Abandoned Mine Land Program, 35214-35267 [E8-13310]

Agencies

• DEPARTMENT OF THE INTERIOR
• Office of Surface Mining Reclamation and Enforcement
• Surface Mining Reclamation and Enforcement Office

[Federal Register Volume 73, Number 120 (Friday, June 20, 2008)]
[Proposed Rules]
[Pages 35214-35267]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-13310]



[[Page 35213]]

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Part II





Department of the Interior





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Office of Surface Mining Reclamation and Enforcement



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30 CFR Parts 700, 724, et al.



Abandoned Mine Land Program; Proposed Rule

Federal Register / Vol. 73, No. 120 / Friday, June 20, 2008 / 
Proposed Rules

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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 700, 724, 773, 785, 816, 817, 845, 846, 870, 872, 873, 
874, 875, 876, 879, 880, 882, 884, 885, 886, and 887

RIN 1029-AC56
[Docket ID: OSM-2008-0003]


Abandoned Mine Land Program

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

ACTION: Proposed rule.

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

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

ADDRESSES: You may submit comments by any of the following methods:
     Federal e-Rulemaking Portal: https://www.regulations.gov. 
The rule is listed under the agency name ``OFFICE OF SURFACE MINING 
RECLAMATION AND ENFORCEMENT.'' The proposed rule has been assigned 
Docket ID: OSM-2008-0003.
    If you would like to submit comments through the Federal e-
Rulemaking Portal, go to www.regulations.gov and do the following. 
Click on the ``Advanced Docket Search'' button on the right side of the 
screen. Type in the Docket ID OSM-2008-0003 and click the ``Submit'' 
button at the bottom of the page. The next screen will display the 
Docket Search Results for the rulemaking. If you click on OSM-2008-
0003, you can view the proposed rule and submit a comment. You can also 
view supporting material and any comments submitted by others.
     Mail/Hand-Delivery/Courier to: Office of Surface Mining 
Reclamation and Enforcement, Administrative Record, Room 252-SIB, 1951 
Constitution Avenue, NW., Washington, DC 20240. Please include the rule 
Docket ID (OSM-2008-0003) with your comment.
    We cannot ensure that comments received after the close of the 
comment period (see DATES) will be included in the docket for the 
rulemaking and considered. Comments sent to an address other than those 
listed above (see ADDRESSES) will not be included in the docket for the 
rulemaking.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see ``IV. Public Comment 
Procedures'' in the SUPPLEMENTARY INFORMATION section of this document.
    If you wish to comment on the information collection aspects of 
this proposed rule, you may submit your comments to the Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
Attention: Interior Desk Officer, via e-mail to OIRA_
DOCKET@omb.eop.gov, or via facsimile to 202-365-6566.

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

SUPPLEMENTARY INFORMATION:

I. Background on the Reclamation Fee and the Abandoned Mine Land 
Program
II. Outreach, Guidance, and Comments
III. Description of the Proposed Rule
IV. Public Comment Procedures
V. Procedural Determinations

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

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

    Title IV of the Surface Mining Control and Reclamation Act of 1977 
(SMCRA) created an AML reclamation program funded by a reclamation fee 
assessed on each ton of coal produced. The fees collected have been 
placed in the Fund. We, either directly or through grants to States and 
Indian tribes with approved AML reclamation plans under SMCRA, have 
been using money from the Fund primarily to reclaim lands and waters 
adversely impacted by mining conducted before the enactment of SMCRA 
and to mitigate the adverse impacts of mining on individuals and 
communities. Also, since Fiscal Year (FY) 1996, an amount equal to the 
interest earned by and paid to the Fund has been available for direct 
transfer to the UMWA CBF to defray the cost of providing health care 
benefits for certain retired coal miners and their dependents. See 
Energy Policy Act of 1992, Pub. L. 102-486, 106 Stat. 2776, 3056, Sec.  
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, 
Sec.  6003(a)). The Energy Policy Act of 1992 (Pub. L. 102-486, 106 
Stat. 2776, 3056, Sec.  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

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enactment of SMCRA on August 3, 1977, and for which there was no 
continuing reclamation responsibility under State or other Federal 
laws.
    SMCRA established a priority system for reclaiming coal problems. 
Before the 2006 amendments, the AML program had five priority levels, 
but reclamation was focused on eligible lands and waters that reflected 
the top three priorities. The first priority was ``the protection of 
public health, safety, general welfare, and property from extreme 
danger of adverse effects of coal mining practices.'' 30 U.S.C. 
1233(a)(1) (unamended). The second priority was ``the protection of 
public health, safety, and general welfare from adverse effects of coal 
mining practices.'' 30 U.S.C. 1233(a)(2) (unamended). The third 
priority was ``the restoration of land and water resources and the 
environment previously degraded by adverse effects of coal mining 
practices * * *.'' 30 U.S.C. 1233(a)(3) (unamended).
    As the law required, the Fund was divided into State or Tribal and 
Federal shares. Each State or Indian tribe with a Federally approved 
reclamation plan was entitled to receive 50 percent of the reclamation 
fees collected annually from coal operations conducted within its 
borders. The ``Secretary's share'' of the Fund consisted of the 
remaining 50 percent of the reclamation fees collected annually and all 
other receipts to the Fund. The Secretary's share was allocated into 
three shares as required by the 1990 amendments to SMCRA. See Omnibus 
Budget Reconciliation Act of 1990, Pub. L. 101-508, 104 Stat. 1388, 
Sec.  6004. First, we allocated 40% of the Secretary's share to 
``historic coal'' funds to increase reclamation grants to States and 
Indian tribes for coal reclamation. However, all the funds which were 
allocated may not have been appropriated. Second, we allocated 20% to 
the Rural Abandoned Mine Program (RAMP), operated by the Department of 
Agriculture, which was authorized to receive AML funding but has not 
been appropriated AML funds since the mid 1990's. Last, SMCRA required 
us to allocate 40% to ``Federal expense'' funds to provide grants to 
States for emergency programs that abate sudden dangers to public 
health or safety needing immediate attention, to increase reclamation 
grants in order to provide a minimum level of funding to State and 
Indian tribal programs with unreclaimed coal sites, to conduct 
reclamation of emergency and high-priority coal sites in areas not 
covered by State and Indian tribal programs, and to fund our operations 
that administer Title IV of SMCRA.
    States with an approved State coal regulatory program under Title V 
of SMCRA and with eligible coal mined lands may develop a State program 
for reclamation of abandoned mines. The Secretary may approve the State 
reclamation program and fund it. At the time the 2006 amendments were 
enacted, 23 States received annual AML grants to operate their approved 
reclamation programs. Three Indian tribes (the Navajo, Hopi and Crow 
Indian tribes) without approved regulatory programs have received 
grants for their approved reclamation programs as authorized by section 
405(k) of SMCRA.
    Before the 2006 amendments, only a State or Indian tribe was 
authorized to certify that it had addressed all known coal problems 
within the State or on Indian lands within its jurisdiction. These 
certified States and Indian tribes were able to use AML grant funds to 
abate the impacts of mineral mining and processing. SMCRA established 
the following priorities for the certified programs:
    (1) The protection of public health, safety, general welfare, and 
property from extreme danger of adverse effects from mineral mining and 
processing practices.
    (2) The protection of public health, safety, and general welfare 
from adverse effects of mineral mining and processing practices.
    (3) The restoration of land and water resources and the environment 
previously degraded by the adverse effects of mineral mining and 
processing practices.

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

    In contrast, uncertified States and Indian tribes could use AML 
grant funds on noncoal projects only to abate extreme dangers to public 
health, safety, general welfare, and property that arose from the 
adverse effects of mineral mining and processing and only at the 
request of the Governor or the governing body of the Indian tribe. 30 
U.S.C. 1239.
    The minimum program funding level provided additional grant funding 
to uncertified States and Indian tribes so that each reclamation 
program would receive enough annual AML funding to support a viable 
program. Before the 2006 amendments, SMCRA set the minimum program 
level at $2 million. 30 U.S.C. 1232(g)(8) (as amended by the Omnibus 
Budget Reconciliation Act of 1990, Pub. L. 101-508, Sec.  6004). 
However, appropriations have generally only funded the minimum program 
level at $1.5 million. See, e.g., Department of the Interior, 
Environment, and Related Agencies Appropriations Act, 2006, Pub. L. 
109-54, 119 Stat. 513 (2005) (``[G]rants to minimum program States will 
be $1,500,000 per State in fiscal year 2006.''). The Federal Fiscal 
Year runs from October 1 through September 30, so that FY 2006 is 
October 1, 2005, through September 30, 2006. SMCRA did not mandate a 
particular share of the Fund be used to support the minimum program, 
and we chose to use moneys from the Federal expenses share of the Fund 
for this purpose.
    Before the 2006 amendments, States and Indian tribes were allowed 
to deposit up to 10 percent of their State or Tribal share and 10 
percent of their historic coal share funds into set-aside accounts for 
either future coal reclamation or acid mine drainage treatment programs 
or both. 30 U.S.C. 1232(g)(6) (as amended by the Omnibus Budget 
Reconciliation Act of 1990, Pub. L. 101-508, Sec.  6004). In addition, 
uncertified States and Indian tribes were allowed to spend up to 30% of 
their funds on water supply projects that protect, repair, replace, 
construct, or enhance water supply facilities adversely affected by 
coal mining practices. 30 U.S.C. 1233(b)(1) (as amended by the Omnibus 
Budget Reconciliation Act of 1990, Pub. L. 101-508, Sec.  6005).

C. How did the 2006 amendments change these programs?

    The Surface Mining Control and Reclamation Act Amendments of 2006 
were signed into law as part of the Tax Relief and Health Care Act of 
2006, on December 20, 2006. Pub. L. 109-432. The 2006 amendments revise 
Title IV of SMCRA to make significant changes to the reclamation fee 
and the AML program. The changes are summarized as follows:
     OSM's reclamation fee collection authority is extended 
through September 30, 2021. The statutory fee rates are reduced by 10 
percent from the current levels for the period from October 1, 2007, 
through September 30, 2012. The fee rates are reduced by an additional 
10 percent from the original levels for the period from October 1,

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2012, through September 30, 2021. 30 U.S.C. 1232(a).
     The Fund allocation formula is changed. Beginning October 
1, 2007, certified States will no longer be eligible to receive State 
share funds. 30 U.S.C. 1231(f)(3)(B). Instead, amounts which would have 
been distributed as State share for fee collections for certified 
States will be distributed as historic coal funds. 30 U.S.C. 
1240a(h)(4). The RAMP share is eliminated. See 30 U.S.C. 1232(g). The 
historic coal allocation is further increased by the amount that 
previously was allocated to RAMP. 30 U.S.C. 1232(g)(5).
     Distributions of annual fee collections are made outside 
of the appropriations process. Once fully phased in, most fee 
collections will go to States and Indian tribes in annual mandatory 
distributions. Mandatory distributions from the Fund for uncertified 
States and Indian tribes include the State or Tribal share of all fees 
collected for coal produced the previous fiscal year, historic coal 
funds allocated from previous fiscal year production and also 
transferred from collections for certified States and Indian tribes for 
the previous fiscal year, and minimum program make up funding. 30 
U.S.C. 1232(g)(1), (g)(5), and (g)(8)(A). These mandatory distributions 
are phased in at 50 percent for FY 2008 and FY 2009, and 75 percent for 
FY 2010 and FY 2011; full funding will be reached in FY 2012. 30 U.S.C. 
1231(f)(5). After the end of the fee collection period, mandatory 
distributions of money from the Fund for FY 2023 and subsequent years 
will continue from balances in the Fund at the same level as FY 2022 to 
the extent funds are available. 30 U.S.C. 1231(f)(2)(B).
     Certified States and Indian tribes will receive mandatory 
distributions of Treasury funds in lieu of the State and Tribal share 
they will no longer be eligible to receive. 30 U.S.C. 1240a(h)(2). This 
mandatory distribution will be phased in at 25 percent for the first 
year, 50 percent for the second year, 75 percent for the third year, 
and fully distributed in the fourth year and thereafter. 30 U.S.C. 
1240a(h)(3)(B). These funds may be used to address coal problems that 
arise after certification and for other purposes.
     All States and Indian tribes with approved reclamation 
plans are paid amounts equal to their unappropriated prior balance of 
State and Tribal share funds from fees collected on coal produced 
before October 1, 2007. 30 U.S.C. 1240a(h)(1)(A)(i). Payments will be 
made in seven equal annual installments beginning in FY 2008. 30 U.S.C. 
1240a(h)(1)(C). Payments are mandatory distributions from Treasury 
funds. These payments must be used by uncertified States and Indian 
tribes for the purposes of section 403 of SMCRA. 30 U.S.C. 
1240a(h)(1)(D)(ii). These payments must be used by certified States and 
Indian tribes for purposes established by the State legislature or 
Tribal council, with priority given for addressing the impacts of 
mineral development. 30 U.S.C. 1240a(h)(1)(D)(i). Amounts in the Fund 
previously designated as State or Tribal share equal to the 
unappropriated balance payments will be transferred to historic coal 
funds as payments are made and used for reclamation grants in FY 2023 
and thereafter. 30 U.S.C. 1240a(h)(4).
     The minimum funding level for each State or Indian tribe 
with an approved reclamation plan and unfunded high priority coal 
reclamation problems is increased to $3 million. 30 U.S.C. 
1232(g)(8)(A). This funding is also a mandatory distribution. However, 
like the rest of the distributions from the Fund, these distributions 
will be phased in at 50 percent for FY 2008 and FY 2009, and 75 percent 
for FY 2010 and FY 2011; full funding will be reached in FY 2012. 30 
U.S.C. 1231(f)(5).
     The States of Tennessee and Missouri are each authorized 
to receive minimum program make up funding for their approved State 
reclamation programs even if they do not meet other requirements, such 
as having an approved coal regulatory program. 30 U.S.C. 1232(g)(8)(B).
     Other than for minimum program make up funding, 
expenditures from the Secretary's share must be appropriated by 
Congress. 30 U.S.C. 1231(d)(a). These uses for Federal expense funding 
include the emergency reclamation program, Federal reclamation 
programs, the Watershed Cooperative Agreement Program, and our AML 
administrative expenses.
     The limit on set aside funding for acid mine drainage 
(AMD) treatment programs is increased from 10 percent to 30 percent of 
State or Tribal share funds and historic coal funds. 30 U.S.C. 
1232(g)(6). In addition, States and Indian tribes are no longer 
required to get our approval for AMD plans. Id. Set aside funding for 
future coal reclamation is no longer authorized. Id. The previous cap 
of 30 percent for water supply restoration projects is eliminated. 30 
U.S.C. 1233(b).
     There are only three AML coal reclamation priorities 
because the previous priorities 4 and 5 have been removed. 30 U.S.C. 
1233(a). Also, ``general welfare'' is eliminated as a component of 
priorities 1 and 2. 30 U.S.C. 1233(a)(1) and (a)(2). OSM must now 
ensure strict compliance with the coal priorities until the State or 
Indian tribe is certified. 30 U.S.C. 1232(g)(2). States and Indian 
tribes may initiate Priority 3 reclamation projects before completing 
all Priority 1 and 2 projects only if the Priority 3 reclamation is 
performed in conjunction with a Priority 1 or 2 project. 30 U.S.C. 
1232(g)(7). Priority 3 lands and waters adjacent to past, present, and 
future Priority 1 and 2 project sites may be reclassified to Priority 1 
or 2. 30 U.S.C. 1233(a)(1)(B)(ii) and 1233(a)(2)(B)(ii).
     The previous prohibition on filing a lien against the 
beneficiary of an AML reclamation project if the person owned the 
surface before May 2, 1977, is eliminated. 30 U.S.C. 1238(a). The 
automatic lien waiver is now extended to all landowners who did not 
consent to, participate in, or exercise control over the mining 
operations that necessitated the reclamation.
     We must approve amendments to the AML inventory system. 30 
U.S.C. 1233(c).
     We may certify that a State or Indian tribe has completed 
coal reclamation without prior request from the State or Indian tribe. 
30 U.S.C. 1240a(a)(2).
     There is a cap of $490 million on total annual Treasury 
funding under this legislation. 30 U.S.C. 1232(i)(3)(A). This cap 
limits payments to States and Indian tribes under 30 U.S.C. 1240a(h) 
and the payments to the CBF, 1992 Benefit Plan, and the 1993 Benefit 
Plan, collectively known as the ``UMWA health care plans,'' under 30 
U.S.C. 1232(h) and 1232(i)(1).
     Subject to certain limitations, to the extent payments 
from premiums and other sources do not meet the financial needs of the 
UMWA health care plans, all estimated Fund interest earnings for each 
fiscal year must be transferred to these plans. 30 U.S.C. 1232(h). The 
unappropriated balance of the RAMP allocation as of December 20, 2006, 
is also available for transfer to the UMWA health care plans. 30 U.S.C. 
1232(h)(4)(B). These additional transfers to the CBF began in FY 2007, 
while transfers to the 1992 and 1993 Benefit Plans began in FY 2008. 30 
U.S.C. Sec.  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

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unappropriated amounts in the Treasury, subject to the overall $490 
million cap on all transfers from the Treasury under the 2006 
amendments. 30 U.S.C. 1232(i)(1)(B) and (i)(3)(A). All interest earned 
by the Fund before December 20, 2006, and not previously transferred to 
the CBF is set aside in a reserve fund that will be used to make 
payments to the UMWA health care plans in the event that their 
financial needs exceed the annual cap. 30 U.S.C. 1232(h)(4)(A).
     The 2006 amendments removed the expiration date for 
remining incentives initially authorized on October 24, 1992, when 
SMCRA was amended to include a new section 510(e) that created an 
exemption from the section 510(c) permit-block sanction for remining 
operations and a new section 515(b)(20)(B) that provided incentives for 
certain eligible remining operations in the form of reduced 
revegetation responsibility periods (2 years in the East and 5 years in 
the West). Energy Policy Act of 1992, Pub. L. 102-486, Sec.  2503. 
Until the 2006 amendments, those remining incentives had a statutorily 
defined expiration date of September 20, 2004, under 510(e) of SMCRA. 
Id.
     The 2006 amendments authorized us to develop regulations 
to promote remining of eligible land under section 404 in a manner that 
leverages the use of amounts from the Fund to achieve more reclamation. 
30 U.S.C. 1244
     Upon our approval, an Indian tribe may develop ``a tribal 
program under section 503 [of SMCRA] regulating in whole or in part 
surface coal mining and reclamation operations on reservation land 
under the jurisdiction of the Indian tribe using the procedures of 
section 504(e).'' 30 U.S.C. 1300(j).

II. Outreach, Guidance, and Comments

    Since the enactment of the 2006 amendments, we have notified 
potentially affected parties of the statutory amendments and solicited 
comments on issues related to the 2006 amendments. In January and 
September 2007, we notified all fee payers in writing of the fee rate 
changes. In January, February, and May 2007, we met with 
representatives of States and Indian tribes with approved reclamation 
programs at meetings hosted by the Interstate Mining Compact Commission 
(IMCC) and the National Association of Abandoned Mine Land Programs 
(NAAMLP) to notify the States and Indian tribes of the 2006 amendments' 
changes to SMCRA and to seek their input on the amendments. The IMCC 
and NAAMLP subsequently submitted joint written comments on specific 
provisions of the amendments. The IMCC and the NAAMLP, among others, 
raised the following major issues in their written comments.
    First, the commenters proposed that we allow individual States and 
Indian tribes to choose between receiving Treasury moneys under section 
411(h) through a traditional grant or by a ``direct payment 
mechanism.'' The commenters recognized that we might prefer to use 
grants to pay the section 411(h) funds rather than some type of 
``direct distribution of cash from the Treasury.'' However, the 
commenters noted that SMCRA does not directly address this issue and 
stated that the ``Secretary has the discretion to design a payment 
mechanism that meets the needs of the States and tribes.'' They urged 
us to develop some type of ``direct payment mechanism'' similar to that 
used to pay mineral royalties to States under the Mineral Leasing Act. 
The commenters stated that the State legislatures and Tribal councils 
will ensure States and Indian tribes use the funds legally and 
appropriately under SMCRA and State and Tribal contracting law and that 
Federal audits will scrutinize project selection and expenditures.
    Second, the commenters expressed concern that States and Indian 
tribes at the minimum program funding level would receive less than $3 
million until FY 2012. The commenters pointed out that uncertified 
States that receive funding at the ``minimum program'' level often have 
serious Priority 1 and 2 abandoned coal mine problems. They also 
discussed the fact that SMCRA historically guaranteed States and Indian 
tribes at least $2 million, but that this minimum funding level was 
rarely, if ever, met. The IMCC and NAAMLP asserted that the $3 million 
floor amount in section 402(g)(8)(A) only mandates that we cannot spend 
more than $3 million from the Federal expense funds. In addition, they 
contend that section 401(f)(5)(B) of SMCRA requires us to phase in only 
those Federal expense funds that we might provide in excess of the $3 
million floor level of funding provided for in section 402(g)(8)(A).
    Third, the commenters specifically objected to any limitations that 
would prohibit uncertified States and Indian tribes from using prior 
balance replacement funds from Treasury under section 411(h)(1) to 
abate high priority noncoal hazards or for placement in an AMD set 
aside account. The commenters expressed concern that requiring 
uncertified States and Indian tribes to use prior balance replacement 
funds for coal reclamation only would prevent those States and Indian 
tribes from using the moneys to reclaim equally or even more dangerous 
hazards associated with noncoal mining and hinder the treatment of AMD. 
In addition, they pointed out that the prior balance replacement funds 
are received in place of State or Tribal share funds from reclamation 
fees previously collected in each State and on Indian lands that 
Congress never appropriated for distribution to the respective States 
and Indian tribes. Because uncertified States and Indian tribes are 
permitted to use section 402(g)(1) funds for noncoal reclamation and 
for AMD set-aside funds, the commenters maintain that they should be 
allowed to use the prior balance replacement funds for the same 
purposes.
    The IMCC and NAAMLP also raised many other issues in their 
comments. They suggested that the first certified in lieu payments 
should be for FY 2009. They suggested that the terms ``adjacent'' and 
``in conjunction'' should be applied to AML Priority decisions using 
simple definitions without additional monetary or timing criteria. They 
urged OSM to make fund distributions as early in the FY as possible.
    We considered all the comments we received in developing this 
proposed rule.
    In order to facilitate distribution of funds for FY 2008, as 
required in the 2006 amendments, the Director of OSM issued written 
guidance in December, 2007. To the extent feasible, we have restated 
and expanded upon the content of that guidance in this proposed rule. 
We intend to make that December 2007 written guidance part of the 
docket for this rulemaking to be available for public inspection.
    The December 2007 written guidance was based in part on a December 
2007 memorandum opinion (M opinion), from the Department of the 
Interior, Office of the Solicitor, which analyzed three issues related 
to AML funding. See Funding to States and Indian Tribes Under the 
Surface Mining Control and Reclamation Act of 1977, as Amended by the 
Tax Relief and Health Care Act of 2006, M-37014 (December 5, 2007). In 
this M-opinion, the Office of the Solicitor advised us that:
     We are required to use grants to pay prior balance 
replacement funds and certified in lieu funds to eligible States and 
Indian tribes under sections 411(h)(1) and (h)(2) of SMCRA;
     Uncertified States and Indian tribes may not use prior 
balance replacement funds that they receive under section 411(h)(1) of 
SMCRA for noncoal

[[Page 35218]]

reclamation and for the AMD set aside authorized by section 402(g)(6); 
and
     The minimum program make up funds that eligible 
uncertified States and Indian tribes are entitled to receive under 
section 402(g)(8)(A) of SMCRA are subject to the four year phase-in 
provision of section 401(f)(5)(B).

III. Description of the Proposed Rule

    This proposed rulemaking seeks to revise our regulations to be 
consistent with all of the revisions to SMCRA contained in the 2006 
amendments, except for those provisions relating to the remining 
incentives provisions leveraging amounts from the Fund. The remining 
incentives provisions that leverage amounts from the Fund are the 
subject of a separate rulemaking published on May 1, 2008, at 73 FR 
24120.
    Generally, this rulemaking sets forth proposed standards and 
procedures for the coal reclamation fee, the Fund, and the AML program. 
This proposed rule includes extensive proposals for long term 
operations of the amended Title IV program, including provisions of the 
2006 amendments that will become effective at later dates. We are also 
taking advantage of this rulemaking opportunity to propose other 
changes that we believe are needed to update and clarify related Parts 
of our existing regulations. Throughout this proposed rule, the terms 
``money'' and ``moneys'' are interchangeable with the terms ``fund'' or 
``funds,'' but not with the term ``Fund,'' as defined in proposed Sec.  
700.5.
    The proposed changes generally fall into three categories:
     Align our existing regulations to be consistent with the 
2006 amendments to SMCRA as interpreted by the M-opinion;
     Use plain English to make the regulations easier to 
understand where no substantive change is intended; and
     Provide further guidance and clarification on 
implementation of the 2006 amendments where appropriate or needed.
    A detailed discussion of all of the proposed revisions follows.

Part 700--General

Definitions (Sec.  700.5)
    We are proposing to revise the definitions in Sec.  700.5 in 
several ways. First, we are proposing to add two new definitions 
(``AML'' and ``AML inventory''). The addition of these two definitions 
will improve the clarity of the proposed regulations contained in this 
rulemaking.
    Second, we are moving six existing definitions (``eligible lands 
and water,'' ``emergency,'' ``extreme danger,'' ``left or abandoned in 
either an unreclaimed or inadequately reclaimed condition,'' 
``project,'' and ``reclamation activity'') to Sec.  700.5 because these 
terms apply to all of the regulations in Chapter VII of Title 30 of the 
Code of Federal Regulations. These terms were previously codified in 
Sec.  870.5, which only applies to regulations related to AML 
reclamation fee collection. We are not proposing any substantive 
changes to the text of the definitions of these six terms. We are, 
however, correcting a mistake in the definition of eligible lands and 
water. The existing definition states, in part, that ``[f]ollowing 
certification of the completion of all known coal problems, eligible 
lands and water for noncoal reclamation purposes are those sites that 
meet the eligibility requirements specified'' in Sec.  874.14 of this 
chapter. The reference to Sec.  874.14 was incorrect. The correct 
reference is Sec.  875.14--Eligible lands and water subsequent to 
certification. In addition, we propose to reword two definitions 
(``eligible lands and water,'' and ``left or abandoned in either an 
unreclaimed or inadequately reclaimed condition'') using plain English.
    Third, to eliminate some redundancy between two definitions, we 
combined two definitions from Sec.  870.5 (``Indian reclamation 
program'' and ``State reclamation program'') into one definition in 
Sec.  700.5 (``reclamation program''). The substance of the definition 
did not change.
    Fourth, we moved the definition of ``expended'' from Sec.  870.5 to 
Sec.  700.5. In order to make the definition consistent with the entire 
chapter, we removed the existing limitation that it only applies to 
costs for reclamation.
    Last, we are proposing to expand the definition of ``Fund'' in 
Sec.  700.5. Previously, this term was defined slightly differently in 
both Sec. Sec.  700.5 and 870.5. Under the proposed rule, the 
definition of this term in Sec.  700.5 will be expanded to include 
additional information that was contained in Sec.  870.5 (``Abandoned 
Mine Reclamation Fund or Fund''). We believe this will eliminate any 
confusion that may have resulted from having different terminology and 
definitions to describe the same source of money in two Parts of the 
regulations.

Part 724--Requirements for Permits and Permit Processing

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

Part 773--Requirements for Permits and Permit Processing

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

Part 785--Requirements for Permits for Special Categories of Mining

Lands Eligible for Remining (Sec.  785.25(c))
    On October 24, 1992, SMCRA was amended to include a new section 
515(b)(20)(B) that provided incentives for certain eligible remining 
operations in the form of reduced revegetation responsibility periods 
(2 years in the East and 5 years in the West). Those remining 
incentives had a statutorily defined expiration date of September 30, 
2004, under section 510(e) of SMCRA. Because the 2006 amendments 
removed the expiration date, we propose to remove paragraph (c) to 
reflect the continued applicability of this section.

Part 816--Permanent Program Performance Standards--Surface Mining 
Activities

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

[[Page 35219]]

Part 817--Permanent Program Performance Standards--Underground Mining 
Activities

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

Part 845--Civil Penalties

Use of Civil Penalties for Reclamation (Sec.  845.21)
    We propose to revise Sec.  845.21(b)(1) to reflect our proposal to 
move the definition of ``emergency'' from Sec.  870.5 to Sec.  700.5 of 
this chapter.

Part 846--Individual Civil Penalties

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

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

    Part 870 describes the requirements and process for you, the coal 
mine operator, to report coal production and to pay the AML reclamation 
fee.
Scope (Sec.  870.1)
    We propose to add coal production reporting to this paragraph, 
because this is a major topic of this Part, and also to change the term 
``Abandoned Mine Reclamation Fund'' to ``Fund'' to be consistent with 
our definition in proposed Sec.  700.5.
Definitions (Sec.  870.5)
    We propose to correct a defect in the Part 870 definitions section. 
The current Sec.  870.1 specifies that the scope of Part 870 is limited 
to the procedures for the collection of reclamation fees, but existing 
Sec.  870.5 provides that the definitions apply to Parts 870 through 
888. In order to correct this issue, we propose to revise Sec.  870.5 
to state that the definitions apply only to Part 870 and to move 
definitions unrelated to Part 870 to the regulations where they are 
used. As such, we moved 17 existing definitions out of this section. In 
addition, one definition (``OSM'') was essentially a duplicate of a 
preexisting definition in Sec.  700.5; thus, we deleted that term from 
Sec.  870.5. Any substantive changes made to the definitions are 
described in the preamble related to the section where the definitions 
are moved.
    As described in the preamble discussion regarding proposed 
revisions to Sec.  700.5, six definitions from Sec.  870.5 that apply 
to multiple Parts of the chapter were moved to Sec.  700.5 (``eligible 
lands and water,'' ``emergency,'' ``extreme danger,'' ``left or 
abandoned in either an unreclaimed or inadequately reclaimed 
condition,'' ``project,'' and ``reclamation activity''). Two 
definitions from existing Sec.  870.5 (``Indian reclamation program'' 
and ``State reclamation program'') were combined into one definition 
(``reclamation program'') and were moved to proposed Sec.  700.5. In 
addition, because ``Fund'' or ``Abandoned Mine Reclamation Fund'' was 
defined in both existing Sec. Sec.  700.5 and 870.5, we deleted the 
definition in existing Sec.  870.5 and merged the two definitions into 
the one proposed at Sec.  700.5.
    Furthermore, we propose to move four definitions (``allocate,'' 
``Indian Abandoned Mine Reclamation Fund or Indian Fund,'' 
``reclamation plan,'' and ``State Abandoned Mine Reclamation Fund or 
State Fund'') to Part 872. One of these terms (``reclamation plan'') is 
defined again in Sec. Sec.  874.5, 875.5, 879.5, 880.5, 884.5, 885.5, 
886.5, and 887.5, but it is defined first and discussed in greater 
detail in the preamble discussion of Sec.  872.5. We also propose to 
move one definition (``qualified hydrologic unit'') to proposed Sec.  
876.12(c), and one definition (``permanent facility'') to proposed 
Sec.  879.11(a)(2). We propose to delete two definitions: one (``OSM'') 
which is already defined in existing Sec.  700.5; and one (``agency'') 
which is no longer used because of plain English rewording.
Information Collection (Sec.  870.10)
    We propose to reword this paragraph using plain English and to use 
the current format approved by the Office of Management and Budget 
(OMB). It describes OMB's approval of information collections in Part 
870, our use of that information, and the estimated reporting burden 
associated with those collections.
Fee Rates (Sec.  870.13)
    The 2006 amendments both extended the AML reclamation fee for 14 
years and provided for a two-step reduction in the amount of the fee 
rate. 30 U.S.C. 1232(a). We propose revising Sec.  870.13 to conform 
these regulations to the changes made by the 2006 amendments.
    First, we propose revising paragraph (a) of Sec.  870.13, which 
sets forth the reclamation fee rates per ton for coal produced by 
surface, underground, and lignite mining that were in effect from 
August 3, 1977, until September 30, 2007. We also propose to indicate 
that the rates expired on September 30, 2007, rather than September 30, 
2004, as formerly provided in the regulations. We propose to retain 
these expired rates for historical purposes and for use in future 
audits of production from the years in which those rates applied.
    We propose to delete the existing paragraph (b), which set out the 
procedure for us to set fees and the first fee rate in the event that 
the AML reclamation fee was not extended. As mentioned in the section 
of this preamble entitled ``Background on the Reclamation Fee and the 
Abandoned Mine Land Program'', Congress extended the fee before it 
expired. Thus, paragraph (b) never came into effect, and the fee 
extension in the 2006 amendments has made it obsolete.
    In its place, we propose to add a new paragraph (b), with a table 
that sets out the fee rates established by the 2006 amendments for coal 
produced in the period from October 1, 2007, through September 30, 
2012. The new fee rates per ton for surface and underground coal and 
lignite are each reduced by 10% from the previous rates. Similarly, we 
propose a new paragraph (c) with a table showing the fee rates reduced 
by an additional 10% of the original rates for coal produced in the 
period from October 1, 2012, through September 30, 2021.
    SMCRA and the 2006 amendments specifically prescribe fee rates for 
surface, underground, and lignite coal mining. As in the previous 
regulation, we propose to show rates for in situ mining, which means 
gasification of the coal at the mine. We continue to consider in situ 
mining to be covered by SMCRA because it is included in the definition 
of ``surface coal mining operations'' in section 701(28) of SMCRA and 
is therefore subject to the AML reclamation fee. As we have done in the 
past, when developing these proposed regulations, we classified in situ 
mining as underground mining (see Sec.  785.22 and Part 828). In these 
proposed regulations, we continue to

[[Page 35220]]

include a separate paragraph for the fee rates for in situ mining in 
order to clarify that the fees are set at the same rate as the fees for 
underground mining.
Determination of Percentage-Based Fees (Sec.  870.14)
    We propose rewording this paragraph using plain English. We also 
propose updating the reference in paragraph (b) to conform this 
provision to our proposed revisions of existing Sec.  870.15.
Reclamation Fee Payment (Sec.  870.15)
    We propose to break out the information from the existing Sec.  
870.15 into four separate sections to better organize this varied 
material and make it easier to find and understand. Paragraph (a) was 
reworded using plain English. We divided existing paragraph (b) into 3 
new paragraphs (b), (c), and (d) within proposed Sec.  870.15. This 
division separates these related, but distinct, topics for easier 
understanding. We also reworded these provisions using plain English. 
The remaining paragraphs (existing paragraphs 870.15(c) through (g)) 
were moved: existing paragraphs (c), (f), and (g) related to late 
payments were moved to proposed Sec.  870.21; existing paragraph (d) 
related to acceptable payment methods was moved to proposed Sec.  
870.16; existing paragraph (e) related to the consequences of 
noncompliance was moved to proposed Sec.  870.23.
Acceptable Payment Methods (Sec.  870.16)
    We propose to move the contents of existing Sec.  870.16 on 
production records to new Sec.  870.22 to better organize related 
topics. In turn, we propose to move the contents of existing Sec.  
870.15(d) to proposed Sec.  870.16, and reword those provisions using 
plain English. The proposed reorganization will keep information 
related to payment methods immediately after the fee payment 
information contained in Sec.  870.15.
Filing the OSM-1 Form (Sec.  870.17)
    This section proposes to expand on the existing Sec.  870.17, which 
covers the electronic filing of the coal reclamation fee report, known 
as the OSM-1 Form. We kept existing Sec.  870.17 and made it proposed 
Sec.  870.17(a). However, we added a paragraph (b) on filing a paper 
OSM-1 Form. Now, under the proposed rule, both options for filing the 
OSM-1 Form are listed together in the same section.
    In addition, section 402(c) of SMCRA requires that ``all operators 
of coal mine operations shall submit a statement of the amount of coal 
produced during the calendar quarter, the method of coal removal and 
the type of coal, the accuracy of which shall be sworn to by the 
operator and notarized.'' 30 U.S.C. 1232(c). Although SMCRA states that 
your OSM-1 Form is to be notarized, we believe that 28 U.S.C. 1746 
allows us to accept the OSM-1 Form along with a statement made under 
penalty of perjury that the information contained in the form is true 
and correct. Section 1746 provides that any matter required to be sworn 
may with like force be established by an unsworn written declaration 
consistent with the statute. Currently, if you file your report 
electronically on our Web site, we allow you to choose whether to keep 
a paper notarized copy or to make an unsworn statement using acceptable 
certification language that the system provides. See also 66 FR 28634. 
We are adding a similar unsworn statement option in paragraph (b) to 
reduce your burden if you choose to file your OSM-1 Form on paper.
General Rules for Calculating Excess Moisture (Sec.  870.18)
    The only change we propose to make in this section is to update a 
reference in paragraph (b) to reflect our proposed division of existing 
Sec.  870.15 into four sections. We are not considering any substantive 
changes to this section. We only intend to make those changes needed to 
correct any cross-references to other sections that may be altered by 
this rulemaking.
Late Payments (Sec.  870.21)
    We propose to move this information from the existing paragraphs 
Sec.  870.15(c), (f), and (g) to new Sec.  870.21 and reword these 
provisions using plain English. This reorganization will make proposed 
Sec.  870.15 more focused on the payment of the reclamation fee while 
grouping the specific information on the interest and penalties that we 
may charge on delinquent reclamation fees into this new section.
Maintaining Required Production Records (Sec.  870.22)
    We propose to move the information in the existing Sec.  870.16 to 
this new section for better organization because it allows us to group 
the payment and reporting sections together. We also propose to reword 
this section using plain English.
Consequences of Noncompliance (Sec.  870.23)
    We propose to move existing Sec.  870.15(e)(1)-(5) to this new 
section. We believe this section should be separated from the late 
payments section because it also applies to the failure to comply with 
the record maintenance provisions. In addition, we reworded this 
section using plain English.

Part 872--Moneys Available to Eligible States and Indian Tribes

    Our proposed revision of Part 872 describes the moneys that make up 
the Fund and other sources of money, including otherwise unappropriated 
funds in the U.S. Treasury as specified by the 2006 amendments, that 
are available to you, the eligible States and Indian Tribes with 
approved reclamation programs. This part also describes how we will 
convey these funds to you and what you may use them for.
    We are proposing regulations to address the changes to SMCRA that 
the 2006 amendments made. In addition, we are proposing to divide, 
remove, and renumber parts of existing Sec. Sec.  872.11(a) through 
872.11(c) and Sec.  872.12, change headings, add new sections and 
headings as appropriate, and more clearly describe the different types 
of funds available under this Part. We propose these additional changes 
to make the regulations easier to read and understand. Each proposed 
change is described below in more detail.
What does this Part do? (Sec.  872.1)
    In this section, we explain that the purpose of Part 872 is to set 
forth the responsibilities for administering reclamation programs and 
the procedures for managing funds used to finance these programs. We 
propose to change the section heading to ``What does this Part do?'', 
to reword the section using plain English, and to remove a reference to 
the Fund, instead referring more generically to ``funds.'' We believe 
removing the reference to the Fund recognizes that the 2006 amendments 
provide funds to you both from the Fund and from otherwise 
unappropriated funds of the U.S. Treasury. Throughout this Part, the 
terms ``money'' and ``moneys'' are interchangeable with the terms 
``fund'' or ``funds,'' but not with the term ``Fund,'' as defined in 
proposed Sec.  700.5.
Definitions (Sec.  872.5)
    We propose adding Sec.  872.5 to contain definitions pertinent to 
Part 872. This proposed section contains four definitions 
(``allocate,'' ``Indian Abandoned Mine Reclamation Fund or Indian 
Fund,'' ``reclamation plan,'' and ``State Abandoned Mine Reclamation 
Fund or State Fund'') moved from existing Sec.  870.5 and two new 
definitions (``award'' and ``distribute''). As described below, we also 
propose to

[[Page 35221]]

revise the existing definitions that were moved from Sec.  870.5 and to 
use plain English for these definitions.
    First, we propose to revise the definitions of ``Indian Abandoned 
Mine Reclamation Fund or Indian Fund'' and ``State Abandoned Mine 
Reclamation Fund or State Fund'' to include references to Parts 885 and 
886. Those Parts address grants for certified and uncertified States 
and Indian tribes.
    Second, we propose to revise the definition of ``reclamation plan'' 
to refer to States and Indian tribes and to have the same meaning as 
``State reclamation plan.'' As proposed, a ``reclamation plan or State 
reclamation plan'' means ``a plan that a State or Indian tribe 
submitted and that we approved under section 405 of SMCRA and Part 884 
of this subchapter.'' Our definition makes ``reclamation plan'' and 
``State reclamation plan'' interchangeable wherever those terms appear 
in this subchapter, recognizing that certain Parts still use ``State 
reclamation plan.'' We included a reference to section 405 of SMCRA to 
be consistent with its use of the term ``State reclamation plan'' as 
well. 30 U.S.C. 1235. Our proposed definition also is consistent with 
section 405(k) of SMCRA, which considers Indian tribes that have 
eligible lands under section 404 the same as States for the purposes of 
Title IV, except for the purposes of section 405(c). 30 U.S.C. 1235(k).
    Next, we propose two changes to the definition of ``allocate.'' The 
revised definition now states that ``allocate'' means ``to identify 
moneys in our records at the time they are received by the Fund.'' We 
also added a statement to clarify that the allocation process 
identifies the type of funds or the specific State or Indian tribal 
share.
    The definition of ``allocate'' is distinguishable from the new 
definitions of ``distribute'' and ``award'' that we propose to add. We 
define ``distribute'' as meaning ``to annually assign funds to a 
specific State or Indian tribe. After distribution, funds are available 
for award in a grant to that specific State or Indian tribe.'' We 
define ``award'' as meaning ``to approve our grant agreement 
authorizing you to draw down and expend program funds.''
    We use the terms ``allocate,'' ``distribute,'' and ``award'' 
throughout Part 872 to describe the process that we follow to make 
funds available to States and Indian tribes. Our accounting process 
first allocates funds to a particular share (State and Tribal shares or 
historic coal funds, for example) as soon as we receive the collected 
fees. Next, we distribute funds annually after the end of each Federal 
FY to specific States and Indian tribes according to the statutory 
provisions and the regulations governing those funds (for example, we 
will follow proposed Sec.  872.15 to distribute State share funds). 
After the funds are distributed, we award funds to States and Indian 
tribes in grants following the procedures of proposed Part 885 for 
certified States and Indian tribes and Part 886 for uncertified States 
and Indian tribes if and when they apply for such grants.
Information Collection (Sec.  872.10)
    We propose to update this section and reword it using plain 
English. It describes the OMB's approval of information collections in 
Part 872, our use of that information, and the estimated reporting 
burden associated with those collections.
Where do moneys in the Fund come from? (Sec.  872.11)
    This proposed section describes the funds we collect, recover, and 
otherwise receive that are the sources of revenue to the Fund. Here we 
propose to change the section heading to ``Where do moneys in the Fund 
come from?'' and to renumber existing Sec. Sec.  872.11(a) through 
(a)(6) as Sec. Sec.  872.11 through 872.11(f). We also reworded this 
section in plain English.
    In addition, we propose to remove language from existing Sec.  
872.11(a)(6) (now renumbered as proposed Sec.  872.11(f)) that makes 
interest earned after September 30, 1992, available for possible future 
transfer to the UMWA CBF under section 402(h) of SMCRA. The 2006 
amendments to SMCRA added new provisions related to our payments to the 
UMWA health care plans. However, this rulemaking does not address those 
changes.
    In addition, we propose to revise and reorganize the information in 
existing Sec. Sec.  872.11(b), including paragraphs (b)(1) through 
(b)(8), into various other sections. Existing Sec.  872.11(b)(1) is 
included in proposed Sec. Sec.  872.14 and 872.15 on State share funds 
and Sec.  886.20 on unused funds. Similarly, existing Sec.  
872.11(b)(2) is included in proposed Sec. Sec.  872.17 and 872.18 on 
Tribal share funds and Sec.  886.20 on unused funds. Existing Sec.  
872.11(b)(3) related to the RAMP program is moved to proposed Sec.  
872.20. Existing Sec.  872.11(b)(4) is included in proposed Sec. Sec.  
872.21 and 872.22 on historic coal funds. Existing Sec.  872.11(b)(5), 
as well as Sec. Sec.  872.11(b)(7) and (b)(8), are moved to Sec. Sec.  
872.24 and 872.25 on Federal expense funds. Existing Sec.  872.11(b)(6) 
is included in proposed Sec. Sec.  872.26 and 872.27 on minimum program 
makeup funds. We propose to move existing Sec.  872.11(c) to Sec.  
872.12(c). We propose to revise all these provisions to be consistent 
with the 2006 amendments and to reword them using plain English.
Where do moneys distributed from the Fund and other sources go? (Sec.  
872.12)
    We propose to change the heading of existing Sec.  872.12 to 
``Where do moneys distributed from the Fund and other sources go?'', 
and to reword the section using plain English. We also propose to add 
paragraph Sec.  872.12(c) for information moved from existing Sec.  
872.11(c) and to make a conforming change. The conforming change 
involves the requirement in existing Sec.  872.11(c) that States and 
Indian tribes use money deposited in their State or Indian Abandoned 
Mine Reclamation Funds to carry out their reclamation plans approved 
under Part 884 and projects approved under Part 888. On February 22, 
1995, we removed Part 888, which related to special Indian land 
procedures, and replaced it with Sec.  886.25, but did not change the 
cross-reference in existing Sec.  872.11(c). 60 FR 9974. In Sec.  
872.12(c), we now propose to replace that cross-reference with a 
reference to proposed Sec.  886.27, which is the proposed renumbering 
of existing Sec.  886.25.
What money does OSM distribute each year? (Sec.  872.13)
    We propose to add new Sec.  872.13 to describe how we distribute 
moneys each year to States and Indian tribes under SMCRA, as revised by 
the 2006 amendments. We address each type of funding elsewhere in this 
proposed rule in greater detail.
    Paragraph (a) lists the funds that we must distribute because they 
are not subject to prior Congressional appropriation. These 
distributions include State share (Sec.  872.14), Tribal share (Sec.  
872.17), historic coal (Sec.  872.21), minimum program make up (Sec.  
872.26), prior balance replacement (Sec.  872.29), and certified in 
lieu funds (Sec.  872.32).
    Paragraph (b) explains we use fee collections for coal produced in 
the previous Federal FY on a net cash basis to calculate the annual 
distribution. In other words, collections from the most recent FY 
include any adjustments to fees collected in previous years. In order 
to meet our customer service obligation, we must quickly determine how 
much money we collected each FY so that we can complete the mandatory 
distribution of AML funds to the States and Indian tribes as early in 
the FY as possible. When we make adjustments to the fees collected in 
an earlier FY, we must add or subtract the changes from

[[Page 35222]]

collections for the year in which we actually receive them because we 
cannot go back and revise the prior year fee collection amounts and 
distributions that we have already made to the States and Indian 
tribes.
    Paragraph (c) briefly states that we distribute Congressionally-
appropriated Federal expense funds when the appropriation becomes 
available.
    Last, paragraph (d) states that you may apply for funds any time 
after we distribute them. Certified States and Indian tribes will apply 
for grants using the procedures of Part 885 and uncertified States and 
Indian tribes will use the procedures of Part 886.
What are State share funds? (Sec.  872.14)
    We are proposing to remove and replace the existing Sec. Sec.  
872.11(b) and 872.11(b)(1) with Sec. Sec.  872.14 and 872.15. The new 
sections include language consistent with the 2006 amendments and are 
worded in plain English. Proposed Sec.  872.14 replaces the first and 
second sentences of existing Sec.  872.11(b)(1), which included 
provisions for what commonly have been called ``State share'' funds and 
that are provided for under section 402(g)(1)(A) of SMCRA. 
Specifically, this proposed provision explains that State share funds 
are 50 percent of the reclamation fees collected on coal mined in your 
State (excluding Indian lands) and allocated to you under section 
402(g)(1)(A) of SMCRA for coal produced in the previous fiscal year.
How does OSM distribute and award State share funds? (Sec.  872.15)
    Proposed Sec.  872.15 explains how we distribute and award State 
share funds to you if you are eligible to receive them. Section 
872.15(a)(1) replaces the third sentence of existing Sec.  872(b)(1) 
and states that to be eligible to receive State share funds you must 
have and maintain an approved reclamation plan. Section 872.15(a)(2) 
adds that to be eligible you cannot be certified under section 411(a) 
of SMCRA because under section 401(f)(3)(B) of SMCRA, as revised by the 
2006 amendments, certified States are ineligible to receive moneys from 
their State share of the Fund as of October 1, 2007. 30 U.S.C. 
1231(f)(3)(B).
    We did not distribute State share funds to certified States in the 
2008 distributions because section 401(f)(3)(B) of SMCRA, as revised by 
the 2006 amendments, prohibits us from distributing any moneys from the 
Fund to certified States beginning on October 1, 2007. So, consistent 
with SMCRA, proposed Sec.  872.13(a)(1) prohibits certified States from 
receiving any State share funds from the Fund after September 30, 2007.
    In proposed Sec.  872.15(b), we describe how we distribute and 
award State share funds if you meet the eligibility criteria of 
paragraph (a). In paragraph (b)(1), we include a table explaining the 
distributions, which will be phased-in under 401(d)(3) and (f) of 
SMCRA, as amended. 30 U.S.C. 1231(d)(3) and (f). Although section 
402(g)(1) of SMCRA generally requires us, acting on behalf of the 
Secretary, to distribute annually to an uncertified State 50 percent of 
the reclamation fees we collect in that State for the previous FY 
without prior Congressional appropriation, section 401(f)(5) of SMCRA, 
as added by the 2006 amendments, requires us to phase-in the mandatory 
distribution of these funds. 30 U.S.C. 1231(f)(5)(B). As a result, for 
FY 2008 and FY 2009, which begin on October 1, 2007, and October 1, 
2008, respectively, we will distribute to each uncertified State only 
50 percent of the State share allocated to it. Because the State share 
is 50 percent of the reclamation fees collected on production in that 
State, for FY 2008 and FY 2009, uncertified States will receive only 25 
percent of the reclamation fees collected on coal produced in their 
State (a 50 percent phase-in of the 50 percent in reclamation fees for 
the State share). Likewise, State shares that we distribute in FY 2010 
and FY 2011, which begin October 1, 2009, and October 1, 2010, 
respectively, will be 75 percent of the 50 percent share, which is 37.5 
percent of the reclamation fees collected on coal produced in that 
State. We will distribute to uncertified States their full 50 percent 
State share from the Fund each year beginning with FY 2012, which 
starts on October 1, 2011, and lasting through FY 2022, which ends on 
September 30, 2022. In FY 2023, we expect to distribute to uncertified 
States all moneys remaining in their State share of the Fund.
    Proposed Sec.  872.15(b)(2) explains that we will continue to award 
funds under this paragraph in grants in accordance with Part 886. 
Awarding State share funds in grants is consistent with section 
402(g)(1)(C) of SMCRA. 30 U.S.C. 1232(g)(1)(C). In addition, we note 
that many States were awarded State share funds in prior year grants, 
before the 2006 amendments. Those funds would continue to be subject to 
the provisions of Part 886.
What may States use State share funds for? (Sec.  872.16)
    Proposed Sec.  872.16 describes what you, the uncertified State, 
may use your State share grant funds for. You may only use them for the 
following purposes: (1) To reclaim coal lands and waters under Sec.  
874.12; (2) to restore water supplies under Sec.  874.14; (3) to 
reclaim noncoal lands and waters under Sec.  875.12 as requested by the 
Governor under s