Coal Moisture; Republication

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

is amending its regulations governing how the excess moisture allowance

is determined for reclamation fee purposes. This action defines terms

and phrases related to the collection and testing of coal samples used

to determine the inherent and total moisture of coal; identifies

acceptable American Society for Testing and Materials (ASTM) standard

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

frequencies for collecting and testing coal samples; and provides the

coal industry with formulas for use in calculating an excess moisture

tonnage allowance for the purpose of reducing the weight of coal

subject to the abandoned mine land reclamation fee.

The regulatory revision clarifies and simplifies technical guidance

for all users, and provides the coal industry with standard criteria

for calculating an excess moisture allowance on all coals subject to

reclamation fee payment. The intended effect of this revision is to

enhance compliance with the provisions of section 402 of the Surface

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

prescribed criteria will ensure that all tonnage reductions for excess

moisture are taken on comparable bases.

EFFECTIVE DATE: This regulation is effective October 1, 1997. The

incorporation by reference of certain publications listed in the

regulations is approved by the Director of the Federal Register as of

October 1, 1997.

FOR FURTHER INFORMATION CONTACT: Dr. Kewal Kohli, Office of Surface

Mining Reclamation and Enforcement, 3 Parkway Center, Pittsburgh, PA

15220; telephone (412) 937-2175.

SUPPLEMENTARY INFORMATION:

I. Background

II. Discussion of Final Rule and Responses to Comments

A. Section 870.5--Definitions.

B. Section 870.18--General rules for calculating excess

moisture.

C. Section 870.19--How to calculate excess moisture in HIGH-rank

coals.

D. Section 870.20--How to calculate excess moisture in LOW-rank

coals.

III. Procedural Matters

I. Background

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

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

ton of coal produced. In December 1977, OSM first promulgated

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

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

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

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

involving the coal. This regulation has been in effect basically

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

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

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

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

impurities physically removed before the sale, transfer of ownership,

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

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

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

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

Initially, OSM adopted the excess moisture allowance to address an

inconsistency in the methods of determining coal weight under various

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

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

on Coal and Coke, whose membership included representatives of the

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

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

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

D1412-85, as it applied to all coals. In a letter of November 18, 1987,

the IRS submitted the following comment in response to the OSM

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

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

As an interim measure, until adequate and fully reliable testing

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

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

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

take an allowance for excess moisture provided the operator could

demonstrate, through competent evidence, that there was a reasonable

basis for determining the existence and amount of excess moisture.

OSM's standard of reasonableness required an operator to provide

sufficient documentation to sustain the weight reduction. Although no

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

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

amount of excess moisture were reasonable.

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

the ASTM standard test methods to determine inherent moisture, ASTM

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

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

always reliable for this purpose and acknowledged its willingness to

accept other testing methods for some subbituminous and lignite coals.

OSM also stated its intent to develop technical guidance to assist

operators and to assure uniform application of the excess moisture

allowance throughout the industry.

The final rule which OSM adopted in 1988, at 30 CFR 870.18, allowed

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

reclamation fee payment by a percentage of excess moisture estimated to

be contained in the coal at the time of fee assessment. OSM

subsequently issued five AML Payer Letters to provide technical

guidance to the coal industry and assist with the application of this

regulation. OSM also published the guidance in the OSM Payer Handbooks.

OSM's audits of excess moisture reduced tonnages find that

operators frequently fail to conform to inherent moisture test

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

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

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

be unreliable.

On December 3, 1996 (61 FR 64220), OSM published its proposal for

revising the rule in the Federal Register. The public comment period

closed on February 3, 1997.

[[Page 60139]]

II. Discussion of the Final Rule and Responses to Comments

Five commenters commented on the proposed rule revision: two coal

companies, a trade association, a law firm representing a coal company,

and an industry consulting firm. The majority of the commenters

supported the intent of consolidating previous guidance into a single

rulemaking, but expressed various concerns on specific issues.

Based on the comments received, OSM is revising its regulations

governing the excess moisture allowance to codify regulatory technical

requirements as proposed, with some changes. The proposal incorporates

by reference ASTM standards used for collecting and testing a coal

sample as specified in 30 CFR 870.19(a), Table 1 and Table 2, and 30

CFR 870.20(a), Tables 1, 2, and 3. The ASTM standards were published in

the 1994 Annual Book of ASTM Standards, Volume 05.05. A copy of the

ASTM standards is available for inspection at the OSM Headquarters

Office, Office of Surface Mining Reclamation and Enforcement,

Administrative Record, Room 101, 1951 Constitution Avenue, NW.,

Washington, DC, and at the Office of the Federal Register, 800 North

Capitol St., Washington, DC. The rule establishes a frequency for using

ASTM standard test methods on coals of all ranks, and adopts the method

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

the ASTM D1412-93, Appendix X1. Use of this procedure for low-rank coal

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

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

moisture allowances are fair and equitable. Definitions for high and

low rank coal are provided. The rule also includes an option that

provides operators with a method to calculate an allowance for the

excess moisture present in as-shipped coal. This is of particular

benefit when an operator sells large volumes of coal, and/or sells coal

with a substantial variance between the total and inherent moisture.

A. Section 870.5--Definitions

None of the commenters addressed this section, and the revised

definitions for excess, inherent, and total moisture are being adopted

as proposed. The definition for excess moisture is revised by

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

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

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

rank coals is found in a new section 870.20. The existing definition of

inherent moisture is expanded to incorporate by reference the specific

ASTM methods of sample collection and test procedures shown in section

870.19, Table 2, Calculating INHERENT moisture percentage in HIGH-rank

coals, and section 870.20, Table 2, and Table 3, Calculating INHERENT

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

moisture is expanded to incorporate by reference ASTM criteria in

section 870.19, Table 1, for Calculating the TOTAL moisture percentage

in HIGH-rank coals, and section 870.20, Table 1, for Calculating the

TOTAL moisture percentage in LOW-rank coals. The expansion of the

existing definitions to incorporate by reference specific ASTM sample

collection methods and test procedures provides precise technical

standards to facilitate operator compliance with OSM's requirements,

and provides a consistent basis to calculate all excess moisture

allowances.

B. Section 870.18--General Rules for Calculating Excess Moisture

The modifications to 30 CFR 870.18, excess moisture content

allowance at section 870.18(a), (b), and (c) are adopted as proposed.

The previous section 870.18(a) required an operator to demonstrate

through competent evidence that the basis for determining the existence

and amount of excess moisture is reasonable. Section 870.18(b) required

standard laboratory analyses for testing inherent and total moisture.

Section 870.18(c) required an operator who blended coal mined from

multiple seams prior to the initial sale, transfer, or use of the coal

to test for variations in the inherent moisture amounts from different

seams.

This revision replaces the reasonableness standard found at section

870.18(a), the generic laboratory test requirement at section

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

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

or use at section 870.18(c). The revision also recognizes the distinct

differences in high and low-rank coals in sections 870.19 and 870.20.

Section 870.19 provides acceptable standards for collecting and testing

a sample of high-rank coals to establish the percentage of inherent and

total moisture contained in the coal, and calculate the excess moisture

allowance. Section 870.20 provides like standards for calculating the

excess moisture allowance for low-rank coals.

Revised section 870.18(c) adds definitions to further explain the

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

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

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

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

by reference the specific ASTM procedure used to take the particular

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

to establish the difference between the equilibrium moisture and

inherent moisture in low-rank coals under section 870.20. ``Equilibrium

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

moisture in all coals, and ASTM D1412 and ASTM D1412, Appendix X1, are

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

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

sections 870.5 and 870.18-20.

C. Section 870.19--How To Calculate Excess Moisture in HIGH-Rank Coals

The new section 870.19, which provides standard criteria for an

operator to use to establish excess moisture in high-rank coals, is

being adopted as proposed. Table 1 includes the ASTM standard sample

collection method, ASTM D2234-89, Standard Test Methods for Collection

of a Gross Sample of Coal, that OSM will accept for use as the basis

for calculating the percentage of total moisture in as-shipped high-

rank coals each day the coal is either shipped or used. Table 1 also

provides the test procedure, ASTM D3302-91, Standard Test Method for

Total Moisture in Coal, that would be acceptable for that purpose.

Two commenters suggested that more than one test method be accepted

for determining total moisture in high-rank coals. The prescribed test

methodology is designed to provide operators with the most reliable

means of determining the total moisture in the coals. While other

methods are available, the results produced may be less accurate, and

they are not incorporated as being acceptable in all cases. Operators

wishing to use other methodologies should obtain prior OSM approval to

avoid possible disallowance of their excess moisture amounts. The

operator must demonstrate that the test used yields accurate results.

One commenter opposed the requirement to test for total moisture

each day coal is shipped or used because:

--It would represent an excessive burden for small to medium-sized

operators who do not now test for total moisture every day they ship

coal;

[[Page 60140]]

--The cost involved with testing for total moisture every day in many

cases will either exceed or substantially diminish the value of the

coal moisture deduction; and

--The previous regulation did not require it.

The commenter recommended that one analysis of each stockpile of

coal be allowed as an alternative to daily testing. OSM has considered

these comments, but is retaining the daily testing requirement. The

basis for the coal moisture deduction is to recognize that coal

operators generally are not compensated for the weight of excess

moisture in the coal they ship, and therefore, should not be required

to pay fees on that weight. The total moisture of the coal can vary

significantly from day to day based on weather and other conditions.

The commenter stated that a single test of each stockpile, if depleted

in 10 days or less, would provide an average value of the total

moisture percentage for the stockpile for each day that the coal was

used or shipped. In OSM's view, such an approach will not adequately

recognize the variations in day-to-day moisture amounts and tonnages

shipped. The more this relationship is obscured, the less relevant it

becomes in recognizing the weight of excess moisture for which the

operator may not be compensated.

OSM also recognizes that the cost of daily moisture tests could

exceed the value of the excess moisture fee deduction that would be

derived. For that reason, OSM emphasizes in section 870.18(a) that the

operator may use the customer's test results on the shipped coal in

support of an excess moisture deduction. It has been OSM's experience

that the majority of buyers conduct such tests as part of their efforts

to ensure quality. By obtaining copies of the test results and related

records, the seller could avoid the expense of testing.

The daily total moisture test results must be converted to

quarterly figures to be reported to OSM on the OSM-1 Form, Coal

Reclamation Fee Report. To calculate the quarterly total moisture

percentage an operator should: (1) Multiply the daily total moisture

percentage by the tonnage shipped or used that day, to find the daily

total moisture tonnage; and, (2) add the daily total moisture tonnage

for each day in the quarter; and, (3) add the daily tonnage shipped or

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

the quarter. Then, divide the sum of the daily total moisture tonnage,

step (2), by the sum of the daily tonnage shipped or used in the

quarter, step (3). This will result in the total moisture percentage in

high-rank coals for the quarter which is reported on the Coal

Reclamation Fee Report.

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

testing the sample to determine the inherent moisture percentage that

will be acceptable to OSM. To collect a coal sample directly from a

coal seam an operator could use either a core or a channel sample

method. If a core sample is collected the operator is required to

collect the sample using procedures in ASTM D5192-91, Standard Practice

for Collection of Coal Samples from Core and to test by ASTM D1412-93,

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

Percent Relative Humidity and 30 deg.C. If a channel sample is used,

the operator is required to collect the sample using procedures in ASTM

D4596-93, Standard Practice for Collection of Channel Samples of Coal

in a Mine and to test by either ASTM D1412-93, Standard Test Method for

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

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

Coal. To collect a sample of blended coal, as-shipped coal, tipple

coal, commingled coal, or coal from slurry ponds an operator will use

procedures in ASTM D2234-89, Standard Test Methods for Collection of a

Gross Sample of Coal and test by ASTM D1412-93, Standard Test Method

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

and 30 deg.C to estimate the inherent moisture.

An operator may select one of two options for timing inherent

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

moisture test is chosen, the operator must report the results of one

inherent moisture test taken at any time during the quarter on the OSM-

1 form for the quarter in which the test was taken. If monthly inherent

moisture testing is preferred, the operator must create a 24-month

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

continuous operation. To create the 24-month inherent moisture

baseline, an operator must collect and test one sample in each month of

the calendar quarter. The quarterly inherent moisture percentage

reported to OSM for each of the first 8 quarters a seam is in

continuous operation is then based on a weighted average of the 3-

monthly inherent moisture tests results from each quarter. To determine

the quarterly weighted average inherent moisture percentage an operator

would then: (1) Multiply the inherent moisture percentage for one month

by the number of tons produced or shipped in that month to find the

monthly inherent moisture tonnage; (2) add the inherent moisture

tonnage determined in (1) for each of the 3 months to find the

quarterly inherent moisture tonnage; (3) divide the inherent moisture

tonnage found in (2) by the total number of tons produced or shipped

during the three months of the quarter; and, (4) report the weighted

average percentage determined in (3) for the quarter to OSM on the OSM-

1 form. After the first 24-months, an operator would use an updated

rolling average percentage to report inherent moisture percentages for

all subsequent quarters in which a coal seam is continuously mined. The

rolling average percentage would be calculated by: Adding the results

of one inherent moisture test of one coal sample collected during every

12-month period to the inherent moisture percentages for the preceding

23 tests, and dividing the sum of these tests by 24.

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

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

methods. One method involves the simple subtraction of the inherent

moisture percentage from the total moisture percentage as it is found

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

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

new alternative formula is added as a second method in section

870.19(a) that allows an adjustment in the excess moisture calculation

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

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

with a significant variance in total and inherent moisture, have

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

reduction for excess moisture. OSM is now providing this option as an

alternative to the existing formula used to determine the excess

moisture percentage. The excess moisture percentage found in section

870.19(a) is multiplied by the tonnage sold, transferred, or used

during the quarter to determine the excess moisture reduced tonnage for

the quarter under section 870.19(b).

D. Section 870.20--How To Calculate Excess Moisture in LOW-Rank Coals

A new section 870.20, which provides standard criteria for an

operator to use to establish excess moisture in low-rank coals, is

being adopted with changes. Table 1 includes the ASTM standard sample

collection procedure, ASTM D2234-89, Standard Test Methods for

Collection of a Gross Sample, and test

[[Page 60141]]

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

Coal, OSM will accept for use as the basis for calculating the

percentage of total moisture in as shipped low-rank coals each day the

coal is either shipped or used.

The daily total moisture test results must be converted to

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

Fee Report. To calculate the quarterly total moisture percentage an

operator must: (1) Multiply the daily total moisture percentage by the

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

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

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

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

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

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

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

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

Report.

Table 2 provides instructions on how an operator will determine the

inherent moisture percentage of coal mined from one or more benches of

low-rank coals by: collecting one sample of as-shipped coal each month

of the calendar quarter using procedure ASTM D2234-89, Standard Test

Methods for Collection of a Gross Sample of Coal; and testing each

sample for equilibrium moisture by ASTM D1412-93, Standard Test Method

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

and 30 deg.C.

The operator would calculate the inherent moisture percentage to

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

monthly equilibrium moisture tests, and adding the correction factor.

Table 3 provides the method an operator is required to use to

establish the correction factor during the first quarter an excess

moisture allowance is taken on low-rank coals mined from a bench or

multiple benches. The correction factor is found by using procedures in

ASTM D1412-93 Appendix X1, Standard Test Method for Equilibrium

Moisture of Coal at 96 to 97 Percent Relative Humidity and 30 deg.C to

collect 15 samples of coal from a freshly exposed, unweathered coal

seam face during the quarter. All 15 samples would be tested for

inherent moisture and equilibrium moisture as required by ASTM D1412-93

Appendix X1, Standard Test Method for Equilibrium Moisture of Coal at

96 to 97 Percent Relative Humidity and 30 deg.C.

In the proposed rule, we stated that 5 samples had to be taken in

each month of the first quarter for a total of 15 samples. Three

commenters suggested a variety of alternatives, including allowing

companies to:

--Perform a single annual collection of 20 samples;

--Collect all 15 samples in a single month; or

--Take 20 to 30 samples annually.

The OSM-1 forms reporting tonnage and moisture amounts are to be

filed for each calendar quarter. The purpose of the samples is to help

determine the appropriate moisture amount for the coal shipped or used

in the calendar quarter being reported. As a result, it is not feasible

to delay the sampling and testing beyond that quarter. In response to

the commenters, however, we have revised the final rule to state that

the sampling and testing need not be done until the first quarter a

deduction is taken, and that all 15 samples may be taken anytime during

the quarter rather than 5 each month. This is also designed to address

some commenters' concerns that sampling on some days during the quarter

may be difficult due to harsh weather.

The operator is required to establish the correction factor for the

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

moisture test results; averaging the 15 equilibrium moisture test

results; and, subtracting the average inherent moisture from the

average equilibrium moisture.

Three commenters also suggested that a regression formula be

allowed to determine the correction factor rather than simple

subtraction of the average equilibrium moisture from the average

inherent moisture. Generally, regression analysis is a statistical

approach which can be used to determine inherent moisture based on its

relationship to possibly several other variables of coal content, such

as ash, Btu, and equilibrium moisture. We examined this approach and

found that it would require sampling for every variable used in the

analysis and a substantially greater number of tests to produce

reliable results. We also found it difficult to specify all the

different variables that should be considered in every situation. As a

result, we are not incorporating a regression approach into the final

rule. If an operator elects to use a method other than that provided in

the rule, the operator should obtain prior OSM approval to avoid having

to revert to the simple subtraction method.

One commenter objected to calculating a correction factor for each

bench as we originally proposed, pointing out that multiple benches may

be mined simultaneously. We have revised the requirement in the final

rule to allow an average correction factor to be calculated and applied

when such situations exist. The correction factor could be changed at

any time provided new samples are taken and all procedures shown in

Table 3 are repeated.

III. Procedural Matters

Federal Paperwork Reduction Act

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

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

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

the proposed rulemaking. Commenters were asked to address: (a) Whether

the proposed collection of information is necessary for the proper

performance of OSM, including whether the information will have

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

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

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

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

including the use of automated collection techniques or other forms of

information technology. Comments received on the information collection

requirements in the proposed rule have been addressed in the preamble

above:

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

production reporting: 30 CFR part 870.

OMB Control Number: 1029-0090.

Abstract: Section 402 of the Surface Mining Control and Reclamation

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

reclamation fee to the Secretary for deposit in the Abandoned Mine

Reclamation Fund for the purpose of reclaiming lands mined and left

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

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

Sections 870.18, 870.19, and 870.20 of the regulations allow an

operator to take an excess moisture content allowance when calculating

the amount of reclamation fees that are owed. To substantiate the

calculated moisture deduction claimed, an operator (or other entity

responsible for the payment of the reclamation fee) is required to

document by standard laboratory analysis the excess moisture content

for each coal seam mined. This documentation must be updated as

necessary to establish the continuing validity of the excess moisture

content allowance taken by the operator.

[[Page 60142]]

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

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

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

870.20. During an audit, operators must substantiate how the

calculation for excess moisture was determined. Response to this

collection of information is required to obtain a benefit and is held

confidential under the Freedom of Information Act.

Operators must retain their records for a 6-year period to allow

for the audit of tax records. Courts have ruled that the AML fee is an

excise tax. The applicable provision of the Energy Policy Act of 1992

(Section 2515) extended the fee through 2004.

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

coal moisture deduction allowance.

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

prepare and maintain the documentation for audit purposes per

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

Executive Order 12988 on Civil Justice Reform

The Department of the Interior has determined that this rule meets

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

Civil Justice Reform.

Executive Order 12866

This rule has been determined to be significant under Executive

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

Budget.

The rule is not considered economically significant under section

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

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

economies. OSM is providing a viable methodology that will enable coal

mine operators to calculate the correct allowance for excess moisture.

OSM is not attempting to specify any given amount, or percentage, as an

excess moisture allowance. For that reason it is not possible to

predict the cost that this revision will have in terms of the amount of

the additional AML fees that the industry will pay and the government

collect or the industry save and the government not collect. Based on

AML tonnages reported, and the total moisture allowances taken for

1996, the industry saved approximately $5,729,000 in terms of the

tonnage reported. With regard to benefits, the rule revision will

ensure that all excess moisture allowances are fair and equitable.

OSM's revision also includes an option that will provide operators with

a method to calculate an allowance for the inherent moisture present in

as-shipped coal. This will be of particular benefit when an operator

sells large volumes of coal, and/or sells coal with a substantial

variance between the total and inherent moisture.

Regulatory Flexibility Act

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

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

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

entities for the following reason. The rule will provide two methods

for operators to calculate the excess moisture in high-rank coal. OSM

expects that most operators of small to medium size mines will likely

prefer to continue to use the current method of calculation while

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

significant variance in total and inherent moisture, will use the other

option as an alternative to the existing formula used to determine the

excess moisture percentage. Thus, for small operators any change from

current practices is optional.

Unfunded Mandates Reform Act

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

given year on any governmental entity or the private sector.

National Environmental Policy Act

OSM has prepared an environmental assessment (EA) of this rule and

has made a Finding of No Significant Impact (FONSI) on the quality of

the human environment under section 102(2)(C) of the National

Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4332(2)(C). The EA

and FONSI are on file in the OSM Administrative Record.

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

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

Interior, 3 Parkway Center, Pittsburgh, PA 15220. Inquiries with

respect to the rule should be directed to Dr. Kohli at the address and

telephone specified under FOR FURTHER INFORMATION CONTACT.

List of Subjects in 30 CFR Part 870

Incorporation by reference, Reporting and recordkeeping

requirements, Surface mining, Underground mining.

Dated: July 2, 1997.

Bob Armstrong,

Assistant Secretary, Land and Minerals Management.

Accordingly, 30 CFR part 870 is amended as set forth below:

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

PRODUCTION REPORTING

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

follows:

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

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

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

follows:

Sec. 870.5 Definitions.

* * * * *

Excess moisture means the difference between total moisture and

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

coals or the difference between total moisture and inherent moisture

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

* * * * *

Inherent moisture means moisture that exists as an integral part of

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

excluding that present in macroscopically visible fractures, as

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

* * * * *

Total moisture means the measure of weight loss in an air

atmosphere under rigidly controlled conditions of temperature, time and

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

Sec. 870.20(a).

3. Section 870.18 is revised to read as follows:

Sec. 870.18 General rules for calculating excess moisture.

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

deduct the weight of excess moisture in the coal to determine

reclamation fees you owe under 30 CFR 870.12(b)(3)(i). Excess moisture

is the difference between total moisture and inherent moisture. To

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

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

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

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

(a) You or your customer may do any test required by Secs. 870.19

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

all related records for at least six years after the test date.

[[Page 60143]]

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

moisture, you must submit an additional fee plus interest computed

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

Sec. 870.15(f).

(c) The following definitions are applicable to Secs. 870.19 and

870.20. ASTM standards D4596-93, Standard Practice for Collection of

Channel Samples of Coal in a Mine; D5192-91, Standard Practice for

Collection of Coal Samples from Core; and, D1412-93, Standard Test

Method for Equilibrium Moisture of Coal at 96 to 97 Percent Relative

Humidity and 30 deg.C are incorporated by reference as published in the

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

Federal Register approved this incorporation by reference in accordance

with 5 U.S.C. 552(a) and 1 CFR part 51. Each applicable ASTM standard

is incorporated as it exists on the date of the approval, and a notice

of any change in it will be published in the Federal Register. You may

obtain copies from the ASTM, 100 Barr Harbor Drive, West Conshohocken,

Pennsylvania 19428. A copy of the ASTM standards is available for

inspection at the Office of Surface Mining Reclamation and Enforcement,

Administrative Record, Room 101, 1951 Constitution Avenue, NW.,

Washington, DC, or at the Office of the Federal Register, 800 North

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

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

shipment from the mine or loading facility.

(2) Blended coal means coals of various qualities and predetermined

quantities mixed to control the final product.

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

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

bottom of a coal seam.

(4) Commingled coal means coal from different sources and/or types

combined prior to shipment or use.

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

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

standard D5192-91.

(6) Correction factor means the difference between the equilibrium

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

Sec. 870.20(a).

(7) Equilibrium moisture means the moisture in the coal as

determined through ASTM standard D1412-93.

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

A and B coals.

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

(10) Slurry pond means any natural or artificial pond or lagoon

used for the settlement and draining of the solids from the slurry

resulting from the coal washing process.

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

ready for shipment.

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

Sec. 870.19 How to calculate excess moisture in HIGH-rank coals.

Here are the requirements for calculating the excess moisture in

high-rank coals for a calendar quarter. ASTM standards D2234-89,

Standard Test Methods for Collection of a Gross Sample of Coal; D3302-

91, Standard Test Method for Total Moisture in Coal; D5192-91, Standard

Practice for Collection of Coal Samples from Core; D1412-93, Standard

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

Relative Humidity and 30 deg.C; and, D4596-93, Standard Practice for

Collection of Channel Samples of Coal in a Mine are incorporated by

reference as published in the 1994 Annual Book of ASTM Standards,

Volume 05.05. The Director of the Federal Register approved this

incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR

part 51. Each applicable ASTM standard is incorporated as it exists on

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

published in the Federal Register. You may obtain copies from the ASTM,

100 Barr Harbor Drive, West Conshohocken, Pennsylvania 19428. A copy of

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

Mining Reclamation and Enforcement, Administrative Record, Room 101,

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

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

DC.

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

equations:

[GRAPHIC] [TIFF OMITTED] TR06NO97.000

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

shipped moisture percentage calculated according to Table 1 of this

section. IM equals inherent moisture percentage calculated according to

Table 2 of this section.

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

bonafide sales, transfers of ownership, or uses by the operator during

the quarter.

BILLING CODE 1505-01-D

[[Page 60144]]

[GRAPHIC] [TIFF OMITTED] TR06NO97.001

[[Page 60145]]

[GRAPHIC] [TIFF OMITTED] TR06NO97.002

BILLING CODE 1505-01-D

[[Page 60146]]

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

Here are the requirements for calculating the excess moisture in

low-rank coals for a calendar quarter. ASTM standards D2234-89,

Standard Test Methods for Collection of a Gross Sample of Coal; D3302-

91, Standard Test Method for Total Moisture in Coal; and, D1412-93,

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

Percent Relative Humidity and 30 deg.C are incorporated by reference as

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

Director of the Federal Register approved this incorporation by

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

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

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

Federal Register. You may obtain copies from the ASTM, 100 Barr Harbor

Drive, West Conshohocken, Pennsylvania 19428. A copy of the ASTM

standards is available for inspection at the Office of Surface Mining

Reclamation and Enforcement, Administrative Record, Room 120, 1951

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

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

DC.

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

equations:

[GRAPHIC] [TIFF OMITTED] TR06NO97.003

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

shipped moisture percentage calculated according to Table 1 of this

section. IM equals inherent moisture percentage calculated according to

Tables 2 and 3 of this section.

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

bona fide sales, transfers of ownership, or uses by the operator during

the quarter.

BILLING CODE 1505-01-D

[[Page 60147]]

[GRAPHIC] [TIFF OMITTED] TR06NO97.004

[[Page 60148]]

[GRAPHIC] [TIFF OMITTED] TR06NO97.005

[[Page 60149]]

[GRAPHIC] [TIFF OMITTED] TR06NO97.006

Editorial Note: FR Doc. 97-22903 was originally published as

Part II in the issue of Tuesday, August 29, 1997. The corrected

document is republished in its entirety at the request of the

agency, due to the omission of the Table numbers.

[FR Doc. 97-22903 Filed 8-28-97; 8:45 am]

BILLING CODE 1505-01-D