August 28, 2008

Brent Wahlquist

Director

Office of Surface Mining

1951 Constitution Avenue, N.W.

Washington, DC 20240

Re. Docket ID Number OSM-2008-0003

Dear Director Wahlquist:

This letter represents the comments of the National Association of
Abandoned Mine Land Programs (NAAMLP) and the Interstate Mining Compact
Commission (IMCC) regarding a rule proposed by the Office of Surface
Mining (OSM) to implement the provisions of the Surface Mining Control
and Reclamation Act (SMCRA) Amendments of 2006 (P.L. 109-432). The rule
is being promulgated to implement the provisions of the Tax Relief and
Health Care Act of 2006 (2006 Amendments), which reauthorized the
abandoned mine land (AML) program under SMCRA. The rule was published on
June 20, 2008 at 73 Fed. Reg. 35214, and pursuant to our request, the
comment period was extended to August 29.

Based on the significant differences of opinion that we have with OSM
concerning many of the issues raised in the proposed rule, the member
States and Tribes of the NAAMLP and IMCC request that OSM withdraw the
rulemaking. The basis for our position is explained in detail in the
attached comments. However, should OSM proceed with the proposed rule,
the agency should seriously consider and respond to the concerns and
comments expressed herein. Frankly, given the gravity of these comments,
we do not believe that OSM should proceed with the rulemaking.
Nonetheless, in the spirit of cooperative federalism, we offer up these
comments with the expectation that OSM will reconsider the wisdom of
proceeding forward and/or undertake major restructuring and modification
of the final rule.

**[GENERAL COMMENTS ON THE RULE]{.underline}**

OSM's proposed rule is loosely based on draft proposed rules that were
provided to us by OSM in April of last year. We submitted comments on
those draft rules on May 21, 2007 and we request that those comments be
incorporated by reference as part of this rulemaking. While OSM
references these comments in the preamble to the proposed rules at page
35217 and summarizes the main points raised by our comments, the agency
did not specifically respond to the concerns raised by the States and
Tribes, so many of them are reiterated in these comments. We trust that
OSM will specifically address these concerns in the final rules.

In general, we believe that the proposed rule is a significant and
detrimental departure from the cooperative spirit between OSM and the
States and Tribes that has existed in the AML program for the last 25
years. This proposed rule, if finalized, will likely guide the
administration of the AML program through the remainder of its
existence. In that regard, we anticipated the proposed rule would foster
the relationship of mutual trust that the States, Tribes and OSM have
built over the years -- recognizing the States and Tribes as partners
with OSM in Title IV reclamation, and promoting that relationship into
the future of the program.

Instead, the proposed rule has a generally heavy-handed tone and is
replete with contrived obstacles that treat the States and Tribes more
as adversaries than partners. As evidence of this we point to the OSM
decision in the proposed rule denying the States and Tribes the ability
to use prior balance replacement funds for noncoal reclamation and for
the AMD set-aside program. In this instance OSM takes a very narrow,
literal interpretation of section 411(h) (bolstered by a misguided
Solicitor's opinion) in order to declare that noncoal reclamation and
the AMD set-aside are in no way connected to the priorities under
section 403. However, elsewhere in the rule, OSM weaves a tortuous,
convoluted, tenuous logic in order to constrain the term "in conjunction
with" merely to make it more difficult for the States and Tribes to
conduct priority 3 work while doing higher priority work at the same
time.

The point we are making is that OSM seems to take whatever approach is
necessary in this proposed rule to limit the flexibility of the States
and Tribes to conduct AML reclamation on the sites most important to
them within their respective borders. These and other interpretations in
the proposed rule indicate to us that OSM appears to be obsessed by the
language in the 2006 Amendments requiring the Secretary "...to ensure
strict compliance by the States and Indian Tribes with the priorities
described in section 403(a)..." This passage seems to be the guiding
principle behind most of the decisions OSM had to make when formulating
this proposed rule.

 

On page 35231 of the proposed rule OSM justifies its \"enhanced
oversight responsibilities\" by pointing to several mechanisms in the
2006 Amendments that guide the use of AML funds toward high priority
reclamation. OSM uses these as evidence that Congress meant for them to
essentially do anything and everything possible to limit work on
priority 3 projects. We believe that the structural changes Congress
made to the funding of AML programs (i.e. directing more money to the
historic production share and eliminating the "general welfare"
category) is as far as Congress intended to limit the States\' and
Tribes' work. We think OSM is merely seizing any justification it can to
further limit the States and Tribes beyond what Congress intended.

However, we believe that adequate mechanisms currently exist in the
oversight process that enable OSM to guarantee that the States and
Tribes do not abandon high priority work (and thereby fully comply with
the priorities described in section 403) simply for the sake of
conducting noncoal and priority 3 reclamation work. Indeed, the data in
AMLIS supports this observation. It shows that the nationwide funded
noncoal and priority 3 work conducted by the States and Tribes since the
beginning of the AML program is minimal compared to the funded high
priority coal work (likely less than 20% of total Fund expenditures),
and this was done through cooperation between OSM and the States and
Tribes. We therefore believe that OSM is merely jumping at ghosts by
installing mechanisms in the proposed rule to prevent the perceived fear
that States and Tribes will divert funding from P1 and P2 projects to
noncoal and P3 sites. They are also departing from the long established
reliance on oversight as the tool of choice to monitor and guide State
and Tribal programs in favor of a command and control approach. Because
of that, the proposed rule has the tone of a Title V rule meant to
achieve compliance from regulated entities rather than a Title IV rule
[promoting]{.underline} reclamation with partners.

There is also an implied sense in the proposed rule that the States and
Tribes should be satisfied and comfortable with OSM's interpretation of
the 2006 Amendments contained in the rules given the significant
increases in grant money provided under the new law. While the States
and Tribes are very appreciative of Congressional action to return past
unappropriated and current moneys to us, our focus has always been to
use whatever moneys we receive to address public health and safety
issues arising from the hazards of abandoned mines. For us, it is not
just about the money -- it's about programs and partnerships that work
effectively and efficiently to accomplish the greatest amount of AML
remediation possible. As a result, our comments regarding the proposed
rule are intended to restore and structure the AML program in such a
manner that it can make a difference for our citizens and the
environment.

There are several other over-arching issues that we want to address
before launching into the specifics of the proposed rule. It is these
same issues that serve as the basis for our recommendation that the
proposed rule be withdrawn.

**[Use of Unappropriated State and Tribal Share Balances for Noncoal
Reclamation and AMD Set-Aside]{.underline}**

Since the inception of SMCRA in 1977 and the approval of State/Tribal
AML programs in the early 1980's, the States and Tribes have been
allowed to use their State and Tribal share distributions under section
402(g)(1) of the AML Trust Fund for high priority noncoal reclamation
projects pursuant to section 409 of SMCRA and to calculate the set-aside
for acid mine drainage (AMD) projects. Under the new amendments, states
and tribes will receive their unappropriated balances in seven equal
payments beginning in FY 2008. In its proposed rule, OSM has stated that
these "prior balance replacement" funds cannot be used for noncoal
reclamation or for the 30% AMD set-aside. OSM also initially stated that
the historic coal distribution to uncertified States and Tribes would
also not be available for noncoal reclamation, but the agency appears to
have relented on this issue and will now allow these moneys to be used
for both noncoal reclamation and the 30% AMD set-aside. (See section
872.23 (c) and (d)). In this regard, we agree with OSM's statement of
page 35224 that the "strict compliance" language in section 402(g)(2) of
SMCRA does not impact the authorization in section 409(b) of the Act
that allows historic coal funds to be expended on noncoal reclamation.
In fact, we believe that this same reasoning justifies the expenditure
of prior balance replacement funds for both noncoal work and the AMD
set-aside.

With regard to the unappropriated State and Tribal share balances that
will be distributed pursuant to Section 411(h)(1) of the 2006
Amendments, the States and Tribes assert that these moneys should also
be available for noncoal reclamation under section 409 and for the 30%
AMD set-aside. There is nothing in the new law that would preclude this
interpretation. Policy and practice over the past 30 years confirm it.
The unappropriated State and Tribal share balances consist of past
moneys collected from coal producers in these States and Tribes that
were never distributed due to restricted and under-funded
appropriations. This money has always been "colored" as State/Tribal
share money, available for expenditure in accordance with the provisions
of SMCRA and now 30 years of experience. The fact that the money is
being paid out of Treasury funds does not change the "color" or
operation of that money -- it has been and will always be State/Tribal
share money allocated pursuant to section 402(g)(1) of SMCRA.

Section 411(h)(1)(A)(i) specifically states that "the Secretary shall
make payments to States or Indian tribes for the **[amount
due]{.underline}** for the aggregate unappropriated amount allocated to
the State or Indian tribe under subparagraph (A) or (B) of section
402(g)(1)." (*Emphasis added*) This term if further defined in section
411(h)(1)(B) as "the unappropriated amount allocated to a State or
Indian tribe before October 1, 2007 under subparagraph (A) or (B) or
section 402(g)(1)." There can be no question that these "prior balance
replacement" moneys have been, and continue to be, State and Tribal
share moneys allocated under Section 402(g)(1) of the Act, and are
therefore available for placement into the AMD set-aside and for noncoal
reclamation work. The fact that these moneys are paid from the U.S.
Treasury does not vitiate how these moneys were originally intended to
be used.

OSM's "fundamental distinction" argument and new interpretation of SMCRA
based on the 2006 Amendments is without support in the law when read as
a whole. In interpreting the meaning of section 411, the entire statute
must be read in context. Section 403 (which OSM points to) is modified
by Section 409, which provides for the expenditure of AML funds at any
priority 1 or 2 site, regardless of the commodity that was mined.
Section 409(b) indicates that the 50% State or Tribal share (from
402(g)(1) or (g)(2)) and the historic production distribution
(402(g)(5)) can be used for noncoal reclamation. If Congress had
intended to limit the use of the unappropriated State/Tribal share
balances (or historic production distributions) that are now finally
being returned pursuant to section 411(h)(1), it could have easily done
so. However, no changes were made in section 411 to accomplish this. Nor
was Section 409 amended in any way.

OSM's primary argument for why prior balance replacement funds cannot be
used for noncoal reclamation and AMD set-aside is based on its view that
there is a "fundamental distinction" between the prior balance
replacement funds (which are paid from U.S. Treasury funds) and section
402(g) moneys distributed from the Fund. OSM asserts that since these
prior balance replacement funds have not been allocated under section
402(g)(1) but are paid from the Treasury, they have changed "color" and
cannot operate in the same fashion as before. However, Congress did
nothing to change the operation of those moneys -- it only designated a
different funding source to re-pay these obligations to the States and
Tribes. The moneys have always been designated as State and Tribal share
moneys pursuant to section 402(g). Had not this section of the Act been
in existence in the first place, the moneys would have never existed.

In the end, the argument is NOT about the source of the funds -- it's
about the basis of the funds in the first place. Congress demonstrated
no intent whatsoever to change the original designation and "color" of
these moneys. Their only challenge was to find a funding source to make
the payments due and owing to the States and Tribes, and they chose U.S.
Treasury funds for this purpose. In addition, Congress also chose to
utilize this new funding source for paying these balances so as to
preserve a balance in the AML Trust Fund to: 1) generate continuing
interest for the UMW Combined Benefit Trust Fund and 2) insure that
there was a reserve of funding left after fee collection terminates in
2021 to address any residual high priority historic coal problems. There
was never an intent to condition or restrict the previously approved
mechanisms and procedures that States and Tribes were using to apply
these moneys to high priority coal and noncoal problems. The Solicitor's
M-Opinion makes much of the fact that these moneys are to be paid from
the general Treasury and not from the AML Trust Fund. But there were
good reasons for that, as noted above, none of which include or even
imply a re-designation or re-coloring of those moneys as anything other
than what is due and owing to the states under Section 402(g)(1) and
(2). To change the rules based on such a clever invention is
inappropriate and inconsistent with law.

OSM's own reasoning in the proposed rule conflicts with their argument
that prior balance replacement funds cannot be used for noncoal
reclamation and the AMD set-aside. On page 35231, OSM notes that "prior
balance replacement funds may be used for Priority 3 reclamation because
they are specifically directed to be used for the purposes of section
403 of SMCRA." The majority, if not all, acid mine drainage projects are
classified as priority 3 projects since they involve "the restoration of
land and water resources and the environment that have been degraded by
the adverse effects of coal mining practices." Thus, OSM is essentially
authorizing the use of prior balance replacement funds for current AMD
work on the one hand, while denying the use of these funds for future
AMD work on the other. This nonsensical approach does not hold water and
must be corrected by allowing the use of prior balance replacement funds
for BOTH the AMD set-aside and noncoal reclamation (since the argument
holds true for both issues).

We also want to note here that, while Congress (and thus OSM) uses the
term "purposes" with respect to section 403 of SMCRA, this section of
the statute refers to "priorities" only. The "purposes" of the AML
program are clearly spelled out in section 401 of SMCRA and that section
specifically recognizes and authorizes noncoal reclamation work under
section 409 and AMD work under section 403.

OSM can point to no legislative history to support their argument about
a fundamental distinction, other than the new funding source in section
411(h)(1). To the extent there is any legislative intent that has been
expressed about how these prior balance replacement funds can be used,
it is found in recent congressional communications to the Secretary of
the Interior and to OSM. In a letter dated June 6, 2007 (copy attached),
six western Senators expressed their view that "a fair reading of the
recently-enacted amendments allows the use of AML funds, including
historic and unappropriated balance allocations, for high priority
non-coal sites . . . ." In their letter, the Senators re-iterate that
the 2006 Amendments to SMCRA did not amend section 409, thereby allowing
it to operate as it has in the past.

As you know, there has also been legislation (S. 2779 and H.R. 5661)
introduced in this session of Congress to specifically clarify
Congressional intent that prior balance replacement funds are available
for noncoal reclamation work. The Public Lands and Forests Subcommittee
of the Senate Energy and Natural Resources Committee held a legislative
hearing on July 9 to receive testimony on the bill. Copies of the
testimony submitted by the NAAMLP and IMCC are attached and we request
that they be made a part of the record for this rulemaking. In its
testimony at the hearing, OSM once again made its bald statement that
prior replacement balance funds must be used only for coal-related AML
problems simply because they are paid from the U.S. Treasury. OSM went
on to express concern that if these funds are spent on noncoal AML
problems in uncertified States and Tribes, it will cause a corresponding
delay in the completion of high priority coal AML problems in those
States and Tribes. OSM also notes that as States and Tribes delay
certification of completing their remaining coal problems, it limits
funding that would otherwise be available to remaining uncertified
States and Tribes, although we question the real impacts of this alleged
delay.

What OSM fails to note is that Congress did not express particular
concern about this potential scenario, but instead relied on a funding
realignment to insure that there would be sufficient moneys to address
historic problems as the program moves along. We believe Congress also
appreciated the fact, as established by AMLIS, that the States and
Tribes have not gone hog wild over the years in spending inordinate and
inappropriate amounts of money on noncoal problems and for the AMD
set-aside. Why OSM is now overly obsessed with what they seem to think
will be outlandish spending in these two areas by the States and Tribes
is beyond us. Again, our cooperative working relationship over the years
has established appropriate boundaries within which we have operated in
meeting program goals and objectives, as set forth in SMCRA. Nothing has
changed in this regard -- other than OSM's insistence on their new
"fundamental distinction" and "strict compliance" theories -- neither of
which is justified or required by the 2006 Amendments

OSM's new interpretation is also a dangerous policy choice. OSM claims
that once a State or Tribe has completed all of its coal projects, it
can then use all of its grant funds for noncoal projects. This will
require that States and Tribes spend years working on high-cost,
low-priority coal projects that present little threat to public health
and safety, while numerous highly hazardous abandoned noncoal mines
remain unattended. In many western states, the AML programs have
employed their AML grants to protect people and property threatened by
noncoal abandoned mines. In New Mexico, for instance, the state
estimates that over 10,000 mine openings remain. The overwhelming
majority of these openings are at abandoned noncoal mines. All of the
fatalities at abandoned mines in New Mexico over the past few decades
have occurred at noncoal mines. With urban growth pushing into
undeveloped areas and recreational uses increasing, the danger to public
health and safety from abandoned noncoal mines throughout the country is
increasing

Much of the above reasoning also holds true for the availability of the
unappropriated balances for purposes of calculating the 30% set-aside
for AMD abatement. Again, this work, which is focused on coal only,
falls within the clear purposes of section 403 of SMCRA and thus any
type of restriction on the use of these funds for AMD remediation is
inappropriate. Section 402(g)(6)(B)(ii)(I) establishes and defines the
use of AMD set-aside funds. That section states that a qualified
hydrologic unit destined for AML abatement must have land and water that
" . . . include any of the priorities described in Section 403."
Obviously, this passage provides a clear nexus to section 403 of the
Act. The 2006 Amendments at section 411(h)(1)(D)(ii) state that
uncertified States and Tribes must use amounts provided from Treasury
funds in place of the unappropriated balances for " . . . purposes
described in Section 403." Again, a clear nexus to section 403 is
stated. Actually, the references in sections 402 and 411 to section 403
are identical. Therefore AMD abatement is a purpose under section 403
and Treasury funds should not be artificially excluded for use in the
set-aside for AMD. Finally, we should note that each appropriation bill
over the past several years has included language that supports the use
of funds made available under Title IV of SMCRA for the purpose of
environmental restoration related to treatment or abatement of AMD
without restriction.

Based on the above, the NAAMLP and IMCC request that OSM reconsider its
interpretation on the use of unappropriated State and Tribal share
balances for noncoal reclamation and the AMD set-aside. Adjustments to
the proposed rules based on these arguments appear below.

**[Funding for Minimum Program States and Tribes]{.underline}**

The 2006 Amendments include several provisions that govern the award of
grant funds by OSM to States and Tribes. Section 402(g) has three
paragraphs that bear on that topic. Section 402(g)(1) directs that "50
percent of the reclamation fees collected annually in any State" be
distributed to that state. Under section 402(g)(5)(A), "\[t\]he
Secretary shall allocate 60 percent of the amount in the fund after
making the allocation referred to in paragraph (1)" for additional
grants to States and Tribes. And section 402(g)(8) states that "In
making funds available under this title, the Secretary shall ensure that
the grant awards total *not less than* \$3,000,000 annually to each
State and each Indian tribe. . ." (*Emphasis added*). By our reading of
the law, this latter provision provides OSM the justification for
insuring annual minimum program grant funding in excess of the base \$3
million level.

Section 401 of the bill also has relevant provisions. Sections 401(f)(1)
and (2) direct OSM to distribute grant funds to States and Tribes
annually, including the amount needed for the adjustment under section
402(g)(8) (i.e., the "minimum program" adjustment up to \$3.0 million).
Section 401(f)(3) has a similar provision:

> "[In general]{.smallcaps}.---... for each fiscal year, of the amount
> to be distributed to States and Indian tribes pursuant to paragraph
> (2), the Secretary shall distribute---
>
> \(i\) the amounts allocated under paragraph (1) of section 402(g), the
> amounts allocated under paragraph (5) of section 402(g), and any
> amount reallocated under section 411(h)(3) in accordance with section
> 411(h)(2), for grants to States and Indian tribes under section
> 402(g)(5); and

(ii) the amounts allocated under section 402(g) (8)."

This again makes it clear that the legislation requires OSM to provide
minimum program states at least \$3.0 million annually, under section
402(g)(8), commencing October 1, 2007.

In its restrictive reading of the bill, OSM depends upon a single
provision in section 401(f)(5)(B) to reduce the amounts of annual grants
to minimum program States and Tribes from the minimum \$3.0 million
annual required grant amount. That provision reads (with emphasis
added):

> "(B) [Exceptions]{.smallcaps}.---*Notwithstanding paragraph (3)*, the
> amount distributed under this subsection for the first 4 fiscal years
> beginning on and after October 1, 2007, shall be equal to the
> following percentage of the amount otherwise required to be
> distributed:

\(i\) 50 percent in fiscal year 2008.

\(ii\) 50 percent in fiscal year 2009.

\(iii\) 75 percent in fiscal year 2010.

\(iv\) 75 percent in fiscal year 2011."

OSM's reliance on this provision ignores the fact that by its own terms
(i.e. the "notwithstanding" phrase), it only overrides the requirements
of section 401(f)(3). Yet other provisions of the bill independently
require the distribution of the minimum amount of \$3.0 million. *See*
sections 401(f)(1) and (2) and section 402(g)(8). The provision cited by
OSM does not override the clear requirements of those other parts of the
bill.

The phase-in schedule of section 401(f)(5) only applies to such
*additional funds* as might otherwise be provided by OSM to the minimum
program States and Tribes above the guaranteed distributions required
elsewhere in the statute. This means that OSM cannot contribute more
than \$1.5 million *in additional funding* to each minimum program
States and Tribes in fiscal years 2008 and 2009, and not over \$2.3
million *in additional funding* in each of fiscal years 2010 and 2011,
and not over \$3.0 million *in additional funding* in each subsequent
year through fiscal year 2024.

Number range CHAPTERThis debate goes much deeper than the
interpretations of the two sections mentioned above. Congressional
intent and history related to the passage of P.L. 95-87, the original
"Surface Mining Control and Reclamation Act of 1977,\" deserves merit in
the interpretation debate. In the 95^th^ Congress, the late Morris K.
Udall (considered by many as the "father" of P.L. 95-87) worked
tirelessly with government agencies, industry, and other organizations
to make sure this law became a reality. With regard to the reclamation
of abandoned mine lands, Title IV of P.L. 95-87 has been the guiding
light for both OSMRE and the States/Tribes for almost 30 years. During
this time, AML funding issues have overshadowed Congressman Udall's
intent as outlined in Section 403 of P.L. 95-87 "Objectives of the
Fund." Section 403 set specific priorities as to the expenditure of
moneys from the AML fund. The number one priority is "the protection of
public health, safety, and property from extreme danger of adverse
effects of coal mining practices." It is significant that the Surface
Mining Control and Reclamation Act Amendments of 2006 removed the words
"general welfare" from the original wording of Section 403(1). In their
infinite wisdom, the 109^th^ Congress wanted to further strengthen
Section 403(1) by placing a special emphasis on public health, safety,
and property.

There are no specific provisions in P.L. 95-87 or the 2006 Amendments
that discuss in detail the State/Tribe AML funding formulas that embrace
historic coal production, State/Tribal share (present coal production),
and federal discretionary expenses. However, in the 2006 Amendments
Congress did single out States and Tribes specifically in Section
402(g)(8)(A) stating, "In making funds available under this title, the
Secretary shall ensure that the grant awards total not less than
\$3,000,000 annually to each State and each Indian Tribe having an
approved abandoned mine reclamation program pursuant to section 405 and
eligible land and water pursuant to Section 404, so long as an
allocation of funds to the State or Tribe is necessary to achieve the
priorities stated in paragraphs (1) and (2) of section 403(a)." The fact
that Congress has always (and in the 2006 Amendments continues to)
dedicated a section of the law to States and Tribes traditionally known
as those with "Minimum Programs" solidifies the Congressional intent
that these States and Tribes annually receive not less than \$3,000,000.

In the late 1980s the Mid-Continent Coal Coalition was formed because
the Minimum Program States and Tribes had several hundreds of millions
of dollars of Priority 1 and Priority 2 AML hazards that posed, and
continue to pose, a very high public health and safety risk. AML funding
had fallen to an annual \$1 million level that would not allow the
efficient operation of a State/Tribal AML Program. This Coalition
gathered Congressional support through letters, resolutions, testimony
at Congressional committee hearings, etc. As a result, the budget
reconciliation bill passed by the 101^st^ Congress in the fall of 1990
required that the Secretary allocate annually not less than \$2,000,000
to Minimum Program States and Tribes. The passage of this bill in1990
was definitive proof that Congress supported an increase in funding for
the Minimum Program States and Tribes.

For three years (FY1992, FY 1993, and FY 1994) the Minimum Program
States and Tribes received \$2 million annually. Since that time the
Minimum Program States and Tribes have been limited to an annual
allocation of only \$1.5 million. The primary reason given for not
allocating the statutorily mandated annual \$2 million was "budget
deficits." Then under the Clinton administration, there was a "budget
surplus," but the annual allocation remained at \$1.5 million. For the
last 13 years, Minimum Program States and Tribes have been critically
underfunded in respect to the number of Priority 1 and Priority 2 AML
hazards that need to be reclaimed. Respective Administration budgets and
Congressional appropriations continued to hold the AML Fund "hostage,"
while unappropriated balances continued to rise.

In early December 2006, much to the surprise of OSM, the 2006 Amendments
took AML funding off budget. No longer would Congress appropriate AML
funds on an annual basis. The pressure was now on OSM to develop a
method(s) to distribute the AML funds to States and Tribes. OSM began to
develop future funding projections under the new law. Since December
2006, OSM has distributed five different funding charts. With each
successive chart, the funding numbers for the States and Tribes would
change. But in all five of these OSM charts, there was one constant --
the Minimum Program States (Alaska, Arkansas, Iowa, Kansas, Maryland,
Missouri, and Oklahoma) and Tribes would receive [no]{.underline}
funding increases for FY 2008 - FY 2011. Not until FY 2012 would Minimum
Program States and Tribes receive an annual \$3 million.

In the last OSM Funding distribution chart, the following [funding
increases]{.underline} are reflected when comparing FY 2007 AML funding
to FY 2008 AML funding, as well as the amount of Priority 1 and Priority
2 coal hazards in the AML Inventory for each State and Tribe:

[Funding Increases]{.underline} [Amount of Hazards]{.underline}

Alabama 96 % \$48.7 million

Colorado 175 % \$25.3 million

Illinois 45 % \$45.5 million

Indiana 138 % \$11.4 million

Kentucky 124 % \$325.5 million

New Mexico 187 % \$3.2 million

North Dakota 93 % \$42.6 million

Ohio 65 % \$100 million

Pennsylvania 29 % \$1,003.2 billion

Utah 147 % \$24.3 million

Virginia 115 % \$105.9million

West Virginia 103 % \$735.4 million

Louisiana 200 % \$0.00

Montana 229 % \$8.5 million

Texas 238 % \$800,000

Wyoming 269 % \$25.8 million

Crow Tribe 260 % \$500,000

Hopi Tribe 250 % \$0.00

Navajo Nation 215 % \$0.00

It should be noted that the term "minimum program" does not refer to
lack of AML hazards that a State or Tribe has to address, but rather
with the lack of funding being generated by active coal mines within the
State or Tribe for purposes of remediating hazards associated with past
coal mining. For example, Oklahoma has an AML inventory of priority 1
and 2 sites that will cost between \$125 and \$130 million to reclaim
using today's cost figures. Kansas has an AML inventory of priority 1
and 2 sites that will cost over \$200 million to remediate. However,
funds generated by current coal mining activities in these two States
generate around \$25,000 annually for Kansas and around \$100,000
annually for Oklahoma. For perspective, States like Kentucky and West
Virginia receive between \$6,800,000 and \$8,300,000 annually from
reclamation fees to perform remediation of hazardous AML sites.
Interestingly (and in some respects, unfortunately), Oklahoma has an AML
inventory of priority 1 and 2 hazards that will cost more to remediate
than 14 of the States and Tribes listed above and Kansas has an AML
inventory of priority 1 and 2 hazards that will cost more to remediate
than 16 of the above-listed States and Tribes. Therefore, even though
the "minimum program" States and Tribes may get minimum funding, they
certainly have their fair share of AML priority 1 and 2 hazards.
Ignoring AML project sites that are an eminent danger to the health and
safety of the public is not what Congress intended.

OSM is required by the 2006 Amendments to use any combination of sources
necessary to fully fund AML Minimum Programs in the amount of no less
than \$3 million per year. This mandate is not adjusted by Section
401(f)(5)(B) of the Act. If anything, that subsection only constrains
where OSM can find moneys within its budget to make the Minimum Programs
whole, as required by the Act. In FY 2008, for instance, OSM phased out
the Clean Streams Initiative Program. This money could be used to help
fund the Minimum Programs at the annual \$3 million level. Furthermore,
in its News Release of February 5, 2007, OSM noted that it had
off-budget funds in its FY 2008 budget that could fully fund AML minimum
programs at not less than the \$3 million level. This money was provided
to OSM for the purpose of, and should be used for, fully funding the
minimum programs at the \$3 million level. The bottom line is the
Minimum Programs have been ignored for too many years. With the passage
of P.L. 109-432, Congress has sent a message to OSM that Minimum
Programs should be funded at an annual rate of \$3 million, starting
with the FY 2008 budget. The sad part of this impasse is the fact that
those living near or visiting the Priority 1 and Priority 2 AML sites in
these States and Tribes are exposed on a daily basis to the possibility
of death and/or injury.

Congress gave OSM the authority to develop the AML funding distribution
numbers for the States and Tribes. The NAAMLP and IMCC urge that during
the development of final rules for the 2006 Surface Mining Control and
Reclamation Act Amendments, OSM "look outside the box" and consider the
real reason that Title IV was enacted almost 30 years ago.

**[Use of Grant Mechanism to Distribute Payments from the U.S.
Treasury]{.underline}**

Pursuant to the 2006 Amendments to SMCRA, two new types of payments from
the U.S. Treasury are established: 1) distribution of the prior
unappropriated State/Tribal share balances over a seven year period
(Section 411(h)(1)) and 2) payments in lieu of future State/Tribal
shares formerly paid out of the AML Trust Fund pursuant to section
401(g)(1) (Section 411(h)(2)). Section 402(i)(2) requires the Secretary
of the Treasury to transfer to the Secretary of the Interior "such sums
as are necessary to pay the amount" described above, but no specific
payment mechanism is prescribed. OSM prefers to distribute these
payments via grants to States and Tribes, based on its reading of the
law and on past practice, rather than via direct distribution of cash
from the Treasury. The States and Tribes assert that the new law does
not directly address this matter and therefore the Secretary has the
discretion to design a payment mechanism that meets the needs of the
States and Tribes.

In line with this discretionary authority, the States and Tribes prefer
an approach that will provide them with immediate access to those moneys
that are due and owing from the Treasury. This can be accomplished
through a traditional grant process for those who desire the
"protection" and guidance that such a process affords these monetary
distributions. However, there is also flexibility to design either a
grant or a direct payment mechanism that provides more unrestricted and
immediate access to these moneys for States and Tribes who desire
maximum discretion with regard to the use of these moneys in line with
the language in Section 411(h)(1)(D)(i) and (ii). In the latter
circumstance, the State legislatures and Tribal governments will
exercise their fiduciary responsibility to insure that the funds are
spent legally and appropriately in accordance with the dictates of the
2006 Amendments and State and Tribal contracting law. Federal audits
will also provide a measure of scrutiny and review of project selection
and expenditures. There are also other mechanisms available for tracking
and facilitating these payments, one example being the management of
mineral royalties paid to States under the Mineral Leasing Act and
another being a general statement of work detailing how the money will
be spent.

The States and Tribes therefore urge OSM to incorporate significant
flexibility and discretion with regard to the types of mechanisms that
are available for distributing and expending Treasury payments for both
the prior unappropriated State/Tribal balances and payments in lieu of
future State/Tribal share to certified States and Tribes.

**[Priority 3 Work "Adjacent To" and "In Conjunction With" Priority 1
and 2 Work]{.underline}**

The last over-arching issue that we wish to address is the reclamation
of priority 3 sites, which are generally those abandoned sites that
involve the restoration of land and water resources and the environment
previously degraded by the adverse effects of coal mining. Again, OSM is
painting with too broad a brush in its attempt to restrict the type of
work that can be addressed by the States and Tribes. While a lower
priority, environmental restoration work has paid some of the largest
dividends under the AML program and received some of the greatest
accolades from our citizens. Acid mine drainage, in particular, has been
a particular problem in Appalachia, destroying streams and water
supplies. Notable progress has made been over the years in addressing
this perennial problem through a combination of AML work, partnerships
with local watershed groups (through the Clean Streams Initiative and
the Watershed Cooperative Agreements), no-cost contracts, AML
enhancement projects and more traditional remining operations.

Under the proposed rule, OSM has defined the term "adjacent to" as
meaning priority 3 eligible lands and waters that are "geographically
contiguous" to a priority 1 or 2 site. This term has been further
defined as meaning that the priority 3 site is "spatially connected" to
a priority 1 or 2 site. With respect to expenditures for priority 3
reclamation that are made "in conjunction with" the expenditure of funds
for priority 1 or 2 projects, that term requires that the priority 3
expenditure either facilitates the priority 1 or 2 reclamation OR
provides reasonable savings towards the objective of reclaiming all
priority 3 problems within the jurisdiction of the state. In each case,
the burden on the State or Tribe to meet the requirements in these two
definitions will be unreasonable.

The definitions are written in such a way that it will require a major
investment of State or Tribal resources to make the determinations that
are anticipated by the definitions. We provide suggested adjustments to
the rule language below, but our primary concern relates to OSM's
seeming unwillingness to work with the States and Tribes to accomplish
as much priority 3 work as is appropriate and feasible under the Act. In
the past, the States and Tribes have worked cooperatively with OSM to
identify and then justify the maximum amount of discretion available to
the States and Tribes to allow the remediation of priority 3 sites,
either as stand alone projects or in conjunction with higher priority
work. This cooperative spirit led to the AML enhancement rule, which has
been very successful and resulted in remarkable AML reclamation
accomplishments. In fact, last year OSM recognized the Commonwealth of
Virginia with a national award for excellence in AML reclamation for the
Buchanan County Park Highwall Elimination Project.

Thus, the heavy-handed approach evidenced in OSM's proposed rule is
surprising and inconsistent with past efforts in this area. In addition
to the difficulty of determining what will qualify as "geographically
contiguous" and "spatially connected", the highly speculative nature of
the requirements to "facilitate reclamation" and "provide reasonable
savings" will likely lead to conflicts and disputes about the
appropriateness of State and Tribal decisions to undertake priority 3
reclamation work. OSM indicates in its preamble at page 35231 that it
intends to review individual State or Tribal determinations on these
matters as part of its oversight and inventory management
responsibilities. While we don't dispute OSM's ability to do so, this
appears to set up an adversarial relationship that is contrary to past
practice. The States and Tribes are understandably concerned about OSM's
seeming change of mindset with respect to our previous cooperative
venture in this area.

Much of this seems to emanate, once again, from OSM's obsession with its
interpretation of congressional intent in the 2006 Amendments, as
specifically articulated on page 35231 of the preamble. And as before,
we not only disagree with this interpretation, we believe that Congress
did not intend to upset the existing programmatic design and
accomplishments that have marked the success of the AML program and that
Congress relied upon to extend the program for an additional 15 years.
High priority coal problems will continue to be addressed by the States
and Tribes, as has been our hallmark over the years. But we cannot and
will not turn our backs on the other accomplishments that have also
marked the success of this program and received the support and
accolades of our citizens. There is a balance that must be struck among
the competing priorities under the AML program and we assert that we
have met that challenge -- mostly through a cooperative and collegial
working relationship with OSM. Our hope is that we can continue that
success throughout the life of the AML program.

**[SPECIFIC COMMENTS ON AND SUGGESTED CHANGES TO THE PROPOSED
RULE]{.underline}**

**Section 872.15 -- How does OSM distribute and award State share
funds?**

**Section 872.18 -- How will OSM distribute and award Tribal share
funds?**

**Section 872.22 -- How does OSM distribute and award historic coal
funds?**

**Section 872.27 -- How does OSM distribute and award minimum program
make-up funds?**

Suggested Change: Add the following as new subparagraphs 872.15(c),
872.18(c), 872.22(f) and 872.27(c):

***We will distribute to you the amounts we withhold under subparagraph
(b) of this section in two equal annual installments. We will do this in
federal fiscal years 2018 and 2019.***

Justification: In these sections, OSM provides an annual distribution
schedule for State and Tribal share, historic share and minimum program
make-up funds. The distribution tables reflect the fact that in FY 2008
-- 2011, there is a phase-in of the funds that will be distributed.
However, OSM does not indicate in the rule or the preamble what happens
to the amount of funds that are not distributed during this phase-in
period. Will these funds be returned to the unappropriated State and
Tribal share balances? Will they be held until the end of the program in
FY 2023 (as implied on page 35222 of the preamble)? Or will they be
placed into the historic share fund? If they are placed in the first
location, this will impact the availability of these funds for noncoal
reclamation and the 30 percent AMD set-aside, since they will take on
the designation of prior balance replacement funds which, under OSM's
proposed rule, are not available for these two purposes. Of course,
assuming OSM agrees with our comment that prior balance replacement
funds should be available for noncoal reclamation and the AMD set-aside,
this will not be an issue. However, if OSM abides by its current
position, we would prefer to see the phase-in moneys placed into a
category of their own whereby they would be available for both noncoal
reclamation and the AMD set-aside.

In order to implement the future funding projections as stated in the
OSM charts and to make the distributions for the uncertified States and
Tribes consistent with the distributions for the certified States and
Tribes, the language contained in section 872.33 (e) should be added as
subparagraphs 872.15 (c), 872.18 (c), 872.22 (f) and 872.27(c) as noted
above.

**Above Sections plus Sections 872.30 and 872.33**

Comment: As noted in our general comments above, we would prefer that
OSM structure the awarding of funds in such a way that a State or Tribe
can opt for either a grant mechanism or direct payments. We assert that
Congress did not, contrary to OSM's reading of the 2006 Amendments to
SMCRA, dictate that grants must be used to award funds under the Act.
Should OSM agree with our analysis, in the final rules the agency will
need to adjust each of the above sections to provide for the
discretionary use of either grants or direct payments.

**Section 872.22(b) -- How does OSM distribute and awards historic coal
funds?**

Comment: In the preamble to this section at page 35224, OSM describes
the formula that will be used to determine the historic coal awards each
year. As part of this process, will OSM recalculate the percentages used
in the formula each year?

**Section 872.23(c) -- What may you use historic coal funds for?**

Comment: OSM specifically requested comments on whether the strict
compliance language of Section 402(g)(2) applies to the authorization in
Section 409(b) that allows uncertified States and Tribes to spend
historic coal funds on high priority (P1) noncoal reclamation. We assert
that the strict compliance language of Section 402(g)(2) does not apply
to this authorization. Furthermore, we think this same reasoning, by
extension, applies to prior balance replacement funds. Under Section
411(h)(1) these funds are to be expended pursuant to the "priorities" of
section 403. Section 409(b) references these priorities. Section 401
speaks to the "purposes" of the Fund, which includes noncoal reclamation
under section 409. Thus, just as historic coal funds can appropriately
be spent for approved noncoal reclamation, so to can prior balance
replacement funds. Both are anticipated purposes under section 401 the
Act and both are subject to the priority scheme under section 403.

**Section 872.25 -- What may OSM use Federal expense funds for?**

Comment: We believe that OSM should include in this listing of how it
may use Federal expense funds "minimum program make-up funds." This will
put OSM in the position of using these Federal expense funds, among
other available funds, to meet the minimum payment of \$3 million per
year for the minimum program States and Tribes, beginning immediately.
As noted in our arguments above, we assert that OSM is required by the
2006 Amendments to provide for a minimum program payment of \$3 million
per year. We believe OSM can use any number of funds to make these
payments, including the federal expense fund. OSM also needs to clarify
whether minimum program make up funds continue to be "federal expenses"
or not. For instance, in the preamble at page 35225, OSM states that
Federal expense funds are moneys in the Fund that are NOT allocated as
State share, Tribal share, historic share, or minimum program make up
funds. However, in section 872.25, proposed subparagraph (b) would
remove a reference in existing section 872.11 (b)(7) to minimum program
make up funds provided under section 402(g)(8) of SMCRA because, under
section 402(g)(3)(E) of SMCRA (as revised by the 2006 Amendments),
"minimum program make up funds are expressly included in Federal
expenses so the additional reference is no longer necessary."
Clarification is needed here.

Comment: Pursuant to Section 872.25 (a)(2), OSM may use Federal expense
funds for emergency projects under State, Tribal, and Federal programs
under section 410 of SMCRA. Some States operate emergency projects under
their respective State programs (i.e.. Oklahoma and Arkansas) and some
States (e.g.. Kentucky and Pennsylvania) have chosen to have OSM conduct
emergency programs in their respective States. Those States, like
Oklahoma, that have emergency projects under their State AML programs,
have never had full autonomy when conducting AML emergency activities.
In addition, recent policy changes by OSM to not approve AML emergencies
that State AML program mangers thought should have been approved is an
OSM trend toward less emphasis on and funding of AML emergencies.

Section 410 (a) of SMCRA (EMERGENCY POWERS) states, "The Secretary is
authorized to expend moneys from the fund for the emergency restoration,
reclamation, abatement, control, or prevention of adverse effects of
coal mining practices, on eligible lands, if the Secretary makes a
finding of fact that - (1) an emergency exists constituting a danger to
the public health, safety, or general welfare; and\...\....".

SMCRA is clear that the Secretary, through OSM, is responsible for
emergencies, including among other things, funding them. This is not the
responsibility of States. There is some concern among the States that,
during the anticipated upcoming revision of their respective AML State
statutes, rules and reclamation plans (in response to OSM's final rule
on the AML program), all references to AML emergencies will be removed.
Language in OSM's budget justification document (the "Green Book") for
Fiscal Year 2009 confirms that this is OSM's intent.

OSM, in its preamble and final rules, should be more affirmative and
have clear language reinforcing the agency's responsibility to
administer AML Emergency Powers and to fund State emergency programs.

**Section 872.26(a) -- What are minimum program make up funds?**

Suggested Change: Add the words ***or greater*** at the end of the first
sentence of paragraph (a).

Justification: This wording is needed to be consistent with the 2006
Amendments at Section 402(g)(8) which requires that "In making funds
available under this title, the Secretary shall ensure that the grant
awards total NOT LESS THAN \$3,000,000 annually to each State and each
Indian tribe . . . ." The "not less than" language in section
402(g)(8)(A) indicates that the Secretary may give a State/Tribe more
than the minimum program mandatory funding of \$3 million per year. In
later years, once Minimum Program States/Tribes are certified, there
will be more historic coal funds to distribute among those Minimum
Program States with large AML inventories. Some States, such as Kansas
and Oklahoma, will need funding greater that \$3 million per year to
remediate all the priority 1 and 2 hazards associated with past coal
mining.

**Section 872.27(a)(1) -- How does OSM distribute and award minimum
program make up funds?**

Suggested Change: Add the words ***or greater*** at the end of
subparagraph (a)(1).

Justification: See previous justification. In addition, OSM notes that
it proposes to apply the phase-in provisions only to the make up funds
and not the total distribution. The agency asks if there are other ways
to calculate the make up funds that meet SMCRA's requirements. We
believe that there is any number of ways for OSM to accomplish this,
including the use of the federal expense share funds. We don't
particularly care how OSM does this, it simply needs to be done in order
to meet the minimum \$3 million annul award beginning immediately.

In the preamble discussion to this section of the rule, OSM states (on
page 35226) that if a State or Tribe has priority 1 or 2 coal problems
remaining after September 30, 2022, "we will continue to fund your total
annual distribution at no less than \$3 million (to the extent funds
still are available) until the estimated cost of reclaiming your
Priority 1 and 2 coal problems is less than \$3 million." We believe
that OSM should clarify that if funds are still available and if a State
or Tribe has more than \$3 million in Priority 1 or 2 problems
remaining, the agency can and will distribute more than \$3 million to
allow the State or Tribe to address these remaining problems (not just a
minimum of \$3 million, which is what is implied by the existing
language).

**Section 872.28 -- What may you use minimum program make up funds
for?**

Suggested Change: Add at the end: ***and priority 3 coal problems
pursuant to Section 874.13.***

Justification: The requirements of Section 874.13 would allow the use of
minimum program make up funds to address certain types of priority 3
problems. This should be reflected in this Section of the rule. Many of
the Minimum Program States use materials from Priority 3 spoil ridges,
for instance, to remediate Priority 1 and 2 highwalls during the
reclamation process. To do a better job, and to facilitate the overall
aesthetics of the reclamation project, States/Tribes should be allowed
to level Priority 3 spoil ridges in conjunction with abating Priority 1
and 2 highwalls. By doing this, the AML program can help leverage their
funds and get the best reclamation done for the lowest price.
Historically, reclaiming Priority 3 spoil ridges in conjunction with
Priority 1 and 2 highwalls using the Secretary's discretionary funds has
been allowed by OSM and it has saved considerable money for the
State/Tribal programs. The States/Tribes have not abused this action in
the past and there is no reason to believe they would use Minimum
Program make up funds inappropriately now.

**Section 872.29 -- What are prior balance replacement funds?**

Comment: In the preamble to this section of the rule, OSM asks whether
they should add a provision that would address the funding cap and how
the prior replacement fund and certified in lieu fund distributions
would be reduced if the cap were exceeded. We do not believe it is
necessary for OSM to address this matter in the rule. However, if OSM
chooses to do so, the agency should use the language directly from the
2006 Amendments, as follows:

***Section 872.35 -- How should fund transfers be reduced if the \$490
million annual cap for Treasury funding is exceeded?***

***In a case in which the amount required to be transferred exceeds the
maximum annual limit of \$490 million, the Secretary shall adjust the
transfers of funds so that: (i) each transfer for the fiscal year is a
percentage of the amount described; (ii) the amount is determined
without regard to subsection 402(h(5)(A); and (iii) the percentage
transferred is the same for all transfers made under this subsection for
the fiscal year. This adjustment does not apply to the minimum program
make up funds.***

**Section 872.30 -- How does OSM distribute and award prior balance
replacement funds?**

Comment: We reiterate our comment noted above that OSM should provide
for these funds to be distributed via direct payments as opposed to
grants. Also, OSM should clarify that the agency can begin making these
distributions/awards immediately on October 1 of each fiscal year,
rather than awaiting until after all reclamation fees for the prior year
are accounted for, as is the case with State/Tribal and historic share
funds.

**Section 872.31 -- What may you use prior balance replacement funds
for?**

Suggested Change: Add the following subsections:

***(4) Noncoal reclamation under Section 875.12 of this chapter that is
requested under section 409 (c) of SMCRA;***

***(5) Deposit into an acid mine drainage abatement and treatment fund
under Part 876 of this chapter.***

Justification: See our arguments in the General Section of these
comments above.

Comment: OSM asked for comments on whether the agency should restate the
language found in the federal statute. The language states that
certified States and Tribes can only use prior balance replacement funds
for the purposes that the State legislature or Tribal governing body
establishes, with priority given to addressing the impacts of mineral
development. The language is clear and there is no need for additional
explanation or to include the statutory language in the rule.

OSM also asked if the States and Tribes desire to have a notice to
proceed for the projects selected by the State legislature or Tribal
governing body, along with the accompanying NEPA review. The States and
Tribes generally prefer not to have an ATP or the NEPA review. However,
OSM should clarify the basis for this action, i.e. that OSM does not
require a NEPA review because moneys distributed to certified States and
Tribes are no longer considered to have a federal nexus (unless they are
used to address newly discovered coal problems) or that OSM expects the
state/tribe to be responsible for its own NEPA review. If a Tribe is
still required to perform a NEPA review due to other federal
requirements (i.e. federal fiduciary responsibilities), the Tribes would
prefer to work with OSM to accomplish this.

We should also note here that this section specifically references the
use of prior balance replacement funds for maintaining the AML inventory
(subparagraph (b)(3)). OSM does not specifically provide for the use of
other funds (i.e. State/Tribal share or historic share) for inventory
maintenance. Is this intentional? If not, changes will be required to
sections 872.16 and 872.23.

**Section 872.34 -- What may you use certified in lieu funds for?**

Comment: OSM interprets the 2006 Amendments to SMCRA to mean the use of
certified in lieu funds is not restricted. The States and Tribes agree
with this statement. With respect to the potential application of the
provisions in section 411(b) through (g), we assert that these would be
difficult to apply to a certified State or Tribe given the new source
for in lieu funds (i.e the U.S. Treasury) and the specific language of
the 2006 Amendments allowing these funds to be used for any purpose. The
only provisions that could possibly apply are subsections (b) and (c),
but only with respect to newly discovered coal problems. This is an
obvious case and does not need to be specifically re-stated.

**Section 874.13 -- Reclamation objectives and priorities.**

Suggested Change: In subparagraph (a)(3), add the following words after
"geographically contiguous": ***and/or hydrologically connected"***.

Justification: In an effort to better define when priority 3 sites are
"adjacent to" priority 1 or 2 sites, we believe an additional criterion
would be helpful. We have suggested the inclusion of "hydrologically
connected", which can be further defined as "all watershed areas bounded
by a third order stream". This is consistent with the TMDL process in
many States and Tribes and would promote the reclamation and restoration
of impacted watersheds. This criterion also represents a reasonable
compromise between no limitations and directly connected features.

Suggested Change: In subparagraph (b), add ***872.26 and 872.29*** to
the list of section numbers in the first sentence.

Justification: Minimum program make up funds and prior balance
replacement funds should also be available for use under this paragraph,
as appropriate.

Suggested Change: In subparagraph (b)(2), substitute the words ***past,
current or future*** to define the scope of priority 3 projects that can
be undertaken in conjunction with priority 1 and 2 projects. At the end
of the subparagraph add: ***and as long as the overall reclamation
program generally reflects the priorities in section 403(a) of the
Act*** and delete the balance of the subparagraph (i.e. subsection (i)
and (ii)) Subparagraph (b)(2) would then read as follows:

***The expenditure for Priority 3 reclamation is made in conjunction
with the expenditure of funds for past, current or future Priority 1 or
Priority 2 reclamation projects, and as long as the overall reclamation
program generally reflects the priorities in section 403(a) of the
Act.***

Justification: The use of the words "past, current or future" is more
consistent with the wording in the 2006 Amendments and provides more
clarity. We believe that OSM's reliance on criteria such as
"facilitating priority 1 or 2 reclamation" and "providing reasonable
savings towards reclaiming all priority 3 problems" are too elusive and
subjective, are difficult to define, and will result in significant
disputes and conflicts between OSM and the States and Tribes. In
addition, they will create an unnecessary administrative burden for the
States and Tribes. For instance, how much detail, proof and
justification will OSM require from the State or Tribe to obtain project
approval? Will there be a specific timeframe for the qualifying priority
3 work to be completed within? The law does not specify this type of
monetary criterion and it would be challenging to implement.
Furthermore, the restriction in section 886.16(e) -- the inability to
spend any funds on project development or design before the problem is
entered into AMLIS -- could complicate the determination that the
priority 3 work "facilitates" work on a priority 1 or 2 project or
results in cost savings.

OSM references a Solicitor's Office memorandum dated May 18, 1982 at
page 35230 of the preamble. The basis for this memorandum was an effort
at that time to explore additional options for the States and Tribes to
be able to undertake priority 3 work that is related to priority 1 and 2
projects. The memorandum concluded that the States and Tribes have ample
authority and rationale to fund lower priority projects together with
higher priority projects as long as the total program reflects the
achievement of the objectives in section 403(a) of SMCRA. We assert that
this memorandum and the reasoning therein continue to support the
concept of discretion and flexibility for the States and Tribes to
undertake priority 3 projects related to priority 1 and 2 projects.

Since the inception of this Solicitor's memo, the States and Tribes have
worked cooperatively with OSM to undertake several worthwhile and
important priority 3 projects in conjunction with higher priority
projects. A review of AMLIS will verify that these projects still
represent only 15 percent of total projects being handled by the States
and Tribes. As of August 18, 2008, AMLIS shows a priority 1 and 2
completed cost of \$2.4 billion and a priority 3 completed cost of only
\$365 million. Obviously, the majority of AML funds are committed to the
most serious and highest priority projects. We expect this to continue
into the future. Given this history, and the fact that the States and
Tribes have never abused their discretion in this area, we fail to
understand OSM's insistence on placing additional restrictions on our
decision making process with respect to the selection of appropriate
priority 3 projects. Once again, OSM seems to be relying on its "strict
compliance theory" to undermine what has been an effective, financially
sound initiative under the AML program.

While we realize that OSM has attempted to pave the way for a variety of
priority 3 projects to continue, the restrictions and limitations that
are contained in Section 874.13(b)(2) will only serve to stifle the
flexibility that has been the hallmark of this aspect of the program
since 1982. In this regard, we were taken aback by OSM's statement in
the preamble at page 35230 that "based on section 402(g)(7) ***and our
past experience***, this proposed provision also requires uncertified
States and Indian tribes to meet one of two conditions before being
allowed to reclaim Priority 3 sites." The "past experience" we are
familiar with demonstrates the complete effectiveness of the States' and
Tribes' experience with priority 3 work and confirms the positive
working relationship with OSM in the oversight of our work. We trust
that, upon further reflection, OSM will see the merit of continuing to
proceed with the existing protocol.

Comment: OSM indicates in its preamble to the proposed rule on page
35231 that separate phases of priority 3 construction work are
authorized within a priority 1 or 2 project. This will especially be the
case for a project that may be subject to a grant period that is three
or more years. OSM also indicates on page 35231 that there are some
activities that are not subject to the "in conjunction with" provision
at Section 874.13(b)(2). We request that OSM add to this list projects
that are part of the Appalachian Regional Reforestation Initiative
(ARRI) and No-cost AML projects.

Comment: There may be instances where a priority 3 problem would qualify
for funding as being both "adjacent to" and "in conjunction with" a high
priority problem. For example, a priority 3 spoil area being used to
reclaim a dangerous highwall could be considered either "adjacent to" or
"in conjunction with" a high priority project to reclaim the dangerous
highwall. We believe that it should be left to the State or Tribe to
determine which type of priority 3 designation is applicable. We
therefore suggest the addition of a new subparagraph (b)(3) as follows:

***(3) Where a Priority 3 project is eligible for reclamation under
either subparagraph (a) or (b)(2), the State or Tribe will determine the
applicable subparagraph for eligibility and priority determination
purposes.***

Comment: OSM's preamble at page 35231 indicates that prior balance
replacement funds can be used for priority 3 projects subject only to
the limitation that expenditures must reflect the "priorities in the
order stated" in section 874.13(a), but without the restrictions under
Section 874.13(b)(2). OSM should consider adding wording to this effect
in Section 874.13. We suggest the addition of a new subparagraph (c)
that would read as follows:

***Prior balance replacement funds available under Section 872.29 may be
expended to reclaim Priority 3 lands and water provided the expenditures
reflect the priorities in the order stated in subparagraph (a).***

Comment: OSM poses several questions in this section of the preamble of
the rule. We respond as follows:

-   Should there be any limitations, monetary or otherwise, that should
    be tied to adjacent lands and waters? **No.**

-   Should the definition of "adjacent to" include all disturbances by a
    single mining operations or company? **Not necessarily. Disturbances
    from a single mining company may be spread over several miles and
    may incorporate isolated priority 3 sites that may not be worthy of
    reclamation. In addition, trying to determine which company
    disturbed a site after more than 35 years, where many coal companies
    have potentially been involved, would be a guess at best.**

-   Should the definition allow for a hydrologic connection, even though
    there may be great distances between sites? **Yes. As noted above,
    we believe that one of the critical criteria for determining whether
    a priority 3 site is adjacent to a higher priority site is whether
    they are hydrologically connected. This, in turn, should be defined
    as watershed areas bounded by a third order stream. This will insure
    that any connection where degraded water quality is an issue will be
    encompassed by the potential project. Allowing for a hydrologic
    connection provides for a much more rational approach I dealing with
    highwalls. Many Sates have literally miles of "adjacent" highwall
    areas with large acreages of "adjacent" spoil. Such sites lend
    themselves more to a hydrologic approach than to one based on
    geospatial connectedness.**

-   Should the definition contain restrictions on the types of priority
    3 problems or costs than can qualify? **No. To do so would redefine
    priority 3 sites into "high" and "low" priority 3 sites, which is
    not supported by SMCRA.**

-   Should there be any restrictions with regard to priority 3 AMD
    problems? **No. These problems qualify fully as priority 3 problems
    and are recognized as such under SMCRA.**

-   Should permanent facility construction and perpetual treatment costs
    associated with AMD from a priority 2 mine opening or highwall be
    elevated to priority 2 status? **Yes.**

-   Should expenditures for large acreages of priority 3 subsidence be
    elevated in priority because they are geographically contiguous to a
    small priority 2 subsidence event, regardless of cost? **This is a
    matter within the discretion of the State or Tribe, based on a
    variety of factors, of which cost is only one consideration.**

-   What about small priority 2 tipples connected to a large priority 3
    refuse pile? **Since it appears that this is already a priority 2
    site, it would already be covered. Whether a State or Tribe chooses
    to clean up the priority 3 refuse pile is a decision solely within
    its discretion.**

-   Should adversely affected water supplies be elevated in priority
    when adjacent to other kinds of priority 1 or 2 reclamation sites?
    **More than likely, yes. Again, this should be left to the
    discretion of the State or Tribe.**

**Section 875 -- Certification and Noncoal Reclamation**

Comment: This is a major area of concern and needs clarification. It
could be interpreted that certified States and Tribes are **required**
to complete all noncoal reclamation projects and to use certified in
lieu funds to do so. However, OSM may be stating that if a certified
State or Tribe does decide to do noncoal they are **required** to follow
the priority list in the regulations. As discussed below, we maintain
that both interpretations are wrong. The preamble on page 35233
acknowledges that certified States and Tribes are **not** required to
spend prior balance replacement funds and certified in lieu funds
according to Part 875 (emphasis added). The preamble also states a
certified State or Tribe may elect to do noncoal reclamation outside the
framework of this part. These two concepts are not clearly stated in the
proposed regulations. As a result, the suggested changes noted below are
required.

The preamble states no changes were made to Section 875.15 because OSM
believes that fund applicability requirements in Part 872 along with any
reclamation plan revisions completed under Part 884 properly define how
the section applies to a project conducted by a certified program under
this Part. Part 872.31 states prior balance replacement funds may only
be used for the purposes established by the State legislature or Tribal
governing body giving preference to addressing the impacts of mineral
development. Part 872.34 states certified in lieu funds may be used for
any purpose. These two provisions stand for the proposition that Part
875.15 does not apply to certified States and Tribes as this Part
clearly places unsupported and illegal restraints on the use of the
funds given to certified States and Tribes.

**Section 875.11 -- Applicability**

Suggested Change: All of the section numbers cited under subparagraph
(a) should be "872", not "870". This is a typographical error.

Suggested Change: Subparagraph (b) should be changed by adding the
following new subsections:

***(3) Certified States and Tribes are not required to spend prior
balance replacement funds or certified in lieu funds pursuant to this
section.***

***(4) A certified State or Tribe may elect to do noncoal reclamation
outside the framework of this section***.

Justification: The proposed rule indicates that a certified State or
Tribe may use prior balance replacement funds or certified in lieu funds
to address eligible coal problems to maintain certification. The
preamble asks for comment concerning an alternative approach where this
would be restricted to certified in lieu funds. A certified State or
Tribe should be able to use either prior balance replacement funds or
certified in lieu funds to maintain certification. However, to use prior
balance replacement funds, a certified AML program would be required to
gain the approval of the State legislature or Tribal governing body to
do so. Section 875.11(b) should be rewritten to clarify prior balance
replacement funds can be used for the purposes stated only if approved
by the state legislature or Tribal governing body.

Under the alternative approach presented in the preamble, certified
States and Tribes would continue to conduct noncoal reclamation under
this Part and would be mandated to use certified in lieu funds for lands
or water affected by the mining of minerals and materials other than
coal. This alternative is contrary to the Act, as it mandates the use of
the funds received by a certified State or Tribe. The decision to do
noncoal reclamation should be up to the individual States and Tribes, as
noncoal reclamation is an option in SMCRA and not a requirement.
Likewise certified AML programs should not be required to follow all of
Part 875 to enjoy the protection of the limited liability provisions of
§875.19. See also the discussion above and concerning Section 875.19
below.

**Section 875.13 -- Certification of completion of coal sites.**

Comment: OSM notes on pages 35233 and 35234 that it believes it has the
authority to suspend or remove certification from a State or Tribe but
have not added language to set forth a certification or suspension
process. The agency requests comments on whether it should add such
language. While we understand that OSM can suspend or remove
certification from a State or Tribe pursuant to the provisions of the
2006 Amendments, we believe OSM should never invoke this authority. To
make more of it in the final rule would be a mockery of the
State/Federal partnership that has endured over the years. A heavy hand
by OSM with respect to this new found authority would be the wrong
message to send to the States and Tribes.

**Section 875.14 -- Eligible lands and water after certification**

Comment: The preamble solicits comments on OSM's revisions to this
section and how they might review plans submitted to address newly
discovered coal sites. It is appropriate that a certified State or Tribe
submit to OSM a notice that an eligible coal problem has been
discovered. The notice should contain an estimated time frame for
addressing the problem and the source of funding. OSM's review should be
limited to the reasonableness of the State's or Tribe's approach to
address the problem. To conduct an investigation, obtain clearances, and
to physically mitigate the problem may take several years. The notice
should not be required to be submitted as a formal reclamation plan
amendment. The reclamation plan should already contain a commitment to
address any newly discovered eligible coal problems as part of the
certification process. Therefore a revision to the reclamation plan is
not required.

**Section 875.15 -- Reclamation priorities for noncoal program.**

Comment: There is a discussion on page 35232 of the preamble where OSM
indicates it did not change Section 875.15 and still requires a
determination from the Governor or Tribal Chairman before a certified
State or Tribe may do public facilities projects. Section 875.15 goes on
to list priorities that a certified State or Tribe must meet to gain
approval from OSM. Given the clear wording in the Act that there are no
restrictions on certified States or Tribes (other than responding to
newly discovered coal sites and doing projects as directed by the State
or Tribal legislative body), requiring a certified State or tribe to
comply with all provisions of this section is contrary to the Act. This
whole section needs to be revised to reflect the freedom certified
States and tribes have regarding use of the funds. See also the comment
above regarding Sections 875 and 875.11.

**Section 875.16 -- Exclusion of certain noncoal reclamation sites**

Comment: We support OSM's interpretation allowing certified States(but
not the Tribes) to use prior balance replacement funds or certified in
lieu funds for the reclamation of UMTRCA or CERCLA sites provided they
comply with the general statutory language and restrictions of those
funds. The Tribes handle these sites by working with the U.S. Department
of Energy and the U.S. Environmental Protection Agency. The proposed
rules currently dictate that uncertified States may not use money from
the Fund or from the prior balance replacement fund for those purposes.
The proposed rules should include language clearly allowing certified
States to use those funds for these purposes should they choose to do
so.

NOTE: This subsection uses the phrase "of this chapter" twice. One
should be deleted.

**Section 875.19 -- Limited Liability.**

Comment: The preamble on page 35236 states the following:

> *\[I\]n addition, if certified States and Indian tribes choose to
> conduct noncoal reclamation in accordance with part 875 using
> certified in lieu funds or prior balance replacement funds, their
> reclamation plan must continue to provide all of the information and
> the assurances that are central to operating under the Part 875
> umbrella. Only under these circumstances could State or Indian tribe
> noncoal reclamation activities continue to enjoy the protection of the
> limited liability provisions of Section 875.19 for those efforts.*

We disagree that all parts of Section 875 need to be followed by a
certified State or Tribe to gain the protection of Section 875.19. It is
also not clear what OSM means by "all of the information and
assurances". As discussed previously, certified States and Tribes should
not have to follow the noncoal priority list in Section 875.15, nor
require the governor's or Tribal chairman's determination before doing
public facilities projects. To require certified States and Tribes to do
so is contrary to the plain language of the Act.

In addition, the limited liability provisions are tied to a State or
Tribe following approval of the reclamation plan not, to the other
provisions of Section 875. As stated in the preamble on page 35236, the
reclamation plan for certified programs will potentially show an even
greater range of variability with little specificity required, beyond
undertaking the coal work necessary to maintain certification. We agree
that beyond a commitment to undertake coal work to maintain
certification, very little information is required -- and this includes
information concerning noncoal reclamation.

**Part 876 -- Acid mine drainage treatment and abatement program**

Comment: OSM is seeking comment on whether AMD abatement and treatment
should be included in the types of priority 3 reclamation projects
subject to the "adjacent to" and "in conjunction with" provisions of
Section 874.13. We assert that all AMD abatement and treatment projects
are considered **at a minimum** to be priority 3 reclamation projects
under section 403 of the Act. In certain circumstances, they could be
classified as Priority 1 or 2. As a result, the "adjacent to" and "in
conjunction with" provisions of Section 874.13 are applicable, as
amended by our suggested changes noted above.

**Section 876.12 -- Eligibility**

Suggested Change: Change the word "and" to "or" between subparagraphs
(c) (2) (i) and (ii).

Justification: We realize that OSM's new definition is consistent with
the statutory language, but actual practice over the past 25 years has
been that hydrologic units are defined as containing lands and waters
that are either eligible OR the subject of bond forfeitures, but not
both. To define the term otherwise would be to severely limit the scope
of this important provision of the law. With the new emphasis on
allowing States and Tribes to set aside upwards of 30% of their AML
funds for the abatement of acid mine drainage projects, to limit the
definition in this way would emasculate the purposes and intent of the
program.

**Section 876.12(b)(2) -- Eligibility**

Suggested change: In subparagraph (b)(2), delete the word
"comprehensive" and move it to later in the subparagraph, as follows:

\(2\) Specify that moneys in the account may only be used for the
abatement of the causes and treatment of the effects of acid mine
drainage ***in a comprehensive manner*** within qualified hydrologic
units . . . .

Justification: This is the exact wording from the statute and should be
repeated here as it has significance in terms of meaning.

Comment: OSM has deleted former subparagraph (b), which required States
and Tribes to spend their AMD abatement and treatment funds according to
a plan approved by the Director. We support this deletion and commend
OSM for removing this requirement. We also support subparagraph (d),
which clarifies that moneys deposited into the AMD special fund account,
together with any interest earned, are considered State or Tribal
moneys.

**Section 879.11 -- Land eligible for acquisition.**

Comment: OSM seeks comment on how this Part would apply to certified
States and Tribes. This section should only apply if a certified State
or Tribe, in doing coal reclamation work to maintain certification,
commits certified in lieu funds and/or prior balance replacement funds
to acquire eligible lands. It should not apply if the funds are used by
a certified program to acquire lands that are not necessary for coal
reclamation work. Disposition of property which was not acquired to
conduct coal reclamation work should not be held to the disposition
requirements. Moneys gained from the sale of property acquired for any
reason should be placed in the State's or Tribe's own reclamation fund
account and not revert to the federal government. To require the funds
to go back to the federal government just to be given back to the State
or Tribe at a later date is unnecessary bureaucratic paper shuffling*.*

**Part 884 -- State Reclamation Plans**

Comment: OSM seeks input about how it should implement the Part 884
requirements for certified States and Tribes. A certified State or Tribe
should include in the Reclamation Plan a commitment to address newly
discovered coal issues beginning with the next grant period. The next
grant request would include the information concerning the newly
discovered coal issue and the approximate time to obtain clearances,
design and actual mitigation of the coal issue and if available a cost
estimate. All other projects directed by the legislature of a certified
State or the governing body of a certified Tribe would be part of the
simplified grant process and do not need to be part of the Reclamation
Plan, other than a statement that the State or Tribe will undertake
projects as directed by the State or Tribal legislative body. The same
is true of noncoal reclamation projects. Very little information would
be required to be in the reclamation plan, other than noncoal
reclamation projects will be undertaken as selected. The specific
projects would be included as part of the simplified grant process. See
also the discussion regarding Section 875.19.

**Section 884.13 -- Content of proposed state reclamation plan.**

Comment: OSM has not proposed to revise existing Section 885.13(c)(2)
where there is a requirement to provide a description of the policies
and procedures to be followed consistent with section 403 of the Act.
Section 403 of the Act, with the exception of (c), does not apply to
certified States and Tribes. This section should be revised to clarify
the different policies and procedures for certified States and Tribes.

**Section 884.17 -- Other uses by certified States and Indian Tribes.**

Comment: OSM proposes to modify subparagraph (b) to indicate that grant
applications for uses other than coal reclamation by certified States
and Indian tribes may be submitted in accordance with Section 885.15.
However, OSM has elected to retain in the rules subparagraph (a) which
places restrictions and requirements on a certified State or Tribe
concerning the construction of public facilities. These restrictions and
requirements are in direct conflict with the Act where prior balance
replacement funds can be used at the discretion of the State legislature
or Tribal governing body and certified in lieu funds may be used for any
purpose. The existing subparagraphs (a) and (b) should be deleted and
replaced by the language proposed for the new subparagraph (b).

**Section 885.14 -- How long is my grant?**

Comment: The proposed rule would allow States and Tribes to change the
pattern under part 886 for annual awards of new grants. OSM is concerned
about the administrative burden of managing grants which are open for
very long periods. The performance period of the grant should be at the
discretion of the individual States and Tribes. OSM should be more
focused on and concerned with the administrative burden of grants
management related to the myriad (and often confusing) codes utilized in
the process.

**Section 885.15 -- How do I apply for a grant?**

Comment: OSM seeks suggestions for further streamlining the grant
procedures. Our experience so far indicates that the process is already
fairly streamlined and we are not sure how much more it could be
streamlined and still be considered a grant. If OSM wants to really
streamline the process, they should change it from a grant to a direct
payment.

**Section 885.16 -- After OSM approves my grant, what responsibilities
do I have?**

Comment: Subparagraph (b) requires the certified State or Tribe to
ensure compliance with any applicable laws, clearances, permit, or
requirements prior to initiating projects other than coal reclamation.
It is our assumption that a certified State or Tribe will not be
responsible for NEPA since NEPA must have a federal nexus before being
required and OSM maintains in the preamble that no federal decision
authorizing individual expenditures will be made and that there is no
Federal involvement. This should be clarified in the regulations.

**Section 886.13 -- What are the maximum grants amounts?**

Suggested change: Change subparagraph (a) as follows:

\(a\) You may apply at any time for a grant of any or all of the program
funds that ***you are entitled to.***

Justification: This use of this language is more accurate and reflects a
more appropriate perspective on funding for State or Tribal grants.
Also, on pages 35239 -- 35240, OSM provides a list of all available
funds. This list should include minimum program make up funds and
carryover funds from prior years.

Comment: On page 35240, OSM uses the term "any new coal problem". Is
this phrase synonymous with an AML feature? Is it synonymous with
additional units? Clarification would be appreciated.

**Section 886.14(e) -- How long will my grant be?**

Comment: OSM should change both the rule language and the preamble
language to reflect the fact that States and Tribes may select the
option of a five year grant, rather than a one or two year extension of
the normal three year grant for fiscal years 2008 -- 2010. We offer the
following revision:

***(e) Grants containing State or Tribal share funds distributed to you
in Fiscal Years 2008, 2009 or 2010 will be for a budget period of five
years. At your request, we may award or decrease the budget period to
less than five years.***

Comment: It does not appear that section 411(h)(1) Treasury funds are
subject to any of the grant period timelines established by section
402(g)(1)(D). Nor does there appear to be any authority in the Act to
establish timelines for the use of 411 funds. Thus, an annual
distribution payment in the full amount due under section 411 should be
available as an option for grants to each State/Tribe, which in turn
could be deposited into a separate State/Tribal account and considered
State/Tribal funds and used without restriction for any section 403
priority (including AMD abatement).

**Section 886.16 -- After OSM approves my grant, what responsibilities
do I have?**

Suggested Changes: In subparagraph (e), remove the words "design or" and
in subparagraph (e)(2), remove the words "begin project development or
design or".

Justification: We assert that inventory adjustments are not required or
necessary until after actual construction of a project. Therefore, OSM
should remove the requirement that coal problems must be entered in
AMLIS and that amendments to AMLIS must be approved at the project
development and design stage. To require inventory adjustments at an
earlier point would be an overly burdensome process and, contrary to
OSM's statement, may result in wasting time rather than saving time.
There could be instances for which feature reclamation would have to be
abandoned after the work of entering the new inventory data. Ensuring
that features are in AMLIS prior to submitting NEPA documents to OSM has
proven to be highly efficient and effective in satisfying the
requirements of OSM Directive AML-1.

Comment: In the preamble at page 35240, the paragraph discussing the
revisions to subparagraph (e) includes a reference to any new coal
problem under section 403(a) or section 403(b) as requiring approval by
OSM for entry into the AML Inventory. SMCRA Section 403(c), the basis
for the AML Inventory and OSM's approval, does not include section
403(b) *(water supply projects)*, and only includes paragraphs 403(a)(1)
*(Priority 1)* and 403(a)(2) *(Priority 2)* as required for the
inventory and subject to OSM approval.

On page 35264, of the preamble, the proposed definition of "amendment"
is inconsistent with the Change Notice AML 1-2. Compare the following:

-   Proposed 886.16(e) - "any coal problem added to the AML inventory in
    a new or existing problem area and any Priority 3 coal problem in
    the AML inventory that is elevated to either Priority 1 or Priority
    2 status"

-   AML 1-2 -- "all new Abandoned Mine Land (AML) Problem Areas, except
    State Emergency and Remining Problem Areas"

In the context of the AML Inventory the distinction between a "coal
problem" and a "Problem Area" can significantly impact the
administrative burden. In the context of a "coal problem", adding a
portal (P) discovered at the base of a previously inventoried dangerous
highwall (DH), or adding a DH problem to a previously documented
Hazardous Water Body (HWB) would both require OSM approval. In the
context of a "Problem Area" it would not. If the process is too
burdensome, shortcuts and inaccurate data may result.

States and Tribes have already gone back to new sites that were added
since December 2006 to obtain OSM approval. The proposed subsection
886.16(e) will require States and Tribes to go back again to determine
all problem modifications to the inventory since December 2006 and
request OSM approval. Future minor modifications to the inventory, such
as adding a priority 3 problem for a remining area will also require OSM
approval. In both the short and long term, the proposed wording will
create an administrative burden. Alternatives to reduce administrative
burden:

-   Since we are currently operating under the criteria in AML 1-2, make
    the effective date of this section the date of the final rulemaking
    rather than retroactive to 2006.

-   Approve, by rule or an exception, the addition/elevation of a
    Priority1/Priority 2 problem where the combined reclamation cost to
    the AML Fund, due to the change, is nominal, possibly a \$50,000
    threshold. This is intended to cover projects under the AML
    Enhancement Rule, sites reclaimed pursuant to remining incentives,
    projects funded predominantly by non-AML sources, other small or
    short term projects, and to allow accurate documentation of all AML
    problems that exist without unnecessary administrative effort.

-   Consistent with SMCRA Section 403(c), the addition of Priority 3
    problems should not be considered "amendments". To the extent that
    the AML inventory already contains a significant amount of Priority
    3 problems, we do not believe that controlling the addition of new
    Priority 3 problems to the inventory is an effective method to limit
    the number and types of Priority 3 that could be addressed under the
    "in conjunction with" provision. Furthermore, the preamble for
    section 874.13 identifies types of Priority 3 reclamation projects
    that are not affected by the limitation contained in
    874.13(b)(2)(Set-aside, ACSI, WCA, etc.).

Suggested Change: Revise the preamble discussion on page 35240 as
follows:

> We propose revising paragraph (e) to reflect section 403(c) of SMCRA
> that now requires proposed amendments to the AML inventory that are
> made by States and Indian tribes to be approved by OSM, acting for the
> Secretary. 30 U.S.C. 1233(c). In this paragraph, we are proposing to
> define ''amendment'' to mean any new coal problem under section
> 403(a)***(1)*** or section ***403(a)(2)*** of SMCRA that is added to
> the system after ***the effective date of the final rule***. In
> addition, we are proposing that the term ''amendment'' would also
> include instances where you, the State or Indian tribe, elevate a
> Priority 3 coal problem contained in the AML inventory to either
> Priority 1 or Priority 2 status. We are proposing these changes to be
> consistent with section 403(c) of SMCRA, and also section 402(g)(2),
> which requires us to ensure strict compliance by uncertified States
> and Indian tribes with the priorities described in section 403(a) of
> SMCRA.

Suggested Change: Revise section 886.16(e) as follows:

> \(e\) You must enter coal problems in the AML inventory before you
> expend funds on construction activities for a site. We must approve
> any amendments to the AML inventory made after ***the effective date
> of the final rule.***. For purposes of this section, we define
> ''amendment'' as any ***Priority 1 or Priority 2*** coal problem,
> ***except water supply restoration covered under section 874.14,***
> added to the AML inventory in a new or existing problem area and any
> Priority 3 coal problem in the AML inventory that is elevated to
> either Priority 1 or Priority 2 status. ***Minor revisions made for
> purposes of accurately documenting an exiting AML problem area where
> the net change in cost to the AML Fund is less than \$50,000 shall not
> be considered an amendment under this section. Completion reports in
> the AML inventory shall not be considered amendment under this
> section.***

It would also be helpful to add to the preamble descriptions (in
terminology consistent with the AML inventory ) of the types of changes
to the database that constitute "amendments", triggering the need for
OSM approval, and those that are considered revisions not requiring
approval. Example situations:

-   Creation of a new P, HWB, IRW, etc. problem in the same location as
    an existing DH problem.

-   Increasing the length of an existing DH to include a previously
    undocumented highwall segment.

-   Increasing the length of an existing DH to include a highwall
    segment in the inventory as a H (Priority 3)

**Section 886.20 -- What happens to unused funds from My grant?**

Suggested change: Change the word "will" in subparagraph (a) to "may",
as follows:

\(a\) If there are any unexpended funds after your grant is completed,
we ***may*** deobligate the funds when we close your grant.

Justification: There is no requirement that OSM must absolutely
deobligate these funds. It is a discretionary function. The suggested
change is more consistent with the law.

Comment: No treasury payments should be subject to deobligation
requirements. OSM should work with the States and Tribes to insure that
funds do not revert back to the Treasury. With maximum flexibility in
designing payment protocols and with appropriate grant periods and
applicable requirements, there should be no need for reversion of these
payments, especially if OSM and the States/Tribes are working together
to closely monitor the situation.

**RELATED OSM DIRECTIVES, GUIDELINES, FORMS and MANUALS**

There are several existing directives, guidelines, forms and manuals
that accompany or are significantly related to OSM's rules on the AML
program, including the Federal Assistance Manual (FAM), OSM Directive
GMT-10, OSM Directive AML-1, the OSM-1 Form, the Abandoned Mine Land
Inventory Manual and the Final Guidelines for Reclamation Programs and
Projects. Over the past several weeks, OSM has been distributing revised
versions of some of these documents that reflect the changes to the AML
program reflected in the proposed rules. We understood from our
conversations with OSM over the past several months that the agency was
NOT going to initiate changes to any of these documents until after the
rules were finalized. We believe it is premature for OSM to begin the
process of revising these related documents when so many of them
directly rely upon and take their lead from the proposed rule. To do so
only confirms further in our minds that OSM has absolutely no intention
of changing the proposed rule based on these comments and that the
agency has already set its course for the AML program as defined by the
PROPOSED rule rather than the FINAL rule.

**CONCLUSION**

We appreciate the opportunity to submit these comments and trust that
OSM will give them serious consideration as the agency moves forward
with the development of the final rule. We would welcome the opportunity
to meet with OSM to further discuss the rule, should you so desire.
Should you have any questions or require additional information, please
do not hesitate to contact us.

Sincerely,

Loretta Pineda Gregory E. Conrad

President Executive Director

National Association of Interstate Mining Compact Commission

Abandoned Mine Land Programs E-mail: <gconrad@imcc.isa.us>

E-mail: <Loretta.pineda@state.co.us> Phone: (703) 709-8654

Phone: (303) 866-3819

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