North Dakota Regulatory Program

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 934

[SPATS ND-032-FOR, Amendment No. XXII]

North Dakota 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 North Dakota

regulatory program (hereinafter referred to as the ``North Dakota

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

(SMCRA). The revisions and information explaining those North Dakota's

proposed rules and statutes which comprise the amendment pertain to:

the North Dakota Small Operator Assistance Program, and individual

civil and criminal penalties within the coal exploration section of the

program. The amendment is intended to revise the North Dakota program

to be consistent with the corresponding Federal regulations and SMCRA.

EFFECTIVE DATE: September 16, 1998.

FOR FURTHER INFORMATION CONTACT: Guy V. Padgett, Telephone: (307) 261-

6550; Fax: (307) 261-6552; Internet: GP[email protected].

SUPPLEMENTARY INFORMATION:

I. Background on the North Dakota Program

On December 15, 1980, the Secretary of the Interior conditionally

approved the North Dakota program. General background information on

the North Dakota program, including the Secretary's findings, the

disposition of comments, and the conditions of approval of the North

Dakota program can be found in the December 15, 1980, Federal Register

(45 FR 82214). Subsequent actions concerning the North Dakota program

and program amendments can be found at 30 CFR 934.12, 934.13, 934,15,

and 934.16.

II. Proposed Amendment

By letter dated April 12, 1995, North Dakota submitted a proposed

amendment (amendment number XXII, administrative record No. ND-W-01) to

its program pursuant to SMCRA (30 U.S.C. 1201 et seq.). North Dakota

submitted the proposed amendment in response to the required program

amendments at 30 CFR 934.16(y) and (z) (59 FR 37423, 37428-374296; July

22, 1994). The statutory provisions North Dakota proposed to revise

are: North Dakota Century Code (NDCC) 38-14.1-37(4) concerning SOAP,

reimbursement of costs, and NDCC 38-12.1-08, concerning coal

exploration, individual civil and criminal penalties.

OSM announced receipt of the proposed amendment in the May 2, 1995,

Federal Register (60 FR 21484; administrative record No. ND-W-04),

provided an opportunity for a public hearing or meeting on its

substantive adequacy, and invited public comment. Because no one

requested a public hearing or meeting, none was held. The public

comment period ended at 4 p.m. on June 1, 1995.

During its review of the amendment, OSM identified concerns with

the proposed revisions to NDCC 38-13.1-08, relating to individual civil

and criminal penalties within the coal exploration program. OSM

notified North Dakota of the concerns by letter dated August 28, 1995

(administrative record No. ND-W-12). North Dakota responded in a letter

dated October 19, 1995 (administrative record No. ND-W-14) by

submitting additional proposed revisions to its program at North Dakota

Administrative Code 43-02-01 and additional explanatory information

pertaining to North Dakota Century Code 38-12.1-08.

Based upon the revisions to and additional explanatory information

that was submitted with the proposed program amendment submitted by

North Dakota, OSM reopened the public comment period in the November 9,

1995, Federal Register (60 FR 56549; administrative record No. ND-W-

16). The public comment period ended 4 p.m. November 24, 1995.

The regulatory revisions that North Dakota proposed in its October

19, 1995 letter, while satisfying most of OSM's concerns, made North

Dakota's regulations at North Dakota Administrative Code (NDAC) 43-02-

01 inconsistent with its statute at NDCC 38-12.1-08, upon which those

regulations are based. However, when this was pointed out to North

Dakota in a July 30, 1997 telephone conversation (administrative record

No. ND-W-21), it submitted an August 1, 1997 letter (administrative

record No. ND-W-18) slightly revising its regulations at NDAC 43-02-01

to make them consistent with its statute. Based on the proposed

revision, OSM reopened the public comment period in the September 4,

1997, Federal Register (62 FR 46695; administrative record No. ND-W-

19). The public comment period ended 4 p.m. September 19, 1997.

III. Director's Findings

As discussed below, the Director, in accordance with SMCRA and 30

CFR 732.15 and 732.17, finds that the proposed program amendment

submitted by North Dakota on April 12, 1995, and as revised and

supplemented with additional explanatory information and program

revisions on October 19, 1995, and on August 1, 1997, with additional

requirements, is no less stringent than SMCRA and no less effective

than the Federal regulations. Accordingly, the Director approves the

proposed amendment.

1. NDCC 38-.1-37(4): Small Operators

North Dakota proposed a revision to NDCC 38-14.1-37(4), pursuant to

the Director's Findings at III.3.i that were contained in the July 22,

1994 Federal Register (Vol. 59, No. 140, p. 37426). This addition of

subsection 4 to NDCC 38-14.1-37 also affects subsections 2 and 3 in

accordance with the July 22, 1994, Federal Register noted above. The

Director's Findings at III.3.h. states that:

[I]f North Dakota ultimately decides to adopt the responsibility

to provide or assume the training costs and inform qualified coal

operators of the availability of assistance under SOAP, NDCC 38-

14.1-37(3), because

[[Page 49431]]

of its discretionary nature, will be less stringent than section

507(c)(2) of SMCRA. North Dakota will then be required to amend its

program to mandate that the Commission ``shall'' provide or assume

the costs of training and inform qualified coal operators of the

availability of assistance under SOAP.

North Dakota has not yet decided whether to provide or assume the

training costs and inform qualified coal operators under SOAP (August

25, 1998 telephone conversation, administrative record No. ND-W-24). As

stated in the July 22, 1998 Federal Register, if North Dakota

ultimately decides to adopt the responsibility to provide or assume the

training costs and inform qualified coal operators of the availability

of assistance under SOAP, NDCC-14.1-37(3), because of its discretionary

nature, will be less stringent than section 507(c)(2) of SMCRA. North

Dakota will then be required to amend its program to mandate that the

Commission ``shall'' provide or assume the costs of training and inform

qualified coal operators of the availability of assistance under SOAP.

Based on the aforementioned, the Director finds that the proposed

addition to North Dakota's statute, NDCC 38-14.1-37(4), is no less

stringent than SMCRA.

2. NDCC 38-12.1-08 and 12.1-03-03: Coal Exploration, Statutory

Provisions Regarding Individual Civil and Criminal Penalties

In previous reviews of the North Dakota program, OSM found

deficiencies relating to the imposition of civil and/or criminal

penalties on individual officers, agents, and directors of a

corporation where the corporation committed a violation of the coal

exploration program. A required amendment was consequently codified at

30 CFR 934.16(y) (57 FR 807, 827; January 9, 1992), and was

subsequently modified (59 FR 37423, 37432; July 22, 1994). The modified

required amendment, codified at 30 CFR 934.16(y), required North Dakota

to amend NDCC 38-12.1-08 to specifically address the circumstances

under which a corporate director, officer, or agent may be individually

subject to civil or criminal penalties in connection with a violation

committed by a corporate permittee. North Dakota was also required to

submit proposed revisions in NDCC 38-12.1-08 to provide that (in

addition to violations) failure or refusal to comply with the orders

listed in section 518(f) of SMCRA and issued by the North Dakota

Industrial Commission serve as an additional basis for the imposition

of individual civil and criminal penalties upon corporate officers,

directors, and agents.

North Dakota proposed in this amendment to add a new provision at

NDCC 38-12.1-08(3) stating that:

Any corporation or any person who controls the activity of a

corporation who violates this chapter or any permit condition or

rule implementing this chapter [NDCC Chapter 38-12.1] is subject to

a civil penalty not to exceed five thousand dollars per day of such

violation.

In addition, North Dakota re-proposed the revisions to NDCC 38-

12.1-08(1) and (2) that were not approved in the July 22, 1994,

rulemaking. In its August 28, 1995, letter (administrative record No.

ND-W-12) identifying concerns to this amendment, OSM found that the

proposed new provision at NDCC 38-12.1-08(3) essentially repeated the

provision of NDCC 38-12.1-08(1) and did not clarify that individuals

(officers, directors, and agents of corporate permittees) may be

subject to penalties where the corporation, as opposed to the

individual, commits a violation. In its October 19, 1995, response

(administrative record No. ND-W-14), North Dakota argued that State law

a NDCC 12.1-03-03 (as well as NDCC 38-12.1-08(3), does subject

directors, officers, and agents to civil and criminal penalties even

though it is the corporation, not the individuals, that committed a

violation.

A. Criminal Penalties

With regard to the criminal penalties, North Dakota also referred

to the provisions of NDCC 12.1-03-03 in its October 19, 1995 letter.

NDCC 12.1-03-03 provides:

12.1-03-03 Individual accountability for conduct on behalf of

organizations

1. A person is legally accountable for any conduct he performs or

causes to be performed in the name of the organization or in its behalf

to the same extent as if the conduct were performed in his own name or

on his behalf.

2. Except as otherwise expressly provided, whenever a duty to act

is imposed upon an organization by a statute or regulation thereunder,

any agent of the organization having primary responsibility for the

subject matter of the duty is legally accountable for an omission to

perform the required act to the same extent as if the duty were imposed

directly upon himself.

The terms ``agent'' and ``organization,'' as used in NDCC 12.1-03-

03(2), are defined at NDCC 12.1-03-04(1) as follows:

In this chapter: (a) ``Agent'' means any partner, director,

officer, governor, manager, servant, employee, or other person

authorized to act in behalf of an organization. (b) ``Organization''

means any legal entity, whether or not organized as a corporation,

limited liability company, or unincorporated association, but does

not include an entity organized as or by a governmental agency for

the execution of a governmental program.

Since ``organization'' includes corporations, and ``agent''

includes officers and directors of corporations, NDCC 12.1-03-03(1)

would, when a corporation commits a violation, subject the officers,

directors, and agents of the corporation to the same criminal penalties

as the corporation, provided the individuals had ``performed'' or

``caused to be performed'' the conduct. OSM finds no substantive

differences between the NDCC 12.1-03-03(1) phrase ``performs or causes

to be performed'' and the SMCRA 518(f) phrase ``authorized, ordered, or

carried out'' identifying the applicable conduct.

NDCC 12.1-03-03(2) would subject the individuals to the same

criminal penalties as the corporation in the case of a failure or

refusal to act if the individual had ``primary responsibility'' for

that duty. North Dakota pointed out in its October 19, 1995, letter

that NDCC 38.12-1-04(3) authorizes the Industrial Commission of North

Dakota to promulgate and enforce orders, and that a failure or refusal

to comply with all types of such orders would also constitute a

violation of ``this chapter,'' as used in NDCC 38-12.1-08.

North Dakota's proposed addition of the phrase ``or willfully'' to

subsection (2) of NDCC 38-12.1-08 would extend individual criminal

penalties to cases where the individual's conduct is willful or

knowing, rather than simply ``knowingly,'' as the statute previously

read. For a discussion of North Dakota's definitions of ``knowing'' and

``willful,'' see 59 FR 37423, 37428-37429; July 22, 1994. North

Dakota's provision, as proposed, and as pointed out in its October 19,

1995, letter, would also subject individuals (whether or not corporate

officers acting for a corporation) to criminal penalties for knowingly

reporting false information.

North Dakota's existing provision at NDCC 38-12.1-08(2), and the

re-proposed revision to it, when read in conjunction with the newly

proposed provisions at NDCC Chapter 12.1-03, provide for individual

criminal penalties against corporate officers in all of the situation

in which individual criminal penalties are authorized under SMCRA

Section 518(f). Since failure or refusal to comply with any order of

the Commission would be included as a violation, without the few

exceptions granted in SMCRA Section 518(e) and (f), individuals might

be subject to penalties for still more actions or omission than

required by SMCRA

[[Page 49432]]

Section 518, and therefore North Dakota's statute is no less stringent

than SMCRA. In addition, individuals would be subject to criminal

penalties for knowingly reporting false information in all of the

situations in which individuals are subjected to such criminal

penalties under SMCRA Section 518(g).

B. Civil Penalties

North Dakota's proposed new paragraph at NDCC 38-12.1-08(3), while

similar to the first paragraph, NDCC 38-12.1-08(1), goes beyond it in

that it applies to ``Any corporation or any person who controls the

activity of a corporation who violates this chapter.'' The corporation

or person's conduct need not be willful or knowing. The term, ``any

person,'' refers to a ``director, officer, or agent or a corporate

permittee'' and is intended by the State to be broader in its coverage

than simply attempting to list the position of everyone to whom the

paragraph might apply (7/8, 9/98 telephone conversations,

administrative record No. ND-W-22).

To make North Dakota regulations consistent with the North Dakota

statute, in a August 1, 1997 revision, North Dakota changed ``willfully

and knowingly'' to ``willfully or knowingly'', thereby strengthening

the scienter requirement so that it could apply to more cases than

those in SMCRA or the Federal regulations.

Based on the above discussion, the Director finds that North

Dakota's proposed statutory revisions at NDCC 38-12.1-08 to be no less

stringent than SMCRA Section 518(f) and (g), and is approving the

proposed revisions and additions. The Director also finds that the

approval of this amendment satisfies both parts of the required

amendment at 30 CFR 934.16(y). Therefore, he is removing that required

amendment.

3. NDAC 43-02-01: Coal Exploration, Individual Civil Penalties,

Regulatory Provisions (SMCRA 518(f))

In a previous review of the North Dakota coal exploration program

and proposed amendments to that program, OSM found that the program

lacked regulations imposing civil and/or criminal penalties on

individual officers of a corporation when the corporation commits a

violation of the coal exploration program (59 FR 37423, 37428-37429;

July 22, 1994). A requirement for North Dakota to amend the program was

codified at 30 CFR 934.16(z) (59 FR 37423, 37432; July 22, 1994), which

required revision of NDAC 43-02-01-05 to specifically address the

circumstances under which a corporate director, officer, or agent maybe

individually subject to civil or criminal penalties in connection with

a violation committed by a corporation. In response to this amendment

requirement, North Dakota in its October 19, 1995 letter, and as

modified in its August 1, 1997 letter, proposed the following addition

to its regulations at NDAC 43-02-01:

(1) Whenever a corporate permittee violates a condition of a

permit, or any other rule or regulation imposed under this chapter

and NDCC 38-12.1, or fails or refuses to comply with an order issued

by the commission pursuant to NDCC 38-12.1-04(3), or any order

incorporated in a final decision issued by the commission, except an

order incorporated in a decision requiring the payment of a penalty,

any director, officer, or agent of such corporation who willfully or

knowingly authorized or carried out such violation, failure, or

refusal shall be held accountable, and the commission shall enforce

the civil and criminal penalties provided against the corporation

and the corporate directors, officers, and agents when the

corporation commits such violation, failure, or refusal, as provided

by law.

(2) A civil penalty may be assessed by the commission as

authorized by NDCC 38-12.1-08 only after the person or persons have

been given an opportunity for public hearing pursuant to the

procedures specified in NDCC Ch. 28-32.

(3) Any civil penalties assessed may be recovered by the

commission in a civil action in the North Dakota district court for

the county in which the violation occurred or in which the party

assessed has his or her residence or principal office in the state.

Proposed paragraph (1) of NDAC 43-02-01 tracks the language of

SMCRA 518(f). The proposal would specify that all violations of the

coal exploration program are (in the defined circumstances) subject to

individual penalties; in SMCRA 518(f), it states that ``Whenever a

corporate permittee violates a condition of a permit * * *.'' In

addition, the proposed North Dakota regulation states that the

corporate officers ``shall be held accountable,'' and therefore

individually liable for criminal and civil penalties. Moreover, the

proposed regulatory language further states that the Commission shall

enforce the program's civil and criminal penalties against both the

corporation and the corporate officers.

Regarding failures or refusals to comply, the proposed language

specifies that all corporate officers who willfully or knowingly

authorized or carried out the failure or refusal shall be held

accountable, not only those corporate officer(s) with ``primary

responsibility'' for that aspect of the operation; this language

extends the reach to corporate officers subject to individual penalties

for failure or refusal to comply to the same degree provided under

SMCRA Sections 518(e) and (f). The proposed regulatory language also

exempts from individual penalties failure or refusal to comply with

orders incorporated in decisions requiring the payment of a penalty, as

do SMCRA 518(e) and (f). The proposed North Dakota regulatory language

also specifically addresses the circumstances under which a corporate

director, officer, or agent may be individually subject to civil or

criminal penalties in connection with a violation, failure, or refusal

committed by a corporation.

Proposed paragraph (2) of NDAC 43-02-01 is substantively the same

as the first sentence of SMCRA 518(b), and thus provides for the same

due process appeals for individual civil penalties as does SMCRA 518(f)

(by referencing 518(b)).

Proposed paragraph (3) of NDAC 43-02-01 provides for the recovery

of individual civil penalties through civil actions, to the same extent

as SMCRA 518(d).

Based on the above discussion, the Director finds the proposed

rules at NDAC 43-02-01 (1) through (3) to be no less stringent than

SMCRA Sections 518(b), (d), (e), and (f) regarding authorization for

and procedures for individual civil and criminal penalties. The

approval of this proposal would also satisfy the required program

amendment codified at 30 CFR 934.16(z) (59 FR 37423, 37432; July 22,

1994). The Director is therefore removing this required program

amendment.

IV. Summary and Disposition of Comments

Following are summaries of all substantive written comments on the

proposed amendment that were received by OSM, and OSM's responses to

them.

1. Public Comments

OSM invited public comments on the proposed amendment in the May 2,

1995 Federal Register (60 FR 21484; administrative record No. ND W-04),

the November 9, 1995 Federal Register (69 FR 56549; administrative

record No. ND-W-16), and the September 4, 1997, Federal Register (62 FR

46695; administrative record No. ND-W-19), but no comments were

received.

2. Federal Agency Comments

Pursuant to 732.17(h)(11)(i), OSM solicited comments from various

Federal agencies with an actual or potential interest in the North

Dakota program and in the proposed amendment in an April 20, 1995,

letter (administrative record No. ND-W-03), a

[[Page 49433]]

November 9, 1995 Federal Register notice (60 FR 56549; administrative

record No. ND-W-16), and a September 4, 1997 Federal Register notice

(62 FR 46695; administrative record No. ND-WS-19).

The Agricultural Research Service of the U.S. Department of

Agriculture responded on May 5, 1995 that it had no comment or

additions to the amendment (administrative record No. ND-W-05).

The U.S. Army Corps of Engineers responded on May 9, 1995 that it

``found the changes to be satisfactory to our agency'' (administrative

record No. ND-W-07).

The Bureau of Indian Affairs responded on May 12, 1995 that ``[w]e

have no objections to the amendment because it does not affect Indian

Lands'' (administrative record No. ND-W-08).

Rural Economic and Community Development of the U.S. Department of

Agriculture responded on May 23, 1995 that it had no comment

(administrative record No. ND-W-09).

The Mine Safety and Health Administration (MSHA) of the U.S.

Department of Labor responded on June 2, 1995 that the amendment

``appears not to conflict with any MSHA regulations'' (administrative

record No. ND-W-11)).

3. Environmental Protection Agency (EPA) Concurrence and Comments

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

the written concurrence of 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 North Dakota proposed to make in its

amendment pertain to air or water quality standards. However, OSM

requested EPA's comments on April 20, 1995 (administrative record No.

NDW-03 with the proposed amendment (administrative record No. ND W-01).

EPA did not respond to OSM's request.

4. State Historic Preservation Officer (SHPO) and the Advisory Council

on Historic Preservation (ACHP)

Pursuant to 30 CFR 732.17(h)(4), OSM solicited comments on the

proposed amendment from the SHPO and ACHP (administrative record No. ND

W-03). Neither the SHPO nor the ACHP responded to OSM's request.

V. Director's Decision

Based on the aforementioned findings, the Director approves the

proposed amendment as submitted on April 12, 1995, and as supplemented

with additional explanatory information and regulations on October 19,

1995, and August 1, 1997, as discussed in:

Finding No. 1, NDCC 38-14.1-37(4), the statute that specifies that

under certain circumstances a coal mine operator who received

assistance for permitting or training reimburse the State of North

Dakota for the costs of that assistance;

Finding No. 2, NDCC 38-12.1-08, the statute in which is added the

term, ``or willfully'' to its existing language, ``who knowingly

violates this chapter, or any permit condition or regulation

implementing this chapter,'' and references NDCC 12.1-03-03, which

makes a person legally accountable for any conduct he performs or

causes to be performed in the name of an organization or in its behalf

to the same extent as if the conduct were performed in his own name or

his behalf;'' and

Finding No. 3, NDAC 43-02-01, the regulation imposing individual

civil and criminal penalties on individual officers of a corporation

when the corporation commits a violation of the coal exploration

program.

The Federal regulations at 30 CFR Part 934, codifying decisions

concerning the North Dakota 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

1. 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).

2. Executive Order 12778

The Department of the Interior has conducted the reviews required

by Section 2 of Executive Order 12778 (Civil Justice Reform) and has

determined that 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 the Federal regulations at 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 its implementing Federal regulations and whether the other

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

3. National Environmental Policy Act

An environmental impact statement is not 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)).

4. 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.).

5. 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 that is the subject of this rule is based upon

counterpart 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 counterpart Federal regulations.

List of Subjects in 30 CFR Part 934

Intergovernmental relations, Surface mining, Underground mining.

Dated: September 1, 1998.

Richard J. Seibel,

Regional Director, Western 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:

[[Page 49434]]

PART 934--NORTH DAKOTA

1. The authority citation for Part 934 continues to read as

follows:

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

2. Section 934.15 is amended, as depicted in the table below, by

adding a new entry in chronological order by ``Date of Final

Publication'' to read as follows:

Sec. 934.15 Approval of North Dakota regulatory program amendments.

* * * * *

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Original amendment submission date Date of final publication Citation/description

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* * * * * *

*

April 12, 1995..................... September 16, 1998......... Statute: NDCC 38-14.1-37(4); NDCC 38-12.1-08;

Rule: NDAC 43-02-01.

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3. Section 934.16 is amended by removing and reserving paragraphs

(y) and (z).

[FR Doc. 98-24781 Filed 9-15-98; 8:45 am]

BILLING CODE 4310-05-M