Ownership and Control; Permit Application Process; Improvidently Issued Permits

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

is amending its regulations governing permit application information

requirements; criteria for permit issuance; and criteria, procedures,

and sanctions for improvidently issued permits. The affected provisions

generally address ownership and control information and compliance

review requirements. This action is being taken in response to a

decision by the U.S. Court of Appeals for the District of Columbia

Circuit invalidating the previous rules as inconsistent with the

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

The court held that SMCRA authorizes the regulatory authority to block

issuance of a permit only for unabated violations incurred by the

applicant or entities owned or controlled by the applicant, not, as

provided in the previous rules, for violations incurred by any person

who owns or controls the permittee. The rules being promulgated today

cure this defect. Because of the urgent need to fill the void created

by the court's decision, OSM is invoking the good cause exemptions of

the Administrative Procedure Act and is adopting these rules on an

interim final basis, effective April 3, 1997.

EFFECTIVE DATE: April 3, 1997.

FOR FURTHER INFORMATION CONTACT:

Nancy Broderick or Dennis Rice, Office of Surface Mining Reclamation

and Enforcement, U.S. Department of Interior, 1951 Constitution Ave.,

NW., Washington, DC 20240. Telephone: (202) 208-2700 or 2829. E-mail

address; [email protected] or [email protected]. Additional information

concerning OSM, this rule, and related documents may be found on OSM's

home page at hhtp://www.osmre.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background.

II. Rationale for Invoking APA Good Cause Exemptions.

III. Discussion of Interim Final Rules.

A. Section 773.5-Definitions.

B. Section 773.15(b)--Permit Block.

C. Section 773.15(e)--Final Compliance Review.

D. Section 773.17(i)--Permit Condition.

E. Sections 773.20 and 773.21--Improvidently Issued Permits.

F. Section 778.10--Information Collection.

G. Section 778.13--Organizational and Ownership Information

Requirements for Permit Applications.

H. Section 778.14--Compliance Information Requirements for

Permit Applications.

I. Section 843.11(g)--Notification Following Issuance of

Cessation Order.

J. Section 843.21--Federal Procedures for Improvidently Issued

State Permits.

K. Effect in Federal Program States and on Indian Lands.

L. Effect on State Programs.

M. Comparison of Interim Final Rule Language with Prior Rule

Language.

IV. Procedural Matters.

I. Background

Section 510(c) of SMCRA, 30 U.S.C. 1260(c), requires that each

application for a permit to conduct surface coal mining operations

include a schedule listing ``any and all notices of violation of this

Act and any law, rule, or regulation of the United States, or of any

department or agency in the United States pertaining to air or water

environmental protection incurred by the applicant in connection with

any surface coal mining operation during the three-year period prior to

the date of application.'' It further specifies that ``[w]here the

schedule or other information available to the regulatory authority

indicates that any surface coal mining operation owned or controlled by

the applicant is currently in violation of this Act or such other laws

referred to in this subsection, the permit shall not be issued until

the applicant submits proof that such violation has been corrected, or

is in the process of being corrected to the satisfaction of the

regulatory authority, department, or agency which has jurisdiction over

such violation.'' Finally, it provides that ``no permit shall be issued

to an applicant after a finding by the regulatory authority, after

opportunity for hearing, that the applicant, or the operator specified

in the application, controls or has controlled mining operations with a

demonstrated pattern of willful violations of this Act of such nature

and duration with such resulting irreparable damage to the environment

as to indicate an intent not to comply with the provisions of this

Act.'' Id.

To implement these provisions of the Act, OSM adopted three sets of

regulations known respectively as the ownership and control rule (53 FR

38868, October 3, 1998), the permit information rule (54 FR 8982, March

2, 1989), and the improvidently issued permits rule, also known as the

permit rescission rule (54 FR 18438, April 28, 1989). The ownership and

control rule revised 30 CFR 773.15(b) to prohibit permit issuance on

the basis of unabated violations attributed to either the applicant or

any person who owns or controls the applicant. It also defined the

terms ``owns or controls'' and ``owned or controlled'' as used in that

rule and as the latter term is used in section 510(c) of SMCRA. The

permit information rule revised 30 CFR 778.13 and 778.14 to establish

permit application information and compliance review and reporting

requirements consistent with the new ownership and control definition

and the revisions that the ownership and control rule made to 30 CFR

773.15(b). The improvidently issued permits rule established criteria

and procedures for determining when an existing permit has been issued

improvidently; i.e., in violation of 30 CFR 773.15(b) and section

510(c) of the Act. This rule also included remedial measures for

improvidently issued permits.

The Applicant/Violator System procedures rule published on October

28, 1994 (59 FR 54306) modified several provisions of the ownership and

control, permit information, and improvidently issued permits rules. In

addition, the remining rule published on November 27, 1995 (60 FR

58480) added paragraph (b)(4) to 30 CFR 773.15. None of these revisions

was at issue in the litigation discussed below.

The National Mining Association and the National Wildlife

Federation filed suit challenging the validity of the ownership and

control, permit information, and improvidently issued permits rules on

a variety of grounds. On August 31, 1995, the U.S. District Court for

the District of Columbia granted summary judgment in favor of OSM on

all claims. See National Wildlife Fed'n v. Babbitt, Civ. Nos. 88-3117,

88-3464, 88-3470 (consolidated) (Aug. 31, 1995), slip op. at 25:

National Wildlife Fed'n v. Babbitt, Civ. Nos. 89-1130, 89-1167

(consolidated) (Aug. 31, 1995), slip op. at 12: National Wildlife Fed'n

v. Babbitt, Civ. Nos. 89-1751, 89-1811 (consolidated) (Aug. 31, 1995),

slip op. at 19.

On appeal, however, in a decision that took effect April 4, 1997,

the U.S. Court of Appeals for the District of Columbia Circuit found

the ownership and control rule to be ``unlawful'' because 30 CFR

773.15(b)(1) blocks

[[Page 19451]]

permit issuance for violations at operations owned or controlled by any

person who owns or controls the applicant, a provision that, according

to the court, ``conflicts with the plain meaning of section 510(c).''

National Minning Ass'n v. United States Dept. of the Interior, 105 F.3d

691, 694 (D.C. Cir. 1997) (``NMA--O&C''). The court ruled that section

510(c) is ``unmistakably clear'' in stating that a permit may not be

issued ``when `any surface coal mining operation owned or controlled by

the applicant' is currently in violation of SMCRA.'' In addition, the

court held, with little elaboration, that because the permit

information rule and the permit rescission (improvidently issued

permits) rule ``are centered on the ownership and control rule * * *,

they too must fall.'' Id. at 696.

Nothing is the court's decision eliminates the responsibility of

OSM and State regulatory authorities to implement the requirements of

sections 507(b) and 510(c) of the Act. Nor does it terminate the

Applicant/Violator System, the database that OSM and State regulatory

authorities use to track violations and violators, although it will

impact the use of that data. OSM has taken steps to modify system

reports and recommendations to reflect the court's decision. Today's

rulemaking action represents OSM's initial effort to conform its

regulations to the court's decision. OSM intends to propose further

regulatory revisions in the near future in accordance with standard

notice and comment procedures.

II. Rationale for Invoking APA Good Cause Exemptions

The court's action in striking the ownership and control, permit

information, and improvidently issued permits rules creates

considerable uncertainty with respect to permit application information

requirements and implementation of the statutory permit block sanction

in section 510(c). This sanction has proven to be one of the most

effective incentives for compliance with the requirements of the Act.

It has prevented persons who are either unable or unwilling to adhere

to the environmental protection standards of the Act from repeatedly

causing environmental problems on additional sites.

Under sections 101(f) and 503 of SMCRA, States have the primary

responsibility for regulating surface coal mining and reclamation

operations. Once a State attains primacy (an approved regulatory

program under section 503 of the Act), OSM's role is reduced to that of

assistance and oversight. At present, 24 of the 27 coal-producing

States have achieved primacy.

At least 5 State programs include provisions that automatically

repeal or require review of any State program counterpart to a Federal

rule remanded or otherwise invalidated by the courts. In addition,

another 7 States have laws or regulations that prohibit the

promulgation of regulations that are more stringent than Federal

requirements. If there are no Federal rules in place, OSM expects that

most of these States will suspend or otherwise remove the corresponding

State provisions. While removal of a State program rule, either

automatically or by legislative or administrative action, is often

rapid restoration through SMCRA's program amendment process is both

lengthy and complex, often requiring a number of years to accomplish.

Regardless of the mechanism by which the programmatic void comes into

being, the result will be an absence of information that will translate

into the issuance of permits to persons who are not entitled to receive

them under section 510(c) of the Act.

Prior to establishment of the Applicant/Violator System, OSM and

State regulatory authorities had few sources of information about

industry practices and enterprises except for disclosures in permit

applications. They also lacked a regulatory structure or centralized

data processing system to track persons or entities which owned or

controlled operations with unabated violations as they reincorporated

or renamed themselves, used a series of contract miners, or moved from

State to State. The lack of such a system is especially significant

since, as noted at 53 FR 38886 (October 3, 1988), over half of all

Federal permit applicants between March 1985 and April 1986 had

unabated violations, unpaid abandoned mine land reclamation fees, or

unpaid civil penalties, although some of these outstanding obligations

were under appeal. The problem was particularly difficult to address

when an applicant for a permit in one State owned or controlled an

operation with an unabated violation in another State, since there were

few mechanisms by which States exchanged information.

The effectiveness of the section 510(c) permit block sanction

depends upon maintenance of a reliable nationwide database (currently,

the Applicant/Violator System) on permit applicants, organizational

relationships, and violations. Otherwise, violators can simply move

from State to State and company to company to evade their reclamation

obligations and other responsibilities under the Act. States are

primarily responsible for inputting data into this system. Therefore,

it is imperative that the integrity of State programs, including permit

application information requirements, be maintained. State program

provisions are relatively easy to delete, but difficult and time-

consuming to restore.

The court's decision creates a regulatory gap that would result in

substantial uncertainty and confusion regarding permit application

information requirements, use of the Applicant/Violator System, and the

identification and handling of improvidently issued permits. Such

regulatory confusion would be contrary to the public interest because

issuance of permits to persons who are not entitled to receive them

under the Act, as would likely occur in the absence of consistent

permit application content, review, and reporting requirements, would

prove injurious to the environment and public health and safety. The

schedule for issuance of the court's mandate allows insufficient time

for public notice and comment on replacement regulations before the

regulatory gap occurs. Therefore, following normal notice and comment

procedures under the Administrative Procedure Act (APA) would be

impracticable and contrary to the public interest.

To avoid creation of a regulatory gap, OSM is now promulgating

replacement regulations on an interim final basis, as authorized by the

APA at 5 U.S.C. 553(b)(3)(B). This provision of the APA provides a

``good cause'' exemption that allows an agency to issue a rule without

prior notice or opportunity for public comment ``when the agency for

good cause finds (and incorporates the finding and a brief statement of

the reasons therefor in the rules issued) that notice and public

procedure thereon are impracticable, unnecessary, or contrary to the

public interest.'' As discussed above, promulgation of an interim final

rule without prior notice or opportunity to comment is in the public

interest because it avoids creation of a regulatory gap and the adverse

impacts associated with such a gap. The requirements and procedures in

the interim final rules have gained widespread acceptance among State

regulatory authorities. Furthermore, most provisions of the rules being

promulgated today are substantively identical to those previously

promulgated in accordance with the standard notice and comment

procedures of the APA. The only substantive changes are those that

address the specific provisions that the court found to be in conflict

with, or

[[Page 19452]]

potentially in conflict with, the ``unmistakably clear'' language of

section 510(c) of SMCRA.

Using the same rationale, OSM also is availing itself of the good

cause exemption at 5 U.S.C. 553(d)(3) to the APA requirement that rules

be published at least 30 days prior to their effective date. To avoid

any regulatory gap, the effective date of the rules being published

today is April 3, 1997.

The interim final rules being published today are only interim

measures intended to ensure that implementation of the court's decision

does not result in a regulatory gap or substantial confusion in the

regulatory community or the regulated industry. OSM is committed to

exploring various methods of implementing the court's observation in

NMA-O&C that ``OSM has leeway in determining who the `applicant' is.''

Id. at 695. The agency intends to seek public comment on any resulting

proposed regulatory changes.

III. Discussion of Interim Final Rules

The rulemaking actions that OSM is taking today remedy the defects

identified by the court in NMA-O&C. They also preserve those aspects of

the previous rules to which the court expressed no specific objection.

These measures are needed to fully and properly implement the permit

block sanction of section 510(c) of SMCRA and to flesh out other

statutory provisions, such as the permit application information

requirements of paragraphs (b)(4) and (b)(5) of section 507 of the Act.

Nothing in the following findings or the rules to which they

pertain affects the regulatory authority's power or responsibility to

determine whether the nominal applicant is the true applicant to which

the court refers. Nor do these findings or rules affect the regulatory

authority's power to pierce the corporate veil or to withhold a permit,

which, if issued, would violate a court order.

A. Section 773.5--Definitions

On October 3, 1988 (53 FR 38868), OSM amended its regulations at 30

CFR 773.5 by adding a definition of the terms ``owned or controlled''

and ``owns or controls.'' This definition determines, in part, what

type of information a permit applicant must submit under 30 CFR 778.13

and the circumstances under which the section 510(c) permit block

sanction would apply under 30 CFR 773.15(b).

The reach of the definition depends on the context in which these

terms are used in a specific regulation. For example, as revised and

repromulgated in this rulemaking in response to the court's decision,

30 CFR 773.15(b) refers only to persons owned or controlled by the

applicant or operations that the applicant controls or has controlled.

Therefore, in this context, the definition would be used only to

determine which entities the applicant owns or controls, not which

entities own or control the applicant. As another example, 30 CFR

778.13(c), as revised and repromulgated in this rulemaking, provides

that a permit application must include identifying information about

persons who own or control the applicant. In this context, the

definition would be used to determine which individuals or entities own

or control the applicant, not which entities are owned or controlled by

the applicant. This information is needed to verify the applicant's

statement under section 507(b)(5) of the Act concerning bond

forfeitures and permit revocations for operations under common control

with the applicant. It also incorporates the ownership and control

information requirements of section 507(b)(4) of SMCRA, which, the

court noted, requires information relevant to statutory provisions

other than the section 510(c) permit block sanction, such as the

individual civil penalty sanction of section 518(f) of the Act. This

information would not, however, be used for purposes of blocking permit

issuance under 30 CFR 773.15(b) in a manner inconsistent with the

court's decision.

Hence, the definition itself presents no conflict with the court's

interpretation of section 510(c) of the Act in NMA--O&C, and OSM is

repromulgating the definition without substantive change as part of the

rulemaking action being published today. The rationale for the text of

the definition is set forth in detail in the preamble to the 1988

rulemaking at 53 FR 38868-80 (October 3, 1988).

B. Section 773.15(b)--Permit Block

On October 3, 1988, OSM revised 30 CFR 773.15(b) to expand the

scope of the compliance review of permit applications and to expressly

require the withholding of a permit when persons who own or control the

applicant own or control operations with unabated violations. In NMA--

O&C, the court held that this sanction applies only to violations

incurred by the applicant or entities owned or controlled by the

applicant, although the court left some room for the regulatory

authority to determine the true applicant. Id. at 695. Therefore, the

interim final rule being promulgated today does not include the

language in the version of 30 CFR 773.15(b)(1) and (b)(3) promulgated

in 1988 that applied the permit block sanction to violations incurred

by persons who own or control the applicant.

Since there is nothing in the remainder of the 1988 changes to 30

CFR 773.15(b) (or the subsequent revisions in 1994 and 1995) that

presents a conflict with the court's interpretation of section 510(c)

of the Act in NMA--O&C, OSM is repromulgating the remainder of this

paragraph without substantive change as part of the interim final rule

being published today. The rationale for the other 1988, 1994, and 1995

changes, which include criteria for conditional issuance of a permit,

provisions concerning the presumption that a notice of violation is in

the process of abatement, and a special exception for remaining

operations, is set forth in detail in the preambles to the 1988

rulemaking at 53 FR 38880-89 (October 3, 1988), the 1994 rulemaking at

59 FR 4322-24 (October 28, 1994), and the 1995 rulemaking at 60 FR

58482-86 (November 27, 1995).

C. Section 773.15(e)--Final Compliance Review

On March 2, 1989 (54 FR 8982), OSM adopted 30 CFR 773.15(e), which

required that before issuing a permit, the regulatory authority

reconsider its initial compliance review in light of any new

information submitted pursuant to 30 CFR 778.13(i) and 778.14(d). In

NMA--O&C, the court was silent on this aspect of the permit information

rule. Since its contents do not present a conflict with the court's

findings concerning the scope of the section 510(c) permit block, OSM

is repromulgating it in substantively identical form as part of this

interim final rule. In keeping with the changes to 30 CFR 778.13, the

new rule replaces the reference to 30 CFR 778.13(i) with a reference to

its new designation, 30 CFR 778.13(k).

D. Section 773.17(i)--Permit Condition

On March 2, 1989 (54 FR 8982), OSM adopted 30 CFR 773.17(i), which

required that each permit include a condition obligating the permittee

to update the information required by 30 CFR 778.13(c), which pertains

to the identity and organizational position and relationship of persons

who own or control the applicant, whenever the permittee receives a

cessation order. The preamble to the 1989 rulemaking at 54 FR 8982-83

explains that the purpose of this condition was to reveal the identity

of persons who own or control the permittee, and then use the

[[Page 19453]]

information collected to block issuance of permits to these persons

pursuant to 30 CFR 773.15(b). However, in NMA--O&C, the court held that

section 510(c) of the Act does not allow the blocking of permit

issuance on the basis of violations incurred by persons who own or

control the applicant. Therefore, the information can no longer be used

for its original purpose. However, as noted at 54 FR 8986 (March 2,

1989) in the preamble to a related provision in 30 CFR 843.11(g), the

information collected through this condition has other uses, such as

the identification of persons against whom individual civil penalties

may be assessed under 30 CFR Part 846 and section 518(f) of the Act.

Therefore, OSM is repromulgating this permit condition in substantively

identical form as part of the interim final rule being promulgated

today, although its designation is now paragraph (h), which was

previously reserved, instead of paragraph (i).

E. Section 773.20 and 773.21--Improvidently Issued Permits

On April 28, 1989 (54 FR 18438), OSM promulgated 30 CFR 773.20 and

773.21 to establish procedures and criteria for (1) determining when a

permit had been improvidently issued, and (2) applying appropriate

remedial measures. In NMA--O&C, the court struck down these rules based

on a finding that they ``are centered on the ownership and control

rule,'' which the court found to exceed the mandate of SMCRA. Id. at

696. In support of its decision, the court pointed to the reference to

ownership or control links in 30 CFR 773.20(b)(1)(iii).

Accordingly, the interim final rule being published today replaces

the term ``ownership or control link'' (and related language concerning

ownership and control links and responsibility for violations,

penalties, or fees) in 30 CFR 773.20(b)(1)(iii), 773.20(b)(2)(ii), and

773.21(a)(4) with more specific language that applies the provisions of

these rules only to situations in which the permittee or any person

owned or controlled by the permittee is responsible for the violation,

penalty, or fee.

OSM also is revising 30 CFR 773.20(b)(1)(ii)(B), 773.20(c)(1) (i)

and (ii), and 30 CFR 773.21(a) (2) and (3) to either eliminate the

phrase ``the permittee or other person responsible'' or replace it with

language that clarifies that the rule applies only to violations,

penalties, and fees for which the permittee or persons owned or

controlled by the permittee are responsible. OSM is making these

changes to ensure that 30 CFR 773.20 and 773.21 are applied in a manner

consistent with the revisions to 30 CFR 773.15(b) and the court's

decision on the scope of section 510(c) of the Act.

Since there is nothing in the remainder of the 1989 version of 30

CFR 773.20 and 773.21 (or the subsequent revisions in 1994) that

presents a conflict with the court's interpretation of section 510(c)

of the Act in NMA--O&C, OSM is repromulgating the remainder of these

sections without substantive change as part of the interim final rule

being published today. The rationale for these procedural requirements

and criteria for improvidently issued permit is set forth in detail in

the preambles to the 1989 rulemaking at 54 FR 18439-62 (April 28, 1989)

and the 1994 rulemaking at 59 FR 54325-29 (October 28, 1994). However,

in view of the court decision and the changes in wording of these rules

and 30 CFR 773.15(b), the discussions of ownership or control links in

the preambles to previous versions of these rules no longer apply in

full, especially Part II of the violations review criteria set forth in

the April 28, 1989 preamble at 54 FR 18440-41. Similarly, the

explanation of the meaning of ``other person responsible'' at 54 FR

18447 under the heading ``Inconsistent Terminology'' and at 54 FR 18455

under the heading ``Ownership and Control Relationships Covered'' is no

longer fully applicable, especially since the revised versions of the

rules no longer include this term.

F. Section 778.10--Information Collection

In NMA--O&C at 696, the court struck down the permit information

rule, of which this section was a part. Since the contents of this

section do not present a conflict with the court's holding on the scope

of the section 510(c) permit block sanction, OSM is repromulgating it

in revised form as part of the interim final rule being published

today. The revisions reflect current Departmental guidance concerning

format and content.

G. Section 778.13--Organizational and Ownership Information

Requirements for Permit Applications

On March 2, 1989 (54 FR 8982), OSM promulgated revised permit

application information requirements at 30 CFR 778.13 to conform these

requirements to the definition of `` `owned or controlled or' `owns or

controls' '' at 30 CFR 773.5. In NMA--O&C, the court struck down the

revised rules based on a finding that they ``are centered on the

ownership and control rule,'' which the court found to exceed the

mandate of SMCRA. Id. at 696. In support of its decision, the court

pointed to 30 CFR 778.13(d), which requires information pertaining to

any surface coal mining operation owned or controlled by either the

applicant or by any person who owns or controls the applicant under the

definition of owned or controlled and owns or controls in 30 CFR 773.5.

Accordingly, the interim final rule being published today modifies

the language of former 30 CFR 778.13(d) [now 30 CFR 778.13(f)] to

restrict its scope to operations owned or controlled by the applicant.

OSM also is:

Recodifying former 30 CFR 778.13(c)(4) as paragraph (d)

and revising it to apply only to the applicant and each partner or

principal shareholder of the applicant in accordance with the language

of section 507(b)(4) of the Act;

Recodifying former 30 CFR 778.13(c)(5) as paragraph (e)

and revising it to apply only to the applicant in accordance with the

language of section 507(b)(3) of the Act; and

Redesignating former 30 CFR 778.13 (d) through (j) as

paragraphs (f) through (l), respectively.

Under revised 30 CFR 778.13(c), the application must continue to

include identifying information about persons who own or control the

applicant. This information is needed to verify the applicant's

statement under section 507(b)(5) of the Act as to ``whether the

applicant, any subsidiary, affiliate, or persons controlled by or under

common control with the applicant'' has ever forfeited a mining bond or

had a mining permit suspended or revoked within the 5-year period

preceding the date of application. Revised 30 CFR 778.13(c) also is

based upon and generally analogous to the ownership and control

information requirements of section 507(b)(4) of SMCRA. The court noted

that this section of the Act requires information relevant to statutory

provisions other than the section 510(c) permit block sanction, such as

the individual civil penalty sanction of section 518(f) of the Act. The

court also observed that ``OSM or the state regulatory authority can

use the information required under section 507(b) to determine who the

real applicant is--i.e., to pierce the corporate veil in cases of

subterfuge in order to ensure that it has the true applicant before

it.'' Id. at 695. The information required under revised 30 CFR

778.13(c) will improve the ability of OSM and state regulatory

authorities to initiate these types of enforcement and compliance

measures.

Since there is nothing in the remainder of the 1989 version of 30

CFR

[[Page 19454]]

778.13 that presents a conflict with the court's interpretation of

section 510(c) of the Act in NMA--O&C, OSM is repromulgating the

remainder of this section without substantive change (apart from

redesignation of paragraphs) as part of the interim final rule being

published today. The rationale for these permit application information

requirements is set forth in the preamble to the 1989 rulemaking at 54

FR 8983-90 (March 2, 1989).

H. Section 778.14--Compliance Information Requirements for Permit

Applications

On March 2, 1989 (54 FR 8982), OSM promulgated revised permit

application information requirements at 30 CFR 778.14. Among other

things, these regulations required information about unabated

violations and other compliance data concerning persons who own or

control the applicant. In NMA--O&C, the court struck down the revised

rules based on a finding that they ``are centered on the ownership and

control rule,'' which the court found to exceed the mandate of SMCRA by

applying the permit block sanction of section 510(c) of the Act to

violations incurred by persons who own or control the applicant. Id. at

696.

Accordingly, the interim final rule being published today modifies

the language of former 30 CFR 778.14(c) to restrict its scope to the

applicant and operations owned or controlled by the applicant. Since

there is nothing in the remainder of the 1989 version of 30 CFR 778.14

(or the subsequent 1994 revisions to that section) that presents a

conflict with the court's interpretation of section 510(c) of the Act

in NMA--O&C, OSM is repromulgating the remainder of this section

without substantive change as part of the interim final rule being

published today. The rationale for these permit application information

requirements is set forth in the preambles to the 1989 rulemaking at 54

FR 8985-90 (March 2, 1989) and the 1994 rulemaking at 59 FR 54347-49

(October 28, 1994).

I. Section 843.11(g)--Notification Following Issuance of Cessation

Order

On March 2, 1989 (54 FR 8982), OSM amended its regulations by

adding 30 CFR 843.11(g), which provides that, within 60 days of

issuance of a cessation order in situations in which OSM is the

regulatory authority, OSM must notify all owners and controllers

identified under 30 CFR 778.13(c) that a cessation order has been

issued and that they have been identified as owners or controllers of

the violator. As explained in the preamble at 54 FR 8986, one of the

purposes of this requirement is to provide notification to individual

owners and controllers of a nature sufficient to establish a basis for

the assessment of an individual civil penalty under section 518(f) of

the Act and 30 CFR part 846 or its State program equivalent.

Since this purpose and the language of the regulation itself do not

present a conflict with the court's interpretation of section 510(c) of

the Act in NMA--O&C, OSM is repromulgating 30 CFR 843.11(g) in

substantively identical form as part of the interim final rule being

published today. Unlike the previous rule, the new rule does not

contain a reference to 30 CFR 778.13(d). While the latter rule is being

repromulgated in revised form as 30 CFR 778.13(f) as part of this

rulemaking, the revised version no longer includes information

requirements pertinent to owners or controllers of the applicant.

Therefore, it is no longer relevant to the requirements of 30 CFR

843.11(g). OSM also is replacing the reference to 30 CFR 773.17(i) with

a reference to 30 CFR 773.17(h) to reflect the new designation of the

paragraph in question.

J. Section 843.21--Federal Procedures for Improvidently Issued State

Permits

On April 28, 1989 (54 FR 18438), OSM amended its regulations by

adding 30 CFR 843.21 to provide a mechanism for Federal enforcement in

those situations where the regulatory authority has failed to take

appropriate actions under 30 CFR 773.20 with respect to an

improvidently issued permit. In NMA--O&C, the court struck down this

rule and related regulations based on a finding that they ``are

centered on the ownership and control rule,'' which the court found to

exceed the mandate of SMCRA. Id. at 696. In support of its decision,

the court pointed to the reference to ownership or control links in 30

CFR 773.20(b)(1)(iii).

Accordingly, the interim final rule being published today replaces

the term ``ownership or control link'' (and related language concerning

ownership and control links and responsibility for violations,

penalties, or fees) in 30 CFR 843.21(d) and (e)(2)(iii) with more

specific language that applies the provisions of these rules only to

situations in which the permittee or any person owned or controlled by

the permittee is responsible for the violation, penalty, or fee.

OSM also is revising 30 CFR 843.21(e)(2) (i) and (ii) to either

eliminate the phrase ``the permittee or other person responsible'' or

replace it with language that clarifies that the rule applies only to

violations, penalties, and fees for which the permittee or persons

owned or controlled by the permittee are responsible. OSM is making

these changes to ensure that 30 CFR 843.21 is applied in a manner

consistent with the revisions to 30 CFR 773.15(b) and the court's

decision on the scope of section 510(c) of the Act.

Since there is nothing in the remainder of the 1989 version of 30

FR 843.21 that presents a conflict with the court's interpretation of

section 510(c) of the Act in NMA--O&C, OSM is repromulgating the

remainder of this section without substantive change as part of the

interim final rule being published today. The rationale for the

procedural requirements and enforcement provisions of 30 CFR 843.21 is

set forth in detail in the preamble to the 1989 version of this rule at

54 FR 18454-62 (April 28, 1989). However, the discussions of ownership

or control links in that preamble no longer apply in full in view of

the court decision and the wording changes in 30 CFR 843.21 (d) and

(e). Similarly, the explanation of the meaning of ``other person

responsible'' at 54 FR 18447 under the heading ``Inconsistent

Terminology'' and at 54 FR 18455 under the heading ``Ownership and

Control Relationships Covered'' is no longer fully applicable,

especially since the revised version of 30 CFR 843.21 no longer

includes this term.

K. Effect in Federal Program States and on Indian Lands

Through cross-referencing in the respective regulatory programs,

this rule will apply in the following Federal program States: Arizona,

California, Georgia, Idaho, Massachusetts, Michigan, North Carolina,

Oregon, Rhode island, South Dakota, Tennessee, and Washington. The

Federal Programs for these States are codified at 30 CFR parts 903,

905, 910, 912, 921, 922, 933, 937, 939, 941, 942 and 947, respectively.

The rule also applies to Indian lands through cross-referencing in 30

CFR part 750.

L. Effect on State Programs

None of the rules being promulgated today will require changes in

State regulatory programs under the standards set forth in section 503

of SMCRA and 30 CFR part 732, provided States have fully amended their

programs to be consistent with the previous versions of these Federal

rules. If the Director determines that there are special circumstances

in a particular State that result in a need for a State program

amendment as a result of this rulemaking, she or he will notify the

State in accordance with 30 CFR 732.17.

[[Page 19455]]

M. Comparison of Interim Final Rule Language with Prior Rule Language

Set forth below is the text of the interim final rule showing all

changes in paragraph designation and substantive changes in language

from the version of the rules that currently appears in the Code of

Federal Regulations. Deleted text is enclosed in brackets ([ ]). Added

text appears in italics. Asterisks indicate no change in the existing

text.

This comparison is provided solely as a user aid in locating

significant changes. It does not identify every minor editorial

revision, and it does not include 30 CFR 778.10, the information

collection section. It is not a substitute for the actual rule text

that follows the preamble.

Sec. 773.5 Definitions.

No substantive change.

Sec. 773.15 Review of permit applications.

(a) * * *

(b) Review of violations. (1) Based on a review of all

reasonably available information concerning violation notices [and

ownership or control links] involving either the applicant or any

person owned or controlled by the applicant, including information

obtained pursuant to Secs. 773.22, 773.23, 778.13, and 778.14 of

this chapter, the regulatory authority may not issue the permit if

any surface coal mining and reclamation operation owned or

controlled by [either] the applicant [or by any person who owns or

controls the applicant] is currently in violation of the Act, any

Federal rule or regulation promulgated pursuant thereto, a State

program, or any Federal or State law, rule, or regulation pertaining

to air or water environmental protection. In the absence of a

failure-to-abate cessation order, the regulatory authority may

presume that a notice of violation issued pursuant to Sec. 843.12 of

this chapter or under a Federal or State program is being corrected

to the satisfaction of the agency with jurisdiction over the

violation where the abatement period for the [such] notice of

violation has not yet expired and where, as part of the violation

information provided pursuant to Sec. 778.14 of this chapter, the

applicant has provided certification that the [such] violation is in

the process of being so corrected. This [such] presumption does not

apply where evidence to the contrary is set forth in the permit

application, or where the notice of violation is issued for

nonpayment of abandoned mine land reclamation fees or civil

penalties. If a current violation exists, the regulatory authority

must require the applicant or any person [who owns or controls]

owned or controlled by the applicant, before the issuance of the

permit, to either:

(i) Submit to the regulatory authority proof that the current

violation has been or is in the process of being corrected to the

satisfaction of the agency that has jurisdiction over the violation;

or

(ii) Establish for the regulatory authority that the applicant,

or any person owned or controlled by [either] the applicant [or any

person who owns or controls the applicant], has filed and is

presently pursuing, in good faith, a direct administrative or

judicial appeal to contest the validity of the current violation. If

the initial judicial review authority under Sec. 775.13 of this

chapter affirms the violation, then the applicant must, within 30

days of the judicial action, submit the proof required under

paragraph (b)(1)(i) of this section.

(2) Any permit that is issued on the basis of a presumption

supported by certification under Sec. 778.14 of this chapter that a

violation is in the process of being corrected, on the basis of

proof submitted under paragraph (b)(1)(i) of this section that a

violation is in the process of being corrected, or pending the

outcome of an appeal described in paragraph (b)(1)(ii) of this

section, must be issued conditionally.

(3) If the regulatory authority makes a finding that the

applicant, [anyone who owns or controls the applicant,] or the

operator specified in the application, controls or has controlled

surface coal mining and reclamation operations with a demonstrated

pattern of willful violations of the Act of such nature and

duration, and with resulting irreparable damage to the environment

as to indicate an intent not to comply with the Act, no permit may

be issued. Before such a finding becomes final, the applicant or

operator must be afforded an opportunity for an adjudicatory hearing

on the determination as provided for in Sec. 775.11 of this chapter.

(4) No substantive change.

(c) * * *

(d) * * *

(e) Final compliance review. After an application is approved,

but before the permit is issued, the regulatory authority must

reconsider its decision to approve the application, based on the

compliance review required by paragraph (b)(1) of this section in

light of any new information submitted under sections [778.13(i)]

778.13(k) and 778.14(d) of this chapter.

Sec. 773.17 Permit conditions.

* * * * *

(h)[(i)] Within 30 days after a cessation order is issued under

Sec. 843.11 of this chapter, or the State program equivalent, for

operations conducted under the permit, except where a stay of the

cessation order is granted and remains in effect, the permittee must

either submit to the regulatory the following information, current

to the date the cessation order was issued, or notify the regulatory

authority in writing that there has been no charge since the

immediately preceding submittal of such information:

(1) Any new information needed to correct or update the

information previously submitted to the regulatory authority by the

permittee under Sec. 778.13(c) of this chapter; or

(2) If not previously submitted, the information required from a

permit applicant by Sec. 778.13(c) of this chapter.

Sec. 773.20 Improvidently issued permits: General procedures.

(a) Permit review. A regulatory authority which has reason to

believe that it improvidently issued a surface coal mining and

reclamation permit must review the circumstances under which the

permit was issued, using the criteria in paragraph (b) of this

section. When the regulatory authority finds that the permit was

improvidently issued, it must comply with paragraph (c) of this

section.

(b) Review criteria. (1) A regulatory authority must find that a

surface coal mining and reclamation permit was improvidently issued

if:

(i) Under the violations review criteria of the regulatory

program at the time the permit was issued:

(A) The regulatory authority should not have issued the permit

because of an unabated violation or a delinquent penalty or fee; or

(B) The permit was issued on the presumption that a notice of

violation was in the process of being corrected to the satisfaction

of the agency with jurisdiction over the violation, but a cessation

order subsequently was issued; and

(ii) The violation, penalty, or fee:

(A) Remains unabated or delinquent; and

(B) Is not the subject of a good faith appeal, or of an

abatement plan or payment schedule that is being met [with which the

permittee or other person responsible is complying] to the

satisfaction of the responsible agency; and

(iii) [Where the] The permittee or any person owned or

controlled by the permittee [was linked to the violation, penalty,

or fee through ownership or control under the violations review

criteria of the regulatory program at the time the permit was

issued, an ownership or control link between the permittee and the

person responsible for the violation, penalty, or fee still exists,

or where the link has been severed, the permittee] continues to be

responsible for the violation, penalty, or fee.

(2) The provisions of Sec. 773.25 of this part apply whenever

[shall be applicable when] a regulatory authority [determines] makes

one of the following determinations:

(i) Whether a violation, penalty, or fee existed at the time

that it was cited, remains unabated or delinquent, has been

corrected, is in the process of being corrected, or is the subject

of a good faith appeal, and

(iii) Whether [any ownership or control link between] the

permittee or any person owned or controlled by the permittee

continues to be [and the person] responsible for the violation,

penalty, or fee [existed, still exists, or has been severed].

(c) Remedial measures. (1) A regulatory authority which, under

paragraph (b) of this section, finds that, because of an unabated

violation or a delinquent penalty or fee, a permit was improvidently

issued must use one or more of the following remedial measures:

(i) Implement, with the cooperation of the responsible agency,

the permittee, and persons owned or controlled by the permittee [or

other person responsible, and of the responsible agency], a plan for

abatement of the violation or a schedule for payment of the penalty

or fee;

(ii) Impose on the permit a condition requiring abatement of the

violation or payment of the penalty or fee within [that in] a

reasonable time [the permittee or other

[[Page 19456]]

person responsible abate the violation or pay the penalty or fee];

(iii) Suspend the permit until the violation is abated or the

penalty or fee is paid; or

(iv) Rescind the permit.

(2) If the regulatory authority decides to suspend the permit,

it must afford at least 30 days written notice to the permittee. If

the regulatory authority decides to rescind the permit, it must

issue a notice in accordance with Sec. 773.21 of this part. In

either case, the permittee must be given the opportunity to request

administrative review of the notice under 43 CFR 4.1370 through

4.1377, where OSM is the regulatory authority, or under the State

program equivalent, where a State is the regulatory authority. The

regulatory authority's decision will remain in effect during the

pendency of the appeal, unless temporary relief is granted in

accordance with 43 CFR 4.1376 or the State program equivalent.

Sec. 773.21 Improvidently issued permits: Rescission procedures.

A regulatory authority which, under Sec. 773.20(c)(1)(iv) of

this part, elects to rescind an improvidently issued permit must

serve on the permittee a notice of proposed suspension and

rescission which includes the reasons for the finding of the

regulatory authority under Sec. 773.20(b) of this part and states

that:

(a) Automatic suspension and rescission. After a specified

period of time not to exceed 90 days, the permit automatically will

become suspended, and not to exceed 90 days thereafter rescinded,

unless within those periods the permittee submits proof, and the

regulatory authority finds, consistent with the provisions of

Sec. 773.25 of this part, that:

(1) The finding of the regulatory authority under Sec. 773.20(b)

of this part was erroneous;

(2) The [permittee or other person responsible has abated the]

violation has been abated, [on which the finding was based,] or

[paid] the penalty or fee paid, to the satisfaction of the

responsible agency;

(3) The violation, penalty, or fee is the subject of a good

faith appeal, or of an abatement plan or payment schedule that is

being met [with which the permittee or other person responsible is

complying] to the satisfaction of the responsible agency; or

(4) [Since the finding was made, the] The permittee and all

persons owned or controlled by the permittee [has severed any

ownership or control link with the person responsible for, and does

not continue to be] are no longer responsible for the violation,

penalty, or fee.

(b) Cessation of operations. After permit suspension or

rescission, the permittee must cease all surface coal mining and

reclamation operations under the permit, except for violation

abatement and for reclamation and other environmental protection

measures as required by the regulatory authority.

Sec. 778.13 Identification of interests.

An application must contain the following information, except

that the submission of a social security number is voluntary;

(a) A statement as to whether the applicant is a corporation,

partnership, single proprietorship, association, or other business

entity.

(b) The name, address, telephone number, and, as applicable,

social security number and employer identification number of the:

(1) Applicant;

(2) Applicant's resident agent; and

(3) Person who will pay the abandoned mine land reclamation fee.

(c) For each person who owns or controls the applicant under the

definition of `` `owned or controlled' and `owns or controls' '' in

Sec. 773.5 of this chapter, as applicable:

(1) The person's name, address, social security number, and

employer identification number;

(2) The person's ownership or control relationship to the

applicant, including percentage of ownership and location in the

organizational structure; and

(3) The title of the person's position, [and] the date that the

person assumed the position, [was assumed,] and, when submitted

under section [773.17(i)] 773.17(h) of this chapter, the date of

departure from the position.

[(4)] (d) For the applicant and each partner or principal

shareholder of the applicant, each [additional] name and identifying

number, including employer identification number, Federal or State

permit number, and MSHA number with date of issuance, under which

the person owns or controls, or previously owned or controlled, a

surface coal mining and reclamation operation in the United States

within the 5 years preceding the date of the application.[; and]

[(5)] (e) The application number or other identifier of, and the

regulatory authority for, any other pending surface coal mining

operation permit application filed by the [person] applicant in any

State in the United States.

[(d)](f) For any surface coal mining operation owned or

controlled by [either] the applicant [or by any person who owns or

controls the applicant] under the definition of ``owned or

controlled'' and ``owns or controls'' in Sec. 773.5 of this chapter,

the operation's:

(1) Name, address, identifying numbers, including employer

identification number, Federal or State permit number and MSHA

number, the date of issuance of the MSHA number, and the regulatory

authority; and

(2) Ownership or control relationship to the applicant,

including percentage of ownership and location in organizational

structure.

[(e)](g) The name and address of each legal or equitable owner

of record of the surface and mineral property to be mined, each

holder of record of any leasehold interest in the property to be

mined, and any purchaser of record under a real estate contract for

the property to be mined.

[(f)](h) The name and address of each owner of record of all

property (surface and subsurface) contiguous to any part of the

proposed permit area.

[(g)](i) The Mine Safety and Health Administration (MSHA)

numbers for all mine-associated structures that require MSHA

approval.

[(h)](j) A statement of all lands, interest in lands, options,

or pending bids on interests held or made by the applicant for lands

contiguous to the area described in the permit application. If

requested by the applicant, any information required by this

paragraph which is not on public file pursuant to State law must be

held in confidence by the regulatory authority, as provided under

Sec. 773.13(d)(3)(ii) of this chapter.

[(i)](k) After an applicant is notified that his or her

application is approved, but before the permit is issued, the

applicant must, as applicable, update, correct or indicate that no

change has occurred in the information previously submitted under

paragraphs (a) through [(d)](f) of this section.

[(j)](l) The applicant must submit the information required by

this section and by Sec. 778.14 of this part in any format that OSM

prescribes.

Sec. 778.14 Violation information.

Each application must contain the following information:

(a) A statement of whether the applicant or any subsidiary,

affiliate, or persons controlled by or under common control with the

applicant has:

(1) Had a Federal or State coal mining permit suspended or

revoked in the 5 years preceding the date of submission of the

application; or

(2) Forfeited a performance bond or similar security deposited

in lieu of bond.

(b) A brief explanation of the facts involved if any such

suspension, revocation, or forfeiture referred to in paragraphs

(a)(1) and (a)(2) of this section has occurred, including:

(1) Identification number and date of issuance of the permit,

and the date and amount of bond or similar security;

(2) Identification of the authority that suspended or revoked

the permit or forfeited the bond and the stated reasons for the

action;

(3) The current status of the permit, bond, or similar security

involved;

(4) The date, location, and type of any administrative or

judicial proceedings initiated concerning the suspension,

revocation, or forfeiture; and

(5) The current status of the proceedings.

(c) A list of all violation notices received by the applicant

during the three-year period preceding the application date, and a

list of all outstanding violation notices received prior to the date

of the application by any surface coal mining operation that is

deemed or presumed to be owned or controlled by [either] the

applicant [or any person who is deemed or presumed to own or control

the applicant] under the definition of ``owned or controlled'' and

``owns or controls'' in Sec. 773.5 of this chapter. For each notice

of violation issued pursuant to Sec. 843.12 of this chapter or under

a Federal or State program for which the abatement period has not

expired, the applicant must certify that such notice of violation is

in the process of being corrected to the satisfaction of the agency

with jurisdiction over the violation. For each violation notice

reported, the list must include the following information, as

applicable:

(1) Any identifying numbers for the operation, including the

Federal or State permit number and MSHA number, the dates of

issuance of the violation notice and MSHA

[[Page 19457]]

number, the name of the person to whom the violation notice was

issued, and the name of the issuing regulatory authority, department

or agency;

(2) A brief description of the violation alleged in the notice;

(3) The date, location, and type of any administrative or

judicial proceedings initiated concerning the violation, including,

but not limited to, proceedings initiated by any person identified

in paragraph (c) of this section to obtain administrative or

judicial review of the violation;

(4) The current status of the proceedings and of the violation

notice; and

(5) The actions, if any, taken by any person identified in

paragraph (c) of this section to abate the violation.

(d) After an applicant is notified that his or her application

is approved, but before the permit is issued, the applicant must, as

applicable, update, correct or indicate that no change has occurred

in the information previously submitted under this section.

Sec. 843.11 Cessation orders.

* * * * *

(g) Where OSM is the regulatory authority, within 60 days after

issuing a cessation order, OSM will notify in writing any person who

has been identified under sections [773.17(i)] 773.17(h) and

778.13(c) (d)] of this chapter as owning or controlling the

permittee, that the cessation order was issued and that the person

has been identified as an owner or controller.

Sec. 843.21 Procedures for improvidently issued State permits.

(a) Initial notice. If OSM has reason to believe that a State

surface coal mining and reclamation permit meets the criteria for an

improvidently issued permit in Sec. 773.20(b) of this chapter, or

the State program equivalent, and the State has failed to take

appropriate action on the permit under State program equivalents of

Secs. 773.20 and 773.21 of this chapter, OSM will issue to the

State, and should provide to the permittee, an initial notice

stating in writing the reasons for that belief.

(b) State response. Within 30 days of the date on which an

initial notice is issued under paragraph (a) of this section, the

State must demonstrate to OSM in writing either that:

(1) The permit does not meet the criteria of Sec. 773.20(b) of

this chapter, or the State program equivalent; or

(2) The State is in compliance with the State program

equivalents of Secs. 773.20 and 773.21 of this chapter.

(c) Ten-day notice. If OSM finds that the State has failed to

make the demonstration required by paragraph (b) of this section,

OSM will issue to the State a ten-day notice stating in writing the

reasons for that finding and requesting that within 10 days the

State take appropriate action under the State program equivalents of

Secs. 773.20 and 773.21 of this chapter;

(d) Federal enforcement. After 10 days from the date on which a

ten-day notice is issued under paragraph (c) of this section, if OSM

finds that the State has failed to take appropriate action under the

State program equivalents of Secs. 773.20 and 773.21 of this

chapter, or to show good cause for such failure, OSM will take

appropriate remedial action. Such remedial action may include the

issuance to the permittee of a notice of violation requiring that by

a specified date all mining operations must cease and reclamation of

all areas for which a reclamation obligation exists must commence or

continue unless, to the satisfaction of the responsible agency, any

violation, penalty, or fee on which the notice of violation was

based is abated or paid, an abatement plan or payment schedule is

entered into, or [any ownership or control link with the person

responsible for the violation, penalty or fee is severed and] the

permittee and all persons owned or controlled by the permittee are

no longer [does not continue to be] responsible for the violation,

penalty, or fee. Under this paragraph, good cause does not include

the lack of State program equivalents of Secs. 773.20 and 773.21 of

this chapter.

(e) Remedies to notice of violation. Upon receipt from any

person of information concerning the issuance of a notice of

violation under paragraph (d) of this section, OSM will review the

information and:

(1) Vacate the notice of violation if it resulted from an

erroneous conclusion under this section; or

(2) Terminate the notice of violation if:

(i) [The permittee or other person responsible has, to the

satisfaction of the responsible agency, abated any violation or paid

any penalty or fee on which the notice of violation was based] All

violations have been abated and all penalties or fees have been

paid;

(ii) The permittee or any [other] person [responsible] owned or

controlled by the permittee has filed and is pursuing a good faith

appeal of the violation, penalty, or fee, or has entered into and is

complying with an abatement plan or payment schedule to the

satisfaction of the responsible agency; or

(iii) [Since the notice of violation was issued, the] The

permittee [has severed any ownership or control link with the person

responsible for, and does not continue to be] and all persons owned

or controlled by the permittee are no longer responsible for the

violation, penalty, or fee.

(f) No civil penalty. OSM will not assess a civil penalty for a

notice of violation issued under this section.

IV. Procedural Matters

A. Executive Order 12866

This rule has been reviewed under the criteria of Executive Order

12866.

B. Regulatory Flexibility Act

The Department of the Interior certifies that this rule will not

have a significant economic impact on a substantial number of small

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

The rule will not add to the cost of operating a mine under an approved

regulatory program. Its provisions apply mainly to operators who

previously operated mines in violation of the provisions of SMCRA and

then failed to abate the violation or pay monetary civil penalties that

were assessed. Further, most coal mining operations subject to these

regulations do not engage in prohibited activities and practices, and,

as a result, the aggregate economic impact of these revised regulations

will be minimal, affecting only those who engage in prohibited behavior

in violation of SMCRA.

C. Executive Order 12988 on Civil Justice Reform

The Department of the Interior has determined that this rule meets

the requirements of sections 3(a) and 3(b)(2) of Executive Order 12988,

``Civil Justice Reform'' (56 FR 55195).

D. Unfunded Mandates Reform Act

This rule will not impose a cost of $100 million or more in any

given year on any governmental entity or the private sector.

E. Federal Paperwork Reduction Act

The Department of the Interior has determined that this rule does

not contain collections of information which require approval by the

Office of Management and Budget under 44 U.S.C. 3501 et seq. OMB has

previously approved the collection activities and assigned clearance

numbers 1029-0034- 1029-0041 to 30 CFR parts 778 and 773, respectively.

F. National Environmental Policy Act

OSM has determined that this rulemaking action is categorically

excluded from the requirement to prepare an environmental document

under the National Environmental Policy Act of 1969, as amended, 42

U.S.C. 4332 et seq. This determination was made in accordance with the

Departmental Manual (516 DM 2, Appendix 1.10).

Authors: The principal authors of this rule are Nancy Broderick and

Dennis Rice, Office of Surface Mining Reclamation and Enforcement, U.S.

Department of the Interior, 1951 Constitution Ave., NW., Washington, DC

20240. Telephone: (202) 2028-2700 and 2829. E-mail address:

[email protected] and [email protected].

List of Subjects

30 CFR Part 773

Administrative practice and procedure, Reporting and recordkeeping

requirements, Surface mining, Underground mining.

[[Page 19458]]

30 CFR Part 778

Reporting and recordkeeping requirements, Surface mining,

Underground mining.

30 CFR Part 843

Federal enforcement.

Dated: April 11, 1997.

Bob Armstrong,

Assistant Secretary, Land and Minerals Management.

For the reasons set forth in the preamble, the Department is

amending 30 CFR parts 773, 778, and 843 as set forth below:

PART 773--REQUIREMENTS FOR PERMITS AND PERMIT PROCESSING

1. The authority citation for part 773 is revised to read as

follows:

Authority: 30 U.S.C. 1201 et seq., as amended; 16 U.S.C. 1531 et

seq.; 16 U.S.C. 661 et seq.; 16 U.S.C. 703 et seq.; 16 U.S.C. 668a;

16 U.S.C. 469 et seq.; 16 U.S.C. 470aa et seq.; and Pub. L. 100-34.

2. In Sec. 773.5, the definition of `` `Owned or controlled' and

`owns or controls' '' is revised to read as follows:

Sec. 773.5 Definitions.

* * * * *

Owned or controlled and owns or controls mean any one or a

combination of the relationships specified in paragraphs (a) and (b) of

this definition:

(a)(1) Being a permittee of a surface coal mining operation;

(2) Based on instrument of ownership or voting securities, owning

of record in excess of 50 percent of an entity; or

(3) Having any other relationship which gives one person authority

directly or indirectly to determine the manner in which an applicant,

an operator, or other entity conducts surface coal mining operations.

(b) The following relationships are presumed to constitute

ownership or control unless a person can demonstrate that the person

subject to the presumption does not in fact have the authority directly

or indirectly to determine the manner in which the relevant surface

coal mining operation is conducted:

(1) Being an officer or director of an entity;

(2) Being the operator of a surface coal mining operation;

(3) Having the ability to commit the financial or real property

assets or working resources of an entity;

(4) Being a general partner in a partnership;

(5) Based on the instruments of ownership or the voting securities

of a corporate entity, owning of record 10 through 50 percent of the

entity; or

(6) Owning or controlling coal to be mined by another person under

a lease, sublease or other contract and having the right to receive

such coal after mining or having authority to determine the manner in

which that person or another person conducts a surface coal mining

operation.

* * * * *

3. In Sec. 773.15, paragraphs (b) and (e) are revised to read as

follows:

Sec. 773.15 Review of permit applications.

* * * * *

(b) Review of violations. (1) Based on a review of all reasonably

available information concerning violation notices involving either the

applicant or any person owned or controlled by the applicant, including

information obtained pursuant to Secs. 773.22, 773.23, 778.13, and

778.14 of this chapter, the regulatory authority may not issue the

permit if any surface coal mining and reclamation operation owned or

controlled by the applicant is currently in violation of the Act, any

Federal rule or regulation promulgated pursuant thereto, a State

program, or any Federal or State law, rule, or regulation pertaining to

air or water environmental protection. In the absence of a failure-to-

abate cessation order, the regulatory authority may presume that a

notice of violation issued pursuant to Sec. 843.12 of this chapter or

under a Federal or State program is being corrected to the satisfaction

of the agency with jurisdiction over the violation where the abatement

period for the notice of violation has not yet expired and where, as

part of the violation information provided pursuant to Sec. 778.14 of

this chapter, the applicant has provided certification that the

violation is in the process of being so corrected. This presumption

does not apply where evidence to the contrary is set forth in the

permit application, or where the notice of violation is issued for

nonpayment of abandoned mine land reclamation fees or civil penalties.

If a current violation exists, the regulatory authority must require

the applicant or any person owned or controlled by the applicant,

before the issuance of the permit, to either:

(i) Submit to the regulatory proof that the current violation has

been or is in the process of being corrected to the satisfaction of the

agency that has jurisdiction over the violation; or

(ii) Establish for the regulatory authority that the applicant, or

any person owned or controlled by the applicant, has filed and is

presently pursuing, in good faith, a direct administrative or judicial

appeal to contest the validity of the current violation. If the initial

judicial review authority under Sec. 775.13 of this chapter affirms the

violation, then the applicant must, within 30 days of the judicial

action, submit the proof required under paragraph (b)(1)(i) of this

section.

(2) Any permit that is issued on the basis of a presumption

supported by certification under Sec. 778.14 of this chapter that a

violation is in the process of being corrected, on the basis of proof

submitted under paragraph (b)(1)(i) of this section that a violation is

in the process of being corrected, or pending the outcome of an appeal

described in paragraph (b)(1)(ii) of this section, must be issued

conditionally.

(3) If the regulatory authority makes a finding that the applicant,

or the operator specified in the application, controls or has

controlled surface coal mining and reclamation operations with a

demonstrated pattern of willful violations of the Act of such nature

and duration, and with resulting irreparable damage to the environment

as to indicate an intent not to comply with the Act, no permit may be

issued. Before such a finding becomes final, the applicant or operator

must be afforded an opportunity for an adjudicatory hearing on the

determination as provided for in Sec. 775.11 of this chapter.

(4)(i) Subsequent to October 24, 1992, the prohibitions of

paragraph (b) of this section regarding the issuance of a new permit do

not apply to any violation that:

(A) Occurs after that date;

(B) Is unabated; and

(C) Results from an unanticipated event or condition that arises

from a surface coal mining and reclamation operation on lands that are

eligible for remining under a permit:

(1) Issued before September 30, 1994, or any renewals thereof; and

(2) Held by the person making application for the new permit.

(ii) For permits issued under Sec. 785.25 of this chapter, an event

or condition will be presumed to be unanticipated for the purposes of

this paragraph if it:

(A) Arose after permit issuance;

(B) Was related to prior mining; and

(C) Was not identified in the permit.

* * * * *

(e) Final compliance review. After an application is approved, but

before the permit is issued, the regulatory authority must reconsider

its decision to approve the application, based on the compliance review

required by paragraph (b)(1) of this section in light of any new

information submitted under Secs. 778.13(k) and 778.14(d) of this

chapter.

[[Page 19459]]

4. In Sec. 773.17, paragraph (i) is redesignated as paragraph (h),

which is revised to read as follows:

Sec. 773.17 Permit conditions.

* * * * *

(h) Within 30 days after a cessation order is issued under

Sec. 843.11 of this chapter, or the State program equivalent, for

operations conducted under the permit, except where a stay of the

cessation order is granted and remains in effect, the permittee must

either submit to the regulatory authority the following information,

current to the date the cessation order was issued, or notify the

regulatory authority in writing that there has been no change since the

immediately preceding submittal of such information:

(1) Any new information needed to correct or update the information

previously submitted to the regulatory authority by the permittee under

Sec. 778.13(c) of this chapter; or

(2) If not previously submitted, the information required from a

permit application by Sec. 778.13(c) of this chapter.

5. Sec. 773.20 is revised to read as follows:

Sec. 773.20 Improvidently issued permits: General procedures.

(a) Permit review. A regulatory authority which has reason to

believe that it improvidently issued a surface coal mining and

reclamaiton permit must review the circumstances under which the permit

was issued, using the criteria in paragraph (b) of this section. When

the regulatory authority finds that the permit was improvidently

issued, it must comply with paragraph (c) of this section.

(b) Review criteria. (1) A regulatory authority must find that a

surface coal mining and reclamation permit was improvidently issued if:

(i) Under the violations review criteria of the regulatory program

at the time the permit was issued:

(A) The regulatory authority should not have issued the permit

because of an unabated violation or a delinquent penalty or fee; or

(B) The permit was issued on the presumption that a notice of

violation was in the process of being corrected to the satisfaction of

the agency with jurisdiction over the violation, but a cessation order

subsequently was issued; and

(ii) The violation, penalty, or fee:

(A) Remains unabated or delinquent; and

(B) Is not the subject of a good faith appeal, or of an abatement

plan or payment schedule that is being met to the satisfaction of the

responsible agency; and

(iii) The permittee or any person owned or controlled by the

permittee continues to be responsible for the violation, penalty, or

fee.

(2) The provisions Sec. 773.25 of this part apply whenever a

regulatory authority makes one of the following determinations:

(i) Whether a violation, penalty, or fee existed at the time that

it was cited, remains unabated or delinquent, has been corrected, is in

the process of being corrected, or is the subject of a good faith

appeal, and

(ii) Whether the permittee or any person owned or controlled by the

permittee continues to be responsible for the violation, penalty, or

fee.

(c) Remedial measures. (1) A regulatory authority which, under

paragraph (b) of this section, finds that, because of an unabated

violation or a delinquent penalty or fee, a permit was improvidently

issued must use one or more of the following remedial measures:

(i) Implement, with the cooperation of the responsible agency, the

permittee, and persons owned or controlled by the permittee, a plan for

abatement of the violation or a schedule for payment of the penalty or

fee;

(ii) Impose on the permit a condition requiring abatement of the

violation or payment of the penalty or fee within a reasonable time;

(iii) Suspend the permit until the violation is abated or the

penalty or fee is paid; or

(iv) Rescind the permit.

(2) If the regulatory authority decides to suspend the permit, it

must afford at least 30 days written notice to the permittee. If the

regulatory authority decides to rescind the permit, it must issued a

notice in accordance with Sec. 773.21 of this part. In either case, the

permittee must be given the opportunity to request administrative

review of the notice under 43 CFR 4.1370 through 4.1370 through 4.1377,

where OSM is the regulatory authority, or under the State program

equivalent, where a State is the regulatory authority. The regulatory

authority's decision will remain in effect during the pendency of the

appeal, unless temporary relief is granted in accordance with 43 CFR

4.1376 or the State program equivalent.

6. Sec. 773.21 is revised to read as follows:

Sec. 773.21 Improvidently issued permits: Rescission procedures.

A regulatory authority which, under Sec. 773.20(c)(1)(iv) of this

part, elects to rescind an improvidently issued permit must serve on

the permittee a notice of proposed suspension and rescission which

includes the reasons for the finding of the regulatory authority under

Sec. 773.20(b) of this part and states that:

(a) Automatic suspension and rescission. After a specified period

of time not to exceed 90 days, the permit automatically will become

suspended, and not to exceed 90 days thereafter rescinded, unless

within those periods the permittee submits proof, and the regulatory

authority finds, consistent with the provisions of Sec. 773.25 of this

part, that:

(1) The finding of the regulatory authority under Sec. 773.20(b) of

this part was erroneous;

(2) The violation has been abated, or the penalty or fee paid, to

the satisfaction of the responsible agency;

(3) The violation, penalty, or fee is the subject of a good faith

appeal, or of an abatement plan or payment schedule that is being met

to the satisfaction of the responsible agency; or

(4) The permittee and all persons owned or controlled by the

permittee are no longer responsible for the violation, penalty, or fee.

(b) Cessation of operations. After permit suspension or rescission,

the permittee must cease all surface coal mining and reclamation

operations under the permit, except for violation abatement and for

reclamation and other environmental protection measures as required by

the regulatory authority.

PART 778--PERMIT APPLICATIONS--MINIMUM REQUIREMENTS FOR LEGAL,

FINANCIAL, COMPLIANCE, AND RELATED INFORMATION

7. The authority citation for Part 778 is revised to read as

follows:

Authority: 30 U.S.C. 1201 et seq., as amended and Pub. L. 100-

34.

8. Sec. 778.10 is revised to read as follows:

Sec. 778.10 Information collection.

(a) In accordance with 44 U.S.C. 3501 et seq., the Office of

Management and Budget (OMB) has approved the information collection

requirements of this part. Section 507(b) of SMCRA provides that

persons applying for a permit to conduct surface coal mining operations

must submit to the regulatory authority certain information regarding

the applicant and affiliated entities, their compliance status and

history, property ownership and other property rights, right of entry,

liability insurance, the status of unsuitability claims, and proof of

publication of a newspaper notice. The regulatory authority uses this

information to insure that all legal,

[[Page 19460]]

financial and compliance requirements are satisfied prior to issuance

of a permit. Persons seeking to conduct surface coal mining operations

must respond to obtain a benefit. A Federal agency may not conduct or

sponsor, and a person is not required to respond to, a collection of

information unless it displays a currently valid OMB control number.

The OMB clearance number for this part is 1029-0034.

(b) OSM estimates that the public reporting and recordkeeping

burden for this part averages 48 hours per response, including time

spent reviewing instructions, searching existing data sources,

gathering and maintaining the data needed, and completing and reviewing

the collection of information. Send comments regarding this burden

estimate or any other aspect of these information collection and

recordkeeping requirements, including suggestions for reducing the

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

Information Collection Clearance Officer, 1951 Constitution Avenue,

NW., Washington, DC 20240; and the Office of Management and Budget,

Office of Information and Regulatory Affairs, Attention: Interior Desk

Officer, 725 17th Street, NW, Washington, DC 20503. Please refer to OMB

Control Number 1029-0034 in any correspondence.

9. Sec. 778.13 is revised to read as follows:

Sec. 778.13 Identification of interests.

An application must contain the following information, except that

the submission of a social security number is voluntary:

(a) A statement as to whether the applicant is a corporation,

partnership, single proprietorship, association, or other business

entity.

(b) The name, address, telephone number, and, as applicable, social

security number and employer identification number of the:

(1) Applicant;

(2) Applicant's resident agent; and

(3) Person who will pay the abandoned mine land reclamation fee.

(c) For each person who owns or controls the applicant under the

definition of ```owned or controlled' and `owns or controls''' in

Sec. 773.5 of this chapter, as applicable:

(1) The person's name, address, social security number, and

employer identification number;

(2) The person's ownership or control relationship to the

applicant, including percentage of ownership and location in the

organizational structure; and

(3) The title of the person's position, the date that the person

assumed the position, and, when submitted under Sec. 773.17(h) of this

chapter, the date of departure from the position.

(d) For the applicant and each partner or principal shareholder of

the applicant, each name and identifying number, including employer

identification number, Federal or State permit number, and MSHA number

with date of issuance, under which the person owns or controls, or

previously owned or controlled, a surface coal mining and reclamation

operation in the United States within the 5 years preceding the date of

the application.

(e) The application number or other identifier of, and the

regulatory authority for, any other pending surface coal mining

operation permit application filed by the applicant in any State in the

United States.

(f) For any surface coal mining operation owned or controlled by

the applicant under the definition of ``owned or controlled'' and

``owns or controls'' in Sec. 773.5 of this chapter, the operation's:

(1) Name, address, identifying numbers, including employer

identification number, Federal or State permit number and MSHA number,

the date of issuance of the MSHA number, and the regulatory authority;

and

(2) Ownership or control relationship to the applicant, including

percentage of ownership and location in organizational structure.

(g) The name and address of each legal or equitable owner of record

of the surface and mineral property to be mined, each holder of record

of any leasehold interest in the property to be mined, and any

purchaser of record under a real estate contract for the property to be

mined.

(h) The name and address of each owner of record of all property

(surface and subsurface) contiguous to any part of the proposed permit

area.

(i) The Mine Safety and Health Administration (MSHA) numbers for

all mine-associated structures that require MSHA approval.

(j) A statement of all lands, interest in lands, options, or

pending bids on interests held or made by the applicant for lands

contiguous to the area described in the permit application. If

requested by the applicant, any information required by this paragraph

which is not on public file pursuant to State law must be held in

confidence by the regulatory authority, as provided under

Sec. 773.13(d)(3)(ii) of this chapter.

(k) After an applicant is notified that his or her application is

approved, but before the permit is issued, the applicant must, as

applicable, update, correct or indicate that no change has occurred in

the information previously submitted under paragraphs (a) through (f)

of this section.

(l) The applicant must submit the information required by this

section and by Sec. 778.14 of this part in any format that OSM

prescribes.

10. Sec. 778.14 is revised to read as follows:

Sec. 778.14 Violation information

Each application must contain the following information:

(a) A statement of whether the applicant or any subsidiary,

affiliate, or persons controlled by or under common control with the

applicant has:

(1) Had a Federal or State coal mining permit suspended or revoked

in the 5 years preceding the date of submission of the application; or

(2) Forfeited a performance bond or similar security deposited in

lieu of bond.

(b) A brief explanation of the facts involved in any such

suspension, revocation, or forfeiture referred to in paragraphs (a)(1)

and (a)(2) of this section has occurred, including:

(1) Identification number and date of issuance of the permit, and

the date and amount of bond or similar security;

(2) Identification of the authority that suspended or revoked the

permit or forfeited the bond and the stated reasons for the action;

(3) The current status of the permit, bond, or similar security

involved;

(4) The date, location, and type of any administrative or judicial

proceedings initiated concerning the suspension, revocation, or

forfeiture; and

(5) The current status of the proceedings.

(c) A list of all violation notices received by the applicant

during the three-year period preceding the application date, and a list

of all outstanding violation notices received prior to the date of the

application by any surface coal mining operation that is deemed or

presumed to be owned or controlled by the applicant under the

definition of ``owned or controlled'' and ``owns or controls'' in

Sec. 773.5 of this chapter. For each notice of violation issued

pursuant to Sec. 843.12 of this chapter or under a Federal or State

program for which the abatement period has not expired, the applicant

must certify that such notice of violation is in the process of being

corrected to the satisfaction of the agency with jurisdiction over the

violation. For each violation notice reported, the list must include

the following information, as applicable:

(1) Any identifying numbers for the operation, including the

Federal or State

[[Page 19461]]

permit number and MSHA number, the dates of issuance of the violation

notice and MSHA number, the name of the person to whom the violation

notice was issued, and the name of the issuing regulatory authority,

department or agency;

(2) A brief description of the violation alleged in the notice;

(3) The date, location, and type of any administrative or judicial

proceedings initiated concerning the violation, including, but not

limited to, proceedings initiated by any person identified in paragraph

(c) of this section to obtain administrative or judicial review of the

violation;

(4) The current status of the proceedings and of the violation

notice; and

(5) The actions, if any, taken by any person identified in

paragraph (c) of this section to abate the violation.

(d) After an applicant is notified that his or her application is

approved, but before the permit is issued, the applicant must, as

applicable, update, correct or indicate that no change has occurred in

the information previously submitted under this section.

PART 843--FEDERAL ENFORCEMENT

11. The authority citation for part 843 is revised to read as

follows:

Authority: 30 U.S.C. 1201 et seq., as amended and Pub. L. 100-

34.

12. In Sec. 843.11, paragraph (g) is revised to read as follows:

Sec. 843.11 Cessation orders.

* * * * *

(g) Where OSM is the regulatory authority, within 60 days after

issuing a cessation order, OSM will notify in writing any person who

has been identified under Secs. 773.17(h) and 778.13(c) of this chapter

as owning or controlling the permittee that the cessation order was

issued and that the person has been identified as an owner or

controller.

13. Sec. 843.21 is revised to read as follows:

Sec. 843.21 Procedures for improvidently issued State permits.

(a) Initial notice. If OSM has reason to believe that a State

surface coal mining and reclamation permit meets the criteria for an

improvidently issued permit in Sec. 773.20(b) of this chapter, or the

State program equivalent, and the State has failed to take appropriate

action on the permit under State program equivalents of Secs. 773.20

and 773.21 of this chapter, OSM will issue to the State, and should

provide to the permittee, an initial notice stating in writing the

reasons for that belief.

(b) State response. Within 30 days of the date on which an initial

notice is issued under paragraph (a) of this section, the State must

demonstrate to OSM in writing either that:

(1) The permit does not meet the criteria of Sec. 773.20(b) of this

chapter, or the State program equivalent; or

(2) The State is in compliance with the State program equivalents

of Secs. 773.20 and 773.21 of this chapter.

(c) Ten-day notice. If OSM finds that the State has failed to make

the demonstration required by paragraph (b) of this section, OSM will

issue to the State a ten-day notice stating in writing the reasons for

that finding and requesting that within 10 days the State take

appropriate action under the State program equivalents of Secs. 773.20

and 773.21 of this chapter.

(d) Federal enforcement. After 10 days from the date on which a

ten-day notice is issued under paragraph (c) of this section, if OSM

finds that the State has failed to take appropriate action under the

State program equivalents of Secs. 773.20 and 773.21 of this chapter,

or to show good cause for such failure, OSM will take appropriate

remedial action. Such remedial action may include the issuance to the

permittee of a notice of violation requiring that by a specified date

all mining operations must cease and reclamation of all areas for which

a reclamation obligation exists must commence or continue unless, to

the satisfaction of the responsible agency, any violation, penalty, or

fee on which the notice of violation was based is abated or paid, an

abatement plan or payment schedule is entered into, or the permittee

and all persons owned or controlled by the permittee are no longer

responsible for the violation, penalty, or fee. Under this paragraph,

good cause does not include the lack of State program equivalents of

Secs. 773.20 and 773.21 of this chapter.

(e) Remedies to notice of violation. Upon receipt from any person

of information concerning the issuance of a notice of violation under

paragraph (d) of this section, OSM will review the information and:

(1) Vacate the notice of violation if it resulted from an erroneous

conclusion under this section; or

(2) Terminate the notice of violation if:

(i) All violations have been abated and all penalties or fees have

been paid;

(ii) The permittee or any person owned or controlled by the

permittee has filed and is pursuing a good faith appeal of the

violation, penalty, or fee, or has entered into and is complying with

an abatement plan or payment schedule to the satisfaction of the

responsible agency; or

(iii) The permittee and all persons owned or controlled by the

permittee are no longer responsible for the violation, penalty, or fee.

(f) No civil penalty. OSM will not assess a civil penalty for a

notice of violation issued under this section.

[FR Doc. 97-10247 Filed 4-21-97; 8:45 am]

BILLING CODE 4310-05-M