# Abandoned Mine Land Program

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URL: https://www.frixlaw.com/law-library/documents/fr%3AE8-13310

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** June 20, 2008
- **Citation:** 73 FR 35214

## Text

DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation and Enforcement
30 CFR Parts 700, 724, 773, 785, 816, 817, 845, 846, 870, 872, 873, 874, 875, 876, 879, 880, 882, 884, 885, 886, and 887
RIN 1029-AC56
[Docket ID: OSM-2008-0003]
Abandoned Mine Land Program

AGENCY:

Office of Surface Mining Reclamation and Enforcement, Interior.

ACTION:

Proposed rule.

SUMMARY:

We, the Office of Surface Mining Reclamation and Enforcement (OSM), are proposing regulation changes to the Abandoned Mine Reclamation Fund (Fund) and the Abandoned Mine Land (AML) program. This proposed rule revises our regulations to be consistent with the Tax Relief and Health Care Act of 2006, Pub. L. 109-432, signed into law on December 20, 2006, which included the Surface Mining Control and Reclamation Act Amendments of 2006 (the 2006 amendments). The proposed rule reflects the extension of our statutory authority to collect reclamation fees for an additional fourteen years and to reduce the fee rates. This proposal also updates the regulations in light of the statutory amendments that change the activities State and Tribal reclamation programs may perform under the AML program, funding for reclamation grants to States and Indian tribes, and transfers to the United Mine Workers of America (UMWA) Combined Benefit Fund (CBF), the UMWA 1992 Benefit Plan, and the UMWA Multiemployer Health Benefit Plan (1993 Benefit Plan). Finally, our proposed rule extends incentives reauthorized by the 2006 amendments pertaining to the remining of certain lands and water adversely affected by past mining.

DATES:

Comments on the proposed rule must be received on or before August 19, 2008, in order to ensure our consideration. We will accept requests to speak at a public hearing until 5 p.m., Eastern Time on July 11, 2008.

ADDRESSES:

You may submit comments by any of the following methods:

•
Federal e-Rulemaking Portal: http://www.regulations.gov
. The rule is listed under the agency name “OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT.” The proposed rule has been assigned Docket ID: OSM-2008-0003.

If you would like to submit comments through the Federal e-Rulemaking Portal, go to
www.regulations.gov
and do the following. Click on the “Advanced Docket Search” button on the right side of the screen. Type in the Docket ID OSM-2008-0003 and click the “Submit” button at the bottom of the page. The next screen will display the Docket Search Results for the rulemaking. If you click on OSM-2008-0003, you can view the proposed rule and submit a comment. You can also view supporting material and any comments submitted by others.

•
Mail/Hand-Delivery/Courier to:
Office of Surface Mining Reclamation and Enforcement, Administrative Record, Room 252-SIB, 1951 Constitution Avenue, NW., Washington, DC 20240. Please include the rule Docket ID (OSM-2008-0003) with your comment.

We cannot ensure that comments received after the close of the comment period (see
DATES
) will be included in the docket for the rulemaking and considered. Comments sent to an address other than those listed above (see
ADDRESSES
) will not be included in the docket for the rulemaking.

For detailed instructions on submitting comments and additional information on the rulemaking process, see “IV. Public Comment Procedures” in the
SUPPLEMENTARY INFORMATION
section of this document.

If you wish to comment on the information collection aspects of this proposed rule, you may submit your comments to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention: Interior Desk Officer, via e-mail to
OIRA_DOCKET@omb.eop.gov
, or via facsimile to 202-365-6566.

FOR FURTHER INFORMATION CONTACT:

Danny Lytton, Chief, Reclamation Support Division, 1951 Constitution Ave., NW., Washington, DC 20240; Telephone: 202-208-2788; E-mail:
dlytton@osmre.gov
.

SUPPLEMENTARY INFORMATION:

I. Background on the Reclamation Fee and the Abandoned Mine Land Program

II. Outreach, Guidance, and Comments

III. Description of the Proposed Rule

IV. Public Comment Procedures

V. Procedural Determinations

I. Background on the Reclamation Fee and the Abandoned Mine Land Program

A. How did the reclamation fee work before the 2006 amendments?

Title IV of the Surface Mining Control and Reclamation Act of 1977 (SMCRA) created an AML reclamation program funded by a reclamation fee assessed on each ton of coal produced. The fees collected have been placed in the Fund. We, either directly or through grants to States and Indian tribes with approved AML reclamation plans under SMCRA, have been using money from the Fund primarily to reclaim lands and waters adversely impacted by mining conducted before the enactment of SMCRA and to mitigate the adverse impacts of mining on individuals and communities. Also, since Fiscal Year (FY) 1996, an amount equal to the interest earned by and paid to the Fund has been available for direct transfer to the UMWA CBF to defray the cost of providing health care benefits for certain retired coal miners and their dependents.
See
Energy Policy Act of 1992, Pub. L. 102-486, 106 Stat. 2776, 3056, § 19143(b)(2) of Title XIX.

Section 402(a) of SMCRA fixed the reclamation fee for the period before September 30, 2007, at 35 cents per ton (or 10 percent of the value of the coal, whichever is less) for surface-mined coal other than lignite, 15 cents per ton (or 10 percent of the value of the coal, whichever is less) for coal from underground mines, and 10 cents per ton (or 2 percent of the value of the coal, whichever is less) for lignite. As originally enacted, section 402(b) of SMCRA authorized collection of reclamation fees for 15 years following the date of enactment (August 3, 1977); thus, our fee collection authority would have expired August 3, 1992. However, Congress extended the fees and our fee collection authority through September 30, 1995, in the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508, 104 Stat. 1388, § 6003(a)). The Energy Policy Act of 1992 (Pub. L. 102-486, 106 Stat. 2776, 3056, § 19143(b)(1) of Title XIX), extended the fees through September 30, 2004. A series of short interim extensions in appropriations and other acts extended the fees through September 30, 2007.

B. How did the AML program work before the 2006 amendments?

SMCRA established the AML reclamation program in response to concern over extensive environmental damage caused by past coal mining activities. Before the 2006 amendments, the AML program reclaimed eligible lands and waters using money appropriated by Congress from the Fund, which came from the reclamation fees collected from the coal mining industry. Eligible lands and waters were those which were mined for coal or affected by coal mining or coal processing, were abandoned or left inadequately reclaimed prior to the

enactment of SMCRA on August 3, 1977, and for which there was no continuing reclamation responsibility under State or other Federal laws.

SMCRA established a priority system for reclaiming coal problems. Before the 2006 amendments, the AML program had five priority levels, but reclamation was focused on eligible lands and waters that reflected the top three priorities. The first priority was “the protection of public health, safety, general welfare, and property from extreme danger of adverse effects of coal mining practices.” 30 U.S.C. 1233(a)(1) (unamended). The second priority was “the protection of public health, safety, and general welfare from adverse effects of coal mining practices.” 30 U.S.C. 1233(a)(2) (unamended). The third priority was “the restoration of land and water resources and the environment previously degraded by adverse effects of coal mining practices * * *.” 30 U.S.C. 1233(a)(3) (unamended).

As the law required, the Fund was divided into State or Tribal and Federal shares. Each State or Indian tribe with a Federally approved reclamation plan was entitled to receive 50 percent of the reclamation fees collected annually from coal operations conducted within its borders. The “Secretary's share” of the Fund consisted of the remaining 50 percent of the reclamation fees collected annually and all other receipts to the Fund. The Secretary's share was allocated into three shares as required by the 1990 amendments to SMCRA.
See
Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, 104 Stat. 1388, § 6004. First, we allocated 40% of the Secretary's share to “historic coal” funds to increase reclamation grants to States and Indian tribes for coal reclamation. However, all the funds which were allocated may not have been appropriated. Second, we allocated 20% to the Rural Abandoned Mine Program (RAMP), operated by the Department of Agriculture, which was authorized to receive AML funding but has not been appropriated AML funds since the mid 1990's. Last, SMCRA required us to allocate 40% to “Federal expense” funds to provide grants to States for emergency programs that abate sudden dangers to public health or safety needing immediate attention, to increase reclamation grants in order to provide a minimum level of funding to State and Indian tribal programs with unreclaimed coal sites, to conduct reclamation of emergency and high-priority coal sites in areas not covered by State and Indian tribal programs, and to fund our operations that administer Title IV of SMCRA.

States with an approved State coal regulatory program under Title V of SMCRA and with eligible coal mined lands may develop a State program for reclamation of abandoned mines. The Secretary may approve the State reclamation program and fund it. At the time the 2006 amendments were enacted, 23 States received annual AML grants to operate their approved reclamation programs. Three Indian tribes (the Navajo, Hopi and Crow Indian tribes) without approved regulatory programs have received grants for their approved reclamation programs as authorized by section 405(k) of SMCRA.

Before the 2006 amendments, only a State or Indian tribe was authorized to certify that it had addressed all known coal problems within the State or on Indian lands within its jurisdiction. These certified States and Indian tribes were able to use AML grant funds to abate the impacts of mineral mining and processing. SMCRA established the following priorities for the certified programs:

(1) The protection of public health, safety, general welfare, and property from extreme danger of adverse effects from mineral mining and processing practices.

(2) The protection of public health, safety, and general welfare from adverse effects of mineral mining and processing practices.

(3) The restoration of land and water resources and the environment previously degraded by the adverse effects of mineral mining and processing practices.

30 U.S.C. 1240a(c). Certified States and Indian tribes could also use these funds to improve or construct utilities adversely affected by mineral mining and to construct public facilities in communities impacted by coal or mineral mining or processing. 30 U.S.C. 1240a(e). Certified States and Indian tribes could also use these funds for activities or construction of specific public facilities related to the coal or minerals industry in areas impacted by coal or minerals development. 30 U.S.C. 1240a(f).

In contrast, uncertified States and Indian tribes could use AML grant funds on noncoal projects only to abate extreme dangers to public health, safety, general welfare, and property that arose from the adverse effects of mineral mining and processing and only at the request of the Governor or the governing body of the Indian tribe. 30 U.S.C. 1239.

The minimum program funding level provided additional grant funding to uncertified States and Indian tribes so that each reclamation program would receive enough annual AML funding to support a viable program. Before the 2006 amendments, SMCRA set the minimum program level at $2 million. 30 U.S.C. 1232(g)(8) (as amended by the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, § 6004). However, appropriations have generally only funded the minimum program level at $1.5 million.
See, e.g.
, Department of the Interior, Environment, and Related Agencies Appropriations Act, 2006, Pub. L. 109-54, 119 Stat. 513 (2005) (“[G]rants to minimum program States will be $1,500,000 per State in fiscal year 2006.”). The Federal Fiscal Year runs from October 1 through September 30, so that FY 2006 is October 1, 2005, through September 30, 2006. SMCRA did not mandate a particular share of the Fund be used to support the minimum program, and we chose to use moneys from the Federal expenses share of the Fund for this purpose.

Before the 2006 amendments, States and Indian tribes were allowed to deposit up to 10 percent of their State or Tribal share and 10 percent of their historic coal share funds into set-aside accounts for either future coal reclamation or acid mine drainage treatment programs or both. 30 U.S.C. 1232(g)(6) (as amended by the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, § 6004). In addition, uncertified States and Indian tribes were allowed to spend up to 30% of their funds on water supply projects that protect, repair, replace, construct, or enhance water supply facilities adversely affected by coal mining practices. 30 U.S.C. 1233(b)(1) (as amended by the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, § 6005).

C. How did the 2006 amendments change these programs?

The Surface Mining Control and Reclamation Act Amendments of 2006 were signed into law as part of the Tax Relief and Health Care Act of 2006, on December 20, 2006. Pub. L. 109-432. The 2006 amendments revise Title IV of SMCRA to make significant changes to the reclamation fee and the AML program. The changes are summarized as follows:

• OSM's reclamation fee collection authority is extended through September 30, 2021. The statutory fee rates are reduced by 10 percent from the current levels for the period from October 1, 2007, through September 30, 2012. The fee rates are reduced by an additional 10 percent from the original levels for the period from October 1,

2012, through September 30, 2021. 30 U.S.C. 1232(a).

• The Fund allocation formula is changed. Beginning October 1, 2007, certified States will no longer be eligible to receive State share funds. 30 U.S.C. 1231(f)(3)(B). Instead, amounts which would have been distributed as State share for fee collections for certified States will be distributed as historic coal funds. 30 U.S.C. 1240a(h)(4). The RAMP share is eliminated.
See
30 U.S.C. 1232(g). The historic coal allocation is further increased by the amount that previously was allocated to RAMP. 30 U.S.C. 1232(g)(5).

• Distributions of annual fee collections are made outside of the appropriations process. Once fully phased in, most fee collections will go to States and Indian tribes in annual mandatory distributions. Mandatory distributions from the Fund for uncertified States and Indian tribes include the State or Tribal share of all fees collected for coal produced the previous fiscal year, historic coal funds allocated from previous fiscal year production and also transferred from collections for certified States and Indian tribes for the previous fiscal year, and minimum program make up funding. 30 U.S.C. 1232(g)(1), (g)(5), and (g)(8)(A). These mandatory distributions are phased in at 50 percent for FY 2008 and FY 2009, and 75 percent for FY 2010 and FY 2011; full funding will be reached in FY 2012. 30 U.S.C. 1231(f)(5). After the end of the fee collection period, mandatory distributions of money from the Fund for FY 2023 and subsequent years will continue from balances in the Fund at the same level as FY 2022 to the extent funds are available. 30 U.S.C. 1231(f)(2)(B).

• Certified States and Indian tribes will receive mandatory distributions of Treasury funds in lieu of the State and Tribal share they will no longer be eligible to receive. 30 U.S.C. 1240a(h)(2). This mandatory distribution will be phased in at 25 percent for the first year, 50 percent for the second year, 75 percent for the third year, and fully distributed in the fourth year and thereafter. 30 U.S.C. 1240a(h)(3)(B). These funds may be used to address coal problems that arise after certification and for other purposes.

• All States and Indian tribes with approved reclamation plans are paid amounts equal to their unappropriated prior balance of State and Tribal share funds from fees collected on coal produced before October 1, 2007. 30 U.S.C. 1240a(h)(1)(A)(i). Payments will be made in seven equal annual installments beginning in FY 2008. 30 U.S.C. 1240a(h)(1)(C). Payments are mandatory distributions from Treasury funds. These payments must be used by uncertified States and Indian tribes for the purposes of section 403 of SMCRA. 30 U.S.C. 1240a(h)(1)(D)(ii). These payments must be used by certified States and Indian tribes for purposes established by the State legislature or Tribal council, with priority given for addressing the impacts of mineral development. 30 U.S.C. 1240a(h)(1)(D)(i). Amounts in the Fund previously designated as State or Tribal share equal to the unappropriated balance payments will be transferred to historic coal funds as payments are made and used for reclamation grants in FY 2023 and thereafter. 30 U.S.C. 1240a(h)(4).

• The minimum funding level for each State or Indian tribe with an approved reclamation plan and unfunded high priority coal reclamation problems is increased to $3 million. 30 U.S.C. 1232(g)(8)(A). This funding is also a mandatory distribution. However, like the rest of the distributions from the Fund, these distributions will be phased in at 50 percent for FY 2008 and FY 2009, and 75 percent for FY 2010 and FY 2011; full funding will be reached in FY 2012. 30 U.S.C. 1231(f)(5).

• The States of Tennessee and Missouri are each authorized to receive minimum program make up funding for their approved State reclamation programs even if they do not meet other requirements, such as having an approved coal regulatory program. 30 U.S.C. 1232(g)(8)(B).

• Other than for minimum program make up funding, expenditures from the Secretary's share must be appropriated by Congress. 30 U.S.C. 1231(d)(a). These uses for Federal expense funding include the emergency reclamation program, Federal reclamation programs, the Watershed Cooperative Agreement Program, and our AML administrative expenses.

• The limit on set aside funding for acid mine drainage (AMD) treatment programs is increased from 10 percent to 30 percent of State or Tribal share funds and historic coal funds. 30 U.S.C. 1232(g)(6). In addition, States and Indian tribes are no longer required to get our approval for AMD plans.
Id.
Set aside funding for future coal reclamation is no longer authorized.
Id.
The previous cap of 30 percent for water supply restoration projects is eliminated. 30 U.S.C. 1233(b).

• There are only three AML coal reclamation priorities because the previous priorities 4 and 5 have been removed. 30 U.S.C. 1233(a). Also, “general welfare” is eliminated as a component of priorities 1 and 2. 30 U.S.C. 1233(a)(1) and (a)(2). OSM must now ensure strict compliance with the coal priorities until the State or Indian tribe is certified. 30 U.S.C. 1232(g)(2). States and Indian tribes may initiate Priority 3 reclamation projects before completing all Priority 1 and 2 projects only if the Priority 3 reclamation is performed in conjunction with a Priority 1 or 2 project. 30 U.S.C. 1232(g)(7). Priority 3 lands and waters adjacent to past, present, and future Priority 1 and 2 project sites may be reclassified to Priority 1 or 2. 30 U.S.C. 1233(a)(1)(B)(ii) and 1233(a)(2)(B)(ii).

• The previous prohibition on filing a lien against the beneficiary of an AML reclamation project if the person owned the surface before May 2, 1977, is eliminated. 30 U.S.C. 1238(a). The automatic lien waiver is now extended to all landowners who did not consent to, participate in, or exercise control over the mining operations that necessitated the reclamation.

• We must approve amendments to the AML inventory system. 30 U.S.C. 1233(c).

• We may certify that a State or Indian tribe has completed coal reclamation without prior request from the State or Indian tribe. 30 U.S.C. 1240a(a)(2).

• There is a cap of $490 million on total annual Treasury funding under this legislation. 30 U.S.C. 1232(i)(3)(A). This cap limits payments to States and Indian tribes under 30 U.S.C. 1240a(h) and the payments to the CBF, 1992 Benefit Plan, and the 1993 Benefit Plan, collectively known as the “UMWA health care plans,” under 30 U.S.C. 1232(h) and 1232(i)(1).

• Subject to certain limitations, to the extent payments from premiums and other sources do not meet the financial needs of the UMWA health care plans, all estimated Fund interest earnings for each fiscal year must be transferred to these plans. 30 U.S.C. 1232(h). The unappropriated balance of the RAMP allocation as of December 20, 2006, is also available for transfer to the UMWA health care plans. 30 U.S.C. 1232(h)(4)(B). These additional transfers to the CBF began in FY 2007, while transfers to the 1992 and 1993 Benefit Plans began in FY 2008. 30 U.S.C. § 1232(h)(1). Transfers to the 1992 and 1993 Benefit Plans are phased in, with transfers in FY 2008-2010 limited to 25%, 50%, and 75% respectively, of the amounts that would otherwise be transferred. 30 U.S.C. 1232(h)(5)(C). If necessary to meet their financial needs, the UMWA health care plans are also entitled to payments from

unappropriated amounts in the Treasury, subject to the overall $490 million cap on all transfers from the Treasury under the 2006 amendments. 30 U.S.C. 1232(i)(1)(B) and (i)(3)(A). All interest earned by the Fund before December 20, 2006, and not previously transferred to the CBF is set aside in a reserve fund that will be used to make payments to the UMWA health care plans in the event that their financial needs exceed the annual cap. 30 U.S.C. 1232(h)(4)(A).

• The 2006 amendments removed the expiration date for remining incentives initially authorized on October 24, 1992, when SMCRA was amended to include a new section 510(e) that created an exemption from the section 510(c) permit-block sanction for remining operations and a new section 515(b)(20)(B) that provided incentives for certain eligible remining operations in the form of reduced revegetation responsibility periods (2 years in the East and 5 years in the West). Energy Policy Act of 1992, Pub. L. 102-486, § 2503. Until the 2006 amendments, those remining incentives had a statutorily defined expiration date of September 20, 2004, under 510(e) of SMCRA.
Id.

• The 2006 amendments authorized us to develop regulations to promote remining of eligible land under section 404 in a manner that leverages the use of amounts from the Fund to achieve more reclamation. 30 U.S.C. 1244

• Upon our approval, an Indian tribe may develop “a tribal program under section 503 [of SMCRA] regulating in whole or in part surface coal mining and reclamation operations on reservation land under the jurisdiction of the Indian tribe using the procedures of section 504(e).” 30 U.S.C. 1300(j).

II. Outreach, Guidance, and Comments

Since the enactment of the 2006 amendments, we have notified potentially affected parties of the statutory amendments and solicited comments on issues related to the 2006 amendments. In January and September 2007, we notified all fee payers in writing of the fee rate changes. In January, February, and May 2007, we met with representatives of States and Indian tribes with approved reclamation programs at meetings hosted by the Interstate Mining Compact Commission (IMCC) and the National Association of Abandoned Mine Land Programs (NAAMLP) to notify the States and Indian tribes of the 2006 amendments' changes to SMCRA and to seek their input on the amendments. The IMCC and NAAMLP subsequently submitted joint written comments on specific provisions of the amendments. The IMCC and the NAAMLP, among others, raised the following major issues in their written comments.

First, the commenters proposed that we allow individual States and Indian tribes to choose between receiving Treasury moneys under section 411(h) through a traditional grant or by a “direct payment mechanism.” The commenters recognized that we might prefer to use grants to pay the section 411(h) funds rather than some type of “direct distribution of cash from the Treasury.” However, the commenters noted that SMCRA does not directly address this issue and stated that the “Secretary has the discretion to design a payment mechanism that meets the needs of the States and tribes.” They urged us to develop some type of “direct payment mechanism” similar to that used to pay mineral royalties to States under the Mineral Leasing Act. The commenters stated that the State legislatures and Tribal councils will ensure States and Indian tribes use the funds legally and appropriately under SMCRA and State and Tribal contracting law and that Federal audits will scrutinize project selection and expenditures.

Second, the commenters expressed concern that States and Indian tribes at the minimum program funding level would receive less than $3 million until FY 2012. The commenters pointed out that uncertified States that receive funding at the “minimum program” level often have serious Priority 1 and 2 abandoned coal mine problems. They also discussed the fact that SMCRA historically guaranteed States and Indian tribes at least $2 million, but that this minimum funding level was rarely, if ever, met. The IMCC and NAAMLP asserted that the $3 million floor amount in section 402(g)(8)(A) only mandates that we cannot spend more than $3 million from the Federal expense funds. In addition, they contend that section 401(f)(5)(B) of SMCRA requires us to phase in only those Federal expense funds that we might provide in excess of the $3 million floor level of funding provided for in section 402(g)(8)(A).

Third, the commenters specifically objected to any limitations that would prohibit uncertified States and Indian tribes from using prior balance replacement funds from Treasury under section 411(h)(1) to abate high priority noncoal hazards or for placement in an AMD set aside account. The commenters expressed concern that requiring uncertified States and Indian tribes to use prior balance replacement funds for coal reclamation only would prevent those States and Indian tribes from using the moneys to reclaim equally or even more dangerous hazards associated with noncoal mining and hinder the treatment of AMD. In addition, they pointed out that the prior balance replacement funds are received in place of State or Tribal share funds from reclamation fees previously collected in each State and on Indian lands that Congress never appropriated for distribution to the respective States and Indian tribes. Because uncertified States and Indian tribes are permitted to use section 402(g)(1) funds for noncoal reclamation and for AMD set-aside funds, the commenters maintain that they should be allowed to use the prior balance replacement funds for the same purposes.

The IMCC and NAAMLP also raised many other issues in their comments. They suggested that the first certified in lieu payments should be for FY 2009. They suggested that the terms “adjacent” and “in conjunction” should be applied to AML Priority decisions using simple definitions without additional monetary or timing criteria. They urged OSM to make fund distributions as early in the FY as possible.

We considered all the comments we received in developing this proposed rule.

In order to facilitate distribution of funds for FY 2008, as required in the 2006 amendments, the Director of OSM issued written guidance in December, 2007. To the extent feasible, we have restated and expanded upon the content of that guidance in this proposed rule. We intend to make that December 2007 written guidance part of the docket for this rulemaking to be available for public inspection.

The December 2007 written guidance was based in part on a December 2007 memorandum opinion (M opinion), from the Department of the Interior, Office of the Solicitor, which analyzed three issues related to AML funding.
See
Funding to States and Indian Tribes Under the Surface Mining Control and Reclamation Act of 1977, as Amended by the Tax Relief and Health Care Act of 2006, M-37014 (December 5, 2007). In this M-opinion, the Office of the Solicitor advised us that:

• We are required to use grants to pay prior balance replacement funds and certified in lieu funds to eligible States and Indian tribes under sections 411(h)(1) and (h)(2) of SMCRA;

• Uncertified States and Indian tribes may not use prior balance replacement funds that they receive under section 411(h)(1) of SMCRA for noncoal

reclamation and for the AMD set aside authorized by section 402(g)(6); and

• The minimum program make up funds that eligible uncertified States and Indian tribes are entitled to receive under section 402(g)(8)(A) of SMCRA are subject to the four year phase-in provision of section 401(f)(5)(B).

III. Description of the Proposed Rule

This proposed rulemaking seeks to revise our regulations to be consistent with all of the revisions to SMCRA contained in the 2006 amendments, except for those provisions relating to the remining incentives provisions leveraging amounts from the Fund. The remining incentives provisions that leverage amounts from the Fund are the subject of a separate rulemaking published on May 1, 2008, at 73 FR 24120.

Generally, this rulemaking sets forth proposed standards and procedures for the coal reclamation fee, the Fund, and the AML program. This proposed rule includes extensive proposals for long term operations of the amended Title IV program, including provisions of the 2006 amendments that will become effective at later dates. We are also taking advantage of this rulemaking opportunity to propose other changes that we believe are needed to update and clarify related Parts of our existing regulations. Throughout this proposed rule, the terms “money” and “moneys” are interchangeable with the terms “fund” or “funds,” but not with the term “Fund,” as defined in proposed § 700.5.

The proposed changes generally fall into three categories:

• Align our existing regulations to be consistent with the 2006 amendments to SMCRA as interpreted by the M-opinion;

• Use plain English to make the regulations easier to understand where no substantive change is intended; and

• Provide further guidance and clarification on implementation of the 2006 amendments where appropriate or needed.

A detailed discussion of all of the proposed revisions follows.

Part 700—General

Definitions (§ 700.5)

We are proposing to revise the definitions in § 700.5 in several ways. First, we are proposing to add two new definitions (“AML” and “AML inventory”). The addition of these two definitions will improve the clarity of the proposed regulations contained in this rulemaking.

Second, we are moving six existing definitions (“eligible lands and water,” “emergency,” “extreme danger,” “left or abandoned in either an unreclaimed or inadequately reclaimed condition,” “project,” and “reclamation activity”) to § 700.5 because these terms apply to all of the regulations in Chapter VII of Title 30 of the Code of Federal Regulations. These terms were previously codified in § 870.5, which only applies to regulations related to AML reclamation fee collection. We are not proposing any substantive changes to the text of the definitions of these six terms. We are, however, correcting a mistake in the definition of eligible lands and water. The existing definition states, in part, that “[f]ollowing certification of the completion of all known coal problems, eligible lands and water for noncoal reclamation purposes are those sites that meet the eligibility requirements specified” in § 874.14 of this chapter. The reference to § 874.14 was incorrect. The correct reference is § 875.14—Eligible lands and water subsequent to certification. In addition, we propose to reword two definitions (“eligible lands and water,” and “left or abandoned in either an unreclaimed or inadequately reclaimed condition”) using plain English.

Third, to eliminate some redundancy between two definitions, we combined two definitions from § 870.5 (“Indian reclamation program” and “State reclamation program”) into one definition in § 700.5 (“reclamation program”). The substance of the definition did not change.

Fourth, we moved the definition of “expended” from § 870.5 to § 700.5. In order to make the definition consistent with the entire chapter, we removed the existing limitation that it only applies to costs for reclamation.

Last, we are proposing to expand the definition of “Fund” in § 700.5. Previously, this term was defined slightly differently in both §§ 700.5 and 870.5. Under the proposed rule, the definition of this term in § 700.5 will be expanded to include additional information that was contained in § 870.5 (“Abandoned Mine Reclamation Fund or Fund”). We believe this will eliminate any confusion that may have resulted from having different terminology and definitions to describe the same source of money in two Parts of the regulations.

Part 724—Requirements for Permits and Permit Processing

Payment of Penalty (§ 724.18)

We propose to revise § 724.18(d) to update the references in that section to reflect our proposal to split existing § 870.15 into separate sections within part 870 and to update information on how to find the interest rate for late payments.

Part 773—Requirements for Permits and Permit Processing

Unanticipated Events or Conditions at Remining Sites (§ 773.13(a)(2))

On October 24, 1992, SMCRA was amended to include a new section 510(e) that created an exemption from the section 510(c) permit-block sanction for remining operations. At that time section 510(e) had a statutorily defined expiration date of September 30, 2004. Because the 2006 amendments removed the expiration date, we are revising § 773.13(a)(2) to reflect continued applicability of the provision.

Part 785—Requirements for Permits for Special Categories of Mining

Lands Eligible for Remining (§ 785.25(c))

On October 24, 1992, SMCRA was amended to include a new section 515(b)(20)(B) that provided incentives for certain eligible remining operations in the form of reduced revegetation responsibility periods (2 years in the East and 5 years in the West). Those remining incentives had a statutorily defined expiration date of September 30, 2004, under section 510(e) of SMCRA. Because the 2006 amendments removed the expiration date, we propose to remove paragraph (c) to reflect the continued applicability of this section.

Part 816—Permanent Program Performance Standards—Surface Mining Activities

Revegetation: Standards for Success (§ 816.116)

On October 24, 1992, SMCRA was amended to include a new section 515(b)(20)(B) that provided incentives for certain eligible remining operations in the form of reduced revegetation responsibility periods (2 years in the East and 5 years in the West). Those remining incentives had a statutorily defined expiration date of September 30, 2004, under section 510(e) of SMCRA. Because the 2006 amendments removed the expiration date, we propose to revise § 816.116(c)(2)(ii) and (c)(3)(ii) to reflect continued applicability of the provisions. We also reworded this section using plain English.

Part 817—Permanent Program Performance Standards—Underground Mining Activities

Revegetation: Standards for Success (§ 817.116)

On October 24, 1992, SMCRA was amended to include a new section 515(b)(20)(B) that provided incentives for certain eligible remining operations in the form of reduced revegetation responsibility periods (2 years in the East and 5 years in the West). Those remining incentives had a statutorily defined expiration date of September 30, 2004, under section 510(e) of SMCRA. Because the 2006 amendments removed the expiration date, we propose to revise § 817.116(c)(2)(ii) and (c)(3)(ii) to reflect continued applicability of the provisions. We also reworded this section using plain English.

Part 845—Civil Penalties

Use of Civil Penalties for Reclamation (§ 845.21)

We propose to revise § 845.21(b)(1) to reflect our proposal to move the definition of “emergency” from § 870.5 to § 700.5 of this chapter.

Part 846—Individual Civil Penalties

Payment of Penalty (§ 846.18)

We propose to revise § 846.18(d) to update the references in that section to reflect our proposal to split existing § 870.15 into separate sections within Part 870 and to update information on how to find the interest rate for late payments.

Part 870—Abandoned Mine Reclamation Fund—Fee Collection and Coal Production Reporting

Part 870 describes the requirements and process for you, the coal mine operator, to report coal production and to pay the AML reclamation fee.

Scope (§ 870.1)

We propose to add coal production reporting to this paragraph, because this is a major topic of this Part, and also to change the term “Abandoned Mine Reclamation Fund” to “Fund” to be consistent with our definition in proposed § 700.5.

Definitions (§ 870.5)

We propose to correct a defect in the Part 870 definitions section. The current § 870.1 specifies that the scope of Part 870 is limited to the procedures for the collection of reclamation fees, but existing § 870.5 provides that the definitions apply to Parts 870 through 888. In order to correct this issue, we propose to revise § 870.5 to state that the definitions apply only to Part 870 and to move definitions unrelated to Part 870 to the regulations where they are used. As such, we moved 17 existing definitions out of this section. In addition, one definition (“OSM”) was essentially a duplicate of a preexisting definition in § 700.5; thus, we deleted that term from § 870.5. Any substantive changes made to the definitions are described in the preamble related to the section where the definitions are moved.

As described in the preamble discussion regarding proposed revisions to § 700.5, six definitions from § 870.5 that apply to multiple Parts of the chapter were moved to § 700.5 (“eligible lands and water,” “emergency,” “extreme danger,” “left or abandoned in either an unreclaimed or inadequately reclaimed condition,” “project,” and “reclamation activity”). Two definitions from existing § 870.5 (“Indian reclamation program” and “State reclamation program”) were combined into one definition (“reclamation program”) and were moved to proposed § 700.5. In addition, because “Fund” or “Abandoned Mine Reclamation Fund” was defined in both existing §§ 700.5 and 870.5, we deleted the definition in existing § 870.5 and merged the two definitions into the one proposed at § 700.5.

Furthermore, we propose to move four definitions (“allocate,” “Indian Abandoned Mine Reclamation Fund or Indian Fund,” “reclamation plan,” and “State Abandoned Mine Reclamation Fund or State Fund”) to Part 872. One of these terms (“reclamation plan”) is defined again in §§ 874.5, 875.5, 879.5, 880.5, 884.5, 885.5, 886.5, and 887.5, but it is defined first and discussed in greater detail in the preamble discussion of § 872.5. We also propose to move one definition (“qualified hydrologic unit”) to proposed § 876.12(c), and one definition (“permanent facility”) to proposed § 879.11(a)(2). We propose to delete two definitions: one (“OSM”) which is already defined in existing § 700.5; and one (“agency”) which is no longer used because of plain English rewording.

Information Collection (§ 870.10)

We propose to reword this paragraph using plain English and to use the current format approved by the Office of Management and Budget (OMB). It describes OMB's approval of information collections in Part 870, our use of that information, and the estimated reporting burden associated with those collections.

Fee Rates (§ 870.13)

The 2006 amendments both extended the AML reclamation fee for 14 years and provided for a two-step reduction in the amount of the fee rate. 30 U.S.C. 1232(a). We propose revising § 870.13 to conform these regulations to the changes made by the 2006 amendments.

First, we propose revising paragraph (a) of § 870.13, which sets forth the reclamation fee rates per ton for coal produced by surface, underground, and lignite mining that were in effect from August 3, 1977, until September 30, 2007. We also propose to indicate that the rates expired on September 30, 2007, rather than September 30, 2004, as formerly provided in the regulations. We propose to retain these expired rates for historical purposes and for use in future audits of production from the years in which those rates applied.

We propose to delete the existing paragraph (b), which set out the procedure for us to set fees and the first fee rate in the event that the AML reclamation fee was not extended. As mentioned in the section of this preamble entitled “Background on the Reclamation Fee and the Abandoned Mine Land Program”, Congress extended the fee before it expired. Thus, paragraph (b) never came into effect, and the fee extension in the 2006 amendments has made it obsolete.

In its place, we propose to add a new paragraph (b), with a table that sets out the fee rates established by the 2006 amendments for coal produced in the period from October 1, 2007, through September 30, 2012. The new fee rates per ton for surface and underground coal and lignite are each reduced by 10% from the previous rates. Similarly, we propose a new paragraph (c) with a table showing the fee rates reduced by an additional 10% of the original rates for coal produced in the period from October 1, 2012, through September 30, 2021.

SMCRA and the 2006 amendments specifically prescribe fee rates for surface, underground, and lignite coal mining. As in the previous regulation, we propose to show rates for in situ mining, which means gasification of the coal at the mine. We continue to consider in situ mining to be covered by SMCRA because it is included in the definition of “surface coal mining operations” in section 701(28) of SMCRA and is therefore subject to the AML reclamation fee. As we have done in the past, when developing these proposed regulations, we classified in situ mining as underground mining (
see
§ 785.22 and Part 828). In these proposed regulations, we continue to

include a separate paragraph for the fee rates for in situ mining in order to clarify that the fees are set at the same rate as the fees for underground mining.

Determination of Percentage-Based Fees (§ 870.14)

We propose rewording this paragraph using plain English. We also propose updating the reference in paragraph (b) to conform this provision to our proposed revisions of existing § 870.15.

Reclamation Fee Payment (§ 870.15)

We propose to break out the information from the existing § 870.15 into four separate sections to better organize this varied material and make it easier to find and understand. Paragraph (a) was reworded using plain English. We divided existing paragraph (b) into 3 new paragraphs (b), (c), and (d) within proposed § 870.15. This division separates these related, but distinct, topics for easier understanding. We also reworded these provisions using plain English. The remaining paragraphs (existing paragraphs 870.15(c) through (g)) were moved: existing paragraphs (c), (f), and (g) related to late payments were moved to proposed § 870.21; existing paragraph (d) related to acceptable payment methods was moved to proposed § 870.16; existing paragraph (e) related to the consequences of noncompliance was moved to proposed § 870.23.

Acceptable Payment Methods (§ 870.16)

We propose to move the contents of existing § 870.16 on production records to new § 870.22 to better organize related topics. In turn, we propose to move the contents of existing § 870.15(d) to proposed § 870.16, and reword those provisions using plain English. The proposed reorganization will keep information related to payment methods immediately after the fee payment information contained in § 870.15.

Filing the OSM-1 Form (§ 870.17)

This section proposes to expand on the existing § 870.17, which covers the electronic filing of the coal reclamation fee report, known as the OSM-1 Form. We kept existing § 870.17 and made it proposed § 870.17(a). However, we added a paragraph (b) on filing a paper OSM-1 Form. Now, under the proposed rule, both options for filing the OSM-1 Form are listed together in the same section.

In addition, section 402(c) of SMCRA requires that “all operators of coal mine operations shall submit a statement of the amount of coal produced during the calendar quarter, the method of coal removal and the type of coal, the accuracy of which shall be sworn to by the operator and notarized.” 30 U.S.C. 1232(c). Although SMCRA states that your OSM-1 Form is to be notarized, we believe that 28 U.S.C. 1746 allows us to accept the OSM-1 Form along with a statement made under penalty of perjury that the information contained in the form is true and correct. Section 1746 provides that any matter required to be sworn may with like force be established by an unsworn written declaration consistent with the statute. Currently, if you file your report electronically on our Web site, we allow you to choose whether to keep a paper notarized copy or to make an unsworn statement using acceptable certification language that the system provides.
See also
66 FR 28634. We are adding a similar unsworn statement option in paragraph (b) to reduce your burden if you choose to file your OSM-1 Form on paper.

General Rules for Calculating Excess Moisture (§ 870.18)

The only change we propose to make in this section is to update a reference in paragraph (b) to reflect our proposed division of existing § 870.15 into four sections. We are not considering any substantive changes to this section. We only intend to make those changes needed to correct any cross-references to other sections that may be altered by this rulemaking.

Late Payments (§ 870.21)

We propose to move this information from the existing paragraphs § 870.15(c), (f), and (g) to new § 870.21 and reword these provisions using plain English. This reorganization will make proposed § 870.15 more focused on the payment of the reclamation fee while grouping the specific information on the interest and penalties that we may charge on delinquent reclamation fees into this new section.

Maintaining Required Production Records (§ 870.22)

We propose to move the information in the existing § 870.16 to this new section for better organization because it allows us to group the payment and reporting sections together. We also propose to reword this section using plain English.

Consequences of Noncompliance (§ 870.23)

We propose to move existing § 870.15(e)(1)-(5) to this new section. We believe this section should be separated from the late payments section because it also applies to the failure to comply with the record maintenance provisions. In addition, we reworded this section using plain English.

Part 872—Moneys Available to Eligible States and Indian Tribes

Our proposed revision of Part 872 describes the moneys that make up the Fund and other sources of money, including otherwise unappropriated funds in the U.S. Treasury as specified by the 2006 amendments, that are available to you, the eligible States and Indian Tribes with approved reclamation programs. This part also describes how we will convey these funds to you and what you may use them for.

We are proposing regulations to address the changes to SMCRA that the 2006 amendments made. In addition, we are proposing to divide, remove, and renumber parts of existing §§ 872.11(a) through 872.11(c) and § 872.12, change headings, add new sections and headings as appropriate, and more clearly describe the different types of funds available under this Part. We propose these additional changes to make the regulations easier to read and understand. Each proposed change is described below in more detail.

What does this Part do? (§ 872.1)

In this section, we explain that the purpose of Part 872 is to set forth the responsibilities for administering reclamation programs and the procedures for managing funds used to finance these programs. We propose to change the section heading to “What does this Part do?”, to reword the section using plain English, and to remove a reference to the Fund, instead referring more generically to “funds.” We believe removing the reference to the Fund recognizes that the 2006 amendments provide funds to you both from the Fund and from otherwise unappropriated funds of the U.S. Treasury. Throughout this Part, the terms “money” and “moneys” are interchangeable with the terms “fund” or “funds,” but not with the term “Fund,” as defined in proposed § 700.5.

Definitions (§ 872.5)

We propose adding § 872.5 to contain definitions pertinent to Part 872. This proposed section contains four definitions (“allocate,” “Indian Abandoned Mine Reclamation Fund or Indian Fund,” “reclamation plan,” and “State Abandoned Mine Reclamation Fund or State Fund”) moved from existing § 870.5 and two new definitions (“award” and “distribute”). As described below, we also propose to

revise the existing definitions that were moved from § 870.5 and to use plain English for these definitions.

First, we propose to revise the definitions of “Indian Abandoned Mine Reclamation Fund or Indian Fund” and “State Abandoned Mine Reclamation Fund or State Fund” to include references to Parts 885 and 886. Those Parts address grants for certified and uncertified States and Indian tribes.

Second, we propose to revise the definition of “reclamation plan” to refer to States and Indian tribes and to have the same meaning as “State reclamation plan.” As proposed, a “reclamation plan or State reclamation plan” means “a plan that a State or Indian tribe submitted and that we approved under section 405 of SMCRA and Part 884 of this subchapter.” Our definition makes “reclamation plan” and “State reclamation plan” interchangeable wherever those terms appear in this subchapter, recognizing that certain Parts still use “State reclamation plan.” We included a reference to section 405 of SMCRA to be consistent with its use of the term “State reclamation plan” as well. 30 U.S.C. 1235. Our proposed definition also is consistent with section 405(k) of SMCRA, which considers Indian tribes that have eligible lands under section 404 the same as States for the purposes of Title IV, except for the purposes of section 405(c). 30 U.S.C. 1235(k).

Next, we propose two changes to the definition of “allocate.” The revised definition now states that “allocate” means “to identify moneys in our records at the time they are received by the Fund.” We also added a statement to clarify that the allocation process identifies the type of funds or the specific State or Indian tribal share.

The definition of “allocate” is distinguishable from the new definitions of “distribute” and “award” that we propose to add. We define “distribute” as meaning “to annually assign funds to a specific State or Indian tribe. After distribution, funds are available for award in a grant to that specific State or Indian tribe.” We define “award” as meaning “to approve our grant agreement authorizing you to draw down and expend program funds.”

We use the terms “allocate,” “distribute,” and “award” throughout Part 872 to describe the process that we follow to make funds available to States and Indian tribes. Our accounting process first
allocates
funds to a particular share (State and Tribal shares or historic coal funds, for example) as soon as we receive the collected fees. Next, we
distribute
funds annually after the end of each Federal FY to specific States and Indian tribes according to the statutory provisions and the regulations governing those funds (for example, we will follow proposed § 872.15 to distribute State share funds). After the funds are distributed, we
award
funds to States and Indian tribes in grants following the procedures of proposed Part 885 for certified States and Indian tribes and Part 886 for uncertified States and Indian tribes if and when they apply for such grants.

Information Collection (§ 872.10)

We propose to update this section and reword it using plain English. It describes the OMB's approval of information collections in Part 872, our use of that information, and the estimated reporting burden associated with those collections.

Where do moneys in the Fund come from? (§ 872.11)

This proposed section describes the funds we collect, recover, and otherwise receive that are the sources of revenue to the Fund. Here we propose to change the section heading to “Where do moneys in the Fund come from?” and to renumber existing §§ 872.11(a) through (a)(6) as §§ 872.11 through 872.11(f). We also reworded this section in plain English.

In addition, we propose to remove language from existing § 872.11(a)(6) (now renumbered as proposed § 872.11(f)) that makes interest earned after September 30, 1992, available for possible future transfer to the UMWA CBF under section 402(h) of SMCRA. The 2006 amendments to SMCRA added new provisions related to our payments to the UMWA health care plans. However, this rulemaking does not address those changes.

In addition, we propose to revise and reorganize the information in existing §§ 872.11(b), including paragraphs (b)(1) through (b)(8), into various other sections. Existing § 872.11(b)(1) is included in proposed §§ 872.14 and 872.15 on State share funds and § 886.20 on unused funds. Similarly, existing § 872.11(b)(2) is included in proposed §§ 872.17 and 872.18 on Tribal share funds and § 886.20 on unused funds. Existing § 872.11(b)(3) related to the RAMP program is moved to proposed § 872.20. Existing § 872.11(b)(4) is included in proposed §§ 872.21 and 872.22 on historic coal funds. Existing § 872.11(b)(5), as well as §§ 872.11(b)(7) and (b)(8), are moved to §§ 872.24 and 872.25 on Federal expense funds. Existing § 872.11(b)(6) is included in proposed §§ 872.26 and 872.27 on minimum program makeup funds. We propose to move existing § 872.11(c) to § 872.12(c). We propose to revise all these provisions to be consistent with the 2006 amendments and to reword them using plain English.

Where do moneys distributed from the Fund and other sources go? (§ 872.12)

We propose to change the heading of existing § 872.12 to “Where do moneys distributed from the Fund and other sources go?”, and to reword the section using plain English. We also propose to add paragraph § 872.12(c) for information moved from existing § 872.11(c) and to make a conforming change. The conforming change involves the requirement in existing § 872.11(c) that States and Indian tribes use money deposited in their State or Indian Abandoned Mine Reclamation Funds to carry out their reclamation plans approved under Part 884 and projects approved under Part 888. On February 22, 1995, we removed Part 888, which related to special Indian land procedures, and replaced it with § 886.25, but did not change the cross-reference in existing § 872.11(c). 60 FR 9974. In § 872.12(c), we now propose to replace that cross-reference with a reference to proposed § 886.27, which is the proposed renumbering of existing § 886.25.

What money does OSM distribute each year? (§ 872.13)

We propose to add new § 872.13 to describe how we distribute moneys each year to States and Indian tribes under SMCRA, as revised by the 2006 amendments. We address each type of funding elsewhere in this proposed rule in greater detail.

Paragraph (a) lists the funds that we must distribute because they are not subject to prior Congressional appropriation. These distributions include State share (§ 872.14), Tribal share (§ 872.17), historic coal (§ 872.21), minimum program make up (§ 872.26), prior balance replacement (§ 872.29), and certified in lieu funds (§ 872.32).

Paragraph (b) explains we use fee collections for coal produced in the previous Federal FY on a net cash basis to calculate the annual distribution. In other words, collections from the most recent FY include any adjustments to fees collected in previous years. In order to meet our customer service obligation, we must quickly determine how much money we collected each FY so that we can complete the mandatory distribution of AML funds to the States and Indian tribes as early in the FY as possible. When we make adjustments to the fees collected in an earlier FY, we must add or subtract the changes from

collections for the year in which we actually receive them because we cannot go back and revise the prior year fee collection amounts and distributions that we have already made to the States and Indian tribes.

Paragraph (c) briefly states that we distribute Congressionally-appropriated Federal expense funds when the appropriation becomes available.

Last, paragraph (d) states that you may apply for funds any time after we distribute them. Certified States and Indian tribes will apply for grants using the procedures of Part 885 and uncertified States and Indian tribes will use the procedures of Part 886.

What are State share funds? (§ 872.14)

We are proposing to remove and replace the existing §§ 872.11(b) and 872.11(b)(1) with §§ 872.14 and 872.15. The new sections include language consistent with the 2006 amendments and are worded in plain English. Proposed § 872.14 replaces the first and second sentences of existing § 872.11(b)(1), which included provisions for what commonly have been called “State share” funds and that are provided for under section 402(g)(1)(A) of SMCRA. Specifically, this proposed provision explains that State share funds are 50 percent of the reclamation fees collected on coal mined in your State (excluding Indian lands) and allocated to you under section 402(g)(1)(A) of SMCRA for coal produced in the previous fiscal year.

How does OSM distribute and award State share funds? (§ 872.15)

Proposed § 872.15 explains how we distribute and award State share funds to you if you are eligible to receive them. Section 872.15(a)(1) replaces the third sentence of existing § 872(b)(1) and states that to be eligible to receive State share funds you must have and maintain an approved reclamation plan. Section 872.15(a)(2) adds that to be eligible you cannot be certified under section 411(a) of SMCRA because under section 401(f)(3)(B) of SMCRA, as revised by the 2006 amendments, certified States are ineligible to receive moneys from their State share of the Fund as of October 1, 2007. 30 U.S.C. 1231(f)(3)(B).

We did not distribute State share funds to certified States in the 2008 distributions because section 401(f)(3)(B) of SMCRA, as revised by the 2006 amendments, prohibits us from distributing any moneys from the Fund to certified States beginning on October 1, 2007. So, consistent with SMCRA, proposed § 872.13(a)(1) prohibits certified States from receiving any State share funds from the Fund after September 30, 2007.

In proposed § 872.15(b), we describe how we distribute and award State share funds if you meet the eligibility criteria of paragraph (a). In paragraph (b)(1), we include a table explaining the distributions, which will be phased-in under 401(d)(3) and (f) of SMCRA, as amended. 30 U.S.C. 1231(d)(3) and (f). Although section 402(g)(1) of SMCRA generally requires us, acting on behalf of the Secretary, to distribute annually to an uncertified State 50 percent of the reclamation fees we collect in that State for the previous FY without prior Congressional appropriation, section 401(f)(5) of SMCRA, as added by the 2006 amendments, requires us to phase-in the mandatory distribution of these funds. 30 U.S.C. 1231(f)(5)(B). As a result, for FY 2008 and FY 2009, which begin on October 1, 2007, and October 1, 2008, respectively, we will distribute to each uncertified State only 50 percent of the State share allocated to it. Because the State share is 50 percent of the reclamation fees collected on production in that State, for FY 2008 and FY 2009, uncertified States will receive only 25 percent of the reclamation fees collected on coal produced in their State (a 50 percent phase-in of the 50 percent in reclamation fees for the State share). Likewise, State shares that we distribute in FY 2010 and FY 2011, which begin October 1, 2009, and October 1, 2010, respectively, will be 75 percent of the 50 percent share, which is 37.5 percent of the reclamation fees collected on coal produced in that State. We will distribute to uncertified States their full 50 percent State share from the Fund each year beginning with FY 2012, which starts on October 1, 2011, and lasting through FY 2022, which ends on September 30, 2022. In FY 2023, we expect to distribute to uncertified States all moneys remaining in their State share of the Fund.

Proposed § 872.15(b)(2) explains that we will continue to award funds under this paragraph in grants in accordance with Part 886. Awarding State share funds in grants is consistent with section 402(g)(1)(C) of SMCRA. 30 U.S.C. 1232(g)(1)(C). In addition, we note that many States were awarded State share funds in prior year grants, before the 2006 amendments. Those funds would continue to be subject to the provisions of Part 886.

What may States use State share funds for? (§ 872.16)

Proposed § 872.16 describes what you, the uncertified State, may use your State share grant funds for. You may only use them for the following purposes: (1) To reclaim coal lands and waters under § 874.12; (2) to restore water supplies under § 874.14; (3) to reclaim noncoal lands and waters under § 875.12 as requested by the Governor under section 409(c) of SMCRA; (4) to deposit into an acid mine drainage abatement and treatment fund under Part 876; and (5) to acquire land under § 879.11.

We note that the Fund consists mostly of reclamation fees we collect on each ton of coal produced. Although we have been collecting those fees under Title IV of SMCRA for almost 30 years, many abandoned coal problems remain to be addressed nationwide. The 2006 amendments emphasize the need to abate the country's remaining abandoned coal mine problems.
See, e.g.
, 30 U.S.C. 1232(g)(2) and 1240a(h)(1)(D)(ii). We believe that under the 2006 amendments, the Fund is to be used primarily to abate coal problems. We intend proposed § 872.16 to emphasize abandoned coal mine reclamation while continuing to allow uncertified States to abate Priority 1 noncoal hazards using moneys from the Fund in accordance with sections 402(g)(1)(A)(ii) and (C), 402(g)(6), and 409(b) and (c) of SMCRA.

What are Tribal share funds? (§ 872.17)

We are proposing to revise the first three sentences of existing § 872.11(b)(2) and divide it into §§ 872.17 and 872.18. Existing § 872.11(b)(2) includes provisions for what commonly have been called “Tribal share” funds that are provided by section 402(g)(1)(B) of SMCRA. The new sections include language to address the 2006 amendments and are worded in plain English.

In proposed § 872.17 we explain that “Tribal share funds” are moneys we distribute to you each year from your Tribal share of the Fund. Your Tribal share of the Fund is 50 percent of the reclamation fees we collect and allocate under 402(g)(1)(A) of SMCRA to you, the Indian tribe(s), in the Fund for coal produced in the previous fiscal year from the Indian lands in which you have an interest.

How does OSM distribute and award Tribal share funds? (§ 872.18)

This section largely is a duplicate of proposed § 872.15 except that it applies to Indian tribes and the Tribal share funds. So, the explanations in the preamble for § 872.15 are largely the same for distributing and awarding Tribal share funds under this section (including the phase-in provisions), and we will not repeat them. However, we

will discuss a few distinctions involving the distribution of Tribal share funds to Indian tribes.

As of October 1, 2007, under amended section 401(f)(3)(B) of SMCRA, States that are certified under section 411(a) are ineligible to receive State share funds. 30 U.S.C. 1231(f)(3)(B). This exclusion does not specifically say whether it applies to Indian tribes. However, to be consistent, we propose in § 872.18 to exclude all certified Indian tribes from receiving Tribal share funds after October 1, 2007.

At this time, only the Crow, Hopi, and Navajo Indian tribes have approved reclamation programs and have Tribal share funds. All three of those Indian tribes are certified under section 411(a) of SMCRA. Section 405(k) of SMCRA generally requires us to consider Indian tribes “as a `State' for the purposes of this title * * *.” 30 U.S.C. 1235(k). So, because section 405(k) considers the Crow, Hopi, and Navajo Indian tribes as States for the purposes of Title IV and because they are certified under section 411(a), we must apply section 401(f)(3)(B) to those three Indian tribes. The Hopi and Navajo Indian tribes were certified before October 1, 2007, and they cannot receive Tribal share funds as of that date. 30 U.S.C. 1231(f)(3)(B), 1235(k). Therefore, we did not include Tribal share funds in their 2008 distributions. The Crow Indian tribe was uncertified as of December 17, 2007, which was when we made the 2008 AML distribution, so it received Tribal share funds. Since then, however, the Crow Indian tribe certified under section 411(a)(1) of SMCRA (73 FR 17247, April 1, 2008), so it cannot receive any additional Tribal share funds. Presently, there are no uncertified Indian tribes. However, at some future date, it is possible an uncertified Indian tribe could qualify for Tribal share funds.

What may Indian tribes use Tribal share funds for? (§ 872.19)

Proposed § 872.19 describes what you, the uncertified Indian tribe, may use your Tribal share grant funds for. You may only use Tribal share funds for the following purposes: (1) To reclaim coal lands and waters under § 874.12; (2) to restore water supplies under § 874.14; (3) to reclaim noncoal lands and waters under § 875.12 as requested by the governing body of the Indian tribe according to section 409(c) of SMCRA; (4) to deposit into an acid mine drainage abatement and treatment fund under Part 876; and (5) to acquire land under § 879.11. Our explanation in the preamble for § 872.16, which allows States to use State share funds for noncoal reclamation, also applies to Indian tribes' use of Tribal share funds. Therefore, we will not repeat it here.

What will OSM do with unappropriated AML funds currently allocated to the Rural Abandoned Mine Program? (§ 872.20)

We are proposing to renumber existing § 872.11(b)(3) as § 872.20 under the new heading “What will OSM do with unappropriated AML funds currently allocated to the Rural Abandoned Mine Program?” and to remove the existing provisions for transferring money from the Fund to the Rural Abandoned Mine Program (RAMP). The 2006 amendments removed the statutory provisions that provided funding for RAMP and created section 402(h)(4)(B) of SMCRA. That section requires us to take any funds that were allocated to RAMP but that were not appropriated before December 20, 2006, and set them aside for possible transfer to the UMWA health care plans. Proposed § 872.20 is consistent with this provision. Note that the only funds currently allocated to RAMP and affected by this section are those we collected and allocated between October 1, 2005, and December 20, 2006, because the RAMP balance on September 30, 2005, was reallocated to the Federal expense funds (section 402(g)(3) of SMCRA) by the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2006, (Pub. L. 109-54, 119 Stat. 513 (2005)).

What are historic coal funds? (§ 872.21)

We are proposing to remove existing § 872.11(b)(4) and its subsections (b)(4)(i) and (ii) and to replace them with §§ 872.21 and 872.22. These new sections describe what commonly are known as “historic coal funds.” These sections address the 2006 amendments for historic coal funds and are worded in plain English.

Proposed § 872.21 describes historic coal funds and reflects the requirements of sections 401(d)(3), 401(f)(3)(A)(i), 401(f)(5)(B), 402(g)(5), 411(h)(1)(A)(ii), and 411(h)(4) of SMCRA, as revised by the 2006 amendments. 30 U.S.C. 1231(d)(3), 1231(f)(3)(A)(i), 1231(f)(5)(B), 1232(g)(5), 1240a(h)(1)(A)(ii), and 1240a(h)(4). Historic coal funds are part of the Fund. They are provided for under section 402(g)(5) of SMCRA based on the amount of coal produced before August 3, 1977, in your State or on Indian lands in which you have an interest. Section 401(d)(3) mandates that we distribute historic coal funds annually and that the distribution of historic coal funds is not subject to prior Congressional appropriation. To determine the amount of the historic coal funds, section 402(g)(5)(A) now requires us to allocate 60 percent of the amount of money left in the Fund after we allocate the 50 percent of reclamation fees to the State or Tribal shares under section 402(g)(1). This is an increase from the pre-2006 amendments amount of historic coal funds, which only allowed us to allocate 40 percent of the amount of money left in the Fund after the State or Tribal share funds were allocated. We distribute the historic coal funds for each FY to supplement grants awarded to uncertified States and Indian tribes that have not completed reclamation of their Priority 1 and 2 coal problems as defined by section 403(a).

We are proposing to word § 872.21(a) to more clearly describe the source and percentages of funds that will make up the historic coal funds. Only 50 percent of the reclamation fees collected annually is left in the Fund after the State or Tribal share funds are allocated. Under section 402(g)(5)(A), 60 percent of that remaining 50 percent (for a total of 30 percent), of reclamation fees is used to supplement grants. That section also provides for using 60 percent of all other revenue to the Fund for the same purpose. So, proposed § 872.21(a) states that, each year, 30 percent of AML fee collections for coal produced in the previous FY plus 60 percent of all other revenue to the Fund become historic coal funds.

Proposed § 872.21(b) describes other moneys included in historic coal funds as a result of the reallocations we must make during our annual fund distribution under sections 401(f)(3)(A)(i), 411(h)(1)(A)(ii), and 411(h)(4) of SMCRA. 30 U.S.C. 1231(f)(3)(A)(i), 1240a(h)(1)(A)(ii), and 1240a(h)(4). Paragraph (b)(1) specifies that moneys we reallocate to historic coal funds based on the prior balance replacement funds, which are distributed under § 872.29, will be available for grants beginning with Federal FY 2023. Paragraph (b)(2) states that moneys we reallocate to historic coal funds based on certified in lieu funds we distribute under § 872.32 will be available for grants in FY 2009 through FY 2022. 30 U.S.C. 1231(f)(3)(A)(i). As we explained in our discussions of §§ 872.15 and 872.18, after September 30, 2007, certified States and Indian tribes are no longer eligible to receive their State or Tribal share funds, which would have been 50 percent of the reclamation fees paid for coal mined on lands in their State or on Indian lands within their jurisdiction. 30 U.S.C. 1231(f)(3)(B). In addition,

section 402(g)(5)(A) prohibits certified States and Indian tribes from receiving historic coal funds. 30 U.S.C. 1232(g)(5)(A).

Although the certified States and Indian tribes no longer receive a portion of the reclamation fees paid for coal mined on their lands, we still collect reclamation fees from coal mining operators in certified States and on Indian lands as authorized by section 402(a) of SMCRA. Section 411(h)(4) of SMCRA, as revised by the 2006 amendments, directs us to reallocate to the historic coal funds money that would formerly have constituted a certified State's or Indian tribe's State or Tribal share, i.e., 50 percent of the amount of reclamation fees that coal mining operations in certified States and on Indian lands paid for coal produced in each FY. 30 U.S.C. 1240a(h)(4). Sections 411(h)(1)(A)(ii) and 411(h)(4) also require us to reallocate certified States' or Indian tribes' prior unappropriated balance of State or Tribal share funds to the historic coal funds. 30 U.S.C. 1240a(h)(4).

How does OSM distribute and award historic coal funds? (§ 872.22)

We propose to add § 872.22 to describe how we distribute and award historic coal funds. We distribute historic coal funds by determining which States and Indian tribes are eligible for historic coal funds. We also determine the total amount of funds available from fee collections for coal produced in the previous FY and from reallocations based on Treasury payments. Then we divide the available total between the eligible States and Indian tribes according to each State's or Indian tribe's percentage of the total tons of coal produced prior to August 3, 1977, from all eligible States and Indian tribal lands. We also propose to remove existing § 872.11(b)(4)(i) and (ii) and to include similar provisions at §§ 872.22(d) and (e) as explained below.

Section 872.22(a) includes three criteria you must meet to be eligible to receive historic coal funds. First, in paragraph (a)(1), you must have and maintain an approved reclamation plan under Part 884 to be eligible to receive historic coal funds. Second, you cannot be certified under section 411(a) of SMCRA. Third, because section 402(g)(5)(A) of SMCRA states that you can receive historic coal funds only if you have unfunded Priority 1 and 2 coal problems under section 403(a), to meet the criterion of paragraph (a)(2) you cannot have reclaimed all your Priority 1 and 2 coal problems. Thus, if you are an uncertified State or Indian tribe that has no remaining unfunded Priority 1 or 2 problems, you cannot receive historic coal funds.

Proposed § 872.22(b) says that once the eligibility criteria listed in § 872.22(a)(1) and (2) are met, we calculate the historic coal funds you receive using a formula based on the amount of coal historically produced before August 3, 1977, in your State or from the Indian lands concerned.

The table in proposed § 872.22(c) describes how we distribute historic coal funds. Section 401(f)(5)(B) of SMCRA requires that we phase in these distributions over four years beginning October 1, 2007. For the years beginning October 1, 2011, and continuing through September 30, 2022, we will distribute the full amount we calculated using the formula mentioned in paragraph (b). For the years beginning October 1, 2022, and continuing thereafter, we will distribute to you the amount needed to reclaim your remaining Priority 1 and 2 coal problems to the extent the funds are available.

Section 401(f)(2)(B) of SMCRA requires us to distribute the same overall amount from the Fund in FY 2023 and thereafter that we distribute in FY 2022, if the money is available. 30 U.S.C. 1231(f)(2)(B). Most of the moneys remaining in the Fund by that time will be historic coal funds. These moneys will be available for distribution in FY 2023 and later years because of the reallocation of prior balance replacement fund amounts to historic coal funds under sections 401(f)(3)(A)(i), 411(h)(1)(A)(ii) and 411(h)(4) of SMCRA. 30 U.S.C. 1231(f)(3)(A)(i), 1240a(h)(1)(A)(ii), and 411(h)(4). We will continue to use the formula described in paragraph (b) of this section to distribute historic coal funds to you in FY 2023 and afterward.

Proposed § 872.22(d) states that we will only distribute the historic coal funds you need to reclaim your unfunded Priority 1 or 2 coal problems. This paragraph includes the provisions that we propose to move from existing § 872.11(b)(4)(i) and (ii). It addresses the situation where the cost to reclaim all remaining Priority 1 and 2 coal problems in an uncertified State or Indian tribe is more than the amount that the State or Indian tribe receives for its State or Tribal share alone, but is less than the amount that the State or Indian tribe receives for its State or Tribal share, unused funds from prior allocations, and historic coal funds combined. In this situation, we will reduce the amount of historic coal funds the State or Indian tribe receives to the amount it needs to fund reclamation of its remaining Priority 1 or 2 coal problems.

Under proposed § 872.22(e), we will continue the long-standing practice of awarding historic coal funds to you in grants following the provisions of Part 886.

What may you use historic coal funds for? (§ 872.23)

Proposed § 872.23 describes how you may use historic coal funds. Consistent with sections 402(g)(5), 402(g)(6)(A), and 409(b) of SMCRA, this section allows you to use historic coal funds for the following purposes only: (1) Abandoned coal mine reclamation under § 874.12; (2) water supply restoration under § 874.14; (3) abating noncoal problems prior to certification under § 875.12 based on requests made under section 409(c) of SMCRA; (4) for deposit into an acid mine drainage abatement and treatment fund under Part 876; and (5) land acquisition under § 879.11.

The use of historic coal funds for some noncoal reclamation is clearly authorized in section 409(b) of SMCRA. That section, which was not modified by the 2006 amendments, states that “[f]unds available for use in carrying out the purpose of this section [the reclamation of Priority 1 noncoal sites] shall be limited to those funds which must be allocated to the respective States or Indian tribes under the provisions of paragraphs (1) and (5) of section 402(g).” 30 U.S.C. 1239(b). Because the historic coal funds are allocated to the States and Indian tribes under section 402(g)(5), uncertified States and Indian tribes are able to use historic coal funds provided under section 402(g)(5) to abate Priority 1 noncoal hazards based on requests made under section 409(c). We believe that amended section 402(g)(2), which requires “strict compliance” by uncertified States and Indian tribes with the reclamation of coal problems, does not impact the authorization in section 409(b) that allows historic coal funds to be expended on noncoal reclamation. Although we request comment on this issue, proposed § 872.23(a)(3) explicitly allows uncertified States and Indian tribes to continue using historic coal funds for noncoal reclamation consistent with section 409(b) of SMCRA.

In addition to the use of historic coal funds for coal reclamation, water supply restoration, and noncoal reclamation, paragraph (a)(4) specifies, consistent with section 402(g)(6) of SMCRA, as revised by the 2006 amendments, that you may use historic coal funds for deposit into an acid mine drainage

abatement and treatment fund under Part 876.

What are Federal expense funds? (§ 872.24)

We propose to divide existing § 872.11(b)(5) into two sections and to renumber those sections as §§ 872.24 and 872.25. These sections address what previously were known as “Federal share funds” under section 402(g)(3) of SMCRA. We call them “Federal expense” funds in this proposed rule. The new sections address the 2006 amendments and are worded in plain English.

Proposed § 872.24 replaces the introductory paragraph at existing § 872.11(b)(5) and identifies what Federal expense funds are. Federal expense funds are moneys in the Fund that are not allocated as State share, Tribal share, historic coal, or minimum program make up funds. Under section 401(d)(1) of SMCRA, we may use Federal expense funds only if Congress appropriates them.

What may OSM use Federal expense funds for? (§ 872.25)

Proposed § 872.25 describes how we may use Federal expense funds. Paragraphs (a) through (a)(5) list allowed uses in detail. For example, we may use these funds to perform nonemergency and other projects for States and Indian tribes that do not have approved reclamation programs and for the Secretary's administration of Title IV of SMCRA and subchapter R of the Federal regulations. Section 872.25 replaces existing §§ 872.11(b)(5)(i) through (v) as well as §§ 872.11(b)(7) and 872.11(b)(8) and is worded in plain English.

We propose to renumber existing § 872.11(b)(7) as § 872.25(b) and to reword it in plain English to describe the Federal expense distributions. This paragraph reflects the provision in the last sentence of section 402(g)(5)(A) of SMCRA, which states “[f]unds made available under paragraph (3) or (4) of this subsection for any State or Indian tribe shall not be deducted against any allocation of funds to the State or Indian tribe under paragraph (1) or under this paragraph.” 30 U.S.C. 1232(g)(5)(A). This paragraph clarifies that we are prohibited from deducting the amount of funds we allocate or distribute as Federal expenses, described at § 872.25, from your State or Tribal share funds and historic coal funds. Proposed § 872.25(b) also would remove a reference in existing § 872.11(b)(7) to minimum program make up funds provided under section 402(g)(8) of SMCRA because, under section 402(g)(3)(E) of SMCRA, as revised by the 2006 amendments, minimum program make up funds are expressly included in Federal expenses so the additional reference is no longer necessary. 30 U.S.C. 1232 (g)(3)(E).

In addition, we are proposing to renumber existing § 872.11(b)(8) as § 872.25(c) and reword it using plain English. This paragraph is consistent with section 402(g)(3)(C) of SMCRA. That section allows us to use Federal expense funds to address Priority 1, 2, and 3 coal problems that meet the eligibility requirements of section 404 in States and on Indian lands where the State or Indian tribe does not have an abandoned mine reclamation program approved under section 405. 30 U.S.C. 1232(g)(3)(C).

What are minimum program make up funds? (§ 872.26)

Our proposed changes to existing § 872.11(b)(6) include removing it and replacing it with §§ 872.26 and 872.27 and wording them in plain English. These sections are consistent with the provisions of section 402(g)(8) of SMCRA, as revised by the 2006 amendments, for what commonly has been called “minimum program funding” or the “minimum program make-up.”

Section 872.26 addresses what we call “minimum program make up funds” in this rule. Paragraph (a) describes these funds as additional moneys that we distribute to eligible States and Indian tribes each year to make up the difference between their total distribution of other funds and $3 million. It also identifies the source of these moneys as the non-appropriated Federal expense funds. Section 402(g)(3)(E) of SMCRA requires us to use Federal expense funds provided under section 402(g)(3) for this mandatory distribution. 30 U.S.C. 1232(g)(3)(E). However, unlike other Federal expense funds provided under section 402(g)(3) and § 872.24 of the regulations, these funds are not subject to prior Congressional appropriation. 30 U.S.C. 1231(d)(1).

Proposed §§ 872.26(b) through (b)(4) describe four criteria you must meet to be eligible to receive minimum program make up funds. First, you must have and maintain an approved reclamation plan under Part 884. Next, you cannot be certified under section 411(a) of SMCRA. Third, the total amount of State or Tribal share, historic coal, and prior balance replacement funds you receive annually must be less than $3 million. Last, you must have unfunded Priority 1 and 2 coal problems greater than your total annual amount of State or Tribal share, historic coal, and prior balance replacement funds.

Consistent with section 402(g)(8)(B) of SMCRA, proposed § 872.26(c) makes the same amount of funding available to the States of Missouri and Tennessee to reclaim Priority 1 and 2 coal problems provided they have abandoned mine reclamation plans under Part 884.

How does OSM distribute and award minimum program make up funds? (§ 872.27)

Proposed § 872.27 describes how we distribute and award minimum program make up funds. Paragraph (a) provides that we distribute these funds to you if you meet the eligibility requirements of § 872.26(b). In paragraph (a)(1), we describe how we calculate the amount of the Federal expense funds, if any, we use to supplement the other funds you receive under Title IV of SMCRA. We add up the annual distributions you receive for your prior balance replacement funding under § 872.29, your State or Tribal share moneys under §§ 872.14 or 872.17, and your historic coal funds under § 872.21. If your distribution of these funds is equal to or greater than $3 million annually, you will not receive any minimum program funding under this section. If your distribution of these funds is less than $3 million annually, we add Federal expense funds to increase your total distribution to $3 million.

Although we use Federal expense funds to ensure that all uncertified States and Indian tribes receive at least $3 million in their distributions, we are required to reduce the amount of these minimum program make up distributions for the first four years to comply with the phase-in provision of section 401(f)(5)(B) of SMCRA, as revised by the 2006 amendments. 30 U.S.C. 1231(f)(5)(B). The table in paragraph (a)(2) describes how we phase-in funding beginning October 1, 2007, until you reach the full funding level beginning October 1, 2011.

Proposed § 872.27 is consistent with provisions of sections 401(f)(5) and 402(g)(8) of SMCRA, as revised in the 2006 amendments. Section 402(g)(8)(A) requires us to ensure that “[i]n making funds available under this title” your “grant awards total not less than $3 million annually.” 30 U.S.C. 1232(g)(8)(A). We interpret this provision to mean the full funding level for grants we must annually award to eligible States and Indian tribes under this section is $3 million. So, we must include the total of funds an uncertified State or Indian tribe receives under all of Title IV—including the State or Tribal share funds (section 402(g)(1)), the

historic coal funds (section 402(g)(5)), and the prior balance replacement funds (section 411(h)(1))—as part of the $3 million referred to in section 402(g)(8)(A).

All section 402(g)(8) funds are distributed under section 401(d)(3) and (f) of SMCRA. Despite the amounts listed in section 401(f)(3) for distribution to the uncertified State and Indian tribes, this section requires us to phase in all “amount[s] distributed under this subsection” for the first four fiscal years beginning with FY 2008. 30 U.S.C. 1231(f)(5)(B). Section 401(f)(3) clearly covers the money allocated by section 402(g)(8) to ensure the $3 million distribution to eligible States and Indian Tribes. 30 U.S.C. 1231(f)(3)(A).

We are phasing-in this funding based on sections 401(f)(2)(A)(ii), 401(f)(3)(A)(ii), and 401(f)(5) of SMCRA. There are other ways to calculate the phased-in distribution. We are proposing the method that we chose for the 2008 distribution because we believe it maximizes funding for the minimum program States. To calculate the distribution, we first add up your annual prior balance replacement, State or Tribal share, and historic coal fund distributions. Then we calculate how much additional minimum program make up funding you would need to reach $3 million. We apply the phase-in only to that additional minimum program make up funding.

The following example illustrates the phase-in method: The distribution of State A's prior balance replacement funds and its phased-in State share funds and historic coal funds totals $400,000. The amount of minimum program funds we would add to bring State A's total distribution to $3 million is $2.6 million. In FY 2008 and FY 2009, we would add 50 percent of the $2.6 million in minimum program make up funds, or $1.3 million, to the $400,000 sum of the State's other funding. State A's total distributions for FY 2008 and FY 2009 therefore would be $1.7 million each. In FY 2010 and FY 2011, we would add 75 percent of the $2.6 million amount of minimum program funds, or $1,950,000, to the $400,000 sum of State A's other funding (assuming, for this example, that those other funding levels remain constant). State A would therefore receive $2,350,000 in both FY 2010 and FY 2011.

We invite you to comment on other ways to calculate minimum program make up funding that meet SMCRA's requirements.

The table in § 872.27(a)(2)(iii) shows that beginning in FY 2012, your total annual distribution will not be less than $3 million unless the estimated reclamation cost of your remaining Priority 1 and 2 coal problems is less than $3 million. Section 872.27(a)(2)(iv) explains that if you have Priority 1 and 2 coal problems remaining after September 30, 2022, we will continue to fund your total annual distribution at no less than $3 million (to the extent funds still are available) until the estimated cost of reclaiming your Priority 1 and 2 coal problems is less than $3 million. If the estimated cost of reclaiming your Priority 1 and 2 coal problems is less than $3 million but more than your total annual distribution of all other types of Title IV funds, we will provide minimum program make up funding up to the amount of your total unfunded reclamation cost.

Last, proposed § 872.27(b) states that we will award minimum program make up funds to you in grants following the procedures of Part 886 for uncertified States and Indian tribes, as we have for many years.

What may you use minimum program make up funds for? (§ 872.28)

Consistent with section 402(g)(8)(A) of SMCRA, we propose to add § 872.28 to state that you may only use minimum program make up funds to reclaim Priority 1 and 2 coal problems. You may not use minimum program make up funds for Priority 3 coal problems, AMD set-asides, noncoal problems, or any other work except Priority 1 and 2 coal problems.

What are prior balance replacement funds? (§ 872.29)

Section 872.29 is one of three new sections we propose to add to explain the provisions of section 411(h)(1) of SMCRA, as revised by the 2006 amendments, for what we call “prior balance replacement funds” in this rule. This section describes them as moneys we must distribute to you instead of the moneys that we allocated to your State or Tribal share of the Fund before October 1, 2007, but that we did not actually distribute to you because Congress never appropriated them. It identifies the source of these funds as general funds of the U.S. Treasury that are otherwise unappropriated, not the Fund. Under the 2006 amendments, distributions of prior balance replacement funds from general funds of the U.S. Treasury are mandatory and are not subject to Congressional appropriation. These distributions start in FY 2008 and last for seven years.

We do not propose to add a provision to this section, or to proposed § 872.32 which addresses certified in lieu funds from Treasury, to reflect the funding cap set forth in section 402(i)(3)(A) of SMCRA. 30 U.S.C. 1232(i)(3)(A). That cap limits to $490 million in any fiscal year the total amount of Treasury funding for grants to States and Indian tribes and for transfers to the three UMWA health care plans described in sections 402(h) and (i) of SMCRA. In addition, section 402(i)(3)(B) provides that if the cap is exceeded, each transfer would be reduced proportionally. 30 U.S.C. 1232(i)(3)(B). At this time, we project that total needs for this funding will remain below the cap amount; therefore, we have not proposed specific rule language describing how we would reduce our distribution of prior balance replacement funds and certified in lieu funds if the cap were reached. We request your comments on whether we should add such a provision, and, if so, what should it contain.

How does OSM distribute and award prior balance replacement funds? (§ 872.30)

We added § 872.30 to describe how we propose to distribute and award prior balance replacement funds. Under paragraph (a)(1), we propose to distribute U.S. Treasury funds to you, all States and Indian tribes with approved reclamation plans, equal to the moneys that we allocated to your State or Tribal share before October 1, 2007, but that were not distributed before then. Under paragraph (a)(2), we propose to distribute these funds to you if you are, or are not, certified under section 411(a) of SMCRA. Consistent with section 411(h)(1)(C) of SMCRA, proposed paragraph (a)(3) requires us to distribute these funds to you in seven equal annual installments, beginning in FY 2008.

Under proposed § 872.30(b), we will award prior balance replacement funds to you in grants under Part 885 if you are a certified State or Indian tribe or under Part 886 if you are uncertified. Section 411(h)(1) of SMCRA says “ * * * the Secretary shall make payments to States or Indian tribes for the amount due * * * .” 30 U.S.C. 1240a(h)(1)(A)(i).

We recognize that SMCRA, as amended, unambiguously requires us to distribute moneys from the general Treasury to the States and Indian tribes, but the 2006 amendments do not specify a
method
of payment for us to use to make the “payments.”
See, e.g.
, 30 U.S.C. 1232(i)(2) (“[O]ut of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of the Interior for distribution to States and Indian tribes such sums as are

necessary to pay amounts described in paragraphs (1)(A) and (2)(A) of section 411(h).”). We considered many methods for making the payments to States and Indian Tribes under section 411(h)(1). Based on that consideration and the Solicitor's M-opinion, we are required to make these payments as grants.

Not only are we required to use grants to distribute prior balance replacement funds under section 411(h)(1), but doing so also has advantages. First, using grants allows us to continue the established and effective process we have been using to disburse moneys from the Fund to States and Indian tribes for almost 30 years. Grants policies and procedures currently are described in our Federal Assistance Manual (FAM; OSM Directive GMT-10). They are simplified compared to those procedures used for the grants we award under Title V of SMCRA. The FAM and all grant application forms are available on-line, and States and Indian tribes can develop and submit grant applications to us electronically. Likewise, much of our application processing and all of our grant approval and award actions occur electronically. These capabilities are integrated with the Department of the Interior's Financial and Business Management System (FBMS). States' and Indian tribes' finance and accounting departments are experienced in following these procedures for receiving and managing grant funds we award. In addition, they are well versed in OMB Circular A-102, the “Grants Common Rule” at 43 CFR Part 12, and FAM requirements that we follow for providing financial assistance under Title IV of SMCRA. Those requirements include periodic reporting and auditing that help States, Indian tribes, and us ensure proper accounting for funds and their use.

Second, using grants can help us address our programmatic responsibilities concerning certified and uncertified States and Indian tribes under sections 201(c)(1) and (4) of SMCRA. 30 U.S.C. 1211(c)(1) and (4). Grant requirements for periodic reporting provide some of the information we need to monitor and evaluate States' and Indian tribes' accomplishments, determine if they are following their approved grants and reclamation plans, identify the need for assistance, and to help us with our reporting requirement mandated by section 405(j) of SMCRA.

Third, using grants allows us to maintain financial accountability for the prior balance replacement funds. As discussed in proposed § 872.31, the 2006 amendments require that prior balance replacement funds be used for specific purposes: Certified States and Indian tribes must use them for “the purposes established by the State legislature or tribal council of the Indian tribe, with priority given for addressing the impacts of mineral development”; and uncertified States and Indian tribes must use them for coal reclamation as described in section 403. 30 U.S.C. 1240a(h)(1)(D). Using grants provides us with oversight to ensure that the States and Indian tribes are spending prior balance replacement funds as required by SMCRA, as revised by the 2006 amendments, and specifically that uncertified States and Indian tribes are directing prior balance replacement funds into coal reclamation.

Last, the Treasury regulations associated with grants (31 CFR Part 205) allow States and Indian tribes to draw down prior balance replacement funds to pay expenses while otherwise keeping funds in the U.S. Treasury until needed.

Proposed § 872.30(c) addresses sections 411(h)(1)(A)(ii) and 411(h)(4)(A) of SMCRA, as revised by the 2006 amendments. 30 U.S.C. 1240a(h)(1)(A)(ii) and 1240a(h)(4)(A). It requires us to transfer to historic coal funds the moneys in your State or Tribal share of the Fund that were allocated, but not appropriated to you, before October 1, 2007. The amount of this transfer will be of the same amount that we pay you as prior balance replacement funds under this section and 411(h)(1) of SMCRA. Proposed § 872.30(c) further requires us to make the amounts transferred to the historic coal funds available for annual grants beginning in FY 2023, which is the same time we distribute the remaining moneys under Title IV. Finally, it requires us to allocate, distribute, and award the transferred amounts to you according to the provisions applicable to historic coal funds under §§ 872.21, 872.22, and 872.23.

What may you use prior balance replacement funds for? (§ 872.31)

Consistent with section 411(h)(1)(D)(i) of SMCRA, proposed § 872.31(a) requires you, a certified State or Indian tribe, to use the prior balance replacement funds you receive only for the purposes that your State legislature or Tribal council establishes, giving priority to addressing the impacts of mineral development. 30 U.S.C. 1240a(h)(1)(D)(i). While this language is taken essentially verbatim from the 2006 amendments, we realize this provision may significantly affect certified States' and Indian tribes' reclamation programs, and we specifically invite your comments on this proposal.

Under SMCRA, as revised by the 2006 amendments, the State legislature or Tribal council has broad and sole discretion to determine how prior balance replacement funds will be spent. Because OSM has no basis for approving or disapproving individual projects to be undertaken with these funds, we do not believe that projects paid for with prior balance replacement funds would be subject to OSM review requirements under laws such as the National Environmental Policy Act of 1969 (NEPA) and the National Historic Preservation Act (NHPA). Certified States or Indian tribes would be solely responsible for determining what other Federal laws are applicable to their activities. Therefore, we are not proposing that an Authorization to Proceed (ATP) from OSM with an accompanying NEPA review would be required. We invite your comments on this issue.

Proposed §§ 872.31(b) through (b)(3) require that uncertified States and Indian tribes use their prior balance replacement funds only for activities related to abandoned coal mine problems. Section 411(h)(1)(D)(ii) specifies that uncertified States “shall use any amounts provided under this paragraph for the purposes described in section 403.” 30 U.S.C. 1240a(h)(1)(D)(ii). So, uncertified States and Tribes must use prior balance replacement funds to reclaim Priority 1, 2, and 3 coal problems under § 874.12, to restore water supplies under § 874.14, and to maintain the AML inventory under section 403(c) of SMCRA. Though not a required use in proposed § 872.31(b), we believe uncertified States and Indian tribes may use these funds to acquire lands under § 879.11 as needed to address coal problems under section 403.

Congress enacted the 2006 amendments out of a concern for addressing remaining coal problems. Section 409(b) specifies that only certain types of funds can be used to address noncoal problems. 30 U.S.C. 1239(b). Prior balance replacement funds, authorized to be paid under section 411(h)(1), are not among the types of funds specified for noncoal reclamation under section 409(b).

Prior balance replacement funds described in section 411(h)(1) are based on the amount of the reclamation fees we collected in each State and on Indian lands and allocated to those States and Indian tribes under section 402(g)(1), but that Congress did not appropriate through FY 2007. However, the 2006 amendments reallocate those unappropriated section 402(g)(1) moneys to the historic coal funds of

section 402(g)(5). 30 U.S.C. 1240a(h)(1)(A)(ii) and 1240a(h)(4)(A). The prior balance replacement funds that the uncertified States and Indian tribes receive may be of an amount equivalent to the unappropriated balance, but they are paid from U.S. Treasury funds and have not been allocated under section 402(g)(1). There is a fundamental distinction between the prior balance replacement funds and section 402(g) moneys distributed from the Fund.

Therefore, proposed § 872.31(b) requires you, the uncertified State or Indian tribe, to use prior balance replacement funds only for the three purposes described above. This interpretation will not prevent you from abating Priority 1 noncoal hazards to public health and safety with the State or Tribal share funds we distribute to you annually under §§ 872.14 or 872.17 and historic coal funds we distribute under § 872.21.

What are certified in lieu funds? (§ 872.32)

We propose three new sections addressing funds distributed to States and Indian tribes described in section 411(h)(2) of SMCRA. 30 U.S.C. 1240a(h)(2). We call these moneys “certified in lieu funds” in this proposed rule. As the first of these three sections, § 872.32 describes certified in lieu funds as moneys that we will distribute to you, a certified State or Indian tribe, in lieu of moneys otherwise allocated to your State or Tribal share of the Fund after October 1, 2007. We are prohibited from distributing State and Tribal share moneys to you because of the exclusion in section 401(f)(3)(B) of SMCRA. 30 U.S.C. 1231(f)(3)(B). This proposed section also identifies the source of these certified in lieu funds as otherwise unappropriated funds in the United States Treasury, not the Fund. The annual distribution of certified in lieu funds is mandatory and not subject to prior Congressional appropriation. These distributions will start in FY 2009 because section 411(h)(2) of SMCRA specifies that our payments must equal the State and Tribal share funds “allocated on or after October 1, 2007.” 30 U.S.C. 1240a(h)(2)(A). So, the first fees collected that can serve as the basis for calculating certified in lieu payments are those allocated on coal produced during FY 2008. As a result, we will distribute certified in lieu funds for the first time in FY 2009.

How does OSM distribute and award certified in lieu funds? (§ 872.33)

Proposed § 872.33 describes how we will distribute and award certified in lieu funds. Paragraph (a) states that you must be certified under section 411(a) of SMCRA to receive certified in lieu funds, as required in section 411(h)(2) and defined in section 411(h)(2)(B). If you meet that requirement, we will follow the steps described in paragraph (b) to distribute these moneys to you. Under paragraph (b)(1), we will annually distribute to you, beginning in FY 2009, an amount based on 50 percent of the reclamation fees we received for coal produced during the previous FY in your State or on Indian lands within the jurisdiction of your Indian tribe. Proposed paragraph (b)(2) states that the funds we annually distribute to you will be in lieu of moneys you would have received from your State or Tribal share of the Fund if section 401(f)(3)(B) of SMCRA, as revised by the 2006 amendments, did not specifically exclude you from receiving those funds. 30 U.S.C. 1231(f)(3)(B). Although the Fund will not be the source of these moneys that we distribute to you, you will receive moneys each year as though you were still receiving them from your State or Tribal share of the Fund.

Proposed § 872.33(b)(3) explains, using a table, how we intend to phase-in our distribution of certified in lieu funds to you over the first three years beginning October 1, 2008. This paragraph is consistent with section 411(h)(3)(B) of SMCRA, which requires that in the first three fiscal years beginning with FY 2009, the amount we annually distribute to you will be equal to 25 percent, 50 percent, and 75 percent, respectively, of 50 percent of the annual reclamation fee collections in your State or from Indian lands within your jurisdiction. 30 U.S.C. 1240a(h)(3)(B). You will receive an amount equal to 100 percent of your 50 percent State or Tribal share of annual reclamation fee collections in the fiscal year beginning October 1, 2011, and in the following fiscal years.

Proposed § 872.33(c) states our intention to use grants to pay these funds to you. Section 411(h)(2) of SMCRA says “the Secretary shall pay to each certified State or Indian tribe * * * .” 30 U.S.C. 1240a(h)(2)(A). As with the section 411(h)(1) prior balance replacement fund “payments,” we must use grants to pay certified in lieu funds to you.
See
the discussion of § 872.30 above.

The proposed paragraph § 872.33(d) addresses the provisions of sections 401(f)(3)(A)(i) and 411(h)(4) of SMCRA. It requires us to transfer to historic coal funds the same amount of funds that we distribute to you as certified in lieu funds. The transferred amounts will come from moneys in your State or Tribal share of the Fund that are otherwise allocated to you for the prior fiscal year, but which you are barred from receiving. We must make those transferred amounts available for annual grants beginning in FY 2009, and will do so at the same time we distribute all other moneys under Title IV. Finally, proposed § 872.33(d) requires us to allocate, distribute, and award the transferred amounts to uncertified States and Indian tribes according to the provisions applicable to historic coal funds under §§ 872.21, 872.22, and 872.23.

Section 411(h)(3)(C) of SMCRA requires us to distribute to you, in two equal annual installments in FY 2018 and FY 2019, the amounts we withhold from the first three payments of certified in lieu funds as a result of the phased-in distribution. 30 U.S.C. 1240a(h)(3)(C). Proposed § 872.33(e) incorporates that provision into the regulations.

What may you use certified in lieu funds for? (§ 872.34)

Proposed § 872.34 states that you may use certified in lieu funds for any purpose. We believe that by not specifying any prescribed uses for these moneys, the 2006 amendments allow you to use certified in lieu funds for any purpose. Congress could have easily imposed a requirement to use the funds for a specific purpose as it did for prior balance replacement funds in sections 411(h)(1)(A)(i) and (ii). Because section 411(h)(2) does not specify the purpose(s) for which the funding it provides may be used, we interpret it to mean that the use of the funds it provides is not restricted.

However, we also recognize there is an alternative reading of SMCRA, as amended, and invite comment on whether our proposal reflects the better reading. Section 411(h)(2) of SMCRA, as revised by the 2006 amendments, is silent on how certified in lieu funds can be used. An argument can be made that this section's silence on the use of these funds does not mean certified States and Indian tribes can use them for any purpose. Instead, it might be viewed as meaning that the other provisions of section 411 of SMCRA, specifically 411(b) through (g), apply to the use of certified in lieu funds. Because this would make a major difference in not only how these funds may be used, but in OSM's role in overseeing that use, we invite comment on which alternative is

the better reading of the 2006 amendments.

In any case, as a certified State or Indian tribe, you must address coal problems that arise after certification under existing § 875.14(b), and we do not propose to change this requirement. In addition, when each State and Indian tribe became certified under the existing regulations at § 875.13(a)(3), they had to provide an agreement to “give top priority” to any coal problems that occur after certification. So, certified States and Indian tribes must address these coal problems, regardless of the funding source.

Part 873—Future Reclamation Set-Aside Program

Applicability (§ 873.11)

The 2006 amendments eliminated the authority for States and Indian tribes to set-aside funds for future reclamation that was once contained in section 402(g)(6). The proposed changes to §§ 873.11 and 873.12 reflect that change by restricting future set-aside actions to funding received prior to December 20, 2006, while preserving the requirements that existing funds contained in the set-aside account be used for their intended purpose. We reworded this section to account for this change and to use plain English.

Future Set-Aside Program Criteria (§ 873.12)

We propose to revise paragraph (a) to include December 20, 2006, as the cutoff date for deposits to future set-aside fund accounts. As explained above, we are making this change because the 2006 amendments removed the authority for States and Indian tribes to use Fund moneys for this purpose. We are also removing the phrase, “or (2) An acid mine drainage abatement and treatment fund pursuant to 30 CFR part 876,” as the acid mine drainage set-aside program is addressed in that Part of this rule. Likewise, we are deleting paragraph (b) because it repeats the conditions for funds that were previously set aside which are already included in paragraph (a). We are deleting the first sentence of existing paragraph (c) because it is now obsolete. We also reworded this section in plain English.

Part 874—General Reclamation Requirements

Definitions (§ 874.5)

We propose to add this new section to Part 874 to include the definition of the term “Reclamation plan or State reclamation plan” as it is defined in proposed § 872.5.

Information Collection (§ 874.10)

We propose to reword this paragraph using plain English and to use the current format approved by the OMB. It describes OMB's approval of information collections in Part 874, our use of that information, and the estimated reporting burden associated with those collections.

Applicability (§ 874.11)

We are proposing revisions to this section to clarify how the provisions of Part 874 apply to the types of funding made available under the 2006 amendments and to reword it using plain English. The new paragraph (a) continues to impose the existing requirement for compliance when reclaiming eligible lands and waters with moneys from the Fund. The new paragraph (b) would impose compliance when conducting reclamation projects with the prior balance replacement funds received by uncertified programs from section 411(h)(1) of SMCRA because section 411(h)(1)(D)(ii) states that the funds received must be used for the purposes of section 403. 30 U.S.C. 1240a(h)(1)(D)(ii). Section 403 imposes coal reclamation priorities, authorizes water supply restoration, and requires the maintenance of the AML inventory. 30 U.S.C. 1233. The new paragraph (c) would impose compliance by certified programs when using certified in lieu funds provided under section 411(h)(2) of SMCRA to address eligible coal problems after certification. We are proposing this requirement to ensure that coal problems are uniformly addressed under each program, regardless of certification status under section 411.

The new paragraph (d) requires certified programs to follow the requirements of this Part when expending the prior balance replacement funds provided by section 411(h)(1) of SMCRA to address coal problems after certification. Certified States and Indian tribes are to expend their prior balance replacement funds for the purposes established by the State legislature or Tribal council with priority given to addressing the impacts of mineral development. 30 U.S.C. 1240a(h)(1)(D)(i). However, when certified States and Indian tribes use prior balance replacement funds to address coal problems subsequent to certification, compliance with the provisions under Part 874 will be central to our review and approval process.

Eligible Coal Lands and Water (§ 874.12)

We are proposing to revise existing paragraphs (c), (e), and (f) of § 874.12 to reflect our proposed changes to the funding applicability in § 874.11, to correct minor errors in the existing regulations, and to reword these paragraphs using plain English. First, § 874.12(c) would be updated to allow the use of prior balance replacement funds by uncertified programs to supplement the cost of reclamation at eligible bond forfeiture sites consistent with section 411(h)(1)(D)(ii), which allows funds to be spent for the purposes described in section 403. Next, we propose inserting language in § 874.12(e) to allow uncertified programs to use prior balance replacement funds for the reclamation and abatement of inadequately reclaimed Priority 1 or Priority 2 sites that were mined between August 4, 1977, and the date on which the Secretary approved a State regulatory program, known as “interim program sites,” or where the surety of the mining operator became insolvent as of November 5, 1990, known as “insolvent surety sites.” We also corrected an error in the first sentence by replacing the second “may” with “made” so that the sentence reads: “An uncertified State or Indian tribe may expend funds made available * * *.” Last, the revisions to § 874.12(f) are minor conforming changes and do not alter the existing scope or meaning of that paragraph.

Reclamation Objectives and Priorities (§ 874.13)

We are proposing changes to § 874.13 that reflect expenditure priorities outlined in section 403(a) of SMCRA, as revised by the 2006 amendments, and clarify how reclamation programs should address Priority 3 reclamation objectives. Proposed paragraph (a) of § 874.13 contains the most recent date for our “Final Guidelines for Reclamation Programs and Projects” published in 2001. 66 FR 31250, 31258. In addition, it contains the long-standing requirement in section 403(a) of SMCRA that expenditures must “reflect the * * * priorities in the order stated.” 30 U.S.C. 1233(a).

The remainder of the proposed § 874.13(a) is generally the same as the text of sections 403(a)(1), (a)(2), and (a)(3) of SMCRA, as revised by the 2006 amendments. However, the last sentence of § 874.13(a)(3) was added to clarify the term “adjacent,” which was added by the 2006 amendments. More specifically, sections 403(a)(1)(B)(ii) and (a)(2)(B)(ii) of SMCRA allow for certain lands and waters that have been

degraded by past coal mining practices to be restored as either a Priority 1 or Priority 2 expenditure if they are adjacent to a Priority 1 or Priority 2 site. This new statutory provision also extends to Priority 3 lands and waters adjacent to Priority 1 or 2 sites that have already been reclaimed under the approved reclamation plan. In effect, the 2006 amendments allow reclamation programs to offer amendments to the AML inventory, where applicable, that would reclassify certain current Priority 3 lands and waters as Priority 1 or Priority 2 expenditures.

We propose that the term “adjacent” means Priority 3 eligible lands and waters that are “geographically contiguous.” Under our proposal, land and water resources that are spatially connected to a Priority 1 or Priority 2 site, even those sites previously reclaimed, may now be recorded in the AML inventory as Priority 1 or Priority 2 unfunded costs, funded costs, or completed expenditures, as applicable.

Given that our proposed § 874.13(a) contains only geographical considerations, we are also seeking comment on possible alternative definitions of or restrictions to the term “adjacent.” For example, we would like to receive comments on whether the term “adjacent” should include all disturbances by a single mining operation or company. Should the term “adjacent” allow for a hydrologic connection even though there may be great distances between the sites? Should the term contain restrictions on the types of Priority 3 problems or costs that can qualify? States can now set up 30% AMD set-aside trusts under 402(g)(6) of SMCRA. In view of that option, should there be any restrictions on how the term “adjacent” is used for Priority 3 AMD problems? Should permanent facility construction and perpetual treatment costs associated with AMD from a Priority 2 mine opening or highwall be elevated to Priority 2 status? Some facilities and perpetual treatment costs can run into hundreds of thousands, if not millions, of dollars. Should the expenditures for large acreages of Priority 3 subsidence be elevated in priority because they are geographically contiguous to a small Priority 2 subsidence event, regardless of cost? What about small Priority 2 tipples connected to large Priority 3 refuse piles? Finally, because the 2006 amendments removed the 30% cap in water supply replacement expenditures under section 403(b), should adversely affected water supplies be elevated in priority when adjacent to other kinds of Priority 1 or 2 reclamation sites? We would like to receive comments on whether there should be any limitations, monetary or otherwise, on the kinds of AML programs that should be addressed under the term “adjacent.”

The proposed paragraph (b) of § 874.13 incorporates the 2006 amendments' complete revision of section 402(g)(7) of SMCRA. Previously, section 402(g)(7) contained the requirements for developing hydrologic unit plans consistent with the AMD set-aside trust provision of section 402(g)(6). The amended language of section 402(g)(7) now addresses how Priority 3 work can be undertaken; it states:

In complying with the priorities described in section 403(a), any State or Indian tribe may use amounts available in grants made annually to the State or tribe under paragraphs (1) and (5) for the reclamation of eligible land and water described in section 403(a)(3) before the completion of reclamation projects under paragraphs (1) and (2) of section 403(a) only if the expenditure of funds for the reclamation is done in conjunction with the expenditure before, on, or after the date of enactment of the Surface Mining Control and Reclamation Act Amendments of 2006 of funds for reclamation projects under paragraphs (1) and (2) of section 403(a).

30 U.S.C. 1232(g)(7)

In effect, section 402(g)(7) prevents uncertified States or Indian tribes from using State or Tribal share funds, as discussed in section 402(g)(1) of SMCRA, and §§ 872.14 and 872.17, and historic coal funds, as discussed in section 402(g)(5) of SMCRA and § 872.21, for the reclamation of Priority 3 lands and water before they have completed their Priority 1 and 2 reclamation projects. However, section 402(g)(7) does provide an exception that allows State or Tribal share funds and historic coal funds to be used for Priority 3 lands and waters, but only if that reclamation is done in conjunction with the expenditure of funds before, on, or after December 20, 2006, for Priority 1 and Priority 2 reclamation.

To be consistent with this section, we propose to apply section 402(g)(7) of SMCRA in a manner that is slightly more restrictive than the way we have promoted Pri

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3AE8-13310. Public record. Not legal advice.