ceiling for this ratio under the Federal

regulations at 30 CFR 800.23(b)(3) (ii) and (iii). In addition, the

ratio criterion based on comparison with the industry median is an

approved financial test in the State's existing alternative criteria

for self-bonding. Therefore, Texas' proposed revision at

Sec. 806.309(j)(2)(C)(iv)(I)(B) that allows an applicant the option of

qualifying under either of these two ratio criteria is no less

effective than the Federal regulations.

TCMR 806.309(j)(2)(C)(iv)(I)(C). Under subparagraph (I)(C), Texas

proposes to recodify the existing State requirement at

Sec. 806.309(j)(2)(iv)(IV). Other than recodifying this section, no

changes are proposed. Therefore, the State's proposed requirements at

Sec. 806.309(j)(2)(iv)(I)(C) are no less effective than the Federal

regulations.

c. Alternative Test II. TCMR 806.309(j)(2)(C)(iv)(II). Applicants

applying for self-bonding under the Federal regulations at 30 CFR

800.23(b)(3) (ii) and (iii) and under the State's standard self-bonding

test at Sec. 806.309(j)(2)(C) (ii) and (iii) are required to have

certain financial ratio values that indicate solvency and a reasonable

liquidity position. Rather than measuring an applicant's liquidity

position by requiring certain values for the ratio of current assets to

current liabilities and the ratio of total liabilities to net worth,

Texas is proposing alternative criteria to demonstrate financial

strength.

In OSM's final self-bonding rules (48 FR 36418, August 10, 1983),

OSM indicated that the self-bonding program was established at 30 CFR

800.23 for firms that could demonstrate a low likelihood of bankruptcy,

debts that are not disproportionate to assets, and reasonable

liquidity. OSM also stated that the ``New Sec. 800.23 allows a State to

develop a comprehensive self-bonding program to balance the risk of

forfeiture versus the benefits to financially sound operators of a

self-bonding program,'' and that . . . ``These final rules [Federal

regulations] contain standards general enough to take into account

state-specific conditions.'' To recognize variability among financially

strong industries mining coal in Texas, the State proposes to add a

second set of alternative criteria to provide financially strong

applicants an additional option for demonstrating liquidity and

financial strength. This proposed alternative test will provide

flexibility and increase the availability of the self-bonding program

without jeopardizing the level of reclamation assurance.

Texas' new proposed alternative test at

Sec. 806.309(j)(2)(C)(iv)(II), consists of three subparagraphs. All

financial criteria (including the investment-grade bond rating

discussed above) must be met in combination in order for an applicant

to qualify for self bonding under this proposed alternative test.

TCMR 806.309(j)(2)(C)(iv)(II)(A). Texas is proposing that an

applicant applying for self-bonding have a net worth of at least $100

million and fixed assets in the United States totaling at least $200

million. These proposed levels of net worth and fixed assets are ten

times greater than the $10 and $20 million respective levels required

by the standard self-bonding criteria at Sec. 806.309(j)(2)(C) (i),

(ii), and (iii), and the counterpart Federal regulations at 30 CFR

800.23(b)(3) (i), (ii), and (iii). Intangible assets such as goodwill,

patents, royalties, and trademarks (if any) are included in the

calculation of net worth in this proposal; whereas in the existing

approved alternative test and standard criteria, intangible assets are

not counted in the calculation of net worth. However, the Director

finds that a tenfold increase in the required level of net worth from

$10 million to $100 million provides assurance, no less effective than

the Federal regulations, that sufficient assets should be available to

conduct reclamation and avoid bankruptcy. Since the levels of net worth

and fixed assets under this proposal require financial strength levels

that are higher than the existing levels in the Federal counterpart

regulations at 30 CFR 800.23(b)(3) (i), (ii), and (iii), the State's

requirements at Sec. 806.309(j)(2)(C)(IV)(II)(A) are no less effective

than the Federal regulations.

TCMR 806.309(j)(2)(C)(IV)(II)(B). Under subparagraph (II)(B), the

Texas proposal requires the applicant to have issued securities in

accordance with the requirements of the Securities Act of 1933, and

that the applicant is subject to the periodic financial reporting

[[Page 63925]]

requirements established by the Securities and Exchange Act of 1934. To

protect investors, the Securities and Exchange Commission (SEC) has

stringent financial disclosure and reporting requirements for issuers

of securities.

Annual reports filed with the SEC are readily available public

filings that require disclosure of detailed financial and business

information that exceeds the level of detail usually found in a firm's

annual report to its stockholders. Like the Federal self-bonding

program, whether or not Texas accepts a qualified applicant's self-bond

is discretionary with the State. In making this decision, the State is

not limited to the materials filed by an applicant. In its analysis of

an applicant's qualifications, Texas can calculate financial ratios

from the applicant's balance sheet data, compare an applicant's ratios

to industry norms, and conduct any number of other financial tests to

determine whether an applicant is a good candidate for self-bonding.

Having an applicant's SEC financial information at its disposal places

the State in a position to make an informed decision about a self-

bonding applicant's qualifications. For example, in addition to

requiring that financial statements be prepared in conformance with

GAAP, Section 78m.(b)(2)(B) of the Securities and Exchange Act requires

firms to assure that safeguards are present to protect assets.

Protecting assets helps assure reasonable liquidity which is one of the

requirements for qualifying under the Federal and Texas self-bonding

programs.

In lieu of using financial ratios to measure liquidity, Texas is

proposing that under this alternative test applicants meet a

combination of requirements including: stringent SEC financial

reporting, an investment-grade bond rating, and net worth that is six

times the total amount of the applicant's outstanding and proposed

self-bonds. Meeting the combined financial requirements of Texas'

proposed alternative test will assure that an applicant has reasonable

liquidity and a low risk of bankruptcy. The requirement for net worth

that is six times the total self-bonded amount is further discussed

under subparagraph (C) below.

TCMR 806.309(j)(2)(C)(iv)(II)(C). Like the Federal self-bonding

regulations at 30 CFR 800.23, an applicant applying for self-bonding

under Texas' standard test at Sec. 806.309(j)(2)(C) (i), (ii), and

(iii) and an applicant applying for self-bonding under the first of

Texas' alternative tests at Sec. 806.309(j)(2)(C)(iv)(I) may not have

outstanding and proposed self-bonds that are greater than 25 percent of

the applicant's tangible net worth in the United States. In other

words, tangible net worth must be four times the outstanding and

proposed self-bonded amount. Tangible net worth is used as the basis

for comparison with the amount of proposed and outstanding self-bonds

because intangible assets such as goodwill, patents, royalties, and

trademarks are difficult to evaluate and liquidate. Under the new

alternative at Sec. 806.309(j)(2)(C)(iv)(II)(C), Texas is proposing

that an applicant's total outstanding and proposed self-bond amount not

exceed 16\2/3\ percent of the applicant's net worth in the United

States. In other words, net worth [including intangible assets] must be

six times the amount of outstanding and proposed self-bonds. Under this

proposal, Texas is allowing the basis of comparison to be total net

worth including the calculation for intangible assets. However, the

Director finds that the inclusion of intangible assets in this

calculation is offset by the State's proposal to increase the ratio of

net worth to self-bond amount to six times rather than four times. This

proposed increase to the required level of net worth should provide

assurance that a self-bonded permittee has sufficient assets to perform

reclamation and stave off bankruptcy. Therefore, under this proposed

second alternative test at Sec. 806.309(j)(2)(C)(iv)(II), Texas is

requiring that an applicant have a greater financial cushion to protect

the State should it be required to attempt to recover self-bonded

amounts from the applicant's assets in the event the applicant files

for bankruptcy.

In the preamble to the final Federal self-bonding regulations (48

FR 36418, August 10, 1983), OSM responded to a commenter who

recommended a 6 to 1 ratio of net worth to self-bonded amount in the

Federal regulations ``to be more in keeping with the rates used by the

surety industry.'' OSM responded by saying that ``Although the

requirements of these rules are such that only well-established,

financially solvent business entities will qualify for self-bonding,

there is always an element of risk involved in underwriting the

obligations for such companies. The 25 percent restriction provides a

financial cushion, in the event that a self-bonded entity should fail,

to allow the regulatory authority to attempt to recoup self-bonded

amounts from the assets of the bankrupt entity. A 6 to 1 ratio is

considered overly restrictive, especially in light of other required

financial tests [at 30 CFR 800.23(b)(3)].'' The State's proposal for a

6 to 1 ratio of net worth to self-bonded amount plus meeting a

combination of three additional financial tests (investment-grade bond

rating, $100 million net worth plus $200 million domestic fixed assets,

and SEC financial reporting) is no less effective than the Federal

regulations that require a 4 to 1 ratio of tangible net worth to self-

bonded amount plus meeting one of three stand-alone financial tests

(bond rating of A or higher; or $10 million tangible net worth plus 1.2

or greater current ratio of assets to liabilities plus 2.5 or less

ratio of total liabilities to net worth; or $20 million domestic fixed

assets plus the same ratio values as stated above).

d. Based on the above discussions, the Director finds that Texas'

proposed financial criteria at TCMR 806.309(j)(2)(C)(iv) (I) and (II)

are either already contained in Texas' existing approved alternative

test for self-bonding or provide financial options for the new proposed

alternative test that are no less effective at measuring financial

strength and reasonable liquidity than the Federal self-bonding

regulations at 30 CFR 800.23(b)(3).

IV. Summary and Disposition of Comments

Public Comments

The Director solicited public comments and provided an opportunity

for a public hearing on the proposed amendment. No one requested an

opportunity to speak at a public hearing; therefore, no hearing was

held.

Texas Utilities Services Inc. provided written support for the

proposed amendment (Administrative Record No. TX-593.07).

Federal Agency Comments

Pursuant to 30 CFR 732.17(h)(11((i), the Director solicited

comments on the proposed amendment from various Federal agencies with

an actual or potential interest in the Texas program (Administrative

Record No. 593.01).

On September 15, 1995 (Administrative Record No. TX-593.06), the

U.S. Bureau of Land Management commented that the revised regulations

addressed by the documents appear to exceed Federal coal standards. On

September 18, 1995 (Administrative Record No. TX-593.04), the U.S. Army

Corps of Engineers acknowledged that the revisions were satisfactory.

On October 2, 1995 (Administrative Record No. TX-593.08), the Natural

Resources Conservation Services responded without comment.

Environmental Protection Agency (EPA)

Pursuant to 30 CFR 732.17(h)(11)(ii), OSM is required to obtain the

written

[[Page 63926]]

concurrence of the EPA with respect to those provisions of the proposed

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,). However, none

of the revisions that Texas proposed to make in this amendment pertain

to air or water quality standards. Therefore, OSM did not request EPA's

concurrence.

Pursuant to 732.17(h)(11)(i), OSM solicited comment on the proposed

amendment from EPA (Administrative Record No. TX-593.01). EPA did not

respond to OSM's request.

State Historical Preservation Officer (SHPO) and the Advisory Council

on Historic Preservation (ACHP)

Pursuant to 30 CFR 732.17(h)(4), OSM is required to solicit

comments on proposed amendments which may have an effect on historic

properties from the SHPO and ACHP. OSM solicited comments on the

proposed amendment from the SHPO and ACHP (Administrative Record No.

TX-593.01). Neither SHPO nor ACHP responded to OSM's request.

V. Director's Decision

Based on the above findings, the Director approves the proposed

amendment as submitted by Texas on August 11, 1995, and as revised on

September 25, 1995, concerning self-bonding alternative financial

requirements for a business and governmental entities.

The Director approves the rules as proposed by Texas with the

provision that they be fully promulgated in identical form to the rules

submitted to and reviewed by OSM and the public.

The Federal regulations at 30 CFR 943, codifying decisions

concerning the Texas 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 States to

bring their programs into conformity with the Federal standards without

undue delay. Consistency of State and Federal standards is required by

SMCRA.

VI. Procedural Determinations

Executive Order 12866

This rule is exempted from review by the Office of Management and

Budget (OMB) under Executive Order 12866 (Regulatory Planning and

Review).

Executive Order 12778

The Department of the Interior has conducted the reviews required

by section 2 of Executive Order 12778 (Civil Justice Reform) 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 SMCRA (30 U.S.C. 1253 and 1255) and the

Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10),

decisions on proposed State regulatory programs and program amendments

submitted by the States must be based solely on a determination of

whether the submittal is consistent with SMCRA and its implementing

Federal regulations and whether the other requirements of 30 CFR Parts

730, 731, and 732 have been met.

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 OMB 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

corresponding 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. Accordingly, 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 corresponding Federal regulations.

List of Subjects in 30 CFR Part 943

Intergovernmental relations, Surface mining, Underground mining.

Dated: February 1, 1995.

Brent Wahlquist,

Regional Director, Mid-Continent Regional Coordinating Center.

For the reasons set out in the preamble, Title 30, Chapter VII,

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

below:

PART 943--TEXAS

1. The authority citation for Part 943 continues to read as

follows:

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

2. Section 943.15 is amended by adding paragraph (1) to read as

follows:

Sec. 943.15 Approval of regulatory program amendments.

* * * * *

(1) The revisions to the following regulations at 16 Texas

Administrative Code 11.221, the Coal Mining Regulations of the Railroad

Commission of Texas, as submitted to OSM on August 11, 1995, and as

revised on September 25, 1995, are approved effective December 13,

1995.

TCMR 806.309(j)(2)(C)(iv) (I)(A), (B), and Self-bonding: financial

(C). requirements for a

business and governmental

entities, Alternative

Financial Eligibility

Criteria Test I.

TCMR 806.309(j)(2)(C)(iv) (II)(A), (B), and Self-bonding: financial

(C). requirements for a

business and governmental

entities, Alternative

Financial Eligibility

Criteria Test II.

[FR Doc. 95-30330 Filed 12-12-95; 8:45 am]

BILLING CODE 4310-05-M