Kentucky Regulatory Program, 54586-54589 [E6-15443]

Download as PDF 54586 Federal Register / Vol. 71, No. 180 / Monday, September 18, 2006 / Rules and Regulations Original amendment submission date Date of final publication Citation/description * * * October 29, 1996 and June 15, 2005 ............................... * September 18, 2006 .......... * * * Colorado Inactive Mine Reclamation Plan, Chapter VI. [FR Doc. E6–15442 Filed 9–15–06; 8:45 am] BILLING CODE 4310–05–P DEPARTMENT OF THE INTERIOR Office of Surface Mining Reclamation and Enforcement 30 CFR Part 917 [KY–250–FOR] Kentucky Regulatory Program Office of Surface Mining Reclamation and Enforcement (OSM), Interior. ACTION: Final rule; approval of amendment. AGENCY: II. Submission of the Proposed Amendment We are approving an amendment, with one exception, to the Kentucky regulatory program (the ‘‘Kentucky program’’) under the Surface Mining Control and Reclamation Act of 1977 (SMCRA or the Act). Kentucky submitted three separate items with revisions pertaining to prepayment of civil penalties, easements of necessity for reclamation on bankruptcy sites, and various statutes to eliminate outdated language. SUMMARY: DATES: Effective Date: September 18, 2006. FOR FURTHER INFORMATION CONTACT: William J. Kovacic, Telephone: (859) 260–8400. Telefax number: (859) 260– 8410. SUPPLEMENTARY INFORMATION: I. Background on the Kentucky Program II. Submission of the Proposed Amendment III. OSM’s Findings IV. Summary and Disposition of Comments V. OSM’s Decision VI. Procedural Determinations cprice-sewell on PROD1PC66 with RULES I. Background on the Kentucky Program Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its State program includes, among other things, ‘‘a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of the Act * * *; and rules and regulations consistent with regulations issued by the Secretary VerDate Aug<31>2005 15:15 Sep 15, 2006 Jkt 208001 pursuant to the Act.’’ See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Kentucky program on May 18, 1982. You can find background information on the Kentucky program, including the Secretary’s findings, the disposition of comments, and conditions of approval in the May 18, 1982, Federal Register (47 FR 21434). You can also find later actions concerning Kentucky’s program and program amendments at 30 CFR 917.11, 917.12, 917.13, 917.15, 917.16 and 917.17. By letter dated March 28, 2006, Kentucky sent us a proposed amendment to its program under SMCRA (30 U.S.C. 1201 et seq.) at its own initiative ([KY–250–FOR], Administrative Record No. KY–1642). The full text of the program amendment is available for you to read at the location listed above under ADDRESSES. III. OSM’s Findings Following are the findings we made concerning the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. Any revisions that we do not specifically discuss below concern nonsubstantive wording or editorial changes. The first change was mandated by the Supreme Court of Kentucky (Court) in the case of Commonwealth of Kentucky, Natural Resources and Environmental Protection Cabinet v. Kentec Coal Co., Inc., No. 2003–SC–000622–DG. The Court issued an opinion on September 22, 2005, in which it found that the provisions of 405 KAR [Kentucky Administrative Regulations] 7:092 that required a corporate permittee to prepay an assessed civil penalty to get a due process hearing on the penalty amount was an unconstitutional violation of equal protection provisions of the State and Federal constitutions. The court also held that the assessment of the penalty against Kentec without prepayment and without consideration of the permittee’s inability to pay was a violation of Section 2 of the Kentucky Constitution and an unreasonable and arbitrary exercise of the Kentucky Environmental and Public Protection Cabinet’s (Cabinet) authority. PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 The Department for Natural Resources’ Division of Mine Reclamation and Enforcement, in response to this ruling, has altered the provisions on its notices of assessment of civil penalties to comply with the ruling. The Division uses the following statement of appeal rights on the assessment notices: Should you decide not to negotiate, you have three (3) options remaining to resolve the proposed assessment. You may (1) choose not to contest the amount of the proposed assessment or the violation in which case a final Order [order] of the Secretary will be entered. Note: If an administrative hearing as to the fact of the violation was properly requested under 405 KAR 7:092, the final order will only determine the amount of the penalty and not the fact of the violation; (2) request an assessment conference to contest the proposed assessment; Note: The Kentucky Bar Association has determined that the appearance of individual who is not a licensed attorney, on behalf of a third person, corporation or another entity, at a penalty assessment conference constitutes the unauthorized practice of law. Corporations or other entities must be represented by counsel at penalty assessment conferences. Individuals may represent themselves; or (3) request an administrative hearing instead of an assessment conference. See 405 KAR 7:092, Section 6. Prepayment of the proposed assessment is no longer required. [emphasis added] The Office of Administrative Hearings has also altered language on the Penalty Assessment Conference Officer’s Report that advises permittees of their rights to an administrative hearing. That language reads as follows: Any person issued a proposed penalty assessment may request an administrative hearing to contest the Conference Officer’s recommended penalty or the fact of the violation or both by filing with the Office of Administrative Hearings, 35–36 Fountain Place, Frankfort, Kentucky 40601, a petition under Section 6 of 405 KAR 7:092. The Cabinet may also request under Section 5 of 405 KAR 7:092 an administrative hearing to contest the Conference Officer’s recommended penalty. [Permittee] should take notice that given the decision by the Supreme Court of Kentucky in Environmental and Public Protection Cabinet v. Kentec, 2005 WL 2316191, llS.W. 3dll, (2005), the provisions of 405 KAR 7:092, Section 6 (2)(b) requiring prepayment of the proposed penalty ARE NO LONGER IN EFFECT and [Permittee] DOES NOT need to prepay the recommended penalty amount in the event it decides to request a Formal Administrative Hearing. E:\FR\FM\18SER1.SGM 18SER1 Federal Register / Vol. 71, No. 180 / Monday, September 18, 2006 / Rules and Regulations If a request for an administrative hearing is not filed with the Office of Administrative Hearings within thirty (30) days of mailing of this Report and Recommendation, the Secretary shall enter an order providing: (a) That [Permittee] has waived all rights to an administrative hearing on the amount of the proposed assessment; (b) that the fact of violation is deemed admitted; and (c) that the penalty assessment contained in this Report and Recommendation is deemed accepted and is due and payable to the Cabinet within thirty (30) days after the entry of the final order. If a petition requesting a hearing as to the fact of the violation has been timely filed pursuant to Section 7 of 405 KAR 7:092, the finding set forth in clause (b) of the preceding sentence shall be omitted from the Secretary’s order and the penalty assessment contained in this Report and Recommendation shall be due and payable within thirty (30) days of the mailing of the final order affirming the fact of a violation. [emphasis added] This is the second time the Supreme Court of Kentucky has ruled that prepayment requirements used by the cabinet for due process hearings regarding surface mining violations are unconstitutional under the Kentucky Constitution. The ruling in Franklin v. Natural Resources and Environmental Protection Cabinet, 799 S.W.2d 1 (Ky. 1990) held that a similar prepayment requirement that applied to all persons violated the equal protection clauses of the State and Federal constitutions. Kentucky undertook a major revamp of its hearing procedures in response to that ruling and put the current hearings process in place. That process, insofar as the prepayment requirement is concerned, has now been found unconstitutional. The Supreme Court of Kentucky ruling notwithstanding, section 518(c) of SMCRA and the Federal regulations require prepayment of a proposed penalty if a hearing is requested. The Federal regulations at 30 CFR 845.19(a) clearly state: cprice-sewell on PROD1PC66 with RULES The person charged with the violation may contest the proposed penalty or the fact of the violation by submitting a petition and an amount equal to the proposed penalty or, if a conference has been held, the reassessed or confirmed penalty to the Office of Hearings and Appeals (to be held in escrow * * *) within 30 days from receipt of the proposed assessment or reassessment or 30 days from the date of service of the conference officer’s action, whichever is later. Because Kentucky is waiving prepayment of the penalty specifically required by the Federal regulations, the Director finds that Kentucky’s proposed revision is less stringent than section 518(c) of SMCRA and less effective than the Federal regulations at 30 CFR 845.19(a) and therefore cannot be approved. VerDate Aug<31>2005 15:15 Sep 15, 2006 Jkt 208001 The second proposed change is Senate Bill 219, which creates an easement of necessity to conduct reclamation operations by entities who have assumed the reclamation obligations of a bankrupt permittee and where the rights of entry held by the permittee have been terminated. The terms only apply to those areas where only reclamation is being performed. It does not apply to areas where coal removal is planned by a successor to the permittee. The legislation calls for payment of a sum certain to rights holders and allows the parties to take any disputes about the sufficiency of the payment to court for an adjudication of an appropriate amount. There is no Federal counterpart to these provisions. Because they provide a method for ensuring reclamation that is in addition to the methods provided for in the Federal rule, the revisions Kentucky proposes in this amendment are approved in accordance with Section 505(b) of SMCRA. The third proposed change is Senate Bill 136 which deletes certain language from Chapter 350 of the Kentucky Revised Statutes (KRS), the chapter containing the Kentucky surface mining laws. This bill eliminates language in: KRS 350.060(12) relating to the two-acre exemption and KRS 350.060(16) pertaining to permit renewal applications that were not timely filed; KRS 350.075(3) requiring the submission of regulations before August 1, 1986; KRS 350.090(1) relating to the exceptions for permit applications or renewals submitted in compliance with KRS 350.060(2) (note: we believe that the correct citation should be KRS 350.060(12)); KRS 350.093(9) dealing with bond coverage exceptions for third party actions; and KRS 350.445(3)(g) pertaining to roads above highwalls that ‘‘support coal mining activities.’’ Section KRS 350.285 relating to removal of coal on private lands is deleted in its entirety. Each of these amendments to statutes eliminates language from the chapter that is outdated, was disapproved by OSM in previous years, or was a counterpart to a repealed provision of SMCRA. The OSM actions to which Kentucky is responding are listed below. At section 201 of SMCRA, OSM repealed the two-acre exemption on May 7, 1987. On May 10, 2000, OSM disapproved Kentucky’s proposal at KRS 350.060(16) to issue a notice of noncompliance, instead of an Imminent Harm Cessation Order, to a person who has not yet filed a renewal application when the permit has expired (65 FR 29949). Then, on September 6, 2000, OSM set aside these provisions (65 FR PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 54587 53909). On February 12, 1990, OSM disapproved Kentucky’s proposal at KRS 350.093(6)(c) relieving a permittee of bond liability for actions of third parties beyond the permittee’s control (55 FR 4866). Then, on June 5, 1990, OSM set aside these provisions (55 FR 22903). On November 20, 2002, OSM disapproved Kentucky’s proposal at 350.285 that removal of coal on private land, incidentally and as a necessary requirement of facility construction or related excavation or landscaping, not require the landowner to obtain a surface mining permit if the coal is 5,000 tons or less, the coal is donated to a charitable organization, or if the landowner notifies Kentucky at the time the coal is first encountered (67 FR 70007). On January 16, 2003, OSM disapproved the retention of roads above highwalls ‘‘to support coal mining activities.’’ (68 FR 2196). Because Kentucky’s revisions at KRS 350.060(12) and (16), KRS 350.090(1), KRS 350.093(9), KRS 350.285, and KRS 350.445(3)(g) either eliminate provisions disapproved by OSM, or, in the case of the ‘‘two acre exemption,’’ eliminate a provision that had a repealed Federal counterpart, we find that the revisions do not render the Kentucky program less stringent than the provisions of SMCRA or less effective than the Federal regulations. The following revision was made to remove outdated language. Kentucky deleted the requirement at KRS 350.075(3) to submit proposed regulations pertaining to special remining permits to OSM on or before August 1, 1986. While there is no corresponding Federal provision, we are approving the revision because it is not inconsistent with the requirements of SMCRA and the Federal regulations. We announced receipt of the proposed amendment in the May 3, 2006, Federal Register (69 FR 55373), and in the same document invited public comment and provided an opportunity for a public hearing on the adequacy of the proposed amendment. The public comment period closed on June 2, 2006. We received five comments. IV. Summary and Disposition of Comments Public Comments We solicited public comments on May 3, 2006, and provided an opportunity for a public hearing on the amendment. We received three public comments. Because no one requested an opportunity to speak, a hearing was not held. E:\FR\FM\18SER1.SGM 18SER1 cprice-sewell on PROD1PC66 with RULES 54588 Federal Register / Vol. 71, No. 180 / Monday, September 18, 2006 / Rules and Regulations The Coal Operators and Associates (COA) supports the three major revisions proposed by Kentucky in this submission. Regarding the changes to the assessment notices and reports that Kentucky made in response to the Kentucky Supreme Court ruling regarding prepayment of civil penalties, the COA suggested that OSM approve the changes or if OSM finds this provision to be less effective than SMCRA, it file an appeal to the U.S. Circuit Court of Appeals. Regarding the provisions of Senate Bill 219 concerning an easement of necessity to conduct reclamation and Senate Bill 136 concerning the removal of outdated or previously disapproved language, the COA recommended approval, but also stated that it believes the former Secretary erred in disapproving several of the provisions that Kentucky has herein proposed to delete. However, the COA conceded that its opposition to the disapprovals is a moot issue ‘‘with the exception of our continued belief in the right of a state to be given latitude under the program to determine how best to handle specific situations that do not conflict with the overriding tenets of SMCRA itself.’’ For the reasons discussed in section III above, we are approving the provisions of Senate Bills 219 and 136. However, because Kentucky’s waiver of the prepayment of civil penalties is clearly less effective than the Federal regulations, it is not approvable by OSM, even though the Kentucky Supreme Court has ruled it unconstitutional. OSM’s mandate, as presented in 30 CFR 732.15(a), is to ensure that a State’s laws and regulations are in accordance with the provisions of SMCRA and consistent with the requirements of the Code of Federal Regulations. The Lexington Coal Company (LCC) commented on the provisions of Senate Bill 219 which creates an easement of necessity to conduct reclamation operations in the cases of bankrupt permittees. The LCC supports the provisions because ‘‘the law balances land owner rights with the public benefits of mine reclamation.’’ We agree with the commenter and as discussed in section III above, are approving the easement provisions. The Kentucky Resources Council (KRC) responded and had no comment on the provisions of Senate Bills 219 and 136. Pertaining to the prepayment of civil penalties, the KRC recommended that OSM address ‘‘whether and how other mechanisms, including partial federalization of the penalty portion of the state program, can be used to provide the same deterrent effect on frivolous appeals as was VerDate Aug<31>2005 15:15 Sep 15, 2006 Jkt 208001 intended by the prepayment requirement.’’ In response, we note that we must consider all possible options in order to address the problem created by the decision in Commonwealth of Kentucky v. Kentec, supra. Federal Agency Comments According to 30 CFR 732.17(h)(11)(i), on May 3, 2006, we solicited comments from various Federal agencies with an actual or potential interest in the March 28, 2006, Kentucky program amendment (Administrative Record No. KY–1644). We received one response from the U.S. Department of the Interior, Bureau of Land Management, who concurred with the revisions. under SMCRA unless the State program is approved by the Secretary. Similarly, 30 CFR 732.17(a) requires that any change of an approved State program be submitted to OSM for review as a program amendment. The Federal regulations at 30 CFR 732.17(g) prohibit any changes to approved State programs that are not approved by OSM. In the oversight of the Kentucky program, we will recognize only the statutes, regulations, and other materials we have approved, together with any consistent implementing policies, directives, and other materials. We will require Kentucky to enforce only approved provisions. VI. Procedural Determinations State Agency Comments According to 30 CFR 732.17(h)(4), on May 3, 2006, we solicited comments from the Kentucky State Historic Preservation Office (Administrative Record No. KY–1644) on the March 28, 2006, program amendment. Kentucky’s State Historic Preservation Office responded stating the amendment has no bearing on the treatment of archaeological or historic sites. Executive Order 12630—Takings This rule does not have takings implications. This determination is based on the analysis performed for the counterpart Federal regulation. Environmental Protection Agency (EPA) Pursuant to 30 CFR 732.17(h)(11)(ii), OSM is required to obtain the written concurrence of the EPA with respect to those provisions of the proposed program amendment that relate to air or water quality standards promulgated under the authority of the Clean Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq.). Because the provisions of this amendment do not relate to air or water quality standards, we did not request EPA’s concurrence. Executive Order 12988—Civil Justice Reform The Department of the Interior has conducted the reviews required by section 3 of Executive Order 12988 and has determined that this rule meets the applicable standards of subsections (a) and (b) of that section. However, these standards are not applicable to the actual language of State regulatory programs and program amendments because each program is drafted and promulgated by a specific State, not by OSM. Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and the Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State regulatory programs and program amendments submitted by the States must be based solely on a determination of whether the submittal is consistent with SMCRA and its implementing Federal regulations and whether the other requirements of 30 CFR parts 730, 731, and 732 have been met. V. OSM’s Decision Based on the above finding, we are approving, with an exception, the amendment as submitted by Kentucky on March 28, 2006. To implement this decision, we are amending the Federal regulations at 30 CFR Part 917 which codify decisions concerning the Kentucky program. We find that good cause exists under 5 U.S.C. 553(d)(3) to make this final rule effective immediately. Section 503(a) of SMCRA requires that Kentucky’s program demonstrate that it has the capability of carrying out the provisions of the Act and meeting its purposes. Making this regulation effective immediately will expedite that process. SMCRA requires consistency of State and Federal standards. Effect of OSM’s Decision Section 503 of SMCRA provides that a State may not exercise jurisdiction PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 Executive Order 12866—Regulatory Planning and Review This rule is exempted from review by the Office of Management and Budget under Executive Order 12866. Executive Order 13132—Federalism This rule does not have Federalism implications. SMCRA delineates the roles of the Federal and State governments with regard to the regulation of surface coal mining and reclamation operations. One of the purposes of SMCRA is to ‘‘establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining E:\FR\FM\18SER1.SGM 18SER1 Federal Register / Vol. 71, No. 180 / Monday, September 18, 2006 / Rules and Regulations operations.’’ Section 503(a)(1) of SMCRA requires that State laws regulating surface coal mining and reclamation operations be ‘‘in accordance with’’ the requirements of SMCRA, and section 503(a)(7) requires that State programs contain rules and regulations ‘‘consistent with’’ regulations issued by the Secretary pursuant to SMCRA. meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C)). Executive Order 13175—Consultation and Coordination With Indian Tribal Governments Regulatory Flexibility Act In accordance with Executive Order 13175, we have evaluated the potential effects of this rule on Federally recognized Indian tribes and have determined that the rule does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. The basis for this determination is our decision on a State regulatory program and does not involve a Federal regulation involving Indian lands. Executive Order 13211—Regulations That Significantly Affect the Supply, Distribution, or Use of Energy Paperwork Reduction Act This rule does not contain information collection requirements that require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 3507 et seq.). The Department of the Interior certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The State submittal, which is the subject of this rule, is based upon counterpart Federal regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. In making the determination as to whether this rule would have a significant economic impact, the Department relied upon the data and assumptions for the counterpart Federal regulations. Small Business Regulatory Enforcement Fairness Act On May 18, 2001, the President issued Executive Order 13211 which requires agencies to prepare a Statement of Energy Effects for a rule that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not expected to have a significant adverse effect on the supply, distribution, or use of energy, a Statement of Energy Effects is not required. National Environmental Policy Act This rule does not require an environmental impact statement because section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency decisions on proposed State regulatory program provisions do not constitute major Federal actions within the This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) Does not have an annual effect on the economy of $100 million; (b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based upon the fact that the State submittal which is the subject of this rule is based upon counterpart Federal regulations for which an analysis was prepared and a determination made that the Federal regulation was not considered a major rule. 54589 Unfunded Mandates This rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of $100 million or more in any given year. This determination is based upon the fact that the State submittal, which is the subject of this rule, is based upon counterpart Federal regulations for which an analysis was prepared and a determination made that the Federal regulation did not impose an unfunded mandate. List of Subjects in 30 CFR Part 917 Intergovernmental relations, Surface mining, Underground mining. Dated: August 10, 2006. Hugh V. Weaver, Acting Regional Director, Appalachian Region. For the reasons set out in the preamble, 30 CFR part 917 is amended as set forth below: I PART 917—KENTUCKY 1. The authority citation for part 917 continues to read as follows: I Authority: 30 U.S.C. 1201 et seq. 2. Section 917.12 is amended by adding paragraph (f) to read as follows: I § 917.12 State regulatory program and proposed program amendment provisions not approved. * * * * * (f) the changes to Kentucky’s Notice of Assessment of Civil Penalties and Penalty Assessment Conference Officer’s Report that specify that prepayment of a proposed assessment or penalty is no longer required are not approved. 3. Section 917.15 is amended in the table by adding a new entry in chronological order by the ‘‘Date of final publication’’ to read as follows: I § 917.15 Approval of Kentucky regulatory program amendments. * * * * * Date of final publication Citation/description * * March 28, 2006 ................................................. cprice-sewell on PROD1PC66 with RULES Original amendment submission date * * * September 18, 2006 ......................................... * * Easements of necessity, deletion of outdated language in KRS Chapter 350 [FR Doc. E6–15443 Filed 9–15–06; 8:45 am] BILLING CODE 4310–05–P VerDate Aug<31>2005 15:18 Sep 15, 2006 Jkt 208001 PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 E:\FR\FM\18SER1.SGM 18SER1

Agencies

[Federal Register Volume 71, Number 180 (Monday, September 18, 2006)]
[Rules and Regulations]
[Pages 54586-54589]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-15443]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 917

[KY-250-FOR]


Kentucky Regulatory Program

AGENCY: Office of Surface Mining Reclamation and Enforcement (OSM), 
Interior.

ACTION: Final rule; approval of amendment.

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SUMMARY: We are approving an amendment, with one exception, to the 
Kentucky regulatory program (the ``Kentucky program'') under the 
Surface Mining Control and Reclamation Act of 1977 (SMCRA or the Act). 
Kentucky submitted three separate items with revisions pertaining to 
prepayment of civil penalties, easements of necessity for reclamation 
on bankruptcy sites, and various statutes to eliminate outdated 
language.

DATES: Effective Date: September 18, 2006.

FOR FURTHER INFORMATION CONTACT: William J. Kovacic, Telephone: (859) 
260-8400. Telefax number: (859) 260-8410.

SUPPLEMENTARY INFORMATION: 

I. Background on the Kentucky Program
II. Submission of the Proposed Amendment
III. OSM's Findings
IV. Summary and Disposition of Comments
V. OSM's Decision
VI. Procedural Determinations

I. Background on the Kentucky Program

    Section 503(a) of the Act permits a State to assume primacy for the 
regulation of surface coal mining and reclamation operations on non-
Federal and non-Indian lands within its borders by demonstrating that 
its State program includes, among other things, ``a State law which 
provides for the regulation of surface coal mining and reclamation 
operations in accordance with the requirements of the Act * * *; and 
rules and regulations consistent with regulations issued by the 
Secretary pursuant to the Act.'' See 30 U.S.C. 1253(a)(1) and (7). On 
the basis of these criteria, the Secretary of the Interior 
conditionally approved the Kentucky program on May 18, 1982. You can 
find background information on the Kentucky program, including the 
Secretary's findings, the disposition of comments, and conditions of 
approval in the May 18, 1982, Federal Register (47 FR 21434). You can 
also find later actions concerning Kentucky's program and program 
amendments at 30 CFR 917.11, 917.12, 917.13, 917.15, 917.16 and 917.17.

II. Submission of the Proposed Amendment

    By letter dated March 28, 2006, Kentucky sent us a proposed 
amendment to its program under SMCRA (30 U.S.C. 1201 et seq.) at its 
own initiative ([KY-250-FOR], Administrative Record No. KY-1642). The 
full text of the program amendment is available for you to read at the 
location listed above under ADDRESSES.

III. OSM's Findings

    Following are the findings we made concerning the amendment under 
SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. Any 
revisions that we do not specifically discuss below concern 
nonsubstantive wording or editorial changes.
    The first change was mandated by the Supreme Court of Kentucky 
(Court) in the case of Commonwealth of Kentucky, Natural Resources and 
Environmental Protection Cabinet v. Kentec Coal Co., Inc., No. 2003-SC-
000622-DG. The Court issued an opinion on September 22, 2005, in which 
it found that the provisions of 405 KAR [Kentucky Administrative 
Regulations] 7:092 that required a corporate permittee to prepay an 
assessed civil penalty to get a due process hearing on the penalty 
amount was an unconstitutional violation of equal protection provisions 
of the State and Federal constitutions. The court also held that the 
assessment of the penalty against Kentec without prepayment and without 
consideration of the permittee's inability to pay was a violation of 
Section 2 of the Kentucky Constitution and an unreasonable and 
arbitrary exercise of the Kentucky Environmental and Public Protection 
Cabinet's (Cabinet) authority.
    The Department for Natural Resources' Division of Mine Reclamation 
and Enforcement, in response to this ruling, has altered the provisions 
on its notices of assessment of civil penalties to comply with the 
ruling. The Division uses the following statement of appeal rights on 
the assessment notices:

    Should you decide not to negotiate, you have three (3) options 
remaining to resolve the proposed assessment. You may (1) choose not 
to contest the amount of the proposed assessment or the violation in 
which case a final Order [order] of the Secretary will be entered.
    Note: If an administrative hearing as to the fact of the 
violation was properly requested under 405 KAR 7:092, the final 
order will only determine the amount of the penalty and not the fact 
of the violation; (2) request an assessment conference to contest 
the proposed assessment; Note: The Kentucky Bar Association has 
determined that the appearance of individual who is not a licensed 
attorney, on behalf of a third person, corporation or another 
entity, at a penalty assessment conference constitutes the 
unauthorized practice of law. Corporations or other entities must be 
represented by counsel at penalty assessment conferences. 
Individuals may represent themselves; or (3) request an 
administrative hearing instead of an assessment conference. See 405 
KAR 7:092, Section 6. Prepayment of the proposed assessment is no 
longer required. [emphasis added]

    The Office of Administrative Hearings has also altered language on 
the Penalty Assessment Conference Officer's Report that advises 
permittees of their rights to an administrative hearing. That language 
reads as follows:

    Any person issued a proposed penalty assessment may request an 
administrative hearing to contest the Conference Officer's 
recommended penalty or the fact of the violation or both by filing 
with the Office of Administrative Hearings, 35-36 Fountain Place, 
Frankfort, Kentucky 40601, a petition under Section 6 of 405 KAR 
7:092. The Cabinet may also request under Section 5 of 405 KAR 7:092 
an administrative hearing to contest the Conference Officer's 
recommended penalty. [Permittee] should take notice that given the 
decision by the Supreme Court of Kentucky in Environmental and 
Public Protection Cabinet v. Kentec, 2005 WL 2316191, ----S.W. 3d--
--, (2005), the provisions of 405 KAR 7:092, Section 6 (2)(b) 
requiring prepayment of the proposed penalty ARE NO LONGER IN EFFECT 
and [Permittee] DOES NOT need to prepay the recommended penalty 
amount in the event it decides to request a Formal Administrative 
Hearing.

[[Page 54587]]

    If a request for an administrative hearing is not filed with the 
Office of Administrative Hearings within thirty (30) days of mailing 
of this Report and Recommendation, the Secretary shall enter an 
order providing: (a) That [Permittee] has waived all rights to an 
administrative hearing on the amount of the proposed assessment; (b) 
that the fact of violation is deemed admitted; and (c) that the 
penalty assessment contained in this Report and Recommendation is 
deemed accepted and is due and payable to the Cabinet within thirty 
(30) days after the entry of the final order. If a petition 
requesting a hearing as to the fact of the violation has been timely 
filed pursuant to Section 7 of 405 KAR 7:092, the finding set forth 
in clause (b) of the preceding sentence shall be omitted from the 
Secretary's order and the penalty assessment contained in this 
Report and Recommendation shall be due and payable within thirty 
(30) days of the mailing of the final order affirming the fact of a 
violation. [emphasis added]

    This is the second time the Supreme Court of Kentucky has ruled 
that prepayment requirements used by the cabinet for due process 
hearings regarding surface mining violations are unconstitutional under 
the Kentucky Constitution. The ruling in Franklin v. Natural Resources 
and Environmental Protection Cabinet, 799 S.W.2d 1 (Ky. 1990) held that 
a similar prepayment requirement that applied to all persons violated 
the equal protection clauses of the State and Federal constitutions. 
Kentucky undertook a major revamp of its hearing procedures in response 
to that ruling and put the current hearings process in place. That 
process, insofar as the prepayment requirement is concerned, has now 
been found unconstitutional.
    The Supreme Court of Kentucky ruling notwithstanding, section 
518(c) of SMCRA and the Federal regulations require prepayment of a 
proposed penalty if a hearing is requested. The Federal regulations at 
30 CFR 845.19(a) clearly state:

    The person charged with the violation may contest the proposed 
penalty or the fact of the violation by submitting a petition and an 
amount equal to the proposed penalty or, if a conference has been 
held, the reassessed or confirmed penalty to the Office of Hearings 
and Appeals (to be held in escrow * * *) within 30 days from receipt 
of the proposed assessment or reassessment or 30 days from the date 
of service of the conference officer's action, whichever is later.

    Because Kentucky is waiving prepayment of the penalty specifically 
required by the Federal regulations, the Director finds that Kentucky's 
proposed revision is less stringent than section 518(c) of SMCRA and 
less effective than the Federal regulations at 30 CFR 845.19(a) and 
therefore cannot be approved.
    The second proposed change is Senate Bill 219, which creates an 
easement of necessity to conduct reclamation operations by entities who 
have assumed the reclamation obligations of a bankrupt permittee and 
where the rights of entry held by the permittee have been terminated. 
The terms only apply to those areas where only reclamation is being 
performed. It does not apply to areas where coal removal is planned by 
a successor to the permittee. The legislation calls for payment of a 
sum certain to rights holders and allows the parties to take any 
disputes about the sufficiency of the payment to court for an 
adjudication of an appropriate amount.
    There is no Federal counterpart to these provisions. Because they 
provide a method for ensuring reclamation that is in addition to the 
methods provided for in the Federal rule, the revisions Kentucky 
proposes in this amendment are approved in accordance with Section 
505(b) of SMCRA.
    The third proposed change is Senate Bill 136 which deletes certain 
language from Chapter 350 of the Kentucky Revised Statutes (KRS), the 
chapter containing the Kentucky surface mining laws. This bill 
eliminates language in: KRS 350.060(12) relating to the two-acre 
exemption and KRS 350.060(16) pertaining to permit renewal applications 
that were not timely filed; KRS 350.075(3) requiring the submission of 
regulations before August 1, 1986; KRS 350.090(1) relating to the 
exceptions for permit applications or renewals submitted in compliance 
with KRS 350.060(2) (note: we believe that the correct citation should 
be KRS 350.060(12)); KRS 350.093(9) dealing with bond coverage 
exceptions for third party actions; and KRS 350.445(3)(g) pertaining to 
roads above highwalls that ``support coal mining activities.'' Section 
KRS 350.285 relating to removal of coal on private lands is deleted in 
its entirety. Each of these amendments to statutes eliminates language 
from the chapter that is outdated, was disapproved by OSM in previous 
years, or was a counterpart to a repealed provision of SMCRA. The OSM 
actions to which Kentucky is responding are listed below.
    At section 201 of SMCRA, OSM repealed the two-acre exemption on May 
7, 1987. On May 10, 2000, OSM disapproved Kentucky's proposal at KRS 
350.060(16) to issue a notice of noncompliance, instead of an Imminent 
Harm Cessation Order, to a person who has not yet filed a renewal 
application when the permit has expired (65 FR 29949). Then, on 
September 6, 2000, OSM set aside these provisions (65 FR 53909). On 
February 12, 1990, OSM disapproved Kentucky's proposal at KRS 
350.093(6)(c) relieving a permittee of bond liability for actions of 
third parties beyond the permittee's control (55 FR 4866). Then, on 
June 5, 1990, OSM set aside these provisions (55 FR 22903). On November 
20, 2002, OSM disapproved Kentucky's proposal at 350.285 that removal 
of coal on private land, incidentally and as a necessary requirement of 
facility construction or related excavation or landscaping, not require 
the landowner to obtain a surface mining permit if the coal is 5,000 
tons or less, the coal is donated to a charitable organization, or if 
the landowner notifies Kentucky at the time the coal is first 
encountered (67 FR 70007). On January 16, 2003, OSM disapproved the 
retention of roads above highwalls ``to support coal mining 
activities.'' (68 FR 2196).
    Because Kentucky's revisions at KRS 350.060(12) and (16), KRS 
350.090(1), KRS 350.093(9), KRS 350.285, and KRS 350.445(3)(g) either 
eliminate provisions disapproved by OSM, or, in the case of the ``two 
acre exemption,'' eliminate a provision that had a repealed Federal 
counterpart, we find that the revisions do not render the Kentucky 
program less stringent than the provisions of SMCRA or less effective 
than the Federal regulations.
    The following revision was made to remove outdated language. 
Kentucky deleted the requirement at KRS 350.075(3) to submit proposed 
regulations pertaining to special remining permits to OSM on or before 
August 1, 1986. While there is no corresponding Federal provision, we 
are approving the revision because it is not inconsistent with the 
requirements of SMCRA and the Federal regulations.
    We announced receipt of the proposed amendment in the May 3, 2006, 
Federal Register (69 FR 55373), and in the same document invited public 
comment and provided an opportunity for a public hearing on the 
adequacy of the proposed amendment. The public comment period closed on 
June 2, 2006. We received five comments.

IV. Summary and Disposition of Comments

Public Comments

    We solicited public comments on May 3, 2006, and provided an 
opportunity for a public hearing on the amendment. We received three 
public comments. Because no one requested an opportunity to speak, a 
hearing was not held.

[[Page 54588]]

    The Coal Operators and Associates (COA) supports the three major 
revisions proposed by Kentucky in this submission. Regarding the 
changes to the assessment notices and reports that Kentucky made in 
response to the Kentucky Supreme Court ruling regarding prepayment of 
civil penalties, the COA suggested that OSM approve the changes or if 
OSM finds this provision to be less effective than SMCRA, it file an 
appeal to the U.S. Circuit Court of Appeals. Regarding the provisions 
of Senate Bill 219 concerning an easement of necessity to conduct 
reclamation and Senate Bill 136 concerning the removal of outdated or 
previously disapproved language, the COA recommended approval, but also 
stated that it believes the former Secretary erred in disapproving 
several of the provisions that Kentucky has herein proposed to delete. 
However, the COA conceded that its opposition to the disapprovals is a 
moot issue ``with the exception of our continued belief in the right of 
a state to be given latitude under the program to determine how best to 
handle specific situations that do not conflict with the overriding 
tenets of SMCRA itself.'' For the reasons discussed in section III 
above, we are approving the provisions of Senate Bills 219 and 136. 
However, because Kentucky's waiver of the prepayment of civil penalties 
is clearly less effective than the Federal regulations, it is not 
approvable by OSM, even though the Kentucky Supreme Court has ruled it 
unconstitutional. OSM's mandate, as presented in 30 CFR 732.15(a), is 
to ensure that a State's laws and regulations are in accordance with 
the provisions of SMCRA and consistent with the requirements of the 
Code of Federal Regulations.
    The Lexington Coal Company (LCC) commented on the provisions of 
Senate Bill 219 which creates an easement of necessity to conduct 
reclamation operations in the cases of bankrupt permittees. The LCC 
supports the provisions because ``the law balances land owner rights 
with the public benefits of mine reclamation.'' We agree with the 
commenter and as discussed in section III above, are approving the 
easement provisions.
    The Kentucky Resources Council (KRC) responded and had no comment 
on the provisions of Senate Bills 219 and 136. Pertaining to the 
prepayment of civil penalties, the KRC recommended that OSM address 
``whether and how other mechanisms, including partial federalization of 
the penalty portion of the state program, can be used to provide the 
same deterrent effect on frivolous appeals as was intended by the 
prepayment requirement.'' In response, we note that we must consider 
all possible options in order to address the problem created by the 
decision in Commonwealth of Kentucky v. Kentec, supra.

Federal Agency Comments

    According to 30 CFR 732.17(h)(11)(i), on May 3, 2006, we solicited 
comments from various Federal agencies with an actual or potential 
interest in the March 28, 2006, Kentucky program amendment 
(Administrative Record No. KY-1644). We received one response from the 
U.S. Department of the Interior, Bureau of Land Management, who 
concurred with the revisions.

State Agency Comments

    According to 30 CFR 732.17(h)(4), on May 3, 2006, we solicited 
comments from the Kentucky State Historic Preservation Office 
(Administrative Record No. KY-1644) on the March 28, 2006, program 
amendment. Kentucky's State Historic Preservation Office responded 
stating the amendment has no bearing on the treatment of archaeological 
or historic sites.

Environmental Protection Agency (EPA)

    Pursuant to 30 CFR 732.17(h)(11)(ii), OSM is required to obtain the 
written concurrence of the EPA with respect to those provisions of the 
proposed program amendment that relate to air or water quality 
standards promulgated under the authority of the Clean Water Act (33 
U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq.). 
Because the provisions of this amendment do not relate to air or water 
quality standards, we did not request EPA's concurrence.

V. OSM's Decision

    Based on the above finding, we are approving, with an exception, 
the amendment as submitted by Kentucky on March 28, 2006.
    To implement this decision, we are amending the Federal regulations 
at 30 CFR Part 917 which codify decisions concerning the Kentucky 
program. We find that good cause exists under 5 U.S.C. 553(d)(3) to 
make this final rule effective immediately. Section 503(a) of SMCRA 
requires that Kentucky's program demonstrate that it has the capability 
of carrying out the provisions of the Act and meeting its purposes. 
Making this regulation effective immediately will expedite that 
process. SMCRA requires consistency of State and Federal standards.

Effect of OSM's Decision

    Section 503 of SMCRA provides that a State may not exercise 
jurisdiction under SMCRA unless the State program is approved by the 
Secretary. Similarly, 30 CFR 732.17(a) requires that any change of an 
approved State program be submitted to OSM for review as a program 
amendment. The Federal regulations at 30 CFR 732.17(g) prohibit any 
changes to approved State programs that are not approved by OSM. In the 
oversight of the Kentucky program, we will recognize only the statutes, 
regulations, and other materials we have approved, together with any 
consistent implementing policies, directives, and other materials. We 
will require Kentucky to enforce only approved provisions.

VI. Procedural Determinations

Executive Order 12630--Takings

    This rule does not have takings implications. This determination is 
based on the analysis performed for the counterpart Federal regulation.

Executive Order 12866--Regulatory Planning and Review

    This rule is exempted from review by the Office of Management and 
Budget under Executive Order 12866.

Executive Order 12988--Civil Justice Reform

    The Department of the Interior has conducted the reviews required 
by section 3 of Executive Order 12988 and has determined that this rule 
meets the applicable standards of subsections (a) and (b) of that 
section. However, these standards are not applicable to the actual 
language of State regulatory programs and program amendments because 
each program is drafted and promulgated by a specific State, not by 
OSM. Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and 
the Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10), 
decisions on proposed State regulatory programs and program amendments 
submitted by the States must be based solely on a determination of 
whether the submittal is consistent with SMCRA and its implementing 
Federal regulations and whether the other requirements of 30 CFR parts 
730, 731, and 732 have been met.

Executive Order 13132--Federalism

    This rule does not have Federalism implications. SMCRA delineates 
the roles of the Federal and State governments with regard to the 
regulation of surface coal mining and reclamation operations. One of 
the purposes of SMCRA is to ``establish a nationwide program to protect 
society and the environment from the adverse effects of surface coal 
mining

[[Page 54589]]

operations.'' Section 503(a)(1) of SMCRA requires that State laws 
regulating surface coal mining and reclamation operations be ``in 
accordance with'' the requirements of SMCRA, and section 503(a)(7) 
requires that State programs contain rules and regulations ``consistent 
with'' regulations issued by the Secretary pursuant to SMCRA.

Executive Order 13175--Consultation and Coordination With Indian Tribal 
Governments

    In accordance with Executive Order 13175, we have evaluated the 
potential effects of this rule on Federally recognized Indian tribes 
and have determined that the rule does not have substantial direct 
effects on one or more Indian tribes, on the relationship between the 
Federal Government and Indian tribes, or on the distribution of power 
and responsibilities between the Federal Government and Indian tribes. 
The basis for this determination is our decision on a State regulatory 
program and does not involve a Federal regulation involving Indian 
lands.

Executive Order 13211--Regulations That Significantly Affect the 
Supply, Distribution, or Use of Energy

    On May 18, 2001, the President issued Executive Order 13211 which 
requires agencies to prepare a Statement of Energy Effects for a rule 
that is (1) considered significant under Executive Order 12866, and (2) 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. Because this rule is exempt from review 
under Executive Order 12866 and is not expected to have a significant 
adverse effect on the supply, distribution, or use of energy, a 
Statement of Energy Effects is not required.

National Environmental Policy Act

    This rule does not require an environmental impact statement 
because section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that 
agency decisions on proposed State regulatory program provisions do not 
constitute major Federal actions within the meaning of section 
102(2)(C) of the National Environmental Policy Act (42 U.S.C. 
4332(2)(C)).

Paperwork Reduction Act

    This rule does not contain information collection requirements that 
require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 
3507 et seq.).

Regulatory Flexibility Act

    The Department of the Interior certifies that this rule will not 
have a significant economic impact on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
The State submittal, which is the subject of this rule, is based upon 
counterpart Federal regulations for which an economic analysis was 
prepared and certification made that such regulations would not have a 
significant economic effect upon a substantial number of small 
entities. In making the determination as to whether this rule would 
have a significant economic impact, the Department relied upon the data 
and assumptions for the counterpart Federal regulations.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule: (a) Does not 
have an annual effect on the economy of $100 million; (b) Will not 
cause a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions; and (c) Does not have significant adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S.-based enterprises to compete with foreign-based 
enterprises. This determination is based upon the fact that the State 
submittal which is the subject of this rule is based upon counterpart 
Federal regulations for which an analysis was prepared and a 
determination made that the Federal regulation was not considered a 
major rule.

Unfunded Mandates

    This rule will not impose an unfunded mandate on State, local, or 
tribal governments or the private sector of $100 million or more in any 
given year. This determination is based upon the fact that the State 
submittal, which is the subject of this rule, is based upon counterpart 
Federal regulations for which an analysis was prepared and a 
determination made that the Federal regulation did not impose an 
unfunded mandate.

List of Subjects in 30 CFR Part 917

    Intergovernmental relations, Surface mining, Underground mining.

    Dated: August 10, 2006.
Hugh V. Weaver,
Acting Regional Director, Appalachian Region.

0
For the reasons set out in the preamble, 30 CFR part 917 is amended as 
set forth below:

PART 917--KENTUCKY

0
1. The authority citation for part 917 continues to read as follows:

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

0
2. Section 917.12 is amended by adding paragraph (f) to read as 
follows:


Sec.  917.12  State regulatory program and proposed program amendment 
provisions not approved.

* * * * *
    (f) the changes to Kentucky's Notice of Assessment of Civil 
Penalties and Penalty Assessment Conference Officer's Report that 
specify that prepayment of a proposed assessment or penalty is no 
longer required are not approved.

0
3. Section 917.15 is amended in the table by adding a new entry in 
chronological order by the ``Date of final publication'' to read as 
follows:


Sec.  917.15  Approval of Kentucky regulatory program amendments.

* * * * *

------------------------------------------------------------------------
     Original amendment           Date of final
       submission date             publication      Citation/description
------------------------------------------------------------------------
 
                              * * * * * * *
March 28, 2006..............  September 18, 2006..  Easements of
                                                     necessity, deletion
                                                     of outdated
                                                     language in KRS
                                                     Chapter 350
------------------------------------------------------------------------

[FR Doc. E6-15443 Filed 9-15-06; 8:45 am]
BILLING CODE 4310-05-P