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 setaside 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, M37014 (December 5, 2007). In this Mopinion, the Office of the Solicitor advised us that:

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:

A detailed discussion of all of the proposed revisions follows. Part 700General

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. 875.14Eligible 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 724Requirements 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 773Requirements 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) permitblock 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 785Requirements 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 816Permanent Program Performance StandardsSurface 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 817Permanent Program Performance StandardsUnderground 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 845Civil 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 846Individual 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 870Abandoned Mine Reclamation FundFee 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 twostep 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 PercentageBased 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 OSM1 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 OSM1 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 OSM1 Form. Now, under the proposed rule, both options for filing the OSM1 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 OSM1 Form is to be notarized, we believe that 28 U.S.C. 1746 allows us to accept the OSM1 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 OSM1 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 crossreferences 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 872Moneys 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 crossreference in existing Sec. 872.11(c). 60 FR 9974. In Sec. 872.12(c), we now propose to replace that crossreference 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 phasedin 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 phasein 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 phasein 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 section 409(c) of SMCRA; (4) to deposit into an acid mine drainage abatement and treatment fund under Part 876; and (5) to acquire land under Sec. 879.11.

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

What are Tribal share funds? (Sec. 872.17)

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

In proposed Sec. 872.17 we explain that ``Tribal share funds'' are moneys we distribute to you each year from your Tribal share of the Fund. Your Tribal share of the Fund is 50 percent of the reclamation fees we collect and allocate under 402(g)(1)(A) of SMCRA to you, the Indian tribe(s), in the Fund for coal produced in the previous fiscal year from the Indian lands in which you have an interest.
How does OSM distribute and award Tribal share funds? (Sec. 872.18)

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

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

At this time, only the Crow, Hopi, and Navajo Indian tribes have approved reclamation programs and have Tribal share funds. All three of those Indian tribes are certified under section 411(a) of SMCRA. Section 405(k) of SMCRA generally requires us to consider Indian tribes ``as a `State' for the purposes of this title * * *.'' 30 U.S.C. 1235(k). So, because section 405(k) considers the Crow, Hopi, and Navajo Indian tribes as States for the purposes of Title IV and because they are certified under section 411(a), we must apply section 401(f)(3)(B) to those three Indian tribes. The Hopi and Navajo Indian tribes were certified before October 1, 2007, and they cannot receive Tribal share funds as of that date. 30 U.S.C. 1231(f)(3)(B), 1235(k). Therefore, we did not include Tribal share funds in their 2008 distributions. The Crow Indian tribe was uncertified as of December 17, 2007, which was when we made the 2008 AML distribution, so it received Tribal share funds. Since then, however, the Crow Indian tribe certified under section 411(a)(1) of SMCRA (73 FR 17247, April 1, 2008), so it cannot receive any additional Tribal share funds. Presently, there are no uncertified Indian tribes. However, at some future date, it is possible an uncertified Indian tribe could qualify for Tribal share funds.
What may Indian tribes use Tribal share funds for? (Sec. 872.19)

Proposed Sec. 872.19 describes what you, the uncertified Indian tribe, may use your Tribal share grant funds for. You may only use Tribal share funds for the following purposes: (1) To reclaim coal lands and waters under 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 governing body of the Indian tribe according to section 409(c) of SMCRA; (4) to deposit into an acid mine drainage abatement and treatment fund under Part 876; and (5) to acquire land under Sec. 879.11. Our explanation in the preamble for Sec. 872.16, which allows States to use State share funds for noncoal reclamation, also applies to Indian tribes' use of Tribal share funds. Therefore, we will not repeat it here.
What will OSM do with unappropriated AML funds currently allocated to the Rural Abandoned Mine Program? (Sec. 872.20)

We are proposing to renumber existing Sec. 872.11(b)(3) as Sec. 872.20 under the new heading ``What will OSM do with unap

FOR FURTHER INFORMATION CONTACT Danny Lytton, Chief, Reclamation Support Division, 1951 Constitution Ave., NW., Washington, DC 20240; Telephone: 2022082788; Email: dlytton@osmre.gov.