Abandoned Mine Reclamation Grant Procedures

[[Page 9974]]

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 870, 886, 887, and 888

RIN No. 1029-AB72

Abandoned Mine Reclamation Grant Procedures

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

Interior.

ACTION: Final rule.

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SUMMARY: These regulations incorporate new grant procedures implemented

by OSM and make editorial changes to ensure consistency with the

statutory changes to Title IV of the Surface Mining Control and

Reclamation Act (SMCRA) of 1977, Public Law 95-87.

EFFECTIVE DATE: March 24, 1995.

FOR FURTHER INFORMATION CONTACT: Norman J. Hess, Office of Surface

Mining Reclamation and Enforcement, U.S. Department of the Interior,

1951 Constitution Avenue NW., Washington, D.C. 20240; Telephone: 202-

208-2949.

SUPPLEMENTARY INFORMATION:

I. Background

II. Final Rules and Disposition of Comments

III. Procedural Matters

I. Background

A. Summary of the Abandoned Mine Land (AML) Program

The AML Program was established by SMCRA, Pub. L. 95-87, 30 U.S.C.

1201 et seq., in response to concern over extensive environmental

damage caused by past coal mining activities. In effect, the Abandoned

Mine Reclamation Fund (Fund) and the program it supports is the coal

industry's equivalent to the ``Superfund'' administered by the

Environmental Protection Agency to address hazardous waste discharges.

The eligibility requirements for reclamation of abandoned mine

lands are contained in Section 404 of SMCRA. Funding of reclamation

projects is subject to a priority schedule. For example, ``Priority 1''

projects concern those that involve the protection of public health,

safety, general welfare, and property from extreme danger of the

adverse effects of coal mining practices. ``Priority 3'' projects, on

the other hand, concern environmental problems associated with past

coal mining practices that do not necessarily constitute a public

health or safety threat or affect the general welfare.

The Fund, administered by the Secretary of the Interior through

OSM, is financed by a reclamation fee assessment on every ton of mined

coal at the rate of 35 cents per ton of surface mined coal, 15 cents

per ton of underground mined coal, and 10 cents per ton for lignite.

Expenditures from the Fund are subject to appropriation by Congress.

The Fund is divided into the State/Indian tribe and Federal shares

with each State or Indian tribe under a federally approved reclamation

program entitled to fifty percent of the reclamation fees collected

from coal operations within the State or respective Indian lands.

Annually, these States/Indian tribes receive grants to carry out

reclamation projects under their AML programs. States are authorized to

use up to $3 million of their State-share funds to establish State coal

mine subsidence insurance programs, and are also authorized to deposit

up to ten percent of their annual grants into special interest-bearing

State trust accounts available for future reclamation purposes or for

acid mine drainage reclamation projects.

The Federal expenses share of the Fund is allocated among a number

of programs such as Federal emergency projects (involving sudden and

life-threatening situations that demand immediate attention), high-

priority reclamation projects in States and Indian lands without

federally approved reclamation programs (referred to as ``nonprogram''

States/Indian tribes), and the Small Operator Assistance Program, which

provides financial assistance to small coal operators to help defray

certain costs associated with the surface coal mining permitting

process. At present, 23 States and three Indian tribes have OSM

approved abandoned mine reclamation programs.

B. Proposed Rules

OSM published proposed rules at 58 FR 59334-59342 (November 8,

1993) concerning abandoned mine reclamation grant procedures and

requested comments from the public. During the comment period on the

proposed rules, OSM received comments from a variety of sources.

Pursuant to Executive Order 12866, every Federal agency is required

within applicable statutory limits to select regulatory goals that

maximize benefits to society and to select the most effective means to

achieve these goals. To this end OSM has received comments and

recommendations from the public and representatives of coal mining

States/Indian tribes.

All comments received during the comment period were considered in

this rulemaking process, and all substantive comments received are

addressed in the following preamble. All comments received are

available for inspection in the OSM Administrative Record, room 660,

800 North Capitol Street, NW, Washington, D.C. 20001.

C. Overview of Changes to Abandoned Mine Land Grant Regulations

Over the years, Congress has made several amendments to the

provisions in Title IV of SMCRA. These amendments have been, or are in

the process of being, implemented by OSM. In addition, the Department

has adopted the governmentwide Grants Management Common Rule (43 CFR

part 12; subpart C). Due to these changes, certain regulatory

references are now outdated or refer to statutory provisions that no

longer exist. Therefore, in this rulemaking OSM is editing the AML

regulations in 30 CFR chapter VII, subchapter R, to ensure that they

will be consistent with agency practice and all past amendments to

Title IV of SMCRA. The specific changes proposed to the AML rules are

set forth below.

II. Final Rules and Disposition of Comments

Part 870-Abandoned Mine Reclamation Fund-Fee Collection and Coal

Production Reporting

Section 870.5 is revised to include Indian tribes in the definition

of ``agency'' to reflect the OSM has approved Abandoned Mine

Reclamation programs for three Indian tribes: the Crow, Hopi, and

Navajo. See Section 405(k) of Pub. L. No. 100-71, 101 Stat. 416 (1987).

No comments were received on this section which is adopted as proposed.

Part 886--State Reclamation Grants

Section 886.1 is revised by adding the term ``Indian tribes'' and

deleting specific reference to ``State reclamation plan[s]'' to reflect

that OSM has approved abandoned mine reclamation programs for three

Indian tribes: the Crow, Hopi, and Navajo. In every instance in this

document where Indian tribe has been inserted, the purpose is to add

clarity and avoid confusion by reflecting the fact that OSM approval

has been extended to Indian tribal programs as well as State programs.

See Pub. L. No. 100-71, 101 Stat. 416 (1987). No comments were received

on this section which is therefore adopted as proposed.

OSM also amended Sec. 886.3 by making certain editorial changes.

Subsection (b) has been deleted and the subsection designation for

subsection (a) removed. The word ``allocated'' has also been replaced

with ``distributed annually.'' [[Page 9975]] This revision clarifies

that AML grant funds as ``distributed'' to States and Indian tribes.

The previous use of the word ``allocated'' was, in the context used,

inappropriate. Allocation means the administrative identification in

the records of OSM of monies in the Fund for a specific purpose, e.g.

identification of monies for exclusive use by a State/Indian tribe,

whereas ``distribution'' is the process by which OSM makes those monies

available to States/Indian tribes after the monies are appropriated

from the AML Fund by Congress. Throughout this final rule, editorial

changes have been made to clarify this terminology. In addition, the

word ``annually'' is added to reflect the current procedure that exists

for AML grant distribution. States/Indian tribes with approved AML

programs are eligible to submit AML grant requests on an annual basis.

Subsection 886.3(b) has been deleted due to the legislative changes

effectuated by the 1990 amendments to Title IV of SMCRA. See the

Abandoned Mine Reclamation Act (AMRA) of 1990, Pub. L. 101-508

(November 5, 1990). All funds are now allocated for a specific purpose

(see 30 U.S.C. 1232(g)). Accordingly, the reference to 30 CFR

Sec. 886.3 concerning ``remaining funds'' is no longer relevant.

No comments concerning this section were received from the public,

thus, this section is adopted as proposed.

Section 886.10 addresses information collection requirements and

the appropriate OMB clearance number. OSM revised and amended this

section by updating the data contained in the section and including the

estimated reporting burden per response for complying with the

information collection requirements. The revision also provides OSM and

OMB addresses were comments regarding the information collection

requirements may be sent. No comments were received on this section

which is adopted as proposed.

Section 886.11 is amended to reflect that OSM has approved

Abandoned Mine Reclamation plans for three Indian tribes: the Crow,

Hopi, and Navajo. No comments were received on this section, which is

thus adopted as proposed.

Section 886.12(a) is amended by removing the word ``State.'' This

amendment would reflect that Tribal programs have been approved by OSM.

Section 886.12(b), which outlines the permissible uses for grant

moneys under this part, is amended by revising the subsection to

reflect specific changes made by the 1990 amendments to Title IV of

SMCRA. See Pub. L. No. 101-508.

Rather than listing certain reclamation objectives, OSM is

referencing specific statutory and regulatory provisions that detail

eligibility requirements. This change avoids confusion and provides

clearer direction for the States/Indian tribes.

One commenter observed that the last sentence of subsection (b)

appears to require the use of fuels other than petroleum or natural gas

where public facility projects are constructed with abandoned mine land

grant funds. This commenter was unclear as to why such a requirement

has been included, and further felt that this restriction was

inappropriate in the context of these regulations.

OSM responds that this provision stems from Executive Order 12185

which requires, to the extent technologically and economically

feasible, that public facilities planned, constructed or modified in

whole or part with Federal funds (e.g., abandoned mine land grant

funds) should utilize fuel other than petroleum or natural gas. This

provision has been in the regulations since 1982. If a State/Indian

tribe determines that a public facility project incorporating such

provisions is not technologically or economically feasible, then

compliance with this requirement would not be required.

Subsection 886.13(a) is revised by deleting any reference to

administrative grants as being separated grants in and of themselves.

This change reflects the current OSM policy of awarding all AML funds

through a single grant. Administrative costs in this grant would no

longer require a second grant, but would cover only the first year of

the grant.

Two commenters expressed concern on behalf of their members

regarding the requirement to begin the 12-month administrative period

at the beginning of the grant since it may not coincide with the

grantee's fiscal year. The proposed rule would require grantees to

shift their construction grant period to coincide with the fiscal year,

thereby losing much of the favorable construction season. The commenter

suggests that grantees be allowed to assign the 12-month performance

period for the administrative portion of a grant to any 12-month period

within the first 18 months of a grant. This additional flexibility

would allow the grantee's administrative cost period to coincide with

it's fiscal year, while the construction portion of a grant can be

scheduled to coincide with the construction season.

OSM has not accepted this comment and does not believe that a

change to the proposed rule language is required since sufficient

flexibility exists under the current system and the proposed rule as

evidenced by several States that already have made determinations to

adjust their administrative period to coincide with the start of their

fiscal year.

Section 886.13(b) is also revised in order to implement changes

made by the 1990 amendments to SMCRA. These statutory amendments

deleted a reference to ``impact assistance funding'' in Section 402(g)

of SMCRA (30 U.S.C. Sec. 1232), and moved these reclamation objectives

to the non-coal provisions in new SMCRA Section 411 (30 U.S.C.

Sec. 1240(a)). A similar change has been made in these regulations.

Additionally, and to avoid confusion, OSM has replaced the specific

reference to Sections 403 and 409 (30 U.S.C. Secs. 1233 and 1239), of

SMCRA with a general reference to SMCRA.

OSM also has deleted paragraphs (b)(2) and (b)(3) of Sec. 886.13

which refer to specific AML projects. Under the revised AML grant

procedures, project specific information would be, in part, in

Abandoned Mine Land Inventory System and, in part, submitted at the

time of project activation. This change will decrease certain

administration costs of States/Indian tribes, thereby allowing more AML

funds to be used for specific AML reclamation purposes.

Two commenters suggested that open-ended grants be allowed, in lieu

of the current 3-year limitation, so as to accommodate longer

performance periods.

OSM accepts the comment to provide flexibility in the grant period.

This change is being made to accommodate longer performance periods

where a need is demonstrated by a State/Indian tribe. Since no grant

period is specified in the statute, OSM believes that it has the

requisite authority under Subsection 413(a) of SMCRA to alter the

current 3-year grant period. OSM acknowledges, however, that longer

grant periods may pose certain processing and fiscal problems.

Accordingly, OSM is planning to examine this concept, developing

proposed specific procedures for an open-ended grant program and

testing the procedures by means of selected State programs before

making a final policy decision.

The existing Sec. 886.14 includes a reference to Section 405(f) of

SMCRA, relating to project information required from applicants. Since

Sec. 886.14 is revised to relate solely to budget information,

submission of information relating to Section 405(f) now is discussed

in the preamble to Sec. 886.16.

Section 886.14 is revised to reflect that OSM will not require

annual budget estimates. This clarifies that States/Indian tribes

should no longer submit site specific information to OSM as part

[[Page 9976]] of this process. The budget information called for by

this revision would provide information that OSM needs to formulate its

own budget requests to Congress. In addition, the deletion of the word

``administrative'' is because under the new procedures outlined in this

proposed rule, administrative grants would no longer be separate

grants. Other changes to this section are editorial in nature and are

designed to reflect existing OSM practice and procedure.

Since no comments were received on this section, it is adopted as

proposed.

Section 886.15(c) is renumbered as Sec. 886.15(a) and revised by

replacing the word ``allocated'' with ``distributed'' in order to

clarify that AML funds are ``distributed'' to States/Indian tribes

annually. See the discussion above of proposed revisions to Sec. 886.3.

In addition, the previous paragraphs (c)(1)-(6), which refer to

specific forms, are deleted in favor of a generalized instruction to

use approved forms. This change eliminates the need to amend these

regulations if there needs to be a change in form requirements, e.g.,

when a new Federal law is passed.

Section 886.15(a) is renumbered as Sec. 886.15(b) and amended by

revising subsection (a) which allows OSM 90 days in which to act upon a

grant application. This amendment would require OSM action on a grant

application within 60 days of submittal. This change promotes the

overall goal of expediting the AML granting process.

In the interests of greater precision and clarification, OSM has

also made an editorial change to the redesignated Subsection 886.15(b)

which eliminates ``* * * act upon * * *'' and substitutes ``* * *

approve or disapprove * * *''. The use of this language is consistent

with the wording of subsequent sections.

One commenter stated that the prior Sec. 886.15(a) provides that

grants shall be approved by the Director. The commenter pointed out

that under the current system, grants are approved by the Field Office

Director. The commenter asked whether this regulatory language signals

a change from the current practice.

OSM has not changed the regulatory language that provides authority

to the Director to approve grants to the States/Indian tribes. OSM

points out, however, that the Director has formally delegated this

authority to the Field Office level.

Section 886.15(b), which has been redesignated as Sec. 886.15(c),

gives OSM 30 days to approve or disapprove a revised application, is

revised to allow OSM to treat the revised application as an original.

OSM would then have 60 days (under the new Sec. 886.15(b)) to approve

or disapprove the application. This change reflects OSM's view that 30

days could be an insufficient amount of time for it to evaluate revised

applications. OSM considers 60 days to be a more realistic time frame

in which to execute this task.

Several commenters stated that in the prior Subsection 886.15(b),

OSM should define what constitutes a minor revision to the grant

application. In their view, these minor revisions should not start the

60-day clock for OSM review and approval. In addition, one commenter

provided the opinion that the 60-day review and approval process should

be shortened to a period of 30 days.

OSM does not agree with these comments. It does not believe that a

30-day period provides sufficient time to review and process grants and

agree upon specific details with States/Indian tribes. Accordingly, OSM

has not acted upon that part of the comment to reduce the grant

processing time period. Furthermore, because of the variation in

eligible grant activities and projects, OSM does not believe that the

States/Indian tribes would be better served by attempting to further

define what is or is not a ``minor revision.'' By trying to list or

define items that may or may not occur, one assumes the risk of being

over or under inclusive in the class of items described. This

ultimately leads to further administrative problems between the States/

Indian tribes and OSM. The agency's goal has been and will continue to

be to process all grant applications within the 60-day period

contemplated by the regulations. Where revisions are required and are

submitted accurately and timely by the States/Indian tribes, OSM will

attempt in good faith either to meet or take action quicker than the

60-day time period. It must be understood, however, that if there are

time delays in obtaining the necessary revisions, it may not be

possible in all cases to meet the 60-day period. However, it is a goal

that OSM will continue to strive toward.

Section 886.15(d) is revised by inserting the requirement that

States/Indian tribes comply with all Federal laws in order to apply for

grants under this Part. The deletion of the reference to OSM

implementing regulations is merely an editorial change.

Section 886.15(f) is removed because the requirements of this

subsection are redundant. Specifically, the information called for in

this subsection is also required when States/Indian tribes submit

reclamation plans for OSM approval. See 30 CFR 884.13(c)(7).

Section 886.16 is amended to make some editorial and substantive

changes. Specifically, Sec. 886.16(a) is revised by deleting reference

to Director approval of an agency's grant application. This is an

editorial change; the deleted language is superfluous in light of the

fact that a ``grant agreement'' is in fact the document that represents

approval of the agency's grant application. Therefore, the existence of

a grant agreement denotes that OSM has in fact approved the agency's

grant application.

Paragraph (3) of Sec. 886.16(a) requires that the grant agreement

include project specific amounts. This paragraph is deleted in order to

simplify the AML granting process. Specifically, the deletion of

paragraph (a)(3) provides that individual projects will no longer be

included in the grant agreement. Instead, this information will be

submitted to OSM Field Offices on a project-by-project basis before OSM

approves the expenditure of funds for individual projects. Current

provisions of these regulations (See recordkeeping and reporting

requirements discussed in Secs. 886.23 and 886.24), combined with the

National Environmental Policy Act (NEPA) compliance process discussed

in revised Subsection 886.16(d) below, alleviate the need for approval

of specific project amounts in the grant agreement.

Paragraph (a)(4) of Sec. 886.16 requires that the grant agreement

include allowable transfers of funds. Likewise, paragraph (b) of 886.16

requires Director approval of agency assignment of functions and funds.

Paragraph (a)(4) is removed, and paragraph (b) is revised to give the

States/Indian tribes more flexibility in administering their AML grant

monies. The revision to paragraph (b) would alleviate the need for

Director approval prior to assignment by the States/Indian tribes. In

the view of OSM, States/Indian tribes are in the best position to

dictate which entities are better suited to carry out day-to-day

reclamation activities. With OSM approval no longer necessary,

paragraph (a)(4) becomes irrelevant and is therefore removed.

Section 886.16(c) is also deleted and paragraph (d) is revised and

renumbered as paragraph (c) to reflect changes in the procedures

required to effectuate a grant agreement between OSM and a State/Indian

tribe. This amendment reflects a change in the technical administration

of the grant agreement process. Specifically, this amendment requires

that the Director sign and transmit only two copies of the grant

agreement to the agency, instead of the four required prior to

amendment. In addition, this amendment changes the time period for the

agency to execute the grant from 3 weeks to 20 days. For purposes of

this [[Page 9977]] section, the agency is now required to sign the

agreement and return it to OSM within the 20-day period. Since the

grant, when signed by the Director, would obligate funds, subsection

(c) states that failure of the State/Indian tribe to execute the grant

within 20 days would result in a deobligation of the total Federal

grant amount. Thus, if the signed agreement is not returned to OSM by

the close of business on the 20th day after the designated OSM official

signs it and OSM has not granted an extension, OSM will initiate

deobligation procedures.

Several commenters have stated that OSM should allow liberal

extensions of the 20-day period to execute a grant agreement based upon

reasonable justification provided by the State/Indian tribe. Otherwise,

commenters note, grantees could be faced with automatic premature

deobligations simply because they are unable to obtain the appropriate

approvals and authorizing signatures within the 20 calendar day period.

OSM has accepted this comment and made a change in the language of

Sec. 886.16(c) to provide that an extension of time may be approved

verbally or in writing by the individual delegated the authority to

sign grant agreements. Specifically, the word ``formally'' has been

deleted to allow an oral or other less formal mechanism of approval.

OSM notes that the States/Indian tribes are the primary delivery

mechanism for the AML program. The actual signing of the grant

agreements is not a complex matter; OSM will endeavor to continue to

keep it as uncomplicated as possible.

In addition, one commenter has requested that the 20-day period of

Sec. 886.16(c) be lengthened to 45 days to allow sufficient time to

execute grant agreements.

OSM has declined to extend the 20-day period based upon experience

over the past decade that reflects that there has been few if any

problems encountered by the involved parties in meeting the specified

time period.

New Secs. 886.16(d) and 886.16(e) are added to clarify that

compliance with NEPA is required before AML grant funds may be used by

the State/Indian tribe and that a completed Form OSM-76 must be

submitted prior to the use of funds for construction activities.

Currently, OSM grant procedure requires NEPA compliance at the

construction grant award stage. Since the issuance of a grant need not

contain authorization of expenditures for any specific project, that

action should not require NEPA compliance. Instead, NEPA compliance is

deferred until the State/Indian tribe requests authorization to expend

funds under the grant. The actual initiation of each project is the

action that might have a significant effect on the environment. Under

these procedures, NEPA documentation would be developed as a normal

part of project planning rather than up front in a grant application.

Although OSM field office approval would still be required before the

States/Indian tribes are authorized to proceed with individual

projects, OSM believes that the overall management of the grant by the

States/Indian tribes is enhanced by this action.

One commenter stated that Sec. 886.16(d) should be revised to

clarify that the provisions of the National Environmental Policy Act of

1969 apply to coal AML projects only and not to noncoal projects.

OSM disagrees with this comment. NEPA applies to both coal and

noncoal projects. NEPA compliance must occur for every project.

Prior to the time that authorization to expend funds for

construction activities is requested, information specific to the

project is provided to the OSM field office by the State/Indian tribe.

The required information is provided on the Form OSM-76, Abandoned Mine

Land Problem Area Description (OMB No. 1029-0081). This information

conforms to that required in section 405(f) of SMCRA.

Several commenters asked for clarification on whether the filing of

Form OSM-76 with grant applications applies to both coal and noncoal

projects. Commenters objected to having to file a Form OSM-76 with

noncoal projects.

Although unfunded noncoal problem areas/projects do not have to be

included in the AML inventory, if such projects are funded, OSM is

required under section 403(c) of SMCRA to establish procedures for, and

to track, accomplishments. This is being implemented for all Title IV

projects through States/Indian tribes submitting information on Form

OSM-76.

It is noted that budgets are ``revised'' and grants are

``amended.'' Because of the method of approving an AML grant, a budget

by itself is not required to be revised. Thus, the title of Section

886.17 would be changed from ``Grant and budget revisions'' to read

``Grant amendments.''

Section 886.17 is amended by revising paragraph (a)(1) which refers

to OMB Circular A-102. This editorial change properly refers to the

Grants Management Common Rule. This editorial change has been made

throughout this rule.

Paragraph (a)(2) of Sec. 886.17, which discusses events that

trigger notification requirements, is revised by deleting subparagraphs

(i) and (ii) and inserting language specifying that notification is

necessary for changes that will result in an extension of the grant

period, or require additional funds, or make a budget transfer from

administrative costs to project costs or vice versa. This revision

eliminates the need to notify OSM of project-specific changes, but

retains the mandates of the Grants Management Common Rule. This

simplifies the grant process; OSM would not require project-by-project

approval of State/Indian tribe AML projects at the time of initial

grant approval. Thus, a grant amendment would not be necessary merely

due to changes in individual projects that do not effect the overall

grant period, funding, or cost category.

Several commenters stated that Sec. 886.17(a)(2) should be revised

to clarify that budget transfers, from administrative costs to project

costs to indirect costs and vice versa, require notification only and

do not require a grant amendment.

OSM disagrees with the comments. The Grants Management Common Rule,

(43 CFR part 12, subpart C.30(c)(3)), requires that when a grant

provides funding for both construction and nonconstruction activities,

the grantee must obtain prior written approval from the awarding agency

before making any fund or budget transfers from nonconstruction to

construction or vice versa. This requirement is being implemented by

the grantee formally amending its approved budget.

Likewise, paragraphs (b)(1) and subparagraphs (b)(3) (i)-(iii) of

section 886.17, which require OSM approval for budget revisions of

$5,000 or 5 percent of the grant amount, except in certain enumerated

circumstances, are removed by these amendments. Thus, the requirements

in paragraphs (b)(1) and (b)(3) (i)-(iii) of section 886.17 are deleted

in favor of the new instructions in revised paragraph 886.17(a)(2).

This is a conforming change that is brought about by the Grants

Management Common Rule and would codify existing practices.

In addition, paragraph (b)(2) of section 886.17 is revised to allow

OSM 30 days, instead of the current 15 days, in which to either approve

or disapprove the amendment. Paragraph (b)(2) is redesignated as

subsection (b). The proposed 30-day time limit reflects OSM's

evaluation of the time needed to complete its review of the amendment.

In regard to paragraph 886.17(b)(2), one commenter stated that they

prefer 15 days instead of the specified 30-day [[Page 9978]] period to

approve or disapprove grant amendments.

Based on past experience, OSM is of the opinion that a 30-day

period provides a reasonable and sufficient time to review and approve

or disapprove a grant amendment. Accordingly, OSM has not acted upon

this comment and will endeavor to process all grant amendments as

quickly as possible within the 30-day period contemplated by the

regulation.

Section 886.18, discussing conditions for grant reduction,

suspension, and termination, is amended by revising paragraph (a)(2) to

make a minor editorial change to the reference from 30 CFR 872.11(b)(2)

to 30 CFR 872.11(b)(1) and 872.11(b)(2). This is a conforming change

made necessary by rulemaking to implement the AMRA, Pub. L. 101-508.

In the interest of clarity, OSM has decided to substitute the word

``obligate'' for ``expend'' in paragraph 886.18(a)(2). Paragraph

402(g)(1)(D) of SMCRA uses the term ``expended,'' but the term

``obligate'' is deemed to be a more technically correct financial term

to reflect an irrevocable commitment of funds by a grantee.

In regard to paragraph 886.18(a)(2), one commenter observed that if

a grantee fails to expend distributed funds within a 3-year grant

period, those funds will be expended by the Secretary to accomplish the

purposes of Title IV. The commenter disagrees with this section due to

annual distribution decreases and anticipated future decreases due to

the amendments to SMCRA. The commenter feels that all distributed funds

should be utilized only by the respective State/Indian tribe for the

purposes of Title IV.

Except for the editorial change previously mentioned, OSM does not

believe that any changes should be made to this regulation. Section

402(g)(1)(D) of SMCRA specifically provides for the Secretary to use

moneys granted, but not expended, within 3 years after the grant award.

Note however, that even though the language of this provision has not

been modified, OSM has always been able to work with the States/Indian

tribes on expending appropriated funds.

Paragraph (a)(3) of section 886.18 is also revised by specifying

that certain Indian tribes may receive reclamation funds without having

an approved regulatory program. Under the 1987 amendments to SMCRA, the

Crow, Hopi, and Navajo Indian tribes do not have an approved Title V

program prior to being eligible to receive AML funds. See 30 U.S.C.

1235(k) (1988).

Subsection 886.18(b) is replaced by a new subsection (b). The new

subsection (b) incorporates remedial measures outlined in the Grants

Management Common Rule.

Also, the current subsection (b) is revised and redesignated as

subsection (c). This new subsection (c) contains editorial changes to

indicate that the ``OSM official delegated grant signature authority''

is the person who would give notice of grant reduction, suspension, or

termination of a grant. In addition, subsection (c) requires certified

mail transmittal of the required written notice. Subsection (c) also

adds a new paragraph (7) that would incorporate the concept of mutual

termination of a grant as outlined in the Grants Management Common

Rule.

Likewise, the current subsection 886.18(c) is redesignated as

subsection (d) and revised to clarify that State or Tribal appeals of

OSM decisions to reduce, suspend, or terminate a grant are evaluated to

the Director of OSM. This rule provides that the Director would have 30

days from receipt to decide the appeal. The Director's decision could

then be appealed to the Secretary.

These appeals would be processed in accordance with existing OSM

procedures. OSM has elected not to codify the details of this process

since the procedures may be amended as necessary.

One commenter stated that, before reduction or termination of a

grant, the grantee should be allowed to complete the appeal process

provided in Subsection 886.18(d). Hence, paragraph 886.18(c)(2) should

be revised to provide for the initiation and completion of the appeals

process before any final action is taken to reduce or terminate a

grant.

OSM accepts this comment and notes that no regulatory language

change is required because the authority to appeal a reduction,

suspension or termination of a grant exists in paragraph 886.18(d).

Under this paragraph the Director must decide the appeal within 30 days

of receipt. Further, a grantee can then appeal the Director's decision

to the Secretary who also has 30 days to act upon the appeal.

Section 886.19, which explains requirements for an audit, is

revised to remove an outdated reference to OMB Circular A-102.

Two commenters requested further clarification of Section 886.19 by

incorporating appropriate reference to specific published Office of

Management and Budget guidance.

In order to provide guidance to grantees, OSM has revised section

886.19 to state that the agency shall arrange for an independent audit

pursuant to guidance provided by the General Accounting Office and the

Office of Management and Budget. This revision is being done in a

general fashion because the applicable circulars and other guidance

documents could be modified and/or combined in the future.

Section 886.20, which outlines administrative procedures for

agencies under this Part, is revised by replacing references to OMB

Circular A-102 with the Grants Management Common Rule. This change will

alleviate the need for rulemaking to effectuate every minor change in

form requirements. No comments were received on this section which is

adopted as proposed.

Section 886.21, outlining allowable costs, is revised by deleting

the work ``project'' in paragraph (a). As discussed throughout this

rulemaking, these amendments eliminate certain project specific grant

procedures under the AML program. The revision will have little

substantive effect since previous grants, although containing project-

specific information, were for overall reclamation activities.

One commenter has noted that ``acquisition of land'' is an

allowable cost. That commenter has stated that OSM may want to clarify

Sec. 886.21(a) to note that acquisition is limited to lands affected by

coal and noncoal mining, i.e., does not include public facility

projects authorized under Section 411(f) of SMCRA.

OSM has not made any change to Sec. 886.21. This is a general

provision that addresses grants as a whole; if specific limitations

exist in Title IV of SMCRA, those limitations would have to be complied

with as required.

Section 886.22(a) contains some editorial changes in order to

properly reference the Grants Management Common Rule. In addition,

subsection (d), mandating that drawdowns be made by the agency as

closely as possible to the time of making disbursements, is revised by

requiring that when advances are appropriate, they should be made as

closely as possible to the actual time of disbursement. This change

will reflect current practice and procedure. No comments were received

on this section which is thus adopted as proposed.

Section 886.23 is amended by replacing the semi annual reporting

requirement with an annual reporting requirement. In the view of OSM,

annual reporting is sufficient to ensure proper Federal oversight. The

AML program has been in effect in most States for over a decade. This

change represents the growing maturity of these [[Page 9979]] programs

and the confidence that OSM has in their management.

In order to maintain consistency in the regulatory language, OSM is

making a technical change and thereby deleting reference to

``cooperative agreements'' in Sec. 886.23. The term ``grant'' as used

in this regulation includes financial assistance in the form of grants

and/or cooperative agreements.

Several commenters stated their support of the OSM proposal in

Sec. 886.23(a) to change the reporting requirements to an annual cycle

rather than semi annual.

OSM agrees with the commenters that this change will assist in

reducing administrative burdens on grantees and recognizes the superior

performance of the States/Indian tribes in administering their AML

programs over the years.

In addition, existing paragraph (a) and (b) are revised by deleting

references to specific form requirements. This is accomplished by

deleting a portion of paragraph (a), all of paragraphs (a)(1)-(2), and

all of paragraph (b). In place of these references to specific forms,

this amendment directs agencies to submit reporting forms specified by

OSM. This change eliminates the need for rulemaking procedures to amend

these regulations in every instance when form requirements change. In

addition, many of the forms required by this section anticipate the

need for project-specific information. In light of the changes that are

made by these amendments, specific information no longer needs to be

submitted to OSM in advance. Some project-specific information would be

provided to OSM at the time a grantee requests approval for

expenditures of funds for individual projects. Additional detailed

information would also be available in the grantee's files.

A revised paragraph (b) is added to Sec. 886.23 which requires, at

the completion of a grant, agency submission of closeout reports as

specified by OSM. Specifically, subsection (b) requires submission of

Form OSM-76 upon project completion. This submission is necessary to

comply with the requirement in section 403(c) of SMCRA that on a

regular basis OSM note on its inventory those projects completed under

Title IV.

Section 886.23(c) is deleted, since the requirement to submit Form

OSM-76 upon project completion is now contained in revised subsection

(b), as noted above.

Several commenters observed that Sec. 886.23(b) states that a

completed Form OSM-76 shall be submitted upon project completion, not

grant expiration. Because of the 3-year limitation for construction

grants and the fact that many projects may not begin until the end of

the first construction season due to fiscal year constraints, some

projects may require funding from more than one grant. Consequently,

some projects may not be completed when grant closeout reports are due,

and a Form OSM-76 sent at that time would be incomplete. Because of

this situation, the commenters suggest that OSM needs to define

``project completion'' within the framework of this section.

OSM agrees in part. However, the term ``project completion'' refers

to when the actual construction/reclamation work is completed. This

could involve more than one grant; likewise, it means that if the

reclamation is completed at a site after one year of the grant, the

Form OSM-76 is due at that time. This is necessary to fulfill the

mandate of Section 403(c) requiring that the inventory be updated

annually with all completed projects.

Section 886.24 is amended by revising subsection (a) which requires

agencies to keep records in accordance with OMB Circular A-102. OSM is

revising this subsection to properly reference the Grants Management

Common Rule, which supersedes Circular A-102 for purposes of this Part.

Section 886.24(b), which mandates certain recordkeeping

requirements for subgrantees and contractors, is deleted. Designation

of subsection (a) is removed and paragraph (1) and (2) are redesignated

as subsections (a) and (b) respectively. In OSM's judgment, the

information called for by this subsection would be redundant in light

of the requirements of the Grants Management Common Rule.

No comments were received on this section. This section is being

adopted as proposed.

OSM adds a new Sec. 886.25 to simplify the existing regulation by

including special Indian land procedures (formerly part 888) in part

886.

New Sec. 886.25(a) discusses the Director's authority to mitigate

emergencies or extreme dangers resulting from past coal mining

practices and to perform other reclamation on Indian lands not subject

to an approved reclamation program.

New Sec. 886.25(b) is a conforming change that would incorporate

the language of deleted subsection 888.11(a).

New Sec. 886.25(c) is a conforming change that would incorporate

the language of deleted subsection 888.11(b).

New Sec. 886.25(d) is a conforming change that would incorporate

the language of deleted subsection 888.11(c).

New Sec. 886.25(e) is a conforming change that would incorporate

the language of deleted subsection 888.11(d).

No comments were received on this section, which is therefore

adopted as proposed.

Part 887--Subsidence Insurance Program Grants

Section 887.3 discusses the Director's authority to approve or

disapprove grants for subsidence insurance up to a total of $3 million

in States with approved reclamation plans. The reference to section

402(g)(2) of SMCRA is revised to properly reference section 402(g)(1)

in light of the 1990 amendments to SMCRA. The reference to

Sec. 872.11(b)(2) is changed to a more general reference to

Sec. 872.11(b) in order to reference some explanatory language found in

that paragraph.

Section 887.10 deals with information collection requirements and

their submission to OMB for approval. The collection of this

information will not be required until it has been approved by OMB. OSM

has revised and amended this section by updating the data contained in

the section and including the estimated reporting burden per response

for complying with the information collection requirements. The

revision also provides the OSM and OMB addresses where comments

regarding the information collection requirements may be sent.

Section 887.11 discusses eligibility for subsidence insurance

program grants under this Part. This section is revised by making minor

editorial changes. The reference to Sec. 872.11(b)(2) is changed to a

more general reference to Sec. 872.11(b) in order to reference some

explanatory language found in that paragraph. In addition, the

reference to SMCRA section 402(g)(2) is revised to properly reference

section 402(g)(1) in light of the 1990 amendments to SMCRA.

Section 887.12 is amended by replacing all references to OMB

Circular A-102 with references to the Grants Management Common Rule. As

discussed above, this change reflects the fact that the Grants

Management Common Rule supersedes OMB Circular A-102 for the purposes

of this Part.

In addition, Sec. 887.12(b), which specifies the contents of a

grant application under this Part, is revised by adding a reference to

the procedures of 30 CFR part 886. This amendment advances the goal of

simplifying the AML grants process by providing a uniform set of

procedures for the grant application process. The effect of this

amendment is to combine the process of applying for reclamation grants

under [[Page 9980]] part 886 and for subsidence insurance program

grants under this Part.

Section 887.13 is amended by replacing reference to OMB Circular A-

102 with reference to the Grants Management Common Rule. As discussed

above, this change is made throughout these amendments.

No comments were received in regard to any of the above sections

contained in part 887, hence these sections are adopted as proposed.

Part 888--Indian Reclamation Programs

OSM deletes part 888 and incorporates its provisions into new

section 886.25. See the discussion of proposed revisions of section

886.25 above. No comments were received concerning this deletion.

III. Procedural Matters

Paperwork Reduction Act

The collections of information contained in this rule have been

approved by the Office of Management and Budget under 44 U.S.C. 3501 et

seq. and assigned clearance numbers 1029-0059, 1029-0090, and 1029-

0107.

Author

The principal author of this rule is Norman J. Hess, Division of

Abandoned Mine Land Reclamation, Office of Surface Mining Reclamation

and Enforcement, 1951 Constitution Avenue NW., Washington, D.C. 20240;

Telephone: 202-208-2949.

Executive Order 12866

This rule has been reviewed under Executive Order 12866.

Regulatory Flexibility Act

In accordance with the Regulatory Flexibility Act, 5 U.S.C. et

seq., the Department of the Interior has determined that this rule will

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

entities.

National Environmental Policy Act

OSM has prepared a final environmental assessment (EA) of this

rule, and has made a finding that this rule will not significantly

affect the quality of the human environment under Section 102(2)(C) of

NEPA, 42 U.S.C. 4332(2)(C). A finding of no significant impact (FONSI),

has been approved for this final rule in accordance with OSM procedures

under NEPA. The EA and FONSI are on file in the OSM Administrative

Record, room 660, 800 N. Capitol Street NW., Washington, DC.

Executive Order 12778 on Civil Justice Reform

This rule has been reviewed under the applicable standards of

Section 2(b)(2) of Executive Order 12778, Civil Justice Reform (56 FR

55195). In general, the requirements of Section 2(b)(2) of Executive

Order 12778 are covered by the preamble discussion of this rule.

Additional remarks follow concerning individual elements of the

Executive Order:

A. What is the preemptive effect, if any, to be given to the

regulation?

The rule specifies procedures for the Federal grants program under

Title IV of SMCRA. This rule is not intended to preempt State law

except that to the extent States wish to participate in the program,

they must comply with the Federal rules.

B. What is the effect on existing Federal law or regulations, if

any, including all provisions repealed or modified?

This rule modifies the AML grant process regulations pursuant to

SMCRA as described herein, and is not intended to modify the rules or

provisions of any other Federal statute. The preceding discussion of

this rule specifies the Federal regulatory provisions that are affected

by this rule.

C. Does the rule provide a clear and certain legal standard for

affected conduct rather than a general standard, while promoting

simplification and burden reduction?

The standards established by this rule are as clear and certain as

practicable, given the complexity of the topics covered and the

mandates of SMCRA.

D. What is the retroactive effect, if any, to be given to the

regulation?

This rule is not intended to have retroactive effect.

E. Are administrative proceedings required before parties may file

suit in court? Which proceedings apply? Is the exhaustion of

administrative remedies required?

No administrative proceedings are required before parties may file

suit in court challenging the provisions of this rule under Section

526(a) of SMCRA, 30 U.S.C. 1276(a). Prior to any judicial challenge to

the application of this rule, however, administrative procedures must

be exhausted.

F. Does the rule define key terms, either explicitly or by

reference to other regulations or statues that explicitly define those

items?

Terms that are important to the understanding of this rule are set

forth in 30 CFR 870.5 and 887.5.

G. Does the rule address other important issues affecting clarity

and general draftsmanship of regulations set forth by the Attorney

General, with the concurrence of the Director of the Office of

Management and Budget, that are determined to be in accordance with the

purposes of the Executive Order?

The Attorney General and the Director of the Office of Management

and Budget have not issued any guidance on this requirement.

List of Subjects

30 CFR Part 870

Reporting and recordkeeping requirements, Surface mining,

Underground mining.

30 CFR Part 886

Grant programs--natural resources, Reporting and recordkeeping

requirements, Surface mining, Underground mining.

30 CFR Part 887

Grant programs--natural resources, Insurance, Surface mining,

Underground mining.

30 CFR Part 888

Indian land, Surface mining, Underground mining.

Dated: January 18, 1995.

Bob Armstrong,

Assistant Secretary--Land and Minerals Management.

Accordingly, 30 CFR parts 870, 886, 887, and 888 are amended as set

forth below:

CHAPTER VII--OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT,

DEPARTMENT OF THE INTERIOR SUBCHAPTER R--ABANDONED MINE LAND

RECLAMATION

PART 870--ABANDONED MINE RECLAMATION FUND--FEE COLLECTION AND COAL

PRODUCTION REPORT

1. The authority citation for part 870 is revised to read as

follows:

Authority: 30 U.S.C. 1201 et seq., as amended.

2. Section 870.5 is amended by revising the definition of

``Agency'' to read as follows:

Sec. 870.5 Definitions

* * * * *

Agency means the State agency designated by the Governor, or in the

case of Indian tribes, the Tribal agency designated by the equivalent

head of an Indian tribe, to administer the State/Indian tribe

reclamation program and to receive and administer grants under this

part.

* * * * *

[[Page 9981]]

3. The heading of part 886 is revised to read as follows:

PART 886--STATE AND TRIBAL RECLAMATION GRANTS

4. The authority citation for part 886 is revised to read as

follows:

Authority: 30 U.S.C. 1201 et seq., as amended.

5. Section 886.1 is revised to read as follows:

Sec. 886.1 Scope.

This part sets forth procedures for grants to States/Indian tribes

having an approved plan for the reclamation of eligible lands and water

and other activities necessary to carry out the plan as approved. OSM's

``Final Guidelines for Reclamation Programs and Projects'' (45 FR

14810-14819, March 6, 1980) should be used as applicable.

6. Section 886.3 is revised to read as follows:

Sec. 886.3 Authority.

The Director is authorized to approve or disapprove applications

for grants under this part if the total amount of the grants does not

exceed the moneys appropriated by the Congress. Such moneys are

distributed annually to the States/Indian tribes.

7. Section 886.10 is revised to read as follows:

Sec. 886.10 Information collection.

The collections of information contained in 30 CFR part 886 have

been approved by the Office of Management and Budget under 44 U.S.C.

3501 et seq. and assigned clearance number 1029-0059. The information

will be collected to meet the requirements of Section 405 of the Act,

which allows the Secretary to grant funds to States/Indian tribes

pursuant to Section 402(g) and which are necessary to implement the

State/Indian tribe reclamation program. This information will be used

by the OSM to ensure that the State/Indian tribe complies with the

Grants Management Common Rule (43 CFR part 12, subpart C) and sound

principles of grants management. The obligation to respond is required

to obtain a benefit in accordance with Pub. L. 95-87. Public reporting

burden for this information is estimated to average 4 hours per

response, including the time for reviewing instructions, searching

existing data sources, gathering and maintaining the data needed, and

completing and reviewing the collection of information. Send comments

regarding this burden estimate or any other aspect of this collection

of information, including suggestions for reducing the burden, to the

Office of Surface Mining Reclamation and Enforcement, Information

Collection Clearance Officer, 1951 Constitution Avenue NW., Room 640

NC, Washington, D.C. 20240; and the Office of Management and Budget,

Paperwork Reduction Project (1029-0059), Washington D.C. 20503.

8. Section 886.11 is revised to read as follows:

Sec. 886.11 Eligibility for grants.

A State/Indian tribe is eligible for grants under this part if it

has a reclamation plan approved under part 884 of this chapter.

9. Section 886.12 is amended by revising paragraphs (a) and (b) to

read as follows:

Sec. 886.12 Coverage and amount of grants.

(a) An agency may use moneys granted under this Part to administer

the approved reclamation program and to carry out the specific

reclamation activities included in the plan and described in the annual

grant agreement. The moneys may be used to cover costs to the agency

for services and materials obtained from other State and Federal

agencies or local jurisdictions according to OMB Circular A-87.

(b) Grants shall be approved for reclamation and eligible lands and

water in accordance with 30 U.S.C. 1234 and 1241 and 30 CFR 874.12,

875.12, and 875.14, and in accordance with the priorities stated in 30

U.S.C. 1233 and 1241 and 30 CFR 874.13 and 875.15. To the extent

technologically and economically feasible, public facilities that are

planned, constructed, or modified in whole or in part with abandoned

mine land grant funds should use fuel other than petroleum or natural

gas.

* * * * *

10. Section 886.13 is revised to read as follows:

Sec. 886.13 Grant period.

(a) The period for administrative costs of the authorized agency

should not exceed the first year of the grant.

(b) The Director shall approve a grant period on the basis of the

information contained in the grant application showing that projects to

be funded will fulfill the objectives of 30 U.S.C. 1201 et seq.

11. Section 886.14 is revised to read as follows:

Sec. 886.14 Annual submission of budget information.

The agency shall cooperate with OSM in the development of

information for use by the Director in the preparation of his/her

requests for appropriation of moneys for reclamation grants. OSM shall

determine the schedule for submitting this information on an annual

basis. Funds required to prepare this submission may be included in the

grants under 30 CFR 886.12.

12. Section 886.15 is amended by revising and redesignating

paragraph (a) as (b); by revising and redesignating paragraph (b) as

(c); by revising and redesignating paragraph (c) as (a); by revising

paragraph (d); and by removing paragraph (f) to read as follows:

Sec. 886.15 Grant application procedures.

(a) An agency shall use application forms and procedures specified

by OSM. A preapplication is not required if the total of the grant

requested is within the amounts distributed to the State/Indian tribe

annually by the Director based on the Congressional appropriation.

(b) OSM shall approve or disapprove a grant application within 60

days of receipt. If OSM approves an agency's grant application, a grant

agreement shall be prepared and signed by the agency and the Director.

(c) If the application is not approved, OSM shall inform the agency

in writing of the reasons for disapproval and may propose modifications

if appropriate. The agency may resubmit the application or appropriate

revised portions of the application. OSM shall process the revised

application as an original application.

(d) The agency shall agree to perform the grant in accordance with

the Act, applicable Federal laws and regulations, and applicable OMB

and Treasury Circulars.

* * * * *

13. Section 886.16 is amended by revising paragraphs (a) and (b);

by removing paragraph (c); by redesignating paragraph (d) as (c); by

revising redesignated paragraph (c); by redesignating paragraph (e) as

(f); and by adding new paragraphs (d) and (e) to read as follows:

Sec. 886.16 Grant agreements.

(a) OSM shall prepare a grant agreement that includes:

(1) A statement of the work to be covered by the grant; and

(2) A statement of the approvals of specific actions required under

this subchapter or the conditions to be met before approvals can be

given if moneys are included in the grant for these actions.

(b) The State/Indian tribe may assign functions and funds to other

Federal, State, or local agencies. The grantee [[Page 9982]] agency

shall retain responsibility for overall administration of that grant,

including use of funds and reporting.

(c) The Director shall sign two copies of the agreement and

transmit them either by certified mail, return receipt requested, or by

hand delivery, to the agency for countersignature. The grant

constitutes an obligation of Federal funds at the time the Director

signs the agreement. The agency shall have 20 calendar days from the

date of the Director's signature to execute the agreement in order to

accept its terms and conditions. Unless an extension of time is

approved by the Director, failure to execute the agreement within 20

calendar days shall result in an immediate deobligation of the total

Federal grant amount.

(d) Although the funds are obligated when the Director signs the

agreement, for any expenditure requiring compliance with the National

Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), funds

may not be used by the State/Indian tribe until all actions necessary

to ensure compliance with NEPA are taken.

(e) The agency shall submit a completed Form OSM-76 (Abandoned Mine

Land Reclamation Problem Area Description) showing proposed funding for

any planned non-emergency project work to the applicable OSM field

office before it may use funds for construction activities.

* * * * *

14. Section 886.17 is revised to read as follows:

Sec. 886.17 Grant amendments.

(a) Grant amendments. (1) A grant amendment is a written alteration

of the terms or conditions of the grant agreement, whether accomplished

on the initiative of the agency or OSM. All procedures for grant

amendments shall conform to those in 43 CFR part 12, subpart C.

(2) The agency shall promptly notify the Director, or the Director

shall promptly notify the agency, in writing of events or proposed

changes that may require a grant amendment. The agency shall notify the

Director in advance of changes that will result in an extension of the

grant period or require additional funds, or when the agency plans to

make a budget transfer from administrative costs to project costs or

vice versa.

(b) OSM shall either approve or disapprove the amendment within 30

days of its receipt.

15. Section 886.18 is amended by revising paragraphs (a)(2) and

(a)(3); by redesignating paragraphs (b) and (c) as paragraphs (c) as

(d) respectively; by adding a new paragraph (b); and by revising the

newly redesignated paragraphs (c) and (d) to read as follows:

Sec. 886.18 Grant reduction, suspension, and termination.

(a) * * *

(2) If an agency fails to obligate moneys distributed and granted

within three years from the date of grant award, or within an extension

granted under Sec. 886.13 or Sec. 886.17, OSM may reduce the grant in

accordance with Sec. 872.11 (b)(1) and (b)(2) of this subchapter.

(3) If an agency fails to implement, enforce, or maintain an

approved State regulatory program or any part thereof and, as a result,

the administration and enforcement grant provided under part 735 of

this chapter is terminated, OSM shall terminate the grant awarded under

this part. This paragraph does not apply to Indian tribes who receive

reclamation funds without having an approved regulatory program.

* * * * *

(b) Remedies for noncompliance. If a grantee or subgrantee

materially fails to comply with any term of an award, whether stated in

a Federal statute or regulation, an assurance in a State plan or

application, a notice of award, or elsewhere, OSM may take one or more

the following actions, as appropriate in the circumstances:

(1) Temporarily withhold cash payments pending correction of the

deficiency by the grantee or subgrantee;

(2) Disallow (that is, deny both use of funds and matching credit

for) all or part of the cost of the activity or action not in

compliance;

(3) Wholly or partly suspend or terminate the current award for the

grantee's or subgrantee's program;

(4) Withhold further grant awards for the program; or

(5) Take other remedies that may be legally available.

(c) Grant reduction, suspension, and termination procedures. (1)

The OSM official delegated grant signature authority shall give the

agency at least 30 days written notice of intent to reduce, suspend, or

terminate a grant. OSM must send this notice by certified mail, return

receipt requested. OSM shall include in the notice the reasons for the

proposed action and the proposed effective date of the action.

(2) OSM shall afford the agency opportunity for consultation and

remedial action before reducing or terminating a grant.

(3) The OSM official delegated grant signature authority shall

notify the agency of the termination, suspension, or reduction of the

grant in writing by certified mail, return receipt requested.

(4) Upon termination, the agency shall refund or credit to the Fund

that remaining portion of the grant money not encumbered. However, the

agency shall retain any portion of the grant that is required to meet

contractual commitments made before the effective date of termination.

(5) Upon receiving notification of OSM's intent to terminate the

grant, the agency shall not make any new commitments without OSM's

approval.

(6) OSM may allow termination costs as determined by applicable

Federal cost principles listed in Office of Management and Budget

Circular A-87.

(7) Either OSM or the agency may terminate or reduce a grant if

both parties agree that continuing the program would not produce

beneficial results commensurate with the further expenditure of funds.

Such a termination for convenience shall be handled as an amendment and

shall be signed by the OSM official delegated grant signature

authority.

(d) Appeals. (1) Within 30 days of OSM's decision to reduce,

suspend, or terminate a grant, the agency may appeal the decision to

the Director.

(i) The agency shall include in the appeal a statement of the

decision being appealed and the facts that the agency believes justify

a reversal or modification of the decision.

(ii) The Director shall decide the appeal within 30 days of

receipt.

(2) Within 30 days of the Director's decision to reduce, suspend,

or terminate a grant, the agency may appeal the decision to the

Secretary.

(i) The agency shall include in the appeal a statement of the

decision being appealed and the facts that the agency believes justify

a reversal or modification of the decision.

(ii) The Secretary shall act upon the appeal within 30 days of

receipt.

16. Section 886.19 is revised to read as follows:

Sec. 886.19 Audit.

The agency shall arrange for an independent audit pursuant to

guidance provided by the General Accounting Office and the Office of

Management and Budget.

17. Section 886.20 is revised to read as follows:

Sec. 886.20 Administrative procedures.

The agency shall follow administrative procedures governing

accounting, payment, property, and related requirements contained in 43

CFR part 12, subpart C and use the property form specified by OSM and

[[Page 9983]] approved by the Office of Management and Budget.

18. Section 886.21 is amended by revising paragraph (a) to read as

follows:

Sec. 886.21 Allowable costs.

(a) Allowable reclamation costs include actual costs of

construction, operation and maintenance, planning and engineering,

construction inspection, other necessary administrative costs, and up

to 90 percent of the costs of the acquisition of land.

* * * * *

19. Section 886.22 is amended by revising paragraphs (a) and (d) to

read as follows:

Sec. 886.22 Financial management.

(a) The agency shall account for grant funds in accordance with the

requirements of 43 CFR part 12, subpart C. Accounting for grant funds

must be accurate and current.

* * * * *

(d) When advances are made, they should be made as closely as

possible to the actual time of the disbursement.

* * * * *

20. Section 886.23 is revised to read as follows:

Sec. 886.23 Reports.

(a) For each grant, the agency shall annually submit to OSM

reporting forms specified by OSM.

(b) At the completion of each grant, the agency shall submit a

completed Form OSM-76 and any other closeout reports specified by OSM.

21. Section 886.24 is amended by revising paragraph (a) and

deleting its designation as (a); revising paragraph (a)(1) and

redesignating as (a); redesignating paragraph (a)(2) as (b); and by

removing the existing paragraph (b) to read as follows:

Sec. 886.24 Records.

The agency shall maintain complete records in accordance with 43

CFR part 12, subpart C. This includes, but is not limited to, books,

documents, maps, and other evidence and accounting procedures and

practices sufficient to reflect properly--

(a) The amount and disposition of all assistance received for the

program; and

(b) * * *

22. Section 886.25 is added to read as follows:

Sec. 886.25 Special Indian lands procedures.

(a) This section applies to Indian lands not subject to an approved

Tribal reclamation program. The Director is authorized to mitigate

emergency situations or extreme danger situations arising from past

mining practices and begin reclamation of other areas determined to

have high priority on such lands.

(b) The Director is authorized to receive proposals from Indian

tribes for projects that should be carried out on Indian lands subject

to this Section and to carry out these projects under parts 872 through

882 of this chapter.

(c) For reclamation activities carried out under this section on

Indian lands, the Director shall consult with the Indian tribe and the

Bureau of Indian Affairs office having jurisdiction over the Indian

lands.

(d) If a proposal is made by an Indian tribe and approved by the

Director, the Tribal governing body shall approve the project plans.

The costs of the project may be charged against the money allocated to

OSM under Sec. 872.11(b)(5).

(e) Approved projects may be carried out directly by the Director

or through such arrangements as the Director may make with the Bureau

of Indian Affairs or other agencies.

PART 887--SUBSIDENCE INSURANCE PROGRAM GRANTS

23. The authority citation for part 887 is revised to read as

follows:

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

24. Section 887.3 is revised to read as follows:

Sec. 887.3 Authority.

The Director is authorized to approve or disapprove applications

for grants up to a total amount of $3,000,000 for each State with an

approved State reclamation plan provided moneys are available under

Sec. 872.11(b) of this chapter and Section 402(g)(1) of Pub. L. 95-87

(30 U.S.C. 1232).

25. Section 887.10 is revised to read as follows:

Sec. 887.10 Information collection.

The collections of information contained in 30 CFR part 887 have

been approved by the Office of Management and Budget under 44 U.S.C.

3501 et seq., and assigned clearance number 1029-0107. The information

will be used to grant funds to State regulatory authorities and Indian

tribes to administer their subsidence insurance program. Response is

required to obtain a benefit in accordance with 30 U.S.C. 1201 et seq.

Public reporting burden for this information is estimated to average 40

hours per response, including the time for reviewing instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collection of information.

Send comments regarding this burden estimate or any other aspect of

this collection of information, including suggestions for reducing the

burden, to the Office of Surface Mining Reclamation and Enforcement,

Information Collection Clearance Officer, 1951 Constitution Avenue,

N.W., Room 640 NC, Washington, D.C. 20240; and the Office of Management

and Budget, Paperwork Reduction Project (1029-0107), Washington, D.C.

20503.

26. Section 887.11 is revised to read as follows:

Sec. 887.11 Eligibility for grants.

A State is eligible for grants under this part if it has a State

reclamation plan approved under part 884 of this chapter and if it has

funds available under Sec. 872.11(b) of this chapter and Section

402(g)(1) of SMCRA, as amended, 30 U.S.C. 1232.

27. Section 887.12 is amended by revising paragraph (a), the

introductory sentence of paragraph (b), and paragraph (e) to read as

follows:

Sec. 887.12 Coverage and amount of grants.

(a) An agency may use moneys granted under this part to develop,

administer, and operate a subsidence insurance program to insure

private property against damages caused by subsidence resulting from

underground coal mining. The moneys may be used to cover costs to the

agency for services and materials obtained from other State and Federal

agencies or local jurisdictions according to OMB Circular A-87. Moneys

granted may be used to cover capitalization requirements and initial

reserve requirements mandated by applicable State law provided use of

such moneys is consistent with the Grants Management Common Rule (43

CFR part 12, subpart C).

(b) The grant application shall be submitted under the procedures

of 30 CFR part 886 and contain the following:

* * * * *

(e) Insurance premiums shall be considered program income and must

be used to further eligible subsidence insurance program objectives in

accordance with 43 CFR part 12, subpart C.

28. Section 887.13 is revised to read as follows:

Sec. 887.13 Grant period.

The grant funding period shall not exceed eight years from the time

the grant is approved by OSM. Unexpended funds remaining at the end of

any grant period shall be returned according to the 43 CFR part 12,

subpart C. [[Page 9984]]

PART 888--[REMOVED]

29. Part 888 is removed.

[FR Doc. 95-4259 Filed 2-21-95; 8:45 am]

BILLING CODE 4310-05-M