Valid Existing Rights

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

is proposing to amend its regulations to redefine the circumstances

under which a person has valid existing rights (VER) to conduct surface

coal mining operations in areas where these operations are otherwise

prohibited by section 522(e) of the Surface Mining Control and

Reclamation Act of 1977 (SMCRA or ``the Act''). OSM also is proposing

to establish requirements and procedures and define responsibilities

for the submission and processing of requests for VER determinations,

modify and clarify the applicability of the existing operation

exemption, remove the requirement that requests for compatibility

determinations for surface coal mining operations on national forest

lands be accompanied by a permit application, and, with certain

exceptions, require a VER determination as a prerequisite for approval

of coal exploration activities that may result in substantial

disturbance of the lands listed in section 522(e) of SMCRA. The

proposed rule also contains numerous editorial revisions and

organizational changes intended to improve overall consistency and

clarity. If the proposed rule becomes final, it would result in removal

of all existing suspensions of the affected regulations.

DATES: Electronic or written comments: OSM will accept electronic or

written comments on the proposed rule until 5:00 p.m. Eastern time on

June 2, 1997.

Public hearings: Anyone wishing to testify at a public hearing must

submit a request on or before 5:00 p.m. Eastern time on March 17, 1997.

Because OSM will hold a public hearing at a particular location only if

there is sufficient interest, hearing arrangements, dates and times, if

any, will be announced in a subsequent Federal Register notice. Any

disabled individual who needs special accommodation to attend a public

hearing should contact the person listed under FOR FURTHER INFORMATION

CONTACT.

ADDRESSES: Electronic or written comments: Submit electronic comments

to [email protected]. Mail written comments to the Administrative

Record, Office of Surface Mining Reclamation and Enforcement, 1951

Constitution Avenue, N.W., Washington, DC 20240 or hand-deliver to the

person listed under FOR FURTHER INFORMATION CONTACT.

Public hearings: If there is sufficient interest, hearings may be

held in Billings, MT; Denver, CO; Lexington, KY; Washington, DC; and

Washington, PA. To request a hearing, contact the person listed under

FOR FURTHER INFORMATION CONTACT by the time specified under DATES using

any of the methods listed for ``Electronic or written comments''.

FOR FURTHER INFORMATION CONTACT: Dennis Rice, Rules and Legislation,

Office of Surface Mining Reclamation and Enforcement, Room 115, South

Interior Building, 1951 Constitution Avenue, N.W., Washington, DC

20240. Telephone: (202) 208-2829. E-mail address: [email protected].

Additional information concerning OSM, this rule, and related documents

may be found on OSM's home page at http://www.osmre.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Comment Procedures.

II. General Background on Proposed Rule.

III. Discussion of Proposed Rule.

A. Sections 740.4, 740.11 and 745.13: VER Determinations for

Lands Protected by Paragraphs (e)(1) and (e)(2) of Section 522 of

SMCRA.

1. Who is Responsible for VER Determinations for Non-Federal

Lands Within Section 522(e)(1) Areas?

2. Which VER Definition Applies to Lands Listed in Paragraphs

(e)(1) and (e)(2) of Section 522?

3. What Other Changes are Proposed?

B. Sections 740.10 and 745.10: Information Collection.

C. Section 761.5: Definition of Valid Existing Rights.

1. Statutory and Regulatory History.

2. Basic Definition.

3. Property Rights Demonstration.

4. Good Faith/All Permits Standard.

5. Needed for and Adjacent Standard.

6. VER for Access and Haul Roads.

7. Transferability of VER.

8. Continually Created VER: VER When Prohibitions Come into

Effect After August 3, 1977.

D. Section 761.5: Definition of ``Surface Coal Mining Operations

Which Exist on the Date of Enactment''.

E. Section 761.11: Areas Where Surface Coal Mining Operations are

Prohibited or Limited.

1. Existing Operation Exemption.

2. Removal of Paragraph (h).

F. Section 761.12: Coordination with Permitting Process; Waiver

Requirements and Procedures.

G. Section 761.13: Submission and Processing Requirements for

Requests for VER Determinations.

1. Paragraph (a): Which agency will process a request for a VER

determination?

2. Paragraph (b): What information must a request for a VER

determination include?

3. Paragraph (c): How may the public participate in the VER

determination process?

4. Paragraph (e): How may a determination be appealed?

H. Section 772.12: Requirements for Coal Exploration on Lands

Unsuitable for Surface Coal Mining.

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

J. Effect on State Programs.

IV. Procedural Matters

I. Public Comment Procedures

Electric or Written Comments

Comments should be specific and confined to issues pertinent to the

proposed rule. They also should include explanations in support of the

commenter's recommendations. OSM appreciates any and all comments, but

those most useful and likely to influence decisions on the content of a

final rule will be those that either involve personal experience or

include citations to and analyses of the Act, its legislative history,

its implementing regulations, case law, other pertinent State or

Federal laws or regulations, technical literature, or other relevant

publications.

Except for comments provided in an electronic format, commenters

should submit two copies of their comments whenever practicable.

Comments received after the time indicated under DATES or at locations

other than the OSM office listed under ADDRESSES will not necessarily

be considered in the final decision or included in the administrative

record.

Public Hearing

Persons wishing to testify at a public hearing must contact the

person listed under FOR FURTHER INFORMATION CONTACT by the time

indicated under DATES. If no one requests an opportunity to comment at

a public hearing, no hearing will be held.

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

scheduled to speak have been heard. Persons in the audience who were

not scheduled to speak but who wish to do so will be heard following

the scheduled speakers. The hearing will end after all scheduled

speakers and any other persons present who wish to speak have been

heard.

[[Page 4837]]

Filing of a written statement at the time of the hearing will

assist the transcriber and facilitate preparation of an accurate

record. Submission of electronic or written statements to OSM in

advance of the hearing will allow OSM officials to prepare adequate

responses and appropriate questions.

Public Meeting

If there is only limited interest in a hearing at a particular

location, a public meeting, rather than a public hearing, may be held.

Persons wishing to meet with OSM representatives to discuss the

proposed rule may request a meeting by contacting the person listed

under FOR FURTHER INFORMATION CONTACT. All meetings will be open to the

public and, if possible, notice of the meetings will be posted at the

appropriate locations listed under ADDRESSES. A written summary of each

public meeting will be made a part of the administrative record of this

rulemaking.

II. General Background on Proposed Rule

Section 522(e) of SMCRA provides that, subject to VER, there shall

be no surface coal mining operations on certain lands after the date of

enactment (August 3, 1977). The Act exempts operations in existence on

that date. Section 522(e)(1) protects all lands within the boundaries

of units of the National Park System; the National Wildlife Refuge

System; the National System of Trails; the National Wilderness

Preservation System; the Wild and Scenic Rivers System, including study

rivers designated under section 5(a) of the Wild and Scenic Rivers Act;

and National Recreation Areas designated by Act of Congress. Section

522(e)(2) protects Federal lands within the boundaries of any national

forest, although it provides a mechanism and criteria for approving (a)

surface operations and impacts incident to an underground mine on any

type of national forest land, and (b) any type of surface operations on

lands that lack significant forest cover and are located west of the

100th meridian. Section 522(e)(3) prohibits operations that would

adversely impact publicly owned parks and properties listed on the

National Register of Historic Places; however, it permits operations

that receive joint approval from the regulatory authority and the

agency with jurisdiction over the park or place. Except for mine access

and haul roads, section 522(e)(4) prohibits operations within 100 feet

of the outside right-of-way line of any public road, but it provides a

mechanism and criteria for approval of exceptions from this

prohibition. Section 522(e)(5) prohibits operations within 100 feet of

a cemetery or within 300 feet of a public building, school, church,

community or institutional building, or public park. This paragraph

also prohibits operations within 300 feet of an occupied dwelling, but

it allows the owner of the dwelling to waive the prohibition.

SMCRA does not define or explain the VER exemption. As discussed in

greater detail in other sections of this preamble, OSM previously

defined or attempted to define VER by regulation in 1979, 1983, 1988,

and 1991. None of these efforts was fully successful. Judicial review

of the 1979 and 1983 definitions and related rules resulted in the

remand of several provisions, including most of the 1983 definition of

VER. In 1988, OSM proposed a new definition, which it withdrew in 1989

for further study.

On July 18, 1991 (56 FR 33152-65), OSM again proposed to revise the

definition of VER and related rules. The comment period for this

proposal originally closed September 16, 1991, but, by notice dated

September 12, 1991 (56 FR 46396), OSM extended the deadline until

October 16, 1991. In addition, in response to requests from interested

persons, OSM scheduled and held two public hearings on the proposed

rule, one in Knoxville, Tennessee, which attracted 27 speakers, and

another in Morgantown, West Virginia, at which 3 individuals offered

testimony.

The overwhelmingly majority of the approximately 750 comments

received did not directly discuss either the proposed rule language or

the specific issues upon which OSM had requested comment. Instead, the

commenters opposed the proposed rule in principle because they believed

that it would lead to increased mining in national parks and wildlife

refuges and irreparable or uncompensated damage to dwellings,

cemeteries, churches, and other structures. Copies of all comments

received and transcripts of the public hearings are on file as part of

the administrative record of the 1991 rulemaking effort.

Before OSM completed development of a final rule, the President

signed the Energy Policy Act of 1992 (EPAct), Public Law 102-486, 206

Stat. 2776, into law on October 24, 1992. Section 2504(b) of that

statute effectively placed a one-year moratorium on adoption of a new

or revised VER definition.

At the Department's request, Congress included a revised version of

this moratorium in the appropriations acts for fiscal years 1994 and

1995 for the Department of the Interior and related agencies.

Specifically, the Fiscal Year 1995 Appropriations Act (Pub. L. 103-332)

contained a provision that effectively prohibited the Department from

publishing a final Federal VER definition or disapproving existing

State definitions of VER until October 1, 1995. However, Congress did

not include the moratorium language in the fiscal year 1996

appropriations legislation or continuing resolutions.

After evaluating the comments received and taking intervening

events into consideration, OSM has decided to withdraw the 1991

proposal and publish a new, extensively revised proposed rule

concerning the definition of VER and related issues. The new proposed

rule is based upon, but not identical to, the 1991 proposal. Except as

discussed below, all substantive comments received in response to the

1991 proposed rule have been considered in developing the rule being

proposed today. However, because OSM has decided to withdraw the 1991

proposal in favor of the rule being proposed today, the preamble does

not necessarily discuss the disposition of all comments. Persons who

believe that the new proposal does not adequately address their 1991

concerns must submit new comments or resubmit relevant portions of

earlier comments to insure consideration of those concerns during

development of the final rule.

Some commenters expressed opposition to OSM's position that the

prohibitions and limitations of section 522(e) of SMCRA do not apply to

subsidence or other adverse surface impacts resulting from underground

mining activities conducted beneath or adjacent to protected lands. OSM

announced this policy in a separate Federal Register document (56 FR

33170-71) published on July 18, 1991, in tandem with the proposed rule

concerning VER. However, on September 21, 1993, in National Wildlife

Fed'n v. Babbitt, 835 F. Supp. 654 (D.D.C. 1993), the court vacated the

policy set forth in the notice and remanded the issue to the Secretary

for rulemaking in accordance with the notice and comment procedures of

the Administrative Procedure Act (5 U.S.C. 553). OSM is addressing this

issue in a separate rulemaking, which is also being published in

proposed form in today's Federal Register.

[[Page 4838]]

III. Discussion of Proposed Rule

A. Sections 740.4, 740.11 and 745.13: VER Determinations for Lands

Protected by Paragraphs (e)(1) and (e)(2) of Section 522 of SMCRA

1. Who Is Responsible for VER Determinations for Non-Federal Lands

Within Section 522(e)(1) Areas?

While SMCRA does not directly address responsibilities for VER

determinations, section 503(a) speaks of States having exclusive

jurisdiction over the regulation of surface coal mining and reclamation

operations on non-Federal lands. In accordance with this principle,

former 30 CFR 761.4, as promulgated on March 13, 1979 (44 FR 15341),

assigned the responsibility for VER determinations to the regulatory

authority, with the Secretary retaining responsibility for VER

determinations involving Federal lands.

On February 16, 1983 (48 FR 6935), OSM revised the Federal lands

regulations at 30 CFR 740.4 by adding paragraph (a)(4). This paragraph

narrowed the Secretary's responsibility for VER determinations by

restricting it to proposed surface coal mining operations that would be

located on Federal lands within the boundaries of any areas listed in

paragraph (e)(1) or (e)(2) of section 522 of the Act. In the same

rulemaking, OSM revised 30 CFR 745.13 by adding paragraph (o). This

paragraph specifies that the Secretary may not delegate the

responsibility for making VER determinations on Federal lands within

any areas listed in paragraph (e)(1) or (e)(2) of section 522 to the

State in a cooperative agreement for the regulation of mining on

Federal lands. The preamble to that rulemaking explains that exclusive

authority for VER determinations involving those lands is an integral

component of the Secretary's commitment to protect the areas listed in

paragraphs (e)(1) and (e)(2) of section 522 in accordance with

congressional direction and to prevent mining on Federal lands within

the National Park System (48 FR 6917, col. 2, February 16, 1983).

On September 14, 1983 (48 FR 41312), OSM removed 30 CFR 761.4

because it was no longer needed in view of the provisions added to 30

CFR 740.4 and 745.13 on February 16, 1983. Citizen and environmental

groups filed a challenge to the removal; they also used this occasion

as an opportunity to argue that SMCRA requires that the Secretary make

VER determinations in all cases involving lands within the boundaries

of section 522(e)(1) areas, regardless of ownership. The court rejected

the plaintiffs' arguments, noting that section 503(a) of the Act

``permits States to assume exclusive jurisdiction over the regulation

of surface coal mining and reclamation operations on non-Federal

lands.'' In re Permanent Surface Mining Regulation Litigation II, Round

III--Valid Existing Rights, 22 ERC 1557, 1566 (D.D.C. 1985) (``PSMRL

II, Round III--VER''). The court also noted that nothing in section

523(c) of the Act, which prohibits the Secretary from delegating to the

States his authority to designate Federal lands as unsuitable for

mining under section 522 of the Act, ``persuades the court to the

contrary.'' Ibid.

However, in oral arguments defending against the challenge, counsel

for the Government stated that:

[I]n those situations where surface mining on private inholdings

will affect federal lands, that kicks in the Federal Lands Program,

and under the Federal Lands Program, the Secretary makes the VER

determination, so there may be circumstances where you have a

private inholding within the protected area, in which the Secretary

would make the VER determination, but he can't in the abstract know

when he's going to be required to make that determination, until he

knows what land is going to be mined, and what potential impact that

might have on federal lands.

Transcript of Oral Argument, Dec. 21, 1984, at 46; quoted in PSMRL

II, Round III--VER, 22 ERC at 1566.

The court did not address the validity or interpretation of this

argument, which, taken at face value, would extend the reach of the

Federal lands program to lands in which there is no element of Federal

ownership.

On November 20, 1986 (51 FR 41952-62), OSM published a final rule

document that suspended a number of regulations. Among other things,

that document, which is known as the 1986 suspension notice, partially

suspended the VER definition promulgated on September 14, 1983. In the

preamble discussion of the impact of the suspension of the VER

definition on the Federal lands program, OSM announced that the

Secretary would make VER determinations for non-Federal lands within

the boundaries of the areas listed in section 522(e)(1) whenever

surface coal mining operations on those lands would affect the Federal

interest (51 FR 41955). This policy is known as the ``affected by''

standard. However, the notice did not suspend or modify 30 CFR

740.4(a)(4), which provides only that the Secretary is responsible for

VER determinations for Federal lands, or any other rule to reflect this

policy.

In 1991, OSM requested comment on whether the policy set forth in

the 1986 suspension notice (the ``affected by'' standard) should be

codified. Based on the comments received and further review of the

background of this issue, the agency is reconsidering the 1986 policy.

OSM is now seeking comment on four alternatives with respect to

responsibility for VER determinations for non-Federal lands within the

areas protected by section 522(e)(1):

(1) Reaffirming existing 30 CFR 740.4(a)(4), which would mean that

OSM would be responsible for making all VER determinations for Federal

lands in section 522(e)(1) areas and that the regulatory authority

(either OSM or the State) would be responsible for making all

determinations for non-Federal lands;

(2) Reaffirming existing 30 CFR 740.4(a)(4) and revising 30 CFR

Part 761 to provide that the regulatory authority (either OSM or the

State) must obtain the concurrence of the pertinent land management

agency before finding that a person has VER for any lands within the

boundaries of the areas listed in 30 CFR 761.11(a)(1) and section

522(e)(1) of the Act;

(3) Codifying the ``affected by'' standard, the policy set forth in

the 1986 suspension notice; or

(4) In a variation on the affected by standard, requiring that OSM

make all VER determinations for both Federal and non-Federal lands

within the boundaries of the areas designated in 30 CFR 761.11(a)(1)

and section 522(e)(1) of the Act.

For the reasons discussed below, OSM has selected the first

alternative as the preferred alternative. Therefore, although OSM

retains the option of adopting any of the alternatives, the rule text

being proposed today reflects the first alternative, which would assign

responsibility for making VER determinations for all non-Federal lands

to the regulatory authority. If OSM ultimately adopts an alternative

other than the preferred alternative, the text of the final rules will

be revised in a manner consistent with the alternative selected. As

discussed in finding G of this preamble, OSM also is proposing to

revise 30 CFR Part 761 to clearly delineate agency responsibilities for

VER determinations for both Federal and non-Federal lands. See proposed

30 CFR 761.13(a).

Adoption of the first alternative would be consistent with the

congressionally mandated doctrine of State primacy as expressed in

sections 101(f) and 503(a) of SMCRA. In particular, section 503(a)

provides for exclusive State jurisdiction over the regulation of

surface coal mining and reclamation operations on non-Federal lands,

except as specified in sections

[[Page 4839]]

521 (Federal oversight) and 523 (Federal lands) and Title IV of the Act

(abandoned mine land reclamation). The first alternative would also

complement OSM's policy of a shared commitment with the States to

achieve the goals of SMCRA. This policy promotes mutual trust and a

spirit of cooperation between OSM and the States and maximizes the

States' role in environmental protection and the regulation of surface

coal mining and reclamation operations within their borders. Subchapter

C of 30 CFR Chapter VII provides that State regulatory programs must be

no less stringent than the Act and no less effective than the

Secretary's regulations in meeting the requirements of the Act. Hence,

there should be no difference in the degree of environmental protection

regardless of whether OSM or the State makes the VER determination.

The second alternative is identical to the first in that the

regulatory authority would be responsible for making VER determinations

for all non-Federal lands, including those within the boundaries of

section 522(e)(1) areas. However, under the second alternative, if the

proposed operation would be located on land within the boundaries of an

area listed in section 522(e)(1), the agency statutorily responsible

for management of the protected lands would have to concur with the

regulatory authority's determination before the determination could

take effect. If adopted, this provision would be added to the

decisionmaking requirements of proposed 30 CFR 761.13(d). This

alternative would largely preserve the State's lead role in the

regulatory process in keeping with the dictates of sections 101(f) and

503(a) of SMCRA while providing additional assurance that the lands

designated in section 522(e)(1) receive the level of protection that

Congress intended; i.e., minimization of surface coal mining operations

on lands that Congress designated as unsuitable for surface coal mining

operations. It is somewhat analogous to 30 CFR 816.116(b)(3)(i) and

817.116(b)(3)(i), which require that the regulatory authority obtain

the concurrence of State agencies responsible for the administration of

forestry and wildlife programs when approving revegetation success

standards for operations with a postmining land use involving woody

plants. Although SMCRA did not require adoption of that provision (just

as SMCRA does not require the concurrence of the land management agency

for VER determinations involving section 522(e)(1) areas), OSM

nevertheless deemed it appropriate to promote attainment of SMCRA's

environmental protection and land reclamation goals.

The chief argument in favor of the third alternative (codification

of the affected by standard) is that the Federal interest in lands

included within the boundaries of section 522(e)(1) areas (national

parks, wildlife refuges, wild and scenic rivers, wilderness areas,

etc.) is not necessarily limited to lands included in the definition of

Federal lands in section 701(4) of the Act. Activities on private

inholdings may, in fact, affect Federal lands. The boundaries of

section 522(e)(1) areas are established by Congress or the President in

recognition of the national significance of these areas and the

uniquely high natural, historical, or cultural values associated with

the lands included therein. Surface coal mining operations on non-

Federal lands within the boundaries of section 522(e)(1) areas could

affect the Federal interest by adversely impacting the values for which

the lands were designated, at least on a short-term basis.

Adoption of the third alternative would afford the Federal

government (the Secretary) a decisionmaking role in VER determinations

for operations on lands in which there is any type of Federal interest,

even if the Federal government has no property interest in the lands in

question. Historically, proponents of this alternative have argued that

reserving this authority to the Secretary would ensure national

consistency and may result in more favorable consideration of arguments

advanced by the Federal land management agency with jurisdiction over

the protected site. Implementation of this alternative would require

delineation of the responsibilities of the various State and Federal

agencies involved (including which agency has authority to make the

affected by determination) and establishment of procedures to

coordinate interagency processing of requests for VER determinations.

The fourth alternative, under which OSM would be responsible for

making all VER determinations for all lands within the boundaries of

section 522(e)(1) areas, is a variation on the affected by standard.

This alternative relies upon the argument that because Congress or the

President established the boundaries of those areas, all lands within

their boundaries must possess values of national significance or

interest. Therefore, surface coal mining operations on any lands within

the boundaries of those areas would automatically affect the Federal

interest in some way. Also, in many cases, non-Federal lands are

intertwined with Federal lands in such a fashion that activities on the

non-Federal lands would have an impact on the Federal lands in terms of

noise, dust, and other environmental factors.

The affected by standard represents current OSM policy. Although

the 1986 suspension notice does not explain the basis or origin of the

policy, it appears that the policy arises from the Government's oral

argument in PSMRL II, Round III-VER, as quoted in the decision. This

argument apparently derives from and expands upon language in the

court's earlier decision in In re Permanent Surface Mining Regulation

II, Round I, No. 79-1144 (D.D.C. July 6, 1984), slip op. at 11-15

(hereinafter ``PSMRL II, Round I''). In that decision, the court noted

that the definition of ``surface coal mining operations'' in section

701(28) of the Act includes a broad ``affected by'' test and that under

section 523(a) of SMCRA and the definition of ``Federal lands program''

in section 701(5), all surface coal mining and reclamation operations

on Federal lands are subject to the Federal lands program.

Because the scope of the decision in PSMRL II, Round I was limited

to Federal lands, and because the court in PSMRL II, Round III-VER did

not review the merits of the position suggested in oral argument by

Government counsel, neither decision compels adoption of an affected by

standard.

Also, in PSMRL II, Round I, the court struck down 30 CFR

740.11(a)(3) (1983) only to the extent that that rule did not apply the

Federal lands program to all Federal lands. Specifically, the court

held that, with respect to the jurisdiction of the Federal lands

program, the Secretary is ``powerless to limit'' the statutory

definition of ``surface coal mining operations'' in section 701(28) and

that, ``if surface mining activities take place on Federal lands, the

Secretary is powerless to exclude them from the Federal lands

program.'' Id. at 14-15. The court rejected the Secretary's argument,

as stated in the preamble to the 1983 rulemaking, that

because of the interaction of the State primacy provision, section

503 of the Act, with section 523 of the Act, the Federal lands

program can be interpreted to exclude State or privately-owned

surface overlying Federally-owned coal where the operation will not

involve mining the Federally-owned coal and where there will be no

disturbance of the Federally-owned estate.

48 FR 6921, February 16, 1983.

[[Page 4840]]

Nothing in this decision would compel extension of the Federal

lands program to lands in which there is no Federal property interest,

i.e., lands in which both the surface and mineral estates are entirely

in non-Federal ownership. There is no indication that the court

contemplated using the affected by test in section 701(28) to extend

the Federal lands program to lands in which there is no Federal

property interest. The court noted that ``[w]hen Congress discussed

state administration of the Act, it virtually always referred to non-

federal lands.'' Id. at 14.

Furthermore, when OSM repromulgated 30 CFR 740.11(a) in 1990 to

address the judicial remand, the agency rejected a commenter's argument

that the court had explicitly endorsed an affected by test to determine

the jurisdiction of the Federal lands program. In declining to adopt an

affected by standard, OSM stated that:

An ``affected by'' test would be very difficult to administer. A

determination that the Federal interest would or would not be

affected would have to be made on a case-by-case basis, and could be

subject to different interpretations.

55 FR 94001, March 13, 1990.

In summary, SMCRA does not appear to require adoption of an

affected by standard. Therefore, OSM's preferred alternative is to

return to the pre-1986 approach, which, in accordance with the language

of section 503(a) of the Act, provided the regulatory authority with

exclusive jurisdiction to make VER determinations for all non-Federal

lands.

Regardless of which alternative is adopted, the Secretary would

retain exclusive authority for making VER determinations for Federal

lands within the boundaries of the areas listed in 30 CFR 761.11(a)(1)

and section 522(e)(1) of the Act and for Federal lands (but not private

inholdings) within the boundaries of any national forest. None of the

alternatives would affect the memorandum of understanding between OSM

and the U.S. Department of Agriculture, Forest Service, which details

the procedures applicable to the processing of requests for VER

determinations involving lands for which the Forest Service owns the

surface estate. Each primacy State (State with a regulatory program

approved under section 503 of SMCRA) would retain the authority to make

VER determinations for non-Federal lands within national forest

boundaries.

Under the first and second alternatives, the regulatory authority

would be responsible for making VER determinations for all non-Federal

lands, including those within the boundaries of section 522(e)(1)

areas. The second alternative includes an additional requirement that

the regulatory authority obtain the concurrence of the agency with

management jurisdiction over the area if the land is located in an area

listed in section 522(e)(1). The third alternative would extend the

Secretary's responsibility to include VER determinations for non-

Federal lands within section 522(e)(1) areas whenever surface coal

mining operations on those lands would affect the Federal interest.

And, under the fourth alternative, the Secretary would be responsible

for making VER determinations for all non-Federal lands within the

boundaries of section 522(e)(1) areas.

None of the alternatives would affect responsibilities for VER

determinations for other types of Federal or non-Federal lands. Except

as provided in the second, third, and fourth alternatives, the

regulatory authority would retain sole responsibility for VER

determinations for non-Federal lands. In primacy States without a

Federal lands cooperative agreement pursuant to 30 CFR Part 745, the

Secretary would remain responsible for making VER determinations for

Federal lands under paragraphs (3), (4), and (5) of section 522(e) of

the Act. In primacy States with a Federal lands cooperative agreement,

the State regulatory authority would remain responsible for making VER

determinations pursuant to paragraphs (3), (4), and (5) of section

522(e) for Federal lands not listed in paragraph (1) or (2) of section

522(e).

2. Which VER Definition Applies to Lands Listed in Paragraphs (e)(1)

and (e)(2) of Section 522?

Under section 503(a) of SMCRA, States with regulatory programs

approved by the Secretary have exclusive jurisdiction (except as

otherwise provided in sections 521 and 523 of the Act) over all surface

coal mining and reclamation operations located or proposed to be

located on non-Federal, non-Indian lands within the State's borders.

Section 523(c) further provides that a State may enter into a

cooperative agreement with the Secretary under which the State also

would assume responsibility for the regulation of mining on Federal

lands within its borders.

The Federal lands rules at 30 CFR 740.11(a) currently specify that,

upon approval of a State regulatory program pursuant to 30 CFR Part 732

or promulgation of a Federal program for a State under 30 CFR Part 736,

that program will apply to all surface coal mining and reclamation

operations on any Federal lands within the State except Indian lands.

Therefore, under the current rules, the Secretary must apply the State

program definition of VER when making VER determinations for Federal

lands in primacy States.

However, on November 20, 1986, at 51 FR 41952-62, OSM published a

document that, among other things, partially suspended the VER

definition promulgated on September 14, 1983. Although the document did

not suspend any provision of 30 CFR Part 740, the portion of the

preamble that discusses the impact of the suspension of the VER

definition on the Federal lands program slightly modifies the general

principle that, consistent with 30 CFR 740.11(a) as discussed in the

preceding paragraph, OSM must use the VER definition set forth in the

applicable State or Federal regulatory program when making VER

determinations for Federal lands. Specifically, the preamble states at

51 FR 41955 that when a state definition relies upon an all-permits

standard, OSM will apply the State standard as if it includes a good

faith component. In addition, the preamble provides that, pending

promulgation of a new Federal definition of VER, OSM will not process

requests for VER determinations involving lands within the boundaries

of units of the National Park System if the approved State program

definition of VER includes a takings standard. (See Part III.C. of this

preamble for an explanation of the all-permits, good faith/all permits,

and takings standards for VER.) At present, the deferral policy affects

only units of the National Park System within Illinois and West

Virginia. OSM adopted this policy as a result of concerns expressed by

the National Park Service.

OSM is now proposing to revise 30 CFR 740.11 (a) and (g) to specify

that the Federal definition of VER will apply whenever a VER

determination involves lands listed in paragraph (e)(1) or (e)(2) of

section 522 of SMCRA, regardless of whether OSM or the State is

responsible for making the determination. Application of the Federal

definition will ensure that requests for VER determinations involving

lands of national interest and importance are evaluated on the basis of

the same criteria.

In primacy States without a Federal lands cooperative agreement

pursuant to 30 CFR Part 745, the Secretary would continue to use the

approved State program definition of VER when making VER determinations

for all other types of Federal lands under paragraphs (3), (4), and (5)

of section 522(e) of the Act.

[[Page 4841]]

Similarly, in States with a Federal lands cooperative agreement, the

State regulatory authority would continue to use the State program

definition of VER when making VER determinations pursuant to paragraphs

(3), (4), and (5) of section 522(e) for Federal lands not listed in

paragraph (1) or (2) of section 522(e) of the Act.

3. What Other Changes Are Proposed?

OSM is proposing to revise 30 CFR 740.4(a)(5) and 30 CFR 745.13(p)

to incorporate references to the provisions of 30 CFR Part 761 that

correspond to section 522(e) of SMCRA. In addition, to conform with the

language of section 522(e) of the Act, which refers only to surface

coal mining operations, OSM is proposing to replace the term ``surface

coal mining and reclamation operations'' in 30 CFR 740.4(a)(4) and

745.13(o) with ``surface coal mining operations.'' This change will

also ensure consistency with the policy set forth in the preamble to a

final rule published on April 5, 1989 (54 FR 13814), which specifies

that SMCRA does not require a permit or other regulatory authority

approval as a prerequisite for conducting reclamation work alone. In

other words, the latter change clarifies that the prohibitions and

restrictions of 30 CFR 761.11(a) and section 522(e) do not apply to

reclamation activities such as the restoration of abandoned mine lands

or bond forfeiture sites.

B. Sections 740.10 and 745.10: Information Collection

The proposed rule changes discussed in III.A. will not alter the

information collection burden associated with Parts 740 and 745.

However, OSM is proposing certain editorial revisions to Secs. 740.10

and 745.10 to maintain consistency with Departmental guidance

concerning the format and content of these sections.

C. Section 761.5: Definition of Valid Existing Rights

1. Statutory and Regulatory History

As discussed in the portion of this preamble entitled ``General

Background on Proposed Rule,'' section 522(e) of SMCRA (30 U.S.C.

1272(e)) prohibits surface coal mining operations on certain lands in

the absence of a waiver or compatibility finding unless a person has

VER to conduct such operations or unless the operation was in existence

on the date of enactment (August 3, 1977). SMCRA does not define or

explain VER, and the legislative history of both section 522(e) in

general and the phrase ``subject to valid existing rights'' in

particular is sparse.

The committee report on H.R. 2, the House version of the

legislation that ultimately became SMCRA, contains the following

discussion:

The language ``subject to valid existing rights'' in section

522(e) is intended, however, to make clear that the prohibition of

strip mining on the national forests is subject to previous court

interpretations of valid existing rights. For example, in West

Virginia's Monongahela National Forest, strip mining of privately

owned coal underlying federally owned surface has been prohibited as

a result of United States v. Polino, 133 F. Supp. 772 (1955). In

this case the court held that ``stripping was not authorized by

mineral reservation in a deed executed before the practice was

adopted in the county where the land lies, unless the contract

expressly grants stripping rights by use of direct or clearly

equivalent words. The party claiming such rights must show usage or

custom at the time and place where the contract is to be executed

and must show that such rights were contemplated by the parties.''

The phrase ``subject to valid existing rights'' is thus in no way

intended to open up national forest lands to strip mining where

previous legal precedents have prohibited stripping.

H.R. Rep. No. 218, 95th Cong., 1st Sess. 95 (1977).

The committee report on S. 7, the Senate version of the legislation

that ultimately became SMCRA, contains a similar discussion, including

the statement that:

The language of 422(e) [now 522(e)] is in no way intended to

affect or abrogate any previous State court decisions. * * * The

phrase ``subject to valid existing rights'' is thus in no way

intended to open up national forest lands to strip mining where

previous legal precedents have prohibited stripping.

S. Rep. No. 218, 95th Cong., 1st Sess. 94-95 (1977).

Thus, the committee reports accompanying the versions of SMCRA

passed by each chamber of Congress emphasize that the VER exemption is

intended to maintain existing State prohibitions on surface coal mining

operations. The reports do not discuss whether or how Congress intended

VER to apply as a means of authorizing operations that SMCRA would

otherwise prohibit. In other words, the reports emphasize that nothing

in SMCRA was intended to create new property rights or mining authority

for surface coal mining operations.

The conference committee report does not address this issue. See

H.R. Conf. Rep. No. 493, 95th Cong., 1st Sess. 110-11 (1977).

On several occasions, a colloquy between Congressmen Udall and

Roncalio during floor debate on H.R. 2, the House bill that eventually

became SMCRA, has been interpreted to mean that one purpose of the VER

provision in SMCRA may be to avoid the compensable takings that could

otherwise result from the application of the prohibitions of section

522(e). Congressman Roncalio proposed an amendment to delete the

sentence in section 601(d) that reads, ``[v]alid existing rights shall

be preserved and not affected by such designation.'' (Section 601

provides for the designation of Federal lands as unsuitable for noncoal

mining.) Congressman Udall, who is generally recognized as the chief

architect of SMCRA, opposed the amendment ``because it takes from the

bill a statement that valid legal rights should be preserved. I do not

think we should do that without paying compensation under the fifth

amendment.'' 123 Cong. Rec. 12,878 (1977). The House rejected the

amendment and retained the language at issue.

However, nothing in this colloquy provides any guidance on how

Congress intended VER under section 522(e) to be defined. Because

section 601 addresses only noncoal mining operations on Federal lands,

Congressman Udall's statement and the sentence in question in section

601(d) probably refer to VER as that term is defined under the General

Mining Law of 1872 and similar Federal laws involving the public

domain. In such statutes, the term VER typically refers to the set of

circumstances under which persons who have unvested interests or

expectations in Federal lands or minerals will be allowed to vest those

interests or expectations as property rights when the United States is

the fee owner. In general, the VER provisions of those statutes apply

to cases in which the Federal government changes the eligibility

criteria or other requirements for vesting of property rights. In such

cases, the term VER refers to circumstances in which a person who has

taken some action to vest a property right in Federal lands or minerals

has the right to complete the process regardless of any statutory or

regulatory changes to the contrary. This type of VER is not analogous

to VER for surface coal mining operations under section 522(e) of

SMCRA, which applies to both private and Federal lands and does not

involve a transfer of a property right from the Federal government to

another party. Instead, VER under section 522(e) of SMCRA concerns a

person's right to use property for a particular purpose (conducting

surface coal mining operations) when that person already has vested

property rights.

[[Page 4842]]

Although the legislative history of SMCRA is largely silent on the

meaning of VER, the extent to which the Federal government and States

may prohibit or restrict the exercise of private property rights

without providing compensation is determined by case law established

pursuant to the Fifth and Fourteenth Amendments to the U.S.

Constitution. Accordingly, in its first rulemaking defining VER, OSM

``endeavored to determine the point at which payment would be required

because a taking had occurred, then to define `valid existing rights'

in those terms, i.e., those rights which cannot be affected without

paying compensation.'' 44 FR 14992-93, March 13, 1979.

OSM's first regulatory definition of VER provided that, except for

haul roads, VER included only those property rights in existence on

August 3, 1977, the owners of which either had obtained all necessary

permits for the proposed surface coal mining operation on or before

August 3, 1977 (the ``all permits'' standard), or could demonstrate

that the coal for which the exemption was sought was both needed for

and immediately adjacent to a surface coal mining operation in

existence on August 3, 1977 (the ``needed for and adjacent'' standard).

44 FR 14902, 15342 (March 13, 1979).

The mining industry, the State of Illinois, the National Wildlife

Federation, and assorted environmental organizations all challenged the

validity of the 1979 definition. Because the plaintiffs presented no

evidence of specific harm, the court declined to rule on the

constitutionality of the definition. However, the court held that a

person who applies for all permits, but fails to receive one or more

through government delay, engenders the same investments and

expectations as a person who has obtained all permits. Specifically,

the court stated that ``a good faith attempt to have obtained all

permits before the August 3, 1977 cut-off date should suffice for

meeting the all permits test.'' In re Permanent Surface Mining

Regulation Litigation I, 14 ERC 1083, 1091 (D.D.C. 1980), (``PSMRL I,

ROUND I'').

To comply with this decision, which partially remanded the all

permits standard, OSM suspended the definition of VER insofar as it

required that all permits have been obtained prior to August 3, 1977

(45 FR 51547-48, August 4, 1980). The suspension document stated that,

pending further rulemaking, OSM would interpret the definition as

including the court's suggestion that a good faith effort to obtain all

permits should suffice to establish VER. This standard is known as the

``good faith/all permits'' standard.

The industry plaintiffs appealed those portions of the District

Court's decision in PSMRL I, ROUND I that were adverse to their

interests. However, the U.S. Court of Appeals for the District of

Columbia Circuit remanded the appeal in 1981 after the government

informed the court that it was reconsidering the 1979 definition. Thus,

the court never reached a decision on the merits of the appeal.

On June 10, 1982 (47 FR 25278), OSM published a proposed rule

setting forth six options for revising the definition of VER. These

options included the good faith/all permits standard, a mineral rights

ownership standard, a mineral rights ownership plus right to mine by

the method intended standard (the ``ownership and authority to mine''

standard), and three variations on the latter two standards. Since the

proposed standards all attempted to establish a clearly defined

``bright line'' test for VER, they became known as ``mechanical

tests.''

Commenters criticized each option as either too broad or too

narrow, and many argued that one or more of the proposed options would

result in a taking of property without just compensation in violation

of the Fifth and Fourteenth Amendments to the U.S. Constitution.

Because the Supreme Court has consistently declined to prescribe set

formulas for determining when a taking will occur, OSM concluded that

any mechanical test likely would be either over-inclusive or under-

inclusive of all potential takings that might result from the section

522(e) prohibitions. Therefore, the final rule promulgated on September

14, 1983 (48 FR 41314) included a definition of VER which provided, in

part, that a person has VER if a prohibition on surface coal mining

operations would result in a compensable taking of that person's

property interests under the Fifth and Fourteenth Amendments to the

U.S. Constitution. This standard is known as the ``takings'' standard.

The revised definition also defined the ``needed for'' aspect of

the needed for and adjacent standard and established the concept of

``continually created VER'' to protect the rights of persons with

mining operations or mineral interests in areas that come under the

protection of section 522(e) sometime after August 3, 1977, as would

occur, for example, when a park is created or expanded or a protected

structure is built after that date.

However, the U.S. District Court for the District of Columbia

subsequently remanded most of the revised definition on procedural

grounds. The court held that the takings standard represented such a

significant departure from the options presented in the proposed rule

that a new notice and comment period was necessary to comply with the

public participation requirements of the Administrative Procedure Act

(5 U.S.C. 553). See PSMRL II, ROUND III-VER, 22 ERC 1557, 1564. The

court also held that the proposed rule failed to provide adequate

notice that it would expand the needed for and adjacent standard to

include properties acquired after the date of enactment of SMCRA

(August 3, 1977). Accordingly, the court remanded both the takings

standard (including that portion of the newly adopted continually

created VER provision that relied on the takings standard) and the

revised needed for and adjacent standard to the Secretary for proper

notice and comment.

In response to this order, on November 20, 1986 (51 FR 41952,

41961), OSM suspended most of the September 14, 1983 definition of VER.

Since the court upheld the concept of continually created VER for

existing operations as set forth in 30 CFR 761.5(d)(1), that portion of

the revised definition was not suspended. As discussed at 51 FR 41954-

55, in the absence of an applicable State program definition of VER,

the suspension notice effectively reinstated the 1980 good faith/all

permits standard and the original (1979) needed for and adjacent

standard, while adding a continually created VER component for

operations in existence at the time a protected feature comes into

existence or is expanded. Except as discussed in Part III.A. of this

preamble, the suspension notice did not impact State program

definitions or their application by either the State or OSM.

On December 27, 1988 (53 FR 52374), OSM proposed the good faith/all

permits standard and the ownership and authority to mine standard as

options for a regulatory definition of VER. Under the ownership and

authority to mine standard, an individual could establish VER by

demonstrating possession of both a right to the coal and the right to

mine it by the method intended, as determined by State law. After

evaluating the comments received, OSM withdrew the entire proposed rule

for further study on July 21, 1989 (54 FR 30557).

As part of that study, OSM and the University of Kentucky College

of Law, in cooperation with the American Bar Association, cosponsored a

national symposium on April 3-4, 1990, on the meaning of VER under

SMCRA. Volume 5, Number 3 of the Journal of Mineral

[[Page 4843]]

Law and Policy, contains the proceedings of this symposium. The

participants did not reach a consensus on how to define VER.

Also in 1990, Belville Mining Company, an Ohio mining firm, filed

suit against the Secretary of the Interior alleging that he had, among

other things, (1) failed to perform a mandatory duty to promulgate the

definition of VER needed to implement section 522(e); (2) in lieu of

regulations, issued various statements and directives on VER (including

the policy set forth in the November 20, 1986 suspension notice)

without notice and comment in violation of the Administrative Procedure

Act; and (3) made VER determinations relying on State regulations

identical to an invalidated Federal regulation. Belville Mining Co. v.

Lujan, No. C-1-89-790 (S.D. Ohio 1991) (``Belville I'').

In a July 22, 1991, decision, the court in Belville I, (1) ordered

the Secretary to begin proceedings to promulgate a final rule defining

VER; (2) enjoined him from enforcing or applying the November 20, 1986

suspension notice or any temporary directive that extends the policy of

the suspension notice; and (3) directed him to immediately begin

proceedings to disapprove State program definitions of VER that rely

upon the all permits standard. On September 21, 1992, pursuant to the

Government's motion for reconsideration, the court narrowed the latter

portion of its ruling to require only the disapproval of the Ohio

program definition of VER insofar as that definition affects Belville

and its VER applications. In doing so, the court accepted the

Government's argument that federal remedy law prohibits the imposition

of injunctive remedies that are beyond the scope of the plaintiff's

individual injuries and related VER applications. Consequently, OSM

interprets the decision barring use of the 1986 policy as applying only

to Ohio. In all other States, OSM continues to adhere to the policy set

forth in the November 20, 1986 suspension document.

On July 18, 1991, OSM proposed to revise the definition of VER by

reinstating the takings standard, the good faith/all permits standard,

and the 1979 version of the needed for and adjacent standard. In

addition, the proposed rule eliminated the separate provisions

concerning continually created VER for existing operations and

incorporated the concept of continually created VER into the other

standards for VER.

OSM did not finalize this rule before the President signed the

Energy Policy Act of 1992 (Pub. L. 102-486, 206 Stat. 2776) (EPAct)

into law on October 24, 1992. Section 2504(b) of that law required

adherence to the VER policy in the November 20, 1986 suspension notice

(51 FR 41952) for one year after the date of enactment. That provision

had the effect of suspending the Belville I decision in Ohio and

halting publication of a new final rule defining VER. Although the

EPAct provision expired on October 24, 1993, the appropriations acts

for the Department of the Interior and related agencies for fiscal

years 1994 and 1995 each included a moratorium on adoption of a new or

revised Federal VER definition or disapproval of existing State program

definitions of VER. The last moratorium (section 111 of H.R. 4602

(1994)) expired October 1, 1995. Congress did not include similar

language in any legislative for fiscal year 1996.

2. Basic Definition

In many respect, the definition of VER being proposed today

resembles the definition previously proposed on July 18, 1991. Both

rules include a basic definition that describes VER as a set of

circumstances under which a person may conduct surface coal mining

operations which section 522(e) of the Act would otherwise prohibit.

The definition also clarifies that, even if a person has VER, surface

coal mining and reclamation operations on these lands are subject to

all other requirements of the Act and the pertinent regulatory program.

The VER exemption does not entitle a person to an exemption from any

other permitting requirements or performance standards. This language

establishes the conceptual framework within which the standards of

paragraphs (a) and (b) of the definition must be applied.

3. Property Rights Demonstration

Like the 1991 proposal, paragraph (a) of the definition of VER at

30 CFR 761.5 in this proposed rule would reinstate the requirement that

a person claiming VER for any type or aspect of surface coal mining

operations other than roads must demonstrate that a legally binding

conveyance, lease, deed, contract, or other document vests that person

with the property right, as of the date that the land came under the

protection of section 522(e) of the Act and 30 CFR 761.11, to conduct

the type of surface coal mining operations intended. Interpretation of

the comments relied upon to establish these rights must be based upon

applicable State statutory or case law, or, if no applicable law

exists, upon custom and generally accepted usage at the time and place

that the documents came into existence.

This provision, which originally appeared in the 1979 definition

but was deleted in 1983 without explanation, should ensure consistency

with section 510(b)(6)(C) of SMCRA, which provides that ``the surface-

subsurface legal relationship shall be determined in accordance with

State law,'' and with the legislative history of the Act, which

indicates that Congress did not intend to enlarge or diminish property

rights under State law. See H.R. Conf. Rep. No. 493, 95th Cong. 1st

Sess. 106 (1977); H.R. Rep. No. 218, 95th Cong. 1st Sess. 95 (1977);

and S. Rep. No. 128, 95th Cong. 1st Sess. 94-95 (1977). The legislative

history frequently references United States v. Polino, 131 F. Supp. 772

N.D. W.Va. 1955), in which the court held that the right to use surface

mining methods to recover privately owned coal underlying Federal lands

within the Monongahela National Forest depends upon the language of the

deed, the interpretation of which is a matter of State law.

The property rights demonstration requirement being proposed today

differs slightly from the 1979 rule. First, it incorporates the concept

of continually created VER, which means that the property rights must

be vested as of the date that the land comes under the protection of

the Act. In some cases, this date may be later than the date of

enactment of SMCRA (August 3, 1977), which is the date referenced in

the 1979 rule. The proposed change recognizes that houses, churches,

roads, parks, and other features protected by section 522(e) come into

existence and are expanded on an ongoing basis. Because the protection

of section 522(e) is not limited to those features in existence on the

date of enactment, VER for lands coming under the protection of the Act

after the date of enactment should not be limited to property rights in

existence on the date of enactment.

Second, the proposed rule no longer limits eligible property rights

to the right to produce coal. Property rights (and hence VER) may exist

for (1) surface coal mining operations such as coal preparation plants

and coal mine waste disposal sites that do not involve coal extraction,

and (2) non-extractive activities, facilities, and surface disturbances

(such as support facilities, ventilation shafts, and topsoil storage

areas) associated with coal-producing surface coal mining operations.

As in the 1979 rule, the property rights demonstration requirement

does not necessarily apply to roads. VER standards for roads are set

forth in paragraph (b) of the proposed definition.

[[Page 4844]]

4. Good Faith/All Permits Standard

In addition to the property rights demonstration, the proposed

definition requires that a person claiming VER for surface coal mining

operations other than roads meet either the good faith/all permits

standard of paragraph (a)(1) or the need for and adjacent standard of

paragraph (a)(2), which is discussed at length under a subsequent

heading in this preamble.

The good faith/all permits standard provides that a person has VER

if, prior to the date the land came under the protection of 30 CFR

761.11 and section 522(e) of the Act, that person or a predecessor in

interest had obtained, or made a good faith effort to obtain, all State

and Federal permits and other authorizations required to conduct

surface coal mining operations. Potentially necessary permits and

authorizations include, but are not limited to, State mining permits,

National Pollutant Discharge Elimination System (NYDES) permits, U.S.

Forest Service special use permits, air quality plan approvals, U.S.

Mine Safety and Health Administration ground control plan approvals,

and (for some types of facilities) building permits and zoning charges.

Expired or lapsed permits or authorizations are not acceptable. If no

permits were required prior to the enactment of SMCRA, none are needed

to establish VER, provided the person obtained, or made a good faith

attempt to obtain, all necessary authorizations to operate from all

appropriate State and Federal agencies by the pertinent date. See the

Greenwood Land and Mining Company and Mower Lumber Company VER

determinations at 46 FR 36758 and 45 FR 52467, respectively.

OSM believes that the good faith/all permits standard is the

standard most consistent with the legislative history of section

522(e), which indicates that Congress' purpose in enacting section

522(e) was to prevent new surface coal mining operations in the listed

areas, either to protect human health, safety, and general welfare or

because the environment values and other features associated with these

areas are generally incompatible with surface coal mining operations.

See S. Rep. No. 128, 95th Cong. 1st Sess. 94 (1977). The two other

principal potential standards (the takings standard and the ownership

and authority to mine standard) would be either far more complex and

difficult to administer (the takings standard) or much less protective

of the areas listed in section 522(e) (the ownership and authority to

mine standard).

Almost all commenters from every interest group opposed the takings

standard when OSM first formally proposed it in 1991. In particular,

they objected to its subjective or unpredictable nature and the

potentially onerous information collection and analytical burdens it

would place on persons seeking a VER determination and the agency

making the determination. The ownership and authority to mine standard

arguably would be less complex and more objective than the takings

standard, but it would offer no protection to section 522(e) lands

beyond that afforded by the right-of-entry provisions of the permitting

requirements applicable to surface coal mining and reclamation

operations on all lands. Such a result most likely would not be in

accordance with congressional intent in enacting the prohibitions of

sections 522(e). See S. Rep. No. 128, 95th Cong. 1st Sess. 94 (1977).

OSM recognizes that the U.S. Court of Appeals for the District of

Columbia Circuit found that the legislative history of SMCRA suggests

that ``Congress did not intend to infringe on valid property rights or

effect takings through section 522(e).'' Nat'l Wildlife Fed'n v. Hodel,

839 F.2d 694, 750 (D.D.C. 1988) (``NWF''). However, OSM does not

believe that this statement militates against adoption of a good faith/

all permits standard for VER. As discussed at length in the portion of

this preamble entitled ``Statutory and Regulatory History,'' in PSMRL

I, ROUND I, supra, at 14 ERC 1091, the court declined to find the

closely related 1979 all permits standard unconstitutional. The

definition being proposed today is consistent with that court's

decision that ``a good faith attempt to have obtained all permits

before the August 3, 1977 cut-off date should suffice for meeting the

all permits test.'' Furthermore, in Hodel v. Virginia Surface Mining &

Reclamation Ass'n, 452 U.S. 264, 296 n.37 (1981) (``Hodel''), the U.S.

Supreme Court stated that, while nothing in the statutory language of

SMCRA or its legislative history would compel adoption of an all

permits standard for VER, section 522(e) ``does not, on its face,

deprive owners of land within its reach of economically viable use of

their land since it does not proscribe nonmining uses of such land.''

There is nothing in court decisions to date, the statute, or the

legislative history that would preclude OSM from exercising its

discretion to adopt a good faith/all permits standard for VER under

section 522(e).

Section 522(e) is a form of land use regulation that may be

considered analogous to certain provisions of zoning law. VER under

section 522(e) is generally analogous to those provisions of land use

laws that define when a person attains a vested right to a particular

land use regardless of subsequent changes in zoning ordinances that

would otherwise prohibit or restrict that use. State laws vary widely

with respect to when a person develops a vested interest in a

particular land use, but mere ownership is rarely sufficient. Some

States require that a person both obtain all necessary permits and make

significant expenditures in reliance on those permits. Others require

that a person reach a certain point in the permit process or make

substantial good faith expenditures based on the existing zoning before

he or she develops a vested interest in uses allowed under that zoning.

The good faith/all permits standard for VER has a similar effect

and is based in part on a similar rationale. Therefore, OSM anticipates

that, in any review of the validity of a final VER standard, a court

would consider principles analogous to those that have guided judicial

decisions on challenges to the validity of zoning ordinances and

similar land use regulatory provisions. In general, the courts have

upheld land use restrictions as a legitimate exercise of the police

power under the U.S. Constitution.

In making VER determinations, OSM and 20 of the 24 States with

primacy rely upon a VER definition that includes either the all permits

standard or the good faith/all permits standard. Apart from the

Belville litigation and The Sunday Creek Coal Co. v. Hodel, No. C-2-88-

0416 (S.D. Ohio, June 2, 1988) (``Sunday Creek''), OSM is aware of no

cases in which the State or Federal courts have found that the good

faith/all permits standard or an agency determination that a person did

not have VER under the good faith/all permits standard was invalid on

the basis of a conclusion that the standard or determination would

result in a compensable taking of a property interest under the Fifth

and Fourteenth Amendments to the U.S. Constitution. Belville and Sunday

Creek are isolated cases that do not establish precedent outside the

Southern District of Ohio.

OSM believes that the good faith/all permits standard proposed in

this rule is both reasonable and consistent with congressional intent.

As discussed above, there is a lack of clear or directly applicable

legislative history with respect to how Congress intended the VER

exemption in section 522(e) of the Act to be interpreted. In the

absence of

[[Page 4845]]

such guidance or direction, the good faith/all permits standard would

balance a number of statutory purposes and policy objectives for this

rulemaking, including ensuring basic fairness, establishing a

reasonable standard that is practicable to administer, providing

substantial environmental protection to congressionally designated

areas, encouraging efficient removal of coal resources, minimizing

disruption of existing State regulatory programs and expectations

engendered thereunder, and avoiding across-the-board or indiscriminate

compensable takings of property interests.

5. ``Needed for and Adjacent'' Standard

The ``needed for and adjacent'' standard in the definition of VER

promulgated on March 13, 1979 (44 FR 14902, 15342) provided that any

person who owned an ongoing surface coal mining operation for which all

permits were obtained prior to August 3, 1977, possessed VER for coal

immediately adjacent to that operation if the person had a property

right to the coal as of August 3, 1977, and if he or she could

demonstrate that the coal was needed for the ongoing operation. The

National Wildlife Federation challenged this standard as unduly

expanding the scope of the VER exemption beyond that intended by

Congress. However, the court upheld the standard, finding it to be ``a

rational method of allowing mining when denial would gravely diminish

the value of the entire mining operation, thereby constituting a taking

under Supreme Court declarations.'' PSMRL I, Round I, 14 ERC 1083,

1091-92 (D.D.C. 1980).

The revised definition of VER promulgated on September 14, 1983 (48

FR 41315-16) modified the ``needed for and adjacent'' standard by

deleting the requirement that the owner of the operation have acquired

the property rights to the coal for which the exemption is sought prior

to August 3, 1977 (although OSM's response to a comment concerning this

issue at 48 FR 41316 suggests that the deletion may have been

unintentional). In that rulemaking, OSM also defined ``needed for'' as

meaning that the extension of mining to the coal in question is

essential to make the surface coal mining operation as a whole

economically viable.

The National Wildlife Federation challenged these changes as being

both procedurally and substantively improper. The U.S. District Court

for the District of Columbia agreed in part, finding that the agency

had failed to comply with the Administrative Procedure Act (5 U.S.C.

553) by not affording the public adequate notice and opportunity for

comment on these two changes. The court did not rule on the merits of

the revised standard. PSMRL II, Round III-VER, 22 ERC 1566-67. In

response, on November 20, 1986 (51 FR 41952, 41961), OSM suspended

paragraph (c) of the 1983 definition of VER. In the preamble to the

suspension notice, OSM stated that, pending adoption of a new rule, it

would rely upon the approved State program definition in primacy

States. In non-primacy States, the suspension had the effect of

restoring the 1979 version of the needed for and adjacent standard,

which did not contain a definition of ``needed for.'' 51 FR 41954-55,

November 20, 1986.

On July 18, 1991, OSM proposed to revise the 1983 definition by

reinstating the property rights ownership requirement and removing the

sentence defining the ``needed for'' component of the standard. In the

preamble to this proposed rule, OSM stated that the explanation of

``needed for'' in the 1983 definition did not substantively clarify the

meaning or application of the needed for and adjacent standard. In

addition, OSM proposed to replace the requirement that both the

property rights and the operation have been in existence on August 3,

1977, with a requirement that both have been in existence on the date

that the land for which the exemption is sought came under the

protection of 30 CFR 761.11 and section 522(e) of the Act. The latter

change reflects the concept of continually created VER, which was

upheld in NWF, supra, 839 F.2d 694, 750.

With two significant exceptions, the definition being proposed

today substantively resembles the one proposed on July 18, 1991. One

change clarifies that the standard applies to land, not just coal,

needed for an existing operation. Land may be essential to the

operation for reasons other than the coal it contains. For example, an

operator has little leeway in the location of ventilation shafts for

underground mines.

Also, OSM has attempted to eliminate any ambiguity caused by use of

the term ``ongoing surface coal mining operation'' in the 1979 and 1983

rules. In 1991, OSM essentially proposed to replace ``ongoing'' with

``existing.'' However, comments received indicated some uncertainty as

to whether this term included inactive or approved but unstarted

operations. OSM believes that there is no rational basis for

differentiating between active operations and those which are inactive

or approved but unstarted. Both engender the same type of investment-

backed expectations and rely upon the same economic planning

considerations. Both also require a significant resource outlay.

Accordingly, OSM is now proposing to define this standard to include

land needed for and adjacent to operations for which all permits had

been obtained, or a good faith effort to obtain such permits had been

made, as of the date the section 522(e) prohibitions became applicable

to the land in question.

Under the revised needed for and adjacent standard being proposed

today, VER would exist if a person can (1) make the property rights

demonstration required by paragraph (a) of the definition, and (2)

document that the land is both needed for and immediately adjacent to a

surface coal mining operation for which all State and Federal permits

and other authorizations required to conduct surface coal mining

operations had been obtained, or a good faith effort to obtain all

necessary permits and authorizations had been made, prior to the date

the land came under the protection of section 522(e) and 30 CFR 761.11.

OSM does not intend for this standard to authorize surface coal mining

operations on bond forfeiture sites, sites with expired or revoked

permits (including permits that have expired under section 506(c) of

SMCRA), abandoned sites, or long-dormant facilities for which no permit

was required prior to the enactment of SMCRA and which would have to be

substantially or completely reconstructed before usage could resume.

To avoid subverting the congressional prohibitions in section

522(e), OSM believes that VER determinations under this standard must

be based on an analysis of how denial of the claim would affect the

value, as of the date the land came under the protection of 30 CFR

761.11 and section 522(e), of the operation as a whole from the time it

began operation, not merely whether the additional land or coal would

prolong the operation's life or provide increased profits. Otherwise,

this standard could be used to justify unlimited expansion of

operations adjoining protected areas, which could effectively nullify

the prohibition. This approach receives implied support in PSMRL I,

ROUND I, 14 ERC 1083, 1091-92, in which the court upheld the needed for

and adjacent standard as a reasonable means of avoiding compensable

takings. OSM seeks comment on whether the rule language should be

revised to explicitly incorporate this interpretation.

[[Page 4846]]

6. VER for Access and Haul Roads

As in 1991, OSM is proposing to revise paragraph (b) of the

definition of VER to incorporate the concept of continually created

VER, which was previously promulgated as paragraph (d) of the September

14, 1983 definition and upheld in subsequent litigation. The revised

definition would recognize VER for the use or construction of an access

or haul road as part of a surface coal mining operation if (1) the road

was in existence on the date the land upon which it is located came

under the protection of section 522(e), (2) a right of way or easement

for the road was properly recorded as of that date, (3) the regulatory

authority had issued a permit for an access or haul road in that

location as of the applicable date, or (4) the person can demonstrate

the existence of VER under the standards of paragraph (a) of the

definition. The last alternative is a new addition intended to clarify

that, because the definition of surface coal mining operations in 30

CFR 700.5 includes access and haul roads, a person may also demonstrate

VER for such roads using the same criteria applicable to other types of

surface coal mining operations and activities.

OSM also is proposing to expand the scope of paragraph (b) to apply

to access roads. Previous versions of this definition have applied only

to haul roads. None of the earlier preambles explains why access roads

were not included, but a reading of the 1979 preamble suggests that

this failure may have been an accidental by-product of the fact that

the comments received focused exclusively on haul roads. That preamble

sets forth the following rationale for allowing existing roads to be

used as haul roads, regardless of location or prior use:

OSM believes that it is less damaging [to the environment] to

use existing roads, whether or not previously used for coal haulage,

than to require construction of additional roads. Therefore, all

roads in existence as of August 3, 1977, have valid existing rights.

44 FR 14993, March 13, 1979.

This line of reasoning would apply equally well to the use of

existing roads as access roads--perhaps more so, since roads used

solely for access generally involve less massive construction impacts

and are usually used less intensively than haul roads. Consequently,

the environmental impacts of access roads are usually less severe than

those associated with haul roads, which often carry heavy truck and

equipment traffic resulting in significant noise, dust, vibration, and

other problems. In addition, permits and recorded rights of way for

access roads are no less legitimate than permits and recorded rights of

way for haul roads. Accordingly, OSM is proposing to apply the

standards of paragraph (b) to both access and haul roads.

7. Transferability of VER

As in 1991, OSM is proposing to reaffirm that VER are transferable,

primarily because the proposed definition of VER includes a property

rights component. In essence, OSM is proposing to consider VER as being

attached to the property to which those rights pertain rather than as

being valid only for the person claiming such rights or, with the

exception of VER under the needed for and adjacent standard, for a

specific operation. (VER under the needed for and adjacent standard

would attach jointly to both the property and a specific surface coal

mining operation.) Once attached to the property, VER would become

subject to whatever State property law exists concerning rights of

alienation as an element of property ownership. SMCRA (especially

section 510(b)(6)) generally defers to State property law.

The VER exemption is analogous to a zoning variance, which, in the

interest of equity, allows an otherwise prohibited use to occur under

certain fact-specific circumstances even though that use was not in

existence on the land in question at the time the zoning ordinance took

effect. Like VER under the proposed rule, zoning variances typically

convey with the title to the property even if the rights conferred by

the variance have not been exercised.

However, the alienation or transfer of property is not an absolute

right. Certain interests in real property, such as leases, licenses or

profits a prendre, may be inherently nontransferable or of limited

transferability, either by their terms or by operation of State law. If

a person's coal property interests are of this nature, then any VER

resting on those interests would also be nontransferable. Furthermore,

it is possible that a State could designate VER under SMCRA as

nontransferable as a matter of law.

In the rule being published today, OSM is proposing to reaffirm the

transferability of VER to the extent that the underlying property

rights are transferable under State law. Therefore, to the extent that

State law allows the sale or other transfer of the underlying coal

rights or other pertinent property rights, a person with VER may sell

or transfer the VER to another person as an appurtenance to the coal or

other property rights. Nothing in this rule is intended to create

rights that do not already exist in State law or expand upon those that

do. Individual States may prohibit VER transfers to the extent that

they have the authority to do so under State law.

8. Continually Created VER: VER When Prohibitions Come Into Effect

After August 3, 1977

On September 14, 1983, OSM added paragraph (d) to the definition of

VER to address situations where the prohibitions of section 522(e)

become applicable to a particular parcel after August 3, 1977, the date

of enactment of SMCRA. This paragraph, which introduced the concept of

continually created VER, provides that:

Where an area comes under the protection of section 522(e) of the

Act after August 3, 1977, valid existing rights shall be found if--

(1) On the date the protection comes into existence, a validly

authorized surface coal mining operation exists on that area; or

(2) The prohibition caused by section 522(e) of the Act, if applied

to the property interest that exists on the date the protection comes

into existence, would effect a taking of the person's property which

would entitle the person to just compensation under the Fifth and

Fourteenth Amendments to the United States Constitution.

Paragraph (d)(1) extends the existing operation exemption to

validly authorized surface coal mining operations in existence on the

date the land on which they are located comes under the protection of

section 522(e). Paragraph (d)(2) was intended to extend the VER

exemption in a parallel manner to situations in which operations were

not yet in existence when the land came under the protection of section

522(e).

In PSMRL II, Round III-VER, the court upheld the basic concept of

continually created VER, but remanded paragraph (d)(2) because it

incorporated the takings standard, which, the court ruled, had not been

subject to proper notice and opportunity for comment under the

Administrative Procedure Act. 22 ERC 1564. To comply with the court's

decision, OSM subsequently suspended paragraph (d)(2) to the extent

that it incorporated the takings standard. 51 FR 41961, November 20,

1986.

The VER definitions proposed on December 27, 1988, and July 18,

1991, would have deleted paragraph (d) in favor of incorporating the

concept of continually created VER into each of the VER standards set

forth in the other paragraphs of the definition. However, this change

would have had the effect of eliminating continually created VER for

existing operations since the

[[Page 4847]]

proposed definitions included no counterpart to paragraph (d)(1) of the

1983 definition. This clearly was not the intent of the proposed rules.

As stated in the preamble to the 1991 proposal, although the

continually created VER provision adopted in 1983 ``is rewritten and

reorganized in this proposal, the basic intent and application are not

changed.'' 56 FR 33156, July 18, 1991.

Therefore, although the definition of VER being proposed today is

similar to the 1991 proposal in that the concept of continually created

VER has been incorporated into each of the individual VER standards in

paragraphs (a) and (b) of the definition, OSM also is proposing to

revise the existing operation exemption, now proposed for

recodification as 30 CFR 761.11(b), to incorporate language consistent

with paragraph (d)(1) of the 1983 definition. Specifically, proposed 30

CRF 761.11(b) provides that the prohibitions of 30 CFR 761.11(a) do not

apply to (1) surface coal mining operations for which a valid permanent

program permit exists on the date that the land came under the

protection of 30 CFR 761.11(a) or section 522(e) of SMCRA, or (2) other

surface coal mining operations that were validly authorized as of that

date. Further discussion of this proposed change appears in Part

III.E.1. of this preamble, which addresses the proposed revisions to 30

CFR 761.11 with respect to the existing operation exemption.

D. Section 761.5: Definition of ``Surface Coal Mining Operations Which

Exist on the Date of Enactment''

In a nonsubstantive editorial change, OSM is proposing to remove

the term ``surface coal mining operations which exist on the date of

enactment'' and its definition from 30 CFR 761.5. Application of the

concept of continually created VER to the existing operation exemption

will render this term obsolete. Two variations of this term appear in

the current versions of 30 CFR 761.12(h) and the introduction to 30 CFR

761.11, but they are not used in the revised version of Part 761 being

proposed today.

E. Section 761.11: Areas Where Mining Is Prohibited or Limited

OSM is proposing to reorganize and revise this section for clarity

and consistency with revisions to other sections of 30 CFR Part 761.

Except as discussed below, no substantive changes in meaning are

intended.

1. Existing Operation Exemption

As discussed in the portion of this preamble addressing continually

crated VER, OSM is proposing to recodify paragraph (d)(1) of the 1983

definition of VER, which establishes continually created VER for

operations in existence on the date that land comes under the

protection of section 522(e) after August 3, 1977, as part of the

existing operation exemption. In addition, because several commenters

on the 1991 proposal reflected confusion over the scope of the current

existing operation exemption, OSM is proposing to adopt clarifying

language. To accommodate these changes, OSM is proposing to move the

exemption from the introductory portion of 30 CFR 761.11 to a separate

paragraph (b) within the section.

Proposed 30 CFR 761.11(b) provides that the prohibitions of 30 CFR

761.11(a) do not apply to surface coal mining operations for which a

valid permanent regulatory program permit is in existence on the date

that the land comes under the protection of 30 CFR 761.11(a) or section

522(e) of the Act. To address situations in existence before completion

of the transition between the initial and permanent regulatory

programs, the rule further specifies that the exemption includes all

other validly authorized operations in existence as of that date,

although this provision has no prospective applicability apart from the

one remaining active initial program mine. Illegal (``wildcat'')

operations and operations for which the permit has expired or been

revoked do not qualify.

In all cases, the proposed rule limits the scope of the exemption

to lands for which the permittee or operator had the right under State

property law, as demonstrated in accordance with 30 CFR 778.15, to

enter and conduct surface coal mining operations as of the date the

land in question came under the protection of 30 CFR 761.11(a) or

section 522(e) of SMCRA. By limiting the existing operation exemption

in this fashion, the proposed rule effectively requires that the

permittee seek and obtain a VER determination before initiating surface

coal mining operations on any lands within the permit area for which no

right of entry has been obtained as of the date the land comes under

the protection of section 522(e). This additional step should ensure

that the permittee demonstrates possession of the necessary property

rights, including, when appropriate, a knowing waiver from the owner of

the protected feature in accordance with 30 CFR 761.11(a) (2), (3),

(4), or (5), before initiating surface coal mining operations in a

protected area.

On-site activity or physical disturbance of the protected land is

not a prerequisite for the exemption. This interpretation is consistent

with the underlying language in section 522(e), which exempts surface

coal mining operations ``which exist on the date of enactment of this

Act.'' Nothing in the term ``exist'' requires on-site activity or

physical disturbance. In addition, this interpretation is consistent

with the language of section 522(a)(6), which enumerates lands exempt

from designation as unsuitable for mining and which the legislative

history also characterizes as an existing operation exemption.

Specifically, section 522(a)(6) exempts all ``lands on which surface

coal mining operations are being conducted on the date of enactment of

this Act or under a permit issued pursuant to this Act * * *.'' The

legislative history of this provision states that ``an existing mine

might not be one actually producing coal.'' H.R. Rep. No. 218, 95th

Cong. 1st Sess. 94-95 (1977).

The proposed rule is consistent with the language of paragraph

(d)(1) of the 1983 VER definition, its preamble, and the rationale used

by the courts in upholding the concept of continually created VER. In

particular, the 1983 preamble states that paragraph (d)(1) was intended

to prevent the disruption of mining or deprivation of the right to mine

after the permittee made the substantial investments required to obtain

a permit. By way of explanation, the preamble stated that to do

otherwise would be totally inconsistent with the framework of

protection that SMCRA provides to both permittees and citizens:

Without the protection provided by this provision, it would be

possible, for instance, for a person who objected to a mining

operation to move a mobile home to the edge of the property

adjoining a mine, and occupy it, thereby forcing the operator to

cease all operations within 300 feet of this occupied dwelling. OSM

does not believe that this is the intended result of section 522(e)

of the Act. Congress provided the public ample opportunity to review

and make objections to any proposed mining operation through the

permitting process. The regulatory authority is required to seek and

consider the views of the public [before] it issues or denies a

permit. To allow any person the opportunity to take extraordinary

means to disrupt mining or deprive the operator of a right to mine

after the operator has made the substantial investments required to

obtain a permit and begin operations is totally inconsistent with

the framework of protection the Act gives to both operators and

citizens.

48 FR 41315, September 14, 1983.

OSM has adhered to these principles in developing the proposed

rule.

In upholding paragraph (d)(1) of the 1983 definition, the U.S.

Court of Appeals for the District of Columbia

[[Page 4848]]

Circuit relied primarily on language in the legislative history of

section 522 indicating that Congress intended to allow the continuance

of mines already in existence at the time land is determined to be

unsuitable for mining. The court held that this rule ``should apply

equally to mines in existence as of August 3, 1977, or to mines

subsequently started on lands which have permits approved for mining.''

NWF, supra, 839 F.2d 694, 750. The court rules that the operative

principle in determining whether an operation is exempt from the

section 522(e) prohibitions is whether it had been ``lawfully

established'' before the land came under the protection of section

522(e).

The rule being proposed today would consider an operation to be

lawfully established upon issuance of a permanent program permit for

lands for which the permittee has procured the necessary right of entry

under 30 CFR 778.15. This approach is consistent with 30 CFR 774.13,

which provides that the regulatory authority cannot summarily revise or

revoke an approved permanent program permit. Therefore, when lands

within an approved permanent program permit come under the protection

of section 522(e) after permit issuance, the permittee would appear to

have the right to continue to operate on those lands under the existing

operation exemption unless the regulatory authority orders the

permittee to revise the permit to remove those lands from the permit

area in accordance with the procedures and criteria of 30 CFR 774.13.

If a person believes that a permit has been improperly issued because a

protected feature came into existence prior to rather than after permit

approval, he or she has the option of either filing a timely challenge

to approval of the permit application or submitting a complaint to the

regulatory authority. If the permit is ultimately found to be

defective, the regulatory authority must require that the permittee

revise the permit in accordance with 30 CFR 774.13.

With respect to initial program operations (operations subject to

Subchapter B of 30 CFR Chapter VII) and operations conducted prior to

the effective date of the initial regulatory program, the existing

operation exemption includes all lands disturbed by the operation as of

the date the land came under the protection of section 522(e) or 30 CFR

761.11(a). However, except for one operation on Indian lands, OSM and

the States have completed the repermitting of initial program

operations in accordance with 30 CFR 773.11 and section 502(d) of the

Act. All initial program surface coal mining and reclamation operations

on non-Indian lands that were not repermitted under the permanent

program (and thus remain subject to the initial regulatory program) are

now abandoned, reclaimed, or in the process of reclamation. Under 30

CFR 773.11(a), no further coal removal or additional site disturbance

for purposes of conducting surface coal mining operations is

permissible unless the person first obtains a permanent program permit.

The existing operation exemption is similar to a nonconforming use

exemption under State zoning law in that the right to use the site for

a nonconforming use (in this case, the right to conduct surface coal

mining operations) is extinguished when the use (in this case, the

existing operation) ceases. Any person seeking to repermit the site of

an abandoned or reclaimed initial program operation must comply with

the prohibitions and restrictions of 30 CFR 761.11(a) as a prerequisite

for obtaining a permanent program permit.

Since all States with the potential for coal production in the

foreseeable future now have either a State or Federal regulatory

program approved under SMCRA, there will be no new surface coal mining

operations under the initial regulatory program. Therefore, in effect,

both the existing and proposed rules will be applied only to operations

with permanent program permits.

2. Removal of Paragraph (h)

As in 1991, OSM is proposing to remove 30 CFR 761.11(h), which

provides that no coal exploration or surface coal mining operations

would be licensed or permitted on Federal lands within the National

Park System, the National Wildlife Refuge System, the National System

of Trails, the National Wilderness Preservation System, the Wild and

Scenic Rivers System, or National Recreation Areas unless specifically

authorized by acts of Congress. OSM promulgated this provision on

September 14, 1983 (48 FR 41349), in response to numerous comments from

persons concerned that mining or drilling would occur in national parks

and other areas protected under section 522(e)(1) of the Act. Industry

subsequently challenged the rule on both procedural and substantive

grounds. Upon review, the court remanded the rule to the Secretary

because it found that he had failed to provide adequate notice and

opportunity for comment under the Administrative Procedure Act (5

U.S.C. 553). In its opinion, the court also noted that there appeared

to be no rational basis for distinguishing between Federal and non-

Federal lands in this context since section 522(e)(1) prohibits surface

coal mining operations on any lands within the statutorily protected

areas. PSMRL II, Round III-VER, 22 ERC 1557, 1565 (D.D.C. 1985).

On November 20, 1986, OSM suspended 30 CFR 761.11(h) to comply with

the court's order (51 FR 41952, 41956). As a result of the suspension,

neither Federal nor private lands are subject to the absolute

prohibitions found in 30 CFR 761.11(h).

On September 22, 1988, the Department of the Interior issued a

policy statement setting forth the actions the Department would take to

prevent surface coal mining operations in section 522(e)(1) areas. This

policy statement, which was published in the Federal Register at 53 FR

52384 on December 27, 1988, in conjunction with a previous proposed

rule concerning VER, remains in effect even though OSM subsequently

withdrew the proposed rule on July 21, 1989. The policy statement

commits the Department, subject to appropriation, to use available

authorities (including exchange, negotiated purchase and condemnation)

to seek to acquire mining rights within the areas listed in 30 CFR

761.11(h) whenever a person attempts to exercise VER. The policy

applies to all lands within the boundaries of the areas listed in

section 522(e)(1), not just to Federal lands.

The policy statement will not, and is not intended to, provide

protection equivalent to that afforded by 30 CFR 761.11(h). As the

court noted in its decision remaining paragraph (h), ``an absolute

proscription on any mining, permitting, licensing or exploration within

the 522(e)(1) protected areas might run directly contrary to the

statute's language that such proscriptions are subject to VER.'' PSMRL

II, Round III-VER at 1565.

Accordingly, OSM believes that it would be inappropriate to

repromulgate the prohibitions in paragraph (h). The 1988 policy

statement expresses the Secretary's intent to acquire privately held

coal interests in areas of national significance to the extent

financial or other resources are available to do so. Any further

commitment would, in most cases, exceed the Secretary's legal authority

since most land acquisition actions are subject to congressional

authorization and appropriation.

F. Section 761.12: Coordination With Permitting Process; Waiver

Requirements and Procedures

OSM is proposing only minor revisions and editorial changes in

[[Page 4849]]

Sec. 761.12. These revisions include correcting references to

Sec. 761.11, adding a reference to newly proposed Sec. 761.13,

combining existing paragraphs (a) and (b)(1) and revising them for

consistency with Sec. 761.11. In addition, to be consistent with

changes in terminology adopted as part of the permitting rules

promulgated on September 28, 1983 (48 FR 44349), OSM is proposing to

replace the obsolete term ``complete application'' in paragraph (a)

with its current equivalent, ``administratively complete application.''

OSM also is proposing to revise paragraph (a) to clarify that its

requirements apply to applications for incidental and other boundary

revisions. Although OSM always has interpreted the somewhat ambiguous

term ``application for a surface coal mining operation permit'' in 30

CFR 761.12 as including applications for all types of permit boundary

revisions, this change will remove any question as to its meaning.

Removal of this ambiguity should enhance adherence to the prohibitions

of section 522(e) and 30 CFR 761.11(a).

As in 1991, OSM is proposing to revise paragraph (c) to specify

that requests for the findings required prior to the approval of

surface coal mining operations on Federal lands in national forests may

be submitted in advance of, and separate from, the permit application.

OSM's experience in the 18 years since the enactment of SMCRA has shown

that evaluation of the entire permit application is not essential to

preparation of the requested findings. However, in response to a

concern raised by the U.S. Environmental Protection Agency about the

1991 proposal's complete lack of information requirements for such

requests, OSM is proposing to specify that the requester remains

responsible for submitting sufficiently comprehensive information about

the nature and location of the proposed operation to enable OSM and

other responsible parties to properly evaluate the request and prepare

adequately documented findings.

In 1991, OSM proposed to add a new paragraph (a)(1) to 30 CFR

761.12 to establish information requirements for requests for VER

determinations. However, section 761.12 pertains to permitting

requirements and procedures. Because the rules being proposed today

(like the preambles to both the 1983 final rule and the 1991 proposed

rule) state that requests for VER determinations may be submitted and

processed in advance of preparation and submission of a permit

application, OSM is now proposing to place these information

requirements in a new Sec. 761.13, which addresses only the submission

and processing of requests for VER determinations. For the same reason,

OSM also is proposing to move existing 30 CFR 761.12(h), the VER

determination appeal provisions proposed as 30 CFR 761.12(i) in 1991,

and the sentence in existing 30 CFR 761.12(b)(2) that pertains to

notification of the National Park Service and the U.S. Fish and

Wildlife Service to the new section.

G. Section 761.13: Submission and Processing of Requests for Valid

Existing Rights Determinations

This proposed new section consists of submission and documentation

requirements for requests for VER determinations; notice, comment,

public participation, and decision requirements for the processing of

requests for VER determinations; and provisions for administrative and

judicial review of decisions on requests for VER determinations. Major

portions of this section previously appeared in, or were proposed in

1991 for addition to, 30 CFR 761.12. Other portions were added in

response to comments received on the 1991 proposed rule or to provide

consistency with rule changes in other parts of 30 CFR Chapter VII.

These requirements are intended to provide the procedural framework

necessary to ensure that the prohibitions of section 522(e) are fully

and properly implemented in the manner intended by Congress. They also

should ensure that all affected persons receive equitable treatment and

have adequate notice and opportunity to participate in the

decisionmaking process.

1. Paragraph (a): Which Agency Will Process a Request for a VER

Determination?

Proposed 30 CFR 761.13(a) provides that OSM will make all VER

determinations for Federal lands within the boundaries of the areas

listed in 30 CFR 761.11(a) (1) and (2), which correspond to the areas

listed in paragraphs (e)(1) and (e)(2) of section 522 of SMCRA. VER

determinations for all other lands, including non-Federal lands within

the boundaries of the areas listed in 30 CFR 761.11(a)(1), would be the

responsibility of the regulatory authority.

These provisions are consistent with the exiting and proposed

Federal lands regulations at 30 CFR 740.4(a)(4) and 745.13(o), which

are discussed in Part III.A. of this preamble.

Consistent with the proposed changes to 740.11(g), the proposed

rule also specifies that the definition of VER in 30 CFR 761.5 applies

to all VER determinations for lands protected under 30 CFR

761.11.(a)(1) or (2), including non-Federal lands within the boundaries

of the areas listed in 30 CFR 761.11(a)(1), regardless of whether OSM

or the State is responsible for making the determination. For all other

lands, both OSM and State regulatory authorities must use the

definition of VER in the appropriate approved regulatory program.

2. Paragraph (b): What Information Must a Request for a VER

Determination Include?

Paragraph (b) of proposed 30 CFR 761.13 contains submission and

content requirements for requests for VER determinations. These

requirements are primarily derived from provisions proposed as 30 CFR

761.12(a)(1) on July 18, 1991, which, in turn, are similar to

guidelines set forth in the preamble to the 1983 definition of VER. See

48 FR 41314, September 14, 1983. However, because the proposed VER

definition no longer contains an explicit takings standard, the

proposed rule does not include items pertinent only to that standard.

Other modifications are intended to improve clarity, provide additional

specificity, and ensure that the rule includes requirements pertinent

to each standard in the definition of VER.

In keeping with the intent expressed in the preambles to the 1983

final rule (see 48 FR 41322, September 14, 1983) and the 1991 proposed

rule (see 56 FR 33161, July 18, 1991), proposed paragraph (b) expressly

states that a request for a VER determination may be submitted and

decided in advance of preparation and submission of a permit

application. Surface coal mining operations may not always be

technically feasible, legally permissible, or economically viable in

the absence of VER. Therefore, a requirement that requests for VER

determinations be accompanied by a permit application may be

unreasonably burdensome in that it could result in significant permit

application preparation expenditures that would be futile if the agency

ultimately determines that the requester does not have VER and

consequently is ineligible to receive a permit. This is especially true

of Federal lands within the boundaries of the areas specified in 30 CFR

761.11(a)(1) and (2), for which OSM has sole authority to process

requests for VER determinations even when it is not the regulatory

authority responsible for reviewing permit applications.

Nothing in the foregoing discussion should be interpreted as

meaning that

[[Page 4850]]

States may not require that requests for VER deteminations be

accompanied by a permit application. Sections 503 and 505 of SMCRA

afford States considerable discretionary authority to adopt

requirements that either have no Federal counterparts or are more

stringent than their Federal counterparts in achieving the requirements

and purposes of the Act. Furthermore, OSM also reserves the right to

require submission of a permit application if information in the

application is needed or useful in evaluating the request for a VER

determination.

The intent of the provision for advance VER determinations is to

allow VER questions to be fully settled in advance of permit

application preparation and review. Therefore, OSM anticipates that

advance VER determinations would be subject to de novo review during

the permit application review process only under exceptional

circumstances. Because the proposed rule establishes notice, comment,

and public participation reqirements for the submission and processing

of requests for VER determinations, the lack of opportunity for de novo

review of VER determinations when such determinations are part of a

subsequent permit application would not abridge violate the rights of

citizens to participate in the permitting process.

Circumstances that might justify reconsideration of an advance VER

determination include, but are not limited to, a material

misrepresentation of facts, discovery of new information that

significantly alters the basis of the VER determination, or a

substantial change in the nature of the intended operation (e.g., a

switch from underground mining methods to surface mining techniques).

If these circumstances arise after permit issuance, the regulatory

authority should, based upon written findings and subject to

administrative and judicial review, order that the permit be revised to

correct any deficiencies. See 30 CFR 774.11 (b) and (c). However, a

State regulatory authority may not reconsider or overturn a VER

determination made by OSM.

Because most of the VER standards for roads do not include the

property rights component of paragraph (a) of the definition of VER in

Sec. 761.5, proposed 30 CFR 761.13(b)(1) establishes special, more

limited information requirements for requests for VER determinations

for coal mine roads. Specifically, if the request is based on one of

the standards in paragraphs (b)(1) through (b)(3) of the definition of

VER in Sec. 761.5, the requester would have to submit satisfactory

documentation that (1) the road was in existence on the date the land

upon which it is located came under the protection of Sec. 761.11, (2)

a right of way or easement for the road was properly recorded as of the

date the land came under the protection of Sec. 761.11, or (3) the

regulatory authority had issued a permit for the access or haul road on

the land in question as of the date the land came under the protection

of Sec. 761.11(a). If the request is based on the standard in paragraph

(b)(4) of the definition of VER in Sec. 761.5, the requester would have

to comply with all other applicable information requirements since

paragraph (b)(4) merely incorporates the standards of paragraph (a) of

the definition.

All other requests for VER determinations would have to include the

information set forth in paragraphs (b)(2) (i) through (vi) of proposed

30 CFR 761.13 to demonstrate compliance with the property rights

component of paragraph (a) of the definition of VER in Sec. 761.5.

Specifically, these paragraphs would require a legal description of the

land; complete documentation of the character and extent of the

requester's current interests in the surface and mineral estates in

question; a chain of title and discussion of any title instrument

provisions concerning mining or mining-related surface disturbances or

facilities; a description of the nature and ownership of all property

rights for the surface or mineral estates in question as of the date

the land came under the protection of Sec. 761.11; and a description of

the type and extent of surface coal mining operations planned,

including the intended method of mining and any mining-related surface

facilities, and an explanation of how the planned operations are

consistent with State property law. If the coal interests have been

severed from other property interests and the surface estate is held by

a Federal agency, paragraph (b)(2)(v) would require submission of a

title opinion or other official statement from the Federal agency

confirming that the requester has a property right to conduct the type

of surface coal mining operations intended. This requirement is

intended to ensure that the record is adequate to determine whether a

property rights dispute exists.

Proposed 30 CFR 761.13(b)(2)(vii) provides that, if the request is

based on the needed for and adjacent standard set forth in paragraph

(a)(2) of the definition of VER in 30 CFR 761.5, the requester must

explain why and how the coal is needed for the operation. As several

commenters noted in response to the lack of a similar provision in the

1991 proposal, the agency will need this information to make an

informed decision on the request.

Proposed 30 CFR 761.13(b)(2)(viii) provides that, if the request is

based on the good faith/all permits standard set forth in paragraph

(a)(1) of the definition of VER in 30 CFR 761.5, the person making the

request must submit the application dates and identification numbers

and, if applicable, approval and issuance dates and identification

numbers for any licenses, permits, or authorizations for surface coal

mining operations on the land in question if such licenses, permits, or

authorizations are or were held or applied for by the requester or

predecessor in interest as of the date the land in question came under

the protection of 30 CFR 761.11. Examples of relevant permits include

State or Federal surface or underground coal mining permits, National

Pollutant Discharge Elimination System permits, State air pollution

control permits, and U.S. Forest Service special use permits, and (for

some types of facilities such as coal preparation plants and

ventilation housing for underground mines) building permits and zoning

approvals. The agency will need this information to make an informed

decision on the request.

3. Paragraph (c): How May the Public Participate in the VER

Determination Process?

Because section 102(i) of SMCRA provides that one of the purposes

of the Act is to assure that appropriate procedures are provided for

public participation in the development and enforcement of State and

Federal regulatory programs, OSM is proposing to include notice and

comment requirements and provisions for public participation in the VER

determination process, as suggested by several commenters on the 1991

proposal. The special protection Congress provided for the lands listed

in section 522(e) also lends support to public participation in the VER

determination process.

With minor modifications, the notice and comment requirements set

forth in proposed 30 CFR 761.13(c) parallel those currently in use by

OSM for VER determinations as a matter of policy. They also resemble

the notice and comment requirements for applications for coal

exploration permits under 30 CFR 772.12, which have been tailored to

minimize resource demands on affected parties while maintaining

consistency with the statutory provisions encouraging public

participation.

Under the proposed rule, an agency receiving a request for a VER

determination must publish a notice in

[[Page 4851]]

a newspaper of general circulation in the county in which the land is

located inviting comment on whether the request should be approved.

Because of the national significance of the areas listed in 30 CFR

761.11(a) (1) and (2), this notice also must appear in the Federal

Register if the request involves Federal lands within the boundaries of

those areas. (Under proposed 30 CFR 761.13(a)(2), OSM would have sole

responsibility for making VER determinations on those lands. Hence, the

Federal Register publication requirement would not place any added

burden on State regulatory authorities.) The notice must identify the

applicable VER standard, the location of the land involved, the name

and address of the agency office to which comments should be addressed,

and the closing date of the comment period, which must be a sufficient

amount of time after the date of publication so as to afford interested

persons a reasonable opportunity to prepare and submit comments. It

also must describe the property rights claimed, the basis for the

claim, the type of surface coal mining operations planned, and the

procedures the agency will follow in processing the request.

If the land in question involves severed estates or divided

interests, the proposed rule provides that the agency must make a

reasonable effort to locate all owners of interest, both surface and

mineral, and provide them with a copy of the notice. In addition, such

notification must be provided to the owner of the structure or feature

causing the lands to come under the protection of 30 CFR 761.11(a).

These proposed requirements are intended to provide full protection for

the listed lands consistent with section 102(b) of SMCRA, which states,

that one of the Act's purposes is to ``assure that the rights of

surface landowners and other persons with a legal interest in the land

or appurtenances thereto are fully protected from [surface coal mining]

operations.''

Finally, in paragraph (c)(3), OSM is proposing to provide that,

whenever a request for a VER determination pertains to land within the

boundaries of an area under the protection of 30 CFR 761.11(a)(1) and

section 522(e)(1), the agency responsible for processing the request

must notify the agency with jurisdiction over the protected land and

allow that agency 30 days from receipt of the notification to respond.

Upon request, the agency responsible for the VER determination must

grant the agency with jurisdiction over the protected area an

additional 30 days to review and comment upon the request. After that

time, the agency responsible for the VER determination would have the

right to make the determination in accordance with proposed 30 CFR

761.13(d).

A similar requirement currently appears in 30 CFR 761.12(b)(2),

where it applies only to lands within the jurisdiction of the National

Park Service or the U.S. Fish and Wildlife Service. OSM is proposing to

extend the consultation requirement to all lands protected under 30 CFR

761.11(a)(1) and section 522(e)(1) because there does not appear to be

a rational basis for limiting it to lands under the jurisdiction of the

two agencies identified in the current rule.

4. Paragraph (d): How Will a Decision Be Made?

Paragraph (d) of proposed 30 CFR 761.13 specifies requirements

pertinent to the decisionmaking process for requests for VER

determinations. OSM originally proposed a version of this paragraph as

part of 30 CFR 761.12(h) on July 18, 1991 (56 FR 33162, 33165). The

rule being proposed today includes additional language in response to

commenters' concerns regarding public participation issues and property

rights disputes.

Specifically, the proposed rule provides that the agency

responsible for making the VER determination must review the materials

submitted with the request, the information received during the comment

period, and any other relevant available information to determine

whether the record is adequate to support a decision in favor of the

requester. If not, the agency must notify the requester in writing,

explaining the inadequacy of the record and requesting submittal,

within a reasonable time, of any additional information the agency

deems necessary to remedy the inadequacy. Upon receipt of the requested

information or other explanation, the agency must determine whether the

requester has demonstrated VER for the land in question.

In keeping with the intent of Congress in enacting the prohibitions

of section 522(e), the agency processing requests for VER

determinations has an obligation to critically analyze such requests to

ensure that section 522(e) is fully implemented and that new surface

coal mining operations in these areas are prohibited except to the

extent that they qualify for one of the statutorily authorized waivers

or exemptions. The proposed rules establish the procedural requirements

and decision criteria needed to meet this obligation.

As currently proposed, 30 CFR 761.13(d)(2) includes a provision

requiring deferral of a decision on a request for a VER determination

if the underlying property rights are in dispute. The deferral would

remain in effect until the parties resolve the dispute in the proper

venue, which is normally the State courts. To do otherwise would

constitute de facto adjudication of the property rights dispute in

favor of one of the parties, a result that would violate the

prohibition on such adjudication in section 510(b)(6)(C) of SMCRA. In

addition, deferral of a decision in situations involving property

rights disputes is consistent with section 102(b) of SMCRA, which

states that one of the Act's purposes is to ``assure that the rights of

surface landowners and other persons with a legal interest in the land

or appurtenances thereto are fully protected from [surface coal mining]

operations.''

OSM does not interpret section 510(b)(6)(C) of SMCRA as requiring

deferral of a decision if there is only a mere allegation of a property

rights dispute. For example, if the parties to the alleged dispute are

not diligently pursuing resolution of the disagreement in the proper

venue, then, depending on the facts of the case, the agency processing

the request for a VER determination might reasonably conclude that the

lack of any serious attempt to resolve the dispute means that no bona

fide dispute exists and, therefore, that no deferral is necessary.

Finally, proposed 30 CFR 761.13(d)(3) specifies that the decision

document must (1) explain how the requester has or has not satisfied

all applicable elements of the definition of VER, (2) set forth the

relevant findings of fact and conclusions, and (3) specify the reasons

for the conclusions. Under the proposed rule, the agency must provide a

copy of the decision to the requester and the owner of (or agency with

jurisdiction over) the area or feature that caused the land to come

under the protection of 30 CFR 761.11(a). The agency would also have to

publish notice of the decision in a newspaper of general circulation in

the county in which the land is located. When Federal lands within the

areas listed in 30 CFR 761.11(a) (1) or (2) are involved. OSM would

publish notice of the decision in the Federal Register.

These requirements are similar to the procedures OSM has followed

in the past to ensure adequate notice and public participation in VER

determinations. OSM's experience indicates that the requirements are

not unduly burdensome and should afford adequate notice and opportunity

for adversely affected parties to appeal the decision. Federal Register

publication

[[Page 4852]]

of decisions on requests for VER determinations affecting Federal lands

within the boundaries of the areas listed in 30 CFR 761.11(a) (1) and

(2) is appropriate because these lands are of national significance.

Under proposed 30 CFR 761.13(d)(3)(ii), the Federal Register

publication requirement would apply only to OSM and only to Federal

lands.

5. Paragraph (e): How May a Determination Be Appealed?

Paragraph (e) provides that VER determinations are subject to

administrative and judicial review under 30 CFR 775.11 and 775.13,

which contain administrative and judicial review requirements for

permitting decisions. With respect to VER determinations, this

provision is substantively identical to both existing 30 CFR 761.12(h)

and 30 CFR 761.12(i) as proposed in 1991.

H. Section 772.12: Requirements for Coal Exploration on Lands

Unsuitable for Surface Coal Mining

As promulgated on September 8, 1983, the regulations at 30 CFR Part

772 governing coal exploration require that a person who intends to

conduct any type of coal exploration in areas designated as unsuitable

for surface coal mining operations in 30 CFR 761.11(a) and section

522(e) of SMCRA first obtain a permit in accordance with 30 CFR 772.12.

However, the 1983 regulations did not require a VER demonstration

either as a mandatory component of the permit application or as a

prerequisite for permit approval or issuance. On June 22, 1988 (53 FR

23532), OSM proposed to adopt a rule that would have done so, but the

final rule promulgated on December 29, 1988 (53 FR 52942) did not

include this provision. Instead, the preamble to that rule stated that

OSM would reconsider the issue of VER requirements for coal exploration

after promulgation of a new definition of VER (53 FR 52945).

The National Wildlife Federation and other groups challenged OSM's

failure to adopt the proposed rule. Upon judicial review, the U.S.

District Court for the District of Columbia held that OSM had failed to

articulate a proper rationale for not adopting the proposed rule. Nat'l

Wildlife Fed'n versus Lujan, Nos. 89-0504, 89-1221 and 89-1614, slip

op. at 25-33 (D.D.C. September 5, 1990). In response, on July 18, 1991

(56 FR 33152), OSM proposed to add paragraph (b)(5) to 30 CFR 772.14 to

require a VER demonstration as a prerequisite for approval of coal

exploration activities in which coal is to be removed for sale or

commercial use.

After considering the comments received, OSM is withdrawing this

proposed change and is instead proposing to add a new paragraph (b)(14)

to 30 CFR 772.12, the section containing permitting requirements for

exploration that will remove more than 250 tons of coal or that will

occur on lands designated as unsuitable for surface coal mining

operations. Under the proposed rule, a person planning to conduct

exploration on lands listed in section 522(e) and 30 CFR 761.11(a)

would have to submit an application that includes a demonstration that

(1) the exploration activities will not substantially disturb the

protected lands, (2) the owner of the coal possesses VER, (3) the

exploration is needed for mineral valuation purposes or is authorized

by judicial order, or (4) the applicant has obtained a waiver or

exception in accordance with 30 CFR 761.12 (c) through (f).

Similarly, OSM is proposing to add a new paragraph (d)(2)(iv) to 30

CFR 772.12 to provide that the regulatory authority may not approve an

application for exploration unless it first finds that the exploration

activities described in the application will not substantially disturb

any lands listed in 30 CFR 761.11(a). Alternatively, the regulatory

authority may find that the applicant has (1) demonstrated VER in

accordance with 30 CFR 761.13, (2) obtained one of the waivers or

exceptions authorized under 30 CFR 761.11(a) (2) through (5) in

accordance with 30 CFR 761.12 (c) through (f), or (3) demonstrated that

the exploration is needed for mineral valuation purposes or authorized

by judicial order.

OSM recognizes that nothing in SMCRA prohibits coal exploration on

lands designed as unsuitable for mining. The rule changes being

proposed today do not ban exploration on any lands. Instead, they

merely restrict the methods that may be used to conduct exploration on

lands protected under section 522(e) of the Act or the potential impact

of exploration on those lands.

Section 512(a) of the Act provides broad authority for the

promulgation of regulations governing coal exploration, and section

201(c)(2) authorizes the Secretary to ``promulgate such rules and

regulations as may be necessary to carry out the purposes and

provisions of this Act.'' As discussed below, the rules being proposed

today will further the purposes of section 522(e) of the Act.

Coal exploration involving substantial disturbance can result in

environmental impacts similar in both nature and extent to those

resulting from surface coal mining operations. The legislative history

of section 522(e) of the Act indicates that Congress' purpose in

enacting that section was to prevent new surface coal mining operations

in the areas listed therein, either to protect human health, safety,

and general welfare or because the environmental values and other

features associated with these areas are generally incompatible with

surface coal mining operations and their impacts. See S. Rep. No. 128,

95th Cong., 1st Sess. 94 (1977). In this context, allowing coal

exploration that would result in similar impacts appears generally

incompatible with congressional intent in the absence of VER or a

waiver or exception authorized under section 522(e).

OSM recognizes that there may be circumstances in which exploration

activities causing such impacts are unavoidable. Specifically, coal

exploration involving substantial disturbance (road construction to

provide access for a drill rig, for example) may sometimes be necessary

for mineral valuation purposes or to comply with a judicial order even

when there is no possibility of obtaining approval to conduct surface

coal mining operations. Accordingly, the proposed rules authorize

approval of a coal exploration permit under these circumstances.

However, all exploration activities must be planned and conducted in

accordance with the requirements and performance standards of 30 CFR

Parts 772 and 815, which are designed to minimize adverse environmental

effects.

Under proposed 30 CFR 772.12(b)(14)(ii), the VER determination

requirements and procedures of 30 CFR 761.13(a) through (d) would apply

to requests for VER determinations sought in connection with coal

exploration. All determinations would be subject to administrative and

judicial review in accordance with 30 CFR 761.13(e). The proposed

prohibition of certain types of coal exploration in the absence of VER

is intended to restrict the number of situations in which exploration

could cause impacts similar to those that would result from surface

coal mining operations. Specifically, it attempts to limit such

exploration to those lands for which a person has the right to conduct

surface coal mining operations. Therefore, OSM does not propose to

define VER in a different fashion or differentiate procedurally between

VER determinations sought in connection with plans to conduct surface

coal mining operations and those sought in connection with plans to

conduct coal exploration, regardless of the purpose of the exploration

or type of mining operations contemplated.

[[Page 4853]]

A VER determination obtained in connection with an application for

a coal exploration permit would remain valid for any subsequent

application seeking approval of a permit for surface coal mining

operations, provided the type of surface coal mining operations

proposed in the application is consistent with the type of operations

contemplated by the VER determination.

OSM acknowledges that exploration may sometimes be necessary to

determine the feasibility of using underground mining methods to remove

the coal underlying section 522(e) areas. Under current OSM policy,

only surface facilities associated with underground operations are

subject to the prohibitions of section 522(e). If no surface facilities

are to be located on the lands protected by section 522(e), a VER

determination is not a prerequisite for approval of a permit for an

underground mine. For the reasons set forth above, the proposed rule

would nevertheless require a VER determination as a prerequisite for

approval of exploration in advance of such a mine if the exploration

would involve substantial disturbance of the protected lands. This

requirement would apply regardless of whether the person proposing the

exploration planned to construct any surface facilities on the

protected lands. To protect the values for which Congress designated

certain lands as off-limits to surface coal mining operations, the

guiding principle in determining whether a VER determination is needed

for exploration should be the nature of the impacts of exploration on

the protected lands, not the type of mining operation ultimately

planned. Furthermore, OSM believes that, in most cases, the necessary

exploration activities can be conducted either on adjacent lands or by

using methods (such as core drilling from existing roads and pathways)

that do not result in substantial disturbance of the land surface.

OSM also is considering revising 30 CFR Part 772 (or possibly Part

761 or both) to include a provision similar to 30 CFR 762.14, which

provides that the regulatory authority has an obligation to use the

exploration permit application review and approval process to ensure

that exploration activities will not interfere with any of the values

for which the area has been designated unsuitable for surface coal

mining operations. (Section 762.14 applies only to lands designated

unsuitable for surface coal mining operations pursuant to the petition

process set forth in 30 CFR Part 762 and section 522(a) of the Act.)

OSM seeks comment on whether this provision should be adopted either in

addition to or in place of the proposed revisions to 30 CFR 772.12 set

forth in this rulemaking. As currently proposed, the rules would not

place these restrictions on exploration if the regulatory authority

determines that a person has VER or qualifies for one of the other

exemptions in 30 CFR 772.12(b)(14).

Finally, as a housekeeping measure, OSM is proposing to revise 30

CFR 772.12(d)(2)(ii) and (iii) to correct a citation to the Endangered

Species Act and to add a reference to the National Historic

Preservation Act Amendments of 1992 in Public Law 102-575.

I. Effect in Federal Program States and on Indian Lands

Through cross-referencing in the respective regulatory programs,

this proposed rule would apply to all lands in States with Federal

regulatory programs. States with Federal regulatory programs include

Arizona, California, Georgia, Idaho, Massachusetts, Michigan, North

Carolina, Oregon, Rhode Island, South Dakota, Tennessee, and

Washington. These programs are codified at 30 CFR Parts 903, 905, 910,

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

The proposed changes to 30 CFR Part 761 would apply to Indian lands

by virtue of the incorporation of this part by reference in 30 CFR

750.14. The proposed changes to 30 CFR Part 772 would apply to coal

exploration on Indian lands to the extent provided in 30 CFR 750.15.

In the preamble to the 1991 proposed rule, OSM invited the public

to comment on whether there are unique conditions in any Federal

program States or on Indian lands that should be reflected in the

national rules or as specific amendments to the Federal programs or

Indian lands rules. Since no commenters identified any unique

conditions or amendment needs, the rules being proposed today do not

include any changes to the Indian lands rules or individual Federal

programs. However, the public is again invited to comment on whether

any such changes would be necessary if OSM adopts the proposed rules.

J. Effect on State Programs

If the proposed rules are adopted, OSM will evaluate State

regulatory programs approved under 30 CFR Part 732 and section 503 of

the Act to determine whether any changes in these programs will be

necessary to maintain consistency with Federal requirements. If the

Director determines that a State program provision needs to be amended

as a result of these revisions to the Federal rules, he will notify the

State in accordance with 30 CFR 732.17.

In the preamble to the 1991 proposed rule, OSM solicited comments

on whether State program VER definitions must be amended to include

standards identical to those of the revised Federal definition to be no

less effective than the revised Federal definition. 56 FR 33156, July

18, 1991. Because the standards proposed today differ somewhat from

those proposed in 1991, OSM once again invites comment on the need for

revision of State program definitions of VER if the definition in 30

CFR 761.5 is adopted as proposed. OSM particularly seeks comment on

whether those States with an approved takings standard should be

required to remove this standard or whether the rationale OSM relied

upon to approve the takings standard in the Illinois definition remains

valid. (See 30 CFR 917.15(j) and 54 FR 123, January 4, 1989.) In other

words, may the takings standard be considered no less effective than

the good faith/all permits standard in achieving the purposes and

requirements of the Act even though it balances the purposes in a

different manner with potentially different results?

IV. Procedural Matters

A. Federal Paperwork Reduction Act

In accordance with 44 U.S.C. 3507(d), OSM has submitted the

information collection and recordkeeping requirements of 30 CFR Parts

761 and 772 to the Office of Management and Budget (OMB) for review and

approval.

30 CFR Part 761

Title: Areas designated by Act of Congress.

OMB Control Number: 1029-0102.

Abstract: Part 761 includes criteria and procedural requirements

for waivers and exemptions (including the VER and existing operating

exemptions) from the prohibition on conducting surface coal mining

operations in the areas specified in section 522(e) of SMCRA. This part

identifies the documentation persons need to provide to demonstrate

possession of or eligibility for a waiver or exemption. It also

establishes review and notification requirements and decision criteria

for the agency responsible for making decisions on requests for VER

determinations.

Need for and Use: OSM and State regulatory authorities use the

information collected under 30 CFR Part 761 to ensure that persons

planning to conduct surface have the right to do so

[[Page 4854]]

under one of the exemptions or waivers provided by this section of the

Act.

Respondents: Persons who prepare the approximately 475 applications

for permits for surface coal mining operations that OSM and State

regulatory authorities receive each year, and the 24 State regulatory

authorities who must evaluate the validity of waiver and exemption

claims and requests for VER determinations that accompany or precede

these applications.

Total Annual Burden: OSM estimates that a person will need an

average of 6 hours to prepare each request for a VER determination

under 30 CFR 761.13. The agency responsible for processing the request

will require an average of 8 hours to comply with the information

collection requirements of these section, resulting in an average total

burden of 14 hours for each request. Under 30 CFR 761.12, preparation

and processing of requests for other types of exemptions and waivers

will require an average of 2 hours per request. The estimated total

annual burden for part 761 is 2,366 hours.

30 CFR PART 772

Title: Requirements for coal exploration.

OMB Control Number: 1029-0033.

Abstract: Section 512 of SMCRA provides that persons conducting

coal exploration on non-Federal lands must comply with exploration

regulations issued by the regulatory authority. Section 512(d) of the

Act requires a permit and the prior approval of the regulatory

authority for exploration removing more than 250 tons of coal; 30 CFR

Part 772 extends this requirement to all exploration on lands

designated as unsuitable for surface coal mining operations. For all

other types of exploration, the Act and regulations require submission

of a notice of intent to explore. The regulations in 30 CFR Part 772

establish content requirements for notices of intent, content and

processing requirements for applications for coal exploration permits,

and recordkeeping requirements for regulatory authorities.

Need For and Use: OSM and State regulatory authorities use the

information collected under 30 CFR Part 772 to maintain knowledge of

coal exploration activities, evaluate the need for an exploration

permit, and ensure that exploration activities comply with the

environmental protection and reclamation requirements of 30 CFR Parts

772 and 815 and section 512 of SMCRA.

Respondents: Persons who prepare the approximately 1,225 notices of

intent to explore and 4 applications for coal exploration permits

received each year by OSM and State regulatory authorities. Also, the

24 State regulatory authorities that process notices of intent and

applications for exploration permits.

Total Annual Burden: The estimated annual burden for this part

totals 13,354 hours, which translates to an approximate burden of 11

hours for the average notice of intent (10 hours to prepare the notice

and 1 hour for the regulatory authority to review and file it), and 104

hours for the average application for a coal exploration permit (70

hours to prepare the application and 34 hours for the regulatory

authority to process and file it). See 30 CFR 772.10 for a section-by-

section burden summary for this part.

Comments are invited on:

(a) Whether the proposed collection of information is necessary for

the proper performance of OSM and State regulatory authorities,

including whether the information will have practical utility;

(b) The accuracy of OSM's estimate of the burden 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.

Under the Paperwork Reduction Act, OSM must obtain OMB approval of

all information and recordkeeping requirements. No person is required

to respond to an information collection request unless the form or

regulation requesting the information has a currently valid OMB control

(clearance) number. These numbers appear in section xxx.10 of 30 CFR

Parts 710 through 955. To obtain a copy of OSM's information collection

clearance requests, explanatory information, and related forms, contact

John A. Trelease at (202) 208-2783 or by e-mail at [email protected].

By law, OMB must submit comments to OSM within 60 days of

publication of this proposed rule, but may respond as soon as 30 days

after publication. Therefore, to ensure consideration by OMB, you must

send comments regarding these burden estimates or any other aspect of

these information collection and recordkeeping requirements by March 3,

1997, to 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 Numbers 1029-0033

and 1029-0102 in any correspondence.

B. Executive Order 12866

The proposed rule is a significant regulatory action under section

3(f) of Executive Order 12866. Accordingly, OSM has prepared a cost/

benefit assessment (economic analysis) of the rulemaking alternatives

pursuant to section 6(a)(3)(C) of the executive order.

C. Regulatory Flexibility Act

Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 601 et seq.,

the Department of the Interior has determined that this proposed rule

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

small entities. See 50 FR 13250 (April 3, 1985). A small entity

flexibility analysis has been prepared and placed in the administrative

record of this rulemaking.

D. Unfunded Mandates

For purposes of compliance with the Unfunded Mandates Reform Act of

1995, this rule will not impose any obligations that individually or

cumulatively would require an aggregate expenditure of $100 million or

more by State, local, and Tribal governments and the private sector in

any given year.

E. National Environmental Policy Act (NEPA)

On April 3, 1985 (50 FR 13250), OSM published a notice of intent to

conduct rulemaking on the applicability of the section 522(e)

prohibitions to underground mining. On June 19, 1985 (50 FR 25473), OSM

announced the agency's intent to prepare an environmental impact

statement (EIS) pursuant to section 102(2)(C) of NEPA, 42 U.S.C.

4332(2)(C) for this rulemaking. OSM held scoping meetings for the EIS

on August 1, 1985, in Pittsburgh, Pennsylvania; August 6, 1985, in St.

Louis, Missouri; and on August 9, 1985, in Washington, D.C. to obtain

public input. Written comments on the scope of the EIS were accepted

separately through September 10, 1985.

Based on the comments received and the March 22, 1985, decision in

PSMRL II, Round III-VER remanding the definition of VER, OSM decided to

conduct a combined analysis of the rulemaking alternatives for both VER

and the applicability of the section 522(e) prohibitions to underground

mining. OSM announced its intent in another scoping notice published on

January 22, 1987 (52 FR 2421). OSM also held a meeting on February 6,

1987, to solicit further input on the rulemaking alternatives and the

scope of the EIS from the public and potentially affected Federal

agencies. On February

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23, 1987, OSM held another meeting to receive testimony from

environmental groups and other organizations unable to attend the

earlier meeting.

On December 27, 1988 (53 FR 52374), OSM published a draft EIS and

regulatory impact analysis concurrently with a proposed rule addressing

both VER and the applicability of the prohibitions to subsidence from

underground mining. On July 21, 1989 (54 FR 30557), OSM withdrew the

proposed rule.

On April 19, 1991 (56 FR 16111), OSM published a revised draft EIS

for review and comment, followed by a new proposed VER rule on July 18,

1991 (56 FR 33152) and, on the same date, a notice of inquiry

concerning the applicability of the prohibitions to underground mining.

OSM never finalized the VER rule, electing instead to develop the

new proposed rule being published today. On April 28, 1994 (59 FR

21996), OSM published a notice of intent to prepare a revised EIS

analyzing both VER and the applicability of the prohibitions to

underground mining. After analyzing the comments received, OSM has

completed a new draft EIS (OSM-EIS-29), which is now available to the

public for review and comment.

F. Executive Order 12630 (Takings)

In accordance with E.O. 12630 (March 18, 1988), and the ``Attorney

General's Guidelines For the Evaluation of Risk and Avoidance of

Unanticipated Takings,'' dated June 30, 1988, the Department has

prepared a takings implication assessment, which has been made a part

of the administrative record for this rulemaking, and is set forth

below:

Section 5221(e) of SMCRA provides that, subject to VER (and with

certain other specified exceptions), no surface coal mining operations

shall be permitted on certain lands designated by Congress. As stated

in the preceding sections, the proposed rule defining VER would

establish a GFAP standard for VER under section 522(e).

Under the GFAP standard, a person would have VER if, prior to the

date the land came under the protection of section 522(e), the person

or a predecessor in interest had all necessary property rights and had

obtained, or made a good faith effort to obtain all State and Federal

permits and other authorizations required to conduct surface coal

mining operations.

The proposed rule may have some significant, but unquantifiable,

takings implications. OSM expects that the proposed rule would not be

found by a court to constitute a per se taking, since that issue was

litigated in 1979-80.

1. No Per Se Takings

It is unlikely that the GFAP standard would be determined to

constitute a taking per se. This standard is a modification of the All

Permits standard adopted on March 13, 1979, which required that a

person demonstrate valid issuance by August 3, 1977, of all necessary

State and Federal permits.

The rule was challenged in In Re: Permanent Surface Mining

Regulation Litigation I, No. 79-1144 (D.D.C. February 26, 1980), 14

Env't Rep. Cas. 1083, as effecting a compensable taking of property.

While the court declined to address the constitutionality of the VER

definition, it found that a person who applies for all permits, but

fails to receive one or more through government delay, engenders the

same investments and expectations as a person who has obtained all

permits. Therefore, the court found that a good faith attempt to obtain

all permits before August 3, 1977, should suffice for purposes of VER.

The court remanded to the Secretary that portion of the definition that

required the property owner actually to have obtained all permits

necessary to mine.

2. Likelihood of Compensable Takings

In evaluating taking claims for compensation concerning government

regulatory actions, the courts have typically considered three factors

on a fact-specific, case-by-case basis: the character of the

governmental action, the economic impact of the action, and the extent

to which the government action interferes with reasonable investment-

backed expectations. See Penn Central Transportation Co. v. New York

City, 438 U.S. 104, 124 (1977). Because of the scope of the proposed

rule and the lack of information on specific property interests that

might be affected, this assessment cannot predict or evaluate the

effects of the proposed rule on property rights. Instead, the

assessment will discuss generally the anticipated impacts of the

proposed rule, and compare them to the impacts of the other

alternatives considered.

a. Character of the governmental action. The purpose served and the

statutory provisions implemented by this proposed rulemaking are

discussed in the preamble to the proposed rule. The proposed rule

substantially advances a legitimate public purpose. The legitimate

public purpose is the implementation of the protections for specified

areas set forth in section 522(e) of SMCRA. In that section, Congress

determined that subject to certain exceptions, including valid existing

rights, surface coal mining is prohibited on specified lands because

such mining is incompatible with the values for which those lands were

designated as unsuitable for surface coal mining operations.

The proposed rule substantially advances that purpose by providing

that the VER exception for mining in those protected areas applies only

to the extent that a person can demonstrate that a good faith effort

had been made to obtain all required permits for a surface coal mining

operation before the area came under the protection of section 522(e).

The proposed definition of VER thus advances the regulatory scheme

Congress developed to prevent the harms which surface coal mining

operations would cause in those areas.

OSM does not know of any other property use or actions that would

significantly contribute to the problems caused by surface coal mining

operations in such areas.

b. Economic impact. Use of the GFAP standard or the All Permits

standard by 20 States (and for a number of years, by OSM) has not

resulted in any compensation awards to date, nor has it resulted in any

financial compensation in those instances where the application of the

standard by OSM has resulted in litigation, as discussed below.

Therefore, OSM believes that adoption of a GFAP standard will not

result in any change in the Government's financial exposure relative to

the current situation.

The property interests that could be affected by this rule are coal

rights in section 522(e) areas. It cannot be determined in advance

which coal rights would be affected by the eventual application of this

proposed rule, or what value those rights would have. There is no data

base that definitively or reliably lists all properties protected under

section 522(e), or the nature or extent of individual coal rights

included in such areas. Such a list would not remain current for any

appreciable time because individual properties would be added or

removed on a continual basis as protected features come into existence,

evolve, and sometimes disappear. Even if it could be determined which

coal rights are subject to section 522(e), it cannot reliably be

predicted which coal an owner might seek to mine or for which a VER

determination would be necessary. Because takings determinations are

case-specific, OSM cannot predict all the factors necessary to

determine whether a denial of VER would constitute a compensable

taking.

For purposes of this assessment, the evaluation of potential

economic impact

[[Page 4856]]

utilizes in part the analyses set out in the Draft Environmental Impact

Statement (DEIS) (OSM-EIS-29, September 1995) and Draft Economic

Analysis (EA) (September 1, 1995) for the proposed rule. The DEIS and

EA discussions of the alternatives summarize the number of acres

estimated to be disturbed under each VER alternative over a 20-year

period. Because of the difficulty in predicting the actual mining in

protected areas under this rule, OSM could not predict the actual

impacts of the alternatives. To provide a basis for comparing the

relative environmental and economic impacts of the proposed rule and

the alternatives, OSM developed impact estimates by using a model that

relied on specific methodologies and assumptions.

Therefore, the DEIS and EA estimates of coal acreage that could be

mined under the GFAPT alternative and the other alternatives are

relevant to this assessment only to the limited extent that they show

the anticipated relative economic impacts of the proposed rule,

compared to the other alternatives. Tables V-1 through V-5 of the DEIS

show relative amounts of coal acreage estimated to be mined over a 20-

year period under the different alternatives, as calculated using the

model.

Generally speaking, these analyses assume that relatively few

persons would be able to demonstrate VER under a GFAP standard; that,

for some categories of lands, more persons might be able to demonstrate

VER under a GFAPT standard, and that in some cases, even more persons

might be able to demonstrate VER under an O&A standard. The analyses

further assume that the impacts of a Bifurcated standard would be

somewhere between the impacts of the GFAP standard and those of the O&A

standard.

In general, the GFAP standard is more likely to limit surface coal

mining operations. As a result, more takings claims would be expected

to be filed under a GFAP standard. Whether courts would find that a

negative VER determination under the GFAP standard constituted a

compensable taking should turn on the specific property rights

involved.

For purposes of evaluating the economic impact of the proposed

rule, OSM surveyed historical permitting information, relevant

litigation, and the DEIS and EA analyses of anticipated mining impacts

in individual section 522(e) categories of lands.

Historical data: Currently, five States use the All Permits

standard and 15 use the GFAP standard. Two States use a Takings

standard, one uses only the Needed for and Adjacent standard, and one

State has no VER definition. OSM is not aware of any instance in which

the States' use of these standards has resulted in a judicial

determination of a compensable takings. Therefore, history does not

suggest that the promulgation of a GFAP standard would result in a

significant number of takings compensation awards. While the likelihood

of some degree of financial exposure exists, the use of the GFAP

standard or the All Permits standard by 20 States (and for a number of

years, by OSM) has not resulted in any compensation awards to date, nor

has it resulted in any financial compensation in those instances where

the application of the standard by OSM has resulted in litigation, as

discussed below. Therefore, based on the above data, OSM believes that

the adoption of a GFAP standard will not result in any change in the

Government's financial exposure.

Litigation on use of a GFAP standard: The question of whether

application of the GFAP standard for VER effects a compensable taking

was examined by the court in Sunday Creek Coal Co. v. Hodel (``Sunday

Creek''), No. 88-0416, Slip op. (S.D. Ohio June 2, 1988). In Sunday

Creek, applying Ohio's equivalent of the GFAP standard of VER, OSM

denied the plaintiff's VER request. The court ruled that OSM's

application of Ohio's VER standard would deprive Sunday Creek of its

property rights in violation of the Fifth Amendment. The court

therefore reversed OSM's negative VER determination. In another case

that considered the question of VER, Belville Mining Co. v. United

States (``Belville II''), No. C-1-89-874 (S.D. Ohio), the court simply

assumed that if an applicant could demonstrate a right to strip mine,

then denial of VER would constitute a ``taking'' of that applicant's

interest. These two decisions indicate that, at least in Ohio, a

Federal court would be likely to find that application of the GFAP

standard for VER would effect a compensable taking.

Summary of takings implications for section 522(e) lands: Based

upon available information, including the DEIS and EA for the proposed

rule, and a survey of permits, the following takings impacts from the

proposed rule are anticipated.

Section 522(e)(1) lands: These areas include National Park lands,

National Wildlife Refuge lands, National Trails, National Wilderness

Areas, Wild and Scenic Rivers and study rivers, and National Recreation

Areas. OSM anticipates relatively few takings impact in (e)(1) areas

because there has been a relative dearth of VER determinations and any

resulting takings claims concerning (e)(1) areas in the last 18 years.

Further, as previously discussed, the Secretary's 1988 policy

concerning exercise of VER in (e)(1) areas remains in effect. That

policy states that, if a person acts to exercise VER on (e)(1) lands,

then, subject to appropriation, the Secretary will use available

authorities to seek to acquire the rights through exchange, negotiated

purchase or condemnation.

All of this suggests that there may continue to be few VER

requests, little economic impact, few takings cases, and even fewer

takings awards in (e)(1) areas.

Surface mining: As discussed in the EA, OSM anticipates that in

many cases a compensable taking for denial of VER to surface mine would

not be found, because the requisite property right to surface mine coal

could not be demonstrated. And in many cases, if VER for surface mining

were denied, underground mining would still be a reasonable remaining

use of the coal, so a takings award would not be likely for denial of

VER to surface mine in section 522(e)(1) areas.

Underground mining: The related OSM rulemaking concerning

applicability of section 522(e) prohibitions to subsidence proposes

that the prohibitions would not apply to subsidence. Therefore, OSM

expects that any takings award for denial of VER for underground mining

would be limited to coal that could not be mined from portals outside

the (e)(1) area.

Section 522(e)(2) lands: These areas consist of Federal lands

within national forests. OSM anticipates relatively few takings from

VER determinations on (e)(2) lands.

Surface mining: OSM anticipates that no takings claims would arise

out of application of the proposed VER standard in surface mining VER

determinations in the western national forests and national grasslands.

This is because coal owners in the western (e)(2) areas have never

pursued surface mining VER determinations, but rather have obtained

compatibility determinations under section 522(e)(2). OSM does

anticipate that some acreage might be precluded from surface mining,

and some takings claims might arise, concerning surface mining VER

determinations in the eastern national forests.

For surface coal mining, OSM expects that a compensable taking will

be unlikely if underground mining is an economically and technically

feasible alternative (because if VER were denied

[[Page 4857]]

for surface mining, most owners could qualify for a compatibility

exception for underground mining, so underground mining would be a

reasonable remaining use). As discussed in the DEIS and EA, OSM

anticipates that in a substantial number of cases (a higher proportion

in the eastern coal fields), a court would find no property right to

surface mine under State property laws. This is because the coal in

many cases was severed from the surface rights relatively early, when

surface mining was not common at the time and place of severance. As a

result, under State property law, typically the coal owner would not

have the necessary right to surface mine. OSM does not have information

on actual dates of severance of coal rights. (There might also be

mitigation of takings in those limited instances where the United

States decides to purchase coal rights.)

Underground mining: The (e)(2) compatibility determination

exception would continue to apply. Therefore, OSM would expect few

takings claims from denial of VER for underground mining in national

forests, because OSM assumes that virtually all underground mining

could qualify for a compatibility determination. This is based in part

on the fact that the Multiple-Use Sustained Yield Act and the National

Forest Management Act establish multiple use as the guiding principle

for management of national forest lands, and in part on the fact that,

in the past, requests for compatibility determinations have never been

denied. Surface operations and impacts associated with underground

mining generally disturb only a relatively minimal amount of the land

surface. Roads and surface facilities can generally be sited in such a

way as to avoid significant impacts on other land uses such as timber

production, livestock grazing, and recreation.

Section 552(e)(3) lands: These areas include lands where surface

coal mining operations would adversely affect a publicly owned park or

site on the National Register of Historic Places. OSM does not

anticipate that any significant takings would occur on (e)(3) lands as

a result of surface or underground mining VER determinations. Pursuant

to (e)(3), jurisdictional agencies, together with the regulatory

authority, may approve mining in the vicinity of protected areas, and

thus waive the prohibition of (e)(3). A sampling of permit records

indicated that some such mining has occurred, but no VER requests were

located for such areas. Therefore, OSM anticipates that, in many cases,

operations may avoid such sites or resolve any jurisdictional agency

concerns about mining impacts, so that the jurisdictional agency and

the regulatory authority would jointly approve mining pursuant to

(e)(3). In such cases, a VER determination would be unnecessary.

Section 522(e)(4) lands: These areas include lands within one

hundred feet of the right of way of a public road. OSM anticipates

relatively few takings claims concerning VER determinations for (e)(4)

areas. Coal mines now tend to avoid urban areas (where many roads and

streets are located) because of increased acquisition and public

safety-related costs of mining in such areas. In the vast majority of

cases, an exception of the prohibitions of (e)(4) is obtained under the

waiver provision of (e)(4), rather than through a VER determination.

Therefore, OSM does not expect the choice of a VER standard to have a

major effect on takings claims for coal located under roads. As noted

above, OSM's survey of permitting data located only a few instances of

VER determinations for (e)(4) areas.

Section 522(e)(5) lands: These areas include lands within 300 feet

of an occupied dwelling, public building, school, church, community or

institutional building, or public park, or within 100 feet of a

cemetery. OSM anticipates relatively little economic impact for takings

purposes on (e)(5) areas other than (e)(5) public park lands.

The survey of permit file

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