# Abandoned Mine Land Program > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3AE8-26458 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** November 14, 2008 - **Citation:** 73 FR 67576 ## 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: Final rule. SUMMARY: We, the Office of Surface Mining Reclamation and Enforcement (OSM), are revising our regulations for the Abandoned Mine Reclamation Fund (Fund) and the Abandoned Mine Land (AML) program. This rule revises our regulations to be consistent with the Tax Relief and Health Care Act of 2006, Public Law 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 rule reflects the extension of our statutory authority to collect reclamation fees for an additional fourteen years and to reduce the fee rates. The rule 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 rule extends incentives reauthorized by the 2006 amendments pertaining to the remining of certain lands and water adversely affected by past mining. DATES: Effective Date: January 13, 2009. 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 A. How did the reclamation fee work before the 2006 amendments? B. How did the AML program work before the 2006 amendments? C. How did the 2006 amendments change these programs? II. Outreach and Guidance III. Description of the Final Rule and Discussion of the Comments Received A. General Comments B. Section By Section Analysis IV. 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, Public Law 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, Public Law 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. However, funding for that program 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, 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). In addition, certified States and Indian tribes could 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, Public Law 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, Public Law 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 expense 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 funds into set-aside accounts for either future coal reclamation or acid mine drainage abatement and treatment programs or both. 30 U.S.C. 1232(g)(6) (as amended by the Omnibus Budget Reconciliation Act of 1990, Public Law 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, Public Law 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. Public Law 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 are no longer 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 are 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 receive mandatory distributions of Treasury funds in lieu of the State and Tribal share they are no longer 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 are 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 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 not less than $3 million annually. 30 U.S.C. 1232(g)(8)(A). This funding is a mandatory distribution from the Secretary's share of the Fund. However, like the rest of the distributions from the Fund, these distributions 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). • Federal expenses from the Secretary's share must be appropriated by Congress. 30 U.S.C. 1231(d)(a). 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 an acid mine drainage (AMD) abatement and treatment program (AMD set-aside) 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, Public Law 102-486, section 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 and Guidance Shortly after the enactment of the 2006 amendments, we 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. IMCC and NAAMLP subsequently submitted joint written comments on specific provisions of the amendments. We summarized their comments in the preamble to the proposed rule and we took all of the comments into consideration when developing the 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 restated and expanded upon the content of that guidance in the proposed and final rules. We have included the December 2007 written guidance in the docket for this rulemaking. 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 moneys to eligible States and Indian tribes under sections 411(h)(1) and (h)(2) of SMCRA; • Uncertified States and Indian tribes may not use funds that they receive under section 411(h)(1) of SMCRA for noncoal reclamation or 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). The comment period on the proposed rule was originally scheduled for 60 days, closing on August 19, 2008. We received requests from IMCC, NAAMLP, one State and one environmental group asking us to extend the comment period by an additional 60 days. In order to provide further opportunity to comment but to facilitate issuance of this final rule, we extended the comment period for ten days, through August 29, 2008. We believe that the number and quality of the comments we received, as discussed in the next section, indicate that we provided adequate time for comment. III. Description of the Final Rule and Discussion of the Comments Received This rulemaking revises 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 and to tribal primacy. The remining incentives provisions that leverage amounts from the Fund are the subject of a separate rulemaking, primarily about incentives to reclaim refuse “gob” piles, proposed on May 1, 2008, at 73 FR 24120. Efforts by Indian tribes to develop programs to take over regulatory authority for coal mining under the 2006 amendments will be addressed separately for each Indian tribe applying for primacy. Generally, this rulemaking sets forth standards and procedures for the coal reclamation fee, the Fund, and the AML program. This rule includes extensive regulations for long term operations of the amended Title IV program, including regulations that implement provisions of the 2006 amendments that will become effective at later dates. We are also taking advantage of this rulemaking opportunity to make other changes that we believe are needed to update and clarify related Parts of our existing regulations. Throughout this rule, the terms “money” and “moneys” are interchangeable with the terms “fund” or “funds,” but not with the term “Fund,” as defined in § 700.5. We received approximately 51 comments on the proposed rule, including joint comments from IMCC and NAAMLP and ten comments from individual States and Indian tribes that currently have AML reclamation programs under Title IV of SMCRA. In addition, we received comments from five environmental groups, one township, and approximately 35 citizens, most of whom submitted identical letters. Many commenters specifically concurred in whole or in part with the IMCC/NAAMLP comments. The comments that we received ranged from extremely specific to very general. We will first address the general comments. Any comment directed at a specific section of the proposed rules will be summarized and responded to in our section by section analysis. All comments timely submitted have been placed in the docket for this rule and are available for public review. A. General Comments Several commenters, including IMCC/NAAMLP, made general comments regarding the proposed rulemaking. Because these comments affect the rule as a whole, we will first address these comments. IMCC/NAAMLP and one State commenter suggested that we withdraw the proposed rule because of the “significant differences of opinion” that exist between the States and OSM. The commenters alternatively recommended that if we chose not to withdraw the proposed rule that we seriously analyze their comments and consider significantly restructuring and modifying the final rule to be consistent with their suggestions. Upon considering the commenters' request, we have decided that withdrawing the rule is not appropriate. Our overall general mission is to enforce and administer SMCRA, including all of its amendments. This final rule helps us to follow that mission because this rule is necessary to align our regulations with the 2006 amendments. Without this rulemaking, the existing regulations will not reflect the statutory changes and could create confusion. In addition, we believe this final rule will assist the States, Indian tribes, and the public by making our regulations easier to understand by using plain English and by providing the affected parties with more guidance and clarification when needed. Withdrawing the rule would delay the accomplishment of these purposes. Several commenters expressed concern that OSM drafted proposed rules in a “heavy handed” or “patriarchal” manner that is a “significant and detrimental departure from the cooperative spirit between OSM and the States and Tribes that has existed in the AML program for the last 25 years.” As evidence of this point, the commenters mention that OSM is “tak[ing] whatever approach is necessary [in interpreting the 2006 amendments] * * * to limit the flexibility of the States and Tribes to conduct AML reclamation on the sites most important to them within their respective borders. * * * We think OSM is merely seizing any justification it can to further limit the States and Tribes beyond what Congress intended.” The commenters continued by pointing out that the preamble to the proposed rule frequently relies on our increased oversight responsibilities brought about by the 2006 amendments to justify the proposed rule. The commenters noted that by doing so, OSM is “departing from the long established reliance on oversight as the tool of choice to monitor and guide State and Tribal programs in favor of a command and control approach. Because of that, the proposed rule has the tone of a Title V rule meant to achieve compliance from regulated entities rather than a Title IV rule promoting reclamation with partners.” Another commenter stated that the rule violates the intent of Congress because it is “micro-managing the methods of AML funding to States and Tribes * * *.” We appreciate hearing about these concerns from our State AML reclamation partners. In drafting both the proposed rule and this final rule, we did not attempt to be “heavy handed” in our approach or to increase oversight or OSM involvement except where mandated by the 2006 amendments. We value the collegial relationship we have had with the State and Tribal AML programs for many years and do not wish to see it erode. We recognize that the 2006 amendments significantly expanded all the programs' discretion to determine the most effective use of AML funds and have tried to reflect this in the proposed and final regulations. For instance, as discussed further in the section by section analysis, the regulations provide, consistent with the 2006 amendments, that uncertified programs can choose to direct more funding to water supply projects or AMD set-aside accounts with less OSM involvement or to address environmental problems adjacent to or in conjunction with high priority coal problems. This final rule does not extend our oversight role any further than is necessitated by the 2006 amendments. With this rule, we have sought to reflect a balance that will promote and enhance the cooperative spirit that presently exists between State and Tribal AML programs and their Federal partners at OSM. To that end, we believe we have been working openly and closely with these State and Tribal programs and the organizations that represent them since the 2006 amendments were enacted. Even before the proposed rule was published, we met with the concerned States, Tribes, and their organizations, and even circulated draft proposed rule language to them on several occasions. Through these outreach efforts, we believe we have demonstrated that we have been open to comments and suggestions from the outset. This openness is further evidenced by the fact that we developed the proposed and final rules in order to incorporate changes suggested by the States and Indian tribes, including revising methods of calculating fund distributions, such as the calculation of the minimum program adjustments as described in the preamble to § 872.27, and changing several key definitions including “adjacent” and “in conjunction” as described in § 874.13. In addition, the commenters criticize our reliance on advice from the Department of the Interior's Solicitor on three issues addressed in the rule—the use of grants instead of payments, the effect of the phase-in on minimum program funding, and the use of funds received under section 411(h)(1) of SMCRA for noncoal reclamation and AMD set-aside accounts. We acknowledge that many of our decisions are based upon the Solicitor's M-Opinion. When the 2006 amendments were first enacted, we began extensive analysis of the statute and outreach to the States and Indian tribes. At that time, we discovered that there were differences regarding the interpretation of several provisions contained in the 2006 amendments, and we sought legal guidance from the Solicitor's Office on three specific issues. The result of this guidance was the M-Opinion, which we used to help draft the proposed rule and to make the FY 2008 distributions. The M-Opinion is part of the docket for this rulemaking. OSM is bound by the interpretations of the 2006 amendments contained in the M-Opinion. See 209 Departmental Manual (DM) 3.2(A)(11) (“M-Opinions * * * shall be binding, when signed, on all other Departmental offices and officials and which may be overruled or modified only by the Solicitor, the Deputy Secretary, or the Secretary.”). Thus, our regulations must comply with the interpretations contained within the M-Opinion. Similarly, a commenter complained about our reliance on section 402(g)(2) of SMCRA, which states that the Secretary of the Interior “shall ensure strict compliance by the States and Indian Tribes with the priorities described in section 403(a) until a certification is made * * *.” 30 U.S.C. 1232(g)(2). We agree that the proposed and final rule is consistent with this statutory provision, just as with other provision of the 2006 amendments. The commenters have also criticized what they perceive to be an implied sense in the proposed rule that the States and Tribes should be satisfied and comfortable with OSM's interpretation of the 2006 amendments because of the significant increases in grant money provided to most States and Indian tribes under the new law. One commenter states: While the States and Tribes are very appreciative of Congressional action to return past unappropriated and current moneys to us, our focus has always been to use whatever moneys we receive to address public health and safety issues arising from the hazards of abandoned mines. For us, it is not just about the money—it's about programs and partnerships that work effectively and efficiently to accomplish the greatest amount of AML remediation possible. As a result, our comments regarding the proposed rule are intended to restore and structure the AML program in such a manner that it can make a difference for our citizens and the environment. Congress decided to continue the important reclamation work that the States and Tribes are conducting by enacting the 2006 amendments. The 2006 amendments created many new opportunities for the States and Tribes, and we eagerly anticipate working with the States and Tribes—our reclamation partners—as this program moves forward. While the 2006 amendments created great opportunities, it is also quite specific in many areas. As we stated above, one of our goals for this rulemaking is to align our rules with the 2006 amendments. We believe this final rule does so. Some commenters are concerned that we have no intention of considering their comments to the proposed rule and making revisions to the final rule because we have already distributed revised versions of some of the existing directives, guidelines, forms and manuals that accompany or are significantly related to our rules on the AML program, including the Federal Assistance Manual (FAM or GMT-10), and OSM Directive AML-1. We would like to assure these commenters that no final decisions were made concerning the final rule until after we had read and analyzed all of the comments that we received. As mentioned above, we are bound by the interpretations in the Solicitor's M-Opinion since it was issued in December 2007. Pursuant to that M-Opinion as well as the decision documents issued with regard to the 2008 distributions, we updated the FAM in December 2007 and July 2008. The FAM is a series of OSM directives that relate to the management of grants provided to States and Tribes under SMCRA. The updates to the FAM allowed us to complete the FY 2008 grant distribution, to award and manage the FY 2008 grants, to provide streamlined grants procedures for certified States and Indian tribes, and to make other changes not related to the 2006 amendments. Because the FAM consists of internal OSM directives, we can easily make changes to these directives to conform them to the current law and regulations. Thus, we are prepared to make additional changes that will be required to conform the contents of the FAM with the final rules that are enacted after consideration of the comments received on the proposed rule. With respect to the AML-1, which is the directive that describes OSM's policies and procedures relating to the AML inventory (also known as Abandoned Mine Land Inventory System or AMLIS), we circulated a draft of this directive to States and Indian tribe to receive their input as we are currently in the process of migrating the AML inventory into a more usable database. The circulation of a draft of AML-1 has allowed us to receive many useful comments on the AML inventory and will greatly improve our new AML inventory system. We would like to emphasize that we have not yet finalized any changes to AML-1, and nothing we are doing to improve the AML inventory will prevent us from fully considering the comments received on the proposed rule. We received several comments that included general support for the AML program and portions of the rule. For instance, one citizen commenter encouraged us to “go through with the amendment to reauthorize the Abandoned Mine Land Program [because] our state, communities and people deserve to have the land reclaimed and brought back to something that can be used again rather than a dangerous eyesore that the land is now.” We appreciate all of the comments we received in support of this rule. Several environmental groups and one township submitted comments that generally support the 2006 amendments and the positive change that should result as programs address acid mine drainage in the coalfields. These commenters and others stressed the need to recognize that the States have diverse AML reclamation programs, and that there is no one-size-fits-all method to address AML reclamation. Flexibility was stressed by many commenters, including but not limited to the many commenters that expressed the sentiment that “States should be given the latitude to use the funds for the construction or reconstruction of dams and waterways on public lands * * *.” We recognize that conditions vary at AML sites across the country—from climate to the terrain— and that SMCRA was implemented to provide the States with primary governmental responsibility over surface mining and reclamation operations. 30 U.S.C. 1201(f). The 2006 amendments did not alter the relationship between public and private lands and did not change the funding authorities related to the construction of dams and waterways. Project selection is the responsibility of each State and Indian tribe according to its approved reclamation plan. Thus, where possible, we have attempted to provide as much flexibility to States and Indian tribes as allowed by SMCRA, as amended in 2006. We also received several comments on remining as part of AML reclamation. One commenter strongly encouraged us to continue to pursue remining incentives, as they state that remining incentives are one of the most cost effective means of AML reclamation. In contrast, another commenter took a strong position against a broader interpretation of remining as an effective way to reclaim abandoned mine lands because reclamation in the name of remining has had some unfortunate environmental consequences in at least one State. In particular, this commenter stated that it is “opposed [to] any changes that would broaden the interpretation of remining beyond the scope of reclaiming coal refuse.” We would like to state unequivocally that this final rule does not address remining in any meaningful way. As discussed below in conjunction with Parts 700, 773, 785, 816 and 817, the only changes we are making to the regulations related to remining are those that must be made to conform the existing regulations with the changes made by the 2006 amendments. As mentioned above, we proposed a separate rulemaking on May 1, 2008, that addresses our discretionary authority under section 415 of SMCRA to enact remining incentives related to AML reclamation. 30 U.S.C. 1244. This final rule does not promulgate any of the provisions proposed in that rule. A commenter also specially criticized the Programmatic Environmental Impact Statement (PEIS) for the Federal program for the State of Tennessee, and stated that it does “not support any proposed revision of regulations that would further undermine preparation of environmental assessments (EA) or findings of no significant impact (FONSI) or environmental impact statements (EIS).” We appreciate the concerns raised by this commenter and do not believe that this rulemaking changes the preparation of environmental documents under the National Environmental Policy Act (NEPA) for Tennessee. Other comments related to the Tennessee PEIS are outside of the scope of this rule. As one of our goals of this rulemaking was to make the AML regulations easier to understand, we have attempted to address a few comments that stated the proposed rule was hard to follow and should be clarified. Although one State commended our efforts to make the regulations clear, it still found that in some places the proposed rule was somewhat difficult to fully understand. For example, that same State commented that the preamble to the proposed rule referred to a separate rulemaking related to the 2006 amendments that was published in the Federal Register on May 1, 2008. The State suggested that we clarify this reference to note that this May 2008 proposed rule was primarily about incentives to reclaim refuse “gob” piles. We made this change in the final rule and have made every effort to present and explain all of the complex issues as easily and simply as possible. One environmental group commented that it strongly supports our Watershed Cooperative Agreement Program and urges us to use our discretion to recommend to Congress in our upcoming FY 2010 budget request at least $10 million for that program because restoration groups can leverage this funding several times over to provide an additional source of funding for AMD remediation. We appreciate the comment, but the Watershed Cooperative Agreement Program and future budget decisions are beyond the scope of this rule. In their previous joint comments dated May 21, 2007, IMCC/NAAMLP commented that it will be very important for the States and Indian tribes to receive the training they will need to implement the provisions of the new rules once they are in place, and urged us to keep this in mind. Although it does not impact this rulemaking, we agree with the comment and plan to hold training and planning meetings with the States and Indian tribes after this rule takes effect. B. Section by Section Analysis Part 700—General Definitions (§ 700.5) We are adopting the changes to § 700.5 as proposed. These changes include the addition of two new definitions (“AML” and “AML inventory”) and relocation of 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”) from existing § 870.5 to § 700.5. Each of these terms apply to all of the regulations in Chapter VII of Title 30 of the Code of Federal Regulations, and we are making limited substantive changes to the text of the definitions of the six relocated terms. We are revising the first sentence of the definition of eligible lands consistent with the preamble to Part 884 to make it clear that certification qualifies a State or Indian tribe for a State or Tribal reclamation plan. However, the rest of the definition is substantively unchanged as it applies to AML programs. We are also correcting a mistaken reference to § 874.14 in this definition. As explained in the preamble to the proposed rule, the correct reference is § 875.14—Eligible lands and water subsequent to certification. In addition, we are rewording two definitions (“eligible lands and water,” and “left or abandoned in either an unreclaimed or inadequately reclaimed condition”) using plain English. We are also combining 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 is not changing. In addition, we are moving the definition of “expended” from § 870.5 to § 700.5 and removing the existing limitation that it only applies to costs for reclamation in order to make the definition consistent with the entire chapter. Last, we are expanding the definition of “Fund” in § 700.5. Previously, this term was defined slightly differently in both §§ 700.5 and 870.5. Under this rule, the definition of this term in § 700.5 is being 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. Responses to Comments We received one comment on our proposed changes to § 700.5. This commenter explained that the proposed changes might “still lead to misinterpretations and inadequate decision making regarding the best method to reclaim an AML site, i.e. reclamation or remining.” We have considered this comment, and we appreciate the commenter's concern but do not believe that any changes to the definitions are necessary. The definition of “reclamation activity” in this section explains what is considered reclamation of lands and waters eligible under Title IV of SMCRA. This definition is not intended to provide guidance as to the best method for reclamation. Instead, each State or Indian tribal reclamation program has the choice and flexibility to determine what reclamation tools to use, including remining, as described in their reclamation plan and authorized by law. Part 724—Requirements for Permits and Permit Processing Payment of Penalty (§ 724.18) We are revising § 724.18(d) to update the references in that section to reflect our division of existing § 870.15 into separate sections within Part 870 and to update information on how to find the interest rate for late payments. We received no comments on either this Part or Part 870, and we are adopting the changes as proposed. Part 773—Requirements for Permits and Permit Processing Unanticipated Events or Conditions at Remining Sites (§ 773.13(a)(2)) We proposed a technical amendment to § 773.13(a)(2) to conform this section with changes made to section 510(e) of SMCRA by the 2006 amendments. 30 U.S.C. 1260(e). As explained in the preamble to the proposed rule, section 510(e) was added to SMCRA in 1992 and created an exemption from the section 510(c) permit-block sanction for remining operations. This statutory provision originally contained a statutorily defined expiration date of September 30, 2004, which was removed by the 2006 amendments. Responses to Comments One environmental group commented that they oppose an open exemption from the section 510(c) permit-block sanction for remining operations. While we recognize the group's concern about remining and have considered their comment, we are only changing this regulation to conform to the 2006 amendments to SMCRA, which we believe are clear. Thus, we are adopting the revision to § 773.13(a)(2) as proposed to make our regulations consistent with SMCRA. Part 785—Requirements for Permits for Special Categories of Mining Information Collection (§ 785.10) We revised this paragraph using plain language and the current format approved by the Office of Management and Budget (OMB). It describes OMB's approval of information collections in Part 785, our use of that information, and the estimated reporting burden associated with those collections. The change is editorial in nature and has no substantive effect. Lands Eligible for Remining (§ 785.25(c)) As explained in more detail in the preamble to the proposed rule, we are removing § 785.25(c) to conform our regulations with the 2006 amendments. As discussed above in connection with § 773.13(a)(2), the 2008 amendments removed the statutorily defined expiration date of September 30, 2004, under section 510(e) of SMCRA. 30 U.S.C. 1260(e). We received no comments on this section and are adopting this section as proposed. Part 816—Permanent Program Performance Standards—Surface Mining Activities Revegetation: Standards for Success (§ 816.116) We proposed a technical amendment to § 816.116(c)(2)(ii) and (c)(3)(ii) to conform this section with changes made to section 510(e) of SMCRA by the 2006 amendments. 30 U.S.C. 1260(e). As explained in the preamble to the proposed rule, sections 510(e) and 515(b)(20)(B) were added to SMCRA in 1992 and 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), but those remining incentives had a statutorily defined expiration date of September 30, 2004. See 30 U.S.C. 1260(e) and 1265(b)(20)(B) (1993). The 2006 amendments removed this expiration date, and we are updating our regulations in conformance with this change. We are also rewording this section using plain English. Responses to Comments One environmental group commented that they “do not support the concept in 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). Any revision of this section should allow for conditional requirements that reflect changes in seasonal averages due to extreme wet or dry conditions within the two or five year time frame.” As we state in our response to § 773.13(a)(2), we recognize the commenter's concern but are only changing this regulation to conform to the 2006 amendments to SMCRA, which we believe are clear. Thus, we adopt the revision to § 816.116(c)(2)(ii) and (c)(3)(ii) as proposed to make our regulations consistent with SMCRA. Part 817—Permanent Program Performance Standards—Underground Mining Activities Revegetation: Standards for Success (§ 817.116) We also proposed a technical amendment to § 817.116(c)(2)(ii) and (c)(3)(ii) to conform this section with changes made to section 510(e) of SMCRA by the 2006 amendments. 30 U.S.C. 1260(e). The revisions to this section are identical to those adopted in § 816.116, except that this section relates to underground mining activities instead of surface mining activities. As explained in the preamble to the proposed rule, sections 510(e) and 515(b)(20)(B) were added to SMCRA in 1992 and 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), but those remining incentives had a statutorily defined expiration date of September 30, 2004. 30 U.S.C. 1260(e) and 1265(b)(20)(B). The 2006 amendments removed the expiration date, and we are updating our regulations in conformance with this change. We are also rewording this section using plain English. Responses to Comments One environmental group commented that they do not support the language proposed for this section for the same reasons they do not support the revision to § 816.116. Likewise, after consideration of this comment and for the same reasons stated in § 816.116, we are adopting the revisions to 817.116(c)(2)(ii) and (c)(3)(ii) as proposed. Part 845—Civil Penalties Use of Civil Penalties for Reclamation (§ 845.21) We are revising § 845.21(b)(1) as proposed to reflect our move of the definition of “emergency” from § 870.5 to § 700.5 of this chapter. We received no comments on this Part. Part 846—Individual Civil Penalties Payment of Penalty (§ 846.18) We are revising § 846.18(d) to update the references in that section to reflect our division of existing § 870.15 into separate sections within Part 870 and to update information on how to find the interest rate for late payments. We received no comments on either this Part or Part 870 and are adopting this section as proposed. 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. We did not receive any comments on our proposed revisions for Part 870, and we are adopting the proposed changes to this Part for the reasons described in the preamble to the proposed rule Part 872—Moneys Available to Eligible States and Indian Tribes We are revising Part 872 to address the changes to SMCRA that the 2006 amendments made. Generally, our revisions to Part 872 describe the moneys that make up the Fund and other sources of funding under SMCRA that are available to you, the eligible States and Indian Tribes with approved reclamation programs, including otherwise unappropriated funds in the U.S. Treasury. This Part also describes how we convey these funds to you and the purposes for which you may use them. In addition, we are dividing, removing, and renumbering parts of existing §§ 872.11(a) through 872.11(c) and § 872.12, changing headings, adding new sections and headings as appropriate, and more clearly describing the different types of funds available under this Part. We are making these additional changes to make the regulations easier to read and understand. Each change, a summary of the comments we received, if any, and our responses to these comments are described below in more detail. 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 § 700.5. What does this Part do? (§ 872.1) This section explains 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 received no comments on this section and, for the reasons set forth in the preamble to the proposed rule, we are adopting this section as proposed. Definitions (§ 872.5) This new section contains definitions pertinent to Part 872, including four definitions (“allocate,” “Indian Abandoned Mine Reclamation Fund or Indian Fund,” “reclamation plan,” and “State Abandoned Mine Reclamation Fund or State Fund”) that we are moving from existing § 870.5 and two new definitions (“award” and “distribute”). We received no comments on this section and are adopting § 872.5 generally as proposed and for the reasons discussed in the preamble to the proposed rule. For clarity, we are summarizing here our discussion of the terms “allocate,” “distribute,” and “award” because they are important in describing the process that we follow to make funds available to States and Indian tribes. Our accounting process first allocates funds to a particular share in the Fund when 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. After the funds are distributed, we award funds to States and Indian tribes in grants when they apply for such grants. Also, we did make a few minor edits to “Indian Abandoned Mine Reclamation Fund or Indian Fund” and “State Abandoned Mine Reclamation Fund or State Fund” for clarity. Information Collection (§ 872.10) In this section, we discuss the Paperwork Reduction Act requirements and the information collection aspects of Part 872. We are updating this section and rewording it using plain English. We did not receive any comments on this section and are adopting the section as proposed. Where Do Moneys in the Fund Come From? (§ 872.11) This section describes the funds we collect, recover, and otherwise receive that are the sources of revenue to the Fund. We proposed several changes to this section, including rephrasing the section heading, and renumbering existing §§ 872.11(a) through (a)(6) as §§ 872.11 through 872.11(f). Substantively, we proposed removing language from existing § 872.11(a)(6) (now renumbered as § 872.11(f)) that made interest earned after September 30, 1992, available for possible future transfer to the UMWA CBF under section 402(h) of SMCRA because the 2006 amendments added new provisions related to our transfers to the UMWA health care plans. We also proposed to revise and reorganize the information in existing §§ 872.11(b), including paragraphs (b)(1) through (b)(8). For instance, existing § 872.11(b)(1) is now included in §§ 872.14 and 872.15 on State share funds and § 886.20 on unused funds. Similarly, existing § 872.11(b)(2) is now included in §§ 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 § 872.20, and existing § 872.11(b)(4) is included in §§ 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 §§ 872.26 and 872.27 on minimum program makeup funds. We are moving existing § 872.11(c) to § 872.12(c). We are revising all these provisions to be consistent with the 2006 amendments and to use plain English. Responses to Comments A State commented on proposed § 872.11(f), which provides that revenue to the Fund includes “[i]nterest and other income earned from investment of the Fund. We will credit interest and other income only to the Secretary's share.” The commenter reasoned that the interest earned on moneys in the Fund that have been allocated to States and Indian tribes as State or Tribal share funds “should be credited to the respective state/tribe” and that this interest would be used for the purposes of Title IV. Although we agree with the commenter that sections 402(g)(1)(A) and (B) direct us to allocate moneys deposited in the fund to the State and Indian tribal shares, after consideration of this comment we must respectfully disagree with the commenter's conclusion that State and Indian tribes should also receive the interest on this allocation. Until the Abandoned Mine Reclamation Act of 1990 was enacted, there was no provision in SMCRA that allowed the Fund to contain any interest it earned. Compare the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508, 104 Stat. 1388-290, § 6002) with SMCRA (Pub. L. 95-87 (1977)). The 1990 amendments to SMCRA added sections 401(b)(5) and 401(e). 30 U.S.C. 1231(b)(5) and 1232(e). Section 401(e) directs the Secretary of the Treasury to “invest such portion of the [Fund that is not required to meet current withdrawals] in public debt securities * * *.” Under SMCRA, as amended in 2006, we must credit the interest earned on these investments to “the fund for the purpose of the transfers” to the UMWA health care plans referred to in section 402(h) of the Act. Thus, as noted in section 401(b)(5), the Fund will contain “interest credited to the fund under subsection (e)” but this interest can only be used for transfers to the UMWA health care plans. We do not have the statutory authority to credit the interest earned on State and Tribal shares to individual States and Tribes for their use under Title IV. Therefore, we adopted § 872.11(f) as proposed so that interest earned on the fund is properly credited to enable us to meet our obligations as prescribed by sections 401(e) and 402(h) of SMCRA. Where Do Moneys Distributed From the Fund and Other Sources Go? (§ 872.12) We did not receive any comments on this section and are adopting our proposed changes to § 872.12 for the reasons stated in the preamble to the proposed rule. What Money Does OSM Distribute Each Year? (§ 872.13) Section 872.13 is a new section that we proposed to add to describe how we distribute moneys each year to States and Indian tribes under SMCRA. Section 872.13(a) is intended as a tool that can be used to locate specific regulatory provisions relating to each type of funding that States and Tribes receive under sections 401, 402, and 411 of SMCRA. 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). Each type of funding is described in greater detail elsewhere in the rule. Paragraph (b) explains that 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 you as early in the FY as possible. When we make adjustments to the fees collected in an earlier FY due to refunds or additional fee payments, we must make these changes to the FY in which we learn that the adjustments are necessary because we cannot go back and revise the prior year fee collection amounts and distributions that we have already made to you. 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 apply for grants using the procedures of Part 885 and uncertified States and Indian tribes use the procedures of Part 886. Responses to Comments A State commented on the mandatory annual distributions we described under § 872.13, and asked whether the distributions will occur in mid-December of each year as they have under our past practice for timing annual distributions. Section 402(f)(2)(i) of SMCRA only requires us to distribute amounts deposited into the Fund for the preceding fiscal year. It does not specify when this distribution should occur. Because the fourth quarter of the fiscal year ends on September 30, with collections due 30 days after that, we expect to cut off collections as of November 30 of each year to capture most of the fourth quarter's collections. As we did for the FY 2008 distribution, we distribute these funds to States and Indian tribes as soon as practicable thereafter, generally in mid-December. However, after consideration of this comment, we decided not to address the timing of the distribution in this rulemaking in order to maintain flexibility to address unforeseen circumstances in future years, and we are adopting the rule as proposed. What are State share funds? (§ 872.14) To add clarity and establish a consistent structure for the types of funding in this Part, and as discussed in the preamble to the proposed rule, we proposed adding this section to explain 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. We did not receive any comments on this section, and we are adopting it as proposed. How does OSM distribute and award State share funds? (§ 872.15) We are adding § 872.15 to explain 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 provides that for you to be eligible to receive State share funds, you must have and maintain an approved reclamation plan. Section 872.15(a)(2) incorporates section 401(f)(3)(B) of SMCRA and provides that States certified under section 411(a) 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). In accordance with section 401(f)(3)(B), we did not distribute State share funds to certified States in FY 2008. In § 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 of State share funds, which are required to be phased in under 401(d)(3) and (f) of SMCRA. 30 U.S.C. 1231(d)(3) and (f). 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. However, 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 are distributing to you, the uncertified State, only 50 percent of the State share allocated to you. Because the State share is 50 percent of the reclamation fees collected on production in your State, for FY 2008 and FY 2009, you received only 25 percent of the reclamation fees collected on coal produced in your 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 your 50 percent share, which is 37.5 percent of the reclamation fees collected on coal produced in your State. We will distribute to you your 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 you all moneys remaining in your State share of the fund. Consistent with section 402(g)(1)(C) of SMCRA, § 872.15(b)(2) explains that we are continuing to award funds under this paragraph in grants in accordance with Part 886. 30 U.S.C. 1232(g)(1)(C). Responses to Comments IMCC/NAAMLP and two States commented on various aspects of this section as proposed. First, as part of a broader comment that affects historic coal funds (§ 872.22), minimum program make-up funds (§ 872.27), prior balance replacement funds (§ 872.30), and certified in lieu funds (§ 872.33), as well as State and Tribal share funds (this section and § 872.18), IMCC/NAAMLP suggested that we change our proposed regulations to allow States and Indian tribes a choice to receive these funds either in grants or by direct payments. The commenters prefer allowing each State and Indian tribe to choose whether to use a grant or direct payment because it maximizes flexibility. In support of this position, the commenter asserts that Congress did not dictate in the 2006 amendments that we must use grants to award funds under SMCRA. After consideration of SMCRA and this comment, we have determined to finalize § 872.15(b)(2) as proposed with minor edits made for clarity. Thus, under this regulation State share funds will be awarded as grants to uncertified States and Indian tribes. Section 402(g)(1)(C) of SMCRA requires that funds the Secretary allocates to State and Indian tribal shares under paragraph (g)(1) of section 402 “shall only be used for annual reclamation project construction and program administration grants .” 30 U.S.C. 1232(g)(1)(C) (emphasis added). This provision clearly requires us to award State share funds in grants. Second, IMCC/NAAMLP and two separate State commenters suggested that we modify the proposed rule to specify what will happen to the State share funds that are not distributed during FY 2008 through FY 2011 under section 401(f)(5)(B) of SMCRA and proposed § 872.15(b)(1). IMCC/NAAMLP mentioned several possible ways in which these withheld funds could be treated, including returning them to the States as part of the prior balance replacement funds, holding them in the Fund until the end of the AML program in FY 2023, or placing them in the historic coal fund. However, IMCC/NAAMLP and one State commenter settled on requesting that we add paragraph (c) to this section that states: “We will distribute to you the amounts we withhold under subparagraph (b) of this section in two equal installments. We will do this in Federal fiscal years 2018 and 2019.” IMCC/NAAMLP expressed concerns about whether the States can spend these withheld funds on noncoal reclamation and the AMD set-aside once they are returned. Similarly, another State commenter requested that we allow the amounts that are withheld under the phase-in provision to be used as part of the AMD set-aside when they are distributed to the States. Specifically, this State commenter was unsatisfied with our apparent decision in the proposed rule to “plac[e] these withheld funds into the unappropriated balance category for distribution along with the Prior Balance Replacement Payments in subsequent years.” This commenter asserted that we should treat these withheld funds differently “because Prior Balance Replacement Payments carry the October 1, 2007 cutoff date.” We appreciate the questions and concerns that we received regarding what happens to State share funds withheld according to the phase-in provision of section 401(f)(5). After careful consideration of the alternative approaches presented in the comments, we have decided not to modify the proposed rule and are adopting it as proposed with minor editorial modifications for clarity. In coming to this conclusion, we first reviewed the language provided by IMCC/NAAMLP and one State that would have us distributing the withheld amounts over two years. As the commenters pointed out, such a provision would make the return of these withheld moneys consistent with the return of the phased-in certified in lieu funds that certified States and Indian tribes receive under section 411(h)(3)(C). Although this approach has an appeal because it promotes consistency as to how to treat the separate phase-in provisions contained in the 2006 amendments, after a thorough analysis of this issue we have determined that we do not have statutory authority to make such a distribution. SMCRA unambiguously states that certified States will receive “[a]mounts withheld from the first 3 annual installments [of certified in lieu funds] in 2 equal annual installments beginning with fiscal year 2018.” There is no such comparable provision for State share moneys that uncertified States receive, and we cannot read such a provision into the statute where it does not exist. Therefore, we reject the suggested addition of § 872.15(c). In addition, after reviewing the proposed language of § 875.15, we determined that the language of § 872.15(b)(1)(iv) is clear that in FY 2023 and thereafter, uncertified States will begin to receive moneys “remaining in their State share of the Fund.” See also 30 U.S.C. 1231(f)(2)(B). We believe this language is clear because the only State share funds remaining in the Fund in FY 2023 and thereafter are those amounts withheld from the phase-in provision of section 401(f)(5)(B) of SMCRA. There are two reasons why the only State share money remaining in the Fund in FY 2023 and thereafter is the withheld money from the phase-in provision. First, the prior balance replacement fund provisions of section 411(h)(1) provide that an amount equivalent to all of the State share moneys allocated, but not appropriated, to States for reclamation fee collections received on coal produced before October 1, 2007, will be returned to the States through Treasury funds. 30 U.S.C. 1240a(h)(1). As explained in the preamble to § 872.30(c), the actual State share moneys that remain in the Fund will then become historic coal funds that will also be distributed in FY 2023 and thereafter. 30 U.S.C. 1240a(h)(4)(A). In other words, after the prior balance replacement funds are paid, there will be no State share moneys in the Fund for moneys collected on coal produced prior to October 1, 2007. Second, because State share funds are now permanently appropriated at their full allocation amount, subject to the section 401(f)(5)(B) phase-in for four fiscal years, the only State share funds that will remain in the Fund that can be paid out in FY 2023 are those that are withheld by the phase-in. These funds can be used for any of the purposes enumerated in § 872.16, including noncoal reclamation and inclusion in an AMD set-aside account. Thus, § 872.15(b)(1)(iv), as proposed, adequately addresses this issue. We would also like to mention that we agree with one State's analysis that section 411(h)(1)(B) of SMCRA defines the amount that will be distributed for prior balance replacement funds as “the unappropriated amount allocated to a State or Indian tribe before October 1, 2007 under subparagraph (A) or (B) of section 401(g)(1).” 30 U.S.C. 1240a(h)(1)(B). Thus, we are not authorized to use prior balance replacement funds to return the withheld amounts of the State share for collections received on coal produced after October 1, 2007. Section 872.31 explains the purposes for which prior balance replacement funds can be used. We recognize, however, that only States that remain uncertified in FY 2023 and thereafter will receive funds under § 872.15(b)(1)(iv). Given the tenor of the comments, we anticipate that some States that are currently uncertified may have phased-in State share amounts withheld but may certify before they would be eligible to receive these funds back in FY 2023 and thereafter. Therefore, as authorized by section 411(h)(2)(A) and described further in the preamble to § 872.33, we are adding language to § 872.33 to clarify that if a certified State has unpaid State share funds withheld in the phase-ins, we will distribute certified in lieu funds to it at the next annual distribution after it certifies. This certified in lieu payment will then cover both the State share funds withheld during the phase-in and State share allocations from fee collections in the previous FY. Thus, States that are currently uncertified and subject to the phase-in of State share funds will receive an amount equivalent to the withheld amount from Treasury funds as part of their certified in lieu payments if they become certified before they have this withheld amount returned as State share funds in 2023 and thereafter. As such, these funds can be used without restriction as described in § 872.34. Are there any restrictions on how States may use State share funds? (§ 872.16) For the reasons described in the preamble to the proposed rule, we are adopting § 872.16(a) through (e) generally as proposed, although we have changed the title and added a word to the introductory language for clarity. Moreover, as described below, we are also adding paragraph (f) in response to comments received. These paragraphs now provide that you, the uncertified State, may use your State share grant funds only 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 AMD set-aside fund under Part 876; (5) to acquire land under § 879.11; and (6) to maintain the AML inventory under section 403(c) of SMCRA. Responses to Comments One State and IMCC/NAAMLP commented that States should be allowed to use their State share funds to maintain the AML inventory. They observed that, by not specifically saying States may use funds other than prior balance replacement funds to maintain the AML inventory, the regulations could be interpreted to mean the only types of funds that States could use to maintain the AML inventory would be prior balance replacement funds. After reviewing this comment, we have revised § 872.16 to include paragraph (f), which specifies that uncertified States can use State share funds “to maintain the AML inventory under section 403(c) of SMCRA.” This addition recognizes that maintaining the AML inventory will help uncertified States measure progress toward addressing all known coal problems. What are Tribal share funds? (§ 872.17) To add clarity and establish a consistent structure for the types of funding in this Part, and as discussed in the preamble to the proposed rule, we proposed adding this section to explain that Tribal share funds are 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. We did not receive any comments on this section, and we are adopting it as proposed. How does OSM distribute and award Tribal share funds? (§ 872.18) This section largely is a duplicate of § 872.15 except that it applies to Indian tribes and the Tribal share funds instead of States and State 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. In the preamble to the proposed rule, we did note a few distinctions involving the distribution of Tribal share funds to Indian tribes, including why § 872.18 excludes all certified Indian tribes from receiving Tribal share funds after October 1, 2007, and the reason why the Crow Indian tribe received a Tribal share distribution for FY 2008. We received no comments on these points. We are retaining the relevant provisions in the final rule and are adopting them as proposed with minor modifications to the wording for clarity. Responses to Comments All of the comments we received on § 872.18 were the part of the comments made by IMCC/NAAMLP and the two States that commented on § 872.15. Essentially, one State and IMCC/NAAMLP commented that we should give Indian tribes the option of receiving their Tribal share funds in grants or by direct payments. For the same reasons we give in our response to that comment under § 872.15 relating to State share funds, we adopt § 872.18(b)(2) as proposed, with a minor modification for clarity. Thus, we would continue to award Tribal share funds to any uncertified Indian tribes in grants. In addition, also as part of a broader comment, IMCC/NAAMLP and one State commented that we should distribute Tribal share funds held back for the phase-ins in two equal payments in FY 2018 and 2019. Another State commenter was unsatisfied with our apparent decision to make withheld funds part of the prior balance replacement funds, thereby effectively restricting their use in noncoal reclamation and AMD set-aside accounts. For the same reasons we give in our response to that comment under § 872.15 relating to State share funds, we adopt § 872.18 as proposed, with minor modifications made for clarity. Thus, we will distribute any Tribal share moneys withheld under the phase-in provision for reclamation fee collections for coal produced after October 1, 2007, in FY 2023 and thereafter when it will be returned to any remaining uncertified Tribes. Are there any restrictions on how Indian tribes may use Tribal share funds? (§ 872.19) For the reasons described in the preamble to the proposed rule, we are adopting § 872.19(a) through (e) generally as proposed, although we have changed the title and added a word to the introductory language for clarity. Moreover, as described below, we are also adding paragraph (f) in response to comments received. These paragraphs now provide that you, the uncertified Indian tribe, may use your Tribal share grant funds only 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 AMD set-aside fund under Part 876; (5) to acquire land under § 879.11; and (6) to maintain the AML inventory under section 403(c) of SMCRA. Responses to Comments As part of a comment related to the almost identical provision related to the use of State share funds, IMCC/NAAMLP commented that we should allow use of funds other than prior balance replacement funds to maintain the AML inventory. Similarly, one State specified that we should add paragraph (f) to § 872.16, related to State share funds, that provides that State share funds be allowed to maintain the AML inventory. To promote consistent uses of State share and Tribal share funds and for the same reasons we decided to include that paragraph (f) in § 872.16, we have also decided to include it here. So, § 872.19(f) now clearly allows uncertified Indian tribes to use their Tribal share funds to maintain the AML inventory under section 403(c) of SMCRA. What will OSM do with unappropriated AML funds currently allocated to the Rural Abandoned Mine Program? (§ 872.20) We received no comments on this section. For the reasons discussed in the preamble to the proposed rule, we are adopting § 872.20 as proposed. What are historic coal funds? (§ 872.21) Section 872.21 describes historic coal funds, which are provided 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. 30 U.S.C. 1232(g)(5). Under § 872.21(a), we determine the amount of the historic coal funds by allocating 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). We distribute these 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). Under § 872.21(b), we describe other moneys included in historic coal funds as a result of the reallocations we must make during our annual fund distribution. We received no comments on this section. For the reasons discussed in the preamble to the proposed rule, we are adopting § 872.21 as proposed. How does OSM distribute and award historic coal funds? (§ 872.22) We are adding § 872.22 to describe how we distribute and award historic coal funds. We distribute these 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 are removing existing § 872.11(b)(4)(i) and (ii) and including 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. Section 872.22(b) provides that once the eligibility criteria listed in § 872.22(a)(1) and (2) are met, we calculate the amount of historic coal funds that 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. We will continue to use the formula described in paragraph (b) of this section to distribute historic coal funds to you even after reclamation fee collections end. The table in § 872.22(c) describes how we distribute historic coal funds, and how these distributions are affected by the four year phase-in contained in section 401(f)(5)(B) of SMCRA. Section 872.22(d) states that we only distribute the historic coal funds you need to reclaim your unfunded Priority 1 or 2 coal problems and includes the provisions that we are moving from existing § 872.11(b)(4)(i) and (ii). Specifically, this paragraph addresses the situation where the cost to reclaim all your, the uncertified State's or Indian tribe's, remaining Priority 1 and 2 coal problems is more than the amount you receive for your State or Tribal share alone, but is less than the amount that you receive for your State or Tribal share, unused funds from prior allocations, and historic coal funds combined. If this event occurs, we will reduce the amount of historic coal funds that you receive to the amount needed for you to fund reclamation of your remaining Priority 1 or 2 coal problems. Under § 872.22(e), we are continuing the long-standing practice of awarding historic coal funds to you in grants following the provisions of Part 886. Responses to Comments We received six comments regarding paragraphs (b), (c), and (e) of § 872.22. However, after careful consideration of these comments and for the reasons stated below, we are adopting all paragraphs of this section as proposed with only minor revisions to clarify some of the references in the regulation. As explained in detail above and in the preamble to the proposed rule, § 872.22(b) provides that we distribute historic coal funds to eligible States and Indian tribes according to an existing formula based on the amount of historic coal production before SMCRA was enacted. We received comments on this paragraph from IMCC/NAAMLP and two States. To begin, IMCC/NAAMLP asked whether we would “recalculate the percentages used in the formula each year * * *?” The answer to this question is that we recalculate the percentages in the formula every year. The formula is based on the tons of coal produced in your State or on your Indian lands prior to August 3, 1977, and these historic coal production numbers do not change. We calculate the distribution percentages by determining the percentage your State or Indian tribe has of the total coal tonnage produced in the States and Indian tribes eligible for historic coal funding that year. The percentages will only change only in two instances: (1) When a State or Indian tribe that was not previously eligible for historic coal funding becomes eligible by establishing an approved reclamation program or by entering sufficient Priority 1 or 2 coal problems in the AML inventory; or (2) when a previously eligible State or Indian tribe loses eligibility by certifying coal completion or falling below the requirement for inventoried Priority 1 or 2 coal problems. Thus, we expect the formula to remain the same in many years. Because the formula does change, but we expect that it can only change in the limited instances described above, we have decided not to place the formula into the regulations. The formula and calculations to make the annual historic coal fund distribution are published on OSM's Web site each year as part of the fund distribution package. In addition, two States suggested that we revise the historic coal formula. One State suggested that we revise the formula to take into account “the hazards left to be abated.” Similarly, the other State commenter proposed that we revise the formula to take into “consideration the inability of a State to complete its [high priority reclamation] by September 30, 2022 and beyond.” As these States point out, such revisions would help to ensure minimum program States could complete their high priority reclamation projects before the AML programs end. We appreciate these suggested revisions to the formula and recognize that some States with large inventories of high priority coal problems receive small distributions of historic coal funds. We also recognize that increasing the amount of historic coal funds distributed to these States would help them reclaim their coal problems more quickly. However, section 402(g)(5)(A) of SMCRA requires us to allocate historic coal funds “through a formula based on the amount of coal historically produced in the State or from the Indian lands concerned prior to August 3, 1977.” 30 U.S.C. 1232(g)(5)(A). Because SMCRA does not give us the discretion to consider the amount of high priority coal problems for each State as listed in the AML inventory when we allocate and distribute historic coal funds, we did not make any substantive changes to § 872.22(b). As with the State share funds under § 872.15 and the Tribal share funds under § 872.18, we received several comments inquiring into and proposing suggestions for the distribution of historic coal funds withheld under the phase-in provision of section 401(f)(5)(B). For instance, IMCC/NAAMLP noted that our proposed rule was unclear about what happens to these withheld funds, and IMCC/NAAMLP and one State recommended that we distribute the amounts of historic coal funds withheld because of the phase-in provision in two equal distributions in FY 2018 and 2019. These commenters also expressed concerns regarding the purposes that the withheld historic coal funds may be used for once returned. In the discussion in the preamble to §§ 872.15 and 872.18, we explained that SMCRA does not authorize us to distribute State and Tribal share moneys withheld under the section 401(f)(5)(B). Likewise, SMCRA does not authorize us to distribute withheld historic coal moneys through two payments in FY 2018 and 2019, as we do for the certified in lieu moneys withheld from certified States and Indian tribes under the phase-in provision of section 411(h)(3). We think that § 872.22 explains what happens to these withheld historic coal moneys. We slightly expanded § 872.22(c)(4) to clarify that in FY 2023 and thereafter, States that remain uncertified will receive the amount calculated using the historic coal formula each year “until funds are no longer available or you have reclaimed your remaining Priority 1 and 2 coal problems.” So, the amount of historic coal funds withheld during the phase-in period will remain in the Fund along with other undistributed historic coal funds, which will primarily consist of the large amounts transferred from unappropriated State and Tribal share balances upon payment of prior balance replacement funds under section 411(h)(1) of SMCRA. In FY 2023 and thereafter, we expect these historic coal funds to provide the bulk of funding to States that still have high priority coal reclamation. States that receive historic coal funds in FY 2023 and thereafter can use them for any of the purposes described in § 872.23, including noncoal reclamation and inclusion in the AMD set-aside account. Certified States and Indian tribes, however, cannot receive certified in lieu funds to make up for any withheld historic coal funds. Section 411(h)(2)(A) of SMCRA, which governs the use of certified in lieu funds, refers only to State and Tribal share funds that were allocated after October 1, 2007, and not to historic coal funds. So we could not add a paragraph to § 872.33 that would allow an amount equal to any withheld historic coal funds to be distributed from certified in lieu funds if a State is certified before FY 2023. As part of its larger comment discussed in more detail in the preamble to § 872.15, IMCC/NAAMLP also requested that we change our proposed regulations to allow you to have the option of receiving historic coal funds in grants or by direct payments. Although we considered this comment, we cannot adopt this suggestion for the same reason we cannot allow State and Tribal share funds to be paid as direct payments in §§ 872.15 and 872.18. SMCRA specifies that historic coal funds are awarded as “annual grants to States and Indian tribes which are not certified under section 411(a) to supplement [State and Tribal share] grants received by such States and Indian tribes * * * until the priorities stated in paragraphs (1) and (2) of section 403(a) have been achieved * * *.” 30 U.S.C. 1232(g)(5)(A) (emphasis added). Thus, we must distribute historic coal funds as grants. Are there any restrictions on how you may use historic coal funds? (§ 872.23) For the reasons described in the preamble to the proposed rule, we are adopting § 872.23(a) through (e) generally as proposed, although we have changed the title and added a word to the introductory language for clarity. Moreover, as described below, we are also adding paragraph (f) in response to comments received. These paragraphs now provide that you, the uncertified State or Indian tribe, may use your historic coal funds only 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 or the governing body of an Indian tribe under section 409(c) of SMCRA; (4) to deposit into an AMD set-aside fund under Part 876; (5) to acquire land under § 879.11; and (6) to maintain the AML inventory under section 403(c) of SMCRA. Responses to Comments IMCC/NAAMLP and one State commented that States and Indian tribes should be allowed to use their historic coal funds to maintain the AML inventory. As with their similar comments directed at §§ 872.16 and 872.19, they observed that, by not specifically saying States and Indian tribes may use funds other than prior balance replacement funds to maintain the AML inventory, the regulations could be interpreted to mean that the only type of funds that States could use to maintain the AML inventory would be prior balance replacement funds. After reviewing this comment, we have revised § 872.23 to include paragraph (f), which specifies that uncertified States and Indian tribes are allowed to use historic coal funds to maintain the AML inventory. This addition recognizes that maintaining the AML inventory will help uncertified States and Indian tribes measure progress toward addressing all known coal problems. In the preamble to the proposed rule, we specifically requested comments on whether or not the requirement in section 402(g)(2) of SMCRA for “strict compliance” by uncertified States and Indian tribes with the priorities for reclamation of coal problems also impacts the authorization in section 409(b) that allows historic coal funds to be expended on noncoal reclamation. IMCC/NAAMLP commented that they do not believe the requirement of section 402(g)(2) applies to the use of historic coal funds or prior balance replacement funds. We agree with the comment to the extent it describes the purposes for which historic coal funds can be used. Amended section 402(g)(2) of SMCRA, which requires “strict compliance” by uncertified States and Indian tribes with the priorities for reclamation of coal problems, does not impact the authorization in section 409(b) that allows you to spend historic coal funds on noncoal reclamation. Once requests are made under section 409(c) of SMCRA, uncertified States and Indian tribes may use historic coal funds provided under section 402(g)(5) “for those reclamation projects which meet the priorities stated in section 403(a)(1)”. 30 U.S.C. 1239(c)(1). Thus, we are adopting § 872.23(c), as proposed, to explicitly allow uncertified States and Indian tribes to continue using historic coal funds for noncoal reclamation consistent with section 409(b) of SMCRA. Although we agree that historical coal share funds can be used for noncoal reclamation, the same is not true for the use of prior balance replacement funds. We will discuss this comment as it relates to why a different analysis applies to prior balance replacement funds, in conjunction with § 872.31. What are Federal expense funds? (§ 872.24) As proposed, we are dividing existing § 872.11(b)(5) into two sections and renumbering 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. With the exception of minimum program make up funds, which the 2006 amendments added to section 402(g)(3) in paragraph (E), we called them “Federal expense” funds in the proposed rule and this final rule. The new sections address the 2006 amendments and use plain English. Section 872.24 replaces the introductory paragraph at existing § 872.11(b)(5) and identifies Federal expense funds as 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. Responses to Comments Comments we received from IMCC/NAAMLP and one State revealed that our description of Federal expense funds under proposed § 872.24 and our explanation for removing a reference to minimum program make up funds in proposed § 872.25(b) were inconsistent. Specifically, the comments noted that, under proposed § 872.24, Federal expense funds are considered moneys in the Fund that are not allocated or distributed as State and Tribal share funds, historic coal funds, and minimum program make up funds. Yet, we stated in proposed § 872.25(b) that we may not deduct the amount of funds we allocate or distribute as Federal expense funds from your State or Tribal share funds and historic coal funds, and we proposed to remove a reference to minimum program make up funds in proposed § 872.25(b) 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.” 73 FR 35225. The commenters wanted us to clarify whether or not minimum program make up funds are Federal expense funds. We agree with the commenters that this language in proposed §§ 872.24 and 872.25 could be confusing, and as explained below, we are revising § 875.25 to remove any potential inconsistency. Thus, for the reasons stated in the preamble to the proposed rule, we are adopting § 872.24 as proposed. As such, Federal expense funds are considered to be moneys in the Fund that we do not allocate or distribute as State and Tribal share funds, historic coal funds, or minimum program make up funds. Section 402(g)(3) of SMCRA addresses uses of the Secretary's 20 percent share of the Fund, which we divide into two subsets: “Federal expense funds” that Congress must appropriate, which include funding for expenses under sections 402(g)(3)(A) through (D); and minimum program make up funds under section 402(g)(3)(E) that are provided under section 402(g)(8) of SMCRA and are not subject to Congressional appropriation. Though minimum program make up funds come out of the Secretary's 20 percent share (sometimes called the “Federal share”), we do not consider them “Federal expense funds” because Congress does not specifically appropriate them (other than the appropriation contained within the 2006 amendments). Are there any restrictions on how OSM may use Federal expense funds? (§ 872.25) Section 872.25 describes how we may use Federal expense funds. For clarity, we have changed the title of this section from that proposed. However, with the exceptions described below, we are generally adopting this section as proposed. 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. Paragraphs (a) through (a)(5) detail that we may, for instance, 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. These paragraphs are based on section 402(g)(3)(A)-(D) and 402(g)(4) of SMCRA. We are renumbering existing § 872.11(b)(7) as § 872.25(b) and rewording this provision using 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 expense funds, described at § 872.25, from your State or Tribal share funds and historic coal funds. Section 872.25(b) also removes a reference in former § 872.11(b)(7) to minimum program make up funds provided under section 402(g)(8) of SMCRA. After considering the comments described with regard to § 872.24 and this section, we are removing the reference to minimum program make up funds that we had included in the proposed rule. We do not consider minimum program make up funds to be Federal expense funds because, unlike the funds listed in sections 402(g)(3)(A) through (D) and 402(g)(4) of SMCRA, minimum program make up funds have already been appropriated by Congress in the 2006 amendments and do not require any further annual appropriation before distribution can occur. 30 U.S.C. 1232(g)(3)(E). In addition, we are renumbering existing § 872.11(b)(8) as § 872.25(c) and rewording 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). Responses to Comments As discussed above in connection with § 872.24, comments from IMCC/NAAMLP and one State pointed out an inconsistency in our description of Federal expense funds under § 872.24 and our explanation for removing a reference to minimum program make up funds in § 872.25(b). More specifically, the comments noted that our proposed rule in § 872.24 essentially said minimum program make up funds are not Federal expense funds, yet proposed § 872.25(b) said they are. As we explained in the discussion of § 872.24 in this final rule, we agree with the comments and are making changes in the text of § 872.25(a) and (b) in the final rule to clarify that minimum program make up funds are not Federal expense funds, although both minimum program make up funds and Federal expense funds are subsets of the Secretary's 20 percent share of collections to the Fund. We believe these changes we made to this section are consistent with sections 401(d)(1) and 402(g)(5)(A) of SMCRA. Section 401(d)(1) of SMCRA specifically provides that “[m]oneys from the fund for expenditures under subparagraphs (A) through (D) of section 402(g)(3) shall be available only when appropriated for those subparagraphs.” 30 U.S.C. 1231(d)(1). In contrast, minimum program make up funds are covered by section 401(d)(3) which says “[m]oneys from the fund shall be available for all other purposes of this title without prior appropriation * * *.” 30 U.S.C. 1231(d)(3). This section would include minimum program make up funds as set out in sections 402(g)(3)(E) and 402(g)(8)(A). It is because of this distinction that for the final rule we removed the reference to section 402(g)(8) of SMCRA from § 872.25(b). It also is why we addressed minimum program make up funds separately in §§ 872.26 through 872.28 instead of including them with Federal expenses in § 872.24. We also received comments from IMCC/NAAMLP that said we should include minimum program make up funding in the list of authorized uses of Federal expense funds in § 872.25(a). The comments asserted that we “can use any number of funds to make these [minimum program] payments, including the federal expense fund.” After consideration of this comment, we decided not to make any additional changes to § 872.25. As we stated previously, we consider minimum program make up funds to be distinct from Federal expense funds even though both minimum program make up funds and Federal expense funds come out of the Secretary's 20 percent share of annual fee collections, as authorized under section 402(g)(3). The primary distinction is that Congress must appropriate Federal expense funds while minimum program make up funds do not need a Congressional appropriation other than that contained in the 2006 amendments. Section 401(f)(5)(A) of SMCRA allows us in any fiscal year to request, and Congress to appropriate, Federal expense funds from the Fund in addition to the mandatory appropriations made for grants to States and Indian tribes in the 2006 amendments. We believe, however, that it is not necessary to list in this regulation all the possible budget choices future administrations and Congress may make. IMCC/NAAMLP and two States commented that we should revise § 872.25(a)(2) to state more affirmatively our responsibility to administer emergency powers under section 410 of SMCRA either through our Federal Reclamation Program in States and for Indian tribes without approved emergency programs or through approved State and Indian tribal emergency programs. The comments maintained that section 410(a) of SMCRA makes OSM, and not States and Indian tribes, responsible for funding emergency projects. In support, the commenters assert that we have not given States with approved emergency programs full autonomy to operate them, and that recently some States' proposed emergency projects have not been approved. The commenters expressed their concern that we intend to reduce or eliminate emergency program funding. After considering these comments, we have decided not to change proposed § 875.25(a)(2). While we appreciate these comments, they address issues that are beyond the scope of this rulemaking. For example, the 2006 amendments did not amend section 410 of SMCRA or otherwise address the scope of OSM's emergency powers. Thus, whether, and to what extent, OSM expends money on AML emergencies is unaffected by the 2006 amendments and this rulemaking. While we are adding § 875.25, this section does not expand or constrict the scope of OSM's emergency powers. We certainly recognize that AML emergencies can pose extreme hazards to public health and safety and property, and we do not in any way suggest that it is acceptable for such emergencies to go unabated. As always, we will work in a cooperative manner with our State co-regulators to assure that AML emergencies will be abated. What are minimum program make up funds? (§ 872.26) As proposed, part of our changes to existing § 872.11(b)(6) included moving that section to §§ 872.26 and 872.27. 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. First, § 872.26(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. After consideration of the comments received, we have amended § 872.26(a) to identify the source of these funds as moneys in the Secretary's 20 percent share of the Fund that are authorized for mandatory distribution and are not included in the Federal expense share under §§ 872.24 and 872.25. Section 402(g)(3)(E) of SMCRA requires us to use the Secretary's 20 percent share of the Fund provided under section 402(g)(3) for this mandatory distribution. 30 U.S.C. 1232(g)(3)(E). However, unlike the Federal expense funds provided under paragraphs (A) through (D) of section 402(g)(3) and §§ 872.24 and 872.25 of the regulations, these funds do not need additional Congressional appropriation. 30 U.S.C. 1231(d)(1). Second, § 872.26(b) describes four criteria that 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. Other than minor modifications for clarity, we did not change these requirements from the proposal. Last, consistent with section 402(g)(8)(B) of SMCRA, § 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. This paragraph was adopted as proposed. Responses to Comments The calculation and use of minimum program make up funds was a subject of several comments. These commenters were primarily concerned with the amount of money minimum program States will be receiving under the 2006 amendments and these regulations. In particular, the general comments reflected two primary concerns: first, that if minimum program States receive only the minimum level of funding annually they will not complete the reclamation of the coal problems listed in the AML inventory during the life of the AML program; and, second, whether the phase-in provision of SMCRA section 401(f)(5)(B) should apply to minimum program make up funds. We will discuss the first concern below, but because § 872.27 contains language implementing the phase-in provision, we will discuss the second under that section. Two States expressed concern that OSM is interpreting the 2006 amendments in such a manner as to guarantee that minimum program States will not receive enough funds to reclaim the sites listed in the AML inventory during the life of the program. One of these commenters notes that it has “an AML inventory which exceeds $200 million [and it] would never be able to complete reclamation on all the Priority 1 and 2 hazards in the State by the end of fee collection in 2022 at $3 million per year minimum,” which would leave the citizens of that State “in great danger of being injured or even killed through some type of contact with one of these [unreclaimed] hazards.” Another State asserted the same concerns: “At an annual $3 million funding distribution [this State] will not get the Priority 1 and Priority 2 AML problems reclaimed by September 30, 2022.” Three environmental groups generally commented that minimum program States deserve and are due $3 million annually. A specific suggestion that these two State commenters and IMCC/NAAMLP made was to add the words “or greater” at the end of the first sentence of § 872.26(a) and at the end of § 872.27(a)(1). These commenters indicate that these changes will allow the Secretary to give a State or Indian tribe more than the minimum program mandatory funding of $3 million per year, if he so chose. This language could be used, as two States note and IMCC/NAAMLP appears to agree, to allow the Secretary to give more funds to minimum program States, particularly in the later years of the program after more States and Indian tribes certify coal completion and more historic coal funds are available to distribute among uncertified States and Indian tribes with large AML inventories remaining. One State asked that throughout the rule we make it clear that “minimum program funding is not less than $3 million annually and can be greater than $3 million on an annual funding basis.” In regard to a similar suggested change to § 872.27, IMCC/NAAMLP stated that they did not care how OSM was able to get the minimum program States more funds, but that “it simply needs to be done in order to meet the minimum $3 million [annual] award beginning immediately.” We appreciate the concerns that commenters raise on this point, but after careful consideration we have determined that we cannot change paragraph (a) of this section (or of § 872.27 as explained below) as suggested. We agree with the commenters' point that a static funding level of $3 million a year will not enable some States to complete their high priority coal reclamation by the time the fee collections end. We regret this situation because, as IMCC/NAAMLP and one State pointed out, “ ‘minimum program' does not refer to [a] lack of AML hazards that a State has to address,” and dangerous AML sites will likely continue to exist after FY 2022 in minimum program States and could pose grave danger to those States' citizens and visitors. Unfortunately, the 2006 amendments do not provide us with the statutory authorization to augment the $3 million floor to ensure that the minimum program States can complete high priority coal reclamation using any funds appropriated for mandatory distribution under section 401 of SMCRA, although we may increase funding above this floor for appropriated Federal expenses such as State emergency program funding. Section 402(g)(8) of SMCRA requires us to “ensure that the grant awards total not less than $3,000,000 annually to each State and each Indian tribe having an approved abandoned mine reclamation program * * *.” 30 U.S.C. 1232(g)(8)(A). All this section does is establish the threshold amount that minimum program States will receive; it does not alter the underlying calculation that determines how much every uncertified State will receive. To calculate whether any uncertified State will meet this minimum threshold, you must look at section 401(f)(3), which states: [F]or each fiscal year, * * * the Secretary shall distribute— (i) The amounts allocated under [the State and Tribal share provisions], the amounts allocated under [the historic coal funds provision], and any amount reallocated [because of equivalent amount is paid out of Treasury as certified in lieu funds], for grants to States and Indian tribes [as historic coal funds]; and (ii) The amounts allocated [for the minimum program make-up] under section 1232(g)(8). 30 U.S.C. 1231(f)(3). For uncertified States with a total amount to be distributed less than $3 million, section 401(f)(3)(ii) authorizes us to distribute minimum program make up funds in order to get them up to the threshold amount in section 402(g)(8)(A). It is the provisions of section 401 that authorize and appropriate these moneys from the Fund to uncertified States in mandatory distributions, and nothing in section 402(g)(8) changes the formula allocation set forth in section 401(f)(3). Thus, we are only authorized by SMCRA to provide minimum program make up funds, if needed, to bring the funding for each uncertified State up to $3 million. We are not authorized to use minimum program make up funds to give mandatory distributions in excess of these amounts to minimum program States. To use Federal expense funds to provide the States with amounts greater than $3 million, we would need a specific Congressional appropriation. Section 401(f)(5)(A) says that “the amount distributed under this section shall be in addition to the amount appropriated from the fund during the fiscal year.” 30 U.S.C. 1231(f)(5)(A). Although section 401(f)(5)(A) of SMCRA authorizes us to provide additional grants from Federal expense funds, it does not require us to provide such grants. Instead, the language of individual appropriations acts and our budgetary discretion, which are outside the scope of this rulemaking, govern how we expend the Federal expense funds. We agree that more historic coal funds will be available to the remaining uncertified States as other States finish their coal problems and become certified. This occurs because the historic coal distribution percentages are increased for the remaining States, and also because amounts in the Fund equal to the certified in lieu funds the newly certified States will now receive are reallocated to historic coal funds under section 411(h)(4) and used to increase total historic coal distributions. We expect that as States certify, minimum program States will receive more historic coal funds and eventually will no longer require minimum program make up funds because the increase in historic coal funds will raise their funding over the $3 million threshold. We also note that the comments we received in conjunction with §§ 872.24 and 872.25 about an inconsistency between the description of Federal expense funds and minimum program make up funds in the proposed rule also apply to this section. As we previously clarified in this final rule, we do not consider minimum program make up funds to be Federal expense funds, and, to be consistent with the changes we made in §§ 872.25(a) and (b), we are also changing § 872.26(a) to clarify that the source of minimum program make up funds is the moneys in the Secretary's 20 percent share of the Fund that are authorized for mandatory distribution. How does OSM distribute and award minimum program make up funds? (§ 872.27) Section 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 Secretary's share 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 do not receive any minimum program funding under this section. If your distribution of these funds is less than $3 million annually, we add Secretary's share funds to increase your total distribution to $3 million. Although we use Secretary's share funds to ensure that you receive at least $3 million in your 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). 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. 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. We are calculating the phased-in distribution using the method that we chose for the 2008 distribution bec [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3AE8-26458. Public record. Not legal advice.