Coal Moisture

Federal RegisterDec 3, 1996

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SUMMARY: The Office of Surface Mining Reclamation and Enforcement (OSM)

proposes to amend its regulations governing how the excess moisture

allowance is determined for reclamation fee purposes. This action will

define terms and phrases related to the collection and testing of coal

samples used to determine the inherent and total moisture of coal;

identify acceptable American Society for Testing and Materials (ASTM)

standard sampling and testing methods for high and low-rank coals;

prescribe frequencies for collecting and testing coal samples; and

provide the coal industry with formulas for use in calculating an

excess moisture tonnage allowance for the purpose of reducing the

weight of coal subject to the abandoned mine land reclamation fee.

The proposed regulatory revision is necessary to clarify and

simplify technical guidance for all users, and to provide the coal

industry with standard criteria for calculating an excess moisture

allowance on all coals subject to reclamation fee payment. The intended

effect of this proposal is to enhance compliance with the provisions of

section 402 of the Surface Mining Control and Reclamation Act of 1977

(SMCRA or the ACT). Operator use of the prescribed criteria will ensure

that all tonnage reductions for excess moisture are taken on the same

basis.

DATES: Written comments: OSM will accept written comments on the

proposed rule until 5 p.m. Eastern time on February 3, 1997.

Public Hearings: OSM will accept requests for public hearings until

5 p.m. Eastern time on January 2, 1997.

ADDRESSES: Written comments: Hand-deliver or mail to the Office of

Surface Mining Reclamation and Enforcement, Administrative Record, Room

120, 1951 Constitution Avenue, NW., Washington, D.C. 20240.

Comments may also be sent through the Internet to OSM's

Administrative Record, Internet address: [email protected] Copies of

any messages received electronically will be filed with the

Administrative Record.

Request for public hearings: Submit requests to Dr. Kewal Kohli,

Office of Surface Mining Reclamation and Enforcement, U.S. Department

of the Interior, 9 Parkway Center, Pittsburgh, PA 15220, telephone

(412) 937-2175.

FOR FURTHER INFORMATION CONTACT: Dr. Kewal Kohli, telephone (412) 937-

2175.

SUPPLEMENTARY INFORMATION:

I. Public Comment Procedures

II. Background

III. Discussion of the Proposed Rules

IV. Procedural Matters

I. Public Comment Procedures

Written Comments

Written comments submitted on the proposed rule should be specific,

should be confined to issues pertinent to the proposed rule, and should

explain the reason for any recommended change. Where practical,

commenters should submit three copies of their comments. Comments

received after the close of the comment period (see DATES) or delivered

to addresses other than those listed above (see ADDRESSES), may not be

considered or included in the Administrative Record for the final rule.

Public Hearings

OSM will hold public hearings on the proposed rule by request only.

The times, dates, and addresses for all hearings will be announced in

the Federal Register at least 7 days prior to any hearings which are to

be held. Upon request, OSM will hold a public hearing on the proposed

rule in Washington, D.C. and in the State of Colorado. Individuals

wishing to attend, but not testify at any hearing should contact the

person identified under FOR FURTHER INFORMATION CONTACT beforehand to

verify that the hearing will be held, should also contact the person

listed under FOR FURTHER INFORMATION CONTACT.

Any person interested in participating at a hearing at a particular

location, or any disabled individual who requires special accommodation

to attend a public hearing, should inform Dr. Kohli (see FOR FURTHER

INFORMATION CONTACT) either orally or in writing of the desired hearing

location by 5 p.m. Eastern time on January 2, 1997. If no one has

contacted Dr. Kohli to express an interest in participating in a

hearing at a given location by that date the hearing will not be held.

If only one person expresses an interest, a public meeting rather than

a hearing may be held and the results will be included in the

Administrative Record.

If a hearing is held, it will continue until all persons wishing to

testify have been heard. To assist the transcriber and ensure an

accurate record, OSM requests that persons who testify at a hearing

provide the transcriber a written copy of their testimony.

To assist OSM in preparing appropriate questions, OSM also requests

that persons who plan to testify submit to OSM at the address

previously specified for the submission of written comments (see

ADDRESSES) an advance copy of their testimony.

II. Background

Section 402(a) of the SMCRA requires all operators of coal mining

operations subject to its provisions to pay a reclamation fee on each

ton of coal produced. In December 1977 OSM first promulgated

regulations to implement this provisions (42 FR 62714, December 13,

1977). Briefly, the regulations require that the Abandoned Mine Land

(AML) fees must be paid on the actual gross weight of the coal, at the

time of the first transaction (sale, transfer of ownership, or use)

involving the coal. This regulation has been in effect basically

unchanged since 1977. In 1982, OSM revised the regulatory language to

clarify the point in time of fee determination and to stress that the

actual gross weight of the coal must be used for fee calculation. At

that time OSM also specifically noted that no fees were owed on

impurities physically removed before the sale, transfer of possession

or use. In 1988, OSM again revised this regulation to allow an operator

who mined coal after July 1, 1988, to elect to take an allowance for

moisture contained in the coal at the time of sale that is determined

to be in excess of the inherent, or natural bed moisture, in the coal.

Initially, OSM adopted the excess moisture allowance to address an

inconsistency in the methods of determining coal weight under various

Federal taxation requirements. At the time OSM proposed to amend its

regulation to allow a deduction for excess moisture, the ASTM Committee

on Coal and Coke, whose membership included representatives of the

Internal Revenue Service (IRS) and OSM, was conducting a study to

develop and/or confirm precision statements for the ASTM standard test

method used to estimate the bed moisture in high-rank coals, ASTM

D1412-85, as it applied to coals of all ranks. In a letter of November

18, 1987, the IRS submitted the following comment in response to the

OSM proposal, ``the results of the ASTM or a similar study should be

received before one test is prescribed for use by all taxpayers.''

[[Page 64221]]

As an interim measure, until adequate and fully reliable testing

procedures became available for coals of all ranks, OSM's 1988 adopted

regulation incorporated a suggestion made by the IRS. OSM decided to

rely on a facts and circumstances test to allow an operator to elect to

take an allowance for excess moisture provided the operator could

demonstrate, through competent evidence, that there was a reasonable

basis for determining the existence and amount of excess moisture.

OSM's standard of reasonableness required an operator to provide

sufficient documentation to sustain the weight reduction. Although no

specific time periods were prescribed for testing, an operator was also

required to prove that time frames chosen to measure the existence and

amount of excess moisture were reasonable.

The preamble to the 1988 rule discussed OSM's willingness to accept

the standard ASTM test methods to determine inherent moisture, ASTM

D1412-85, and total moisture, ASTM D3302-82, pending the availability

of more suitable alternatives. OSM recognized that these tests were not

always reliable for this purpose and acknowledged its willingness to

accept other testing methods for some sub-bituminous and lignite coals.

OSM also stated its intent to develop technical guidance to assist

operators and to assure uniform application of the excess moisture

allowance throughout the industry.

As a result of the 1988 regulatory revision, under both OSM's

regulatory requirements, and the IRS Ruling (86-96), an operator may

claim a reduction in coal subject to reclamation fees, and a reduction

in coal subject to the black lung tax, by estimating the excess

moisture contained in the coal. OSM has notified the IRS of its intent

to propose a revision to its current regulation, and will continue to

consult with the IRS throughout this rulemaking process.

The final rule which OSM adopted in 1988, at 30 CFR Sec. 870.12,

allows an operator to elect to reduce the weight of coal tonnage

subject to reclamation fee payment by a percentage of excess moisture

estimated to be contained in the coal at the time of fee assessment.

OSM defines the term ``excess moisture'' as the difference between

``total moisture'' and ``inherent moisture.'' The ASTM definitions are

used for the terms ``total moisture'' and ``inherent moisture,'' at 30

CFR Sec. 870.5.

Standard laboratory test methods must be used to determine the

estimated amount of excess moisture contained in the coal that is used

as the basis for an excess moisture allowance. The excess moisture

contained in mined coal must be found by collecting a coal sample and

testing the sample to determine a percentage of inherent moisture

estimated to be in the undisturbed coal as it lies in the seam. The

operator must also collect and test coal at the shipping point to find

the estimated total moisture percentage in as-shipped coal. The

percentage of excess moisture that may be deducted from the weight of

the coal for fee payment purposes is then calculated by finding the

difference between the total moisture percentage and the inherent

moisture percentage.

OSM has issued five AML Payer Letters to provide technical guidance

to the coal industry and assist with the application of this

regulation. OSM has also published this guidance in the OSM Payer

Handbooks. The first AML Payer Letter, issued on June 16, 1988,

provided for the operator to: Make an inventory of any coal mined prior

to July 1, 1988, that was stockpiled, or otherwise stored on the mine

site; use the ASTM D1412 test as the standard test method to determine

the estimated percentage of inherent moisture; establish an accurate

estimate of the coal seam's baseline inherent moisture by taking one

inherent moisture test in each month of the first 24 months a coal seam

is in continuous operation; and, take one annual inherent moisture test

after completion of the baseline study period. The baseline can be

based, in part, on information from existing sources such as the United

States Geological Survey or the Department of Energy, provided the

operator uses its own sampling and testing data to validate or update

data obtained from these sources. An operator can use either ASTM

Standard Test Method for Total Moisture in Coal, D3302, or ASTM

Standard Practice for Proximate Analysis of Coal and Coke, test method

D3172, to determine an estimated total moisture percentage. Total

moisture is tested at the time of the initial bona fide sale, transfer

of ownership, or use of the coal. Operators are advised to maintain a

full description and rationale for any deviations from standard test

methods, according to 30 CFR Sec. 870.18(d).

The second AML Payer Letter, issued on September 28, 1988, provided

ten different examples illustrating how to calculate an excess moisture

allowance under various circumstances for coal that was either raw,

clean, or blended. That Letter also provides instructions for

completing the Coal Production and Reclamation Fee Report (Coal

Reclamation Fee Report), Form OSM-1, to report the excess moisture

allowance.

A third AML Payer Letter dated July 17, 1989, acknowledged that OSM

would accept: Total moisture tests performed by the operator's

customer, provided the operator maintains documentation to support the

test results; and, moisture percentages accepted by another taxing

authority only when the percentages were supported by actual test data.

This Letter provided notice that OSM would not accept the use of a core

sample to establish inherent moisture. The use of a weighted average in

calculations, and the type of test documentation an operator would need

to maintain are illustrated.

On September 14, 1990, OSM issued its fourth AML Payer Letter. This

Letter consolidated and replaced the guidance in the three previous AML

Payer letters on testing, completion of the Form OSM-1, and computing

the excess moisture allowance under various scenarios. OSM also re-

emphasized that total moisture should be determined for each day's

shipments.

In an AML Payer Letter issued on July 15, 1993, OSM was able to

expand its testing frequency guidelines for inherent moisture to

include quarterly testing as an alternative to monthly testing. This

came about as a result of research conducted by the OSM engineering

staff on actual excess moisture allowances taken for more than 4 years.

The AML Payer Letter advised operators that OSM would accept either

quarterly inherent moisture estimates based on tests taken once in a

quarter, or monthly tests. The ASTM had adopted the use of a corehole

sample to test for inherent moisture. The AML Payer Letter informed the

industry that OSM also accepts the use of corehole samples to test coal

for inherent moisture. OSM advised the industry that it cannot accept

residual moisture as inherent moisture because residual moisture and

inherent moisture are not equal. This AML Payer Letter also informed

the industry that OSM will provide notice when it proposes to adopt an

alternative procedure that will more accurately establish inherent

moisture in low-rank coal.

OSM's audits of excess moisture reduced tonnages find that

operators frequently fail to conform to inherent moisture test

procedures described in AML Payer Letters, and do not provide adequate

support for procedures they do use. Some operators mining large volumes

of low-rank coal base tonnage reductions on test data that is known to

be unreliable.

In October 1992, OSM conducted its own independent sampling and

testing program in Wyoming's Powder River

[[Page 64222]]

Basin to assess the reliability of existing ASTM methods and procedures

for determining inherent moisture in low-rank coal. In March 1993, OSM

met with operators in Gillette, Wyoming, to provide them with the

results of its study and inform them that OSM was considering

regulatory requirements for inherent moisture testing. This rulemaking

proposes to adopt a new requirement for establishing inherent moisture

in low rank coal based, in part, on the results of OSM's Powder River

Basin sampling and testing program.

III. Discussion of the Proposed Rules

At this time OSM is proposing to revise its regulations governing

the excess moisture allowance to codify regulatory technical

requirements to be met by an operator who elects to take an excess

moisture allowance in either high- or low-rank coals. The proposal

incorporates by reference ASTM standards used for collecting and

testing a coal sample as specified in Sec. 870.19(a), Table 1 and Table

2, and Sec. 870.20(a), Tables 3, 4, and 5, as published in the 1994

Annual Book of ASTM Standards, Volume 05.05. A copy of the ASTM

standards is available for inspection at the OSM Headquarters Office,

Office of Surface Mining Reclamation and Enforcement, Administrative

Record, Room 120, 1951 Constitution Avenue, NW., Washington, DC, or at

the Office of the Federal Register, 800 North Capitol St., Washington,

DC. The proposed rule establishes a frequency for using ASTM standard

test methods on coals of all ranks, and adopts the method approved by

the ASTM to establish inherent moisture in low-rank coal, the ASTM

D1412-93, Appendix XI. Use of this procedure for low-rank coal would

ensure excess moisture allowances taken on low-rank coals are on a

comparable basis to those taken on high-rank coal, and all excess

moisture allowances are fair and equitable. OSM's proposal also

includes an option that would provide operators with a method to

calculate an allowance for the inherent moisture present in as-shipped

coal. This would be of particular benefit when an operator sells large

volumes of coal, and/or sells coal with a substantial variance between

the total and inherent moisture.

Definitions--Section 870.5

OSM would modify the existing definition for excess moisture by

including, by reference, a formula for use in calculating excess

moisture in high- and low-rank coals. The formula to be used for high-

rank coals is found in a new Sec. 870.19 and the formula for low-rank

coals is in a new Sec. 870.20. The existing definition of inherent

moisture would be expanded to incorporate by reference the specific

ASTM sample collection methods and test procedures shown in

Sec. 870.19, Table 2, Calculating INHERENT moisture percentage in HIGH-

rank coal, and Sec. 870.20, Table 4, and Table 5, Calculating INHERENT

moisture percentage in LOW-rank coal. The existing definition of total

moisture would be expanded to incorporate by reference ASTM criteria in

Sec. 870.19, Table 1, for Calculating the TOTAL moisture percentage in

HIGH-rank coal, and Sec. 870.20, Table 3, for Calculating the TOTAL

moisture percentage in LOW-rank coal. The expansion of the existing

definitions to incorporate by reference specific ASTM sample collection

methods and test procedures would provide precise technical standards

to facilitate operator compliance with OSM's requirements, and to

ensure that the same basis is used to calculate all excess moisture

allowances.

General Rules for Calculating Excess Moisture--Section 870.18

OSM proposes to modify 30 CFR Sec. 870.18, Excess moisture content

allowance at Sec. 870.18 (a), (b), and (c). Section 870.18(a) requires

an operator to demonstrate through competent evidence that the basis

for determining the existence and amount of excess moisture is

reasonable. OSM requires documentation to be updated as needed to prove

an excess moisture allowance taken by an operator continues to be

valid. Section 870.18(b) requires standard laboratory analyses for

testing inherent and total moisture. Section 870.18(c) requires an

operator who blends coal mined from multiple seams prior to the initial

sale, transfer or use of the coal to test for variations in the

inherent moisture amounts from different seams.

This proposal would replace the reasonableness standard found at

Sec. 870.18(a), the generic laboratory test requirement at

Sec. 870.18(b), and the requirement for a separate test of coal from

each seam mined prior to blending the coal for sale, transfer of

ownership or use. OSM proposes a revision to the existing regulation

that would recognize the distinct differences in high- and low-rank

coals in new Secs. 870.19 and 870.20. Section 870.19 proposes

acceptable standards for collecting and testing a sample of high-rank

coal to establish the percentage of inherent and total moisture

contained in the coal, and calculate the excess moisture allowance.

Section 870.20 proposes like standards for calculating the excess

moisture allowance for low-rank coal.

Revised section 870.18(c) would add definitions to further explain

the meaning of terms as they are used in new Secs. 870.19 and 870.20.

``As-shipped coal'' and ``tipple coal'' is defined as the coal found at

the mine or loading facility. A precise meaning for a ``channel

sample'' and ``core sample'' is given and the definitions incorporate

by reference the specific ASTM procedure used to take the particular

kind of sample. The ``correction factor'' is added as the method used

to establish the difference between the equilibrium moisture and

inherent moisture in low-rank coal under Sec. 870.20. ``Equilibrium

moisture'' is defined as the method used to estimate the inherent

moisture in all coals, and ASTM D1412 and ASTM D1412, Appendix XI, are

incorporated by reference. Types of ``high-rank coals'' and ``low-rank

coals'' are defined to explain how these terms are used throughout

Sec. 870.5 and Secs. 870.18-20.

How To Calculate Excess Moisture in HIGH-Rank Coal--Section 870.19

A new Sec. 870.19 would provide standard criteria for an operator

to use to establish excess moisture in high-rank coal. Table 1 includes

the ASTM standard sample collection method, ASTM D2234-89, Standard

Test Methods for Collection of a Gross Sample; and test procedure,

ASTM-D3302-91, Standard Test Method for Total Moisture in Coal, that

OSM would accept for use as the basis for calculating the percentage of

total moisture in as-shipped high-rank coal each day the coal is either

shipped or used.

The daily total moisture test results would be converted to

quarterly figures to be reported to OSM on the OSM-1 Coal Reclamation

Fee Report. To calculate the quarterly total moisture percentage an

operator would: (1) multiply the daily total moisture percentage by the

tonnage shipped or used that day, to find the daily total moisture

tonnage; and, (2) add the daily total moisture tonnage for each day in

the quarter; and, (3) add the daily tonnage shipped or used in the

quarter, to find the total tonnage shipped or used during the quarter.

Then, divide the sum of the daily total moisture tonnage, step (2), by

the sum of the daily tonnage shipped or used in the quarter, step (3).

This will result in the total moisture percentage in high-rank coal for

the quarter which would be reported on the OSM-1, Coal Reclamation Fee

Report.

Table 2 provides three methods for sampling high-rank coal, and

testing the sample to determine the inherent moisture percentage that

would be acceptable to OSM. To collect a coal

[[Page 64223]]

sample directly from a coal seam an operator could use either a core or

a channel sample method. If a core sample is collected the operator

would be required to collect the sample using procedures in ASTM D5192-

91, Standard Practice for Collection of Coal Samples from Core and to

use laboratory procedures in ASTM D1412-93, Standard Test Method for

Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity and

30 deg.C to estimate the inherent moisture in the sample. If a channel

sample method is used the operator would be required to collect the

sample using procedures in ASTM D4596-93, Standard Practice for

Collection of Channel Samples of Coal in a Mine and to use laboratory

procedures in either ASTM D1412-93, Standard Test Method for

Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity and

30 deg.C, or ASTM D3302-91, Standard Test Method for Total Moisture in

Coal to estimate the inherent moisture in the sample. To collect a

sample of blended coal, as-shipped coal, tipple coal, commingled coal,

or coal from slurry ponds an operator would use Procedures in ASTM

D2234-89, Standard Test Methods for Collection of a Gross Sample and

laboratory procedures in ASTM D1412-93, Standard Test Method for

Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity and

30 deg.C would be required to estimate the inherent moisture in the

sample.

An operator would be required to select one of two options for

timing inherent moisture tests, either quarterly or monthly. If a

quarterly inherent moisture test is chosen, the operator would have to

report the results of one inherent moisture test taken at any time

during the quarter on the OSM-1 form for the quarter in which the test

was taken. If monthly inherent moisture testing is preferred, the

operator would be required to create a 24-month inherent moisture

baseline during the first 24-months a coal seam is in continuous

operation. To create the 24-month inherent moisture baseline an

operator would have to collect and test one sample in each month of the

calendar quarter. The quarterly inherent moisture percentage reported

to OSM for the first 8 quarters a seam is in continuous operation would

then be based on a weighted average of the 3-monthly inherent moisture

test results. To determine the quarterly weighted average inherent

moisture percentage an operator would have to: (1) multiply the

inherent moisture percentage for one month by the number of tons

produced or shipped in that month to find the monthly inherent moisture

tonnage; (2) add the inherent moisture tonnage determined in (1) for

each of the 3 months to find the quarterly inherent moisture tonnage;

(3) divide the inherent moisture tonnage found in (2) by the total

number of tons produced or shipped during the three months of the

quarter; and, (4) report the weighted average percentage for the

quarter to OSM on the OSM-1 form. After the first 24-months an operator

would have to use an updated rolling average percentage to report

inherent moisture percentages for all subsequent quarters in which a

coal seam is continuously mined. The rolling average percentage would

be calculated by: adding the results of one inherent moisture test of

one coal sample collected during every 12-month period to the inherent

moisture percentages for the preceding 23 tests, and dividing the sum

of these tests by 24.

Section 870.19(a) provides instruction on how an operator would

calculate the excess moisture in high-rank coal by using one of two

methods. One method involves the simple subtraction of the inherent

moisture percentage from the total moisture percentage as it is found

in the existing rule. OSM expects that most operators of small to

medium size mines would likely prefer to continue to use this method. A

new alternative formula is added as a second method in Sec. 870.19(a)

that would allow an adjustment in the excess moisture calculation for a

percentage of inherent moisture contained in the as-shipped coal. Some

operators who either mine a large volume of coal, or mine coal with a

significant variance in total and inherent moisture, have requested

OSM's approval to use this formula for calculating a tonnage reduction

for excess moisture. OSM is now proposing this option as an alternative

to the existing formula used to determine the excess moisture

percentage. The excess moisture percentage found in Sec. 870.19(a) is

multiplied by the tonnage shipped or used during the quarter to

determine the excess moisture reduced tonnage for the quarter under

Sec. 870.19(b).

How to calculate excess moisture in LOW-rank coal--Section 870.20

A new Sec. 870.20 would provide standard criteria for an operator

to use to establish excess moisture in low-rank coal. Table 3 includes

the ASTM standard sample collection method, ASTM D2234-89, Standard

Test Methods for Collection of a Gross Sample, and test procedure,

ASTM-D 3302-91, Standard Test Method for Total Moisture in Coal, that

OSM would accept for use as the basis for calculating the percentage of

total moisture in as shipped low-rank coal each day the coal is either

shipped or used.

The daily total moisture test results would be converted to

quarterly figures to be reported to OSM on the OSM-1 Coal Reclamation

Fee Report. To calculate the quarterly total moisture percentage an

operator would: (1) multiply the daily total moisture percentage by the

tonnage shipped or used that day, to find the daily total moisture

tonnage; (2) add the daily total moisture tonnage for each day in the

quarter; and, (3) add the daily tonnage shipped or used in the quarter,

to find the total tonnage shipped or used during the quarter. Then,

divide the sum of the daily total moisture tonnage, step (2), by the

sum of the daily tonnage shipped or used in the quarter, step (3). This

will result in the total moisture percentage in low-rank coal for the

quarter which would be reported on the OMS-1, Coal Reclamation Fee

Report.

Table 4 provides instructions on how an operator would determine

the inherent moisture percentage of coal mined from a bench of low-rank

coal by: collecting one sample of as-shipped coal in each month of the

calendar quarter using ASTM D2234-89, Standard Test Methods for

Collection of a Gross Sample of Coal; and, testing each sample for

equilibrium moisture following laboratory procedures in ASTM D1412-93,

Standard Test Method for Equilibrium Moisture of Coal at 96 to 97

Percent Relative Humidity and 30 deg.C.

The operator would calculate the inherent moisture percentage to

report to OSM for the quarter by averaging the results from the 3

monthly equilibrium moisture tests, and adding the correction factor.

Table 5 provides the methodology for establishing the correction factor

for all coal mined from each bench of low-rank coal.

Table 5 provides the method an operator would be required to use to

establish a correction factor during the first quarter an excess

moisture allowance is taken on low-rank coal mined from a bench. The

correction factor would be found by using ASTM D1412 Appendix XI,

Standard Test Method for Equilibrium Moisture of Coal at 96 to 97

Percent Relative Humidity and 30 deg.C to collect 5 samples of coal

from a freshly exposed, unweathered coal seam face during each month of

the quarter. Each of the 15 samples, 5 in each quarter, would be tested

for inherent moisture and equilibrium moisture as required by ASTM

D1412 Appendix XI, Standard Test Method for

[[Page 64224]]

Equilibrium Moisture of Coal at 96 to 97 Percent Relative Humidity and

30 deg.C.

The operator would be required to establish the correction factor

for the first quarter and all later quarters by: averaging the 15

monthly inherent moisture test results; and, averaging the 15 monthly

equilibrium moisture test results; and, subtracting the average

inherent moisture from the average equilibrium moisture. The correction

factor would apply only to coal mined from the bench that is sampled.

The correction factor could be changed at any time provided new samples

are taken and all procedures shown in Table 5 are repeated.

IV. Procedural Matters

Federal Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995, Public Law

104-13, OSM is requesting comments from the public and the Office of

Management and Budget (OMB) on the information collections contained in

this proposed rulemaking. Comments should address: (a) Whether the

proposed collection of information is necessary for the proper

performance of OSM, including whether the information will have

practical utility; (b) the accuracy of OSM's estimate of the burdens of

the proposed collection of information; (c) ways to enhance the

quality, utility, and clarity of the information to be collected; and

(d) ways to minimize the burden of collection on the respondents,

including the use of automated collection techniques or other forms of

information technology. No person is required to respond to a

collection of information unless it displays a currently valid OMB

Control Number. OSM's Control Numbers are displayed in 30 CFR Parts

710-955.

30 CFR Part 870

Title: Abandoned mine reclamation fund--fee collection and coal

production reporting.

OMB Control Number: 1029-0090.

Abstract: Section 402 of the Surface Mining Control and Reclamation

Act of 1977 requires operators of coal mining operations to pay a

reclamation fee to the Secretary for deposit in the Abandoned Mine

Reclamation Fund for the purpose of reclaiming lands mined and left

abandoned, or inadequately reclaimed, prior to the Act's effective

date. Reclamation fees are to be paid on each ton of coal produced.

Section 870.18 of the regulations allows an operator to take an

excess moisture content allowance when calculating the amount of

reclamation fees that are owed. Top substantiate the calculated

moisture deduction claimed, an operator (or other entity responsible

for the payment of the reclamation fee) is required to document by

standard laboratory analysis the excess moisture content for each coal

seam mined. This documentation must be updated as necessary to

establish the continuing validity of the excess moisture content

allowance taken by the operator.

Need For and Use: The information submitted will be used by OSM

auditors to verify an operator's compliance with Section 402 of the Act

and the requirements of the regulation at 30 CFR 870.18, 870.19, and

870.20. During an audit, operators must substantiate how the

calculation for excess moisture was determined. Operators must retain

their records for a 6-year period to allow for the audit of tax

records. Courts have ruled that the AML fee is an excise tax. The

applicable provision of the Energy Policy Act of 1992 (Section 2515)

extended the fee through 2004.

Respondents: Approximately 1,050 coal mining operators who take the

coal moisture deduction allowance.

Total Annual Burden: OSM estimates that 2 hours will be required to

prepare and maintain the documentation for audit purposes per

respondent. The total annual burden is estimated to be 2,100 hours.

Send comments regarding these burden estimates or any other aspect

of these information collection requirements by January 2, 1997, to the

Office of Surface Mining Reclamation and Enforcement, Information

Collection Clearance Officer, SIB 120, 1951 Constitution Avenue, NW.,

Washington, DC 20240; and the Office of Information and Regulatory

Affairs, Office of Management and Budget, Attention: Interior Desk

Officer, 725 17th Street, NW, Washington, DC 20503.

Please refer to OMB Control Number 1029-090 in any correspondence.

Executive Order 12988 on Civil Justice Reform

The Department of the Interior has determined that this proposed

rule meets the requirements of sections (3)(a) and 3(b)(2) of Executive

Order 12988, Civil Justice Reform (56 FR 55195).

Executive Order 12866

This proposed rule has been determined to be significant under

Executive Order 12866 and has been reviewed by the Office of Management

and Budget.

The proposed rule is not considered economically significant under

section 3(f)(1) of Executive Order 12866 and will not have a

significant economic effect on the coal mining industry, or on regional

or national economies. OSM is attempting to provide a viable

methodology that will enable coal mine operators to calculate the

correct allowance for excess moisture. OSM is not attempting to specify

any given amount, or percentage, as an excess moisture allowance. For

that reason it is not possible to predict the cost that this revision

will have in terms of the amount of the additional AML fees that the

industry will pay and the government collect or the industry save and

the government not collect. Based on AML tonnages reported, and the

total moisture allowances taken for 1995, the industry saved

approximately $5,284,000 (rounded) in terms of the tonnage reported.

With regard to benefits, the proposed rule will ensure that all excess

moisture allowances are fair and equitable. OSM's proposal also

includes an option that would provide operators with a method to

calculate an allowance for the inherent moisture present in as-shipped

coal. This would be of particular benefit when an operator sells large

volumes of coal, and/or sells coal with a substantial variance between

the total and inherent moisture.

To assist OSM in complying with the requirements of Executive Order

12866, OSM invites comments on the potential costs and benefits of the

proposed rule.

Regulatory Flexibility Act

In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et

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

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

small entities for the reason stated below. This proposed rule will

provide two methods for operators to calculate the excess moisture in

high-rank coal. OSM expects that most operators of small to medium size

mines would likely prefer to continue to use the current method of

calculation while operators who either mine a large volume of coal, or

mine coal with a significant variance in total and inherent moisture,

will use the proposed option as an alternative to the existing formula

used to determine the excess moisture percentage. Thus, for small

operators any change from current practices would be optional.

Unfunded Mandates Reform Act

This rule is not expected to impose a cost of $100 million or more

in any given year on any governmental entity or the private sector.

[[Page 64225]]

National Environmental Policy Act

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

proposed rule and has made a tentative finding that the proposed rule

would not significantly affect the quality of the human environment

under section 102(2)(C) of the National Environmental Policy Act of

1969 (NEPA), 42 U.S.C. 4332(2)(C). It is anticipated that a Finding of

No Significant Impact (FONSI) will be approved for the final rule in

accordance with OSM procedures under NEPA. The EA is on file in the OSM

Administrative Record at the address specified previously (see

ADDRESSES). An EA will be completed on the final rule and a finding

made on the significance of any resulting impacts prior to promulgation

of the final rule.

Author

The principal author of this proposed rule is Dr. Kewal Kohli,

Mining Engineer, Office of Surface Mining, U.S. Department of the

Interior, 3 Parkway Center, Pittsburgh, PA 15220.

Inquiries with respect to the proposed rule should be directed to

Dr. Kohli at the address and telephone specified under FOR FURTHER

INFORMATION CONTACT.

List of Subjects in 30 CFR Part 870

Incorporation by reference, Reporting and recordkeeping

requirements, Surface mining, Underground mining.

Dated: June 24, 1996.

Bob Armstrong,

Assistant Secretary, Land and Minerals Management.

Accordingly, it is proposed to amend 30 CFR part 870 as set forth

below:

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

PRODUCTION REPORTING

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

follows:

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

2. Section 870.5 is amended by revising definitions of ``excess

moisture,'' ``inherent moisture'' and ``total moisture'' to read as

follows:

Sec. 870.5 Definitions.

* * * * *

Excess moisture means the difference between total moisture and

inherent moisture, calculated according to Sec. 870.19 for high-rank

coals or the difference between total moisture and inherent moisture

calculated according to Sec. 870.20 for low-rank coals.

* * * * *

Inherent moisture means moisture that exists as an integral part of

the coal seam in its natural state, including water in pores, but

excluding that present in macroscopically visible fractures, as

determined according to Sec. 870.19(a) or Sec. 870.20(a).

* * * * *

Total moisture means the measure of weight loss in an air

atmosphere under rigidly controlled conditions of temperature, time and

air flow, as determined according to either Sec. 870.19(a) or

Sec. 870.20(a).

* * * * *

3. Section 870.18 is revised to read as follows:

Sec. 870.18 General rules for calculating excess moisture.

If you are an operator who mined coal after June 1988, you may

deduct the weight of excess moisture in the coal to determine

reclamation fees you owe under Sec. 870.12(b)(3)(i). Excess moisture is

the difference between total moisture and inherent moisture. To

calculate excess moisture in HIGH-rank coal, follow Sec. 870.19. To

calculate excess moisture in LOW-rank coal, follow Sec. 870.20. Report

your calculations on OSM-1, Coal Reclamation Fee Report, for every

calendar quarter in which you claim a deduction. Some cautions:

(a) You or a customer of yours may do any test required by

Secs. 870.19 and 870.20. But whoever does a test, you are to keep test

results and all related records for at least six years after the test

date.

(b) If OSM disallows any or all of an allowance for excess

moisture, you must submit an additional fee plus interest computed

according to Sec. 870.15(c) and penalties computed according to

Sec. 870.15(f).

870.20. Applicable ASTM standards are incorporated by reference as

published in the 1994 Annual Book of ASTM Standards, Volume 05.05. The

Director of the Federal Register approved this incorporation by

reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Each

applicable ASTM standard is incorporated as it exists on the date of

the approval, and a notice of any change in it will be published in the

Federal Register. You may obtain copies from the ASTM, 1916 Race

Street, Philadelphia, Pennsylvania, 19103-1187. A copy of the ASTM

standards is available for inspection at the Office of Surface Mining

Reclamation and Enforcement, Administrative Record, Room 120, 1951

Constitution Avenue, NW., Washington, DC, or at the Office of the

Federal Register, 800 North Capitol St., NW., Suite 700, Washington,

DC.

Note: The incorporation by reference and availability of

inspection copies are pending approval by the Office of the Federal

(1) As-shipped coal means raw or prepared coal that is loaded for

shipment from the mine or loading facility.

(2) Channel sample means a sample of coal collected according to

ASTM standard D4596-93 from a channel extending from the top to the

bottom of a coal seam.

(3) Core sample means a cylindrical sample of coal that represents

the thickness of a coal seam penetrated by drilling according to ASTM

standard D5192-91.

(4) Correction factor means the difference between the equilibrium

moisture and the inherent moisture in low rank coals for the purpose of

Sec. 870.20(a).

(5) Equilibrium moisture means an estimate of the inherent moisture

in all coals. The equilibrium moisture is determined according to ASTM

standard D1412-93 and accompanying appendices, as appropriate.

(6) High-rank coals means anthracite, bituminous, and subbituminous

A and B coals.

(7) Low-rank coals means subbituminous C and lignite coals.

(8) Tipple coal means coal from a mine or loading facility that is

ready for shipment.

4. Sections 870.19 and 870.20 are added to read as follows:

Sec. 870.19 How to calculate excess moisture in high-rank coal.

Here are the requirements for calculating the excess moisture in

high-rank coal for a calendar quarter. Applicable ASTM standards are

incorporated by reference as published in the 1994 Annual Book of ASTM

Standards, Volume 05.05. The Director of the Federal Register approved

this incorporation by reference in accordance with 5 U.S.C. 552(a) and

1 CFR part 51. Each applicable ASTM standard is incorporated as it

exists on the date of the approval, and a notice of any change in it

will be published in the Federal Register. You may obtain copies from

the ASTM, 1916 Race Street, Philadelphia, Pennsylvania, 19103-1187. A

copy of the ASTM standards is available for inspection at the Office of

Surface Mining Reclamation and Enforcement, Administrative Record, Room

120, 1951 Constitution Avenue, NW., Washington, DC, or at the Office of

the Federal Register, 800 North

[[Page 64226]]

Capitol St., NW., Suite 700, Washington, DC.

Note: The incorporation by reference and availability of

inspection copies are pending approval by the Office of the Federal

(a)(1) Calculate the excess moisture percentage using one of these

equations:

[GRAPHIC] [TIFF OMITTED] TP03DE96.000

(2) EM equals excess moisture percentage. TM equals total as-

shipped moisture percentage calculated according to Table 1 of this

section. IM equals inherent moisture percentage calculated according to

Table 2 of this section.

(b) Multiply the excess moisture percentage by the tonnage shipped

or used during the quarter.

Table 1 to Sec. 870.19.--Calculating Total Moisture Percentage in High-

Rank coal \1\

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

Collect and test each day you Convert daily test results to

ship or use coal quarterly figures and report them

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

Collect a sample of as-shipped or 1. Multiply daily total moisture

used coal. Follow procedures in percentage by daily tonnage shipped

ASTM D2234-89 or used. You now have daily total

Test the sample for daily total moisture tonnage.

moisture percentage. Follow 2. Add up daily total moisture

laboratory procedures in ASTM tonnage for the quarter.

D3302-91. 3. Add up daily tonnage shipped or

used in the quarter.

4. Divide 2 by 3.

Report this total moisture percentage

in high-rank coal for the quarter on

OSM-1, Coal Reclamation Fee Report.

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

\1\ See Sec. 870.19 for the incorporation by reference of the ASTM

standards.

Table 2 to Sec. 870.19.--Calculating INHERENT Moisture Percentage in

HIGH-Rank Coal \1\

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

Choose from 2 ways to time the tests

Choose from 3 ways to collect and and convert the results for quarterly

test reporting

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

First First

Collect a core sample. Follow Collect and test once each quarter.

procedures in ASTM D5192-91. Report test results by quarter on

OSM-1. Test results need no

converting; they are in quarterly

units already.

Test the sample to estimate

inherent moisture. Follow

laboratory procedures in ASTM

D1412-93.

Or second Or second

Collect a channel sample. Follow Create a 24-month baseline and update

procedures in ASTM D4596-93. as follows:

Test the sample to estimate For reporting months 1-24...

inherent moisture. Follow Collect and test one sample each

laboratory procedures in ASTM month. Each quarter, calculate a

D1412-93 or ASTM D3302-91. weighted average percentage of

inherent moisture:

Multiply a month's inherent

moisture percentage by tons produced

or shipped. You now have the month's

inherent moisture tonnage.

Add up 3 months of that

inherent moisture tonnage.

Divide by tons produced or

shipped in those 3 months.

Report the quarter's weighted average

percentage on OSM-1.

Or third

Collect a sample of blended coal, For all subsequent months...

as-shipped coal, tipple coal, Collect and test one sample for

commingled coal, or coal from inherent moisture every 12 months.

slurry ponds. Follow procedures Calculate--and report in the

in ASTM D2234-89. following 4 quarters--one updated

Test the sample to estimate rolling average percentage:

inherent moisture. Follow Add to the annual sample

laboratory procedures in ASTM percentage the inherent moisture

D1412-93. percentages for the preceding 23

tests.

Divide by 24.

Report the quarter's weighted average

percentage on OSM-1.

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

\1\ See Sec. 870.19 for the incorporation by reference of the ASTM

standards.

Sec. 870.20 How to calculate excess moisture in LOW-rank coal.

Here are the requirements for calculating the excess moisture in

low-rank coal for a calendar quarter. Applicable ASTM standards are