Kentucky Regulatory Program

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 917

[KY-211-FOR]

Kentucky Regulatory Program

AGENCY: Office of Surface Mining Reclamation and Enforcement (OSM),

Interior.

ACTION: Final rule; approval of amendment.

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SUMMARY: OSM is approving a proposed amendment to the Kentucky

regulatory program (hereinafter referred to as the ``Kentucky

program'') under the Surface Mining Control and Reclamation Act of 1977

(SMCRA). Kentucky proposed revisions to the Kentucky Revised Statutes

(KRS) pertaining to reclamation contracts, coal processing waste, and

penalty assessment. The amendment is intended to revise the Kentucky

program to be consistent with the Federal regulations and SMCRA.

EFFECTIVE DATE: August 29, 1997.

FOR FURTHER INFORMATION CONTACT:

William J. Kovacic, Director, Lexington Field Office, 2675 Regency

Road, Lexington, Kentucky 40503. Telephone: (606) 233-2896.

SUPPLEMENTARY INFORMATION:

I. Background on the Kentucky Program

II. Submission of the Proposed Amendment

III. Director's Findings

IV. Summary and Disposition of Comments

V. Director's Decision

VI. Procedural Determinations

I. Background on the Kentucky Program

On May 18, 1982, the Secretary of the Interior conditionally

approved the Kentucky program. Background information on the Kentucky

program, including the Secretary's findings, the disposition of

comments, and the conditions of approval can be found in the May 18,

1982 Federal Register (47 FR 21404). Subsequent actions concerning

conditions of approval and program amendments can be found at 30 CFR

917.11, 917.13, 917.15, 917.16, and 917.17.

II. Submission of the Proposed Amendment

By letter dated August 15, 1996, (Administrative Record No. KY-

1371) Kentucky submitted a proposed amendment to its program pursuant

to SMCRA at its own initiative. Two bills were enacted in the regular

session of the 1996 Kentucky General Assembly that amend KRS Chapter

350. Senate Bill (SB) 231 creates a new subsection (3) of KRS 350.131

and amends 350.150(1). Both subsections pertain to reclamation

contracts. SB 231 also creates a new section of KRS Chapter 350 to

address backstowing of coal processing waste. House Bill (HB) 764

amends KRS 350.0301(1) and 350.990(1). These subsections pertain to

cessation orders.

OSM announced receipt of the proposed amendment in the September 4,

1996, Federal Register (61 FR 46577), and in the same document opened

the public comment period and provided an opportunity for a public

hearing on the adequacy of the proposed amendment. The public comment

period closed on October 4, 1996.

During its review of the amendment, OSM identified concerns

relating to the issuance of cessation orders and the assessment of

penalties. OSM notified Kentucky of these concerns by letter dated May

28, 1997 (Administrative Record No. KY-1389). By letter dated June 27,

1997 (Administrative Record No. KY-1392), Kentucky responded to OSM's

concerns by submitting additional clarifying information. Because the

information was explanatory in nature and did not constitute any major

revision to the Kentucky program, OSM did not reopen the comment

period.

III. Director's Findings

Set forth below, pursuant to SMCRA and the Federal regulations at

30 CFR 732.15 and 732.17, are the Director's findings concerning the

proposed amendment.

A. KRS 350.131(3)--Reclamation Contract

Kentucky proposes to add new subsection (3) to allow the Natural

Resources and Environmental Protection Cabinet (Cabinet) to negotiate

and enter into a contract with a permit applicant to reclaim the

disturbed area of a permit area in exchange for all or part of the

forfeited bond funds if requested by the applicant. This applies to

those situations where a bond is forfeited and a person subsequently

applies for a permit overlapping all or part of the disturbed area. If

the applicant proposes to overlap only a part of the disturbed area,

the Cabinet may enter into a contract with the applicant to reclaim the

overlap if it has retained a portion of the forfeited bond that is

sufficient to reclaim the part of the disturbed area that is not

overlapped. The applicant is not eligible if he/she has any ownership

or control connection with the permittee. The Cabinet will determine

the amount of forfeited bond fund to pay the applicant based upon the

estimated cost to reclaim the overlap but the amount cannot exceed the

forfeited bond amount collected. If the applicant obtains a permanent

program permit overlapping a forfeited interim permit, any disturbances

created in connection with the overlapping permit on areas that were

disturbed under the forfeited permit may be covered under a contract

and shall be reclaimed to permanent program standards. Areas where coal

is not removed under the overlapping permit and the disturbances are

for reclamation of the interim permit shall be reclaimed to interim

program standards. If the applicant obtains a permanent program permit

overlapping a forfeited interim permit, any new disturbances shall not

be covered by a contract and shall be reclaimed to permanent program

standards. No person is exempt from the permitting, bonding, and

reclamation requirements of Chapter 350 and the surety retains the

right to reclaim any permit or increment thereof to avoid bond

forfeiture.

While there is no Federal counterpart to the Kentucky proposal, the

Director finds the proposed statute at KRS 350.131(3) not inconsistent

with SMCRA and the Federal regulations.

B. KRS 350.150(1)--Award of Contract

Kentucky proposes to revise subsection (1) to exempt contracts

negotiated under KRS 350.131(3) from the requirement that reclamation

contracts be awarded to the lowest responsible bidder upon competitive

bids after reasonable advertisement.

While there is no Federal counterpart to the Kentucky proposal, the

Director finds the proposed statute at KRS 350.150(1) not inconsistent

with SMCRA and the Federal regulations.

C. KRS Chapter 350 Section 3--Backstowing

Kentucky proposes to add a new section (3) in which the General

Assembly affirms the authorization of backstowing of coal processing

and coal underground development waste as a disposal method under

appropriate conditions. The General Assembly directs the Cabinet to

negotiate improved coordination of State and Federal agencies in the

review of backstowing or reinjection of coal processing waste

consistent with State and Federal laws.

The Director finds the proposed statute at KRS Chapter 350, Section

3, not inconsistent with SMCRA and the Federal regulations at 30 CFR

817.81(f).

D. KRS 350.0301(1)--Administrative Hearings

Kentucky proposes to revise subsection (1) to permit a petitioner

to contest the validity of an underlying notice of noncompliance in a

timely filed demand for hearing to contest the validity of a cessation

order issued for failure to abate the violation contained in the notice

of noncompliance.

While there is no Federal counterpart to the Kentucky proposal, the

Director finds the proposed statute at KRS 350.0301(1) not inconsistent

with SMCRA and the Federal regulations.

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E. KRS 350.990(1)--Civil Penalty Assessments

Kentucky proposes to revise subsection (1) to require that a civil

penalty of not more than $5000 be assessed for each violation in a

noncompliance underlying an imminent danger cessation order. No

separate civil penalty shall be assessed for the order.

The Director finds that the proposed statute at 350.990(1) is no

less stringent than section 518(a) of SMCRA and consistent with the

Federal penalty assessment provisions at 30 CFR 845.14 and 845.15.

IV. Summary and Disposition of Comments

Public Comments

The Director solicited public comments and provided an opportunity

for a public hearing on the proposed amendment submitted on August 15,

1996. Because no one requested an opportunity to speak at a public

hearing, no hearing was held.

One public comment was received. The commenter generally supported

the provisions of Senate Bill 231. However, the provisions of House

Bill 764 are inconsistent with SMCRA and the Federal regulations

according to the commenter. The change to KRS 350.0301(1) which permits

a petitioner to contest the validity of an underlying notice of

noncompliance in a timely filed demand for hearing may, in the

commenter's opinion, encourage an operator to delay compliance. The

commenter also expressed concern that the fact of the underlying

violation could be raised for the first time in a hearing on a

cessation order even when the time for appealing the underlying notice

of violation had lapsed without an appeal. The Director notes that in

Harman Mining Corp. v. Office of Surface Mining Reclamation and

Enforcement, 114 IBLA 291,300 (May 10, 1990), the Interior Board of

Land Appeals held that the fact of a violation set out in a notice of

violation may be contested in a proceeding to review a cessation order

issued for failure to abate the notice of violation, as well as in

civil penalty proceedings.

The change to KRS 350.990(1) which requires that a civil penalty of

not more that $5000 be assessed for each violation in a noncompliance

underlying an imminent danger cessation order has three distinct

problems according to the commenter. The first is that the provision

appears to prevent the imposition of a separate civil penalty for the

issuance of an imminent danger cessation order. The second is that the

provision appears to cap the amount of penalty for underlying

violations at $5000 per violation but does not allow for imposition of

penalties on a daily basis. The third is that there are instances in

which an imminent harm cessation order is issued in which there is no

underlying notice of noncompliance or violation issued in conjunction

with the cessation order. The commenter contends that, in those cases,

no civil penalty would result according to the revised statute. In

response to the commenter's first two concerns, the Director notes that

Kentucky stated in its June 27, 1997, letter that KRS 350,990(1)

provides for the assessment of a civil penalty of up to $5,000 for each

violation cited in the underlying notice of noncompliance underlying

the cessation order. The statute further provides that each day of a

continuing violation may be deemed a separate violation for purposes of

penalty assessment. Kentucky may assess a ``per violation/per day''

penalty whenever an imminent danger cessation order is issued. The

mandatory 2-day assessment for a violation which continues for two or

more days and which is assigned more than 70 points is not affected by

the amendment as provided by 405 KAR 7:095, Section 5. KRS 350.990(1)

requires that a civil penalty of not less than $750 be assessed for

each day during which a violation is not abated within the time period

prescribed in the failure to abate cessation order or notice of

noncompliance. Kentucky does not interpret the language at KRS

350.990(1) to prohibit the imposition of a separate civil penalty for

each day during which the violation continues. In response to the

commenter's third concern, the Director notes that Kentucky affirmed in

its June 27, 1997, letter that it always issues an underlying notice of

noncompliance and order for remedial measures along with the related

imminent danger cessation order (see 405 KAR 12:020, section 3(2)(b)).

KRS 350.990(1), as amended by HB 764, links the penalty assessment for

the cessation order to the underlying notice of noncompliance. KRS

350.130(1) and 405 KAR 12:020, Section 2, require that a notice of

noncompliance be issued for any violation of the statutes, regulations,

permit conditions, or any other applicable requirement. For these

reasons, the Director finds the provisions of HB 764 to be no less

stringent than SMCRA and consistent with the Federal regulations.

Federal Agency Comments

Pursuant to 30 CFR 732.17(h)(11)(I), the Director solicited

comments on the proposed amendment submitted on August 15, 1996, and

revised on January 11, 1995, from various Federal agencies with an

actual or potential interest in the Kentucky program. No comments were

received.

Environmental Protection Agency (EPA)

Pursuant to 30 CFR 732.17(h)(11)(ii), OSM is required to obtain the

written concurrence of the EPA with respect to those provisions of the

proposed program amendment that relate to air or water quality

standards promulgated under the authority of the Clean Water Act (33

U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq.).

None of the revisions that Kentucky proposed to make in its

amendment pertains to air or water quality standards. Therefore, OSM

did not request EPA's concurrence.

V. Director's Decision

Based on the above findings, the Director approves the proposed

amendment as submitted by Kentucky on August 15, 1996.

The Federal regulations at 30 CFR part 917, codifying decisions

concerning the Kentucky program, are being amended to implement this

decision. This final rule is being made effective immediately to

expedite the State program amendment process and to encourage States to

bring their programs into conformity with the Federal standards without

undue delay. Consistency of State and Federal standards is required by

SMCRA.

VI. Procedural Determinations

Executive Order 12866

This rule is exempted from review by the Office of Management and

Budget (OMB) under Executive Order 12866 (Regulatory Planning and

Review).

Executive Order 12988

The Department of the Interior has conducted the reviews required

by section 2 of Executive Order 12988 (Civil Justice Reform) and has

determined that, to the extent allowed by law, this rule meets the

applicable standards of subsections (a) and (b) of that section.

However, these standards are not applicable to the actual language of

State regulatory programs and program amendments since each such

program is drafted and promulgated by a specific State, not by OSM.

Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and 30

CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State

regulatory programs and program amendments submitted by the States must

be based solely on a determination of whether the submittal is

consistent with SMCRA and

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its implementing Federal regulations and whether the other requirements

of 30 CFR parts 730, 731, and 732 have been met.

National Environmental Policy Act

No environmental impact statement is required for this rule since

section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency

decisions on proposed State regulatory program provisions do not

constitute major Federal actions within the meaning of section

102(2)(C) of the National Environmental Policy Act (42 U.S.C.

4332(2)(C)).

Paperwork Reduction Act

This rule does not contain information collection requirements that

require approval by OMB under the Paperwork Reduction Act (44 U.S.C.

3507 et seq.).

Regulatory Flexibility Act

The Department of the Interior has determined that this rule will

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

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

The State submittal which is the subject of this rule is based upon

corresponding Federal regulations for which an economic analysis was

prepared and certification made that such regulations would not have a

significant economic effect upon a substantial number of small

entities. Accordingly, this rule will ensure that existing requirements

previously promulgated by OSM will be implemented by the State. In

making the determination as to whether this rule would have a

significant economic impact, the Department relied upon the data and

assumptions for the corresponding Federal regulations.

Unfunded Mandates

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

given year on any governmental entity or the private sector.

List of Subjects in 30 CFR Part 917

Intergovernmental relations, Surface mining, Underground mining.

Dated: July 30, 1997.

Allen D. Klein,

Regional Director, Appalachian Regional Coordinating Center.

For the reasons set out in the preamble, Title 30, Chapter VII,

Subchapter T of the Code of Federal Regulations is amended as set forth

below:

PART 917--KENTUCKY

1. The authority citation for Part 917 continues to read as

follows:

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

2. Section 917.15 is amended in the table by adding a new entry in

chronological order by ``Date of Final Publication'' to read as

follows:

Sec. 917.15 Approval of Kentucky regulatory program amendments.

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Original amendment submission

date Date of final publication Citation/description

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August 15, 1996.................. August 29, 1997................ KRS 350.131(3), 350.150(1), Chapter 350

Section 3, KRS 350.0301(1), 350.990(1).

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[FR Doc. 97-23106 Filed 8-28-97; 8:45 am]

BILLING CODE 4310-05-M