Surface Coal Mining and Reclamation Operations On Federal Lands; State-Federal Cooperative Agreements; Kentucky

SUMMARY: The Governor of the Commonwealth of Kentucky and the Secretary

of the Department of the Interior (Secretary) are entering into a

cooperative agreement between the Department of the Interior and the

Commonwealth of Kentucky for the regulation of surface coal mining and

reclamation operations on Federal lands within Kentucky. The

cooperative agreement provides for the regulation of surface coal

mining and reclamation operations on Federal lands in Kentucky under

the permanent regulatory program. The cooperative agreement is

authorized by section 523(c) of the Surface Mining Control and

Reclamation Act of 1977 (SMCRA).

EFFECTIVE DATE: November 2, 1998.

FOR FURTHER INFORMATION CONTACT: William J. Kovacic, Director, OSM,

Lexington Field Office, 2675 Regency Road, Lexington, Kentucky 40503.

Telephone: (606) 233-2894.

SUPPLEMENTARY INFORMATION:

I. Background on the Kentucky Program

II. Submission of the Cooperative Agreement

III. Director's Findings

IV. Approval of the Cooperative Agreement

V. Summary and Disposition of Comments

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, 917.15, 917.16, and 917.17.

II. Submission of the Cooperative Agreement

By letter dated May 2, 1997, (Administrative Record No. KY-1387)

from the Commissioner of the Natural Resources and Environmental

Protection Cabinet (NREPC), Kentucky submitted a request for a State-

Federal cooperative agreement pursuant to 30 CFR 745.11.

OSM announced receipt of the proposed cooperative agreement in the

June 4, 1997, Federal Register (62 FR 30540), and in the same document

opened the public comment period and provided an opportunity for a

public hearing on the adequacy of the proposed cooperative agreement.

The public comment period closed on July 7, 1997. OSM received two

requests for an extension of the comment period on July 7, 1997. The

requests were granted by the Director of the Appalachian Regional

Coordinating Center in letters dated July 15, 1997. Both letters

established a deadline of August 4, 1997, to receive the comments.

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 cooperative agreement.

Under 30 CFR 745.11(f), the Director, OSM, must make the following

three findings before recommending to the Secretary that the Department

of the Interior enter into a cooperative agreement with a State.

1. The Director finds that the Commonwealth of Kentucky has a State

program which was conditionally approved and became effective upon

publication in the Federal Register on May 18, 1982 (47 FR 21404).

2. The Director finds that the State regulatory authority has

sufficient budget, equipment and personnel to enforce fully the State's

statutes and regulations for the regulation of surface coal mining and

reclamation operations on Federal lands covered by the cooperative

agreement in Kentucky.

3. The Director finds that the Commonwealth of Kentucky has the

legal authority to administer the cooperative agreement. This finding

is made based on the written certification of the Attorney General of

Kentucky and on the conditional approval of the State's permanent

regulatory program.

These findings were reported to the Secretary in a decision

memorandum in which the Director, Office of Surface Mining, recommended

approval of the cooperative agreement.

IV. Approval of the Cooperative Agreement

Based on the conditional approval of the Kentucky State Program,

the administrative record of this rulemaking, written comments, and the

findings and recommendations of the Director, the Secretary has

approved a permanent program cooperative agreement with the

Commonwealth of Kentucky. The signed cooperative agreement is being

published as part of this rulemaking and will be codified at 30 CFR

Part 917. By its terms, the cooperative agreement becomes effective on

October 1, 1998.

V. Summary and Disposition of Comments

The Director solicited public comments and provided an opportunity

for a public hearing on the proposed amendment. Written comments were

received from members of the public, Federal agencies, and industry

representatives. Because no one requested an opportunity to speak at a

public hearing, no hearing was held. Several minor wording changes were

made to the cooperative agreement in response to comments received. The

changes are detailed in the disposition of comments below. The

effective date of the cooperative agreement as described in Article II

was changed to correspond to the Federal Government's fiscal year.

A. Public Comments

One commenter stated that Kentucky was obligated to provide

detailed information as to its present staffing and budget to allow OSM

to make a finding pursuant to 30 CFR 745.11(f)(2) that the State

regulatory authority (SRA) has sufficient budget, equipment and

personnel to implement the cooperative agreement. That commenter also

wanted the SRA to provide assurances that they would always have

sufficient budget, equipment and personnel to do so especially in light

of the anticipated increase in permitting activity that will likely

attend the deregulation of electric utilities.

The Director has found that sufficient information is available to

make a determination that Kentucky has adequate budget, equipment and

personnel levels to administer the cooperative agreement. OSM's annual

evaluations of the Kentucky program showed that inspection frequency is

being met, violations are being cited, permits are being approved in a

timely manner and in accordance with the approved program, and citizen

complaints are being addressed. While there are some minor issues

identified in these program areas, none has been the result of

inadequate budget, equipment and personnel. Additionally, OSM and the

Kentucky Department for Surface Mining Reclamation and

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Enforcement (DSMRE) have performed a review of Kentucky's program with

respect to these areas (Administrative Record No. KY-1420). The review

results indicated that duties arising from regulating the additional

sites and acreage on Federal lands will not impact Kentucky's ability

to enforce the provisions of SMCRA. The additional permitting duties

arising from the acquisition will not require additional personnel as a

majority of the Federal lands being mined are located adjacent to mines

on private lands which are already permitted by DSMRE. The commenter

believed that a staffing review should determine whether Kentucky has

sufficient capability to review permits for the areas of prediction and

prevention of subsidence impacts on natural resources, hydrology, and

prevention of acid or toxic-forming drainage. The oversight agreement

outlines the plans that OSM and DSMRE have for improving program

performance in these areas. DSMRE has a total of seven geo-hydrologists

on its staff, most (if not all) with Master's degrees. OSM believes

that this is sufficient expertise for these program areas. In addition,

for the last two years, both DSMRE and OSM have been collecting field

data in order to verify that base line hydrologic data provided in

permit applications truly reflect on-site conditions. The results of

this study will determine any measures taken to improve the basis for

permitting decisions based upon mine site hydrology.

DSMRE and OSM have also been working closely together to inventory

and map all acid mine discharges from sites mined both before and after

the passage of SMCRA. This study is the beginning of an effort to

enable permit reviewers to better predict acid mine problems by

identifying areas where closer attention should be paid to this issue

during the review process. Other studies, such as geologic data in

permit applications, are being developed for future work.

DSMRE and OSM are also studying the issue of outcrop barriers. As

part of this study, adherence to subsidence control plans is also being

reviewed. Based upon these on-going joint studies, OSM believes that

the commenter's concerns in these areas are being adequately addressed.

As for assurances that budget, equipment and personnel will always

remain adequate, 30 CFR 745.11(f)(2) does not require that this finding

be made. This section of the regulations only requires that a finding

be made at the time the cooperative agreement is signed. Budget,

equipment and personnel levels within the Kentucky program are, and

will continue to be, items which OSM reviews annually. Should shortages

in these areas jeopardize implementation of SMCRA on Federal lands, OSM

can and will take appropriate action to cause such problems to be

corrected or will revoke the cooperative agreement. Furthermore, too

great a level of specificity as to budget, equipment and personnel

levels within the body of the cooperative agreement would lead to the

need to constantly amend the cooperative agreement as conditions change

over time. The Director believes that determining resource needs on the

possibility that additional permitting may be required as a result of

the deregulation of the electric industry is ill-advised given the

uncertainty the effects of deregulation will have.

A commenter was concerned that the cooperative agreement must

specifically identify the State agency that would have authority to

implement the cooperative agreement. This concern evidently stems from

past discussions concerning the possibility of transferring the

responsibilities for program implementation from the DSMRE to another

agency that would have authority not only over reclamation of mined

lands but also over promotion of coal marketing. Article I.C of the

cooperative agreement designates the NREPC acting through DSMRE as the

agency responsible for administering the cooperative agreement.

Additionally, a cooperative agreement is not the instrument whereby the

SRA is approved by the Secretary. Any change to the SRA would have to

be reviewed and denied or approved by the Secretary under a separate

process which would also require an amendment to the cooperative

agreement. The commenter also wanted a revision to Article I.C

requiring the cooperative agreement to be reopened automatically for

public comment and review if management of the Kentucky program is

assigned to a different agency. Automatic reopening of the cooperative

agreement is not required under 30 CFR 745.12.

One commenter expressed concern with Article III of the cooperative

agreement when there is a conflict between the definitions in the

Federal and State programs. Specifically, the commenter mentioned

right-of-entry and public roads. The cooperative agreement specifically

indicates that in the event of a dispute, the definitions in the

approved State program will apply. However, when Kentucky implements

provisions of its approved program in a manner which is inconsistent

with the Federal standard, OSM's regulations, policies and procedures

establish remedial actions designed to ensure State implementation that

is consistent with the Federal requirements. OSM is already aware of

the issues in question and is requiring Kentucky to amend its approved

program accordingly. In the interim, should any instance of these

issues arise, on either State or Federal lands, OSM will take

appropriate actions to ensure compliance with the approved program. OSM

does not think it would be appropriate to impose time commitments upon

Kentucky as suggested by the commenter. Such issues are more

appropriately handled within the context of the State program amendment

process.

A commenter also suggests that the terms ``Kentucky State Program''

or ``State Program'' as used in Article I.A of the cooperative

agreement are not specific enough to distinguish between the approved

State Program and some other law or regulation adopted by the State but

not approved by OSM. The comment has merit as a means of increasing

clarity. Accordingly, the Cooperative agreement has been modified to

use the terms ``Approved Kentucky State Program'' or the ``Approved

State Program'' in lieu of ``Kentucky State Program'' or ``State

Program''.

One commenter suggested that the annual reporting required under

Article V.C of the proposed cooperative agreement in compliance with 30

CFR 745.12(d) be, instead, required at least quarterly. The rationale

given was that increased reporting would ensure that minimum inspection

frequency and other required actions were occurring on Federal lands.

Additionally, the commenter believes that public notice and review of

the State management of the Federal lands program should be solicited

on an annual basis. OSM conducts an active oversight program in

Kentucky that focuses on examining the SRA's ability to meet the goals

of SMCRA and the implementing regulations including meeting minimum

inspection frequency. The oversight process will continue after the

cooperative agreement becomes effective and will be expanded to include

the SRA's activities on Federal lands. OSM will not rely solely on the

data provided by the SRA to determine adherence to the approved

program. Data from oversight collected throughout the year will also be

used. The Director has found there to be no benefit to requiring more

frequent reporting of data in light of the ongoing oversight process.

Increased reporting frequency can be required should it

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appear that a more frequent report would enhance or ensure compliance

with the cooperative agreement.

A commenter suggested that OSM should provide public notice and

solicit public review on Kentucky's management of this Federal lands

cooperative agreement. The Federal regulations at 30 CFR Part 733

provide ample opportunity for citizens concerned with the

implementation of SMCRA to petition the Director for review of a

program. In addition, OSM Directive REG-8 solicits public participation

in all aspects of its oversight program. Anyone wishing to assist OSM

and Kentucky in overseeing implementation of this cooperative agreement

need only take advantage of these opportunities.

One commenter listed several actions contemplated under the

cooperative agreement which he felt would require preparation of

environmental documentation under the National Environmental Policy Act

(NEPA). He expressed an opinion that the cooperative agreement should

specifically State that NEPA documentation be provided on each of these

actions. These actions, and OSM's opinion as to NEPA requirements, are

as follows:

Review of applicable portions of the permit application

package for compliance with non-delegated responsibilities under SMCRA

and for compliance with other Federal laws, executive orders, and

regulations. Where a cooperative agreement is in place, the permit

application package will be submitted to OSM and the State. The State

will be responsible for review and approval of the SMCRA permit

application. However, OSM will continue to be responsible for ensuring

compliance with other applicable Federal laws, regulations and orders

not otherwise covered under the SMCRA review. These actions will not be

delegated to the State, therefore, there is no reason to discuss NEPA

requirements in the context of this cooperative agreement.

Designation of Federal lands as unsuitable for mining

under Subchapter F. Designation of Federal lands as unsuitable for

mining cannot be delegated to any State under a cooperative agreement.

That function remains OSM's responsibility. As this function cannot be

delegated by the cooperative agreement, there would be no need to here

discuss OSM's responsibilities for NEPA compliance with regard to this

function.

Development of land use management plans for Federal lands

where the surface is federally-owned. Neither OSM nor the Commonwealth

of Kentucky administers Federally-owned lands. Neither agency has any

authority to develop land use management plans for such lands. The

cooperative agreement cannot give OSM or Kentucky the authority to do

so. Any compliance with NEPA in the development of such plans would be

the responsibility of the Federal agency designated as the land

management agency.

Approval and determination of post-mining land uses for

Federal lands where the surface estate is Federally owned.

Determination of the post-mining land use is part of the overall permit

review and approval process. However, it is a duty reserved to the

Secretary pursuant to 30 CFR 745.13(k). Therefore, any NEPA

documentation required will be provided.

Evaluation of the State administration and enforcement of

the approved cooperative agreement. Since this function is reserved to

the Secretary, pursuant to 30 CFR 745.13(m), any applicable NEPA

responsibilities are also reserved to the Secretary.

Determination of valid existing rights (VER) with respect

to Federal surface lands and Federal coal. Section 702(d) of SMCRA

expressly provides that ``implementation [not just promulgation] of the

Federal lands programs, pursuant to section 523 of this Act, shall not

constitute a major action within the meaning of section 102(2)(C) of

the National Environmental Policy Act.'' 30 CFR 740.13(b)(3)(iii)

requires NEPA documentation, among other supplemental information, for

permitting actions involving Federal lands when OSM is the regulatory

authority or when the permit involves leased Federal coal (thus

necessitating preparation of a mining plan under the Mineral Leasing

Act, which is subject to NEPA). However, in the latter case, only the

mine plan approved by the Secretary, not the permit issued by the

State, would be subject to NEPA. Also, NREPC will assume responsibility

for making VER determinations under Section 522(e) (3), (4) and (5).

These determinations are part of the permit application review process

delegated to the NREPC, pursuant to Article VI.A of the cooperative

agreement, first paragraph, last sentence. Section 523(c) of SMCRA,

which pertains to Federal lands, reserves to the Secretary the

authority to designate Federal lands as unsuitable pursuant to section

522. However, section 523(c) pertains to the designation process

conducted pursuant to section 522(b); it does not pertain to VER

determinations, which are carried out under section 522(e). Therefore,

SMCRA allows OSM to delegate VER determinations to the SRA. The Federal

regulations, at 30 CFR 745.13(o), do reserve 522(e)(1) and (e)(2)

determinations to the Secretary, but are silent as to VER

determinations made pursuant to 522(e)(3), (4) and (5). As discussed

above, these three VER determinations fall within the general

delegation of permit review authority made by the Secretary to NREPC

under Article VI.A of the cooperative agreement. Because these

determinations are to be made by the NREPC as part of the permitting

process, they are State actions, rather than Federal actions, and are

therefore not subject to NEPA requirements.

Finding of no significant values incompatible with mining

as required by Section 522(e)(2). As with lands unsuitable

designations, this function remains the responsibility of the Federal

government, and the cooperative agreement has no impact upon the

Government's obligation under NEPA in performing this function.

Finally, OSM notes that 30 CFR 745.13(b) provides that compliance

with NEPA is a duty reserved to the Secretary and cannot be delegated

to a State through a cooperative agreement.

One commenter wanted assurances that Kentucky's laws at KRS 224.01-

040, referred to by the commenter as ``environmental audit privilege

legislation'', could not be used as a means under Article V.C of the

proposed agreement to block disclosure of information required to be

submitted under SMCRA. A reading of KRS 224.01-040 does not provide any

indication that this statute has any effect upon KRS 350, the SMCRA

approved Kentucky program. Discussions with officials of DSMRE reveal

that the agency does not consider this statute to have any effect upon

the approved program.

Kentucky provided written clarification to that effect

(Administrative Record # KY-1414). KRS 224 has no known effect on

implementation of the approved Kentucky program. OSM has no authority

to require any revision to these statutes unless they specifically

impact the approved program.

It was suggested that Article VI.C should specifically state that

the time frame for OSM's review and comment does not begin until such

time as the permit application package (PAP) has been determined to be

administratively complete. For the sake of clarity, the cooperative

agreement has been modified to reflect this suggestion.

[[Page 53255]]

One commenter expressed major concerns that the cooperative

agreement did not specifically state that OSM had the authority to take

appropriate enforcement actions in the event of an imminent danger or

significant, imminent environmental harm; or Kentucky's failure to take

appropriate actions on any violation referred to them by OSM via Ten-

Day Notice. OSM's authority to take appropriate actions is found at 30

CFR Parts 843, 845, and 846. These provisions are all referenced under

Article VIII. There are no provisions in the cooperative agreement that

hinder or condition OSM's ability under these regulations to take

appropriate action whenever warranted. There is no need to further

specify OSM's enforcement authority under this cooperative agreement.

The same commenter also requested that the cooperative agreement

clarify that any enforcement action taken by OSM could not be

judicially or administratively challenged in any State forum. This

clarification is not necessary. The provisions for appealing Federal

actions are clearly stated in 30 CFR 843.16. Adding additional language

to this cooperative agreement would neither diminish nor strengthen

these provisions.

The same commenter also wished for clarification of the method of

referral for citizen complaints submitted to OSM. The procedures for

referring citizen complaints from OSM to the SRA are already delineated

in SMCRA, the Federal regulations at 30 CFR 842.11 and 842.15, and

under the provisions of OSM Directives INE-24, ``Response to Citizen

Complaints in Primacy States'', dated May 26, 1987, and INE-35, ``Ten

Day Notices'' dated October 19, 1990. Including these provisions in

this cooperative agreement would neither augment nor detract from this

function.

There is no need to repeat these provisions within the body of the

cooperative agreement, or to specifically reference these provisions.

To do so would require a separate program amendment for this

cooperative agreement every time one of these provisions should be

revised or modified. OSM will add the phrase ``in accordance with OSM

regulations, policies, and procedures'' to the end of the last

paragraph in Article VII to clarify that this cooperative agreement

does nothing to distinguish between the way in which citizen complaints

on either State or Federal lands will be referred to the State.

The same commenter also claimed that OSM was attempting under

Article VII to impose a standard of ``just cause'' prior to conducting

a Federal inspection on a citizen's complaint that alleged an imminent

danger or significant, imminent environment hazard in place of the

``reason to believe'' standard at 30 CFR 842.11(b)(1)(i). OSM has

corrected this inadvertent change in phrases.

One commenter suggested that since Kentucky's approved program does

not allow self-bonding, all current Federal permits should be reviewed

and all self-bonded operations be required to obtain sufficient bond in

a form approved for acceptance in Kentucky. At this time, there are no

permits that would be affected under this proposed cooperative

agreement that are self-bonded. The one Federal permit that was bonded

in this manner is currently covered under surety bonding. No action can

be taken in response to this comment.

One commenter suggested that the ``working agreements'' proposed

under Article VI whereby implementation or compliance with other

Federal laws may be delegated to Kentucky should become amendments to

the cooperative agreement and thus subject to public scrutiny and

review. The commenter stated that these working agreements and their

ability to impact the implementation of these other Federal laws is a

matter of significant public interest. For several reasons, OSM will

not require that the ``working agreements'' anticipated under Article

VI be made a part of this cooperative agreement. First, many of these

working agreements will contain provisions which OSM has no authority

to require or approve. Second, many of the provisions that will be part

of these ``working agreements'' will pertain only to communications

between Kentucky and other agencies. Third, one reason for not making

these working agreements part of the cooperative agreement is to avoid

the necessity of a formal amendment of this cooperative agreement for

inevitable minor changes to the working agreements (such as the change

of a contact person, address, or phone number). Fourth, implementation

of the cooperative agreements, including any ``working agreements,''

will be subject to oversight. As previously stated, OSM Directive REG-8

and the Federal regulations solicit public participation in all aspects

of the oversight program. Anyone wishing to assist OSM and Kentucky in

overseeing implementation of this cooperative agreement, or any working

agreement developed to assist in its implementation, need only take

advantage of this opportunity. OSM will not allow any provision to a

``working agreement'' that would preclude or prevent implementation of

any provision required by this cooperative agreement, SMCRA, applicable

Federal regulations, or Kentucky's approved regulatory program.

Two commenters from industry were of the opinion that OSM should

require Kentucky to adopt self-bonding as part of its approved program.

At this time, Kentucky's approved program does not have regulations

that allow the acceptance of self-bonds. OSM can only require a program

amendment when it determines that some provision of the approved State

program would be less effective than SMCRA in obtaining compliance and

adequate reclamation. The fact that Kentucky does not allow self-

bonding is not grounds for making such a decision. OSM will not require

Kentucky to submit an amendment to the approved program to include this

bonding provision. One of these commenters has met with Kentucky's

DSMRE and OSM and has asked that Kentucky adopt regulations that would

allow this bonding method. A record of this meeting has been placed

into the Administrative Record as document number KY-1417. DSMRE has

agreed to look into the possibility of such an amendment, but gave the

requestor little indication that it would wish to adopt this form of

bonding due to the potential liability it might impose upon the

Commonwealth of Kentucky.

Another commenter from industry stated that it supported the

cooperative agreement but only if it allowed conversion of any existing

Federal permits to State permits without having to go through a new

review and approval process. OSM and Kentucky have already discussed

this issue and a tentative working agreement has been reached wherein

all Federal permits that have already been issued will be accepted by

Kentucky without further review. There would, of course, be review and

approval by the State for any amendments, revisions, renewals, or other

permitting actions that take place after the cooperative agreement is

in place. OSM anticipates that a working agreement will be in place

with Kentucky upon final approval of the cooperative agreement.

B. Federal Agency Comments

The U.S. Forest Service (USFS) stated that it interpreted 30 CFR

740.4 to mean that OSM would retain responsibility for implementing

NEPA requirements on Federal lands. Under 30 CFR 740.4(c)(7), OSM will

remain responsible for the content of any documentation required under

NEPA, or determining Federal actions to be taken on alternatives

presented in such documents.

[[Page 53256]]

The USFS also commented that the Federal land management agency

should have approval authority on the adequacy of performance bonds.

There are no provisions in SMCRA that would allow OSM or the SRA to

delegate this responsibility to the land management agencies. In fact,

30 CFR 800.4(c) and 800.14(a)(2) specify that the amount of bond shall

be determined by the SRA. This does not mean that the USFS has no

avenue to influence bonding amounts. Under 30 CFR 740.13(c)(5), the SRA

cannot approve a permit, permit revision or renewal thereof without

considering the comments of the Federal land management agency and

including these comments in the record of permit decision. As the

determination of bond is integral to any permitting decision, the USFS

would have opportunity to assist in ensuring that adequate bonding was

provided.

The USFS stated that it supported the cooperative agreement but

raised concerns stemming from past mining operations that adversely

impacted Forest Service properties. They acknowledged and applauded

ongoing efforts by Kentucky and OSM to address these concerns, and also

requested that the cooperative agreement embody the intent to continue

to ameliorate the problems caused by past mining abuses. It is OSM's

opinion that remediation of past mining impacts to USFS property would

best be handled between DSMRE and the USFS through a working agreement

between these agencies. OSM will provide any assistance requested in

developing such an agreement.

The U.S. Army Corps of Engineers requested that it be kept apprised

of inspections and be allowed to accompany inspectors, be provided

copies of inspection reports and enforcement actions, be informed of

actions taken on violations, be provided with copies of any changes to

State laws, regulations or policies, and be notified of any changes in

State personnel or organization that might impact implementation of the

cooperative agreement. These requested provisions would best be handled

between DSMRE and the Corps through a working agreement between these

agencies. OSM will provide any assistance requested in developing such

an agreement.

The U.S. Fish and Wildlife Service (FWS) recommended that the

cooperative agreement be withdrawn. The FWS believes that the current

system of Federal review of permit applications on Federal lands is

preferable to State reviews because State reviews have led to approvals

of permits with defects, including: (1) regular placement of sediment

control structures and fills within streams with watersheds smaller

than 480 acres without mitigation; (2) failure to return the land to

its original use, such as forest habitat; (3) regular variances from

the 100-foot stream buffer zone requirement; and (4) failure to

evaluate cumulative hydrologic impacts.

Notwithstanding FWS's general opposition to this cooperative

agreement, Section 523(c) authorizes such agreements providing for

state regulation of surface coal mining and reclamation operations on

Federal lands. Currently, we have Federal lands cooperative agreements

with 12 other states. Under the Kentucky cooperative agreement, OSM

will oversee state implementation of the Kentucky regulatory program to

insure that mining and reclamation operations on Federal lands are in

compliance with program requirements. OSM does note, that with regard

to the laws and regulations of the Kentucky program approved pursuant

to SMCRA, the state requirements were found to be no less stringent

than SMCRA and no less effective than SMCRA's implementing regulations.

In conducting oversight of Kentucky's implementation of this program,

OSM has found that the Commonwealth is implementing its program in a

manner consistent with SMCRA and the Federal regulations. Therefore, we

do not agree with the FWS statement that the state regularly approves

defective permits.

With regard to FWS's concern over the regular placement of sediment

structures and fills in streams without mitigation, it appears that

FWS's objections are to state laws and regulations adopted pursuant to

the Clean Water Act, over which OSM has no jurisdiction. Because of

growing concerns in this area, an interagency working group has been

established to review this issue and make recommendations as

appropriate.

The second concern of the FWS was failure to return the land to its

original land use such as forest habitat. The Federal regulations at 30

CFR 780.23(b)(2), 780.23(c), 816.133(c), and 816.133(d)(9) and the

Kentucky equivalent, 405 KAR 8:030 Section 37(c), 8:030 Section 37(e),

16:210 Section 4, and 20:060 Section 3(5), provide that an alternative

postmining land use may be selected so long as the criteria at 30 CFR

816.133(c) and the Kentucky equivalent, 405 KAR 16:210 Section 4, are

met. These regulations and SMCRA at section 515 (30 U.S.C. 1265) allow

land use changes so long as the new land use is a higher or better use

than the pre-mining land use. They also require consultation with the

landowner or the land management agency having jurisdiction over the

land. The regulations clearly provide that landowner choice is an

important factor in choosing the post mining land use.

The third area of concern to the FWS was variances for stream

buffer zones. The Federal regulations at 30 CFR 816.57 and the Kentucky

equivalent, 405 KAR 16:060 Section 11, provide that the regulatory

authority may authorize surface mining activities within 100 feet of a

perennial or intermittent stream or through such streams. Before

allowing such mining activities, however, the regulatory authority must

make a finding that the activities will not cause or contribute to the

violation of applicable State or Federal water quality standards, and

will not adversely affect the water quantity and quality or other

environmental resources of the stream. OSM's oversight of Kentucky's

permitting activities indicates that the required findings are made

before issuance of a permit allowing mining activities within stream

buffer zones.

The final concern expressed by FWS included failure to evaluate

cumulative impacts. Federal regulations at 30 CFR 780.21(g) and the

Kentucky equivalent, 405 KAR 8:010 Section 14(3), require the

regulatory authority to provide an assessment of the probable

cumulative hydrologic impacts (CHIA) of the proposed operation and all

anticipated mining upon surface and ground water systems in the

cumulative impact area. The CHIA must be sufficient to determine

whether the proposed operation has been designed to prevent material

damage to the hydrologic balance outside the permit area. Oversight

activities have found that the CHIA is part of all mining permits

issued by Kentucky. OSM has no evidence to find that material damage is

occurring outside permit areas due to insufficient CHIA documentation.

Absent any information to the contrary, OSM finds that Kentucky's

permitting activities are not deficient in this area.

The FWS also indicated its belief that because implementation of

the cooperative agreement would constitute a major Federal action as

defined by NEPA, development of an Environmental Impact Statement would

be required. In addition, the FWS believes that formal consultation in

accordance with Section 7 of the Endangered Species act is required.

The resolution of NEPA issues has been discussed earlier in detail.

Subsequent to receipt of the FWS's comments, a letter from the FWS

(Administrative

[[Page 53257]]

Record # KY-1407) was received indicating that formal consultation is

not required due to the programmatic biological opinion issued by the

FWS to OSM on September 24, 1997.

VI. Procedural Determinations

1. Executive Order 12866--Regulatory Planning and Review

This document is not a significant rule and is not subject to

review by the Office of Management and Budget under Executive Order

12866.

(1) This rule will not have an effect of $100 million or more on

the economy. It will not adversely affect in a material way the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities.

(2) This rule will not create a serious inconsistency or otherwise

interfere with an action taken or planned by another agency.

(3) This rule does not alter the budgetary effects or entitlements,

grants, user fees, or loan programs or the rights or obligations of

their recipients.

(4) This rule does not raise novel legal or policy issues.

2. Regulatory Flexibility Act

The Department of the Interior certifies 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.).

This rule will establish a cooperative agreement between the Department

of the Interior and the Commonwealth of Kentucky. The cooperative

agreement does not impose any new substantive requirements on the coal

industry, it merely authorizes the Commonwealth to regulate surface

coal mining and reclamation activities on Federal lands in Kentucky in

lieu of the Federal government.

3. Small Business Regulatory Enforcement Fairness Act

This rule is not a major rule under 5 U.S.C. 804(2), the Small

Business Regulatory Enforcement Fairness Act. This rule:

a. Does not have an annual effect on the economy of $100 million or

more. The rule only affects the Commonwealth of Kentucky and the costs

of carrying out the functions under the cooperative agreement are

offset by grants from the Federal government.

b. Will not cause a major increase in costs or prices for

consumers, individual industries, Federal, State, or local government

agencies, or geographic regions because the rule does not impose any

new requirements on the coal mining industry or consumers. The

functions being performed by the State under the cooperative agreement

are offset by grants from the Federal government.

c. Does not have significant adverse effects on competition,

employment, investment, productivity, innovation, or the ability of

U.S.-based enterprises to compete with foreign-based enterprises for

the reasons stated above.

4. Unfunded Mandates

This rule does not impose an unfunded mandate on State, local, or

tribal governments or the private sector of more than $100 million per

year. The rule does not have a significant or unique effect on State

local or tribal governments or the private sector. The rule establishes

a cooperative agreement at the request of the Commonwealth of Kentucky

and will result in the delegation of authority to the State. A

statement containing the information required by the Unfunded Mandates

Reform Act (1 U.S.C. 1531, et seq.) is not required.

5. Executive Order 12630--Takings

In accordance with Executive Order 12630, the rule does not have

significant takings implications. The rule establishes a cooperative

agreement at the request of the Commonwealth of Kentucky and will

result in the delegation of authority to the State. A takings

implication assessment is not required.

6. Executive Order 12612--Federalism

In accordance with Executive Order 12612, the rule does not have

significant Federalism implications to warrant the preparation of a

Federalism Assessment. The rule establishes a cooperative agreement at

the request of the Commonwealth of Kentucky and will result in a

delegation of authority to the State. Therefore, a Federalism

assessment is not required.

7. Executive Order 12988--Civil Justice Reform

In accordance with Executive Order 12988, the Office of the

Solicitor has determined that this rule does not unduly burden the

judicial system and meets the requirements of sections 3(a) and 3(b)(2)

of the Order.

8. Paperwork Reduction Act

This rule does not require an information collection from 10 or

more parties and a submission under the Paperwork Reduction Act is not

required. An OMB form 83-I is not required.

9. 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 the

implementation of a Federal lands program pursuant to section 523 of

SMCRA does not constitute a major Federal action within the meaning of

section 102(2)(C) of the National Environmental Policy Act of 1969 (42

U.S.C. 4332(2)(C)).

10. Authors

The co-authors of this final rule are Dave Beam, Office of Surface

Mining, Lexington Field Office, 2657 Regency Road, Lexington, KY 40503,

telephone 606-233-2896, and Michael Bower, Office of Surface Mining,

Appalachian Regional Coordinating Center, Three Parkway Center,

Pittsburgh, PA 15220, telephone 412-937-2857.

List of Subjects in 30 CFR Part 917

Intergovernmental relations, Surface mining, Underground mining.

Dated: September 3, 1998.

Sylvia V. Baca,

Acting Assistant Secretary, Land and Minerals Management.

Accordingly, 30 CFR part 917 is amended as follows:

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 917.30 is added to read as follows:

Sec. 917.30 State-Federal cooperative agreement.

Cooperative Agreement

The Governor of the Commonwealth of Kentucky (the Governor) and

the Secretary of the Department of the Interior (the Secretary)

enter into a Cooperative Agreement (Agreement) to read as follows:

Article I: Introduction, Purpose, and Responsible Agencies

A. Authority

This Agreement is authorized by Section 523(c) of the Surface

Mining Control and Reclamation Act (Act), 30 U.S.C. 1273(c), which

allows a State with a permanent regulatory program approved by the

Secretary under 30 U.S.C. 1253, to elect to enter into an Agreement

for the regulation and control of coal exploration operations not

subject to 43 CFR Group 3400 and surface coal mining and reclamation

operations on Federal lands. This Agreement provides for State

regulation consistent with the Act, the Federal lands program (30

CFR Chapter VII, Subchapter D) and the approved Kentucky State

Program (Program) for surface coal mining and reclamation operations

on Federal lands.

[[Page 53258]]

B. Purposes

The purposes of this Agreement are to (a) foster Federal-State

cooperation on the regulation of surface coal mining and reclamation

operations and coal exploration operations not subject to 43 CFR

Group 3400, (b) minimize intergovernmental duplication of effort,

and (c) provide for uniform and effective application of the Program

on all lands in Kentucky in accordance with the Act and the Program.

C. Responsible Administrative Agencies

The Kentucky Natural Resources and Environmental Protection

Cabinet (NREPC), acting through the Department for Surface Mining

Reclamation and Enforcement (DSMRE), shall be responsible for

administering this Agreement on behalf of the Governor. The Office

of Surface Mining Reclamation and Enforcement (OSM) shall administer

this Agreement on behalf of the Secretary.

Article II: Effective Date

After being signed by the Secretary and the Governor, this

Agreement shall be effective on October 1, 1998. This Agreement

shall remain in effect until terminated as provided for in Article

XI.

Article III: Definitions

The terms and phrases used in this Agreement, which are defined

in the Act, 30 CFR Parts 700, 701 and 740 and defined in the KRS 350

and the rules and regulations promulgated pursuant to that Act,

shall have the same meanings as set forth in said definitions. Where

there is a conflict between the above referenced State and Federal

definitions, the definitions used in the approved State Program will

apply except in the case of a term which defines the Secretary's

continuing responsibilities under the Act or other laws.

Article IV: Applicability

In accordance with the Federal lands program, the laws,

regulations, terms and provisions of the Program are applicable to

Federal lands in Kentucky except as otherwise stated in this

Agreement, The Act, 30 CFR 740.4 and 745.13 or other applicable

Federal laws, Executive Orders or regulations.

Orders and decisions issued by the NREPC in accordance with the

Program that are appealable shall be appealed to the reviewing

authority in accordance with the Program. Orders and decisions

issued by the Secretary or his authorized agents that are appealable

shall be appealed to the Department of the Interior's Office of

Hearings and Appeals.

Article V: General Requirements

The Governor and the Secretary affirm that they will comply with

all provisions of this Agreement.

A. Authority of State Agency

NREPC has and shall continue to have the authority under State

law to carry out this agreement.

B. Funding

Upon application by NREPC, and subject to appropriations, OSM

will provide the State with funds to defray the costs associated

with carrying out its responsibilities under this Agreement as

provided in Section 705(c) of the Act and 30 CFR Part 735. Such

funds will cover the full cost incurred by NREPC in carrying out

those responsibilities. The amount of the grant will be determined

using the procedures specified in the Federal Assistance Manual

Chapter 3-10 and Appendix III.

For purposes of this agreement, actual costs of NREPC's

administration of its approved program on Federal lands in

accordance with this agreement shall be that percentage of NRECP's

total program expenditures during any specific grant period that

equals the percentage of Federal lands within all lands under permit

in the State of Kentucky for that specific grant period.

If NREPC applies for a grant but sufficient funds have not been

appropriated to OSM, OSM and NREPC will meet to decide upon

appropriate measures that will insure that mining operations on

Federal lands located in Kentucky are regulated in accordance with

the approved Program. The NREPC also reserves the right to terminate

this agreement should OSM be unable to adequately fund this program.

C. Reports and Records

NREPC will make annual reports to OSM containing information

with respect to compliance with terms of this Agreement pursuant to

30 CFR 745.12(d).

Upon request, NREPC and OSM will exchange information generated

under this Agreement, except where prohibited by Federal or State

law.

OSM will provide NREPC with a copy of any final evaluation

reports prepared concerning State administration and enforcement of

this Agreement. NREPC comments on the report will be attached before

being sent to the Congress or other interested parties.

D. Personnel

NREPC shall have the personnel necessary to fully implement this

Agreement in accordance with the provision of the Act, applicable

regulations, the Federal lands program and the approved Program.

E. Equipment and Facilities

NREPC will assure itself access to equipment, laboratories and

facilities to perform all inspections, investigations, studies,

tests and analyses that are necessary to carry out the requirements

of this Agreement.

F. Permit Application Fees and Civil Penalties

The amount of the fee accompanying an application for a permit

for operations on Federal lands in Kentucky shall be determined in

accordance with KRS 350.060 and Federal law. All permit fees and

civil penalties collected from operations on Federal lands will be

retained by the State. Permit fees shall be considered Program

income. Civil penalties shall not be considered Program income. The

financial status report submitted to OSM pursuant to 30 CFR 735.26

shall include the amount of fees and civil penalties collected and

attributable to Federal lands during the prior State fiscal year.

Article VI: Review of Permit Application Package

A. Responsibilities

NREPC will assume primary responsibility for the analysis,

review, and approval, disapproval, or conditional approval of the

permit application component of the permit application package (PAP)

required by 30 CFR 740.13 for surface coal mining and reclamation

operations in Kentucky on Federal lands. NREPC will assume the

responsibilities for review of permit applications to the extent

authorized in 30 CFR 740.4(c)(1), (2), (3), (4), (6), and (7).

For proposals to conduct surface coal mining operations

involving leased Federal coal, OSM is responsible for preparing a

mining plan decision document in accordance with 30 CFR 746.13 and

obtaining the Secretary's approval.

The Bureau of Land Management (BLM) is responsible for matters

concerned exclusively with regulations under 43 CFR Group 3400.

The Secretary reserves the right to act independently of NREPC

to carry out responsibilities under laws other than the Act or

provisions of the Act not covered by the Program, and in instances

of disagreement over the Act and the Federal lands program. The

Secretary will make determinations under the Act that cannot be

delegated to the State, some of which have been delegated to OSM.

Responsibilities and decisions which can be delegated to NREPC

under other applicable Federal laws may be specified in working

agreements between OSM and the State with the concurrence of any

Federal agency involved and without amendment to this agreement.

B. Permit Application Package

NREPC shall require an applicant proposing to conduct surface

coal mining and reclamation operations on Federal lands to submit a

PAP with an appropriate number of copies to NREPC. NREPC will

furnish OSM, the Federal land management agency, and any other

agency with jurisdiction or responsibility over Federal lands

affected by operations proposed in the PAP with an appropriate

number of copies of the PAP. The PAP will be in the form required by

NREPC and will include any supplemental information required by OSM,

the Federal land management agency, and any other agency with

jurisdiction or responsibility over Federal lands affected by

operations proposed in the PAP.

At a minimum, the PAP will satisfy the requirements of 30 CFR

740.13(b) and include the information necessary for NREPC to make a

determination of compliance with the Program, and for OSM, the

appropriate Federal land management agencies, and any other agencies

with jurisdiction or responsibilities over Federal lands affected by

operations proposed in the PAP to make determinations of compliance

with applicable requirements of the Act, the Federal lands program,

other Federal laws, Executive Orders, and regulations for which they

are responsible.

[[Page 53259]]

C. Review Procedures

NREPC will be the primary point of contact for applicants

regarding the review of the PAP for compliance with the Program and

State laws and regulations. OSM will review the applicable portions

of the PAP for compliance with the non-delegated responsibilities of

the Act and for compliance with the requirements of other Federal

laws, Executive Orders, and regulations.

OSM and NREPC will develop a work plan and schedule for PAP

reviews that comply with the time limitations established by the

approved State program, and each agency will designate a person as

the Federal lands liaison. The Federal lands liaisons will serve as

the primary points of contact between OSM and NREPC throughout the

review process. Not later than 45 calendar days after receipt of an

administratively complete PAP, unless a different schedule is agreed

upon, OSM will furnish NREPC with its review comments on the PAP and

specify any requirements for additional data.

OSM and NREPC will coordinate with each other during the review

process as needed. NREPC will send to OSM copies of any

correspondence with the applicant and any information received from

the applicant regarding the PAP.

OSM will send to NREPC copies of all OSM correspondence which

may have a bearing on the PAP.

OSM will provide technical assistance to NREPC when requested,

and will have access to NREPC files concerning operations on Federal

lands. NREPC will keep OSM informed of findings made during the

review process which bear on the responsibilities of OSM or other

Federal agencies.

D. Coordination Between NREPC, OSM, and Other Federal Agencies

NREPC will, to the extent authorized, consult with the Federal

land management agency and BLM pursuant to 30 CFR 740.4(c)(2) and

(3), respectively. NREPC will also be responsible for obtaining the

comments and determinations of other agencies with jurisdiction or

responsibility over the Federal lands affected by the operations

proposed in the PAP. NREPC will request all Federal agencies to

furnish their findings or any request for additional information to

NREPC within 45 calendar days of the date of receipt of the PAP. OSM

will, upon request, assist NREPC in obtaining such information.

In accordance with 30 CFR 745.12(g)(2), where lands containing

leased Federal coal are involved, NREPC will provide OSM, in the

form specified by OSM in consultation with NREPC, with written

findings indicating that each permit application is in compliance

with the terms of the regulatory program and a technical analysis of

each permit application to assist OSM in meeting its

responsibilities under other applicable Federal laws and

regulations.

Where leased Federal coal is involved, OSM will consult with and

obtain the concurrences of BLM, the Federal land management agency,

and any other agency with jurisdiction or responsibility over the

Federal lands affected by the operations proposed in the PAP as

required to make its recommendation for the Secretary's decision on

the mining plan.

Where BLM contacts the applicant in carrying out its

responsibilities under 43 CFR Group 3400, BLM will immediately

inform NREPC of its actions and provide NREPC with a copy of

documentation of all decisions within 5 calendar days.

E. Permit Application Decision and Permit Issuance

NREPC will prepare a State decision package, including written

findings and supporting documentation, indicating whether the PAP is

in compliance with the Program. NREPC will make the decision on

approval, disapproval, or conditional approval of the permit on

Federal lands.

Any permit issued by NREPC will incorporate any lawful terms or

conditions imposed by the Federal land management agency, including

conditions relating to post-mining land use, and will be conditioned

upon compliance with the requirements of the Federal land management

agency.

NREPC may make a decision on approval, disapproval, or

conditional approval of the permit on Federal lands in accordance

with the Program prior to the necessary Secretarial decision on the

mining plan when leased Federal coal is involved, provided that

NREPC advises the operator in the permit that Secretarial approval

of the mining plan must be obtained before the operator may conduct

surface coal mining operations on the Federal lease. NREPC will

reserve the right to amend or rescind any requirements of the permit

to conform with any terms or conditions imposed by the Secretary in

the approval of the mining plan.

After making its decision on the PAP, NREPC will send a notice

to the applicant, OSM, the Federal land management agencies, and any

other agency with jurisdiction or responsibility over Federal lands

affected by the operations proposed in the PAP. A copy of the permit

and written findings will be provided to OSM upon request.

F. Review Procedures for Permit Revisions; Renewals; and Transfer,

Assignment, or Sale of Permit Rights

Any permit revision or renewal for a surface coal mining and

reclamation operation on Federal lands will be reviewed and

approved, or disapproved, by NREPC after consultation with OSM on

whether such revision or renewal constitutes a mining plan

modification pursuant to 30 CFR 746.18. OSM will inform NREPC within

10 calendar days of receiving a copy of a proposed permit revision

or renewal, whether the permit revision or renewal constitutes a

mining plan modification.

Transfer, assignment, or sale of permit rights on Federal lands

shall be processed in accordance with the Program and 30 CFR

740.13(e).

Article VII: Inspections

NREPC will conduct inspections of all surface coal mining and

reclamation operations on Federal lands, in accordance with 30 CFR

740.4(c)(5) and the Program and prepare and file inspection reports

in accordance with the Program. NREPC, subsequent to conducting any

inspection pursuant to 30 CFR 740.4(c)(5), and in a timely fashion

which will not exceed 45 calendar days, will file with OSM's

Lexington Field Office a legible copy of the completed State

inspection report.

NREPC will be the point of contact and primary inspection

authority in dealing with the operator concerning operations and

compliance with the requirements covered by this Agreement, except

as described hereinafter. Nothing in this Agreement will prevent

inspections by authorized Federal or State land management agencies

for purposes other than those covered by this Agreement. The

Department of the Interior acting through OSM, the Federal land

management agency or any other agency with jurisdiction or

responsibility over Federal lands to be affected under the proposed

PAP, may conduct any inspections necessary to comply with

obligations under 30 CFR Parts 842 and 843 and any laws other than

the Act.

OSM will give NREPC reasonable notice of its intent to conduct

an inspection under 30 CFR 842.11 in order to provide NREPC

inspectors with an opportunity to accompany OSM inspectors. When OSM

is responding to a citizen complaint of an imminent danger to the

public health and safety, or of significant, imminent environmental

harm to land, air or water resources pursuant to 30 CFR

842.11(b)(1)(ii)(c), it will contact NREPC and provide the

opportunity for a joint Federal/State inspection. Inability of NREPC

to make an immediate joint inspection will not be cause for OSM to

delay a Federal inspection where a citizen has alleged, and OSM has

reason to believe, that an imminent danger to the public health and

safety, or significant, imminent environmental harm to land, air or

water resources exists. All citizen complaints which do not involve

an imminent danger or significant, imminent environmental harm will

be referred to NREPC for action in accordance with OSM regulations,

policies, and procedures.

Article VIII: Enforcement

NREPC will have primary enforcement authority under the Act

concerning compliance with the requirements of this Agreement and

the Program in accordance with 30 CFR 740.4(c)(5). Enforcement

authority given to the Secretary under other Federal laws and

Executive Orders including, but not limited to, those listed in

Appendix A (attached) is reserved to the Secretary.

During any joint inspections by OSM and NREPC, NREPC will have

primary responsibility for enforcement procedures including issuance

of orders of cessation, notices of violation, and assessment of

penalties. NREPC will inform OSM prior to issuance of any decision

to suspend or revoke a permit on Federal lands.

During any inspection made solely by OSM or any joint inspection

where NREPC and OSM fail to agree regarding the propriety of any

particular enforcement action, OSM may take any enforcement action

necessary to comply with 30 CFR Parts 843, 845, and 846. Such

enforcement action will be based on the standards in the Program,

the Act, or both, and will be taken using the procedures and penalty

system contained in 30 CFR Parts 843, 845, and 846.

[[Page 53260]]

NREPC and OSM will within 5 calendar days notify each other of

all violations of applicable laws, regulations, orders, or approved

mining permits subject to this Agreement, and of all actions taken

with respect to such violations.

Personnel of NREPC and OSM will be mutually available to serve

as witnesses in enforcement actions taken by either party.

This Agreement does not affect or limit the Secretary's

authority to enforce violations of Federal laws other than the Act.

Article IX: Bonds

NREPC and the Secretary will require each permittee who conducts

operations on Federal lands to submit a performance bond payable to

the State of Kentucky for an amount adequate to cover the operator's

responsibilities under the Act and Program. Such performance bond

will be conditioned upon compliance with all requirements of the

Act, the Program, State rules and regulations, and any other

requirements imposed by the Department of the Interior. Such bond

will state on its face that in the event the Federal Lands

Cooperative Agreement between Kentucky and the U.S. Department of

the Interior is terminated, the portion of the bond covering the

Federal lands increment(s) shall be assigned to the United States.

The bond shall also state that if subsequent to the forfeiture of

the bond, the Cooperative Agreement is terminated, any unspent or

uncommitted proceeds of the portion of the bond covering the Federal

lands increment(s) shall be assigned to and forwarded to the United

States. NREPC will advise OSM within 30 calendar days of any

adjustments to the performance bond made pursuant to the Program.

Prior to releasing the permittee from any obligation under such

bond for surface coal mining operations involving leased Federal

coal, NREPC will obtain the concurrence of OSM. OSM concurrence will

include coordination with the Federal land management agency and any

other agency with jurisdiction or responsibility over Federal lands

affected by the surface coal mining and reclamation operation.

Submission of a performance bond does not satisfy the

requirements for a Federal lease bond required by 43 CFR Subpart

3474 or lessee protection bond required in addition to a performance

bond, in certain circumstances, by Section 715 of the Act. Where

Federal lease bonds or protections are required, OSM or the

appropriate Federal agency is responsible for the collection and

maintenance of such bonds.

Article X: Designating Areas Unsuitable for All or Certain Types of

Surface Coal Mining and Reclamation Operations and Activities,

Valid Existing Rights (VER), and Compatibility Determinations

A. Unsuitability Petitions

1. Authority to designate Federal lands as unsuitable for mining

pursuant to a petition is reserved to the Secretary.

2. When either NREPC or OSM receives a petition to designate

land areas unsuitable for all or certain types of surface coal

mining operations that could impact adjacent Federal or non-Federal

lands pursuant to Section 522(c) of the Act, the agency receiving

the petition will notify the other agency of receipt within 5

calendar days and of the anticipated schedule for reaching a

decision, and request and fully consider data, information and

recommendations of the other agency. OSM will coordinate with the

Federal land management agency and any other agency with

jurisdiction or responsibility over Federal lands within or adjacent

to the petition area and will solicit comments from these agencies.

B. VER and Compatibility Determinations

The following actions will be taken when requests for

determinations of VER pursuant to Section 522(e)(1) or (2) of the

Act or for determinations of compatibility pursuant to Section

522(e)(2) of the Act are received:

1. For Federal lands where proposed operations are prohibited or

limited by Section 522(e)(1) or (2) of the Act and 30 CFR 761.11(a)

or (b), OSM will make the VER determination.

2. OSM will process requests for determinations of compatibility

under Section 522(e)(2) of the Act and 30 CFR 761.11(b) and

761.12(c).

Article XI: Termination of Cooperative Agreement

This Agreement may be terminated by the Governor or the

Secretary under the provisions of 30 CFR 745.15.

Article XII: Reinstatement of Cooperative Agreement

If this Agreement has been terminated in whole or in part, it

may be reinstated under the provisions of 30 CFR 745.16. The

Secretary reserves the powers and authority specified in 30 CFR

745.13.

Article XIII: Amendment of Cooperative Agreement

This Agreement may be amended by mutual agreement of the

Governor and the Secretary in accordance with 30 CFR 745.14.

Article XIV: Changes in State or Federal Standards

The Secretary or NREPC may, from time to time, promulgate new or

revised performance or reclamation requirements or enforcement and

administrative procedures. Each party will, if it determines it to

be necessary to keep this Agreement in force, change or revise its

regulations or request necessary legislative action.

Such changes will be made under the procedures of 30 CFR Part

732 for changes to the Program and under the procedures of Section

501 of the Act for changes to the Federal lands program.

NREPC and OSM will provide each other with copies of any changes

to their respective laws, rules, regulations, policy statements,

guidelines or standards pertaining to the enforcement and

administration of this Agreement.

Article XV: Changes in Personnel and Organization

Each party to this Agreement will notify the other, when

necessary, of any changes in personnel, organization and funding, or

other changes that may affect the implementation of this Agreement

to ensure coordination of responsibilities and facilitate

cooperation.

Article XVI: Reservation of Rights

This Agreement will not be construed as waiving or preventing

the assertion of any rights in this Agreement that the State or the

Secretary may have under laws other than the Act or their

regulations, including but not limited to those listed in Appendix

A.

Dated: August 18, 1998.

Paul E. Patton,

Commonwealth of Kentucky.

Dated: September 24, 1998.

Bruce Babbitt,

Secretary of the Interior.

Appendix A

1. The Federal Land Policy and Management Act, 43 U.S.C. 1701 et

seq., and implementing regulations.

2. The Mineral Leasing Act of 1920, 30 U.S.C. 181 et seq., and

implementing regulations, including 43 CFR Part 3480.

3. The National Environmental Policy Act of 1969, 42 U.S.C. 4321

et seq., and implementing regulations, including 40 CFR Part 1500.

4. The Endangered Species Act, 16 U.S.C. 1531 et seq., and

implementing regulations, including 50 CFR Part 402.

5. The Fish and Wildlife Coordination Act, as amended, 16 U.S.C.

661 et seq., 48 Stat. 401.

6. The Bald and Golden Eagle Protection Act of 1940, as amended,

16 U.S.C. 668-668d, and implementing regulations.

7. The Migratory Bird Treaty Act, as amended, 16 U.S.C. 701-718h

et seq.

8. The National Historic Preservation Act of 1966, 16 U.S.C. 470

et seq., and implementing regulations, including 36 CFR Part 800.

9. The Clean Air Act, 42 U.S.C. 7401 et seq., and implementing

regulations.

10. The Federal Water Pollution Control Act, 33 U.S.C. 1251 et

seq., and implementing regulations.

11. The Resource Conservation and Recovery Act of 1976, 42

U.S.C. 6901 et seq., and implementing regulations.

12. The Reservoir Salvage Act of 1960, amended by the

Preservation of Historical and Archaeological Data Act of 1974, 16

U.S.C. 469 et seq.

13. Executive Order 11593 (May 13, 1971), Cultural Resource

Inventories on Federal Lands.

14. Executive Order 11988 (May 24, 1977), for flood plain

protection.

15. Executive Order 11990 (May 24, 1977), for wetlands

protection.

16. The Mineral Leasing Act for Acquired Lands, 30 U.S.C. 351 et

seq., and implementing regulations.

17. The Stock Raising Homestead Act of 1916, 43 U.S.C. 291 et

seq.

18. The Archaeological Resources Protection Act of 1979, 16

U.S.C. 470aa et seq., as amended.

19. The Constitution of the United States.

20. The Surface Mining Control and Reclamation Act of 1977, 30

U.S.C. 1201 et seq.

21. 30 CFR Chapter VII.

22. The Constitution of the Commonwealth of Kentucky and State

Law.

[FR Doc. 98-26491 Filed 10-1-98; 8:45 am]

BILLING CODE 4310-05-P