Valid Existing Rights
Federal RegisterDec 17, 1999
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DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation and Enforcement
30 CFR Parts 740, 745, 761, 762, 772, 773, 778, 780, and 784
RIN 1029-AB42
Valid Existing Rights
AGENCY: Office of Surface Mining Reclamation and Enforcement (OSM),
Interior.
ACTION: Final rule and record of decision.
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SUMMARY: This rule redefines the circumstances under which a person has
valid existing rights (VER) to conduct surface coal mining operations
on lands listed in section 522(e) of the Surface Mining Control and
Reclamation Act of 1977 (SMCRA or ``the Act''). Section 522(e)
prohibits or restricts surface coal mining operations on certain lands,
including, among other areas, units of the National Park System,
Federal lands in national forests, and buffer zones for public parks,
public roads, occupied dwellings, and cemeteries. The rule also
establishes requirements for submitting and processing requests for VER
determinations for those lands. Finally, the rule modifies the
exception for existing operations; revises the procedures for
compatibility findings for surface coal mining operations on Federal
lands in national forests; and establishes requirements governing coal
exploration activities on the lands listed in section 522(e) of SMCRA.
Adoption of this rule removes all existing suspensions affecting 30 CFR
part 761.
EFFECTIVE DATE: January 18, 2000.
FOR FURTHER INFORMATION CONTACT: Dennis Rice, Office of Surface Mining
Reclamation and Enforcement, Room 115, South Interior Building, 1951
Constitution Avenue, NW, Washington, DC 20240. Telephone: (202) 208-
2829. E-mail address: [email protected]. Additional information
concerning OSM, this rule, and related documents may be found on OSM's
home page on the Internet at http://www.osmre.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. How did we obtain and consider public input?
II. What general comments did we receive on the proposed rule?
III. How does the final rule differ stylistically from the proposed
rule?
IV. In what context does the term VER appear in SMCRA?
V. What is the legislative history of the VER provision in section
522(e)?
VI. How did we previously define or attempt to define VER?
VII. Section 761.5: How are we defining VER in this final rule?
A. Introductory Language.
B. Paragraph (a): Property Rights Demonstration.
C. Paragraph (b): Primary Standards for VER.
1. What alternatives did we consider?
2. Why did we select the good faith/all permits standard?
3. What comments did we receive regarding takings issues
concerning the good faith/all permits standard?
4. Why did we reject the takings standard?
5. Why did we reject the ownership and authority standard?
D. Paragraph (b)(2): ``Needed for and Adjacent'' Standard.
1. What is the history of this standard?
2. How did we propose to revise this standard in 1997?
3. How does the standard in the final rule differ from the one
that we proposed in 1997?
4. What comments did we receive on the proposed standard and how
did we dispose of them?
E. Paragraph (c): VER Standards for Roads.
F. How does the definition address VER for lands that come under
the protection of section 522(e) after August 3, 1977?
VIII. How does our definition of VER compare with VER under other
Federal statutes?
IX. Are VER transferable?
X. Sections 740.4, 745.13, and 761.14(a): Who is responsible for VER
determinations for non-Federal lands within section 522(e)(1) areas?
A. Statutory Background and Rulemaking History.
B. What alternatives did we consider?
C. Which alternative are we adopting?
XI. Sections 740.11 and 761.14(a): Which VER definition (State or
Federal) applies to lands listed in section 522(e)(1) and (e)(2) of
the Act?
XII. What other changes are we making in the Federal lands program
regulations in 30 CFR Parts 740 and 745?
XIII. Why are we removing the definition of ``surface coal mining
operations which exist on the date of enactment'' from 30 CFR 761.5?
XIV. Why are we adding definitions of ``we'' and ``you'' and their
grammatical forms to 30 CFR 761.5?
XV. How have we revised 30 CFR 761.11, which is the regulatory
counterpart to the prohibitions and limitations of section 522(e) of
the Act?
XVI. Section 761.12: Which operations qualify for the exception for
existing operations?
XVII. Why are we removing the prohibitions in former 30 CFR
761.11(h)?
XVIII. Why did we reorganize former 30 CFR 761.12 as Secs. 761.13
through 761.17 and 762.14?
XIX. Section 761.13: How have we revised the procedural requirements
for compatibility findings for surface coal mining operations on
Federal lands in national forests?
XX. How do 30 CFR 761.14 and 761.15, which concern waivers for
buffer zones for public roads and occupied dwellings, differ from
former 30 CFR 761.12(d) and (e)?
XXI. Section 761.16: What are the submission requirements for
requests for VER determinations and how will these requests be
processed?
A. In what major ways does the final rule differ from the
proposed rule?
1. Role of Federal Surface Management Agencies.
2. Handling of Situations Involving Property Rights Disputes.
3. Action on Incomplete Requests.
4. Administrative Completeness Reviews.
5. Notification Requirements for Lands Listed in 30 CFR
761.11(a).
B. Paragraph (a): To which agency must you submit a request for
a VER determination?
C. May a request for a VER determination be submitted separately
from a permit application?
D. Paragraph (b): What information must you include in a request
for a VER determination?
E. Paragraph (c): How will the agency initially review my
request?
F. Paragraph (d): What notice and comment requirements apply to
the VER determination process?
G. Paragraph (e): How will a decision be made?
H. Paragraph (f): How may a VER determination be appealed?
I. Paragraph (g): To what extent and in what manner must records
related to the VER determination process be made available to the
public?
J. May the regulatory authority reconsider VER determinations
during review of a subsequent permit application?
XXII. How does new 30 CFR 761.17, which concerns regulatory
authority obligations at the time of permit application review,
differ from its predecessor provisions in former 30 CFR 761.12?
XXIII. How and why are we revising Part 762, which contains criteria
for the designation of lands as unsuitable for surface coal mining
operations?
XXIV. Section 772.12: What are the requirements for coal exploration
on lands designated unsuitable for surface coal mining operations?
XXV. Technical Amendments to Parts 773, 778, 780, and 784.
XXVI. What effect will this rule have in Federal program States and
on Indian lands?
XXVII. How will this rule affect State programs?
XXVIII. How does this rule impact information collection
requirements?
XXIX. Procedural Matters.
A. Executive Order 12866: Regulatory Planning and Review.
B. Regulatory Flexibility Act.
[[Page 70767]]
C. Small Business Regulatory Enforcement Fairness Act.
D. Unfunded Mandates Reform Act of 1995.
E. Executive Order 12630: Takings.
F. Executive Order 13132: Federalism.
G. Executive Order 12988: Civil Justice Reform.
H. Paperwork Reduction Act.
I. National Environmental Policy Act of 1969 and Record of
Decision.
I. How Did We Obtain and Consider Public Input?
This final rule is based on a proposed rule that we published for
public review and comment on January 31, 1997 (62 FR 4836). We also
posted the proposed rule and associated documents on our home page on
the Internet. In response to requests from the public, we held public
hearings on the proposed rule in Athens, Ohio; Billings, Montana;
Washington, Pennsylvania; and Whitesburg, Kentucky. The comment period
was originally scheduled to close June 2, 1997, but, in response to
several requests, we extended the deadline until August 1, 1997. See 62
FR 29314, May 30, 1997.
In addition to the testimony offered at the four hearings, we
received approximately 75 written comments specific to the proposed
rule: 31 from private citizens, 28 from companies and associations
affiliated with the mining industry, 4 from environmental
organizations, and 11 from Federal, State, and local governmental
entities and associations. In developing the final rule, we considered
all comments that were germane to the proposed rule. In this preamble,
we discuss how we revised the proposed rule in response to comments. We
also explain the disposition of those comments that did not result in a
change in the proposed rule.
II. What General Comments Did We Receive on the Proposed Rule?
Many comments from private citizens expressed general opposition to
mining on public lands, especially in national parks and national
forests. Since SMCRA allows mining on these lands under certain
circumstances, we have no authority to adopt a regulation that would
impose an absolute prohibition on mining on these lands.
One commenter representing several States disputed the need for any
rulemaking, arguing that the present system is working well and is
consistent with the principles of State primacy under SMCRA. However,
some commenters representing individual State regulatory authorities
expressed support for the clarity and additional specificity that the
rule would provide. Furthermore, two Federal district courts have
ordered OSM to take steps to promulgate a final rule defining VER.
Belville Mining Co. v. Lujan, No. C-1-89-790 (S.D. Ohio 1991) and
Helmick v. U.S., No. 95-0115 (N.D. W.Va. 1997).
Finally, we believe that a Federal definition is necessary to
establish a reference point for State definitions and to ensure that
the lands listed in section 522(e) of the Act are protected as Congress
intended. The good faith/all permits standard that we are adopting as
part of the VER definition in this final rule will cause relatively
little disruption to existing State regulatory programs. Twenty of the
24 States with approved regulatory programs under section 503 of the
Act already rely upon a good faith/all permits or all permits standard
for VER.
One commenter requested that the final rule and related documents
consistently use the term ``type'' to refer to the distinction between
surface and underground mining. Similarly, the commenter stated that
the term ``method'' should refer only to the specific techniques
employed for either surface or underground mining operations; e.g.,
area, contour or mountaintop removal for surface mining operations and
longwall or room and pillar for underground mining operations. We have
endeavored to apply these terms in the manner recommended, although
``type'' may also mean ``method,'' depending upon context, deed
nuances, and the vagaries of State property law.
III. How Does the Final Rule Differ Stylistically From the Proposed
Rule?
On June 1, 1998, President Clinton issued an Executive Memorandum
requiring the use of plain language in all proposed and final
rulemaking documents published after January 1, 1999. The memorandum
provides the following description of plain language:
Plain language requirements vary from one document to another,
depending on the intended audience. Plain language documents have
logical organization, easy-to-read design features, and use:
Common, everyday words, except for necessary technical
terms;
``you'' and other pronouns;
the active voice, and
short sentences.
The President's memorandum includes an exception for final rules
based upon proposed rules published before January 1, 1999. While that
exception applies to this final rule, we have incorporated some plain
language principles in this rule, as required by a memorandum dated
June 10, 1998, from the Office of the Secretary of the Department of
the Interior. Thus, the final rule and preamble use the pronouns
``we,'' ``us,'' and ``our'' to refer to OSM, and the pronouns ``you''
and ``your'' to refer to a person who claims or seeks to obtain an
exception or waiver authorized under 30 CFR 761.11 or section 522(e) of
the Act. In all other cases, we specifically identify the person or
agency to which the rule or preamble refers. Other changes include
avoidance of the word ``shall.'' Instead, the final rule and preamble
use ``must'' to indicate an obligation, ``will'' to identify a future
event, and ``may not'' to convey a prohibition.
We recognize that more could be done to comply more fully with
plain language principles. However, further changes would require a
wholesale revision of the entire regulation, which would delay
considerably publication of a final rule. For this reason, we have
deferred a more extensive plain language rewrite.
IV. In What Context Does the Term VER Appear in SMCRA?
As summarized below, section 522(e) of SMCRA, 30 U.S.C. 1272(e),
prohibits or restricts surface coal mining operations on certain lands
after the date of SMCRA's enactment (August 3, 1977). However, the Act
specifies that these prohibitions and restrictions are ``subject to
valid existing rights.'' It further provides that these prohibitions
and restrictions do not apply to operations in existence on the date of
enactment.
Section 522(e)(1) protects all lands within the boundaries of units
of the National Park System; the National Wildlife Refuge System; the
National System of Trails; the National Wilderness Preservation System;
the Wild and Scenic Rivers System, including study rivers designated
under section 5(a) of the Wild and Scenic Rivers Act; and National
Recreation Areas designated by Act of Congress.
Section 522(e)(2) prohibits surface coal mining operations on
Federal lands within the boundaries of any national forest unless the
Secretary finds that there are no significant recreational, timber,
economic, or other resources that may be incompatible with such
operations. If the Secretary makes this finding, the Act allows the
approval of surface operations and impacts incident to an underground
mine on any national forest lands. In addition, if the Secretary makes
this finding, the Act allows approval of any type of surface coal
mining operations on national forest lands west of the 100th meridian
(except the Custer National Forest) that lack significant forest cover,
provided
[[Page 70768]]
the proposed operations comply with certain statutes.
Section 522(e)(3) prohibits surface coal mining operations that
would adversely impact publicly owned parks and properties listed on
the National Register of Historic Places. However, this paragraph of
the Act provides a waiver for surface coal mining operations that
receive joint approval from the regulatory authority and the agency
with jurisdiction over the park or place.
Section 522(e)(4) prohibits surface coal mining operations within
100 feet of the outside right-of-way line of any public road, but it
provides a mechanism and criteria for approval of exceptions from this
prohibition. It also exempts mine access and haulage roads at the point
of intersection with a public road.
Section 522(e)(5) prohibits surface coal mining operations within
100 feet of a cemetery or within 300 feet of a public building, school,
church, community or institutional building, or public park. This
paragraph also prohibits operations within 300 feet of an occupied
dwelling, but it allows the owner of the dwelling to waive the
prohibition.
The term VER also appears in section 601(d) of SMCRA, which
pertains to the designation of Federal lands as unsuitable for mining
operations for minerals or materials other than coal. Specifically,
this paragraph of the Act provides that ``[v]alid existing rights shall
be preserved and not affected by such designation.''
SMCRA does not define or explain the meaning of VER in the context
of either section 522(e) or section 601. Today's rulemaking addresses
VER only in the context of section 522(e).
V. What Is the Legislative History of the VER Provision in Section
522(e)?
The legislative history of section 522(e) in general and the VER
exception in particular is sparse. In this portion of the preamble, we
either quote or summarize all the legislative history that we found
pertinent to the rationale for the final rule and disposition of
comments. The other portions of this preamble discuss how we and others
interpret the legislative history, and how these interpretations
influenced the decision-making process.
Language in Previous Versions of SMCRA
The phrase ``subject to valid existing rights'' and the current
outline of section 522(e) first appear in the conference committee
version of the 1974 precursor to SMCRA. Prior to the conference
committee changes, the Senate bill (S. 425) excluded only existing
operations from the prohibitions of what is now section 522(e). The
House bill (H.R. 11500) contained an exception only for certain
situations in which a person had made substantial legal and financial
commitments in an existing mine before September 1, 1973--and that
exception applied only to the lands listed in what is now paragraphs
(e)(1) and (e)(2) of section 522 of the Act.
Committee Reports
The 1977 conference committee report on the legislation that became
SMCRA does not address VER. See H.R. Conf. Rep. No. 95-493, at 110-11
(1977). Thus, the most authoritative source in the legislative history
of SMCRA does not clarify congressional intent with respect to the
meaning of VER under section 522(e).
The 1974 conference committee report explains that the addition of
the phrase ``subject to valid existing rights'' to section 522(e) was
intended to address surface coal mining operations on national forest
lands. H.R. Conf. Rep. No. 93-1522, at 85 (1974). Subsequent committee
reports on succeeding versions of SMCRA contain either substantively
identical or abbreviated discussions of this topic without further
elucidation on the meaning of VER under section 522(e). See S. Rep. No.
94-28, at 220 (1975); H.R. Conf. Rep. No. 94-189, at 85 (1975); H.R.
Rep. No. 94-896, at 47-48 (1976); H.R. Rep. No. 94-1445, at 47 (1976);
H.R. Rep. No. 95-218, at 95 (1977); and S. Rep. No. 95-128, at 94-95
(1977). Therefore, for purposes of providing background for this
rulemaking, we will quote only the discussions from the most recent
committee reports, which pertain to the legislation that the President
ultimately signed into law.
The committee report on H.R. 2, the House version of the
legislation that ultimately became SMCRA, contains the following
passage:
The language ``subject to valid existing rights'' in section
522(e) is intended, however, to make clear that the prohibition of
strip mining on the national forests is subject to previous court
interpretations of valid existing rights. For example, in West
Virginia's Monongahela National Forest, strip mining of privately
owned coal underlying federally owned surface has been prohibited as
a result of United States v. Polino, [131] F. Supp. [772] (1955). In
this case the court held that ``stripping was not authorized by
mineral reservation in a deed executed before the practice was
adopted in the county where the land lies, unless the contract
expressly grants stripping rights by use of direct or clearly
equivalent words. The party claiming such rights must show usage or
custom at the time and place where the contract is to be executed
and must show that such rights were contemplated by the parties.''
The phrase ``subject to valid existing rights'' is thus in no way
intended to open up national forest lands to strip mining where
previous legal precedents have prohibited stripping.
H.R. Rep. No. 95-218, at 95 (1977).
The committee report on S. 7, the Senate version of the legislation
that ultimately became SMCRA, contains a similar discussion:
All of these bans listed in subsection (e) are subject to valid
existing rights. This language is intended to make clear that the
prohibition of strip mining on the national forests is subject to
previous state court interpretation of valid existing rights. The
language of 422(e) [now 522(e)] is in no way intended to affect or
abrogate any previous State court decisions. The party claiming such
rights must show usage or custom at the time and place where the
contract is to be executed and must show that such rights were
contemplated by the parties. The phrase ``subject to valid existing
rights'' is thus in no way intended to open up national forest lands
to strip mining where previous legal precedents have prohibited
stripping.
S. Rep. No. 95-128, at 94-95 (1977).
Congressman Manuel Lujan, Jr. attached the following statement of
separate views to the House committee report:
Much has been said about the problem presented by the language
contained in Sec. 522(e) of H.R. 2 * * *.
As the Committee Report indicates, this section's limitation
that the prohibition is ``subject to valid existing rights'' is not
intended to open up national forest lands to strip mining when
previous legal precedents have prohibited stripping. Naturally, the
bill's language is also subject to the corollary that it is not
intended to preclude mining where the owner of the mineral has the
legal right to extract the coal by surface mining method[s].
Concerns in this area are not merely hypothetical. For example,
in the establishment of the national forest system in many areas of
the country, grantors sold the land to the United States government
for inclusion in a national forest, but reserve[d] mineral rights
for themselves and deeds of conveyance for which the United States
was a party. The language of Sec. 522(e) itself, the thrust of the
report discussion and common sense all dictate that the only logical
interpretation of Sec. 522(e) is that enactment of this legislation
does not disrupt the relationship between the owner of the coal and
the Federal government.
I believe, therefore, that it would be contrary to the intention
of the Act, and a misuse of the Act, for the Forest Service (or
anyone else) to argue that [SMCRA] somehow modifies the relationship
between the owner of the surface and subsurface rights. Clearly,
alienation by sale, assignment, gift, or inheritance of the property
right of the coal is not affected by the Act nor is the legal right
[[Page 70769]]
to mine the coal in any way modified if such right existed prior to
enactment of the Act.
H.R. Rep. No. 95-218, at 189 (1977).
Part VII.C.5. of this preamble contains a discussion of the
significance of Congressman Lujan's statements.
Floor Debate (Congressional Record)
In remarks made on the House floor during debate on the 1975
precursor to SMCRA, Congressman John Dingell questioned the need for
the phrase ``subject to valid existing rights,'' stating that ``it is
extra verbiage and really has no meaning.'' 121 Cong. Rec. H7048 (March
18, 1975) (statement of Rep. Dingell). He offered an amendment that
would have removed this phrase and replaced it with a provision
allowing surface coal mining operations in national forests and
grasslands whenever the deeds conveying lands to the United States
reserved the coal and specifically provided for the use of surface
mining methods. The House rejected the amendment. 121 Cong. Rec. H7050
(March 18, 1975).
During floor debate on the same bill, Congressman Delbert Latta
asked ``whether this legislation affects in any way the rights of an
owner of mineral rights situated below land owned by the Federal
Government.'' 121 Cong. Rec. H6679 (March 14, 1975). In response,
Congressman Morris Udall cited section 714 of SMCRA, which he
characterized as requiring surface owner consent before any underlying
Federal coal may be mined. Congressmen Latta, Udall, and others then
engaged in the following exchange:
Mr. LATTA. That takes care of the Federal Government when it
owns the mineral rights, but I have reference to the opposite
situation where the surface is owned by the Federal Government, but
the mineral rights have been retained by a private owner.
Mr. UDALL. We did not deal with that problem. I do not know of
any instance in which it would arise or be affected.
Mr. LATTA. It is not covered by this bill.
Mr. OTTINGER. Mr. Speaker, if the gentleman would yield, why
would not the rights of a surface owner be protected where the
mineral rights were not owned by the Federal Government, but were
owned privately?
Mr. UDALL. The problem we dealt with was the situation in the
instance where private interests owned the surface but the Federal
Government owned the coal.
* * * * *
Mr. OTTINGER. If the gentleman will yield further, I think there
are situations where private owners own both the surface and the
coal, and there is no protection provided.
Mr. UDALL. In that case the whole thrust of the bill is to
regulate how to mine coal, whatever the ownership is.
* * * * *
Mr. LATTA. * * * [I]f I understood what you said, this bill does
not deal with the situation propounded in my question, meaning where
a private citizen has sold the surface to the Federal Government and
has retained the mineral rights. This bill would not in any way
affect the mineral rights of that private citizen?
Mr. UDALL. This is a bill that deals with how one mines coal in
that situation and every other situation, but we do not attempt to
change property rights in the situation the gentleman talks about
and thus the mineral rights are not affected.
121 Cong. Rec. H6679 (1975).
Part VII.C.5. of this preamble includes a discussion of the
significance of this colloquy.
Some commenters referred to a floor debate on a proposed amendment
to section 601 of H.R. 2, the House bill that eventually became SMCRA.
(Section 601 provides for the designation of Federal lands as
unsuitable for the mining of minerals and materials other than coal.)
Congressman Teno Roncalio proposed an amendment to delete the sentence
in section 601(d) that reads, ``[v]alid existing rights shall be
preserved and not affected by such designation.'' Congressman Udall
opposed the amendment ``because it takes from the bill a statement that
valid legal rights should be preserved. I do not think we should do
that without paying compensation under the fifth amendment [sic].'' 123
Cong. Rec. H12878 (1977) (April 29, 1977) (statement of Rep. Udall).
The House rejected the amendment and retained the language at issue.
However, as discussed in parts VII.C.4. and VIII of this preamble, we
now find this colloquy to be of little relevance to the meaning of VER
under section 522(e).
VI. How Did We Previously Define or Attempt To Define VER?
The 1978 Proposed Rule
In our first attempt to define VER after the enactment of SMCRA, we
proposed to adopt different VER standards for different categories of
lands. For lands protected under paragraphs (e)(1) and (e)(2) of
section 522, we proposed a form of the ownership and authority
standard. Specifically, the proposed rule would have defined VER as:
Those property rights in existence on August 3, 1977, that were
created by a legally binding conveyance, lease, deed, contract, or
other document which expressly authorizes the applicant to produce
coal by surface coal mining operations and the exercise of such
rights cannot, under applicable State or Federal law, be conditioned
or denied in the manner provided in [30 CFR Part 761].
For lands protected under paragraphs (e)(3) through (e)(5) of
section 522, we proposed to limit VER to those lands for which a person
had obtained all State and Federal permits needed to conduct surface
coal mining operations as of August 3, 1977. The preamble to the
proposed rule indicates that we presumed that the first standard would
apply only to Federal lands, while the second standard would apply only
to State and privately owned lands. See 41 FR 41662, 41686, 41826,
September 18, 1978.
The 1979 Final Rule
After evaluating the comments received on the 1978 proposed rule,
we decided that the proposed ``dual definition was not really workable
because it did not distinctly separate Federal lands from private
lands.'' 44 FR 14993, March 13, 1979. Section 522(e)(1) includes both
Federal and non-Federal lands, and paragraphs (e)(3) through (e)(5) of
that section apply regardless of land ownership. Except for paragraph
(e)(2), Congress did not establish Federal versus non-Federal ownership
as a criterion for protection under section 522(e). Nor did Congress
prescribe different levels of protection under section 522(e) for
Federal and non-Federal lands.
Accordingly, the final rule promulgated in 1979 contains a single
definition of VER that applies to all lands listed in section 522(e).
In developing this definition, we relied upon (1) a belief that
Congress created the VER exception as a means of avoiding compensable
takings of private property and (2) the principle that the extent to
which the Federal government and States may prohibit or restrict the
exercise of private property rights without providing compensation is
determined by case law established pursuant to the Fifth and Fourteenth
Amendments to the Constitution. Specifically, we ``endeavored to
determine the point at which payment would be required because a taking
had occurred, then to define `valid existing rights' in those terms,
i.e., those rights which cannot be affected without paying
compensation.'' 44 FR 14992, March 13, 1979, col 1.
The definition provided that, except for haul roads, VER included
only those property rights in existence on August 3, 1977, the owners
of which either had obtained all necessary permits for the proposed
surface coal mining operation on or before August 3, 1977 (the ``all
permits'' standard), or could demonstrate that the coal for which the
exception was sought was both needed for and immediately adjacent to a
surface coal mining operation in existence on August 3, 1977 (the
[[Page 70770]]
``needed for and adjacent'' standard). See 44 FR 14902, 15342, March
13, 1979.
Litigation Concerning the 1979 Final Rule
The mining industry, the State of Illinois, the National Wildlife
Federation, and assorted environmental organizations all challenged the
validity of the 1979 definition. Industry and Illinois alleged that
this definition entailed a taking of property in violation of the Fifth
and Fourteenth Amendments. Because the plaintiffs presented no evidence
that the definition had caused actual loss or harm to a specific party,
the court declined to rule on the constitutionality of the definition
on the basis of a hypothetical claim. However, the court asserted that
a person who applies for all permits, but fails to receive one or more
through government delay, engenders the same investments and
expectations as a person who has obtained all permits. Specifically,
the court stated that ``a good faith attempt to have obtained all
permits before the August 3, 1977 cut-off date should suffice for
meeting the all permits test.'' In re Permanent Surface Mining
Regulation Litigation I, 14 Env't Rep. Cas. (BNA) 1083, 1091 (D.D.C.,
Feb. 26, 1980), (``PSMRL I, Round I'').
The industry plaintiffs appealed those portions of the district
court's decision in PSMRL I, Round I that were adverse to their
interests. However, the U.S. Court of Appeals for the Federal Circuit
remanded the appeal after the government informed the court that it was
reconsidering the 1979 definition. Thus, the court never reached a
decision on the merits of the appeal. The remand order specified that
the judgment of the District Court could not be considered final. See
In re Permanent Surface Mining Regulation Litigation, No. 80-1810,
Order of Remand (D.C. Cir., Feb. 1, 1983).
The 1980 Suspension Notice
To comply with the decision in PSMRL I, Round I, 14 Env't Rep. Cas.
(BNA) 1091 (1980), which partially remanded the all permits standard,
we suspended the 1979 definition of VER to the extent that it required
that all permits have been obtained before August 3, 1977. See 45 FR
51547-48, August 4, 1980. The suspension document stated that, pending
further rulemaking, we would interpret the definition as including the
court's suggestion that a good faith effort to obtain all permits by
that date should suffice to establish VER. This standard is known as
the ``good faith/all permits'' standard.
The 1982 Proposed Rule
On June 10, 1982 (47 FR 25278), we published a proposed rule
setting out six options for revising the definition of VER. These
options included the good faith/all permits standard, a mineral rights
ownership standard, a mineral rights ownership plus right to mine by
the method intended standard (the ``ownership and authority''
standard), and three variations on the latter two standards. Since the
proposed standards all attempted to establish a clearly defined
``bright-line'' test for VER, they became known as ``mechanical
tests.''
The 1983 Final Rule
Commenters criticized each option in the 1982 proposed rule as
either too broad or too narrow, and many argued that one or more of the
proposed options would result in a taking of property without just
compensation in violation of the Fifth and Fourteenth Amendments to the
Constitution. Because the Supreme Court has consistently declined to
prescribe set formulas for determining when a taking will occur, we
concluded that any mechanical test likely would be either over-
inclusive or under-inclusive of all potential takings that might result
from the section 522(e) prohibitions. Therefore, on September 14, 1983
(48 FR 41314), we adopted a definition of VER which provided, in part,
that a person has VER if a prohibition on surface coal mining
operations would result in a compensable taking of that person's
property interests under the Fifth and Fourteenth Amendments to the
Constitution. This standard is known as the ``takings'' standard.
The revised definition also (1) removed the requirement for a
demonstration of a property right to the coal on August 3, 1977, (2)
defined the ``needed for'' aspect of the needed for and adjacent
standard, and (3) added a provision (sometimes referred to as
``continually created VER'') to establish VER standards for lands that
come under the protection of section 522(e) after August 3, 1977. This
situation would arise, for example, when a park is created or expanded
or a protected structure is built after that date.
Litigation Concerning the 1983 Final Rule
The mining industry, the National Wildlife Federation, and assorted
environmental organizations all challenged the validity of the 1983
definition. The U.S. District Court for the District of Columbia
subsequently remanded most of that definition on procedural grounds.
The court held that the takings standard represented such a significant
departure from the options presented in the 1982 proposed rule that a
new notice and comment period was necessary to comply with the public
participation requirements of the Administrative Procedure Act, 5
U.S.C. 553. See In re Permanent Surface Mining Regulation Litigation
II, Round III--Valid Existing Rights, 22 Env't Rep. Cas. (BNA) 1557,
1564 (D.D.C. 1985) (``PSMRL II, Round III--VER''). The court also held
that the proposed rule failed to provide adequate notice that it would
expand the needed for and adjacent standard to include properties
acquired after the date of enactment of SMCRA (August 3, 1977).
Accordingly, the court remanded paragraphs (a) and (d)(2) of the
definition, which relied upon the takings standard to determine VER,
and the revised needed for and adjacent standard in paragraph (c) of
the definition to the Secretary for proper notice and comment.
The 1986 Suspension Notice
In response to the remand order in PSMRL II, Round III--VER, 22
Env't Rep. Cas. (BNA) at 1564 (1985), we suspended paragraphs (a) and
(c) of the 1983 definition of VER on November 20, 1986 (51 FR 41952,
41961). These paragraphs contained the takings standard and the revised
needed for and adjacent standard. We also suspended paragraph (d)(2) of
the definition to the extent that it relied upon the takings standard.
As discussed at 51 FR 41954-55, this action effectively reinstated the
1980 good faith/all permits standard and the 1979 needed for and
adjacent standard.
The preamble to the suspension notice stated that, with two
exceptions, we would use the VER definition in the applicable State or
Federal regulatory program when making VER determinations. As discussed
at 51 FR 41955, one of these exceptions occurs when a State definition
relies upon an all permits standard. In that case, we would apply the
State standard as if it included a good faith component. The second
exception involves State programs that include a takings standard for
VER. In those situations, the preamble stated that, pending
promulgation of a new Federal definition of VER, we would not process
requests for VER determinations involving lands within units of the
National Park System.
The 1988 Proposed Rule
On December 27, 1988 (53 FR 52374), we proposed the good faith/all
permits
[[Page 70771]]
standard and the ownership and authority standard as options for a
regulatory definition of VER. Under the ownership and authority
standard, a person could establish VER by demonstrating both a property
right to the coal and the right to mine it by the method intended, as
determined by State law. After evaluating the comments received, we
withdrew the entire proposed rule for further study on July 21, 1989
(54 FR 30557).
The 1990 VER Symposium
On April 3-4, 1990, we and the University of Kentucky College of
Law, in cooperation with the American Bar Association, cosponsored a
national symposium on the meaning of VER under section 522(e) of SMCRA.
Volume 5, Number 3 of the Journal of Mineral Law and Policy contains
the proceedings of this symposium. The participants provided extensive
analyses of takings jurisprudence and case law related to VER, but they
did not reach a consensus on how to define VER. The arguments presented
ranged from the theory that we could prohibit all mining in section
522(e) areas as a public nuisance or noxious use to the position that
Congress intended the VER exception to operate as complete protection
for all property rights in existence on August 3, 1977.
The Belville Litigation
In 1990, the Belville Mining Company, an Ohio mining firm, filed
suit against the Secretary of the Interior alleging that he had, among
other things:
Failed to perform a mandatory duty to promulgate the
definition of VER needed to implement section 522(e);
In lieu of regulations, issued various statements and
directives on VER, including the policy set forth in the November 20,
1986 suspension notice, without notice and comment in violation of the
Administrative Procedure Act; and
Made VER determinations relying on State regulations
identical to an invalidated Federal regulation.
See Belville Mining Co. v. Lujan, No. C-1-89-790 (S.D. Ohio 1991),
modified September 21, 1992 (``Belville I'').
In a July 22, 1991, decision, the court in Belville I ordered the
Secretary to begin proceedings to promulgate a final rule defining VER;
enjoined him from enforcing or applying the November 20, 1986
suspension notice or any temporary directive that extends the policy of
the suspension notice; and directed him to immediately begin
proceedings to disapprove State program definitions of VER that rely
upon the all permits standard. On September 21, 1992, pursuant to the
Government's motion for reconsideration, the court narrowed the portion
of its ruling concerning disapproval of State program definitions to
require only the disapproval of the Ohio program definition of VER
insofar as that definition affects Belville and its requests for VER
determinations. In doing so, the court accepted the Government's
argument that Federal remedy law prohibits the imposition of injunctive
remedies that are beyond the scope of the plaintiff's individual
injuries and related requests for VER determinations. Consequently, we
interpreted the decision barring use of the 1986 policy as applying
only to Ohio. The final rule that we are adopting today effectively
renders both the Belville I decision and the 1986 suspension notice
moot with respect to the applicable definition of VER.
The 1991 Proposed Rule
On July 18, 1991, we proposed to revise the definition of VER by
reinstating the takings standard, the good faith/all permits standard,
and the 1979 version of the needed for and adjacent standard. In
addition, we proposed to eliminate the separate standards for VER for
lands that come under the protection of section 522(e) after August 3,
1977. Instead, the proposed rule modified the other VER standards in
the definition to incorporate the concept that VER determinations
should reflect the circumstances that existed when the land came under
the protection of section 522(e), which may be later than August 3,
1977.
The Energy Policy Act
On October 24, 1992, the President signed the Energy Policy Act of
1992 (Pub. L. 102-486, 206 Stat. 2776) (``EPAct'') into law. Section
2504(b) of that law required adherence to the VER policy in the
November 20, 1986 suspension notice (51 FR 41952) for one year after
the date of enactment. That provision had the effect of staying
implementation of the July 1991 Belville I decision, as modified in
September 1992, and halting publication of a new final rule defining
VER based upon the 1991 proposed rule.
Appropriations Act Moratoriums
The EPAct provision expired on October 24, 1993. However, at the
Department's request, the appropriations acts for the Department of the
Interior and related agencies for fiscal years 1994 and 1995 each
included language that effectively placed a moratorium on adoption of a
new or revised Federal VER definition or disapproval of existing State
program definitions of VER. The last moratorium (section 111 of Pub. L.
103-332) lapsed on October 1, 1995. Congress did not include similar
language in any legislation for fiscal year 1996 or subsequent fiscal
years.
The 1997 Proposed Rule
After evaluating the comments received on the 1991 proposed rule
and taking intervening events into consideration, on January 31, 1997
(62 FR 4836), we withdrew the 1991 proposal and published a new,
extensively revised proposed rule concerning the definition of VER and
related issues. This proposal forms the basis for the final rule being
published today.
VII. Section 761.5: How Are We Defining VER in This Final Rule?
A. Introductory Language.
The definition of VER that we are adopting today as part of 30 CFR
761.5 describes VER as a set of circumstances under which a person may,
subject to regulatory authority approval, conduct surface coal mining
operations that section 522(e) of the Act and 30 CFR 761.11 would
otherwise prohibit. This language establishes the conceptual framework
within which the provisions of paragraphs (a) through (c) of the
definition must be applied.
In a change from the proposed rule, we have added the phrase
``subject to regulatory authority approval'' to emphasize that a person
with VER is not automatically entitled to conduct surface coal mining
operations on protected lands. One commenter appeared to believe
otherwise. For the same reason, we have added a sentence to the
introductory portion of the definition to clarify that, even if a
person has VER and thus is exempt from the prohibitions and limitations
of section 522(e) and 30 CFR 761.11, surface coal mining operations on
these lands are subject to all other pertinent requirements of the Act
and the applicable regulatory program. The VER exception does not
entitle a person to an exemption from any permitting requirements or
performance standards.
One commenter charged that by defining VER as a condition rather
than as a right, the proposed rule altered the essence of VER from a
recognition of property rights to a regulatory standard or condition
that a surface coal mining operation must meet prior to mining. We have
made a few essentially editorial changes in response to this
[[Page 70772]]
comment to clarify that VER means a set of circumstances (rather than
``conditions'') under which a person is exempt from the prohibitions
and restrictions of section 522(e) and 30 CFR 761.11 and may seek
approval from the regulatory authority to conduct surface coal mining
operations on those lands in accordance with standard regulatory
program requirements.
While property rights are an element of some of the standards for
VER, we do not agree with the commenter's claim that VER must be
defined solely in terms of property rights. Congress did not define
VER, and the legislative history of section 522(e) emphasizes that,
with certain exceptions, Congress intended to prohibit new surface coal
mining operations on the lands listed in that section. See, for
example, S. Rep. No. 95-128, at 55 (1977). We believe that these facts
argue against adoption of a rule that defines VER solely in terms of
property rights. Except for unleased Federally owned coal, such a rule
would present little or no impediment to surface coal mining operations
on the lands listed in section 522(e) of the Act. Thus, it would offer
little protection to those lands beyond the protection that the
permitting requirements and performance standards of the regulatory
program afford to all lands.
B. Paragraph (a): Property Rights Demonstration.
Paragraph (a) of the definition of VER in the final rule provides
that a person claiming VER for any type or component of surface coal
mining operations other than roads must demonstrate that a legally
binding conveyance, lease, deed, contract, or other document vests that
person with the right, as of the date that the land came under the
protection of section 522(e) of the Act and 30 CFR 761.11, to conduct
the type of surface coal mining operations intended. Interpretation of
the documents relied upon to establish property rights must be based
upon applicable State statutory or case law, unless otherwise provided
under Federal law. If no applicable law exists, interpretation of these
documents must reflect custom and generally accepted usage at the time
and place that the documents came into existence.
Under the final rule, a person need not necessarily provide a
property rights demonstration for roads used or constructed as part of
surface coal mining operations. Instead, a person may demonstrate VER
for roads using any of the standards in paragraph (c) of the
definition.
The final rule is substantively identical to the corresponding
provisions of the 1997 proposed rule, with one exception. We have added
a clause clarifying that the provision requiring the use of State law
to interpret documents does not apply if Federal law provides
otherwise, as may be the case if the documents were issued under the
Mineral Leasing Act or similar laws. In terms of organization, the
final rule differs slightly from the proposed rule in that, for reasons
of clarity and consistency with plain language principles, we have
segregated the property rights demonstration into a separate paragraph,
rather than including it in the same paragraph as the good faith/all
permits and needed for and adjacent standards.
The requirement for a property rights demonstration and the
provisions concerning interpretation of documents are consistent with
the legislative history of the Act, which indicates that Congress did
not intend to enlarge or diminish property rights under State law. See
H.R. Conf. Rep. No. 95-493, at 106 (1977); H.R. Rep. No. 95-218, at 95
(1977); and S. Rep. No. 95-128, at 94-95 (1977). The legislative
history frequently references United States v. Polino, 131 F. Supp. 772
(N.D. W.Va. 1955), in which the court held that the right to use
surface mining methods to recover privately owned coal underlying
Federal lands within the Monongahela National Forest depends upon the
language of the deed, the interpretation of which is a matter of State
law.
In addition, these provisions receive support from section
510(b)(6)(C) of SMCRA, which provides that, in cases where the private
mineral estate has been severed from the private surface estate, ``the
surface-subsurface legal relationship shall be determined in accordance
with State law,'' and that ``nothing in this Act shall be construed to
authorize the regulatory authority to adjudicate property rights
disputes.'' Language similar to the latter proviso also appears in the
right-of-entry provisions of section 507(b)(9) of the Act.
History
The requirement for a property rights demonstration has its origins
in paragraphs (a)(1) and (c) of the March 13, 1979 VER definition.
Paragraph (c) of that definition required that interpretation of the
terms of the documents be based not only upon usage and custom, but
also upon a showing that the parties to the document actually
contemplated a right to conduct the same underground or surface mining
activities for which the person claims VER. However, on November 27,
1979, in connection with the PSMRL I, Round I litigation, we published
a Federal Register notice stating that, as an alternative to the
language of paragraph (c), ``existing State law may be applied to
interpret whether the document relied upon establishes valid existing
rights.'' 44 FR 67942, November 27, 1979. This alternative reflected
the strong interest Congress expressed in deferring to State property
law when interpreting documents relating to property interests. See the
summary of and excerpts from the legislative history in Part V of this
preamble.
For reasons that the preamble does not explain, the revised VER
definition that we adopted on September 14, 1983, did not contain a
counterpart to the property rights demonstration required by paragraph
(a)(1) of the 1979 definition. However, the 1983 rule retained a
revised version of paragraph (c) of the 1979 definition, which
concerned interpretation of documents. This provision, which was
codified as paragraph (e) of the 1983 definition, required that
interpretation of the terms of documents ``be based upon either
applicable State statutory or case law concerning interpretation of
documents conveying mineral rights or, where no applicable State law
exists, upon the usage and custom at the time and place it came into
existence.''
On January 31, 1997 (62 FR 4836), we proposed to reinstate a
revised version of the property rights demonstration required under
paragraph (a)(1) of the 1979 definition. The proposed rule differed
from the 1979 rule in three ways:
It did not describe the person making the VER
demonstration as the permit applicant, since the proposed rule also
clarified that a person may request a VER determination without
preparing and submitting a permit application.
It provided that the requisite property rights must be
vested as of the date that the land comes under the protection of 30
CFR 761.11 or section 522(e), rather than as of August 3, 1977.
It did not limit eligible property rights to the right to
produce coal.
The proposed rule incorporated the 1983 language pertaining to the
interpretation of documents. However, we proposed to modify that
language to eliminate its restriction to documents concerning mineral
rights, since surface coal mining operations may involve property
interests other than mineral rights. Also, unlike the 1983 definition,
we proposed to require a property rights demonstration and apply the
interpretation of documents provision to the needed for and adjacent
standard.
[[Page 70773]]
(See the discussion of this standard in Part VII.D. of this preamble.)
The final rule incorporates all elements of the proposed rule as
described above. The following discussion summarizes the comments that
we received on this aspect of the proposed rule and our disposition of
those comments.
Summary and Disposition of Comments on the Proposed Rule
One commenter requested that we revise the rule to clarify that the
deed, lease, or other documents relied upon for the property rights
demonstration must include explicit authority to conduct surface coal
mining operations. In addition, the commenter asserted that these
documents must explicitly sanction both the type of activity for which
VER is claimed and the scope and location of that activity. We do not
agree. In enacting the permitting requirements of sections 507(b)(9)
and 510(b)(6) of SMCRA, Congress considered measures that would have
required either explicit authority or surface owner consent in
situations in which the surface and mineral estates are in separate
ownership, but in the end decided to defer to State property law as
interpreted by State courts. See S. Conf. Rep. No. 95-337 and H.R.
Conf. Rep. No. 95-493, at 105-6 (1977); 123 Cong. Rec. H7587-88 (July
21, 1977) (statement of Rep. Seiberling). See also, Congress' failure
to adopt Secretary Andrus' recommendation that surface owner consent be
required in all cases for the entire area covered by a permit
application (H.R. Rep. No. 95-218, at 156 (1977)). There is no
suggestion in the Act or its legislative history that Congress intended
to accord lesser deference to State property law in determining VER
under section 522(e). Indeed, the discussion of the Polino decision and
related discussions concerning mining on national forest lands in the
congressional reports quoted or referenced in Part V of this preamble
indicate otherwise.
Another commenter asserted that the property rights demonstration
should be limited to discerning whether the person has a property right
to conduct surface mining, not whether he or she has a right to use a
specific method of surface mining. As summarized and excerpted in Part
V of this preamble, the legislative history of the VER provision in
section 522(e) clearly indicates that Congress did not intend for this
provision to be construed in a manner that would allow surface coal
mining operations of a nature that are not authorized under State
property law. Therefore, the nature and detail of the property rights
demonstration is dependent upon State property law concerning the
interpretation of the language of deeds and other conveyances. It may
be as simple as demonstrating the right to conduct surface coal mining
operations in general, or, depending upon the wording of the conveyance
and State property law, the requester may need to demonstrate that the
method of surface coal mining operations meets the restrictions imposed
by the conveyance or State law.
Some commenters expressed concern that the definition could be
interpreted as negating a VER determination each time an operation or
permit experiences a change in ownership. We disagree. As discussed in
Part IX of this preamble, State law, the applicable VER standard, and
the terms of the instrument of conveyance govern the extent to which a
transfer of property rights or a change in ownership of a permit or
operation impact VER. In general, we view VER as transferable because,
unless otherwise provided by State law, the property rights, permits,
and operations that form the basis for VER determinations are
transferable. Therefore, except as discussed in Part IX of this
preamble, we anticipate that permit transfers and changes in ownership
of operations and property rights subsequent to a VER determination
would have no effect on VER or the validity of the VER determination.
One commenter stated that, by requiring a property rights
demonstration as part of the definition of VER, the proposed rule
failed to recognize that mining entities may seek and obtain a permit
for a surface coal mining operation before acquiring property rights
for all lands within the permit area. We believe that the commenter's
concern is misplaced. Under the final rule, there is no requirement
that the same person make both the property rights demonstration
required by paragraph (a) of the definition and the demonstration of
compliance with the good faith/all permits or needed for and adjacent
standard under paragraph (b) of the definition. In other words, under
the final rule, the person who makes the property rights demonstration
required by paragraph (a) of the definition need not be the same person
as the one who demonstrates compliance with the requirements of the
good faith/all permits or needed for and adjacent standards under
paragraph (b) of the definition. However, each request must demonstrate
compliance with both paragraphs (a) and (b) of the definition of VER.
And the person holding the permits must obtain the necessary property
rights before actually initiating surface coal mining operations on the
land in question.
Some commenters opposed the proposed rule to the extent that it
provided that property rights must be vested as of the date that the
land comes under the protection of the Act, rather than as of the date
of enactment of SMCRA (August 3, 1977) as in the 1979 rule. The
commenters argued that persons conducting surface coal mining
operations after the enactment of SMCRA should have immediately
procured all necessary property rights (e.g., purchased a 300-foot
buffer around all planned minesites to preclude application of the
prohibition on mining within 300 feet of an occupied dwelling) to avoid
potential adverse impacts from the creation of new protected areas
after August 3, 1977. We do not agree. The lease or purchase of a
buffer zone would be impractical in cases where the owners of that land
refuse to lease or sell. Moreover, we first adopted the concept of
basing VER on the circumstances that existed when the land came under
the protection of section 522(e) rather than on the circumstances that
existed on August 3, 1977, as part of our 1983 definition of VER. As
discussed in Parts VII.F. and XVI of this preamble, this concept
withstood a legal challenge. In view of the existence of this concept
as part of our rules for 16 years, and the expectations engendered by
that rule, we are not persuaded by the commenters' argument.
Some commenters opposed the proposed rule to the extent that it
provided that property rights other than the right to produce coal are
eligible for consideration. The commenters argued that this
modification was arbitrary, an imprudent and unreasonable giveaway of
surface rights, and inconsistent with congressional intent. They also
argued that this aspect of the proposed rule had no basis under SMCRA,
and that it was in violation of the definition of surface coal mining
operations in section 701(28) of the Act. We disagree.
The statutory definition of surface coal mining operations in
section 701(28) includes ``activities conducted on the surface of lands
in connection with a surface coal mine or * * * surface operations and
surface impacts incident to an underground coal mine.'' In addition to
``excavation for the purpose of obtaining coal,'' the definition
expressly includes ``the cleaning, concentrating, or other processing
or preparation'' of coal. And paragraph (B) of the definition includes
``any adjacent land the use of which is
[[Page 70774]]
incidental to any such activities'' as well as roads, impoundments,
ventilation shafts, refuse banks, overburden piles, ``repair areas,
storage areas, processing areas, shipping areas and other areas upon
are sited structures, facilities, or other property or materials on the
surface, resulting from or incident to such activities [the activities
listed in paragraph (A) of the definition].'' Clearly, the definition
is not restricted to coal extraction activities or operations on lands
from which coal is extracted. Therefore, our final rule properly
acknowledges that, to the extent that a person has a right under State
property law to conduct an activity or construct a facility included
within the definition of surface coal mining operations on any lands
listed in 30 CFR 761.11 and section 522(e), that person may seek to
apply the VER exception to the proposed activity or facility even if
there are no plans to extract coal from those lands.
As discussed above, the legislative history of the right-of-entry
provisions of sections 507(b)(9) and 510(b)(6)(C) of SMCRA and of the
prohibitions of section 522(e) indicates that Congress wanted to
respect and defer to State court interpretations of documents
concerning property rights. Hence, we find it appropriate to defer to
State property law to determine whether a person has a property right
to use a particular parcel of land for any activity or facility
included in the definition of surface coal mining operations, rather
than arbitrarily limiting the scope of the property rights to which the
VER exception applies to the right to extract coal.
One commenter argued that the property rights demonstration must
include explicit authority, by deed, lease or otherwise, to engage in
non-extraction activities. He also asserted that the property rights
documents must explicitly sanction both the type of activity for which
VER is claimed and the scope and location of that activity. However,
the commenter failed to provide a rationale for these statements. We
see no reason or basis to establish differing standards for property
rights demonstrations based on whether the land will be used for coal
extraction or whether it will be used for other activities or
facilities included within the definition of surface coal mining
operations. Section 522(e) refers to surface coal mining operations
without differentiating among the various activities and facilities
included in the definition of that term. As discussed above and as
excerpted in Part V of this preamble, the legislative history of SMCRA
clearly indicates that Congress wanted to defer to State court
interpretations of documents concerning property rights. Therefore, we
see no basis or need to require that the documents in question
expressly authorize use of the land for activities and facilities that
are included in the definition of surface coal mining operations but
that do not directly produce coal. A demonstration that State statutory
or case law recognizes a person's right to use the land for those
activities and facilities under the terms of the document used to
establish property rights will suffice.
Some commenters stated that the VER inquiry should begin and end
with the property rights demonstration. They argue that the Act and its
legislative history as well as various court decisions mandate adoption
of an ownership and authority standard for VER. That is, if a person
has the property right under State law to conduct surface coal mining
operations, the person also has VER under section 522(e) of SMCRA. As
discussed in detail in Part VII.C.5. of this preamble, we do not agree
that the Act and its legislative history require the adoption of an
ownership and authority standard for VER. For the reasons outlined in
Parts VII.A. and VII.C. of this preamble, we do not view VER as
coextensive or synonymous with property rights. Instead, we view
property rights as a prerequisite for demonstrating VER under the good
faith/all permits and needed for and adjacent standards.
C. Paragraph (b): Primary Standards for VER
On January 31, 1997, we proposed to adopt two standards for VER for
surface coal mining operations in general: the good faith/all permits
standard (paragraph (a)(1) of the proposed definition) and the needed
for and adjacent standard (paragraph (a)(2) of the proposed
definition). The final rule revises these standards in response to
comments and moves them to paragraph (b) of the definition. Part VII.C.
of this preamble provides an explanation of the good faith/all permits
standard and the disposition of related comments, while Part VII.D. of
the preamble discusses the needed for and adjacent standard and related
comments.
Several commenters argued that standards for the VER exception in
section 522(e), which identifies lands that Congress designated as
unsuitable for surface coal mining operations, should be more
restrictive than the standard for exceptions under section 522(a),
which pertains to lands designated by petition. In the preamble to the
1979 definition of VER, we concurred with this argument:
OSM decided that the VER phrase must be distinguished from the
definition of substantial legal and financial commitments. * * * The
latter exemption applies to the petition process under Section
522(a), whereas VER applies to the Congressional prohibitions of
mining under Section 522(e). This distinction suggests that, in
order to qualify for VER and thereby mine in the prohibited areas of
Section 522(e), they must have a property interest in the mine that
is even greater than the substantial legal and financial commitments
needed to mine despite a designation by petition under Section
522(a).
44 FR 14491-92, March 13, 1979.
We repeated this position in the Greenwood Land and Mining Co. VER
determinations at 46 FR 36758, July 15, 1981; 46 FR 50422, October 13,
1981; and 47 FR 56191, December 15, 1982.
However, we reversed our stance in the preamble to the 1983 VER
definition, stating that ``the two concepts are separate and
distinct.'' 48 FR 41316, September 14, 1983. Neither the language of
the Act nor its legislative history supports the proposition that the
lands designated by Congress under section 522(e) are more deserving of
protection than the lands designated by petition under section 522(a).
See S. Rep. No. 95-128, at 55 (1977), which states that:
[C]ertain lands simply should not be subject to new surface coal
mining operations. These include primarily and most emphatically
those lands which cannot be reclaimed under the standards of this
Act and the following areas dedicated by the Congress [in section
522(e)].
The phrase ``lands which cannot be reclaimed under the standards of
this Act'' refers to petition-initiated mandatory designations under
section 522(a)(2), while the remainder of this passage addresses lands
designated by Congress under section 522(e). Clearly, the Senate
committee found at least some lands designated under section 522(a) to
be equal in importance to lands designated under section 522(e).
Consequently, we find no basis for the assumption that VER under
section 522(e) must be more restrictive than the standard for
exemptions from petition-initiated designations under section 522(a).
Another commenter asserts that restricting VER to the circumstances
set out in the definition, especially the good faith/all permits
standard, is inconsistent with our posture concerning the 1979
definition. He notes that briefs filed on behalf of the Secretary in
connection with assorted litigation concerning the definition of
[[Page 70775]]
VER interpret the preamble to the 1979 definition of VER as meaning
that we did not intend to limit the scope of the VER exception to cases
meeting the standards prescribed by the definition. According to the
briefs, the definition identified only those situations in which a
person unequivocally has VER. In all other cases, VER would be
determined on a case-by-case basis.
The briefs derive this characterization of the 1979 definition from
the first and last sentences of the following preamble discussion:
VER is a site-specific concept which can be fairly applied only
by taking into account the particular circumstances of each permit
applicant. OSM considered not defining VER, which would leave
questions concerning VER to be answered by the States, the Secretary
and the courts at later times. Without a definition, however, many
interpretations of VER would be made and no doubt challenged by both
operators and citizens; and once valid existing rights
determinations are challenged, the permitting process would be
delayed. OSM has therefore concluded that VER should be defined in
order to achieve a measure of consistency in interpreting this
important exemption. Under the final definition, VER must be applied
on a case-by-case basis, except that there should be no question
about the presence of VER where an applicant had all permits for the
area as of August 3, 1977.
44 FR 14993 (March 13, 1979), col. 2-3.
The supplemental final environmental impact statement prepared for
a 1983 rulemaking describes the 1979 definition as follows:
[T]he existing regulation, as modified by the court, provides
that at a minimum, an operator should be determined to have VER if
he had made a good faith effort to apply by August 3, 1977, for all
permits necessary to mine in one area. OSM, however, has
consistently maintained, in court and elsewhere, that in each case
OSM would examine the totality of the circumstances before deciding
on any VER application and that the regulatory standard is not the
exclusive means of obtaining VER.
January 1983 Supplement to OSM-EIS-1, Vol. 1: Analysis, at IV-39
(citations omitted).
In 1985, the U.S. District Court for the District of Columbia
acknowledged that the 1979 preamble could be read as suggesting the
interpretation discussed above, but the court questioned both the
accuracy of this interpretation, given the context of the sentence upon
which it depends, and the validity of the premise that preamble
language could supersede regulatory language:
The government and the industry-intervenors argue that even
under the old ``all-permits'' test promulgated in 1979, states had
to make, in addition to the all-permits determination, an
independent takings analysis on a case by case basis in order to
determine whether VER existed. * * *
To support their claim that the 1979 * * * rule included an
independent takings test, in addition to the all-permits test,
defendants and intervenors point to one sentence in the preamble to
the 1979 rule. ``Under the final definition, VER must be applied on
a case-by-case basis, except that there should be no question about
the presence of VER where an applicant had all permits for the area
as of August 3, 1977.'' 44 Fed. Reg. 14993 (1979). That sentence, to
be sure, does suggest that there would be instances other than the
all-permits situation in which a VER determination could be made.
But the paragraph in which it is included, however, may also mean
simply that the VER all-permits issue must of necessity be decided
anew each time a person seeks VER. In any event, no such alternate
method of obtaining VER was included in the final 1980 rule, see 30
C.F.R. Sec. 761.5 (1980).
PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1561 (1985)
(footnote omitted), emphasis in original.
For purposes of this rulemaking, we find it unnecessary to
determine whether the interpretation advanced in the briefs and
environmental impact statement remains valid in view of the
pronouncements in the court opinion. As discussed in Part VII.C. of
this preamble, we have reevaluated the language of the Act and its
legislative history. We have determined that adherence to the terms of
the good faith/all permits and needed for and adjacent standards in
paragraph (b) of the definition is the most reasonable interpretation
of VER and will better satisfy congressional intent in enacting section
522(e). And, in practice, to the extent allowed by the courts, we have
always adhered to the definition established in the rules in making VER
determinations, rather than relying upon the 1979 preamble to do
otherwise.
One commenter urged us to adopt more restrictive permitting and
bonding requirements and performance standards for surface coal mining
operations conducted under the VER exception, regardless of the
standard that we selected for the definition of VER. We find no basis
under SMCRA for doing so, since there is no indication that Congress
intended stricter standards for surface coal mining operations on these
lands. Furthermore, we believe that our existing requirements are
sufficiently stringent to protect environmental resources to the extent
that SMCRA authorizes or requires protection of those resources. Among
other things, section 510(b)(2) of the Act and 30 CFR 773.15(c)(2)
prohibit approval of a permit application unless the applicant
affirmatively demonstrates that reclamation as required by the Act and
the regulatory program can be accomplished under the reclamation plan
in the permit application. In addition, section 509(a) of the Act and
30 CFR 800.14(b) require that the permittee post a performance bond in
an amount sufficient to assure completion of the reclamation plan if
the regulatory authority has to complete the work in the event of
forfeiture.
1. What Alternatives Did We Consider?
In addition to the ``no action'' (no rulemaking) alternative, the
environmental impact statement prepared for this rulemaking identified
four major options for a primary standard for VER to accompany the
needed for and adjacent standard:
Good Faith/All Permits: Under this alternative, a person
would have VER if, prior to the date the land came under the protection
of 30 CFR 761.11 and section 522(e) of the Act, that person or a
predecessor in interest had obtained, or made a good faith effort to
obtain, all permits and other authorizations required to conduct
surface coal mining operations.
Good Faith/All Permits or Takings: Under this alternative,
a person who could not meet the good faith/all permits standard would
still have VER whenever a failure to recognize VER would be expected to
result in a compensable taking of that person's property interests
under the Fifth and Fourteenth Amendments to the U.S. Constitution.
Ownership and Authority: Under this alternative,
demonstration of both a property right to the coal and the right to
mine it by the method intended would constitute VER.
Bifurcated: Under this alternative, the ownership and
authority standard would apply if the coal rights were severed from the
surface estate before the land came under the protection of 30 CFR
761.11 and section 522(e). Otherwise, the good faith/all permits
standard would apply.
In the proposed rule published on January 31, 1997, we announced
our intention to adopt the good faith/all permits standard and the
needed for and adjacent standard as the primary standards for VER. The
draft environmental impact statement released on the same date
identified the good faith/all permits standard as the preferred
alternative to accompany the needed for and adjacent standard. In
general, the environmental community and members of the public at large
supported the good faith/all permits alternative, while industry
advocated
[[Page 70776]]
the ownership and authority alternative. The few States that commented
split among the good faith/all permits, takings, and bifurcated
alternatives.
2. Why Did We Select the Good Faith/All Permits Standard?
In enacting SMCRA, Congress did not provide clear or dispositive
direction on the meaning or purpose of VER under section 522(e). There
are credible supporting and opposing arguments for each alternative.
Indeed, as summarized in Part VI of this preamble, at various times
during the past two decades, we have either proposed or adopted all the
listed alternatives, plus some variations on these alternatives.
However, after carefully evaluating all comments received and
conducting a rigorous analysis of the legislative history of section
522(e), relevant litigation, and the potential environmental impacts of
each alternative, we believe that the good faith/all permits standard
best achieves protection of the lands listed in section 522(e) in a
manner consistent with congressional intent at the time of SMCRA's
enactment. At the same time, it protects the interests of those persons
who had taken concrete steps to obtain regulatory approval for surface
coal mining operations on lands listed in section 522(e) before those
lands came under the protection of 30 CFR 761.11 and section 522(e).
And, since 20 of the 24 approved State regulatory programs under SMCRA
already rely upon either the good faith/all permits standard or the all
permits standard, adoption of a good faith/all permits standard would
cause the least disruption to existing State regulatory programs.
The good faith/all permits standard is consistent with the
legislative history of section 522(e), which indicates that Congress'
purpose in enacting section 522(e) was to prevent new surface coal
mining operations on the lands listed in that section, either to
protect human health or safety, or because the environmental values and
other features associated with those lands are generally incompatible
with surface coal mining operations. The report prepared by the Senate
Committee on Energy and Natural Resources on S. 7, the Senate version
of the legislation that became SMCRA, states that:
[T]he Committee has made a judgment that certain lands simply
should not be subject to new surface coal mining operations. These
include primarily and most emphatically those lands which cannot be
reclaimed under the standards of this Act and the following areas
dedicated by the Congress in trust for the recreation and enjoyment
of the American people: lands within the National Park System, the
National Wildlife Refuge System, the National Wilderness
Preservation System, the Wild and Scenic Rivers System, National
Recreation Areas, National Forests with certain exceptions, and
areas which would adversely affect parks or [places listed on the]
National Register of Historic Sites [sic].
In addition, for reasons of public health and safety, surface
coal mining will not be allowed within one hundred feet of a public
road (except to provide access for a haul road), within 300 feet of
an occupied building or within 500 feet of an active underground
mine.
Since mining has traditionally been accorded primary
consideration as a land use there have been instances in which the
potential for other equally or more desirable land uses has been
destroyed. The provisions discussed in this section were
specifically designed and incorporated in the bill in order to
restore more balance to Federal land use decisions regarding mining.
S. Rep. No. 95-128, at 55 (1977).
In addition, the report prepared by the House Committee on Interior
and Insular Affairs on H.R. 2, the House version of the legislation
that became SMCRA, states that:
[T]he decision to bar surface mining in certain circumstances is
better made by Congress itself. Thus section 522(e) provides that,
subject to valid existing rights, no surface coal mining operations
except those in existence on the date of enactment, shall be
permitted on lands within the boundaries of units of certain Federal
systems such as the national park system and national wildlife
refuge system * * * or in other special circumstances * * *.
H.R. Rep. No. 95-218, at 95 (1977).
See also S. Rep. No. 95-128, at 94-95 (1977).
The final environmental impact statement (EIS) for this rulemaking
indicates that, compared with the other alternatives considered, the
good faith/all permits standard is the most protective of the lands
listed in section 522(e). According to the analysis in the EIS,
adoption of the takings standard in place of the good faith/all permits
standard would result in the mining of an estimated additional 2,855
acres of protected lands between 1995 and 2015 (185 acres of section
522(e)(1) lands, 1,686 acres of Federal lands in eastern national
forests, and 984 acres of State park lands and buffer zones for State
parks). Adoption of either the bifurcated alternative or the ownership
and authority standard would result in the mining of an estimated
additional 3,062 acres during that time frame (304 acres of section
522(e)(1) lands, 1,761 acres of Federal lands in eastern national
forests, and 997 acres of State park lands and buffer zones for State
parks). See Table V-1 in Final Environmental Impact Statement OSM-EIS-
29 (July 1999), entitled ``Proposed Revisions to the Permanent Program
Regulations Implementing Section 522(e) of the Surface Mining Control
and Reclamation Act of 1977 and Proposed Rulemaking Clarifying the
Applicability of Section 522(e) to Subsidence from Underground
Mining.''
As these numbers show, the model predicts that the additional
disturbance would occur entirely on some of the lands for which the
Senate Committee expressed the most concern; i.e., public parks and the
lands protected by paragraphs (e)(1) and (e)(2) of section 522 of the
Act. See S. Rep. No. 95-128, at 55 (1977). Therefore, we believe that
adoption of the good faith/all permits standard for VER will best
fulfil the intent of Congress, as expressed in that report, to prohibit
new surface coal mining operations on the lands protected by section
522(e), with certain exceptions.
In addition, the economic analysis that the U.S. Geological Survey
and we prepared for this rulemaking found that adoption of the good
faith/all permits standard would have a net positive benefit to
society, while adoption of the takings, ownership and authority, or
bifurcated alternatives would have a net negative benefit to society.
The analysis found negligible differences among the alternatives in
terms of their economic impact. None of the alternatives would have a
significant economic impact on the mining industry or the cost of
producing and delivering coal, assuming that the prohibitions and
restrictions of section 522(e) do not apply to subsidence from
underground mining operations. See ``Final Economic Analysis: Proposed
Revisions to the Permanent Program Regulations Implementing Section
522(e) of the Surface Mining Control and Reclamation Act of 1977 and
Proposed Rulemaking Clarifying the Applicability of Section 522(e) to
Subsidence from Underground Mining'' (July 1999).
The good faith/all permits standard in the final rule requires a
demonstration that the person claiming VER, or a predecessor in
interest, had obtained, or made a good faith effort to obtain, all
permits and other authorizations required to conduct surface coal
mining operations on the land before it came under the protection of 30
CFR 761.11 and section 522(e) of the Act. Potentially necessary permits
and authorizations include, but are not limited to, mining permits,
National Pollutant Discharge Elimination System (NPDES) permits, U.S.
Forest Service special use permits, Mine Safety and Health
Administration authorizations, air quality plan approvals, local
[[Page 70777]]
government approvals, and (for some types of facilities) building
permits and zoning changes.
The proposed rule language referred only to ``State and Federal
permits and other authorizations.'' Several commenters objected to this
limitation, noting that other governmental entities such as counties
may require permits for surface coal mining operations. The commenters
argued that these permits should be included within the universe of all
necessary permits and authorizations under the good faith/all permits
standard. In response, we have deleted the limiting phrase ``State and
Federal'' from the rule. We agree with the commenters that the good
faith/all permits standard should consider all necessary permits and
authorizations, not just State and Federal permits and authorizations.
When permits and authorizations to operate do not establish
boundaries for the mining operation, the geographical extent of the VER
determination will be defined by the extent of surface coal mining
operations contemplated by all parties at the time of issuance of or
application for the permit or authorization. See the Greenwood Land and
Mining Co. VER determinations at 46 FR 36758, July 15, 1981; 46 FR
50422, October 13, 1981; and 47 FR 56191, December 15, 1982; and the
Mower Lumber Co. VER determinations at 45 FR 52467, August 7, 1980 and
45 FR 61798, September 17, 1980.
Some commenters complained that the good faith/all permits standard
is not truly a bright-line standard. They cited the potentially wide
and continually changing array of permits and authorizations required
for surface coal mining operations and the difficulty in identifying
which permits were required at any particular time. We believe that
persons requesting a VER determination and the agency responsible for
making the VER determination will be able to use public records to
reconstruct what permits and authorizations were required for a
particular site on the date that the land comes under the protection of
30 CFR 761.11 and section 522(e) of the Act. As demonstrated in the
Greenwood and Mower determinations cited above, we have experienced
little difficulty in identifying what permits are required at any
particular time.
One commenter expressed concern that the good faith/all permits
standard does not take into consideration the fact that mining firms
may not be legally required to apply for or obtain certain permits and
authorizations, such as an air quality plan approval, before obtaining
a SMCRA permit and initiating surface coal mining operations. We do not
interpret the good faith/all permits standard as requiring submission
of applications for all necessary permits and authorizations before the
date that the land comes under the protection of 30 CFR 761.11 or
section 522(e) of the Act. We believe that the language of this
standard is sufficiently flexible to remedy the concern raised by the
commenter. Specifically, we interpret this standard as providing the
agency making the VER determination with the discretion to decide (1)
which non-SMCRA permits and authorizations are needed to initiate
surface coal mining operations, and (2) what constitutes a good faith
effort to obtain all necessary permits and authorizations. In making
these decisions, the agency should consider any permitting time lines
or regulatory authority policies in place when the land came under the
protection of 30 CFR 761.11 and section 522(e).
A good faith effort may not necessarily require actual submission
of applications for all required permits and authorizations in every
instance. However, at a minimum, a good faith effort to obtain all
necessary permits must include application for any required SMCRA
permit. Because the SMCRA permit is the major permit needed for a
surface coal mining operation, requiring submission of an application
for this permit will ensure that the requester has made a significant
effort to acquire the necessary permits. Therefore, we have added a
sentence to paragraph (b)(1) of the definition specifying that, at a
minimum, an application for any permit required under SMCRA must have
been submitted before the land comes under the protection of 30 CFR
761.11 and section 522(e).
However, if, at the time that the land came under the protection of
30 CFR 761.11 and section 522(e) of SMCRA, State and Federal law did
not require a SMCRA permit for the type of operation planned, none is
needed to establish VER for that type of operation under this standard.
In that case, the person must have obtained, or made a good faith
attempt to obtain, all other necessary permits and authorizations to
operate from the appropriate agencies by that date.
Revoked, expired or lapsed permits or authorizations do not qualify
for consideration under the good faith/all permits standard because (1)
they are no longer valid authorizations to operate and (2), in the case
of an expired permit, the failure to renew or seek renewal in a timely
fashion indicates a lack of a good faith effort to obtain all necessary
permits and authorizations. One commenter stated that this restriction
is incongruous with our position endorsing the transferability of VER
and our statement in the preamble to the proposed rule that VER attach
to the land rather than to a person or operation. The commenter
expressed concern that this restriction would inhibit the remining and
repermitting of bond forfeiture sites.
The commenter has misinterpreted the scope of this restriction.
What we are saying is that once a permit expires, lapses, or is
revoked, a person who requests a VER determination subsequent to the
expiration, lapse, or revocation of that permit cannot rely upon the
prior existence of that permit to satisfy the requirements of paragraph
(b)(1) of the definition of VER. However, the expiration, lapse, or
revocation of a permit in no way alters the validity of VER
determinations made under the good faith/all permits standard before
the permit expired, lapsed, or was revoked. As discussed in Part IX of
the preamble to this final rule, we no longer adhere to the position
that VER always attach to the land. However, in the case of the good
faith/all permits standard, VER would effectively attach to the land
since the only requirement apart from the property rights demonstration
is a requirement that someone have made a good faith effort to obtain
all necessary permits. There is no requirement that a person actually
obtain a permit to demonstrate VER under this standard. Therefore, once
we or the State regulatory authority determine that a person has VER
for a particular site under the good faith/all permits standard, that
determination remains valid for all future surface coal mining
operations of the type and method covered by the determination,
regardless of the status of any permit that may exist for that land.
Therefore, the language to which the commenter objects does not present
a barrier to repermitting lands for which permits have expired, lapsed,
or been revoked. Previous VER determinations applicable to the site
under the good faith/all permits standard would remain valid and any
areas that come under the protection of 30 CFR 761.11 and section
522(e) before the permit expired, lapsed, or was revoked would be
covered by the exception for existing operations in 30 CFR 761.12.
Some commenters argued that the good faith/all permits standard is
inherently unfair and unreasonable because so few persons could qualify
for VER under that standard 20 years after the enactment of SMCRA. They
also note that, while industry generally
[[Page 70778]]
acquires mineral rights well in advance of any planned mining, it does
not seek permits for those lands until mining is reasonably imminent.
Section 506(b) of the Act generally limits permit terms to 5 years and
section 506(c) provides that a permit will terminate if the permittee
has not begun surface coal mining operations within 3 years of the date
of issuance. Thus, the commenters argue, the good faith/all permits
standard unfairly penalizes persons who have purchased coal reserves
for investment purposes or to provide for the company's long-term
security or future expansion.
We believe that the good faith/all permits standard properly
implements the intent of Congress to prevent most new surface coal
mining operations on the lands listed in section 522(e). We agree that,
except for lands coming under the protection of 30 CFR 761.11 and
section 522(e) after August 3, 1977, few persons will qualify for VER
under this standard. But this result is fair, reasonable, and
appropriate, given the congressional intent to protect section 522(e)
lands.
To some extent, speculative investors in land and interests in land
assume the risk of future changes in the regulatory environment. Under
the 1979 Federal rule, the 1980 suspension notice, State regulatory
programs, and our 1986 suspension notice, an all permits or good faith/
all permits standard has been in place for most of the time since the
enactment of SMCRA for most of the lands listed in section 522(e).
Therefore, few mineral owners could plausibly claim that they were
unaware of the applicability of the restriction, or that they had
reasonable expectations of being held to a less restrictive standard.
Furthermore, the needed for and adjacent VER standard in paragraph
(b)(2) of the definition offers relief to some persons who are unable
to meet the good faith/all permits standard. And, as discussed in the
final environmental impact statement and final economic analysis for
this rulemaking, mineral owners and mine operators frequently rely upon
the other exceptions provided by section 522(e), such as waivers for
the buffer zones for public roads and occupied dwellings, compatibility
findings for Federal lands in national forests, and joint approval for
publicly owned parks and historic places.
Section 522(e) of the Act affects a person's eligibility to obtain
a permit for surface coal mining operations. Logically, then, the VER
exception under section 522(e) should ensure fairness by protecting a
pre-existing interest under the regulatory process that was in place
when the prohibitions of section 522(e) took effect. That is, in
general, the VER exception should protect an equitable interest in
regulatory approval of proposed surface coal mining operations for
which a person had taken steps to obtain regulatory approval in
reliance upon the circumstances that existed before the land came under
the protection of section 522(e). The good faith/all permits standard
protects this equitable interest in regulatory approval.
This standard is also consistent with the general principles of
equitable estoppel; i.e., that one who has in good faith relied upon
and complied with the requirements for obtaining an interest by ``doing
all he could do'' should not be deprived of the interest. See Shostak
and Barrett, Valid Existing Rights in SMCRA, 5 J. Min. L. & Pol'y 585,
600 (1990), and Note, Regulation and Land Withdrawals; Defining ``Valid
Existing Rights'', 3 J. Min. L. & Pol'y 517 (1988). Thus, under the
good faith/all permits standard, in determining whether a person has
demonstrated VER, the agency will examine whether the record
demonstrates that, by the time that the land came under the protection
of 30 CFR 761.11 and section 522(e), that person or a predecessor in
interest had relied upon and complied with all regulatory requirements
for obtaining the necessary permits and authorizations by doing all
that could be done to obtain those permits and authorizations. If a
person makes both this demonstration and the property rights
demonstration required by paragraph (a) of the definition of VER, it
would be unfair to deny that person eligibility to apply for and obtain
a permit under SMCRA.
SMCRA and its legislative history do not compel or support adoption
of a VER standard crafted to (1) ensure continuation of all standard
pre-SMCRA industry practices, (2) preserve the ability of all mineral
owners to extract coal from protected areas by surface coal mining
operations whenever authorized under State property law, or (3)
maintain broad eligibility for VER on a nondeclining basis. We believe
that adoption of a standard incorporating these principles would
effectively vitiate the protections of section 522(e) for all lands
except those overlying unleased Federal coal. This result would
contravene Congress' intention in enacting this section.
Some commenters argued that nothing in the statute or its
legislative history remotely suggests that VER be defined in terms of a
good faith/all permits standard. We agree that neither the statute nor
its legislative history mentions a good faith/all permits standard for
VER. However, as discussed above, we believe that the good faith/all
permits standard is consistent with the legislative history of section
522(e). In addition, the definition of VER is not restricted to the
good faith/all permits standard; it also includes the needed for and
adjacent standard.
Commenters also argue that if Congress had intended to provide a
permit-based exception to the prohibitions of section 522(e), it would
have done so expressly as it did in section 510(b)(5) (restrictions on
mining alluvial valley floors), section 510(d)(2) (special requirements
for surface coal mining operations on prime farmlands), and section
522(a)(2) (petition-initiated designations of land as unsuitable for
surface coal mining operations). According to the commenters, adoption
of a permit-based definition of VER conflicts with the judicially
endorsed presumption that Congress has acted both purposely and
intentionally when it includes particular language in one statutory
provision but not in another.
We agree that the statute's use of different terminology for each
of these exceptions means that Congress probably intended a somewhat
different meaning for the VER exception under section 522(e) than for
the exceptions provided under the other statutory provisions cited by
the commenters. However, we do not agree that the difference in
terminology rules out the adoption of any type of permit-based standard
for VER under section 522(e). And the good faith/all permits standard
in this final rule differs from the permit-based exceptions under other
provisions of the Act in that it includes a good faith component, which
the others do not. Furthermore, our definition of VER includes the
needed for and adjacent standard, which is not a permit-based standard.
Finally, nothing in the litigation history of the definition of VER
indicates that the courts would likely find a permit-based standard
unacceptable for the reasons advanced by the commenters.
Many commenters characterized Hodel v. Virginia Surface Mining &
Reclamation Ass'n, 452 U.S. 264, 296 n.37 (1981) (``Hodel v. VSMRA'')
as representing a rejection of a permit-based standard for VER, or at
least an indication that the courts would view such a standard with
disfavor. In that case, the Supreme Court stated in a footnote that
nothing in the statutory language of SMCRA or its legislative history
would compel adoption of an all permits standard for VER. One commenter
also argued that, in National
[[Page 70779]]
Wildlife Fed'n v. Hodel, 839 F.2d 694, 750 n.86 (D.C. Cir. 1988) (``NWF
v. Hodel''), the U.S. Court of Appeals for the Federal Circuit
characterized this Supreme Court pronouncement as a rejection of the
all permits standard: ``[T]he Supreme Court has previously rejected a
too-restrictive interpretation of VER in an early challenge to the
SMCRA brought by industry.'' We respectfully disagree with these
characterizations of the Supreme Court's decision and opinion. First,
the definition of VER was not before the court. Second, the language
chosen by the Supreme Court is decidedly neutral. It addresses only the
question of whether the statute compels adoption of an all permits
standard. It does not reach the issue of whether an all permits
standard (or good faith/all permits standard) is permissible.
Commenters attacked the good faith/all permits standard as
unconstitutionally defining property rights in violation of the Tenth
Amendment to the Constitution, which reserves that power to the States
as one of their unenumerated powers. We disagree. Our definition of VER
clearly defers to State property law on all questions of property
rights. The final rule defining VER does not by its terms deprive any
person of property rights. Instead, our definition establishes the
limits of the VER exception to the prohibitions and restrictions of
section 522(e), based on equitable considerations.
Furthermore, in Hodel v. VSMRA, 452 U.S. at 291 (1981), the Supreme
Court stated:
The Court long ago rejected the suggestion that Congress invades
areas reserved to the States by the Tenth Amendment simply because
it exercises its authority under the Commerce Clause in a manner
that displaces the States' exercise of their police powers.
Commenters also argued that the good faith/all permits standard
denies property owners due process under the Fifth Amendment because it
conditions the retention of a property right on conditions that are
unreasonable and of which the property owner had inadequate notice. We
disagree. Property owners had the opportunity to comment on either an
all permits or good faith/all permits standard in the 1978, 1982, 1988,
1991, and 1997 proposed rules. Furthermore, the final rule creates
little change in the status quo since most States have applied a good
faith/all permits or all permits standard ever since they obtained
approval of their SMCRA regulatory programs. In addition, when the VER
standard is applied, all VER determinations have been and will continue
to be subject to administrative and judicial review.
Commenters allege that the good faith/all permits standard
improperly relies upon the opinion in PSMRL I, Round I, 14 Env't Rep.
Cas. (BNA) at 1090-91 (1980). They note that, on February 1, 1983, the
U.S. Court of Appeals for the Federal Circuit remanded these
regulations to the Secretary for review and revision at his request.
The order of remand in this case stated that the judgment of the
district court in PSMRL I, Round I, supra, could not be considered
final. See In re Permanent Surface Mining Regulation Litigation, No.
80-1810, Order of Remand (D.C. Cir., Feb. 1, 1983). While the district
court's decision lacks precedential weight, the order of remand does
not prohibit use of the opinion as guidance in developing revised
regulations. Regardless, as discussed above, our rationale for adoption
of the good faith/all permits standard rests primarily upon our
analysis of the legislative history of section 522(e) and Congress'
purpose in enacting that section, not upon the opinion accompanying the
court's decision. Only the good faith component has its origins in the
PSMRL I, Round I decision.
Commenters also asserted that the definition of VER does not
comport with our statement in the PSMRL I, Round I litigation that
``Congress intended the term valid existing rights to encompass
property rights recognized as valid under state case law.'' 14 Env't
Rep. Cas. (BNA) at 1090 (1980). The commenters overlook the context of
this statement, which pertained only to paragraph (c) of the 1979
definition of VER. See 44 FR 67942, November 27, 1979. Paragraph (c)
established criteria for the interpretation of documents used as part
of the property rights demonstration. It did not comprise an
independent standard for VER, contrary to the apparent assumptions of
the commenters.
As noted in the decision, the Secretary committed only to revise
the definition to state that documents dealing with property rights
entitling one to surface mine coal will be interpreted in accordance
with appropriate State court decisions. He did not agree to waive the
other requirements of the 1979 definition, which include compliance
with one of the VER standards in paragraphs (a) and (b) of the
definition (the all permits standard, the needed for and adjacent
standard, or the separate standard for haul roads). Nor did he agree to
alter paragraph (d) of the 1979 definition, which provided that VER
``does not mean mere expectation of a right to conduct surface coal
mining operations.''
One commenter complained that the version of the good faith/all
permits standard that we proposed in 1997 differs sharply from our
representations to the courts concerning the meaning of VER under
section 522(e). The commenter specifically referred to and quoted a
reply brief that the Government filed with the Supreme Court in Hodel
v. VSMRA, 452 U.S. 264 (1981), on behalf of the Secretary. We agree
that the final rule is not fully consistent with the statements in this
brief. However, as discussed above and in Part VII.C.5. of this
preamble, we no longer subscribe to this brief's interpretation of the
legislative history of section 522(e). Furthermore, the discussion of
VER in the brief occurred in the context of a facial challenge to
section 522(e) of the Act. The definition of VER was not before the
Court, and the Court did not rule on the meaning of the VER exception.
As the brief itself notes, the Secretary was engaged in rulemaking to
redefine VER at the time that the brief was filed. And, as discussed
above and in Part VII.C.5. of this preamble, we believe that the VER
standards in the final rule are the standards that are most consistent
with the legislative history and Congress' intent in enacting section
522(e).
Some commenters opposed the good faith/all permits standard as a
violation of the principle of statutory construction that a statute
must be construed in a manner that affords each provision separate
effect. Specifically, they charged that adoption of the good faith/all
permits standard would effectively merge the VER exception under
section 522(e) into the exception for existing operations under the
same section, and thus improperly render the VER exception superfluous.
We do not agree. First, as defined in this rule, the exception for
existing operations does not apply to lands for which a permit has not
actually been obtained; i.e., it has no good faith component.
Second, the exception for existing operations includes authorized
operations that have already begun surface coal mining operations
before the land comes under the protection of 30 CFR 761.11 and section
522(e); the VER exception is not intended to apply to these operations.
Third, the definition of VER is not restricted to the good faith/all
permits standard. It also includes the needed for and adjacent standard
and a separate standard for roads, neither of which has any counterpart
in the exception for existing
[[Page 70780]]
operations in 30 CFR 761.12. Therefore, the VER exception includes
significant differences from the exception for existing operations. The
only overlap occurs with respect to unstarted operations that have
obtained a permanent program permit under SMCRA.
In summary, we believe that the good faith/all permits standard is
both reasonable and consistent with congressional intent. As discussed
above and as summarized in Part V of this preamble, the legislative
history is sparse and unclear, and parts are arguably inapplicable with
respect to how Congress intended the VER exception in section 522(e) of
the Act to be interpreted. In the face of this difficulty in
determining Congress' intent, we believe that the good faith/all
permits standard best balances a number of statutory purposes and
policy objectives. These purposes and objectives include establishing a
reasonable standard that is practicable to administer, providing
substantial environmental protection to congressionally designated
areas, providing an exception to the prohibition on surface coal mining
operations in those areas when it would be unfair to apply the
prohibition, protecting surface landowners from the adverse effects of
surface coal mining operations, minimizing disruption of existing State
regulatory programs and expectations engendered thereunder, and, to the
extent that it harmonizes with the other purposes and objectives,
mitigating or minimizing compensable takings of property interests.
3. What Comments Did We Receive Regarding Takings Issues Concerning the
Good Faith/All Permits Standard?
Many commenters argued that the good faith/all permits standard is
constitutionally infirm because of its Fifth Amendment takings
implications. This argument appears to rely upon three premises: (1)
that any interference with property rights recognized under State law
would be a compensable taking, (2) that the good faith/all permits
standard would effectively deny mineral owners any reasonable economic
use of their property, and (3) that a standard which, when applied,
might result in some compensable takings is facially unconstitutional.
We do not agree that any of these premises is correct.
With respect to the definition of VER under section 522(e) of
SMCRA, the U.S. District Court for the District of Columbia has held
that ``no mechanical formula [for VER] will ever perfectly define the
universe of circumstances in which failure to grant VER will constitute
a taking.'' PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1563
(1985). And the Supreme Court has long held that regulation that
affects the value, use, or transfer of property may constitute a
compensable taking if it goes too far. Pennsylvania Coal Co. v. Mahon,
260 U.S. 393 (1922). However, the courts have also long held that the
rights of property owners are not absolute and that government may,
within limits, regulate the use of property. See the summary of takings
law published at 56 FR 33161, July 18, 1991.
The Supreme Court has identified three factors as having particular
significance in a regulatory takings analysis: (1) the economic impact
of the proposed government policy or action on the property interest
involved, (2) the extent to which the action or regulation interferes
with any reasonable, investment-backed expectations of the owner of the
property interest, and (3) the character of the government action.
Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 224-25
(1986). The courts generally find that a compensable taking exists only
if the government action would cause inequitably disproportionate
economic impacts on the property or interfere with reasonable,
investment-backed expectations of persons with an interest in the
property to such an extent that justice and fairness would require that
the public, rather than the private property owners, pay for the public
benefit resulting from the restrictions that the government action
places on the property. Armstrong v. United States, 364 U.S. 40, 49
(1960).
In declining to review the constitutionality of section 522(e) of
SMCRA, the Supreme Court explained its historic approach to takings
analyses as follows:
[T]his court has generally ``been unable to develop any ``set
formula'' for determining when ``justice and fairness'' require that
economic injuries caused by public action be compensated, rather
than remain disproportionately concentrated on a few persons.''
Rather, it has examined the ``taking'' question by engaging in
essentially ad hoc, factual inquiries that have identified several
factors--such as the economic impact of the regulation, its
interference with reasonable investment-backed expectations, and the
character of the government action--that have particular
significance. Kaiser Aetna v. United States, 444 U.S. 164, 175
(1979). * * * These ``ad hoc factual inquiries'' must be conducted
with respect to specific property, and the particular estimates of
economic impact and ultimate valuation relevant in the unique
circumstances.
Hodel v. VSMRA, 452 U.S. at 296 (1981) (citations omitted).
When regulation goes too far in infringing on private property
rights is not precisely definable. The Supreme Court has consistently
``eschewed any `set formula' for determining how far is too far,
preferring to `engage in * * * essentially ad hoc, factual inquiries.'
'' Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015 (1992)
(``Lucas''), quoting Penn Cent. Transp. Co. v. New York City, 438 U.S.
104, 124 (1978). In Lucas, the Supreme Court recognized what it
characterized as a ``logically antecedent inquiry'' into a takings
claimant's title prior to the inquiry into whether the government has
interfered with rights inherent in that title in a manner that rises to
the level of a Fifth Amendment taking. Id. at 1027. The Court noted in
Lucas that its takings jurisprudence ``has traditionally been guided by
the understandings of our citizens regarding the content of, and the
State's power over the `bundle of rights' that they acquire when they
obtain title to property.'' Id. at 1027. Thus, the Court continued,
some regulation of rights should be expected. ``In the case of personal
property, by reason of the State's traditionally high degree of control
over commercial dealings,'' the possibility of significant impacts
should be anticipated. Id. at 1027-28. But the Court indicated that
interests in land have greater expectations of protection. Id. at 1028.
Further, the Court suggested that an ``owner's reasonable
expectations'' may be critical to a takings determination. Id. at 1016
n.7. These expectations are those that ``have been shaped by the
State's law of property; i.e., whether and to what degree the State's
law has accorded legal recognition and protection to the particular
interest in land with respect to which the takings claimant alleges a
diminution (or elimination) of value.'' Id. at 1016 n.7.
However, in a subsequent case, the Supreme Court reiterated that
``our cases have long established that mere diminution in the value of
property, however serious, is insufficient to demonstrate a taking.''
Concrete Pipe & Prod. v. Construction Laborers Pension Trust, 508 U.S.
602, 645 (1993). The Court cited Village of Euclid v. Ambler Realty
Co., 272 U.S. 365, 384 (1926), which involved an approximate 75 percent
diminution in value, and Hadacheck v. Sebastian, 239 U.S. 394, 405
(1915), which involved a 92.5 percent diminution in value, as examples
of the cases to which it was referring.
[[Page 70781]]
Even under Lucas (see id. at 1027-28), coal owners and the coal
mining industry may not necessarily enjoy the same expectations of
freedom from government interference as persons who have historically
been subject to a lesser degree of regulation, a factor that must be
considered when evaluating the impact of the governmental action on
investment-backed expectations. The Supreme Court recently held that
``those who do business in the regulated field cannot object if the
legislative scheme is buttressed by subsequent amendments to achieve
the legislative end.'' Concrete Pipe & Prod. v. Construction Laborers
Pension Trust, 508 U.S. 602, 645 (1993) (citations omitted). And, in
the same case, the Court ruled that ``legislation readjusting rights
and burdens is not unlawful solely because it upsets otherwise settled
expectations.'' Id. at 646 (citations omitted).
In PSMRL I, Round I, 14 Env't Rep. Cas. (BNA) at 1091 (1980), the
U.S. District Court for the District of Columbia declined to rule on
the constitutionality of the 1979 all permits standard for VER because
the plaintiffs' takings claims were purely hypothetical. However, in
its opinion, the court stated that it found persuasive the government's
arguments that the definition met the standards of existing takings
jurisprudence. And the definition that we are adopting today is
consistent with that court's declaration that ``a good faith attempt to
have obtained all permits before the August 3, 1977 cut-off date should
suffice for meeting the all permits test.''
Furthermore, in Hodel v. VSMRA, 452 U.S. at 296 n.37 (1981), the
Supreme Court stated that, while nothing in the statutory language of
SMCRA or its legislative history would compel adoption of an all
permits standard for VER, section 522(e) ``does not, on its face,
deprive owners of land within its reach of economically viable use of
their land since it does not proscribe nonmining uses of such land.''
The definition of VER that we are adopting today likewise does not
prohibit nonmining uses of land protected by section 522(e). Therefore,
we believe that the good faith/all permits standard is consistent with
the principles established by the Supreme Court.
The commenters are correct in noting that neither of these
decisions specifically endorses the good faith/all permits standard as
constitutionally sound. However, there is nothing in these court
decisions, SMCRA, or its legislative history that precludes adoption of
a good faith/all permits standard for VER under section 522(e) or
suggests that adoption of this standard would be a facial regulatory
taking. Therefore, the only question is the degree to which its
application to individual situations may result in a compensable
taking.
The takings implication assessment in Part XXIX.E. of this preamble
states that the good faith/all permits standard has significant takings
implications as that term is defined by Executive Order 12630. It also
states that, of all the alternatives that we considered, this standard
has the greatest potential to result in compensable takings. However,
the assessment explains that, while these takings implications are
unquantifiable, we anticipate that the rule will result in very few
compensable takings. The final environmental impact statement and final
economic analysis for this rulemaking suggest that any takings that do
occur will be limited largely to lands in eastern national forests with
Federal surface and non-Federal mineral ownership and to lands in State
and local parks and buffer zones for those parks.
Also, we anticipate that, in most cases, the lands protected by
section 522(e) and 30 CFR 761.11 will comprise only a small portion of
the relevant property interests as a whole. Therefore, under
established takings jurisprudence, these prohibitions are unlikely to
result in compensable takings. See Penn Cent. Transp. Co. v. New York
City, 438 U.S. 104, 130 (1978) (``Takings jurisprudence does not divide
a single parcel into discrete segments and attempt to determine whether
rights in a particular segment have been entirely abrogated.'') For
example, because mineral ownership is commonly less fragmented than
surface ownership, the buffer zones for dwellings, cemeteries, roads,
public buildings, and parks are unlikely to preclude surface coal
mining operations on the bulk of a parcel for which a person owns the
mineral rights. Even if the entire parcel lies within one or more of
the prohibited areas, there may be no compensable taking because (1)
the person may be able to recover the coal through underground mining
methods without constructing surface facilities on the protected lands,
or (2) there may be residual non-coal interests in the property which
are unaffected or even enhanced by the prohibitions. For example,
prohibition of surface coal mining operations could increase the value
of the surface estate for residential or commercial development.
One commenter stated that Penn Central retains little currency in
view of the subsequent Lucas decision. We find nothing in Lucas that
expressly or by implication reverses the aspect of Penn Central quoted
in the previous paragraph. And, in a decision rendered after Lucas, the
Supreme Court reaffirmed this aspect of its Penn Central decision:
We reject Concrete Pipe's contention that the appropriate
analytical framework is the one employed in our cases dealing with
permanent physical occupation or destruction of economically
beneficial use of real property. [Citation to Lucas omitted.] While
Concrete Pipe tries to shoehorn its claim into this analysis by
asserting that ``the property of [Concrete Pipe] which is taken, is
taken in its entirety,'' we rejected this analysis years ago in Penn
Central, where we held that a claimant's parcel of property could
not first be divided into what was taken and what was left for the
purpose of demonstrating the taking of the former to be complete and
hence compensable. To the extent that any portion of property is
taken, that portion is always taken in its entirety; the relevant
question, however, is whether the property taken is all, or only a
portion of, the parcel in question.
Concrete Pipe & Prod. v. Construction Laborers Pension Trust, 508 U.S.
602, 643-44 (1993), citations omitted.
One commenter argued that the statutory prohibition in section
522(e), when combined with the good faith/all permits standard for VER,
would physically appropriate a distinct property interest (the right to
surface mine) and thus would constitute a compensable taking regardless
of how much of a person's property was actually affected by section
522(e) or what other uses of the property might remain. However, the
commenter did not explain why this situation would qualify as a
physical intrusion under the standard established in Loretto v.
Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). And we are
aware of no basis for such an argument under existing takings
jurisprudence.
One commenter stated that, based upon the takings implication
assessment, adoption of the good faith/all permits standard is
proscribed by Edward J. DeBartolo Corp. v. Florida Gulf Coast Building
& Construction Trades Council, 485 U.S. 568 (1988). In that case, which
dealt with First Amendment issues, the Supreme Court held that if ``an
otherwise acceptable construction of a statute would raise serious
constitutional problems, the Court will construe the statute to avoid
such problems unless such construction is plainly contrary to the
intent of Congress.'' Id. at 575. The commenter argued that, under this
decision, we must select an alternative other than the good faith/all
permits standard because the takings implication assessment in the
proposed rule found that the good faith/all permits standard has the
greatest potential to result in
[[Page 70782]]
compensable takings. We do not agree that the rationale in this
decision prohibits adoption of the good faith/all permits standard.
First, we believe that adoption of another alternative would be
contrary to the intent of Congress. In enacting section 522(e) of
SMCRA, Congress clearly intended to minimize the number of new surface
coal mining operations on protected lands. The other alternatives for
the definition of VER are all less protective of the lands in section
522(e). Therefore, we believe that adoption of one of those
alternatives would be contrary to the intent of Congress in enacting
section 522(e).
Second, we do not agree that adoption or implementation of the good
faith/all permits standard presents a constitutional problem. The Fifth
Amendment only prohibits the taking of property without compensation.
And the Tucker Act, 28 U.S.C. 1491, provides recourse for an individual
to seek compensation in any situation in which a compensable taking
might arise as a result of a Federal action. According to the Supreme
Court, when ``compensation is available for those whose property is in
fact taken, the government action is not unconstitutional.'' United
States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 128 (1985). And
the Supreme Court also ruled that the Takings Clause ``is designed not
to limit governmental interference with property rights per se, but
rather to secure compensation in the event of otherwise proper
interference amounting to a taking.'' First English Evangelical
Lutheran Church v. County of Los Angeles, 482 U.S. 304, 315 (1987).
Furthermore, we have used the good faith/all permits standard most
of the time since SMCRA's enactment. And 20 of the 24 approved State
regulatory programs under SMCRA rely upon a VER definition that
includes either the all permits standard or the good faith/all permits
standard. Apart from two cases of limited precedential weight from the
U.S. District Court for the Southern District of Ohio, Belville Mining
Co. v. Lujan, No. C-1-89-790 (S.D. Ohio 1991) (Belville I) and Sunday
Creek Coal Co. v. Hodel, No. C-2-88-0416 (S.D. Ohio, June 2, 1988), we
are not aware of any final decisions in which State or Federal courts
have found that the good faith/all permits standard, or an agency
determination that a person did not have VER under the good faith/all
permits standard, was invalid on the basis of a conclusion that the
standard or determination would result in a compensable taking of a
property interest under the Fifth and Fourteenth Amendments to the U.S.
Constitution. And we are aware of no final decisions in which the U.S.
Court of Federal Claims has held that a person who could not meet the
good faith/all permits standard suffered a compensable taking.
Therefore, we anticipate that application of the good faith/all permits
standard will result in very few compensable takings.
The preamble to the proposed rule contains the following
discussion, which relies upon a zoning analogy to support the validity
of the good faith/all permits standard in the face of a Fifth Amendment
challenge:
Section 522(e) is a form of land use regulation that may be
considered analogous to certain provisions of zoning law. VER under
section 522(e) is generally analogous to those provisions of land
use law that define when a person attains a vested right to a
particular land use regardless of subsequent changes in zoning
ordinances that would otherwise prohibit or restrict that use. State
laws vary widely with respect to when a person develops a vested
interest in a particular land use, but mere ownership is rarely
sufficient. Some States require that a person both obtain all
necessary permits and make significant expenditures in reliance on
those permits. Others require that a person reach a certain point in
the permit process or make substantial good faith expenditures based
on the existing zoning before he or she develops a vested interest
in uses allowed under that zoning.
The good faith/all permits standard for VER has a similar effect
and is based in part on a similar rationale. Therefore, OSM
anticipates that, in any review of the validity of a final VER
standard, a court would consider principles analogous to those that
have guided judicial decisions on challenges to the validity of
zoning ordinances and similar land use regulatory provisions. In
general, the courts have upheld land use restrictions as a
legitimate exercise of the police power under the U.S. Constitution.
62 FR 4844, January 31, 1997.
One commenter attacked this analogy as inappropriate and
inconsistent with constitutional law. The commenter argued that zoning
authority arises from the plenary police powers reserved to the States
under the Tenth Amendment to the Constitution, while Congress'
authority to regulate intrastate coal mining derives from judicial
interpretation of the Commerce Clause of the Constitution. See United
States v. Lopez, 514 U.S. 549, 566 (1995), citing Hodel v. VSMRA,
supra. The commenter also quoted a different Supreme Court decision on
SMCRA, in which the Court stated:
We do not share the view of the District Court that the Surface
Mining Act is a land-use measure after the fashion of the zoning
ordinances typically enacted by state and local governments.
Hodel v. Indiana, 452 U.S. 314, 331 n.18 (1981).
We agree that the constitutional authority for SMCRA is the
Commerce Clause. See Hodel v. VSMRA, 452 U.S. at 275-283 (1981), and
Hodel v. Indiana, 452 U.S. at 321-329 (1981). We did not intend the
discussion in the proposed rule to be interpreted as identifying the
police power as a source of authority for either SMCRA or adoption of
implementing regulations. Rather, we intended that discussion to
explain in part why we do not anticipate that the courts will find this
standard to be a facial regulatory taking; i.e., we expect the courts
to evaluate this rule as a justifiable balancing of private rights with
protection of public interests, given the dictates of SMCRA. Our
statement that, in general, the courts have upheld land use
restrictions as a legitimate exercise of the police power under the
Constitution referred to litigation involving measures enacted by State
and local governments, not Federal laws and regulations.
One commenter argued that the good faith/all permits standard has
no takings implications because all mining in section 522(e) areas
would be either a public nuisance or a threat to public health and
safety. The commenter stated that, under background principles of
property and nuisance law, prohibition of surface coal mining
operations in these areas would never rise to the level of a
compensable taking. While this statement may be true in some cases for
some lands listed in section 522(e), the ad hoc, fact-specific nature
of takings jurisprudence means that we cannot assume that it will
always be true.
In Lucas, supra, at 17-25, the Supreme Court stated that the
``harmful or noxious use'' principle in Goldblatt v. Town of Hempstead,
369 U.S. 590 (1962), and Mugler v. Kansas, 123 U.S. 623 (1887) (the
nuisance law to which the commenter refers) was merely an earlier
description by the Court of the police power justification for allowing
the government to cause some diminution in the value of private
property without requiring that the owner of that property be
compensated. However, in Lucas, the Court held that a property owner
must be compensated for all total regulatory takings; i.e., situations
in which the owner retains no economically viable or beneficial use of
the property, unless the use or uses in question are already prohibited
under background principles of State nuisance and property law.
The Court further stated that ``[t]he fact that a particular use
has long been engaged in by similarly situated owners
[[Page 70783]]
ordinarily imports a lack of any common law prohibition.'' Lucas, 505
U.S. at 1015. This premise might apply to surface coal mining
operations in many of the areas protected by section 522(e) because
State and local laws often did not prohibit surface coal mining
operations in these areas before SMCRA. Its exact applicability would
vary from State to State and locality to locality depending on State
and local laws and the facts of each case. Hence, the commenter's claim
that all mining in section 522(e) areas is per se a public nuisance and
a threat to public health and safety is of questionable merit. See also
Whitney Benefits, Inc. v. United States, 18 Cl.Ct. 394 (1989), aff'd
926 F.2d 1169 (Fed. Cir. 1991), in which the court of appeals held
that, at least in the context of prohibiting surface coal mining
operations on alluvial valley floors, ``Congress was not in SMCRA
abating a `nuisance', within the meaning of Supreme Court and other
cases.'' Whitney Benefits at 926 F.2d 1177. However, as discussed above
and in the takings implication assessment, we believe that successful
takings claims under the good faith/all permits standard will be rare.
Some commenters argued that adoption of any standard other than the
good faith/all permits standard would result in compensable takings of
surface owners' property rights to peaceful enjoyment of their
property. We know of no Federal case law supporting this argument.
However, because we are adopting the good faith/all permits standard,
which the commenters favored, there is no need to respond to this
comment.
A few commenters warned that the takings implications of the good
faith/all permits standard may significantly disrupt State regulatory
programs because a single successful claim could devastate State
funding of these programs. The commenters stated that the threat of
large inverse condemnation awards would cause some States to relinquish
primacy, which, one commenter noted, would threaten ``the federalist
foundation of the Act.'' We find this possibility to be remote since 20
of the 24 approved State regulatory programs already include either an
all permits or a good faith/all permits standard, and have done so
since the date that we approved their programs under section 503 of the
Act.
One State regulatory authority warned that the financial exposure
resulting from adoption of the good faith/all permits standard would
likely lead to States referring all VER determinations to us to avoid
any liability for compensable takings awards, which could easily
bankrupt a regulatory agency. However, there is no provision of the Act
that authorizes such referrals. Furthermore, we believe that referrals
are unlikely because 20 of the 24 approved State programs, including
the one for the State that the commenter represents, already include an
all permits or good faith/all permits standard for VER. If a State does
attempt to refer a VER determination to us, we will take whatever
measures are appropriate under sections 503 and 504 of SMCRA.
4. Why Did We Reject the Takings Standard?
For the reasons discussed in Part VII.C.2. of this preamble, we
believe that, of all the alternatives considered for the definition of
VER, the good faith/all permits standard best comports with the intent
of Congress in enacting section 522(e). For this and other reasons, we
did not propose to adopt a takings standard for VER. However, some
persons elected to comment on either this standard or the validity of
our reasons for failing to propose a takings standard. None of the
comments received on the proposed rule provides sufficient basis for
reconsideration of our preferred alternative.
To the extent that they chose to comment on the possibility of a
takings standard, most commenters from every interest group expressed
opposition, just as they did when we formally proposed one in 1991.
Commenters provided various reasons for their opposition. Some
characterized the takings standard as unacceptably subjective or
unpredictable, with results that would vary widely from State to State
and perhaps within a State as well. Many expressed concern about the
potentially onerous information collection and analytical burdens that
this standard could place both on persons seeking a VER determination
and on the agency making the determination. Commenters noted that these
agencies are unlikely to have the resources needed to conduct a
comprehensive takings analysis. Other commenters argued that only the
courts have both the authority and the competence to determine whether
an agency action would result in a compensable taking. In addition, a
number of commenters opposed the takings standard because of their
belief that it would be far less protective of the lands listed in
section 522(e) than the good faith/all permits standard. Because we did
not propose a takings standard, we find it unnecessary to discuss the
merits of these arguments here.
In the preamble to the 1997 proposed rule, we explained that one of
the reasons why we did not propose to adopt the takings standard is
that a takings standard would be relatively difficult to administer,
compared to the other alternatives. The few commenters who supported a
takings standard as either their first or second choice argued that
difficulty in administration is not a valid reason for not selecting an
otherwise viable rulemaking alternative. We disagree. Executive Order
12988, ``Civil Justice Reform,'' encourages the adoption of rules that
do not present or create administrative difficulties.
And, in a 1985 opinion, the U.S. District Court for the District of
Columbia, while declining to rule on the merits of a takings standard,
cast doubt upon its administrative viability:
The Secretary seems to assume, and this court expresses no
opinion on this issue, that Congress intended each and every VER
determination made by a state agency or OSM to coincide precisely
with what a judicial determination of a taking would be in that
given factual setting. But * * * only a court can decide whether a
taking has occurred. Thus, while at first blush, it would appear
that the broad constitutional takings test as promulgated by the
Secretary comports with Congress' wishes to avoid any takings, it is
not clear whether the broad test or one of the mechanical tests will
better carry out congressional intent.
PSMRL II, Round III--VER, 22 Env't Rep. Cas. (BNA) at 1563 (1985).
One commenter stated that there is nothing in SMCRA or its
legislative history that suggests that VER under section 522(e) is
coextensive with the Takings Clause of the Fifth Amendment. As
discussed above and in Parts VII.C.2. and VII.C.3. of this preamble, we
agree.
Other commenters who favored either the takings standard or the
ownership and authority standard noted that both we and the courts have
frequently stated or implied that a principal purpose of the VER
exception in section 522(e) is to avoid compensable takings. This
statement is true. However, the expressions of opinion in the court
decisions cited by the commenters are not binding, either because this
particular question was not at issue in the cases before the courts or
because the court declined to rule on the merits of the issue.
Furthermore, both our prior statements suggesting that Congress
included the VER exception in section 522(e) to avoid compensable
takings (see, for example, 44 FR 14992, March 13, 1979, col. 1) and
similar expressions of opinion in court decisions relied upon the
colloquy between Congressmen Udall and Roncalio concerning VER under
section 601 of the Act. See 123 Cong. Rec. H12878 (April 29, 1977).
[[Page 70784]]
We now believe that this colloquy has little if any relevance to
the meaning of VER under section 522(e). Section 601 relates only to
the mining of minerals and materials other than coal on Federal lands,
while section 522(e) relates to surface coal mining operations on both
Federal and non-Federal lands. Given this distinction and the
references in section 601 to withdrawal of public lands from mineral
entry or leasing, we believe that it is reasonable to conclude that the
VER provision in section 601 refers to rights under the General Mining
Law, the Mineral Leasing Act, and similar Federal statutes concerning
the management and disposition of Federal lands and minerals. As
discussed in Part VIII of this preamble, the concepts of VER under
other Federal statutes are not readily translatable to VER under
section 522(e).
And, most importantly, under the canons of statutory construction,
the colloquy deserves little weight as a statement of congressional
intent. The quoted exchange is an extemporaneous discussion between two
legislators, reflecting their individual concerns and perceptions, and
it does not appear in any form in any congressional report. Thus, it
cannot be relied upon or accorded substantial weight as an expression
of congressional intent concerning VER under section 522(e). See PSMRL
I, 627 F.2d 1346, 1362 (D.C. Cir. 1980) reh. den. July 10, 1980,
quoting Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921), and
referencing 2A Sutherland, Statutory Construction, Sec. 48.13 (4th ed.
1973), which states that legislative debates ``are not a safe guide * *
* in ascertaining the meaning and purpose of the law-making body''
because they are merely ``expressive of the views and motives of
individual members.''
One commenter argued that a takings standard would be more
restrictive and environmentally protective than a good faith/all
permits standard in situations in which application of the prohibitions
would not constitute a compensable taking even though a good faith
effort to obtain all permits had been made. While this situation is
theoretically possible, the environmental impact statement for this
rulemaking predicts that, on balance, the good faith/all permits
standard would be more environmentally protective than a takings
standard.
5. Why Did We Reject the Ownership and Authority Standard?
Many commenters argued that the legislative history of SMCRA, in
combination with court decisions concerning section 522(e) of the Act
and its implementing regulations, compel the adoption of an ownership
and authority standard for VER as the only effective means of complying
with the expressed intent of Congress to preserve property rights and
avoid infringement on State property law. Commenters also noted that
the ownership and authority standard has some of the favorable
characteristics that we ascribed to the good faith/all permits
standard. In particular, they stated that the ownership and authority
standard is a bright-line standard, easy to understand and administer,
and more objective than the takings standard.
We agree with the commenters that the ownership and authority
standard is a relatively bright-line standard, relatively easy to
understand and administer, and arguably more objective than the takings
standard. However, these characteristics are not the primary factors
that we considered in selecting the good faith/all permits standard. As
discussed in part VII.C.2. of this preamble, we believe that the good
faith/all permits standard best comports with the intent of Congress in
enacting section 522(e).
While the legislative history of SMCRA could be construed in a
manner consistent with an ownership and authority standard for VER
under section 522(e), we do not concur with the commenters' assertions
that the legislative history and judicial remarks concerning that
history compel the adoption of an ownership and authority standard.
Indeed, one of the cases frequently cited, NWF v. Hodel, 839 F.2d 694
(1988), states: ``Neither the statutory language nor the legislative
history elaborate on the meaning of the phrase ``valid existing
rights'' (``VER'').'' Id. at 749.
The legislative history of section 522(e) provides little clear or
dispositive guidance on the purpose or meaning of the VER exception
apart from the statement in both the Senate and House Committee reports
that the phrase ``subject to valid existing rights'' in section 522(e)
is intended to clarify that the prohibition on strip mining in the
national forests is subject to previous State court interpretations of
VER, such as the Polino decision in West Virginia. The congressional
reports further state that this phrase is ``in no way intended to open
up national forest lands to strip mining where previous legal
precedents have prohibited stripping.'' H. R. Rep. No. 95-218, at 95
(1977) and S. Rep. No. 95-128, at 94-95 (1977).
Commenters interpreted these passages, in combination with the
separate views that Congressman Lujan attached to the House report, as
meaning that Congress intended an ownership and authority standard for
VER. In his statement of separate views, Congressman Lujan argued that:
As the Committee Report indicates, this section's limitation
that the prohibition is ``subject to valid existing rights'' is not
intended to open up national forest lands to strip mining when
previous legal precedents have prohibited stripping. Naturally, the
bill's language is also subject to the corollary that it is not
intended to preclude mining where the owner of the mineral has the
legal right to extract the coal by surface mining method[s].
H.R. Rep. No. 95-218, at 189 (1977).
However, the interpretation that Congressman Lujan insists is a
corollary to the House committee report language appears only in his
statement of separate views. If a majority of the committee concurred
with his views, this corollary presumably would have appeared in the
committee report. Because the committee report does not endorse
Congressman Lujan's corollary, we are not persuaded that his
interpretation of the committee report and the bill's language is a
legitimate expression of the intent of Congress as a whole.
In addition, the interpretation advanced by Congressman Lujan and
endorsed by the commenters likely would negate the section 522(e)
prohibitions in most situations except those involving unleased Federal
coal. This result would be inconsistent with the frequently expressed
desire of Congress to prevent new surface coal mining operations in the
areas listed in section 522(e), with certain exceptions. See, e.g., S.
Rep. No. 95-128, at 55 (1977).
Therefore, we believe that the repeated legislative history
discussions of the Polino case and property rights on national forest
lands are best read as expressing Congress' intent that the VER clause
not be construed in a manner that would ignore limitations under State
property law. We believe that our reading receives support from the
statement in the committee reports that the VER clause in section
522(e) is ``in no way intended to open up national forest lands to
strip mining where previous legal precedents have prohibited
stripping.'' H.R. Rep. No. 95-218, at 95 (1977) and S. Rep. No. 95-128,
at 94-95 (1977). And, regardless of which reading is correct, there is
no clear indication that Congress intended these discussions to apply
to lands other than the ones listed in section 522(e)(2) (Federal lands
in national forests). See, e.g., 5 J. Min. L. & Pol'y 585, 591, 592,
596 (1990).
[[Page 70785]]
Some commenters cited a colloquy between Congressmen Delbert Latta
and Morris Udall during floor debate on the 1975 version of SMCRA as
supporting an ownership and authority standard for VER under section
522(e). In this colloquy, Congressman Latta asked ``whether this
legislation affects in any way the rights of an owner of mineral rights
situated below land owned by the Federal Government.'' 121 Cong. Rec. H
6679 (March 14, 1975). After a lengthy discussion, the colloquy
concludes with the following exchange:
Mr. LATTA. * * * [I]f I understood what you said, this bill does
not deal with the situation propounded in my question, meaning where
a private citizen has sold the surface to the Federal Government and
has retained the mineral rights. This bill would not in any way
affect the mineral rights of that private citizen?
Mr. UDALL. This is a bill that deals with how one mines coal in
that situation and every other situation, but we do not attempt to
change property rights in the situation the gentleman talks about
and thus the mineral rights are not affected.
121 Cong. Rec. H 6679 (1975).
Although this colloquy does not specifically mention section 522(e)
or VER, some commenters interpret Congressman Udall's concluding
response as equating property rights under State law with VER under
section 522(e). However, we believe that his response is better read as
expressing the congressman's opinion that those provisions of SMCRA
that govern how and where one may mine coal do not change mineral or
other property rights. In any event, as discussed in part VII.C.4. of
this preamble, legislative debates cannot be relied upon or accorded
substantial weight as an expression of congressional intent. See PSMRL
I, 627 F.2d 1346, 1362 (D.C. Cir. 1980) reh. den. July 10, 1980.
Furthermore, in 1975, the House rejected an amendment that would
have replaced the phrase ``subject to valid existing rights'' in
section 522(e) with a provision allowing surface coal mining operations
on Federal lands in national forests and grasslands whenever the deeds
conveying lands to the United States reserved the coal and specifically
provided for the use of surface mining methods. 121 Cong. Rec. H 7048-
50 (March 18, 1975). We find the House's rejection of an amendment
providing an express ownership and authority standard for VER on
Federal lands in national forests to be strongly suggestive of
congressional intent. That is, we believe that this rejection suggests
that Congress did not intend an ownership and authority standard for
VER.
Except for lands with unleased Federal coal, an ownership and
authority standard would offer no significant protection to section
522(e) lands beyond that independently afforded by the right-of-entry
provisions of SMCRA's permitting requirements. Those permitting
requirements apply to all surface coal mining operations on all lands.
We find it unlikely that Congress intended the VER exception to be so
broad that the prohibitions and restrictions of section 522(e) would
afford only marginal and duplicative protection to most lands listed in
that section. See the statements emphasizing the importance of
protecting these lands in S. Rep. No. 95-128, at 54-55 and 94 (1977).
Industry argues that the ownership and authority standard would
still give meaning to the prohibitions of section 522(e) because it
would prohibit surface coal mining operations on those lands in section
522(e) for which the Federal Government owns the mineral interests. We
do not agree with the commenters' argument. Federal coal leases in
existence at the time that land comes under the protection of section
522(e) and 30 CFR 761.11 might convey sufficient property rights to
satisfy an ownership and authority standard. Furthermore, we do not
believe that Congress intended to restrict the prohibitions in this
fashion. If it did, Congress could have achieved this result in a far
more straightforward manner by prohibiting any future leases of Federal
coal interests for the lands listed in section 522(e). In fact,
Congress did just that with respect to Federal lands designated as
unsuitable for all or certain types of surface coal mining operations
pursuant to section 522(b) of the Act. In addition, if this were
Congress' sole intent in creating section 522(e), Congress would have
had little reason to enact the prohibitions of paragraphs (e)(3)
through (e)(5) of that section, since these paragraphs apply primarily
to non-Federal lands.
Commenters favoring the ownership and authority standard and
opposing the good faith/all permits standard cite various Federal court
decisions involving the application of SMCRA requirements as supporting
their position. These cases include Meridian Land & Mineral Co. v.
Hodel, 843 F.2d 340, 346 (9th Cir. 1988); Ainsley v. U.S., 8 Cl.Ct.
394, 401 (1985); Otter Creek Coal Co. v. U.S., 231 Ct. Cl. 878, 880
(1982); Sunday Creek Coal Co. v. Hodel, C.A. No. C-2-88-0416 (S.D. Ohio
June 2, 1988); and Belville Mining Co. v. U.S., 763 F. Supp. 1411, 1420
(S.D. Ohio 1991) and 999 F.2d 989, 992 (6th Cir. 1993) (``Belville
II''). However, apart from Sunday Creek, which lacks precedential
effect outside the Southern District of Ohio, these cases do not
involve a challenge to the validity of the good faith/all permits
standard for VER. Indeed, except for Belville II and Sunday Creek, the
decisions do not even involve VER determinations. Therefore, to the
extent that the judicial opinions cited by the commenters theorize on
the meaning of VER under section 522(e), those statements of theory are
properly regarded as dicta because that question was not properly
before the court in any of these cases.
Furthermore, the theoretical discussions in these opinions
generally center on the colloquy between Congressmen Udall and Roncalio
concerning VER under section 601 of the Act. See 123 Cong. Rec. H 12878
(1977) (April 29, 1977). We believe that the colloquy, which does not
concern surface coal mining operations or section 522(e), has little
relevance to the meaning of VER under section 522(e). As discussed in
part VII.C.4. of this preamble, it cannot be relied upon or accorded
substantial weight as an expression of congressional intent concerning
VER under section 522(e). See PSMRL I, 627 F.2d 1346, 1362 (D.C. Cir.
1980) reh. den. July 10, 1980 (citations omitted).
In Belville II, the courts did not consider any regulatory
definition of VER in determining whether Belville had the right to
conduct surface coal mining operations on Federal lands within the
Wayne National Forest. Instead, they proceeded directly to an
examination of property rights under State law, finding that Belville
had VER under SMCRA whenever it had authority under State property law
to conduct surface coal mining operations. However, these decisions
lack precedential effect outside the Sixth Circuit.
For the reasons discussed above and in other portions of Part
VII.C. of this preamble, we decline to adopt the rationale advanced in
the Belville II decisions. We believe that the legislative history of
SMCRA either supports or is not demonstrably inconsistent with adoption
of a good faith/all permits standard for VER. In addition, we believe
that the good faith/all permits standard is the most reasonable policy
choice for a VER standard consistent with the purposes of section
522(e) as discussed in part VII.C.2. of this preamble.
Commenters also point to the decision of the U.S. Court of Appeals
for the Federal Circuit upholding the portion of the 1983 VER
definition that extended VER to existing operations on lands that
[[Page 70786]]
come under the protection of section 522(e) after August 3, 1977. In
its opinion, the court stated that:
The legislative history, however, is of some help. Although it
does not answer the specific question before us, it does suggest
that Congress did not intend to infringe on valid property rights or
effect takings through section 522(e).
NWF v. Hodel, 839 F.2d at 750 (1988) (footnote omitted).
However, the court did not identify any element of the Act's
legislative history that supports this conclusion. And its opinion also
states: ``Neither the statutory language nor the legislative history
elaborate on the meaning of the phrase `valid existing rights'
(``VER'').'' Id. at 749. Finally, we note that the entire VER
definition was not before the court--only the issue of VER for
operations in existence on lands coming under the protection of the Act
after August 3, 1977. Therefore, we cannot agree with the commenters
that the court's decision provides clear guidance concerning the
meaning of VER under section 522(e).
D. Paragraph (b)(2): ``Needed for and Adjacent'' Standard.
1. What Is the History of This Standard
The needed for and adjacent standard first appears in the
definition of VER promulgated on March 13, 1979 (44 FR 14902, 15342);
we did not include it in the 1978 proposed rule that preceded the 1979
final rule. The 1979 definition provided that a permit applicant with a
property right to produce coal by surface coal mining operations as of
August 3, 1977, possessed VER if the coal was both needed for and
immediately adjacent to an ongoing surface coal mining operation for
which all permits were obtained prior to August 3, 1977. The preamble
provides the following explanation of the basis for this standard:
In analyzing the value of the property, the courts have
distinguished an owner's value in an ongoing operation which must be
halted, as compared with value that an owner has paid for some
future operation that will be restricted. The taking cases reflect
less sympathy for property owners who are denied some future
opportunity to exploit their property interests based on prior
beliefs that the property would be available for development; but
most courts express concern over government interference with an
ongoing operation which causes a 100 percent diminution in value
unless it is a harmful use and falls within the noxious use
category. This distinction suggests that VER could be defined
differently for owners of coal which is essential to continue an
ongoing mine, as compared to property rights in coal for a potential
new mine.
44 FR 14992, March 13, 1979, col. 2.
The National Wildlife Federation challenged this standard as unduly
expanding the scope of the VER exception beyond that intended by
Congress. However, the court upheld the standard, finding it to be ``a
rational method of allowing mining when denial would gravely diminish
the value of the entire mining operation, thereby constituting a taking
under Supreme Court declarations.'' PSMRL I, Round I, 14 Env't Rep.
Cas. (BNA) at 1091-92 (1980).
On September 14, 1983 (48 FR 41312, 41349), we promulgated a
revised definition of VER that modified the needed for and adjacent
standard by deleting the requirement for a demonstration that the
property right to remove the coal by surface coal mining operations
existed as of August 3, 1977 (although our response to a comment
concerning this issue at 48 FR 41316 suggests that the deletion may
have been unintentional). In that rulemaking, we also defined ``needed
for'' as meaning that the extension of mining to the coal in question
is essential to make the surface coal mining operation as a whole
economically viable.
The National Wildlife Federation challenged these changes as being
both procedurally and substantively improper. The U.S. District Court
for the District of Columbia agreed in part, finding that we had failed
to comply with the Administrative Procedure Act (5 U.S.C. 553) by not
affording the public adequate notice and opportunity for comment on
these two changes. The court did not rule on the merits of the revised
standard. See PSMRL II, Round III-VER, 22 Env't Rep. Cas. (BNA) at
1566-67.
On November 20, 1986 (51 FR 41952, 41961), we suspended paragraph
(c) of the 1983 definition of VER. In the preamble to the suspension
notice, we stated that, pending adoption of a new rule, we would rely
upon the approved State program definition in primacy States. In non-
primacy States, the suspension had the effect of restoring the 1979
version of the needed for and adjacent standard, which did not contain
a definition of ``needed for.'' See 51 FR 41954-55, November 20, 1986.
On July 18, 1991 (56 FR 33152, 33164), we proposed to revise the
1983 definition by reinstating the property rights demonstration
requirement and by removing the sentence defining the ``needed for''
component of the standard. In the preamble to that proposed rule, we
stated that the explanation of ``needed for'' in the 1983 definition
did not substantively clarify the meaning or application of the needed
for and adjacent standard. In addition, we proposed to replace the
requirement that both the operation and the property rights to expand
the operation onto adjacent lands have been in existence on August 3,
1977, with a requirement that both have been in existence on the date
that the land for which the exception is sought came under the
protection of 30 CFR 761.11 and section 522(e) of the Act. The latter
change reflects the concept embodied in paragraph (d)(1) of the former
(1983) definition, which was upheld in NWF v. Hodel, 839 F.2d at 750
(1988).
2. How Did We Propose To Revise This Standard in 1997?
On January 31, 1997 (62 FR 4836, 4860), we proposed a needed for
and adjacent standard similar to the one proposed in 1991, with a few
modifications. In addition to the changes in the property rights
demonstration component (see Part VII.B. of this preamble), the 1997
proposed rule specified that the standard would apply to land, not just
coal, needed for an existing operation. Under State law, a permittee or
operator may have legitimate property interests in land apart from the
coal itself. Land may be essential to the operation for reasons other
than the coal it contains. For example, an operator has little leeway
in the location of ventilation shafts for underground mines. Part
VII.B. of this preamble contains a more extensive discussion of this
issue.
The definition proposed in 1997 also attempted to eliminate any
ambiguity caused by use of the term ``ongoing surface coal mining
operation'' in the 1979 and 1983 rules. In 1991, we essentially
proposed to replace ``ongoing'' with ``existing.'' However, comments
received on that proposal indicated some uncertainty as to whether
``ongoing'' or ``existing'' included operations that are fully approved
but inactive or unstarted. Accordingly, in 1997, we proposed to define
this standard to include land needed for and adjacent to surface coal
mining operations for which all permits had been obtained, or a good
faith effort to obtain such permits had been made, before the land came
under the protection of 30 CFR 761.11 and section 522(e) of the Act.
The preamble to the proposed rule explained that we could find no
rational basis for differentiating between active operations and those
that are approved but inactive or unstarted. Both categories of
operations engender the same type of investment-backed expectations.
Both involve situations in which the permittee has
[[Page 70787]]
made significant resource outlays in an effort to realize those
expectations.
3. How Does the Standard in the Final Rule Differ From the One That We
Proposed in 1997?
After evaluating the comments received, we are adopting the needed
for and adjacent standard as proposed in 1997, with several substantive
and editorial changes. To establish VER under the needed for and
adjacent standard in parag
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