# Valid Existing Rights

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URL: https://www.frixlaw.com/law-library/documents/fr%3A97-2184

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** January 31, 1997
- **Citation:** 62 FR 4836

## Text

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, 19

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A97-2184. Public record. Not legal advice.